EX-99.1 2 a2q22earningsrelease.htm EX-99.1 Document


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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.

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KeyCorp Reports Second Quarter 2022 Profit     
July 21, 2022
Page 2

Selected Financial Highlights
Dollars in millions, except per share dataChange 2Q22 vs.
2Q221Q222Q211Q222Q21
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/AN/A
Return on average total assets from continuing operations1.16 .99 1.63 N/AN/A
Common Equity Tier 1 ratio (b)
9.2 9.4 9.9 N/AN/A
Book value at period end$13.48 $14.43 $16.75 (6.6)(19.5)
Net interest margin (TE) from continuing operations2.61 %2.46 %2.52 %N/AN/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 millionsChange 2Q22 vs.
 2Q221Q222Q211Q222Q21
Net interest income (TE)$1,104 $1,020 $1,023 8.2 %7.9 %
Noninterest income688 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 millionsChange 2Q22 vs.
2Q221Q222Q211Q222Q21
Trust and investment services income$137 $136 $133 .7 %3.0 %
Investment banking and debt placement fees149 163 217 (8.6)(31.3)
Service charges on deposit accounts96 91 83 5.5 15.7 
Operating lease income and other leasing gains28 32 36 (12.5)(22.2)
Corporate services income88 90 55 (2.2)60.0 
Cards and payments income85 80 113 6.3 (24.8)
Corporate-owned life insurance income35 31 30 12.9 16.7 
Consumer mortgage income14 21 26 (33.3)(46.2)
Commercial mortgage servicing fees45 36 44 25.0 2.3 
Other income11 (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 millionsChange 2Q22 vs.
2Q221Q222Q211Q222Q21
Personnel expense$607 $630 $623 (3.7)%(2.6)%
Nonpersonnel expense471 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 millionsChange 2Q22 vs.
2Q221Q222Q211Q222Q21
Commercial and industrial (a)
$53,858 $51,574 $51,808 4.4 %4.0 %
Other commercial loans21,173 20,556 19,034 3.0 11.2 
Total consumer loans34,107 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 millionsChange 2Q22 vs.
2Q221Q222Q211Q222Q21
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 deposits1,972 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/AN/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 millionsChange 2Q22 vs.
2Q221Q222Q211Q222Q21
Net loan charge-offs$44 $33 $22 33.3 %100.0 %
Net loan charge-offs to average total loans.16 %.13 %.09 %N/AN/A
Nonperforming loans at period end$429 $439 $694 (2.3)(38.2)
Nonperforming assets at period end463 467 738 (0.9)(37.3)
Allowance for loan and lease losses1,099 1,105 1,220 (0.5)(9.9)
Allowance for credit losses1,272 1,271 1,372 0.1 (7.3)
Provision for credit losses45 83 (222)(45.8)120.3 
Allowance for loan and lease losses to nonperforming loans256.2 %251.7 %175.8 %N/AN/A
Allowance for credit losses to nonperforming loans296.5 289.5 197.7 N/AN/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
6/30/20223/31/20226/30/2021
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 thousandsChange 2Q22 vs.
2Q221Q222Q211Q222Q21
Shares outstanding at beginning of period932,398 928,850 972,587 .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 period932,643 932,398 960,276 — %(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 millionsChange 2Q22 vs.
2Q221Q222Q211Q222Q21
Revenue from continuing operations (TE)
Consumer Bank$824 $799 $852 3.1 %(3.3)%
Commercial Bank844 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 Bank315 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 millionsChange 2Q22 vs.
2Q221Q222Q211Q222Q21
Summary of operations
Net interest income (TE)$570 $543 $599 5.0 %(4.8)%
Noninterest income254 256 253 (.8).4 
Total revenue (TE)824 799 852 3.1 (3.3)
Provision for credit losses8 43 (70)(81.4)111.4 
Noninterest expense676 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 adjustments33 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 assets43,868 41,814 43,818 4.9 .1 
Deposits91,256 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 millionsChange 2Q22 vs.
2Q221Q222Q211Q222Q21
Noninterest income
Trust and investment services income$104 $106 $104 (1.9)%— %
Service charges on deposit accounts59 54 48 9.3 22.9 
Cards and payments income62 57 62 8.8 — 
Consumer mortgage income14 21 26 (33.3)(46.2)
Other noninterest income15 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 deposits7,515 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 deposits1,966 2,090 2,616 (5.9)(24.8)
Noninterest-bearing deposits22,516 22,000 21,152 2.3 6.4 
Total deposits$91,256 $91,468 $88,412 (.2)%3.2 %
Other data
Branches978 993 1,014 
Automated teller machines1,284 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 millionsChange 2Q22 vs.
2Q221Q222Q211Q222Q21
Summary of operations
Net interest income (TE)$440 $415 $417 6.0 %5.5 %
Noninterest income404 395 454 2.3 (11.0)
Total revenue (TE)844 810 871 4.2 (3.1)
Provision for credit losses37 41 (131)9.8 128.2 
Noninterest expense414 417 451 (.7)(8.2)
Income (loss) before income taxes (TE)393 352 551 11.6 (28.7)
Allocated income taxes and TE adjustments78 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 sale1,016 1,323 1,341 (23.2)(24.2)
Total assets78,824 74,860 69,101 5.3 14.1 
Deposits54,864 57,289 54,814 (4.2)%0.1 %
TE = Taxable Equivalent

Additional Commercial Bank Data
Dollars in millionsChange 2Q22 vs.
2Q221Q222Q211Q222Q21
Noninterest income
Trust and investment services income$33 $30 $27 10.0 %22.2 %
Investment banking and debt placement fees149 163 215 (8.6)(30.7)
Operating lease income and other leasing gains27 32 35 (15.6)(22.9)
Corporate services income80 82 47 (2.4)70.2 
Service charges on deposit accounts36 36 34 — 5.9 
Cards and payments income23 22 49 4.5 (53.1)
Payments and services income139 140 130 (0.7)6.9 
Commercial mortgage servicing fees45 36 44 25.0 2.3 
Other noninterest income11 (6)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:
ANALYSTSMEDIA
Vernon L. PattersonSusan Donlan
216.689.0520216.471.3133
Vernon_Patterson@KeyBank.comSusan_E_Donlan@KeyBank.com
Melanie S. KaiserBeth Strauss
216.689.4545216.471.2787
Melanie_S_Kaiser@KeyBank.comBeth_A_Strauss@KeyBank.com
Halle A. NicholsTwitter: @keybank
216.471.2184
Halle_A_Nichols@KeyBank.com
INVESTOR RELATIONS:KEY MEDIA NEWSROOM:
www.key.com/irwww.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
Financial Highlights
GAAP to Non-GAAP Reconciliation
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations
Noninterest Expense
Personnel Expense
Loan Composition
Loans Held for Sale Composition
Summary of Changes in Loans Held for Sale
Summary of Loan and Lease Loss Experience From Continuing Operations
Asset Quality Statistics From Continuing Operations
Summary of Nonperforming Assets and Past Due Loans From Continuing Operations
Summary of Changes in Nonperforming Loans From Continuing Operations
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
6/30/20223/31/20226/30/2021
Summary of operations
Net interest income (TE)$1,104 $1,020 $1,023 
Noninterest income688 676 750 
Total revenue (TE)
1,792 1,696 1,773 
Provision for credit losses45 83 (222)
Noninterest expense1,078 1,070 1,076 
Income (loss) from continuing operations attributable to Key530 447 724 
Income (loss) from discontinued operations, net of taxes3 
Net income (loss) attributable to Key533 448 729 
Income (loss) from continuing operations attributable to Key common shareholders504 420 698 
Income (loss) from discontinued operations, net of taxes3 
Net income (loss) attributable to Key common shareholders507 421 703 
Per common share
Income (loss) from continuing operations attributable to Key common shareholders$.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 end13.48 14.43 16.75 
Tangible book value at period end10.40 11.41 13.81 
Market price at period end17.23 22.38 20.65 
Performance ratios
From continuing operations:
Return on average total assets1.16 %.99 %1.63 %
Return on average common equity16.17 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 assets1.16 %.99 %1.64 %
Return on average common equity16.27 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 assets7.7 %8.5 %9.9 %
Key common shareholders’ equity to assets6.7 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 loans256.2 251.7 175.8 
Allowance for credit losses to nonperforming loans296.5 289.5 197.7 
Nonperforming loans at period-end$429 $439 $694 
Nonperforming assets at period-end463 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 $$



KeyCorp Reports Second Quarter 2022 Profit     
July 21, 2022
Page 13

Financial Highlights (continued)
(Dollars in millions, except per share amounts)
Six months ended
6/30/20226/30/2021
Summary of operations
Net interest income (TE)$2,124 $2,035 
Noninterest income1,364 1,488 
Total revenue (TE)3,488 3,523 
Provision for credit losses128 (315)
Noninterest expense2,148 2,147 
Income (loss) from continuing operations attributable to Key977 1,342 
Income (loss) from discontinued operations, net of taxes4 
Net income (loss) attributable to Key981 1,351 
Income (loss) from continuing operations attributable to Key common shareholders924 1,289 
Income (loss) from discontinued operations, net of taxes4 
Net income (loss) attributable to Key common shareholders928 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 assets1.08 %1.55 %
Return on average common equity13.62 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 assets1.08 %1.55 %
Return on average common equity13.68 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 employees17,262 17,046 
Taxable-equivalent adjustment13 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 endedSix months ended
6/30/20223/31/20226/30/20216/30/20226/30/2021
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 adjustment7 13 13 
Noninterest income688 676 750 1,364 1,488 
Less: Noninterest expense1,078 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 endedSix months ended
6/30/20223/31/20226/30/20216/30/20226/30/2021
Cash efficiency ratio
Noninterest expense (GAAP)$1,078 $1,070 $1,076 $2,148 $2,147 
Less: Intangible asset amortization12 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 adjustment7 13 13 
Noninterest income688 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)
6/30/20223/31/20226/30/2021
Assets
Loans$112,390 $106,600 $100,730 
Loans held for sale1,306 1,170 1,537 
Securities available for sale42,437 43,681 34,638 
Held-to-maturity securities8,186 6,871 6,175 
Trading account assets809 848 851 
Short-term investments2,456 3,881 20,460 
Other investments969 722 635 
Total earning assets168,553 163,773 165,026 
Allowance for loan and lease losses(1,099)(1,105)(1,220)
Cash and due from banks678 684 792 
Premises and equipment638 647 785 
Goodwill2,752 2,694 2,673 
Other intangible assets118 118 159 
Corporate-owned life insurance4,343 4,340 4,304 
Accrued income and other assets10,529 9,544 7,966 
Discontinued assets496 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 deposits7,934 7,840 6,993 
Certificates of deposit ($100,000 or more)1,421 1,533 2,064 
Other time deposits1,909 2,037 2,493 
Total interest-bearing deposits94,892 98,239 96,792 
Noninterest-bearing deposits50,973 50,424 49,280 
Total deposits145,865 148,663 146,072 
Federal funds purchased and securities sold under repurchase agreements 3,234 599 211 
Bank notes and other short-term borrowings2,809 2,222 723 
Accrued expense and other liabilities4,056 3,615 2,957 
Long-term debt16,617 10,814 13,211 
Total liabilities172,581 165,913 163,174 
Equity
Preferred stock1,900 1,900 1,900 
Common shares1,257 1,257 1,257 
Capital surplus6,241 6,214 6,232 
Retained earnings15,118 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’ equity14,427 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
6/30/20223/31/20226/30/20216/30/20226/30/2021
Interest income
Loans$923 $837 $888 $1,760 $1,777 
Loans held for sale10 12 11 22 22 
Securities available for sale188 173 133 361 263 
Held-to-maturity securities48 46 45 94 90 
Trading account assets7 13 10 
Short-term investments13 17 11 
Other investments4 6 
Total interest income1,193 1,080 1,090 2,273 2,177 
Interest expense
Deposits20 14 16 34 37 
Federal funds purchased and securities sold under repurchase agreements6 — — 6 — 
Bank notes and other short-term borrowings9 12 
Long-term debt61 49 54 110 114 
Total interest expense96 66 73 162 155 
Net interest income1,097 1,014 1,017 2,111 2,022 
Provision for credit losses45 83 (222)128 (315)
Net interest income after provision for credit losses1,052 931 1,239 1,983 2,337 
Noninterest income
Trust and investment services income137 136 133 273 266 
Investment banking and debt placement fees149 163 217 312 379 
Service charges on deposit accounts96 91 83 187 156 
Operating lease income and other leasing gains28 32 36 60 74 
Corporate services income88 90 55 178 119 
Cards and payments income85 80 113 165 218 
Corporate-owned life insurance income35 31 30 66 61 
Consumer mortgage income14 21 26 35 73 
Commercial mortgage servicing fees45 36 44 81 78 
Other income11 (4)13 7 64 
Total noninterest income688 676 750 1,364 1,488 
Noninterest expense
Personnel607 630 623 1,237 1,247 
Net occupancy78 73 75 151 151 
Computer processing78 77 71 155 144 
Business services and professional fees52 53 51 105 101 
Equipment26 23 25 49 50 
Operating lease expense27 28 31 55 65 
Marketing34 28 31 62 57 
Other expense176 158 169 334 332 
Total noninterest expense1,078 1,070 1,076 2,148 2,147 
Income (loss) from continuing operations before income taxes662 537 913 1,199 1,678 
Income taxes132 90 189 222 336 
Income (loss) from continuing operations530 447 724 977 1,342 
Income (loss) from discontinued operations, net of taxes3 4 
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 $1,289 
Net income (loss) attributable to Key common shareholders507 421 703 928 1,298 
Per common share
Income (loss) from continuing operations attributable to Key common shareholders$.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 awards7,506 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 2022First Quarter 2022Second Quarter 2021
AverageYield/AverageYield/AverageYield/
Balance
Interest (a)
Rate (a)
Balance
Interest (a)
Rate (a)
Balance
Interest (a)
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 mortgage15,231 136 3.58 14,587 121 3.37 12,825 117 3.67 
Real estate — construction2,125 20 3.81 2,027 17 3.37 2,149 20 3.68 
Commercial lease financing3,817 24 2.47 3,942 24 2.41 4,060 30 2.98 
Total commercial loans75,031 629 3.36 72,130 572 3.21 70,842 617 3.49 
Real estate — residential mortgage18,383 131 2.85 16,309 112 2.75 11,055 81 2.92 
Home equity loans8,208 78 3.83 8,345 74 3.61 9,089 85 3.76 
Consumer direct loans6,514 68 4.19 5,954 61 4.16 4,910 57 4.69 
Credit cards943 24 10.20 932 24 10.36 908 22 9.79 
Consumer indirect loans59   92 — — 4,010 32 3.19 
Total consumer loans34,107 301 3.53 31,632 271 3.45 29,972 277 3.71 
Total loans109,138 930 3.41 103,762 843 3.28 100,814 894 3.56 
Loans held for sale1,107 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 assets854 7 3.45 842 2.74 837 2.56 
Short-term investments3,591 13 1.45 7,323 .25 18,817 .13 
Other investments (e)
800 4 2.27 651 1.26 622 1.02 
Total earning assets165,804 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 assets18,826 17,471 16,531 
Discontinued assets505 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 $.05 
Savings deposits7,891  .01 7,599 — .01 6,859 .03 
Certificates of deposit ($100,000 or more)1,487 1 .44 1,639 .44 2,212 .72 
Other time deposits1,972 1 .13 2,098 .15 2,630 .38 
Total interest-bearing deposits96,739 20 .08 99,851 14 .06 95,682 16 .07 
Federal funds purchased and securities sold under repurchase agreements2,792 6 .88 287 — .13 251 — .02 
Bank notes and other short-term borrowings1,943 9 1.77 705 1.94 744 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 liabilities114,136 96 .34 111,673 66 .24 108,655 73 .27 
Noninterest-bearing deposits50,732 50,312 48,640 
Accrued expense and other liabilities4,261 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 equity14,398 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)
766
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.