10-Q

Table of contents

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, 2020

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	976,472,556 shares
Title of class	Outstanding at October 29, 2020

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KEYCORP

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

		Page Number
Item 1.	Financial Statements	54
	Consolidated Balance Sheets	54
	Consolidated Statements of Income	55
	Consolidated Statements of Comprehensive Income	56
	Consolidated Statements of Changes in Equity	57
	Consolidated Statements of Cash Flows	59
	Notes to Consolidated Financial Statements (Unaudited)	60
	Note 1.    Basis of Presentation and Accounting Policies	60
	Note 2.    Earnings Per Common Share	66
	Note 3.    Loan Portfolio	66
	Note 4.    Asset Quality	67
	Note 5.    Fair Value Measurements	76
	Note 6.    Securities	85
	Note 7.    Derivatives and Hedging Activities	87
	Note 8.    Mortgage Servicing Assets	92
	Note 9.    Leases	94
	Note 10. Goodwill	95
	Note 11.  Variable Interest Entities	95
	Note 12.  Income Taxes	96
	Note 13.  Acquisitions and Discontinued Operations	97
	Note 14.  Securities Financing Activities	98
	Note 15.  Employee Benefits	98
	Note 16.  Trust Preferred Securities Issued by Unconsolidated Subsidiaries	98
	Note 17.  Contingent Liabilities and Guarantees	99
	Note 18.  Accumulated Other Comprehensive Income	101
	Note 19.  Shareholders’ Equity	102
	Note 20.  Business Segment Reporting	102
	Note 21. Revenue from Contracts with Customers	104
	Report of Ernst & Young LLP, Independent Registered Public Accounting Firm	106

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Item 2.	Management’s Discussion & Analysis of Financial Condition & Results of Operations	4
	Introduction	4
	Terminology	4
	Forward-looking statements	5
	Long-term financial targets	7
	Selected financial data	8
	Strategic developments	9
	Demographics	9
	Supervision and regulation	10
	Results of Operations	15
	Earnings overview	15
	Net interest income	15
	Provision for credit losses	20
	Noninterest income	20
	Noninterest expense	22
	Income taxes	24
	Business Segment Results	24
	Consumer Bank	24
	Commercial Bank	25
	Financial Condition	26
	Loans and loans held for sale	26
	Securities	32
	Deposits and other sources of funds	34
	Capital	34
	Risk Management	37
	Overview	37
	Market risk management	37
	Liquidity risk management	41
	Credit risk management	43
	Operational and compliance risk management	47
	GAAP to Non-GAAP Reconciliations	48
	Critical Accounting Policies and Estimates	49
	Accounting and Reporting Developments	52
	European Sovereign and Nonsovereign Debt Exposures	53
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	107
Item 4.	Controls and Procedures	107

	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	107
Item 1A.	Risk Factors	107
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	108
Item 6.	Exhibits	108
	Signature	110

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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, 2020, and September 30, 2019. 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 “2019 Form 10-K” refer to our Form 10-K for the year ended December 31, 2019, 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 Capital Management, Ltd., which 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.	ISDA: International Swaps and Derivatives
ALLL: Allowance for loan and lease losses.	Association.
A/LM: Asset/liability management.	KCDC: Key Community Development Corporation.
AOCI: Accumulated other comprehensive income (loss).	KEF: Key Equipment Finance.
ARRC: Alternative Reference Rates Committee.	LGD: Loss given default.
ASC: Accounting Standards Codification.	LIBOR: London Interbank Offered Rate.
BHCs: Bank holding companies.	LIHTC: Low-income housing tax credit.
Board: KeyCorp Board of Directors.	LTV: Loan-to-value.
CCAR: Comprehensive Capital Analysis and Review.	Moody’s: Moody’s Investor Services, Inc.
CECL: Current expected credit losses.	MRC: Market Risk Committee.
CMBS: Commercial mortgage-backed securities.	MRM: Market Risk Management group.
CMO: Collateralized mortgage obligation.	N/A: Not applicable.
Common Shares: KeyCorp common shares, $1 par value.	NAV: Net asset value.
DCF: Discounted cash flow.	N/M: Not meaningful.
Dodd-Frank Act: Dodd-Frank Wall Street Reform and	NMTC: New market tax credit.
Consumer Protection Act of 2010.	NOW: Negotiable Order of Withdrawal.
EAD: Exposure at default.	NYSE: New York Stock Exchange.
EBITDA: Earnings before interest, taxes, depreciation, and	OCC: Office of the Comptroller of the Currency.
amortization.	OCI: Other comprehensive income (loss).
EPS: Earnings per share.	OREO: Other real estate owned.
ERM: Enterprise risk management.	PBO: Projected benefit obligation.
EVE: Economic value of equity.	PCD: Purchased credit deteriorated.
FASB: Financial Accounting Standards Board.	PCI: Purchased credit impaired.
FDIA: Federal Deposit Insurance Act, as amended.	PD: Probability of default.
FDIC: Federal Deposit Insurance Corporation.	PPP: Paycheck Protection Program.
Federal Reserve: Board of Governors of the Federal	S&P: Standard and Poor’s Ratings Services,
Reserve System.	a Division of The McGraw-Hill Companies, Inc.
FHLB: Federal Home Loan Bank of Cincinnati.	SEC: U.S. Securities and Exchange Commission.
FHLMC: Federal Home Loan Mortgage Corporation.	SOFR: Secured Overnight Financing Rate.
FICO: Fair Isaac Corporation.	TDR: Troubled debt restructuring.
FNMA: Federal National Mortgage Association, or Fannie	TE: Taxable-equivalent.
Mae.	U.S. Treasury: United States Department of the
GAAP: U.S. generally accepted accounting principles.	Treasury.
GNMA: Government National Mortgage Association, or	VaR: Value at risk.
Ginnie Mae.	VEBA: Voluntary Employee Beneficiary Association.
HTC: Historic tax credit.	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 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:

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•our concentrated credit exposure in commercial and industrial loans;

•deterioration of commercial real estate market fundamentals;

•defaults by our loan counterparties or clients;

•adverse changes in credit quality trends;

•declining asset prices;

•the extensive regulation of the U.S. financial services industry;

•changes in accounting policies, standards, and interpretations;

•operational or risk management failures by us or critical third parties;

•breaches of security or failures of our technology systems due to technological or other factors and

cybersecurity threats;

•negative outcomes from claims or litigation;

•failure or circumvention of our controls and procedures;

•the occurrence of natural or man-made disasters, global pandemics, conflicts, terrorist attacks, or other adverse external events;

•evolving capital and liquidity standards under applicable regulatory rules;

•disruption of the U.S. financial system;

•our ability to receive dividends from our subsidiaries, including KeyBank;

•unanticipated changes in our liquidity position, including but not limited to, changes in our access to or the cost

of funding and our ability to secure alternative funding sources;

•downgrades in our credit ratings or those of KeyBank;

•our ability to anticipate interest rate changes and manage interest rate risk;

•uncertainty surrounding the transition from LIBOR to an alternative reference rate;

•deterioration of economic conditions in the U.S. and the geographic regions where we operate;

•the soundness of other financial institutions;

•our ability to attract and retain talented executives and employees and to manage our reputational risks;

•our ability to timely and effectively implement our strategic initiatives;

•increased competitive pressure;

•our ability to adapt our products and services to industry standards and consumer preferences;

•unanticipated adverse effects of strategic partnerships or acquisitions and dispositions of assets or businesses;

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

•the impact of the COVID-19 global pandemic.

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 2019 Form 10-K and any subsequent reports filed with the SEC by Key, including the additional risk factors disclosed in Part II, Item 1A. of our First Quarter 2020 Form 10-Q and Part II, Item 1A. of this Form 10-Q, 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

Our financial outlook and results of operations have been impacted by the economic fallout of the COVID-19 pandemic. Our long-term targets have not changed as we expect to continue to deliver positive operating leverage and strong financial returns as we emerge from this period of economic and financial stress.

(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%.

Our results for the third quarter of 2020 continue to reflect the hard work and dedication of our team and their commitment to serving our clients as we work through the ongoing pandemic. Noninterest income was up from the year-ago quarter. Investment banking and debt placement fees and consumer mortgage income each had another solid quarter and cards and payments income and service charges on deposit accounts both posted strong linked quarter increases. Our expenses this quarter reflected higher variable costs related to cards and payments activity and production-related incentives, as well as elevated pandemic-related costs associated with keeping our teammates and clients safe.

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.

Overall, credit quality remains very solid. Delinquencies improved quarter-over-quarter, with a six basis point decrease in our 30-89 day past dues, and the 90 day plus category also declining. Over the past quarter, the number of requests for loan forbearance has decreased dramatically. As of September 30, 2020, loans subject to forbearance terms were less than 1% based on the number of accounts for both commercial and consumer loans, and less than 2% when using outstanding balances.

Financial Return

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

We have continued to maintain a strong level of capital. We ended the third quarter of 2020 with a Common Equity Tier 1 ratio of 9.5%. This places us at the upper end of our targeted range of 9.0% to 9.5%. We believe that this provides us with sufficient capacity to continue to support our customers and their borrowing needs and return capital to our shareholders. In the third quarter of 2020, we paid a common stock dividend of $.185 per share, which was consistent with our second quarter dividend level.

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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

	2020									2019						Nine months ended September 30,
dollars in millions, except per share amounts	Third			Second			First			Fourth			Third			2020			2019
FOR THE PERIOD
Interest income	$	1,119		$	1,190		$	1,251		$	1,285		$	1,317		$	3,560		$	3,950
Interest expense	119			172			270			306			345			561			1,020
Net interest income	1,000			1,018			981			979			972			2,999			2,930
Provision for credit losses	160			482			359			109			200			1,001			336
Noninterest income	681			692			477			651			650			1,850			1,808
Noninterest expense	1,037			1,013			931			980			939			2,981			2,921
Income (loss) from continuing operations before income taxes	484			215			168			541			483			867			1,481
Income (loss) from continuing operations attributable to Key	424			185			145			466			413			754			1,242
Income (loss) from discontinued operations, net of taxes	4			2			1			3			3			7			6
Net income (loss) attributable to Key	428			187			146			469			416			761			1,248
Income (loss) from continuing operations attributable to Key common shareholders	397			159			118			439			383			674			1,172
Income (loss) from discontinued operations, net of taxes	4			2			1			3			3			7			6
Net income (loss) attributable to Key common shareholders	401			161			119			442			386			681			1,178
PER COMMON SHARE
Income (loss) from continuing operations attributable to Key common shareholders	$	.41		$	.16		$	.12		$	.45		$	.39		$	.70		$	1.17
Income (loss) from discontinued operations, net of taxes	—			—			—			—			—			.01			.01
Net income (loss) attributable to Key common shareholders (a)	.41			.17			.12			.45			.39			.70			1.18
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution	.41			.16			.12			.45			.38			.69			1.16
Income (loss) from discontinued operations, net of taxes — assuming dilution	—			—			—			—			—			.01			.01
Net income (loss) attributable to Key common shareholders — assuming dilution (a)	.41			.17			.12			.45			.39			.70			1.17
Cash dividends paid	.185			.185			.185			.185			.185			.555			.525
Book value at period end	16.25			16.07			15.95			15.54			15.44			16.25			15.44
Tangible book value at period end	13.32			13.12			12.98			12.56			12.48			13.32			12.48
Weighted-average common shares outstanding (000)	967,804			967,147			967,446			973,450			988,319			967,632			998,268
Weighted-average common shares and potential common shares outstanding (000) (b)	973,988			972,141			976,110			984,361			998,328			974,280			1,007,900
AT PERIOD END
Loans	$	103,081		$	106,159		$	103,198		$	94,646		$	92,760		$	103,081		$	92,760
Earning assets	155,585			156,177			141,333			130,807			132,160			155,585			132,160
Total assets	170,540			171,192			156,197			144,988			146,691			170,540			146,691
Deposits	136,746			135,513			115,304			111,870			111,649			136,746			111,649
Long-term debt	12,685			13,734			13,732			12,448			14,470			12,685			14,470
Key common shareholders’ equity	15,822			15,642			15,511			15,138			15,216			15,822			15,216
Key shareholders’ equity	17,722			17,542			17,411			17,038			17,116			17,722			17,116
PERFORMANCE RATIOS — FROM CONTINUING OPERATIONS
Return on average total assets	1.00		%	.45		%	.40		%	1.27		%	1.14		%	.63		%	1.17		%
Return on average common equity	9.98			4.05			3.10			11.40			9.99			5.75			10.62
Return on average tangible common equity (c)	12.19			4.96			3.82			14.09			12.38			7.06			13.23
Net interest margin (TE)	2.62			2.76			3.01			2.98			3.00			2.78			3.06
Cash efficiency ratio (c)	60.6			57.9			62.3			58.7			56.0			60.2			59.9
PERFORMANCE RATIOS — FROM CONSOLIDATED OPERATIONS
Return on average total assets	1.00		%	.46		%	.40		%	1.27		%	1.14		%	.63		%	1.16		%
Return on average common equity	10.08			4.10			3.12			11.48			10.07			5.81			10.68
Return on average tangible common equity (c)	12.31			5.02			3.86			14.19			12.48			7.13			13.30
Net interest margin (TE)	2.62			2.76			3.00			2.97			2.98			2.78			3.05
Loan-to-deposit (d)	77.2			80.4			92.1			86.6			85.3			77.2			85.3
CAPITAL RATIOS AT PERIOD END
Key shareholders’ equity to assets	10.4		%	10.2		%	11.1		%	11.8		%	11.7		%	10.4		%	11.7		%
Key common shareholders’ equity to assets	9.3			9.2			10.0			10.5			10.4			9.3			10.4
Tangible common equity to tangible assets (c)	7.8			7.6			8.3			8.6			8.6			7.8			8.6
Common Equity Tier 1	9.5			9.1			8.9			9.4			9.5			9.5			9.5
Tier 1 risk-based capital	10.9			10.5			10.2			10.9			10.9			10.9			10.9
Total risk-based capital	13.3			12.8			12.2			12.8			12.9			13.3			12.9
Leverage	8.7			8.8			9.8			9.9			9.9			8.7			9.9
TRUST ASSETS
Assets under management	$	41,312		$	39,722		$	36,189		$	40,833		$	39,416		$	41,312		$	39,416
OTHER DATA
Average full-time-equivalent employees	17,097			16,646			16,529			16,537			16,898			16,758			17,217
Branches	1,077			1,077			1,082			1,098			1,101			1,077			1,101

(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

The third quarter of 2020 continued to pose unprecedented challenges given the impacts from the COVID-19 pandemic and widespread disruption to people’s lives and the economy. We have remained committed to supporting our employees, our communities, and our clients through these difficult times. Providing value to all stakeholders creates the foundation to deliver sustainable long-term performance. The corporate governance processes that we have in place allow us to oversee any changes and new requirements that may occur across our geographic footprint. Additionally, our strong financial performance in the third quarter demonstrated the resiliency of our team and business, the strength of our balance sheet, and our strong risk management practices. Here are just a few of the ways we have continued to respond to this unprecedented situation and some of the ways we plan to operate going forward:

•Our business resiliency plans remained in effect and we maintained our operational effectiveness across the entire organization. The health and safety of our clients, employees, and communities in which we operate have continued to be our top priority. Nearly every branch has been open for business and continues to follow guidelines on how to minimize physical contact with our clients and between our employees. Our return-to-work protocols, which began in the second quarter of 2020, continued during the third quarter of 2020. This plan is flexible as the ongoing pandemic changes and may impact the communities in which our employees and clients operate differently.

•We are committed to playing a critical role in providing capital and assistance to our clients and supporting broader initiatives to strengthen our economy. We continue to support our clients through payment deferrals, hardship support, borrower assistance programs, and forbearance options to help provide a bridge for individuals and businesses through these uncertain times.

•Although our financial outlook has been impacted by the economic fallout from the COVID-19 pandemic, we are operating from a position of strength. Our business model and clear strategy position us well during this period of economic and financial stress and we believe it will provide us with significant opportunities through the recovery phase. Our long-term financial targets have not changed and on the other side of this crisis, we expect to continue to deliver positive operating leverage and strong financial returns. However, given our inability to estimate the impact of the pandemic on our business and operations in 2020, we previously withdrew our financial outlook for the full year 2020 that was issued on January 23, 2020.

•Credit quality is also playing a critical role in this environment. Our risk profile and strategy is different than the one we had leading up to, and during, the 2007-2009 financial crisis. We have significantly reduced our exposure to high-risk sectors and industries and have positioned Key to perform well through all phases of the business cycle, including highly stressed environments, like the one in which we operated during the last seven months. Our moderate risk profile will continue to inform our credit decisions and the way we underwrite loans.

•Capital and liquidity continued to be clear strengths for us during the third quarter of 2020. We participated in several rounds of government-mandated stress tests since the 2007-2009 financial crisis. These tests have shown that we would remain well capitalized through periods of severe economic and financial stress while continuing to support our clients and the communities in which we operate. Our strong balance sheet, liquidity, and capital positions us to weather adverse economic scenarios, while continuing to support our clients, invest in our business, and provide returns for our shareholders. During the third quarter of 2020, we maintained our common stock dividend at the same level as the second quarter of 2020.

Demographics

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

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Supervision and regulation

The following discussion provides a summary of recent regulatory developments and should be read in conjunction with the disclosure included in our 2019 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 (“Regulatory Capital Rules”). As of April 1, 2020, the Regulatory Capital Rules are fully phased-in for Key. 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 2019 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, 2020, KeyCorp’s ratios under the fully phased-in Regulatory Capital Rules are set forth in Figure 2.

Figure 2. Minimum Capital Ratios and KeyCorp Ratios Under the Regulatory Capital Rules

Ratios (including capital conservation buffer)	Regulatory Minimum Requirement		Capital Conservation Buffer (b)		Regulatory Minimum With Capital Conservation Buffer		KeyCorp September 30, 2020 (c)
Common Equity Tier 1	4.5	%	2.5	%	7.0	%	9.5	%
Tier 1 Capital	6.0		2.5		8.5		10.9
Total Capital	8.0		2.5		10.5		13.3
Leverage (a)	4.0		N/A		4.0		8.7

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

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

(c)Ratios reflect the five-year transition of CECL impacts on regulatory ratios.

Revised prompt corrective action framework

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

Figure 3. "Well Capitalized" and "Adequately Capitalized" Capital Category Ratios under Revised PCA Framework

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

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

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

We believe that, as of September 30, 2020, 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

A final rule adopted by the federal banking agencies in February 2019 provides banking organizations with the option to phase in, over a three-year period, the adverse day-one regulatory capital effects of the adoption of the CECL accounting standard. On March 27, 2020, the federal banking agencies issued an interim final rule that gives banking organizations that are required under U.S. accounting standards to adopt CECL before the end of 2020 the

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option to delay for two years CECL’s adverse effects on regulatory capital (“CECL Interim Final Rule”). This is in addition to the three-year transition period already in place, resulting in an optional five-year transition. The agencies noted that this relief is being provided in order to allow banking organizations to better focus on lending to creditworthy households and businesses affected by recent strains on the U.S. economy caused by COVID-19.

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), enacted on March 27, 2020, provides banking organizations with the option to not comply with CECL until the earlier of (i) the termination date of the national emergency concerning COVID-19 declared by the President under the National Emergencies Act; or (ii) December 31, 2020. The federal banking agencies issued a statement on March 31, 2020, indicating that banking organizations that elect to use the optional, temporary statutory relief will be able to elect the remaining period of regulatory capital relief provided under the CECL Interim Final Rule after the end of the statutory relief period. Alternatively, banking organizations may adopt CECL as planned in 2020 and use the regulatory capital relief provided under the CECL Interim Final Rule starting at the time of their adoption of CECL.

On August 26, 2020, the federal banking agencies issued a final rule that is substantially similar to the CECL Interim Final Rule. Like the CECL Interim Final Rule, the final rule gives eligible banking organizations the option to mitigate the estimated adverse effects on regulatory capital of CECL for two years, followed by a three-year transition period, which results in an optional five-year transition. The final rule expands the group of institutions eligible for this optional five-year transition to include any institution adopting CECL in 2020. The final rule also includes certain minor adjustments to clarify the calculation of the transitional amount. Key elected to adopt CECL as planned in the first quarter of 2020 and exercise the option to use a five-year transition to measure CECL’s effects on regulatory capital.

See Item 1. Business of our 2019 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

On March 4, 2020, the Federal Reserve adopted a final rule integrating certain aspects of the Federal Reserve’s Regulatory Capital Rules with CCAR and the stress test rules in order to simplify the overall capital framework that is currently applicable to BHCs that have $100 billion or more in total consolidated assets (including KeyCorp). Under the final rule, the Federal Reserve amended the capital conservation buffer requirement under the Regulatory Capital Rules by replacing the static risk-weighted assets component of the buffer with a new measure, the stress capital buffer, which will be based on the results of an individual BHC’s supervisory stress test and cannot be less than 2.5 percent of risk-weighted assets. A firm will be subject to limitations on capital distributions and discretionary bonus payments if it does not satisfy all minimum capital requirements and its stress capital buffer requirement. A firm’s stress capital buffer requirement will become effective on October 1 of each year and will remain in effect until September 30 of the following year unless the firm receives an updated stress capital buffer requirement from the Federal Reserve.

On March 20, 2020, the federal banking agencies published an interim final rule that revises the definition of eligible retained income as that term is used in the agencies’ Regulatory Capital Rules. The revised definition applies to all buffer requirements applicable to a banking organization, including the stress capital buffer requirement adopted by the Federal Reserve on March 4, 2020. The revised definition of eligible retained income will make any automatic limitations on capital distributions that could apply under the agencies’ capital rules more gradual with the objective of promoting continued lending during a period of stress, including the period of stress resulting from the COVID-19 pandemic. On August 26, 2020, the federal banking agencies issued a final rule that adopts, without change, the interim final rule issued in March 2020 that revises the definition of eligible retained income as that term is used in the agencies’ Regulatory Capital Rules.

In April 2020, we submitted our 2020 capital plan to the Federal Reserve under the Federal Reserve’s CCAR process. On June 25, 2020, the Federal Reserve publicly announced the results of its CCAR process and the supervisory stress test that it conducted of 33 BHCs having more than $100 billion in total consolidated assets (including KeyCorp). The Federal Reserve indicated that it will use the results of this stress test to set the new stress capital buffer requirement for these firms, which will take effect in the fourth quarter of 2020. The Federal Reserve also announced the results of a sensitivity analysis it conducted to assess the resiliency of these firms under three hypothetical downside scenarios which could result from the COVID-19 disruptions.

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Because of the results of its sensitivity analysis, the Federal Reserve decided to take certain actions to require large banking organizations to preserve capital and re-evaluate their capital plans. Specifically, the Federal Reserve stated that it is requiring each firm subject to its capital plan rule to update and resubmit its capital plan to the appropriate Reserve Bank within 45 days after the Federal Reserve provides updated scenarios. The Federal Reserve further indicated that for the third quarter of 2020, these firms are prohibited from (i) making share repurchases (other than share repurchases relating to issuances of common stock for employee stock ownership plans); and (ii) paying common stock dividends that exceed the amount paid in the second quarter of 2020 or exceed an amount equal to the average of the firm’s net income for the four preceding calendar quarters unless otherwise specified by the Federal Reserve. The Federal Reserve said that it may extend these restrictions quarter-by-quarter depending upon the economic circumstances.

On June 30, 2020, KeyCorp announced that its preliminary stress capital requirement, provided by the Federal Reserve as part of the 2020 Federal Reserve capital stress testing exercise, is 2.5%, which represents the minimum buffer required for banking organizations the size of Key. KeyCorp also announced that its capital plans included maintaining its common stock dividend for the third quarter of 2020 at the same level as the second quarter of 2020, subject to approval by KeyCorp’s Board of Directors, which the Board subsequently approved on July 8, 2020. On August 10, 2020, the Federal Reserve confirmed KeyCorp’s stress capital requirement of 2.5%.

On September 17, 2020, the Federal Reserve announced three supervisory scenarios (baseline, severely adverse, and alternative severe) that firms subject to the. Federal Reserve’s capital plan rule must use in preparing their updated 2020 capital plan resubmissions and that the Federal Reserve will use in conducting its updated stress analyses of these firms. The Federal Reserve stated that it will release firm-specific results from the firms’ performance under these scenarios by the end of 2020.

Due to the continued economic uncertainty caused by the pandemic, the Federal Reserve announced on September 30, 2020, that it was extending for an additional quarter certain measures to ensure that large banking organizations maintain a high level of capital resilience. Specifically, the Federal Reserve stated that banking organizations with more than $100 billion in total assets will be subject to the same prohibition on share repurchases and limitation on dividend payments for the fourth quarter of 2020 that they were subject to for the third quarter of 2020.

On September 30, 2020, the Federal Reserve invited public comment on a proposal to make conforming changes to the capital planning, regulatory reporting, and stress capital buffer requirements for firms subject to Category IV standards (including KeyCorp) to be consistent with the tailored regulatory framework for large banking organizations that the Federal Reserve adopted in an October 2019 rulemaking. The proposal would revise the elements of the annual capital plan that Category IV firms are required to submit to the Federal Reserve and would make related changes to regulatory reporting requirements. Also, the proposal would update the frequency for calculating the stress capital buffer for these firms. In addition, the proposal would make certain clarifying changes to the stress testing rules applicable to all large banking organizations. The Federal Reserve further requested comment on all aspects of its capital planning guidance. Comments are due by November 20, 2020.

See Item 1. Business of our 2019 Form 10-K under the heading “Supervision and Regulation - Regulatory capital requirements - Capital planning and stress testing” for an overview of capital planning and stress testing requirements.

Liquidity requirements

On October 20, 2020, the federal banking agencies adopted a final rule to implement the net stable funding ratio (“NSFR”). The NSFR final rule, which is effective on July 1, 2021, requires certain banking organizations with more than $100 billion in total assets to maintain minimum amounts of stable funding to support their assets, commitments, and derivatives exposures over a one-year time horizon. The final NSFR rule tailors the application of the NSFR requirement to large banking organizations in each of four risk-based categories of institutions. Key is a Category IV firm. Category IV firms with average weighted short-term wholesale funding of less than $50 billion will not be subject to an NSFR requirement. Key believes that it does not meet the $50 billion threshold and that it will not be subject to an NSFR requirement.

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See Item. 1 Business of our 2019 Form 10-K under the heading “Supervision and Regulation — Regulatory capital requirements — Liquidity requirements” for a further discussion of liquidity requirements, including the Liquidity Coverage Rules.

Volcker Rule

The Volcker Rule is discussed in detail in Item 1. Business of our 2019 Form 10-K under the heading “Supervision and Regulation - Other Regulatory Developments — Volcker Rule.”

On June 25, 2020, five federal agencies announced their adoption of a final rule to clarify and streamline the covered fund-related provisions of the Volcker Rule. Among other things, the final rule (i) permits certain low-risk transactions (including intraday credit, riskless principal, and payment, clearing, and settlement transactions) between a banking entity and covered funds for which the banking entity serves as the investment adviser, investment manager, or sponsor; (ii) clarifies exclusions from the covered fund definition for foreign public funds, loan securitizations, small business investment companies, and public welfare investment funds; and (iii) permits banking entities to invest in or sponsor certain types of funds that do not raise the concerns that the Volcker Rule was intended to address, such as credit funds, venture capital funds, customer facilitation funds, and family wealth management vehicles. The final rule became effective on October 1, 2020.

Control standards

On January 30, 2020, the Federal Reserve adopted a final rule setting forth a new, comprehensive framework for determining control under the BHCA and the Home Owners’ Loan Act. The final rule simplifies and provides greater transparency regarding the standards used by the Federal Reserve to determine whether one company has control over another company. The final rule codifies existing Federal Reserve precedents on control and makes certain targeted adjustments to these precedents. The final rule provides a tiered framework that looks 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 will be applied for control determinations, the final rule may facilitate (1) BHCs making minority investments in nonbank companies and (2) nonbank investors taking minority stakes in banking organizations. On March 31, 2020, the Federal Reserve announced that it was delaying the effective date of the new control final rule to September 30, 2020, from the original date of April 1, 2020, in order to reduce operational burdens on organizations affected by this rule.

Community Reinvestment Act

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

On May 20, 2020, the OCC issued a final rule to revise the agency’s CRA regulation to strengthen and modernize the framework by which the OCC assesses a bank’s CRA performance. The OCC stated that it was doing so in order to make the CRA regulatory framework more objective, transparent, consistent in application, and reflective of changes in banking and thereby better achieve the statutory purpose of encouraging banks to serve the needs of their communities, particularly LMI neighborhoods and other communities that have been underserved. The final rule (i) clarifies and expands the activities that qualify for CRA credit; (ii) updates the definition of the assessment areas where activities are evaluated for CRA purposes; (iii) creates a more consistent and objective method for evaluating CRA performance; and (iv) provides for more timely and transparent CRA-related data collection, recordkeeping, and reporting. The OCC indicated that it was deferring to a future rulemaking the decision for how to calibrate the thresholds and benchmarks used in the rule to determine the level of performance necessary for a bank to achieve a specific performance rating. The final rule became effective on October 1, 2020. Large national banks, like KeyBank, are required to comply with the rule by January 1, 2023.

On September 21, 2020, the Federal Reserve issued an Advance Notice of Proposed Rulemaking (“ANPR”) requesting public comment on ways to modernize CRA regulations by strengthening, clarifying, and tailoring them to reflect the current banking landscape and better achieve the core purpose of the CRA. The ANPR seeks public feedback on ways to evaluate how banks meet the needs of LMI communities and address inequities in credit

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access. When it issued the ANPR, the Federal Reserve said that it hoped the ANPR would provide a foundation for the federal banking agencies to come together on a consistent approach to CRA regulation that has broad support among all stakeholders. Comments are due on February 16, 2021. If the federal banking agencies agree on a consistent approach to revising their CRA regulations, KeyBank will be required to comply with the revised regulations.

Regulatory developments concerning COVID-19

Federal, state, and local governments have adopted various statutes, rules, regulations, orders, and guidelines in order to address the COVID-19 pandemic and the adverse economic effects of this pandemic on individuals, families, businesses, and governments. Financial institutions, including Key, are affected by many of these measures, including measures that are broadly applicable to businesses operating in the communities where Key does business. Financial services firms, like other businesses, are required to operate in a manner that seeks to protect the health and safety of their customers and employees.

During the COVID-19 crisis, the federal banking agencies issued a number of statements encouraging financial institutions to meet the financial needs of their customers and have taken steps to provide financial institutions with additional flexibility to meet their customers’ needs. Certain of these steps are discussed above under the headings “Supervision and Regulation — Regulatory capital requirements — Recent regulatory capital-related developments” and “Supervision and Regulation — Capital planning and stress testing.” In addition, the federal banking agencies along with state bank regulators issued an interagency statement on March 22, 2020, addressing loan modifications that are made by financial institutions for borrowers affected by the COVID-19 crisis. The agencies stated that short-term loan modifications made on a good faith basis in response to COVID-19 for borrowers who were current prior to any relief do not need to be categorized as TDRs and that financial institutions are not expected to designate loans with deferrals granted due to COVID-19 as past due because of the deferral.

The CARES Act, enacted on March 27, 2020, contains a number of provisions that affect banking organizations. The CARES Act provides funding for various programs under which the federal government will lend to, guarantee loans to, or make investments in, businesses. Banking organizations are expected to play a role in some of these programs, and when they do so, they will be subject to certain requirements. One of these programs is the PPP, a program administered by the Small Business Administration (the “SBA”) to provide loans to small businesses for payroll and other basic expenses during the COVID-19 crisis. The loans can be made by SBA-certified lenders and are 100% guaranteed by the SBA. The loans are eligible to be forgiven if certain conditions are satisfied, in which event the SBA will make payment to the lender for the forgiven amounts. KeyBank has participated in the PPP as a lender.

The CARES Act also authorizes temporary changes to certain provisions applicable to banking organizations. Among other changes, the CARES Act gives financial institutions the right to elect to suspend GAAP principles and regulatory determinations for loan modifications relating to COVID-19 that would otherwise be categorized as TDRs from March 1, 2020, through the earlier of December 31, 2020, or 60 days after the COVID-19 national emergency ends. In addition, the CARES Act requires mortgage servicers to grant, on a borrower’s request, forbearance for up to 180 days (which can be extended for an additional 180 days) on a federally-backed single-family mortgage loan or forbearance for up to 30 days (which can be extended for two additional 30-day periods) on a federally-backed multi-family mortgage loan when the borrowers experience financial hardship as a result of the COVID-19 emergency.

On April 3, 2020, federal banking agencies along with state bank regulators issued a joint statement indicating that the agencies do not plan to take supervisory or enforcement action against mortgage servicers for delays in taking loss-mitigation actions or sending notices required by the mortgage servicing rules if they provide short-term forbearance on mortgage loans to borrowers facing hardships relating to the COVID-19 emergency, including forbearance provided in accordance with the CARES Act, provided that the mortgage servicers make good faith efforts to take these actions and send these notices within a reasonable time.

On April 7, 2020, the federal banking agencies, in consultation with state bank regulators, issued an interagency statement clarifying the interaction between (i) their earlier statement discussing whether loan modifications relating to COVID-19 need to be treated as TDRs; and (ii) the CARES Act provision on this subject. In this interagency statement, the agencies also said that when exercising supervisory and enforcement responsibility with respect to consumer protection requirements, they will take into account the unique circumstances impacting borrowers and institutions resulting from the COVID-19 emergency and that they do not expect to take a consumer compliance

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public enforcement action against an institution, provided that the circumstances were related to this emergency and the institution made good faith efforts to support borrowers and comply with the consumer protection requirements and addressed any needed corrective action.

The Federal Reserve has established several lending facilities that are intended to support the flow of credit to households, businesses, and governments. One of these facilities is the Paycheck Protection Program Liquidity Facility (“PPPLF”) which was set up to allow the Federal Reserve Banks to extend credit to financial institutions that originate PPP loans, taking the loans as collateral at face value. On April 9, 2020, the federal banking agencies issued an interim final rule to allow banking organizations to neutralize the effect of PPP loans financed under the PPPLF on the leverage capital ratios of these organizations. On September 29, 2020, the federal banking agencies announced their adoption of this interim final rule as a final rule. In addition, on June 22, 2020, the FDIC issued a final rule that mitigates the impact of PPP lending on banks’ deposit insurance assessments. Also, in accordance with the CARES Act, a PPP loan will be assigned a risk weight of zero percent under the federal banking agencies’ risk-based capital rules.

On June 23, 2020, the federal banking agencies, in conjunction with state bank regulators, issued interagency examiner guidance outlining supervisory principles for assessing the safety and soundness of banks given the ongoing impact of the COVID-19 pandemic. The agencies stated that they will consider the unique, evolving, and potentially long-term nature of the issues that banks are confronting and will exercise appropriate flexibility in their supervisory response. The agencies said that they will continue to assess institutions in accordance with existing agency policies and procedures and will consider whether a bank’s management has managed risk appropriately, including taking appropriate actions in response to stresses caused by the COVID-19 pandemic.

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, 2019, to the three months ended September 30, 2020 (dollars in millions):

The following discussion explains the key factors that caused these elements to change. Given our inability to estimate the impact of COVID-19 on our business and operations in 2020, we previously withdrew our financial outlook for the full-year 2020 that was issued on January 23, 2020.

Net interest income

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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.

TE net interest income was $1.0 billion for the third quarter of 2020, compared to TE net interest income of $980 million for the third quarter of 2019. The increase in net interest income reflects higher earning asset balances partially offset by a lower net interest margin. The net interest margin was impacted by lower interest rates and a change in balance sheet mix, including elevated levels of liquidity and our participation in the PPP.

For the nine months ended September 30, 2020, TE net interest income was $3.0 billion, an increase of $66 million from the same period last year. The increase in net interest income reflects higher earning asset balances partly offset by a lower net interest margin. Similar to the third quarter of 2020, the lower net interest margin reflects lower interest rates and a lag in deposit pricing as interest rates declined, elevated levels of liquidity, and our participation in the PPP.

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Average loans were $104.9 billion for the third quarter of 2020, an increase of $13.0 billion compared to the third quarter of 2019. Commercial loans increased $9.4 billion, reflecting growth from the PPP, as well as core broad-based growth in commercial and industrial loans and increased utilization versus the year-ago period. Consumer loans increased $3.6 billion, driven by strength from Laurel Road and Key's consumer mortgage business.

Average deposits totaled $134.9 billion for the third quarter of 2020, an increase of $24.7 billion compared to the year-ago quarter, reflecting growth from consumer and commercial relationships, partially offset by a decline in time deposits as a result of lower interest rates.

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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, 2020						Three months ended September 30, 2019						Change in Net interest income due to
dollars in millions	Average Balance		Interest (a)		Yield/ Rate (a)		Average Balance		Interest (a)		Yield/ Rate (a)		Volume		Yield/Rate		Total
ASSETS
Loans (b), (c)
Commercial and industrial (d)	$	57,067	$	474	3.31	%	$	48,322	$	543	4.46	%	$	88	$	(157)	$	(69)
Real estate — commercial mortgage	13,202		117		3.54		13,056		163		4.95		2		(48)		(46)
Real estate — construction	1,987		18		3.57		1,463		19		5.22		6		(7)		(1)
Commercial lease financing	4,488		35		3.10		4,497		42		3.68		—		(7)		(7)
Total commercial loans	76,744		644		3.34		67,338		767		4.52		96		(219)		(123)
Real estate — residential mortgage	8,398		73		3.46		6,256		62		3.97		19		(8)		11
Home equity loans	9,580		91		3.82		10,488		132		4.97		(11)		(30)		(41)
Consumer direct loans	4,403		56		5.07		2,548		45		6.99		26		(15)		11
Credit cards	967		25		10.24		1,100		32		11.59		(4)		(3)		(7)
Consumer indirect loans	4,827		44		3.66		4,226		43		4.10		6		(5)		1
Total consumer loans	28,175		289		4.10		24,618		314		5.07		36		(61)		(25)
Total loans	104,919		933		3.55		91,956		1,081		4.67		132		(280)		(148)
Loans held for sale	1,924		18		3.61		1,558		18		4.65		4		(4)		—
Securities available for sale (b), (e)	24,941		115		1.90		21,867		136		2.52		17		(38)		(21)
Held-to-maturity securities (b)	8,677		53		2.44		10,684		64		2.41		(12)		1		(11)
Trading account assets	686		3		2.08		884		7		3.00		(1)		(3)		(4)
Short-term investments	12,525		1		.04		2,861		16		2.19		13		(28)		(15)
Other investments (e)	640		2		1.49		624		3		1.82		—		(1)		(1)
Total earning assets	154,312		1,125		2.93		130,434		1,325		4.05		153		(353)		(200)
Allowance for loan and lease losses	(1,696)						(881)
Accrued income and other assets	16,195						14,605
Discontinued assets	752						957
Total assets	$	169,563					$	145,115
LIABILITIES
NOW and money market deposit accounts	$	80,175	26		.13		$	64,595	154		.94		30		(158)		(128)
Savings deposits	5,478		1		.04		4,709		1		.10		—		—		—
Certificates of deposit ($100,000 or more)	3,862		16		1.60		7,625		45		2.37		(18)		(11)		(29)
Other time deposits	3,735		11		1.17		5,449		27		1.96		(7)		(9)		(16)
Total interest-bearing deposits	93,250		54		.23		82,378		227		1.09		5		(178)		(173)
Federal funds purchased and securities sold under repurchase agreements	225		—		.05		187		—		.50		—		—		—
Bank notes and other short-term borrowings	761		1		.68		626		4		2.04		1		(4)		(3)
Long-term debt (f), (g)	12,801		64		2.12		13,347		114		3.51		(4)		(46)		(50)
Total interest-bearing liabilities	107,037		119		.45		96,538		345		1.42		2		(228)		(226)
Noninterest-bearing deposits	41,694						27,901
Accrued expense and other liabilities	2,350						2,605
Discontinued liabilities (g)	752						957
Total liabilities	151,833						128,001
EQUITY
Key shareholders’ equity	17,730						17,113
Noncontrolling interests	—						1
Total equity	17,730						17,114
Total liabilities and equity	$	169,563					$	145,115
Interest rate spread (TE)					2.48	%					2.63	%
Net interest income (TE) and net interest margin (TE)			1,006		2.62	%			980		3.00	%	$	151	$	(125)	26
TE adjustment (b)			6						8
Net interest income, GAAP basis			$	1,000					$	972

(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, 2020, and September 30, 2019.

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

(d)Commercial and industrial average balances include $129 million and $144 million of assets from commercial credit cards for the three months ended September 30, 2020, and September 30, 2019, respectively.

(e)Yield is calculated on the basis of amortized cost.

(f)Rate calculation excludes basis adjustments related to fair value hedges.

(g)A portion of long-term debt and the related interest expense is allocated to discontinued liabilities as a result of applying our matched funds transfer pricing methodology to discontinued operations.

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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, 2020						Nine months ended September 30, 2019						Change in Net interest income due to
dollars in millions	Average Balance		Interest (a)		Yield/ Rate (a)		Average Balance		Interest (a)		Yield/ Rate (a)		Volume		Yield/Rate		Total
ASSETS
Loans (b), (c)
Commercial and industrial (d)	$	55,676	$	1,500	3.60	%	$	47,191	$	1,622	4.59	%	$	263	$	(385)	$	(122)
Real estate — commercial mortgage	13,419		400		3.98		13,744		517		5.03		(12)		(105)		(117)
Real estate — construction	1,804		55		4.06		1,482		60		5.37		12		(17)		(5)
Commercial lease financing	4,546		107		3.15		4,490		124		3.66		2		(19)		(17)
Total commercial loans	75,445		2,062		3.65		66,907		2,323		4.64		265		(526)		(261)
Real estate — residential mortgage	7,801		210		3.59		5,866		176		4.00		54		(20)		34
Home equity loans	9,894		301		4.07		10,726		404		5.03		(30)		(73)		(103)
Consumer direct loans	4,089		165		5.38		2,256		125		7.42		81		(41)		40
Credit cards	1,010		81		10.68		1,099		95		11.55		(7)		(7)		(14)
Consumer indirect loans	4,779		135		3.78		3,951		122		4.13		24		(11)		13
Total consumer loans	27,573		892		4.32		23,898		922		5.15		122		(152)		(30)
Total loans	103,018		2,954		3.83		90,805		3,245		4.77		387		(678)		(291)
Loans held for sale	2,090		58		3.68		1,329		46		4.64		22		(10)		12
Securities available for sale (b), (e)	22,297		365		2.25		21,059		400		2.52		23		(58)		(35)
Held-to-maturity securities (b)	9,274		171		2.46		11,035		199		2.41		(32)		4		(28)
Trading account assets	837		16		2.55		988		24		3.22		(3)		(5)		(8)
Short-term investments	7,412		14		.24		2,930		49		2.23		33		(68)		(35)
Other investments (e)	642		3		.72		639		11		2.18		—		(8)		(8)
Total earning assets	145,570		3,581		3.30		128,785		3,974		4.12		430		(823)		(393)
Allowance for loan and lease losses	(1,403)						(880)
Accrued income and other assets	15,579						14,414
Discontinued assets	794						1,010
Total assets	$	160,540					$	143,329
LIABILITIES
NOW and money market deposit accounts	$	74,087	194		.35		$	62,827	431		.92		67		(304)		(237)
Savings deposits	5,089		2		.04		4,767		3		.09		—		(1)		(1)
Certificates of deposit ($100,000 or more)	5,036		74		1.96		8,046		140		2.33		(47)		(19)		(66)
Other time deposits	4,321		49		1.53		5,506		78		1.90		(15)		(14)		(29)
Total interest-bearing deposits	88,533		319		.48		81,146		652		1.07		5		(338)		(333)
Federal funds purchased and securities sold under repurchase agreements	821		6		.95		262		1		.63		3		2		5
Bank notes and other short-term borrowings	1,674		11		.87		706		13		2.43		10		(12)		(2)
Long-term debt (f), (g)	12,733		225		2.45		13,241		354		3.62		(13)		(116)		(129)
Total interest-bearing liabilities	103,761		561		.73		95,355		1,020		1.43		5		(464)		(459)
Noninterest-bearing deposits	35,922						28,016
Accrued expense and other liabilities	2,518						2,493
Discontinued liabilities (g)	794						1,010
Total liabilities	142,995						126,874
EQUITY
Key shareholders’ equity	17,545						16,454
Noncontrolling interests	—						1
Total equity	17,545						16,455
Total liabilities and equity	$	160,540					$	143,329
Interest rate spread (TE)					2.57	%					2.69	%
Net interest income (TE) and net interest margin (TE)			3,020		2.78	%			2,954		3.06	%	$	425	$	(359)	$	66
TE adjustment (b)			21						24
Net interest income, GAAP basis			$	2,999					$	2,930

(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, 2020, and September 30, 2019, respectively.

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

(d)Commercial and industrial average balances include $137 million and $139 million of assets from commercial credit cards for the nine months ended September 30, 2020, and September 30, 2019, respectively.

(e)Yield is calculated on the basis of amortized cost.

(f)Rate calculation excludes basis adjustments related to fair value hedges.

(g)A portion of long-term debt and the related interest expense is allocated to discontinued liabilities as a result of applying Key’s matched funds transfer pricing methodology to discontinued operations.

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Provision for credit losses

Our provision for credit losses was $160 million for the three months ended September 30, 2020, compared to $200 million for the three months ended September 30, 2019. The provision for credit losses was $1.0 billion for the nine months ended September 30, 2020, compared to $336 million for the nine months ended September 30, 2019. We adopted the CECL accounting standard effective January 1, 2020, and the economic scenario used in the estimation of expected credit losses as of September 30, 2020, was materially affected by the COVID-19 pandemic. During the third quarter of 2019, our provision for credit losses was impacted by the realization of $123 million from a previously disclosed fraud loss.

Noninterest income

As shown in Figure 5, noninterest income was $681 million, and represented 40% of total revenue for the third quarter of 2020, compared to $650 million, representing 40% of total revenue, for the year-ago quarter.

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, commercial 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, 2020, trust and investment services income increased $10 million,

or 8.5%, compared to the same period one year ago. For the nine months ended September 30, 2020, trust and investment services income increased $29 million, or 8.2%, from the nine months ended September 30, 2019. These increases were primarily due to an increase in trust and asset management fees partially related to higher levels of assets under management.

A significant portion of our trust and investment services income depends on the value and mix of assets under management. At September 30, 2020, our bank, trust, and registered investment advisory subsidiaries had assets under management of $41.3 billion, compared to $39.4 billion at September 30, 2019. Assets under management were up, as shown in Figure 6, due to increased portfolio yields.

Figure 6. Assets Under Management 

in millions	September 30, 2020		June 30, 2020		March 31, 2020		December 31, 2019		September 30, 2019
Assets under management by investment type:
Equity	$	24,851	$	23,303	$	20,421	$	25,271	$	23,967
Securities lending	130		171		188		309		455
Fixed income	11,767		11,318		10,911		11,000		10,954
Money market	4,564		4,930		4,669		4,253		4,040
Total assets under management	$	41,312	$	39,722	$	36,189	$	40,833	$	39,416

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 for the three months ended September 30, 2020, decreased $30 million, or 17.0%, from the year-ago quarter. For the nine months ended September 30, 2020, investment banking and debt placement fees decreased $31 million, or 6.9%, from the nine months ended September 30, 2019. These decreases were primarily driven by lower syndication and merger and acquisition fees, partially offset by higher gains on the sales of commercial mortgages.

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Service charges on deposit accounts

Service charges on deposit accounts decreased $9 million, or 10.5%, for the three months ended September 30, 2020, compared to the same period one year ago. For the nine months ended September 30, 2020, service charges on deposit accounts decreased $22 million, or 8.8%, from the nine months ended September 30, 2019. These decreases were primarily due to lower customer spending and higher fee waivers related to the ongoing COVID-19 pandemic.

Cards and payments income

Cards and payments income, which consists of debit card, prepaid card, consumer and commercial credit card, and merchant services income, increased $45 million, or 65.2%, for the three months ended September 30, 2020, compared to the same period one year ago. For the nine months ended September 30, 2020, cards and payments income increased $63 million, or 30.3%, from the nine months ended September 30, 2019. These increases were driven by increased prepaid card activity due to state support program activity.

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, commercial mortgage servicing fees, and other income. Other noninterest income for the three months ended September 30, 2020, increased $15 million, or 7.5%, from the year-ago quarter, primarily due to higher consumer mortgage income driven by strong loan originations and related fees.

For the nine months ended September 30, 2020, other noninterest income was up $3 million, or .6%, from the nine months ended September 30, 2019, primarily due to higher consumer mortgage income driven by strong loan originations and related fees. Partially offsetting this was a decline in other income related to market-related valuation adjustments of customer derivatives due to the significant increase in credit spreads, as well as trading losses and portfolio marks also related to the widening credit spreads in the market that occurred in the first quarter of 2020.

Noninterest expense

As shown in Figure 7, noninterest expense was $1.0 billion for the third quarter of 2020, compared to $939 million for 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, increased by $41 million, or 7.5%, for the three months ended September 30, 2020, compared to the same period one year ago reflected higher production-related incentives, merit increases, and employee benefits costs, as well as higher FTE count compared to the year ago quarter. For the nine months ended September 30, 2020, personnel expense was down $24 million, or 1.4%, from the nine months ended September 30, 2019, primarily due to lower severance expenses.

Net occupancy

Net occupancy expense increased $4 million, or 5.6%, for the third quarter of 2020, compared to the same period one year ago. For the nine months ended September 30, 2020, net occupancy expense increased $6 million, or 2.8%, from the nine months ended September 30, 2019. These increases were primarily due to higher property reserve expenses and cleaning expenses related to the steps that we have taken to ensure the health and safety of teammates and customers during the ongoing COVID-19 outbreak.

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 for the three months ended September 30, 2020, increased $41 million, or 18.3%, from the year-ago quarter. For the nine months ended September 30, 2020, other noninterest expense was up $61 million, or 8.6%, from the nine months ended September 30, 2019. These increases were primarily related to higher payments-related expenses from prepaid card activity incurred during the three and nine months ended September 30, 2020.

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Income taxes

We recorded tax expense of $60 million for the third quarter of 2020 and $70 million for the third quarter of 2019.

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 14 (“Income Taxes”) beginning on page 148 of our 2019 Form 10-K.

Business Segment Results

This section summarizes the financial performance of our two major business segments (operating segments): Consumer Bank and Commercial Bank. Note 20 (“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. For more information on the segment imperatives and market and business overview, see “Business Segment Results” beginning on page 50 of our 2019 Form 10-K. Dollars in the charts are presented in millions.

Consumer Bank

Summary of operations

•Net income attributable to Key of $241 million for the third quarter of 2020, compared to $196 million for the year-ago quarter

•Taxable-equivalent net interest income increased by $9 million, or 1.5%, compared to the third quarter of 2019, as a result of strong balance sheet growth, partially offset by the lower interest rate environment

•Average loans and leases increased $8.7 billion, or 26.6%, driven by benefit from the PPP, as well as growth from consumer mortgage and Laurel Road

•Average deposits increased $10.2 billion, or 13.9%, from the third quarter of 2019, driven by consumer stimulus payments and relationship growth

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•Provision for credit losses decreased $64 million compared to the third quarter of 2019, due to the recapture of provision between the second and third quarters of 2020 from lower net charge-offs and a reduced allowance, driven by improved macroeconomic factors and continued strength in client credit quality

•Noninterest income increased $29 million, or 12.2%, from the year ago quarter, driven by strength in consumer mortgage income and higher trust and investment services income, partially offset by lower consumer spend activity

•Noninterest expense increased $42 million, or 7.9%, from the year ago quarter driven by higher variable expenses from production-related incentives and higher loan volumes

Commercial Bank

Summary of operations

•Net income attributable to Key of $160 million for the third quarter of 2020, compared to $301 million for the year-ago quarter

•Taxable-equivalent net interest income increased by $22 million, or 5.5%, compared to the third quarter of 2019, with balance sheet growth partially offset by the lower interest rate environment

•Average loan and lease balances increased $4.7 billion, or 8.1%, compared to the third quarter of 2019, driven by growth in commercial and industrial loans from line draws and PPP loans

•Average deposit balances increased $15 billion, or 41.5%, compared to the third quarter of 2019, driven by growth in targeted relationships and the impact of government programs

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•Provision for credit losses increased $131 million compared to the third quarter of 2019, driven by an increase in net charge-offs and higher reserve levels

•Noninterest income increased $2 million, from the third quarter of 2019, as higher cards and payments income related to prepaid card revenue was partially offset by declines in investment banking and corporate services income

•Noninterest expense increased by $65 million, or 17.2%, from the third quarter of 2019 driven by elevated variable expenses related to prepaid card

Financial Condition

Loans and loans held for sale

Figure 8. Breakdown of Loans at September 30, 2020

(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, 2020, total loans outstanding from continuing operations were $103.1 billion, compared to $94.6 billion at December 31, 2019. 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” starting on page 100 of our 2019 Form 10-K.

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COVID-19 Hardship Relief Programs

In response to the COVID-19 pandemic, beginning in March 2020, we began providing relief and flexibility to our customers through a variety of solutions, including fee waivers, short-term loan modifications, and payment deferrals as well as the suspension of vehicle repossessions and home foreclosures. While the solutions for our commercial borrowers are individually negotiated and tailored to each borrower’s specific facts and circumstances, the most commonly offered relief measures included temporary covenant waivers and/or deferrals of principal and/or interest payments for up to 90 days. We have also granted short-term loan modifications for our consumer loan customers through extensions, deferrals, and forbearance. As of September 30, 2020, commercial loans with an aggregate outstanding balance of $3.1 billion, representing 4.4% of the commercial portfolio, have been modified as a result of a COVID-19 hardship. As of September 30, 2020, consumer loans with an aggregate outstanding balance of $1.8 billion, representing 6.2% of the consumer portfolio, have been modified as a result of a COVID-19 hardship.

Under the CARES Act as well as banking regulator interagency guidance, certain loan modifications to borrowers experiencing financial distress as a result of the economic impacts created by COVID-19 may not be required to be treated as TDRs under U.S. GAAP.  For COVID-19 related loan modifications which occurred from March 1, 2020, through September 30, 2020, and met the loan modification criteria under either the CARES Act or the criteria specified by the regulatory agencies or were otherwise considered to be short term in nature, we have elected to suspend TDR accounting for such loan modifications.  Additionally, loans qualifying for these modifications are not required to be reported as delinquent, nonaccrual, impaired, or criticized solely as a result of a COVID-19 loan modification. Refer to Note 4 (“Asset Quality”) under the headings “TDRs” and “Nonperforming and Past Due Loans”.

For loans that receive a payment deferral or forbearance under these hardship relief programs, we continue to accrue interest and recognize interest income during the period of the deferral. Depending on the terms of each program, all or a portion of this accrued interest may be paid directly by the borrower (either during the relief period, at the end of the relief period, or at maturity of the loan) or added to the customer’s outstanding balance. For certain programs, the maturity date of the loan may also be extended by the number of payments deferred. Interest income will continue to be accrued at the original contractual interest rate unless that rate is concurrently modified upon entering the relief program (in which case, the modified rate would be used to recognize interest).

Commercial loan portfolio

Commercial loans outstanding were $74.5 billion at September 30, 2020, an increase of $6.4 billion, or 9.5%, compared to December 31, 2019, driven by the funding of over $8 billion of loans related to the PPP partly offset by a decline in commercial and industrial utilization rates.

As a result of the current economic environment, our commercial loan portfolio is going through active portfolio surveillance. We are conducting ongoing portfolio reviews on our commercial loans with any risk rating migrations being closely monitored. We have centralized internal reporting on enterprise-wide relief initiatives, as well as following any potential relief initiatives that may come in the future. We have also established a pandemic watchlist and are performing ongoing reviews of commercial clients that are likely to be impacted by COVID-19. Overall, most of these clients represent a small portion of the overall portfolio and are diversified by type and geography. Figure 9 summarizes our commercial portfolios that are at risk of being impacted by the COVID-19 pandemic as of September 30, 2020.

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Figure 9. Select Commercial Portfolio Focus Areas

dollars in millions	Outstanding as of September 30, 2020		Outstanding as of June 30, 2020		Percentage of total loans as of September 30, 2020
Consumer behavior (a)	$	5,020	$	5,206	4.9	%
Education	1,568		1,592		1.5
Sports	642		622		.6
Restaurants	396		413		.4
Retail commercial real estate (b)	640		684		.6
Nondurable retail (c)	632		752		.6
Travel/Tourism (d)	2,786		2,994		2.7
Hotels	851		905		.8
Leveraged lending (e)	1,859		1,891		1.8
Oil and gas	2,095		2,356		2.0
Upstream (reserve based)	1,391		1,505		1.3
Midstream	400		424		.4
Downstream	104		161		.1

(a)Consumer behavior includes restaurants, sports, entertainment and leisure, services, education, etc.

(b)Retail commercial real estate is mainly composed of regional malls, strip centers (unanchored) and lifestyle centers.

(c)Nondurable retail includes direct lending to retailers including apparel, hobby shops, nursery garden centers, cosmetics, and gas stations with convenience stores.

(d)Travel/Tourism includes hotels, tours, and air/water/rail leasing.

(e)Leveraged lending exposures have total debt to EBITDA greater than four times or senior debt to EBITDA greater than three times and meet the purpose test (the new debt finances a buyout, acquisition, or capital distribution).

Figure 10 provides our commercial loan portfolios by industry classification at September 30, 2020, and December 31, 2019.

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Figure 10. Commercial Loans by Industry

September 30, 2020	Commercial and industrial		Commercial real estate		Commercial lease financing		Total commercial loans		Percent of total
dollars in millions
Industry classification:
Agriculture	$	1,027	$	151	$	108	$	1,286	1.7	%
Automotive	1,732		479		21		2,232		3.0
Business products	1,576		112		45		1,733		2.3
Business services	4,486		203		201		4,890		6.6
Chemicals	781		34		38		853		1.1
Commercial real estate	5,526		10,640		11		16,177		21.7
Construction materials and contractors	2,674		258		242		3,174		4.3
Consumer discretionary	3,963		395		379		4,737		6.3
Consumer services	6,863		904		532		8,299		11.1
Equipment	1,568		78		118		1,764		2.5
Finance	6,066		95		388		6,549		8.8
Healthcare	4,169		1,354		333		5,856		7.9
Metals and mining	1,034		54		39		1,127		1.5
Oil and gas	2,041		44		76		2,161		2.9
Public exposure	2,286		24		716		3,026		4.1
Technology	789		22		194		1,005		1.3
Transportation	1,480		147		644		2,271		3.0
Utilities	6,102		1		357		6,460		8.7
Other	862		11		8		881		1.2
Total	$	55,025	$	15,006	$	4,450	$	74,481	100.0	%
December 31, 2019	Commercial and industrial		Commercial real estate		Commercial lease financing		Total commercial loans		Percent of total
dollars in millions
Industry classification:
Agriculture	$	1,036	$	178	$	112	$	1,326	1.9	%
Automotive	2,048		467		18		2,533		3.7
Business products	1,513		111		57		1,681		2.5
Business services	3,083		203		210		3,496		5.2
Chemicals	776		40		46		862		1.3
Commercial real estate	5,126		10,469		12		15,607		22.9
Construction materials and contractors	1,876		238		244		2,358		3.5
Consumer discretionary	3,646		400		467		4,513		6.6
Consumer services	4,567		863		535		5,965		8.8
Equipment	1,428		76		98		1,602		2.4
Finance	6,186		64		386		6,636		9.7
Healthcare	3,000		1,564		331		4,895		7.2
Metals and mining	1,117		44		41		1,202		1.8
Oil and gas	2,219		54		90		2,363		3.5
Public exposure	2,422		24		706		3,152		4.6
Technology	916		27		182		1,125		1.6
Transportation	1,298		218		737		2,253		3.3
Utilities	5,560		2		397		5,959		8.8
Other	478		7		19		504		.7
Total	$	48,295	$	15,049	$	4,688	$	68,032	100.0	%

Commercial and industrial. Commercial and industrial loans are the largest component of our loan portfolio, representing 53% of our total loan portfolio at September 30, 2020, and 51% at December 31, 2019. This portfolio is approximately 72% variable rate and consists of loans originated primarily to large corporate, middle market, and small business clients.

Commercial and industrial loans totaled $55.0 billion at September 30, 2020, an increase of $6.7 billion, or 13.9%, compared to December 31, 2019. The growth was broad-based and spread across most industry categories, as the impact of COVID-19 resulted in over $8 billion of loans related to the PPP partly offset by a decline in commercial line utilization rates.

Commercial real estate loans. Our commercial real estate portfolio includes both mortgage and construction loans and is originated through two primary sources: our 15-state banking franchise, and KeyBank Real Estate Capital, a national line of business within the Commercial Bank that cultivates relationships with owners of commercial real estate located both within and beyond the branch system. Nonowner-occupied properties, generally properties for which at least 50% of the debt service is provided by rental income from nonaffiliated third parties, represented 80% of total commercial real estate loans outstanding at September 30, 2020. 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 13% of commercial real estate loans at period end.

At September 30, 2020, commercial real estate loans totaled $15.0 billion, which includes $1.9 billion of construction loans. Compared to December 31, 2019, this portfolio decreased $43 million, or .3%. We continue to

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focus primarily on owners of completed and stabilized commercial real estate in accordance with our relationship strategy.

As shown in Figure 11, 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 11. 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, 2020
Nonowner-occupied:
Retail properties	$	120	$	16	$	130	$	123	$	71	$	462	$	94	$	1,016	6.8	%	$	51	$	965
Multifamily properties	612		247		863		855		1,353		1,540		255		5,725		38.1		1,461		4,264
Health facilities	75		74		85		88		169		478		338		1,307		8.7		73		1,234
Office buildings	274		—		276		153		183		651		144		1,681		11.2		48		1,633
Warehouses	53		33		84		70		47		260		138		685		4.6		59		626
Manufacturing facilities	41		—		36		5		40		34		33		189		1.3		—		189
Hotels/Motels	76		—		19		—		12		116		98		321		2.1		20		301
Residential properties	—		—		—		3		—		63		—		66		.4		3		63
Land and development	17		5		—		2		2		28		—		54		.4		30		24
Other	107		22		6		89		104		253		375		956		6.4		64		892
Total nonowner-occupied	1,375		397		1,499		1,388		1,981		3,885		1,475		12,000		80.0		1,809		10,191
Owner-occupied	841		4		286		482		65		1,328		—		3,006		20.0		138		2,868
Total	$	2,216	$	401	$	1,785	$	1,870	$	2,046	$	5,213	$	1,475	15,006		100.0	%	$	1,947	$	13,059
Nonperforming loans	$	1	—		—		$	8	$	6	$	45	$	44	$	104	N/M		$	1	$	103
Accruing loans past due 90 days or more	—		—		—		1		—		18		—		19		N/M		1		18
Accruing loans past due 30 through 89 days	2		$	2	$	5	5		1		25		—		40		N/M		2		38
December 31, 2019
Nonowner-occupied:
Retail properties	$	133	$	41	$	143	$	155	$	161	$	580	$	124	$	1,337	8.9	%	$	85	$	1,252
Multifamily properties	698		354		767		795		1,205		1,350		225		5,394		35.8		1,189		4,205
Health facilities	76		44		104		93		163		497		405		1,382		9.2		40		1,342
Office buildings	214		7		293		132		244		725		134		1,749		11.6		69		1,680
Warehouses	51		34		51		51		46		238		134		605		4.0		7		598
Manufacturing facilities	36		—		38		4		40		43		54		215		1.4		5		210
Hotels/Motels	76		—		19		—		12		129		57		293		1.9		6		287
Residential properties	—		—		—		2		—		98		—		100		.7		5		95
Land and development	20		5		—		3		2		9		—		39		.3		34		5
Other	80		9		71		86		22		259		358		885		5.9		23		862
Total nonowner-occupied	1,384		494		1,486		1,321		1,895		3,928		1,491		11,999		79.7		1,463		10,536
Owner-occupied	833		4		285		536		71		1,321		—		3,050		20.3		95		2,955
Total	$	2,217	$	498	$	1,771	$	1,857	$	1,966	$	5,249	$	1,491	$	15,049	100.0	%	$	1,558	$	13,491
Nonperforming loans	$	1	—		—		$	7	$	7	$	20	$	52	$	87	N/M		$	2	$	85
Accruing loans past due 90 days or more	—		—		—		2		—		11		—		13		N/M		1		12
Accruing loans past due 30 through 89 days	1		—		—		7		—		8		—		16		N/M		2		14

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 as of September 30, 2020, increased by $2.0 billion, or 7.5%, from December 31, 2019, driven by growth from the consumer mortgage business, Laurel Road, and indirect auto loans. On October 21, 2020, we announced that we would no longer originate indirect auto loans. The current portfolio of approximately $4.6 billion will run off over time.

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 33% of consumer loans outstanding at September 30, 2020. 

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We held the first lien position for approximately 64% of the home equity portfolio at September 30, 2020, and 61% at December 31, 2019. 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 (“Basis of Presentation and Accounting Policies”) under the heading “Allowance for Loan and Lease Losses” of this report.

Figure 12. Consumer Loans by State

in millions	Real estate — residential mortgage		Home equity loans		Consumer direct loans		Credit cards		Consumer indirect loans		Total
September 30, 2020
New York	$	1,178	$	2,539	$	586	$	346	$	778	$	5,427
Ohio	689		1,365		476		213		987		3,730
Washington	1,635		1,364		239		86		16		3,340
Pennsylvania	292		648		241		50		556		1,787
California	388		15		268		4		21		696
Texas	51		8		208		3		11		281
Colorado	775		368		134		29		5		1,311
Connecticut	952		351		83		24		150		1,560
Oregon	671		792		95		41		3		1,602
Massachusetts	239		46		93		5		476		859
Other	1,845		1,992		1,972		169		2,029		8,007
Total	$	8,715	$	9,488	$	4,395	$	970	$	5,032	$	28,600
	Real estate — residential mortgage		Home equity loans		Consumer direct loans		Credit cards		Consumer indirect loans		Total
December 31, 2019
New York	$	1,146	$	2,655	$	548	$	404	$	797	$	5,550
Ohio	601		1,458		461		247		827		3,594
Washington	1,126		1,546		252		102		8		3,034
Pennsylvania	282		677		189		55		477		1,680
Connecticut	1,029		375		68		26		154		1,652
Oregon	517		852		94		48		2		1,513
Colorado	544		428		109		34		2		1,117
Maine	123		434		71		38		359		1,025
Indiana	117		412		131		47		118		825
Massachusetts	257		48		62		6		437		810
Other	1,281		1,389		1,528		123		1,493		5,814
Total	$	7,023	$	10,274	$	3,513	$	1,130	$	4,674	$	26,614

Figure 13 summarizes our loan sales for the first nine months of 2020 and all of 2019.

Figure 13. Loans Sold (Including Loans Held for Sale)  

in millions	Commercial		Commercial Real Estate		Commercial Lease Financing		Residential Real Estate		Consumer Direct		Total
2020
Third quarter	$	163	$	1,999	$	67	$	1,235	$	208	$	3,672
Second quarter	82		2,661		47		925		—		3,715
First quarter	55		2,022		81		546		—		2,704
Total	$	300	$	6,682	$	195	$	2,706	$	208	$	10,091
2019
Fourth quarter	$	50	$	3,138	$	222	$	559	—		$	3,969
Third quarter	220		2,600		68		569		$	247	3,704
Second quarter	154		1,864		96		329		—		2,443
First quarter	301		1,536		34		225		—		2,096
Total	$	725	$	9,138	$	420	$	1,682	$	247	$	12,212

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Figure 14 shows loans that are either administered or serviced by us, but not recorded on the balance sheet; this includes loans that were sold.

Figure 14. Loans Administered or Serviced  

in millions	September 30, 2020		June 30, 2020		March 31, 2020		December 31, 2019		September 30, 2019
Commercial real estate loans	$	380,110	$	357,509	$	354,919	$	347,186	$	317,152
Residential mortgage	7,670		6,922		6,405		6,146		5,749
Education loans	540		567		594		625		658
Commercial lease financing	1,273		1,126		1,029		1,047		969
Commercial loans	652		623		614		591		590
Consumer direct	1,966		1,710		1,999		2,243		2,272
Total	$	392,211	$	368,457	$	365,560	$	357,838	$	327,390

In the event of default by a borrower, we are subject to recourse with respect to approximately $5.7 billion of the $392.2 billion of loans administered or serviced at September 30, 2020. Additional information about this recourse arrangement is included in Note 17 (“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 “Consumer mortgage income” and “Commercial 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 $35.3 billion at September 30, 2020, compared to $31.9 billion at December 31, 2019. Available-for-sale securities were $26.9 billion at September 30, 2020, compared to $21.8 billion at December 31, 2019. Held-to-maturity securities were $8.4 billion at September 30, 2020, and $10.1 billion at December 31, 2019.

As shown in Figure 15, 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 1 (“Basis of Presentation and Accounting Policies”), Note 5 (“Fair Value Measurements”) under the headings “Qualitative Disclosures of Valuation Techniques,” and Note 6 (“Securities”).

Figure 15. Mortgage-Backed Securities by Issuer 

in millions	September 30, 2020		December 31, 2019
FHLMC	$	7,311	$	5,115
FNMA	10,152		12,308
GNMA	13,300		14,112
Total (a)	$	30,763	$	31,535

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

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

Figure 16. 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, 2020
Remaining maturity:
One year or less	$	4,464		$	3		$	655		$	1		—			$	11		$	5,134		.33	%
After one through five years	—			—			10,321			1,306			$	3,812		—			15,439			2.26
After five through ten years	—			—			2,639			17			3,230			1			5,887			2.06
After ten years	—			—			117			2			316			—			435			1.09
Fair value	$	4,464		$	3		$	13,732		$	1,326		$	7,358		$	12		$	26,895		—
Amortized cost	$	4,463		$	3		$	13,403		$	1,256		$	6,921		$	8		$	26,054		1.81	%
Weighted-average yield (b)	.15		%	4.47		%	1.89		%	2.78		%	2.55		%	.05		%	1.81		%	—
Weighted-average maturity	.2 years			.2 years			3.7 years			3.4 years			5.9 years			.7 years			3.7 years			—
December 31, 2019
Fair value	$	334		$	4		$	12,783		$	1,714		$	6,997		$	11		$	21,843		—
Amortized cost	334			4			12,772			1,677			6,898			7			21,692			2.52	%

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

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

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

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Figure 17. 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, 2020
Remaining maturity:
One year or less	$	98		—			—			$	1		$	3		$	102		2.65	%
After one through five years	3,378			$	270		$	1,981		8			12			5,649			2.38
After five through ten years	832			43			1,745			—			—			2,620			2.64
After ten years	—			—			—			13			—			13			1.17
Amortized cost	$	4,308		$	313		$	3,726		$	22		$	15		$	8,384		2.46	%
Fair value	$	4,449		$	324		$	4,032		$	22		$	15		$	8,842		—
Weighted-average yield (b)	2.12		%	2.50		%	2.86		%	1.71		%	2.15		%	2.46		%	—
Weighted-average maturity	3.6 years			4.4 years			5.1 years			19.1 years			2.3 years			4.3 years			—
December 31, 2019
Amortized cost	$	5,692		$	409		$	3,940		11			$	15		$	10,067		2.43	%
Fair value	5,666			415			4,009			11			15			10,116			—

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

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

Deposits and other sources of funds

Figure 18. Breakdown of Deposits at September 30, 2020

Deposits are our primary source of funding. At September 30, 2020, our deposits totaled $136.7 billion, an increase of $24.9 billion compared to December 31, 2019. The increase was driven by existing relationships and targeted strategic growth of commercial clients, as well as growth from consumer stimulus payments and lower consumer spending.

Wholesale funds, consisting of short-term borrowings and long-term debt, totaled $13.7 billion at September 30, 2020, compared to $13.5 billion at December 31, 2019. Strong deposit growth and elevated levels of liquidity resulted in less reliance on wholesale funds to support the growth in the balance sheet at September 30, 2020.

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 19 (“Shareholders' Equity”).

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(a)Common Share repurchases were suspended during the first quarter of 2020 in response to the COVID-19 pandemic.

(b)The dividend payout ratio for the first and second quarters of 2020 was impacted by lower EPS which was impacted by the economic fallout from the COVID-19 pandemic.

Dividends

Consistent with our 2020 capital plan, we paid a quarterly dividend of $.185 per Common Share for the third quarter of 2020. The suspension of our share repurchase program announced on March 17, 2020, does not impact our dividend per Common Share, and we believe our capital level provides sufficient capacity to maintain our dividend (subject to any restrictions that may be imposed by the Federal Reserve, as discussed in “Capital planning and stress testing” in the “Supervision and Regulation” section). 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 2019 Form 10-K.

Common shares outstanding

Our Common Shares are traded on the NYSE under the symbol KEY with 32,376 holders of record at September 30, 2020. Our book value per Common Share was $16.25 based on 976.2 million shares outstanding at September 30, 2020, compared to $15.54 per Common Share based on 977.2 million shares outstanding at December 31, 2019. At September 30, 2020, our tangible book value per Common Share was $13.32, compared to $12.56 per Common Share at December 31, 2019.

Figure 19 shows activities that caused the change in outstanding Common Shares over the past five quarters.

Figure 19. Changes in Common Shares Outstanding 

	2020			2019
in thousands	Third	Second	First	Fourth	Third
Shares outstanding at beginning of period	975,947	975,319	977,189	988,538	1,003,114
Open market repurchases and return of shares under employee compensation plans	(1)	(19)	(7,862)	(12,968)	(15,076)
Shares issued under employee compensation plans (net of cancellations)	259	647	5,992	1,619	500
Shares outstanding at end of period	976,205	975,947	975,319	977,189	988,538

As shown above, Common Shares outstanding increased by .3 million shares during the third quarter of 2020.

At September 30, 2020, we had 280.5 million treasury shares, compared to 279.5 million treasury shares at December 31, 2019. Going forward we expect to reissue treasury shares as needed in connection with stock-based compensation awards and for other corporate purposes.

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

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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, 2020. 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 2019 Form 10-K under the heading “Supervision and Regulation.” Our shareholders’ equity to assets ratio was 10.4% at September 30, 2020, compared to 11.8% at December 31, 2019. Our tangible common equity to tangible assets ratio was 7.8% at September 30, 2020, compared to 8.6% at December 31, 2019. 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 ratios of KeyCorp at September 30, 2020, are set forth in the “Supervision and regulation — Regulatory capital requirements” section in Item 2 of this report.

Figure 20 represents the details of our regulatory capital positions at September 30, 2020, and December 31, 2019, 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 24 (“Shareholders' Equity”) beginning on page 169 of our 2019 Form 10-K.

Figure 20. Capital Components and Risk-Weighted Assets 

	dollars in millions	September 30, 2020			December 31, 2019
COMMON EQUITY TIER 1
Key shareholders’ equity (GAAP)		$	17,722		$	17,038
Less:	Preferred Stock (a)	1,856			1,856
Add:	CECL phase-in (b)	405			—
	Common Equity Tier 1 capital before adjustments and deductions	16,271			15,182
Less:	Goodwill, net of deferred taxes	2,566			2,584
	Intangible assets, net of deferred taxes	166			207
	Deferred tax assets	1			9
	Net unrealized gains (losses) on available-for-sale securities, net of deferred taxes	642			115
	Accumulated gains (losses) on cash flow hedges, net of deferred taxes	550			250
	Amounts in AOCI attributed to pension and postretirement benefit costs, net of deferred taxes	(325)			(339)
	Total Common Equity Tier 1 capital	$	12,671		$	12,356
TIER 1 CAPITAL
Common Equity Tier 1		$	12,671		$	12,356
Additional Tier 1 capital instruments and related surplus		1,856			1,856
Less:	Deductions	—			—
	Total Tier 1 capital	14,527			14,212
TIER 2 CAPITAL
Tier 2 capital instruments and related surplus		1,720			1,546
Allowance for losses on loans and liability for losses on lending-related commitments (c)		1,502			978
Less:	Deductions	—			—
	Total Tier 2 capital	3,222			2,524
	Total risk-based capital	$	17,749		$	16,736
RISK-WEIGHTED ASSETS
Risk-weighted assets on balance sheet		$	103,786		$	102,441
Risk-weighted off-balance sheet exposure		28,587			27,303
Market risk-equivalent assets		1,448			1,121
Gross risk-weighted assets		133,821			130,865
Less:	Excess allowance for loan and lease losses	—			—
	Net risk-weighted assets	$	133,821		$	130,865
AVERAGE QUARTERLY TOTAL ASSETS		$	166,601		$	143,910
CAPITAL RATIOS
Tier 1 risk-based capital		10.9		%	10.9		%
Total risk-based capital		13.3			12.8
Leverage (d)		8.7			9.9
Common Equity Tier 1		9.5			9.4

(a)Net of capital surplus.

(b)Amount reflects our decision to adopt the CECL transitional provision.

(c)The ALLL included in Tier 2 capital is limited by regulation to 1.25% of the institution’s standardized total risk-weighted assets (excluding its standardized market risk-weighted assets). The ALLL includes $42 million and $10 million of allowance classified as “discontinued assets” on the balance sheet at September 30, 2020, and December 31, 2019, respectively.

(d)This ratio is Tier 1 capital divided by average quarterly total assets as defined by the Federal Reserve less: (i) goodwill, (ii) the disallowed intangible and deferred tax assets, and (iii) other deductions from assets for leverage capital purposes.

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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 2019 Form 10-K. These Risk Management practices include heightened monitoring and risk evaluation activities in light of the impact of the COVID-19 global pandemic.

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 104 of our 2019 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, 2020, 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 2019 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 2019 Form 10-K.

Actual losses for the total covered portfolios did not exceed the aggregate daily VaR at a 99% confidence level during the quarter ended September 30, 2020, and September 30, 2019. The MRM backtests our VaR model on a

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daily basis to evaluate its predictive power. The test compares VaR model results at the 99% confidence level to daily held profit 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 $3.1 million at September 30, 2020, and $1.0 million at September 30, 2019. Figure 21 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, 2020, and September 30, 2019.

Figure 21. VaR for Significant Portfolios of Covered Positions 

	2020								2019
	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	$	3.0	$	1.1	$	2.0	$	2.5	$	1.0	$	.3	$	.5	$	.8
Derivatives:
Interest rate	$	.9	.3		$	.5	$	.3	$	.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 $3.1 million at September 30, 2020, and $4.5 million at September 30, 2019. Figure 22 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, 2020, and September 30, 2019.

Figure 22. Stressed VaR for Significant Portfolios of Covered Positions 

	2020								2019
	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	$	3.0	$	.8	$	1.7	$	2.5	$	4.3	$	2.4	$	3.2	$	3.3
Derivatives:
Interest rate	$	.7	$	.1	$	.2	$	.4	$	.9	$	.2	$	.5	$	.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 $27 million at September 30, 2020, all of which were mortgage-backed security 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.

LIBOR Transition

As disclosed in Item 1A. Risk Factors of our 2019 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. We are collaborating closely with regulators and industry groups on the transition and closely monitoring developments in industry practices related to LIBOR alternatives. The goals of our 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.

As part of the LIBOR transition program, we completed an initial risk assessment to help us identify the impact and risks associated with various products, systems, processes, and models. This risk assessment has assisted us in making necessary updates to our infrastructure and operational systems and processes to implement a replacement rate, and we anticipate being operationally ready for SOFR in the fourth quarter of 2020. We have compiled an inventory of existing legal contracts that are impacted by the LIBOR transition. We are assessing the LIBOR fallback language in those contracts and are devising a strategy to address the LIBOR transition for those contracts. We have also focused on refining LIBOR fallback language in new legal contracts. We expect to leverage recommendations made by the ARRC and ISDA that are tailored to our specific client segments.

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 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 from current levels over the next 12 months (subject to a floor on market interest rates at zero).

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Figure 23 presents the results of the simulation analysis at September 30, 2020, and September 30, 2019. At September 30, 2020, our simulated impact to changes in interest rates was modest. Exposure to declining rates remains nominal given the low level of market rates in comparison to the floor utilized in the scenario. Exposure to rising rates has changed from a detriment in 2019 to a benefit currently as the lower actual market rates reduce the need for additional modeled hedges and lower the projected beta to rising rates. 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 23. Simulated Change in Net Interest Income

	September 30, 2020				September 30, 2019
Basis point change assumption (short-term rates)	-200		+200		-175		+200
Assumed floor in market rates (in basis points)	—		N/A		25		N/A
Tolerance level	-5.50	%	-5.50	%	-5.50	%	-5.50	%
Interest rate risk assessment	-1.92	%	4.49	%	-1.66	%	-2.06	%

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.

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 23. 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

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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, 2020.

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 24 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”).

Figure 24. Portfolio Swaps by Interest Rate Risk Management Strategy 

	September 30, 2020
						Weighted-Average					December 31, 2019
dollars in millions	Notional Amount		Fair Value			Maturity (Years)	Receive Rate		Pay Rate		Notional Amount		Fair Value
Interest rate swaps
Cash flow:
Receive fixed — asset	$	18,415	$	745		2.2	2.2	%	.2	%	$	19,270	$	312
Receive fixed forward starting — asset	—		—			—	—		—		3,400		32
Pay fixed swap — debt	50		(12)			7.8	0.3	%	3.6	%	50		(7)
Total cash flow swaps	18,465		733			2.2	2.2	%	.2	%	22,720		337
Fair value:
Received fixed — debt	7,787		491			4.1	2.1	%	.2	%	8,189		240
Total interest rate swaps	$	26,252	$	1,224	(b)	2.8	2.1	%	.2	%	$	30,909	$	577	(b)
Interest rate options
Cash flow:
Floors — purchased (a)	$	7,800	$	24		.7	—		—		$	4,200	$	149
Floors — sold (a)	—		—			—	—		—		3,900		(15)
Total interest rate options	$	7,800	$	24		.7	—		—		$	8,100	$	134

(a)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.

(b)Excludes accrued interest of $137 million and $107 million at September 30, 2020, and December 31, 2019, 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, global pandemics (including COVID-19), 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. See Part II, Item 1A. Risk Factors in our First Quarter 2020 Form 10-Q for a discussion of how the COVID-19 global pandemic has impacted our liquidity and may continue to impact it in the future.

Our credit ratings at September 30, 2020, are shown in Figure 25. We believe these credit ratings, under normal conditions in the capital markets, would enable KeyCorp or KeyBank to issue fixed income securities to investors.

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Figure 25. Credit Ratings 

September 30, 2020	Short-Term Borrowings	Long-Term Deposits	Senior Long-Term Debt	Subordinated Long-Term Debt	Capital Securities	Preferred Stock
KEYCORP (THE PARENT COMPANY)
Standard & Poor’s	A-2	N/A	BBB+	BBB	BB+	BB+
Moody’s	P-2	N/A	Baa1	Baa1	Baa2	Baa3
Fitch Ratings, Inc.	F1	N/A	A-	BBB+	BB+	BB+
DBRS, Inc.	R-1 (low)	N/A	A	A (low)	A (low)	BBB
KEYBANK
Standard & Poor’s	A-2	N/A	A-	BBB+	N/A	N/A
Moody’s	P-2	Aa3	A3	Baa1	N/A	N/A
Fitch Ratings, Inc.	F1	A	A-	BBB+	N/A	N/A
DBRS, Inc.	R-1 (middle)	A (high)	A (high)	A	N/A	N/A

Sources of liquidity

Our primary source of funding for KeyBank is retail and commercial deposits. As of September 30, 2020, our consolidated loan-to-deposit ratio was 77%. 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, 2020, totaled $36.9 billion, consisting of $23.9 billion of unpledged securities, $80 million of securities available for secured funding at the FHLB, and $12.9 billion of net balances of federal funds sold and balances in our Federal Reserve account. Additionally, as of September 30, 2020, our unused borrowing capacity secured by loan collateral was $24.4 billion at the Federal Reserve Bank of Cleveland and $8.6 billion at the FHLB. During the third quarter of 2020, our secured term borrowings decreased $1.0 billion as 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, 2020, KeyCorp held $3.8 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 2020, KeyBank paid $350 million in cash dividends to KeyCorp. As of September 30, 2020, KeyBank had regulatory capacity to pay $823 million in dividends to KeyCorp without prior regulatory approval.

Our liquidity position and recent activity

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

The Consolidated Statements of Cash Flows summarize our sources and uses of cash by type of activity for the nine-month periods ended September 30, 2020, and September 30, 2019.

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 2019 Form 10-K.

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Credit risk management

Credit risk is the risk of loss 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, provide 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’s 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. As a result of the current economic environment, our commercial loan portfolio is going through active portfolio surveillance which is described in more detail in the section entitled “Loans and loans held for sale — Commercial loan portfolio.”

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 (“Basis of Presentation and Accounting Policies”) under the heading “Allowance for Loan and Lease Losses” in this report. Briefly, the ALLL estimate uses various models and estimation techniques based on our historical loss experience, current borrower characteristics, current conditions, reasonable and supportable forecasts and other relevant factors. The ALLL at September 30, 2020, represents our best estimate of the lifetime expected credit losses inherent in the loan portfolio at that date.

As shown in Figure 26, our ALLL from continuing operations increased by $830 million, or 92.2%, from December 31, 2019. Our commercial ALLL decreased by $124 million, or 16.5%, with the adoption of ASU 2016-13, Financial Instruments — Credit Losses at January 1, 2020. The commercial ALLL increased by $554 million, or 88.4%, from January 1, 2020, through September 30, 2020, driven by updated economic forecasts that capture additional deterioration triggered by the global COVID-19 pandemic. Our consumer ALLL increased by $328 million, or 220.1%, with the adoption of ASU 2016-13, Financial Instruments — Credit Losses at January 1, 2020. The consumer ALLL increased $72 million, or 15.1%, from January 1, 2020, through September 30, 2020, driven by portfolio growth and updated economic forecasts that capture additional deterioration triggered by the global COVID-19 pandemic.

Figure 26. Allocation of the Allowance for Loan Lease Losses (a)

	September 30, 2020						December 31, 2019
dollars in millions	Amount		Percent of Allowance to Total Allowance		Percent of Loan Type to Total Loans		Amount		Percent of Allowance to Total Allowance		Percent of Loan Type to Total Loans
Commercial and industrial	$	810	46.8	%	53.4	%	$	551	61.2	%	51.0	%
Commercial real estate:
Commercial mortgage	279		16.1		12.7		143		15.9		14.3
Construction	34		2.0		1.9		22		2.4		1.6
Total commercial real estate loans	313		18.1		14.6		165		18.3		15.9
Commercial lease financing	58		3.4		4.3		35		3.9		5.0
Total commercial loans	1,181		68.3		72.3		751		83.4		71.9
Real estate — residential mortgage	104		6.0		8.4		7		.8		7.4
Home equity loans	183		10.6		9.2		31		3.5		10.9
Consumer direct loans	125		7.2		4.3		34		3.8		3.7
Credit cards	95		5.5		0.9		47		5.2		1.2
Consumer indirect loans	42		2.4		4.9		30		3.3		4.9
Total consumer loans	549		31.7		27.7		149		16.6		28.1
Total ALLL — continuing operations (b)	$	1,730	100.0	%	100.0	%	$	900	100.0	%	100.0	%

(a)The ALLL at December 31, 2019, was calculated under the incurred-loss methodology which was replaced by the CECL methodology beginning on January 1, 2020. See Note 1 (“Summary of Significant Accounting Policies”) and Note 5 (“Asset Quality”) for more information.

(b)Excludes allocations of the ALLL related to the discontinued operations of the education lending business in the amount of $42 million at September 30, 2020, and $10 million at December 31, 2019.

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Net loan charge-offs 

Figure 27 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 28.

Net loan charge-offs for the three months ended September 30, 2020, decreased $68 million compared to the year-ago quarter. This decrease was primarily due to a $123 million charge-off related to a previously disclosed fraud loss in the third quarter of 2019.

Figure 27. Net Loan Charge-offs from Continuing Operations (a) 

	2020									2019
dollars in millions	Third			Second			First			Fourth			Third
Commercial and industrial	$	92		$	66		$	55		$	72		$	170
Real estate — Commercial mortgage	11			2			2			2			—
Real estate — Construction	—			—			—			1			—
Commercial lease financing	10			3			2			—			—
Total commercial loans	113			71			59			75			170
Real estate — Residential mortgage	(1)			2			—			(1)			1
Home equity loans	1			1			2			1			4
Consumer direct loans	6			8			10			9			8
Credit cards	7			10			9			9			9
Consumer indirect loans	2			4			4			6			4
Total consumer loans	15			25			25			24			26
Total net loan charge-offs	$	128		$	96		$	84		$	99		$	196
Net loan charge-offs to average loans	.49		%	.36		%	.35		%	.42		%	.85		%
Net loan charge-offs from discontinued operations — education lending business	—			—			$	1		$	1		—

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

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Figure 28. Summary of Loan and Lease Loss Experience from Continuing Operations

	Three months ended September 30,						Nine months ended September 30,
dollars in millions	2020			2019			2020			2019
Average loans outstanding	$	104,919		$	91,956		$	103,018		$	90,805
Allowance for loan and lease losses at the end of the prior period	$	1,708		$	890		$	900		$	883
Cumulative effect from change in accounting principle (a)	—			—			204			—
Allowance for loan and lease losses at beginning of period	1,708			890			1,104			883
Loans charged off:
Commercial and industrial	101			176			232			242
Real estate — commercial mortgage	13			—			18			6
Real estate — construction	—			—			—			4
Commercial lease financing	10			1			16			25
Total commercial loans	124			177			266			277
Real estate — residential mortgage	—			1			2			3
Home equity loans	4			6			10			16
Consumer direct loans	8			10			30			30
Credit cards	9			11			32			34
Consumer indirect loans	6			8			22			24
Total consumer loans	27			36			96			107
Total loans charged off	151			213			362			384
Recoveries:
Commercial and industrial	9			6			19			22
Real estate — commercial mortgage	2			—			3			2
Real estate — construction	—			—			—			—
Commercial lease financing	—			1			1			4
Total commercial loans	11			7			23			28
Real estate — residential mortgage	1			—			1			1
Home equity loans	3			2			6			6
Consumer direct loans	2			2			6			5
Credit cards	2			2			6			6
Consumer indirect loans	4			4			12			13
Total consumer loans	12			10			31			31
Total recoveries	23			17			54			59
Net loan charge-offs	(128)			(196)			(308)			(325)
Provision (credit) for loan and lease losses	150			199			934			335
Allowance for loan and lease losses at end of period (c)	$	1,730		$	893		$	1,730		$	893
Liability for credit losses on lending-related commitments at the end of the prior period	$	198		$	64		$	68		$	64
Liability for credit losses on contingent guarantees at the end of the prior period	—			—			7			—
Cumulative effect from change in accounting principle (a), (b)	—			—			66			—
Liability for credit losses on off-balance sheet exposures at beginning of period	198			64			141			64
Provision (credit) for losses on off-balance sheet exposures	10			1			67			1
Liability for credit losses on off-balance sheet exposures at end of period (d)	$	208		$	65		$	208		$	65
Total allowance for credit losses at end of period	$	1,938		$	958		$	1,938		$	958
Net loan charge-offs to average total loans	.49		%	.85		%	.40		%	.48		%
Allowance for loan and lease losses to period-end loans	1.68			.96			1.68			.96
Allowance for credit losses to period-end loans	1.88			1.03			1.88			1.03
Allowance for loan and lease losses to nonperforming loans	207.4			152.6			207.4			152.6
Allowance for credit losses to nonperforming loans	232.4			163.8			232.4			163.8
Discontinued operations — education lending business:
Loans charged off	$	—		$	1		$	4		$	9
Recoveries	—			1			3			3
Net loan charge-offs	$	—		$	—		$	(1)		$	(6)

(a)The cumulative effect from change in accounting principle relates to the January 1, 2020, adoption of ASU 2016-13.

(b)Excludes $4 million related to the provision for other financial assets.

(c)The ALLL at December 31, 2019, was calculated under the incurred-loss methodology which was replaced by the CECL methodology beginning on January 1, 2020. See Note 1 (“Summary of Significant Accounting Policies”) and Note 4 (“Asset Quality”) for more information.

(d)Included in "Accrued expense and other liabilities" on the balance sheet.

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Nonperforming assets

Figure 29 shows the composition of our nonperforming assets. As shown in Figure 29, nonperforming assets at September 30, 2020, increased $288 million from December 31, 2019. This increase was primarily driven by an increase in nonperforming loans in our oil and gas portfolio and the transfer of one commercial property to OREO in the first quarter of 2020.

Under the CARES Act as well as banking regulator interagency guidance, certain loan modifications to borrowers experiencing financial distress as a result of the economic impacts created by the COVID-19 pandemic may not be reported as nonperforming. Refer to Note 4 (“Asset Quality”) under the heading “Nonperforming and Past Due Loans.”

For a summary of our nonaccrual and charge-off policies, see Note 1 (“Basis of Presentation and Accounting Policies”) under the headings “Nonperforming Loans,” “Impaired Loans,” and “Allowance for Loan and Lease Losses” and Note 1 (“Summary of Significant Accounting Policies”) of our 2019 Form 10-K.

Figure 29. Summary of Nonperforming Assets and Past Due Loans from Continuing Operations 

dollars in millions	September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019			September 30, 2019
Commercial and industrial	$	459		$	404		$	277		$	264		$	238
Real estate — commercial mortgage	104			91			87			83			92
Real estate — construction	1			1			2			2			2
Total commercial real estate loans (a)	105			92			89			85			94
Commercial lease financing	6			9			5			6			7
Total commercial loans (b)	570			505			371			355			339
Real estate — residential mortgage	96			89			89			48			42
Home equity loans	146			141			143			145			179
Consumer direct loans	3			3			4			4			3
Credit cards	2			2			3			3			2
Consumer indirect loans	17			20			22			22			20
Total consumer loans	264			255			261			222			246
Total nonperforming loans	834			760			632			577			585
OREO	105			112			119			35			39
Nonperforming loans held for sale	61			75			89			94			78
Other nonperforming assets	3			4			4			9			9
Total nonperforming assets	$	1,003		$	951		$	844		$	715		$	711
Accruing loans past due 90 days or more	$	73		$	87		$	128		$	97		$	54
Accruing loans past due 30 through 89 days	336			419			393			329			366
Restructured loans — accruing and nonaccruing (c)	306			310			340			347			347
Restructured loans included in nonperforming loans (c)	168			166			172			183			176
Nonperforming assets from discontinued operations — education lending business	6			7			7			7			7
Nonperforming loans to period-end portfolio loans	.81		%	.72		%	.61		%	.61		%	.63		%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets	.97			.89			.82			.75			.77

(a)See Figure 11 and the accompanying discussion in the “Loans and loans held for sale” section for more information related to our commercial real estate loan portfolio.

(b)See Figure 10 and the accompanying discussion in the “Loans and loans held for sale” section for more information related to our commercial loan portfolio.

(c)Restructured loans (i.e., TDRs) are those for which Key, for reasons related to a borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. These concessions are made to improve the collectability of the loan and generally take the form of a reduction of the interest rate, extension of the maturity date or reduction in the principal balance.

Figure 30 shows the types of activity that caused the change in our nonperforming loan balance during each of the last five quarters.

Figure 30. Summary of Changes in Nonperforming Loans from Continuing Operations

	2020						2019
in millions	Third		Second		First		Fourth		Third
Balance at beginning of period	$	760	$	632	$	577	$	585	$	561
Loans placed on nonaccrual status (a)	387		293		219		268		271
Charge-offs	(150)		(111)		(100)		(114)		(91)
Loans sold	(6)		(5)		(4)		(1)		—
Payments	(83)		(29)		(31)		(59)		(37)
Transfers to OREO	—		—		(3)		(3)		(4)
Transfers to nonperforming loans held for sale	—		—		—		(47)		(78)
Transfers to other nonperforming assets	—		—		—		—		—
Loans returned to accrual status	(74)		(20)		(26)		(52)		(37)
Balance at end of period	$	834	$	760	$	632	$	577	$	585

(a)     PCI loans meeting nonperforming criteria were historically excluded from Key's nonperforming disclosures. As a result of CECL implementation on January 1, 2020, PCI loans became PCD loans. PCD loans that met the definition of nonperforming are now included in nonperforming disclosures, resulting in a $45 million increase in nonperforming loans in the first quarter of 2020.

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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. This includes our compliance with lending programs established by the CARES Act, including the PPP and Main Street Lending Program. 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 Management Program serves the same function in managing compliance risk for Key. The Operational Risk Committee and the Compliance Risk Committee support the ERM Committee by identifying early warning events and trends, escalating emerging risks, and discussing forward-looking assessments. Both the Operational Risk Committee and the Compliance Risk Committee include 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 Risk Management 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 Risk Management 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.

See Part II, Item 1A. Risk Factors in our First Quarter 2020 Form 10-Q for a discussion of additional operational risks stemming from the COVID-19 global pandemic.

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. As the threat landscape continues to evolve, critical infrastructure, including financial services, remains a top target for cyberattacks. The emergence of COVID-19 has created a unique situation globally with many more employees and third-party service providers working from home, which inherently introduces additional risk. Cyberattacks may include, but are not limited to, attacks that are intended to disrupt or disable banking services and prevent banking transactions, attempts to breach the security of systems and data, and social engineering attempts aimed at tricking employees and clients into providing sensitive information or executing financial transactions.

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

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targeted retailers, credit bureaus, and other businesses for the purpose of acquiring the confidential information (including personal, financial, and credit card information) of customers, some of whom are customers of ours. We may incur expenses related to the investigation of such attacks or related to the protection of our customers from identity theft as a result of such attacks. We may also incur expenses to enhance our systems or processes to protect against cyber or other security incidents. Risks and exposures related to cyberattacks are expected to remain high for the foreseeable future due to the rapidly evolving nature and sophistication of these threats, as well as due to the expanding use of Internet banking, mobile banking, and other technology-based products and services by us and our clients. To date, Key has not experienced material disruption of our operations, or material harm to our customers, as a result of the heightened threat landscape or cyberattacks.

See Part II, Item 1A. Risk Factors in our First Quarter 2020 Form 10-Q for a discussion of additional cybersecurity risks stemming from the COVID-19 global pandemic.

As described in more detail starting on page 65 of our 2019 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		9/30/2020			6/30/2020			3/31/2020			12/31/2019			9/30/2019			9/30/2020			9/30/2019
Tangible common equity to tangible assets at period-end
Key shareholders’ equity (GAAP)		$	17,722		$	17,542		$	17,411		$	17,038		$	17,116
Less:	Intangible assets (a)	2,862			2,877			2,894			2,910			2,928
	Preferred Stock (b)	1,856			1,856			1,856			1,856			1,856
	Tangible common equity (non-GAAP)	$	13,004		$	12,809		$	12,661		$	12,272		$	12,332
Total assets (GAAP)		$	170,540		$	171,192		$	156,197		$	144,988		$	146,691
Less:	Intangible assets (a)	2,862			2,877			2,894			2,910			2,928
	Tangible assets (non-GAAP)	$	167,678		$	168,315		$	153,303		$	142,078		$	143,763
	Tangible common equity to tangible assets ratio (non-GAAP)	7.8		%	7.6		%	8.3		%	8.6		%	8.6		%
Average tangible common equity
Average Key shareholders’ equity (GAAP)		$	17,730		$	17,688		$	17,216		$	17,178		$	17,113		$	17,545		$	16,454
Less:	Intangible assets (average) (c)	2,870			2,886			2,902			2,919			2,942			2,886			2,905
	Preferred Stock (average)	1,900			1,900			1,900			1,900			1,900			1,900			1,705
	Average tangible common equity (non-GAAP)	$	12,960		$	12,902		$	12,414		$	12,359		$	12,271		$	12,759		$	11,844
Return on average tangible common equity from continuing operations
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP)		$	397		$	159		$	118		$	439		$	383		$	674		$	1,172
Average tangible common equity (non-GAAP)		12,960			12,902			12,414			12,359			12,271			12,759			11,844
Return on average tangible common equity from continuing operations (non-GAAP)		12.19		%	4.96		%	3.82		%	14.09		%	12.38		%	7.06		%	13.23		%
Return on average tangible common equity consolidated
Net income (loss) attributable to Key common shareholders (GAAP)		$	401		$	161		$	119		$	442		$	386		$	681		$	1,172
Average tangible common equity (non-GAAP)		12,960			12,902			12,414			12,359			12,271			12,759			11,844
Return on average tangible common equity consolidated (non-GAAP)		12.31		%	5.02		%	3.86		%	14.19		%	12.48		%	7.13		%	13.30		%

(a)For the three months ended September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, and September 30, 2019, intangible assets exclude $5 million, $5 million, $6 million, $7 million, and $9 million, respectively, of period-end purchased credit card receivables.

(b)Net of capital surplus.

(c)For the three months ended September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, and September 30, 2019, average intangible assets exclude $5 million, $6 million, $7 million, $8 million, and $9 million, respectively, of average purchased credit card receivables. For the nine months ended September 30, 2020, and September 30, 2019, average intangible assets exclude $6 million and $11 million, respectively, of average purchased credit card receivables.

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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.

		Three months ended															Nine months ended
dollars in millions		9/30/2020			6/30/2020			3/31/2020			12/31/2019			9/30/2019			9/30/2020			9/30/2019
Cash efficiency ratio
Noninterest expense (GAAP)		$	1,037		$	1,013		$	931		$	980		$	939		$	2,981		$	2,921
Less:	Intangible asset amortization	15			18			17			19			26			50			70
Adjusted noninterest expense (non-GAAP)		$	1,022		$	995		$	914		$	961		$	913		$	2,931		$	2,851
Net interest income (GAAP)		$	1,000		$	1,018		$	981		$	979		$	972		$	2,999		$	2,930
Plus:	Taxable-equivalent adjustment	6			7			8			8			8			21			24
	Noninterest income (GAAP)	681			692			477			651			650			1,850			1,808
Total taxable-equivalent revenue (non-GAAP)		$	1,687		$	1,717		$	1,466		$	1,638		$	1,630		$	4,870		$	4,762
Cash efficiency ratio (non-GAAP)		60.6		%	57.9		%	62.3		%	58.7		%	56.0		%	60.2		%	59.9		%

Critical Accounting Policies and Estimates

Our business is dynamic and complex. Consequently, we must exercise judgment in choosing and applying accounting policies and methodologies. These choices are critical – not only are they necessary to comply with GAAP, they also reflect our view of the appropriate way to record and report our overall financial performance. All accounting policies are important, and all policies described in Note 1 (“Summary of Significant Accounting Policies”) beginning on page 100 of our 2019 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 2019 Form 10-K. During the first nine months of 2020, we did not significantly alter the manner in which we applied our critical accounting policies or developed related assumptions and estimates except for our ALLL as a result of the adoption of ASC 326 on January 1, 2020.

In conjunction with the adoption of ASC 326, the critical accounting policy and estimate disclosure for our ALLL was updated from what was disclosed in our 2019 Form 10-K. The accounting policy for goodwill was also updated due to the adoption of ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” These updates are as follows:

Allowance for loan and lease losses

The allowance for loans and leases represents management’s estimate of all expected credit losses over the expected contractual life of our existing loan portfolio. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. These critical estimates include significant use of our own historical data and complex methods to interpret them. We have an ongoing process to evaluate and enhance the quality, quantity, and timeliness of our data and interpretation methods used in the determination of these allowances. These evaluations are inherently subjective, as they require material estimates and may be susceptible to significant change, and include, among others:

•PD,

•LGD,

•Outstanding balance of the loan,

•Movement through delinquency stages,

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•Amounts and timing of expected future cash flows,

•Value of collateral, which may be obtained from third parties,

•Economic forecasts which are obtained from a third party provider, and

•Qualitative factors, such as changes in current economic conditions, that may not be reflected in modeled results.

As described in our accounting policy related to the ALLL in Note 1 (“Basis of Presentation and Accounting Policies”) of this report under the heading “Allowance for Loan and Lease Losses," we employ a disciplined process and methodology to establish our ALLL, which has three main components: (i) asset specific / individual loan reserves; (ii) quantitative (formulaic or pooled) reserves; and (iii) qualitative (judgmental) reserves.

We use a non-DCF factor-based approach to estimate expected credit losses that include component PD/LGD/EAD models as well as less complex estimation methods for smaller loan portfolios. Probability of default models estimate the likelihood a borrower will cease making payments as agreed. These models use observed loan-level information and projected paths of macroeconomic variables. Borrower credit attributes including FICO scores of consumers and internally assigned risk ratings for commercial borrowers are significant inputs to the models. Consumer FICO scores are refreshed quarterly and commercial risk ratings are updated annually with select borrowers updated more frequently. The macroeconomic trends that have a significant impact on the probability of default vary by portfolio segment. Exposure at default models estimate the loan balance at the time the borrower stops making payments. We use an amortization based formulaic approach to estimate account level EAD for all term loans. We use portfolio specific methods in each of our revolving product portfolios. LGD models estimate the loss we will suffer once a loan is in default. Account level inputs to LGD models include collateral attributes, such as loan to value.

If we observe limitations in the data or models, we use model overlays to make adjustments to model outputs to capture a particular risk or compensate for a known limitation. These variables and others may result in actual loan losses that differ from the originally estimated amounts.

This estimate produced by our models is forward-looking and requires management to use forecasts about future economic conditions to determine the expected credit loss over the remaining life of an instrument. Moody’s Consensus forecast is the source of macroeconomic projections, including the interest rate forecasts used in the credit models. We use a two year reasonable and supportable period across all products to forecast economic conditions. As the length of the life of a financial asset increases, these inputs may become impractical to estimate as reasonable and supportable. We believe the two year time horizon appropriately aligns with our business planning, available industry guidance, and reliability of various forecasting services. Following this two year period in which supportable forecasts can be generated, for all modeled loan portfolios, we revert expected credit losses to a level that is consistent with our historical information by reverting the macroeconomic variables (model inputs) to their long run average. We revert to historical loss rates for less complex estimation methods for smaller portfolios. A four quarter reversion period is used where the macroeconomic variables linearly revert to their long run average following the two year reasonable and supportable period. We use a 20 year lookback period for determining long run historical average of the macroeconomic variables. We determined the 20 year lookback period is appropriate as it captures the previous two economic cycles including the last downturn and our more recent positive credit experience.

The ALLL is sensitive to various macroeconomic drivers such as GDP and unemployment as well as portfolio attributes such as remaining term, outstanding balance, risk ratings, FICO, LTV, and delinquency status. Our ALLL models were designed to capture the correlation between economic and portfolio changes. As such, evaluating shifts in individual portfolio attributes and macroeconomic variables in isolation may not be indicative of past or future performance.

It is difficult to estimate how potential changes in any one factor or input might affect the overall ALLL because we consider a wide variety of factors and inputs in estimating the ALLL. Changes in the factors and inputs considered may not occur at the same rate and may not be consistent across all geographies or product types, and changes in factors and input may be directionally inconsistent, such that improvement in one factor may offset deterioration in others. However, to consider the impact of a hypothetical alternate economic forecast, we compared the modeled quantitative allowance results using a downside economic scenario. The maximum difference in the quarterly macroeconomic variables between the base and downside scenarios over the two year reasonable and supportable period includes an approximate 11% decline in GDP annualized growth and an approximate 5% increase in the U.S.

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unemployment rate. The difference between these two scenarios would have driven an increase of approximately 1.8x for commercial and 1.4x for the consumer modeled allowance results.

Similarly, deteriorating conditions for portfolio factors were also considered by moderately stressing key portfolio drivers, relative to the baseline portfolio conditions. Stressing risk ratings by two grades for commercial loans generates a 1.4x increase in the commercial modeled allowance results. Stressing FICO by ten points, and LTV and utilization by 10% for consumer loans generates a 1.2x increase in the consumer modeled allowance results.

Note that these analyses demonstrate the sensitivity of the ALLL to key quantitative assumptions; however, they are not intended to estimate changes in the overall ALLL as they do not reflect qualitative factors related to idiosyncratic risk factors, changes in current economic conditions that may not be reflected in quantitatively derived results, and other relevant factors that must be considered to ensure the ALLL reflects our best estimate of current expected credit losses. With the unprecedented economic uncertainty caused by the COVID-19 pandemic, future ALLL results may vary considerably based on the actual magnitude of the pandemic and impact of the United States' monetary and fiscal response.

Goodwill

Goodwill is initially recorded as the excess of the purchase price over the fair value of net assets acquired in a business combination. Goodwill is tested for impairment for all three of our reporting units: Consumer Bank, Commercial Bank and Institutional Bank. We perform our annual impairment test as of October 1st and on an interim basis if events or changes in circumstances between annual tests suggest additional testing is needed.

Effective January 1, 2020, we adopted ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” eliminating the second step of goodwill impairment testing. Under the new guidance, if the fair value of a reporting unit declines below its carrying value, an impairment charge will be recognized for any amount by which the carrying value exceeds the reporting unit’s fair value, to the extent that the loss recognized does not exceed the amount of the goodwill allocated to that reporting unit. The adoption of ASU 2017-04 did not impact our current financial condition or results of operations.

In consideration of the deterioration in macroeconomic conditions and industry and market conditions due to the COVID-19 pandemic during the third quarter of 2020, we identified a triggering event. Impairment indicators considered comprised economic conditions, including projections of the duration of current conditions and timing of a potential recovery; industry and market considerations; government intervention and regulatory updates; the impact of recent events to financial performance and cost factors of the reporting units; performance of our stock; and other relevant events.

After considering the triggering event together with other relevant factors, we performed an interim quantitative test at each reporting unit. We concluded goodwill was not impaired at September 30, 2020. For more information, see Note 10 (“Goodwill”).

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Accounting and Reporting Developments

Accounting Guidance Pending Adoption at September 30, 2020

Standard	Required Adoption	Description	Effect on Financial Statements or Other Significant Matters
ASU 2019-12, Simplifying the Accounting for Income Taxes	January 1, 2021 Early adoption is permitted	This ASU simplifies the accounting for income taxes by removing certain exceptions to the existing guidance, such as exceptions related to the incremental approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss, and the recognition of deferred tax liabilities when a foreign subsidiary becomes an equity method investment and when a foreign equity method investment becomes a subsidiary. Along with general improvements, it adds simplifications related to franchise taxes, the tax basis of goodwill, and the method for recognizing an enacted change in tax laws. The guidance also specifies that an entity is not required to allocate the consolidated amount of certain tax expense to a legal entity not subject to tax in its own separate financial statements. The guidance should be applied on either a retrospective, modified retrospective, or prospective basis depending on the amendment.	The adoption of this accounting guidance is not expected to have a material effect on our financial condition or results of operations.
ASU 2020-01, Clarifying the Interactions between Topic 321,Investments —Equity Securities; Topic 323, Investments— Equity Method and Joint Ventures; and Topic 815, Derivatives and Hedging	January 1, 2021 Early adoption is permitted	This guidance clarifies that when applying the measurement alternative in Topic 321, companies should consider certain observable transactions that require the application or discontinuance of the equity method under Topic 323. It also clarifies that companies should not consider whether the underlying securities in certain forward contracts and purchased options would be accounted for under the equity method or fair value option when determining the method of accounting for those contracts. This guidance should be applied on a prospective basis.	The adoption of this accounting guidance is not expected to have a material effect on our financial condition or results of operations.
ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40)	January 1, 2022 Early adoption is permitted.	The ASU simplifies the accounting for convertible debt instruments by eliminating the legacy accounting models for convertible instruments with beneficial conversion features or cash conversion features. The guidance also amends the guidance used to determine if a freestanding financial instrument or an embedded feature qualifies for a scope exception from derivative accounting. For freestanding financial instruments and embedded features that have all the characteristics of a derivative instrument and are potentially settled in an entity’s own stock, the guidance simplifies the settlement assessment that entities are required to perform. Also, the Update now requires the use of the if-converted method for all convertible instruments and includes the effect of potential share settlement in diluted EPS if the effect is more dilutive. The new guidance also makes clarifications to the EPS calculation. Further, the ASU expands disclosure requirements. The guidance should be applied on a modified retrospective or retrospective basis.	The adoption of this accounting guidance is not expected to have a material effect on our financial condition or results of operations.
ASU 2020-08, Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other Costs	January 1, 2021 Early adoption is not permitted.	This ASU clarifies that at each reporting period an entity should reevaluate whether a callable debt security is within the scope of ASC 310, which says that to the extent the amortized cost basis of an individual callable debt security exceeds the amount repayable by the issuer at the earliest call date, the premium shall be amortized to the earliest call date, unless prepayment guidance is applied. This guidance should be applied on a prospective basis.	The adoption of this accounting guidance is not expected to have a material effect on our financial condition or results of operations.

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European Sovereign and Nonsovereign Debt Exposures

Our total European sovereign and Nonsovereign debt exposure is presented in Figure 31.

Figure 31. European Sovereign and Nonsovereign Debt Exposures

September 30, 2020	Short- and Long- Term Commercial Total (a)		Foreign Exchange and Derivatives with Collateral (b)		Net Exposure
in millions
France:
Sovereigns	—		—		—
Nonsovereign financial institutions	—		—		—
Nonsovereign non-financial institutions	$	1	—		$	1
Total	1		—		1
Germany:
Sovereigns	—		—		—
Nonsovereign financial institutions	—		—		—
Nonsovereign non-financial institutions	33		—		33
Total	33		—		33
Switzerland:
Sovereigns	—		—		—
Nonsovereign financial institutions	—		1		1
Nonsovereign non-financial institutions	—		—		—
Total	—		1		1
United Kingdom:
Sovereigns	—		—		—
Nonsovereign financial institutions	—		$	406	406
Nonsovereign non-financial institutions	1		—		1
Total	1		406		407
Total Europe:
Sovereigns	—		—		—
Nonsovereign financial institutions	—		407		407
Nonsovereign non-financial institutions	35		—		35
Total	$	35	$	407	$	442

(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.

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Item 1. Financial Statements

Consolidated Balance Sheets

in millions, except per share data	September 30, 2020		December 31, 2019
	(Unaudited)
ASSETS
Cash and due from banks	$	956	$	732
Short-term investments	14,148		1,272
Trading account assets	733		1,040
Securities available for sale	26,895		21,843
Held-to-maturity securities (fair value: $8,842 and $10,116)	8,384		10,067
Other investments	620		605
Loans, net of unearned income of $481 and $603	103,081		94,646
Less: Allowance for loan and lease losses	(1,730)		(900)
Net loans	101,351		93,746
Loans held for sale (a)	1,724		1,334
Premises and equipment	765		814
Goodwill	2,664		2,664
Other intangible assets	203		253
Corporate-owned life insurance	4,274		4,233
Accrued income and other assets	7,084		5,494
Discontinued assets	739		891
Total assets	$	170,540	$	144,988
LIABILITIES
Deposits in domestic offices:
NOW and money market deposit accounts	$	80,791	$	66,714
Savings deposits	5,585		4,651
Certificates of deposit ($100,000 or more)	3,345		6,598
Other time deposits	3,450		5,054
Total interest-bearing deposits	93,171		83,017
Noninterest-bearing deposits	43,575		28,853
Total deposits	136,746		111,870
Federal funds purchased and securities sold under repurchase agreements	213		387
Bank notes and other short-term borrowings	818		705
Accrued expense and other liabilities	2,356		2,540
Long-term debt	12,685		12,448
Total liabilities	152,818		127,950
EQUITY
Preferred stock	1,900		1,900
Common Shares, $1 par value; authorized 2,100,000,000 and 2,100,000,000 shares; issued 1,256,702,081 and 1,256,702,081 shares	1,257		1,257
Capital surplus	6,263		6,295
Retained earnings	12,375		12,469
Treasury stock, at cost (280,497,287 and 279,513,530 shares)	(4,940)		(4,909)
Accumulated other comprehensive income (loss)	867		26
Key shareholders’ equity	17,722		17,038
Noncontrolling interests	—		—
Total equity	17,722		17,038
Total liabilities and equity	$	170,540	$	144,988

(a)Total loans held for sale include real estate — residential mortgage loans held for sale at fair value of $288 million at September 30, 2020, and $140 million at December 31, 2019.

See Notes to Consolidated Financial Statements (Unaudited).

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Consolidated Statements of Income

dollars in millions, except per share amounts	Three months ended September 30,				Nine months ended September 30,
(Unaudited)	2020		2019		2020		2019
INTEREST INCOME
Loans	$	927	$	1,073	$	2,933	$	3,221
Loans held for sale	18		18		58		46
Securities available for sale	115		136		365		400
Held-to-maturity securities	53		64		171		199
Trading account assets	3		7		16		24
Short-term investments	1		16		14		49
Other investments	2		3		3		11
Total interest income	1,119		1,317		3,560		3,950
INTEREST EXPENSE
Deposits	54		227		319		652
Federal funds purchased and securities sold under repurchase agreements	—		—		6		1
Bank notes and other short-term borrowings	1		4		11		13
Long-term debt	64		114		225		354
Total interest expense	119		345		561		1,020
NET INTEREST INCOME	1,000		972		2,999		2,930
Provision for credit losses	160		200		1,001		336
Net interest income after provision for credit losses	840		772		1,998		2,594
NONINTEREST INCOME
Trust and investment services income	128		118		384		355
Investment banking and debt placement fees	146		176		418		449
Service charges on deposit accounts	77		86		229		251
Operating lease income and other leasing gains	38		42		128		123
Corporate services income	51		63		165		171
Cards and payments income	114		69		271		208
Corporate-owned life insurance income	30		32		101		97
Consumer mortgage income	51		16		133		42
Commercial mortgage servicing fees	18		21		48		58
Other income (a)	28		27		(27)		54
Total noninterest income	681		650		1,850		1,808
NONINTEREST EXPENSE
Personnel	588		547		1,675		1,699
Net occupancy	76		72		223		217
Computer processing	59		53		170		163
Business services and professional fees	49		43		142		132
Equipment	25		27		74		75
Operating lease expense	33		33		103		91
Marketing	22		26		67		69
FDIC assessment	6		7		23		23
Intangible asset amortization	15		26		50		70
OREO expense, net	(1)		3		8		10
Other expense	165		102		446		372
Total noninterest expense	1,037		939		2,981		2,921
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	484		483		867		1,481
Income taxes	60		70		113		239
INCOME (LOSS) FROM CONTINUING OPERATIONS	424		413		754		1,242
Income (loss) from discontinued operations	4		3		7		6
NET INCOME (LOSS)	428		416		761		1,248
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		—
NET INCOME (LOSS) ATTRIBUTABLE TO KEY	$	428	$	416	$	761	$	1,248
Income (loss) from continuing operations attributable to Key common shareholders	$	397	$	383	$	674	$	1,172
Net income (loss) attributable to Key common shareholders	401		386		681		1,178
Per Common Share:
Income (loss) from continuing operations attributable to Key common shareholders	$	.41	$	.39	$	.70	$	1.17
Income (loss) from discontinued operations, net of taxes	—		—		.01		.01
Net income (loss) attributable to Key common shareholders (b)	.41		.39		.70		1.18
Per Common Share — assuming dilution:
Income (loss) from continuing operations attributable to Key common shareholders	$	.41	$	.38	$	.69	$	1.16
Income (loss) from discontinued operations, net of taxes	—		—		.01		.01
Net income (loss) attributable to Key common shareholders (b)	.41		.39		.70		1.17
Cash dividends declared per Common Share	$	.185	$	.185	$	.555	$	.525
Weighted-average Common Shares outstanding (000)	967,804		988,319		967,632		998,268
Effect of Common Share options and other stock awards	6,184		10,009		6,648		9,632
Weighted-average Common Shares and potential Common Shares outstanding (000) (c)	973,988		998,328		974,280		1,007,900

(a)For the three months ended September 30, 2020, we had no net securities gains (losses). For the nine months ended September 30, 2020, net securities gains (losses) totaled $4 million. For the three and nine months ended September 30, 2019, net securities gains (losses) totaled less than $15 million. For the three and nine months ended September 30, 2020, and September 30, 2019, we did not have any impairment losses related to securities.

(b)EPS may not foot due to rounding.

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

See Notes to Consolidated Financial Statements (Unaudited).

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Consolidated Statements of Comprehensive Income

in millions	Three months ended September 30,				Nine months ended September 30,
(Unaudited)	2020		2019		2020		2019
Net income (loss)	$	428	$	416	$	761	$	1,248
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on securities available for sale, net of income taxes of ($3), ($29), $163 and ($176)	(8)		93		527		568
Net unrealized gains (losses) on derivative financial instruments, net of income taxes of ($19), ($21), $93, and ($120)	(64)		68		299		386
Foreign currency translation adjustments, net of income taxes of $0, $0, $0, and ($1)	—		—		—		4
Net pension and postretirement benefit costs, net of income taxes of $1, $0, $5, and ($6)	3		—		15		19
Total other comprehensive income (loss), net of tax	(69)		161		841		977
Comprehensive income (loss)	359		577		1,602		2,225
Less: Comprehensive income attributable to noncontrolling interests	—		—		—		—
Comprehensive income (loss) attributable to Key	$	359	$	577	$	1,602	$	2,225

See Notes to Consolidated Financial Statements (Unaudited).

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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, 2019	1,396	977,189	$	1,900	$	1,257	$	6,295	$	12,469	$	(4,909)	$	26	—
Cumulative effect from changes in accounting principle (a)									(230)
Net income (loss)									761						—
Other comprehensive income (loss)													841
Deferred compensation							2
Cash dividends declared
Common Shares ($.555 per share)									(542)
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 ($1.054689 per depositary share)									(19)
Open market Common Share repurchases		(6,067)									(117)
Employee equity compensation program Common Share repurchases		(1,815)					(34)				(36)
Common Shares reissued (returned) for stock options and other employee benefit plans		6,898					—				122
Net contribution from (distribution to) noncontrolling interests															—
Other									(3)
BALANCE AT SEPTEMBER 30, 2020	1,396	976,205	$	1,900	$	1,257	$	6,263	$	12,375	$	(4,940)	$	867	—
BALANCE AT JUNE 30, 2020	1,396	975,947	$	1,900	$	1,257	$	6,240	$	12,154	$	(4,945)	$	936	—
Net income (loss)									428						—
Other comprehensive income (loss)													(69)
Deferred compensation							2
Cash dividends declared
Common Shares ($.185 per share)									(180)
Series D Preferred Stock ($12.50 per depositary share)									(7)
Series E Preferred Stock ($.382813 per depositary share)									(8)
Series F Preferred Stock ($.353125 per depositary share)									(6)
Series G Preferred Stock ($.351563 per depositary share)									(6)
Open market Common Share repurchases		—									—
Employee equity compensation program Common Share repurchases		(1)					21				—
Common Shares reissued (returned) for stock options and other employee benefit plans		259					—				5
Net contribution from (distribution to) noncontrolling interests															—
Other									—
BALANCE AT SEPTEMBER 30, 2020	1,396	976,205	$	1,900	$	1,257	$	6,263	$	12,375	$	(4,940)	$	867	—

(a)Includes the impact of implementing ASU 2016-13, Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments. See Note 1 (“Basis of Presentation and Accounting Policies”) for more information on our adoption of this guidance and the impact to our results of operations.

See Notes to Consolidated Financial Statements (Unaudited).

	Key Shareholders’ Equity
dollars in millions, except per share amounts (Unaudited)	Preferred Shares Outstanding (000)	Common Shares Outstanding (000)	Preferred Stock		Common Shares		Capital Surplus		Retained Earnings		Treasury Stock, at Cost		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests
BALANCE AT DECEMBER 31, 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):
Deferred compensation							5								—
Cash dividends declared													161
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)
Issuance of Series G Preferred Stock	—		$	—			—
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															(2)
BALANCE AT SEPTEMBER 30, 2019	1,396	988,538	$	1,900	$	1,257	$	6,287	$	12,209	$	(4,696)	$	159	$	—

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Consolidated Statements of Cash Flows

in millions	Nine months ended September 30,
(Unaudited)	2020		2019
OPERATING ACTIVITIES
Net income (loss)	$	761	$	1,248
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Provision for credit losses	1,001		336
Depreciation and amortization expense, net	112		183
Accretion of acquired loans	23		39
Increase in cash surrender value of corporate-owned life insurance	(86)		(86)
Stock-based compensation expense	75		72
Deferred income taxes (benefit)	(217)		81
Proceeds from sales of loans held for sale	10,079		8,103
Originations of loans held for sale, net of repayments	(10,040)		(8,063)
Net losses (gains) on sales of loans held for sale	(169)		(126)
Net losses (gains) on leased equipment	(17)		(16)
Net securities losses (gains)	(4)		(15)
Net losses (gains) on sales of fixed assets	3		(1)
Net decrease (increase) in trading account assets	307		(114)
Other operating activities, net	(1,101)		272
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	727		1,913
INVESTING ACTIVITIES
Cash received (used) in acquisitions, net of cash acquired	—		(185)
Net decrease (increase) in short-term investments, excluding acquisitions	(12,876)		(789)
Purchases of securities available for sale	(9,582)		(4,618)
Proceeds from sales of securities available for sale	583		24
Proceeds from prepayments and maturities of securities available for sale	4,642		2,395
Proceeds from prepayments and maturities of held-to-maturity securities	1,702		1,054
Purchases of held-to-maturity securities	(17)		(22)
Purchases of other investments	(110)		(33)
Proceeds from sales of other investments	79		40
Proceeds from prepayments and maturities of other investments	13		39
Net decrease (increase) in loans, excluding acquisitions, sales and transfers	(9,118)		(4,122)
Proceeds from sales of portfolio loans	140		245
Proceeds from corporate-owned life insurance	46		41
Purchases of premises, equipment, and software	(45)		(58)
Proceeds from sales of premises and equipment	—		17
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(24,543)		(5,972)
FINANCING ACTIVITIES
Net increase (decrease) in deposits, excluding acquisitions	24,876		4,340
Net increase (decrease) in short-term borrowings	(61)		19
Net proceeds from issuance of long-term debt	2,502		2,113
Payments on long-term debt	(2,509)		(1,675)
Issuance of preferred shares	—		435
Open market Common Share repurchases	(117)		(594)
Employee equity compensation program Common Share repurchases	(36)		(33)
Net proceeds from reissuance of Common Shares	7		7
Cash dividends paid	(622)		(595)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	24,040		4,017
NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS	224		(42)
CASH AND DUE FROM BANKS AT BEGINNING OF PERIOD	732		678
CASH AND DUE FROM BANKS AT END OF PERIOD	$	956	$	636
Additional disclosures relative to cash flows:
Interest paid	$	601	$	950
Income taxes paid (refunded)	175		(22)
Noncash items:
Reduction of secured borrowing and related collateral	$	5	$	3
Loans transferred to portfolio from held for sale	32		5
Loans transferred to held for sale from portfolio	292		290
Loans transferred to OREO	94		22
CMBS risk retentions	41		17
ABS risk retentions	22		12

See Notes to Consolidated Financial Statements (Unaudited).

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Notes to Consolidated Financial Statements (Unaudited)

1. Basis of Presentation and Accounting Policies

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

The consolidated financial statements include any voting rights entities in which we have a controlling financial interest. In accordance with the applicable accounting guidance for consolidations, we consolidate a VIE if we have: (i) a variable interest in the entity; (ii) the power to direct activities of the VIE that most significantly affect the entity’s economic performance; and (iii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE (i.e., we are considered to be the primary beneficiary). Variable interests can include equity interests, subordinated debt, derivative contracts, leases, service agreements, guarantees, standby letters of credit, loan commitments, and other contracts, agreements, and financial instruments. See Note 11 (“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 2019 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.

Effective July 1, 2020, Key amended its Accounting Policy for presentation of Short-Term Investments (page 104 of our 2019 Form 10-K) to include United States Treasury Bills with an original maturity of three months or less.

Accounting Guidance Adopted in 2020

Measurement of Credit Losses on Financial Instruments (ASU 2016-13, ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11, ASU 2020-02, ASU 2020-03)

On January 1, 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred-loss methodology that recognized losses when a probable threshold was met with an expected-loss methodology, specifically, recognizing current expected credit losses (CECL) for the remaining life of the asset at the time of origination or acquisition. The CECL methodology applies to loans, debt securities, and other financial assets and net investment in leases measured at amortized cost. It also applies to off-balance sheet credit exposures (loan commitments, standby letters of credit, financial guarantees, and other similar instruments). Assets in the scope of ASC 326 are presented at the net amount expected to be collected after deducting the allowance for credit losses from the amortized cost basis of the assets.

ASC 326 also requires credit losses relating to available-for-sale debt securities that management does not intend to sell or believes that it is more likely than not they will be required to sell to be recorded through an allowance rather than a reduction of the carrying amount.

ASC 326 replaces the purchased credit impaired concept of accounting, previously required under Subtopic 310-30, with a purchased financial assets with credit deterioration (PCD) concept. In accordance with ASC 326, we did not reassess whether recognized purchased credit impaired loans met the criteria of a PCD loan and modifications to individual acquired loans accounted for in pools were TDRs as of the date of adoption. At adoption, we elected to not maintain the pools of loans previously accounted for under Subtopic 310-30.

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The prospective application resulted in a $4 million adjustment to the amortized cost basis of PCD loans to reflect the addition to the allowance for loans and leases as of January 1, 2020. After the adjustment for the allowance for the loans and leases, the noncredit discount of $15 million will be accreted to interest income using the interest method based on the effective interest rate determined after the adjustment from credit losses as of January 1, 2020.

The ASU requires use of a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. Results for reporting periods beginning after January 1, 2020, are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. We posted an adjusting entry decreasing retained earnings as of January 1, 2020, by $230 million, net of deferred taxes of $71 million, for the cumulative effect of adopting ASC 326. The main drivers of the adjustment to retained earnings are summarized in the following table.

	Pre-ASC 326 Adoption		Impact of ASC 326 Adoption		As Reported Under ASC 326
in millions	December 31, 2019				January 1, 2020
Allowance for credit losses
Commercial
Commercial and industrial	$	551	$	(141)	$	410
Real estate — commercial mortgage	143		16		159
Real estate — construction	22		(7)		15
Commercial lease financing	35		8		43
Total commercial loans	751		(124)		627
Consumer
Real estate — residential mortgage	7		77		84
Home equity loans	31		147		178
Consumer direct loans	34		63		97
Credit cards	47		35		82
Consumer indirect loans	30		6		36
Total consumer loans	149		328		477
Total ALLL — continuing operations	900		204		1,104
Discontinued operations	10		31		41
Total ALLL	910		235		1,145
Accrued expense and other liabilities	75		70		145
Total allowance for credit losses	$	985	$	305	$	1,290

In conjunction with the adoption of ASC 326, the following are additional disclosures about our significant accounting policies related to CECL.

Allowance for Held-to-Maturity Securities

Debt securities that we have the intent and ability to hold until maturity are classified as held-to-maturity and are carried at cost and adjusted for amortization of premiums and accretion of discounts using the interest method. This method produces a constant rate of return on the adjusted carrying amount.

Management classifies the held-to-maturity portfolio into the following major security types: agency residential collateralized mortgage obligations, agency residential mortgage-backed securities, agency commercial mortgage-backed securities, asset backed securities, and other. Management measures expected credit losses on held-to-maturity securities on a collective basis by major security type. The estimate of expected losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. We do not measure expected credit losses on held-to-maturity securities in which historical credit loss information adjusted for current conditions and reasonable and supportable forecasts results in an expectation that nonpayment of the amortized cost basis is zero.

All of our mortgage-backed securities are issued by U.S. government-sponsored enterprises or GNMA, are highly rated by major rating agencies and have a long history of no credit losses. Other securities are comprised of State of Israel bonds denominated and paid in U.S. dollars. Israel bonds have a long history of no credit losses. Additionally, as of September 30, 2020, the State of Israel's credit rating remains "stable" among Fitch, Moody's, and S&P (A+, A1, AA-).

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Allowance for Available-for-Sale Securities

Debt securities that we intend to hold for an indefinite period of time but that may be sold in response to changes in interest rates, prepayment risk, liquidity needs, or other factors are classified as available-for-sale and reported at fair value. Realized gains and losses resulting from sales of securities using the specific identification method are included in “other income” on the income statement. Unrealized gains and losses (net of income taxes) are recorded in equity as a component of AOCI.

For available-for-sale securities in an unrealized loss position, we first assess whether we intend to sell, or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of these criteria regarding intent or requirement to sell is met, the security's amortized cost basis is written down to fair value in “other income” on the income statement. For debt securities that do not meet the aforementioned criteria, we evaluate whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, nature of the security, the underlying collateral, and the financial condition of the issuer, among other factors. If this assessment indicates a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for available-for-sale securities is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for available-for-sale securities is recognized in other comprehensive income.

Changes in the allowance for available-for-sale securities are recorded as provision for (or reversal of) credit loss. Losses are charged against the allowance for available-for-sale securities when management believes the uncollectibility of an available-for-sale security is confirmed or when either criteria regarding intent or requirement to sell is met.

Loans

Accrued interest on loans is included in "other assets" on the balance sheet and is excluded from the calculation of the allowance for credit losses due to our charge-off policy to reverse accrued interest on nonperforming loans against interest income in a timely manner. We have not classified loans that receive a payment deferral or forbearance under a COVID-19 hardship relief program as nonperforming loans and continue to accrue and recognize interest income during the period of the deferral. We, therefore, recognize an allowance for credit losses for accrued interest receivable amounts that result from deferred payments under a COVID-19 hardship relief program because those amounts would not be considered to be written off in a timely manner. As of September 30, 2020, the allowance for credit losses on accrued interest receivable was immaterial.

Expected credit losses on net investments in leases, including any unguaranteed residual asset, are included in the ALLL.

Purchased Credit Deteriorated (PCD) Loans

In addition to originating loans, we also acquire loans through portfolio purchases or acquisitions of other financial services companies. Purchased loans that have evidence of more than insignificant credit deterioration since origination are deemed PCD loans. In accordance with ASC 326, we did not reassess whether recognized purchased credit impaired loans met the criteria of a PCD loan as of the date of adoption. PCD loans are initially recorded at fair value along with an allowance for credit losses determined using the same methodology as originated loans. The sum of the loan's purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses are recorded through provision for credit losses.

Nonperforming Loans

Nonperforming loans are loans for which we do not accrue interest income, and include commercial and consumer loans and leases, as well as current year TDRs and nonaccruing TDR loans from prior years. Nonperforming loans do not include loans held for sale. Once a loan is designated nonaccrual, the interest accrued but not collected is

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reversed against interest income, and payments subsequently received are applied to principal until qualifying for return to accrual.

Allowance for Loan and Lease Losses

We estimate the ALLL using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The ALLL is measured on a collective (pool) basis when similar risk characteristics exist. Our portfolio segments include commercial and consumer. Each of these two segments comprises multiple loan classes. Classes are characterized by similarities in initial measurement, risk attributes, and the manner in which we monitor and assess credit risk. The commercial segment is composed of commercial and industrial, commercial real estate, and commercial lease financing loan classes. The consumer lending segment is composed of residential mortgage, home equity, consumer direct, credit card, and consumer indirect loan classes.

The ALLL represents our current estimate of lifetime credit losses inherent in our loan portfolio at the balance sheet date. In determining the ALLL, we estimate expected future losses for the loan's entire contractual term adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications.

The ALLL is the sum of three components: (i) asset specific/ individual loan reserves; (ii) quantitative (formulaic or pooled) reserves; and (iii) qualitative (judgmental) reserves.

Asset Specific / Individual Component

Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the collective evaluation. We have elected to apply the practical expedient to measure expected credit losses of a collateral dependent asset using the fair value of the collateral, less any costs to sell, when foreclosure is not probable, when repayment of the loan is expected to be provided substantially through the operation or sale of the collateral, and the borrower is experiencing financial difficulty.

Individual reserves are determined as follows:

•For commercial non-accruing loans greater than or equal to a defined dollar threshold, individual reserves are determined based on an analysis of the present value of the loan's expected future cash flows, the loan's observable market value, or the fair value of the collateral less costs to sell.

•For commercial non-accruing loans below the defined dollar threshold, an established LGD percentage is multiplied by the loan balance and the results are aggregated for purposes of measuring specific reserve impairment.

•The population of individually assessed consumer loans includes loans deemed collateral dependent, in addition to all TDRs. The expected loss for these loans is estimated based on the present value of the loan's expected future cash flows, except in instances where the loan is collateral dependent, in which case the loan is written down based on the collateral's fair market value less costs to sell.

Quantitative Component

We use a non-DCF factor-based approach to estimate expected credit losses that include component PD/LGD/EAD models as well as less complex estimation methods for smaller loan portfolios.

•PD: This component model is used to estimate the likelihood that a borrower will cease making payments as agreed. The major contributors to this are the borrower credit attributes and macro-economic trends. The objective of the PD model is to produce default likelihood forecasts based on the observed loan-level information and projected paths of macroeconomic variables.

•LGD: This component model is used to estimate the loss on a loan once a loan is in default.

•EAD: Estimates the loan balance at the time the borrower stops making payments. For all term loans, an amortization based formulaic approach is used for account level EAD estimates. We calculate EAD using a portfolio specific method in each of our revolving product portfolios. For line products that are unconditionally cancellable, the balances will either use a paydown curve or be held flat through the life of the loan.

Additional information about the critical estimates and judgments we make in developing these models is provided in the section “Allowance for loan and lease losses” under the heading “Critical Accounting Policies and Estimates” in Item 2 of this report.

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Qualitative Component

The ALLL also includes identified qualitative factors related to idiosyncratic risk factors, changes in current economic conditions that may not be reflected in quantitatively derived results, and other relevant factors to ensure the ALLL reflects our best estimate of current expected credit losses.

While our reserve methodologies strive to reflect all relevant risk factors, there continues to be uncertainty associated with, but not limited to, potential imprecision in the estimation process due to the inherent time lag

of obtaining information and normal variations between estimates and actual outcomes. We provide additional reserves that are designed to provide coverage for losses attributable to such risks. The ALLL also includes factors that may not be directly measured in the determination of individual or collective reserves. Such qualitative factors may include:

•The nature and volume of the institution’s financial assets;

•The existence, growth, and effect of any concentrations of credit;

•The volume and severity of past due financial assets, the volume of nonaccrual assets, and the volume and severity of adversely classified or graded assets;

•The value of the underlying collateral for loans that are not collateral dependent;

•The institution’s lending policies and procedures, including changes in underwriting standards and practices for collections, write-offs, and recoveries;

•The quality of the institution’s credit review function;

•The experience, ability, and depth of the institution’s lending, investment, collection, and other relevant management and staff;

•The effect of other external factors such as the regulatory, legal and technological environments; competition; and events such as natural disasters; and

•Actual and expected changes in international, national, regional, and local economic and business conditions and developments in which the institution operates that affect the collectability of financial assets.

Liability for Credit Losses on Lending-Related Commitments

The liability for credit losses on lending-related commitments, such as letters of credit and unfunded loan commitments, is included in “accrued expense and other liabilities” on the balance sheet. Expected credit losses are estimated over the contractual period in which we are exposed to credit risk via a contractual obligation unless that obligation is unconditionally cancellable by us. The liability for credit losses on lending-related commitments is adjusted as a provision for credit losses. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated useful life. Consistent with our estimation process on our loan and lease portfolio, we use a non-DCF factor-based approach to estimate expected credit losses that include component PD/LGD/EAD models as well as less complex estimation methods for smaller portfolios.

Allowance for Credit Losses on Other Financial Assets

The allowance for credit losses on other financial assets, such as other receivables and servicing advances, is determined based on historical loss information and other available indicators. If such information does not indicate any expected credit losses, Key may estimate the allowance for credit losses on other financial assets to be zero or close to zero. As of September 30, 2020, the allowance for credit losses on other financial assets was immaterial.

Simplifying the Test for Goodwill Impairment (ASU 2017-04)

On January 1, 2020, we adopted ASU 2017-04. The ASU amends ASC Topic 350, Intangibles - Goodwill and Other and eliminates the second step of the test for goodwill impairment. Goodwill represents the amount by which the cost of net assets acquired in a business combination exceeds their fair value. Goodwill is assigned to reporting units as of the acquisition date based on the expected benefit to such reporting unit from the synergies of the business combination. Goodwill is not amortized. Goodwill is tested at the reporting unit level for impairment, at least annually as of October 1, or when indicators of impairment exist.

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When indicators of impairment exist we may look to both quantitative and qualitative information to determine whether or not it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. Factors considered in the assessment include, but are not limited to, macroeconomic conditions, industry and market considerations, stock performance, financial performance of the reporting units, and previous results of goodwill impairment tests. When it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount a quantitative test is required. Under the new accounting guidance, the quantitative analysis requires the estimated fair value of each reporting unit to be compared to its carrying amount, including goodwill. If the estimated fair value of the reporting unit is less than its carrying value, an impairment charge would be recorded for the excess, not to exceed the amount of goodwill allocated to the reporting unit. The adoption of this accounting guidance must be applied prospectively and is not expected to have a material effect on our financial condition or results of operations. See Note 10 (“Goodwill”) for results of our interim goodwill impairment test.

Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04)

We adopted ASU 2020-04 on April 1, 2020. The amendments provide optional expedients and exceptions for certain contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of rate reform. The guidance is effective from the date of issuance until December 31, 2022. The guidance permits Key not to apply modification accounting or remeasure lease payments in lease contracts if the changes to the contract are related to the discontinuation of the reference rate. If certain criteria are met, the amendments also allow exceptions to the dedesignation criteria of the hedging relationship and the assessment of hedge effectiveness during the transition period. It also allows Key to make a one time election to sell, transfer, or both sell and transfer debt securities classified as held to maturity that reference a rate affected by reference rate reform and that are classified as held to maturity before January 1, 2020. This one time election may be made at any time after March 12, 2020, but no later than December 31, 2022. Key has not made a determination on whether it will make this election. At the time of adoption, the guidance did not have a significant impact on Key’s financial condition and results of operations. We will continue to assess the impact as the reference rate transition occurs over the next two years.

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2. Earnings Per Common Share

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

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

	Three months ended September 30,				Nine months ended September 30,
dollars in millions, except per share amounts	2020		2019		2020		2019
EARNINGS
Income (loss) from continuing operations	$	424	$	413	$	754	$	1,242
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		—
Income (loss) from continuing operations attributable to Key	424		413		754		1,242
Less: Dividends on Preferred Stock	27		30		80		70
Income (loss) from continuing operations attributable to Key common shareholders	397		383		674		1,172
Income (loss) from discontinued operations, net of taxes	4		3		7		6
Net income (loss) attributable to Key common shareholders	$	401	$	386	$	681	$	1,178
WEIGHTED-AVERAGE COMMON SHARES
Weighted-average Common Shares outstanding (000)	967,804		988,319		967,632		998,268
Effect of Common Share options and other stock awards	6,184		10,009		6,648		9,632
Weighted-average Common Shares and potential Common Shares outstanding (000) (a)	973,988		998,328		974,280		1,007,900
EARNINGS PER COMMON SHARE
Income (loss) from continuing operations attributable to Key common shareholders	$	.41	$	.39	$	.70	$	1.17
Income (loss) from discontinued operations, net of taxes	—		—		.01		.01
Net income (loss) attributable to Key common shareholders (b)	.41		.39		.70		1.18
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution	$	.41	$	.38	$	.69	$	1.16
Income (loss) from discontinued operations, net of taxes — assuming dilution	—		—		.01		.01
Net income (loss) attributable to Key common shareholders — assuming dilution (b)	.41		.39		.70		1.17

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

(b)EPS may not foot due to rounding.

3. Loan Portfolio

Loan Portfolio by Portfolio Segment and Financing Receivable (a)

in millions	September 30, 2020		December 31, 2019
Commercial and industrial (b)	$	55,025	$	48,295
Commercial real estate:
Commercial mortgage	13,059		13,491
Construction	1,947		1,558
Total commercial real estate loans	15,006		15,049
Commercial lease financing (c)	4,450		4,688
Total commercial loans	74,481		68,032
Residential — prime loans:
Real estate — residential mortgage	8,715		7,023
Home equity loans	9,488		10,274
Total residential — prime loans	18,203		17,297
Consumer direct loans	4,395		3,513
Credit cards	970		1,130
Consumer indirect loans	5,032		4,674
Total consumer loans	28,600		26,614
Total loans (d)	$	103,081	$	94,646

(a)Accrued interest of $235 million and $244 million at September 30, 2020, and December 31, 2019, respectively, presented in "other assets" on the Consolidated Balance Sheets is excluded from the amortized cost basis disclosed in this table.

(b)Loan balances include $128 million and $144 million of commercial credit card balances at September 30, 2020, and December 31, 2019, respectively.

(c)Commercial lease financing includes receivables held as collateral for a secured borrowing of $18 million and $15 million at September 30, 2020, and December 31, 2019, respectively. Principal reductions are based on the cash payments received from these related receivables. Additional information pertaining to this secured borrowing is included in Note 20 (“Long-Term Debt”) beginning on page 163 of our 2019 Form 10-K.

(d)Total loans exclude loans of $743 million at September 30, 2020, and $865 million at December 31, 2019, related to the discontinued operations of the education lending business.

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4. Asset Quality

ALLL

We estimate the appropriate level of the ALLL on at least a quarterly basis. The methodology is described in Note 1 ("Basis of Presentation and Accounting Policies") under the heading "Allowance for Loan and Lease Losses" of this report.

The ALLL at September 30, 2020, represents our current estimate of lifetime 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, 2020:

in millions	June 30, 2020		Provision			Charge-offs		Recoveries		September 30, 2020
Commercial and Industrial	$	725	$	177		$	(101)	$	9	$	810
Commercial real estate:
Real estate — commercial mortgage	292		(2)			(13)		2		279
Real estate — construction	41		(7)			—		—		34
Total commercial real estate loans	333		(9)			(13)		2		313
Commercial lease financing	55		13			(10)		—		58
Total commercial loans	1,113		181			(124)		11		1,181
Real estate — residential mortgage	101		2			—		1		104
Home equity loans	197		(13)			(4)		3		183
Consumer direct loans	130		1			(8)		2		125
Credit cards	107		(5)			(9)		2		95
Consumer indirect loans	60		(16)			(6)		4		42
Total consumer loans	595		(31)			(27)		12		549
Total ALLL — continuing operations	1,708		150		(a)	(151)		23		1,730
Discontinued operations	43		(1)			—		—		42
Total ALLL — including discontinued operations	$	1,751	$	149		$	(151)	$	23	$	1,772

(a)Excludes a provision for losses on lending-related commitments of $10 million.

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.

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Nine months ended September 30, 2020:

in millions	December 31, 2019		Impact of ASC 326 Adoption		January 1, 2020		Provision			Charge-offs		Recoveries		September 30, 2020
Commercial and Industrial	$	551	$	(141)	$	410	$	613		$	(232)	$	19	$	810
Commercial real estate:
Real estate — commercial mortgage	143		16		159		135			(18)		3		279
Real estate — construction	22		(7)		15		19			—		—		34
Total commercial real estate loans	165		9		174		154			(18)		3		313
Commercial lease financing	35		8		43		30			(16)		1		58
Total commercial loans	751		(124)		627		797			(266)		23		1,181
Real estate — residential mortgage	7		77		84		21			(2)		1		104
Home equity loans	31		147		178		9			(10)		6		183
Consumer direct loans	34		63		97		52			(30)		6		125
Credit cards	47		35		82		39			(32)		6		95
Consumer indirect loans	30		6		36		16			(22)		12		42
Total consumer loans	149		328		477		137			(96)		31		549
Total ALLL — continuing operations	900		204		1,104		934		(a)	(362)		54		1,730
Discontinued operations	10		31		41		2			(4)		3		42
Total ALLL — including discontinued operations	$	910	$	235	$	1,145	$	936		$	(366)	$	57	$	1,772

(a)Excludes a provision for losses on lending-related commitments of $67 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.

As described in Note 1 ("Basis of Presentation and Accounting Policies"), we estimate the ALLL using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. In our estimation of expected credit losses, we use a two year reasonable and supportable period across all products. Following this two year period in which supportable forecasts can be generated, for all modeled loan portfolios, we revert expected credit losses to a level that is consistent with our historical information by reverting the macroeconomic variables (model inputs) to their long run average. We revert to historical loss rates for less complex estimation methods for smaller portfolios. A 20 year fixed length look back period is used to calculate the long run average of the macroeconomic variables. A four quarter reversion period is used where the macroeconomic variables linearly revert to their long run average following the two year reasonable and supportable period.

We develop our reasonable and supportable forecasts using relevant data including, but not limited to, changes in economic output, unemployment rates, property values, and other factors associated with the credit losses on financial assets. Some macroeconomic variables apply to all portfolio segments, while others are more portfolio specific. The following table discloses key macroeconomic variables for each loan portfolio.

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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

(a)Variables include all transformations and interactions with other risk drivers. Additionally, variables may have varying impacts at different points in the economic cycle.

In addition to macroeconomic drivers, portfolio attributes such as remaining term, outstanding balance, risk ratings, FICO, LTV, and delinquency also drive ALLL changes. Our ALLL models were designed to capture the correlation between economic and portfolio changes. As such, evaluating shifts in individual portfolio attributes and macroeconomic variables in isolation may not be indicative of past or future performance.

Economic Outlook

As of September 30, 2020, the COVID-19 pandemic has continued to create unprecedented economic stress and uncertainty in the U.S. and globally. We utilized the Moody’s August 2020 Consensus forecast to estimate our expected credit losses as of September 30, 2020. This forecast considered the global economic fallout from the ongoing pandemic as well as the potential United States' monetary and fiscal response. We determined such forecast to be a reasonable view of the outlook for the global economy given the available information at current quarter end.

The baseline scenario reflects a moderate economic slowdown over the next two years in markets in which we operate. U.S. GDP rebounds with a 20% annualized growth rate in the third quarter of 2020, but due to the unprecedented decline in the second quarter of 2020 is expected to decline approximately 5% in all of 2020. GDP continues to grow throughout 2021, but at a declining rate and is not expected to return to pre-pandemic levels until early 2022. The national unemployment rate forecast is 10.7% in the third quarter of 2020 and 9.3% in the fourth quarter of 2020, and is forecast to remain in the upper-single digits throughout 2021.

To the extent we identified credit risk considerations that were not captured by the third-party economic forecast, we addressed the risk through management’s qualitative adjustments to the ALLL.

As a result of the unprecedented economic uncertainty caused by the COVID-19 pandemic, our future loss estimates may vary considerably from our September 30, 2020, assumptions.

Commercial Loan Portfolio

The ALLL from continuing operations for the commercial segment increased by $68 million, or 6.1%, from June 30, 2020. The overall increase in the allowance is driven by updated economic forecasts and downward portfolio migration, which are partially offset by a decline in loan balances.

The primary changes to the economic forecast include modest deterioration in the unemployment and GDP growth outlook, which contributes to the ALLL increase for the overall commercial segment. Improvements in real estate price indices contributed to a modest reduction in reserve in our commercial real estate book. Risk rating migrations are also driving higher ALLL levels for the commercial and industrial segment. We continue to closely monitor the oil & gas exposure and the ALLL results reflect incremental risk considerations for this segment.

As of September 30, 2020, we concluded that no ALLL is necessary for $8.0 billion in outstanding PPP loans as they are 100% guaranteed by the SBA.

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Consumer Loan Portfolio

The ALLL from continuing operations for the consumer segment decreased by $46 million, or 7.7%, from June 30, 2020. The overall decrease in the allowance is driven by updated economic forecasts that capture an improving outlook for several drivers and strong portfolio performance.

The most meaningful changes to the economic forecast contributing to the reduction in reserves include improvement in the Manheim Used Vehicle Value Index forecast, which impacts the indirect loan portfolio, as well as improvement in the HPI outlook as the housing market continues to display strength, which impacts the residential mortgage and home equity segments. As it relates to the decline in the ALLL due to portfolio factors, shifts are largely driven by attrition activity, targeted portfolio growth and overall strong credit drivers. The ALLL results also reflect incremental credit risk considerations as a result of the economic stress and related borrower assistance programs, which are addressed through qualitative adjustments.

Credit Risk Profile

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. The internal risk grades assigned to loans follow our definitions of Pass and Criticized, which are consistent with published definitions of regulatory risk classifications. Loans with a pass rating represent those loans not classified on our rating scale for problem credits, as minimal credit risk has been identified. Criticized loans are those loans that either have a potential weakness deserving management's close attention or have a well-defined weakness that may put full collection of contractual cash flows at risk. 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 tables below at the dates indicated.

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

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Commercial Credit Exposure

Credit Risk Profile by Creditworthiness Category and Vintage (a)

As of September 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	$	13,328	$	5,936	$	4,512	$	3,141	$	2,223	$	3,018	$	19,876	$	153	$	52,187
Criticized (Accruing)	39		131		164		201		137		251		1,434		22		2,379
Criticized (Nonaccruing)	6		14		63		31		20		41		283		1		459
Total commercial and industrial	13,373		6,081		4,739		3,373		2,380		3,310		21,593		176		55,025
Real estate — commercial mortgage
Risk Rating:
Pass	1,341		3,186		1,877		918		879		3,267		807		46		12,321
Criticized (Accruing)	3		40		65		113		85		246		80		2		634
Criticized (Nonaccruing)	—		1		4		3		1		90		5		—		104
Total real estate — commercial mortgage	1,344		3,227		1,946		1,034		965		3,603		892		48		13,059
Real estate — construction
Risk Rating:
Pass	242		701		624		226		34		25		24		5		1,881
Criticized (Accruing)	—		3		18		—		41		2		1		—		65
Criticized (Nonaccruing)	—		—		—		—				1		—		—		1
Total real estate — construction	242		704		642		226		75		28		25		5		1,947
Commercial lease financing
Risk Rating:
Pass	793		1,180		620		561		273		939		—		—		4,366
Criticized (Accruing)	9		14		18		19		9		9		—		—		78
Criticized (Nonaccruing)	—		—		1		2		3		—		—		—		6
Total commercial lease financing	802		1,194		639		582		285		948				—		4,450
Total commercial loans	$	15,761	$	11,206	$	7,966	$	5,215	$	3,705	$	7,889	$	22,510	$	229	$	74,481

(a)Accrued interest of $133 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 September 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	$	2,561	$	1,774	$	242	$	286	$	604	$	1,372	—		—		$	6,839
660 to 749	550		350		88		58		108		362		—		—		1,516
Less than 660	15		34		24		11		23		183		—		—		290
No Score	—		2		4		6		2		55		1		—		70
Total real estate — residential mortgage	3,126		2,160		358		361		737		1,972		1		—		8,715
Home equity loans
FICO Score:
750 and above	644		417		166		192		185		815		$	2,874	$	639	5,932
660 to 749	213		249		115		119		96		380		1,308		229		2,709
Less than 660	22		50		29		29		34		155		450		65		834
No Score	2		2		1		—		—		2		5		1		13
Total home equity loans	881		718		311		340		315		1,352		4,637		934		9,488
Consumer direct loans
FICO Score:
750 and above	1,426		1,008		131		39		21		65		127		—		2,817
660 to 749	367		295		91		26		16		33		263		—		1,091
Less than 660	17		38		22		9		5		12		86		—		189
No Score	34		39		22		17		10		12		164		—		298
Total consumer direct loans	1,844		1,380		266		91		52		122		640		—		4,395
Credit cards
FICO Score:
750 and above	—		—		—		—		—		—		469		—		469
660 to 749	—		—		—		—		—		—		405		—		405
Less than 660	—		—		—		—		—		—		95		—		95
No Score	—		—		—		—		—		—		1		—		1
Total credit cards	—		—		—		—		—		—		970		—		970
Consumer indirect loans
FICO Score:
750 and above	944		991		415		221		87		80		—		—		2,738
660 to 749	595		633		264		115		46		57		—		—		1,710
Less than 660	125		184		113		62		30		33		—		—		547
No Score	37		—		—		—		—		—		—		—		37
Total consumer indirect loans	1,701		1,808		792		398		163		170		—		—		5,032
Total consumer loans	$	7,552	$	6,066	$	1,727	$	1,190	$	1,267	$	3,616	$	6,248	$	934	$	28,600

(a)Accrued interest of $102 million, presented in Other Assets on the Consolidated Balance Sheets, was excluded from the amortized cost basis disclosed in this table.

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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 (”Basis of Presentation and Accounting Policies”) and Note 1 (“Summary of Significant Accounting Policies”) under the heading “Nonperforming Loans” beginning on page 101 of our 2019 Form 10-K.

Under the CARES Act as well as banking regulator interagency guidance, certain loan modifications to borrowers experiencing financial distress as a result of the economic impacts created by the COVID-19 pandemic may not be required to be reported as past due and nonperforming. For COVID-19 related loan modifications which occurred from March 1, 2020, through September 30, 2020, and met the loan modification criteria under either the CARES Act or the criteria specified by the regulatory agencies, we have elected to re-age to current status all commercial loans and consumer loans that are not secured by real-estate and freeze the delinquency status of consumer real estate secured loans as of the modification or forbearance grant date. At September 30, 2020, $4.5 billion of loan modifications and forbearances made under the criteria of either the CARES Act or banking regulator interagency guidance were not reported as nonperforming.

The following aging analysis of past due and current loans as of September 30, 2020, and December 31, 2019, provides further information regarding Key’s credit exposure.

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Aging Analysis of Loan Portfolio(a)

September 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	$	54,385	$	104	$	53	$	24	$	459	$	640	$	55,025
Commercial real estate:
Commercial mortgage	12,900		23		14		18		104		159		13,059
Construction	1,942		1		2		1		1		5		1,947
Total commercial real estate loans	14,842		24		16		19		105		164		15,006
Commercial lease financing	4,418		21		3		2		6		32		4,450
Total commercial loans	$	73,645	$	149	$	72	$	45	$	570	$	836	$	74,481
Real estate — residential mortgage	$	8,594	$	17	$	5	$	3	$	96	$	121	$	8,715
Home equity loans	9,275		42		12		13		146		213		9,488
Consumer direct loans	4,377		7		4		4		3		18		4,395
Credit cards	956		4		2		6		2		14		970
Consumer indirect loans	4,991		18		4		2		17		41		5,032
Total consumer loans	$	28,193	$	88	$	27	$	28	$	264	$	407	$	28,600
Total loans	$	101,838	$	237	$	99	$	73	$	834	$	1,243	$	103,081

(a)Amounts in table represent amortized cost and exclude loans held for sale.

(b)Accrued interest of $235 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.

At September 30, 2020, the approximate carrying amount of our commercial nonperforming loans outstanding represented 77% of their original contractual amount owed, total nonperforming loans outstanding represented 80% of their original contractual amount owed, and nonperforming assets in total were carried at 87% of their original contractual amount owed.

Nonperforming loans reduced expected interest income by $7 million and $20 million for the three and nine months ended September 30, 2020, respectively, and $7 million and $24 million for the three and nine months ended September 30, 2019, respectively.

The amortized cost basis of nonperforming loans on nonaccrual status for which there is no related allowance for credit losses was $456 million at September 30, 2020.

Collateral-dependent Financial Assets

We classify financial assets as collateral-dependent when our borrower is experiencing financial difficulty, and we expect repayment to be provided substantially through the operation or sale of the collateral. Our commercial loans have collateral that includes commercial machinery, commercial properties, and commercial real estate construction projects. Our consumer loans have collateral that includes residential real estate, automobiles, boats, and RVs.

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There were no significant changes in the extent to which collateral secures our collateral-dependent financial assets during the three months ended September 30, 2020.

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. Our loan modifications are handled on a case-by-case basis and are negotiated to achieve mutually agreeable terms that maximize loan collectability and meet the borrower’s financial needs. Under the CARES Act as well as banking regulator interagency guidance, certain loan modifications to borrowers experiencing financial distress as a result of the economic impacts created by the COVID-19 pandemic may not be required to be treated as TDRs under U.S. GAAP.  We elected to suspend TDR accounting for $4.5 billion of COVID-19 related loan modifications as of September 30, 2020 as such loan modifications met the criteria under either the CARES Act or banking regulator interagency guidance. 

Commitments outstanding to lend additional funds to borrowers whose loan terms have been modified in TDRs were $1 million and $5 million at September 30, 2020, and December 31, 2019, respectively.

The consumer TDR other concession category in the table below primarily includes those borrowers’ debts that are discharged through Chapter 7 bankruptcy and have not been formally re-affirmed. At September 30, 2020, and December 31, 2019, the recorded investment of consumer residential mortgage loans in the process of foreclosure was approximately $99 million and $97 million, respectively.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
in millions	2020		2019		2020		2019
Commercial loans:
Extension of Maturity Date	—		$	6	$	8	$	11
Payment or Covenant Modification/Deferment	—		—		—		1
Bankruptcy Plan Modification	—		—		—		—
Increase in new commitment or new money	—		2		—		12
Total	—		$	8	$	8	$	24
Consumer loans:
Interest rate reduction	$	13	$	4	$	22	$	12
Other	6		8		18		21
Total	$	19	$	12	$	40	$	33
Total TDRs	$	19	$	20	$	48	$	57

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	2020		2019		2020		2019
Balance at beginning of the period	$	310	$	395	$	347	$	399
Additions	26		20		65		88
Payments	(22)		(65)		(75)		(123)
Charge-offs	(8)		(3)		(31)		(17)
Balance at end of period	$	306	$	347	$	306	$	347

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

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	September 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	51	$	51	$	39	51	$	72	$	53
Commercial real estate:
Commercial mortgage	7	62		50		6	64		58
Total commercial real estate loans	7	62		50		6	64		58
Total commercial loans	58	113		89		57	136		111
Real estate — residential mortgage	271	28		27		181	13		11
Home equity loans	629	40		37		713	42		41
Consumer direct loans	153	2		2		172	2		2
Credit cards	279	2		1		368	2		2
Consumer indirect loans	867	15		12		1,131	19		16
Total consumer loans	2,199	87		79		2,565	78		72
Total nonperforming TDRs	2,257	200		168		2,622	214		183
Prior-year accruing:(a)
Commercial and industrial	4	5		2		6	30		25
Commercial real estate
Commercial mortgage	1	—		—		1	—		—
Total commercial real estate loans	1	—		—		1	—		—
Total commercial loans	5	5		2		7	30		25
Real estate — residential mortgage	472	35		29		493	37		31
Home equity loans	1,829	108		87		1,751	104		84
Consumer direct loans	178	4		2		139	4		3
Credit cards	584	4		1		486	3		1
Consumer indirect loans	813	31		17		714	33		20
Total consumer loans	3,876	182		136		3,583	181		139
Total prior-year accruing TDRs	3,881	187		138		3,590	211		164
Total TDRs	6,138	$	387	$	306	6,212	$	425	$	347

(a)All TDRs that were restructured prior to January 1, 2020, and January 1, 2019, 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, 2020, there were no commercial loan TDRs and 33 consumer loan TDRs with a combined recorded investment of $1 million that experienced payment defaults after modifications resulting in TDR status during 2019. 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 nine months ended September 30, 2020, there were no commercial loan TDRs and 160 consumer loan TDRs with a combined recorded investment of $4 million that experienced payment defaults after modifications resulting in TDR status during 2019. 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.

Liability for Credit Losses on Off Balance Sheet Exposures

The liability for credit losses inherent in unfunded lending-related commitments, such as letters of credit and unfunded loan commitments, and certain financial guarantees is included in “accrued expense and other liabilities” on the balance sheet.

Changes in the liability for credit losses on off balance sheet exposures are summarized as follows:

	Three months ended September 30,				Nine months ended September 30,
in millions	2020		2019		2020		2019
Balance at the end of the prior period	$	198	$	64	$	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	198		64		141		64
Provision (credit) for losses on off balance sheet exposures	10		1		67		1
Balance at end of period	$	208	$	65	$	208	$	65

(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.

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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 2019 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, 2020, and December 31, 2019.

	September 30, 2020								December 31, 2019
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
in millions
ASSETS MEASURED ON A RECURRING BASIS
Short-term investments
U.S. Treasury Bills	—		$	1,000	—		$	1,000	—		$	—	—		$	—
Total short-term investments	—		1,000		—		1,000		—		—		—		—
Trading account assets:
U.S. Treasury, agencies and corporations	—		611		—		611		—		843		—		843
States and political subdivisions	—		52		—		52		—		30		—		30
Other mortgage-backed securities	—		13		$	27	40		—		78		—		78
Other securities	$	1	12		—		13		—		44		—		44
Total trading account securities	1		688		27		716		—		995		—		995
Commercial loans	—		17		—		17		—		45		—		45
Total trading account assets	1		705		27		733		—		1,040		—		1,040
Securities available for sale:
U.S. Treasury, agencies and corporations	—		4,464		—		4,464		—		334		—		334
States and political subdivisions	—		3		—		3		—		4		—		4
Agency residential collateralized mortgage obligations	—		13,732		—		13,732		—		12,783		—		12,783
Agency residential mortgage-backed securities	—		1,326		—		1,326		—		1,714		—		1,714
Agency commercial mortgage-backed securities	—		7,358		—		7,358		—		6,997		—		6,997
Other securities	—		—		12		12		—		—		$	11	11
Total securities available for sale	—		26,883		12		26,895		—		21,832		11		21,843
Other investments:
Principal investments:
Direct	—		—		1		1		—		—		1		1
Indirect (measured at NAV) (a)	—		—		—		60		—		—		—		68
Total principal investments	—		—		1		61		—		—		1		69
Equity investments:
Direct	—		—		12		12		—		—		12		12
Direct (measured at NAV) (a)	—		—		—		1		—		—		—		1
Indirect (measured at NAV) (a)	—		—		—		7		—		—		—		8
Total equity investments	—		—		12		20		—		—		12		21
Total other investments	—		—		13		81		—		—		13		90
Loans, net of unearned income (residential)	—		—		8		8		—		—		4		4
Loans held for sale (residential)	—		287		1		288		—		140		—		140
Derivative assets:
Interest rate	—		1,746		81		1,827		—		941		22		963
Foreign exchange	56		18		—		74		$	49	18		—		67
Commodity	—		462		—		462		—		208		—		208
Credit	—		1		2		3		—		—		1		1
Other	—		26		44		70		—		9		5		14
Derivative assets	56		2,253		127		2,436		49		1,176		28		1,253
Netting adjustments (b)	—		—		—		(490)		—		—		—		(473)
Total derivative assets	56		2,253		127		1,946		49		1,176		28		780
Accrued income and other assets	—		—		—		—		—		—		—		—
Total assets on a recurring basis at fair value	$	57	$	30,128	$	188	$	30,951	$	49	$	24,188	$	56	$	23,897
LIABILITIES MEASURED ON A RECURRING BASIS
Bank notes and other short-term borrowings:
Short positions	$	289	$	529	—		$	818	$	19	$	686	—		$	705
Derivative liabilities:
Interest rate	—		306		—		306		—		253		—		253
Foreign exchange	51		17		—		68		43		17		—		60
Commodity	—		445		—		445		—		200		—		200
Credit	—		—		$	15	15		—		1		$	9	10
Other	—		13		—		13		—		10		—		10
Derivative liabilities	51		781		15		847		43		481		9		533
Netting adjustments (b)	—		—		—		(679)		—		—		—		(335)
Total derivative liabilities	51		781		15		168		43		481		9		198
Total liabilities on a recurring basis at fair value	$	340	$	1,310	$	15	$	986	$	62	$	1,167	$	9	$	903

(a)Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet.

(b)Netting adjustments represent the amounts recorded to convert our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. The net basis takes into account the impact of bilateral collateral and master netting agreements that allow us to settle all derivative contracts with a single counterparty on a net basis and to offset the net derivative position with the related cash collateral. Total derivative assets and liabilities include these netting adjustments.

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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 (includes trading account assets, securities available for sale, and U.S. Treasury Bills classified as short-term investments)	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: • Internally developed valuation techniques, principally discounted cash flow methods (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, 2020, the balance is less than $1 million.	Level 3
Principal investments (indirect)	Indirect principal investments include primary and secondary investments in private equity funds engaged mainly in venture- and growth-oriented investing. These investments do not have readily determinable fair values and qualify for the practical expedient to estimate fair value based upon net asset value per share (or its equivalent, such as member units or an ownership interest in partners’ capital to which a proportionate share of net assets is attributed). Indirect principal investments are also accounted for as investment companies, whereby each investment is adjusted to fair value with any net realized or unrealized gain/loss recorded in the current period’s earnings. Under the provisions of the Volcker Rule, we are required to dispose or conform our indirect investments to the requirements of the statute by no later than July 21, 2022. As of September 30, 2020, we have not committed to a plan to sell these investments. Therefore, these investments continue to be valued using the net asset value per share methodology.	NAV

The following table presents the fair value of our direct and indirect principal investments and related unfunded commitments at September 30, 2020, as well as financial support provided for the three and nine months ended September 30, 2020, and September 30, 2019.

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					Financial support provided
					Three months ended September 30,						Nine months ended September 30,
	September 30, 2020				2020				2019		2020			2019
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)	60		$	18	$	1	—		—	—	$	1	—	$	2	—
Total	$	61	$	18	1		$	—	—	—	$	1	—	$	2	—

(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, 2020, no significant liquidation of the underlying investments has been communicated to Key. The purpose of funding our capital commitments to these investments is to allow the funds to make additional follow-on investments and pay fund expenses until the fund dissolves. We, and all other investors in the fund, are obligated to fund the full amount of our respective capital commitments to the fund based on our and their respective ownership percentages, as noted in the applicable Limited Partnership Agreement.

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

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Asset/liability class	Valuation technique	Valuation hierarchy classification(s)
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: • LIBOR and OIS curves, index pricing curves, foreign currency curves • Volatility surfaces (a three-dimensional graph of implied volatility against strike price and maturity) We have customized derivative instruments and risk participations that are classified as Level 3 instruments. These derivative positions are valued using internally developed models, with inputs consisting of available market data, including: • Credit spreads and interest rates The unobservable internally derived assumptions include: • Loss given default • Internal risk assessments of customers 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, for sold risk participation agreements, a higher loss probability and a lower credit rating would negatively affect the fair value of the risk participations and a lower loss probability and higher credit rating would positively affect the fair value of the risk participations. (For purchased risk participation agreements, higher loss probabilities and lower credit ratings would positively affect the fair value.) 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, 2020, and September 30, 2019. 

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in millions	Beginning of Period Balance		Gains (Losses) Included in Other Comprehensive Income		Gains (Losses) Included in Earnings			Purchases		Sales		Settlements	Transfers Other		Transfers into Level 3			Transfers out of Level 3			End of Period Balance		Unrealized Gains (Losses) Included in Earnings
Nine months ended September 30, 2020
Trading account assets
Other mortgage-backed securities	—		—		—			—		$	(9)	—	—		$	36	(d)	—			$	27	—
Securities available for sale
Other securities	$	11	$	1	—			—		—		—	—		—			—			12		—
Other investments
Principal investments
Direct (a)	1		—		—			—		—		—	—		—			—			1		—
Equity investments
Direct (a)	12		—		—			—		—		—	—		—			—			12		—
Loans held for sale (residential)	—		—		—			—		(10)		—	$	11	—			—			1		—
Loans, net of unearned income (residential)	4		—		—			—		(2)		—	6		—			—			8		—
Derivative instruments (b)
Interest rate	22		—		$	18	(c)	$	14	(5)		—	—		98		(d)	$	(66)	(d)	81		—
Credit	(8)		—		(6)		(c)	1		—		—	—		—			—			(13)		—
Other (e)	5		—		—			—		—		—	39		—			—			44		—
Three months ended September 30, 2020
Trading account assets
Other mortgage-backed securities	$	36	—		—			—		$	(9)	—	—		—			—			$	27	—
Securities available for sale
Other securities	12		$	—	—			—		—		—	—		—			—			12		—
Other investments
Principal investments
Direct (a)	1		—		—			—		—		—	—		—			—			1		—
Equity investments
Direct (a)	12		—		—			—		—		—	—		—			—			12		—
Loans held for sale (residential)	—		—		—			—		—		—	$	1	—			—			1		—
Loans, net of unearned income (residential)	5		—		—			—		—		—	3		—			—			8		—
Derivative instruments (b)
Interest rate	52		—		$	(3)	(c)	$	2	(4)		—	—		$	36	(d)	$	(2)	(d)	81		—
Credit	(17)		—		4		(c)	—				—	—		—						(13)		—
Other (e)	46		—		5			—		—		—	(7)		—			—			44		—

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 (a)	1		—		—			—		—		—	—		—			—			1		—
Equity investments
Direct (a)	7		—		$	(1)		—		—		—	—		$	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)		(c)	$	(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 (a)	1		—		—			—		—		—	—		—			—			1		—
Equity investments
Direct (a)	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)	—		—		—	—		—			$	(2)	(d)	3		—
Credit	(1)		—		(5)		(c)	—		$	1	—	—		—			—			(5)		—
Other (e)	6		—		—			—		—		—	—		—			—			6		—

(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 instruments 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, 2020, and December 31, 2019.

The following table presents our assets measured at fair value on a nonrecurring basis at September 30, 2020, and December 31, 2019:

	September 30, 2020							December 31, 2019
in millions	Level 1	Level 2		Level 3		Total		Level 1	Level 2		Level 3		Total
ASSETS MEASURED ON A NONRECURRING BASIS
Collateral-dependent loans	—	$	—	$	89	$	89	—	—		$	76	$	76
Accrued income and other assets	—	—		103		103		—	$	118	51		169
Total assets on a nonrecurring basis at fair value	—	$	—	$	192	$	192	—	$	118	$	127	$	245

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)
Collateral-dependent loans	When a loan is collateral-dependent, the fair value of the loan is determined based on the fair value of the underlying collateral.	Level 3
Commercial loans and student loans held for sale	Through a quarterly analysis of our loan portfolios held for sale, which include both performing and nonperforming commercial loans and student loans, we determine any adjustments necessary to record the portfolios at the lower of cost or fair value in accordance with GAAP. Valuation inputs include: • Non-binding bids for the respective loans or similar loans • Recent sales transactions • Internal models that emulate recent securitizations	Level 2 and 3
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(a)	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(a)	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, 2020, and December 31, 2019, the carrying amount of equity investments under this method was $158 million and $134 million, respectively. No impairment was recorded for the three or nine months ended September 30, 2020.	Level 3
Mortgage Servicing Assets(a)	Refer to Note 8. Mortgage Servicing Assets	Level 3

(a)Asset classes included in “Accrued income and other assets” on the Consolidated Balance Sheets

Quantitative Information about Level 3 Fair Value Measurements

The range and weighted-average of the significant unobservable inputs used to fair value our material Level 3

recurring and nonrecurring assets at September 30, 2020, and December 31, 2019, along with the valuation

techniques used, are shown in the following table:

	Level 3 Asset (Liability)				Valuation  Technique	Significant Unobservable Input	Range (Weighted-Average) (b), (c)
dollars in millions	September 30, 2020		December 31, 2019				September 30, 2020	December 31, 2019
Recurring
Trading account assets:
Other mortgage-backed securities	$	27	$	—	Discounted cash flows	Discount rate	3.10% - 4.11% (3.25%)	N/A
						Conditional prepayment rate	N/A (9.00)	N/A
						Constant default rate	N/A (0.75)	N/A
						Loss severity	N/A (50.00%)	N/A
Securities available-for-sale:
Other securities	$	12	11		Discounted cash flows	Discount rate	N/A (15.09%)	N/A (16.10%)
						Marketability discount	N/A (30.00%)	N/A (30.00%)
						Volatility factor	N/A (44.00%)	N/A (43.00%)
Other investments:(a)
Equity investments
Direct	12		12		Discounted cash flows	Discount rate	13.39 - 16.42% (14.93%)	13.91 - 17.24% (15.61%)
						Marketability discount	N/A (30.00%)	N/A (30.00%)
						Volatility factor	N/A (55.00%)	N/A (47.00%)
Loans held for sale (residential)	1		—		Market comparable pricing	Comparability factor	N/A (91.38%)	N/A
Loans, net of unearned income (residential)	8		4		Market comparable pricing	Comparability factor	79.00-98.37% (94.73%)	79.00 - 98.00% (91.05%)
Derivative instruments:
Interest rate	81		22		Discounted cash flows	Probability of default	.02 - 100% (11.50%)	.02 - 100% (5.40%)
						Internal risk rating	1 - 19 (9.284)	1 - 19 (9.168)
						Loss given default	0 - 1 (.471)	0 - 1 (.492)
Credit (assets)	2		1		Discounted cash flows	Probability of default	.02 - 100% (8.20%)	.02 - 100% (4.2%)
						Internal risk rating	1 - 19 (10.581)	1 - 19 (10.13)
						Loss given default	0 - 1 (.490)	0 - 1 (.498)
Credit (liabilities)	(15)		(9)		Discounted cash flows	Probability of default	.02 - 100% (16.08%)	.02 - 100% (12.24%)
						Internal risk rating	1 - 19 (7.980)	1 - 19 (8.058)
						Loss given default	0 - 1 (.397)	0 - 1 (.411)
Other(d)	44		5		Discounted cash flows	Loan closing rates	29.12 - 99.69 % (76.23%)	37.71 - 99.69% (79.33%)
Nonrecurring
Collateral-dependent loans	89		76		Fair value of collateral	Discount rate	0 - 95.00% (26.00%)	0 - 60.00% (10.00%)
Accrued income and other assets:
OREO and other Level 3 assets (e)	2		5		Appraised value	Appraised value	N/M	N/M

(a)Principal investments, direct is excluded from this table as the balance at September 30, 2020, and December 31, 2019, is insignificant (less than $1 million).

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

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

(d)Amounts represent interest rate lock commitments.

(e)Excludes $101 million and $46 million pertaining to mortgage servicing assets at September 30, 2020, and December 31, 2019, respectively. Refer to Note 8 (“Mortgage Servicing Assets”) for significant unobservable inputs pertaining to these assets.

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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, 2020, and December 31, 2019, are shown in the following tables. Assets and liabilities are further arranged by measurement category.

	September 30, 2020
			Fair Value
in millions	Carrying Amount		Level 1		Level 2		Level 3		Measured at NAV		Netting Adjustment			Total
ASSETS (by measurement category)
Fair value - net income
Trading account assets (b)	733		$	1	705		$	27	—		—			733
Other investments (b)	620		—		—		552		$	68	—			620
Loans, net of unearned income (residential) (d)	8		—		—		8		—		—			8
Loans held for sale (residential) (b)	288		—		287		1		—		—			288
Derivative assets - trading (b)	1,841		56		2,182		127		—		$	(524)	(f)	1,841
Fair value - OCI
Securities available for sale (b)	26,895		—		26,883		$	12	—		—			26,895
Derivative assets - hedging (b)(g)	105		—		71		—		—		34		(f)	105
Amortized cost
Held-to-maturity securities (c)	8,384		—		8,842		—		—		—			8,842
Loans, net of unearned income (d)	101,343		—		—		99,826		—		—			99,826
Loans held for sale (b)	1,436		—		—		1,436		—		—			1,436
Other
Short-term investments - U.S. Treasury Bills (b)	$	1,000	—		$	1,000	—		—		—			$	1,000
Cash and other short-term investments (a)	14,104		14,104		—		—		—		—			14,104
LIABILITIES (by measurement category)
Fair value - net income
Derivative liabilities - trading (b)	$	166	$	51	$	775	15		—		$	(675)	(f)	$	166
Fair value - OCI
Derivative liabilities - hedging (b)(g)	2		—		6		—		—		(4)		(f)	2
Amortized cost
Time deposits (e)	6,795		—		6,826		—		—		—			6,826
Short-term borrowings (a)	1,031		289		742		—		—		—			1,031
Long-term debt (e)	12,685		12,852		733		—		—		—			13,585
Other
Deposits with no stated maturity (a)	129,951		—		129,951		—		—		—			129,951

	December 31, 2019
			Fair Value
in millions	Carrying Amount		Level 1		Level 2		Level 3		Measured at NAV		Netting Adjustment			Total
ASSETS (by measurement category)
Fair value - net income
Trading account assets (b)	$	1,040	—		$	1,040	—		—		—			$	1,040
Other investments (b)	605		—		—		$	528	$	77	—			605
Loans, net of unearned income (residential) (d)	4		—		—		4		—		—			4
Loans held for sale (residential) (b)	140		—		140		—		—		—			140
Derivative assets - trading (b)	715		$	49	985		28		—		$	(347)	(f)	715
Fair value - OCI
Securities available for sale (b)	21,843		—		21,832		11		—		—			21,843
Derivative assets - hedging (b)(g)	65		—		191		—		—		(126)		(f)	65
Amortized cost
Held-to-maturity securities (c)	10,067		—		10,116		—		—		—			10,116
Loans, net of unearned income (d)	93,742		—		—		92,641		—		—			92,641
Loans held for sale (b)	1,194		—		—		1,194		—		—			1,194
Other
Short-term investments - U.S. Treasury Bills (b)	—		—		—		—		—		—			—
Cash and other short-term investments (a)	2,004		2,004		—		—		—		—			2,004
LIABILITIES (by measurement category)
Fair value - net income
Derivative liabilities - trading (b)	$	194	$	43	$	461	9		—		$	(319)	(f)	$	194
Fair value - OCI
Derivative liabilities - hedging (b)(g)	4		—		20		—		—		(16)		(f)	4
Amortized cost
Time deposits (e)	11,652		—		11,752		—		—		—			11,752
Short-term borrowings (a)	1,092		19		1,073		—		—		—			1,092
Long-term debt (e)	12,448		12,694		249		—		—		—			12,943
Other
Deposits with no stated maturity (a)	100,218		—		100,218		—		—		—			100,218

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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 105 of our 2019 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 $701 million ($593 million at fair value) at September 30, 2020, and $855 million ($729 million at fair value) at December 31, 2019;

•Portfolio loans at fair value of $2 million at September 30, 2020, and $2 million at December 31, 2019.

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, 2020								December 31, 2019
in millions	Amortized Cost (a)		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
SECURITIES AVAILABLE FOR SALE
U.S. Treasury, agencies, and corporations	$	4,463	$	1	—		$	4,464	$	334	—		—		$	334
States and political subdivisions	3		—		—		3		4		—		—		4
Agency residential collateralized mortgage obligations	13,403		336		$	7	13,732		12,772		$	82	$	71	12,783
Agency residential mortgage-backed securities	1,256		71		1		1,326		1,677		41		4		1,714
Agency commercial mortgage-backed securities	6,921		442		5		7,358		6,898		139		40		6,997
Other securities	8		4		—		12		7		4		—		11
Total securities available for sale	$	26,054	$	854	$	13	$	26,895	$	21,692	$	266	$	115	$	21,843
HELD-TO-MATURITY SECURITIES
Agency residential collateralized mortgage obligations	$	4,308	$	141	—		$	4,449	$	5,692	$	23	$	49	$	5,666
Agency residential mortgage-backed securities	313		11		—		324		409		6		—		415
Agency commercial mortgage-backed securities	3,726		306		—		4,032		3,940		78		9		4,009
Asset-backed securities	22		—		—		22		11		—		—		11
Other securities	15		—		—		15		15		—		—		15
Total held-to-maturity securities	$	8,384	$	458	—		$	8,842	$	10,067	$	107	$	58	$	10,116

(a)Amortized cost amounts exclude accrued interest receivable which is recorded within “other assets” on the balance sheet. At September 30, 2020, accrued interest receivable on available for sale securities and held-to-maturity securities totaled $39 million and $17 million, respectively.

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The following table summarizes available for sale securities in an unrealized loss position for which an allowance for credit losses has not been recorded as of September 30, 2020, and December 31, 2019.

	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, 2020
Securities available for sale:
Agency residential collateralized mortgage obligations	$	1,453	7			—		—			$	1,453	$	7
Agency residential mortgage-backed securities	7		1			$	5	—		(a)	12		1
Agency commercial mortgage-backed securities	764		5			—		—			764		5
Held-to-maturity securities:
Agency residential collateralized mortgage obligations	—		—			29		—		(a)	29		—
Asset-backed securities	1		—		(a)	—		—			1		—
Other securities	8		—		(a)	—		—			8		—
Total securities in an unrealized loss position	$	2,233	13			$	34	—			$	2,267	$	13
December 31, 2019
Securities available for sale:
U.S. Treasury, agencies, and corporations	$	30	—		(b)	$	30	—		(b)	$	60	—
Agency residential collateralized mortgage obligations	3,432		$	20		3,221		$	51		6,653		$	71
Agency residential mortgage-backed securities	33		—		(b)	629		4			662		4
Agency commercial mortgage-backed securities	1,541		17			1,213		23			2,754		40
Held-to-maturity securities:
Agency residential collateralized mortgage obligations	1,626		14			2,289		35			3,915		49
Agency residential mortgage-backed securities	56		—		(b)	—		—			56		—
Agency commercial mortgage-backed securities	518		9			—		—			518		9
Asset-backed securities	11		—		(b)	—		—			11		—
Other securities	3		—		(b)	—		—			3		—
Total securities in an unrealized loss position	$	7,250	$	60		$	7,382	$	113		$	14,632	$	173

(a)At September 30, 2020, gross unrealized losses totaled less than $1 million for asset-backed securities and other securities held-to-maturity with a loss duration of less than 12 months. At September 30, 2020, gross unrealized losses totaled less than $1 million for agency residential mortgage-backed securities available for sale with a loss duration greater than 12 months or longer. At September 30, 2020, gross unrealized losses totaled less than $1 million for agency residential collateralized mortgage obligations held-to-maturity with a loss duration greater than 12 months or longer.

(b)At December 31, 2019, gross unrealized losses totaled less than $1 million for U.S. Treasury, agencies, and corporations and agency residential mortgage-backed securities available for sale with a loss duration of less than 12 months. At December 31, 2019, gross unrealized losses totaled less than $1 million for U.S. Treasury, Agencies, and Corporations securities available for sale with a loss duration greater than 12 months or longer. At December 31, 2019, gross unrealized losses totaled less than $1 million for agency residential mortgage-backed securities, asset-backed securities, and other securities held-to-maturity with a loss duration of less than 12 months.

Based on our evaluation at September 30, 2020, under the new impairment model, an allowance for credit losses has not been recorded nor have unrealized losses been recognized into income. The issuers of the securities are of high credit quality and have a long history of no credit losses, management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely attributed to changes in interest rates and other market conditions. The issuers continue to make timely principal and interest payments.

At September 30, 2020, securities available for sale and held-to-maturity securities totaling $12.5 billion were pledged to secure securities sold under repurchase agreements, to secure public and trust deposits, to facilitate access to secured funding, and for other purposes required or permitted by law.

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

September 30, 2020	Securities Available for Sale				Held to Maturity Securities
in millions	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	5,125	$	5,134	$	102	$	104
Due after one through five years	14,883		15,439		5,649		5,880
Due after five through ten years	5,608		5,887		2,620		2,845
Due after ten years	438		435		13		13
Total	$	26,054	$	26,895	$	8,384	$	8,842

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7. Derivatives and Hedging Activities

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

At September 30, 2020, after taking into account the effects of bilateral collateral and master netting agreements, we had $105 million of derivative assets and $2 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 $1.8 billion and derivative liabilities of $166 million that were not designated as hedging instruments. These positions are primarily comprised of derivative contracts entered into for client accommodation purposes.

Additional information regarding our accounting policies for derivatives is provided in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Derivatives and Hedging” beginning on page 105 of our 2019 Form 10-K. Our derivative strategies and related risk management objectives are described in Note 8 (“Derivatives and Hedging Activities”) beginning on page 134 of our 2019 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, 2020, and December 31, 2019. 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, 2020						December 31, 2019
			Fair Value						Fair Value
in millions	Notional Amount		Derivative Assets		Derivative Liabilities		Notional Amount		Derivative Assets		Derivative Liabilities
Derivatives designated as hedging instruments:
Interest rate	$	34,220	$	71	$	6	$	39,208	$	191	$	20
Derivatives not designated as hedging instruments:
Interest rate	75,507		1,756		300		71,209		772		233
Foreign exchange	5,879		74		68		6,572		67		60
Commodity	7,738		462		445		5,324		208		200
Credit	487		3		15		427		1		10
Other (a)	5,572		70		13		3,337		14		10
Total	95,183		2,365		841		86,869		1,062		513
Netting adjustments (b)	—		(490)		(679)		—		(473)		(335)
Net derivatives in the balance sheet	129,403		1,946		168		126,077		780		198
Other collateral (c)	—		(3)		(1)		—		(2)		(42)
Net derivative amounts	$	129,403	$	1,943	$	167	$	126,077	$	778	$	156

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

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

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

Fair value hedges. During the nine-month period ended September 30, 2020, 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, 2020, and December 31, 2019, related to cumulative basis adjustments for fair value hedges.

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	September 30, 2020
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	$	8,255	$	492
	December 31, 2019
	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	$	8,408	$	240

(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 $8 million and $9 million at September 30, 2020, and December 31, 2019, respectively,

Cash flow hedges. During the nine-month period ended September 30, 2020, 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, 2020, we expect to reclassify an estimated $253 million of after-tax net gains on derivative instruments designated as cash flow hedges from AOCI to income during the next 12 months. In addition, we expect to reclassify approximately $74 million of net gains related to terminated cash flow hedges from AOCI to income during the next 12 months. As of September 30, 2020, the maximum length of time over which we hedge forecasted transactions is 9 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, 2020, and September 30, 2019.

	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, 2020
Total amounts presented in the consolidated statement of income	$	(64)	$	927	$	(54)	$	28
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	47		—		—		—
Recognized on derivatives designated as hedging instruments	(7)		—		—		—
Net income (expense) recognized on fair value hedges	$	40	—		—		—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	(1)	$	100	—		—
Net income (expense) recognized on cash flow hedges	$	(1)	$	100	—		—
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)	—		—

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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
Nine months ended September 30, 2020
Total amounts presented in the consolidated statement of income	$	(225)	$	2,933	$	(319)	$	(27)
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	(252)		—		—		—
Recognized on derivatives designated as hedging instruments	343		—		—		—
Net income (expense) recognized on fair value hedges	$	91	—		—		—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	(3)	$	224	—		—
Net income (expense) recognized on cash flow hedges	$	(3)	$	224	—		—
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)	—		—

Net investment hedges. We previously entered into foreign currency forward contracts to hedge our exposure to changes in the carrying value of our investments in foreign subsidiaries as a result of changes in the related foreign exchange rates. In December 2019, our last remaining net investment hedge was discontinued in connection with the substantial liquidation of the net assets of KEF’s Canadian subsidiary. Additional information regarding the discontinuance of this net investment hedge is provided in Note 8 (“Derivatives and Hedging Activities”) on page 137 of our 2019 Form 10-K.

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, 2020, and September 30, 2019, 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, 2020
Cash Flow Hedges
Interest rate	$	5	Interest income — Loans	$	100
Interest rate	—		Interest expense — Long-term debt	(1)
Interest rate	10		Investment banking and debt placement fees	—
Total	$	15		$	99
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)

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in millions	Net Gains (Losses) Recognized in OCI		Income Statement Location of Net Gains (Losses) Reclassified From OCI Into Income	Net Gains (Losses) Reclassified From OCI Into Income(a)
Nine months ended September 30, 2020
Cash Flow Hedges
Interest rate	$	629	Interest income — Loans	$	224
Interest rate	(6)		Interest expense — Long-term debt	(3)
Interest rate	(10)		Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	—		Other Income	—
Total	$	613		$	221
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)

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, 2020, and September 30, 2019, and where they are recorded on the income statement.

	Three months ended September 30, 2020							Three months ended September 30, 2019
in millions	Corporate services income		Consumer mortgage income	Other income		Total		Corporate services income		Consumer mortgage income	Other income		Total
NET GAINS (LOSSES)
Interest rate	$	5	—	$	(1)	$	4	$	16	—	(1)		$	15
Foreign exchange	9		—	—		9		11		—	—		11
Commodity	5		—	—		5		2		—	—		2
Credit	4		—	(8)		(4)		(5)		—	$	(8)	(13)
Other	—		28	(8)		20		—		5	(3)		2
Total net gains (losses)	$	23	28	$	(17)	$	34	$	24	5	$	(12)	$	17

	Nine months ended September 30, 2020								Nine months ended September 30, 2019
in millions	Corporate services income		Consumer mortgage income		Other income		Total		Corporate services income		Consumer mortgage income		Other income		Total
NET GAINS (LOSSES)
Interest rate	$	23	$	—	$	(10)	$	13	$	31	—		$	(3)	$	28
Foreign exchange	29		—		—		29		32		—		—		32
Commodity	13		—		—		13		5		—		—		5
Credit	(6)		—		(20)		(26)		(4)		—		(23)		(27)
Other	—		36		17		53		—		$	5	—		5
Total net gains (losses)	$	59	$	36	$	(13)	$	82	$	64	$	5	$	(26)	$	43

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 $44 million was netted against derivative assets on the balance sheet at September 30, 2020, compared to $207 million of cash collateral netted against derivative assets at December 31, 2019. The cash collateral netted against derivative liabilities totaled $234 million at September 30, 2020, and $69 million at December 31, 2019. 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 138 of our 2019 Form 10-K under the heading “Counterparty Credit Risk.”

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

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in millions	September 30, 2020		December 31, 2019
Interest rate	$	1,680	$	848
Foreign exchange	28		30
Commodity	212		95
Credit	—		—
Other	70		14
Derivative assets before collateral	1,990		987
Less: Related collateral	44		207
Total derivative assets	$	1,946	$	780

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. These types of

transactions are primarily high dollar volume. We enter into bilateral collateral and master netting agreements with

these counterparties. We clear certain types of derivative transactions with these counterparties, whereby central

clearing organizations become the counterparties to our derivative contracts. In addition, we enter into derivative

contracts through swap execution facilities. Swap clearing and swap execution facilities reduce our exposure to

counterparty credit risk. At September 30, 2020, we had gross exposure of $411 million to broker-dealers and banks. We had net exposure of $260 million after the application of master netting agreements and cash collateral, where such qualifying agreements exist. We had net exposure of $257 million after considering $3 million of additional collateral held in the form of securities.

We enter into transactions using master netting agreements with clients to accommodate their business needs. In

most cases, we mitigate our credit exposure by cross-collateralizing these transactions to the underlying loan collateral. For transactions that are not clearable, we mitigate our market risk by buying and selling U.S. Treasuries and Eurodollar futures or entering into offsetting positions. Due to the cross-collateralization to the underlying loan, we typically do not exchange cash or marketable securities collateral in connection with these transactions. To address the risk of default associated with these contracts, we have established a CVA reserve (included in

“accrued income and other assets”) in the amount of $72 million at September 30, 2020. The CVA is calculated from

potential future exposures, expected recovery rates, and market-implied probabilities of default. At September 30, 2020, we had gross exposure of $1.9 billion 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 $1.7 billion 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 $12 million as of September 30, 2020, and $9 million as of December 31, 2019. Our credit derivative portfolio consists of 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 139 of our 2019 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, 2020, and December 31, 2019. The notional amount represents the amount that the seller could

be required to pay. The payment/performance risk shown in the table represents a weighted average of the default

probabilities for all reference entities in the respective portfolios. These default probabilities are implied from

observed credit indices in the credit default swap market, which are mapped to reference entities based on Key’s

internal risk rating.

	September 30, 2020					December 31, 2019
dollars in millions	Notional Amount		Average Term (Years)	Payment / Performance Risk		Notional Amount		Average Term (Years)	Payment / Performance Risk
Other	$	287	13.48	17.15	%	$	134	14.30	14.56	%
Total credit derivatives sold	$	287	—	—		$	134	—	—

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Credit Risk Contingent Features

We have entered into certain derivative contracts that require us to post collateral to the counterparties when these contracts are in a net liability position. The amount of collateral to be posted is based on the amount of the net liability and thresholds generally related to our long-term senior unsecured credit ratings with Moody’s and S&P. Collateral requirements also are based on minimum transfer amounts, which are specific to each Credit Support Annex (a component of the ISDA Master Agreement) that we have signed with the counterparties. In a limited number of instances, counterparties have the right to terminate their ISDA Master Agreements with us if our ratings fall below a certain level, usually investment-grade level (i.e., “Baa3” for Moody’s and “BBB-” for S&P). At September 30, 2020, 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, 2020, 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 $177 million, which was comprised of $108 million in derivative assets and $285 million in derivative liabilities. We had $175 million in cash and securities collateral posted to cover those positions as of September 30, 2020. There were no derivative contracts with credit risk contingent features held by KeyCorp at September 30, 2020.

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, 2020, and December 31, 2019. 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, 2020, and December 31, 2019, 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, 2020, and December 31, 2019. 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, 2020				December 31, 2019
in millions	Moody’s		S&P		Moody’s		S&P
KeyBank’s long-term senior unsecured credit ratings	A3		A-		A3		A-
One rating downgrade	$	1	$	1	$	1	$	1
Two rating downgrades	1		1		1		1
Three rating downgrades	1		1		1		1

KeyBank’s long-term senior unsecured credit rating was four ratings above noninvestment grade at Moody’s and S&P as of September 30, 2020, and December 31, 2019. If KeyBank’s ratings had been downgraded below investment grade as of September 30, 2020, or December 31, 2019, payments of $3 million and $3 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, 2020, or December 31, 2019, 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 2019 Form 10-K.

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Commercial

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

	Three months ended September 30,				Nine months ended September 30,
in millions	2020		2019		2020		2019
Balance at beginning of period	$	565	$	509	$	539	$	502
Servicing retained from loan sales	30		30		107		71
Purchases	6		10		24		33
Amortization	(29)		(29)		(88)		(86)
Temporary impairments	(6)		(2)		(16)		(2)
Balance at end of period	$	566	$	518	$	566	$	518
Fair value at end of period	$	685	$	681	$	685	$	681

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, 2020, and September 30, 2019, along with the valuation techniques, are shown in the following table: 

dollars in millions		September 30, 2020	September 30, 2019
Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Discounted cash flow	Expected defaults	1.00 - 2.00% (1.17%)	1.00 - 2.00% (1.13%)
	Residual cash flows discount rate	7.72 - 10.66% (9.30%)	7.00 - 11.50% (9.30%)
	Escrow earn rate	0.92 - 1.16% (1.05%)	1.46 - 2.36% (2.02%)
	Loan assumption rate	0.00 - 1.78% (1.39%)	0.01 - 3.37% (1.38%)

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 $154 million for the nine-month period ended September 30, 2020, and $147 million for the nine-month period ended September 30, 2019. This fee income was offset by $88 million of amortization for the nine-month period ended September 30, 2020, and $86 million for the nine-month period ended September 30, 2019. Both the contractual fee income and the amortization are recorded, net, in “commercial 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	2020		2019		2020		2019
Balance at beginning of period	$	46	$	39	$	46	$	37
Servicing retained from loan sales	12		5		25		9
Purchases	—		—		—		—
Amortization	(4)		(3)		(9)		(5)
Temporary (impairments) recoveries	(1)		—		(9)		—
Balance at end of period	$	53	$	41	$	53	$	41
Fair value at end of period	$	54	$	43	$	54	$	43

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The fair value of mortgage servicing assets is determined by calculating the present value of future cash flows associated with servicing the loans. This calculation uses a number of assumptions that are based on current market conditions. The range and weighted-average of the significant unobservable inputs used to fair value our mortgage servicing assets at September 30, 2020, and September 30, 2019, along with the valuation techniques, are shown in the following table:

		September 30, 2020	September 30, 2019
Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Discounted cash flow	Prepayment speed	12.35% - 53.36% (16.89%)	12.06 - 62.96% (14.53%)
	Discount rate	7.51-8.80% (7.57%)	7.50 - 10.00% (7.53%)
	Servicing cost	$62.00 - $5,125 ($81.67)	$62 - $4,375 ($67.67)

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, 2020, 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 $24 million for the nine-month period ended September 30, 2020, and $15 million for the nine-month period ended September 30, 2019. This fee income was offset by $9 million of amortization for the nine-month period ended September 30, 2020, and $5 million for the nine-month period ended September 30, 2019. Both the contractual fee income and the amortization are recorded, net, in “consumer mortgage income” 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. For more information on our leasing activity, see Note 10 (“Leases”) beginning on page 143 of our 2019 Form 10-K.

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 income statement. 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:

	Three months ended September 30,				Nine months ended September 30,
in millions	2020		2019		2020		2019
Sales-type and direct financing leases
Interest income on lease receivable	$	36	$	31	$	91	$	92
Interest income related to accretion of unguaranteed residual asset	(7)		3		(1)		9
Interest income on deferred fees and costs	—		—		—		—
Total sales-type and direct financing lease income	29		34		90		101
Operating leases
Operating lease income related to lease payments	34		34		103		100
Other operating leasing gains	4		8		25		23
Total operating lease income and other leasing gains	38		42		128		123
Total lease income	$	67	$	76	$	218	$	224

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In April 2020, the FASB provided elections under which entities can choose to account for eligible rent concessions either by applying the modification accounting in ASC 842 or by applying an expedient to account for them outside of the modification framework, thus, forgoing the performance of an assessment to determine whether contractual provisions in existing lease arrangements provide enforceable rights and obligations. Modification accounting may require remeasurement and reallocation of contract consideration. To be eligible for the expedient, rent concessions must relate to the COVID-19 pandemic and meet certain criteria. As a result of the pandemic, Key has begun providing lessees with 90 day deferrals on its equipment leases and has elected not to apply modification accounting. Rent concessions were not material at September 30, 2020.

10. Goodwill

Our annual goodwill impairment testing is performed as of October 1 each year, or more frequently as events occur or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying amount. Additional information pertaining to our accounting policy for goodwill and other intangible assets is summarized in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Goodwill and Other Intangible Assets” beginning on page 145 of our 2019 Form 10-K.

Due to continued deterioration in the market and length of disruption resulting from the COVID-19 pandemic, which impacted Key’s market capitalization, we determined a triggering event occurred in the three months ended September 30, 2020. We conducted a quantitative interim impairment test as of September 30, 2020, and concluded goodwill was not impaired.

Through the quantitative interim impairment test as of September 30, 2020, we determined that the estimated fair value of each of Key’s reporting units was greater than its carrying amount. The estimated fair value of the Consumer Bank reporting unit was 11% greater than its carrying amount, the estimated fair value of the Commercial Bank reporting unit was 17% greater than its carrying amount, and the estimated fair value of the Institutional Bank reporting unit, which is aggregated in the Commercial Bank reporting segment, was 11% greater than its carrying amount. The fair values of each reporting unit were estimated using a combination of income and market approaches. The income approach, which was weighted at 75%, utilized discounted cash flow projections for each reporting unit. The market approach, which was weighted at 25%, consisted primarily of public company metrics but also considered recent transactions in the financial services industry. The carrying amounts of Key’s reporting units represent the average equity based on risk-weighted regulatory capital for goodwill impairment testing and management reporting purposes.

We will continue to monitor and review for impairment indicators that could impact goodwill.

11. 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 13 (“Variable Interest Entities “) beginning on page 146 of our 2019 Form 10-K.

LIHTC investments. We had $1.4 billion and $1.5 billion of investments in LIHTC operating partnerships at September 30, 2020, and December 31, 2019, 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, 2020, and December 31, 2019, we had liabilities of $477 million and $546 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, 2020, and December 31, 2019. 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 13 (“Variable Interest Entities”) beginning on page 146 of our 2019 Form 10-K.

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	Unconsolidated VIEs
in millions	Total Assets		Total Liabilities		Maximum Exposure to Loss
September 30, 2020
LIHTC investments	$	6,693	$	2,547	$	1,820
December 31, 2019
LIHTC investments	$	6,405	$	2,526	$	1,846

We amortize our LIHTC investments over the period that we expect to receive the tax benefits. During the first nine months of 2020, we recognized $146 million of amortization and $134 million of tax credits associated with these investments within “income taxes” on our income statement. 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.

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 $60 million and $68 million at September 30, 2020, and December 31, 2019, 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, 2020, and December 31, 2019.

	Unconsolidated VIEs
in millions	Total Assets		Total Liabilities		Maximum Exposure to Loss
September 30, 2020
Indirect investments	$	11,225	$	173	$	78
December 31, 2019
Indirect investments	$	12,954	$	205	$	89

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, 2020, and December 31, 2019, that can be used to settle the entities’ obligations. The entities had no liabilities at September 30, 2020, and December 31, 2019, 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 13 (“Variable Interest Entities “) beginning on page 146 of our 2019 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 $335 million at September 30, 2020, and $282 million at December 31, 2019. 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 $1 million and $1 million associated with these unconsolidated VIEs at September 30, 2020, and December 31, 2019, respectively. Additional information pertaining to our other unconsolidated VIEs is included in Note 13 (“Variable Interest Entities“) under the heading “Other unconsolidated VIEs” on page 148 of our 2019 Form 10-K.

12. 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 12.5% for the third quarter of 2020 and 14.5% for the third quarter of 2019. 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

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assets such as corporate-owned life insurance and credits associated with renewable energy and low-income housing investments.

Deferred Taxes

At September 30, 2020, we had a net deferred tax liability of $110 million, compared to a net deferred tax liability of $89 million at December 31, 2019, 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 no valuation allowance at September 30, 2020, and December 31, 2019.

Unrecognized Tax Benefits

At September 30, 2020, Key’s unrecognized tax benefits were $58 million. 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.”

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.

13. Acquisition and Discontinued Operations

Acquisition

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. As a result of the acquisition, we recognized identifiable intangible assets with a fair value of $37 million and goodwill of $148 million. The valuation of the acquired assets and liabilities of Laurel Road was final at June 30, 2020.

Discontinued operations

Discontinued operations primarily includes our government-guaranteed and private education lending business. At September 30, 2020, and December 31, 2019, approximately $743 million and $865 million, respectively, of education loans are included in discontinued assets on the consolidated balance sheets. Net interest income after provision for credit losses for this business is not material and is included in income (loss) from discontinued operations, net of taxes on the consolidated statements of income.

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14. 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 151 of our 2019 Form 10-K.

The following table summarizes our securities financing agreements at September 30, 2020, and December 31, 2019:

	September 30, 2020							December 31, 2019
in millions	Gross Amount Presented in Balance Sheet		Netting Adjustments (a)		Collateral (b)		Net Amounts	Gross Amount Presented in Balance Sheet		Netting Adjustments (a)		Collateral (b)		Net Amounts
Offsetting of financial assets:
Reverse repurchase agreements	$	7	$	(7)	—		—	$	5	$	(5)	—		—
Total	$	7	$	(7)	—		—	$	5	$	(5)	—		—
Offsetting of financial liabilities:
Repurchase agreements (c)	$	213	$	(20)	$	(193)	—	$	187	$	(7)	$	(180)	—
Total	$	213	$	(20)	$	(193)	—	$	187	$	(7)	$	(180)	—

(a)Netting adjustments take into account the impact of master netting agreements that allow us to settle with a single counterparty on a net basis.

(b)These adjustments take into account the impact of bilateral collateral agreements that allow us to offset the net positions with the related collateral. The application of collateral cannot reduce the net position below zero. Therefore, excess collateral, if any, is not reflected above.

(c)Repurchase agreements are collateralized by mortgaged-backed agency securities and are contracted on an overnight or continuous basis.

As of September 30, 2020, the carrying amount of assets pledged as collateral against repurchase agreements totaled $396 million. Assets pledged as collateral are reported in “securities available for sale” and “held-to-maturity securities” on our balance sheet. At September 30, 2020, the liabilities associated with collateral pledged were solely comprised of customer sweep financing activity and had a carrying value of $193 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.

15. 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 18 (“Employee Benefits”) beginning on page 155 of our 2019 Form 10-K.

	Three months ended September 30,				Nine months ended September 30,
in millions	2020		2019		2020		2019
Interest cost on PBO	$	9	$	11	$	26	$	34
Expected return on plan assets	(10)		(12)		(29)		(36)
Amortization of losses	5		4		13		11
Settlement loss	—		—		8		—
Net pension cost	$	4	$	3	$	18	$	9

16. 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

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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, 2020
KeyCorp Capital I	$	156	$	6	$	162	1.036	%	2028
KeyCorp Capital II	112		4		116		6.875		2029
KeyCorp Capital III	148		4		152		7.750		2029
HNC Statutory Trust III	19		1		20		1.656		2035
Willow Grove Statutory Trust I	19		1		20		1.560		2036
HNC Statutory Trust IV	17		1		18		1.548		2037
Westbank Capital Trust II	8		—		8		2.417		2034
Westbank Capital Trust III	8		—		8		2.417		2034
Total	$	487	$	17	$	504	4.528	%	—
December 31, 2019	$	466	$	17	$	483	5.214	%	—

(a)The trust preferred securities must be redeemed when the related debentures mature, or earlier if provided in the governing indenture. Each issue of trust preferred securities carries an interest rate identical to that of the related debenture. Certain trust preferred securities include basis adjustments related to fair value hedges totaling $75 million at September 30, 2020, and $57 million at December 31, 2019. See Note 7 (“Derivatives and Hedging Activities”) for an explanation of fair value hedges.

(b)We have the right to redeem these debentures. If the debentures purchased by KeyCorp Capital I, HNC Statutory Trust III, Willow Grove Statutory Trust I, HNC Statutory Trust IV, Westbank Capital Trust II, or Westbank Capital Trust III are redeemed before they mature, the redemption price will be the principal amount, plus any accrued but unpaid interest. If the debentures purchased by KeyCorp Capital II or KeyCorp Capital III are redeemed before they mature, the redemption price will be the greater of: (i) the principal amount, plus any accrued but unpaid interest, or (ii) the sum of the present values of principal and interest payments discounted at the Treasury Rate (as defined in the applicable indenture), plus 20 basis points for KeyCorp Capital II or 25 basis points for KeyCorp Capital III, or 50 basis points in the case of redemption upon either a tax or a capital treatment event for either KeyCorp Capital II or KeyCorp Capital III, plus any accrued but unpaid interest. The principal amount of certain debentures includes basis adjustments related to fair value hedges totaling $75 million at September 30, 2020, and $57 million at December 31, 2019. See Note 7 (“Derivatives and Hedging Activities”) for an explanation of fair value hedges. The principal amount of debentures, net of discounts, is included in “long-term debt” on the balance sheet.

(c)The interest rates for the trust preferred securities issued by KeyCorp Capital II and KeyCorp Capital III are fixed. The trust preferred securities issued by KeyCorp Capital I have a floating interest rate, equal to three-month LIBOR plus 74 basis points, that reprices quarterly. The trust preferred securities issued by HNC Statutory Trust III have a floating interest rate, equal to three-month LIBOR plus 140 basis points, that reprices quarterly. The trust preferred securities issued by Willow Grove Statutory Trust I have a floating interest rate, equal to three-month LIBOR plus 131 basis points, that reprices quarterly. The trust preferred securities issued by HNC Statutory Trust IV have a floating interest rate, equal to three-month LIBOR plus 128 basis points, that reprices quarterly. The trust preferred securities issued by Westbank Capital Trust II and Westbank Capital Trust III each have a floating interest rate, equal to three-month LIBOR plus 219 basis points, that reprices quarterly.  The total interest rates are weighted-average rates.

17. 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.

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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, 2020. 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 “Contingencies and Guarantees” beginning on page 108 of our 2019 Form 10-K.

September 30, 2020	Maximum Potential Undiscounted Future Payments		Liability Recorded
in millions
Financial guarantees:
Standby letters of credit	$	3,107	$	72
Recourse agreement with FNMA	5,662		23
Residential mortgage reserve	2,280		9
Written put options (a)	3,284		63
Total	$	14,333	$	167

(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, 2020, is low. Information pertaining to the nature of each of the guarantees listed below is included in Note 22 (“Commitments, Contingent Liabilities, and Guarantees”) under the heading “Guarantees” beginning on page 165 of our 2019 Form 10-K.

Standby letters of credit. At September 30, 2020, our standby letters of credit had a remaining weighted-average life of 1.8 years, with remaining actual lives ranging from less than 1 year to as many as 14.2 years.

Recourse agreement with FNMA. At September 30, 2020, the outstanding commercial mortgage loans in this program had a weighted-average remaining term of 7.9 years, and the unpaid principal balance outstanding of loans sold by us as a participant was $18.8 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 30% of the principal balance of loans outstanding at September 30, 2020. FNMA delegates responsibility for originating, underwriting, and servicing mortgages, and we assume a limited portion of the risk of loss during the remaining term on each commercial mortgage loan that we sell to FNMA. We maintain a reserve for such potential losses in an amount that we believe approximates the fair value of our liability in addition to the expected credit loss for the guarantee as described in Note 4 (“Asset Quality“).

Residential Mortgage Banking. At September 30, 2020, the unpaid principal balance outstanding of loans sold by us in this program was $7.6 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 30% of the principal balance of loans outstanding at September 30, 2020. 

Our liability for estimated repurchase obligations on loans sold, which is included in other liabilities on our balance sheet, was $9 million at September 30, 2020. For more information on our residential mortgages, see Note 8 (“Mortgage Servicing Assets“).

Written put options. At September 30, 2020, 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”).

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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 22 (“Commitments, Contingent Liabilities, and Guarantees”) under the heading “Other Off-Balance Sheet Risk” on page 168 of our 2019 Form 10-K.

18. Accumulated Other Comprehensive Income

Our changes in AOCI for the three and nine months ended September 30, 2020, and September 30, 2019, 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, 2019	$	115	$	250	—		$	(339)	$	26
Other comprehensive income before reclassification, net of income taxes	530		467		—		(1)		996
Amounts reclassified from AOCI, net of income taxes (a)	(3)		(168)		—		16		(155)
Net current-period other comprehensive income, net of income taxes	527		299		—		15		841
Balance at September 30, 2020	$	642	$	549	—		$	(324)	$	867
Balance at June 30, 2020	$	650	$	613	—		$	(327)	$	936
Other comprehensive income before reclassification, net of income taxes	(8)		11		—		(1)		2
Amounts reclassified from AOCI, net of income taxes (a)	—		(75)		—		4		(71)
Net current-period other comprehensive income, net of income taxes	(8)		(64)		—		3		(69)
Balance at September 30, 2020	$	642	$	549	—		$	(324)	$	867
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

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

Our reclassifications out of AOCI for the three and nine months ended September 30, 2020, and September 30, 2019, are as follows:

	Three months ended September 30,				Affected Line Item in the Statement Where Net Income is Presented
in millions	2020		2019
Unrealized gains (losses) on available for sale securities
Realized gains	—		15		Other income
Realized losses	—		—		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	$	100	$	(8)	Interest income — Loans
Interest rate	(1)		(1)		Interest expense — Long-term debt
	99		(9)		Income (loss) from continuing operations before income taxes
	24		(3)		Income taxes
	$	75	(6)		Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(5)	$	(4)	Other expense
Settlement loss	—		—		Other expense
	(5)		(3)		Income (loss) from continuing operations before income taxes
	(1)		(1)		Income taxes
	$	(4)	$	(2)	Income (loss) from continuing operations

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	Nine months ended September 30,				Affected Line Item in the Statement Where Net Income is Presented
in millions	2020		2019
Unrealized gains (losses) on available for sale securities
Realized gains	$	4	15		Other income
	4		15		Income (loss) from continuing operations before income taxes
	1		4		Income taxes
	$	3	11		Income (loss) from continuing operations
Unrealized gains (losses) on derivative financial instruments
Interest rate	$	224	$	(51)	Interest income — Loans
Interest rate	(3)		(2)		Interest expense — Long-term debt
	221		(53)		Income (loss) from continuing operations before income taxes
	53		(13)		Income taxes
	$	168	(40)		Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(13)	$	(11)	Other expense
Settlement loss	(8)		—		Other expense
Amortization of unrecognized prior service credit	—		1		Other expense
	(21)		(10)		Income (loss) from continuing operations before income taxes
	(5)		(3)		Income taxes
	$	(16)	$	(7)	Income (loss) from continuing operations

19. Shareholders' Equity

Comprehensive Capital Plan

Consistent with our 2020 capital plan, the Board declared a quarterly dividend of $.185 per Common Share for the third quarter of 2020. Per our announcement on March 17, 2020, share repurchase activity has been temporarily suspended in response to the COVID-19 pandemic.

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 2020 dividends paid per depositary share
Fixed-to-Floating Rate Perpetual Noncumulative Series D	$	525	21,000	$	1	$	25,000	1/25th	$	1,000	$	12.50
Fixed-to-Floating Rate Perpetual Noncumulative Series E	500		500,000	1		1,000		1/40th	25		.382813
Fixed Rate Perpetual Noncumulative Series F	425		425,000	1		1,000		1/40th	25		.353125
Fixed Rate Perpetual Non-Cumulative Series G	450		450,000	1		1,000		1/40th	25		.351563

20. Business Segment Reporting

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. 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.

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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, 2020, and September 30, 2019.

Three months ended September 30,	Consumer Bank						Commercial Bank						Other						Total Key
dollars in millions	2020			2019			2020			2019			2020			2019			2020			2019
SUMMARY OF OPERATIONS
Net interest income (TE)	$	604		$	595		$	421		$	399		$	(19)		$	(14)		$	1,006		$	980
Noninterest income	267			238			383			381			31			31			681			650
Total revenue (TE) (a)	871			833			804			780			12			17			1,687			1,630
Provision for credit losses	(16)			48			163			32			13			120			160			200
Depreciation and amortization expense	19			25			35			35			35			38			89			98
Other noninterest expense	552			504			408			343			(12)			(6)			948			841
Income (loss) from continuing operations before income taxes (TE)	316			256			198			370			(24)			(135)			490			491
Allocated income taxes and TE adjustments	75			60			38			69			(47)			(51)			66			78
Income (loss) from continuing operations	241			196			160			301			23			(84)			424			413
Income (loss) from discontinued operations, net of taxes	—			—			—			—			4			3			4			3
Net income (loss)	241			196			160			301			27			(81)			428			416
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—			—			—			—			—
Net income (loss) attributable to Key	$	241		$	196		$	160		$	301		$	27		$	(81)		$	428		$	416
AVERAGE BALANCES (b)
Loans and leases	$	41,471		$	32,760		$	62,925		$	58,215		$	523		$	981		$	104,919		$	91,956
Total assets (a)	44,888			36,397			72,613			66,549			51,310			41,212			168,811			144,158
Deposits	83,175			72,995			51,238			36,204			531			1,080			134,944			110,279
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	23		$	40		$	104		$	35		$	—		$	122		$	127		$	197
Return on average allocated equity (b)	27.03		%	23.22		%	12.57		%	26.18		%	1.00		%	(3.62)		%	9.51		%	9.57		%
Return on average allocated equity	27.03			23.22			12.57			26.18			1.18			(3.49)			9.60			9.64
Average full-time equivalent employees (c)	8,350			8,458			2,112			2,226			6,635			6,214			17,097			16,898

(a)Substantially all revenue generated by our major business segments is derived from clients that reside in the United States. Substantially all long-lived assets, including premises and equipment, capitalized software, and goodwill held by our major business segments, are located in the United States.

(b)From continuing operations.

(c)The number of average full-time equivalent employees was not adjusted for discontinued operations.

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Nine months ended September 30,	Consumer Bank						Commercial Bank						Other							Total Key
dollars in millions	2020			2019			2020			2019			2020				2019			2020			2019
SUMMARY OF OPERATIONS
Net interest income (TE)	$	1,788		$	1,780		$	1,285		$	1,206		$	(53)			$	(32)		$	3,020		$	2,954
Noninterest income	745			683			1,007			1,035			98				90			1,850			1,808
Total revenue (TE) (a)	2,533			2,463			2,292			2,241			45				58			4,870			4,762
Provision for credit losses	291			133			696			80			14				123			1,001			336
Depreciation and amortization expense	59			71			108			100			105				112			272			283
Other noninterest expense	1,610			1,547			1,131			1,051			(32)				40			2,709			2,638
Income (loss) from continuing operations before income taxes (TE)	573			712			357			1,010			(42)				(217)			888			1,505
Allocated income taxes and TE adjustments	136			169			32			190			(34)				(96)			134			263
Income (loss) from continuing operations	437			543			325			820			(8)				(121)			754			1,242
Income (loss) from discontinued operations, net of taxes	—			—			—			—			7				6			7			6
Net income (loss)	437			543			325			820			(1)				(115)			761			1,248
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—			—				—			—			—
Net income (loss) attributable to Key	$	437		$	543		$	325		$	820		$	(1)		(d)	$	(115)		$	761		$	1,248
AVERAGE BALANCES (b)
Loans and leases	$	38,632		$	31,993		$	63,679		$	57,803		$	707			$	1,009		$	103,018		$	90,805
Total assets (a)	42,481			35,524			72,988			65,781			44,277				41,014			159,746			142,319
Deposits	78,682			72,201			45,082			35,534			691				1,427			124,455			109,162
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	106		$	114		$	201		$	88		1				124			$	308		$	326
Return on average allocated equity (b)	16.69		%	22.24		%	8.93		%	24.15		%	(.12)		%		(1.87)		%	5.74		%	10.09		%
Return on average allocated equity	16.69			22.24			8.93			24.15			(.01)				(1.78)			5.79			10.14
Average full-time equivalent employees (c)	8,198			8,682			2,092			2,285			6,468				6,250			16,758			17,217

(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.

21. 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, 2020, and September 30, 2019.

	Three months ended September 30, 2020						Three months ended September 30, 2019
dollars in millions	Consumer Bank		Commercial Bank		Total Contract Revenue		Consumer Bank		Commercial Bank		Total Contract Revenue
NONINTEREST INCOME
Trust and investment services income	$	100	$	15	$	115	$	89	$	16	$	105
Investment banking and debt placement fees	—		69		69		—		78		78
Services charges on deposit accounts	45		32		77		59		27		86
Cards and payments income	43		69		112		42		27		69
Other noninterest income	3		—		3		3		—		3
Total revenue from contracts with customers	$	191	$	185	$	376	$	193	$	148	$	341
Other noninterest income (a)					$	274					$	278
Noninterest income from Other(b)					31						31
Total noninterest income					$	681					$	650

(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 20 (“Business Segment Reporting”) for more information.

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	Nine months ended September 30, 2020						Nine months ended September 30, 2019
dollars in millions	Consumer Bank		Commercial Bank		Total Contract Revenue		Consumer Bank		Commercial Bank		Total Contract Revenue
NONINTEREST INCOME
Trust and investment services income	$	279	$	49	$	328	$	265	$	48	$	313
Investment banking and debt placement fees	—		176		176		—		188		188
Services charges on deposit accounts	138		91		229		169		82		251
Cards and payments income	118		147		265		123		81		204
Other noninterest income	7		—		7		10		—		10
Total revenue from contracts with customers	$	542	$	463	$	1,005	$	567	$	399	$	966
Other noninterest income (a)					$	747					$	752
Noninterest income from Other(b)					98						90
Total noninterest income					$	1,850					$	1,808

(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 20 (“Business Segment Reporting”) for more information.

We had no material contract assets or contract liabilities as of September 30, 2020, and September 30, 2019.

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

To the Shareholders and Board of Directors of KeyCorp

Results of Review of Interim Financial Statements

We have reviewed the accompanying consolidated balance sheet of KeyCorp as of September 30, 2020, the related consolidated statements of income, comprehensive income, changes in equity for the three- and nine-month periods ended September 30, 2020 and September 30, 2019, the related consolidated statements of cash flows for the nine-month periods ended September 30, 2020 and 2019, 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, 2019, and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for the year then ended, and the related notes (not presented herein); and in our report dated February 26, 2020, 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, 2019 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

November 3, 2020

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Item 3.    Quantitative and Qualitative Disclosure about Market Risk

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

Item 4.     Controls and Procedures

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

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

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

KeyCorp’s internal control over financial reporting. We implemented internal controls to ensure we adequately calculated changes due to, and properly assessed the impact of, the accounting standards updates related to our allowance for credit losses on our financial statements to facilitate its adoption on January 1, 2020. There were no significant changes to our internal control over financial reporting due to the adoption of the new standard.

PART II. OTHER INFORMATION

Item 1.     Legal Proceedings

The information presented in the Legal Proceedings section of Note 17 (“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 2019 Form 10-K; Part I, Item 1A. Risk Factors, on pages 23-33 of our 2019 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. In addition, see the additional risk factors set forth in Part II, Item 1A. Risk Factors, on pages 97-99 of our First Quarter 2020 Form 10-Q for disclosure of new risk factors that have become applicable due to COVID-19 since the filing of our 2019 Form 10-K. In those risk factors in our First Quarter 2020 Form 10-Q, we disclosed that the COVID-19 global pandemic has resulted in increased operational risks. In addition to the cybercrime and fraud risks noted in that risk factor, cybercriminals have found new means of stealing personal identities and exploiting stolen identities during the pandemic. The risk factor set forth below represents an additional risk factor for Operational Risk that has become applicable since the filing of our 2019 Form 10-K.

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Our participation in the Paycheck Protection Program may subject us to increased regulatory scrutiny or litigation and could result in damage to our reputation.

We provided $8 billion in funding and were the seventh overall lender in the PPP. The PPP and many lenders that participated in the PPP have been the subject of much publicity and regular media stories. There have been lawsuits by borrowers and purported agents against lenders related to the program, and we have been the subject of litigation related to the PPP. Although such litigation has not been material to date, our participation in the program could result in increased exposure to litigation in the future. In addition, our practices and procedures related to the PPP could be scrutinized by government or regulatory agencies. Government or regulatory scrutiny or increased litigation could result in financial liability or damage to our reputation. This could also result in increased legal and compliance costs.

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.

Per our announcement on March 17, 2020, share repurchase activity has been temporarily suspended in response to the COVID-19 pandemic.

The following table summarizes our repurchases of our Common Shares for the three months ended September 30, 2020.

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	300	13.35	300	29,845,676
August 1 - 31	(362)	21.54	(362)	29,095,322
September 1 - 30	1,037	12.53	1,037	30,045,380
Total	975	9.44	975

(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, 2020, at $12.01; on August 31, 2020, at $12.32; and on September 30, 2020, at $11.93.

Item 6. Exhibits

10	KeyCorp Directors’ Deferred Share Sub-Plan (effective September 16, 2020).
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, 2020, 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, 2020, formatted in inline XBRL (contained in Exhibit 101).

* Furnished herewith.

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Information Available on Website

KeyCorp makes available free of charge on its website, www.key.com, its 2019 Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these reports as soon as reasonably practicable after KeyCorp electronically files such material with, or furnishes it to, the SEC. We also make available a summary of filings made with the SEC of statements of beneficial ownership of our equity securities filed by our directors and officers under Section 16 of the Exchange Act. The “Financials — Regulatory Disclosures and Filings” tab of the investor relations section of our website includes public disclosures concerning our prior annual and mid-year stress-testing activities under the Dodd-Frank Act. Information contained on or accessible through our website or any other website referenced in this report is not part of this report.

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SIGNATURE

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

	KEYCORP
	(Registrant)
Date: November 3, 2020	/s/ Douglas M. Schosser
	By:  Douglas M. Schosser
	Chief Accounting Officer (Principal Accounting Officer)

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EXHIBIT 10

KEYCORP DIRECTORS’ DEFERRED SHARE SUB-PLAN

(As Amended and Restated)

ARTICLE I

PURPOSE

The KeyCorp Directors’ Deferred Share Sub-Plan (“Sub-Plan”) was originally established as a sub-plan under the KeyCorp 2013 Equity Compensation Plan and as a successor to the KeyCorp Directors’ Deferred Share Plan, adopted as of December 31, 2008 (the “Prior Plan”). The purpose of the Sub-Plan is to attract, retain and compensate highly qualified individuals to serve as Directors and to align the interests of Directors with the shareholders of the Corporation further and thereby promote the long-term success and growth of the Corporation. The Sub-Plan, as previously amended and restated, is hereby amended and restated in its entirety as set forth herein, effective as of September 16, 2020.

ARTICLE II

DEFINITIONS

Capitalized terms used in the Sub-Plan but not defined herein shall have the same meanings as defined in the applicable Equity Compensation Plan. In addition to those terms and the terms defined in Article I hereof, the following terms shall have the meanings hereinafter set forth, unless a different meaning is clearly required by the context:

(a) “Account”: The meaning set forth in Section 4.3.

(b) Reserved.

(c) “Beneficiary” or “Beneficiaries”: The person or persons designated by a Director in accordance with the Sub-Plan to receive payment of the Director’s unpaid Deferred Shares and the Director’s Account in the event of the death of the Director.

(d) “Beneficiary Designation”: An agreement in substantially the form adopted and modified from time to time by the Corporation pursuant to which a Director may designate a Beneficiary or Beneficiaries.

(e) “Change of Control”: Notwithstanding any provision of the Equity Compensation Plan, a Change of Control shall be deemed to have occurred if and only if, under any rabbi trust arrangement maintained by the Corporation (the “Trust”), as such Trust may from time to time be amended or substituted, the Corporation is required to fund the Trust to secure the payment of any Deferred Shares or Account balances because a “Change of Control,” as defined in the Trust, has occurred on or after the effective date of the Sub-Plan; provided that the Change of Control transaction also constitutes the occurrence of a “change in the ownership,” a “change in the effective control” or a “change in the ownership of a substantial portion of the assets” of the Corporation within the meaning of Section 409A of the Code.

(f) “Change of Control Election”: The meaning set forth in Section 6.1.

(g) “Deferral Period”: The meaning set forth in Section 3.2(a).

(h) “Deferred Shares”: A right to receive Common Shares or the equivalent cash value thereof granted pursuant to the Equity Compensation Plan and Article III of this Sub-Plan.

(i) “Election Agreement”: The written election to defer payment of Fees and/or Deferred Shares in accordance with Section 3.2(b) or Article IV signed in writing by the Director and in the form provided by the Corporation. Election Agreements shall be irrevocable.

(j) “Equity Compensation Plan”: the KeyCorp 2013 Equity Compensation Plan, the KeyCorp 2019 Equity Compensation Plan, or any successor equity compensation plan maintained by the Corporation and approved by its shareholders, as applicable, as in effect at the time an award of Deferred Shares is granted hereunder (or at such other time as may be relevant for purposes of this Sub-Plan).

(k) “Fees”: The fees earned as Director.

(l) “Nominating and Corporate Governance Committee”: The Nominating and Corporate Governance Committee of the Board or any successor committee designated by the Board.

(m) “Participant”: Any Director who has at any time elected to defer the receipt of his or her Fees and/or Deferred Shares in accordance with the terms of the Sub-Plan.

(n) “Retainer”: The portion of a Director’s annual cash compensation that is payable on a current basis without regard to the number of Board or committee meetings attended or committee positions.

(o) “Second Director Plan”: The KeyCorp Second Director Deferred Compensation Plan, as the same may be amended from time to time.

(p) “Settlement Date”: The date on which the Deferral Period with respect to an award of Deferred Shares ends, provided that the Director has not elected to defer payment of his or her Deferred Shares pursuant to Section 3.2(b).

(q) “Year”: The calendar year.

ARTICLE III

ANNUAL DEFERRED SHARE AWARDS

3.1 Annual Awards. Each Director shall receive an annual award of Deferred Shares. The number of Deferred Shares to be awarded shall be equal to a number of Common Shares having an aggregate Fair Market Value as of the date of the award equal to 200% of the Director’s Retainer, unless a lesser number of Deferred Shares is determined by the Nominating and Corporate Governance Committee. To the extent that the application of any formula in computing the number of Deferred Shares to be granted would result in fractional shares of stock, the number of shares shall be rounded down to the nearest whole share. Unless the Nominating and Corporate Governance Committee from time to time determines another date for the annual award due to unusual circumstances or otherwise, beginning with the annual award made during 2014, such annual award shall be made on the day of the Corporation’s annual meeting of shareholders, in accordance with the Corporation’s normal equity granting policies and only to those Directors serving as of the conclusion of such annual meeting. At the time of making the annual award, the Nominating and Corporate Governance Committee shall determine, in its sole discretion, whether Deferred Shares shall be payable in the form of Common Shares (with fractional shares being rounded down to the nearest whole share), cash, or a combination of Common Shares and cash.

3.2 Deferral Period.

(a) Minimum Three-Year Deferral Period. Each grant of Deferred Shares shall be subject to a required deferral period (a “Deferral Period”) beginning on the Deferred Shares’ grant date and, for awards granted in or prior to 2020, ending on the earlier of the third anniversary of such grant date or the date of the Corporation’s annual meeting of shareholders that occurs in the third Year following the Year in which such grant date occurs and, for awards granted after 2020, ending on the third anniversary of such grant date (the “Vesting Date”); provided, however, that the Deferral Period will end (and the Deferred Shares will become fully vested) prior to the Vesting Date (i) in the event of a Change of Control pursuant to a Director’s Change of Control Election as provided in Section 6.1(a); (ii) if the Director dies; or (iii) if the Director’s service as a Director is terminated (unless the termination follows a Change of Control and the Director has elected in a Change of Control Election to receive his or her Deferred Shares pursuant to Section 6.1(c)).

(b) Directors’ Option to Defer Payment of Deferred Shares. Notwithstanding Section 3.2(a), a Director may elect, during the period specified by the Corporation in accordance with this Section 3.2(b) and Section 409A of the Code, to defer the payment of his or her Deferred Shares. Any deferral election pursuant to this Section 3.2(b) shall specify (x) the date on which the Deferred Shares shall be distributed, which shall be the first day of a calendar quarter commencing after the end of the Deferral Period, (y) whether the distribution of Deferred Shares is to be paid in its entirety or whether Deferred Shares shall be paid in installments, and (z) if in installments, the number of annual installments (not to exceed 10). Deferred Shares being deferred pursuant to this Section 3.2(b) will be paid in the form (cash or Common Shares) originally granted. Any deferral of Deferred Shares pursuant to an election under this Section 3.2(b) will become effective at the conclusion of the applicable Deferral Period.

(i) With respect to any Deferred Shares granted after 2013, any such election shall be made no later than December 31 of the Year ending immediately prior to the Year in

which the Deferred Shares are granted and shall result in the crediting of the applicable Deferred Shares to the Director’s Account maintained under Article IV of this Sub-Plan.

(ii) With respect to any Deferred Shares granted prior to 2014, any such election shall be made no later than twelve full calendar months prior to the close of the applicable Deferral Period and shall result in the transfer of the applicable Deferred Shares into the Common Shares Account maintained for the Director under the Second Director Plan or the Director’s Account maintained under Article IV of this Sub-Plan, as the case may be.

(c) Evergreen Deferral Election. Once a Director elects under Section 3.2(b) of this Sub-Plan to defer Deferred Shares into his or her Account maintained under Article IV of this Sub-Plan (or, as applicable, to transfer such Deferred Shares into the Common Shares Account maintained for the Director under the Second Director Plan), his or her deferral election will continue to be effective from Year to Year to the extent provided in this Section 3.2(c).

(i) Any election with respect to Deferred Shares granted after 2013 will continue to be effective from Year to Year with respect to Deferred Shares granted after such Year and the Deferred Shares granted in subsequent Years will also be credited to the Director’s Account maintained under Article IV of this Sub-Plan in accordance with such election, unless and until the election is revoked or modified, on a form provided by the Corporation, in accordance with this Section 3.2(c)(i). To revoke or modify an evergreen deferral election under this Section 3.2(c)(i) with respect to Deferred Shares otherwise granted in a particular Year, the Director’s revocation or modification of his or her evergreen election shall be delivered to the Corporation during the period specified by the Corporation and no later than December 31 of the Year ending immediately prior to the Year in which the Deferred Shares are granted.

(ii) Any election with respect to Deferred Shares granted prior to 2014 will continue to apply to such Deferred Shares for which the applicable three-year Deferral Period lapses after 2013, and such Deferred Shares will be transferred to the Director’s Common Shares Account maintained under the Second Director Plan in accordance with such election, unless and until the election is revoked or modified, on a form provided by the Corporation, in accordance with this Section 3.2(c)(ii). No such election shall have any effect upon Deferred Shares granted after 2013. To revoke or modify an evergreen deferral election under this Section 3.2(c)(ii) with respect to Deferred Shares otherwise granted in a particular Year, the Director’s revocation or modification of his or her evergreen election shall be delivered to the Corporation during the period specified by the Corporation and no later than twelve full calendar months prior to the date on which the applicable Deferral Period ends.

(d) No Rights During Deferral Period. During the Deferral Period, the Director shall have no right to transfer any rights under his or her Deferred Shares and shall have no other rights of ownership therein.

3.3 Dividend Equivalents. Each award of Deferred Shares will provide for dividend equivalents, such that, on the date of the Corporation’s dividend payment, each participating Director will be credited with a number of additional Deferred Shares (including fractional shares) equal to the amount of cash dividends paid by the Corporation on the number of outstanding Deferred Shares divided by the Fair Market Value of one Common Share on that date. Such dividend equivalents, which shall likewise be credited with dividend equivalents, shall be deferred until the end of the Deferral Period for the Deferred Shares with respect to which the dividend equivalents were credited and, if the Director has so elected, pursuant to Section 3.2(b), such dividend equivalents shall be credited to the Director’s Account maintained under Article IV of this Sub-Plan.

3.4 Payment of Deferred Share Awards. Except as otherwise provided pursuant to a Director’s election to defer payment of his or her Deferred Shares in accordance with Section 3.2(b), each Director’s Deferred Shares (including dividend equivalents) shall be shall be paid after the conclusion of the applicable Deferral Period in accordance with this Section 3.4.

(a) Settlement Date. A Director, or in the event of such Director’s death, his or her Beneficiary, shall be entitled to payment of such Director’s Deferred Shares following such Director’s Settlement Date.

(b) Time and Form of Distribution. As soon as practicable following the Settlement Date, but in no event later than 90 days following the Director’s Settlement Date, the

Corporation shall pay each outstanding award of Deferred Shares to the Director or, in the case of the death of the Director, his or her Beneficiary. Such distribution shall be made in a lump sum in the form determined pursuant to Section 3.1. If payment of Deferred Shares is made in the form of Common Shares, the Corporation will provide procedures to facilitate the sale of such Common Shares following distribution upon the request of the Director. If payment of Deferred Shares is made in cash, the amount distributed shall be calculated based upon the average of the Fair Market Value of one Common Share over the 30 trading days immediately prior to (and including if such date is a trading day) the Settlement Date.

(d) Fractional Shares. The Corporation will not be required to issue any fractional Common Shares pursuant to this Sub-Plan.

3.5 Shares Subject to Sub-Plan. The Common Shares which may be delivered to Directors upon payment of their Deferred Shares shall be issued or delivered under the Equity Compensation Plan. Any Common Shares delivered to Directors by a trust that is treated as a “grantor trust” within the meaning of Sections 671-679 of the Code shall be treated as delivered by the Corporation pursuant to this Sub-Plan.

3.6 Adjustments. The number of Deferred Shares granted to a Director hereunder, and the kind of shares covered thereby, are subject to adjustment upon certain corporate events as provided in the Equity Compensation Plan.

3.7 Death of a Director.Notwithstanding anything to the contrary contained in this Sub-Plan, and except in the case of Deferred Shares deferred pursuant to Section 3.2(b), in the event of the death of a Director, the three-year Deferral Period will be deemed to have ended, and the Settlement Date will be deemed to have occurred, on the date of the Director’s death. The Director’s Deferred Shares shall be paid as soon as practicable following the Settlement Date, but in no event later than 90 days following the Settlement Date, to the Beneficiary or Beneficiaries designated on the Director’s Beneficiary Designation or, if no such designation is in effect or no Beneficiary is then living, then to the Director’s estate.

ARTICLE IV

DEFERRAL OF FEES; ACCOUNTS

4.1 Election to Defer Fees. Any Director may elect to defer (i) payment of his receipt of all or a specified portion of his or her Fees for any Year in accordance with this Section 4.1 with such deferred Fees deemed invested in KeyCorp Common Shares. A Director who desires to defer the payment of all or a portion of his or her Fees for any Year must complete and deliver an Election Agreement to the Corporation during the period specified by the Corporation and no later than the last day of the Year prior to the Year in which the Fees will be earned by the Director; provided, however, that any Director hereafter elected to the Board of Directors of the Corporation or a subsidiary who was not previously a Participant in the Sub-Plan may make an election to defer the payment of Fees for the Year in which he or she is elected to the Board of Directors by delivering the Election Agreement to the Corporation within 30 days of first becoming a Director (or during such shorter period as may be specified by the Corporation), with any such Election Agreement being effective with respect to Fees earned commencing after the date that the Election Agreement becomes irrevocable.

4.2 Amount of Fees Deferred; Date of Deferral. A Participant shall designate on the Election Agreement (a) the amount of his or her Fees that are to be deferred under this Sub-Plan for any Year, (b) the date on which the deferred Fees shall be distributed, (c) whether the distribution of deferred Fees is to be paid in its entirety or whether such Fees shall be paid in installments, and (d) if in installments, the number of annual installments (not to exceed 10). Deferrals shall be until the earlier to occur of: (x) the date specified by the Participant, or (y) the date of death of the Participant, at which time payment of the amount deferred shall be made in accordance with Section 4.4 or Section 6.1. A Participant may not select more than one date in each Election Agreement upon which distribution shall be made or when installments shall begin. Distribution dates shall be the first business day of a calendar quarter.

4.3 Account. The Corporation shall maintain a bookkeeping account for each Participant to which shall be credited (a) the amount of Fees deferred by the Participant pursuant to this Article IV, (b) the Deferred Shares deferred by the Participant pursuant to Section 3.2(b) of this Sub-Plan, and (c) dividend equivalents credited in accordance with this Sub-Plan (an “Account”). All amounts credited to a Director’s Account shall be credited in the form of notional Common Shares. With respect to deferred Fees, as of the last business day of any quarter, there shall be added to each Account the number of Common Shares (whole and fractional, rounded to the nearest one-hundredth of a share) equal to the dollar amount of deferred Fees payable for such quarter plus all dividends payable during such quarter on the Common Shares credited to the Account on the first day of such quarter divided by the Fair Market Value of the Common Shares at the close of business on the last business day of such quarter.

4.4 Payment of Account; Period of Deferral. The balance of a Participant’s Account shall be paid to the Participant in a single payment and/or in a number of individual, substantially equal consecutive annual installments (not to exceed 10), as elected by the Participant in his or her Election Agreement. Distributions of deferred Fees shall be made in Common Shares, and distributions of deferred Deferred Shares shall be made as described in Section 3.2(b). The amount of the Account remaining after payment of each individual installment shall continue to be valued in accordance with Section 4.5 of this Article. Full payment or the first annual installment, as the case may be, shall be made in accordance with the terms of the Participant’s Election Agreement as soon as administratively practicable following the Participant’s designated payment date, but in any event no later than 90 days following the date (i) on which the Participant has elected to commence distribution of his or her Account, or (ii) of the Participant’s death. Any installment payment shall be made pro rata.

The election as to the time for and method of payment of the amount of the Account relating to Fees deferred for a particular Year shall be made on the Election Agreement(s) and thereafter shall not be altered except as provided in Article VI of this Sub-Plan.

In the event that a Participant elects to receive installment payments under this Section 4.4,

(a) the amount of the distribution from the Account shall be valued based on the Fair Market Value of the Common Shares on the last business day of the quarter immediately prior to the distribution date, and

(b) the amount of each installment shall be determined by dividing the value of the Account by the number of installments remaining to be paid to the Participant.

4.5 Valuation of the Account. Each Participant’s Account shall be valued as of the last day of each quarter until payment of the Participant’s Account is made in full. The Corporation shall ascertain the number of shares in the Account (whole and fractional, rounded to the nearest one-hundredth of a share) after taking into account dividend equivalents credited to the Account and deemed reinvested in Common Shares and distributions from the Account under this Article, based on the Fair Market Value of the Common Shares on the last business day of such quarter. Automatically and without further action by the Corporation, in the event of any stock dividend or split, recapitalization, merger, consolidation, spin-off, reorganization, combination, exchange of shares, or a similar corporate change, appropriate adjustments in the number and kind of shares credited to a Participant’s Account shall be made by the Corporation to reflect such change.

4.7 Statement. Each Participant shall receive a statement of his or her Account not less than annually.

4.8 Change of Control.

(a) Adjustments. Notwithstanding any other provision of the Sub-Plan to the contrary, in the event of a Change of Control, no amendment or modification of this Sub-Plan may be made at any time on or after such Change of Control (i) to reduce or modify a Participant’s Pre-Change of Control Account Balance, (ii) to reduce or modify the method of calculating all earnings, gains, and/or losses on a Participant’s Pre-Change of Control Account Balance, or (iii) to reduce or modify the Participant’s deferrals to be credited to the Participant’s Account for the applicable deferral period. For purposes of this Section 4.8, the term “Pre-Change of Control Account Balance” shall mean, with regard to any Participant, the aggregate amount of such Participant’s prior deferrals with all earnings, gains, and losses thereon which are credited to the Participant’s Account through the close of the Year in which such Change of Control occurs.

(b) Common Stock Conversion. In the event of a Change of Control in which the Common Shares of the Corporation are converted into or exchanged for securities, cash and/or other property as a result of any capital reorganization or reclassification of the capital stock of the Corporation, or as a result of the consolidation or merger of the Corporation with or into another corporation or entity, or the sale of all or substantially all of its assets to another corporation or entity, the Corporation shall cause each Participant’s Account to reflect the securities, cash and other property to be received in such reorganization, reclassification, consolidation, merger or sale on the balance in the Account and, from and after such reorganization, reclassification, consolidation, merger or sale, the Account shall reflect all dividends, interest, earnings and losses attributable to such securities, cash, and other property.

(c) Amendment in the Event of a Change of Control. On or after a Change of Control, the provisions of this Article IV may not be amended or modified as such provisions apply to the Participants’ Pre-Change of Control Account Balances.

4.10 Death of a Participant. In the event of the death of a Participant, the amount of the Participant’s Account shall be paid to the Beneficiary or Beneficiaries designated in writing signed by the Participant in the form provided by the Corporation; in the event there is more than one Beneficiary, such form shall include the proportion to be paid to each Beneficiary and indicate the disposition of such share if a Beneficiary does not survive the Participant; in the absence of any such designation, payment from the Account shall be divided equally among all other Beneficiaries. Unless a Participant elects otherwise, in the event of the Participant’s death after December 31, 2014, payment of the Participant’s Account shall be made in a single lump sum to the Participant’s Beneficiary(ies).

ARTICLE V

BENEFICIARY DESIGNATION

5.1 Beneficiary Designation. Each Director shall have the right, at any time, to designate one or more persons or an entity as Beneficiary (both primary as well as secondary) to whom benefits under this Sub-Plan shall be paid in the event of the Director’s death prior to payment of the Director’s Deferred Shares or the Director’s Account. Each Beneficiary Designation shall be in a written form prescribed by the Corporation and shall be effective only when filed with the Corporation during the Director’s lifetime.

5.2 Changing Beneficiary. Any Beneficiary Designation may be changed by the Director without the consent of the previously named Beneficiary by the Director’s filing of a new Beneficiary

Designation with the Corporation. The filing of a new Beneficiary Designation shall cancel all Beneficiary Designations previously filed by the Director.

ARTICLE VI

ACCELERATION

6.1 Change of Control. Notwithstanding anything to the contrary contained in this Sub-Plan or the Equity Compensation Plan, upon the occurrence of a Change of Control, a Director shall be entitled to receive from the Corporation the payment of his or her Deferred Shares and the balance of his or her Account in the manner selected as follows: not later than 30 calendar days after the date a person first becomes a Director, a Director shall be entitled to make an election which will be applicable in the event of a Change of Control (the “Change of Control Election”). For purposes of clarity, notwithstanding any other provision of the Sub-Plan to the contrary, a Director’s Change of Control Election in effect immediately prior to September 18, 2013 shall continue in effect on and after such date. The Change of Control Election will provide the following payment alternatives to a Director in the event of a Change of Control:

(a) upon the occurrence of a Change of Control, the entire amount of the Director’s Deferred Shares and the balance of the Director’s Account will be immediately paid in full, regardless of whether the Director continues as a Director after the Change of Control;

(b) upon and after the occurrence of a Change of Control and in accordance with Section 3.2(a), the entire amount of the Director’s Deferred Shares and the balance of the Director’s Account will be immediately paid in full if and when the Director’s service as a Director is terminated within two years after the Change of Control; or

(c) upon the occurrence of a Change of Control, the payment elections specified by the Director prior to the Change of Control shall govern irrespective of the Change of Control.

6.2 Hardship. In the event of an unforeseeable emergency, the Corporation may accelerate the payment of all or any portion of the Director’s Deferred Shares and the Director’s Account to the Director, but only up to the amount necessary to meet the emergency. For purposes of this Section 6.2, the term “unforeseeable emergency” shall mean a severe financial hardship to the Director resulting from a sudden and unexpected illness or accident of the Director, the Director’s spouse, or the Director’s dependent (as defined in Section 152 of the Code, without regard to Section 152(b)(1), (b)(2), and (d)(1)(B)), the loss of the Director’s property due to casualty, or such other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Director. The determination of an unforeseeable emergency and the ability of the Corporation to accelerate payment of the Director’s Deferred Shares and the Director’s Account shall be determined in accordance with the requirements of Section 409A of the Code and the applicable regulations issued thereunder. Payment of the Director’s Deferred Shares and the Director’s Account shall be limited only to such amount as is necessary to satisfy the emergency, which shall include all applicable taxes owed or to be owed by the Director as a result of the distribution.

6.3 Small Accounts. Notwithstanding any other provision of this Sub-Plan, the Corporation may, to the extent permitted under Section 409A of the Code, accelerate payment of a Director’s Account if, at any time, the balance of the Director’s Account (and the value of any other nonqualified deferred compensation arrangement that is aggregated with the Director’s Account under Treasury Regulation Section 1.409A-1(c)) is less than or equal tothe applicable dollar amount then in effect under Section 402(g)(1)(B) of the Code.

ARTICLE VII

ADMINISTRATION, AMENDMENT AND TERMINATION

7.1 Administration. Notwithstanding any provision of the Equity Compensation Plan, the Sub-Plan shall be administered by the Corporation. The Corporation shall have such powers as may be necessary to discharge its duties hereunder. The Corporation may, from time to time, employ, appoint or delegate to an agent or agents (who may be an officer or officers of the Corporation) and delegate to them such administrative duties as it sees fit, and may from time to time consult with legal counsel who

may be counsel to the Corporation. No agent appointed by the Corporation to perform administrative duties hereunder shall be liable for any action taken or determination made in good faith. All elections, notices and directions under the Sub-Plan by a Director shall be made on such forms as the Corporation shall prescribe.

7.2 Amendment and Termination. Notwithstanding any provision of the Equity Compensation Plan, the Nominating and Corporate Governance Committee may alter or amend this Sub-Plan from time to time or may terminate it in its entirety; provided, however, that no such action, except for an acceleration of benefits, shall, without the consent of a Director, impair the Director’s rights with respect to the amount credited to the Director’s Account or with respect to any Deferred Shares issued or to be issued to such Director under the Sub-Plan; and furtherprovided, that any amendment that must be approved by the shareholders of the Corporation in order to comply with applicable law or the rules of the principal exchange upon which the Common Shares are traded or quoted shall not be effective unless and until such approval has been obtained in compliance with such applicable law or rules. Presentation of this Sub-Plan or any amendment hereof for shareholder approval shall not be construed to limit the Corporation’s authority to offer similar or dissimilar benefits through plans or other arrangements that are not subject to shareholder approval unless otherwise limited by applicable law or stock exchange rules.

ARTICLE VIII

FINANCING OF BENEFITS

8.1 Financing of Benefits. The Deferred Shares and the balance of a Director’s Account payable under the Sub-Plan to a Director or, in the event of his or her death, to his or her Beneficiary, shall be paid by the Corporation from its general assets, including treasury shares. The right to receive payment of the Deferred Shares or an Account balance represents an unfunded, unsecured obligation of the Corporation.

8.2 Security for Benefits. Notwithstanding the provisions of Section 8.1, nothing in this Sub-Plan shall preclude the Corporation from setting aside Common Shares or funds in a so-called “grantor trust” pursuant to one or more trust agreements between a trustee and the Corporation. However, no Director or Beneficiary shall have any secured interest or claim in any assets or property of the Corporation or any such trust and all Common Shares or funds contained in such trust shall remain subject to the claims of the Corporation’s general creditors.

ARTICLE IX

GENERAL PROVISIONS

9.1 Governing Law. The provisions of this Sub-Plan shall be governed by and construed in accordance with the laws of the State of Ohio.

9.2 Shareholder Approval. Notwithstanding the foregoing provisions of the Sub-Plan, no Common Shares shall be issued or transferred pursuant to the Sub-Plan before the date of the approval of the applicable Equity Compensation Plan by the Corporation’s shareholders.

9.3 Miscellaneous. Headings are given to the sections of this Sub-Plan solely as a convenience to facilitate reference. Such headings, numbering and paragraphing shall not in any case be deemed in any way material or relevant to the construction of this Sub-Plan or any provisions thereof.

9.4 No Right to Continue as Director. Neither the Sub-Plan, nor the granting of Deferred Shares nor any other action taken pursuant to the Sub-Plan, shall constitute or be evidence of any agreement or understanding, express or implied, that a Director has a right to continue as a Director for any period of time, or at any particular rate of compensation.

9.5 Compliance with Section 409A Requirements. The Sub-Plan is intended to provide for the deferral of compensation in accordance with the provisions of Section 409A of the Code and regulations and published guidance issued pursuant thereto. Accordingly, the Sub-Plan shall be administered in a manner consistent with those provisions. Notwithstanding any provision of the Sub-Plan to the contrary, no otherwise permissible election, deferral, accrual, transfer or distribution shall be made or given effect under the Sub-Plan that would result in a violation of Section 409A of the Code.

9.6 Elections Under Prior Plan. Each Director’s Account hereunder shall remain subject to the same Change of Control elections, elections under Section 4.2(b) of the Prior Plan that are described in Sections 3.2(b)(ii) and 3.2(c)(ii) of this Sub-Plan to transfer the Deferred Shares to the Director’s Common Shares Account under the Second Director Plan, and Beneficiary Designations that were controlling under the Prior Plan immediately prior to the approval of the KeyCorp 2013 Equity Compensation Plan by the Corporation’s shareholders for the remainder of the period or periods for which such elections or designations are by their original terms applicable or, in the case of Beneficiary Designations and elections under Section 4.2(b) of the Prior Plan that are described in Sections 3.2(b)(ii) and 3.2(c)(ii) of this Sub-Plan, until such time as such designations and elections are revoked or modified or otherwise cease to be effective in accordance with this Sub-Plan.

ARTICLE X

MERGER OF FIRST NIAGARA DIRECTOR PLAN

10.1 Merger of First Niagara Plan. Effective December 31, 2016, (a) the Amended and Restated First Niagara Bank and First Niagara Financial Group, Inc. Directors Deferred Fees Plan (the “First Niagara Plan”) shall be merged into the Sub-Plan and thereby terminated, (b) all participants in the First Niagara Plan immediately prior to such time (“First Niagara Participants”) will automatically participate in the Sub-Plan, and the rights and obligations of First Niagara Participants under the First Niagara Plan shall automatically be extinguished and shall become rights and obligations under the Sub-Plan.

10.2 First Niagara Plan Accounts. The Corporation shall establish a separate sub-Account (a “First Niagara Account”) under the Sub-Plan for each First Niagara Participant, to which shall be credited (a) a number of notional Common Shares (whole and fractional, rounded to the nearest one-hundredth of a share) determined by dividing the balance of such First Niagara Participant’s accounts under the First Niagara Plan immediately prior to its merger into the Sub-Plan by the Fair Market Value of one Common Share, and (b) dividend equivalents on the notional Common Shares credited to the First Niagara Account and deemed reinvested in Common Shares. The amount properly credited to a First Niagara Participant’s First Niagara Account at any time shall be referred to as the First Niagara Participant’s “First Niagara Plan Benefits”.

10.3 Certain Terms Applicable to First Niagara Plan Benefits. Except as otherwise provided in this Article X, First Niagara Plan Benefits shall be subject to the terms and conditions of the Sub-Plan. In particular, and notwithstanding any other provision of the Sub-Plan to the contrary:

(a) All First Niagara Plan Benefits shall be payable only at the time and in the form provided pursuant to applicable payment election made under the First Niagara Plan and the terms of the First Niagara Plan, each as in effect immediately prior to the merger of the First Niagara Plan into the Sub-Plan.

(b) The provisions of Sections 3.4, 4.4 and 6.1 of the Sub-Plan shall not apply to First Niagara Benefits.

(c) Any beneficiary designation made by a First Niagara Participant under the First Niagara Plan and in effect immediately prior to the merger of the First Niagara Plan into the Sub-Plan shall continue to apply under the Sub-Plan with respect to the First Niagara Participant’s First Niagara Benefits, unless and until changed in accordance with Article V of the Sub-Plan.

EX-15

EXHIBIT 15

ACKNOWLEDGMENT OF ERNST & YOUNG LLP,

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

November 3, 2020

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. 333-239044

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. 333-167093        

Form S-8 No. 333-188703

Form S-8 No. 333-208272

Form S-8 No. 333-231689

of our review report dated November 3, 2020 relating to the unaudited consolidated interim financial statements of KeyCorp that are included in its Form 10-Q for the quarter ended September 30, 2020.

Ernst & Young

Cleveland, Ohio

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Christopher M. Gorman, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: November 3, 2020
	Christopher M. Gorman
	Chairman, Chief Executive Officer and President

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Donald R. Kimble, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: November 3, 2020
	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, 2020 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 3, 2020
	Christopher M. Gorman
	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, 2020 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 3, 2020
	Donald R. Kimble
	Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2020	Oct. 29, 2020
Entity Information [Line Items]
Document Type	10-Q
Document Period End Date	Sep. 30, 2020
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		976,472,556
Entity Central Index Key	0000091576
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Common Stock
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
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
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
Entity Information [Line Items]
Title of 12(b) Security	Cumulative Preferred Stock, Series G)
Trading Symbol	KEY PrK
Security Exchange Name	NYSE

XML

Consolidated Balance Sheets - USD ($) $ in Millions		Sep. 30, 2020	Dec. 31, 2019
ASSETS
Cash and due from banks		$ 956	$ 732
Short-term investments		14,148	1,272
Trading account assets		733	1,040
Securities available for sale		26,895	21,843
Held-to-maturity securities (fair value: $8,842 and $10,116)		8,384	10,067
Other investments		620	605
Loans, net of unearned income of $481 and $603		103,081	94,646
Less: Allowance for loan and lease losses		(1,730)	(900)
Net loans		101,351	93,746
Loans held for sale	[1]	1,724	1,334
Premises and equipment		765
Premises and equipment			814
Goodwill		2,664	2,664
Other intangible assets		203	253
Corporate-owned life insurance		4,274	4,233
Accrued income and other assets		7,084	5,494
Discontinued assets		739	891
Total assets		170,540	144,988
Deposits in domestic offices:
NOW and money market deposit accounts		80,791	66,714
Savings deposits		5,585	4,651
Certificates of deposit ($100,000 or more)		3,345	6,598
Other time deposits		3,450	5,054
Total interest-bearing deposits		93,171	83,017
Noninterest-bearing deposits		43,575	28,853
Total deposits		136,746	111,870
Federal funds purchased and securities sold under repurchase agreements		213	387
Bank notes and other short-term borrowings		818	705
Accrued expense and other liabilities		2,356	2,540
Long-term debt		12,685	12,448
Total liabilities		152,818	127,950
EQUITY
Preferred stock		1,900	1,900
Common Shares, $1 par value; authorized 2,100,000,000 and 2,100,000,000 shares; issued 1,256,702,081 and 1,256,702,081 shares		1,257	1,257
Capital surplus		6,263	6,295
Retained earnings		12,375	12,469
Treasury stock, at cost (280,497,287 and 279,513,530 shares)		(4,940)	(4,909)
Accumulated other comprehensive income (loss)		867	26
Key shareholders’ equity		17,722	17,038
Noncontrolling interests		0	0
Total equity		17,722	17,038
Total liabilities and equity		$ 170,540	$ 144,988

[1] Total loans held for sale include real estate — residential mortgage loans held for sale at fair value of $288 million at September 30, 2020, and $140 million at December 31, 2019.

XML

Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Fair Value	$ 8,842,000,000	$ 10,116,000,000
Unearned income on loans	481,000,000	603,000,000
Loans held for sale		0
Aggregate amount of certificates of deposit, denominations	$ 100,000	$ 100,000
Common shares, par value (in usd per share)	$ 1	$ 1
Common shares, shares authorized (in shares)	2,100,000,000	2,100,000,000
Common shares, shares issued (in shares)	1,256,702,081	1,256,702,081
Treasury stock, shares (in shares)	280,497,287	279,513,530
Residential Mortgage
Loans held for sale	$ 288,000,000	$ 140,000,000

XML

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
INTEREST INCOME
Loans		$ 927	$ 1,073	$ 2,933	$ 3,221
Loans held for sale		18	18	58	46
Securities available for sale		115	136	365	400
Held-to-maturity securities		53	64	171	199
Trading account assets		3	7	16	24
Short-term investments		1	16	14	49
Other investments		2	3	3	11
Total interest income		1,119	1,317	3,560	3,950
INTEREST EXPENSE
Deposits		54	227	319	652
Federal funds purchased and securities sold under repurchase agreements		0	0	6	1
Bank notes and other short-term borrowings		1	4	11	13
Long-term debt		64	114	225	354
Total interest expense		119	345	561	1,020
NET INTEREST INCOME		1,000	972	2,999	2,930
Provision for credit losses		160	200	1,001	336
Net interest income after provision for credit losses		840	772	1,998	2,594
NONINTEREST INCOME
Trust and investment services income		128	118	384	355
Investment banking and debt placement fees		146	176	418	449
Service charges on deposit accounts		77	86	229	251
Operating lease income and other leasing gains		38	42	128	123
Corporate services income		51	63	165	171
Cards and payments income		114	69	271	208
Corporate-owned life insurance income		30	32	101	97
Consumer mortgage income		51	16	133	42
Commercial mortgage servicing fees		18	21	48	58
Other income	[1]	28	27	(27)	54
Total noninterest income		681	650	1,850	1,808
NONINTEREST EXPENSE
Personnel		588	547	1,675	1,699
Net occupancy		76	72	223	217
Computer processing		59	53	170	163
Business services and professional fees		49	43	142	132
Equipment		25	27	74	75
Operating lease expense		33	33	103	91
Marketing		22	26	67	69
FDIC assessment		6	7	23	23
Intangible asset amortization		15	26	50	70
OREO expense, net		(1)	3	8	10
Other expense		165	102	446	372
Total noninterest expense		1,037	939	2,981	2,921
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		484	483	867	1,481
Income taxes		60	70	113	239
INCOME (LOSS) FROM CONTINUING OPERATIONS		424	413	754	1,242
Income (loss) from discontinued operations		4	3	7	6
NET INCOME (LOSS)		428	416	761	1,248
Less: Net income (loss) attributable to noncontrolling interests		0	0	0	0
NET INCOME (LOSS) ATTRIBUTABLE TO KEY		428	416	761	1,248
Income (loss) from continuing operations attributable to Key common shareholders		397	383	674	1,172
Net income (loss) attributable to Key common shareholders		$ 401	$ 386	$ 681	$ 1,178
Per Common Share:
Income (loss) from continuing operations attributable to Key common shareholders (in usd per share)		$ 0.41	$ 0.39	$ 0.70	$ 1.17
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]	0.41	0.39	0.70	1.18
Per Common Share — assuming dilution:
Income (loss) from continuing operations attributable to Key common shareholders (in usd per share)		0.41	0.38	0.69	1.16
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]	0.41	0.39	0.70	1.17
Cash dividends declared per common share (in usd per share)		$ 0.185	$ 0.185	$ 0.555	$ 0.525
Weighted-average common shares outstanding (000) (in shares)		967,804	988,319	967,632	998,268
Effect of common share options and other stock awards (in shares)		6,184	10,009	6,648	9,632
Weighted-average common shares and potential common shares outstanding (in shares)	[3]	973,988	998,328	974,280	1,007,900

[1] For the three months ended September 30, 2020, we had no net securities gains (losses). For the nine months ended September 30, 2020, net securities gains (losses) totaled $4 million. For the three and nine months ended September 30, 2019, net securities gains (losses) totaled less than $15 million. For the three and nine months ended September 30, 2020, and September 30, 2019, we did not have any impairment losses related to securities.

[2] EPS may not foot due to rounding.

[3] Assumes conversion of Common Share options and other stock awards and/or convertible preferred stock, as applicable.

XML

Consolidated Statements of Income (Parenthetical) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Statement [Abstract]
Net securities gains (losses)	$ 0	$ 15,000,000	$ 4,000,000	$ 15,000,000
Impairment losses related to securities	$ 0	$ 0	$ 0	$ 0

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 428	$ 416	$ 761	$ 1,248
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on securities available for sale, net of income taxes of ($3), ($29), $163 and ($176)	(8)	93	527	568
Net unrealized gains (losses) on derivative financial instruments, net of income taxes of ($19), ($21), $93, and ($120)	(64)	68	299	386
Foreign currency translation adjustments, net of income taxes of $0, $0, $0, and ($1)	0		0	4
Net pension and postretirement benefit costs, net of income taxes of $1, $0, $5, and ($6)	3	0	15	19
Total other comprehensive income (loss), net of tax	(69)	161	841	977
Comprehensive income (loss)	359	577	1,602	2,225
Less: Comprehensive income attributable to noncontrolling interests	0	0	0	0
Comprehensive income (loss) attributable to Key	$ 359	$ 577	$ 1,602	$ 2,225

XML

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Comprehensive Income [Abstract]
Income taxes effect on net unrealized (losses) gains on securities available for sale	$ (3)	$ (29)	$ 163	$ (176)
Income taxes effect on net unrealized gains (losses) on derivative financial instruments	(19)	(21)	93	(120)
Income taxes effect on foreign currency translation adjustments	0	0	0	(1)
Income taxes effect on net pension and postretirement benefit costs	$ 1	$ 0	$ 5	$ (6)

XML

Consolidated Statements of Changes in Equity - USD ($) $ in Millions	Total	Series D Preferred Stock	Series E Preferred Stock	Series F Preferred Stock	Series G Preferred Stock	Preferred Stock	Common Stock	Capital Surplus	Retained Earnings	Retained Earnings Series D Preferred Stock	Retained Earnings Series E Preferred Stock	Retained Earnings Series F Preferred Stock	Retained Earnings Series G Preferred Stock	Treasury Stock, at Cost	Accumulated Other Comprehensive Income (Loss)	Noncontrolling Interests	Cumulative Effect, Period of Adoption, Adjustment Retained Earnings	[1]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance						$ 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						$ 1,900	$ 1,257	6,287	12,209					(4,696)	159	0
Net income (loss)	$ 1,248								1,248
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 Series G Preferred Stock (in shares)						450,000
Issuance of Series G Preferred Stock						$ 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						1,396,000
Ending Balance, Common Shares (in shares) at Sep. 30, 2019							988,538,000
Ending Balance at Sep. 30, 2019						$ 1,900	$ 1,257	6,287	12,209					(4,696)	159	0
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	$ 17,038					$ 1,900	$ 1,257	6,295	12,469					(4,909)	26	0	$ (230)
Accounting Standards Update [Extensible List]	us-gaap:AccountingStandardsUpdate201613Member
Ending Balance, Preferred Shares (in shares) at Dec. 31, 2019						1,396,000
Ending Balance, Common Shares (in shares) at Dec. 31, 2019							977,189,000
Ending Balance at Dec. 31, 2019	$ 17,038					$ 1,900	$ 1,257	6,295	12,469					(4,909)	26	0	(230)
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						$ 1,900	$ 1,257	6,287	12,209					(4,696)	159	0
Net income (loss)	416								416
Other comprehensive income (loss)	161
Deferred compensation								5
Cash dividends declared on common shares									(182)						161
Cash dividends declared on preferred stock										(7)	(8)	(6)	(9)
Issuance of Series G Preferred Stock (in shares)						0
Issuance of Series G Preferred Stock						$ 0		0
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																(2)
Ending Balance, Preferred Shares (in shares) at Sep. 30, 2019						1,396,000
Ending Balance, Common Shares (in shares) at Sep. 30, 2019							988,538,000
Ending Balance at Sep. 30, 2019						$ 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	6,287	12,209					(4,696)	159	0
Beginning Balance	17,038					$ 1,900	$ 1,257	6,295	12,469					(4,909)	26	0	$ (230)
Beginning Balance, Preferred Shares (in shares) at Dec. 31, 2019						1,396,000
Beginning Balance, Common Shares (in shares) at Dec. 31, 2019							977,189,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	$ 17,722					$ 1,900	$ 1,257	6,263	12,375					(4,940)	867	0
Accounting Standards Update [Extensible List]	us-gaap:AccountingStandardsUpdate201613Member
Net income (loss)	$ 761								761
Other comprehensive income (loss)	841														841
Deferred compensation								2
Cash dividends declared on common shares									(542)
Cash dividends declared on preferred stock										(20)	(23)	(18)	(19)
Open market common share repurchases (in shares)							(6,067,000)
Open market Common Share repurchases														(117)
Employee equity compensation program Common Share repurchases (in shares)							(1,815,000)
Employee equity compensation program Common Share repurchases								(34)						(36)
Common shares reissued (returned) for stock options and other employee benefit plans, shares							6,898,000
Common Shares reissued (returned) for stock options and other employee benefit plans														122
Other									(3)
Ending Balance, Preferred Shares (in shares) at Sep. 30, 2020		21,000	500,000	425,000	450,000	1,396,000
Ending Balance, Common Shares (in shares) at Sep. 30, 2020							976,205,000
Ending Balance at Sep. 30, 2020	17,722					$ 1,900	$ 1,257	6,263	12,375					(4,940)	867	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance						$ 1,900	$ 1,257	6,240	12,154					(4,945)	936	0
Beginning Balance, Preferred Shares (in shares) at Jun. 30, 2020						1,396,000
Beginning Balance, Common Shares (in shares) at Jun. 30, 2020							975,947,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	17,722					$ 1,900	$ 1,257	6,263	12,375					(4,940)	867	0
Net income (loss)	428								428
Other comprehensive income (loss)	(69)														(69)
Deferred compensation								2
Cash dividends declared on common shares									(180)
Cash dividends declared on preferred stock										$ (7)	$ (8)	$ (6)	$ (6)
Open market common share repurchases (in shares)							0
Open market Common Share repurchases														0
Employee equity compensation program Common Share repurchases (in shares)							(1,000)
Employee equity compensation program Common Share repurchases								21						0
Common shares reissued (returned) for stock options and other employee benefit plans, shares							259,000
Common Shares reissued (returned) for stock options and other employee benefit plans														5
Other									0
Ending Balance, Preferred Shares (in shares) at Sep. 30, 2020		21,000	500,000	425,000	450,000	1,396,000
Ending Balance, Common Shares (in shares) at Sep. 30, 2020							976,205,000
Ending Balance at Sep. 30, 2020	17,722					$ 1,900	$ 1,257	6,263	12,375					(4,940)	867	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	$ 17,722					$ 1,900	$ 1,257	$ 6,263	$ 12,375					$ (4,940)	$ 867	$ 0

[1] Includes the impact of implementing ASU 2016-13, Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments. See Note 1 (“Basis of Presentation and Accounting Policies”) for more information on our adoption of this guidance and the impact to our results of operations.

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Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Cash dividends declared on common shares (in usd per share)	$ 0.185	$ 0.185	$ 0.555	$ 0.525
Series D Preferred Stock
Cash dividends declared on Preferred Stock (in usd per share)	12.50	12.50	37.50	37.50
Series E Preferred Stock
Cash dividends declared on Preferred Stock (in usd per share)	0.382813	0.382813	1.148439	1.148439
Series F Preferred Stock
Cash dividends declared on Preferred Stock (in usd per share)	0.353125	0.353125	1.059375	1.059375
Series G Preferred Stock
Cash dividends declared on Preferred Stock (in usd per share)	$ 0.351563	$ 0.53125	$ 1.054689	$ 0.53125

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Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
OPERATING ACTIVITIES
Net income (loss)	$ 761,000,000	$ 1,248,000,000
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Provision for credit losses	1,001,000,000	336,000,000
Depreciation and amortization expense, net	112,000,000	183,000,000
Accretion of acquired loans	23,000,000	39,000,000
Increase in cash surrender value of corporate-owned life insurance	(86,000,000)	(86,000,000)
Stock-based compensation expense	75,000,000	72,000,000
Deferred income taxes (benefit)	(217,000,000)	81,000,000
Proceeds from sales of loans held for sale	10,079,000,000	8,103,000,000
Originations of loans held for sale, net of repayments	(10,040,000,000)	(8,063,000,000)
Net losses (gains) on sales of loans held for sale	(169,000,000)	(126,000,000)
Net losses (gains) on leased equipment	(17,000,000)	(16,000,000)
Net securities losses (gains)	(4,000,000)	(15,000,000)
Net losses (gains) on sales of fixed assets	3,000,000	(1,000,000)
Net decrease (increase) in trading account assets	307,000,000	(114,000,000)
Other operating activities, net	(1,101,000,000)	272,000,000
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	727,000,000	1,913,000,000
INVESTING ACTIVITIES
Cash received (used) in acquisitions, net of cash acquired	0	(185,000,000)
Net decrease (increase) in short-term investments, excluding acquisitions	(12,876,000,000)	(789,000,000)
Purchases of securities available for sale	(9,582,000,000)	(4,618,000,000)
Proceeds from sales of securities available for sale	583,000,000	24,000,000
Proceeds from prepayments and maturities of securities available for sale	4,642,000,000	2,395,000,000
Proceeds from prepayments and maturities of held-to-maturity securities	1,702,000,000	1,054,000,000
Purchases of held-to-maturity securities	(17,000,000)	(22,000,000)
Purchases of other investments	(110,000,000)	(33,000,000)
Proceeds from sales of other investments	79,000,000	40,000,000
Proceeds from prepayments and maturities of other investments	13,000,000	39,000,000
Net decrease (increase) in loans, excluding acquisitions, sales and transfers	(9,118,000,000)	(4,122,000,000)
Proceeds from sales of portfolio loans	140,000,000	245,000,000
Proceeds from corporate-owned life insurance	46,000,000	41,000,000
Purchases of premises, equipment, and software	(45,000,000)	(58,000,000)
Proceeds from sales of premises and equipment	0	17,000,000
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(24,543,000,000)	(5,972,000,000)
FINANCING ACTIVITIES
Net increase (decrease) in deposits, excluding acquisitions	24,876,000,000	4,340,000,000
Net increase (decrease) in short-term borrowings	(61,000,000)
Net increase (decrease) in short-term borrowings		19,000,000
Net proceeds from issuance of long-term debt	2,502,000,000	2,113,000,000
Payments on long-term debt	(2,509,000,000)	(1,675,000,000)
Issuance of preferred shares	0	435,000,000
Open market Common Share repurchases	(117,000,000)	(594,000,000)
Employee equity compensation program Common Share repurchases	(36,000,000)	(33,000,000)
Net proceeds from reissuance of Common Shares	7,000,000	7,000,000
Cash dividends paid	(622,000,000)	(595,000,000)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	24,040,000,000	4,017,000,000
NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS	224,000,000	(42,000,000)
CASH AND DUE FROM BANKS AT BEGINNING OF PERIOD	732,000,000	678,000,000
CASH AND DUE FROM BANKS AT END OF PERIOD	956,000,000	636,000,000
Additional disclosures relative to cash flows:
Interest paid	601,000,000	950,000,000
Income taxes paid (refunded)	175,000,000	(22,000,000)
Noncash items:
Reduction of secured borrowing and related collateral	5,000,000	3,000,000
Loans transferred to portfolio from held for sale	32,000,000	5,000,000
Loans transferred to held for sale from portfolio	292,000,000	290,000,000
Loans transferred to OREO	94,000,000	22,000,000
CMBS risk retentions	41,000,000	17,000,000
ABS risk retentions	$ 22,000,000	$ 12,000,000

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Basis of Presentation and Accounting Policies

9 Months Ended

Sep. 30, 2020

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 11 (“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 2019 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.

Effective July 1, 2020, Key amended its Accounting Policy for presentation of Short-Term Investments (page 104 of our 2019 Form 10-K) to include United States Treasury Bills with an original maturity of three months or less.

Accounting Guidance Adopted in 2020

Measurement of Credit Losses on Financial Instruments (ASU 2016-13, ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11, ASU 2020-02, ASU 2020-03)

On January 1, 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred-loss methodology that recognized losses when a probable threshold was met with an expected-loss methodology, specifically, recognizing current expected credit losses (CECL) for the remaining life of the asset at the time of origination or acquisition. The CECL methodology applies to loans, debt securities, and other financial assets and net investment in leases measured at amortized cost. It also applies to off-balance sheet credit exposures (loan commitments, standby letters of credit, financial guarantees, and other similar instruments). Assets in the scope of ASC 326 are presented at the net amount expected to be collected after deducting the allowance for credit losses from the amortized cost basis of the assets.

ASC 326 also requires credit losses relating to available-for-sale debt securities that management does not intend to sell or believes that it is more likely than not they will be required to sell to be recorded through an allowance rather than a reduction of the carrying amount.

ASC 326 replaces the purchased credit impaired concept of accounting, previously required under Subtopic 310-30, with a purchased financial assets with credit deterioration (PCD) concept. In accordance with ASC 326, we did not reassess whether recognized purchased credit impaired loans met the criteria of a PCD loan and modifications to individual acquired loans accounted for in pools were TDRs as of the date of adoption. At adoption, we elected to not maintain the pools of loans previously accounted for under Subtopic 310-30.

The prospective application resulted in a $4 million adjustment to the amortized cost basis of PCD loans to reflect the addition to the allowance for loans and leases as of January 1, 2020. After the adjustment for the allowance for the loans and leases, the noncredit discount of $15 million will be accreted to interest income using the interest method based on the effective interest rate determined after the adjustment from credit losses as of January 1, 2020.

The ASU requires use of a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. Results for reporting periods beginning after January 1, 2020, are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. We posted an adjusting entry decreasing retained earnings as of January 1, 2020, by $230 million, net of deferred taxes of $71 million, for the cumulative effect of adopting ASC 326. The main drivers of the adjustment to retained earnings are summarized in the following table.

	Pre-ASC 326 Adoption		Impact of ASC 326 Adoption		As Reported Under ASC 326
in millions	December 31, 2019				January 1, 2020
Allowance for credit losses
Commercial
Commercial and industrial	$	551	$	(141)	$	410
Real estate — commercial mortgage	143		16		159
Real estate — construction	22		(7)		15
Commercial lease financing	35		8		43
Total commercial loans	751		(124)		627
Consumer
Real estate — residential mortgage	7		77		84
Home equity loans	31		147		178
Consumer direct loans	34		63		97
Credit cards	47		35		82
Consumer indirect loans	30		6		36
Total consumer loans	149		328		477
Total ALLL — continuing operations	900		204		1,104
Discontinued operations	10		31		41
Total ALLL	910		235		1,145
Accrued expense and other liabilities	75		70		145
Total allowance for credit losses	$	985	$	305	$	1,290

In conjunction with the adoption of ASC 326, the following are additional disclosures about our significant accounting policies related to CECL.

Allowance for Held-to-Maturity Securities

Debt securities that we have the intent and ability to hold until maturity are classified as held-to-maturity and are carried at cost and adjusted for amortization of premiums and accretion of discounts using the interest method. This method produces a constant rate of return on the adjusted carrying amount.

Management classifies the held-to-maturity portfolio into the following major security types: agency residential collateralized mortgage obligations, agency residential mortgage-backed securities, agency commercial mortgage-backed securities, asset backed securities, and other. Management measures expected credit losses on held-to-maturity securities on a collective basis by major security type. The estimate of expected losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. We do not measure expected credit losses on held-to-maturity securities in which historical credit loss information adjusted for current conditions and reasonable and supportable forecasts results in an expectation that nonpayment of the amortized cost basis is zero.

All of our mortgage-backed securities are issued by U.S. government-sponsored enterprises or GNMA, are highly rated by major rating agencies and have a long history of no credit losses. Other securities are comprised of State of Israel bonds denominated and paid in U.S. dollars. Israel bonds have a long history of no credit losses. Additionally, as of September 30, 2020, the State of Israel's credit rating remains "stable" among Fitch, Moody's, and S&P (A+, A1, AA-).

Allowance for Available-for-Sale Securities

Debt securities that we intend to hold for an indefinite period of time but that may be sold in response to changes in interest rates, prepayment risk, liquidity needs, or other factors are classified as available-for-sale and reported at fair value. Realized gains and losses resulting from sales of securities using the specific identification method are included in “other income” on the income statement. Unrealized gains and losses (net of income taxes) are recorded in equity as a component of AOCI.

For available-for-sale securities in an unrealized loss position, we first assess whether we intend to sell, or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of these criteria regarding intent or requirement to sell is met, the security's amortized cost basis is written down to fair value in “other income” on the income statement. For debt securities that do not meet the aforementioned criteria, we evaluate whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, nature of the security, the underlying collateral, and the financial condition of the issuer, among other factors. If this assessment indicates a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for available-for-sale securities is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for available-for-sale securities is recognized in other comprehensive income.

Changes in the allowance for available-for-sale securities are recorded as provision for (or reversal of) credit loss. Losses are charged against the allowance for available-for-sale securities when management believes the uncollectibility of an available-for-sale security is confirmed or when either criteria regarding intent or requirement to sell is met.

Loans

Accrued interest on loans is included in "other assets" on the balance sheet and is excluded from the calculation of the allowance for credit losses due to our charge-off policy to reverse accrued interest on nonperforming loans against interest income in a timely manner. We have not classified loans that receive a payment deferral or forbearance under a COVID-19 hardship relief program as nonperforming loans and continue to accrue and recognize interest income during the period of the deferral. We, therefore, recognize an allowance for credit losses for accrued interest receivable amounts that result from deferred payments under a COVID-19 hardship relief program because those amounts would not be considered to be written off in a timely manner. As of September 30, 2020, the allowance for credit losses on accrued interest receivable was immaterial.

Expected credit losses on net investments in leases, including any unguaranteed residual asset, are included in the ALLL.

Purchased Credit Deteriorated (PCD) Loans

In addition to originating loans, we also acquire loans through portfolio purchases or acquisitions of other financial services companies. Purchased loans that have evidence of more than insignificant credit deterioration since origination are deemed PCD loans. In accordance with ASC 326, we did not reassess whether recognized purchased credit impaired loans met the criteria of a PCD loan as of the date of adoption. PCD loans are initially recorded at fair value along with an allowance for credit losses determined using the same methodology as originated loans. The sum of the loan's purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses are recorded through provision for credit losses.

Nonperforming Loans

Nonperforming loans are loans for which we do not accrue interest income, and include commercial and consumer loans and leases, as well as current year TDRs and nonaccruing TDR loans from prior years. Nonperforming loans do not include loans held for sale. Once a loan is designated nonaccrual, the interest accrued but not collected is

reversed against interest income, and payments subsequently received are applied to principal until qualifying for return to accrual.

Allowance for Loan and Lease Losses

We estimate the ALLL using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The ALLL is measured on a collective (pool) basis when similar risk characteristics exist. Our portfolio segments include commercial and consumer. Each of these two segments comprises multiple loan classes. Classes are characterized by similarities in initial measurement, risk attributes, and the manner in which we monitor and assess credit risk. The commercial segment is composed of commercial and industrial, commercial real estate, and commercial lease financing loan classes. The consumer lending segment is composed of residential mortgage, home equity, consumer direct, credit card, and consumer indirect loan classes.

The ALLL represents our current estimate of lifetime credit losses inherent in our loan portfolio at the balance sheet date. In determining the ALLL, we estimate expected future losses for the loan's entire contractual term adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications.

The ALLL is the sum of three components: (i) asset specific/ individual loan reserves; (ii) quantitative (formulaic or pooled) reserves; and (iii) qualitative (judgmental) reserves.

Asset Specific / Individual Component

Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the collective evaluation. We have elected to apply the practical expedient to measure expected credit losses of a collateral dependent asset using the fair value of the collateral, less any costs to sell, when foreclosure is not probable, when repayment of the loan is expected to be provided substantially through the operation or sale of the collateral, and the borrower is experiencing financial difficulty.

Individual reserves are determined as follows:

•For commercial non-accruing loans greater than or equal to a defined dollar threshold, individual reserves are determined based on an analysis of the present value of the loan's expected future cash flows, the loan's observable market value, or the fair value of the collateral less costs to sell.

•For commercial non-accruing loans below the defined dollar threshold, an established LGD percentage is multiplied by the loan balance and the results are aggregated for purposes of measuring specific reserve impairment.

•The population of individually assessed consumer loans includes loans deemed collateral dependent, in addition to all TDRs. The expected loss for these loans is estimated based on the present value of the loan's expected future cash flows, except in instances where the loan is collateral dependent, in which case the loan is written down based on the collateral's fair market value less costs to sell.

Quantitative Component

We use a non-DCF factor-based approach to estimate expected credit losses that include component PD/LGD/EAD models as well as less complex estimation methods for smaller loan portfolios.

•PD: This component model is used to estimate the likelihood that a borrower will cease making payments as agreed. The major contributors to this are the borrower credit attributes and macro-economic trends. The objective of the PD model is to produce default likelihood forecasts based on the observed loan-level information and projected paths of macroeconomic variables.

•LGD: This component model is used to estimate the loss on a loan once a loan is in default.

•EAD: Estimates the loan balance at the time the borrower stops making payments. For all term loans, an amortization based formulaic approach is used for account level EAD estimates. We calculate EAD using a portfolio specific method in each of our revolving product portfolios. For line products that are unconditionally cancellable, the balances will either use a paydown curve or be held flat through the life of the loan.

Additional information about the critical estimates and judgments we make in developing these models is provided in the section “Allowance for loan and lease losses” under the heading “Critical Accounting Policies and Estimates” in Item 2 of this report.

Qualitative Component

The ALLL also includes identified qualitative factors related to idiosyncratic risk factors, changes in current economic conditions that may not be reflected in quantitatively derived results, and other relevant factors to ensure the ALLL reflects our best estimate of current expected credit losses.

While our reserve methodologies strive to reflect all relevant risk factors, there continues to be uncertainty associated with, but not limited to, potential imprecision in the estimation process due to the inherent time lag

of obtaining information and normal variations between estimates and actual outcomes. We provide additional reserves that are designed to provide coverage for losses attributable to such risks. The ALLL also includes factors that may not be directly measured in the determination of individual or collective reserves. Such qualitative factors may include:

•The nature and volume of the institution’s financial assets;

•The existence, growth, and effect of any concentrations of credit;

•The volume and severity of past due financial assets, the volume of nonaccrual assets, and the volume and severity of adversely classified or graded assets;

•The value of the underlying collateral for loans that are not collateral dependent;

•The institution’s lending policies and procedures, including changes in underwriting standards and practices for collections, write-offs, and recoveries;

•The quality of the institution’s credit review function;

•The experience, ability, and depth of the institution’s lending, investment, collection, and other relevant management and staff;

•The effect of other external factors such as the regulatory, legal and technological environments; competition; and events such as natural disasters; and

•Actual and expected changes in international, national, regional, and local economic and business conditions and developments in which the institution operates that affect the collectability of financial assets.

Liability for Credit Losses on Lending-Related Commitments

The liability for credit losses on lending-related commitments, such as letters of credit and unfunded loan commitments, is included in “accrued expense and other liabilities” on the balance sheet. Expected credit losses are estimated over the contractual period in which we are exposed to credit risk via a contractual obligation unless that obligation is unconditionally cancellable by us. The liability for credit losses on lending-related commitments is adjusted as a provision for credit losses. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated useful life. Consistent with our estimation process on our loan and lease portfolio, we use a non-DCF factor-based approach to estimate expected credit losses that include component PD/LGD/EAD models as well as less complex estimation methods for smaller portfolios.

Allowance for Credit Losses on Other Financial Assets

The allowance for credit losses on other financial assets, such as other receivables and servicing advances, is determined based on historical loss information and other available indicators. If such information does not indicate any expected credit losses, Key may estimate the allowance for credit losses on other financial assets to be zero or close to zero. As of September 30, 2020, the allowance for credit losses on other financial assets was immaterial.

Simplifying the Test for Goodwill Impairment (ASU 2017-04)

On January 1, 2020, we adopted ASU 2017-04. The ASU amends ASC Topic 350, Intangibles - Goodwill and Other and eliminates the second step of the test for goodwill impairment. Goodwill represents the amount by which the cost of net assets acquired in a business combination exceeds their fair value. Goodwill is assigned to reporting units as of the acquisition date based on the expected benefit to such reporting unit from the synergies of the business combination. Goodwill is not amortized. Goodwill is tested at the reporting unit level for impairment, at least annually as of October 1, or when indicators of impairment exist.

When indicators of impairment exist we may look to both quantitative and qualitative information to determine whether or not it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. Factors considered in the assessment include, but are not limited to, macroeconomic conditions, industry and market considerations, stock performance, financial performance of the reporting units, and previous results of goodwill impairment tests. When it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount a quantitative test is required. Under the new accounting guidance, the quantitative analysis requires the estimated fair value of each reporting unit to be compared to its carrying amount, including goodwill. If the estimated fair value of the reporting unit is less than its carrying value, an impairment charge would be recorded for the excess, not to exceed the amount of goodwill allocated to the reporting unit. The adoption of this accounting guidance must be applied prospectively and is not expected to have a material effect on our financial condition or results of operations. See Note 10 (“Goodwill”) for results of our interim goodwill impairment test.

Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04)

We adopted ASU 2020-04 on April 1, 2020. The amendments provide optional expedients and exceptions for certain contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of rate reform. The guidance is effective from the date of issuance until December 31, 2022. The guidance permits Key not to apply modification accounting or remeasure lease payments in lease contracts if the changes to the contract are related to the discontinuation of the reference rate. If certain criteria are met, the amendments also allow exceptions to the dedesignation criteria of the hedging relationship and the assessment of hedge effectiveness during the transition period. It also allows Key to make a one time election to sell, transfer, or both sell and transfer debt securities classified as held to maturity that reference a rate affected by reference rate reform and that are classified as held to maturity before January 1, 2020. This one time election may be made at any time after March 12, 2020, but no later than December 31, 2022. Key has not made a determination on whether it will make this election. At the time of adoption, the guidance did not have a significant impact on Key’s financial condition and results of operations. We will continue to assess the impact as the reference rate transition occurs over the next two years.

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Earnings Per Common Share

9 Months Ended

Sep. 30, 2020

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	2020		2019		2020		2019
EARNINGS
Income (loss) from continuing operations	$	424	$	413	$	754	$	1,242
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		—
Income (loss) from continuing operations attributable to Key	424		413		754		1,242
Less: Dividends on Preferred Stock	27		30		80		70
Income (loss) from continuing operations attributable to Key common shareholders	397		383		674		1,172
Income (loss) from discontinued operations, net of taxes	4		3		7		6
Net income (loss) attributable to Key common shareholders	$	401	$	386	$	681	$	1,178
WEIGHTED-AVERAGE COMMON SHARES
Weighted-average Common Shares outstanding (000)	967,804		988,319		967,632		998,268
Effect of Common Share options and other stock awards	6,184		10,009		6,648		9,632
Weighted-average Common Shares and potential Common Shares outstanding (000) (a)	973,988		998,328		974,280		1,007,900
EARNINGS PER COMMON SHARE
Income (loss) from continuing operations attributable to Key common shareholders	$	.41	$	.39	$	.70	$	1.17
Income (loss) from discontinued operations, net of taxes	—		—		.01		.01
Net income (loss) attributable to Key common shareholders (b)	.41		.39		.70		1.18
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution	$	.41	$	.38	$	.69	$	1.16
Income (loss) from discontinued operations, net of taxes — assuming dilution	—		—		.01		.01
Net income (loss) attributable to Key common shareholders — assuming dilution (b)	.41		.39		.70		1.17

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

(b)EPS may not foot due to rounding.

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Loan Portfolio

9 Months Ended

Sep. 30, 2020

Loans Receivables [Abstract]

Loan Portfolio

3. Loan Portfolio

Loan Portfolio by Portfolio Segment and Financing Receivable (a)

in millions	September 30, 2020		December 31, 2019
Commercial and industrial (b)	$	55,025	$	48,295
Commercial real estate:
Commercial mortgage	13,059		13,491
Construction	1,947		1,558
Total commercial real estate loans	15,006		15,049
Commercial lease financing (c)	4,450		4,688
Total commercial loans	74,481		68,032
Residential — prime loans:
Real estate — residential mortgage	8,715		7,023
Home equity loans	9,488		10,274
Total residential — prime loans	18,203		17,297
Consumer direct loans	4,395		3,513
Credit cards	970		1,130
Consumer indirect loans	5,032		4,674
Total consumer loans	28,600		26,614
Total loans (d)	$	103,081	$	94,646

(a)Accrued interest of $235 million and $244 million at September 30, 2020, and December 31, 2019, respectively, presented in "other assets" on the Consolidated Balance Sheets is excluded from the amortized cost basis disclosed in this table.

(b)Loan balances include $128 million and $144 million of commercial credit card balances at September 30, 2020, and December 31, 2019, respectively.

(c)Commercial lease financing includes receivables held as collateral for a secured borrowing of $18 million and $15 million at September 30, 2020, and December 31, 2019, respectively. Principal reductions are based on the cash payments received from these related receivables. Additional information pertaining to this secured borrowing is included in Note 20 (“Long-Term Debt”) beginning on page 163 of our 2019 Form 10-K.

(d)Total loans exclude loans of $743 million at September 30, 2020, and $865 million at December 31, 2019, related to the discontinued operations of the education lending business.

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Asset Quality

9 Months Ended

Sep. 30, 2020

Credit Loss [Abstract]

Asset Quality

4. Asset Quality

ALLL

We estimate the appropriate level of the ALLL on at least a quarterly basis. The methodology is described in Note 1 ("Basis of Presentation and Accounting Policies") under the heading "Allowance for Loan and Lease Losses" of this report.

The ALLL at September 30, 2020, represents our current estimate of lifetime 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, 2020:

in millions	June 30, 2020		Provision			Charge-offs		Recoveries		September 30, 2020
Commercial and Industrial	$	725	$	177		$	(101)	$	9	$	810
Commercial real estate:
Real estate — commercial mortgage	292		(2)			(13)		2		279
Real estate — construction	41		(7)			—		—		34
Total commercial real estate loans	333		(9)			(13)		2		313
Commercial lease financing	55		13			(10)		—		58
Total commercial loans	1,113		181			(124)		11		1,181
Real estate — residential mortgage	101		2			—		1		104
Home equity loans	197		(13)			(4)		3		183
Consumer direct loans	130		1			(8)		2		125
Credit cards	107		(5)			(9)		2		95
Consumer indirect loans	60		(16)			(6)		4		42
Total consumer loans	595		(31)			(27)		12		549
Total ALLL — continuing operations	1,708		150		(a)	(151)		23		1,730
Discontinued operations	43		(1)			—		—		42
Total ALLL — including discontinued operations	$	1,751	$	149		$	(151)	$	23	$	1,772

(a)Excludes a provision for losses on lending-related commitments of $10 million.

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.

Nine months ended September 30, 2020:

in millions	December 31, 2019		Impact of ASC 326 Adoption		January 1, 2020		Provision			Charge-offs		Recoveries		September 30, 2020
Commercial and Industrial	$	551	$	(141)	$	410	$	613		$	(232)	$	19	$	810
Commercial real estate:
Real estate — commercial mortgage	143		16		159		135			(18)		3		279
Real estate — construction	22		(7)		15		19			—		—		34
Total commercial real estate loans	165		9		174		154			(18)		3		313
Commercial lease financing	35		8		43		30			(16)		1		58
Total commercial loans	751		(124)		627		797			(266)		23		1,181
Real estate — residential mortgage	7		77		84		21			(2)		1		104
Home equity loans	31		147		178		9			(10)		6		183
Consumer direct loans	34		63		97		52			(30)		6		125
Credit cards	47		35		82		39			(32)		6		95
Consumer indirect loans	30		6		36		16			(22)		12		42
Total consumer loans	149		328		477		137			(96)		31		549
Total ALLL — continuing operations	900		204		1,104		934		(a)	(362)		54		1,730
Discontinued operations	10		31		41		2			(4)		3		42
Total ALLL — including discontinued operations	$	910	$	235	$	1,145	$	936		$	(366)	$	57	$	1,772

(a)Excludes a provision for losses on lending-related commitments of $67 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.

As described in Note 1 ("Basis of Presentation and Accounting Policies"), we estimate the ALLL using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. In our estimation of expected credit losses, we use a two year reasonable and supportable period across all products. Following this two year period in which supportable forecasts can be generated, for all modeled loan portfolios, we revert expected credit losses to a level that is consistent with our historical information by reverting the macroeconomic variables (model inputs) to their long run average. We revert to historical loss rates for less complex estimation methods for smaller portfolios. A 20 year fixed length look back period is used to calculate the long run average of the macroeconomic variables. A four quarter reversion period is used where the macroeconomic variables linearly revert to their long run average following the two year reasonable and supportable period.

We develop our reasonable and supportable forecasts using relevant data including, but not limited to, changes in economic output, unemployment rates, property values, and other factors associated with the credit losses on financial assets. Some macroeconomic variables apply to all portfolio segments, while others are more portfolio specific. 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

(a)Variables include all transformations and interactions with other risk drivers. Additionally, variables may have varying impacts at different points in the economic cycle.

In addition to macroeconomic drivers, portfolio attributes such as remaining term, outstanding balance, risk ratings, FICO, LTV, and delinquency also drive ALLL changes. Our ALLL models were designed to capture the correlation between economic and portfolio changes. As such, evaluating shifts in individual portfolio attributes and macroeconomic variables in isolation may not be indicative of past or future performance.

Economic Outlook

As of September 30, 2020, the COVID-19 pandemic has continued to create unprecedented economic stress and uncertainty in the U.S. and globally. We utilized the Moody’s August 2020 Consensus forecast to estimate our expected credit losses as of September 30, 2020. This forecast considered the global economic fallout from the ongoing pandemic as well as the potential United States' monetary and fiscal response. We determined such forecast to be a reasonable view of the outlook for the global economy given the available information at current quarter end.

The baseline scenario reflects a moderate economic slowdown over the next two years in markets in which we operate. U.S. GDP rebounds with a 20% annualized growth rate in the third quarter of 2020, but due to the unprecedented decline in the second quarter of 2020 is expected to decline approximately 5% in all of 2020. GDP continues to grow throughout 2021, but at a declining rate and is not expected to return to pre-pandemic levels until early 2022. The national unemployment rate forecast is 10.7% in the third quarter of 2020 and 9.3% in the fourth quarter of 2020, and is forecast to remain in the upper-single digits throughout 2021.

To the extent we identified credit risk considerations that were not captured by the third-party economic forecast, we addressed the risk through management’s qualitative adjustments to the ALLL.

As a result of the unprecedented economic uncertainty caused by the COVID-19 pandemic, our future loss estimates may vary considerably from our September 30, 2020, assumptions.

Commercial Loan Portfolio

The ALLL from continuing operations for the commercial segment increased by $68 million, or 6.1%, from June 30, 2020. The overall increase in the allowance is driven by updated economic forecasts and downward portfolio migration, which are partially offset by a decline in loan balances.

The primary changes to the economic forecast include modest deterioration in the unemployment and GDP growth outlook, which contributes to the ALLL increase for the overall commercial segment. Improvements in real estate price indices contributed to a modest reduction in reserve in our commercial real estate book. Risk rating migrations are also driving higher ALLL levels for the commercial and industrial segment. We continue to closely monitor the oil & gas exposure and the ALLL results reflect incremental risk considerations for this segment.

As of September 30, 2020, we concluded that no ALLL is necessary for $8.0 billion in outstanding PPP loans as they are 100% guaranteed by the SBA.

Consumer Loan Portfolio

The ALLL from continuing operations for the consumer segment decreased by $46 million, or 7.7%, from June 30, 2020. The overall decrease in the allowance is driven by updated economic forecasts that capture an improving outlook for several drivers and strong portfolio performance.

The most meaningful changes to the economic forecast contributing to the reduction in reserves include improvement in the Manheim Used Vehicle Value Index forecast, which impacts the indirect loan portfolio, as well as improvement in the HPI outlook as the housing market continues to display strength, which impacts the residential mortgage and home equity segments. As it relates to the decline in the ALLL due to portfolio factors, shifts are largely driven by attrition activity, targeted portfolio growth and overall strong credit drivers. The ALLL results also reflect incremental credit risk considerations as a result of the economic stress and related borrower assistance programs, which are addressed through qualitative adjustments.

Credit Risk Profile

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. The internal risk grades assigned to loans follow our definitions of Pass and Criticized, which are consistent with published definitions of regulatory risk classifications. Loans with a pass rating represent those loans not classified on our rating scale for problem credits, as minimal credit risk has been identified. Criticized loans are those loans that either have a potential weakness deserving management's close attention or have a well-defined weakness that may put full collection of contractual cash flows at risk. 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 tables below at the dates indicated.

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

Commercial Credit Exposure

Credit Risk Profile by Creditworthiness Category and Vintage (a)

As of September 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	$	13,328	$	5,936	$	4,512	$	3,141	$	2,223	$	3,018	$	19,876	$	153	$	52,187
Criticized (Accruing)	39		131		164		201		137		251		1,434		22		2,379
Criticized (Nonaccruing)	6		14		63		31		20		41		283		1		459
Total commercial and industrial	13,373		6,081		4,739		3,373		2,380		3,310		21,593		176		55,025
Real estate — commercial mortgage
Risk Rating:
Pass	1,341		3,186		1,877		918		879		3,267		807		46		12,321
Criticized (Accruing)	3		40		65		113		85		246		80		2		634
Criticized (Nonaccruing)	—		1		4		3		1		90		5		—		104
Total real estate — commercial mortgage	1,344		3,227		1,946		1,034		965		3,603		892		48		13,059
Real estate — construction
Risk Rating:
Pass	242		701		624		226		34		25		24		5		1,881
Criticized (Accruing)	—		3		18		—		41		2		1		—		65
Criticized (Nonaccruing)	—		—		—		—				1		—		—		1
Total real estate — construction	242		704		642		226		75		28		25		5		1,947
Commercial lease financing
Risk Rating:
Pass	793		1,180		620		561		273		939		—		—		4,366
Criticized (Accruing)	9		14		18		19		9		9		—		—		78
Criticized (Nonaccruing)	—		—		1		2		3		—		—		—		6
Total commercial lease financing	802		1,194		639		582		285		948				—		4,450
Total commercial loans	$	15,761	$	11,206	$	7,966	$	5,215	$	3,705	$	7,889	$	22,510	$	229	$	74,481

(a)Accrued interest of $133 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 September 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	$	2,561	$	1,774	$	242	$	286	$	604	$	1,372	—		—		$	6,839
660 to 749	550		350		88		58		108		362		—		—		1,516
Less than 660	15		34		24		11		23		183		—		—		290
No Score	—		2		4		6		2		55		1		—		70
Total real estate — residential mortgage	3,126		2,160		358		361		737		1,972		1		—		8,715
Home equity loans
FICO Score:
750 and above	644		417		166		192		185		815		$	2,874	$	639	5,932
660 to 749	213		249		115		119		96		380		1,308		229		2,709
Less than 660	22		50		29		29		34		155		450		65		834
No Score	2		2		1		—		—		2		5		1		13
Total home equity loans	881		718		311		340		315		1,352		4,637		934		9,488
Consumer direct loans
FICO Score:
750 and above	1,426		1,008		131		39		21		65		127		—		2,817
660 to 749	367		295		91		26		16		33		263		—		1,091
Less than 660	17		38		22		9		5		12		86		—		189
No Score	34		39		22		17		10		12		164		—		298
Total consumer direct loans	1,844		1,380		266		91		52		122		640		—		4,395
Credit cards
FICO Score:
750 and above	—		—		—		—		—		—		469		—		469
660 to 749	—		—		—		—		—		—		405		—		405
Less than 660	—		—		—		—		—		—		95		—		95
No Score	—		—		—		—		—		—		1		—		1
Total credit cards	—		—		—		—		—		—		970		—		970
Consumer indirect loans
FICO Score:
750 and above	944		991		415		221		87		80		—		—		2,738
660 to 749	595		633		264		115		46		57		—		—		1,710
Less than 660	125		184		113		62		30		33		—		—		547
No Score	37		—		—		—		—		—		—		—		37
Total consumer indirect loans	1,701		1,808		792		398		163		170		—		—		5,032
Total consumer loans	$	7,552	$	6,066	$	1,727	$	1,190	$	1,267	$	3,616	$	6,248	$	934	$	28,600

(a)Accrued interest of $102 million, presented in Other Assets on the Consolidated Balance Sheets, was excluded from the amortized cost basis disclosed in this table.

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 (”Basis of Presentation and Accounting Policies”) and Note 1 (“Summary of Significant Accounting Policies”) under the heading “Nonperforming Loans” beginning on page 101 of our 2019 Form 10-K.

Under the CARES Act as well as banking regulator interagency guidance, certain loan modifications to borrowers experiencing financial distress as a result of the economic impacts created by the COVID-19 pandemic may not be required to be reported as past due and nonperforming. For COVID-19 related loan modifications which occurred from March 1, 2020, through September 30, 2020, and met the loan modification criteria under either the CARES Act or the criteria specified by the regulatory agencies, we have elected to re-age to current status all commercial loans and consumer loans that are not secured by real-estate and freeze the delinquency status of consumer real estate secured loans as of the modification or forbearance grant date. At September 30, 2020, $4.5 billion of loan modifications and forbearances made under the criteria of either the CARES Act or banking regulator interagency guidance were not reported as nonperforming.

The following aging analysis of past due and current loans as of September 30, 2020, and December 31, 2019, provides further information regarding Key’s credit exposure.

Aging Analysis of Loan Portfolio(a)

September 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	$	54,385	$	104	$	53	$	24	$	459	$	640	$	55,025
Commercial real estate:
Commercial mortgage	12,900		23		14		18		104		159		13,059
Construction	1,942		1		2		1		1		5		1,947
Total commercial real estate loans	14,842		24		16		19		105		164		15,006
Commercial lease financing	4,418		21		3		2		6		32		4,450
Total commercial loans	$	73,645	$	149	$	72	$	45	$	570	$	836	$	74,481
Real estate — residential mortgage	$	8,594	$	17	$	5	$	3	$	96	$	121	$	8,715
Home equity loans	9,275		42		12		13		146		213		9,488
Consumer direct loans	4,377		7		4		4		3		18		4,395
Credit cards	956		4		2		6		2		14		970
Consumer indirect loans	4,991		18		4		2		17		41		5,032
Total consumer loans	$	28,193	$	88	$	27	$	28	$	264	$	407	$	28,600
Total loans	$	101,838	$	237	$	99	$	73	$	834	$	1,243	$	103,081

(a)Amounts in table represent amortized cost and exclude loans held for sale.

(b)Accrued interest of $235 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.

At September 30, 2020, the approximate carrying amount of our commercial nonperforming loans outstanding represented 77% of their original contractual amount owed, total nonperforming loans outstanding represented 80% of their original contractual amount owed, and nonperforming assets in total were carried at 87% of their original contractual amount owed.

Nonperforming loans reduced expected interest income by $7 million and $20 million for the three and nine months ended September 30, 2020, respectively, and $7 million and $24 million for the three and nine months ended September 30, 2019, respectively.

The amortized cost basis of nonperforming loans on nonaccrual status for which there is no related allowance for credit losses was $456 million at September 30, 2020.

Collateral-dependent Financial Assets

We classify financial assets as collateral-dependent when our borrower is experiencing financial difficulty, and we expect repayment to be provided substantially through the operation or sale of the collateral. Our commercial loans have collateral that includes commercial machinery, commercial properties, and commercial real estate construction projects. Our consumer loans have collateral that includes residential real estate, automobiles, boats, and RVs.

There were no significant changes in the extent to which collateral secures our collateral-dependent financial assets during the three months ended September 30, 2020.

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. Our loan modifications are handled on a case-by-case basis and are negotiated to achieve mutually agreeable terms that maximize loan collectability and meet the borrower’s financial needs. Under the CARES Act as well as banking regulator interagency guidance, certain loan modifications to borrowers experiencing financial distress as a result of the economic impacts created by the COVID-19 pandemic may not be required to be treated as TDRs under U.S. GAAP.  We elected to suspend TDR accounting for $4.5 billion of COVID-19 related loan modifications as of September 30, 2020 as such loan modifications met the criteria under either the CARES Act or banking regulator interagency guidance. 

Commitments outstanding to lend additional funds to borrowers whose loan terms have been modified in TDRs were $1 million and $5 million at September 30, 2020, and December 31, 2019, respectively.

The consumer TDR other concession category in the table below primarily includes those borrowers’ debts that are discharged through Chapter 7 bankruptcy and have not been formally re-affirmed. At September 30, 2020, and December 31, 2019, the recorded investment of consumer residential mortgage loans in the process of foreclosure was approximately $99 million and $97 million, respectively.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
in millions	2020		2019		2020		2019
Commercial loans:
Extension of Maturity Date	—		$	6	$	8	$	11
Payment or Covenant Modification/Deferment	—		—		—		1
Bankruptcy Plan Modification	—		—		—		—
Increase in new commitment or new money	—		2		—		12
Total	—		$	8	$	8	$	24
Consumer loans:
Interest rate reduction	$	13	$	4	$	22	$	12
Other	6		8		18		21
Total	$	19	$	12	$	40	$	33
Total TDRs	$	19	$	20	$	48	$	57

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	2020		2019		2020		2019
Balance at beginning of the period	$	310	$	395	$	347	$	399
Additions	26		20		65		88
Payments	(22)		(65)		(75)		(123)
Charge-offs	(8)		(3)		(31)		(17)
Balance at end of period	$	306	$	347	$	306	$	347

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

	September 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	51	$	51	$	39	51	$	72	$	53
Commercial real estate:
Commercial mortgage	7	62		50		6	64		58
Total commercial real estate loans	7	62		50		6	64		58
Total commercial loans	58	113		89		57	136		111
Real estate — residential mortgage	271	28		27		181	13		11
Home equity loans	629	40		37		713	42		41
Consumer direct loans	153	2		2		172	2		2
Credit cards	279	2		1		368	2		2
Consumer indirect loans	867	15		12		1,131	19		16
Total consumer loans	2,199	87		79		2,565	78		72
Total nonperforming TDRs	2,257	200		168		2,622	214		183
Prior-year accruing:(a)
Commercial and industrial	4	5		2		6	30		25
Commercial real estate
Commercial mortgage	1	—		—		1	—		—
Total commercial real estate loans	1	—		—		1	—		—
Total commercial loans	5	5		2		7	30		25
Real estate — residential mortgage	472	35		29		493	37		31
Home equity loans	1,829	108		87		1,751	104		84
Consumer direct loans	178	4		2		139	4		3
Credit cards	584	4		1		486	3		1
Consumer indirect loans	813	31		17		714	33		20
Total consumer loans	3,876	182		136		3,583	181		139
Total prior-year accruing TDRs	3,881	187		138		3,590	211		164
Total TDRs	6,138	$	387	$	306	6,212	$	425	$	347

(a)All TDRs that were restructured prior to January 1, 2020, and January 1, 2019, 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, 2020, there were no commercial loan TDRs and 33 consumer loan TDRs with a combined recorded investment of $1 million that experienced payment defaults after modifications resulting in TDR status during 2019. 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 nine months ended September 30, 2020, there were no commercial loan TDRs and 160 consumer loan TDRs with a combined recorded investment of $4 million that experienced payment defaults after modifications resulting in TDR status during 2019. 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.

Liability for Credit Losses on Off Balance Sheet Exposures

The liability for credit losses inherent in unfunded lending-related commitments, such as letters of credit and unfunded loan commitments, and certain financial guarantees is included in “accrued expense and other liabilities” on the balance sheet.

Changes in the liability for credit losses on off balance sheet exposures are summarized as follows:

	Three months ended September 30,				Nine months ended September 30,
in millions	2020		2019		2020		2019
Balance at the end of the prior period	$	198	$	64	$	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	198		64		141		64
Provision (credit) for losses on off balance sheet exposures	10		1		67		1
Balance at end of period	$	208	$	65	$	208	$	65

(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.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2020

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 2019 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, 2020, and December 31, 2019.

	September 30, 2020								December 31, 2019
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
in millions
ASSETS MEASURED ON A RECURRING BASIS
Short-term investments
U.S. Treasury Bills	—		$	1,000	—		$	1,000	—		$	—	—		$	—
Total short-term investments	—		1,000		—		1,000		—		—		—		—
Trading account assets:
U.S. Treasury, agencies and corporations	—		611		—		611		—		843		—		843
States and political subdivisions	—		52		—		52		—		30		—		30
Other mortgage-backed securities	—		13		$	27	40		—		78		—		78
Other securities	$	1	12		—		13		—		44		—		44
Total trading account securities	1		688		27		716		—		995		—		995
Commercial loans	—		17		—		17		—		45		—		45
Total trading account assets	1		705		27		733		—		1,040		—		1,040
Securities available for sale:
U.S. Treasury, agencies and corporations	—		4,464		—		4,464		—		334		—		334
States and political subdivisions	—		3		—		3		—		4		—		4
Agency residential collateralized mortgage obligations	—		13,732		—		13,732		—		12,783		—		12,783
Agency residential mortgage-backed securities	—		1,326		—		1,326		—		1,714		—		1,714
Agency commercial mortgage-backed securities	—		7,358		—		7,358		—		6,997		—		6,997
Other securities	—		—		12		12		—		—		$	11	11
Total securities available for sale	—		26,883		12		26,895		—		21,832		11		21,843
Other investments:
Principal investments:
Direct	—		—		1		1		—		—		1		1
Indirect (measured at NAV) (a)	—		—		—		60		—		—		—		68
Total principal investments	—		—		1		61		—		—		1		69
Equity investments:
Direct	—		—		12		12		—		—		12		12
Direct (measured at NAV) (a)	—		—		—		1		—		—		—		1
Indirect (measured at NAV) (a)	—		—		—		7		—		—		—		8
Total equity investments	—		—		12		20		—		—		12		21
Total other investments	—		—		13		81		—		—		13		90
Loans, net of unearned income (residential)	—		—		8		8		—		—		4		4
Loans held for sale (residential)	—		287		1		288		—		140		—		140
Derivative assets:
Interest rate	—		1,746		81		1,827		—		941		22		963
Foreign exchange	56		18		—		74		$	49	18		—		67
Commodity	—		462		—		462		—		208		—		208
Credit	—		1		2		3		—		—		1		1
Other	—		26		44		70		—		9		5		14
Derivative assets	56		2,253		127		2,436		49		1,176		28		1,253
Netting adjustments (b)	—		—		—		(490)		—		—		—		(473)
Total derivative assets	56		2,253		127		1,946		49		1,176		28		780
Accrued income and other assets	—		—		—		—		—		—		—		—
Total assets on a recurring basis at fair value	$	57	$	30,128	$	188	$	30,951	$	49	$	24,188	$	56	$	23,897
LIABILITIES MEASURED ON A RECURRING BASIS
Bank notes and other short-term borrowings:
Short positions	$	289	$	529	—		$	818	$	19	$	686	—		$	705
Derivative liabilities:
Interest rate	—		306		—		306		—		253		—		253
Foreign exchange	51		17		—		68		43		17		—		60
Commodity	—		445		—		445		—		200		—		200
Credit	—		—		$	15	15		—		1		$	9	10
Other	—		13		—		13		—		10		—		10
Derivative liabilities	51		781		15		847		43		481		9		533
Netting adjustments (b)	—		—		—		(679)		—		—		—		(335)
Total derivative liabilities	51		781		15		168		43		481		9		198
Total liabilities on a recurring basis at fair value	$	340	$	1,310	$	15	$	986	$	62	$	1,167	$	9	$	903

(a)Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet.

(b)Netting adjustments represent the amounts recorded to convert our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. The net basis takes into account the impact of bilateral collateral and master netting agreements that allow us to settle all derivative contracts with a single counterparty on a net basis and to offset the net derivative position with the related cash collateral. Total derivative assets and liabilities include these netting adjustments.

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 (includes trading account assets, securities available for sale, and U.S. Treasury Bills classified as short-term investments)	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: • Internally developed valuation techniques, principally discounted cash flow methods (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, 2020, the balance is less than $1 million.	Level 3
Principal investments (indirect)	Indirect principal investments include primary and secondary investments in private equity funds engaged mainly in venture- and growth-oriented investing. These investments do not have readily determinable fair values and qualify for the practical expedient to estimate fair value based upon net asset value per share (or its equivalent, such as member units or an ownership interest in partners’ capital to which a proportionate share of net assets is attributed). Indirect principal investments are also accounted for as investment companies, whereby each investment is adjusted to fair value with any net realized or unrealized gain/loss recorded in the current period’s earnings. Under the provisions of the Volcker Rule, we are required to dispose or conform our indirect investments to the requirements of the statute by no later than July 21, 2022. As of September 30, 2020, we have not committed to a plan to sell these investments. Therefore, these investments continue to be valued using the net asset value per share methodology.	NAV

The following table presents the fair value of our direct and indirect principal investments and related unfunded commitments at September 30, 2020, as well as financial support provided for the three and nine months ended September 30, 2020, and September 30, 2019.

					Financial support provided
					Three months ended September 30,						Nine months ended September 30,
	September 30, 2020				2020				2019		2020			2019
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)	60		$	18	$	1	—		—	—	$	1	—	$	2	—
Total	$	61	$	18	1		$	—	—	—	$	1	—	$	2	—

(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, 2020, no significant liquidation of the underlying investments has been communicated to Key. The purpose of funding our capital commitments to these investments is to allow the funds to make additional follow-on investments and pay fund expenses until the fund dissolves. We, and all other investors in the fund, are obligated to fund the full amount of our respective capital commitments to the fund based on our and their respective ownership percentages, as noted in the applicable Limited Partnership Agreement.

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

Asset/liability class	Valuation technique	Valuation hierarchy classification(s)
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: • LIBOR and OIS curves, index pricing curves, foreign currency curves • Volatility surfaces (a three-dimensional graph of implied volatility against strike price and maturity) We have customized derivative instruments and risk participations that are classified as Level 3 instruments. These derivative positions are valued using internally developed models, with inputs consisting of available market data, including: • Credit spreads and interest rates The unobservable internally derived assumptions include: • Loss given default • Internal risk assessments of customers 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, for sold risk participation agreements, a higher loss probability and a lower credit rating would negatively affect the fair value of the risk participations and a lower loss probability and higher credit rating would positively affect the fair value of the risk participations. (For purchased risk participation agreements, higher loss probabilities and lower credit ratings would positively affect the fair value.) 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, 2020, and September 30, 2019. 

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, 2020
Trading account assets
Other mortgage-backed securities	—		—		—			—		$	(9)	—	—		$	36	(d)	—			$	27	—
Securities available for sale
Other securities	$	11	$	1	—			—		—		—	—		—			—			12		—
Other investments
Principal investments
Direct (a)	1		—		—			—		—		—	—		—			—			1		—
Equity investments
Direct (a)	12		—		—			—		—		—	—		—			—			12		—
Loans held for sale (residential)	—		—		—			—		(10)		—	$	11	—			—			1		—
Loans, net of unearned income (residential)	4		—		—			—		(2)		—	6		—			—			8		—
Derivative instruments (b)
Interest rate	22		—		$	18	(c)	$	14	(5)		—	—		98		(d)	$	(66)	(d)	81		—
Credit	(8)		—		(6)		(c)	1		—		—	—		—			—			(13)		—
Other (e)	5		—		—			—		—		—	39		—			—			44		—
Three months ended September 30, 2020
Trading account assets
Other mortgage-backed securities	$	36	—		—			—		$	(9)	—	—		—			—			$	27	—
Securities available for sale
Other securities	12		$	—	—			—		—		—	—		—			—			12		—
Other investments
Principal investments
Direct (a)	1		—		—			—		—		—	—		—			—			1		—
Equity investments
Direct (a)	12		—		—			—		—		—	—		—			—			12		—
Loans held for sale (residential)	—		—		—			—		—		—	$	1	—			—			1		—
Loans, net of unearned income (residential)	5		—		—			—		—		—	3		—			—			8		—
Derivative instruments (b)
Interest rate	52		—		$	(3)	(c)	$	2	(4)		—	—		$	36	(d)	$	(2)	(d)	81		—
Credit	(17)		—		4		(c)	—				—	—		—						(13)		—
Other (e)	46		—		5			—		—		—	(7)		—			—			44		—

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 (a)	1		—		—			—		—		—	—		—			—			1		—
Equity investments
Direct (a)	7		—		$	(1)		—		—		—	—		$	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)		(c)	$	(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 (a)	1		—		—			—		—		—	—		—			—			1		—
Equity investments
Direct (a)	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)	—		—		—	—		—			$	(2)	(d)	3		—
Credit	(1)		—		(5)		(c)	—		$	1	—	—		—			—			(5)		—
Other (e)	6		—		—			—		—		—	—		—			—			6		—

(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 instruments 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, 2020, and December 31, 2019.

The following table presents our assets measured at fair value on a nonrecurring basis at September 30, 2020, and December 31, 2019:

	September 30, 2020							December 31, 2019
in millions	Level 1	Level 2		Level 3		Total		Level 1	Level 2		Level 3		Total
ASSETS MEASURED ON A NONRECURRING BASIS
Collateral-dependent loans	—	$	—	$	89	$	89	—	—		$	76	$	76
Accrued income and other assets	—	—		103		103		—	$	118	51		169
Total assets on a nonrecurring basis at fair value	—	$	—	$	192	$	192	—	$	118	$	127	$	245

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)
Collateral-dependent loans	When a loan is collateral-dependent, the fair value of the loan is determined based on the fair value of the underlying collateral.	Level 3
Commercial loans and student loans held for sale	Through a quarterly analysis of our loan portfolios held for sale, which include both performing and nonperforming commercial loans and student loans, we determine any adjustments necessary to record the portfolios at the lower of cost or fair value in accordance with GAAP. Valuation inputs include: • Non-binding bids for the respective loans or similar loans • Recent sales transactions • Internal models that emulate recent securitizations	Level 2 and 3
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(a)	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(a)	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, 2020, and December 31, 2019, the carrying amount of equity investments under this method was $158 million and $134 million, respectively. No impairment was recorded for the three or nine months ended September 30, 2020.	Level 3
Mortgage Servicing Assets(a)	Refer to Note 8. Mortgage Servicing Assets	Level 3

(a)Asset classes included in “Accrued income and other assets” on the Consolidated Balance Sheets

Quantitative Information about Level 3 Fair Value Measurements

The range and weighted-average of the significant unobservable inputs used to fair value our material Level 3

recurring and nonrecurring assets at September 30, 2020, and December 31, 2019, along with the valuation

techniques used, are shown in the following table:

	Level 3 Asset (Liability)				Valuation  Technique	Significant Unobservable Input	Range (Weighted-Average) (b), (c)
dollars in millions	September 30, 2020		December 31, 2019				September 30, 2020	December 31, 2019
Recurring
Trading account assets:
Other mortgage-backed securities	$	27	$	—	Discounted cash flows	Discount rate	3.10% - 4.11% (3.25%)	N/A
						Conditional prepayment rate	N/A (9.00)	N/A
						Constant default rate	N/A (0.75)	N/A
						Loss severity	N/A (50.00%)	N/A
Securities available-for-sale:
Other securities	$	12	11		Discounted cash flows	Discount rate	N/A (15.09%)	N/A (16.10%)
						Marketability discount	N/A (30.00%)	N/A (30.00%)
						Volatility factor	N/A (44.00%)	N/A (43.00%)
Other investments:(a)
Equity investments
Direct	12		12		Discounted cash flows	Discount rate	13.39 - 16.42% (14.93%)	13.91 - 17.24% (15.61%)
						Marketability discount	N/A (30.00%)	N/A (30.00%)
						Volatility factor	N/A (55.00%)	N/A (47.00%)
Loans held for sale (residential)	1		—		Market comparable pricing	Comparability factor	N/A (91.38%)	N/A
Loans, net of unearned income (residential)	8		4		Market comparable pricing	Comparability factor	79.00-98.37% (94.73%)	79.00 - 98.00% (91.05%)
Derivative instruments:
Interest rate	81		22		Discounted cash flows	Probability of default	.02 - 100% (11.50%)	.02 - 100% (5.40%)
						Internal risk rating	1 - 19 (9.284)	1 - 19 (9.168)
						Loss given default	0 - 1 (.471)	0 - 1 (.492)
Credit (assets)	2		1		Discounted cash flows	Probability of default	.02 - 100% (8.20%)	.02 - 100% (4.2%)
						Internal risk rating	1 - 19 (10.581)	1 - 19 (10.13)
						Loss given default	0 - 1 (.490)	0 - 1 (.498)
Credit (liabilities)	(15)		(9)		Discounted cash flows	Probability of default	.02 - 100% (16.08%)	.02 - 100% (12.24%)
						Internal risk rating	1 - 19 (7.980)	1 - 19 (8.058)
						Loss given default	0 - 1 (.397)	0 - 1 (.411)
Other(d)	44		5		Discounted cash flows	Loan closing rates	29.12 - 99.69 % (76.23%)	37.71 - 99.69% (79.33%)
Nonrecurring
Collateral-dependent loans	89		76		Fair value of collateral	Discount rate	0 - 95.00% (26.00%)	0 - 60.00% (10.00%)
Accrued income and other assets:
OREO and other Level 3 assets (e)	2		5		Appraised value	Appraised value	N/M	N/M

(a)Principal investments, direct is excluded from this table as the balance at September 30, 2020, and December 31, 2019, is insignificant (less than $1 million).

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

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

(d)Amounts represent interest rate lock commitments.

(e)Excludes $101 million and $46 million pertaining to mortgage servicing assets at September 30, 2020, and December 31, 2019, respectively. Refer to Note 8 (“Mortgage Servicing Assets”) for significant unobservable inputs pertaining to these assets.

Fair Value Disclosures of Financial Instruments

The Levels in the fair value hierarchy ascribed to our financial instruments and the related carrying amounts at September 30, 2020, and December 31, 2019, are shown in the following tables. Assets and liabilities are further arranged by measurement category.

	September 30, 2020
			Fair Value
in millions	Carrying Amount		Level 1		Level 2		Level 3		Measured at NAV		Netting Adjustment			Total
ASSETS (by measurement category)
Fair value - net income
Trading account assets (b)	733		$	1	705		$	27	—		—			733
Other investments (b)	620		—		—		552		$	68	—			620
Loans, net of unearned income (residential) (d)	8		—		—		8		—		—			8
Loans held for sale (residential) (b)	288		—		287		1		—		—			288
Derivative assets - trading (b)	1,841		56		2,182		127		—		$	(524)	(f)	1,841
Fair value - OCI
Securities available for sale (b)	26,895		—		26,883		$	12	—		—			26,895
Derivative assets - hedging (b)(g)	105		—		71		—		—		34		(f)	105
Amortized cost
Held-to-maturity securities (c)	8,384		—		8,842		—		—		—			8,842
Loans, net of unearned income (d)	101,343		—		—		99,826		—		—			99,826
Loans held for sale (b)	1,436		—		—		1,436		—		—			1,436
Other
Short-term investments - U.S. Treasury Bills (b)	$	1,000	—		$	1,000	—		—		—			$	1,000
Cash and other short-term investments (a)	14,104		14,104		—		—		—		—			14,104
LIABILITIES (by measurement category)
Fair value - net income
Derivative liabilities - trading (b)	$	166	$	51	$	775	15		—		$	(675)	(f)	$	166
Fair value - OCI
Derivative liabilities - hedging (b)(g)	2		—		6		—		—		(4)		(f)	2
Amortized cost
Time deposits (e)	6,795		—		6,826		—		—		—			6,826
Short-term borrowings (a)	1,031		289		742		—		—		—			1,031
Long-term debt (e)	12,685		12,852		733		—		—		—			13,585
Other
Deposits with no stated maturity (a)	129,951		—		129,951		—		—		—			129,951

	December 31, 2019
			Fair Value
in millions	Carrying Amount		Level 1		Level 2		Level 3		Measured at NAV		Netting Adjustment			Total
ASSETS (by measurement category)
Fair value - net income
Trading account assets (b)	$	1,040	—		$	1,040	—		—		—			$	1,040
Other investments (b)	605		—		—		$	528	$	77	—			605
Loans, net of unearned income (residential) (d)	4		—		—		4		—		—			4
Loans held for sale (residential) (b)	140		—		140		—		—		—			140
Derivative assets - trading (b)	715		$	49	985		28		—		$	(347)	(f)	715
Fair value - OCI
Securities available for sale (b)	21,843		—		21,832		11		—		—			21,843
Derivative assets - hedging (b)(g)	65		—		191		—		—		(126)		(f)	65
Amortized cost
Held-to-maturity securities (c)	10,067		—		10,116		—		—		—			10,116
Loans, net of unearned income (d)	93,742		—		—		92,641		—		—			92,641
Loans held for sale (b)	1,194		—		—		1,194		—		—			1,194
Other
Short-term investments - U.S. Treasury Bills (b)	—		—		—		—		—		—			—
Cash and other short-term investments (a)	2,004		2,004		—		—		—		—			2,004
LIABILITIES (by measurement category)
Fair value - net income
Derivative liabilities - trading (b)	$	194	$	43	$	461	9		—		$	(319)	(f)	$	194
Fair value - OCI
Derivative liabilities - hedging (b)(g)	4		—		20		—		—		(16)		(f)	4
Amortized cost
Time deposits (e)	11,652		—		11,752		—		—		—			11,752
Short-term borrowings (a)	1,092		19		1,073		—		—		—			1,092
Long-term debt (e)	12,448		12,694		249		—		—		—			12,943
Other
Deposits with no stated maturity (a)	100,218		—		100,218		—		—		—			100,218

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 105 of our 2019 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 $701 million ($593 million at fair value) at September 30, 2020, and $855 million ($729 million at fair value) at December 31, 2019;

•Portfolio loans at fair value of $2 million at September 30, 2020, and $2 million at December 31, 2019.

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

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Securities

9 Months Ended

Sep. 30, 2020

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, 2020								December 31, 2019
in millions	Amortized Cost (a)		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
SECURITIES AVAILABLE FOR SALE
U.S. Treasury, agencies, and corporations	$	4,463	$	1	—		$	4,464	$	334	—		—		$	334
States and political subdivisions	3		—		—		3		4		—		—		4
Agency residential collateralized mortgage obligations	13,403		336		$	7	13,732		12,772		$	82	$	71	12,783
Agency residential mortgage-backed securities	1,256		71		1		1,326		1,677		41		4		1,714
Agency commercial mortgage-backed securities	6,921		442		5		7,358		6,898		139		40		6,997
Other securities	8		4		—		12		7		4		—		11
Total securities available for sale	$	26,054	$	854	$	13	$	26,895	$	21,692	$	266	$	115	$	21,843
HELD-TO-MATURITY SECURITIES
Agency residential collateralized mortgage obligations	$	4,308	$	141	—		$	4,449	$	5,692	$	23	$	49	$	5,666
Agency residential mortgage-backed securities	313		11		—		324		409		6		—		415
Agency commercial mortgage-backed securities	3,726		306		—		4,032		3,940		78		9		4,009
Asset-backed securities	22		—		—		22		11		—		—		11
Other securities	15		—		—		15		15		—		—		15
Total held-to-maturity securities	$	8,384	$	458	—		$	8,842	$	10,067	$	107	$	58	$	10,116

(a)Amortized cost amounts exclude accrued interest receivable which is recorded within “other assets” on the balance sheet. At September 30, 2020, accrued interest receivable on available for sale securities and held-to-maturity securities totaled $39 million and $17 million, respectively.

The following table summarizes available for sale securities in an unrealized loss position for which an allowance for credit losses has not been recorded as of September 30, 2020, and December 31, 2019.

	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, 2020
Securities available for sale:
Agency residential collateralized mortgage obligations	$	1,453	7			—		—			$	1,453	$	7
Agency residential mortgage-backed securities	7		1			$	5	—		(a)	12		1
Agency commercial mortgage-backed securities	764		5			—		—			764		5
Held-to-maturity securities:
Agency residential collateralized mortgage obligations	—		—			29		—		(a)	29		—
Asset-backed securities	1		—		(a)	—		—			1		—
Other securities	8		—		(a)	—		—			8		—
Total securities in an unrealized loss position	$	2,233	13			$	34	—			$	2,267	$	13
December 31, 2019
Securities available for sale:
U.S. Treasury, agencies, and corporations	$	30	—		(b)	$	30	—		(b)	$	60	—
Agency residential collateralized mortgage obligations	3,432		$	20		3,221		$	51		6,653		$	71
Agency residential mortgage-backed securities	33		—		(b)	629		4			662		4
Agency commercial mortgage-backed securities	1,541		17			1,213		23			2,754		40
Held-to-maturity securities:
Agency residential collateralized mortgage obligations	1,626		14			2,289		35			3,915		49
Agency residential mortgage-backed securities	56		—		(b)	—		—			56		—
Agency commercial mortgage-backed securities	518		9			—		—			518		9
Asset-backed securities	11		—		(b)	—		—			11		—
Other securities	3		—		(b)	—		—			3		—
Total securities in an unrealized loss position	$	7,250	$	60		$	7,382	$	113		$	14,632	$	173

(a)At September 30, 2020, gross unrealized losses totaled less than $1 million for asset-backed securities and other securities held-to-maturity with a loss duration of less than 12 months. At September 30, 2020, gross unrealized losses totaled less than $1 million for agency residential mortgage-backed securities available for sale with a loss duration greater than 12 months or longer. At September 30, 2020, gross unrealized losses totaled less than $1 million for agency residential collateralized mortgage obligations held-to-maturity with a loss duration greater than 12 months or longer.

(b)At December 31, 2019, gross unrealized losses totaled less than $1 million for U.S. Treasury, agencies, and corporations and agency residential mortgage-backed securities available for sale with a loss duration of less than 12 months. At December 31, 2019, gross unrealized losses totaled less than $1 million for U.S. Treasury, Agencies, and Corporations securities available for sale with a loss duration greater than 12 months or longer. At December 31, 2019, gross unrealized losses totaled less than $1 million for agency residential mortgage-backed securities, asset-backed securities, and other securities held-to-maturity with a loss duration of less than 12 months.

Based on our evaluation at September 30, 2020, under the new impairment model, an allowance for credit losses has not been recorded nor have unrealized losses been recognized into income. The issuers of the securities are of high credit quality and have a long history of no credit losses, management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely attributed to changes in interest rates and other market conditions. The issuers continue to make timely principal and interest payments.

At September 30, 2020, securities available for sale and held-to-maturity securities totaling $12.5 billion were pledged to secure securities sold under repurchase agreements, to secure public and trust deposits, to facilitate access to secured funding, and for other purposes required or permitted by law.

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

September 30, 2020	Securities Available for Sale				Held to Maturity Securities
in millions	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	5,125	$	5,134	$	102	$	104
Due after one through five years	14,883		15,439		5,649		5,880
Due after five through ten years	5,608		5,887		2,620		2,845
Due after ten years	438		435		13		13
Total	$	26,054	$	26,895	$	8,384	$	8,842

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Derivatives and Hedging Activities

9 Months Ended

Sep. 30, 2020

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, 2020, after taking into account the effects of bilateral collateral and master netting agreements, we had $105 million of derivative assets and $2 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 $1.8 billion and derivative liabilities of $166 million that were not designated as hedging instruments. These positions are primarily comprised of derivative contracts entered into for client accommodation purposes.

Additional information regarding our accounting policies for derivatives is provided in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Derivatives and Hedging” beginning on page 105 of our 2019 Form 10-K. Our derivative strategies and related risk management objectives are described in Note 8 (“Derivatives and Hedging Activities”) beginning on page 134 of our 2019 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, 2020, and December 31, 2019. 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, 2020						December 31, 2019
			Fair Value						Fair Value
in millions	Notional Amount		Derivative Assets		Derivative Liabilities		Notional Amount		Derivative Assets		Derivative Liabilities
Derivatives designated as hedging instruments:
Interest rate	$	34,220	$	71	$	6	$	39,208	$	191	$	20
Derivatives not designated as hedging instruments:
Interest rate	75,507		1,756		300		71,209		772		233
Foreign exchange	5,879		74		68		6,572		67		60
Commodity	7,738		462		445		5,324		208		200
Credit	487		3		15		427		1		10
Other (a)	5,572		70		13		3,337		14		10
Total	95,183		2,365		841		86,869		1,062		513
Netting adjustments (b)	—		(490)		(679)		—		(473)		(335)
Net derivatives in the balance sheet	129,403		1,946		168		126,077		780		198
Other collateral (c)	—		(3)		(1)		—		(2)		(42)
Net derivative amounts	$	129,403	$	1,943	$	167	$	126,077	$	778	$	156

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

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

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

Fair value hedges. During the nine-month period ended September 30, 2020, 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, 2020, and December 31, 2019, related to cumulative basis adjustments for fair value hedges.

	September 30, 2020
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	$	8,255	$	492
	December 31, 2019
	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	$	8,408	$	240

(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 $8 million and $9 million at September 30, 2020, and December 31, 2019, respectively,

Cash flow hedges. During the nine-month period ended September 30, 2020, 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, 2020, we expect to reclassify an estimated $253 million of after-tax net gains on derivative instruments designated as cash flow hedges from AOCI to income during the next 12 months. In addition, we expect to reclassify approximately $74 million of net gains related to terminated cash flow hedges from AOCI to income during the next 12 months. As of September 30, 2020, the maximum length of time over which we hedge forecasted transactions is 9 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, 2020, and September 30, 2019.

	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, 2020
Total amounts presented in the consolidated statement of income	$	(64)	$	927	$	(54)	$	28
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	47		—		—		—
Recognized on derivatives designated as hedging instruments	(7)		—		—		—
Net income (expense) recognized on fair value hedges	$	40	—		—		—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	(1)	$	100	—		—
Net income (expense) recognized on cash flow hedges	$	(1)	$	100	—		—
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)	—		—

	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, 2020
Total amounts presented in the consolidated statement of income	$	(225)	$	2,933	$	(319)	$	(27)
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	(252)		—		—		—
Recognized on derivatives designated as hedging instruments	343		—		—		—
Net income (expense) recognized on fair value hedges	$	91	—		—		—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	(3)	$	224	—		—
Net income (expense) recognized on cash flow hedges	$	(3)	$	224	—		—
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)	—		—

Net investment hedges. We previously entered into foreign currency forward contracts to hedge our exposure to changes in the carrying value of our investments in foreign subsidiaries as a result of changes in the related foreign exchange rates. In December 2019, our last remaining net investment hedge was discontinued in connection with the substantial liquidation of the net assets of KEF’s Canadian subsidiary. Additional information regarding the discontinuance of this net investment hedge is provided in Note 8 (“Derivatives and Hedging Activities”) on page 137 of our 2019 Form 10-K.

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, 2020, and September 30, 2019, 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, 2020
Cash Flow Hedges
Interest rate	$	5	Interest income — Loans	$	100
Interest rate	—		Interest expense — Long-term debt	(1)
Interest rate	10		Investment banking and debt placement fees	—
Total	$	15		$	99
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)

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, 2020
Cash Flow Hedges
Interest rate	$	629	Interest income — Loans	$	224
Interest rate	(6)		Interest expense — Long-term debt	(3)
Interest rate	(10)		Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	—		Other Income	—
Total	$	613		$	221
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)

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, 2020, and September 30, 2019, and where they are recorded on the income statement.

	Three months ended September 30, 2020							Three months ended September 30, 2019
in millions	Corporate services income		Consumer mortgage income	Other income		Total		Corporate services income		Consumer mortgage income	Other income		Total
NET GAINS (LOSSES)
Interest rate	$	5	—	$	(1)	$	4	$	16	—	(1)		$	15
Foreign exchange	9		—	—		9		11		—	—		11
Commodity	5		—	—		5		2		—	—		2
Credit	4		—	(8)		(4)		(5)		—	$	(8)	(13)
Other	—		28	(8)		20		—		5	(3)		2
Total net gains (losses)	$	23	28	$	(17)	$	34	$	24	5	$	(12)	$	17

	Nine months ended September 30, 2020								Nine months ended September 30, 2019
in millions	Corporate services income		Consumer mortgage income		Other income		Total		Corporate services income		Consumer mortgage income		Other income		Total
NET GAINS (LOSSES)
Interest rate	$	23	$	—	$	(10)	$	13	$	31	—		$	(3)	$	28
Foreign exchange	29		—		—		29		32		—		—		32
Commodity	13		—		—		13		5		—		—		5
Credit	(6)		—		(20)		(26)		(4)		—		(23)		(27)
Other	—		36		17		53		—		$	5	—		5
Total net gains (losses)	$	59	$	36	$	(13)	$	82	$	64	$	5	$	(26)	$	43

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 $44 million was netted against derivative assets on the balance sheet at September 30, 2020, compared to $207 million of cash collateral netted against derivative assets at December 31, 2019. The cash collateral netted against derivative liabilities totaled $234 million at September 30, 2020, and $69 million at December 31, 2019. 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 138 of our 2019 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, 2020		December 31, 2019
Interest rate	$	1,680	$	848
Foreign exchange	28		30
Commodity	212		95
Credit	—		—
Other	70		14
Derivative assets before collateral	1,990		987
Less: Related collateral	44		207
Total derivative assets	$	1,946	$	780

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. These types of

transactions are primarily high dollar volume. We enter into bilateral collateral and master netting agreements with

these counterparties. We clear certain types of derivative transactions with these counterparties, whereby central

clearing organizations become the counterparties to our derivative contracts. In addition, we enter into derivative

contracts through swap execution facilities. Swap clearing and swap execution facilities reduce our exposure to

counterparty credit risk. At September 30, 2020, we had gross exposure of $411 million to broker-dealers and banks. We had net exposure of $260 million after the application of master netting agreements and cash collateral, where such qualifying agreements exist. We had net exposure of $257 million after considering $3 million of additional collateral held in the form of securities.

We enter into transactions using master netting agreements with clients to accommodate their business needs. In

most cases, we mitigate our credit exposure by cross-collateralizing these transactions to the underlying loan collateral. For transactions that are not clearable, we mitigate our market risk by buying and selling U.S. Treasuries and Eurodollar futures or entering into offsetting positions. Due to the cross-collateralization to the underlying loan, we typically do not exchange cash or marketable securities collateral in connection with these transactions. To address the risk of default associated with these contracts, we have established a CVA reserve (included in

“accrued income and other assets”) in the amount of $72 million at September 30, 2020. The CVA is calculated from

potential future exposures, expected recovery rates, and market-implied probabilities of default. At September 30, 2020, we had gross exposure of $1.9 billion 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 $1.7 billion 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 $12 million as of September 30, 2020, and $9 million as of December 31, 2019. Our credit derivative portfolio consists of 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 139 of our 2019 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, 2020, and December 31, 2019. The notional amount represents the amount that the seller could

be required to pay. The payment/performance risk shown in the table represents a weighted average of the default

probabilities for all reference entities in the respective portfolios. These default probabilities are implied from

observed credit indices in the credit default swap market, which are mapped to reference entities based on Key’s

internal risk rating.

	September 30, 2020					December 31, 2019
dollars in millions	Notional Amount		Average Term (Years)	Payment / Performance Risk		Notional Amount		Average Term (Years)	Payment / Performance Risk
Other	$	287	13.48	17.15	%	$	134	14.30	14.56	%
Total credit derivatives sold	$	287	—	—		$	134	—	—

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, 2020, 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, 2020, 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 $177 million, which was comprised of $108 million in derivative assets and $285 million in derivative liabilities. We had $175 million in cash and securities collateral posted to cover those positions as of September 30, 2020. There were no derivative contracts with credit risk contingent features held by KeyCorp at September 30, 2020.

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, 2020, and December 31, 2019. 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, 2020, and December 31, 2019, 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, 2020, and December 31, 2019. 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, 2020				December 31, 2019
in millions	Moody’s		S&P		Moody’s		S&P
KeyBank’s long-term senior unsecured credit ratings	A3		A-		A3		A-
One rating downgrade	$	1	$	1	$	1	$	1
Two rating downgrades	1		1		1		1
Three rating downgrades	1		1		1		1

KeyBank’s long-term senior unsecured credit rating was four ratings above noninvestment grade at Moody’s and S&P as of September 30, 2020, and December 31, 2019. If KeyBank’s ratings had been downgraded below investment grade as of September 30, 2020, or December 31, 2019, payments of $3 million and $3 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, 2020, or December 31, 2019, no payments would have been required to either terminate the contracts or post additional collateral for those contracts in a net liability position, taking into account all collateral already posted.

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Mortgage Servicing Assets

9 Months Ended

Sep. 30, 2020

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 2019 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	2020		2019		2020		2019
Balance at beginning of period	$	565	$	509	$	539	$	502
Servicing retained from loan sales	30		30		107		71
Purchases	6		10		24		33
Amortization	(29)		(29)		(88)		(86)
Temporary impairments	(6)		(2)		(16)		(2)
Balance at end of period	$	566	$	518	$	566	$	518
Fair value at end of period	$	685	$	681	$	685	$	681

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, 2020, and September 30, 2019, along with the valuation techniques, are shown in the following table: 

dollars in millions		September 30, 2020	September 30, 2019
Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Discounted cash flow	Expected defaults	1.00 - 2.00% (1.17%)	1.00 - 2.00% (1.13%)
	Residual cash flows discount rate	7.72 - 10.66% (9.30%)	7.00 - 11.50% (9.30%)
	Escrow earn rate	0.92 - 1.16% (1.05%)	1.46 - 2.36% (2.02%)
	Loan assumption rate	0.00 - 1.78% (1.39%)	0.01 - 3.37% (1.38%)

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 $154 million for the nine-month period ended September 30, 2020, and $147 million for the nine-month period ended September 30, 2019. This fee income was offset by $88 million of amortization for the nine-month period ended September 30, 2020, and $86 million for the nine-month period ended September 30, 2019. Both the contractual fee income and the amortization are recorded, net, in “commercial 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	2020		2019		2020		2019
Balance at beginning of period	$	46	$	39	$	46	$	37
Servicing retained from loan sales	12		5		25		9
Purchases	—		—		—		—
Amortization	(4)		(3)		(9)		(5)
Temporary (impairments) recoveries	(1)		—		(9)		—
Balance at end of period	$	53	$	41	$	53	$	41
Fair value at end of period	$	54	$	43	$	54	$	43

The fair value of mortgage servicing assets is determined by calculating the present value of future cash flows associated with servicing the loans. This calculation uses a number of assumptions that are based on current market conditions. The range and weighted-average of the significant unobservable inputs used to fair value our mortgage servicing assets at September 30, 2020, and September 30, 2019, along with the valuation techniques, are shown in the following table:

		September 30, 2020	September 30, 2019
Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Discounted cash flow	Prepayment speed	12.35% - 53.36% (16.89%)	12.06 - 62.96% (14.53%)
	Discount rate	7.51-8.80% (7.57%)	7.50 - 10.00% (7.53%)
	Servicing cost	$62.00 - $5,125 ($81.67)	$62 - $4,375 ($67.67)

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, 2020, 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 $24 million for the nine-month period ended September 30, 2020, and $15 million for the nine-month period ended September 30, 2019. This fee income was offset by $9 million of amortization for the nine-month period ended September 30, 2020, and $5 million for the nine-month period ended September 30, 2019. Both the contractual fee income and the amortization are recorded, net, in “consumer mortgage income” on the income statement.

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Leases

9 Months Ended

Sep. 30, 2020

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. For more information on our leasing activity, see Note 10 (“Leases”) beginning on page 143 of our 2019 Form 10-K.

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 income statement. 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:

	Three months ended September 30,				Nine months ended September 30,
in millions	2020		2019		2020		2019
Sales-type and direct financing leases
Interest income on lease receivable	$	36	$	31	$	91	$	92
Interest income related to accretion of unguaranteed residual asset	(7)		3		(1)		9
Interest income on deferred fees and costs	—		—		—		—
Total sales-type and direct financing lease income	29		34		90		101
Operating leases
Operating lease income related to lease payments	34		34		103		100
Other operating leasing gains	4		8		25		23
Total operating lease income and other leasing gains	38		42		128		123
Total lease income	$	67	$	76	$	218	$	224

In April 2020, the FASB provided elections under which entities can choose to account for eligible rent concessions either by applying the modification accounting in ASC 842 or by applying an expedient to account for them outside of the modification framework, thus, forgoing the performance of an assessment to determine whether contractual provisions in existing lease arrangements provide enforceable rights and obligations. Modification accounting may require remeasurement and reallocation of contract consideration. To be eligible for the expedient, rent concessions must relate to the COVID-19 pandemic and meet certain criteria. As a result of the pandemic, Key has begun providing lessees with 90 day deferrals on its equipment leases and has elected not to apply modification accounting. Rent concessions were not material at September 30, 2020.

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. For more information on our leasing activity, see Note 10 (“Leases”) beginning on page 143 of our 2019 Form 10-K.

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 income statement. 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:

	Three months ended September 30,				Nine months ended September 30,
in millions	2020		2019		2020		2019
Sales-type and direct financing leases
Interest income on lease receivable	$	36	$	31	$	91	$	92
Interest income related to accretion of unguaranteed residual asset	(7)		3		(1)		9
Interest income on deferred fees and costs	—		—		—		—
Total sales-type and direct financing lease income	29		34		90		101
Operating leases
Operating lease income related to lease payments	34		34		103		100
Other operating leasing gains	4		8		25		23
Total operating lease income and other leasing gains	38		42		128		123
Total lease income	$	67	$	76	$	218	$	224

In April 2020, the FASB provided elections under which entities can choose to account for eligible rent concessions either by applying the modification accounting in ASC 842 or by applying an expedient to account for them outside of the modification framework, thus, forgoing the performance of an assessment to determine whether contractual provisions in existing lease arrangements provide enforceable rights and obligations. Modification accounting may require remeasurement and reallocation of contract consideration. To be eligible for the expedient, rent concessions must relate to the COVID-19 pandemic and meet certain criteria. As a result of the pandemic, Key has begun providing lessees with 90 day deferrals on its equipment leases and has elected not to apply modification accounting. Rent concessions were not material at September 30, 2020.

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. For more information on our leasing activity, see Note 10 (“Leases”) beginning on page 143 of our 2019 Form 10-K.

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 income statement. 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:

	Three months ended September 30,				Nine months ended September 30,
in millions	2020		2019		2020		2019
Sales-type and direct financing leases
Interest income on lease receivable	$	36	$	31	$	91	$	92
Interest income related to accretion of unguaranteed residual asset	(7)		3		(1)		9
Interest income on deferred fees and costs	—		—		—		—
Total sales-type and direct financing lease income	29		34		90		101
Operating leases
Operating lease income related to lease payments	34		34		103		100
Other operating leasing gains	4		8		25		23
Total operating lease income and other leasing gains	38		42		128		123
Total lease income	$	67	$	76	$	218	$	224

In April 2020, the FASB provided elections under which entities can choose to account for eligible rent concessions either by applying the modification accounting in ASC 842 or by applying an expedient to account for them outside of the modification framework, thus, forgoing the performance of an assessment to determine whether contractual provisions in existing lease arrangements provide enforceable rights and obligations. Modification accounting may require remeasurement and reallocation of contract consideration. To be eligible for the expedient, rent concessions must relate to the COVID-19 pandemic and meet certain criteria. As a result of the pandemic, Key has begun providing lessees with 90 day deferrals on its equipment leases and has elected not to apply modification accounting. Rent concessions were not material at September 30, 2020.

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. For more information on our leasing activity, see Note 10 (“Leases”) beginning on page 143 of our 2019 Form 10-K.

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 income statement. 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:

	Three months ended September 30,				Nine months ended September 30,
in millions	2020		2019		2020		2019
Sales-type and direct financing leases
Interest income on lease receivable	$	36	$	31	$	91	$	92
Interest income related to accretion of unguaranteed residual asset	(7)		3		(1)		9
Interest income on deferred fees and costs	—		—		—		—
Total sales-type and direct financing lease income	29		34		90		101
Operating leases
Operating lease income related to lease payments	34		34		103		100
Other operating leasing gains	4		8		25		23
Total operating lease income and other leasing gains	38		42		128		123
Total lease income	$	67	$	76	$	218	$	224

In April 2020, the FASB provided elections under which entities can choose to account for eligible rent concessions either by applying the modification accounting in ASC 842 or by applying an expedient to account for them outside of the modification framework, thus, forgoing the performance of an assessment to determine whether contractual provisions in existing lease arrangements provide enforceable rights and obligations. Modification accounting may require remeasurement and reallocation of contract consideration. To be eligible for the expedient, rent concessions must relate to the COVID-19 pandemic and meet certain criteria. As a result of the pandemic, Key has begun providing lessees with 90 day deferrals on its equipment leases and has elected not to apply modification accounting. Rent concessions were not material at September 30, 2020.

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. For more information on our leasing activity, see Note 10 (“Leases”) beginning on page 143 of our 2019 Form 10-K.

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 income statement. 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:

	Three months ended September 30,				Nine months ended September 30,
in millions	2020		2019		2020		2019
Sales-type and direct financing leases
Interest income on lease receivable	$	36	$	31	$	91	$	92
Interest income related to accretion of unguaranteed residual asset	(7)		3		(1)		9
Interest income on deferred fees and costs	—		—		—		—
Total sales-type and direct financing lease income	29		34		90		101
Operating leases
Operating lease income related to lease payments	34		34		103		100
Other operating leasing gains	4		8		25		23
Total operating lease income and other leasing gains	38		42		128		123
Total lease income	$	67	$	76	$	218	$	224

In April 2020, the FASB provided elections under which entities can choose to account for eligible rent concessions either by applying the modification accounting in ASC 842 or by applying an expedient to account for them outside of the modification framework, thus, forgoing the performance of an assessment to determine whether contractual provisions in existing lease arrangements provide enforceable rights and obligations. Modification accounting may require remeasurement and reallocation of contract consideration. To be eligible for the expedient, rent concessions must relate to the COVID-19 pandemic and meet certain criteria. As a result of the pandemic, Key has begun providing lessees with 90 day deferrals on its equipment leases and has elected not to apply modification accounting. Rent concessions were not material at September 30, 2020.

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Goodwill

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

10. Goodwill

Our annual goodwill impairment testing is performed as of October 1 each year, or more frequently as events occur or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying amount. Additional information pertaining to our accounting policy for goodwill and other intangible assets is summarized in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Goodwill and Other Intangible Assets” beginning on page 145 of our 2019 Form 10-K.

Due to continued deterioration in the market and length of disruption resulting from the COVID-19 pandemic, which impacted Key’s market capitalization, we determined a triggering event occurred in the three months ended September 30, 2020. We conducted a quantitative interim impairment test as of September 30, 2020, and concluded goodwill was not impaired.

Through the quantitative interim impairment test as of September 30, 2020, we determined that the estimated fair value of each of Key’s reporting units was greater than its carrying amount. The estimated fair value of the Consumer Bank reporting unit was 11% greater than its carrying amount, the estimated fair value of the Commercial Bank reporting unit was 17% greater than its carrying amount, and the estimated fair value of the Institutional Bank reporting unit, which is aggregated in the Commercial Bank reporting segment, was 11% greater than its carrying amount. The fair values of each reporting unit were estimated using a combination of income and market approaches. The income approach, which was weighted at 75%, utilized discounted cash flow projections for each reporting unit. The market approach, which was weighted at 25%, consisted primarily of public company metrics but also considered recent transactions in the financial services industry. The carrying amounts of Key’s reporting units represent the average equity based on risk-weighted regulatory capital for goodwill impairment testing and management reporting purposes.

We will continue to monitor and review for impairment indicators that could impact goodwill.

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Variable Interest Entities

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Variable Interest Entities

11. 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 13 (“Variable Interest Entities “) beginning on page 146 of our 2019 Form 10-K.

LIHTC investments. We had $1.4 billion and $1.5 billion of investments in LIHTC operating partnerships at September 30, 2020, and December 31, 2019, 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, 2020, and December 31, 2019, we had liabilities of $477 million and $546 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, 2020, and December 31, 2019. 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 13 (“Variable Interest Entities”) beginning on page 146 of our 2019 Form 10-K.

	Unconsolidated VIEs
in millions	Total Assets		Total Liabilities		Maximum Exposure to Loss
September 30, 2020
LIHTC investments	$	6,693	$	2,547	$	1,820
December 31, 2019
LIHTC investments	$	6,405	$	2,526	$	1,846

We amortize our LIHTC investments over the period that we expect to receive the tax benefits. During the first nine months of 2020, we recognized $146 million of amortization and $134 million of tax credits associated with these investments within “income taxes” on our income statement. 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.

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 $60 million and $68 million at September 30, 2020, and December 31, 2019, 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, 2020, and December 31, 2019.

	Unconsolidated VIEs
in millions	Total Assets		Total Liabilities		Maximum Exposure to Loss
September 30, 2020
Indirect investments	$	11,225	$	173	$	78
December 31, 2019
Indirect investments	$	12,954	$	205	$	89

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, 2020, and December 31, 2019, that can be used to settle the entities’ obligations. The entities had no liabilities at September 30, 2020, and December 31, 2019, 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 13 (“Variable Interest Entities “) beginning on page 146 of our 2019 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 $335 million at September 30, 2020, and $282 million at December 31, 2019. 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 $1 million and $1 million associated with these unconsolidated VIEs at September 30, 2020, and December 31, 2019, respectively. Additional information pertaining to our other unconsolidated VIEs is included in Note 13 (“Variable Interest Entities“) under the heading “Other unconsolidated VIEs” on page 148 of our 2019 Form 10-K.

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Income Taxes

9 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

12. 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 12.5% for the third quarter of 2020 and 14.5% for the third quarter of 2019. 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 Taxes

At September 30, 2020, we had a net deferred tax liability of $110 million, compared to a net deferred tax liability of $89 million at December 31, 2019, 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 no valuation allowance at September 30, 2020, and December 31, 2019.

Unrecognized Tax Benefits

At September 30, 2020, Key’s unrecognized tax benefits were $58 million. 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.”

Pre-1988 Bank Reserves Acquired in a Business Combination

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

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Acquisitions and Discontinued Operations

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Acquisitions and Discontinued Operations

13. Acquisition and Discontinued Operations

Acquisition

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. As a result of the acquisition, we recognized identifiable intangible assets with a fair value of $37 million and goodwill of $148 million. The valuation of the acquired assets and liabilities of Laurel Road was final at June 30, 2020.

Discontinued operations

Discontinued operations primarily includes our government-guaranteed and private education lending business. At September 30, 2020, and December 31, 2019, approximately $743 million and $865 million, respectively, of education loans are included in discontinued assets on the consolidated balance sheets. Net interest income after provision for credit losses for this business is not material and is included in income (loss) from discontinued operations, net of taxes on the consolidated statements of income.

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Securities Financing Activities

9 Months Ended

Sep. 30, 2020

Banking and Thrift, Other Disclosures [Abstract]

Securities Financing Activities

14. 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 151 of our 2019 Form 10-K.

The following table summarizes our securities financing agreements at September 30, 2020, and December 31, 2019:

	September 30, 2020							December 31, 2019
in millions	Gross Amount Presented in Balance Sheet		Netting Adjustments (a)		Collateral (b)		Net Amounts	Gross Amount Presented in Balance Sheet		Netting Adjustments (a)		Collateral (b)		Net Amounts
Offsetting of financial assets:
Reverse repurchase agreements	$	7	$	(7)	—		—	$	5	$	(5)	—		—
Total	$	7	$	(7)	—		—	$	5	$	(5)	—		—
Offsetting of financial liabilities:
Repurchase agreements (c)	$	213	$	(20)	$	(193)	—	$	187	$	(7)	$	(180)	—
Total	$	213	$	(20)	$	(193)	—	$	187	$	(7)	$	(180)	—

(a)Netting adjustments take into account the impact of master netting agreements that allow us to settle with a single counterparty on a net basis.

(b)These adjustments take into account the impact of bilateral collateral agreements that allow us to offset the net positions with the related collateral. The application of collateral cannot reduce the net position below zero. Therefore, excess collateral, if any, is not reflected above.

(c)Repurchase agreements are collateralized by mortgaged-backed agency securities and are contracted on an overnight or continuous basis.

As of September 30, 2020, the carrying amount of assets pledged as collateral against repurchase agreements totaled $396 million. Assets pledged as collateral are reported in “securities available for sale” and “held-to-maturity securities” on our balance sheet. At September 30, 2020, the liabilities associated with collateral pledged were solely comprised of customer sweep financing activity and had a carrying value of $193 million. The collateral pledged under customer sweep repurchase agreements is posted to a third-party custodian and cannot be sold or repledged by the secured party. The risk related to a decline in the market value of collateral pledged is minimal given the collateral's high credit quality and the overnight duration of the repurchase agreements.

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Employee Benefits

9 Months Ended

Sep. 30, 2020

Retirement Benefits [Abstract]

Employee Benefits

15. 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 18 (“Employee Benefits”) beginning on page 155 of our 2019 Form 10-K.

	Three months ended September 30,				Nine months ended September 30,
in millions	2020		2019		2020		2019
Interest cost on PBO	$	9	$	11	$	26	$	34
Expected return on plan assets	(10)		(12)		(29)		(36)
Amortization of losses	5		4		13		11
Settlement loss	—		—		8		—
Net pension cost	$	4	$	3	$	18	$	9

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Trust Preferred Securities Issued by Unconsolidated Subsidiaries

9 Months Ended

Sep. 30, 2020

Banking and Thrift, Other Disclosures [Abstract]

Trust Preferred Securities Issued by Unconsolidated Subsidiaries

16. 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, 2020
KeyCorp Capital I	$	156	$	6	$	162	1.036	%	2028
KeyCorp Capital II	112		4		116		6.875		2029
KeyCorp Capital III	148		4		152		7.750		2029
HNC Statutory Trust III	19		1		20		1.656		2035
Willow Grove Statutory Trust I	19		1		20		1.560		2036
HNC Statutory Trust IV	17		1		18		1.548		2037
Westbank Capital Trust II	8		—		8		2.417		2034
Westbank Capital Trust III	8		—		8		2.417		2034
Total	$	487	$	17	$	504	4.528	%	—
December 31, 2019	$	466	$	17	$	483	5.214	%	—

(a)The trust preferred securities must be redeemed when the related debentures mature, or earlier if provided in the governing indenture. Each issue of trust preferred securities carries an interest rate identical to that of the related debenture. Certain trust preferred securities include basis adjustments related to fair value hedges totaling $75 million at September 30, 2020, and $57 million at December 31, 2019. See Note 7 (“Derivatives and Hedging Activities”) for an explanation of fair value hedges.

(b)We have the right to redeem these debentures. If the debentures purchased by KeyCorp Capital I, HNC Statutory Trust III, Willow Grove Statutory Trust I, HNC Statutory Trust IV, Westbank Capital Trust II, or Westbank Capital Trust III are redeemed before they mature, the redemption price will be the principal amount, plus any accrued but unpaid interest. If the debentures purchased by KeyCorp Capital II or KeyCorp Capital III are redeemed before they mature, the redemption price will be the greater of: (i) the principal amount, plus any accrued but unpaid interest, or (ii) the sum of the present values of principal and interest payments discounted at the Treasury Rate (as defined in the applicable indenture), plus 20 basis points for KeyCorp Capital II or 25 basis points for KeyCorp Capital III, or 50 basis points in the case of redemption upon either a tax or a capital treatment event for either KeyCorp Capital II or KeyCorp Capital III, plus any accrued but unpaid interest. The principal amount of certain debentures includes basis adjustments related to fair value hedges totaling $75 million at September 30, 2020, and $57 million at December 31, 2019. See Note 7 (“Derivatives and Hedging Activities”) for an explanation of fair value hedges. The principal amount of debentures, net of discounts, is included in “long-term debt” on the balance sheet.

(c)The interest rates for the trust preferred securities issued by KeyCorp Capital II and KeyCorp Capital III are fixed. The trust preferred securities issued by KeyCorp Capital I have a floating interest rate, equal to three-month LIBOR plus 74 basis points, that reprices quarterly. The trust preferred securities issued by HNC Statutory Trust III have a floating interest rate, equal to three-month LIBOR plus 140 basis points, that reprices quarterly. The trust preferred securities issued by Willow Grove Statutory Trust I have a floating interest rate, equal to three-month LIBOR plus 131 basis points, that reprices quarterly. The trust preferred securities issued by HNC Statutory Trust IV have a floating interest rate, equal to three-month LIBOR plus 128 basis points, that reprices quarterly. The trust preferred securities issued by Westbank Capital Trust II and Westbank Capital Trust III each have a floating interest rate, equal to three-month LIBOR plus 219 basis points, that reprices quarterly.  The total interest rates are weighted-average rates.

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Contingent Liabilities and Guarantees

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Contingent Liabilities and Guarantees

17. 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, 2020. 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 “Contingencies and Guarantees” beginning on page 108 of our 2019 Form 10-K.

September 30, 2020	Maximum Potential Undiscounted Future Payments		Liability Recorded
in millions
Financial guarantees:
Standby letters of credit	$	3,107	$	72
Recourse agreement with FNMA	5,662		23
Residential mortgage reserve	2,280		9
Written put options (a)	3,284		63
Total	$	14,333	$	167

(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, 2020, is low. Information pertaining to the nature of each of the guarantees listed below is included in Note 22 (“Commitments, Contingent Liabilities, and Guarantees”) under the heading “Guarantees” beginning on page 165 of our 2019 Form 10-K.

Standby letters of credit. At September 30, 2020, our standby letters of credit had a remaining weighted-average life of 1.8 years, with remaining actual lives ranging from less than 1 year to as many as 14.2 years.

Recourse agreement with FNMA. At September 30, 2020, the outstanding commercial mortgage loans in this program had a weighted-average remaining term of 7.9 years, and the unpaid principal balance outstanding of loans sold by us as a participant was $18.8 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 30% of the principal balance of loans outstanding at September 30, 2020. FNMA delegates responsibility for originating, underwriting, and servicing mortgages, and we assume a limited portion of the risk of loss during the remaining term on each commercial mortgage loan that we sell to FNMA. We maintain a reserve for such potential losses in an amount that we believe approximates the fair value of our liability in addition to the expected credit loss for the guarantee as described in Note 4 (“Asset Quality“).

Residential Mortgage Banking. At September 30, 2020, the unpaid principal balance outstanding of loans sold by us in this program was $7.6 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 30% of the principal balance of loans outstanding at September 30, 2020. 

Our liability for estimated repurchase obligations on loans sold, which is included in other liabilities on our balance sheet, was $9 million at September 30, 2020. For more information on our residential mortgages, see Note 8 (“Mortgage Servicing Assets“).

Written put options. At September 30, 2020, 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 22 (“Commitments, Contingent Liabilities, and Guarantees”) under the heading “Other Off-Balance Sheet Risk” on page 168 of our 2019 Form 10-K.

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Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Accumulated Other Comprehensive Income

18. Accumulated Other Comprehensive Income

Our changes in AOCI for the three and nine months ended September 30, 2020, and September 30, 2019, 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, 2019	$	115	$	250	—		$	(339)	$	26
Other comprehensive income before reclassification, net of income taxes	530		467		—		(1)		996
Amounts reclassified from AOCI, net of income taxes (a)	(3)		(168)		—		16		(155)
Net current-period other comprehensive income, net of income taxes	527		299		—		15		841
Balance at September 30, 2020	$	642	$	549	—		$	(324)	$	867
Balance at June 30, 2020	$	650	$	613	—		$	(327)	$	936
Other comprehensive income before reclassification, net of income taxes	(8)		11		—		(1)		2
Amounts reclassified from AOCI, net of income taxes (a)	—		(75)		—		4		(71)
Net current-period other comprehensive income, net of income taxes	(8)		(64)		—		3		(69)
Balance at September 30, 2020	$	642	$	549	—		$	(324)	$	867
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

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

Our reclassifications out of AOCI for the three and nine months ended September 30, 2020, and September 30, 2019, are as follows:

	Three months ended September 30,				Affected Line Item in the Statement Where Net Income is Presented
in millions	2020		2019
Unrealized gains (losses) on available for sale securities
Realized gains	—		15		Other income
Realized losses	—		—		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	$	100	$	(8)	Interest income — Loans
Interest rate	(1)		(1)		Interest expense — Long-term debt
	99		(9)		Income (loss) from continuing operations before income taxes
	24		(3)		Income taxes
	$	75	(6)		Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(5)	$	(4)	Other expense
Settlement loss	—		—		Other expense
	(5)		(3)		Income (loss) from continuing operations before income taxes
	(1)		(1)		Income taxes
	$	(4)	$	(2)	Income (loss) from continuing operations

	Nine months ended September 30,				Affected Line Item in the Statement Where Net Income is Presented
in millions	2020		2019
Unrealized gains (losses) on available for sale securities
Realized gains	$	4	15		Other income
	4		15		Income (loss) from continuing operations before income taxes
	1		4		Income taxes
	$	3	11		Income (loss) from continuing operations
Unrealized gains (losses) on derivative financial instruments
Interest rate	$	224	$	(51)	Interest income — Loans
Interest rate	(3)		(2)		Interest expense — Long-term debt
	221		(53)		Income (loss) from continuing operations before income taxes
	53		(13)		Income taxes
	$	168	(40)		Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(13)	$	(11)	Other expense
Settlement loss	(8)		—		Other expense
Amortization of unrecognized prior service credit	—		1		Other expense
	(21)		(10)		Income (loss) from continuing operations before income taxes
	(5)		(3)		Income taxes
	$	(16)	$	(7)	Income (loss) from continuing operations

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Shareholders' Equity

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Shareholders' Equity

19. Shareholders' Equity

Comprehensive Capital Plan

Consistent with our 2020 capital plan, the Board declared a quarterly dividend of $.185 per Common Share for the third quarter of 2020. Per our announcement on March 17, 2020, share repurchase activity has been temporarily suspended in response to the COVID-19 pandemic.

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 2020 dividends paid per depositary share
Fixed-to-Floating Rate Perpetual Noncumulative Series D	$	525	21,000	$	1	$	25,000	1/25th	$	1,000	$	12.50
Fixed-to-Floating Rate Perpetual Noncumulative Series E	500		500,000	1		1,000		1/40th	25		.382813
Fixed Rate Perpetual Noncumulative Series F	425		425,000	1		1,000		1/40th	25		.353125
Fixed Rate Perpetual Non-Cumulative Series G	450		450,000	1		1,000		1/40th	25		.351563

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Business Segment Reporting

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Business Segment Reporting

20. Business Segment Reporting

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. 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, 2020, and September 30, 2019.

Three months ended September 30,	Consumer Bank						Commercial Bank						Other						Total Key
dollars in millions	2020			2019			2020			2019			2020			2019			2020			2019
SUMMARY OF OPERATIONS
Net interest income (TE)	$	604		$	595		$	421		$	399		$	(19)		$	(14)		$	1,006		$	980
Noninterest income	267			238			383			381			31			31			681			650
Total revenue (TE) (a)	871			833			804			780			12			17			1,687			1,630
Provision for credit losses	(16)			48			163			32			13			120			160			200
Depreciation and amortization expense	19			25			35			35			35			38			89			98
Other noninterest expense	552			504			408			343			(12)			(6)			948			841
Income (loss) from continuing operations before income taxes (TE)	316			256			198			370			(24)			(135)			490			491
Allocated income taxes and TE adjustments	75			60			38			69			(47)			(51)			66			78
Income (loss) from continuing operations	241			196			160			301			23			(84)			424			413
Income (loss) from discontinued operations, net of taxes	—			—			—			—			4			3			4			3
Net income (loss)	241			196			160			301			27			(81)			428			416
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—			—			—			—			—
Net income (loss) attributable to Key	$	241		$	196		$	160		$	301		$	27		$	(81)		$	428		$	416
AVERAGE BALANCES (b)
Loans and leases	$	41,471		$	32,760		$	62,925		$	58,215		$	523		$	981		$	104,919		$	91,956
Total assets (a)	44,888			36,397			72,613			66,549			51,310			41,212			168,811			144,158
Deposits	83,175			72,995			51,238			36,204			531			1,080			134,944			110,279
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	23		$	40		$	104		$	35		$	—		$	122		$	127		$	197
Return on average allocated equity (b)	27.03		%	23.22		%	12.57		%	26.18		%	1.00		%	(3.62)		%	9.51		%	9.57		%
Return on average allocated equity	27.03			23.22			12.57			26.18			1.18			(3.49)			9.60			9.64
Average full-time equivalent employees (c)	8,350			8,458			2,112			2,226			6,635			6,214			17,097			16,898

(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.

Nine months ended September 30,	Consumer Bank						Commercial Bank						Other							Total Key
dollars in millions	2020			2019			2020			2019			2020				2019			2020			2019
SUMMARY OF OPERATIONS
Net interest income (TE)	$	1,788		$	1,780		$	1,285		$	1,206		$	(53)			$	(32)		$	3,020		$	2,954
Noninterest income	745			683			1,007			1,035			98				90			1,850			1,808
Total revenue (TE) (a)	2,533			2,463			2,292			2,241			45				58			4,870			4,762
Provision for credit losses	291			133			696			80			14				123			1,001			336
Depreciation and amortization expense	59			71			108			100			105				112			272			283
Other noninterest expense	1,610			1,547			1,131			1,051			(32)				40			2,709			2,638
Income (loss) from continuing operations before income taxes (TE)	573			712			357			1,010			(42)				(217)			888			1,505
Allocated income taxes and TE adjustments	136			169			32			190			(34)				(96)			134			263
Income (loss) from continuing operations	437			543			325			820			(8)				(121)			754			1,242
Income (loss) from discontinued operations, net of taxes	—			—			—			—			7				6			7			6
Net income (loss)	437			543			325			820			(1)				(115)			761			1,248
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—			—				—			—			—
Net income (loss) attributable to Key	$	437		$	543		$	325		$	820		$	(1)		(d)	$	(115)		$	761		$	1,248
AVERAGE BALANCES (b)
Loans and leases	$	38,632		$	31,993		$	63,679		$	57,803		$	707			$	1,009		$	103,018		$	90,805
Total assets (a)	42,481			35,524			72,988			65,781			44,277				41,014			159,746			142,319
Deposits	78,682			72,201			45,082			35,534			691				1,427			124,455			109,162
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	106		$	114		$	201		$	88		1				124			$	308		$	326
Return on average allocated equity (b)	16.69		%	22.24		%	8.93		%	24.15		%	(.12)		%		(1.87)		%	5.74		%	10.09		%
Return on average allocated equity	16.69			22.24			8.93			24.15			(.01)				(1.78)			5.79			10.14
Average full-time equivalent employees (c)	8,198			8,682			2,092			2,285			6,468				6,250			16,758			17,217

(a)Substantially all revenue generated by our major business segments is derived from clients that reside in the United States. Substantially all long-lived assets, including premises and equipment, capitalized software, and goodwill held by our major business segments, are located in the United States.

(b)From continuing operations.

(c)The number of average full-time equivalent employees was not adjusted for discontinued operations.

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Revenue from Contracts with Customers

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

21. 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, 2020, and September 30, 2019.

	Three months ended September 30, 2020						Three months ended September 30, 2019
dollars in millions	Consumer Bank		Commercial Bank		Total Contract Revenue		Consumer Bank		Commercial Bank		Total Contract Revenue
NONINTEREST INCOME
Trust and investment services income	$	100	$	15	$	115	$	89	$	16	$	105
Investment banking and debt placement fees	—		69		69		—		78		78
Services charges on deposit accounts	45		32		77		59		27		86
Cards and payments income	43		69		112		42		27		69
Other noninterest income	3		—		3		3		—		3
Total revenue from contracts with customers	$	191	$	185	$	376	$	193	$	148	$	341
Other noninterest income (a)					$	274					$	278
Noninterest income from Other(b)					31						31
Total noninterest income					$	681					$	650

(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 20 (“Business Segment Reporting”) for more information.

	Nine months ended September 30, 2020						Nine months ended September 30, 2019
dollars in millions	Consumer Bank		Commercial Bank		Total Contract Revenue		Consumer Bank		Commercial Bank		Total Contract Revenue
NONINTEREST INCOME
Trust and investment services income	$	279	$	49	$	328	$	265	$	48	$	313
Investment banking and debt placement fees	—		176		176		—		188		188
Services charges on deposit accounts	138		91		229		169		82		251
Cards and payments income	118		147		265		123		81		204
Other noninterest income	7		—		7		10		—		10
Total revenue from contracts with customers	$	542	$	463	$	1,005	$	567	$	399	$	966
Other noninterest income (a)					$	747					$	752
Noninterest income from Other(b)					98						90
Total noninterest income					$	1,850					$	1,808

(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 20 (“Business Segment Reporting”) for more information.

We had no material contract assets or contract liabilities as of September 30, 2020, and September 30, 2019.

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Basis of Presentation and Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2020

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 11 (“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 2019 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.Effective July 1, 2020, Key amended its Accounting Policy for presentation of Short-Term Investments (page 104 of our 2019 Form 10-K) to include United States Treasury Bills with an original maturity of three months or less.

Accounting Guidance Adopted in 2020

Accounting Guidance Adopted in 2020

Measurement of Credit Losses on Financial Instruments (ASU 2016-13, ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11, ASU 2020-02, ASU 2020-03)

On January 1, 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred-loss methodology that recognized losses when a probable threshold was met with an expected-loss methodology, specifically, recognizing current expected credit losses (CECL) for the remaining life of the asset at the time of origination or acquisition. The CECL methodology applies to loans, debt securities, and other financial assets and net investment in leases measured at amortized cost. It also applies to off-balance sheet credit exposures (loan commitments, standby letters of credit, financial guarantees, and other similar instruments). Assets in the scope of ASC 326 are presented at the net amount expected to be collected after deducting the allowance for credit losses from the amortized cost basis of the assets.

ASC 326 also requires credit losses relating to available-for-sale debt securities that management does not intend to sell or believes that it is more likely than not they will be required to sell to be recorded through an allowance rather than a reduction of the carrying amount.

ASC 326 replaces the purchased credit impaired concept of accounting, previously required under Subtopic 310-30, with a purchased financial assets with credit deterioration (PCD) concept. In accordance with ASC 326, we did not reassess whether recognized purchased credit impaired loans met the criteria of a PCD loan and modifications to individual acquired loans accounted for in pools were TDRs as of the date of adoption. At adoption, we elected to not maintain the pools of loans previously accounted for under Subtopic 310-30.

The prospective application resulted in a $4 million adjustment to the amortized cost basis of PCD loans to reflect the addition to the allowance for loans and leases as of January 1, 2020. After the adjustment for the allowance for the loans and leases, the noncredit discount of $15 million will be accreted to interest income using the interest method based on the effective interest rate determined after the adjustment from credit losses as of January 1, 2020.

The ASU requires use of a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. Results for reporting periods beginning after January 1, 2020, are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. We posted an adjusting entry decreasing retained earnings as of January 1, 2020, by $230 million, net of deferred taxes of $71 million, for the cumulative effect of adopting ASC 326. The main drivers of the adjustment to retained earnings are summarized in the following table.

	Pre-ASC 326 Adoption		Impact of ASC 326 Adoption		As Reported Under ASC 326
in millions	December 31, 2019				January 1, 2020
Allowance for credit losses
Commercial
Commercial and industrial	$	551	$	(141)	$	410
Real estate — commercial mortgage	143		16		159
Real estate — construction	22		(7)		15
Commercial lease financing	35		8		43
Total commercial loans	751		(124)		627
Consumer
Real estate — residential mortgage	7		77		84
Home equity loans	31		147		178
Consumer direct loans	34		63		97
Credit cards	47		35		82
Consumer indirect loans	30		6		36
Total consumer loans	149		328		477
Total ALLL — continuing operations	900		204		1,104
Discontinued operations	10		31		41
Total ALLL	910		235		1,145
Accrued expense and other liabilities	75		70		145
Total allowance for credit losses	$	985	$	305	$	1,290

In conjunction with the adoption of ASC 326, the following are additional disclosures about our significant accounting policies related to CECL.

Allowance for Held-to-Maturity Securities

Debt securities that we have the intent and ability to hold until maturity are classified as held-to-maturity and are carried at cost and adjusted for amortization of premiums and accretion of discounts using the interest method. This method produces a constant rate of return on the adjusted carrying amount.

Management classifies the held-to-maturity portfolio into the following major security types: agency residential collateralized mortgage obligations, agency residential mortgage-backed securities, agency commercial mortgage-backed securities, asset backed securities, and other. Management measures expected credit losses on held-to-maturity securities on a collective basis by major security type. The estimate of expected losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. We do not measure expected credit losses on held-to-maturity securities in which historical credit loss information adjusted for current conditions and reasonable and supportable forecasts results in an expectation that nonpayment of the amortized cost basis is zero.

All of our mortgage-backed securities are issued by U.S. government-sponsored enterprises or GNMA, are highly rated by major rating agencies and have a long history of no credit losses. Other securities are comprised of State of Israel bonds denominated and paid in U.S. dollars. Israel bonds have a long history of no credit losses. Additionally, as of September 30, 2020, the State of Israel's credit rating remains "stable" among Fitch, Moody's, and S&P (A+, A1, AA-).

Allowance for Available-for-Sale Securities

Debt securities that we intend to hold for an indefinite period of time but that may be sold in response to changes in interest rates, prepayment risk, liquidity needs, or other factors are classified as available-for-sale and reported at fair value. Realized gains and losses resulting from sales of securities using the specific identification method are included in “other income” on the income statement. Unrealized gains and losses (net of income taxes) are recorded in equity as a component of AOCI.

For available-for-sale securities in an unrealized loss position, we first assess whether we intend to sell, or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of these criteria regarding intent or requirement to sell is met, the security's amortized cost basis is written down to fair value in “other income” on the income statement. For debt securities that do not meet the aforementioned criteria, we evaluate whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, nature of the security, the underlying collateral, and the financial condition of the issuer, among other factors. If this assessment indicates a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for available-for-sale securities is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for available-for-sale securities is recognized in other comprehensive income.

Changes in the allowance for available-for-sale securities are recorded as provision for (or reversal of) credit loss. Losses are charged against the allowance for available-for-sale securities when management believes the uncollectibility of an available-for-sale security is confirmed or when either criteria regarding intent or requirement to sell is met.

Loans

Accrued interest on loans is included in "other assets" on the balance sheet and is excluded from the calculation of the allowance for credit losses due to our charge-off policy to reverse accrued interest on nonperforming loans against interest income in a timely manner. We have not classified loans that receive a payment deferral or forbearance under a COVID-19 hardship relief program as nonperforming loans and continue to accrue and recognize interest income during the period of the deferral. We, therefore, recognize an allowance for credit losses for accrued interest receivable amounts that result from deferred payments under a COVID-19 hardship relief program because those amounts would not be considered to be written off in a timely manner. As of September 30, 2020, the allowance for credit losses on accrued interest receivable was immaterial.

Expected credit losses on net investments in leases, including any unguaranteed residual asset, are included in the ALLL.

Purchased Credit Deteriorated (PCD) Loans

In addition to originating loans, we also acquire loans through portfolio purchases or acquisitions of other financial services companies. Purchased loans that have evidence of more than insignificant credit deterioration since origination are deemed PCD loans. In accordance with ASC 326, we did not reassess whether recognized purchased credit impaired loans met the criteria of a PCD loan as of the date of adoption. PCD loans are initially recorded at fair value along with an allowance for credit losses determined using the same methodology as originated loans. The sum of the loan's purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses are recorded through provision for credit losses.

Nonperforming Loans

Nonperforming loans are loans for which we do not accrue interest income, and include commercial and consumer loans and leases, as well as current year TDRs and nonaccruing TDR loans from prior years. Nonperforming loans do not include loans held for sale. Once a loan is designated nonaccrual, the interest accrued but not collected is

reversed against interest income, and payments subsequently received are applied to principal until qualifying for return to accrual.

Allowance for Loan and Lease Losses

We estimate the ALLL using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The ALLL is measured on a collective (pool) basis when similar risk characteristics exist. Our portfolio segments include commercial and consumer. Each of these two segments comprises multiple loan classes. Classes are characterized by similarities in initial measurement, risk attributes, and the manner in which we monitor and assess credit risk. The commercial segment is composed of commercial and industrial, commercial real estate, and commercial lease financing loan classes. The consumer lending segment is composed of residential mortgage, home equity, consumer direct, credit card, and consumer indirect loan classes.

The ALLL represents our current estimate of lifetime credit losses inherent in our loan portfolio at the balance sheet date. In determining the ALLL, we estimate expected future losses for the loan's entire contractual term adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications.

The ALLL is the sum of three components: (i) asset specific/ individual loan reserves; (ii) quantitative (formulaic or pooled) reserves; and (iii) qualitative (judgmental) reserves.

Asset Specific / Individual Component

Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the collective evaluation. We have elected to apply the practical expedient to measure expected credit losses of a collateral dependent asset using the fair value of the collateral, less any costs to sell, when foreclosure is not probable, when repayment of the loan is expected to be provided substantially through the operation or sale of the collateral, and the borrower is experiencing financial difficulty.

Individual reserves are determined as follows:

•For commercial non-accruing loans greater than or equal to a defined dollar threshold, individual reserves are determined based on an analysis of the present value of the loan's expected future cash flows, the loan's observable market value, or the fair value of the collateral less costs to sell.

•For commercial non-accruing loans below the defined dollar threshold, an established LGD percentage is multiplied by the loan balance and the results are aggregated for purposes of measuring specific reserve impairment.

•The population of individually assessed consumer loans includes loans deemed collateral dependent, in addition to all TDRs. The expected loss for these loans is estimated based on the present value of the loan's expected future cash flows, except in instances where the loan is collateral dependent, in which case the loan is written down based on the collateral's fair market value less costs to sell.

Quantitative Component

We use a non-DCF factor-based approach to estimate expected credit losses that include component PD/LGD/EAD models as well as less complex estimation methods for smaller loan portfolios.

•PD: This component model is used to estimate the likelihood that a borrower will cease making payments as agreed. The major contributors to this are the borrower credit attributes and macro-economic trends. The objective of the PD model is to produce default likelihood forecasts based on the observed loan-level information and projected paths of macroeconomic variables.

•LGD: This component model is used to estimate the loss on a loan once a loan is in default.

•EAD: Estimates the loan balance at the time the borrower stops making payments. For all term loans, an amortization based formulaic approach is used for account level EAD estimates. We calculate EAD using a portfolio specific method in each of our revolving product portfolios. For line products that are unconditionally cancellable, the balances will either use a paydown curve or be held flat through the life of the loan.

Additional information about the critical estimates and judgments we make in developing these models is provided in the section “Allowance for loan and lease losses” under the heading “Critical Accounting Policies and Estimates” in Item 2 of this report.

Qualitative Component

The ALLL also includes identified qualitative factors related to idiosyncratic risk factors, changes in current economic conditions that may not be reflected in quantitatively derived results, and other relevant factors to ensure the ALLL reflects our best estimate of current expected credit losses.

While our reserve methodologies strive to reflect all relevant risk factors, there continues to be uncertainty associated with, but not limited to, potential imprecision in the estimation process due to the inherent time lag

of obtaining information and normal variations between estimates and actual outcomes. We provide additional reserves that are designed to provide coverage for losses attributable to such risks. The ALLL also includes factors that may not be directly measured in the determination of individual or collective reserves. Such qualitative factors may include:

•The nature and volume of the institution’s financial assets;

•The existence, growth, and effect of any concentrations of credit;

•The volume and severity of past due financial assets, the volume of nonaccrual assets, and the volume and severity of adversely classified or graded assets;

•The value of the underlying collateral for loans that are not collateral dependent;

•The institution’s lending policies and procedures, including changes in underwriting standards and practices for collections, write-offs, and recoveries;

•The quality of the institution’s credit review function;

•The experience, ability, and depth of the institution’s lending, investment, collection, and other relevant management and staff;

•The effect of other external factors such as the regulatory, legal and technological environments; competition; and events such as natural disasters; and

•Actual and expected changes in international, national, regional, and local economic and business conditions and developments in which the institution operates that affect the collectability of financial assets.

Liability for Credit Losses on Lending-Related Commitments

The liability for credit losses on lending-related commitments, such as letters of credit and unfunded loan commitments, is included in “accrued expense and other liabilities” on the balance sheet. Expected credit losses are estimated over the contractual period in which we are exposed to credit risk via a contractual obligation unless that obligation is unconditionally cancellable by us. The liability for credit losses on lending-related commitments is adjusted as a provision for credit losses. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated useful life. Consistent with our estimation process on our loan and lease portfolio, we use a non-DCF factor-based approach to estimate expected credit losses that include component PD/LGD/EAD models as well as less complex estimation methods for smaller portfolios.

Allowance for Credit Losses on Other Financial Assets

The allowance for credit losses on other financial assets, such as other receivables and servicing advances, is determined based on historical loss information and other available indicators. If such information does not indicate any expected credit losses, Key may estimate the allowance for credit losses on other financial assets to be zero or close to zero. As of September 30, 2020, the allowance for credit losses on other financial assets was immaterial.

Simplifying the Test for Goodwill Impairment (ASU 2017-04)

On January 1, 2020, we adopted ASU 2017-04. The ASU amends ASC Topic 350, Intangibles - Goodwill and Other and eliminates the second step of the test for goodwill impairment. Goodwill represents the amount by which the cost of net assets acquired in a business combination exceeds their fair value. Goodwill is assigned to reporting units as of the acquisition date based on the expected benefit to such reporting unit from the synergies of the business combination. Goodwill is not amortized. Goodwill is tested at the reporting unit level for impairment, at least annually as of October 1, or when indicators of impairment exist.

When indicators of impairment exist we may look to both quantitative and qualitative information to determine whether or not it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. Factors considered in the assessment include, but are not limited to, macroeconomic conditions, industry and market considerations, stock performance, financial performance of the reporting units, and previous results of goodwill impairment tests. When it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount a quantitative test is required. Under the new accounting guidance, the quantitative analysis requires the estimated fair value of each reporting unit to be compared to its carrying amount, including goodwill. If the estimated fair value of the reporting unit is less than its carrying value, an impairment charge would be recorded for the excess, not to exceed the amount of goodwill allocated to the reporting unit. The adoption of this accounting guidance must be applied prospectively and is not expected to have a material effect on our financial condition or results of operations. See Note 10 (“Goodwill”) for results of our interim goodwill impairment test.

Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04)

We adopted ASU 2020-04 on April 1, 2020. The amendments provide optional expedients and exceptions for certain contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of rate reform. The guidance is effective from the date of issuance until December 31, 2022. The guidance permits Key not to apply modification accounting or remeasure lease payments in lease contracts if the changes to the contract are related to the discontinuation of the reference rate. If certain criteria are met, the amendments also allow exceptions to the dedesignation criteria of the hedging relationship and the assessment of hedge effectiveness during the transition period. It also allows Key to make a one time election to sell, transfer, or both sell and transfer debt securities classified as held to maturity that reference a rate affected by reference rate reform and that are classified as held to maturity before January 1, 2020. This one time election may be made at any time after March 12, 2020, but no later than December 31, 2022. Key has not made a determination on whether it will make this election. At the time of adoption, the guidance did not have a significant impact on Key’s financial condition and results of operations. We will continue to assess the impact as the reference rate transition occurs over the next two years.

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Basis of Presentation and Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

The main drivers of the adjustment to retained earnings are summarized in the following table.

	Pre-ASC 326 Adoption		Impact of ASC 326 Adoption		As Reported Under ASC 326
in millions	December 31, 2019				January 1, 2020
Allowance for credit losses
Commercial
Commercial and industrial	$	551	$	(141)	$	410
Real estate — commercial mortgage	143		16		159
Real estate — construction	22		(7)		15
Commercial lease financing	35		8		43
Total commercial loans	751		(124)		627
Consumer
Real estate — residential mortgage	7		77		84
Home equity loans	31		147		178
Consumer direct loans	34		63		97
Credit cards	47		35		82
Consumer indirect loans	30		6		36
Total consumer loans	149		328		477
Total ALLL — continuing operations	900		204		1,104
Discontinued operations	10		31		41
Total ALLL	910		235		1,145
Accrued expense and other liabilities	75		70		145
Total allowance for credit losses	$	985	$	305	$	1,290

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Earnings Per Common Share (Tables)

9 Months Ended

Sep. 30, 2020

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	2020		2019		2020		2019
EARNINGS
Income (loss) from continuing operations	$	424	$	413	$	754	$	1,242
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		—
Income (loss) from continuing operations attributable to Key	424		413		754		1,242
Less: Dividends on Preferred Stock	27		30		80		70
Income (loss) from continuing operations attributable to Key common shareholders	397		383		674		1,172
Income (loss) from discontinued operations, net of taxes	4		3		7		6
Net income (loss) attributable to Key common shareholders	$	401	$	386	$	681	$	1,178
WEIGHTED-AVERAGE COMMON SHARES
Weighted-average Common Shares outstanding (000)	967,804		988,319		967,632		998,268
Effect of Common Share options and other stock awards	6,184		10,009		6,648		9,632
Weighted-average Common Shares and potential Common Shares outstanding (000) (a)	973,988		998,328		974,280		1,007,900
EARNINGS PER COMMON SHARE
Income (loss) from continuing operations attributable to Key common shareholders	$	.41	$	.39	$	.70	$	1.17
Income (loss) from discontinued operations, net of taxes	—		—		.01		.01
Net income (loss) attributable to Key common shareholders (b)	.41		.39		.70		1.18
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution	$	.41	$	.38	$	.69	$	1.16
Income (loss) from discontinued operations, net of taxes — assuming dilution	—		—		.01		.01
Net income (loss) attributable to Key common shareholders — assuming dilution (b)	.41		.39		.70		1.17

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

(b)EPS may not foot due to rounding.

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Loan Portfolio (Tables)

9 Months Ended

Sep. 30, 2020

Loans Receivables [Abstract]

Loans by Category

in millions	September 30, 2020		December 31, 2019
Commercial and industrial (b)	$	55,025	$	48,295
Commercial real estate:
Commercial mortgage	13,059		13,491
Construction	1,947		1,558
Total commercial real estate loans	15,006		15,049
Commercial lease financing (c)	4,450		4,688
Total commercial loans	74,481		68,032
Residential — prime loans:
Real estate — residential mortgage	8,715		7,023
Home equity loans	9,488		10,274
Total residential — prime loans	18,203		17,297
Consumer direct loans	4,395		3,513
Credit cards	970		1,130
Consumer indirect loans	5,032		4,674
Total consumer loans	28,600		26,614
Total loans (d)	$	103,081	$	94,646

(a)Accrued interest of $235 million and $244 million at September 30, 2020, and December 31, 2019, respectively, presented in "other assets" on the Consolidated Balance Sheets is excluded from the amortized cost basis disclosed in this table.

(b)Loan balances include $128 million and $144 million of commercial credit card balances at September 30, 2020, and December 31, 2019, respectively.

(c)Commercial lease financing includes receivables held as collateral for a secured borrowing of $18 million and $15 million at September 30, 2020, and December 31, 2019, respectively. Principal reductions are based on the cash payments received from these related receivables. Additional information pertaining to this secured borrowing is included in Note 20 (“Long-Term Debt”) beginning on page 163 of our 2019 Form 10-K.

(d)Total loans exclude loans of $743 million at September 30, 2020, and $865 million at December 31, 2019, related to the discontinued operations of the education lending business.

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Asset Quality (Tables)

9 Months Ended

Sep. 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 September 30, 2020:

in millions	June 30, 2020		Provision			Charge-offs		Recoveries		September 30, 2020
Commercial and Industrial	$	725	$	177		$	(101)	$	9	$	810
Commercial real estate:
Real estate — commercial mortgage	292		(2)			(13)		2		279
Real estate — construction	41		(7)			—		—		34
Total commercial real estate loans	333		(9)			(13)		2		313
Commercial lease financing	55		13			(10)		—		58
Total commercial loans	1,113		181			(124)		11		1,181
Real estate — residential mortgage	101		2			—		1		104
Home equity loans	197		(13)			(4)		3		183
Consumer direct loans	130		1			(8)		2		125
Credit cards	107		(5)			(9)		2		95
Consumer indirect loans	60		(16)			(6)		4		42
Total consumer loans	595		(31)			(27)		12		549
Total ALLL — continuing operations	1,708		150		(a)	(151)		23		1,730
Discontinued operations	43		(1)			—		—		42
Total ALLL — including discontinued operations	$	1,751	$	149		$	(151)	$	23	$	1,772

(a)Excludes a provision for losses on lending-related commitments of $10 million.

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.

Nine months ended September 30, 2020:

in millions	December 31, 2019		Impact of ASC 326 Adoption		January 1, 2020		Provision			Charge-offs		Recoveries		September 30, 2020
Commercial and Industrial	$	551	$	(141)	$	410	$	613		$	(232)	$	19	$	810
Commercial real estate:
Real estate — commercial mortgage	143		16		159		135			(18)		3		279
Real estate — construction	22		(7)		15		19			—		—		34
Total commercial real estate loans	165		9		174		154			(18)		3		313
Commercial lease financing	35		8		43		30			(16)		1		58
Total commercial loans	751		(124)		627		797			(266)		23		1,181
Real estate — residential mortgage	7		77		84		21			(2)		1		104
Home equity loans	31		147		178		9			(10)		6		183
Consumer direct loans	34		63		97		52			(30)		6		125
Credit cards	47		35		82		39			(32)		6		95
Consumer indirect loans	30		6		36		16			(22)		12		42
Total consumer loans	149		328		477		137			(96)		31		549
Total ALLL — continuing operations	900		204		1,104		934		(a)	(362)		54		1,730
Discontinued operations	10		31		41		2			(4)		3		42
Total ALLL — including discontinued operations	$	910	$	235	$	1,145	$	936		$	(366)	$	57	$	1,772

(a)Excludes a provision for losses on lending-related commitments of $67 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.

Significant Macroeconomic Variables of Loan Portfolios

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

(a)Variables include all transformations and interactions with other risk drivers. Additionally, variables may have varying impacts at different points in the economic cycle.

Financing Receivable Credit Quality Indicators

Credit Risk Profile by Creditworthiness Category and Vintage (a)

As of September 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	$	13,328	$	5,936	$	4,512	$	3,141	$	2,223	$	3,018	$	19,876	$	153	$	52,187
Criticized (Accruing)	39		131		164		201		137		251		1,434		22		2,379
Criticized (Nonaccruing)	6		14		63		31		20		41		283		1		459
Total commercial and industrial	13,373		6,081		4,739		3,373		2,380		3,310		21,593		176		55,025
Real estate — commercial mortgage
Risk Rating:
Pass	1,341		3,186		1,877		918		879		3,267		807		46		12,321
Criticized (Accruing)	3		40		65		113		85		246		80		2		634
Criticized (Nonaccruing)	—		1		4		3		1		90		5		—		104
Total real estate — commercial mortgage	1,344		3,227		1,946		1,034		965		3,603		892		48		13,059
Real estate — construction
Risk Rating:
Pass	242		701		624		226		34		25		24		5		1,881
Criticized (Accruing)	—		3		18		—		41		2		1		—		65
Criticized (Nonaccruing)	—		—		—		—				1		—		—		1
Total real estate — construction	242		704		642		226		75		28		25		5		1,947
Commercial lease financing
Risk Rating:
Pass	793		1,180		620		561		273		939		—		—		4,366
Criticized (Accruing)	9		14		18		19		9		9		—		—		78
Criticized (Nonaccruing)	—		—		1		2		3		—		—		—		6
Total commercial lease financing	802		1,194		639		582		285		948				—		4,450
Total commercial loans	$	15,761	$	11,206	$	7,966	$	5,215	$	3,705	$	7,889	$	22,510	$	229	$	74,481

(a)Accrued interest of $133 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 September 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	$	2,561	$	1,774	$	242	$	286	$	604	$	1,372	—		—		$	6,839
660 to 749	550		350		88		58		108		362		—		—		1,516
Less than 660	15		34		24		11		23		183		—		—		290
No Score	—		2		4		6		2		55		1		—		70
Total real estate — residential mortgage	3,126		2,160		358		361		737		1,972		1		—		8,715
Home equity loans
FICO Score:
750 and above	644		417		166		192		185		815		$	2,874	$	639	5,932
660 to 749	213		249		115		119		96		380		1,308		229		2,709
Less than 660	22		50		29		29		34		155		450		65		834
No Score	2		2		1		—		—		2		5		1		13
Total home equity loans	881		718		311		340		315		1,352		4,637		934		9,488
Consumer direct loans
FICO Score:
750 and above	1,426		1,008		131		39		21		65		127		—		2,817
660 to 749	367		295		91		26		16		33		263		—		1,091
Less than 660	17		38		22		9		5		12		86		—		189
No Score	34		39		22		17		10		12		164		—		298
Total consumer direct loans	1,844		1,380		266		91		52		122		640		—		4,395
Credit cards
FICO Score:
750 and above	—		—		—		—		—		—		469		—		469
660 to 749	—		—		—		—		—		—		405		—		405
Less than 660	—		—		—		—		—		—		95		—		95
No Score	—		—		—		—		—		—		1		—		1
Total credit cards	—		—		—		—		—		—		970		—		970
Consumer indirect loans
FICO Score:
750 and above	944		991		415		221		87		80		—		—		2,738
660 to 749	595		633		264		115		46		57		—		—		1,710
Less than 660	125		184		113		62		30		33		—		—		547
No Score	37		—		—		—		—		—		—		—		37
Total consumer indirect loans	1,701		1,808		792		398		163		170		—		—		5,032
Total consumer loans	$	7,552	$	6,066	$	1,727	$	1,190	$	1,267	$	3,616	$	6,248	$	934	$	28,600

(a)Accrued interest of $102 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 September 30, 2020, and December 31, 2019, provides further information regarding Key’s credit exposure.

Aging Analysis of Loan Portfolio(a)

September 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	$	54,385	$	104	$	53	$	24	$	459	$	640	$	55,025
Commercial real estate:
Commercial mortgage	12,900		23		14		18		104		159		13,059
Construction	1,942		1		2		1		1		5		1,947
Total commercial real estate loans	14,842		24		16		19		105		164		15,006
Commercial lease financing	4,418		21		3		2		6		32		4,450
Total commercial loans	$	73,645	$	149	$	72	$	45	$	570	$	836	$	74,481
Real estate — residential mortgage	$	8,594	$	17	$	5	$	3	$	96	$	121	$	8,715
Home equity loans	9,275		42		12		13		146		213		9,488
Consumer direct loans	4,377		7		4		4		3		18		4,395
Credit cards	956		4		2		6		2		14		970
Consumer indirect loans	4,991		18		4		2		17		41		5,032
Total consumer loans	$	28,193	$	88	$	27	$	28	$	264	$	407	$	28,600
Total loans	$	101,838	$	237	$	99	$	73	$	834	$	1,243	$	103,081

(a)Amounts in table represent amortized cost and exclude loans held for sale.

(b)Accrued interest of $235 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 September 30,				Nine Months Ended September 30,
in millions	2020		2019		2020		2019
Commercial loans:
Extension of Maturity Date	—		$	6	$	8	$	11
Payment or Covenant Modification/Deferment	—		—		—		1
Bankruptcy Plan Modification	—		—		—		—
Increase in new commitment or new money	—		2		—		12
Total	—		$	8	$	8	$	24
Consumer loans:
Interest rate reduction	$	13	$	4	$	22	$	12
Other	6		8		18		21
Total	$	19	$	12	$	40	$	33
Total TDRs	$	19	$	20	$	48	$	57

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	2020		2019		2020		2019
Balance at beginning of the period	$	310	$	395	$	347	$	399
Additions	26		20		65		88
Payments	(22)		(65)		(75)		(123)
Charge-offs	(8)		(3)		(31)		(17)
Balance at end of period	$	306	$	347	$	306	$	347

Breakdown of Nonperforming TDRs by Loans Category

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

	September 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	51	$	51	$	39	51	$	72	$	53
Commercial real estate:
Commercial mortgage	7	62		50		6	64		58
Total commercial real estate loans	7	62		50		6	64		58
Total commercial loans	58	113		89		57	136		111
Real estate — residential mortgage	271	28		27		181	13		11
Home equity loans	629	40		37		713	42		41
Consumer direct loans	153	2		2		172	2		2
Credit cards	279	2		1		368	2		2
Consumer indirect loans	867	15		12		1,131	19		16
Total consumer loans	2,199	87		79		2,565	78		72
Total nonperforming TDRs	2,257	200		168		2,622	214		183
Prior-year accruing:(a)
Commercial and industrial	4	5		2		6	30		25
Commercial real estate
Commercial mortgage	1	—		—		1	—		—
Total commercial real estate loans	1	—		—		1	—		—
Total commercial loans	5	5		2		7	30		25
Real estate — residential mortgage	472	35		29		493	37		31
Home equity loans	1,829	108		87		1,751	104		84
Consumer direct loans	178	4		2		139	4		3
Credit cards	584	4		1		486	3		1
Consumer indirect loans	813	31		17		714	33		20
Total consumer loans	3,876	182		136		3,583	181		139
Total prior-year accruing TDRs	3,881	187		138		3,590	211		164
Total TDRs	6,138	$	387	$	306	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 September 30,				Nine months ended September 30,
in millions	2020		2019		2020		2019
Balance at the end of the prior period	$	198	$	64	$	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	198		64		141		64
Provision (credit) for losses on off balance sheet exposures	10		1		67		1
Balance at end of period	$	208	$	65	$	208	$	65

(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.

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2020

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, 2020, and December 31, 2019.

	September 30, 2020								December 31, 2019
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
in millions
ASSETS MEASURED ON A RECURRING BASIS
Short-term investments
U.S. Treasury Bills	—		$	1,000	—		$	1,000	—		$	—	—		$	—
Total short-term investments	—		1,000		—		1,000		—		—		—		—
Trading account assets:
U.S. Treasury, agencies and corporations	—		611		—		611		—		843		—		843
States and political subdivisions	—		52		—		52		—		30		—		30
Other mortgage-backed securities	—		13		$	27	40		—		78		—		78
Other securities	$	1	12		—		13		—		44		—		44
Total trading account securities	1		688		27		716		—		995		—		995
Commercial loans	—		17		—		17		—		45		—		45
Total trading account assets	1		705		27		733		—		1,040		—		1,040
Securities available for sale:
U.S. Treasury, agencies and corporations	—		4,464		—		4,464		—		334		—		334
States and political subdivisions	—		3		—		3		—		4		—		4
Agency residential collateralized mortgage obligations	—		13,732		—		13,732		—		12,783		—		12,783
Agency residential mortgage-backed securities	—		1,326		—		1,326		—		1,714		—		1,714
Agency commercial mortgage-backed securities	—		7,358		—		7,358		—		6,997		—		6,997
Other securities	—		—		12		12		—		—		$	11	11
Total securities available for sale	—		26,883		12		26,895		—		21,832		11		21,843
Other investments:
Principal investments:
Direct	—		—		1		1		—		—		1		1
Indirect (measured at NAV) (a)	—		—		—		60		—		—		—		68
Total principal investments	—		—		1		61		—		—		1		69
Equity investments:
Direct	—		—		12		12		—		—		12		12
Direct (measured at NAV) (a)	—		—		—		1		—		—		—		1
Indirect (measured at NAV) (a)	—		—		—		7		—		—		—		8
Total equity investments	—		—		12		20		—		—		12		21
Total other investments	—		—		13		81		—		—		13		90
Loans, net of unearned income (residential)	—		—		8		8		—		—		4		4
Loans held for sale (residential)	—		287		1		288		—		140		—		140
Derivative assets:
Interest rate	—		1,746		81		1,827		—		941		22		963
Foreign exchange	56		18		—		74		$	49	18		—		67
Commodity	—		462		—		462		—		208		—		208
Credit	—		1		2		3		—		—		1		1
Other	—		26		44		70		—		9		5		14
Derivative assets	56		2,253		127		2,436		49		1,176		28		1,253
Netting adjustments (b)	—		—		—		(490)		—		—		—		(473)
Total derivative assets	56		2,253		127		1,946		49		1,176		28		780
Accrued income and other assets	—		—		—		—		—		—		—		—
Total assets on a recurring basis at fair value	$	57	$	30,128	$	188	$	30,951	$	49	$	24,188	$	56	$	23,897
LIABILITIES MEASURED ON A RECURRING BASIS
Bank notes and other short-term borrowings:
Short positions	$	289	$	529	—		$	818	$	19	$	686	—		$	705
Derivative liabilities:
Interest rate	—		306		—		306		—		253		—		253
Foreign exchange	51		17		—		68		43		17		—		60
Commodity	—		445		—		445		—		200		—		200
Credit	—		—		$	15	15		—		1		$	9	10
Other	—		13		—		13		—		10		—		10
Derivative liabilities	51		781		15		847		43		481		9		533
Netting adjustments (b)	—		—		—		(679)		—		—		—		(335)
Total derivative liabilities	51		781		15		168		43		481		9		198
Total liabilities on a recurring basis at fair value	$	340	$	1,310	$	15	$	986	$	62	$	1,167	$	9	$	903

(a)Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet.

(b)Netting adjustments represent the amounts recorded to convert our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. The net basis takes into account the impact of bilateral collateral and master netting agreements that allow us to settle all derivative contracts with a single counterparty on a net basis and to offset the net derivative position with the related cash collateral. Total derivative assets and liabilities include these netting adjustments.

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 (includes trading account assets, securities available for sale, and U.S. Treasury Bills classified as short-term investments)	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: • Internally developed valuation techniques, principally discounted cash flow methods (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, 2020, the balance is less than $1 million.	Level 3
Principal investments (indirect)	Indirect principal investments include primary and secondary investments in private equity funds engaged mainly in venture- and growth-oriented investing. These investments do not have readily determinable fair values and qualify for the practical expedient to estimate fair value based upon net asset value per share (or its equivalent, such as member units or an ownership interest in partners’ capital to which a proportionate share of net assets is attributed). Indirect principal investments are also accounted for as investment companies, whereby each investment is adjusted to fair value with any net realized or unrealized gain/loss recorded in the current period’s earnings. Under the provisions of the Volcker Rule, we are required to dispose or conform our indirect investments to the requirements of the statute by no later than July 21, 2022. As of September 30, 2020, we have not committed to a plan to sell these investments. Therefore, these investments continue to be valued using the net asset value per share methodology.	NAV

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)

Asset/liability class	Valuation technique	Valuation hierarchy classification(s)
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: • LIBOR and OIS curves, index pricing curves, foreign currency curves • Volatility surfaces (a three-dimensional graph of implied volatility against strike price and maturity) We have customized derivative instruments and risk participations that are classified as Level 3 instruments. These derivative positions are valued using internally developed models, with inputs consisting of available market data, including: • Credit spreads and interest rates The unobservable internally derived assumptions include: • Loss given default • Internal risk assessments of customers 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, for sold risk participation agreements, a higher loss probability and a lower credit rating would negatively affect the fair value of the risk participations and a lower loss probability and higher credit rating would positively affect the fair value of the risk participations. (For purchased risk participation agreements, higher loss probabilities and lower credit ratings would positively affect the fair value.) 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

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)
Collateral-dependent loans	When a loan is collateral-dependent, the fair value of the loan is determined based on the fair value of the underlying collateral.	Level 3
Commercial loans and student loans held for sale	Through a quarterly analysis of our loan portfolios held for sale, which include both performing and nonperforming commercial loans and student loans, we determine any adjustments necessary to record the portfolios at the lower of cost or fair value in accordance with GAAP. Valuation inputs include: • Non-binding bids for the respective loans or similar loans • Recent sales transactions • Internal models that emulate recent securitizations	Level 2 and 3
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(a)	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(a)	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, 2020, and December 31, 2019, the carrying amount of equity investments under this method was $158 million and $134 million, respectively. No impairment was recorded for the three or nine months ended September 30, 2020.	Level 3
Mortgage Servicing Assets(a)	Refer to Note 8. Mortgage Servicing Assets	Level 3

(a)Asset classes included in “Accrued income and other assets” on the Consolidated Balance Sheets

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, 2020, as well as financial support provided for the three and nine months ended September 30, 2020, and September 30, 2019.

					Financial support provided
					Three months ended September 30,						Nine months ended September 30,
	September 30, 2020				2020				2019		2020			2019
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)	60		$	18	$	1	—		—	—	$	1	—	$	2	—
Total	$	61	$	18	1		$	—	—	—	$	1	—	$	2	—

(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, 2020, no significant liquidation of the underlying investments has been communicated to Key. The purpose of funding our capital commitments to these investments is to allow the funds to make additional follow-on investments and pay fund expenses until the fund dissolves. We, and all other investors in the fund, are obligated to fund the full amount of our respective capital commitments to the fund based on our and their respective ownership percentages, as noted in the applicable Limited Partnership Agreement.

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, 2020, and September 30, 2019. 

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, 2020
Trading account assets
Other mortgage-backed securities	—		—		—			—		$	(9)	—	—		$	36	(d)	—			$	27	—
Securities available for sale
Other securities	$	11	$	1	—			—		—		—	—		—			—			12		—
Other investments
Principal investments
Direct (a)	1		—		—			—		—		—	—		—			—			1		—
Equity investments
Direct (a)	12		—		—			—		—		—	—		—			—			12		—
Loans held for sale (residential)	—		—		—			—		(10)		—	$	11	—			—			1		—
Loans, net of unearned income (residential)	4		—		—			—		(2)		—	6		—			—			8		—
Derivative instruments (b)
Interest rate	22		—		$	18	(c)	$	14	(5)		—	—		98		(d)	$	(66)	(d)	81		—
Credit	(8)		—		(6)		(c)	1		—		—	—		—			—			(13)		—
Other (e)	5		—		—			—		—		—	39		—			—			44		—
Three months ended September 30, 2020
Trading account assets
Other mortgage-backed securities	$	36	—		—			—		$	(9)	—	—		—			—			$	27	—
Securities available for sale
Other securities	12		$	—	—			—		—		—	—		—			—			12		—
Other investments
Principal investments
Direct (a)	1		—		—			—		—		—	—		—			—			1		—
Equity investments
Direct (a)	12		—		—			—		—		—	—		—			—			12		—
Loans held for sale (residential)	—		—		—			—		—		—	$	1	—			—			1		—
Loans, net of unearned income (residential)	5		—		—			—		—		—	3		—			—			8		—
Derivative instruments (b)
Interest rate	52		—		$	(3)	(c)	$	2	(4)		—	—		$	36	(d)	$	(2)	(d)	81		—
Credit	(17)		—		4		(c)	—				—	—		—						(13)		—
Other (e)	46		—		5			—		—		—	(7)		—			—			44		—

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 (a)	1		—		—			—		—		—	—		—			—			1		—
Equity investments
Direct (a)	7		—		$	(1)		—		—		—	—		$	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)		(c)	$	(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 (a)	1		—		—			—		—		—	—		—			—			1		—
Equity investments
Direct (a)	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)	—		—		—	—		—			$	(2)	(d)	3		—
Credit	(1)		—		(5)		(c)	—		$	1	—	—		—			—			(5)		—
Other (e)	6		—		—			—		—		—	—		—			—			6		—

(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 instruments 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, 2020, and December 31, 2019:

	September 30, 2020							December 31, 2019
in millions	Level 1	Level 2		Level 3		Total		Level 1	Level 2		Level 3		Total
ASSETS MEASURED ON A NONRECURRING BASIS
Collateral-dependent loans	—	$	—	$	89	$	89	—	—		$	76	$	76
Accrued income and other assets	—	—		103		103		—	$	118	51		169
Total assets on a nonrecurring basis at fair value	—	$	—	$	192	$	192	—	$	118	$	127	$	245

Quantitative Information about Level 3 Fair Value Measurements

The range and weighted-average of the significant unobservable inputs used to fair value our material Level 3

recurring and nonrecurring assets at September 30, 2020, and December 31, 2019, along with the valuation

techniques used, are shown in the following table:

	Level 3 Asset (Liability)				Valuation  Technique	Significant Unobservable Input	Range (Weighted-Average) (b), (c)
dollars in millions	September 30, 2020		December 31, 2019				September 30, 2020	December 31, 2019
Recurring
Trading account assets:
Other mortgage-backed securities	$	27	$	—	Discounted cash flows	Discount rate	3.10% - 4.11% (3.25%)	N/A
						Conditional prepayment rate	N/A (9.00)	N/A
						Constant default rate	N/A (0.75)	N/A
						Loss severity	N/A (50.00%)	N/A
Securities available-for-sale:
Other securities	$	12	11		Discounted cash flows	Discount rate	N/A (15.09%)	N/A (16.10%)
						Marketability discount	N/A (30.00%)	N/A (30.00%)
						Volatility factor	N/A (44.00%)	N/A (43.00%)
Other investments:(a)
Equity investments
Direct	12		12		Discounted cash flows	Discount rate	13.39 - 16.42% (14.93%)	13.91 - 17.24% (15.61%)
						Marketability discount	N/A (30.00%)	N/A (30.00%)
						Volatility factor	N/A (55.00%)	N/A (47.00%)
Loans held for sale (residential)	1		—		Market comparable pricing	Comparability factor	N/A (91.38%)	N/A
Loans, net of unearned income (residential)	8		4		Market comparable pricing	Comparability factor	79.00-98.37% (94.73%)	79.00 - 98.00% (91.05%)
Derivative instruments:
Interest rate	81		22		Discounted cash flows	Probability of default	.02 - 100% (11.50%)	.02 - 100% (5.40%)
						Internal risk rating	1 - 19 (9.284)	1 - 19 (9.168)
						Loss given default	0 - 1 (.471)	0 - 1 (.492)
Credit (assets)	2		1		Discounted cash flows	Probability of default	.02 - 100% (8.20%)	.02 - 100% (4.2%)
						Internal risk rating	1 - 19 (10.581)	1 - 19 (10.13)
						Loss given default	0 - 1 (.490)	0 - 1 (.498)
Credit (liabilities)	(15)		(9)		Discounted cash flows	Probability of default	.02 - 100% (16.08%)	.02 - 100% (12.24%)
						Internal risk rating	1 - 19 (7.980)	1 - 19 (8.058)
						Loss given default	0 - 1 (.397)	0 - 1 (.411)
Other(d)	44		5		Discounted cash flows	Loan closing rates	29.12 - 99.69 % (76.23%)	37.71 - 99.69% (79.33%)
Nonrecurring
Collateral-dependent loans	89		76		Fair value of collateral	Discount rate	0 - 95.00% (26.00%)	0 - 60.00% (10.00%)
Accrued income and other assets:
OREO and other Level 3 assets (e)	2		5		Appraised value	Appraised value	N/M	N/M

(a)Principal investments, direct is excluded from this table as the balance at September 30, 2020, and December 31, 2019, is insignificant (less than $1 million).

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

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

(d)Amounts represent interest rate lock commitments.

(e)Excludes $101 million and $46 million pertaining to mortgage servicing assets at September 30, 2020, and December 31, 2019, respectively. Refer to Note 8 (“Mortgage Servicing Assets”) for significant unobservable inputs pertaining to these assets.

Fair Value Disclosures of Financial Instruments

The Levels in the fair value hierarchy ascribed to our financial instruments and the related carrying amounts at September 30, 2020, and December 31, 2019, are shown in the following tables. Assets and liabilities are further arranged by measurement category.

	September 30, 2020
			Fair Value
in millions	Carrying Amount		Level 1		Level 2		Level 3		Measured at NAV		Netting Adjustment			Total
ASSETS (by measurement category)
Fair value - net income
Trading account assets (b)	733		$	1	705		$	27	—		—			733
Other investments (b)	620		—		—		552		$	68	—			620
Loans, net of unearned income (residential) (d)	8		—		—		8		—		—			8
Loans held for sale (residential) (b)	288		—		287		1		—		—			288
Derivative assets - trading (b)	1,841		56		2,182		127		—		$	(524)	(f)	1,841
Fair value - OCI
Securities available for sale (b)	26,895		—		26,883		$	12	—		—			26,895
Derivative assets - hedging (b)(g)	105		—		71		—		—		34		(f)	105
Amortized cost
Held-to-maturity securities (c)	8,384		—		8,842		—		—		—			8,842
Loans, net of unearned income (d)	101,343		—		—		99,826		—		—			99,826
Loans held for sale (b)	1,436		—		—		1,436		—		—			1,436
Other
Short-term investments - U.S. Treasury Bills (b)	$	1,000	—		$	1,000	—		—		—			$	1,000
Cash and other short-term investments (a)	14,104		14,104		—		—		—		—			14,104
LIABILITIES (by measurement category)
Fair value - net income
Derivative liabilities - trading (b)	$	166	$	51	$	775	15		—		$	(675)	(f)	$	166
Fair value - OCI
Derivative liabilities - hedging (b)(g)	2		—		6		—		—		(4)		(f)	2
Amortized cost
Time deposits (e)	6,795		—		6,826		—		—		—			6,826
Short-term borrowings (a)	1,031		289		742		—		—		—			1,031
Long-term debt (e)	12,685		12,852		733		—		—		—			13,585
Other
Deposits with no stated maturity (a)	129,951		—		129,951		—		—		—			129,951

	December 31, 2019
			Fair Value
in millions	Carrying Amount		Level 1		Level 2		Level 3		Measured at NAV		Netting Adjustment			Total
ASSETS (by measurement category)
Fair value - net income
Trading account assets (b)	$	1,040	—		$	1,040	—		—		—			$	1,040
Other investments (b)	605		—		—		$	528	$	77	—			605
Loans, net of unearned income (residential) (d)	4		—		—		4		—		—			4
Loans held for sale (residential) (b)	140		—		140		—		—		—			140
Derivative assets - trading (b)	715		$	49	985		28		—		$	(347)	(f)	715
Fair value - OCI
Securities available for sale (b)	21,843		—		21,832		11		—		—			21,843
Derivative assets - hedging (b)(g)	65		—		191		—		—		(126)		(f)	65
Amortized cost
Held-to-maturity securities (c)	10,067		—		10,116		—		—		—			10,116
Loans, net of unearned income (d)	93,742		—		—		92,641		—		—			92,641
Loans held for sale (b)	1,194		—		—		1,194		—		—			1,194
Other
Short-term investments - U.S. Treasury Bills (b)	—		—		—		—		—		—			—
Cash and other short-term investments (a)	2,004		2,004		—		—		—		—			2,004
LIABILITIES (by measurement category)
Fair value - net income
Derivative liabilities - trading (b)	$	194	$	43	$	461	9		—		$	(319)	(f)	$	194
Fair value - OCI
Derivative liabilities - hedging (b)(g)	4		—		20		—		—		(16)		(f)	4
Amortized cost
Time deposits (e)	11,652		—		11,752		—		—		—			11,752
Short-term borrowings (a)	1,092		19		1,073		—		—		—			1,092
Long-term debt (e)	12,448		12,694		249		—		—		—			12,943
Other
Deposits with no stated maturity (a)	100,218		—		100,218		—		—		—			100,218

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 105 of our 2019 Form 10-K.

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Securities (Tables)

9 Months Ended

Sep. 30, 2020

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, 2020								December 31, 2019
in millions	Amortized Cost (a)		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
SECURITIES AVAILABLE FOR SALE
U.S. Treasury, agencies, and corporations	$	4,463	$	1	—		$	4,464	$	334	—		—		$	334
States and political subdivisions	3		—		—		3		4		—		—		4
Agency residential collateralized mortgage obligations	13,403		336		$	7	13,732		12,772		$	82	$	71	12,783
Agency residential mortgage-backed securities	1,256		71		1		1,326		1,677		41		4		1,714
Agency commercial mortgage-backed securities	6,921		442		5		7,358		6,898		139		40		6,997
Other securities	8		4		—		12		7		4		—		11
Total securities available for sale	$	26,054	$	854	$	13	$	26,895	$	21,692	$	266	$	115	$	21,843
HELD-TO-MATURITY SECURITIES
Agency residential collateralized mortgage obligations	$	4,308	$	141	—		$	4,449	$	5,692	$	23	$	49	$	5,666
Agency residential mortgage-backed securities	313		11		—		324		409		6		—		415
Agency commercial mortgage-backed securities	3,726		306		—		4,032		3,940		78		9		4,009
Asset-backed securities	22		—		—		22		11		—		—		11
Other securities	15		—		—		15		15		—		—		15
Total held-to-maturity securities	$	8,384	$	458	—		$	8,842	$	10,067	$	107	$	58	$	10,116

(a)Amortized cost amounts exclude accrued interest receivable which is recorded within “other assets” on the balance sheet. At September 30, 2020, accrued interest receivable on available for sale securities and held-to-maturity securities totaled $39 million and $17 million, respectively.

Schedule of Unrealized Loss on Investments

The following table summarizes available for sale securities in an unrealized loss position for which an allowance for credit losses has not been recorded as of September 30, 2020, and December 31, 2019.

	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, 2020
Securities available for sale:
Agency residential collateralized mortgage obligations	$	1,453	7			—		—			$	1,453	$	7
Agency residential mortgage-backed securities	7		1			$	5	—		(a)	12		1
Agency commercial mortgage-backed securities	764		5			—		—			764		5
Held-to-maturity securities:
Agency residential collateralized mortgage obligations	—		—			29		—		(a)	29		—
Asset-backed securities	1		—		(a)	—		—			1		—
Other securities	8		—		(a)	—		—			8		—
Total securities in an unrealized loss position	$	2,233	13			$	34	—			$	2,267	$	13
December 31, 2019
Securities available for sale:
U.S. Treasury, agencies, and corporations	$	30	—		(b)	$	30	—		(b)	$	60	—
Agency residential collateralized mortgage obligations	3,432		$	20		3,221		$	51		6,653		$	71
Agency residential mortgage-backed securities	33		—		(b)	629		4			662		4
Agency commercial mortgage-backed securities	1,541		17			1,213		23			2,754		40
Held-to-maturity securities:
Agency residential collateralized mortgage obligations	1,626		14			2,289		35			3,915		49
Agency residential mortgage-backed securities	56		—		(b)	—		—			56		—
Agency commercial mortgage-backed securities	518		9			—		—			518		9
Asset-backed securities	11		—		(b)	—		—			11		—
Other securities	3		—		(b)	—		—			3		—
Total securities in an unrealized loss position	$	7,250	$	60		$	7,382	$	113		$	14,632	$	173

(a)At September 30, 2020, gross unrealized losses totaled less than $1 million for asset-backed securities and other securities held-to-maturity with a loss duration of less than 12 months. At September 30, 2020, gross unrealized losses totaled less than $1 million for agency residential mortgage-backed securities available for sale with a loss duration greater than 12 months or longer. At September 30, 2020, gross unrealized losses totaled less than $1 million for agency residential collateralized mortgage obligations held-to-maturity with a loss duration greater than 12 months or longer.

(b)At December 31, 2019, gross unrealized losses totaled less than $1 million for U.S. Treasury, agencies, and corporations and agency residential mortgage-backed securities available for sale with a loss duration of less than 12 months. At December 31, 2019, gross unrealized losses totaled less than $1 million for U.S. Treasury, Agencies, and Corporations securities available for sale with a loss duration greater than 12 months or longer. At December 31, 2019, gross unrealized losses totaled less than $1 million for agency residential mortgage-backed securities, asset-backed securities, and other 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, 2020	Securities Available for Sale				Held to Maturity Securities
in millions	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	5,125	$	5,134	$	102	$	104
Due after one through five years	14,883		15,439		5,649		5,880
Due after five through ten years	5,608		5,887		2,620		2,845
Due after ten years	438		435		13		13
Total	$	26,054	$	26,895	$	8,384	$	8,842

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Derivatives and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2020

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, 2020, and December 31, 2019. 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, 2020						December 31, 2019
			Fair Value						Fair Value
in millions	Notional Amount		Derivative Assets		Derivative Liabilities		Notional Amount		Derivative Assets		Derivative Liabilities
Derivatives designated as hedging instruments:
Interest rate	$	34,220	$	71	$	6	$	39,208	$	191	$	20
Derivatives not designated as hedging instruments:
Interest rate	75,507		1,756		300		71,209		772		233
Foreign exchange	5,879		74		68		6,572		67		60
Commodity	7,738		462		445		5,324		208		200
Credit	487		3		15		427		1		10
Other (a)	5,572		70		13		3,337		14		10
Total	95,183		2,365		841		86,869		1,062		513
Netting adjustments (b)	—		(490)		(679)		—		(473)		(335)
Net derivatives in the balance sheet	129,403		1,946		168		126,077		780		198
Other collateral (c)	—		(3)		(1)		—		(2)		(42)
Net derivative amounts	$	129,403	$	1,943	$	167	$	126,077	$	778	$	156

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

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

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

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, 2020, and December 31, 2019, related to cumulative basis adjustments for fair value hedges.

	September 30, 2020
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	$	8,255	$	492
	December 31, 2019
	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	$	8,408	$	240

(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 $8 million and $9 million at September 30, 2020, and December 31, 2019, 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, 2020, and September 30, 2019.

	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, 2020
Total amounts presented in the consolidated statement of income	$	(64)	$	927	$	(54)	$	28
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	47		—		—		—
Recognized on derivatives designated as hedging instruments	(7)		—		—		—
Net income (expense) recognized on fair value hedges	$	40	—		—		—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	(1)	$	100	—		—
Net income (expense) recognized on cash flow hedges	$	(1)	$	100	—		—
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)	—		—

	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, 2020
Total amounts presented in the consolidated statement of income	$	(225)	$	2,933	$	(319)	$	(27)
Net gains (losses) on fair value hedging relationships
Interest contracts
Recognized on hedged items	(252)		—		—		—
Recognized on derivatives designated as hedging instruments	343		—		—		—
Net income (expense) recognized on fair value hedges	$	91	—		—		—
Net gain (loss) on cash flow hedging relationships
Interest contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	(3)	$	224	—		—
Net income (expense) recognized on cash flow hedges	$	(3)	$	224	—		—
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)	—		—

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, 2020, and September 30, 2019, 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, 2020
Cash Flow Hedges
Interest rate	$	5	Interest income — Loans	$	100
Interest rate	—		Interest expense — Long-term debt	(1)
Interest rate	10		Investment banking and debt placement fees	—
Total	$	15		$	99
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)

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, 2020
Cash Flow Hedges
Interest rate	$	629	Interest income — Loans	$	224
Interest rate	(6)		Interest expense — Long-term debt	(3)
Interest rate	(10)		Investment banking and debt placement fees	—
Net Investment Hedges
Foreign exchange contracts	—		Other Income	—
Total	$	613		$	221
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)

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, 2020, and September 30, 2019, and where they are recorded on the income statement.

	Three months ended September 30, 2020							Three months ended September 30, 2019
in millions	Corporate services income		Consumer mortgage income	Other income		Total		Corporate services income		Consumer mortgage income	Other income		Total
NET GAINS (LOSSES)
Interest rate	$	5	—	$	(1)	$	4	$	16	—	(1)		$	15
Foreign exchange	9		—	—		9		11		—	—		11
Commodity	5		—	—		5		2		—	—		2
Credit	4		—	(8)		(4)		(5)		—	$	(8)	(13)
Other	—		28	(8)		20		—		5	(3)		2
Total net gains (losses)	$	23	28	$	(17)	$	34	$	24	5	$	(12)	$	17

	Nine months ended September 30, 2020								Nine months ended September 30, 2019
in millions	Corporate services income		Consumer mortgage income		Other income		Total		Corporate services income		Consumer mortgage income		Other income		Total
NET GAINS (LOSSES)
Interest rate	$	23	$	—	$	(10)	$	13	$	31	—		$	(3)	$	28
Foreign exchange	29		—		—		29		32		—		—		32
Commodity	13		—		—		13		5		—		—		5
Credit	(6)		—		(20)		(26)		(4)		—		(23)		(27)
Other	—		36		17		53		—		$	5	—		5
Total net gains (losses)	$	59	$	36	$	(13)	$	82	$	64	$	5	$	(26)	$	43

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, 2020		December 31, 2019
Interest rate	$	1,680	$	848
Foreign exchange	28		30
Commodity	212		95
Credit	—		—
Other	70		14
Derivative assets before collateral	1,990		987
Less: Related collateral	44		207
Total derivative assets	$	1,946	$	780

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, 2020, and December 31, 2019. The notional amount represents the amount that the seller could

be required to pay. The payment/performance risk shown in the table represents a weighted average of the default

probabilities for all reference entities in the respective portfolios. These default probabilities are implied from

observed credit indices in the credit default swap market, which are mapped to reference entities based on Key’s

internal risk rating.

	September 30, 2020					December 31, 2019
dollars in millions	Notional Amount		Average Term (Years)	Payment / Performance Risk		Notional Amount		Average Term (Years)	Payment / Performance Risk
Other	$	287	13.48	17.15	%	$	134	14.30	14.56	%
Total credit derivatives sold	$	287	—	—		$	134	—	—

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, 2020, and December 31, 2019. 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, 2020, and December 31, 2019, 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, 2020, and December 31, 2019. 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, 2020				December 31, 2019
in millions	Moody’s		S&P		Moody’s		S&P
KeyBank’s long-term senior unsecured credit ratings	A3		A-		A3		A-
One rating downgrade	$	1	$	1	$	1	$	1
Two rating downgrades	1		1		1		1
Three rating downgrades	1		1		1		1

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Mortgage Servicing Assets (Tables)

9 Months Ended

Sep. 30, 2020

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	2020		2019		2020		2019
Balance at beginning of period	$	565	$	509	$	539	$	502
Servicing retained from loan sales	30		30		107		71
Purchases	6		10		24		33
Amortization	(29)		(29)		(88)		(86)
Temporary impairments	(6)		(2)		(16)		(2)
Balance at end of period	$	566	$	518	$	566	$	518
Fair value at end of period	$	685	$	681	$	685	$	681

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	2020		2019		2020		2019
Balance at beginning of period	$	46	$	39	$	46	$	37
Servicing retained from loan sales	12		5		25		9
Purchases	—		—		—		—
Amortization	(4)		(3)		(9)		(5)
Temporary (impairments) recoveries	(1)		—		(9)		—
Balance at end of period	$	53	$	41	$	53	$	41
Fair value at end of period	$	54	$	43	$	54	$	43

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, 2020, and September 30, 2019, along with the valuation techniques, are shown in the following table: 

dollars in millions		September 30, 2020	September 30, 2019
Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Discounted cash flow	Expected defaults	1.00 - 2.00% (1.17%)	1.00 - 2.00% (1.13%)
	Residual cash flows discount rate	7.72 - 10.66% (9.30%)	7.00 - 11.50% (9.30%)
	Escrow earn rate	0.92 - 1.16% (1.05%)	1.46 - 2.36% (2.02%)
	Loan assumption rate	0.00 - 1.78% (1.39%)	0.01 - 3.37% (1.38%)

The range and weighted-average of the significant unobservable inputs used to fair value our mortgage servicing assets at September 30, 2020, and September 30, 2019, along with the valuation techniques, are shown in the following table:

		September 30, 2020	September 30, 2019
Valuation Technique	Significant Unobservable Input	Range (Weighted Average)
Discounted cash flow	Prepayment speed	12.35% - 53.36% (16.89%)	12.06 - 62.96% (14.53%)
	Discount rate	7.51-8.80% (7.57%)	7.50 - 10.00% (7.53%)
	Servicing cost	$62.00 - $5,125 ($81.67)	$62 - $4,375 ($67.67)

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Leases (Tables)

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Operating Lease, Lease Income

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

	Three months ended September 30,				Nine months ended September 30,
in millions	2020		2019		2020		2019
Sales-type and direct financing leases
Interest income on lease receivable	$	36	$	31	$	91	$	92
Interest income related to accretion of unguaranteed residual asset	(7)		3		(1)		9
Interest income on deferred fees and costs	—		—		—		—
Total sales-type and direct financing lease income	29		34		90		101
Operating leases
Operating lease income related to lease payments	34		34		103		100
Other operating leasing gains	4		8		25		23
Total operating lease income and other leasing gains	38		42		128		123
Total lease income	$	67	$	76	$	218	$	224

Sales-type Lease, Lease Income

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

	Three months ended September 30,				Nine months ended September 30,
in millions	2020		2019		2020		2019
Sales-type and direct financing leases
Interest income on lease receivable	$	36	$	31	$	91	$	92
Interest income related to accretion of unguaranteed residual asset	(7)		3		(1)		9
Interest income on deferred fees and costs	—		—		—		—
Total sales-type and direct financing lease income	29		34		90		101
Operating leases
Operating lease income related to lease payments	34		34		103		100
Other operating leasing gains	4		8		25		23
Total operating lease income and other leasing gains	38		42		128		123
Total lease income	$	67	$	76	$	218	$	224

Direct Financing Lease, Lease Income

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

	Three months ended September 30,				Nine months ended September 30,
in millions	2020		2019		2020		2019
Sales-type and direct financing leases
Interest income on lease receivable	$	36	$	31	$	91	$	92
Interest income related to accretion of unguaranteed residual asset	(7)		3		(1)		9
Interest income on deferred fees and costs	—		—		—		—
Total sales-type and direct financing lease income	29		34		90		101
Operating leases
Operating lease income related to lease payments	34		34		103		100
Other operating leasing gains	4		8		25		23
Total operating lease income and other leasing gains	38		42		128		123
Total lease income	$	67	$	76	$	218	$	224

In April 2020, the FASB provided elections under which entities can choose to account for eligible rent concessions either by applying the modification accounting in ASC 842 or by applying an expedient to account for them outside of the modification framework, thus, forgoing the performance of an assessment to determine whether contractual provisions in existing lease arrangements provide enforceable rights and obligations. Modification accounting may require remeasurement and reallocation of contract consideration. To be eligible for the expedient, rent concessions must relate to the COVID-19 pandemic and meet certain criteria. As a result of the pandemic, Key has begun providing lessees with 90 day deferrals on its equipment leases and has elected not to apply modification accounting. Rent concessions were not material at September 30, 2020.

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Variable Interest Entities (Tables)

9 Months Ended

Sep. 30, 2020

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, 2020, and December 31, 2019. 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 13 (“Variable Interest Entities”) beginning on page 146 of our 2019 Form 10-K.

	Unconsolidated VIEs
in millions	Total Assets		Total Liabilities		Maximum Exposure to Loss
September 30, 2020
LIHTC investments	$	6,693	$	2,547	$	1,820
December 31, 2019
LIHTC investments	$	6,405	$	2,526	$	1,846

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, 2020, and December 31, 2019.

	Unconsolidated VIEs
in millions	Total Assets		Total Liabilities		Maximum Exposure to Loss
September 30, 2020
Indirect investments	$	11,225	$	173	$	78
December 31, 2019
Indirect investments	$	12,954	$	205	$	89

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Securities Financing Activities (Tables)

9 Months Ended

Sep. 30, 2020

Banking and Thrift, Other Disclosures [Abstract]

Summarized Securities Financing Agreements

The following table summarizes our securities financing agreements at September 30, 2020, and December 31, 2019:

	September 30, 2020							December 31, 2019
in millions	Gross Amount Presented in Balance Sheet		Netting Adjustments (a)		Collateral (b)		Net Amounts	Gross Amount Presented in Balance Sheet		Netting Adjustments (a)		Collateral (b)		Net Amounts
Offsetting of financial assets:
Reverse repurchase agreements	$	7	$	(7)	—		—	$	5	$	(5)	—		—
Total	$	7	$	(7)	—		—	$	5	$	(5)	—		—
Offsetting of financial liabilities:
Repurchase agreements (c)	$	213	$	(20)	$	(193)	—	$	187	$	(7)	$	(180)	—
Total	$	213	$	(20)	$	(193)	—	$	187	$	(7)	$	(180)	—

(a)Netting adjustments take into account the impact of master netting agreements that allow us to settle with a single counterparty on a net basis.

(b)These adjustments take into account the impact of bilateral collateral agreements that allow us to offset the net positions with the related collateral. The application of collateral cannot reduce the net position below zero. Therefore, excess collateral, if any, is not reflected above.

(c)Repurchase agreements are collateralized by mortgaged-backed agency securities and are contracted on an overnight or continuous basis.

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Employee Benefits (Tables)

9 Months Ended

Sep. 30, 2020

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 18 (“Employee Benefits”) beginning on page 155 of our 2019 Form 10-K.

	Three months ended September 30,				Nine months ended September 30,
in millions	2020		2019		2020		2019
Interest cost on PBO	$	9	$	11	$	26	$	34
Expected return on plan assets	(10)		(12)		(29)		(36)
Amortization of losses	5		4		13		11
Settlement loss	—		—		8		—
Net pension cost	$	4	$	3	$	18	$	9

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Trust Preferred Securities Issued by Unconsolidated Subsidiaries (Tables)

9 Months Ended

Sep. 30, 2020

Banking and Thrift, Other Disclosures [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, 2020
KeyCorp Capital I	$	156	$	6	$	162	1.036	%	2028
KeyCorp Capital II	112		4		116		6.875		2029
KeyCorp Capital III	148		4		152		7.750		2029
HNC Statutory Trust III	19		1		20		1.656		2035
Willow Grove Statutory Trust I	19		1		20		1.560		2036
HNC Statutory Trust IV	17		1		18		1.548		2037
Westbank Capital Trust II	8		—		8		2.417		2034
Westbank Capital Trust III	8		—		8		2.417		2034
Total	$	487	$	17	$	504	4.528	%	—
December 31, 2019	$	466	$	17	$	483	5.214	%	—

(a)The trust preferred securities must be redeemed when the related debentures mature, or earlier if provided in the governing indenture. Each issue of trust preferred securities carries an interest rate identical to that of the related debenture. Certain trust preferred securities include basis adjustments related to fair value hedges totaling $75 million at September 30, 2020, and $57 million at December 31, 2019. See Note 7 (“Derivatives and Hedging Activities”) for an explanation of fair value hedges.

(b)We have the right to redeem these debentures. If the debentures purchased by KeyCorp Capital I, HNC Statutory Trust III, Willow Grove Statutory Trust I, HNC Statutory Trust IV, Westbank Capital Trust II, or Westbank Capital Trust III are redeemed before they mature, the redemption price will be the principal amount, plus any accrued but unpaid interest. If the debentures purchased by KeyCorp Capital II or KeyCorp Capital III are redeemed before they mature, the redemption price will be the greater of: (i) the principal amount, plus any accrued but unpaid interest, or (ii) the sum of the present values of principal and interest payments discounted at the Treasury Rate (as defined in the applicable indenture), plus 20 basis points for KeyCorp Capital II or 25 basis points for KeyCorp Capital III, or 50 basis points in the case of redemption upon either a tax or a capital treatment event for either KeyCorp Capital II or KeyCorp Capital III, plus any accrued but unpaid interest. The principal amount of certain debentures includes basis adjustments related to fair value hedges totaling $75 million at September 30, 2020, and $57 million at December 31, 2019. See Note 7 (“Derivatives and Hedging Activities”) for an explanation of fair value hedges. The principal amount of debentures, net of discounts, is included in “long-term debt” on the balance sheet.

(c)The interest rates for the trust preferred securities issued by KeyCorp Capital II and KeyCorp Capital III are fixed. The trust preferred securities issued by KeyCorp Capital I have a floating interest rate, equal to three-month LIBOR plus 74 basis points, that reprices quarterly. The trust preferred securities issued by HNC Statutory Trust III have a floating interest rate, equal to three-month LIBOR plus 140 basis points, that reprices quarterly. The trust preferred securities issued by Willow Grove Statutory Trust I have a floating interest rate, equal to three-month LIBOR plus 131 basis points, that reprices quarterly. The trust preferred securities issued by HNC Statutory Trust IV have a floating interest rate, equal to three-month LIBOR plus 128 basis points, that reprices quarterly. The trust preferred securities issued by Westbank Capital Trust II and Westbank Capital Trust III each have a floating interest rate, equal to three-month LIBOR plus 219 basis points, that reprices quarterly.  The total interest rates are weighted-average rates.

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Contingent Liabilities and Guarantees (Tables)

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Guarantees

The following table shows the types of guarantees that we had outstanding at September 30, 2020. 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 “Contingencies and Guarantees” beginning on page 108 of our 2019 Form 10-K.

September 30, 2020	Maximum Potential Undiscounted Future Payments		Liability Recorded
in millions
Financial guarantees:
Standby letters of credit	$	3,107	$	72
Recourse agreement with FNMA	5,662		23
Residential mortgage reserve	2,280		9
Written put options (a)	3,284		63
Total	$	14,333	$	167

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

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Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Changes in AOCI

Our changes in AOCI for the three and nine months ended September 30, 2020, and September 30, 2019, 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, 2019	$	115	$	250	—		$	(339)	$	26
Other comprehensive income before reclassification, net of income taxes	530		467		—		(1)		996
Amounts reclassified from AOCI, net of income taxes (a)	(3)		(168)		—		16		(155)
Net current-period other comprehensive income, net of income taxes	527		299		—		15		841
Balance at September 30, 2020	$	642	$	549	—		$	(324)	$	867
Balance at June 30, 2020	$	650	$	613	—		$	(327)	$	936
Other comprehensive income before reclassification, net of income taxes	(8)		11		—		(1)		2
Amounts reclassified from AOCI, net of income taxes (a)	—		(75)		—		4		(71)
Net current-period other comprehensive income, net of income taxes	(8)		(64)		—		3		(69)
Balance at September 30, 2020	$	642	$	549	—		$	(324)	$	867
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

(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, 2020, and September 30, 2019, are as follows:

	Three months ended September 30,				Affected Line Item in the Statement Where Net Income is Presented
in millions	2020		2019
Unrealized gains (losses) on available for sale securities
Realized gains	—		15		Other income
Realized losses	—		—		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	$	100	$	(8)	Interest income — Loans
Interest rate	(1)		(1)		Interest expense — Long-term debt
	99		(9)		Income (loss) from continuing operations before income taxes
	24		(3)		Income taxes
	$	75	(6)		Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(5)	$	(4)	Other expense
Settlement loss	—		—		Other expense
	(5)		(3)		Income (loss) from continuing operations before income taxes
	(1)		(1)		Income taxes
	$	(4)	$	(2)	Income (loss) from continuing operations

	Nine months ended September 30,				Affected Line Item in the Statement Where Net Income is Presented
in millions	2020		2019
Unrealized gains (losses) on available for sale securities
Realized gains	$	4	15		Other income
	4		15		Income (loss) from continuing operations before income taxes
	1		4		Income taxes
	$	3	11		Income (loss) from continuing operations
Unrealized gains (losses) on derivative financial instruments
Interest rate	$	224	$	(51)	Interest income — Loans
Interest rate	(3)		(2)		Interest expense — Long-term debt
	221		(53)		Income (loss) from continuing operations before income taxes
	53		(13)		Income taxes
	$	168	(40)		Income (loss) from continuing operations
Net pension and postretirement benefit costs
Amortization of losses	$	(13)	$	(11)	Other expense
Settlement loss	(8)		—		Other expense
Amortization of unrecognized prior service credit	—		1		Other expense
	(21)		(10)		Income (loss) from continuing operations before income taxes
	(5)		(3)		Income taxes
	$	(16)	$	(7)	Income (loss) from continuing operations

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Shareholders' Equity (Tables)

9 Months Ended

Sep. 30, 2020

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 2020 dividends paid per depositary share
Fixed-to-Floating Rate Perpetual Noncumulative Series D	$	525	21,000	$	1	$	25,000	1/25th	$	1,000	$	12.50
Fixed-to-Floating Rate Perpetual Noncumulative Series E	500		500,000	1		1,000		1/40th	25		.382813
Fixed Rate Perpetual Noncumulative Series F	425		425,000	1		1,000		1/40th	25		.353125
Fixed Rate Perpetual Non-Cumulative Series G	450		450,000	1		1,000		1/40th	25		.351563

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Business Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2020

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, 2020, and September 30, 2019.

Three months ended September 30,	Consumer Bank						Commercial Bank						Other						Total Key
dollars in millions	2020			2019			2020			2019			2020			2019			2020			2019
SUMMARY OF OPERATIONS
Net interest income (TE)	$	604		$	595		$	421		$	399		$	(19)		$	(14)		$	1,006		$	980
Noninterest income	267			238			383			381			31			31			681			650
Total revenue (TE) (a)	871			833			804			780			12			17			1,687			1,630
Provision for credit losses	(16)			48			163			32			13			120			160			200
Depreciation and amortization expense	19			25			35			35			35			38			89			98
Other noninterest expense	552			504			408			343			(12)			(6)			948			841
Income (loss) from continuing operations before income taxes (TE)	316			256			198			370			(24)			(135)			490			491
Allocated income taxes and TE adjustments	75			60			38			69			(47)			(51)			66			78
Income (loss) from continuing operations	241			196			160			301			23			(84)			424			413
Income (loss) from discontinued operations, net of taxes	—			—			—			—			4			3			4			3
Net income (loss)	241			196			160			301			27			(81)			428			416
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—			—			—			—			—
Net income (loss) attributable to Key	$	241		$	196		$	160		$	301		$	27		$	(81)		$	428		$	416
AVERAGE BALANCES (b)
Loans and leases	$	41,471		$	32,760		$	62,925		$	58,215		$	523		$	981		$	104,919		$	91,956
Total assets (a)	44,888			36,397			72,613			66,549			51,310			41,212			168,811			144,158
Deposits	83,175			72,995			51,238			36,204			531			1,080			134,944			110,279
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	23		$	40		$	104		$	35		$	—		$	122		$	127		$	197
Return on average allocated equity (b)	27.03		%	23.22		%	12.57		%	26.18		%	1.00		%	(3.62)		%	9.51		%	9.57		%
Return on average allocated equity	27.03			23.22			12.57			26.18			1.18			(3.49)			9.60			9.64
Average full-time equivalent employees (c)	8,350			8,458			2,112			2,226			6,635			6,214			17,097			16,898

(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.

Nine months ended September 30,	Consumer Bank						Commercial Bank						Other							Total Key
dollars in millions	2020			2019			2020			2019			2020				2019			2020			2019
SUMMARY OF OPERATIONS
Net interest income (TE)	$	1,788		$	1,780		$	1,285		$	1,206		$	(53)			$	(32)		$	3,020		$	2,954
Noninterest income	745			683			1,007			1,035			98				90			1,850			1,808
Total revenue (TE) (a)	2,533			2,463			2,292			2,241			45				58			4,870			4,762
Provision for credit losses	291			133			696			80			14				123			1,001			336
Depreciation and amortization expense	59			71			108			100			105				112			272			283
Other noninterest expense	1,610			1,547			1,131			1,051			(32)				40			2,709			2,638
Income (loss) from continuing operations before income taxes (TE)	573			712			357			1,010			(42)				(217)			888			1,505
Allocated income taxes and TE adjustments	136			169			32			190			(34)				(96)			134			263
Income (loss) from continuing operations	437			543			325			820			(8)				(121)			754			1,242
Income (loss) from discontinued operations, net of taxes	—			—			—			—			7				6			7			6
Net income (loss)	437			543			325			820			(1)				(115)			761			1,248
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—			—				—			—			—
Net income (loss) attributable to Key	$	437		$	543		$	325		$	820		$	(1)		(d)	$	(115)		$	761		$	1,248
AVERAGE BALANCES (b)
Loans and leases	$	38,632		$	31,993		$	63,679		$	57,803		$	707			$	1,009		$	103,018		$	90,805
Total assets (a)	42,481			35,524			72,988			65,781			44,277				41,014			159,746			142,319
Deposits	78,682			72,201			45,082			35,534			691				1,427			124,455			109,162
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	106		$	114		$	201		$	88		1				124			$	308		$	326
Return on average allocated equity (b)	16.69		%	22.24		%	8.93		%	24.15		%	(.12)		%		(1.87)		%	5.74		%	10.09		%
Return on average allocated equity	16.69			22.24			8.93			24.15			(.01)				(1.78)			5.79			10.14
Average full-time equivalent employees (c)	8,198			8,682			2,092			2,285			6,468				6,250			16,758			17,217

(a)Substantially all revenue generated by our major business segments is derived from clients that reside in the United States. Substantially all long-lived assets, including premises and equipment, capitalized software, and goodwill held by our major business segments, are located in the United States.

(b)From continuing operations.

(c)The number of average full-time equivalent employees was not adjusted for discontinued operations.

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Revenue from Contracts with Customers (Tables)

9 Months Ended

Sep. 30, 2020

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, 2020, and September 30, 2019.

	Three months ended September 30, 2020						Three months ended September 30, 2019
dollars in millions	Consumer Bank		Commercial Bank		Total Contract Revenue		Consumer Bank		Commercial Bank		Total Contract Revenue
NONINTEREST INCOME
Trust and investment services income	$	100	$	15	$	115	$	89	$	16	$	105
Investment banking and debt placement fees	—		69		69		—		78		78
Services charges on deposit accounts	45		32		77		59		27		86
Cards and payments income	43		69		112		42		27		69
Other noninterest income	3		—		3		3		—		3
Total revenue from contracts with customers	$	191	$	185	$	376	$	193	$	148	$	341
Other noninterest income (a)					$	274					$	278
Noninterest income from Other(b)					31						31
Total noninterest income					$	681					$	650

(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 20 (“Business Segment Reporting”) for more information.

	Nine months ended September 30, 2020						Nine months ended September 30, 2019
dollars in millions	Consumer Bank		Commercial Bank		Total Contract Revenue		Consumer Bank		Commercial Bank		Total Contract Revenue
NONINTEREST INCOME
Trust and investment services income	$	279	$	49	$	328	$	265	$	48	$	313
Investment banking and debt placement fees	—		176		176		—		188		188
Services charges on deposit accounts	138		91		229		169		82		251
Cards and payments income	118		147		265		123		81		204
Other noninterest income	7		—		7		10		—		10
Total revenue from contracts with customers	$	542	$	463	$	1,005	$	567	$	399	$	966
Other noninterest income (a)					$	747					$	752
Noninterest income from Other(b)					98						90
Total noninterest income					$	1,850					$	1,808

(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 20 (“Business Segment Reporting”) for more information.

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Basis of Presentation and Accounting Policies - Narrative (Details) - USD ($) $ in Millions			9 Months Ended	12 Months Ended
		Jan. 01, 2020	Sep. 30, 2020	Dec. 31, 2019	Jun. 30, 2020	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Adjustment to amortized cost basis of PCD loans		$ 4
Noncredit discount on PCD loans		$ 15
Cumulative effect from changes in accounting principle			$ (17,722)	$ (17,038)
Accounting Standards Update [Extensible List]			us-gaap:AccountingStandardsUpdate201613Member	us-gaap:AccountingStandardsUpdate201613Member
Retained Earnings
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect from changes in accounting principle			$ (12,375)	$ (12,469)	$ (12,154)	$ (12,209)	$ (12,005)	$ (11,556)
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect from changes in accounting principle	[1]			230
Deferred taxes recognized on adoption				$ 71

[1] Includes the impact of implementing ASU 2016-13, Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments. See Note 1 (“Basis of Presentation and Accounting Policies”) for more information on our adoption of this guidance and the impact to our results of operations.

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Basis of Presentation and Accounting Policies - Measurement of Credit Losses (Details) - USD ($) $ in Millions	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses	$ 1,730	$ 1,708	$ 900	$ 893	$ 890	$ 883
Total ALLL	1,772	1,751	910	904	902	897
Accrued expense and other liabilities			75
Total allowance for credit losses			985
Commercial Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses	1,181	1,113	751	746	747	743
Consumer Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses	549	595	149	147	143	140
Commercial and industrial | Commercial Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses	810	725	551	554	549	532
Commercial mortgage | Commercial Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses	279	292	143	134	139	142
Real estate — construction | Commercial Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses	34	41	22	23	24	33
Commercial lease financing | Commercial Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses	58	55	35	35	35	36
Real estate — residential mortgage | Consumer Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses	104	101	7	7	7	7
Home equity loans | Consumer Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses	183	197	31	33	36	35
Consumer direct loans | Consumer Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses	125	130	34	34	32	30
Consumer indirect loans | Consumer Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses	42	60	30	27	24	20
Impact of ASC 326 Adoption
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			204
Total ALLL			235
Accrued expense and other liabilities			70
Total allowance for credit losses			305
Impact of ASC 326 Adoption | Commercial Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			(124)
Impact of ASC 326 Adoption | Consumer Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			328
Impact of ASC 326 Adoption | Commercial and industrial | Commercial Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			(141)
Impact of ASC 326 Adoption | Commercial mortgage | Commercial Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			16
Impact of ASC 326 Adoption | Real estate — construction | Commercial Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			(7)
Impact of ASC 326 Adoption | Commercial lease financing | Commercial Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			8
Impact of ASC 326 Adoption | Real estate — residential mortgage | Consumer Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			77
Impact of ASC 326 Adoption | Home equity loans | Consumer Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			147
Impact of ASC 326 Adoption | Consumer direct loans | Consumer Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			63
Impact of ASC 326 Adoption | Consumer indirect loans | Consumer Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			6
As Reported Under ASC 326
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			1,104
Total ALLL			1,145
Accrued expense and other liabilities			145
Total allowance for credit losses			1,290
As Reported Under ASC 326 | Commercial Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			627
As Reported Under ASC 326 | Consumer Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			477
As Reported Under ASC 326 | Commercial and industrial | Commercial Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			410
As Reported Under ASC 326 | Commercial mortgage | Commercial Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			159
As Reported Under ASC 326 | Real estate — construction | Commercial Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			15
As Reported Under ASC 326 | Commercial lease financing | Commercial Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			43
As Reported Under ASC 326 | Real estate — residential mortgage | Consumer Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			84
As Reported Under ASC 326 | Real estate — residential mortgage | Consumer Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			84
As Reported Under ASC 326 | Home equity loans | Consumer Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			178
As Reported Under ASC 326 | Consumer direct loans | Consumer Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			97
As Reported Under ASC 326 | Credit cards | Consumer Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			82
As Reported Under ASC 326 | Consumer indirect loans | Consumer Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			36
Discontinued operations
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses	$ 42	$ 43	10	$ 11	$ 12	$ 14
Discontinued operations | Impact of ASC 326 Adoption
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			31
Discontinued operations | As Reported Under ASC 326
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses			$ 41

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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, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
EARNINGS
Income (loss) from continuing operations		$ 424	$ 413	$ 754	$ 1,242
Less: Net income (loss) attributable to noncontrolling interests		0	0	0	0
Income (loss) from continuing operations attributable to Key		424	413	754	1,242
Less: Dividends on Preferred Stock		27	30	80	70
Income (loss) from continuing operations attributable to Key common shareholders		397	383	674	1,172
Income (loss) from discontinued operations, net of taxes		4	3	7	6
Net income (loss) attributable to Key common shareholders		$ 401	$ 386	$ 681	$ 1,178
WEIGHTED-AVERAGE COMMON SHARES
Weighted-average common shares outstanding (000) (in shares)		967,804	988,319	967,632	998,268
Effect of common share options and other stock awards (in shares)		6,184	10,009	6,648	9,632
Weighted-average common shares and potential common shares outstanding (in shares)	[1]	973,988	998,328	974,280	1,007,900
EARNINGS PER COMMON SHARE
Income (loss) from continuing operations attributable to Key common shareholders (in usd per share)		$ 0.41	$ 0.39	$ 0.70	$ 1.17
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]	0.41	0.39	0.70	1.18
Income (loss) from continuing operations attributable to Key common shareholders - assuming dilution (in usd per share)		0.41	0.38	0.69	1.16
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]	$ 0.41	$ 0.39	$ 0.70	$ 1.17

[1] Assumes conversion of Common Share options and other stock awards and/or convertible preferred stock, as applicable.

[2] EPS may not foot due to rounding.

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Loan Portfolio - Loans by Category (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	$ 103,081	$ 94,646
Accrued interest	235	244
Commercial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	74,481	68,032
Accrued interest	133
Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	28,600	26,614
Accrued interest	102
Commercial and industrial | Commercial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	55,025	48,295
Commercial mortgage | Commercial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	13,059	13,491
Real estate — construction | Commercial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	1,947	1,558
Commercial real estate loans | Commercial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	15,006	15,049
Commercial lease financing | Commercial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	4,450	4,688
Real estate — residential mortgage | Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	8,715	7,023
Home equity loans | Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	9,488	10,274
Residential - Prime Loans | Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	18,203	17,297
Consumer direct loans | Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	4,395	3,513
Credit cards | Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	970	1,130
Consumer indirect loans | Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	5,032	4,674
Credit cards | Commercial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	128	144
Credit cards | Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	970	1,130
Collateral pledged | Commercial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	18	15
Education Lending | Discontinued operations
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	$ 743	$ 865

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Asset Quality - Changes in Allowance for Loan and Lease Losses by Loan Category (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 1,708	$ 890	$ 900	$ 883
Provision	150	199	934	335
Charge-offs	(151)	(213)	(362)	(384)
Recoveries	23	17	54	59
Ending balance	1,730	893	1,730	893
Total ALLL, including discontinued operations	1,772	904	1,772	904	$ 1,751	$ 910	$ 902	$ 897
Total provision, including discontinued operations	149	198	936	338
Total charge-offs, including discontinued operations	(151)	(214)	(366)	(393)
Total recoveries, including discontinued operations	23	18	57	62
Provision for losses on lending-related commitments	10	1	67	1
Amount realized from fraud incident		123
Commercial Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	1,113	747	751	743
Provision	181	169	797	252
Charge-offs	(124)	(177)	(266)	(277)
Recoveries	11	7	23	28
Ending balance	1,181	746	1,181	746
Consumer Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	595	143	149	140
Provision	(31)	30	137	83
Charge-offs	(27)	(36)	(96)	(107)
Recoveries	12	10	31	31
Ending balance	549	147	549	147
Commercial and industrial | Commercial Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	725	549	551	532
Provision	177	175	613	242
Charge-offs	(101)	(176)	(232)	(242)
Recoveries	9	6	19	22
Ending balance	810	554	810	554
Commercial mortgage | Commercial Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	292	139	143	142
Provision	(2)	(5)	135	(4)
Charge-offs	(13)	0	(18)	(6)
Recoveries	2	0	3	2
Ending balance	279	134	279	134
Real estate — construction | Commercial Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	41	24	22	33
Provision	(7)	(1)	19	(6)
Charge-offs	0	0	0	(4)
Recoveries	0	0	0	0
Ending balance	34	23	34	23
Commercial real estate loans | Commercial Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	333	163	165	175
Provision	(9)	(6)	154	(10)
Charge-offs	(13)	0	(18)	(10)
Recoveries	2	0	3	2
Ending balance	313	157	313	157
Commercial lease financing | Commercial Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	55	35	35	36
Provision	13	0	30	20
Charge-offs	(10)	(1)	(16)	(25)
Recoveries	0	1	1	4
Ending balance	58	35	58	35
Real estate — residential mortgage | Consumer Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	101	7	7	7
Provision	2	1	21	2
Charge-offs	0	(1)	(2)	(3)
Recoveries	1	0	1	1
Ending balance	104	7	104	7
Home equity loans | Consumer Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	197	36	31	35
Provision	(13)	1	9	8
Charge-offs	(4)	(6)	(10)	(16)
Recoveries	3	2	6	6
Ending balance	183	33	183	33
Consumer direct loans | Consumer Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	130	32	34	30
Provision	1	10	52	29
Charge-offs	(8)	(10)	(30)	(30)
Recoveries	2	2	6	5
Ending balance	125	34	125	34
Credit cards | Consumer Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	107	44	47	48
Provision	(5)	11	39	26
Charge-offs	(9)	(11)	(32)	(34)
Recoveries	2	2	6	6
Ending balance	95	46	95	46
Consumer indirect loans | Consumer Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	60	24	30	20
Provision	(16)	7	16	18
Charge-offs	(6)	(8)	(22)	(24)
Recoveries	4	4	12	13
Ending balance	42	27	42	27
Discontinued operations
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	43	12	10	14
Provision	(1)	(1)	2	3
Charge-offs	0	(1)	(4)	(9)
Recoveries	0	1	3	3
Ending balance	$ 42	$ 11	42	$ 11
Impact of ASC 326 Adoption
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			204
Total ALLL, including discontinued operations						235
Impact of ASC 326 Adoption | Commercial Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			(124)
Impact of ASC 326 Adoption | Consumer Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			328
Impact of ASC 326 Adoption | Commercial and industrial | Commercial Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			(141)
Impact of ASC 326 Adoption | Commercial mortgage | Commercial Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			16
Impact of ASC 326 Adoption | Real estate — construction | Commercial Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			(7)
Impact of ASC 326 Adoption | Commercial real estate loans | Commercial Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			9
Impact of ASC 326 Adoption | Commercial lease financing | Commercial Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			8
Impact of ASC 326 Adoption | Real estate — residential mortgage | Consumer Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			77
Impact of ASC 326 Adoption | Home equity loans | Consumer Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			147
Impact of ASC 326 Adoption | Consumer direct loans | Consumer Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			63
Impact of ASC 326 Adoption | Credit cards | Consumer Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			35
Impact of ASC 326 Adoption | Consumer indirect loans | Consumer Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			6
Impact of ASC 326 Adoption | Discontinued operations
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			31
As Reported Under ASC 326
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			1,104
Total ALLL, including discontinued operations						$ 1,145
As Reported Under ASC 326 | Commercial Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			627
As Reported Under ASC 326 | Consumer Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			477
As Reported Under ASC 326 | Commercial and industrial | Commercial Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			410
As Reported Under ASC 326 | Commercial mortgage | Commercial Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			159
As Reported Under ASC 326 | Real estate — construction | Commercial Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			15
As Reported Under ASC 326 | Commercial real estate loans | Commercial Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			174
As Reported Under ASC 326 | Commercial lease financing | Commercial Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			43
As Reported Under ASC 326 | Real estate — residential mortgage | Consumer Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			84
As Reported Under ASC 326 | Home equity loans | Consumer Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			178
As Reported Under ASC 326 | Consumer direct loans | Consumer Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			97
As Reported Under ASC 326 | Credit cards | Consumer Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			82
As Reported Under ASC 326 | Consumer indirect loans | Consumer Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			36
As Reported Under ASC 326 | Discontinued operations
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			$ 41

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Asset Quality - Additional Information (Details) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2020 USD ($) SecurityLoan	Sep. 30, 2019 USD ($) SecurityLoan	Sep. 30, 2020 USD ($) SecurityLoan	Sep. 30, 2019 USD ($) SecurityLoan	Dec. 31, 2019 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of unearned income (residential)	$ 103,081		$ 103,081		$ 94,646
Loan modifications and forbearance, CARES Act			4,500
Accrued interest	$ 235		$ 235		244
Percentage of carrying amount of our commercial nonperforming loans outstanding	77.00%		77.00%
Percentage of nonperforming loans outstanding face value	80.00%		80.00%
Percentage of loans held for sale and other nonperforming assets	87.00%		87.00%
Net reduction to interest income	$ 7	$ 7	$ 20	$ 24
Commitments outstanding to lend additional funds to borrowers (less than $1 million)	1		1		5
Financial receivable, modifications, subsequent default, recorded investment	1	$ 1	4	$ 5
Commercial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of unearned income (residential)	74,481		74,481		68,032
Accrued interest	$ 133		$ 133
TDRs, period for default			90 days
Number of loans | SecurityLoan	0	0
Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of unearned income (residential)	$ 28,600		$ 28,600		26,614
Accrued interest	$ 102		$ 102
TDRs, period for default			60 days
Number of loans | SecurityLoan	33	79
Continuing operations | Commercial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Increase in ALLL	$ 68
Increase in ALLL, percent	6.10%
Continuing operations | Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Increase in ALLL	$ (46)
Increase in ALLL, percent	(7.70%)
PPP
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of unearned income (residential)	$ 8,000		$ 8,000
Real estate — residential mortgage | Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of unearned income (residential)	8,715		$ 8,715		7,023
Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans | SecurityLoan			160	255
Commercial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans | SecurityLoan			0	0
Nonperforming financial instruments
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonperforming loans on nonaccrual status with no allowance	$ 456		$ 456
Real estate — residential mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financial receivable, modifications, subsequent default, recorded investment			$ 99		$ 97

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Asset Quality - Commercial Credit Exposure (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Financing Receivable, Credit Quality Indicator [Line Items]
Total	$ 103,081	$ 94,646
Accrued interest	235	244
Commercial Loans
Financing Receivable, Credit Quality Indicator [Line Items]
2020	15,761
2019	11,206
2018	7,966
2017	5,215
2016	3,705
Prior	7,889
Revolving Loans Amortized Cost Basis	22,510
Revolving Loans Converted to Term Loans Amortized Cost Basis	229
Total	74,481	68,032
Accrued interest	133
Commercial Loans | Commercial and industrial
Financing Receivable, Credit Quality Indicator [Line Items]
2020	13,373
2019	6,081
2018	4,739
2017	3,373
2016	2,380
Prior	3,310
Revolving Loans Amortized Cost Basis	21,593
Revolving Loans Converted to Term Loans Amortized Cost Basis	176
Total	55,025	48,295
Commercial Loans | Commercial and industrial | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
2020	13,328
2019	5,936
2018	4,512
2017	3,141
2016	2,223
Prior	3,018
Revolving Loans Amortized Cost Basis	19,876
Revolving Loans Converted to Term Loans Amortized Cost Basis	153
Total	52,187
Commercial Loans | Commercial and industrial | Criticized (Accruing)
Financing Receivable, Credit Quality Indicator [Line Items]
2020	39
2019	131
2018	164
2017	201
2016	137
Prior	251
Revolving Loans Amortized Cost Basis	1,434
Revolving Loans Converted to Term Loans Amortized Cost Basis	22
Total	2,379
Commercial Loans | Commercial and industrial | Criticized (Nonaccruing)
Financing Receivable, Credit Quality Indicator [Line Items]
2020	6
2019	14
2018	63
2017	31
2016	20
Prior	41
Revolving Loans Amortized Cost Basis	283
Revolving Loans Converted to Term Loans Amortized Cost Basis	1
Total	459
Commercial Loans | Commercial mortgage
Financing Receivable, Credit Quality Indicator [Line Items]
2020	1,344
2019	3,227
2018	1,946
2017	1,034
2016	965
Prior	3,603
Revolving Loans Amortized Cost Basis	892
Revolving Loans Converted to Term Loans Amortized Cost Basis	48
Total	13,059	13,491
Commercial Loans | Commercial mortgage | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
2020	1,341
2019	3,186
2018	1,877
2017	918
2016	879
Prior	3,267
Revolving Loans Amortized Cost Basis	807
Revolving Loans Converted to Term Loans Amortized Cost Basis	46
Total	12,321
Commercial Loans | Commercial mortgage | Criticized (Accruing)
Financing Receivable, Credit Quality Indicator [Line Items]
2020	3
2019	40
2018	65
2017	113
2016	85
Prior	246
Revolving Loans Amortized Cost Basis	80
Revolving Loans Converted to Term Loans Amortized Cost Basis	2
Total	634
Commercial Loans | Commercial mortgage | Criticized (Nonaccruing)
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	1
2018	4
2017	3
2016	1
Prior	90
Revolving Loans Amortized Cost Basis	5
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	104
Commercial Loans | Real estate — construction
Financing Receivable, Credit Quality Indicator [Line Items]
2020	242
2019	704
2018	642
2017	226
2016	75
Prior	28
Revolving Loans Amortized Cost Basis	25
Revolving Loans Converted to Term Loans Amortized Cost Basis	5
Total	1,947	1,558
Commercial Loans | Real estate — construction | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
2020	242
2019	701
2018	624
2017	226
2016	34
Prior	25
Revolving Loans Amortized Cost Basis	24
Revolving Loans Converted to Term Loans Amortized Cost Basis	5
Total	1,881
Commercial Loans | Real estate — construction | Criticized (Accruing)
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	3
2018	18
2017	0
2016	41
Prior	2
Revolving Loans Amortized Cost Basis	1
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	65
Commercial Loans | Real estate — construction | Criticized (Nonaccruing)
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	0
2018	0
2017	0
Prior	1
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	1
Commercial Loans | Commercial lease financing
Financing Receivable, Credit Quality Indicator [Line Items]
2020	802
2019	1,194
2018	639
2017	582
2016	285
Prior	948
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	4,450	$ 4,688
Commercial Loans | Commercial lease financing | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
2020	793
2019	1,180
2018	620
2017	561
2016	273
Prior	939
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	4,366
Commercial Loans | Commercial lease financing | Criticized (Accruing)
Financing Receivable, Credit Quality Indicator [Line Items]
2020	9
2019	14
2018	18
2017	19
2016	9
Prior	9
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	78
Commercial Loans | Commercial lease financing | Criticized (Nonaccruing)
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	0
2018	1
2017	2
2016	3
Prior	0
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	$ 6

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Asset Quality Asset Quality - Consumer Credit Exposure (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Financing Receivable, Credit Quality Indicator [Line Items]
Total	$ 103,081	$ 94,646
Accrued interest	235	244
Consumer Loans
Financing Receivable, Credit Quality Indicator [Line Items]
2020	7,552
2019	6,066
2018	1,727
2017	1,190
2016	1,267
Prior	3,616
Revolving Loans Amortized Cost Basis	6,248
Revolving Loans Converted to Term Loans Amortized Cost Basis	934
Total	28,600	26,614
Accrued interest	102
Consumer Loans | Real estate — residential mortgage
Financing Receivable, Credit Quality Indicator [Line Items]
2020	3,126
2019	2,160
2018	358
2017	361
2016	737
Prior	1,972
Revolving Loans Amortized Cost Basis	1
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	8,715	7,023
Consumer Loans | Real estate — residential mortgage | FICO Score, 750 and above
Financing Receivable, Credit Quality Indicator [Line Items]
2020	2,561
2019	1,774
2018	242
2017	286
2016	604
Prior	1,372
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	6,839
Consumer Loans | Real estate — residential mortgage | FICO Score, 660 to 749
Financing Receivable, Credit Quality Indicator [Line Items]
2020	550
2019	350
2018	88
2017	58
2016	108
Prior	362
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	1,516
Consumer Loans | Real estate — residential mortgage | FICO Score, Less than 660
Financing Receivable, Credit Quality Indicator [Line Items]
2020	15
2019	34
2018	24
2017	11
2016	23
Prior	183
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	290
Consumer Loans | Real estate — residential mortgage | FICO Score, No Score
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	2
2018	4
2017	6
2016	2
Prior	55
Revolving Loans Amortized Cost Basis	1
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	70
Consumer Loans | Home equity loans
Financing Receivable, Credit Quality Indicator [Line Items]
2020	881
2019	718
2018	311
2017	340
2016	315
Prior	1,352
Revolving Loans Amortized Cost Basis	4,637
Revolving Loans Converted to Term Loans Amortized Cost Basis	934
Total	9,488	10,274
Consumer Loans | Home equity loans | FICO Score, 750 and above
Financing Receivable, Credit Quality Indicator [Line Items]
2020	644
2019	417
2018	166
2017	192
2016	185
Prior	815
Revolving Loans Amortized Cost Basis	2,874
Revolving Loans Converted to Term Loans Amortized Cost Basis	639
Total	5,932
Consumer Loans | Home equity loans | FICO Score, 660 to 749
Financing Receivable, Credit Quality Indicator [Line Items]
2020	213
2019	249
2018	115
2017	119
2016	96
Prior	380
Revolving Loans Amortized Cost Basis	1,308
Revolving Loans Converted to Term Loans Amortized Cost Basis	229
Total	2,709
Consumer Loans | Home equity loans | FICO Score, Less than 660
Financing Receivable, Credit Quality Indicator [Line Items]
2020	22
2019	50
2018	29
2017	29
2016	34
Prior	155
Revolving Loans Amortized Cost Basis	450
Revolving Loans Converted to Term Loans Amortized Cost Basis	65
Total	834
Consumer Loans | Home equity loans | FICO Score, No Score
Financing Receivable, Credit Quality Indicator [Line Items]
2020	2
2019	2
2018	1
2017	0
2016	0
Prior	2
Revolving Loans Amortized Cost Basis	5
Revolving Loans Converted to Term Loans Amortized Cost Basis	1
Total	13
Consumer Loans | Consumer direct loans
Financing Receivable, Credit Quality Indicator [Line Items]
2020	1,844
2019	1,380
2018	266
2017	91
2016	52
Prior	122
Revolving Loans Amortized Cost Basis	640
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	4,395	3,513
Consumer Loans | Consumer direct loans | FICO Score, 750 and above
Financing Receivable, Credit Quality Indicator [Line Items]
2020	1,426
2019	1,008
2018	131
2017	39
2016	21
Prior	65
Revolving Loans Amortized Cost Basis	127
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	2,817
Consumer Loans | Consumer direct loans | FICO Score, 660 to 749
Financing Receivable, Credit Quality Indicator [Line Items]
2020	367
2019	295
2018	91
2017	26
2016	16
Prior	33
Revolving Loans Amortized Cost Basis	263
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	1,091
Consumer Loans | Consumer direct loans | FICO Score, Less than 660
Financing Receivable, Credit Quality Indicator [Line Items]
2020	17
2019	38
2018	22
2017	9
2016	5
Prior	12
Revolving Loans Amortized Cost Basis	86
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	189
Consumer Loans | Consumer direct loans | FICO Score, No Score
Financing Receivable, Credit Quality Indicator [Line Items]
2020	34
2019	39
2018	22
2017	17
2016	10
Prior	12
Revolving Loans Amortized Cost Basis	164
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	298
Consumer Loans | Credit cards
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	0
2018	0
2017	0
2016	0
Prior	0
Revolving Loans Amortized Cost Basis	970
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	970	1,130
Consumer Loans | Credit cards | FICO Score, 750 and above
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	0
2018	0
2017	0
2016	0
Prior	0
Revolving Loans Amortized Cost Basis	469
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	469
Consumer Loans | Credit cards | FICO Score, 660 to 749
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	0
2018	0
2017	0
2016	0
Prior	0
Revolving Loans Amortized Cost Basis	405
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	405
Consumer Loans | Credit cards | FICO Score, Less than 660
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	0
2018	0
2017	0
2016	0
Prior	0
Revolving Loans Amortized Cost Basis	95
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	95
Consumer Loans | Credit cards | FICO Score, No Score
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	0
2018	0
2017	0
2016	0
Prior	0
Revolving Loans Amortized Cost Basis	1
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	1
Consumer Loans | Consumer indirect loans
Financing Receivable, Credit Quality Indicator [Line Items]
2020	1,701
2019	1,808
2018	792
2017	398
2016	163
Prior	170
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	5,032	$ 4,674
Consumer Loans | Consumer indirect loans | FICO Score, 750 and above
Financing Receivable, Credit Quality Indicator [Line Items]
2020	944
2019	991
2018	415
2017	221
2016	87
Prior	80
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	2,738
Consumer Loans | Consumer indirect loans | FICO Score, 660 to 749
Financing Receivable, Credit Quality Indicator [Line Items]
2020	595
2019	633
2018	264
2017	115
2016	46
Prior	57
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	1,710
Consumer Loans | Consumer indirect loans | FICO Score, Less than 660
Financing Receivable, Credit Quality Indicator [Line Items]
2020	125
2019	184
2018	113
2017	62
2016	30
Prior	33
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	547
Consumer Loans | Consumer indirect loans | FICO Score, No Score
Financing Receivable, Credit Quality Indicator [Line Items]
2020	37
2019	0
2018	0
2017	0
2016	0
Prior	0
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term Loans Amortized Cost Basis	0
Total	$ 37

XML

Asset Quality - Aging Analysis of Past Due and Current Loans (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Financing Receivable, Past Due [Line Items]
Current	$ 101,838	$ 93,197
Days Past Due	1,243	1,003
Purchased Credit Impaired		446
Total	103,081	94,646
Accrued interest	235	244
Commercial Loans
Financing Receivable, Past Due [Line Items]
Current	73,645	67,224
Days Past Due	836	635
Purchased Credit Impaired		173
Total	74,481	68,032
Accrued interest	133
Consumer Loans
Financing Receivable, Past Due [Line Items]
Current	28,193	25,973
Days Past Due	407	368
Purchased Credit Impaired		273
Total	28,600	26,614
Accrued interest	102
Commercial and industrial | Commercial Loans
Financing Receivable, Past Due [Line Items]
Current	54,385	47,768
Days Past Due	640	479
Purchased Credit Impaired		48
Total	55,025	48,295
Commercial mortgage | Commercial Loans
Financing Receivable, Past Due [Line Items]
Current	12,900	13,258
Days Past Due	159	109
Purchased Credit Impaired		124
Total	13,059	13,491
Commercial real estate: Construction | Commercial Loans
Financing Receivable, Past Due [Line Items]
Current	1,942	1,551
Days Past Due	5	6
Purchased Credit Impaired		1
Total	1,947	1,558
Commercial real estate loans | Commercial Loans
Financing Receivable, Past Due [Line Items]
Current	14,842	14,809
Days Past Due	164	115
Purchased Credit Impaired		125
Total	15,006	15,049
Commercial lease financing | Commercial Loans
Financing Receivable, Past Due [Line Items]
Current	4,418	4,647
Days Past Due	32	41
Purchased Credit Impaired		0
Total	4,450	4,688
Real estate — residential mortgage | Consumer Loans
Financing Receivable, Past Due [Line Items]
Current	8,594	6,705
Days Past Due	121	61
Purchased Credit Impaired		257
Total	8,715	7,023
Home equity loans | Consumer Loans
Financing Receivable, Past Due [Line Items]
Current	9,275	10,071
Days Past Due	213	190
Purchased Credit Impaired		13
Total	9,488	10,274
Consumer direct loans | Consumer Loans
Financing Receivable, Past Due [Line Items]
Current	4,377	3,484
Days Past Due	18	26
Purchased Credit Impaired		3
Total	4,395	3,513
Credit cards | Commercial Loans
Financing Receivable, Past Due [Line Items]
Total	128	144
Credit cards | Consumer Loans
Financing Receivable, Past Due [Line Items]
Current	956	1,104
Days Past Due	14	26
Purchased Credit Impaired		0
Total	970	1,130
Consumer indirect loans | Consumer Loans
Financing Receivable, Past Due [Line Items]
Current	4,991	4,609
Days Past Due	41	65
Purchased Credit Impaired		0
Total	5,032	4,674
30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Days Past Due	237	228
30-59 Days Past Due | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	149	143
30-59 Days Past Due | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	88	85
30-59 Days Past Due | Commercial and industrial | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	104	110
30-59 Days Past Due | Commercial mortgage | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	23	8
30-59 Days Past Due | Commercial real estate: Construction | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	1	3
30-59 Days Past Due | Commercial real estate loans | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	24	11
30-59 Days Past Due | Commercial lease financing | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	21	22
30-59 Days Past Due | Real estate — residential mortgage | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	17	7
30-59 Days Past Due | Home equity loans | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	42	30
30-59 Days Past Due | Consumer direct loans | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	7	10
30-59 Days Past Due | Credit cards | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	4	6
30-59 Days Past Due | Consumer indirect loans | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	18	32
60-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Days Past Due	99	101
60-89 Days Past Due | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	72	68
60-89 Days Past Due | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	27	33
60-89 Days Past Due | Commercial and industrial | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	53	52
60-89 Days Past Due | Commercial mortgage | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	14	5
60-89 Days Past Due | Commercial real estate: Construction | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	2	0
60-89 Days Past Due | Commercial real estate loans | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	16	5
60-89 Days Past Due | Commercial lease financing | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	3	11
60-89 Days Past Due | Real estate — residential mortgage | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	5	5
60-89 Days Past Due | Home equity loans | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	12	10
60-89 Days Past Due | Consumer direct loans | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	4	5
60-89 Days Past Due | Credit cards | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	2	5
60-89 Days Past Due | Consumer indirect loans | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	4	8
90 and Greater Days Past Due
Financing Receivable, Past Due [Line Items]
Days Past Due	73	97
90 and Greater Days Past Due | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	45	69
90 and Greater Days Past Due | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	28	28
90 and Greater Days Past Due | Commercial and industrial | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	24	53
90 and Greater Days Past Due | Commercial mortgage | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	18	13
90 and Greater Days Past Due | Commercial real estate: Construction | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	1	1
90 and Greater Days Past Due | Commercial real estate loans | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	19	14
90 and Greater Days Past Due | Commercial lease financing | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	2	2
90 and Greater Days Past Due | Real estate — residential mortgage | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	3	1
90 and Greater Days Past Due | Home equity loans | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	13	5
90 and Greater Days Past Due | Consumer direct loans | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	4	7
90 and Greater Days Past Due | Credit cards | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	6	12
90 and Greater Days Past Due | Consumer indirect loans | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	2	3
Nonperforming financial instruments
Financing Receivable, Past Due [Line Items]
Days Past Due	834	577
Nonperforming financial instruments | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	570	355
Nonperforming financial instruments | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	264	222
Nonperforming financial instruments | Commercial and industrial | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	459	264
Nonperforming financial instruments | Commercial mortgage | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	104	83
Nonperforming financial instruments | Commercial real estate: Construction | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	1	2
Nonperforming financial instruments | Commercial real estate loans | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	105	85
Nonperforming financial instruments | Commercial lease financing | Commercial Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	6	6
Nonperforming financial instruments | Real estate — residential mortgage | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	96	48
Nonperforming financial instruments | Home equity loans | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	146	145
Nonperforming financial instruments | Consumer direct loans | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	3	4
Nonperforming financial instruments | Credit cards | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	2	3
Nonperforming financial instruments | Consumer indirect loans | Consumer Loans
Financing Receivable, Past Due [Line Items]
Days Past Due	$ 17	$ 22

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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, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Financing Receivable, Troubled Debt Restructuring [Line Items]
Total commercial and consumer TDRs	$ 19	$ 20	$ 48	$ 57
Commercial Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Extension of Maturity Date	0	6	8	11
Payment or Covenant Modification/Deferment	0	0	0	1
Bankruptcy Plan Modification	0	0	0	0
Increase in new commitment or new money	0	2	0	12
Total	0	8	8	24
Consumer Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Interest rate reduction	13	4	22	12
Other	6	8	18	21
Total	$ 19	$ 12	$ 40	$ 33

XML

Asset Quality - Summary of Post-Modification Outstanding Recorded Investment TDRs (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Financing Receivables, Modifications, Rollforward [Roll Forward]
Balance at beginning of the period	$ 310	$ 395	$ 347	$ 399
Additions	26	20	65	88
Payments	(22)	(65)	(75)	(123)
Charge-offs	(8)	(3)	(31)	(17)
Balance at end of period	$ 306	$ 347	$ 306	$ 347

XML

Asset Quality - Breakdown of Nonperforming TDRs by Loans Category (Details) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2020 USD ($) SecurityLoan	Dec. 31, 2019 USD ($) SecurityLoan
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	6,138	6,212
Pre-modification Outstanding Recorded Investment	$ 387	$ 425
Post-modification Outstanding Recorded Investment	$ 306	$ 347
Prior-Year accruing
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	3,881	3,590
Pre-modification Outstanding Recorded Investment	$ 187	$ 211
Post-modification Outstanding Recorded Investment	$ 138	$ 164
Prior-Year accruing | Commercial Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	5	7
Pre-modification Outstanding Recorded Investment	$ 5	$ 30
Post-modification Outstanding Recorded Investment	$ 2	$ 25
Prior-Year accruing | Consumer Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	3,876	3,583
Pre-modification Outstanding Recorded Investment	$ 182	$ 181
Post-modification Outstanding Recorded Investment	$ 136	$ 139
Nonperforming financial instruments
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	2,257	2,622
Pre-modification Outstanding Recorded Investment	$ 200	$ 214
Post-modification Outstanding Recorded Investment	$ 168	$ 183
Nonperforming financial instruments | Commercial Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	58	57
Pre-modification Outstanding Recorded Investment	$ 113	$ 136
Post-modification Outstanding Recorded Investment	$ 89	$ 111
Nonperforming financial instruments | Consumer Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	2,199	2,565
Pre-modification Outstanding Recorded Investment	$ 87	$ 78
Post-modification Outstanding Recorded Investment	$ 79	$ 72
Commercial and industrial | Prior-Year accruing | Commercial Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	4	6
Pre-modification Outstanding Recorded Investment	$ 5	$ 30
Post-modification Outstanding Recorded Investment	$ 2	$ 25
Commercial and industrial | Nonperforming financial instruments | Commercial Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	51	51
Pre-modification Outstanding Recorded Investment	$ 51	$ 72
Post-modification Outstanding Recorded Investment	$ 39	$ 53
Commercial mortgage | Prior-Year accruing | Commercial Real Estate
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	1	1
Pre-modification Outstanding Recorded Investment	$ 0	$ 0
Post-modification Outstanding Recorded Investment	$ 0	$ 0
Commercial mortgage | Nonperforming financial instruments | Commercial Real Estate
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	7	6
Pre-modification Outstanding Recorded Investment	$ 62	$ 64
Post-modification Outstanding Recorded Investment	$ 50	$ 58
Commercial real estate loans | Prior-Year accruing | Commercial Real Estate
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	1	1
Pre-modification Outstanding Recorded Investment	$ 0	$ 0
Post-modification Outstanding Recorded Investment	$ 0	$ 0
Commercial real estate loans | Nonperforming financial instruments | Commercial Real Estate
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	7	6
Pre-modification Outstanding Recorded Investment	$ 62	$ 64
Post-modification Outstanding Recorded Investment	$ 50	$ 58
Real estate — residential mortgage | Prior-Year accruing | Consumer Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	472	493
Pre-modification Outstanding Recorded Investment	$ 35	$ 37
Post-modification Outstanding Recorded Investment	$ 29	$ 31
Real estate — residential mortgage | Nonperforming financial instruments | Consumer Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	271	181
Pre-modification Outstanding Recorded Investment	$ 28	$ 13
Post-modification Outstanding Recorded Investment	$ 27	$ 11
Home equity loans | Prior-Year accruing | Consumer Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	1,829	1,751
Pre-modification Outstanding Recorded Investment	$ 108	$ 104
Post-modification Outstanding Recorded Investment	$ 87	$ 84
Home equity loans | Nonperforming financial instruments | Consumer Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	629	713
Pre-modification Outstanding Recorded Investment	$ 40	$ 42
Post-modification Outstanding Recorded Investment	$ 37	$ 41
Consumer direct loans | Prior-Year accruing | Consumer Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	178	139
Pre-modification Outstanding Recorded Investment	$ 4	$ 4
Post-modification Outstanding Recorded Investment	$ 2	$ 3
Consumer direct loans | Nonperforming financial instruments | Consumer Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	153	172
Pre-modification Outstanding Recorded Investment	$ 2	$ 2
Post-modification Outstanding Recorded Investment	$ 2	$ 2
Credit cards | Prior-Year accruing | Consumer Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	584	486
Pre-modification Outstanding Recorded Investment	$ 4	$ 3
Post-modification Outstanding Recorded Investment	$ 1	$ 1
Credit cards | Nonperforming financial instruments | Consumer Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	279	368
Pre-modification Outstanding Recorded Investment	$ 2	$ 2
Post-modification Outstanding Recorded Investment	$ 1	$ 2
Consumer indirect loans | Prior-Year accruing | Consumer Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	813	714
Pre-modification Outstanding Recorded Investment	$ 31	$ 33
Post-modification Outstanding Recorded Investment	$ 17	$ 20
Consumer indirect loans | Nonperforming financial instruments | Consumer Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Loans | SecurityLoan	867	1,131
Pre-modification Outstanding Recorded Investment	$ 15	$ 19
Post-modification Outstanding Recorded Investment	$ 12	$ 16

XML

Asset Quality - Changes in Liability for Credit Losses on Lending Related Commitments (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended		12 Months Ended
	Jan. 01, 2020	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
Off-Balance Sheet, Credit Loss, Liability [Roll Forward]
Balance at the end of the prior period	$ 68	$ 198	$ 64	$ 68	$ 64	$ 64
Liability for credit losses on contingent guarantees at the end of the prior period							$ 0	$ 7	$ 0	$ 0
Balance at beginning of period	68	208	65	208	65	64	$ 198	68	$ 64	$ 64
Provision (credit) for losses on off balance sheet exposures		10	1	67	1
Balance at end of period		$ 208	$ 65	208	$ 65	68
Impact of ASC 326 Adoption
Off-Balance Sheet, Credit Loss, Liability [Roll Forward]
Cumulative effect from changes in accounting principle						66
As Reported Under ASC 326
Off-Balance Sheet, Credit Loss, Liability [Roll Forward]
Balance at the end of the prior period	141			141
Balance at beginning of period	141			$ 141		141		$ 141
Balance at end of period						$ 141
Other Financial Assets | Impact of ASC 326 Adoption
Off-Balance Sheet, Credit Loss, Liability [Roll Forward]
Cumulative effect from changes in accounting principle	$ 4

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Fair Value Measurements - Fair Value of Assets and Liabilities Measured on Recurring Basis (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019	Sep. 30, 2019
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	$ 733,000,000	$ 1,040,000,000
Securities available for sale	26,895,000,000	21,843,000,000
Loans, net of unearned income (residential)	103,081,000,000	94,646,000,000
Loans held for sale (residential)		0
Derivative assets, netting adjustments	(490,000,000)		$ (473,000,000)
Total derivative assets	1,946,000,000	780,000,000
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, netting adjustments	(679,000,000)		$ (335,000,000)
U.S. Treasury, agencies and corporations
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	4,464,000,000	334,000,000
States and political subdivisions
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	3,000,000	4,000,000
Other securities
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	12,000,000	11,000,000
Agency residential mortgage-backed securities
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	1,326,000,000	1,714,000,000
Mortgage-backed securities | Agency commercial mortgage-backed securities
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	7,358,000,000	6,997,000,000
Other
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	44,000,000
Recurring
ASSETS MEASURED ON A RECURRING BASIS
Total short-term investments	1,000,000,000	0
Total trading account securities	716,000,000	995,000,000
Commercial loans	17,000,000	45,000,000
Total trading account assets	733,000,000	1,040,000,000
Securities available for sale	26,895,000,000	21,843,000,000
Total other investments	81,000,000	90,000,000
Loans, net of unearned income (residential)	8,000,000	4,000,000
Loans held for sale (residential)	288,000,000	140,000,000
Derivative assets, gross	2,436,000,000	1,253,000,000
Derivative assets, netting adjustments	(490,000,000)	(473,000,000)
Total derivative assets	1,946,000,000	780,000,000
Accrued income and other assets	0	0
Total assets at fair value	30,951,000,000	23,897,000,000
LIABILITIES MEASURED ON A RECURRING BASIS
Total liabilities on a recurring basis at fair value	986,000,000	903,000,000
Recurring | U.S. Treasury Bills
ASSETS MEASURED ON A RECURRING BASIS
Total short-term investments	1,000,000,000	0
Recurring | U.S. Treasury, agencies and corporations
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	611,000,000	843,000,000
Securities available for sale	4,464,000,000	334,000,000
Recurring | States and political subdivisions
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	52,000,000	30,000,000
Securities available for sale	3,000,000	4,000,000
Recurring | Other securities
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	13,000,000	44,000,000
Securities available for sale	12,000,000	11,000,000
Recurring | Agency commercial mortgage-backed securities
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	7,358,000,000	6,997,000,000
Recurring | Principal investments, Direct
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	1,000,000	1,000,000
Recurring | Principal Investments
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	61,000,000	69,000,000
Recurring | Equity Investments, Direct
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	12,000,000	12,000,000
Recurring | Equity Investments
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	20,000,000	21,000,000
Recurring | Mortgage-backed securities
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	40,000,000	78,000,000
Recurring | Mortgage-backed securities | Agency residential mortgage-backed securities
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	1,326,000,000	1,714,000,000
Recurring | Short positions
LIABILITIES MEASURED ON A RECURRING BASIS
Short positions	818,000,000	705,000,000
Recurring | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	847,000,000	533,000,000
Derivative liabilities, netting adjustments	(679,000,000)	(335,000,000)
Total derivative liabilities	168,000,000	198,000,000
Recurring | Interest rate
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	1,827,000,000	963,000,000
Recurring | Interest rate | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	306,000,000	253,000,000
Recurring | Foreign exchange
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	74,000,000	67,000,000
Recurring | Foreign exchange | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	68,000,000	60,000,000
Recurring | Commodity
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	462,000,000	208,000,000
Recurring | Commodity | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	445,000,000	200,000,000
Recurring | Credit
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	3,000,000	1,000,000
Recurring | Credit | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	15,000,000	10,000,000
Recurring | Other
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	70,000,000	14,000,000
Recurring | Other | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	13,000,000	10,000,000
Level 1 | Recurring
ASSETS MEASURED ON A RECURRING BASIS
Total short-term investments	0	0
Total trading account securities	1,000,000	0
Commercial loans	0	0
Total trading account assets	1,000,000	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	56,000,000	49,000,000
Derivative assets, netting adjustments	0	0
Total derivative assets	56,000,000	49,000,000
Accrued income and other assets	0	0
Total assets at fair value	57,000,000	49,000,000
LIABILITIES MEASURED ON A RECURRING BASIS
Total liabilities on a recurring basis at fair value	340,000,000	62,000,000
Level 1 | Recurring | U.S. Treasury Bills
ASSETS MEASURED ON A RECURRING BASIS
Total short-term investments	0	0
Level 1 | Recurring | U.S. Treasury, agencies and corporations
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	0	0
Securities available for sale	0	0
Level 1 | Recurring | States and political subdivisions
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	0	0
Securities available for sale	0	0
Level 1 | Recurring | Other securities
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	1,000,000	0
Securities available for sale	0	0
Level 1 | Recurring | Agency commercial mortgage-backed securities
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	0	0
Level 1 | Recurring | Principal investments, Direct
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	0	0
Level 1 | Recurring | Principal Investments
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	0	0
Level 1 | Recurring | Equity Investments, Direct
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	0	0
Level 1 | Recurring | Equity Investments
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	0	0
Level 1 | Recurring | Mortgage-backed securities
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	0	0
Level 1 | Recurring | Mortgage-backed securities | Agency residential mortgage-backed securities
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	0	0
Level 1 | Recurring | Short positions
LIABILITIES MEASURED ON A RECURRING BASIS
Short positions	289,000,000	19,000,000
Level 1 | Recurring | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	51,000,000	43,000,000
Derivative liabilities, netting adjustments	0	0
Total derivative liabilities	51,000,000	43,000,000
Level 1 | Recurring | Interest rate
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	0	0
Level 1 | Recurring | Interest rate | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	0	0
Level 1 | Recurring | Foreign exchange
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	56,000,000	49,000,000
Level 1 | Recurring | Foreign exchange | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	51,000,000	43,000,000
Level 1 | Recurring | Commodity
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	0	0
Level 1 | Recurring | Commodity | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	0	0
Level 1 | Recurring | Credit
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	0	0
Level 1 | Recurring | Credit | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	0	0
Level 1 | Recurring | Other
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	0	0
Level 1 | Recurring | Other | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	0	0
Level 2 | Recurring
ASSETS MEASURED ON A RECURRING BASIS
Total short-term investments	1,000,000,000	0
Total trading account securities	688,000,000	995,000,000
Commercial loans	17,000,000	45,000,000
Total trading account assets	705,000,000	1,040,000,000
Securities available for sale	26,883,000,000	21,832,000,000
Total other investments	0	0
Loans, net of unearned income (residential)	0	0
Loans held for sale (residential)	287,000,000	140,000,000
Derivative assets, gross	2,253,000,000	1,176,000,000
Derivative assets, netting adjustments	0	0
Total derivative assets	2,253,000,000	1,176,000,000
Accrued income and other assets	0	0
Total assets at fair value	30,128,000,000	24,188,000,000
LIABILITIES MEASURED ON A RECURRING BASIS
Total liabilities on a recurring basis at fair value	1,310,000,000	1,167,000,000
Level 2 | Recurring | U.S. Treasury Bills
ASSETS MEASURED ON A RECURRING BASIS
Total short-term investments	1,000,000,000	0
Level 2 | Recurring | U.S. Treasury, agencies and corporations
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	611,000,000	843,000,000
Securities available for sale	4,464,000,000	334,000,000
Level 2 | Recurring | States and political subdivisions
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	52,000,000	30,000,000
Securities available for sale	3,000,000	4,000,000
Level 2 | Recurring | Other securities
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	12,000,000	44,000,000
Securities available for sale	0	0
Level 2 | Recurring | Agency commercial mortgage-backed securities
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	7,358,000,000	6,997,000,000
Level 2 | Recurring | Principal investments, Direct
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	0	0
Level 2 | Recurring | Principal Investments
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	0	0
Level 2 | Recurring | Equity Investments, Direct
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	0	0
Level 2 | Recurring | Equity Investments
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	0	0
Level 2 | Recurring | Mortgage-backed securities
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	13,000,000	78,000,000
Level 2 | Recurring | Mortgage-backed securities | Agency residential mortgage-backed securities
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	1,326,000,000	1,714,000,000
Level 2 | Recurring | Short positions
LIABILITIES MEASURED ON A RECURRING BASIS
Short positions	529,000,000	686,000,000
Level 2 | Recurring | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	781,000,000	481,000,000
Derivative liabilities, netting adjustments	0	0
Total derivative liabilities	781,000,000	481,000,000
Level 2 | Recurring | Interest rate
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	1,746,000,000	941,000,000
Level 2 | Recurring | Interest rate | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	306,000,000	253,000,000
Level 2 | Recurring | Foreign exchange
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	18,000,000	18,000,000
Level 2 | Recurring | Foreign exchange | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	17,000,000	17,000,000
Level 2 | Recurring | Commodity
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	462,000,000	208,000,000
Level 2 | Recurring | Commodity | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	445,000,000	200,000,000
Level 2 | Recurring | Credit
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	1,000,000	0
Level 2 | Recurring | Credit | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	0	1,000,000
Level 2 | Recurring | Other
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	26,000,000	9,000,000
Level 2 | Recurring | Other | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	13,000,000	10,000,000
Level 3 | Recurring
ASSETS MEASURED ON A RECURRING BASIS
Total short-term investments	0	0
Total trading account securities	27,000,000	0
Commercial loans	0	0
Total trading account assets	27,000,000	0
Securities available for sale	12,000,000	11,000,000
Total other investments	13,000,000	13,000,000
Loans, net of unearned income (residential)	8,000,000	4,000,000
Loans held for sale (residential)	1,000,000	0
Derivative assets, gross	127,000,000	28,000,000
Derivative assets, netting adjustments	0	0
Total derivative assets	127,000,000	28,000,000
Accrued income and other assets	0	0
Total assets at fair value	188,000,000	56,000,000
LIABILITIES MEASURED ON A RECURRING BASIS
Total liabilities on a recurring basis at fair value	15,000,000	9,000,000
Level 3 | Recurring | U.S. Treasury Bills
ASSETS MEASURED ON A RECURRING BASIS
Total short-term investments	0	0
Level 3 | Recurring | U.S. Treasury, agencies and corporations
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	0	0
Securities available for sale	0	0
Level 3 | Recurring | States and political subdivisions
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	0	0
Securities available for sale	0	0
Level 3 | Recurring | Other securities
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	0	0
Securities available for sale	12,000,000	11,000,000
Level 3 | Recurring | Agency commercial mortgage-backed securities
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	0	0
Level 3 | Recurring | Principal investments, Direct
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	1,000,000	1,000,000
Level 3 | Recurring | Principal Investments
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	1,000,000	1,000,000
Level 3 | Recurring | Equity Investments, Direct
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	12,000,000	12,000,000
Level 3 | Recurring | Equity Investments
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	12,000,000	12,000,000
Level 3 | Recurring | Mortgage-backed securities
ASSETS MEASURED ON A RECURRING BASIS
Total trading account securities	27,000,000	0
Level 3 | Recurring | Mortgage-backed securities | Agency residential mortgage-backed securities
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	0	0
Level 3 | Recurring | Short positions
LIABILITIES MEASURED ON A RECURRING BASIS
Short positions	0	0
Level 3 | Recurring | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	15,000,000	9,000,000
Derivative liabilities, netting adjustments	0	0
Total derivative liabilities	15,000,000	9,000,000
Level 3 | Recurring | Interest rate
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	81,000,000	22,000,000
Level 3 | Recurring | Interest rate | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	0	0
Level 3 | Recurring | Foreign exchange
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	0	0
Level 3 | Recurring | Foreign exchange | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	0	0
Level 3 | Recurring | Commodity
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	0	0
Level 3 | Recurring | Commodity | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	0	0
Level 3 | Recurring | Credit
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross	2,000,000	1,000,000
Level 3 | Recurring | Credit | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	15,000,000	9,000,000
Level 3 | Recurring | Other
ASSETS MEASURED ON A RECURRING BASIS
Derivative assets, gross		5,000,000
Level 3 | Recurring | Other | Long positions
LIABILITIES MEASURED ON A RECURRING BASIS
Derivative liabilities, gross	0	0
Measured at NAV | Recurring | Equity Investments Direct, NAV
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	1,000,000	1,000,000
Measured at NAV | Recurring | Equity Investments Indirect, NAV
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	7,000,000	8,000,000
Collateralized mortgage Obligations | Recurring
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	13,732,000,000	12,783,000,000
Collateralized mortgage Obligations | Level 1 | Recurring
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	0	0
Collateralized mortgage Obligations | Level 2 | Recurring
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	13,732,000,000	12,783,000,000
Collateralized mortgage Obligations | Level 3 | Recurring
ASSETS MEASURED ON A RECURRING BASIS
Securities available for sale	0	0
Variable Interest Entity, Not Primary Beneficiary | Measured at NAV | Recurring | Principal Investments, Indirect
ASSETS MEASURED ON A RECURRING BASIS
Total other investments	$ 60,000,000	$ 68,000,000

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Fair Value Measurements - Additional Information (Details) - USD ($)	3 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other equity investments	$ 158,000,000	$ 134,000,000
Impairment loss (less than)	1,000,000
Loans, net of allowance	101,351,000,000	93,746,000,000
Discontinued operations | Education Lending
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans at fair value	2,000,000	2,000,000
Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other investments	620,000,000	605,000,000
Loans at fair value	8,000,000	4,000,000
Carrying Amount | Discontinued operations | Education Lending
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans, net of allowance	701,000,000	855,000,000
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other investments	620,000,000	605,000,000
Loans at fair value	8,000,000	4,000,000
Fair Value | Discontinued operations | Education Lending
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans, net of allowance	593,000,000	729,000,000
Level 3 | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other investments	552,000,000	528,000,000
Loans at fair value	8,000,000	4,000,000
Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other investments	81,000,000	90,000,000
Liabilities measured at fair value on non recurring basis	986,000,000	903,000,000
Recurring | Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other investments	13,000,000	13,000,000
Liabilities measured at fair value on non recurring basis	15,000,000	9,000,000
Nonrecurring | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities measured at fair value on non recurring basis	0	0
Principal investments, Direct | Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other investments	1,000,000	1,000,000
Principal investments, Direct | Recurring | Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other investments	$ 1,000,000	$ 1,000,000

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Fair Value Measurements - Fair Value of Direct and Indirect Investments, Related Unfunded Commitments and Financial Support Provided (Details) - Principal Investments - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair Value	$ 61		$ 61
Unfunded Commitments	18		18
Funded Commitments	1	$ 0	1	$ 2
Funded Other	0	0	0	0
Direct investments
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 (measured at NAV)
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Fair Value	60		60
Unfunded Commitments	18		18
Funded Commitments	1	0	1	2
Funded Other	$ 0	$ 0	$ 0	$ 0

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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, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Other investments
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning of Period Balance	$ 12	$ 7	$ 12	$ 7
Gains (Losses) Included in Other Comprehensive Income	0	0	0	0
Gains (Losses) Included in Earnings	0	0	0	(1)
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	1
Transfers out of Level 3	0	0	0	0
End of Period Balance	12	7	12	7
Unrealized Gains (Losses) Included in Earnings	0	0	0	0
Other investments | Principal investments, Direct
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning of Period Balance	1	1	1	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	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	0	0
End of Period Balance	1	1	1	1
Unrealized Gains (Losses) Included in Earnings	0	0	0	0
Securities available for sale | Other securities
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning of Period Balance	12	11	11	20
Gains (Losses) Included in Other Comprehensive Income	0	0	1	15
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
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0		0	(24)
End of Period Balance	12	11	12	11
Unrealized Gains (Losses) Included in Earnings	0	0	0	0
Interest rate
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning of Period Balance	52	4	22	5
Gains (Losses) Included in Other Comprehensive Income	0	0	0	0
Gains (Losses) Included in Earnings	(3)	1	18	4
Purchases	2	0	14	0
Sales	(4)	0	(5)	0
Settlements	0	0	0	0
Transfers Other	0	0	0	0
Transfers into Level 3	36	0	98	2
Transfers out of Level 3	(2)	(2)	(66)	(8)
End of Period Balance	81	3	81	3
Unrealized Gains (Losses) Included in Earnings	0	0	0	0
Credit
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning of Period Balance	(17)	(1)	(8)	0
Gains (Losses) Included in Other Comprehensive Income	0	0	0	0
Gains (Losses) Included in Earnings	4	(5)	(6)	(5)
Purchases	0	0	1	(1)
Sales		1	0	1
Settlements	0	0	0	0
Transfers Other	0	0	0	0
Transfers into Level 3	0	0	0	0
Transfers out of Level 3		0	0	0
End of Period Balance	(13)	(5)	(13)	(5)
Unrealized Gains (Losses) Included in Earnings	0	0	0	0
Other
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning of Period Balance	46	6	5	3
Gains (Losses) Included in Other Comprehensive Income	0	0	0	0
Gains (Losses) Included in Earnings	5	0	0	0
Purchases	0	0	0	0
Sales	0	0	0	0
Settlements	0	0	0	0
Transfers Other	(7)	0	39	3
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
End of Period Balance	44	6	44	6
Unrealized Gains (Losses) Included in Earnings	0	0	0	0
Trading account assets | Other mortgage-backed securities
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning of Period Balance	36		0
Gains (Losses) Included in Other Comprehensive Income	0		0
Gains (Losses) Included in Earnings	0		0
Purchases	0		0
Sales	(9)		(9)
Settlements	0		0
Transfers Other	0		0
Transfers into Level 3	0		36
Transfers out of Level 3	0		0
End of Period Balance	27		27
Unrealized Gains (Losses) Included in Earnings	0		0
Loans held for sale (residential)
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning of Period Balance	0	0	0	0
Gains (Losses) Included in Other Comprehensive Income	0	0	0	0
Gains (Losses) Included in Earnings	0	0	0	0
Purchases	0	0	0	0
Sales	0	0	(10)	(1)
Settlements	0	0	0	0
Transfers Other	1	1	11	2
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
End of Period Balance	1	1	1	1
Unrealized Gains (Losses) Included in Earnings	0	0	0	0
Loans, net of unearned income (residential)
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning of Period Balance	5	3	4	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	(2)	0
Settlements	0	0	0	0
Transfers Other	3	0	6	0
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
End of Period Balance	8	3	8	3
Unrealized Gains (Losses) Included in Earnings	$ 0	$ 0	$ 0	$ 0

XML

Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Nonrecurring Basis (Details) - Nonrecurring - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
ASSETS MEASURED ON A NONRECURRING BASIS
Collateral-dependent loans	$ 89	$ 76
Accrued income and other assets	103	169
Total assets at fair value	192	245
Level 1
ASSETS MEASURED ON A NONRECURRING BASIS
Collateral-dependent loans	0	0
Accrued income and other assets	0	0
Total assets at fair value	0	0
Level 2
ASSETS MEASURED ON A NONRECURRING BASIS
Collateral-dependent loans	0	0
Accrued income and other assets	0	118
Total assets at fair value	0	118
Level 3
ASSETS MEASURED ON A NONRECURRING BASIS
Collateral-dependent loans	89	76
Accrued income and other assets	103	51
Total assets at fair value	$ 192	$ 127

XML

Fair Value Measurements - Quantitative Information about Level 3 Fair Value Measurements (Details)	Sep. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale	$ 26,895,000,000	$ 21,843,000,000
Loans held for sale (residential)		0
Derivative assets	1,946,000,000	780,000,000
Mortgage servicing assets excluded from OREO	101,000,000	46,000,000
Recurring
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale	26,895,000,000	21,843,000,000
Other investments	81,000,000	90,000,000
Loans held for sale (residential)	288,000,000	140,000,000
Derivative assets	1,946,000,000	780,000,000
Nonrecurring
Fair Value, Option, Quantitative Disclosures [Line Items]
Impaired loans	89,000,000	76,000,000
Level 3 | Recurring
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale	12,000,000	11,000,000
Other investments	13,000,000	13,000,000
Loans held for sale (residential)	1,000,000	0
Derivative assets	127,000,000	28,000,000
Level 3 | Nonrecurring
Fair Value, Option, Quantitative Disclosures [Line Items]
Impaired loans	89,000,000	76,000,000
Valuation Technique, Discounted Cash Flow | Level 3 | Recurring
Fair Value, Option, Quantitative Disclosures [Line Items]
Other investments	$ 12,000,000	$ 12,000,000
Valuation Technique, Discounted Cash Flow | Measurement Input, Discount Rate | Level 3 | Recurring | Minimum
Fair Value, Option, Quantitative Disclosures [Line Items]
Trading account assets, measurement input	0.0310
Other investments, measurement input	0.1339	0.1391
Valuation Technique, Discounted Cash Flow | Measurement Input, Discount Rate | Level 3 | Recurring | Maximum
Fair Value, Option, Quantitative Disclosures [Line Items]
Trading account assets, measurement input	0.0411
Other investments, measurement input	0.1642	0.1724
Valuation Technique, Discounted Cash Flow | Measurement Input, Discount Rate | Level 3 | Recurring | Weighted Average
Fair Value, Option, Quantitative Disclosures [Line Items]
Trading account assets, measurement input	0.0325
Other investments, measurement input	0.1493	0.1561
Valuation Technique, Discounted Cash Flow | Measurement Input, Conditional Prepayment Rate | Level 3 | Recurring | Weighted Average
Fair Value, Option, Quantitative Disclosures [Line Items]
Trading account assets, measurement input	9.00
Valuation Technique, Discounted Cash Flow | Measurement Input, Discount Marketability | Level 3 | Recurring | Weighted Average
Fair Value, Option, Quantitative Disclosures [Line Items]
Other investments, measurement input	0.3000	0.3000
Valuation Technique, Discounted Cash Flow | Measurement Input, Price Volatility | Level 3 | Recurring | Weighted Average
Fair Value, Option, Quantitative Disclosures [Line Items]
Other investments, measurement input	0.5500	0.4700
Valuation Technique, Discounted Cash Flow | Measurement Input, Default Rate | Level 3 | Recurring | Weighted Average
Fair Value, Option, Quantitative Disclosures [Line Items]
Trading account assets, measurement input	0.75
Valuation Technique, Discounted Cash Flow | Measurement Input, Loss Severity Rate | Level 3 | Recurring | Weighted Average
Fair Value, Option, Quantitative Disclosures [Line Items]
Trading account assets, measurement input	0.5000
Valuation, Market Comparable Pricing | Level 3 | Recurring
Fair Value, Option, Quantitative Disclosures [Line Items]
Loans held for sale (residential)	$ 1,000,000	$ 0
Loans, net of unearned income (residential)	$ 8,000,000	$ 4,000,000
Valuation, Market Comparable Pricing | Measurement Input, Comparability Adjustment | Level 3 | Recurring | Minimum
Fair Value, Option, Quantitative Disclosures [Line Items]
Loans, net of unearned income (residential), measurement input	0.7900	0.7900
Valuation, Market Comparable Pricing | Measurement Input, Comparability Adjustment | Level 3 | Recurring | Maximum
Fair Value, Option, Quantitative Disclosures [Line Items]
Loans, net of unearned income (residential), measurement input	0.9837	0.9800
Valuation, Market Comparable Pricing | Measurement Input, Comparability Adjustment | Level 3 | Recurring | Weighted Average
Fair Value, Option, Quantitative Disclosures [Line Items]
Loans held-for-sale, measurement input	0.9138
Loans, net of unearned income (residential), measurement input	0.9473	0.9105
Valuation, Fair Value Of Underlying Collateral | Level 3 | Nonrecurring
Fair Value, Option, Quantitative Disclosures [Line Items]
Impaired loans	$ 89,000,000	$ 76,000,000
Valuation, Fair Value Of Underlying Collateral | Measurement Input, Discount Rate | Level 3 | Nonrecurring | Minimum
Fair Value, Option, Quantitative Disclosures [Line Items]
Impaired loans, measurement input	0	0
Valuation, Fair Value Of Underlying Collateral | Measurement Input, Discount Rate | Level 3 | Nonrecurring | Maximum
Fair Value, Option, Quantitative Disclosures [Line Items]
Impaired loans, measurement input	0.9500	0.6000
Valuation, Fair Value Of Underlying Collateral | Measurement Input, Discount Rate | Level 3 | Nonrecurring | Weighted Average
Fair Value, Option, Quantitative Disclosures [Line Items]
Impaired loans, measurement input	0.2600	0.1000
Valuation, Appraised Value | Level 3 | Nonrecurring
Fair Value, Option, Quantitative Disclosures [Line Items]
OREO and other Level 3 assets	$ 2,000,000	$ 5,000,000
Interest rate | Valuation Technique, Discounted Cash Flow | Level 3 | Recurring
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets	$ 81,000,000	$ 22,000,000
Interest rate | Valuation Technique, Discounted Cash Flow | Measurement Input, Default Rate | Level 3 | Recurring | Minimum
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	0.0002	0.0002
Interest rate | Valuation Technique, Discounted Cash Flow | Measurement Input, Default Rate | Level 3 | Recurring | Maximum
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	1	1
Interest rate | Valuation Technique, Discounted Cash Flow | Measurement Input, Default Rate | Level 3 | Recurring | Weighted Average
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	0.1150	0.0540
Interest rate | Valuation Technique, Discounted Cash Flow | Measurement Input, Internal Risk Rating | Level 3 | Recurring | Minimum
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	1	1
Interest rate | Valuation Technique, Discounted Cash Flow | Measurement Input, Internal Risk Rating | Level 3 | Recurring | Maximum
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	19	19
Interest rate | Valuation Technique, Discounted Cash Flow | Measurement Input, Internal Risk Rating | Level 3 | Recurring | Weighted Average
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	9.284	9.168
Interest rate | Valuation Technique, Discounted Cash Flow | Measurement Input, Loss Given Default | Level 3 | Recurring | Minimum
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	0	0
Interest rate | Valuation Technique, Discounted Cash Flow | Measurement Input, Loss Given Default | Level 3 | Recurring | Maximum
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	1	1
Interest rate | Valuation Technique, Discounted Cash Flow | Measurement Input, Loss Given Default | Level 3 | Recurring | Weighted Average
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	0.471	0.492
Credit | Valuation Technique, Discounted Cash Flow | Level 3 | Recurring
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets	$ 2,000,000	$ 1,000,000
Derivative liabilities	$ (15,000,000)	$ (9,000,000)
Credit | Valuation Technique, Discounted Cash Flow | Measurement Input, Default Rate | Level 3 | Recurring | Minimum
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	0.0002	0.0002
Derivative liabilities, measurement input	0.0002	0.0002
Credit | Valuation Technique, Discounted Cash Flow | Measurement Input, Default Rate | Level 3 | Recurring | Maximum
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	1	1
Derivative liabilities, measurement input	1	1
Credit | Valuation Technique, Discounted Cash Flow | Measurement Input, Default Rate | Level 3 | Recurring | Weighted Average
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	0.0820	0.042
Derivative liabilities, measurement input	0.1608	0.1224
Credit | Valuation Technique, Discounted Cash Flow | Measurement Input, Internal Risk Rating | Level 3 | Recurring | Minimum
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	1	1
Derivative liabilities, measurement input	1	1
Credit | Valuation Technique, Discounted Cash Flow | Measurement Input, Internal Risk Rating | Level 3 | Recurring | Maximum
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	19	19
Derivative liabilities, measurement input	19	19
Credit | Valuation Technique, Discounted Cash Flow | Measurement Input, Internal Risk Rating | Level 3 | Recurring | Weighted Average
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	10.581	10.13
Derivative liabilities, measurement input	7.980	8.058
Credit | Valuation Technique, Discounted Cash Flow | Measurement Input, Loss Given Default | Level 3 | Recurring | Minimum
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	0	0
Derivative liabilities, measurement input	0	0
Credit | Valuation Technique, Discounted Cash Flow | Measurement Input, Loss Given Default | Level 3 | Recurring | Maximum
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	1	1
Derivative liabilities, measurement input	1	1
Credit | Valuation Technique, Discounted Cash Flow | Measurement Input, Loss Given Default | Level 3 | Recurring | Weighted Average
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	0.490	0.498
Derivative liabilities, measurement input	0.397	0.411
Other | Valuation Technique, Discounted Cash Flow | Level 3 | Recurring
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets	$ 44,000,000	$ 5,000,000
Other | Valuation Technique, Discounted Cash Flow | Measurement Input, Loan Closing Rates | Level 3 | Recurring | Minimum
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	0.2912	0.3771
Other | Valuation Technique, Discounted Cash Flow | Measurement Input, Loan Closing Rates | Level 3 | Recurring | Maximum
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	0.9969	0.9969
Other | Valuation Technique, Discounted Cash Flow | Measurement Input, Loan Closing Rates | Level 3 | Recurring | Weighted Average
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative assets, measurement input	0.7623	0.7933
Other mortgage-backed securities | Valuation Technique, Discounted Cash Flow | Level 3 | Recurring
Fair Value, Option, Quantitative Disclosures [Line Items]
Trading account assets	$ 27,000,000	$ 0
Other securities
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale	12,000,000	11,000,000
Other securities | Recurring
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale	12,000,000	11,000,000
Other securities | Level 3 | Recurring
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale	12,000,000	11,000,000
Other securities | Valuation Technique, Discounted Cash Flow | Level 3 | Recurring
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale	$ 12,000,000	$ 11,000,000
Other securities | Valuation Technique, Discounted Cash Flow | Measurement Input, Discount Rate | Level 3 | Recurring | Weighted Average
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale, measurement input	0.1509	0.1610
Other securities | Valuation Technique, Discounted Cash Flow | Measurement Input, Discount Marketability | Level 3 | Recurring | Weighted Average
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale, measurement input	0.3000	0.3000
Other securities | Valuation Technique, Discounted Cash Flow | Measurement Input, Price Volatility | Level 3 | Recurring | Weighted Average
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available for sale, measurement input	0.4400	0.4300
Principal investments, Direct | Recurring
Fair Value, Option, Quantitative Disclosures [Line Items]
Other investments	$ 1,000,000	$ 1,000,000
Principal investments, Direct | Level 3 | Recurring
Fair Value, Option, Quantitative Disclosures [Line Items]
Other investments	$ 1,000,000	$ 1,000,000

XML

Fair Value Measurements - Fair Value Disclosures of Financial Instruments (Details) - USD ($)		Sep. 30, 2020	Dec. 31, 2019
ASSETS
Trading account assets		$ 733,000,000	$ 1,040,000,000
Loans held for sale (residential)			0
Derivative assets		1,946,000,000	780,000,000
Securities available for sale		26,895,000,000	21,843,000,000
Amortized cost		8,384,000,000	10,067,000,000
Held-to-maturity securities		8,842,000,000	10,116,000,000
Loans, net of unearned income (residential)		103,081,000,000	94,646,000,000
Loans held for sale	[1]	1,724,000,000	1,334,000,000
LIABILITIES
Long-term debt		12,685,000,000	12,448,000,000
Carrying Amount
ASSETS
Trading account assets		733,000,000	1,040,000,000
Other investments		620,000,000	605,000,000
Loans, net of unearned income (residential)		8,000,000	4,000,000
Loans held for sale (residential)		288,000,000	140,000,000
Securities available for sale		26,895,000,000	21,843,000,000
Amortized cost		8,384,000,000	10,067,000,000
Loans, net of unearned income (residential)		101,343,000,000	93,742,000,000
Loans held for sale		1,436,000,000	1,194,000,000
Short-term investments		1,000,000,000	0
Cash and short-term investments		14,104,000,000	2,004,000,000
LIABILITIES
Time deposits		6,795,000,000	11,652,000,000
Short-term borrowings		1,031,000,000	1,092,000,000
Long-term debt		12,685,000,000	12,448,000,000
Deposits with no stated maturity		129,951,000,000	100,218,000,000
Fair Value
ASSETS
Trading account assets		733,000,000	1,040,000,000
Other investments		620,000,000	605,000,000
Loans, net of unearned income (residential)		8,000,000	4,000,000
Loans held for sale (residential)		288,000,000	140,000,000
Securities available for sale		26,895,000,000	21,843,000,000
Held-to-maturity securities		8,842,000,000	10,116,000,000
Loans, net of unearned income (residential)		99,826,000,000	92,641,000,000
Loans held for sale		1,436,000,000	1,194,000,000
Short-term investments		1,000,000,000	0
Cash and short-term investments		14,104,000,000	2,004,000,000
LIABILITIES
Time deposits		6,826,000,000	11,752,000,000
Short-term borrowings		1,031,000,000	1,092,000,000
Long-term debt		13,585,000,000	12,943,000,000
Deposits with no stated maturity		129,951,000,000	100,218,000,000
Fair Value | Level 1
ASSETS
Trading account assets		1,000,000	0
Other investments		0	0
Loans, net of unearned income (residential)		0	0
Loans held for sale (residential)		0	0
Securities available for sale		0	0
Held-to-maturity securities		0	0
Loans, net of unearned income (residential)		0	0
Loans held for sale		0	0
Short-term investments		0	0
Cash and short-term investments		14,104,000,000	2,004,000,000
LIABILITIES
Time deposits		0	0
Short-term borrowings		289,000,000	19,000,000
Long-term debt		12,852,000,000	12,694,000,000
Deposits with no stated maturity		0	0
Fair Value | Level 2
ASSETS
Trading account assets		705,000,000	1,040,000,000
Other investments		0	0
Loans, net of unearned income (residential)		0	0
Loans held for sale (residential)		287,000,000	140,000,000
Securities available for sale		26,883,000,000	21,832,000,000
Held-to-maturity securities		8,842,000,000	10,116,000,000
Loans, net of unearned income (residential)		0	0
Loans held for sale		0	0
Short-term investments		1,000,000,000	0
Cash and short-term investments		0	0
LIABILITIES
Time deposits		6,826,000,000	11,752,000,000
Short-term borrowings		742,000,000	1,073,000,000
Long-term debt		733,000,000	249,000,000
Deposits with no stated maturity		129,951,000,000	100,218,000,000
Fair Value | Level 3
ASSETS
Trading account assets		27,000,000	0
Other investments		552,000,000	528,000,000
Loans, net of unearned income (residential)		8,000,000	4,000,000
Loans held for sale (residential)		1,000,000	0
Securities available for sale		12,000,000	11,000,000
Held-to-maturity securities		0	0
Loans, net of unearned income (residential)		99,826,000,000	92,641,000,000
Loans held for sale		1,436,000,000	1,194,000,000
Short-term investments		0	0
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 | Measured at NAV
ASSETS
Other investments		68,000,000	77,000,000
Derivatives Not Designated as Hedging Instruments | Carrying Amount
ASSETS
Derivative assets		1,841,000,000	715,000,000
LIABILITIES
Derivative liabilities		166,000,000	194,000,000
Derivatives Not Designated as Hedging Instruments | Fair Value
ASSETS
Derivative assets		1,841,000,000	715,000,000
Derivative assets, Netting Adjustment		(524,000,000)	(347,000,000)
LIABILITIES
Derivative liabilities		166,000,000	194,000,000
Derivative liabilities, Netting Adjustment		(675,000,000)	(319,000,000)
Derivatives Not Designated as Hedging Instruments | Fair Value | Level 1
ASSETS
Derivative assets		56,000,000	49,000,000
LIABILITIES
Derivative liabilities		51,000,000	43,000,000
Derivatives Not Designated as Hedging Instruments | Fair Value | Level 2
ASSETS
Derivative assets		2,182,000,000	985,000,000
LIABILITIES
Derivative liabilities		775,000,000	461,000,000
Derivatives Not Designated as Hedging Instruments | Fair Value | Level 3
ASSETS
Derivative assets		127,000,000	28,000,000
LIABILITIES
Derivative liabilities		15,000,000	9,000,000
Derivatives Designated as Hedging Instruments | Carrying Amount
ASSETS
Derivative assets		105,000,000	65,000,000
LIABILITIES
Derivative liabilities		2,000,000	4,000,000
Derivatives Designated as Hedging Instruments | Fair Value
ASSETS
Derivative assets		105,000,000	65,000,000
Derivative assets, Netting Adjustment		34,000,000	(126,000,000)
LIABILITIES
Derivative liabilities		2,000,000	4,000,000
Derivative liabilities, Netting Adjustment		(4,000,000)	(16,000,000)
Derivatives Designated as Hedging Instruments | Fair Value | Level 1
ASSETS
Derivative assets		0	0
LIABILITIES
Derivative liabilities		0	0
Derivatives Designated as Hedging Instruments | Fair Value | Level 2
ASSETS
Derivative assets		71,000,000	191,000,000
LIABILITIES
Derivative liabilities		6,000,000	20,000,000
Derivatives Designated as Hedging Instruments | Fair Value | Level 3
ASSETS
Derivative assets		0	0
LIABILITIES
Derivative liabilities		$ 0	$ 0

[1] Total loans held for sale include real estate — residential mortgage loans held for sale at fair value of $288 million at September 30, 2020, and $140 million at December 31, 2019.

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Securities - Details of Securities (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
SECURITIES AVAILABLE FOR SALE
Amortized Cost	$ 26,054	$ 21,692
Gross Unrealized Gains	854	266
Gross Unrealized Losses	13	115
Fair Value	26,895	21,843
HELD-TO-MATURITY SECURITIES
Amortized Cost	8,384	10,067
Gross Unrealized Gains	458	107
Gross Unrealized Losses	0	58
Fair Value	8,842	10,116
Accrued interest	235	244
U.S. Treasury, agencies and corporations
SECURITIES AVAILABLE FOR SALE
Amortized Cost	4,463	334
Gross Unrealized Gains	1	0
Gross Unrealized Losses	0	0
Fair Value	4,464	334
States and political subdivisions
SECURITIES AVAILABLE FOR SALE
Amortized Cost	3	4
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	3	4
Collateralized mortgage Obligations
SECURITIES AVAILABLE FOR SALE
Amortized Cost	13,403	12,772
Gross Unrealized Gains	336	82
Gross Unrealized Losses	7	71
Fair Value	13,732	12,783
HELD-TO-MATURITY SECURITIES
Amortized Cost	4,308	5,692
Gross Unrealized Gains	141	23
Gross Unrealized Losses	0	49
Fair Value	4,449	5,666
Agency residential mortgage-backed securities
SECURITIES AVAILABLE FOR SALE
Amortized Cost	1,256	1,677
Gross Unrealized Gains	71	41
Gross Unrealized Losses	1	4
Fair Value	1,326	1,714
HELD-TO-MATURITY SECURITIES
Amortized Cost	313	409
Gross Unrealized Gains	11	6
Gross Unrealized Losses	0	0
Fair Value	324	415
Asset-backed securities
HELD-TO-MATURITY SECURITIES
Amortized Cost	22	11
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	22	11
Other securities
SECURITIES AVAILABLE FOR SALE
Amortized Cost	8	7
Gross Unrealized Gains	4	4
Gross Unrealized Losses	0	0
Fair Value	12	11
HELD-TO-MATURITY SECURITIES
Amortized Cost	15	15
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	15	15
Mortgage-backed securities | Agency commercial mortgage-backed securities
SECURITIES AVAILABLE FOR SALE
Amortized Cost	6,921	6,898
Gross Unrealized Gains	442	139
Gross Unrealized Losses	5	40
Fair Value	7,358	6,997
HELD-TO-MATURITY SECURITIES
Amortized Cost	3,726	3,940
Gross Unrealized Gains	306	78
Gross Unrealized Losses	0	9
Fair Value	4,032	$ 4,009
Securities available for sale
HELD-TO-MATURITY SECURITIES
Accrued interest	39
Securities held-to-maturity
HELD-TO-MATURITY SECURITIES
Accrued interest	$ 17

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Securities - Available for Sale Securities (Unrealized Loss Position) (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Held-to-maturity securities:
Temporarily impaired securities, fair value, less than 12 months	$ 2,233	$ 7,250
Temporarily impaired securities, gross unrealized losses, less than 12 months	13	60
Temporarily impaired securities, fair value, 12 months or longer	34	7,382
Temporarily impaired securities, gross unrealized losses, 12 months or longer	0	113
Temporarily impaired securities, fair value	2,267	14,632
Temporarily impaired securities, gross unrealized losses	13	173
U.S. Treasury, agencies and corporations
Securities available for sale:
Fair value, less than 12 months		30
Gross unrealized losses, less than 12 months		0
Fair value, 12 months or longer		30
Gross unrealized losses, 12 months or longer		0
Fair value		60
Gross unrealized losses		0
Collateralized mortgage Obligations
Securities available for sale:
Fair value, less than 12 months	1,453	3,432
Gross unrealized losses, less than 12 months	7	20
Fair value, 12 months or longer	0	3,221
Gross unrealized losses, 12 months or longer	0	51
Fair value	1,453	6,653
Gross unrealized losses	7	71
Held-to-maturity securities:
Fair value, less than 12 months	0	1,626
Gross unrealized losses, less than 12 months	0	14
Fair value, 12 months or longer	29	2,289
Gross unrealized losses, 12 months or longer	0	35
Fair value	29	3,915
Gross unrealized losses	0	49
Agency commercial mortgage-backed securities
Securities available for sale:
Fair value, less than 12 months	764	1,541
Gross unrealized losses, less than 12 months	5	17
Fair value, 12 months or longer	0	1,213
Gross unrealized losses, 12 months or longer	0	23
Fair value	764	2,754
Gross unrealized losses	5	40
Held-to-maturity securities:
Fair value, less than 12 months		518
Gross unrealized losses, less than 12 months		9
Fair value, 12 months or longer		0
Gross unrealized losses, 12 months or longer		0
Fair value		518
Gross unrealized losses		9
Asset-backed securities
Held-to-maturity securities:
Fair value, less than 12 months	1	11
Gross unrealized losses, less than 12 months	0	0
Fair value, 12 months or longer	0	0
Gross unrealized losses, 12 months or longer	0	0
Fair value	1	11
Gross unrealized losses	0	0
Other securities
Held-to-maturity securities:
Fair value, less than 12 months	8	3
Gross unrealized losses, less than 12 months	0	0
Fair value, 12 months or longer	0	0
Gross unrealized losses, 12 months or longer	0	0
Fair value	8	3
Gross unrealized losses	0	0
U.S. Treasury, Agencies, and Corporations
Securities available for sale:
Gross unrealized losses, less than 12 months	1	1
Gross unrealized losses, 12 months or longer		1
Mortgage-backed securities | Agency residential mortgage-backed securities
Securities available for sale:
Fair value, less than 12 months	7	33
Gross unrealized losses, less than 12 months	1	0
Fair value, 12 months or longer	5	629
Gross unrealized losses, 12 months or longer	0	4
Fair value	12	662
Gross unrealized losses	$ 1	4
Held-to-maturity securities:
Fair value, less than 12 months		56
Gross unrealized losses, less than 12 months		0
Fair value, 12 months or longer		0
Gross unrealized losses, 12 months or longer		0
Fair value		56
Gross unrealized losses		$ 0

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Securities - Additional Information (Details) $ in Billions	Sep. 30, 2020 USD ($)
Investments, Debt and Equity Securities [Abstract]
Loans pledged as collateral	$ 12.5

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Securities - Securities by Maturity (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Investments, Debt and Equity Securities [Abstract]
Amortized Cost of Securities Available for sale, Due in one year or less	$ 5,125
Amortized Cost of Securities Available for sale, Due after one through five years	14,883
Amortized Cost of Securities Available for sale, Due after five through ten years	5,608
Amortized Cost of Securities Available for sale, Due after ten years	438
Amortized Cost	26,054	$ 21,692
Fair Value of Securities Available for sale, Due in one year or less	5,134
Fair Value of Securities Available for sale, Due after one through five years	15,439
Fair Value of Securities Available for sale, Due after five through ten years	5,887
Fair Value of Securities Available for sale, Due after ten years	435
Total Fair Value of Securities Available For Sale	26,895	21,843
Amortized Cost of Held-to-Maturity Securities, Due in one year or less	102
Amortized Cost of Held-to-Maturity Securities, Due after one through five years	5,649
Amortized Cost of Held-to-Maturity Securities, Due after five through ten years	2,620
Amortized Cost of Held-to-Maturity Securities, Due after ten years	13
Amortized Cost	8,384	10,067
Fair Value of Held-to-Maturity Securities, Due in one year or less	104
Fair Value of Held-to-Maturity Securities, Due after one through five years	5,880
Fair Value of Held-to-Maturity Securities, Due after five through ten years	2,845
Fair Value of Held-to-Maturity Securities, Due after ten years	13
Total Fair Value of Held-to-Maturity Securities	$ 8,842	$ 10,116

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Derivatives and Hedging Activities - Additional Information (Details) $ in Millions	9 Months Ended
	Sep. 30, 2020 USD ($) rating derivative	Dec. 31, 2019 USD ($) rating
Credit Derivatives [Line Items]
Derivative assets after effects of bilateral collateral and master netting agreements	$ 105
Derivative liabilities after effects of bilateral collateral and master netting agreements	2
Derivative assets not designated as hedging instruments after effects of bilateral collateral and master netting agreements, and a reserve for potential future losses	1,800
Derivative liabilities not designated as hedging instruments after effects of bilateral collateral and master netting agreements, and a reserve for potential future losses	166
Reclassify of after-tax net gains on derivative instruments from AOCI	$ 253
Length of time hedge in cash flow hedge	12 months
Reclassification of net losses related to terminated cash flow hedges from AOCI to income	$ 74
Maximum length of time over which forecasted transactions are hedged, years	9 years
Cash collateral netted against derivative assets	$ 44	$ 207
Collateral netted against derivative liabilities	234	69
Gross exposure on derivatives, after taking into account the effects of bilateral collateral and master netting agreements	411
Net exposure on derivatives, after taking into account, the effects of bilateral collateral and master netting agreements	260
Over-collateralization on derivatives to broker-dealers and banks, after the application of master netting agreements and collateral	257
Additional collateral held in the form of securities	3
Default reserve associated with uncollateralized contracts	72
Gross exposure on derivatives after taking into account effects of master netting agreements	1,900
Net exposure on derivatives with clients after application of master netting agreements collateral and related reserve	1,700
Net liability position totaled	12	$ 9
Banking Subsidiary
Credit Derivatives [Line Items]
Net liability position totaled	177
Derivative assets included in net liability position	108
Derivative liabilities included in net liability position	285
Cash and securities collateral posted	$ 175
Number of credit risk derivatives held | derivative	0
Banking Subsidiary | Unsecured Debt
Credit Derivatives [Line Items]
Number of ratings above noninvestment | rating	4	4
Banking Subsidiary | Maximum | Unsecured Debt
Credit Derivatives [Line Items]
Payments to terminate contracts (less than for the $1 million)	$ 3	$ 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, 2020	Sep. 30, 2019
Derivatives, Fair Value [Line Items]
Notional Amount	$ 129,403	$ 126,077
Derivative assets, netting adjustments	(490)	(473)
Derivative Assets, net	1,943	778
Derivative liabilities, netting adjustments	(679)	(335)
Derivative Liabilities, net	167	156
Derivatives Not Designated as Hedging Instruments
Derivatives, Fair Value [Line Items]
Notional Amount	95,183	86,869
Derivative Assets	2,365	1,062
Derivative Liabilities	841	513
Interest rate | Derivatives Designated as Hedging Instruments
Derivatives, Fair Value [Line Items]
Notional Amount	34,220	39,208
Derivative Assets	71	191
Derivative Liabilities	6	20
Interest rate | Derivatives Not Designated as Hedging Instruments
Derivatives, Fair Value [Line Items]
Notional Amount	75,507	71,209
Derivative Assets	1,756	772
Derivative Liabilities	300	233
Foreign exchange | Derivatives Not Designated as Hedging Instruments
Derivatives, Fair Value [Line Items]
Notional Amount	5,879	6,572
Derivative Assets	74	67
Derivative Liabilities	68	60
Commodity | Derivatives Not Designated as Hedging Instruments
Derivatives, Fair Value [Line Items]
Notional Amount	7,738	5,324
Derivative Assets	462	208
Derivative Liabilities	445	200
Credit | Derivatives Not Designated as Hedging Instruments
Derivatives, Fair Value [Line Items]
Notional Amount	487	427
Derivative Assets	3	1
Derivative Liabilities	15	10
Other
Derivatives, Fair Value [Line Items]
Derivative Assets	44
Other | Derivatives Not Designated as Hedging Instruments
Derivatives, Fair Value [Line Items]
Notional Amount	5,572	3,337
Derivative Assets	70	14
Derivative Liabilities	13	10
Net derivatives
Derivatives, Fair Value [Line Items]
Notional Amount	129,403	126,077
Derivative Assets, net	1,946	780
Derivative Liabilities, net	168	198
Other collateral
Derivatives, Fair Value [Line Items]
Notional Amount	0	0
Derivative Assets, net	(3)	(2)
Derivative Liabilities, net	$ (1)	$ (42)

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Derivatives and Hedging Activities - Cumulative Basis Adjustments on Fair Value Hedges (Details) - Long-term debt - Interest rate - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Derivatives, Fair Value [Line Items]
Carrying amount of hedged item	$ 8,255	$ 8,408
Hedge accounting basis adjustment	492	240
Derivatives Not Designated as Hedging Instruments
Derivatives, Fair Value [Line Items]
Hedge accounting basis adjustment	$ (8)	$ (9)

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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, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Derivative Instruments, Gain (Loss) [Line Items]
Interest expense — Long-term debt		$ 64	$ 114	$ 225	$ 354
Interest income — Loans		927	1,073	2,933	3,221
Deposits		54	227	319	652
Other income	[1]	28	27	(27)	54
Interest rate | Interest expense – long-term debt | Fair Value Hedging
Net gains (losses) on fair value hedging relationships
Recognized on hedged items		47	(75)	(252)	(320)
Recognized on derivatives designated as hedging instruments		(7)	72	343	296
Net income (expense) recognized on fair value hedges		40	(3)	91	(24)
Interest rate | Interest expense – long-term debt | Cash Flow Hedging
Net gain (loss) on cash flow hedging relationships
Realized gains (losses) (pre-tax) reclassified from AOCI into net income		(1)	(1)	(3)	(2)
Net income (expense) recognized on cash flow hedges		(1)	(1)	(3)
Interest rate | Interest income – loans | Fair Value Hedging
Net gains (losses) on fair value hedging relationships
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 | Interest income – loans | Cash Flow Hedging
Net gain (loss) on cash flow hedging relationships
Realized gains (losses) (pre-tax) reclassified from AOCI into net income		100	(8)	224	(51)
Net income (expense) recognized on cash flow hedges		100	(8)	224
Interest rate | Interest expense - deposits | Fair Value Hedging
Net gains (losses) on fair value hedging relationships
Recognized on hedged items		0	0	0	(1)
Recognized on derivatives designated as hedging instruments		0	0	0	0
Net income (expense) recognized on fair value hedges		0	0	0	(1)
Interest rate | Interest expense - deposits | Cash Flow Hedging
Net gain (loss) on cash flow hedging relationships
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
Interest rate | Other income | Fair Value Hedging
Net gains (losses) on fair value hedging relationships
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 | Other income | Cash Flow Hedging
Net gain (loss) on cash flow hedging relationships
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

[1] For the three months ended September 30, 2020, we had no net securities gains (losses). For the nine months ended September 30, 2020, net securities gains (losses) totaled $4 million. For the three and nine months ended September 30, 2019, net securities gains (losses) totaled less than $15 million. For the three and nine months ended September 30, 2020, and September 30, 2019, we did not have any impairment losses related to securities.

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Derivatives and Hedging Activities - Derivative Instrument Cash Flow Hedge Earning Recognized by Income Statement Location (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Derivatives, Fair Value [Line Items]
Net Gains (Losses) Recognized in OCI	$ 15	$ 81	$ 613	$ 453
Net Gains (Losses) Reclassified From OCI Into Income	99	(9)	221	(53)
Interest income – loans | Interest rate | Cash Flow Hedges
Derivatives, Fair Value [Line Items]
Net Gains (Losses) Recognized in OCI	5	86	629	471
Net Gains (Losses) Reclassified From OCI Into Income	100	(8)	224	(51)
Interest expense — Long-term debt | Interest rate | Cash Flow Hedges
Derivatives, Fair Value [Line Items]
Net Gains (Losses) Recognized in OCI	0	(2)	(6)	(5)
Net Gains (Losses) Reclassified From OCI Into Income	(1)	(1)	(3)	(2)
Investment banking and debt placement fees | Interest rate | Cash Flow Hedges
Derivatives, Fair Value [Line Items]
Net Gains (Losses) Recognized in OCI	10	(4)	(10)	(10)
Net Gains (Losses) Reclassified From OCI Into Income	$ 0	0	0	0
Other income | Foreign exchange | Net Investment Hedges
Derivatives, Fair Value [Line Items]
Net Gains (Losses) Recognized in OCI		1	0	(3)
Net Gains (Losses) Reclassified From OCI Into Income		$ 0	$ 0	$ 0

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Derivatives and Hedging Activities - Pre-Tax Net Gains (Losses) on Derivatives Not Designated as Hedging Instruments (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	$ 34	$ 17	$ 82	$ 43
Interest rate
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	4	15	13	28
Foreign exchange
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	9	11	29	32
Commodity
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	5	2	13	5
Credit
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	(4)	(13)	(26)	(27)
Other
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	20	2	53	5
Corporate services income
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	23	24	59	64
Corporate services income | Interest rate
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	5	16	23	31
Corporate services income | Foreign exchange
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	9	11	29	32
Corporate services income | Commodity
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	5	2	13	5
Corporate services income | Credit
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	4	(5)	(6)	(4)
Corporate services income | Other
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	0	0	0	0
Consumer mortgage income
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	28	5	36	5
Consumer mortgage income | Interest rate
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	0	0	0	0
Consumer mortgage income | Foreign exchange
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	0	0	0	0
Consumer mortgage income | Commodity
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	0	0	0	0
Consumer mortgage income | Credit
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	0	0	0	0
Consumer mortgage income | Other
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	28	5	36	5
Other income
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	(17)	(12)	(13)	(26)
Other income | Interest rate
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	(1)	(1)	(10)	(3)
Other income | Foreign exchange
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	0	0	0	0
Other income | Commodity
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	0	0	0	0
Other income | Credit
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	(8)	(8)	(20)	(23)
Other income | Other
Derivative Instruments, Gain (Loss) [Line Items]
Total net gains (losses)	$ (8)	$ (3)	$ 17	$ 0

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Derivatives and Hedging Activities - Fair Value of Derivative Assets by Type (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Credit Derivatives [Line Items]
Derivative assets before collateral	$ 1,990	$ 987
Less: Related collateral	44	207
Total derivative assets	1,946	780
Interest rate
Credit Derivatives [Line Items]
Derivative assets before collateral	1,680	848
Foreign exchange
Credit Derivatives [Line Items]
Derivative assets before collateral	28	30
Commodity
Credit Derivatives [Line Items]
Derivative assets before collateral	212	95
Credit
Credit Derivatives [Line Items]
Derivative assets before collateral	0	0
Other
Credit Derivatives [Line Items]
Derivative assets before collateral	$ 70	$ 14

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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, 2020	Dec. 31, 2019
Credit Derivatives [Line Items]
Notional Amount	$ 287	$ 134
Payment / Performance Risk	0.00%	0.00%
Other
Credit Derivatives [Line Items]
Notional Amount	$ 287	$ 134
Average Term (Years)	13 years 5 months 23 days	14 years 3 months 18 days
Payment / Performance Risk	17.15%	14.56%

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Derivatives and Hedging Activities - Credit Risk Contingent Feature (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Credit Derivatives [Line Items]
Additional collateral aggregate fair value	$ 3
Standard & Poor's, A- Rating | One rating downgrade
Credit Derivatives [Line Items]
Additional collateral aggregate fair value	1	$ 1
Standard & Poor's, A- Rating | Two rating downgrades
Credit Derivatives [Line Items]
Additional collateral aggregate fair value	1	1
Standard & Poor's, A- Rating | Three rating downgrades
Credit Derivatives [Line Items]
Additional collateral aggregate fair value	1	1
Moody's, A3 Rating | One rating downgrade
Credit Derivatives [Line Items]
Additional collateral aggregate fair value	1	1
Moody's, A3 Rating | Two rating downgrades
Credit Derivatives [Line Items]
Additional collateral aggregate fair value	1	1
Moody's, A3 Rating | Three rating downgrades
Credit Derivatives [Line Items]
Additional collateral aggregate fair value	$ 1	$ 1

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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, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Real estate — commercial mortgage
Servicing Asset at Amortized Cost, Balance [Roll Forward]
Balance at beginning of period	$ 565	$ 509	$ 539	$ 502
Servicing retained from loan sales	30	30	107	71
Purchases	6	10	24	33
Amortization	(29)	(29)	(88)	(86)
Temporary impairments	(6)	(2)	(16)	(2)
Balance at end of period	566	518	566	518
Fair value at end of period	685	681	685	681
Agency residential mortgage-backed securities
Servicing Asset at Amortized Cost, Balance [Roll Forward]
Balance at beginning of period	46	39	46	37
Servicing retained from loan sales	12	5	25	9
Purchases	0	0	0	0
Amortization	(4)	(3)	(9)	(5)
Temporary impairments	(1)	0	(9)	0
Balance at end of period	53	41	53	41
Fair value at end of period	$ 54	$ 43	$ 54	$ 43

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Mortgage Servicing Assets - Schedule of Range and Weighted-Average of Significant Unobservable Inputs (Details) - Discounted cash flow - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Real estate — commercial mortgage | Minimum
Servicing Assets at Fair Value [Line Items]
Expected defaults	1.00%	1.00%
Residual cash flows discount rate	7.72%	7.00%
Escrow earn rate	92.00%	1.46%
Loan assumption rate	0.00%	0.01%
Real estate — commercial mortgage | Maximum
Servicing Assets at Fair Value [Line Items]
Expected defaults	2.00%	2.00%
Residual cash flows discount rate	10.66%	11.50%
Escrow earn rate	1.16%	2.36%
Loan assumption rate	1.78%	3.37%
Real estate — commercial mortgage | Weighted Average
Servicing Assets at Fair Value [Line Items]
Expected defaults	1.17%	1.13%
Residual cash flows discount rate	9.30%	9.30%
Escrow earn rate	1.05%	2.02%
Loan assumption rate	1.39%	1.38%
Residential mortgage-backed securities | Minimum
Servicing Assets at Fair Value [Line Items]
Expected defaults	7.51%	7.50%
Prepayment speed	12.35%	12.06%
Servicing cost	$ 62,000,000.00	$ 62,000,000
Residential mortgage-backed securities | Maximum
Servicing Assets at Fair Value [Line Items]
Expected defaults	8.80%	10.00%
Prepayment speed	53.36%	62.96%
Servicing cost	$ 5,125,000,000	$ 4,375,000,000
Residential mortgage-backed securities | Weighted Average
Servicing Assets at Fair Value [Line Items]
Expected defaults	7.57%	7.53%
Prepayment speed	16.89%	14.53%
Servicing cost	$ 81,670,000	$ 67,670,000

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Mortgage Servicing Assets - Additional Information (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Real estate — commercial mortgage
Servicing Assets at Fair Value [Line Items]
Contractual fee income from servicing commercial mortgage loans	$ 154	$ 147
Amortization of servicing commercial mortgage loans	88	86
Residential mortgage-backed securities
Servicing Assets at Fair Value [Line Items]
Contractual fee income from servicing commercial mortgage loans	24	15
Amortization of servicing commercial mortgage loans	$ 9	$ 5

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Leases - Components of Equipment Leasing Income (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Sales-type and direct financing leases
Interest income on lease receivable	$ 36	$ 31	$ 91	$ 92
Interest income related to accretion of unguaranteed residual asset	(7)	3	(1)	9
Interest income on deferred fees and costs	0	0	0	0
Total sales-type and direct financing lease income	29	34	90	101
Operating leases
Operating lease income related to lease payments	34	34	103	100
Other operating leasing gains	4	8	25	23
Total operating lease income and other leasing gains	38	42	128	123
Total lease income	$ 67	$ 76	$ 218	$ 224

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Goodwill (Details)	Sep. 30, 2020
Consumer Bank
Goodwill [Line Items]
Reporting unit, percentage of fair value in excess of carrying amount	11.00%
Commercial Bank
Goodwill [Line Items]
Reporting unit, percentage of fair value in excess of carrying amount	17.00%
Institutional Bank
Goodwill [Line Items]
Reporting unit, percentage of fair value in excess of carrying amount	11.00%

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Variable Interest Entities - Additional Information (Details) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Variable Interest Entity [Line Items]
VIE, assets that can only be used to settle obligations	$ 170,540,000,000		$ 144,988,000,000
VIE, liabilities	152,818,000,000		127,950,000,000
Recurring
Variable Interest Entity [Line Items]
Other investments	81,000,000		90,000,000
Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
VIE, assets that can only be used to settle obligations	335,000,000		282,000,000
VIE, liabilities	1,000,000		1,000,000
Variable Interest Entity, Not Primary Beneficiary | LIHTC investments
Variable Interest Entity [Line Items]
VIE, assets that can only be used to settle obligations	6,693,000,000		6,405,000,000
VIE, liabilities	2,547,000,000		2,526,000,000
Tax credit of investment		$ 135,000,000
Variable Interest Entity, Not Primary Beneficiary | LIHTC investments | Qualified affordable housing projects investment
Variable Interest Entity [Line Items]
VIE, liabilities	477,000,000		546,000,000
Variable Interest Entity, Not Primary Beneficiary | LIHTC investments | Accrued Income And Other Assets
Variable Interest Entity [Line Items]
VIE, assets that can only be used to settle obligations	1,400,000,000		1,500,000,000
Variable Interest Entity, Not Primary Beneficiary | LIHTC investments | Investments
Variable Interest Entity [Line Items]
Amortization of investment	146,000,000	$ 137,000,000
Tax credit of investment	134,000,000
Variable Interest Entity, Not Primary Beneficiary | Measured at NAV | Recurring | Principal Investments, Indirect
Variable Interest Entity [Line Items]
Other investments	60,000,000		68,000,000
Variable Interest Entity, Primary Beneficiary | Investments
Variable Interest Entity [Line Items]
VIE, assets that can only be used to settle obligations	0		0
VIE, liabilities	$ 0		$ 0

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Variable Interest Entities - Summary of Variable Interest Entities Information (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Variable Interest Entity [Line Items]
Total Assets	$ 170,540	$ 144,988
Total Liabilities	152,818	127,950
Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Total Assets	335	282
Total Liabilities	1	1
Variable Interest Entity, Not Primary Beneficiary | LIHTC investments
Variable Interest Entity [Line Items]
Total Assets	6,693	6,405
Total Liabilities	2,547	2,526
Maximum Exposure to Loss	1,820	1,846
Variable Interest Entity, Not Primary Beneficiary | KCC indirect investments
Variable Interest Entity [Line Items]
Total Assets	11,225	12,954
Total Liabilities	173	205
Maximum Exposure to Loss	$ 78	$ 89

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Income Taxes - Additional Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Dec. 31, 2019
Income Tax Contingency [Line Items]
Total income tax expense (benefit), rate	12.50%	14.50%
Combined federal and state statutory tax rate			23.70%
Valuation allowance	$ 0		$ 0	$ 0
Other Assets
Income Tax Contingency [Line Items]
Net deferred tax liability	110,000,000		110,000,000	$ 89,000,000
Key Corp
Income Tax Contingency [Line Items]
Unrecognized tax benefits	58,000,000		58,000,000
First Niagara Bank, N.A.
Income Tax Contingency [Line Items]
Allocated bad debt deductions	$ 92,000,000		$ 92,000,000

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Acquisitions and Discontinued Operations - Additional Information (Details) $ in Millions	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)	Apr. 03, 2019 branch
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Goodwill	$ 2,664		$ 2,664
Discontinued operations | Government Guaranteed Loans
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loans included in divestiture	$ 743		$ 865
Laurel Road Bank
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of bank branches excluded from transaction | branch				3
Intangible assets acquired		$ 37
Goodwill		$ 148

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Securities Financing Activities - Summarized Securities Financing Agreements (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Securities Financing Transaction [Line Items]
Reverse repurchase agreements	$ 0	$ 0
Total	0	0
Repurchase agreements	0	0
Total	0	0
Collateral
Securities Financing Transaction [Line Items]
Reverse repurchase agreements	0	0
Total	0	0
Repurchase agreements	(193)	(180)
Total	(193)	(180)
Federal Agency CMOs
Securities Financing Transaction [Line Items]
Assets pledged as collateral	396
Liabilities pledged as collateral	193
Gross Amount Presented in Balance Sheet
Securities Financing Transaction [Line Items]
Reverse repurchase agreements	7	5
Total	7	5
Repurchase agreements	213	187
Total	213	187
Netting Adjustments
Securities Financing Transaction [Line Items]
Reverse repurchase agreements	(7)	(5)
Total	(7)	(5)
Repurchase agreements	(20)	(7)
Total	$ (20)	$ (7)

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Employee Benefits - Net Pension Cost (Benefit) for All Funded and Unfunded Plans (Details) - Pension Plans - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Defined Benefit Plan Disclosure [Line Items]
Interest cost on PBO	$ 9	$ 11	$ 26	$ 34
Expected return on plan assets	(10)	(12)	(29)	(36)
Amortization of losses	5	4	13	11
Settlement loss	0	0	8	0
Net pension cost	$ 4	$ 3	$ 18	$ 9

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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, 2020	Dec. 31, 2019
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Common Stock	$ 1,257	$ 1,257
Debentures adjustments related to financial instrument hedging	75	57
KeyCorp Capital I
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	1.036%
KeyCorp Capital II
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Trust Preferred Securities, Net of Discount	$ 112
Common Stock	4
Principal Amount of of Debentures, Net of Discount	$ 116
Interest Rate of Trust Preferred Securities and Debentures	6.875%
KeyCorp Capital III
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Trust Preferred Securities, Net of Discount	$ 148
Common Stock	4
Principal Amount of of Debentures, Net of Discount	$ 152
Interest Rate of Trust Preferred Securities and Debentures	7.75%
HNC Statutory Trust III
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	1.656%
Willow Grove Statutory Trust I
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	1.56%
HNC Statutory Trust IV
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Trust Preferred Securities, Net of Discount	$ 17
Common Stock	1
Principal Amount of of Debentures, Net of Discount	$ 18
Interest Rate of Trust Preferred Securities and Debentures	1.548%
Westbank Capital Trust II
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Trust Preferred Securities, Net of Discount	$ 8
Common Stock	0
Principal Amount of of Debentures, Net of Discount	$ 8
Interest Rate of Trust Preferred Securities and Debentures	2.417%
Westbank Capital Trust III
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Trust Preferred Securities, Net of Discount	$ 8
Common Stock	0
Principal Amount of of Debentures, Net of Discount	$ 8
Interest Rate of Trust Preferred Securities and Debentures	2.417%
Business Trusts
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Trust Preferred Securities, Net of Discount	$ 487	466
Common Stock	17	17
Principal Amount of of Debentures, Net of Discount	$ 504	$ 483
Interest Rate of Trust Preferred Securities and Debentures	4.528%	5.214%
Treasury Rate | KeyCorp Capital II
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Basis spread on variable rate	0.20%
Treasury Rate | KeyCorp Capital III
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Basis spread on variable rate	0.25%
London Interbank Offered Rate (LIBOR) | KeyCorp Capital I
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Basis spread on variable rate	0.74%
London Interbank Offered Rate (LIBOR) | HNC Statutory Trust III
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Basis spread on variable rate	1.40%
London Interbank Offered Rate (LIBOR) | Willow Grove Statutory Trust I
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Basis spread on variable rate	1.31%
London Interbank Offered Rate (LIBOR) | HNC Statutory Trust IV
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Basis spread on variable rate	1.28%
London Interbank Offered Rate (LIBOR) | Westbank Capital Trust II and III
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 | Treasury Rate | Keycorp Capital II and III
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Basis spread on variable rate	0.50%

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Contingent Liabilities and Guarantees - Guarantees (Details) $ in Millions	Sep. 30, 2020 USD ($)
Guarantor Obligations [Line Items]
Maximum Potential Undiscounted Future Payments	$ 14,333
Liability Recorded	167
Written put options
Guarantor Obligations [Line Items]
Maximum Potential Undiscounted Future Payments	3,284
Liability Recorded	63
Standby letters of credit
Guarantor Obligations [Line Items]
Maximum Potential Undiscounted Future Payments	3,107
Liability Recorded	72
Recourse agreement with FNMA
Guarantor Obligations [Line Items]
Maximum Potential Undiscounted Future Payments	5,662
Liability Recorded	23
Residential mortgage reserve
Guarantor Obligations [Line Items]
Maximum Potential Undiscounted Future Payments	2,280
Liability Recorded	$ 9

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Contingent Liabilities and Guarantees - Additional Information (Details) $ in Millions	9 Months Ended
	Sep. 30, 2020 USD ($)
Written put options
Commitments Contingencies And Guarantees [Line Items]
Weighted average life of written put options	3 years
Standby letters of credit
Commitments Contingencies And Guarantees [Line Items]
Remaining weighted-average life of standby letters of credit in years	1 year 9 months 18 days
Recourse agreement with FNMA
Commitments Contingencies And Guarantees [Line Items]
Weighted-average remaining term for outstanding commercial mortgage loans in years	7 years 10 months 24 days
Unpaid principal balance outstanding of loans sold	$ 18,800
Maximum potential amount of undiscounted future payments possibly required as percentage of principal balance of loans outstanding	30.00%
Residential mortgage reserve
Commitments Contingencies And Guarantees [Line Items]
Unpaid principal balance outstanding of loans sold	$ 7,600
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	$ 9
Minimum | Standby letters of credit
Commitments Contingencies And Guarantees [Line Items]
Remaining actual life of standby letters of credit	1 year
Minimum | Low
Commitments Contingencies And Guarantees [Line Items]
Guarantee obligations, percentage	0.00%
Minimum | Moderate
Commitments Contingencies And Guarantees [Line Items]
Guarantee obligations, percentage	30.00%
Minimum | High
Commitments Contingencies And Guarantees [Line Items]
Guarantee obligations, percentage	70.00%
Maximum | Standby letters of credit
Commitments Contingencies And Guarantees [Line Items]
Remaining actual life of standby letters of credit	14 years 2 months 12 days
Maximum | Low
Commitments Contingencies And Guarantees [Line Items]
Guarantee obligations, percentage	30.00%
Maximum | Moderate
Commitments Contingencies And Guarantees [Line Items]
Guarantee obligations, percentage	70.00%

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Accumulated Other Comprehensive Income - Changes in AOCI (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance			$ 17,038
Other comprehensive income before reclassification, net of income taxes	$ 2	$ 164	996	$ 941
Amounts reclassified from AOCI, net of income taxes	(71)	(3)	(155)	36
Total other comprehensive income (loss), net of tax	(69)	161	841	977
Ending Balance	17,722		17,722
Unrealized gains (losses) on securities available for sale
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	650	102	115	(373)
Other comprehensive income before reclassification, net of income taxes	(8)	104	530	579
Amounts reclassified from AOCI, net of income taxes	0	(11)	(3)	(11)
Total other comprehensive income (loss), net of tax	(8)	93	527	568
Ending Balance	642	195	642	195
Unrealized gains (losses) on derivative financial instruments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	613	268	250	(50)
Other comprehensive income before reclassification, net of income taxes	11	62	467	346
Amounts reclassified from AOCI, net of income taxes	(75)	6	(168)	40
Total other comprehensive income (loss), net of tax	(64)	68	299	386
Ending Balance	549	336	549	336
Foreign currency translation adjustment
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	0	(10)	0	(14)
Other comprehensive income before reclassification, net of income taxes	0	0	0	4
Amounts reclassified from AOCI, net of income taxes	0	0	0	0
Total other comprehensive income (loss), net of tax	0	0	0	4
Ending Balance	0	(10)	0	(10)
Net pension and postretirement benefit costs
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(327)	(362)	(339)	(381)
Other comprehensive income before reclassification, net of income taxes	(1)	(2)	(1)	12
Amounts reclassified from AOCI, net of income taxes	4	2	16	7
Total other comprehensive income (loss), net of tax	3	0	15	19
Ending Balance	(324)	(362)	(324)	(362)
Accumulated Other Comprehensive Income (Loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	936	(2)	26	(818)
Total other comprehensive income (loss), net of tax	(69)		841	977
Ending Balance	$ 867	$ 159	$ 867	$ 159

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Accumulated Other Comprehensive Income - Reclassifications Out of AOCI (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other income	[1]	$ 28	$ 27	$ (27)	$ 54
Income (loss) from continuing operations before income taxes		490	491	888	1,505
Income taxes		60	70	113	239
Interest income — Loans		927	1,073	2,933	3,221
Interest expense — Long-term debt		(64)	(114)	(225)	(354)
Other expense		588	547	1,675	1,699
INCOME (LOSS) FROM CONTINUING OPERATIONS		424	413	754	1,242
Reclassification out of Accumulated Other Comprehensive Income | Realized gains on available for sale securities
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other income		0	15	4	15
Reclassification out of Accumulated Other Comprehensive Income | Realized losses on available for sale securities
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other income		0	0
Reclassification out of Accumulated Other Comprehensive Income | Unrealized gains (losses) on securities available for sale
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income (loss) from continuing operations before income taxes		0	15	4	15
Income taxes		0	4	1	4
INCOME (LOSS) FROM CONTINUING OPERATIONS		0	11	3	11
Reclassification out of Accumulated Other Comprehensive Income | Unrealized gains (losses) on derivative financial instruments
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income (loss) from continuing operations before income taxes		99	(9)	221	(53)
Income taxes		24	(3)	53	(13)
INCOME (LOSS) FROM CONTINUING OPERATIONS		75	(6)	168	(40)
Reclassification out of Accumulated Other Comprehensive Income | Amortization of losses
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other expense		(5)	(4)	(13)	(11)
Reclassification out of Accumulated Other Comprehensive Income | Settlement loss
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other expense		0	0	(8)	0
Reclassification out of Accumulated Other Comprehensive Income | Amortization of unrecognized prior service credit
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other expense				0	1
Reclassification out of Accumulated Other Comprehensive Income | Net pension and postretirement benefit costs
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income (loss) from continuing operations before income taxes		(5)	(3)	(21)	(10)
Income taxes		(1)	(1)	(5)	(3)
INCOME (LOSS) FROM CONTINUING OPERATIONS		(4)	(2)	(16)	(7)
Interest income – loans | Reclassification out of Accumulated Other Comprehensive Income | Unrealized gains (losses) on derivative financial instruments
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest income — Loans		100	(8)	224	(51)
Interest expense — Long-term debt | Reclassification out of Accumulated Other Comprehensive Income | Unrealized gains (losses) on derivative financial instruments
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest expense — Long-term debt		$ (1)	$ (1)	$ (3)	$ (2)

[1] For the three months ended September 30, 2020, we had no net securities gains (losses). For the nine months ended September 30, 2020, net securities gains (losses) totaled $4 million. For the three and nine months ended September 30, 2019, net securities gains (losses) totaled less than $15 million. For the three and nine months ended September 30, 2020, and September 30, 2019, we did not have any impairment losses related to securities.

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Shareholders' Equity - Comprehensive Capital Plan (Details) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Cash dividends declared on common shares (in usd per share)	$ 0.185	$ 0.185	$ 0.555	$ 0.525
2020 Capital Plan
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Cash dividends declared on common shares (in usd per share)	$ 0.185

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Shareholders' Equity - Schedule of Preferred Stock (Details)	Sep. 30, 2020 USD ($) $ / shares shares
Series D Preferred Stock
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
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
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
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
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
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
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
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)	$ 0.351563

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Business Segment Reporting - Additional Information (Details)	Sep. 30, 2020 sector branch
Consumer Bank
Segment Reporting Information [Line Items]
Number of state branch networks | branch	15
Commercial Bank
Segment Reporting Information [Line Items]
Number of industry sectors | sector	7

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Business Segment Reporting - Schedule of Segment Reporting Information (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020 USD ($) employee	Sep. 30, 2019 USD ($) employee	Sep. 30, 2020 USD ($) employee	Sep. 30, 2019 USD ($) employee
SUMMARY OF OPERATIONS
Net interest income (TE)	$ 1,006	$ 980	$ 3,020	$ 2,954
Noninterest income	681	650	1,850	1,808
Total revenue (TE)	1,687	1,630	4,870	4,762
Provision for credit losses	160	200	1,001	336
Depreciation and amortization expense	89	98	272	283
Other noninterest expense	948	841	2,709	2,638
Income (loss) from continuing operations before income taxes (TE)	490	491	888	1,505
Allocated income taxes and TE adjustments	66	78	134	263
INCOME (LOSS) FROM CONTINUING OPERATIONS	424	413	754	1,242
Income (loss) from discontinued operations, net of taxes	4	3	7	6
NET INCOME (LOSS)	428	416	761	1,248
Less: Net income (loss) attributable to noncontrolling interests	0	0	0	0
NET INCOME (LOSS) ATTRIBUTABLE TO KEY	428	416	761	1,248
AVERAGE BALANCES
Loans and leases	104,919	91,956	103,018	90,805
Total assets	168,811	144,158	159,746	142,319
Deposits	134,944	110,279	124,455	109,162
OTHER FINANCIAL DATA
Net loan charge-offs	$ 127	$ 197	$ 308	$ 326
Return on average allocated equity, continuing operations (as a percent)	9.51%	9.57%	5.74%	10.09%
Return on average allocated equity (as a percent)	9.60%	9.64%	5.79%	10.14%
Average full-time equivalent employees | employee	17,097	16,898	16,758	17,217
Operating Segments | Consumer Bank
SUMMARY OF OPERATIONS
Net interest income (TE)	$ 604	$ 595	$ 1,788	$ 1,780
Noninterest income	267	238	745	683
Total revenue (TE)	871	833	2,533	2,463
Provision for credit losses	(16)	48	291	133
Depreciation and amortization expense	19	25	59	71
Other noninterest expense	552	504	1,610	1,547
Income (loss) from continuing operations before income taxes (TE)	316	256	573	712
Allocated income taxes and TE adjustments	75	60	136	169
INCOME (LOSS) FROM CONTINUING OPERATIONS	241	196	437	543
Income (loss) from discontinued operations, net of taxes	0	0	0	0
NET INCOME (LOSS)	241	196	437	543
Less: Net income (loss) attributable to noncontrolling interests	0	0	0	0
NET INCOME (LOSS) ATTRIBUTABLE TO KEY	241	196	437	543
AVERAGE BALANCES
Loans and leases	41,471	32,760	38,632	31,993
Total assets	44,888	36,397	42,481	35,524
Deposits	83,175	72,995	78,682	72,201
OTHER FINANCIAL DATA
Net loan charge-offs	$ 23	$ 40	$ 106	$ 114
Return on average allocated equity, continuing operations (as a percent)	27.03%	23.22%	16.69%	22.24%
Return on average allocated equity (as a percent)	27.03%	23.22%	16.69%	22.24%
Average full-time equivalent employees | employee	8,350	8,458	8,198	8,682
Operating Segments | Commercial Bank
SUMMARY OF OPERATIONS
Net interest income (TE)	$ 421	$ 399	$ 1,285	$ 1,206
Noninterest income	383	381	1,007	1,035
Total revenue (TE)	804	780	2,292	2,241
Provision for credit losses	163	32	696	80
Depreciation and amortization expense	35	35	108	100
Other noninterest expense	408	343	1,131	1,051
Income (loss) from continuing operations before income taxes (TE)	198	370	357	1,010
Allocated income taxes and TE adjustments	38	69	32	190
INCOME (LOSS) FROM CONTINUING OPERATIONS	160	301	325	820
Income (loss) from discontinued operations, net of taxes	0	0	0	0
NET INCOME (LOSS)	160	301	325	820
Less: Net income (loss) attributable to noncontrolling interests	0	0	0	0
NET INCOME (LOSS) ATTRIBUTABLE TO KEY	160	301	325	820
AVERAGE BALANCES
Loans and leases	62,925	58,215	63,679	57,803
Total assets	72,613	66,549	72,988	65,781
Deposits	51,238	36,204	45,082	35,534
OTHER FINANCIAL DATA
Net loan charge-offs	$ 104	$ 35	$ 201	$ 88
Return on average allocated equity, continuing operations (as a percent)	12.57%	26.18%	8.93%	24.15%
Return on average allocated equity (as a percent)	12.57%	26.18%	8.93%	24.15%
Average full-time equivalent employees | employee	2,112	2,226	2,092	2,285
Other
SUMMARY OF OPERATIONS
Net interest income (TE)	$ (19)	$ (14)	$ (53)	$ (32)
Noninterest income	31	31	98	90
Total revenue (TE)	12	17	45	58
Provision for credit losses	13	120	14	123
Depreciation and amortization expense	35	38	105	112
Other noninterest expense	(12)	(6)	(32)	40
Income (loss) from continuing operations before income taxes (TE)	(24)	(135)	(42)	(217)
Allocated income taxes and TE adjustments	(47)	(51)	(34)	(96)
INCOME (LOSS) FROM CONTINUING OPERATIONS	23	(84)	(8)	(121)
Income (loss) from discontinued operations, net of taxes	4	3	7	6
NET INCOME (LOSS)	27	(81)	(1)	(115)
Less: Net income (loss) attributable to noncontrolling interests	0	0	0	0
NET INCOME (LOSS) ATTRIBUTABLE TO KEY	27	(81)	(1)	(115)
AVERAGE BALANCES
Loans and leases	523	981	707	1,009
Total assets	51,310	41,212	44,277	41,014
Deposits	531	1,080	691	1,427
OTHER FINANCIAL DATA
Net loan charge-offs	$ 0	$ 122	$ 1	$ 124
Return on average allocated equity, continuing operations (as a percent)	1.00%	(3.62%)	(0.12%)	(1.87%)
Return on average allocated equity (as a percent)	1.18%	(3.49%)	(0.01%)	(1.78%)
Average full-time equivalent employees | employee	6,635	6,214	6,468	6,250

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Revenue from Contracts with Customers (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	$ 376	$ 341	$ 1,005	$ 966
Noninterest income	681	650	1,850	1,808
Contract assets	0	0	0	0
Contract liabilities	0	0	0	0
Trust and investment services income
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	115	105	328	313
Investment banking and debt placement fees
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	69	78	176	188
Services charges on deposit accounts
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	77	86	229	251
Cards and payments income
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	112	69	265	204
Other noninterest income
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	3	3	7	10
Noninterest income	274	278	747	752
Operating Segments | Consumer Bank
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	191	193	542	567
Operating Segments | Consumer Bank | Trust and investment services income
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	100	89	279	265
Operating Segments | Consumer Bank | Investment banking and debt placement fees
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	0	0	0	0
Operating Segments | Consumer Bank | Services charges on deposit accounts
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	45	59	138	169
Operating Segments | Consumer Bank | Cards and payments income
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	43	42	118	123
Operating Segments | Consumer Bank | Other noninterest income
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	3	3	7	10
Operating Segments | Commercial Bank
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	185	148	463	399
Operating Segments | Commercial Bank | Trust and investment services income
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	15	16	49	48
Operating Segments | Commercial Bank | Investment banking and debt placement fees
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	69	78	176	188
Operating Segments | Commercial Bank | Services charges on deposit accounts
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	32	27	91	82
Operating Segments | Commercial Bank | Cards and payments income
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	69	27	147	81
Operating Segments | Commercial Bank | Other noninterest income
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	0	0	0	0
Other
Disaggregation of Revenue [Line Items]
Noninterest income	$ 31	$ 31	98	90
Segment Reconciling Items [Member]
Disaggregation of Revenue [Line Items]
Noninterest income			$ 1,850	$ 1,808