10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549 

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2019

Commission File Number 001-11302

KeyCorp

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 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	984,958,009 shares
Title of class	Outstanding at October 28, 2019

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KEYCORP

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

		Page Number
Item 1.	Financial Statements	49
	Consolidated Balance Sheets	49
	Consolidated Statements of Income	50
	Consolidated Statements of Comprehensive Income	51
	Consolidated Statements of Changes in Equity	52
	Consolidated Statements of Cash Flows	53
	Notes to Consolidated Financial Statements (Unaudited)	54
	Note 1.    Basis of Presentation and Accounting Policies	54
	Note 2.    Earnings Per Common Share	56
	Note 3.    Loan Portfolio	57
	Note 4.    Asset Quality	57
	Note 5.    Fair Value Measurements	66
	Note 6.    Securities	75
	Note 7.    Derivatives and Hedging Activities	77
	Note 8.    Mortgage Servicing Assets	83
	Note 9.    Leases	84
	Note 10.  Variable Interest Entities	87
	Note 11.  Income Taxes	88
	Note 12.  Acquisitions, Divestiture, and Discontinued Operations	89
	Note 13.  Securities Financing Activities	89
	Note 14.  Employee Benefits	90
	Note 15.  Trust Preferred Securities Issued by Unconsolidated Subsidiaries	90
	Note 16.  Contingent Liabilities and Guarantees	92
	Note 17.  Accumulated Other Comprehensive Income	93
	Note 18.  Shareholders’ Equity	94
	Note 19.  Business Segment Reporting	95
	Note 20. Revenue from Contracts with Customers	97
	Report of Ernst & Young LLP, Independent Registered Public Accounting Firm	99

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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	10
	Supervision and regulation	10
	Results of Operations	15
	Earnings overview	15
	Net interest income	15
	Provision for credit losses	19
	Noninterest income	19
	Noninterest expense	21
	Income taxes	23
	Business Segment Results	23
	Consumer Bank	23
	Commercial Bank	24
	Financial Condition	26
	Loans and loans held for sale	26
	Securities	30
	Deposits and other sources of funds	32
	Capital	32
	Risk Management	35
	Overview	35
	Market risk management	35
	Liquidity risk management	39
	Credit risk management	40
	Operational and compliance risk management	44
	GAAP to Non-GAAP Reconciliations	45
	Critical Accounting Policies and Estimates	46
	Accounting and Reporting Developments	47
	European Sovereign and Nonsovereign Debt Exposures	48
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	100
Item 4.	Controls and Procedures	100

	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	100
Item 1A.	Risk Factors	100
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	100
Item 6.	Exhibits	101
	Signature	102

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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 September 30, 2019, and September 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 business and Austin. The government-guaranteed and private education lending business and Austin have been accounted for as discontinued operations since 2009.

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

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

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

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 reached the top end of our targeted cash efficiency ratio range of 54% to 56% with a reported 56.0% during the third quarter of 2019, the lowest level in over a decade. This reflected solid balance sheet growth and strong fee income with a record third quarter for investment banking and debt placement fees as well as the successful execution of our cost initiatives and commitment to continuous improvement.

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 third quarter of 2019, our net loan charge-offs to average loans ratio was impacted by a $123 million charge-off related to a previously disclosed fraud loss. Overall, credit quality remains strong as our trailing 12-month net loan charge-offs to average loans remain within our range, as we continue to remain consistent and disciplined in our credit underwriting and portfolio management and are committed to maintaining our moderate risk profile.

Financial Return

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

During the third quarter of 2019, our return on average tangible common equity ratio was impacted by the previously disclosed fraud loss of $94 million, after taxes. During the third quarter of 2019, we repurchased $248 million of Common Shares. We also declared a dividend of $.185 per common share, representing a 9% increase from the prior quarter. 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						Nine months ended September 30,
dollars in millions, except per share amounts	Third			Second			First			Fourth			Third			2019			2018
FOR THE PERIOD
Interest income	$	1,317		$	1,329		$	1,304		$	1,297		$	1,239		$	3,950		$	3,581
Interest expense	345			348			327			297			253			1,020			672
Net interest income	972			981			977			1,000			986			2,930			2,909
Provision for credit losses	200			74			62			59			62			336			187
Noninterest income	650			622			536			645			609			1,808			1,870
Noninterest expense	939			1,019			963			1,012			964			2,921			2,963
Income (loss) from continuing operations before income taxes	483			510			488			574			569			1,481			1,629
Income (loss) from continuing operations attributable to Key	413			423			406			482			482			1,242			1,377
Income (loss) from discontinued operations, net of taxes	3			2			1			2			—			6			5
Net income (loss) attributable to Key	416			425			407			484			482			1,248			1,382
Income (loss) from continuing operations attributable to Key common shareholders	383			403			386			459			468			1,172			1,334
Income (loss) from discontinued operations, net of taxes	3			2			1			2			—			6			5
Net income (loss) attributable to Key common shareholders	386			405			387			461			468			1,178			1,339
PER COMMON SHARE
Income (loss) from continuing operations attributable to Key common shareholders	$	.39		$	.40		$	.38		$	.45		$	.45		$	1.17		$	1.27
Income (loss) from discontinued operations, net of taxes	—			—			—			—			—			.01			.01
Net income (loss) attributable to Key common shareholders (a)	.39			.40			.38			.45			.45			1.18			1.28
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution	.38			.40			.38			.45			.45			1.16			1.26
Income (loss) from discontinued operations, net of taxes — assuming dilution	—			—			—			—			—			.01			.01
Net income (loss) attributable to Key common shareholders — assuming dilution (a)	.39			.40			.38			.45			.45			1.17			1.26
Cash dividends paid	.185			.17			.17			.17			.17			.525			.395
Book value at period end	15.44			15.07			14.31			13.90			13.33			15.44			13.33
Tangible book value at period end	12.48			12.12			11.55			11.14			10.59			12.48			10.59
Weighted-average common shares outstanding (000)	988,319			999,163			1,006,717			1,018,614			1,036,479			998,268			1,048,397
Weighted-average common shares and potential common shares outstanding (000) (b)	998,328			1,007,964			1,016,504			1,030,417			1,049,976			1,007,900			1,062,816
AT PERIOD END
Loans	$	92,760		$	91,937		$	90,178		$	89,552		$	89,268		$	92,760		$	89,268
Earning assets	132,160			130,213			127,296			125,803			125,007			132,160			125,007
Total assets	146,691			144,545			141,515			139,613			138,805			146,691			138,805
Deposits	111,649			109,946			108,175			107,309			105,780			111,649			105,780
Long-term debt	14,470			14,312			14,168			13,732			13,849			14,470			13,849
Key common shareholders’ equity	15,216			15,069			14,474			14,145			13,758			15,216			13,758
Key shareholders’ equity	17,116			16,969			15,924			15,595			15,208			17,116			15,208
PERFORMANCE RATIOS — FROM CONTINUING OPERATIONS
Return on average total assets	1.14		%	1.19		%	1.18		%	1.37		%	1.40		%	1.17		%	1.35		%
Return on average common equity	9.99			10.94			10.98			13.07			13.36			10.62			12.81
Return on average tangible common equity (c)	12.38			13.69			13.69			16.40			16.81			13.23			16.16
Net interest margin (TE)	3.00			3.06			3.13			3.16			3.18			3.06			3.17
Cash efficiency ratio (c)	56.0			61.9			61.9			59.9			58.7			59.9			60.1
PERFORMANCE RATIOS — FROM CONSOLIDATED OPERATIONS
Return on average total assets	1.14		%	1.19		%	1.17		%	1.37		%	1.39		%	1.16		%	1.35		%
Return on average common equity	10.07			11.00			11.01			13.13			13.36			10.68			12.86
Return on average tangible common equity (c)	12.48			13.75			13.72			16.47			16.81			13.30			16.22
Net interest margin (TE)	2.98			3.05			3.12			3.14			3.16			3.05			3.15
Loan-to-deposit (d)	85.3			86.1			85.1			85.6			87.0			85.3			87.0
CAPITAL RATIOS AT PERIOD END
Key shareholders’ equity to assets	11.67		%	11.74		%	11.25		%	11.17		%	10.96		%	11.67		%	10.96		%
Key common shareholders’ equity to assets	10.40			10.46			10.25			10.15			9.93			10.40			9.93
Tangible common equity to tangible assets (c)	8.58			8.59			8.43			8.30			8.05			8.58			8.05
Common Equity Tier 1	9.48			9.57			9.81			9.93			9.95			9.48			9.95
Tier 1 risk-based capital	10.91			11.01			10.94			11.08			11.11			10.91			11.11
Total risk-based capital	12.90			13.03			12.98			12.89			12.99			12.90			12.99
Leverage	9.93			10.00			9.89			9.89			10.03			9.93			10.03
TRUST ASSETS
Assets under management	$	39,416		$	38,942		$	38,742		$	36,775		$	40,575		$	39,416		$	40,575
OTHER DATA
Average full-time-equivalent employees	16,898			17,206			17,554			17,664			18,150			17,217			18,354
Branches	1,101			1,102			1,158			1,159			1,166			1,101			1,166

(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 third 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.

• Our cash efficiency ratio reached the upper end of our targeted cash efficiency ratio range of 54.0% to 56.0%, with a reported 56.0%, which was the lowest level in over a decade reflecting our dedication to grow profitably. Investment banking and debt placement fees reached a record third quarter level and are positioned well for the fourth quarter of 2019. Investments made in our mortgage business continue to drive consumer mortgage income and mortgage servicing fees higher. Noninterest expense was down from the third quarter of 2018, reflecting the successful execution of our cost initiatives, as well as our ongoing commitment to continuous improvement.

• Consumer loans increased $1.4 billion from the year-ago quarter, as growth from Laurel Road, residential mortgage, and indirect auto more than offset the decline in home equity loans. Laurel Road originations were $500 million in the current quarter which highlights our ability to acquire and expand targeted client relationships.

• During the third quarter of 2019, our net loan charge-offs to average loans ratio was impacted by a previously disclosed fraud loss. Our provision for credit losses and net loan charge-offs include $123 million related to the fraud loss. Overall, credit quality remains strong as our trailing 12-month net loan charge-offs to average loans remain within our range. Our new loan originations in both our commercial and consumer book continue to meet our criteria for high quality loans as we continue to effectively manage risk and rewards.

• Maintaining financial strength while driving long-term shareholder value was again a focus during the third quarter of 2019. At September 30, 2019, our Common Equity Tier 1 and Tier 1 risk-based capital ratios stood at 9.48% and 10.91%, respectively. Consistent with our 2019 capital plan, we completed $248 million of Common Share repurchases and the Board declared a common share dividend of $.185 per Common Share.

• During the third quarter, we were recognized by G.I. Jobs and Military Spouse magazine as a Military Friendly^® and Military Friendly^® Spouse Employer. Also, during the third quarter, we received the Leading Disability Employer Seal from the National Organization on Disability. These awards highlight our strategy to engage a high-performing, talented, and diverse workforce.

CEO Transition

On September 19, 2019, we announced that Beth Mooney will retire as Chairman and Chief Executive Officer of KeyCorp, effective May 1, 2020. Our Board has appointed Christopher Gorman as President and Chief Operating Officer. The Board has also appointed Mr. Gorman to the Board for a term expiring at our 2020 Annual Meeting of Shareholders. Mr. Gorman will succeed Ms. Mooney as Chairman and Chief Executive Officer on May 1, 2020. Mr. Gorman’s appointment is in keeping with the Board’s succession management process and will ensure a seamless leadership transition.

LIBOR Transition

As disclosed in Item 1A. Risk Factors of our 2018 Form 10-K, LIBOR in its current form is not expected to be available after 2021. The most likely replacement rate is expected to be SOFR, which has been recommended by the ARRC. The Federal Reserve has encouraged financial institutions not to wait for the end of 2021 to make the transition away from LIBOR. We have established an enterprise wide program to identify and address all LIBOR transition issues. The goals of the LIBOR transition program are to:

• Identify and analyze LIBOR-based exposure and develop and execute transition strategies;

• Review and update near-term strategies and actions for our current LIBOR-based business currently being written;

• Assess financial impact and risk while planning and executing mitigation actions;

• Understand and strategically address the current market approach to LIBOR and SOFR; and

• Determine and execute system and process work to be operationally ready for SOFR.

We are also collaborating closely with regulators and industry groups on the transition. We also expect to leverage recommendations made by the ARRC and ISDA that are tailored to our specific client segments.

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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.

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 September 30, 2019, Key had an estimated Common Equity Tier 1 Capital Ratio of 9.40% under the fully phased-in Regulatory Capital Rules. Also, at September 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 September 30, 2019 Pro forma
Common Equity Tier 1 (a)	4.50	%	2.50	%	7.00	%	9.40	%
Tier 1 Capital	6.00		2.50		8.50		10.82
Total Capital	8.00		2.50		10.50		12.93
Leverage (b)	4.00		N/A		4.00		9.93

(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

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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 September 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.

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 final rule provided an effective date of October 1, 2019, for the technical amendments and an effective date of April 1, 2020, for the simplification changes. On September 17, 2019, the FDIC approved an amendment to the final rule to provide standardized approach banking organizations with the option to implement the simplification changes on either January 1, 2020, or April 1, 2020. The Federal Reserve and the OCC are expected to adopt a similar amendment to the final rule.

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 were due by August 22, 2019.

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 below under the heading “Supervision and regulation — Economic Growth, Regulatory Relief, and Consumer Protection Act.”

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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 below under the heading “Supervision and regulation — Economic Growth, Regulatory Relief, and Consumer Protection Act.”

Resolution planning

BHCs with at least $50 billion in total consolidated assets, like KeyCorp, have been 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, have also been required to submit a resolution plan to the FDIC. These plans have been due annually unless the requirement to submit the plans was 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) until December 2019. On July 26, 2019 (prior to the adoption of the final rule discussed in the next paragraph), the Federal Reserve and FDIC announced that they were further extending the due date for the next resolution plan submissions for 15 firms, including KeyCorp, until July 1, 2021, or such other date that may be specified in a final rule to be adopted by these agencies. 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 October 2019, the Federal Reserve and FDIC adopted a final rule to modify the resolution planning requirements applicable to large BHCs. Under this final rule, BHCs with less than $250 billion in total consolidated assets will no longer be required to submit a resolution plan unless they have $75 billion or more in certain risk-based indicators. Under this final rule, KeyCorp will no longer be subject to resolution planning requirements. 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

On May 24, 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act (“EGRRCPA”) was enacted. EGRRCPA made certain amendments to the Dodd-Frank Act and other federal banking laws, including those provisions in the Dodd-Frank Act dealing with the application of enhanced prudential standards and early remediation requirements (“EPSs”) to large BHCs.

In October 2019, the federal banking agencies issued two final rules related to the implementation of EGRRCPA (“Tailoring Rules”). The final rules establish four risk-based categories of banking organizations with $100 billion or more in total consolidated assets and apply tailored capital and liquidity requirements to each respective category.

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Based on Key’s analysis of the Tailoring Rules, KeyCorp believes that it comes within the least restrictive of those categories (“Category IV Firms”). We do not believe that these rules will have a material impact on Key.

In one of the Tailoring Rules, the Federal Reserve amended certain of its rules governing EPSs to apply tailored capital and liquidity standards to large BHCs in each of the four risk-based categories of institutions described in the Tailoring Rules. Under this rule, Category IV Firms (like KeyCorp) will be required to conduct internal liquidity stress tests quarterly rather than monthly as is currently the case and will be subject to simplified liquidity risk management requirements, including requirements to adopt a set of liquidity risk limits that is more limited than currently required, calculate collateral positions monthly rather than weekly, and monitor fewer elements of intraday liquidity risk exposures. Category IV Firms will still be required to maintain a liquidity buffer that is sufficient to meet the projected net stressed cash-flow need over a 30-day planning horizon under the firm’s internal liquidity stress test and will remain subject to monthly tailored FR 2052a liquidity reporting requirements. Also, under this rule, Category IV Firms (like KeyCorp) will no longer be required to conduct and publicly disclose the results of company-run capital stress tests and will be subject to a supervisory capital stress test conducted by the Federal Reserve every other year rather than every year as has been the case.

In the other Tailoring Rule, the federal banking agencies amended certain elements of their Regulatory Capital Rules and standardized liquidity requirements to apply tailored capital and liquidity requirements to large banking organizations in each of the four risk-based categories of institutions described in the Tailoring Rules. Under this final rule, Category IV Firms with weighted short-term wholesale funding of less than $50 billion will not be subject to a modified Liquidity Coverage Ratio (“LCR”). KeyCorp believes that it does not meet the $50 billion threshold and that it will not be subject to the modified LCR. The final rule adopted by the federal banking agencies also provides that Category IV Firms will not be subject to the countercyclical capital buffer or the supplementary leverage ratio and will be allowed to opt out of including most elements of accumulated other comprehensive income (“AOCI”) in regulatory capital. Under the current Regulatory Capital Rules, KeyCorp is not subject to the countercyclical capital buffer or the supplementary leverage ratio and is allowed to opt out of including AOCI elements in regulatory capital so that part of the final rule will not impact KeyCorp. The Tailoring Rules will be effective 60 days after publication in the Federal Register.

In addition to issuing the Tailoring Rules, the federal banking agencies issued a final rule in October 2019 to implement a provision in EGRRCPA that raises the asset threshold that triggers the requirement for federally-regulated banks to conduct company-run stress tests on an annual basis from $10 billion to $250 billion in total consolidated assets. Under this final rule, federally-regulated banks with total assets of less than $250 billion (like KeyBank) will no longer be required to conduct annual company-run stress tests while federally-regulated banks above this threshold will be required to conduct company-run stress tests every other year or in some cases, every year. Also, this final rule removes the “adverse” scenario as a required scenario for all company-run and supervisory stress testing requirements applicable to BHCs and federally-regulated banks so that such stress tests will be required to include only “baseline” and “severely adverse” scenarios.

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” for a further discussion of EGRRCPA.

Volcker Rule

The Volcker Rule implements Section 619 of the Dodd-Frank Act, which prohibits “banking entities,” such as KeyCorp, KeyBank, and their affiliates and subsidiaries, from owning, sponsoring, or having certain relationships with hedge funds and private equity funds (referred to as “covered funds”) and engaging in short-term proprietary trading of financial instruments, including securities, derivatives, commodity futures, and options on these instruments.

On October 8, 2019, five federal agencies announced their adoption of a final rule to simplify and tailor requirements relating to the Volcker Rule. Among other things, the final rule (i) revises the definition of certain terms relevant in determining the scope of the Volcker Rule; (ii) modifies the eligibility criteria for a banking entity to be able to rely on certain exemptions and exclusions from the proprietary trading and covered fund prohibitions; (iii) adds additional proprietary trading exclusions; and (iv) tailors the rule’s compliance requirements based on the size of a firm’s trading assets and liabilities. Under the final rule, a banking entity is subject to the most stringent compliance requirements if it has “significant” trading assets and liabilities, that is, total consolidated trading assets and liabilities of at least $20 billion. A banking entity with total consolidated trading assets and liabilities between $1

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billion and $20 billion is regarded as having “moderate” trading assets and liabilities and is subject to a requirement to have a simplified compliance program that must be appropriate given that banking entity’s activities, size, scope, and complexity. A presumption of compliance applies to a banking entity with “limited” trading assets and liabilities, that is, total consolidated trading assets and liabilities of less than $1 billion. The effective date of the final rule is January 1, 2020, and the compliance date is January 1, 2021. Key is continuing to review the final rule. Based upon its preliminary assessment, Key believes that it will be regarded as having “moderate” trading assets and liabilities as calculated under the final rule. We do not expect the final rule to have a material impact on Key.

The Volcker Rule is discussed further 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.

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.

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Results of Operations

Earnings overview

The following chart provides a reconciliation of net income from continuing operations attributable to Key common shareholders for the three months ended September 30, 2018, to the three months ended September 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;

• 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.

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TE net interest income was $980 million for the third quarter of 2019, compared to TE net interest income of $993 million for the third quarter of 2018. The decrease in net interest income reflects a lower net interest margin, driven by higher interest-bearing deposit costs, and lower loan fees. Additionally, purchase accounting accretion declined $9 million. These declines were partially offset by higher earning asset balances.

For the nine months ended September 30, 2019, TE net interest income was $3.0 billion, an increase of $22 million from TE net interest income of $2.9 billion for the same period last year. The increase in net interest income was the result of higher earning asset balances, partly offset by a lower net interest margin, driven by higher interest-bearing deposit costs, and lower loan fees. In addition, purchase accounting accretion declined $31 million. For the fourth quarter of 2019, we expect TE net interest income to be relatively stable compared to the third quarter of 2019.

Average loans were $92.0 billion for the third quarter of 2019, an increase of $3.5 billion compared to the third quarter of 2018. Commercial loans increased $2.1 billion, reflecting broad-based growth in commercial and industrial loans, partially offset by declines in commercial mortgage and construction loans. Consumer loans increased $1.4 billion, driven by solid growth from Laurel Road, residential mortgage loans, and indirect auto lending. Home equity loans declined $927 million, largely the result of continued paydowns in home equity lines of credit. For the fourth quarter of 2019, we expect average loans to be up 1% to 3% compared to the third quarter of 2019.

Average deposits totaled $110.3 billion for the third quarter of 2019, an increase of $4.7 billion compared to the year-ago quarter, reflecting growth from consumer and commercial relationships. For the fourth quarter of 2019, we expect average deposits to be relatively stable compared to the third quarter of 2019.

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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 September 30, 2019							Three months ended September 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)	$	48,322		$	543	4.46	%	$	44,749		$	495	4.39	%	$	40		$	8		$	48
Real estate — commercial mortgage	13,056			163		4.95		14,268			176		4.89		(15		)	2			(13		)
Real estate — construction	1,463			19		5.22		1,759			22		5.05		(4		)	1			(3		)
Commercial lease financing	4,497			42		3.68		4,444			43		3.88		1			(2		)	(1		)
Total commercial loans	67,338			767		4.52		65,220			736		4.49		22			9			31
Real estate — residential mortgage	6,256			62		3.97		5,466			55		3.99		8			(1		)	7
Home equity loans	10,488			132		4.97		11,415			137		4.80		(11		)	6			(5		)
Consumer direct loans	2,548			45		6.99		1,789			35		7.71		14			(4		)	10
Credit cards	1,100			32		11.59		1,095			32		11.43		—			—			—
Consumer indirect loans	4,226			43		4.10		3,482			37		4.25		8			(2		)	6
Total consumer loans	24,618			314		5.07		23,247			296		5.06		19			(1		)	18
Total loans	91,956			1,081		4.67		88,467			1,032		4.64		41			8			49
Loans held for sale	1,558			18		4.65		1,117			12		4.59		5			1			6
Securities available for sale (b), (e)	21,867			136		2.52		17,631			102		2.22		26			8			34
Held-to-maturity securities (b)	10,684			64		2.41		12,065			72		2.40		(8		)	—			(8		)
Trading account assets	884			7		3.00		787			7		3.37		1			(1		)	—
Short-term investments	2,861			16		2.19		2,928			15		1.93		—			1			1
Other investments (e)	624			3		1.82		685			6		3.27		—			(3		)	(3		)
Total earning assets	130,434			1,325		4.05		123,680			1,246		3.98		65			14			79
Allowance for loan and lease losses	(881		)					(886		)
Accrued income and other assets	14,605							13,935
Discontinued assets	957							1,186
Total assets	$	145,115						$	137,915
LIABILITIES
NOW and money market deposit accounts	$	64,595		154		.94		$	56,391		82		.58		13			59			72
Savings deposits	4,709			1		.10		5,413			3		.20		—			(2		)	(2		)
Certificates of deposit ($100,000 or more)	7,625			45		2.37		8,186			38		1.86		(3		)	10			7
Other time deposits	5,449			27		1.96		5,026			17		1.40		2			8			10
Total interest-bearing deposits	82,378			227		1.09		75,016			140		.74		12			75			87
Federal funds purchased and securities sold under repurchase agreements	187			—		.50		552			1		1.00		—			(1		)	(1		)
Bank notes and other short-term borrowings	626			4		2.04		596			4		2.76		—			—			—
Long-term debt (f), (g)	13,347			114		3.51		12,678			108		3.34		6			—			6
Total interest-bearing liabilities	96,538			345		1.42		88,842			253		1.13		17			75			92
Noninterest-bearing deposits	27,901							30,610
Accrued expense and other liabilities	2,605							2,065
Discontinued liabilities (g)	957							1,186
Total liabilities	128,001							122,703
EQUITY
Key shareholders’ equity	17,113							15,210
Noncontrolling interests	1							2
Total equity	17,114							15,212
Total liabilities and equity	$	145,115						$	137,915
Interest rate spread (TE)						2.63	%						2.85	%
Net interest income (TE) and net interest margin (TE)				980		3.00	%				993		3.18	%	$	48		$	(61	)	(13		)
TE adjustment (b)				8							7
Net interest income, GAAP basis				$	972						$	986

(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 September 30, 2019, and September 30, 2018.

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

(d) Commercial and industrial average balances include $144 million and $128 million of assets from commercial credit cards for the three months ended September 30, 2019, and September 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

	Nine months ended September 30, 2019							Nine months ended September 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)	$	47,191		$	1,622	4.59	%	$	44,178		$	1,414	4.28	%	$	100		$	108		$	208
Real estate — commercial mortgage	13,744			517		5.03		14,137			513		4.85		(14		)	18			4
Real estate — construction	1,482			60		5.37		1,834			67		4.88		(14		)	7			(7		)
Commercial lease financing	4,490			124		3.66		4,552			125		3.67		(2		)	1			(1		)
Total commercial loans	66,907			2,323		4.64		64,701			2,119		4.38		70			134			204
Real estate — residential mortgage	5,866			176		4.00		5,466			163		3.97		12			1			13
Home equity loans	10,726			404		5.03		11,629			406		4.67		(33		)	31			(2		)
Consumer direct loans	2,256			125		7.42		1,774			101		7.59		27			(3		)	24
Credit cards	1,099			95		11.55		1,085			92		11.32		1			2			3
Consumer indirect loans	3,951			122		4.13		3,363			107		4.27		18			(3		)	15
Total consumer loans	23,898			922		5.15		23,317			869		4.98		25			28			53
Total loans	90,805			3,245		4.77		88,018			2,988		4.54		95			162			257
Loans held for sale	1,329			46		4.64		1,226			40		4.40		3			3			6
Securities available for sale (b), (e)	21,059			400		2.52		17,653			294		2.14		61			45			106
Held-to-maturity securities (b)	11,035			199		2.41		12,111			213		2.35		(19		)	5			(14		)
Trading account assets	988			24		3.22		879			21		3.19		3			—			3
Short-term investments	2,930			49		2.23		2,334			31		1.76		9			9			18
Other investments (e)	639			11		2.18		706			17		3.10		(1		)	(5		)	(6		)
Total earning assets	128,785			3,974		4.12		122,927			3,604		3.90		151			219			370
Allowance for loan and lease losses	(880		)					(879		)
Accrued income and other assets	14,414							13,966
Discontinued assets	1,010							1,243
Total assets	$	143,329						$	137,257
LIABILITIES
NOW and money market deposit accounts	$	62,827		431		.92		$	54,891		187		.46		30			214			244
Savings deposits	4,767			3		.09		5,971			13		.28		(2		)	(8		)	(10		)
Certificates of deposit ($100,000 or more)	8,046			140		2.33		7,563			97		1.72		7			36			43
Other time deposits	5,506			78		1.90		4,947			46		1.25		6			26			32
Total interest-bearing deposits	81,146			652		1.07		73,372			343		.63		41			268			309
Federal funds purchased and securities sold under repurchase agreements	262			1		.63		1,146			10		1.22		(5		)	(4		)	(9		)
Bank notes and other short-term borrowings	706			13		2.43		1,015			17		2.19		(6		)	2			(4		)
Long-term debt (f), (g)	13,241			354		3.62		12,631			302		3.17		15			37			52
Total interest-bearing liabilities	95,355			1,020		1.43		88,164			672		1.02		44			304			348
Noninterest-bearing deposits	28,016							30,701
Accrued expense and other liabilities	2,493							2,102
Discontinued liabilities (g)	1,010							1,243
Total liabilities	126,874							122,210
EQUITY
Key shareholders’ equity	16,454							15,045
Noncontrolling interests	1							2
Total equity	16,455							15,047
Total liabilities and equity	$	143,329						$	137,257
Interest rate spread (TE)						2.69	%						2.88	%
Net interest income (TE) and net interest margin (TE)				2,954		3.06	%				2,932		3.17	%	$	107		$	(85	)	$	22
TE adjustment (b)				24							23
Net interest income, GAAP basis				$	2,930						$	2,909

(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 nine months ended September 30, 2019, and September 30, 2018, respectively.

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

(d) Commercial and industrial average balances include $139 million and $125 million of assets from commercial credit cards for the nine months ended September 30, 2019, and September 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 $200 million for the three months ended September 30, 2019, compared to $62 million for the three months ended September 30, 2018. Provision for credit losses was $336 million for the nine months ended September 30, 2019, compared to $187 million for the nine months ended September 30, 2018. The provision for credit losses increased during the three and nine months ended September 30, 2019, primarily due to the realization of $123 million from a previously disclosed fraud loss. For the fourth quarter of 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 $650 million, and represented 40% of total revenue for the third quarter of 2019, compared to $609 million, representing 38% of total revenue for the year-ago quarter. Noninterest income was $1.8 billion for the nine months ended September 30, 2019, compared to $1.9 billion for the nine months ended September 30, 2018. For the fourth quarter of 2019, we expect noninterest income to be up 1% to 3% compared to the third quarter of 2019.

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 September 30, 2019, trust and investment services income increased $1 million,

or .9%, compared to the same period one year ago primarily due to an increase in trust and asset management fees. For the nine months ended September 30, 2019, trust and investment services income was down $23 million, or 6.1%, from the nine months ended September 30, 2018, primarily related to the sale of KIBS in May 2018, which contributed $22 million of income for the nine months ended September 30, 2018. 

A significant portion of our trust and investment services income depends on the value and mix of assets under management. At September 30, 2019, our bank, trust, and registered investment advisory subsidiaries had assets under management of $39.4 billion, compared to $40.6 billion at September 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	September 30, 2019		June 30, 2019		March 31, 2019		December 31, 2018		September 30, 2018
Assets under management by investment type:
Equity	$	23,967	$	23,805	$	23,299	$	21,325	$	24,958
Securities lending	455		520		761		774		1,049
Fixed income	10,954		10,800		10,817		10,696		10,946
Money market	4,040		3,817		3,865		3,980		3,622
Total assets under management	$	39,416	$	38,942	$	38,742	$	36,775	$	40,575

Investment banking and debt placement fees

Investment banking and debt placement fees consists of syndication fees, debt and equity financing fees, financial adviser fees, gains on sales of commercial mortgages, and agency origination fees. Investment banking and debt placement fees increased $10 million, or 6.0%, from the year-ago quarter. The increase was primarily driven by higher investment banking income and commercial mortgage gains on sale. For the nine months ended September

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30, 2019, investment banking and debt placement fees were down $15 million, or 3.2%, from the nine months ended September 30, 2018, primarily due to the market disruption from the government shutdown early in 2019.

Service charges on deposit accounts

Service charges on deposit accounts increased $1 million, or 1.2%, for the three months ended September 30, 2019, compared to the same period one year ago. For the nine months ended September 30, 2019, service charges on deposit accounts was down $14 million, or 5.3%, from the nine months ended September 30, 2018.

Cards and payments income

Cards and payments income, which consists of debit card, consumer and commercial credit card, and merchant services income, was flat compared to the year-ago quarter. For the nine months ended September 30, 2019, cards and payments income was up $6 million, or 3.0%, from the nine months ended September 30, 2018. These increases were primarily due to higher debit card, credit card, and merchant fees.

Other noninterest income

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

corporate-owned life insurance income, consumer mortgage income, mortgage servicing fees, and other income. Other noninterest income increased $29 million, or 16.9%, from the year-ago quarter, primarily due to an increase in derivative and foreign exchange income in corporate services income, higher consumer mortgage income and mortgage servicing fees driven by investments made in our mortgage business, and a $15 million gain from the sale of an investment in other income.

For the nine months ended September 30, 2019, other noninterest income was down $16 million, or 2.9%, from the nine months ended September 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, as well as higher consumer mortgage income and mortgage servicing fees.

Noninterest expense

As shown in Figure 7, noninterest expense was $939 million for the third quarter of 2019, compared to $964 million for the third quarter of 2018. Noninterest expense was $2.9 billion for the nine months ended September 30, 2019, compared to $3.0 billion for the nine months ended September 30, 2018. For the fourth quarter of 2019, we expect noninterest expense to be up 1% to 3% compared to the third quarter of 2019.

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, decreased by $6 million, or 1.1%, for the three months ended September 30, 2019, compared to the same period one year ago. For the nine months ended September 30, 2019, personnel expense was down $34 million, or 2.0%, from the nine months ended September 30, 2018. These decreases reflected the successful implementation of our expense initiatives, which resulted in a decrease in salary expense.

Net occupancy

Net occupancy expense decreased $4 million, or 5.3%, for the third quarter of 2019, compared to the same period one year ago. For the nine months ended September 30, 2019, net occupancy expense was down $16 million, or 6.9%, from the nine months ended September 30, 2018. These decreases were primarily due to lower depreciation and improvement expenses.

Other noninterest expense

Other noninterest expense includes equipment, operating lease expense, marketing, FDIC assessment, intangible asset amortization, OREO expense, and other miscellaneous expense categories. Other noninterest expense decreased $16 million, or 6.7%, from the year-ago quarter, primarily due to the elimination of the FDIC surcharge.

For the nine months ended September 30, 2019, other noninterest expense was up $3 million, or .4%, from the nine months ended September 30, 2018. This increase was primarily due to an increase in charitable contributions and volume-driven expenses, which was partially offset by the elimination of the FDIC surcharge.

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Income taxes

We recorded tax expense of $70 million for the third quarter of 2019 and $87 million for the third 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 clients’ 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 attributable to Key of $194 million for the third quarter of 2019, compared to $168 million for the year-ago quarter.

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• Taxable equivalent net interest income increased by $12 million, or 2.1%, from the third quarter of 2018. The increase in net interest income was primarily driven by balance sheet growth.

• Average loans and leases increased $1.6 billion, or 5.1%. This was driven by Laurel Road along with strength in residential mortgage and indirect auto lending. This growth was partially offset by a $904 million, or 8.0%, decrease in home equity balances.

• Average deposits increased $3.9 billion, or 5.6%, from the third 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 $16 million compared to the third quarter of 2018, driven by balance sheet growth. Credit quality remained stable to the year-ago quarter.

• Noninterest income increased $12 million, or 5.3%, from the year ago quarter. This was primarily driven by growth in consumer mortgage income which increased $5 million, or 55.6%.

• Noninterest expense decreased $26 million, or 4.7%, 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 expenses related to 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 $304 million for the third quarter of 2019, compared to $274 million for the year-ago quarter.

• Taxable-equivalent net interest income decreased by $16 million, or 3.9%, compared to the third quarter of 2018, driven by lower purchase accounting accretion and loan spread compression.

• Average loan and lease balances increased $2.1 billion, or 3.8%, compared to the third quarter of 2018 driven by broad-based growth in commercial and industrial loans.

• Average deposit balances increased $2.6 billion, or 7.7%, compared to the third quarter of 2018, driven by growth in core deposits.

• Provision for credit losses increased $1 million compared to the third quarter of 2018. Credit quality remained relatively stable compared to the third quarter of 2018.

• Noninterest income increased $42 million, or 12.4%, from the prior year. Investment banking and debt placement fees increased $11 million, or 6.7%, from the prior year, primarily related to strength in commercial mortgage fees. Corporate services income increased $10 million, or 21.7%, driven by increased client activity related to derivatives.

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• Noninterest expense decreased by $13 million, or 3.4%, from the third 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 September 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 September 30, 2019, total loans outstanding from continuing operations were $92.8 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 $67.5 billion at September 30, 2019, an increase of $1.2 billion, or 1.8%, 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 September 30, 2019, and December 31, 2018.

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Figure 9. Commercial Loans by Industry

September 30, 2019	Commercial and industrial		Commercial real estate		Commercial lease financing		Total commercial loans		Percent of total
dollars in millions
Industry classification:
Agriculture	$	992	$	172	$	119	$	1,283	1.9	%
Automotive	2,026		437		25		2,488		3.7
Business products	1,593		111		58		1,762		2.6
Business services	3,216		212		210		3,638		5.4
Chemicals	826		48		50		924		1.4
Commercial real estate	5,225		10,148		12		15,385		22.8
Construction materials and contractors	1,917		229		210		2,356		3.5
Consumer discretionary	3,764		407		475		4,646		6.9
Consumer services	4,225		792		515		5,532		8.2
Equipment	1,462		85		81		1,628		2.4
Finance	6,100		61		399		6,560		9.7
Healthcare	3,717		1,532		364		5,613		8.3
Materials manufacturing and mining	1,124		52		40		1,216		1.8
Oil and gas	2,019		54		72		2,145		3.2
Public exposure	2,413		24		681		3,118		4.6
Technology	829		27		116		972		1.4
Transportation	1,271		239		712		2,222		3.3
Utilities	5,267		3		329		5,599		8.3
Other	376		14		2		392		.6
Total	$	48,362	$	14,647	$	4,470	$	67,479	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 52% of our total loan portfolio at September 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 $48.4 billion at September 30, 2019, an increase of $2.6 billion, or 5.7%, compared to December 31, 2018. The growth was broad-based and spread across most industry categories, including increased lending in finance, utilities, consumer services, and business services.

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 79% of total commercial real estate loans outstanding at September 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 September 30, 2019, commercial real estate loans totaled $14.6 billion, which includes $1.5 billion of construction loans. Compared to December 31, 2018, this portfolio decreased $1.3 billion, or 8.2%, driven by

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elevated paydowns 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
September 30, 2019
Nonowner-occupied:
Retail properties	$	111	$	41	$	149	$	163	$	188	$	598	$	168	$	1,418	9.7	%	$	77	$	1,341
Multifamily properties	643		184		842		701		1,182		1,294		284		5,130		35.0		1,146		3,984
Health facilities	68		—		63		62		153		535		401		1,282		8.8		31		1,251
Office buildings	202		7		359		98		161		795		137		1,759		12.0		73		1,686
Warehouses	51		35		23		21		23		247		140		540		3.7		9		531
Manufacturing facilities	33		—		35		3		40		60		32		203		1.4		4		199
Hotels/Motels	76		—		7		—		10		150		66		309		2.1		4		305
Residential properties	—		—		10		1		22		102		—		135		.9		4		131
Land and development	20		5		—		3		—		6		—		34		.2		29		5
Other	53		8		28		113		17		256		329		804		5.5		17		787
Total nonowner-occupied	1,257		280		1,516		1,165		1,796		4,043		1,557		11,614		79.3		1,394		10,220
Owner-occupied	834		10		292		490		39		1,368		—		3,033		20.7		86		2,947
Total	$	2,091	$	290	$	1,808	$	1,655	$	1,835	$	5,411	$	1,557	14,647		100.0	%	$	1,480	$	13,167
Nonperforming loans	—		—		—		$	12	$	12	$	22	$	52	$	98	N/M		2		$	96
Accruing loans past due 90 days or more	—		—		—		1		—		12		—		13		N/M		$	1	12
Accruing loans past due 30 through 89 days	$	4	—		$	—	7		—		36		—		47		N/M		9		38
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 $2.0 billion, or 8.8%, 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 $500 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 41% of consumer loans outstanding at September 30, 2019. 

We held the first lien position for approximately 60% of the home equity portfolio at both September 30, 2019, and September 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
September 30, 2019
New York	$	1,157	$	2,688	$	503	$	396	$	781	$	5,525
Ohio	558		1,469		432		243		745		3,447
Washington	988		1,601		234		101		9		2,933
Connecticut	1,040		382		59		25		152		1,658
Pennsylvania	280		682		149		54		421		1,586
Oregon	469		866		86		47		2		1,470
Colorado	440		455		93		34		2		1,024
Maine	118		440		67		37		342		1,004
Indiana	113		413		125		46		103		800
Massachusetts	254		49		63		6		413		785
Other	1,110		1,411		978		116		1,434		5,049
Total	$	6,527	$	10,456	$	2,789	$	1,105	$	4,404	$	25,281
	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 nine 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		Consumer Direct		Total
2019
Third quarter	$	220	$	2,600	$	68	$	569	247		$	3,704
Second quarter	154		1,864		96		329		—		2,443
First quarter	301		1,536		34		225		—		2,096
Total	$	675	$	6,000	$	198	$	1,123	$	247	$	8,243
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	September 30, 2019		June 30, 2019		March 31, 2019		December 31, 2018		September 30, 2018
Commercial real estate loans	$	317,152	$	310,792	$	300,989	$	291,158	$	270,771
Residential mortgage	5,749		5,428		5,304		5,209		5,046
Education loans	658		693		727		766		804
Commercial lease financing	969		934		924		916		892
Commercial loans	590		588		562		549		534
Consumer direct	2,272		—		—		—		—
Total	$	327,390	$	318,435	$	308,506	$	298,598	$	278,047

In the event of default by a borrower, we are subject to recourse with respect to approximately $4.6 billion of the $327.4 billion of loans administered or serviced at September 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 $32.9 billion at September 30, 2019, compared to $30.9 billion at December 31, 2018. Available-for-sale securities were $22.4 billion at September 30, 2019, compared to $19.4 billion at December 31, 2018. Held-to-maturity securities were $10.5 billion at September 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	September 30, 2019		December 31, 2018
FHLMC	$	5,339	$	7,048
FNMA	12,692		10,076
GNMA	14,523		13,637
Total (a)	$	32,554	$	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)
September 30, 2019
Remaining maturity:
One year or less	$	159		$	1		$	149		$	4		—			$	11	$	324		2.28	%
After one through five years	113			3			11,899			1,579			$	3,448		—		17,042			2.46
After five through ten years	—			—			1,489			368			3,147			—		5,004			2.78
After ten years	—			—			—			8			—			—		8			3.27
Fair value	$	272		$	4		$	13,537		$	1,959		$	6,595		$	11	$	22,378		—
Amortized cost	273			4			13,473			1,925			6,440			7		22,122			2.53	%
Weighted-average yield (b)	2.06		%	5.44		%	2.35		%	2.70		%	2.85		%	—		2.53		%	—
Weighted-average maturity	1.6 years			0.9 years			3.6 years			4.1 years			5.3 years			.8 years		4.1 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 and asset-backed securities. 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)			Asset-backed securities			Other Securities			Total			Weighted-Average Yield (b)
September 30, 2019
Remaining maturity:
One year or less	$	38		—			—			$	4		$	4		$	46		1.92	%
After one through five years	5,306			171			$	2,036		8			11			7,532			2.34
After five through ten years	728			$	261		1,923			—			—			2,912			2.63
After ten years	—			—			—			—			—			—			—
Amortized cost	$	6,072		$	432		$	3,959		$	12		$	15		$	10,490		2.42	%
Fair value	6,069			438			4,072			12			15			10,606			—
Weighted-average yield (b)	2.11		%	2.67		%	2.86		%	2.45		%	3.29		%	2.42		%	—
Weighted-average maturity	3.7 years			5.9 years			5.7 years			3.4 years			2.2 years			4.6 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 September 30, 2019

Deposits are our primary source of funding. At September 30, 2019, our deposits totaled $111.6 billion, an increase of $4.3 billion compared to December 31, 2018. The increase was driven by growth from consumer and commercial relationships.

Wholesale funds, consisting of short-term borrowings and long-term debt, totaled $15.4 billion at September 30, 2019, compared to $14.6 billion at December 31, 2018, reflecting 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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Dividends

Consistent with our 2019 capital plan, we paid a quarterly dividend of $.185 per Common Share for the third 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 33,546 holders of record at September 30, 2019. Our book value per Common Share was $15.44 based on 988.5 million shares outstanding at September 30, 2019, compared to $13.90 per Common Share based on 1.020 billion shares outstanding at December 31, 2018. At September 30, 2019, our tangible book value per Common Share was $12.48, 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	Third		Second		First		Fourth		Third
Shares outstanding at beginning of period	1,003,114		1,013,186		1,019,503		1,034,287		1,058,944
Open market repurchases and return of shares under employee compensation plans	(15,076	)	(10,412	)	(11,791	)	(15,216	)	(25,418	)
Shares issued under employee compensation plans (net of cancellations)	500		340		5,474		432		761
Shares outstanding at end of period	988,538		1,003,114		1,013,186		1,019,503		1,034,287

As shown above, Common Shares outstanding decreased by 14.6 million shares during the third quarter of 2019.

At September 30, 2019, we had 268.2 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.

Capital adequacy

Capital adequacy is an important indicator of financial stability and performance. All of our capital ratios remained in excess of regulatory requirements at September 30, 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 11.67% at September 30, 2019, compared to 11.17% at December 31, 2018. Our tangible common equity to tangible assets ratio was 8.58% at September 30, 2019,

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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 September 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 September 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	September 30, 2019			December 31, 2018
COMMON EQUITY TIER 1
Key shareholders’ equity (GAAP)		$	17,116		$	15,595
Less:	Preferred Stock (a)	1,856			1,421
	Common Equity Tier 1 capital before adjustments and deductions	15,260			14,174
Less:	Goodwill, net of deferred taxes	2,588			2,455
	Intangible assets, net of deferred taxes	223			250
	Deferred tax assets	11			9
	Net unrealized gains (losses) on available-for-sale securities, net of deferred taxes	196			(372		)
	Accumulated gains (losses) on cash flow hedges, net of deferred taxes	311			(78		)
	Amounts in AOCI attributed to pension and postretirement benefit costs, net of deferred taxes	(361		)	(381		)
	Total Common Equity Tier 1 capital	$	12,292		$	12,291
TIER 1 CAPITAL
Common Equity Tier 1		$	12,292		$	12,291
Additional Tier 1 capital instruments and related surplus		1,856			1,421
Less:	Deductions	—			—
	Total Tier 1 capital	14,148			13,712
TIER 2 CAPITAL
Tier 2 capital instruments and related surplus		1,616			1,279
Allowance for losses on loans and liability for losses on lending-related commitments (b)		970			962
Less:	Deductions	—			—
	Total Tier 2 capital	2,586			2,241
	Total risk-based capital	$	16,734		$	15,953
RISK-WEIGHTED ASSETS
Risk-weighted assets on balance sheet		$	101,288		$	98,232
Risk-weighted off-balance sheet exposure		26,821			24,593
Market risk-equivalent assets		1,593			963
Gross risk-weighted assets		129,702			123,788
Less:	Excess allowance for loan and lease losses	—			—
	Net risk-weighted assets	$	129,702		$	123,788
AVERAGE QUARTERLY TOTAL ASSETS		$	142,446		$	138,689
CAPITAL RATIOS
Tier 1 risk-based capital		10.91		%	11.08		%
Total risk-based capital		12.90			12.89
Leverage (c)		9.93			9.89
Common Equity Tier 1		9.48			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 $11 million and $14 million of allowance classified as “discontinued assets” on the balance sheet at September 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 September 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 September 30, 2019, and September 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

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

The aggregate VaR at the 99% confidence level with a one day holding period for all covered positions was $1.0 million at September 30, 2019, and $.8 million at September 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 September 30, 2019, and September 30, 2018.

Figure 20. VaR for Significant Portfolios of Covered Positions 

	2019								2018
	Three months ended September 30,								Three months ended September 30,
in millions	High		Low		Mean		September 30,		High		Low		Mean		September 30,
Trading account assets:
Fixed income	$	1.0	$	.3	$	.5	$	.8	$	.9	$	.4	$	.7	$	.4
Derivatives:
Interest rate	$	.1	—		$	.1	$	.1	$	.2	$	.1	$	.1	$	.1

Stressed VaR is calculated by running the portfolios through a predetermined stress period which is approved by the MRC and is calculated at the 99% confidence level using the same model and assumptions used for general VaR. The aggregate stressed VaR for all covered positions was $4.5 million at September 30, 2019, and $5.9 million at September 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 September 30, 2019, and September 30, 2018.

Figure 21. Stressed VaR for Significant Portfolios of Covered Positions 

	2019								2018
	Three months ended September 30,								Three months ended September 30,
in millions	High		Low		Mean		September 30,		High		Low		Mean		September 30,
Trading account assets:
Fixed income	$	4.3	$	2.4	$	3.2	$	3.3	$	4.9	$	2.7	$	4.0	$	4.2
Derivatives:
Interest rate	$	.9	$	.2	$	.5	$	.7	$	.7	$	.3	$	.4	$	.7

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 $96 million at September 30, 2019. This amount included $57 million of mortgage-backed securities positions and $39 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 rates were to gradually increase or decrease over the next 12 months (subject to a 25 basis point floor in rates).

Figure 22 presents the results of the simulation analysis at September 30, 2019, and September 30, 2018. At September 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

	September 30, 2019				September 30, 2018
Basis point change assumption (short-term rates)	-175		+200		-200		+200
Tolerance level	-5.50	%	-5.50	%	-5.50	%	-5.50	%
Interest rate risk assessment	-1.66	%	-2.06	%	-5.25	%	2.95	%

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 95 basis points.

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

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

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

	September 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	$	320			2.3	2.2	%	2.1	%	$	10,720	$	(87	)
Receive fixed/pay variable — conventional debt	9,059		313				3.1	2.2		2.0		9,923		(7		)
Receive fixed/pay variable — forward A/LM	3,050		122				3.2	3.0		1.7		3,050		45
Pay fixed/receive variable — conventional debt	50		(8		)		8.8	2.3		3.6		50		(4		)
Pay fixed/receive variable — securities	5		—				.1	2.1		2.2		—		—
Total portfolio swaps	$	28,484	$	747		(c)	2.7	2.3	%	2.0	%	$	23,743	$	(53	)	(c)
Floors — conventional A/LM — purchased (b)	$	4,750	$	168			1.8	—		—		$	4,760	—
Floors — conventional A/LM — sold (b)	3,700		(26		)		2.2	—		—		—		—
Total floors	$	8,450	$	142			2.0	—		—		$	4,760	—

(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 $700 million and $114 million at September 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 September 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 

September 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 September 30, 2019, our consolidated loan-to-deposit ratio was 85%. In addition, we also have access to various sources of wholesale funding, maintain a portfolio of liquid assets, and have borrowing capacity at the FHLB and Federal Reserve Bank of Cleveland. Our liquid asset portfolio at September 30, 2019, totaled $27.9 billion, consisting of $24.8 billion of unpledged securities, $157 million of securities available for secured funding at the FHLB, and $2.9 billion of net balances of federal funds sold and balances in our Federal Reserve account. Additionally, as of September 30, 2019, our unused borrowing capacity secured by loan collateral was $25 billion at the Federal Reserve Bank of

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Cleveland and $7.5 billion at the FHLB. During the third quarter of 2019, our outstanding FHLB advances decreased as $147 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 September 30, 2019, KeyCorp held $4.2 billion in cash, which we projected to be sufficient to meet our projected obligations, including the repayment of our maturing debt obligations for the periods prescribed by our risk tolerance.

Typically, KeyCorp meets its liquidity requirements through regular dividends from KeyBank. During the third quarter of 2019, KeyBank paid $129 million in cash dividends to KeyCorp. As of September 30, 2019, KeyBank had regulatory capacity to pay $1.3 billion in dividends to KeyCorp without prior regulatory approval.

On September 11, 2019, KeyCorp issued $750 million of 2.550% Senior Notes due October 1, 2029, under its Medium-Term Note Program.

On September 19, 2019, KeyCorp gave notice that on October 21, 2019, it would redeem for cash all of the outstanding $300 million aggregate principal amount of its 6.75% Senior Notes due March 19, 2020.

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 and cash held at the Federal Reserve. The liquid asset portfolio continues to exceed the amount that we estimate would be necessary to manage through an adverse liquidity event by providing sufficient time to develop and execute a longer-term solution.

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

For more information regarding liquidity governance structure, factors 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

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with similar risk characteristics. We exercise judgment to assess any adjustment to the incurred loss rates for the impact of factors such as changes in economic conditions, lending policies including underwriting standards, and the level of credit risk associated with specific industries and markets. The ALLL at September 30, 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”).

As shown in Figure 25, our ALLL from continuing operations increased by $10 million, or 1.1%, from December 31, 2018. Our commercial ALLL increased by $3 million, or .4%, 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 $7 million, or 5.0%, 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 

	September 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	$	554	62.0	%	52.1	%	$	532	60.2	%	51.1	%
Commercial real estate:
Commercial mortgage	134		15.0		14.2		142		16.1		15.9
Construction	23		2.6		1.6		33		3.8		1.9
Total commercial real estate loans	157		17.6		15.8		175		19.9		17.8
Commercial lease financing	35		3.9		4.8		36		4.1		5.1
Total commercial loans	746		83.5		72.7		743		84.2		74.0
Real estate — residential mortgage	7		.8		7.0		7		.8		6.2
Home equity loans	33		3.7		11.3		35		3.9		12.4
Consumer direct loans	34		3.8		3.0		30		3.4		2.0
Credit cards	46		5.2		1.2		48		5.4		1.3
Consumer indirect loans	27		3.0		4.8		20		2.3		4.1
Total consumer loans	147		16.5		27.3		140		15.8		26.0
Total loans (a)	$	893	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 $11 million at September 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 September 30, 2019, increased $136 million compared to the year-ago quarter. This increase was primarily due to a $123 million charge-off related to a previously disclosed fraud loss. For the fourth quarter of 2019, we expect net loan charge-offs to be relatively stable compared to the third quarter of 2019, excluding the fraud loss impact.

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

	2019									2018
dollars in millions	Third			Second			First			Fourth			Third
Commercial and industrial	$	170		$	24		$	26		$	26		$	33
Real estate — Commercial mortgage	—			—			4			11			5
Real estate — Construction	—			—			4			(1		)	—
Commercial lease financing	—			14			7			—			1
Total commercial loans	170			38			41			36			39
Real estate — Residential mortgage	1			1			—			—			—
Home equity loans	4			4			2			5			1
Consumer direct loans	8			8			9			7			9
Credit cards	9			10			9			8			8
Consumer indirect loans	4			4			3			4			3
Total consumer loans	26			27			23			24			21
Total net loan charge-offs	$	196		$	65		$	64		$	60		$	60
Net loan charge-offs to average loans	.85		%	.29		%	.29		%	.27		%	.27		%
Net loan charge-offs from discontinued operations — education lending business	—			$	3		$	3		$	3		$	3

(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 September 30,						Nine months ended September 30,
dollars in millions	2019			2018			2019			2018
Average loans outstanding	$	91,956		$	88,467		$	90,805		$	88,018
Allowance for loan and lease losses at beginning of period	$	890		$	887		$	883		$	877
Loans charged off:
Commercial and industrial	176			38			242			114
Real estate — commercial mortgage	—			6			6			9
Real estate — construction	—			—			4			—
Commercial lease financing	1			4			25			9
Total commercial loans	177			48			277			132
Real estate — residential mortgage	1			2			3			3
Home equity loans	6			4			16			14
Consumer direct loans	10			10			30			27
Credit cards	11			10			34			34
Consumer indirect loans	8			7			24			22
Total consumer loans	36			33			107			100
Total loans charged off	213			81			384			232
Recoveries:
Commercial and industrial	6			5			22			18
Real estate — commercial mortgage	—			1			2			2
Real estate — construction	—			—			—			1
Commercial lease financing	1			3			4			4
Total commercial loans	7			9			28			25
Real estate — residential mortgage	—			2			1			2
Home equity loans	2			3			6			9
Consumer direct loans	2			1			5			5
Credit cards	2			2			6			5
Consumer indirect loans	4			4			13			12
Total consumer loans	10			12			31			33
Total recoveries	17			21			59			58
Net loan charge-offs	(196		)	(60		)	(325		)	(174		)
Provision (credit) for loan and lease losses	199			60			335			184
Allowance for loan and lease losses at end of period	$	893		$	887		$	893		$	887
Liability for credit losses on lending-related commitments at beginning of period	$	64		$	58		$	64		$	57
Provision (credit) for losses on lending-related commitments	1			2			1			3
Liability for credit losses on lending-related commitments at end of period (a)	$	65		$	60		$	65		$	60
Total allowance for credit losses at end of period	$	958		$	947		$	958		$	947
Net loan charge-offs to average total loans	.85		%	.27		%	.48		%	.26		%
Allowance for loan and lease losses to period-end loans	.96			0.99			.96			0.99
Allowance for credit losses to period-end loans	1.03			1.06			1.03			1.06
Allowance for loan and lease losses to nonperforming loans	152.6			137.5			152.6			137.5
Allowance for credit losses to nonperforming loans	163.8			146.8			163.8			146.8
Discontinued operations — education lending business:
Loans charged off	$	1		$	4		$	9		$	11
Recoveries	1			1			3			4
Net loan charge-offs	$	—		$	(3	)	$	(6	)	$	(7	)

(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 September 30, 2019, increased $134 million from December 31, 2018. This increase was primarily driven by the transfer of three criticized commercial loans as well as a number of consumer residential mortgages that were moved to nonperforming loans held for sale.

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	September 30, 2019			June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018
Commercial and industrial	$	238		$	189		$	170		$	152		$	227
Real estate — commercial mortgage	92			85			82			81			98
Real estate — construction	2			2			2			2			2
Total commercial real estate loans (a)	94			87			84			83			100
Commercial lease financing	7			7			9			9			10
Total commercial loans (b)	339			283			263			244			337
Real estate — residential mortgage	42			62			64			62			62
Home equity loans	179			191			195			210			221
Consumer direct loans	3			3			3			4			4
Credit cards	2			2			3			2			2
Consumer indirect loans	20			20			20			20			19
Total consumer loans	246			278			285			298			308
Total nonperforming loans (c)	585			561			548			542			645
OREO	39			38			40			35			28
Nonperforming loans held for sale	78			—			—			—			—
Other nonperforming assets	9			9			9			—			1
Total nonperforming assets (c)	$	711		$	608		$	597		$	577		$	674
Accruing loans past due 90 days or more	$	54		$	74		$	118		$	112		$	87
Accruing loans past due 30 through 89 days	366			299			290			312			368
Restructured loans — accruing and nonaccruing (d)	347			395			365			399			366
Restructured loans included in nonperforming loans (d)	176			228			198			247			211
Nonperforming assets from discontinued operations — education lending business	7			7			7			8			6
Nonperforming loans to period-end portfolio loans (c)	.63		%	.61		%	.61		%	.61		%	.72		%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets (c)	.77			.66		%	.66		%	.64		%	.75		%

(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 $497 million, $518 million, $551 million, $575 million, and $606 million of PCI loans at September 30, 2019, June 30, 2019, March 31, 2019, December 31, 2018, and September 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	Third			Second			First			Fourth			Third
Balance at beginning of period	$	561		$	548		$	542		$	645		$	545
Loans placed on nonaccrual status	271			189			196			103			263
Charge-offs	(91		)	(84		)	(91		)	(92		)	(81		)
Loans sold	—			(38		)	(18		)	(16		)	—
Payments	(37		)	(23		)	(22		)	(53		)	(57		)
Transfers to OREO	(4		)	(4		)	(8		)	(10		)	(5		)
Transfers to nonperforming loans held for sale	(78		)	—			—			—			—
Transfers to other nonperforming assets	—			—			(13		)	—			—
Loans returned to accrual status	(37		)	(27		)	(38		)	(35		)	(20		)
Balance at end of period (a)	$	585		$	561		$	548		$	542		$	645

(a) Nonperforming loan balances exclude $497 million, $518 million, $551 million, $575 million, and $606 million of PCI loans at September 30, 2019, June 30, 2019, March 31, 2019, December 31, 2018, and September 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

44

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															Nine months ended
dollars in millions		9/30/2019			6/30/2019			3/31/2019			12/31/2018			9/30/2018			9/30/2019			9/30/2018
Tangible common equity to tangible assets at period-end
Key shareholders’ equity (GAAP)		$	17,116		$	16,969		$	15,924		$	15,595		$	15,208
Less:	Intangible assets (a)	2,928			2,952			2,804			2,818			2,838
	Preferred Stock (b)	1,856			1,856			1,421			1,421			1,421
	Tangible common equity (non-GAAP)	$	12,332		$	12,161		$	11,699		$	11,356		$	10,949
Total assets (GAAP)		$	146,691		$	144,545		$	141,515		$	139,613		$	138,805
Less:	Intangible assets (a)	2,928			2,952			2,804			2,818			2,838
	Tangible assets (non-GAAP)	$	143,763		$	141,593		$	138,711		$	136,795		$	135,967
	Tangible common equity to tangible assets ratio (non-GAAP)	8.58		%	8.59		%	8.43		%	8.30		%	8.05		%
Average tangible common equity
Average Key shareholders’ equity (GAAP)		$	17,113		$	16,531		$	15,702		$	15,384		$	15,210		$	16,454		$	15,045
Less:	Intangible assets (average) (c)	2,942			2,959			2,813			2,828			2,848			2,905			2,882
	Preferred Stock (average)	1,900			1,762			1,450			1,450			1,316			1,705			1,123
	Average tangible common equity (non-GAAP)	$	12,271		$	11,810		$	11,439		$	11,106		$	11,046		$	11,844		$	11,040
Return on average tangible common equity from continuing operations
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP)		$	383		$	403		$	386		$	459		$	468		$	1,172		$	1,334
Average tangible common equity (non-GAAP)		12,271			11,810			11,439			11,106			11,046			11,844			11,040
Return on average tangible common equity from continuing operations (non-GAAP)		12.38		%	13.69		%	13.69		%	16.40		%	16.81		%	13.23		%	16.16		%
Return on average tangible common equity consolidated
Net income (loss) attributable to Key common shareholders (GAAP)		$	386		$	405		$	387		$	461		$	468		$	1,178		$	1,339
Average tangible common equity (non-GAAP)		12,271			11,810			11,439			11,106			11,046			11,844			11,040
Return on average tangible common equity consolidated (non-GAAP)		12.48		%	13.75		%	13.72		%	16.47		%	16.81		%	13.30		%	16.22		%

(a) For the three months ended September 30, 2019, June 30, 2019, March 31, 2019, December 31, 2018, and September 30, 2018, intangible assets exclude $9 million, $10 million, $12 million, $14 million, and $17 million, respectively, of period-end purchased credit card receivables.

(b) Net of capital surplus.

(c) For the three months ended September 30, 2019, June 30, 2019, March 31, 2019, December 31, 2018, and September 30, 2018, average intangible assets exclude $9 million, $11 million, $13 million, $15 million, and $18 million, respectively, of average purchased credit card receivables. For the nine months ended September 30, 2019, and September 30, 2018, average intangible assets exclude $11 million and $21 million, respectively, of average purchase 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.

45

		Three months ended															Nine months ended
dollars in millions		9/30/2019			6/30/2019			3/31/2019			12/31/2018			9/30/2018			9/30/2019			9/30/2018
Cash efficiency ratio
Noninterest expense (GAAP)		$	939		$	1,019		$	963		$	1,012		$	964		$	2,921		$	2,963
Less:	Intangible asset amortization	26			22			22			22			23			70			77
Adjusted noninterest expense (non-GAAP)		$	913		$	997		$	941		$	990		$	941		$	2,851		$	2,886
Net interest income (GAAP)		$	972		$	981		$	977		$	1,000		$	986		$	2,930		$	2,909
Plus:	Taxable-equivalent adjustment	8			8			8			8			7			24			23
	Noninterest income (GAAP)	650			622			536			645			609			1,808			1,870
Total taxable-equivalent revenue (non-GAAP)		$	1,630		$	1,611		$	1,521		$	1,653		$	1,602		$	4,762		$	4,802
Cash efficiency ratio (non-GAAP)		56.0		%	61.9		%	61.9		%	59.9		%	58.7		%	59.9		%	60.1		%

Traditionally, the banking regulators have assessed bank and bank holding company capital adequacy based on both the amount and the composition of capital, the calculation of which is prescribed in federal banking regulations. In October 2013, the federal banking regulators published the final Basel III capital framework for U.S. banking organizations (the “Regulatory Capital Rules”). The Regulatory Capital Rules require higher and better-quality capital and introduced a new capital measure, “Common Equity Tier 1,” a non-GAAP financial measure. The mandatory compliance date for Key as a “standardized approach” banking organization began on January 1, 2015, subject to transitional provisions.

			Three months ended
			9/30/2019
Common Equity Tier 1 under the RCR (estimates)
	Common Equity Tier 1 under current RCR		$	12,292
	Adjustments from current RCR to the fully phased-in RCR:
		Deferred tax assets and other intangible assets (a)	—
		Common Equity Tier 1 anticipated under the fully phased-in RCR (b)	$	12,292
	Net risk-weighted assets under current RCR		$	129,702
	Adjustments from current RCR to the fully phased-in RCR:
		Mortgage servicing assets (c)	838
		Deferred tax assets	201
		All other assets	—
		Total risk-weighted assets anticipated under the fully phased-in RCR (b)	$	130,741
	Common Equity Tier 1 ratio under the fully phased-in RCR (b)		9.40		%

(a) Includes the deferred tax assets subject to future taxable income for realization, primarily tax credit carryforwards, as well as intangible assets (other than goodwill and mortgage servicing assets) subject to the transition provisions of the final rule.

(b) The anticipated amount of regulatory capital and risk-weighted assets is based upon the federal banking agencies’ RCR (fully phased-in); Key is subject to the RCR under the “standardized approach.”

(c) Item is included in the 25% exceptions bucket calculation and is risk-weighted at 250%.

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

46

Accounting and Reporting Developments

Accounting Guidance Pending Adoption at September 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. We have formed cross-functional implementation working groups comprised of teams throughout Key, including finance, credit, and modeling. The implementation team has completed the development and testing of loss forecasting models, including establishment of macroeconomic forecasting methodologies and approaches to meet the requirements of the new guidance.  We have completed parallel runs through the third quarter of 2019, focused on challenging model outputs, and are currently conducting more comprehensive parallel run productions incorporating qualitative factors, governance activities, internal controls, and financial reporting. We continue to review and refine the overall process.  We currently expect to utilize a two-year reasonable and supportable forecast period for all portfolio segments and will revert to our historical loss experience outside of the forecast period leveraging historical macroeconomic variables. The ultimate effect of the standard on our allowance for credit losses will be dependent on macroeconomic conditions and forecasts as well as the size and composition of our loans, net investment in leases, debt securities, and certain financial assets at January 1, 2020, as well as any refinements to our models, methodology, and other key assumptions.  Based on current macroeconomic forecasts and our loans and net investment in leases as of September 30, 2019, we expect the allowance for loan and lease losses to increase by approximately 20% to 30% as compared to our current reserve levels as a result of the adoption of this guidance. The estimated allowance for loan and lease losses on longer duration consumer loans and lines of credit is expected to more than double to cover the full remaining expected life of loans and commitments.  The estimated overall increase is offset by an expected decrease in the allowance for loan and lease losses for our shorter duration commercial loans and leases. We will continue to evaluate and refine the result of our loss estimates throughout the rest of 2019. We do not expect to record a material allowance for credit losses on available-for-sale or held-to-maturity debt securities as a result of the adoption of this guidance. The allowance for credit losses to be recorded at the January 1, 2020, transition date may differ from our estimate due to further process refinement and accounting for changes in balances, economics, and other assumptions.
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 accounting guidance will not result in significant changes to our disclosures, and there will be no effect on our financial condition or results of operations.

47

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

September 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	—		$	2	$	2
Nonsovereign non-financial institutions	$	2	—		2
Total	2		2		4
Germany:
Sovereigns	—		—		—
Nonsovereign financial institutions	—		—		—
Nonsovereign non-financial institutions	18		—		18
Total	18		—		18
Italy:
Sovereigns	—		—		—
Nonsovereign financial institutions	—		—		—
Nonsovereign non-financial institutions	3		—		3
Total	3		—		3
Luxembourg:
Sovereigns	—		—		—
Nonsovereign financial institutions	—		—		—
Nonsovereign non-financial institutions	10		—		10
Total	10		—		10
United Kingdom:
Sovereigns	—		—		—
Nonsovereign financial institutions	—		246		246
Nonsovereign non-financial institutions	1		—		1
Total	1		246		247
Total Europe:
Sovereigns	—		—		—
Nonsovereign financial institutions	—		248		248
Nonsovereign non-financial institutions	34		—		34
Total	$	34	$	248	$	282

 

(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.

48

Item 1. Financial Statements

Consolidated Balance Sheets

in millions, except per share data	September 30, 2019			December 31, 2018
	(Unaudited)
ASSETS
Cash and due from banks	$	636		$	678
Short-term investments	3,351			2,562
Trading account assets	963			849
Securities available for sale	22,378			19,428
Held-to-maturity securities (fair value: $10,606 and $11,122)	10,490			11,519
Other investments	620			666
Loans, net of unearned income of $630 and $678	92,760			89,552
Less: Allowance for loan and lease losses	(893		)	(883		)
Net loans	91,867			88,669
Loans held for sale (a)	1,598			1,227
Premises and equipment	815			882
Goodwill	2,664			2,516
Other intangible assets	272			316
Corporate-owned life insurance	4,216			4,171
Accrued income and other assets	5,881			5,030
Discontinued assets	940			1,100
Total assets	$	146,691		$	139,613
LIABILITIES
Deposits in domestic offices:
NOW and money market deposit accounts	$	65,604		$	59,918
Savings deposits	4,668			4,854
Certificates of deposit ($100,000 or more)	7,194			7,913
Other time deposits	5,300			5,332
Total interest-bearing deposits	82,766			78,017
Noninterest-bearing deposits	28,883			29,292
Total deposits	111,649			107,309
Federal funds purchased and securities sold under repurchase agreements	182			319
Bank notes and other short-term borrowings	700			544
Accrued expense and other liabilities	2,574			2,113
Long-term debt	14,470			13,732
Total liabilities	129,575			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	6,287			6,331
Retained earnings	12,209			11,556
Treasury stock, at cost (268,164,104 and 237,198,944 shares)	(4,696		)	(4,181		)
Accumulated other comprehensive income (loss)	159			(818		)
Key shareholders’ equity	17,116			15,595
Noncontrolling interests	—			1
Total equity	17,116			15,596
Total liabilities and equity	$	146,691		$	139,613

(a) Total loans held for sale include real estate — residential mortgage loans held for sale at fair value of $101 million at September 30, 2019, and $54 million at December 31, 2018.

See Notes to Consolidated Financial Statements (Unaudited).

49

Consolidated Statements of Income

dollars in millions, except per share amounts	Three months ended September 30,				Nine months ended September 30,
(Unaudited)	2019		2018		2019		2018
INTEREST INCOME
Loans	$	1,073	$	1,025	$	3,221	$	2,965
Loans held for sale	18		12		46		40
Securities available for sale	136		102		400		294
Held-to-maturity securities	64		72		199		213
Trading account assets	7		7		24		21
Short-term investments	16		15		49		31
Other investments	3		6		11		17
Total interest income	1,317		1,239		3,950		3,581
INTEREST EXPENSE
Deposits	227		140		652		343
Federal funds purchased and securities sold under repurchase agreements	—		1		1		10
Bank notes and other short-term borrowings	4		4		13		17
Long-term debt	114		108		354		302
Total interest expense	345		253		1,020		672
NET INTEREST INCOME	972		986		2,930		2,909
Provision for credit losses	200		62		336		187
Net interest income after provision for credit losses	772		924		2,594		2,722
NONINTEREST INCOME
Trust and investment services income	118		117		355		378
Investment banking and debt placement fees	176		166		449		464
Service charges on deposit accounts	86		85		251		265
Operating lease income and other leasing gains	42		35		123		61
Corporate services income	63		52		171		175
Cards and payments income	69		69		208		202
Corporate-owned life insurance income	32		34		97		98
Consumer mortgage income	14		9		32		23
Mortgage servicing fees	23		19		68		61
Other income (a)	27		23		54		143
Total noninterest income	650		609		1,808		1,870
NONINTEREST EXPENSE
Personnel	547		553		1,699		1,733
Net occupancy	72		76		217		233
Computer processing	53		52		163		155
Business services and professional fees	43		43		132		135
Equipment	27		27		75		79
Operating lease expense	33		31		91		88
Marketing	26		26		69		77
FDIC assessment	7		21		23		63
Intangible asset amortization	26		23		70		77
OREO expense, net	3		3		10		5
Other expense	102		109		372		318
Total noninterest expense	939		964		2,921		2,963
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	483		569		1,481		1,629
Income taxes	70		87		239		252
INCOME (LOSS) FROM CONTINUING OPERATIONS	413		482		1,242		1,377
Income (loss) from discontinued operations	3		—		6		5
NET INCOME (LOSS)	416		482		1,248		1,382
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		—
NET INCOME (LOSS) ATTRIBUTABLE TO KEY	$	416	$	482	$	1,248	$	1,382
Income (loss) from continuing operations attributable to Key common shareholders	$	383	$	468	$	1,172	$	1,334
Net income (loss) attributable to Key common shareholders	386		468		1,178		1,339
Per Common Share:
Income (loss) from continuing operations attributable to Key common shareholders	$	.39	$	.45	$	1.17	$	1.27
Income (loss) from discontinued operations, net of taxes	—		—		.01		.01
Net income (loss) attributable to Key common shareholders (b)	.39		.45		1.18		1.28
Per Common Share — assuming dilution:
Income (loss) from continuing operations attributable to Key common shareholders	$	.38	$	.45	$	1.16	$	1.26
Income (loss) from discontinued operations, net of taxes	—		—		.01		.01
Net income (loss) attributable to Key common shareholders (b)	.39		.45		1.17		1.26
Cash dividends declared per Common Share	$	.185	$	.17	$	.525	$	.395
Weighted-average Common Shares outstanding (000)	988,319		1,036,479		998,268		1,048,397
Effect of Common Share options and other stock awards	10,009		13,497		9,632		14,419
Weighted-average Common Shares and potential Common Shares outstanding (000) (c)	998,328		1,049,976		1,007,900		1,062,816

(a) For the three and nine months ended September 30, 2019, net securities gains (losses) totaled $15 million. For the three and nine months ended September 30, 2018, net securities gains (losses) totaled less than $1 million. For the three and nine months ended September 30, 2019, and September 30, 2018, Key did not have any impairment losses related to securities.

(b) EPS may not foot due to rounding.

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

See Notes to Consolidated Financial Statements (Unaudited).

50

Consolidated Statements of Comprehensive Income

in millions	Three months ended September 30,					Nine months ended September 30,
(Unaudited)	2019		2018			2019		2018
Net income (loss)	$	416	$	482		$	1,248	$	1,382
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on securities available for sale, net of income taxes of ($29), ($22), ($176), and ($89)	93		(72		)	568		(288		)
Net unrealized gains (losses) on derivative financial instruments, net of income taxes of ($21), ($5), ($120) and ($29)	68		(12		)	386		(92		)
Foreign currency translation adjustments, net of income taxes of $0, $0, ($1) and $3	—		1			4		(15		)
Net pension and postretirement benefit costs, net of income taxes of $0, $1, ($6) and $3	—		2			19		8
Total other comprehensive income (loss), net of tax	161		(81		)	977		(387		)
Comprehensive income (loss)	577		401			2,225		995
Less: Comprehensive income attributable to noncontrolling interests	—		—			—		—
Comprehensive income (loss) attributable to Key	$	577	$	401		$	2,225	$	995

See Notes to Consolidated Financial Statements (Unaudited).

51

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)											1,248									—
Other comprehensive income (loss)																	977
Deferred compensation								6
Cash dividends declared
Common Shares ($.525 per share)											(525		)
Series D Preferred Stock ($37.50 per depositary share)											(20		)
Series E Preferred Stock ($1.148439 per depositary share)											(23		)
Series F Preferred Stock ($1.059375 per depositary share)											(18		)
Series G Preferred Stock ($.53125 per depositary share)											(9		)
Issuance of Series G Preferred Stock	450			450				(15		)
Open market Common Share repurchases		(35,400	)											(594		)
Employee equity compensation program Common Share repurchases		(1,880	)					(3		)				(33		)
Common Shares reissued (returned) for stock options and other employee benefit plans		6,315						(32		)				112
Net contribution from (distribution to) noncontrolling interests																				(1		)
BALANCE AT SEPTEMBER 30, 2019	1,396	988,538		$	1,900	$	1,257	$	6,287		$	12,209		$	(4,696	)	$	159		$	—
BALANCE AT JUNE 30, 2019	1,396	1,003,114		$	1,900	$	1,257	$	6,266		$	12,005		$	(4,457	)	$	(2	)	$	2
Net income (loss)											416									—
Other comprehensive income (loss)																	161
Deferred compensation								5
Cash dividends declared
Common Shares ($.185 per share)											(182		)
Series D Preferred Stock ($12.50 per depositary share)											(7		)
Series E Preferred Stock ($.382813 per depositary share)											(8		)
Series F Preferred Stock ($.353125 per depositary share)											(6		)
Series G Preferred Stock ($.53125 per depositary share)											(9		)
Open market Common Share repurchases		(15,075	)											(248		)
Employee equity compensation program Common Share repurchases		(2	)					—						—
Common Shares reissued (returned) for stock options and other employee benefit plans		501						16						9
Net contribution from (distribution to) noncontrolling interests																				$	—
BALANCE AT SEPTEMBER 30, 2019	1,396	988,538		$	1,900	$	1,257	$	6,287		$	12,209		$	(4,696	)	$	159		$	—

See Notes to Consolidated Financial Statements (Unaudited).

Consolidated Statements of Changes in Equity

	Key Shareholders’ Equity
dollars in millions, except per share amounts (Unaudited)	Preferred Shares Outstanding (000)	Common Shares Outstanding (000)		Preferred Stock		Common Shares		Capital Surplus			Retained Earnings			Treasury Stock, at Cost			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests
BALANCE AT DECEMBER 31, 2017	521	1,069,084		$	1,025	$	1,257	$	6,335		$	10,335		$	(3,150	)	$	(779	)	$	2
Cumulative effect from changes in accounting principle (a)											(2		)
Other reclassification of AOCI											5
Net income (loss)											1,382									—
Other comprehensive income (loss)																	(387		)
Deferred compensation								16
Cash dividends declared
Common Shares ($.395 per share)											(415		)
Series D Preferred Stock ($37.50 per depositary share)											(20		)
Series E Preferred Stock ($1.148439 per depositary share)											(23		)
Issuance of Series F Preferred Stock	425			425				(13		)
Open market Common Share repurchases		(38,806	)											(820		)
Employee equity compensation program Common Share repurchases		(2,271	)											(47		)
Common Shares reissued (returned) for stock options and other employee benefit plans		6,280						(23		)				107
BALANCE AT SEPTEMBER 30, 2018	946	1,034,287		$	1,450	$	1,257	$	6,315		$	11,262		$	(3,910	)	$	(1,166	)	$	2
BALANCE AT JUNE 30, 2018	521	1,058,944		$	1,025	$	1,257	$	6,315		$	10,970		$	(3,382	)	$	(1,085	)	$	2
Other reclassification of AOCI											—
Net income (loss)											482									—
Other comprehensive income (loss):																	$	(81	)
Deferred compensation								4
Cash dividends declared
Common Shares ($.17 per share)											(176		)
Series D Preferred Stock ($12.50 per depositary share)											(7		)
Series E Preferred Stock ($.382813 per depositary share)											(7		)
Issuance of Series F Preferred Stock	425			425				(13		)
Open market Common Share repurchases		(25,368	)											(541		)
Employee equity compensation program Common Share repurchases		(50	)											(1		)
Common shares reissued (returned) for stock options and other employee benefit plans		761						9						14
BALANCE AT SEPTEMBER 30, 2018	946	1,034,287		$	1,450	$	1,257	$	6,315		$	11,262		$	(3,910	)	$	(1,166	)	$	2

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

See Notes to Consolidated Financial Statements (Unaudited).

52

Consolidated Statements of Cash Flows

in millions	Nine months ended September 30,
(Unaudited)	2019			2018
OPERATING ACTIVITIES
Net income (loss)	$	1,248		$	1,382
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Provision for credit losses	336			187
Depreciation and amortization expense, net	183			290
Accretion of acquired loans	39			69
Increase in cash surrender value of corporate-owned life insurance	(86		)	(84		)
Stock-based compensation expense	72			78
FDIC reimbursement (payments), net of FDIC expense	—			2
Deferred income taxes (benefit)	81			103
Proceeds from sales of loans held for sale	8,103			8,234
Originations of loans held for sale, net of repayments	(8,063		)	(8,631		)
Net losses (gains) on sales of loans held for sale	(126		)	(130		)
Net losses (gains) and writedown on OREO	6			(2		)
Net losses (gains) on leased equipment	(16		)	(34		)
Net securities losses (gains)	(15		)	—
Net losses (gains) on sales of fixed assets	(1		)	8
Net decrease (increase) in trading account assets	(114		)	(122		)
Gain on sale of KIBS	—			(83		)
Other operating activities, net	252			(473		)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	1,899			794
INVESTING ACTIVITIES
Cash received (used) in acquisitions, net of cash acquired	(185		)	—
Proceeds from sale of KIBS	—			124
Net decrease (increase) in short-term investments, excluding acquisitions	(789		)	2,175
Purchases of securities available for sale	(4,618		)	(3,058		)
Proceeds from sales of securities available for sale	24			—
Proceeds from prepayments and maturities of securities available for sale	2,395			2,456
Proceeds from prepayments and maturities of held-to-maturity securities	1,054			1,206
Purchases of held-to-maturity securities	(22		)	(1,242		)
Purchases of other investments	(33		)	(21		)
Proceeds from sales of other investments	40			36
Proceeds from prepayments and maturities of other investments	39			37
Net decrease (increase) in loans, excluding acquisitions, sales and transfers	(4,122		)	(3,249		)
Proceeds from sales of portfolio loans	245			143
Proceeds from corporate-owned life insurance	41			60
Purchases of premises, equipment, and software	(58		)	(73		)
Proceeds from sales of premises and equipment	17			1
Proceeds from sales of OREO	14			22
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(5,958		)	(1,383		)
FINANCING ACTIVITIES
Net increase (decrease) in deposits, excluding acquisitions	4,340			545
Net increase (decrease) in short-term borrowings	19			911
Net proceeds from issuance of long-term debt	2,113			1,802
Payments on long-term debt	(1,675		)	(2,127		)
Issuance of preferred shares	435			412
Open market Common Share repurchases	(594		)	(820		)
Employee equity compensation program Common Share repurchases	(33		)	(47		)
Net proceeds from reissuance of Common Shares	7			19
Cash dividends paid	(595		)	(458		)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	4,017			237
NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS	(42		)	(352		)
CASH AND DUE FROM BANKS AT BEGINNING OF PERIOD	678			671
CASH AND DUE FROM BANKS AT END OF PERIOD	$	636		$	319
Additional disclosures relative to cash flows:
Interest paid	$	950		$	632
Income taxes paid (refunded)	(22		)	22
Noncash items:
Reduction of secured borrowing and related collateral	$	3		18
Loans transferred to portfolio from held for sale	5			21
Loans transferred to held for sale from portfolio	290			7
Loans transferred to OREO	22			19
CMBS risk retentions	17			—
ABS risk retentions	12			—

See Notes to Consolidated Financial Statements (Unaudited).

53

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.

54

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.

55

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 September 30,				Nine months ended September 30,
dollars in millions, except per share amounts	2019		2018		2019		2018
EARNINGS
Income (loss) from continuing operations	$	413	$	482	$	1,242	$	1,377
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		—
Income (loss) from continuing operations attributable to Key	413		482		1,242		1,377
Less: Dividends on Preferred Stock	30		14		70		43
Income (loss) from continuing operations attributable to Key common shareholders	383		468		1,172		1,334
Income (loss) from discontinued operations, net of taxes	3		—		6		5
Net income (loss) attributable to Key common shareholders	$	386	$	468	$	1,178	$	1,339
WEIGHTED-AVERAGE COMMON SHARES
Weighted-average Common Shares outstanding (000)	988,319		1,036,479		998,268		1,048,397
Effect of Common Share options and other stock awards	10,009		13,497		9,632		14,419
Weighted-average Common Shares and potential Common Shares outstanding (000) (a)	998,328		1,049,976		1,007,900		1,062,816
EARNINGS PER COMMON SHARE
Income (loss) from continuing operations attributable to Key common shareholders	$	.39	$	.45	$	1.17	$	1.27
Income (loss) from discontinued operations, net of taxes	—		—		.01		.01
Net income (loss) attributable to Key common shareholders (b)	.39		.45		1.18		1.28
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution	$	.38	$	.45	$	1.16	$	1.26
Income (loss) from discontinued operations, net of taxes — assuming dilution	—		—		.01		.01
Net income (loss) attributable to Key common shareholders — assuming dilution (b)	.39		.45		1.17		1.26

(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.

56

3. Loan Portfolio

in millions	September 30, 2019		December 31, 2018
Commercial and industrial (a)	$	48,362	$	45,753
Commercial real estate:
Commercial mortgage	13,167		14,285
Construction	1,480		1,666
Total commercial real estate loans	14,647		15,951
Commercial lease financing (b)	4,470		4,606
Total commercial loans	67,479		66,310
Residential — prime loans:
Real estate — residential mortgage	6,527		5,513
Home equity loans	10,456		11,142
Total residential — prime loans	16,983		16,655
Consumer direct loans	2,789		1,809
Credit cards	1,105		1,144
Consumer indirect loans	4,404		3,634
Total consumer loans	25,281		23,242
Total loans (c)	$	92,760	$	89,552

(a) Loan balances include $147 million and $132 million of commercial credit card balances at September 30, 2019, and December 31, 2018, respectively.

(b) Commercial lease financing includes receivables held as collateral for a secured borrowing of $10 million and $10 million at September 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 $915 million at September 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	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,
RATING	2019		2018		2019		2018		2019		2018		2019		2018		2019		2018
Pass	$	46,604	$	44,138	$	12,608	$	13,672	$	1,447	$	1,537	$	4,431	$	4,557	$	65,090	$	63,904
Criticized (Accruing)	1,470		1,402		319		354		30		125		32		41		1,851		1,922
Criticized (Nonaccruing)	238		152		93		81		2		2		7		8		340		243
Total	$	48,312	$	45,692	$	13,020	$	14,107	$	1,479	$	1,664	$	4,470	$	4,606	$	67,281	$	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	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,
FICO SCORE	2019		2018		2019		2018		2019		2018		2019		2018		2019		2018
750 and above	$	10,343	$	9,794	$	1,116	$	549	$	503	$	521	$	2,075	$	1,647	$	14,037	$	12,511
660 to 749	4,736		4,906		912		700		481		507		1,566		1,320		7,695		7,433
Less than 660	1,315		1,411		210		224		121		116		578		565		2,224		2,316
No Score	293		213		548		333		—		—		185		102		1,026		648
Total	$	16,687	$	16,324	$	2,786	$	1,806	$	1,105	$	1,144	$	4,404	$	3,634	$	24,982	$	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.

57

Commercial Credit Exposure — PCI

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

	Commercial and Industrial				RE — Commercial				RE — Construction				Commercial Lease		Total
in millions	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,	December 31,	September 30,		December 31,
RATING	2019		2018		2019		2018		2019		2018		2019	2018	2019		2018
Pass	$	30	$	37	$	112	$	125	$	1	$	2	—	—	$	143	$	164
Criticized	20		24		35		53		—		—		—	—	55		77
Total	$	50	$	61	$	147	$	178	$	1	$	2	—	—	$	198	$	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	September 30,		December 31,		September 30,		December 31,		September 30,	December 31,	September 30,	December 31,	September 30,		December 31,
FICO SCORE	2019		2018		2019		2018		2019	2018	2019	2018	2019		2018
750 and above	$	113	$	137	1		—		—	—	—	—	$	114	$	137
660 to 749	94		95		$	1	$	1	—	—	—	—	95		96
Less than 660	83		97		1		2		—	—	—	—	84		99
No Score	6		2		—		—		—	—	—	—	6		2
Total	$	296	$	331	$	3	$	3	—	—	—	—	$	299	$	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 September 30, 2019, and December 31, 2018, provides further information regarding Key’s credit exposure.

Aging Analysis of Loan Portfolio^(a) 

September 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)
in millions
LOAN TYPE
Commercial and industrial	$	47,888	$	101	$	71	$	14	$	238	$	424	$	50	$	48,362
Commercial real estate:
Commercial mortgage	12,881		26		11		10		92		139		147		13,167
Construction	1,467		7		2		1		2		12		1		1,480
Total commercial real estate loans	14,348		33		13		11		94		151		148		14,647
Commercial lease financing	4,435		18		8		2		7		35		—		4,470
Total commercial loans	$	66,671	$	152	$	92	$	27	$	339	$	610	$	198	$	67,479
Real estate — residential mortgage	$	6,185	$	12	$	5	$	1	$	42	$	60	$	282	$	6,527
Home equity loans	10,217		31		9		6		179		225		14		10,456
Consumer direct loans	2,762		9		5		7		3		24		3		2,789
Credit cards	1,079		7		6		11		2		26		—		1,105
Consumer indirect loans	4,344		31		7		2		20		60		—		4,404
Total consumer loans	$	24,587	$	90	$	32	$	27	$	246	$	395	$	299	$	25,281
Total loans	$	91,258	$	242	$	124	$	54	$	585	$	1,005	$	497	$	92,760

(a) Amounts in table represent recorded investment and exclude loans held for sale. Recorded investment represents the principal amount of the loan increased or decreased by net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs.

(b) Past due loan amounts exclude PCI, even if contractually past due (or if we do not expect to collect principal or interest in full based on the original contractual terms), as we are currently accreting income over the remaining term of the loans.

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

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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)
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 principal amount of the loan increased or decreased by net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs.

(b) Past due loan amounts exclude PCI, even if contractually past due (or if we do not expect to collect principal or interest in full based on the original contractual terms), as we are currently accreting income over the remaining term of the loans.

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

At September 30, 2019, the approximate carrying amount of our commercial nonperforming loans outstanding represented 77% of their original contractual amount owed, total nonperforming loans outstanding represented 81% of their original contractual amount owed, and nonperforming assets in total were carried at 84% of their original contractual amount owed.

Nonperforming loans and loans held for sale reduced expected interest income by $7 million and $24 million for the three and nine months ended September 30, 2019, respectively, and $8 million and $22 million for the three and nine months ended September 30, 2018, respectively.

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

	September 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	$	199	$	257	—		$	118	$	175	—
Commercial real estate:
Commercial mortgage	71		82		—		64		70		—
Total commercial real estate loans	71		82		—		64		70		—
Total commercial loans	270		339		—		182		245		—
Real estate — residential mortgage	3		3		—		4		5		—
Home equity loans	46		53		—		49		56		—
Consumer direct loans	—		1		—		1		1		—
Consumer indirect loans	2		4		—		2		4		—
Total consumer loans	51		61		—		56		66		—
Total loans with no related allowance recorded	321		400		—		238		311		—
With an allowance recorded:
Commercial and industrial	35		48		$	15	44		47		$	5
Commercial real estate:
Commercial mortgage	2		2		—		2		3		1
Total commercial real estate loans	2		2		—		2		3		1
Total commercial loans	37		50		15		46		50		6
Real estate — residential mortgage	40		61		4		45		70		3
Home equity loans	80		87		9		78		85		8
Consumer direct loans	4		4		—		3		3		—
Credit cards	3		3		—		3		3		—
Consumer indirect loans	32		33		3		34		34		2
Total consumer loans	159		188		16		163		195		13
Total loans with an allowance recorded	196		238		31		209		245		19
Total	$	517	$	638	$	31	$	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 September 30,				Nine Months Ended September 30,
in millions	2019		2018		2019		2018
Commercial and industrial	$	209	$	209	$	198	$	184
Commercial real estate:
Commercial mortgage	69		48		69		44
Total commercial real estate loans	69		48		69		44
Total commercial loans	278		257		267		228
Real estate — residential mortgage	45		49		46		49
Home equity loans	127		126		127		122
Consumer direct loans	4		4		4		4
Credit cards	3		3		3		3
Consumer indirect loans	35		35		35		34
Total consumer loans	214		217		215		212
Total	$	492	$	474	$	482	$	440

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

Interest income recognized on the outstanding balances of accruing impaired loans totaled $4 million and $10 million for the three and nine months ended September 30, 2019, respectively, and $4 million and $9 million for the three and nine months ended September 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.

60

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 less than $1 million and $5 million at September 30, 2019, and December 31, 2018, respectively.

At September 30, 2019, and December 31, 2018, the recorded investment of consumer residential mortgage loans in the process of foreclosure was approximately $104 million and $113 million, respectively. At September 30, 2019, and December 31, 2018, we had $39 million and $35 million, respectively, of OREO, which represented the carrying value of foreclosed residential real estate.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
in millions	2019		2018		2019		2018
Commercial loans:
Extension of Maturity Date	6		$	20	$	11	$	20
Payment or Covenant Modification/Deferment	—		26		1		46
Bankruptcy Plan Modification	—		—		—		7
Increase in new commitment or new money	2		—		12		—
Total	8		$	46	$	24	$	73
Consumer loans:
Interest rate reduction	$	4	$	4	$	12	$	22
Other	8		10		21		29
Total	$	12	$	14	$	33	$	51
Total commercial and consumer TDRs	$	20	$	60	$	57	$	124

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

	Three Months Ended September 30,						Nine Months Ended September 30,
in millions	2019			2018			2019			2018
Balance at beginning of the period	$	395		$	347		$	399		$	317
Additions	20			58			88			133
Payments	(65		)	(28		)	(123		)	(69		)
Charge-offs	(3		)	(11		)	(17		)	(15		)
Balance at end of period	$	347		$	366		$	347		$	366

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

	September 30, 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	51	$	63	$	49	35	$	121	$	85
Commercial real estate:
Commercial mortgage	7	66		60		6	66		62
Total commercial real estate loans	7	66		60		6	66		62
Total commercial loans	58	129		109		41	187		147
Real estate — residential mortgage	162	12		10		281	21		20
Home equity loans	704	42		41		1,142	66		63
Consumer direct loans	137	2		1		171	2		1
Credit cards	296	1		1		330	2		2
Consumer indirect loans	1,004	17		14		1,098	18		14
Total consumer loans	2,303	74		67		3,022	109		100
Total nonperforming TDRs	2,361	203		176		3,063	296		247
Prior-year accruing:(a)
Commercial and industrial	7	33		28		11	37		32
Commercial real estate
Commercial mortgage	1	—		—		2	—		—
Total commercial real estate loans	1	—		—		2	—		—
Total commercial loans	8	33		28		13	37		32
Real estate — residential mortgage	502	38		32		491	36		30
Home equity loans	1,796	105		86		1,403	82		64
Consumer direct loans	143	5		3		79	4		3
Credit cards	556	3		1		479	3		1
Consumer indirect loans	787	35		21		556	33		22
Total consumer loans	3,784	186		143		3,008	158		120
Total prior-year accruing TDRs	3,792	219		171		3,021	195		152
Total TDRs	6,153	$	422	$	347	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 September 30, 2019, there were no commercial loan TDRs and 79 consumer loan TDRs with a combined recorded investment of $1 million that experienced payment defaults after modifications resulting in TDR status during 2018. During the three months ended September 30, 2018, there were no commercial loan TDRs and 82 consumer loan TDRs with a combined recorded investment of $2 million that experienced payment defaults after modifications resulting in TDR status during 2017.

During the nine months ended September 30, 2019, there were no commercial loan TDRs and 255 consumer loan TDRs with a combined recorded investment of $5 million that experienced payment defaults after modifications resulting in TDR status during 2018. During the nine months ended September 30, 2018, there were no commercial loan TDRs and 178 consumer loan TDRs with a combined recorded investment of $4 million that experienced payment defaults after modifications resulting in TDR status during 2017.

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 September 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 September 30, 2019:

in millions	June 30, 2019		Provision				Charge-offs				Recoveries		September 30, 2019
Commercial and Industrial	$	549	$	175			$	(176	)		$	6	$	554
Commercial real estate:
Real estate — commercial mortgage	139		(5		)		—				—		134
Real estate — construction	24		(1		)		—				—		23
Total commercial real estate loans	163		(6		)		—				—		157
Commercial lease financing	35		—				(1		)		1		35
Total commercial loans	747		169				(177		)		7		746
Real estate — residential mortgage	7		1				(1		)		—		7
Home equity loans	36		1				(6		)		2		33
Consumer direct loans	32		10				(10		)		2		34
Credit cards	44		11				(11		)		2		46
Consumer indirect loans	24		7				(8		)		4		27
Total consumer loans	143		30				(36		)		10		147
Total ALLL — continuing operations	890		199			(a), (b)	(213		)	(b)	17		893
Discontinued operations	12		(1		)		(1		)		1		11
Total ALLL — including discontinued operations	$	902	$	198			$	(214	)		$	18	$	904

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

(b) Includes the realization of a $123 million loss related to a previously disclosed fraud incident.

Three months ended September 30, 2018:

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

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

Nine months ended September 30, 2019:

in millions	December 31, 2018		Provision				Charge-offs				Recoveries		September 30, 2019
Commercial and Industrial	532		$	242			$	(242	)		$	22	$	554
Commercial real estate:
Real estate — commercial mortgage	142		(4		)		(6		)		2		134
Real estate — construction	33		(6		)		(4		)		—		23
Total commercial real estate loans	175		(10		)		(10		)		2		157
Commercial lease financing	36		20				(25		)		4		35
Total commercial loans	743		252				(277		)		28		746
Real estate — residential mortgage	7		2				(3		)		1		7
Home equity loans	35		8				(16		)		6		33
Consumer direct loans	30		29				(30		)		5		34
Credit cards	48		26				(34		)		6		46
Consumer indirect loans	20		18				(24		)		13		27
Total consumer loans	140		83				(107		)		31		147
Total ALLL — continuing operations	883		335			(a), (b)	(384		)	(b)	59		893
Discontinued operations	14		3				(9		)		3		11
Total ALLL — including discontinued operations	$	897	$	338			$	(393	)		$	62	$	904

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

(b) Includes the realization of a $123 million loss related to a previously disclosed fraud incident.

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Nine months ended September 30, 2018:

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

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

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

	Allowance						Outstanding
September 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	$	15	$	538	$	1	$	48,362		$	234	$	48,078		$	50
Commercial real estate:
Commercial mortgage	—		132		2		13,167			72		12,948			147
Construction	—		23		—		1,480			—		1,479			1
Total commercial real estate loans	—		155		2		14,647			72		14,427			148
Commercial lease financing	—		35		—		4,470			—		4,470			—
Total commercial loans	15		728		3		67,479			306		66,975			198
Real estate — residential mortgage	4		2		1		6,527			43		6,202			282
Home equity loans	9		24		—		10,456			126		10,316			14
Consumer direct loans	—		34		—		2,789			4		2,782			3
Credit cards	—		46		—		1,105			3		1,102			—
Consumer indirect loans	3		24		—		4,404			35		4,369			—
Total consumer loans	16		130		1		25,281			211		24,771			299
Total ALLL — continuing operations	31		858		4		92,760			517		91,746			497
Discontinued operations	2		9		—		915		(a)	23		892		(a)	—
Total ALLL — including discontinued operations	$	33	$	867	$	4	$	93,675		$	540	$	92,638		$	497

(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 September 30,				Nine months ended September 30,
in millions	2019		2018		2019		2018
Balance at beginning of period	$	64	$	58	$	64	$	57
Provision (credit) for losses on lending-related commitments	1		2		1		3
Balance at end of period	$	65	$	60	$	65	$	60

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 three and nine months ended September 30, 2019, and the twelve months ended December 31, 2018.

	Three Months Ended September 30,							Nine Months Ended September 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	$	101		$	513	$	541	$	117		$	571	$	607
Accretion	(9		)					(28		)
Net reclassifications from nonaccretable to accretable	10							18
Payments received, net	(2		)					(7		)
Balance at end of period	$	100		$	492	$	518	$	100		$	492	$	518

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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 September 30, 2019, and December 31, 2018.

	September 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	—		$	744	—		$	744		—		$	578	—		$	578
States and political subdivisions	—		51		—		51			—		60		—		60
Other mortgage-backed securities	—		89		—		89			—		164		—		164
Other securities	—		50		—		50			—		22		—		22
Total trading account securities	—		934		—		934			—		824		—		824
Commercial loans	—		29		—		29			—		25		—		25
Total trading account assets	—		963		—		963			—		849		—		849
Securities available for sale:
U.S. Treasury, agencies and corporations	—		272		—		272			—		147		—		147
States and political subdivisions	—		4		—		4			—		7		—		7
Agency residential collateralized mortgage obligations	—		13,537		—		13,537			—		13,962		—		13,962
Agency residential mortgage-backed securities	—		1,959		—		1,959			—		2,105		—		2,105
Agency commercial mortgage-backed securities	—		6,595		—		6,595			—		3,187		—		3,187
Other securities	—		—		$	11	11			—		—		$	20	20
Total securities available for sale	—		22,367		11		22,378			—		19,408		20		19,428
Other investments:
Principal investments:
Direct	—		—		1		1			—		—		1		1
Indirect (measured at NAV) (a)	—		—		—		73			—		—		—		96
Total principal investments	—		—		1		74			—		—		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		90			—		1		8		115
Loans, net of unearned income (residential)	—		—		3		3			—		—		3		3
Loans held for sale (residential)	—		100		1		101			—		54		—		54
Derivative assets:
Interest rate	—		1,233		3		1,236			—		410		5		415
Foreign exchange	60		41		—		101			$	70	36		—		106
Commodity	—		281		—		281			—		333		—		333
Credit	—		—		1		1			—		1		—		1
Other	—		10		6		16			—		6		3		9
Derivative assets	60		1,565		10		1,635			70		786		8		864
Netting adjustments (b)	—		—		—		(492		)	—		—		—		(333		)
Total derivative assets	60		1,565		10		1,143			70		786		8		531
Accrued income and other assets	—		—		—		—			—		—		—		—
Total assets on a recurring basis at fair value	$	60	$	24,995	$	33	$	24,678		$	70	$	21,098	$	39	$	20,980
LIABILITIES MEASURED ON A RECURRING BASIS
Bank notes and other short-term borrowings:
Short positions	$	31	$	669	—		$	700		$	14	$	530	—		$	544
Derivative liabilities:
Interest rate	—		268		—		268			—		297		—		297
Foreign exchange	56		40		—		96			58		37		—		95
Commodity	—		272		—		272			—		323		—		323
Credit	—		1		$	6	7			—		1		—		1
Other	—		10		—		10			—		7		—		7
Derivative liabilities	56		591		6		653			58		665		—		723
Netting adjustments (b)	—		—		—		(331		)	—		—		—		(337		)
Total derivative liabilities	56		591		6		322			58		665		—		386
Accrued expense and other liabilities	—		—		—		—			—		—		—		—
Total liabilities on a recurring basis at fair value	$	87	$	1,260	$	6	$	1,022		$	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 September 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 September 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 September 30, 2019, as well as financial support provided for the three and nine months ended September 30, 2019, and September 30, 2018.

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					Financial support provided
					Three months ended September 30,						Nine months ended September 30,
	September 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)	73		$	24	$	—	—		—	—	$	2	—	$	1	—
Total	$	74	$	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 September 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)

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Asset/liability class	Valuation technique	Valuation hierarchy classification(s)
Derivatives (continued)	We have customized derivative instruments and risk participations that are classified as Level 3 instruments. These derivative positions are valued using internally developed models, with inputs consisting of available market data, such as: • Bond spreads and asset values The unobservable internally derived assumptions include: • Loss given default • Internal risk assessments of customers and the remaining term of the underlying transactions The fair value represents an estimate of the amount that the risk participation counterparty would need to pay/receive as of the measurement date based on the probability of customer default on the swap transaction and the fair value of the underlying customer swap. Therefore, higher (lower) loss probabilities, internal risk ratings, and probabilities of default would have resulted in a higher (lower) 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 nine months ended September 30, 2019, and September 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
Nine months ended September 30, 2019
Securities available for sale
Other securities	$	20		$	15	—				—			—			—		—		—			(24		)		$	11		—
Other investments
Principal investments
Direct	1			—		—				$	—		$	—		—		—		—			—				1			—
Equity investments
Direct	7			—		(1		)	(a)	—			—			—		—		$	1		—				7			—
Loans held for sale (residential)	—			—		—				—			(1		)	—		$	2	—			—				1			—
Loans, net of unearned income (residential)	3			—		—				—			—			—		—		—			—				3			—
Derivative instruments (b)
Interest rate	5			—		$	4		(c)	—			—			—		—		2		(d)	$	(8	)	(d)	3			—
Credit	—			—		(5		)		(1		)	1			—		—		—			—				(5		)	—
Other (e)	3			—		—				—			—			—		3		—			—				6			—
Three months ended September 30, 2019
Securities available for sale
Other securities	$	11		$	—	—				—			—			—		—		—			$	—			$	11		—
Other investments
Principal investments
Direct	1			—		$	—			—			—			—		—		—			—				1			—
Equity investments
Direct	7			—		—				—			—			—		—		—			—				7			—
Loans held for sale (residential)	—			—		—				—			—			—		1		—			—				1			—
Loans, net of unearned income (residential)	3			—		—				—			—			—		—		—			—				3			—
Derivative instruments (b)
Interest rate	4			—		1			(c)	—			—			—		—		—		(d)	(2		)	(d)	3			—
Credit	(1		)	—		(5		)		—			1			$	—	—		—			—				(5		)	—
Other (e)	6			—		—				—			—			—		—		—			—				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
Nine months ended September 30, 2018
Securities available for sale
Other securities	$	20		—	—				—		—			—		—			—			—				$	20	—
Other investments
Principal investments
Direct	13			—	(1		)	(a)	$	1	$	(1	)	—		—			—			—				12		$	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		)	—		—			6		(d)	$	(6	)	(d)	6		—
Credit	1			—	(26		)	(c)	—		—			$	25	—			—			—				—		—
Other (e)	3			—	—				—		—			—		$	(1	)	—			—				2		—
Three months ended September 30, 2018
Securities available for sale
Other securities	$	20		—	—				—		—			—		—			—			—				$	20	—
Other investments
Principal investments
Direct	13			—	$	(1	)	(a)	$	—	$	—		—		—			—			—				12		$	(1	)	(a)
Equity investments
Direct	7			—	—				—		—			—		—			—			—				7		—
Loans held for sale (residential)	—			—	—				—		—			—		—			—			—				—		—
Loans, net of unearned income (residential)	3			—	—				—		—			—		$	—		—			—				3		—
Derivative instruments (b)
Interest rate	5			—	—			(c)	—		—			—		—			$	2	(d)	(1		)		6		—
Credit	(9		)	—	(6		)	(c)	—		—			$	15	—			—			—				—		—
Other (e)	3			—	—				—		—			—		(1		)	—			—				2		—

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

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

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

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

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

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Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis in accordance with GAAP. The adjustments to fair value generally result from the application of accounting guidance that requires assets and liabilities to be recorded at the lower of cost or fair value, or assessed for impairment. There were no liabilities measured at fair value on a nonrecurring basis at September 30, 2019, and December 31, 2018.

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

	September 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	—	$	—	$	41	$	41	—	—	$	42	$	42
Other intangible assets	—	—		47		47		—	—	—		—
Accrued income and other assets	—	—		55		55		—	—	16		16
Total assets on a nonrecurring basis at fair value	—	$	—	$	143	$	143	—	—	$	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, student loans, and residential mortgage loans held for sale	Through a quarterly analysis of our loan portfolios held for sale, which include both performing and nonperforming commercial loans, student loans, and residential mortgage loans not measured at fair value on a recurring basis, 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

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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 September 30, 2019, and December 31, 2018, the carrying amount of equity investments under this method was $134 million and $107 million, respectively. Impairment of less than $1 million was recorded for the three months ended September 30, 2019.	Level 3
Customer contract intangible assets	The fair value of other intangible assets is measured using the present value of expected future cash flows and comparing that value against the current carrying value. Expected future cash flows are discounted to the present value using a discounted cash flow model that incorporates an appropriate risk premium. For certain other intangible assets, we employ a replacement cost approach.	Level 3
Mortgage Servicing Assets	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 assets and liabilities:

September 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 (15.89%)
					Marketability discount	N/A (30.00%)
					Volatility factor	N/A (41.00%)
Other investments:(a)
Equity investments
Direct	7			Discounted cash flows	Discount rate	13.87 - 16.38% (14.48%)
					Marketability discount	N/A (30.00%)
					Volatility factor	N/A (48.00%)
Loans held for sale (residential)	1			Market comparable pricing	Comparability factor	74.50-98.00 (86.78%)
Loans, net of unearned income (residential)	3			Market comparable pricing	Comparability factor	78.57 - 95.75% (89.53%)
Derivative instruments:
Interest rate	3			Discounted cash flows	Probability of default	.02 - 100% (2.20%)
					Internal risk rating	1 - 19 (9.071)
					Loss given default	0 - 1 (.492)
Credit (assets)	1			Discounted cash flows	Probability of default	.02 - 100% (1.7%)
					Internal risk rating	1 - 19 (10.071)
					Loss given default	0 - 1 (.499)
Credit (liabilities)	(6		)	Discounted cash flows	Probability of default	.02 - 100% (8.79%)
					Internal risk rating	1 - 19 (7.714)
					Loss given default	0 - 1 (.388)
Other(d)	6			Discounted cash flows	Loan closing rates	33.56 - 99.90% (80.58%)
Nonrecurring
Impaired loans	41			Fair value of underlying collateral	Discount rate	0 - 100.00% (51.00%)
Other intangible assets (f)	47			Discounted cash flows	Discount rate	N/A (15.00%)
Accrued income and other assets:
OREO and other Level 3 assets(e)	7			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 September 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 $48 million pertaining to mortgage servicing assets. Refer to Note 8 (“Mortgage Servicing Assets”) for significant unobservable inputs pertaining to these assets.

(f) For the three months ended September 30, 2019, an impairment of $5 million was recorded related to certain customer contract intangible assets.

73

Fair Value Disclosures of Financial Instruments

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

	September 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)	$	963	$	—	$	963	—		—		—				$	963
Other investments (b)	620		—		—		$	538	$	82	—				620
Loans, net of unearned income (residential) (d)	3		—		—		3		—		—				3
Loans held for sale (residential) (b)	101		—		100		1		—		—				101
Derivative assets - trading (b)	1,027		60		1,355		10		—		$	(398	)	(f)	1,027
Fair value - OCI
Securities available for sale (b)	22,378		—		22,367		$	11	—		—				22,378
Derivative assets - hedging (b)(g)	116		—		210		—		—		(94		)	(f)	116
Amortized cost
Held-to-maturity securities (c)	10,490		—		10,606		—		—		—				10,606
Loans, net of unearned income (d)	91,864		—		—		90,651		—		—				90,651
Loans held for sale (b)	1,497		—		—		1,497		—		—				1,497
Other
Cash and short-term investments (a)	3,987		3,987		—		—		—		—				3,987
LIABILITIES (by measurement category)
Fair value - net income
Derivative liabilities - trading (b)	$	322	$	56	$	563	6		—		$	(303	)	(f)	$	322
Fair value - OCI
Derivative liabilities - hedging (b)(g)	—		—		28		—		—		(28		)	(f)	—
Amortized cost
Time deposits (e)	12,494		—		12,586		—		—		—				12,586
Short-term borrowings (a)	882		31		851		—		—		—				882
Long-term debt (e)	14,470		13,915		1,070		—		—		—				14,985
Other
Deposits with no stated maturity (a)	99,155		—		99,155		—		—		—				99,155

	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

74

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.

DIscontinued assets — 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 $903 million ($767 million at fair value) at September 30, 2019, and $1.1 billion ($890 million at fair value) at December 31, 2018;

• Portfolio loans at fair value of $2 million at September 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.

	September 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	$	273	—		1		$	272	$	150	—		$	3	$	147
States and political subdivisions	4		—		—		4		7		—		—		7
Agency residential collateralized mortgage obligations	13,473		$	123	$	59	13,537		14,315		$	20	373		13,962
Agency residential mortgage-backed securities	1,925		41		7		1,959		2,128		13		36		2,105
Agency commercial mortgage-backed securities	6,440		174		19		6,595		3,300		19		132		3,187
Other securities	7		4		—		11		17		3		—		20
Total securities available for sale	$	22,122	$	342	$	86	$	22,378	$	19,917	$	55	$	544	$	19,428
HELD-TO-MATURITY SECURITIES
Agency residential collateralized mortgage obligations	$	6,072	$	38	$	41	$	6,069	$	7,021	$	2	$	254	$	6,769
Agency residential mortgage-backed securities	432		6		—		438		490		—		14		476
Agency commercial mortgage-backed securities	3,959		114		1		4,072		3,996		2		133		3,865
Asset-backed securities	12		—		—		12		—		—		—		—
Other securities	15		—		—		15		12		—		—		12
Total held-to-maturity securities	$	10,490	$	158	$	42	$	10,606	$	11,519	$	4	$	401	$	11,122

The following table summarizes our securities that were in an unrealized loss position as of September 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
September 30, 2019
Securities available for sale:
U.S Treasury, agencies, and corporations	$	50	—		(a)	$	45	1		$	95	1
Agency residential collateralized mortgage obligations	2,434		$	8		3,919		$	51	6,353		$	59
Agency residential mortgage-backed securities	100		—		(a)	824		7		924		7
Agency commercial mortgage-backed securities	558		2			1,269		17		1,827		19
Held-to-maturity securities:
Agency residential collateralized mortgage obligations	1,368		7			2,601		34		3,969		41
Agency residential mortgage-backed securities	—		—		(a)	—		—		—		—
Agency commercial mortgage-backed securities	527		1			—		—		527		1
Asset-backed securities	1		—		(a)	—		—		1		—
Other securities	10		—		(a)	—		—		10		—
Total temporarily impaired securities	$	5,048	$	18		$	8,658	$	110	$	13,706	$	128
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 September 30, 2019, gross unrealized losses totaled less than $1 million for U.S. Treasury, agencies, and corporations and agency residential mortgage-backed securities available for sale and less than $1 million for agency residential mortgage-backed securities, asset-backed 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 September 30, 2019, we had $59 million of gross unrealized losses related to 228 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 3.66 years at September 30, 2019. At September 30, 2019, we also had $7 million of gross unrealized losses related to 200 agency residential mortgage-backed securities positions and $19 million of gross unrealized losses related to 17 agency commercial mortgage backed securities positions with weighted-average maturities of 3.5 years and 4.33 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 nine months ended September 30, 2019.

At September 30, 2019, securities available for sale and held-to-maturity securities totaling $8.3 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.

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September 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	$	321	$	324	$	46	$	46
Due after one through five years	16,927		17,042		7,532		7,567
Due after five through ten years	4,866		5,004		2,912		2,993
Due after ten years	8		8		—		—
Total	$	22,122	$	22,378	$	10,490	$	10,606

7. Derivatives and Hedging Activities

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

At September 30, 2019, after taking into account the effects of bilateral collateral and master netting agreements, we had $116 million of derivative assets and less than $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 $1.0 billion and derivative liabilities of $322 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 September 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:

77

	September 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	$	37,125	$	210		$	28		$	28,546	$	50		$	(10	)
Foreign exchange	122		—			1			122		2			—
Total	37,247		210			29			28,668		52			(10		)
Derivatives not designated as hedging instruments:
Interest rate	71,733		1,026			240			63,454		365			307
Foreign exchange	6,065		101			95			6,829		104			95
Commodity	5,877		281			272			2,002		333			323
Credit	543		1			7			226		1			1
Other (a)	4,142		16			10			1,466		9			7
Total	88,360		1,425			624			73,977		812			733
Netting adjustments (b)	—		(492		)	(331		)	—		(333		)	(337		)
Net derivatives in the balance sheet	125,607		1,143			322			102,645		531			386
Other collateral (c)	—		(4		)	(48		)	—		(2		)	(33		)
Net derivative amounts	$	125,607	$	1,139		$	274		$	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 nine-month period ended September 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 September 30, 2019, and December 31, 2018, related to cumulative basis adjustments for fair value hedges.

	September 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	$	9,169	$	313
Interest rate contracts	Certificate of deposit ($100,000 or more)	88		—
Interest rate contracts	Other time deposits	87		—
	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 $9 million and $10 million at September 30, 2019, and December 31, 2018, respectively,

Cash flow hedges. During the nine-month period ended September 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 September 30, 2019, we expect to reclassify an estimated $120 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 $5 million of net losses related to terminated cash flow hedges from AOCI to income during the next 12 months. As of September 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 nine-month periods ended September 30, 2019, and September 30, 2018.

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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
Three months ended September 30, 2019
Total amounts presented in the consolidated statement of income	$	(114	)	$	1,073		$	(227	)	$	27
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	(75		)	—			—			—
Recognized on derivatives designated as hedging instruments	72			—			—			—
Net income (expense) recognized on fair value hedges	$	(3	)	—			—			—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	(1	)	$	(8	)	—			—
Net income (expense) recognized on cash flow hedges	$	(1	)	$	(8	)	—			—
Three months ended September 30, 2018
Total amounts presented in the consolidated statement of income	$	(108	)	$	1,025		$	(140	)	$	23
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	$	41		—			$	—		—
Recognized on derivatives designated as hedging instruments	(46		)	—			—			—
Net income (expense) recognized on fair value hedges	$	(5	)	—			$	—		—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	(2	)	$	(15	)	—			—
Net income (expense) recognized on cash flow hedges	$	(2	)	$	(15	)	—			—

	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
Nine months ended September 30, 2019
Total amounts presented in the consolidated statement of income	$	(354	)	$	3,221		$	(652	)	$	54
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	(320		)	—			(1		)	—
Recognized on derivatives designated as hedging instruments	296			—			—			—
Net income (expense) recognized on fair value hedges	$	(24	)	—			(1		)	—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	(2	)	$	(51	)	—			—
Net income (expense) recognized on cash flow hedges	$	(2	)	$	(51	)	—			—
Nine months ended September 30, 2018
Total amounts presented in the consolidated statement of income	$	(302	)	$	2,965		$	(343	)	$	143
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	$	134		—			$	1		—
Recognized on derivatives designated as hedging instruments	(140		)	—			—			—
Net income (expense) recognized on fair value hedges	$	(6	)	—			$	1		—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	(2		)	$	(42	)	—			—
Net income (expense) recognized on cash flow hedges	(2		)	$	(42	)	—			—

Net investment hedges. We enter into foreign currency forward contracts to hedge our exposure to changes in the carrying value of our investments as a result of changes in the related foreign exchange rates. At September 30, 2019, AOCI reflected unrecognized, after-tax gains totaling $25 million related to cumulative changes in the fair value of our net investment hedges, which offset the unrecognized, after-tax foreign currency losses on net investment balances. We did not exclude any portion of our hedging instruments from the assessment of hedge effectiveness during the nine-month period ended September 30, 2019.

The following tables summarize the pre-tax net gains (losses) on our cash flow and net investment hedges for the three- and nine-month periods ended September 30, 2019, and September 30, 2018, and where they are recorded

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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 September 30, 2019
Cash Flow Hedges
Interest rate	$	86		Interest income — Loans	$	(8	)
Interest rate	(2		)	Interest expense — Long-term debt	(1		)
Interest rate	(4		)	Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	1			Other Income	—
Total	$	81			$	(9	)
Three months ended September 30, 2018
Cash Flow Hedges
Interest rate	$	(32	)	Interest income — Loans	$	(15	)
Interest rate	(1		)	Interest expense — Long-term debt	(2		)
Interest rate	1			Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	(2		)	Other Income	—
Total	$	(34	)		$	(17	)

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)
Nine months ended September 30, 2019
Cash Flow Hedges
Interest rate	$	471		Interest income — Loans	$	(51	)
Interest rate	(5		)	Interest expense — Long-term debt	(2		)
Interest rate	(10		)	Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	(3		)	Other Income	—
Total	$	453			$	(53	)
Nine months ended September 30, 2018
Cash Flow Hedges
Interest rate	$	(178	)	Interest income — Loans	$	(42	)
Interest rate	3			Interest expense — Long-term debt	(2		)
Interest rate	2			Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	8			Other Income	—
Total	$	(165	)		$	(44	)

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 nine-month periods ended September 30, 2019, and September 30, 2018, and where they are recorded on the income statement.

	Three months ended September 30, 2019										Three months ended September 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	$	16		—	$	(1	)	$	15		$	8	—	2			$	10
Foreign exchange	11			—	—			11			10		—	—			10
Commodity	2			—	—			2			—		—	—			—
Credit	(5		)	—	(8		)	(13		)	—		—	$	(7	)	(7		)
Other	—			5	(3		)	2			—		1	1			2
Total net gains (losses)	$	24		5	$	(12	)	$	17		$	18	1	$	(4	)	$	15

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	Nine months ended September 30, 2019											Nine months ended September 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	$	31		$	—	$	(3	)	$	28		$	28	—		$	4		$	32
Foreign exchange	32			—		—			32			32		—		—			32
Commodity	5			—		—			5			6		—		—			6
Credit	(4		)	—		(23		)	(27		)	2		—		(26		)	(24		)
Other	—			5		—			5			—		$	1	13			14
Total net gains (losses)	$	64		$	5	$	(26	)	$	43		$	68	$	1	$	(9	)	$	60

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 $212 million was netted against derivative assets on the balance sheet at September 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 $51 million at September 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	September 30, 2019		December 31, 2018
Interest rate	$	1,103	$	308
Foreign exchange	58		60
Commodity	178		187
Credit	—		—
Other	16		9
Derivative assets before collateral	1,355		564
Less: Related collateral	212		33
Total derivative assets	$	1,143	$	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 September 30, 2019, we had gross exposure of $551 million to broker-dealers and banks. We had net exposure of $230 million after the application of master netting agreements and cash collateral, where such qualifying agreements exist. We had net exposure of $225 million after considering $5 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 $7 million at September 30, 2019, which we estimate to be the potential future losses on amounts due from client counterparties in the event of default. At September 30, 2019, we had gross exposure of $955 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 $913 million on our derivatives with these counterparties after the application of master netting agreements, collateral, and the related reserve. 

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Credit Derivatives

We are a buyer and, under limited circumstances, may be a seller of credit protection through the credit derivative market. We purchase credit derivatives to manage the credit risk associated with specific commercial lending and swap obligations as well as exposures to debt securities. Our credit derivative portfolio was in a net liability position of $6 million as of September 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 September 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 September 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.

	September 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	$	179	14.86	8.75	%	$	22	13.43	17.18	%
Total credit derivatives sold	$	179	—	—		$	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 September 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 September 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 $100 million, which was comprised of $101 million in derivative assets and $201 million in derivative liabilities. We had $109 million in cash and securities collateral posted to cover those positions as of September 30, 2019. There were no derivative contracts with credit risk contingent features held by KeyCorp at September 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 September 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 September 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 September 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.

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

Commercial

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

	Three months ended September 30,						Nine months ended September 30,
in millions	2019			2018			2019			2018
Balance at beginning of period	$	509		$	451		$	502		$	412
Servicing retained from loan sales	30			25			71			81
Purchases	10			17			33			50
Amortization	(29		)	(25		)	(86		)	(75		)
Temporary impairments	(2		)	—			(2		)	—
Balance at end of period	$	518		$	468		$	518		$	468
Fair value at end of period	$	681		$	672		$	681		$	672

The fair value of commercial mortgage servicing assets is determined by calculating the present value of future cash flows associated with servicing the loans. This calculation uses a number of assumptions that are based on current market conditions. The range and weighted average of the significant unobservable inputs used to determine the fair value of our commercial mortgage servicing assets at September 30, 2019, and September 30, 2018, along with the valuation techniques, are shown in the following table: 

dollars in millions		September 30, 2019	September 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% (1.16%)
	Residual cash flows discount rate	7.00 - 11.50% (9.30%)	7.00 - 15.00% (9.10%)
	Escrow earn rate	1.46 - 2.36% (2.02%)	2.38 - 3.94% (3.07%)
	Loan assumption rate	0.01 - 3.37% (1.38%)	0.00 - 3.22% (1.34%)

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.

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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 $147 million for the nine-month period ended September 30, 2019, and $126 million for the nine-month period ended September 30, 2018. This fee income was offset by $88 million of amortization for the nine-month period ended September 30, 2019, and $75 million for the nine-month period ended September 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 September 30,						Nine months ended September 30,
in millions	2019			2018			2019			2018
Balance at beginning of period	$	39		$	34		$	37		$	31
Servicing retained from loan sales	5			2			9			7
Purchases	—			—			—			—
Amortization	(3		)	(1		)	(5		)	(3		)
Balance at end of period	$	41		$	35		$	41		$	35
Fair value at end of period	$	43		$	49		$	43		$	49

The fair value of mortgage servicing assets is determined by calculating the present value of future cash flows associated with servicing the loans. This calculation uses a number of assumptions that are based on current market conditions. The range and weighted-average of the significant unobservable inputs used to fair value our mortgage servicing assets at September 30, 2019, and September 30, 2018, along with the valuation techniques, are shown in the following table:

dollars in millions		September 30, 2019	September 30, 2018
Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Discounted cash flow	Prepayment speed	12.06 - 62.96% (14.53%)	8.27 - 55.15% (9.35%)
	Discount rate	7.50 - 10.00% (7.53%)	7.50 - 10.00% (7.54%)
	Servicing cost	$62 - $4,375 ($67.67)	$62 - $4,375 ($67.76)

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

The amortization of residential servicing assets is determined in proportion to, and over the period of, the estimated net residential servicing income. The amortization of servicing assets for September 30, 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 $15 million for the nine-month period ended September 30, 2019, and $10 million for the nine-month period ended September 30, 2018. This fee income was offset by $5 million of amortization for the nine-month period ended September 30, 2019, and $3 million for the nine-month period ended September 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.

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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 one 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 September 30, 2019		Nine months ended September 30, 2019
Operating lease cost	$	34	$	102
Finance lease cost:
Amortization of right-of-use assets	1		2
Variable lease cost	8		19
Total lease cost (a), (b)	$	43	$	123

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

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

Cash flows related to leases are summarized as follows:

in millions	Three months ended September 30, 2019		Nine months ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities: (a)
Operating cash flows from operating leases	$	37	$	110
Financing cash flows from finance leases	—		1
Right-of-use assets obtained in exchange for lease obligations: (b)
Operating leases	$	17	$	61
Net gain recognized from sale leaseback transaction (c)	$	14	$	14

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

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

(c) During the third quarter of 2019, we entered into a sale leaseback transaction related to one branch which resulted in total proceeds of $16 million.

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

in millions	Balance sheet classification	September 30, 2019
Operating lease assets	Accrued income and other assets	$	675
Operating lease liabilities	Accrued expense and other liabilities	758
Finance leases:
Property and equipment, gross	Premises and equipment	28
Accumulated depreciation	Premises and equipment	(17		)
Property and equipment, net		11
Finance lease liabilities	Long-term debt	14

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

	September 30, 2019
Weighted-average remaining lease term:
Operating leases	7.6
Finance leases	6.28
Weighted-average discount rate:
Operating leases	3.27	%
Finance leases	3.94	%

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Maturities of lease liabilities are summarized as follows:

in millions	Operating Leases		Finance Leases		Total
2019	$	36	$	1	$	37
2020	143		3		146
2021	130		3		133
2022	115		2		117
2023	99		2		101
Thereafter	341		5		346
Total lease payments	864		16		880
Less imputed interest	106		2		108
Total	$	758	$	14	$	772

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 September 30, 2019		Nine months ended September 30, 2019
Sales-type and direct financing leases
Interest income on lease receivable	$	31	$	92
Interest income related to accretion of unguaranteed residual asset	3		9
Interest income on deferred fees and costs	—		—
Total sales-type and direct financing lease income	34		101
Operating leases
Operating lease income related to lease payments	34		100
Other operating leasing gains	8		23
Total operating lease income and other leasing gains	42		123
Total lease income	$	76	$	224

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	September 30, 2019
Lease receivables	$	3,632
Unearned income	(339		)
Unguaranteed residual value	450
Deferred fees and costs	14
Net investment in sales-type and direct financing leases	$	3,757

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 $305 million at September 30, 2019.

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At September 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	$	307
2020	1,077
2021	802
2022	557
2023	360
Thereafter	624
Total lease payments	$	3,727

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

in millions	Operating lease payments
2019	$	33
2020	126
2021	109
2022	92
2023	77
Thereafter	222
Total lease payments	$	659

The carrying amount of operating lease assets at September 30, 2019, was $915 million.

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 September 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 September 30, 2019, and December 31, 2018, we had liabilities of $505 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 September 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
September 30, 2019
LIHTC investments	$	6,385	$	2,603	$	1,793
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 nine months of 2019, we recognized $137 million of amortization and $135 million of tax credits associated with these investments within “income taxes” on our income statement. During the first nine months of 2018, we recognized $126 million of amortization and $122 million of tax credits associated with these investments within “income taxes” on our income statement.

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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 $73 million and $96 million at September 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 September 30, 2019, and December 31, 2018.

	Unconsolidated VIEs
in millions	Total Assets		Total Liabilities		Maximum Exposure to Loss
September 30, 2019
Indirect investments	$	13,731	$	288	$	97
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 September 30, 2019, and December 31, 2018, that can be used to settle the entities’ obligations. The entities had no liabilities at September 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 $274 million at September 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 September 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 14.5% for the third quarter of 2019 and 15.5% for the third 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 September 30, 2019, we had a net deferred tax liability of $162 million, compared to a net deferred tax asset of $222 million at December 31, 2018, which are both 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

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assessments involve a degree of subjectivity and may undergo change. Based on these criteria, we had a valuation allowance of $11 million at September 30, 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 September 30, 2019, Key’s unrecognized tax benefits were $32 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. Acquisition 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.

Discontinued operations

Discontinued operations primarily includes our government-guaranteed and private education lending business. At September 30, 2019, and December 31, 2018, approximately $915 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 September 30, 2019, and December 31, 2018:

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	September 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	$	215	$	(16	)	$	(199	)	—	$	14	$	(14	)	—			—
Total	$	215	$	(16	)	$	(199	)	—	$	14	$	(14	)	—			—
Offsetting of financial liabilities:
Repurchase agreements (c)	$	182	$	(20	)	$	(162	)	—	$	319	$	(14	)	$	(305	)	—
Total	$	182	$	(20	)	$	(162	)	—	$	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 September 30, 2019, the carrying amount of assets pledged as collateral against repurchase agreements totaled $208 million. Assets pledged as collateral are reported in “securities available for sale” and “held-to-maturity securities” on our balance sheet. At September 30, 2019, the liabilities associated with collateral pledged were solely comprised of customer sweep financing activity and had a carrying value of $162 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.

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 September 30,						Nine months ended September 30,
in millions	2019			2018			2019			2018
Interest cost on PBO	$	11		$	10		$	34		$	30
Expected return on plan assets	(12		)	(13		)	(36		)	(39		)
Amortization of losses	4			4			11			12
Net pension cost	$	3		$	1		$	9		$	3

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.

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

dollars in millions	Trust Preferred Securities, Net of Discount (a)		Common Stock		Principal Amount of Debentures, Net of Discount (b)		Interest Rate of Trust Preferred Securities and Debentures (c)		Maturity of Trust Preferred Securities and Debentures
September 30, 2019
KeyCorp Capital I	$	156	$	6	$	162	3.059	%	2028
KeyCorp Capital II	108		4		112		6.875		2029
KeyCorp Capital III	142		4		146		7.750		2029
HNC Statutory Trust III	19		1		20		3.548		2035
Willow Grove Statutory Trust I	18		1		19		3.429		2036
HNC Statutory Trust IV	16		1		17		3.546		2037
Westbank Capital Trust II	7		—		7		4.346		2034
Westbank Capital Trust III	7		—		7		4.346		2034
Total	$	473	$	17	$	490	5.427	%	—
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 $64 million at September 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 $64 million at September 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 September 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.

September 30, 2019	Maximum Potential Undiscounted Future Payments		Liability Recorded
in millions
Financial guarantees:
Standby letters of credit	$	3,210	$	71
Recourse agreement with FNMA	4,614		6
Residential mortgage reserve	1,709		6
Written put options (a)	2,533		47
Total	$	12,066	$	130

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

We determine the payment/performance risk associated with each type of guarantee described below based on the probability that we could be required to make the maximum potential undiscounted future payments shown in the preceding table. We use a scale of low (0% to 30% probability of payment), moderate (greater than 30% to 70% probability of payment), or high (greater than 70% probability of payment) to assess the payment/performance risk, and have determined that the payment/performance risk associated with each type of guarantee outstanding at September 30, 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 September 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 15 years.

Recourse agreement with FNMA. At September 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 $15.7 billion. The maximum potential amount of undiscounted future payments that we could be required to make under this program, as shown in the preceding table, is equal to approximately 29% of the principal balance of loans outstanding at September 30, 2019. 

Residential Mortgage Banking. At September 30, 2019, the unpaid principal balance outstanding of loans sold by us in this program was $5.7 billion. The risk assessment is low for the residential mortgage product. The maximum potential amount of undiscounted future payments that we could be required to make under this program, as shown in the preceding table, is equal to approximately 30% of the principal balance of loans outstanding at September 30, 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 September 30, 2019. For more information on our residential mortgages, see Note 8 (“Mortgage Servicing Assets “).

Written put options. At September 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 of 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 nine months ended September 30, 2019, and September 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	579			346			4			12			941
Amounts reclassified from AOCI, net of income taxes (a)	(11		)	40			—			7			36
Net current-period other comprehensive income, net of income taxes	568			386			4			19			977
Balance at September 30, 2019	$	195		$	336		$	(10	)	$	(362	)	$	159
Balance at June 30, 2019	$	102		$	268		$	(10	)	$	(362	)	$	(2	)
Other comprehensive income before reclassification, net of income taxes	104			62			—			(2		)	164
Amounts reclassified from AOCI, net of income taxes (a)	(11		)	6			—			2			(3		)
Net current-period other comprehensive income, net of income taxes	93			68			—			—			161
Balance at September 30, 2019	$	195		$	336		$	(10	)	$	(362	)	$	159
Balance at December 31, 2017	$	(311	)	$	(86	)	$	9		$	(391	)	$	(779	)
Other comprehensive income before reclassification, net of income taxes	(288		)	(126		)	(10		)	—			(424		)
Amounts reclassified from AOCI, net of income taxes (a)	—			34			—			8			42
Other amounts reclassified from AOCI, net of income taxes	—			—			(5		)	—			(5		)
Net current-period other comprehensive income, net of income taxes	(288		)	(92		)	(15		)	8			(387		)
Balance at September 30, 2018	$	(599	)	$	(178	)	$	(6	)	$	(383	)	$	(1,166	)
Balance at June 30, 2018	(527		)	$	(166	)	$	(7	)	$	(385	)	$	(1,085	)
Other comprehensive income before reclassification, net of income taxes	(72		)	(26		)	1			—			(97		)
Amounts reclassified from AOCI, net of income taxes (a)	—			14			—			2			16
Net current-period other comprehensive income, net of income taxes	(72		)	(12		)	1			2			(81		)
Balance at September 30, 2018	$	(599	)	$	(178	)	$	(6	)	$	(383	)	$	(1,166	)

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

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

	Nine months ended September 30,						Affected Line Item in the Statement Where Net Income is Presented
in millions	2019			2018
Unrealized gains (losses) on available for sale securities
Realized gains	$	15		—			Other income
	15			—			Income (loss) from continuing operations before income taxes
	4			—			Income taxes
	$	11		—			Income (loss) from continuing operations
Unrealized gains (losses) on derivative financial instruments
Interest rate	$	(51	)	$	(42	)	Interest income — Loans
Interest rate	(2		)	(2		)	Interest expense — Long-term debt
	(53		)	(44		)	Income (loss) from continuing operations before income taxes
	(13		)	(10		)	Income taxes
	$	(40	)	$	(34	)	Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(11	)	(12		)	Other expense
Amortization of unrecognized prior service credit	1			—			Other expense
	(10		)	(12		)	Income (loss) from continuing operations before income taxes
	(3		)	(4		)	Income taxes
	$	(7	)	(8		)	Income (loss) from continuing operations

	Three months ended September 30,						Affected Line Item in the Statement Where Net Income is Presented
in millions	2019			2018
Unrealized gains (losses) on available for sale securities
Realized gains	$	15		—			Other income
	15			—			Income (loss) from continuing operations before income taxes
	4			—			Income taxes
	$	11		—			Income (loss) from continuing operations
Unrealized gains (losses) on derivative financial instruments
Interest rate	$	(8	)	$	(15	)	Interest income — Loans
Interest rate	(1		)	(2		)	Interest expense — Long-term debt
	(9		)	(17		)	Income (loss) from continuing operations before income taxes
	(3		)	(3		)	Income taxes
	$	(6	)	(14		)	Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(4	)	$	(4	)	Other expense
Amortization of unrecognized prior service credit	1			—			Other expense
	(3		)	(4		)	Income (loss) from continuing operations before income taxes
	(1		)	(2		)	Income taxes
	$	(2	)	(2		)	Income (loss) from continuing operations

18. Shareholders' Equity

Comprehensive Capital Plan

As previously reported and as authorized by the Board and pursuant to our 2019 capital plan (which is effective through the second quarter of 2020) submitted to and approved by the Federal Reserve, we have authority to repurchase up to $1.0 billion of our Common Shares. We completed $248 million of Common Share repurchases, including $248 million of Common Share repurchases in the open market and less than $1 million of Common Share repurchases related to employee equity compensation programs, in the third quarter of 2019 under this authorization.

Consistent with our 2019 capital plan, the Board declared a quarterly dividend of $.185 per Common Share for the third quarter of 2019.

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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		Third 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		.531250

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 September 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.

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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 nine-month periods ended September 30, 2019, and September 30, 2018.

Three months ended September 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)	$	595		$	583		$	399		$	415		$	(14	)		$	(5	)	$	980		$	993
Noninterest income	238			226			380			338			32				45			650			609
Total revenue (TE) (a)	833			809			779			753			18				40			1,630			1,602
Provision for credit losses	48			32			32			31			120				(1		)	200			62
Depreciation and amortization expense	27			25			35			35			36				38			98			98
Other noninterest expense	504			532			337			350			—				(16		)	841			866
Income (loss) from continuing operations before income taxes (TE)	254			220			375			337			(138		)		19			491			576
Allocated income taxes and TE adjustments	60			52			71			63			(53		)		(21		)	78			94
Income (loss) from continuing operations	194			168			304			274			(85		)		40			413			482
Income (loss) from discontinued operations, net of taxes	—			—			—			—			3				—			3			—
Net income (loss)	194			168			304			274			(82		)		40			416			482
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—			—				—			—			—
Net income (loss) attributable to Key	$	194		$	168		$	304		$	274		$	(82	)	(d)	$	40		$	416		$	482
AVERAGE BALANCES (b)
Loans and leases	$	32,760		$	31,172		$	58,215		$	56,096		$	981			$	1,199		$	91,956		$	88,467
Total assets (a)	36,417			34,368			66,549			63,488			41,192				38,873			144,158			136,729
Deposits	72,995			69,124			36,204			33,603			1,080				2,899			110,279			105,626
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	40		$	36		$	35		$	26		122				(1		)	$	197		$	61
Return on average allocated equity (b)	22.82		%	20.38		%	26.37		%	24.46		%	(3.68		)%		2.12		%	9.57		%	12.57		%
Return on average allocated equity	22.82			20.38			26.37			24.46			(3.55		)		2.12			9.64			12.57
Average full-time equivalent employees (c)	9,182			9,979			2,226			2,473			5,490				5,698			16,898			18,150

(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.

(d) Other segments included $94 million provision for credit loss, net of tax, related to a previously disclosed fraud incident.

96

Nine months ended September 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)	$	1,780		$	1,708		$	1,206		$	1,240		$	(32	)		$	(16	)	$	2,954		$	2,932
Noninterest income	683			684			1,035			974			90				212			1,808			1,870
Total revenue (TE) (a)	2,463			2,392			2,241			2,214			58				196			4,762			4,802
Provision for credit losses	133			104			80			85			123				(2		)	336			187
Depreciation and amortization expense	75			78			100			103			108				119			283			300
Other noninterest expense	1,548			1,613			1,036			1,065			54				(15		)	2,638			2,663
Income (loss) from continuing operations before income taxes (TE)	707			597			1,025			961			(227		)		94			1,505			1,652
Allocated income taxes and TE adjustments	168			142			193			156			(98		)		(23		)	263			275
Income (loss) from continuing operations	539			455			832			805			(129		)		117			1,242			1,377
Income (loss) from discontinued operations, net of taxes	—			—			—			—			6				5			6			5
Net income (loss)	539			455			832			805			(123		)		122			1,248			1,382
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—			—				—			—			—
Net income (loss) attributable to Key	$	539		$	455		$	832		$	805		$	(123	)	(d)	$	122		$	1,248		$	1,382
AVERAGE BALANCES (b)
Loans and leases	$	31,993		$	31,329		$	57,803		$	55,472		$	1,009			$	1,217		$	90,805		$	88,018
Total assets (a)	35,546			34,547			65,781			63,038			40,992				38,429			142,319			136,014
Deposits	72,202			68,281			35,534			33,191			1,426				2,601			109,162			104,073
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	114		$	109		$	88		$	66		124				—			$	326		$	175
Return on average allocated equity (b)	21.96		%	18.49		%	24.41		%	24.36		%	(2.00		)%		2.13		%	10.09		%	12.24		%
Return on average allocated equity	21.96			18.49			24.41			24.36			(1.91		)		2.22			10.14			12.28
Average full-time equivalent employees (c)	9,413			10,047			2,285			2,469			5,519				5,838			17,217			18,354

(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.

(d) Other segments included $94 million provision for credit loss, net of tax, related to a previously disclosed fraud incident.

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 nine-month periods ended September 30, 2019, and September 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 September 30, 2019						Three months ended September 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	$	89	$	16	$	105	$	89	$	17	$	106
Investment banking and debt placement fees	—		78		78		—		70		70
Services charges on deposit accounts	59		27		86		57		28		85
Cards and payments income	42		27		69		40		27		67
Other noninterest income	3		—		3		6		—		6
Total revenue from contracts with customers	$	193	$	148	$	341	$	192	$	142	$	334
Other noninterest income (a)					$	277					$	230
Noninterest income from Other(b)					32						45
Total noninterest income					$	650					$	609

(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.

97

	Nine months ended September 30, 2019						Nine months ended September 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	$	265	$	48	$	313	$	264	$	54	$	318
Investment banking and debt placement fees	—		188		188		—		185		185
Services charges on deposit accounts	169		82		251		181		84		265
Cards and payments income	123		81		204		115		82		197
Other noninterest income	10		—		10		15		1		16
Total revenue from contracts with customers	$	567	$	399	$	966	$	575	$	406	$	981
Other noninterest income (a)					$	752					$	677
Noninterest income from Other(b)					90						212
Total noninterest income					$	1,808					$	1,870

(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 September 30, 2019, and September 30, 2018.

98

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

To the Shareholders and Board of Directors of KeyCorp

Results of Review of Interim Financial Statements

We have reviewed the accompanying consolidated balance sheet of KeyCorp as of September 30, 2019, the related consolidated statements of income, comprehensive income and changes in equity for the three- and nine- month periods ended September 30, 2019 and 2018, the related consolidated statements of cash flows for the nine-month period ended September 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 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

October 31, 2019

99

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 sections titled “Supervision and regulation” and “Strategic developments” 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.

100

On April 18, 2019, we announced our 2019 capital plan. Share repurchases of up to $1.0 billion were included in the 2019 capital plan, which is effective from the third quarter of 2019 through the second quarter of 2020. 

We completed $248 million of Common Share repurchases, including $248 million of Common Share repurchases in the open market and less than $1 million of Common Share repurchases related to employee equity compensation programs, in the third quarter of 2019 under our 2019 capital plan authorization.

The following table summarizes our repurchases of our Common Shares for the three months ended September 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)
July 1 - 31	—	—	—	54,436,581
August 1 - 30	14,052,462	16.35	14,052,462	46,397,743
September 1 - 30	1,024,014	17.39	1,024,014	42,174,410
Total	15,076,476	16.42	15,076,476

 

(a) Includes Common Shares deemed surrendered by employees in connection with our stock compensation and benefit plans to satisfy tax obligations.

(b) Calculated using the remaining general repurchase amount divided by the closing price of KeyCorp Common Shares as follows: on July 31, 2019 at $18.37; on August 30, 2019, at $16.60; and on September 30, 2019, at $17.84.

Item 6. Exhibits

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 September 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 September 30, 2019, formatted in inline XBRL (contained in Exhibit 101).

^*  Furnished herewith.

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.

101

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: October 31, 2019	/s/ Douglas M. Schosser
	By:  Douglas M. Schosser
	Chief Accounting Officer (Principal Accounting Officer)

102

EX-15

EXHIBIT 15

ACKNOWLEDGMENT OF ERNST & YOUNG LLP,

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

October 31, 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 October 31, 2019 relating to the unaudited consolidated interim financial statements of KeyCorp that are included in its Form 10-Q for the quarter ended September 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: October 31, 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: October 31, 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 September 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: October 31, 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 September 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: October 31, 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

Derivatives and Hedging Activities (Tables)

9 Months Ended

Sep. 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 September 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:

	September 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	$	37,125	$	210		$	28		$	28,546	$	50		$	(10	)
Foreign exchange	122		—			1			122		2			—
Total	37,247		210			29			28,668		52			(10		)
Derivatives not designated as hedging instruments:
Interest rate	71,733		1,026			240			63,454		365			307
Foreign exchange	6,065		101			95			6,829		104			95
Commodity	5,877		281			272			2,002		333			323
Credit	543		1			7			226		1			1
Other (a)	4,142		16			10			1,466		9			7
Total	88,360		1,425			624			73,977		812			733
Netting adjustments (b)	—		(492		)	(331		)	—		(333		)	(337		)
Net derivatives in the balance sheet	125,607		1,143			322			102,645		531			386
Other collateral (c)	—		(4		)	(48		)	—		(2		)	(33		)
Net derivative amounts	$	125,607	$	1,139		$	274		$	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 September 30, 2019, and December 31, 2018, related to cumulative basis adjustments for fair value hedges.

	September 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	$	9,169	$	313
Interest rate contracts	Certificate of deposit ($100,000 or more)	88		—
Interest rate contracts	Other time deposits	87		—
	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 $9 million and $10 million at September 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 nine-month periods ended September 30, 2019, and September 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 September 30, 2019
Total amounts presented in the consolidated statement of income	$	(114	)	$	1,073		$	(227	)	$	27
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	(75		)	—			—			—
Recognized on derivatives designated as hedging instruments	72			—			—			—
Net income (expense) recognized on fair value hedges	$	(3	)	—			—			—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	(1	)	$	(8	)	—			—
Net income (expense) recognized on cash flow hedges	$	(1	)	$	(8	)	—			—
Three months ended September 30, 2018
Total amounts presented in the consolidated statement of income	$	(108	)	$	1,025		$	(140	)	$	23
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	$	41		—			$	—		—
Recognized on derivatives designated as hedging instruments	(46		)	—			—			—
Net income (expense) recognized on fair value hedges	$	(5	)	—			$	—		—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	(2	)	$	(15	)	—			—
Net income (expense) recognized on cash flow hedges	$	(2	)	$	(15	)	—			—

	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
Nine months ended September 30, 2019
Total amounts presented in the consolidated statement of income	$	(354	)	$	3,221		$	(652	)	$	54
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	(320		)	—			(1		)	—
Recognized on derivatives designated as hedging instruments	296			—			—			—
Net income (expense) recognized on fair value hedges	$	(24	)	—			(1		)	—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	(2	)	$	(51	)	—			—
Net income (expense) recognized on cash flow hedges	$	(2	)	$	(51	)	—			—
Nine months ended September 30, 2018
Total amounts presented in the consolidated statement of income	$	(302	)	$	2,965		$	(343	)	$	143
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	$	134		—			$	1		—
Recognized on derivatives designated as hedging instruments	(140		)	—			—			—
Net income (expense) recognized on fair value hedges	$	(6	)	—			$	1		—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	(2		)	$	(42	)	—			—
Net income (expense) recognized on cash flow hedges	(2		)	$	(42	)	—			—

Derivative Instrument Cash Flow Hedge Earning Recognized by Income Statement Location

The following tables summarize the pre-tax net gains (losses) on our cash flow and net investment hedges for the three- and nine-month periods ended September 30, 2019, and September 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 September 30, 2019
Cash Flow Hedges
Interest rate	$	86		Interest income — Loans	$	(8	)
Interest rate	(2		)	Interest expense — Long-term debt	(1		)
Interest rate	(4		)	Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	1			Other Income	—
Total	$	81			$	(9	)
Three months ended September 30, 2018
Cash Flow Hedges
Interest rate	$	(32	)	Interest income — Loans	$	(15	)
Interest rate	(1		)	Interest expense — Long-term debt	(2		)
Interest rate	1			Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	(2		)	Other Income	—
Total	$	(34	)		$	(17	)

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)
Nine months ended September 30, 2019
Cash Flow Hedges
Interest rate	$	471		Interest income — Loans	$	(51	)
Interest rate	(5		)	Interest expense — Long-term debt	(2		)
Interest rate	(10		)	Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	(3		)	Other Income	—
Total	$	453			$	(53	)
Nine months ended September 30, 2018
Cash Flow Hedges
Interest rate	$	(178	)	Interest income — Loans	$	(42	)
Interest rate	3			Interest expense — Long-term debt	(2		)
Interest rate	2			Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	8			Other Income	—
Total	$	(165	)		$	(44	)

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 nine-month periods ended September 30, 2019, and September 30, 2018, and where they are recorded on the income statement.

	Three months ended September 30, 2019										Three months ended September 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	$	16		—	$	(1	)	$	15		$	8	—	2			$	10
Foreign exchange	11			—	—			11			10		—	—			10
Commodity	2			—	—			2			—		—	—			—
Credit	(5		)	—	(8		)	(13		)	—		—	$	(7	)	(7		)
Other	—			5	(3		)	2			—		1	1			2
Total net gains (losses)	$	24		5	$	(12	)	$	17		$	18	1	$	(4	)	$	15

	Nine months ended September 30, 2019											Nine months ended September 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	$	31		$	—	$	(3	)	$	28		$	28	—		$	4		$	32
Foreign exchange	32			—		—			32			32		—		—			32
Commodity	5			—		—			5			6		—		—			6
Credit	(4		)	—		(23		)	(27		)	2		—		(26		)	(24		)
Other	—			5		—			5			—		$	1	13			14
Total net gains (losses)	$	64		$	5	$	(26	)	$	43		$	68	$	1	$	(9	)	$	60

Fair Value of Derivative Assets by Type

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

in millions	September 30, 2019		December 31, 2018
Interest rate	$	1,103	$	308
Foreign exchange	58		60
Commodity	178		187
Credit	—		—
Other	16		9
Derivative assets before collateral	1,355		564
Less: Related collateral	212		33
Total derivative assets	$	1,143	$	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 September 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 September 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.

	September 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	$	179	14.86	8.75	%	$	22	13.43	17.18	%
Total credit derivatives sold	$	179	—	—		$	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 September 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 September 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 September 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.

	September 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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Loan Portfolio (Tables)

9 Months Ended

Sep. 30, 2019

Loans Receivables [Abstract]

Loans by Category

in millions	September 30, 2019		December 31, 2018
Commercial and industrial (a)	$	48,362	$	45,753
Commercial real estate:
Commercial mortgage	13,167		14,285
Construction	1,480		1,666
Total commercial real estate loans	14,647		15,951
Commercial lease financing (b)	4,470		4,606
Total commercial loans	67,479		66,310
Residential — prime loans:
Real estate — residential mortgage	6,527		5,513
Home equity loans	10,456		11,142
Total residential — prime loans	16,983		16,655
Consumer direct loans	2,789		1,809
Credit cards	1,105		1,144
Consumer indirect loans	4,404		3,634
Total consumer loans	25,281		23,242
Total loans (c)	$	92,760	$	89,552

(a) Loan balances include $147 million and $132 million of commercial credit card balances at September 30, 2019, and December 31, 2018, respectively.

(b) Commercial lease financing includes receivables held as collateral for a secured borrowing of $10 million and $10 million at September 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 $915 million at September 30, 2019, and $1.1 billion at December 31, 2018, related to the discontinued operations of the education lending business.

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Revenue from Contracts with Customers

9 Months Ended

Sep. 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 nine-month periods ended September 30, 2019, and September 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 September 30, 2019						Three months ended September 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	$	89	$	16	$	105	$	89	$	17	$	106
Investment banking and debt placement fees	—		78		78		—		70		70
Services charges on deposit accounts	59		27		86		57		28		85
Cards and payments income	42		27		69		40		27		67
Other noninterest income	3		—		3		6		—		6
Total revenue from contracts with customers	$	193	$	148	$	341	$	192	$	142	$	334
Other noninterest income (a)					$	277					$	230
Noninterest income from Other(b)					32						45
Total noninterest income					$	650					$	609

(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.

	Nine months ended September 30, 2019						Nine months ended September 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	$	265	$	48	$	313	$	264	$	54	$	318
Investment banking and debt placement fees	—		188		188		—		185		185
Services charges on deposit accounts	169		82		251		181		84		265
Cards and payments income	123		81		204		115		82		197
Other noninterest income	10		—		10		15		1		16
Total revenue from contracts with customers	$	567	$	399	$	966	$	575	$	406	$	981
Other noninterest income (a)					$	752					$	677
Noninterest income from Other(b)					90						212
Total noninterest income					$	1,808					$	1,870

(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 September 30, 2019, and September 30, 2018.

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Loan Portfolio

9 Months Ended

Sep. 30, 2019

Loans Receivables [Abstract]

Loan Portfolio

3. Loan Portfolio

in millions	September 30, 2019		December 31, 2018
Commercial and industrial (a)	$	48,362	$	45,753
Commercial real estate:
Commercial mortgage	13,167		14,285
Construction	1,480		1,666
Total commercial real estate loans	14,647		15,951
Commercial lease financing (b)	4,470		4,606
Total commercial loans	67,479		66,310
Residential — prime loans:
Real estate — residential mortgage	6,527		5,513
Home equity loans	10,456		11,142
Total residential — prime loans	16,983		16,655
Consumer direct loans	2,789		1,809
Credit cards	1,105		1,144
Consumer indirect loans	4,404		3,634
Total consumer loans	25,281		23,242
Total loans (c)	$	92,760	$	89,552

(a) Loan balances include $147 million and $132 million of commercial credit card balances at September 30, 2019, and December 31, 2018, respectively.

(b) Commercial lease financing includes receivables held as collateral for a secured borrowing of $10 million and $10 million at September 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 $915 million at September 30, 2019, and $1.1 billion at December 31, 2018, related to the discontinued operations of the education lending business.

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Derivatives and Hedging Activities

9 Months Ended

Sep. 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 September 30, 2019, after taking into account the effects of bilateral collateral and master netting agreements, we had $116 million of derivative assets and less than $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 $1.0 billion and derivative liabilities of $322 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 September 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:

	September 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	$	37,125	$	210		$	28		$	28,546	$	50		$	(10	)
Foreign exchange	122		—			1			122		2			—
Total	37,247		210			29			28,668		52			(10		)
Derivatives not designated as hedging instruments:
Interest rate	71,733		1,026			240			63,454		365			307
Foreign exchange	6,065		101			95			6,829		104			95
Commodity	5,877		281			272			2,002		333			323
Credit	543		1			7			226		1			1
Other (a)	4,142		16			10			1,466		9			7
Total	88,360		1,425			624			73,977		812			733
Netting adjustments (b)	—		(492		)	(331		)	—		(333		)	(337		)
Net derivatives in the balance sheet	125,607		1,143			322			102,645		531			386
Other collateral (c)	—		(4		)	(48		)	—		(2		)	(33		)
Net derivative amounts	$	125,607	$	1,139		$	274		$	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 nine-month period ended September 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 September 30, 2019, and December 31, 2018, related to cumulative basis adjustments for fair value hedges.

	September 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	$	9,169	$	313
Interest rate contracts	Certificate of deposit ($100,000 or more)	88		—
Interest rate contracts	Other time deposits	87		—
	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 $9 million and $10 million at September 30, 2019, and December 31, 2018, respectively,

Cash flow hedges. During the nine-month period ended September 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 September 30, 2019, we expect to reclassify an estimated $120 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 $5 million of net losses related to terminated cash flow hedges from AOCI to income during the next 12 months. As of September 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 nine-month periods ended September 30, 2019, and September 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 September 30, 2019
Total amounts presented in the consolidated statement of income	$	(114	)	$	1,073		$	(227	)	$	27
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	(75		)	—			—			—
Recognized on derivatives designated as hedging instruments	72			—			—			—
Net income (expense) recognized on fair value hedges	$	(3	)	—			—			—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	(1	)	$	(8	)	—			—
Net income (expense) recognized on cash flow hedges	$	(1	)	$	(8	)	—			—
Three months ended September 30, 2018
Total amounts presented in the consolidated statement of income	$	(108	)	$	1,025		$	(140	)	$	23
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	$	41		—			$	—		—
Recognized on derivatives designated as hedging instruments	(46		)	—			—			—
Net income (expense) recognized on fair value hedges	$	(5	)	—			$	—		—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	(2	)	$	(15	)	—			—
Net income (expense) recognized on cash flow hedges	$	(2	)	$	(15	)	—			—

	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
Nine months ended September 30, 2019
Total amounts presented in the consolidated statement of income	$	(354	)	$	3,221		$	(652	)	$	54
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	(320		)	—			(1		)	—
Recognized on derivatives designated as hedging instruments	296			—			—			—
Net income (expense) recognized on fair value hedges	$	(24	)	—			(1		)	—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	(2	)	$	(51	)	—			—
Net income (expense) recognized on cash flow hedges	$	(2	)	$	(51	)	—			—
Nine months ended September 30, 2018
Total amounts presented in the consolidated statement of income	$	(302	)	$	2,965		$	(343	)	$	143
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	$	134		—			$	1		—
Recognized on derivatives designated as hedging instruments	(140		)	—			—			—
Net income (expense) recognized on fair value hedges	$	(6	)	—			$	1		—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	(2		)	$	(42	)	—			—
Net income (expense) recognized on cash flow hedges	(2		)	$	(42	)	—			—

Net investment hedges. We enter into foreign currency forward contracts to hedge our exposure to changes in the carrying value of our investments as a result of changes in the related foreign exchange rates. At September 30, 2019, AOCI reflected unrecognized, after-tax gains totaling $25 million related to cumulative changes in the fair value of our net investment hedges, which offset the unrecognized, after-tax foreign currency losses on net investment balances. We did not exclude any portion of our hedging instruments from the assessment of hedge effectiveness during the nine-month period ended September 30, 2019.

The following tables summarize the pre-tax net gains (losses) on our cash flow and net investment hedges for the three- and nine-month periods ended September 30, 2019, and September 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 September 30, 2019
Cash Flow Hedges
Interest rate	$	86		Interest income — Loans	$	(8	)
Interest rate	(2		)	Interest expense — Long-term debt	(1		)
Interest rate	(4		)	Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	1			Other Income	—
Total	$	81			$	(9	)
Three months ended September 30, 2018
Cash Flow Hedges
Interest rate	$	(32	)	Interest income — Loans	$	(15	)
Interest rate	(1		)	Interest expense — Long-term debt	(2		)
Interest rate	1			Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	(2		)	Other Income	—
Total	$	(34	)		$	(17	)

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)
Nine months ended September 30, 2019
Cash Flow Hedges
Interest rate	$	471		Interest income — Loans	$	(51	)
Interest rate	(5		)	Interest expense — Long-term debt	(2		)
Interest rate	(10		)	Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	(3		)	Other Income	—
Total	$	453			$	(53	)
Nine months ended September 30, 2018
Cash Flow Hedges
Interest rate	$	(178	)	Interest income — Loans	$	(42	)
Interest rate	3			Interest expense — Long-term debt	(2		)
Interest rate	2			Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	8			Other Income	—
Total	$	(165	)		$	(44	)

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 nine-month periods ended September 30, 2019, and September 30, 2018, and where they are recorded on the income statement.

	Three months ended September 30, 2019										Three months ended September 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	$	16		—	$	(1	)	$	15		$	8	—	2			$	10
Foreign exchange	11			—	—			11			10		—	—			10
Commodity	2			—	—			2			—		—	—			—
Credit	(5		)	—	(8		)	(13		)	—		—	$	(7	)	(7		)
Other	—			5	(3		)	2			—		1	1			2
Total net gains (losses)	$	24		5	$	(12	)	$	17		$	18	1	$	(4	)	$	15

	Nine months ended September 30, 2019											Nine months ended September 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	$	31		$	—	$	(3	)	$	28		$	28	—		$	4		$	32
Foreign exchange	32			—		—			32			32		—		—			32
Commodity	5			—		—			5			6		—		—			6
Credit	(4		)	—		(23		)	(27		)	2		—		(26		)	(24		)
Other	—			5		—			5			—		$	1	13			14
Total net gains (losses)	$	64		$	5	$	(26	)	$	43		$	68	$	1	$	(9	)	$	60

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 $212 million was netted against derivative assets on the balance sheet at September 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 $51 million at September 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	September 30, 2019		December 31, 2018
Interest rate	$	1,103	$	308
Foreign exchange	58		60
Commodity	178		187
Credit	—		—
Other	16		9
Derivative assets before collateral	1,355		564
Less: Related collateral	212		33
Total derivative assets	$	1,143	$	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 September 30, 2019, we had gross exposure of $551 million to broker-dealers and banks. We had net exposure of $230 million after the application of master netting agreements and cash collateral, where such qualifying agreements exist. We had net exposure of $225 million after considering $5 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 $7 million at September 30, 2019, which we estimate to be the potential future losses on amounts due from client counterparties in the event of default. At September 30, 2019, we had gross exposure of $955 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 $913 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 $6 million as of September 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 September 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 September 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.

	September 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	$	179	14.86	8.75	%	$	22	13.43	17.18	%
Total credit derivatives sold	$	179	—	—		$	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 September 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 September 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 $100 million, which was comprised of $101 million in derivative assets and $201 million in derivative liabilities. We had $109 million in cash and securities collateral posted to cover those positions as of September 30, 2019. There were no derivative contracts with credit risk contingent features held by KeyCorp at September 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 September 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 September 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 September 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.

	September 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 September 30, 2019, and December 31, 2018. If KeyBank’s ratings had been downgraded below investment grade as of September 30, 2019, or December 31, 2018, payments of $4 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 September 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 - Additional Information (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Commercial Mortgage Backed Securities [Member]
Servicing Assets at Fair Value [Line Items]
Contractual fee income from servicing commercial mortgage loans	$ 147	$ 126
Amortization of servicing commercial mortgage loans	88	75
Residential Mortgage Backed Securities [Member]
Servicing Assets at Fair Value [Line Items]
Contractual fee income from servicing commercial mortgage loans	15	10
Amortization of servicing commercial mortgage loans	$ 5	$ 3

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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	Sep. 30, 2019	Dec. 31, 2018
Derivatives, Fair Value [Line Items]
Notional Amount	$ 125,607	$ 102,645
Derivative assets, netting adjustments	(492)	(333)
Derivative Assets, net	1,139	529
Derivative liabilities, netting adjustments	(331)	(337)
Derivative Liabilities, net	274	353
Derivatives Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	37,247	28,668
Derivative Assets	210	52
Derivative Liabilities	29	(10)
Derivatives Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	88,360	73,977
Derivative Assets	1,425	812
Derivative Liabilities	624	733
Interest Rate [Member] | Derivatives Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	37,125	28,546
Derivative Assets	210	50
Derivative Liabilities	28	(10)
Interest Rate [Member] | Derivatives Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	71,733	63,454
Derivative Assets	1,026	365
Derivative Liabilities	240	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	1	0
Foreign Exchange [Member] | Derivatives Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	6,065	6,829
Derivative Assets	101	104
Derivative Liabilities	95	95
Commodity [Member] | Derivatives Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	5,877	2,002
Derivative Assets	281	333
Derivative Liabilities	272	323
Credit [Member] | Derivatives Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	543	226
Derivative Assets	1	1
Derivative Liabilities	7	1
Other [Member] | Derivatives Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	4,142	1,466
Derivative Assets	16	9
Derivative Liabilities	10	7
Net Derivatives [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	125,607	102,645
Derivative Assets, net	1,143	531
Derivative Liabilities, net	322	386
Counterparty And Cash Collateral Netting [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	0	0
Derivative Assets, net	(4)	(2)
Derivative Liabilities, net	$ (48)	$ (33)

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Shareholders' Equity - Comprehensive Capital Plan (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Repurchase of common shares			$ 594,000,000	$ 820,000,000
Cash dividends declared on common shares (in usd per share)	$ 0.185	$ 0.17	$ 0.525	$ 0.395
2019 Capital Plan [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Authorized amount of share repurchases	$ 1,000,000,000.0		$ 1,000,000,000.0
Common shares repurchased, value	248,000,000
Repurchase of common shares	248,000,000
Employee equity compensation program Common Share repurchases (less than)	$ 1,000,000
Cash dividends declared on common shares (in usd per share)	$ 0.185

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Securities - Available for Sale Securities (Unrealized Loss Position) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Held-to-maturity securities:
Temporarily impaired securities, fair value, less than 12 months	$ 5,048	$ 647
Temporarily impaired securities, gross unrealized losses, less than 12 months	18	2
Temporarily impaired securities, fair value, 12 months or longer	8,658	24,158
Temporarily impaired securities, gross unrealized losses, 12 months or longer	110	943
Temporarily impaired securities, fair value	13,706	24,805
Temporarily impaired securities, gross unrealized losses	128	945
US Treasury and Government [Member]
Securities available for sale:
Fair value, less than 12 months	50	0
Gross unrealized losses, less than 12 months	1	0
Fair value, 12 months or longer	45	147
Gross unrealized losses, 12 months or longer	1	3
Fair value	95	147
Gross unrealized losses	1	3
Collateralized Mortgage Obligations [Member]
Securities available for sale:
Fair value, less than 12 months	2,434	570
Gross unrealized losses, less than 12 months	8	2
Fair value, 12 months or longer	3,919	10,945
Gross unrealized losses, 12 months or longer	51	371
Fair value	6,353	11,515
Gross unrealized losses	59	373
Held-to-maturity securities:
Fair value, less than 12 months	1,368	0
Gross unrealized losses, less than 12 months	7	0
Fair value, 12 months or longer	2,601	6,416
Gross unrealized losses, 12 months or longer	34	254
Fair value	3,969	6,416
Gross unrealized losses	41	254
Commercial Mortgage Backed Securities [Member]
Securities available for sale:
Fair value, less than 12 months	558	0
Gross unrealized losses, less than 12 months	2	0
Fair value, 12 months or longer	1,269	1,729
Gross unrealized losses, 12 months or longer	17	132
Fair value	1,827	1,729
Gross unrealized losses		132
Held-to-maturity securities:
Fair value, less than 12 months	527	73
Gross unrealized losses, less than 12 months	1	1
Fair value, 12 months or longer	0	3,359
Gross unrealized losses, 12 months or longer	0	133
Fair value	527	3,432
Gross unrealized losses	1	133
Asset-backed Securities [Member]
Held-to-maturity securities:
Fair value, less than 12 months	1
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	1
Gross unrealized losses	0
Other Securities [Member]
Held-to-maturity securities:
Fair value, less than 12 months	10
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	10
Gross unrealized losses	0
Other Mortgage-Backed Securities [Member] | Residential Mortgage Backed Securities [Member]
Securities available for sale:
Fair value, less than 12 months	100	4
Gross unrealized losses, less than 12 months	1	1
Fair value, 12 months or longer	824	1,087
Gross unrealized losses, 12 months or longer	7	36
Fair value	924	1,091
Gross unrealized losses	7	36
Held-to-maturity securities:
Fair value, less than 12 months	0	0
Gross unrealized losses, less than 12 months	1	0
Fair value, 12 months or longer	0	475
Gross unrealized losses, 12 months or longer	0	14
Fair value	0	475
Gross unrealized losses	0	$ 14
Other Mortgage-Backed Securities [Member] | Commercial Mortgage Backed Securities [Member]
Securities available for sale:
Gross unrealized losses	$ 19

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Derivatives and Hedging Activities - Credit Derivatives Sold and Held (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Credit Derivatives [Line Items]
Notional Amount	$ 179	$ 22
Average Term (Years)	0 years	0 years
Payment / Performance Risk	0.00%	0.00%
Other [Member]
Credit Derivatives [Line Items]
Notional Amount	$ 179	$ 22
Average Term (Years)	14 years 10 months 9 days	13 years 5 months 4 days
Payment / Performance Risk	8.75%	17.18%

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Contingent Liabilities and Guarantees - Guarantees (Details) $ in Millions	Sep. 30, 2019 USD ($)
Guarantor Obligations [Line Items]
Maximum Potential Undiscounted Future Payments	$ 12,066
Liability Recorded	130
Written Put Options [Member]
Guarantor Obligations [Line Items]
Maximum Potential Undiscounted Future Payments	2,533
Liability Recorded	47
Standby Letters of Credit [Member]
Guarantor Obligations [Line Items]
Maximum Potential Undiscounted Future Payments	3,210
Liability Recorded	71
Recourse Agreement with FNMA [Member]
Guarantor Obligations [Line Items]
Maximum Potential Undiscounted Future Payments	4,614
Liability Recorded	6
Residential Mortgage Reserve [Member]
Guarantor Obligations [Line Items]
Maximum Potential Undiscounted Future Payments	1,709
Liability Recorded	$ 6

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Acquisitions and Discontinued Operations - Additional Information (Details) $ in Millions	Sep. 30, 2019 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
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	915		$ 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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Earnings Per Common Share - Basic and Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
EARNINGS
Income (loss) from continuing operations		$ 413	$ 482	$ 1,242	$ 1,377
Less: Net income (loss) attributable to noncontrolling interests		0	0	0	0
Income (loss) from continuing operations attributable to Key		413	482	1,242	1,377
Less: Dividends on Preferred Stock		30	14	70	43
Income (loss) from continuing operations attributable to Key common shareholders		383	468	1,172	1,334
Income (loss) from discontinued operations, net of taxes		3	0	6	5
Net income (loss) attributable to Key common shareholders		$ 386	$ 468	$ 1,178	$ 1,339
WEIGHTED-AVERAGE COMMON SHARES
Weighted-average common shares outstanding (000) (in shares)		988,319	1,036,479	998,268	1,048,397
Effect of common share options and other stock awards (in shares)		10,009	13,497	9,632	14,419
Weighted-average common shares and potential common shares outstanding (in shares)	[1]	998,328	1,049,976	1,007,900	1,062,816
EARNINGS PER COMMON SHARE
Income (loss) from continuing operations attributable to Key common shareholders (in usd per share)		$ 0.39	$ 0.45	$ 1.17	$ 1.27
Income (loss) from discontinued operations, net of taxes (in usd per share)		0	0	0.01	0.01
Net income (loss) attributable to Key common shareholders (in usd per share)	[2]	0.39	0.45	1.18	1.28
Income (loss) from continuing operations attributable to Key common shareholders - assuming dilution (in usd per share)		0.38	0.45	1.16	1.26
Income (loss) from discontinued operations, net of taxes - assuming dilution (in usd per share)		0	0	0.01	0.01
Net income (loss) attributable to Key common shareholders (in usd per share)	[2]	$ 0.39	$ 0.45	$ 1.17	$ 1.26

[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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Asset Quality - Additional Information (Details) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019 USD ($) SecurityLoan	Sep. 30, 2018 USD ($) SecurityLoan	Sep. 30, 2019 USD ($) SecurityLoan	Sep. 30, 2018 USD ($) SecurityLoan	Dec. 31, 2018 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Provision (credit) for losses on lending-related commitments	$ 1	$ 2	$ 1	$ 3
Percentage of carrying amount of our commercial nonperforming loans outstanding	77.00%		77.00%
Percentage of nonperforming loans outstanding face value	81.00%		81.00%
Percentage of loans held for sale and other nonperforming assets	84.00%		84.00%
Net reduction to interest income	$ 7	8	$ 24	22
Interest income recognized on outstanding balances	4	4	10	9
Commitments outstanding to lend additional funds to borrowers (less than $1 million)	1		1		$ 5
Financial receivable, modifications, subsequent default, recorded investment	1	$ 2	5	$ 4
Other real estate owned nonperforming loan	$ 39		$ 39		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	79	82	255	178
Real Estate - Residential Mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financial receivable, modifications, subsequent default, recorded investment			$ 104		$ 113

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Asset Quality - Breakdown of Nonperforming TDRs by Loans Category (Details) $ in Millions	9 Months Ended
	Sep. 30, 2019 USD ($) SecurityLoan	Sep. 30, 2018 USD ($) SecurityLoan
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	6,153	6,084
Pre-modification Outstanding Recorded Investment	$ 422	$ 491
Post-modification Outstanding Recorded Investment	$ 347	$ 399
Prior-Year Accruing [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	3,792	3,021
Pre-modification Outstanding Recorded Investment	$ 219	$ 195
Post-modification Outstanding Recorded Investment	$ 171	$ 152
Prior-Year Accruing [Member] | Commercial Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	8	13
Pre-modification Outstanding Recorded Investment	$ 33	$ 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	3,784	3,008
Pre-modification Outstanding Recorded Investment	$ 186	$ 158
Post-modification Outstanding Recorded Investment	$ 143	$ 120
Nonperforming [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	2,361	3,063
Pre-modification Outstanding Recorded Investment	$ 203	$ 296
Post-modification Outstanding Recorded Investment	$ 176	$ 247
Nonperforming [Member] | Commercial Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	58	41
Pre-modification Outstanding Recorded Investment	$ 129	$ 187
Post-modification Outstanding Recorded Investment	$ 109	$ 147
Nonperforming [Member] | Consumer Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	2,303	3,022
Pre-modification Outstanding Recorded Investment	$ 74	$ 109
Post-modification Outstanding Recorded Investment	$ 67	$ 100
Commercial and Industrial [Member] | Prior-Year Accruing [Member] | Commercial Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	7	11
Pre-modification Outstanding Recorded Investment	$ 33	$ 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	51	35
Pre-modification Outstanding Recorded Investment	$ 63	$ 121
Post-modification Outstanding Recorded Investment	$ 49	$ 85
Commercial Mortgage [Member] | Nonperforming [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	7	6
Pre-modification Outstanding Recorded Investment	$ 66	$ 66
Post-modification Outstanding Recorded Investment	$ 60	$ 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	7	6
Pre-modification Outstanding Recorded Investment	$ 66	$ 66
Post-modification Outstanding Recorded Investment	$ 60	$ 62
Real Estate - Residential Mortgage [Member] | Prior-Year Accruing [Member] | Consumer Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	502	491
Pre-modification Outstanding Recorded Investment	$ 38	$ 36
Post-modification Outstanding Recorded Investment	$ 32	$ 30
Real Estate - Residential Mortgage [Member] | Nonperforming [Member] | Consumer Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	162	281
Pre-modification Outstanding Recorded Investment	$ 12	$ 21
Post-modification Outstanding Recorded Investment	$ 10	$ 20
Home Equity Loans [Member] | Prior-Year Accruing [Member] | Consumer Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	1,796	1,403
Pre-modification Outstanding Recorded Investment	$ 105	$ 82
Post-modification Outstanding Recorded Investment	$ 86	$ 64
Home Equity Loans [Member] | Nonperforming [Member] | Consumer Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	704	1,142
Pre-modification Outstanding Recorded Investment	$ 42	$ 66
Post-modification Outstanding Recorded Investment	$ 41	$ 63
Consumer Direct Loans [Member] | Prior-Year Accruing [Member] | Consumer Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	143	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	137	171
Pre-modification Outstanding Recorded Investment	$ 2	$ 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	556	479
Pre-modification Outstanding Recorded Investment	$ 3	$ 3
Post-modification Outstanding Recorded Investment	$ 1	$ 1
Consumer Credit Card [Member] | Nonperforming [Member] | Consumer Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	296	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	787	556
Pre-modification Outstanding Recorded Investment	$ 35	$ 33
Post-modification Outstanding Recorded Investment	$ 21	$ 22
Consumer Indirect Loans [Member] | Nonperforming [Member] | Consumer Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	1,004	1,098
Pre-modification Outstanding Recorded Investment	$ 17	$ 18
Post-modification Outstanding Recorded Investment	$ 14	$ 14

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Business Segment Reporting - Schedule of Segment Reporting Information (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019 USD ($) employee	Sep. 30, 2018 USD ($) employee	Sep. 30, 2019 USD ($) employee	Sep. 30, 2018 USD ($) employee
SUMMARY OF OPERATIONS
Net interest income (TE)	$ 980	$ 993	$ 2,954	$ 2,932
Noninterest income	650	609	1,808	1,870
Total revenue (TE)	1,630	1,602	4,762	4,802
Provision for credit losses	200	62	336	187
Depreciation and amortization expense	98	98	283	300
Other noninterest expense	841	866	2,638	2,663
Income (loss) from continuing operations before income taxes (TE)	491	576	1,505	1,652
Allocated income taxes and TE adjustments	78	94	263	275
INCOME (LOSS) FROM CONTINUING OPERATIONS	413	482	1,242	1,377
Income (loss) from discontinued operations, net of taxes	3	0	6	5
NET INCOME (LOSS)	416	482	1,248	1,382
Less: Net income (loss) attributable to noncontrolling interests	0	0	0	0
NET INCOME (LOSS) ATTRIBUTABLE TO KEY	416	482	1,248	1,382
AVERAGE BALANCES
Loans and leases	91,956	88,467	90,805	88,018
Total assets	144,158	136,729	142,319	136,014
Deposits	110,279	105,626	109,162	104,073
OTHER FINANCIAL DATA
Net loan charge-offs	$ 197	$ 61	$ 326	$ 175
Return on average allocated equity, continuing operations	9.57%	12.57%	10.09%	12.24%
Return on average allocated equity	9.64%	12.57%	10.14%	12.28%
Average full-time equivalent employees | employee	16,898	18,150	17,217	18,354
Provision for credit loss, net of tax, related to previously disclosed fraud incident	$ 123		$ 123
Operating Segments [Member] | Consumer Bank [Member]
SUMMARY OF OPERATIONS
Net interest income (TE)	595	$ 583	1,780	$ 1,708
Noninterest income	238	226	683	684
Total revenue (TE)	833	809	2,463	2,392
Provision for credit losses	48	32	133	104
Depreciation and amortization expense	27	25	75	78
Other noninterest expense	504	532	1,548	1,613
Income (loss) from continuing operations before income taxes (TE)	254	220	707	597
Allocated income taxes and TE adjustments	60	52	168	142
INCOME (LOSS) FROM CONTINUING OPERATIONS	194	168	539	455
Income (loss) from discontinued operations, net of taxes	0	0	0	0
NET INCOME (LOSS)	194	168	539	455
Less: Net income (loss) attributable to noncontrolling interests	0	0	0	0
NET INCOME (LOSS) ATTRIBUTABLE TO KEY	194	168	539	455
AVERAGE BALANCES
Loans and leases	32,760	31,172	31,993	31,329
Total assets	36,417	34,368	35,546	34,547
Deposits	72,995	69,124	72,202	68,281
OTHER FINANCIAL DATA
Net loan charge-offs	$ 40	$ 36	$ 114	$ 109
Return on average allocated equity, continuing operations	22.82%	20.38%	21.96%	18.49%
Return on average allocated equity	22.82%	20.38%	21.96%	18.49%
Average full-time equivalent employees | employee	9,182	9,979	9,413	10,047
Operating Segments [Member] | Commercial Bank [Member]
SUMMARY OF OPERATIONS
Net interest income (TE)	$ 399	$ 415	$ 1,206	$ 1,240
Noninterest income	380	338	1,035	974
Total revenue (TE)	779	753	2,241	2,214
Provision for credit losses	32	31	80	85
Depreciation and amortization expense	35	35	100	103
Other noninterest expense	337	350	1,036	1,065
Income (loss) from continuing operations before income taxes (TE)	375	337	1,025	961
Allocated income taxes and TE adjustments	71	63	193	156
INCOME (LOSS) FROM CONTINUING OPERATIONS	304	274	832	805
Income (loss) from discontinued operations, net of taxes	0	0	0	0
NET INCOME (LOSS)	304	274	832	805
Less: Net income (loss) attributable to noncontrolling interests	0	0	0	0
NET INCOME (LOSS) ATTRIBUTABLE TO KEY	304	274	832	805
AVERAGE BALANCES
Loans and leases	58,215	56,096	57,803	55,472
Total assets	66,549	63,488	65,781	63,038
Deposits	36,204	33,603	35,534	33,191
OTHER FINANCIAL DATA
Net loan charge-offs	$ 35	$ 26	$ 88	$ 66
Return on average allocated equity, continuing operations	26.37%	24.46%	24.41%	24.36%
Return on average allocated equity	26.37%	24.46%	24.41%	24.36%
Average full-time equivalent employees | employee	2,226	2,473	2,285	2,469
Other [Member]
SUMMARY OF OPERATIONS
Net interest income (TE)	$ (14)	$ (5)	$ (32)	$ (16)
Noninterest income	32	45	90	212
Total revenue (TE)	18	40	58	196
Provision for credit losses	120	(1)	123	(2)
Depreciation and amortization expense	36	38	108	119
Other noninterest expense	0	(16)	54	(15)
Income (loss) from continuing operations before income taxes (TE)	(138)	19	(227)	94
Allocated income taxes and TE adjustments	(53)	(21)	(98)	(23)
INCOME (LOSS) FROM CONTINUING OPERATIONS	(85)	40	(129)	117
Income (loss) from discontinued operations, net of taxes	3	0	6	5
NET INCOME (LOSS)	(82)	40	(123)	122
Less: Net income (loss) attributable to noncontrolling interests	0	0	0	0
NET INCOME (LOSS) ATTRIBUTABLE TO KEY	(82)	40	(123)	122
AVERAGE BALANCES
Loans and leases	981	1,199	1,009	1,217
Total assets	41,192	38,873	40,992	38,429
Deposits	1,080	2,899	1,426	2,601
OTHER FINANCIAL DATA
Net loan charge-offs	$ 122	$ (1)	$ 124	$ 0
Return on average allocated equity, continuing operations	(3.68%)	2.12%	(2.00%)	2.13%
Return on average allocated equity	(3.55%)	2.12%	(1.91%)	2.22%
Average full-time equivalent employees | employee	5,490	5,698	5,519	5,838
Provision for credit loss, net of tax, related to previously disclosed fraud incident	$ 94		$ 94

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Leases - Components of Equipment Leasing Income (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Sales-type and direct financing leases
Interest income on lease receivable	$ 31	$ 92
Interest income related to accretion of unguaranteed residual asset	3	9
Interest income on deferred fees and costs	0	0
Total sales-type and direct financing lease income	34	101
Operating leases
Operating lease income related to lease payments	34	100
Other operating leasing gains	8	23
Total operating lease income and other leasing gains	42	123
Total lease income	$ 76	$ 224

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Asset Quality - Changes in Outstanding Unpaid Principal Balance, Carrying Amount, and Accretable Yield for PCI Loans (Details) - PCI Loans [Member] - USD ($) $ in Millions	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Dec. 31, 2018	Jun. 30, 2019	Dec. 31, 2017
Accretable Yield
Balance at beginning of period	$ 101	$ 117	$ 131
Accretion	(9)	(28)	(42)
Net reclassifications from nonaccretable to accretable	10	18	50
Payments received, net	(2)	(7)	(21)
Loans charged off			(1)
Balance at end of period	100	100	117
Carrying Amount	492	492	571	$ 513	$ 738
Outstanding Unpaid Principal Balance	$ 518	$ 518	$ 607	$ 541	$ 803

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Fair Value Measurements - Change in Fair Values of Level 3 Financial Instruments (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 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	$ 11	$ 20	$ 20	$ 20
Gains (Losses) Included in Other Comprehensive Income	0	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	0	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	7	7	7	3
Gains (Losses) Included in Other Comprehensive Income	0	0	0	0
Gains (Losses) Included in Earnings	0	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	13	1	13
Gains (Losses) Included in Other Comprehensive Income	0	0	0	0
Gains (Losses) Included in Earnings	0	(1)	0	(1)
Purchases	0	0	0	1
Sales	0	0	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	12	1	12
Unrealized Gains (Losses) Included in Earnings	0	(1)	0	1
Interest Rate [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning of Period Balance	4	5	5	9
Gains (Losses) Included in Other Comprehensive Income	0	0	0	0
Gains (Losses) Included in Earnings	1	0	4	(2)
Purchases	0	0	0	1
Sales	0	0	0	(2)
Settlements	0	0	0	0
Transfers Other	0	0	0	0
Transfers into Level 3	0	2	2	6
Transfers out of Level 3	(2)	(1)	(8)	(6)
End of Period Balance	3	6	3	6
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)	(9)	0	1
Gains (Losses) Included in Other Comprehensive Income	0	0	0	0
Gains (Losses) Included in Earnings	(5)	(6)	(5)	(26)
Purchases	0	0	(1)	0
Sales	1	0	1	0
Settlements	0	15	0	25
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	(5)	0	(5)	0
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	6	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	0	(1)	3	(1)
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
End of Period Balance	6	2	6	2
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	0	0	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	0	0	(1)	(1)
Settlements	0	0	0	0
Transfers Other	1	0	2	0
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
End of Period Balance	1	0	1	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	3	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	0	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

Variable Interest Entities - Additional Information (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Variable Interest Entity [Line Items]
Investments in operating partnerships	$ 274,000,000		$ 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	90,000,000		115,000,000
LIHTC Investments [Member]
Variable Interest Entity [Line Items]
Investments in operating partnerships	6,385,000,000		5,932,000,000
Liabilities related to investments in qualified affordable housing projects	2,603,000,000		2,569,000,000
Tax credit of investment	122,000,000
LIHTC Investments [Member] | Qualified affordable housing projects investment [Member]
Variable Interest Entity [Line Items]
Liabilities related to investments in qualified affordable housing projects	505,000,000		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	137,000,000	$ 126,000,000
Tax credit of investment	135,000,000
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	$ 73,000,000		$ 96,000,000

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Business Segment Reporting (Tables)

9 Months Ended

Sep. 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 nine-month periods ended September 30, 2019, and September 30, 2018.

Three months ended September 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)	$	595		$	583		$	399		$	415		$	(14	)		$	(5	)	$	980		$	993
Noninterest income	238			226			380			338			32				45			650			609
Total revenue (TE) (a)	833			809			779			753			18				40			1,630			1,602
Provision for credit losses	48			32			32			31			120				(1		)	200			62
Depreciation and amortization expense	27			25			35			35			36				38			98			98
Other noninterest expense	504			532			337			350			—				(16		)	841			866
Income (loss) from continuing operations before income taxes (TE)	254			220			375			337			(138		)		19			491			576
Allocated income taxes and TE adjustments	60			52			71			63			(53		)		(21		)	78			94
Income (loss) from continuing operations	194			168			304			274			(85		)		40			413			482
Income (loss) from discontinued operations, net of taxes	—			—			—			—			3				—			3			—
Net income (loss)	194			168			304			274			(82		)		40			416			482
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—			—				—			—			—
Net income (loss) attributable to Key	$	194		$	168		$	304		$	274		$	(82	)	(d)	$	40		$	416		$	482
AVERAGE BALANCES (b)
Loans and leases	$	32,760		$	31,172		$	58,215		$	56,096		$	981			$	1,199		$	91,956		$	88,467
Total assets (a)	36,417			34,368			66,549			63,488			41,192				38,873			144,158			136,729
Deposits	72,995			69,124			36,204			33,603			1,080				2,899			110,279			105,626
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	40		$	36		$	35		$	26		122				(1		)	$	197		$	61
Return on average allocated equity (b)	22.82		%	20.38		%	26.37		%	24.46		%	(3.68		)%		2.12		%	9.57		%	12.57		%
Return on average allocated equity	22.82			20.38			26.37			24.46			(3.55		)		2.12			9.64			12.57
Average full-time equivalent employees (c)	9,182			9,979			2,226			2,473			5,490				5,698			16,898			18,150

(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.

(d) Other segments included $94 million provision for credit loss, net of tax, related to a previously disclosed fraud incident.

Nine months ended September 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)	$	1,780		$	1,708		$	1,206		$	1,240		$	(32	)		$	(16	)	$	2,954		$	2,932
Noninterest income	683			684			1,035			974			90				212			1,808			1,870
Total revenue (TE) (a)	2,463			2,392			2,241			2,214			58				196			4,762			4,802
Provision for credit losses	133			104			80			85			123				(2		)	336			187
Depreciation and amortization expense	75			78			100			103			108				119			283			300
Other noninterest expense	1,548			1,613			1,036			1,065			54				(15		)	2,638			2,663
Income (loss) from continuing operations before income taxes (TE)	707			597			1,025			961			(227		)		94			1,505			1,652
Allocated income taxes and TE adjustments	168			142			193			156			(98		)		(23		)	263			275
Income (loss) from continuing operations	539			455			832			805			(129		)		117			1,242			1,377
Income (loss) from discontinued operations, net of taxes	—			—			—			—			6				5			6			5
Net income (loss)	539			455			832			805			(123		)		122			1,248			1,382
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—			—				—			—			—
Net income (loss) attributable to Key	$	539		$	455		$	832		$	805		$	(123	)	(d)	$	122		$	1,248		$	1,382
AVERAGE BALANCES (b)
Loans and leases	$	31,993		$	31,329		$	57,803		$	55,472		$	1,009			$	1,217		$	90,805		$	88,018
Total assets (a)	35,546			34,547			65,781			63,038			40,992				38,429			142,319			136,014
Deposits	72,202			68,281			35,534			33,191			1,426				2,601			109,162			104,073
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	114		$	109		$	88		$	66		124				—			$	326		$	175
Return on average allocated equity (b)	21.96		%	18.49		%	24.41		%	24.36		%	(2.00		)%		2.13		%	10.09		%	12.24		%
Return on average allocated equity	21.96			18.49			24.41			24.36			(1.91		)		2.22			10.14			12.28
Average full-time equivalent employees (c)	9,413			10,047			2,285			2,469			5,519				5,838			17,217			18,354

(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.

(d)

Other segments included $94 million provision for credit loss, net of tax, related to a previously disclosed fraud incident.

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Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 416	$ 482	$ 1,248	$ 1,382
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on securities available for sale, net of income taxes of ($29), ($22), ($176), and ($89)	93	(72)	568	(288)
Net unrealized gains (losses) on derivative financial instruments, net of income taxes of ($21), ($5), ($120) and ($29)	68	(12)	386	(92)
Foreign currency translation adjustments, net of income taxes of $0, $0, ($1) and $3	0	1	4	(15)
Net pension and postretirement benefit costs, net of income taxes of $0, $1, ($6) and $3	0	2	19	8
Total other comprehensive income (loss), net of tax	161	(81)	977	(387)
Comprehensive income (loss)	577	401	2,225	995
Less: Comprehensive income attributable to noncontrolling interests	0	0	0	0
Comprehensive income (loss) attributable to Key	$ 577	$ 401	$ 2,225	$ 995

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Trust Preferred Securities Issued by Unconsolidated Subsidiaries (Tables)

9 Months Ended

Sep. 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
September 30, 2019
KeyCorp Capital I	$	156	$	6	$	162	3.059	%	2028
KeyCorp Capital II	108		4		112		6.875		2029
KeyCorp Capital III	142		4		146		7.750		2029
HNC Statutory Trust III	19		1		20		3.548		2035
Willow Grove Statutory Trust I	18		1		19		3.429		2036
HNC Statutory Trust IV	16		1		17		3.546		2037
Westbank Capital Trust II	7		—		7		4.346		2034
Westbank Capital Trust III	7		—		7		4.346		2034
Total	$	473	$	17	$	490	5.427	%	—
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 $64 million at September 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 $64 million at September 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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Leases (Tables)

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Components of Lease Expense

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

	September 30, 2019
Weighted-average remaining lease term:
Operating leases	7.6
Finance leases	6.28
Weighted-average discount rate:
Operating leases	3.27	%
Finance leases	3.94	%

The components of lease expense are summarized as follows:

in millions	Three months ended September 30, 2019		Nine months ended September 30, 2019
Operating lease cost	$	34	$	102
Finance lease cost:
Amortization of right-of-use assets	1		2
Variable lease cost	8		19
Total lease cost (a), (b)	$	43	$	123

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

(b)

Short-term lease cost was less than less than $1 million for the three and nine months ended September 30, 2019.

Summary of Cash Flows Related to Leases

Cash flows related to leases are summarized as follows:

in millions	Three months ended September 30, 2019		Nine months ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities: (a)
Operating cash flows from operating leases	$	37	$	110
Financing cash flows from finance leases	—		1
Right-of-use assets obtained in exchange for lease obligations: (b)
Operating leases	$	17	$	61
Net gain recognized from sale leaseback transaction (c)	$	14	$	14

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

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

(c)

During the third quarter of 2019, we entered into a sale leaseback transaction related to one branch which resulted in total proceeds of $16 million.

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	September 30, 2019
Operating lease assets	Accrued income and other assets	$	675
Operating lease liabilities	Accrued expense and other liabilities	758
Finance leases:
Property and equipment, gross	Premises and equipment	28
Accumulated depreciation	Premises and equipment	(17		)
Property and equipment, net		11
Finance lease liabilities	Long-term debt	14

Finance Lease, Maturities of Lease Liabilities

Maturities of lease liabilities are summarized as follows:

in millions	Operating Leases		Finance Leases		Total
2019	$	36	$	1	$	37
2020	143		3		146
2021	130		3		133
2022	115		2		117
2023	99		2		101
Thereafter	341		5		346
Total lease payments	864		16		880
Less imputed interest	106		2		108
Total	$	758	$	14	$	772

Lessee, Operating Lease, Maturities of Lease Liabilities

Maturities of lease liabilities are summarized as follows:

in millions	Operating Leases		Finance Leases		Total
2019	$	36	$	1	$	37
2020	143		3		146
2021	130		3		133
2022	115		2		117
2023	99		2		101
Thereafter	341		5		346
Total lease payments	864		16		880
Less imputed interest	106		2		108
Total	$	758	$	14	$	772

Operating Lease, Lease Income

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

in millions	Three months ended September 30, 2019		Nine months ended September 30, 2019
Sales-type and direct financing leases
Interest income on lease receivable	$	31	$	92
Interest income related to accretion of unguaranteed residual asset	3		9
Interest income on deferred fees and costs	—		—
Total sales-type and direct financing lease income	34		101
Operating leases
Operating lease income related to lease payments	34		100
Other operating leasing gains	8		23
Total operating lease income and other leasing gains	42		123
Total lease income	$	76	$	224

Sales-type Lease, Lease Income

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

in millions	Three months ended September 30, 2019		Nine months ended September 30, 2019
Sales-type and direct financing leases
Interest income on lease receivable	$	31	$	92
Interest income related to accretion of unguaranteed residual asset	3		9
Interest income on deferred fees and costs	—		—
Total sales-type and direct financing lease income	34		101
Operating leases
Operating lease income related to lease payments	34		100
Other operating leasing gains	8		23
Total operating lease income and other leasing gains	42		123
Total lease income	$	76	$	224

Direct Financing Lease, Lease Income

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

in millions	Three months ended September 30, 2019		Nine months ended September 30, 2019
Sales-type and direct financing leases
Interest income on lease receivable	$	31	$	92
Interest income related to accretion of unguaranteed residual asset	3		9
Interest income on deferred fees and costs	—		—
Total sales-type and direct financing lease income	34		101
Operating leases
Operating lease income related to lease payments	34		100
Other operating leasing gains	8		23
Total operating lease income and other leasing gains	42		123
Total lease income	$	76	$	224

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	September 30, 2019
Lease receivables	$	3,632
Unearned income	(339		)
Unguaranteed residual value	450
Deferred fees and costs	14
Net investment in sales-type and direct financing leases	$	3,757

Minimum Future Lease Payments to be Received for Sales-Type and Direct Financing Leases

At September 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	$	307
2020	1,077
2021	802
2022	557
2023	360
Thereafter	624
Total lease payments	$	3,727

Minimum Future Lease Payments to be Received for Operating Leases

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

in millions	Operating lease payments
2019	$	33
2020	126
2021	109
2022	92
2023	77
Thereafter	222
Total lease payments	$	659

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Consolidated Balance Sheets - USD ($) $ in Millions		Sep. 30, 2019	Dec. 31, 2018
ASSETS
Cash and due from banks		$ 636	$ 678
Short-term investments		3,351	2,562
Trading account assets		963	849
Securities available for sale		22,378	19,428
Held-to-maturity securities (fair value: $10,606 and $11,122)		10,490	11,519
Other investments		620	666
Loans, net of unearned income of $630 and $678		92,760	89,552
Less: Allowance for loan and lease losses		(893)	(883)
Net loans		91,867	88,669
Loans held for sale	[1]	1,598	1,227
Premises and equipment		815	882
Goodwill		2,664	2,516
Other intangible assets		272	316
Corporate-owned life insurance		4,216	4,171
Accrued income and other assets		5,881	5,030
Discontinued assets		940	1,100
Total assets		146,691	139,613
Deposits in domestic offices:
NOW and money market deposit accounts		65,604	59,918
Savings deposits		4,668	4,854
Certificates of deposit ($100,000 or more)		7,194	7,913
Other time deposits		5,300	5,332
Total interest-bearing deposits		82,766	78,017
Noninterest-bearing deposits		28,883	29,292
Total deposits		111,649	107,309
Federal funds purchased and securities sold under repurchase agreements		182	319
Bank notes and other short-term borrowings		700	544
Accrued expense and other liabilities		2,574	2,113
Long-term debt		14,470	13,732
Total liabilities		129,575	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		6,287	6,331
Retained earnings		12,209	11,556
Treasury stock, at cost (268,164,104 and 237,198,944 shares)		(4,696)	(4,181)
Accumulated other comprehensive income (loss)		159	(818)
Key shareholders’ equity		17,116	15,595
Noncontrolling interests		0	1
Total equity		17,116	15,596
Total liabilities and equity		$ 146,691	$ 139,613

[1] Total loans held for sale include real estate — residential mortgage loans held for sale at fair value of $101 million at September 30, 2019, and $54 million at December 31, 2018.

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Income Taxes

9 Months Ended

Sep. 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 14.5% for the third quarter of 2019 and 15.5% for the third 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 September 30, 2019, we had a net deferred tax liability of $162 million, compared to a net deferred tax asset of $222 million at December 31, 2018, which are both included in “accrued income and other assets” on the balance sheet.

To determine the amount of deferred tax assets that are more likely than not to be realized, and therefore recorded, we conduct a quarterly assessment of all available evidence. This evidence includes, but is not limited to, taxable income in prior periods, projected future taxable income, and projected future reversals of deferred tax items. These

assessments involve a degree of subjectivity and may undergo change. Based on these criteria, we had a valuation allowance of $11 million at September 30, 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 September 30, 2019, Key’s unrecognized tax benefits were $32 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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Trust Preferred Securities Issued by Unconsolidated Subsidiaries

9 Months Ended

Sep. 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
September 30, 2019
KeyCorp Capital I	$	156	$	6	$	162	3.059	%	2028
KeyCorp Capital II	108		4		112		6.875		2029
KeyCorp Capital III	142		4		146		7.750		2029
HNC Statutory Trust III	19		1		20		3.548		2035
Willow Grove Statutory Trust I	18		1		19		3.429		2036
HNC Statutory Trust IV	16		1		17		3.546		2037
Westbank Capital Trust II	7		—		7		4.346		2034
Westbank Capital Trust III	7		—		7		4.346		2034
Total	$	473	$	17	$	490	5.427	%	—
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 $64 million at September 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 $64 million at September 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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Business Segment Reporting

9 Months Ended

Sep. 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 September 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 nine-month periods ended September 30, 2019, and September 30, 2018.

Three months ended September 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)	$	595		$	583		$	399		$	415		$	(14	)		$	(5	)	$	980		$	993
Noninterest income	238			226			380			338			32				45			650			609
Total revenue (TE) (a)	833			809			779			753			18				40			1,630			1,602
Provision for credit losses	48			32			32			31			120				(1		)	200			62
Depreciation and amortization expense	27			25			35			35			36				38			98			98
Other noninterest expense	504			532			337			350			—				(16		)	841			866
Income (loss) from continuing operations before income taxes (TE)	254			220			375			337			(138		)		19			491			576
Allocated income taxes and TE adjustments	60			52			71			63			(53		)		(21		)	78			94
Income (loss) from continuing operations	194			168			304			274			(85		)		40			413			482
Income (loss) from discontinued operations, net of taxes	—			—			—			—			3				—			3			—
Net income (loss)	194			168			304			274			(82		)		40			416			482
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—			—				—			—			—
Net income (loss) attributable to Key	$	194		$	168		$	304		$	274		$	(82	)	(d)	$	40		$	416		$	482
AVERAGE BALANCES (b)
Loans and leases	$	32,760		$	31,172		$	58,215		$	56,096		$	981			$	1,199		$	91,956		$	88,467
Total assets (a)	36,417			34,368			66,549			63,488			41,192				38,873			144,158			136,729
Deposits	72,995			69,124			36,204			33,603			1,080				2,899			110,279			105,626
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	40		$	36		$	35		$	26		122				(1		)	$	197		$	61
Return on average allocated equity (b)	22.82		%	20.38		%	26.37		%	24.46		%	(3.68		)%		2.12		%	9.57		%	12.57		%
Return on average allocated equity	22.82			20.38			26.37			24.46			(3.55		)		2.12			9.64			12.57
Average full-time equivalent employees (c)	9,182			9,979			2,226			2,473			5,490				5,698			16,898			18,150

(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.

(d) Other segments included $94 million provision for credit loss, net of tax, related to a previously disclosed fraud incident.

Nine months ended September 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)	$	1,780		$	1,708		$	1,206		$	1,240		$	(32	)		$	(16	)	$	2,954		$	2,932
Noninterest income	683			684			1,035			974			90				212			1,808			1,870
Total revenue (TE) (a)	2,463			2,392			2,241			2,214			58				196			4,762			4,802
Provision for credit losses	133			104			80			85			123				(2		)	336			187
Depreciation and amortization expense	75			78			100			103			108				119			283			300
Other noninterest expense	1,548			1,613			1,036			1,065			54				(15		)	2,638			2,663
Income (loss) from continuing operations before income taxes (TE)	707			597			1,025			961			(227		)		94			1,505			1,652
Allocated income taxes and TE adjustments	168			142			193			156			(98		)		(23		)	263			275
Income (loss) from continuing operations	539			455			832			805			(129		)		117			1,242			1,377
Income (loss) from discontinued operations, net of taxes	—			—			—			—			6				5			6			5
Net income (loss)	539			455			832			805			(123		)		122			1,248			1,382
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—			—				—			—			—
Net income (loss) attributable to Key	$	539		$	455		$	832		$	805		$	(123	)	(d)	$	122		$	1,248		$	1,382
AVERAGE BALANCES (b)
Loans and leases	$	31,993		$	31,329		$	57,803		$	55,472		$	1,009			$	1,217		$	90,805		$	88,018
Total assets (a)	35,546			34,547			65,781			63,038			40,992				38,429			142,319			136,014
Deposits	72,202			68,281			35,534			33,191			1,426				2,601			109,162			104,073
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	114		$	109		$	88		$	66		124				—			$	326		$	175
Return on average allocated equity (b)	21.96		%	18.49		%	24.41		%	24.36		%	(2.00		)%		2.13		%	10.09		%	12.24		%
Return on average allocated equity	21.96			18.49			24.41			24.36			(1.91		)		2.22			10.14			12.28
Average full-time equivalent employees (c)	9,413			10,047			2,285			2,469			5,519				5,838			17,217			18,354

(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.

(d)

Other segments included $94 million provision for credit loss, net of tax, related to a previously disclosed fraud incident.

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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.

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Leases - Summary of Maturities of Lease Liabilities (Details) $ in Millions	Sep. 30, 2019 USD ($)
Operating Leases
2019	$ 36
2020	143
2021	130
2022	115
2023	99
Thereafter	341
Total lease payments	864
Less imputed interest	106
Total	758
Finance Leases
2019	1
2020	3
2021	3
2022	2
2023	2
Thereafter	5
Total lease payments	16
Less imputed interest	2
Total	14
2019	37
2020	146
2021	133
2022	117
2023	101
Thereafter	346
Total lease payments	880
Less imputed interest	108
Total	$ 772

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Asset Quality - Changes in Liability for Credit Losses on Lending Related Commitments (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at beginning of period	$ 64	$ 58	$ 64	$ 57
Provision (credit) for losses on lending-related commitments	1	2	1	3
Balance at end of period	$ 65	$ 60	$ 65	$ 60

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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		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair Value	$ 74		$ 74
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	73		73
Unfunded Commitments	24		24
Funded Commitments	0	0	2	1
Funded Other	$ 0	$ 0	$ 0	$ 0

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Leases - Minimum Future Lease Payments to be Received for Operating Leases (Details) $ in Millions	Sep. 30, 2019 USD ($)
Leases [Abstract]
2019	$ 33
2020	126
2021	109
2022	92
2023	77
Thereafter	222
Total lease payments	$ 659

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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	Sep. 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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Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
Income taxes effect on net unrealized (losses) gains on securities available for sale	$ (29)	$ (22)	$ (176)	$ (89)
Income taxes effect on net unrealized gains (losses) on derivative financial instruments	(21)	(5)	(120)	(29)
Income taxes effect on foreign currency translation adjustments	0	0	(1)	3
Income taxes effect on net pension and postretirement benefit costs	$ 0	$ 1	$ (6)	$ 3

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Contingent Liabilities and Guarantees (Tables)

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Guarantees

The following table shows the types of guarantees that we had outstanding at September 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.

September 30, 2019	Maximum Potential Undiscounted Future Payments		Liability Recorded
in millions
Financial guarantees:
Standby letters of credit	$	3,210	$	71
Recourse agreement with FNMA	4,614		6
Residential mortgage reserve	1,709		6
Written put options (a)	2,533		47
Total	$	12,066	$	130

(a)

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

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Variable Interest Entities (Tables)

9 Months Ended

Sep. 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 September 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
September 30, 2019
LIHTC investments	$	6,385	$	2,603	$	1,793
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 September 30, 2019, and December 31, 2018.

	Unconsolidated VIEs
in millions	Total Assets		Total Liabilities		Maximum Exposure to Loss
September 30, 2019
Indirect investments	$	13,731	$	288	$	97
December 31, 2018
Indirect investments	$	19,659	$	376	$	122

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Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Held-to-maturity securities, fair value	$ 10,606,000,000	$ 11,122,000,000
Unearned income on loans	630,000,000	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)	268,164,104	237,198,944
Residential Mortgage [Member]
Loans held for sale	$ 101,000,000	$ 54,000,000

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Revenue from Contracts with Customers (Tables)

9 Months Ended

Sep. 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 nine-month periods ended September 30, 2019, and September 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 September 30, 2019						Three months ended September 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	$	89	$	16	$	105	$	89	$	17	$	106
Investment banking and debt placement fees	—		78		78		—		70		70
Services charges on deposit accounts	59		27		86		57		28		85
Cards and payments income	42		27		69		40		27		67
Other noninterest income	3		—		3		6		—		6
Total revenue from contracts with customers	$	193	$	148	$	341	$	192	$	142	$	334
Other noninterest income (a)					$	277					$	230
Noninterest income from Other(b)					32						45
Total noninterest income					$	650					$	609

(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.

	Nine months ended September 30, 2019						Nine months ended September 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	$	265	$	48	$	313	$	264	$	54	$	318
Investment banking and debt placement fees	—		188		188		—		185		185
Services charges on deposit accounts	169		82		251		181		84		265
Cards and payments income	123		81		204		115		82		197
Other noninterest income	10		—		10		15		1		16
Total revenue from contracts with customers	$	567	$	399	$	966	$	575	$	406	$	981
Other noninterest income (a)					$	752					$	677
Noninterest income from Other(b)					90						212
Total noninterest income					$	1,808					$	1,870

(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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Shareholders' Equity

9 Months Ended

Sep. 30, 2019

Equity [Abstract]

Shareholders' Equity

18. Shareholders' Equity

Comprehensive Capital Plan

As previously reported and as authorized by the Board and pursuant to our 2019 capital plan (which is effective through the second quarter of 2020) submitted to and approved by the Federal Reserve, we have authority to repurchase up to $1.0 billion of our Common Shares. We completed $248 million of Common Share repurchases, including $248 million of Common Share repurchases in the open market and less than $1 million of Common Share repurchases related to employee equity compensation programs, in the third quarter of 2019 under this authorization.

Consistent with our 2019 capital plan, the Board declared a quarterly dividend of $.185 per Common Share for the third quarter of 2019.

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		Third 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		.531250

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Variable Interest Entities

9 Months Ended

Sep. 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 September 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 September 30, 2019, and December 31, 2018, we had liabilities of $505 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 September 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
September 30, 2019
LIHTC investments	$	6,385	$	2,603	$	1,793
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 nine months of 2019, we recognized $137 million of amortization and $135 million of tax credits associated with these investments within “income taxes” on our income statement. During the first nine months of 2018, we recognized $126 million of amortization and $122 million of tax credits associated with these investments within “income taxes” on our income statement.

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 $73 million and $96 million at September 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 September 30, 2019, and December 31, 2018.

	Unconsolidated VIEs
in millions	Total Assets		Total Liabilities		Maximum Exposure to Loss
September 30, 2019
Indirect investments	$	13,731	$	288	$	97
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 September 30, 2019, and December 31, 2018, that can be used to settle the entities’ obligations. The entities had no liabilities at September 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 $274 million at September 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 September 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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Employee Benefits

9 Months Ended

Sep. 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 September 30,						Nine months ended September 30,
in millions	2019			2018			2019			2018
Interest cost on PBO	$	11		$	10		$	34		$	30
Expected return on plan assets	(12		)	(13		)	(36		)	(39		)
Amortization of losses	4			4			11			12
Net pension cost	$	3		$	1		$	9		$	3

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Asset Quality (Tables)

9 Months Ended

Sep. 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	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,
RATING	2019		2018		2019		2018		2019		2018		2019		2018		2019		2018
Pass	$	46,604	$	44,138	$	12,608	$	13,672	$	1,447	$	1,537	$	4,431	$	4,557	$	65,090	$	63,904
Criticized (Accruing)	1,470		1,402		319		354		30		125		32		41		1,851		1,922
Criticized (Nonaccruing)	238		152		93		81		2		2		7		8		340		243
Total	$	48,312	$	45,692	$	13,020	$	14,107	$	1,479	$	1,664	$	4,470	$	4,606	$	67,281	$	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	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,
FICO SCORE	2019		2018		2019		2018		2019		2018		2019		2018		2019		2018
750 and above	$	10,343	$	9,794	$	1,116	$	549	$	503	$	521	$	2,075	$	1,647	$	14,037	$	12,511
660 to 749	4,736		4,906		912		700		481		507		1,566		1,320		7,695		7,433
Less than 660	1,315		1,411		210		224		121		116		578		565		2,224		2,316
No Score	293		213		548		333		—		—		185		102		1,026		648
Total	$	16,687	$	16,324	$	2,786	$	1,806	$	1,105	$	1,144	$	4,404	$	3,634	$	24,982	$	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	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,	December 31,	September 30,		December 31,
RATING	2019		2018		2019		2018		2019		2018		2019	2018	2019		2018
Pass	$	30	$	37	$	112	$	125	$	1	$	2	—	—	$	143	$	164
Criticized	20		24		35		53		—		—		—	—	55		77
Total	$	50	$	61	$	147	$	178	$	1	$	2	—	—	$	198	$	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	September 30,		December 31,		September 30,		December 31,		September 30,	December 31,	September 30,	December 31,	September 30,		December 31,
FICO SCORE	2019		2018		2019		2018		2019	2018	2019	2018	2019		2018
750 and above	$	113	$	137	1		—		—	—	—	—	$	114	$	137
660 to 749	94		95		$	1	$	1	—	—	—	—	95		96
Less than 660	83		97		1		2		—	—	—	—	84		99
No Score	6		2		—		—		—	—	—	—	6		2
Total	$	296	$	331	$	3	$	3	—	—	—	—	$	299	$	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 September 30, 2019, and December 31, 2018, provides further information regarding Key’s credit exposure.

Aging Analysis of Loan Portfolio^(a) 

September 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)
in millions
LOAN TYPE
Commercial and industrial	$	47,888	$	101	$	71	$	14	$	238	$	424	$	50	$	48,362
Commercial real estate:
Commercial mortgage	12,881		26		11		10		92		139		147		13,167
Construction	1,467		7		2		1		2		12		1		1,480
Total commercial real estate loans	14,348		33		13		11		94		151		148		14,647
Commercial lease financing	4,435		18		8		2		7		35		—		4,470
Total commercial loans	$	66,671	$	152	$	92	$	27	$	339	$	610	$	198	$	67,479
Real estate — residential mortgage	$	6,185	$	12	$	5	$	1	$	42	$	60	$	282	$	6,527
Home equity loans	10,217		31		9		6		179		225		14		10,456
Consumer direct loans	2,762		9		5		7		3		24		3		2,789
Credit cards	1,079		7		6		11		2		26		—		1,105
Consumer indirect loans	4,344		31		7		2		20		60		—		4,404
Total consumer loans	$	24,587	$	90	$	32	$	27	$	246	$	395	$	299	$	25,281
Total loans	$	91,258	$	242	$	124	$	54	$	585	$	1,005	$	497	$	92,760

(a) Amounts in table represent recorded investment and exclude loans held for sale. Recorded investment represents the principal amount of the loan increased or decreased by net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs.

(b) Past due loan amounts exclude PCI, even if contractually past due (or if we do not expect to collect principal or interest in full based on the original contractual terms), as we are currently accreting income over the remaining term of the loans.

(c) 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)
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 principal amount of the loan increased or decreased by net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs.

(b) Past due loan amounts exclude PCI, even if contractually past due (or if we do not expect to collect principal or interest in full based on the original contractual terms), as we are currently accreting income over the remaining term of the loans.

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

Breakdown of Individually Impaired Loans

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

	September 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	$	199	$	257	—		$	118	$	175	—
Commercial real estate:
Commercial mortgage	71		82		—		64		70		—
Total commercial real estate loans	71		82		—		64		70		—
Total commercial loans	270		339		—		182		245		—
Real estate — residential mortgage	3		3		—		4		5		—
Home equity loans	46		53		—		49		56		—
Consumer direct loans	—		1		—		1		1		—
Consumer indirect loans	2		4		—		2		4		—
Total consumer loans	51		61		—		56		66		—
Total loans with no related allowance recorded	321		400		—		238		311		—
With an allowance recorded:
Commercial and industrial	35		48		$	15	44		47		$	5
Commercial real estate:
Commercial mortgage	2		2		—		2		3		1
Total commercial real estate loans	2		2		—		2		3		1
Total commercial loans	37		50		15		46		50		6
Real estate — residential mortgage	40		61		4		45		70		3
Home equity loans	80		87		9		78		85		8
Consumer direct loans	4		4		—		3		3		—
Credit cards	3		3		—		3		3		—
Consumer indirect loans	32		33		3		34		34		2
Total consumer loans	159		188		16		163		195		13
Total loans with an allowance recorded	196		238		31		209		245		19
Total	$	517	$	638	$	31	$	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 September 30,				Nine Months Ended September 30,
in millions	2019		2018		2019		2018
Commercial and industrial	$	209	$	209	$	198	$	184
Commercial real estate:
Commercial mortgage	69		48		69		44
Total commercial real estate loans	69		48		69		44
Total commercial loans	278		257		267		228
Real estate — residential mortgage	45		49		46		49
Home equity loans	127		126		127		122
Consumer direct loans	4		4		4		4
Credit cards	3		3		3		3
Consumer indirect loans	35		35		35		34
Total consumer loans	214		217		215		212
Total	$	492	$	474	$	482	$	440

(a)

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

Post-Modification Outstanding Recorded Investment by Concession Type for Our Commercial Accruing and Nonaccruing TDRs

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

	Three Months Ended September 30,				Nine Months Ended September 30,
in millions	2019		2018		2019		2018
Commercial loans:
Extension of Maturity Date	6		$	20	$	11	$	20
Payment or Covenant Modification/Deferment	—		26		1		46
Bankruptcy Plan Modification	—		—		—		7
Increase in new commitment or new money	2		—		12		—
Total	8		$	46	$	24	$	73
Consumer loans:
Interest rate reduction	$	4	$	4	$	12	$	22
Other	8		10		21		29
Total	$	12	$	14	$	33	$	51
Total commercial and consumer TDRs	$	20	$	60	$	57	$	124

Summary Of Post-Modification Outstanding Recorded Investment, Accruing And Nonaccruing TDRs

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

	Three Months Ended September 30,						Nine Months Ended September 30,
in millions	2019			2018			2019			2018
Balance at beginning of the period	$	395		$	347		$	399		$	317
Additions	20			58			88			133
Payments	(65		)	(28		)	(123		)	(69		)
Charge-offs	(3		)	(11		)	(17		)	(15		)
Balance at end of period	$	347		$	366		$	347		$	366

Breakdown of Nonperforming TDRs by Loans Category

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

	September 30, 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	51	$	63	$	49	35	$	121	$	85
Commercial real estate:
Commercial mortgage	7	66		60		6	66		62
Total commercial real estate loans	7	66		60		6	66		62
Total commercial loans	58	129		109		41	187		147
Real estate — residential mortgage	162	12		10		281	21		20
Home equity loans	704	42		41		1,142	66		63
Consumer direct loans	137	2		1		171	2		1
Credit cards	296	1		1		330	2		2
Consumer indirect loans	1,004	17		14		1,098	18		14
Total consumer loans	2,303	74		67		3,022	109		100
Total nonperforming TDRs	2,361	203		176		3,063	296		247
Prior-year accruing:(a)
Commercial and industrial	7	33		28		11	37		32
Commercial real estate
Commercial mortgage	1	—		—		2	—		—
Total commercial real estate loans	1	—		—		2	—		—
Total commercial loans	8	33		28		13	37		32
Real estate — residential mortgage	502	38		32		491	36		30
Home equity loans	1,796	105		86		1,403	82		64
Consumer direct loans	143	5		3		79	4		3
Credit cards	556	3		1		479	3		1
Consumer indirect loans	787	35		21		556	33		22
Total consumer loans	3,784	186		143		3,008	158		120
Total prior-year accruing TDRs	3,792	219		171		3,021	195		152
Total TDRs	6,153	$	422	$	347	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 September 30, 2019:

in millions	June 30, 2019		Provision				Charge-offs				Recoveries		September 30, 2019
Commercial and Industrial	$	549	$	175			$	(176	)		$	6	$	554
Commercial real estate:
Real estate — commercial mortgage	139		(5		)		—				—		134
Real estate — construction	24		(1		)		—				—		23
Total commercial real estate loans	163		(6		)		—				—		157
Commercial lease financing	35		—				(1		)		1		35
Total commercial loans	747		169				(177		)		7		746
Real estate — residential mortgage	7		1				(1		)		—		7
Home equity loans	36		1				(6		)		2		33
Consumer direct loans	32		10				(10		)		2		34
Credit cards	44		11				(11		)		2		46
Consumer indirect loans	24		7				(8		)		4		27
Total consumer loans	143		30				(36		)		10		147
Total ALLL — continuing operations	890		199			(a), (b)	(213		)	(b)	17		893
Discontinued operations	12		(1		)		(1		)		1		11
Total ALLL — including discontinued operations	$	902	$	198			$	(214	)		$	18	$	904

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

(b) Includes the realization of a $123 million loss related to a previously disclosed fraud incident.

Three months ended September 30, 2018:

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

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

Nine months ended September 30, 2019:

in millions	December 31, 2018		Provision				Charge-offs				Recoveries		September 30, 2019
Commercial and Industrial	532		$	242			$	(242	)		$	22	$	554
Commercial real estate:
Real estate — commercial mortgage	142		(4		)		(6		)		2		134
Real estate — construction	33		(6		)		(4		)		—		23
Total commercial real estate loans	175		(10		)		(10		)		2		157
Commercial lease financing	36		20				(25		)		4		35
Total commercial loans	743		252				(277		)		28		746
Real estate — residential mortgage	7		2				(3		)		1		7
Home equity loans	35		8				(16		)		6		33
Consumer direct loans	30		29				(30		)		5		34
Credit cards	48		26				(34		)		6		46
Consumer indirect loans	20		18				(24		)		13		27
Total consumer loans	140		83				(107		)		31		147
Total ALLL — continuing operations	883		335			(a), (b)	(384		)	(b)	59		893
Discontinued operations	14		3				(9		)		3		11
Total ALLL — including discontinued operations	$	897	$	338			$	(393	)		$	62	$	904

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

(b) Includes the realization of a $123 million loss related to a previously disclosed fraud incident.

Nine months ended September 30, 2018:

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

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

Allowance for Loan and Lease Losses and Corresponding Loan Balances

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

	Three months ended September 30,				Nine months ended September 30,
in millions	2019		2018		2019		2018
Balance at beginning of period	$	64	$	58	$	64	$	57
Provision (credit) for losses on lending-related commitments	1		2		1		3
Balance at end of period	$	65	$	60	$	65	$	60

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

	Allowance						Outstanding
September 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	$	15	$	538	$	1	$	48,362		$	234	$	48,078		$	50
Commercial real estate:
Commercial mortgage	—		132		2		13,167			72		12,948			147
Construction	—		23		—		1,480			—		1,479			1
Total commercial real estate loans	—		155		2		14,647			72		14,427			148
Commercial lease financing	—		35		—		4,470			—		4,470			—
Total commercial loans	15		728		3		67,479			306		66,975			198
Real estate — residential mortgage	4		2		1		6,527			43		6,202			282
Home equity loans	9		24		—		10,456			126		10,316			14
Consumer direct loans	—		34		—		2,789			4		2,782			3
Credit cards	—		46		—		1,105			3		1,102			—
Consumer indirect loans	3		24		—		4,404			35		4,369			—
Total consumer loans	16		130		1		25,281			211		24,771			299
Total ALLL — continuing operations	31		858		4		92,760			517		91,746			497
Discontinued operations	2		9		—		915		(a)	23		892		(a)	—
Total ALLL — including discontinued operations	$	33	$	867	$	4	$	93,675		$	540	$	92,638		$	497

(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.

Schedule of Changes in Outstanding Unpaid Principal Balance, Carrying Amount, and Accretable Yield for PCI Loans

The following tables present the roll-forward of the accretable yield and the beginning and ending outstanding unpaid principal balance and carrying amount of all PCI loans for the three and nine months ended September 30, 2019, and the twelve months ended December 31, 2018.

	Three Months Ended September 30,							Nine Months Ended September 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	$	101		$	513	$	541	$	117		$	571	$	607
Accretion	(9		)					(28		)
Net reclassifications from nonaccretable to accretable	10							18
Payments received, net	(2		)					(7		)
Balance at end of period	$	100		$	492	$	518	$	100		$	492	$	518

	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

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Basis of Presentation and Accounting Policies (Policies)

9 Months Ended

Sep. 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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Mortgage Servicing Assets (Tables)

9 Months Ended

Sep. 30, 2019

Servicing Asset [Abstract]

Changes in Carrying Amount of Mortgage Servicing Assets

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

	Three months ended September 30,						Nine months ended September 30,
in millions	2019			2018			2019			2018
Balance at beginning of period	$	509		$	451		$	502		$	412
Servicing retained from loan sales	30			25			71			81
Purchases	10			17			33			50
Amortization	(29		)	(25		)	(86		)	(75		)
Temporary impairments	(2		)	—			(2		)	—
Balance at end of period	$	518		$	468		$	518		$	468
Fair value at end of period	$	681		$	672		$	681		$	672

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

	Three months ended September 30,						Nine months ended September 30,
in millions	2019			2018			2019			2018
Balance at beginning of period	$	39		$	34		$	37		$	31
Servicing retained from loan sales	5			2			9			7
Purchases	—			—			—			—
Amortization	(3		)	(1		)	(5		)	(3		)
Balance at end of period	$	41		$	35		$	41		$	35
Fair value at end of period	$	43		$	49		$	43		$	49

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

dollars in millions		September 30, 2019	September 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% (1.16%)
	Residual cash flows discount rate	7.00 - 11.50% (9.30%)	7.00 - 15.00% (9.10%)
	Escrow earn rate	1.46 - 2.36% (2.02%)	2.38 - 3.94% (3.07%)
	Loan assumption rate	0.01 - 3.37% (1.38%)	0.00 - 3.22% (1.34%)

The range and weighted-average of the significant unobservable inputs used to fair value our mortgage servicing assets at September 30, 2019, and September 30, 2018, along with the valuation techniques, are shown in the following table:

dollars in millions		September 30, 2019	September 30, 2018
Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Discounted cash flow	Prepayment speed	12.06 - 62.96% (14.53%)	8.27 - 55.15% (9.35%)
	Discount rate	7.50 - 10.00% (7.53%)	7.50 - 10.00% (7.54%)
	Servicing cost	$62 - $4,375 ($67.67)	$62 - $4,375 ($67.76)

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Earnings Per Common Share

9 Months Ended

Sep. 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 September 30,				Nine months ended September 30,
dollars in millions, except per share amounts	2019		2018		2019		2018
EARNINGS
Income (loss) from continuing operations	$	413	$	482	$	1,242	$	1,377
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		—
Income (loss) from continuing operations attributable to Key	413		482		1,242		1,377
Less: Dividends on Preferred Stock	30		14		70		43
Income (loss) from continuing operations attributable to Key common shareholders	383		468		1,172		1,334
Income (loss) from discontinued operations, net of taxes	3		—		6		5
Net income (loss) attributable to Key common shareholders	$	386	$	468	$	1,178	$	1,339
WEIGHTED-AVERAGE COMMON SHARES
Weighted-average Common Shares outstanding (000)	988,319		1,036,479		998,268		1,048,397
Effect of Common Share options and other stock awards	10,009		13,497		9,632		14,419
Weighted-average Common Shares and potential Common Shares outstanding (000) (a)	998,328		1,049,976		1,007,900		1,062,816
EARNINGS PER COMMON SHARE
Income (loss) from continuing operations attributable to Key common shareholders	$	.39	$	.45	$	1.17	$	1.27
Income (loss) from discontinued operations, net of taxes	—		—		.01		.01
Net income (loss) attributable to Key common shareholders (b)	.39		.45		1.18		1.28
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution	$	.38	$	.45	$	1.16	$	1.26
Income (loss) from discontinued operations, net of taxes — assuming dilution	—		—		.01		.01
Net income (loss) attributable to Key common shareholders — assuming dilution (b)	.39		.45		1.17		1.26

(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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Securities

9 Months Ended

Sep. 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.

	September 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	$	273	—		1		$	272	$	150	—		$	3	$	147
States and political subdivisions	4		—		—		4		7		—		—		7
Agency residential collateralized mortgage obligations	13,473		$	123	$	59	13,537		14,315		$	20	373		13,962
Agency residential mortgage-backed securities	1,925		41		7		1,959		2,128		13		36		2,105
Agency commercial mortgage-backed securities	6,440		174		19		6,595		3,300		19		132		3,187
Other securities	7		4		—		11		17		3		—		20
Total securities available for sale	$	22,122	$	342	$	86	$	22,378	$	19,917	$	55	$	544	$	19,428
HELD-TO-MATURITY SECURITIES
Agency residential collateralized mortgage obligations	$	6,072	$	38	$	41	$	6,069	$	7,021	$	2	$	254	$	6,769
Agency residential mortgage-backed securities	432		6		—		438		490		—		14		476
Agency commercial mortgage-backed securities	3,959		114		1		4,072		3,996		2		133		3,865
Asset-backed securities	12		—		—		12		—		—		—		—
Other securities	15		—		—		15		12		—		—		12
Total held-to-maturity securities	$	10,490	$	158	$	42	$	10,606	$	11,519	$	4	$	401	$	11,122

The following table summarizes our securities that were in an unrealized loss position as of September 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
September 30, 2019
Securities available for sale:
U.S Treasury, agencies, and corporations	$	50	—		(a)	$	45	1		$	95	1
Agency residential collateralized mortgage obligations	2,434		$	8		3,919		$	51	6,353		$	59
Agency residential mortgage-backed securities	100		—		(a)	824		7		924		7
Agency commercial mortgage-backed securities	558		2			1,269		17		1,827		19
Held-to-maturity securities:
Agency residential collateralized mortgage obligations	1,368		7			2,601		34		3,969		41
Agency residential mortgage-backed securities	—		—		(a)	—		—		—		—
Agency commercial mortgage-backed securities	527		1			—		—		527		1
Asset-backed securities	1		—		(a)	—		—		1		—
Other securities	10		—		(a)	—		—		10		—
Total temporarily impaired securities	$	5,048	$	18		$	8,658	$	110	$	13,706	$	128
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 September 30, 2019, gross unrealized losses totaled less than $1 million for U.S. Treasury, agencies, and corporations and agency residential mortgage-backed securities available for sale and less than $1 million for agency residential mortgage-backed securities, asset-backed 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 September 30, 2019, we had $59 million of gross unrealized losses related to 228 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 3.66 years at September 30, 2019. At September 30, 2019, we also had $7 million of gross unrealized losses related to 200 agency residential mortgage-backed securities positions and $19 million of gross unrealized losses related to 17 agency commercial mortgage backed securities positions with weighted-average maturities of 3.5 years and 4.33 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 nine months ended September 30, 2019.

At September 30, 2019, securities available for sale and held-to-maturity securities totaling $8.3 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.

September 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	$	321	$	324	$	46	$	46
Due after one through five years	16,927		17,042		7,532		7,567
Due after five through ten years	4,866		5,004		2,912		2,993
Due after ten years	8		8		—		—
Total	$	22,122	$	22,378	$	10,490	$	10,606

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Contingent Liabilities and Guarantees - Additional Information (Details) $ in Millions	9 Months Ended
	Sep. 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	$ 15,700
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	$ 5,700
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	15 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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Securities Financing Activities - Summarized Securities Financing Agreements (Details) - USD ($) $ in Millions	Sep. 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	(199)	0
Total	(199)	0
Repurchase agreements	(162)	(305)
Total	(162)	(305)
Federal Agency CMOs [Member]
Securities Financing Transaction [Line Items]
Assets pledged as collateral	208
Liabilities pledged as collateral	162
Gross Amounts Presented In Balance Sheets [Member]
Securities Financing Transaction [Line Items]
Reverse repurchase agreements	215	14
Total	215	14
Repurchase agreements	182	319
Total	182	319
Netting Adjustments [Member]
Securities Financing Transaction [Line Items]
Reverse repurchase agreements	(16)	(14)
Total	(16)	(14)
Repurchase agreements	(20)	(14)
Total	$ (20)	$ (14)

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Leases - Narrative (Details) $ in Millions	9 Months Ended
	Sep. 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	$ 305
Carrying amount of operating lease assets	$ 915
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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Derivatives and Hedging Activities - Cumulative Basis Adjustments on Fair Value Hedges (Details) - Interest Rate [Member] - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Long-term Debt [Member]
Derivatives, Fair Value [Line Items]
Carrying amount of hedged item	$ 9,169	$ 9,363
Hedge accounting basis adjustment	313	(6)
Certificates of Deposit [Member]
Derivatives, Fair Value [Line Items]
Carrying amount of hedged item	88	343
Hedge accounting basis adjustment	0	(1)
Bank Time Deposits [Member]
Derivatives, Fair Value [Line Items]
Carrying amount of hedged item	87	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	$ (9)	$ (10)

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Shareholders' Equity - Schedule of Preferred Stock (Details)	Sep. 30, 2019 USD ($) $ / shares shares
Series D Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, amount outstanding | $	$ 525,000,000
Preferred stock, shares authorized (in shares) | shares	21,000
Preferred stock, shares outstanding (in shares) | shares	21,000
Preferred stock, par value (in usd per share)	$ 1
Preferred stock, liquidation preference, value | $	$ 25,000
Depository Shares, Series D [Member]
Class of Stock [Line Items]
Depository receipt ratio	0.04
Preferred stock, liquidation preference (in usd per share)	$ 1,000
Dividend payable per share (in usd per share)	$ 12.50
Series E Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, amount outstanding | $	$ 500,000,000
Preferred stock, shares authorized (in shares) | shares	500,000
Preferred stock, shares outstanding (in shares) | shares	500,000
Preferred stock, par value (in usd per share)	$ 1
Preferred stock, liquidation preference, value | $	$ 1,000
Depository Shares, Series E [Member]
Class of Stock [Line Items]
Depository receipt ratio	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
Preferred stock, liquidation preference (in usd per share)	$ 25
Dividend payable per share (in usd per share)	$ 0.531250

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Securities - Additional Information (Details)	9 Months Ended
	Sep. 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	$ 8,300,000,000
Collateralized Mortgage Obligations [Member]
Debt Securities, Available-for-sale [Line Items]
Number of fixed rate collateralized mortgage obligations | loan	228
Weighted average maturity collateralized mortgage life	3 years 7 months 28 days
Residential Mortgage Backed Securities [Member] | Agency residential mortgage-backed securities [Member]
Debt Securities, Available-for-sale [Line Items]
Gross unrealized losses	$ 7,000,000	$ 36,000,000
Securities in unrealized loss positions, number of positions | position	200
Weighted average maturity mortgage backed securities	3 years 6 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	$ 19,000,000
Securities in unrealized loss positions, number of positions | position	17
Weighted average maturity mortgage backed securities	4 years 3 months 29 days

XML

Derivatives and Hedging Activities - Credit Risk Contingent Feature (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Credit Derivatives [Line Items]
Additional collateral aggregate fair value	$ 5
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

XML

Asset Quality - Summary of Post-Modification Outstanding Recorded Investment TDRs (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Financing Receivables, Modifications, Rollforward [Roll Forward]
Balance at beginning of the period	$ 395	$ 347	$ 399	$ 317
Additions	20	58	88	133
Payments	(65)	(28)	(123)	(69)
Charge-offs	(3)	(11)	(17)	(15)
Balance at end of period	$ 347	$ 366	$ 347	$ 366

XML

Basis of Presentation and Accounting Policies - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2019	Jan. 01, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease assets	$ 675
Operating lease liabilities	$ 758
Accounting Standards Update 2016-02 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease assets		$ 710
Operating lease liabilities		$ 710

XML

Asset Quality - Aging Analysis of Past Due and Current Loans (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Financing Receivable, Past Due [Line Items]
Current	$ 91,258	$ 88,011
Days Past Due	1,005	966
Non-performing Loans	585	542
Purchased Credit Impaired	497	575
Total loans	92,760	89,552
Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	66,671	65,558
Days Past Due	610	511
Non-performing Loans	339	244
Purchased Credit Impaired	198	241
Total loans	67,479	66,310
Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	24,587	22,453
Days Past Due	395	455
Non-performing Loans	246	298
Purchased Credit Impaired	299	334
Total loans	25,281	23,242
Commercial and Industrial [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	47,888	45,375
Days Past Due	424	317
Non-performing Loans	238	152
Purchased Credit Impaired	50	61
Total loans	48,362	45,753
Commercial Mortgage [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	12,881	13,957
Days Past Due	139	150
Non-performing Loans	92	81
Purchased Credit Impaired	147	178
Total loans	13,167	14,285
Commercial Real Estate: Construction [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	1,467	1,646
Days Past Due	12	18
Non-performing Loans	2	2
Purchased Credit Impaired	1	2
Total loans	1,480	1,666
Commercial Real Estate Loans [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	14,348	15,603
Days Past Due	151	168
Non-performing Loans	94	83
Purchased Credit Impaired	148	180
Total loans	14,647	15,951
Commercial Lease Financing [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	4,435	4,580
Days Past Due	35	26
Non-performing Loans	7	9
Purchased Credit Impaired	0	0
Total loans	4,470	4,606
Real Estate - Residential Mortgage [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	6,185	5,119
Days Past Due	60	80
Non-performing Loans	42	62
Purchased Credit Impaired	282	314
Total loans	6,527	5,513
Home Equity Loans [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	10,217	10,862
Days Past Due	225	263
Non-performing Loans	179	210
Purchased Credit Impaired	14	17
Total loans	10,456	11,142
Consumer Direct Loans [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	2,762	1,780
Days Past Due	24	26
Non-performing Loans	3	4
Purchased Credit Impaired	3	3
Total loans	2,789	1,809
Consumer Credit Card Financing Receivable [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	1,079	1,119
Days Past Due	26	25
Non-performing Loans	2	2
Purchased Credit Impaired	0	0
Total loans	1,105	1,144
Consumer Indirect Loans [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Current	4,344	3,573
Days Past Due	60	61
Non-performing Loans	20	20
Purchased Credit Impaired	0	0
Total loans	4,404	3,634
30-59 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	242	218
30-59 Days Past Due [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	152	128
30-59 Days Past Due [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	90	90
30-59 Days Past Due [Member] | Commercial and Industrial [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	101	89
30-59 Days Past Due [Member] | Commercial Mortgage [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	26	27
30-59 Days Past Due [Member] | Commercial Real Estate: Construction [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	7	0
30-59 Days Past Due [Member] | Commercial Real Estate Loans [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	33	27
30-59 Days Past Due [Member] | Commercial Lease Financing [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	18	12
30-59 Days Past Due [Member] | Real Estate - Residential Mortgage [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	12	11
30-59 Days Past Due [Member] | Home Equity Loans [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	31	31
30-59 Days Past Due [Member] | Consumer Direct Loans [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	9	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	7	6
30-59 Days Past Due [Member] | Consumer Indirect Loans [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	31	31
60-89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	124	94
60-89 Days Past Due [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	92	62
60-89 Days Past Due [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	32	32
60-89 Days Past Due [Member] | Commercial and Industrial [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	71	31
60-89 Days Past Due [Member] | Commercial Mortgage [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	11	17
60-89 Days Past Due [Member] | Commercial Real Estate: Construction [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	2	13
60-89 Days Past Due [Member] | Commercial Real Estate Loans [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	13	30
60-89 Days Past Due [Member] | Commercial Lease Financing [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	8	1
60-89 Days Past Due [Member] | Real Estate - Residential Mortgage [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	5	3
60-89 Days Past Due [Member] | Home Equity Loans [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	9	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	6	5
60-89 Days Past Due [Member] | Consumer Indirect Loans [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	7	7
90 and Greater Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	54	112
90 and Greater Days Past Due [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	27	77
90 and Greater Days Past Due [Member] | Consumer Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	27	35
90 and Greater Days Past Due [Member] | Commercial and Industrial [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	14	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	1	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	11	28
90 and Greater Days Past Due [Member] | Commercial Lease Financing [Member] | Commercial Loans [Member]
Financing Receivable, Past Due [Line Items]
Days Past Due	2	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	6	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

Consolidated Statements of Income (Parenthetical) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Statement [Abstract]
Net securities gains (less than $1 million)	$ 15,000,000	$ 1,000,000	$ 15,000,000	$ 0
Impaired losses related to securities	$ 0	$ 0	$ 0	$ 0

XML

Shareholders' Equity (Tables)

9 Months Ended

Sep. 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		Third 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		.531250

XML

Employee Benefits (Tables)

9 Months Ended

Sep. 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 September 30,						Nine months ended September 30,
in millions	2019			2018			2019			2018
Interest cost on PBO	$	11		$	10		$	34		$	30
Expected return on plan assets	(12		)	(13		)	(36		)	(39		)
Amortization of losses	4			4			11			12
Net pension cost	$	3		$	1		$	9		$	3

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2019	Oct. 28, 2019
Entity Information [Line Items]
Document Type	10-Q
Document Period End Date	Sep. 30, 2019
Entity File Number	001-11302
Entity Registrant Name	KeyCorp
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		984,958,009
Amendment Flag	false
Entity Central Index Key	0000091576
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
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 Statements of Changes in Equity (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Cash dividends declared on common shares (in usd per share)	$ 0.185	$ 0.17	$ 0.525	$ 0.395
Series D Preferred Stock [Member]
Cash dividends declared on Preferred Stock (in usd per share)	12.50	12.50	37.50	37.50
Series E Preferred Stock [Member]
Cash dividends declared on Preferred Stock (in usd per share)	0.382813	$ 0.382813	1.148439	$ 1.148349
Series F Preferred Stock [Member]
Cash dividends declared on Preferred Stock (in usd per share)	0.353125		1.059375
Series G Preferred Stock [Member]
Cash dividends declared on Preferred Stock (in usd per share)	$ 0.53125		$ 0.53125

XML

Leases - Summary of Additional Balance Sheet Information (Details) $ in Millions	Sep. 30, 2019 USD ($)
Leases [Abstract]
Operating lease assets	$ 675
Operating lease liabilities	758
Finance leases:
Property and equipment, gross	28
Accumulated depreciation	(17)
Property and equipment, net	11
Finance lease liabilities	$ 14

XML

Asset Quality - Changes in Allowance for Loan and Lease Losses by Loan Category (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 902	$ 901	$ 897	$ 893
Provision	198	63	338	189
Charge-offs	(214)	(85)	(393)	(243)
Recoveries	18	22	62	62
Ending balance	904	901	904	901
Provision (credit) for losses on lending-related commitments	1	2	1	3
Realization of loss related to previously disclosed fraud incident	123		123
Continuing Operations [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	890	887	883	877
Provision	199	60	335	184
Charge-offs	(213)	(81)	(384)	(232)
Recoveries	17	21	59	58
Ending balance	893	887	893	887
Continuing Operations [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	747	749	743	735
Provision	169	44	252	126
Charge-offs	(177)	(48)	(277)	(132)
Recoveries	7	9	28	25
Ending balance	746	754	746	754
Continuing Operations [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	143	138	140	142
Provision	30	16	83	58
Charge-offs	(36)	(33)	(107)	(100)
Recoveries	10	12	31	33
Ending balance	147	133	147	133
Continuing Operations [Member] | Commercial and Industrial [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	549	542	532	529
Provision	175	34	242	110
Charge-offs	(176)	(38)	(242)	(114)
Recoveries	6	5	22	18
Ending balance	554	543	554	543
Continuing Operations [Member] | Commercial Mortgage [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	139	139	142	133
Provision	(5)	9	(4)	17
Charge-offs	0	(6)	(6)	(9)
Recoveries	0	1	2	2
Ending balance	134	143	134	143
Continuing Operations [Member] | Construction [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	24	28	33	30
Provision	(1)	3	(6)	0
Charge-offs	0	0	(4)	0
Recoveries	0	0	0	1
Ending balance	23	31	23	31
Continuing Operations [Member] | Commercial Real Estate [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	163	167	175	163
Provision	(6)	12	(10)	17
Charge-offs	0	(6)	(10)	(9)
Recoveries	0	1	2	3
Ending balance	157	174	157	174
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	0	(2)	20	(1)
Charge-offs	(1)	(4)	(25)	(9)
Recoveries	1	3	4	4
Ending balance	35	37	35	37
Continuing Operations [Member] | Real Estate - Residential Mortgage [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	7	10	7	7
Provision	1	(1)	2	3
Charge-offs	(1)	(2)	(3)	(3)
Recoveries	0	2	1	2
Ending balance	7	9	7	9
Continuing Operations [Member] | Home Equity Loans [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	36	37	35	43
Provision	1	(2)	8	(4)
Charge-offs	(6)	(4)	(16)	(14)
Recoveries	2	3	6	9
Ending balance	33	34	33	34
Continuing Operations [Member] | Consumer Direct Loans [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	32	26	30	28
Provision	10	9	29	20
Charge-offs	(10)	(10)	(30)	(27)
Recoveries	2	1	5	5
Ending balance	34	26	34	26
Continuing Operations [Member] | Credit Cards [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	44	46	48	44
Provision	11	7	26	30
Charge-offs	(11)	(10)	(34)	(34)
Recoveries	2	2	6	5
Ending balance	46	45	46	45
Continuing Operations [Member] | Consumer Indirect Loans [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	24	19	20	20
Provision	7	3	18	9
Charge-offs	(8)	(7)	(24)	(22)
Recoveries	4	4	13	12
Ending balance	27	19	27	19
Discontinued Operations [Member]
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	12	14	14	16
Provision	(1)	3	3	5
Charge-offs	(1)	(4)	(9)	(11)
Recoveries	1	1	3	4
Ending balance	$ 11	$ 14	$ 11	$ 14

XML

Fair Value Measurements - Fair Value of Assets and Liabilities Measured on Recurring Basis (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	$ 963,000,000	$ 849,000,000
Securities available for sale	22,378,000,000	19,428,000,000
Loans, net of unearned income (residential)	92,760,000,000	89,552,000,000
Loans held for sale (residential)		0
Derivative assets, netting adjustments	(492,000,000)	(333,000,000)
Total derivative assets	1,143,000,000	531,000,000
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, netting adjustments	(331,000,000)	(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	4,000,000	7,000,000
Other Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	11,000,000	20,000,000
Residential Mortgage Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	1,959,000,000	2,105,000,000
Other Mortgage-Backed Securities [Member] | Commercial Mortgage Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	6,595,000,000	3,187,000,000
Recurring [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	934,000,000	824,000,000
Commercial loans	29,000,000	25,000,000
Total trading account assets	963,000,000	849,000,000
Securities available for sale	22,378,000,000	19,428,000,000
Total other investments	90,000,000	115,000,000
Loans, net of unearned income (residential)	3,000,000	3,000,000
Loans held for sale (residential)	101,000,000	54,000,000
Derivative assets, gross	1,635,000,000	864,000,000
Derivative assets, netting adjustments	(492,000,000)	(333,000,000)
Total derivative assets	1,143,000,000	531,000,000
Accrued income and other assets	0	0
Total assets at fair value	24,678,000,000	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	1,022,000,000	930,000,000
Recurring [Member] | US Treasury and Government [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	744,000,000	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	51,000,000	60,000,000
Securities available for sale	4,000,000	7,000,000
Recurring [Member] | Other Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	50,000,000	22,000,000
Securities available for sale	11,000,000	20,000,000
Recurring [Member] | Commercial Mortgage Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	6,595,000,000	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	74,000,000	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	89,000,000	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	1,959,000,000	2,105,000,000
Recurring [Member] | Short [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Short positions	700,000,000	544,000,000
Recurring [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	653,000,000	723,000,000
Derivative liabilities, netting adjustments	(331,000,000)	(337,000,000)
Total derivative liabilities	322,000,000	386,000,000
Recurring [Member] | Interest Rate [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	1,236,000,000	415,000,000
Recurring [Member] | Interest Rate [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	268,000,000	297,000,000
Recurring [Member] | Foreign Exchange [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	101,000,000	106,000,000
Recurring [Member] | Foreign Exchange [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	96,000,000	95,000,000
Recurring [Member] | Commodity [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	281,000,000	333,000,000
Recurring [Member] | Commodity [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	272,000,000	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	7,000,000	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	10,000,000	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	60,000,000	70,000,000
Derivative assets, netting adjustments	0	0
Total derivative assets	60,000,000	70,000,000
Accrued income and other assets	0	0
Total assets at fair value	60,000,000	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	87,000,000	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	31,000,000	14,000,000
Level 1 [Member] | Recurring [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	56,000,000	58,000,000
Derivative liabilities, netting adjustments	0	0
Total derivative liabilities	56,000,000	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	60,000,000	70,000,000
Level 1 [Member] | Recurring [Member] | Foreign Exchange [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	56,000,000	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	934,000,000	824,000,000
Commercial loans	29,000,000	25,000,000
Total trading account assets	963,000,000	849,000,000
Securities available for sale	22,367,000,000	19,408,000,000
Total other investments	0	1,000,000
Loans, net of unearned income (residential)	0	0
Loans held for sale (residential)	100,000,000	54,000,000
Derivative assets, gross	1,565,000,000	786,000,000
Derivative assets, netting adjustments	0	0
Total derivative assets	1,565,000,000	786,000,000
Accrued income and other assets	0	0
Total assets at fair value	24,995,000,000	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	1,260,000,000	1,195,000,000
Level 2 [Member] | Recurring [Member] | US Treasury and Government [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	744,000,000	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	51,000,000	60,000,000
Securities available for sale	4,000,000	7,000,000
Level 2 [Member] | Recurring [Member] | Other Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	50,000,000	22,000,000
Securities available for sale	0	0
Level 2 [Member] | Recurring [Member] | Commercial Mortgage Backed Securities [Member]
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	6,595,000,000	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	89,000,000	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	1,959,000,000	2,105,000,000
Level 2 [Member] | Recurring [Member] | Short [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Short positions	669,000,000	530,000,000
Level 2 [Member] | Recurring [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	591,000,000	665,000,000
Derivative liabilities, netting adjustments	0	0
Total derivative liabilities	591,000,000	665,000,000
Level 2 [Member] | Recurring [Member] | Interest Rate [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	1,233,000,000	410,000,000
Level 2 [Member] | Recurring [Member] | Interest Rate [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	268,000,000	297,000,000
Level 2 [Member] | Recurring [Member] | Foreign Exchange [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	41,000,000	36,000,000
Level 2 [Member] | Recurring [Member] | Foreign Exchange [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	40,000,000	37,000,000
Level 2 [Member] | Recurring [Member] | Commodity [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	281,000,000	333,000,000
Level 2 [Member] | Recurring [Member] | Commodity [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	272,000,000	323,000,000
Level 2 [Member] | Recurring [Member] | Credit [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	0	1,000,000
Level 2 [Member] | Recurring [Member] | Credit [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	1,000,000	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	10,000,000	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)	1,000,000	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	33,000,000	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	6,000,000	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	6,000,000	0
Derivative liabilities, netting adjustments	0	0
Total derivative liabilities	6,000,000	0
Level 3 [Member] | Recurring [Member] | Interest Rate [Member]
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	3,000,000	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	1,000,000	0
Level 3 [Member] | Recurring [Member] | Credit [Member] | Long [Member]
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	6,000,000	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	73,000,000	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	13,537,000,000	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	13,537,000,000	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

Leases - Composition of Net Investment in Sales-Type and Direct Financing Leases (Details) $ in Millions	Sep. 30, 2019 USD ($)
Leases [Abstract]
Lease receivables	$ 3,632
Unearned income	(339)
Unguaranteed residual value	450
Deferred fees and costs	14
Net investment in sales-type and direct financing leases	$ 3,757

XML

Revenue from Contracts with Customers (Details) $ in Millions	3 Months Ended			9 Months Ended		12 Months Ended
	Sep. 30, 2019 USD ($)	Mar. 31, 2019 Segment	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Dec. 31, 2018 Segment
Disaggregation of Revenue [Line Items]
Number of operating segments | Segment		2				2
Total revenue from contracts with customers	$ 341		$ 334	$ 966	$ 981
Noninterest income	650		609	1,808	1,870
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	105		106	313	318
Investment Banking And Debt Placement Fees [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	78		70	188	185
Service Charges On Deposit Accounts [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	86		85	251	265
Cards And Payments Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	69		67	204	197
Other Noninterest Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	3		6	10	16
Noninterest income	277		230	752	677
Operating Segments [Member] | Consumer Bank [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	193		192	567	575
Operating Segments [Member] | Consumer Bank [Member] | Trust And Investment Services Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	89		89	265	264
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	59		57	169	181
Operating Segments [Member] | Consumer Bank [Member] | Cards And Payments Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	42		40	123	115
Operating Segments [Member] | Consumer Bank [Member] | Other Noninterest Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	3		6	10	15
Operating Segments [Member] | Commercial Bank [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	148		142	399	406
Operating Segments [Member] | Commercial Bank [Member] | Trust And Investment Services Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	16		17	48	54
Operating Segments [Member] | Commercial Bank [Member] | Investment Banking And Debt Placement Fees [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	78		70	188	185
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	82	84
Operating Segments [Member] | Commercial Bank [Member] | Cards And Payments Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	27		27	81	82
Operating Segments [Member] | Commercial Bank [Member] | Other Noninterest Income [Member]
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	0		0	0	1
Other [Member]
Disaggregation of Revenue [Line Items]
Noninterest income	$ 32		$ 45	$ 90	$ 212

XML

Variable Interest Entities - Summary of Variable Interest Entities Information (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Variable Interest Entity [Line Items]
Total Assets	$ 274	$ 248
Total Liabilities	2	2
LIHTC Investments [Member]
Variable Interest Entity [Line Items]
Total Assets	6,385	5,932
Total Liabilities	2,603	2,569
Maximum Exposure to Loss	1,793	1,740
KCC Indirect Investments [Member]
Variable Interest Entity [Line Items]
Total Assets	13,731	19,659
Total Liabilities	288	376
Maximum Exposure to Loss	$ 97	$ 122

XML

Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Nonrecurring Basis (Details) - Nonrecurring [Member] - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
ASSETS MEASURED ON A NONRECURRING BASIS
Impaired loans and leases	$ 41	$ 42
Other intangible assets	47	0
Accrued income and other assets	55	16
Total assets at fair value	143	58
Level 1 [Member]
ASSETS MEASURED ON A NONRECURRING BASIS
Impaired loans and leases	0	0
Other intangible assets	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
Other intangible assets	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	41	42
Other intangible assets	47	0
Accrued income and other assets	55	16
Total assets at fair value	$ 143	$ 58

XML

Acquisitions and Discontinued Operations

9 Months Ended

Sep. 30, 2019

Business Combinations [Abstract]

Acquisitions and Discontinued Operations

12. Acquisition 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.

Discontinued operations

Discontinued operations primarily includes our government-guaranteed and private education lending business. At September 30, 2019, and December 31, 2018, approximately $915 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.

XML

Contingent Liabilities and Guarantees

9 Months Ended

Sep. 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 September 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.

September 30, 2019	Maximum Potential Undiscounted Future Payments		Liability Recorded
in millions
Financial guarantees:
Standby letters of credit	$	3,210	$	71
Recourse agreement with FNMA	4,614		6
Residential mortgage reserve	1,709		6
Written put options (a)	2,533		47
Total	$	12,066	$	130

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

We determine the payment/performance risk associated with each type of guarantee described below based on the probability that we could be required to make the maximum potential undiscounted future payments shown in the preceding table. We use a scale of low (0% to 30% probability of payment), moderate (greater than 30% to 70% probability of payment), or high (greater than 70% probability of payment) to assess the payment/performance risk, and have determined that the payment/performance risk associated with each type of guarantee outstanding at September 30, 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 September 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 15 years.

Recourse agreement with FNMA. At September 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 $15.7 billion. The maximum potential amount of undiscounted future payments that we could be required to make under this program, as shown in the preceding table, is equal to approximately 29% of the principal balance of loans outstanding at September 30, 2019. 

Residential Mortgage Banking. At September 30, 2019, the unpaid principal balance outstanding of loans sold by us in this program was $5.7 billion. The risk assessment is low for the residential mortgage product. The maximum potential amount of undiscounted future payments that we could be required to make under this program, as shown in the preceding table, is equal to approximately 30% of the principal balance of loans outstanding at September 30, 2019. 

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

Written put options. At September 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 of 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.

XML

Consolidated Statements of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
OPERATING ACTIVITIES
Net income (loss)	$ 1,248	$ 1,382
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Provision for credit losses	336	187
Depreciation and amortization expense, net	183	290
Accretion of acquired loans	39	69
Increase in cash surrender value of corporate-owned life insurance	(86)	(84)
Stock-based compensation expense	72	78
FDIC reimbursement (payments), net of FDIC expense	0	2
Deferred income taxes (benefit)	81	103
Proceeds from sales of loans held for sale	8,103	8,234
Originations of loans held for sale, net of repayments	(8,063)	(8,631)
Net losses (gains) on sales of loans held for sale	(126)	(130)
Net losses (gains) and writedown on OREO	6	(2)
Net losses (gains) on leased equipment	(16)	(34)
Net securities losses (gains)	(15)	0
Net losses (gains) on sales of fixed assets	(1)	8
Net decrease (increase) in trading account assets	(114)	(122)
Gain on sale of KIBS	0	(83)
Other operating activities, net	252	(473)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	1,899	794
INVESTING ACTIVITIES
Cash received (used) in acquisitions, net of cash acquired	(185)	0
Proceeds from sale of KIBS	0	124
Net decrease (increase) in short-term investments, excluding acquisitions	(789)	2,175
Purchases of securities available for sale	(4,618)	(3,058)
Proceeds from sales of securities available for sale	24	0
Proceeds from prepayments and maturities of securities available for sale	2,395	2,456
Proceeds from prepayments and maturities of held-to-maturity securities	1,054	1,206
Purchases of held-to-maturity securities	(22)	(1,242)
Purchases of other investments	(33)	(21)
Proceeds from sales of other investments	40	36
Proceeds from prepayments and maturities of other investments	39	37
Net decrease (increase) in loans, excluding acquisitions, sales and transfers	(4,122)	(3,249)
Proceeds from sales of portfolio loans	245	143
Proceeds from corporate-owned life insurance	41	60
Purchases of premises, equipment, and software	(58)	(73)
Proceeds from sales of premises and equipment	17	1
Proceeds from sales of OREO	14	22
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(5,958)	(1,383)
FINANCING ACTIVITIES
Net increase (decrease) in deposits, excluding acquisitions	4,340	545
Net increase (decrease) in short-term borrowings	19	911
Net proceeds from issuance of long-term debt	2,113	1,802
Payments on long-term debt	(1,675)	(2,127)
Issuance of preferred shares	435	412
Open market Common Share repurchases	(594)	(820)
Employee equity compensation program Common Share repurchases	(33)	(47)
Net proceeds from reissuance of Common Shares	7	19
Cash dividends paid	(595)	(458)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	4,017	237
NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS	(42)	(352)
CASH AND DUE FROM BANKS AT BEGINNING OF PERIOD	678	671
CASH AND DUE FROM BANKS AT END OF PERIOD	636	319
Additional disclosures relative to cash flows:
Interest paid	950	632
Income taxes paid (refunded)	(22)	22
Noncash items:
Reduction of secured borrowing and related collateral	3	18
Loans transferred to portfolio from held for sale	5	21
Loans transferred to held for sale from portfolio	290	7
Loans transferred to OREO	22	19
CMBS risk retentions	17	0
ABS risk retentions	$ 12	$ 0

XML

Asset Quality

9 Months Ended

Sep. 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	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,
RATING	2019		2018		2019		2018		2019		2018		2019		2018		2019		2018
Pass	$	46,604	$	44,138	$	12,608	$	13,672	$	1,447	$	1,537	$	4,431	$	4,557	$	65,090	$	63,904
Criticized (Accruing)	1,470		1,402		319		354		30		125		32		41		1,851		1,922
Criticized (Nonaccruing)	238		152		93		81		2		2		7		8		340		243
Total	$	48,312	$	45,692	$	13,020	$	14,107	$	1,479	$	1,664	$	4,470	$	4,606	$	67,281	$	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	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,
FICO SCORE	2019		2018		2019		2018		2019		2018		2019		2018		2019		2018
750 and above	$	10,343	$	9,794	$	1,116	$	549	$	503	$	521	$	2,075	$	1,647	$	14,037	$	12,511
660 to 749	4,736		4,906		912		700		481		507		1,566		1,320		7,695		7,433
Less than 660	1,315		1,411		210		224		121		116		578		565		2,224		2,316
No Score	293		213		548		333		—		—		185		102		1,026		648
Total	$	16,687	$	16,324	$	2,786	$	1,806	$	1,105	$	1,144	$	4,404	$	3,634	$	24,982	$	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	September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,	December 31,	September 30,		December 31,
RATING	2019		2018		2019		2018		2019		2018		2019	2018	2019		2018
Pass	$	30	$	37	$	112	$	125	$	1	$	2	—	—	$	143	$	164
Criticized	20		24		35		53		—		—		—	—	55		77
Total	$	50	$	61	$	147	$	178	$	1	$	2	—	—	$	198	$	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	September 30,		December 31,		September 30,		December 31,		September 30,	December 31,	September 30,	December 31,	September 30,		December 31,
FICO SCORE	2019		2018		2019		2018		2019	2018	2019	2018	2019		2018
750 and above	$	113	$	137	1		—		—	—	—	—	$	114	$	137
660 to 749	94		95		$	1	$	1	—	—	—	—	95		96
Less than 660	83		97		1		2		—	—	—	—	84		99
No Score	6		2		—		—		—	—	—	—	6		2
Total	$	296	$	331	$	3	$	3	—	—	—	—	$	299	$	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 September 30, 2019, and December 31, 2018, provides further information regarding Key’s credit exposure.

Aging Analysis of Loan Portfolio^(a) 

September 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)
in millions
LOAN TYPE
Commercial and industrial	$	47,888	$	101	$	71	$	14	$	238	$	424	$	50	$	48,362
Commercial real estate:
Commercial mortgage	12,881		26		11		10		92		139		147		13,167
Construction	1,467		7		2		1		2		12		1		1,480
Total commercial real estate loans	14,348		33		13		11		94		151		148		14,647
Commercial lease financing	4,435		18		8		2		7		35		—		4,470
Total commercial loans	$	66,671	$	152	$	92	$	27	$	339	$	610	$	198	$	67,479
Real estate — residential mortgage	$	6,185	$	12	$	5	$	1	$	42	$	60	$	282	$	6,527
Home equity loans	10,217		31		9		6		179		225		14		10,456
Consumer direct loans	2,762		9		5		7		3		24		3		2,789
Credit cards	1,079		7		6		11		2		26		—		1,105
Consumer indirect loans	4,344		31		7		2		20		60		—		4,404
Total consumer loans	$	24,587	$	90	$	32	$	27	$	246	$	395	$	299	$	25,281
Total loans	$	91,258	$	242	$	124	$	54	$	585	$	1,005	$	497	$	92,760

(a) Amounts in table represent recorded investment and exclude loans held for sale. Recorded investment represents the principal amount of the loan increased or decreased by net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs.

(b) Past due loan amounts exclude PCI, even if contractually past due (or if we do not expect to collect principal or interest in full based on the original contractual terms), as we are currently accreting income over the remaining term of the loans.

(c) 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)
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 principal amount of the loan increased or decreased by net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs.

(b) Past due loan amounts exclude PCI, even if contractually past due (or if we do not expect to collect principal or interest in full based on the original contractual terms), as we are currently accreting income over the remaining term of the loans.

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

At September 30, 2019, the approximate carrying amount of our commercial nonperforming loans outstanding represented 77% of their original contractual amount owed, total nonperforming loans outstanding represented 81% of their original contractual amount owed, and nonperforming assets in total were carried at 84% of their original contractual amount owed.

Nonperforming loans and loans held for sale reduced expected interest income by $7 million and $24 million for the three and nine months ended September 30, 2019, respectively, and $8 million and $22 million for the three and nine months ended September 30, 2018, respectively.

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

	September 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	$	199	$	257	—		$	118	$	175	—
Commercial real estate:
Commercial mortgage	71		82		—		64		70		—
Total commercial real estate loans	71		82		—		64		70		—
Total commercial loans	270		339		—		182		245		—
Real estate — residential mortgage	3		3		—		4		5		—
Home equity loans	46		53		—		49		56		—
Consumer direct loans	—		1		—		1		1		—
Consumer indirect loans	2		4		—		2		4		—
Total consumer loans	51		61		—		56		66		—
Total loans with no related allowance recorded	321		400		—		238		311		—
With an allowance recorded:
Commercial and industrial	35		48		$	15	44		47		$	5
Commercial real estate:
Commercial mortgage	2		2		—		2		3		1
Total commercial real estate loans	2		2		—		2		3		1
Total commercial loans	37		50		15		46		50		6
Real estate — residential mortgage	40		61		4		45		70		3
Home equity loans	80		87		9		78		85		8
Consumer direct loans	4		4		—		3		3		—
Credit cards	3		3		—		3		3		—
Consumer indirect loans	32		33		3		34		34		2
Total consumer loans	159		188		16		163		195		13
Total loans with an allowance recorded	196		238		31		209		245		19
Total	$	517	$	638	$	31	$	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 September 30,				Nine Months Ended September 30,
in millions	2019		2018		2019		2018
Commercial and industrial	$	209	$	209	$	198	$	184
Commercial real estate:
Commercial mortgage	69		48		69		44
Total commercial real estate loans	69		48		69		44
Total commercial loans	278		257		267		228
Real estate — residential mortgage	45		49		46		49
Home equity loans	127		126		127		122
Consumer direct loans	4		4		4		4
Credit cards	3		3		3		3
Consumer indirect loans	35		35		35		34
Total consumer loans	214		217		215		212
Total	$	492	$	474	$	482	$	440

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

Interest income recognized on the outstanding balances of accruing impaired loans totaled $4 million and $10 million for the three and nine months ended September 30, 2019, respectively, and $4 million and $9 million for the three and nine months ended September 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 less than $1 million and $5 million at September 30, 2019, and December 31, 2018, respectively.

At September 30, 2019, and December 31, 2018, the recorded investment of consumer residential mortgage loans in the process of foreclosure was approximately $104 million and $113 million, respectively. At September 30, 2019, and December 31, 2018, we had $39 million and $35 million, respectively, of OREO, which represented the carrying value of foreclosed residential real estate.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
in millions	2019		2018		2019		2018
Commercial loans:
Extension of Maturity Date	6		$	20	$	11	$	20
Payment or Covenant Modification/Deferment	—		26		1		46
Bankruptcy Plan Modification	—		—		—		7
Increase in new commitment or new money	2		—		12		—
Total	8		$	46	$	24	$	73
Consumer loans:
Interest rate reduction	$	4	$	4	$	12	$	22
Other	8		10		21		29
Total	$	12	$	14	$	33	$	51
Total commercial and consumer TDRs	$	20	$	60	$	57	$	124

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

	Three Months Ended September 30,						Nine Months Ended September 30,
in millions	2019			2018			2019			2018
Balance at beginning of the period	$	395		$	347		$	399		$	317
Additions	20			58			88			133
Payments	(65		)	(28		)	(123		)	(69		)
Charge-offs	(3		)	(11		)	(17		)	(15		)
Balance at end of period	$	347		$	366		$	347		$	366

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

	September 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	51	$	63	$	49	35	$	121	$	85
Commercial real estate:
Commercial mortgage	7	66		60		6	66		62
Total commercial real estate loans	7	66		60		6	66		62
Total commercial loans	58	129		109		41	187		147
Real estate — residential mortgage	162	12		10		281	21		20
Home equity loans	704	42		41		1,142	66		63
Consumer direct loans	137	2		1		171	2		1
Credit cards	296	1		1		330	2		2
Consumer indirect loans	1,004	17		14		1,098	18		14
Total consumer loans	2,303	74		67		3,022	109		100
Total nonperforming TDRs	2,361	203		176		3,063	296		247
Prior-year accruing:(a)
Commercial and industrial	7	33		28		11	37		32
Commercial real estate
Commercial mortgage	1	—		—		2	—		—
Total commercial real estate loans	1	—		—		2	—		—
Total commercial loans	8	33		28		13	37		32
Real estate — residential mortgage	502	38		32		491	36		30
Home equity loans	1,796	105		86		1,403	82		64
Consumer direct loans	143	5		3		79	4		3
Credit cards	556	3		1		479	3		1
Consumer indirect loans	787	35		21		556	33		22
Total consumer loans	3,784	186		143		3,008	158		120
Total prior-year accruing TDRs	3,792	219		171		3,021	195		152
Total TDRs	6,153	$	422	$	347	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 September 30, 2019, there were no commercial loan TDRs and 79 consumer loan TDRs with a combined recorded investment of $1 million that experienced payment defaults after modifications resulting in TDR status during 2018. During the three months ended September 30, 2018, there were no commercial loan TDRs and 82 consumer loan TDRs with a combined recorded investment of $2 million that experienced payment defaults after modifications resulting in TDR status during 2017.

During the nine months ended September 30, 2019, there were no commercial loan TDRs and 255 consumer loan TDRs with a combined recorded investment of $5 million that experienced payment defaults after modifications resulting in TDR status during 2018. During the nine months ended September 30, 2018, there were no commercial loan TDRs and 178 consumer loan TDRs with a combined recorded investment of $4 million that experienced payment defaults after modifications resulting in TDR status during 2017.

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 September 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 September 30, 2019:

in millions	June 30, 2019		Provision				Charge-offs				Recoveries		September 30, 2019
Commercial and Industrial	$	549	$	175			$	(176	)		$	6	$	554
Commercial real estate:
Real estate — commercial mortgage	139		(5		)		—				—		134
Real estate — construction	24		(1		)		—				—		23
Total commercial real estate loans	163		(6		)		—				—		157
Commercial lease financing	35		—				(1		)		1		35
Total commercial loans	747		169				(177		)		7		746
Real estate — residential mortgage	7		1				(1		)		—		7
Home equity loans	36		1				(6		)		2		33
Consumer direct loans	32		10				(10		)		2		34
Credit cards	44		11				(11		)		2		46
Consumer indirect loans	24		7				(8		)		4		27
Total consumer loans	143		30				(36		)		10		147
Total ALLL — continuing operations	890		199			(a), (b)	(213		)	(b)	17		893
Discontinued operations	12		(1		)		(1		)		1		11
Total ALLL — including discontinued operations	$	902	$	198			$	(214	)		$	18	$	904

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

(b) Includes the realization of a $123 million loss related to a previously disclosed fraud incident.

Three months ended September 30, 2018:

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

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

Nine months ended September 30, 2019:

in millions	December 31, 2018		Provision				Charge-offs				Recoveries		September 30, 2019
Commercial and Industrial	532		$	242			$	(242	)		$	22	$	554
Commercial real estate:
Real estate — commercial mortgage	142		(4		)		(6		)		2		134
Real estate — construction	33		(6		)		(4		)		—		23
Total commercial real estate loans	175		(10		)		(10		)		2		157
Commercial lease financing	36		20				(25		)		4		35
Total commercial loans	743		252				(277		)		28		746
Real estate — residential mortgage	7		2				(3		)		1		7
Home equity loans	35		8				(16		)		6		33
Consumer direct loans	30		29				(30		)		5		34
Credit cards	48		26				(34		)		6		46
Consumer indirect loans	20		18				(24		)		13		27
Total consumer loans	140		83				(107		)		31		147
Total ALLL — continuing operations	883		335			(a), (b)	(384		)	(b)	59		893
Discontinued operations	14		3				(9		)		3		11
Total ALLL — including discontinued operations	$	897	$	338			$	(393	)		$	62	$	904

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

(b) Includes the realization of a $123 million loss related to a previously disclosed fraud incident.

Nine months ended September 30, 2018:

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

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

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

	Allowance						Outstanding
September 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	$	15	$	538	$	1	$	48,362		$	234	$	48,078		$	50
Commercial real estate:
Commercial mortgage	—		132		2		13,167			72		12,948			147
Construction	—		23		—		1,480			—		1,479			1
Total commercial real estate loans	—		155		2		14,647			72		14,427			148
Commercial lease financing	—		35		—		4,470			—		4,470			—
Total commercial loans	15		728		3		67,479			306		66,975			198
Real estate — residential mortgage	4		2		1		6,527			43		6,202			282
Home equity loans	9		24		—		10,456			126		10,316			14
Consumer direct loans	—		34		—		2,789			4		2,782			3
Credit cards	—		46		—		1,105			3		1,102			—
Consumer indirect loans	3		24		—		4,404			35		4,369			—
Total consumer loans	16		130		1		25,281			211		24,771			299
Total ALLL — continuing operations	31		858		4		92,760			517		91,746			497
Discontinued operations	2		9		—		915		(a)	23		892		(a)	—
Total ALLL — including discontinued operations	$	33	$	867	$	4	$	93,675		$	540	$	92,638		$	497

(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 September 30,				Nine months ended September 30,
in millions	2019		2018		2019		2018
Balance at beginning of period	$	64	$	58	$	64	$	57
Provision (credit) for losses on lending-related commitments	1		2		1		3
Balance at end of period	$	65	$	60	$	65	$	60

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 three and nine months ended September 30, 2019, and the twelve months ended December 31, 2018.

	Three Months Ended September 30,							Nine Months Ended September 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	$	101		$	513	$	541	$	117		$	571	$	607
Accretion	(9		)					(28		)
Net reclassifications from nonaccretable to accretable	10							18
Payments received, net	(2		)					(7		)
Balance at end of period	$	100		$	492	$	518	$	100		$	492	$	518

	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

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Mortgage Servicing Assets

9 Months Ended

Sep. 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 September 30,						Nine months ended September 30,
in millions	2019			2018			2019			2018
Balance at beginning of period	$	509		$	451		$	502		$	412
Servicing retained from loan sales	30			25			71			81
Purchases	10			17			33			50
Amortization	(29		)	(25		)	(86		)	(75		)
Temporary impairments	(2		)	—			(2		)	—
Balance at end of period	$	518		$	468		$	518		$	468
Fair value at end of period	$	681		$	672		$	681		$	672

The fair value of commercial mortgage servicing assets is determined by calculating the present value of future cash flows associated with servicing the loans. This calculation uses a number of assumptions that are based on current market conditions. The range and weighted average of the significant unobservable inputs used to determine the fair value of our commercial mortgage servicing assets at September 30, 2019, and September 30, 2018, along with the valuation techniques, are shown in the following table: 

dollars in millions		September 30, 2019	September 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% (1.16%)
	Residual cash flows discount rate	7.00 - 11.50% (9.30%)	7.00 - 15.00% (9.10%)
	Escrow earn rate	1.46 - 2.36% (2.02%)	2.38 - 3.94% (3.07%)
	Loan assumption rate	0.01 - 3.37% (1.38%)	0.00 - 3.22% (1.34%)

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 $147 million for the nine-month period ended September 30, 2019, and $126 million for the nine-month period ended September 30, 2018. This fee income was offset by $88 million of amortization for the nine-month period ended September 30, 2019, and $75 million for the nine-month period ended September 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 September 30,						Nine months ended September 30,
in millions	2019			2018			2019			2018
Balance at beginning of period	$	39		$	34		$	37		$	31
Servicing retained from loan sales	5			2			9			7
Purchases	—			—			—			—
Amortization	(3		)	(1		)	(5		)	(3		)
Balance at end of period	$	41		$	35		$	41		$	35
Fair value at end of period	$	43		$	49		$	43		$	49

The fair value of mortgage servicing assets is determined by calculating the present value of future cash flows associated with servicing the loans. This calculation uses a number of assumptions that are based on current market conditions. The range and weighted-average of the significant unobservable inputs used to fair value our mortgage servicing assets at September 30, 2019, and September 30, 2018, along with the valuation techniques, are shown in the following table:

dollars in millions		September 30, 2019	September 30, 2018
Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Discounted cash flow	Prepayment speed	12.06 - 62.96% (14.53%)	8.27 - 55.15% (9.35%)
	Discount rate	7.50 - 10.00% (7.53%)	7.50 - 10.00% (7.54%)
	Servicing cost	$62 - $4,375 ($67.67)	$62 - $4,375 ($67.76)

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

The amortization of residential servicing assets is determined in proportion to, and over the period of, the estimated net residential servicing income. The amortization of servicing assets for September 30, 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 $15 million for the nine-month period ended September 30, 2019, and $10 million for the nine-month period ended September 30, 2018. This fee income was offset by $5 million of amortization for the nine-month period ended September 30, 2019, and $3 million for the nine-month period ended September 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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Securities (Tables)

9 Months Ended

Sep. 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.

	September 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	$	273	—		1		$	272	$	150	—		$	3	$	147
States and political subdivisions	4		—		—		4		7		—		—		7
Agency residential collateralized mortgage obligations	13,473		$	123	$	59	13,537		14,315		$	20	373		13,962
Agency residential mortgage-backed securities	1,925		41		7		1,959		2,128		13		36		2,105
Agency commercial mortgage-backed securities	6,440		174		19		6,595		3,300		19		132		3,187
Other securities	7		4		—		11		17		3		—		20
Total securities available for sale	$	22,122	$	342	$	86	$	22,378	$	19,917	$	55	$	544	$	19,428
HELD-TO-MATURITY SECURITIES
Agency residential collateralized mortgage obligations	$	6,072	$	38	$	41	$	6,069	$	7,021	$	2	$	254	$	6,769
Agency residential mortgage-backed securities	432		6		—		438		490		—		14		476
Agency commercial mortgage-backed securities	3,959		114		1		4,072		3,996		2		133		3,865
Asset-backed securities	12		—		—		12		—		—		—		—
Other securities	15		—		—		15		12		—		—		12
Total held-to-maturity securities	$	10,490	$	158	$	42	$	10,606	$	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 September 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
September 30, 2019
Securities available for sale:
U.S Treasury, agencies, and corporations	$	50	—		(a)	$	45	1		$	95	1
Agency residential collateralized mortgage obligations	2,434		$	8		3,919		$	51	6,353		$	59
Agency residential mortgage-backed securities	100		—		(a)	824		7		924		7
Agency commercial mortgage-backed securities	558		2			1,269		17		1,827		19
Held-to-maturity securities:
Agency residential collateralized mortgage obligations	1,368		7			2,601		34		3,969		41
Agency residential mortgage-backed securities	—		—		(a)	—		—		—		—
Agency commercial mortgage-backed securities	527		1			—		—		527		1
Asset-backed securities	1		—		(a)	—		—		1		—
Other securities	10		—		(a)	—		—		10		—
Total temporarily impaired securities	$	5,048	$	18		$	8,658	$	110	$	13,706	$	128
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 September 30, 2019, gross unrealized losses totaled less than $1 million for U.S. Treasury, agencies, and corporations and agency residential mortgage-backed securities available for sale and less than $1 million for agency residential mortgage-backed securities, asset-backed 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.

September 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	$	321	$	324	$	46	$	46
Due after one through five years	16,927		17,042		7,532		7,567
Due after five through ten years	4,866		5,004		2,912		2,993
Due after ten years	8		8		—		—
Total	$	22,122	$	22,378	$	10,490	$	10,606

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Earnings Per Common Share (Tables)

9 Months Ended

Sep. 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 September 30,				Nine months ended September 30,
dollars in millions, except per share amounts	2019		2018		2019		2018
EARNINGS
Income (loss) from continuing operations	$	413	$	482	$	1,242	$	1,377
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		—
Income (loss) from continuing operations attributable to Key	413		482		1,242		1,377
Less: Dividends on Preferred Stock	30		14		70		43
Income (loss) from continuing operations attributable to Key common shareholders	383		468		1,172		1,334
Income (loss) from discontinued operations, net of taxes	3		—		6		5
Net income (loss) attributable to Key common shareholders	$	386	$	468	$	1,178	$	1,339
WEIGHTED-AVERAGE COMMON SHARES
Weighted-average Common Shares outstanding (000)	988,319		1,036,479		998,268		1,048,397
Effect of Common Share options and other stock awards	10,009		13,497		9,632		14,419
Weighted-average Common Shares and potential Common Shares outstanding (000) (a)	998,328		1,049,976		1,007,900		1,062,816
EARNINGS PER COMMON SHARE
Income (loss) from continuing operations attributable to Key common shareholders	$	.39	$	.45	$	1.17	$	1.27
Income (loss) from discontinued operations, net of taxes	—		—		.01		.01
Net income (loss) attributable to Key common shareholders (b)	.39		.45		1.18		1.28
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution	$	.38	$	.45	$	1.16	$	1.26
Income (loss) from discontinued operations, net of taxes — assuming dilution	—		—		.01		.01
Net income (loss) attributable to Key common shareholders — assuming dilution (b)	.39		.45		1.17		1.26

(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 - Loans by Category (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	$ 92,760	$ 89,552
Loans, net of allowance	91,867	88,669
Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	67,479	66,310
Consumer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	25,281	23,242
Commercial and Industrial [Member] | Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	48,362	45,753
Commercial Mortgage [Member] | Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	13,167	14,285
Construction [Member] | Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	1,480	1,666
Commercial Credit Card [Member] | Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	147	132
Commercial Real Estate [Member] | Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	14,647	15,951
Commercial Lease Financing [Member] | Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	4,470	4,606
Commercial lease financing includes receivables held as collateral for secured borrowing	10	10
Real Estate - Residential Mortgage [Member] | Consumer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	6,527	5,513
Home Equity Loans [Member] | Consumer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	10,456	11,142
Residential - Prime Loans [Member] | Consumer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	16,983	16,655
Consumer Direct Loans [Member] | Consumer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	2,789	1,809
Consumer Credit Card [Member] | Consumer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	1,105	1,144
Consumer Indirect Loans [Member] | Consumer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	4,404	3,634
Education Lending [Member] | Discontinued Operations [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of allowance	$ 915	$ 1,100

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Asset Quality - Breakdown of Individually Impaired Loans (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	$ 321		$ 321		$ 238
With related allowance recorded, Recorded Investment	196		196		209
Recorded Investment	517		517		447
With no related allowance recorded, Unpaid Principal Balance	400		400		311
With related allowance recorded, Unpaid Principal Balance	238		238		245
Unpaid Principal Balance	638		638		556
Specific Allowance	31		31		19
Average Recorded Investment	492	$ 474	482	$ 440
Commercial Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	270		270		182
With related allowance recorded, Recorded Investment	37		37		46
With no related allowance recorded, Unpaid Principal Balance	339		339		245
With related allowance recorded, Unpaid Principal Balance	50		50		50
Specific Allowance	15		15		6
Average Recorded Investment	278	257	267	228
Consumer Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	51		51		56
With related allowance recorded, Recorded Investment	159		159		163
With no related allowance recorded, Unpaid Principal Balance	61		61		66
With related allowance recorded, Unpaid Principal Balance	188		188		195
Specific Allowance	16		16		13
Average Recorded Investment	214	217	215	212
Commercial and Industrial [Member] | Commercial Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	199		199		118
With related allowance recorded, Recorded Investment	35		35		44
With no related allowance recorded, Unpaid Principal Balance	257		257		175
With related allowance recorded, Unpaid Principal Balance	48		48		47
Specific Allowance	15		15		5
Average Recorded Investment	209	209	198	184
Commercial Mortgage [Member] | Commercial Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	71		71		64
With related allowance recorded, Recorded Investment	2		2		2
With no related allowance recorded, Unpaid Principal Balance	82		82		70
With related allowance recorded, Unpaid Principal Balance	2		2		3
Specific Allowance	0		0		1
Average Recorded Investment	69	48	69	44
Commercial Real Estate Loans [Member] | Commercial Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	71		71		64
With related allowance recorded, Recorded Investment	2		2		2
With no related allowance recorded, Unpaid Principal Balance	82		82		70
With related allowance recorded, Unpaid Principal Balance	2		2		3
Specific Allowance	0		0		1
Average Recorded Investment	69	48	69	44
Real Estate - Residential Mortgage [Member] | Consumer Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	3		3		4
With related allowance recorded, Recorded Investment	40		40		45
With no related allowance recorded, Unpaid Principal Balance	3		3		5
With related allowance recorded, Unpaid Principal Balance	61		61		70
Specific Allowance	4		4		3
Average Recorded Investment	45	49	46	49
Home Equity Loans [Member] | Consumer Loans [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded Investment	46		46		49
With related allowance recorded, Recorded Investment	80		80		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	127	126	127	122
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	32		32		34
With no related allowance recorded, Unpaid Principal Balance	4		4		4
With related allowance recorded, Unpaid Principal Balance	33		33		34
Specific Allowance	3		3		2
Average Recorded Investment	35	35	35	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	$ 3	$ 3	$ 3	$ 3

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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		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Derivatives, Fair Value [Line Items]
Net Gains (Losses) Recognized in OCI	$ 81	$ (34)	$ 453	$ (165)
Net Gains (Losses) Reclassified From OCI Into Income	(9)	(17)	(53)	(44)
Interest Income [Member] | Interest Rate [Member] | Cash Flow Hedges [Member]
Derivatives, Fair Value [Line Items]
Net Gains (Losses) Recognized in OCI	86	(32)	471	(178)
Net Gains (Losses) Reclassified From OCI Into Income	(8)	(15)	(51)	(42)
Interest Expense [Member] | Interest Rate [Member] | Cash Flow Hedges [Member]
Derivatives, Fair Value [Line Items]
Net Gains (Losses) Recognized in OCI	(2)	(1)	(5)	3
Net Gains (Losses) Reclassified From OCI Into Income	(1)	(2)	(2)	(2)
Underwriting Discounts Fees And Commissions [Member] | Interest Rate [Member] | Cash Flow Hedges [Member]
Derivatives, Fair Value [Line Items]
Net Gains (Losses) Recognized in OCI	(4)	1	(10)	2
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	(2)	(3)	8
Net Gains (Losses) Reclassified From OCI Into Income	$ 0	$ 0	$ 0	$ 0

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Accumulated Other Comprehensive Income - Reclassifications Out of AOCI (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other income	[1]	$ 27	$ 23	$ 54	$ 143
Interest income — Loans		1,073	1,025	3,221	2,965
Interest expense — Long-term debt		(114)	(108)	(354)	(302)
Income (loss) from continuing operations before income taxes		491	576	1,505	1,652
Income taxes		70	87	239	252
Other expense		547	553	1,699	1,733
INCOME (LOSS) FROM CONTINUING OPERATIONS		413	482	1,242	1,377
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains (Losses) on Securities Available for Sale [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other income		15	0	15	0
Income (loss) from continuing operations before income taxes		15	0	15	0
Income taxes		4	0	4	0
INCOME (LOSS) FROM CONTINUING OPERATIONS		11	0	11	0
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		(9)	(17)	(53)	(44)
Income taxes		(3)	(3)	(13)	(10)
INCOME (LOSS) FROM CONTINUING OPERATIONS		(6)	(14)	(40)	(34)
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)	(10)	(12)
Income taxes		(1)	(2)	(3)	(4)
INCOME (LOSS) FROM CONTINUING OPERATIONS		(2)	(2)	(7)	(8)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Net Pension and Postretirement Benefit Costs [Member] | Amortization of Losses [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other expense		(4)	(4)	(11)	(12)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Net Pension and Postretirement Benefit Costs [Member] | Amortization of Unrecognized Prior Service Credit [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other expense		1	0	1	0
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		(8)	(15)	(51)	(42)
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		$ (1)	$ (2)	$ (2)	$ (2)

[1] For the three and nine months ended September 30, 2019, net securities gains (losses) totaled $15 million. For the three and nine months ended September 30, 2018, net securities gains (losses) totaled less than $1 million. For the three and nine months ended September 30, 2019, and September 30, 2018, Key did not have any impairment losses related to securities.

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Leases - Summary of Cash Flows Related to Leases (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Cash paid for amounts included in the measurement of lease liabilities: (a)
Operating cash flows from operating leases	$ 37,000,000	$ 110,000,000
Financing cash flows from finance leases	0	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	17,000,000	61,000,000
Net gain recognized from sale leaseback transaction	14,000,000	14,000,000
Finance leases	0	$ 0
Proceeds from sale leaseback transaction	$ 16,000,000

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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	9 Months Ended
	Sep. 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	64	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	3.059%
KeyCorp Capital II [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Trust Preferred Securities, Net of Discount	$ 108
Common Stock	4
Principal Amount of of Debentures, Net of Discount	$ 112
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	$ 142
Common Stock	4
Principal Amount of of Debentures, Net of Discount	$ 146
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	3.548%
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	3.429%
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	3.546%
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	4.346%
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	4.346%
Business Trusts [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Trust Preferred Securities, Net of Discount	$ 473	454
Common Stock	17	17
Principal Amount of of Debentures, Net of Discount	$ 490	$ 471
Interest Rate of Trust Preferred Securities and Debentures	5.427%	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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Mortgage Servicing Assets - Schedule of Range and Weighted-Average of Significant Unobservable Inputs (Details) - Discounted Cash Flow [Member] - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 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	1.46%	2.38%
Loan assumption rate	0.01%	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	11.50%	15.00%
Escrow earn rate	2.36%	3.94%
Loan assumption rate	3.37%	3.22%
Commercial Mortgage Backed Securities [Member] | Weighted Average [Member]
Servicing Assets at Fair Value [Line Items]
Expected defaults	1.13%	1.16%
Residual cash flows discount rate	9.30%	9.10%
Escrow earn rate	2.02%	3.07%
Loan assumption rate	1.38%	1.34%
Residential Mortgage Backed Securities [Member] | Minimum [Member]
Servicing Assets at Fair Value [Line Items]
Expected defaults	7.50%	7.50%
Prepayment speed	12.06%	8.27%
Servicing cost	$ 62,000,000	$ 62,000,000
Residential Mortgage Backed Securities [Member] | Maximum [Member]
Servicing Assets at Fair Value [Line Items]
Expected defaults	10.00%	10.00%
Prepayment speed	62.96%	55.15%
Servicing cost	$ 4,375,000,000	$ 4,375,000,000
Residential Mortgage Backed Securities [Member] | Weighted Average [Member]
Servicing Assets at Fair Value [Line Items]
Expected defaults	7.53%	7.54%
Prepayment speed	14.53%	9.35%
Servicing cost	$ 67,670,000	$ 67,760,000

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Derivatives and Hedging Activities - Additional Information (Details) $ in Millions	9 Months Ended
	Sep. 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	$ 116
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	1,000
Derivative liabilities not designated as hedging instruments after effects of bilateral collateral and master netting agreements, and a reserve for potential future losses	322
Reclassify of after-tax net losses on derivative instruments from AOCI	$ 120
Length of time hedge in cash flow hedge	12 months
Reclassification of net losses related to terminated cash flow hedges from AOCI to income	$ 5
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	$ 25
Cash collateral netted against derivative assets	212	$ 33
Collateral netted against derivative liabilities	51	37
Gross exposure on derivatives, after taking into account the effects of bilateral collateral and master netting agreements	551
Net exposure on derivatives, after taking into account, the effects of bilateral collateral and master netting agreements	230
Over-collateralization on derivatives to broker-dealers and banks, after the application of master netting agreements and collateral	225
Additional collateral held in the form of securities	5
Default reserve associated with uncollateralized contracts	7
Gross exposure on derivatives after taking into account effects of master netting agreements	955
Net exposure on derivatives with clients after application of master netting agreements collateral and related reserve	913
Net liability position totaled	6	$ 1
Banking Subsidiary [Member]
Credit Derivatives [Line Items]
Net liability position totaled	100
Derivative assets included in net liability position	101
Derivative liabilities included in net liability position	(201)
Cash and securities collateral posted	$ 109
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)	$ 4	$ 4

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Securities - Details of Securities (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
SECURITIES AVAILABLE FOR SALE
Amortized Cost	$ 22,122	$ 19,917
Gross Unrealized Gains	342	55
Gross Unrealized Losses	86	544
Fair Value	22,378	19,428
HELD-TO-MATURITY SECURITIES
Amortized Cost	10,490	11,519
Gross Unrealized Gains	158	4
Gross Unrealized Losses	42	401
Fair Value	10,606	11,122
US Treasury and Government [Member]
SECURITIES AVAILABLE FOR SALE
Amortized Cost	273	150
Gross Unrealized Gains	0	0
Gross Unrealized Losses	1	3
Fair Value	272	147
US States and Political Subdivisions Debt Securities [Member]
SECURITIES AVAILABLE FOR SALE
Amortized Cost	4	7
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	4	7
Collateralized Mortgage Obligations [Member]
SECURITIES AVAILABLE FOR SALE
Amortized Cost	13,473	14,315
Gross Unrealized Gains	123	20
Gross Unrealized Losses	59	373
Fair Value	13,537	13,962
HELD-TO-MATURITY SECURITIES
Amortized Cost	6,072	7,021
Gross Unrealized Gains	38	2
Gross Unrealized Losses	41	254
Fair Value	6,069	6,769
Residential Mortgage Backed Securities [Member]
SECURITIES AVAILABLE FOR SALE
Amortized Cost	1,925	2,128
Gross Unrealized Gains	41	13
Gross Unrealized Losses	7	36
Fair Value	1,959	2,105
HELD-TO-MATURITY SECURITIES
Amortized Cost	432	490
Gross Unrealized Gains	6	0
Gross Unrealized Losses	0	14
Fair Value	438	476
Asset-backed Securities [Member]
HELD-TO-MATURITY SECURITIES
Amortized Cost	12	0
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	12	0
Other Securities [Member]
SECURITIES AVAILABLE FOR SALE
Amortized Cost	7	17
Gross Unrealized Gains	4	3
Gross Unrealized Losses	0	0
Fair Value	11	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	6,440	3,300
Gross Unrealized Gains	174	19
Gross Unrealized Losses	19	132
Fair Value	6,595	3,187
HELD-TO-MATURITY SECURITIES
Amortized Cost	3,959	3,996
Gross Unrealized Gains	114	2
Gross Unrealized Losses	1	133
Fair Value	$ 4,072	$ 3,865

XML

Derivatives and Hedging Activities - Fair Value of Derivative Assets by Type (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Credit Derivatives [Line Items]
Derivative assets before collateral	$ 1,355	$ 564
Less: Related collateral	212	33
Total derivative assets	1,143	531
Interest Rate [Member]
Credit Derivatives [Line Items]
Derivative assets before collateral	1,103	308
Foreign Exchange [Member]
Credit Derivatives [Line Items]
Derivative assets before collateral	58	60
Commodity [Member]
Credit Derivatives [Line Items]
Derivative assets before collateral	178	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

XML

Leases

9 Months Ended

Sep. 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 one 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 September 30, 2019		Nine months ended September 30, 2019
Operating lease cost	$	34	$	102
Finance lease cost:
Amortization of right-of-use assets	1		2
Variable lease cost	8		19
Total lease cost (a), (b)	$	43	$	123

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

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

Cash flows related to leases are summarized as follows:

in millions	Three months ended September 30, 2019		Nine months ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities: (a)
Operating cash flows from operating leases	$	37	$	110
Financing cash flows from finance leases	—		1
Right-of-use assets obtained in exchange for lease obligations: (b)
Operating leases	$	17	$	61
Net gain recognized from sale leaseback transaction (c)	$	14	$	14

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

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

(c) During the third quarter of 2019, we entered into a sale leaseback transaction related to one branch which resulted in total proceeds of $16 million.

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

in millions	Balance sheet classification	September 30, 2019
Operating lease assets	Accrued income and other assets	$	675
Operating lease liabilities	Accrued expense and other liabilities	758
Finance leases:
Property and equipment, gross	Premises and equipment	28
Accumulated depreciation	Premises and equipment	(17		)
Property and equipment, net		11
Finance lease liabilities	Long-term debt	14

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

	September 30, 2019
Weighted-average remaining lease term:
Operating leases	7.6
Finance leases	6.28
Weighted-average discount rate:
Operating leases	3.27	%
Finance leases	3.94	%

Maturities of lease liabilities are summarized as follows:

in millions	Operating Leases		Finance Leases		Total
2019	$	36	$	1	$	37
2020	143		3		146
2021	130		3		133
2022	115		2		117
2023	99		2		101
Thereafter	341		5		346
Total lease payments	864		16		880
Less imputed interest	106		2		108
Total	$	758	$	14	$	772

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 September 30, 2019		Nine months ended September 30, 2019
Sales-type and direct financing leases
Interest income on lease receivable	$	31	$	92
Interest income related to accretion of unguaranteed residual asset	3		9
Interest income on deferred fees and costs	—		—
Total sales-type and direct financing lease income	34		101
Operating leases
Operating lease income related to lease payments	34		100
Other operating leasing gains	8		23
Total operating lease income and other leasing gains	42		123
Total lease income	$	76	$	224

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	September 30, 2019
Lease receivables	$	3,632
Unearned income	(339		)
Unguaranteed residual value	450
Deferred fees and costs	14
Net investment in sales-type and direct financing leases	$	3,757

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 $305 million at September 30, 2019.

At September 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	$	307
2020	1,077
2021	802
2022	557
2023	360
Thereafter	624
Total lease payments	$	3,727

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

in millions	Operating lease payments
2019	$	33
2020	126
2021	109
2022	92
2023	77
Thereafter	222
Total lease payments	$	659

The carrying amount of operating lease assets at September 30, 2019, was $915 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 one 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 September 30, 2019		Nine months ended September 30, 2019
Operating lease cost	$	34	$	102
Finance lease cost:
Amortization of right-of-use assets	1		2
Variable lease cost	8		19
Total lease cost (a), (b)	$	43	$	123

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

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

Cash flows related to leases are summarized as follows:

in millions	Three months ended September 30, 2019		Nine months ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities: (a)
Operating cash flows from operating leases	$	37	$	110
Financing cash flows from finance leases	—		1
Right-of-use assets obtained in exchange for lease obligations: (b)
Operating leases	$	17	$	61
Net gain recognized from sale leaseback transaction (c)	$	14	$	14

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

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

(c) During the third quarter of 2019, we entered into a sale leaseback transaction related to one branch which resulted in total proceeds of $16 million.

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

in millions	Balance sheet classification	September 30, 2019
Operating lease assets	Accrued income and other assets	$	675
Operating lease liabilities	Accrued expense and other liabilities	758
Finance leases:
Property and equipment, gross	Premises and equipment	28
Accumulated depreciation	Premises and equipment	(17		)
Property and equipment, net		11
Finance lease liabilities	Long-term debt	14

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

	September 30, 2019
Weighted-average remaining lease term:
Operating leases	7.6
Finance leases	6.28
Weighted-average discount rate:
Operating leases	3.27	%
Finance leases	3.94	%

Maturities of lease liabilities are summarized as follows:

in millions	Operating Leases		Finance Leases		Total
2019	$	36	$	1	$	37
2020	143		3		146
2021	130		3		133
2022	115		2		117
2023	99		2		101
Thereafter	341		5		346
Total lease payments	864		16		880
Less imputed interest	106		2		108
Total	$	758	$	14	$	772

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 September 30, 2019		Nine months ended September 30, 2019
Sales-type and direct financing leases
Interest income on lease receivable	$	31	$	92
Interest income related to accretion of unguaranteed residual asset	3		9
Interest income on deferred fees and costs	—		—
Total sales-type and direct financing lease income	34		101
Operating leases
Operating lease income related to lease payments	34		100
Other operating leasing gains	8		23
Total operating lease income and other leasing gains	42		123
Total lease income	$	76	$	224

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	September 30, 2019
Lease receivables	$	3,632
Unearned income	(339		)
Unguaranteed residual value	450
Deferred fees and costs	14
Net investment in sales-type and direct financing leases	$	3,757

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 $305 million at September 30, 2019.

At September 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	$	307
2020	1,077
2021	802
2022	557
2023	360
Thereafter	624
Total lease payments	$	3,727

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

in millions	Operating lease payments
2019	$	33
2020	126
2021	109
2022	92
2023	77
Thereafter	222
Total lease payments	$	659

The carrying amount of operating lease assets at September 30, 2019, was $915 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 one 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 September 30, 2019		Nine months ended September 30, 2019
Operating lease cost	$	34	$	102
Finance lease cost:
Amortization of right-of-use assets	1		2
Variable lease cost	8		19
Total lease cost (a), (b)	$	43	$	123

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

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

Cash flows related to leases are summarized as follows:

in millions	Three months ended September 30, 2019		Nine months ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities: (a)
Operating cash flows from operating leases	$	37	$	110
Financing cash flows from finance leases	—		1
Right-of-use assets obtained in exchange for lease obligations: (b)
Operating leases	$	17	$	61
Net gain recognized from sale leaseback transaction (c)	$	14	$	14

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

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

(c) During the third quarter of 2019, we entered into a sale leaseback transaction related to one branch which resulted in total proceeds of $16 million.

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

in millions	Balance sheet classification	September 30, 2019
Operating lease assets	Accrued income and other assets	$	675
Operating lease liabilities	Accrued expense and other liabilities	758
Finance leases:
Property and equipment, gross	Premises and equipment	28
Accumulated depreciation	Premises and equipment	(17		)
Property and equipment, net		11
Finance lease liabilities	Long-term debt	14

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

	September 30, 2019
Weighted-average remaining lease term:
Operating leases	7.6
Finance leases	6.28
Weighted-average discount rate:
Operating leases	3.27	%
Finance leases	3.94	%

Maturities of lease liabilities are summarized as follows:

in millions	Operating Leases		Finance Leases		Total
2019	$	36	$	1	$	37
2020	143		3		146
2021	130		3		133
2022	115		2		117
2023	99		2		101
Thereafter	341		5		346
Total lease payments	864		16		880
Less imputed interest	106		2		108
Total	$	758	$	14	$	772

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 September 30, 2019		Nine months ended September 30, 2019
Sales-type and direct financing leases
Interest income on lease receivable	$	31	$	92
Interest income related to accretion of unguaranteed residual asset	3		9
Interest income on deferred fees and costs	—		—
Total sales-type and direct financing lease income	34		101
Operating leases
Operating lease income related to lease payments	34		100
Other operating leasing gains	8		23
Total operating lease income and other leasing gains	42		123
Total lease income	$	76	$	224

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	September 30, 2019
Lease receivables	$	3,632
Unearned income	(339		)
Unguaranteed residual value	450
Deferred fees and costs	14
Net investment in sales-type and direct financing leases	$	3,757

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 $305 million at September 30, 2019.

At September 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	$	307
2020	1,077
2021	802
2022	557
2023	360
Thereafter	624
Total lease payments	$	3,727

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

in millions	Operating lease payments
2019	$	33
2020	126
2021	109
2022	92
2023	77
Thereafter	222
Total lease payments	$	659

The carrying amount of operating lease assets at September 30, 2019, was $915 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 one 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 September 30, 2019		Nine months ended September 30, 2019
Operating lease cost	$	34	$	102
Finance lease cost:
Amortization of right-of-use assets	1		2
Variable lease cost	8		19
Total lease cost (a), (b)	$	43	$	123

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

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

Cash flows related to leases are summarized as follows:

in millions	Three months ended September 30, 2019		Nine months ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities: (a)
Operating cash flows from operating leases	$	37	$	110
Financing cash flows from finance leases	—		1
Right-of-use assets obtained in exchange for lease obligations: (b)
Operating leases	$	17	$	61
Net gain recognized from sale leaseback transaction (c)	$	14	$	14

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

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

(c) During the third quarter of 2019, we entered into a sale leaseback transaction related to one branch which resulted in total proceeds of $16 million.

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

in millions	Balance sheet classification	September 30, 2019
Operating lease assets	Accrued income and other assets	$	675
Operating lease liabilities	Accrued expense and other liabilities	758
Finance leases:
Property and equipment, gross	Premises and equipment	28
Accumulated depreciation	Premises and equipment	(17		)
Property and equipment, net		11
Finance lease liabilities	Long-term debt	14

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

	September 30, 2019
Weighted-average remaining lease term:
Operating leases	7.6
Finance leases	6.28
Weighted-average discount rate:
Operating leases	3.27	%
Finance leases	3.94	%

Maturities of lease liabilities are summarized as follows:

in millions	Operating Leases		Finance Leases		Total
2019	$	36	$	1	$	37
2020	143		3		146
2021	130		3		133
2022	115		2		117
2023	99		2		101
Thereafter	341		5		346
Total lease payments	864		16		880
Less imputed interest	106		2		108
Total	$	758	$	14	$	772

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 September 30, 2019		Nine months ended September 30, 2019
Sales-type and direct financing leases
Interest income on lease receivable	$	31	$	92
Interest income related to accretion of unguaranteed residual asset	3		9
Interest income on deferred fees and costs	—		—
Total sales-type and direct financing lease income	34		101
Operating leases
Operating lease income related to lease payments	34		100
Other operating leasing gains	8		23
Total operating lease income and other leasing gains	42		123
Total lease income	$	76	$	224

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	September 30, 2019
Lease receivables	$	3,632
Unearned income	(339		)
Unguaranteed residual value	450
Deferred fees and costs	14
Net investment in sales-type and direct financing leases	$	3,757

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 $305 million at September 30, 2019.

At September 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	$	307
2020	1,077
2021	802
2022	557
2023	360
Thereafter	624
Total lease payments	$	3,727

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

in millions	Operating lease payments
2019	$	33
2020	126
2021	109
2022	92
2023	77
Thereafter	222
Total lease payments	$	659

The carrying amount of operating lease assets at September 30, 2019, was $915 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 one 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 September 30, 2019		Nine months ended September 30, 2019
Operating lease cost	$	34	$	102
Finance lease cost:
Amortization of right-of-use assets	1		2
Variable lease cost	8		19
Total lease cost (a), (b)	$	43	$	123

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

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

Cash flows related to leases are summarized as follows:

in millions	Three months ended September 30, 2019		Nine months ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities: (a)
Operating cash flows from operating leases	$	37	$	110
Financing cash flows from finance leases	—		1
Right-of-use assets obtained in exchange for lease obligations: (b)
Operating leases	$	17	$	61
Net gain recognized from sale leaseback transaction (c)	$	14	$	14

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

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

(c) During the third quarter of 2019, we entered into a sale leaseback transaction related to one branch which resulted in total proceeds of $16 million.

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

in millions	Balance sheet classification	September 30, 2019
Operating lease assets	Accrued income and other assets	$	675
Operating lease liabilities	Accrued expense and other liabilities	758
Finance leases:
Property and equipment, gross	Premises and equipment	28
Accumulated depreciation	Premises and equipment	(17		)
Property and equipment, net		11
Finance lease liabilities	Long-term debt	14

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

	September 30, 2019
Weighted-average remaining lease term:
Operating leases	7.6
Finance leases	6.28
Weighted-average discount rate:
Operating leases	3.27	%
Finance leases	3.94	%

Maturities of lease liabilities are summarized as follows:

in millions	Operating Leases		Finance Leases		Total
2019	$	36	$	1	$	37
2020	143		3		146
2021	130		3		133
2022	115		2		117
2023	99		2		101
Thereafter	341		5		346
Total lease payments	864		16		880
Less imputed interest	106		2		108
Total	$	758	$	14	$	772

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 September 30, 2019		Nine months ended September 30, 2019
Sales-type and direct financing leases
Interest income on lease receivable	$	31	$	92
Interest income related to accretion of unguaranteed residual asset	3		9
Interest income on deferred fees and costs	—		—
Total sales-type and direct financing lease income	34		101
Operating leases
Operating lease income related to lease payments	34		100
Other operating leasing gains	8		23
Total operating lease income and other leasing gains	42		123
Total lease income	$	76	$	224

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	September 30, 2019
Lease receivables	$	3,632
Unearned income	(339		)
Unguaranteed residual value	450
Deferred fees and costs	14
Net investment in sales-type and direct financing leases	$	3,757

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 $305 million at September 30, 2019.

At September 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	$	307
2020	1,077
2021	802
2022	557
2023	360
Thereafter	624
Total lease payments	$	3,727

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

in millions	Operating lease payments
2019	$	33
2020	126
2021	109
2022	92
2023	77
Thereafter	222
Total lease payments	$	659

The carrying amount of operating lease assets at September 30, 2019, was $915 million.

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Basis of Presentation and Accounting Policies

9 Months Ended

Sep. 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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Fair Value Measurements

9 Months Ended

Sep. 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 September 30, 2019, and December 31, 2018.

	September 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	—		$	744	—		$	744		—		$	578	—		$	578
States and political subdivisions	—		51		—		51			—		60		—		60
Other mortgage-backed securities	—		89		—		89			—		164		—		164
Other securities	—		50		—		50			—		22		—		22
Total trading account securities	—		934		—		934			—		824		—		824
Commercial loans	—		29		—		29			—		25		—		25
Total trading account assets	—		963		—		963			—		849		—		849
Securities available for sale:
U.S. Treasury, agencies and corporations	—		272		—		272			—		147		—		147
States and political subdivisions	—		4		—		4			—		7		—		7
Agency residential collateralized mortgage obligations	—		13,537		—		13,537			—		13,962		—		13,962
Agency residential mortgage-backed securities	—		1,959		—		1,959			—		2,105		—		2,105
Agency commercial mortgage-backed securities	—		6,595		—		6,595			—		3,187		—		3,187
Other securities	—		—		$	11	11			—		—		$	20	20
Total securities available for sale	—		22,367		11		22,378			—		19,408		20		19,428
Other investments:
Principal investments:
Direct	—		—		1		1			—		—		1		1
Indirect (measured at NAV) (a)	—		—		—		73			—		—		—		96
Total principal investments	—		—		1		74			—		—		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		90			—		1		8		115
Loans, net of unearned income (residential)	—		—		3		3			—		—		3		3
Loans held for sale (residential)	—		100		1		101			—		54		—		54
Derivative assets:
Interest rate	—		1,233		3		1,236			—		410		5		415
Foreign exchange	60		41		—		101			$	70	36		—		106
Commodity	—		281		—		281			—		333		—		333
Credit	—		—		1		1			—		1		—		1
Other	—		10		6		16			—		6		3		9
Derivative assets	60		1,565		10		1,635			70		786		8		864
Netting adjustments (b)	—		—		—		(492		)	—		—		—		(333		)
Total derivative assets	60		1,565		10		1,143			70		786		8		531
Accrued income and other assets	—		—		—		—			—		—		—		—
Total assets on a recurring basis at fair value	$	60	$	24,995	$	33	$	24,678		$	70	$	21,098	$	39	$	20,980
LIABILITIES MEASURED ON A RECURRING BASIS
Bank notes and other short-term borrowings:
Short positions	$	31	$	669	—		$	700		$	14	$	530	—		$	544
Derivative liabilities:
Interest rate	—		268		—		268			—		297		—		297
Foreign exchange	56		40		—		96			58		37		—		95
Commodity	—		272		—		272			—		323		—		323
Credit	—		1		$	6	7			—		1		—		1
Other	—		10		—		10			—		7		—		7
Derivative liabilities	56		591		6		653			58		665		—		723
Netting adjustments (b)	—		—		—		(331		)	—		—		—		(337		)
Total derivative liabilities	56		591		6		322			58		665		—		386
Accrued expense and other liabilities	—		—		—		—			—		—		—		—
Total liabilities on a recurring basis at fair value	$	87	$	1,260	$	6	$	1,022		$	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 September 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 September 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 September 30, 2019, as well as financial support provided for the three and nine months ended September 30, 2019, and September 30, 2018.

					Financial support provided
					Three months ended September 30,						Nine months ended September 30,
	September 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)	73		$	24	$	—	—		—	—	$	2	—	$	1	—
Total	$	74	$	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 September 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 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 given default • Internal risk assessments of customers and the remaining term of the underlying transactions The fair value represents an estimate of the amount that the risk participation counterparty would need to pay/receive as of the measurement date based on the probability of customer default on the swap transaction and the fair value of the underlying customer swap. Therefore, higher (lower) loss probabilities, internal risk ratings, and probabilities of default would have resulted in a higher (lower) 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 nine months ended September 30, 2019, and September 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
Nine months ended September 30, 2019
Securities available for sale
Other securities	$	20		$	15	—				—			—			—		—		—			(24		)		$	11		—
Other investments
Principal investments
Direct	1			—		—				$	—		$	—		—		—		—			—				1			—
Equity investments
Direct	7			—		(1		)	(a)	—			—			—		—		$	1		—				7			—
Loans held for sale (residential)	—			—		—				—			(1		)	—		$	2	—			—				1			—
Loans, net of unearned income (residential)	3			—		—				—			—			—		—		—			—				3			—
Derivative instruments (b)
Interest rate	5			—		$	4		(c)	—			—			—		—		2		(d)	$	(8	)	(d)	3			—
Credit	—			—		(5		)		(1		)	1			—		—		—			—				(5		)	—
Other (e)	3			—		—				—			—			—		3		—			—				6			—
Three months ended September 30, 2019
Securities available for sale
Other securities	$	11		$	—	—				—			—			—		—		—			$	—			$	11		—
Other investments
Principal investments
Direct	1			—		$	—			—			—			—		—		—			—				1			—
Equity investments
Direct	7			—		—				—			—			—		—		—			—				7			—
Loans held for sale (residential)	—			—		—				—			—			—		1		—			—				1			—
Loans, net of unearned income (residential)	3			—		—				—			—			—		—		—			—				3			—
Derivative instruments (b)
Interest rate	4			—		1			(c)	—			—			—		—		—		(d)	(2		)	(d)	3			—
Credit	(1		)	—		(5		)		—			1			$	—	—		—			—				(5		)	—
Other (e)	6			—		—				—			—			—		—		—			—				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
Nine months ended September 30, 2018
Securities available for sale
Other securities	$	20		—	—				—		—			—		—			—			—				$	20	—
Other investments
Principal investments
Direct	13			—	(1		)	(a)	$	1	$	(1	)	—		—			—			—				12		$	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		)	—		—			6		(d)	$	(6	)	(d)	6		—
Credit	1			—	(26		)	(c)	—		—			$	25	—			—			—				—		—
Other (e)	3			—	—				—		—			—		$	(1	)	—			—				2		—
Three months ended September 30, 2018
Securities available for sale
Other securities	$	20		—	—				—		—			—		—			—			—				$	20	—
Other investments
Principal investments
Direct	13			—	$	(1	)	(a)	$	—	$	—		—		—			—			—				12		$	(1	)	(a)
Equity investments
Direct	7			—	—				—		—			—		—			—			—				7		—
Loans held for sale (residential)	—			—	—				—		—			—		—			—			—				—		—
Loans, net of unearned income (residential)	3			—	—				—		—			—		$	—		—			—				3		—
Derivative instruments (b)
Interest rate	5			—	—			(c)	—		—			—		—			$	2	(d)	(1		)		6		—
Credit	(9		)	—	(6		)	(c)	—		—			$	15	—			—			—				—		—
Other (e)	3			—	—				—		—			—		(1		)	—			—				2		—

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

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

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

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

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

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis in accordance with GAAP. The adjustments to fair value generally result from the application of accounting guidance that requires assets and liabilities to be recorded at the lower of cost or fair value, or assessed for impairment. There were no liabilities measured at fair value on a nonrecurring basis at September 30, 2019, and December 31, 2018.

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

	September 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	—	$	—	$	41	$	41	—	—	$	42	$	42
Other intangible assets	—	—		47		47		—	—	—		—
Accrued income and other assets	—	—		55		55		—	—	16		16
Total assets on a nonrecurring basis at fair value	—	$	—	$	143	$	143	—	—	$	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, student loans, and residential mortgage loans held for sale	Through a quarterly analysis of our loan portfolios held for sale, which include both performing and nonperforming commercial loans, student loans, and residential mortgage loans not measured at fair value on a recurring basis, 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 September 30, 2019, and December 31, 2018, the carrying amount of equity investments under this method was $134 million and $107 million, respectively. Impairment of less than $1 million was recorded for the three months ended September 30, 2019.	Level 3
Customer contract intangible assets	The fair value of other intangible assets is measured using the present value of expected future cash flows and comparing that value against the current carrying value. Expected future cash flows are discounted to the present value using a discounted cash flow model that incorporates an appropriate risk premium. For certain other intangible assets, we employ a replacement cost approach.	Level 3
Mortgage Servicing Assets	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 assets and liabilities:

September 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 (15.89%)
					Marketability discount	N/A (30.00%)
					Volatility factor	N/A (41.00%)
Other investments:(a)
Equity investments
Direct	7			Discounted cash flows	Discount rate	13.87 - 16.38% (14.48%)
					Marketability discount	N/A (30.00%)
					Volatility factor	N/A (48.00%)
Loans held for sale (residential)	1			Market comparable pricing	Comparability factor	74.50-98.00 (86.78%)
Loans, net of unearned income (residential)	3			Market comparable pricing	Comparability factor	78.57 - 95.75% (89.53%)
Derivative instruments:
Interest rate	3			Discounted cash flows	Probability of default	.02 - 100% (2.20%)
					Internal risk rating	1 - 19 (9.071)
					Loss given default	0 - 1 (.492)
Credit (assets)	1			Discounted cash flows	Probability of default	.02 - 100% (1.7%)
					Internal risk rating	1 - 19 (10.071)
					Loss given default	0 - 1 (.499)
Credit (liabilities)	(6		)	Discounted cash flows	Probability of default	.02 - 100% (8.79%)
					Internal risk rating	1 - 19 (7.714)
					Loss given default	0 - 1 (.388)
Other(d)	6			Discounted cash flows	Loan closing rates	33.56 - 99.90% (80.58%)
Nonrecurring
Impaired loans	41			Fair value of underlying collateral	Discount rate	0 - 100.00% (51.00%)
Other intangible assets (f)	47			Discounted cash flows	Discount rate	N/A (15.00%)
Accrued income and other assets:
OREO and other Level 3 assets(e)	7			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 September 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 $48 million pertaining to mortgage servicing assets. Refer to Note 8 (“Mortgage Servicing Assets”) for significant unobservable inputs pertaining to these assets.

(f) For the three months ended September 30, 2019, an impairment of $5 million was recorded related to certain customer contract intangible 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 September 30, 2019, and December 31, 2018, are shown in the following tables. Assets and liabilities are further arranged by measurement category.

	September 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)	$	963	$	—	$	963	—		—		—				$	963
Other investments (b)	620		—		—		$	538	$	82	—				620
Loans, net of unearned income (residential) (d)	3		—		—		3		—		—				3
Loans held for sale (residential) (b)	101		—		100		1		—		—				101
Derivative assets - trading (b)	1,027		60		1,355		10		—		$	(398	)	(f)	1,027
Fair value - OCI
Securities available for sale (b)	22,378		—		22,367		$	11	—		—				22,378
Derivative assets - hedging (b)(g)	116		—		210		—		—		(94		)	(f)	116
Amortized cost
Held-to-maturity securities (c)	10,490		—		10,606		—		—		—				10,606
Loans, net of unearned income (d)	91,864		—		—		90,651		—		—				90,651
Loans held for sale (b)	1,497		—		—		1,497		—		—				1,497
Other
Cash and short-term investments (a)	3,987		3,987		—		—		—		—				3,987
LIABILITIES (by measurement category)
Fair value - net income
Derivative liabilities - trading (b)	$	322	$	56	$	563	6		—		$	(303	)	(f)	$	322
Fair value - OCI
Derivative liabilities - hedging (b)(g)	—		—		28		—		—		(28		)	(f)	—
Amortized cost
Time deposits (e)	12,494		—		12,586		—		—		—				12,586
Short-term borrowings (a)	882		31		851		—		—		—				882
Long-term debt (e)	14,470		13,915		1,070		—		—		—				14,985
Other
Deposits with no stated maturity (a)	99,155		—		99,155		—		—		—				99,155

	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.

DIscontinued assets — 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 $903 million ($767 million at fair value) at September 30, 2019, and $1.1 billion ($890 million at fair value) at December 31, 2018;

• Portfolio loans at fair value of $2 million at September 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.

XML

Fair Value Measurements (Tables)

9 Months Ended

Sep. 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 September 30, 2019, and December 31, 2018.

	September 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	—		$	744	—		$	744		—		$	578	—		$	578
States and political subdivisions	—		51		—		51			—		60		—		60
Other mortgage-backed securities	—		89		—		89			—		164		—		164
Other securities	—		50		—		50			—		22		—		22
Total trading account securities	—		934		—		934			—		824		—		824
Commercial loans	—		29		—		29			—		25		—		25
Total trading account assets	—		963		—		963			—		849		—		849
Securities available for sale:
U.S. Treasury, agencies and corporations	—		272		—		272			—		147		—		147
States and political subdivisions	—		4		—		4			—		7		—		7
Agency residential collateralized mortgage obligations	—		13,537		—		13,537			—		13,962		—		13,962
Agency residential mortgage-backed securities	—		1,959		—		1,959			—		2,105		—		2,105
Agency commercial mortgage-backed securities	—		6,595		—		6,595			—		3,187		—		3,187
Other securities	—		—		$	11	11			—		—		$	20	20
Total securities available for sale	—		22,367		11		22,378			—		19,408		20		19,428
Other investments:
Principal investments:
Direct	—		—		1		1			—		—		1		1
Indirect (measured at NAV) (a)	—		—		—		73			—		—		—		96
Total principal investments	—		—		1		74			—		—		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		90			—		1		8		115
Loans, net of unearned income (residential)	—		—		3		3			—		—		3		3
Loans held for sale (residential)	—		100		1		101			—		54		—		54
Derivative assets:
Interest rate	—		1,233		3		1,236			—		410		5		415
Foreign exchange	60		41		—		101			$	70	36		—		106
Commodity	—		281		—		281			—		333		—		333
Credit	—		—		1		1			—		1		—		1
Other	—		10		6		16			—		6		3		9
Derivative assets	60		1,565		10		1,635			70		786		8		864
Netting adjustments (b)	—		—		—		(492		)	—		—		—		(333		)
Total derivative assets	60		1,565		10		1,143			70		786		8		531
Accrued income and other assets	—		—		—		—			—		—		—		—
Total assets on a recurring basis at fair value	$	60	$	24,995	$	33	$	24,678		$	70	$	21,098	$	39	$	20,980
LIABILITIES MEASURED ON A RECURRING BASIS
Bank notes and other short-term borrowings:
Short positions	$	31	$	669	—		$	700		$	14	$	530	—		$	544
Derivative liabilities:
Interest rate	—		268		—		268			—		297		—		297
Foreign exchange	56		40		—		96			58		37		—		95
Commodity	—		272		—		272			—		323		—		323
Credit	—		1		$	6	7			—		1		—		1
Other	—		10		—		10			—		7		—		7
Derivative liabilities	56		591		6		653			58		665		—		723
Netting adjustments (b)	—		—		—		(331		)	—		—		—		(337		)
Total derivative liabilities	56		591		6		322			58		665		—		386
Accrued expense and other liabilities	—		—		—		—			—		—		—		—
Total liabilities on a recurring basis at fair value	$	87	$	1,260	$	6	$	1,022		$	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 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 September 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 September 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 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, student loans, and residential mortgage loans held for sale	Through a quarterly analysis of our loan portfolios held for sale, which include both performing and nonperforming commercial loans, student loans, and residential mortgage loans not measured at fair value on a recurring basis, 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 September 30, 2019, and December 31, 2018, the carrying amount of equity investments under this method was $134 million and $107 million, respectively. Impairment of less than $1 million was recorded for the three months ended September 30, 2019.	Level 3
Customer contract intangible assets	The fair value of other intangible assets is measured using the present value of expected future cash flows and comparing that value against the current carrying value. Expected future cash flows are discounted to the present value using a discounted cash flow model that incorporates an appropriate risk premium. For certain other intangible assets, we employ a replacement cost approach.	Level 3
Mortgage Servicing Assets	Refer to Note 8. Mortgage Servicing Assets	Level 3

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

Asset/liability class	Valuation technique	Valuation hierarchy classification(s)
Derivatives (continued)	We have customized derivative instruments and risk participations that are classified as Level 3 instruments. These derivative positions are valued using internally developed models, with inputs consisting of available market data, such as: • Bond spreads and asset values The unobservable internally derived assumptions include: • Loss given default • Internal risk assessments of customers and the remaining term of the underlying transactions The fair value represents an estimate of the amount that the risk participation counterparty would need to pay/receive as of the measurement date based on the probability of customer default on the swap transaction and the fair value of the underlying customer swap. Therefore, higher (lower) loss probabilities, internal risk ratings, and probabilities of default would have resulted in a higher (lower) 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 September 30, 2019, as well as financial support provided for the three and nine months ended September 30, 2019, and September 30, 2018.

					Financial support provided
					Three months ended September 30,						Nine months ended September 30,
	September 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)	73		$	24	$	—	—		—	—	$	2	—	$	1	—
Total	$	74	$	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 September 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 nine months ended September 30, 2019, and September 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
Nine months ended September 30, 2019
Securities available for sale
Other securities	$	20		$	15	—				—			—			—		—		—			(24		)		$	11		—
Other investments
Principal investments
Direct	1			—		—				$	—		$	—		—		—		—			—				1			—
Equity investments
Direct	7			—		(1		)	(a)	—			—			—		—		$	1		—				7			—
Loans held for sale (residential)	—			—		—				—			(1		)	—		$	2	—			—				1			—
Loans, net of unearned income (residential)	3			—		—				—			—			—		—		—			—				3			—
Derivative instruments (b)
Interest rate	5			—		$	4		(c)	—			—			—		—		2		(d)	$	(8	)	(d)	3			—
Credit	—			—		(5		)		(1		)	1			—		—		—			—				(5		)	—
Other (e)	3			—		—				—			—			—		3		—			—				6			—
Three months ended September 30, 2019
Securities available for sale
Other securities	$	11		$	—	—				—			—			—		—		—			$	—			$	11		—
Other investments
Principal investments
Direct	1			—		$	—			—			—			—		—		—			—				1			—
Equity investments
Direct	7			—		—				—			—			—		—		—			—				7			—
Loans held for sale (residential)	—			—		—				—			—			—		1		—			—				1			—
Loans, net of unearned income (residential)	3			—		—				—			—			—		—		—			—				3			—
Derivative instruments (b)
Interest rate	4			—		1			(c)	—			—			—		—		—		(d)	(2		)	(d)	3			—
Credit	(1		)	—		(5		)		—			1			$	—	—		—			—				(5		)	—
Other (e)	6			—		—				—			—			—		—		—			—				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
Nine months ended September 30, 2018
Securities available for sale
Other securities	$	20		—	—				—		—			—		—			—			—				$	20	—
Other investments
Principal investments
Direct	13			—	(1		)	(a)	$	1	$	(1	)	—		—			—			—				12		$	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		)	—		—			6		(d)	$	(6	)	(d)	6		—
Credit	1			—	(26		)	(c)	—		—			$	25	—			—			—				—		—
Other (e)	3			—	—				—		—			—		$	(1	)	—			—				2		—
Three months ended September 30, 2018
Securities available for sale
Other securities	$	20		—	—				—		—			—		—			—			—				$	20	—
Other investments
Principal investments
Direct	13			—	$	(1	)	(a)	$	—	$	—		—		—			—			—				12		$	(1	)	(a)
Equity investments
Direct	7			—	—				—		—			—		—			—			—				7		—
Loans held for sale (residential)	—			—	—				—		—			—		—			—			—				—		—
Loans, net of unearned income (residential)	3			—	—				—		—			—		$	—		—			—				3		—
Derivative instruments (b)
Interest rate	5			—	—			(c)	—		—			—		—			$	2	(d)	(1		)		6		—
Credit	(9		)	—	(6		)	(c)	—		—			$	15	—			—			—				—		—
Other (e)	3			—	—				—		—			—		(1		)	—			—				2		—

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

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

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

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

(e)

Amounts represent Level 3 interest rate lock commitments.

Assets and Liabilities Measured at Fair Value on Nonrecurring Basis

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

	September 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	—	$	—	$	41	$	41	—	—	$	42	$	42
Other intangible assets	—	—		47		47		—	—	—		—
Accrued income and other assets	—	—		55		55		—	—	16		16
Total assets on a nonrecurring basis at fair value	—	$	—	$	143	$	143	—	—	$	58	$	58

Quantitative Information about Level 3 Fair Value Measurements

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

September 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 (15.89%)
					Marketability discount	N/A (30.00%)
					Volatility factor	N/A (41.00%)
Other investments:(a)
Equity investments
Direct	7			Discounted cash flows	Discount rate	13.87 - 16.38% (14.48%)
					Marketability discount	N/A (30.00%)
					Volatility factor	N/A (48.00%)
Loans held for sale (residential)	1			Market comparable pricing	Comparability factor	74.50-98.00 (86.78%)
Loans, net of unearned income (residential)	3			Market comparable pricing	Comparability factor	78.57 - 95.75% (89.53%)
Derivative instruments:
Interest rate	3			Discounted cash flows	Probability of default	.02 - 100% (2.20%)
					Internal risk rating	1 - 19 (9.071)
					Loss given default	0 - 1 (.492)
Credit (assets)	1			Discounted cash flows	Probability of default	.02 - 100% (1.7%)
					Internal risk rating	1 - 19 (10.071)
					Loss given default	0 - 1 (.499)
Credit (liabilities)	(6		)	Discounted cash flows	Probability of default	.02 - 100% (8.79%)
					Internal risk rating	1 - 19 (7.714)
					Loss given default	0 - 1 (.388)
Other(d)	6			Discounted cash flows	Loan closing rates	33.56 - 99.90% (80.58%)
Nonrecurring
Impaired loans	41			Fair value of underlying collateral	Discount rate	0 - 100.00% (51.00%)
Other intangible assets (f)	47			Discounted cash flows	Discount rate	N/A (15.00%)
Accrued income and other assets:
OREO and other Level 3 assets(e)	7			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 September 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 $48 million pertaining to mortgage servicing assets. Refer to Note 8 (“Mortgage Servicing Assets”) for significant unobservable inputs pertaining to these assets.

(f)

For the three months ended September 30, 2019, an impairment of $5 million was recorded related to certain customer contract intangible 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 September 30, 2019, and December 31, 2018, are shown in the following tables. Assets and liabilities are further arranged by measurement category.

	September 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)	$	963	$	—	$	963	—		—		—				$	963
Other investments (b)	620		—		—		$	538	$	82	—				620
Loans, net of unearned income (residential) (d)	3		—		—		3		—		—				3
Loans held for sale (residential) (b)	101		—		100		1		—		—				101
Derivative assets - trading (b)	1,027		60		1,355		10		—		$	(398	)	(f)	1,027
Fair value - OCI
Securities available for sale (b)	22,378		—		22,367		$	11	—		—				22,378
Derivative assets - hedging (b)(g)	116		—		210		—		—		(94		)	(f)	116
Amortized cost
Held-to-maturity securities (c)	10,490		—		10,606		—		—		—				10,606
Loans, net of unearned income (d)	91,864		—		—		90,651		—		—				90,651
Loans held for sale (b)	1,497		—		—		1,497		—		—				1,497
Other
Cash and short-term investments (a)	3,987		3,987		—		—		—		—				3,987
LIABILITIES (by measurement category)
Fair value - net income
Derivative liabilities - trading (b)	$	322	$	56	$	563	6		—		$	(303	)	(f)	$	322
Fair value - OCI
Derivative liabilities - hedging (b)(g)	—		—		28		—		—		(28		)	(f)	—
Amortized cost
Time deposits (e)	12,494		—		12,586		—		—		—				12,586
Short-term borrowings (a)	882		31		851		—		—		—				882
Long-term debt (e)	14,470		13,915		1,070		—		—		—				14,985
Other
Deposits with no stated maturity (a)	99,155		—		99,155		—		—		—				99,155

	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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Basis of Presentation and Accounting Policies (Tables)

9 Months Ended

Sep. 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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Asset Quality - Financing Receivable Credit Quality Indicators (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	$ 92,760	$ 89,552
Consumer Portfolio Segment, PCI [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	299	334
Consumer Portfolio Segment, PCI [Member] | Residential - Prime Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	296	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	24,982	22,908
Consumer Portfolio Segment Excluding PCI [Member] | Residential - Prime Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	16,687	16,324
Consumer Portfolio Segment Excluding PCI [Member] | Consumer Direct Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	2,786	1,806
Consumer Portfolio Segment Excluding PCI [Member] | Consumer Credit Card [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1,105	1,144
Consumer Portfolio Segment Excluding PCI [Member] | Consumer Indirect Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	4,404	3,634
Commercial Portfolio Segment Excluding PCI Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	67,281	66,069
Commercial Portfolio Segment Excluding PCI Loans [Member] | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	65,090	63,904
Commercial Portfolio Segment Excluding PCI Loans [Member] | Criticized (Accruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1,851	1,922
Commercial Portfolio Segment Excluding PCI Loans [Member] | Criticized (Nonaccruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	340	243
Commercial Portfolio Segment Excluding PCI Loans [Member] | Commercial and Industrial [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	48,312	45,692
Commercial Portfolio Segment Excluding PCI Loans [Member] | Commercial and Industrial [Member] | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	46,604	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	1,470	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	238	152
Commercial Portfolio Segment Excluding PCI Loans [Member] | RE Commercial [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	13,020	14,107
Commercial Portfolio Segment Excluding PCI Loans [Member] | RE Commercial [Member] | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	12,608	13,672
Commercial Portfolio Segment Excluding PCI Loans [Member] | RE Commercial [Member] | Criticized (Accruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	319	354
Commercial Portfolio Segment Excluding PCI Loans [Member] | RE Commercial [Member] | Criticized (Nonaccruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	93	81
Commercial Portfolio Segment Excluding PCI Loans [Member] | Construction [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1,479	1,664
Commercial Portfolio Segment Excluding PCI Loans [Member] | Construction [Member] | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1,447	1,537
Commercial Portfolio Segment Excluding PCI Loans [Member] | Construction [Member] | Criticized (Accruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	30	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	4,470	4,606
Commercial Portfolio Segment Excluding PCI Loans [Member] | Commercial Leases [Member] | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	4,431	4,557
Commercial Portfolio Segment Excluding PCI Loans [Member] | Commercial Leases [Member] | Criticized (Accruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	32	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	198	241
Commercial Portfolio Segment, PCI [Member] | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	143	164
Commercial Portfolio Segment, PCI [Member] | Criticized (Accruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	55	77
Commercial Portfolio Segment, PCI [Member] | Commercial and Industrial [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	50	61
Commercial Portfolio Segment, PCI [Member] | Commercial and Industrial [Member] | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	30	37
Commercial Portfolio Segment, PCI [Member] | Commercial and Industrial [Member] | Criticized (Accruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	20	24
Commercial Portfolio Segment, PCI [Member] | RE Commercial [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	147	178
Commercial Portfolio Segment, PCI [Member] | RE Commercial [Member] | Pass [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	112	125
Commercial Portfolio Segment, PCI [Member] | RE Commercial [Member] | Criticized (Accruing) [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	35	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	114	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	113	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	14,037	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	10,343	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	1,116	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	503	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	2,075	1,647
FICO Score, 660 to 749 [Member] | Consumer Portfolio Segment, PCI [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	95	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	94	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	7,695	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	4,736	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	912	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	1,566	1,320
FICO Score, Less than 660 [Member] | Consumer Portfolio Segment, PCI [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	84	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	83	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	2,224	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	1,315	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	210	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	121	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	578	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	1,026	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	293	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	548	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	$ 185	$ 102

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Asset Quality - Post-Modification Outstanding Recorded Investment by Concession Type for Our Commercial Accruing and Nonaccruing TDRs (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total commercial and consumer TDRs	$ 20	$ 60	$ 57	$ 124
Commercial Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Extension of Maturity Date	6	20	11	20
Payment or Covenant Modification/Deferment	0	26	1	46
Bankruptcy Plan Modification	0	0	0	7
Increase in new commitment or new money	2	0	12	0
Total	8	46	24	73
Consumer Loans [Member]
Financing Receivable, Troubled Debt Restructuring [Line Items]
Interest rate reduction	4	4	12	22
Other	8	10	21	29
Total	$ 12	$ 14	$ 33	$ 51

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Mortgage Servicing Assets - Changes in Carrying Amount of Mortgage Servicing Assets (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Commercial Mortgage Backed Securities [Member]
Servicing Asset at Amortized Cost, Balance [Roll Forward]
Balance at beginning of period	$ 509	$ 451	$ 502	$ 412
Servicing retained from loan sales	30	25	71	81
Purchases	10	17	33	50
Amortization	(29)	(25)	(86)	(75)
Temporary impairments	(2)	0	(2)	0
Balance at end of period	518	468	518	468
Fair value at end of period	681	672	681	672
Residential Mortgage Backed Securities [Member]
Servicing Asset at Amortized Cost, Balance [Roll Forward]
Balance at beginning of period	39	34	37	31
Servicing retained from loan sales	5	2	9	7
Purchases	0	0	0	0
Amortization	(3)	(1)	(5)	(3)
Balance at end of period	41	35	41	35
Fair value at end of period	$ 43	$ 49	$ 43	$ 49

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Securities - Securities by Maturity (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Investments, Debt and Equity Securities [Abstract]
Amortized Cost of Securities Available for sale, Due in one year or less	$ 321
Amortized Cost of Securities Available for sale, Due after one through five years	16,927
Amortized Cost of Securities Available for sale, Due after five through ten years	4,866
Amortized Cost of Securities Available for sale, Due after ten years	8
Amortized Cost	22,122	$ 19,917
Fair Value of Securities Available for sale, Due in one year or less	324
Fair Value of Securities Available for sale, Due after one through five years	17,042
Fair Value of Securities Available for sale, Due after five through ten years	5,004
Fair Value of Securities Available for sale, Due after ten years	8
Total Fair Value of Securities Available For Sale	22,378	19,428
Amortized Cost of Held-to-Maturity Securities, Due in one year or less	46
Amortized Cost of Held-to-Maturity Securities, Due after one through five years	7,532
Amortized Cost of Held-to-Maturity Securities, Due after five through ten years	2,912
Amortized Cost of Held-to-Maturity Securities, Due after ten years	0
Amortized Cost	10,490	11,519
Fair Value of Held-to-Maturity Securities, Due in one year or less	46
Fair Value of Held-to-Maturity Securities, Due after one through five years	7,567
Fair Value of Held-to-Maturity Securities, Due after five through ten years	2,993
Fair Value of Held-to-Maturity Securities, Due after ten years	0
Total Fair Value of Held-to-Maturity Securities	$ 10,606	$ 11,122

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Fair Value Measurements - Fair Value Disclosures of Financial Instruments (Details) - USD ($)		Sep. 30, 2019	Dec. 31, 2018
ASSETS
Trading account assets		$ 963,000,000	$ 849,000,000
Loans held for sale			0
Derivative assets		1,143,000,000	531,000,000
Securities available for sale		22,378,000,000	19,428,000,000
Amortized Cost		10,490,000,000	11,519,000,000
Held-to-maturity securities		10,606,000,000	11,122,000,000
Loans, net of allowance		91,867,000,000	88,669,000,000
Loans held for sale	[1]	1,598,000,000	1,227,000,000
LIABILITIES
Long-term debt		14,470,000,000	13,732,000,000
Carrying Amount [Member]
ASSETS
Trading account assets		963,000,000	849,000,000
Other investments		620,000,000	666,000,000
Loans, net of allowance		3,000,000	3,000,000
Loans held for sale		101,000,000	54,000,000
Securities available for sale		22,378,000,000	19,428,000,000
Amortized Cost		10,490,000,000	11,519,000,000
Loans, net of allowance		91,864,000,000	88,666,000,000
Loans held for sale		1,497,000,000	1,173,000,000
Cash and short-term investments		3,987,000,000	3,240,000,000
LIABILITIES
Time deposits		12,494,000,000	13,245,000,000
Short-term borrowings		882,000,000	863,000,000
Long-term debt		14,470,000,000	13,732,000,000
Deposits with no stated maturity		99,155,000,000	94,064,000,000
Fair Value [Member]
ASSETS
Trading account assets		963,000,000	849,000,000
Other investments		620,000,000	666,000,000
Loans, net of allowance		3,000,000	3,000,000
Loans held for sale		101,000,000	54,000,000
Securities available for sale		22,378,000,000	19,428,000,000
Held-to-maturity securities			11,122,000,000
Loans, net of allowance		90,651,000,000	86,224,000,000
Loans held for sale		1,497,000,000	1,173,000,000
Cash and short-term investments		3,987,000,000	3,240,000,000
LIABILITIES
Time deposits		12,586,000,000	13,331,000,000
Short-term borrowings		882,000,000	863,000,000
Long-term debt		14,985,000,000	13,787,000,000
Deposits with no stated maturity		99,155,000,000	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		3,987,000,000	3,240,000,000
LIABILITIES
Time deposits		0	0
Short-term borrowings		31,000,000	14,000,000
Long-term debt		13,915,000,000	12,576,000,000
Deposits with no stated maturity		0	0
Fair Value [Member] | Level 2 [Member]
ASSETS
Trading account assets		963,000,000	849,000,000
Other investments		0	1,000,000
Loans, net of allowance		0	0
Loans held for sale		100,000,000	54,000,000
Securities available for sale		22,367,000,000	19,408,000,000
Held-to-maturity securities		10,606,000,000	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		12,586,000,000	13,331,000,000
Short-term borrowings		851,000,000	849,000,000
Long-term debt		1,070,000,000	1,211,000,000
Deposits with no stated maturity		99,155,000,000	94,064,000,000
Fair Value [Member] | Level 3 [Member]
ASSETS
Trading account assets		0	0
Other investments		538,000,000	559,000,000
Loans, net of allowance		3,000,000	3,000,000
Loans held for sale		1,000,000	0
Securities available for sale		11,000,000	20,000,000
Held-to-maturity securities		0	0
Loans, net of allowance		90,651,000,000	86,224,000,000
Loans held for sale		1,497,000,000	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		82,000,000	106,000,000
Derivatives Designated as Hedging Instruments [Member] | Carrying Amount [Member]
ASSETS
Derivative assets		116,000,000	69,000,000
LIABILITIES
Derivative liabilities		0	(9,000,000)
Derivatives Designated as Hedging Instruments [Member] | Fair Value [Member]
ASSETS
Derivative assets		116,000,000	69,000,000
Derivative assets, Netting Adjustment		(94,000,000)	17,000,000
LIABILITIES
Derivative liabilities		0	(9,000,000)
Derivative liabilities, Netting Adjustment		(28,000,000)	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		0	0
Derivatives Designated as Hedging Instruments [Member] | Fair Value [Member] | Level 2 [Member]
ASSETS
Derivative assets		210,000,000	50,000,000
LIABILITIES
Derivative liabilities		28,000,000	(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		1,027,000,000	462,000,000
LIABILITIES
Derivative liabilities		322,000,000	395,000,000
Derivatives Not Designated as Hedging Instruments [Member] | Fair Value [Member]
ASSETS
Derivative assets		1,027,000,000	462,000,000
Derivative assets, Netting Adjustment		(398,000,000)	(350,000,000)
LIABILITIES
Derivative liabilities		322,000,000	395,000,000
Derivative liabilities, Netting Adjustment		(303,000,000)	(338,000,000)
Derivatives Not Designated as Hedging Instruments [Member] | Fair Value [Member] | Level 1 [Member]
ASSETS
Derivative assets		60,000,000	68,000,000
LIABILITIES
Derivative liabilities		56,000,000	58,000,000
Derivatives Not Designated as Hedging Instruments [Member] | Fair Value [Member] | Level 2 [Member]
ASSETS
Derivative assets		1,355,000,000	736,000,000
LIABILITIES
Derivative liabilities		563,000,000	675,000,000
Derivatives Not Designated as Hedging Instruments [Member] | Fair Value [Member] | Level 3 [Member]
ASSETS
Derivative assets		10,000,000	8,000,000
LIABILITIES
Derivative liabilities		$ 6,000,000	$ 0

[1] Total loans held for sale include real estate — residential mortgage loans held for sale at fair value of $101 million at September 30, 2019, and $54 million at December 31, 2018.

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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		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	$ 17	$ 15	$ 43	$ 60
Interest Rate [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	15	10	28	32
Foreign Exchange [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	11	10	32	32
Commodity [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	2	0	5	6
Credit [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	(13)	(7)	(27)	(24)
Other Credit Derivatives [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	2	2	5	14
Corporate Services Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	24	18	64	68
Corporate Services Income [Member] | Interest Rate [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	16	8	31	28
Corporate Services Income [Member] | Foreign Exchange [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	11	10	32	32
Corporate Services Income [Member] | Commodity [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	2	0	5	6
Corporate Services Income [Member] | Credit [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	(5)	0	(4)	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)	5	1	5	1
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)	5	1	5	1
Other Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	(12)	(4)	(26)	(9)
Other Income [Member] | Interest Rate [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	(1)	2	(3)	4
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)	(7)	(23)	(26)
Other Income [Member] | Other Credit Derivatives [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	$ (3)	$ 1	$ 0	$ 13

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Derivatives and Hedging Activities - Effect of Fair Value and Cash Flow Hedges on Income (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Derivative Instruments, Gain (Loss) [Line Items]
Interest expense — Long-term debt		$ (114)	$ (108)	$ (354)	$ (302)
Interest income — Loans		1,073	1,025	3,221	2,965
Deposits		(227)	(140)	(652)	(343)
Other income	[1]	27	23	54	143
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		(75)	41	(320)	134
Recognized on derivatives designated as hedging instruments		72	(46)	296	(140)
Net income (expense) recognized on fair value hedges		(3)	(5)	(24)	(6)
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		(1)	(2)	(2)	(2)
Net income (expense) recognized on cash flow hedges		(1)	(2)	(2)	(2)
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		(8)	(15)	(51)	(42)
Net income (expense) recognized on cash flow hedges		(8)	(15)	(51)	(42)
Interest Rate [Member] | Interest Expense, Deposits [Member] | Fair Value Hedging [Member]
Gain (Loss) on Fair Value Hedges Recognized in Earnings [Abstract]
Recognized on hedged items		0	0	(1)	1
Recognized on derivatives designated as hedging instruments		0	0	0	0
Net income (expense) recognized on fair value hedges		0	0	(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 nine months ended September 30, 2019, net securities gains (losses) totaled $15 million. For the three and nine months ended September 30, 2018, net securities gains (losses) totaled less than $1 million. For the three and nine months ended September 30, 2019, and September 30, 2018, Key did not have any impairment losses related to securities.

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Accumulated Other Comprehensive Income - Changes in AOCI (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance			$ 15,596
Other comprehensive income before reclassification, net of income taxes	$ 164	$ (97)	941	$ (424)
Amounts reclassified from AOCI, net of income taxes	(3)	16	36	42
Other amounts reclassified from AOCI, net of income taxes				(5)
Total other comprehensive income (loss), net of tax	161	(81)	977	(387)
Ending Balance	17,116		17,116
Unrealized Gains (Losses) on Securities Available for Sale [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	102	(527)	(373)	(311)
Other comprehensive income before reclassification, net of income taxes	104	(72)	579	(288)
Amounts reclassified from AOCI, net of income taxes	(11)	0	(11)	0
Other amounts reclassified from AOCI, net of income taxes				0
Total other comprehensive income (loss), net of tax	93	(72)	568	(288)
Ending Balance	195	(599)	195	(599)
Unrealized Gains (Losses) on Derivative Financial Instruments [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	268	(166)	(50)	(86)
Other comprehensive income before reclassification, net of income taxes	62	(26)	346	(126)
Amounts reclassified from AOCI, net of income taxes	6	14	40	34
Other amounts reclassified from AOCI, net of income taxes				0
Total other comprehensive income (loss), net of tax	68	(12)	386	(92)
Ending Balance	336	(178)	336	(178)
Foreign Currency Translation Adjustment [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(10)	(7)	(14)	9
Other comprehensive income before reclassification, net of income taxes	0	1	4	(10)
Amounts reclassified from AOCI, net of income taxes	0	0	0	0
Other amounts reclassified from AOCI, net of income taxes				(5)
Total other comprehensive income (loss), net of tax	0	1	4	(15)
Ending Balance	(10)	(6)	(10)	(6)
Net Pension and Postretirement Benefit Costs [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(362)	(385)	(381)	(391)
Other comprehensive income before reclassification, net of income taxes	(2)	0	12	0
Amounts reclassified from AOCI, net of income taxes	2	2	7	8
Other amounts reclassified from AOCI, net of income taxes				0
Total other comprehensive income (loss), net of tax	0	2	19	8
Ending Balance	(362)	(383)	(362)	(383)
AOCI Attributable to Parent [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(2)	(1,085)	(818)	(779)
Total other comprehensive income (loss), net of tax	161	(81)	977	(387)
Ending Balance	$ 159	$ (1,166)	$ 159	$ (1,166)

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Leases - Components of Lease Expense and Income (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Leases [Abstract]
Operating lease cost	$ 34	$ 102
Finance lease cost:
Amortization of right-of-use assets	1	2
Variable lease cost	8	19
Total lease cost	43	123
Interest on lease liabilities (less than $1 million)	1	1
Short-term lease cost (less than $1 million)	$ 1	$ 1

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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		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Defined Benefit Plan Disclosure [Line Items]
Interest cost on PBO	$ 11	$ 10	$ 34	$ 30
Expected return on plan assets	(12)	(13)	(36)	(39)
Amortization of losses	4	4	11	12
Net pension/postretirement benefit cost	$ 3	$ 1	$ 9	$ 3

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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]	Series G 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]	Retained Earnings [Member] Series G 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						$ 1,450	$ 1,257	6,315	11,262					(3,910)	(1,166)	2
Other amounts reclassified from AOCI, net of income taxes	$ (5)								5
Net income (loss)	1,382								1,382							0
Other comprehensive income (loss)	(387)														(387)
Deferred compensation								16
Cash dividends declared on common shares									(415)
Cash dividends declared on preferred stock										$ (20)	$ (23)
Issuance of Preferred Stock (in shares)						425,000
Shares issued						$ 425		(13)
Open market common share repurchases (in shares)							(38,806,000)
Open market Common Share repurchases														(820)
Employee equity compensation program Common Share repurchases (in shares)							(2,271,000)
Employee equity compensation program Common Share repurchases														(47)
Common shares reissued (returned) for stock options and other employee benefit plans, shares							6,280,000
Common Shares reissued (returned) for stock options and other employee benefit plans								(23)						107
Ending Balance, Preferred Shares (in shares) at Sep. 30, 2018						946,000
Ending Balance, Common Shares (in shares) at Sep. 30, 2018							1,034,287,000
Ending Balance at Sep. 30, 2018						$ 1,450	$ 1,257	6,315	11,262					(3,910)	(1,166)	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, Preferred Shares (in shares) at Jun. 30, 2018						521,000
Beginning Balance, Common Shares (in shares) at Jun. 30, 2018							1,058,944,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance						$ 1,450	$ 1,257	6,315	11,262					(3,910)	(1,166)	2
Other amounts reclassified from AOCI, net of income taxes									0
Net income (loss)	482								482							0
Other comprehensive income (loss)	(81)														(81)
Deferred compensation								4
Cash dividends declared on common shares									(176)
Cash dividends declared on preferred stock										(7)	(7)
Issuance of Preferred Stock (in shares)						425,000
Shares issued						$ 425		(13)
Open market common share repurchases (in shares)							(25,368,000)
Open market Common Share repurchases														(541)
Employee equity compensation program Common Share repurchases (in shares)							(50,000)
Employee equity compensation program Common Share repurchases														(1)
Common shares reissued (returned) for stock options and other employee benefit plans, shares							761,000
Common Shares reissued (returned) for stock options and other employee benefit plans								9						14
Ending Balance, Preferred Shares (in shares) at Sep. 30, 2018						946,000
Ending Balance, Common Shares (in shares) at Sep. 30, 2018							1,034,287,000
Ending Balance at Sep. 30, 2018						$ 1,450	$ 1,257	6,315	11,262					(3,910)	(1,166)	2
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance						1,450	1,257	6,315	11,262					(3,910)	(1,166)	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	17,116					$ 1,900	$ 1,257	6,287	12,209					(4,696)	159	0
Net income (loss)	1,248								1,248							0
Other comprehensive income (loss)	977														977
Deferred compensation								6
Cash dividends declared on common shares									(525)
Cash dividends declared on preferred stock										(20)	(23)	$ (18)	$ (9)
Issuance of Preferred Stock (in shares)						450,000
Shares issued						$ 450		(15)
Open market common share repurchases (in shares)							(35,400,000)
Open market Common Share repurchases														(594)
Employee equity compensation program Common Share repurchases (in shares)							(1,880,000)
Employee equity compensation program Common Share repurchases								(3)						(33)
Common shares reissued (returned) for stock options and other employee benefit plans, shares							6,315,000
Common Shares reissued (returned) for stock options and other employee benefit plans								(32)						112
Net contribution from (distribution to) noncontrolling interests																(1)
Ending Balance, Preferred Shares (in shares) at Sep. 30, 2019		21,000	500,000	425,000	450,000	1,396,000
Ending Balance, Common Shares (in shares) at Sep. 30, 2019							988,538,000
Ending Balance at Sep. 30, 2019	17,116					$ 1,900	$ 1,257	6,287	12,209					(4,696)	159	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance						$ 1,900	$ 1,257	6,266	12,005					(4,457)	(2)	2
Beginning Balance, Preferred Shares (in shares) at Jun. 30, 2019						1,396,000
Beginning Balance, Common Shares (in shares) at Jun. 30, 2019							1,003,114,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	17,116					$ 1,900	$ 1,257	6,287	12,209					(4,696)	159	0
Net income (loss)	416								416							0
Other comprehensive income (loss)	161														161
Deferred compensation								5
Cash dividends declared on common shares									(182)
Cash dividends declared on preferred stock										$ (7)	$ (8)	$ (6)	$ (9)
Open market common share repurchases (in shares)							(15,075,000)
Open market Common Share repurchases														(248)
Employee equity compensation program Common Share repurchases (in shares)							(2,000)
Employee equity compensation program Common Share repurchases								0						0
Common shares reissued (returned) for stock options and other employee benefit plans, shares							501,000
Common Shares reissued (returned) for stock options and other employee benefit plans								16						9
Net contribution from (distribution to) noncontrolling interests																0
Ending Balance, Preferred Shares (in shares) at Sep. 30, 2019		21,000	500,000	425,000	450,000	1,396,000
Ending Balance, Common Shares (in shares) at Sep. 30, 2019							988,538,000
Ending Balance at Sep. 30, 2019	17,116					$ 1,900	$ 1,257	6,287	12,209					(4,696)	159	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	$ 17,116					$ 1,900	$ 1,257	$ 6,287	$ 12,209					$ (4,696)	$ 159	$ 0

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Consolidated Statements of Income - USD ($) shares in Thousands, $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
INTEREST INCOME
Loans		$ 1,073	$ 1,025	$ 3,221	$ 2,965
Loans held for sale		18	12	46	40
Securities available for sale		136	102	400	294
Held-to-maturity securities		64	72	199	213
Trading account assets		7	7	24	21
Short-term investments		16	15	49	31
Other investments		3	6	11	17
Total interest income		1,317	1,239	3,950	3,581
INTEREST EXPENSE
Deposits		227	140	652	343
Federal funds purchased and securities sold under repurchase agreements		0	1	1	10
Bank notes and other short-term borrowings		4	4	13	17
Long-term debt		114	108	354	302
Total interest expense		345	253	1,020	672
NET INTEREST INCOME		972	986	2,930	2,909
Provision for credit losses		200	62	336	187
Net interest income after provision for credit losses		772	924	2,594	2,722
NONINTEREST INCOME
Trust and investment services income		118	117	355	378
Investment banking and debt placement fees		176	166	449	464
Service charges on deposit accounts		86	85	251	265
Operating lease income and other leasing gains		42	35	123	61
Corporate services income		63	52	171	175
Cards and payments income		69	69	208	202
Corporate-owned life insurance income		32	34	97	98
Consumer mortgage income		14	9	32	23
Mortgage servicing fees		23	19	68	61
Other income	[1]	27	23	54	143
Total noninterest income		650	609	1,808	1,870
NONINTEREST EXPENSE
Personnel		547	553	1,699	1,733
Net occupancy		72	76	217	233
Computer processing		53	52	163	155
Business services and professional fees		43	43	132	135
Equipment		27	27	75	79
Operating lease expense		33	31	91	88
Marketing		26	26	69	77
FDIC assessment		7	21	23	63
Intangible asset amortization		26	23	70	77
OREO expense, net		3	3	10	5
Other expense		102	109	372	318
Total noninterest expense		939	964	2,921	2,963
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		483	569	1,481	1,629
Income taxes		70	87	239	252
INCOME (LOSS) FROM CONTINUING OPERATIONS		413	482	1,242	1,377
Income (loss) from discontinued operations		3	0	6	5
NET INCOME (LOSS)		416	482	1,248	1,382
Less: Net income (loss) attributable to noncontrolling interests		0	0	0	0
NET INCOME (LOSS) ATTRIBUTABLE TO KEY		416	482	1,248	1,382
Income (loss) from continuing operations attributable to Key common shareholders		383	468	1,172	1,334
Net income (loss) attributable to Key common shareholders		$ 386	$ 468	$ 1,178	$ 1,339
Per Common Share:
Income (loss) from continuing operations attributable to Key common shareholders (in usd per share)		$ 0.39	$ 0.45	$ 1.17	$ 1.27
Income (loss) from discontinued operations, net of taxes (in usd per share)		0	0	0.01	0.01
Net income (loss) attributable to Key common shareholders (in usd per share)	[2]	0.39	0.45	1.18	1.28
Per Common Share — assuming dilution:
Income (loss) from continuing operations attributable to Key common shareholders (in usd per share)		0.38	0.45	1.16	1.26
Income (loss) from discontinued operations, net of taxes (in usd per share)		0	0	0.01	0.01
Net income (loss) attributable to Key common shareholders (in usd per share)	[2]	0.39	0.45	1.17	1.26
Cash dividends declared per common share (in usd per share)		$ 0.185	$ 0.17	$ 0.525	$ 0.395
Weighted-average common shares outstanding (000) (in shares)		988,319	1,036,479	998,268	1,048,397
Effect of common share options and other stock awards (in shares)		10,009	13,497	9,632	14,419
Weighted-average common shares and potential common shares outstanding (in shares)	[3]	998,328	1,049,976	1,007,900	1,062,816

[1] For the three and nine months ended September 30, 2019, net securities gains (losses) totaled $15 million. For the three and nine months ended September 30, 2018, net securities gains (losses) totaled less than $1 million. For the three and nine months ended September 30, 2019, and September 30, 2018, Key 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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Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2019

Equity [Abstract]

Changes in AOCI

Our changes in AOCI for the three and nine months ended September 30, 2019, and September 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	579			346			4			12			941
Amounts reclassified from AOCI, net of income taxes (a)	(11		)	40			—			7			36
Net current-period other comprehensive income, net of income taxes	568			386			4			19			977
Balance at September 30, 2019	$	195		$	336		$	(10	)	$	(362	)	$	159
Balance at June 30, 2019	$	102		$	268		$	(10	)	$	(362	)	$	(2	)
Other comprehensive income before reclassification, net of income taxes	104			62			—			(2		)	164
Amounts reclassified from AOCI, net of income taxes (a)	(11		)	6			—			2			(3		)
Net current-period other comprehensive income, net of income taxes	93			68			—			—			161
Balance at September 30, 2019	$	195		$	336		$	(10	)	$	(362	)	$	159
Balance at December 31, 2017	$	(311	)	$	(86	)	$	9		$	(391	)	$	(779	)
Other comprehensive income before reclassification, net of income taxes	(288		)	(126		)	(10		)	—			(424		)
Amounts reclassified from AOCI, net of income taxes (a)	—			34			—			8			42
Other amounts reclassified from AOCI, net of income taxes	—			—			(5		)	—			(5		)
Net current-period other comprehensive income, net of income taxes	(288		)	(92		)	(15		)	8			(387		)
Balance at September 30, 2018	$	(599	)	$	(178	)	$	(6	)	$	(383	)	$	(1,166	)
Balance at June 30, 2018	(527		)	$	(166	)	$	(7	)	$	(385	)	$	(1,085	)
Other comprehensive income before reclassification, net of income taxes	(72		)	(26		)	1			—			(97		)
Amounts reclassified from AOCI, net of income taxes (a)	—			14			—			2			16
Net current-period other comprehensive income, net of income taxes	(72		)	(12		)	1			2			(81		)
Balance at September 30, 2018	$	(599	)	$	(178	)	$	(6	)	$	(383	)	$	(1,166	)

(a)

See table below for details about these reclassifications.

Reclassifications Out of AOCI

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

	Nine months ended September 30,						Affected Line Item in the Statement Where Net Income is Presented
in millions	2019			2018
Unrealized gains (losses) on available for sale securities
Realized gains	$	15		—			Other income
	15			—			Income (loss) from continuing operations before income taxes
	4			—			Income taxes
	$	11		—			Income (loss) from continuing operations
Unrealized gains (losses) on derivative financial instruments
Interest rate	$	(51	)	$	(42	)	Interest income — Loans
Interest rate	(2		)	(2		)	Interest expense — Long-term debt
	(53		)	(44		)	Income (loss) from continuing operations before income taxes
	(13		)	(10		)	Income taxes
	$	(40	)	$	(34	)	Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(11	)	(12		)	Other expense
Amortization of unrecognized prior service credit	1			—			Other expense
	(10		)	(12		)	Income (loss) from continuing operations before income taxes
	(3		)	(4		)	Income taxes
	$	(7	)	(8		)	Income (loss) from continuing operations

	Three months ended September 30,						Affected Line Item in the Statement Where Net Income is Presented
in millions	2019			2018
Unrealized gains (losses) on available for sale securities
Realized gains	$	15		—			Other income
	15			—			Income (loss) from continuing operations before income taxes
	4			—			Income taxes
	$	11		—			Income (loss) from continuing operations
Unrealized gains (losses) on derivative financial instruments
Interest rate	$	(8	)	$	(15	)	Interest income — Loans
Interest rate	(1		)	(2		)	Interest expense — Long-term debt
	(9		)	(17		)	Income (loss) from continuing operations before income taxes
	(3		)	(3		)	Income taxes
	$	(6	)	(14		)	Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(4	)	$	(4	)	Other expense
Amortization of unrecognized prior service credit	1			—			Other expense
	(3		)	(4		)	Income (loss) from continuing operations before income taxes
	(1		)	(2		)	Income taxes
	$	(2	)	(2		)	Income (loss) from continuing operations

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Securities Financing Activities (Tables)

9 Months Ended

Sep. 30, 2019

Banking and Thrift [Abstract]

Summarized Securities Financing Agreements

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

	September 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	$	215	$	(16	)	$	(199	)	—	$	14	$	(14	)	—			—
Total	$	215	$	(16	)	$	(199	)	—	$	14	$	(14	)	—			—
Offsetting of financial liabilities:
Repurchase agreements (c)	$	182	$	(20	)	$	(162	)	—	$	319	$	(14	)	$	(305	)	—
Total	$	182	$	(20	)	$	(162	)	—	$	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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Income Taxes - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Dec. 31, 2018
Income Tax Contingency [Line Items]
Total income tax expense (benefit), rate	14.50%	15.50%
Combined federal and state statutory tax rate			23.70%
Federal deferred tax asset	$ 162		$ 162	$ 222
Valuation allowance	11		11	$ 11
Key Corp [Member]
Income Tax Contingency [Line Items]
Unrecognized tax benefits	32		32
First Niagara Bank, N.A. [Member]
Income Tax Contingency [Line Items]
Allocated bad debt deductions	$ 92		$ 92

XML

Fair Value Measurements - Quantitative Information about Level 3 Fair Value Measurements (Details)	3 Months Ended
	Sep. 30, 2019 USD ($)	Dec. 31, 2018 USD ($)
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale	$ 22,378,000,000	$ 19,428,000,000
Loans held for sale (residential)		0
Derivative assets	1,143,000,000	531,000,000
Mortgage servicing assets excluded from OREO	48,000,000
Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale	22,378,000,000	19,428,000,000
Other investments	90,000,000	115,000,000
Loans held for sale (residential)	101,000,000	54,000,000
Derivative assets	1,143,000,000	531,000,000
Nonrecurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Impaired loans	41,000,000	42,000,000
Other intangible assets	47,000,000	0
Level 3 [Member] | Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale	11,000,000	20,000,000
Other investments	8,000,000	8,000,000
Loans held for sale (residential)	1,000,000	0
Derivative assets	10,000,000	8,000,000
Level 3 [Member] | Nonrecurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Impaired loans	41,000,000	42,000,000
Other intangible assets	47,000,000	0
Valuation Technique, Discounted Cash Flow [Member] | Level 3 [Member] | Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Other investments	7,000,000
Valuation Technique, Discounted Cash Flow [Member] | Level 3 [Member] | Nonrecurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Other intangible assets	$ 47,000,000
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	0.1387
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	0.1638
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	0.1448
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Discount Rate [Member] | Level 3 [Member] | Nonrecurring [Member] | Weighted Average [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Other intangible assets, measurement input	0.1500
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	0.4800
Valuation, Market Comparable Pricing [Member] | Level 3 [Member] | Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Loans held for sale (residential)	$ 1,000,000
Loans, net of unearned income (residential)	$ 3,000,000
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-sale (residential), measurement input	0.7450
Loans, net of unearned income (residential), 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-sale (residential), measurement input	0.9800
Loans, net of unearned income (residential), 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-sale (residential), measurement input	0.8678
Loans, net of unearned income (residential), measurement input	0.8953
Valuation, Fair Value Of Underlying Collateral [Member] | Level 3 [Member] | Nonrecurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Impaired loans	$ 41,000,000	$ 42,000,000
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	1.0000	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	0.5100	0.2100
Valuation, Appraised Value [Member] | Level 3 [Member] | Nonrecurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
OREO and other Level 3 assets	$ 7,000,000
Interest Rate [Member] | Valuation Technique, Discounted Cash Flow [Member] | Level 3 [Member] | Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets	$ 3,000,000
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	0.0220
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	9.071
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 assets	$ 1,000,000
Derivative liabilities	$ (6,000,000)
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 assets, measurement input	0.0002
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 assets, measurement input	1.00
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 assets, measurement input	0.0170
Derivative liabilities, measurement input	0.0879
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 assets, measurement input	1
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 assets, measurement input	19
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 assets, measurement input	10.071
Derivative liabilities, measurement input	7.714
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 assets, measurement input	0
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 assets, measurement input	1
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 assets, measurement input	0.499
Derivative liabilities, measurement input	0.388
Other [Member] | Valuation Technique, Discounted Cash Flow [Member] | Level 3 [Member] | Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets	$ 6,000,000
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	0.3356
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	0.9990
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	0.8058
Other Securities [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale	$ 11,000,000	$ 20,000,000
Other Securities [Member] | Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale	11,000,000	20,000,000
Other Securities [Member] | Level 3 [Member] | Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale	11,000,000	20,000,000
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	$ 11,000,000
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	0.1589
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	0.4100
Principal Investments Direct [Member] | Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Other investments	$ 1,000,000	1,000,000
Principal Investments Direct [Member] | Level 3 [Member] | Recurring [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Other investments	1,000,000	$ 1,000,000
Customer Contracts [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Impairment of intangible assets	$ 5,000,000

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Leases - Summary of Information Pertaining to Lease Term and Weighted-Average Discount Rate (Details)	Sep. 30, 2019
Weighted-average remaining lease term:
Operating leases	7 years 7 months 6 days
Finance leases	6 years 3 months 10 days
Weighted-average discount rate:
Operating leases	3.27%
Finance leases	3.94%

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Asset Quality - Breakdown of Allowance for Loan and Lease Losses and Corresponding Loan Balances (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually Evaluated for Impairment, Allowance, Total ALLL - Including Discontinued Operations	$ 33	$ 21
Collectively Evaluated for Impairment, Allowance, Total ALLL - Including Discontinued Operations	867	871
Purchased Credit Impaired, Allowance, Total ALLL - Including Discontinued Operations	4	5
Loans, Outstanding, Total ALLL - Including Discontinued Operations	93,675	90,625
Individually Evaluated for Impairment, Outstanding, Total ALLL - Including Discontinued Operations	540	470
Collectively Evaluated for Impairment, Outstanding, Total ALLL - Including Discontinued Operations	92,638	89,580
Purchased Credit Impaired, Outstanding, Total ALLL - Including Discontinued Operations	497	575
Continuing Operations [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually Evaluated for Impairment, Allowance	31	19
Collectively Evaluated for Impairment, Allowance	858	859
Purchase Credit Impairment, Allowance	4	5
Total loans	92,760	89,552
Individually Evaluated for Impairment, Outstanding	517	447
Collectively Evaluated for Impairment, Outstanding	91,746	88,530
Purchase Credit Impairment, Outstanding	497	575
Continuing Operations [Member] | Commercial Loans [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually Evaluated for Impairment, Allowance	15	5
Collectively Evaluated for Impairment, Allowance	728	734
Purchase Credit Impairment, Allowance	3	4
Total loans	67,479	66,310
Individually Evaluated for Impairment, Outstanding	306	228
Collectively Evaluated for Impairment, Outstanding	66,975	65,841
Purchase Credit Impairment, Outstanding	198	241
Continuing Operations [Member] | Consumer Loans [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually Evaluated for Impairment, Allowance	16	14
Collectively Evaluated for Impairment, Allowance	130	125
Purchase Credit Impairment, Allowance	1	1
Total loans	25,281	23,242
Individually Evaluated for Impairment, Outstanding	211	219
Collectively Evaluated for Impairment, Outstanding	24,771	22,689
Purchase Credit Impairment, Outstanding	299	334
Discontinued Operations [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually Evaluated for Impairment, Allowance	2	2
Collectively Evaluated for Impairment, Allowance	9	12
Purchase Credit Impairment, Allowance	0	0
Total loans	915	1,073
Individually Evaluated for Impairment, Outstanding	23	23
Collectively Evaluated for Impairment, Outstanding	892	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	15	5
Collectively Evaluated for Impairment, Allowance	538	526
Purchase Credit Impairment, Allowance	1	1
Total loans	48,362	45,753
Individually Evaluated for Impairment, Outstanding	234	162
Collectively Evaluated for Impairment, Outstanding	48,078	45,530
Purchase Credit Impairment, Outstanding	50	61
Commercial Mortgage [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	132	139
Purchase Credit Impairment, Allowance	2	3
Total loans	13,167	14,285
Individually Evaluated for Impairment, Outstanding	72	66
Collectively Evaluated for Impairment, Outstanding	12,948	14,041
Purchase Credit Impairment, Outstanding	147	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	23	33
Purchase Credit Impairment, Allowance	0	0
Total loans	1,480	1,666
Individually Evaluated for Impairment, Outstanding	0	0
Collectively Evaluated for Impairment, Outstanding	1,479	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	0	0
Collectively Evaluated for Impairment, Allowance	155	172
Purchase Credit Impairment, Allowance	2	3
Total loans	14,647	15,951
Individually Evaluated for Impairment, Outstanding	72	66
Collectively Evaluated for Impairment, Outstanding	14,427	15,705
Purchase Credit Impairment, Outstanding	148	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	4,470	4,606
Individually Evaluated for Impairment, Outstanding	0	0
Collectively Evaluated for Impairment, Outstanding	4,470	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	4	3
Collectively Evaluated for Impairment, Allowance	2	4
Purchase Credit Impairment, Allowance	1	0
Total loans	6,527	5,513
Individually Evaluated for Impairment, Outstanding	43	49
Collectively Evaluated for Impairment, Outstanding	6,202	5,150
Purchase Credit Impairment, Outstanding	282	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	24	26
Purchase Credit Impairment, Allowance	0	1
Total loans	10,456	11,142
Individually Evaluated for Impairment, Outstanding	126	127
Collectively Evaluated for Impairment, Outstanding	10,316	10,998
Purchase Credit Impairment, Outstanding	14	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	34	30
Purchase Credit Impairment, Allowance	0	0
Total loans	2,789	1,809
Individually Evaluated for Impairment, Outstanding	4	4
Collectively Evaluated for Impairment, Outstanding	2,782	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	46	48
Purchase Credit Impairment, Allowance	0	0
Total loans	1,105	1,144
Individually Evaluated for Impairment, Outstanding	3	3
Collectively Evaluated for Impairment, Outstanding	1,102	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	24	17
Purchase Credit Impairment, Allowance	0	0
Total loans	4,404	3,634
Individually Evaluated for Impairment, Outstanding	35	36
Collectively Evaluated for Impairment, Outstanding	4,369	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

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Fair Value Measurements - Additional Information (Details) - USD ($)	3 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other equity investments	$ 134,000,000	$ 107,000,000
Impairment loss (less than)	1,000,000
Loans, net of allowance	91,867,000,000	88,669,000,000
Discontinued Operations [Member] | Education Lending [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans, net of allowance	915,000,000	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	620,000,000	666,000,000
Loans, net of allowance	90,651,000,000	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	767,000,000	890,000,000
Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other investments	620,000,000	666,000,000
Loans, net of allowance	91,864,000,000	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	903,000,000	1,100,000,000
Level 3 [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other investments	538,000,000	559,000,000
Loans, net of allowance	90,651,000,000	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	90,000,000	115,000,000
Liabilities measured at fair value on non recurring basis	1,022,000,000	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	6,000,000	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

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Leases - Minimum Future Lease Payments to be Received for Sales-Type and Direct Financing Leases (Details) $ in Millions	Sep. 30, 2019 USD ($)
Sales-type and direct financing lease payments
2019	$ 307
2020	1,077
2021	802
2022	557
2023	360
Thereafter	624
Total lease payments	$ 3,727

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Securities Financing Activities

9 Months Ended

Sep. 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 September 30, 2019, and December 31, 2018:

	September 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	$	215	$	(16	)	$	(199	)	—	$	14	$	(14	)	—			—
Total	$	215	$	(16	)	$	(199	)	—	$	14	$	(14	)	—			—
Offsetting of financial liabilities:
Repurchase agreements (c)	$	182	$	(20	)	$	(162	)	—	$	319	$	(14	)	$	(305	)	—
Total	$	182	$	(20	)	$	(162	)	—	$	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 September 30, 2019, the carrying amount of assets pledged as collateral against repurchase agreements totaled $208 million. Assets pledged as collateral are reported in “securities available for sale” and “held-to-maturity securities” on our balance sheet. At September 30, 2019, the liabilities associated with collateral pledged were solely comprised of customer sweep financing activity and had a carrying value of $162 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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Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2019

Equity [Abstract]

Accumulated Other Comprehensive Income

17. Accumulated Other Comprehensive Income

Our changes in AOCI for the three and nine months ended September 30, 2019, and September 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	579			346			4			12			941
Amounts reclassified from AOCI, net of income taxes (a)	(11		)	40			—			7			36
Net current-period other comprehensive income, net of income taxes	568			386			4			19			977
Balance at September 30, 2019	$	195		$	336		$	(10	)	$	(362	)	$	159
Balance at June 30, 2019	$	102		$	268		$	(10	)	$	(362	)	$	(2	)
Other comprehensive income before reclassification, net of income taxes	104			62			—			(2		)	164
Amounts reclassified from AOCI, net of income taxes (a)	(11		)	6			—			2			(3		)
Net current-period other comprehensive income, net of income taxes	93			68			—			—			161
Balance at September 30, 2019	$	195		$	336		$	(10	)	$	(362	)	$	159
Balance at December 31, 2017	$	(311	)	$	(86	)	$	9		$	(391	)	$	(779	)
Other comprehensive income before reclassification, net of income taxes	(288		)	(126		)	(10		)	—			(424		)
Amounts reclassified from AOCI, net of income taxes (a)	—			34			—			8			42
Other amounts reclassified from AOCI, net of income taxes	—			—			(5		)	—			(5		)
Net current-period other comprehensive income, net of income taxes	(288		)	(92		)	(15		)	8			(387		)
Balance at September 30, 2018	$	(599	)	$	(178	)	$	(6	)	$	(383	)	$	(1,166	)
Balance at June 30, 2018	(527		)	$	(166	)	$	(7	)	$	(385	)	$	(1,085	)
Other comprehensive income before reclassification, net of income taxes	(72		)	(26		)	1			—			(97		)
Amounts reclassified from AOCI, net of income taxes (a)	—			14			—			2			16
Net current-period other comprehensive income, net of income taxes	(72		)	(12		)	1			2			(81		)
Balance at September 30, 2018	$	(599	)	$	(178	)	$	(6	)	$	(383	)	$	(1,166	)

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

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

	Nine months ended September 30,						Affected Line Item in the Statement Where Net Income is Presented
in millions	2019			2018
Unrealized gains (losses) on available for sale securities
Realized gains	$	15		—			Other income
	15			—			Income (loss) from continuing operations before income taxes
	4			—			Income taxes
	$	11		—			Income (loss) from continuing operations
Unrealized gains (losses) on derivative financial instruments
Interest rate	$	(51	)	$	(42	)	Interest income — Loans
Interest rate	(2		)	(2		)	Interest expense — Long-term debt
	(53		)	(44		)	Income (loss) from continuing operations before income taxes
	(13		)	(10		)	Income taxes
	$	(40	)	$	(34	)	Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(11	)	(12		)	Other expense
Amortization of unrecognized prior service credit	1			—			Other expense
	(10		)	(12		)	Income (loss) from continuing operations before income taxes
	(3		)	(4		)	Income taxes
	$	(7	)	(8		)	Income (loss) from continuing operations

	Three months ended September 30,						Affected Line Item in the Statement Where Net Income is Presented
in millions	2019			2018
Unrealized gains (losses) on available for sale securities
Realized gains	$	15		—			Other income
	15			—			Income (loss) from continuing operations before income taxes
	4			—			Income taxes
	$	11		—			Income (loss) from continuing operations
Unrealized gains (losses) on derivative financial instruments
Interest rate	$	(8	)	$	(15	)	Interest income — Loans
Interest rate	(1		)	(2		)	Interest expense — Long-term debt
	(9		)	(17		)	Income (loss) from continuing operations before income taxes
	(3		)	(3		)	Income taxes
	$	(6	)	(14		)	Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(4	)	$	(4	)	Other expense
Amortization of unrecognized prior service credit	1			—			Other expense
	(3		)	(4		)	Income (loss) from continuing operations before income taxes
	(1		)	(2		)	Income taxes
	$	(2	)	(2		)	Income (loss) from continuing operations