EX-99.1 2 a1q23earningsrelease.htm EX-99.1 Document

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KEYCORP REPORTS FIRST QUARTER 2023 NET INCOME OF $275 MILLION,
OR $.30 PER DILUTED COMMON SHARE
Net income includes $126 million, or $.14 per share from allowance build and expense actions

Durable, relationship-based business model provides stability and positions the company to perform well throughout the business cycle

Strong liquidity and funding, supported by diverse, core deposits

Solid credit quality and disciplined underwriting with net charge-offs to average loans of 15 basis points

Capital remains strong, with Common Equity Tier 1 of 9.1%(a)


    CLEVELAND, April 20, 2023 - KeyCorp (NYSE: KEY) today announced net income from continuing operations attributable to Key common shareholders of $275 million, or $.30 per diluted common share for the first quarter of 2023. This compared to $356 million, or $.38 per diluted common share, for the fourth quarter of 2022 and $420 million, or $.45 per diluted common share, for the first quarter of 2022.


Comments from Chairman and CEO, Chris Gorman

"Key’s durable business model continues to provide stability while driving sound, profitable growth through all market conditions. Our strong balance sheet and our focus on relationship banking yields a diverse, stable deposit base and high-quality lending opportunities. Importantly, our long-standing commitment to primacy continues to serve us well, resulting in an increase in period-end deposits on a linked quarter basis. As a strong, core-funded institution, we are well positioned to continue to serve and support our clients and prospects.

The successful de-risking of our loan portfolios over the last decade positions Key to outperform, from a credit perspective. In the first quarter, we added to our allowance for credit losses to reflect changes in our economic outlook, with our allowance now representing over 7 years of annualized net charge-offs. Additionally, we delivered another quarter of strong credit performance, with net charge-offs of 15 basis points.

I remain confident in Key and the long-term outlook for our business. We have a relationship-based business model that will continue to serve our clients and our prospects and deliver value to our shareholders.”















(a)March 31, 2023 ratio is estimated and reflects Key's election to adopt the CECL optional transition provision.


KeyCorp Reports First Quarter 2023 Profit     
April 20, 2023
Page 2

Selected Financial Highlights
Dollars in millions, except per share dataChange 1Q23 vs.
1Q234Q221Q224Q221Q22
Income (loss) from continuing operations attributable to Key common shareholders$275 $356 $420 (22.8)%(34.5)%
Income (loss) from continuing operations attributable to Key common shareholders per common share — assuming dilution
.30 .38 .45 (21.1)(33.3)
Return on average tangible common equity from continuing operations (a)
13.16 %18.07 %14.12 %N/AN/A
Return on average total assets from continuing operations.66 .83 .99 N/AN/A
Common Equity Tier 1 ratio (b)
9.1 9.1 9.4 N/AN/A
Book value at period end$12.70 $11.79 $14.43 7.7 (12.0)
Net interest margin (TE) from continuing operations2.47 %2.73 %2.46 %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)March 31, 2023 ratio is estimated.
TE = Taxable Equivalent, N/A = Not Applicable

INCOME STATEMENT HIGHLIGHTS
Revenue
Dollars in millionsChange 1Q23 vs.
 1Q234Q221Q224Q221Q22
Net interest income (TE)$1,106 $1,227 $1,020 (9.9)%8.4 %
Noninterest income608 671 676 (9.4)(10.1)
Total revenue$1,714 $1,898 $1,696 (9.7)%1.1 %
TE = Taxable Equivalent
Taxable-equivalent net interest income was $1.1 billion for the first quarter of 2023 and the net interest margin was 2.47%. Compared to the first quarter of 2022, net interest income increased $86 million and the net interest margin increased by one basis point. Net interest income and the net interest margin benefited from higher earning asset balances and higher interest rates, partly offset by higher interest-bearing deposit costs and a shift in funding mix.

Compared to the fourth quarter of 2022, taxable-equivalent net interest income decreased by $121 million, while the net interest margin decreased by 26 basis points. Net interest income and the net interest margin reflect higher interest-bearing deposit costs and a change in funding mix, partly offset by higher earning asset balances and a benefit from higher interest rates. Additionally, net interest income was lower reflecting two fewer days in the first quarter of 2023.

Noninterest Income
Dollars in millionsChange 1Q23 vs.
1Q234Q221Q224Q221Q22
Trust and investment services income$128 $126 $136 1.6 %(5.9)%
Investment banking and debt placement fees145 172 163 (15.7)(11.0)
Cards and payments income81 85 80 (4.7)1.3 
Service charges on deposit accounts67 71 91 (5.6)(26.4)
Corporate services income76 89 91 (14.6)(16.5)
Commercial mortgage servicing fees46 42 36 9.5 27.8 
Corporate-owned life insurance income29 33 31 (12.1)(6.5)
Consumer mortgage income11 9 21 22.2 (47.6)
Operating lease income and other leasing gains25 24 32 4.2 (21.9)
Other income— 20 (5)(100.0)100.0 
Total noninterest income$608 $671 $676 (9.4)%(10.1)%

    


KeyCorp Reports First Quarter 2023 Profit     
April 20, 2023
Page 3

    Compared to the first quarter of 2022, noninterest income decreased by $68 million. The decrease was driven by a $24 million decline in service charges on deposit accounts, reflecting a planned reduction in overdraft and non-sufficient funds fees and lower account analysis fees related to the interest rate environment, as well as an $18 million decline in investment banking and debt placement fees. Additionally, corporate services income decreased $15 million, due to lower loan fees and market-related adjustments in the prior period. Consumer mortgage income decreased $10 million, reflecting lower saleable volume and lower gain on sale margins. Partially offsetting the decrease was a $10 million increase in commercial mortgage servicing fees.

Compared to the fourth quarter of 2022, noninterest income decreased by $63 million, reflecting a $27 million decline in investment banking and debt placement fees. Other income decreased by $20 million, driven by market-related valuation adjustments and a Visa litigation adjustment. Corporate services income decreased $13 million, reflecting lower derivatives income associated with customer derivatives, partially offset by growth in commercial mortgage servicing fees and trust and investment services income, up $4 million and $2 million, respectively.


Noninterest Expense
Dollars in millionsChange 1Q23 vs.
1Q234Q221Q224Q221Q22
Personnel expense$701 $674 $630 4.0 %11.3 %
Nonpersonnel expense475 482 440 (1.5)8.0 
Total noninterest expense$1,176 $1,156 $1,070 1.7 %9.9 %
    Compared to the first quarter of 2022, noninterest expense increased by $106 million. The increase was driven by personnel expense, up $71 million, reflecting $36 million of severance and other costs related to expense actions, as well as higher salaries. Nonpersonnel expense increased $35 million, driven by a $47 million increase in other expense, reflecting $28 million related to our expense actions and an increase in the base Federal Deposit Insurance Corporation ("FDIC") assessment rate of $9 million. Additionally, computer processing expense increased $15 million. Partially offsetting the increase in nonpersonnel expense was an $8 million decline in business services and professional fees, an $8 million decline in operating lease expense and a $7 million decline in marketing expense.

    Compared to the fourth quarter of 2022, noninterest expense increased $20 million. The increase was driven by a $27 million increase in personnel expense, reflecting $36 million of severance and other costs related to expense actions, partly offset by a decline in incentive compensation. Nonpersonnel expense declined $7 million, reflecting a $15 million decline in business services and professional fees and a $10 million decline in marketing expense, partly offset by a $10 million increase in other expense. The increase in other expense reflects $28 million related to expense actions, as well as an increase in the base FDIC assessment rate of $9 million, partly offset by a reduction of a charitable contribution in the prior period.

BALANCE SHEET HIGHLIGHTS
Average Loans
Dollars in millionsChange 1Q23 vs.
1Q234Q221Q224Q221Q22
Commercial and industrial (a)
$60,281 $58,212 $51,574 3.6 %16.9 %
Other commercial loans22,778 22,720 20,556 .3 10.8 
Total consumer loans36,778 36,770 31,632 — 16.3 
Total loans$119,837 $117,702 $103,762 1.8 %15.5 %
(a)Commercial and industrial average loan balances include $178 million, $171 million, and $141 million of assets from commercial credit cards at March 31, 2023, December 31, 2022, and March 31, 2022, respectively.
    
Average loans were $119.8 billion for the first quarter of 2023, an increase of $16.1 billion compared to the first quarter of 2022. Commercial loans increased by $10.9 billion, largely reflecting growth in commercial and industrial loans, as well as an increase in commercial mortgage real estate loans. Consumer loans increased $5.1 billion, largely driven by Key's residential mortgage business.


KeyCorp Reports First Quarter 2023 Profit     
April 20, 2023
Page 4


Compared to the fourth quarter of 2022, average loans increased by $2.1 billion. The increase was driven by commercial loans, up $2.1 billion, reflecting growth in commercial and industrial loans.

Average Deposits
Dollars in millionsChange 1Q23 vs.
1Q234Q221Q224Q221Q22
Non-time deposits$132,907 $139,558 $146,426 (4.8)%(9.2)%
Certificates of deposit ($100,000 or more)2,392 1,351 1,639 77.1 45.9 
Other time deposits8,106 4,757 2,098 70.4 286.4 
Total deposits$143,405 $145,666 $150,163 (1.6)%(4.5)%
Cost of total deposits.99 %.51 %.04 %N/AN/A
N/A = Not Applicable

    Average deposits totaled $143.4 billion for the first quarter of 2023, a decrease of $6.8 billion compared to the year-ago quarter. The decline reflects elevated inflation-related spend, the normalization of pandemic-related deposits, and changing client behavior due to higher interest rates.

Compared to the fourth quarter of 2022, average deposits decreased by $2.3 billion. The decline was driven by the normalization of pandemic-related balances, changing client behavior due to higher interest rates, and normal seasonal deposit outflows in commercial deposits.

ASSET QUALITY
Dollars in millionsChange 1Q23 vs.
1Q234Q221Q224Q221Q22
Net loan charge-offs$45 $41 $33 9.8 %36.4 %
Net loan charge-offs to average total loans.15 %.14 %.13 %N/AN/A
Nonperforming loans at period end$416 $387 $439 7.5 (5.2)
Nonperforming assets at period end447 420 467 6.4 (4.3)
Allowance for loan and lease losses1,380 1,337 1,105 3.2 24.9 
Allowance for credit losses1,656 1,562 1,271 6.0 30.3 
Provision for credit losses139 265 83 (47.5)67.5 
Allowance for loan and lease losses to nonperforming loans332 %346 %252 %N/AN/A
Allowance for credit losses to nonperforming loans398 404 290 N/AN/A
N/A = Not Applicable

    
    Key's provision for credit losses was $139 million, compared to $83 million in the first quarter of 2022 and provision of $265 million in the fourth quarter of 2022. The increase from the year-ago period reflects changes in the economic outlook, in addition to higher net loan charge-offs. The decrease from the prior quarter is primarily driven by economic conditions and slowing loan growth.

    Net loan charge-offs for the first quarter of 2023 totaled $45 million, or 0.15% of average total loans. These results compare to $33 million, or 0.13%, for the first quarter of 2022 and $41 million, or 0.14%, for the fourth quarter of 2022. Key’s allowance for credit losses was $1.7 billion, or 1.38% of total period-end loans at March 31, 2023, compared to 1.19% at March 31, 2022, and 1.31% at December 31, 2022.

    At March 31, 2023, Key’s nonperforming loans totaled $416 million, which represented 0.35% of period-end portfolio loans. These results compare to 0.41% at March 31, 2022, and 0.32% at December 31, 2022. Nonperforming assets at March 31, 2023, totaled $447 million, and represented 0.37% of period-end portfolio loans and OREO and other nonperforming assets. These results compare to 0.44% at March 31, 2022, and 0.35% at December 31, 2022.



KeyCorp Reports First Quarter 2023 Profit     
April 20, 2023
Page 5

CAPITAL

Key’s estimated risk-based capital ratios included in the following table continued to exceed all “well-capitalized” regulatory benchmarks at March 31, 2023.
Capital Ratios
3/31/202312/31/20223/31/2022
Common Equity Tier 1 (a)
9.1 %9.1 %9.4 %
Tier 1 risk-based capital (a)
10.6 10.6 10.7 
Total risk-based capital (a)
12.8 12.8 12.4 
Tangible common equity to tangible assets (b)
4.6 4.4 6.0 
Leverage (a)
8.8 8.9 8.6 
    
(a)March 31, 2023 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 first quarter of 2023. As shown in the preceding table, at March 31, 2023, Key’s estimated Common Equity Tier 1 and Tier 1 risk-based capital ratios stood at 9.1% and 10.6%, respectively. Key's tangible common equity ratio was 4.6% at March 31, 2023.

    Key elected the CECL phase-in option provided by regulatory guidance which delayed for two years the estimated impact of CECL on regulatory capital and phases it in over three years beginning in 2022. Effective for the first quarter 2022, Key is now in the three-year transition period. On a fully phased-in basis, Key's Common Equity Tier 1 ratio would be reduced by eight basis points.

Summary of Changes in Common Shares Outstanding
In thousandsChange 1Q23 vs.
1Q234Q221Q224Q221Q22
Shares outstanding at beginning of period933,325 932,938 928,850 — %.5 %
Open market repurchases and return of shares under employee compensation plans(4,333)(2)(1,707)N/M153.8 
Shares issued under employee compensation plans (net of cancellations)6,237 389 5,255 N/M18.7 
Shares outstanding at end of period935,229 933,325 932,398 .2 %.3 %
N/M = Not Meaningful

    
    During the first quarter of 2023, Key declared a dividend of $.205 per common share. Additionally, we have $752 million remaining in our share repurchase authorization through the third quarter of 2023.

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 First Quarter 2023 Profit     
April 20, 2023
Page 6

Major Business Segments
Dollars in millionsChange 1Q23 vs.
1Q234Q221Q224Q221Q22
Revenue from continuing operations (TE)
Consumer Bank$842 $900 $799 (6.4)%5.4 %
Commercial Bank841 928 808 (9.4)4.1 
Other (a)
31 70 89 (55.7)(65.2)
Total$1,714 $1,898 $1,696 (9.7)%1.1 %
Income (loss) from continuing operations attributable to Key
Consumer Bank$81 $74 $71 9.5 %14.1 %
Commercial Bank264 250 284 5.6 (7.0)
Other (a)
(34)70 92 (148.6)(137.0)
Total$311 $394 $447 (21.1)%(30.4)%
(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


Consumer Bank
Dollars in millionsChange 1Q23 vs.
1Q234Q221Q224Q221Q22
Summary of operations
Net interest income (TE)$614 $674 $543 (8.9)%13.1 %
Noninterest income228 226 256 .9 (10.9)
Total revenue (TE)842 900 799 (6.4)5.4 
Provision for credit losses60 105 43 (42.9)39.5 
Noninterest expense675 698 663 (3.3)1.8 
Income (loss) before income taxes (TE)107 97 93 10.3 15.1 
Allocated income taxes (benefit) and TE adjustments26 23 22 13.0 18.2 
Net income (loss) attributable to Key$81 $74 $71 9.5 %14.1 %
Average balances
Loans and leases$43,086 $43,149 $38,654 (.1)%11.5 %
Total assets45,911 46,214 41,786 (.7)9.9 
Deposits84,492 87,243 91,516 (3.2)(7.7)
Assets under management at period end$53,689 $51,282 $53,707 4.7 %— %
TE = Taxable Equivalent




KeyCorp Reports First Quarter 2023 Profit     
April 20, 2023
Page 7

Additional Consumer Bank Data
Dollars in millionsChange 1Q23 vs.
1Q234Q221Q224Q221Q22
Noninterest income
Trust and investment services income$101 $97 $106 4.1 %(4.7)%
Service charges on deposit accounts38 40 54 (5.0)(29.6)
Cards and payments income61 62 57 (1.6)7.0 
Consumer mortgage income11 9 21 22.2 (47.6)
Other noninterest income17 18 18 (5.6)(5.6)
Total noninterest income$228 $226 $256 .9 %(10.9)%
Average deposit balances
Money market deposits$28,127 $29,695 $32,013 (5.3)%(12.1)%
Demand deposits24,829 24,956 26,632 (.5)(6.8)
Savings deposits7,025 7,439 7,233 (5.6)(2.9)
Certificates of deposit ($100,000 or more)2,182 1,227 1,520 77.8 43.6 
Other time deposits2,169 1,762 2,089 23.1 3.8 
Noninterest-bearing deposits20,160 22,164 22,029 (9.0)(8.5)
Total deposits$84,492 $87,243 $91,516 (3.2)%(7.7)%
Other data
Branches971 972 993 
Automated teller machines1,263 1,265 1,308 
    


Consumer Bank Summary of Operations (1Q23 vs. 1Q22)
•Key's Consumer Bank recorded net income attributable to Key of $81 million for the first quarter of 2023, compared to $71 million for the year-ago quarter
•Taxable-equivalent net interest income increased by $71 million, or 13.1%, compared to the first quarter of 2022, driven by higher interest rates and balance sheet mix
•Average loans and leases increased $4.4 billion, or 11.5%, from the first quarter of 2022, driven by loan growth in consumer mortgage
•Average deposits decreased $7.0 billion, or 7.7%, from the first quarter of 2022, driven by elevated inflation-related spend, the normalization of pandemic-related deposits, and changing client behavior due to higher interest rates
•Provision for credit losses increased $17 million compared to the first quarter of 2022, driven by changes in the economic outlook
•Noninterest income decreased $28 million from the year-ago quarter, driven by a decline in service charges on deposit accounts, reflecting a planned reduction in overdraft and non-sufficient funds fees, and lower consumer mortgage income, reflecting lower saleable volume and gain on sale margins
•Noninterest expense increased $12 million, or 1.8%, from the year-ago quarter, primarily driven by an increase in salaries



KeyCorp Reports First Quarter 2023 Profit     
April 20, 2023
Page 8

Commercial Bank
Dollars in millionsChange 1Q23 vs.
1Q234Q221Q224Q221Q22
Summary of operations
Net interest income (TE)$475 $521 $414 (8.8)%14.7 %
Noninterest income366 407 394 (10.1)(7.1)
Total revenue (TE)841 928 808 (9.4)4.1 
Provision for credit losses80 165 41 (51.5)95.1 
Noninterest expense428 461 414 (7.2)3.4 
Income (loss) before income taxes (TE)333 302 353 10.3 (5.7)
Allocated income taxes and TE adjustments69 52 69 32.7 —
Net income (loss) attributable to Key$264 $250 $284 5.6 %(7.0)%
Average balances
Loans and leases$76,306 $74,100 $64,684 3.0 %18.0 %
Loans held for sale876 1,377 1,323 (36.4)(33.8)
Total assets85,852 84,615 74,816 1.5 14.8 
Deposits52,185 54,385 57,241 (4.0)%(8.8)%
TE = Taxable Equivalent

Additional Commercial Bank Data
Dollars in millionsChange 1Q23 vs.
1Q234Q221Q224Q221Q22
Noninterest income
Trust and investment services income$27 $29 $31 (6.9)%(12.9)%
Investment banking and debt placement fees145 172 162 (15.7)(10.5)
Cards and payments income20 19 22 5.3 (9.1)
Service charges on deposit accounts27 30 36 (10.0)(25.0)
Corporate services income69 81 82 (14.8)(15.9)
Commercial mortgage servicing fees46 42 36 9.5 27.8 
Operating lease income and other leasing gains24 23 32 4.3 (25.0)
Other noninterest income8 11 (7)(27.3)214.3 
Total noninterest income$366 $407 $394 (10.1)%(7.1)%

Commercial Bank Summary of Operations (1Q23 vs. 1Q22)
•Key's Commercial Bank recorded net income attributable to Key of $264 million for the first quarter of 2023 compared to $284 million for the year-ago quarter
•Taxable-equivalent net interest income increased by $61 million, or 14.7%, compared to the first quarter of 2022, reflecting higher interest rates and balance sheet mix
•Average loan and lease balances increased $11.6 billion, or 18.0%, compared to the first quarter of 2022, reflecting growth in commercial and industrial loans and an increase in commercial mortgage real estate loans
•Average deposit balances decreased $5.1 billion compared to the first quarter of 2022, reflecting elevated inflation-related spend, the normalization of pandemic-related deposits, and changing client behavior due to higher interest rates
•Provision for credit losses increased $39 million compared to the first quarter of 2022, as we prepare for more challenging economic conditions
•Noninterest income decreased $28 million from the year-ago quarter, primarily driven by a decline in corporate services income and lower investment banking and debt placement fees
•Noninterest expense increased $14 million from the first quarter of 2022, primarily driven by an increase in salaries and incentive compensation


KeyCorp Reports First Quarter 2023 Profit     
April 20, 2023
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 $198 billion at March 31, 2023.

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 First Quarter 2023 Profit     
April 20, 2023
Page 10

CONTACTS:
ANALYSTSMEDIA
Vernon L. PattersonSusan Donlan
216.689.0520216.471.3133
Vernon_Patterson@KeyBank.comSusan_E_Donlan@KeyBank.com
Adrienne AtkinsonBeth Strauss
216.689.4030216.471.2787
Adrienne.Atkinson@key.comBeth_A_Strauss@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, 2022, 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, the soundness of other financial institutions and the impact of changes in the interest rate environment. 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 10:00 a.m. ET, on April 20, 2023. A replay of the call will be available through April 30, 2023.
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 First Quarter 2023 Profit     
April 20, 2023
Page 11




KeyCorp
First Quarter 2023
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 First Quarter 2023 Profit     
April 20, 2023
Page 12

Financial Highlights
(Dollars in millions, except per share amounts)
Three months ended
3/31/202312/31/20223/31/2022
Summary of operations
Net interest income (TE)$1,106 $1,227 $1,020 
Noninterest income608 671 676 
Total revenue (TE)
1,714 1,898 1,696 
Provision for credit losses139 265 83 
Noninterest expense1,176 1,156 1,070 
Income (loss) from continuing operations attributable to Key311 394 447 
Income (loss) from discontinued operations, net of taxes1 — 1 
Net income (loss) attributable to Key312 394 448 
Income (loss) from continuing operations attributable to Key common shareholders275 356 420 
Income (loss) from discontinued operations, net of taxes1 — 1 
Net income (loss) attributable to Key common shareholders276 356 421 
Per common share
Income (loss) from continuing operations attributable to Key common shareholders$.30 $.38 $.45 
Income (loss) from discontinued operations, net of taxes— — — 
Net income (loss) attributable to Key common shareholders (a)
.30 .38 .46 
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution.30 .38 .45 
Income (loss) from discontinued operations, net of taxes — assuming dilution— — — 
Net income (loss) attributable to Key common shareholders — assuming dilution (a)
.30 .38 .45 
Cash dividends declared.205 .205 .195 
Book value at period end12.70 11.79 14.43 
Tangible book value at period end9.67 8.75 11.41 
Market price at period end12.52 17.42 22.38 
Performance ratios
From continuing operations:
Return on average total assets.66 %.83 %.99 %
Return on average common equity9.85 13.24 11.45 
Return on average tangible common equity (b)
13.16 18.07 14.12 
Net interest margin (TE)2.47 2.73 2.46 
Cash efficiency ratio (b)
68.0 60.3 62.4 
From consolidated operations:
Return on average total assets.66 %.82 %.99 %
Return on average common equity9.89 13.24 11.47 
Return on average tangible common equity (b)
13.21 18.07 14.15 
Net interest margin (TE)2.47 2.73 2.46 
Loan to deposit (c)
84.4 84.7 72.9 
Capital ratios at period end
Key shareholders’ equity to assets7.3 %7.1 %8.5 %
Key common shareholders’ equity to assets6.0 5.8 7.4 
Tangible common equity to tangible assets (b)
4.6 4.4 6.0 
Common Equity Tier 1 (d)
9.1 9.1 9.4 
Tier 1 risk-based capital (d)
10.6 10.6 10.7 
Total risk-based capital (d)
12.8 12.8 12.4 
Leverage (d)
8.8 8.9 8.6 
Asset quality — from continuing operations
Net loan charge-offs
$45 $41 $33 
Net loan charge-offs to average loans
.15 %.14 %.13 %
Allowance for loan and lease losses
$1,380 $1,337 $1,105 
Allowance for credit losses
1,656 1,562 1,271 
Allowance for loan and lease losses to period-end loans
1.15 %1.12 %1.04 %
Allowance for credit losses to period-end loans
1.38 1.31 1.19 
Allowance for loan and lease losses to nonperforming loans332 346 252 
Allowance for credit losses to nonperforming loans398 404 290 
Nonperforming loans at period-end$416 $387 $439 
Nonperforming assets at period-end447 420 467 
Nonperforming loans to period-end portfolio loans.35 %.32 %.41 %
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets.37 .35 .44 
Trust assets
Assets under management$53,689 $51,282 $53,707 
Other data
Average full-time equivalent employees
18,220 18,210 17,110 
Branches
971 972 993 
Taxable-equivalent adjustment
$7 $7 $6 


KeyCorp Reports First Quarter 2023 Profit     
April 20, 2023
Page 13

(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)March 31, 2023, ratio is estimated and reflects Key's election to adopt the CECL optional transition provision.


KeyCorp Reports First Quarter 2023 Profit     
April 20, 2023
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 provides greater consistency and comparability between Key’s results and those of its peer banks. Additionally, this ratio is used by analysts and investors as they develop earnings forecasts and peer bank analysis.

Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although these non-GAAP financial measures are frequently used by investors to evaluate a company, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP.
Three months ended
3/31/202312/31/20223/31/2022
Tangible common equity to tangible assets at period-end
Key shareholders’ equity (GAAP)$14,322 $13,454 $15,308 
Less: Intangible assets (a)
2,836 2,844 2,810 
Preferred Stock (b)
2,446 2,446 1,856 
Tangible common equity (non-GAAP)$9,040 $8,164 $10,642 
Total assets (GAAP)$197,519 $189,813 $181,221 
Less: Intangible assets (a)
2,836 2,844 2,810 
Tangible assets (non-GAAP)$194,683 $186,969 $178,411 
Tangible common equity to tangible assets ratio (non-GAAP)4.64 %4.37 %5.96 %
Pre-provision net revenue
Net interest income (GAAP)$1,099 $1,220 $1,014 
Plus: Taxable-equivalent adjustment7 7 6 
Noninterest income608 671 676 
Less: Noninterest expense1,176 1,156 1,070 
Pre-provision net revenue from continuing operations (non-GAAP)$538 $742 $626 
Average tangible common equity
Average Key shareholders' equity (GAAP)$13,817 $13,168 $16,780 
Less: Intangible assets (average) (c)
2,841 2,851 2,814 
Preferred stock (average)2,500 2,500 1,900 
Average tangible common equity (non-GAAP)$8,476 $7,817 $12,066 
Return on average tangible common equity from continuing operations
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP)$275 $356 $420 
Average tangible common equity (non-GAAP)8,476 7,817 12,066 
Return on average tangible common equity from continuing operations (non-GAAP)13.16 %18.07 %14.12 %
Return on average tangible common equity consolidated
Net income (loss) attributable to Key common shareholders (GAAP)$276 $356 $421 
Average tangible common equity (non-GAAP)8,476 7,817 12,066 
Return on average tangible common equity consolidated (non-GAAP)13.21 %18.07 %14.15 %






KeyCorp Reports First Quarter 2023 Profit     
April 20, 2023
Page 15

GAAP to Non-GAAP Reconciliations (continued)
(Dollars in millions)
Three months ended
3/31/202312/31/20223/31/2022
Cash efficiency ratio
Noninterest expense (GAAP)$1,176 $1,156 $1,070 
Less: Intangible asset amortization10 12 11 
Adjusted noninterest expense (non-GAAP)$1,166 $1,144 $1,059 
Net interest income (GAAP)$1,099 $1,220 $1,014 
Plus: Taxable-equivalent adjustment7 7 6 
Noninterest income608 671 676 
Total taxable-equivalent revenue (non-GAAP)$1,714 $1,898 $1,696 
Cash efficiency ratio (non-GAAP)68.0 %60.3 %62.4 %
(a)For the three months ended March 31, 2023, December 31, 2022, and March 31, 2022, intangible assets exclude $1 million, $2 million, and $2 million, respectively, of period-end purchased credit card receivables.
(b)Net of capital surplus.
(c)For the three months ended March 31, 2023, December 31, 2022, and March 31, 2022, average intangible assets exclude $1 million, $2 million, and $3 million, respectively, of average purchased credit card receivables.
GAAP = U.S. generally accepted accounting principles



KeyCorp Reports First Quarter 2023 Profit     
April 20, 2023
Page 16

Consolidated Balance Sheets
(Dollars in millions)
3/31/202312/31/20223/31/2022
Assets
Loans$119,971 $119,394 $106,600 
Loans held for sale1,211 963 1,170 
Securities available for sale39,498 39,117 43,681 
Held-to-maturity securities9,561 8,710 6,871 
Trading account assets1,118 829 848 
Short-term investments8,410 2,432 3,881 
Other investments1,587 1,308 722 
Total earning assets181,356 172,753 163,773 
Allowance for loan and lease losses(1,380)(1,337)(1,105)
Cash and due from banks784 887 684 
Premises and equipment628 636 647 
Goodwill2,752 2,752 2,694 
Other intangible assets85 94 118 
Corporate-owned life insurance4,372 4,369 4,340 
Accrued income and other assets8,512 9,223 9,544 
Discontinued assets410 436 526 
Total assets$197,519 $189,813 $181,221 
Liabilities
Deposits in domestic offices:
Interest-bearing deposits106,841 101,761 98,239 
Noninterest-bearing deposits37,307 40,834 50,424 
Total deposits144,148 142,595 148,663 
Federal funds purchased and securities sold under repurchase agreements 1,374 4,077 599 
Bank notes and other short-term borrowings10,061 5,386 2,222 
Accrued expense and other liabilities4,861 4,994 3,615 
Long-term debt22,753 19,307 10,814 
Total liabilities183,197 176,359 165,913 
Equity
Preferred stock2,500 2,500 1,900 
Common shares1,257 1,257 1,257 
Capital surplus6,207 6,286 6,214 
Retained earnings15,700 15,616 14,793 
Treasury stock, at cost(5,868)(5,910)(5,927)
Accumulated other comprehensive income (loss)(5,474)(6,295)(2,929)
Key shareholders’ equity14,322 13,454 15,308 
Total liabilities and equity$197,519 $189,813 $181,221 
Common shares outstanding (000)935,229 933,325 932,398 
    





KeyCorp Reports First Quarter 2023 Profit     
April 20, 2023
Page 17

Consolidated Statements of Income
(Dollars in millions, except per share amounts)
Three months ended
3/31/202312/31/20223/31/2022
Interest income
Loans$1,476 $1,347 $837 
Loans held for sale13 20 12 
Securities available for sale194 195 173 
Held-to-maturity securities74 64 46 
Trading account assets12 10 6 
Short-term investments42 48 4 
Other investments13 11 2 
Total interest income1,824 1,695 1,080 
Interest expense
Deposits350 186 14 
Federal funds purchased and securities sold under repurchase agreements22 16 — 
Bank notes and other short-term borrowings78 54 3 
Long-term debt275 219 49 
Total interest expense725 475 66 
Net interest income1,099 1,220 1,014 
Provision for credit losses139 265 83 
Net interest income after provision for credit losses960 955 931 
Noninterest income
Trust and investment services income128 126 136 
Investment banking and debt placement fees145 172 163 
Cards and payments income81 85 80 
Service charges on deposit accounts67 71 91 
Corporate services income76 89 91 
Commercial mortgage servicing fees46 42 36 
Corporate-owned life insurance income29 33 31 
Consumer mortgage income11 9 21 
Operating lease income and other leasing gains25 24 32 
Other income— 20 (5)
Total noninterest income608 671 676 
Noninterest expense
Personnel701 674 630 
Net occupancy70 72 73 
Computer processing92 82 77 
Business services and professional fees45 60 53 
Equipment22 20 23 
Operating lease expense20 22 28 
Marketing21 31 28 
Other expense205 195 158 
Total noninterest expense1,176 1,156 1,070 
Income (loss) from continuing operations before income taxes392 470 537 
Income taxes81 76 90 
Income (loss) from continuing operations311 394 447 
Income (loss) from discontinued operations, net of taxes1 — 1 
Net income (loss)312 394 448 
Net income (loss) attributable to Key$312 $394 $448 
Income (loss) from continuing operations attributable to Key common shareholders$275 $356 $420 
Net income (loss) attributable to Key common shareholders276 356 421 
Per common share
Income (loss) from continuing operations attributable to Key common shareholders$.30 $.38 $.45 
Income (loss) from discontinued operations, net of taxes— — — 
Net income (loss) attributable to Key common shareholders (a)
.30 .38 .46 
Per common share — assuming dilution
Income (loss) from continuing operations attributable to Key common shareholders$.30 $.38 $.45 
Income (loss) from discontinued operations, net of taxes— — — 
Net income (loss) attributable to Key common shareholders (a)
.30 .38 .45 
Cash dividends declared per common share$.205 $.205 $.195 
Weighted-average common shares outstanding (000)926,490 924,974 922,941 
Effect of common share options and other stock awards7,314 8,750 10,692 
Weighted-average common shares and potential common shares outstanding (000) (b)
933,804 933,724 933,634 
(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 First Quarter 2023 Profit     
April 20, 2023
Page 18

Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations
(Dollars in millions)
First Quarter 2023Fourth Quarter 2022First Quarter 2022
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)
$60,281 $807 5.42 %$58,212 $712 4.85 %$51,574 $410 3.22 %
Real estate — commercial mortgage16,470 224 5.52 16,445 208 5.01 14,587 121 3.37 
Real estate — construction2,525 39 6.30 2,450 35 5.70 2,027 17 3.37 
Commercial lease financing3,783 27 2.87 3,825 26 2.71 3,942 24 2.41 
Total commercial loans83,059 1,097 5.35 80,932 981 4.81 72,130 572 3.21 
Real estate — residential mortgage21,436 172 3.21 21,128 164 3.11 16,309 112 2.75 
Home equity loans7,879 106 5.47 7,890 103 5.18 8,345 74 3.61 
Consumer direct loans6,439 75 4.71 6,713 75 4.45 5,954 61 4.16 
Credit cards983 32 13.37 993 31 12.61 932 24 10.36 
Consumer indirect loans41 1 1.24 46 — — 92 — — 
Total consumer loans36,778 386 4.23 36,770 373 4.05 31,632 271 3.45 
Total loans119,837 1,483 5.01 117,702 1,354 4.57 103,762 843 3.28 
Loans held for sale907 13 5.86 1,421 20 5.63 1,485 12 3.32 
Securities available for sale (b), (e)
39,172 194 1.72 39,149 195 1.70 44,923 173 1.50 
Held-to-maturity securities (b)
8,931 74 3.32 8,278 64 3.07 7,188 46 2.54 
Trading account assets1,001 12 4.86 863 10 4.57 842 6 2.74 
Short-term investments3,532 42 4.80 3,159 48 6.02 7,323 4 .25 
Other investments (e)
1,309 13 4.01 1294 11 3.15 651 2 1.26 
Total earning assets174,689 1,831 4.09 171,866 1,702 3.79 166,174 1,086 2.62 
Allowance for loan and lease losses(1,336)(1,145)(1,056)
Accrued income and other assets17,498 18,421 17,471 
Discontinued assets419 447 539 
Total assets$191,270 $189,589 $183,128 
Liabilities
Money market deposits$33,853 $78 .94 %$34,921 $35 .40 %$37,233 $4 .04 %
Demand deposits52,365 183 1.42 50,877 119 .93 51,282 7 .06 
Savings deposits7,346 1 .03 7,795 1 .03 7,599 — .01 
Certificates of deposit ($100,000 or more)2,392 16 2.64 1,351 3 .93 1,639 2 .44 
Other time deposits8,106 72 3.61 4,757 28 2.33 2,098 1 .15 
Total interest-bearing deposits104,062 350 1.36 99,701 186 .74 99,851 14 .06 
Federal funds purchased and securities sold under repurchase agreements2,087 22 4.34 1,752 16 3.52 287 — .13 
Bank notes and other short-term borrowings6,597 78 4.80 5,420 54 3.94 705 3 1.94 
Long-term debt (f), (g)
20,141 275 5.47 18,351 219 4.77 10,830 49 1.79 
Total interest-bearing liabilities132,887 725 2.20 125,224 475 1.50 111,673 66 .24 
Noninterest-bearing deposits39,343 45,965 50,312 
Accrued expense and other liabilities4,804 4,785 3,824 
Discontinued liabilities (g)
419 447 539 
Total liabilities$177,453 $176,421 $166,348 
Equity
Key shareholders’ equity$13,817 $13,168 $16,780 
Noncontrolling interests— — — 
Total equity13,817 13,168 16,780 
Total liabilities and equity$191,270 $189,589 $183,128 
Interest rate spread (TE)1.89 %2.28 %2.38 %
Net interest income (TE) and net interest margin (TE)$1,106 2.47 %$1,227 2.73 %$1,020 2.46 %
TE adjustment (b)
776
Net interest income, GAAP basis$1,099 $1,220 $1,014 
(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 March 31, 2023, December 31, 2022, and March 31, 2022.
(c)For purposes of these computations, nonaccrual loans are included in average loan balances.
(d)Commercial and industrial average balances include $178 million, $171 million, and $141 million of assets from commercial credit cards for the three months ended March 31, 2023, December 31, 2022, and March 31, 2022, 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 First Quarter 2023 Profit     
April 20, 2023
Page 19

Noninterest Expense
(Dollars in millions)
Three months ended
3/31/202312/31/20223/31/2022
Personnel (a)
$701 $674 $630 
Net occupancy70 72 73 
Computer processing92 82 77 
Business services and professional fees45 60 53 
Equipment22 20 23 
Operating lease expense20 22 28 
Marketing21 31 28 
Other expense205 195 158 
Total noninterest expense$1,176 $1,156 $1,070 
Average full-time equivalent employees (b)
18,220 18,210 17,110 
(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 ended
3/31/202312/31/20223/31/2022
Salaries and contract labor$419 $407 $348 
Incentive and stock-based compensation152 171 183 
Employee benefits99 94 97 
Severance31 2 2 
Total personnel expense$701 $674 $630 



KeyCorp Reports First Quarter 2023 Profit     
April 20, 2023
Page 20

Loan Composition
(Dollars in millions)
Change 3/31/2023 vs.
3/31/202312/31/20223/31/202212/31/20223/31/2022
Commercial and industrial (a)
$60,565 $59,647 $52,815 1.5 %14.7 %
Commercial real estate:
Commercial mortgage16,348 16,352 15,124 — 8.1 
Construction2,590 2,530 2,065 2.4 25.4 
Total commercial real estate loans18,938 18,882 17,189 .3 10.2 
Commercial lease financing (b)
3,763 3,936 3,916 (4.4)(3.9)
Total commercial loans83,266 82,465 73,920 1.0 12.6 
Residential — prime loans:
Real estate — residential mortgage21,632 21,401 17,181 1.1 25.9 
Home equity loans7,706 7,951 8,258 (3.1)(6.7)
Total residential — prime loans29,338 29,352 25,439 — 15.3 
Consumer direct loans6,359 6,508 6,249 (2.3)1.8 
Credit cards969 1,026 930 (5.6)4.2 
Consumer indirect loans39 43 62 (9.3)(37.1)
Total consumer loans36,705 36,929 32,680 (.6)12.3 
Total loans (c), (d)
$119,971 $119,394 $106,600 .5 %12.5 %
(a)Loan balances include $185 million, $172 million, and $147 million of commercial credit card balances at March 31, 2023, December 31, 2022, and March 31, 2022, respectively.
(b)Commercial lease financing includes receivables held as collateral for a secured borrowing of $6 million, $8 million, and $14 million at March 31, 2023, December 31, 2022, and March 31, 2022, respectively. Principal reductions are based on the cash payments received from these related receivables.
(c)Total loans exclude loans of $407 million at March 31, 2023, $434 million at December 31, 2022, and $531 million at March 31, 2022, related to the discontinued operations of the education lending business.
(d)Accrued interest of $487 million, $417 million, and $192 million at March 31, 2023, December 31, 2022, and March 31, 2022, 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)
Change 3/31/2023 vs.
3/31/202312/31/20223/31/202212/31/20223/31/2022
Commercial and industrial$351 $477 $216 (26.4)%62.5 %
Real estate — commercial mortgage815 427 819 90.9 (0.5)
Commercial lease financing— 35 — N/MN/M
Real estate — residential mortgage45 24 114 87.5 (60.5)
Total loans held for sale$1,211 $963 $1,170 25.8 %3.5 %
N/M = Not Meaningful
Summary of Changes in Loans Held for Sale
(Dollars in millions)
1Q234Q223Q222Q221Q22
Balance at beginning of period$963 $1,048 $1,306 $1,170 $2,729 
New originations1,779 3,158 2,157 2,837 2,724 
Transfers from (to) held to maturity, net(13)(48)— (57)— 
Loan sales(1,518)(3,124)(2,446)(2,506)(4,269)
Loan draws (payments), net— (71)26 (133)(12)
Valuation and other adjustments— — 5 (5)(2)
Balance at end of period$1,211 $963 $1,048 $1,306 $1,170 
    




KeyCorp Reports First Quarter 2023 Profit     
April 20, 2023
Page 21

Summary of Loan and Lease Loss Experience From Continuing Operations
(Dollars in millions)
Three months ended
3/31/202312/31/20223/31/2022
Average loans outstanding$119,837 $117,702 $103,762 
Allowance for loan and lease losses at the beginning of the period1,337 1,144 1,061 
Loans charged off:
Commercial and industrial35 35 30 
Real estate — commercial mortgage5 13 4 
Real estate — construction— — — 
Total commercial real estate loans5 13 4 
Commercial lease financing(1)— 2 
Total commercial loans39 48 36 
Real estate — residential mortgage— — (1)
Home equity loans1 — 1 
Consumer direct loans11 9 7 
Credit cards9 8 7 
Consumer indirect loans— 2 1 
Total consumer loans21 19 15 
Total loans charged off60 67 51 
Recoveries:
Commercial and industrial8 18 11 
Real estate — commercial mortgage— 1 1 
Real estate — construction— — — 
Total commercial real estate loans— 1 1 
Commercial lease financing1 2 — 
Total commercial loans9 21 12 
Real estate — residential mortgage1 3 — 
Home equity loans1 — 1 
Consumer direct loans2 1 2 
Credit cards1 1 2 
Consumer indirect loans1 — 1 
Total consumer loans6 5 6 
Total recoveries15 26 18 
Net loan charge-offs(45)(41)(33)
Provision (credit) for loan and lease losses88 234 77 
Allowance for loan and lease losses at end of period$1,380 $1,337 $1,105 
Liability for credit losses on lending-related commitments at beginning of period225 194 160 
Provision (credit) for losses on lending-related commitments51 31 6 
Liability for credit losses on lending-related commitments at end of period (a)
$276 $225 $166 
Total allowance for credit losses at end of period$1,656 $1,562 $1,271 
Net loan charge-offs to average total loans.15 %.14 %.13 %
Allowance for loan and lease losses to period-end loans1.15 1.12 1.04 
Allowance for credit losses to period-end loans1.38 1.31 1.19 
Allowance for loan and lease losses to nonperforming loans332 345 252 
Allowance for credit losses to nonperforming loans398 404 290 
Discontinued operations — education lending business:
Loans charged off$1 $2 $2 
Recoveries— — — 
Net loan charge-offs$(1)$(2)$(2)
(a)Included in "Accrued expense and other liabilities" on the balance sheet.


KeyCorp Reports First Quarter 2023 Profit     
April 20, 2023
Page 22

Asset Quality Statistics From Continuing Operations
(Dollars in millions)
1Q234Q223Q222Q221Q22
Net loan charge-offs$45 $41 $43 $44 $33 
Net loan charge-offs to average total loans.15 %.14 %.15 %.16 %.13 %
Allowance for loan and lease losses$1,380 $1,337 $1,144 $1,099 $1,105 
Allowance for credit losses (a)
1,656 1,562 1,338 1,272 1,271 
Allowance for loan and lease losses to period-end loans1.15 %1.12 %.98 %.98 %1.04 %
Allowance for credit losses to period-end loans1.38 1.31 1.15 1.13 1.19 
Allowance for loan and lease losses to nonperforming loans332 346 293 256 252 
Allowance for credit losses to nonperforming loans398 404 343 297 290 
Nonperforming loans at period end$416 $387 $390 $429 $439 
Nonperforming assets at period end447 420 419 463 467 
Nonperforming loans to period-end portfolio loans.35 %.32 %.34 %.38 %.41 %
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets
.37 .35 .36 .41 .44 
        
(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)
3/31/202312/31/20229/30/20226/30/20223/31/2022
Commercial and industrial$170 $174 $169 $197 $186 
Real estate — commercial mortgage59 21 34 35 40 
Real estate — construction— — — — — 
Total commercial real estate loans59 21 34 35 40 
Commercial lease financing1 1 2 2 3 
Total commercial loans230 196 205 234 229 
Real estate — residential mortgage75 77 66 67 73 
Home equity loans104 107 112 120 129 
Consumer direct loans3 3 3 3 4 
Credit cards3 3 3 3 3 
Consumer indirect loans1 1 1 2 1 
Total consumer loans186 191 185 195 210 
Total nonperforming loans (a)
416 387 390 429 439 
OREO13 13 12 9 8 
Nonperforming loans held for sale18 20 17 25 20 
Other nonperforming assets— — — — — 
Total nonperforming assets$447 $420 $419 $463 $467 
Accruing loans past due 90 days or more55 60 47 41 55 
Accruing loans past due 30 through 89 days164 180 187 137 122 
Nonperforming assets from discontinued operations — education lending business 3 3 3 3 4 
Nonperforming loans to period-end portfolio loans.35 %.32 %.34 %.38 %.41 %
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets
.37 .35 .36 .41 .44 
(a)On January 1, 2023, Key adopted ASU 2022-02 Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. In connection with the adoption of this guidance, nonperforming loans as of March 31, 2023, includes certain loans which were modified for borrowers experiencing financial difficulty. Prior period amounts included nonperforming troubled debt restructurings (TDRs), for which accounting guidance was eliminated upon adoption of ASU 2022-02 on January 1, 2023. Our first quarter 2023 Form 10-Q will include additional information on our adoption of this ASU.

Summary of Changes in Nonperforming Loans From Continuing Operations
(Dollars in millions)
1Q234Q223Q222Q221Q22
Balance at beginning of period$387 $390 $429 $439 $454 
Loans placed on nonaccrual status143 113 80 118 87 
Charge-offs(60)(67)(68)(59)(50)
Loans sold(2)(4)(3)(8)— 
Payments(31)(22)(29)(35)(27)
Transfers to OREO(2)(1)(1)(2)(1)
Loans returned to accrual status(19)(22)(18)(24)(24)
Balance at end of period$416 $387 $390 $429 $439 


KeyCorp Reports First Quarter 2023 Profit     
April 20, 2023
Page 23

Line of Business Results
(Dollars in millions)
Change 1Q23 vs.
1Q234Q223Q222Q221Q224Q221Q22
Consumer Bank
Summary of operations
Total revenue (TE)$842 $900 $891 $824 $799 (6.4)%5.4 %
Provision for credit losses60 105 37 8 43 (42.9)39.5 
Noninterest expense675 698 667 675 663 (3.3)1.8 
Net income (loss) attributable to Key81 74 142 107 71 9.5 14.1 
Average loans and leases43,086 43,149 42,568 40,827 38,654 (.1)11.5 
Average deposits84,492 87,243 90,044 91,273 91,516 (3.2)(7.7)
Net loan charge-offs24 21 17 23 22 14.3 9.1 
Net loan charge-offs to average total loans.23 %.19 %.16 %.23 %.23 %21.1 — 
Nonperforming assets at period end$196 $202 $195 $203 $217 (3.0)(9.7)
Return on average allocated equity8.98 %8.78 %16.20 %11.66 %8.02 %2.3 12.0 
Commercial Bank
Summary of operations
Total revenue (TE)$841 $928 $889 $842 $808 (9.4)%4.1 %
Provision for credit losses80 165 74 37 41 (51.5)95.1 
Noninterest expense428 461 451 410 414 (7.2)3.4 
Net income (loss) attributable to Key264 250 295 317 284 5.6 (7.0)
Average loans and leases76,306 74,100 71,464 67,825 64,684 3.0 18.0 
Average loans held for sale876 1,377 1,036 1,016 1,323 (36.4)(33.8)
Average deposits52,185 54,385 52,272 54,846 57,241 (4.0)(8.8)
Net loan charge-offs21 25 27 21 11 (16.0)90.9 
Net loan charge-offs to average total loans.11 %.13 %.15 %.12 %.07 %(15.4)57.1 
Nonperforming assets at period end$251 $218 $224 $260 $250 15.1 .4 
Return on average allocated equity10.39 %10.40 %12.63 %14.26 %13.26 %(.1)(21.6)
TE = Taxable Equivalent