Slide 1: KeyCorp First Quarter 2022 Earnings Review
KeyCorp First Quarter 2022 Earnings Review April 21, 2022 Chris Gorman Don Kimble Chairman and Vice Chairman and Chief Executive Officer Chief Financial Officer
Slide 2: Forward-looking Statements and Additional Information
Forward-looking Statements and Additional Information This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, but not limited to, KeyCorp’s expectations or predictions of future financial or business performance or
Slide 3: 1Q22 Results
1Q22 Results Financial Results 2022 Outlook & Updates ▪ EPS of $.45 per diluted common share ▪ Expect to deliver positive operating − Includes $.04 related to reserve build ($50MM) leverage in FY22 ▪ Strong loan growth: momentum across consumer and commercial ▪ Revised outlook reflects stronger loan
Slide 4: Financial Review
Financial Review
Slide 5: Financial Highlights
Financial Highlights 1Q22 4Q21 1Q21 LQ Δ Y/Y Δ Continuing operations, unless otherwise noted EPS – assuming dilution $ .45 $ .64 $ .61 (30) % (26) % Cash efficiency ratio(1) 62.4 % 59.4 % 60.3 % 300 bps 210 bps Return on average tangible common equity(1) 14.1 18.7 18.2 (460) (410) Profitability Retu
Slide 6: Loans
Loans Total Average Loans Highlights $ in billions PPP $110 $104 $101 ▪ $1.2Bn of average PPP loans in 1Q22 $1.2 $100 40.00% $7 Total average loans ▪ $.7Bn of PPP forgiveness in 1Q22 $90 31% PPP $80 28% 30.00% vs. Prior Year C&I line utilization $70 ▪ Average loans up 3% from 1Q21; up 15%(1) excl. P
Slide 7: Deposits
Deposits Average Deposits Highlights $ in billions ▪ Strong and stable deposit base $150 $150 $138 − 34% noninterest-bearing(1) Commercial $120 Consumer − ~60% stable retail and low-cost escrow $90 x Cost of total interest- − 73% loan to deposit ratio(2) bearing deposits .09% .06 $60 Cost of total d
Slide 8: Net Interest Income and Margin
Net Interest Income and Margin Net Interest Income & Net Interest Margin Trend (TE) Highlights $ in millions, continuing operations vs. Prior Year $1,100 4.0% $1,012 $1,020 ▪ Net interest income up $8MM (+1%) from 1Q21 $1,000 3.5% − Reflects higher earning asset balances and favorable $900 balance s
Slide 9: Noninterest Income
Noninterest Income Noninterest Income Highlights vs. Prior Year $ in millions up / (down) 1Q22 vs. 1Q21 vs. 4Q21 Trust and investment services income $ 136 $ 3 $ 1 ▪ Noninterest income down $62MM (-8%) from 1Q21 Investment banking and debt placement fees 163 1 (160) − Lower other income (-$55MM) ref
Slide 10: Noninterest Expense
Noninterest Expense Noninterest Expense Highlights vs. Prior Year $ in millions favorable / (unfavorable) 1Q22 vs. 1Q21 vs. 4Q21 Personnel $ 630 $ (6) $ 44 ▪ Noninterest expense relatively stable (-$1MM) from 1Q21 Net occupancy 73 3 2 − Higher personnel expense (+$6MM) from merit increases Computer
Slide 11: Credit Quality
Credit Quality Net Charge-offs & Provision for Credit Losses $ in millions $200 .46% .60% $114 .13% $100 $33 $83 .00% $0 ($100) ($93) (.60)% ($200) ($300) (1.20)% 1Q21 2Q21 3Q21 4Q21 1Q22 NCOs Provision for credit losses NCOs to avg. loans Nonperforming Loans Allowance for Credit Losses (ACL) $ in m
Slide 12: Capital
Capital Common Equity Tier 1(1) Highlights 11.0% ▪ Strong capital position: CET1 ratio 9.4%(1) at 3/31/2022 9.9% 10.0% 9.4% − Within targeted range of 9.0-9.5% 9.0% ▪ Declared quarterly common share dividend of $.195 8.0% 7.0% 6.0% 1Q21 2Q21 3Q21 4Q21 1Q22 Tangible Common Equity to Tangible Assets(2
Slide 13: Full Year 2022 Outlook
Full Year 2022 Outlook Full Year 2022 (vs. Full Year 2021) Prior Guidance (as of 3/1/22) Updated Guidance (as of 4/21/22) → Changes reflected in blue • Loans: up low-double digit excluding the impact of PPP and the indirect • Loans: up mid-teens excluding the impact of PPP and the indirect auto auto
Slide 14: Appendix
Appendix
Slide 15: Commercial Loan Portfolio Detail
Commercial Loan Portfolio Detail Total Commercial Loans Commercial & Industrial (C&I) $ in billions 3/31/22 % of total loans ▪ Solid middle market portfolio Commercial and industrial $ 52.8 49 ▪ Aligning bankers to areas of market opportunity and growth - investing in strategic hires with industry v
Slide 16: Consumer Loan Portfolio Detail
Consumer Loan Portfolio Detail Total Consumer Loans Laurel Road $ in millions Origination Volume $ in billions 3/31/22 % of total loans WA FICO at origination Consumer mortgage $ 17.2 16 762 $820 $646 Home equity 8.3 8 808 $475 $504 $399 Consumer direct 6.2 6 780 Credit card 0.9 1 792 1Q21 2Q21 3Q21
Slide 17: Investment Portfolio
Investment Portfolio Average Total Investment Securities Highlights $ in billions ▪ Portfolio used for funding and liquidity management $60.0 3.00% ‒ Portfolio composed primarily of fixed-rate GNMA and GSE-backed MBS $52.1 and CMOs $37.2 2.50% ‒ Portfolio yield excluding short-term Treasury/Agency:
Slide 18: Asset & Liability Management Positioning
Asset & Liability Management Positioning Balanced approach to managing interest rate risk, reducing declining rate exposure while maintaining upside to higher rates 1Q22 Balance Sheet Highlights(1) Actively Managing Interest Rate Risk Position Loan Composition Deposit Mix ▪ Given macroeconomic and g
Slide 19: Credit Quality Trends
Credit Quality Trends Delinquencies to Period-end Total Loans Criticized Outstandings(1) to Period-end Total Loans Continuing Operations Continuing Operations .80% 6.0% .60% 4.2% 4.0% .40% 2.5% .19% 2.0% .20% .11% .09% .05% .00% .0% 1Q21 2Q21 3Q21 4Q21 1Q22 1Q21 2Q21 3Q21 4Q21 1Q22 30 – 89 days deli
Slide 20: Credit Quality
Credit Quality Credit Quality by Portfolio Net loan charge- Allowance / Allowance / Period-end Average Net loan Nonperforming Ending offs(3) / average period-end NPLs $ in millions loans loans charge-offs loans allowance loans (%) loans (%) (%) 3/31/22 1Q22 1Q22 1Q22 3/31/22 3/31/22 3/31/22 3/31/22
Slide 21: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $ in millions Three m onths ended 3/31/2022 12/31/2021 3/31/2021 Tangible com m on equity to tangible assets at period end Key shareholders' equity (GAAP) $ 15,308 $ 17,423 $ 17,634 Less: Intangible assets (1) 2,810 2,820 2,842 Preferred Stock (2) 1,856 1,856 1,856 Ta
Slide 22: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $ in millions Three m onths ended 3/31/2022 12/31/2021 3/31/2021 Return on average tangible com m on equity from continuing operations Net income (loss) from continuing operations attributable to Key common shareholders (GAAP) $ 420 $ 601 $ 591 Average tangible common