Form 8-K KEYCORP /NEW/ For: Oct 15

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October 15, 2015 6:43 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): October 15, 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 October 15, 2015, KeyCorp issued a press release announcing its financial results for the three- and nine-month periods ended September 30, 2015 (the “Press Release”), and posted on its website its third 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 October 15, 2015, announcing financial results for the three- and nine-month periods ended September 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 hereunto duly authorized.


	KEYCORP
	(Registrant)

Date: October 15, 2015	/s/ Douglas M. Schosser
	By:	Douglas M. Schosser
		Chief Accounting Officer

Exhibit 99.1


			NEWS

FOR IMMEDIATE RELEASE

KEYCORP REPORTS THIRD QUARTER 2015

NET INCOME OF $216 MILLION, OR $.26 PER COMMON SHARE

Positive operating leverage from prior year

Revenue up 7% from prior year, reflecting growth in net interest income

and noninterest income

Average loans up 6% from prior year, driven by a

15% increase in commercial, financial and agricultural loans

Expenses include a $19 million pension settlement charge

Credit quality remains strong, with net charge-offs to average loans of .27%

Disciplined capital management with common share repurchases of $123 million

CLEVELAND, October 15, 2015 — KeyCorp (NYSE: KEY) today announced third quarter net income from continuing operations attributable to Key common shareholders of $216 million, or $.26 per common share, compared to $230 million, or $.27 per common share, for the second quarter of 2015, and $197 million, or $.23 per common share, for the third quarter of 2014. During the third quarter of 2015, Key incurred $19 million, or $.01 per common share, of costs related to a pension settlement charge, compared to $20 million, or $.01 per common share, during the third quarter of 2014.

For the nine months ended September 30, 2015, net income from continuing operations attributable to Key common shareholders was $668 million, or $.78 per common share, compared to $671 million, or $.76 per common share, for the same period one year ago.

“Key’s third quarter results reflect our continued success in growing our business, managing expenses and maintaining strong credit quality,” said Chairman and Chief Executive Officer Beth Mooney.

“We generated positive operating leverage relative to the same period last year, driven by a 7% increase in revenue along with well-managed expenses. Revenue trends reflect growth in new and expanded relationships across our company, which drove higher net interest income, as well as continued momentum in our fee-based businesses,” continued Mooney. “We saw good loan growth again this quarter, with average balances up 6% from the prior year, driven by a 15% increase in commercial, financial and agricultural loans. Loan balances increased in both the Community Bank and Corporate Bank.”

“Results compared with the prior quarter reflect higher net interest income and variability in capital markets revenues, which declined relative to our record second quarter,” said Mooney. “Expenses, excluding the pension settlement charge, were lower than the previous quarter.”

“Additionally, credit quality remains strong, with net charge-offs to average loans of .27%, which is below our targeted range,” added Mooney.

KeyCorp Reports Third Quarter 2015 Profit

October 15, 2015

Page 2

THIRD QUARTER 2015 FINANCIAL RESULTS, from continuing operations

Compared to Third Quarter of 2014

•

Average loans up 6%, driven by 15% growth in commercial, financial and agricultural loans

•

Average deposits, excluding deposits in foreign office, up 3% due to continued growth in commercial mortgage servicing and inflows from commercial and consumer clients

•

Net interest income (taxable-equivalent) up $17 million, as higher earning asset balances offset lower earning asset yields

•

Noninterest income up $53 million due to strength in Key’s core fee-based businesses, which included a full-quarter impact of the September 2014 Pacific Crest Securities acquisition

•

Noninterest expense up $18 million primarily attributable to higher performance-based compensation and a full-quarter impact of the September 2014 Pacific Crest Securities acquisition

•

Asset quality remained strong, with net loan charge-offs to average loans of .27%

•

Disciplined capital management, repurchasing $123 million of common shares during the third quarter of 2015 and maintaining a solid capital position with an estimated Common Equity Tier 1 ratio of 10.51%

Compared to Second Quarter of 2015

•

Average loans up 2%, primarily driven by a 5% increase in commercial, financial and agricultural loans

•

Average deposits, excluding deposits in foreign office, down slightly reflecting a decline in short-term noninterest-bearing deposit balances from commercial clients and lower certificates of deposit

•

Net interest income (taxable-equivalent) up $7 million attributable to improvement in the earning asset mix, partly offset by slightly lower earning asset yields and loan fees

•

Noninterest income down $18 million, primarily due to lower investment banking and debt placement fees partially offset by growth in other fee-based businesses

•

Noninterest expense up $13 million, driven by a $19 million pension settlement charge in the third quarter

•

Strong asset quality, with net loan charge-offs to average loans remaining below our targeted range of 40-60 basis points

Selected Financial Highlights


dollars in millions, except per share data										Change 3Q15 vs.
	3Q15			2Q15			3Q14			2Q15			3Q14
Income (loss) from continuing operations attributable to Key common shareholders	$	216		$	230		$	197			(6.1	)%		9.6	%
Income (loss) from continuing operations attributable to Key common shareholders per common share — assuming dilution		.26			.27			.23			(3.7	)		13.0
Return on average total assets from continuing operations		.95	%		1.03	%		.92	%		N/A			N/A
Common Equity Tier 1^{(a), (b)}		10.51			10.71			N/A			N/A			N/A
Tier 1 common equity^(a)		N/A			N/A			11.26	%		N/A			N/A
Book value at period end	$	12.47		$	12.21		$	11.74			2.1	%		6.2	%
Net interest margin (TE) from continuing operations		2.87	%		2.88	%		2.96	%		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.

(b)	9-30-15 ratio is estimated.

TE = Taxable Equivalent, N/A = Not Applicable

KeyCorp Reports Third Quarter 2015 Profit

October 15, 2015

Page 3

INCOME STATEMENT HIGHLIGHTS

Revenue


dollars in millions							Change 3Q15 vs.
	3Q15		2Q15		3Q14		2Q15			3Q14
Net interest income (TE)	$	598	$	591	$	581		1.2	%		2.9	%
Noninterest income		470		488		417		(3.7	)		12.7

Total revenue	$	1,068	$	1,079	$	998		(1.0	)%		7.0	%

TE = Taxable Equivalent

Taxable-equivalent net interest income was $598 million for the third quarter of 2015, and the net interest margin was 2.87%. These results compare to taxable-equivalent net interest income of $581 million and a net interest margin of 2.96% for the third quarter of 2014. The increase in net interest income reflects higher earning asset balances moderated by lower earning asset yields, which also drove the decline in the net interest margin.

Compared to the second quarter of 2015, taxable-equivalent net interest income increased by $7 million, and the net interest margin was essentially unchanged. The increase in net interest income and the relatively stable net interest margin were primarily attributable to improvement in the earning asset mix, partly offset by slightly lower earning asset yields and loan fees. One additional day in the third quarter of 2015 also contributed to the increase in net interest income compared to the prior quarter.

Noninterest Income


dollars in millions							Change 3Q15 vs.
	3Q15		2Q15		3Q14		2Q15			3Q14
Trust and investment services income	$	108	$	111	$	99		(2.7	)%		9.1	%
Investment banking and debt placement fees		109		141		88		(22.7	)		23.9
Service charges on deposit accounts		68		63		68		7.9			—
Operating lease income and other leasing gains		15		24		17		(37.5	)		(11.8	)
Corporate services income		57		43		42		32.6			35.7
Cards and payments income		47		47		42		—			11.9
Corporate-owned life insurance income		30		30		26		—			15.4
Consumer mortgage income		3		4		3		(25.0	)		—
Mortgage servicing fees		11		9		9		22.2			22.2
Net gains (losses) from principal investing		11		11		9		—			22.2
Other income		11		5		14		120.0			(21.4	)

Total noninterest income	$	470	$	488	$	417		(3.7	)%		12.7	%

Key’s noninterest income was $470 million for the third quarter of 2015, compared to $417 million for the year-ago quarter. The increase from the prior year was primarily attributable to strength in Key’s core fee-based businesses, which included a full-quarter impact of the September 2014 acquisition of Pacific Crest Securities. The third quarter of 2015 included $21 million of higher investment banking and debt placement fees, $15 million of increased corporate services income, and $9 million of higher trust and investment services income. Additionally, cards and payments income increased $5 million due to higher revenue from credit card and merchant fees.

Compared to the second quarter of 2015, noninterest income decreased by $18 million. The primary cause for the decline was $32 million in lower investment banking and debt placement fees, reflecting the variability of the business. Additionally, operating lease income and other leasing gains decreased $9 million. These decreases were partially offset by $14 million in higher corporate services income due to increased derivative income and loan commitment fees, a $6 million increase in other income and $5 million of higher service charges on deposit accounts.

KeyCorp Reports Third Quarter 2015 Profit

October 15, 2015

Page 4

Noninterest Expense


dollars in millions							Change 3Q15 vs.
	3Q15		2Q15		3Q14		2Q15			3Q14
Personnel expense	$	426	$	408	$	405		4.4	%		5.2	%
Nonpersonnel expense		298		303		301		(1.7	)		(1.0	)

Total noninterest expense	$	724	$	711	$	706		1.8	%		2.5	%

Key’s noninterest expense was $724 million for the third quarter of 2015, compared to $706 million in the third quarter of last year. Personnel costs increased $21 million year-over-year primarily due to increased performance-based compensation related to a strong capital markets business performance, along with a full-quarter impact of the September 2014 acquisition of Pacific Crest Securities. Nonpersonnel expense remained relatively stable as lower occupancy costs offset an increase in business services and professional fees.

Compared to the second quarter of 2015, noninterest expense increased by $13 million. This increase was primarily driven by a pension settlement charge of $19 million and partially offset by $5 million in lower nonpersonnel expense, largely related to lower occupancy costs.

BALANCE SHEET HIGHLIGHTS

In the third quarter of 2015, Key had average assets of $94.8 billion compared to $91.3 billion in the third quarter of 2014 and $93.9 billion in the second quarter of 2015.

Average Loans


dollars in millions							Change 9-30-15 vs.
	9-30-15		6-30-15		9-30-14		6-30-15			9-30-14
Commercial, financial and agricultural^(a)	$	30,374	$	29,017	$	26,456		4.7	%		14.8	%
Other commercial loans		13,098		13,161		13,317		(.5	)		(1.6	)
Total home equity loans		10,510		10,510		10,658		—			(1.4	)
Other consumer loans		5,299		5,290		5,365		.2			(1.2	)

Total loans	$	59,281	$	57,978	$	55,796		2.2	%		6.2	%

(a)	Commercial, financial and agricultural average loan balances include $88 million, $88 million, and $92 million of assets from commercial credit cards at September 30, 2015, June 30, 2015, and September 30, 2014, respectively.

Average loans were $59.3 billion for the third quarter of 2015, an increase of $3.5 billion compared to the third quarter of 2014. The loan growth occurred primarily in the commercial, financial and agricultural portfolio, which increased $3.9 billion and was broad-based across Key’s commercial lines of business. Consumer loans declined $214 million as a result of the run-off in Key’s consumer exit portfolios. Key’s core consumer loan portfolio remained relatively stable to the year-ago quarter.

Compared to the second quarter of 2015, average loans increased by $1.3 billion, driven by commercial, financial and agricultural loans, which grew $1.8 billion on a period-end basis.

KeyCorp Reports Third Quarter 2015 Profit

October 15, 2015

Page 5

Average Deposits


dollars in millions										Change 9-30-15 vs.
	9-30-15			6-30-15			9-30-14			6-30-15			9-30-14
Non-time deposits^(a)	$	64,928		$	65,109		$	61,699			(.3	)%		5.2	%
Certificates of deposit ($100,000 or more)		1,985			2,010			2,629			(1.2	)		(24.5	)
Other time deposits		3,064			3,136			3,413			(2.3	)		(10.2	)

Total deposits	$	69,977		$	70,255		$	67,741			(.4	)%		3.3	%

Cost of total deposits^(a)		.15	%		.15	%		.16	%		N/A			N/A

(a)	Excludes deposits in foreign office.

N/A = Not Applicable

Average deposits, excluding deposits in foreign office, totaled $70 billion for the third quarter of 2015, an increase of $2.2 billion compared to the year-ago quarter. NOW and money market deposit accounts increased by $2.3 billion, and noninterest-bearing deposits increased by $966 million, 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 second quarter of 2015, average deposits, excluding deposits in foreign office, decreased by $278 million. The decrease was driven by a decline in short-term noninterest-bearing deposit balances from commercial clients and lower certificates of deposit. These decreases were partly offset by increases in NOW and money market deposit accounts.

ASSET QUALITY


dollars in millions										Change 3Q15 vs.
	3Q15			2Q15			3Q14			2Q15			3Q14
Net loan charge-offs	$	41		$	36		$	31			13.9	%		32.3	%
Net loan charge-offs to average total loans		.27	%		.25	%		.22	%		N/A			N/A
Nonperforming loans at period end^(a)	$	400		$	419		$	401			(4.5	)%		(.2	)%
Nonperforming assets at period end		417			440			418			(5.2	)		(.2	)
Allowance for loan and lease losses		790			796			804			(.8	)		(1.7	)
Allowance for loan and lease losses to nonperforming loans		197.5	%		190.0	%		200.5	%		N/A			N/A
Provision for credit losses	$	45		$	41		$	19			9.8	%		136.8	%

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

N/A = Not Applicable

Key’s provision for credit losses was $45 million for the third quarter of 2015, compared to $19 million for the third quarter of 2014 and $41 million for the second quarter of 2015. Key’s allowance for loan and lease losses was $790 million, or 1.31% of total period-end loans, at September 30, 2015, compared to 1.43% at September 30, 2014, and 1.37% at June 30, 2015.

Net loan charge-offs for the third quarter of 2015 totaled $41 million, or .27% of average total loans. These results compare to $31 million, or .22%, for the third quarter of 2014, and $36 million, or .25%, for the second quarter of 2015.

At September 30, 2015, Key’s nonperforming loans totaled $400 million and represented .67% of period-end portfolio loans, compared to .71% at September 30, 2014, and .72% at June 30, 2015. Nonperforming assets at September 30, 2015 totaled $417 million and represented .69% of period-end portfolio loans and OREO and other nonperforming assets, compared to .74% at September 30, 2014, and .75% at June 30, 2015.

KeyCorp Reports Third Quarter 2015 Profit

October 15, 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 September 30, 2015.

Capital Ratios


	9-30-15			6-30-15			9-30-14
Common Equity Tier 1^{(a), (b)}		10.51	%		10.71	%		N/A
Tier 1 common equity^(b)		N/A			N/A			11.26	%
Tier 1 risk-based capital^(a)		10.90	%		11.11	%		12.01
Total risk based capital^(a)		12.51			12.66			14.10
Tangible common equity to tangible assets^(b)		9.90			9.86			10.26
Leverage^(a)		10.67			10.74			11.15

(a)	9-30-15 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 September 30, 2015, Key’s estimated Common Equity Tier 1 and Tier 1 risk-based capital ratios stood at 10.51% and 10.90%, respectively. In addition, the tangible common equity ratio was 9.90% at September 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 ratio as calculated under the fully phased-in Regulatory Capital Rules was 10.41% at September 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 3Q15 vs.
	3Q15			2Q15			3Q14			2Q15			3Q14
Shares outstanding at beginning of period		843,608			850,920			876,823			(.9	)%		(3.8	)%
Common shares repurchased		(8,386	)		(8,794	)		(8,830	)		(4.6	)		(5.0	)
Shares reissued (returned) under employee benefit plans		63			1,482			484			(95.7	)		(87.0	)

Shares outstanding at end of period		835,285			843,608			868,477			(1.0	)%		(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 third quarter of 2015, Key completed $123 million of common share repurchases, including repurchases to offset issuances of common shares under employee compensation plans.

LINE OF BUSINESS RESULTS

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

KeyCorp Reports Third Quarter 2015 Profit

October 15, 2015

Page 7

In the third quarter of 2015, Key enhanced the approach used to determine the commercial reserve factors used in estimating the quantitative component of the commercial allowance for loan and lease losses. In addition, Key began utilizing an enhanced framework to quantify commercial allowance for loan and lease loss adjustments resulting from qualitative factors not fully captured within the statistical analysis of expected loss. The impact of these changes was largely neutral to the total allowance for loan and lease losses at September 30, 2015. However, because the quantitative reserve is allocated to the business segments at a loan level, while the qualitative portion is allocated at the portfolio level, the impact of the methodology enhancements on the allowance for each business segment and each portfolio caused the business segment and commercial portfolio reserves to increase or decrease accordingly. While the impact of the increases and decreases on the business segment and commercial portfolio reserves was not significant, the current quarter provision for credit losses within each business segment is not comparable to prior period amounts as a result of these methodology enhancements.

Major Business Segments


dollars in millions										Change 3Q15 vs.
	3Q15			2Q15			3Q14			2Q15			3Q14
Revenue from continuing operations (TE)
Key Community Bank	$	579		$	560		$	558			3.4	%		3.8	%
Key Corporate Bank		454			477			400			(4.8	)		13.5
Other Segments		35			44			44			(20.5	)		(20.5	)

Total segments		1,068			1,081			1,002			(1.2	)		6.6
Reconciling Items		—			(2	)		(4	)		N/M			N/M

Total	$	1,068		$	1,079		$	998			(1.0	)%		7.0	%

Income (loss) from continuing operations attributable to Key
Key Community Bank	$	71		$	67		$	60			6.0	%		18.3	%
Key Corporate Bank		138			133			134			3.8			3.0
Other Segments		26			31			27			(16.1	)		(3.7	)

Total segments		235			231			221			1.7			6.3
Reconciling Items		(13	)		4			(18	)		N/M			N/M

Total	$	222		$	235		$	203			(5.5	)%		9.4	%

TE = Taxable Equivalent, N/M = Not Meaningful

Key Community Bank


dollars in millions							Change 3Q15 vs.
	3Q15		2Q15		3Q14		2Q15			3Q14
Summary of operations
Net interest income (TE)	$	379	$	362	$	359		4.7	%		5.6	%
Noninterest income		200		198		199		1.0			.5

Total revenue (TE)		579		560		558		3.4			3.8
Provision for credit losses		18		3		21		500.0			(14.3	)
Noninterest expense		448		450		441		(.4	)		1.6

Income (loss) before income taxes (TE)		113		107		96		5.6			17.7
Allocated income taxes (benefit) and TE adjustments		42		40		36		5.0			16.7

Net income (loss) attributable to Key	$	71	$	67	$	60		6.0	%		18.3	%

Average balances
Loans and leases	$	31,039	$	30,707	$	30,103		1.1	%		3.1	%
Total assets		33,090		32,753		32,173		1.0			2.9
Deposits		51,234		50,766		50,303		.9			1.9
Assets under management at period end	$	35,158	$	38,399	$	39,249		(8.4	)%		(10.4	)%

TE = Taxable Equivalent

KeyCorp Reports Third Quarter 2015 Profit

October 15, 2015

Page 8

Additional Key Community Bank Data


dollars in millions										Change 3Q15 vs.
	3Q15			2Q15			3Q14			2Q15			3Q14
Noninterest income
Trust and investment services income	$	73		$	76		$	73			(3.9	)%		—
Service charges on deposit accounts		56			52			57			7.7			(1.8	)%
Cards and payments income		43			43			39			—			10.3
Other noninterest income		28			27			30			3.7			(6.7	)

Total noninterest income	$	200		$	198		$	199			1.0	%		.5	%

Average deposit balances
NOW and money market deposit accounts	$	28,568		$	28,284		$	27,403			1.0	%		4.3	%
Savings deposits		2,362			2,385			2,419			(1.0	)		(2.4	)
Certificates of deposit ($100,000 or more)		1,560			1,547			2,072			.8			(24.7	)
Other time deposits		3,061			3,132			3,406			(2.3	)		(10.1	)
Deposits in foreign office		271			299			320			(9.4	)		(15.3	)
Noninterest-bearing deposits		15,412			15,119			14,683			1.9			5.0

Total deposits	$	51,234		$	50,766		$	50,303			.9	%		1.9	%

Home equity loans
Average balance	$	10,281		$	10,266		$	10,368
Weighted-average loan-to-value ratio (at date of origination)		71	%		71	%		71	%
Percent first lien positions		60			60			59
Other data
Branches		972			989			997
Automated teller machines		1,259			1,280			1,290

Key Community Bank Summary of Operations

•

Positive operating leverage from prior year

•

Net income increased to $71 million, up 18.3% from prior year

•

Commercial, financial and agricultural loan growth of $1 billion, or 8.7% from prior year

•

Average deposits up $931 million, or 1.9% from the prior year

Key Community Bank recorded net income attributable to Key of $71 million for the third quarter of 2015, compared to net income attributable to Key of $60 million for the year-ago quarter.

Taxable-equivalent net interest income increased by $20 million, or 5.6%, from the third quarter of 2014 due to an increase in average loans and leases of 3.1%, including commercial, financial and agricultural loans, which grew by $1 billion, or 8.7%, from the prior year. Average deposits increased 1.9% from one year ago.

Noninterest income remained relatively stable from the year-ago quarter. Core revenue continues to improve, driven by growth in cards and payments income of $4 million, mostly offset by lower service charges on deposit accounts and a decrease in other income.

The provision for credit losses decreased by $3 million, or 14.3%, from the third quarter of 2014, due to the enhancements to the approach utilized to determine the allowance for loan and lease losses discussed above.

Noninterest expense increased by $7 million, or 1.6%, from the year-ago quarter. Personnel expense increased $1 million while nonpersonnel expense increased by $6 million.

KeyCorp Reports Third Quarter 2015 Profit

October 15, 2015

Page 9

Key Corporate Bank


dollars in millions								Change 3Q15 vs.
	3Q15			2Q15		3Q14		2Q15			3Q14
Summary of operations
Net interest income (TE)	$	220		$	227	$	215		(3.1	)%		2.3	%
Noninterest income		234			250		185		(6.4	)		26.5

Total revenue (TE)		454			477		400		(4.8	)		13.5
Provision for credit losses		30			41		2		(26.8	)		N/M
Noninterest expense		246			252		213		(2.4	)		15.5

Income (loss) before income taxes (TE)		178			184		185		(3.3	)		(3.8	)
Allocated income taxes and TE adjustments		42			51		51		(17.6	)		(17.6	)

Net income (loss)		136			133		134		2.3			1.5
Less: Net income (loss) attributable to noncontrolling interests		(2	)		—		—		N/M			N/M

Net income (loss) attributable to Key	$	138		$	133	$	134		3.8	%		3.0	%

Average balances
Loans and leases	$	26,425		$	25,298	$	23,215		4.5	%		13.8	%
Loans held for sale		918			1,234		481		(25.6	)		90.9
Total assets		32,163			31,228		28,268		3.0			13.8
Deposits		18,809			19,708		17,599		(4.6	)		6.9
Assets under management at period end		—			—	$	34		N/M			N/M

TE = Taxable Equivalent, N/M = Not Meaningful

Additional Key Corporate Bank Data


dollars in millions							Change 3Q15 vs.
	3Q15		2Q15		3Q14		2Q15			3Q14
Noninterest income
Trust and investment services income	$	35	$	35	$	26		—			34.6	%
Investment banking and debt placement fees		108		139		86		(22.3	)%		25.6
Operating lease income and other leasing gains		16		18		14		(11.1	)		14.3
Corporate services income		46		33		30		39.4			53.3
Service charges on deposit accounts		11		11		11		—			—
Cards and payments income		4		4		3		—			33.3

Payments and services income		61		48		44		27.1			38.6
Mortgage servicing fees		11		9		9		22.2			22.2
Other noninterest income		3		1		6		200.0			(50.0	)

Total noninterest income	$	234	$	250	$	185		(6.4	)%		26.5	%

N/M = Not Meaningful

Key Corporate Bank Summary of Operations

•

Investment banking and debt placement fees up 25.6% from the prior year

•

Revenue up 13.5% from the prior year

•

Average loan and lease balances up 13.8% from the prior year

Key Corporate Bank recorded net income attributable to Key of $138 million for the third quarter of 2015, an increase of $4 million, or 3%, from the same period one year ago.

Taxable-equivalent net interest income increased by $5 million, or 2.3%, compared to the third quarter of 2014. Average earning assets increased $3 billion, or 12.2%, from the year-ago quarter, primarily driven by growth in commercial, financial and agricultural loans. Average deposit balances increased $1.2 billion, or 6.9%, from the year-ago quarter, driven by commercial mortgage servicing deposits and other commercial client inflows.

KeyCorp Reports Third Quarter 2015 Profit

October 15, 2015

Page 10

Noninterest income was up $49 million, or 26.5% from the prior year. Investment banking and debt placement fees increased $22 million, or 25.6%, driven by strength in syndications, debt underwriting, and financial advisory fees. Corporate services income increased $16 million, or 53.3%, due to higher derivatives income and loan commitment fees. Trust and investment services income increased $9 million, or 34.6%, primarily due to the September 2014 acquisition of Pacific Crest Securities.

The provision for credit losses increased $28 million from the same period one year ago, primarily due to the enhancements to the approach utilized to determine the allowance for loan and lease losses discussed above, as well as a 13.8% increase in average loan balances.

Noninterest expense increased by $33 million, or 15.5%, from the third quarter of 2014. This increase was driven primarily by higher personnel expense, from increased performance-based compensation related to a strong capital markets business performance, along with a full quarter impact of the September 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 $26 million for the third quarter of 2015, essentially unchanged compared to net income attributable to Key of $27 million for the same period last year.

*****

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 $95.4 billion at September 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.

KeyCorp Reports Third Quarter 2015 Profit

October 15, 2015

Page 11

CONTACTS:

ANALYSTS

Vernon L. Patterson

216.689.0520

[email protected]

Melanie S. Misconish

216.689.4545

[email protected]

MEDIA

Jack Sparks

720.904.4554

[email protected]

Twitter: @keybank_news

INVESTOR

RELATIONS: www.key.com/ir

KEY MEDIA

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, as well as in KeyCorp’s subsequent SEC filings, all of which have been filed with the Securities and Exchange Commission (the “SEC”) and are 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, October 15, 2015. An audio replay of the call will be available through October 22, 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.

*****

KeyCorp Reports Third Quarter 2015 Profit

October 15, 2015

Page 12

KeyCorp

Third 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

KeyCorp Reports Third Quarter 2015 Profit

October 15, 2015

Page 13

Financial Highlights

(dollars in millions, except per share amounts)


	Three months ended
	9-30-15			6-30-15			9-30-14
Summary of operations
Net interest income (TE)	$	598		$	591		$	581
Noninterest income		470			488			417

Total revenue (TE)		1,068			1,079			998
Provision for credit losses		45			41			19
Noninterest expense		724			711			706
Income (loss) from continuing operations attributable to Key		222			235			203
Income (loss) from discontinued operations, net of taxes^(a)		(3	)		3			(17	)
Net income (loss) attributable to Key		219			238			186
Income (loss) from continuing operations attributable to Key common shareholders	$	216		$	230		$	197
Income (loss) from discontinued operations, net of taxes^(a)		(3	)		3			(17	)
Net income (loss) attributable to Key common shareholders		213			233			180

Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	.26		$	.27		$	.23
Income (loss) from discontinued operations, net of taxes ^(a)		—			—			(.02	)
Net income (loss) attributable to Key common shareholders ^(b)		.26			.28			.21
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution		.26			.27			.23
Income (loss) from discontinued operations, net of taxes — assuming dilution ^(a)		—			—			(.02	)
Net income (loss) attributable to Key common shareholders — assuming dilution ^(b)		.25			.27			.21
Cash dividends paid		.075			.075			.065
Book value at period end		12.47			12.21			11.74
Tangible book value at period end		11.17			10.92			10.47
Market price at period end		13.01			15.02			13.33

Performance ratios
From continuing operations:
Return on average total assets		.95	%		1.03	%		.92	%
Return on average common equity		8.30			8.96			7.68
Return on average tangible common equity ^(c)		9.27			10.01			8.55
Net interest margin (TE)		2.87			2.88			2.96
Cash efficiency ratio ^(c)		66.9			65.1			69.7

From consolidated operations:
Return on average total assets		.92	%		1.02	%		.81	%
Return on average common equity		8.19			9.07			7.01
Return on average tangible common equity ^(c)		9.14			10.14			7.81
Net interest margin (TE)		2.84			2.85			2.94
Loan to deposit ^(d)		89.3			87.3			87.4

Capital ratios at period end
Key shareholders’ equity to assets		11.22	%		11.19	%		11.68	%
Key common shareholders’ equity to assets		10.91			10.89			11.36
Tangible common equity to tangible assets ^(c)		9.90			9.86			10.26
Common Equity Tier 1 ^{(c), (e)}		10.51			10.71			N/A
Tier 1 common equity ^(c)		N/A			N/A			11.26
Tier 1 risk-based capital ^(e)		10.90			11.11			12.01
Total risk-based capital ^(e)		12.51			12.66			14.10
Leverage ^(e)		10.67			10.74			11.15

Asset quality — from continuing operations
Net loan charge-offs	$	41		$	36		$	31
Net loan charge-offs to average loans		.27	%		.25	%		.22	%
Allowance for loan and lease losses	$	790		$	796		$	804
Allowance for credit losses		844			841			839
Allowance for loan and lease losses to period-end loans		1.31	%		1.37	%		1.43	%
Allowance for credit losses to period-end loans		1.40			1.44			1.49
Allowance for loan and lease losses to nonperforming loans		197.5			190.0			200.5
Allowance for credit losses to nonperforming loans		211.0			200.7			209.2
Nonperforming loans at period end ^(f)	$	400		$	419		$	401
Nonperforming assets at period end		417			440			418
Nonperforming loans to period-end portfolio loans		.67	%		.72	%		.71	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		.69			.75			.74

Trust and brokerage assets
Assets under management	$	35,158		$	38,399		$	39,283
Nonmanaged and brokerage assets		46,796			48,789			48,273

Other data
Average full-time equivalent employees		13,555			13,455			13,905
Branches		972			989			997
Taxable-equivalent adjustment	$	7		$	7		$	6

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October 15, 2015

Page 14

Financial Highlights (continued)

(dollars in millions, except per share amounts)


	Nine months ended
	9-30-15			9-30-14
Summary of operations
Net interest income (TE)	$	1,766		$	1,729
Noninterest income		1,395			1,307

Total revenue (TE)		3,161			3,036
Provision for credit losses		121			35
Noninterest expense		2,104			2,057
Income (loss) from continuing operations attributable to Key		685			688
Income (loss) from discontinued operations, net of taxes ^(a)		5			(41	)
Net income (loss) attributable to Key		690			647
Income (loss) from continuing operations attributable to Key common shareholders	$	668		$	671
Income (loss) from discontinued operations, net of taxes ^(a)		5			(41	)
Net income (loss) attributable to Key common shareholders		673			630

Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	.79		$	.77
Income (loss) from discontinued operations, net of taxes ^(a)		.01			(.05	)
Net income (loss) attributable to Key common shareholders ^(b)		.80			.72
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution		.78			.76
Income (loss) from discontinued operations, net of taxes — assuming dilution ^(a)		.01			(.05	)
Net income (loss) attributable to Key common shareholders — assuming dilution ^(b)		.79			.71
Cash dividends paid		.215			.185

Performance ratios
From continuing operations:
Return on average total assets		1.00	%		1.06	%
Return on average common equity		8.67			8.84
Return on average tangible common equity ^(c)		9.69			9.83
Net interest margin (TE)		2.88			2.98
Cash efficiency ratio ^(c)		65.7			66.7

From consolidated operations:
Return on average total assets		.99	%		.95	%
Return on average common equity		8.74			8.30
Return on average tangible common equity ^(c)		9.76			9.23
Net interest margin (TE)		2.85			2.94

Asset quality — from continuing operations
Net loan charge-offs	$	105		$	81
Net loan charge-offs to average total loans		.24	%		.20	%

Other data
Average full-time equivalent employees		13,525			13,942
Taxable-equivalent adjustment	$	20		$	18

(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)	9-30-15 ratio is estimated.

(f)	Loan balances exclude $12 million, $12 million, and $14 million of purchased credit impaired loans at September 30, 2015, June 30, 2015, and September 30, 2014, respectively.

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

KeyCorp Reports Third Quarter 2015 Profit

October 15, 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
	9-30-15			6-30-15			9-30-14
Tangible common equity to tangible assets at period end
Key shareholders’ equity (GAAP)	$	10,705		$	10,590		$	10,486
Less: Intangible assets ^(a)		1,084			1,085			1,105
Preferred Stock, Series A ^(b)		281			281			282

Tangible common equity (non-GAAP)	$	9,340		$	9,224		$	9,099

Total assets (GAAP)	$	95,422		$	94,606		$	89,784
Less: Intangible assets ^(a)		1,084			1,085			1,105

Tangible assets (non-GAAP)	$	94,338		$	93,521		$	88,679

Tangible common equity to tangible assets ratio (non-GAAP)		9.90	%		9.86	%		10.26	%

Common Equity Tier 1 at period end
Key shareholders’ equity (GAAP)	$	10,705		$	10,590			—
Less: Preferred Stock, Series A ^(b)		281			281			—

Common Equity Tier 1 capital before adjustments and deductions		10,424			10,309			—
Less: Goodwill, net of deferred taxes		1,037			1,034			—
Intangible assets, net of deferred taxes		30			33			—
Deferred tax assets		1			1			—
Net unrealized gains (losses) on available-for-sale securities, net of deferred taxes		55			—			—
Accumulated gains (losses) on cash flow hedges, net of deferred taxes		20			(20	)		—
Amounts in accumulated other comprehensive income (loss) attributed to pension and postretirement benefit costs, net of deferred taxes		(386	)		(361	)		—

Total Common Equity Tier 1 capital ^(c)	$	9,667		$	9,622			—

Net risk-weighted assets (regulatory) ^(c)	$	91,998		$	89,851			—
Common Equity Tier 1 ratio (non-GAAP) ^(c)		10.51	%		10.71	%		—

Tier 1 common equity at period end
Key shareholders’ equity (GAAP)		—			—		$	10,486
Qualifying capital securities		—			—			340
Less: Goodwill		—			—			1,051
Accumulated other comprehensive income (loss) ^(d)		—			—			(366	)
Other assets ^(e)		—			—			110

Total Tier 1 capital (regulatory)		—			—			10,031
Less: Qualifying capital securities		—			—			340
Preferred Stock, Series A ^(b)		—			—			282

Total Tier 1 common equity (non-GAAP)		—			—		$	9,409

Net risk-weighted assets (regulatory)		—			—		$	83,547
Tier 1 common equity ratio (non-GAAP)		—			—			11.26	%

KeyCorp Reports Third Quarter 2015 Profit

October 15, 2015

Page 16

GAAP to Non-GAAP Reconciliations (continued)

(dollars in millions)


	Three months ended
	9-30-15			6-30-15			9-30-14
Pre-provision net revenue
Net interest income (GAAP)	$	591		$	584		$	575
Plus: Taxable-equivalent adjustment		7			7			6
Noninterest income (GAAP)		470			488			417
Less: Noninterest expense (GAAP)		724			711			706

Pre-provision net revenue from continuing operations (non-GAAP)	$	344		$	368		$	292


Average tangible common equity
Average Key shareholders’ equity (GAAP)	$	10,614		$	10,590		$	10,473
Less: Intangible assets (average)^(f)		1,083			1,086			1,037
Preferred Stock, Series A (average)		290			290			291

Average tangible common equity (non-GAAP)	$	9,241		$	9,214		$	9,145


Return on average tangible common equity from continuing operations
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP)	$	216		$	230		$	197
Average tangible common equity (non-GAAP)		9,241			9,214			9,145
Return on average tangible common equity from continuing operations (non-GAAP)		9.27	%		10.01	%		8.55	%

Return on average tangible common equity consolidated
Net income (loss) attributable to Key common shareholders (GAAP)	$	213		$	233		$	180
Average tangible common equity (non-GAAP)		9,241			9,214			9,145
Return on average tangible common equity consolidated (non-GAAP)		9.14	%		10.14	%		7.81	%

Cash efficiency ratio
Noninterest expense (GAAP)	$	724		$	711		$	706
Less: Intangible asset amortization (GAAP)		9			9			10

Adjusted noninterest expense (non-GAAP)	$	715		$	702		$	696

Net interest income (GAAP)	$	591		$	584		$	575
Plus: Taxable-equivalent adjustment		7			7			6
Noninterest income (GAAP)		470			488			417

Total taxable-equivalent revenue (non-GAAP)	$	1,068		$	1,079		$	998

Cash efficiency ratio (non-GAAP)		66.9	%		65.1	%		69.7	%

	Three months ended
	9-30-15
Common Equity Tier 1 under the Regulatory Capital Rules (“RCR”) (estimates)
Common Equity Tier 1 under current RCR	$	9,667
Adjustments from current RCR to the fully phased-in RCR:
Deferred tax assets and other intangible assets^(g)		(45	)

Common Equity Tier 1 anticipated under the fully phased-in RCR^(h)	$	9,622

Net risk-weighted assets under current RCR	$	91,998
Adjustments from current RCR to the fully phased-in RCR:
Mortgage servicing assets⁽ⁱ⁾		479
All other assets^(j)		(10	)

Total risk-weighted assets anticipated under the fully phased-in RCR^(h)	$	92,467

Common Equity Tier 1 ratio under the fully phased-in RCR^(h)		10.41	%

KeyCorp Reports Third Quarter 2015 Profit

October 15, 2015

Page 17

GAAP to Non-GAAP Reconciliations (continued)

(dollars in millions)


	Nine months ended
	9-30-15			9-30-14
Pre-provision net revenue
Net interest income (GAAP)	$	1,746		$	1,711
Plus: Taxable-equivalent adjustment		20			18
Noninterest income (GAAP)		1,395			1,307
Less: Noninterest expense (GAAP)		2,104			2,057

Pre-provision net revenue from continuing operations (non-GAAP)	$	1,057		$	979


Average tangible common equity
Average Key shareholders’ equity (GAAP)	$	10,591		$	10,435
Less: Intangible assets (average)^(k)		1,086			1,020
Preferred Stock, Series A (average)		290			291

Average tangible common equity (non-GAAP)	$	9,215		$	9,124


Return on average tangible common equity from continuing operations
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP)	$	668		$	671
Average tangible common equity (non-GAAP)		9,215			9,124
Return on average tangible common equity from continuing operations (non-GAAP)		9.69	%		9.83	%

Return on average tangible common equity consolidated
Net income (loss) attributable to Key common shareholders (GAAP)	$	673		$	630
Average tangible common equity (non-GAAP)		9,215			9,124
Return on average tangible common equity consolidated (non-GAAP)		9.76	%		9.23	%

Cash efficiency ratio
Noninterest expense (GAAP)	$	2,104		$	2,057
Less: Intangible asset amortization (GAAP)		27			29

Adjusted noninterest expense (non-GAAP)	$	2,077		$	2,028

Net interest income (GAAP)	$	1,746		$	1,711
Plus: Taxable-equivalent adjustment		20			18
Noninterest income (GAAP)		1,395			1,307

Total taxable-equivalent revenue (non-GAAP)	$	3,161		$	3,036

Cash efficiency ratio (non-GAAP)		65.7	%		66.8	%

(a)	For the three months ended September 30, 2015, June 30, 2015, and September 30, 2014, intangible assets exclude $50 million, $55 million, and $72 million, respectively, of period-end purchased credit card receivables.

(b)	Net of capital surplus.

(c)	9-30-15 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 September 30, 2014.

(f)	For the three months ended September 30, 2015, June 30, 2015, and September 30, 2014, average intangible assets exclude $52 million, $58 million, and $76 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 intangible assets (other than goodwill and mortgage servicing assets) subject to the transition provisions of the final rule.

(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 nine months ended September 30, 2015, and September 30, 2014, average intangible assets exclude $58 million and $82 million, respectively, of average purchased credit card receivables.

GAAP = U.S. generally accepted accounting principles

KeyCorp Reports Third Quarter 2015 Profit

October 15, 2015

Page 18

Consolidated Balance Sheets

(dollars in millions)


	9-30-15			6-30-15			9-30-14
Assets
Loans	$	60,085		$	58,264		$	56,155
Loans held for sale		916			835			784
Securities available for sale		14,376			14,244			12,245
Held-to-maturity securities		4,936			5,022			4,997
Trading account assets		811			674			965
Short-term investments		1,964			3,222			2,342
Other investments		691			703			822

Total earning assets		83,779			82,964			78,310
Allowance for loan and lease losses		(790	)		(796	)		(804	)
Cash and due from banks		470			693			651
Premises and equipment		771			788			832
Operating lease assets		315			296			304
Goodwill		1,060			1,057			1,051
Other intangible assets		74			83			126
Corporate-owned life insurance		3,516			3,502			3,456
Derivative assets		793			536			413
Accrued income and other assets		3,348			3,314			3,024
Discontinued assets		2,086			2,169			2,421

Total assets	$	95,422		$	94,606		$	89,784


Liabilities
Deposits in domestic offices:
NOW and money market deposit accounts	$	37,301		$	36,024		$	33,941
Savings deposits		2,338			2,370			2,390
Certificates of deposit ($100,000 or more)		2,001			2,032			2,533
Other time deposits		3,020			3,105			3,338

Total interest-bearing deposits		44,660			43,531			42,202
Noninterest-bearing deposits		25,985			26,640			25,697
Deposits in foreign office — interest-bearing		428			498			557

Total deposits		71,073			70,669			68,456
Federal funds purchased and securities sold under repurchase agreements		407			444			657
Bank notes and other short-term borrowings		677			528			996
Derivative liabilities		676			560			384
Accrued expense and other liabilities		1,562			1,537			1,613
Long-term debt		10,310			10,267			7,172
Discontinued liabilities		—			—			3

Total liabilities		84,705			84,005			79,281

Equity
Preferred stock, Series A		290			290			291
Common shares		1,017			1,017			1,017
Capital surplus		3,914			3,898			3,984
Retained earnings		8,764			8,614			8,082
Treasury stock, at cost		(3,008	)		(2,884	)		(2,563	)
Accumulated other comprehensive income (loss)		(272	)		(345	)		(325	)

Key shareholders’ equity		10,705			10,590			10,486
Noncontrolling interests		12			11			17

Total equity		10,717			10,601			10,503

Total liabilities and equity	$	95,422		$	94,606		$	89,784

Common shares outstanding (000)		835,285			843,608			868,477

KeyCorp Reports Third Quarter 2015 Profit

October 15, 2015

Page 19

Consolidated Statements of Income

(dollars in millions, except per share amounts)


	Three months ended								Nine months ended
	9-30-15			6-30-15		9-30-14			9-30-15		9-30-14
Interest income
Loans	$	542		$	532	$	531		$	1,597	$	1,576
Loans held for sale		10			12		4			29		13
Securities available for sale		75			72		67			217		210
Held-to-maturity securities		24			24		25			72		70
Trading account assets		5			5		6			15		19
Short-term investments		1			2		2			5		4
Other investments		4			5		4			14		16

Total interest income		661			652		639			1,949		1,908

Interest expense
Deposits		27			26		28			79		91
Federal funds purchased and securities sold under repurchase agreements		—			—		1			—		2
Bank notes and other short-term borrowings		2			2		2			6		6
Long-term debt		41			40		33			118		98

Total interest expense		70			68		64			203		197


Net interest income		591			584		575			1,746		1,711
Provision for credit losses		45			41		19			121		35

Net interest income after provision for credit losses		546			543		556			1,625		1,676

Noninterest income
Trust and investment services income		108			111		99			328		291
Investment banking and debt placement fees		109			141		88			318		271
Service charges on deposit accounts		68			63		68			192		197
Operating lease income and other leasing gains		15			24		17			58		81
Corporate services income		57			43		42			143		125
Cards and payments income		47			47		42			136		123
Corporate-owned life insurance income		30			30		26			91		80
Consumer mortgage income		3			4		3			10		7
Mortgage servicing fees		11			9		9			33		35
Net gains (losses) from principal investing		11			11		9			51		60
Other income ^(a)		11			5		14			35		37

Total noninterest income		470			488		417			1,395		1,307

Noninterest expense
Personnel		426			408		405			1,223		1,182
Net occupancy		60			66		66			191		198
Computer processing		41			42		39			121		118
Business services and professional fees		40			42		36			115		118
Equipment		22			22		25			66		73
Operating lease expense		11			12		11			34		31
Marketing		17			15		15			40		33
FDIC assessment		8			8		9			24		21
Intangible asset amortization		9			9		10			27		29
OREO expense, net		2			1		1			5		3
Other expense		88			86		89			258		251

Total noninterest expense		724			711		706			2,104		2,057

Income (loss) from continuing operations before income taxes		292			320		267			916		926
Income taxes		72			84		64			230		232

Income (loss) from continuing operations		220			236		203			686		694
Income (loss) from discontinued operations, net of taxes		(3	)		3		(17	)		5		(41	)

Net income (loss)		217			239		186			691		653
Less: Net income (loss) attributable to noncontrolling interests		(2	)		1		—			1		6

Net income (loss) attributable to Key	$	219		$	238	$	186		$	690	$	647

Income (loss) from continuing operations attributable to Key common shareholders	$	216		$	230	$	197		$	668	$	671
Net income (loss) attributable to Key common shareholders		213			233		180			673		630

Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	.26		$	.27	$	.23		$	.79	$	.77
Income (loss) from discontinued operations, net of taxes		—			—		(.02	)		.01		(.05	)
Net income (loss) attributable to Key common shareholders ^(b)		.26			.28		.21			.80		.72

Per common share — assuming dilution
Income (loss) from continuing operations attributable to Key common shareholders	$	.26		$	.27	$	.23		$	.78	$	.76
Income (loss) from discontinued operations, net of taxes		—			—		(.02	)		.01		(.05	)
Net income (loss) attributable to Key common shareholders ^(b)		.25			.27		.21			.79		.71
Cash dividends declared per common share	$	.075		$	.075	$	.065		$	.215	$	.185
Weighted-average common shares outstanding (000)		831,430			839,454		867,350			839,758		875,728
Effect of common share options and other stock awards		7,450			6,858		6,772			7,613		6,723

Weighted-average common shares and potential common shares outstanding (000) ^(c)		838,880			846,312		874,122			847,371		882,451

(a)

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

(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 Third Quarter 2015 Profit

October 15, 2015

Page 20

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

(dollars in millions)


	Third Quarter 2015								Second Quarter 2015								Third 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)	$	30,374		$	244		3.19	%	$	29,017		$	233		3.23	%	$	26,456		$	218		3.28	%
Real estate — commercial mortgage		7,988			73		3.65			7,981			74		3.70			8,142			78		3.79
Real estate — construction		1,164			11		3.78			1,199			11		3.60			1,030			10		3.78
Commercial lease financing		3,946			35		3.57			3,981			36		3.58			4,145			38		3.66

Total commercial loans		43,472			363		3.32			42,178			354		3.36			39,773			344		3.44
Real estate — residential mortgage		2,258			24		4.19			2,237			23		4.22			2,204			24		4.35
Home equity:
Key Community Bank		10,281			101		3.88			10,266			99		3.89			10,368			102		3.91
Other		229			4		7.87			244			5		7.86			290			6		7.80

Total home equity loans		10,510			105		3.96			10,510			104		3.98			10,658			108		4.01
Consumer other — Key Community Bank		1,597			26		6.51			1,571			26		6.52			1,534			26		6.87
Credit cards		759			21		10.74			737			19		10.57			716			20		11.12
Consumer other:
Marine		645			10		6.38			702			11		6.30			856			13		6.23
Other		40			1		8.00			43			1		7.77			55			2		7.63

Total consumer other		685			11		6.47			745			12		6.38			911			15		6.32

Total consumer loans		15,809			187		4.69			15,800			184		4.69			16,023			193		4.78

Total loans		59,281			550		3.69			57,978			538		3.72			55,796			537		3.82
Loans held for sale		939			10		3.96			1,263			12		3.91			502			4		3.87
Securities available for sale^(b), (e)		14,247			74		2.11			13,360			73		2.17			11,939			67		2.25
Held-to-maturity securities^(b)		4,923			24		1.95			4,965			24		1.91			5,108			25		1.90
Trading account assets		699			5		2.50			805			5		2.55			893			6		2.68
Short-term investments		2,257			1		.26			3,228			2		.26			3,048			2		.19
Other investments^(e)		696			4		2.52			713			5		2.48			847			4		2.12

Total earning assets		83,042			668		3.21			82,312			659		3.21			78,133			645		3.30
Allowance for loan and lease losses		(790	)							(793	)							(809	)
Accrued income and other assets		10,399								10,140								9,799
Discontinued assets		2,118								2,194								4,138

Total assets	$	94,769							$	93,853							$	91,261

Liabilities
NOW and money market deposit accounts	$	36,289			15		.16		$	36,122			14		.16		$	33,969			12		.14
Savings deposits		2,371			—		.02			2,393			—		.02			2,428			1		.02
Certificates of deposit ($100,000 or more)^(f)		1,985			6		1.27			2,010			6		1.25			2,629			8		1.23
Other time deposits		3,064			6		.70			3,136			5		.70			3,413			7		.83
Deposits in foreign office		492			—		.23			583			1		.23			595			—		.23

Total interest-bearing deposits		44,201			27		.24			44,244			26		.24			43,034			28		.26
Federal funds purchased and securities sold under repurchase agreements		859			—		.08			557			—		.02			1,176			1		.19
Bank notes and other short-term borrowings		567			2		1.51			657			2		1.39			484			2		1.79
Long-term debt^{(f), (g)}		7,895			41		2.19			6,968			40		2.30			4,868			33		2.88

Total interest-bearing liabilities		53,522			70		.53			52,426			68		.52			49,562			64		.52

Noninterest-bearing deposits		26,268								26,594								25,302
Accrued expense and other liabilities		2,236								2,039								1,768
Discontinued liabilities^(g)		2,118								2,194								4,138

Total liabilities		84,144								83,253								80,770

Equity
Key shareholders’ equity		10,614								10,590								10,473
Noncontrolling interests		11								10								18

Total equity		10,625								10,600								10,491

Total liabilities and equity	$	94,769							$	93,853							$	91,261

Interest rate spread (TE)							2.68	%							2.69	%							2.78	%

Net interest income (TE) and net interest margin (TE)					598		2.87	%					591		2.88	%					581		2.96	%

TE adjustment^(b)					7								7								6

Net interest income, GAAP basis				$	591							$	584							$	575

(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, $88 million, and $92 million of assets from commercial credit cards for the three months ended September 30, 2015, June 30, 2015, and September 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 Key’s matched funds transfer pricing methodology to discontinued operations.

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

KeyCorp Reports Third Quarter 2015 Profit

October 15, 2015

Page 21

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

(dollars in millions)


	Nine months ended September 30, 2015								Nine months ended September 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)	$	29,244		$	700		3.20	%	$	26,100		$	643		3.29	%
Real estate — commercial mortgage		8,021			220		3.67			7,944			226		3.81
Real estate — construction		1,168			33		3.76			1,056			33		4.13
Commercial lease financing		3,998			107		3.57			4,280			118		3.67

Total commercial loans		42,431			1,060		3.34			39,380			1,020		3.46
Real estate — residential mortgage		2,241			71		4.22			2,193			72		4.40
Home equity:
Key Community Bank		10,287			299		3.89			10,332			302		3.92
Other		244			14		7.85			307			18		7.79

Total home equity loans		10,531			313		3.98			10,639			320		4.03
Consumer other — Key Community Bank		1,572			77		6.56			1,484			77		6.96
Credit cards		743			60		10.80			706			58		10.93
Consumer other:
Marine		701			33		6.34			926			43		6.20
Other		44			3		7.68			60			4		7.75

Total consumer other		745			36		6.42			986			47		6.29

Total consumer loans		15,832			557		4.71			16,008			574		4.79

Total loans		58,263			1,617		3.71			55,388			1,594		3.85
Loans held for sale		1,000			29		3.77			469			13		3.79
Securities available for sale^{(b), (e)}		13,569			217		2.15			12,229			210		2.29
Held-to-maturity securities^(b)		4,945			72		1.93			4,950			70		1.87
Trading account assets		740			15		2.62			953			19		2.66
Short-term investments		2,627			5		.26			2,672			4		.18
Other investments^(e)		717			14		2.60			890			16		2.45

Total earning assets		81,861			1,969		3.22			77,551			1,926		3.31
Allowance for loan and lease losses		(792	)							(825	)
Accrued income and other assets		10,255								9,786
Discontinued assets		2,194								4,323

Total assets	$	93,518							$	90,835

Liabilities
NOW and money market deposit accounts	$	35,793			42		.15		$	34,105			35		.14
Savings deposits		2,383			—		.02			2,466			1		.03
Certificates of deposit ($100,000 or more)^(f)		2,004			19		1.27			2,731			28		1.38
Other time deposits		3,138			17		.71			3,558			26		.96
Deposits in foreign office		534			1		.23			639			1		.23

Total interest-bearing deposits		43,852			79		.24			43,499			91		.28
Federal funds purchased and securities sold under repurchase agreements		713			—		.05			1,371			2		.18
Bank notes and other short-term borrowings		577			6		1.48			538			6		1.65
Long-term debt^{(f), (g)}		7,003			118		2.32			5,169			98		2.65

Total interest-bearing liabilities		52,145			203		.52			50,577			197		.52

Noninterest-bearing deposits		26,377								23,760
Accrued expense and other liabilities		2,200								1,724
Discontinued liabilities^(g)		2,194								4,323

Total liabilities		82,916								80,384

Equity
Key shareholders’ equity		10,591								10,435
Noncontrolling interests		11								16

Total equity		10,602								10,451

Total liabilities and equity	$	93,518							$	90,835

Interest rate spread (TE)							2.70	%							2.79	%

Net interest income (TE) and net interest margin (TE)					1,766		2.88	%					1,729		2.98	%

TE adjustment^(b)					20								18

Net interest income, GAAP basis				$	1,746							$	1,711

(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 $94 million of assets from commercial credit cards for the nine months ended September 30, 2015, and September 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 Key’s matched funds transfer pricing methodology to discontinued operations.

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

KeyCorp Reports Third Quarter 2015 Profit

October 15, 2015

Page 22

Noninterest Expense

(dollars in millions)


	Three months ended						Nine months ended
	9-30-15		6-30-15		9-30-14		9-30-15		9-30-14
Personnel ^(a)	$	426	$	408	$	405	$	1,223	$	1,182
Net occupancy		60		66		66		191		198
Computer processing		41		42		39		121		118
Business services and professional fees		40		42		36		115		118
Equipment		22		22		25		66		73
Operating lease expense		11		12		11		34		31
Marketing		17		15		15		40		33
FDIC assessment		8		8		9		24		21
Intangible asset amortization		9		9		10		27		29
OREO expense, net		2		1		1		5		3
Other expense		88		86		89		258		251

Total noninterest expense	$	724	$	711	$	706	$	2,104	$	2,057

Average full-time equivalent employees ^(b)		13,555		13,455		13,905		13,525		13,942

(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						Nine months ended
	9-30-15		6-30-15		9-30-14		9-30-15		9-30-14
Salaries	$	234	$	227	$	227	$	681	$	667
Technology contract labor, net		13		11		11		33		43
Incentive and stock-based compensation		103		109		89		295		263
Employee benefits		75		56		71		202		187
Severance		1		5		7		12		22

Total personnel expense	$	426	$	408	$	405	$	1,223	$	1,182

KeyCorp Reports Third Quarter 2015 Profit

October 15, 2015

Page 23

Loan Composition

(dollars in millions)


							Percent change 9-30-15 vs.
	9-30-15		6-30-15		9-30-14		6-30-15			9-30-14
Commercial, financial and agricultural ^(a)	$	31,095	$	29,285	$	26,683		6.2	%		16.5	%
Commercial real estate:
Commercial mortgage		8,180		7,874		8,276		3.9			(1.2	)
Construction		1,070		1,254		1,036		(14.7	)		3.3

Total commercial real estate loans		9,250		9,128		9,312		1.3			(.7	)
Commercial lease financing ^(b)		3,929		4,010		4,135		(2.0	)		(5.0	)

Total commercial loans		44,274		42,423		40,130		4.4			10.3
Residential — prime loans:
Real estate — residential mortgage		2,267		2,252		2,213		.7			2.4
Home equity:
Key Community Bank		10,282		10,296		10,380		(.1	)		(.9	)
Other		222		236		283		(5.9	)		(21.6	)

Total home equity loans		10,504		10,532		10,663		(.3	)		(1.5	)

Total residential — prime loans		12,771		12,784		12,876		(.1	)		(.8	)
Consumer other — Key Community Bank		1,612		1,595		1,546		1.1			4.3
Credit cards		770		753		724		2.3			6.4
Consumer other:
Marine		620		673		828		(7.9	)		(25.1	)
Other		38		36		51		5.6			(25.5	)

Total consumer other		658		709		879		(7.2	)		(25.1	)

Total consumer loans		15,811		15,841		16,025		(.2	)		(1.3	)

Total loans^{(c), (d)}	$	60,085	$	58,264	$	56,155		3.1	%		7.0	%

Loans Held for Sale Composition

(dollars in millions)


							Percent change 9-30-15 vs.
	9-30-15		6-30-15		9-30-14		6-30-15			9-30-14
Commercial, financial and agricultural	$	74	$	217	$	30		(65.9	)%		146.7	%
Real estate — commercial mortgage		806		576		725		39.9			11.2
Commercial lease financing		10		7		10		42.9			—
Real estate — residential mortgage		26		35		19		(25.7	)		36.8

Total loans held for sale^(e)	$	916	$	835	$	784		9.7	%		16.8	%

Summary of Changes in Loans Held for Sale

(in millions)


	3Q15			2Q15			1Q15			4Q14			3Q14
Balance at beginning of period	$	835		$	1,649		$	734		$	784		$	435
New originations		1,673			1,650			2,130			2,465			1,593
Transfers from (to) held to maturity, net		24			6			10			2			—
Loan sales		(1,616	)		(2,466	)		(1,204	)		(2,516	)		(1,243	)
Loan draws (payments), net		—			(4	)		(21	)		(1	)		(1	)

Balance at end of period^(e)	$	916		$	835		$	1,649		$	734		$	784

(a)	Loan balances include $88 million, $89 million, and $90 million of commercial credit card balances at September 30, 2015, June 30, 2015, and September 30, 2014, respectively.

(b)

Commercial lease financing includes receivables held as collateral for a secured borrowing of $162 million, $191 million, and $367 million at September 30, 2015, June 30, 2015, and September 30, 2014, respectively. Principal reductions are based on the cash payments received from these related receivables.

(c)

At September 30, 2015, total loans include purchased loans of $119 million, of which $12 million were purchased credit impaired. At June 30, 2015, total loans include purchased loans of $125 million, of which $12 million were purchased credit impaired. At September 30, 2014, total loans include purchased loans of $143 million, of which $14 million were purchased credit impaired.

(d)	Total loans exclude loans of $1.9 billion at September 30, 2015, $2 billion at June 30, 2015, and $2.4 billion at September 30, 2014, related to the discontinued operations of the education lending business.

(e)	Total loans held for sale exclude loans held for sale of $169 million at September 30, 2015, and $179 million at June 30, 2015, related to the discontinued operations of the education lending business.

N/M = Not Meaningful

KeyCorp Reports Third Quarter 2015 Profit

October 15, 2015

Page 24

Exit Loan Portfolio From Continuing Operations

(in millions)


	Balance Outstanding				Change 9-30-15 vs. 6-30-15			Net Loan Charge-offs					Balance on Nonperforming Status
	9-30-15		6-30-15		Change 9-30-15 vs. 6-30-15			3Q15^(c)			2Q15		9-30-15		6-30-15
Residential properties — homebuilder	$	6	$	6		—			—			—	$	5	$	8
Marine and RV floor plan		1		2	$	(1	)		—			—		—		1
Commercial lease financing^(a)		798		831		(33	)	$	(1	)		—		—		—

Total commercial loans		805		839		(34	)		(1	)		—		5		9
Home equity — Other		222		236		(14	)		(1	)	$	1		7		8
Marine		620		673		(53	)		3			3		6		8
RV and other consumer		44		47		(3	)		(1	)		—		1		1

Total consumer loans		886		956		(70	)		1			4		14		17

Total exit loans in loan portfolio	$	1,691	$	1,795	$	(104	)		—		$	4	$	19	$	26

Discontinued operations — education lending business (not included in exit loans above)^(b)	$	1,891	$	1,962	$	(71	)	$	7		$	2	$	8	$	6

(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 $169 million at September 30, 2015, and $179 million at June 30, 2015.

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

Asset Quality Statistics From Continuing Operations

(dollars in millions)


	3Q15			2Q15			1Q15			4Q14			3Q14
Net loan charge-offs	$	41		$	36		$	28		$	32		$	31
Net loan charge-offs to average total loans		.27	%		.25	%		.20	%		.22	%		.22	%
Allowance for loan and lease losses	$	790		$	796		$	794		$	794		$	804
Allowance for credit losses^(a)		844			841			835			829			839
Allowance for loan and lease losses to period-end loans		1.31	%		1.37	%		1.37	%		1.38	%		1.43	%
Allowance for credit losses to period-end loans		1.40			1.44			1.44			1.44			1.49
Allowance for loan and lease losses to nonperforming loans		197.5			190.0			181.7			190.0			200.5
Allowance for credit losses to nonperforming loans		211.0			200.7			191.1			198.3			209.2
Nonperforming loans at period end^(b)	$	400		$	419		$	437		$	418		$	401
Nonperforming assets at period end		417			440			457			436			418
Nonperforming loans to period-end portfolio loans		.67	%		.72	%		.75	%		.73	%		.71	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		.69			.75			.79			.76			.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, $12 million, $13 million, and $14 million of purchased credit impaired loans at September 30, 2015, June 30, 2015, March 31, 2015, December 31, 2014, and September 30, 2014, respectively.

KeyCorp Reports Third Quarter 2015 Profit

October 15, 2015

Page 25

Summary of Loan and Lease Loss Experience From Continuing Operations

(dollars in millions)


	Three months ended									Nine months ended
	9-30-15			6-30-15			9-30-14			9-30-15			9-30-14
Average loans outstanding	$	59,281		$	57,978		$	55,796		$	58,263		$	55,388

Allowance for loan and lease losses at beginning of period	$	796		$	794		$	814		$	794		$	848
Loans charged off:
Commercial, financial and agricultural		26			21			12			59			35

Real estate — commercial mortgage		—			—			—			2			3
Real estate — construction		—			—			2			1			4

Total commercial real estate loans		—			—			2			3			7
Commercial lease financing		2			1			1			5			6

Total commercial loans		28			22			15			67			48
Real estate — residential mortgage		1			1			2			4			7
Home equity:
Key Community Bank		6			8			9			21			29
Other		1			2			2			4			8

Total home equity loans		7			10			11			25			37
Consumer other — Key Community Bank		6			6			7			18			23
Credit cards		7			8			9			23			27
Consumer other:
Marine		4			5			4			14			18
Other		—			—			1			1			2

Total consumer other		4			5			5			15			20

Total consumer loans		25			30			34			85			114

Total loans charged off		53			52			49			152			162
Recoveries:
Commercial, financial and agricultural		2			6			6			13			27

Real estate — commercial mortgage		—			—			2			2			4
Real estate — construction		—			1			1			1			16

Total commercial real estate loans		—			1			3			3			20
Commercial lease financing		2			1			2			7			8

Total commercial loans		4			8			11			23			55
Real estate — residential mortgage		—			1			—			1			2
Home equity:
Key Community Bank		2			1			3			5			7
Other		2			1			1			4			4

Total home equity loans		4			2			4			9			11
Consumer other — Key Community Bank		1			2			1			5			4
Credit cards		1			1			—			2			1
Consumer other:
Marine		1			2			2			6			7
Other		1			—			—			1			1

Total consumer other		2			2			2			7			8

Total consumer loans		8			8			7			24			26

Total recoveries		12			16			18			47			81

Net loan charge-offs		(41	)		(36	)		(31	)		(105	)		(81	)
Provision (credit) for loan and lease losses		36			37			21			102			37
Foreign currency translation adjustment		(1	)		1			—			(1	)		—

Allowance for loan and lease losses at end of period	$	790		$	796		$	804		$	790		$	804

Liability for credit losses on lending-related commitments at beginning of period	$	45		$	41		$	37		$	35		$	37
Provision (credit) for losses on lending-related commitments		9			4			(2	)		19			(2	)

Liability for credit losses on lending-related commitments at end of period^(a)	$	54		$	45		$	35		$	54		$	35

Total allowance for credit losses at end of period	$	844		$	841		$	839		$	844		$	839

Net loan charge-offs to average total loans		.27	%		.25	%		.22	%		.24	%		.20	%
Allowance for loan and lease losses to period-end loans		1.31			1.37			1.43			1.31			1.43
Allowance for credit losses to period-end loans		1.40			1.44			1.49			1.40			1.49
Allowance for loan and lease losses to nonperforming loans		197.5			190.0			200.5			197.5			200.5
Allowance for credit losses to nonperforming loans		211.0			200.7			209.2			211.0			209.2

Discontinued operations — education lending business:
Loans charged off	$	9		$	6		$	10		$	25		$	34
Recoveries		2			4			3			10			11

Net loan charge-offs	$	(7	)	$	(2	)	$	(7	)	$	(15	)	$	(23	)

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

KeyCorp Reports Third Quarter 2015 Profit

October 15, 2015

Page 26

Summary of Nonperforming Assets and Past Due Loans From Continuing Operations

(dollars in millions)


	9-30-15			6-30-15			3-31-15			12-31-14			9-30-14
Commercial, financial and agricultural	$	89		$	100		$	98		$	59		$	47

Real estate — commercial mortgage		23			26			30			34			41
Real estate — construction		9			12			12			13			14

Total commercial real estate loans		32			38			42			47			55
Commercial lease financing		21			18			20			18			14

Total commercial loans		142			156			160			124			116
Real estate — residential mortgage		67			67			72			79			81
Home equity:
Key Community Bank		174			176			182			185			174
Other		7			8			9			10			10

Total home equity loans		181			184			191			195			184
Consumer other — Key Community Bank		1			1			2			2			2
Credit cards		2			2			2			2			1
Consumer other:
Marine		6			8			9			15			16
Other		1			1			1			1			1

Total consumer other		7			9			10			16			17

Total consumer loans		258			263			277			294			285

Total nonperforming loans^(a)		400			419			437			418			401
Nonperforming loans held for sale		—			—			—			—			—
OREO		17			20			20			18			16
Other nonperforming assets		—			1			—			—			1

Total nonperforming assets	$	417		$	440		$	457		$	436		$	418

Accruing loans past due 90 days or more	$	54		$	66		$	111		$	96		$	71
Accruing loans past due 30 through 89 days		271			181			216			235			340
Restructured loans — accruing and nonaccruing^(b)		287			300			268			270			264
Restructured loans included in nonperforming loans^(b)		160			170			141			157			137
Nonperforming assets from discontinued operations — education lending business		8			6			8			11			9
Nonperforming loans to period-end portfolio loans		.67	%		.72	%		.75	%		.73	%		.71	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		.69			.75			.79			.76			.74

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

October 15, 2015

Page 27

Summary of Changes in Nonperforming Loans From Continuing Operations

(in millions)


	3Q15			2Q15			1Q15			4Q14			3Q14
Balance at beginning of period	$	419		$	437		$	418		$	401		$	396
Loans placed on nonaccrual status		81			92			123			103			109
Charge-offs		(53	)		(52	)		(47	)		(49	)		(49	)
Loans sold		(2	)		—			—			(2	)		—
Payments		(16	)		(25	)		(9	)		(17	)		(13	)
Transfers to OREO		(4	)		(5	)		(7	)		(6	)		(7	)
Loans returned to accrual status		(25	)		(28	)		(41	)		(12	)		(35	)

Balance at end of period^(a)	$	400		$	419		$	437		$	418		$	401

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

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

(in millions)


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

Balance at end of period	$	17		$	20		$	20		$	18		$	16

KeyCorp Reports Third Quarter 2015 Profit

October 15, 2015

Page 28

Line of Business Results

(dollars in millions)


																Percent change 3Q15 vs.
	3Q15			2Q15			1Q15			4Q14			3Q14			2Q15			3Q14
Key Community Bank
Summary of operations
Total revenue (TE)	$	579		$	560		$	549		$	558		$	558			3.4	%		3.8	%
Provision for credit losses		18			3			30			11			21			500.0			(14.3	)
Noninterest expense		448			450			441			449			441			(.4	)		1.6
Net income (loss) attributable to Key		71			67			49			62			60			6.0			18.3
Average loans and leases		31,039			30,707			30,662			30,478			30,103			1.1			3.1
Average deposits		51,234			50,766			50,417			50,851			50,303			.9			1.9
Net loan charge-offs		21			20			28			28			28			5.0			(25.0	)
Net loan charge-offs to average total loans		.27	%		.26	%		.37	%		.36	%		.37	%		N/A			N/A
Nonperforming assets at period end	$	307		$	305		$	328		$	340		$	338			.7			(9.2	)
Return on average allocated equity		10.49	%		10.05	%		7.27	%		9.15	%		8.89	%		N/A			N/A
Average full-time equivalent employees		7,326			7,400			7,452			7,414			7,573			(1.0	)		(3.3	)

Key Corporate Bank
Summary of operations
Total revenue (TE)	$	454		$	477		$	401		$	460		$	400			(4.8	)%		13.5	%
Provision for credit losses		30			41			6			7			2			(26.8	)		N/M
Noninterest expense		246			252			214			244			213			(2.4	)		15.5
Net income (loss) attributable to Key		138			133			129			149			134			3.8			3.0
Average loans and leases		26,425			25,298			24,722			23,798			23,215			4.5			13.8
Average loans held for sale		918			1,234			775			855			481			(25.6	)		90.9
Average deposits		18,809			19,708			18,567			18,355			17,599			(4.6	)		6.9
Net loan charge-offs		20			12			(4	)		(3	)		(1	)		66.7			N/M
Net loan charge-offs to average total loans		.30	%		.19	%		(.07	)%		(.05	)%		(.02	)%		N/A			N/A
Nonperforming assets at period end	$	85		$	105		$	93		$	41		$	20			(19.0	)		325.0
Return on average allocated equity		28.65	%		29.62	%		28.04	%		33.63	%		31.59	%		N/A			N/A
Average full-time equivalent employees		2,173			2,058			2,057			2,043			1,998			5.6			8.8

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

KeyCorp

Third Quarter 2015 Earnings Review

October 15, 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

assumptions,

risks,

and

uncertainties,

many

which

are

outside

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

other

financial

institutions;

(20)

our

ability

attract

and

retain

talented

executives

and

employees

and

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 97 of our Form 10-Q dated June 30, 2015.

Asset quality remains strong

NCOs represented 27 bps of average loans in 3Q15, below targeted range

NPLs remain at a low level: 67 bps of period-end loans

Remaining disciplined with structure and relationship focus

Strong Risk

Management

Strong Risk

Management

Generated positive operating leverage from prior year

Revenue up 7% from 3Q14: higher net interest income and noninterest income

Average loans increased 6%, driven by a 15% increase in CF&A loans

Strong fee-based income from corporate services, investment banking and debt placement

fees, and cards and payments income

Expenses well-managed

3Q15 results include a pension settlement charge and full-quarter impact from the

September 2014 Pacific Crest Securities acquisition

Positive

Operating

Leverage

Positive

Operating

Leverage

Investor Highlights –

3Q15

Repurchased

$123

million

common

3Q15

(a)

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

third consecutive year

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)

9-30-15 ratios are estimated

(e)

Non-GAAP measure: see Appendix for reconciliation

EPS –

assuming dilution

$ .26

$ .27

$ .26

$ .28

$ .23

Cash efficiency

ratio

(e)

66.9

65.1

64.4

69.7

Net interest margin (TE)

2.87

2.88

2.91

2.94

2.96

Return on average total assets

.95

1.03

1.12

.92

Total loans and leases

CF&A

loans

Deposits

(excl. foreign deposits)

Common Equity Tier 1

(d), (e)

10.5

10.7

10.6

Tier 1 common equity

(e)

11.2

11.3

Tier 1 risk-based capital

(d)

10.9

11.1

11.0

11.9

12.0

Tangible

common equity to tangible assets

(e)

9.9

10.3

NCOs to average loans

.27

.25

.20

.22

NPLs to EOP portfolio loans

.67

.72

.75

.73

.71

Allowance for loan losses to EOP loans

1.31

1.37

1.38

1.43

Balance

Sheet

Growth

(a),

(b)

Balance

Sheet

Growth

(a),

(b)

Capital

(c)

Capital

(c)

Asset

Quality

(a)

Asset

Quality

(a)

Financial

Performance

(a)

Metrics

3Q15

2Q15

1Q15

4Q14

3Q14

Loans

$ in billions

Average Commercial, Financial & Agricultural Loans

Total Average Loans

Exit Portfolios

Home Equity & Other

Commercial

$ in billions

Period-end total loans up 7% in 3Q15 from prior

year, driven by CF&A loans up 17%

–

Period-end total loans up in both the

Community Bank and the Corporate Bank

Total commitments continue to grow with

utilization relatively stable

Average Loans

Period-End Loans

CF&A loans

up 15%

Highlights

Total average loans up 6%

Average total loans up 6% in 3Q15 from prior year,

driven by CF&A loans up 15%

–

Average total loans up in both the

Community Bank and the Corporate Bank

Deposits down slightly from 2Q15 reflecting:

–

Decline in short-term noninterest-bearing

deposit balances from commercial clients and

lower certificates of deposit

–

Partially offset by increases in NOW and

MMDA

Interest-bearing liability cost remains relatively

stable at .53%

3Q15 Deposit Mix

Deposit cost continues to improve compared to

prior year

Deposit growth of 3% from 3Q14 related to:

–

Continued growth in commercial mortgage

servicing

–

Inflows from both commercial and consumer

clients

–

Transaction deposit balances up 4% from

3Q14

Average

Deposits

(a)

Average

Deposits

(a)

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

(a)

Excludes deposits in foreign office

Cost of total deposits

(a)

CDs and other time deposits

Savings

Noninterest-bearing

NOW and MMDA

Total average deposits

(a)

Highlights

Deposits

Total average deposits up 3%

vs. Prior Quarter

vs. Prior Year

$ in billions

NII up $7 MM, or 1%, from the prior quarter,

primarily due to improvement in the earning

asset mix, partially offset by lower earning asset

yields and loan fees

TE = Taxable equivalent

Net interest income (TE)

NIM (TE)

NIM Change (bps):

vs. 2Q15

Earning

asset

mix

lower

levels

excess

liquidity

0.03

Lower earning asset yields

(0.02)

Loan fees

(0.02)

Total Change

(0.01)

Maintained moderate asset sensitivity

–

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

vs. Prior Year

Net interest income up $17 MM, or 3%, from the

prior year, reflecting higher earning asset

balances, partially offset by lower earning asset

yields

vs. Prior Quarter

Net Interest Income and Margin

Net Interest Income & Net Interest Margin Trend (TE)

Highlights

$ in millions; continuing operations

Noninterest Income

$ in millions

3Q15

vs. 2Q15

vs. 3Q14

Trust and

investment services income

$ 108

$ (3)

$ 9

Investment banking and debt

placement fees

109

(32)

Service charges on deposit accounts

Operating lease

income and other

leasing gains

(9)

(2)

Corporate services

income

Cards

and payments income

Corporate-owned life insurance

Consumer mortgage income

(1)

Mortgage

servicing fees

Net gains (losses) from principal

investing

Other income

(3)

Total

noninterest income

470

$ (18)

$ 53

Highlights

Noninterest income up 13% from 3Q14, driven by

strength in core businesses:

–

Corporate services income up $15 MM

–

Investment banking and debt placement

fees up $21 MM

–

Cards and payments income up $5 MM

Noninterest income down 4% from 2Q15:

–

Lower investment banking and debt

placement fees, reflecting normal

variability

–

Offset by strong corporate services

income, other income, and increased

service charges on deposit accounts

vs. Prior Quarter

vs. Prior Year

(a)

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

Noninterest

expense

$ in millions

3Q15

vs. 2Q15

vs. 3Q14

Personnel

(a)

$ 426

$ 18

$ 21

Net occupancy

(6)

Computer processing

(1)

Business services, professional fees

(2)

Equipment

(3)

Operating lease expense

(1)

Marketing

FDIC

assessment

(1)

Intangible asset amortization

(1)

OREO

expense, net

Other expense

(1)

Total

noninterest expense

724

$ 13

$ 18

Total noninterest

expense

(excl. pension settlement charge)

705

$ (6)

$ 19

Noninterest Expense

(a)

Includes a pension settlement charge of $19 million in 3Q15 and $20 million in 3Q14

(b)

Non-GAAP measure: see Appendix for reconciliation

Highlights

Cash efficiency ratio, excl. efficiency

and pension settlement charge

Cash efficiency

ratio

(b)

3Q15 noninterest expense up 3% from 3Q14

–

A full-quarter impact of the September 2014

acquisition of Pacific Crest Securities

–

Higher personnel costs related to:

Investments

in senior bankers and client-

facing roles in the Community Bank and

Corporate Bank

Higher performance-based compensation

related to strong capital markets

business

Expense growth of 2% from 2Q15

–

Pension settlement charge of $19 MM in 3Q15

–

Impact from increase in business days

–

Offset by:

Lower occupancy costs

Lower performance-based compensation

related to capital markets business

performance

vs. Prior Year

vs. Prior Quarter

$724

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

Credit Quality

Highlights

Net loan charge-offs remain below targeted range,

at 27 basis points of average loans

Nonperforming loans represented 67 basis points

of period-end loans

Allowance for loan and lease losses represented

1.31% of period-end loans: 198% 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

$418

$417

$ in millions

Disciplined capital management

–

Executing on capital priorities: organic

growth, dividends, share repurchases and

opportunistic growth

2015 Capital Plan includes share repurchases of

up to $725 million in common shares (2Q15

through 2Q16)

–

Repurchased $123 MM of common shares

in 3Q15

–

Year-to-date shareholder payout is

estimated to be among the highest in our

peer group

Tier 1 Common Equity

(a)

Tier 1 Common Equity

(a)

Tangible Common Equity to Tangible Assets

(a)

Tangible Common Equity to Tangible Assets

(a)

Highlights

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)

9-30-15 ratio is estimated

(c)

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

Common Equity

Tier 1

(a), (b), (c)

Common Equity

Tier 1

(a), (b), (c)

Capital

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: 4% -

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

High Quality, Diverse

Revenue Streams

High Quality, Diverse

Revenue Streams

Positive Operating

Leverage

Positive Operating

Leverage

Disciplined Capital

Management

Disciplined Capital

Management

Metrics

(a)

Metrics

(a)

3Q15

2Q15

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

89%

87%

.27%

.25%

66.9%

65.1%

.95%

1.03%

.30%

.28%

2.87%

2.88%

44%

45%

90% -100%

40 -

60 bps

LT: >3.50%

LT: <60%

1.00% -1.25%

>40%

Efficiency Ratio: Driving to 60% and Below

Business plans and macroeconomic environment provide path to an efficiency

ratio below 60%

Cash

Efficiency

Ratio

(a),(b)

Outlook

Cash

Efficiency

Ratio

(a),(b)

Outlook

(a)

Non-GAAP measure: see Appendix for reconciliation

(b)

3Q15 cash efficiency ratio excludes pension settlement charge of $19 million

(c)

Assumes implied forward curve

2-3 year outlook: 60%

Long-term, committed to moving below 60%

(c)

Average Total Investment Securities

Highlights

Average AFS securities

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 (~49% of total portfolio was

GNMA at 9/30/15)

Securities cash flows of $1.1 billion in 3Q15,

unchanged from 2Q15

Average portfolio life at 9/30/15 of 3.8 years,

unchanged from 6/30/15

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

2.15%

$17.0

$19.2

$ in billions

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 49% of total portfolio

•

Reinvesting cash flows into GNMAs

$10.7

$17

$7.1

Size of swap

portfolio

Modeled asset

sensitivity

~3%

$7.1

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:

•

Maintained

moderate

asset

sensitive

position

~3%

(b)

Assumes 200 basis point increase in short and intermediate-

term rates over a 12-month period

•

Utilize swaps for debt hedging and asset liability management

Fairly even pace of A/LM swap maturities

$2.9B A/LM swaps scheduled to mature by year end 2016

9/30/15

Swaps

($ in B)

9/30/15

Notional Amt.

Wtd. Avg.

Maturity (Yrs.)

Receive

Rate

Pay

Rate

A/L

Management

$ 10.7

2.6

1.0%

.2%

Debt

7.1

3.9

2.0

$ 17.8

1.4%

.2%

3Q15 avg.

balances

(c)

$19.2 B

AFS: $14.2 B

HTM: $4.9 B

Balance sheet has relatively short duration and is

impacted by the short-end of the curve

$17.8 B

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

3Q15

Credit 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

Metric

(b)

3Q15

2Q15

1Q15

4Q14

3Q14

Delinquencies to

EOP total loans: 30-89 days

.45

.31

.37

.41

.61

Delinquencies to

EOP total loans: 90+ days

.09

.11

.19

.17

.13

NPLs to EOP portfolio loans

.67

.72

.75

.73

.71

NPAs to EOP portfolio loans + OREO + Other NPAs

.69

.75

.79

.76

.74

Allowance for loan losses to period-end loans

1.31

1.37

1.38

1.43

Allowance for loan losses to NPLs

197.5

190.0

181.7

190.0

200.5

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

(%)

9/30/15

3Q15

9/30/15

Commercial,

financial

and

agricultural

(a)

$ 31,095

$ 30,374

$ 24

.31%

$ 89

$ 438

1.41%

492.13%

Commercial real estate:

Commercial Mortgage

8,180

7,988

139

1.70

604.35

Construction

1,070

1,164

2.34

277.78

Commercial lease financing

3,929

3,946

1.15

214.29

Real

estate –

residential mortgage

2,267

2,258

.18

.84

28.36

Home equity

10,504

10,510

.11

181

.55

32.04

Credit cards

770

759

3.14

4.16

N/M

Consumer other –

Key Community Bank

1,612

1,597

1.24

N/M

Consumer other

–

Exit Portfolio

658

685

1.16

2.13

200.00

Continuing total

(e)

$ 60,085

$ 59,281

$ 41

.27%

$ 400

$ 790

1.31

197.50%

Discontinued operations

1,891

1,920

1.45

1.22

287.50

Consolidated total

$ 61,976

$ 61,201

$ 48

.31%

$ 408

$ 813

1.31

199.26%

Credit Quality by Portfolio

Credit Quality

$ in millions

(a) 9-30-15

ending

loan

balance

includes

$88

million

commercial

credit

card

balances;

9-30-15

average

loan

balance

includes

$88

million

assets

from commercial credit cards

(b)

Net loan charge-off amounts are annualized in calculation

(c)

9-30-15 NPL amount excludes $12 million of purchased credit impaired loans

(d)

9-30-15 allowance by portfolio is estimated

(e)

9-30-15 ending loan balance includes purchased loans of $119 million, of which $12 million were purchased credit impaired

N/M = Not meaningful

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, 9/30/15

>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, 9/30/15

Oilfield Services

Upstream: 62%,

$0.7 B

Midstream: 28%,

$0.3 B

Downstream: 10%,

$0.1 B

Oil & Gas

$1.1 B

Vintage (% of Loans)

Loan

Balances

Average

Loan Size ($)

Average

FICO

Average

LTV

(a)

% of

Loans

LTV>90%

2012 and

later

2011

2010

2009

2008 and

prior

Loans and lines

First lien

$ 6,216

$ 71,075

771

Second lien

4,066

46,473

767

3.4

Community Bank

$ 10,282

58,771

769

1.7

Exit portfolio

222

19,131

728

29.0

100

Total home equity

portfolio

$ 10,504

Nonaccrual loans and lines

First lien

$ 102

$ 63,852

715

3.6

Second lien

47,851

710

3.3

Community Bank

$ 174

56,075

713

3.5

Exit portfolio

22,584

704

23.1

100

Total home equity nonaccruals

$ 181

Third quarter net charge-offs (NCOs)

Community Bank

$ 4

% of average loans

.15

Exit Portfolio

$ (1)

% of average loans

(1.73)

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

unchanged from 68% at the end of the second quarter of 2015

Home Equity Portfolio –

9/30/15

Home Equity Portfolio –

9/30/15

$ 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 769

–

Average LTV at origination: 71%

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

principal and interest payments; $6.3 billion are lines

$1.2 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

Balance Outstanding

Change

Net Loan Charge-offs

Balance on

Nonperforming Status

9-30-15

6-30-15

9-30-15 vs.

6-30-15

3Q15

(b)

2Q15

9-30-15

6-30-15

Residential

properties

–

homebuilder

$ 6

$ 5

$ 8

Marine and RV floor plan

$ (1)

Commercial

lease

financing

(a)

798

831

(33)

$ (1)

Total commercial loans

805

839

(34)

(1)

Home

equity

–

Other

222

236

(14)

(1)

$ 1

Marine

620

673

(53)

RV and other consumer

(3)

(1)

Total consumer loans

886

956

(70)

Total exit loans in loan portfolio

$ 1,691

$ 1,795

(104)

$ -

$ 4

$ 19

$ 26

Discontinued

operations

–

education

lending

business

(not

included

exit

loans

above)

(c)

$ 1,891

$ 1,962

$ (71)

$ 7

$ 2

$ 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 $169 million at September 30, 2015, and $179 million at June 30, 2015.

$ in millions

Exit Loan Portfolio

Three months ended

9-30-15

6-30-15

3-31-15

12-31-14

9-30-14

Tangible common equity to tangible assets at period end

Key shareholders’ equity (GAAP)

10,705

10,590

10,603

10,530

10,486

Less:

Intangible

assets

(a)

1,084

1,085

1,088

1,090

1,105

Preferred

Stock,

Series

(b)

281

282

Tangible common equity (non-GAAP)

9,340

9,224

9,234

9,158

9,099

Total assets (GAAP)

95,422

94,606

94,206

93,821

89,784

Less:

Intangible

assets

(a)

1,084

1,085

1,088

1,090

1,105

Tangible assets (non-GAAP)

94,338

93,521

93,118

92,731

88,679

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

9.90

9.86

9.92

9.88

10.26

Common Equity Tier 1 at period end

Key shareholders’ equity (GAAP)

10,705

10,590

10,603

Less:

Preferred

Stock,

Series

(b)

281

Common Equity Tier 1 capital before adjustments and deductions

10,424

10,309

10,322

Less:

Goodwill, net of deferred taxes

1,037

1,034

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 gains (losses) on cash flow hedges, net of deferred taxes

(20)

(8)

Amounts

accumulated

other

comprehensive

income

(loss)

attributed

to pension and postretirement benefit costs, net of deferred taxes

(386)

(361)

(364)

Total

Common

Equity

Tier

capital

(c)

9,667

9,622

9,569

Net

risk-weighted

assets

(regulatory)

(c)

91,998

89,851

89,967

Common

Equity

Tier

ratio

(non-GAAP)

(c)

10.51

10.71

10.64

Tier 1 common equity at period end

Key shareholders’ equity (GAAP)

10,530

10,486

Qualifying capital securities

339

340

Less:

Goodwill

1,057

1,051

Accumulated

other

comprehensive

income

(loss)

(d)

(395)

(366)

Other

assets

(e)

110

Total Tier 1 capital (regulatory)

10,124

10,031

Less:

Qualifying capital securities

339

340

Preferred

Stock,

Series

(b)

282

Total Tier 1 common equity (non-GAAP)

9,503

9,409

Net risk-weighted assets (regulatory)

85,100

83,547

Tier 1 common equity ratio (non-GAAP)

11.17

11.26

GAAP to Non-GAAP Reconciliation

$ in millions

Three

months

ended

9/30/15,

6/30/15,

3/31/15,

12/31/14,

and

9/30/14,

exclude

$50

million,

$55

million,

$61

million,

$68

million,

and

$72

million,

respectively,

of period-end

purchased credit card receivables

Net of capital surplus

9-30-15 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 no disallowed deferred tax assets at December 31, 2014 and September 30, 2014.

Three months ended

9-30-15

6-30-15

3-31-15

12-31-14

9-30-14

Pre-provision net revenue

Net interest income (GAAP)

591

584

571

582

575

Plus:

Taxable-equivalent adjustment

Noninterest income (GAAP)

470

488

437

490

417

Less:

Noninterest expense (GAAP)

724

711

669

704

706

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

344

368

345

374

292

Average tangible common equity

Average Key shareholders’ equity (GAAP)

10,614

10,590

10,570

10,562

10,473

Less:

Intangible assets (average)

(a)

1,083

1,086

1,089

1,096

1,037

Preferred Stock, Series A (average)

290

291

Average tangible common equity (non-GAAP)

9,241

9,214

9,191

9,175

9,145

Return on average tangible common equity from continuing operations

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

shareholders (GAAP)

216

230

222

246

197

Average tangible common equity (non-GAAP)

9,241

9,214

9,191

9,175

9,145

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

9.27

10.01

9.80

10.64

8.55

Return on average tangible common equity consolidated

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

213

233

227

248

180

Average tangible common equity (non-GAAP)

9,241

9,214

9,191

9,175

9,145

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

9.14

10.14

10.02

10.72

7.81

Cash efficiency ratio

Noninterest expense (GAAP)

724

711

669

704

706

Less:

Intangible asset amortization (GAAP)

Adjusted noninterest expense (non-GAAP)

715

702

660

694

696

Net interest income (GAAP)

591

584

571

582

575

Plus:

Taxable-equivalent adjustment

Noninterest income (GAAP)

470

488

437

490

417

Total taxable-equivalent revenue (non-GAAP)

1,068

1,079

1,014

1,078

998

Cash efficiency ratio (non-GAAP)

66.9

65.1

64.4

69.7

GAAP to Non-GAAP Reconciliation

(continued)

$ in millions

(a)

Three months ended 9/30/15, 6/30/15, 3/31/15, 12/31/14, and 9/30/14 exclude $52 million, $58 million, $64 million, $69 million, and $76 million, respectively, of

average purchased credit card receivable intangible assets

KeyCorp & Subsidiaries

$ in billions

Quarter ended

September

30, 2015

Common Equity Tier 1 under current RCR

$ 9.7

Adjustments from

current RCR to the fully phased-in RCR:

Deferred

tax assets and other intangible assets

(b)

Common Equity Tier 1 anticipated under the fully phased-in RCR

(c)

$ 9.6

Net risk-weighted assets under current RCR

$ 92.0

Adjustments from

current RCR to the fully phased-in RCR:

Mortgage

servicing assets

(d)

All other assets

(e)

Total risk-weighted assets anticipated under the fully phased-in RCR

(c)

$ 92.5

Common Equity Tier 1 under the fully phased-in RCR

10.4

(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

future

taxable

income

for

realization,

primarily

tax

credit

carryforwards,

well

intangible

assets

(other

than

goodwill

and mortgage servicing assets) subject to the transition provisions of the final rule.

(c)

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”

(d)

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

(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

(RCR) (estimated)

(a)

Exhibit 99.3

Consolidated Balance Sheets

(dollars in millions)


	9-30-15			6-30-15			9-30-14
Assets
Loans	$	60,085		$	58,264		$	56,155
Loans held for sale		916			835			784
Securities available for sale		14,376			14,244			12,245
Held-to-maturity securities		4,936			5,022			4,997
Trading account assets		811			674			965
Short-term investments		1,964			3,222			2,342
Other investments		691			703			822

Total earning assets		83,779			82,964			78,310
Allowance for loan and lease losses		(790	)		(796	)		(804	)
Cash and due from banks		470			693			651
Premises and equipment		771			788			832
Operating lease assets		315			296			304
Goodwill		1,060			1,057			1,051
Other intangible assets		74			83			126
Corporate-owned life insurance		3,516			3,502			3,456
Derivative assets		793			536			413
Accrued income and other assets		3,348			3,314			3,024
Discontinued assets		2,086			2,169			2,421

Total assets	$	95,422		$	94,606		$	89,784

Liabilities
Deposits in domestic offices:
NOW and money market deposit accounts	$	37,301		$	36,024		$	33,941
Savings deposits		2,338			2,370			2,390
Certificates of deposit ($100,000 or more)		2,001			2,032			2,533
Other time deposits		3,020			3,105			3,338

Total interest-bearing deposits		44,660			43,531			42,202
Noninterest-bearing deposits		25,985			26,640			25,697
Deposits in foreign office — interest-bearing		428			498			557

Total deposits		71,073			70,669			68,456
Federal funds purchased and securities sold under repurchase agreements		407			444			657
Bank notes and other short-term borrowings		677			528			996
Derivative liabilities		676			560			384
Accrued expense and other liabilities		1,562			1,537			1,613
Long-term debt		10,310			10,267			7,172
Discontinued liabilities		—			—			3

Total liabilities		84,705			84,005			79,281

Equity
Preferred stock, Series A		290			290			291
Common shares		1,017			1,017			1,017
Capital surplus		3,914			3,898			3,984
Retained earnings		8,764			8,614			8,082
Treasury stock, at cost		(3,008	)		(2,884	)		(2,563	)
Accumulated other comprehensive income (loss)		(272	)		(345	)		(325	)

Key shareholders’ equity		10,705			10,590			10,486
Noncontrolling interests		12			11			17

Total equity		10,717			10,601			10,503

Total liabilities and equity	$	95,422		$	94,606		$	89,784

Common shares outstanding (000)		835,285			843,608			868,477

Consolidated Statements of Income

(dollars in millions, except per share amounts)


	Three months ended								Nine months ended
	9-30-15			6-30-15		9-30-14			9-30-15		9-30-14
Interest income
Loans	$	542		$	532	$	531		$	1,597	$	1,576
Loans held for sale		10			12		4			29		13
Securities available for sale		75			72		67			217		210
Held-to-maturity securities		24			24		25			72		70
Trading account assets		5			5		6			15		19
Short-term investments		1			2		2			5		4
Other investments		4			5		4			14		16

Total interest income		661			652		639			1,949		1,908

Interest expense
Deposits		27			26		28			79		91
Federal funds purchased and securities sold under repurchase agreements		—			—		1			—		2
Bank notes and other short-term borrowings		2			2		2			6		6
Long-term debt		41			40		33			118		98

Total interest expense		70			68		64			203		197

Net interest income		591			584		575			1,746		1,711
Provision for credit losses		45			41		19			121		35

Net interest income after provision for credit losses		546			543		556			1,625		1,676

Noninterest income
Trust and investment services income		108			111		99			328		291
Investment banking and debt placement fees		109			141		88			318		271
Service charges on deposit accounts		68			63		68			192		197
Operating lease income and other leasing gains		15			24		17			58		81
Corporate services income		57			43		42			143		125
Cards and payments income		47			47		42			136		123
Corporate-owned life insurance income		30			30		26			91		80
Consumer mortgage income		3			4		3			10		7
Mortgage servicing fees		11			9		9			33		35
Net gains (losses) from principal investing		11			11		9			51		60
Other income ^(a)		11			5		14			35		37

Total noninterest income		470			488		417			1,395		1,307

Noninterest expense
Personnel		426			408		405			1,223		1,182
Net occupancy		60			66		66			191		198
Computer processing		41			42		39			121		118
Business services and professional fees		40			42		36			115		118
Equipment		22			22		25			66		73
Operating lease expense		11			12		11			34		31
Marketing		17			15		15			40		33
FDIC assessment		8			8		9			24		21
Intangible asset amortization		9			9		10			27		29
OREO expense, net		2			1		1			5		3
Other expense		88			86		89			258		251

Total noninterest expense		724			711		706			2,104		2,057

Income (loss) from continuing operations before income taxes		292			320		267			916		926
Income taxes		72			84		64			230		232

Income (loss) from continuing operations		220			236		203			686		694
Income (loss) from discontinued operations, net of taxes		(3	)		3		(17	)		5		(41	)

Net income (loss)		217			239		186			691		653
Less: Net income (loss) attributable to noncontrolling interests		(2	)		1		—			1		6

Net income (loss) attributable to Key	$	219		$	238	$	186		$	690	$	647

Income (loss) from continuing operations attributable to Key common shareholders	$	216		$	230	$	197		$	668	$	671
Net income (loss) attributable to Key common shareholders		213			233		180			673		630

Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	.26		$	.27	$	.23		$	.79	$	.77
Income (loss) from discontinued operations, net of taxes		—			—		(.02	)		.01		(.05	)
Net income (loss) attributable to Key common shareholders ^(b)		.26			.28		.21			.80		.72

Per common share — assuming dilution
Income (loss) from continuing operations attributable to Key common shareholders	$	.26		$	.27	$	.23		$	.78	$	.76
Income (loss) from discontinued operations, net of taxes		—			—		(.02	)		.01		(.05	)
Net income (loss) attributable to Key common shareholders ^(b)		.25			.27		.21			.79		.71

Cash dividends declared per common share	$	.075		$	.075	$	.065		$	.215	$	.185

Weighted-average common shares outstanding (000)		831,430			839,454		867,350			839,758		875,728
Weighted-average common shares and potential common shares outstanding (000) ^(c)		838,880			846,312		874,122			847,371		882,451

(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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