Slide 1: KeyCorp Fourth Quarter 2024 Earnings Review
KeyCorp Fourth Quarter 2024 Earnings Review January 21, 2025 Chris Gorman Chairman and Chief Executive Officer Clark Khayat Chief Financial Officer
Slide 2: 2024 Results
2024 Results 15% (7)% 12.0% Increase in strategic, fee-based 4% Criticized Loans QoQ Common Equity Tier 1(3), up businesses (Investment Banking, Client Deposit Growth(1) ~200bps YoY Wealth and Commercial Payments)(1) 74bps NPAs / Period-end Loans(2) $61Bn 3% 9.8% In Assets Under Management(2) Net Ne
Slide 3: Financial Review
Financial Review
Slide 4: 4Q24 Highlights
4Q24 Highlights $ in millions, excluding EPS From continuing operations, unless otherwise noted Reported QoQ YoY ▪ Reported EPS of $(0.28), or $0.38 adjusted for impact from selected items(1) EPS $ (0.28) (40.4) % N/M ▪ Net interest income up 10% QoQ, benefiting from fixed rate Net Interest Income (
Slide 5: FY 2024 Highlights
FY 2024 Highlights $ in millions, excluding EPS From continuing operations, unless otherwise noted 2024 FY24 vs. Reported FY23 ▪ Reported EPS of ($0.32), or $1.16 adjusted for impact of selected items(1) +1% excl. EPS $ (0.32) (136.4) % selected items(1) ▪ Net interest income down 3.4%, reflecting l
Slide 6: Average Loans
Average Loans $ in billions $113.9 vs. Prior Quarter $111.0 $109.0 $106.2 EOP Loans: $104.7 $104.3Bn ▪ Average loans down 1.4% from 3Q24 Consumer $35.3 $34.6 $33.9 $33.2 $32.6 − Decline in commercial loans ($1.0Bn) reflected a Commercial $78.6 decrease in commercial mortgage real estate loans $76.4
Slide 7: Average Deposits
Average Deposits vs. Prior Quarter $ in billions $149.7 $145.1 $142.9 $144.2 $147.8 ▪ Average deposits were up 1.3% from 3Q24 Other(1) $57.4 $58.7 $59.7 $58.2 $56.3 − Growth across both consumer and commercial deposits Commercial 2.39% 2.28% − Included ~$160MM decrease in brokered CDs (to $4.4Bn) 2.
Slide 8: Net Interest Income and Margin (TE)
Net Interest Income and Margin (TE) From continuing operations, $ in millions NII Walk (TE) $1,061 +14% $(10)-$(15) $(2)-$(5) $964 $928 $886 $899 +10% 2.41% 3Q24 Legacy USTs Securities Securities Funding Rate impact Loan decline 4Q24 & terminated repositioning portfolio optimization & other 2.17% sw
Slide 9: Noninterest Income
Noninterest Income % change vs. Prior Year $ in millions; Illustrative, not drawn to scale $649(1) $722(1) YoY QoQ ▪ Noninterest income included a $918MM pre- Total Noninterest $610 $(269) $(196) N/M 27% tax loss from the sale of securities and Income investment agreement valuation(3) $69 3% - − Exc
Slide 10: Noninterest Expense
Noninterest Expense % change vs. Prior Year $ in millions YoY QoQ ▪ Noninterest expense down $143MM − Driven by ~$275MM of selected items(1) in the Total Noninterest fourth quarter of 2023 Expense $1,372 $1,094 $1,229 (10.4)% 12.3% − Expenses up excluding selected items due to (1) higher incentive a
Slide 11: Credit Quality
Credit Quality Net Charge-offs & Provision for Credit Losses Delinquencies to Period-end Total Loans $ in millions Continuing Operations 0.58% 0.43% 0.26% 0.29% 0.34% $154 0.26% $114 0.20% 0.22% $102 $101 $91 $100 $95 0.17% $76 $81 0.20% $39 0.11% 0.13% 0.16% 0.09% 0.09% 4Q23 1Q24 2Q24 3Q24 4Q24 4Q2
Slide 12: Capital
Capital Common Equity Tier 1(1) Projected AOCI Impacts (Forward Curve) 12.0% $ in billions 10.5% 10.8% 10.0% 10.3% AOCI Position Forward Rates 9.8% 8.6% 12/31/24 12/31/25 12/31/26 7.1% 7.3% 7.0% $(2.5) $(2.2) $(2.7) 4Q23 1Q24 2Q24 3Q24 4Q24 AFS AOCI Adjusted for unrealized AFS Securities and Pension
Slide 13: 2025 Outlook
2025 Outlook FY2025 (vs. FY2024) $ in millions, unless otherwise stated 2024 Baseline FY2024 (vs. FY2023) Ranges are shown on an operating basis Average Loans $107.7Bn (9)% down (2 – 5%) Ending Loans $104.3Bn (7)% Flat vs. YE 2024 PE Commercial Loans $71.9Bn (7)% up 2 – 4% up ~20% Net Interest Incom
Slide 14: Net Interest Income Opportunity
Net Interest Income Opportunity Change to NII ($ in millions); Illustrative, not drawn to scale Drivers of Full Year 2025 NII Growth(1) ~20% growth ~$4.6Bn $180 ~$315 ~$3.8Bn Securities 2024 Swap Fixed-rate securities Business growth & FY avg impact of FY24 repositionings & terminations & swaps repr
Slide 15: Appendix
Appendix
Slide 16: Balance Sheet Management Detail
Balance Sheet Management Detail Fixed-rate Asset Repricing Tailwinds – 1Q25 to 2026 Loan Composition(1) $ in billions 1Q25 2Q25 3Q25 4Q25 2025 2026 Other Projected receive-fixed swaps maturities $2.2 $1.3 $0.4 $1.4 $5.2 $9.1 1% 1M Weighted-average rate received (%) 1.42% 2.17% 2.19% 1.96% 1.80% 2.78
Slide 17: Hedging Strategy Opportunity
Hedging Strategy Opportunity 4Q24 ALM Hedge Actions $ in billions; ending balances ▪ Executed $9.3Bn of forward-starting receive-fixed swaps – WA receive rate: 3.7% that become effective over the course of $32.1 2Q25 to 1Q26 $27.2 ▪ Terminated $3.0Bn of accruing pay-fixed swaps in conjunction with t
Slide 18: Credit Quality by Portfolio
Credit Quality by Portfolio Allowance for Credit Losses (ACL) Net Loan Charge-offs(1) to Average Loans (%)(2) $ in millions $1,804 $1,823 $1,833 $1,774 $1,699 1.60% 1.66% 1.71% 1.68% 1.63% 4.50% 0.55% 1.00% 0.43% 0.29% 0.00% 0.00% 4Q23 1Q24 2Q24 3Q24 4Q24 C&I (3), (4) CRE Comm'l Resi Mtg Home Credit
Slide 19: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $ in millions 4Q24 3Q24 4Q23 Tangible common equity to tangible assets at period end Key shareholders’ equity (GAAP) $ 18,176 $ 16,852 $ 14,637 Less: Intangible assets(1) 2,779 2,786 2,806 Preferred stock(2) 2,446 2,446 2,446 Tangible common equity (non-GAAP) $ 12,951
Slide 20: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $ in millions 4Q24 3Q24 4Q23 Return on average tangible common equity from continuing operations Net income (loss) from continuing operations attributable to Key common shareholders (GAAP) $ (279) $ (447) $ 30 Average tangible common equity (non-GAAP) 11,449 10,470 8,
Slide 21: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $ in millions 4Q24 3Q24 4Q23 Adjusted taxable-equivalent revenue Noninterest income (GAAP) $ (196) $ (269) $ 610 Plus: Selected Items(1) 918 918 - Adjusted noninterest income (non-GAAP) $ 722 $ 649 $ 610 Net interest income TE (non-GAAP) 1,061 964 928 Total adjusted t
Slide 22: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $ in millions FY2024 FY2023 Adjusted taxable-equivalent revenue Noninterest income (GAAP) $ 809 $ 2,470 Plus: Selected Items(1) 1,836 - Adjusted noninterest income (non-GAAP) $ 2,645 $ 2,470 Net interest income TE (non-GAAP) 3,810 3,943 Total adjusted taxable-equivale
Slide 23: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation CET1 – AOCI Impact(1) ($ in millions) 4Q23 1Q24 2Q24 3Q24 4Q24 Common Equity Tier 1 (A) $ 14,894 $ 14,821 $ 14,893 $ 15,043 $ 16,563 Add: AFS and Pension accumulated other Comprehensive income (loss) (4,573) (4,608) (4,530) (3,118) (3,032) Adjusted Common Equity Tier
Slide 24: Selected Items Impact on Earnings
Selected Items Impact on Earnings Selected Items Impact on Earnings $ in millions, except per share amounts Pretax(1) After-tax at marginal rate(1) Quarter to date results Amount Net Income EPS(3) Three months ended December 31, 2024 Loss on sale of securities(2) $ (915) $ (657) $ (0.66) Scotiabank
Slide 25: Selected Items Impact on Earnings
Selected Items Impact on Earnings Selected Items Impact on Earnings $ in millions, except per share amounts Pretax(1) After-tax at marginal rate(1) Year to date results Amount Net Income EPS(2,5) Twelve months ended December 31, 2024 Loss on sale of securities $ (1,833) $ (1,394) $ (1.45) Scotiabank
Slide 26: 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