Slide 1: KeyCorp First Quarter 2013 Earnings Review
Exhibit 99.2 KeyCorp First Quarter 2013 Earnings Review April 18, 2013 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 – 1Q13
Investor Highlights – 1Q13 Optimize and Net interest income up 5% compared to the prior year Grow Grew average C&I loans by 16% from the prior year Revenue Pursuing growth opportunities: payments and technology Achieved $105 million in annualized expense savings through 1Q13; remainder of the $200 m
Slide 4: 2013 Focus Areas
2013 Focus Areas Execute Strategy with Distinctive Business Model Maintain Moderate Risk Profile Accelerate Revenue Growth with Opportunistic Investing Align Cost Structure with Operating Environment Leverage Strong Capital Position to Maximize Value 4
Slide 5: Financial Review
Financial Review 5
Slide 6: Financial Summary – First Quarter 2013
Financial Summary – First Quarter 2013 Metrics 1Q13 4Q12 1Q12 Income from continuing operations attributable to Key $.21 $.20 $.20 Financial common shareholders – assuming dilution Performance (a) Net interest margin (TE) 3.24% 3.37% 3.16% Return on average total assets .99 .96 1.01 Tier 1 common eq
Slide 7: Loan Growth
Loan Growth Highlights Average Commercial & Industrial Loans Average loan growth driven by C&I, while the exit $ in billions portfolio continues to run-off Originated $8.5 billion in new or renewed lending commitments during 1Q13 C&I commitment utilization increased to 49.2% Clients remained cautiou
Slide 8: Improving Deposit Mix
Improving Deposit Mix Highlights Funding Cost Overall funding cost continues to improve, with total deposit cost declining to 29 bps Transaction deposit balances up 14% from 1Q12 Total CD maturities and average cost – 2013 Q2: $2.0 billion at 0.85% – 2013 Q3: $1.3 billion at 1.30% – 2013 Q4: $0.8 bi
Slide 9: Total Revenue
Total Revenue Highlights Net Interest Margin (TE) Trend Net interest income increased 5% from prior Continuing Operations year, with net interest margin up 8 basis points 3.50% 3.00% Net interest margin compared to prior quarter impacted by lower asset yields and higher liquidity 2.50% 3.19% 3.16% 3
Slide 10: Focused Expense Management
Focused Expense Management Highlights Noninterest Expense Significant progress made on efficiency initiative – Achieved $105 million in annualized expense savings through 1Q13 – On target for $200 million in expense savings by December 2013, with full-year impact expected in 2014 1Q13 expense includ
Slide 11: Continued Improvement in Asset Quality
Continued Improvement in Asset Quality Highlights Net Charge-offs & Provision for Loan and Lease Losses $ in millions Net loan charge-offs decreased 51% from 1Q12 to $49 million, or 38 bps of average loans 1Q13 commercial loan net charge-offs were $5 million or 6 bps Asset quality reaching normalize
Slide 12: Strong Capital Ratios
Strong Capital Ratios Highlights Tangible Common Equity to Tangible Assets (b) No objection from Federal Reserve on capital plan 12.0% – Board authorized share repurchase program 9.7% 10.3% 10.2% of up to $426 million 9.0% – Dividend increase will be considered at May Board meeting 6.0% Disciplined
Slide 13: Appendix
Appendix 13
Slide 14: Progress on Targets for Success
Progress on Targets for Success KEY Business KEY KEY KEY Metrics (a) Targets Action Plans Model 1Q13 4Q12 Use integrated model to grow relationships Core funded Loan to deposit ratio (b) 87% 86% 90-100% and loans Improve deposit mix NCOs to average loans .38% .44% Focus on relationship clients Retur
Slide 15: 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 $20 $19.0 4.00% $17.5 – No private label MBS or financial paper $15.9 $15 3.22% 3.00% 3.01% Average portfolio life at 3/31/13: 2
Slide 16: Credit Quality
Credit Quality Credit Quality by Portfolio $ in millions Net loan Allowance / Period-end Average Net loan Nonperforming Ending charge-offs / (b) period-end Allowance / loans loans charge-offs loans (c) allowance (d) (d) NPLs average loans loans 3/31/13 1Q13 1Q13 4Q12 1Q13 4Q12 3/31/13 12/31/12 3/31/
Slide 17: Home Equity Loans – 3/31/13
Home Equity Loans – 3/31/13 Community Bank – Home Equity Vintage (% of Loans) $ in millions, except average loan size Average Loan Average Average % of Loans 2012 and 2008 and Loan Balances Size ($) FICO LTV (a) LTV>90% later 2011 2010 2009 prior Home equity loans and lines First lien $ 5,429 $ 64,5
Slide 18: Exit Loan Portfolio
Exit Loan Portfolio Exit Loan Portfolio $ in millions Balance on Balance Change Net Loan Nonperforming Outstanding 3-31-13 vs. Charge-offs Status 3-31-13 12-31-12 12-31-12 1Q13 (c) 4Q12 3-31-13 12-31-12 Residential properties – homebuilder $29 $29 - - $1 $10 $10 Marine and RV floor plan 29 33 $(4) $
Slide 19: Credit Quality Trends
Credit Quality Trends Delinquencies to Period-end Total Loans Quarterly Change in Criticized Outstandings (a) 30 – 89 days delinquent 90+ days delinquent (a) Loan and Lease Outstandings 19
Slide 20: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $ in millions Three months ended 3-31-2013 12-31-2012 3-31-2012 Tangible common equity to tangible assets at period end Key shareholders’equity (GAAP) $ 10,340 $ 10,271 $ 10,099 Less: Intangible assets (a) 1,024 1,027 932 Preferred Stock, Series A 291 291 291 Tangible
Slide 21: GAAP to Non-GAAP Reconciliation (continued)
GAAP to Non-GAAP Reconciliation (continued) $ in millions Three months ended 3-31-2013 12-31-2012 3-31-2012 Average tangible common equity Average Key shareholders’ equity (GAAP) $ 10,279 $ 10,261 $ 9,992 Less: Intangible assets (average) (a) 1,027 1,030 932 Preferred Stock, Series A (average) 291 2
Slide 22: Tier 1 Common Equity under Basel III (estimated)
Tier 1 Common Equity under Basel III (estimated) KeyCorp & Subsidiaries (a) TIER 1 COMMON EQUITY UNDER BASEL III (ESTIMATES) Quarter ended Mar 31, $ in billions 2013 Tier 1 Common Equity under current regulatory rules $9.2 Adjustments from current regulatory rules to Basel III: (b) Cumulative Other