EX-99.2 3 key4q18confcallslidesvf.htm EXHIBIT 99.2
KeyCorp Fourth Quarter 2018 Earnings Review January 17, 2019 Beth E. Mooney Don Kimble Chairman and Vice Chairman and Chief Executive Officer 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, 2017 (“Form 10-K”) 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 certain financial measures excluding notable items, including merger-related charges. Notable items include certain revenue or expense items that may occur in a reporting period in which management does not consider indicative of ongoing financial performance. Management believes it is useful for the investment community to consider financial metrics with and without notable items in order to enable a better understanding of company results, facilitate comparability of period-to-period financial results, and to evaluate and forecast those results. 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, Figure 2 of our Form 10-K dated December 31, 2017 or Form 10-Q dated September 30, 2018. GAAP: Generally Accepted Accounting Principles 2

2018 – Delivering on Commitments ° 6th consecutive year of positive operating leverage − Record full-year revenue of $6.4 billion − All-time highs in several fee-based businesses, including investment banking and debt placement fees ($650 MM in FY2018) − Expenses remain well-managed; reflect focus on efficiency and investments for growth Driving − Net interest income up 3% from prior year: balance sheet growth and benefit from higher rates Stronger − Loan and deposit growth reflects execution of relationship-based business model within Returns moderate risk profile ° Significant progress on LT financial targets − Cash efficiency ratio and return on tangible common equity improved by >300 bps − Increased ROTCE long-term target range to 16-19% − Progress on $200 MM cost savings initiative ° Maintained strong credit quality and disciplined underwriting standards Strong Risk − Net charge-offs to average loans of .26%; portfolios continue to perform well Management − Nonperforming loans of $542 million at 12/31/18; down >$100 million from 3Q18 ° Maintained strong capital position with CET1 ratio of 9.92% (a) Disciplined Capital ° Common share dividend increased 62% ($.105 to $.17 per common share) in 2018 Management ° $1.1.B (b) of common share repurchases in 2018; $278MM (b) in 4Q18 (a) 12/31/18 ratio is estimated (b) Common share repurchase amount includes repurchases to offset issuances of common shares under our employee compensation plans 3

Strategic Acquisition: Laurel Road Finance Acquisition of online lending platform focused on super prime professionals Transaction Overview Positioned to Outperform ° Acquisition of leading national, digital-first consumer Revisiting 2018 Investor Day Themes lending platform P • Leading digital originations capability Distinctive and front-end customer experience ° Proven end-to-end digital lending platform targeting super- Model • Alignment with Key’s Financial Wellness prime millennials with relationship expansion opportunity focus and relationship strategy ° Business built inside an FDIC regulated bank resulting in P sound risk and compliance culture • Proven model with targeted scale against Targeted defined client set Ï student lending Scale refinance for super-prime millennial Emphasis on strategic partnerships with a growing network ° Ï medical professionals pipeline of >150 affinity groups P ° Origination volume of >$4 billion since inception (2013) Focused • Targeted investments in a streamlined Execution suite of distinctive products Solution Set P Digital Mortgage Disciplined Student • High quality consumer assets Ï Loan Refinance Origination Capital & Risk opportunity to balance Key’s portfolio by Management adding proven consumer lending engine Personal Digital Banking Unsecured Loans Platform P The transaction is subject to customary closing conditions, including Delivering • Sound, profitable growth driving regulatory approvals, and expected to close mid-2019 Results shareholder returns over the long term 4

Financial Review 5

Financial Highlights Continuing operations, unless otherwise noted 4Q18 3Q18 4Q17 LQ ∆ Y/Y ∆ EPS – assuming dilution $ .45 $ .45 $ .17 - N/M EPS – excl. notable items (a), (b) .48 .45 .36 7 % 33 % (a) Cash efficiency ratio 59.9 % 58.7 % 66.7 % 120 bps (680) bps Cash efficiency –excl. notable items (a), (b) 57.4 58.7 61.3 (130) (390) Profitability Return on average tangible common equity (a) 16.4 16.8 6.4 (41) N/M ROTCE – excl. notable items (a), (b) 17.5 16.8 13.6 69 388 Return on average total assets 1.37 1.40 .57 (3) 80 Net interest margin 3.16 3.18 3.09 (2) 7 Common Equity Tier 1(d) 9.92 % 9.95 % 10.16 % (3) bps (24) bps Capital (c) Tier 1 risk-based capital (d) 11.07 11.11 11.01 (4) 6 Tangible common equity to tangible assets (a) 8.30 8.05 8.23 25 7 NCOs to average loans .27 % .27 % .24 % - 3 bps Asset NPLs to EOP portfolio loans (e) .61 .72 .58 (11) bps 3 Quality Allowance for loan and lease losses to EOP loans .99 .99 1.01 - (2) EOP = End of Period (d) 12/31/18 ratios are estimated (a) Non-GAAP measure: see Appendix for reconciliation (e) Nonperforming loan balances exclude $575 million, $606 million, and (b) Excludes notable items; see Appendix for detail and reconciliations $738 million of purchased credit impaired loans at December 31, 2018, 6 (c) From consolidated operations September 30, 2018, and December 31, 2017, respectively

Loans Total Average Loans Highlights $ in billions vs. Prior Year $89 $90 $86 ° Average loans up 4% from 4Q17 – C&I balances up 9% driven by broad-based growth with middle-market clients $80 – Home equity loans continue to be impacted by market trends vs. Prior Quarter $70 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 ° Average loans up 1% from 3Q18 – Strength in CRE and C&I driven by execution Average C&I Loans of relationship business model in targeted areas and industry verticals $ in billions $50 $45 $41 $40 $30 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 7

Deposits Average Deposits Highlights $ in billions ° Deposit cost up 11 bps from 3Q18, reflecting: $110 1.00% $108 – Higher interest rates and beta $104 .80% – Continued migration of portfolio into higher-yielding products $100 .60% .64% ° Strong and stable deposit base .40% – 28% noninterest-bearing $90 – ~65% stable retail and low-cost escrow .31% .20% vs. Prior Year $80 .00% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 ° Average deposits up 4% from 4Q17 Total average deposits Cost of total deposits ° Continued mix shift to higher-yielding deposit products 4Q18 Average Deposit Mix ° Strength in retail banking franchise and growth $ in billions from commercial relationships $13.5 vs. Prior Quarter $4.9 $30.3 39% ° Average deposit balances up 2% from 3Q18 61% ° Penetration of existing retail and commercial $59.3 relationships ° Short-term and seasonal deposit inflows Noninterest-bearing Consumer (a) NOW and MMDA Commercial and corporate Savings CDs and other time deposits 8 (a) Consumer includes retail banking, small business, and private banking

Net Interest Income and Margin Net Interest Income & Net Interest Margin Trend (TE) Highlights $ in millions; continuing operations ° Excluding PAA, 4Q18 net interest income was $23 $1,008 $1,000 $38 $952 4.0% $985 MM and net interest margin was 3.09% $800 vs. Prior Year 3.5% $600 ° Net interest income up $71 MM, or 8%, from 3.16% 3.09% 4Q17, excl. PAA $400 3.09% 3.0% – Largely driven by higher interest rates and $200 2.97% earning asset growth $0 2.5% vs. Prior Quarter 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Net interest income (TE), excl. PAA Reported NIM (TE) ° Net interest income up $18 MM, or 2%, from Purchase accounting accretion (PAA) x NIM (TE); excl. PAA 3Q18, excl. PAA – Reflects earning asset growth and higher loan fees – Partially offset by higher deposit betas 4Q17 1Q18 2Q18 3Q18 4Q18 NIM – reported 3.09% 3.15% 3.19% 3.18% 3.16% PAA .12 .11 .09 .09 .07 NIM Change vs. Prior Quarter 3Q18: 3.18% 2.97% 3.04% 3.10% 3.09% 3.09% NIM – excl. PAA PAA (4Q vs. 3Q) (.02) NII – reported ($MM) $ 952 $ 952 $ 987 $993 $1,008 Earning asset growth .01 PAA 38 33 28 26 23 (a) Other (.01) NII – excl. PAA $914 $919 $959 $967 $985 Total change (.02) 4Q18: 3.16% TE = Taxable equivalent PAA = Purchase accounting accretion 9 (a) 4Q18 purchase accounting accretion of $23 MM is made up of $16 MM related to contractual maturities and $7 MM related to prepayments

Noninterest Income Noninterest Income Highlights $ in millions up / (down) 4Q18 vs. 4Q17 vs. 3Q18 vs. Prior Year Trust and investment services income $ 121 $ (10) $ 4 ° Noninterest income down $11 MM (-2%) from 4Q17 Investment banking and debt 186 (14) 20 placement fees ° Trust and investment services income lower, Service charges on deposit accounts 84 (5) (1) primarily related to the sale of Key’s insurance Operating lease income and other 28 1 (7) business leasing gains ° Deposit service charges and cards and payments Corporate services income 58 2 6 income impacted by revenue recognition changes Cards and payments income 68 (9) (1) ° Lower investment banking and debt placement Corporate-owned life insurance 39 2 5 fees (record quarter in 4Q17) Consumer mortgage income 7 -- (2) Mortgage servicing fees 21 4 2 Other income 33 18 10 vs. Prior Quarter Total noninterest income $ 645 $ (11) $ 36 ° Noninterest income up $36 MM (+6%) from 3Q18 ° Investment banking and debt placement fees up $20 MM related to strength in commercial mortgage and advisory fees ° Growth in corporate services income from strong derivatives and trading 10

Noninterest Expense Noninterest Expense Highlights $ in millions up / (down) 4Q18 vs. 4Q17 vs. 3Q18 vs. Prior Year Personnel $ 576 $ (33) $ 23 ° Noninterest expense down $86 MM, or 8% (down Net occupancy 75 (17) (1) $42 MM excl. notable items) Computer processing 55 1 3 ° Personnel expense reflects: Business services, professional 49 (3) 6 fees − Lower incentive compensation (IBDP) Equipment 26 (5) (1) − Lower employee benefits (tax reform in 4Q17) − Higher severance (efficiency initiative expenses) Operating lease expense 32 4 1 Marketing 25 (10) (1) ° Lower net occupancy & marketing expense FDIC assessment 9 (11) (12) (merger-related charges in 4Q17) Intangible asset amortization 22 (4) (1) ° Lower FDIC assessment reflecting elimination of OREO expense, net 1 (2) (2) quarterly surcharge Other expense 142 (6) 33 vs. Prior Quarter Total noninterest expense $ 1,012 $ (86) $ 48 ° Noninterest expense up $48 MM, or 5% (up $7 MM excl. notable items) Notable items: ° Personnel expense up $23 MM, largely related to $ in millions 4Q18 4Q17 3Q18 efficiency initiative expenses Merger-related charges - $56 - ° Increase in other expense includes pension Impact of tax reform and related actions - 29 - settlement charge Efficiency initiative expenses $24 - ° FDIC assessment decline of $12 MM from Pension settlement charge 17 - - elimination of quarterly surcharge $41 $85 - 11

Credit Quality Net Charge-offs & Provision for Credit Losses Allowance for Loan and Lease Losses $ in millions 4Q18 allowance for loan losses to period-end loans of .99% $100 1.00% $900 $877 $883 250% .80% $75 200% $60 $59 .60% $800 $52 $49 $50 174% 150% 163% .40% 100% $700 $25 .27% .20% 50% .24% $0 .00% $600 0% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 NCOs Provision for credit NCOs to average loans Allowance for loan Allowance for loan and losses and lease losses lease losses to NPLs Nonperforming Loans (a) Acquired Loans $ in millions $ in millions NPLs down > $100MM from 3Q18 $800 2.00% $100 1.00% 1.60% $600 $503 $542 $80 .80% $80 1.20% $72 $73 $71 $68 $400 .60% .58% .61% .80% $60 $200 .50% .52% .53% .40% .40% .45% .48% $0 .00% $40 .20% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 NPLs NPLs to period-end loans Allowance for Acquired loan allowance to acquired loans period-end acquired loans NCO = Net charge-off (a) Nonperforming loan balances exclude $575 million and $738 million of purchased credit impaired loans at December 31, 2018, and 12 December 31, 2017, respectively

Capital Common Equity Tier 1 (a) Highlights 12.00% ° Strong capital position with Common Equity Tier 1 ratio of 9.92% (a) at 12/31/2018 10.16% 9.92% 10.00% ° Increased common share dividend by 62% (from $0.105 to $0.17 per quarter) from 4Q17 8.00% ° Repurchased $278 MM (c) in common shares during 4Q18 6.00% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Tangible Common Equity to Tangible Assets (b) Quarterly Common Share Dividend 10.00% $0.20 +62% 4Q18 vs. 4Q17 8.23% 8.30% $.17 7.50% $0.16 5.00% $0.12 $.105 2.50% $0.08 0.00% $0.04 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 (a) 12/31/18 ratios are estimated (b) Non-GAAP measure: see Appendix for reconciliation 13 (c) Common share repurchase amount includes repurchases to offset issuances of common shares under our employee compensation plans

FY2019 Outlook & Long-term Targets FY 2019 Average Balance • Loans: average balances in the range of $90 B - $91 B Sheet • Deposits: average balances in the range of $108 B - $109 B Net Interest Income • Net interest income expected to be in the range of $4.0 B - $4.1 B (TE) • Outlook assumes no interest rate increases in 2019 Noninterest Income • Expected to be in the range of $2.5 B - $2.6 B Noninterest • Expected to be in the range of $3.85 B - $3.95 B − Includes realization of $200 MM run-rate cost savings in 2H19 Expense − Achieve cash efficiency ratio target of 54 - 56% by 2H19 • Net charge-offs to average loans below targeted range of 40 - 60 bps Credit Quality • Provision expected to slightly exceed net charge-offs Taxes • GAAP tax rate in the range of 18% - 19% Note: 2019 Outlook includes the impact of the mid-year acquisition of Laurel Road Long-term Targets Positive operating Cash efficiency ratio: Moderate risk profile: ROTCE: Net charge-offs to avg. loans leverage 54% - 56% 16 - 19% targeted range of 40-60 bps 14

Appendix 15

Loan Portfolio Detail, at 12/31/18 Total Loans Commercial Loans $ in billions 12/31/18 % of total Diversified Portfolio by Industry loans Total commercial loans: Utilities Agriculture Commercial and industrial $ 45.8 51 Automotive Transportation Business Products Commercial real estate 16.0 18 Technology Media Business Services C&I CRE And Telecom Chemicals Commercial lease financing$40 4.6$18 5 Construction Total Commercial $ 66.3 74 Consumer Discretionary Residential mortgage 5.5 6 Real Estate Home equity 11.1 12 Consumer Services Consumer direct 1.8 2 Equipment Credit card 1.1 1 Public Sector Consumer indirect 3.6 4 Finance Other Total Consumer $ 23.2 26 Oil And Gas Materials/ Extraction Metals And Mining Home Equity Commercial Real Estate 2008/ Outstanding Average Average prior Balances Loan Size FICO Construction vintage ° Focused on relationships with CRE owners First lien $ 6,606 59 % $ 71,202 773 16 % Second lien 4,536 41 46,479 772 29 ° Aligned with targeted industry verticals Total home equity $ 11,142 ° Primarily commercial mortgage; selective approach to construction ° Combined weighted-average LTV at Commercial mortgage origination: 70% Fixed ° Criticized non-accruals: 0.6% of period- 58% 90% Variable 47% end balances (a) 53% ° $563 million in lines outstanding (7.7% of the home equity lines) come to end of draw period by 4Q20 12/31/2008 12/31/2018 Tables may not foot due to rounding 16 (a) Loan and lease outstandings; excludes purchase credit impaired loans from the First Niagara acquisition

Investment Portfolio Average Total Investment Securities Highlights $ in billions ° Portfolio composed primarily of GNMA and GSE- $32.0 $29.6 $30.3 2.50% backed MBS and CMOs $24.0 2.39% 2.25% ‒ Primarily fixed rate 2.06% ‒ GNMA 45% of 4Q18 average balances $16.0 2.00% ° Portfolio used for funding and liquidity $8.0 1.75% management: ‒ Securities cash flows of $1.1 billion in 4Q18 $0.0 1.50% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 – Reinvesting cash flows into High Quality Liquid Assets Average AFS securities Average yield (a) Average HTM securities ° Replaced cash flows at higher yields during 4Q18 Securities to Total Assets (b) − Yield on new investments ~135 bps higher than maturities (In 1Q19 continue to replace 25% maturing investments with new investments at ~100 bps yield increase) 22% 22% − Portfolio yield has increased 33 bps from 20% prior year ° Portfolio average life of 4.9 years and duration of 15% 4.1 years at 12/31/2018 10% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 (a) Yield is calculated on the basis of amortized cost 17 (b) Includes end-of-period held-to-maturity securities at amortized cost and available-for-sale securities at fair value

Asset & Liability Management Positioning Moderate asset sensitivity supports strong, stable net interest margin Business and Balance Sheet Highlights Positioning • Strong, low-cost deposit base • Actively hedging to reduce current and future – $78 B interest-bearing deposits at 89 bps exposure to declining rates – $30 B noninterest-bearing deposits – $4.75 B in interest rate floors purchased in 3Q18 offer immediate protection – Cumulative interest-bearing deposit beta of 33% – Executed ~$3 B in forward starting interest rate swaps in 4Q18 – ~65% stable retail and low-cost escrow to manage down exposure to interest rates – >85% from markets where Key maintains Top 5 deposit or branch share • Shifting asset sensitivity as the pace of rate increases and economic growth slows • Relationship-oriented lending franchise – Lower level of exposure due to a more balanced rate outlook – Distinctive commercial capabilities drive C&I loan growth and ~70% floating-rate loan mix – Shorter duration loan and investment portfolios provide opportunity for continued benefit to higher rates – Higher deposit betas have reduced the benefit to rising short • Disciplined balance sheet management with term interest rates recurring re-investment opportunities – $31 B securities portfolio is >99% government-guaranteed and generates ~$400 MM cash flows per month Modest asset sensitive position: – Discretionary hedge activities help moderate interest rate risk NII impact of +2.8% for a 200 bps increase over 12 months exposure and lock in spreads on new business NII impact of -2.3% for a 100 bps decrease over 12 months Each 25 bps increase in interest rates results in NII benefit of ~$4-8 MM per quarter 18

Credit Quality Trends Delinquencies to Period-end Total Loans Criticized Outstandings (a) to Period-end Total Loans Continuing operations Continuing operations .80% 6.0% .60% 4.0% .42% 3.4% .40% .35% 2.8% 2.0% .20% .13% .10% .00% .0% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 30 – 89 days delinquent 90+ days delinquent Metric (b) 4Q18 3Q18 2Q18 1Q18 4Q17 Delinquencies to EOP total loans: 30-89 days .35 % .41 % .49 % .35 % .42 % Delinquencies to EOP total loans: 90+ days .13 .10 .12 .09 .10 NPLs to EOP portfolio loans (c) .61 .72 .62 .61 .58 NPAs to EOP portfolio loans + OREO + Other NPAs (c) .64 .75 .65 .65 .62 Allowance for loan losses to period-end loans .99 .99 1.01 1.00 1.01 Allowance for loan losses to NPLs 162.9 137.5 162.8 162.8 174.4 (a) Loan and lease outstandings; excludes purchase credit impaired loans from the First Niagara acquisition (b) From continuing operations (c) Nonperforming loan balances exclude $575 million, $606 million, $629 million, $690 million, and $738 million of purchased credit impaired loans at December 31, 19 2018, September 30, 2018, June 30, 2018, March 31, 2018, and December 31, 2017, respectively

Credit Quality Credit Quality by Portfolio Net loan Net loan Allowance / Allowance / Period- Average charge-offs (b) / Nonperforming Ending charge- period-end NPLs end loans loans average loans loans (c) allowance (d) offs loans (d) (%) (%) $ in millions (%) 12/31/18 4Q18 4Q18 4Q18 12/31/18 12/31/18 12/31/18 12/31/18 Commercial and industrial (a) $ 45,753 $ 45,129 $ 26 0.23% $ 152 $ 532 1.16% 350.00% Commercial real estate: Commercial Mortgage 14,285 14,656 11 .30 81 142 .99 175.31 Construction 1,666 1,761 (1) (.23) 2 33 1.98 N/M Commercial lease financing (e) 4,606 4,482 - - 9 36 .78 400.00 Real estate – residential mortgage 5,513 5,496 - - 62 7 .13 11.29 Home equity 11,142 11,234 5 .18 210 35 .31 16.67 Credit cards 1,144 1,112 8 2.85 2 30 2.62 N/M Consumer direct loans 1,809 1,806 7 1.54 4 20 1.11 500.00 Consumer indirect loans 3,634 3,612 4 .44 20 48 1.32 240.00 Continuing total $ 89,552 $ 89,288 $ 60 .27% $ 542 $ 883 .99% 162.92% Discontinued operations 1,073 1,096 3 1.09 8 14 1.30 175.00 Consolidated total $ 90,625 $ 90,384 $ 63 .28% $ 550 $ 897 .99% 163.09% N/M = Not meaningful (a) 12/31/18 ending loan balance includes $132 million of commercial credit card balances; average loan balance includes $132 million of assets from commercial credit cards (b) Net loan charge-off amounts are annualized in calculation (c) 12/31/18 NPL amount excludes $575 million of purchased credit impaired loans (d) 12/31/18 allowance by portfolio is estimated (e) Commercial lease financing includes receivables held as collateral for a secured borrowing of $10 million at December 31, 2018. Principal reductions are based on 20 the cash payments received from these related receivables

GAAP to Non-GAAP Reconciliation $ in millions Three months ended Twelve months ended 12/31/2018 9/30/2018 12/31/17 12/31/2018 12/31/2017 Notable Items Efficiency initiative expenses $ 24 - -$ 24 - Pension settlement charge 17 - - 17 - Merger-related charges - -$ (56) -$ (217) Impacts of tax reform and related actions - - (30) - (30) Merchant services gain - - - - 59 Purchase accounting finalization, net - - - - 43 Charitable contribution - - - - (20) Total notable items $ 41 $ - $ (86) $ 41 $ (165) Income taxes $ 10 -$ (26) $ 10 $ (53) Revaluation of certain tax related assets - - 147 - 147 Total notable items after tax $ 31 $ - $ (207) $ 31 $ (259) Earnings per common share (EPS) excluding notable items EPS from continuing operations attributable to Key common shareholders ─ assuming dilution $ .45 $ .45 $ .17 Add: EPS impact of notable items .03 - .19 EPS from continuing operations attributable to Key common shareholders excluding notable items (non-GAAP) $ .48 $ .45 $ .36 Tangible common equity to tangible assets at period end Key shareholders' equity (GAAP) $ 15,959 $ 15,208 $ 15,023 Less: Intangible assets (a) 2,818 2,838 2,928 Preferred Stock (b) 1,421 1,421 1,009 Tangible common equity (non-GAAP) $ 11,356 $ 10,949 $ 11,086 Total assets (GAAP) $ 136,613 $ 138,805 $ 137,698 Less: Intangible assets (a) 2,818 2,838 2,928 Tangible common equity to tangible assets ratio (non-GAAP) $ 136,795 $ 135,967 $ 134,770 Tangible common equity to tangible assets ratio (non-GAAP) 8.30% 8.05% 8.23% (a) For the three months ended December 31, 2018, September 30, 2018, and December 31, 2017, intangible assets exclude $14 million, $17 million, and $26 million, respectively, of period-end purchased credit card receivables 21 (b) Net of capital surplus

GAAP to Non-GAAP Reconciliation Three months ended Twelve months ended $ in millions 12/31/2018 9/30/2018 12/31/17 12/31/2018 12/31/2017 Average tangible common equity Average Key shareholders' equity (GAAP) $ 15,384 $ 15,210 $ 15,268 $ 15,131 $ 15,224 Less: Intangible assets (average) (a) 2,828 2,848 2,939 2,869 2,837 Preferred Stock (average) 1,450 1,316 1,025 1,205 1,137 Average tangible common equity (non-GAAP) $ 11,106 $ 11,046 $ 11,304 $ 11,057 $ 11,250 Return on average tangible common equity from continuing operations Net income (loss) from continuing operations attributable to Key common shareholders (GAAP) $ 459 $ 468 $ 181 $ 1,793 $ 1,219 Plus: Notable items, after tax 31 - 207 31 259 Net income (loss) from continuing operations attributable to Key common shareholders excl. notable items $ 490 $ 468 $ 388 $ 1,824 $ 1,478 Average tangible common equity (non-GAAP) 11,106 11,046 11,304 11,057 11,250 Return on average tangible common equity from continuing operations (non- GAAP) 16.40% 16.81% 6.35% 16.22% 10.84% Return on average tangible common equity from continuing operations excl. notable items (non- GAAP) 17.50% 16.81% 13.62% 16.50% 13.14% Cash efficiency ratio Noninterest expense (GAAP) $ 1,012 $ 964 $ 1,098 $ 3,975 $ 4,098 Less: Intangible asset amortization 22 23 26 99 95 Adjusted noninterest expense (non-GAAP) $ 990 $ 941 $ 1,072 $ 3,876 $ 4,003 Less: Notable items 41 - 85 41 262 Adjusted noninterest expense (non-GAAP) $ 949 $ 941 $ 987 $ 3,835 $ 3,741 Net interest income (GAAP) $ 1,000 $ 986 $ 938 $ 3,909 $ 3,777 Plus: Taxable-equivalent adjustment 8 7 14 31 53 Noninterest income 645 609 656 2,515 2,478 Total taxable-equivalent revenue (non-GAAP) $ 1,653 $ 1,602 $ 1,608 $ 6,455 $ 6,308 Plus: Notable items - - 1 - (97) Adjusted total taxable-equivalent revenue (non-GAAP) $ 1,653 $ 1,602 $ 1,609 $ 6,455 $ 6,211 Cash efficiency ratio (non-GAAP) 59.9% 58.7% 66.7% 60.0%0.602 63.5%0.602 Cash efficiency ratio excluding notable items (non-GAAP) 57.4% 58.7% 61.3% 59.4% 60.2% (a) For the three months ended December 31, 2018, September 30, 2018, and December 31, 2017, average intangible assets exclude $15 million, $18 million, and $28 million, respectively, of average purchased credit card receivables. For the twelve months ended December 31, 2018, and December 31, 2017, average 22 intangible assets exclude $20 million and $34 million, respectively, of average purchased credit card receivables