EX-99.1

EX-99.1 2 d291273dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

LOGO

KEYCORP REPORTS SECOND QUARTER 2022 NET INCOME OF $504 MILLION,

OR $.54 PER DILUTED COMMON SHARE

Positive operating leverage compared to the prior quarter and year-ago period

Revenue up 6% from the prior quarter, driven by growth in net interest income

Strong loan growth across commercial and consumer businesses

Credit quality remains strong with net charge-offs to average loans of 16 basis points

Expanded Laurel Road’s offering for healthcare professionals and completed acquisition of GradFin

CLEVELAND, July 21, 2022 - KeyCorp (NYSE: KEY) today announced net income from continuing operations attributable to Key common shareholders of $504 million, or $.54 per diluted common share for the second quarter of 2022. This compared to $420 million, or $.45 per diluted common share, for the first quarter of 2022 and $698 million, or $.72 per diluted common share, for the second quarter of 2021.

“Key’s second quarter results demonstrate the strength and resiliency of both our business model and our team, while navigating dynamic market conditions. We remain well positioned to support our clients through the economic cycle.

This quarter, we continued to gain market share and deepen client relationships in both our commercial and consumer businesses, resulting in strong loan growth across our franchise. Additionally, we expanded Laurel Road’s targeted offering to nurses and completed the acquisition of GradFin, a leading loan counselor for healthcare professionals.

The quality of our balance sheet continues to be a strength, as we focus on delivering sound, profitable growth. Credit quality remains strong, supported by our strong risk culture and disciplined underwriting practices.

We delivered positive operating leverage. Further, we remain confident in our ability to make continued progress against our long-term financial targets and to deliver value for all of our stakeholders.”

- Chris Gorman, Chairman and CEO

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 2

Selected Financial Highlights


Dollars in millions, except per share data										Change 2Q22 vs.
	2Q22			1Q22			2Q21			1Q22			2Q21
Income (loss) from continuing operations attributable to Key common shareholders	$	504		$	420		$	698			20.0	%		(27.8	)%
Income (loss) from continuing operations attributable to Key common shareholders per common share — assuming dilution		.54			.45			.72			20.0			(25.0	)
Return on average tangible common equity from continuing operations ^(a)		20.90	%		14.12	%		21.34	%		N	/A		N	/A
Return on average total assets from continuing operations		1.16			.99			1.63			N	/A		N	/A
Common Equity Tier 1 ratio ^(b)		9.2			9.4			9.9			N	/A		N	/A
Book value at period end	$	13.48		$	14.43		$	16.75			(6.6	)		(19.5	)
Net interest margin (TE) from continuing operations		2.61	%		2.46	%		2.52	%		N	/A		N	/A

(a)

The table entitled “GAAP to Non-GAAP Reconciliations” in the attached financial supplement presents the computations of certain financial measures related to “Return on average tangible common equity from continuing operations.” The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.

(b)	June 30, 2022 ratio is estimated.

TE = Taxable Equivalent, N/A = Not Applicable

INCOME STATEMENT HIGHLIGHTS

Revenue


Dollars in millions							Change 2Q22 vs.
	2Q22		1Q22		2Q21		1Q22			2Q21
Net interest income (TE)	$	1,104	$	1,020	$	1,023		8.2	%		7.9	%
Noninterest income		688		676		750		1.8			(8.3)

Total revenue	$	1,792	$	1,696	$	1,773		5.7	%		1.1	%

TE = Taxable Equivalent

Taxable-equivalent net interest income was $1.1 billion for the second quarter of 2022 and the net interest margin was 2.61%. Compared to the second quarter of 2021, net interest income increased $81 million and the net interest margin increased by nine basis points. Net interest income and the net interest margin benefited from higher earning asset balances, a favorable balance sheet mix, and higher interest rates. Net interest income and the net interest margin were negatively impacted by the exit of the indirect auto loan portfolio and lower loan fees from the Paycheck Protection Program (“PPP”).

Compared to the first quarter of 2022, taxable-equivalent net interest income increased by $84 million and the net interest margin increased by 15 basis points. Net interest income and the net interest margin benefited from a favorable balance sheet mix and higher interest rates, partly offset by lower loan fees related to the PPP and higher interest-bearing deposit costs. Net interest income also benefited from one additional day in the quarter.

Noninterest Income


Dollars in millions								Change 2Q22 vs.
	2Q22		1Q22			2Q21		1Q22			2Q21
Trust and investment services income	$	137	$	136		$	133		.7	%		3.0	%
Investment banking and debt placement fees		149		163			217		(8.6)			(31.3)
Service charges on deposit accounts		96		91			83		5.5			15.7
Operating lease income and other leasing gains		28		32			36		(12.5)			(22.2)
Corporate services income		88		90			55		(2.2)			60.0
Cards and payments income		85		80			113		6.3			(24.8)
Corporate-owned life insurance income		35		31			30		12.9			16.7
Consumer mortgage income		14		21			26		(33.3)			(46.2)
Commercial mortgage servicing fees		45		36			44		25.0			2.3
Other income		11		(4	)		13		375.0			(15.4)

Total noninterest income	$	688	$	676		$	750		1.8	%		(8.3)	%

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 3

Compared to the second quarter of 2021, noninterest income decreased by $62 million. The decrease was largely due to investment banking and debt placement fees, down $68 million, reflecting a slowdown in capital markets activity. Other drivers for the decrease include cards and payments income and consumer mortgage income, down $28 million and $12 million, respectively. Cards and payments income decreased as a result of lower levels of prepaid card activity. Consumer mortgage income decreased reflecting higher balance sheet retention as well as lower gain on sale margins. Partially offsetting the decrease was a $33 million increase in corporate services income, due to higher derivatives trading income.

Compared to the first quarter of 2022, noninterest income increased by $12 million. The primary drivers were other income, which increased $15 million, reflecting market-related adjustments in the prior quarter and commercial mortgage servicing, up $9 million, as a result of higher special servicing fees. Partially offsetting the increase was a $14 million decrease in investment banking and debt placement fees, related to a slowdown in capital markets activity.

Noninterest Expense


Dollars in millions							Change 2Q22 vs.
	2Q22		1Q22		2Q21		1Q22			2Q21
Personnel expense	$	607	$	630	$	623		(3.7	)%		(2.6	)%
Nonpersonnel expense		471		440		453		7.0			4.0

Total noninterest expense	$	1,078	$	1,070		1,076		.7	%		.2	%

Key’s noninterest expense was $1.1 billion for the second quarter of 2022, an increase of $2 million from the year-ago period. Nonpersonnel expense increased $18 million, including an increase in other expense, due to higher travel and entertainment, as well as an increase in computer processing expense. Personnel expense decreased $16 million, driven by lower incentive and stock-based compensation, reflecting lower production related incentives, partially offset by an increase in salaries and contract labor, as a result of higher merit increases and technology contract labor.

Compared to the first quarter of 2022, noninterest expense increased $8 million. The increase was driven by nonpersonnel expense, which increased $31 million, largely due to higher other expense, reflecting increased travel and entertainment. Other contributing factors for the linked quarter increase include higher marketing expense and net occupancy expense. Partially offsetting the linked quarter increase was a $23 million decrease in personnel expense. The decrease was related to lower incentive and stock-based compensation as a result of lower production-related incentives and lower employee benefits expense.

BALANCE SHEET HIGHLIGHTS

Average Loans


Dollars in millions							Change 2Q22 vs.
	2Q22		1Q22		2Q21		1Q22			2Q21
Commercial and industrial ^(a)	$	53,858	$	51,574	$	51,808		4.4	%		4.0	%
Other commercial loans		21,173		20,556		19,034		3.0			11.2
Total consumer loans		34,107		31,632		29,972		7.8			13.8

Total loans	$	109,138	$	103,762	$	100,814		5.2	%		8.3	%

(a)	Commercial and industrial average loan balances include $153 million, $141 million, and $132 million of assets from commercial credit cards at June 30, 2022, March 31, 2022, and June 30, 2021, respectively.

Average loans were $109.1 billion for the second quarter of 2022, an increase of $8.3 billion compared to the second quarter of 2021. Commercial loans increased by $4.2 billion, reflecting strength in commercial mortgage real estate loans and core commercial and industrial loans, which mitigated the impact of a $6.8 billion decline in PPP balances. Consumer loans increased $4.1 billion, due to strength from Key’s consumer mortgage business and Laurel Road, partly offset by the sale of the indirect auto loan portfolio.

Compared to the first quarter of 2022, average loans increased by $5.4 billion. Commercial loans increased $2.9 billion, reflecting strength in commercial and industrial loans and commercial mortgage real estate loans. Consumer loans increased $2.5 billion, driven by continued strength in Key’s consumer mortgage business and Laurel Road.

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 4

Average Deposits


Dollars in millions										Change 2Q22 vs.
	2Q22			1Q22			2Q21			1Q22			2Q21
Non-time deposits		$144,012			$146,426			$139,480			(1.6	)%		3.2	%
Certificates of deposit ($100,000 or more)		1,487			1,639			2,212			(9.3	)		(32.8	)
Other time deposits		1,972			2,098			2,630			(6.0	)		(25.0	)

Total deposits		$147,471			$150,163			$144,322			(1.8	)%		2.2	%


Cost of total deposits		.06	%		.04	%		.05	%		N	/A		N	/A

N/A = Not Applicable

Average deposits totaled $147.5 billion for the second quarter of 2022, an increase of $3.1 billion compared to the year-ago quarter. The increase reflects growth from consumer and commercial relationships, including higher commercial escrow and retail deposits, partially offset by a decline in time deposits.

Compared to the first quarter of 2022, average deposits decreased by $2.7 billion, largely reflecting seasonal commercial outflows and public sector deposit outflows related to stimulus funds.

ASSET QUALITY


Dollars in millions										Change 2Q22 vs.
	2Q22			1Q22			2Q21			1Q22			2Q21
Net loan charge-offs	$	44		$	33		$	22			33.3	%		100.0	%
Net loan charge-offs to average total loans		.16	%		.13	%		.09	%		N	/A		N	/A
Nonperforming loans at period end	$	429		$	439		$	694			(2.3	)		(38.2	)
Nonperforming assets at period end		463			467			738			(0.9	)		(37.3	)
Allowance for loan and lease losses		1,099			1,105			1,220			(0.5	)		(9.9	)
Allowance for credit losses		1,272			1,271			1,372			0.1			(7.3	)
Provision for credit losses		45			83			(222	)		(45.8	)		120.3

Allowance for loan and lease losses to nonperforming loans		256.2	%		251.7	%		175.8	%		N	/A		N	/A
Allowance for credit losses to nonperforming loans		296.5			289.5			197.7			N	/A		N	/A

N/A = Not Applicable

Key’s provision for credit losses was $45 million, compared to a net benefit of $222 million in the second quarter of 2021 and provision of $83 million in the first quarter of 2022.

Net loan charge-offs for the second quarter of 2022 totaled $44 million, or .16% of average total loans. These results compare to $22 million, or .09%, for the second quarter of 2021 and $33 million, or .13%, for the first quarter of 2022. Key’s allowance for credit losses was $1.3 billion, or 1.13% of total period-end loans at June 30, 2022, compared to 1.36% at June 30, 2021, and 1.19% at March 31, 2022.

At June 30, 2022, Key’s nonperforming loans totaled $429 million, which represented .38% of period-end portfolio loans. These results compare to .69% at June 30, 2021, and .41% at March 31, 2022. Nonperforming assets at June 30, 2022, totaled $463 million, and represented .41% of period-end portfolio loans and OREO and other nonperforming assets. These results compare to .73% at June 30, 2021, and .44% at March 31, 2022.

CAPITAL

Key’s estimated risk-based capital ratios included in the following table continued to exceed all “well-capitalized” regulatory benchmarks at June 30, 2022.

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 5

Capital Ratios


	6/30/2022			3/31/2022			6/30/2021
Common Equity Tier 1 ^(a)		9.2	%		9.4	%		9.9	%
Tier 1 risk-based capital ^(a)		10.4			10.7			11.3
Total risk based capital ^(a)		12.0			12.4			13.2
Tangible common equity to tangible assets ^(b)		5.3			6.0			7.4
Leverage ^(a)		8.8			8.6			8.7

(a)	June 30, 2022 ratio is estimated and reflects Key’s election to adopt the CECL optional transition provision.

(b)

The table entitled “GAAP to Non-GAAP Reconciliations” in the attached financial supplement presents the computations of certain financial measures related to “tangible common equity.” The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.

Key’s capital position remained strong in the second quarter of 2022. As shown in the preceding table, at June 30, 2022, Key’s estimated Common Equity Tier 1 and Tier 1 risk-based capital ratios stood at 9.2% and 10.4%, respectively. Key’s tangible common equity ratio was 5.3% at June 30, 2022.

Key elected the CECL phase-in option provided by regulatory guidance which delayed for two years the estimated impact of CECL on regulatory capital and phases it in over three years beginning in 2022. Effective for the first quarter 2022, Key is now in the three-year transition period. On a fully phased-in basis, Key’s Common Equity Tier 1 ratio would be reduced by 12 basis points.

Summary of Changes in Common Shares Outstanding


In thousands										Change 2Q22 vs.
	2Q22			1Q22			2Q21			1Q22			2Q21
Shares outstanding at beginning of period		932,398			928,850			972,587			.4	%		(4.1	)%
Open market repurchases, repurchases under the accelerated repurchase program, and return of shares under employee compensation plans		(24	)		(1,707	)		(13,304	)		(98.6	)		(99.8	)
Shares issued under employee compensation plans (net of cancellations)		269			5,255			993			(94.9	)		(72.9	)

Shares outstanding at end of period		932,643			932,398			960,276			—	%		(2.9	)%

During the second quarter of 2022, Key declared a dividend of $.195 per common share.

LINE OF BUSINESS RESULTS

The following table shows the contribution made by each major business segment to Key’s taxable-equivalent revenue from continuing operations and income (loss) from continuing operations attributable to Key for the periods presented. For more detailed financial information pertaining to each business segment, see the tables at the end of this release.

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 6

Major Business Segments


Dollars in millions							Change 2Q22 vs.
	2Q22		1Q22		2Q21		1Q22			2Q21
Revenue from continuing operations (TE)
Consumer Bank	$	824	$	799	$	852		3.1	%		(3.3	)%
Commercial Bank		844		810		871		4.2			(3.1	)
Other ^(a)		124		87		50		42.5			148.0

Total	$	1,792	$	1,696	$	1,773		5.7	%		1.1	%


Income (loss) from continuing operations attributable to Key
Consumer Bank	$	107	$	70	$	257		52.9	%		(58.4	)%
Commercial Bank		315		283		432		11.3			(27.1	)
Other ^(a)		108		94		35		14.9			208.6

Total	$	530	$	447	$	724		18.6	%		(26.8	)%

(a)

Other includes other segments that consists of corporate treasury, our principal investing unit, and various exit portfolios as well as reconciling items which primarily represents the unallocated portion of nonearning assets of corporate support functions. Charges related to the funding of these assets are part of net interest income and are allocated to the business segments through noninterest expense. Reconciling items also includes intercompany eliminations and certain items that are not allocated to the business segments because they do not reflect their normal operations.

TE = Taxable Equivalent

Consumer Bank


Dollars in millions								Change 2Q22 vs.
	2Q22		1Q22		2Q21			1Q22			2Q21
Summary of operations
Net interest income (TE)	$	570	$	543	$	599			5.0	%		(4.8	)%
Noninterest income		254		256		253			(.8	)		.4
Total revenue (TE)		824		799		852			3.1			(3.3	)
Provision for credit losses		8		43		(70	)		(81.4	)		111.4
Noninterest expense		676		663		584			2.0			15.8
Income (loss) before income taxes (TE)		140		93		338			50.5			(58.6	)
Allocated income taxes (benefit) and TE adjustments		33		23		81			43.5			(59.3	)
Net income (loss) attributable to Key	$	107	$	70	$	257			52.9	%		(58.4	)%


Average balances
Loans and leases	$	40,818	$	38,637	$	40,598			5.6	%		.5	%
Total assets		43,868		41,814		43,818			4.9			.1
Deposits		91,256		91,468		88,412			(.2	)		3.2

Assets under management at period end	$	49,003	$	53,707	$	51,013			(8.8	)%		(3.9	)%

TE = Taxable Equivalent

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 7

Additional Consumer Bank Data


Dollars in millions							Change 2Q22 vs.
	2Q22		1Q22		2Q21		1Q22			2Q21
Noninterest income
Trust and investment services income	$	104	$	106	$	104		(1.9	)%		—	%
Service charges on deposit accounts		59		54		48		9.3			22.9
Cards and payments income		62		57		62		8.8			—
Consumer mortgage income		14		21		26		(33.3	)		(46.2	)
Other noninterest income		15		18		13		(16.7	)		15.4

Total noninterest income	$	254	$	256	$	253		(.8	)%		.4	%


Average deposit balances
NOW and money market deposit accounts	$	57,884	$	58,625	$	56,038		(1.3	)%		3.3	%
Savings deposits		7,515		7,233		6,523		3.9			15.2
Certificates of deposit ($100,000 or more)		1,375		1,520		2,083		(9.5	)		(34.0	)
Other time deposits		1,966		2,090		2,616		(5.9	)		(24.8	)
Noninterest-bearing deposits		22,516		22,000		21,152		2.3			6.4

Total deposits	$	91,256	$	91,468	$	88,412		(.2	)%		3.2	%


Other data
Branches		978		993		1,014
Automated teller machines		1,284		1,308		1,329

Consumer Bank Summary of Operations (2Q22 vs. 2Q21)

•

Net income attributable to Key of $107 million for the second quarter of 2022, compared to $257 million for the year-ago quarter

•

Taxable-equivalent net interest income decreased by $29 million, compared to the second quarter of 2021, related to the sale of the indirect auto portfolio, partially offset by strong consumer mortgage and Laurel Road balance sheet growth

•

Average loans and leases increased $220 million, or 0.5%, from the second quarter of 2021, driven by growth in consumer mortgage and Laurel Road, largely offset by the sale of the indirect auto loan portfolio

•

Average deposits increased $2.8 billion, or 3.2%, from the second quarter of 2021, driven by higher retail deposits

•

Provision for credit losses increased $78 million, compared to the second quarter of 2021, due to a reserve release in the year-ago quarter as uncertainty caused by the pandemic subsided

•

Noninterest income increased $1 million, or 0.4%, from the year-ago quarter, driven by an increase in service charges on deposit accounts, partially offset by a decline in consumer mortgage income, reflecting lower gain on sale margins and higher balance sheet retention

•

Noninterest expense increased $92 million, or 15.8%, from the year-ago quarter, driven by higher salary and employee benefits expense, as well as investments in digital, security, and fraud

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 8

Commercial Bank


Dollars in millions									Change 2Q22 vs.
	2Q22		1Q22			2Q21			1Q22			2Q21
Summary of operations
Net interest income (TE)	$	440	$	415		$	417			6.0	%		5.5	%
Noninterest income		404		395			454			2.3			(11.0)

Total revenue (TE)		844		810			871			4.2			(3.1)
Provision for credit losses		37		41			(131	)		9.8			128.2
Noninterest expense		414		417			451			(.7)			(8.2)

Income (loss) before income taxes (TE)		393		352			551			11.6			(28.7)
Allocated income taxes and TE adjustments		78		69			119			13.0			(34.5)

Net income (loss) attributable to Key	$	315	$	283		$	432			11.3	%		(27.1)	%


Average balances
Loans and leases	$	67,834	$	64,701		$	59,953			4.8	%		13.1	%
Loans held for sale		1,016		1,323			1,341			(23.2)			(24.2)
Total assets		78,824		74,860			69,101			5.3			14.1
Deposits		54,864		57,289			54,814			(4.2)	%		0.1	%

TE = Taxable Equivalent Additional Commercial Bank Data

Dollars in millions									Change 2Q22 vs.
	2Q22		1Q22			2Q21			1Q22			2Q21
Noninterest income
Trust and investment services income	$	33	$	30		$	27			10.0	%		22.2 %
Investment banking and debt placement fees		149		163			215			(8.6)			(30.7)
Operating lease income and other leasing gains		27		32			35			(15.6)			(22.9)
Corporate services income		80		82			47			(2.4)			70.2
Service charges on deposit accounts		36		36			34			—			5.9
Cards and payments income		23		22			49			4.5			(53.1)

Payments and services income		139		140			130			(0.7)			6.9

Commercial mortgage servicing fees		45		36			44			25.0			2.3
Other noninterest income		11		(6	)		3			283.3			266.7

Total noninterest income	$	404	$	395		$	454			2.3	%		(11.0)%

Commercial Bank Summary of Operations (2Q22 vs. 2Q21)

•

Net income attributable to Key of $315 million for the second quarter of 2022, compared to $432 million for the year-ago quarter

•

Taxable-equivalent net interest income increased by $23 million, compared to the second quarter of 2021, reflecting core loan growth in commercial and industrial loans and commercial mortgage real estate loans and higher interest rates, partially offset by lower loan fees from the PPP

•

Average loan and lease balances increased $7.9 billion, compared to the second quarter of 2021, reflecting growth in core commercial and industrial loans and commercial mortgage real estate loans, partially offset by a decline in PPP balances

•

Average deposit balances increased $50 million, or 0.1%, compared to the second quarter of 2021, driven by growth in targeted relationships and higher commercial escrow deposits, partially offset by outflows in interest-bearing deposits

•

Provision for credit losses increased $168 million, compared to the second quarter of 2021, due to a reserve release in the year-ago period as uncertainty caused by the pandemic subsided

•

Noninterest income decreased $50 million from the year-ago quarter, driven by lower investment banking and debt placement fees and lower cards and payments income, partially offset by an increase in corporate services income

•

Noninterest expense decreased $37 million, or 8.2%, from the second quarter of 2021, driven by lower incentive compensation, reflecting a decrease in investment banking and debt placement fees

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 9

*******************************************

KeyCorp’s roots trace back nearly 200 years to Albany, New York. Headquartered in Cleveland, Ohio, Key is one of the nation’s largest bank-based financial services companies, with assets of approximately $187.0 billion at June 30, 2022.

Key provides deposit, lending, cash management, and investment services to individuals and businesses in 15 states under the name KeyBank National Association through a network of approximately 1,000 branches and approximately 1,300 ATMs. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name. For more information, visit https://www.key.com/. KeyBank is Member FDIC.

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 10


CONTACTS:

ANALYSTS		MEDIA

Vernon L. Patterson		Susan Donlan

216.689.0520		216.471.3133

Vernon_Patterson@KeyBank.com		Susan_E_Donlan@KeyBank.com

Melanie S. Kaiser		Beth Strauss

216.689.4545		216.471.2787

Melanie_S_Kaiser@KeyBank.com		Beth_A_Strauss@KeyBank.com

Halle A. Nichols		Twitter: @keybank

216.471.2184

Halle_A_Nichols@KeyBank.com

INVESTOR RELATIONS:		KEY MEDIA NEWSROOM:

www.key.com/ir		www.key.com/newsroom

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements do not relate strictly to historical or current facts. Forward-looking statements usually can be identified by the use of words such as “goal,” “objective,” “plan,” “expect,” “assume,” “anticipate,” “intend,” “project,” “believe,” “estimate,” or other words of similar meaning. Forward-looking statements provide our current expectations or forecasts of future events, circumstances, results, or aspirations. Forward-looking statements, by their nature, are subject to assumptions, risks and uncertainties, many of which are outside of our control. Our actual results may differ materially from those set forth in our forward-looking statements. There is no assurance that any list of risks and uncertainties or risk factors is complete. Factors that could cause Key’s actual results to differ from those described in the forward-looking statements can be found in KeyCorp’s Form 10-K for the year ended December 31, 2021, as well as in KeyCorp’s subsequent SEC filings, all of which have been or will be filed with the Securities and Exchange Commission (the “SEC”) and are or will be available on Key’s website (www.key.com/ir) and on the SEC’s website (www.sec.gov). These factors may include, among others, deterioration of commercial real estate market fundamentals, adverse changes in credit quality trends, declining asset prices, a worsening of the U.S. economy due to financial, political, or other shocks, the extensive regulation of the U.S. financial services industry, and the impact of the COVID-19 global pandemic on us, our clients, our third-party service providers, and the markets. Any forward-looking statements made by us or on our behalf speak only as of the date they are made and we do not undertake any obligation to update any forward-looking statement to reflect the impact of subsequent events or circumstances.

Notes to Editors:

A live Internet broadcast of KeyCorp’s conference call to discuss quarterly results and currently anticipated earnings trends and to answer analysts’ questions can be accessed through the Investor Relations section at https://www.key.com/ir at 8:00 a.m. ET, on July 21, 2022. A replay of the call will be available through July 30, 2022.

For up-to-date company information, media contacts, and facts and figures about Key’s lines of business, visit our Media Newsroom at https://www.key.com/newsroom.

*****

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 11

KeyCorp

Second Quarter 2022

Financial Supplement


Page

12		Financial Highlights

14		GAAP to Non-GAAP Reconciliation

16		Consolidated Balance Sheets

17		Consolidated Statements of Income

18		Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations

20		Noninterest Expense

20		Personnel Expense

21		Loan Composition

21		Loans Held for Sale Composition

21		Summary of Changes in Loans Held for Sale

22		Summary of Loan and Lease Loss Experience From Continuing Operations

23		Asset Quality Statistics From Continuing Operations

23		Summary of Nonperforming Assets and Past Due Loans From Continuing Operations

23		Summary of Changes in Nonperforming Loans From Continuing Operations

24		Line of Business Results

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 12

Financial Highlights

(Dollars in millions, except per share amounts)


	Three months ended
	6/30/2022			3/31/2022			6/30/2021
Summary of operations
Net interest income (TE)	$	1,104		$	1,020		$	1,023
Noninterest income		688			676			750
Total revenue (TE)		1,792			1,696			1,773
Provision for credit losses		45			83			(222	)
Noninterest expense		1,078			1,070			1,076
Income (loss) from continuing operations attributable to Key		530			447			724
Income (loss) from discontinued operations, net of taxes		3			1			5
Net income (loss) attributable to Key		533			448			729

Income (loss) from continuing operations attributable to Key common shareholders		504			420			698
Income (loss) from discontinued operations, net of taxes		3			1			5
Net income (loss) attributable to Key common shareholders		507			421			703

Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	.54		$	.45		$	.73
Income (loss) from discontinued operations, net of taxes		—			—			—
Net income (loss) attributable to Key common shareholders ^(a)		.55			.46			.73

Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution		.54			.45			.72
Income (loss) from discontinued operations, net of taxes — assuming dilution		—			—			—
Net income (loss) attributable to Key common shareholders — assuming dilution ^(a)		.54			.45			.73

Cash dividends declared		.195			.195			.185
Book value at period end		13.48			14.43			16.75
Tangible book value at period end		10.40			11.41			13.81
Market price at period end		17.23			22.38			20.65

Performance ratios

From continuing operations:
Return on average total assets		1.16	%		.99	%		1.63	%
Return on average common equity		16.17			11.45			17.54
Return on average tangible common equity ^(b)		20.90			14.12			21.34
Net interest margin (TE)		2.61			2.46			2.52
Cash efficiency ratio ^(b)		59.5			62.4			59.9

From consolidated operations:
Return on average total assets		1.16	%		.99	%		1.64	%
Return on average common equity		16.27			11.47			17.67
Return on average tangible common equity ^(b)		21.03			14.15			21.49
Net interest margin (TE)		2.60			2.46			2.55
Loan to deposit ^(c)		78.3			72.9			70.4

Capital ratios at period end
Key shareholders’ equity to assets		7.7	%		8.5	%		9.9	%
Key common shareholders’ equity to assets		6.7			7.4			8.9
Tangible common equity to tangible assets ^(b)		5.3			6.0			7.4
Common Equity Tier 1^(d)		9.2			9.4			9.9
Tier 1 risk-based capital ^(d)		10.4			10.7			11.3
Total risk-based capital ^(d)		12.0			12.4			13.2
Leverage ^(d)		8.8			8.6			8.7

Asset quality — from continuing operations
Net loan charge-offs	$	44		$	33		$	22
Net loan charge-offs to average loans		.16	%		.13	%		.09	%
Allowance for loan and lease losses	$	1,099		$	1,105		$	1,220
Allowance for credit losses		1,272			1,271			1,372
Allowance for loan and lease losses to period-end loans		.98	%		1.04	%		1.21	%
Allowance for credit losses to period-end loans		1.13			1.19			1.36
Allowance for loan and lease losses to nonperforming loans		256.2			251.7			175.8
Allowance for credit losses to nonperforming loans		296.5			289.5			197.7
Nonperforming loans at period-end	$	429		$	439		$	694
Nonperforming assets at period-end		463			467			738
Nonperforming loans to period-end portfolio loans		.38	%		.41	%		.69	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		.41			.44			.73

Trust assets
Assets under management	$	49,003		$	53,707		$	51,013

Other data
Average full-time equivalent employees		17,414			17,110			17,003
Branches		978			993			1,014
Taxable-equivalent adjustment	$	7		$	6		$	6

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 13

Financial Highlights (continued)

(Dollars in millions, except per share amounts)


	Six months ended
	6/30/2022			6/30/2021
Summary of operations
Net interest income (TE)	$	2,124		$	2,035
Noninterest income		1,364			1,488
Total revenue (TE)		3,488			3,523
Provision for credit losses		128			(315	)
Noninterest expense		2,148			2,147
Income (loss) from continuing operations attributable to Key		977			1,342
Income (loss) from discontinued operations, net of taxes		4			9
Net income (loss) attributable to Key		981			1,351

Income (loss) from continuing operations attributable to Key common shareholders		924			1,289
Income (loss) from discontinued operations, net of taxes		4			9
Net income (loss) attributable to Key common shareholders		928			1,298

Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	1.00		$	1.34
Income (loss) from discontinued operations, net of taxes		—			.01
Net income (loss) attributable to Key common shareholders ^(a)		1.00			1.35

Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution		.99			1.33
Income (loss) from discontinued operations, net of taxes — assuming dilution		—			.01
Net income (loss) attributable to Key common shareholders — assuming dilution ^(a)		1.00			1.34

Cash dividends paid		.39			.37

Performance ratios
From continuing operations:
Return on average total assets		1.08	%		1.55	%
Return on average common equity		13.62			16.33
Return on average tangible common equity ^(b)		17.15			19.88
Net interest margin (TE)		2.53			2.56
Cash efficiency ratio ^(b)		60.9			60.1

From consolidated operations:
Return on average total assets		1.08	%		1.55	%
Return on average common equity		13.68			16.45
Return on average tangible common equity ^(b)		17.23			20.02
Net interest margin (TE)		2.53			2.57

Asset quality — from continuing operations
Net loan charge-offs	$	77		$	136
Net loan charge-offs to average total loans		.15	%		.27	%

Other data
Average full-time equivalent employees		17,262			17,046

Taxable-equivalent adjustment		13			13

(a)	Earnings per share may not foot due to rounding.

(b)

The following table entitled “GAAP to Non-GAAP Reconciliations” presents the computations of certain financial measures related to “tangible common equity” and “cash efficiency.” The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.

(c)	Represents period-end consolidated total loans and loans held for sale divided by period-end consolidated total deposits.

(d)	June 30, 2022, ratio is estimated and reflects Key’s election to adopt the CECL optional transition provision.

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 14

GAAP to Non-GAAP Reconciliations

(Dollars in millions)

The table below presents certain non-GAAP financial measures related to “tangible common equity,” “return on average tangible common equity,” “pre-provision net revenue,” and “cash efficiency ratio.”

The tangible common equity ratio and the return on average tangible common equity ratio have been a focus for some investors, and management believes these ratios may assist investors in analyzing Key’s capital position without regard to the effects of intangible assets and preferred stock.

The table also shows the computation for pre-provision net revenue, which is not formally defined by GAAP. Management believes that eliminating the effects of the provision for credit losses makes it easier to analyze the results by presenting them on a more comparable basis.

The cash efficiency ratio is a ratio of two non-GAAP performance measures. As such, there is no directly comparable GAAP performance measure. The cash efficiency ratio performance measure removes the impact of Key’s intangible asset amortization from the calculation. Management believes this ratio provide greater consistency and comparability between Key’s results and those of its peer banks. Additionally, this ratio is used by analysts and investors as they develop earnings forecasts and peer bank analysis.

Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although these non-GAAP financial measures are frequently used by investors to evaluate a company, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP.


	Three months ended									Six months ended
	6/30/2022			3/31/2022			6/30/2021			6/30/2022			6/30/2021
Tangible common equity to tangible assets at period-end
Key shareholders’ equity (GAAP)	$	14,427		$	15,308		$	17,941
Less: Intangible assets ^(a)		2,868			2,810			2,828
Preferred Stock^(b)		1,856			1,856			1,856

Tangible common equity (non-GAAP)	$	9,703		$	10,642		$	13,257


Total assets (GAAP)	$	187,008		$	181,221		$	181,115
Less: Intangible assets^(a)		2,868			2,810			2,828

Tangible assets (non-GAAP)	$	184,140		$	178,411		$	178,287


Tangible common equity to tangible assets ratio (non-GAAP)		5.27	%		5.96	%		7.44	%


Pre-provision net revenue
Net interest income (GAAP)	$	1,097		$	1,014		$	1,017		$	2,111		$	2,022
Plus: Taxable-equivalent adjustment		7			6			6			13			13
Noninterest income		688			676			750			1,364			1,488
Less: Noninterest expense		1,078			1,070			1,076			2,148			2,147

Pre-provision net revenue from continuing operations (non-GAAP)	$	714		$	626		$	697		$	1,340		$	1,376


Average tangible common equity
Average Key shareholders’ equity (GAAP)	$	14,398		$	16,780		$	17,859		$	15,583		$	17,814
Less: Intangible assets (average) ^(c)		2,827			2,814			2,840			2,821			2,840
Preferred stock (average)		1,900			1,900			1,900			1,900			1,900

Average tangible common equity (non-GAAP)	$	9,671		$	12,066		$	13,119		$	10,862		$	13,074


Return on average tangible common equity from continuing operations
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP)	$	504		$	420		$	698		$	924		$	1,289
Average tangible common equity (non-GAAP)		9,671			12,066			13,119			10,862			13,074

Return on average tangible common equity from continuing operations (non-GAAP)		20.90	%		14.12	%		21.34	%		17.15	%		19.88	%
Return on average tangible common equity consolidated
Net income (loss) attributable to Key common shareholders (GAAP)	$	507		$	421		$	703		$	928		$	1,298
Average tangible common equity (non-GAAP)		9,671			12,066			13,119			10,862			13,074

Return on average tangible common equity consolidated (non-GAAP)		21.03	%		14.15	%		21.49	%		17.23	%		20.02	%

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 15

GAAP to Non-GAAP Reconciliations (continued)

(Dollars in millions)


	Three months ended									Six months ended
	6/30/2022			3/31/2022			6/30/2021			6/30/2022			6/30/2021
Cash efficiency ratio
Noninterest expense (GAAP)	$	1,078		$	1,070		$	1,076		$	2,148		$	2,147
Less: Intangible asset amortization		12			11			14			23			29

Adjusted noninterest expense (non-GAAP)	$	1,066		$	1,059		$	1,062		$	2,125		$	2,118



Net interest income (GAAP)	$	1,097		$	1,014		$	1,017		$	2,111		$	2,022
Plus: Taxable-equivalent adjustment		7			6			6			13			13
Noninterest income		688			676			750			1,364			1,488

Total taxable-equivalent revenue (non-GAAP)	$	1,792		$	1,696		$	1,773		$	3,488		$	3,523



Cash efficiency ratio (non-GAAP)		59.5	%		62.4	%		59.9	%		60.9	%		60.1	%

(a)	For the three months ended June 30, 2022, March 31, 2022, and June 30, 2021, intangible assets exclude $2 million, $2 million, and $4 million, respectively, of period-end purchased credit card receivables.

(b)	Net of capital surplus.

(c)

For the three months ended June 30, 2022, March 31, 2022, and June 30, 2021, average intangible assets exclude $2 million, $3 million, and $4 million, respectively, of average purchased credit card receivables. For the six months ended June 30, 2022, and June 30, 2021, average intangible assets exclude $2 million, and $4 million, respectively, of average purchased credit card receivables.

GAAP = U.S. generally accepted accounting principles

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 16

Consolidated Balance Sheets

(Dollars in millions)


	6/30/2022			3/31/2022			6/30/2021
Assets
Loans	$	112,390		$	106,600		$	100,730
Loans held for sale		1,306			1,170			1,537
Securities available for sale		42,437			43,681			34,638
Held-to-maturity securities		8,186			6,871			6,175
Trading account assets		809			848			851
Short-term investments		2,456			3,881			20,460
Other investments		969			722			635
Total earning assets		168,553			163,773			165,026
Allowance for loan and lease losses		(1,099	)		(1,105	)		(1,220	)
Cash and due from banks		678			684			792
Premises and equipment		638			647			785
Goodwill		2,752			2,694			2,673
Other intangible assets		118			118			159
Corporate-owned life insurance		4,343			4,340			4,304
Accrued income and other assets		10,529			9,544			7,966
Discontinued assets		496			526			630
Total assets	$	187,008		$	181,221		$	181,115

Liabilities
Deposits in domestic offices:
NOW and money market deposit accounts	$	83,628		$	86,829		$	85,242
Savings deposits		7,934			7,840			6,993
Certificates of deposit ($100,000 or more)		1,421			1,533			2,064
Other time deposits		1,909			2,037			2,493
Total interest-bearing deposits		94,892			98,239			96,792
Noninterest-bearing deposits		50,973			50,424			49,280
Total deposits		145,865			148,663			146,072
Federal funds purchased and securities sold under repurchase agreements		3,234			599			211
Bank notes and other short-term borrowings		2,809			2,222			723
Accrued expense and other liabilities		4,056			3,615			2,957
Long-term debt		16,617			10,814			13,211
Total liabilities		172,581			165,913			163,174


Equity
Preferred stock		1,900			1,900			1,900
Common shares		1,257			1,257			1,257
Capital surplus		6,241			6,214			6,232
Retained earnings		15,118			14,793			13,689
Treasury stock, at cost		(5,923	)		(5,927	)		(5,287	)
Accumulated other comprehensive income (loss)		(4,166	)		(2,929	)		150
Key shareholders’ equity		14,427			15,308			17,941
Total liabilities and equity	$	187,008		$	181,221		$	181,115


Common shares outstanding (000)		932,643			932,398			960,276

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 17

Consolidated Statements of Income

(Dollars in millions, except per share amounts)


	Three months ended								Six months ended
	6/30/2022		3/31/2022			6/30/2021			6/30/2022		6/30/2021
Interest income
Loans	$	923	$	837		$	888		$	1,760	$	1,777
Loans held for sale		10		12			11			22		22
Securities available for sale		188		173			133			361		263
Held-to-maturity securities		48		46			45			94		90
Trading account assets		7		6			5			13		10
Short-term investments		13		4			6			17		11
Other investments		4		2			2			6		4
Total interest income		1,193		1,080			1,090			2,273		2,177
Interest expense
Deposits		20		14			16			34		37
Federal funds purchased and securities sold under repurchase agreements		6		—			—			6		—
Bank notes and other short-term borrowings		9		3			3			12		4
Long-term debt		61		49			54			110		114
Total interest expense		96		66			73			162		155
Net interest income		1,097		1,014			1,017			2,111		2,022
Provision for credit losses		45		83			(222	)		128		(315	)
Net interest income after provision for credit losses		1,052		931			1,239			1,983		2,337
Noninterest income
Trust and investment services income		137		136			133			273		266
Investment banking and debt placement fees		149		163			217			312		379
Service charges on deposit accounts		96		91			83			187		156
Operating lease income and other leasing gains		28		32			36			60		74
Corporate services income		88		90			55			178		119
Cards and payments income		85		80			113			165		218
Corporate-owned life insurance income		35		31			30			66		61
Consumer mortgage income		14		21			26			35		73
Commercial mortgage servicing fees		45		36			44			81		78
Other income		11		(4	)		13			7		64
Total noninterest income		688		676			750			1,364		1,488
Noninterest expense
Personnel		607		630			623			1,237		1,247
Net occupancy		78		73			75			151		151
Computer processing		78		77			71			155		144
Business services and professional fees		52		53			51			105		101
Equipment		26		23			25			49		50
Operating lease expense		27		28			31			55		65
Marketing		34		28			31			62		57
Other expense		176		158			169			334		332
Total noninterest expense		1,078		1,070			1,076			2,148		2,147
Income (loss) from continuing operations before income taxes		662		537			913			1,199		1,678
Income taxes		132		90			189			222		336
Income (loss) from continuing operations		530		447			724			977		1,342
Income (loss) from discontinued operations, net of taxes		3		1			5			4		9
Net income (loss)		533		448			729			981		1,351
Less: Net income (loss) attributable to noncontrolling interests		—		—			—			—		—
Net income (loss) attributable to Key	$	533	$	448		$	729		$	981		1,351


Income (loss) from continuing operations attributable to Key common shareholders	$	504	$	420		$	698		$	924	$	1,289
Net income (loss) attributable to Key common shareholders		507		421			703			928		1,298
Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	.54	$	.45		$	.73		$	1.00	$	1.34
Income (loss) from discontinued operations, net of taxes		—		—			—			—		.01
Net income (loss) attributable to Key common shareholders ^(a)		.55		.46			.73			1.00		1.35
Per common share — assuming dilution
Income (loss) from continuing operations attributable to Key common shareholders	$	.54	$	.45		$	.72		$	.99	$	1.33
Income (loss) from discontinued operations, net of taxes		—		—			—			—		.01
Net income (loss) attributable to Key common shareholders^(a)		.54		.45			.73			1.00		1.34

Cash dividends declared per common share	$	.195	$	.195		$	.185		$	.390	$	.370

Weighted-average common shares outstanding (000)		924,302		922,941			957,423			923,717		961,292
Effect of common share options and other stock awards		7,506		10,692			9,740			9,087		9,514
Weighted-average common shares and potential common shares outstanding (000)^(b)		931,808		933,634			967,163			932,805		970,806

(a)	Earnings per share may not foot due to rounding.

(b)	Assumes conversion of common share options and other stock awards, as applicable.

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 18

Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations

(Dollars in millions)



	Second Quarter 2022								First Quarter 2022								Second Quarter 2021
	Average Balance			Interest ^(a)		Yield/ Rate ^(a)			Average Balance			Interest ^(a)		Yield/ Rate ^(a)			Average Balance			Interest ^(a)		Yield/ Rate ^(a)
Assets
Loans: ^{(b), (c)}
Commercial and industrial ^(d)	$	53,858		$	449		3.34	%	$	51,574		$	410		3.22	%	$	51,808		$	450		3.48	%
Real estate — commercial mortgage		15,231			136		3.58			14,587			121		3.37			12,825			117		3.67
Real estate — construction		2,125			20		3.81			2,027			17		3.37			2,149			20		3.68
Commercial lease financing		3,817			24		2.47			3,942			24		2.41			4,060			30		2.98
Total commercial loans		75,031			629		3.36			72,130			572		3.21			70,842			617		3.49
Real estate — residential mortgage		18,383			131		2.85			16,309			112		2.75			11,055			81		2.92
Home equity loans		8,208			78		3.83			8,345			74		3.61			9,089			85		3.76
Consumer direct loans		6,514			68		4.19			5,954			61		4.16			4,910			57		4.69
Credit cards		943			24		10.20			932			24		10.36			908			22		9.79
Consumer indirect loans		59			—		—			92			—		—			4,010			32		3.19
Total consumer loans		34,107			301		3.53			31,632			271		3.45			29,972			277		3.71
Total loans		109,138			930		3.41			103,762			843		3.28			100,814			894		3.56
Loans held for sale		1,107			10		3.49			1,485			12		3.32			1,616			11		2.60
Securities available for sale ^{(b), (e)}		43,023			188		1.60			44,923			173		1.50			33,623			133		1.57
Held-to-maturity securities ^(b)		7,291			48		2.65			7,188			46		2.54			6,452			45		2.75
Trading account assets		854			7		3.45			842			6		2.74			837			5		2.56
Short-term investments		3,591			13		1.45			7,323			4		.25			18,817			6		.13
Other investments ^(e)		800			4		2.27			651			2		1.26			622			2		1.02
Total earning assets		165,804			1,200		2.83			166,174			1,086		2.62			162,781			1,096		2.70
Allowance for loan and lease losses		(1,103	)							(1,056	)							(1,442	)
Accrued income and other assets		18,826								17,471								16,531
Discontinued assets		505								539								650
Total assets	$	184,032							$	183,128							$	178,520

Liabilities
NOW and money market deposit accounts	$	85,389		$	18		.08		$	88,515		$	11		.05		$	83,981		$	9		.05
Savings deposits		7,891			—		.01			7,599			—		.01			6,859			1		.03
Certificates of deposit ($100,000 or more)		1,487			1		.44			1,639			2		.44			2,212			4		.72
Other time deposits		1,972			1		.13			2,098			1		.15			2,630			2		.38
Total interest-bearing deposits		96,739			20		.08			99,851			14		.06			95,682			16		.07
Federal funds purchased and securities sold under repurchase agreements		2,792			6		.88			287			—		.13			251			—		.02
Bank notes and other short-term borrowings		1,943			9		1.77			705			3		1.94			744			3		1.19
Long-term debt ^{(f), (g)}		12,662			61		1.92			10,830			49		1.79			11,978			54		1.79
Total interest-bearing liabilities		114,136			96		.34			111,673			66		.24			108,655			73		.27
Noninterest-bearing deposits		50,732								50,312								48,640
Accrued expense and other liabilities		4,261								3,824								2,716
Discontinued liabilities ^(g)		505								539								650
Total liabilities	$	169,634							$	166,348							$	160,661
Equity
Key shareholders’ equity	$	14,398							$	16,780							$	17,859
Noncontrolling interests		—								—								—
Total equity		14,398								16,780								17,859
Total liabilities and equity	$	184,032							$	183,128							$	178,520

Interest rate spread (TE)							2.50	%							2.38	%							2.43	%

Net interest income (TE) and net interest margin (TE)				$	1,104		2.61	%				$	1,020		2.46	%				$	1,023		2.52	%
TE adjustment ^(b)					7								6								6
Net interest income, GAAP basis				$	1,097							$	1,014							$	1,017

(a)	Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (g) below, calculated using a matched funds transfer pricing methodology.

(b)	Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 21% for the three months ended June 30, 2022, March 31, 2022, and June 30, 2021.

(c)	For purposes of these computations, nonaccrual loans are included in average loan balances.

(d)	Commercial and industrial average balances include $153 million, $141 million, and $132 million of assets from commercial credit cards for the three months ended June 30, 2022, March 31, 2022, and June 30, 2021, respectively.

(e)	Yield is calculated on the basis of amortized cost.

(f)	Rate calculation excludes basis adjustments related to fair value hedges.

(g)	A portion of long-term debt and the related interest expense is allocated to discontinued liabilities as a result of applying Key’s matched funds transfer pricing methodology to discontinued operations.

TE = Taxable Equivalent, GAAP = U.S. generally accepted accounting principles

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 19

Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations

(Dollars in millions)


	Six months ended June 30, 2022								Six months ended June 30, 2021

	Average Balance			Interest (a)		Yield/ Rate (a)			Average Balance			Interest (a)		Yield/ Rate (a)

Assets
Loans: ^{(b), (c)}
Commercial and industrial ^(d)	$	52,723		$	858		3.28	%	$	52,194		$	902		3.49	%
Real estate — commercial mortgage		14,910			257		3.48			12,742			232		3.67
Real estate — construction		2,076			37		3.60			2,099			39		3.71
Commercial lease financing		3,879			48		2.44			4,101			61		2.99

Total commercial loans		73,588			1,200		3.28			71,136			1,234		3.49
Real estate — residential mortgage		17,352			243		2.80			10,380			154		2.97
Home equity loans		8,276			153		3.72			9,189			173		3.79
Consumer direct loans		6,236			129		4.18			4,864			113		4.70
Credit cards		938			48		10.28			920			46		10.12
Consumer indirect loans		75			—		—			4,288			69		3.25

Total consumer loans		32,877			573		3.49			29,641			555		3.77

Total loans		106,465			1,773		3.35			100,777			1,789		3.58
Loans held for sale		1,295			22		3.40			1,574			22		2.74
Securities available for sale ^{(b), (e)}		43,968			361		1.55			31,841			263		1.66
Held-to-maturity securities ^(b)		7,239			94		2.59			6,818			90		2.63
Trading account assets		848			13		3.10			842			10		2.35
Short-term investments		5,447			17		.65			17,670			11		.13
Other investments ^(e)		726			6		1.82			618			4		1.21

Total earning assets		165,988			2,286		2.72			160,140			2,189		2.75
Allowance for loan and lease losses		(1,080	)							(1,532	)
Accrued income and other assets		18,152								16,463
Discontinued assets		522								668

Total assets	$	183,582							$	175,739


Liabilities
NOW and money market deposit accounts	$	86,943		$	29		.07		$	82,717		$	20		.05
Savings deposits		7,746			1		.01			6,533			1		.03
Certificates of deposit ($100,000 or more)		1,562			3		.44			2,390			10		.85
Other time deposits		2,035			1		.14			2,766			6		.48

Total interest-bearing deposits		98,286			34		.07			94,406			37		.08
Federal funds purchased and securities sold under repurchase agreements		1,547			6		.81			247			—		.03
Bank notes and other short-term borrowings		1,327			12		1.82			811			4		.89
Long-term debt ^{(f), (g)}		11,751			110		1.86			12,402			114		1.85

Total interest-bearing liabilities		112,911			162		.29			107,866			155		.29

Noninterest-bearing deposits		50,523								46,638
Accrued expense and other liabilities		4,043								2,753
Discontinued liabilities ^(g)		522								668

Total liabilities	$	167,999							$	157,925
Equity
Key shareholders’ equity	$	15,583							$	17,814
Noncontrolling interests		—								—

Total equity		15,583								17,814

Total liabilities and equity	$	183,582							$	175,739


Interest rate spread (TE)							2.44	%							2.46	%


Net interest income (TE) and net interest margin (TE)				$	2,124		2.53	%				$	2,035		2.56	%


TE adjustment ^(b)					13								13

Net interest income, GAAP basis				$	2,111							$	2,022

(a)	Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (g) below, calculated using a matched funds transfer pricing methodology.

(b)	Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 21% for the six months ended June 30, 2022, and June 30, 2021, respectively.

(c)	For purposes of these computations, nonaccrual loans are included in average loan balances.

(d)	Commercial and industrial average balances include $147 million and $129 million of assets from commercial credit cards for the six months ended June 30, 2022, and June 30, 2021, respectively.

(e)	Yield is calculated on the basis of amortized cost.

(f)	Rate calculation excludes basis adjustments related to fair value hedges.

(g)	A portion of long-term debt and the related interest expense is allocated to discontinued liabilities as a result of applying Key’s matched funds transfer pricing methodology to discontinued operations.

TE = Taxable Equivalent, GAAP = U.S. generally accepted accounting principles

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 20

Noninterest Expense

(Dollars in millions)


	Three months ended						Six months ended

	6/30/2022		3/31/2022		6/30/2021		6/30/2022		6/30/2021

Personnel ^(a)	$	607	$	630	$	623	$	1,237	$	1,247
Net occupancy		78		73		75		151		151
Computer processing		78		77		71		155		144
Business services and professional fees		52		53		51		105		101
Equipment		26		23		25		49		50
Operating lease expense		27		28		31		55		65
Marketing		34		28		31		62		57
Other expense		176		158		169		334		332

Total noninterest expense	$	1,078	$	1,070	$	1,076	$	2,148	$	2,147

Average full-time equivalent employees ^(b)		17,414		17,110		17,003		17,262		17,046

(a)	Additional detail provided in Personnel Expense table below.

(b)	The number of average full-time equivalent employees has not been adjusted for discontinued operations.

Personnel Expense

(Dollars in millions)


	Three months ended						Six months ended

	6/30/2022		3/31/2022		6/30/2021		6/30/2022		6/30/2021

Salaries and contract labor	$	357	$	348	$	321	$	705	$	641
Incentive and stock-based compensation		163		183		210		346		406
Employee benefits		83		97		92		180		199
Severance		4		2		—		6		1

Total personnel expense	$	607	$	630	$	623	$	1,237	$	1,247

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 21

Loan Composition

(Dollars in millions)


							Change 6/30/2022 vs
	6/30/2022		3/31/2022		6/30/2021		3/31/2022			6/30/2021

Commercial and industrial ^(a)	$	55,245	$	52,815	$	50,672		4.6	%		9.0 %
Commercial real estate:
Commercial mortgage		15,636		15,124		12,965		3.4			20.6
Construction		2,144		2,065		2,132		3.8			.6

Total commercial real estate loans		17,780		17,189		15,097		3.4			17.8
Commercial lease financing ^(b)		3,956		3,916		4,061		1.0			(2.6)

Total commercial loans		76,981		73,920		69,830		4.1			10.2
Residential — prime loans:
Real estate — residential mortgage		19,588		17,181		12,131		14.0			61.5
Home equity loans		8,134		8,258		9,047		(1.5	)		(10.1)

Total residential — prime loans		27,722		25,439		21,178		9.0			30.9
Consumer direct loans		6,665		6,249		5,049		6.7			32.0
Credit cards		967		930		923		4.0			4.8
Consumer indirect loans		55		62		3,750		(11.3	)		(98.5)

Total consumer loans		35,409		32,680		30,900		8.4			14.6

Total loans ^{(c), (d)}	$	112,390	$	106,600	$	100,730		5.4	%		11.6 %

(a)	Loan balances include $161 million, $147 million, and $135 million of commercial credit card balances at June 30, 2022, March 31, 2022, and June 30, 2021, respectively.

(b)	Commercial lease financing includes receivables held as collateral for a secured borrowing of $12 million, $14 million, and $19 million at June 30, 2022, March 31, 2022, and June 30, 2021, respectively. Principal reductions are based on the cash payments received from these related receivables.

(c)	Total loans exclude loans of $498 million at June 30, 2022, $531 million at March 31, 2022, and $636 million at June 30, 2021, related to the discontinued operations of the education lending business.

(d)	Accrued interest of $233 million, $193 million, and $225 million at June 30, 2022, March 31, 2022, and June 30, 2021, respectively, presented in “other assets” on the Consolidated Balance Sheets is excluded from the amortized cost basis disclosed in this table.

Loans Held for Sale Composition

(Dollars in millions)


							Change 6/30/2022 vs
	6/30/2022		3/31/2022		6/30/2021		3/31/2022			6/30/2021

Commercial and industrial	$	213	$	216	$	233		(1.4	)%		(8.6)%
Real estate — commercial mortgage		1,004		819		1,073		22.6			(6.4)
Real estate — construction		6		21		—		(71.4	)%		N/M
Real estate — residential mortgage		83		114		231		(27.2	)		(64.1)

Total loans held for sale	$	1,306	$	1,170	$	1,537		11.6	%		(15.0)%

N/M = Not Meaningful

Summary of Changes in Loans Held for Sale

(Dollars in millions)


	2Q22			1Q22			4Q21			3Q21			2Q21

Balance at beginning of period	$	1,170		$	2,729		$	1,805		$	1,537		$	2,296
New originations		2,837			2,724			5,704			3,328			3,573
Transfers from (to) held to maturity, net		(57	)		—			(1	)		3,305			(71	)
Loan sales		(2,506	)		(4,269	)		(4,742	)		(6,405	)		(4,195	)
Loan draws (payments), net		(133	)		(12	)		(12	)		8			(27	)
Valuation and other adjustments		(5	)		(2	)		(25	)		32			(39	)

Balance at end of period	$	1,306		$	1,170		$	2,729		$	1,805		$	1,537

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 22

Summary of Loan and Lease Loss Experience From Continuing Operations

(Dollars in millions)


	Three months ended									Six months ended

	6/30/2022			3/31/2022			6/30/2021			6/30/2022			6/30/2021

Average loans outstanding	$	109,138		$	103,762		$	100,814		$	106,465		$	100,777

Allowance for loan and lease losses at the beginning of the period		1,105			1,061			1,438			1,061			1,626
Loans charged off:
Commercial and industrial		39			30			41			69			114

Real estate — commercial mortgage		3			4			4			7			39
Real estate — construction		—			—			—			—			—

Total commercial real estate loans		3			4			4			7			39
Commercial lease financing		—			2			—			2			4

Total commercial loans		42			36			45			78			157
Real estate — residential mortgage		(2	)		(1	)		1			(3	)		1
Home equity loans		—			1			4			1			6
Consumer direct loans		10			7			7			17			15
Credit cards		8			7			9			15			15
Consumer indirect loans		1			1			5			2			12

Total consumer loans		17			15			26			32			49

Total loans charged off		59			51			71			110			206
Recoveries:
Commercial and industrial		8			11			32			19			40

Real estate — commercial mortgage		1			1			6			2			7
Real estate — construction		1			—			—			1			—

Total commercial real estate loans		2			1			6			3			7
Commercial lease financing		1			—			—			1			1

Total commercial loans		11			12			38			23			48
Real estate — residential mortgage		1			—			—			1			1
Home equity loans		1			1			1			2			2
Consumer direct loans		1			2			2			3			4
Credit cards		1			2			3			3			5
Consumer indirect loans		—			1			5			1			10

Total consumer loans		4			6			11			10			22

Total recoveries		15			18			49			33			70

Net loan charge-offs		(44	)		(33	)		(22	)		(77	)		(136	)
Provision (credit) for loan and lease losses		38			77			(196	)		115			(270	)

Allowance for loan and lease losses at end of period	$	1,099		$	1,105		$	1,220		$	1,099		$	1,220


Liability for credit losses on lending-related commitments at beginning of period		166			160			178			160			197
Provision (credit) for losses on lending-related commitments		7			6			(26	)		13			(45	)

Liability for credit losses on lending-related commitments at end of period ^(a)	$	173		$	166		$	152		$	173		$	152


Total allowance for credit losses at end of period	$	1,272		$	1,271		$	1,372		$	1,272		$	1,372


Net loan charge-offs to average total loans		.16	%		.13	%		.09	%		.15	%		.27	%
Allowance for loan and lease losses to period-end loans		.98			1.04			1.21			.98			1.21
Allowance for credit losses to period-end loans		1.13			1.19			1.36			1.13			1.36
Allowance for loan and lease losses to nonperforming loans		256.2			251.7			175.8			256.2			175.8
Allowance for credit losses to nonperforming loans		296.5			289.5			197.7			296.5			197.7

Discontinued operations — education lending business:
Loans charged off	$	1			2		$	1		$	3		$	2
Recoveries		1			—			—			1			1

Net loan charge-offs	$	—		$	(2	)	$	(1	)	$	(2	)	$	(1	)

(a)	Included in “Accrued expense and other liabilities” on the balance sheet.

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 23

Asset Quality Statistics From Continuing Operations

(Dollars in millions)


	2Q22			1Q22			4Q21			3Q21			2Q21
Net loan charge-offs	$	44		$	33		$	19		$	29		$	22
Net loan charge-offs to average total loans		.16	%		.13	%		.08	%		.11	%		.09	%
Allowance for loan and lease losses	$	1,099		$	1,105		$	1,061		$	1,084		$	1,220
Allowance for credit losses ^(a)		1,272			1,271			1,221			1,236			1,372
Allowance for loan and lease losses to period-end loans		.98	%		1.04	%		1.04	%		1.10	%		1.21	%
Allowance for credit losses to period-end loans		1.13			1.19			1.20			1.25			1.36
Allowance for loan and lease losses to nonperforming loans		256.2			251.7			233.7			195.7			175.8
Allowance for credit losses to nonperforming loans		296.5			289.5			268.9			223.1			197.7
Nonperforming loans at period end	$	429		$	439		$	454		$	554		$	694
Nonperforming assets at period end		463			467			489			599			738
Nonperforming loans to period-end portfolio loans		.38	%		.41	%		.45	%		.56	%		.69	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		.41			.44			.48			.61			.73

(a)	Includes the allowance for loan and lease losses plus the liability for credit losses on lending-related commitments.

Summary of Nonperforming Assets and Past Due Loans From Continuing Operations

(Dollars in millions)


	6/30/2022			3/31/2022			12/31/2021			9/30/2021			6/30/2021
Commercial and industrial	$	197		$	186		$	191		$	253		$	355

Real estate — commercial mortgage		35			40			44			49			66
Real estate — construction		—			—			—			—			—
Total commercial real estate loans		35			40			44			49			66
Commercial lease financing		2			3			4			5			7
Total commercial loans		234			229			239			307			428
Real estate — residential mortgage		67			73			72			93			99
Home equity loans		120			129			135			146			146
Consumer direct loans		3			4			4			4			4
Credit cards		3			3			3			3			3
Consumer indirect loans		2			1			1			1			14
Total consumer loans		195			210			215			247			266
Total nonperforming loans		429			439			454			554			694
OREO		9			8			8			8			9
Nonperforming loans held for sale		25			20			24			35			32
Other nonperforming assets		—			—			3			2			3
Total nonperforming assets	$	463		$	467		$	489		$	599		$	738

Accruing loans past due 90 days or more		41			55			68			82			74
Accruing loans past due 30 through 89 days		137			122			165			164			190
Restructured loans — accruing and nonaccruing ^(a)		216			219			220			270			334
Restructured loans included in nonperforming loans ^(a)		94			98			99			146			177
Nonperforming assets from discontinued operations — education lending business		3			4			4			4			5
Nonperforming loans to period-end portfolio loans		.38	%		.41	%		.45	%		.56	%		.69	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		.41			.44			.48			.61			.73

(a)

Restructured loans (i.e., troubled debt restructuring) are those for which Key, for reasons related to a borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. These concessions are made to improve the collectability of the loan and generally take the form of a reduction of the interest rate, extension of the maturity date or reduction in the principal balance.

Summary of Changes in Nonperforming Loans From Continuing Operations

(Dollars in millions)


	2Q22			1Q22			4Q21			3Q21			2Q21
Balance at beginning of period	$	439		$	454		$	554		$	694		$	728
Loans placed on nonaccrual status		118			87			116			116			186
Charge-offs		(59	)		(50	)		(51	)		(66	)		(74	)
Loans sold		(8	)		—			(38	)		(17	)		(10	)
Payments		(35	)		(27	)		(68	)		(136	)		(92	)
Transfers to OREO		(2	)		(1	)		(1	)		(1	)		—
Loans returned to accrual status		(24	)		(24	)		(58	)		(36	)		(44	)
Balance at end of period	$	429		$	439		$	454		$	554		$	694

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 24

Line of Business Results

(Dollars in millions)


																Change 2Q22 vs.
	2Q22			1Q22			4Q21			3Q21			2Q21			1Q22			2Q21
Consumer Bank
Summary of operations
Total revenue (TE)	$	824		$	799		$	839		$	870		$	852			3.1	%		(3.3	)%
Provision for credit losses		8			43			14			(38)			(70)			(81.4)			111.4
Noninterest expense		676			663			613			591			584			2.0			15.8
Net income (loss) attributable to Key		107			70			161			241			257			52.9			(58.4	)
Average loans and leases		40,818			38,637			37,792			39,796			40,598			5.6			.5
Average deposits		91,256			91,468			90,271			89,156			88,412			(.2)			3.2
Net loan charge-offs		23			22			22			35			34			4.5			(32.4	)
Net loan charge-offs to average total loans		.23	%		.23	%		.23	%		.35	%		.34	%		—			(32.4	)
Nonperforming assets at period end	$	203		$	217		$	222		$	254		$	274			(6.5)			(25.9	)
Return on average allocated equity		11.66	%		7.91	%		18.05	%		25.81	%		28.53	%		47.4			(59.1	)

Commercial Bank
Summary of operations
Total revenue (TE)	$	844		$	810		$	1,028		$	886		$	871			4.2	%		(3.1	)%
Provision for credit losses		37			41			(12)			(69)			(131)			(9.8)			128.2
Noninterest expense		414			417			501			470			451			(.7)			(8.2	)
Net income (loss) attributable to Key		315			283			449			381			432			11.3			(27.1	)
Average loans and leases		67,834			64,701			61,127			59,914			59,953			4.8			13.1
Average loans held for sale		1,016			1,323			1,962			1,190			1,341			(23.2)			(24.2	)
Average deposits		54,864			57,289			59,537			56,522			54,814			(4.2)			.1
Net loan charge-offs		21			11			—			(6)			9			90.9			133.3
Net loan charge-offs to average total loans		.12	%		.07	%		—	%		(.04)	%		.06	%		71.4			100.0
Nonperforming assets at period end	$	260		$	250		$	267		$	345		$	464			4.0			(44.0	)
Return on average allocated equity		14.16	%		13.21	%		21.54	%		18.54	%		20.69	%		7.2			(31.6	)

TE = Taxable Equivalent