EX-99.2 3 d803929dex992.htm EX-99.2

KeyCorp Third Quarter 2014 Earnings Review October 15, 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,” “assume,” “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 and to page 99 of our 2013 Form 10-K.

3 Core revenue trends stable - Lower gains from principal investing and leveraged lease terminations Total average loans up 5% from prior year - Linked quarter average impacted by seasonality, capital markets and strategic exits Positive trends in several fee-based businesses Expenses well-controlled - Down from prior year and previous quarter (excl. Pacific Crest and pension charges) Asset quality remains strong, with NCOs below targeted range NPAs down 28% from prior year New business originations are higher quality than overall book Remaining disciplined with structure and relationship focus Strong Risk Management Committed to capital priorities: organic growth, dividends, repurchases, opportunistic growth Continuing to invest in and grow our businesses - Completed acquisition of Pacific Crest Securities, within 60 days of announcement Repurchased $119 million in common shares in 3Q14 Positive Operating Leverage Investor Highlights – 3Q14 Disciplined Capital Management

4 Financial Review

5 Financial Highlights TE = Taxable equivalent, EOP = End of Period (a) From continuing operations (b) Year-over-year average balance growth (c) From consolidated operations (d) 9-30-14 ratios are estimated (e) Non-GAAP measure: see Appendix for reconciliation EPS – assuming dilution $ .23 $ .27 $ .26 $ .26 $ .25 Cash efficiency ratio (e) 69.5 % 65.8 % 64.9 % 67.4 % 67.5 % excl. efficiency and pension charges 66.0 63.4 63.9 65.1 63.6 Net interest margin (TE) 2.96 2.98 3.00 3.01 3.11 Return on average total assets .92 1.14 1.13 1.08 1.12 Total loans and leases 5 % 6 % 4 % 3 % 5 % CF&A loans 11 13 9 8 11 Deposits (excl. foreign deposits) 4 2 4 8 5 Tier 1 common equity (d), (e) 11.3 % 11.3 % 11.3 % 11.2 % 11.2 % Tier 1 risk-based capital (d) 12.0 12.0 12.0 12.0 11.9 Tangible common equity to tangible assets (e) 10.3 10.2 10.1 9.8 9.9 NCOs to average loans .22 % .22 % .15 % .27 % .28 % NPLs to EOP portfolio loans .71 .71 .81 .93 1.01 Allowance for loan losses to EOP loans 1.43 1.46 1.50 1.56 1.62 Balance Sheet Growth (a), (b) Capital (c) Asset Quality (a) Financial Performance (a)

6 Average total loans up 5% from prior year, driven by CF&A up 11% Linked quarter average balances impacted by seasonality, capital markets and strategic exits Total commitments continue to grow with utilization relatively stable High quality new loan originations: consistent with moderate risk profile Loan Growth $ in billions Highlights Average Commercial, Financial & Agricultural Loans Average Loans Exit Portfolios Home Equity & Other Total Commercial $ in billions $55.8 $53.3

7 Improving Deposit Mix Highlights Funding Cost Funding cost continues to improve Transaction deposit balances up 6% from 3Q13 Growth from prior year reflects inflows from commercial clients as well as commercial mortgage servicing Total CD maturities and average cost – 2014 Q4: $1.5 billion at .46% – 2015: $2.3 billion at .73% – 2016 and beyond: $2.1 billion at 1.47% Average Deposits (a) $ in billions Note: Transaction deposits include noninterest-bearing, as well as NOW and MMDA (a) Excludes deposits in foreign office Cost of total deposits (a) Interest-bearing liability cost CDs and other time deposits Savings Noninterest-bearing NOW and MMDA $67.7 $65.4

8 Net Interest Income and Margin TE = Taxable equivalent Highlights Net Interest Income & Net Interest Margin Trend (TE) Net interest income down 1% from prior year, primarily due to lower asset yields Modest growth from prior quarter reflects asset growth, higher loan fees, improved funding cost and more days in the quarter, which all offset lower asset yields 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. 2Q14 Earnings asset mix / higher levels of liquidity (.02) Loan yield (.02) CD maturities / repricing .02 Total Change (.02) Net interest income (TE) NIM (TE) $ in millions; continuing operations

9 Noninterest Income TE = Taxable equivalent Highlights Noninterest Income Noninterest income down $42 MM from prior year: – Gains from leveraged lease termination and principal investing $31 MM higher in 3Q13 – Special servicing fees $6 MM lower – Posting order change in 4Q13 reduced service charges by ~$5 MM vs. one year ago Positive trends in several fee-based businesses – Trust and investment services and deposit service charges up vs. 2Q14 Change from prior quarter (down $38 MM) reflects: – Gains from leveraged lease termination and principal investing $35 MM higher in 2Q14 3Q14 Noninterest Income Diversity $ in millions; continuing operations (a) Other includes corporate-owned life insurance, principal investing, etc. Leveraged lease termination gains $417 $459 (a)

10 Focused Expense Management Noninterest Expense $ in millions Highlights 3Q14 Expense Detail Expenses down 2% from prior year, benefitting from continuous improvement efforts Increase from prior quarter reflects: – Pension settlement charge and expenses related to Pacific Crest Securities FY 2014 expenses expected to be down a low-to- mid single digit percentage from 2013 Focused on improving efficiency by growing revenue and continuing to control expenses Efficiency charges: Pension charges: $15 $37 $16 $22 $10 $ 2 $25 $24 $ in millions $704 Efficiency charges $ 15 All remaining expense 663 $ 678 2H14 expense guidance: $680 - $690 / quarter $15 $20 Pension settlement Efficiency charges All remaining expense Pacific Crest $716 $689 Not included in guidance: Pacific Crest $ 6 Pension settlement 20 $ 26 (a) Non-GAAP measure: see Appendix for reconciliation (b) Excludes one-time gains of $54 million related to the redemption of trust preferred securities Cash Efficiency Ratio (a) Efficiency and pension charges, as a % of revenue: 1.5% 1.5% 3.6% 3.9% 2.3% 1.0% Cash efficiency ratio, excluding efficiency and pension charges 2.3% 3.5% (b) .8% $704 $716

11 Efficiency Ratio: Driving to 60% and Below Business plans and macroeconomic environment provide path to an efficiency ratio below 60% Cash Efficiency Ratio (a) Outlook (a) Non-GAAP measure: see Appendix for reconciliation (b) Assumes implied forward curve 2-3 year outlook: 60% Long-term, committed to moving below 60% (b)

12 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 16% from 3Q13 to $31 MM, or 22 bps of average loans Total gross charge-offs down 37% from 3Q13 and down 13% from 2Q14 Nonperforming assets down 28% from prior year 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 $579 $418

13 Disciplined capital management – Continuing to invest in and grow businesses – Repurchased $119 MM in common shares Ratios reflect the acquisition of Pacific Crest Securities and the sale of residual interests in education loan securitization trusts Tangible Common Equity to Tangible Assets (a) Strong Capital Highlights Book Value per Share (a) Non-GAAP measure: see Appendix for reconciliations (b) 9-30-14 ratio is estimated Tier 1 Common Equity (a), (b)

2014 Outlook and Expectations Average Loans • LQA: mid-single digit growth, driven by commercial loans • Mid-single digit growth vs. FY 2013 Net Interest Income • Relatively stable with 3Q14 • Relatively stable from 2013, with slight downward pressure from competitive environment Noninterest Income • Low double-digit percentage growth from 3Q14, supported by stronger market-related revenue and a full quarter of Pacific Crest • Low single-digit growth compared to prior year Expense • Relatively stable with 3Q14 reported, including Pacific Crest, pension, seasonality and efficiency charges • Low to mid-single digit percentage decline from 2013 Efficiency / Productivity • Positive operating leverage • Positive operating leverage Asset Quality • Continued strong credit quality trends, consistent with 3Q14 levels • Net charge-offs to average loans below targeted range of 40 – 60 bps Capital • Continued execution of capital plan • Disciplined execution of 2014 capital plan, including dividends and share repurchases 14 Guidance ranges: relatively stable: +/- 2%; low single-digit: <5%; mid-single digit: 4% - 6%; low double-digit: 10% - 13% 4Q14 FY 2014

15 Appendix

Progress on Targets for Success (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 for periods prior to third quarter of 2014) divided by period-end consolidated total deposits (excluding deposits in foreign office) (c) Excludes intangible asset amortization; non-GAAP measure: see Appendix for reconciliation 16 Balance Sheet Efficiency Moderate Risk Profile High Quality, Diverse Revenue Streams Positive Operating Leverage Disciplined Capital Management Metrics (a) 3Q14 2Q14 Targets Loan to deposit ratio (b) NCOs to average loans Provision to average loans Net interest margin Noninterest income to total revenue Cash efficiency ratio (c) Return on average assets 87% 87% .22% .22% 69.5% 65.8% .92% 1.14% .15% .07% 2.96% 2.98% 42% 44% 90% -100% 40 - 60 bps LT: >3.50% LT: <60% 1.00% -1.25% >40%

• Supporting businesses with technology development • Driving talent management to improve productivity Focused on Driving Positive Operating Leverage Revenue Growth Expense Savings Community Bank Corporate Bank • Improving sales productivity • Strengthening product offering: Hassle-Free • Enhancing online and mobile channels • Optimizing branch channel • Driving greater efficiencies through back and middle-office processes Enterprise • Adding senior bankers: existing industry expertise and relationships • Strengthening commercial payment product capabilities • Added technology vertical: completed Pacific Crest acquisition • Exiting international leasing originations and reducing related cost structure • Variablizing cost: 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 17 Executing action plans across our organization Driving consumer sales per FTE per day: up >30% from prior year Aggressive campaign to add bankers: relationship managers up ~15% from prior year (a) Data as of 3Q14 unless otherwise noted (a) Includes impact of the acquisition of Pacific Crest Securities Reducing occupancy: plans to remove >15% of corporate square footage by 2016

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) (a) Operating cost increase includes inflationary adjustments, annual merit increases, etc. 2 % – 2.5 % 18 Note: Percentage ranges based upon 2014 expense plans and calculated from 2013 reported NIE

19 Average Total Investment Securities Highlights Average AFS securities $ in billions High Quality Investment Portfolio Portfolio composed primarily of GNMA and GSE- backed MBS and CMOs – No private label MBS or financial paper Currently reinvesting cash flows into GNMA securities in preparation for upcoming regulatory liquidity requirements – 35% of total portfolio was GNMA at 9/30/14 Securities cash flows of $.9 billion in both 3Q14 and 2Q14 Average portfolio life at 9/30/14 of 3.6 years, unchanged from 6/30/14 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 $17.7 2.23% $17.0

Interest Rate Risk Management Naturally Asset Sensitive Balance Sheet Actively Managing Rate Risk • High quality • Fixed rate agency MBS and CMOs • Average maturity: 3.6 years • GNMAs total 35% of total portfolio • Reinvesting cash flows into GNMAs $9 $15 $5 $5 Size of swap portfolio Modeled asset sensitivity ~3% 0% 7% $5 Flexibility to Adjust Rate Sensitivity with Swaps Loan Portfolio Variable: 69% Fixed: 31% Deposits Flexibility to adjust rate sensitivity for changes in balance sheet growth/mix as well as interest rate outlook Debt hedges A/LM hedges Investment Portfolio Noninterest- bearing: 37% Interest- bearing, non- time: 54% CDs: 9% • Maintaining moderate asset sensitive position of ~3% (a) - Assumes 200 basis point increase in short-term rates over a 12-month period • Utilize swaps for debt hedging and asset liability management - Fairly even pace of A/LM swap maturities 3Q14 Swaps ($ in B) 9/30/14 Notional Amt. Wtd. Avg. Maturity (Yrs.) Receive Rate Pay Rate A/L Management $ 9.3 1.8 .8% .2% Debt 4.5 4.0 2.5 .2 $ 13.8 1.3% .2% 3Q14 $17 B AFS: $12 B HTM: $5 B Balance sheet has relatively short duration and is more impacted by the short-end of the curve $14 B 20 Actively managing a naturally asset sensitive balance sheet (a) Preliminary estimate

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) 3Q14 2Q14 1Q14 4Q13 3Q13 Delinquencies to EOP total loans: 30-89 days .61 % .49 % .48 % .58 % .54 % Delinquencies to EOP total loans: 90+ days .13 .15 .16 .13 .17 NPLs to EOP portfolio loans .71 .71 .81 .93 1.01 NPAs to EOP portfolio loans + OREO + Other NPAs .74 .74 .85 .97 1.08 Allowance for loan losses to period-end loans 1.43 1.46 1.50 1.56 1.62 Allowance for loan losses to NPLs 200.5 205.6 185.7 166.9 160.4 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 (%) 9/30/14 3Q14 3Q14 3Q14 9/30/14 9/30/14 9/30/14 9/30/14 Commercial, financial and agricultural (a) $ 26,683 $ 26,456 $ 6 .09 $ 47 $ 385 1.44 819.15 Commercial real estate: Commercial Mortgage 8,276 8,142 (2) (.10) 41 159 1.92 387.80 Construction 1,036 1,030 1 .39 14 28 2.70 200.00 Commercial lease financing 4,135 4,145 (1) (.10) 14 55 1.33 392.86 Real estate – residential mortgage 2,213 2,204 2 .36 81 22 .99 27.16 Home equity 10,663 10,658 7 .26 184 78 .73 42.39 Credit cards 724 716 9 4.99 1 32 4.42 N/M Consumer other – Key Community Bank 1,546 1,534 6 1.55 2 24 1.55 N/M Consumer other – Exit Portfolio 879 911 3 1.31 17 21 2.39 123.53 Continuing total (e) $ 56,155 $ 55,796 $ 31 .22 $ 401 $ 804 1.43 200.50 Discontinued operations 2,375 4,080 7 1.15 9 31 1.31 344.44 Consolidated total $ 58,530 $ 59,876 $ 38 .26 $ 410 $ 836 1.43 203.90 Credit Quality by Portfolio Credit Quality $ in millions 22 (a) 9-30-14 ending loan balances include $90 million of commercial credit card balances; 9-30-14 average loan balances include $92 million of assets from commercial credit cards (b) Net loan charge-off amounts are annualized in calculation (c) 9-30-14 NPL amount excludes $14 million of purchased credit impaired loans (d) 9-30-14 allowance by portfolio is estimated (e) 9-30-14 ending loan balances include purchased loans of $143 million, of which $14 million were purchased credit impaired N/M = Not meaningful

Vintage (% of Loans) Loan Balances Average Loan Size ($) Average FICO Average LTV (a) % of Loans LTV>90% 2012 and later 2011 2010 2009 2008 and prior Loans and lines First lien $ 6,180 $ 65,817 772 67 % .6 % 50 % 5% 3% 3% 39 % Second lien 4,200 54,759 766 76 3.7 33 5 3 4 55 Community Bank $ 10,380 60,443 770 70 1.8 43 5 3 4 45 Exit portfolio 283 17,253 729 80 31.6 1 - - - 99 Total home equity portfolio $ 10,663 Nonaccrual loans and lines First lien $ 94 $ 61,645 720 73 % 1.0% 5 % 4% 3% 5% 83 % Second lien 81 48,222 711 80 2.1 2 2 2 4 90 Community Bank $ 175 54,590 716 77 1.5 4 3 2 5 86 Exit portfolio 10 23,844 700 77 29.2 - - - - 100 Total home equity nonaccruals $ 185 Third quarter net charge-offs (NCOs) Community Bank $ 6 3 % 2% 4% 2% 89 % % of average loans .23 % Exit Portfolio $ 1 - - - - 100 % of average loans 1.37 % (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 second quarter of 2014. Home Equity Portfolio – 9/30/14 $ in millions, except average loan size Home Equity Portfolio Highlights High quality portfolio Community bank loans and lines: 97% of total portfolio; branch- originated – 60% first lien position – Average FICO score of 770 – Average LTV at origination: 70% $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 9-30-14 6-30-14 9-30-14 vs. 6-30-14 3Q14 (c) 2Q14 (c) 9-30-14 6-30-14 Residential properties – homebuilder $ 11 $ 19 $ (8) $ 1 - $ 10 $ 7 Marine and RV floor plan 7 23 (16) - - 5 6 Commercial lease financing (a) 1,046 1,154 (108) (1) $ (5) 1 3 Total commercial loans 1,064 1,196 (132) - (5) 16 16 Home equity – Other 283 300 (17) 1 1 10 11 Marine 828 888 (60) 2 5 16 15 RV and other consumer 57 61 (4) 1 (1) 1 1 Total consumer loans 1,168 1,249 (81) 4 $ 5 27 27 Total exit loans in loan portfolio $ 2,232 $ 2,445 $ (213) $ 4 - $ 43 $ 43 Discontinued operations – education lending business (not included in exit loans above) (b) $ 2,375 $ 4,162 $ (1,787) $ 7 $ 7 $ 9 $ 19 $ in millions; average balances (a) Includes (1) the business aviation, commercial vehicle, office products, construction and industrial leases; (2) Canadian lease financing portfolios; (3) European lease financing portfolios; and (4) all remaining balances related to lease in, lease out; sale in, lease out; service contract leases; and qualified technological equipment leases. (b) June 30, 2014 balance includes loans in Key’s consolidated education loan securitization trusts (c) Credit amounts indicate recoveries exceeded charge-offs $ in millions Exit Loan Portfolio Exit Loan Portfolio 24

Three months ended 9-30-14 6-30-14 3-31-14 12-31-13 9-30-13 Tangible common equity to tangible assets at period end Key shareholders’ equity (GAAP) $ 10,509 $ 10,504 $ 10,403 $ 10,303 $ 10,206 Less: Intangible assets (a) 1,105 1,008 1,012 1,014 1,017 Preferred Stock, Series A (b) 282 282 282 282 282 Tangible common equity (non-GAAP) $ 9,122 $ 9,214 $ 9,109 $ 9,007 $ 8,907 Total assets (GAAP) $ 89,770 $ 91,798 $ 90,802 $ 92,934 $ 90,708 Less: Intangible assets (a) 1,105 1,008 1,012 1,014 1,017 Tangible assets (non-GAAP) $ 88,665 $ 90,790 $ 89,790 $ 91,920 $ 89,691 Tangible common equity to tangible assets ratio (non-GAAP) 10.29 % 10.15 % 10.14 % 9.80 % 9.93 % Tier 1 common equity at period end Key shareholders’ equity (GAAP) $ 10,509 $ 10,504 $ 10,403 $ 10,303 $ 10,206 Qualifying capital securities 340 339 339 339 340 Less: Goodwill 1,051 979 979 979 979 Accumulated other comprehensive income (loss) (c) (366) (328) (367) (394) (409) Other assets (d) 110 86 84 89 96 Total Tier 1 capital (regulatory) 10,054 10,106 10,046 9,968 9,880 Less: Qualifying capital securities 340 339 339 339 340 Preferred Stock, Series A (b) 282 282 282 282 282 Total Tier 1 common equity (non-GAAP) $ 9,432 $ 9,485 $ 9,425 $ 9,347 $ 9,258 Net risk-weighted assets (regulatory) (e) $ 83,787 $ 84,287 $ 83,637 $ 83,328 $ 82,913 Tier 1 common equity ratio (non-GAAP) (e) 11.26 % 11.25 % 11.27 % 11.22 % 11.17 % Pre-provision net revenue Net interest income (GAAP) $ 575 $ 573 $ 563 $ 583 $ 578 Plus: Taxable-equivalent adjustment 6 6 6 6 6 Noninterest income (GAAP) 417 455 435 453 459 Less: Noninterest expense (GAAP) 704 689 662 712 716 Pre-provision net revenue from continuing operations (non-GAAP) $ 294 $ 345 $ 342 $ 330 $ 327 GAAP to Non-GAAP Reconciliation $ in millions 25 a) Three months ended September 30, 2014, June 30, 2014, March 31, 2014, December 31, 2013, and September 30, 2013 exclude $72 million, $79 million, $84 million, $92 million, and $99 million of period-end purchased credit card receivable intangible assets, respectively b) Net of capital surplus 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 September 30, 2014, June 30, 2014, March 31, 2014, December 31, 2013, and September 30, 2013 e) 9-30-14 amount is estimated

Three months ended 9-30-14 6-30-14 3-31-14 12-31-13 9-30-13 Average tangible common equity Average Key shareholders’ equity (GAAP) $ 10,473 $ 10,459 $ 10,371 $ 10,272 $ 10,237 Less: Intangible assets (average) (a) 1,037 1,010 1,013 1,016 1,019 Preferred Stock, Series A (average) 291 291 291 291 291 Average tangible common equity (non-GAAP) $ 9,145 $ 9,158 $ 9,067 $ 8,965 $ 8,927 Return on average tangible common equity from continuing operations Net income (loss) from continuing operations attributable to Key common shareholders (GAAP) $ 197 $ 242 $ 232 $ 229 $ 229 Average tangible common equity (non-GAAP) 9,145 9,158 9,067 8,965 8,927 Return on average tangible common equity from continuing operations (non-GAAP) 8.55 % 10.60 % 10.38 % 10.13 % 10.18 % Return on average tangible common equity consolidated Net income (loss) attributable to Key common shareholders (GAAP) $ 204 $ 214 $ 236 $ 224 $ 266 Average tangible common equity (non-GAAP) 9,145 9,158 9,067 8,965 8,927 Return on average tangible common equity consolidated (non-GAAP) 8.85 % 9.37 % 10.56 % 9.91 % 11.82 % Cash efficiency ratio Noninterest expense (GAAP) $ 704 $ 689 $ 662 $ 712 $ 716 Less: Intangible asset amortization (GAAP) 10 9 10 10 12 Adjusted noninterest expense (non-GAAP) $ 694 $ 680 $ 652 $ 702 $ 704 Net interest income (GAAP) $ 575 $ 573 $ 563 $ 583 $ 578 Plus: Taxable-equivalent adjustment 6 6 6 6 6 Noninterest income (GAAP) 417 455 435 453 459 Total taxable-equivalent revenue (non-GAAP) $ 998 $ 1,034 $ 1,004 $ 1,042 $ 1,043 Cash efficiency ratio (non-GAAP) 69.5 % 65.8 % 64.9 % 67.4 % 67.5 % GAAP to Non-GAAP Reconciliation (continued) $ in millions (a) Three months ended September 30, 2014, June 30, 2014, March 31, 2014, December 31, 2013, and September 30, 2013 exclude $76 million, $82 million, $89 million, $96 million, and $103 million of average purchased credit card receivable intangible assets, respectively 26

KeyCorp & Subsidiaries $ in billions Quarter ended September 30, 2014 Tier 1 common equity under current regulatory rules $ 9.4 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) $ 9.3 Total risk-weighted assets under current regulatory rules $ 83.8 Adjustments from current regulatory rules to the Regulatory Capital Rules: Loan commitments <1 year 1.0 Past Due Loans .1 Mortgage servicing assets (d) .5 Deferred tax assets (d) .3 Other 1.5 Total risk-weighted assets anticipated under the Regulatory Capital Rules $ 87.2 Common Equity Tier 1 ratio under the Regulatory Capital Rules 10.7 % (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)