Company: KEY-PI
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0000091576-25-000038
Chunk: 53

Company: KEYCORP /NEW/
Filing Date: 2025-02-21
Form: 10-K
Item: Item 8
Chunk 53
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AD: This component model estimates the loan balance at the time the borrower stops making payments. For all term loans, an amortization based formulaic approach is used for account level EAD estimates. Wecalculate EAD using a portfolio specific method in each of our revolving product portfolios. For line products that are unconditionally cancellable, the balances will either use a paydown curve or be held flat through the life of the loan.Qualitative ComponentThe ALLL also includes identified qualitative factors related to idiosyncratic risk factors, changes in current economic conditions that may not be reflected in quantitatively derived results, and other relevant factors to ensure the ALLL reflects our best estimate of current expected credit losses. While our reserve methodologies strive to reflect all relevant risk factors, there continues to be uncertainty associated with, but not limited to, potential imprecision in the estimation process due to the inherent time lag of obtaining information and normal variations between estimatesand actual outcomes. We provide additional reserves that are designed to provide coverage for losses attributable to such risks. The ALLL also includes factors that may not be directly measured in the determination of individual or collective reserves. Such qualitative factors may include:•     The nature and volume of the institution’s financial assets;•     The existence, growth, and effect of any concentrations of credit;•     The volume and severity of past due financial assets, the volume of nonaccrual assets, and the volume and     severity of adversely classified or graded assets;•     The value of the underlying collateral for loans that are not collateral dependent;•     The institution’s lending policies and procedures, including changes in underwriting standards and practices for collections, write-offs, and recoveries;•     The quality of the institution’s credit review function;•     The experience, ability, and depth of the institution’s lending, investment, collection, and other relevant management and staff;•     The effect of other external factors such as the regulatory, legal and technological environments; competition; and events such as natural disasters; and•     Actual and expected changes in international, national, regional, and local economic and business conditions and developments in which the institution operates that affect the collectability of financial assets.

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Liability for Credit Losses on Lending-Related CommitmentsThe liability for credit losses on lending-related commitments, such as letters of credit and unfunded loan commitments, is included in “accrued expense and other liabilities”