Company: KEY-PI
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0000091576-25-000110
Chunk: 22

Company: KEYCORP /NEW/
Filing Date: 2025-08-05
Form: 10-Q
Item: Item 2
Chunk 22
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 equipment, operating lease expense, marketing, and other expense. See the "Consolidated Statements of Income" in Item 1. Financial Statements of this report.

Personnel

Personnel expense, the largest category of our noninterest expense, increased by $69 million, or 10.8%, for the three months ended June 30, 2025, compared to the same period one year ago. For the six months ended June 30, 2025, personnel expense was up $75 million, or 5.7%, compared to the same period one year ago. The increases were driven continued investments in people and higher incentive compensation.

Nonpersonnel expense

Other nonpersonnel expense includes net occupancy, computer processing, business services and professional fees, equipment, operating lease expense, marketing, and other miscellaneous expense categories. Other nonpersonnel expense for the three months ended June 30, 2025, increased $6 million, or 1.4%, from the year-ago quarter, primarily due to increases in business services and professional fees driven by increases in technology-related investments, offset by decreases in operating lease expense and other expense. For the six months ended June 30, 2025, other nonpersonnel expense decreased $12 million, or 1.3%, from the six months ended June 30, 2024, primarily due to decreases in operating lease expense and other expense.

18

Income taxes

We recorded tax expense of $116 million for the second quarter of 2025 and $62 million for the second quarter of 2024. We recorded tax expense of $225 million for the six months ended June 30, 2025, compared to $121 million for the six months ended June 30, 2024.

Our federal tax expense and effective tax rate differs from the amount that would be calculated using the federal statutory tax rate, primarily due to investments in tax-advantaged assets, such as corporate-owned life insurance, tax credits associated with low-income housing investments, and periodic adjustments to our tax reserves.

On July 4, 2025, new U.S. tax legislation was signed into law (known as the "One Big Beautiful Bill Act" or "OBBBA"), which makes permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025. In addition, the OBBBA makes changes to certain U.S. corporate tax provisions, but many are