Company: KEY-PI
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001628280-25-048757
Chunk: 239

Company: KEYCORP /NEW/
Filing Date: 2025-11-04
Form: 10-Q
Item: Item 8
Chunk 239
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 owed.Nonperforming loans reduced expected interest income by $12 million and $39 million for the three and nine months ended September 30, 2025, respectively, and $14 million and $41 million for the three and nine months ended September 30, 2024, respectively.The amortized cost basis of nonperforming loans on nonaccrual status for which there is no related allowance for credit losses was $361 million at September 30, 2025 and $381 million at December 31, 2024. As of September 30, 2025, 48% 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 September 30, 2025 and September 30, 2024, the recorded investment of consumer residential mortgage and home equity loans in the process of foreclosure was $66 million and $73 million, respectively.There were no significant changes in the extent to which collateral secures our collateral-dependent financial assets during the three and nine months ended September 30, 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 cannot otherwise restructure at market terms and conditions, are considered to be experiencing financial difficulty. A modification of a loan is subject to the normal underwriting standards and processes for other similar credit extensions, both new and existing. The modified loan is evaluated to determine if it is a new loan or a continuation of the prior loan. Consumer loans in which a borrower