Keycorp · NYSE:KEY
Keycorp — Keycorp /New/ — Investor Presentation (February 2001)
26 slides from Keycorp's investor presentation, Feb 14, 2001
Slide 1: Forward-Looking Statement Disclosure
Hochiilait. 4354.1 FORWARD-LOOKING STATEMENT DISC LOSUT RE statcnients ec level of ffs arid rorpert , Le ipaledl nprovernenl i711 aud commpeliliy en Ponyard-louki alemer their ualure are sumptions, risks and uncertamties let) easons, actual s could difter materially trom these contained in or implie
Slide 2: Transformation, Productivity, Technology, Risk Management
e Transformation e Productivity « Technology e Risk Management
Slide 3: Divest low growth and invest in higher growth businesses
Divest low growth and invest in higher growth businesses 1996 Revenue 2000 Revenue Capita) Partners Dees Cansumer Banking cagital Partners Consumer 62% qos Banning Carporate Of. Corporate SoM Finance Finance 39%, 25%
Slide 4: Mortgage Banking Business and other divestitures
Mortgage Banking Business $2.1 B. Investment Securities Florida Savings Bank $2.2 B. Investment Securities $1.0 B. Low Return Prime Auto Loans 4117 Low Growth Branches 46 Low Growth Branches Long Island District ; 28 Branches $1.38. Credit Card Portfolio Auto Finance Group Spears Benzak Carleton, Mc
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Slide 6: 2001 Revenue Targets
« Asset Management 2001 Revenue Targets « High Net Worth « Capital Markets : + Equity Capital Mkts./ c 210 ji] Jnvestment Banking Pali are Gonsumer, Zay5 Banking 370), Corporate Finance 39% * Core Banki » Consumer Finance » Home Equity + Commercial Banking «Commercial R/E + Specialized Industnes « G
Slide 7: Core Revenue 2-Year CAGR
in ditions Yr. CAGR Care Revenue 5.5% Adjusted Care Revenue’ 8.2% $4.0 $3.7 a $3.9 1997 19398 1399 2000 *Adjusted core revenue excludes earnings from divested businesses and Champion securitizations
Slide 8: Diluted EPS 2-Year CAGR
Diluted EPS 2Yr. CAGR Core EPS 6.5% Adjusted Cara EFS* 9.5% $2.12 $1.92 $1.93 $1.74 1997 1998 13999 *Adjusted core EPS excludes eamings from divested businesse: Champion securitizations
Slide 9: Expected Annual Expense Reduction
Expected Annual Expense Reduction Initial Target Nov. 9G Phase 1 $85 Phase 2 85 Total $170 million Revised | arget Sept 00 $100 $300 million
Slide 10: Peer Banks
ry = = 1) % £ c 2 u re) » D a £ = Ly 6 ¢ a o Peer Banks
Slide 11: Well diversified by industry and geography
e Well diversified by industry and geography e Granular Portfolio — Largest credit exposure: $249 million — Six relationships greater than $200 million — Average loan size: Less than $10 million — Largest NPL: $33 million
Slide 12: Net Charge-offs / Average Loans
Net Charge-offs/ Ave. Loans Percent Key Lehman Large-Cap Bank Index 1.00 4036 1099 2Q99 z 39 4q995 1q00 2000 3o00 4000
Slide 13: Loan Loss Reserve/Loans
Loan Loss Reserve/Loans Wells Farge FleetBosten Financial ¥Cors Wachovia Comerica Huntington National City First Unian PNC BB& Sun Trust tai B ct -er=
Slide 14: Tier 1 Capital Ratio
Tier 1 Capital Ratio BB&T PNC Sun Trust FleetBoston Financial Bank One Wells Huntin U.S. Banc National City First Union oa ~ > [77] AC RIA Rat sts
Slide 15: Consecutive Years of Dividend Increases
36 Consecutive Years of Increases 10 Year CAGR = 10% 1991 1992 199% 1994 1995 1996 1997 1998 1999 2000 2001T
Slide 16: Distinctive, well positioned businesses
- Distinctive, well positioned businesses - Focus on high growth areas - Significant technology investment * Solid financial performance - Earnings growth - Revenue/productivity improvement building throughout the year « History of prudent risk management « Attractive valuation
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Slide 19: The wild card for our industry in 2001 is credit quality
The wild card for our industry in 2001 is credit quality. Key expects net charge-offs and NPA to increase from 4Q00 levels. The amount of deterioration will depend on the speed and depth of the economic slowdown. EPS of $2.53 may be at the high end of a reasonable range of expectations for 2001. In
Slide 20: 1st Half 2000 vs 2nd Half 2000 Net Charge-offs
a a | 1st Half 2000 2nd Half 2000 Reported Net Charge-offs 0.84% 0.42% Core Net Charge-offs. 0.39% 0.43%
Slide 21: 2001 Outlook
Earning Assets Modest increase Net Interest Margin Relatively stable Noninterest Income Modest increase Noninterest Expense Slight increase Tax Rute Relatively stable Shares Outstanding Modest decline Asset Quality: Core Net Charge-offs Up NPA Up
Slide 22: First Quarter 2001 Outlook
Earning Assets Net Interest Margin Noninterest Income Noninterest Expense Tax Rate Shares Outstanding Assct Quality: Core Net Charge-offs NPA Slight increase Slight seasonal decline Seasonal decline Flat to slight decline Relatively stable Slight decline Up Up
Slide 23: Quarterly EPS trend and 1Q01 target
2Q00 3Q00 4Q00 1Q01T nuinber of $0.53, from the year-ago quarter.
Slide 24: KeyCenters consumer banking
92? KeyCenters 2,443 ATMs Total Consumer Loans: $23 Bill. Total Consumer Deposits: $32 Bill. Call Center - 4 million calls per month On-line Clients: 275,000 (16% Penetration) Improve cross-sell and relationship building activities Continued focus on deposit growth Invest in high growth markets Util
Slide 25: Commercial finance rankings and priorities
#3 Equipment Leasing #5 Commercial R/E Finance #6 Small Business - Accelerate fee income growth + Leverage competitive position in commercial real estate + Expand equipment leasing (¢.g. “low- tech” vendor leasing) + Continue to pursue cross-sell synergies + Enhance sales & client support productivi
Slide 26: #1 regional brokerage firm in productivity
#1 regional brokerage firm in productivity Managed Assets: $ 75 Bill. Non-Managed Assets: 49 Bill. Brokerage Assets Under Control: 36 Bill. $160 Bill. * Expand cross-selling teams * Continue to pursue expansion in high growth markets (Boston, Nashville, Chicago & Denver) « Grow High Net VWWorth segm
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