Asset Quality

9 Months Ended

Sep. 30, 2025

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 ("Summary of Significant Accounting Policies") under the heading "Allowance for Loan and Lease Losses" beginning on page 112 of our 2024 Form 10-K.

The ALLL at September 30, 2025, 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, 2025:

Dollars in millions	June 30, 2025		Provision			Charge-offs		Recoveries		September 30, 2025
Commercial and Industrial	$	678	$	119		$	(87)	$	21	$	731
Commercial real estate:
Real estate — commercial mortgage	319		(15)			(27)		—		277
Real estate — construction	57		(7)			—		—		50
Total commercial real estate loans	376		(22)			(27)		—		327
Commercial lease financing	32		(7)			—		—		25
Total commercial loans	1,086		90			(114)		21		1,083
Real estate — residential mortgage	68		(1)			—		1		68
Home equity loans	69		(1)			—		—		68
Other consumer loans	141		15			(15)		2		143
Credit cards	82		9			(11)		2		82
Total consumer loans	360		22			(26)		5		361
Total ALLL — continuing operations	1,446		112		(a)	(140)		26		1,444
Discontinued operations	12		—			(1)		1		12
Total ALLL — including discontinued operations	$	1,458	$	112		$	(141)	$	27	$	1,456

(a)Excludes a credit related to reserves on lending-related commitments of $5 million.

Three months ended September 30, 2024:

Dollars in millions	June 30, 2024		Provision			Charge-offs		Recoveries		September 30, 2024
Commercial and Industrial	$	682	$	101		$	(131)	$	7	$	659
Commercial real estate:
Real estate — commercial mortgage	383		(19)			(7)		1		358
Real estate — construction	66		(2)			—		—		64
Total commercial real estate loans	449		(21)			(7)		1		422
Commercial lease financing	29		—			—		—		29
Total commercial loans	1,160		80			(138)		8		1,110
Real estate — residential mortgage	115		(5)			—		1		111
Home equity loans	71		1			(1)		1		72
Other consumer loans	128		15			(17)		2		128
Credit cards	73		10			(11)		1		73
Total consumer loans	387		21			(29)		5		384
Total ALLL — continuing operations	1,547		101		(a)	(167)		13		1,494
Discontinued operations	14		—			(1)		—		13
Total ALLL — including discontinued operations	$	1,561	$	101		$	(168)	$	13	$	1,507

(a)Excludes a credit related to reserves on lending-related commitments of $6 million.

Nine months ended September 30, 2025:

Dollars in millions	December 31, 2024		Provision			Charge-offs		Recoveries		September 30, 2025
Commercial and Industrial	$	639	$	285		$	(243)	$	50	$	731
Commercial real estate:
Real estate — commercial mortgage	320		25			(69)		1		277
Real estate — construction	51		(1)			—		—		50
Total commercial real estate loans	371		24			(69)		1		327
Commercial lease financing	27		—			(2)		—		25
Total commercial loans	1,037		309			(314)		51		1,083
Real estate — residential mortgage	90		(24)			(1)		3		68
Home equity loans	70		(3)			(1)		2		68
Other consumer loans	136		43			(42)		6		143
Credit cards	76		36			(35)		5		82
Total consumer loans	372		52			(79)		16		361
Total ALLL — continuing operations	1,409		361		(a)	(393)		67		1,444
Discontinued operations	13		—			(2)		1		12
Total ALLL — including discontinued operations	$	1,422	$	361		$	(395)	$	68	$	1,456

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

Nine months ended September 30, 2024:

Dollars in millions	December 31, 2023		Provision			Charge-offs		Recoveries		September 30, 2024
Commercial and Industrial	$	556	$	336		$	(279)	$	46	$	659
Commercial real estate:
Real estate — commercial mortgage	419		(41)			(22)		2		358
Real estate — construction	52		12			—		—		64
Total commercial real estate loans	471		(29)			(22)		2		422
Commercial lease financing	33		(3)			(6)		5		29
Total commercial loans	1,060		304			(307)		53		1,110
Real estate — residential mortgage	162		(53)			(2)		4		111
Home equity loans	86		(14)			(2)		2		72
Other consumer loans	122		49			(49)		6		128
Credit cards	78		26			(35)		4		73
Total consumer loans	448		8			(88)		16		384
Total ALLL — continuing operations	1,508		312		(a)	(395)		69		1,494
Discontinued operations	16		(1)			(3)		1		13
Total ALLL — including discontinued operations	$	1,524	$	311		$	(398)	$	70	$	1,507

(a)Excludes a credit for losses on lending-related commitments of $16 million.

As described in Note 1 ("Summary of Significant Accounting Policies"), under the heading “Allowance for Loan and Lease Losses” beginning on page 112 of our 2024 Form 10-K, we estimate the ALLL using relevant available information, from internal and external sources, relating to past events, current economic and portfolio 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), fixed investment, business bankruptcies, GDP, industrial production, unemployment rate, and Producer Price Index
	Commercial real estate	Property & real estate price indices, unemployment rate, business bankruptcies, GDP, and SOFR
	Commercial lease financing	BBB corporate bond rate (spread), GDP, and unemployment rate
Consumer	Real estate — residential mortgage	GDP, home price index, unemployment rate, 30 year mortgage rate and U.S. household income
	Home equity	Home price index, unemployment rate, and 30 year mortgage rate
	Other consumer	Unemployment rate, prime rate and U.S. household income
	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, utilization, 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, 2025, the economy continues to be resilient, but shows signs of slowing down. Growth is weakening, inflationary pressures continue, and policy uncertainty adds to the existing economic pressures.

We utilized the Moody’s August 2025 Consensus forecast as the baseline forecast to estimate our expected credit losses as of September 30, 2025. This baseline scenario reflects slowing growth over the next two years, but no recession. U.S. GDP is expected to grow at an annual rate of 1.7% for 2025 and 2026. The expected National Unemployment Rate is forecasted to peak at 4.5% in mid-2026. The U.S. Consumer Price Index is forecasted to remain close to 3% through late 2026. The Federal Funds Rate decreases gradually over the next year, settling near 3%.

The geopolitical environment remains both uncertain and complex, which poses potential downside-risks to the economic outlook over the next two years, although to what extent remains highly uncertain. These economic uncertainty considerations continue to be addressed through a qualitative reserve adjustment, which leverages downside economic assumptions.

As a result of the current economic uncertainty, our future loss estimates may vary considerably from our September 30, 2025 assumptions.

Commercial Loan Portfolio

The ALLL from continuing operations for the commercial segment decreased $3 million, or 0.3%, from June 30, 2025. The stable reserve levels are reflective of the uncertain economic environment, where economic drivers remain largely unchanged, as the full impacts of tariffs and other policy changes are lagged in making their way through the economy. Changes in loan balances and portfolio mix resulted in a decrease in reserves for our commercial real estate loan segment, which was partially offset by an increase in the reserves for our commercial and industrial segment.

Consumer Loan Portfolio

The ALLL from continuing operations for the consumer segment increased by $1 million, or 0.3%,from June 30, 2025. The stable reserve levels are reflective of the continued strong credit performance, particularly for the residential mortgage loan book which represents the largest segment of the consumer portfolio.

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 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)(b)

As of September 30, 2025	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
Dollars in millions	2025		2024		2023		2022		2021		Prior						Total
Commercial and Industrial
Risk Rating:
Pass	$	6,584	$	6,163	$	2,577	$	5,613	$	3,015	$	4,348	$	24,582	$	143	$	53,025
Criticized (Accruing)	85		204		172		637		291		563		1,556		5		3,513
Criticized (Nonaccruing)	6		21		17		53		23		8		124		1		253
Total commercial and industrial	6,675		6,388		2,766		6,303		3,329		4,919		26,262		149		56,791
Current year gross write-offs	8		8		18		30		8		21		150		—		243
Real estate — commercial mortgage
Risk Rating:
Pass	2,015		930		619		2,191		1,651		3,235		1,183		28		11,852
Criticized (Accruing)	22		109		119		430		228		365		28		11		1,312
Criticized (Nonaccruing)	—		—		—		127		46		38		3		—		214
Total real estate — commercial mortgage	2,037		1,039		738		2,748		1,925		3,638		1,214		39		13,378
Current year gross write-offs	19		6		—		6		26		9		3		—		69
Real estate — construction
Risk Rating:
Pass	193		476		835		467		219		73		262		2		2,527
Criticized (Accruing)	—		—		5		115		42		128		—		—		290
Criticized (Nonaccruing)	—		—		—		—		—		—		—		—		—
Total real estate — construction	193		476		840		582		261		201		262		2		2,817
Current year gross write-offs	—		—		—		—		—		—		—		—		—
Commercial lease financing
Risk Rating:
Pass	203		238		333		514		295		677		—		—		2,260
Criticized (Accruing)	—		2		34		15		2		20		—		—		73
Criticized (Nonaccruing)	—		—		—		—		—		—		—		—		—
Total commercial lease financing	203		240		367		529		297		697				—		2,333
Current year gross write-offs	—		—		—		—		—		2		—		—		2
Total commercial loans	$	9,108	$	8,143	$	4,711	$	10,162	$	5,812	$	9,455	$	27,738	$	190	$	75,319
Total commercial loan current year gross write-offs	$	27	$	14	$	18	$	36	$	34	$	32	$	153	$	—	$	314

As of December 31, 2024	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
Dollars in millions	2024		2023		2022		2021		2020		Prior						Total
Commercial and Industrial
Risk Rating:
Pass	$	6,345	$	3,097	$	7,119	$	3,934	$	1,617	$	3,969	$	22,709	$	115	$	48,905
Criticized (Accruing)	172		219		597		419		208		476		1,550		41		3,682
Criticized (Nonaccruing)	23		13		68		30		2		31		153		2		322
Total commercial and industrial	6,540		3,329		7,784		4,383		1,827		4,476		24,412		158		52,909
Current year gross write-offs	1		12		65		106		4		31		144		—		363
Real estate — commercial mortgage
Risk Rating:
Pass	1,052		748		2,818		2,202		594		3,194		1,001		41		11,650
Criticized (Accruing)	31		85		571		281		93		316		30		9		1,416
Criticized (Nonaccruing)	—		—		123		52		3		66		—		—		244
Total real estate — commercial mortgage	1,083		833		3,512		2,535		690		3,576		1,031		50		13,310
Current year gross write-offs	—		—		1		6		—		32		1		—		40
Real estate — construction
Risk Rating:
Pass	199		846		1,021		340		87		67		42		2		2,604
Criticized (Accruing)	—		17		112		58		68		77		—		—		332
Criticized (Nonaccruing)	—		—		—		—		—		—		—		—		—
Total real estate — construction	199		863		1,133		398		155		144		42		2		2,936
Current year gross write-offs	—		—		—		—		—		—		—		—		—
Commercial lease financing
Risk Rating:
Pass	301		430		626		368		217		679		—		—		2,621
Criticized (Accruing)	2		34		33		9		16		21		—		—		115
Criticized (Nonaccruing)	—		—		—		—		—		—		—		—		—
Total commercial lease financing	303		464		659		377		233		700		—		—		2,736
Current year gross write-offs	—		—		—		—		—		7		—		—		7
Total commercial loans	$	8,125	$	5,489	$	13,088	$	7,693	$	2,905	$	8,896	$	25,485	$	210	$	71,891
Total commercial loan current year gross write-offs	$	1	$	12	$	66	$	112	$	4	$	70	$	145	$	—	$	410

(a)Accrued interest of $351 million and $322 million as of September 30, 2025, and December 31, 2024, respectively, presented in “Accrued income and other assets” on the Consolidated Balance Sheets, was excluded from the amortized cost basis disclosed in these tables.

(b)Gross write-off information is presented on a year-to-date basis for the nine months ended September 30, 2025 and the twelve months ended December 31, 2024.

Consumer Credit Exposure

Credit Risk Profile by FICO Score and Vintage (a)(b)

As of September 30, 2025	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
Dollars in millions	2025		2024		2023		2022		2021		Prior						Total
Real estate — residential mortgage
FICO Score:
750 and above	$	256	$	260	$	638	$	5,427	$	6,846	$	3,482	$	—	$	—	$	16,909
660 to 749	44		38		84		531		603		448		—		—		1,748
Less than 660	2		10		21		84		65		149		—		—		331
No Score	2		3		2		1		—		10		2		—		20
Total real estate — residential mortgage	304		311		745		6,043		7,514		4,089		2		—		19,008
Current period gross write-offs	—		—		—		—		—		1		—		—		1
Home equity loans
FICO Score:
750 and above	35		27		25		121		701		1,217		1,783		195		4,104
660 to 749	13		15		14		45		158		269		732		62		1,308
Less than 660	1		2		5		15		43		107		248		23		444
No Score	—		—		—		—		—		1		6		—		7
Total home equity loans	49		44		44		181		902		1,594		2,769		280		5,863
Current period gross write-offs	—		—		—		—		—		—		1		—		1
Other consumer loans
FICO Score:
750 and above	137		80		112		1,024		1,076		635		83		—		3,147
660 to 749	86		54		82		234		228		188		175		—		1,047
Less than 660	10		12		23		57		55		50		53		—		260
No Score	17		12		6		12		13		8		257		—		325
Total consumer direct loans	250		158		223		1,327		1,372		881		568		—		4,779
Current period gross write-offs	3		4		6		6		6		6		11		—		42
Credit cards
FICO Score:
750 and above	—		—		—		—		—		—		460		—		460
660 to 749	—		—		—		—		—		—		366		—		366
Less than 660	—		—		—		—		—		—		106		—		106
No Score	—		—		—		—		—		—		1		—		1
Total credit cards	—		—		—		—		—		—		933		—		933
Current period gross write-offs	—		—		—		—		—		—		35		—		35
Total consumer loans	$	603	$	513	$	1,012	$	7,551	$	9,788	$	6,564	$	4,272	$	280	$	30,583
Total consumer loan current period gross write-offs	$	3	$	4	$	6	$	6	$	6	$	7	$	47	$	—	$	79

As of December 31, 2024	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
Dollars in millions	2024		2023		2022		2021		2020		Prior						Total
Real estate — residential mortgage
FICO Score:
750 and above	$	281	$	669	$	5,720	$	7,203	$	2,247	$	1,510	$	—	$	—	$	17,630
660 to 749	67		116		597		655		199		280		—		—		1,914
Less than 660	4		13		81		63		24		134		—		—		319
No Score	3		2		1		—		1		15		1		—		23
Total real estate — residential mortgage	355		800		6,399		7,921		2,471		1,939		1		—		19,886
Current period gross write-offs	1		—		1		—		—		1		—		—		3
Home equity loans
FICO Score:
750 and above	33		31		139		775		612		731		1,886		251		4,458
660 to 749	17		17		50		181		129		186		772		80		1,432
Less than 660	2		5		15		40		31		82		263		25		463
No Score	—		—		—		—		—		1		4		—		5
Total home equity loans	52		53		204		996		772		1,000		2,925		356		6,358
Current period gross write-offs	—		—		—		—		—		1		1		—		2
Other consumer loans
FICO Score:
750 and above	107		143		1,149		1,210		527		245		88		—		3,469
660 to 749	70		109		275		268		128		108		184		—		1,142
Less than 660	9		23		59		59		29		24		56		—		259
No Score	35		12		18		17		7		12		196		—		297
Total consumer direct loans	221		287		1,501		1,554		691		389		524		—		5,167
Current period gross write-offs	—		7		17		12		7		6		15		—		64
Credit cards
FICO Score:
750 and above	—		—		—		—		—		—		476		—		476
660 to 749	—		—		—		—		—		—		372		—		372
Less than 660	—		—		—		—		—		—		109		—		109
No Score	—		—		—		—		—		—		1		—		1
Total credit cards	—		—		—		—		—		—		958		—		958
Current period gross write-offs	—		—		—		—		—		—		47		—		47
Total consumer loans	$	628	$	1,140	$	8,104	$	10,471	$	3,934	$	3,328	$	4,408	$	356	$	32,369
Total consumer current period gross write-offs	$	1	$	7	$	18	$	12	$	7	$	8	$	63	$	—	$	116

(a)Accrued interest of $121 million and $134 million as of September 30, 2025, and December 31, 2024, respectively, presented in “Accrued income and other assets” on the Consolidated Balance Sheets, was excluded from the amortized cost basis disclosed in this table.

(b)Gross write-off information is presented on a year-to-date basis for the nine months ended September 30, 2025 and the twelve months ended December 31, 2024.

Nonperforming and Past Due Loans

Our policies for determining past due loans, placing loans on nonaccrual, applying payments on nonaccrual loans, and resuming accrual of interest for our commercial and consumer loan portfolios are disclosed in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Nonperforming Loans” beginning on page 111 of our 2024 Form 10-K.

The following aging analysis of past due and current loans as of September 30, 2025, and December 31, 2024, provides further information regarding Key’s credit exposure.

Aging Analysis of Loan Portfolio(a)

As of September 30, 2025	Current (b)(c)		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 (b)		Total Loans (d)
Dollars in millions
LOAN TYPE
Commercial and industrial	$	56,431	$	45	$	24	$	38	$	253	$	360	$	56,791
Commercial real estate:
Commercial mortgage	13,030		79		8		47		214		348		13,378
Construction	2,794		—		22		1		—		23		2,817
Total commercial real estate loans	15,824		79		30		48		214		371		16,195
Commercial lease financing	2,332		1		—		—		—		1		2,333
Total commercial loans	$	74,587	$	125	$	54	$	86	$	467	$	732	$	75,319
Real estate — residential mortgage	$	18,891	$	13	$	6	$	—	$	98	$	117	$	19,008
Home equity loans	5,754		18		5		4		82		109		5,863
Other consumer loans	4,741		15		9		10		4		38		4,779
Credit cards	907		5		4		10		7		26		933
Total consumer loans	$	30,293	$	51	$	24	$	24	$	191	$	290	$	30,583
Total loans	$	104,880	$	176	$	78	$	110	$	658	$	1,022	$	105,902

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

(b)Accrued interest of $472 million presented in “Accrued income and other assets” on the Consolidated Balance Sheets is excluded from the amortized cost basis disclosed in this table.

(c)Includes balances of $69 million in Commercial mortgage and $5 million in Real estate - residential mortgage associated with loans sold to GNMA that are 90 days or more past due where Key has the right but not the obligation to repurchase and whose payments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veteran Affairs.

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

As of December 31, 2024	Current (b)(c)		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 (b)		Total Loans (d)
Dollars in millions
LOAN TYPE
Commercial and industrial	$	52,473	$	48	$	21	$	45	$	322	$	436	$	52,909
Commercial real estate:
Commercial mortgage	13,018		4		29		16		243		292		13,310
Construction	2,932		—		—		4		—		4		2,936
Total commercial real estate loans	15,950		4		29		20		243		296		16,246
Commercial lease financing	2,728		1		6		1		—		8		2,736
Total commercial loans	$	71,151	$	53	$	56	$	66	$	565	$	740	$	71,891
Real estate — residential mortgage	$	19,766	$	20	$	8	$	—	$	92	$	120	$	19,886
Home equity loans	6,232		26		8		3		89		126		6,358
Other consumer loans	5,129		15		9		9		5		38		5,167
Credit cards	928		6		5		12		7		30		958
Total consumer loans	$	32,055	$	67	$	30	$	24	$	193	$	314	$	32,369
Total loans	$	103,206	$	120	$	86	$	90	$	758	$	1,054	$	104,260

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

(b)Accrued interest of $456 million presented in “Accrued income and other assets” on the Consolidated Balance Sheets is excluded from the amortized cost basis disclosed in this table.

(c)Includes balances of $75 million in Commercial mortgage and $7 million in Real estate - residential mortgage associated with loans sold to GNMA that are 90 days or more past due where Key has the right but not the obligation to repurchase and whose payments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veteran Affairs.

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

At September 30, 2025, the carrying amount of our commercial nonperforming loans outstanding represented 70% of their original contractual amount owed, total nonperforming loans outstanding represented 76% of their original contractual amount owed, and nonperforming assets in total were carried at 79% of their original contractual amount owed.

Nonperforming loans reduced expected interest income by $12 million and $39 million for the three and nine months ended September 30, 2025, respectively, and $14 million and $41 million for the three and nine months ended September 30, 2024, respectively.

The amortized cost basis of nonperforming loans on nonaccrual status for which there is no related allowance for credit losses was $361 million at September 30, 2025 and $381 million at December 31, 2024.

As of September 30, 2025, 48% of our nonperforming loans were contractually current versus 43% as of December 31, 2024.

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 cash, accounts receivable, inventory, commercial machinery, commercial properties, commercial real estate construction projects, enterprise value, and stock or ownership interests in the borrowing entity. When appropriate we also consider the enterprise value of the borrower as a repayment source for collateral-dependent loans. Our consumer loans have collateral that includes residential real estate, automobiles, boats, and RVs.

At September 30, 2025 and September 30, 2024, the recorded investment of consumer residential mortgage and home equity loans in the process of foreclosure was $66 million and $73 million, respectively.

There were no significant changes in the extent to which collateral secures our collateral-dependent financial assets during the three and nine months ended September 30, 2025.

Loan Modifications Made to Borrowers Experiencing Financial Difficulty

The ALLL for loans modified for borrowers experiencing financial difficulty is determined based on Key’s ALLL policy as described within Note 1 (“Summary of Significant Accounting Policies”) of our 2024 Form 10-K.

Modifications for Borrowers Experiencing Financial Difficulty

Our strategy in working with commercial borrowers is to allow them time to improve their financial position through loan modification. Commercial borrowers that are rated substandard or worse in accordance with the regulatory definition, or that cannot otherwise restructure at market terms and conditions, are considered to be experiencing financial difficulty. A modification of a loan is subject to the normal underwriting standards and processes for other similar credit extensions, both new and existing. The modified loan is evaluated to determine if it is a new loan or a continuation of the prior loan.

Consumer loans in which a borrower requires a modification as a result of negative changes to their financial condition or to avoid default, generally indicate the borrower is experiencing financial difficulty. The primary modifications made to consumer loans are amortization, maturity date and interest rate changes. Consumer borrowers identified as experiencing financial difficulty are generally unable to refinance their loans through our normal origination channel or through other independent sources.

The following tables show the amortized cost basis at the end of the noted reporting periods of the loans modified to borrowers experiencing financial difficulty within the past 12 months of the noted periods. The tables do not include those modifications that only resulted in an insignificant payment delay. The tables do not include consumer loans that are still within a trial modification period. Trial modifications may be done for consumer borrowers where a trial payment plan period is offered in advance of a permanent loan modification. As of September 30, 2025, there were 103 loans totaling $16 million in a trial modification period. As of September 30, 2024, there were 110 loans totaling $19 million in a trial modification period.

Commitments outstanding to lend additional funds to borrowers experiencing financial difficulty whose loans were modified were $100 million and $29 million at September 30, 2025 and September 30, 2024, respectively.

As of September 30, 2025	Interest Rate Reduction		Term Extension		Other		Combination (a)		Total
Dollars in millions	Amortized Cost Basis		Amortized Cost Basis		Amortized Cost Basis		Amortized Cost Basis		Amortized Cost Basis		% of Total Loan Type
LOAN TYPE
Commercial and Industrial	$	2	$	76	$	22	$	16	$	116	0.20	%
Commercial real estate:
Commercial mortgage	—		194		2		52		248		1.85
Construction	—		34		—		—		34		1.21
Total commercial real estate loans	—		228		2		52		282		1.74
Total commercial loans	$	2	$	304	$	24	$	68	$	398	0.53	%
Real estate — residential mortgage	$	2	$	1	$	—	$	10	$	13	0.07	%
Home equity loans	4		1		1		5		11		0.19
Other consumer loans	—		3		—		3		6		0.13
Credit cards	—		—		—		3		3		0.32
Total consumer loans	$	6	$	5	$	1	$	21	$	33	0.11	%
Total loans	$	8	$	309	$	25	$	89	$	431	0.41	%

As of September 30, 2024	Interest Rate Reduction		Term Extension		Other		Combination (a)		Total
Dollars in millions	Amortized Cost Basis		Amortized Cost Basis		Amortized Cost Basis		Amortized Cost Basis		Amortized Cost Basis		% of Total Loan Type
LOAN TYPE
Commercial and Industrial	$	—	$	126	$	11	$	16	$	153	0.29	%
Commercial real estate:
Commercial mortgage	28		189		3		—		220		1.61
Construction	—		27		—		—		27		0.87
Total commercial real estate loans	28		216		3		—		247		1.48
Total commercial loans	$	28	$	342	$	14	$	16	$	400	0.55	%
Real estate — residential mortgage	$	1	$	—	$	—	$	11	$	12	0.06	%
Home equity loans	3		1		1		6		11		0.17
Other consumer loans	—		1		—		2		3		0.06
Credit cards	—		—		—		4		4		0.44
Total consumer loans	$	4	$	2	$	1	$	23	$	30	0.09	%
Total loans	$	32	$	344	$	15	$	39	$	430	0.41	%

(a)Combination modifications consist primarily of loans modified with both an interest rate reduction and a term extension.

Financial Effects of Modifications to Borrowers Experiencing Financial Difficulty

The following table summarizes the financial impacts of loan modifications made to specific loans for the noted periods. For the three and nine months ended September 30, 2025, the weighted-average interest rate change for commercial and industrial loans was comprised solely of modifications of commercial credit card balances.

Three months ended September 30, 2025	Weighted-average Interest Rate Change		Weighted-average Term Extension (in years)
LOAN TYPE
Commercial and Industrial	(0.43)	%	0.41
Commercial mortgage	—	%	0.45
Construction	—	%	0.35
Real estate — residential mortgage	(1.63)	%	7.00
Home equity loans	(2.85)	%	7.69
Other consumer loans	(3.59)	%	1.52
Credit cards	(1.16)	%	0.25

Nine months ended September 30, 2025	Weighted-average Interest Rate Change		Weighted-average Term Extension (in years)
LOAN TYPE
Commercial and Industrial	(0.43)	%	0.83
Commercial mortgage	—	%	1.09
Construction	—	%	0.02
Real estate — residential mortgage	(1.80)	%	5.87
Home equity loans	(2.82)	%	5.95
Other consumer loans	(3.77)	%	1.04
Credit cards	(8.46)	%	0.75

Three months ended September 30, 2024	Weighted-average Interest Rate Change		Weighted-average Term Extension (in years)
LOAN TYPE
Commercial and Industrial	(17.00)	%	0.42
Commercial mortgage	—	%	0.43
Construction	—	%	0.00
Real estate — residential mortgage	(1.85)	%	2.47
Home equity loans	(4.68)	%	5.60
Other consumer loans	(4.18)	%	0.40
Credit cards	(12.13)	%	0.25

Nine months ended September 30, 2024	Weighted-average Interest Rate Change		Weighted-average Term Extension (in years)
LOAN TYPE
Commercial and Industrial	(6.29)	%	1.14
Commercial mortgage	(1.91)	%	0.20
Construction	—	%	3.20
Real estate — residential mortgage	(1.73)	%	5.77
Home equity loans	(3.75)	%	6.44
Other consumer loans	(3.90)	%	0.62
Credit cards	(15.21)	%	0.75

Amortized Cost Basis of Modified Loans That Subsequently Defaulted

Key considers modifications to borrowers experiencing financial difficulty that subsequently become 90 days or more past due under modified terms as subsequently defaulted. The following table presents the amortized cost of modified loans to borrowers experiencing financial difficulty that were within 12 months of their modification and subsequently defaulted within the noted periods.

Three months ended September 30, 2025
Dollars in millions	Interest Rate Reduction		Term Extension		Other		Combination		Total
LOAN TYPE
Credit cards	$	—	$	—	$	—	$	1	$	1
Total consumer loans	$	—	$	—	$	—	$	1	$	1
Total loans	$	—	$	—	$	—	$	1	$	1

Nine months ended September 30, 2025
Dollars in millions	Interest Rate Reduction		Term Extension		Other		Combination		Total
LOAN TYPE
Commercial and Industrial	$	—	$	2	$	7	$	—	$	9
Commercial real estate
Commercial mortgage	—		19		—		—		19
Total commercial real estate loans	—		19		—		—		19
Total commercial loans	$	—	$	21	$	7	$	—	$	28
Real estate — residential mortgage	$	—	$	—	$	—	$	1	$	1
Credit cards	—		—		—		2		2
Total consumer loans	$	—	$	—	$	—	$	3	$	3
Total loans	$	—	$	21	$	7	$	3	$	31

Three months ended September 30, 2024
Dollars in millions	Interest Rate Reduction		Term Extension		Other		Combination		Total
LOAN TYPE
Commercial and Industrial	$	—	$	1	$	—	$	—	$	1
Commercial real estate
Commercial mortgage	$	28	$	—	$	—	$	1	$	29
Total commercial loans	28		1		—		1		30
Total loans	$	28	$	1	$	—	$	1	$	30

Nine months ended September 30, 2024
Dollars in millions	Interest Rate Reduction		Term Extension		Other		Combination		Total
LOAN TYPE
Commercial and Industrial	$	—	$	17	$	—	$	1	$	18
Commercial real estate
Commercial mortgage	28		—		—		1		29
Total commercial real estate loans	28		—		—		1		29
Total commercial loans	$	28	$	17	$	—	$	2	$	47
Home equity loans	$	—	$	—	$	—	$	1	$	1
Total consumer loans	$	—	$	—	$	—	$	1	$	1
Total loans	$	28	$	17	$	—	$	3	$	48

Key closely monitors the performance of loans that are modified for borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the amortized cost as of September 30, 2025, of loans modified during the 12 months then ended, by aging.

As of September 30, 2025	Current		30-89 Days  Past Due		90 and Greater Days Past Due		Total
Dollars in millions
LOAN TYPE
Commercial and Industrial	$	102	$	4	$	10	$	116
Commercial real estate
Commercial mortgage	244		2		2		248
Construction	34		—		—		34
Total commercial real estate loans	278		2		2		282
Commercial lease financing	—		—		—		—
Total commercial loans	$	380	$	6	$	12	$	398
Real estate — residential mortgage	$	12	$	1	$	—	$	13
Home equity loans	9		1		1		11
Other consumer loans	6		—		—		6
Credit cards	3		—		—		3
Total consumer loans	$	30	$	2	$	1	$	33
Total loans	$	410	$	8	$	13	$	431

The following table presents the amortized cost as of September 30, 2024, of loans modified during the 12 months then ended, by aging.

As of September 30, 2024	Current		30-89 Days  Past Due		90 and Greater Days Past Due		Total
Dollars in millions
LOAN TYPE
Commercial and Industrial	$	132	$	18	$	3	$	153
Commercial real estate
Commercial mortgage	189		—		31		220
Construction	27		—		—		27
Total commercial real estate loans	348		18		34		400
Commercial lease financing	—		—		—		—
Total commercial loans	$	348	$	18	$	34	$	400
Real estate — residential mortgage	$	9	$	3	$	—	$	12
Home equity loans	9		1		1		11
Other consumer loans	3		—		—		3
Credit cards	4		—		—		4
Total consumer loans	$	25	$	4	$	1	$	30
Total loans	$	373	$	22	$	35	$	430

Liability for Credit Losses on Lending-related Commitments

The liability for credit losses on lending-related commitments is included in “accrued expense and other liabilities” on the balance sheet. This includes credit risk for recourse associated with loans sold under the Fannie Mae Delegated Underwriting and Servicing program and credit losses inherent in unfunded lending-related commitments, such as letters of credit and unfunded loan commitments, and certain financial guarantees.

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

	Three months ended September 30,				Nine months ended September 30,
Dollars in millions	2025		2024		2025		2024
Balance at beginning of period	$	297	$	286	$	290	$	296
Provision (credit) for losses on lending-related commitments	(5)		(6)		2		(16)
Balance at end of period	$	292	$	280	$	292	$	280