Slide 1: KeyCorp Second Quarter 2012 Earnings Review
Exhibit 99.2 KeyCorp Second Quarter 2012 Earnings Review July 19, 2012 Beth E. Mooney Jeffrey B. Weeden 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 – Second Quarter 2012
Investor Highlights – Second Quarter 2012 Execution of Second quarter net income up 11% from 1Q12 Business Company-wide initiatives to improve efficiency Plan Continued improvement in credit quality Growing client relationships and engagement Growing the Acquired 37 branches in Upstate New York Fran
Slide 4: Driving Growth through Efficiency
Driving Growth through Efficiency Company-wide Initiatives Expected Benefit End-to-end process $150 - $200 MM optimization Community Bank Organizational design – span and layers December 2013 Strategic sourcing Branch rationalization Efficiency Ratio(a) Corporate Bank 69% $150 - $200 MM Improve vari
Slide 5: Branch Acquisition Strengthens Market Share
Branch Acquisition Strengthens Market Share Benefits of Acquisition Gaining Meaningful Share Strengthens Key’s local presence in attractive Buffalo Rochester markets of Buffalo and Rochester, New York Enhances ability to acquire customers and provide exceptional service Adds ATM check imaging capabi
Slide 6: Delivering Shareholder Value
Delivering Shareholder Value Executing Relationship Strategy Moderate Risk Profile High Quality, Diverse Revenue Streams Positive Operating Leverage Disciplined Capital Management ROA Target: 1.00% - 1.25% 6
Slide 7: Financial Review
Financial Review 7
Slide 8: Financial Summary – Second Quarter 2012
Financial Summary – Second Quarter 2012 Metrics 2Q12 1Q12 2Q11 Income from continuing operations attributable to Key $.23 $.21 $.26 Financial common shareholders Performance (a) Net interest margin (TE) 3.06% 3.16% 3.19% Return on average total assets 1.12 1.02 1.23 Tier 1 common equity (c), (d) 11.
Slide 9: Loan Growth
Loan Growth Highlights Average Commercial & Industrial Loans Average balances grew for the third consecutive $ in billions quarter, driven by growth in C&I loans $25 60% $19.6 $20.1 Strong spring home equity campaign drove $20 $16.9 $17.4 $18.3 47.3% period-end Community Bank home equity loans $15 4
Slide 10: 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 Improved funding mix has reduced the cost of $55 $50.8 .30% $48.2 $48.8 deposits, which is down 6 bps from 1Q12 $45.3 $46.5 $45 .20% Total
Slide 11: Continued Improvement in Asset Quality
Continued Improvement in Asset Quality Net Charge-offs & Provision for Loan and Lease Losses Nonperforming Assets $ in millions $ in millions $300 3.00% $1,600 3.00% $200 2.00% $1,200 $134 $950 $914 2.00% $109 $105 $859 $101 $767 $751 $100 $77 1.00% $800 1.11% .90% .82% 1.76% 1.64% .86% $42 .63% $21
Slide 12: Total Revenue
Total Revenue Highlights Net Interest Margin (TE) Trend $ in millions Net interest margin down due to early Continuing Operations termination of leveraged leases and continued $750 6.00% low rate environment $570 $555 $563 $600 $559 $544 4.00% Higher noninterest income driven by leveraged $450 lease
Slide 13: Focused Expense Management
Focused Expense Management Highlights Noninterest Expense $ in millions Noninterest expense increased $11 million from $800 $714 $680 $692 $717 $703 1Q12 – Elevated expenses related to acquisition of $600 $330 $325 $300 $310 $318 branches in Upstate New York $400 – Costs related to company-wide effi
Slide 14: Strong Capital Ratios
Strong Capital Ratios Highlights Tangible Common Equity to Tangible Assets (b) Strong capital position supports growth 12.00% 9.9% 10.3% 10.4% 9.7% 9.8% Disciplined capital management process 9.00% – Executing share repurchases 6.00% – Increased dividend for 2Q12 from $.03 to $.05 per common share 3
Slide 15: Appendix
Appendix 15
Slide 16: Progress on Targets for Success
Progress on Targets for Success KEY Business KEY KEY KEY Metrics (a) Targets Action Plans Model 2Q12 1Q12 Leverage integrated model to grow Core funded Loan to deposit ratio (b) 86% 87% 90-100% relationships and loans Improve deposit mix Focus on relationship clients Returning to a Exit noncore port
Slide 17: Community Bank: Engaging Relationships
Community Bank: Engaging Relationships Focusing on targeted clients, alignment, capabilities and channels • Results in deeper, more profitable engaged clients Performance Metrics • Four consecutive quarters of average loan growth • Strong spring borrowing campaign drove home equity balances 5% highe
Slide 18: Corporate Bank: Deepening Relationships
Corporate Bank: Deepening Relationships Leveraging product breadth, industry focus, distinctive knowledge and capabilities • Results in client acquisition and broadened relationships Performance Metrics 300 284 224 • $37MM in YTD revenue from new 240 client relationships 167 180 118 • New corporate
Slide 19: 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 $19.0 $20 $18.5 $18.4 $17.5 4.00% $17.4 – No private label MBS or financial paper $15 3.00% 3.20% 3.15% 3.07% 3.01% 2.89% Averag
Slide 20: 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 NPLs average loans loans (b) 6/30/12 2Q12 2Q12 1Q12 2Q12 1Q12 6/30/12 3/31/12 6/30/12 6/
Slide 21: Home Equity Loans – 6/30/12
Home Equity Loans – 6/30/12 Community Bank – Home Equity Vintage (% of Loans) $ in millions, except average loan size Average Loan Average Average % of Loans 2011 and 2007 and Loan Balances Size ($) FICO LTV (a) LTV>90% later 2010 2009 2008 prior Home equity loans and lines First lien $ 5,220 $ 62,2
Slide 22: Exit Loan Portfolio
Exit Loan Portfolio Exit Loan Portfolio Balance on $ in millions Balance Change Net Loan Nonperforming Outstanding 6-30-12 vs. Charge-offs Status 6-30-12 3-31-12 3-31-12 2Q12 1Q12(c) 6-30-12 3-31-12 Residential properties –homebuilder $33 $34 $(1) - $2 $14 $17 Marine and RV floor plan 39 59 (20) $2
Slide 23: Credit Quality Trends
Credit Quality Trends Delinquencies to Period-end Total Loans Quarterly Change in Criticized Outstandings (a) 5% 2.8% 0% (1.0)% (2.0)% -5% (6.8)% (8.1)% -10% (10.2)% (11.2)% (12.8)% (12.3)% -15% (13.6)% (14.3)% (14.4)% (16.7)% -20% 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 30
Slide 24: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $ in millions (a) Includes net unrealized gains or losses on securities available for sale (except for net unrealized losses on marketable equity securities), net gains or losses on cash flow hedges, and amounts resulting from the December 31, 2006, adoption and subse
Slide 25: 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) (1) Quarter ended June 30, ($ in billions) 2012 (2) Tier 1 Common Equity under Basel I $9.0 Adjustments from Basel I to Basel III: Cumulative Other Comprehensive Income(3) (0.1) D