Company: KEY-PI
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0000091576-25-000058
Chunk: 71

Company: KEYCORP /NEW/
Filing Date: 2025-05-06
Form: 10-Q
Item: Item 2
Chunk 71
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 — (1)— 15 Total ALLL — including discontinued operations$1,524 $115 $(98)$16 $1,557 (a)Excludes a credit related to reserves on lending-related commitments of $14 million.As described in Note 1 ("Summary of Significant Accounting Policies"), under the heading “Allowance for Loan and Lease Losses” beginning on page 112 of our 2024 Form 10-K, we estimate the ALLL using relevant available information, from internal and external sources, relating to past events, current economic and portfolio conditions, and reasonable and supportable forecasts. In our estimation of expected credit losses, we use a two year reasonable and supportable period across all products. Following this two year period in which supportable forecasts can be generated, for all modeled loan portfolios, we revert expected credit losses to a level that is consistent with our historical information by reverting the macroeconomic variables (model inputs) to their long run average. We revert to historical loss rates for less complex estimation methods for smaller portfolios. A 20-year fixed length look back period is used to calculate the long run average of the macroeconomic variables. A four quarter reversion period is used where the macroeconomic variables linearly revert to their long run average following the two year reasonable and supportable period.  We develop our reasonable and supportable forecasts using relevant data including, but not limited to, changes in economic output, unemployment rates, property values, and other factors associated with the credit losses on financial assets. Some macroeconomic variables apply to all portfolio segments, while others are more portfolio specific. The following table discloses key macroeconomic variables for each loan portfolio.

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SegmentPortfolioKey Macroeconomic Variables (a)CommercialCommercial and industrialBBB corporate bond rate (spread), fixed investment, business bankruptcies, GDP, industrial production, unemployment rate, and Producer Price IndexCommercial real estateProperty & real estate price indices, unemployment rate, business bankruptcies, GDP, and SOFRCommercial lease financingBBB corporate bond rate (spread), GDP, and unemployment rateConsumerReal estate — residential mortgageGDP, home price index, unemployment rate, 30 year mortgage rate and U.S. household incomeHome equityHome price index, unemployment rate, and 30 year mortgage rateOther consumerUnemployment rate, prime rate and U.S. household incomeCredit cardsUnemployment rate and U.S. household incomeDiscontinued operationsUnemployment rate(a)Variables include all transformations and interactions with other risk drivers. Additionally, variables