Company: KEY-PI
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0000091576-25-000110
Chunk: 202

Company: KEYCORP /NEW/
Filing Date: 2025-08-05
Form: 10-Q
Item: Item 1
Chunk 202
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 $4,332 $75.61 $70.00 $3,582 $74.59  If these economic assumptions change or prove incorrect, the fair value of residential mortgage servicing assets may also change. Prepayment speed, discount rates, and servicing cost are critical to the valuation of residential mortgage servicing assets. Estimates of these assumptions are based on how a market participant would view the respective rates and reflect historical data associated with the residential mortgage loans, industry trends, and other considerations. Actual rates may differ from those estimated due to changes in a variety of economic factors. Anincrease in the prepayment speed would cause a decrease in the fair value of our residential mortgage servicingassets. An increase in the assigned discount rates and servicing cost assumptions would cause a decrease in thefair value of our residential mortgage servicing assets.The amortization of residential servicing assets for June 30, 2025, as shown in the table above, is recorded as a reduction to contractual fee income. The contractual fee income from servicing residential mortgage loans totaled $20 million for the six-month period ended June 30, 2025, and $19 million for the six-month period ended June 30, 2024. This fee income was offset by $6 million of amortization for the six-month period ended June 30, 2025, and $5 million for the six-month period ended June 30, 2024. Both the contractual fee income and the amortization are recorded, net, in “consumer mortgage income” on the income statement.

9. Leases As a lessee, we enter into leases of land, buildings, and equipment. Our real estate leases primarily relate to bank branches and office space. The leases of equipment principally relate to technology assets for data processing and data storage. As a lessor, we primarily provide financing through our equipment leasing business. For more information on our leasing activity, see Note 10 (“Leases”) beginning on page 152 of our 2024 Form 10-K.Lessor Equipment LeasingLeases may have fixed or floating rate terms. Variable payments are based on an index or other specified rate and are included in rental payments. Certain leases contain an option to extend the lease term or the option to terminate at the discretion of the lessee. Under certain conditions, lease agreements may also contain the option for a lessee to purchase the underlying asset.

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Interest income from sales-type and direct financing leases is recognized in "interest income — loans" on the Consolidated