Company: KEY-PI
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0000091576-25-000038
Chunk: 104

Company: KEYCORP /NEW/
Filing Date: 2025-02-21
Form: 10-K
Item: Item 8
Chunk 104
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 digital brand. The swaps protect against the possible short-term decline in the value of the loans that could result from changes in interest rates between the time they are originated and the time they are sold.Derivatives Not Designated in Hedge RelationshipsWe may enter into interest rate swap contracts to manage economic risks but do not designate the instruments in hedge relationships. Excluding contracts addressing customer exposures, the amount of derivatives hedging risks on an economic basis at December 31, 2024, was not significant.Like other financial services institutions, we originate loans and extend credit, both of which expose us to credit risk. We actively manage our overall loan portfolio and the associated credit risk in a manner consistent with asset quality objectives and concentration risk tolerances to mitigate portfolio credit risk. Purchasing credit protection through default swaps enables us to transfer to a third party a portion of the credit risk associated with a particular extension of credit, including situations where there is a forecasted sale of loans. We purchase credit default swaps to reduce the credit risk associated with the debt securities held in our trading portfolio.We also enter into derivative contracts for other purposes, including: •interest rate swap, cap, and floor contracts entered into generally to accommodate the needs of commercial loan clients;•energy and base metal swap and option contracts entered into to accommodate the needs of clients;•foreign exchange forward and option contracts entered into primarily to accommodate the needs of clients; and•futures contracts and positions with third parties that are intended to offset or mitigate the interest rate or market risk related to client positions discussed above.

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Fair Values, Volume of Activity, and Gain/Loss Information Related to Derivative InstrumentsThe following table summarizes the fair values of our derivative instruments on a gross and net basis as of December 31, 2024, and December 31, 2023. The change in the notional amounts of these derivatives by type from December 31, 2023, to December 31, 2024, indicates the volume of our derivative transaction activity during 2024. The notional amounts are not affected by bilateral collateral and master netting agreements. The derivative asset and liability balances are presented on a gross basis, prior to the application of bilateral collateral and master netting agreements. Total derivative assets and liabilities are adjusted to take into account the impact of legally enforceable master netting agreements that allow us to settle all derivative contracts with a single counterparty on a net basis and to offset the net derivative position with the related cash collateral. Where master netting agreements are