Slide 1: Read My Lips: No New Acquisitions
To The Independent Directors of KeyCorp: Read My Lips: No New Acquisitions December 5, 2025 The Independent Directors Jacqueline L. Allard Richard J. Hipple Alexander M. Cutler Somesh Khanna H. James Dallas Devina A. Rankin Elizabeth R. Gile Barbara R. Snyder Ruth Ann M. Gillis Richard J. Tobin Robi
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) is for discussion and general information purposes only, and reflects the current views of HoldCo Asset Management, LP (“HoldCo”). HoldCo may change any of its opinions expressed herein at any time and is under no obligation to update or supplement a
Slide 3: Table of Contents
Table of Contents I. H O W W E A R R I V E D AT T H I S M O M E N T 3 II. C H A I R M A N G O R M A N ’ S T E N U R E : D E C I S I O N S T H AT P U T T H E F R A N C H I S E AT R I S K 30 III. NEXT STEPS 51 APPENDIX 56 2
Slide 4: I. How We Arrived at This Moment
I. How We Arrived at This Moment 3
Slide 5: Read My Lips: No New Taxes — Shareholders Are Tired of The Dilution Tax
Read My Lips: No New Taxes(a) — Shareholders Are Tired of The Dilution Tax. When It Comes To Bank Acquisitions, Your Conflicted Chairman(b) Is — Most of The Time — Saying What His Constituents Want to Hear. And What They Want to Hear Is: “I Won’t Do Them.” 2/11/2025 5/28/2025 11/5/2025 “It's not an
Slide 6: But How Can He Be Trusted When He Gives Statements Like These To The Press?
But How Can He Be Trusted When He Gives Statements Like These To The Press? “America’s regional banks are staking their claims to states primed for growth, focusing on “Bloomberg’s report on Wednesday that KeyCorp is turning Florida, Texas and other parts of the US South with expanding populations a
Slide 7: Market Fears That KEY Was Bidding in The FirstBank Holding Co. Auction
Or In Light of Market Fears That KEY Was Bidding — Alongside PNC — In The FirstBank Holding Co. Auction, a Process Clearly Run To Maximize Price, Unlike Some of The Friendlier “Sale Processes” We’ve Seen Lately? KEY Potential Involvement “Between late June and early July 2025, representatives of Gol
Slide 8: Reluctance To Deploy Capital Into Buybacks vs. Peers
Or Given His Mystifying Reluctance To Deploy Capital Into Buybacks, Even as Peers With Lower Capital Ratios — Precisely Because They Never Raised Dilutive Capital Like KEY — Are Returning Far More To Shareholders? Recent Repurchase Activity(a) & CET1 vs. Peers(b) 3Q'25 Annualized Shares Repurchased(
Slide 9: KEY's Large, Overpriced First Niagara Deal
Or When One Remembers That KEY Executed a Large, Overpriced Deal That Completely Blindsided Investors — and Your Conflicted Chairman, Who Was The “Deal Guy” Behind It, Still Treats It as a Point of Pride? “When KeyCorp announced in October 2015 that it was buying First Niagara Financial Group in Buf
Slide 10: KEY Partially Steered By Scotiabank
Or That KEY Is Now Partially Steered By Scotiabank — a So-Called Passive Investor With Board Seats, an Openly Strategic Agenda, and Every Incentive To Use KEY as Its U.S. Outpost — and May, Perhaps at Scotia’s Urging, Be Chasing Scale Instead of Delivering What Shareholders Actually Want: a Sale To
Slide 11: Price / LTM Core EPS vs. Peers
But Set The Presidential Metaphors Aside — How Did We Get To a Place Where a Leader With Such a Short, Failure-Laced Tenure Now Seemingly Holds Shareholders Hostage, Dangling The Debasement Of The Cheapest Currency In The Super-Regional Space Instead Of Simply Committing To The Obvious Long-Term Str
Slide 12: Common Share Dilution During the Great Financial Crisis
To Answer This, We Need To Go Back In Time. Leading Up To The GFC, In Our View, KEY and HBAN Took The Most Risk, Came Closest To The Edge, and Ultimately Suffered The Deepest Dilution of Any of Their Peers. Common Share Dilution(a) During Great Financial Crisis (2007 to 2011) vs. Peers(b) 145% 136%
Slide 13: HBAN's Directors Removed The Prior Regime and Installed New Leadership
And HBAN’s Directors Removed The Prior Regime and Installed New Leadership From The Outside. “Hoaglin [Prior HBAN CEO] commented, ‘A year ago the Board and I recognized that we needed to put in place a succession plan. In late summer the Board decided to begin a formal CEO search and engaged the fir
Slide 14: Elevating an Internal Executive Who Had Served as CFO of AmSouth
But You Didn’t. You Elevated an Internal KEY Executive Who Had Previously Served as CFO of AmSouth In The Years Leading Up To Its Sale To Regions In 2006, The Same AmSouth Whose Florida Exposure Nearly Took Regions Down. RF Recognized a $6Bn Goodwill Impairment… “Regions Financial Corp…reported an u
Slide 15: Paying ~2.0x TBV for First Niagara
And In The Ensuing Years, Rather Than Capitalize On Your Cheap Valuation By Repurchasing Stock and Shrinking Share Count – Reversing Some of The Hyper-Dilution Damage From The GFC – You Did The Exact Opposite… You paid ~2.0x(a)(b) TBV for First Niagara (“FNFG”) – a deal so large the price was 36% of
Slide 16: A Stated 10-Year Earn Back
…And a Stated 10-Year Earn Back, Which Is So Absurd It Barely Requires Comment… Mike Mayo (Research Analyst): “I think we're in a – correct my thinking here, but what I think is unique here is that you're doing a deal one-third your size using mostly stock. And stock that's trading close to book val
Slide 17: Worst TBV Dilution and Longest Earn-Back of Large Bank Deals
…Which Resulted In The Worst Tangible Book Value Per Share Dilution and The Longest Earn-Back Period Of Any Large M&A Deal Over The Last 10 Years (a). TBV / Share Dilution (%) and Earn-Back at Announcement Date: Recent Large Bank Deals Over The Last 10 Years(a)(b)(c)(d) Earn-Back Earn- Earn- Earn- E
Slide 18: The Board Chose To Reward Executives
But Rather Than Say “We Messed Up” and Hold Executives Accountable, The Board Chose To Reward Them. Total Executive Compensation ($ in MM) (a) (b) (c) Salary Equity Cash All Other Comp. October 30, 2015 KEY announces acquisition of First Niagara Financial Group $27.7 $23.8 $24.3 $23.2 $21.4 9.0 $20.
Slide 19: Elevating an Internal Executive To The Role of CEO
And After That "Great-Except-For-The-Insane-Price" Acquisition, You Had Another Opportunity To Change Course. But Again, You Didn’t. Instead, You Elevated an Internal Executive To The Role of CEO — a Handpicked Golden Child With His Fingerprints All Over The Massively Overpriced Merger. “The integra
Slide 20: Stock Price Performance Since Mr. Gorman's CEO Announcement
And Since Then, Your Stock Has Been Among The Worst Performers Among Peers as Your Conflicted Chairman Has Made Unforced Error After Unforced Error… Stock Price Performance Since Mr. Gorman’s CEO Announcement on 9/19/2019 USB announced the sizable TFC’s poor performance is also MUFG Union Bank merge
Slide 21: Loading the Boat With MBS and Swaps at The Worst Possible Time
…First By Loading The Boat With MBS and Swaps at The Worst Possible Time, à la Comerica... KEY’s Historical Balance Sheet Growth vs. Rates KEY’s Historical Swap Exposure(a) In search for yield KEY loaded up on mortgage-backed Meanwhile KEY loaded up on receive fixed/pay floating swap securities as d
Slide 22: Marked CET1 Below Every Peer
…Driving Your Marked CET1(a) Below Every Peer and Triggering Panicked Selling of Your Debt To Severely Stressed Levels No Other Peer Experienced — Levels at Which We Were Able To Buy It For Prices as Low as 72 Cents On The Dollar(b)… Marked CET1%(a) vs. Peer(c) Median (4Q20 to 2Q24) (c) KEY Peer Med
Slide 23: Rescue Financing and Common Share Dilution During 2024
…And Forcing You To Do What No Peer Was Forced To Do: Tap Rescue Financing — and Charge Shareholders What Now Feels Like an All-Too-Routine Dilution Tax — To Quell a Panic In a Desperate Situation Of Your Own Making. Common Share Dilution(a) During 2024 vs. Peers(b) 18% “…The Bank of Nova Scotia is
Slide 24: Rewarding the Chairman For a Rescue Made Necessary By His Own Decisions
And at That Point — Humbled By Bad Decisions Gone Wrong But Relieved To Live Another Day — You Were Lucky Enough To Get Yet Another Chance To Bring In New Leadership and Change Course. But You Didn’t. You Instead Rewarded Your Conflicted Chairman For a Rescue Made Necessary Only By His Own Bad Decis
Slide 25: Proxy Advisors Flagged Your Incentive Structure as Misaligned
…And You Did It Despite Clear Objections From Independent Proxy Advisors Who Rightly Flagged Your Incentive Structure as Fundamentally Misaligned. “…falling investor support for its executives' pay, after a proposal to ratify the company's compensation packages drew significantly fewer "yes" votes c
Slide 26: Tangible Book Value per Share Over The Three CEO Eras
And Back To Our Initial Question: How Did We Get To a Place Where a Leader With Such a Short, Failure-Laced Tenure Now Seemingly Holds Shareholders Hostage, Dangling The Debasement Of The Cheapest Currency In The Super-Regional Space Instead Of Simply Committing To The Obvious Long-Term Strategy: Bu
Slide 27: You Did Not Stand Up For Shareholders
We Got Here Because You Did Not Stand Up For Shareholders. At Every Turn, You Seemed To Choose Management and Your Own Preservation Over The People Who Actually Own This Company. KEY Current Board Members Oversaw Oversaw Decisions Approved Errors Leading Reward Board Director Leading Up Approved Fir
Slide 28: Every Single Director Has Objectively Failed Their Constituents
Only In a Boardroom Where Every Single Director Has Objectively Failed Their Constituents – From Lead Independent Director Cutler, Under Whose 25-Year Tenure The Stock Is Lower, To The Newest – Could The Gorman-Led Errors Culminating In The Capital Raise Be Dressed Up as a Success and Management So
Slide 29: Common Shares Outstanding Over The Three CEO Eras
For This Never-Ending Dilution Tax — Spent on Palaces Only You Enjoy — Has Debased This Currency and Driven It Cheaper, as Shareholders Brace For More of The Same. Common Shares Outstanding Over The Three CEO Eras(a) (shares in MM) +162% Growth (2001 to Today) 1,079 1,069 1,1071,113 1,020 953 926 97
Slide 30: Break The Chains Of Habit
We Respectfully Ask You To Break The Chains Of Habit Before They Become Too Heavy — Because Once They Do, Only Shareholders Can Break Them at The Ballot Box, Just as Voters Did In ’92 After President George H. W. Bush Broke His “No New Taxes” Promise. “The chains of habit are too light to be felt un
Slide 31: II. Chairman Gorman's Tenure: Decisions That Put The Franchise at Risk
II. Chairman Gorman’s Tenure: Decisions That Put The Franchise at Risk 30
Slide 32: COVID, Rate Collapse and Deposit Inflows Into KEY
But We Need to Slow Down and Go Deeper Into What You Do In The Years Leading Up To The 2023 Crisis To Evaluate Whether You Are Just Unlucky or Whether You Are Reckless. In March 2020, COVID Hits and Rates Collapse Across The Curve and Stay Low For Two Years, as The Fed Expands Its Balance Sheet Dram
Slide 33: Sources and Uses of Liquidity from 1Q20 to 2Q21
…And a Little More Than a Year Later, After More Than $30 Billion of Deposits Rush In, Commercial Loans Haven’t Grown at All. Instead, You Deploy Roughly Half of That $30 Billion Into Fixed-Rate Securities and Fixed-Rate Mortgage Loans, Leaving a Massive $24 Billion Pile of Liquidity Sitting on Your
Slide 34: No Real Risk In Holding This $20 Billion Cash Pile
…And You Acknowledge There Is No Real Risk In Holding This $20 Billion Cash Pile — Even If Rates Go Negative — Beyond Foregone Income. With Rates Likely To Rise, Loan Demand Poised To Pick Up, and a Real Risk These Deposits Don’t Stick, You Talk Up The Boring But Prudent Course: Hold The Cash and Le
Slide 35: Loading Up On Fixed-Rate Securities and Mortgage Loans
…But You Can’t Take Your Own Advice. Despite Having Acknowledged That There Is No Real Risk In Holding Zero-Earning Cash, You Apparently Can’t Stomach Missing That Short-Term Income Boost. Over The Next Three Quarters, With Fed Funds Still Glued To Zero and Even More Deposits Pouring In, You Somehow
Slide 36: March 2022: Inflation, Fed Hikes and QT
…And Now It Gets Interesting. It’s March 2022, and You’re Sitting On Over $8 Billion of Liquidity(a), Which Sounds Impressive Until You Remember Deposits Are Up $37 Billion or 33% In Two Years(b) — Money That Can Leave as Quickly as It Arrived. But That’s Not Even The Main Problem. Inflation Is Ragi
Slide 37: Core Deposits Leave KEY and AOCI-Adjusted CET1 Falls
…And So With Every Passing Quarter In 2022 — as The Fed Hikes and Unwinds — Core Deposits Leave KEY and Must Be Funded With Cash, With No End In Sight. As Rates Rise, AOCI Losses Grow and AOCI-Adjusted CET1 Falls — With No End In Sight… KEY Core Deposits (4Q21-4Q22)(a) ($ in Bn) $151.1 $148.1 $145.5
Slide 38: Chasing Loan Growth as Deposits Flee
…And Against This Worsening Liquidity and Capital Backdrop — What Do You, a Category IV Bank, Do? Quarter After Quarter In 2022, as Deposits Flee, You Don’t Defend Liquidity; You Chase Loan Growth Instead, Because You Seemingly Can’t Bear Missing Out On The Action… KEY Loan/Deposit Metrics (4Q21-4Q2
Slide 39: The Denial Stage: AOCI-Adjusted CET1 at ~5%
…And Now We’re In The Denial Stage. By The End of 2022, Your AOCI-Adjusted CET1 Has Fallen To ~5% and Sits at The Bottom of Your Peer Group — By a Lot — and Your Conflicted Chairman Brushes It Off as Nothing To Worry About. Unadjusted Capital Levels Are at The Low End of Your Target, and, To Add See
Slide 40: Illiquid Assets Not Covered By Core Deposits
…And The Denial Deepens. With Rates Having Skyrocketed and Your Unadjusted CET1 Stuck at 9.1% (~5% AOCI-Adjusted), It’s Clear You Can’t Afford To Sell Securities and Crystallize The Loss, So They Are Now Effectively as Illiquid as Loans. Illiquid Assets Are No Longer Covered By Core Deposits(a) — No
Slide 41: While Peers Adjust, KEY Does Not
…And While Peers See This Risk and Adjust, KEY Does Not… Illiquid Assets / Core Deposits(a) vs. Peers(b) KEY Peer Median Peer Maximum KEY is in line with the median and well KEY is above the peer median but still While peers are managing their below the top-performing peer well below the top peer cu
Slide 42: Fixed-Rate Exposure Increased Despite Stated Purpose
…And as We Close The Book On 2022, Any Narrative That KEY Ramps Up Its MBS Investments and Swaps In Low-Rate 2021 Simply To Keep a Steady Fixed-Rate Slice of Earning Assets — as It Claims Is The Purpose In 2020 — Is Flatly Betrayed By The Numbers. The Only Plausible Conclusion Is That Fixed- Rate Du
Slide 43: Silicon Valley Fails and KEY's Debt Trades Down
…And Then Silicon Valley Fails. KEY’s Debt Trades Down For an Extended Period, With Millions of Dollars Changing Hands — at Severely Stressed Levels. HoldCo Steps In and Buys Some of That Debt at Prices Primarily Between 72 and 79 Cents On The Dollar(a). But After Purchasing $68 Million, We Stop (Co
Slide 44: Bonds Priced In a Greater Than 40% Probability of Failure
…And Its Bonds Priced In a Greater Than 40% Probability of The Bank Failing(a) Over The Next 9-10 Years… Estimated Probability of Default of KEY Bonds (as of 10/31/23)(a)(b)(c)(d) YAS Maturity Annual Cumulative HoldCo/ Senior Mdy's S&P Size Price Bond YAS G- YAS Z- (Yrs) f rom Est. Probabilty Probab
Slide 45: Both Major Rating Agencies Downgrade KEY's Debt
…And In The Months That Follow, Both Major Rating Agencies Downgrade KEY's Debt Rating – One of Only Two Category I, II, III, or IV Banks To Earn That Distinction(a)… (b) (c) Source: Moody’s, S&P Global Ratings. Note: Quotes from the articles shown above have been abbreviated for illustrative purpos
Slide 46: KEY Shrinks More Than Any Peer
…And at That Point, There Is Nothing Perhaps KEY Can Do But Pray and Desperately Try To Shrink The Book — Which Isn’t Easy Given How Illiquid It Has Become. The Key Decisions That Got Them Here Are Already Made, and They Are Entirely Locked In. KEY Ends Up Shrinking More Than Any of Its Peers, Becau
Slide 47: Regulators Propose a New Capital and Liquidity Framework
…And Regulators Propose a New Capital and Liquidity Framework That Will Subject Banks Like KEY To AOCI Inclusion, Require New Debt To Be Raised, and Require Greater Levels of Liquidity, All While The Dividend Is Put at Risk and Debt Spreads Remain Elevated Throughout 2024. “President Biden urges the
Slide 48: KEY Survives Through Scotiabank Rescue Capital
But Most Importantly, KEY Survives. It Lives To See Another Day — at The Price of Raising Much Needed Capital From Scotiabank In a Rescue Deal We Agree Was Necessary, But That Raises Serious Concerns About Scotia’s True Intent, Its Conflicts With Purely Economically Minded Shareholders, and The Subs
Slide 49: Securities Restructuring With an Infinite Earn-Back
…And Then, With Fresh Capital In Hand, Rather Than Buy Back Stock at Dirt-Cheap Levels, KEY Chose To Allocate Half of It On a Seemingly “Infinite Earn-Back” Securities Restructuring That Appears To Have a Negative IRR. ($ in MM) Key Assumptions • Repricing/maturities schedules for 33 19 6 47 the old
Slide 50: Leadership Concedes This Could Have Been Avoided
And Credit To Leadership For Conceding That All of This Could Have Been Avoided By Simply Running a Scenario Where Rates Rise Quickly. But If The Management of a Category IV Bank Can’t Clear a Bar That Low, Should They Really Be Running a Category IV Bank? Steven A. Alexopoulos (J.P. Morgan): “…But
Slide 51: KEY's Been Swimming Naked
And Just Like In The GFC, We Find Out Again: KEY’s Been Swimming Naked. “Only when the tide goes out do you discover who’s been swimming naked.” – Warren Buffett 50
Slide 52: III. Next Steps
HOLDCO ASSET MANAGEMENT lll. Next Steps Sl
Slide 53: HoldCo's Recommendation To The Board
HoldCo’s Recommendation To The Board… • HoldCo Opportunities Fund V, L.P. owns $142 million market value and 7.5 million shares of KEY(a) • We believe the Board should take the following actions: 1.1 Adopt a clear “no acquisitions” policy: • Commit that the Board will not consider any future bank ac
Slide 54: One Small Request: A Little Bit of Responsiveness
And One Small Request: Given That You’re an S&P 500 Bank With a Heavily Institutional Holder Base, Is It Too Much To Ask For a Little Bit of Responsiveness — Even If We’re Not Scotiabank? HoldCo meets with KEY over Zoom to better understand the company and then follows up with two technical question
Slide 55: One Small Request: A Little Bit of Responsiveness (cont'd)
And One Small Request: Given That You’re an S&P 500 Bank With a Heavily Institutional Holder Base, Is It Too Much To Ask For a Little Bit of Responsiveness — Even If We’re Not Scotiabank? (cont’d) Still no response. Nearly a month later, HoldCo emails a third time and notes it is now a large shareho
Slide 56: Next Steps
Next Steps • In the coming days, we intend to listen very carefully to the comments of your Conflicted Chairman, to see whether it is possible to determine with any confidence where he truly stands on issues of capital allocation • Today’s presentation tells a story, but it does not yet prove, with
Slide 57: Appendix
HOLDCO ASSET MANAGEMENT Appendix 56
Slide 58: Appendix: Peer Group Selection
Appendix: Peer Group Selection All Category I to IV Banks(a) Excluded Banks(b) Peer Group(b) Name Ticker Excluded: Money Center Banks Name Ticker Ally Financial Inc. ALLY Name Ticker Citizens Financial Group, Inc. CFG American Express Company AXP Bank of America Corporation BAC Fifth Third Bancorp F