Slide 1: First Quarter 2009 Review
First Quarter 2009 Review April 21, 2009 Speakers: Henry Meyer Jeff Weeden
Slide 2: Private Securities Litigation Reform Act of 1995 Forward-Looking Statement Disclosure
2 PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 FORWARD-LOOKING STATEMENT DISCLOSURE This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about our financial condition, results of operations, earning
Slide 3: First Quarter 2009 Strategic Update
3 Continued to build loan loss reserve Maintained strong capital position Intention to reduce quarterly common dividend to $0.01 per share Continued focus on strategic allocation of capital Originated $7.8 billion of new or renewed loans and commitments Investing in the Community Bank to build relat
Slide 4: Financial Summary - First Quarter 2009
4 Financial Summary-First Quarter 2009 (a) 03-31-09 ratios are estimated. Net loss per common share $ (1.09) Significant Items Included in Net Loss Provision for loan losses in excess of net charge-offs $ (.49) Noncash charge for intangible assets impairment (.38) Net (losses) from principal investi
Slide 5: Net Interest Margin, Net Interest Spread and Net Interest Income
5 Net Interest Margin Net Interest Spread Net Interest Income 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Net Interest Income 689 692 716 722 726 726 744 700 706 712 750 738.4 738 705 664 619.6 Net Interest Spread 0.0319 0.0309 0.0306 0.0305 0.0296 0.0285 0.0285 0
Slide 6: Average Loans by Portfolio
6 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Exit Portfolios 8.3 8.7 8.2 10.7 9.9 9.6 9.3 Other Consumer 3.3 2.9 3.3 3.987 4.023 4 3.8 Home Equity 9.7 9.7 9.7 9.8 9.9 10 10.3 Other Commercial 10.2 10.3 10 9.8 9.6 9.2 8.8 CRE - Construction 17.142 15.3 7 6.9 6.8 6.8 6.6 CRE - Comml Mtg 17.142 15.3 10.2 10.6
Slide 7: Average Deposits
7 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Foreign Deposits 5.721 5.9 4.121 2.761 1.3 CD's > $100K 6.888 8.072 8.67 9.506 11.3 12.5 CD's < $100K 11.454 12.7 12.7 13.1 14.5 14.7 Savings 1.5 1.9 1.8 1.8 1.7 1.7 NOW/Money Market 25.7 27 27.7 26.7 24.9 24 DDA 12.9 10.7 10.6 10.7 10.9 11.2 Total 58.5 60.4 61 61.8 6
Slide 8: Nonperforming Asset Trends and Asset Quality
8 Nonperforming Asset Trends 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Key 0.0144 0.0143 0.0144 0.0142 0.0138 0.0169 0.017 0.0187 0.0203 0.0236 0.0297 Peer Median 0.0106 0.0106 0.0108 0.0107 0.0109 0.0121 0.0143 0.0162 0.0169 0.0204 Allowance to Period-End Loans 3Q06 4Q06 1Q07 2Q07 3Q07
Slide 9: Credit Quality by Portfolio - 1Q09
9 Credit Quality by Portfolio-1Q09 (a) Net charge-off amounts are annualized in calculation. (b) 03-31-09 allowance by Portfolio is estimated. N/M = Not Meaningful $ in millions Period-end loans Average loans 3/31/09 1Q09 1Q09 4Q08 3/31/09 12/31/08 Commercial, financial and agricultural $25,405 $26,
Slide 10: Commercial Real Estate Loans
10 Commercial Real Estate Loans March 31, 2009 $ in millions (a) Nonresidential land and development loans N/M = Not Meaningful Geographic Region % of Commercial West Southwest Central Midwest Southeast Northeast Total Total CRE Mortgage Construction Nonowner-occupied: Retail properties $478 $234 $3
Slide 11: Exit Loan Portfolio
11 Exit Loan Portfolio $ in millions, period-end data Total exit portfolio loans represent 12.1% of total loans and loans held for sale at March 31, 2009. Net charge-offs on exit portfolio loans represented 28.3% of total net charge-offs for the 1st quarter. Exit portfolio nonperforming assets repre
Slide 12: Capital Ratios: Risk-Based Capital and Tangible Equity
12 10.00% 6.00% 1Q08 2Q08 3Q08 4Q08 1Q09 Common 0.0583 0.056 0.0558 0.0562 0.0559 Convertible 0.0059 0.006 0.0062 0.0065 TARP 0.0226 0.0238 Qualifying capital securities 0.025 0.0235 0.0237 0.0242 0.0254 Allowance for Loan losses 0.0122 0.0126 0.0126 0.0126 0.0127 Qualifying LTD 0.0279 0.0261 0.0259
Slide 13: Appendix
13 Appendix
Slide 14: Geographically Diverse Community Banking
14 Great Lakes Core Deposits: 33% Commercial Loans: 29% Home Equity Loans: 29% Northwest/Rocky Mtn Core Deposits: 32% Commercial Loans: 42% Home Equity Loans: 44% Northeast Core Deposits: 31% Commercial Loans: 21% Home Equity Loans: 26% Note: Percentages are based on quarterly average balances and e
Slide 15: Community Banking Summary of Operations
15 TE = Taxable Equivalent; N/A = Not Applicable Community Banking Summary of Operations $ in millions Percent Change 1Q09 vs. 1Q09 4Q08 1Q08 4Q08 1Q08 Total revenue (TE) $604 $645 $629 (6.4) % (4.0) % Provision for loan losses 81 102 18 (20.6) 350.0 Noninterest expense 470 476 425 (1.3) 10.6 Net in
Slide 16: Community Banking Supplementary Information (Lines of Business)
16 Community Banking Supplementary Information (Lines of Business) $ in millions TE = Taxable Equivalent; N/A = Not Applicable Percent Change 1Q09 vs. 1Q09 4Q08 1Q08 4Q08 1Q08 Regional Banking Total revenue (TE) $511 $555 $528 (7.9) % (3.2) % Provision for loan losses 69 80 9 (13.8) 666.7 Noninteres
Slide 17: National Banking Summary of Operations
17 National Banking Summary of Operations (a) National Banking's results for the first quarter of 2009 and the fourth quarter of 2008 include noncash charges for intangible assets impairment of $223 million ($187 million after tax) and $465 million ($420 million after tax), respectively. $ in millio
Slide 18: National Banking Supplementary Information (Lines of Business)
18 National Banking Supplementary Information (Lines of Business) $ in millions TE = Taxable Equivalent; N/M = Not Meaningful; N/A = Not Applicable Percent Change 1Q09 vs. 1Q09 4Q08 1Q08 4Q08 1Q08 Real Estate Capital and Corporate Banking Total revenue (TE) $171 $162 $83 5.6 % 106.0 % Provision for
Slide 19: National Banking Supplementary Information (Lines of Business)
19 National Banking Supplementary Information (Lines of Business) $ in millions TE = Taxable Equivalent; N/M = Not Meaningful; N/A = Not Applicable Percent Change 1Q09 vs. 1Q09 4Q08 1Q08 4Q08 1Q08 Institutional and Capital Markets Total revenue (TE) $176 $200 $160 (12.0) % 10.0 % Provision for loan
Slide 20: Average Loans
20 Average Loans $ in millions (a) In late March 2009, Key moved $1.474 billion of loans from the construction portfolio to the commercial mortgage portfolio in accordance with regulatory guidelines pertaining to the classification of loans that have reached a completed status. Percent Change 1Q09 v
Slide 21: Home Equity Loans
21 Home Equity Loans March 31, 2009 $ in millions, period-end data Vintage (% of Loans) Loan Balances Average Loan Size ($) Average FICO Average LTV % of Loans LTV>90% 2009 2008 2007 2006 2005 and prior Regional Banking Home Equity loans and lines First Lien 5,477 $ 56,707 $ 747 66 % ..6 % 7 % 14 %
Slide 22: Residential Properties: $1.84 Billion Commercial Real Estate
Residential Properties: $1.84 Billion Commercial Real Estate March 31, 2009 22 $ in millions Loan Balances Condo $132 $14 $8 $40 $270 $122 $586 $54 $171 Land, Acquisition & Development 281 58 108 56 119 188 810 110 57 1-4, Single Family 163 1 117 49 80 33 443 72 43 Residential properties $576 $73 $2
Slide 23: Retail Properties: $2.86 Billion Commercial Real Estate
Retail Properties: $2.86 Billion Commercial Real Estate March 31, 2009 23 $ in millions Loan Balances Power Center $175 $91 $201 $495 $227 $108 $1,297 $92 $154 Community Center 85 53 6 67 134 4 349 43 55 Regional Mall 74 59 104 58 87 3 385 24 - - Single Tenant 51 28 10 82 87 48 306 8 19 Strip Center
Slide 24: Net Charge-Offs to Average Loans
24 Net Charge-Offs to Average Loans 1Q09 4Q08 3Q08 2Q08 1Q08 Commercial, financial and agricultural 3.56 % 1.71 % ..94 % ..94 % ..57 % Real estate - commercial mortgage ..78 1.60 ..74 ..57 ..16 Real estate - construction 5.62 2.54 4.03 16.07 1.19 Commercial lease financing ..83 ..91 ..79 ..57 ..36 T
Slide 25: Nonperforming Assets
25 Nonperforming Assets (a) Primarily investments held by the Private Equity unit within Key's Real Estate Capital and Corporate Banking Services line of business. (b) During the second quarter of 2008, Key transferred $384 million of commercial real estate loans ($719 million of primarily construct
Slide 26: Commercial Portfolio Average Loans, NCOs and NPLs
26 Commercial Portfolio Average Loans, NCOs and NPLs $ in millions Regional Banking Commercial Banking Real Estate Capital & Corp. Bank Srvs. Equipment Finance Institutional & Capital Markets Consumer Finance Total Average Loans Commercial, financial and agricultural $3,663 $5,607 $4,734 $2,139 $7,8
Slide 27: Loans Held for Sale: Residential Properties - Construction Loan Portfolio
27 Loans Held for Sale Residential Properties - Construction Loan Portfolio $ in millions Balance at June 30, 2008 $ 340 Cash proceeds from loan sales (135) Loans Transferred to OREO (35) Realized and unrealized losses (31) Payments (6) Balance at September 30, 2008 133 Cash proceeds from loan sales