Slide 1: Fourth Quarter 2010 Review
Fourth Quarter 2010 Review January 25, 2011 Speakers: Henry Meyer Jeff Weeden Exhibit 99.2
Slide 2: 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, earnings outlook, asset quality trends and profitability. Forward-looking statements are not
Slide 3: 4Q10 Strategic Update
Improved profitability in fourth quarter and full year 2010 Stronger pre-provision net revenue Credit quality continues to improve Capital and reserves remain strong Announced CEO succession plan and management changes in major businesses 4Q10 Strategic Update
Slide 4: Financial Summary - Fourth Quarter 2010
Financial Summary - Fourth Quarter 2010 Capital (b) Asset Quality (a) Financial Performance (a) Metrics Income (loss) from continuing operations attributable to Key common shareholders Net interest margin (TE) Return on average total assets Tier 1 common equity (c) Tier 1 risk-based capital (c) Tang
Slide 5: Core funded loan to deposit ratio and action plans
KEY Business Model KEY Metrics KEY 4Q10 Targets Action Plans Core funded Loan to deposit ratio (b) (c) 90% 90-100% Improve risk profile of loan portfolio Improve deposit mix and grow deposit base Returning to a moderate risk profile NCOs to average loans 2.00% 40-50 bps Focus on relationship clients
Slide 6: Average Loans and Deposits
2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 Loans / Deposits 1.01 0.95 0.91 0.88 0.88 0.862 0.8473 Discontinued 0.06 0.06 0.07 0.05 0.05 0.056 0.056 Total Loans 1.07 1.01 0.98 0.93 0.93 0.918 0.903 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 Commercial & Industrial 23.7 21.502 19.347 18.421 17.418 16.705 16.354 CRE -
Slide 7: Nonperforming Loans, Net Charge-offs and Provision
Nonperforming Loans Net Charge-offs & Provision for Loan Losses $ in millions 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 Nonperforming Loans 2185 2290 2187 2065 1703 1372 1068 NPLs to Period-End Loans 0.0325 0.0368 0.0372 0.0369 0.0319 0.0267 0.0213 Nonperforming loans NPLs to period-end loans $ in millions
Slide 8: Net Interest Margin
KEY Business Model KEY Metrics KEY 4Q10 Targets Action Plans Growing high quality, diverse revenue streams Net interest margin 3.31% >3.50% Improve funding mix Focus on risk-adjusted returns Net Interest Margin (TE) TE = Taxable equivalent 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08
Slide 9: Noninterest Income and % of Total Revenue
KEY Business Model KEY Metrics KEY 4Q10 Targets Action Plans Growing high quality, diverse revenue streams Noninterest income to total revenue 45% >40% Leverage Key's total client solutions and cross-selling capabilities Noninterest Income Areas of Focus Targeting specific high-opportunity client se
Slide 10: Noninterest Expense and Keyvolution Cost Savings
KEY Business Model KEY Metrics KEY 4Q10 Targets Action Plans Creating positive operating leverage Keyvolution cost savings $228 million implemented $300-$375 million Improve efficiency and effectiveness Leverage technology Change cost base to more variable from fixed Noninterest Expense Noninterest
Slide 11: Pre-Provision Net Revenue and ROAA
3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 ROA -0.0162 -0.0094 -0.0026 0.0044 0.0093 0.0153 Pre-Provision Net Revenue (b) $ in millions Return on Average Assets 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 PPNR 142 235 297 346 397 417 Pre-Provision Net Revenue and ROAA (a) KEY Business Model KEY Metrics KEY 4Q10 Targets Action
Slide 12: Tangible Common Equity and Capital
4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 Tangible Common Equity 0.0658 0.0685 0.0632 0.0629 0.0595 0.0606 0.0735 0.0758 0.0756 0.0737 0.0765 0.08 0.0819 Capital Raise Total Tangible Common Equity - Peer Median 0.0559 0.0568 0.0575 0.0574 0.0487 0.0518 0.0632 0.0619 0.0608 0.0
Slide 13: Appendix
Appendix
Slide 14: Pre-Provision Net Revenue Trend
Pre-Provision Net Revenue Trend TE = taxable equivalent (a) Net interest income plus taxable-equivalent adjustment and noninterest income less noninterest expense. $ in millions Continuing Operations Pre-provision net revenue (a) Net interest income (TE) Noninterest income Noninterest expense 4Q09 1
Slide 15: 4Q10 Loan Activity
9/30 loans Exit port. runoff / paydown Loans charged off Net decrease 12/31 loans 1 51.354 50.963 50.572 50.1 50.107 2 0.391 0 0 3 0.343 0.432 CF&A and Leasing Total Loans Total Consumer Total Commercial Real Estate 4Q10 Loan Activity $51.4 $50.1 $(.3) $ in billions $(.4) $(.6) 9/30 loans Exit port.
Slide 16: Investment Portfolio Highlights
Investment Portfolio Highlights 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 Avg. Securities Available for Sale 8.36 12.154 15.937 16.312 17.285 20.276 21.257 Average Yield 0.0437 0.04 0.0382 0.0373 0.0363 0.0343 0.0327 Average AFS securities Growth in Available for Sale Securities Average yield $ in billions
Slide 17: Credit Quality by Portfolio
N/M = Not Meaningful (a) Net charge-off amounts are annualized in calculation. (b) 12-31-10 allowance by portfolio is estimated. $ in millions Credit Quality by Portfolio
Slide 18: Commercial Portfolio - Continuing Ops.
Fourth Quarter 2010 Third Quarter 2010 Commercial Portfolio - Continuing Ops. Average Loans, NCOs and NPLs $ in millions
Slide 19: Commercial Real Estate Loans
$ in millions (a) Nonresidential land and development loans. N/M = Not Meaningful Commercial Real Estate Loans December 31, 2010 (a)
Slide 20: Commercial Real Estate
$ in millions (a) Nonresidential land and development loans. (a) Commercial Real Estate (a)
Slide 21: Home Equity Loans
$ in millions, except average loan size (a) Average LTVs are at origination. Current average LTVs for Key Community Bank total home equity loans and lines is approximately 76%, which compares to 75% at the end of the third quarter of 2010. Home Equity Loans December 31, 2010 (a)
Slide 22: Exit Loan Portfolio
(a) Includes the business aviation, commercial vehicle, office products, construction and industrial leases, Canadian lease financing portfolios and all remaining balances related to lease in, lease out; sale in, sale out; service contract leases; and qualified technological equipment leases. (b) In
Slide 23: Credit Quality Trends
Credit Quality Trends Quarterly change in criticized assets (a) Delinquencies to period-end total loans 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 30 - 89 Day % 0.014927407 0.010743022 0.011673193 0.016884342 0.018746125 0.016097161 0.017222806 0.015882968 0.011420314 0.011435595 0.
Slide 24: Net Charge-offs to Average Loans
Continuing Operations Net Charge-offs to Average Loans
Slide 25: Nonperforming Loans to Period-end Loans
Continuing Operations Nonperforming Loans to Period-end Loans