Slide 1: KeyCorp First Quarter 2022 Earnings Review
KeyCorp First Quarter 2022 Earnings Review April 21, 2022 Don Kimble Vice Chairman and Chief Financial Officer Chris Gorman Chairman and Chief Executive 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: 1Q22 Results
1Q22 Results 3 EPS of $.45 per diluted common share − Includes $.04 related to reserve build ($50MM) Strong loan growth: momentum across consumer and commercial − Broad-based commercial growth with C&I line utilization up 2% − Continued strength across consumer mortgage and record quarter for La
Slide 4: Financial Review
Financial Review
Slide 5: Financial Highlights
EOP = End of Period; (1) Non-GAAP measure: see appendix for reconciliation; (2) 3/31/2022 ratios are estimated and reflect Key's election to adopt the CECL optional transition provision Financial Highlights 5 EPS – assuming dilution $ .45 $ .64 $ .61 (30) % (26) % Cash efficiency ratio(1) 62.4 % 59.
Slide 6: Average Loan Detail
Total Average Loans 1Q21 4Q21 1Q22 Consumer loans Indirect Auto Highlights Average Loan Detail 6 $7 $1.2 28% 31% 20.00% 30.00% 40.00% $60 $70 $80 $90 $100 $110 1Q21 2Q21 3Q21 4Q21 1Q22 C&I line utilization Total average loans PPP $ in billions 1Q21 4Q21 1Q22 Commercial loans PPP PPP Average loans
Slide 7: Deposits
(1) Based on period-end balances; (2) Represents period-end consolidated total loans and loans held for sale divided by period-end consolidated total deposits Deposits 7 $ in billions vs. Prior Quarter Average deposit balances down .6% from 4Q21 − Lower time deposits − Lower commercial deposits re
Slide 8: Net Interest Income and Margin
Net Interest Income and Margin $ in millions, continuing operations vs. Prior Quarter TE = Taxable equivalent $1,012 $1,020 2.61% 2.46% 2.0% 2.5% 3.0% 3.5% 4.0% $500 $600 $700 $800 $900 $1,000 $1,100 1Q21 2Q21 3Q21 4Q21 1Q22 Net Interest Income (TE) Net Interest Margin (TE)x NIM Change vs. Prior Qua
Slide 9: Noninterest Income
Noninterest Income 9 Noninterest income down $62MM (-8%) from 1Q21 − Lower other income (-$55MM) reflecting market related adjustments in both the current and year-ago period − Lower consumer mortgage income (-$26MM) driven by record production in the year-ago period and lower gain on sale margins
Slide 10: Noninterest Expense
Noninterest Expense 10 vs. Prior Quarter vs. Prior Year $ in millions favorable / (unfavorable) 1Q22 vs. 1Q21 vs. 4Q21 Personnel $ 630 $ (6) $ 44 Net occupancy 73 3 2 Computer processing 77 (4) (4) Business services, professional fees 53 (3) 17 Equipment 23 2 2 Operating lease expense 28 6 3 Marketi
Slide 11: Credit Quality
NCO = Net charge-off NPL = Nonperforming Loans Credit Quality 11 $114 $33 ($93) $83 .46% .13% (1.20)% (.60)% .00% .60% ($300) ($200) ($100) $0 $100 $200 1Q21 2Q21 3Q21 4Q21 1Q22 NCOs Provision for credit losses NCOs to avg. loans $728 $439 .72% .41% .00% .40% .80% 1.20% 1.60% 2.00% $0 $300 $600 $900
Slide 12: Capital
(1) 3/31/22 ratio is estimated and reflects Key's election to adopt the CECL optional transition provision; (2) Non-GAAP measure: see Appendix for reconciliation Capital 12 Strong capital position: CET1 ratio 9.4%(1) at 3/31/2022 − Within targeted range of 9.0-9.5% Declared quarterly common shar
Slide 13: Full Year 2022 Outlook
Full Year 2022 Outlook Note: Guidance ranges: relatively stable: +/- 2%; low-single digit: 1% - 3%; mid-single digit: 4% - 6%; high-single digit: 6% - 9%; low-double digit: 10% - 12%; mid-teens: 13%-16% Long-term Targets Positive operating leverage Moderate risk profile: Net charge-offs to avg. loan
Slide 14: Appendix
Appendix
Slide 15: Commercial Loan Portfolio Detail
Commercial Loan Portfolio Detail vs. Prior Year Target specific client segments focused in seven industry verticals Experienced bankers with deep industry expertise Focused on high quality clients Credit quality metrics remain strong and stable − Disciplined, consistent underwriting − Active
Slide 16: Consumer Loan Portfolio Detail
Consumer Loan Portfolio Detail Portfolio Highlights Prime & super prime client base focused on relationships Continued consumer originations bring more balance to portfolio Continuing to invest in digital to drive future growth 773 weighted average FICO at origination $475 $399 $504 $646 $820
Slide 17: Securities Portfolio
17 $ in billions 1.91% 1.64% 1.00% 1.50% 2.00% 2.50% 3.00% $0.0 $20.0 $40.0 $60.0 1Q21 2Q21 3Q21 4Q21 1Q22 Average AFS securities Average yield(1)Average HTM securities Projected Cash Flows & Maturities (under implied forward rates) Floating Rate (including hedges) Portfolio used for funding and l
Slide 18: Interest Rate Risk Management
Balanced approach to managing interest rate risk, reducing declining rate exposure while maintaining upside to higher rates (1) Loan and deposit statistics based on 3/31/2022 ending balances Loan Composition Deposit Mix Prime 9% 1M LIBOR 31% 3M LIBOR 6% Other 11% SOFR 10% Fixed 33% Interest-bearing
Slide 19: Credit Quality Trends
Credit Quality Trends Delinquencies to Period-end Total Loans Criticized Outstandings(1) to Period-end Total Loans (1) Loan and lease outstandings; (2) From continuing operations Continuing Operations Continuing Operations .19% .11% .09% .05% .00% .20% .40% .60% .80% 1Q21 2Q21 3Q21 4Q21 1Q22 4.2% 2.
Slide 20: Credit Quality by Portfolio
Credit Quality by Portfolio 20 Period-end loans Average loans Net loan charge-offs Net loan charge- offs(3) / average loans (%) Nonperforming loans Ending allowance Allowance / period-end loans (%) Allowance / NPLs (%) 3/31/22 1Q22 1Q22 1Q22 3/31/22 3/31/22 3/31/22 3/31/22 Commercial and industrial(
Slide 21: GAAP to Non-GAAP Reconciliation
21 $ in millions (1) For the three months ended March 31, 2022, December 31, 2021, and March 31, 2021, intangible assets exclude $2 million, $3 million, and $4 million, respectively, of period-end purchased credit card receivables; (2) Net of capital surplus; (3) For the three months ended March 31,
Slide 22: GAAP to Non-GAAP Reconciliation
22 $ in millions GAAP to Non-GAAP Reconciliation 3/31/2022 12/31/2021 3/31/2021 Return on average tangible common equity from continuing operations Net income (loss) from continuing operations attributable to Key common shareholders (GAAP) 420$ 601$ 591$ Average tangible common equity (non-GAAP) 12,