Slide 1: Second Quarter 2013 Earnings Review
Exhibit 99.2 KeyCorp Second Quarter 2013 Earnings Review July 18, 2013 Beth E. Mooney Don Kimble Chairman and Chief Financial Officer Chief Executive Officer
Slide 2: Forward-Looking Statements and Additional Information Disclosure
FORWARD-LOOKING STATEMENTS AND ADDITIONAL INFORMATION DISCLOSURE This presentation contains and we may, from time to time, make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about Key’s financial condition, results of oper
Slide 3: Investor Highlights – 2Q13
Investor Highlights – 2Q13 Net interest income up 8% compared to the prior year Optimize and Grew average CF&A loans by 14% from the prior year Grow Acquisition of commercial mortgage servicing business Revenue Expanded mobile capabilities for commercial and consumer clients Achieved approximately $
Slide 4: Financial Review
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Slide 5: Financial Highlights
Financial Highlights Metrics 2Q13 1Q13 4Q12 3Q12 2Q12 EPS – assuming dilution $ .21 $ .21 $ .20 $ .22 $ .23 Cash efficiency ratio (e) 69 % 66 % 69 % 64 % 69 % Financial Adj. cash efficiency ratio (ex. initiative charges) (e) 65 65 67 62 69 Performance (a) Net interest margin (TE) 3.13 3.24 3.37 3.23
Slide 6: Loan Growth
Loan Growth Highlights Average Commercial, Financial & Agricultural Loans Average loan growth from prior year driven by CF&A, while the exit portfolio continues to run-off Excluding the exit portfolio, average loans up 9% from prior year Average loans stable linked quarter, reflecting cautious clien
Slide 7: Improving Deposit Mix
Improving Deposit Mix Highlights Funding Cost Overall funding cost continues to improve, with total deposit cost declining to 26 bps Transaction deposit balances up 13% from 2Q12 Total CD maturities and average cost – 2013 Q3: $2.0 billion at .94% – 2013 Q4: $1.0 billion at 1.11% – 2014: $2.8 billio
Slide 8: Net Interest Income and Margin
Net Interest Income and Margin Highlights Net Interest Income & Net Interest Margin (TE) Trend Net interest income increased 8% from prior year $ in millions Continuing Operations Net interest margin compared to prior quarter impacted by lower asset yields, earning asset mix, higher liquidity, and r
Slide 9: Noninterest Income
Noninterest Income Highlights Noninterest Income Continuing Operations Strength in core fee income categories helped to $ in millions offset prior year gains: – Investment banking & debt placement fees (+$11MM); cards and payments income (+$11MM); trust and investment services (+$10MM) – 2Q12 levera
Slide 10: Focused Expense Management
Focused Expense Management Highlights Noninterest Expense $ in millions Significant progress made on efficiency initiative – Achieved approximately $171 million in annualized expense savings through 2Q13 2Q13 expense included $37 million related to efficiency initiative, of which $18 million was sev
Slide 11: Continued Improvement in Asset Quality
Continued Improvement in Asset Quality Highlights Net Charge-offs & Provision for Loan and Lease Losses $ in millions Net loan charge-offs decreased 42% from 2Q12 to $45 million, or 34 bps of average loans 2Q13 commercial loan net charge-offs were $5 million or 5 bps of average loans Asset quality r
Slide 12: Strong Capital Ratios
Strong Capital Ratios Highlights Tangible Common Equity to Tangible Assets (b) Disciplined execution of capital plan – Increased dividend 10% – Repurchased $112 million in common shares during 2Q13 Well-positioned for transition to Basel III Estimated Basel III Tier 1 common equity ratio of 10.8%(a)
Slide 13: Appendix
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Slide 14: Progress on Targets for Success
Progress on Targets for Success KEY Business KEY KEY KEY Metrics (a) Targets Action Plans Model 2Q13 1Q13 Use integrated model to grow relationships Core funded Loan to deposit ratio (b) 84% 87% 90-100% and loans Improve deposit mix NCOs to average loans .34% .38% Focus on relationship clients Retur
Slide 15: High Quality Investment Portfolio
High Quality Investment Portfolio Highlights Average Total Investment Securities $ in billions Portfolio composed of Agency or GSE backed CMOs: Fannie, Freddie & CNMA – No private label MBS or financial paper Average portfolio life at 6/30/13 of 3.2 years compared to 2.8 years at 3/31/13 Unrealized
Slide 16: Asset Quality Trends
Asset Quality Trends Delinquencies to Period-end Total Loans Quarterly Change in Criticized Outstandings (a) Continuing Operations Continuing Operations 30 – 89 days delinquent 90+ days delinquent (a) Loan and lease outstandings 16 (b) From continuing operations
Slide 17: Credit Quality
Credit Quality Credit Quality by Portfolio Net loan Period- Allowance / Allowance / Average Net loan charge-offs (b) / Nonperforming Ending end period-end NPLs loans charge-offs average loans loans (c) allowance (d) loans loans (d) (%) (%) $ in millions (%) 6/30/13 2Q13 2Q13 1Q13 2Q13 1Q13 6/30/13 3
Slide 18: Home Equity Loans – 6/30/13
Home Equity Loans – 6/30/13 Community Bank – Home Equity Exit Portfolio – Home Equity (a) Average LTVs are at origination. Current average LTVs for Community Bank total home equity loans and lines is approximately 75%, 18 which compares to 78% at the end of the first quarter 2013.
Slide 19: Exit Loan Portfolio
Exit Loan Portfolio Exit Loan Portfolio Balance on Balance Outstanding Change Net Loan Charge-offs $ in millions Nonperforming Status 6-30-13 vs. 6-30-13 3-31-13 2Q13 1Q13 (c) 6-30-13 3-31-13 3-31-13 Residentialproperties – homebuilder $ 26 $ 29 $ (3) $ 1 - $ 8 $ 10 Marine and RV floor plan 28 29 (1
Slide 20: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $ in millions (a) Three months ended June 30, 2013 and March 31, 2013 exclude $107 million and $114 million, respectively, of period end purchased credit card receivable intangible assets (b) Net of capital surplus for the three months ended June 30, 2013 (c) Includes
Slide 21: GAAP to Non-GAAP Reconciliation (continued)
GAAP to Non-GAAP Reconciliation (continued) Three months ended $ in millions 6-30-13 3-31-13 6-30-12 Average tangible common equity Average Key shareholders' equity (GAAP) $ 10,314 $ 10,279 $ 10,100 Less: Intangible assets (average) (a) 1,023 1,027 931 Preferred Stock, Series A (average) 291 291 291
Slide 22: Tier 1 Common Equity under Basel III (estimated)
Tier 1 Common Equity under Basel III (estimated) KeyCorp & Subsidiaries Tier 1 Common Equity Under Basel III (Estimates) (a) Quarter ended $ in billions June 30, 2013 Tier 1 Common Equity under current regulatory rules $ 9.2 Adjustments from current regulatory rules to Basel III: Deferred tax assets