v3.26.1
Asset Quality
 12 Months Ended
Dec. 31, 2025
Credit Loss [Abstract]  
Asset Quality
4. Asset Quality
ALLL

We estimate the appropriate level of the ALLL on at least a quarterly basis. The methodology is described in Note 1 ("Summary of Significant Accounting Policies") under the heading "Allowance for Loan and Lease Losses" of this report.

The ALLL at December 31, 2025, represents our current estimate of lifetime credit losses inherent in the loan portfolio at that date. The changes in the ALLL by loan category for the periods indicated are as follows:

Twelve Months Ended December 31, 2025:
Dollars in millionsDecember 31, 2024ProvisionCharge-offsRecoveriesDecember 31, 2025
Commercial and Industrial $639 $361 $(312)$57 $745 
Commercial real estate:
Real estate — commercial mortgage320 19 (94)7 252 
Real estate — construction51 4 — — 55 
Total commercial real estate loans371 23 (94)7 307 
Commercial lease financing27 5 (6)— 26 
Total commercial loans1,037 389 (412)64 1,078 
Real estate — residential mortgage90 (26)(2)4 66 
Home equity loans70 (19)(2)3 52 
Other consumer loans136 61 (56)8 149 
Credit cards76 43 (45)8 82 
Total consumer loans372 59 (105)23 349 
Total ALLL — continuing operations1,409 448 
(a)
(517)87 1,427 
Discontinued operations13 — (3)1 11 
Total ALLL — including discontinued operations$1,422 $448 $(520)$88 $1,438 
(a)Excludes a provision related to reserves on lending-related commitments of $23 million.
Twelve Months Ended December 31, 2024:
Dollars in millionsDecember 31, 2023ProvisionCharge-offsRecoveriesDecember 31, 2024
Commercial and Industrial $556 $388 $(363)$58 $639 
Commercial real estate:
Real estate — commercial mortgage419 (61)(40)2 320 
Real estate — construction52 (1)— — 51 
Total commercial real estate loans471 (62)(40)2 371 
Commercial lease financing33 (4)(7)5 27 
Total commercial loans1,060 322 (410)65 1,037 
Real estate — residential mortgage162 (74)(3)5 90 
Home equity loans86 (16)(2)2 70 
Other consumer loans122 70 (64)8 136 
Credit cards78 39 (47)6 76 
Total consumer loans448 19 (116)21 372 
Total ALLL — continuing operations1,508 341 
(a)
(526)86 1,409 
Discontinued operations16 — (4)1 13 
Total ALLL — including discontinued operations$1,524 $341 $(530)$87 $1,422 
(a)Excludes a credit related to reserves on lending-related commitments of $6 million.

Twelve Months Ended December 31, 2023
Dollars in millionsDecember 31, 2022Provision Charge-offsRecoveriesDecember 31, 2023
Commercial and industrial$601 $99   $(188)$44 $556 
Commercial real estate:
Real estate — commercial mortgage203 253 (39)2 419 
Real estate — construction28 23 — 1 52 
Total commercial real estate loans231 276 (39)3 471 
Commercial lease financing32 (4)— 5 33 
Total commercial loans864 371 (227)52 1,060 
Real estate — residential mortgage196 (37)(1)4 162 
Home equity loans98 (13)(2)3 86 
Other consumer loans113 52   (51)8 122 
Credit cards66 42   (37)7 78 
Total consumer loans473 44   (91)22 448 
Total ALLL — continuing operations1,337 415 
(a)
(318)74 1,508 
Discontinued operations21 (2)  (4)1 16 
Total ALLL — including discontinued operations$1,358 $413 $(322)$75 $1,524 
(a)Excludes a provision related to reserves on lending-related commitments of $74 million.

As described in Note 1 ("Summary of Significant Accounting Policies"), we estimate the ALLL using relevant available information, from internal and external sources, relating to past events, current economic and portfolio conditions, and reasonable and supportable forecasts. In our estimation of expected credit losses, we use a two year reasonable and supportable period across all products. Following this two year period in which supportable forecasts can be generated, for all modeled loan portfolios, we revert expected credit losses to a level that is consistent with our historical information by reverting the macroeconomic variables (model inputs) to their long run average. We revert to historical loss rates for less complex estimation methods for smaller portfolios. A 20-year fixed length look back period is used to calculate the long run average of the macroeconomic variables. A four quarter reversion period is used where the macroeconomic variables linearly revert to their long run average following the two year reasonable and supportable period.

We develop our reasonable and supportable forecasts using relevant data including, but not limited to, changes in economic output, unemployment rates, property values, and other factors associated with the credit losses on financial assets. Some macroeconomic variables apply to all portfolio segments, while others are more portfolio specific. The following table discloses key macroeconomic variables for each loan portfolio.
SegmentPortfolio
Key Macroeconomic Variables (a)
CommercialCommercial and industrialBBB corporate bond rate (spread), fixed investment, business bankruptcies, GDP, industrial production, unemployment rate, and Producer Price Index
Commercial real estateProperty & real estate price indices, unemployment rate, business bankruptcies, GDP, and SOFR
Commercial lease financingBBB corporate bond rate (spread), GDP, and unemployment rate
ConsumerReal estate — residential mortgageGDP, home price index, unemployment rate, 30 year mortgage rate and U.S. household income
Home equityHome price index, unemployment rate, and 30 year mortgage rate
Other consumerUnemployment rate, prime rate and U.S. household income
Credit cardsUnemployment rate and U.S. household income
Discontinued operationsUnemployment rate
(a)Variables include all transformations and interactions with other risk drivers. Additionally, variables may have varying impacts at different points in the economic cycle.

In addition to macroeconomic drivers, portfolio attributes such as remaining term, outstanding balance, risk ratings, utilization, FICO, LTV, and delinquency also drive ALLL changes. Our ALLL models were designed to capture the correlation between economic and portfolio changes. As such, evaluating shifts in individual portfolio attributes and macroeconomic variables in isolation may not be indicative of past or future performance.

Economic Outlook

As of December 31, 2025, the economy in 2025 has unfolded better than expected and the outlook is for continued, but slowing, expansion in 2026. As growth weakens and inflationary pressures continue, policy uncertainty adds significant economic strain.

We utilized the Moody’s November 2025 Consensus forecast as the baseline forecast to estimate our expected credit losses as of December 31, 2025. This baseline scenario reflects slowing growth over the next two years, but no recession. U.S. GDP is forecasted to grow at an annual rate of 1.8% for 2026 and 2.0% for 2027. The labor market is weakening and the National Unemployment Rate is expected to increase modestly over 2026. The U.S. Consumer Price Index is forecasted to remain at 3% for 2026. The Federal Funds Rate decreases to 3.0-3.25% by late 2026.

Tariffs and the geopolitical environment remain uncertain, which poses potential downside-risks to the economic outlook over the next two years. These economic uncertainty considerations continue to be addressed through a qualitative reserve adjustment, which leverages downside economic assumptions.

As a result of the current economic uncertainty, our future loss estimates may vary considerably from our December 31, 2025 assumptions.

Commercial Loan Portfolio

The commercial ALLL increased by $41 million, or 4.0%, from December 31, 2024, through December 31, 2025. The change in the reserve levels is reflective of the elevated economic uncertainty and loan growth. The reserve build due to these drivers was partly offset by a reserve release due to the net impacts of improving credit quality trends, particularly in commercial real estate.

Consumer Loan Portfolio

The consumer ALLL decreased $23 million, or 6.2%, from December 31, 2024, through December 31, 2025. The decrease is driven by the impact of ongoing loan reductions and continued strong credit performance, particularly for the residential mortgage loan book which represents the largest segment of the consumer portfolio.
Credit Risk Profile

The prevalent risk characteristic for both commercial and consumer loans is the risk of loss arising from an obligor’s inability or failure to meet contractual payment or performance terms. Evaluation of this risk is stratified and monitored by the loan risk rating grades assigned for the commercial loan portfolios and the refreshed FICO score assigned for the consumer loan portfolios. The internal risk grades assigned to loans follow our definitions of Pass and Criticized, which are consistent with published definitions of regulatory risk classifications. Loans with a pass rating represent those loans not classified on our rating scale for credits, as minimal credit risk has been identified. Criticized loans are those loans that either have a potential weakness deserving management's close attention or have a well-defined weakness that may put full collection of contractual cash flows at risk. Borrower FICO scores provide information about the credit quality of our consumer loan portfolio as they provide an indication as to the likelihood that a debtor will repay its debts. The scores are obtained from a nationally recognized consumer rating agency and are presented in the tables below at the dates indicated.

Most extensions of credit are subject to loan grading or scoring. Loan grades are assigned at the time of origination, verified by credit risk management, and periodically re-evaluated thereafter. This risk rating methodology blends our judgment with quantitative modeling. Commercial loans generally are assigned two internal risk ratings. The first rating reflects the probability that the borrower will default on an obligation; the second rating reflects expected recovery rates on the credit facility. Default probability is determined based on, among other factors, the financial strength of the borrower, an assessment of the borrower’s management, the borrower’s competitive position within its industry sector, and our view of industry risk in the context of the general economic outlook. Types of exposure, transaction structure, and collateral, including credit risk mitigants, affect the expected recovery assessment.

Commercial Credit Exposure
Credit Risk Profile by Creditworthiness Category and Vintage (a)(b)
As of December 31, 2025Term LoansRevolving Loans Amortized Cost BasisRevolving Loans Converted to Term Loans Amortized Cost Basis
Amortized Cost Basis by Origination Year and Internal Risk Rating
Dollars in millions20252024202320222021PriorTotal
Commercial and Industrial
Risk Rating:
Pass$9,473 $5,864 $2,263 $5,313 $2,648 $4,115 $24,267 $174 $54,117 
Criticized (Accruing)139 218 171 463 259 493 1,535 37 3,315 
Criticized (Nonaccruing)1 14 18 54 21 33 115 — 256 
Total commercial and industrial9,613 6,096 2,452 5,830 2,928 4,641 25,917 211 57,688 
Current period gross write-offs13 272227828187— 312 
Real estate — commercial mortgage
Risk Rating:
Pass3,246 826 651 1,911 1,519 2,997 1,366 29 12,545 
Criticized (Accruing)8 99 60 326 237 246 20 9 1,005 
Criticized (Nonaccruing)— 16 3 95 31 9 3 — 157 
Total real estate — commercial mortgage
3,254 941 714 2,332 1,787 3,252 1,389 38 13,707 
Current period gross write-offs19 1411829103— 94 
Real estate — construction
Risk Rating:
Pass468 565 771 262 130 72 296 2 2,566 
Criticized (Accruing)— — 20 95 36 127 — — 278 
Criticized (Nonaccruing)— — — — — — — — — 
Total real estate — construction468 565 791 357 166 199 296 2 2,844 
Current period gross write-offs— — — — — — — — — 
Commercial lease financing
Risk Rating:
Pass322 228 293 433 249 609 — — 2,134 
Criticized (Accruing)5 4 26 55 18 21 — — 129 
Criticized (Nonaccruing)— — 5 2 — — — — 7 
Total commercial lease financing327 232 324 490 267 630 — — 2,270 
Current period gross write-offs— — 3 1 — 2 — — 6 
Total commercial loans$13,662 $7,834 $4,281 $9,009 $5,148 $8,722 $27,602 $251 $76,509 
Total commercial loan current period gross write-offs$32 $41 $26 $46 $37 $40 $190 $— $412 
As of December 31, 2024Term LoansRevolving Loans Amortized Cost BasisRevolving Loans Converted to Term Loans Amortized Cost Basis
Amortized Cost Basis by Origination Year and Internal Risk Rating
Dollars in millions20242023202220212020PriorTotal
Commercial and Industrial
Risk Rating:
Pass$6,345 $3,097 $7,119 $3,934 $1,617 $3,969 $22,709 $115 $48,905 
Criticized (Accruing)172 219 597 419 208 476 1,550 41 3,682 
Criticized (Nonaccruing)23 13 68 30 2 31 153 2 322 
Total commercial and industrial6,540 3,329 7,784 4,383 1,827 4,476 24,412 158 52,909 
Current year gross write-offs1 12 65 106 4 31 144 — 363 
Real estate — commercial mortgage
Risk Rating:
Pass1,052 748 2,818 2,202 594 3,194 1,001 41 11,650 
Criticized (Accruing)31 85 571 281 93 316 30 9 1,416 
Criticized (Nonaccruing)— — 123 52 3 66 — — 244 
Total real estate — commercial mortgage
1,083 833 3,512 2,535 690 3,576 1,031 50 13,310 
Current year gross write-offs— — 1 6 — 32 1 — 40 
Real estate — construction
Risk Rating:
Pass199 846 1,021 340 87 67 42 2 2,604 
Criticized (Accruing)— 17 112 58 68 77 — — 332 
Criticized (Nonaccruing)— — — — — — — — — 
Total real estate — construction199 863 1,133 398 155 144 42 2 2,936 
Current year gross write-offs— — — — — — — — — 
Commercial lease financing
Risk Rating:
Pass301 430 626 368 217 679 — — 2,621 
Criticized (Accruing)2 34 33 9 16 21 — — 115 
Criticized (Nonaccruing)— — — — — — — — — 
Total commercial lease financing303 464 659 377 233 700 — — 2,736 
Current year gross write-offs— — — — — 7 — — 7 
Total commercial loans$8,125 $5,489 $13,088 $7,693 $2,905 $8,896 $25,485 $210 $71,891 
Total commercial loan current year gross write-offs$1 $12 $66 $112 $4 $70 $145 $— $410 
(a)Accrued interest of $338 million and $322 million as of December 31, 2025, and December 31, 2024, respectively, presented in “Accrued income and other assets” on the Consolidated Balance Sheets, was excluded from the amortized cost basis disclosed in these tables.
(b)Gross write-off information is presented on a year-to-date basis for both the twelve months ended December 31, 2025 and December 31, 2024.
Consumer Credit Exposure
Credit Risk Profile by FICO Score and Vintage (a)(b)
As of December 31, 2025Term LoansRevolving Loans Amortized Cost BasisRevolving Loans Converted to Term Loans Amortized Cost Basis
Amortized Cost Basis by Origination Year and FICO Score
Dollars in millions20252024202320222021PriorTotal
Real estate — residential mortgage
FICO Score:
750 and above$358 $224 $607 $5,342 $6,738 $3,403 $— $— $16,672 
660 to 74969 36 86 504 582 420 — — 1,697 
Less than 6602 11 23 87 73 149 — — 345 
No Score2 2 2 1 — 9 2 — 18 
Total real estate — residential mortgage431 273 718 5,934 7,393 3,981 2 — 18,732 
Current period gross write-offs— — — — — 2 — — 2 
Home equity loans
FICO Score:
750 and above43 26 23 117 676 1,164 1,749 179 3,977 
660 to 74918 13 13 41 149 258 718 58 1,268 
Less than 6602 3 5 15 44 109 253 21 452 
No Score— — — — — 1 5 — 6 
Total home equity loans63 42 41 173 869 1,532 2,725 258 5,703 
Current period gross write-offs— — — — — — 2 — 2 
Other consumer loans
FICO Score:
750 and above175 73 104 986 1,032 595 81 — 3,046 
660 to 749112 48 74 220 218 179 172 — 1,023 
Less than 66017 12 21 54 52 46 54 — 256 
No Score12 8 5 10 13 6 265 — 319 
Total consumer direct loans316 141 204 1,270 1,315 826 572 — 4,644 
Current period gross write-offs4 5 7 9 9 7 15 — 56 
Credit cards
FICO Score:
750 and above— — — — — — 479 — 479 
660 to 749— — — — — — 364 — 364 
Less than 660— — — — — — 108 — 108 
No Score— — — — — — 2 — 2 
Total credit cards— — — — — — 953 — 953 
Current period gross write-offs— — — — — — 45 — 45 
Total consumer loans$810 $456 $963 $7,377 $9,577 $6,339 $4,252 $258 $30,032 
Total consumer loan current period gross write-offs$4 $5 $7 $9 $9 $9 $62 $— $105 
As of December 31, 2024Term LoansRevolving Loans Amortized Cost BasisRevolving Loans Converted to Term Loans Amortized Cost Basis
Amortized Cost Basis by Origination Year and FICO Score
Dollars in millions20242023202220212020PriorTotal
Real estate — residential mortgage
FICO Score:
750 and above$281 $669 $5,720 $7,203 $2,247 $1,510 $— $— $17,630 
660 to 74967 116 597 655 199 280 — — 1,914 
Less than 6604 13 81 63 24 134 — — 319 
No Score3 2 1 — 1 15 1 — 23 
Total real estate — residential mortgage355 800 6,399 7,921 2,471 1,939 1 — 19,886 
Current period gross write-offs1 — 1 — — 1 — — 3 
Home equity loans
FICO Score:
750 and above33 31 139 775 612 731 1,886 251 4,458 
660 to 74917 17 50 181 129 186 772 80 1,432 
Less than 6602 5 15 40 31 82 263 25 463 
No Score— — — — — 1 4 — 5 
Total home equity loans52 53 204 996 772 1,000 2,925 356 6,358 
Current period gross write-offs— — — — — 1 1 — 2 
Other consumer loans
FICO Score:
750 and above107 143 1,149 1,210 527 245 88 — 3,469 
660 to 74970 109 275 268 128 108 184 — 1,142 
Less than 6609 23 59 59 29 24 56 — 259 
No Score35 12 18 17 7 12 196 — 297 
Total consumer direct loans221 287 1,501 1,554 691 389 524 — 5,167 
Current period gross write-offs— 7 17 12 7 6 15 — 64 
Credit cards
FICO Score:
750 and above— — — — — — 476 — 476 
660 to 749— — — — — — 372 — 372 
Less than 660— — — — — — 109 — 109 
No Score— — — — — — 1 — 1 
Total credit cards— — — — — — 958 — 958 
Current period gross write-offs— — — — — — 47 — 47 
Total consumer loans$628 $1,140 $8,104 $10,471 $3,934 $3,328 $4,408 $356 $32,369 
Total consumer current period gross write-offs$1 $7 $18 $12 $7 $8 $63 $— $116 
(a)Accrued interest of $121 million and $134 million as of December 31, 2025, and December 31, 2024, respectively, presented in “Accrued income and other assets” on the Consolidated Balance Sheets, was excluded from the amortized cost basis disclosed in this table.
(b)Gross write-off information is presented on a year-to-date basis for both the twelve months ended December 31, 2025 and December 31, 2024.

Nonperforming and Past Due Loans

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

The following aging analysis of past due and current loans as of December 31, 2025, and December 31, 2024, provides further information regarding Key’s credit exposure.
Aging Analysis of Loan Portfolio(a)
December 31, 2025
Current(b)(c)
30-59
Days Past
Due (b)
60-89
Days Past
Due (b)
90 and
Greater
Days Past
Due (b)
Non-performing
Loans		Total Past
Due and
Non-performing
Loans
Total
Loans (d)
Dollars in millions
LOAN TYPE(a)
Commercial and industrial$57,336 $38 $17 $41 $256 $352 $57,688 
Commercial real estate:
Commercial mortgage13,450 47 20 33 157 257 13,707 
Construction2,843 — — 1 — 1 2,844 
Total commercial real estate loans16,293 47 20 34 157 258 16,551 
Commercial lease financing2,260 3 — — 7 10 2,270 
Total commercial loans$75,889 $88 $37 $75 $420 $620 $76,509 
Real estate — residential mortgage$18,593 $21 $14 $— $104 $139 $18,732 
Home equity loans5,593 18 7 5 80 110 5,703 
Other consumer loans4,606 15 10 9 4 38 4,644 
Credit cards926 6 4 10 7 27 953 
Total consumer loans$29,718 $60 $35 $24 $195 $314 $30,032 
Total loans$105,607 $148 $72 $99 $615 $934 $106,541 
(a)Amounts in table represent amortized cost and exclude loans held for sale.
(b)Accrued interest of $459 million presented in “Accrued income and other assets” on the Consolidated Balance Sheets is excluded from the amortized cost basis disclosed in this table.
(c)Includes balances of $66 million in Commercial mortgage and $6 million in Real estate - residential mortgage associated with loans sold to GNMA that are 90 days or more past due where Key has the right but not the obligation to repurchase and whose payments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veteran Affairs.
(d)Net of unearned income, net of deferred fees and costs, and unamortized discounts and premiums.

December 31, 2024
Current(b)(c)
30-59
Days Past
Due (b)
60-89
Days Past
Due (b)
90 and
Greater
Days Past
Due (b)
Non-performing
Loans		Total Past Due and Non-performing Loans
Total
Loans (d)
Dollars in millions
LOAN TYPE(a)
Commercial and industrial$52,473 $48 $21 $45 $322 $436 $52,909 
Commercial real estate:
Commercial mortgage13,018 4 29 16 243 292 13,310 
Construction2,932 — — 4 — 4 2,936 
Total commercial real estate loans15,950 4 29 20 243 296 16,246 
Commercial lease financing2,728 1 6 1 — 8 2,736 
Total commercial loans$71,151 $53 $56 $66 $565 $740 $71,891 
Real estate — residential mortgage$19,766 $20 $8 $— $92 $120 $19,886 
Home equity loans6,232 26 8 3 89 126 6,358 
Other consumer loans5,129 15 9 9 5 38 5,167 
Credit cards928 6 5 12 7 30 958 
Total consumer loans$32,055 $67 $30 $24 $193 $314 $32,369 
Total loans$103,206 $120 $86 $90 $758 $1,054 $104,260 
(a)Amounts in table represent amortized cost and exclude loans held for sale.
(b)Accrued interest of $456 million presented in “Accrued income and other assets” on the Consolidated Balance Sheets is excluded from the amortized cost basis disclosed in this table.
(c)Includes balances of $75 million in Commercial mortgage and $7 million in Real estate - residential mortgage associated with loans sold to GNMA that are 90 days or more past due where Key has the right but not the obligation to repurchase and whose payments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veteran Affairs.
(d)Net of unearned income, net of deferred fees and costs, and unamortized discounts and premiums.

At December 31, 2025, the carrying amount of our commercial nonperforming loans outstanding represented 76% of their original contractual amount owed, total nonperforming loans outstanding represented 82% of their original contractual amount owed, and nonperforming assets in total were carried at 83% of their original contractual amount owed.

Nonperforming loans reduced expected interest income by $49 million, $54 million, and $37 million for each of the twelve months ended December 31, 2025, December 31, 2024, and December 31, 2023, respectively.

The amortized cost basis of nonperforming loans on nonaccrual status for which there is no related allowance for credit losses was $386 million at December 31, 2025.
Collateral-dependent Financial Assets

We classify financial assets as collateral-dependent when our borrower is experiencing financial difficulty, and we expect repayment to be provided substantially through the operation or sale of the collateral. Our commercial loans have collateral that includes cash, accounts receivable, inventory, commercial machinery, commercial properties, commercial real estate construction projects, enterprise value, and stock or ownership interests in the borrowing entity. When appropriate we also consider the enterprise value of the borrower as a repayment source for collateral-dependent loans. Our consumer loans have collateral that includes residential real estate, automobiles, boats, and RVs.

At December 31, 2025 and December 31, 2024, the recorded investment of consumer residential mortgage loans in the process of foreclosure was approximately $70 million and $72 million, respectively.

There were no significant changes in the extent to which collateral secures our collateral-dependent financial assets during 2025.

Loan Modifications Made to Borrowers Experiencing Financial Difficulty

As part of our loss mitigation activities, we may agree to modify the contractual terms of a loan to a borrower experiencing financial difficulty. Our loan modifications are handled on a case-by-case basis and are negotiated to achieve mutually agreeable terms that maximize loan collectability and meet the borrower’s financial needs. Such modifications may include an extension of maturity date, interest rate reduction, an other than insignificant payment delay, other modifications, or some combination thereof. Many factors can go into what is considered an other than insignificant payment delay such as the significance of the restricted payment amount relative to the normal loan payment or the relative significance of the delay to the original loan terms. Generally, Key considers any delay in payment of greater than 90 days in the last 12 months to be significant. The ALLL for loans modified for borrowers experiencing financial difficulty is determined based on Key’s ALLL policy as described within Note 1 (“Summary of Significant Accounting Policies”).

Modifications for Borrowers Experiencing Financial Difficulty

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

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

The following tables show the amortized cost basis at the end of the noted reporting periods of the loans modified to borrowers experiencing financial difficulty within the past 12 months of the noted periods. The tables do not include those modifications that only resulted in an insignificant payment delay. The tables do not include consumer loans that are still within a trial modification period. Trial modifications may be done for consumer borrowers where a trial payment plan period is offered in advance of a permanent loan modification. As of December 31, 2025, there were 167 loans totaling $26 million in a trial modification period. As of December 31, 2024, there were 120 loans totaling $20 million in a trial modification period.

Commitments outstanding to lend additional funds to borrowers experiencing financial difficulty whose loans were modified were $110 million and $15 million at December 31, 2025 and December 31, 2024, respectively.
As of December 31, 2025Interest Rate ReductionTerm ExtensionOther
Combination(a)
Total
Dollars in millionsAmortized Cost BasisAmortized Cost BasisAmortized Cost BasisAmortized Cost BasisAmortized Cost Basis% of Total Loan Type
LOAN TYPE
Commercial and Industrial$2 $236 $22 $44 $304 0.53 %
Commercial real estate:
Commercial mortgage— 159 5 67 231 1.69 
Construction— 30 — — 30 1.05 
Total commercial real estate loans— 189 5 67 261 1.58 
Total commercial loans$2 $425 $27 $111 $565 0.74 %
Real estate — residential mortgage$3 $1 $— $10 $14 0.07 %
Home equity loans4 1 — 4 9 0.16 
Other consumer loans— 2 — 2 4 0.09 
Credit cards— — — 3 3 0.31 
Total consumer loans$7 $4 $— $19 $30 0.10 %
Total loans$9 $429 $27 $130 $595 0.56 %
(a)Combination modifications consist primarily of loans modified with both an interest rate reduction and a term extension.

As of December 31, 2024Interest Rate ReductionTerm ExtensionOther
Combination(a)
Total
Dollars in millionsAmortized Cost BasisAmortized Cost BasisAmortized Cost BasisAmortized Cost BasisAmortized Cost Basis% of Total Loan Type
LOAN TYPE
Commercial and Industrial$— $118 $25 $20 $163 0.31 %
Commercial real estate:
Commercial mortgage28 236 22 21 307 2.31 
Construction— 29 — — 29 0.99 
Total commercial real estate loans28 265 22 21 336 2.07 
Total commercial loans$28 $383 $47 $41 $499 0.69 %
Real estate — residential mortgage$1 $1 $— $12 $14 0.07 %
Home equity loans3 1 2 7 13 0.20 
Other consumer loans— 2 — 3 5 0.10 
Credit cards— — — 3 3 0.31 
Total consumer loans$4 $4 $2 $25 $35 0.11 %
Total loans$32 $387 $49 $66 $534 0.51 %
(a)Combination modifications consist primarily of loans modified with both an interest rate reduction and a term extension.

As of December 31, 2023Interest Rate ReductionTerm ExtensionOther
Combination(a)
Total
Dollars in millionsAmortized Cost BasisAmortized Cost BasisAmortized Cost BasisAmortized Cost BasisAmortized Cost Basis% of Total Loan Type
LOAN TYPE
Commercial and Industrial$— $180 $49 $34 $263 0.47 %
Commercial real estate:
Commercial mortgage— 4 2 — 6 0.04 
Construction— — — — — — 
Total commercial real estate loans— 4 2 — 6 0.03 
Total commercial loans$— $184 $51 $34 $269 0.35 %
Real estate — residential mortgage$— $— $1 $9 $10 0.05 %
Home equity loans2 1 1 5 9 0.13 
Other consumer loans— 1 — 2 3 0.05 
Credit cards— — — 4 4 0.40 
Total consumer loans$2 $2 $2 $20 $26 0.07 %
Total loans$2 $186 $53 $54 $295 0.26 %
(a)Combination modifications consist primarily of loans modified with both an interest rate reduction and a term extension.

Financial Effects of Modifications to Borrowers Experiencing Financial Difficulty

The following table summarizes the financial impacts of loan modifications made to specific loans for the noted periods.
Twelve months ended December 31, 2025Weighted-average Interest Rate ChangeWeighted-average Term Extension (in years)
LOAN TYPE
Commercial and Industrial(0.87)%1.24
Commercial mortgage— %0.96
Construction— %0.50
Real estate — residential mortgage(1.86)%5.85
Home equity loans(2.97)%7.55
Other consumer loans(3.65)%1.20
Credit cards(8.27)%1.00
Twelve months ended December 31, 2024Weighted-average Interest Rate ChangeWeighted-average Term Extension (in years)
LOAN TYPE
Commercial and Industrial(4.12)%1.75
Commercial mortgage(1.49)%0.66
Construction— %2.87
Real estate — residential mortgage(1.81)%6.15
Home equity loans(4.03)%6.53
Other consumer loans(4.06)%0.77
Credit cards(16.26)%1.00
Twelve months ended December 31, 2023Weighted-average Interest Rate ChangeWeighted-average Term Extension (in years)
LOAN TYPE
Commercial and Industrial(5.69)%0.59
Commercial mortgage— %1.37
Real estate — residential mortgage(1.97)%7.58
Home equity loans(4.02)%6.87
Other consumer loans(3.62)%1.01
Credit cards(14.90)%1.00

Amortized Cost Basis of Modified Loans That Subsequently Defaulted

Key considers modifications to borrowers experiencing financial difficulty that subsequently become 90 days or more past due under modified terms as subsequently defaulted. The following table presents the amortized cost of modified loans to borrowers experiencing financial difficulty that were within 12 months of their modification and subsequently defaulted within the noted periods.
Twelve months ended December 31, 2025Interest Rate Reduction
Dollars in millionsTerm ExtensionOtherCombinationTotal
LOAN TYPE
Commercial and Industrial$— $2 $5 $— $7 
Commercial real estate
Commercial mortgage— 18 — — 18 
Total commercial real estate loans— 18 — — 18 
Total commercial loans$— $20 $5 $— $25 
Real estate — residential mortgage$— $— $— $1 $1 
Home equity loans— — 1 — 1 
Total consumer loans$— $— $1 $1 $2 
Total loans$— $20 $6 $1 $27 
Twelve months ended December 31, 2024Interest Rate Reduction
Dollars in millionsTerm ExtensionOtherCombinationTotal
LOAN TYPE
Commercial and Industrial$— $22 $— $1 $23 
Commercial real estate
Commercial mortgage11 — — 11 
Total commercial real estate loans11 — — — 11 
Total commercial loans$11 $22 $— $1 $34 
Real estate — residential mortgage$— $— $— $1 $1 
Home equity loans— — — 2 2 
Total consumer loans$— $— $— $3 $3 
Total loans$11 $22 $— $4 $37 
Twelve months ended December 31, 2023
Dollars in millionsInterest Rate ReductionTerm ExtensionOtherCombinationTotal
LOAN TYPE
Commercial and Industrial$— $7 $— $3 $10 
Commercial real estate
Commercial mortgage— — 1 — 1 
Total commercial real estate loans— 7 1 3 11 
Commercial lease financing— — — — — 
Total commercial loans$— $7 $1 $3 $11 
Total consumer loans$— $— $— $— $— 
Total loans$— $7 $1 $3 $11 

Key closely monitors the performance of loans that are modified for borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the amortized cost as of December 31, 2025, of loans modified during the 12 months then ended, by aging.

As of December 31, 2025Current30-89 Days
Past Due		90 and Greater Days Past DueTotal
Dollars in millions
LOAN TYPE
Commercial and Industrial$286 $7 $11 $304 
Commercial real estate
Commercial mortgage184 42 5 231 
Construction30 — — 30 
Total commercial real estate loans214 42 5 261 
Commercial lease financing— — — — 
Total commercial loans$500 $49 $16 $565 
Real estate — residential mortgage$12 $1 $1 $14 
Home equity loans9 — — 9 
Other consumer loans4 — — 4 
Credit cards3 — — 3 
Total consumer loans$28 $1 $1 $30 
Total loans$528 $50 $17 $595 

The following table presents the amortized cost as of December 31, 2024, of loans modified during the 12 months then ended, by aging.
As of December 31, 2024Current30-89 Days 
Past Due		90 and Greater
Days Past Due		Total
Dollars in millions
LOAN TYPE
Commercial and Industrial$154 $3 $6 $163 
Commercial real estate
Commercial mortgage260 19 28 307 
Construction29 — — 29 
Total commercial real estate loans289 19 28 336 
Total commercial loans$443 $22 $34 $499 
Real estate — residential mortgage$12 $1 $1 $14 
Home equity loans11 1 1 13 
Other consumer loans5 — — 5 
Credit cards3 — — 3 
Total consumer loans$31 $2 $2 $35 
Total loans$474 $24 $36 $534 

The following table presents the amortized cost as of December 31, 2023, of loans modified during the 12 months then ended, by aging.

As of December 31, 2023Current30-89 Days 
Past Due		90 and Greater
Days Past Due		Total
Dollars in millions
LOAN TYPE
Commercial and Industrial$238 $25 $— $263 
Commercial real estate
Commercial mortgage6 — — 6 
Total commercial real estate loans$244 $25 $— $269 
Total commercial loans$244 $25 $— $269 
Real estate — residential mortgage$9 $1 $— $10 
Home equity loans8 — 1 9 
Other consumer loans3 — — 3 
Credit cards3 1 — 4 
Total consumer loans$23 $2 $1 $26 
Total loans$267 $27 $1 $295 

Liability for Credit Losses on Lending-related Commitments

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

Changes in the liability for credit losses on lending-related commitments are summarized as follows:
 Twelve months ended December 31,
Dollars in millions20252024
Balance at beginning of period$290 $296 
Provision (credit) for losses on off balance sheet exposures23 (6)
Other— — 
Balance at end of period$313 $290