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Asset Quality (Tables)
 6 Months Ended
Jun. 30, 2020
Credit Loss [Abstract]  
Financing Receivable, Allowance for Credit Loss The changes in the ALLL by loan category for the periods indicated are as follows:

Three months ended June 30, 2020:
in millions
March 31, 2020
Provision
 
Charge-offs
Recoveries
June 30, 2020
Commercial and Industrial
$
542

$
249

 
$
(71
)
$
5

$
725

Commercial real estate:
 
 
 
 
 
 
Real estate — commercial mortgage
207

87

 
(2
)
—

292

Real estate — construction
25

16

 
—

—

41

Total commercial real estate loans
232

103

 
(2
)
—

333

Commercial lease financing
44

14

 
(4
)
1

55

Total commercial loans
818

366

 
(77
)
6

1,113

Real estate — residential mortgage
89

14

 
(2
)
—

101

Home equity loans
184

14

 
(2
)
1

197

Consumer direct loans
116

22

 
(10
)
2

130

Credit cards
104

13

 
(12
)
2

107

Consumer indirect loans
48

16

 
(7
)
3

60

Total consumer loans
541

79

 
(33
)
8

595

Total ALLL — continuing operations
1,359

445

(a) 
(110
)
14

1,708

Discontinued operations
43

—

 
(2
)
2

43

Total ALLL — including discontinued operations
$
1,402

$
445

 
$
(112
)
$
16

$
1,751

 
 
 
 
 
 
 
(a)
Excludes a provision for losses on lending-related commitments of $37 million.

Three months ended June 30, 2019:
in millions
March 31, 2019
Provision
 
Charge-offs
Recoveries
June 30, 2019
Commercial and Industrial
$
530

$
43

 
$
(30
)
$
6

$
549

Commercial real estate:
 
 
 
 
 
 
Real estate — commercial mortgage
144

(5
)
 
(1
)
1

139

Real estate — construction
28

(4
)
 
—

—

24

Total commercial real estate loans
172

(9
)
 
(1
)
1

163

Commercial lease financing
35

14

 
(16
)
2

35

Total commercial loans
737

48

 
(47
)
9

747

Real estate — residential mortgage
8

—

 
(1
)
—

7

Home equity loans
36

4

 
(6
)
2

36

Consumer direct loans
33

7

 
(10
)
2

32

Credit cards
47

7

 
(12
)
2

44

Consumer indirect loans
22

6

 
(8
)
4

24

Total consumer loans
146

24

 
(37
)
10

143

Total ALLL — continuing operations
883

72

(a) 
(84
)
19

890

Discontinued operations
13

2

 
(4
)
1

12

Total ALLL — including discontinued operations
$
896

$
74

 
$
(88
)
$
20

$
902

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

Six months ended June 30, 2020:
in millions
December 31, 2019
Impact of ASC 326 Adoption
January 1, 2020
Provision
 
Charge-offs
Recoveries
June 30, 2020
Commercial and Industrial
$
551

$
(141
)
$
410

$
436

 
$
(131
)
$
10

$
725

Commercial real estate:
 
 
 
 
 
 
 
 
Real estate — commercial mortgage
143

16

159

137

 
(5
)
1

292

Real estate — construction
22

(7
)
15

26

 
—

—

41

Total commercial real estate loans
165

9

174

163

 
(5
)
1

333

Commercial lease financing
35

8

43

17

 
(6
)
1

55

Total commercial loans
751

(124
)
627

616

 
(142
)
12

1,113

Real estate — residential mortgage
7

77

84

19

 
(2
)
—

101

Home equity loans
31

147

178

22

 
(6
)
3

197

Consumer direct loans
34

63

97

51

 
(22
)
4

130

Credit cards
47

35

82

44

 
(23
)
4

107

Consumer indirect loans
30

6

36

32

 
(16
)
8

60

Total consumer loans
149

328

477

168

 
(69
)
19

595

Total ALLL — continuing operations
900

204

1,104

784

(a) 
(211
)
31

1,708

Discontinued operations
10

31

41

3

 
(4
)
3

43

Total ALLL — including discontinued operations
$
910

$
235

$
1,145

$
787

 
$
(215
)
$
34

$
1,751

 
 
 
 
 
 
 
 
 
(a)
Excludes a provision for losses on lending-related commitments of $57 million.

Six months ended June 30, 2019:
in millions
December 31, 2018
Provision
Charge-offs
Recoveries
June 30, 2019
Commercial and Industrial
$
532

$
67

$
(131
)
$
10

$
549

Commercial real estate:
 
 
 
 
 
Real estate — commercial mortgage
142

1

(5
)
1

139

Real estate — construction
33

(5
)
—

—

24

Total commercial real estate loans
175

(4
)
(5
)
1

163

Commercial lease financing
36

20

(6
)
1

35

Total commercial loans
743

83

(142
)
12

747

Real estate — residential mortgage
7

1

(2
)
—

7

Home equity loans
35

7

(6
)
3

36

Consumer direct loans
30

19

(22
)
4

32

Credit cards
48

15

(23
)
4

44

Consumer indirect loans
20

11

(16
)
8

24

Total consumer loans
140

53

(69
)
19

143

Total ALLL — continuing operations
883

136

(211
)
31

890

Discontinued operations
14

4

(4
)
3

12

Total ALLL — including discontinued operations
$
897

$
140

$
(215
)
$
34

$
902

 
 
 
 
 
 
Significant Macroeconomic Variables of Loan Portfolios The following table discloses key macroeconomic variables for each loan portfolio.

Segment
Portfolio
Key Macroeconomic Variables (a)
Commercial
Commercial and industrial
BBB corporate bond rate (spread), GDP, industrial production, and unemployment rate
Commercial real estate
BBB corporate bond rate (spread), property and real estate price indices, and unemployment rate
Commercial lease financing
BBB corporate bond rate (spread), GDP, and unemployment rate
Consumer
Real estate — residential mortgage
GDP, home price index, unemployment rate, and 30 year mortgage rate
Home equity
Home price index, unemployment rate, and 30 year mortgage rate
Consumer direct
Unemployment rate and U.S. household income
Consumer indirect
New vehicle sales and unemployment rate
Credit cards
Unemployment rate and U.S. household income
Discontinued operations
Unemployment rate
Financing Receivable Credit Quality Indicators
Credit Risk Profile by Creditworthiness Category and Vintage (a) 
As of June 30, 2020
Term Loans
Revolving Loans Amortized Cost Basis
Revolving Loans Converted to Term Loans Amortized Cost Basis
 
 
Amortized Cost Basis by Origination Year and Internal Risk Rating
 
in millions
2020
2019
2018
2017
2016
Prior
Total
Commercial and Industrial
 
 
 
 
 
 
 
 
 
Risk Rating:
 
 
 
 
 
 
 
 
 
Pass
$
12,011

$
6,386

$
5,004

$
3,290

$
2,393

$
3,996

$
22,395

$
141

$
55,616

Criticized (Accruing)
24

60

164

164

70

169

1,608

18

2,277

Criticized (Nonaccruing)
3

12

28

31

38

58

234

—

404

Total commercial and industrial
12,038

6,458

5,196

3,485

2,501

4,223

24,237

159

58,297

Real estate — commercial mortgage
 
 
 
 
 
 
 
 

Risk Rating:
 
 
 
 
 
 
 
 

Pass
1,087

3,303

1,955

1,040

963

3,600

1,039

37

13,024

Criticized (Accruing)
—

8

29

65

34

193

16

5

350

Criticized (Nonaccruing)
—

—

1

3

4

78

4

1

91

Total real estate — commercial mortgage
1,087

3,311

1,985

1,108

1,001

3,871

1,059

43

13,465

Real estate — construction
 
 
 
 
 
 
 
 

Risk Rating:
 
 
 
 
 
 
 
 

Pass
205

603

721

239

68

21

18

3

1,878

Criticized (Accruing)
—

4

8

—

24

3

1

—

40

Criticized (Nonaccruing)
—

—

—

—

 
1

—

—

1

Total real estate — construction
205

607

729

239

92

25

19

3

1,919

Commercial lease financing
 
 
 
 
 
 
 
 

Risk Rating:
 
 
 
 
 
 
 
 

Pass
503

1,275

702

640

307

1,030

—

—

4,457

Criticized (Accruing)
6

8

12

11

10

11

—

—

58

Criticized (Nonaccruing)
—

—

2

3

4

—

—

—

9

Total commercial lease financing
509

1,283

716

654

321

1,041

 
—

4,524

Total commercial loans
$
13,839

$
11,659

$
8,626

$
5,486

$
3,915

$
9,160

$
25,315

$
205

$
78,205

 
 
 
 
 
 
 
 
 
 
(a)
Accrued interest of $121 million, presented in Other Assets on the Consolidated Balance Sheets, was excluded from the amortized cost basis disclosed in this table.
Consumer Credit Exposure
Credit Risk Profile by FICO Score and Vintage (a) 
As of June 30, 2020
Term Loans
Revolving Loans Amortized Cost Basis
Revolving Loans Converted to Term Loans Amortized Cost Basis
 
 
Amortized Cost Basis by Origination Year and FICO Score
 
in millions
2020
2019
2018
2017
2016
Prior
Total
Real estate — residential mortgage
 
 
 
 
 
 
 
 
 
FICO Score:
 
 
 
 
 
 
 
 
 
750 and above
$
1,681

$
1,878

$
294

$
320

$
648

$
1,523

—

—

$
6,344

660 to 749
348

398

96

67

115

402

—

—

1,426

Less than 660
17

30

24

12

32

193

—

—

308

No Score
—

2

3

7

2

57

—

—

71

Total real estate — residential mortgage
2,046

2,308

417

406

797

2,175

—

—

8,149

Home equity loans
 
 
 
 
 
 
 
 
 
FICO Score:
 
 
 
 
 
 
 
 
 
750 and above
386

450

190

217

206

901

$
2,809

$
406

5,565

660 to 749
176

275

125

129

106

428

1,760

196

3,195

Less than 660
19

54

32

32

37

164

604

65

1,007

No Score
2

2

1

—

—

3

5

2

15

Total home equity loans
583

781

348

378

349

1,496

5,178

669

9,782

Consumer direct loans
 
 
 
 
 
 
 
 
 
FICO Score:
 
 
 
 
 
 
 
 
 
750 and above
1,113

1,214

146

44

24

69

127

—

2,737

660 to 749
274

351

101

32

18

39

270

—

1,085

Less than 660
10

43

28

11

7

13

98

—

210

No Score
23

49

26

17

9

13

158

—

295

Total consumer direct loans
1,420

1,657

301

104

58

134

653

—

4,327

Credit cards
 
 
 
 
 
 
 
 
 
FICO Score:
 
 
 
 
 
 
 
 
 
750 and above
—

—

—

—

—

—

450

—

450

660 to 749
—

—

—

—

—

—

416

—

416

Less than 660
—

—

—

—

—

—

107

—

107

No Score
—

—

—

—

—

—

1

—

1

Total credit cards
—

—

—

—

—

—

974

—

974

Consumer indirect loans
 
 
 
 
 
 
 
 
 
FICO Score:
 
 
 
 
 
 
 
 
 
750 and above
557

1,056

457

254

107

97

—

—

2,528

660 to 749
336

717

303

137

57

73

—

—

1,623

Less than 660
69

208

129

74

37

39

—

—

556

No Score
15

—

—

—

—

—

—

—

15

Total consumer indirect loans
977

1,981

889

465

201

209

—

—

4,722

Total consumer loans
$
5,026

$
6,727

$
1,955

$
1,353

$
1,405

$
4,014

$
6,805

$
669

$
27,954

 
 
 
 
 
 
 
 
 
 
(a)
Accrued interest of $104 million, presented in Other Assets on the Consolidated Balance Sheets, was excluded from the amortized cost basis disclosed in this table.
Past Due Loans Including Current Loans
The following aging analysis of past due and current loans as of June 30, 2020, and December 31, 2019, provides further information regarding Key’s credit exposure.

Aging Analysis of Loan Portfolio(a) 
June 30, 2020
Current
30-59
Days Past
Due (b)
60-89
Days Past
Due (b)
90 and
Greater
Days Past
Due (b)
Non-performing
Loans (c)
Total Past
Due and
Non-performing
Loans (c)
Total
Loans (d)
in millions
LOAN TYPE
 
 
 
 
 
 
 
Commercial and industrial
$
57,659

$
116

$
71

$
47

$
404

$
638

$
58,297

Commercial real estate:
 
 
 
 
 
 
 
Commercial mortgage
13,269

52

41

12

91

196

13,465

Construction
1,916

—

—

2

1

3

1,919

Total commercial real estate loans
15,185

52

41

14

92

199

15,384

Commercial lease financing
4,472

40

—

3

9

52

4,524

Total commercial loans
$
77,316

$
208

$
112

$
64

$
505

$
889

$
78,205

Real estate — residential mortgage
$
8,039

$
16

$
5

$
—

$
89

$
110

$
8,149

Home equity loans
9,592

31

12

6

141

190

9,782

Consumer direct loans
4,306

9

4

5

3

21

4,327

Credit cards
957

3

3

9

2

17

974

Consumer indirect loans
4,683

13

3

3

20

39

4,722

Total consumer loans
$
27,577

$
72

$
27

$
23

$
255

$
377

$
27,954

Total loans
$
104,893

$
280

$
139

$
87

$
760

$
1,266

$
106,159

 
 
 
 
 
 
 
 
(a)
Amounts in table represent amortized cost and exclude loans held for sale.
(b)
Accrued interest of $225 million presented in “other assets” on the Consolidated Balance Sheets is excluded from the amortized cost basis disclosed in this table.
(c)
PCI loans meeting nonperforming criteria were historically excluded from Key's nonperforming disclosures. As a result of CECL implementation on January 1, 2020, PCI loans became PCD loans. PCD loans that met the definition of nonperforming are now included in nonperforming disclosures.
(d)
Net of unearned income, net of deferred fees and costs, and unamortized discounts and premiums.
December 31, 2019
Current
30-59
Days Past
Due (b)
60-89
Days Past
Due (b)
90 and
Greater
Days Past
Due (b)
Non-performing
Loans
Total Past
Due and
Non-performing
Loans
Purchased
Credit
Impaired
Total
Loans
in millions
LOAN TYPE
 
 
 
 
 
 
 
 
Commercial and industrial
$
47,768

$
110

$
52

$
53

$
264

$
479

48

$
48,295

Commercial real estate:
 
 
 
 
 
 
 
 
Commercial mortgage
13,258

8

5

13

83

109

124

13,491

Construction
1,551

3

—

1

2

6

1

1,558

Total commercial real estate loans
14,809

11

5

14

85

115

125

15,049

Commercial lease financing
4,647

22

11

2

6

41

—

4,688

Total commercial loans
$
67,224

$
143

$
68

$
69

$
355

$
635

173

$
68,032

Real estate — residential mortgage
$
6,705

$
7

$
5

$
1

$
48

$
61

$
257

$
7,023

Home equity loans
10,071

30

10

5

145

190

13

10,274

Consumer direct loans
3,484

10

5

7

4

26

3

3,513

Credit cards
1,104

6

5

12

3

26

—

1,130

Consumer indirect loans
4,609

32

8

3

22

65

—

4,674

Total consumer loans
$
25,973

$
85

$
33

$
28

$
222

$
368

$
273

$
26,614

Total loans
$
93,197

$
228

$
101

$
97

$
577

$
1,003

$
446

$
94,646

 
 
 
 
 
 
 
 
 
(a)
Amounts in table represent recorded investment and exclude loans held for sale. Recorded investment represents the principal amount of the loan increased or decreased by net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs.
(b)
Past due loan amounts exclude PCI, even if contractually past due (or if we do not expect to collect principal or interest in full based on the original contractual terms), as we are currently accreting income over the remaining term of the loans.
Post-Modification Outstanding Recorded Investment by Concession Type for Our Commercial Accruing and Nonaccruing TDRs
The following table shows the post-modification outstanding recorded investment by concession type for our commercial and consumer accruing and nonaccruing TDRs that occurred during the periods indicated:
 
Three Months Ended June 30,
Six Months Ended June 30,
in millions
2020
2019
2020
2019
Commercial loans:
 
 
 
 
Extension of Maturity Date
8

$
6

$
8

$
6

Payment or Covenant Modification/Deferment
—

18

—

18

Bankruptcy Plan Modification
—

11

—

11

Increase in new commitment or new money
4

—

4

—

Total
12

$
35

$
12

$
35

Consumer loans:
 
 
 
 
Interest rate reduction
$
1

$
4

$
9

$
8

Other
5

9

13

16

Total
$
6

$
13

$
22

$
24

Total TDRs
$
18

$
48

$
34

$
59
Summary Of Post-Modification Outstanding Recorded Investment, Accruing And Nonaccruing TDRs
The following table summarizes the change in the post-modification outstanding recorded investment of our accruing and nonaccruing TDRs during the periods indicated:
 
Three Months Ended June 30,
Six Months Ended June 30,
in millions
2020
2019
2020
2019
Balance at beginning of the period
$
340

$
365

$
347

$
399

Additions
22

54

39

68

Payments
(35
)
(19
)
(53
)
(58
)
Charge-offs
(17
)
(5
)
(23
)
(14
)
Balance at end of period
$
310

$
395

$
310

$
395

 
 
 
 
 
Breakdown of Nonperforming TDRs by Loans Category
A further breakdown of TDRs included in nonperforming loans by loan category for the periods indicated are as follows:
 
June 30, 2020
 
December 31, 2019
 
Number of
Loans
Pre-modification
Outstanding
Recorded
Investment
Post-modification
Outstanding
Recorded
Investment
 
Number of
Loans
Pre-modification
Outstanding
Recorded
Investment
Post-modification
Outstanding
Recorded
Investment
dollars in millions
LOAN TYPE
 
 
 
 
 
 
 
Nonperforming:
 
 
 
 
 
 
 
Commercial and industrial
50

$
57

$
43

 
51

$
72

$
53

Commercial real estate:
 
 
 
 
 
 
 
Commercial mortgage
8

65

58

 
6

64

58

Total commercial real estate loans
8

65

58

 
6

64

58

Total commercial loans
58

122

101

 
57

136

111

Real estate — residential mortgage
191

16

14

 
181

13

11

Home equity loans
574

36

34

 
713

42

41

Consumer direct loans
134

2

2

 
172

2

2

Credit cards
290

2

2

 
368

2

2

Consumer indirect loans
939

16

13

 
1,131

19

16

Total consumer loans
2,128

72

65

 
2,565

78

72

Total nonperforming TDRs
2,186

194

166

 
2,622

214

183

Prior-year accruing:(a)
 
 
 
 
 
 
 
Commercial and industrial
3

2

—

 
6

30

25

Commercial real estate
 
 
 
 
 
 
 
Commercial mortgage
1

—

—

 
1

—

—

Total commercial real estate loans
1

—

—

 
1

—

—

Total commercial loans
4

2

—

 
7

30

25

Real estate — residential mortgage
487

36

30

 
493

37

31

Home equity loans
1,872

111

91

 
1,751

104

84

Consumer direct loans
183

4

3

 
139

4

3

Credit cards
602

4

2

 
486

3

1

Consumer indirect loans
820

31

18

 
714

33

20

Total consumer loans
3,964

186

144

 
3,583

181

139

Total prior-year accruing TDRs
3,968

188

144

 
3,590

211

164

Total TDRs
6,154

$
382

$
310

 
6,212

$
425

$
347

 
 
 
 
 
 
 
 
(a)
All TDRs that were restructured prior to January 1, 2020, and January 1, 2019, and are fully accruing.
Changes in Liability for Credit Losses on Off-Balance Sheet Exposures
Changes in the liability for credit losses on off balance sheet exposures are summarized as follows:
 
Three months ended June 30,
Six months ended June 30,
in millions
2020
2019
2020
2019
Balance at the end of the prior period
$
161

$
62

$
68

$
64

Liability for credit losses on contingent guarantees at the end of the prior period
—

—

7

—

Cumulative effect from change in accounting principle (a), (b)
—

—

66

—

Balance at beginning of period
161

62

141

64

Provision (credit) for losses on off balance sheet exposures
37

2

57

—

Balance at end of period
$
198

$
64

$
198

$
64

 
 
 
 
 
(a)
The cumulative effect from change in accounting principle relates to the January 1, 2020, adoption of ASU 2016-13.
(b)
Excludes $4 million related to the provision for other financial assets.