KEY 10-K & 10-Q changes, risk factors and insider trading

◦Capital and liquidity requirements imposed by banking regulationsregulators and the credit rating agencies may require banks and BHCs to maintain more and higher quality capital and more and higher quality liquid assets.

◦Our operations and financial performance could be adversely affected by severe weather and natural disastersdisasters, exacerbatedboth bydirectly climateand change.as a result of impacts on our customers.

◦KeyDiffering isviews subject toon corporate responsibility and sustainability efforts risks that could adversely affect our reputation and our business and results of operations.

A relatively small portion of our commercial real estate loans are construction loans.loans, with most of these loans utilized to support the construction of affordable housing under the Low-Income Housing Tax Credit (LIHTC) program. Loans made under the LIHTC program typically carry less risk due to the aligned interest of Tax Credit Investors and committed permanent loans at construction origination, which mitigates interest rate risk. New construction and value-add or rehabilitation construction projects may not be fully leased at loan origination. These properties typically require additional leasing through the life of the loan to provide adequate cash flow to support debt service payments. If property market fundamentals deteriorate sharply, performance under existing leases could deteriorate and the execution of new leases could slow, compromising the borrower’s ability to cover debt service payments.

During periods of economicmacroeconomic or financial market stress, the volatility and disruption that the capital and credit markets experience may reach, and have in the past reached, extreme levels. Market disruption may severely stress or even lead to the failure of financial institutions, which can cause further credit market constriction and further liquidation of assets, driving asset prices down eventheir more.prices. Asset price deterioration has a negative effect on the valuation of collateral and certain assets represented on our balance sheet and reduces our ability to sell assets at prices we deem acceptable.

TheAlthough the most recent U.S. economic recession in the U.S., resulting from the impact of the COVID-19 pandemic,pandemic did not have significant lasting impact on collateral value.value, However,the therenature of that recession was atypical. Most economic recessions are stillassociated riskswith tofinancial economicmarket stabilitydownturns thatand could reverse recent stable trends inlower asset prices.

ThesePresent risks to stable asset prices include, but are not limited to:

•Labor-supply constraints, including as a result of potentialfurther changes to U.S. immigration policies and laws,laws and immigration enforcement, leading to slowing job growth and rising wages along with inflation (wage-price spiral); and

While we have minimal direct foreign company exposure in our loan portfolios, there are correlated and contingent risks posed by geopolitical destabilization within our loan portfolio. For example, conflicts across the world, including the Russia-Ukraine war and the Israel-Hamas war, and recent military action in Venezuela, have proven to or may have a material impact on certain domestic commodity prices, impacting our borrowers' input costs and disrupting supply chains both domestically and abroad. These factors increase potential defaults in our loan portfolio and could ultimately increase loan losses.

A worsening of economic and financial market conditions or downside shocks could result in adverse effects on Key and others in the financial services industry. RecentBanking conditions may deteriorate during periods of persistent or large and persistentsudden interest rate increases and/or a slowing economy could present a challenge for the industry, including Key, andeconomy, negatively affectaffecting business and financial performance.

In particular, we face the following risks, and other unforeseeable risks, in connection with a downturn in the economicmacroeconomic and financial market environment or inother the face ofsuch downside shocks or a recession,shocks, whether in the United States or internationally:

•A decrease in consumer and business confidence levels generally, decreasing credit usage and investment or increasing delinquencies and defaults and committed line draws;

•A decrease in the value of collateral securing loans to our borrowers or a decrease in the quality of our loan portfolio, increasing loan charge-offs and reducing Key’sour net income;

•AAn decreaseimpairment in our ability to liquidate financial positions at acceptable market prices;

In addition, volatility and uncertainty related to inflation and the effects of inflation, which has, in recent years, led to increased costs for businesses and consumersconsumers, and could cause the Federal Reserve to reinitiate a series of interest rate increases, which may amplify or contribute to some of the risks of our business by adversely affecting the creditworthiness of our borrowers, increasing our costs, or resulting in lower values for our investment securities and other fixed-rate assets. To the extent that the Federal Reserve’s policies around managing inflation fail to mitigate the volatility and uncertainty related to inflation and the effects of inflation, or to the extent conditions otherwise worsen or are exacerbated by policies enacted by the U.S. government, including the imposition of tariffs or other tradecommercial policies, we could experience adverse effects on our business, financial condition, and results of operations.

Our earnings depend heavily upon our net interest income. Net interest income is the difference between interest income earned on interest-earning assets such as loans and securities and interest expense paid on interest-bearing liabilities such as deposits and borrowed funds. Hence, interest rate risk is inherent to our banking business and takes four primary forms: repricing risk, yield curve risk, basis risk, and option risk. Repricing risk occurs when assets and liabilities respond to interest rate changes at different paces and to a different degree. Yield curve risk arises when short- and long-term interest rates change to a different extent. We incur basis risk to the extent that the relationship between different interest rate indices changes over time. Option risk is present in assets, liabilities or other financial instruments that allow a partycounterparty to change the timing of interest or principal payments.

Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions, the competitive environment within our markets, consumer preferences for specific loan and deposit products and their payment behavior, and policies of various governmental and regulatory agencies, in particular, the Federal Reserve. Our ability to anticipate changes in these factors or to hedge the related on-and off-balance sheet exposures, and the cost of any such hedging activity, can significantly influence the success of our asset-and-liability management activities and our net interest income and net interest margin. Changes in monetary policy, including changes in interest rate controls being applied by the Federal Reserve, could influence the amount and timing of interest we receive on loans and securities, the amount and timing of interest we pay on deposits and borrowings, our ability to originate loans and obtain deposits, and the fair value of our financial assets and liabilities. When the Federal Reserve raises or reduces interest rates, the behavior of national money market rate indices, the correlation of consumer deposit rates to financial market interest rates, and the settingevolution of benchmark rates may not follow historical relationships, which could influence net interest income and net interest margin through basis and other risks. In addition, our ability to change deposit rates in response to changes in interest rates and other market and related factors is limited by client relationshiprelationships and competitive considerations.

Moreover, if the interest we pay on deposits and other borrowings increases at a faster rate than the interest we receive on loans and other investments, net interest income, and therefore our earnings, would be adversely affected.decline. Conversely, earnings could also be adversely affected if the interest we receive on loans and other investments falls more quickly than the interest we pay on deposits and other borrowings. These scenarios illustrate repricing risk.

We have concentrations of loans and other business activities in geographic regions where our bank branches are located — Washington; Oregon/Alaska; Rocky Mountains; Indiana/Northwest Ohio/Michigan; Central/Southwest Ohio; East Ohio/Western Pennsylvania; Atlantic; Western New York; Eastern New York; and New England — and additional exposure to geographic regions outside of our branch footprint. Economic growth in the various regions where we operate has been uneven, and the health of the overall U.S. economy may differ from the economy of any particular geographic region. Adverse conditions in a geographic region such as inflation, unemployment, recession, natural disasters, political instability, impact of public health crises, or other factors beyond our control could impact the ability of borrowers in these regions to repay their loans, decrease the value of collateral securing loans made in these regions, or affect the ability of our customers in these regions to continue conducting business with us.

Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions. We have exposure to many different industries and counterparties in the financial services industries, and we routinely execute transactions with such counterparties, including brokers and dealers, banks, mortgage originators, hedge funds, insurance companies, and other institutional clients. Financial services institutions are interrelated as a result of trading, clearing, counterparty, or other relationships. As a result, defaults by, or even rumors or questions about, one or more financial services institutions, or the financial services industry generally, have led to, and may further lead to, market-wide liquidity problems and could lead to losses or defaults by us or other financial institutions. DisruptionBanking is a confidence sensitive business, so disruption within the financial markets, including negative newsnews, rumors, or misinformation regarding the banking industry or perceived risks of a bank’s safety and soundness, can adversely impact the market price and volatility of our common stockstock, cause deposit runoff or depositprompt runoff.the loss of important customers or counterparties. Online and mobile banking have made it easier for customers to withdraw their deposits. Higher than customary withdrawals can raise funding cost, which may reduce Key’s net interest margin and net interest income. In addition, many of our transactions with other financial institutions expose us to credit risk in the event of default of a counterparty or client. Our credit risk may be affected when the collateral held by us cannot be realized or is liquidated at prices not sufficient to recover the full amount of our loan or derivatives exposure. There can be no assurance that any such losses would not adversely and materially affect our results of operations.

Liquidity risk refersis the danger that a bank may not be able to ourmeet abilitynear-term tocash funddemands, such as funding liability maturities and deposit withdrawals, meetmeeting contractual obligations, or fundfunding asset growth and new business initiatives at a reasonable cost, in a timely manner and without adverse consequences. Our banking business is subject to four primary liquidity risks: contingency risk, mismatch risk, funding risk, and refinancing risk. Contingency risk arises from unexpected funding or liquidity needs occurring during challengingadverse systemic or idiosyncratic economic or financial market conditions. Mismatch risk may occur when illiquid assets are funded with less stable funding sources. Funding risk arises if funding sources become too concentrated.concentrated, raising the risk of higher borrowing costs. Refinancing risk arises when a concentrated liability maturity profile creates near-term funding stress. Despite actions that we take to manage these risks, unanticipated changes in assets, liabilities, and off-balance sheet commitments under various economic conditions (including a reduced level of wholesale funding sourcescapacity), or a substantial, unexpected, or prolonged change in the level or cost of liquidity could have a material adverse effect on us. If the cost effectiveness or the availability of supply in these credit markets is reduced for a prolonged period of time, our funding needs may require us to access funding and manage liquidity by other means. These alternatives may include generating client deposits, securitizing or selling loans, extending the maturity of wholesale borrowings, borrowing under certain secured borrowing arrangements, using relationships developed with a variety of fixed income investors to access new funds or renegotiate the terms of outstanding debt, and further managingreducing loan growth and investment opportunities. These alternative means of funding may result in anwould increase in theour overall cost of funds and they may not be available under stressed conditions, which wouldmay cause us to liquidate a portion of our liquid asset portfolio to meet any funding needs.

Capital and liquidity requirements imposed by banking regulationsregulators and the credit rating agencies may require banks and BHCs to maintain more and higher quality capital and more and higher quality liquid assets.

In addition, regulatory liquidity standards require us to hold high-quality liquid assets, which has caused us to change, and may in the future cause us to change, our mix of investments,investments in favor of lower-yielding securities, and may impact future business relationships with certain customers.customers, both of which may reduce our profitability. Additionally, support of liquidity standards may be satisfied through the use of long-term wholesale borrowings, which tend to have a higher cost than that of traditional core deposits.

Further, the Federal Reserve has detailed the processes that BHCs should maintain to ensure they hold adequate capital under severely adverse conditions and have ready access to funding before engaging in any capital activities. The severity and other features of these processes, which take the form of stress tests and other measures, may evolve from year to year and are used by the Federal Reserve to, among other things, evaluate our management of capital and the adequacy of our regulatory capital and to determine the stress capital buffer that we must maintain above our minimum regulatory capital requirements. DespiteNotwithstanding recent announcementsactions by the Federal Reserve declaring intent to increase transparency into capital stress tests and models, the results of these processes are difficult to predict due to, among other things, the Federal Reserve’s use of proprietary stress models that differ from our internal models. Consequently, the Federal Reserve may impose capital requirements in excess of our expectations which could require us, as applicable, to revise our stress-testing or capital management approaches, resubmit our capital plan or postpone, cancel, or alter our planned capital actions. The results may also lead to limits on Key’s ability to make capital distributions, including paying out dividends or buying back shares.

The federal government’s actions can impact financial markets. For example, beginning in 2024 and during 20242025, the Federal Reserve, after an extended period of raising its monetary policy rate, began lowering interest rates in an effort to preventsupport what it viewed as a recession.weakening labor market. These types of actions can impact financial markets and our business and cause increased financial market and interest rate volatility.

Bank failures, such as those that occurred in 2023, have led the U.S. Treasury Secretary, the FDIC, and the Federal Reserve to invoke the systemic risk exception to the least-cost resolution requirement under the FDIA to guarantee uninsured deposits of the failed banks. The systemic bank exception can only be invoked for financial market risks that pose a threat to financial stability. The FDIC may impose a special assessment on IDIs to recover the loss to the failed bank resulting from the use of the systemic risk exception to protect the uninsured depositors. The potential impact of aA special assessment to Key could increase our noninterest expense for that quarter, as was the case during the firstfourth quarter of 2023 and secondfirst quartersquarter of 2024.

The Federal Home Loan Bank (FHLB) system continues to be a source of secured funding. Changes in FHLB lending policypolicies or the haircuts they apply to our pledged collateral could adversely affect our liquidity and profitability.

We are a legal entity separate and distinct from our subsidiaries. With the exception of cash that we may raise from debt and equity issuances, we receive substantially all of our funding from dividends by our subsidiaries. Dividends by our subsidiaries are the principal source of funds for the dividends we pay on our common and preferred stock and interest and principal payments on ourKeyCorp debt.debt and capital securities. Federal banking law and regulations limit the amount of dividends that KeyBank (KeyCorp’s largest subsidiary) can pay. For further information on the regulatory restrictions on the payment of dividends by KeyBank, see “Supervision and Regulation” in Item 1 of this report.

The rating agencies regularly evaluate the securities issued by KeyCorp and KeyBank. The ratings of our long-term debt and other securities are based on a number of factors, including our financial strength, ability to generate earnings, and other factors. Some of these factors are not entirely within our control, such as conditions affecting the financial services industry and the economy and changes in rating methodologies. Changes in any of these factors could impair our ability to maintain our current credit ratings. We may be unable to maintain our current ratings and our ratings may be downgraded again in the future. The impact of downgradesDowngrades to KeyCorp's or KeyBank's credit ratings could adversely affectimpair our access to liquidity and could significantly increase our cost of funds, trigger additional collateral or funding requirements, and decrease the number of investors and counterparties willing to lend to us, reducing our ability to generate income. If KeyCorp’s or KeyBank's credit ratings fell below investment grade, it could also create obligations or liabilities under the terms of existing arrangements that could increase our costs and reduce our profitability.

In the event of a failure, interruption, or breach of our information systems, or that of a third party that provides services to us or our customers, we may be unable to avoid impact to our customers. For example, we may experience operational disruptions or interruptions as a result of a cyber incident, including disruption caused by protective containment measures taken by us, such as taking certain first- or third-party systems off-line for a prolonged period. Such a failure, interruption, or breach could result in legal liability, remediation costs, regulatory action, or reputational harm. U.S. financial service institutions and companies have reported breaches in the security of their websites or other systems and several financial institutions, including Key, have had third parties on which they rely experience such breaches. In addition, several financial institutions, including Key, have experienced significant distributed denial-of-service attacks, some of which involved sophisticated and targeted attacks intended to disrupt, disable, or degrade services, or sabotage systems or data. Other attacks have attempted to obtain unauthorized access to confidential, proprietary, or personal information or intellectual property, to extort money through the use of “ransomware” or other extortion tactics, or to alter or destroy data or systems, often through various attack vectors and methods, including the introduction of computer viruses or malicious or destructive code (commonly referred to as “malware”), phishing, cyberattacks, account takeovers, credential stuffing, and other means. To the extent that we use third parties to provide services to our clients, we cannot control all of the risks at these third parties or third parties’ downstream service providers. Hardware, software, or applications developed by Key or received from third parties may contain exploitable vulnerabilities, bugs, or defects in design, maintenance or manufacture or other issues that could unpredictablylead to compromise of information and cybersecurity. We depend on third party service providers and their downstream service providers to implement adequate controls and safeguards to protect against and report cyber incidents. While we have a third party risk management program, because we do not control our third party service providers or their downstream service providers and our ability to monitor their cybersecurity is limited, we cannot ensure the cybersecurity measures they take will be sufficient to protect any information we share with them or prevent any disruption arising from a technology failure, cyberattack or other information or security breach. If such parties fail to deter, detect, or report cyber incidents in a timely manner, we may suffer from financial and other harm, including to our information, operations, performance, employees, and reputation. In addition, should an adverse event affecting another company’s systems occur, we may not have indemnification or other protection from the other company sufficient to fully compensate us or otherwise protect us or our clients from the consequences. To date, our losses and costs related to these breaches have not been material, but other similar events in the future could have a material impact on our business strategy, results of operations, or financial condition.

We also face risks related to the increasing interdependence and interconnectivity of financial entities and technology systems. A technology failure, cyberattack or other security breach that significantly compromises the systems of one or more financial parties or service providers in the financial system could have a material impact on counterparties or market participants, including us. Such incidents could also lead to widespread technology outages, interruptions or other failures of operational, communication, or other systems globally and across companies and industries. Any third-party technology failure, cyberattack, or security breach could adversely affect our ability to effect transactions, service clients, or otherwise operate our business and could result in legal liability, remediation costs, regulatory action, or reputational harm. Additionally, the increasing use of third-party financial data aggregators and emerging technologies, including the use of automation, artificial intelligence and robotics,AI, introduces new information security risks and exposure for us and for our third party service providers, and, additionally, such technologies may be used to identify vulnerabilities; such technologies have resulted in a substantial increase in the volume and sophistication of cyberattacks against financial and other institutions, including the use of generative artificial intelligenceAI to conduct more sophisticated social engineering attacks. Such security attacks can originate from a wide variety of sources/malicious actors, including, but not limited to, persons who constitute an insider threat, who are involved with organized crime, or who may be linked to terrorist organizations or hostile foreign governments. Those same parties may also attempt to fraudulently induce employees, customers, or other users of our systems to disclose sensitive information in order to gain access to our data or that of our customers or clients through social engineering, phishing, mobile phone malware and SIM card swapping, and other methods. Our security systems, and those of the third-party service providers on which we rely, may not be able to protect our information systems or data from similar attacks due to the rapid evolution and creation of sophisticated cyberattacks. We are also subject to the risk that a malicious actor or our employees may intercept and/or transmit or otherwise misuse unauthorized personal, confidential, or proprietary information or intellectual property. An interception, misuse, or mishandling of personal, confidential, or proprietary information or intellectual property being sent to or received from a customer or third party could result in legal liability, remediation costs, regulatory action, and reputational harm.

Our risk management framework seeks to maintain safety and soundness and maximize profitability. We have established policies, processes, and procedures intended to identify, measure, monitor, report, and analyze the types of risk to which we are subject, including compliance, operational, technology, liquidity, market, credit, model, reputational, and strategic risk, among others. We cannot provide assurance that our risk management framework will effectively mitigate risk and limit losses in our business and operations. For example, our risk management framework and measures that we take to mitigate risk may not be fully effective in identifying and mitigating our risk exposure in all market environments or against all types of risks, including risks that are unidentified or unanticipated, even if the frameworks for assessing risk are properly designed and implemented. In addition, some of our methods of managing risk are based upon our use of observed historical market behavior and management’s judgment. These methods may not accurately predict future exposures, which could be significantly greater than historical measures indicate. If our risk management framework proves ineffective, we could suffer unexpected losses and our business, results of operations, and financial condition could be adversely affected.

We regularly review and update our internal controls, disclosure controls and procedures, compliance monitoring activities, and corporate governance policies and procedures. We also maintain an ERM program designed to identify, measure, monitor, report, and analyze our risks. Additionally, our internal audit function provides an independent assessment and testing of Key’s internal controls, policies, and procedures. Any system of controls and any system to reduce risk exposure, however well designed, operated, and tested, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met. The systems may not work as intended or be circumvented by employees, third parties, or others outside of Key. Additionally, instruments, systems, and strategies used to hedgemitigate or otherwise manage exposure to various types of market compliance, credit, liquidity, operational, and business risks and enterprise-wide risk could be less effective than anticipated. As a result, we may not be able to effectively or fully mitigate our risk exposures in particular market environments or against particular types of risk.

Our operations and financial performance could be adversely affected by severe weather and natural disastersdisasters, exacerbatedboth bydirectly climateand change.as a result of impacts on our customers.

Natural disasters, including wildfires, tornadoes, severe storms, and hurricanes, have seemingly become more frequent and severe due to climate change.severe. The timing and effects of these climate-related physical risks are difficult to accurately predict, and the potential impact of such risks on our operations, employees, communities, and customers could have a material adverse effect on our business, financial position, and results of operations. Given our broad regional focus, we are exposed to a wide range of climate-related physical risks across different geographical areas. Severe weather events can directly affect our operations by interrupting systems, damaging facilities, disrupting our supply chain, and hindering our ability to conduct business as usual. Additionally, these events can indirectly impact us by damaging or destroying customer businesses, impairing their ability to repay loans, or causing damage to properties pledged as collateral for loans made by Key. Although preventative measures may help to mitigate damage, such measures could be costly, and any disaster could adversely affect our ability to conduct our business as usual. Furthermore, the insurance we maintain may not be adequate to cover our losses resulting from any business interruption resulting from a natural disaster or other severe weather events. Recurring extreme weather events could also reduce or eliminate the availability or increase the cost of insurance.insurance to Key and our customers. Our failure to comply with evolving regulatory requirements related to natural disaster risk management may also result in legal and financial consequences.

•We ended the year with $61.4$70.0 billion in assets under management and administration,management, a record high, reflecting the continued strong sales production in our mass affluent segment.

The following chart provides a reconciliation of net income (loss) from continuing operations attributable to Key common shareholders for the year ended December 31, 2023,2024, to the year ended December 31, 20242025 (dollars in millions):

To make it easier to compare both the results amongacross 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.

Average loans totaled $107.7$105.7 billion for 2024,2025, compared to $118.0$107.7 billion in 2023.2024. The $10.3$2.1 billion decrease reflectedwas continueddriven tepidby clientthe loanintentional demand.run-off Commercialof low-yielding consumer loans, which decreased $2.4 billion. Average commercial loans decreasedincreased $7.6$380 billion,million, dueprimarily driven by a mix shift to lower commercial and industrial loans and commercial mortgage real estate loans. Additionally, average consumer loans declined by $2.6 billion, reflective of broad-based declines across all consumer loan categories.

Average deposits totaled $146.2$149.3 billion for 2024,2025, an increase of $2.1$3.1 billion compared to 2023,2024, reflecting growth in both consumer and commercial deposits, partially offset by a decline in brokered CDs.deposits.

Figure 1. Consolidated Average Balance Sheets, Net Interest Income, and Yields/Rates and Components of Net Interest Income Changes from Continuing Operations(g)

(a)Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (gf) below, calculated using a matched funds transfer pricing methodology.

(b)Interest income on tax-exempt securities and loans has been adjusted to a taxabale-equivalenttaxable-equivalent basis using the statutory federal income tax rate of 21% in effect that calendar year.

Our provision for credit losses was a net charge of $471 million for 2025, compared to $335 million for 2024, compared to $489 million for 2023.2024. The decreaseincrease in our provision for credit losses was driven by reserve releases,increases, partly offset by higherlower net charge-offs. The netreserve build in 2025 was largely driven by elevated economic uncertainty and loan growth, both primarily impacting the commercial loan portfolio. This is in contrast to the reserve release in 2024 waslargely drivendue by changes in the economic outlook and plannedto balance sheet optimization efforts, which offset reserve increases attributable to asset quality migration. The higher net charge-offs were largely driven by the commercial and industrial portfolio.optimization.

Noninterest income for 20242025 was $2.8 billion compared to $809 million,million inclusive of the $1.8 billion loss from the investment portfolio repositioning, compared to $2.5 billionrepositioning during 2023.2024. Noninterest income represented 38% of total revenue for 2025 and 18% of total revenue for 2024 and 39% of total revenue for 2023.2024.

Trust and investment services income consists of brokerage commissions, trust and asset management fees, and insurance income. The assets under management or administration that primarily generate these revenues are shown in Figure 4. For 2024,2025, trust and investment services income increased $41$34 million, or 7.9%.6.1%. This was primarily due to an increase in investment management income and other fees stemmingassociated fromwith increasedhigher assets under management.

A significant portion of our trust and investment services income depends on the value and mix of assets under management. At December 31, 2024,2025, our bank, trust, and registered investment advisory subsidiaries had assets under management or administration of $61.4$70.0 billion, compared to $54.9$61.4 billion at December 31, 2023.2024. The increase from 20232024 to 20242025 was attributable to movementsmarket in the marketactivity and net new business.

Investment banking and debt placement fees consist of syndication fees, debt and equity securities underwriting fees, merger and acquisition and debt placement advisor fees, gains on sales of commercial mortgages, and agency origination fees. For 2024,2025, investment banking and debt placement fees increased $146$92 million, or 26.9%,13.5%, from the prior year reflective of growth acrossin allsyndication products excludingand commercial mortgage activity offset slightly by decreased merger and acquisitions fee activity.

Service charges on deposit accounts decreasedincreased $9$34 million, or 3.3%,13.0%, in 20242025 compared to the prior year. This decreaseincrease was driven by lower overdraft, maintenance, and service fees, offset slightly by higher account analysis fees and lower fee waivers, offset slightly by a decrease in deposit maintenance fees.

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, net securities gains (losses), and other income. Other noninterest income decreasedincreased $1.8$1.9 billion in 20242025 compared to 2023,2024, primarily attributable to approximately $1.8 billion in losses on the sales of securities available for sale as part of portfolio repositioning activity during the third and fourth quarters of 2024. Excluding the impact of the repositioning activity, other noninterest income wasincreased relatively flat, increasing $3$34 million, reflecting an increaseincreases in commercial mortgage servicing fees and corporate services income, offset by decreasesdeclines in operating lease income and corporateother servicesleasing income.gains.

As shown in Figure 6, personnel expense, the largest category of our noninterest expense, increased by $54$203 million, or 2.0%,7.5%, in 20242025 compared to 2023.2024. Overall activity for the year was driven by higher incentive compensation fromassociated strongwith capitalnoninterest marketsincome activitygrowth duringand thecontinued year, partially offset by a decreaseinvestments in severance expense. Salaries and contract labor were down reflecting a decrease in FTE’s, offset slightly by increased contract labor costs.people.

N/M - Not meaningful (a)Excludes directors’ stock-based compensation of $5 million in 2025 and $4 million in 2024 and $3 million in 2023,2024, reported as “other noninterest expense” in Figure 5.

In total, other non-personnel expense decreased $243$45 million, or 11.7%,2.5%, in 20242025 compared to 20232024 primarily due to itemsa impacting$26 non-personnelmillion expensedecrease in 2023, including a $190 millionthe FDIC specialSpecial assessmentAssessment charge, as well as corporate real estate related rationalization costs recordedaccrual within other expense and continued decreases in operating lease expense, slightly offset by increases in computer processing and business services and professional fees expense.

We recorded a tax benefitexpense from continuing operations of $143$476 million for 2024,2025, compared to tax expensebenefit of $196$143 million for 2023.2024. The effective tax rate, which is the provision for income taxes as a percentage of income from continuing operations before income taxes, was 20.7% for 2025 and 46.6% for 2024 and 16.9% for 2023.2024. The tax benefit recorded and increased effective tax rate for the 2024 year resulted primarily from the $1.8 billion loss on the sales of securities incurred as part of a strategic repositioning of our securities portfolio.

Figure 7. Consumer Bank Summary of operationsOperations

•Net income attributable to Key of $283$527 million in 2025, compared to $251 million in 2024, compared to $202 million in 2023, an increase of 40.1%,110.0%, largely driven by favorable rates on deposits and lower FDIC special assessment charges

•Average deposits increased in 20242025 by $3.1$2.1 billion, or 3.7%,2.4%, from the prior year, driven by growth in retail deposits, particularly in money market deposit accounts and certificates of depositdeposits

•Provision for credit losses increased $15$43 million in 20242025 compared to the prior year, driven by higherincreased neteconomic charge-offs,uncertainty partlyslightly offset by aloan reservebalance release due to changes in the portfolio and economic conditionsrun-off.

•Noninterest income decreasedincreased in 20242025 by $12$33 million, or 1.3%,3.6%, driven by decreasesincreases in cardstrust and paymentsinvestment services income and service charges on deposit accounts

•Noninterest expense decreasedincreased in 20242025 by $67$88 million, or 2.4%,3.2%, primarily reflective of increased personnel expenses, slightly offset by lower FDIC special assessment charges

•Utilize industry expertise and broad capabilities to build relationships with narrowly targeted client sets Market and business overview Building relationships and delivering complex solutions for middle market and larger clients requires a distinctive operating model that understands their business and can provide a broad set of product capabilities. As competition for these clients intensifies, we have positioned the business to maintain and grow our competitive advantage by building targeted scale in businesses and client segments. Strong market share in businesses such as real estate loan servicing and equipment finance highlights our ability to successfully meet customer needs through targeted scale in distinct product capabilities. Clients expect us to understand every aspect of their business. Our sevendeep market expertise in multiple industry verticals areand alignedrelationship-led approach allow us to driverecognize targetedopportunities scaleand indeliver segmentsstrategic wherefinancial wesolutions havethat aalign breadthwith ofour industryclients’ expertise.goals. Our business model is positioned to meet our client needs because our focus is not on being a universal bank, but rather being the right bank for our clients.

Figure 8. Commercial Bank Summary of operationsOperations

•Net income attributable to Key of $1.4 billion in 2025, compared to $1.1 billion in 2024, compared to $885 million in 2023, an increase of 23.3%,32.6%, largely driven by an increase in investment banking and debt placement fees and commercial mortgage servicing income, along with lower FDIC assessment charges

•Taxable equivalent net interest income decreasedincreased in 20242025 by $61$489 million, or 3.3%,27.1%, from the prior year, primarilydue drivento byfavorable adeposit reduction in loan balancescosts

This section reviews the financial condition and results of operations of KeyCorp and its subsidiaries for the quarterly periods ended MarchJune 31,30, 2026, and MarchJune 31,30, 2025. 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.

•For regulatory purposes, capital is divided into twoCommon classes. Federal regulations currently prescribe that at least one-half of a bank or BHC’s total risk-based capital must qualify asEquity Tier 1 capital.capital, BothTier total1 capital, and Tier 12 capital. These components of regulatory 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.

Key reported $486$472 million in net income from continuing operations attributable to Key common shareholders, or diluted earnings per share of $0.44, in the firstsecond quarter of 2026.

Our actions and results during the firstsecond quarter of 2026 support our corporate strategy described in the “Introduction” section under the “Corporate strategy” heading on page 51 of our 2025 Form 10-K.

•Commercial client growth and net new relationshipRelationship households increased approximately 3% year-over-year and 2%,commercial respectively,clients increased approximately 2% year-over-year, reflecting strongcontinued client growthacquisition and relationship depth.deepening.

•Our noninterest income strength continues to be driven by differentiated fee businesses strategically focused on targeted scale. Our priority fee-based businesses — investment banking, commercial payments, and wealth management – continued to contribute to revenue diversification, collectively grewgrowing 12%8% year-over-year.in the first half of 2026 compared with the prior-year period.

•Our Assets Under Management were $69.8$74.2 billion for the firstsecond quarter of 2026, up 14.3%15.5% year-over-year, drivenreflecting by net positive cash inflows andfavorable market impacts onas portfolios.well as continued momentum in our wealth management business.

•Our continuous focus on maintaining our risk discipline has and should continue to position us to perform well through all business cycles. While nonperforming assets increased from idiosyncratic exposures, the broader portfolio performance remained within management’s expectations. Net charge-offs arewere tracking42 basis points in linethe withsecond ourquarter currentand outlookyear-to-date forcharge-offs remained at the year.low end of the full-year outlook.

(a) MarchJune 31,30, 2026 capital ratios are estimates

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 1 below. At MarchJune 31,30, 2026, KeyCorp’s ratios under the fully phased-in Regulatory Capital Rules were as set forth in Figure 1.

(a)As a standardizedCategory approachIV banking organization, KeyCorp is not subject to the 3% supplementary leverage ratio requirement.

(b)Stress capital buffer must consist of Common Equity Tier 1 capital. As a standardizedCategory approachIV banking organization, KeyCorp is not subject to the countercyclical capital buffer of up to 2.5% imposed upon an advanced approaches banking organization or a Category III banking organization under the Regulatory Capital Rules. KeyCorp’s stress capital buffer is 3.20% as of October 1, 2025.

(c)MarchJune 31,30, 2026 capital ratios are estimates.

(b)As a “standardizedCategory approach”IV bankingnational organization,bank, KeyBank is not subject to the 3% supplementary leverage ratio requirement, which became effective January 1, 2018.requirement.

As of MarchJune 31,30, 2026, KeyBank (consolidated) satisfied the risk-based and leverage capital requirements necessary to be considered “well capitalized” for purposes of the revised 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.

The following chart provides a reconciliation of net income (loss) from continuing operations attributable to Key common shareholders for the three months ended MarchJune 31,30, 2025, to the three months ended MarchJune 31,30, 2026 (dollars in millions):

Net interest income (TE) was $1.23$1.26 billion for the firstsecond quarter of 2026 and the net interest margin was 2.87%.2.89%. Compared to the firstsecond quarter of 2025, net interest income (TE) increased $125$108 million and net interest margin increased by 2923 basis points. These increases were driven by a reduction in deposit costs as a result of declining interest rates and proactive deposit beta management, the reinvestment of proceeds from maturing low-yielding investment securities and fixed-rate swaps into higher-yieldinghigher yielding investments, and a shift in the balance sheet composition to a more favorable mix of higher-yielding commercial and industrial loans. These benefits were partially offset by the impact of lower interest rates on variable-raterepricing earning assets.

Average loans were $107.7$110.1 billion for the firstsecond quarter of 2026, an increase of $3.4$4.4 billion compared to the firstsecond quarter of 2025. Average commercial loans increased by $5.7$6.7 billion, primarily due to an increase in commercial and industrial loans. Average consumer loans declined by $2.3 billion, reflective of broad-basedthe declinesintentional acrossrun-off allof consumerlow-yielding loan categories.loans.

Average deposits totaled $147.3$147.6 billion for the firstsecond quarter of 2026, aan decreaseincrease of $1.2$131 billionmillion compared to the year-ago quarter, drivenreflecting growth in demand deposits, partially offset by thea intentionaldecline runoffin oftime brokered CDs.deposits.

(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 MarchJune 31,30, 2026, and MarchJune 31,30, 2025.

(d)Commercial and industrial average balances include $205$209 million and $213$218 million of assets from commercial credit cards for the three months ended MarchJune 31,30, 2026, and MarchJune 31,30, 2025, respectively.

(e)Yield presented is calculated on the basis of amortized cost excluding fair value hedge basis adjustments. The average amortized cost for securities available for sale was $41.5$41.0 billion and $42.7$43.8 billion for the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively. Yield based on the fair value of securities available for sale was 3.75%3.81% and 3.99%4.03% for the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively.

As shown in Figure 4, noninterest income was $723$706 million for the firstsecond quarter of 2026, compared to $668$690 million for the year-ago quarter. Noninterest income was $1.4 billion for the six months ended June 30, 2026, compared to $1.4 billion for the six months ended June 30, 2025.

Trust and investment services income consists of brokerage commissions, trust and asset management fees, and insurance income. The assets under management or administration that primarily generate certain trust and asset management fees are shown in Figure 5. For the three months ended MarchJune 31,30, 2026, trust and investment services income was up $18$13 million, or 12.9%,8.9%, compared to the same period one year ago. ThisFor the six months ended June 30, 2026, trust and investment services income was primarilyup due$31 million, or 10.9%, compared to anthe increasesame inperiod one year ago. These increases were primarily attributable to higher investment management and trust income and otherbrokerage feesincome, associated withreflecting higher assets under management.management and favorable market performance.

A significant portion of our trust and investment services income depends on the value and mix of assets under management. As shown in Figure 5, at MarchJune 31,30, 2026, our bank, trust, and registered investment advisory subsidiaries had assets under management of $69.8$74.2 billion, up 14.3%15.5% compared to MarchJune 31,30, 2025. The increase was driven by continued net positive cash in-flows andconstructive market impacts on portfolios.performance.

Investment banking and debt placement fees consist of syndication fees, debt and equity securities underwriting fees, merger and acquisition and financial advisory fees, gains on sales of commercial mortgages, and agency origination fees. For the three months ended MarchJune 31,30, 2026, investment banking and debt placement fees were updown $22$9 million, or 12.6%,5.1%, compared to the same period a year ago.ago due to lower merger and acquisition advisory fees, commercial mortgage gains on sale, and loan syndication fees, partially offset by higher debt and equity origination activity. The increasedecline reflectsalso higherreflected uneven middle-market transaction activity and delays in M&A closings. For the six months ended June 30, 2026, investment banking and debt placement fees increased $13 million, or 3.8%, driven by stronger first-quarter activity and relatedyear-to-date activitygrowth in ourinvestment mergersbanking andpipelines, acquisitionsdespite andsofter equitysecond-quarter newM&A issue underwriting businesses.activity.