Keycorp /New/ 8-K, filed Jul 20, 2021

Keycorp /New/ (KEY)

8-K 2021-07-20 For: 2021-07-20

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Added on April 10, 2026

About this 8-K

Keycorp /New/ filed this 8-K on July 20, 2021.

Items reported

Item 2.02: Financial results
Item 9.01: Financial statements and exhibits

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, $1 par value	KEY	New York Stock Exchange
Depositary Shares (each representing a 1/40th interest in a share of Fixed-to-Floating Rate Perpetual Non-Cumulative Preferred Stock, Series E)	KEY PrI	New York Stock Exchange
Depositary Shares (each representing a 1/40th interest in a share of Fixed Rate Perpetual Non-Cumulative Preferred Stock, Series F)	KEY PrJ	New York Stock Exchange
Depositary Shares (each representing a 1/40th interest in a share of Fixed Rate Perpetual Non-Cumulative Preferred Stock, Series G)	KEY PrK	New York Stock Exchange


SIGNATURE



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



						KEYCORP
						(Registrant)


Date: July 20, 2021						/s/ Douglas M. Schosser
						By: Douglas M. Schosser
						Chief Accounting Officer


Selected Financial Highlights

dollars in millions, except per share data										Change 2Q21 vs.
	2Q21			1Q21			2Q20			1Q21		2Q20
Income (loss) from continuing operations attributable to Key common shareholders	$	698		$	591		$	159		18.1	%	339.0	%
Income (loss) from continuing operations attributable to Key common shareholders per common share — assuming dilution	.72			.61			.16			18.0		350.0
Return on average tangible common equity from continuing operations (a)	22.34		%	18.25		%	4.96		%	N/A		N/A
Return on average total assets from continuing operations	1.63			1.44			.45			N/A		N/A
Common Equity Tier 1 ratio (b)	9.9			9.9			9.1			N/A		N/A
Book value at period end	$	16.75		$	16.22		$	16.07		3.3	%	4.2	%
Net interest margin (TE) from continuing operations	2.52		%	2.61		%	2.76		%	N/A		N/A


INCOME STATEMENT HIGHLIGHTS

Revenue

dollars in millions							Change 2Q21 vs.
	2Q21		1Q21		2Q20		1Q21		2Q20
Net interest income (TE)	$	1,023	$	1,012	$	1,025	1.1	%	(.2)	%
Noninterest income	750		738		692		1.6		8.4
Total revenue	$	1,773	$	1,750	$	1,717	1.3	%	3.3	%


Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Noninterest Expense

dollars in millions							Change 2Q21 vs.
	2Q21		1Q21		2Q20		1Q21		2Q20
Personnel expense	$	623	$	624	$	572	(.2)	%	8.9	%
Nonpersonnel expense	453		447		441		1.3		2.7
Total noninterest expense	$	1,076	$	1,071	$	1,013	.5	%	6.2	%


BALANCE SHEET HIGHLIGHTS

Average Loans

dollars in millions							Change 2Q21 vs.
	2Q21		1Q21		2Q20		1Q21		2Q20
Commercial and industrial (a)	$	51,808	$	52,581	$	60,480	(1.5)	%	(14.3)	%
Other commercial loans	19,034		18,848		19,850		1.0		(4.1)
Total consumer loans	29,972		29,299		27,611		2.3		8.6
Total loans	$	100,814	$	100,728	$	107,941	.1	%	(6.6)	%


Average Deposits

dollars in millions										Change 2Q21 vs.
	2Q21			1Q21			2Q20			1Q21		2Q20
Non-time deposits	$	139,480		$	132,267		$	118,694		5.5	%	17.5	%
Certificates of deposit ($100,000 or more)	2,212			2,571			4,950			(14.0)		(55.3)
Other time deposits	2,630			2,902			4,333			(9.4)		(39.3)
Total deposits	$	144,322		$	137,740		$	127,977		4.8	%	12.8	%

Cost of total deposits	.05		%	.06		%	.30		%	N/A		N/A


ASSET QUALITY

dollars in millions										Change 2Q21 vs.
	2Q21			1Q21			2Q20			1Q21		2Q20
Net loan charge-offs	$	22		$	114		$	96		(80.7)	%	(77.1)	%
Net loan charge-offs to average total loans	.09		%	.46		%	.36		%	N/A		N/A
Nonperforming loans at period end	$	694		$	728		$	760		(4.7)		(8.7)
Nonperforming assets at period end	738			790			951			(6.6)		(22.4)
Allowance for loan and lease losses	1,220			1,438			1,708			(15.2)		(28.6)
Allowance for credit losses	1,372			1,616			1,906			(15.1)		(28.0)
Allowance for loan and lease losses to nonperforming loans	175.8		%	197.5		%	224.7		%	N/A		N/A
Allowance for credit losses to nonperforming loans	197.7			222.0			250.8			N/A		N/A
Provision for credit losses	$	(222)		$	(93)		$	482		138.7	%	(146.1)	%


Capital Ratios

	6/30/2021		3/31/2021		6/30/2020
Common Equity Tier 1 (a)	9.9	%	9.9	%	9.1	%

Tier 1 risk-based capital (a)	11.3		11.3		10.5
Total risk based capital (a)	13.2		13.4		12.8
Tangible common equity to tangible assets (b)	7.4		7.5		7.6
Leverage (a)	8.7		8.9		8.8


Summary of Changes in Common Shares Outstanding

in thousands					Change 2Q21 vs.
		2Q21	1Q21	2Q20	1Q21		2Q20
Shares outstanding at beginning of period		972,587	975,773	975,319	(.3)	%	(.3)	%
Open market repurchases and return of shares under employee compensation plans		(13,304)	(9,277)	(19)	43.4		N/M
Shares issued under employee compensation plans (net of cancellations)		993	6,091	647	(83.7)		53.5
	Shares outstanding at end of period	960,276	972,587	975,947	(1.3)	%	(1.6)	%


Major Business Segments

dollars in millions								Change 2Q21 vs.
		2Q21		1Q21		2Q20		1Q21		2Q20
Revenue from continuing operations (TE)
Consumer Bank		$	854	$	867	$	835	(1.5)	%	2.3	%
Commercial Bank		874		859		879		1.7		(.6)
Other (a)		45		24		3		87.5		1,400.0


	Total	$	1,773	$	1,750	$	1,717	1.3	%	3.3	%

Income (loss) from continuing operations attributable to Key
Consumer Bank		$	259	$	220	$	98	17.7	%	164.3	%
Commercial Bank		434		384		106		13.0		309.4
Other (a)		31		14		(19)		121.4		N/M


	Total	$	724	$	618	$	185	17.2	%	291.4	%


Additional Consumer Bank Data

dollars in millions										Change 2Q21 vs.
	2Q21			1Q21			2Q20			1Q21		2Q20
Noninterest income
Trust and investment services income	$	104		$	101		$	87		3.0	%	19.5	%
Service charges on deposit accounts	47			38			36			23.7		30.6
Cards and payments income	62			54			47			14.8		31.9
Consumer mortgage income	26			47			61			(44.7)		(57.4)
Other noninterest income	15			17			15			(11.8)		.0
Total noninterest income	$	254		$	257		$	246		(1.2)	%	3.3	%

Average deposit balances
NOW and money market deposit accounts	$	56,038		$	54,685		$	49,143		2.5	%	14.0	%
Savings deposits	6,523			5,878			4,816			11.0		35.4
Certificates of deposit ($100,000 or more)	2,083			2,424			4,520			(14.1)		(53.9)
Other time deposits	2,615			2,888			4,296			(9.5)		(39.1)
Noninterest-bearing deposits	21,153			19,159			16,460			10.4		28.5
Total deposits	$	88,412		$	85,033		$	79,235		4.0		11.6	%

Home equity loans
Average balance	$	9,081		$	9,234		$	9,893
Combined weighted-average loan-to-value ratio (at date of origination)	68		%	69		%	70		%
Percent first lien positions	70			68			63

Other data
Branches	1,014			1,068			1,077
Automated teller machines	1,329			1,368			1,394


Additional Commercial Bank Data

dollars in millions							Change 2Q21 vs.
	2Q21		1Q21		2Q20		1Q21		2Q20
Noninterest income
Trust and investment services income	$	27	$	32	$	37	(15.6)	%	(27.0)
Investment banking and debt placement fees	215		162		156		32.7		37.8	%
Operating lease income and other leasing gains	35		38		59		(7.9)		(40.7)

Corporate services income	47		56		45		(16.1)		4.4
Service charges on deposit accounts	34		33		30		3.0		13.3
Cards and payments income	49		52		45		(5.8)		8.9
Payments and services income	130		141		120		(7.8)		8.3

Commercial mortgage servicing fees	44		34		12		29.4		266.7
Other noninterest income	4		39		37		(89.7)		(89.2)
Total noninterest income	$	455	$	446	$	421	2.0	%	8.1	%


CONTACTS:

ANALYSTS			MEDIA
Vernon L. Patterson			Susan Donlan
216.689.0520			216.471.3133
Vernon_Patterson@KeyBank.com			Susan_E_Donlan@KeyBank.com

Melanie S. Kaiser			Tracy Pesho
216.689.4545			216.471.2825
Melanie_S_Kaiser@KeyBank.com			Tracy_Pesho@KeyBank.com

Halle A. Nichols			Twitter: @keybank
216.471.2184
Halle_A_Nichols@KeyBank.com

INVESTOR RELATIONS:			KEY MEDIA NEWSROOM:
www.key.com/ir			www.key.com/newsroom


This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements do not relate strictly to historical or current facts. Forward-looking statements usually can be identified by the use of words such as “goal,” “objective,” “plan,” “expect,” “assume,” “anticipate,” “intend,” “project,” “believe,” “estimate,” or other words of similar meaning. Forward-looking statements provide our current expectations or forecasts of future events, circumstances, results, or aspirations. Forward-looking statements, by their nature, are subject to assumptions, risks and uncertainties, many of which are outside of our control. Our actual results may differ materially from those set forth in our forward-looking statements. There is no assurance that any list of risks and uncertainties or risk factors is complete. Factors that could cause Key’s actual results to differ from those described in the forward-looking statements can be found in KeyCorp’s Form 10-K for the year ended December 31, 2020, as well as in KeyCorp’s subsequent SEC filings, all of which have been or will be filed with the Securities and Exchange Commission (the “SEC”) and are or will be available on Key’s website (www.key.com/ir) and on the SEC’s website (www.sec.gov). These factors may include, among others, deterioration of commercial real estate market fundamentals, adverse changes in credit quality trends, declining asset prices, a worsening of the U.S. economy due to financial, political, or other shocks, the extensive regulation of the U.S. financial services industry, and the impact of the COVID-19 global pandemic on us, our clients, our third-party service providers, and the markets. Any forward-looking statements made by us or on our behalf speak only as of the date they are made and we do not undertake any obligation to update any forward-looking statement to reflect the impact of subsequent events or circumstances.


Page
12			Financial Highlights
14			GAAP to Non-GAAP Reconciliation
16			Consolidated Balance Sheets
17			Consolidated Statements of Income
18			Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations
20			Noninterest Expense
20			Personnel Expense
21			Loan Composition
21			Loans Held for Sale Composition
21			Summary of Changes in Loans Held for Sale
22			Summary of Loan and Lease Loss Experience From Continuing Operations
23			Asset Quality Statistics From Continuing Operations
23			Summary of Nonperforming Assets and Past Due Loans From Continuing Operations
23			Summary of Changes in Nonperforming Loans From Continuing Operations
24			Line of Business Results


	Three months ended									Six months ended
	6/30/2021			3/31/2021			6/30/2020			6/30/2021			6/30/2020
Tangible common equity to tangible assets at period-end
Key shareholders’ equity (GAAP)	$	17,941		$	17,634		$	17,542
Less: Intangible assets (a)	2,828			2,842			2,877
Preferred Stock (b)	1,856			1,856			1,856
Tangible common equity (non-GAAP)	$	13,257		$	12,936		$	12,809
Total assets (GAAP)	$	181,115		$	176,203		$	171,192
Less: Intangible assets (a)	2,828			2,842			2,877
Tangible assets (non-GAAP)	$	178,287		$	173,361		$	168,315
Tangible common equity to tangible assets ratio (non-GAAP)	7.44		%	7.46		%	7.61		%




Pre-provision net revenue
Net interest income (GAAP)	$	1,017		$	1,005		$	1,018		$	2,022		$	1,999
Plus: Taxable-equivalent adjustment	6			7			7			13			15
Noninterest income	750			738			692			1,488			1,169
Less: Noninterest expense	1,076			1,071			1,013			2,147			1,944
Pre-provision net revenue from continuing operations (non-GAAP)	$	697		$	679		$	704		$	1,376		$	1,239
Average tangible common equity
Average Key shareholders' equity (GAAP)	$	17,271		$	17,769		$	17,688		$	17,519		$	17,452
Less: Intangible assets (average) (c)	2,840			2,844			2,886			2,840			2,894
Preferred stock (average)	1,900			1,900			1,900			1,900			1,900
Average tangible common equity (non-GAAP)	$	12,531		$	13,025		$	12,902		$	12,779		$	12,658
Return on average tangible common equity from continuing operations
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP)	$	698		$	591		$	159		$	1,289		$	277


Average tangible common equity (non-GAAP)	12,531			13,025			12,902			12,779			12,658

Return on average tangible common equity from continuing operations (non-GAAP)	22.34		%	18.25		%	4.96		%	20.34		%	4.40		%

Return on average tangible common equity consolidated
Net income (loss) attributable to Key common shareholders (GAAP)	$	703		$	595		$	161		$	1,298		$	280
Average tangible common equity (non-GAAP)	12,531			13,025			12,902			12,779			12,658

Return on average tangible common equity consolidated (non-GAAP)	22.50		%	18.37		%	5.02		%	20.48		%	4.45		%


Financial Highlights
(dollars in millions, except per share amounts)
			Three months ended
			6/30/2021			3/31/2021			6/30/2020
Summary of operations
	Net interest income (TE)		$	1,023		$	1,012		$	1,025
	Noninterest income		750			738			692
		Total revenue (TE)	1,773			1,750			1,717
	Provision for credit losses		(222)			(93)			482
	Noninterest expense		1,076			1,071			1,013
	Income (loss) from continuing operations attributable to Key		724			618			185
	Income (loss) from discontinued operations, net of taxes		5			4			2
	Net income (loss) attributable to Key		729			622			187

	Income (loss) from continuing operations attributable to Key common shareholders		698			591			159
	Income (loss) from discontinued operations, net of taxes		5			4			2
	Net income (loss) attributable to Key common shareholders		703			595			161

Per common share
	Income (loss) from continuing operations attributable to Key common shareholders		$	.73		$	.61		$	.16
	Income (loss) from discontinued operations, net of taxes		—			—			—
	Net income (loss) attributable to Key common shareholders (a)		.73			.62			.17

	Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution		.72			.61			.16
	Income (loss) from discontinued operations, net of taxes — assuming dilution		—			—			—
	Net income (loss) attributable to Key common shareholders — assuming dilution (a)		.73			.61			.17

	Cash dividends declared		.185			.185			.185
	Book value at period end		16.75			16.22			16.07
	Tangible book value at period end		13.81			13.30			13.12
	Market price at period end		20.65			19.98			12.18

Performance ratios
	From continuing operations:
	Return on average total assets		1.63		%	1.44		%	.45		%
	Return on average common equity		18.21			14.98			4.05
	Return on average tangible common equity (b)		22.34			18.25			4.96
	Net interest margin (TE)		2.52			2.61			2.76
	Cash efficiency ratio (b)		59.9			60.3			57.9

	From consolidated operations:
	Return on average total assets		1.64		%	1.45		%	.46		%
	Return on average common equity		18.34			15.08			4.10
	Return on average tangible common equity (b)		22.50			18.37			5.02
	Net interest margin (TE)		2.55			2.60			2.76
	Loan to deposit (c)		70.4			73.1			80.4

Capital ratios at period end
	Key shareholders’ equity to assets		9.9		%	10.0		%	10.2		%
	Key common shareholders’ equity to assets		8.9			9.0			9.2
	Tangible common equity to tangible assets (b)		7.4			7.5			7.6
	Common Equity Tier 1 (d)		9.9			9.9			9.1
	Tier 1 risk-based capital (d)		11.3			11.3			10.5
	Total risk-based capital (d)		13.2			13.4			12.8
	Leverage (d)		8.7			8.9			8.8

Asset quality — from continuing operations
	Net loan charge-offs		$	22		$	114		$	96
	Net loan charge-offs to average loans		.09		%	.46		%	.36		%
	Allowance for loan and lease losses		$	1,220		$	1,438		$	1,708
	Allowance for credit losses		1,372			1,616			1,906
	Allowance for loan and lease losses to period-end loans		1.21		%	1.42		%	1.61		%
	Allowance for credit losses to period-end loans		1.36			1.60			1.80
	Allowance for loan and lease losses to nonperforming loans		175.8			197.5			224.7
	Allowance for credit losses to nonperforming loans		197.7			222.0			250.8
	Nonperforming loans at period-end		$	694		$	728		$	760
	Nonperforming assets at period-end		738			790			951
	Nonperforming loans to period-end portfolio loans		.69		%	.72		%	.72		%
	Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		.73			.78			.89

Trust assets
	Assets under management		$	47,737		$	45,218		$	39,722

Other data
	Average full-time equivalent employees		17,157			17,086			16,646
	Branches		1,014			1,068			1,077
	Taxable-equivalent adjustment		$	6		$	7		$	7



Financial Highlights (continued)
(dollars in millions, except per share amounts)
		Six months ended
		6/30/2021			6/30/2020
Summary of operations
	Net interest income (TE)	$	2,035		$	2,014
	Noninterest income	1,488			1,169
	Total revenue (TE)	3,523			3,183
	Provision for credit losses	(315)			841
	Noninterest expense	2,147			1,944
	Income (loss) from continuing operations attributable to Key	1,342			330
	Income (loss) from discontinued operations, net of taxes	9			3
	Net income (loss) attributable to Key	1,351			333

	Income (loss) from continuing operations attributable to Key common shareholders	1,289			277
	Income (loss) from discontinued operations, net of taxes	9			3
	Net income (loss) attributable to Key common shareholders	1,298			280

Per common share
	Income (loss) from continuing operations attributable to Key common shareholders	$	1.34		$	.29
	Income (loss) from discontinued operations, net of taxes	.01			—
	Net income (loss) attributable to Key common shareholders (a)	1.35			.29

	Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution	1.33			.28
	Income (loss) from discontinued operations, net of taxes — assuming dilution	.01			—
	Net income (loss) attributable to Key common shareholders — assuming dilution (a)	1.34			.29

	Cash dividends paid	.37			.37

Performance ratios
	From continuing operations:
	Return on average total assets	1.55		%	.43		%
	Return on average common equity	16.64			3.58
	Return on average tangible common equity (b)	20.34			4.40
	Net interest margin (TE)	2.56			2.88
	Cash efficiency ratio (b)	60.1			60.0

	From consolidated operations:
	Return on average total assets	1.55		%	.43		%
	Return on average common equity	16.76			3.62
	Return on average tangible common equity (b)	20.48			4.45
	Net interest margin (TE)	2.57			2.87

Asset quality — from continuing operations
	Net loan charge-offs	$	136		$	180
	Net loan charge-offs to average total loans	.27		%	.35		%

Other data
	Average full-time equivalent employees	17,122			16,587

Taxable-equivalent adjustment		13			15


GAAP to Non-GAAP Reconciliations (continued)
(dollars in millions)
	Three months ended									Six months ended
	6/30/2021			3/31/2021			6/30/2020			6/30/2021			6/30/2020





































Cash efficiency ratio
Noninterest expense (GAAP)	$	1,076		$	1,071		$	1,013		$	2,147		$	1,944
Less: Intangible asset amortization	14			15			18			29			35
Adjusted noninterest expense (non-GAAP)	$	1,062		$	1,056		$	995		$	2,118		$	1,909



Net interest income (GAAP)	$	1,017		$	1,005		$	1,018		$	2,022		$	1,999
Plus: Taxable-equivalent adjustment	6			7			7			13			15
Noninterest income	750			738			692			1,488			1,169
Total taxable-equivalent revenue (non-GAAP)	$	1,773		$	1,750		$	1,717		$	3,523		$	3,183



Cash efficiency ratio (non-GAAP)	59.9		%	60.3		%	57.9		%	60.1		%	60.0		%


Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations
(dollars in millions)
		Second Quarter 2021						First Quarter 2021						Second Quarter 2020
		Average				Yield/		Average				Yield/		Average				Yield/
		Balance		Interest (a)		Rate (a)		Balance		Interest (a)		Rate (a)		Balance		Interest (a)		Rate (a)
Assets
	Loans: (b), (c)
	Commercial and industrial (d)	$	51,808	$	450	3.52		$	52,581	$	453	3.48		$	60,480	$	518	3.44
	Real estate — commercial mortgage	12,825		117		3.67		12,658		114		3.67		13,510		128		3.80
	Real estate — construction	$	2,149	$	20	3.68		$	2,048	$	19	3.75		$	1,756	$	17	3.97
	Commercial lease financing	4,060		30		2.98		4,142		31		2.99		4,584		33		2.96
	Total commercial loans	$	70,842	$	617	3.53		$	71,429	$	617	3.50		$	80,330	$	696	3.49
	Real estate — residential mortgage	11,055		81		2.92		9,699		76		3.12		7,783		69		3.57
	Home equity loans	$	9,089	$	85	3.76		$	9,282	$	85	3.73		$	9,949	$	97	3.89
	Consumer direct loans	4,910		57		4.69		4,817		56		4.72		4,152		55		5.24
	Credit cards	$	908	$	22	9.79		$	933	$	24	10.45		$	983	$	25	10.22
	Consumer indirect loans	4,010		32		3.23		4,568		37		3.30		4,744		45		3.82
	Total consumer loans	$	29,972	$	277	3.74		$	29,299	$	278	3.84		$	27,611	$	291	4.22
	Total loans	100,814		894		3.59		100,728		895		3.60		107,941		987		3.67
	Loans held for sale	$	1,616	$	11	2.60		$	1,531	$	11	2.89		$	2,463	$	21	3.50
	Securities available for sale (b), (e)	33,623		133		3.13		30,039		130		1.76		20,749		121		2.43
	Held-to-maturity securities (b)	$	6,452	$	45	2.75		$	7,188	$	46	2.53		$	9,331	$	56	2.43
	Trading account assets	837		5		2.56		848		5		2.15		760		5		2.43
	Short-term investments	$	18,817	$	6	0.13		$	16,510	$	5	0.13		$	7,892	$	7	0.31
	Other investments (e)	622		2		1.02		614		2		1.40		672		—		0.29
	Total earning assets	$	162,781	$	1,096	2.72		$	157,458	$	1,094	2.81		$	149,808	$	1,197	3.22
	Allowance for loan and lease losses	(1,442)						(1,623)						(1,413)
	Accrued income and other assets	$	16,531					$	16,398					$	15,704
	Discontinued assets	650						686						793
	Total assets	$	178,520					$	172,919					$	164,892
Liabilities
	NOW and money market deposit accounts	$	83,981	$	9	.05		$	81,439	$	10	.05		$	75,297	$	56	.30
	Savings deposits	6,859		1		.03		6,203		1		.03		5,130		—		.04
	Certificates of deposit ($100,000 or more)	$	2,212	$	4	.72		$	2,571	$	6	.96		$	4,950	$	24	1.93
	Other time deposits	2,630		2		.38		2,902		4		.57		4,333		16		1.52
	Total interest-bearing deposits	$	95,682	$	16	.07		$	93,115	$	21	.09		$	89,710	$	96	.43
	Federal funds purchased and securities sold under repurchase agreements	251		—		.02		243		—		.04		242		—		.03
	Bank notes and other short-term borrowings	$	744	$	3	1.19		$	878	$	1	.64		$	2,869	$	5	.57
	Long-term debt (f), (g)	11,978		54		1.83		12,831		60		1.93		12,954		71		2.30
	Total interest-bearing liabilities	$	108,655	$	73	.27		$	107,067	$	82	.31		$	105,775	$	172	.66
	Noninterest-bearing deposits	48,640						44,625						38,267
	Accrued expense and other liabilities	$	3,304					$	2,772					$	2,369
	Discontinued liabilities (g)	650						686						793
	Total liabilities	$	161,249					$	155,150					$	147,204
Equity
	Key shareholders’ equity	$	17,271					$	17,769					$	17,688
	Noncontrolling interests	—						—						—
	Total equity	$	17,271					$	17,769					$	17,688
	Total liabilities and equity	$	178,520					$	172,919					$	164,892
Interest rate spread (TE)						2.45	%					2.50	%					2.56	%
Net interest income (TE) and net interest margin (TE)				1,023		2.52	%			1,012		2.61	%			1,025		2.76	%
TE adjustment (b)				6						7						7
	Net interest income, GAAP basis			$	1,017					$	1,005					$	1,018



Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations
(dollars in millions)
		Six months ended June 30, 2021						Six months ended June 30, 2020
		Average				Yield/		Average				Yield/
		Balance		Interest (a)		Rate (a)		Balance		Interest (a)		Rate (a)
Assets
	Loans: (b), (c)
	Commercial and industrial (d)	$	52,194	$	902	3.48	%	$	54,973	$	1,026	3.75	%
	Real estate — commercial mortgage	12,742		232		3.67		13,529		283		4.20
	Real estate — construction	2,099		39		3.71		1,711		37		4.35
	Commercial lease financing	4,101		61		2.99		4,575		72		3.17
	Total commercial loans	71,136		1,234		3.49		74,788		1,418		3.81
	Real estate — residential mortgage	10,380		154		2.97		7,500		137		3.66
	Home equity loans	9,189		173		3.79		10,052		210		4.19
	Consumer direct loans	4,864		113		4.70		3,930		109		5.56
	Credit cards	920		46		10.12		1,032		56		10.89
	Consumer indirect loans	4,288		69		3.25		4,756		91		3.84
	Total consumer loans	29,641		555		3.77		27,270		603		4.44
	Total loans	100,777		1,789		3.58		102,058		2,021		3.98
	Loans held for sale	1,574		22		2.74		2,174		40		3.71
	Securities available for sale (b), (e)	31,841		263		1.66		20,960		250		2.46
	Held-to-maturity securities (b)	6,818		90		2.63		9,575		118		2.47
	Trading account assets	842		10		2.35		913		13		2.73
	Short-term investments	17,670		11		0.13		4,828		13		0.52
	Other investments (e)	618		4		1.21		643		1		0.34
	Total earning assets	160,140		2,189		2.75		141,151		2,456		3.51
	Allowance for loan and lease losses	(1532)						(1255)
	Accrued income and other assets	16,463						15,268
	Discontinued assets	668						815
	Total assets	$	175,739					$	155,979
Liabilities
	NOW and money market deposit accounts	$	82,717	20		.05		$	71,009	168		.47
	Savings deposits	6,533		1		.03		4,893		1		.04
	Certificates of deposit ($100,000 or more)	2,390		10		.85		5,630		58		2.08
	Other time deposits	2,766		6		.48		4,617		38		1.67
	Total interest-bearing deposits	94,406		37		.08		86,149		265		.62
	Federal funds purchased and securities sold under repurchase agreements	247		—		.03		1,122		6		1.05
	Bank notes and other short-term borrowings	811		4		.89		2,135		10		.90
	Long-term debt (f), (g)	12,402		114		1.87		12,698		161		2.62
	Total interest-bearing liabilities	107,866		155		.29		102,104		442		.87
	Noninterest-bearing deposits	46,638						33,004
	Accrued expense and other liabilities	3,048						2,604
	Discontinued liabilities (g)	668						815
	Total liabilities	158,220						138,527
Equity
	Key shareholders’ equity	17,519						17,452
	Noncontrolling interests	—						—
	Total equity	17,519						17,452
	Total liabilities and equity	$	175,739					$	155,979
Interest rate spread (TE)						2.46	%					2.64	%
Net interest income (TE) and net interest margin (TE)				2,035		2.56	%			2,014		2.88	%
TE adjustment (b)				13						15
	Net interest income, GAAP basis			$	2,022					$	1,999


Personnel Expense
(in millions)

	Three months ended						Six months ended
	6/30/2021		3/31/2021		6/30/2020		6/30/2021		6/30/2020
Salaries and contract labor	$	321	$	320	$	332	$	641	$	648
Incentive and stock-based compensation	210		196		162		406		264
Employee benefits	92		107		76		199		168
Severance	—		1		2		1		7
Total personnel expense	$	623	$	624	$	572	$	1,247	$	1,087


Loan Composition
(dollars in millions)

							Percent change 6/30/2021 vs
	6/30/2021		3/31/2021		6/30/2020		3/31/2021		6/30/2020
Commercial and industrial (a)	$	50,672	$	52,486	$	58,297	(3.5)	%	(13.1)	%
Commercial real estate:
Commercial mortgage	12,965		12,702		13,465		2.1		(3.7)
Construction	2,132		2,122		1,919		.5		11.1
Total commercial real estate loans	15,097		14,824		15,384		1.8		(1.9)
Commercial lease financing (b)	4,061		4,104		4,524		(1.0)		(10.2)
Total commercial loans	69,830		71,414		78,205		(2.2)		(10.7)
Residential — prime loans:
Real estate — residential mortgage	12,131		10,300		8,149		17.8		48.9
Home equity loans	9,047		9,158		9,782		(1.2)		(7.5)
Total residential — prime loans	21,178		19,458		17,931		8.8		18.1
Consumer direct loans	5,049		4,862		4,327		3.8		16.7
Credit cards	923		909		974		1.5		(5.2)
Consumer indirect loans	3,750		4,283		4,722		(12.4)		(20.6)
Total consumer loans	30,900		29,512		27,954		4.7		10.5
Total loans (c), (d)	$	100,730	$	100,926	$	106,159	(.2)	%	(5.1)	%


Line of Business Results
(dollars in millions)

																Percentage change 2Q21 vs.
	2Q21			1Q21			4Q20			3Q20			2Q20			1Q21		2Q20
Consumer Bank
Summary of operations
Total revenue (TE)	$	854		$	867		$	899		$	866		$	835		(1.5)	%	2.3	%
Provision for credit losses	(70)			(23)			(5)			(3)			155			(204.3)		145.2
Noninterest expense	584			601			606			567			552			(2.8)		5.8
Net income (loss) attributable to Key	259			220			228			231			98			17.7		164.3
Average loans and leases	40,598			39,249			39,455			38,476			37,300			3.4		8.8
Average deposits	88,412			85,033			82,854			82,836			79,235			4.0		11.6
Net loan charge-offs	34			36			28			23			40			(5.6)		(15.0)
Net loan charge-offs to average total loans	.34		%	.37		%	.28		%	.24		%	.43		%	(8.1)		(20.9)
Nonperforming assets at period end	$	274		$	345		$	374		$	353		$	332		(20.6)		(17.5)
Return on average allocated equity	28.74		%	26.10		%	25.95		%	26.44		%	11.50		%	10.1		149.9


Commercial Bank
Summary of operations
Total revenue (TE)	$	874		$	859		$	923		$	813		$	879		1.7	%	(.6)	%
Provision for credit losses	(131)			(67)			44			150			326			95.5		(120.6)
Noninterest expense	451			443			498			447			441			1.8		2.3
Net income (loss) attributable to Key	434			384			311			174			106			13.0		309.4
Average loans and leases	59,953			61,221			62,016			66,264			70,336			(2.1)		(14.8)
Average loans held for sale	1,341			1,237			1,285			1,383			2,012			8.4		(33.3)
Average deposits	54,814			51,894			52,489			51,585			47,954			5.6		14.3
Net loan charge-offs	9			78			108			103			57			(88.5)		(84.2)
Net loan charge-offs to average total loans	.06		%	.52		%	.69		%	.62		%	.33		%	N/A		N/A
Nonperforming assets at period end	$	464		$	441		$	558		$	645		$	616		5.2		(24.7)
Return on average allocated equity	20.79		%	17.45		%	23.87		%	13.43		%	8.66		%	N/A		N/A