Slide 1: Third Quarter 2022 Earnings Review
KeyCorp Third Quarter 2022 Earnings Review October 20, 2022 Chris Gorman Don Kimble Chairman and Vice Chairman and Chief Executive Officer Chief Financial Officer
Slide 2: Forward-looking Statements and Additional Information
Forward-looking Statements and Additional Information 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
Slide 3: 3Q22 Results
3Q22 Results Financial Results Strategic Highlights Committed to serving and $.55 Positive 9% 21% supporting our clients through all Earnings per Operating Increase in Return on market conditions diluted common Leverage PPNR(1) vs. PQ average tangible share vs. PY & PQ common equity(1) Continued
Slide 4: Financial Review
Financial Review
Slide 5: Financial Highlights
Financial Highlights 3Q22 2Q22 3Q21 LQ Δ Y/Y Δ Continuing operations, unless otherwise noted EPS – assuming dilution $ .55 $ .54 $ .65 1.9 % (15.4) % Cash efficiency ratio(1) 58.0 % 59.5 % 60.2 % (150) bps (220) bps Return on average tangible common equity(1) 21.2 20.9 18.6 30 260 Profitability Retu
Slide 6: Loans
Loans Total Average Loans Highlights $ in billions vs. Prior Year $120 $114 PPP: $.3 40.00% Average loans up 14% from 3Q21 $110 $100 Total average loans − Broad-based commercial growth, partially offset by a decline in $4.3 31% $100 30.00% PPP PPP balances $90 28% − Growth in consumer mortgage and
Slide 7: Deposits
Deposits Average Deposits Highlights $ in billions Strong and stable deposit base $147 $144 $150 − 32% noninterest-bearing(1) 0.55% Commercial $120 Consumer − ~60% stable retail and low-cost escrow .25% Cost of total interest- − 81% loan to deposit ratio(2) $90 x 0.30% bearing deposits $60 .06% Co
Slide 8: Net Interest Income and Margin
Net Interest Income and Margin Net Interest Income & Net Interest Margin Trend (TE) Highlights $ in millions, continuing operations vs. Prior Year $1,300 4.0% $1,203 Net interest income up $178MM (+17%) from 3Q21 $1,200 3.5% − Reflects higher interest rates, higher earning asset $1,100 $1,025 bala
Slide 9: Noninterest Income
Noninterest Income Noninterest Income Highlights vs. Prior Year $ in millions up / (down) 3Q22 vs. 3Q21 vs. 2Q22 Trust and investment services income $ 127 $ (2) $ (10) Noninterest income down $114MM (-14%) from 3Q21 Investment banking and debt placement fees 154 (81) 5 − Lower investment banking
Slide 10: Noninterest Expense
Noninterest Expense Noninterest Expense Highlights $ in millions favorable / (unfavorable) 3Q22 vs. 3Q21 vs. 2Q22 vs. Prior Year Personnel $ 655 $ (15) $ (48) Noninterest expense relatively stable (-$6MM) from 3Q21 Net occupancy 72 2 6 − Lower nonpersonnel expense (-$21MM) driven by broad- Compute
Slide 11: Credit Quality
Credit Quality Net Charge-offs & Provision for Credit Losses $ in millions $150 .50% .15% .11% $50 $109 .00% $29 $43 ($50) $(107) (.50)% ($150) (1.00)% 3Q21 4Q21 1Q22 2Q22 3Q22 NCOs Provision for credit losses NCOs to avg. loans Nonperforming Loans Allowance for Credit Losses (ACL) $ in millions $ i
Slide 12: Capital
Capital Common Equity Tier 1(1) Highlights 11.0% Strong capital position: CET1 ratio 9.1%(1) at 9/30/2022 10.0% 9.6% − Within targeted range of 9.0% - 9.5% 9.1% 9.0% Declared quarterly common share dividend of $.195 8.0% Board of Directors approved extension of existing $790 million share repu
Slide 13: 4Q22 Outlook
4Q22 Outlook 4Q22 (vs. 3Q22) • Loans: up 2% - 4% Average Balance Sheet • Deposits: up 1% - 3% Net Interest Income (TE) • Net interest income: up 4% - 6% Noninterest Income • Noninterest income: up 1% - 3% Noninterest Expense • Noninterest expense: up 1% - 3% Credit Quality • Net charge-offs to avera
Slide 14: Appendix
Appendix
Slide 15: Commercial Loan Portfolio Detail
Commercial Loan Portfolio Detail Total Commercial Loans Commercial & Industrial (C&I) $ in billions 9/30/22 % of total loans Solid middle market portfolio Commercial and industrial $ 56,971 49% Aligning bankers to areas of market opportunity and growth - investing in strategic hires with industr
Slide 16: Consumer Loan Portfolio Detail
Consumer Loan Portfolio Detail Total Consumer Loans Laurel Road $ in millions Origination Volume $ in billions 9/30/22 % of total loans WA FICO at origination Consumer mortgage $ 20,838 18% 762 $820 $646 Home equity 7,926 7 807 $504 $445 Consumer direct 6,803 6 757 $194 Credit card 977 1 793 3Q21 4Q
Slide 17: Investment Portfolio
Investment Portfolio Average Total Investment Securities Highlights $ in billions Portfolio used for funding and liquidity management $60.0 3.00% $50.2 ‒ Portfolio composed primarily of fixed-rate GNMA and GSE-backed MBS and CMOs $43.4 2.50% $40.0 ‒ Portfolio yield excluding short-term Treasury/Ag
Slide 18: Asset & Liability Management Positioning
Asset & Liability Management Positioning Balanced approach to managing interest rate risk provides declining rate protection while maintaining upside to higher rates 3Q22 Balance Sheet Highlights(1) Actively Managing Interest Rate Risk Position Loan Composition Deposit Mix Given macroeconomic and
Slide 19: Credit Quality Trends
Credit Quality Trends Delinquencies to Period-end Total Loans Criticized Outstandings(1) to Period-end Total Loans Continuing Operations Continuing Operations .50% 6.0% .40% 4.0% .30% 3.3% .17% 2.5% .20% .16% 2.0% .08% .10% .04% .00% .0% 3Q21 4Q21 1Q22 2Q22 3Q22 3Q21 4Q21 1Q22 2Q22 3Q22 30 – 89 days
Slide 20: Credit Quality
Credit Quality Credit Quality by Portfolio Net loan charge- Allowance / Allowance / Period-end Average Net loan Nonperforming Ending offs(3) / average period-end NPLs $ in millions loans loans charge-offs loans allowance loans (%) loans (%) (%) 9/30/22 3Q22 3Q22 3Q22 9/30/22 9/30/22 9/30/22 9/30/22
Slide 21: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $ in millions (1) For the three months ended September 30, 2022, June 30, 2022, and September 30, 2021, intangible assets exclude $2 million, $2 million, and $3 million, respectively, of period-end purchased credit card receivables; (2) Net of capital surplus; (3) For
Slide 22: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $ in millions 22