Derivatives and Hedging Activities (Tables)
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6 Months Ended |
Jun. 30, 2026 |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] |
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| Schedule of Fair Values, Volume of Activity and Gain (Loss) Information Related to Derivative Instruments |
The following table summarizes the fair values of our derivative instruments on a gross and net basis as of June 30, 2026, and December 31, 2025. Total derivative assets and liabilities are adjusted to take into account the impact of legally enforceable master netting agreements that allow us to settle all derivative contracts with a single counterparty on a net basis and to offset the net derivative position with the related cash collateral. Securities collateral related to legally enforceable master netting agreements is not offset on the balance sheet. Our derivative instruments are included in “accrued income and other assets” or “accrued expenses and other liabilities” on the Consolidated Balance Sheets, as follows: | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2026 | | December 31, 2025 | | | Fair Value(a) | | | Fair Value(a) | | Dollars in millions | Notional
Amount | Derivative Assets | Derivative Liabilities | | Notional Amount | Derivative Assets | Derivative Liabilities | | Derivatives designated as hedging instruments: | | | | | | | | | Interest rate | $ | 62,787 | | $ | (22) | | $ | 10 | | | $ | 64,228 | | $ | (13) | | $ | 4 | | | | | | | | | | | | | | | | | | | Derivatives not designated as hedging instruments: | | | | | | | | | Interest rate | 74,644 | | 126 | | 625 | | | 74,994 | | 145 | | 573 | | | Foreign exchange | 6,437 | | 99 | | 95 | | | 5,767 | | 83 | | 80 | | | Commodity | 6,058 | | 284 | | 273 | | | 5,553 | | 249 | | 237 | | | Credit | 88 | | — | | 5 | | | 107 | | — | | 8 | | Other (b) | 5,409 | | 56 | | 9 | | | 4,217 | | 8 | | 25 | | | Total derivatives not designated as hedging instruments: | 92,636 | | 565 | | 1,007 | | | 90,638 | | 485 | | 923 | | | Total derivatives | 155,423 | | 543 | | 1,017 | | | 154,866 | | 472 | | 927 | | Netting adjustments (c) | — | | (347) | | (323) | | | — | | (297) | | (274) | | | Net derivatives in the balance sheet | 155,423 | | 196 | | 694 | | | 154,866 | | 175 | | 653 | | Other collateral (d) | — | | — | | — | | | — | | (22) | | (1) | | | Net derivative amounts | $ | 155,423 | | $ | 196 | | $ | 694 | | | $ | 154,866 | | $ | 153 | | $ | 652 | | | | | | | | | |
(a)We take into account bilateral collateral and master netting agreements that allow us to settle all derivative contracts held with a single counterparty on a net basis, and to offset the net derivative position with the related cash collateral when recognizing derivative assets and liabilities. As a result, we could have derivative contracts with negative fair values included in derivative assets and contracts with positive fair values included in derivative liabilities. (b)Other derivatives include interest rate lock commitments related to our residential and commercial banking activities, forward sale commitments related to our residential mortgage banking activities, forward purchase and sales contracts consisting of contractual commitments associated with “to be announced” securities and when-issued securities, and other customized derivative contracts. (c)Netting adjustments represent the amounts recorded to convert our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. As of June 30, 2026, excess collateral that has not been offset against net derivative instrument positions totaled $122 million of cash collateral and $225 million of securities collateral posted as well as $11 million of cash collateral held. As of December 31, 2025, excess collateral that has not been offset against net derivative instrument positions totaled $165 million of cash collateral and $218 million of securities collateral posted as well as $3 million of cash collateral and $78 million of securities collateral held. (d)Other collateral represents the amount that cannot be used to offset our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance. The other collateral consists of securities and is exchanged under bilateral collateral and master netting agreements that allow us to offset the net derivative position with the related collateral. The application of the other collateral cannot reduce the net derivative position below zero. Therefore, excess other collateral, if any, is not reflected above.
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| Schedule of Pre-Tax Net Gains (Losses) on Fair Value Hedges |
The following tables summarize the amounts that were recorded on the balance sheet as of June 30, 2026, and December 31, 2025, related to cumulative basis adjustments for fair value hedges. | | | | | | | | | | | | | | | | June 30, 2026 | | Dollars in millions | Balance sheet line item in which the hedge item is included | Carrying amount of hedged item (a) | Hedge accounting basis adjustment - active hedges | Hedge accounting basis adjustment - discontinued hedges | | Interest rate contracts | Long-term debt | $ | 8,609 | | $ | (292) | | $ | (3) | | | Interest rate contracts | Securities Available for Sale(b) | 12,830 | | 25 | | 14 | | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2025 | | Balance sheet line item in which the hedge item is included | Carrying amount of hedged item (a) | Hedge accounting basis adjustment - active hedges | Hedge accounting basis adjustment - discontinued hedges | | Interest rate contracts | Long-term debt | $ | 8,504 | | $ | (199) | | $ | (3) | | | Interest rate contracts | Securities Available for Sale(b) | 12,843 | | (100) | | 14 | | | | | | | | | | | |
(a)The carrying amount represents the portion of the asset or liability designated as the hedged item. (b)Certain amounts are designated as fair value hedges under the portfolio layer method. The carrying amount represents the amortized costs basis of the prepayable financial assets used to designate hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the relationship. At June 30, 2026, and December 31, 2025, the amortized costs of the closed portfolios in these hedging relationships was $8.1 billion and $6.7 billion, respectively, of which $5.8 billion and $4.9 billion, respectively, were designated in a portfolio layer hedging relationship. At June 30, 2026, the cumulative basis adjustments associated with these amounts totaled $46 million, which is comprised of $32 million in active hedging relationships and $14 million for discontinued hedging relationships. At December 31, 2025, the cumulative basis adjustments associated with these amounts totaled $(35) million, which is comprised of $(50) million in active hedging relationships and $14 million for discontinued hedging relationships.
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| Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location |
The following tables summarize the effect of fair value and cash flow hedge accounting on the income statement for the three- and six-month periods ended June 30, 2026, and June 30, 2025. | | | | | | | | | | | | | | | | | | | | Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships | | | Dollars in millions | Interest expense – long-term debt | Interest income – loans | | Interest Income - securities | Investment banking and debt placement fees | | | | | Three months ended June 30, 2026 | | | | | | | | | | Total amounts presented in the consolidated statement of income | $ | (155) | | $ | 1,463 | | | $ | 367 | | $ | 169 | | | | | | | | | | | | | | | Net gains (losses) on fair value hedging relationships | | | | | | | | | | Interest rate contracts | | | | | | | | | | Recognized on hedged items | $ | 64 | | $ | — | | | $ | (64) | | $ | — | | | | | | Recognized on derivatives designated as hedging instruments | (84) | | — | | | 54 | | — | | | | | | Net income (expense) recognized on fair value hedges | $ | (20) | | $ | — | | | $ | (10) | | $ | — | | | | | | Net gain (loss) on cash flow hedging relationships | | | | | | | | | | Interest rate contracts | | | | | | | | | | Realized gains (losses) (pre-tax) reclassified from AOCI into net income | $ | — | | $ | (28) | | | $ | — | | $ | 1 | | | | | | Net income (expense) recognized on cash flow hedges | $ | — | | $ | (28) | | | $ | — | | $ | 1 | | | | | | | | | | | | | | | Three months ended June 30, 2025 | | | | | | | | | | Total amounts presented in the consolidated statement of income | $ | (198) | | $ | 1,443 | | | $ | 411 | | $ | 178 | | | | | | | | | | | | | | | Net gains (losses) on fair value hedging relationships | | | | | | | | | | Interest rate contracts | | | | | | | | | | Recognized on hedged items | $ | (99) | | $ | — | | | $ | 37 | | $ | — | | | | | | Recognized on derivatives designated as hedging instruments | 51 | | — | | | (31) | | — | | | | | | Net income (expense) recognized on fair value hedges | $ | (48) | | $ | — | | | $ | 6 | | $ | — | | | | | | Net gain (loss) on cash flow hedging relationships | | | | | | | | | | Interest rate contracts | | | | | | | | | | Realized gains (losses) (pre-tax) reclassified from AOCI into net income | $ | (1) | | $ | (90) | | | $ | — | | $ | — | | | | | | | | | | | | | | | Net income (expense) recognized on cash flow hedges | $ | (1) | | $ | (90) | | | $ | — | | $ | — | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | Location and amount of net gains (losses) recognized in income on fair value and cash flow hedging relationships | |
Dollars in millions | Interest expense – long-term debt | Interest income – loans | Interest Income - securities | Investment banking and debt placement fees | | | | | Six Months Ended June 30, 2026 | | | | | | | | | Total amounts presented in the consolidated statement of income | $ | (306) | | $ | 2,879 | | $ | 737 | | $ | 366 | | | | | | | | | | | | | | Net gains (losses) on fair value hedging relationships | | | | | | | | | Interest contracts | | | | | | | | | Recognized on hedged items | $ | 93 | | $ | — | | $ | (125) | | $ | — | | | | | | Recognized on derivatives designated as hedging instruments | (135) | | — | | 105 | | — | | | | | | Net income (expense) recognized on fair value hedges | $ | (42) | | $ | — | | $ | (20) | | $ | — | | | | | | Net gain (loss) on cash flow hedging relationships | | | | | | | | | Realized gains (losses) (pre-tax) reclassified from AOCI into net income | | | | | | | | | Interest contracts | $ | (1) | | $ | (64) | | $ | — | | $ | 1 | | | | | | | | | | | | | | Net income (expense) recognized on cash flow hedges | $ | (1) | | $ | (64) | | $ | — | | $ | 1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Six Months Ended June 30, 2025 | | | | | | | | Total amounts presented in the consolidated statement of income | $ | (391) | | $ | 2,844 | | $ | 803 | | $ | 353 | | | | | | | | | | | | Net gains (losses) on fair value hedging relationships | | | | | | | | Interest contracts | | | | | | | | Recognized on hedged items | $ | (252) | | $ | — | | $ | 115 | | $ | — | | | | | Recognized on derivatives designated as hedging instruments | 159 | | — | | (102) | | — | | | | | Net income (expense) recognized on fair value hedges | $ | (93) | | $ | — | | $ | 13 | | $ | — | | | | | Net gain (loss) on cash flow hedging relationships | | | | | | | | Realized gains (losses) (pre-tax) reclassified from AOCI into net income | | | | | | | | Interest contracts | $ | (2) | | $ | (183) | | $ | — | | $ | — | | | | | | | | | | | | Net income (expense) recognized on cash flow hedges | $ | (2) | | $ | (183) | | $ | — | | $ | — | | | | | | | | | | |
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| Schedule of Derivative Instrument Cash Flow Hedge Earning Recognized by Income Statement Location |
The following table summarizes the pre-tax effect of our cash flow hedges for the three- and six-month periods ended June 30, 2026, and June 30, 2025.
| | | | | | | | | | Three months ended, Dollars in millions | June 30, 2026 | June 30, 2025 | | | Net Gains (Losses) Recognized in OCI | | | | | Interest income — Loans | $ | (202) | | $ | 122 | | | | | | | | Investment banking and debt placement fees | 1 | | — | | | | Total | $ | (201) | | $ | 122 | | | | | | | | Net Gains (Losses) Reclassified From AOCI Into Income | | | | | Interest income — Loans | $ | (28) | | $ | (90) | | | | Interest expense — Long-term debt | — | | (1) | | | | Investment banking and debt placement fees | 1 | | — | | | | Total | $ | (27) | | $ | (91) | | | | | | |
| | | | | | | | | | Six months ended, Dollars in millions | June 30, 2026 | June 30, 2025 | | | Net Gains (Losses) Recognized in OCI | | | | | Interest income — Loans | $ | 247 | | $ | 363 | | | | Interest expense — Long-term debt | 2 | | (1) | | | | Investment banking and debt placement fees | 1 | | — | | | | Total | $ | 250 | | $ | 362 | | | | | | | | Net Gains (Losses) Reclassified From AOCI Into Income | | | | | Interest income — Loans | $ | (64) | | $ | (183) | | | | Interest expense — Long-term debt | (1) | | (2) | | | | Investment banking and debt placement fees | 1 | | — | | | | Total | $ | (64) | | $ | (185) | | | | | | |
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| Schedule of Pre-Tax Net Gains (Losses) on Derivatives Not Designated as Hedging Instruments |
The following table summarizes the pre-tax net gains (losses) on our derivatives that are not designated as hedging instruments for the three- and six-month periods ended June 30, 2026, and June 30, 2025, and where they are recorded on the income statement. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended June 30, 2026 | | Three months ended June 30, 2025 | | Dollars in millions | Corporate services income | Consumer mortgage income | Other income | | Total | | Corporate services income | Consumer mortgage income | Other income | | Total | | NET GAINS (LOSSES) | | | | | | | | | | | | | Interest rate | $ | 13 | | $ | — | | $ | — | | | $ | 13 | | | $ | 13 | | $ | — | | $ | — | | | $ | 13 | | | Foreign exchange | 12 | | — | | — | | | 12 | | | 15 | | — | | — | | | 15 | | | Commodity | 1 | | — | | — | | | 1 | | | 2 | | — | | — | | | 2 | | | Credit | — | | — | | (10) | | | (10) | | | — | | — | | (7) | | | (7) | | | Other | — | | (2) | | 17 | | | 15 | | | — | | — | | (14) | | | (14) | | | Total net gains (losses) | $ | 26 | | $ | (2) | | $ | 7 | | | $ | 31 | | | $ | 30 | | $ | — | | $ | (21) | | | $ | 9 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Six months ended June 30, 2026 | | Six months ended June 30, 2025 | | Dollars in millions | Corporate services income | Consumer mortgage income | Other income | | Total | | Corporate services income | Consumer mortgage income | Other income | | Total | | NET GAINS (LOSSES) | | | | | | | | | | | | | Interest rate | $ | 21 | | $ | — | | $ | — | | | $ | 21 | | | $ | 21 | | $ | — | | $ | 6 | | | $ | 27 | | | Foreign exchange | 25 | | — | | — | | | 25 | | | 27 | | — | | — | | | 27 | | | Commodity | 3 | | — | | — | | | 3 | | | 4 | | — | | — | | | 4 | | | Credit | — | | — | | (18) | | | (18) | | | — | | — | | (19) | | | (19) | | | Other | — | | — | | 67 | | | 67 | | | — | | — | | (9) | | | (9) | | | Total net gains (losses) | $ | 49 | | $ | — | | $ | 49 | | | $ | 98 | | | $ | 52 | | $ | — | | $ | (22) | | | $ | 30 | | | | | | | | | | | | | |
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| Schedule of Fair Value of Derivative Assets by Type |
The following table summarizes the fair value of our derivative assets by type at the dates indicated. These assets represent our net exposure to potential loss after taking into account the effects of bilateral collateral and master netting agreements and other means used to mitigate risk.
| | | | | | | | | | Dollars in millions | June 30, 2026 | December 31, 2025 | | Interest rate | $ | 33 | | $ | 82 | | | Foreign exchange | 62 | | 39 | | | Commodity | 179 | | 149 | | | | | | Other | 56 | | 8 | | | Derivative assets before collateral | 330 | | 278 | | | Plus(Less): Related collateral | (134) | | (103) | | | Total derivative assets | $ | 196 | | $ | 175 | | | | |
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| Schedule of Credit Derivatives Sold and Held |
The following table provides information on the types of credit derivatives sold by us and held on the balance sheet at June 30, 2026, and December 31, 2025. The notional amount represents the amount that the seller could be required to pay. The payment/performance risk shown in the table represents a weighted average of the default probabilities for all reference entities in the respective portfolios. These default probabilities are implied from observed credit indices in the credit default swap market, which are mapped to reference entities based on Key’s internal risk rating. | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2026 | | December 31, 2025 | | Dollars in millions | Notional
Amount | Average Term (Years) | Payment / Performance Risk | | Notional Amount | Average Term (Years) | Payment / Performance Risk | | | | | | | | | | Other | $ | 3 | | 5.51 | 3.73 | % | | $ | 9 | | 3.62 | 1.76 | % | | Total credit derivatives sold | $ | 3 | | — | | — | | | $ | 9 | | — | | — | | | | | | | | | |
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| Schedule of Credit Risk Contingent Feature |
Refer to the table below for the aggregate fair value of all derivative contracts with credit risk contingent features held by KeyBank that were in a net liability position. | | | | | | | | | | | | | Dollars in millions | June 30, 2026 | | December 31, 2025 | | | | | | | | | Net derivative liabilities with credit-risk contingent features
| $ | (54) | | | $ | (49) | | | Collateral posted | 43 | | | 49 | |
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