Business Segment Reporting

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Business Segment Reporting

20. Business Segment Reporting

The following is description of the segments and their primary businesses at June 30, 2022.

Consumer Bank

The Consumer Bank serves individuals and small businesses throughout our 15-state branch footprint as well as healthcare professionals nationally through our Laurel Road digital brand by offering a variety of deposit and investment products, personal finance and financial wellness services, lending, student loan refinancing, mortgage and home equity, credit card, treasury services, and business advisory services. In addition, wealth management and investment services are offered to assist non-profit and high-net-worth clients with their banking, trust, portfolio management, life insurance, charitable giving, and related needs.

Commercial Bank

The Commercial Bank consists of the Commercial and Institutional operating segments. The Commercial operating segment is a full-service, commercial banking platform that focuses primarily on serving the borrowing, cash management, and capital markets needs of middle market clients within Key’s 15-state branch footprint. It is also a significant, national, commercial real estate lender and third-party servicer of commercial mortgage loans and special servicer of CMBS. The Institutional operating segment operates nationally in providing lending, equipment financing, and banking products and services to large corporate and institutional clients. The industry coverage and product teams have established expertise in the following sectors: Consumer, Energy, Healthcare, Industrial, Public Sector, Real Estate, and Technology. The operating segment includes the KBCM platform which provides a broad suite of capital markets products and services including syndicated finance, debt and equity capital markets, derivatives, foreign exchange, financial advisory, and public finance. Additionally, KBCM provides fixed income and equity sales and trading services to investor clients.

Other

Other includes various corporate treasury activities such as management of our investment securities portfolio, long-term debt, short-term liquidity and funding activities, and balance sheet risk management, our principal investing unit, and various exit portfolios as well as reconciling items which primarily represents the unallocated

portion of nonearning assets of corporate support functions. Charges related to the funding of these assets are part of net interest income and are allocated to the business segments through noninterest expense. Reconciling items also include intercompany eliminations and certain items that are not allocated to the business segments because they do not reflect their normal operations.

The development and application of the methodologies that we use to allocate items among our business segments is a dynamic process. Accordingly, financial results may be revised periodically to reflect enhanced alignment of expense base allocations drivers, changes in the risk profile of a particular business, or changes in our organizational structure.

The table below shows selected financial data for our business segments for the three- and six-month periods ended June 30, 2022, and June 30, 2021. Capital is assigned to each business segment based on a combination of regulatory and economic equity.

Three months ended June 30,	Consumer Bank						Commercial Bank						Other						Total Key
Dollars in millions	2022			2021			2022			2021			2022			2021			2022			2021
SUMMARY OF OPERATIONS
Net interest income (TE)	$	570		$	599		$	440		$	417		$	94		$	7		$	1,104		$	1,023
Noninterest income	254			253			404			454			30			43			688			750
Total revenue (TE) (a)	824			852			844			871			124			50			1,792			1,773
Provision for credit losses	8			(70)			37			(131)			—			(21)			45			(222)
Depreciation and amortization expense	22			20			30			33			17			23			69			76
Other noninterest expense	654			564			384			418			(29)			18			1,009			1,000
Income (loss) from continuing operations before income taxes (TE)	140			338			393			551			136			30			669			919
Allocated income taxes and TE adjustments	33			81			78			119			28			(5)			139			195
Income (loss) from continuing operations	107			257			315			432			108			35			530			724
Income (loss) from discontinued operations, net of taxes	—			—			—			—			3			5			3			5
Net income (loss)	107			257			315			432			111			40			533			729
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—			—			—			—			—
Net income (loss) attributable to Key	$	107		$	257		$	315		$	432		$	111		$	40		$	533		$	729
AVERAGE BALANCES (b)
Loans and leases	$	40,818		$	40,598		$	67,834		$	59,953		$	486		$	263		$	109,138		$	100,814
Total assets (a)	43,868			43,818			78,824			69,101			60,835			64,951			183,527			177,870
Deposits	91,256			88,412			54,864			54,814			1,351			1,096			147,471			144,322
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	23		$	34		$	21		$	9		$	—		$	(21)		$	44		$	22
Return on average allocated equity (b)	11.66		%	28.53		%	14.16		%	20.69		%	24.11		%	2.39		%	14.76		%	16.26		%
Return on average allocated equity	11.66			28.53			14.16			20.69			24.78			2.73			14.85			16.37
Average full-time equivalent employees (c)	8,024			7,929			2,396			2,483			6,994			6,591			17,414			17,003

(a)Substantially all revenue generated by our major business segments is derived from clients that reside in the United States. Substantially all long-lived assets, including premises and equipment, capitalized software, and goodwill held by our major business segments, are located in the United States.

(b)From continuing operations.

(c)The number of average full-time equivalent employees was not adjusted for discontinued operations.

Six months ended June 30,	Consumer Bank						Commercial Bank						Other							Total Key
Dollars in millions	2022			2021			2022			2021			2022				2021			2022			2021
SUMMARY OF OPERATIONS
Net interest income (TE)	$	1,113		$	1,206		$	855		$	828		$	156			$	1		$	2,124		$	2,035
Noninterest income	510			511			799			901			55				76			1,364			1,488
Total revenue (TE) (a)	1,623			1,717			1,654			1,729			211				77			3,488			3,523
Provision for credit losses	51			(94)			78			(198)			(1)				(23)			128			(315)
Depreciation and amortization expense	43			37			61			67			35				47			139			151
Other noninterest expense	1,296			1,150			770			827			(57)				19			2,009			1,996
Income (loss) from continuing operations before income taxes (TE)	233			624			745			1,033			234				34			1,212			1,691
Allocated income taxes and TE adjustments	56			150			147			218			32				(19)			235			349
Income (loss) from continuing operations	177			474			598			815			202				53			977			1,342
Income (loss) from discontinued operations, net of taxes	—			—			—			—			4				9			4			9
Net income (loss)	177			474			598			815			206				62			981			1,351
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—			—				—			—			—
Net income (loss) attributable to Key	$	177		$	474		$	598		$	815		$	206		(d)	$	62		$	981		$	1,351
AVERAGE BALANCES (b)
Loans and leases	$	39,734		$	39,927		$	66,276		$	60,584		$	455			$	266		$	106,465		$	100,777
Total assets (a)	42,847			43,151			76,853			69,771			63,360				62,149			183,060			175,071
Deposits	91,361			86,732			56,070			53,362			1,378				950			148,809			141,044
OTHER FINANCIAL DATA
Net loan charge-offs (b)	$	45		$	70		$	32		$	87		—				(21)			$	77		$	136
Return on average allocated equity (b)	9.81		%	27.18		%	13.70		%	19.01		%	12.96		%		1.89		%	12.64		%	15.19		%
Return on average allocated equity	9.81			27.18			13.70			19.01			13.22				2.21			12.69			15.29
Average full-time equivalent employees (c)	7,962			8,106			2,399			2,371			6,901				6,569			17,262			17,046

(a)Substantially all revenue generated by our major business segments is derived from clients that reside in the United States. Substantially all long-lived assets, including premises and equipment, capitalized software, and goodwill held by our major business segments, are located in the United States.

(b)From continuing operations.

(c)The number of average full-time equivalent employees was not adjusted for discontinued operations.