Slide 1: Fourth Quarter 2021 Earnings Review
KeyCorp Fourth Quarter 2021 Earnings Review January 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: 2021: A Record Year
2021: A Record Year Delivering on Commitments with Momentum Across the Franchise Strong consumer execution: record net new Record total revenue: FY21 revenue up 9% vs. 2020 with growth across the franchise household growth and record loan originations of $16Bn (Laurel Road and consumer mortgage)
Slide 4: Financial Review
Financial Review 4
Slide 5: Financial Highlights
Financial Highlights 4Q21 3Q21 4Q20 LQ ∆ Y/Y ∆ Continuing operations, unless otherwise noted EPS – assuming dilution $.64 $ .65 $ .56 (1.5) % 14.3 % Cash efficiency ratio(a) 59.4 % 60.2 % 60.3 % (80) bps (90) bps Profitability Return on average tangible common equity(a) 18.7 18.6 16.6 10 210 Return
Slide 6: Loans
Loans Total Average Loans Highlights $ in billions $110 PPP $102 $99 $2.3Bn of average PPP loans in 4Q21 $100 40.00% $8 $2 $1.5Bn of PPP forgiveness in 4Q21 $90 30% vs. Prior Year 29% $80 30.00% Average loans down 2% from 4Q20 $70 − Commercial balances reflect lower PPP $60 20.00% balances fro
Slide 7: Deposits
Deposits Average Deposits Highlights $ in billions $160 $151 Strong and stable deposit base $136 $140 − 34% noninterest-bearing(a) $120 − ~60% stable retail and low-cost escrow $100 − 69% loan to deposit ratio(b) $80 .23% .06% vs. Prior Year $60 $40 .16% Average deposits up 11% from 4Q20 .04% $2
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 $1,100 4.0% $1,043 $1,038 Net interest income down $5MM from 4Q20 $1,000 3.5% − Largely driven by lower reinvestment yields $900 and the indirect auto
Slide 9: Noninterest Income
Noninterest Income Noninterest Income Highlights vs. Prior Year $ in millions up / (down) 4Q21 vs. 4Q20 vs. 3Q21 Trust and investment services income $ 135 $ 12 $ 6 Noninterest income up $107MM (+13%) from 4Q20 Investment banking and debt placement 323 80 88 − Record fourth quarter of investment b
Slide 10: Noninterest Expense
Noninterest Expense Noninterest Expense Highlights $ in millions favorable / (unfavorable) 4Q21 vs. 4Q20 vs. 3Q21 vs. Prior Year Personnel $ 674 $ (13) $ (34) Noninterest expense up $42MM (+4%) from 4Q20 Net occupancy 75 - (1) Computer processing 73 (11) (6) − Expenses reflect investments across f
Slide 11: Credit Quality
Credit Quality Net Charge-offs & Provision for Credit Losses $ in millions $600 .80% $450 .49% .60% $300 .40% $135 $150 .08% .20% 20 $4 $0 .00% $19 ($150) (.20)% ($300) (.40)% 4Q20 1Q21 2Q21 3Q21 4Q21 NCOs Provision for credit losses NCOs to avg. loans Nonperforming Loans Allowance for Credit Losses
Slide 12: Capital
Capital Common Equity Tier 1(a) Highlights 11.0% Strong capital position: CET1 ratio 9.4%(a) at 12/31/2021 – within targeted range 10.0% 9.7% 9.4% Strong capital return: 9.0% − Increased dividend 5% to $.195 per common share in 4Q21 8.0% − 4Q reflects final settlement of accelerated 7.0% share r
Slide 13: FY2022 Outlook & Long-term Targets
FY2022 Outlook & Long-term Targets FY 2022 (vs. FY 2021) • Loans: up low-double digit excluding the impact of PPP and the indirect auto portfolio sale Average Balance up low-single digit on a reported basis Sheet • Deposits: up low-single digit Net Interest Income • Net interest income: relatively
Slide 14: Appendix
Appendix 14
Slide 15: Commercial Loan Portfolio Detail
Commercial Loan Portfolio Detail Total Commercial Loans Commercial & Industrial (C&I) Solid middle market portfolio $ in billions 12/31/21 % of total loans Aligning bankers to areas of market opportunity and growth - Commercial and industrial $ 50.5 49 investing in strategic hires with industry
Slide 16: Consumer Loan Portfolio Detail
Consumer Loan Portfolio Detail Laurel Road Total Consumer Loans $ in millions Origination Volume $ in billions 12/31/21 % of total WA FICO at $646 loans origination $590 $475 $504 $399 Consumer mortgage $ 15.8 16 762 Home equity C&I 8.5 8 CRE 807 4Q20 1Q21 2Q21 3Q21 4Q21 Consumer direct $40 5.8 $18
Slide 17: Investment Portfolio
Investment Portfolio Average Total Investment Securities Highlights $ in billions Portfolio used for funding and liquidity management $50.3 2.50% $50.0 − Portfolio composed primarily of fixed-rate GNMA and $33.6 GSE-backed MBS and CMOs $40.0 2.00% − 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 significant upside to higher rates 4Q21 Balance Sheet Highlights(a) Actively Managing Interest Rate Risk Position Loan Composition Deposit Mix Modest expos
Slide 19: Credit Quality Trends
Credit Quality Trends Delinquencies to Period-end Total Loans Criticized Outstandings(a) to Period-end Total Loans Continuing operations Continuing operations .80% 6.0% .60% 4.3% 4.0% .40% 2.6% .24% 2.0% .16% .20% .08% .07% .00% .0% 4Q20 1Q21 2Q21 3Q21 4Q21 4Q20 1Q21 2Q21 3Q21 4Q21 30 – 89 days deli
Slide 20: Credit Quality
Credit Quality Credit Quality by Portfolio Net loan Net loan Allowance / Allowance / Period- Average charge-offs(b) / Nonperforming Ending charge- period-end NPLs end loans loans average loans loans allowance offs loans (%) (%) $ in millions (%) 12/31/21 4Q21 4Q21 4Q21 12/31/21 12/31/21 12/31/21 12/
Slide 21: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $ in millions Three months ended 12/31/2021 9/30/2021 12/31/2020 Tangible common equity to tangible assets at period end Key shareholders' equity (GAAP) $ 17,423 $ 17,510 $ 17,981 (a) Less: Intangible assets 2,820 2,814 2,848 (b) Preferred Stock 1,856 1,856 1,856 Tang
Slide 22: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $ in millions Three months ended 12/31/2021 9/30/2021 12/31/2020 Return on average tangible common equity from continuing operations Net income (loss) from continuing operations attributable to Key common shareholders (GAAP) $ 601 $ 616 $ 549 Average tangible common e