EX-99.2 3 d757476dex992.htm EX-99.2

KeyCorp Second Quarter 2014 Earnings Review July 17, 2014 Beth E. Mooney Chairman and Chief Executive Officer Don Kimble Chief Financial Officer Exhibit 99.2 **** **** **** **** ****

2 FORWARD-LOOKING STATEMENTS AND ADDITIONAL INFORMATION DISCLOSURE This presentation contains forward-looking statements, including statements about our financial condition, results of operations, asset quality trends, capital levels and profitability. Forward-looking statements can often be identified by words such as “outlook,” “goal,” “objective,” “plan,” “expect,” “anticipate,” “intend,” “project,” “believe,” or “estimate.” Forward-looking statements represent management’s current expectations and forecasts regarding future events. If underlying assumptions prove to be inaccurate or unknown risks or uncertainties arise, actual results could vary materially from these projections or expectations. Risks and uncertainties include but are not limited to: (1) deterioration of commercial real estate market fundamentals; (2) declining asset prices; (3) adverse changes in credit quality trends; (4) changes in local, regional and international business, economic or political conditions; (5) the extensive and increasing regulation of the U.S. financial services industry; (6) increasing capital and liquidity standards under applicable regulatory rules; (7) unanticipated changes in our liquidity position, including but not limited to, changes in the cost of liquidity, our ability to enter the financial markets and to secure alternative funding sources; (8) our ability to receive dividends from our subsidiary, KeyBank; (9) downgrades in our credit ratings or those of KeyBank; (10) operational or risk management failures by us or critical third-parties; (11) breaches of security or failures of our technology systems due to technological or other factors and cybersecurity threats; (12) adverse judicial proceedings; (13) the occurrence of natural or man-made disasters or conflicts or terrorist attacks; (14) a reversal of the U.S. economic recovery due to economic, political or other shocks; (15) our ability to anticipate interest rate changes and manage interest rate risk; (16) deterioration of economic conditions in the geographic regions where we operate; (17) the soundness of other financial institutions; (18) our ability to attract and retain talented executives and employees, to effectively sell additional products or services to new or existing customers, and to manage our reputational risks; (19) our ability to timely and effectively implement our strategic initiatives; (20) increased competitive pressure due to industry consolidation; (21) unanticipated adverse effects of acquisitions and dispositions of assets or businesses; and (22) our ability to develop and effectively use the quantitative models we rely upon in our business planning. We provide greater detail regarding these factors in our 2013 Form 10-K and subsequent filings, which are available online at www.key.com/ir and www.sec.gov. Forward-looking statements speak only as of the date they are made and Key does not undertake any obligation to update the forward- looking statements to reflect new information or future events. This presentation also includes certain Non-GAAP financial measures related to “tangible common equity,” “Tier 1 common equity,” “pre-provision net revenue,” and “cash efficiency ratio.” Management believes these ratios may assist investors, analysts and regulators in analyzing Key’s financials. Although Key has procedures in place to ensure that these measures are calculated using the appropriate GAAP or regulatory components, they have limitations as analytical tools and should not be considered in isolation, or as a substitute for analysis of results under GAAP. For more information on these calculations and to view the reconciliations to the most comparable GAAP measures, please refer to the Appendix to this presentation or our most recent earnings press release.

3 Positive operating leverage year-over-year Total average loans up 6% from prior year, driven by CF&A up 13% CF&A loan growth and investment banking and debt placement fees (up 18% year-over-year) reaffirms strength of business model Expenses remain well-controlled, down 3% from prior year Asset quality remains strong, with NCOs below targeted range NPAs down 41% from prior year New business originations are higher quality than overall book Remaining disciplined with structure and relationship focus Strong Risk Management Repurchased $108 million in common shares in 2Q14 Increased quarterly common share dividend by 18% Committed to capital priorities: organic growth, dividends, repurchases, opportunistic growth Positive Operating Leverage Investor Highlights – 2Q14 Execution of strategy and differentiated business model driving results Disciplined Capital Management

Strategic Acquisition: Leading Technology Platform Highlights Expected Benefits Industry-focused firm covering high growth technology sub-verticals Comprehensive platform aligned with Key’s business model - Equity research - Sales and trading - Investment banking Recognized as a leading research and capital markets provider across technology sub-verticals - #1 ranked Technology Equity Sales Coverage for the past 6 years (a) - #2 ranked for Best Sales Professional Support (b) - Top 10 Greatest Knowledge of Industries/ Companies (b) Accelerates growth and impact in the market, consistent with Key’s strategy Adds new expertise and clients while driving synergies across the platform Provides the opportunity to expand new and existing client relationships - Delivers breadth of Key platform to acquired relationships - Capitalizes on convergence of technology across other industry verticals (a) 2014 Greenwich Small / Mid-cap Rankings (b) 2014 Greenwich All U.S. institutions Rankings Underscores Key’s commitment to be the leading corporate and investment bank serving middle market companies 4 Industry Verticals Note: Acquisition subject to regulatory approval and customary closing conditions; expected closing date: end of third quarter 2014

5 Financial Review ********************

6 Financial Highlights TE = Taxable equivalent, EOP = End of Period (a) From continuing operations (b) Year-over-year average balance growth (c) From consolidated operations (d) 6-30-14 ratios are estimated (e) Non-GAAP measure: see Appendix for reconciliation Metrics 2Q14 1Q14 4Q13 3Q13 2Q13 EPS – assuming dilution $ .27 $ .26 $ .26 $ .25 $ .21 Cash efficiency ratio (e) 65.8 % 64.9 % 67.4 % 67.5 % 69.1 % Net interest margin (TE) 2.98 3.00 3.01 3.11 3.13 Return on average total assets 1.14 1.13 1.08 1.12 .95 Total loans and leases 6 % 4 % 3 % 5 % 7 % CF&A loans 13 9 8 11 14 Deposits (excl. foreign deposits) 2 4 8 5 8 Tier 1 common equity (d), (e) 11.3 % 11.3 % 11.2 % 11.2 % 11.2 % Tier 1 risk-based capital (d) 12.1 12.0 12.0 11.9 11.9 Tangible common equity to tangible assets (e) 10.2 10.1 9.8 9.9 10.0 NCOs to average loans .22 % .15 % .27 % .28 % .34 % NPLs to EOP portfolio loans .71 .81 .93 1.01 1.23 Allowance for loan losses to EOP loans 1.46 1.50 1.56 1.62 1.65 Balance Sheet Growth (a), (b) Capital (c) Asset Quality (a) Financial Performance (a)

7 Average total loans up 6% from prior year – Driven by 13% increase in CF&A Total commitments continue to grow with utilization relatively stable High quality new loan originations: consistent with moderate risk profile Remaining disciplined with structure and relationship focus Loan Growth $ in billions Highlights Average Commercial, Financial & Agricultural Loans Average Loans Exit Portfolios (a) Home Equity & Other Total Commercial $ in billions (a) Growth in exit portfolio in 1Q14 reflects movement of international leasing business

8 Improving Deposit Mix Highlights Funding Cost Overall funding cost continues to improve Transaction deposit balances up 4% from 2Q13 Growth from prior year reflects inflows from commercial clients as well as commercial mortgage servicing Total CD maturities and average cost – 2014 Q3: $1.8 billion at .98% – 2014 Q4: $.8 billion at .66% – 2015 and beyond: $3.6 billion at 1.22% Average Deposits (a) $ in billions Note: Transaction deposits include noninterest-bearing, and NOW and MMDA (a) Excludes deposits in foreign office Cost of total deposits (a) Interest-bearing liability cost CDs and other time deposits Savings Noninterest-bearing NOW and MMDA

9 Net Interest Income and Margin TE = Taxable equivalent Continuing Operations Highlights Net Interest Income (TE) & Net Interest Margin (TE) Trend Net interest income down 1% from prior year due to: – Competitive environment and asset repricing offsetting loan growth – 2Q14 leveraged lease termination (-$2 MM impact) Growth from the prior quarter (up 2%) reflects continued loan growth, day count and funding cost improvement Maintaining moderate asset sensitive position – Naturally asset sensitive balance sheet flows: approximately 70% of loans variable rate – High quality investment portfolio with average life of 3.6 years – Flexibility to quickly adjust interest rate risk position NIM Change (bps): vs. 1Q14 Loan yield (.05) Leveraged lease termination (.01) Loan fees .02 CD maturities / repricing .01 Interest rate risk management / swaps .01 Total Change (.02) Net interest income (TE) NIM (TE) $ in millions

10 Noninterest Income TE = Taxable equivalent Continuing Operations Highlights Noninterest Income Noninterest income up 6% from prior year, due to: – Investment banking and debt placement fees up 18% – Gains from leveraged lease termination and principal investing Change from prior quarter (up 5%) reflects: – Investment banking and debt placement fees up 18% – Leveraged lease early termination gain – Seasonal pickup in activity levels • Cards and payments: +13% • Deposit service charges: +5% 2Q14 Noninterest Income Diversity $ in millions (a) Other includes corporate-owned life insurance, principal investing, etc. Leveraged lease termination gains TruPS gains $455 $429

11 Focused Expense Management Noninterest Expense $ in millions Highlights $689 Noninterest Expense Outlook (a) Non-GAAP measure: see Appendix for reconciliation (b) Excludes one-time gains of $54 million related to the redemption of trust preferred securities $711 $2.8 B Cash Efficiency Ratio (a) (b) Expenses down 3% from prior year, benefitting from continuous improvement efforts Increase from prior quarter reflects: Seasonal trends in marketing and personnel Higher level of efficiency charges Focused on improving efficiency and driving into targeted range Y-o-Y: low to mid- single digit % decline FY13 Reported FY14 Outlook Efficiency charges: Pension charges: $15 $37 $16 $22 $10 $ 2 $25 Efficiency and pension charges, as a % of revenue: .8% 1.5% 1.5% 3.6% 3.9% 2.3% 1.0% Cash efficiency ratio, excluding efficiency and pension charges $24 2.3%

Focused Expense Management $2.82 B $117 MM $2.70 B Low to mid- single digit decline year- over-year Continued cost savings enable investments and offset normal expense growth (4) % – (6) % 1 % – 2.5 % 1 % - 2% (a) Operating cost increase includes inflationary adjustments, annual merit increases, etc. 2 % – 2.5 % 12 Note: Percentage ranges based upon 2014 expense plans and calculated from 2013 reported NIE

Improving Efficiency Cash Efficiency Ratio (a) Driving progress toward the low end of our targeted range Rising interest rates present an opportunity for additional improvement, with long-term goal of moving below targeted range (a) Non-GAAP measure: see Appendix for reconciliation 13 Current Target: 60% - 65%

14 Nonperforming Assets Net Charge-offs & Provision for Loan and Lease Losses NPLs NPLs to period-end loans NCOs Provision for loan and lease losses NCOs to average loans $ in millions $ in millions NPLs held for sale, OREO & other NPAs Continued Improvement in Asset Quality Highlights Net loan charge-offs decreased 33% from 2Q13 to $30 MM, or 22 bps of average loans Total gross charge-offs down 24% from 2Q13 and down 2% from 1Q14 Commercial loan recoveries exceeded gross charge-offs by $3 MM in 2Q14 Net charge-offs expected to continue below the targeted range for the remainder of the year Allowance for Loan and Lease Losses Allowance for loan and lease losses to NPLs Allowance for loan and lease losses $ in millions $693 $410

15 Disciplined capital management Continuing to invest in businesses Increased quarterly common share dividend by 18% Repurchased $108 MM in common shares Tier 1 Common Equity (a), (b) Tangible Common Equity to Tangible Assets (a) Strong Capital Highlights Book Value per Share (a) Non-GAAP measure: see Appendix for reconciliations (b) 6-30-14 ratio is estimated

2014 Outlook and Expectations Loans • Mid-single digit average balance growth Net Interest Income • Relatively stable from 2013, with slight downward pressure from competitive environment Noninterest Income • Low single-digit growth compared to prior year Expense • Low to mid-single digit percentage decline from 2013 Efficiency / Productivity • Positive operating leverage Asset Quality • Net charge-offs to average loans expected to continue below targeted range of 40 – 60 bps for the remainder of the year Capital • Disciplined execution of 2014 capital plan, including dividends and share repurchases 16 Guidance ranges: relatively stable: +/- 2%; low single-digit: <5%; mid-single digit: 4% - 6%

17 Appendix *****************************

Progress on Targets for Success Focus areas Metrics (a) 2Q14 1Q14 Targets Improving balance sheet efficiency Loan to deposit ratio (b) 87% 88% 90-100% Maintaining moderate risk profile NCOs to average loans .22% .15% 40-60 bps Provision to average loans .07% .04% Growing high quality, diverse revenue streams Net interest margin 2.98% 3.00% >3.50% Noninterest income to total revenue 44% 43% >40% Generating positive operating leverage Cash efficiency ratio (c) 66% 65% 60-65% Strengthening returns with disciplined capital management Return on average assets 1.14% 1.13% 1.00-1.25% (a) Continuing operations, unless otherwise noted (b) Represents period-end consolidated total loans and loans held for sale (excluding education loans in the securitization trusts) divided by period-end consolidated total deposits (excluding deposits in foreign office) (c) Excludes intangible asset amortization; non-GAAP measure: see Appendix for reconciliation 18

Supporting business activities with technology development Driving productivity through improved talent management Driving Positive Operating Leverage Revenue Growth Expense Savings Community Bank Corporate Bank Improving sales productivity with existing and new bankers Launched new product: Hassle-Free Enhancing online and mobile channels Optimizing branch channel Driving greater efficiencies through back and middle-office processes Enterprise Adding senior bankers with industry expertise and relationships Strengthening commercial payment product capabilities Strategic investment in technology vertical Exiting international leasing originations and reducing related cost structure Variablizing cost through utilization of third- party partners Rationalization of fixed income trading platform Improving operational effectiveness (Lean Six Sigma, variablizing costs) Reducing occupancy costs Right-sizing support activities 19

20 Average Total Investment Securities Highlights Average AFS securities $ in billions High Quality Investment Portfolio Portfolio composed of Agency-backed CMOs: Fannie, Freddie & GNMA – No private label MBS or financial paper Currently reinvesting cash flows into GNMA securities, for Basel III liquidity (LCR) – 31% of total portfolio was GNMA at 6/30/14 Securities cash flows of $.9 billion in 2Q14 and $.8 billion in 1Q14 Average portfolio life at 6/30/14 of 3.6 years, unchanged from 3/31/14 Securities to Total Assets (b) (a) Yield is calculated on the basis of amortized cost (b) Includes end of period held-to-maturity and available-for-sale securities Average yield (a) Average HTM securities $17.4 2.33% $17.4

21 Asset Quality Trends Quarterly Change in Criticized Outstandings (a) Delinquencies to Period-end Total Loans (a) Loan and lease outstandings (b) From continuing operations 30 – 89 days delinquent 90+ days delinquent Metric (b) 2Q14 1Q14 4Q13 3Q13 2Q13 Delinquencies to EOP total loans: 30-89 days .49 % .48 % .58 % .54 % .47 % Delinquencies to EOP total loans: 90+ days .15 .16 .13 .17 .15 NPLs to EOP portfolio loans .71 .81 .93 1.01 1.23 NPAs to EOP portfolio loans + OREO + Other NPAs .74 .85 .97 1.08 1.30 Allowance for loan losses to period-end loans 1.46 1.50 1.56 1.62 1.65 Allowance for loan losses to NPLs 205.6 185.7 166.9 160.4 134.4 Continuing Operations Continuing Operations

Period- end loans Average loans Net loan charge-offs Net loan charge-offs (b) / average loans (%) Nonperforming loans (c) Ending allowance (d) Allowance / period-end loans (d) (%) Allowance / NPLs (%) 6/30/14 2Q14 2Q14 2Q14 6/30/14 6/30/14 6/30/14 6/30/14 Commercial, financial and agricultural (a) $ 26,327 $ 26,444 - - $ 37 $ 373 1.42 N/M Commercial real estate: Commercial Mortgage 7,946 7,880 - - 38 159 2.00 418.42 Construction 1,047 1,049 $ (1) (.38) 9 34 3.25 377.78 Commercial lease financing 4,241 4,257 (2) (.19) 15 60 1.41 400.00 Real estate – residential mortgage 2,189 2,189 1 .18 89 25 1.14 28.09 Home equity 10,679 10,627 10 .38 189 86 .81 45.50 Credit cards 718 702 11 6.29 1 30 4.18 N/M Consumer other – Key Community Bank 1,514 1,479 7 1.90 2 24 1.59 N/M Consumer other – Exit Portfolio 939 984 4 1.63 16 23 2.45 143.75 Continuing total (e) $ 55,600 $ 55,611 $ 30 .22 $ 396 $ 814 1.46 205.56 Discontinued operations 4,162 4,273 7 1.16 19 32 1.31 168.42 Consolidated total $ 59,762 $ 59,884 $ 37 .26 $ 415 $ 846 1.46 203.86 Credit Quality by Portfolio Credit Quality $ in millions 22 (a) 6-30-14 ending loan balances include $94 million of commercial credit card balances; 6-30-14 average loan balances include $95 million of assets from commercial credit cards (b) Net loan charge-off amounts are annualized in calculation. NCO ratios for discontinued operations and consolidated Key exclude education loans in the securitization trusts since valued at fair-market value (c) 6-30-14 NPL amount excludes $15 million of purchased credit impaired loans (d) 6-30-14 allowance by portfolio is estimated. Allowance/period loans ratios for discontinued operations and consolidated Key exclude education loans in the securitization trusts since valued at fair-market value (e) 6-30-14 ending loan balances include purchased loans of $151 million, of which $15 million were purchased credit impaired N/M = Not meaningful

(a) Average LTVs are at origination. Current average LTVs for Community Bank total home equity loans and lines is approximately 71%, which compares to 71% at the end of the first quarter of 2014. Home Equity Portfolio – 6/30/14 $ in millions, except average loan size Home Equity Portfolio Highlights High quality portfolio Community bank loans and lines: 97% of total portfolio; branch- originated – 59% first lien position – Average FICO score of 765 – Average LTV at origination: 71% $4.0 billion of the total portfolio are fixed rate loans that require principal and interest payments; $6.7 billion are lines $1.5 billion in lines outstanding (14% of the total portfolio) come to end of draw period in the next four years – Proactive communication and client outreach initiated near end of draw period 23

Balance Outstanding Change Net Loan Charge-offs Balance on Nonperforming Status 6-30-14 3-31-14 6-30-14 vs. 3-31-14 2Q14 (c) 1Q14 (c) 6-30-14 3-31-14 Residential properties – homebuilder $ 19 $ 20 $ (1) - $ (1) $ 7 $ 7 Marine and RV floor plan 23 23 - - - 6 6 Commercial lease financing (a) 1,154 1,381 (227) $ (5) (2) 3 3 Total commercial loans 1,196 1,424 (228) (5) (3) 16 16 Home equity – Other 300 315 (15) 1 2 11 11 Marine 888 965 (77) 5 4 15 15 RV and other consumer 61 66 (5) (1) 1 1 1 Total consumer loans 1,249 1,346 (97) $ 5 7 27 27 Total exit loans in loan portfolio $ 2,445 $ 2,770 $ (325) - $ 4 $ 43 $ 43 Discontinued operations – education lending business (not included in exit loans above) (b) $ 4,162 $ 4,354 $ (192) $ 7 $ 9 $ 19 $ 20 Average balances, $ in millions (a) Includes (1) the business aviation, commercial vehicle, office products, construction and industrial leases; (2) Canadian lease financing portfolios; (3) European lease financing portfolios; and (4) all remaining balances related to lease in, lease out; sale in, lease out; service contract leases; and qualified technological equipment leases. (b) Includes loans in Key’s consolidated education loan securitization trusts (c) Credit amounts indicate recoveries exceeded charge-offs $ in millions Exit Loan Portfolio 1Q14 growth in exit portfolio reflects movement of international leasing business Exit Loan Portfolio 24

Three months ended 6-30-14 3-31-14 12-31-13 9-30-13 6-30-13 Tangible common equity to tangible assets at period end Key shareholders’ equity (GAAP) $ 10,504 $ 10,403 $ 10,303 $ 10,206 $ 10,229 Less: Intangible assets (a) 1,008 1,012 1,014 1,017 1,021 Preferred Stock, Series A (b) 282 282 282 282 282 Tangible common equity (non-GAAP) $ 9,214 $ 9,109 $ 9,007 $ 8,907 $ 8,926 Total assets (GAAP) $ 91,798 $ 90,802 $ 92,934 $ 90,708 $ 90,639 Less: Intangible assets (a) 1,008 1,012 1,014 1,017 1,021 Tangible assets (non-GAAP) $ 90,790 $ 89,790 $ 91,920 $ 89,691 $ 89,618 Tangible common equity to tangible assets ratio (non-GAAP) 10.15 % 10.14 % 9.80 % 9.93 % 9.96 % Tier 1 common equity at period end Key shareholders’ equity (GAAP) $ 10,504 $ 10,403 $ 10,303 $ 10,206 $ 10,229 Qualifying capital securities 339 339 339 340 339 Less: Goodwill 979 979 979 979 979 Accumulated other comprehensive income (loss) (c) (325) (367) (394) (409) (359) Other assets (d) 81 84 89 96 101 Total Tier 1 capital (regulatory) 10,108 10,046 9,968 9,880 9,847 Less: Qualifying capital securities 339 339 339 340 339 Preferred Stock, Series A (b) 282 282 282 282 282 Total Tier 1 common equity (non-GAAP) $ 9,487 $ 9,425 $ 9,347 $ 9,258 $ 9,226 Net risk-weighted assets (regulatory) (e) $ 83,729 $ 83,637 $ 83,328 $ 82,913 $ 82,528 Tier 1 common equity ratio (non-GAAP) (e) 11.33 % 11.27 % 11.22 % 11.17 % 11.18 % Pre-provision net revenue Net interest income (GAAP) $ 573 $ 563 $ 583 $ 578 $ 581 Plus: Taxable-equivalent adjustment 6 6 6 6 5 Noninterest income (GAAP) 455 435 453 459 429 Less: Noninterest expense (GAAP) 689 662 712 716 711 Pre-provision net revenue from continuing operations (non-GAAP) $ 345 $ 342 $ 330 $ 327 $ 304 GAAP to Non-GAAP Reconciliation $ in millions 25 a) Three months ended June 30, 2014, March 31, 2014, December 31, 2013, September 30, 2013, and June 30, 2013, exclude $79 million, $84 million, $92 million, $99 million, and $107 million of period-end purchased credit card receivable intangible assets, respectively b) Net of capital surplus for the three months ended June 30, 2014, March 31, 2014, December 31, 2013, September 30, 2013, and June 30, 2013 c) Includes net unrealized gains or losses on securities available for sale (except for net unrealized losses on marketable equity securities), net gains or losses on cash flow hedges, and amounts resulting from the application of the applicable accounting guidance for defined benefit and other postretirement plans d) Other assets deducted from Tier 1 capital and net risk-weighted assets consist of disallowed intangible assets (excluding goodwill) and deductible portions of nonfinancial equity investments. There were no disallowed deferred tax assets at June 30, 2014, March 31, 2014, December 31, 2013, September 30, 2013, and June 30, 2013 e) 6-30-14 amount is estimated

Three months ended 6-30-14 3-31-14 12-31-13 9-30-13 6-30-13 Average tangible common equity Average Key shareholders’ equity (GAAP) $ 10,459 $ 10,371 $ 10,272 $ 10,237 $ 10,314 Less: Intangible assets (average) (a) 1,010 1,013 1,016 1,019 1,023 Preferred Stock, Series A (average) 291 291 291 291 291 Average tangible common equity (non-GAAP) $ 9,158 $ 9,067 $ 8,965 $ 8,927 $ 9,000 Return on average tangible common equity from continuing operations Net income (loss) from continuing operations attributable to Key common shareholders (GAAP) $ 242 $ 232 $ 229 $ 229 $ 193 Average tangible common equity (non-GAAP) 9,158 9,067 8,965 8,927 9,000 Return on average tangible common equity from continuing operations (non-GAAP) 10.60 % 10.38 % 10.13 % 10.18 % 8.60 % Return on average tangible common equity consolidated Net income (loss) attributable to Key common shareholders (GAAP) $ 214 $ 236 $ 224 $ 266 $ 198 Average tangible common equity (non-GAAP) 9,158 9,067 8,965 8,927 9,000 Return on average tangible common equity consolidated (non-GAAP) 9.37 % 10.56 % 9.91 % 11.82 % 8.82 % Cash efficiency ratio Noninterest expense (GAAP) $ 689 $ 662 $ 712 $ 716 $ 711 Less: Intangible asset amortization (GAAP) 9 10 10 12 10 Adjusted noninterest expense (non-GAAP) $ 680 $ 652 $ 702 $ 704 $ 701 Net interest income (GAAP) $ 573 $ 563 $ 583 $ 578 $ 581 Plus: Taxable-equivalent adjustment 6 6 6 6 5 Noninterest income (GAAP) 455 435 453 459 429 Total taxable-equivalent revenue (non-GAAP) $ 1,034 $ 1,004 $ 1,042 $ 1,043 $ 1,015 Cash efficiency ratio (non-GAAP) 65.8 % 64.9 % 67.4 % 67.5 % 69.1 % GAAP to Non-GAAP Reconciliation (continued) $ in millions (a) Three months ended June 30, 2014, March 31, 2014, December 31, 2013, September 30, 2013, and June 30, 2013 exclude $82 million, $89 million, $96 million, $103 million, and $110 million of average purchased credit card receivable intangible assets, respectively 26

KeyCorp & Subsidiaries $ in billions Quarter ended June 30, 2014 Tier 1 common equity under current regulatory rules $ 9.5 Adjustments from current regulatory rules to the Regulatory Capital Rules: Deferred tax assets and PCCRs (b) (.1) Common Equity Tier 1 anticipated under the Regulatory Capital Rules (c) $ 9.4 Total risk-weighted assets under current regulatory rules $ 83.7 Adjustments from current regulatory rules to the Regulatory Capital Rules: Loan commitments <1 year 1.0 Past Due Loans .2 Mortgage servicing assets (d) .5 Deferred tax assets (d) .2 Other 1.5 Total risk-weighted assets anticipated under the Regulatory Capital Rules $ 87.1 Common Equity Tier 1 ratio under the Regulatory Capital Rules 10.8 % (a) Common equity Tier 1 capital is a non-generally accepted accounting principle (GAAP) financial measure that is used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies. Management reviews Common Equity Tier 1 along with other measures of capital as part of its financial analyses (b) Includes the deferred tax asset subject to future taxable income for realization, primarily tax credit carryforwards, as well as the deductible portion of purchased credit card receivables (c) The anticipated amount of regulatory capital and risk-weighted assets is based upon the federal banking agencies’ Regulatory Capital Rules (as fully phased-in on January 1, 2019); Key is subject to the Regulatory Capital Rules under the “standardized approach” (d) Item is included in the 10%/15% exceptions bucket calculation and is risk-weighted at 250% Table may not foot due to rounding 27 Common Equity Tier 1 Under the Regulatory Capital Rules (estimated) (a)