8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 11, 2015

(Exact Name of Registrant as Specified in Charter)

001-11302

(Commission File Number)

OHIO	34-6542451
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)

127 Public Square

Cleveland, Ohio 44114-1306

(Address of principal executive offices and zip code)

(216) 689-3000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure

KeyCorp will review its performance, strategy and outlook, including the performance, strategy and outlook of Key Community Bank, at the Credit Suisse Financial Services Forum on February 11, 2015. A copy of the slides forming the basis of the presentation is attached hereto as Exhibit 99.1 and will be posted on KeyCorp’s website in connection with the conference. These slides are also expected to be provided or referred to at related investor events on February 11, 2015.

The information in this Item 7.01 and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section, nor shall it be deemed incorporated by reference into the filings of KeyCorp under the Securities Act of 1933, as amended.

Item 9.01 Exhibits

Exhibit Number	Description
99.1	KeyCorp Presentation Slides, Credit Suisse Financial Services Forum

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	KeyCorp
Date: February 10, 2015
	/s/ Robert L. Morris
	By:	Robert L. Morris
		Chief Accounting Officer

EX-99.1

KeyCorp

Credit Suisse Financial Services Forum

February 11, 2015

Don Kimble

Chief Financial Officer

Exhibit 99.1

Dennis Devine

Co-President,             

Key Community Bank

FORWARD-LOOKING STATEMENTS AND ADDITIONAL

INFORMATION DISCLOSURE

2

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, actualresults 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.

2014 Highlights

2014

shareholder

payout

of

82%

(a)

Repurchased $496 MM of common shares in

2014

(a)

Increased quarterly common share dividend by

18% during 2014

Maintaining peer-leading capital position

EPS up 12%; generated positive operating leverage

Total average loans up 5% from prior year

Noninterest income up 2% with positive trends in

several fee-based businesses

Expenses well-controlled, down 2% from prior year

Positive

Operating

Leverage

Strong Risk

Management

Disciplined

Capital

Management

Note: Graphs not to scale

Average Loans ($)

Net Charge-offs ($)

Asset quality remains strong, with NCOs below

targeted range

New business originations are higher quality than

overall book

Remaining disciplined with structure and

relationship focus

2013

2014

Down 33%

Total up 5%

CF&A up 11%

2013

2014

2013

2014

Our relationship strategy has translated into measurable results

20 bps

32 bps

NCOs to average loans

3

Tier

1

Common

Equity

(b)

11.2%

12/31/14

(a)

Shareholder payout defined as repurchase of common shares and cash dividends paid as a percentage of net income attributable to Key; shareholder

payout and common share repurchase amounts include repurchases to offset issuances of common shares under our employee compensation plans

(b)

12-31-14 ratio is estimated

11.2%

12/31/13

Driving Positive Operating Leverage

Executing action plans across our organization to improve efficiency

Revenue Growth

Expense Savings

Acquiring and expanding relationships to grow revenue in our

businesses

•

New

vertical

and

expertise:

technology

•

New

product

launches:

Hassle-Free,

purchase

card,

prepaid card

•

Adding bankers

•

Enhanced sales management process 

Retail

sales / FTE / day

21%

Improving Productivity

Strengthening Products and Capabilities

Corporate Bank

expanded

relationships

8%

Continuous improvement efforts enable identification and

execution of expense savings

Occupancy

Right-sizing

Operational Efficiencies

•

Optimizing branch count:

continued net reduction

•

Reducing non-branch square footage:                          

plans to reduce 15% of non-branch                              

square footage by 2016

•

FTE

remixing:

support,

sales

and

service

•

Business

realignment:

exit

of

Victory

and

international

leasing, reduction of fixed income trading platform

•

Lean

Six

Sigma:

end-to-end

process

improvements

Total FTE:

6%

4

2013

2014

2013

2014

Notes:  Graphs not to scale

Retail sales / FTE / day excludes Key Investment Services and mortgage

2013

2014

5

Maintaining a Moderate Risk Profile

Enterprise-wide risk management approach drives quality

Targeted, Relationship-based Approach

Strong Asset Quality

•

Target specific segments and sectors where we

have expertise

•

Execute rigorous and disciplined sales approach

•

Clearly defined and well understood risk appetite

and tolerances

•

Risk management principles applied actively

Key

Peer median

(a)

(a)

Source:

SNL;

Peers

include

BBT,

CMA,

FITB,

FHN,

HBAN,

MTB,

PBCT,

PNC,

RF,

STI,

USB

and

ZION

Over the past 17 quarters,

Key has been lower than

peer median

Key NPAs

NPAs  down

41% from 4Q12

Peer Median

(a)

NPAs, % of period-end assets

Key NPAs, % of period-end assets

$ in millions

Nonperforming Assets

Net Charge-offs to Average Loans

0.0%

1.0%

2.0%

3.0%

4.0%

$735

$531

$436

0.00%

0.50%

1.00%

1.50%

$0

$200

$400

$600

$800

4Q12

4Q13

4Q14

•

Quarterly

common

share

dividend:

increased

18%

in

2Q14

Disciplined Capital Management

Strong Capital Position

Peer-leading Return

Capital

Priorities

Organic

Growth

Dividends

Share

Repurchases

Opportunistic

Growth

Disciplined in how we manage, invest, deploy and return our strong capital position

(a)

Non-GAAP measure: 12-31-14 ratio is estimated; see slides 33-34 for reconciliations

(b)

Shareholder payout defined as repurchase of common shares and cash dividends paid as a percentage of net income attributable to Key; shareholder payout and

common share repurchase amounts include repurchases to offset issuances of common shares under our employee compensation plans; peer group payout ratio

calculations and estimations based upon 2013 and 2014 CCAR submissions and generally available industry data

10.7% under Basel III Regulatory Capital Rules

2014

payout

of

82%:

estimated

to

be

among

the

highest

in

our

peer group for the second consecutive year

Tier 1 Common Equity

(a)

Book Value per Share

Shareholder Payout

(b)

Up

10%

from

4Q12

6

$.055

$.065

1Q14

2Q14

•

Share

repurchases:

repurchased

$496

MM

shares

in

2014

$485 MM

$496 MM

2013

2014

11.36%

11.22%

11.18%

4Q12

4Q13

4Q14

$10.78

$11.25

$11.91

4Q12

4Q13

4Q14

Outlook and Expectations

Average Loans

Mid-single digit growth vs. FY 2013

•

Mid-single digit growth vs. FY 2014

Net Interest Income

Relatively stable from 2013, with slight

downward pressure from competitive

environment

•

Up low-to-mid single digit percentage vs. FY 2014

(low

single-digits without the benefit of higher rates)

•

NIM stable-to-slightly higher later in the year

Noninterest Income

Low single-digit growth compared to

prior year

•

Mid-single digit growth compared to 2014, including full

year impact of Pacific Crest

Expense

Low to mid-single digit percentage

decline from 2013

•

Relatively stable with 2014

Efficiency /

Productivity

Positive operating leverage

•

Positive operating leverage

Asset Quality

Net charge-offs to average loans

below targeted range of  40 –

60 bps

•

Net charge-offs to average loans below targeted range

of 40 –

60 bps 

•

Provision expected to approximate net charge-offs

Capital

Disciplined execution of 2014 capital

plan, including dividends and share

repurchases

•

Disciplined management of capital including dividends

and share repurchases

7

Guidance

ranges:

relatively

stable:

+/-

2%;

low

single-digit:

<5%;

mid-single

digit:

4%

-

6%;

low

double-digit:

10%

-

13%

FY 2014

FY 2015

A local relationship bank serving retail, private banking and business clients

Key’s Community Bank Franchise

Key Community Bank

Key 2014 Revenue

Business

Description

Provides deposit, investment,

and loan products to clients

through our ~1,000 branches

and 1,200+ ATMs spanning 

12 states

Offers financial, estate and

retirement planning, asset

management, and trust

capabilities to support

banking, insurance, charitable

giving, and other needs

Offers deposit, investment,

commercial lending, cash

management, equipment

finance, employee benefit

programs, and access to

capital markets

Retail and

Business

Banking

Private

Banking

Commercial

Banking

Community Bank

Other

Corporate Bank

•

Individuals and

families

•

Small businesses

(client revenue  

< $10 MM)

•

High net worth

individuals and

families

•

Business

relationships

•

Businesses with

client revenue of

approx. $10 MM

to  $500 MM

Clients

8

54%

40%

6%

Leveraging our Model and Geographic Diversity

Local leadership and local delivery

Consistent client experience and relationship strategy

Consistent sales management process

Western Markets

Eastern Markets

Foundational to Strategy and Delivery

•

Deposits: $16 B

•

Branches: 382

•

Demographic: younger with high growth potential

•

Strong consumer lending

•

Healthcare, technology and consumer/retail industry expertise

supports high growth markets

•

Deposits: $31 B

•

Branches: 612

•

Demographic: mature population with established wealth

•

Strong wealth management presence

•

Industrial/manufacturing and healthcare expertise aligns with

market opportunity

Notes:  Deposits and branch count as of 4Q14

Delivering

a

consistent

strategy

across

our

franchise

while

also

leveraging

market-

specific opportunities

Collaboration to deliver all of Key

Growth orientation

Moderate risk appetite

9

Denotes MSA’s with greater than $3B in market deposits, branches capped at $250MM and Key has a Top 5 market share (i.e., Akron, Albany,  

Anchorage, Boise, Buffalo, Burlington, Canton, Cleveland, Dayton, Denver, Portland (ME), Salt Lake City, Seattle, South Bend, Syracuse and 

Toledo); source: FDIC Summary of Deposits Annual Survey, June 30, 2014 

Community Bank: Retail Priorities

10

Acquiring and expanding relationships

with a compelling value proposition

Optimizing channels and

investing in our digital future

Driving Positive Operating Leverage

I

II

III

Driving Positive Operating Leverage

11

Improving productivity and efficiency

Delivering a Consistent, Productive and Efficient Model Across the Franchise

Channel optimization

(branches and digital)

Enhanced playbooks

and relationship

review guides

New coaching

structure and

expectations

Investment in and

alignment of

Licensed RM resources

Active performance

management

Reorganization and

realignment

Positive Momentum

23

districts    

9

Staffing Mix

Retail FTE

December ’12 –

‘14

Sales Productivity

Retail sales/FTE/Day

Core Deposits per Branch

Consumer Loans per Branch

Total,

(17)%

Client-facing,

+16%

Notes:  Sales productivity excludes Key Investment Services and mortgage

Deposit and loan figures represent Key’s consumer segment; core deposits exclude CDs

(1,233)

+391

4Q12

4Q13

4Q14

4Q12

4Q13

4Q14

2012

2013

2014

Utilizing  Lean Six

Sigma

Goals and staffing

tied to market

opportunity

Higher

differentiation for

performance

2014 up 40%

from 2012

4Q14 up 15%

from 4Q12

4Q14 up 19%

from 4Q12

Hassle-Free Checking

•

•

Key Investment Services

•

12

Acquiring and Expanding Relationships

Well-designed and delivered products build engaged client relationships

What We Provide

Recent  Investments and New Products

Expanding

Relationships

Credit Card

•

•

Credit card penetration:

to 19%, from

15% in 1Q13

Clients with a full relationship have higher

revenue and a lower attrition rate

# of Needs Fulfilled (Checking, Savings, Borrowing)

Checking

Savings/

Investments

Borrowing

1

2

3

Targeting full relationship potential with

three primary client needs

Avg. annual revenue per client

Avg. attrition rate

Client revenue

3x higher

1.8x

Growth in new

checking accounts

4Q14 vs. 4Q13

II

Ease

Value

Expertise

29%

higher than

the industry

standard

(a)

Investment

revenue per $ of

retail deposits

(a)

1

2

3

Early results: solid demand and sales volume with new,

high-quality clients

Drives client acquisition, opportunity for expansion

Strengthens core payments relationship offering

Strong sales growth

Investment in people and sales tools, including a new

book management system and retirement planning

platform

Source: Bank Insurance & Securities Association (BISA) Quarterly Productivity and Performance Report; data represents trailing twelve months as of 3Q14;

retail deposits exclude public funds

13

Optimizing Channels

Multi-channel delivery, with investment in digital channels and redefined support of

branches, aligns with changing client preferences

Direct, positive impact

•

•

Realigning Physical Network

Consolidating branches, aligned with changing

client behavior and market dynamics

Changing Client Behavior

Branch count

down 9% from

4Q12

Online and mobile transactions now exceed branch

transactions by 2x

Branch transactions

Online/mobile transactions

4 yr. CAGR: +12%

4 yr. CAGR: (3)%

•

Mobile payments

•

Online targeting and sales

•

Account opening tools

•

Rewards platform

•

Financial analytics

•

Alerts and notifications

•

Enhanced security and

interface

Branches Remain

Important to Clients

Investments Have Shifted

to Digital Channels

Providing real-time solutions

III

Multi-channel Offering

2010

2011

2012

2013

2014

1,088

1,028

994

4Q12

4Q13

4Q14

Deepen personal and

commercial client

relationships across our

franchise

#1 sales generator

Community Bank: Focused Forward

14

Acquiring and expanding relationships

with a compelling value proposition

Optimizing channels and

investing in our digital future

Driving Positive Operating Leverage

Expenses well-controlled:

down 6% from 2012

Core deposits:

up 10% from 2012

Online and mobile

originations:

up 43% from 2012

Revenue per FTE:

up 10% from 2012

Notes:

New client acquisition:

up 37% from 2012

I

II

III

Branches

Digital

(58)%

93%

Investments:

2014 vs. 2012

2012

2013

2014

2012

2013

2014

2012

2013

2014

2012

2013

2014

2012

2013

2014

Revenue, expense and deposit figures represent Key’s consumer segment; expense excludes overhead; core deposits exclude CDs New client growth defined as

consumer new households and excludes in-organic growth from the acquisition of HSBC branches in Western New York Branch investment includes expansion,

remodels, ATMs, maintenance and security; digital investment includes planning, design and building costs Online and mobile originations include new account

openings of loan and deposit products

Appendix

15

Cross-business collaboration provides additional opportunities across the franchise

Business Model: Aligned and Targeted

Traditional Bank Products

Capital Markets Capabilities

Deposits & payments

Loans

Equipment

finance

Derivatives & foreign

exchange

Equity research

M&A /

financial sponsors /

leveraged finance

Investment grade &

high-yield debt

Loan syndications

Public finance

$3

$50

$1,500

$2,000

Commercial client revenue size ($ MM)

$25

$100

$250

$500

Community Bank

Corporate Bank

Consumer          Energy          Healthcare         Industrial

Public Sector         Real Estate        Technology

Targeted industries

16

Local delivery of broad product set and industry expertise

Differentiated platform with depth and maturity

Competitive advantage

Equity capital markets

Wealth management &

private banking

Commercial mortgage

banking

Progress on Targets for Success

(a) 

(b)

(c)

17

Balance Sheet

Efficiency

Moderate Risk

Profile

High Quality,

Diverse

Revenue Streams

Positive

Operating

Leverage

Disciplined

Capital

Management

Metrics

(a)

4Q14

3Q14

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

85%

87%

.22%

.22%

64.4%

69.5%

1.12%

.92%

.15%

.15%

2.94%

2.96%

45%

42%

90% -100%

40 -

60 bps

LT: >

3.50%

LT:

<

60%

1.00% -1.25%

>

40%

Excludes intangible asset amortization; non-GAAP measure: see slides 33-34 for reconciliation

Represents period-end consolidated total loans and loans held for sale divided by period-end consolidated total deposits (excluding deposits in foreign office)

Continuing operations, unless otherwise noted

18

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)

12-31-14 ratios are estimated

(e)

Non-GAAP measure: see slides 33-34 for reconciliation

Balance

Sheet

Growth

(a),

(b)

Capital

(c)

Asset

Quality

(a)

Financial

Performance

(a)

EPS –

assuming dilution

$ .28

$ .23

$  .27

$  .26

$  .26

Cash efficiency ratio

(e)

64.4

%

69.5

%

65.8

%

64.9

%

67.4

%

excl. efficiency and pension charges

63.4

66.0

63.4

63.9

65.1

Net interest margin (TE)

2.94

2.96

2.98

3.00

3.01

Return on average total assets

1.12

.92

1.14

1.13

1.08

Total loans and leases

5

%

5

%

6

%

4

%

3

%

CF&A loans

12

11

13

9

8

Deposits (excl. foreign deposits)

2

4

2

4

8

Tier 1 common equity

(d), (e)

11.2

%

11.3

%

11.3

%

11.3

%

11.2

%

Tier 1 risk-based capital

(d)

11.9

12.0

12.0

12.0

12.0

Tangible common equity to tangible assets

(e)

9.9

10.3

10.2

10.1

9.8

NCOs to average loans

.22

%

.22

%

.22

%

.15

%

.27

%

NPLs to EOP portfolio loans

.73

.71

.71

.81

.93

Allowance for loan losses to EOP loans

1.38

1.43

1.46

1.50

1.56

Metrics

4Q14

3Q14

2Q14

1Q14

4Q13

19

Average total loans up 5% in 4Q14 from prior year,

driven by CF&A up 12%

Achieved guidance with FY 2014 average loan

balances up 5%

–

Both commercial and consumer loans up

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

$56.5

$53.6

20

Improving Deposit Mix

Highlights

Funding Cost

Funding cost continues to improve

Transaction deposit balances up 4% from 4Q13

Deposit growth from prior year (+2%) reflects

inflows from commercial clients as well as

commercial mortgage servicing

Large commercial client inflows drove balances 2%

higher than 3Q14

Average

Deposits

(a)

$ in billions

(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

$69.1

$67.8

Note: Transaction deposits include noninterest-bearing, as well as NOW and MMDA

21

Net Interest Income and Margin

TE = Taxable equivalent

Highlights

Net Interest Income & Net Interest Margin Trend (TE)

Net interest income relatively stable with prior year,

as loan growth and a more favorable mix of lower-

cost deposits mostly offset lower earning asset

yields

Modest growth from prior quarter (up 1%) driven by

higher earning asset levels and loan fees, which

more than offset lower earning 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.  3Q14

Higher levels of liquidity

(.03)

Lower earning asset yields

(.03)

Growth in commercial loans & HFS

.04    

Total Change

(.02)

Net interest income (TE)

NIM (TE)

$ in millions; continuing operations

$589

$588

3.01%

2.94%

2.00%

2.50%

3.00%

3.50%

4.00%

$500

$540

$580

$620

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

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 42% of total portfolio

•

Reinvesting cash flows into GNMAs

Size of swap

portfolio

Modeled asset

sensitivity

Flexibility to Adjust Rate

Sensitivity with Swaps

Loan Portfolio

Variable:

69%

Fixed:

31%

Deposits

(a)

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: 38%

Interest-

bearing, non-

time: 54%

CDs:

8%

•

Maintaining

moderate

asset

sensitive

position

of

~3%

(b)

-

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

4Q14

$18 B

Balance sheet has relatively short duration and is

more impacted by the short-end of the curve

22

Actively managing a naturally asset sensitive balance sheet

(a)

Excludes deposits in foreign office

(b)

Preliminary estimate

4Q14

4Q14

AFS: $13 B

HTM: $5 B

$10

$17

$5

$5

~3%

0%

~8%

$5

4Q14

$15 B

Swaps

($ in B)

12/31/14

Notional Amt.

Wtd. Avg.

Maturity (Yrs.)

Receive

Rate

Pay

Rate

A/L

Management

$     9.7

1.8

.8%

.2%

Debt

5.2

3.9

2.3

.2

$  14.9

1.3%

.2%

23

Noninterest Income

TE = Taxable equivalent

Highlights

Noninterest Income

Noninterest income up 8% from prior year and up

18% from prior quarter, benefitting from:

–

Momentum in core businesses

–

Record quarter and year for investment

banking and debt placement fees

–

Strategic investments in fee-based

businesses

Full year noninterest income grew 2% from 2013,

driven by core businesses, including investment

banking and debt placement

4Q14 Noninterest Income Diversity

$ in millions; continuing operations

(a)

Other includes corporate-owned life insurance, principal investing, etc.

Leveraged lease termination gains

$490

$453

(a)

Investment Banking & Debt Placement: Record Qtr.

$ in millions; continuing operations

Investment Banking & Debt Placement Fees:

Trailing Twelve Months

$0

$100

$200

$300

$400

23%

26%

13%

9%

11%

2%

3%

13%

Trust & Investment Services

Investment Banking & Debt Placement

Deposit Service Charges

Cards & Payments

Corporate Services

Mortgage Fees

Operating Lease Income

Other

$150

$225

$300

$375

$450

$525

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

$397

24

Focused Expense Management

Noninterest Expense

$ in millions

Highlights

$704

4Q14 Expense Detail

$712

4Q expenses down 1% from prior year, with benefit

from continuous improvement efforts and lower

efficiency charges offsetting growth related to

Pacific Crest acquisition

Expenses down 2% from 2013, achieving full year

guidance and driving positive operating leverage in

2014

Cash efficiency ratio improved to 64% in 4Q14, or

63% excluding pension and efficiency charges

Efficiency charges:

Pension charges:

$15

$37

$16

$22

$10

$2

$25

$24

$ in millions

$704

$15

$20

Pension settlement

Efficiency charges

All remaining expense

Pacific Crest

$712

$704

(a)

Non-GAAP measure: see slides 33-34 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%

2.3%

3.5%

(b)

.8%

$8

$3

1.0%

$400

$500

$600

$700

$800

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

$520

$545

$570

$595

$620

$645

$670

$695

$720

4Q13

3Q14

4Q14

688

22

2

663

15

20

6

676

3

17

8

60%

65%

70%

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

Cash efficiency ratio,

excluding efficiency

and pension charges

25

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 slides 33-34for reconciliation

(b)

Assumes implied forward curve

2-3 year outlook: 60%

Long-term, committed to moving below 60%

(b)

50%

55%

60%

65%

70%

4Q14

Business Growth,               Expense Savings

Net of Investments

Rising Rate Benefit

Long-term Target: <60%

26

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

Currently reinvesting cash flows into GNMA

securities in preparation for upcoming

regulatory liquidity requirements

–

42% of total portfolio was GNMA at

12/31/14

Period-end growth of $1.1 billion from 9/30/2014;

driven by liquidity management strategy and

LCR positioning

Securities cash flows of $.9 billion in both 4Q14     

and 3Q14

Average portfolio life at 12/31/14 of 3.6 years,

unchanged from 9/30/14

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

$17.2

2.25%

$17.1

2.12%

.00%

1.00%

2.00%

3.00%

4.00%

5.00%

$0.0

$5.0

$10.0

$15.0

$20.0

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

18%

20%

10%

14%

18%

22%

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

27

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 14% from 4Q13 to

$32 MM, or 22 bps of average loans

Total gross charge-offs down 26% from 4Q13 and

flat with 3Q14

Nonperforming assets down 18% from prior year

Allowance for Loan and Lease Losses

Allowance for loan and

lease losses to NPLs

Allowance for loan

and lease losses

$ in millions

$531

$436

28

Asset Quality Trends

Quarterly Change in Criticized Outstandings

(a)

Delinquencies to Period-end Total Loans

(a)

Loan and lease outstandings

(b)

From continuing operations

Metric

(b)

4Q14

3Q14

2Q14

1Q14

4Q13

Delinquencies to EOP total loans: 30-89 days

.41

%

.61

%

.49

%

.48

%

.58

%

Delinquencies to EOP total loans: 90+ days

.17

.13

.15

.16

.13

NPLs to EOP portfolio loans

.73

.71

.71

.81

.93

NPAs to EOP portfolio loans + OREO + Other NPAs

.76

.74

.74

.85

.97

Allowance for loan losses to period-end loans

1.38

1.43

1.46

1.50

1.56

Allowance for loan losses to NPLs

190.0

200.5

205.6

185.7

166.9

Continuing operations

Continuing operations

.00%

.25%

.50%

.75%

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

.58%

.41%

.13%

.17%

90+ days delinquent

30 –

89 days delinquent

(11)%

(3)%

(12)%

(10)%

(8)%

(6)%

(4)%

(2)%

0%

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

Credit Quality by Portfolio

Credit Quality

$ in millions

29

N/M = Not meaningful

(a)    12-31-14 ending loan balance includes $88 million of commercial credit card balances; 12-31-14 average loan balance includes $90 million of    

                assets from commercial credit cards

(b)

Net loan charge-off amounts are annualized in calculation

(c)

12-31-14 NPL amount excludes $13 million of purchased credit impaired loans

(d)

12-31-14 allowance by portfolio is estimated

(e)

12-31-14 ending loan balance includes purchased loans of $138 million, of which $13 million were purchased credit impaired

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

(%)

12/31/14

4Q14

4Q14

4Q14

12/31/14

12/31/14

12/31/14

12/31/14

Commercial,

financial

and

agricultural

(a)

$

27,982

$

27,188

$

4

.06

$

59

$

391

1.40

662.71

Commercial real estate:

Commercial Mortgage

8,047

8,161

3

.15

34

148

1.84

435.29

Construction

1,100

1,077

-

-

13

28

2.55

215.38

Commercial lease financing

4,252

4,119

2

.19

18

56

1.32

311.11

Real

estate

–

residential

mortgage

2,225

2,223

3

.54

79

23

1.03

29.11

Home equity

10,633

10,639

6

.22

195

71

.67

36.41

Credit cards

754

728

7

3.81

2

33

4.38

N/M

Consumer

other

–

Key

Community

Bank

1,560

1,552

5

1.28

2

22

1.41

N/M

Consumer

other

–

Exit

Portfolio

828

854

2

.93

16

22

2.66

137.50

Continuing

total

(e)

$

57,381

$

56,541

$

32

.22

$

418

$

794

1.38

189.95

Discontinued operations

2,295

2,328

8

4.85

20

29

1.26

145.00

Consolidated total

$

59,676

$

58,869

$

40

.28

$

438

$

823

1.38

187.90

Oil & Gas

Longstanding history, expertise and relationships

30

Strong Portfolio Characteristics

>10 years of experience in energy lending with >20

specialists dedicated to oil & gas

Focused on middle market companies, aligned with our

relationship strategy

Portfolio regularly stress tested

Primarily secured by proven reserves

Total Loans Outstanding, 12/31/14

>40% of clients’

2015 production is hedged

Relationships contribute to noninterest income; ~5% of FY14

investment banking and debt placement fees

Solid credit quality, with net charge-offs lower than overall

portfolio

Allowance reflects estimated impact of current oil prices

Oil & Gas: 2%

Other: 98%

Oil & Gas Outstanding Balances, 12/31/14

Oilfield Services

Upstream: 67%,

$0.7 B

Midstream: 24%,   

$0.3 B

Downstream: 9%,

$0.1 B

$0.1 B

Oil & Gas

$1.1 B

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

$

6,178

$

66,174

772

67

%

.6  

%

51

%

5%

3%

3%

38

%

Second lien

4,188

54,159

766

76

3.7

34

5

3

4

54

Community Bank

$

10,366

60,358

770

71

1.8

45

5

3

3

44

Exit portfolio

267

16,861

729

80

31.8

1

-

-

-

99

Total home equity portfolio

$

10,633

Nonaccrual loans and lines

First lien

$

116

$

64,539

722

73

%

1.0%

7

%

4%

3%

6%

80

%

Second lien

69

47,343

712

80

2.1

3

2

2

5

88

Community Bank

$

185

56,848

718

77

1.5

6

4

2

5

83

Exit portfolio

10

24,138

699

77

28.9

-

-

-

-

100

Total home equity nonaccruals

$

195

Fourth quarter net charge-offs (NCOs)

Community Bank

$

6

4

%

-

3%

1%

92

%

% of average loans

.22

%

Exit Portfolio

-

-

-

-

-

-

% of average loans

-

(a) Average LTVs are at origination; current average LTVs for Community Bank total home equity loans and lines is approximately 70%, which compares to

71% at the end of the third quarter of 2014

Home Equity Portfolio –

12/31/14

$ 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: 71%

$4.0 billion of the total portfolio are fixed rate loans that require

principal and interest payments; $6.5 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

31

Balance Outstanding

Change

Net Loan Charge-offs

Balance on

Nonperforming Status

12-31-14

9-30-14

12-31-14 vs.           

9-30-14

4Q14

(b)

3Q14

(b)

12-31-14

9-30-14

Residential

properties

–

homebuilder

$          10

$          11

$            (1)

-

$         1

$          9         

$

10         

Marine and RV floor plan

7

7

-

-

-

5

5

Commercial

lease

financing

(a)

967

1,046

(79)

$          3

(1)

1

1

Total commercial loans

984

1,064

(80)

3

-

15

16

Home

equity

–

Other

267

283

(16)

-

1

10

10

Marine

779

828

(49)

3

2

15

16

RV and other consumer

54

57

(3)

(1)

1

1

1

Total consumer loans

1,100

1,168

(68)

2

4

26

27

Total exit loans in loan portfolio

2,084

$     2,232

$        (148)

$        5

$         4

$        41

$        43

Discontinued

operations

–

education

lending

business (not included in exit loans above)

$    2,295

$    2,375

$          (80)

$        8

$         7

$        11

$          9

$ 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)

Credit amounts indicate recoveries exceeded charge-offs

$ in millions

Exit Loan Portfolio

Exit Loan Portfolio

32

$2,984

$2,147

$0

$1,000

$2,000

$3,000

$4,000

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

Three months ended

12-31-14

9-30-14

6-30-14

3-31-14

12-31-13

Tangible common equity to tangible assets at period end

Key shareholders’

equity (GAAP)

$

10,530

$

10,486

$

10,504

$

10,403

$

10,303

Less:

Intangible assets

(a)

1,090

1,105

1,008

1,012

1,014

Preferred Stock, Series A

(b)

282

282

282

282

282

Tangible common equity (non-GAAP) 

$

9,158

$

9,099

$

9,214

$

9,109

$

9,007

Total assets (GAAP)

$

93,821

$

89,784

$

91,798

$

90,802

$

92,934

Less:

Intangible assets

(a)

1,090

1,105

1,008

1,012

1,014

Tangible assets (non-GAAP)

$

92,731

$

88,679

$

90,790

$

89,790

$

91,920

Tangible common equity to tangible assets ratio (non-GAAP)

9.88

%

10.26

%

10.15

%

10.14

%

9.80

%

Tier 1 common equity at period end

Key shareholders’

equity (GAAP)

$

10,530

$

10,486

$

10,504

$

10,403

$

10,303

Qualifying capital securities

340

340

339

339

339

Less:

Goodwill

1,057

1,051

979

979

979

Accumulated other comprehensive income (loss)

(c)

(395)

(366)

(328)

(367)

(394)

Other assets

(d)

89

110

86

84

89

Total Tier 1 capital (regulatory)

10,119

10,031

10,106

10,046

9,968

Less:

Qualifying capital securities

340

340

339

339

339

Preferred Stock, Series A

(b)

282

282

282

282

282

Total Tier 1 common equity (non-GAAP) 

$

9,497

$

9,409

$

9,485

$

9,425

$

9,347

Net risk-weighted assets (regulatory)

(e)

$

84,976

$

83,547

$

84,287

$

83,637

$

83,328

Tier 1 common equity ratio (non-GAAP)

(e)

11.18

%

11.26

%

11.25

%

11.27

%

11.22

%

Pre-provision net revenue

Net interest income (GAAP)

$

582

$

575

$

573

$

563

$

583

Plus:

Taxable-equivalent adjustment

6

6

6

6

6

Noninterest income (GAAP)

490

417

455

435

453

Less:

Noninterest expense (GAAP)

704

704

689

662

712

Pre-provision net revenue from continuing operations (non-GAAP)

$

374

$

294

$

345

$

342

$

330

GAAP to Non-GAAP Reconciliation

$ in millions

33

a)

Three months ended December 31, 2014, September 30, 2014, June 30, 2014, March 31, 2014, and December 31, 2013 exclude $68 million, $72 million, $79

million, $84 million, and $92 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 December 31, 2014, September 30, 2014, June 30, 2014, March 31, 2014, and

December 31, 2013

e)

12-31-14 amount is estimated

Three months ended

12-31-14

9-30-14

6-30-14

3-31-14

12-31-13

Average tangible common equity

Average

Key

shareholders’

equity

(GAAP)

$

10,562

$

10,473

$

10,459

$

10,371

$

10,272

Less:

Intangible assets (average)

(a)

1,096

1,037

1,010

1,013

1,016

Preferred Stock, Series A (average)

291

291

291

291

291

Average tangible common equity (non-GAAP)

$

9,175

$

9,145

$

9,158

$

9,067

$

8,965

Net

income

(loss)

from

continuing

operations

attributable

to

Key

common

shareholders (GAAP)

$

246

$

197

$

242

$

232

$

229

Average

tangible

common

equity

(non-GAAP)

9,175

9,145

9,158

9,067

8,965

Return

on

average

tangible

common

equity

from

continuing

operations

(non-GAAP)

10.64

%

8.55

%

10.60

%

10.38

%

10.13

%

Return on average tangible common equity consolidated

Net income (loss) attributable to Key common shareholders (GAAP)

$

248

$

180

$

214

$

236

$

224

Average tangible common equity (non-GAAP)

9,175

9,145

9,158

9,067

8,965

Return on average tangible common equity consolidated (non-GAAP)

10.72

%

7.81

%

9.37

%

10.56

%

9.91

%

Cash efficiency ratio

Noninterest expense (GAAP)

$

704

$

704

$

689

$

662

$

712

Less:

Intangible asset amortization (GAAP)

10

10

9

10

10

Adjusted noninterest expense (non-GAAP)

$

694

$

694

$

680

$

652

$

702

Net interest income (GAAP)

$

582

$

575

$

573

$

563

$

583

Plus:

Taxable-equivalent adjustment

6

6

6

6

6

Noninterest income (GAAP)

490

417

455

435

453

Total taxable-equivalent revenue (non-GAAP)

$

1,078

$

998

$

1,034

$

1,004

$

1,042

Cash efficiency ratio (non-GAAP)

64.4

%

69.5

%

65.8

%

64.9

%

67.4

%

GAAP to Non-GAAP Reconciliation

(continued)

$ in millions

(a)

Three months ended December 31, 2014, September 30, 2014, June 30, 2014, March 31, 2014, and December 31, 2013 exclude $69 million, $76 million, $82

million, $89 million, and $96 million of average purchased credit card receivable intangible assets, respectively

34

Return on average tangible common equity from continuing operations

KeyCorp & Subsidiaries

$ in billions

Quarter ended

December 31, 2014

Tier 1 common equity under current regulatory rules

$

9.5

Adjustments from current regulatory rules to the Regulatory Capital Rules:

Deferred tax assets and PCCRs

(b)

(.1)

Common equity Tier 1 anticipated under the Regulatory Capital Rules

(c)

$

9.4

Total risk-weighted assets under current regulatory rules

$

85.0

Adjustments from current regulatory rules to the Regulatory Capital Rules:

Loan commitments <1 year

1.1

Past Due Loans

.1

Mortgage servicing assets

(d)

.5

Deferred tax assets

(d)

.2

Other

1.2

Total risk-weighted assets anticipated under the Regulatory Capital Rules

$

88.1

Common Equity Tier 1 ratio under the Regulatory Capital Rules

10.7

%

(a)

(b)

(c)

(d)

Table may not foot due to rounding

35

Common Equity Tier 1 Under the Regulatory Capital  

Rules (estimated)

(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

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

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”

Item is included in the 10%/15% exceptions bucket calculation and is risk-weighted at 250%