Company: KEY-PI
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0000091576-25-000058
Chunk: 149

Company: KEYCORP /NEW/
Filing Date: 2025-05-06
Form: 10-Q
Item: Item 1
Chunk 149
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Net of unearned income, net of deferred fees and costs, and unamortized discounts and premiums.At March 31, 2025, the carrying amount of our commercial nonperforming loans outstanding represented 69% of their original contractual amount owed, total nonperforming loans outstanding represented 75% of their original contractual amount owed, and nonperforming assets in total were carried at 78% of their original contractual amount owed.Nonperforming loans reduced expected interest income by $13 million for the three months ended March 31, 2025, and $13 million for the three months ended March 31, 2024.The amortized cost basis of nonperforming loans on nonaccrual status for which there is no related allowance for credit losses was $423 million at March 31, 2025 and $381 million at December 31, 2024. As of March 31, 2025, 39% of our nonperforming loans were contractually current versus 43% as of December 31, 2024.

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Collateral-dependent Financial AssetsWe 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 March 31, 2025 and March 31, 2024, the recorded investment of consumer residential mortgage and home equity loans in the process of foreclosure was approximately $68 million and $133 million, respectively.There were no significant changes in the extent to which collateral secures our collateral-dependent financial assets during the three months ended March 31, 2025.Loan Modifications Made to Borrowers Experiencing Financial DifficultyThe 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”) of our 2024 Form 10-K.Modifications for Borrowers Experiencing Financial DifficultyOur 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