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Derivatives and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of 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, 2025, and December 31, 2024. 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 Consolidated Balance Sheets, as follows:


	September 30, 2025						December 31, 2024
			Fair Value(a)						Fair Value(a)
Dollars in millions	Notional Amount		Derivative Assets		Derivative Liabilities		Notional Amount		Derivative Assets		Derivative Liabilities
Derivatives designated as hedging instruments:
Interest rate	$	63,050	$	17	$	—	$	64,701	$	(4)	$	3


Derivatives not designated as hedging instruments:
Interest rate	74,725		147		574		72,215		114		962
Foreign exchange	5,809		102		96		6,516		124		117
Commodity	6,083		276		263		8,778		363		343
Credit	78		—		8		60		—		—
Other (b)	6,123		17		30		3,145		15		14
Total derivatives not designated as hedging instruments:	92,818		542		971		90,714		616		1,436
Total derivatives	155,868		559		971		155,415		612		1,439
Netting adjustments (c)	—		(329)		(334)		—		(363)		(411)
Net derivatives in the balance sheet	155,868		230		637		155,415		249		1,028
Other collateral (d)	—		(3)		(1)		—		—		(1)
Net derivative amounts	$	155,868	$	227	$	636	$	155,415	$	249	$	1,027

(a)We take into account bilateral collateral and master netting agreements that allow us to settle all derivative contracts held with a single counterparty on a net basis, and to offset the net derivative position with the related cash collateral when recognizing derivative assets and liabilities. As a result, we could have derivative contracts with negative fair values included in derivative assets and contracts with positive fair values included in derivative liabilities.

(b)Other derivatives include interest rate lock commitments related to our residential and commercial banking activities, 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.

(c)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. As of September 30, 2025, excess collateral that has not been offset against net derivative instrument positions totaled $175 million of cash collateral and $207 million of securities collateral posted as well as $8 million of cash collateral and $114 million of securities collateral held. As of December 31, 2024, excess collateral that has not been offset against net derivative instrument positions totaled $168 million of cash collateral and $215 million of securities collateral posted as well as $13 million of cash collateral and $32 million of securities collateral held.

(d)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.

Schedule of 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, 2025, and December 31, 2024, related to cumulative basis adjustments for fair value hedges.


	September 30, 2025
Dollars in millions	Balance sheet line item in which the hedge item is included	Carrying amount of hedged item (a)		Hedge accounting basis adjustment - active hedges		Hedge accounting basis adjustment - discontinued hedges
Interest rate contracts	Long-term debt	$	9,436	$	(200)	$	(4)
Interest rate contracts	Securities Available for Sale(b)	12,407		(113)		15



	December 31, 2024
	Balance sheet line item in which the hedge item is included	Carrying amount of hedged item (a)		Hedge accounting basis adjustment - active hedges		Hedge accounting basis adjustment - discontinued hedges
Interest rate contracts	Long-term debt	$	10,249	$	(490)	$	(4)
Interest rate contracts	Securities Available for Sale(b)	12,097		5		17

(a)The carrying amount represents the portion of the asset or liability designated as the hedged item.

(b)Certain amounts are designed as fair value hedges under the portfolio layer method. The carrying amount represents the amortized costs basis of the prepayable financial assets used to designate hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the relationship. At September 30, 2025, and December 31, 2024, the amortized costs of the closed portfolios in these hedging relationships was $6.1 billion and $5 billion, respectively, of which $4.5 billion and 4 billion were designated in a portfolio layer hedging relationship. At September 30, 2025, and December 31, 2024, the cumulative basis adjustments associated with these amounts totaled $44 million and $41 million, respectively, which is comprised of $59 million and $24 million in active hedging relationships and $15 million and $17 million for discontinued hedging relationships.

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, 2025, and September 30, 2024.


	Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships
Dollars in millions	Interest expense – long-term debt		Interest income – loans		Interest Income - securities		Investment banking and debt placement fees
Three months ended September 30, 2025
Total amounts presented in the consolidated statement of income	$	(181)	$	1,466	$	408	$	184

Net gains (losses) on fair value hedging relationships
Interest rate contracts
Recognized on hedged items	$	(42)	$	—	$	3	$	—
Recognized on derivatives designated as hedging instruments	(2)		—		4		—
Net income (expense) recognized on fair value hedges	$	(44)	$	—	$	7	$	—
Net gain (loss) on cash flow hedging relationships
Interest rate contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	—	$	(98)	$	—	$	—
Net income (expense) recognized on cash flow hedges	$	—	$	(98)	$	—	$	—

Three months ended September 30, 2024
Total amounts presented in the consolidated statement of income	$	(292)	$	1,516	$	298	$	171

Net gains (losses) on fair value hedging relationships
Interest rate contracts
Recognized on hedged items	$	(333)	$	—	$	329	$	—
Recognized on derivatives designated as hedging instruments	258		—		(285)		—
Net income (expense) recognized on fair value hedges	$	(75)	$	—	$	44	$	—
Net gain (loss) on cash flow hedging relationships
Interest rate contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	—	$	(184)	$	—	$	(3)

Net income (expense) recognized on cash flow hedges	$	—	$	(184)	$	—	$	(3)


	Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships
Dollars in millions	Interest expense – long-term debt		Interest income – loans		Interest Income - Securities		Investment banking and debt placement fees
Nine months ended September 30, 2025
Total amounts presented in the consolidated statement of income	$	(572)	$	4,310	$	1,211	$	537

Net gains (losses) on fair value hedging relationships
Interest rate contracts
Recognized on hedged items	$	(294)	$	—	$	118	$	—
Recognized on derivatives designated as hedging instruments	157		—		(98)		—
Net income (expense) recognized on fair value hedges	$	(137)	$	—	$	20	$	—
Net gain (loss) on cash flow hedging relationships
Interest rate contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	(2)	$	(281)	$	—	$	—
Net income (expense) recognized on cash flow hedges	$	(2)	$	(281)	$	—	$	—

Nine months ended September 30, 2024
Total amounts presented in the consolidated statement of income	$	(952)	$	4,578	$	789	$	467

Net gains (losses) on fair value hedging relationships
Interest rate contracts
Recognized on hedged items	$	(198)	$	—	$	156	$	—
Recognized on derivatives designated as hedging instruments	(22)		—		(47)		—
Net income (expense) recognized on fair value hedges	$	(220)	$	—	$	109	$	—
Net gain (loss) on cash flow hedging relationships
Interest rate contracts
Realized gains (losses) (pre-tax) reclassified from AOCI into net income	$	(1)	$	(599)	$	—	$	(2)

Net income (expense) recognized on cash flow hedges	$	(1)	$	(599)	$	—	$	(2)

Schedule of Derivative Instrument Cash Flow Hedge Earning Recognized by Income Statement Location

The following table summarizes the pre-tax net gains (losses) on our cash flow hedges for the three- and nine-month periods ended September 30, 2025, and September 30, 2024, and where they are recorded on the income statement. The table includes net gains (losses) recognized in AOCI during the period and net gains (losses) reclassified from AOCI into income during the current period.


Dollars 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, 2025
Cash Flow Hedges
Interest rate	$	(30)	Interest income — Loans	$	(98)
Interest rate	—		Interest expense — Long-term debt	—
Interest rate	—		Investment banking and debt placement fees	—


Total	$	(30)		$	(98)
Three months ended September 30, 2024
Cash Flow Hedges
Interest rate	$	410	Interest income — Loans	$	(184)
Interest rate	—		Interest expense — Long-term debt	—
Interest rate	(5)		Investment banking and debt placement fees	(3)


Total	$	405		$	(187)


Dollars 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, 2025
Cash Flow Hedges
Interest rate	$	333	Interest income — Loans	$	(281)
Interest rate	(1)		Interest expense — Long-term debt	(2)
Interest rate	—		Investment banking and debt placement fees	—


Total	$	332		$	(283)
Nine months ended September 30, 2024
Cash Flow Hedges
Interest rate	$	49	Interest income — Loans	$	(599)
Interest rate	1		Interest expense — Long-term debt	(1)
Interest rate	(4)		Investment banking and debt placement fees	(2)


Total	$	46		$	(602)

Schedule of 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, 2025, and September 30, 2024, and where they are recorded on the income statement.


	Three months ended September 30, 2025								Three months ended September 30, 2024
Dollars in millions	Corporate services income		Consumer mortgage income		Other income		Total			Corporate services income		Consumer mortgage income		Other income		Total
NET GAINS (LOSSES)
Interest rate	$	15	$	—	$	—	$	15		$	8	$	—	$	3	$	11
Foreign exchange	8		—		—		8			13		—		—		13
Commodity	1		—		—		1			4		—		—		4
Credit	—		—		(14)		(14)			—		—		(22)		(22)
Other	—		(1)		2		1			—		—		3		3
Total net gains (losses)	$	24	$	(1)	$	(12)	$	11		$	25	$	—	$	(16)	$	9


	Nine months ended September 30, 2025								Nine months ended September 30, 2024
Dollars 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	$	36	$	—	$	6	$	42		$	27	$	—	$	4	$	31
Foreign exchange	35		—		—		35			39		—		—		39
Commodity	5		—		—		5			9		—		—		9
Credit	—		—		(33)		(33)			1		—		(36)		(35)
Other	—		(1)		(7)		(8)			—		1		9		10
Total net gains (losses)	$	76	$	(1)	$	(34)	$	41		$	76	$	1	$	(23)	$	54

Schedule of 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 net exposure to potential loss after taking into account the effects of bilateral collateral and master netting agreements and other means used to mitigate risk.


Dollars in millions	September 30, 2025		December 31, 2024
Interest rate	$	115	$	58
Foreign exchange	68		81
Commodity	107		170
Credit	—		—
Other	17		15
Derivative assets before collateral	307		324
Plus(Less): Related collateral	(77)		(75)
Total derivative assets	$	230	$	249

Schedule of 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, 2025, and December 31, 2024. 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, 2025					December 31, 2024
Dollars in millions	Notional Amount		Average Term (Years)	Payment / Performance Risk		Notional Amount		Average Term (Years)	Payment / Performance Risk

Other	$	10	4.09	1.74	%	$	2	7.64	2.03	%
Total credit derivatives sold	$	10	—	—		$	2	—	—

Schedule of Credit Risk Contingent Feature

Refer to the table below for the aggregate fair value of all derivative contracts with credit risk contingent features held by KeyBank that were in a net liability position.


Dollars in millions	September 30, 2025		December 31, 2024


Net derivative liabilities with credit-risk contingent features	$	(62)	$	(83)
Collateral posted	58		80

- Definition

Tabular disclosure of credit derivatives which includes information by sellers of credit derivatives, about each credit derivative, or each group of similar credit derivatives, including (a) the nature of the credit derivative - its term, how it arose, the events or circumstances that would require the seller to perform under the credit derivative, and the current status of the payment/performance risk of the credit derivative; (b) the maximum potential amount of future payments (undiscounted) the seller could be required to make under the credit derivative; (c) the current fair value of the credit derivative; and (d) the nature of any recourse provisions under the credit derivative, and any assets held either as collateral or by third parties. A credit derivative is a derivative instrument (1) in which one or more of its underlyings are related to the credit risk of a specified entity (or a group of entities) or an index based on the credit risk of a group of entities and (2) that exposes the seller to potential loss from credit-risk-related events specified in the contract. Examples of credit derivatives within the scope of this paragraph include, but are not limited to, credit default swaps, credit spread options, and credit index products; also includes a hybrid instrument that has an embedded credit derivative (for example, but not limited to, a credit-linked note).

+ References + Details