Form 8-K KEYCORP /NEW/ For: Jul 16

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July 16, 2015 6:35 AM EDT

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 16, 2015

LOGO

(Exact name of registrant as specified in charter)

Ohio

001-11302

34-6542451

(State or other jurisdiction

of incorporation)

Commission

File Number

(I.R.S. Employer

Identification No.)


127 Public Square, Cleveland, Ohio		44114-1306
(Address of principal executive offices)		(Zip Code)

(216) 689-3000

Registrant’s telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On July 16, 2015, KeyCorp issued a press release announcing its financial results for the three- and six-month periods ended June 30, 2015 (the “Press Release”), and posted on its website its second quarter 2015 Supplemental Information Package (the “Supplemental Information Package”). The Press Release and Supplemental Information Package are being furnished as Exhibit 99.1 and Exhibit 99.2, respectively.

The information in the preceding paragraph, as well as Exhibit 99.1 and Exhibit 99.2 referenced therein, shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”).

KeyCorp’s Consolidated Balance Sheets and Consolidated Statements of Income (collectively, the “Financial Statements”), included as part of the Press Release, are filed as Exhibit 99.3 to this report. Exhibit 99.3 is deemed “filed” for purposes of Section 18 of the Exchange Act and, therefore, may be incorporated by reference in filings under the Securities Act.

Item 9.01 Financial Statements and Exhibits.

(d)

Exhibits

The following exhibits are furnished, or filed in the case of Exhibit 99.3, herewith:


99.1		Press Release, dated July 16, 2015, announcing financial results for the three- and six-month periods ended June 30, 2015.

99.2		Supplemental Information Package reviewed during the conference call and webcast.

99.3		Financial Statements.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	KEYCORP
	(Registrant)

Date: July 16, 2015	/s/ Douglas M. Schosser
	By:	Douglas M. Schosser
		Chief Accounting Officer

Exhibit 99.1

NEWS

FOR IMMEDIATE RELEASE

KEYCORP REPORTS SECOND QUARTER 2015

NET INCOME OF $230 MILLION, OR $.27 PER COMMON SHARE

Positive operating leverage

Revenue up 4% from prior year, reflecting growth in fee income and loans

Continued growth in commercial loans and record investment banking and debt placement fees

affirms strength of business model

Credit quality remains strong, with net loan charge-offs to average loans of .25%

Disciplined capital management: quarterly common share dividend

increased 15% and continued share repurchases

CLEVELAND, July 16, 2015 – KeyCorp (NYSE: KEY) today announced second quarter net income from continuing operations attributable to Key common shareholders of $230 million, or $.27 per common share, compared to $222 million, or $.26 per common share, for the first quarter of 2015, and $242 million, or $.27 per common share, for the second quarter of 2014.

For the six months ended June 30, 2015, net income from continuing operations attributable to Key common shareholders was $452 million, or $.52 per common share, compared to $474 million, or $.53 per common share, for the same period one year ago.

“Second quarter results reflect our continued success in executing our strategy and driving growth across our company,” said Chairman and Chief Executive Officer Beth Mooney. “We generated positive operating leverage and added new and expanded relationships in both our Community Bank and Corporate Bank.”

“Revenue benefited from positive trends in our core fee-based businesses, including investment banking and debt placement fees, which had a record quarter and was up 42% from the prior year. We also had momentum in trust and investment services and cards and payments income. Average loans continued to grow, driven by commercial, financial and agricultural loans, which were up 10% from one year ago,” continued Mooney.

“Credit quality remained strong, with a net charge-offs to average loans ratio of .25%, well below our targeted range,” said Mooney.

“We continue to be disciplined in the way we manage our capital. In the second quarter, our Board of Directors increased our quarterly common share dividend by 15% and we repurchased $129 million of common shares,” added Mooney. “We expect our 2015 estimated payout ratio to remain among the highest in our peer group.”

KeyCorp Reports Second Quarter 2015 Profit

July 16, 2015

Page 2

SECOND QUARTER 2015 FINANCIAL RESULTS, from continuing operations

Compared to Second Quarter of 2014

•

Average loans up 4.3%, driven by 9.7% growth in commercial, financial and agricultural loans

•

Average deposits, excluding deposits in foreign office, up 5.7% due to strength in commercial mortgage servicing and inflows from commercial and consumer clients

•

Net interest income (taxable-equivalent) up $12 million, as higher earning asset balances offset lower earning asset yields

•

Noninterest income up $33 million due to a record quarter for investment banking and debt placement fees and growth in other core fee-based businesses

•

Noninterest expense up $24 million primarily attributable to performance-based compensation and the third quarter 2014 acquisition of Pacific Crest Securities

•

The provision for credit losses was $41 million in the second quarter of 2015, compared to $12 million in the year-ago quarter

•

Asset quality remained strong, with net loan charge-offs to average loans of .25%, up from .22% in the year-ago quarter and remaining well below our targeted range of .40% to .60%

•

Disciplined capital management, repurchasing $129 million of common shares during the second quarter of 2015

Compared to First Quarter of 2015

•

Average loans up .8%, primarily driven by a 2.5% increase in commercial, financial and agricultural loans

•

Average deposits, excluding deposits in foreign office, up 2.1% primarily attributable to strength in commercial mortgage servicing and inflows from commercial and consumer clients

•

Net interest income (taxable-equivalent) up $14 million due to higher earning asset balances and day count

•

Noninterest income up $51 million, primarily due to a record quarter for investment banking and debt placement fees and growth in other core fee-based businesses

•

Noninterest expense up $42 million, primarily driven by performance-based compensation, seasonal trends, and higher business services and professional fees

•

The provision for credit losses was $41 million in the second quarter of 2015, compared to $35 million in the prior quarter

•

Strong asset quality, with net loan charge-offs to average loans of .25%, compared to .20% in the first quarter of 2015 and remaining well below our targeted range of .40% to .60%

•

Disciplined capital management, maintaining a solid capital position with a Common Equity Tier 1 ratio of 10.69% compared to 10.64% in the prior quarter

Selected Financial Highlights


dollars in millions, except per share data										Change 2Q15 vs.
	2Q15			1Q15			2Q14			1Q15			2Q14
Income (loss) from continuing operations attributable to Key common shareholders	$	230		$	222		$	242			3.6	%		(5.0	)%
Income (loss) from continuing operations attributable to Key common shareholders per common share — assuming dilution		.27			.26			.27			3.8			—
Return on average total assets from continuing operations		1.03	%		1.03	%		1.14	%		N/A			N/A
Common Equity Tier 1^(a)		10.69			10.64			N/A			N/A			N/A
Tier 1 common equity^(a)		N/A			N/A			11.25	%		N/A			N/A
Book value at period end	$	12.21		$	12.12		$	11.65			.7	%		4.8	%
Net interest margin (TE) from continuing operations		2.88	%		2.91	%		2.98	%		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 “Common Equity Tier 1” (compliance date of January 1, 2015, under the Regulatory Capital Rules) and “Tier 1 common equity” (prior to January 1, 2015). The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons. For further information on the Regulatory Capital Rules, see the “Capital” section of this release.

TE = Taxable Equivalent, N/A = Not Applicable

KeyCorp Reports Second Quarter 2015 Profit

July 16, 2015

Page 3

INCOME STATEMENT HIGHLIGHTS

Revenue


dollars in millions							Change 2Q15 vs.
	2Q15		1Q15		2Q14		1Q15			2Q14
Net interest income (TE)	$	591	$	577	$	579		2.4	%		2.1	%
Noninterest income		488		437		455		11.7			7.3

Total revenue	$	1,079	$	1,014	$	1,034		6.4	%		4.4	%

TE = Taxable Equivalent

Taxable-equivalent net interest income was $591 million for the second quarter of 2015, and the net interest margin was 2.88%. These results compare to taxable-equivalent net interest income of $579 million and a net interest margin of 2.98% for the second quarter of 2014. The increase in net interest income reflects higher earning asset balances mitigated by lower earning asset yields, which also drove the decline in the net interest margin.

Compared to the first quarter of 2015, taxable-equivalent net interest income increased by $14 million, and the net interest margin declined by three basis points. The increase in net interest income was primarily attributable to higher earning asset balances and day count in the second quarter of 2015. The decline in the net interest margin reflects higher levels of excess liquidity driven by commercial deposit growth and slightly lower earning asset yields.

Noninterest Income


dollars in millions							Change 2Q15 vs.
	2Q15		1Q15		2Q14		1Q15			2Q14
Trust and investment services income	$	111	$	109	$	94		1.8	%		18.1	%
Investment banking and debt placement fees		141		68		99		107.4			42.4
Service charges on deposit accounts		63		61		66		3.3			(4.5	)
Operating lease income and other leasing gains		24		19		35		26.3			(31.4	)
Corporate services income		43		43		41		—			4.9
Cards and payments income		47		42		43		11.9			9.3
Corporate-owned life insurance income		30		31		28		(3.2	)		7.1
Consumer mortgage income		4		3		2		33.3			100.0
Mortgage servicing fees		9		13		11		(30.8	)		(18.2	)
Net gains (losses) from principal investing		11		29		27		(62.1	)		(59.3	)
Other income		5		19		9		(73.7	)		(44.4	)

Total noninterest income	$	488	$	437	$	455		11.7	%		7.3	%

Key’s noninterest income was $488 million for the second quarter of 2015, compared to $455 million for the year-ago quarter. Results for the second quarter of 2015 reflect a record quarter for investment banking and debt placement fees, which increased $42 million year-over-year. This increase was primarily driven by strength in financial advisory fees and loan syndications. Investment banking and debt placement fees also benefited from the third quarter 2014 acquisition of Pacific Crest Securities. Trust and investment services income increased $17 million, primarily due to the impact of the Pacific Crest Securities acquisition as well as strength in Key’s Retail and Private Banking businesses. Additionally, cards and payments income increased $4 million. Partially offsetting these increases was a $16 million decrease in net gains from principal investing and lower operating lease income and other leasing gains, which benefited from a $17 million gain from the early termination of a leveraged lease in the second quarter of 2014.

Compared to the first quarter of 2015, noninterest income increased by $51 million. The largest driver of this increase was the growth in investment banking and debt placement fees, which increased by $73 million due to strength in financial advisory fees and loan syndications. Additionally, cards and payments income increased $5 million predominantly due to credit and debit card growth. Compared to the first quarter of 2015, the growth in the second quarter of 2015 was partially offset by $18 million of lower net gains from principal investing and a $14 million decline in other income.

KeyCorp Reports Second Quarter 2015 Profit

July 16, 2015

Page 4

Noninterest Expense


dollars in millions							Change 2Q15 vs.
	2Q15		1Q15		2Q14		1Q15			2Q14
Personnel expense	$	408	$	389	$	389		4.9	%		4.9	%
Nonpersonnel expense		303		280		298		8.2			1.7

Total noninterest expense	$	711	$	669	$	687		6.3	%		3.5	%

Key’s noninterest expense was $711 million for the second quarter of 2015, compared to $687 million in the second quarter of last year. This increase was primarily due to higher performance-based compensation and the third quarter 2014 acquisition of Pacific Crest Securities.

Compared to the first quarter of 2015, noninterest expense increased by $42 million. This increase was primarily driven by performance-based compensation, normal seasonal trends, and higher business services and professional fees.

BALANCE SHEET HIGHLIGHTS

In the second quarter of 2015, Key had average assets of $93.9 billion compared to $91.1 billion in the second quarter of 2014 and $91.9 billion in the first quarter of 2015. Growth in Key’s securities available for sale portfolio during the second quarter of 2015 resulted from higher levels of liquidity, driven by deposit growth and long-term debt issuance. In the second quarter of 2015, Key issued $1.75 billion in bank-level long-term debt, which benefited its liquidity coverage ratio and credit ratings profile.

Average Loans


dollars in millions							Change 6-30-15 vs.
	6-30-15		3-31-15		6-30-14		3-31-15			6-30-14
Commercial, financial and agricultural^(a)	$	29,017	$	28,321	$	26,444		2.5	%		9.7	%
Other commercial loans		13,161		13,304		13,186		(1.1	)		(.2	)
Total home equity loans		10,510		10,576		10,627		(.6	)		(1.1	)
Other consumer loans		5,290		5,311		5,354		(.4	)		(1.2	)

Total loans	$	57,978	$	57,512	$	55,611		.8	%		4.3	%

(a)	Commercial, financial and agricultural average loan balances include $88 million, $87 million, and $95 million of assets from commercial credit cards at June 30, 2015, March 31, 2015, and June 30, 2014, respectively.

Average loans were $58.0 billion for the second quarter of 2015, an increase of $2.4 billion compared to the second quarter of 2014. The loan growth occurred primarily in the commercial, financial and agricultural portfolio, which increased $2.6 billion and was broad-based across Key’s commercial lines of business. Consumer loans remained relatively stable as modest increases across Key’s core consumer loan portfolio were offset by run-off in Key’s consumer exit portfolios.

Compared to the first quarter of 2015, average loans increased by $466 million, driven by commercial, financial and agricultural loans, which increased by $696 million.

KeyCorp Reports Second Quarter 2015 Profit

July 16, 2015

Page 5

Average Deposits


dollars in millions										Change 6-30-15 vs.
	6-30-15			3-31-15			6-30-14			3-31-15			6-30-14
Non-time deposits^(a)	$	65,109		$	63,606		$	60,066			2.4	%		8.4	%
Certificates of deposit ($100,000 or more)		2,010			2,017			2,808			(.3	)		(28.4	)
Other time deposits		3,136			3,217			3,587			(2.5	)		(12.6	)

Total deposits	$	70,255		$	68,840		$	66,461			2.1	%		5.7	%

Cost of total deposits^(a)		.15	%		.15	%		.18	%		N/A			N/A

(a)	Excludes deposits in foreign office.

N/A = Not Applicable

Average deposits, excluding deposits in foreign office, totaled $70.3 billion for the second quarter of 2015, an increase of $3.8 billion compared to the year-ago quarter. Noninterest-bearing deposits increased by $3.3 billion, and NOW and money market deposit accounts increased by $1.8 billion, reflecting continued growth in the commercial mortgage servicing business and inflows from commercial and consumer clients. These increases were partially offset by a decline in certificates of deposit.

Compared to the first quarter of 2015, average deposits, excluding deposits in foreign office, increased by $1.4 billion. The increase was driven by NOW and money market deposit accounts which increased $1.2 billion, and noninterest-bearing deposits which increased $325 million. Higher escrow deposits from Key’s commercial mortgage servicing business and inflows related to both commercial and consumer clients drove the linked-quarter increase.

ASSET QUALITY


dollars in millions										Change 2Q15 vs.
	2Q15			1Q15			2Q14			1Q15			2Q14
Net loan charge-offs	$	36		$	28		$	30			28.6	%		20.0	%
Net loan charge-offs to average total loans		.25	%		.20	%		.22	%		N/A			N/A
Nonperforming loans at period end^(a)	$	419		$	437		$	396			(4.1	)%		5.8	%
Nonperforming assets at period end		440			457			410			(3.7	)		7.3
Allowance for loan and lease losses		796			794			814			.3			(2.2	)
Allowance for loan and lease losses to nonperforming loans		190.0	%		181.7	%		205.6	%		N/A			N/A
Provision for credit losses		41			35			12			17.1	%		241.7	%

(a)	Loan balances exclude $12 million, $12 million, and $15 million of purchased credit impaired loans at June 30, 2015, March 31, 2015, and June 30, 2014, respectively.

N/A = Not Applicable

Key’s provision for credit losses was $41 million for the second quarter of 2015, compared to $12 million for the second quarter of 2014 and $35 million for the first quarter of 2015. Key’s allowance for loan and lease losses was $796 million, or 1.37% of total period-end loans, at June 30, 2015, compared to 1.46% at June 30, 2014, and 1.37% at March 31, 2015.

Net loan charge-offs for the second quarter of 2015 totaled $36 million, or .25% of average total loans. These results compare to $30 million, or .22%, for the second quarter of 2014, and $28 million, or .20%, for the first quarter of 2015.

At June 30, 2015, Key’s nonperforming loans totaled $419 million and represented .72% of period-end portfolio loans, compared to .71% at June 30, 2014, and .75% at March 31, 2015. Nonperforming assets at June 30, 2015 totaled $440 million and represented .75% of period-end portfolio loans and OREO and other nonperforming assets, compared to .74% at June 30, 2014, and .79% at March 31, 2015.

KeyCorp Reports Second Quarter 2015 Profit

July 16, 2015

Page 6

CAPITAL

Key’s estimated risk-based capital ratios included in the following table continued to exceed all “well-capitalized” regulatory benchmarks at June 30, 2015.

Capital Ratios


	6-30-15			3-31-15			6-30-14
Common Equity Tier 1^{(a), (b)}		10.69	%		10.64	%		N/A
Tier 1 common equity^(b)		N/A			N/A			11.25	%
Tier 1 risk-based capital^(a)		11.10	%		11.04	%		11.99
Total risk based capital^(a)		12.63			12.79			14.14
Tangible common equity to tangible assets^(b)		9.86			9.92			10.15
Leverage^(a)		10.73			10.91			11.24

(a)	6-30-15 ratio is estimated.

(b)

The table entitled “GAAP to Non-GAAP Reconciliations” in the attached financial supplement presents the computations of certain financial measures related to “Common Equity Tier 1” (compliance date of January 1, 2015, under the Regulatory Capital Rules) and “Tier 1 common equity” (prior to January 1, 2015). The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons. See below for further information on the Regulatory Capital Rules.

As shown in the preceding table, at June 30, 2015, Key’s estimated Common Equity Tier 1 and Tier 1 risk-based capital ratios stood at 10.69% and 11.10%, respectively. In addition, the tangible common equity ratio was 9.86% at June 30, 2015.

In October 2013, federal banking regulators published the final Basel III capital framework for U.S. banking organizations (the “Regulatory Capital Rules”). The mandatory compliance date for Key as a “standardized approach” banking organization began on January 1, 2015, subject to transitional provisions extending to January 1, 2019. Key’s estimated Common Equity Tier 1 as calculated under the fully phased-in Regulatory Capital Rules was 10.58% at June 30, 2015. This estimate exceeds the fully phased-in required minimum Common Equity Tier 1 and Capital Conservation Buffer of 7.00%.

Summary of Changes in Common Shares Outstanding


in thousands										Change 2Q15 vs.
	2Q15			1Q15			2Q14			1Q15			2Q14
Shares outstanding at beginning of period		850,920			859,403			884,869			(1.0	)%		(3.8	)%
Common shares repurchased		(8,794	)		(14,087	)		(7,824	)		(37.6	)		12.4
Shares reissued (returned) under employee benefit plans		1,482			5,571			(222	)		(73.4	)		N/M
Common shares exchanged for Series A Preferred Stock		—			33			—			N/M			N/M

Shares outstanding at end of period		843,608			850,920			876,823			(.9	)%		(3.8	)%

As previously reported, Key’s 2015 capital plan includes common share repurchases of up to $725 million, which are expected to be executed through the second quarter of 2016. During the second quarter of 2015, Key completed $129 million of common share repurchases, including repurchases to offset issuances of common shares under employee compensation plans.

KeyCorp Reports Second Quarter 2015 Profit

July 16, 2015

Page 7

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.

Major Business Segments


dollars in millions										Change 2Q15 vs.
	2Q15			1Q15			2Q14			1Q15			2Q14
Revenue from continuing operations (TE)
Key Community Bank	$	559		$	549		$	553			1.8	%		1.1	%
Key Corporate Bank		477			401			395			19.0			20.8
Other Segments		44			66			87			(33.3	)		(49.4	)

Total segments		1,080			1,016			1,035			6.3			4.3
Reconciling Items		(1	)		(2	)		(1	)		N/M			N/M

Total	$	1,079		$	1,014		$	1,034			6.4	%		4.4	%

Income (loss) from continuing operations attributable to Key
Key Community Bank	$	65		$	50		$	53			30.0	%		22.6	%
Key Corporate Bank		135			127			135			6.3			—
Other Segments		31			44			54			(29.5	)		(42.6	)

Total segments		231			221			242			4.5			(4.5	)
Reconciling Items		4			7			5			(42.9	)		(20.0	)

Total	$	235		$	228		$	247			3.1	%		(4.9	)%

TE = Taxable Equivalent, N/M = Not Meaningful

Key Community Bank


dollars in millions							Change 2Q15 vs.
	2Q15		1Q15		2Q14		1Q15			2Q14
Summary of operations
Net interest income (TE)	$	362	$	358	$	361		1.1	%		.3	%
Noninterest income		197		191		192		3.1			2.6

Total revenue (TE)		559		549		553		1.8			1.1
Provision for credit losses		7		29		25		(75.9	)		(72.0	)
Noninterest expense		449		441		443		1.8			1.4

Income (loss) before income taxes (TE)		103		79		85		30.4			21.2
Allocated income taxes (benefit) and TE adjustments		38		29		32		31.0			18.8

Net income (loss) attributable to Key	$	65	$	50	$	53		30.0	%		22.6	%

Average balances
Loans and leases	$	30,707	$	30,662	$	30,034		.1	%		2.2	%
Total assets		32,758		32,716		32,132		.1			1.9
Deposits		50,766		50,417		50,232		.7			1.1

Assets under management at period end	$	38,399	$	39,281	$	39,632		(2.2	)%		(3.1	)%

TE = Taxable Equivalent

KeyCorp Reports Second Quarter 2015 Profit

July 16, 2015

Page 8

Additional Key Community Bank Data


dollars in millions										Change 2Q15 vs.
	2Q15			1Q15			2Q14			1Q15			2Q14
Noninterest income
Trust and investment services income	$	76		$	75		$	71			1.3	%		7.0	%
Service charges on deposit accounts		52			51			55			2.0			(5.5	)
Cards and payments income		43			38			38			13.2			13.2
Other noninterest income		26			27			28			(3.7	)		(7.1	)

Total noninterest income	$	197		$	191		$	192			3.1	%		2.6	%

Average deposit balances
NOW and money market deposit accounts	$	28,284		$	27,873		$	27,578			1.5	%		2.6	%
Savings deposits		2,385			2,377			2,483			.3			(3.9	)
Certificates of deposit ($100,000 or more)		1,547			1,558			2,169			(.7	)		(28.7	)
Other time deposits		3,132			3,211			3,580			(2.5	)		(12.5	)
Deposits in foreign office		299			333			294			(10.2	)		1.7
Noninterest-bearing deposits		15,119			15,065			14,128			.4			7.0

Total deposits	$	50,766		$	50,417		$	50,232			.7	%		1.1	%

Home equity loans
Average balance	$	10,266		$	10,316		$	10,321
Weighted-average loan-to-value ratio (at date of origination)		71	%		71	%		71	%
Percent first lien positions		60			60			59
Other data
Branches		989			992			1,009
Automated teller machines		1,280			1,287			1,311

Key Community Bank Summary of Operations

•

Net income increased to $65 million, up 22.6% from prior year

•

Commercial, financial, and agricultural loan growth of $692 million, or 5.9% from prior year

•

Average deposits (excluding certificates of deposit and other time deposits) up $1.6 billion, or 3.6% from the prior year

Key Community Bank recorded net income attributable to Key of $65 million for the second quarter of 2015, compared to net income attributable to Key of $53 million for the year-ago quarter.

Taxable-equivalent net interest income increased by $1 million, or .3%, from the second quarter of 2014. Average loans and leases increased 2.2% due to commercial, financial, and agricultural loan growth of $692 million, or 5.9%, while average deposits increased 1.1% from one year ago.

Noninterest income increased by $5 million, or 2.6%, from the year-ago quarter. Year-over-year improvement reflected core business growth, including trust and investment services income and cards and payments income, which each increased $5 million, partially offset by a $3 million decrease in service charges on deposit accounts.

The provision for credit losses was $7 million in the second quarter of 2015, compared to $25 million for the same period one year ago.

Noninterest expense increased by $6 million, or 1.4%, from the year-ago quarter, including increases in personnel expense of $2 million and nonpersonnel expense of $4 million, driven by higher marketing and sales-related expenses.

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July 16, 2015

Page 9

Key Corporate Bank


dollars in millions								Change 2Q15 vs.
	2Q15		1Q15		2Q14			1Q15			2Q14
Summary of operations
Net interest income (TE)	$	227	$	213	$	210			6.6	%		8.1	%
Noninterest income		250		188		185			33.0			35.1

Total revenue (TE)		477		401		395			19.0			20.8
Provision for credit losses		38		8		(4	)		375.0			N/M
Noninterest expense		252		216		207			16.7			21.7

Income (loss) before income taxes (TE)		187		177		192			5.6			(2.6	)
Allocated income taxes and TE adjustments		52		50		54			4.0			(3.7	)

Net income (loss)		135		127		138			6.3			(2.2	)%
Less: Net income (loss) attributable to noncontrolling interests		—		—		3			N/M			N/M

Net income (loss) attributable to Key	$	135	$	127	$	135			6.3	%		—

Average balances
Loans and leases	$	25,298	$	24,722	$	22,886			2.3	%		10.5	%
Loans held for sale		1,234		775		429			59.2			187.6
Total assets		31,228		30,297		28,007			3.1			11.5
Deposits		19,708		18,567		16,357			6.1			20.5

Assets under management at period end		—		—	$	37			N/M			N/M

TE = Taxable Equivalent, N/M = Not Meaningful

Additional Key Corporate Bank Data


dollars in millions								Change 2Q15 vs.
	2Q15		1Q15		2Q14			1Q15			2Q14
Noninterest income
Trust and investment services income	$	35	$	34	$	23			2.9	%		52.2	%
Investment banking and debt placement fees		139		68		97			104.4			43.3
Operating lease income and other leasing gains		18		14		11			28.6			63.6

Corporate services income		33		32		30			3.1			10.0
Service charges on deposit accounts		11		10		11			10.0			—
Cards and payments income		4		4		3			—			33.3

Payments and services income		48		46		44			4.3			9.1

Mortgage servicing fees		9		13		11			(30.8	)		(18.2	)
Other noninterest income		1		13		(1	)		(92.3	)		N/M

Total noninterest income	$	250	$	188	$	185			33.0	%		35.1	%

N/M = Not Meaningful

Key Corporate Bank Summary of Operations

•

Record high quarter for investment banking and debt placement fees

•

Revenue up 20.8% from the prior year

•

Average loan and lease balances up 10.5% from the prior year

•

Average deposits up 20.5% from the prior year

Key Corporate Bank recorded net income attributable to Key of $135 million for the second quarter of 2015, unchanged from the same period one year ago.

Taxable-equivalent net interest income increased by $17 million, or 8.1%, compared to the second quarter of 2014. Average earning assets increased $2.6 billion, or 10.3%, from the year-ago quarter, primarily driven by loan growth in commercial, financial and agricultural and real estate commercial mortgage loans. This

KeyCorp Reports Second Quarter 2015 Profit

July 16, 2015

Page 10

growth in earning assets drove an increase of $10 million in earning asset spread. Average deposit balances increased $3.4 billion, or 20.5%, from the year-ago quarter, driven by commercial mortgage servicing deposits and other commercial client inflows. This growth in deposit balances drove an increase of $13 million in deposit and borrowing spread.

Noninterest income was up $65 million, or 35.1% from the prior year. This growth was primarily due to a record high quarter for investment banking and debt placement fees, which increased $42 million or 43.3%, driven by strength in financial advisory fees and loan syndications. Trust and investment services income increased $12 million, mostly due to the Pacific Crest Securities acquisition. Operating lease income and other leasing gains also increased $7 million, or 63.6%.

The provision for credit losses was an expense of $38 million for the second quarter of 2015, compared to a credit of $4 million for the same period one year ago.

Noninterest expense increased by $45 million, or 21.7%, from the second quarter of 2014. This increase was due to performance-based compensation and expenses related to the third quarter 2014 acquisition of Pacific Crest Securities.

Other Segments

Other Segments consist of Corporate Treasury, Key’s Principal Investing unit and various exit portfolios. Other Segments generated net income attributable to Key of $31 million for the second quarter of 2015, compared to net income attributable to Key of $54 million for the same period last year. These results were primarily due to $16 million in lower net gains on principal investing and $19 million in lower operating lease income and other leasing gains, partially offset by a $3 million increase in corporate-owned life insurance income and lower personnel expense.

*****

KeyCorp was organized more than 160 years ago and is headquartered in Cleveland, Ohio. One of the nation’s largest bank-based financial services companies, Key had assets of approximately $94.6 billion at June 30, 2015.

Key provides deposit, lending, cash management and investment services to individuals and small and mid-sized businesses in 12 states under the name KeyBank National Association. 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.

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Page 11


CONTACTS:
ANALYSTS		MEDIA
Vernon L. Patterson		Jack Sparks
216.689.0520		720.904.4554
[email protected]		[email protected]
		Twitter: @keybank_news
Kelly L. Dillon
216.689.3133
[email protected]

Melanie S. Misconish
216.689.4545
[email protected]
INVESTOR		KEY MEDIA
RELATIONS: www.key.com/ir		NEWSROOM: 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, 2014, which has been filed with the Securities and Exchange Commission (the “SEC”) and is 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 reversal of the U.S. economic recovery due to financial, political, or other shocks, and the extensive and increasing regulation of the U.S. financial services industry. 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 9:00 a.m. ET, on Thursday, July 16, 2015. An audio replay of the call will be available through July 23, 2015.

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.

*****

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Page 12

KeyCorp

Second Quarter 2015

Financial Supplement


Page
13		Financial Highlights
15		GAAP to Non-GAAP Reconciliation
18		Consolidated Balance Sheets
19		Consolidated Statements of Income
20		Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations
22		Noninterest Expense
22		Personnel Expense
23		Loan Composition
23		Loans Held for Sale Composition
23		Summary of Changes in Loans Held for Sale
24		Exit Loan Portfolio From Continuing Operations
24		Asset Quality Statistics From Continuing Operations
25		Summary of Loan and Lease Loss Experience From Continuing Operations
26		Summary of Nonperforming Assets and Past Due Loans From Continuing Operations
27		Summary of Changes in Nonperforming Loans From Continuing Operations
27		Summary of Changes in Other Real Estate Owned, Net of Allowance, From Continuing Operations
28		Line of Business Results

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Page 13

Financial Highlights

(dollars in millions, except per share amounts)


	Three months ended
	6-30-15			3-31-15			6-30-14
Summary of operations
Net interest income (TE)	$	591		$	577		$	579
Noninterest income		488			437			455

Total revenue (TE)		1,079			1,014			1,034
Provision for credit losses		41			35			12
Noninterest expense		711			669			687
Income (loss) from continuing operations attributable to Key		235			228			247
Income (loss) from discontinued operations, net of taxes^(a)		3			5			(28	)
Net income (loss) attributable to Key		238			233			219

Income (loss) from continuing operations attributable to Key common shareholders	$	230		$	222		$	242
Income (loss) from discontinued operations, net of taxes^(a)		3			5			(28	)
Net income (loss) attributable to Key common shareholders		233			227			214

Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	.27		$	.26		$	.28
Income (loss) from discontinued operations, net of taxes ^(a)		—			.01			(.03	)
Net income (loss) attributable to Key common shareholders ^(b)		.28			.27			.24
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution		.27			.26			.27
Income (loss) from discontinued operations, net of taxes — assuming dilution ^(a)		—			.01			(.03	)
Net income (loss) attributable to Key common shareholders — assuming dilution ^(b)		.27			.26			.24

Cash dividends paid		.075			.065			.065
Book value at period end		12.21			12.12			11.65
Tangible book value at period end		10.92			10.84			10.50
Market price at period end		15.02			14.16			14.33

Performance ratios
From continuing operations:
Return on average total assets		1.03	%		1.03	%		1.14	%
Return on average common equity		8.96			8.76			9.55
Return on average tangible common equity ^(c)		10.01			9.80			10.60
Net interest margin (TE)		2.88			2.91			2.98
Cash efficiency ratio ^(c)		65.1			65.1			65.6

From consolidated operations:
Return on average total assets		1.02	%		1.03	%		.96	%
Return on average common equity		9.07			8.96			8.44
Return on average tangible common equity ^(c)		10.14			10.02			9.37
Net interest margin (TE)		2.85			2.88			2.94
Loan to deposit ^(d)		87.3			86.9			87.1

Capital ratios at period end
Key shareholders’ equity to assets		11.19	%		11.26	%		11.44	%
Key common shareholders’ equity to assets		10.89			10.95			11.13
Tangible common equity to tangible assets ^(c)		9.86			9.92			10.15
Common Equity Tier 1 ^{(c), (e)}		10.69			10.64			N/A
Tier 1 common equity ^(c)		N/A			N/A			11.25
Tier 1 risk-based capital ^(e)		11.10			11.04			11.99
Total risk-based capital ^(e)		12.63			12.79			14.14
Leverage ^(e)		10.73			10.91			11.24

Asset quality — from continuing operations
Net loan charge-offs	$	36		$	28		$	30
Net loan charge-offs to average loans		.25	%		.20	%		.22	%
Allowance for loan and lease losses	$	796		$	794		$	814
Allowance for credit losses		841			835			851
Allowance for loan and lease losses to period-end loans		1.37	%		1.37	%		1.46	%
Allowance for credit losses to period-end loans		1.44			1.44			1.53
Allowance for loan and lease losses to nonperforming loans		190.0			181.7			205.6
Allowance for credit losses to nonperforming loans		200.7			191.1			214.9
Nonperforming loans at period end ^(f)	$	419		$	437		$	396
Nonperforming assets at period end		440			457			410
Nonperforming loans to period-end portfolio loans		.72	%		.75	%		.71	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		.75			.79			.74

Trust and brokerage assets
Assets under management	$	38,399		$	39,281		$	39,669
Nonmanaged and brokerage assets		48,789			49,508			48,728

Other data
Average full-time equivalent employees		13,455			13,591			13,867
Branches		989			992			1,009

Taxable-equivalent adjustment	$	7		$	6		$	6

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Financial Highlights (continued)

(dollars in millions, except per share amounts)


	Six months ended
	6-30-15			6-30-14
Summary of operations
Net interest income (TE)	$	1,168		$	1,148
Noninterest income		925			890

Total revenue (TE)		2,093			2,038
Provision for credit losses		76			16
Noninterest expense		1,380			1,351
Income (loss) from continuing operations attributable to Key		463			485
Income (loss) from discontinued operations, net of taxes ^(a)		8			(24	)
Net income (loss) attributable to Key		471			461

Income (loss) from continuing operations attributable to Key common shareholders	$	452		$	474
Income (loss) from discontinued operations, net of taxes ^(a)		8			(24	)
Net income (loss) attributable to Key common shareholders		460			450

Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	.53		$	.54
Income (loss) from discontinued operations, net of taxes ^(a)		.01			(.03	)
Net income (loss) attributable to Key common shareholders ^(b)		.54			.51
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution		.52			.53
Income (loss) from discontinued operations, net of taxes — assuming dilution ^(a)		.01			(.03	)
Net income (loss) attributable to Key common shareholders — assuming dilution ^(b)		.53			.51

Cash dividends paid		.14			.12

Performance ratios
From continuing operations:
Return on average total assets		1.03	%		1.13	%
Return on average common equity		8.86			9.44
Return on average tangible common equity ^(c)		9.91			10.49
Net interest margin (TE)		2.89			2.99
Cash efficiency ratio ^(c)		65.1			65.4

From consolidated operations:
Return on average total assets		1.02	%		1.03	%
Return on average common equity		9.01			8.96

Return on average tangible common equity ^(c)		10.08			9.96
Net interest margin (TE)		2.86			2.95

Asset quality — from continuing operations
Net loan charge-offs	$	64		$	50
Net loan charge-offs to average total loans		.22	%		.18	%

Other data
Average full-time equivalent employees		13,512			13,961

Taxable-equivalent adjustment	$	13		$	12

(a)

In April 2009, management decided to wind down the operations of Austin Capital Management, Ltd., a subsidiary that specialized in managing hedge fund investments for institutional customers. In September 2009, management decided to discontinue the education lending business conducted through Key Education Resources, the education payment and financing unit of KeyBank National Association. In February 2013, Key decided to sell its investment subsidiary, Victory Capital Management, and its broker-dealer affiliate, Victory Capital Advisors, to a private equity fund. As a result of these decisions, Key has accounted for these businesses as discontinued operations.

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

(c)

The following table entitled “GAAP to Non-GAAP Reconciliations” presents the computations of certain financial measures related to “tangible common equity,” “Common Equity Tier 1” (compliance date of January 1, 2015, under the Regulatory Capital Rules) “Tier 1 common equity” (prior to January 1, 2015), 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. For further information on the Regulatory Capital Rules, see the “Capital” section of this release.

(d)	Represents period-end consolidated total loans and loans held for sale (excluding education loans in the securitization trusts for periods prior to September 30, 2014) divided by period-end consolidated total deposits (excluding deposits in foreign office).

(e)	6-30-15 ratio is estimated.

(f)	Loan balances exclude $12 million, $12 million, and $15 million of purchased credit impaired loans at June 30, 2015, March 31, 2015, and June 30, 2014, respectively.

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

KeyCorp Reports Second Quarter 2015 Profit

July 16, 2015

Page 15

GAAP to Non-GAAP Reconciliations

(dollars in millions)

The table below presents certain non-GAAP financial measures related to “tangible common equity,” “return on tangible common equity,” “Common Equity Tier 1,” “Tier 1 common equity,” “pre-provision net revenue,” and “cash efficiency ratio.”

The tangible common equity ratio and the return on 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. Traditionally, the banking regulators have assessed bank and bank holding company capital adequacy based on both the amount and the composition of capital, the calculation of which is prescribed in federal banking regulations. In October 2013, the federal banking regulators published the final Basel III capital framework for U.S. banking organizations (the “Regulatory Capital Rules”). The Regulatory Capital Rules require higher and better-quality capital and introduces a new capital measure, “Common Equity Tier 1,” a non-GAAP financial measure. The mandatory compliance date for Key as a “standardized approach” banking organization began on January 1, 2015, subject to transitional provisions extending to January 1, 2019. Prior to January 1, 2015, the Federal Reserve focused its assessment of capital adequacy on a component of Tier 1 risk-based capital known as Tier 1 common equity, also a non-GAAP financial measure.

Common Equity Tier 1 is not formally defined by GAAP and is considered to be a non-GAAP financial measure. Since analysts and banking regulators may assess Key’s capital adequacy using tangible common equity and Common Equity Tier 1, management believes it is useful to enable investors to assess Key’s capital adequacy on these same bases. The table also reconciles the GAAP performance measures to the corresponding non-GAAP measures.

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 loan and lease 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 provides 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
	6-30-15			3-31-15			6-30-14
Tangible common equity to tangible assets at period end
Key shareholders’ equity (GAAP)	$	10,590		$	10,603		$	10,504
Less: Intangible assets ^(a)		1,085			1,088			1,008
Preferred Stock, Series A ^(b)		281			281			282

Tangible common equity (non-GAAP)	$	9,224		$	9,234		$	9,214

Total assets (GAAP)	$	94,606		$	94,206		$	91,798
Less: Intangible assets ^(a)		1,085			1,088			1,008

Tangible assets (non-GAAP)	$	93,521		$	93,118		$	90,790

Tangible common equity to tangible assets ratio (non-GAAP)		9.86	%		9.92	%		10.15	%
Common Equity Tier 1 at period end
Key shareholders’ equity (GAAP)	$	10,590		$	10,603			—
Less: Preferred Stock, Series A ^(b)		281			281			—

Common Equity Tier 1 capital before adjustments and deductions		10,309			10,322			—
Less: Goodwill, net of deferred taxes		1,036			1,036			—
Intangible assets, net of deferred taxes		33			36			—
Deferred tax assets		1			1			—
Net unrealized gains (losses) on available-for-sale securities, net of deferred taxes		1			52			—
Accumulated gain (loss) on cash flow hedges, net of deferred taxes		(21	)		(8	)		—
Amounts recorded in accumulated other comprehensive income (loss), net of deferred taxes		(362	)		(364	)		—

Total Common Equity Tier 1 capital ^(c)	$	9,621		$	9,569			—


Net risk-weighted assets (regulatory) ^(c)	$	89,995		$	89,967			—

Common Equity Tier 1 ratio (non-GAAP) ^(c)		10.69	%		10.64	%		—
Tier 1 common equity at period end
Key shareholders’ equity (GAAP)		—			—		$	10,504
Qualifying capital securities		—			—			339
Less: Goodwill		—			—			979
Accumulated other comprehensive income (loss) ^(d)		—			—			(328	)
Other assets ^(e)		—			—			86

Total Tier 1 capital (regulatory)		—			—			10,106
Less: Qualifying capital securities		—			—			339
Preferred Stock, Series A ^(b)		—			—			282

Total Tier 1 common equity (non-GAAP)		—			—		$	9,485

Net risk-weighted assets (regulatory)		—			—		$	84,287
Tier 1 common equity ratio (non-GAAP)		—			—			11.25	%

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Page 16

GAAP to Non-GAAP Reconciliations (continued)

(dollars in millions)


	Three months ended
	6-30-15			3-31-15			6-30-14
Pre-provision net revenue
Net interest income (GAAP)	$	584		$	571		$	573
Plus: Taxable-equivalent adjustment		7			6			6
Noninterest income (GAAP)		488			437			455
Less: Noninterest expense (GAAP)		711			669			687

Pre-provision net revenue from continuing operations (non-GAAP)	$	368		$	345		$	347

Average tangible common equity
Average Key shareholders’ equity (GAAP)	$	10,590		$	10,570		$	10,459
Less: Intangible assets (average)^(f)		1,086			1,089			1,010
Preferred Stock, Series A (average)		290			290			291

Average tangible common equity (non-GAAP)	$	9,214		$	9,191		$	9,158

Return on average tangible common equity from continuing operations
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP)	$	230		$	222		$	242
Average tangible common equity (non-GAAP)		9,214			9,191			9,158

Return on average tangible common equity from continuing operations (non-GAAP)		10.01	%		9.80	%		10.60	%

Return on average tangible common equity consolidated
Net income (loss) attributable to Key common shareholders (GAAP)	$	233		$	227		$	214
Average tangible common equity (non-GAAP)		9,214			9,191			9,158

Return on average tangible common equity consolidated (non-GAAP)		10.14	%		10.02	%		9.37	%

Cash efficiency ratio
Noninterest expense (GAAP)	$	711		$	669		$	687
Less: Intangible asset amortization (GAAP)		9			9			9

Adjusted noninterest expense (non-GAAP)	$	702		$	660		$	678

Net interest income (GAAP)	$	584		$	571		$	573
Plus: Taxable-equivalent adjustment		7			6			6
Noninterest income (GAAP)		488			437			455

Total taxable-equivalent revenue (non-GAAP)	$	1,079		$	1,014		$	1,034

Cash efficiency ratio (non-GAAP)		65.1	%		65.1	%		65.6	%

	Three months ended
	6-30-15
Common Equity Tier 1 under the Regulatory Capital Rules (estimates)
Common Equity Tier 1 under current regulatory rules	$	9,621
Adjustments from current regulatory rules to the Regulatory Capital Rules:
Deferred tax assets and other assets^(g)		(51	)

Common Equity Tier 1 anticipated under the Regulatory Capital Rules^(h)	$	9,570

Net risk-weighted assets under current regulatory rules	$	89,995
Adjustments from current regulatory rules to the Regulatory Capital Rules:
Mortgage servicing assets⁽ⁱ⁾		494
Deferred tax assets⁽ⁱ⁾		22
Significant investments⁽ⁱ⁾		—
Other assets^(j)		(51	)

Total risk-weighted assets anticipated under the Regulatory Capital Rules^(h)	$	90,460

Common Equity Tier 1 ratio under the Regulatory Capital Rules^(h)		10.58	%

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July 16, 2015

Page 17

GAAP to Non-GAAP Reconciliations (continued)

(dollars in millions)


	Six months ended
	6-30-15			6-30-14
Pre-provision net revenue
Net interest income (GAAP)	$	1,155		$	1,136
Plus: Taxable-equivalent adjustment		13			12
Noninterest income (GAAP)		925			890
Less: Noninterest expense (GAAP)		1,380			1,351

Pre-provision net revenue from continuing operations (non-GAAP)	$	713		$	687

Average tangible common equity
Average Key shareholders’ equity (GAAP)	$	10,580		$	10,415
Less: Intangible assets (average)^(k)		1,088			1,011
Preferred Stock, Series A (average)		290			291

Average tangible common equity (non-GAAP)	$	9,202		$	9,113

Return on average tangible common equity from continuing operations
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP)	$	452		$	474
Average tangible common equity (non-GAAP)		9,202			9,113

Return on average tangible common equity from continuing operations (non-GAAP)		9.91	%		10.49	%

Return on average tangible common equity consolidated
Net income (loss) attributable to Key common shareholders (GAAP)	$	460		$	450
Average tangible common equity (non-GAAP)		9,202			9,113

Return on average tangible common equity consolidated (non-GAAP)		10.08	%		9.96	%

Cash efficiency ratio
Noninterest expense (GAAP)	$	1,380		$	1,351
Less: Intangible asset amortization (GAAP)		18			19

Adjusted noninterest expense (non-GAAP)	$	1,362		$	1,332

Net interest income (GAAP)	$	1,155		$	1,136
Plus: Taxable-equivalent adjustment		13			12
Noninterest income (GAAP)		925			890

Total taxable-equivalent revenue (non-GAAP)	$	2,093		$	2,038

Cash efficiency ratio (non-GAAP)		65.1	%		65.4	%

(a)	For the three months ended June 30, 2015, March 31, 2015, and June 30, 2014, intangible assets exclude $55 million, $61 million, and $79 million, respectively, of period-end purchased credit card receivables.

(b)	Net of capital surplus.

(c)	6-30-15 amount is estimated.

(d)

Includes net unrealized gains or losses on securities available for sale (except for net unrealized losses on marketable equity securities), net gains or losses on cash flow hedges, and amounts resulting from the application of the applicable accounting guidance for defined benefit and other postretirement plans.

(e)	Other assets deducted from Tier 1 capital and net risk-weighted assets consist of disallowed intangible assets (excluding goodwill) and deductible portions of nonfinancial equity investments. There were no disallowed deferred tax assets at June 30, 2014.

(f)	For the three months ended June 30, 2015, March 31, 2015, and June 30, 2014, average intangible assets exclude $58 million, $64 million, and $82 million, respectively, of average purchased credit card receivables.

(g)	Includes the deferred tax asset subject to future taxable income for realization, primarily tax credit carryforwards, as well as the deductible portion of purchased credit card receivables.

(h)	The anticipated amount of regulatory capital and risk-weighted assets is based upon the federal banking agencies’ Regulatory Capital Rules (as fully phased-in on January 1, 2019); Key is subject to the Regulatory Capital Rules under the “standardized approach.”

(i)	Item is included in the 10%/15% exceptions bucket calculation and is risk-weighted at 250%.

(j)	Under the fully implemented rule, certain deferred tax assets and intangible assets subject to the transition provision are no longer required to be risk-weighted because they are deducted directly from capital.

(k)	For the six months ended June 30, 2015, and June 30, 2014, average intangible assets exclude $61 million, and $85 million, respectively, of average purchased credit card receivables.

GAAP = U.S. generally accepted accounting principles

KeyCorp Reports Second Quarter 2015 Profit

July 16, 2015

Page 18

Consolidated Balance Sheets

(dollars in millions)


	6-30-15			3-31-15			6-30-14
Assets
Loans	$	58,264		$	57,953		$	55,600
Loans held for sale		835			1,649			435
Securities available for sale		14,244			13,120			12,224
Held-to-maturity securities		5,022			5,005			5,233
Trading account assets		674			789			890
Short-term investments		3,222			3,378			3,176
Other investments		703			730			899

Total earning assets		82,964			82,624			78,457
Allowance for loan and lease losses		(796	)		(794	)		(814	)
Cash and due from banks		693			506			604
Premises and equipment		788			806			844
Operating lease assets		296			306			306
Goodwill		1,057			1,057			979
Other intangible assets		83			92			108
Corporate-owned life insurance		3,502			3,488			3,438
Derivative assets		536			731			549
Accrued income and other assets		3,314			3,144			3,090
Discontinued assets		2,169			2,246			4,237

Total assets	$	94,606		$	94,206		$	91,798

Liabilities
Deposits in domestic offices:
NOW and money market deposit accounts	$	36,024		$	35,623		$	33,637
Savings deposits		2,370			2,413			2,450
Certificates of deposit ($100,000 or more)		2,032			1,982			2,743
Other time deposits		3,105			3,182			3,505

Total interest-bearing deposits		43,531			43,200			42,335
Noninterest-bearing deposits		26,640			27,948			24,781
Deposits in foreign office — interest-bearing		498			474			683

Total deposits		70,669			71,622			67,799
Federal funds purchased and securities sold under repurchase agreements		444			517			1,213
Bank notes and other short-term borrowings		528			608			521
Derivative liabilities		560			825			451
Accrued expense and other liabilities		1,537			1,308			1,400
Long-term debt		10,267			8,713			8,213
Discontinued liabilities		—			—			1,680

Total liabilities		84,005			83,593			81,277

Equity
Preferred stock, Series A		290			290			291
Common shares		1,017			1,017			1,017
Capital surplus		3,898			3,910			3,987
Retained earnings		8,614			8,445			7,950
Treasury stock, at cost		(2,884	)		(2,780	)		(2,452	)
Accumulated other comprehensive income (loss)		(345	)		(279	)		(289	)

Key shareholders’ equity		10,590			10,603			10,504
Noncontrolling interests		11			10			17

Total equity		10,601			10,613			10,521

Total liabilities and equity	$	94,606		$	94,206		$	91,798

Common shares outstanding (000)		843,608			850,920			876,823

KeyCorp Reports Second Quarter 2015 Profit

July 16, 2015

Page 19

Consolidated Statements of Income

(dollars in millions, except per share amounts)


	Three months ended							Six months ended
	6-30-15		3-31-15		6-30-14			6-30-15		6-30-14
Interest income
Loans	$	532	$	523	$	526		$	1,055	$	1,045
Loans held for sale		12		7		5			19		9
Securities available for sale		72		70		71			142		143
Held-to-maturity securities		24		24		23			48		45
Trading account assets		5		5		7			10		13
Short-term investments		2		2		1			4		2
Other investments		5		5		6			10		12

Total interest income		652		636		639			1,288		1,269

Interest expense
Deposits		26		26		31			52		63
Federal funds purchased and securities sold under repurchase agreements		—		—		—			—		1
Bank notes and other short-term borrowings		2		2		2			4		4
Long-term debt		40		37		33			77		65

Total interest expense		68		65		66			133		133

Net interest income		584		571		573			1,155		1,136
Provision for credit losses		41		35		12			76		16

Net interest income after provision for credit losses		543		536		561			1,079		1,120

Noninterest income
Trust and investment services income		111		109		94			220		192
Investment banking and debt placement fees		141		68		99			209		183
Service charges on deposit accounts		63		61		66			124		129
Operating lease income and other leasing gains		24		19		35			43		64
Corporate services income		43		43		41			86		83
Cards and payments income		47		42		43			89		81
Corporate-owned life insurance income		30		31		28			61		54
Consumer mortgage income		4		3		2			7		4
Mortgage servicing fees		9		13		11			22		26
Net gains (losses) from principal investing		11		29		27			40		51
Other income ^(a)		5		19		9			24		23

Total noninterest income		488		437		455			925		890

Noninterest expense
Personnel		408		389		389			797		777
Net occupancy		66		65		68			131		132
Computer processing		42		38		41			80		79
Business services and professional fees		42		33		41			75		82
Equipment		22		22		24			44		48
Operating lease expense		12		11		10			23		20
Marketing		15		8		13			23		18
FDIC assessment		8		8		6			16		12
Intangible asset amortization		9		9		9			18		19
OREO expense, net		1		2		1			3		2
Other expense		86		84		85			170		162

Total noninterest expense		711		669		687			1,380		1,351

Income (loss) from continuing operations before income taxes		320		304		329			624		659
Income taxes		84		74		76			158		168

Income (loss) from continuing operations		236		230		253			466		491
Income (loss) from discontinued operations, net of taxes		3		5		(28	)		8		(24	)

Net income (loss)		239		235		225			474		467
Less: Net income (loss) attributable to noncontrolling interests		1		2		6			3		6

Net income (loss) attributable to Key	$	238	$	233	$	219		$	471	$	461

Income (loss) from continuing operations attributable to Key common shareholders	$	230	$	222	$	242		$	452	$	474
Net income (loss) attributable to Key common shareholders		233		227		214			460		450

Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	.27	$	.26	$	.28		$	.53	$	.54
Income (loss) from discontinued operations, net of taxes		—		.01		(.03	)		.01		(.03	)
Net income (loss) attributable to Key common shareholders ^(b)		.28		.27		.24			.54		.51

Per common share — assuming dilution
Income (loss) from continuing operations attributable to Key common shareholders	$	.27	$	.26	$	.27		$	.52	$	.53
Income (loss) from discontinued operations, net of taxes		—		.01		(.03	)		.01		(.03	)
Net income (loss) attributable to Key common shareholders ^(b)		.27		.26		.24			.53		.51

Cash dividends declared per common share	$	.075	$	.065	$	.065		$	.14	$	.12

Weighted-average common shares outstanding (000)		839,454		848,580		875,298			843,992		879,986
Effect of convertible preferred stock		—		—		20,602			—		—
Effect of common share options and other stock awards		6,858		8,542		6,237			7,695		6,698

Weighted-average common shares and potential common shares outstanding (000) ^(c)		846,312		857,122		902,137			851,687		886,684

(a)

For each of the three months ended June 30, 2015, March 31, 2015, and June 30, 2014, net securities gains (losses) totaled less than $1 million. For the three months ended June 30, 2015, and June 30, 2014, Key did not have any impairment losses related to securities. For the three months ended March 31, 2015, impairment losses related to securities totaled less than $1 million.

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

(c)	Assumes conversion of common share options and other stock awards and/or convertible preferred stock, as applicable.

KeyCorp Reports Second Quarter 2015 Profit

July 16, 2015

Page 20

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

(dollars in millions)


	Second Quarter 2015								First Quarter 2015								Second Quarter 2014
	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, financial and agricultural^(d)	$	29,017		$	233		3.23	%	$	28,321		$	223		3.18	%	$	26,444		$	219		3.31	%
Real estate — commercial mortgage		7,981			74		3.70			8,095			73		3.67			7,880			74		3.79
Real estate — construction		1,199			11		3.60			1,139			11		3.90			1,049			11		4.03
Commercial lease financing		3,981			36		3.58			4,070			36		3.57			4,257			38		3.54

Total commercial loans		42,178			354		3.36			41,625			343		3.33			39,630			342		3.45
Real estate — residential mortgage		2,237			23		4.22			2,229			24		4.26			2,189			24		4.41
Home equity:
Key Community Bank		10,266			99		3.89			10,316			99		3.89			10,321			100		3.92
Other		244			5		7.86			260			5		7.82			306			6		7.80

Total home equity loans		10,510			104		3.98			10,576			104		3.99			10,627			106		4.03
Consumer other — Key Community Bank		1,571			26		6.52			1,546			25		6.66			1,479			26		6.97
Credit cards		737			19		10.57			732			20		11.01			702			18		10.39
Consumer other:
Marine		702			11		6.30			755			12		6.35			926			15		6.18
Other		43			1		7.77			49			1		7.32			58			1		8.09

Total consumer other		745			12		6.38			804			13		6.41			984			16		6.29

Total consumer loans		15,800			184		4.69			15,887			186		4.74			15,981			190		4.77

Total loans		57,978			538		3.72			57,512			529		3.72			55,611			532		3.83
Loans held for sale		1,263			12		3.91			795			7		3.33			458			5		4.14
Securities available for sale^{(b), (e)}		13,360			73		2.17			13,087			70		2.17			12,408			71		2.30
Held-to-maturity securities^(b)		4,965			24		1.91			4,947			24		1.93			4,973			23		1.87
Trading account assets		805			5		2.55			717			5		2.80			985			7		2.80
Short-term investments		3,228			2		.26			2,399			2		.27			2,475			1		.17
Other investments^(e)		713			5		2.48			742			5		2.79			888			6		2.64

Total earning assets		82,312			659		3.21			80,199			642		3.23			77,798			645		3.31
Allowance for loan and lease losses		(793	)							(793	)							(824	)
Accrued income and other assets		10,140								10,223								9,767
Discontinued assets		2,194								2,271								4,341

Total assets	$	93,853							$	91,900							$	91,082

Liabilities
NOW and money market deposit accounts	$	36,122			14		.16		$	34,952			13		.15		$	34,283			11		.14
Savings deposits		2,393			—		.02			2,385			—		.02			2,493			—		.03
Certificates of deposit ($100,000 or more)^(f)		2,010			6		1.25			2,017			7		1.30			2,808			10		1.39
Other time deposits		3,136			5		.70			3,217			6		.72			3,587			9		.98
Deposits in foreign office		583			1		.23			529			—		.22			662			1		.23

Total interest-bearing deposits		44,244			26		.24			43,100			26		.24			43,833			31		.28
Federal funds purchased and securities sold under repurchase agreements		557			—		.02			720			—		.03			1,470			—		.19
Bank notes and other short-term borrowings		657			2		1.39			506			2		1.56			545			2		1.54
Long-term debt^{(f), (g)}		6,968			40		2.30			6,126			37		2.52			5,476			33		2.51

Total interest-bearing liabilities		52,426			68		.52			50,452			65		.52			51,324			66		.52

Noninterest-bearing deposits		26,594								26,269								23,290
Accrued expense and other liabilities		2,039								2,327								1,654
Discontinued liabilities^(g)		2,194								2,271								4,341

Total liabilities		83,253								81,319								80,609
Equity
Key shareholders’ equity		10,590								10,570								10,459
Noncontrolling interests		10								11								14

Total equity		10,600								10,581								10,473

Total liabilities and equity	$	93,853							$	91,900							$	91,082

Interest rate spread (TE)							2.69	%							2.71	%							2.79	%

Net interest income (TE) and net interest margin (TE)					591		2.88	%					577		2.91	%					579		2.98	%

TE adjustment^(b)					7								6								6

Net interest income, GAAP basis				$	584							$	571							$	573

(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 35%.

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

(d)	Commercial, financial and agricultural average balances include $88 million, $87 million, and $95 million of assets from commercial credit cards for the three months ended June 30, 2015, March 31, 2015, and June 30, 2014, 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 our matched funds transfer pricing methodology to discontinued operations.

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

KeyCorp Reports Second Quarter 2015 Profit

July 16, 2015

Page 21

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

(dollars in millions)


	Six months ended June 30, 2015								Six months ended June 30, 2014
	Average Balance			Interest^(a)		Yield/Rate ^(a)			Average Balance			Interest^(a)		Yield/Rate ^(a)
Assets
Loans:^{(b), (c)}
Commercial, financial and agricultural ^(d)	$	28,671		$	456		3.21	%	$	25,920		$	425		3.30	%
Real estate — commercial mortgage		8,038			147		3.68			7,844			148		3.82
Real estate — construction		1,169			22		3.75			1,069			23		4.29
Commercial lease financing		4,025			72		3.57			4,348			80		3.67

Total commercial loans		41,903			697		3.35			39,181			676		3.47
Real estate — residential mortgage		2,233			47		4.24			2,188			48		4.42
Home equity:
Key Community Bank		10,291			198		3.89			10,313			200		3.92
Other		252			10		7.84			315			12		7.79

Total home equity loans		10,543			208		3.99			10,628			212		4.03
Consumer other — Key Community Bank		1,558			51		6.59			1,459			51		7.01
Credit cards		735			39		10.79			702			38		10.83
Consumer other:
Marine		728			23		6.32			961			30		6.18
Other		46			2		7.54			62			2		7.80

Total consumer other		774			25		6.40			1,023			32		6.28

Total consumer loans		15,843			370		4.71			16,000			381		4.80

Total loans		57,746			1,067		3.72			55,181			1,057		3.86
Loans held for sale		1,030			19		3.68			452			9		3.75
Securities available for sale^{(b), (e)}		13,225			143		2.17			12,378			143		2.31
Held-to-maturity securities^(b)		4,956			48		1.92			4,870			45		1.86
Trading account assets		762			10		2.67			983			13		2.66
Short-term investments		2,816			4		.26			2,480			2		.17
Other investments^(e)		727			10		2.64			912			12		2.61

Total earning assets		81,262			1,301		3.22			77,256			1,281		3.32
Allowance for loan and lease losses		(793	)							(833	)
Accrued income and other assets		10,181								9,779
Discontinued assets		2,232								4,417

Total assets	$	92,882							$	90,619

Liabilities
NOW and money market deposit accounts	$	35,540			27		.15		$	34,174			23		.14
Savings deposits		2,389			—		.02			2,484			—		.03
Certificates of deposit ($100,000 or more)^(f)		2,014			13		1.28			2,783			20		1.45
Other time deposits		3,176			11		.71			3,633			19		1.02
Deposits in foreign office		556			1		.23			661			1		.22

Total interest-bearing deposits		43,675			52		.24			43,735			63		.29
Federal funds purchased and securities sold under repurchase agreements		638			—		.03			1,470			1		.18
Bank notes and other short-term borrowings		582			4		1.46			565			4		1.59
Long-term debt^{(f), (g)}		6,550			77		2.40			5,323			65		2.54

Total interest-bearing liabilities		51,445			133		.52			51,093			133		.53

Noninterest-bearing deposits		26,432								22,976
Accrued expense and other liabilities		2,182								1,702
Discontinued liabilities^(g)		2,232								4,417

Total liabilities		82,291								80,188
Equity
Key shareholders’ equity		10,580								10,415
Noncontrolling interests		11								16

Total equity		10,591								10,431

Total liabilities and equity	$	92,882							$	90,619

Interest rate spread (TE)							2.70	%							2.79	%

Net interest income (TE) and net interest margin (TE)					1,168		2.89	%					1,148		2.99	%

TE adjustment^(b)					13								12

Net interest income, GAAP basis				$	1,155							$	1,136

(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 35%.

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

(d)	Commercial, financial and agricultural average balances include $88 million and $95 million of assets from commercial credit cards for the six months ended June 30, 2015, and June 30, 2014, 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 our matched funds transfer pricing methodology to discontinued operations.

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

KeyCorp Reports Second Quarter 2015 Profit

July 16, 2015

Page 22

Noninterest Expense

(dollars in millions)


	Three months ended						Six months ended
	6-30-15		3-31-15		6-30-14		6-30-15		6-30-14
Personnel ^(a)	$	408	$	389	$	389	$	797	$	777
Net occupancy		66		65		68		131		132
Computer processing		42		38		41		80		79
Business services and professional fees		42		33		41		75		82
Equipment		22		22		24		44		48
Operating lease expense		12		11		10		23		20
Marketing		15		8		13		23		18
FDIC assessment		8		8		6		16		12
Intangible asset amortization		9		9		9		18		19
OREO expense, net		1		2		1		3		2
Other expense		86		84		85		170		162

Total noninterest expense	$	711	$	669	$	687	$	1,380	$	1,351

Average full-time equivalent employees ^(b)		13,455		13,591		13,867		13,512		13,961

(a)	Additional detail provided in table below.

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

Personnel Expense

(in millions)


	Three months ended						Six months ended
	6-30-15		3-31-15		6-30-14		6-30-15		6-30-14
Salaries	$	229	$	218	$	224	$	447	$	444
Technology contract labor, net		10		10		14		20		31
Incentive and stock-based compensation		109		83		91		192		174
Employee benefits		55		72		50		127		113
Severance		5		6		10		11		15

Total personnel expense	$	408	$	389	$	389	$	797	$	777

KeyCorp Reports Second Quarter 2015 Profit

July 16, 2015

Page 23

Loan Composition

(dollars in millions)


							Percent change 6-30-15 vs.
	6-30-15		3-31-15		6-30-14		3-31-15			6-30-14
Commercial, financial and agricultural ^(a)	$	29,285	$	28,783	$	26,327		1.7	%		11.2	%
Commercial real estate:
Commercial mortgage		7,874		8,162		7,946		(3.5	)		(.9	)
Construction		1,254		1,142		1,047		9.8			19.8

Total commercial real estate loans		9,128		9,304		8,993		(1.9	)		1.5
Commercial lease financing ^(b)		4,010		4,064		4,241		(1.3	)		(5.4	)

Total commercial loans		42,423		42,151		39,561		.6			7.2
Residential — prime loans:
Real estate — residential mortgage		2,252		2,231		2,189		.9			2.9
Home equity:
Key Community Bank		10,296		10,270		10,379		.3			(.8	)
Other		236		253		300		(6.7	)		(21.3	)

Total home equity loans		10,532		10,523		10,679		.1			(1.4	)

Total residential — prime loans		12,784		12,754		12,868		.2			(.7	)
Consumer other — Key Community Bank		1,595		1,547		1,514		3.1			5.4
Credit cards		753		727		718		3.6			4.9
Consumer other:
Marine		673		730		888		(7.8	)		(24.2	)
Other		36		44		51		(18.2	)		(29.4	)

Total consumer other		709		774		939		(8.4	)		(24.5	)

Total consumer loans		15,841		15,802		16,039		.2			(1.2	)

Total loans^{(c), (d)}	$	58,264	$	57,953	$	55,600		.5	%		4.8	%

Loans Held for Sale Composition

(dollars in millions)


							Percent change 6-30-15 vs.
	6-30-15		3-31-15		6-30-14		3-31-15			6-30-14
Commercial, financial and agricultural	$	217	$	183	$	181		18.6	%		19.9	%
Real estate — commercial mortgage		576		1,408		221		(59.1	)		160.6
Commercial lease financing		7		14		10		(50.0	)		(30.0	)
Real estate — residential mortgage		35		44		23		(20.5	)		52.2

Total loans held for sale^(e)	$	835	$	1,649	$	435		(49.4	)%		92.0	%

Summary of Changes in Loans Held for Sale

(in millions)


	2Q15			1Q15			4Q14			3Q14			2Q14
Balance at beginning of period	$	1,649		$	734		$	784		$	435		$	401
New originations		1,650			2,130			2,465			1,593			978
Transfers from (to) held to maturity, net		6			10			2			—			(8	)
Loan sales		(2,466	)		(1,204	)		(2,516	)		(1,243	)		(934	)
Loan draws (payments), net		(4	)		(21	)		(1	)		(1	)		(2	)

Balance at end of period^(e)	$	835		$	1,649		$	734		$	784		$	435

(a)	Loan balances include $89 million, $87 million, and $94 million of commercial credit card balances at June 30, 2015, March 31, 2015, and June 30, 2014, respectively.

(b)	Commercial lease financing includes receivables held as collateral for a secured borrowing of $191 million, $230 million, and $375 million at June 30, 2015, March 31, 2015, and June 30, 2014, respectively. Principal reductions are based on the cash payments received from these related receivables.

(c)

At June 30, 2015, total loans include purchased loans of $125 million, of which $12 million were purchased credit impaired. At March 31, 2015, total loans include purchased loans of $130 million, of which $12 million were purchased credit impaired. At June 30, 2014, total loans include purchased loans of $151 million, of which $15 million were purchased credit impaired.

(d)	Total loans exclude loans of $2 billion at June 30, 2015, $2.2 billion at March 31, 2015, and $4.2 billion at June 30, 2014, related to the discontinued operations of the education lending business.

(e)	Total loans held for sale exclude loans held for sale of $179 million at June 30, 2015, related to the discontinued operations of the education lending business.

N/M = Not Meaningful

KeyCorp Reports Second Quarter 2015 Profit

July 16, 2015

Page 24

Exit Loan Portfolio From Continuing Operations

(in millions)


	Balance Outstanding				Change 6-30-15 vs. 3-31-15			Net Loan Charge-offs					Balance on Nonperforming Status
	6-30-15		3-31-15		Change 6-30-15 vs. 3-31-15			2Q15		1Q15^(c)			6-30-15		3-31-15
Residential properties — homebuilder	$	6	$	6		—			—	$	1		$	8	$	8
Marine and RV floor plan		2		6	$	(4	)		—		—			1		5
Commercial lease financing^(a)		831		877		(46	)		—		(1	)		—		—

Total commercial loans		839		889		(50	)		—		—			9		13
Home equity — Other		236		253		(17	)	$	1		—			8		9
Marine		673		730		(57	)		3		2			8		9
RV and other consumer		47		50		(3	)		—		1			1		1

Total consumer loans		956		1,033		(77	)		4		3			17		19

Total exit loans in loan portfolio	$	1,795	$	1,922	$	(127	)	$	4	$	3		$	26	$	32

Discontinued operations — education lending business (not included in exit loans above)^(b)	$	1,962	$	2,219	$	(257	)	$	2	$	6		$	6	$	8

(a)

Includes (1) the business aviation, commercial vehicle, office products, construction, and industrial leases; (2) Canadian lease financing portfolios; (3) European lease financing portfolios; and (4) all remaining balances related to lease in, lease out; sale in, lease out; service contract leases; and qualified technological equipment leases.

(b)	Excludes loans held for sale of $179 million at June 30, 2015.

(c)	Credit amounts indicate recoveries exceeded charge-offs.

Asset Quality Statistics From Continuing Operations

(dollars in millions)


	2Q15			1Q15			4Q14			3Q14			2Q14
Net loan charge-offs	$	36		$	28		$	32		$	31		$	30
Net loan charge-offs to average total loans		.25	%		.20	%		.22	%		.22	%		.22	%
Allowance for loan and lease losses	$	796		$	794		$	794		$	804		$	814
Allowance for credit losses^(a)		841			835			829			839			851
Allowance for loan and lease losses to period-end loans		1.37	%		1.37	%		1.38	%		1.43	%		1.46	%
Allowance for credit losses to period-end loans		1.44			1.44			1.44			1.49			1.53
Allowance for loan and lease losses to nonperforming loans		190.0			181.7			190.0			200.5			205.6
Allowance for credit losses to nonperforming loans		200.7			191.1			198.3			209.2			214.9
Nonperforming loans at period end^(b)	$	419		$	437		$	418		$	401		$	396
Nonperforming assets at period end		440			457			436			418			410
Nonperforming loans to period-end portfolio loans		.72	%		.75	%		.73	%		.71	%		.71	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		.75			.79			.76			.74			.74

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

(b)	Loan balances exclude $12 million, $12 million, $13 million, $14 million, and $15 million of purchased credit impaired loans at June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014, and June 30, 2014, respectively.

KeyCorp Reports Second Quarter 2015 Profit

July 16, 2015

Page 25

Summary of Loan and Lease Loss Experience From Continuing Operations

(dollars in millions)


	Three months ended									Six months ended
	6-30-15			3-31-15			6-30-14			6-30-15			6-30-14
Average loans outstanding	$	57,978		$	57,512		$	55,611		$	57,746		$	55,181

Allowance for loan and lease losses at beginning of period	$	794		$	794		$	834		$	794		$	848
Loans charged off:
Commercial, financial and agricultural		21			12			11			33			23

Real estate — commercial mortgage		—			2			1			2			3
Real estate — construction		—			1			—			1			2

Total commercial real estate loans		—			3			1			3			5
Commercial lease financing		1			2			2			3			5

Total commercial loans		22			17			14			39			33
Real estate — residential mortgage		1			2			2			3			5
Home equity:
Key Community Bank		8			7			10			15			20
Other		2			1			3			3			6

Total home equity loans		10			8			13			18			26
Consumer other — Key Community Bank		6			6			8			12			16
Credit cards		8			8			12			16			18
Consumer other:
Marine		5			5			7			10			14
Other		—			1			—			1			1

Total consumer other		5			6			7			11			15

Total consumer loans		30			30			42			60			80

Total loans charged off		52			47			56			99			113
Recoveries:
Commercial, financial and agricultural		6			5			11			11			21

Real estate — commercial mortgage		—			2			1			2			2
Real estate — construction		1			—			1			1			15

Total commercial real estate loans		1			2			2			3			17
Commercial lease financing		1			4			4			5			6

Total commercial loans		8			11			17			19			44
Real estate — residential mortgage		1			—			1			1			2
Home equity:
Key Community Bank		1			2			1			3			4
Other		1			1			2			2			3

Total home equity loans		2			3			3			5			7
Consumer other — Key Community Bank		2			2			1			4			3
Credit cards		1			—			1			1			1
Consumer other:
Marine		2			3			2			5			5
Other		—			—			1			—			1

Total consumer other		2			3			3			5			6

Total consumer loans		8			8			9			16			19

Total recoveries		16			19			26			35			63

Net loan charge-offs		(36	)		(28	)		(30	)		(64	)		(50	)
Provision (credit) for loan and lease losses		37			29			10			66			16
Foreign currency translation adjustment		1			(1	)		—			—			—

Allowance for loan and lease losses at end of period	$	796		$	794		$	814		$	796		$	814

Liability for credit losses on lending-related commitments at beginning of period	$	41		$	35		$	35		$	35		$	37
Provision (credit) for losses on lending-related commitments		4			6			2			10			—

Liability for credit losses on lending-related commitments at end of period^(a)	$	45		$	41		$	37		$	45		$	37

Total allowance for credit losses at end of period	$	841		$	835		$	851		$	841		$	851

Net loan charge-offs to average total loans		.25	%		.20	%		.22	%		.22	%		.18	%
Allowance for loan and lease losses to period-end loans		1.37			1.37			1.46			1.37			1.46
Allowance for credit losses to period-end loans		1.44			1.44			1.53			1.44			1.53
Allowance for loan and lease losses to nonperforming loans		190.0			181.7			205.6			190.0			205.6
Allowance for credit losses to nonperforming loans		200.7			191.1			214.9			200.7			214.9
Discontinued operations — education lending business:

Loans charged off	$	6		$	10		$	11		$	16		$	24
Recoveries		4			4			4			8			8

Net loan charge-offs	$	(2	)	$	(6	)	$	(7	)	$	(8	)	$	(16	)

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

KeyCorp Reports Second Quarter 2015 Profit

July 16, 2015

Page 26

Summary of Nonperforming Assets and Past Due Loans From Continuing Operations

(dollars in millions)


	6-30-15			3-31-15			12-31-14			9-30-14			6-30-14
Commercial, financial and agricultural	$	100		$	98		$	59		$	47		$	37
Real estate — commercial mortgage		26			30			34			41			38
Real estate — construction		12			12			13			14			9

Total commercial real estate loans		38			42			47			55			47
Commercial lease financing		18			20			18			14			15

Total commercial loans		156			160			124			116			99
Real estate — residential mortgage		67			72			79			81			89
Home equity:
Key Community Bank		176			182			185			174			178
Other		8			9			10			10			11

Total home equity loans		184			191			195			184			189
Consumer other — Key Community Bank		1			2			2			2			2
Credit cards		2			2			2			1			1
Consumer other:
Marine		8			9			15			16			15
Other		1			1			1			1			1

Total consumer other		9			10			16			17			16

Total consumer loans		263			277			294			285			297

Total nonperforming loans^(a)		419			437			418			401			396
Nonperforming loans held for sale		—			—			—			—			1
OREO		20			20			18			16			12
Other nonperforming assets		1			—			—			1			1

Total nonperforming assets	$	440		$	457		$	436		$	418		$	410

Accruing loans past due 90 days or more	$	66		$	111		$	96		$	71		$	83
Accruing loans past due 30 through 89 days		181			216			235			340			274
Restructured loans — accruing and nonaccruing^(b)		300			268			270			264			266
Restructured loans included in nonperforming loans^(b)		170			141			157			137			142
Nonperforming assets from discontinued operations — education lending business		6			8			11			9			19
Nonperforming loans to period-end portfolio loans		.72	%		.75	%		.73	%		.71	%		.71	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		.75			.79			.76			.74			.74

(a)	Loan balances exclude $12 million, $12 million, $13 million, $14 million, and $15 million of purchased credit impaired loans at June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014, and June 30, 2014, respectively.

(b)

Restructured loans (i.e., troubled debt restructurings) 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.

KeyCorp Reports Second Quarter 2015 Profit

July 16, 2015

Page 27

Summary of Changes in Nonperforming Loans From Continuing Operations

(in millions)


	2Q15			1Q15			4Q14			3Q14			2Q14
Balance at beginning of period	$	437		$	418		$	401		$	396		$	449
Loans placed on nonaccrual status		92			123			103			109			79
Charge-offs		(52	)		(47	)		(49	)		(49	)		(56	)
Loans sold		—			—			(2	)		—			(21	)
Payments		(25	)		(9	)		(17	)		(13	)		(17	)
Transfers to OREO		(5	)		(7	)		(6	)		(7	)		(4	)
Loans returned to accrual status		(28	)		(41	)		(12	)		(35	)		(34	)

Balance at end of period^(a)	$	419		$	437		$	418		$	401		$	396

(a)	Loan balances exclude $12 million, $12 million, $13 million, $14 million, and $15 million of purchased credit impaired loans at June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014, and June 30, 2014, respectively.

Summary of Changes in Other Real Estate Owned, Net of Allowance, From Continuing Operations

(in millions)


	2Q15			1Q15			4Q14			3Q14			2Q14
Balance at beginning of period	$	20		$	18		$	16		$	12		$	12
Properties acquired — nonperforming loans		5			7			6			7			4
Valuation adjustments		(1	)		(1	)		(2	)		(1	)		(1	)
Properties sold		(4	)		(4	)		(2	)		(2	)		(3	)

Balance at end of period	$	20		$	20		$	18		$	16		$	12

KeyCorp Reports Second Quarter 2015 Profit

July 16, 2015

Page 28

Line of Business Results

(dollars in millions)


																Percent change 2Q15 vs.
	2Q15			1Q15			4Q14			3Q14			2Q14			1Q15			2Q14
Key Community Bank
Summary of operations
Total revenue (TE)	$	559		$	549		$	558		$	558		$	553			1.8	%		1.1	%
Provision for credit losses		7			29			12			27			25			(75.9	)		(72.0	)
Noninterest expense		449			441			448			440			443			1.8			1.4
Net income (loss) attributable to Key		65			50			61			57			53			30.0			22.6
Average loans and leases		30,707			30,662			30,478			30,103			30,034			.1			2.2
Average deposits		50,766			50,417			50,850			50,302			50,232			.7			1.1
Net loan charge-offs		20			28			28			28			33			(28.6	)		(39.4	)
Net loan charge-offs to average total loans		.26	%		.37	%		.36	%		.37	%		.44	%		N/A			N/A
Nonperforming assets at period end	$	305		$	328		$	340		$	338		$	331			(7.0	)		(7.9	)
Return on average allocated equity		9.75	%		7.41	%		9.00	%		8.44	%		7.83	%		N/A			N/A
Average full-time equivalent employees		7,400			7,452			7,414			7,573			7,569			(.7	)		(2.2	)

Key Corporate Bank
Summary of operations
Total revenue (TE)	$	477		$	401		$	460		$	400		$	395			19.0	%		20.8	%
Provision for credit losses		38			8			4			(3	)		(4	)		375.0			N/M
Noninterest expense		252			216			245			215			207			16.7			21.7
Net income (loss) attributable to Key		135			127			151			136			135			6.3			—
Average loans and leases		25,298			24,722			23,798			23,215			22,886			2.3			10.5
Average loans held for sale		1,234			775			855			481			429			59.2			187.6
Average deposits		19,708			18,567			18,356			17,600			16,357			6.1			20.5
Net loan charge-offs		12			(4	)		(3	)		(1	)		(2	)		N/M			N/M
Net loan charge-offs to average total loans		.19	%		(.07	)%		(.05	)%		(.02	)%		(.04	)%		N/A			N/A
Nonperforming assets at period end	$	105		$	93		$	41		$	20		$	22			12.9			377.3
Return on average allocated equity		30.15	%		27.66	%		34.17	%		32.08	%		35.72	%		N/A			N/A
Average full-time equivalent employees		2,058			2,057			2,043			1,998			1,940			—			6.1

TE = Taxable Equivalent, N/A = Not Applicable, N/M = Not Meaningful

KeyCorp

Second Quarter 2015 Earnings Review

July 16, 2015

Beth E. Mooney

Chairman and

Chief Executive Officer

Don Kimble

Chief Financial Officer

Exhibit 99.2

FORWARD-LOOKING STATEMENTS AND ADDITIONAL

INFORMATION DISCLOSURE

This presentation 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 management’s 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 actual results to differ from those

described in forward-looking statements include, but are not limited to: (1) deterioration of commercial real estate market fundamentals; (2) declining

asset prices; (3) adverse changes in credit quality trends; (4) our concentrated credit exposure in commercial, financial, and agricultural loans; (5)

defaults by our loan counterparties or clients; (6) the extensive and increasing regulation of the U.S. financial services industry; (7) changes in

accounting policies, standards, and interpretations; (8) increasing capital and liquidity standards under applicable regulatory rules; (9) unanticipated

changes in our liquidity position, including but not limited to, changes in the cost of liquidity, our ability to enter the financial markets and to secure

alternative funding sources; (10) our ability to receive dividends from our subsidiary, KeyBank; (11) downgrades in our credit ratings or those of

KeyBank; (12) operational or risk management failures by us or critical third-parties; (13) breaches of security or failures of our technology systems

due to technological or other factors and cybersecurity threats; (14) negative outcomes from claims or litigation; (15) the occurrence of natural or

man-made disasters or conflicts or terrorist attacks; (16) a reversal of the U.S. economic recovery due to financial, political or other shocks; (17) our

ability to anticipate interest rate changes and manage interest rate risk; (18) deterioration of economic conditions in the geographic regions where we

operate; (19) the soundness of other financial institutions; (20) our ability to attract and retain talented executives and employees and to manage our

reputational risks; (21) our ability to timely and effectively implement our strategic initiatives; (22) increased competitive pressure due to industry

consolidation; (23) unanticipated adverse effects of strategic partnerships or acquisitions and dispositions of assets or businesses; and (24) our ability

to develop and effectively use the quantitative models we rely upon in our business planning.

We provide greater detail regarding these factors in our 2014 Form 10-K and subsequent filings, which are available online at www.key.com/ir and

www.sec.gov. Any forward-looking statements made by us or on our behalf speak only as of the date they are made, and Key does not undertake any

obligation to update any forward-looking statement to reflect the impact of subsequent events or circumstances.

This

presentation

also

includes

certain

non-GAAP

financial

measures

“tangible

common

equity,”

“Common

Equity

Tier

1,”

“Tier

common

equity,” “pre-provision net revenue,” and “cash efficiency ratio.” Management believes these ratios may assist investors, analysts and regulators in

analyzing Key’s financials. Although Key has procedures in place to ensure that these measures are calculated using the appropriate GAAP or

regulatory components, they have limitations as analytical tools and should not be considered in isolation, or as a substitute for analysis of results

under GAAP. For more information on these calculations and to view the reconciliations to the most comparable GAAP measures, please refer to the

Appendix of this presentation and to page 95 of our Form 10-Q dated March 31, 2015.

Generated positive operating leverage

Revenue up 4% from 2Q14, benefitting from growth in fee income and loans

Record quarter for investment banking and debt placement: $141 MM, up 42%

Trust and investment services up 18%

Cards and payments up 9%

Expense growth from prior year reflects higher performance-based

compensation and the 3Q14 acquisition of Pacific Crest Securities

Asset quality remains strong

NCOs represented 25 bps of average loans in 2Q15, below targeted range

NPLs remain at a low level: 72 bps of period-end loans

Remaining disciplined with structure and relationship focus

Strong Risk

Management

Strong Risk

Management

Repurchased

$129

million

common

2Q15

(a)

Increased quarterly common share dividend by 15% in 2Q15

Total 2015 payout estimated to be among the highest in our peer group for

third consecutive year

Positive

Operating

Leverage

Positive

Operating

Leverage

Investor Highlights –

2Q15

Disciplined

Capital

Management

Disciplined

Capital

Management

(a)

Common share repurchase amount includes repurchases to offset issuances of common shares under our employee compensation plans

Financial Review

Financial Highlights

TE = Taxable equivalent, EOP = End of Period

(a)

From continuing operations

(b)

Year-over-year average balance growth

(c)

From consolidated operations

(d)

6-30-15 ratios are estimated

(e)

Non-GAAP measure: see Appendix for reconciliation

EPS –

assuming dilution

$ .27

$ .26

$ .28

$ .23

$ .27

Cash efficiency

ratio

(e)

65.1

64.4

69.7

65.6

Net interest margin (TE)

2.88

2.91

2.94

2.96

2.98

Return on average total assets

1.03

1.12

.92

1.14

Total loans and leases

CF&A

loans

Deposits

(excl. foreign deposits)

Common

Equity

Tier

(d),

(e)

10.7

10.6

Tier

common

equity

(e)

11.2

11.3

Tier

risk-based

capital

(d)

11.1

11.0

11.9

12.0

Tangible

common

equity

tangible

assets

(e)

9.9

10.3

10.2

NCOs to average loans

.25

.20

.22

NPLs to EOP portfolio loans

.72

.75

.73

.71

Allowance for loan losses to EOP loans

1.37

1.38

1.43

1.46

Balance

Sheet

Growth

(a),

(b)

Balance

Sheet

Growth

(a),

(b)

Capital

(c)

Capital

(c)

Asset

Quality

(a)

Asset

Quality

(a)

Financial

Performance

(a)

Metrics

2Q15

1Q15

4Q14

3Q14

2Q14

$21.0

$23.0

$25.0

$27.0

$29.0

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

Average total loans up 4% in 2Q15 from prior year,

driven by CF&A up 10%

–

Average total loans up in both the

Community Bank and the Corporate Bank

Loan growth continues to be driven primarily by

CF&A loans

Total commitments continue to grow with

utilization relatively stable

Loan Growth

$ in billions

Highlights

Average Commercial, Financial & Agricultural Loans

Average Loans

Exit Portfolios

Home Equity & Other

Total Commercial

$ in billions

$55.6

$26.4

$29.0

$58.0

Improving Deposit Mix

Highlights

Funding Cost

Deposit cost continues to improve compared to

prior year

Transaction deposit balances up 9% from 2Q14

Deposit growth of 6% from 2Q14 and 2% from

1Q15 reflects:

–

Strength in commercial mortgage servicing

–

Inflows from both commercial and

consumer clients

Average

Deposits

(a)

Average

Deposits

(a)

$ in billions

Note: Transaction deposits include noninterest-bearing, as well as NOW and MMDA

(a)

Excludes deposits in foreign office

Cost of total deposits

(a)

Interest-bearing liability cost

CDs and other time deposits

Savings

Noninterest-bearing

NOW and MMDA

.18%

.15%

.52%

.00%

.20%

.40%

.60%

.80%

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

$66.5

$70.3

$579

$591

2.98%

2.88%

2.00%

2.50%

3.00%

3.50%

4.00%

$500

$540

$580

$620

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

Net Interest Income and Margin

TE = Taxable equivalent

Highlights

Net Interest Income & Net Interest Margin Trend (TE)

Net interest income up $12 MM, or 2%, from the

prior year, reflecting higher earning asset balances

mitigated by lower earning asset yields

NII up $14 MM, or 2%, from the prior quarter,

primarily due to higher earning asset balances and

more days in the second quarter of 2015

Issued $1.75 B bank-level long-term debt in 2Q15,

benefitting LCR and credit ratings profile

Maintaining moderate asset sensitive position

–

Naturally asset sensitive balance sheet flows:

approximately 70% of loans variable rate

–

High quality investment portfolio with average

life of 3.8 years

–

Flexibility to quickly adjust interest rate risk

position

Net interest income (TE)

NIM (TE)

$ in millions; continuing operations

NIM Change (bps):

vs. 1Q15

Higher levels of liquidity

(.02)

Lower earning asset yields

(.01)

Total Change

(.03)

23%

29%

13%

10%

Trust & Investment Services

Investment Banking & Debt

Placement

Deposit Service Charges

Cards & Payments

Corporate Services

Mortgage Fees

Operating Lease Income

Other

Noninterest Income

Highlights

Noninterest Income

Noninterest income up 7% from prior year, driven

by strength in core businesses:

–

Record quarter for investment banking and

debt placement fees; $141 MM, up 42%

–

Trust and investment services 18% higher

–

Cards and payments up 9%

Noninterest income up 12% from prior quarter

–

Investment banking and debt placement fees

more than doubled

–

Cards and payments income up 12%

2Q15 growth more than offset lower gains from

principal investing (compared to prior year and

prior quarter) and a $17 MM gain from the early

termination of a leveraged lease in 2Q14

2Q15 Noninterest Income Diversity

$ in millions; continuing operations

(a)

Other includes corporate-owned life insurance, principal investing, etc.

$150

$225

$300

$375

$450

$525

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

Leveraged lease termination gains

$455

(a)

$488

$400

$500

$600

$700

$800

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

Focused Expense Management

Noninterest Expense

$ in millions

Highlights

$687

2Q15 noninterest expense up 3% from prior year,

primarily attributed to:

–

Performance-based compensation

–

Costs associated with the 3Q14 acquisition of

Pacific Crest

2Q15 included $10 MM of costs associated with

continuous improvement and efficiency efforts

Expense growth of 6% from 1Q15 driven by:

–

Performance-based compensation

–

Seasonal trends

•

Annual merit increases

•

Increased day count

•

Higher marketing spend

•

Lower employee benefits expense

–

Business services and professional fees

(a)

Non-GAAP measure: see Appendix for reconciliation

(b)

3Q12 excludes one-time gains of $54 million related to the redemption of trust preferred securities

Cash Efficiency Ratio

(a), (b)

Cash Efficiency Ratio

(a), (b)

Cash efficiency ratio, excl. costs for continuous improvement efforts

$711

$30

$36

$12

$41

.22%

.25%

.00%

.20%

.40%

.60%

$10

$20

$30

$40

$50

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

.71%

.72%

0.40%

0.80%

1.20%

1.60%

$200

$400

$600

$800

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

Nonperforming Assets

Net Charge-offs & Provision for Credit Losses

NPLs

NPLs to period-end loans

NCOs

Provision for credit

losses

NCOs to average loans

$ in millions

NPLs held for sale,

OREO & other NPAs

Strong Asset Quality

Highlights

Net loan charge-offs remain below targeted range,

at 25 basis points of average loans

Nonperforming loans represented 72 basis points

of period-end loans

Allowance for loan and lease losses represented

1.37% of period-end loans: 190% coverage of

nonperforming loans

Allowance for Loan and Lease Losses

Allowance for loan and

lease losses to NPLs

Allowance for loan

and lease losses

$ in millions

$814

$796

206%

190%

110%

135%

160%

185%

210%

$600

$700

$800

$900

$1,000

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

$410

$440

Disciplined capital management

–

Increased quarterly common share

dividend by 15%

–

Repurchased $129 MM of common shares

in 2Q15

Tier

Common

Equity

(a)

Tier

Common

Equity

(a)

Tangible Common Equity to Tangible Assets

(a)

Tangible Common Equity to Tangible Assets

(a)

Strong Capital

Highlights

Book Value per Share

Note: Common share repurchase amounts include repurchases to offset issuances of common shares under our employee compensation plans

(a)

Non-GAAP measure: see Appendix for reconciliations

(b)

6-30-15 ratio is estimated

(c)

The Regulatory Capital Rules, effective January 1, 2015 for Key, introduced a new capital measure, “Common Equity Tier 1”

$11.65

$12.21

$9.00

$10.00

$11.00

$12.00

$13.00

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

11.25%

10.69%

6.00%

8.00%

10.00%

12.00%

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

10.15%

9.86%

6.00%

7.00%

8.00%

9.00%

10.00%

11.00%

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

Common Equity

Tier 1

(a), (b), (c)

Common Equity

Tier 1

(a), (b), (c)

Outlook and Expectations

Average Loans

•

Mid-single digit growth vs. FY 2014

Net Interest Income

•

Up low single-digits

without the benefit of higher rates

•

NIM: down from FY 2014, reflecting continued elevated levels of liquidity; relatively

stable with 2Q15 reported level

Noninterest

Income

•

Mid-single digit growth compared to 2014

Expense

•

Relatively stable with 2014

Efficiency / Productivity

•

Positive operating leverage

Asset Quality

•

Net

charge-offs

average

loans

below

targeted

range

–

bps

•

Provision expected to approximate net charge-offs

Capital

•

Disciplined management of capital including dividends and share repurchases

Guidance

ranges:

relatively

stable:

+/-

2%;

low

single-digit:

<5%;

mid-single

digit:

6%;

low

double-digit:

10%

13%

FY 2015

Appendix

Progress on Targets for Success

(a)

Continuing operations, unless otherwise noted

(b)

Represents period-end consolidated total loans and loans held for sale divided by period-end consolidated total deposits (excluding deposits in foreign office)

(c)

Excludes intangible asset amortization; non-GAAP measure: see Appendix for reconciliation

Balance Sheet

Efficiency

Balance Sheet

Efficiency

Moderate Risk

Profile

Moderate Risk

Profile

High Quality,

Diverse

Revenue Streams

High Quality,

Diverse

Revenue Streams

Positive

Operating

Leverage

Positive

Operating

Leverage

Disciplined

Capital

Management

Disciplined

Capital

Management

Metrics

(a)

2Q15

1Q15

Targets

Loan

deposit

ratio

(b)

Loan

deposit

ratio

(b)

NCOs to average loans

Provision for credit losses

to average loans

Provision for credit losses

to average loans

Net interest margin

Noninterest income to total revenue

Cash

efficiency

ratio

(c)

Cash

efficiency

ratio

(c)

Return on average assets

87%

.25%

.20%

65.1%

1.03%

.28%

.25%

2.88%

2.91%

45%

43%

90% -100%

40 -

60 bps

LT: >3.50%

LT: <60%

1.00% -1.25%

>40%

50%

55%

60%

65%

70%

2Q15

Business Growth,

Net of Investments

Expense Savings

Rising Rate Benefit

Long-term Target: <60%

Efficiency Ratio: Driving to 60% and Below

Business plans and macroeconomic environment provide path to an efficiency

ratio below 60%

Cash Efficiency Ratio

(a)

Outlook

Cash Efficiency Ratio

(a)

Outlook

(a)

Non-GAAP measure: see Appendix for reconciliation

(b)

Assumes implied forward curve

2-3 year outlook: 60%

Long-term, committed to moving below 60%

(b)

Oil & Gas

Longstanding history, expertise and relationships

Strong Portfolio Characteristics

>10 years of experience in energy lending with >20

specialists dedicated to oil & gas

Focused on middle market companies, aligned with our

relationship strategy

Portfolio regularly stress tested

Primarily secured by proven reserves

Total Loans Outstanding, 6/30/15

>40% of clients’ 2015 production is hedged

Relationships contribute to noninterest income; ~5% of

FY14 investment banking and debt placement fees

Net charge-offs lower than overall portfolio

Allowance reflects estimated impact of current oil prices

Oil & Gas: 2%

Other: 98%

Oil & Gas Outstanding Balances, 6/30/15

Oilfield Services

Upstream: 60%,

$0.6 B

Midstream: 30%,

$0.3 B

Downstream: 10%,

$0.1 B

Oil & Gas

$1.0 B

Average Total Investment Securities

Highlights

Average AFS securities

$ in billions

High Quality Investment Portfolio

Portfolio composed primarily of GNMA and GSE-

backed MBS and CMOs

Continue to position portfolio for upcoming

regulatory liquidity requirements:

–

2015 average balance growth reflects

actions taken to increase liquidity reserves

–

Growth and reinvestment of portfolio cash

flows have been predominantly in GNMA

securities (~47% of total portfolio was

GNMA at 6/30/15)

Securities cash flows of $1.1 billion in 2Q15, up

slightly from $1 billion in 1Q15

Average portfolio life at 6/30/15 of 3.8 years,

compared to 3.5 years at 3/31/15

Securities to Total Assets

(b)

Securities to Total Assets

(b)

(a) Yield is calculated on the basis of amortized cost

(b) Includes end of period held-to-maturity and available-for-sale securities

Average yield

(a)

Average HTM securities

2.10%

.00%

1.00%

2.00%

3.00%

4.00%

5.00%

$0.0

$5.0

$10.0

$15.0

$20.0

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

19%

20%

10%

14%

18%

22%

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

$17.4

2.17%

$18.3

Interest Rate Risk Management

Naturally Asset Sensitive Balance Sheet

Actively Managing Rate Risk

•

High quality

•

Fixed rate agency MBS and CMOs

•

Average maturity: 3.8 years

•

GNMAs total 47% of total portfolio

•

Reinvesting cash flows into GNMAs

$11

$17

Size of swap

portfolio

Modeled asset

sensitivity

~3%

~7%

Flexibility to Adjust Rate

Sensitivity

with

Swaps

(c)

Loan Portfolio

Variable:

70%

Fixed:

30%

Deposits

(a)

Flexibility to adjust rate sensitivity for changes in balance

sheet growth/mix as well as interest rate outlook

Debt

hedges

A/LM

hedges

Investment Portfolio

Noninterest-

bearing: 38%

Interest-

bearing, non-

time: 55%

CDs:

•

Maintaining

moderate

asset

sensitive

position

~3%

(b)

Assumes 200 basis point increase in short-term rates over a

12-month period

•

Utilize swaps for debt hedging and asset liability management

Fairly even pace of A/LM swap maturities

6/30/15

Swaps

($ in B)

6/30/15

Notional Amt.

Wtd. Avg.

Maturity (Yrs.)

Receive

Rate

Pay

Rate

A/L

Management

$ 10.5

2.6

1.0%

.2%

Debt

6.8

3.5

2.1

$ 17.3

1.5%

.2%

2Q15

$18 B

AFS: $13 B

HTM: $5 B

Balance sheet has relatively short duration and is

more impacted by the short-end of the curve

$17 B

Actively managing a naturally asset sensitive balance sheet

Note: Loan, deposit and investment portfolio balances reflect quarterly average balances

(a)

Excludes deposits in foreign office

(b)

Preliminary estimate

(c)

May not foot due to rounding

2Q15

Asset Quality Trends

Criticized Outstandings

(a)

to Period-end Total Loans

Criticized Outstandings

(a)

to Period-end Total Loans

Delinquencies to Period-end Total Loans

(a)

Loan and lease outstandings

(b)

From continuing operations

30 –

89 days delinquent

90+ days delinquent

.49%

.31%

.15%

.11%

.00%

.25%

.50%

.75%

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

2.7%

3.1%

0.0%

1.0%

2.0%

3.0%

4.0%

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

Metric

(b)

2Q15

1Q15

4Q14

3Q14

2Q14

Delinquencies to

EOP total loans: 30-89 days

.31

.37

.41

.61

.49

Delinquencies to

EOP total loans: 90+ days

.11

.19

.17

.13

.15

NPLs to EOP portfolio loans

.72

.75

.73

.71

NPAs to EOP portfolio loans + OREO + Other NPAs

.75

.79

.76

.74

Allowance for loan losses to period-end loans

1.37

1.38

1.43

1.46

Allowance for loan losses to NPLs

189.8

181.7

190.0

200.5

205.6

Continuing operations

Period-

end loans

Average

loans

Net loan

charge-

offs

Net loan

charge-offs

(b)

average loans

(%)

Nonperforming

loans

(c)

Ending

allowance

(d)

Allowance /

period-end

loans

(d)

(%)

Allowance

NPLs

(%)

6/30/15

2Q15

6/30/15

Commercial,

financial

and

agricultural

$ 29,285

$ 29,017

$ 15

.21%

$ 100

$ 418

1.43

418.00%

Commercial real estate:

Commercial Mortgage

7,874

7,981

144

1.83

553.85

Construction

1,254

1,199

(1)

(.33)

2.47

258.33

Commercial lease financing

4,010

3,981

1.32

294.44

Real

estate –

residential mortgage

2,252

2,237

.89

29.85

Home equity

10,532

10,510

.31

184

.58

33.15

Credit cards

753

737

3.81

4.12

N/M

Consumer other –

Key Community Bank

1,595

1,571

1.02

1.32

N/M

Consumer other

–

Exit Portfolio

709

745

1.62

2.40

188.89

Continuing total

(e)

$ 58,264

$ 57,978

$ 36

.25%

$ 419

$ 796

1.37

189.98%

Discontinued operations

1,962

2,168

.37

1.12

366.67

Consolidated total

$ 60,226

$ 60,146

$ 38

.25%

$ 425

$ 818

1.36

192.47%

Credit Quality by Portfolio

Credit Quality

$ in millions

(a)

6-30-15 ending loan balance includes $89 million of commercial credit card balances; 6-30-15 average loan balance includes $88 million of assets

from commercial credit cards

(b)

Net loan charge-off amounts are annualized in calculation

(c)

6-30-15 NPL amount excludes $12 million of purchased credit impaired loans

(d)

6-30-15 allowance by portfolio is estimated

(e)

6-30-15 ending loan balance includes purchased loans of $125 million, of which $12 million were purchased credit impaired

N/M = Not meaningful

(a)

Vintage (% of Loans)

Loan

Balances

Average

Loan Size ($)

Average

FICO

Average

LTV

% of

Loans

LTV>90%

2012 and

later

2011

2010

2009

2008 and

prior

Loans and lines

First lien

$ 6,207

$ 64,383

770

67%

.5%

Second lien

4,089

51,618

765

3.4

Community Bank

$ 10,296

58,741

768

1.6

Exit portfolio

236

19,156

729

29.0

100

Total home equity

portfolio

$ 10,532

Nonaccrual loans and lines

First lien

$ 102

$ 65,179

723

72%

1.3%

Second lien

47,054

712

1.3

Community Bank

$ 176

56,140

718

1.3

Exit portfolio

22,626

702

24.0

100

Total home equity nonaccruals

$ 184

Second quarter net charge-offs (NCOs)

Community Bank

$ 7

% of average loans

.27

Exit Portfolio

$ 1

% of average loans

1.64

(a) Average LTVs are at origination; current average LTVs for Community Bank total home equity loans and lines is approximately 68%,

compared to 70% at the end of the first quarter of 2015

Home Equity Portfolio –6/30/15

$ in millions, except average loan size

Home Equity Portfolio

Highlights

High quality portfolio

Community bank loans and lines: 98% of total portfolio; branch-

originated

–

60% first lien position

–

Average FICO score of 768

–

Average LTV at origination: 71%

$3.9 billion of the total portfolio are fixed rate loans that require

principal and interest payments; $6.6 billion are lines

$1.3 billion in lines outstanding (12% of the total portfolio)

come to end of draw period in the next four years

–

Proactive communication and client outreach initiated

near end of draw period

(a)

Balance Outstanding

Change

Net Loan Charge-offs

Balance on

Nonperforming Status

6-30-15

3-31-15

6-30-15 vs.

3-31-15

2Q15

1Q15

(b)

6-30-15

3-31-15

Residential properties –

homebuilder

$ 6

$ -

$ 8

Marine and RV floor plan

(4)

Commercial

lease

financing

(a)

831

877

(46)

(1)

Total commercial loans

839

889

(50)

Home equity –

Other

236

253

(17)

$ 1

Marine

673

730

(57)

RV and other consumer

(3)

Total consumer loans

956

1,033

(77)

Total exit loans in loan portfolio

1,795

1,922

$ (127)

$ 4

$ 3

$ 26

$ 32

Discontinued

operations

–

education

lending

business

(not

included

exit

loans

above)

(c)

$ 1,962

$ 2,219

$ (257)

$ 2

$ 6

$2,560

$1,859

$1,000

$2,000

$3,000

$4,000

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

$ in millions; average balances

(a)

Includes

(1)

the

business

aviation,

commercial

vehicle,

office

products,

construction

and

industrial

leases;

(2)

Canadian

lease

financing

portfolios;

(3) European lease financing portfolios; and (4) all remaining balances related to lease in, lease out; sale in, lease out; service contract leases; and

qualified technological equipment leases.

(b)

Credit amounts indicate recoveries exceeded charge-offs

(c)

Excludes loans held for sale of $179 million at June 30, 2015.

$ in millions

Exit Loan Portfolio

Three months ended

6-30-15

3-31-15

12-31-14

9-30-14

6-30-14

Tangible common equity to tangible assets at period end

Key shareholders’ equity (GAAP)

10,590

10,603

10,530

10,486

10,504

Less:

Intangible assets

(a)

1,085

1,088

1,090

1,105

1,008

Preferred Stock, Series A

(b)

281

282

Tangible common equity (non-GAAP)

9,224

9,234

9,158

9,099

9,214

Total assets (GAAP)

94,606

94,206

93,821

89,784

91,798

Less:

Intangible assets

(a)

1,085

1,088

1,090

1,105

1,008

Tangible assets (non-GAAP)

93,521

93,118

92,731

88,679

90,790

Tangible common equity to tangible assets ratio (non-GAAP)

9.86

9.92

9.88

10.26

10.15

Common Equity Tier 1 at period end

Key shareholders’ equity (GAAP)

10,590

10,603

Less:

Preferred Stock, Series A

(b)

281

Common Equity Tier 1 capital before adjustments and deductions

10,309

10,322

Less:

Goodwill, net of deferred taxes

1,036

Intangible

assets, net of deferred taxes

Deferred tax assets

Net unrealized gains (losses) on available-for-sale securities, net of

deferred

taxes

Accumulated gain (loss) on cash flow hedges, net of deferred taxes

(21)

(8)

Amounts recorded in accumulated other comprehensive income

(loss),

net of deferred taxes

(362)

(364)

Total Common Equity Tier 1 capital

(c)

9,621

9,569

Net risk-weighted

assets (regulatory)

(c)

89,995

89,967

Common Equity Tier 1 ratio (non-GAAP)

(c)

10.69

10.64

Tier 1 common equity at period end

Key shareholders’ equity (GAAP)

10,530

10,486

10,504

Qualifying capital securities

339

340

339

Less:

Goodwill

1,057

1,051

979

Accumulated other comprehensive income (loss)

(d)

(395)

(366)

(328)

Other assets

(e)

110

Total Tier 1 capital (regulatory)

10,124

10,031

10,106

Less:

Qualifying capital securities

339

340

339

Preferred Stock, Series A

(b)

282

Total Tier 1 common equity (non-GAAP)

9,503

9,409

9,485

Net risk-weighted assets (regulatory)

85,100

83,547

84,287

Tier 1 common equity ratio (non-GAAP)

11.17

11.26

11.25

GAAP to Non-GAAP Reconciliation

$ in millions

Three

months

ended

6/30/15,

3/31/15,

12/31/14,

9/30/14,

and

6/30/14

exclude

$55

million,

$61

million,

$68

million,

$72

million,

and

$79

million,

respectively,

period-end purchased credit card receivable intangible assets

Net of capital surplus

6-30-15 amount is estimated

Includes net unrealized gains or losses on securities available for sale (except for net unrealized losses on marketable equity securities), net gains or losses on cash

flow hedges, and amounts resulting from the application of the applicable accounting guidance for defined benefit and other postretirement plans

Other assets deducted from Tier 1 capital and net risk-weighted assets consist of disallowed intangible assets (excluding goodwill) and deductible portions of

nonfinancial

equity

investments.

There

were

disallowed

deferred

tax

assets

December

31,

2014,

September

30,

2014,

and

June

30,

2014.

Three months ended

6-30-15

3-31-15

12-31-14

9-30-14

6-30-14

Pre-provision net revenue

Net interest income (GAAP)

584

571

582

575

573

Plus:

Taxable-equivalent adjustment

Noninterest income (GAAP)

488

437

490

417

455

Less:

Noninterest expense (GAAP)

711

669

704

706

687

Pre-provision net revenue from continuing operations (non-GAAP)

368

345

374

292

343

Average tangible common equity

Average Key shareholders’ equity (GAAP)

10,590

10,570

10,562

10,473

10,459

Less:

Intangible assets (average)

(a)

1,086

1,089

1,096

1,037

1,010

Preferred Stock, Series A (average)

290

291

Average tangible common equity (non-GAAP)

9,214

9,191

9,175

9,145

9,158

Return on average tangible common equity from continuing operations

Net income (loss) from continuing operations attributable to Key common

shareholders (GAAP)

230

222

246

197

242

Average tangible common equity (non-GAAP)

9,214

9,191

9,175

9,145

9,158

Return on average tangible common equity from continuing operations (non-GAAP)

10.01

9.80

10.64

8.55

10.60

Return on average tangible common equity consolidated

Net income (loss) attributable to Key common shareholders (GAAP)

233

227

248

180

214

Average tangible common equity (non-GAAP)

9,214

9,191

9,175

9,145

9,158

Return on average tangible common equity consolidated (non-GAAP)

10.14

10.02

10.72

7.81

9.37

Cash efficiency ratio

Noninterest expense (GAAP)

711

669

704

706

687

Less:

Intangible asset amortization (GAAP)

Adjusted noninterest expense (non-GAAP)

702

660

694

696

678

Net interest income (GAAP)

584

571

582

575

573

Plus:

Taxable-equivalent adjustment

Noninterest income (GAAP)

488

437

490

417

455

Total taxable-equivalent revenue (non-GAAP)

1,079

1,014

1,078

998

1,034

Cash efficiency ratio (non-GAAP)

65.1

64.4

69.7

65.6

GAAP to Non-GAAP Reconciliation

(continued)

$ in millions

(a)

Three months ended 6/30/15, 3/31/15, 12/31/14, 9/30/14 and 6/30/14 exclude $58 million, $64 million, $69 million, $76 million, and $82 million, respectively, of

average purchased credit card receivable intangible assets

KeyCorp & Subsidiaries

$ in billions

Quarter ended

June 30, 2015

Common Equity Tier 1 under current regulatory rules

$ 9.6

Adjustments from

current regulatory rules to the Regulatory Capital Rules:

Deferred

tax assets and other assets

(b)

(.1)

Common Equity Tier 1 anticipated under the Regulatory Capital Rules

(c)

$ 9.6

Net risk-weighted assets under current regulatory rules

$ 90.0

Adjustments from

current regulatory rules to the Regulatory Capital Rules:

Mortgage

servicing assets

(d)

Deferred tax

assets

(d)

Significant investments

(d)

Other assets

(e)

Total risk-weighted assets anticipated under the Regulatory

Capital Rules

(c)

$ 90.5

Common Equity Tier 1 under the Regulatory Capital

Rules

10.6

(a)

Common Equity Tier 1 capital is a non-generally accepted accounting principle (GAAP) financial measure that is used by investors, analysts and

bank regulatory agencies to assess the capital position of financial services companies. Management reviews Common Equity Tier 1 along with

other measures of capital as part of its financial analyses

(b)

Includes the deferred tax asset subject to future taxable income for realization, primarily tax credit carryforwards, as well as the deductible portion

of purchased credit card receivables

(c)

The

anticipated

amount

regulatory

capital

and

risk-weighted

assets

based

upon

the

federal

banking

agencies’

Regulatory

Capital

Rules

(as

fully phased-in on January 1, 2019); Key is subject to the Regulatory Capital Rules under the “standardized approach”

(d)

Item is included in the 10%/15% exceptions bucket calculation and is risk-weighted at 250% under the fully implemented final rule

(e)

Under the fully implemented rule, certain deferred tax assets and intangible assets subject to the transition provision are no longer required to be

risk-weighted because they are deducted directly from capital.

Table may not foot due to rounding

Common Equity Tier 1 Under the Regulatory Capital Rules

(estimated)

(a)

Exhibit 99.3

Consolidated Balance Sheets

(dollars in millions)


	6-30-15			3-31-15			6-30-14
Assets
Loans	$	58,264		$	57,953		$	55,600
Loans held for sale		835			1,649			435
Securities available for sale		14,244			13,120			12,224
Held-to-maturity securities		5,022			5,005			5,233
Trading account assets		674			789			890
Short-term investments		3,222			3,378			3,176
Other investments		703			730			899

Total earning assets		82,964			82,624			78,457
Allowance for loan and lease losses		(796	)		(794	)		(814	)
Cash and due from banks		693			506			604
Premises and equipment		788			806			844
Operating lease assets		296			306			306
Goodwill		1,057			1,057			979
Other intangible assets		83			92			108
Corporate-owned life insurance		3,502			3,488			3,438
Derivative assets		536			731			549
Accrued income and other assets		3,314			3,144			3,090
Discontinued assets		2,169			2,246			4,237

Total assets	$	94,606		$	94,206		$	91,798

Liabilities
Deposits in domestic offices:
NOW and money market deposit accounts	$	36,024		$	35,623		$	33,637
Savings deposits		2,370			2,413			2,450
Certificates of deposit ($100,000 or more)		2,032			1,982			2,743
Other time deposits		3,105			3,182			3,505

Total interest-bearing deposits		43,531			43,200			42,335
Noninterest-bearing deposits		26,640			27,948			24,781
Deposits in foreign office — interest-bearing		498			474			683

Total deposits		70,669			71,622			67,799
Federal funds purchased and securities sold under repurchase agreements		444			517			1,213
Bank notes and other short-term borrowings		528			608			521
Derivative liabilities		560			825			451
Accrued expense and other liabilities		1,537			1,308			1,400
Long-term debt		10,267			8,713			8,213
Discontinued liabilities		—			—			1,680

Total liabilities		84,005			83,593			81,277

Equity
Preferred stock, Series A		290			290			291
Common shares		1,017			1,017			1,017
Capital surplus		3,898			3,910			3,987
Retained earnings		8,614			8,445			7,950
Treasury stock, at cost		(2,884	)		(2,780	)		(2,452	)
Accumulated other comprehensive income (loss)		(345	)		(279	)		(289	)

Key shareholders’ equity		10,590			10,603			10,504
Noncontrolling interests		11			10			17

Total equity		10,601			10,613			10,521

Total liabilities and equity	$	94,606		$	94,206		$	91,798

Common shares outstanding (000)		843,608			850,920			876,823

Consolidated Statements of Income

(dollars in millions, except per share amounts)


	Three months ended							Six months ended
	6-30-15		3-31-15		6-30-14			6-30-15		6-30-14
Interest income
Loans	$	532	$	523	$	526		$	1,055	$	1,045
Loans held for sale		12		7		5			19		9
Securities available for sale		72		70		71			142		143
Held-to-maturity securities		24		24		23			48		45
Trading account assets		5		5		7			10		13
Short-term investments		2		2		1			4		2
Other investments		5		5		6			10		12

Total interest income		652		636		639			1,288		1,269

Interest expense
Deposits		26		26		31			52		63
Federal funds purchased and securities sold under repurchase agreements		—		—		—			—		1
Bank notes and other short-term borrowings		2		2		2			4		4
Long-term debt		40		37		33			77		65

Total interest expense		68		65		66			133		133

Net interest income		584		571		573			1,155		1,136
Provision for credit losses		41		35		12			76		16

Net interest income after provision for credit losses		543		536		561			1,079		1,120

Noninterest income
Trust and investment services income		111		109		94			220		192
Investment banking and debt placement fees		141		68		99			209		183
Service charges on deposit accounts		63		61		66			124		129
Operating lease income and other leasing gains		24		19		35			43		64
Corporate services income		43		43		41			86		83
Cards and payments income		47		42		43			89		81
Corporate-owned life insurance income		30		31		28			61		54
Consumer mortgage income		4		3		2			7		4
Mortgage servicing fees		9		13		11			22		26
Net gains (losses) from principal investing		11		29		27			40		51
Other income ^(a)		5		19		9			24		23

Total noninterest income		488		437		455			925		890

Noninterest expense
Personnel		408		389		389			797		777
Net occupancy		66		65		68			131		132
Computer processing		42		38		41			80		79
Business services and professional fees		42		33		41			75		82
Equipment		22		22		24			44		48
Operating lease expense		12		11		10			23		20
Marketing		15		8		13			23		18
FDIC assessment		8		8		6			16		12
Intangible asset amortization		9		9		9			18		19
OREO expense, net		1		2		1			3		2
Other expense		86		84		85			170		162

Total noninterest expense		711		669		687			1,380		1,351

Income (loss) from continuing operations before income taxes		320		304		329			624		659
Income taxes		84		74		76			158		168

Income (loss) from continuing operations		236		230		253			466		491
Income (loss) from discontinued operations, net of taxes		3		5		(28	)		8		(24	)

Net income (loss)		239		235		225			474		467
Less: Net income (loss) attributable to noncontrolling interests		1		2		6			3		6

Net income (loss) attributable to Key	$	238	$	233	$	219		$	471	$	461

Income (loss) from continuing operations attributable to Key common shareholders	$	230	$	222	$	242		$	452	$	474
Net income (loss) attributable to Key common shareholders		233		227		214			460		450

Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	.27	$	.26	$	.28		$	.53	$	.54
Income (loss) from discontinued operations, net of taxes		—		.01		(.03	)		.01		(.03	)
Net income (loss) attributable to Key common shareholders ^(b)		.28		.27		.24			.54		.51

Per common share — assuming dilution
Income (loss) from continuing operations attributable to Key common shareholders	$	.27	$	.26	$	.27		$	.52	$	.53
Income (loss) from discontinued operations, net of taxes		—		.01		(.03	)		.01		(.03	)
Net income (loss) attributable to Key common shareholders ^(b)		.27		.26		.24			.53		.51

Cash dividends declared per common share	$	.075	$	.065	$	.065		$	.14	$	.12

Weighted-average common shares outstanding (000)		839,454		848,580		875,298			843,992		879,986
Weighted-average common shares and potential common shares outstanding (000) ^(c)		846,312		857,122		902,137			851,687		886,684

(a)

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

(c)	Assumes conversion of common share options and other stock awards and/or convertible preferred stock, as applicable.

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