Keyp(US:KEY)2023-02-22 20:19Financial Overview - KeyCorp's consolidated total assets were approximately $189.8 billion as of December 31, 2022[22]. - KeyBank operates 972 full-service retail banking branches and 1,265 ATMs across 15 states[23]. - KeyCorp's workforce consisted of 18,891 employees as of December 31, 2022, with 58.7% being female[43][46]. - KeyCorp's Common Equity Tier 1 capital ratio was 9.10% as of December 31, 2022, exceeding the regulatory minimum of 4.50%[77]. - The Tier 1 Capital ratio for KeyCorp was 10.60% at the end of 2022, above the regulatory requirement of 6.00%[77]. - Total Capital ratio stood at 12.79% for KeyCorp, surpassing the minimum requirement of 8.00%[77]. - KeyCorp's leverage ratio was 8.88%, significantly higher than the required minimum of 4.00%[77]. - KeyBank is considered "well capitalized" under the revised prompt corrective action framework as of December 31, 2022[81]. Business Segments - The Consumer Bank segment offers a variety of services including personal finance, lending, and investment management to individuals and small businesses[29]. - The Commercial Bank segment focuses on middle market clients and includes a significant national commercial real estate lending operation[31]. - KeyCorp's investment management services cater to large corporate and public retirement plans, foundations, and high-net-worth individuals[24]. Diversity and Workforce - The company has steadily increased its starting minimum wage since 2015 to remain competitive in the labor market[37]. - KeyCorp's Board of Directors is 46% diverse, with six out of 13 directors being from diverse backgrounds[43]. - The company emphasizes a commitment to pay equity, with women earning on average more than 99% of what their male counterparts earn[42]. Regulatory Environment - The financial services industry is highly competitive, with KeyCorp facing pressure from larger institutions and nonbank companies[35]. - KeyCorp has elected to be treated as a Financial Holding Company, allowing it to engage in a broader scope of financial activities[64]. - The regulatory capital requirements are based on the Basel Committee's standards, aimed at enhancing global bank regulation and financial stability[69]. - KeyCorp is required to maintain a Modified Liquidity Coverage Ratio (LCR) of at least 100% as per the Liquidity Coverage Rules, which became effective on October 1, 2018[94]. - The final rule for the Net Stable Funding Ratio (NSFR) requires banking organizations with over $100 billion in total assets to maintain minimum amounts of stable funding, effective July 1, 2021[102]. - KeyCorp is classified as a Category IV firm under the Tailoring Rules, which means it is not subject to certain liquidity requirements, including the NSFR[102]. - KeyCorp is required to participate in the Federal Reserve's Comprehensive Capital Analysis and Review (CCAR) process, which includes supervisory stress tests every other year[108]. Risk Management - KeyCorp's risk management program identifies major risk categories, including credit risk, compliance risk, and operational risk[177]. - The company relies heavily on employees and systems to manage operational risks, which may be exacerbated by employee turnover and labor shortages[194]. - Cybersecurity risks are heightened due to reliance on third-party service providers and the increasing use of mobile payments and internet-based products[195]. - The company has experienced significant distributed denial-of-service attacks and other cyber threats, which could lead to legal liability and reputational harm[198]. - The company may incur significant expenses to improve system reliability and security against cyber threats, with potential losses exceeding insurance coverage[203]. - The company faces risks from claims and litigation, which could result in significant financial liability and reputational risk[205]. Economic and Market Conditions - The Federal Reserve's actions, including emergency interest rate cuts, have led to increased market and interest rate volatility, impacting KeyCorp's business[217]. - The slope of the yield curve is influenced by federal agency actions, affecting loan and deposit rates as well as investment values[218]. - The deterioration of commercial real estate market fundamentals could adversely affect KeyCorp's financial condition and results of operations[179]. - Natural disasters exacerbated by climate change could materially impact the company's financial position and operational results[209]. Compliance and Reporting - The SEC's proposal to require public companies to disclose climate-related risks could necessitate significant changes in reporting practices for KeyCorp[173]. - Changes in accounting policies and standards could materially affect how KeyCorp reports its financial condition and results of operations[192]. - KeyBank is required to maintain arm's-length terms in transactions with affiliates, with specific limitations based on regulatory capital[150]. - The OCC issued a final rule in 2020 to modernize the Community Reinvestment Act (CRA) framework, effective October 1, 2020, with compliance dates extending to January 1, 2023, and January 1, 2024[157].