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Ohio
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34-6542451
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State or other jurisdiction of incorporation or organization:
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I.R.S. Employer Identification Number:
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127 Public Square, Cleveland, Ohio
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44114-1306
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Address of principal executive offices:
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Zip Code:
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐ (Do not check if a smaller reporting company)
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Common Shares with a par value of $1 each
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Title of class
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Outstanding at July 31, 2018
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Page Number
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Item 1.
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Item 3.
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Item 4.
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PART II. OTHER INFORMATION
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Item 1.
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Item 1A.
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Item 2.
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Item 6.
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•
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We use the phrase
continuing operations
in this document to mean all of our businesses other than the education lending business and Austin. The education lending business and Austin have been accounted for as
discontinued operations
since 2009.
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•
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Our
exit loan portfolios
are separate from our
discontinued operations
. These portfolios, which are in a run-off mode, stem from product lines we decided to cease because they no longer fit with our corporate strategy. These exit loan portfolios are included in
Other Segments.
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•
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We engage in
capital markets activities
primarily through business conducted by our Key Corporate Bank segment
.
These activities encompass a variety of products and services. Among other things, we trade securities as a dealer, enter into derivative contracts (both to accommodate clients’ financing needs and to mitigate certain risks), and conduct transactions in foreign currencies (both to accommodate clients’ needs and to benefit from fluctuations in exchange rates).
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•
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For regulatory purposes, capital is divided into two classes. Federal regulations currently prescribe that at least one-half of a bank or BHC’s
total risk-based capital
must qualify as
Tier 1 capital
. Both total and Tier 1 capital serve as bases for several measures of capital adequacy, which is an important indicator of financial stability and condition. Banking regulators evaluate a component of Tier 1 capital, known as
Common Equity Tier 1
, under the
Regulatory Capital Rules
. The “Capital” section of this report under the heading “Capital adequacy” provides more information on total capital, Tier 1 capital, and the Regulatory Capital Rules, including Common Equity Tier 1, and describes how these measures are calculated.
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ALCO: Asset/Liability Management Committee.
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KBCM: KeyBanc Capital Markets, Inc.
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ALLL: Allowance for loan and lease losses.
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KCC: Key Capital Corporation.
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A/LM: Asset/liability management.
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KCDC: Key Community Development Corporation.
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AOCI: Accumulated other comprehensive income (loss).
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KEF: Key Equipment Finance.
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APBO: Accumulated postretirement benefit obligation.
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KMS: Key Merchant Services, LLC.
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ASC: Accounting Standards Codification.
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KPP: Key Principal Partners.
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Austin: Austin Capital Management, Ltd.
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KREEC: Key Real Estate Equity Capital, Inc.
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BHCs: Bank holding companies.
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LCR: Liquidity coverage ratio.
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Board: KeyCorp Board of Directors.
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LIBOR: London Interbank Offered Rate.
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Cain Brothers: Cain Brothers & Company, LLC.
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LIHTC: Low-income housing tax credit.
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CCAR: Comprehensive Capital Analysis and Review.
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LTV: Loan-to-value.
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CMBS: Commercial mortgage-backed securities.
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Moody’s: Moody’s Investor Services, Inc.
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CME: Chicago Mercantile Exchange.
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MRM: Market Risk Management group.
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CMO: Collateralized mortgage obligation.
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N/A: Not applicable.
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Common Shares: KeyCorp common shares, $1 par value.
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NASDAQ: The NASDAQ Stock Market LLC.
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DIF: Deposit Insurance Fund of the FDIC.
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NAV: Net asset value.
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Dodd-Frank Act: Dodd-Frank Wall Street Reform and
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N/M: Not meaningful.
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Consumer Protection Act of 2010.
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NOW: Negotiable Order of Withdrawal.
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EBITDA: Earnings before interest, taxes, depreciation, and
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NPR: Notice of proposed rulemaking.
|
amortization.
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NYSE: New York Stock Exchange.
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EPS: Earnings per share.
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OCC: Office of the Comptroller of the Currency.
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ERISA: Employee Retirement Income Security Act of 1974.
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OCI: Other comprehensive income (loss).
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ERM: Enterprise risk management.
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OREO: Other real estate owned.
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EVE: Economic value of equity.
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OTTI: Other-than-temporary impairment.
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FASB: Financial Accounting Standards Board.
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PBO: Projected benefit obligation.
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FDIC: Federal Deposit Insurance Corporation.
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PCI: Purchased credit impaired.
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Federal Reserve: Board of Governors of the Federal
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S&P: Standard and Poor’s Ratings Services,
|
Reserve System.
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a Division of The McGraw-Hill Companies, Inc.
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FHLB: Federal Home Loan Bank of Cincinnati.
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SEC: U.S. Securities and Exchange Commission.
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FHLMC: Federal Home Loan Mortgage Corporation.
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Series A Preferred Stock: KeyCorp’s 7.750%
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FICO: Fair Isaac Corporation.
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Noncumulative Perpetual Convertible Preferred
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First Niagara: First Niagara Financial Group, Inc.
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Stock, Series A.
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FNMA: Federal National Mortgage Association, or Fannie
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TCJ Act: Tax Cuts and Jobs Act.
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Mae.
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TDR: Troubled debt restructuring.
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FSOC: Financial Stability Oversight Council.
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TE: Taxable-equivalent.
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GAAP: U.S. generally accepted accounting principles.
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U.S. Treasury: United States Department of the
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GNMA: Government National Mortgage Association, or
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Treasury.
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Ginnie Mae.
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VaR: Value at risk.
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HelloWallet: HelloWallet, LLC.
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VEBA: Voluntary Employee Beneficiary Association.
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ISDA: International Swaps and Derivatives Association.
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VIE: Variable interest entity.
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KAHC: Key Affordable Housing Corporation.
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•
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deterioration of commercial real estate market fundamentals;
|
•
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defaults by our loan counterparties or clients;
|
•
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adverse changes in credit quality trends;
|
•
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declining asset prices;
|
•
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our concentrated credit exposure in commercial and industrial loans;
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•
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the extensive regulation of the U.S. financial services industry;
|
•
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changes in accounting policies, standards, and interpretations;
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•
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operational or risk management failures by us or critical third parties;
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•
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breaches of security or failures of our technology systems due to technological or other factors and cybersecurity threats;
|
•
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negative outcomes from claims or litigation;
|
•
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failure or circumvention of our controls and procedures;
|
•
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the occurrence of natural or man-made disasters, conflicts, or terrorist attacks, or other adverse external events;
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•
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evolving capital and liquidity standards under applicable regulatory rules;
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•
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disruption of the U.S. financial system;
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•
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our ability to receive dividends from our subsidiary, KeyBank;
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•
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unanticipated changes in our liquidity position, including but not limited to, changes in our access to or the cost of funding and our ability to secure alternative funding sources;
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•
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downgrades in our credit ratings or those of KeyBank;
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•
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a reversal of the U.S. economic recovery due to financial, political or other shocks;
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•
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our ability to anticipate interest rate changes and manage interest rate risk;
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•
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deterioration of economic conditions in the geographic regions where we operate;
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•
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the soundness of other financial institutions;
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•
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tax reform and other changes in tax laws, including the impact of the TCJ Act;
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•
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our ability to attract and retain talented executives and employees and to manage our reputational risks;
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•
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our ability to timely and effectively implement our strategic initiatives;
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•
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increased competitive pressure from banks and non-banks;
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•
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our ability to adapt our products and services to industry standards and consumer preferences;
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•
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unanticipated adverse effects of strategic partnerships or acquisitions and dispositions of assets or businesses;
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•
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our ability to realize the anticipated benefits of the First Niagara merger; and
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•
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our ability to develop and effectively use the quantitative models we rely upon in our business planning.
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2018
|
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2017
|
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Six months ended June 30,
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||||||||||||||||||
dollars in millions, except per share amounts
|
Second
|
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First
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|
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Fourth
|
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Third
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Second
|
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2018
|
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2017
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|||||||
FOR THE PERIOD
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||||||||||||||
Interest income
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$
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1,205
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$
|
1,137
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$
|
1,114
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$
|
1,109
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|
$
|
1,117
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|
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$
|
2,342
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$
|
2,167
|
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Interest expense
|
226
|
|
193
|
|
|
176
|
|
161
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|
144
|
|
|
419
|
|
276
|
|
|||||||
Net interest income
|
979
|
|
944
|
|
|
938
|
|
948
|
|
973
|
|
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1,923
|
|
1,891
|
|
|||||||
Provision for credit losses
|
64
|
|
61
|
|
|
49
|
|
51
|
|
66
|
|
|
125
|
|
129
|
|
|||||||
Noninterest income
|
660
|
|
601
|
|
|
656
|
|
592
|
|
653
|
|
|
1,261
|
|
1,230
|
|
|||||||
Noninterest expense
|
993
|
|
1,006
|
|
|
1,098
|
|
992
|
|
995
|
|
|
1,999
|
|
2,008
|
|
|||||||
Income (loss) from continuing operations before income taxes
|
582
|
|
478
|
|
|
447
|
|
497
|
|
565
|
|
|
1,060
|
|
984
|
|
|||||||
Income (loss) from continuing operations attributable to Key
|
479
|
|
416
|
|
|
195
|
|
363
|
|
407
|
|
|
895
|
|
731
|
|
|||||||
Income (loss) from discontinued operations, net of taxes
|
3
|
|
2
|
|
|
1
|
|
1
|
|
5
|
|
|
5
|
|
5
|
|
|||||||
Net income (loss) attributable to Key
|
482
|
|
418
|
|
|
196
|
|
364
|
|
412
|
|
|
900
|
|
736
|
|
|||||||
Income (loss) from continuing operations attributable to Key common shareholders
|
464
|
|
402
|
|
|
181
|
|
349
|
|
393
|
|
|
866
|
|
689
|
|
|||||||
Income (loss) from discontinued operations, net of taxes
|
3
|
|
2
|
|
|
1
|
|
1
|
|
5
|
|
|
5
|
|
5
|
|
|||||||
Net income (loss) attributable to Key common shareholders
|
467
|
|
404
|
|
|
182
|
|
350
|
|
398
|
|
|
871
|
|
694
|
|
|||||||
PER COMMON SHARE
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Income (loss) from continuing operations attributable to Key common shareholders
|
$
|
.44
|
|
$
|
.38
|
|
|
$
|
.17
|
|
$
|
.32
|
|
$
|
.36
|
|
|
$
|
.82
|
|
$
|
.64
|
|
Income (loss) from discontinued operations, net of taxes
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|||||||
Net income (loss) attributable to Key common shareholders
(a)
|
.44
|
|
.38
|
|
|
.17
|
|
.32
|
|
.37
|
|
|
.82
|
|
.64
|
|
|||||||
Income (loss) from continuing operations attributable to Key common shareholders —
assuming dilution
|
.44
|
|
.38
|
|
|
.17
|
|
.32
|
|
.36
|
|
|
.81
|
|
.63
|
|
|||||||
Income (loss) from discontinued operations, net of taxes — assuming dilution
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|||||||
Net income (loss) attributable to Key common shareholders — assuming dilution
(a)
|
.44
|
|
.38
|
|
|
.17
|
|
.32
|
|
.36
|
|
|
.81
|
|
.63
|
|
|||||||
Cash dividends paid
|
.12
|
|
.105
|
|
|
.105
|
|
.095
|
|
.095
|
|
|
.225
|
|
.18
|
|
|||||||
Book value at period end
|
13.29
|
|
13.07
|
|
|
13.09
|
|
13.18
|
|
13.02
|
|
|
13.29
|
|
13.02
|
|
|||||||
Tangible book value at period end
|
10.59
|
|
10.35
|
|
|
10.35
|
|
10.52
|
|
10.40
|
|
|
10.59
|
|
10.40
|
|
|||||||
Market price:
|
|
|
|
|
|
|
|
|
|
||||||||||||||
High
|
21.05
|
|
22.40
|
|
|
20.58
|
|
19.48
|
|
19.10
|
|
|
22.40
|
|
19.53
|
|
|||||||
Low
|
18.72
|
|
19.00
|
|
|
17.40
|
|
16.28
|
|
16.91
|
|
|
18.72
|
|
16.54
|
|
|||||||
Close
|
19.54
|
|
19.55
|
|
|
20.17
|
|
18.82
|
|
18.74
|
|
|
19.54
|
|
18.74
|
|
|||||||
Weighted-average common shares outstanding (000)
|
1,052,652
|
|
1,056,037
|
|
|
1,062,348
|
|
1,073,390
|
|
1,076,203
|
|
|
1,054,378
|
|
1,083,486
|
|
|||||||
Weighted-average common shares and potential common shares outstanding (000)
(b)
|
1,065,793
|
|
1,071,786
|
|
|
1,079,330
|
|
1,088,841
|
|
1,093,039
|
|
|
1,068,939
|
|
1,099,294
|
|
|||||||
AT PERIOD END
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Loans
|
$
|
88,222
|
|
$
|
88,089
|
|
|
$
|
86,405
|
|
$
|
86,492
|
|
$
|
86,503
|
|
|
$
|
88,222
|
|
$
|
86,503
|
|
Earning assets
|
123,472
|
|
122,961
|
|
|
123,490
|
|
122,625
|
|
121,243
|
|
|
123,472
|
|
121,243
|
|
|||||||
Total assets
|
137,792
|
|
137,049
|
|
|
137,698
|
|
136,733
|
|
135,824
|
|
|
137,792
|
|
135,824
|
|
|||||||
Deposits
|
104,548
|
|
104,751
|
|
|
105,235
|
|
103,446
|
|
102,821
|
|
|
104,548
|
|
102,821
|
|
|||||||
Long-term debt
|
13,853
|
|
13,749
|
|
|
14,333
|
|
15,100
|
|
13,261
|
|
|
13,853
|
|
13,261
|
|
|||||||
Key common shareholders’ equity
|
14,075
|
|
13,919
|
|
|
13,998
|
|
14,224
|
|
14,228
|
|
|
14,075
|
|
14,228
|
|
|||||||
Key shareholders’ equity
|
15,100
|
|
14,944
|
|
|
15,023
|
|
15,249
|
|
15,253
|
|
|
15,100
|
|
15,253
|
|
|||||||
PERFORMANCE RATIOS — FROM CONTINUING OPERATIONS
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Return on average total assets
|
1.41
|
%
|
1.25
|
%
|
|
.57
|
%
|
1.07
|
%
|
1.23
|
%
|
|
1.33
|
%
|
1.11
|
%
|
|||||||
Return on average common equity
|
13.29
|
|
11.76
|
|
|
5.04
|
|
9.74
|
|
11.12
|
|
|
12.53
|
|
9.97
|
|
|||||||
Return on average tangible common equity
(c)
|
16.73
|
|
14.89
|
|
|
6.35
|
|
12.21
|
|
13.80
|
|
|
15.82
|
|
12.43
|
|
|||||||
Net interest margin (TE)
|
3.19
|
|
3.15
|
|
|
3.09
|
|
3.15
|
|
3.30
|
|
|
3.17
|
|
3.21
|
|
|||||||
Cash efficiency ratio
(c)
|
58.8
|
|
62.9
|
|
|
66.7
|
|
62.2
|
|
59.3
|
|
|
60.8
|
|
62.4
|
|
|||||||
PERFORMANCE RATIOS — FROM CONSOLIDATED OPERATIONS
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Return on average total assets
|
1.40
|
%
|
1.24
|
%
|
|
.57
|
%
|
1.06
|
%
|
1.23
|
%
|
|
1.33
|
%
|
1.11
|
%
|
|||||||
Return on average common equity
|
13.37
|
|
11.82
|
|
|
5.07
|
|
9.77
|
|
11.26
|
|
|
12.60
|
|
10.04
|
|
|||||||
Return on average tangible common equity
(c)
|
16.84
|
|
14.97
|
|
|
6.39
|
|
12.25
|
|
13.98
|
|
|
15.91
|
|
12.52
|
|
|||||||
Net interest margin (TE)
|
3.17
|
|
3.13
|
|
|
3.07
|
|
3.13
|
|
3.28
|
|
|
3.15
|
|
3.19
|
|
|||||||
Loan-to-deposit
(d)
|
86.9
|
|
86.9
|
|
|
84.4
|
|
86.2
|
|
87.2
|
|
|
86.9
|
|
87.2
|
|
|||||||
CAPITAL RATIOS AT PERIOD END
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Key shareholders’ equity to assets
|
10.96
|
%
|
10.90
|
%
|
|
10.91
|
%
|
11.15
|
%
|
11.23
|
%
|
|
10.96
|
%
|
11.23
|
%
|
|||||||
Key common shareholders’ equity to assets
|
10.21
|
|
10.16
|
|
|
10.17
|
|
10.40
|
|
10.48
|
|
|
10.21
|
|
10.48
|
|
|||||||
Tangible common equity to tangible assets
(c)
|
8.32
|
|
8.22
|
|
|
8.23
|
|
8.49
|
|
8.56
|
|
|
8.32
|
|
8.56
|
|
|||||||
Common Equity Tier 1
|
10.13
|
|
9.99
|
|
|
10.16
|
|
10.26
|
|
9.91
|
|
|
10.13
|
|
9.91
|
|
|||||||
Tier 1 risk-based capital
|
10.95
|
|
10.82
|
|
|
11.01
|
|
11.11
|
|
10.73
|
|
|
10.95
|
|
10.73
|
|
|||||||
Total risk-based capital
|
12.83
|
|
12.73
|
|
|
12.92
|
|
13.09
|
|
12.64
|
|
|
12.83
|
|
12.64
|
|
|||||||
Leverage
|
9.87
|
|
9.76
|
|
|
9.73
|
|
9.83
|
|
9.95
|
|
|
9.87
|
|
9.95
|
|
|||||||
TRUST ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Assets under management
|
$
|
39,663
|
|
$
|
39,003
|
|
|
$
|
39,588
|
|
$
|
38,660
|
|
$
|
37,613
|
|
|
$
|
39,663
|
|
$
|
37,613
|
|
OTHER DATA
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Average full-time-equivalent employees
|
18,376
|
|
18,540
|
|
|
18,379
|
|
18,548
|
|
18,344
|
|
|
18,458
|
|
18,365
|
|
|||||||
Branches
|
1,177
|
|
1,192
|
|
|
1,197
|
|
1,208
|
|
1,210
|
|
|
1,177
|
|
1,210
|
|
(a)
|
EPS may not foot due to rounding.
|
(b)
|
Assumes conversion of Common Share options and other stock awards as applicable.
|
(c)
|
See Figure
2
entitled “
GAAP to Non-GAAP Reconciliations
,” which presents the computations of certain financial measures related to “tangible common equity” and “cash efficiency.” The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.
|
(d)
|
Represents period-end consolidated total loans and loans held for sale divided by period-end consolidated total deposits.
|
|
|
Three months ended
|
|
Six months ended
|
|||||||||||||||||||
dollars in millions
|
6/30/2018
|
3/31/2018
|
12/31/2017
|
9/30/2017
|
6/30/2017
|
|
6/30/2018
|
6/30/2017
|
|||||||||||||||
Tangible common equity to tangible assets at period-end
|
|
|
|
|
|
|
|
|
|||||||||||||||
Key shareholders’ equity (GAAP)
|
$
|
15,100
|
|
$
|
14,944
|
|
$
|
15,023
|
|
$
|
15,249
|
|
$
|
15,253
|
|
|
|
|
|||||
Less:
|
Intangible assets
(a)
|
2,858
|
|
2,902
|
|
2,928
|
|
2,870
|
|
2,866
|
|
|
|
|
|||||||||
|
Preferred Stock
(b)
|
1,009
|
|
1,009
|
|
1,009
|
|
1,009
|
|
1,009
|
|
|
|
|
|||||||||
|
Tangible common equity (non-GAAP)
|
$
|
11,233
|
|
$
|
11,033
|
|
$
|
11,086
|
|
$
|
11,370
|
|
$
|
11,378
|
|
|
|
|
||||
Total assets (GAAP)
|
$
|
137,792
|
|
$
|
137,049
|
|
$
|
137,698
|
|
$
|
136,733
|
|
$
|
135,824
|
|
|
|
|
|||||
Less:
|
Intangible assets
(a)
|
2,858
|
|
2,902
|
|
2,928
|
|
2,870
|
|
2,866
|
|
|
|
|
|||||||||
|
Tangible assets (non-GAAP)
|
$
|
134,934
|
|
$
|
134,147
|
|
$
|
134,770
|
|
$
|
133,863
|
|
$
|
132,958
|
|
|
|
|
||||
|
Tangible common equity to tangible assets ratio (non-GAAP)
|
8.32
|
%
|
8.22
|
%
|
8.23
|
%
|
8.49
|
%
|
8.56
|
%
|
|
|
|
|||||||||
Average tangible common equity
|
|
|
|
|
|
|
|
|
|||||||||||||||
Average Key shareholders’ equity (GAAP)
|
$
|
15,032
|
|
$
|
14,889
|
|
$
|
15,268
|
|
$
|
15,241
|
|
$
|
15,200
|
|
|
$
|
14,961
|
|
$
|
15,192
|
|
|
Less:
|
Intangible assets (average)
(c)
|
2,883
|
|
2,916
|
|
2,939
|
|
2,878
|
|
2,756
|
|
|
2,899
|
|
2,764
|
|
|||||||
|
Preferred Stock (average)
|
1,025
|
|
1,025
|
|
1,025
|
|
1,025
|
|
1,025
|
|
|
1,025
|
|
1,251
|
|
|||||||
|
Average tangible common equity (non-GAAP)
|
$
|
11,124
|
|
$
|
10,948
|
|
$
|
11,304
|
|
$
|
11,338
|
|
$
|
11,419
|
|
|
$
|
11,037
|
|
$
|
11,177
|
|
Return on average tangible common equity from continuing operations
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP)
|
$
|
464
|
|
$
|
402
|
|
$
|
181
|
|
$
|
349
|
|
$
|
393
|
|
|
$
|
866
|
|
$
|
689
|
|
|
Average tangible common equity (non-GAAP)
|
11,124
|
|
10,948
|
|
11,304
|
|
11,338
|
|
11,419
|
|
|
11,037
|
|
11,177
|
|
||||||||
Return on average tangible common equity from continuing operations (non-GAAP)
|
16.73
|
%
|
14.89
|
%
|
6.35
|
%
|
12.21
|
%
|
13.80
|
%
|
|
15.82
|
%
|
12.43
|
%
|
||||||||
Return on average tangible common equity consolidated
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income (loss) attributable to Key common shareholders (GAAP)
|
$
|
467
|
|
$
|
404
|
|
$
|
182
|
|
$
|
350
|
|
$
|
398
|
|
|
$
|
871
|
|
$
|
694
|
|
|
Average tangible common equity (non-GAAP)
|
11,124
|
|
10,948
|
|
11,304
|
|
11,338
|
|
11,419
|
|
|
11,037
|
|
11,177
|
|
||||||||
Return on average tangible common equity consolidated (non-GAAP)
|
16.84
|
%
|
14.97
|
%
|
6.39
|
%
|
12.25
|
%
|
13.98
|
%
|
|
15.91
|
%
|
12.52
|
%
|
||||||||
Pre-provision net revenue
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net interest income (GAAP)
|
$
|
979
|
|
$
|
944
|
|
$
|
938
|
|
$
|
948
|
|
$
|
973
|
|
|
$
|
1,923
|
|
$
|
1,891
|
|
|
Plus:
|
Taxable-equivalent adjustment
|
8
|
|
8
|
|
14
|
|
14
|
|
14
|
|
|
16
|
|
25
|
|
|||||||
|
Noninterest income (GAAP)
|
660
|
|
601
|
|
656
|
|
592
|
|
653
|
|
|
1,261
|
|
1,230
|
|
|||||||
Less:
|
Noninterest expense (GAAP)
|
993
|
|
1,006
|
|
1,098
|
|
992
|
|
995
|
|
|
1,999
|
|
2,008
|
|
|||||||
|
Pre-provision net revenue from continuing operations (non-GAAP)
|
$
|
654
|
|
$
|
547
|
|
$
|
510
|
|
$
|
562
|
|
$
|
645
|
|
|
$
|
1,201
|
|
$
|
1,138
|
|
Cash efficiency ratio
|
|
|
|
|
|
|
|
|
|||||||||||||||
Noninterest expense (GAAP)
|
$
|
993
|
|
$
|
1,006
|
|
$
|
1,098
|
|
$
|
992
|
|
$
|
995
|
|
|
$
|
1,999
|
|
$
|
2,008
|
|
|
Less:
|
Intangible asset amortization
|
25
|
|
29
|
|
26
|
|
25
|
|
22
|
|
|
54
|
|
44
|
|
|||||||
Adjusted noninterest expense (non-GAAP)
|
$
|
968
|
|
$
|
977
|
|
$
|
1,072
|
|
$
|
967
|
|
$
|
973
|
|
|
$
|
1,945
|
|
$
|
1,964
|
|
|
Net interest income (GAAP)
|
$
|
979
|
|
$
|
944
|
|
$
|
938
|
|
$
|
948
|
|
$
|
973
|
|
|
$
|
1,923
|
|
$
|
1,891
|
|
|
Plus:
|
Taxable-equivalent adjustment
|
8
|
|
8
|
|
14
|
|
14
|
|
14
|
|
|
16
|
|
25
|
|
|||||||
|
Noninterest income (GAAP)
|
660
|
|
601
|
|
656
|
|
592
|
|
653
|
|
|
1,261
|
|
1,230
|
|
|||||||
Total taxable-equivalent revenue (non-GAAP)
|
$
|
1,647
|
|
$
|
1,553
|
|
$
|
1,608
|
|
$
|
1,554
|
|
$
|
1,640
|
|
|
$
|
3,200
|
|
$
|
3,146
|
|
|
Cash efficiency ratio (non-GAAP)
|
58.8
|
%
|
62.9
|
%
|
66.7
|
%
|
62.2
|
%
|
59.3
|
%
|
|
60.8
|
%
|
62.4
|
%
|
|
Three months ended June 30, 2018
|
||
Common Equity Tier 1 under the Regulatory Capital Rules (estimates)
|
|
||
Common Equity Tier 1 under current Regulatory Capital Rules
|
$
|
12,398
|
|
Adjustments from current Regulatory Capital Rules to the fully phased-in Regulatory Capital Rules:
|
|
||
Deferred tax assets and other intangible assets
(d)
|
—
|
|
|
Common Equity Tier 1 anticipated under the fully phased-in Regulatory Capital Rules
(e)
|
$
|
12,398
|
|
|
|
||
Net risk-weighted assets under current Regulatory Capital Rules
|
$
|
122,439
|
|
Adjustments from current Regulatory Capital Rules to the fully phased-in Regulatory Capital Rules:
|
|
||
Mortgage servicing assets
(f)
|
727
|
|
|
Deferred tax assets
|
346
|
|
|
Total risk-weighted assets anticipated under the fully phased-in Regulatory Capital Rules
(e)
|
$
|
123,512
|
|
|
|
||
Common Equity Tier 1 ratio under the fully phased-in Regulatory Capital Rules
(e)
|
10.04
|
%
|
|
|
|
(a)
|
For the three months ended
June 30, 2018
,
March 31, 2018
,
December 31, 2017
,
September 30, 2017
, and
June 30, 2017
, intangible assets exclude
$20 million
,
$23 million
,
$26 million
,
$30 million
, and
$33 million
, respectively, of period-end purchased credit card receivables.
|
(b)
|
Net of capital surplus.
|
(c)
|
For the three months ended
June 30, 2018
,
March 31, 2018
,
December 31, 2017
,
September 30, 2017
, and
June 30, 2017
, average intangible assets exclude
$21 million
,
$24 million
,
$28 million
,
$32 million
, and
$36 million
, respectively, of average purchased credit card receivables. For the six months ended
June 30, 2018
, and
June 30, 2017
, average intangible assets exclude
$23 million
and
$38 million
, respectively, of average purchased credit card receivables.
|
(d)
|
Includes the deferred tax assets subject to future taxable income for realization, primarily tax credit carryforwards, as well as intangible assets (other than goodwill and mortgage servicing assets) subject to the transition provisions of the final rule.
|
(e)
|
The anticipated amount of regulatory capital and risk-weighted assets is based upon the federal banking agencies’ Regulatory Capital Rules (as fully phased-in on January 1, 2019); we are subject to the Regulatory Capital Rules under the “standardized approach.”
|
(f)
|
Item is included in the 10%/15% exceptions bucket calculation and is risk-weighted at 250%.
|
•
|
Generate positive operating leverage and a cash efficiency ratio in the range of
54.0%
to
56.0%
;
|
•
|
Maintain a moderate risk profile by targeting a net loan charge-offs to average loans ratio in the range of
.40%
to
.60%
; and
|
•
|
Achieve a return on tangible common equity ratio in the range of
15.00%
to
18.00%
.
|
|
Key Metrics
(a)
|
2Q18
|
|
YTD 2018
|
|
Targets
|
Positive operating leverage
|
Cash efficiency ratio
(b)
|
58.8
|
%
|
60.8
|
%
|
54.0 - 56.0%
|
Moderate Risk Profile
|
Net loan charge-offs to average loans
|
.27
|
%
|
.26
|
%
|
.40 - .60%
|
Financial Returns
|
Return on average tangible common equity
(b)
|
16.73
|
%
|
15.82
|
%
|
15.00 - 18.00%
|
(a)
|
Calculated from continuing operations, unless otherwise noted.
|
(b)
|
Non-GAAP measure; see Figure
2
entitled “
GAAP to Non-GAAP Reconciliations
” for reconciliation.
|
•
|
We generated positive operating leverage during the second quarter of 2018 versus the second quarter of 2017 as our cash efficiency ratio improved to 58.8%, driven by continued revenue growth, as well as strong expense discipline. The performance of our fee-based businesses once again reflected our ability to offer a full range of solutions to our clients. Investment banking and debt placement fees for the second quarter of 2018 increased from a year ago, driven by strong advisory fees. Mortgage servicing fees also increased, benefiting from portfolio growth and an increase in special servicing fees.
|
•
|
Net loan charge-offs were
.26%
of average loans for the first
six
months of
2018
, down from
.29%
for the same period one-year ago and below our targeted range. Total net loan charge-offs decreased during the first
six
months of
2018
compared to the year-ago period. Total loans charged off decreased in our real estate — residential mortgage and commercial lease financing loan portfolios. Partially offsetting these decreases in loan charge-offs were increases in total loans charged off in our commercial and industrial loan portfolio. Total loan loss recoveries for the first
six
months of
2018
were up slightly from the same period one year ago.
|
•
|
Capital management remains a priority for
2018
. As previously reported, share repurchases of up to
$800 million
were included in the 2017 capital plan, which were effective through the second quarter of 2018. We completed
$126 million
of Common Share repurchases, including
$123 million
of Common Share repurchases in the open market and
$3 million
of Common Share repurchases related to employee equity compensation programs, in the
second
quarter of
2018
under this authorization. In April 2018, we submitted to the Federal Reserve and provided to the OCC our 2018 capital plan under the annual CCAR process. On June 28, 2018, the Federal Reserve announced that it did not object to our 2018 capital plan. Share repurchases of up to $1.225 billion were included in the 2018 capital plan, which is effective from the third quarter of 2018 through the second quarter of 2019.
|
•
|
Consistent with our 2017 capital plan, the Board declared a quarterly dividend of
$.12
per Common Share for the
second
quarter of
2018
. A dividend increase to $.17 per Common Share was also included in our 2018 capital plan which was approved and declared by our Board on July 11, 2018, for the third quarter of 2018.
|
•
|
On March 29, 2018, we announced that we had entered into a definitive agreement to sell Key Insurance & Benefits Services, Inc. to USI Insurance Services. We acquired Key Insurance & Benefits Services, Inc. as a part of the 2016 merger with First Niagara. We completed the sale to USI Insurance Services on May 4, 2018. At the close of the sale, we recognized a
$73 million
net gain on the sale during the second quarter of 2018.
|
Ratios (including capital conservation buffer)
|
Key
June 30, 2018 Pro forma |
Minimum
January 1, 2018 |
Phase-in
Period
|
Minimum
January 1, 2019
|
|||
Common Equity Tier 1
(a)
|
10.04
|
%
|
4.5
|
%
|
None
|
4.5
|
%
|
Capital conservation buffer
(b)
|
|
—
|
|
1/1/16-1/1/19
|
2.5
|
|
|
Common Equity Tier 1 + Capital conservation buffer
|
|
4.5
|
|
1/1/16-1/1/19
|
7.0
|
|
|
Tier 1 Capital
|
10.85
|
%
|
6.0
|
|
None
|
6.0
|
|
Tier 1 Capital + Capital conservation buffer
|
|
6.0
|
|
1/1/16-1/1/19
|
8.5
|
|
|
Total Capital
|
12.73
|
%
|
8.0
|
|
None
|
8.0
|
|
Total Capital + Capital conservation buffer
|
|
8.0
|
|
1/1/16-1/1/19
|
10.5
|
|
|
Leverage
(c)
|
9.87
|
%
|
4.0
|
|
None
|
4.0
|
|
(a)
|
See Figure
2
entitled “
GAAP to Non-GAAP Reconciliations
,” which presents the computation of Common Equity Tier 1 capital under the fully phased-in regulatory capital rules.
|
(b)
|
Capital conservation buffer must consist of Common Equity Tier 1 capital. As a standardized approach banking organization, KeyCorp is not subject to the countercyclical capital buffer of up to 2.5% imposed upon an advanced approaches banking organization under the Regulatory Capital Rules.
|
(c)
|
As a standardized approach banking organization, KeyCorp is not subject to the 3% supplemental leverage ratio requirement, which became effective January 1, 2018.
|
Prompt Corrective Action
|
|
Capital Category
|
|||
Ratio
|
|
Well Capitalized
(a)
|
Adequately Capitalized
|
||
Common Equity Tier 1 Risk-Based
|
|
6.5
|
%
|
4.5
|
%
|
Tier 1 Risk-Based
|
|
8.0
|
|
6.0
|
|
Total Risk-Based
|
|
10.0
|
|
8.0
|
|
Tier 1 Leverage
(b)
|
|
5.0
|
|
4.0
|
|
(a)
|
A “well capitalized” institution also must not be subject to any written agreement, order, or directive to meet and maintain a specific capital level for any capital measure.
|
(b)
|
As a “standardized approach” banking organization, KeyBank is not subject to the 3% supplemental leverage ratio requirement, which became effective January 1, 2018.
|
•
|
the volume, pricing, mix, and maturity of earning assets and interest-bearing liabilities;
|
•
|
the volume and value of net free funds, such as noninterest-bearing deposits and equity capital;
|
•
|
the use of derivative instruments to manage interest rate risk;
|
•
|
interest rate fluctuations and competitive conditions within the marketplace;
|
•
|
asset quality; and
|
•
|
fair value accounting of acquired earning assets and interest-bearing liabilities.
|
|
Three months ended June 30, 2018
|
|
Three months ended June 30, 2017
|
|
Change in Net interest income due to
|
||||||||||||||||||||||
dollars in millions
|
Average
Balance
|
Interest
(a)
|
Yield/
Rate
(a)
|
|
Average
Balance |
Interest
(a)
|
Yield/
Rate (a) |
|
Volume
|
Yield/Rate
|
Total
|
||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Loans
(b), (c)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial and industrial
(d)
|
$
|
45,030
|
|
$
|
485
|
|
4.32
|
%
|
|
$
|
40,666
|
|
$
|
409
|
|
4.04
|
%
|
|
$
|
46
|
|
$
|
30
|
|
$
|
76
|
|
Real estate — commercial mortgage
|
14,055
|
|
172
|
|
4.89
|
|
|
15,096
|
|
187
|
|
4.97
|
|
|
(13
|
)
|
(2
|
)
|
(15
|
)
|
|||||||
Real estate — construction
|
1,789
|
|
23
|
|
4.97
|
|
|
2,204
|
|
31
|
|
5.51
|
|
|
(5
|
)
|
(3
|
)
|
(8
|
)
|
|||||||
Commercial lease financing
|
4,550
|
|
41
|
|
3.61
|
|
|
4,690
|
|
50
|
|
4.33
|
|
|
(1
|
)
|
(8
|
)
|
(9
|
)
|
|||||||
Total commercial loans
|
65,424
|
|
721
|
|
4.41
|
|
|
62,656
|
|
677
|
|
4.34
|
|
|
27
|
|
17
|
|
44
|
|
|||||||
Real estate — residential mortgage
|
5,451
|
|
54
|
|
3.97
|
|
|
5,509
|
|
52
|
|
3.77
|
|
|
(1
|
)
|
3
|
|
2
|
|
|||||||
Home equity loans
|
11,601
|
|
135
|
|
4.67
|
|
|
12,473
|
|
135
|
|
4.31
|
|
|
(10
|
)
|
10
|
|
—
|
|
|||||||
Consumer direct loans
|
1,768
|
|
33
|
|
7.54
|
|
|
1,743
|
|
31
|
|
7.07
|
|
|
—
|
|
2
|
|
2
|
|
|||||||
Credit cards
|
1,080
|
|
30
|
|
11.21
|
|
|
1,044
|
|
29
|
|
11.04
|
|
|
1
|
|
—
|
|
1
|
|
|||||||
Consumer indirect loans
|
3,320
|
|
35
|
|
4.26
|
|
|
3,077
|
|
38
|
|
5.02
|
|
|
3
|
|
(6
|
)
|
(3
|
)
|
|||||||
Total consumer loans
|
23,220
|
|
287
|
|
4.97
|
|
|
23,846
|
|
285
|
|
4.77
|
|
|
(7
|
)
|
9
|
|
2
|
|
|||||||
Total loans
|
88,644
|
|
1,008
|
|
4.56
|
|
|
86,502
|
|
962
|
|
4.46
|
|
|
20
|
|
26
|
|
46
|
|
|||||||
Loans held for sale
|
1,375
|
|
16
|
|
4.50
|
|
|
1,082
|
|
9
|
|
3.58
|
|
|
3
|
|
4
|
|
7
|
|
|||||||
Securities available for sale
(b), (e)
|
17,443
|
|
97
|
|
2.13
|
|
|
17,997
|
|
90
|
|
1.97
|
|
|
(3
|
)
|
10
|
|
7
|
|
|||||||
Held-to-maturity securities
(b)
|
12,226
|
|
72
|
|
2.36
|
|
|
10,469
|
|
55
|
|
2.09
|
|
|
10
|
|
7
|
|
17
|
|
|||||||
Trading account assets
|
943
|
|
7
|
|
3.21
|
|
|
1,042
|
|
7
|
|
3.00
|
|
|
(1
|
)
|
1
|
|
—
|
|
|||||||
Short-term investments
|
2,015
|
|
8
|
|
1.76
|
|
|
1,970
|
|
5
|
|
.96
|
|
|
—
|
|
3
|
|
3
|
|
|||||||
Other investments
(e)
|
710
|
|
5
|
|
3.08
|
|
|
687
|
|
3
|
|
1.87
|
|
|
—
|
|
2
|
|
2
|
|
|||||||
Total earning assets
|
123,356
|
|
1,213
|
|
3.92
|
|
|
119,749
|
|
1,131
|
|
3.78
|
|
|
29
|
|
53
|
|
82
|
|
|||||||
Allowance for loan and lease losses
|
(875
|
)
|
|
|
|
(864
|
)
|
|
|
|
|
|
|
||||||||||||||
Accrued income and other assets
|
13,897
|
|
|
|
|
13,606
|
|
|
|
|
|
|
|
||||||||||||||
Discontinued assets
|
1,241
|
|
|
|
|
1,477
|
|
|
|
|
|
|
|
||||||||||||||
Total assets
|
$
|
137,619
|
|
|
|
|
$
|
133,968
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
NOW and money market deposit accounts
|
$
|
54,749
|
|
59
|
|
.44
|
|
|
$
|
54,416
|
|
34
|
|
.25
|
|
|
—
|
|
25
|
|
25
|
|
|||||
Savings deposits
|
6,276
|
|
5
|
|
.35
|
|
|
6,854
|
|
4
|
|
.21
|
|
|
—
|
|
1
|
|
1
|
|
|||||||
Certificates of deposit ($100,000 or more)
|
7,516
|
|
32
|
|
1.70
|
|
|
6,111
|
|
19
|
|
1.23
|
|
|
5
|
|
8
|
|
13
|
|
|||||||
Other time deposits
|
4,949
|
|
16
|
|
1.22
|
|
|
4,650
|
|
9
|
|
.77
|
|
|
1
|
|
6
|
|
7
|
|
|||||||
Total interest-bearing deposits
|
73,490
|
|
112
|
|
.61
|
|
|
72,031
|
|
66
|
|
.36
|
|
|
6
|
|
40
|
|
46
|
|
|||||||
Federal funds purchased and securities sold under repurchase agreements
|
1,475
|
|
5
|
|
1.41
|
|
|
466
|
|
—
|
|
.23
|
|
|
—
|
|
5
|
|
5
|
|
|||||||
Bank notes and other short-term borrowings
|
1,116
|
|
7
|
|
2.27
|
|
|
1,216
|
|
4
|
|
1.43
|
|
|
—
|
|
3
|
|
3
|
|
|||||||
Long-term debt
(f), (g)
|
12,748
|
|
102
|
|
3.20
|
|
|
11,046
|
|
74
|
|
2.68
|
|
|
12
|
|
16
|
|
28
|
|
|||||||
Total interest-bearing liabilities
|
88,829
|
|
226
|
|
1.02
|
|
|
84,759
|
|
144
|
|
.68
|
|
|
18
|
|
64
|
|
82
|
|
|||||||
Noninterest-bearing deposits
|
30,513
|
|
|
|
|
30,748
|
|
|
|
|
|
|
|
||||||||||||||
Accrued expense and other liabilities
|
2,002
|
|
|
|
|
1,782
|
|
|
|
|
|
|
|
||||||||||||||
Discontinued liabilities
(g)
|
1,241
|
|
|
|
|
1,477
|
|
|
|
|
|
|
|
||||||||||||||
Total liabilities
|
122,585
|
|
|
|
|
118,766
|
|
|
|
|
|
|
|
||||||||||||||
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Key shareholders’ equity
|
15,032
|
|
|
|
|
15,200
|
|
|
|
|
|
|
|
||||||||||||||
Noncontrolling interests
|
2
|
|
|
|
|
2
|
|
|
|
|
|
|
|
||||||||||||||
Total equity
|
15,034
|
|
|
|
|
15,202
|
|
|
|
|
|
|
|
||||||||||||||
Total liabilities and equity
|
$
|
137,619
|
|
|
|
|
$
|
133,968
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate spread (TE)
|
|
|
2.90
|
%
|
|
|
|
3.10
|
%
|
|
|
|
|
||||||||||||||
Net interest income (TE) and net interest margin (TE)
|
|
987
|
|
3.19
|
%
|
|
|
987
|
|
3.30
|
%
|
|
$
|
11
|
|
$
|
(11
|
)
|
—
|
|
|||||||
TE adjustment
(b)
|
|
8
|
|
|
|
|
14
|
|
|
|
|
|
|
||||||||||||||
Net interest income, GAAP basis
|
|
$
|
979
|
|
|
|
|
$
|
973
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (g), calculated using a matched funds transfer pricing methodology.
|
(b)
|
Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 21% and 35% for the three months ended
June 30, 2018
, and
June 30, 2017
, respectively.
|
(c)
|
For purposes of these computations, nonaccrual loans are included in average loan balances.
|
(d)
|
Commercial and industrial average balances include
$126 million
and
$117 million
of assets from commercial credit cards for the
three months ended June 30, 2018
, and
June 30, 2017
, respectively.
|
(e)
|
Yield is calculated on the basis of amortized cost.
|
(f)
|
Rate calculation excludes basis adjustments related to fair value hedges.
|
(g)
|
A portion of long-term debt and the related interest expense is allocated to discontinued liabilities as a result of applying our matched funds transfer pricing methodology to discontinued operations.
|
|
Six months ended June 30, 2018
|
|
Six months ended June 30, 2017
|
|
Change in Net interest income due to
|
||||||||||||||||||||||
dollars in millions
|
Average
Balance
|
Interest
(a)
|
Yield/
Rate
(a)
|
|
Average
Balance |
Interest
(a)
|
Yield/
Rate (a) |
|
Volume
|
Yield/Rate
|
Total
|
||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Loans
(b), (c)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial and industrial
(d)
|
$
|
43,888
|
|
$
|
919
|
|
4.22
|
%
|
|
$
|
40,336
|
|
$
|
782
|
|
3.90
|
%
|
|
$
|
72
|
|
$
|
65
|
|
$
|
137
|
|
Real estate — commercial mortgage
|
14,070
|
|
337
|
|
4.83
|
|
|
15,142
|
|
351
|
|
4.68
|
|
|
(25
|
)
|
11
|
|
(14
|
)
|
|||||||
Real estate — construction
|
1,872
|
|
45
|
|
4.80
|
|
|
2,278
|
|
57
|
|
5.01
|
|
|
(10
|
)
|
(2
|
)
|
(12
|
)
|
|||||||
Commercial lease financing
|
4,607
|
|
82
|
|
3.57
|
|
|
4,662
|
|
94
|
|
4.04
|
|
|
(1
|
)
|
(11
|
)
|
(12
|
)
|
|||||||
Total commercial loans
|
64,437
|
|
1,383
|
|
4.32
|
|
|
62,418
|
|
1,284
|
|
4.14
|
|
|
36
|
|
63
|
|
99
|
|
|||||||
Real estate — residential mortgage
|
5,465
|
|
108
|
|
3.96
|
|
|
5,514
|
|
106
|
|
3.85
|
|
|
(1
|
)
|
3
|
|
2
|
|
|||||||
Home equity loans
|
11,738
|
|
269
|
|
4.61
|
|
|
12,542
|
|
266
|
|
4.27
|
|
|
(18
|
)
|
21
|
|
3
|
|
|||||||
Consumer direct loans
|
1,767
|
|
66
|
|
7.53
|
|
|
1,752
|
|
61
|
|
7.02
|
|
|
1
|
|
4
|
|
5
|
|
|||||||
Credit cards
|
1,080
|
|
60
|
|
11.27
|
|
|
1,055
|
|
58
|
|
11.05
|
|
|
1
|
|
1
|
|
2
|
|
|||||||
Consumer indirect loans
|
3,303
|
|
70
|
|
4.28
|
|
|
3,037
|
|
75
|
|
4.97
|
|
|
6
|
|
(11
|
)
|
(5
|
)
|
|||||||
Total consumer loans
|
23,353
|
|
573
|
|
4.94
|
|
|
23,900
|
|
566
|
|
4.76
|
|
|
(11
|
)
|
18
|
|
7
|
|
|||||||
Total loans
|
87,790
|
|
1,956
|
|
4.49
|
|
|
86,318
|
|
1,850
|
|
4.31
|
|
|
25
|
|
81
|
|
106
|
|
|||||||
Loans held for sale
|
1,282
|
|
28
|
|
4.31
|
|
|
1,135
|
|
22
|
|
3.95
|
|
|
3
|
|
3
|
|
6
|
|
|||||||
Securities available for sale
(b), (e)
|
17,665
|
|
192
|
|
2.09
|
|
|
18,586
|
|
185
|
|
1.96
|
|
|
(9
|
)
|
16
|
|
7
|
|
|||||||
Held-to-maturity securities
(b)
|
12,134
|
|
141
|
|
2.33
|
|
|
10,230
|
|
106
|
|
2.07
|
|
|
21
|
|
14
|
|
35
|
|
|||||||
Trading account assets
|
925
|
|
14
|
|
3.11
|
|
|
1,005
|
|
14
|
|
2.88
|
|
|
(1
|
)
|
1
|
|
—
|
|
|||||||
Short-term investments
|
2,032
|
|
16
|
|
1.64
|
|
|
1,791
|
|
8
|
|
.88
|
|
|
1
|
|
7
|
|
8
|
|
|||||||
Other investments
(e)
|
716
|
|
11
|
|
3.02
|
|
|
698
|
|
7
|
|
2.07
|
|
|
—
|
|
4
|
|
4
|
|
|||||||
Total earning assets
|
122,544
|
|
2,358
|
|
3.85
|
|
|
119,763
|
|
2,192
|
|
3.67
|
|
|
40
|
|
126
|
|
166
|
|
|||||||
Allowance for loan and lease losses
|
(875
|
)
|
|
|
|
(860
|
)
|
|
|
|
|
|
|
||||||||||||||
Accrued income and other assets
|
13,982
|
|
|
|
|
13,712
|
|
|
|
|
|
|
|
||||||||||||||
Discontinued assets
|
1,272
|
|
|
|
|
1,508
|
|
|
|
|
|
|
|
||||||||||||||
Total assets
|
$
|
136,923
|
|
|
|
|
$
|
134,123
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
NOW and money market deposit accounts
|
$
|
54,129
|
|
105
|
|
.39
|
|
|
$
|
54,356
|
|
66
|
|
.24
|
|
|
—
|
|
39
|
|
39
|
|
|||||
Savings deposits
|
6,254
|
|
10
|
|
.32
|
|
|
6,604
|
|
5
|
|
.16
|
|
|
—
|
|
5
|
|
5
|
|
|||||||
Certificates of deposit ($100,000 or more)
|
7,246
|
|
59
|
|
1.64
|
|
|
5,871
|
|
35
|
|
1.20
|
|
|
9
|
|
15
|
|
24
|
|
|||||||
Other time deposits
|
4,907
|
|
29
|
|
1.17
|
|
|
4,677
|
|
18
|
|
.77
|
|
|
1
|
|
10
|
|
11
|
|
|||||||
Total interest-bearing deposits
|
72,536
|
|
203
|
|
.56
|
|
|
71,508
|
|
124
|
|
.35
|
|
|
10
|
|
69
|
|
79
|
|
|||||||
Federal funds purchased and securities sold under repurchase agreements
|
1,448
|
|
9
|
|
1.26
|
|
|
629
|
|
1
|
|
.28
|
|
|
2
|
|
6
|
|
8
|
|
|||||||
Bank notes and other short-term borrowings
|
1,228
|
|
13
|
|
2.05
|
|
|
1,508
|
|
9
|
|
1.21
|
|
|
(2
|
)
|
6
|
|
4
|
|
|||||||
Long-term debt
(f), (g)
|
12,608
|
|
194
|
|
3.08
|
|
|
10,940
|
|
142
|
|
2.61
|
|
|
23
|
|
29
|
|
52
|
|
|||||||
Total interest-bearing liabilities
|
87,820
|
|
419
|
|
.96
|
|
|
84,585
|
|
276
|
|
.66
|
|
|
33
|
|
110
|
|
143
|
|
|||||||
Noninterest-bearing deposits
|
30,747
|
|
|
|
|
30,922
|
|
|
|
|
|
|
|
||||||||||||||
Accrued expense and other liabilities
|
2,121
|
|
|
|
|
1,914
|
|
|
|
|
|
|
|
||||||||||||||
Discontinued liabilities
(g)
|
1,272
|
|
|
|
|
1,509
|
|
|
|
|
|
|
|
||||||||||||||
Total liabilities
|
121,960
|
|
|
|
|
118,930
|
|
|
|
|
|
|
|
||||||||||||||
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Key shareholders’ equity
|
14,961
|
|
|
|
|
15,192
|
|
|
|
|
|
|
|
||||||||||||||
Noncontrolling interests
|
2
|
|
|
|
|
1
|
|
|
|
|
|
|
|
||||||||||||||
Total equity
|
14,963
|
|
|
|
|
15,193
|
|
|
|
|
|
|
|
||||||||||||||
Total liabilities and equity
|
$
|
136,923
|
|
|
|
|
$
|
134,123
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate spread (TE)
|
|
|
2.89
|
%
|
|
|
|
3.01
|
%
|
|
|
|
|
||||||||||||||
Net interest income (TE) and net interest margin (TE)
|
|
1,939
|
|
3.17
|
%
|
|
|
1,916
|
|
3.21
|
%
|
|
$
|
7
|
|
$
|
16
|
|
$
|
23
|
|
||||||
TE adjustment
(b)
|
|
16
|
|
|
|
|
25
|
|
|
|
|
|
|
||||||||||||||
Net interest income, GAAP basis
|
|
$
|
1,923
|
|
|
|
|
$
|
1,891
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (g) below, calculated using a matched funds transfer pricing methodology.
|
(b)
|
Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 21% and 35% for the
six months ended June 30, 2018
, and
June 30, 2017
, respectively.
|
(c)
|
For purposes of these computations, nonaccrual loans are included in average loan balances.
|
(d)
|
Commercial and industrial average balances include
$123 million
and
$115 million
of assets from commercial credit cards for the
six months ended June 30, 2018
, and
June 30, 2017
, respectively.
|
(e)
|
Yield is calculated on the basis of amortized cost.
|
(f)
|
Rate calculation excludes basis adjustments related to fair value hedges.
|
(g)
|
A portion of long-term debt and the related interest expense is allocated to discontinued liabilities as a result of applying Key’s matched funds transfer pricing methodology to discontinued operations.
|
(a)
|
Other noninterest income includes operating lease income and other leasing gains, corporate services income, corporate-owned life insurance income, consumer mortgage income, mortgage servicing fees, and other income. See the "Consolidated Statements of Income" in Item 1. Financial Statements of this report.
|
in millions
|
June 30, 2018
|
March 31, 2018
|
December 31, 2017
|
September 30, 2017
|
June 30, 2017
|
||||||||||
Assets under management by investment type:
|
|
|
|
|
|
||||||||||
Equity
|
$
|
24,125
|
|
$
|
23,629
|
|
$
|
24,081
|
|
$
|
23,342
|
|
$
|
22,824
|
|
Securities lending
|
977
|
|
837
|
|
947
|
|
876
|
|
807
|
|
|||||
Fixed income
|
11,276
|
|
11,098
|
|
10,930
|
|
11,009
|
|
10,819
|
|
|||||
Money market
|
3,285
|
|
3,439
|
|
3,630
|
|
3,433
|
|
3,163
|
|
|||||
Total assets under management
|
$
|
39,663
|
|
$
|
39,003
|
|
$
|
39,588
|
|
$
|
38,660
|
|
$
|
37,613
|
|
|
|
|
|
|
|
(a)
|
Other noninterest expense includes equipment, operating lease expense, marketing, FDIC assessment, intangible asset amortization, OREO expense, net, and other expense. See the "Consolidated Statements of Income" in Item 1. Financial Statements of this report.
|
|
|
|
|
|
|
Three months ended
June 30, |
Change
|
|
Six months ended
June 30, |
Change
|
||||||||||||||||||
dollars in millions
|
2018
|
2017
|
Amount
|
Percent
|
|
2018
|
2017
|
Amount
|
Percent
|
||||||||||||||
Salaries and contract labor
|
$
|
341
|
|
$
|
332
|
|
$
|
9
|
|
2.7
|
%
|
|
$
|
680
|
|
$
|
656
|
|
$
|
24
|
|
3.7
|
%
|
Incentive and stock-based compensation
|
147
|
|
137
|
|
10
|
|
7.3
|
|
|
292
|
|
264
|
|
28
|
|
10.6
|
|
||||||
Employee benefits
|
82
|
|
78
|
|
4
|
|
5.1
|
|
|
187
|
|
175
|
|
12
|
|
6.9
|
|
||||||
Severance
|
16
|
|
6
|
|
10
|
|
166.7
|
|
|
21
|
|
15
|
|
6
|
|
40.0
|
|
||||||
Total personnel expense
|
$
|
586
|
|
$
|
553
|
|
$
|
33
|
|
6.0
|
%
|
|
$
|
1,180
|
|
$
|
1,110
|
|
$
|
70
|
|
6.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30, |
Change
|
|
Six months ended
June 30, |
Change
|
||||||||||||||||||
dollars in millions
|
2018
|
2017
|
Amount
|
Percent
|
|
2018
|
2017
|
Amount
|
Percent
|
||||||||||||||
REVENUE FROM CONTINUING OPERATIONS (TE)
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Key Community Bank
|
$
|
996
|
|
$
|
998
|
|
$
|
(2
|
)
|
(.2
|
)%
|
|
$
|
1,954
|
|
$
|
1,888
|
|
$
|
66
|
|
3.5
|
%
|
Key Corporate Bank
|
542
|
|
597
|
|
(55
|
)
|
(9.2
|
)
|
|
1,101
|
|
1,175
|
|
(74
|
)
|
(6.3
|
)
|
||||||
Other Segments
|
38
|
|
46
|
|
(8
|
)
|
(17.4
|
)
|
|
75
|
|
90
|
|
(15
|
)
|
(16.7
|
)
|
||||||
Total Segments
|
1,576
|
|
1,641
|
|
(65
|
)
|
(4.0
|
)
|
|
3,130
|
|
3,153
|
|
(23
|
)
|
(.7
|
)
|
||||||
Reconciling Items
(a)
|
71
|
|
(1
|
)
|
72
|
|
N/M
|
|
|
70
|
|
(7
|
)
|
77
|
|
N/M
|
|
||||||
Total
|
$
|
1,647
|
|
$
|
1,640
|
|
$
|
7
|
|
.4
|
%
|
|
$
|
3,200
|
|
$
|
3,146
|
|
$
|
54
|
|
1.7
|
%
|
INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO KEY
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Key Community Bank
|
$
|
244
|
|
$
|
198
|
|
$
|
46
|
|
23.2
|
%
|
|
$
|
441
|
|
$
|
347
|
|
$
|
94
|
|
27.1
|
%
|
Key Corporate Bank
|
167
|
|
224
|
|
(57
|
)
|
(25.4
|
)
|
|
374
|
|
404
|
|
(30
|
)
|
(7.4
|
)
|
||||||
Other Segments
|
25
|
|
24
|
|
1
|
|
4.2
|
|
|
44
|
|
45
|
|
(1
|
)
|
(2.2
|
)
|
||||||
Total Segments
|
436
|
|
446
|
|
(10
|
)
|
(2.2
|
)
|
|
859
|
|
796
|
|
63
|
|
7.9
|
|
||||||
Reconciling Items
(a)
|
43
|
|
(39
|
)
|
82
|
|
N/M
|
|
|
36
|
|
(65
|
)
|
101
|
|
N/M
|
|
||||||
Total
|
$
|
479
|
|
$
|
407
|
|
$
|
72
|
|
17.7
|
%
|
|
$
|
895
|
|
$
|
731
|
|
$
|
164
|
|
22.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Reconciling items consist primarily of the unallocated portion of merger-related charges and items not allocated to the business segments because they do not reflect their normal operations.
|
|
Three months ended
June 30, |
Change
|
|
Six months ended
June 30, |
Change
|
||||||||||||||||||
dollars in millions
|
2018
|
2017
|
Amount
|
Percent
|
|
2018
|
2017
|
Amount
|
Percent
|
||||||||||||||
SUMMARY OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net interest income (TE)
|
$
|
715
|
|
$
|
676
|
|
$
|
39
|
|
5.8
|
%
|
|
$
|
1,403
|
|
$
|
1,305
|
|
$
|
98
|
|
7.5
|
%
|
Noninterest income
|
281
|
|
322
|
|
(41
|
)
|
(12.7
|
)
|
|
551
|
|
583
|
|
(32
|
)
|
(5.5
|
)
|
||||||
Total revenue (TE)
|
996
|
|
998
|
|
(2
|
)
|
(.2
|
)
|
|
1,954
|
|
1,888
|
|
66
|
|
3.5
|
|
||||||
Provision for credit losses
|
38
|
|
47
|
|
(9
|
)
|
(19.1
|
)
|
|
86
|
|
94
|
|
(8
|
)
|
(8.5
|
)
|
||||||
Noninterest expense
|
639
|
|
635
|
|
4
|
|
.6
|
|
|
1,290
|
|
1,241
|
|
49
|
|
3.9
|
|
||||||
Income (loss) before income taxes (TE)
|
319
|
|
316
|
|
3
|
|
.9
|
|
|
578
|
|
553
|
|
25
|
|
4.5
|
|
||||||
Allocated income taxes (benefit) and TE adjustments
|
75
|
|
118
|
|
(43
|
)
|
(36.4
|
)
|
|
137
|
|
206
|
|
(69
|
)
|
(33.5
|
)
|
||||||
Net income (loss) attributable to Key
|
$
|
244
|
|
$
|
198
|
|
$
|
46
|
|
23.2
|
%
|
|
$
|
441
|
|
$
|
347
|
|
$
|
94
|
|
27.1
|
%
|
AVERAGE BALANCES
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Loans and leases
|
$
|
47,984
|
|
$
|
47,477
|
|
$
|
507
|
|
1.1
|
%
|
|
$
|
47,833
|
|
$
|
47,282
|
|
$
|
551
|
|
1.2
|
%
|
Total assets
|
51,866
|
|
51,441
|
|
425
|
|
.8
|
|
|
51,736
|
|
51,215
|
|
521
|
|
1.0
|
|
||||||
Deposits
|
80,930
|
|
79,601
|
|
1,329
|
|
1.7
|
|
|
80,440
|
|
79,375
|
|
1,065
|
|
1.3
|
|
||||||
Assets under management at period end
|
$
|
39,663
|
|
$
|
37,613
|
|
$
|
2,050
|
|
5.5
|
%
|
|
$
|
39,663
|
|
$
|
37,613
|
|
$
|
2,050
|
|
5.5
|
%
|
|
Three months ended
June 30, |
Change
|
|
Six months ended
June 30, |
Change
|
||||||||||||||||||
dollars in millions
|
2018
|
2017
|
Amount
|
Percent
|
|
2018
|
2017
|
Amount
|
Percent
|
||||||||||||||
NONINTEREST INCOME
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Trust and investment services income
|
$
|
92
|
|
$
|
86
|
|
$
|
6
|
|
7.0
|
%
|
|
$
|
181
|
|
$
|
168
|
|
$
|
13
|
|
7.7
|
%
|
Services charges on deposit accounts
|
77
|
|
77
|
|
—
|
|
—
|
|
|
153
|
|
152
|
|
1
|
|
.7
|
|
||||||
Cards and payments income
|
59
|
|
60
|
|
(1
|
)
|
(1.7
|
)
|
|
110
|
|
116
|
|
(6
|
)
|
(5.2
|
)
|
||||||
Other noninterest income
|
53
|
|
99
|
|
(46
|
)
|
(46.5
|
)
|
|
107
|
|
147
|
|
(40
|
)
|
(27.2
|
)
|
||||||
Total noninterest income
|
$
|
281
|
|
$
|
322
|
|
$
|
(41
|
)
|
(12.7
|
)%
|
|
$
|
551
|
|
$
|
583
|
|
$
|
(32
|
)
|
(5.5
|
)%
|
AVERAGE DEPOSITS OUTSTANDING
|
|
|
|
|
|
|
|
|
|
||||||||||||||
NOW and money market deposit accounts
|
$
|
45,112
|
|
$
|
45,127
|
|
$
|
(15
|
)
|
—
|
|
|
$
|
44,704
|
|
$
|
44,954
|
|
$
|
(250
|
)
|
(.6
|
)%
|
Savings deposits
|
5,078
|
|
5,293
|
|
(215
|
)
|
(4.1
|
)%
|
|
5,067
|
|
5,281
|
|
(214
|
)
|
(4.1
|
)
|
||||||
Certificates of deposits ($100,000 or more)
|
5,232
|
|
4,016
|
|
1,216
|
|
30.3
|
|
|
5,097
|
|
3,947
|
|
1,150
|
|
29.1
|
|
||||||
Other time deposits
|
4,934
|
|
4,640
|
|
294
|
|
6.3
|
|
|
4,895
|
|
4,666
|
|
229
|
|
4.9
|
|
||||||
Noninterest-bearing deposits
|
20,574
|
|
20,525
|
|
49
|
|
.2
|
|
|
20,677
|
|
20,527
|
|
150
|
|
.7
|
|
||||||
Total deposits
|
$
|
80,930
|
|
$
|
79,601
|
|
$
|
1,329
|
|
1.7
|
%
|
|
$
|
80,440
|
|
$
|
79,375
|
|
$
|
1,065
|
|
1.3
|
%
|
HOME EQUITY LOANS
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Average balance
|
$
|
11,496
|
|
$
|
12,330
|
|
|
|
|
|
|
|
|
|
|||||||||
Combined weighted-average loan-to-value ratio (at date of origination)
|
70
|
%
|
71
|
%
|
|
|
|
|
|
|
|
||||||||||||
Percent first lien positions
|
60
|
|
60
|
|
|
|
|
|
|
|
|
||||||||||||
OTHER DATA
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Branches
|
1,177
|
|
1,210
|
|
|
|
|
|
|
|
|
|
|||||||||||
Automated teller machines
|
1,537
|
|
1,589
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30, |
Change
|
|
Six months ended
June 30, |
Change
|
||||||||||||||||||
dollars in millions
|
2018
|
2017
|
Amount
|
Percent
|
|
2018
|
2017
|
Amount
|
Percent
|
||||||||||||||
SUMMARY OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net interest income (TE)
|
$
|
277
|
|
$
|
312
|
|
$
|
(35
|
)
|
(11.2
|
)%
|
|
$
|
549
|
|
$
|
616
|
|
$
|
(67
|
)
|
(10.9
|
)%
|
Noninterest income
|
265
|
|
285
|
|
(20
|
)
|
(7.0
|
)
|
|
552
|
|
559
|
|
(7
|
)
|
(1.3
|
)
|
||||||
Total revenue (TE)
|
542
|
|
597
|
|
(55
|
)
|
(9.2
|
)
|
|
1,101
|
|
1,175
|
|
(74
|
)
|
(6.3
|
)
|
||||||
Provision for credit losses
|
28
|
|
19
|
|
9
|
|
47.4
|
|
|
42
|
|
36
|
|
6
|
|
16.7
|
|
||||||
Noninterest expense
|
326
|
|
297
|
|
29
|
|
9.8
|
|
|
640
|
|
603
|
|
37
|
|
6.1
|
|
||||||
Income (loss) before income taxes (TE)
|
188
|
|
281
|
|
(93
|
)
|
(33.1
|
)
|
|
419
|
|
536
|
|
(117
|
)
|
(21.8
|
)
|
||||||
Allocated income taxes and TE adjustments
|
21
|
|
57
|
|
(36
|
)
|
(63.2
|
)
|
|
45
|
|
133
|
|
(88
|
)
|
(66.2
|
)
|
||||||
Net income (loss)
|
$
|
167
|
|
$
|
224
|
|
$
|
(57
|
)
|
(25.4
|
)
|
|
$
|
374
|
|
$
|
403
|
|
$
|
(29
|
)
|
(7.2
|
)
|
Less: Net income (loss) attributable to noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
(1
|
)
|
1
|
|
N/M
|
|
||||||
Net income (loss) attributable to Key
|
$
|
167
|
|
$
|
224
|
|
$
|
(57
|
)
|
(25.4
|
)%
|
|
$
|
374
|
|
$
|
404
|
|
$
|
(30
|
)
|
(7.4
|
)%
|
AVERAGE BALANCES
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Loans and leases
|
$
|
39,710
|
|
$
|
37,704
|
|
$
|
2,006
|
|
5.3
|
%
|
|
$
|
38,989
|
|
$
|
37,696
|
|
$
|
1,293
|
|
3.4
|
%
|
Loans held for sale
|
1,299
|
|
1,000
|
|
299
|
|
29.9
|
|
|
1,209
|
|
1,048
|
|
161
|
|
15.4
|
|
||||||
Total assets
|
47,213
|
|
44,131
|
|
3,082
|
|
7.0
|
|
|
46,386
|
|
44,128
|
|
2,258
|
|
5.1
|
|
||||||
Deposits
|
21,057
|
|
21,145
|
|
(88
|
)
|
(.4
|
)%
|
|
20,937
|
|
21,074
|
|
(137
|
)
|
(.7
|
)%
|
|
Three months ended
June 30, |
Change
|
|
Six months ended
June 30, |
Change
|
||||||||||||||||||
dollars in millions
|
2018
|
2017
|
Amount
|
Percent
|
|
2018
|
2017
|
Amount
|
Percent
|
||||||||||||||
NONINTEREST INCOME
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Trust and investment services income
|
$
|
29
|
|
$
|
35
|
|
$
|
(6
|
)
|
(17.1
|
)%
|
|
$
|
58
|
|
$
|
73
|
|
$
|
(15
|
)
|
(20.5
|
)%
|
Investment banking and debt placement fees
|
153
|
|
134
|
|
19
|
|
14.2
|
|
|
294
|
|
258
|
|
36
|
|
14.0
|
|
||||||
Operating lease income and other leasing gains
|
(10
|
)
|
22
|
|
(32
|
)
|
N/M
|
|
|
17
|
|
43
|
|
(26
|
)
|
(60.5
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Corporate services income
|
44
|
|
38
|
|
6
|
|
15.8
|
|
|
87
|
|
75
|
|
12
|
|
16.0
|
|
||||||
Service charges on deposit accounts
|
13
|
|
13
|
|
—
|
|
—
|
|
|
26
|
|
25
|
|
1
|
|
4.0
|
|
||||||
Cards and payments income
|
12
|
|
10
|
|
2
|
|
20.0
|
|
|
23
|
|
19
|
|
4
|
|
21.1
|
|
||||||
Payments and services income
|
69
|
|
61
|
|
8
|
|
13.1
|
|
|
136
|
|
119
|
|
17
|
|
14.3
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Mortgage servicing fees
|
19
|
|
12
|
|
7
|
|
58.3
|
|
|
36
|
|
28
|
|
8
|
|
28.6
|
|
||||||
Other noninterest income
|
5
|
|
21
|
|
(16
|
)
|
(76.2
|
)
|
|
11
|
|
38
|
|
(27
|
)
|
(71.1
|
)
|
||||||
Total noninterest income
|
$
|
265
|
|
$
|
285
|
|
$
|
(20
|
)
|
(7.0
|
)%
|
|
$
|
552
|
|
$
|
559
|
|
$
|
(7
|
)
|
(1.3
|
)%
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Other consumer loans include Consumer direct loans, Credit cards, and Consumer indirect loans. See Note
3
(“
Loan Portfolio
”) Item 1. Financial Statements of this report.
|
June 30, 2018
|
Commercial and industrial
|
|
Commercial
real estate
|
|
Commercial
lease financing
|
|
Total commercial
loans
|
|
Percent of
total
|
|||||||||
dollars in millions
|
|
|
|
|
||||||||||||||
Industry classification:
|
|
|
|
|
|
|
|
|
|
|||||||||
Agricultural
|
$
|
799
|
|
|
$
|
151
|
|
|
$
|
89
|
|
|
$
|
1,039
|
|
|
1.6
|
%
|
Automotive
|
1,967
|
|
|
466
|
|
|
58
|
|
|
2,491
|
|
|
3.8
|
|
||||
Business products
|
2,087
|
|
|
145
|
|
|
51
|
|
|
2,283
|
|
|
3.5
|
|
||||
Business services
|
2,820
|
|
|
146
|
|
|
241
|
|
|
3,207
|
|
|
4.9
|
|
||||
Commercial real estate
|
5,775
|
|
|
10,670
|
|
|
21
|
|
|
16,466
|
|
|
25.4
|
|
||||
Construction materials and contractors
|
1,796
|
|
|
250
|
|
|
187
|
|
|
2,233
|
|
|
3.4
|
|
||||
Consumer discretionary
|
3,719
|
|
|
545
|
|
|
534
|
|
|
4,798
|
|
|
7.4
|
|
||||
Consumer services
|
3,062
|
|
|
786
|
|
|
201
|
|
|
4,049
|
|
|
6.2
|
|
||||
Equipment
|
1,546
|
|
|
122
|
|
|
82
|
|
|
1,750
|
|
|
2.7
|
|
||||
Financial
|
4,936
|
|
|
53
|
|
|
346
|
|
|
5,335
|
|
|
8.2
|
|
||||
Healthcare
|
3,257
|
|
|
2,138
|
|
|
385
|
|
|
5,780
|
|
|
8.9
|
|
||||
Materials manufacturing and mining
|
1,870
|
|
|
93
|
|
|
132
|
|
|
2,095
|
|
|
3.2
|
|
||||
Media
|
399
|
|
|
19
|
|
|
66
|
|
|
484
|
|
|
.8
|
|
||||
Oil and gas
|
1,379
|
|
|
34
|
|
|
50
|
|
|
1,463
|
|
|
2.3
|
|
||||
Public exposure
|
2,662
|
|
|
50
|
|
|
989
|
|
|
3,701
|
|
|
5.7
|
|
||||
Technology
|
579
|
|
|
10
|
|
|
7
|
|
|
596
|
|
|
.9
|
|
||||
Transportation
|
1,417
|
|
|
214
|
|
|
765
|
|
|
2,396
|
|
|
3.7
|
|
||||
Utilities
|
3,958
|
|
|
6
|
|
|
305
|
|
|
4,269
|
|
|
6.6
|
|
||||
Other
|
541
|
|
|
—
|
|
|
—
|
|
|
541
|
|
|
.8
|
|
||||
Total
|
$
|
44,569
|
|
|
$
|
15,898
|
|
|
$
|
4,509
|
|
|
$
|
64,976
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||
December 31, 2017
|
Commercial and industrial
|
|
Commercial
real estate
|
|
Commercial
lease financing
|
|
Total commercial
loans
|
|
Percent of
total
|
|||||||||
dollars in millions
|
|
|
|
|
||||||||||||||
Industry classification:
|
|
|
|
|
|
|
|
|
|
|||||||||
Agricultural
|
$
|
742
|
|
|
$
|
156
|
|
|
$
|
100
|
|
|
$
|
998
|
|
|
1.5
|
%
|
Automotive
|
2,156
|
|
|
474
|
|
|
73
|
|
|
2,703
|
|
|
4.3
|
|
||||
Business products
|
1,845
|
|
|
148
|
|
|
52
|
|
|
2,045
|
|
|
3.3
|
|
||||
Business services
|
2,711
|
|
|
158
|
|
|
245
|
|
|
3,114
|
|
|
5.0
|
|
||||
Commercial real estate
|
5,595
|
|
|
10,392
|
|
|
23
|
|
|
16,010
|
|
|
25.5
|
|
||||
Construction materials and contractors
|
1,693
|
|
|
320
|
|
|
162
|
|
|
2,175
|
|
|
3.5
|
|
||||
Consumer discretionary
|
3,646
|
|
|
565
|
|
|
542
|
|
|
4,753
|
|
|
7.6
|
|
||||
Consumer services
|
3,005
|
|
|
937
|
|
|
262
|
|
|
4,204
|
|
|
6.7
|
|
||||
Equipment
|
1,505
|
|
|
137
|
|
|
118
|
|
|
1,760
|
|
|
2.8
|
|
||||
Financial
|
4,081
|
|
|
62
|
|
|
341
|
|
|
4,484
|
|
|
7.1
|
|
||||
Healthcare
|
3,246
|
|
|
2,233
|
|
|
389
|
|
|
5,868
|
|
|
9.4
|
|
||||
Materials manufacturing and mining
|
1,819
|
|
|
113
|
|
|
133
|
|
|
2,065
|
|
|
3.3
|
|
||||
Media
|
364
|
|
|
21
|
|
|
42
|
|
|
427
|
|
|
.7
|
|
||||
Oil and gas
|
1,095
|
|
|
21
|
|
|
51
|
|
|
1,167
|
|
|
1.9
|
|
||||
Public exposure
|
2,783
|
|
|
52
|
|
|
1,055
|
|
|
3,890
|
|
|
6.2
|
|
||||
Technology
|
579
|
|
|
3
|
|
|
8
|
|
|
590
|
|
|
.9
|
|
||||
Transportation
|
1,418
|
|
|
242
|
|
|
890
|
|
|
2,550
|
|
|
4.1
|
|
||||
Utilities
|
3,067
|
|
|
6
|
|
|
340
|
|
|
3,413
|
|
|
5.4
|
|
||||
Other
|
509
|
|
|
8
|
|
|
—
|
|
|
517
|
|
|
.8
|
|
||||
Total
|
$
|
41,859
|
|
|
$
|
16,048
|
|
|
$
|
4,826
|
|
|
$
|
62,733
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Geographic Region
|
|
Total
|
Percent of
Total
|
Construction
|
Commercial
Mortgage
|
||||||||||||||||||||||||||
dollars in millions
|
West
|
Southwest
|
Central
|
Midwest
|
Southeast
|
Northeast
|
National
|
|||||||||||||||||||||||||
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Nonowner-occupied:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Retail properties
|
$
|
158
|
|
$
|
129
|
|
$
|
115
|
|
$
|
184
|
|
$
|
195
|
|
$
|
775
|
|
$
|
355
|
|
$
|
1,911
|
|
12.0
|
%
|
$
|
173
|
|
$
|
1,738
|
|
Multifamily properties
|
407
|
|
278
|
|
817
|
|
424
|
|
952
|
|
1,922
|
|
298
|
|
5,098
|
|
32.1
|
|
1,099
|
|
3,999
|
|
||||||||||
Health facilities
|
79
|
|
—
|
|
55
|
|
135
|
|
190
|
|
773
|
|
622
|
|
1,854
|
|
11.7
|
|
30
|
|
1,824
|
|
||||||||||
Office buildings
|
253
|
|
14
|
|
92
|
|
119
|
|
152
|
|
992
|
|
65
|
|
1,687
|
|
10.6
|
|
94
|
|
1,593
|
|
||||||||||
Warehouses
|
92
|
|
25
|
|
17
|
|
39
|
|
57
|
|
347
|
|
100
|
|
677
|
|
4.2
|
|
79
|
|
598
|
|
||||||||||
Manufacturing facilities
|
21
|
|
—
|
|
15
|
|
21
|
|
24
|
|
69
|
|
67
|
|
217
|
|
1.4
|
|
13
|
|
204
|
|
||||||||||
Hotels/Motels
|
39
|
|
—
|
|
29
|
|
—
|
|
4
|
|
185
|
|
31
|
|
288
|
|
1.8
|
|
4
|
|
284
|
|
||||||||||
Residential properties
|
1
|
|
—
|
|
—
|
|
4
|
|
19
|
|
165
|
|
—
|
|
189
|
|
1.2
|
|
76
|
|
113
|
|
||||||||||
Land and development
|
23
|
|
—
|
|
5
|
|
3
|
|
1
|
|
61
|
|
—
|
|
93
|
|
.6
|
|
69
|
|
24
|
|
||||||||||
Other
|
36
|
|
8
|
|
37
|
|
40
|
|
2
|
|
341
|
|
164
|
|
628
|
|
3.9
|
|
19
|
|
609
|
|
||||||||||
Total nonowner-occupied
|
1,109
|
|
454
|
|
1,182
|
|
969
|
|
1,596
|
|
5,630
|
|
1,702
|
|
12,642
|
|
79.5
|
|
1,656
|
|
10,986
|
|
||||||||||
Owner-occupied
|
846
|
|
13
|
|
251
|
|
530
|
|
40
|
|
1,576
|
|
—
|
|
3,256
|
|
20.5
|
|
80
|
|
3,176
|
|
||||||||||
Total
|
$
|
1,955
|
|
$
|
467
|
|
$
|
1,433
|
|
$
|
1,499
|
|
$
|
1,636
|
|
$
|
7,206
|
|
$
|
1,702
|
|
15,898
|
|
100.0
|
%
|
$
|
1,736
|
|
$
|
14,162
|
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total
|
$
|
2,071
|
|
$
|
387
|
|
$
|
1,320
|
|
$
|
1,730
|
|
$
|
1,939
|
|
$
|
7,758
|
|
$
|
843
|
|
$
|
16,048
|
|
|
$
|
1,960
|
|
$
|
14,088
|
|
|
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Nonowner-occupied:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Nonperforming loans
|
—
|
|
—
|
|
—
|
|
$
|
1
|
|
$
|
10
|
|
$
|
9
|
|
|
|
$
|
20
|
|
N/M
|
|
—
|
|
$
|
20
|
|
|||||
Accruing loans past due 90 days or more
|
$
|
8
|
|
—
|
|
—
|
|
—
|
|
—
|
|
19
|
|
—
|
|
27
|
|
N/M
|
|
8
|
|
19
|
|
|||||||||
Accruing loans past due 30 through 89 days
|
9
|
|
—
|
|
—
|
|
7
|
|
1
|
|
49
|
|
62
|
|
128
|
|
N/M
|
|
$
|
2
|
|
126
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
West –
|
Alaska, California, Hawaii, Idaho, Montana, Oregon, Washington, and Wyoming
|
Southwest –
|
Arizona, Nevada, and New Mexico
|
Central –
|
Arkansas, Colorado, Oklahoma, Texas, and Utah
|
Midwest –
|
Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin
|
Southeast –
|
Alabama, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, Washington D.C., and West Virginia
|
Northeast –
|
Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont
|
National –
|
Accounts in three or more regions
|
June 30, 2018
|
Real estate — residential mortgage
|
Home equity loans
|
Consumer direct loans
|
Credit cards
|
Consumer indirect loans
|
Total
|
||||||||||||
State
|
|
|
|
|
|
|
||||||||||||
New York
|
$
|
1,164
|
|
$
|
2,995
|
|
$
|
386
|
|
$
|
395
|
|
$
|
741
|
|
$
|
5,681
|
|
Ohio
|
439
|
|
1,591
|
|
387
|
|
244
|
|
375
|
|
3,036
|
|
||||||
Washington
|
671
|
|
1,758
|
|
224
|
|
100
|
|
13
|
|
2,766
|
|
||||||
Pennsylvania
|
293
|
|
763
|
|
72
|
|
47
|
|
242
|
|
1,417
|
|
||||||
California
|
51
|
|
31
|
|
13
|
|
4
|
|
46
|
|
145
|
|
||||||
Connecticut
|
1,160
|
|
406
|
|
22
|
|
21
|
|
148
|
|
1,757
|
|
||||||
Colorado
|
235
|
|
519
|
|
78
|
|
34
|
|
2
|
|
868
|
|
||||||
Oregon
|
348
|
|
917
|
|
85
|
|
44
|
|
3
|
|
1,397
|
|
||||||
Texas
|
1
|
|
17
|
|
8
|
|
3
|
|
21
|
|
50
|
|
||||||
Massachusetts
|
246
|
|
51
|
|
21
|
|
5
|
|
325
|
|
648
|
|
||||||
Other
|
844
|
|
2,471
|
|
489
|
|
197
|
|
1,480
|
|
5,481
|
|
||||||
Total
|
$
|
5,452
|
|
$
|
11,519
|
|
$
|
1,785
|
|
$
|
1,094
|
|
$
|
3,396
|
|
$
|
23,246
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2017
|
|
|
|
|
|
|
||||||||||||
Total
|
$
|
5,483
|
|
$
|
12,028
|
|
$
|
1,794
|
|
$
|
1,106
|
|
$
|
3,261
|
|
$
|
23,672
|
|
|
|
|
|
|
|
|
in millions
|
Commercial
|
Commercial
Real Estate
|
Commercial Lease Financing
|
Residential
Real Estate
|
Total
|
||||||||||
2018
|
|
|
|
|
|
||||||||||
Second quarter
|
$
|
253
|
|
$
|
2,266
|
|
$
|
144
|
|
$
|
308
|
|
$
|
2,971
|
|
First quarter
|
141
|
|
2,251
|
|
66
|
|
284
|
|
2,742
|
|
|||||
Total
|
$
|
394
|
|
$
|
4,517
|
|
$
|
210
|
|
$
|
592
|
|
$
|
5,713
|
|
2017
|
|
|
|
|
|
||||||||||
Fourth quarter
|
$
|
88
|
|
$
|
3,394
|
|
$
|
81
|
|
$
|
275
|
|
$
|
3,838
|
|
Third quarter
|
337
|
|
2,534
|
|
93
|
|
279
|
|
3,243
|
|
|||||
Second quarter
|
205
|
|
2,097
|
|
14
|
|
230
|
|
2,546
|
|
|||||
First quarter
|
49
|
|
2,011
|
|
83
|
|
194
|
|
2,337
|
|
|||||
Total
|
$
|
679
|
|
$
|
10,036
|
|
$
|
271
|
|
$
|
978
|
|
$
|
11,964
|
|
|
|
|
|
|
|
in millions
|
June 30, 2018
|
|
March 31, 2018
|
|
December 31, 2017
|
|
September 30, 2017
|
|
June 30, 2017
|
|
|||||
Commercial real estate loans
|
$
|
256,062
|
|
$
|
246,089
|
|
$
|
238,718
|
|
$
|
224,361
|
|
$
|
218,667
|
|
Residential mortgage
|
4,893
|
|
4,585
|
|
4,582
|
|
4,458
|
|
4,345
|
|
|||||
Education loans
|
845
|
|
888
|
|
932
|
|
974
|
|
1,019
|
|
|||||
Commercial lease financing
|
915
|
|
873
|
|
862
|
|
856
|
|
833
|
|
|||||
Commercial loans
|
518
|
|
498
|
|
488
|
|
458
|
|
446
|
|
|||||
Total
|
$
|
263,233
|
|
$
|
252,933
|
|
$
|
245,582
|
|
$
|
231,107
|
|
$
|
225,310
|
|
|
|
|
|
|
|
in millions
|
June 30, 2018
|
December 31, 2017
|
||||
FHLMC
|
$
|
5,635
|
|
$
|
5,897
|
|
FNMA
|
10,336
|
|
10,328
|
|
||
GNMA
|
13,485
|
|
13,543
|
|
||
Total
(a)
|
$
|
29,456
|
|
$
|
29,768
|
|
|
|
|
(a)
|
Includes securities held in the available-for-sale and held-to-maturity portfolios.
|
dollars in millions
|
U.S. Treasury, Agencies, and Corporations
|
States and
Political
Subdivisions
|
Agency Residential Collateralized Mortgage Obligations
(a)
|
Agency Residential Mortgage-backed Securities
(a)
|
Agency Commercial Mortgage-backed Securities
(a)
|
Other Securities
|
Total
|
Weighted-Average Yield
(b)
|
|||||||||||||||
June 30, 2018
|
|
|
|
|
|
|
|
|
|||||||||||||||
Remaining maturity:
|
|
|
|
|
|
|
|
|
|||||||||||||||
One year or less
|
—
|
|
$
|
2
|
|
$
|
96
|
|
$
|
15
|
|
—
|
|
—
|
|
$
|
113
|
|
3.30
|
%
|
|||
After one through five years
|
$
|
144
|
|
5
|
|
8,376
|
|
1,206
|
|
$
|
1,851
|
|
$
|
20
|
|
11,602
|
|
2.11
|
|
||||
After five through ten years
|
1
|
|
—
|
|
5,422
|
|
131
|
|
82
|
|
—
|
|
5,636
|
|
2.43
|
|
|||||||
After ten years
|
1
|
|
—
|
|
—
|
|
15
|
|
—
|
|
—
|
|
16
|
|
3.05
|
|
|||||||
Fair value
|
$
|
146
|
|
$
|
7
|
|
$
|
13,894
|
|
$
|
1,367
|
|
$
|
1,933
|
|
$
|
20
|
|
$
|
17,367
|
|
—
|
|
Amortized cost
|
150
|
|
7
|
|
14,435
|
|
1,407
|
|
2,041
|
|
17
|
|
18,057
|
|
2.23
|
%
|
|||||||
Weighted-average yield
(b)
|
1.78
|
%
|
5.26
|
%
|
2.22
|
%
|
2.21
|
%
|
2.33
|
%
|
—
|
|
2.23
|
%
|
—
|
|
|||||||
Weighted-average maturity
|
3.9 years
|
|
1.6 years
|
|
4.8 years
|
|
4.1 years
|
|
4.0 years
|
|
2.4 years
|
|
4.6 years
|
|
—
|
|
|||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|||||||||||||||
Fair value
|
$
|
157
|
|
$
|
9
|
|
$
|
14,660
|
|
$
|
1,439
|
|
$
|
1,854
|
|
$
|
20
|
|
$
|
18,139
|
|
—
|
|
Amortized cost
|
159
|
|
9
|
|
14,985
|
|
1,456
|
|
1,920
|
|
17
|
|
18,546
|
|
2.09
|
%
|
(a)
|
Maturity is based upon expected average lives rather than contractual terms.
|
(b)
|
Weighted-average yields are calculated based on amortized cost. Such yields have been adjusted to a TE basis using the statutory federal income tax rate in effect that calendar year.
|
dollars in millions
|
Agency Residential Collateralized Mortgage Obligations
(a)
|
Agency Residential Mortgage-backed Securities
(a)
|
Agency Commercial Mortgage-backed Securities
(a)
|
Other
Securities
|
Total
|
Weighted-Average Yield
(b)
|
|||||||||||
June 30, 2018
|
|
|
|
|
|
|
|||||||||||
Remaining maturity:
|
|
|
|
|
|
|
|||||||||||
One year or less
|
$
|
34
|
|
—
|
|
—
|
|
$
|
9
|
|
$
|
43
|
|
2.36
|
%
|
||
After one through five years
|
4,569
|
|
—
|
|
$
|
2,078
|
|
6
|
|
6,653
|
|
2.38
|
|
||||
After five through ten years
|
3,096
|
|
$
|
531
|
|
1,954
|
|
—
|
|
5,581
|
|
2.41
|
|
||||
After ten years
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Amortized cost
|
$
|
7,699
|
|
$
|
531
|
|
$
|
4,032
|
|
$
|
15
|
|
$
|
12,277
|
|
2.39
|
%
|
Fair value
|
7,328
|
|
514
|
|
3,878
|
|
15
|
|
11,735
|
|
—
|
|
|||||
Weighted-average yield
|
2.10
|
%
|
2.69
|
%
|
2.92
|
%
|
2.85
|
%
|
2.39
|
%
|
—
|
|
|||||
Weighted-average maturity
|
4.8 years
|
|
6.5 years
|
|
6.3 years
|
|
1.1 years
|
|
5.3 years
|
|
—
|
|
|||||
December 31, 2017
|
|
|
|
|
|
|
|||||||||||
Amortized cost
|
$
|
8,055
|
|
$
|
574
|
|
$
|
3,186
|
|
$
|
15
|
|
$
|
11,830
|
|
2.27
|
%
|
Fair value
|
7,831
|
|
571
|
|
3,148
|
|
15
|
|
11,565
|
|
—
|
|
(a)
|
Maturity is based upon expected average lives rather than contractual terms.
|
(b)
|
Weighted-average yields are calculated based on amortized cost. Such yields have been adjusted to a TE basis using the statutory federal income tax rate in effect that calendar year.
|
|
2018
|
|
2017
|
||||||||
in thousands
|
Second
|
|
First
|
|
|
Fourth
|
|
Third
|
|
Second
|
|
Shares outstanding at beginning of period
|
1,064,939
|
|
1,069,084
|
|
|
1,079,039
|
|
1,092,739
|
|
1,097,479
|
|
Open market repurchases and return of shares under employee compensation plans
|
(6,259
|
)
|
(9,399
|
)
|
|
(10,617
|
)
|
(15,298
|
)
|
(5,072
|
)
|
Shares issued under employee compensation plans (net of cancellations)
|
264
|
|
5,254
|
|
|
662
|
|
1,598
|
|
332
|
|
Shares outstanding at end of period
|
1,058,944
|
|
1,064,939
|
|
|
1,069,084
|
|
1,079,039
|
|
1,092,739
|
|
|
|
|
|
|
|
|
|
dollars in millions
|
June 30, 2018
|
December 31, 2017
|
||||
COMMON EQUITY TIER 1
|
|
|
|||||
Key shareholders’ equity (GAAP)
|
$
|
15,100
|
|
$
|
15,023
|
|
|
Less:
|
Preferred Stock
(a)
|
1,009
|
|
1,009
|
|
||
|
Common Equity Tier 1 capital before adjustments and deductions
|
14,091
|
|
14,014
|
|
||
Less:
|
Goodwill, net of deferred taxes
|
2,464
|
|
2,495
|
|
||
|
Intangible assets, net of deferred taxes
|
287
|
|
266
|
|
||
|
Deferred tax assets
|
64
|
|
2
|
|
||
|
Net unrealized gains (losses) on available-for-sale securities, net of deferred taxes
|
(527
|
)
|
(311
|
)
|
||
|
Accumulated gains (losses) on cash flow hedges, net of deferred taxes
|
(209
|
)
|
(122
|
)
|
||
|
Amounts in AOCI attributed to pension and postretirement benefit costs, net of deferred taxes
|
(386
|
)
|
(391
|
)
|
||
|
Total Common Equity Tier 1 capital
|
$
|
12,398
|
|
$
|
12,075
|
|
TIER 1 CAPITAL
|
|
|
|||||
Common Equity Tier 1
|
$
|
12,398
|
|
$
|
12,075
|
|
|
Additional Tier 1 capital instruments and related surplus
|
1,009
|
|
1,009
|
|
|||
Less:
|
Deductions
|
—
|
|
1
|
|
||
|
Total Tier 1 capital
|
13,407
|
|
13,083
|
|
||
TIER 2 CAPITAL
|
|
|
|||||
Tier 2 capital instruments and related surplus
|
1,343
|
|
1,310
|
|
|||
Allowance for losses on loans and liability for losses on lending-related commitments
(b)
|
961
|
|
952
|
|
|||
Less:
|
Deductions
|
—
|
|
—
|
|
||
|
Total Tier 2 capital
|
2,304
|
|
2,262
|
|
||
|
Total risk-based capital
|
$
|
15,711
|
|
$
|
15,345
|
|
RISK-WEIGHTED ASSETS
|
|
|
|||||
Risk-weighted assets on balance sheet
|
$
|
96,845
|
|
$
|
94,735
|
|
|
Risk-weighted off-balance sheet exposure
|
24,314
|
|
23,058
|
|
|||
Market risk-equivalent assets
|
1,280
|
|
1,019
|
|
|||
Gross risk-weighted assets
|
122,439
|
|
118,812
|
|
|||
Less:
|
Excess allowance for loan and lease losses
|
—
|
|
—
|
|
||
|
Net risk-weighted assets
|
$
|
122,439
|
|
$
|
118,812
|
|
AVERAGE QUARTERLY TOTAL ASSETS
|
$
|
135,812
|
|
$
|
134,484
|
|
|
CAPITAL RATIOS
|
|
|
|||||
Tier 1 risk-based capital
|
10.95
|
%
|
11.01
|
%
|
|||
Total risk-based capital
|
12.83
|
|
12.92
|
|
|||
Leverage
(c)
|
9.87
|
|
9.73
|
|
|||
Common Equity Tier 1
|
10.13
|
|
10.16
|
|
|||
|
|
|
|
(a)
|
Net of capital surplus.
|
(b)
|
The ALLL included in Tier 2 capital is limited by regulation to 1.25% of the institution’s standardized total risk-weighted assets (excluding its standardized market risk-weighted assets). The ALLL includes
$14 million
and $16 million of allowance classified as “discontinued assets” on the balance sheet at
June 30, 2018
, and
December 31, 2017
, respectively.
|
(c)
|
This ratio is Tier 1 capital divided by average quarterly total assets as defined by the Federal Reserve less: (i) goodwill, (ii) the disallowed intangible and deferred tax assets, and (iii) other deductions from assets for leverage capital purposes.
|
|
2018
|
|
2017
|
||||||||||||||||||||||
|
Three months ended June 30,
|
|
|
Three months ended June 30,
|
|
||||||||||||||||||||
in millions
|
High
|
|
Low
|
|
Mean
|
|
June 30,
|
|
|
High
|
|
Low
|
|
Mean
|
|
June 30,
|
|||||||||
Trading account assets:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed income
|
$
|
1.2
|
|
$
|
.6
|
|
$
|
.8
|
|
$
|
.9
|
|
|
$
|
1.3
|
|
$
|
.4
|
|
$
|
.7
|
|
$
|
.6
|
|
Derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate
|
$
|
.1
|
|
—
|
|
$
|
.1
|
|
$
|
.1
|
|
|
$
|
.1
|
|
$
|
.1
|
|
$
|
.1
|
|
$
|
.1
|
|
|
Credit
|
—
|
|
—
|
|
—
|
|
—
|
|
|
1.5
|
|
.2
|
|
.6
|
|
.3
|
|
|
2018
|
|
2017
|
||||||||||||||||||||||
|
Three months ended June 30,
|
|
|
Three months ended June 30,
|
|
||||||||||||||||||||
in millions
|
High
|
|
Low
|
|
Mean
|
|
June 30,
|
|
|
High
|
|
Low
|
|
Mean
|
|
June 30,
|
|
||||||||
Trading account assets:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed income
|
$
|
6.2
|
|
$
|
4.1
|
|
$
|
5.3
|
|
$
|
4.2
|
|
|
$
|
4.0
|
|
$
|
1.7
|
|
$
|
2.7
|
|
$
|
2.9
|
|
Derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate
|
$
|
.5
|
|
$
|
.3
|
|
$
|
.4
|
|
$
|
.5
|
|
|
$
|
.3
|
|
$
|
.2
|
|
$
|
.2
|
|
$
|
.3
|
|
Credit
|
—
|
|
—
|
|
—
|
|
—
|
|
|
2.6
|
|
.4
|
|
1.1
|
|
.8
|
|
•
|
“Reprice risk”
is the exposure to changes in the level of interest rates and occurs when the volume of interest-bearing liabilities and the volume of interest-earning assets they fund (e.g., deposits used to fund loans) do not mature or reprice at the same time.
|
•
|
“Basis risk”
is the exposure to asymmetrical changes in interest rate indices and occurs when floating-rate assets and floating-rate liabilities reprice at the same time, but in response to different market factors or indexes.
|
•
|
“Yield curve risk”
is the exposure to nonparallel changes in the slope of the yield curve (where the yield curve depicts the relationship between the yield on a particular type of security and its term to maturity) and occurs when interest-bearing liabilities and the interest-earning assets that they fund do not price or reprice to the same term point on the yield curve.
|
•
|
“Option risk”
is the exposure to a customer or counterparty’s ability to take advantage of the interest rate environment and terminate or reprice one of our assets, liabilities, or off-balance sheet instruments prior to contractual maturity without a penalty. Option risk occurs when exposures to customer and counterparty early withdrawals or prepayments are not mitigated with an offsetting position or appropriate compensation.
|
|
June 30, 2018
|
June 30, 2017
|
||||||||
Basis point change assumption (short-term rates)
|
-175
|
|
|
+200
|
|
-125
|
|
|
+200
|
|
Tolerance level
|
-5.50
|
|
%
|
-5.50
|
%
|
-5.50
|
|
%
|
-5.50
|
%
|
Interest rate risk assessment
|
-5.30
|
|
%
|
1.90
|
%
|
-4.94
|
|
%
|
.91
|
%
|
|
June 30, 2018
|
|
|
|
|
|||||||||||||||
|
|
|
|
Weighted-Average
|
|
December 31, 2017
|
|
|||||||||||||
dollars in millions
|
Notional
Amount |
Fair
Value |
|
Maturity
(Years) |
Receive
Rate |
Pay
Rate |
|
Notional
Amount |
Fair
Value |
|
||||||||||
Receive fixed/pay variable — conventional A/LM
(a)
|
$
|
18,670
|
|
$
|
(244
|
)
|
|
2.1
|
1.7
|
%
|
2.0
|
%
|
|
$
|
16,425
|
|
$
|
(126
|
)
|
|
Receive fixed/pay variable — conventional debt
|
10,141
|
|
(104
|
)
|
|
3.2
|
1.9
|
|
1.9
|
|
|
9,691
|
|
(9
|
)
|
|
||||
Floors — conventional A/LM
|
10
|
|
—
|
|
|
.8
|
2.0
|
|
—
|
|
|
—
|
|
—
|
|
|
||||
Pay fixed/receive variable — conventional debt
|
50
|
|
(3
|
)
|
|
10
|
2.3
|
|
3.6
|
|
|
50
|
|
(6
|
)
|
|
||||
Total portfolio swaps
|
$
|
28,871
|
|
$
|
(351
|
)
|
(b)
|
2.5
|
1.7
|
%
|
2.0
|
%
|
|
$
|
26,166
|
|
$
|
(141
|
)
|
(b)
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Portfolio swaps designated as A/LM are used to manage interest rate risk tied to both assets and liabilities.
|
(b)
|
Excludes accrued interest of
$385 million
and
$176 million
at
June 30, 2018
, and
December 31, 2017
, respectively.
|
June 30, 2018
|
Short-Term
Borrowings
|
Long-Term
Deposits
|
Senior
Long-Term
Debt
|
Subordinated
Long-Term
Debt
|
Capital
Securities
|
Preferred
Stock
|
KEYCORP (THE PARENT COMPANY)
|
|
|
|
|
|
|
Standard & Poor’s
|
A-2
|
N/A
|
BBB+
|
BBB
|
BB+
|
BB+
|
Moody’s
|
P-2
|
N/A
|
Baa1
|
Baa1
|
Baa2
|
Baa3
|
Fitch Ratings, Inc.
|
F1
|
N/A
|
A-
|
BBB+
|
BB+
|
BB
|
DBRS, Inc.
|
R-1 (low)
|
N/A
|
A (low)
|
BBB (high)
|
BBB (high)
|
BBB (low)
|
|
|
|
|
|
|
|
KEYBANK
|
|
|
|
|
|
|
Standard & Poor’s
|
A-2
|
N/A
|
A-
|
BBB+
|
N/A
|
N/A
|
Moody’s
|
P-2
|
Aa3
|
A3
|
Baa1
|
N/A
|
N/A
|
Fitch Ratings, Inc.
|
F1
|
A
|
A-
|
BBB+
|
N/A
|
N/A
|
DBRS, Inc.
|
R-1 (low)
|
A
|
A
|
A (low)
|
N/A
|
N/A
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||
dollars in millions
|
Amount
|
Percent of
Allowance to
Total Allowance
|
Percent of
Loan Type to
Total Loans
|
|
Amount
|
Percent of
Allowance to
Total Allowance
|
Percent of
Loan Type to
Total Loans
|
||||||||
Commercial and industrial
|
$
|
542
|
|
61.1
|
%
|
50.5
|
%
|
|
$
|
529
|
|
60.3
|
%
|
48.4
|
%
|
Commercial real estate:
|
|
|
|
|
|
|
|
||||||||
Commercial mortgage
|
139
|
|
15.7
|
|
16.1
|
|
|
133
|
|
15.2
|
|
16.3
|
|
||
Construction
|
28
|
|
3.1
|
|
2.0
|
|
|
30
|
|
3.4
|
|
2.3
|
|
||
Total commercial real estate loans
|
167
|
|
18.8
|
|
18.1
|
|
|
163
|
|
18.6
|
|
18.6
|
|
||
Commercial lease financing
|
40
|
|
4.5
|
|
5.1
|
|
|
43
|
|
4.9
|
|
5.6
|
|
||
Total commercial loans
|
749
|
|
84.4
|
|
73.7
|
|
|
735
|
|
83.8
|
|
72.6
|
|
||
Real estate — residential mortgage
|
10
|
|
1.1
|
|
6.2
|
|
|
7
|
|
.8
|
|
6.3
|
|
||
Home equity loans
|
37
|
|
4.2
|
|
13.1
|
|
|
43
|
|
4.9
|
|
13.9
|
|
||
Consumer direct loans
|
26
|
|
2.9
|
|
2.0
|
|
|
28
|
|
3.2
|
|
2.1
|
|
||
Credit cards
|
46
|
|
5.2
|
|
1.2
|
|
|
44
|
|
5.0
|
|
1.3
|
|
||
Consumer indirect loans
|
19
|
|
2.2
|
|
3.8
|
|
|
20
|
|
2.3
|
|
3.8
|
|
||
Total consumer loans
|
138
|
|
15.6
|
|
26.3
|
|
|
142
|
|
16.2
|
|
27.4
|
|
||
Total loans
(a)
|
$
|
887
|
|
100.0
|
%
|
100.0
|
%
|
|
$
|
877
|
|
100.0
|
%
|
100.0
|
%
|
|
|
|
|
|
|
|
|
(a)
|
Excludes allocations of the ALLL related to the discontinued operations of the education lending business in the amount of
$14 million
at
June 30, 2018
, and $16 million at
December 31, 2017
.
|
|
2018
|
|
2017
|
|||||||||||||
dollars in millions
|
Second
|
|
First
|
|
|
Fourth
|
|
Third
|
|
Second
|
|
|||||
Commercial and industrial
|
$
|
32
|
|
$
|
31
|
|
|
$
|
24
|
|
$
|
4
|
|
$
|
38
|
|
Real estate — Commercial mortgage
|
1
|
|
1
|
|
|
1
|
|
5
|
|
3
|
|
|||||
Real estate — Construction
|
—
|
|
(1
|
)
|
|
—
|
|
2
|
|
—
|
|
|||||
Commercial lease financing
|
4
|
|
—
|
|
|
4
|
|
(2
|
)
|
1
|
|
|||||
Total commercial loans
|
37
|
|
31
|
|
|
29
|
|
9
|
|
42
|
|
|||||
Real estate — Residential mortgage
|
—
|
|
1
|
|
|
1
|
|
(1
|
)
|
3
|
|
|||||
Home equity loans
|
3
|
|
1
|
|
|
4
|
|
2
|
|
4
|
|
|||||
Consumer direct loans
|
7
|
|
6
|
|
|
6
|
|
7
|
|
6
|
|
|||||
Credit cards
|
10
|
|
11
|
|
|
9
|
|
10
|
|
10
|
|
|||||
Consumer indirect loans
|
3
|
|
4
|
|
|
3
|
|
5
|
|
1
|
|
|||||
Total consumer loans
|
23
|
|
23
|
|
|
23
|
|
23
|
|
24
|
|
|||||
Total net loan charge-offs
|
$
|
60
|
|
$
|
54
|
|
|
$
|
52
|
|
$
|
32
|
|
$
|
66
|
|
Net loan charge-offs to average loans
|
.27
|
%
|
.25
|
%
|
|
.24
|
%
|
.15
|
%
|
.31
|
%
|
|||||
Net loan charge-offs from discontinued operations — education lending business
|
$
|
2
|
|
$
|
2
|
|
|
$
|
4
|
|
$
|
8
|
|
$
|
2
|
|
(a)
|
Credit amounts indicate that recoveries exceeded charge-offs.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||
dollars in millions
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
||||
Average loans outstanding
|
$
|
88,644
|
|
$
|
86,502
|
|
|
$
|
87,790
|
|
$
|
86,318
|
|
Allowance for loan and lease losses at beginning of period
|
$
|
881
|
|
$
|
870
|
|
|
$
|
877
|
|
$
|
858
|
|
Loans charged off:
|
|
|
|
|
|
||||||||
Commercial and industrial
|
39
|
|
40
|
|
|
76
|
|
72
|
|
||||
Real estate — commercial mortgage
|
2
|
|
3
|
|
|
3
|
|
3
|
|
||||
Real estate — construction
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||
Commercial lease financing
|
4
|
|
1
|
|
|
5
|
|
8
|
|
||||
Total commercial loans
|
45
|
|
44
|
|
|
84
|
|
83
|
|
||||
Real estate — residential mortgage
|
—
|
|
4
|
|
|
1
|
|
2
|
|
||||
Home equity loans
|
6
|
|
9
|
|
|
10
|
|
17
|
|
||||
Consumer direct loans
|
9
|
|
8
|
|
|
17
|
|
18
|
|
||||
Credit cards
|
12
|
|
12
|
|
|
24
|
|
23
|
|
||||
Consumer indirect loans
|
7
|
|
5
|
|
|
15
|
|
16
|
|
||||
Total consumer loans
|
34
|
|
38
|
|
|
67
|
|
76
|
|
||||
Total loans charged off
|
79
|
|
82
|
|
|
151
|
|
159
|
|
||||
Recoveries:
|
|
|
|
|
|
||||||||
Commercial and industrial
|
7
|
|
2
|
|
|
13
|
|
7
|
|
||||
Real estate — commercial mortgage
|
1
|
|
—
|
|
|
1
|
|
—
|
|
||||
Real estate — construction
|
—
|
|
—
|
|
|
1
|
|
1
|
|
||||
Commercial lease financing
|
—
|
|
—
|
|
|
1
|
|
2
|
|
||||
Total commercial loans
|
8
|
|
2
|
|
|
16
|
|
10
|
|
||||
Real estate — residential mortgage
|
—
|
|
1
|
|
|
—
|
|
3
|
|
||||
Home equity loans
|
3
|
|
5
|
|
|
6
|
|
8
|
|
||||
Consumer direct loans
|
2
|
|
2
|
|
|
4
|
|
3
|
|
||||
Credit cards
|
2
|
|
2
|
|
|
3
|
|
3
|
|
||||
Consumer indirect loans
|
4
|
|
4
|
|
|
8
|
|
8
|
|
||||
Total consumer loans
|
11
|
|
14
|
|
|
21
|
|
25
|
|
||||
Total recoveries
|
19
|
|
16
|
|
|
37
|
|
35
|
|
||||
Net loan charge-offs
|
(60
|
)
|
(66
|
)
|
|
(114
|
)
|
(124
|
)
|
||||
Provision (credit) for loan and lease losses
|
66
|
|
66
|
|
|
124
|
|
136
|
|
||||
Allowance for loan and lease losses at end of period
|
$
|
887
|
|
$
|
870
|
|
|
$
|
887
|
|
$
|
870
|
|
Liability for credit losses on lending-related commitments at beginning of period
|
$
|
60
|
|
$
|
48
|
|
|
$
|
57
|
|
$
|
55
|
|
Provision (credit) for losses on lending-related commitments
|
(2
|
)
|
—
|
|
|
1
|
|
(7
|
)
|
||||
Liability for credit losses on lending-related commitments at end of period
(a)
|
$
|
58
|
|
$
|
48
|
|
|
$
|
58
|
|
$
|
48
|
|
Total allowance for credit losses at end of period
|
$
|
945
|
|
$
|
918
|
|
|
$
|
945
|
|
$
|
918
|
|
Net loan charge-offs to average total loans
|
.27
|
%
|
.31
|
%
|
|
.26
|
%
|
.29
|
%
|
||||
Allowance for loan and lease losses to period-end loans
|
1.01
|
|
1.01
|
|
|
1.01
|
|
1.01
|
|
||||
Allowance for credit losses to period-end loans
|
1.07
|
|
1.06
|
|
|
1.07
|
|
1.06
|
|
||||
Allowance for loan and lease losses to nonperforming loans
|
162.8
|
|
171.6
|
|
|
162.8
|
|
171.6
|
|
||||
Allowance for credit losses to nonperforming loans
|
173.4
|
|
181.1
|
|
|
173.4
|
|
181.1
|
|
||||
|
|
|
|
|
|
||||||||
Discontinued operations — education lending business:
|
|
|
|
|
|
||||||||
Loans charged off
|
$
|
3
|
|
$
|
4
|
|
|
$
|
7
|
|
$
|
10
|
|
Recoveries
|
1
|
|
2
|
|
|
3
|
|
4
|
|
||||
Net loan charge-offs
|
$
|
(2
|
)
|
$
|
(2
|
)
|
|
$
|
(4
|
)
|
$
|
(6
|
)
|
|
|
|
|
|
|
(a)
|
Included in “accrued expense and other liabilities” on the balance sheet.
|
dollars in millions
|
June 30, 2018
|
|
March 31, 2018
|
|
December 31, 2017
|
|
September 30, 2017
|
|
June 30, 2017
|
|
|||||
Commercial and industrial
|
$
|
178
|
|
$
|
189
|
|
$
|
153
|
|
$
|
169
|
|
$
|
178
|
|
Real estate — commercial mortgage
|
42
|
|
33
|
|
30
|
|
30
|
|
34
|
|
|||||
Real estate — construction
|
2
|
|
2
|
|
2
|
|
2
|
|
4
|
|
|||||
Total commercial real estate loans
(a)
|
44
|
|
35
|
|
32
|
|
32
|
|
38
|
|
|||||
Commercial lease financing
|
21
|
|
5
|
|
6
|
|
11
|
|
11
|
|
|||||
Total commercial loans
(b)
|
243
|
|
229
|
|
191
|
|
212
|
|
227
|
|
|||||
Real estate — residential mortgage
|
55
|
|
59
|
|
58
|
|
57
|
|
58
|
|
|||||
Home equity loans
|
222
|
|
229
|
|
229
|
|
227
|
|
208
|
|
|||||
Consumer direct loans
|
4
|
|
4
|
|
4
|
|
3
|
|
2
|
|
|||||
Credit cards
|
2
|
|
2
|
|
2
|
|
2
|
|
2
|
|
|||||
Consumer indirect loans
|
19
|
|
18
|
|
19
|
|
16
|
|
10
|
|
|||||
Total consumer loans
|
302
|
|
312
|
|
312
|
|
305
|
|
280
|
|
|||||
Total nonperforming loans
(c)
|
545
|
|
541
|
|
503
|
|
517
|
|
507
|
|
|||||
OREO
|
26
|
|
28
|
|
31
|
|
39
|
|
48
|
|
|||||
Other nonperforming assets
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
|||||
Total nonperforming assets
(c)
|
$
|
571
|
|
$
|
569
|
|
$
|
534
|
|
$
|
556
|
|
$
|
556
|
|
Accruing loans past due 90 days or more
|
$
|
103
|
|
$
|
82
|
|
$
|
89
|
|
$
|
86
|
|
$
|
85
|
|
Accruing loans past due 30 through 89 days
|
429
|
|
305
|
|
359
|
|
329
|
|
340
|
|
|||||
Restructured loans — accruing and nonaccruing
(d)
|
347
|
|
317
|
|
317
|
|
315
|
|
333
|
|
|||||
Restructured loans included in nonperforming loans
(d)
|
184
|
|
179
|
|
189
|
|
187
|
|
193
|
|
|||||
Nonperforming assets from discontinued operations — education lending business
|
6
|
|
6
|
|
7
|
|
8
|
|
5
|
|
|||||
Nonperforming loans to period-end portfolio loans
(c)
|
.62
|
%
|
.61
|
%
|
.58
|
%
|
.60
|
%
|
.59
|
%
|
|||||
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets
(c)
|
.65
|
|
.65
|
%
|
.62
|
%
|
.64
|
%
|
.64
|
%
|
(a)
|
See Figure
16
and the accompanying discussion in the “Loans and loans held for sale” section for more information related to our commercial real estate loan portfolio.
|
(b)
|
See Figure
15
and the accompanying discussion in the “Loans and loans held for sale” section for more information related to our commercial loan portfolio.
|
(c)
|
Nonperforming loan balances exclude
$629 million
,
$690 million
,
$738 million
,
$783 million
, and
$835 million
of PCI loans at
June 30, 2018
,
March 31, 2018
,
December 31, 2017
,
September 30, 2017
, and
June 30, 2017
, respectively.
|
(d)
|
Restructured loans (i.e., TDRs) are those for which Key, for reasons related to a borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. These concessions are made to improve the collectability of the loan and generally take the form of a reduction of the interest rate, extension of the maturity date or reduction in the principal balance.
|
|
2018
|
|
2017
|
|||||||||||||
in millions
|
Second
|
|
First
|
|
|
Fourth
|
|
Third
|
|
Second
|
|
|||||
Balance at beginning of period
|
$
|
541
|
|
$
|
503
|
|
|
$
|
517
|
|
$
|
507
|
|
$
|
573
|
|
Loans placed on nonaccrual status
|
175
|
|
182
|
|
|
137
|
|
181
|
|
143
|
|
|||||
Charge-offs
|
(78
|
)
|
(70
|
)
|
|
(67
|
)
|
(71
|
)
|
(82
|
)
|
|||||
Loans sold
|
(1
|
)
|
—
|
|
|
—
|
|
(1
|
)
|
—
|
|
|||||
Payments
|
(33
|
)
|
(29
|
)
|
|
(52
|
)
|
(32
|
)
|
(84
|
)
|
|||||
Transfers to OREO
|
(5
|
)
|
(4
|
)
|
|
(8
|
)
|
(10
|
)
|
(8
|
)
|
|||||
Transfers to other nonperforming assets
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|||||
Loans returned to accrual status
|
(54
|
)
|
(41
|
)
|
|
(24
|
)
|
(57
|
)
|
(35
|
)
|
|||||
Balance at end of period
(a)
|
$
|
545
|
|
$
|
541
|
|
|
$
|
503
|
|
$
|
517
|
|
$
|
507
|
|
|
|
|
|
|
|
|
(a)
|
Nonperforming loan balances exclude
$629 million
,
$690 million
,
$738 million
,
$783 million
, and
$835 million
of PCI loans at
June 30, 2018
,
March 31, 2018
,
December 31, 2017
,
September 30, 2017
, and
June 30, 2017
, respectively.
|
Standard
|
Required Adoption
|
Description
|
Effect on Financial Statements or
Other Significant Matters
|
ASU 2016-02, Leases (Topic 842)
ASU 2018-01, Leases (Topic 842): Land Easement Practical Expedient
ASU 2018-10 Codification Improvements to Topic 842
ASU 2018-11, Leases (Topic 842): Targeted Improvements
|
January 1, 2019
Early adoption is permitted
|
The ASU creates ASC Topic 842,
Leases
, and supersedes Topic 840,
Leases.
The ASU requires that a lessee recognize assets and liabilities for leases with lease terms of more than 12 months. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Leveraged leases that commenced before the effective date of the new guidance are grandfathered. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, the ASU will require both types of leases to be recognized on the balance sheet. It also requires enhanced disclosures to better understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. The guidance may be adopted using either a modified retrospective approach, measuring leases at the beginning of the earliest period presented, or adopted using a cumulative-effect adjustment to the opening balance of retained earnings at the adoption date.
|
Key has formed a cross-functional team to oversee the implementation of this ASU. Implementation efforts are ongoing, including review of our lease portfolios, consideration of available practical expedients, development of new lease accounting policies, the review of our service contracts for embedded leases, and deployment of a new lease software solution. Key is also putting internal controls in place to support the implementation of the lease standard. Key’s adoption of this ASU on January 1, 2019, will result in an increase in right-of-use assets and associated lease liabilities, arising from operating leases in which Key is the lessee, on our Consolidated Balance Sheet.
The amount of the right-of-use assets and associated lease liabilities recorded upon adoption will be based primarily on the present value of unpaid future minimum lease payments, the amount of which will depend on the population of leases in effect at the date of adoption. Key’s minimum future rental payments under noncancelable operating leases will be measured and recognized when the new guidance is adopted (refer to Note 22 (“Commitments, Contingent Liabilities, and Guarantees”) in our 2017 Form 10-K). While these leases represent a majority of the leases that are within scope of the new leasing standard, we continue to review service contracts to identify potential additional leases embedded in those arrangements that would be within the scope of the new standard. Between now and January 1, 2019, Key will likely have changes to the lease population as we continue to evaluate and execute branch and occupancy optimization initiatives. In addition to final determination of the lease population at the effective date, the initial measurement of the right-of-use asset and the corresponding liability will be affected by certain key assumptions such as expectations of renewals or extensions and the interest rate used to discount the future lease obligations. Up through the date of adoption, the evaluation of the impact of the standard will be adjusted based on new leases that are executed, leases that are terminated prior to the effective date, and any leases with changes to key assumptions or expectations such as renewals and extensions, and discount rates. We do not expect the adoption of this guidance to have a material impact on the recognition of operating lease expense in our Consolidated Statements of Income.
|
ASU 2017-08,
Premium
Amortization on
Purchased
Callable Debt
Securities
|
January 1, 2019
Early adoption is permitted.
|
The ASU amends ASC Topic 310-20,
Receivables
— Nonrefundable Fees and Other Costs
, and shortens the amortization period to the earliest call date for certain callable debt securities held at a premium. Securities held at a discount will continue to be amortized to maturity.
The guidance should be implemented on a modified retrospective basis using a cumulative-effect adjustment.
|
The adoption of this guidance is not expected to have a material effect on our financial condition or results of operations.
|
ASU 2016-13
Measurement of
Credit Losses on
Financial
Instruments
|
January 1, 2020
Early adoption is permitted as of January 1, 2019
|
The ASU amends ASC Topic 326,
Financial Instruments-Credit Losses,
and significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard replaces today’s “incurred loss” approach with an “expected loss” model for instruments such as loans and held-to-maturity securities that are measured at amortized cost. The standard requires credit losses relating to available-for-sale debt securities to be recorded through an allowance rather than a reduction of the carrying amount. It also changes the accounting for purchased credit-impaired debt securities and loans. The ASU retains many of the current disclosure requirements in current GAAP and expands certain disclosure requirements.
|
This new guidance will affect the accounting for our loans, debt securities held to maturity and available for sale, and liabilities for credit losses on unfunded lending-related commitments as well as purchased financial assets with a more-than-insignificant amount of credit deterioration since origination.
Key has formed cross-functional implementation working groups comprised of teams throughout Key, including finance, credit, and modeling. The implementation team has developed a detailed project plan, identified and documented certain key policy decisions, and determined modeling techniques and technology solutions to meet the requirements of the new guidance. Education sessions on the substantial changes caused by the standard are ongoing. The implementation working groups are currently designing the future state of the allowance for credit loss process, considering changes to the estimation, control, and governance processes. A parallel run of the accounting for expected credit losses is planned beginning in the first quarter of 2019.
Key expects that the new guidance will generally result in an increase in its allowance for credit losses for loans, unfunded lending-related commitments, and purchased financial assets with credit deterioration, as it will cover credit losses over the full remaining expected life of loans and commitments and will consider future changes in macroeconomic conditions. Since the magnitude of the anticipated increase in the allowance for credit losses will be impacted by economic conditions and trends in the Company’s portfolio at the time of adoption, the quantitative impact cannot yet be reasonably estimated. While we are still assessing the new standard, the adoption of this guidance is not anticipated to have a material impact on the available-for-sale debt securities or held-to-maturity securities measured at amortized cost.
|
ASU 2017-04,
Simplifying the
Test for Goodwill
Impairment
|
January 1, 2020
Early adoption is permitted
|
The ASU amends ASC Topic 350,
Intangibles - Goodwill and Other
and
eliminates the second step of the test for goodwill impairment. Under the new guidance, entities will compare the fair value of a reporting unit with its carrying amount. If the carrying amount exceeds the reporting unit’s fair value, the entity is required to recognize an impairment charge for this amount. The new method applies to all reporting units and the performance of a qualitative assessment is still allowable.
The guidance should be implemented using a prospective approach.
|
The adoption of this accounting guidance is not expected to have a material effect on our financial condition or results of operations.
|
June 30, 2018
|
Short-and Long-
Term Commercial
Total
(a)
|
Foreign Exchange
and Derivatives
with Collateral (b) |
Net
Exposure
|
||||||
in millions
|
|||||||||
France:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
$
|
(5
|
)
|
$
|
(5
|
)
|
|
Nonsovereign non-financial institutions
|
$
|
8
|
|
—
|
|
8
|
|
||
Total
|
8
|
|
(5
|
)
|
3
|
|
|||
Germany:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign non-financial institutions
|
19
|
|
—
|
|
19
|
|
|||
Total
|
19
|
|
—
|
|
19
|
|
|||
Italy:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign non-financial institutions
|
2
|
|
—
|
|
2
|
|
|||
Total
|
2
|
|
—
|
|
2
|
|
|||
Luxembourg:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign non-financial institutions
|
8
|
|
—
|
|
8
|
|
|||
Total
|
8
|
|
—
|
|
8
|
|
|||
Spain:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign non-financial institutions
|
1
|
|
—
|
|
1
|
|
|||
Total
|
1
|
|
—
|
|
1
|
|
|||
Switzerland:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
(1
|
)
|
(1
|
)
|
|||
Nonsovereign non-financial institutions
|
71
|
|
—
|
|
71
|
|
|||
Total
|
71
|
|
(1
|
)
|
70
|
|
|||
United Kingdom:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
155
|
|
155
|
|
|||
Nonsovereign non-financial institutions
|
29
|
|
—
|
|
29
|
|
|||
Total
|
29
|
|
155
|
|
184
|
|
|||
Other Europe:
(c)
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign non-financial institutions
|
—
|
|
—
|
|
—
|
|
|||
Total
|
—
|
|
—
|
|
—
|
|
|||
Total Europe:
|
|
|
|
||||||
Sovereigns
|
—
|
|
—
|
|
—
|
|
|||
Nonsovereign financial institutions
|
—
|
|
149
|
|
149
|
|
|||
Nonsovereign non-financial institutions
|
138
|
|
—
|
|
138
|
|
|||
Total
|
$
|
138
|
|
$
|
149
|
|
$
|
287
|
|
|
|
|
|
(a)
|
Represents our outstanding leases.
|
(b)
|
Represents contracts to hedge our balance sheet asset and liability needs, and to accommodate our clients’ trading and/or hedging needs. Our derivative mark-to-market exposures are calculated and reported on a daily basis. These exposures are largely covered by cash or highly marketable securities collateral with daily collateral calls.
|
(c)
|
Other Europe consists of the following countries: Austria, Belarus, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Finland, Greece, Hungary, Iceland, Ireland, Lithuania, Luxembourg, Malta, Norway, Poland, Portugal, Romania, Russia, Slovakia, Slovenia, Sweden, and Ukraine. 100% of our current exposure in Other Europe is in Austria, Belgium, and Sweden.
|
in millions, except per share data
|
June 30,
2018 |
|
December 31,
2017 |
|
||
|
(Unaudited)
|
|
|
|||
ASSETS
|
|
|
||||
Cash and due from banks
|
$
|
|
|
$
|
|
|
Short-term investments
|
|
|
|
|
||
Trading account assets
|
|
|
|
|
||
Securities available for sale
|
|
|
|
|
||
Held-to-maturity securities (fair value: $11,735 and $11,565)
|
|
|
|
|
||
Other investments
|
|
|
|
|
||
Loans, net of unearned income of $684 and $736
|
|
|
|
|
||
Less: Allowance for loan and lease losses
|
(
|
)
|
(
|
)
|
||
Net loans
|
|
|
|
|
||
Loans held for sale
(a)
|
|
|
|
|
||
Premises and equipment
|
|
|
|
|
||
Operating lease assets
|
|
|
|
|
||
Goodwill
|
|
|
|
|
||
Other intangible assets
|
|
|
|
|
||
Corporate-owned life insurance
|
|
|
|
|
||
Accrued income and other assets
|
|
|
|
|
||
Discontinued assets
|
|
|
|
|
||
Total assets
|
$
|
|
|
$
|
|
|
LIABILITIES
|
|
|
||||
Deposits in domestic offices:
|
|
|
||||
NOW and money market deposit accounts
|
$
|
|
|
$
|
|
|
Savings deposits
|
|
|
|
|
||
Certificates of deposit ($100,000 or more)
|
|
|
|
|
||
Other time deposits
|
|
|
|
|
||
Total interest-bearing deposits
|
|
|
|
|
||
Noninterest-bearing deposits
|
|
|
|
|
||
Total deposits
|
|
|
|
|
||
Federal funds purchased and securities sold under repurchase agreements
|
|
|
|
|
||
Bank notes and other short-term borrowings
|
|
|
|
|
||
Accrued expense and other liabilities
|
|
|
|
|
||
Long-term debt
|
|
|
|
|
||
Total liabilities
|
|
|
|
|
||
EQUITY
|
|
|
||||
Preferred stock
|
|
|
|
|
||
Common Shares, $1 par value; authorized 1,400,000,000 shares; issued
1,256,702,081, and
1,256,702,081
shares
|
|
|
|
|
||
Capital surplus
|
|
|
|
|
||
Retained earnings
|
|
|
|
|
||
Treasury stock, at cost (197,757,926 and 187,617,832 shares)
|
(
|
)
|
(
|
)
|
||
Accumulated other comprehensive income (loss)
|
(
|
)
|
(
|
)
|
||
Key shareholders’ equity
|
|
|
|
|
||
Noncontrolling interests
|
|
|
|
|
||
Total equity
|
|
|
|
|
||
Total liabilities and equity
|
$
|
|
|
$
|
|
|
|
|
|
(a)
|
|
dollars in millions, except per share amounts
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||
(Unaudited)
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
||||
INTEREST INCOME
|
|
|
|
|
|
||||||||
Loans
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Loans held for sale
|
|
|
|
|
|
|
|
|
|
||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
||||
Held-to-maturity securities
|
|
|
|
|
|
|
|
|
|
||||
Trading account assets
|
|
|
|
|
|
|
|
|
|
||||
Short-term investments
|
|
|
|
|
|
|
|
|
|
||||
Other investments
|
|
|
|
|
|
|
|
|
|
||||
Total interest income
|
|
|
|
|
|
|
|
|
|
||||
INTEREST EXPENSE
|
|
|
|
|
|
||||||||
Deposits
|
|
|
|
|
|
|
|
|
|
||||
Federal funds purchased and securities sold under repurchase agreements
|
|
|
|
|
|
|
|
|
|
||||
Bank notes and other short-term borrowings
|
|
|
|
|
|
|
|
|
|
||||
Long-term debt
|
|
|
|
|
|
|
|
|
|
||||
Total interest expense
|
|
|
|
|
|
|
|
|
|
||||
NET INTEREST INCOME
|
|
|
|
|
|
|
|
|
|
||||
Provision for credit losses
|
|
|
|
|
|
|
|
|
|
||||
Net interest income after provision for credit losses
|
|
|
|
|
|
|
|
|
|
||||
NONINTEREST INCOME
|
|
|
|
|
|
||||||||
Trust and investment services income
|
|
|
|
|
|
|
|
|
|
||||
Investment banking and debt placement fees
|
|
|
|
|
|
|
|
|
|
||||
Service charges on deposit accounts
|
|
|
|
|
|
|
|
|
|
||||
Operating lease income and other leasing gains
|
(
|
)
|
|
|
|
|
|
|
|
||||
Corporate services income
|
|
|
|
|
|
|
|
|
|
||||
Cards and payments income
|
|
|
|
|
|
|
|
|
|
||||
Corporate-owned life insurance income
|
|
|
|
|
|
|
|
|
|
||||
Consumer mortgage income
|
|
|
|
|
|
|
|
|
|
||||
Mortgage servicing fees
|
|
|
|
|
|
|
|
|
|
||||
Other income
(a)
|
|
|
|
|
|
|
|
|
|
||||
Total noninterest income
|
|
|
|
|
|
|
|
|
|
||||
NONINTEREST EXPENSE
|
|
|
|
|
|
||||||||
Personnel
|
|
|
|
|
|
|
|
|
|
||||
Net occupancy
|
|
|
|
|
|
|
|
|
|
||||
Computer processing
|
|
|
|
|
|
|
|
|
|
||||
Business services and professional fees
|
|
|
|
|
|
|
|
|
|
||||
Equipment
|
|
|
|
|
|
|
|
|
|
||||
Operating lease expense
|
|
|
|
|
|
|
|
|
|
||||
Marketing
|
|
|
|
|
|
|
|
|
|
||||
FDIC assessment
|
|
|
|
|
|
|
|
|
|
||||
Intangible asset amortization
|
|
|
|
|
|
|
|
|
|
||||
OREO expense, net
|
|
|
|
|
|
|
|
|
|
||||
Other expense
|
|
|
|
|
|
|
|
|
|
||||
Total noninterest expense
|
|
|
|
|
|
|
|
|
|
||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
|
|
|
|
|
|
|
|
|
||||
Income taxes
|
|
|
|
|
|
|
|
|
|
||||
INCOME (LOSS) FROM CONTINUING OPERATIONS
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) from discontinued operations
|
|
|
|
|
|
|
|
|
|
||||
NET INCOME (LOSS)
|
|
|
|
|
|
|
|
|
|
||||
Less: Net income (loss) attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
||||
NET INCOME (LOSS) ATTRIBUTABLE TO KEY
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Income (loss) from continuing operations attributable to Key common shareholders
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Net income (loss) attributable to Key common shareholders
|
|
|
|
|
|
|
|
|
|
||||
Per Common Share:
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations attributable to Key common shareholders
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Income (loss) from discontinued operations, net of taxes
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to Key common shareholders
(b)
|
|
|
|
|
|
|
|
|
|
||||
Per Common Share — assuming dilution:
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations attributable to Key common shareholders
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Income (loss) from discontinued operations, net of taxes
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to Key common shareholders
(b)
|
|
|
|
|
|
|
|
|
|
||||
Cash dividends declared per Common Share
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Weighted-average Common Shares outstanding (000)
|
|
|
|
|
|
|
|
|
|
||||
Effect of Common Share options and other stock awards
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average Common Shares and potential Common Shares outstanding (000)
(c)
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
(a)
|
|
(b)
|
|
(c)
|
|
in millions
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||
(Unaudited)
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
||||
Net income (loss)
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||||
Net unrealized gains (losses) on securities available for sale, net of income taxes of ($20), $20, ($67), and $24
|
(
|
)
|
|
|
|
(
|
)
|
|
|
||||
Net unrealized gains (losses) on derivative financial instruments, net of income taxes of ($4), $4, ($24), and ($11)
|
(
|
)
|
|
|
|
(
|
)
|
(
|
)
|
||||
Foreign currency translation adjustments, net of income taxes of $3, $3, $3, and $4
|
(
|
)
|
|
|
|
(
|
)
|
|
|
||||
Net pension and postretirement benefit costs, net of income taxes of $1, $1, $2, and $3
|
|
|
|
|
|
|
|
|
|
||||
Total other comprehensive income (loss), net of tax
|
(
|
)
|
|
|
|
(
|
)
|
|
|
||||
Comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
||||
Less: Comprehensive income attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
||||
Comprehensive income (loss) attributable to Key
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
Key Shareholders’ Equity
|
|
|||||||||||||||||||||||
dollars in millions, except per share amounts
(Unaudited)
|
Preferred
Shares
Outstanding
(000)
|
Common
Shares
Outstanding
(000)
|
Preferred
Stock
|
Common
Shares
|
Capital
Surplus
|
Retained
Earnings
|
Treasury
Stock,
at Cost
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Noncontrolling
Interests
|
||||||||||||||||
BALANCE AT DECEMBER 31, 2016
|
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Deferred compensation
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cash dividends declared
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common Shares ($.18 per share)
|
|
|
|
|
|
(
|
)
|
|
|
|
|||||||||||||||
Series A Preferred Stock ($1.9375 per share)
|
|
|
|
|
|
(
|
)
|
|
|
|
|||||||||||||||
Series C Preferred Stock ($.539063 per share)
|
|
|
|
|
|
(
|
)
|
|
|
|
|||||||||||||||
Series D Preferred Stock ($25 per depositary share)
|
|
|
|
|
|
(
|
)
|
|
|
|
|||||||||||||||
Series E Preferred Stock ($.778386 per depositary share)
|
|
|
|
|
|
(
|
)
|
|
|
|
|||||||||||||||
Open market Common Share repurchases
|
|
(
|
)
|
|
|
|
|
(
|
)
|
|
|
||||||||||||||
Employee equity compensation program Common Share repurchases
|
|
(
|
)
|
|
|
|
|
(
|
)
|
|
|
||||||||||||||
Series A Preferred Stock exchanged for Common Shares
|
(
|
)
|
|
|
(
|
)
|
|
(
|
)
|
|
|
|
|
|
|||||||||||
Redemption of Series C Preferred Stock
|
(
|
)
|
|
(
|
)
|
|
|
|
|
|
|
||||||||||||||
Common Shares reissued (returned) for stock options and other employee benefit plans
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
|||||||||||||
Net contribution from (distribution to) noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
BALANCE AT JUNE 30, 2017
|
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
BALANCE AT DECEMBER 31, 2017
|
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
Cumulative effect from changes in accounting principle
(a)
|
|
|
|
|
|
(
|
)
|
|
|
|
|||||||||||||||
Other reclassification of AOCI
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
(
|
)
|
|
|||||||||||||||
Deferred compensation
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cash dividends declared
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common Shares ($.225 per share)
|
|
|
|
|
|
(
|
)
|
|
|
|
|||||||||||||||
Series D Preferred Stock ($25 per depositary share)
|
|
|
|
|
|
(
|
)
|
|
|
|
|||||||||||||||
Series E Preferred Stock ($.765626 per depositary share)
|
|
|
|
|
|
(
|
)
|
|
|
|
|||||||||||||||
Open market Common Share repurchases
|
|
(
|
)
|
|
|
|
|
(
|
)
|
|
|
||||||||||||||
Employee equity compensation program Common Share repurchases
|
|
(
|
)
|
|
|
|
|
(
|
)
|
|
|
||||||||||||||
Common Shares reissued (returned) for stock options and other employee benefit plans
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
|||||||||||||
BALANCE AT JUNE 30, 2018
|
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
in millions
|
Six months ended June 30,
|
||||||
(Unaudited)
|
2018
|
|
|
2017
|
|
||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income (loss)
|
$
|
|
|
|
$
|
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
||||
Provision for credit losses
|
|
|
|
|
|
||
Depreciation and amortization expense, net
|
|
|
|
|
|
||
Accretion of acquired loans
|
|
|
|
|
|
||
Increase in cash surrender value of corporate-owned life insurance
|
(
|
)
|
|
(
|
)
|
||
Stock-based compensation expense
|
|
|
|
|
|
||
FDIC reimbursement (payments), net of FDIC expense
|
|
|
|
(
|
)
|
||
Deferred income taxes (benefit)
|
|
|
|
|
|
||
Proceeds from sales of loans held for sale
|
|
|
|
|
|
||
Originations of loans held for sale, net of repayments
|
(
|
)
|
|
(
|
)
|
||
Net losses (gains) on sales of loans held for sale
|
(
|
)
|
|
(
|
)
|
||
Net losses (gains) and writedown on OREO
|
|
|
|
|
|
||
Net losses (gains) on leased equipment
|
(
|
)
|
|
(
|
)
|
||
Net securities losses (gains)
|
|
|
|
(
|
)
|
||
Net losses (gains) on sales of fixed assets
|
|
|
|
|
|
||
Net decrease (increase) in trading account assets
|
|
|
|
(
|
)
|
||
Gain on sale of Key Insurance & Benefits, Inc.
|
(
|
)
|
|
|
|
||
Other operating activities, net
|
(
|
)
|
|
(
|
)
|
||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
|
|
|
|
(
|
)
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Cash received (used) in acquisitions, net of cash acquired
|
|
|
|
(
|
)
|
||
Proceeds from sale of Key Insurance & Benefits Services, Inc.
|
|
|
|
|
|
||
Net decrease (increase) in short-term investments, excluding acquisitions
|
|
|
|
|
|
||
Purchases of securities available for sale
|
(
|
)
|
|
(
|
)
|
||
Proceeds from sales of securities available for sale
|
|
|
|
|
|
||
Proceeds from prepayments and maturities of securities available for sale
|
|
|
|
|
|
||
Proceeds from prepayments and maturities of held-to-maturity securities
|
|
|
|
|
|
||
Purchases of held-to-maturity securities
|
(
|
)
|
|
(
|
)
|
||
Purchases of other investments
|
(
|
)
|
|
(
|
)
|
||
Proceeds from sales of other investments
|
|
|
|
|
|
||
Proceeds from prepayments and maturities of other investments
|
|
|
|
|
|
||
Net decrease (increase) in loans, excluding acquisitions, sales and transfers
|
(
|
)
|
|
(
|
)
|
||
Proceeds from sales of portfolio loans
|
|
|
|
|
|
||
Proceeds from corporate-owned life insurance
|
|
|
|
|
|
||
Purchases of premises, equipment, and software
|
(
|
)
|
|
(
|
)
|
||
Proceeds from sales of premises and equipment
|
|
|
|
|
|
||
Proceeds from sales of OREO
|
|
|
|
|
|
||
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
|
|
|
|
|
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Net increase (decrease) in deposits, excluding acquisitions
|
(
|
)
|
|
(
|
)
|
||
Net increase (decrease) in short-term borrowings
|
|
|
|
|
|
||
Net proceeds from issuance of long-term debt
|
|
|
|
|
|
||
Payments on long-term debt
|
(
|
)
|
|
(
|
)
|
||
Open market Common Share repurchases
|
(
|
)
|
|
(
|
)
|
||
Employee equity compensation program Common Share repurchases
|
(
|
)
|
|
(
|
)
|
||
Redemption of Preferred Stock Series C
|
|
|
|
(
|
)
|
||
Net proceeds from reissuance of Common Shares
|
|
|
|
|
|
||
Cash dividends paid
|
(
|
)
|
|
(
|
)
|
||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
(
|
)
|
|
(
|
)
|
||
NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS
|
|
|
|
(
|
)
|
||
CASH AND DUE FROM BANKS AT BEGINNING OF PERIOD
|
|
|
|
|
|
||
CASH AND DUE FROM BANKS AT END OF PERIOD
|
$
|
|
|
|
$
|
|
|
Additional disclosures relative to cash flows:
|
|
|
|
||||
Interest paid
|
$
|
|
|
|
$
|
|
|
Income taxes paid (refunded)
|
|
|
|
|
|
||
Noncash items:
|
|
|
|
||||
Reduction of secured borrowing and related collateral
|
$
|
|
|
|
|
|
|
Loans transferred to portfolio from held for sale
|
|
|
|
|
|
||
Loans transferred to (from) held for sale from portfolio
|
(
|
)
|
|
|
|
||
Loans transferred to OREO
|
|
|
|
|
|
||
|
|
|
|
Standard
|
Date of Adoption
|
Description
|
Effect on Financial Statements or Other Significant Matters
|
ASU 2014-09,
Revenue from Contracts with Customers (Topic 606)
ASU 2015-14,
Deferral of Effective Date
ASU 2016-08,
Principal versus Agent Considerations
ASU 2016-10,
Identifying Performance Obligations and Licensing
ASU 2016-11,
Rescission of SEC Guidance because of Accounting Standard Updates 2014-09 and 2014-16 pursuant to Staff Announcements at the March 3, 2016 EITF Meeting
ASU 2016-12,
Narrow-scope Improvements and Practical Expedients
ASU 2016-20,
Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers
|
January 1, 2018
|
These ASUs supersede the revenue recognition guidance in ASC 605,
Revenue Recognition,
and most industry-specific guidance. The core principle of these ASUs is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
These ASUs can be implemented using a retrospective method, or a cumulative-effect approach to new contracts and existing contracts with performance obligations as of the effective date.
|
On January 1, 2018, we adopted ASC 606, Revenue from Contracts with Customers (ASC 606), using the modified retrospective method for those contracts which were not completed as of that date. Results for reporting periods beginning January 1, 2018, are presented under ASC 606. As allowed under the new guidance, the comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.
As a result of adopting ASC 606, we changed the timing of recognition for revenues related to insurance commissions, securities underwriting, and deposit account maintenance fees, however, those changes did not have a material impact on our consolidated financial statements, results of operations, equity, or cash flows as of the adoption date or for the six months ended June 30, 2018.
The presentation of underwriting costs and reimbursed out-of-pocket expenses related to underwriting and M&A advisory services was changed from net to gross within the income statement as Key acts as the principal in the transactions. Securities underwriting revenue is recorded within "investment banking and debt placement fees" and underwriting costs and reimbursed out-of-pocket expenses within "other expense" on the income statement. Additionally, because Key acts as an agent, certain credit and debit card reward costs and certain card network costs were changed from a gross presentation to net within "cards and payment income" on the income statement. Credit and debit card reward costs and card network costs were recorded as "other expense" on the income statement in prior periods. These changes in presentation did not have a material impact on our consolidated financial statements for the six months ended June 30, 2018.
ASC 606 requires quantitative disclosure of the allocation of the transaction price to the remaining performance obligations when those amounts are expected to be recognized as revenue. However, the standard provides exemptions from this disclosure for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services provided. Most of our revenue subject to ASC 606 fits into one of these exemptions, or is immaterial. We elected to use the optional exemption to not disclose the aggregate amount of the transaction price to remaining performance obligations.
|
ASU 2017-12,
Targeted Improvements to Accounting for Hedging Activities
|
January 1, 2018
|
The ASU amends ASC Topic 815,
Derivatives and Hedging
, to simplify the requirements for hedge accounting and facilitate financial reporting that more closely aligns with an entity’s risk management activities. Key amendments include: eliminating the requirement to separately measure and report hedge ineffectiveness, requiring changes in the value of the hedging instrument to be presented in the same income statement line as the earnings effect of the hedged item, and the ability to measure the hedged item based on the benchmark interest rate component of the total contractual coupon for fair value hedges.
Additional disclosures are also required for reporting periods subsequent to the date of adoption.
The guidance should be implemented on a modified retrospective basis to existing hedge relationships as of the adoption date.
|
On January 1, 2018, we adopted this ASU using a modified retrospective basis. Accordingly, our financial statements for the quarter ended June 30, 2018, include an immaterial cumulative-effect adjustment to decrease opening retained earnings to reflect the application of the new guidance as of January 1, 2018. The primary impact to Key at adoption was the election to measure the change in fair value of hedged items in fair value hedges on the basis of the benchmark interest rate component of contractual coupon cash flows. This change has resulted in a reduction of hedge ineffectiveness for impacted fair value hedges.
Instruments designated as hedges are recorded at fair value and included in “accrued income and other assets” or “accrued expense and other liabilities” on the balance sheet. Under the revised guidance, the change in the fair value of an instrument designated as a fair value hedge is recorded in earnings at the same time and in the same income statement line as the offsetting change in the fair value of the hedged item. For cash flow hedges, the change in the fair value of an instrument designated as a cash flow hedge is initially recorded in AOCI on the balance sheet. This amount is subsequently reclassified into income when the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item.
|
Standard
|
Date of Adoption
|
Description
|
Effect on Financial Statements or Other Significant Matters
|
ASU 2016-01,
Recognition and Measurement of Financial Assets and Financial Liabilities
|
January 1, 2018
|
The ASU amends ASC Topic 825,
Financial Instruments-Overall,
and requires equity investments, except those accounted for under the equity method of accounting or consolidated, to be measured at fair value with changes recognized in net income. If there is no readily determinable fair value, the guidance allows entities the ability to measure investments at cost less impairment, whereby impairment is based on a qualitative assessment. The guidance eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value of financial instruments measured at amortized cost and changes the presentation of financial assets and financial liabilities on the balance sheet or in the footnotes. If an entity has elected the fair value option to measure liabilities, the new accounting guidance requires the portion of the change in the fair value of a liability resulting from credit risk to be presented in OCI.
With the exception of disclosure requirements that will be adopted prospectively, the ASU must be adopted on a modified retrospective basis.
|
The adoption of this guidance did not have a material effect on our financial condition or results of operations.
|
ASU 2016-15,
Classification of Certain Cash Receipts and Cash Payments
|
January 1, 2018
|
The ASU amends ASC Topic 230,
Statement of Cash Flows
, and clarifies how cash receipts and cash payments in certain transactions should be presented and classified in the statement of cash flows. These specific transactions include, but are not limited to, debt prepayment or extinguishment costs, contingent considerations made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, and distributions from equity method investees. This guidance also clarifies that in instances of cash flows with multiple aspects that cannot be separately identified, classification should be based on the activity that is likely to be the predominant source of or use of cash flow.
The guidance should be implemented using a retrospective approach.
|
The adoption of this guidance did not have a material effect on our financial condition or results of operations.
|
ASU 2017-01,
Clarifying the Definition of a Business
|
January 1, 2018
|
The ASU amends Topic 805,
Business Combinations,
and clarifies the definition of a business and removes the requirement for a market participant to consider whether it could replace missing elements in an integrated set of assets and activities. The guidance states that if substantially all of the fair value of the assets acquired or disposed of is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business.
The guidance should be implemented using a prospective approach.
|
The adoption of this guidance did not have a material effect on our financial condition or results of operations.
|
ASU 2017-05,
Other Income- Gains and Losses from the Derecognition of Nonfinancial Assets
|
January 1, 2018
|
The ASU amends ASC Topic 610-20,
Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets
to clarify the scope of the Topic by
clarifying the definition of the term "in substance nonfinancial asset" and also adding guidance for partial sales of nonfinancial assets. Under the new guidance, an entity will derecognize a nonfinancial asset when it does not have or ceases to have a controlling interest in the legal entity that holds the asset and when control of the asset has transferred in accordance with ASC 606. The ASU can be adopted on a retrospective or modified retrospective approach.
|
The adoption of this guidance did not have a material effect on our financial condition or results of operations.
|
ASU 2017-07,
Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
|
January 1, 2018
|
The ASU amends ASC Topic 715,
Compensation - Retirement Benefits
, and requires service costs to be included in the same line item as certain other compensation costs related to services rendered by employees. We record compensation costs under personnel expense on the income statement. Other elements of net benefit cost should be presented separately.
The guidance should be implemented on a retrospective basis.
|
The adoption of this guidance did not have a material effect on our financial condition or results of operations.
|
ASU 2017-09,
Scope of Modification Accounting
|
January 1, 2018
|
The ASU amends ASC Topic 718,
Compensation - Stock Compensation
, and clarifies when changes to terms and conditions for share-based payment awards should be accounted for as modifications. Under the new guidance, entities should apply the modification guidance unless the fair value of the modified award is the same as the fair value of the original award immediately before modification, the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before modification, and the classification of the modified award (as equity or liability instrument) is the same as the classification of the original award immediately before modification.
The guidance should be applied on a prospective basis.
|
The adoption of this guidance did not have a material effect on our financial condition or results of operations.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||
dollars in millions, except per share amounts
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
||||
EARNINGS
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Less: Net income (loss) attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) from continuing operations attributable to Key
|
|
|
|
|
|
|
|
|
|
||||
Less: Dividends on Preferred Stock
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) from continuing operations attributable to Key common shareholders
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) from discontinued operations, net of taxes
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to Key common shareholders
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
WEIGHTED-AVERAGE COMMON SHARES
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding (000)
|
|
|
|
|
|
|
|
|
|
||||
Effect of Common Share options and other stock awards
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average Common Shares and potential Common Shares outstanding (000)
(a)
|
|
|
|
|
|
|
|
|
|
||||
EARNINGS PER COMMON SHARE
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations attributable to Key common shareholders
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Income (loss) from discontinued operations, net of taxes
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to Key common shareholders
(b)
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Income (loss) from discontinued operations, net of taxes
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to Key common shareholders — assuming dilution
(b)
|
|
|
|
|
|
|
|
|
|
(a)
|
|
(b)
|
|
in millions
|
June 30, 2018
|
|
December 31, 2017
|
|
||
Commercial and industrial
(a)
|
$
|
|
|
$
|
|
|
Commercial real estate:
|
|
|
||||
Commercial mortgage
|
|
|
|
|
||
Construction
|
|
|
|
|
||
Total commercial real estate loans
|
|
|
|
|
||
Commercial lease financing
(b)
|
|
|
|
|
||
Total commercial loans
|
|
|
|
|
||
Residential — prime loans:
|
|
|
||||
Real estate — residential mortgage
|
|
|
|
|
||
Home equity loans
|
|
|
|
|
||
Total residential — prime loans
|
|
|
|
|
||
Consumer direct loans
|
|
|
|
|
||
Credit cards
|
|
|
|
|
||
Consumer indirect loans
|
|
|
|
|
||
Total consumer loans
|
|
|
|
|
||
Total loans
(c)
|
$
|
|
|
$
|
|
|
|
|
|
(a)
|
Loan balances include
$
|
(b)
|
Commercial lease financing includes receivables held as collateral for a secured borrowing of
$
|
(c)
|
|
|
Commercial and industrial
|
RE — Commercial
|
RE — Construction
|
Commercial lease
|
Total
|
|||||||||||||||||||||||||
in millions
|
June 30,
|
|
December 31,
|
|
June 30,
|
|
December 31,
|
|
June 30,
|
|
December 31,
|
|
June 30,
|
|
December 31,
|
|
June 30,
|
|
December 31,
|
|
||||||||||
RATING
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
||||||||||
Pass
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Criticized (Accruing)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Criticized (Nonaccruing)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Credit quality indicators are updated on an ongoing basis and reflect credit quality information as of the dates indicated.
|
(b)
|
The term criticized refers to those loans that are internally classified by Key as special mention or worse, which are asset quality categories defined by regulatory authorities. These assets have an elevated level of risk and may have a high probability of default or total loss. Pass rated refers to all loans not classified as criticized.
|
|
Residential — Prime
|
Consumer direct loans
|
Credit cards
|
Consumer indirect loans
|
Total
|
|||||||||||||||||||||||||
in millions
|
June 30,
|
|
December 31,
|
|
June 30,
|
|
December 31,
|
|
June 30,
|
|
December 31,
|
|
June 30,
|
|
December 31,
|
|
June 30,
|
|
December 31,
|
|
||||||||||
FICO SCORE
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
||||||||||
750 and above
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
660 to 749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Less than 660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
No Score
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Borrower FICO scores provide information about the credit quality of our consumer loan portfolio as they provide an indication as to the likelihood that a debtor will repay its debts. The scores are obtained from a nationally recognized consumer rating agency and are presented in the above table at the dates indicated.
|
|
Commercial and Industrial
|
RE — Commercial
|
RE — Construction
|
Commercial Lease
|
Total
|
|||||||||||||||||||||||
in millions
|
June 30,
|
|
December 31,
|
|
June 30,
|
|
December 31,
|
|
June 30,
|
|
December 31,
|
|
June 30,
|
|
December 31,
|
|
June 30,
|
|
December 31,
|
|
||||||||
RATING
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
||||||||
Pass
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
$
|
|
|
$
|
|
|
Criticized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Credit quality indicators are updated on an ongoing basis and reflect credit quality information as of the dates indicated.
|
(b)
|
The term “criticized” refers to those loans that are internally classified by Key as special mention or worse, which are asset quality categories defined by regulatory authorities. These assets have an elevated level of risk and may have a high probability of default or total loss. Pass rated refers to all loans not classified as criticized.
|
|
Residential — Prime
|
Consumer direct loans
|
Credit cards
|
Consumer indirect loans
|
Total
|
|||||||||||||||||||||
in millions
|
June 30,
|
|
December 31,
|
|
June 30,
|
|
December 31,
|
|
June 30,
|
|
December 31,
|
|
June 30,
|
|
December 31,
|
|
June 30,
|
|
December 31,
|
|
||||||
FICO SCORE
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
||||||
750 and above
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
$
|
|
|
|
660 to 749
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Less than 660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
No Score
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Borrower FICO scores provide information about the credit quality of our consumer loan portfolio as they provide an indication as to the likelihood that a debtor will repay its debts. The scores are obtained from a nationally recognized consumer rating agency and are presented in the above table at the dates indicated.
|
June 30, 2018
|
Current
|
30-59
Days Past
Due
(b)
|
60-89
Days Past
Due
(b)
|
90 and
Greater
Days Past
Due
(b)
|
Non-performing
Loans
|
Total Past
Due and
Non-performing
Loans
|
Purchased
Credit
Impaired
|
Total
Loans
(c), (d)
|
||||||||||||||||
in millions
|
||||||||||||||||||||||||
LOAN TYPE
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial and industrial
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Commercial real estate:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total commercial real estate loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial lease financing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total commercial loans
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Real estate — residential mortgage
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Home equity loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Consumer direct loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Credit cards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Consumer indirect loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total consumer loans
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Total loans
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Amounts in table represent recorded investment and exclude loans held for sale. Recorded investment represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs.
|
(b)
|
Past due loan amounts exclude PCI, even if contractually past due (or if we do not expect to collect principal or interest in full based on the original contractual terms), as we are currently accreting income over the remaining term of the loans.
|
(c)
|
Net of unearned income, net deferred loan fees and costs, and unamortized discounts and premiums.
|
(d)
|
Future accretable yield related to PCI loans is not included in the analysis of the loan portfolio.
|
December 31, 2017
|
Current
|
30-59
Days Past
Due
(b)
|
60-89
Days Past
Due
(b)
|
90 and
Greater
Days Past
Due
(b)
|
Non-performing
Loans
|
Total Past
Due and
Non-performing
Loans
|
Purchased
Credit
Impaired
|
Total
Loans
(c), (d)
|
||||||||||||||||
in millions
|
||||||||||||||||||||||||
LOAN TYPE
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial and industrial
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
$
|
|
|
|
Commercial real estate:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total commercial real estate loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial lease financing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total commercial loans
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
$
|
|
|
|
Real estate — residential mortgage
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Home equity loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Consumer direct loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Credit cards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Consumer indirect loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total consumer loans
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Total loans
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Amounts in table represent recorded investment and exclude loans held for sale. Recorded investment represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs.
|
(b)
|
Past due loan amounts exclude PCI, even if contractually past due (or if we do not expect to collect principal or interest in full based on the original contractual terms), as we are currently accreting income over the remaining term of the loans.
|
(c)
|
Net of unearned income, net deferred loan fees and costs, and unamortized discounts and premiums.
|
(d)
|
Future accretable yield related to purchased credit impaired loans is not included in the analysis of the loan portfolio.
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||
|
Recorded
Investment
(a)
|
Unpaid Principal Balance
(b)
|
Specific
Allowance
|
|
Recorded
Investment
(a)
|
Unpaid Principal Balance
(b)
|
Specific
Allowance
|
||||||||||||
in millions
|
|||||||||||||||||||
With no related allowance recorded:
|
|
|
|
|
|
|
|
||||||||||||
Commercial and industrial
|
$
|
|
|
$
|
|
|
—
|
|
|
$
|
|
|
$
|
|
|
—
|
|
||
Commercial real estate:
|
|
|
|
|
|
|
|
||||||||||||
Commercial mortgage
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
||||||
Total commercial real estate loans
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
||||||
Total commercial loans
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
||||||
Real estate — residential mortgage
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
||||||
Home equity loans
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
||||||
Consumer indirect loans
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
||||||
Total consumer loans
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
||||||
Total loans with no related allowance recorded
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
||||||
With an allowance recorded:
|
|
|
|
|
|
|
|
||||||||||||
Commercial and industrial
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
||||
Total commercial loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Real estate — residential mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Home equity loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consumer direct loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Credit cards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consumer indirect loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total consumer loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total loans with an allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
(a)
|
The Recorded Investment represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs. This amount is a component of total loans on our Consolidated Balance Sheet.
|
(b)
|
The Unpaid Principal Balance represents the customer’s legal obligation to us.
|
Average Recorded Investment
(a)
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||
in millions
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
||||
Commercial and industrial
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Commercial real estate:
|
|
|
|
|
||||||||
Commercial mortgage
|
|
|
|
|
|
|
|
|
||||
Construction
|
|
|
|
|
|
|
|
|
||||
Total commercial real estate loans
|
|
|
|
|
|
|
|
|
||||
Total commercial loans
|
|
|
|
|
|
|
|
|
||||
Real estate — residential mortgage
|
|
|
|
|
|
|
|
|
||||
Home equity loans
|
|
|
|
|
|
|
|
|
||||
Consumer direct loans
|
|
|
|
|
|
|
|
|
||||
Credit cards
|
|
|
|
|
|
|
|
|
||||
Consumer indirect loans
|
|
|
|
|
|
|
|
|
||||
Total consumer loans
|
|
|
|
|
|
|
|
|
||||
Total
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
(a)
|
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||
in millions
|
2018
|
2017
|
2018
|
2017
|
||||||||
Commercial loans:
|
|
|
|
|
||||||||
Forgiveness of principal
|
$
|
|
|
|
|
$
|
|
|
|
|
||
Extension of Maturity Date
|
|
|
$
|
|
|
|
|
$
|
|
|
||
Payment or Covenant Modification/Deferment
|
|
|
|
|
|
|
|
|
||||
Bankruptcy Plan Modification
|
|
|
|
|
|
|
|
|
||||
Total
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Consumer loans:
|
|
|
|
|
||||||||
Interest rate reduction
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Forgiveness of principal
|
|
|
|
|
|
|
|
|
||||
Other
|
|
|
|
|
|
|
|
|
||||
Total
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Total commercial and consumer TDRs
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||
in millions
|
2018
|
2017
|
2018
|
2017
|
||||||||
Balance at beginning of the period
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Additions
|
|
|
|
|
|
|
|
|
||||
Payments
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||
Charge-offs
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||
Balance at end of period
(a)
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||
|
Number of
Loans
|
Pre-modification
Outstanding
Recorded
Investment
|
Post-modification
Outstanding
Recorded
Investment
|
|
Number of
Loans
|
Pre-modification
Outstanding
Recorded
Investment
|
Post-modification
Outstanding
Recorded
Investment
|
||||||||||
dollars in millions
|
|||||||||||||||||
LOAN TYPE
|
|
|
|
|
|
|
|
||||||||||
Nonperforming:
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
|
|
$
|
|
|
$
|
|
|
|
|
|
$
|
|
|
$
|
|
|
Commercial real estate:
|
|
|
|
|
|
|
|
||||||||||
Commercial mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total commercial real estate loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total commercial loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Real estate — residential mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Home equity loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consumer direct loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Credit cards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consumer indirect loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total consumer loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total nonperforming TDRs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Prior-year accruing:
(a)
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial real estate
|
|
|
|
|
|
|
|
||||||||||
Commercial mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total commercial real estate loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total commercial loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Real estate — residential mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Home equity loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consumer direct loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Credit cards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consumer indirect loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total consumer loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total prior-year accruing TDRs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total TDRs
|
|
|
$
|
|
|
$
|
|
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
(a)
|
All TDRs that were restructured prior to January 1,
2018
, and January 1,
2017
, and are fully accruing.
|
in millions
|
March 31, 2018
|
Provision
|
|
Charge-offs
|
Recoveries
|
June 30, 2018
|
||||||||||
Commercial and Industrial
|
$
|
|
|
$
|
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
Commercial real estate:
|
|
|
|
|
|
|
||||||||||
Real estate — commercial mortgage
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Real estate — construction
|
|
|
(
|
)
|
|
|
|
|
|
|
|
|||||
Total commercial real estate loans
|
|
|
(
|
)
|
|
(
|
)
|
|
|
|
|
|||||
Commercial lease financing
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Total commercial loans
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Real estate — residential mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Home equity loans
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Consumer direct loans
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Credit cards
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Consumer indirect loans
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Total consumer loans
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Total ALLL — continuing operations
|
|
|
|
|
(a)
|
(
|
)
|
|
|
|
|
|||||
Discontinued operations
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Total ALLL — including discontinued operations
|
$
|
|
|
$
|
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
(a)
|
Excludes a
credit
for losses on lending-related commitments of
$
|
in millions
|
March 31, 2017
|
Provision
|
|
Charge-offs
|
Recoveries
|
June 30, 2017
|
||||||||||
Commercial and Industrial
|
$
|
|
|
$
|
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
Commercial real estate:
|
|
|
|
|
|
|
||||||||||
Real estate — commercial mortgage
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Real estate — construction
|
|
|
(
|
)
|
|
|
|
|
|
|
|
|||||
Total commercial real estate loans
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Commercial lease financing
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Total commercial loans
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Real estate — residential mortgage
|
|
|
(
|
)
|
|
(
|
)
|
|
|
|
|
|||||
Home equity loans
|
|
|
(
|
)
|
|
(
|
)
|
|
|
|
|
|||||
Consumer direct loans
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Credit cards
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Consumer indirect loans
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Total consumer loans
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Total ALLL — continuing operations
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Discontinued operations
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Total ALLL — including discontinued operations
|
$
|
|
|
$
|
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
in millions
|
December 31, 2017
|
Provision
|
|
Charge-offs
|
Recoveries
|
June 30, 2018
|
||||||||||
Commercial and Industrial
|
|
|
$
|
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
|
Commercial real estate:
|
|
|
|
|
|
|
||||||||||
Real estate — commercial mortgage
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Real estate — construction
|
|
|
(
|
)
|
|
|
|
|
|
|
|
|||||
Total commercial real estate loans
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Commercial lease financing
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Total commercial loans
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Real estate — residential mortgage
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Home equity loans
|
|
|
(
|
)
|
|
(
|
)
|
|
|
|
|
|||||
Consumer direct loans
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Credit cards
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Consumer indirect loans
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Total consumer loans
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Total ALLL — continuing operations
|
|
|
|
|
(a)
|
(
|
)
|
|
|
|
|
|||||
Discontinued operations
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Total ALLL — including discontinued operations
|
$
|
|
|
$
|
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
(a)
|
Excludes a
provision
for losses on lending-related commitments of
$
|
in millions
|
December 31, 2016
|
Provision
|
|
Charge-offs
|
Recoveries
|
June 30, 2017
|
||||||||||
Commercial and Industrial
|
$
|
|
|
$
|
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
Commercial real estate:
|
|
|
|
|
|
|
||||||||||
Real estate — commercial mortgage
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Real estate — construction
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total commercial real estate loans
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Commercial lease financing
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Total commercial loans
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Real estate — residential mortgage
|
|
|
(
|
)
|
|
(
|
)
|
|
|
|
|
|||||
Home equity loans
|
|
|
(
|
)
|
|
(
|
)
|
|
|
|
|
|||||
Consumer direct loans
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Credit cards
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Consumer indirect loans
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Total consumer loans
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Total ALLL — continuing operations
|
|
|
|
|
(a)
|
(
|
)
|
|
|
|
|
|||||
Discontinued operations
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|||||
Total ALLL — including discontinued operations
|
$
|
|
|
$
|
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
Allowance
|
|
Outstanding
|
|||||||||||||||||||||
June 30, 2018
|
Individually
Evaluated for
Impairment
|
Collectively
Evaluated for
Impairment
|
Purchased
Credit
Impaired
|
|
Loans
|
|
Individually
Evaluated for
Impairment
|
Collectively
Evaluated for
Impairment
|
|
Purchased
Credit
Impaired
|
||||||||||||||
in millions
|
|
|
||||||||||||||||||||||
Commercial and industrial
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total commercial real estate loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial lease financing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total commercial loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate — residential mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Home equity loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Consumer direct loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Credit cards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Consumer indirect loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total consumer loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total ALLL — continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Discontinued operations
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
|
|
(a)
|
|
|
|||||||
Total ALLL — including discontinued operations
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Amount includes
$
|
|
Allowance
|
|
Outstanding
|
|||||||||||||||||||||
December 31, 2017
|
Individually
Evaluated for
Impairment
|
Collectively
Evaluated for
Impairment
|
Purchased
Credit
Impaired
|
|
Loans
|
|
Individually
Evaluated for
Impairment
|
Collectively
Evaluated for
Impairment
|
|
Purchased
Credit
Impaired
|
||||||||||||||
in millions
|
|
|
||||||||||||||||||||||
Commercial and Industrial
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total commercial real estate loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial lease financing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total commercial loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate — residential mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Home equity loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Consumer direct loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Credit cards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Consumer indirect loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total consumer loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total ALLL — continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Discontinued operations
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
|
|
(a)
|
|
|
|||||||
Total ALLL — including discontinued operations
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Amount includes
$
|
|
Three months ended June 30,
|
Six months ended June 30,
|
||||||||||
in millions
|
2018
|
2017
|
2018
|
2017
|
||||||||
Balance at beginning of period
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Provision (credit) for losses on lending-related commitments
|
(
|
)
|
|
|
|
|
(
|
)
|
||||
Balance at end of period
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||
|
2018
|
|
2018
|
||||||||||||||||
in millions
|
Accretable Yield
|
Carrying Amount
|
Outstanding Unpaid Principal Balance
|
|
Accretable Yield
|
Carrying Amount
|
Outstanding Unpaid Principal Balance
|
||||||||||||
Balance at beginning of period
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Additions
|
|
|
|
|
|
|
|
|
|
||||||||||
Accretion
|
(
|
)
|
|
|
|
(
|
)
|
|
|
||||||||||
Net reclassifications from nonaccretable to accretable
|
|
|
|
|
|
|
|
|
|
||||||||||
Payments received, net
|
(
|
)
|
|
|
|
(
|
)
|
|
|
||||||||||
Disposals
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at end of period
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
|
|
2017
|
||||||||||
in millions
|
|
|
|
|
Accretable Yield
|
Carrying Amount
|
Outstanding Unpaid Principal Balance
|
||||||
Balance at beginning of period
|
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Additions
|
|
|
|
|
(
|
)
|
|
|
|||||
Accretion
|
|
|
|
|
(
|
)
|
|
|
|||||
Net reclassifications from nonaccretable to accretable
|
|
|
|
|
|
|
|
|
|||||
Payments received, net
|
|
|
|
|
(
|
)
|
|
|
|||||
Disposals
|
|
|
|
|
(
|
)
|
|
|
|||||
Balance at end of period
|
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2018
|
December 31, 2017
|
||||||||||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
in millions
|
||||||||||||||||||||||||
ASSETS MEASURED ON A RECURRING BASIS
|
|
|
|
|
|
|
|
|
||||||||||||||||
Trading account assets:
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury, agencies and corporations
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
||||||
States and political subdivisions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total trading account securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total trading account assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Securities available for sale:
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury, agencies and corporations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
States and political subdivisions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Agency residential collateralized mortgage obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Agency residential mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Agency commercial mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other securities
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other investments:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Principal investments:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Direct
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Indirect (measured at NAV)
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total principal investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity investments:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Direct
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Direct (measured at NAV)
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total equity investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loans, net of unearned income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loans held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative assets:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange
|
$
|
|
|
|
|
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|||
Commodity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Credit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Netting adjustments
(b)
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
|
(
|
)
|
||||||||
Total derivative assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Accrued income and other assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total assets on a recurring basis at fair value
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
LIABILITIES MEASURED ON A RECURRING BASIS
|
|
|
|
|
|
|
|
|
||||||||||||||||
Bank notes and other short-term borrowings:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Short positions
|
$
|
|
|
$
|
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
Derivative liabilities:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commodity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Credit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Netting adjustments
(b)
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
|
(
|
)
|
||||||||
Total derivative liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Accrued expense and other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total liabilities on a recurring basis at fair value
|
$
|
|
|
$
|
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet.
|
(b)
|
|
•
|
Level 2 securities include municipal bonds, bonds backed by the U.S. government, corporate bonds, agency residential and CMBS, securities issued by the U.S. Treasury, money markets, and certain agency and corporate CMOs. Fair value is determined using pricing models (either by a third-party pricing service or internally) or quoted prices of similar securities.
|
•
|
Our Level 3 instruments consist principally of debt securities. The securities are valued using a cash flow analysis of the associated private company issuers based on internal models or a third party valuation service. We also employ a market approach that utilizes revenue multiples of comparable companies. We reference guideline public companies with growth prospects, margin, and risks that are comparable to the subject companies. The valuations of the securities are negatively affected by projected net losses of the associated private companies and positively affected by projected net gains.
|
|
|
|
|
Financial support provided
|
||||||||||||||||||||||||||
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||||||||
|
June 30, 2018
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||||||||||||||
in millions
|
Fair
Value
|
Unfunded
Commitments
|
|
Funded
Commitments
|
Funded
Other
|
|
Funded
Commitments
|
Funded
Other
|
|
Funded
Commitments
|
Funded
Other
|
|
Funded
Commitments
|
Funded
Other
|
||||||||||||||||
INVESTMENT TYPE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Direct investments
(a)
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
||||
Indirect investments (measured at NAV)
|
|
|
$
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
||
Total
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Our direct investments consist of equity and debt investments directly in independent business enterprises. Operations of the business enterprises are handled by management of the portfolio company. The purpose of funding these enterprises is to provide financial support for business development and acquisition strategies. We infuse equity capital based on an initial contractual cash contribution and later from additional requests on behalf of the companies’ management.
|
(b)
|
|
in millions
|
Beginning of Period Balance
|
Gains (Losses) Included in Other Comprehensive Income
|
Gains (Losses) Included in Earnings
|
Purchases
|
Sales
|
Settlements
|
Transfers Other
|
Transfers into Level 3
(a)
|
Transfers out of Level 3
(a)
|
End of Period Balance
|
Unrealized Gains (Losses) Included in Earnings
|
|||||||||||||||||||||||
Six months ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Other securities
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|||||
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Principal investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Direct
|
|
|
|
|
$
|
|
|
(b)
|
|
|
(
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
(b)
|
||||||
Equity investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Direct
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Loans held for sale
|
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loans held for investment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Interest rate
|
|
|
|
|
(
|
)
|
(d)
|
|
|
(
|
)
|
|
|
|
|
|
|
(e)
|
$
|
(
|
)
|
(e)
|
|
|
|
|
|
|||||||
Credit
|
|
|
|
|
(
|
)
|
(d)
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|||||||
Other
(f)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Three months ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Other securities
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
||||
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Principal investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Direct
|
|
|
|
|
$
|
|
|
(b)
|
|
|
(
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
|||||||
Equity investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Direct
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loans held for sale
|
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loans held for investment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Interest rate
|
|
|
|
|
(
|
)
|
(d)
|
|
|
(
|
)
|
|
|
|
|
|
|
(e)
|
|
|
(e)
|
|
|
|
|
|
||||||||
Credit
|
|
|
|
|
(
|
)
|
(d)
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|||||||
Other
(f)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in millions
|
Beginning of Period Balance
|
Gains (Losses) Included in Other Comprehensive Income
|
Gains (Losses) Included in Earnings
|
Purchases
|
Sales
|
Settlements
|
Transfers Other
|
Transfers into Level 3
(a)
|
Transfers out of Level 3
(a)
|
End of Period Balance
|
Unrealized Gains (Losses) Included in Earnings
|
||||||||||||||||||||||||||
Six months ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Other securities
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|||||||||
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Principal investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Direct
|
|
|
$
|
|
|
$
|
(
|
)
|
(b)
|
|
|
$
|
(
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(
|
)
|
(b)
|
|||||||
Derivative instruments
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Interest rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
(e)
|
$
|
(
|
)
|
(e)
|
|
|
|
|
|
|||||||||
Credit
|
|
|
|
|
(
|
)
|
(d)
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other
(f)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three months ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Other securities
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|||||||||
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Principal investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Direct
|
|
|
$
|
|
|
$
|
(
|
)
|
(b)
|
|
|
$
|
(
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
(b)
|
|||||||
Derivative instruments
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Interest rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
(e)
|
$
|
|
|
(e)
|
|
|
|
|
|
|||||||||
Credit
|
|
|
|
|
(
|
)
|
(d)
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other
(f)
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Our policy is to recognize transfers into and transfers out of Level 3 as of the end of the reporting period.
|
(b)
|
Realized and unrealized gains and losses on principal investments are reported in “other income” on the income statement.
|
(c)
|
Amounts represent Level 3 derivative assets less Level 3 derivative liabilities.
|
(d)
|
Realized and unrealized gains and losses on derivative instruments are reported in “corporate services income” and “other income” on the income statement.
|
(e)
|
Certain derivatives previously classified as Level 2 were transferred to Level 3 because Level 3 unobservable inputs became significant. Certain derivatives previously classified as Level 3 were transferred to Level 2 because Level 3 unobservable inputs became less significant.
|
(f)
|
|
|
June 30, 2018
|
|
December 31, 2017
|
|||||||||||||||||||||
in millions
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
Level 1
|
Level 2
|
Level 3
|
|
Total
|
||||||||||||||
ASSETS MEASURED ON A NONRECURRING BASIS
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Impaired loans and leases
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
|
|
|
Accrued income and other assets
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
(a)
|
|
|
|||||
Total assets on a nonrecurring basis at fair value
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
•
|
Cash flow analysis considers internally developed inputs, such as discount rates, default rates, costs of foreclosure, and changes in collateral values.
|
•
|
The fair value of the underlying collateral, which may take the form of real estate or personal property, is based on internal estimates, field observations, and assessments provided by third-party appraisers.
|
June 30, 2018
|
Fair Value of
Level 3 Assets
|
Valuation Technique
|
Significant
Unobservable Input
|
Range
(Weighted-Average)
|
||
dollars in millions
|
||||||
Recurring
|
|
|
|
|
||
Other investments — principal investments — direct:
|
$
|
|
|
Individual analysis of the
condition of each investment
|
|
|
Debt instruments
|
|
|
EBITDA multiple
|
N/A (6.93)
|
||
Equity instruments of private companies
|
|
|
EBITDA multiple
|
N/A (6.93)
|
||
Nonrecurring
|
|
|
|
|
||
Impaired loans
|
|
|
Fair value of underlying collateral
|
Discount
|
0.00 - 75.00% (22.00%)
|
December 31, 2017
|
Fair Value of
Level 3 Assets
|
Valuation Technique
|
Significant
Unobservable Input
|
Range
(Weighted-Average)
|
||
dollars in millions
|
||||||
Recurring
|
|
|
|
|
||
Other investments — principal investments — direct:
|
$
|
|
|
Individual analysis of the condition of each investment
|
|
|
Debt instruments
|
|
|
EBITDA multiple
|
N/A (6.00)
|
||
Equity instruments of private companies
|
|
|
EBITDA multiple
|
N/A (6.00)
|
||
Nonrecurring
|
|
|
|
|
||
Impaired loans
|
|
|
Fair value of underlying collateral
|
Discount
|
0.00 - 50.00% (23.00%)
|
|
June 30, 2018
|
|||||||||||||||||||||
|
|
Fair Value
|
||||||||||||||||||||
in millions
|
Carrying
Amount
|
Level 1
|
Level 2
|
Level 3
|
Measured
at NAV
|
Netting
Adjustment
|
|
Total
|
||||||||||||||
ASSETS (by measurement category)
|
|
|
|
|
|
|
|
|
||||||||||||||
Fair value - net income
|
|
|
|
|
|
|
|
|
||||||||||||||
Trading account assets
(b)
|
$
|
|
|
|
|
$
|
|
|
|
|
—
|
|
—
|
|
|
$
|
|
|
||||
Other investments
(b)
|
|
|
|
|
|
|
$
|
|
|
$
|
|
|
—
|
|
|
|
|
|||||
Loans, net of unearned income
(d)
|
|
|
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
|||||||
Loans held for sale
(b)
|
|
|
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
|||||||
Derivative assets - trading
(b)
|
|
|
$
|
|
|
|
|
|
|
—
|
|
$
|
(
|
)
|
(f)
|
|
|
|||||
Fair value - OCI
|
|
|
|
|
|
|
|
|
||||||||||||||
Securities available for sale
(b)
|
|
|
|
|
|
|
$
|
|
|
—
|
|
—
|
|
|
|
|
||||||
Derivative assets - hedging
(b)
|
|
|
|
|
|
|
|
|
—
|
|
|
|
(f)
|
|
|
|||||||
Amortized cost
|
|
|
|
|
|
|
|
|
||||||||||||||
Held-to-maturity securities
(c)
|
|
|
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
|||||||
Loans, net of unearned income
(d)
|
|
|
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
|||||||
Loans held for sale
(b)
|
|
|
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
|||||||
Other
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash and short-term investments
(a)
|
|
|
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
|||||||
LIABILITIES (by measurement category)
|
|
|
|
|
|
|
|
|
||||||||||||||
Fair value - net income
|
|
|
|
|
|
|
|
|
||||||||||||||
Derivative liabilities - trading
(b)
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
—
|
|
$
|
(
|
)
|
(f)
|
$
|
|
|
||
Fair value - OCI
|
|
|
|
|
|
|
|
|
||||||||||||||
Derivative liabilities - hedging
(b)
|
|
|
|
|
|
|
|
|
—
|
|
(
|
)
|
(f)
|
|
|
|||||||
Amortized cost
|
|
|
|
|
|
|
|
|
||||||||||||||
Time deposits
(e)
|
|
|
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
|||||||
Short-term borrowings
(a)
|
|
|
$
|
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
||||||
Long-term debt
(e)
|
|
|
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
|||||||
Other
|
|
|
|
|
|
|
|
|
||||||||||||||
Deposits with no stated maturity
(a)
|
|
|
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
|
December 31, 2017
|
|||||||||||||||||||||
|
|
Fair Value
|
||||||||||||||||||||
in millions
|
Carrying
Amount
|
Level 1
|
Level 2
|
Level 3
|
Measured
at NAV
|
Netting
Adjustment
|
|
Total
|
||||||||||||||
ASSETS (by measurement category)
|
|
|
|
|
|
|
|
|
||||||||||||||
Fair value - net income
|
|
|
|
|
|
|
|
|
||||||||||||||
Trading account assets
(b)
|
$
|
|
|
|
|
$
|
|
|
|
|
—
|
|
—
|
|
|
$
|
|
|
||||
Other investments
(b)
|
|
|
|
|
|
|
$
|
|
|
$
|
|
|
—
|
|
|
|
|
|||||
Loans, net of unearned income
(d)
|
|
|
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
|||||||
Loans held for sale
(b)
|
|
|
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
|||||||
Derivative assets - trading
(b)
|
|
|
$
|
|
|
|
|
|
|
—
|
|
$
|
(
|
)
|
(f)
|
|
|
|||||
Fair value - OCI
|
|
|
|
|
|
|
|
|
||||||||||||||
Securities available for sale
(b)
|
|
|
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
|||||||
Derivative assets - hedging
(b)
|
(
|
)
|
|
|
|
|
|
|
—
|
|
(
|
)
|
(f)
|
(
|
)
|
|||||||
Amortized cost
|
|
|
|
|
|
|
|
|
||||||||||||||
Held-to-maturity securities
(c)
|
|
|
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
|||||||
Loans, net of unearned income
(d)
|
|
|
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
|||||||
Loans held for sale
(b)
|
|
|
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
|||||||
Other
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash and short-term investments
(a)
|
|
|
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
|||||||
LIABILITIES (by measurement category)
|
|
|
|
|
|
|
|
|
||||||||||||||
Fair value - net income
|
|
|
|
|
|
|
|
|
||||||||||||||
Derivative liabilities - trading
(b)
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
—
|
|
$
|
(
|
)
|
(f)
|
$
|
|
|
||
Fair value - OCI
|
|
|
|
|
|
|
|
|
||||||||||||||
Derivative liabilities - hedging
(b)
|
|
|
|
|
|
|
|
|
—
|
|
(
|
)
|
(f)
|
|
|
|||||||
Amortized cost
|
|
|
|
|
|
|
|
|
||||||||||||||
Time deposits
(e)
|
|
|
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
|||||||
Short-term borrowings
(a)
|
|
|
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
|||||||
Long-term debt
(e)
|
|
|
|
|
$
|
|
|
|
|
—
|
|
—
|
|
|
|
|
||||||
Other
|
|
|
|
|
|
|
|
|
||||||||||||||
Deposits with no stated maturity
(a)
|
|
|
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
(a)
|
Fair value equals or approximates carrying amount. The fair value of deposits with no stated maturity does not take into consideration the value ascribed to core deposit intangibles.
|
(b)
|
Information pertaining to our methodology for measuring the fair values of these assets and liabilities is included in the sections entitled “Qualitative Disclosures of Valuation Techniques” and “Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis” in this Note. Investments accounted for under the cost method (or cost less impairment adjusted for observable price changes for certain equity investments) are classified as Level 3 assets. These investments are not actively traded in an open market as sales for these types of investments are rare. The carrying amount of the investments carried at cost are adjusted for declines in value if they are considered to be other-than-temporary (or due to observable orderly transactions of the same issuer for equity investments eligible for the cost less impairment measurement alternative). These adjustments are included in “other income” on the income statement.
|
(c)
|
Fair values of held-to-maturity securities are determined by using models that are based on security-specific details, as well as relevant industry and economic factors. The most significant of these inputs are quoted market prices, interest rate spreads on relevant benchmark securities, and certain prepayment assumptions. We review the valuations derived from the models to ensure that they are reasonable and consistent with the values placed on similar securities traded in the secondary markets.
|
(d)
|
The fair value of loans is based on the present value of the expected cash flows. The projected cash flows are based on the contractual terms of the loans, adjusted for prepayments and use of a discount rate based on the relative risk of the cash flows, taking into account the loan type, maturity of the loan, liquidity risk, servicing costs, and a required return on debt and capital. In addition, an incremental liquidity discount is applied to certain loans, using historical sales of loans during periods of similar economic conditions as a benchmark. The fair value of loans includes lease financing receivables at their aggregate carrying amount, which is equivalent to their fair value.
|
(e)
|
Fair values of time deposits and long-term debt are based on discounted cash flows utilizing relevant market inputs.
|
(f)
|
|
•
|
Loans at carrying value, net of allowance, of
$
|
•
|
Portfolio loans at fair value of
$
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||
in millions
|
Amortized
Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Fair
Value
|
|
Amortized
Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Fair
Value
|
||||||||||||||||
SECURITIES AVAILABLE FOR SALE
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury, agencies, and corporations
|
$
|
|
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
States and political subdivisions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Agency residential collateralized mortgage obligations
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Agency residential mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Agency commercial mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total securities available for sale
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
HELD-TO-MATURITY SECURITIES
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Agency residential collateralized mortgage obligations
|
$
|
|
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
Agency residential mortgage-backed securities
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Agency commercial mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total held-to-maturity securities
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Duration of Unrealized Loss Position
|
|
|
|||||||||||||||
|
Less than 12 Months
|
12 Months or Longer
|
Total
|
|||||||||||||||
in millions
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
||||||||||||
June 30, 2018
|
|
|
|
|
|
|
||||||||||||
Securities available for sale:
|
|
|
|
|
|
|
||||||||||||
U.S Treasury, agencies, and corporations
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Agency residential collateralized mortgage obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Agency residential mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Agency commercial mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Held-to-maturity securities:
|
|
|
|
|
|
|
||||||||||||
Agency residential collateralized mortgage obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Agency residential mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Agency commercial mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other securities
(a)
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||
Total temporarily impaired securities
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
December 31, 2017
|
|
|
|
|
|
|
||||||||||||
Securities available for sale:
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury, agencies, and corporations
|
$
|
|
|
$
|
|
|
|
|
|
|
$
|
|
|
$
|
|
|
||
Agency residential collateralized mortgage obligations
|
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
||||
Agency residential mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Agency commercial mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Held-to-maturity securities:
|
|
|
|
|
|
|
||||||||||||
Agency residential collateralized mortgage obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Agency residential mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Agency commercial mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other securities
(a)
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||
Total temporarily impaired securities
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
(a)
|
Gross unrealized losses totaled less than
$
|
Six months ended June 30, 2018
|
|
||
in millions
|
|
||
Balance at December 31, 2017
|
$
|
|
|
Impairment recognized in earnings
|
|
|
|
Balance at June 30, 2018
|
$
|
|
|
|
|
|
Securities
Available for Sale
|
Held to Maturity
Securities
|
||||||||||
June 30, 2018
|
Amortized
Cost
|
Fair
Value
|
Amortized
Cost
|
Fair
Value
|
||||||||
in millions
|
||||||||||||
Due in one year or less
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Due after one through five years
|
|
|
|
|
|
|
|
|
||||
Due after five through ten years
|
|
|
|
|
|
|
|
|
||||
Due after ten years
|
|
|
|
|
|
|
|
|
||||
Total
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||
|
|
Fair Value
|
|
|
Fair Value
|
||||||||||||||
in millions
|
Notional
Amount
|
Derivative
Assets
|
Derivative
Liabilities
|
|
Notional
Amount
|
Derivative
Assets
|
Derivative
Liabilities
|
||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||||||
Interest rate
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Foreign exchange
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||||||
Interest rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commodity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Credit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Netting adjustments
(b)
|
—
|
|
(
|
)
|
(
|
)
|
|
—
|
|
(
|
)
|
(
|
)
|
||||||
Net derivatives in the balance sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other collateral
(c)
|
|
|
(
|
)
|
(
|
)
|
|
|
|
(
|
)
|
(
|
)
|
||||||
Net derivative amounts
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Other derivatives include interest rate lock commitments and forward sale commitments related to our residential mortgage banking activities, forward purchase and sales contracts consisting of contractual commitments associated with “to be announced” securities and when issued securities, and when-issued security transactions in connection with an “at-the-market” equity offering program.
|
(b)
|
Netting adjustments represent the amounts recorded to convert our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance.
|
(c)
|
|
|
June 30, 2018
|
||||||
in millions
|
Balance sheet line item in which the hedge item is included
|
Carrying amount of hedged item
(a)
|
Hedge accounting basis adjustment
(b)
|
||||
Interest rate contracts
|
Long-term debt
|
$
|
|
|
$
|
(
|
)
|
Interest rate contracts
|
Certificate of deposit ($100,000 or more)
|
|
|
|
|
||
Interest rate contracts
|
Other time deposits
|
|
|
|
|
||
|
|
|
|
(a)
|
The carrying amount represents the portion of the liability designated as the hedged item.
|
(b)
|
|
|
Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships
(a)
|
|||||||||||
in millions
|
Interest expense – long-term debt
|
Interest income – loans
|
Interest expense - deposits
|
Other income
|
||||||||
Three months ended June 30, 2018
|
|
|
|
|
||||||||
Total amounts presented in the consolidated statement of income
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
|
|
|
|
|
||||||||
Net gains (losses) on fair value hedging relationships
|
|
|
|
|
||||||||
Interest contracts
|
|
|
|
|
||||||||
Recognized on hedged items
|
|
|
|
|
|
|
|
|
||||
Recognized on derivatives designated as hedging instruments
|
(
|
)
|
|
|
|
|
|
|
||||
Net income (expense) recognized on fair value hedges
|
(
|
)
|
|
|
|
|
|
|
||||
Net gain (loss) on cash flow hedging relationships
|
|
|
|
|
||||||||
Interest contracts
|
|
|
|
|
||||||||
Realized gains (losses) (pre-tax) reclassified from AOCI into net income
|
|
|
(
|
)
|
|
|
|
|
||||
Net income (expense) recognized on cash flow hedges
|
$
|
|
|
$
|
(
|
)
|
|
|
|
|
||
|
|
|
|
|
||||||||
Three months ended June 30, 2017
|
|
|
|
|
||||||||
Total amounts presented in the consolidated statement of income
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
|
|
|
|
|
||||||||
Net gains (losses) on fair value hedging relationships
|
|
|
|
|
||||||||
Interest contracts
|
|
|
|
|
||||||||
Recognized on hedged items
|
|
|
|
|
|
|
(
|
)
|
||||
Recognized on derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
||||
Net income (expense) recognized on fair value hedges
|
|
|
|
|
|
|
|
|
||||
Net gain (loss) on cash flow hedging relationships
|
|
|
|
|
||||||||
Interest contracts
|
|
|
|
|
||||||||
Realized gains (losses) (pre-tax) reclassified from AOCI into net income
|
(
|
)
|
|
|
|
|
|
|
||||
Gains (losses) (before tax) recognized in income for hedge ineffectiveness
|
|
|
|
|
|
|
|
|
||||
Net income (expense) recognized on cash flow hedges
|
$
|
(
|
)
|
$
|
|
|
|
|
|
|
||
|
|
|
|
|
|
Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships
(a)
|
|||||||||||
in millions
|
Interest expense – long-term debt
|
Interest income – loans
|
Interest expense - deposits
|
Other income
|
||||||||
Six months ended June 30, 2018
|
|
|
|
|
||||||||
Total amounts presented in the consolidated statement of income
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
|
|
|
|
|
||||||||
Net gains (losses) on fair value hedging relationships
|
|
|
|
|
||||||||
Interest contracts
|
|
|
|
|
||||||||
Recognized on hedged items
|
|
|
|
|
|
|
|
|
||||
Recognized on derivatives designated as hedging instruments
|
(
|
)
|
|
|
|
|
|
|
||||
Net income (expense) recognized on fair value hedges
|
(
|
)
|
|
|
|
|
|
|
||||
Net gain (loss) on cash flow hedging relationships
|
|
|
|
|
||||||||
Interest contracts
|
|
|
|
|
||||||||
Realized gains (losses) (pre-tax) reclassified from AOCI into net income
|
|
|
(
|
)
|
|
|
|
|
||||
Net income (expense) recognized on cash flow hedges
|
$
|
|
|
$
|
(
|
)
|
|
|
|
|
||
|
|
|
|
|
||||||||
Six months ended June 30, 2017
|
|
|
|
|
||||||||
Total amounts presented in the consolidated statement of income
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
|
|
|
|
|
||||||||
Net gains (losses) on fair value hedging relationships
|
|
|
|
|
||||||||
Interest contracts
|
|
|
|
|
||||||||
Recognized on hedged items
|
|
|
|
|
|
|
|
|
||||
Recognized on derivatives designated as hedging instruments
|
|
|
|
|
|
|
(
|
)
|
||||
Net income (expense) recognized on fair value hedges
|
|
|
|
|
|
|
|
|
||||
Net gain (loss) on cash flow hedging relationships
|
|
|
|
|
||||||||
Interest contracts
|
|
|
|
|
||||||||
Realized gains (losses) (pre-tax) reclassified from AOCI into net income
|
(
|
)
|
|
|
|
|
|
|
||||
Gains (losses) (before tax) recognized in income for hedge ineffectiveness
|
|
|
|
|
|
|
|
|
||||
Net income (expense) recognized on cash flow hedges
|
$
|
(
|
)
|
$
|
|
|
|
|
|
|
||
|
|
|
|
|
(a)
|
Prior period gain or loss amounts were not restated to conform to the new hedge accounting guidance adopted in 2018.
|
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)
|
Net Gains (Losses) Recognized in Other Income
(a)
|
||||||
Three months ended June 30, 2018
|
|
|
|
|
||||||
Cash Flow Hedges
|
|
|
|
|
||||||
Interest rate
|
$
|
(
|
)
|
Interest income — Loans
|
$
|
(
|
)
|
$
|
|
|
Interest rate
|
|
|
Interest expense — Long-term debt
|
|
|
|
|
|||
Interest rate
|
|
|
Investment banking and debt placement fees
|
|
|
|
|
|||
Net Investment Hedges
|
|
|
|
|
||||||
Foreign exchange contracts
|
|
|
Other Income
|
|
|
|
|
|||
Total
|
$
|
(
|
)
|
|
$
|
(
|
)
|
$
|
|
|
Three months ended June 30, 2017
|
|
|
|
|
||||||
Cash Flow Hedges
|
|
|
|
|
||||||
Interest rate
|
$
|
|
|
Interest income — Loans
|
$
|
|
|
$
|
|
|
Interest rate
|
|
|
Interest expense — Long-term debt
|
(
|
)
|
|
|
|||
Interest rate
|
|
|
Investment banking and debt placement fees
|
|
|
|
|
|||
Net Investment Hedges
|
|
|
|
|
||||||
Foreign exchange contracts
|
(
|
)
|
Other Income
|
|
|
|
|
|||
Total
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
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)
|
Net Gains (Losses) Recognized in Other Income
(a)
|
||||||
Six months ended June 30, 2018
|
|
|
|
|
||||||
Cash Flow Hedges
|
|
|
|
|
||||||
Interest rate
|
$
|
(
|
)
|
Interest income — Loans
|
$
|
(
|
)
|
$
|
|
|
Interest rate
|
|
|
Interest expense — Long-term debt
|
|
|
|
|
|||
Interest rate
|
|
|
Investment banking and debt placement fees
|
|
|
|
|
|||
Net Investment Hedges
|
|
|
|
|
||||||
Foreign exchange contracts
|
|
|
Other Income
|
|
|
|
|
|||
Total
|
$
|
(
|
)
|
|
$
|
(
|
)
|
$
|
|
|
Six months ended June 30, 2017
|
|
|
|
|
||||||
Cash Flow Hedges
|
|
|
|
|
||||||
Interest rate
|
$
|
|
|
Interest income — Loans
|
$
|
|
|
$
|
|
|
Interest rate
|
|
|
Interest expense — Long-term debt
|
(
|
)
|
|
|
|||
Interest rate
|
|
|
Investment banking and debt placement fees
|
|
|
|
|
|||
Net Investment Hedges
|
|
|
|
|
||||||
Foreign exchange contracts
|
(
|
)
|
Other Income
|
|
|
|
|
|||
Total
|
$
|
(
|
)
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
(a)
|
|
|
Three months ended June 30, 2018
|
|
Three months ended June 30, 2017
|
||||||||||||||||||||||
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
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
|
$
|
(
|
)
|
$
|
|
|
|
Foreign exchange
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commodity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Credit
|
|
|
|
|
(
|
)
|
(
|
)
|
|
|
|
|
|
(
|
)
|
(
|
)
|
||||||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
(
|
)
|
(
|
)
|
|||||||
Total net gains (losses)
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, 2018
|
|
Six months ended June 30, 2017
|
||||||||||||||||||||||
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
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
|
|
$
|
(
|
)
|
$
|
|
|
|
Foreign exchange
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commodity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Credit
|
|
|
|
|
(
|
)
|
(
|
)
|
|
|
|
|
|
(
|
)
|
(
|
)
|
||||||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
(
|
)
|
(
|
)
|
|||||||
Total net gains (losses)
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
in millions
|
June 30, 2018
|
|
December 31, 2017
|
|
||
Interest rate
|
$
|
|
|
$
|
|
|
Foreign exchange
|
|
|
|
|
||
Commodity
|
|
|
|
|
||
Credit
|
|
|
|
|
||
Other
|
|
|
|
|
||
Derivative assets before collateral
|
|
|
|
|
||
Less: Related collateral
|
(
|
)
|
(
|
)
|
||
Total derivative assets
|
$
|
|
|
$
|
|
|
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||
in millions
|
Purchased
|
Sold
|
Net
|
|
Purchased
|
Sold
|
Net
|
||||||||||
Single-name credit default swaps
|
$
|
(
|
)
|
|
|
$
|
(
|
)
|
|
$
|
(
|
)
|
|
|
$
|
(
|
)
|
Traded credit default swap indices
|
(
|
)
|
|
|
(
|
)
|
|
(
|
)
|
|
|
(
|
)
|
||||
Other
|
|
|
(
|
)
|
(
|
)
|
|
|
|
|
|
|
|
||||
Total credit derivatives
|
$
|
(
|
)
|
(
|
)
|
$
|
(
|
)
|
|
$
|
(
|
)
|
|
|
$
|
(
|
)
|
|
|
|
|
|
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||
dollars in millions
|
Notional
Amount
|
Average
Term
(Years)
|
Payment /
Performance
Risk
|
|
Notional
Amount
|
Average
Term
(Years)
|
Payment /
Performance
Risk
|
||||||||
Other
|
$
|
|
|
|
|
|
%
|
|
$
|
|
|
|
|
|
%
|
Total credit derivatives sold
|
$
|
|
|
—
|
|
|
|
|
$
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||
in millions
|
Moody’s
|
S&P
|
|
Moody’s
|
S&P
|
||||||||
KeyBank’s long-term senior unsecured credit ratings
|
A3
|
|
A-
|
|
|
A3
|
|
A-
|
|
||||
One rating downgrade
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Two rating downgrades
|
|
|
|
|
|
|
|
|
|
||||
Three rating downgrades
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||
in millions
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
||||
Balance at beginning of period
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Servicing retained from loan sales
|
|
|
|
|
|
|
|
|
|
||||
Purchases
|
|
|
|
|
|
|
|
|
|
||||
Amortization
|
(
|
)
|
(
|
)
|
|
(
|
)
|
(
|
)
|
||||
Balance at end of period
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Fair value at end of period
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
dollars in millions
|
|
June 30, 2018
|
|
June 30, 2017
|
|
Valuation Technique
|
Significant
Unobservable Input
|
Range
(Weighted Average)
|
|||
Discounted cash flow
|
Expected defaults
|
1.00 - 3.00% (1.17%)
|
|
1.00 - 3.00% (1.30%)
|
|
|
Residual cash flows discount rate
|
7.00 - 15.00% (9.06%)
|
|
7.00 - 15.00% (8.80%)
|
|
|
Escrow earn rate
|
2.40 - 3.82% (3.10%)
|
|
1.50 - 3.10% (2.50%)
|
|
|
Servicing cost
|
$150 - $38,500 ($1,431)
|
|
$150 - $38,500 ($1,457)
|
|
|
Loan assumption rate
|
0.00 - 3.00% (1.19%)
|
|
0.00 - 3.00% (1.24%)
|
|
|
Percentage late
|
0.00 - 2.00% (.22%)
|
|
0.00 - 2.00% (.29%)
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||
in millions
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
||||
Balance at beginning of period
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Servicing retained from loan sales
|
|
|
|
|
|
|
|
|
|
||||
Purchases
|
|
|
|
|
|
|
|
|
|
||||
Amortization
|
(
|
)
|
(
|
)
|
|
(
|
)
|
(
|
)
|
||||
Balance at end of period
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Fair value at end of period
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
dollars in millions
|
|
June 30, 2018
|
|
June 30, 2017
|
|
Valuation Technique
|
Significant
Unobservable Input
|
Range
(Weighted Average)
|
|||
Discounted cash flow
|
Prepayment speed
|
8.39 - 49.39% (9.17%)
|
|
7.85 - 21.72% (9.42%)
|
|
|
Discount rate
|
8.50 - 11.00% (8.54%)
|
|
8.50 - 11.00% (8.55%)
|
|
|
Servicing cost
|
$76 - $4,385 ($82.38)
|
|
$76 - $3,335 ($82.18)
|
•
|
The entity does not have sufficient equity to conduct its activities without additional subordinated financial support from another party.
|
•
|
The entity’s investors lack the power to direct the activities that most significantly affect the entity’s economic performance.
|
•
|
The entity’s equity at risk holders do not have the obligation to absorb losses or the right to receive residual returns.
|
•
|
The voting rights of some investors are not proportional to their economic interests in the entity, and substantially all of the entity’s activities involve, or are conducted on behalf of, investors with disproportionately few voting rights.
|
|
Unconsolidated VIEs
|
||||||||
in millions
|
Total
Assets
|
Total
Liabilities
|
Maximum
Exposure to Loss
|
||||||
June 30, 2018
|
|
|
|
||||||
LIHTC investments
|
$
|
|
|
$
|
|
|
$
|
|
|
December 31, 2017
|
|
|
|
||||||
LIHTC investments
|
$
|
|
|
$
|
|
|
$
|
|
|
|
Unconsolidated VIEs
|
||||||||
in millions
|
Total
Assets
|
Total
Liabilities
|
Maximum
Exposure to Loss
|
||||||
June 30, 2018
|
|
|
|
||||||
Indirect investments
|
$
|
|
|
$
|
|
|
$
|
|
|
December 31, 2017
|
|
|
|
||||||
Indirect investments
|
$
|
|
|
$
|
|
|
$
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
in millions
|
Gross Amount
Presented in
Balance Sheet
|
Netting
Adjustments
(a)
|
Collateral
(b)
|
Net
Amounts
|
|
Gross Amount
Presented in
Balance Sheet
|
Netting
Adjustments
(a)
|
Collateral
(b)
|
Net
Amounts
|
||||||||||||||
Offsetting of financial assets:
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Reverse repurchase agreements
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
|
|
|
$
|
|
|
$
|
(3
|
)
|
—
|
|
—
|
|
|
Total
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
|
|
|
$
|
3
|
|
$
|
(3
|
)
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Offsetting of financial liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Repurchase agreements
(c)
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
|
|
|
$
|
374
|
|
$
|
(4
|
)
|
$
|
(370
|
)
|
—
|
|
Total
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
|
|
|
$
|
374
|
|
$
|
(4
|
)
|
$
|
(370
|
)
|
—
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Netting adjustments take into account the impact of master netting agreements that allow us to settle with a single counterparty on a net basis.
|
(b)
|
These adjustments take into account the impact of bilateral collateral agreements that allow us to offset the net positions with the related collateral. The application of collateral cannot reduce the net position below zero. Therefore, excess collateral, if any, is not reflected above.
|
(c)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||
in millions
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
||||
Interest cost on PBO
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Expected return on plan assets
|
(
|
)
|
(
|
)
|
|
(
|
)
|
(
|
)
|
||||
Amortization of losses
|
|
|
|
|
|
|
|
|
|
||||
Net pension cost
|
$
|
|
|
$
|
(
|
)
|
|
$
|
|
|
$
|
(
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
required distributions on the trust preferred securities;
|
•
|
the redemption price when a capital security is redeemed; and
|
•
|
the amounts due if a trust is liquidated or terminated.
|
dollars in millions
|
Trust Preferred Securities, Net of Discount
(a)
|
Common Stock
|
Principal Amount of Debentures, Net of Discount
(b)
|
Interest Rate of Trust Preferred Securities and Debentures
(c)
|
Maturity of Trust Preferred Securities and Debentures
|
||||||||
June 30, 2018
|
|
|
|
|
|
||||||||
KeyCorp Capital I
|
$
|
|
|
$
|
|
|
$
|
|
|
|
%
|
2028
|
|
KeyCorp Capital II
|
|
|
|
|
|
|
|
|
2029
|
|
|||
KeyCorp Capital III
|
|
|
|
|
|
|
|
|
2029
|
|
|||
HNC Statutory Trust III
|
|
|
|
|
|
|
|
|
2035
|
|
|||
Willow Grove Statutory Trust I
|
|
|
|
|
|
|
|
|
2036
|
|
|||
HNC Statutory Trust IV
|
|
|
|
|
|
|
|
|
2037
|
|
|||
Westbank Capital Trust II
|
|
|
|
|
|
|
|
|
2034
|
|
|||
Westbank Capital Trust III
|
|
|
|
|
|
|
|
|
2034
|
|
|||
Total
|
$
|
|
|
$
|
|
|
$
|
|
|
|
%
|
—
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
$
|
|
|
$
|
|
|
$
|
|
|
|
%
|
—
|
|
|
|
|
|
|
|
(a)
|
The trust preferred securities must be redeemed when the related debentures mature, or earlier if provided in the governing indenture. Each issue of trust preferred securities carries an interest rate identical to that of the related debenture. Certain trust preferred securities include basis adjustments related to fair value hedges totaling
$
|
(b)
|
We have the right to redeem these debentures. If the debentures purchased by KeyCorp Capital I, HNC Statutory Trust III, Willow Grove Statutory Trust I, HNC Statutory Trust IV, Westbank Capital Trust II, or Westbank Capital Trust III are redeemed before they mature, the redemption price will be the principal amount, plus any accrued but unpaid interest. If the debentures purchased by KeyCorp Capital II or KeyCorp Capital III are redeemed before they mature, the redemption price will be the greater of: (i) the principal amount, plus any accrued but unpaid interest, or (ii) the sum of the present values of principal and interest payments discounted at the Treasury Rate (as defined in the applicable indenture), plus 20 basis points for KeyCorp Capital II or 25 basis points for KeyCorp Capital III, or 50 basis points in the case of redemption upon either a tax or a capital treatment event for either KeyCorp Capital II or KeyCorp Capital III, plus any accrued but unpaid interest. The principal amount of certain debentures includes basis adjustments related to fair value hedges totaling
$
|
(c)
|
|
June 30, 2018
|
Maximum Potential Undiscounted Future Payments
|
Liability Recorded
|
||||
in millions
|
||||||
Financial guarantees:
|
|
|
||||
Standby letters of credit
|
$
|
|
|
$
|
|
|
Recourse agreement with FNMA
|
|
|
|
|
||
Residential mortgage reserve
|
|
|
|
|
||
Return guarantee agreement with LIHTC investors
|
|
|
|
|
||
Written put options
(a)
|
|
|
|
|
||
Total
|
$
|
|
|
$
|
|
|
|
|
|
(a)
|
|
in millions
|
Unrealized gains (losses) on securities available for sale
|
Unrealized gains (losses) on derivative financial instruments
|
Foreign currency translation adjustment
|
Net pension and postretirement benefit costs
|
Total
|
||||||||||
Balance at December 31, 2017
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
Other comprehensive income before reclassification, net of income taxes
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
|||||
Amounts reclassified from AOCI, net of income taxes
(a)
|
|
|
|
|
|
|
|
|
|
|
|||||
Other amounts reclassified from AOCI, net of income taxes
|
|
|
|
|
(
|
)
|
|
|
(
|
)
|
|||||
Net current-period other comprehensive income, net of income taxes
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
|||||
Balance at June 30, 2018
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|
|
|
|
|
|
||||||||||
Balance at March 31, 2018
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
Other comprehensive income before reclassification, net of income taxes
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
|||||
Amounts reclassified from AOCI, net of income taxes
(a)
|
|
|
|
|
|
|
|
|
|
|
|||||
Other amounts reclassified from AOCI, net of income taxes
|
|
|
|
|
(
|
)
|
|
|
(
|
)
|
|||||
Net current-period other comprehensive income, net of income taxes
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
|||||
Balance at June 30, 2018
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2016
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
Other comprehensive income before reclassification, net of income taxes
|
|
|
(
|
)
|
|
|
|
|
|
|
|||||
Amounts reclassified from AOCI, net of income taxes
(a)
|
|
|
(
|
)
|
|
|
|
|
(
|
)
|
|||||
Net current-period other comprehensive income, net of income taxes
|
|
|
(
|
)
|
|
|
|
|
|
|
|||||
Balance at June 30, 2017
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
|
|
|
|
|
|
||||||||||
Balance at March 31, 2017
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|
Other comprehensive income before reclassification, net of income taxes
|
|
|
|
|
|
|
(
|
)
|
|
|
|||||
Amounts reclassified from AOC, net of income taxes
(a)
|
|
|
(
|
)
|
|
|
|
|
|
|
|||||
Net current-period other comprehensive income, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance at June 30, 2017
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
|
|
|
|
|
|
(a)
|
|
|
Six months ended June 30,
|
Affected Line Item in the Statement Where Net Income is Presented
|
|||||
in millions
|
2018
|
2017
|
|||||
Unrealized gains (losses) on derivative financial instruments
|
|
|
|
||||
Interest rate
|
$
|
(
|
)
|
$
|
|
|
Interest income — Loans
|
Interest rate
|
|
|
(
|
)
|
Interest expense — Long-term debt
|
||
|
(
|
)
|
|
|
Income (loss) from continuing operations before income taxes
|
||
|
(
|
)
|
|
|
Income taxes
|
||
|
$
|
(
|
)
|
$
|
|
|
Income (loss) from continuing operations
|
Net pension and postretirement benefit costs
|
|
|
|
||||
Amortization of losses
|
$
|
(
|
)
|
$
|
(
|
)
|
Personnel expense
|
|
(
|
)
|
(
|
)
|
Income (loss) from continuing operations before income taxes
|
||
|
(
|
)
|
(
|
)
|
Income taxes
|
||
|
$
|
(
|
)
|
$
|
(
|
)
|
Income (loss) from continuing operations
|
|
|
|
|
|
Three months ended June 30,
|
Affected Line Item in the Statement Where Net Income is Presented
|
|||||
in millions
|
2018
|
2017
|
|||||
Unrealized gains (losses) on derivative financial instruments
|
|
|
|
||||
Interest rate
|
$
|
(
|
)
|
$
|
|
|
Interest income — Loans
|
Interest rate
|
|
|
(
|
)
|
Interest expense — Long-term debt
|
||
|
(
|
)
|
|
|
Income (loss) from continuing operations before income taxes
|
||
|
(
|
)
|
|
|
Income taxes
|
||
|
$
|
(
|
)
|
|
|
Income (loss) from continuing operations
|
|
Net pension and postretirement benefit costs
|
|
|
|
||||
Amortization of losses
|
$
|
(
|
)
|
(
|
)
|
Personnel expense
|
|
|
(
|
)
|
(
|
)
|
Income (loss) from continuing operations before income taxes
|
||
|
(
|
)
|
(
|
)
|
Income taxes
|
||
|
$
|
(
|
)
|
$
|
(
|
)
|
Income (loss) from continuing operations
|
|
|
|
|
|
|
|
|
|
|
||||||||
Three months ended June 30,
|
Key Community Bank
|
|
Key Corporate Bank
|
||||||||||
dollars in millions
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
||||
SUMMARY OF OPERATIONS
|
|
|
|
|
|
||||||||
Net interest income (TE)
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Noninterest income
|
|
|
|
|
|
|
|
|
|
||||
Total revenue (TE)
(a)
|
|
|
|
|
|
|
|
|
|
||||
Provision for credit losses
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization expense
|
|
|
|
|
|
|
|
|
|
||||
Other noninterest expense
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) from continuing operations before income taxes (TE)
|
|
|
|
|
|
|
|
|
|
||||
Allocated income taxes and TE adjustments
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) from continuing operations
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) from discontinued operations, net of taxes
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss)
|
|
|
|
|
|
|
|
|
|
||||
Less: Net income (loss) attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to Key
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
||||||||
AVERAGE BALANCES
(b)
|
|
|
|
|
|
||||||||
Loans and leases
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Total assets
(a)
|
|
|
|
|
|
|
|
|
|
||||
Deposits
|
|
|
|
|
|
|
|
|
|
||||
OTHER FINANCIAL DATA
|
|
|
|
|
|
||||||||
Net loan charge-offs
(b)
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Return on average allocated equity
(b)
|
|
%
|
|
%
|
|
|
%
|
|
%
|
||||
Return on average allocated equity
|
|
|
|
|
|
|
|
|
|
||||
Average full-time equivalent employees
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Six months ended June 30,
|
Key Community Bank
|
|
Key Corporate Bank
|
||||||||||
dollars in millions
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
||||
SUMMARY OF OPERATIONS
|
|
|
|
|
|
||||||||
Net interest income (TE)
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Noninterest income
|
|
|
|
|
|
|
|
|
|
||||
Total revenue (TE)
(a)
|
|
|
|
|
|
|
|
|
|
||||
Provision for credit losses
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization expense
|
|
|
|
|
|
|
|
|
|
||||
Other noninterest expense
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) from continuing operations before income taxes (TE)
|
|
|
|
|
|
|
|
|
|
||||
Allocated income taxes and TE adjustments
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) from continuing operations
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) from discontinued operations, net of taxes
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss)
|
|
|
|
|
|
|
|
|
|
||||
Less: Net income (loss) attributable to noncontrolling interests
|
|
|
|
|
|
|
|
(
|
)
|
||||
Net income (loss) attributable to Key
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
||||||||
AVERAGE BALANCES
(b)
|
|
|
|
|
|
||||||||
Loans and leases
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Total assets
(a)
|
|
|
|
|
|
|
|
|
|
||||
Deposits
|
|
|
|
|
|
|
|
|
|
||||
OTHER FINANCIAL DATA
|
|
|
|
|
|
||||||||
Net loan charge-offs
(b)
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Return on average allocated equity
(b)
|
|
%
|
|
%
|
|
|
%
|
|
%
|
||||
Return on average allocated equity
|
|
|
|
|
|
|
|
|
|
||||
Average full-time equivalent employees
(c)
|
|
|
|
|
|
|
|
|
|
(a)
|
Substantially all revenue generated by our major business segments is derived from clients that reside in the United States. Substantially all long-lived assets, including premises and equipment, capitalized software, and goodwill held by our major business segments, are located in the United States.
|
(b)
|
From continuing operations.
|
(c)
|
The number of average full-time equivalent employees was not adjusted for discontinued operations.
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other Segments
|
|
Total Segments
|
|
Reconciling Items
|
|
Key
|
||||||||||||||||||||
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
(
|
)
|
$
|
(
|
)
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
||||||||
(
|
)
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
(
|
)
|
(
|
)
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
||||||||
(
|
)
|
(
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
(
|
)
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|||
|
%
|
|
%
|
|
|
%
|
|
%
|
|
|
%
|
(
|
)%
|
|
|
%
|
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other Segments
|
|
Total Segments
|
|
Reconciling Items
|
|
Key
|
||||||||||||||||||||
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
(
|
)
|
$
|
(
|
)
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
||||||||
(
|
)
|
|
|
|
|
|
|
|
|
(
|
)
|
(
|
)
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
||||||||
(
|
)
|
(
|
)
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
(
|
)
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
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(
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)
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$
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$
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$
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$
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$
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%
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%
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%
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%
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%
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(
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)%
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%
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%
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(
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)
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Three months ended June 30, 2018
|
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||||||
dollars in millions
|
Key Community Bank
|
Key Corporate Bank
|
Total Contract Revenue
|
||||||
NONINTEREST INCOME
|
|
|
|
||||||
Trust and investment services income
|
$
|
|
|
$
|
|
|
$
|
|
|
Investment banking and debt placement fees
|
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Services charges on deposit accounts
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Cards and payments income
|
|
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|
|||
Other noninterest income
|
|
|
|
|
|
|
|||
Total revenue from contracts with customers
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
||||||
Other noninterest income
(a)
|
|
|
$
|
|
|
||||
Noninterest income from other segments
(b)
|
|
|
|
|
|||||
Reconciling items
(c)
|
|
|
|
|
|||||
Total noninterest income
|
|
|
$
|
|
|
||||
|
|
|
|
(a)
|
Noninterest income considered earned outside the scope of contracts with customers.
|
(b)
|
Other Segments consist of corporate treasury, our principle investing unit, and various exit portfolios.
|
(c)
|
Reconciling items consists primarily of the gain on the sale of, and contract revenue recognized prior to the sale of, Key Insurance and Benefits Services for the second quarter of 2018, intercompany eliminations, and items not allocated to the business segments because they do not reflect their normal operations. Refer to the Line of Business Results footnote for more information.
|
Six months ended June 30, 2018
|
|
|
|
||||||
dollars in millions
|
Key Community Bank
|
Key Corporate Bank
|
Total Contract Revenue
|
||||||
NONINTEREST INCOME
|
|
|
|
||||||
Trust and investment services income
|
$
|
|
|
$
|
|
|
$
|
|
|
Investment banking and debt placement fees
|
|
|
|
|
|
|
|||
Services charges on deposit accounts
|
|
|
|
|
|
|
|||
Cards and payments income
|
|
|
|
|
|
|
|||
Other noninterest income
|
|
|
|
|
|
|
|||
Total revenue from contracts with customers
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
||||||
Other noninterest income
(a)
|
|
|
$
|
|
|
||||
Noninterest income from other segments
(b)
|
|
|
|
|
|||||
Reconciling items
(c)
|
|
|
|
|
|||||
Total noninterest income
|
|
|
$
|
|
|
||||
|
|
|
|
(a)
|
Noninterest income considered earned outside the scope of contracts with customers.
|
(b)
|
Other Segments consist of corporate treasury, our principle investing unit, and various exit portfolios.
|
(c)
|
|
![]() |
|
Cleveland, Ohio
|
|
August 2, 2018
|
|
Item 3.
|
Quantitative and Qualitative Disclosure about Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Calendar month
|
Total number of shares
purchased (a) |
|
Average price paid
per share
|
|
Total number of shares purchased as
part of publicly announced plans or
programs
|
|
Maximum number of shares that may
yet be purchased as part of publicly
announced plans or programs
(b)
|
||||
April 1-30
|
3,273,028
|
|
|
20.18
|
|
|
3,273,028
|
|
|
7,298,667
|
|
May 1-31
|
1,518,275
|
|
|
19.78
|
|
|
1,518,275
|
|
|
5,934,115
|
|
June 1-30
|
1,313,768
|
|
|
20.57
|
|
|
1,313,768
|
|
|
4,315,761
|
|
Total
|
6,105,071
|
|
|
20.17
|
|
|
6,105,071
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Includes Common Shares deemed surrendered by employees in connection with our stock compensation and benefit plans to satisfy tax obligations.
|
(b)
|
Calculated using the remaining general repurchase amount divided by the closing price of KeyCorp Common Shares as follows: on April 30, 2018 at
$19.92
; on May 31, 2018, at
$19.44
; and on June 30, 2018, at
$19.54
.
|
|
|
|
|
|
|
|
|
|
|
|
|
101
|
The following materials from KeyCorp’s Form 10-Q Report for the quarterly period ended June 30, 2018, formatted in XBRL: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Income and Consolidated Statements of Comprehensive Income; (iii) the Consolidated Statements of Changes in Equity; (iv) the Consolidated Statements of Cash Flows; and (v) the Notes to Consolidated Financial Statements.
|
*
|
Furnished herewith.
|
|
KEYCORP
|
|
(Registrant)
|
|
|
Date: August 2, 2018
|
/s/ Douglas M. Schosser
|
|
By: Douglas M. Schosser
|
|
Chief Accounting Officer
(Principal Accounting Officer)
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
---|
DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
---|
No information found
Customers
Customer name | Ticker |
---|---|
Simon Property Group, Inc. | SPG |
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
---|