KEYCORP NEW
For the period ended Dec 31, 2024. Filed Feb 21, 2025.
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FY2024 · Filed Feb 21, 2025
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Securities
Our securities portfolio is constructed to store liquidity and help manage interest rate risk, including holding securities used to accommodate pledging requirements. Our securities portfolio totaled $45.1 billion at December 31, 2024, compared to $45.8 billion at December 31, 2023. Available-for-sale securities were $37.7 billion at December 31, 2024, compared to $37.2 billion at December 31, 2023. Held-to-maturity securities were $7.4 billion at December 31, 2024, compared to $8.6 billion at December 31, 2023.
As shown in Figure 15, all of our mortgage-backed securities, which include both securities available-for-sale and held-to-maturity securities, are issued by government-sponsored enterprises or GNMA, and are traded in liquid secondary markets. These securities are recorded on the balance sheet at fair value for the available-for-sale portfolio and at cost for the held-to-maturity portfolio. For more information about these securities, see Note 6 (“Fair Value Measurements”) under the heading “Qualitative Disclosures of Valuation Techniques,” and Note 7 (“Securities”).
Figure 15. Mortgage-Backed Securities by Issuer
| December 31,Dollars in millions | 2024 | 2023 |
|---|---|---|
| FHLMC & FNMA | $14,291 | $24,302 |
| GNMA | 21,573 | 11,665 |
| Total (a) | $35,864 | $35,967 |
(a)Includes securities held in the available-for-sale and held-to-maturity portfolios.
Securities available for sale
The majority of our securities available-for-sale portfolio consists of federal agency mortgage-backed securities and CMOs. CMOs are debt securities secured by a pool of mortgages or mortgage-backed securities. In September 2024, we initiated a strategic repositioning of our securities available for sale portfolio by selling approximately $7.0 billion in market value of low-yielding mortgage-backed securities. The investment securities that were sold had a weighted average book yield of approximately 2.3% and an average duration of approximately six years. Reinvestment of the proceeds from the sale was completed in October 2024, with the new securities having an average book yield of approximately 4.95% and an average duration of approximately four years. During the third quarter of 2024, along with our customary sale of short-dated U.S. Treasuries set to mature within the quarter, we also sold approximately $3 billion in U.S. Treasuries yielding 50 basis points that were set to mature in the fourth quarter of 2024.
In December 2024, we completed the strategic repositioning of our securities available-for-sale portfolio by selling an additional $3.0 billion of low-yielding investment securities and terminating approximately $3.0 billion of fair value hedges. The investment securities sold had a weighted average book yield of approximately 1.5% and an average duration of approximately eight years. Reinvestment of the proceeds from the sale was completed in December 2024, with the new securities having an average book yield of 5.5% and an average duration of approximately four years.
Figure 16 shows the composition, TE yields, and remaining maturities of our securities available for sale. For more information about these securities, including gross unrealized gains and losses by type of security and securities pledged, see Note 7 (“Securities”).
Figure 16. Securities Available for Sale
| Dollars in millions · U.S. Treasury, Agencies, and Corporations · Agency Residential Collateralized Mortgage Obligations(a) · Agency Residential Mortgage-backed Securities(a) · Agency Commercial Mortgage-backed Securities(a) · Total · Weighted-Average Yield(b) | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Remaining maturity: | |||||||||
| One year or less | $2,585 | $4 | $6 | $580 | $3,175 | 3.93% | |||
| After one through five years | 6,212 | 1,140 | 2,931 | 612 | 10,895 | 3.66 | |||
| After five through ten years | 40 | 6,073 | 6,934 | 2,358 | 15,405 | 3.29 | |||
| After ten years | 67 | 2,007 | 5,298 | 860 | 8,232 | 3.49 | |||
| Fair value | $8,904 | $9,224 | $15,169 | $4,410 | $37,707 | ||||
| Amortized cost(b) | 8,928 | 11,409 | 16,038 | 4,927 | 41,302 | 3.48% | |||
| Weighted-average yield(c) | 4.21% | 1.98% | 4.32% | 2.91% | 3.48% | — | |||
| Weighted-average maturity | 1.7 years | 8.3 years | 9.9 years | 6.7 years | 7.3 years | — | |||
| Fair value | $9,026 | $15,478 | $3,589 | $9,092 | $37,185 | —% | |||
| Amortized cost | 9,300 | 18,911 | 4,189 | 10,295 | 42,695 | 1.79 | |||
(a)Maturity is based upon expected average lives rather than contractual terms.
(b)Excluded from the amortized cost of securities available for sale are basis adjustments for securities designated in active fair value hedges. Basis adjustments totaled $(6) million and $140 million as of December 31, 2024 and December 31, 2023, respectively. The securities being hedged are primarily U.S Treasuries, Agency RMBS, and Agency CMBS.
(c)Weighted-average yields are calculated based on amortized cost. Such yields have been adjusted to a TE basis using the statutory federal income tax rate in effect that calendar year.
Held-to-maturity securities
The majority of our held-to-maturity portfolio consists of federal agency CMOs and mortgage-backed securities. The portfolio is also comprised of asset-backed securities and foreign bonds. Figure 17 shows the composition, yields, and remaining maturities of these securities.
Figure 17. Held-to-Maturity Securities
| Dollars in millions | Agency Residential Collateralized Mortgage Obligations(a) | Agency Residential Mortgage-backed Securities(a) | Agency Commercial Mortgage-backed Securities(a) | Asset-backed securities(a) | OtherSecurities | Total | Weighted-Average Yield(b) |
|---|---|---|---|---|---|---|---|
| Remaining maturity: | |||||||
| One year or less | $35 | $— | $41 | $2 | $7 | $85 | 2.54% |
| After one through five years | 1,160 | 101 | 1,221 | 304 | 19 | 2,805 | 3.05 |
| After five through ten years | 2,429 | 7 | 236 | 2 | — | 2,674 | 3.59 |
| After ten years | 953 | 43 | 835 | — | — | 1,831 | 3.79 |
| Amortized cost | $4,577 | $151 | $2,333 | $308 | $26 | $7,395 | 3.43% |
| Fair value | 4,248 | 134 | 2,130 | 300 | 25 | 6,837 | — |
| Weighted-average yield(b) | 3.78% | 2.82% | 2.94% | 2.09% | 4.17% | 3.43% | — |
| Weighted-average maturity | 7.2 years | 7.1 years | 8.3 years | 1.4 years | 1.9 years | 7.3 years | — |
| Amortized cost | $5,170 | $165 | $2,473 | $738 | $29 | $8,575 | 3.49% |
| Fair value | 4,896 | 152 | 2,270 | 709 | 29 | 8,056 | — |
(a)Maturity is based upon expected average lives rather than contractual terms.
(b)Weighted-average yields are calculated based on amortized cost. Such yields have been adjusted to a TE basis using the statutory federal income tax rate in effect that calendar year.
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