Slide 1: Third Quarter 2011 Earnings Review
Exhibit 99.2 KeyCorp Third Quarter 2011 Earnings Review October 20, 2011 Beth E. Mooney Jeffrey B. Weeden Chairman and Chief Financial Officer Chief Executive Officer
Slide 2: Forward-Looking Statement Disclosure
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 FORWARD-LOOKING STATEMENT DISCLOSURE This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about Key’s financial condition, results of operations, earning
Slide 3: Investor Highlights – Third Quarter 2011
Investor Highlights – Third Quarter 2011 Positive momentum in financial results Execution of Continued improvement in credit quality Business Plan Well controlled expenses - driving to create positive operating leverage Inflection point for loan portfolio Growing the Momentum in the business – new c
Slide 4: Executing Business Plan: Progress on Targets for Success
Executing Business Plan: Progress on Targets for Success KEY Business KEY KEY Metrics (a) Targets Action Plans Model 3Q11 Improve risk profile of loan portfolio and grow Core funded Loan to deposit ratio (b) 86% 90-100% relationships Improve deposit mix and grow deposit base Focus on relationship cl
Slide 5: Financial Review
Financial Review 5
Slide 6: Financial Summary – Third Quarter 2011
Financial Summary – Third Quarter 2011 Metrics 3Q11 2Q11 3Q10 Income from continuing operations attributable to Key $.24 $.26 $.19 Financial common shareholders Performance (a) Net interest margin (TE) 3.09% 3.19% 3.35% Return on average total assets 1.14 1.23 .93 Tier 1 common equity (c) 11.34% 11.
Slide 7: Stabilizing Loan Portfolio
Stabilizing Loan Portfolio Highlights Average Commercial, Financial & Agricultural Loans Loan portfolio at inflection point as period-end $ in billions loans grew during the third quarter $20 60% $16.9 $16.6 $16.9 $17.4 $16.3 Period-end Commercial, Financial and Agricultural $15 loans increased by 5
Slide 8: Improving Deposit Mix
Improving Deposit Mix Highlights Average Non-time Deposits (a) Higher cost CDs continue to decline, while lower $ in billions cost deposits have remained strong $50 $45.8 $45.4 $45.3 $46.5 .30% Improved funding mix has reduced the cost of $43.6 deposits $40 .20% .21% .18% .18% .17% Total CD maturiti
Slide 9: Continued Improvement in Asset Quality
Continued Improvement in Asset Quality Net Charge-offs & Provision for Loan Losses Nonperforming Assets $ in millions $ in millions $400 $357 4.0% $2,000 4.00% $1,801 $300 $256 3.0% $1,500 $1,338 3.00% 2.69% $193 $200 2.00% 2.0% 2.67% $1,089 $134 $109 $950 $914 $94 1.59% $1,000 2.00% $100 1.0% 2.13%
Slide 10: Total Revenue
Total Revenue Highlights Net Interest Margin (TE) Trend $ in millions Net interest income and NIM impacted by: Continuing Operations – Low interest rate environment $750 $647 $635 6.00% $604 $570 – Higher levels of short-term investments $600 $555 4.00% – Excess liquidity $450 3.35% 3.31% 3.25% 3.19
Slide 11: Focused Expense Management
Focused Expense Management Highlights Noninterest Expense $ in millions Noninterest expense increased by $12 million $800 $736 $744 compared to 2Q11 $701 $680 $692 – Decreased credit for losses on lending- $600 $377 $379 $330 $300 $310 related commitments $400 – Increased marketing expense $200 $359
Slide 12: Pre-Provision Net Revenue and ROAA
Pre-Provision Net Revenue (a) and ROAA (b) 3Q11 Pre-Provision Net Revenue Pre-Provision Net Revenue Trend $ in millions $ in millions $1,038 $500 Noninterest $397 $417 income $692 $400 $360 $344 $346 47% Personnel expense $300 55% $346 Net interest $200 income Non-personnel 53% expense $100 45% $0 T
Slide 13: Strong Capital Ratios
Strong Capital Ratios Highlights Tangible Common Equity to Tangible Assets 9.67% 9.82% Peer leading capital position supports growth 10.00% 9.16% 8.00% 8.19% 8.00% Positioned for successful transition to Basel III 6.00% Continued capital generation through execution of strategy 4.00% 2.00% Disciplin
Slide 14: Appendix
Appendix 14
Slide 15: High Quality Investment Portfolio
High Quality Investment Portfolio Highlights Average Total Investment Securities $ in billions Portfolio composed of Agency or GSE backed: $25 5.00% GNMA, Fannie & Freddie $21.3 $21.2 $20.3 $19.0 $20 $18.5 4.00% – No private label MBS or financial paper $15 3.19% 3.33% 3.00% 3.21% 3.22% 3.19% Averag
Slide 16: Credit Quality
Credit Quality Credit Quality by Portfolio $ in millions Net loan Allowance / Period-end Average Net loan (a) Nonperforming Ending Allowance / charge-offs / (b) period-end loans loans charge-offs loans allowance (b) NPLs average loans loans 9/30/11 3Q11 3Q11 2Q11 3Q11 2Q11 9/30/11 6/30/11 9/30/11 9/
Slide 17: Commercial Real Estate Loans – 9/30/11
Commercial Real Estate Loans – 9/30/11 Commercial Real Estate by Property Type and Geography $ in millions Geographic Region % of Commercial West Southwest Central Midwest Southeast Northeast Total Total CRE Mortgage Construction Nonowner-occupied : Retail properties $338 $138 $220 $233 $386 $200 $1
Slide 18: Commercial Real Estate
Commercial Real Estate Commercial Real Estate Credit Quality $ in millions Period-end Nonperforming Net loan loans loans charge-offs 9-30-11 6-30-11 9-30-11 6-30-11 9-30-11 6-30-11 Retail properties $1,515 $1,578 $63 $66 - $6 Multifamily properties 1,405 1,321 44 47 10 (1) Health facilities 855 967
Slide 19: Home Equity Loans – 9/30/11
Home Equity Loans – 9/30/11 Community Bank – Home Equity Vintage (% of Loans) $ in millions, except average loan size Loan Average Loan Average Average % of Loans 2010 and 2006 and Balances Size ($) FICO LTV (a) LTV>90% 2011 2009 2008 2007 prior Home equity loans and lines First lien $ 4,927 $ 58,18
Slide 20: Exit Loan Portfolio
Exit Loan Portfolio Exit Loan Portfolio $ in millions Balance on Balance Change Net Loan Nonperforming Outstanding 9-30-11 vs. Charge-offs Status 9-30-11 6-30-11 6-30-11 3Q11 2Q11 9-30-11 6-30-11 Residentialproperties – homebuilder $48 $62 $(14) $4 $1 $28 $33 Marine and RV floor plan 92 122 (30) 3 1
Slide 21: Credit Quality Trends
Credit Quality Trends Delinquencies to Period-end Total Loans Quarterly Change in Criticized Outstandings (a) 2.50% 50% 41.5% 2.00% 1.87% 40% 35.1% 1.69% 1.72% 1.61% 1.59% 30% 1.50% 1.17% 1.29% 1.14%1.14% 20% 17.1% .95% .98% .97% .99% 1.00% .82% .78% 10% 2.8% .57% .62% .60% .56% .42% .45% .48% 0% 0.