Close

Form 8-K KEYCORP /NEW/ For: Jan 20

FREE Breaking News Alerts from StreetInsider.com!

E-mail Address

StreetInsider.com Top Tickers, 4/16/2024

1. SPY
2. TSLA
3. JNJ
4. AMD
5. GS
6. BAC
7. MS
8. BK
9. UNH
10. ITCI


January 20, 2022 6:37 AM EST


keylogoicononlyrgba01.jpg

KEYCORP REPORTS FOURTH QUARTER 2021 NET INCOME OF $601 MILLION,
OR $.64 PER DILUTED COMMON SHARE
Record revenue for the fourth quarter and full year
Record pre-provision net revenue for the fourth quarter and full year

Positive operating leverage for the fourth quarter and full year
Strong credit quality: net charge-offs to average loans of 8 basis points
Significant capital return: 75% of net income returned to shareholders in 2021

    CLEVELAND, January 20, 2022 - KeyCorp (NYSE: KEY) today announced net income from continuing operations attributable to Key common shareholders of $601 million, or $.64 per diluted common share for the fourth quarter of 2021. This compared to $616 million, or $.65 per diluted common share, for the third quarter of 2021 and $549 million, or $.56 per diluted common share, for the fourth quarter of 2020.


cgquote114202211am.jpg


KeyCorp Reports Fourth Quarter 2021 Profit     
January 20, 2022
Page 2

Selected Financial Highlights
Dollars in millions, except per share dataChange 4Q21 vs.
4Q213Q214Q203Q214Q20
Income (loss) from continuing operations attributable to Key common shareholders$601 $616 $549 (2.4)%9.5 %
Income (loss) from continuing operations attributable to Key common shareholders per common share — assuming dilution
.64 .65 .56 (1.5)14.3 
Return on average tangible common equity from continuing operations (a)
18.69 %18.55 %16.61 %N/AN/A
Return on average total assets from continuing operations1.34 1.41 1.35 N/AN/A
Common Equity Tier 1 ratio (b)
9.4 9.6 9.7 N/AN/A
Book value at period end$16.76 $16.82 $16.53 (.4)1.4 
Net interest margin (TE) from continuing operations2.44 %2.47 %2.70 %N/AN/A
(a)The table entitled “GAAP to Non-GAAP Reconciliations” in the attached financial supplement presents the computations of certain financial measures related to “Return on average tangible common equity from continuing operations.” The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.
(b)December 31, 2021 ratio is estimated.
TE = Taxable Equivalent, N/A = Not Applicable

INCOME STATEMENT HIGHLIGHTS
Revenue
Dollars in millionsChange 4Q21 vs.
 4Q213Q214Q203Q214Q20
Net interest income (TE)$1,038 $1,025 $1,043 1.3 %(.5)%
Noninterest income909 797 802 14.1 13.3 
Total revenue$1,947 $1,822 $1,845 6.9 %5.5 %
TE = Taxable Equivalent
Taxable-equivalent net interest income was $1.0 billion for the fourth quarter of 2021 and the net interest margin was 2.44%. Compared to the fourth quarter of 2020, net interest income decreased $5 million, while the net interest margin decreased by 26 basis points. Both net interest income and the net interest margin reflect the impact of lower reinvestment yields and the exit of the indirect auto loan portfolio, largely offset by a favorable earning asset mix. The net interest margin was also impacted by elevated levels of liquidity as we continued to experience higher levels of deposit inflows in 2021.

Compared to the third quarter of 2021, taxable-equivalent net interest income increased by $13 million and the net interest margin decreased by 3 basis points. The increase in net interest income was driven by balance sheet growth and a favorable mix of earning assets, as well as higher loan fees from the PPP forgiveness and core portfolio growth. Additionally, both net interest income and the net interest margin were impacted by lower reinvestment yields and the exit of the indirect auto loan portfolio.


Noninterest Income
Dollars in millionsChange 4Q21 vs.
4Q213Q214Q203Q214Q20
Trust and investment services income$135 $129 $123 4.7 %9.8 %
Investment banking and debt placement fees323 235 243 37.4 32.9 
Service charges on deposit accounts90 91 82 (1.1)9.8 
Operating lease income and other leasing gains37 37 39 — (5.1)
Corporate services income73 69 63 5.8 15.9 
Cards and payments income86 111 97 (22.5)(11.3)
Corporate-owned life insurance income34 33 38 3.0 (10.5)
Consumer mortgage income25 33 43 (24.2)(41.9)
Commercial mortgage servicing fees48 34 32 41.2 50.0 
Other income58 25 42 132.0 38.1 
Total noninterest income$909 $797 $802 14.1 %13.3 %



KeyCorp Reports Fourth Quarter 2021 Profit     
January 20, 2022
Page 3

    
    Compared to the fourth quarter of 2020, noninterest income increased by $107 million. The increase was primarily driven by investment banking and debt placement fees, up $80 million. Additionally, commercial mortgage servicing fees and other income both increased $16 million. Partially offsetting the increase was a $18 million decrease in consumer mortgage income, driven by higher balance sheet retention and lower gain on sale margins.

Compared to the third quarter of 2021, noninterest income increased by $112 million. The primary driver was investment banking and debt placement fees, which increased $88 million. Additionally, commercial mortgage servicing fees increased $14 million and other income increased $33 million, reflecting market related gains. Partially offsetting the increase was a $25 million decrease in cards and payments income, driven by lower prepaid card revenue.

Noninterest Expense
Dollars in millionsChange 4Q21 vs.
4Q213Q214Q203Q214Q20
Personnel expense$674 $640 $661 5.3 %2.0 %
Nonpersonnel expense496 472 467 5.1 6.2 
Total noninterest expense$1,170 $1,112 $1,128 5.2 %3.7 %
    Key’s noninterest expense was $1.2 billion for the fourth quarter of 2021, an increase of $42 million from the year-ago period. The increase in nonpersonnel expense was primarily driven by higher business services and professional fees and computer processing fees. The increase in personnel expense reflects higher incentive and stock-based compensation from strong fee production, partially offset by lower severance.

    Compared to the third quarter of 2021, noninterest expense increased $58 million. The increase was largely related to personnel expense, reflecting higher incentive and stock-based compensation. The increase in nonpersonnel expense was driven by higher business services and professional fees.

BALANCE SHEET HIGHLIGHTS
Average Loans
Dollars in millionsChange 4Q21 vs.
4Q213Q214Q203Q214Q20
Commercial and industrial (a)
$49,510 $49,868 $53,562 (.7)%(7.6)%
Other commercial loans19,743 19,362 19,174 2.0 3.0 
Total consumer loans30,144 30,908 28,974 (2.5)4.0 
Total loans$99,397 $100,138 $101,710 (.7)%(2.3)%
(a)Commercial and industrial average loan balances include $141 million, $137 million, and $129 million of assets from commercial credit cards at December 31, 2021, September 30, 2021, and December 31, 2020, respectively.
    
Average loans were $99.4 billion for the fourth quarter of 2021, a decrease of $2.3 billion compared to the fourth quarter of 2020. Commercial loans decreased by $3.5 billion, reflecting a decline in PPP balances. Total PPP loan forgiveness was $8.0 billion for 2021. Partly offsetting the decrease was core growth in commercial and industrial and commercial real estate loans. Consumer loans increased $1.2 billion, reflecting strength from Key's consumer mortgage business and Laurel Road, partly offset by the sale of the indirect auto loan portfolio.

Compared to the third quarter of 2021, average loans decreased by $741 million. Commercial loans were relatively unchanged from the prior quarter as declines in PPP balances were largely offset by core growth in commercial and industrial and commercial real estate loans. Consumer loans decreased $764 million, reflecting the sale of the indirect auto loan portfolio, which reduced average loans by $2.7 billion. In addition, we continued to experience strength from Key's consumer mortgage business and Laurel Road.



KeyCorp Reports Fourth Quarter 2021 Profit     
January 20, 2022
Page 4

Average Deposits
Dollars in millionsChange 4Q21 vs.
4Q213Q214Q203Q214Q20
Non-time deposits$146,979 $142,537 $129,529 3.1 %13.5 %
Certificates of deposit ($100,000 or more)1,793 1,975 2,983 (9.2)(39.9)
Other time deposits2,233 2,404 3,209 (7.1)(30.4)
Total deposits$151,005 $146,916 $135,721 2.8 %11.3 %
Cost of total deposits.04 %.04 %.08 %N/AN/A
N/A = Not Applicable

    Average deposits totaled $151.0 billion for the fourth quarter of 2021, an increase of $15.3 billion compared to the year-ago quarter. The increase reflects growth from consumer and commercial relationships, including higher commercial escrow and retail deposits, partially offset by a decline in time deposits.

Compared to the third quarter of 2021, average deposits increased by $4.1 billion, primarily driven by higher commercial escrow balances and retail deposits.

ASSET QUALITY
Dollars in millionsChange 4Q21 vs.
4Q213Q214Q203Q214Q20
Net loan charge-offs$19 $29 $135 (34.5)%(85.9)%
Net loan charge-offs to average total loans.08 %.11 %.53 %N/AN/A
Nonperforming loans at period end$454 $554 $785 (18.1)(42.2)
Nonperforming assets at period end489 599 937 (18.4)(47.8)
Allowance for loan and lease losses1,061 1,084 1,626 (2.1)(34.7)
Allowance for credit losses1,221 1,236 1,823 (1.2)(33.0)
Provision for credit losses4 (107)20 (103.7)(80.0)
Allowance for loan and lease losses to nonperforming loans233.7 %195.7 %207.1 %N/AN/A
Allowance for credit losses to nonperforming loans268.9 223.1 232.2 N/AN/A
N/A = Not Applicable

    
    Key's provision for credit losses was $4 million, compared to $20 million in the fourth quarter of 2020 and a net benefit of $107 million in the third quarter of 2021.

    Net loan charge-offs for the fourth quarter of 2021 totaled $19 million, or .08% of average total loans. These results compare to $135 million, or .53%, for the fourth quarter of 2020 and $29 million, or .11%, for the third quarter of 2021. Key’s allowance for credit losses was $1.2 billion, or 1.20% of total period-end loans at December 31, 2021, compared to 1.80% at December 31, 2020, and 1.25% at September 30, 2021.

    At December 31, 2021, Key’s nonperforming loans totaled $454 million, which represented .45% of period-end portfolio loans. These results compare to .78% at December 31, 2020, and .56% at September 30, 2021. Nonperforming assets at December 31, 2021, totaled $489 million, and represented .48% of period-end portfolio loans and OREO and other nonperforming assets. These results compare to .92% at December 31, 2020, and .61% at September 30, 2021.

CAPITAL

Key’s estimated risk-based capital ratios included in the following table continued to exceed all “well-capitalized” regulatory benchmarks at December 31, 2021.


KeyCorp Reports Fourth Quarter 2021 Profit     
January 20, 2022
Page 5

Capital Ratios
12/31/20219/30/202112/31/2020
Common Equity Tier 1 (a)
9.4 %9.6 %9.7 %
Tier 1 risk-based capital (a)
10.7 10.9 11.1 
Total risk based capital (a)
12.4 12.7 13.4 
Tangible common equity to tangible assets (b)
6.9 7.0 7.9 
Leverage (a)
8.4 8.4 8.9 
(a)December 31, 2021 ratio is estimated and reflects Key's election to adopt the CECL optional transition provision.
(b)The table entitled “GAAP to Non-GAAP Reconciliations” in the attached financial supplement presents the computations of certain financial measures related to “tangible common equity.” The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.

Key's capital position remained strong in the fourth quarter of 2021. As shown in the preceding table, at December 31, 2021, Key’s estimated Common Equity Tier 1 and Tier 1 risk-based capital ratios stood at 9.4% and 10.7%, respectively. Key's tangible common equity ratio was 6.9% at December 31, 2021.

    Key has elected the CECL phase-in option provided by regulatory guidance which delays for two years the estimated impact of CECL on regulatory capital and phases it in over three years beginning in 2022. On a fully phased-in basis, Key's Common Equity Tier 1 ratio would be reduced by 17 basis points.

Summary of Changes in Common Shares Outstanding
In thousandsChange 4Q21 vs.
4Q213Q214Q203Q214Q20
Shares outstanding at beginning of period930,544 960,276 976,205 (3.1)%(4.7)%
Open market repurchases, repurchases under the accelerated repurchase program, and return of shares under employee compensation plans(2,482)(29,923)(1,092)(91.7)127.3 
Shares issued under employee compensation plans (net of cancellations)788 191 660 312.6 19.4 
Shares outstanding at end of period928,850 930,544 975,773 (.2)%(4.8)%
N/M = Not Meaningful
    
    During the fourth quarter of 2021, Key declared a dividend of $.195 per common share, representing a 5% increase from the prior quarter. The reduction in share count was driven by the final settlement of 2.5 million shares related to the accelerated share repurchase program disclosed in the third quarter of 2021. There were no additional open market share repurchases in the fourth quarter.

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 Fourth Quarter 2021 Profit     
January 20, 2022
Page 6

Major Business Segments
Dollars in millionsChange 4Q21 vs.
4Q213Q214Q203Q214Q20
Revenue from continuing operations (TE)
Consumer Bank$839 $870 $896 (3.6)%(6.4)%
Commercial Bank1,028 886 922 16.0 11.5 
Other (a)
80 66 27 21.2 196.3 
Total$1,947 $1,822 $1,845 6.9 %5.5 %
Income (loss) from continuing operations attributable to Key
Consumer Bank$161 $241 $225 (33.2)%(28.4)%
Commercial Bank449 381 310 17.8 44.8 
Other (a)
17 21 40 (19.0)(57.5)
Total$627 $643 $575 (2.5)%9.0 %
(a)Other includes other segments that consists of corporate treasury, our principal investing unit, and various exit portfolios as well as reconciling items which primarily represents the unallocated portion of nonearning assets of corporate support functions. Charges related to the funding of these assets are part of net interest income and are allocated to the business segments through noninterest expense. Reconciling items also includes intercompany eliminations and certain items that are not allocated to the business segments because they do not reflect their normal operations.
TE = Taxable Equivalent, N/M = Not Meaningful


Consumer Bank
Dollars in millionsChange 4Q21 vs.
4Q213Q214Q203Q214Q20
Summary of operations
Net interest income (TE)$569 $582 $638 (2.2)%(10.8)%
Noninterest income270 288 258 (6.3)4.7 
Total revenue (TE)839 870 896 (3.6)(6.4)
Provision for credit losses13 (38)(5)134.2 (360.0)
Noninterest expense614 591 606 3.9 1.3 
Income (loss) before income taxes (TE)212 317 295 (33.1)(28.1)
Allocated income taxes (benefit) and TE adjustments51 76 70 (32.9)(27.1)
Net income (loss) attributable to Key$161 $241 $225 (33.2)%(28.4)%
Average balances
Loans and leases$37,792 $39,796 $39,448 (5.0)%(4.2)%
Total assets41,024 42,981 42,666 (4.6)(3.8)
Deposits90,271 89,156 82,845 1.3 9.0 
Assets under management at period end$55,806 $52,867 $47,086 5.6 %18.5 %
TE = Taxable Equivalent




KeyCorp Reports Fourth Quarter 2021 Profit     
January 20, 2022
Page 7

Additional Consumer Bank Data
Dollars in millionsChange 4Q21 vs.
4Q213Q214Q203Q214Q20
Noninterest income
Trust and investment services income$106 $105 $95 1.0 %11.6 %
Service charges on deposit accounts55 56 49 (1.8)12.2 
Cards and payments income64 62 54 3.2 18.5 
Consumer mortgage income25 33 43 (24.2)(41.9)
Other noninterest income20 32 17 (37.5)17.6 
Total noninterest income$270 $288 $258 (6.3)%4.7 %
Average deposit balances
NOW and money market deposit accounts$57,197 $56,353 $53,045 1.5 %7.8 %
Savings deposits6,951 6,749 5,407 3.0 28.6 
Certificates of deposit ($100,000 or more)1,669 1,846 2,801 (9.6)(40.4)
Other time deposits2,227 2,398 3,186 (7.1)(30.1)
Noninterest-bearing deposits22,227 21,810 18,406 1.9 20.8 
Total deposits$90,271 $89,156 $82,845 1.3 %9.0 %
Other data
Branches999 1,000 1,073 
Automated teller machines1,317 1,316 1,386 


Consumer Bank Summary of Operations (4Q21 vs. 4Q20)

•Net income attributable to Key of $161 million for the fourth quarter of 2021, compared to $225 million for the year-ago quarter
•Taxable-equivalent net interest income decreased by $69 million, compared to the fourth quarter of 2020, related to the sale of the indirect auto portfolio, partially offset by strong consumer mortgage balance sheet growth and fees related to PPP loans
•Average loans and leases decreased $1.7 billion, or 4.2%, from the fourth quarter of 2020, driven by the sale of the indirect auto loan portfolio, partially offset by growth in residential mortgage and Laurel Road
•Average deposits increased $7.4 billion, or 9.0%, from the fourth quarter of 2020, driven by consumer retention of stimulus payments and relationship growth
•Provision for credit losses increased $18 million, compared to the fourth quarter of 2020, driven by expectations of a more stable economic outlook and portfolio growth
•Noninterest income increased $12 million, or 4.7%, from the year ago quarter, driven by higher cards and payments income and trust and investment services income. Partially offsetting the increase was consumer mortgage income, reflecting higher balance sheet retention and lower gain on sale margins
•Noninterest expense increased $8 million, or 1.3%, from the year ago quarter, driven by higher production-related incentives and increased marketing expense related to Laurel Road



KeyCorp Reports Fourth Quarter 2021 Profit     
January 20, 2022
Page 8

Commercial Bank
Dollars in millionsChange 4Q21 vs.
4Q213Q214Q203Q214Q20
Summary of operations
Net interest income (TE)$417 $410 $420 1.7 %(.7)%
Noninterest income611 476 502 28.4 21.7 
Total revenue (TE)1,028 886 922 16.0 11.5 
Provision for credit losses(12)(69)44 (82.6)(127.3)
Noninterest expense501 470 499 6.6 .4 
Income (loss) before income taxes (TE)539 485 379 11.1 42.2 
Allocated income taxes and TE adjustments90 104 69 (13.5)30.4
Net income (loss) attributable to Key$449 $381 $310 17.8 %44.8 %
Average balances
Loans and leases$61,127 $59,914 $62,016 2.0 %(1.4)%
Loans held for sale1,962 1,190 1,285 64.9 52.7 
Total assets71,629 69,285 71,303 3.4 0.5 
Deposits59,537 56,522 52,489 5.3 %13.4 %
TE = Taxable Equivalent, N/M = Not Meaningful

Additional Commercial Bank Data
Dollars in millionsChange 4Q21 vs.
4Q213Q214Q203Q214Q20
Noninterest income
Trust and investment services income$29 $24 $28 20.8 %3.6 %
Investment banking and debt placement fees323 234 243 38.0 32.9 
Operating lease income and other leasing gains36 37 39 (2.7)(7.7)
Corporate services income65 63 55 3.2 18.2 
Service charges on deposit accounts34 34 32 — 6.3 
Cards and payments income26 44 44 (40.9)(40.9)
Payments and services income125 141 131 (11.3)(4.6)
Commercial mortgage servicing fees47 34 32 38.2 46.9 
Other noninterest income51 6 29 750.0 75.9
Total noninterest income$611 $476 $502 28.4 %21.7 %
N/M = Not Meaningful

Commercial Bank Summary of Operations (4Q21 vs. 4Q20)

•Net income attributable to Key of $449 million for the fourth quarter of 2021, compared to $310 million for the year-ago quarter
•Taxable-equivalent net interest income decreased by $3 million, compared to the fourth quarter of 2020, as lower average loan balances offset fees related to PPP loans
•Average loan and lease balances decreased $889 million, compared to the fourth quarter of 2020, reflecting a decline in PPP balances, partly offset by core growth in commercial and industrial and commercial real estate loans
•Average deposit balances increased $7.0 billion, or 13.4%, compared to the fourth quarter of 2020, driven by growth in targeted relationships and higher commercial escrow deposits
•Provision for credit losses decreased $56 million, compared to the fourth quarter of 2020. The provision for credit losses was a net benefit, driven by lower net loan charge-offs and improved asset quality
•Noninterest income increased $109 million from the year-ago quarter, driven by elevated investment banking client activity and corporate services income, partially offset by lower cards and payments income
•Noninterest expense increased by $2 million, or 0.4%, from the fourth quarter of 2020, driven by higher production-related incentives related to strong investment banking and debt placement fees


KeyCorp Reports Fourth Quarter 2021 Profit     
January 20, 2022
Page 9


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

KeyCorp's roots trace back nearly 200 years to Albany, New York. Headquartered in Cleveland, Ohio, Key is one of the nation’s largest bank-based financial services companies, with assets of approximately $186.3 billion at December 31, 2021.

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


KeyCorp Reports Fourth Quarter 2021 Profit     
January 20, 2022
Page 10

CONTACTS:
ANALYSTSMEDIA
Vernon L. PattersonSusan Donlan
216.689.0520216.471.3133
Vernon_Patterson@KeyBank.comSusan_E_Donlan@KeyBank.com
Melanie S. KaiserTracy Pesho
216.689.4545216.471.2825
Melanie_S_Kaiser@KeyBank.comTracy_Pesho@KeyBank.com
Halle A. NicholsTwitter: @keybank
216.471.2184
Halle_A_Nichols@KeyBank.com
INVESTOR RELATIONS:KEY MEDIA NEWSROOM:
www.key.com/irwww.key.com/newsroom
This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements do not relate strictly to historical or current facts. Forward-looking statements usually can be identified by the use of words such as “goal,” “objective,” “plan,” “expect,” “assume,” “anticipate,” “intend,” “project,” “believe,” “estimate,” or other words of similar meaning. Forward-looking statements provide our current expectations or forecasts of future events, circumstances, results, or aspirations. Forward-looking statements, by their nature, are subject to assumptions, risks and uncertainties, many of which are outside of our control. Our actual results may differ materially from those set forth in our forward-looking statements. There is no assurance that any list of risks and uncertainties or risk factors is complete. Factors that could cause Key’s actual results to differ from those described in the forward-looking statements can be found in KeyCorp’s Form 10-K for the year ended December 31, 2020, as well as in KeyCorp’s subsequent SEC filings, all of which have been or will be filed with the Securities and Exchange Commission (the “SEC”) and are or will be available on Key’s website (www.key.com/ir) and on the SEC’s website (www.sec.gov). These factors may include, among others, deterioration of commercial real estate market fundamentals, adverse changes in credit quality trends, declining asset prices, a worsening of the U.S. economy due to financial, political, or other shocks, the extensive regulation of the U.S. financial services industry, and the impact of the COVID-19 global pandemic on us, our clients, our third-party service providers, and the markets. Any forward-looking statements made by us or on our behalf speak only as of the date they are made and we do not undertake any obligation to update any forward-looking statement to reflect the impact of subsequent events or circumstances.

Notes to Editors:
A live Internet broadcast of KeyCorp’s conference call to discuss quarterly results and currently anticipated earnings trends and to answer analysts’ questions can be accessed through the Investor Relations section at https://www.key.com/ir at 8:00 a.m. ET, on January 20, 2022. A replay of the call will be available through January 29, 2022.
For up-to-date company information, media contacts, and facts and figures about Key’s lines of business, visit our Media Newsroom at https://www.key.com/newsroom.

*****



KeyCorp Reports Fourth Quarter 2021 Profit     
January 20, 2022
Page 11




KeyCorp
Fourth Quarter 2021
Financial Supplement


    
Page
Financial Highlights
GAAP to Non-GAAP Reconciliation
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations
Noninterest Expense
Personnel Expense
Loan Composition
Loans Held for Sale Composition
Summary of Changes in Loans Held for Sale
Summary of Loan and Lease Loss Experience From Continuing Operations
Asset Quality Statistics From Continuing Operations
Summary of Nonperforming Assets and Past Due Loans From Continuing Operations
Summary of Changes in Nonperforming Loans From Continuing Operations
Line of Business Results


KeyCorp Reports Fourth Quarter 2021 Profit     
January 20, 2022
Page 12

Financial Highlights
(Dollars in millions, except per share amounts)
Three months ended
12/31/20219/30/202112/31/2020
Summary of operations
Net interest income (TE)$1,038 $1,025 $1,043 
Noninterest income909 797 802 
Total revenue (TE)
1,947 1,822 1,845 
Provision for credit losses4 (107)20 
Noninterest expense1,170 1,112 1,128 
Income (loss) from continuing operations attributable to Key627 643 575 
Income (loss) from discontinued operations, net of taxes2 2 7 
Net income (loss) attributable to Key629 645 582 
Income (loss) from continuing operations attributable to Key common shareholders601 616 549 
Income (loss) from discontinued operations, net of taxes2 2 7 
Net income (loss) attributable to Key common shareholders603 618 556 
Per common share
Income (loss) from continuing operations attributable to Key common shareholders$.65 $.65 $.57 
Income (loss) from discontinued operations, net of taxes— — .01 
Net income (loss) attributable to Key common shareholders (a)
.65 .66 .57 
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution.64 .65 .56 
Income (loss) from discontinued operations, net of taxes — assuming dilution— — .01 
Net income (loss) attributable to Key common shareholders — assuming dilution (a)
.64 .65 .57 
Cash dividends declared.195 .185 .185 
Book value at period end16.76 16.82 16.53 
Tangible book value at period end13.72 13.80 13.61 
Market price at period end23.13 21.62 16.41 
Performance ratios
From continuing operations:
Return on average total assets1.34 %1.41 %1.35 %
Return on average common equity15.31 15.28 13.65 
Return on average tangible common equity (b)
18.69 18.55 16.61 
Net interest margin (TE)2.44 2.47 2.70 
Cash efficiency ratio (b)
59.4 60.2 60.3 
From consolidated operations:
Return on average total assets1.35 %1.41 %1.36 %
Return on average common equity15.36 15.33 13.82 
Return on average tangible common equity (b)
18.75 18.61 16.82 
Net interest margin (TE)2.44 2.46 2.69 
Loan to deposit (c)
68.9 66.5 76.5 
Capital ratios at period end
Key shareholders’ equity to assets9.4 %9.4 %10.6 %
Key common shareholders’ equity to assets8.4 8.4 9.5 
Tangible common equity to tangible assets (b)
6.9 7.0 7.9 
Common Equity Tier 1 (d)
9.4 9.6 9.7 
Tier 1 risk-based capital (d)
10.7 10.9 11.1 
Total risk-based capital (d)
12.4 12.7 13.4 
Leverage (d)
8.4 8.4 8.9 
Asset quality — from continuing operations
Net loan charge-offs
$19 $29 $135 
Net loan charge-offs to average loans
.08 %.11 %.53 %
Allowance for loan and lease losses
$1,061 $1,084 $1,626 
Allowance for credit losses
1,221 1,236 1,823 
Allowance for loan and lease losses to period-end loans
1.04 %1.10 %1.61 %
Allowance for credit losses to period-end loans
1.20 1.25 1.80 
Allowance for loan and lease losses to nonperforming loans233.7 195.7 207.1 
Allowance for credit losses to nonperforming loans268.9 223.1 232.2 
Nonperforming loans at period-end$454 $554 $785 
Nonperforming assets at period-end489 599 937 
Nonperforming loans to period-end portfolio loans.45 %.56 %.78 %
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets.48 .61 .92 
Trust assets
Assets under management
$55,806 $52,867 $47,086 
Other data
Average full-time equivalent employees
16,797 17,009 17,029 
Branches
999 1,000 1,073 
Taxable-equivalent adjustment
$5 $9 $8 


KeyCorp Reports Fourth Quarter 2021 Profit     
January 20, 2022
Page 13



Financial Highlights (continued)
(Dollars in millions, except per share amounts)
Twelve months ended
12/31/202112/31/2020
Summary of operations
Net interest income (TE)$4,098 $4,063 
Noninterest income3,194 2,652 
Total revenue (TE)7,292 6,715 
Provision for credit losses(418)1,021 
Noninterest expense4,429 4,109 
Income (loss) from continuing operations attributable to Key2,612 1,329 
Income (loss) from discontinued operations, net of taxes13 14 
Net income (loss) attributable to Key2,625 1,343 
Income (loss) from continuing operations attributable to Key common shareholders2,506 1,223 
Income (loss) from discontinued operations, net of taxes13 14 
Net income (loss) attributable to Key common shareholders2,519 1,237 
Per common share
Income (loss) from continuing operations attributable to Key common shareholders$2.64 $1.26 
Income (loss) from discontinued operations, net of taxes.01 .01 
Net income (loss) attributable to Key common shareholders (a)
2.65 1.28 
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution2.62 1.26 
Income (loss) from discontinued operations, net of taxes — assuming dilution.01 .01 
Net income (loss) attributable to Key common shareholders — assuming dilution (a)
2.63 1.27 
Cash dividends paid.75 .74 
Performance ratios
From continuing operations:
Return on average total assets1.46 %.82 %
Return on average common equity15.90 7.77 
Return on average tangible common equity (b)
19.37 9.51 
Net interest margin (TE)2.50 2.77 
Cash efficiency ratio (b)
59.9 60.2 
From consolidated operations:
Return on average total assets1.46 %.82 %
Return on average common equity15.98 7.86 
Return on average tangible common equity (b)
19.47 9.62 
Net interest margin (TE)2.50 2.76 
Asset quality — from continuing operations
Net loan charge-offs$184 $443 
Net loan charge-offs to average total loans.18 %.43 %
Other data
Average full-time equivalent employees16,974 16,826 
Taxable-equivalent adjustment27 29 
(a)Earnings per share may not foot due to rounding.
(b)The following table entitled “GAAP to Non-GAAP Reconciliations” presents the computations of certain financial measures related to “tangible common equity” and “cash efficiency.” The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.
(c)Represents period-end consolidated total loans and loans held for sale divided by period-end consolidated total deposits.
(d)December 31, 2021, ratio is estimated and reflects Key's election to adopt the CECL optional transition provision.


KeyCorp Reports Fourth Quarter 2021 Profit     
January 20, 2022
Page 14

GAAP to Non-GAAP Reconciliations
(Dollars in millions)
The table below presents certain non-GAAP financial measures related to “tangible common equity,” “return on average tangible common equity,” “pre-provision net revenue," and “cash efficiency ratio."

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

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

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

Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although these non-GAAP financial measures are frequently used by investors to evaluate a company, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP.
Three months endedTwelve months ended
12/31/20219/30/202112/31/202012/31/202112/31/2020
Tangible common equity to tangible assets at period-end
Key shareholders’ equity (GAAP)$17,423 $17,510 $17,981 
Less: Intangible assets (a)
2,820 2,814 2,848 
Preferred Stock (b)
1,856 1,856 1,856 
Tangible common equity (non-GAAP)$12,747 $12,840 $13,277 
Total assets (GAAP)$186,346 $187,035 $170,336 
Less: Intangible assets (a)
2,820 2,814 2,848 
Tangible assets (non-GAAP)$183,526 $184,221 $167,488 
Tangible common equity to tangible assets ratio (non-GAAP)6.95 %6.97 %7.93 %
Pre-provision net revenue
Net interest income (GAAP)$1,033 $1,016 $1,035 $4,071 $4,034 
Plus: Taxable-equivalent adjustment5 9 8 27 29 
Noninterest income909 797 802 3,194 2,652 
Less: Noninterest expense1,170 1,112 1,128 4,429 4,109 
Pre-provision net revenue from continuing operations (non-GAAP)$777 $710 $717 $2,863 $2,606 
Average tangible common equity
Average Key shareholders' equity (GAAP)$17,471 $17,899 $17,905 $17,665 $17,636 
Less: Intangible assets (average) (c)
2,814 2,823 2,855 2,829 2,878 
Preferred stock (average)1,900 1,900 1,900 1,900 1,900 
Average tangible common equity (non-GAAP)$12,757 $13,176 $13,150 $12,936 $12,858 
Return on average tangible common equity from continuing operations
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP)$601 $616 $549 $2,506 $1,223 
Average tangible common equity (non-GAAP)12,757 13,176 13,150 12,936 12,858 
Return on average tangible common equity from continuing operations (non-GAAP)18.69 %18.55 %16.61 %19.37 %9.51 %
Return on average tangible common equity consolidated
Net income (loss) attributable to Key common shareholders (GAAP)$603 $618 $556 $2,519 $1,237 
Average tangible common equity (non-GAAP)12,757 13,176 13,150 12,936 12,858 
Return on average tangible common equity consolidated (non-GAAP)18.75 %18.61 %16.82 %19.47 %9.62 %






KeyCorp Reports Fourth Quarter 2021 Profit     
January 20, 2022
Page 15

GAAP to Non-GAAP Reconciliations (continued)
(Dollars in millions)
Three months endedTwelve months ended
12/31/20219/30/202112/31/202012/31/202112/31/2020
Cash efficiency ratio
Noninterest expense (GAAP)$1,170 $1,112 $1,128 $4,429 $4,109 
Less: Intangible asset amortization14 15 15 58 65 
Adjusted noninterest expense (non-GAAP)$1,156 $1,097 $1,113 $4,371 $4,044 
Net interest income (GAAP)$1,033 $1,016 $1,035 $4,071 $4,034 
Plus: Taxable-equivalent adjustment5 9 8 27 29 
Noninterest income909 797 802 3,194 2,652 
Total taxable-equivalent revenue (non-GAAP)$1,947 $1,822 $1,845 $7,292 $6,715 
Cash efficiency ratio (non-GAAP)59.4 %60.2 %60.3 %59.9 %60.2 %
(a)For the three months ended December 31, 2021, September 30, 2021, and December 31, 2020, intangible assets exclude $3 million, $3 million, and $4 million, respectively, of period-end purchased credit card receivables.
(b)Net of capital surplus.
(c)For the three months ended December 31, 2021, September 30, 2021, and December 31, 2020, average intangible assets exclude $3 million, $3 million, and $5 million, respectively, of average purchased credit card receivables. For the twelve months ended months ended December 31, 2021, and December 31, 2020, average intangible assets exclude $4 million and $6 million, respectively, of average purchased credit card receivables.
GAAP = U.S. generally accepted accounting principles



KeyCorp Reports Fourth Quarter 2021 Profit     
January 20, 2022
Page 16

Consolidated Balance Sheets
(Dollars in millions)
12/31/20219/30/202112/31/2020
Assets
Loans$101,854 $98,609 $101,185 
Loans held for sale2,729 1,805 1,583 
Securities available for sale45,364 40,594 27,556 
Held-to-maturity securities7,539 8,423 7,595 
Trading account assets701 902 735 
Short-term investments11,010 19,608 16,194 
Other investments639 607 621 
Total earning assets169,836 170,548 155,469 
Allowance for loan and lease losses(1,061)(1,084)(1,626)
Cash and due from banks913 763 1,091 
Premises and equipment681 678 753 
Goodwill2,693 2,673 2,664 
Other intangible assets130 144 188 
Corporate-owned life insurance4,327 4,312 4,286 
Accrued income and other assets8,265 8,404 6,812 
Discontinued assets562 597 699 
Total assets$186,346 $187,035 $170,336 
Liabilities
Deposits in domestic offices:
NOW and money market deposit accounts$89,207 $87,242 $80,427 
Savings deposits7,503 7,259 5,913 
Certificates of deposit ($100,000 or more)1,705 1,890 2,733 
Other time deposits2,153 2,315 3,010 
Total interest-bearing deposits100,568 98,706 92,083 
Noninterest-bearing deposits52,004 53,225 43,199 
Total deposits152,572 151,931 135,282 
Federal funds purchased and securities sold under repurchase agreements 173 228 220 
Bank notes and other short-term borrowings588 767 759 
Accrued expense and other liabilities3,548 3,434 2,385 
Long-term debt12,042 13,165 13,709 
Total liabilities168,923 169,525 152,355 
Equity
Preferred stock1,900 1,900 1,900 
Common shares1,257 1,257 1,257 
Capital surplus6,278 6,141 6,281 
Retained earnings14,553 14,133 12,751 
Treasury stock, at cost(5,979)(5,876)(4,946)
Accumulated other comprehensive income (loss)(586)(45)738 
Key shareholders’ equity17,423 17,510 17,981 
Total liabilities and equity$186,346 $187,035 $170,336 
Common shares outstanding (000)928,850 930,544 975,773 





KeyCorp Reports Fourth Quarter 2021 Profit     
January 20, 2022
Page 17

Consolidated Statements of Income
(Dollars in millions, except per share amounts)
Three months ended
Twelve months ended
12/31/20219/30/202112/31/202012/31/202112/31/2020
Interest income
Loans$873 $882 $933 $3,532 $3,866 
Loans held for sale15 13 11 50 69 
Securities available for sale148 135 119 546 484 
Held-to-maturity securities52 43 51 185 222 
Trading account assets5 4 4 19 20 
Short-term investments8 9 4 28 18 
Other investments2 1 3 7 6 
Total interest income1,103 1,087 1,125 4,367 4,685 
Interest expense
Deposits15 15 28 67 347 
Federal funds purchased and securities sold under repurchase agreements— — — — 6 
Bank notes and other short-term borrowings2 2 1 8 12 
Long-term debt53 54 61 221 286 
Total interest expense70 71 90 296 651 
Net interest income1,033 1,016 1,035 4,071 4,034 
Provision for credit losses4 (107)20 (418)1,021 
Net interest income after provision for credit losses1,029 1,123 1,015 4,489 3,013 
Noninterest income
Trust and investment services income135 129 123 530 507 
Investment banking and debt placement fees323 235 243 937 661 
Service charges on deposit accounts90 91 82 337 311 
Operating lease income and other leasing gains37 37 39 148 167 
Corporate services income73 69 63 261 228 
Cards and payments income86 111 97 415 368 
Corporate-owned life insurance income34 33 38 128 139 
Consumer mortgage income25 33 43 131 176 
Commercial mortgage servicing fees48 34 32 160 80 
Other income58 25 42 147 15 
Total noninterest income909 797 802 3,194 2,652 
Noninterest expense
Personnel674 640 661 2,561 2,336 
Net occupancy75 74 75 300 298 
Computer processing73 67 62 284 232 
Business services and professional fees70 56 54 227 196 
Equipment25 25 26 100 100 
Operating lease expense31 30 35 126 138 
Marketing37 32 30 126 97 
Intangible asset amortization14 15 15 58 65 
Other expense171 173 170 647 647 
Total noninterest expense1,170 1,112 1,128 4,429 4,109 
Income (loss) from continuing operations before income taxes768 808 689 3,254 1,556 
Income taxes141 165 114 642 227 
Income (loss) from continuing operations627 643 575 2,612 1,329 
Income (loss) from discontinued operations, net of taxes2 2 7 13 14 
Net income (loss)629 645 582 2,625 1,343 
Less: Net income (loss) attributable to noncontrolling interests— — — — — 
Net income (loss) attributable to Key$629 $645 $582 $2,625 $1,343 
Income (loss) from continuing operations attributable to Key common shareholders$601 $616 $549 $2,506 $1,223 
Net income (loss) attributable to Key common shareholders603 618 556 2,519 1,237 
Per common share
Income (loss) from continuing operations attributable to Key common shareholders$.65 $.65 $.57 $2.64 $1.26 
Income (loss) from discontinued operations, net of taxes— — 0.01 .01 .01 
Net income (loss) attributable to Key common shareholders (a)
.65 .66 .57 2.65 1.28 
Per common share — assuming dilution
Income (loss) from continuing operations attributable to Key common shareholders$.64 $.65 $.56 $2.62 $1.26 
Income (loss) from discontinued operations, net of taxes— — — .01 .01 
Net income (loss) attributable to Key common shareholders (a)
.64 .65 .57 2.63 1.27 
Cash dividends declared per common share$.195 $.185 $.185 $.750 $.740 
Weighted-average common shares outstanding (000)922,970 942,446 967,987 947,065 967,783 
Effect of common share options and other stock awards11,758 10,077 8,473 10,349 7,024 
Weighted-average common shares and potential common shares outstanding (000) (b)
934,729 952,523 976,460 957,414 974,807 
(a)Earnings per share may not foot due to rounding.
(b)Assumes conversion of common share options and other stock awards, as applicable.


KeyCorp Reports Fourth Quarter 2021 Profit     
January 20, 2022
Page 18

Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations
(Dollars in millions)
Fourth Quarter 2021Third Quarter 2021Fourth Quarter 2020
AverageYield/AverageYield/AverageYield/
Balance
Interest (a)
Rate (a)
Balance
Interest (a)
Rate (a)
Balance
Interest (a)
Rate (a)
Assets
Loans: (b), (c)
Commercial and industrial (d)
$49,510 $447 3.58 %$49,868 $445 3.54 %$53,562 $477 3.54 %
Real estate — commercial mortgage13,671 121 3.51 13,306 120 3.56 12,862 121 3.74 
Real estate — construction2,119 19 3.50 2,134 19 3.53 1,959 19 3.79 
Commercial lease financing3,953 26 2.57 3,922 27 2.80 4,353 32 2.92 
Total commercial loans69,253 613 3.51 69,230 611 3.50 72,736 649 3.55 
Real estate — residential mortgage15,017 102 2.72 13,168 92 2.78 8,968 74 3.29 
Home equity loans8,603 79 3.64 8,894 84 3.75 9,410 91 3.81 
Consumer direct loans5,509 60 4.33 5,175 59 4.55 4,583 56 4.93 
Credit cards941 24 10.13 917 23 10.07 973 26 10.57 
Consumer indirect loans74 — — 2,754 22 3.15 5,040 45 3.56 
Total consumer loans30,144 265 3.49 30,908 280 3.60 28,974 292 4.01 
Total loans99,397 878 3.50 100,138 891 3.53 101,710 941 3.68 
Loans held for sale2,202 15 2.83 1,447 13 3.66 1,621 11 2.76 
Securities available for sale (b), (e)
42,329 148 1.39 36,923 135 1.48 28,046 119 1.75 
Held-to-maturity securities (b)
7,991 52 2.61 6,507 43 2.66 7,939 51 2.56 
Trading account assets853 5 2.48 743 4 2.19 744 4 2.21 
Short-term investments15,505 8 .20 19,274 9 .18 14,111 4 .14 
Other investments (e)
634 2 1.15 614 1 .99 615 3 1.31 
Total earning assets168,911 1,108 2.60 165,646 1,096 2.64 154,786 1,133 2.93 
Allowance for loan and lease losses(1,081)(1,222)(1,715)
Accrued income and other assets17,133 16,947 15,861 
Discontinued assets574 618 717 
Total assets$185,537 $181,989 $169,649 
Liabilities
NOW and money market deposit accounts$88,110 $11 .05 $85,333 $10 .05 $80,636 $12 .06 
Savings deposits7,375 — .01 7,117 — .01 5,737 — .03 
Certificates of deposit ($100,000 or more)1,793 2 .53 1,975 3 .59 2,983 9 1.20 
Other time deposits2,233 2 .21 2,404 2 .26 3,209 7 .80 
Total interest-bearing deposits99,511 15 .06 96,829 15 .06 92,565 28 .12 
Federal funds purchased and securities sold under repurchase agreements230 — .02 231 — .02 220 — .04 
Bank notes and other short-term borrowings789 2 1.45 671 2 1.11 791 1 .73 
Long-term debt (f), (g)
12,159 53 1.74 12,601 54 1.73 12,118 61 2.05 
Total interest-bearing liabilities112,689 70 .25 110,332 71 .26 105,694 90 .34 
Noninterest-bearing deposits51,494 50,087 43,156 
Accrued expense and other liabilities3,309 3,053 2,177 
Discontinued liabilities (g)
574 618 717 
Total liabilities$168,066 $164,090 $151,744 
Equity
Key shareholders’ equity$17,471 $17,899 $17,905 
Noncontrolling interests— — — 
Total equity17,471 17,899 17,905 
Total liabilities and equity$185,537 $181,989 $169,649 
Interest rate spread (TE)2.36 %2.38 %2.59 %
Net interest income (TE) and net interest margin (TE)$1,038 2.44 %$1,025 2.47 %$1,043 2.70 %
TE adjustment (b)
598
Net interest income, GAAP basis$1,033 $1,016 $1,035 
(a)Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (g) below, calculated using a matched funds transfer pricing methodology.
(b)Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 21% for the three months ended December 31, 2021, September 30, 2021, and December 31, 2020.
(c)For purposes of these computations, nonaccrual loans are included in average loan balances.
(d)Commercial and industrial average balances include $141 million, $137 million, and $129 million of assets from commercial credit cards for the three months ended December 31, 2021, September 30, 2021, and December 31, 2020, 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 Fourth Quarter 2021 Profit     
January 20, 2022
Page 19

Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations
(Dollars in millions)
Twelve months ended December 31, 2021Twelve months ended December 31, 2020
AverageYield/AverageYield/
Balance
Interest (a)
Rate (a)
Balance
Interest (a)
Rate (a)
Assets
Loans: (b), (c)
Commercial and industrial (d)
$50,931 $1,795 3.52 %$55,145 $1,977 3.59 %
Real estate — commercial mortgage13,118 4723.60 13,279 5213.92 
Real estate — construction2,113 77 3.61 1,843 74 3.99 
Commercial lease financing4,019 114 2.84 4,497 139 3.09 
Total commercial loans70,181 2,458 3.50 74,764 2,711 3.63 
Real estate — residential mortgage12,252 348 2.84 8,094 284 3.50 
Home equity loans8,967 336 3.74 9,772 392 4.01 
Consumer direct loans5,105 233 4.56 4,213 221 5.26 
Credit cards925 94 10.11 1,001 107 10.65 
Consumer indirect loans2,839 90 3.19 4,845 180 3.72 
Total consumer loans30,088 1,101 3.66 27,925 1,184 4.24 
Total loans100,269 3,559 3.55 102,689 3,895 3.79 
Loans held for sale1,700 50 2.96 1,972 69 3.49 
Securities available for sale (b), (e)
35,765 546 1.53 23,742 484 2.10 
Held-to-maturity securities (b)
7,035 185 2.63 8,938 222 2.49 
Trading account assets820 19 2.35 814 20 2.47 
Short-term investments17,529 28 .16 9,096 18 .20 
Other investments (e)
621 7 1.14 635 6 .87 
Total earning assets163,739 4,394 2.69 147,886 4,714 3.20 
Allowance for loan and lease losses(1,340)(1,481)
Accrued income and other assets16,520 15,650 
Discontinued assets632 775 
Total assets$179,551 $162,830 
Liabilities
NOW and money market deposit accounts$84,736 $41 .05 $75,733 $206 .27 
Savings deposits6,893 1 .02 5,252 2 .04 
Certificates of deposit ($100,000 or more)2,135 16 .72 4,520 83 1.83 
Other time deposits2,540 9 .37 4,041 56 1.38 
Total interest-bearing deposits96,304 67 .07 89,546 347 .39 
Federal funds purchased and securities sold under repurchase agreements239 — .02 670 6 .88 
Bank notes and other short-term borrowings770 8 1.08 1,452 12 .85 
Long-term debt (f), (g)
12,391 221 1.79 12,578 286 2.36 
Total interest-bearing liabilities109,704 296 .27 104,246 651 .63 
Noninterest-bearing deposits48,731 37,740 
Accrued expense and other liabilities2,819 2,433 
Discontinued liabilities (g)
632 775 
Total liabilities$161,886 $145,194 
Equity
Key shareholders’ equity$17,665 $17,636 
Noncontrolling interests— — 
Total equity17,665 17,636 
Total liabilities and equity$179,551 $162,830 
Interest rate spread (TE)2.42 %2.57 %
Net interest income (TE) and net interest margin (TE)$4,098 2.50 %$4,063 2.77 %
TE adjustment (b)
2729 
Net interest income, GAAP basis$4,071 $4,034 
(a)Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (g) below, calculated using a matched funds transfer pricing methodology.
(b)Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 21% for the twelve months ended months ended December 31, 2021, and December 31, 2020, respectively.
(c)For purposes of these computations, nonaccrual loans are included in average loan balances.
(d)Commercial and industrial average balances include $134 million and $135 million of assets from commercial credit cards for the twelve months ended months ended December 31, 2021, and December 31, 2020, 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 Fourth Quarter 2021 Profit     
January 20, 2022
Page 20

Noninterest Expense
(Dollars in millions)
Three months endedTwelve months ended
12/31/20219/30/202112/31/202012/31/202112/31/2020
Personnel (a)
$674 $640 $661 $2,561 $2,336 
Net occupancy75 74 75 300 298 
Computer processing73 67 62 284 232 
Business services and professional fees70 56 54 227 196 
Equipment25 25 26 100 100 
Operating lease expense31 30 35 126 138 
Marketing37 32 30 126 97 
Intangible asset amortization14 15 15 58 65 
Other expense171 173 170 647 647 
Total noninterest expense$1,170 $1,112 $1,128 $4,429 $4,109 
Average full-time equivalent employees (b)
16,797 17,009 17,029 16,974 16,826 
(a)Additional detail provided in Personnel Expense table below.
(b)The number of average full-time equivalent employees has not been adjusted for discontinued operations.

Personnel Expense
(Dollars in millions)
Three months endedTwelve months ended
12/31/20219/30/202112/31/202012/31/202112/31/2020
Salaries and contract labor$342 $328 $342 $1,311 $1,329 
Incentive and stock-based compensation243 212 208 861 627 
Employee benefits89 100 89 388 350 
Severance— — 22 1 30 
Total personnel expense$674 $640 $661 $2,561 $2,336 



KeyCorp Reports Fourth Quarter 2021 Profit     
January 20, 2022
Page 21

Loan Composition
(Dollars in millions)
Percent change 12/31/2021 vs
12/31/20219/30/202112/31/20209/30/202112/31/2020
Commercial and industrial (a)
$50,525 $49,553 $52,907 2.0 %(4.5)%
Commercial real estate:
Commercial mortgage14,244 13,674 12,687 4.2 12.3 
Construction1,996 2,120 1,987 (5.8).5 
Total commercial real estate loans16,240 15,794 14,674 2.8 10.7 
Commercial lease financing (b)
4,071 3,982 4,399 2.2 (7.5)
Total commercial loans70,836 69,329 71,980 2.2 (1.6)
Residential — prime loans:
Real estate — residential mortgage15,756 14,204 9,298 10.9 69.5 
Home equity loans8,467 8,747 9,360 (3.2)(9.5)
Total residential — prime loans24,223 22,951 18,658 5.5 29.8 
Consumer direct loans5,753 5,324 4,714 8.1 22.0 
Credit cards972 928 989 4.7 (1.7)
Consumer indirect loans70 77 4,844 (9.1)(98.6)
Total consumer loans31,018 29,280 29,205 5.9 6.2 
Total loans (c), (d)
$101,854 $98,609 $101,185 3.3 %.7 %
(a)Loan balances include $139 million, $139 million, and $127 million of commercial credit card balances at December 31, 2021, September 30, 2021, and December 31, 2020, respectively.
(b)Commercial lease financing includes receivables held as collateral for a secured borrowing of $16 million, $16 million, and $23 million at December 31, 2021, September 30, 2021, and December 31, 2020, respectively. Principal reductions are based on the cash payments received from these related receivables.
(c)Total loans exclude loans of $567 million at December 31, 2021, $602 million at September 30, 2021, and $710 million at December 31, 2020, related to the discontinued operations of the education lending business.
(d)Accrued interest of $198 million, $211 million, and $241 million at December 31, 2021, September 30, 2021, and December 31, 2020, respectively, presented in "other assets" on the Consolidated Balance Sheets is excluded from the amortized cost basis disclosed in this table.
Loans Held for Sale Composition
(Dollars in millions)
Percent change 12/31/2021 vs
12/31/20219/30/202112/31/20209/30/202112/31/2020
Commercial and industrial$1,438 $122 $249 N/M477.5 %
Real estate — commercial mortgage1,010 1,446 1,014 (30.2)(0.4)
Real estate — residential mortgage281 237 264 18.6 6.4 
Consumer direct loans— — 56 N/MN/M
Total loans held for sale$2,729 $1,805 $1,583 51.2 %72.4 %
N/M = Not Meaningful
Summary of Changes in Loans Held for Sale
(Dollars in millions)
4Q213Q212Q211Q214Q20
Balance at beginning of period$1,805 $1,537 $2,296 $1,583 $1,724 
New originations5,741 3,328 3,573 4,010 3,835 
Transfers from (to) held to maturity, net(1)3,305 (71)83 (24)
Loan sales(4,779)(6,405)(4,195)(3,303)(3,932)
Loan draws (payments), net(12)8 (27)(73)(19)
Valuation and other adjustments(25)32 (39)(4)— 
Balance at end of period$2,729 $1,805 $1,537 $2,296 $1,583 




KeyCorp Reports Fourth Quarter 2021 Profit     
January 20, 2022
Page 22

Summary of Loan and Lease Loss Experience From Continuing Operations
(Dollars in millions)
Three months endedTwelve months ended
12/31/20219/30/202112/31/202012/31/202112/31/2020
Average loans outstanding$99,397 $100,138 $101,710 $100,269 $102,689 
Allowance for loan and lease losses at the end of the prior period$1,084 $1,220 $1,730 $1,626 $900 
Cumulative effect from change in accounting principle (a)
— — — — 204 
Allowance for loan and lease losses at the beginning of the period1,084 1,220 1,730 1,626 1,104 
Loans charged off:
Commercial and industrial33 27 119 174 351 
Real estate — commercial mortgage1 — 1 40 19 
Real estate — construction— — — — — 
Total commercial real estate loans1 — 1 40 19 
Commercial lease financing1 1 19 6 35 
Total commercial loans35 28 139 220 405 
Real estate — residential mortgage(1)(2)— (2)2 
Home equity loans2 1 1 9 11 
Consumer direct loans7 7 7 29 37 
Credit cards6 6 7 27 39 
Consumer indirect loans1 26 6 39 28 
Total consumer loans15 38 21 102 117 
Total loans charged off50 66 160 322 522 
Recoveries:
Commercial and industrial23 20 15 83 34 
Real estate — commercial mortgage1 1 — 9 3 
Real estate — construction— — — — — 
Total commercial real estate loans1 1 — 9 3 
Commercial lease financing— 6 — 7 1 
Total commercial loans24 27 15 99 38 
Real estate — residential mortgage1 1 — 3 1 
Home equity loans1 2 1 5 7 
Consumer direct loans2 2 1 8 7 
Credit cards2 1 2 8 8 
Consumer indirect loans1 4 6 15 18 
Total consumer loans7 10 10 39 41 
Total recoveries31 37 25 138 79 
Net loan charge-offs(19)(29)(135)(184)(443)
Provision (credit) for loan and lease losses(4)(107)31 (381)965 
Allowance for loan and lease losses at end of period$1,061 $1,084 $1,626 $1,061 $1,626 
Liability for credit losses on lending-related commitments at the end of the prior period
$152 $152 $208 $197 $68 
Liability for credit losses on contingent guarantees at the end of the prior period— — — — 7 
Cumulative effect from change in accounting principle (a), (b)
— — — — 66 
Liability for credit losses on lending-related commitments at beginning of period152 152 208 197 141 
Provision (credit) for losses on lending-related commitments8 — (11)(37)56 
Liability for credit losses on lending-related commitments at end of period (c)
$160 $152 $197 $160 $197 
Total allowance for credit losses at end of period$1,221 $1,236 $1,823 $1,221 $1,823 
Net loan charge-offs to average total loans.08 %.11 %.53 %.18 %.43 %
Allowance for loan and lease losses to period-end loans1.04 1.10 1.61 1.04 1.61 
Allowance for credit losses to period-end loans1.20 1.25 1.80 1.20 1.80 
Allowance for loan and lease losses to nonperforming loans233.7 195.7 207.1 233.7 207.1 
Allowance for credit losses to nonperforming loans268.9 223.1 232.2 268.9 232.2 
Discontinued operations — education lending business:
Loans charged off$1 1 $1 $4 $5 
Recoveries— 1 2 2 5 
Net loan charge-offs$(1)$— $1 $(2)$— 
(a)The cumulative effect from change in accounting principle relates to the January 1, 2020, adoption of ASU 2016-13.
(b)Twelve months ended December 30, 2020, excludes $4 million related to the provision for other financial assets as a result of the change in accounting principle.
(c)Included in "Accrued expense and other liabilities" on the balance sheet.


KeyCorp Reports Fourth Quarter 2021 Profit     
January 20, 2022
Page 23

Asset Quality Statistics From Continuing Operations
(Dollars in millions)
4Q213Q212Q211Q214Q20
Net loan charge-offs$19 $29 $22 $114 $135 
Net loan charge-offs to average total loans.08 %.11 %.09 %.46 %.53 %
Allowance for loan and lease losses$1,061 $1,084 $1,220 $1,438 $1,626 
Allowance for credit losses (a)
1,221 1,236 1,372 1,616 1,823 
Allowance for loan and lease losses to period-end loans1.04 %1.10 %1.21 %1.42 %1.61 %
Allowance for credit losses to period-end loans1.20 1.25 1.36 1.60 1.80 
Allowance for loan and lease losses to nonperforming loans233.7 195.7 175.8 197.5 207.1 
Allowance for credit losses to nonperforming loans268.9 223.1 197.7 222.0 232.2 
Nonperforming loans at period end$454 $554 $694 $728 $785 
Nonperforming assets at period end489 599 738 790 937 
Nonperforming loans to period-end portfolio loans.45 %.56 %.69 %.72 %.78 %
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets
.48 .61 .73 .78 .92 
(a)Includes the allowance for loan and lease losses plus the liability for credit losses on lending-related commitments.

Summary of Nonperforming Assets and Past Due Loans From Continuing Operations
(Dollars in millions)
12/31/20219/30/20216/30/20213/31/202112/31/2020
Commercial and industrial$191 $253 $355 $387 $385 
Real estate — commercial mortgage44 49 66 66 104 
Real estate — construction— — — — — 
Total commercial real estate loans44 49 66 66 104 
Commercial lease financing4 5 7 8 8 
Total commercial loans239 307 428 461 497 
Real estate — residential mortgage72 93 99 95 110 
Home equity loans135 146 146 148 154 
Consumer direct loans4 4 4 5 5 
Credit cards3 3 3 3 2 
Consumer indirect loans1 1 14 16 17 
Total consumer loans215 247 266 267 288 
Total nonperforming loans454 554 694 728 785 
OREO8 8 9 12 100 
Nonperforming loans held for sale24 35 32 47 49 
Other nonperforming assets3 2 3 3 3 
Total nonperforming assets$489 $599 $738 $790 $937 
Accruing loans past due 90 days or more68 82 74 92 86 
Accruing loans past due 30 through 89 days165 164 190 191 241 
Restructured loans — accruing and nonaccruing (a)
220 270 334 376 363 
Restructured loans included in nonperforming loans (a)
99 146 177 192 229 
Nonperforming assets from discontinued operations — education lending business 4 4 5 5 5 
Nonperforming loans to period-end portfolio loans.45 %.56 %.69 %.72 %.78 %
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets
.48 .61 .73 .78 .92 
(a)Restructured loans (i.e., troubled debt restructuring) are those for which Key, for reasons related to a borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. These concessions are made to improve the collectability of the loan and generally take the form of a reduction of the interest rate, extension of the maturity date or reduction in the principal balance.
Summary of Changes in Nonperforming Loans From Continuing Operations
(Dollars in millions)
4Q213Q212Q211Q214Q20
Balance at beginning of period$554 $694 $728 $785 $834 
Loans placed on nonaccrual status116 116 186 196 300 
Charge-offs(51)(66)(74)(135)(160)
Loans sold(38)(17)(10)(13)(9)
Payments(68)(136)(92)(37)(83)
Transfers to OREO(1)(1)— (3)(3)
Transfers to nonperforming loans held for sale— — — — — 
Loans returned to accrual status(58)(36)(44)(65)(94)
Balance at end of period$454 $554 $694 $728 $785 


KeyCorp Reports Fourth Quarter 2021 Profit     
January 20, 2022
Page 24

Line of Business Results
(Dollars in millions)
Percentage change 4Q21 vs.
4Q213Q212Q211Q214Q203Q214Q20
Consumer Bank
Summary of operations
Total revenue (TE)$839 $870 $852 $864 $896 (3.6)%(6.4)%
Provision for credit losses13 (38)(70)(23)(5)134.2 360.0 
Noninterest expense614 591 584 601 606 3.9 1.3 
Net income (loss) attributable to Key161 241 257 217 225 (33.2)(28.4)
Average loans and leases37,792 39,796 40,598 39,249 39,448 (5.0)(4.2)
Average deposits90,271 89,156 88,412 85,033 82,845 1.3 9.0 
Net loan charge-offs22 35 34 36 28 (37.1)(21.4)
Net loan charge-offs to average total loans.23 %.35 %.34 %.37 %.28 %(34.3)(17.9)
Nonperforming assets at period end$222 $254 $274 $276 $300 (12.6)(26.0)
Return on average allocated equity18.05 %25.81 %28.53 %25.74 %25.60 %(30.1)(29.5)
Commercial Bank
Summary of operations
Total revenue (TE)$1,028 $886 $871 $858 $922 16.0 %11.5 %
Provision for credit losses(12)(69)(131)(67)44 (82.6)127.3 
Noninterest expense501 470 451 443 499 6.6 .4 
Net income (loss) attributable to Key449 381 432 383 310 17.8 44.8 
Average loans and leases61,127 59,914 59,953 61,221 62,016 2.0 (1.4)
Average loans held for sale1,962 1,190 1,341 1,237 1,285 64.9 52.7 
Average deposits59,537 56,522 54,814 51,894 52,489 5.3 13.4 
Net loan charge-offs— (6)9 78 108 (100.0)(100.0)
Net loan charge-offs to average total loans— %(.04)%.06 %.52 %.69 %(100.0)(100.0)
Nonperforming assets at period end$267 $345 $464 $514 $637 (22.6)(58.1)
Return on average allocated equity21.54 %18.54 %20.69 %17.41 %23.79 %16.2 (9.5)
TE = Taxable Equivalent, N/A = Not Applicable, N/M = Not Meaningful

KeyCorp Fourth Quarter 2021 Earnings Review January 20, 2022 Chris Gorman Chairman and Chief Executive Officer Don Kimble Vice Chairman and Chief Financial Officer

 
FORWARD-LOOKING STATEMENTS AND ADDITIONAL INFORMATION This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, but not limited to, KeyCorp’s expectations or predictions of future financial or business performance or conditions. Forward-looking statements are typically identified by words such as “believe,” “seek,” “expect,” “anticipate,” “intend,” “target,” “estimate,” “continue,” “positions,” “plan,” “predict,” “project,” “forecast,” “guidance,” “goal,” “objective,” “prospects,” “possible,” “potential,” “strategy,” “opportunities,” or “trends,” by future conditional verbs such as “assume,” “will,” “would,” “should,” “could” or “may”, or by variations of such words or by similar expressions. These forward-looking statements are based on assumptions that involve risks and uncertainties, which are subject to change based on various important factors (some of which are beyond KeyCorp’s control.) Actual results may differ materially from current projections. Actual outcomes may differ materially from those expressed or implied as a result of the factors described under “Forward-looking Statements” and “Risk Factors” in KeyCorp’s Annual Report on Form 10-K for the year ended December 31, 2020, in KeyCorp’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, and in other filings of KeyCorp with the Securities and Exchange Commission (the “SEC”). Such forward-looking statements speak only as of the date they are made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after that date or to reflect the occurrence of unanticipated events. For additional information regarding KeyCorp, please refer to our SEC filings available at www.key.com/ir. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results. This presentation also includes certain non-GAAP financial measures related to “tangible common equity,” “cash efficiency ratio,” and “pre-provision net revenue.” 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, or page 49 of our Form 10-Q dated September 30, 2021. GAAP: Generally Accepted Accounting Principles 2

 
2021: A Record Year Delivering on Commitments with Momentum Across the Franchise Positive operating leverage: achieved for 4Q21 and FY21  8 of the last 9 years  Record pre-provision revenue : FY21 PPNR(a) up 10% vs. 2020  Targeted investments to drive growth: adding senior bankers (+10% YoY), Laurel Road, AQN Strategies, and XUP Strong credit quality: historic low net charge-offs to average loans Significant capital return: 75% of net income returned to shareholders  2020 2021 Total Revenue (TE) Strong consumer execution: record net new household growth and record loan originations of $16Bn (Laurel Road and consumer mortgage)      Strong commercial execution: raised >$100Bn of capital for clients with 18% retained on balance sheet; driving record fee income Pre-Provision Net Revenue (a) Net Charge-Offs 2020 2021 2020 2021 (58)%+10%+9% (a) Non-GAAP measure: see 4Q21 earnings press release for reconciliation Record total revenue : FY21 revenue up 9% vs. 2020 with growth across the franchise 3

 
Financial Review 4

 
Financial Highlights EOP = End of Period (a) Non-GAAP measure: see Appendix for reconciliations (b) 12/31/21 ratios are estimated EPS – assuming dilution $.64 $ .65 $ .56 (1.5) % 14.3 % Cash efficiency ratio(a) 59.4 % 60.2 % 60.3 % (80) bps (90) bps Return on average tangible common equity(a) 18.7 18.6 16.6 10 210 Return on average total assets 1.34 1.41 1.35 (7) (1) Net interest margin 2.44 2.47 2.70 (3) (26) Common Equity Tier 1(b) 9.4 % 9.6 % 9.7 % (20) bps (30) bps Tier 1 risk-based capital(b) 10.7 10.9 11.1 (20) (40) Tangible common equity to tangible assets(a) 6.9 7.0 7.9 (10) (100) NCOs to average loans .08 % .11 % .53 % (3) bps (45) bps NPLs to EOP portfolio loans .45 .56 .78 (11) (33) Allowance for credit losses to EOP loans 1.20 1.25 1.80 (5) (60) Asset Quality Profitability Continuing operations, unless otherwise noted 4Q21 3Q21 4Q20 LQ ∆ Y/Y ∆ Capital 5

 
$8 $4 $2 4Q20 3Q21 4Q21 Commercial loans PPP Loans $ in billions vs. Prior Year Total Average Loans Highlights  Average loans down 2% from 4Q20 − Commercial balances reflect lower PPP balances from forgiveness, partially offset by core growth in commercial and industrial and commercial real estate − Consumer loan growth (+4%) driven by consumer mortgage and Laurel Road partially offset by the indirect auto portfolio sale vs. Prior Quarter  Average loans relatively stable compared to 3Q21 − Commercial balances reflect a slight increase in commercial utilization rates, more than offset by the forgiveness of PPP loans − Strength in consumer mortgage and Laurel Road, partially offset by the indirect auto portfolio sale (reduced balances $2.7Bn QoQ) $ in billions Average Loan Detail $8 $2 30% 29% 20.00% 30.00% 40.00% $60 $70 $80 $90 $100 $110 4Q20 1Q21 2Q21 3Q21 4Q21 C&I line utilizationTotal average loans ConsumerCommercial 6 PPP  $2.3Bn of average PPP loans in 4Q21  $1.5Bn of PPP forgiveness in 4Q21 $73 $69 $69 $99 $102 PPP $5 $3 4Q20 3Q21 4Q21 Indirect Auto Consumer loans Indirect auto sale impact:  $2.7Bn QoQ

 
$51.5 $88.1 $7.4 $4.0 .16% .04% .23% .06% $0 $20 $40 $60 $80 $100 $120 $140 $160 4Q20 1Q21 2Q21 3Q21 4Q21 Cost of total interest-bearing deposits  Average deposit balances up 3% from 3Q21 − Growth in commercial escrow deposits − Partially offset by a continued decline in time deposits 4Q21 Average Deposit Mix  Average deposits up 11% from 4Q20 − Growth from consumer and commercial relationships − Partially offset by decline in time deposits as a result of lower interest rates Cost of total deposits CDs and other time deposits Savings Noninterest-bearing NOW and MMDA $ in billions $ in billions vs. Prior Year vs. Prior Quarter Consumer Commercial $136 Average Deposits Highlights  Strong and stable deposit base − 34% noninterest-bearing(a) − ~60% stable retail and low-cost escrow − 69% loan to deposit ratio(b) (a) Based on period-end balances (b) Represents period-end consolidated total loans and loans held for sale divided by period-end consolidated total deposits x 7 Deposits $151

 
$1,038 2.70% 2.44% 2.0% 2.5% 3.0% 3.5% 4.0% $500 $600 $700 $800 $900 $1,000 $1,100 4Q20 1Q21 2Q21 3Q21 4Q21  Net interest income up $13MM (+1%) from 3Q21 − Largely reflecting balance sheet growth, a favorable earning asset mix and higher loan fees from PPP forgiveness and core loan growth − Partially offset by lower reinvestment yields and the indirect auto portfolio sale ($11MM impact on NII and 3 bps impact on NIM in 4Q21) TE = Taxable equivalent Net interest income (TE) Net Interest Margin (TE) Net Interest Income and Margin $ in millions; continuing operations vs. Prior Year vs. Prior Quarter $1,043 Net Interest Income & Net Interest Margin Trend (TE ) Highlights x  Net interest income down $5MM from 4Q20 − Largely driven by lower reinvestment yields and the indirect auto portfolio sale − Partially offset by a favorable earning asset mix  Lower NIM also impacted by continued elevated levels of liquidity 8 NIM Change vs. Prior Quarter 3Q21: 2.47% Balance sheet mix and earning asset yields (.05) Loan fees .02 Total change (.03) 4Q21: 2.44%

 
 Noninterest income up $107MM (+13%) from 4Q20 − Record fourth quarter of investment banking and debt placement fees (+$80MM) − Strength in commercial mortgage servicing fees (+$16MM) and other income (+$16MM) − Partially offset by lower consumer mortgage income (-$18MM) from higher balance sheet retention and lower gain on sale margins Noninterest Income Noninterest Income  Noninterest income up $112MM (+14%) from 3Q21 − Higher investment banking and debt placement fees (+$88MM) driven by broad-based growth across the platform − Strength in other income (+$33MM) and commercial mortgage servicing fees (+$14MM) − Partially offset by lower cards and payments income (-$25MM) driven by lower prepaid card revenue vs. Prior Year vs. Prior Quarter Highlights $ in millions up / (down) 4Q21 vs. 4Q20 vs. 3Q21 Trust and investment services income $ 135 $ 12 $ 6 Investment banking and debt placement fees 323 80 88 Service charges on deposit accounts 90 8 (1) Operating lease income and other leasing gains 37 (2) - Corporate services income 73 10 4 Cards and payments income 86 (11) (25) Corporate-owned life insurance 34 (4) 1 Consumer mortgage income 25 (18) (8) Commercial mortgage servicing fees 48 16 14 Other income 58 16 33 Total noninterest income $ 909 $ 107 $ 1 12 9

 
2021 Investments – Driving Growth Noninterest Expense vs. Prior Year vs. Prior Quarter Noninterest Expense Highlights $ in millions favorable / (unfavorable) 4Q21 vs. 4Q20 vs. 3Q21 Personnel $ 674 $ (13) $ (34) Net occupancy 75 - (1) Computer processing 73 (11) (6) Business services, professional fees 70 (16) (14) Equipment 25 1 - Operating lease expense 31 4 (1) Marketing 37 (7) (5) Intangible asset amortization 14 1 1 Other expense 171 (1) 2 Total noninterest expense $ 1,170 $ (42) $ (58)  Noninterest expense up $42MM (+4%) from 4Q20 − Expenses reflect investments across franchise in digital, analytics, and teammates − Higher business services and professional fees (+$16MM) and computer processing expense (+11MM) − Higher incentive and stock-based compensation related to strong fee production and increased share price  Noninterest expense up $58MM (+5%) from 3Q21 − Higher incentive and stock-based compensation related to strong fee production and increased share price − Higher business services and professional fees (+14MM) 10  Growing Laurel Road and launching national digital bank  Growing our team (bankers +10%)  Enhancing digital and analytics capabilities

 
$135 $19 20 $4 .49% .08% (.40)% (.20)% .00% .20% .40% .60% .80% ($300) ($150) $0 $150 $300 $450 $600 4Q20 1Q21 2Q21 3Q21 4Q21 $ in millions Credit Quality $ in millions NCOs Provision for credit losses NCOs to avg. loans $785 $454 .78% .45% .00% .40% .80% 1.20% 1.60% 2.00% $0 $300 $600 $900 4Q20 1Q21 2Q21 3Q21 4Q21 NPLs NPLs to period-end loans NCO = Net charge-off NPL = Nonperforming Loans $1,823 $1,221 232% 267% 100% 150% 200% 250% 300% 350% 400% $0 $500 $1,000 $1,500 $2,000 $2,500 4Q20 1Q21 2Q21 3Q21 4Q21 Allowance for credit losses to NPLs Allowance for credit losses Nonperforming Loans 4Q21 allowance for credit losses to period-end loans of 1.20% Allowance for Credit Losses (ACL) Net Charge-offs & Provision for Credit Losses $ in millions 11

 
Common Equity Tier 1 (a)  Strong capital position: CET1 ratio 9.4% (a) at 12/31/2021 – within targeted range  Strong capital return: − Increased dividend 5% to $.195 per common share in 4Q21 − 4Q reflects final settlement of accelerated share repurchase program Tangible Common Equity to Tangible Assets (b) (a) 12/31/21 ratio is estimated and reflects Key's election to adopt the CECL optional transition provision (b) Non-GAAP measure: see Appendix for reconciliation 9.7% 9.4% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 4Q20 1Q21 2Q21 3Q21 4Q21 7.9% 6.9% 6.0% 7.0% 8.0% 9.0% 4Q20 1Q21 2Q21 3Q21 4Q21 Capital Highlights 12 SHARE REPURCHASE Capital Return COMMON SHARE DIVIDEND $.75 per common share in 2021 22% 10-year common share CAGR $1.1Bn common shares repurchased in FY21 >$5.8Bn common shares repurchased since 2012

 
FY2022 Outlook & Long -term Targets Average Balance Sheet • Loans: up low-double digit excluding the impact of PPP and the indirect auto portfolio sale  up low-single digit on a reported basis • Deposits: up low-single digit Net Interest Income (TE) • Net interest income: relatively stable Noninterest Income • Noninterest income: down low-single digit (reflects lower prepaid card income) Noninterest Expense • Noninterest expense: down low-single digit Credit Quality • Net charge-offs to average loans: 20 - 30 bps Taxes • GAAP tax rate: ~20% FY 2022 (vs. FY 2021) Long-term Targets Positive operating leverage Cash efficiency ratio: 54% - 56% Moderate risk profile: Net charge-offs to avg. loans targeted range of 40-60 bps ROTCE: 16% - 19% Guidance ranges: relatively stable: +/- 2%; low-single digit: 1% - 3%; mid-single digit: 4% - 6%; high-single digit: 7% - 9%; low-double digit: 10% - 12% 13

 
Appendix 14

 
Total Commercial Loans C&I $40 CRE $18 $ in billions 12/31/21 % of total loans Commercial and industrial $ 50.5 49 Commercial real estate 16.2 16 Commercial lease financing 4.1 4 Total Commercial $ 70.8 69% Commercial Loan Portfolio Detail  Solid middle market portfolio  Aligning bankers to areas of market opportunity and growth - investing in strategic hires with industry vertical expertise  High-quality borrowers  Small, stable leveraged portfolio: <2% of total loans Portfolio Highlights  Target specific client segments focused in 7 industry verticals  Experienced bankers with deep industry expertise  Focused on high quality clients  Credit quality metrics remain strong and stable − Disciplined, consistent underwriting − Active surveillance with ongoing portfolio reviews − Dynamic assessment of ratings migration  Strengthened credit risk profile with strategic exits and growth in targeted client segments to focus on relationships  Significantly scaled back construction portfolio from pre-global financial crisis (42% in 2008  14% in 2021)  Focused on relationships with owners and operators  Strategic focus in CDLI and multifamily Commercial Real Estate (CRE) Commercial & Industrial (C&I) Consumer Energy Healthcare Industrial Public Sector Real Estate Technology Targeted Industry Verticals ~80% commercial bank credit exposure from relationship(a) clients (a) Relationship client is defined as having two or more of the following: credit, capital markets, or payments 15

 
$2.5 $3.0 $3.7 $3.7 $3.4 4Q20 1Q21 2Q21 3Q21 4Q21 Origination Volume $590 $475 $399 $504 $646 4Q20 1Q21 2Q21 3Q21 4Q21 Origination Volume Portfolio Highlights  Prime & super prime client base focused on relationships  Continued consumer originations bring more balance to portfolio  Continuing to invest in digital to drive future growth weighted average FICO at origination Total Consumer Loans Consumer Loan Portfolio Detail C&I $40 CRE $18 $ in billions 12/31/21 % of total loans WA FICO at origination Consumer mortgage $ 15.8 16 762 Home equity 8.5 8 807 Consumer direct 5.8 6 777 Credit card 1.0 1 792 Consumer indirect(a) .07 N/A N/A Total Consumer $ 31.0 31% 772 $ in millions $ in billions  High-quality client base: primarily healthcare professionals  Launched Laurel Road for Doctors on 3/30/21: expands Key’s digital reach and consumer franchise nationally through targeted scale  2021 production levels were negatively impacted by the federal student loan payment holiday  Focused on prime/super-prime clients (weighted average FICO at origination: 762)  Investing in digital capabilities to enhance client experience and improve efficiency  Continued momentum with loan originations of $3.4Bn in 4Q21 and $13.8Bn in FY21 Laurel Road Consumer Mortgage 772 16(a) Indirect auto portfolio was sold on 9/10/21

 
Average Total Investment Securities Average AFS securities Investment Portfolio Average yield(a) $ in billions Highlights 1.93% 1.58% .50% 1.00% 1.50% 2.00% 2.50% $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 4Q20 1Q21 2Q21 3Q21 4Q21 $33.6 17  Portfolio used for funding and liquidity management − Portfolio composed primarily of fixed-rate GNMA and GSE-backed MBS and CMOs − Portfolio yield excluding short-term Treasury/Agency: 1.86%  Growth in average balances reflects continued redeployment of cash into higher yielding securitie s in 4Q21 − Added $6.9Bn in Agency Mortgage Securities − Rebalanced Short-Term Portfolio to enhance yield: Sold $1.4Bn in Treasuries and purchased $1.9Bn of other Treasuries & Agency Debentures  Portfolio constructed to enhance current returns on excess liquidity, while preserving the opportunity to capitalize on higher interest rates in the future − Recent Agency MBS/CMO investments constructed to limit extension risk and provide continued cash flows as rates rise ($2.5-$3Bn a quarter in the near-term) − $6.3Bn of securities hedges will become active over the next three years, converting fixed rate securities to floating rate securities − Short-term Treasury/Agency portfolio consists of a laddered maturity profile with runoff beginning in 2023  Portfolio average life of 5.6 years and duration of 4.1 years at 12/31/2021 (duration including securities hedges) $10.5 $11.5 $19.8 $- $5.0 $10.0 $15.0 $20.0 $25.0 2022 2023 2024 Existing Portfolio Repricing Characteristics Projected Cash Flows & Maturities (under implied forward rates) $ in billions Floating Rate (including hedges) Average HTM securities $50.3 (a) Yield is calculated on the basis of amortized cost

 
Interest- bearing 66% Noninterest- bearing 34% Prime 10% 1M LIBOR 35% 3M LIBOR 6% Other 15% Fixed 34% Balanced approach to managing interest rate risk provides declining rate protection while maintaining significant upside to higher rates 4Q21 Balance Sheet Highlights (a) Loan Composition Deposit Mix  Attractive business model with relationship-oriente d lending franchise − Distinctive commercial capabilities drive C&I growth and ~66% floating-rate loan mix (incl. PPP) − Laurel Road and consumer mortgage enhance fixed rate loan volumes with attractive client profile  Strong, low-cost deposit base − ~60% stable retail and low-cost escrow − >85% from markets where Key maintains top-5 deposit or branch share  $53Bn investment portfolio structured to provide greater yield stability in a lower rate environment − Higher allocation of bullet-like securities and mortgage collateral with lower prepayment risks and limited exposure to unamortized premiums Actively Managing Interest Rate Risk Position  Modest exposure to further rate declines with prote ction against negative interest rates − 90%+ of existing LIBOR/SOFR loan portfolio contain floors (at or above 0%), with floors incorporated into new floating rate loan contracts  Substantial opportunities to reinvest and monetize h igher term rates ‒ Modeled year one net interest income benefit of ~5% to ramped 200 bps rise in rates with conservative low 30’s deposit beta assumption ‒ Incremental 1.25% NII benefit for each 5% reduction in beta ‒ $20+ Bn in cash and short-term treasuries  Total hedge portfolio of $38Bn at 12/31/2021 (a) Loan and deposit statistics based on 12/31/2021 ending balances  Continually evaluating opportunities to protect and enhance NII through new hedging and/or modifying existing positions 18 Asset & Liability Management Positioning A/LM Swaps Debt Swaps 4Q 21 $[25Bn $ 7Bn $ 6Bn Securities Hedges

 
Criticized Outstandings (a) to Period-end Total LoansDelinquencies to Period-end Total Loans Credit Quality Trends (a) Loan and lease outstandings (b) From continuing operations 30 – 89 days delinquent 90+ days delinquent .24% .16% .08% .07% .00% .20% .40% .60% .80% 4Q20 1Q21 2Q21 3Q21 4Q21 4.3% 2.6% .0% 2.0% 4.0% 6.0% 4Q20 1Q21 2Q21 3Q21 4Q21 Metric (b) 4Q21 3Q21 2Q21 1Q21 4Q20 Delinquencies to EOP total loans: 30-89 days .16 % .17 % .19 % .19 % .24 % Delinquencies to EOP total loans: 90+ days .07 .08 .07 .09 .08 NPLs to EOP portfolio loans .45 .56 .69 .72 .78 NPAs to EOP portfolio loans + OREO + Other NPAs .48 .61 .73 .78 .92 Allowance for credit losses to period-end loans 1.20 1.25 1.36 1.60 1.80 Allowance for credit losses to NPLs 268.9 223.1 197.7 222.0 232.2 Continuing operations Continuing operations 19

 
Period- end loans Average loans Net loan charge- offs Net loan charge-offs (b) / average loans (%) Nonperforming loans Ending allowance Allowance / period-end loans (%) Allowance / NPLs (%) 12/31/21 4Q21 4Q21 4Q21 12/31/21 12/31/21 12/31/21 12/31/21 Commercial and industrial(a) $ 50,525 $ 49,510 $ 10 .08 $ 191 $ 445 0.88% 232.98% Commercial real estate: Commercial Mortgage 14,244 13,671 0 - 44 182 1.28 413.64 Construction 1,996 2,119 0 - - 29 1.45 N/M Commercial lease financing(c) 4,071 3,953 1 .10 4 32 .79 800.00 Real estate – residential mortgage 15,756 15,017 (2) .05 72 95 .60 131.94 Home equity 8,467 8,603 1 .05 135 110 1.30 81.48 Consumer direct loans 5,753 5,509 5 .36 4 105 1.83 N/M Credit cards 972 941 4 1.69 3 61 6.28 N/M Consumer indirect loans 70 74 - - 1 2 2.86 300.00 Continuing total $ 101,854 $ 99,397 $ 19 .08 $ 454 $ 1,06 1 1.04% 233.70% Discontinued operations 567 580 1 .68 4 29 5.11 725.00 Consolidated total $ 102,421 $ 99,977 $ 20 .08% $ 458 $ 1 ,090 1.06% 237.99% Credit Quality by Portfolio Credit Quality $ in millions N/M = Not meaningful (a) Commercial and industrial average balances include $141 million, $137 million, and $129 million of assets from commercial credit cards for the three months ended December 31, 2021, September 30, 2021, and December 31, 2020, respectively. (b) Net loan charge-off amounts are annualized in calculation (c) Commercial lease financing includes receivables held as collateral for a secured borrowing of $16 million, $16 million, and $23 million at December 31, 2021, September 30, 2021, and December 31, 2020, respectively. Principal reductions are based on the cash payments received from these related receivables 20

 
GAAP to Non -GAAP Reconciliation (a) For the three months ended December 31, 2021, September 30, 2021, and December 31, 2020, intangible assets exclude $3 million, $3 million, and $4 million, respectively, of period-end purchased credit card receivables (b) Net of capital surplus (c) For the three months ended December 31, 2021, September 30, 2021, and December 31, 2020, average intangible assets exclude $3 million, $3 million, and $5 million, respectively, of average purchased credit card receivables 21 $ in millions 12/31/2021 9/30/2021 12/31/2020 Tangible common equity to tangible assets at period end Key shareholders' equity (GAAP) 17,423$ 17,510$ 17,981$ Less: Intangible assets (a) 2,820 2,814 2,848 Preferred Stock (b) 1,856 1,856 1,856 Tangible common equity (non-GAAP) 12,747$ 12,840$ 13,277$ Total assets (GAAP) 186,346$ 187,035$ 170,336$ Less: Intangible assets (a) 2,820 2,814 2,848 Tangible assets (non-GAAP) 183,526$ 184,221$ 167,488$ Tangible common equity to tangible assets ratio (non-GAAP) 6.95% 6.97% 7.93% Pre-provision net revenue Net interest income (GAAP) 1,033$ 1,016$ 1,035$ Plus: Taxable-equivalent adjustment 5 9 8 Noninterest income 909 797 802 Less: Noninterest expense 1,170 1,112 1,128 Pre-provision net revenue from continuing operations (non-GAAP) 777$ 710$ 717$ Average tangible common equity Average Key shareholders' equity (GAAP) 17,471$ 17,899$ 17,905$ Less: Intangible assets (average) (c) 2,814 2,823 2,855 Preferred Stock (average) 1,900 1,900 1,900 Average tangible common equity (non-GAAP) 12,757$ 13,176$ 13,150$ Three months ended

 
GAAP to Non -GAAP Reconciliation 22 $ in millions 12/31/2021 9/30/2021 12/31/2020 Return on average tangible common equity from conti nuing operations Net income (loss) from continuing operations attributable to Key common shareholders (GAAP) 601$ 616$ 549$ Average tangible common equity (non-GAAP) 12,757 13,176 13,150 Return on average tangible common equity from continuing operations (non-GAAP) 18.69% 18.55% 16.61% Return on average tangible common equity consolidat ed Net income (loss) attributable to Key common shareholders (GAAP) 603$ 618$ 556$ Average tangible common equity (non-GAAP) 12,757 13,176 13,150 Return on average tangible common equity consolidation (non-GAAP) 18.75% 18.61% 16.82% Cash efficiency ratio Noninterest expense (GAAP) 1,170$ 1,112$ 1,128$ Less: Intangible asset amortization 14 15 15 Adjusted noninterest expense (non-GAAP) 1,156$ 1,097$ 1,113$ Net interest income (GAAP) 1,033$ 1,016$ 1,035$ Plus: Taxable-equivalent adjustment 5 9 8 Noninterest income 909 797 802 Total taxable-equivalent revenue (non-GAAP) 1,947$ 1,822$ 1,845$ Cash efficiency ratio (non-GAAP) 59.4% 60.2% 60.3% Three months ended

 
Exhibit 99.3
Consolidated Balance Sheets
(dollars in millions)
12/31/20219/30/202112/31/2020
Assets
Loans$101,854 $98,609 $101,185 
Loans held for sale 2,729 1,805 1,583 
Securities available for sale45,364 40,594 27,556 
Held-to-maturity securities7,539 8,423 7,595 
Trading account assets701 902 735 
Short-term investments11,010 19,608 16,194 
Other investments639 607 621 
Total earning assets169,836 170,548 155,469 
Allowance for loan and lease losses(1,061)(1,084)(1,626)
Cash and due from banks913 763 1,091 
Premises and equipment681 678 753 
Goodwill2,693 2,673 2,664 
Other intangible assets130 144 188 
Corporate-owned life insurance4,327 4,312 4,286 
Accrued income and other assets8,265 8,404 6,812 
Discontinued assets562 597 699 
Total assets$186,346 $187,035 $170,336 
Liabilities
Deposits in domestic offices:
NOW and money market deposit accounts$89,207 $87,242 $80,427 
Savings deposits7,503 7,259 5,913 
Certificates of deposit ($100,000 or more)1,705 1,890 2,733 
Other time deposits2,153 2,315 3,010 
Total interest-bearing deposits100,568 98,706 92,083 
Noninterest-bearing deposits52,004 53,225 43,199 
Total deposits152,572 151,931 135,282 
Federal funds purchased and securities sold under repurchase agreements 173 228 220 
Bank notes and other short-term borrowings588 767 759 
Accrued expense and other liabilities3,548 3,434 2,385 
Long-term debt12,042 13,165 13,709 
Total liabilities168,923 169,525 152,355 
Equity
Preferred stock1,900 1,900 1,900 
Common shares1,257 1,257 1,257 
Capital surplus6,278 6,141 6,281 
Retained earnings14,553 14,133 12,751 
Treasury stock, at cost(5,979)(5,876)(4,946)
Accumulated other comprehensive income (loss)(586)(45)738 
Key shareholders’ equity17,423 17,510 17,981 
Noncontrolling interests— — — 
Total equity17,423 17,510 17,981 
Total liabilities and equity$186,346 $187,035 $170,336 
Common shares outstanding (000)928,850 930,544 975,773 



Consolidated Statements of Income
(dollars in millions, except per share amounts)
Three months endedTwelve months ended
12/31/20219/30/202112/31/202012/31/202112/31/2020
Interest income
Loans$873 $882 $933 $3,532 $3,866 
Loans held for sale15 13 11 50 69 
Securities available for sale148 135 119 546 484 
Held-to-maturity securities52 43 51 185 222 
Trading account assets5 4 4 19 20 
Short-term investments8 9 4 28 18 
Other investments2 1 3 7 6 
Total interest income1,103 1,087 1,125 4,367 4,685 
Interest expense
Deposits15 15 28 67 347 
Federal funds purchased and securities sold under repurchase agreements— — — — 6 
Bank notes and other short-term borrowings2 2 1 8 12 
Long-term debt53 54 61 221 286 
Total interest expense70 71 90 296 651 
Net interest income1,033 1,016 1,035 4,071 4,034 
Provision for credit losses4 (107)20 (418)1,021 
Net interest income after provision for credit losses1,029 1,123 1,015 4,489 3,013 
Noninterest income
Trust and investment services income135 129 123 530 507 
Investment banking and debt placement fees323 235 243 937 661 
Service charges on deposit accounts90 91 82 337 311 
Operating lease income and other leasing gains37 37 39 148 167 
Corporate services income73 69 63 261 228 
Cards and payments income86 111 97 415 368 
Corporate-owned life insurance income34 33 38 128 139 
Consumer mortgage income25 33 43 131 176 
Commercial mortgage servicing fees48 34 32 160 80 
Other income58 25 42 147 15 
Total noninterest income909 797 802 3,194 2,652 
Noninterest expense
Personnel674 640 661 2,561 2,336 
Net occupancy75 74 75 300 298 
Computer processing73 67 62 284 232 
Business services and professional fees70 56 54 227 196 
Equipment25 25 26 100 100 
Operating lease expense31 30 35 126 138 
Marketing37 32 30 126 97 
Intangible asset amortization14 15 15 58 65 
Other expense171 173 170 647 647 
Total noninterest expense1,170 1,112 1,128 4,429 4,109 
Income (loss) from continuing operations before income taxes768 808 689 3,254 1,556 
Income taxes141 165 114 642 227 
Income (loss) from continuing operations627 643 575 2,612 1,329 
Income (loss) from discontinued operations, net of taxes2 2 7 13 14 
Net income (loss)629 645 582 2,625 1,343 
Less: Net income (loss) attributable to noncontrolling interests— — — — — 
Net income (loss) attributable to Key$629 $645 $582 $2,625 $1,343 
Income (loss) from continuing operations attributable to Key common shareholders$601 $616 $549 $2,506 $1,223 
Net income (loss) attributable to Key common shareholders603 618 556 2,519 1,237 
Per common share
Income (loss) from continuing operations attributable to Key common shareholders$.65 $.65 $.57 $2.6397 $1.26 
Income (loss) from discontinued operations, net of taxes— — .01 .0134 .01 
Net income (loss) attributable to Key common shareholders (a)
.65 .66 .57 2.6531 1.28 
Per common share — assuming dilution
Income (loss) from continuing operations attributable to Key common shareholders$.64 $.65 $.56 $2.62 $1.26 
Income (loss) from discontinued operations, net of taxes— — .01 .0133 .01 
Net income (loss) attributable to Key common shareholders (a)
.64 .65 $.57 2.63 1.27 
Cash dividends declared per common share$.195 $.185 $.185 $.75 $.74 
Weighted-average common shares outstanding (000)922,970 942,446 967,987 947,065 967,783 
Effect of common share options and other stock awards11,758 10,077 8,473 10,349 7,024 
Weighted-average common shares and potential common shares outstanding (000) (b)
934,729 952,523 976,460 957,414 974,807 
(a)Earnings per share may not foot due to rounding.
(b)Assumes conversion of common share options and other stock awards and/or convertible preferred stock, as applicable.



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

SEC Filings