AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 18/10/2026
Moat—
Insufficient evidence for every rubric criterion; no category score is inferred.
structural advantage · — · Relationship and fee-business growth establish demand, but do not establish superior switching costs, funding economics or other structural barriers.
durability · — · Consecutive sales achievements provide operating history, but the duration of any competitive advantage cannot be established.
customer dependency · — · Core-checking relationships are a strategic focus; customer dependence and material switching friction are not demonstrated.
erosion resilience · — · Growth coexists with technology substitution risks and higher costs. The passages do not demonstrate resilience of a structural advantage.
Pricing power—
Insufficient evidence for every rubric criterion; no category score is inferred.
realized pricing · 2/4 · Lower interest-bearing deposit costs contributed to improved 2025 net interest income. This is a favorable realized funding-pricing outcome, but asset repricing also contributed and relative pricing superiority is unproven.
retention · 2/4 · Commercial clients, relationship households and average client deposits each grew 2% in 2025, with repeat sales achievements. This indirectly supports ongoing demand; net growth does not reveal customer attrition or retention under adverse pricing.
margin resilience · 2/4 · Revenue and pre-provision earnings improved despite higher expenses, but benefits from asset repricing and lower deposit costs limit evidence of pricing-led resilience. First-half 2026 personnel expense grew materially.
contractual freedom · — · Customer and counterparty options can permit early termination or repricing, but the passages do not establish KeyCorp's actual discretion to reset customer prices, fees or contract terms.
Predictability53
Financial-sector stability over five consecutive reported annual periods: equal weights for nondeclining revenue frequency, revenue-growth volatility (5–40pp), positive consolidated earnings frequency, and net-income/revenue margin volatility (3–20pp). Uses reported accounting scope; not industrial FCF or a growth forecast.
- Nondeclining revenue years (%)
- 50.00
- Revenue growth volatility (pp)
- 11.27
- positiveEarningsShare
- 80.00
- netMarginStdDev
- 53.67
Financial strength56
Qualitative bank assessment: equal-weight average of four current evidence-backed grades (0–4), scaled to 100. Policy financial-industry-1; not an industrial ratio score or credit rating.
capital adequacy · 2/4 · Estimated June 2026 CET1 was 11.17%, total risk-based capital 14.82% and leverage 10.32%, below their December 2025 levels. Year-end regulatory compliance supports adequacy, but exact current requirements and buffers are missing, preventing quantified headroom or a strong current sufficiency conclusion.
liquidity funding · 2/4 · Parent cash and short-term investments reached $5.3 billion in June 2026, and 2025 wholesale funding declined to $11.0 billion alongside client-deposit growth. These support funding flexibility, but management's projected obligation coverage and incomplete deposit-concentration and bank-liquidity data limit the assessment.
asset liability risk · 2/4 · The disclosed 2025 charge-off ratio was 41 basis points with improving problem-asset indicators. Second-quarter 2026 charge-offs of $115 million coexisted with a $23 million reserve release, while unrealized securities losses and customer repricing options show continuing balance-sheet exposure. Quantified stress sensitivities are absent.
earnings resilience · 3/4 · GAAP common earnings remained positive across the five disclosed quarters, and first-half earnings increased to $959 million from $758 million. Pre-provision earnings also increased, supporting demonstrated recent resilience; favorable repricing and reserve movements limit inference across a severe downturn.
Capital allocation50
Qualitative bank assessment: equal-weight average of four current evidence-backed grades (0–4), scaled to 100. Policy financial-industry-1; not an industrial ratio score or credit rating.
capital efficiency · 2/4 · First-half return on average tangible common equity from continuing operations improved to 13.0% from 11.2%. This disclosed non-GAAP return excludes intangible assets and preferred stock from its equity denominator; it is not total GAAP ROE, and peer superiority or persistent excess returns are unestablished.
distributions and buffers · 2/4 · Actual first-quarter repurchases were $389 million and second-quarter purchases totaled approximately 15.5 million shares. Positive earnings, parent liquidity and $797 million of bank dividend capacity support distributions, but falling capital ratios and missing complete current shareholder-dividend totals limit assessment of aggregate coverage.
dilution and cost · 2/4 · Issued common shares remained unchanged while treasury shares increased from approximately 154.3 million to 184.7 million, indicating a net reduction in outstanding shares. Incentive and stock-based compensation rose from $326 million to $366 million in the first half; the combined disclosure does not isolate stock compensation cost.
investment discipline · 2/4 · The approximately $10 billion securities repositioning contributed to improved net interest income, while added front-line bankers accompanied fee-business growth. Rising personnel costs and incomplete total investment costs and attributable returns prevent a stronger conclusion.
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Balance-sheet repositioning contributed to improved income and actual repurchases returned capital. However, CET1 and tangible common equity ratios declined during the first half of 2026, and complete repositioning costs and distribution coverage are absent.
incentive alignment · 2/4 · Disclosed variable and multiyear pay, ownership guidelines and increased use of preset financial measures support alignment. The 63% say-on-pay result and concerns about 2024 special awards provide contrary evidence; actual executive ownership is missing.
execution · 3/4 · Reported 2025 client and fee-business growth is supported by higher first-half 2026 GAAP common earnings and pre-provision earnings. This demonstrates execution over the disclosed period; management's claim of meeting every target is not independently reconstructed.
governance · 3/4 · Independent standing committees, substantive Lead Director powers and implemented responses to compensation criticism demonstrate meaningful oversight mechanisms. These disclosures establish practices, without proving exceptional governance effectiveness.
Evidence
Client Momentum Strengthened existing relationships by supporting clients with our balance sheet and grew new relationships • Grew commercial clients by 2% and commercial loans by 6%, including C&I loans by 9% • Average client deposits and relationship households both grew by 2% • Raised nearly $140 billion on behalf of our clients while retaining 20% on our balance sheet Grew Differentiated Fee-Based Businesses Broad-based momentum in investment banking, wealth management, and commercial payments while increasing our front-line banker count by approximately 10% • Second best year in our history of investment banking and debt placement fees • Record assets under management of $70 billion as of December 31, 2025; third consecutive year of record sales production in mass affluent segment • Commercial payments fee-equivalent revenue grew 11% Delivered on Financial Commitments Met or exceeded each financial target communicated at the beginning of the year • Delivered full year record revenue, up 16% year-over-year (1), with net interest income up 23% and fees up 7.5% (1); Fourth quarter 2025 net interest income was 15% higher compared to the fourth quarter of 2024 • Grew pre-provision net revenue by 44% compared to 2024 (1) • Made substantial progress toward our commitment to achieve a 15%+ return on tangible common equity and 3.25%+ net interest margin by year-end 2027 (2) Strong Capital Position and Commenced More Meaningful Return of Capital Ended the year with peer-leading capital position; committed to more meaningful return of capital in 2026 • Common Equity Tier 1 (CET1) ratio of 11.8%; “Marked” CET1 ratio, which adjusts for unrealized available-for-sale securities and pension losses, of 10.4% • Repurchased $200 million shares in 4Q25; planned $1.2 billion+ of repurchases in 2026 Disciplined Risk Management Strong risk-management discipline with solid credit outcomes • Net charge-off ratio remained low at 41 bps in 2025 • Nonperforming assets, criticized loans, and delinquencies improved over the course of the year • High quality NDFI portfolio, approximately 90% investment grade with disciplined client selection; supportable, transparent structures; focus on risk diversity (1) Non-GAAP measure adjusted for selected items: refer to page 90 of KeyCorp’s Annual Report on Form 10-K filed on February 23, 2026, “GAAP to Non-GAAP Reconciliation” within Management’s Discussion and Analysis for reconciliations and see page 27 of our Fourth Quarter 2025 Earnings Release Supplemental Information Package attached as Exhibit 99.2 to Form 8-K filed on January 20, 2026, for breakout of Selected Items Impact on Earnings.
Proxy Statement Summary — 2025 client momentum, fee businesses, financial results and capital · Filed 27/03/2026
Key Consumer Bank’s focus on durable, long-term client relationships centered in core checking has been evident through the execution of our strategic priorities through focus areas such as developing a core Consumer relationship product suite and driving long-term deposits and fee income through new and enhanced products and services.
Consumer Bank — relationship strategy · Filed 23/02/2026
New products allow consumers to maintain funds in brokerage accounts or mutual funds that would have historically been held as bank deposits.
Risk Factors — alternatives to bank deposits · Filed 23/02/2026
The increasing pressure from our competitors, both bank and nonbank, to keep pace and adopt new technologies and products and services requires us to incur substantial expense.
Risk Factors — technology competition and expenditure · Filed 23/02/2026
Noninterest Expense Three Months Ended June 30, Percent Change Six Months Ended June 30, Percent Change Dollars in millions 2026 2025 2026 2025 Personnel $ 786 $ 705 11.5 % $ 1,529 $ 1,385 10.4 % Net occupancy 68 69 (1.4) 136 136 — Computer processing 108 107 0.9 219 214 2.3 Business services and professional fees 46 48 (4.2) 82 88 (6.8) Equipment 22 21 4.8 41 41 — Operating lease expense 7 10 (30.0) 14 21 (33.3) Marketing 22 24 (8.3) 40 45 (11.1) Other expense 158 170 (7.1) 337 355 (5.1) Total noninterest expense $ 1,217 $ 1,154 5.5 % $ 2,398 $ 2,285 4.9 % Personnel Personnel expense, the largest category of our noninterest expense, increased by $81 million, or 11.5%, for the three months ended June 30, 2026, compared to the same period one year ago.
MD&A — noninterest expense · Filed 04/08/2026
These increases primarily reflect lower interest-bearing deposit costs, the reinvestment of proceeds from maturing low-yielding investment securities, fixed-rate loans, and swaps into higher-yielding investments, and the repositioning of the available-for-sale portfolio during the second half of 2024, which involved the sale and reinvestment of approximately $10.0 billion of lower-yielding mortgaged-backed securities into higher-yielding investments.
MD&A — causes of 2025 net interest income improvement · Filed 23/02/2026
41 Table of contents Three months ended Six months ended Dollars in millions 6/30/2026 3/31/2026 12/31/2025 9/30/2025 6/30/2025 6/30/2026 6/30/2025 Net interest income (GAAP) $ 1,250 $ 1,222 $ 1,215 $ 1,184 $ 1,141 $ 2,472 $ 2,237 Add: Taxable-equivalent adjustment 8 8 8 9 9 16 18 Noninterest income (GAAP) 706 723 782 702 690 1,429 1,358 Less: Noninterest expense (GAAP) 1,217 1,181 1,241 1,177 1,154 2,398 2,285 Pre-provision net revenue from continuing operations (non-GAAP) $ 747 $ 772 $ 764 $ 718 $ 686 $ 1,519 $ 1,328 Net income (loss) attributable to Key common shareholders (GAAP) $ 473 $ 486 $ 475 $ 453 $ 389 $ 959 $ 758 Average Key shareholders’ equity (GAAP) $ 19,947 $ 20,392 $ 20,388 $ 19,664 $ 19,268 $ 20,169 $ 18,952 Less: Intangible assets (average) 2,756 2,758 2,762 2,767 2,772 2,757 2,774 Preferred stock (average) 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Average tangible common equity (non-GAAP) (A) $ 14,691 $ 15,134 $ 15,126 $ 14,397 $ 13,996 $ 14,912 $ 13,678 Key shareholders’ equity (GAAP) $ 19,798 $ 19,987 $ 20,381 $ 20,102 $ 19,484 Less: Intangible assets 2,755 2,757 2,760 2,765 2,770 Preferred stock (a) 2,446 2,446 2,446 2,446 2,446 Tangible common equity (non-GAAP) (B) $ 14,597 $ 14,784 $ 15,175 $ 14,891 $ 14,268 Total assets (GAAP) $ 191,317 $ 188,663 $ 184,381 $ 187,409 $ 185,499 Less: Intangible assets 2,755 2,757 2,760 2,765 2,770 Tangible assets (non-GAAP) (C) $ 188,562 $ 185,906 $ 181,621 $ 184,644 $ 182,729 Tangible common equity to tangible assets ratio (non-GAAP) (B/C) 7.7 % 8.0 % 8.4 % 8.1 % 7.8 % Income (loss) from continuing operations attributable to Key common shareholders (GAAP) (D) $ 472 $ 486 $ 474 $ 454 $ 387 $ 958 $ 757 Return on average tangible common equity from continuing operations (non-GAAP) (D/A) 12.9 % 13.0 % 12.4 % 12.5 % 11.1 % 13.0 % 11.2 % (a)Net of capital surplus.
GAAP to Non-GAAP Reconciliations — earnings, equity and tangible common equity returns · Filed 04/08/2026
The provision for credit losses in the second quarter of 2026 reflected net loan charge-offs of $115 million and a net reserve release of $23 million, as the favorable impact of an improved commercial portfolio mix more than offset the effects of loan growth, credit migration, and economic uncertainty.
MD&A — second-quarter credit losses and reserve release · Filed 04/08/2026
Capital Components and Risk-Weighted Assets Dollars in millions June 30, 2026 December 31, 2025 COMMON EQUITY TIER 1 Key shareholders’ equity (GAAP) $ 19,798 $ 20,381 Less: Preferred Stock (a) 2,446 2,446 Common Equity Tier 1 capital before adjustments and deductions 17,352 17,935 Less: Goodwill, net of deferred taxes 2,548 2,556 Intangible assets, net of deferred taxes 3 7 Deferred tax assets 139 136 Net unrealized gains (losses) on available-for-sale securities, net of deferred taxes (1,919) (1,789) Accumulated gains (losses) on cash flow hedges, net of deferred taxes (200) 68 Amounts in AOCI attributed to pension and postretirement benefit costs, net of deferred taxes (235) (238) Total Common Equity Tier 1 capital $ 17,016 $ 17,195 TIER 1 CAPITAL Common Equity Tier 1 $ 17,016 $ 17,195 Additional Tier 1 capital instruments and related surplus 2,446 2,446 Less: Deductions — — Total Tier 1 capital $ 19,462 $ 19,641 TIER 2 CAPITAL Tier 2 capital instruments and related surplus $ 1,390 $ 1,522 Allowance for losses on loans and liability for losses on lending-related commitments (b) 1,725 1,747 Less: Deductions — — Total Tier 2 capital 3,115 3,269 Total risk-based capital $ 22,577 $ 22,910 RISK-WEIGHTED ASSETS (d) $ 152,317 $ 145,933 AVERAGE QUARTERLY TOTAL ASSETS $ 188,501 $ 187,035 CAPITAL RATIOS (d) Tier 1 risk-based capital 12.78 % 13.46 % Total risk-based capital 14.82 % 15.70 % Leverage (c) 10.32 % 10.50 % Common Equity Tier 1 11.17 % 11.78 % (a)Net of capital surplus.
Capital — regulatory capital components and ratios · Filed 04/08/2026
As of December 31, 2025, KeyCorp and KeyBank (consolidated) met all regulatory capital requirements.
Regulatory capital — compliance at December 31, 2025 · Filed 23/02/2026
At June 30, 2026, KeyCorp held $5.3 billion in cash and short-term investments, which we projected to be sufficient to meet our projected obligations, including the repayment of our maturing debt obligations for the periods prescribed by our risk tolerance.
Liquidity risk management — parent cash and short-term investments · Filed 04/08/2026
As of June 30, 2026, KeyBank had regulatory capacity to pay $797 million in dividends to KeyCorp without prior regulatory approval.
Liquidity risk management — bank dividend capacity · Filed 04/08/2026
Wholesale funds, consisting of short-term borrowings and long-term debt, totaled $11.0 billion at December 31, 2025, compared to $14.2 billion at December 31, 2024.
Deposits and other sources of funds — wholesale funding · Filed 23/02/2026
•“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 31 Table of contents contractual maturity.
Market risk management — customer and counterparty repricing options · Filed 04/08/2026
86% of the average total target pay for our NEOs is delivered as variable pay tied to Key’s financial or share price performance, with 32% tied to annual performance and the remaining 54% tied to multi-year performance.
Compensation Discussion and Analysis — variable and multiyear compensation · Filed 27/03/2026
✓ Impose Robust Stock Ownership Guidelines ranging from six times base salary for our CEO to three times base salary for our other executive officers.
Compensation Discussion and Analysis — executive stock ownership guidelines · Filed 27/03/2026
The result of 63% shareholder support is notably below our average of over 92% in the last five years (2020-2024), and we were eager to understand and address shareholder perspectives on our executive compensation program.
Compensation Committee letter — 2025 say-on-pay outcome · Filed 27/03/2026
What we heard What we did Overall appreciation for incentive compensation metric selection, rationale and alignment with long-term strategy Made targeted refinements, as reflected below Based on this positive feedback, we focused on making targeted refinements to our executive compensation plan design and provided additional disclosure where appropriate, rather than pursuing significant changes Concerns about the use of one-time awards in granting the Capital and Earnings Improvement Awards in 2024 No special awards were granted in 2025; one-time awards are not a regular component of our executive compensation program The awards granted in 2024 were driven by the unique circumstances and opportunity presented by the Scotiabank strategic minority investment 31 Table of Contents Compensation Discussion and Analysis What we heard What we did Preference for more emphasis on pre-set financial goals in annual incentive plan Revised the design of the KeyCorp Annual Incentive Plan to increase focus on achievement of pre-established financial measures Under the new, more formulaic structure, 70% of overall possible funding is now tied to absolute financial measures (versus 50% in 2024).
Compensation Discussion and Analysis — shareholder concerns and implemented responses · Filed 27/03/2026
Each standing committee of the Board is chaired by an independent director and consists solely of independent directors.
Board governance — standing committee independence · Filed 27/03/2026
Among his specific responsibilities, the independent Lead Director: • presides at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors held after each regularly scheduled Board meeting; • serves as liaison between the Chairman and the independent directors; • approves Board meeting schedules as well as meeting materials and agendas for each full Board meeting and executive sessions of independent directors; • has the authority to call meetings of the independent directors or the full Board at any time; • participates in discussions with major shareholders regarding governance matters as part of KeyCorp’s proactive shareholder engagement; • is in frequent contact with the Chairman with respect to major issues and strategic opportunities before KeyCorp, and any significant actions contemplated by KeyCorp are discussed with the Lead Director at an early stage; • advises on the retention of independent consultants to the Board; • interviews all candidates for election to the Board; • oversees changes to the composition of Board committees; • assists the Board and management in assuring compliance with applicable securities laws and fiduciary duties to shareholders; • oversees initiatives to implement enhancements to KeyCorp’s governance policies, including the Corporate Governance Guidelines; • serves as a focal point for independent Committee Chairs, providing guidance, coordination, and advice for the committees; • together with the Chair of the Compensation and Organization Committee, facilitates the evaluation of the performance of KeyCorp’s Chief Executive Officer; and • is available for additional duties as they may arise.
Board governance — independent Lead Director authority · Filed 27/03/2026
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 Dollar value of shares that may yet be purchased as part of publicly announced plans or programs April 1 - 30 2,837,030 $ 21.99 2,833,620 $ 347,951,620 May 1 - 31 5,206,374 21.53 5,204,729 2,944,398,442 June 1 - 30 7,493,776 22.22 7,492,968 2,777,926,421 Total 15,537,180 $ 21.95 15,531,317 (a)Includes Common Shares deemed surrendered by employees in connection with our stock compensation and benefit plans to satisfy tax obligations.
Issuer purchases of equity securities — actual second-quarter 2026 repurchases · Filed 04/08/2026
During the first quarter of 2026, Key completed $389 million, or approximately 18 million shares, in share repurchases including $45 million, or approximately 2 million shares, from Scotiabank pursuant to our repurchase agreement described above.
Shareholders' Equity — actual first-quarter 2026 repurchases · Filed 05/05/2026
Treasury stock, at cost (184,667,530 and 154,301,387 shares)
Consolidated balance sheet — treasury shares · Filed 04/08/2026
Figure 7. Personnel Expense Dollars in millions Three Months Ended June 30, Percent Change Six Months Ended June 30, Percent Change 2026 2025 2026 2025 Salaries and contract labor $ 448 $ 427 4.9 % $ 887 $ 832 6.6 % Incentive and stock-based compensation (a) 194 168 15.5 366 326 12.3 Employee benefits 140 108 29.6 267 217 23.0 Severance 4 2 100.0 9 10 (10.0) Total personnel expense $ 786 $ 705 11.5 % $ 1,529 $ 1,385 10.4 % (a)Excludes directors’ stock-based compensation of $2 million and $2 million for the three months ended June 30, 2026, and June 30, 2025, respectively, and $3 million and $2 million for the six months ended June 30, 2026 and June 30, 2025, respectively, reported as “other expense” in Figure 6.
Personnel Expense — incentive and stock-based compensation · Filed 04/08/2026
Common Shares, $1 par value; authorized 2,100,000,000 shares; issued 1,256,702,081 shares
Consolidated balance sheet — issued common shares · Filed 04/08/2026
