Slide 1: Strategic Minority Equity Investment from Scotiabank
KeyCorp Strategic Minority Equity Investment from Scotiabank August 12, 2024 Chris Gorman Chairman and Chief Executive Officer Clark Khayat Chief Financial Officer
Slide 2: Forward-looking Statements
Forward-looking Statements 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 conditions. Forward-looking
Slide 3: Strategic Investment Highlights
Strategic Investment Highlights Opportunistic raise accelerates capital and earnings improvement while strengthening Key’s strategic position ✓ ~$2.8Bn strategic minority investment from a significant global financial institution at an attractive market premium ✓ Fortifies capital position: ~195–200
Slide 4: Transaction Summary
Transaction Summary Investment structured on attractive terms with standard governance protections Size ~$2.8Bn, representing ~14.9% pro forma ownership Standstill Customary standstill agreement for five years Pricing Fixed price of $17.17 Scotiabank to purchase 163MM shares of common stock: Structu
Slide 5: Contemplated Securities Repositioning
Contemplated Securities Repositioning Contemplated repositioning accelerates timing of expected profitability, liquidity and capital improvements¹ AFS Securities Investment Portfolio ▪ Upon closing, Key intends to evaluate repositioning the securities AFS Securities by yield (fair value) AFS Securit
Slide 6: Financial Impacts
Financial Impacts Capital raise and contemplated repositioning bolsters balance sheet strength and earnings generation¹ Illustrative Pro forma for capital raise and Standalone Pro forma for capital raise2 contemplated repositioning¹ CET1 10.5% 12.4% 11.3–11.6%5 AOCI-adjusted CET13 7.3%4 9.3% 9.1–9.4
Slide 7: Capital Benchmarking
Capital Benchmarking Strengthened financial profile provides a competitive advantage to Key CET1 AOCI-adjusted CET1² 2Q24 2Q24 Pro forma ~70–95bps³ above peer median CET1 Pro forma ~90–120bps³ above peer median AOCI-adj. CET1² Capital raise 12.4% Peer 3 11.3% Pro forma¹ 11.3% 11.6% ³ Peer 1 9.6% Pee
Slide 8: Capital Enables Investments in Organic Focus Areas
Capital Enables Investments in Organic Focus Areas Differentiated fee businesses Proven track record with organic and inorganic targeted investments 2011 – 2024E⁴ Key Private Client Trust & Investment Services Income⁵, Investment Banking & Debt Placement, and Cards & Payments Fees KBCM +8-9% ~8% CAG
Slide 9: Proven Model
Proven Model C&I loan growth Momentum in fee businesses C&I Loan Growth 2010-20231,2 IB&DP: Fees as a % of Commercial Loans³ Wealth: AUM as a % of Total Assets⁴ 2019-2023 Key 0.93% 29% H8 21% 201% 0.51% Key Peer Median KEY Peer Median 131% Payments: Commercial Operating Deposits Payments: Revenue Gr
Slide 10: Key Takeaways
Key Takeaways Strategic investment enables Key to seize future growth opportunities while fortifying the balance sheet Strategic Fortifies capital Improves Flexibility to Explore mutually Navigate an investment at financial profile pursue beneficial uncertain a premium opportunities in commercial en
Slide 11: Appendix
Appendix
Slide 12: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation CET1 – AOCI Impact1 ($ in millions) 2Q23 3Q23 4Q23 1Q24 2Q24 Common Equity Tier 1 (A) $ 14,887 $ 15,007 $ 14,894 $ 14,821 $ 14,893 Add: AFS and Pension Accumulated Other Comprehensive Income (Loss) (4,961) (5,581) (4,573) (4,608) (4,530) Adjusted Common Equity Tier 1