425

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): January 21, 2016

(Exact name of registrant as specified in charter)

Ohio	001-11302	34-6542451
(State or other jurisdiction of incorporation)	Commission File Number	(I.R.S. Employer Identification No.)
127 Public Square, Cleveland, Ohio		44114-1306
(Address of principal executive offices)		(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 (see General Instruction A.2. below):

x 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 2.02 Results of Operations and Financial Condition.

On January 21, 2016, KeyCorp issued a press release announcing its financial results for the three- and twelve-month periods ended December 31, 2015 (the “Press Release”), and posted on its website its fourth quarter 2015 Supplemental Information Package (the “Supplemental Information Package”). The Press Release and Supplemental Information Package are being furnished as Exhibit 99.1 and Exhibit 99.2, respectively.

The information in the preceding paragraph, as well as Exhibit 99.1 and Exhibit 99.2 referenced therein, shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”).

KeyCorp’s Consolidated Balance Sheets and Consolidated Statements of Income (collectively, the “Financial Statements”), included as part of the Press Release, are filed as Exhibit 99.3 to this report. Exhibit 99.3 is deemed “filed” for purposes of Section 18 of the Exchange Act and, therefore, may be incorporated by reference in filings under the Securities Act.

Item 8.01 Other Events.

The information set forth under Item 2.02 of this Current Report on Form 8-K is incorporated by reference in this Item 8.01.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

The following exhibits are furnished, or filed in the case of Exhibit 99.3, herewith:

99.1	Press Release, dated January 21, 2016, announcing financial results for the three- and twelve-month periods ended December 31, 2015.
99.2	Supplemental Information Package reviewed during the conference call and webcast.
99.3	Financial Statements.

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 hereunto duly authorized.

	KEYCORP
	(Registrant)
Date: January 21, 2016	/s/ Douglas M. Schosser
	By:	Douglas M. Schosser
		Chief Accounting Officer

EX-99.1

Exhibit 99.1

	NEWS
FOR IMMEDIATE RELEASE

KEYCORP REPORTS FOURTH QUARTER 2015

NET INCOME OF $224 MILLION, OR $.27 PER COMMON SHARE AND

FULL-YEAR NET INCOME OF $892 MILLION, OR $1.05 PER COMMON SHARE

Positive operating leverage for 2015, with pre-provision net revenue up 5%

Revenue growth for the quarter and full year

Full-year average loans up 5% from 2014, driven by a

12% increase in commercial, financial and agricultural loans

Credit quality remains strong, with net charge-offs to average loans of .25%

Announced acquisition of First Niagara Financial Group earlier in the quarter

Merger-related costs and pension settlement charge total $10 million,

or $.01 per common share, for the quarter

CLEVELAND, January 21, 2016 – KeyCorp (NYSE: KEY) today announced fourth quarter net income from continuing operations attributable to Key common shareholders of $224 million, or $.27 per common share, compared to $216 million, or $.26 per common share, for the third quarter of 2015, and $246 million, or $.28 per common share, for the fourth quarter of 2014. During the fourth quarter of 2015, Key incurred merger-related costs and a pension settlement charge totaling $10 million, or $.01 per common share. Key incurred pension settlement charges of $19 million, or $.01 per common share, during the third quarter of 2015, and $3 million during the fourth quarter of 2014.

For the year ended December 31, 2015, net income from continuing operations attributable to Key common shareholders was $892 million, or $1.05 per common share, compared to $917 million, or $1.04 per common share, for the same period one year ago.

“We were pleased with our fourth quarter and full-year results,” said Chairman and Chief Executive Officer Beth Mooney. “Our fourth quarter results reflect continued revenue growth, well-managed expenses, and strong credit quality.”

“Full-year results reflect positive operating leverage, driven by a 3% increase in revenue, benefiting from continued loan growth and ongoing momentum in our fee-based businesses. Investment banking and debt placement fees had another record year, and our cards and payments income was up 10%. Expenses reflect the ongoing investments we have made in our businesses to drive revenue growth, including the addition of client-facing personnel across our franchise,” continued Mooney. “Capital ratios also remain strong, and reflect $460 million of common share repurchases and a 16% increase in our common share dividend for the year.”

“Additionally, we continue to make good progress on our announced acquisition of First Niagara Financial Group. Integration teams, including some of the top talent at both Key and First Niagara, are focused on the approval process and ensuring a smooth transition and sustained momentum,” added Mooney.

KeyCorp Reports Fourth Quarter 2015 Profit

January 21, 2016

Page 2

FOURTH QUARTER 2015 FINANCIAL RESULTS, from continuing operations

Compared to Fourth Quarter of 2014

• Average loans up 5%, driven by 14% growth in commercial, financial and agricultural loans

• Average deposits, excluding deposits in foreign office, up 3%, due to strength in the commercial mortgage servicing business and inflows from commercial and consumer clients

• Net interest income (taxable-equivalent) up $22 million, attributable to higher earning asset balances partially offset by lower earning asset yields

• Noninterest income down $5 million, due to lower net gains from principal investing and trust and investment services income, partially offset by increases in cards and payments income, mortgage servicing fees, and other income

• Noninterest expense up $32 million, primarily attributable to an increase in personnel expense related to investments made across the business and higher employee benefits expense, along with merger-related costs

• Credit quality remained strong, with net loan charge-offs to average loans of .25%

Compared to Third Quarter of 2015

• Average loans up .5%, driven by a 2% increase in commercial, financial and agricultural loans

• Average deposits, excluding deposits in foreign office, up 2%, due to seasonal and short-term deposit inflows from commercial clients, along with growth in NOW and money market deposit accounts and certificates of deposit

• Net interest income (taxable-equivalent) up $12 million, driven by higher earning asset yields and loan fees

• Noninterest income up $15 million, primarily due to higher investment banking and debt placement fees

• Noninterest expense up $12 million, primarily driven by higher incentive and stock-based compensation, merger-related costs, and increased costs associated with Key’s continuous improvement and efficiency efforts, partially offset by lower employee benefits expense

• Strong credit quality, with net loan charge-offs to average loans remaining below our targeted range of 40-60 basis points

Selected Financial Highlights

										Change 4Q15 vs.
dollars in millions, except per share data	4Q15			3Q15			4Q14			3Q15			4Q14
Income (loss) from continuing operations attributable to Key common shareholders	$	224		$	216		$	246			3.7	%		(8.9	)%
Income (loss) from continuing operations attributable to Key common shareholders per common share — assuming dilution		.27			.26			.28			3.8			(3.6	)
Return on average total assets from continuing operations		.97	%		.95	%		1.12	%		N/A			N/A
Common Equity Tier 1 (a), (b)		10.95			10.47			N/A			N/A			N/A
Tier 1 common equity (a)		N/A			N/A			11.17	%		N/A			N/A
Book value at period end	$	12.51		$	12.47		$	11.91			.3	%		5.0	%
Net interest margin (TE) from continuing operations		2.87	%		2.87	%		2.94	%		N/A			N/A

(a) The table entitled “GAAP to Non-GAAP Reconciliations” in the attached financial supplement presents the computations of certain financial measures related to “Common Equity Tier 1” (compliance date of January 1, 2015, under the Regulatory Capital Rules) and “Tier 1 common equity” (prior to January 1, 2015). The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons. For further information on the Regulatory Capital Rules, see the “Capital” section of this release.

(b) 12-31-15 ratio is estimated.

TE = Taxable Equivalent, N/A = Not Applicable

KeyCorp Reports Fourth Quarter 2015 Profit

January 21, 2016

Page 3

INCOME STATEMENT HIGHLIGHTS

Revenue

							Change 4Q15 vs.
dollars in millions	4Q15		3Q15		4Q14		3Q15			4Q14
Net interest income (TE)	$	610	$	598	$	588		2.0	%		3.7	%
Noninterest income		485		470		490		3.2			(1.0	)
Total revenue	$	1,095	$	1,068	$	1,078		2.5	%		1.6	%

TE = Taxable Equivalent

Taxable-equivalent net interest income was $610 million for the fourth quarter of 2015, and the net interest margin was 2.87%. These results compare to taxable-equivalent net interest income of $588 million and a net interest margin of 2.94% for the fourth quarter of 2014. The $22 million increase in net interest income reflects higher earning asset balances, partially offset by lower earning asset yields, which also drove the decline in the net interest margin.

Compared to the third quarter of 2015, taxable-equivalent net interest income increased by $12 million, and the net interest margin was unchanged. The increase in net interest income was primarily attributable to higher earning asset yields and loan fees. The net interest margin was stable as the impact of higher earning asset yields and loan fees was offset by higher levels of excess liquidity driven by short-term commercial deposit growth.

Noninterest Income

							Change 4Q15 vs.
dollars in millions	4Q15		3Q15		4Q14		3Q15			4Q14
Trust and investment services income	$	105	$	108	$	112		(2.8	)%		(6.3	)%
Investment banking and debt placement fees		127		109		126		16.5			.8
Service charges on deposit accounts		64		68		64		(5.9	)		—
Operating lease income and other leasing gains		15		15		15		—			—
Corporate services income		55		57		53		(3.5	)		3.8
Cards and payments income		47		47		43		—			9.3
Corporate-owned life insurance income		36		30		38		20.0			(5.3	)
Consumer mortgage income		2		3		3		(33.3	)		(33.3	)
Mortgage servicing fees		15		11		11		36.4			36.4
Net gains (losses) from principal investing		—		11		18		N/M			N/M
Other income		19		11		7		72.7			171.4
Total noninterest income	$	485	$	470	$	490		3.2	%		(1.0	)%

N/M = Not Meaningful

Key’s noninterest income was $485 million for the fourth quarter of 2015, compared to $490 million for the year-ago quarter. The slight decrease from the prior year was predominantly attributable to a decline in net gains from principal investing of $18 million and $7 million of lower trust and investment services income reflecting market variability. These decreases were partially offset by a $12 million increase in other income and growth in some of Key’s other core fee-based businesses, including $4 million of higher cards and payments income due to higher credit card and merchant fees and a $4 million increase in mortgage servicing fees.

Compared to the third quarter of 2015, noninterest income increased by $15 million. The primary driver was $18 million in higher investment banking and debt placement fees, marking a strong finish to a record year. Additionally, there was an $8 million increase in other income and a $6 million increase in corporate-owned life insurance, reflecting normal seasonality. Partially offsetting these increases were a decrease of $11 million in net gains from principal investing and a decline of $4 million in service charges on deposit accounts.

KeyCorp Reports Fourth Quarter 2015 Profit

January 21, 2016

Page 4

Noninterest Expense

							Change 4Q15 vs.
dollars in millions	4Q15		3Q15		4Q14		3Q15			4Q14
Personnel expense	$	429	$	426	$	409		.7	%		4.9	%
Nonpersonnel expense		307		298		295		3.0			4.1
Total noninterest expense	$	736	$	724	$	704		1.7	%		4.5	%

Key’s noninterest expense was $736 million for the fourth quarter of 2015. During the quarter, Key incurred merger-related costs of $6 million, a pension settlement charge of $4 million, and costs associated with continuous improvement and efficiency efforts of $10 million. These costs impacted both personnel and nonpersonnel expense.

Compared to $704 million for the fourth quarter of last year, the increase in noninterest expense was primarily attributable to a $20 million increase in personnel expense related to investments made across the business, along with an increase in employee benefits expense. Nonpersonnel expense increased $12 million, most notably from higher business services and professional fees, partially due to merger-related costs.

Compared to the third quarter of 2015, noninterest expense increased by $12 million. This increase was primarily attributable to higher incentive and stock-based compensation expense as a result of a strong capital markets performance, partially offset by a decrease in employee benefits expense due to a lower pension settlement charge. Additionally, $6 million in merger-related costs contributed to the increase, largely attributable to higher business services and professional fees. Costs associated with Key’s continuous improvement and efficiency efforts also increased $6 million.

BALANCE SHEET HIGHLIGHTS

In the fourth quarter of 2015, Key had average assets of $96.1 billion compared to $91.1 billion in the fourth quarter of 2014 and $94.8 billion in the third quarter of 2015. Compared to the third quarter of 2015, Key experienced more short-term commercial deposit inflows, which contributed to higher levels of liquidity and drove the increase in average earning assets in the fourth quarter of 2015.

Average Loans

							Change 12-31-15 vs.
dollars in millions	12-31-15		9-30-15		12-31-14		9-30-15			12-31-14
Commercial, financial and agricultural (a)	$	30,884	$	30,374	$	27,188		1.7	%		13.6	%
Other commercial loans		12,996		13,098		13,357		(.8	)		(2.7	)
Total home equity loans		10,418		10,510		10,639		(.9	)		(2.1	)
Other consumer loans		5,278		5,299		5,357		(.4	)		(1.5	)
Total loans	$	59,576	$	59,281	$	56,541		.5	%		5.4	%

(a) Commercial, financial and agricultural average loan balances include $87 million, $88 million, and $90 million of assets from commercial credit cards at December 31, 2015, September 30, 2015, and December 31, 2014, respectively.

Average loans were $59.6 billion for the fourth quarter of 2015, an increase of $3 billion compared to the fourth quarter of 2014. The loan growth occurred in the commercial, financial and agricultural portfolio, which increased $3.7 billion and was broad-based across Key’s commercial lines of business. Consumer loans declined $300 million as a result of the run-off in Key’s consumer exit portfolios.

Compared to the third quarter of 2015, average loans increased by $295 million, driven by commercial, financial and agricultural loans, which grew $510 million.

KeyCorp Reports Fourth Quarter 2015 Profit

January 21, 2016

Page 5

Average Deposits

dollars in millions										Change 12-31-15 vs.
	12-31-15			9-30-15			12-31-14			9-30-15			12-31-14
Non-time deposits (a)	$	66,270		$	64,928		$	63,541			2.1	%		4.3	%
Certificates of deposit ($100,000 or more)		2,150			1,985			2,277			8.3			(5.6	)
Other time deposits		3,047			3,064			3,306			(.6	)		(7.8	)
Total deposits	$	71,467		$	69,977		$	69,124			2.1	%		3.4	%
Cost of total deposits (a)		.15	%		.15	%		.15	%		N/A			N/A

(a) Excludes deposits in foreign office.

N/A = Not Applicable

Average deposits, excluding deposits in foreign office, totaled $71.5 billion for the fourth quarter of 2015, an increase of $2.3 billion compared to the year-ago quarter. NOW and money market deposit accounts increased by $2.8 billion, reflecting growth in the commercial mortgage servicing business and inflows from commercial and consumer clients. This increase was partially offset by declines in certificates of deposit and other time deposits.

Compared to the third quarter of 2015, average deposits, excluding deposits in foreign office, increased by $1.5 billion. This increase was driven by both seasonal and short-term deposit inflows from commercial clients, along with growth in NOW and money market deposit accounts and certificates of deposit.

ASSET QUALITY

dollars in millions										Change 4Q15 vs.
	4Q15			3Q15			4Q14			3Q15			4Q14
Net loan charge-offs	$	37		$	41		$	32			(9.8	)%		15.6	%
Net loan charge-offs to average total loans		.25	%		.27	%		.22	%		N/A			N/A
Nonperforming loans at period end (a)	$	387		$	400		$	418			(3.3	)%		(7.4	)%
Nonperforming assets at period end		403			417			436			(3.4	)		(7.6	)
Allowance for loan and lease losses		796			790			794			.8			.3
Allowance for loan and lease losses to nonperforming loans		205.7	%		197.5	%		190.0	%		N/A			N/A
Provision for credit losses	$	45		$	45		$	22			—			104.5	%

(a) Loan balances exclude $11 million, $12 million, and $13 million of purchased credit impaired loans at December 31, 2015, September 30, 2015, and December 31, 2014, respectively.

N/A = Not Applicable

Key’s provision for credit losses was $45 million for the fourth quarter of 2015, compared to $22 million for the fourth quarter of 2014 and $45 million for the third quarter of 2015. Key’s allowance for loan and lease losses was $796 million, or 1.33% of total period-end loans, at December 31, 2015, compared to 1.38% at December 31, 2014, and 1.31% at September 30, 2015.

Net loan charge-offs for the fourth quarter of 2015 totaled $37 million, or .25% of average total loans. These results compare to $32 million, or .22%, for the fourth quarter of 2014, and $41 million, or .27%, for the third quarter of 2015.

At December 31, 2015, Key’s nonperforming loans totaled $387 million and represented .65% of period-end portfolio loans, compared to ..73% at December 31, 2014, and .67% at September 30, 2015. Nonperforming assets at December 31, 2015 totaled $403 million and represented .67% of period-end portfolio loans and OREO and other nonperforming assets, compared to .76% at December 31, 2014, and .69% at September 30, 2015.

KeyCorp Reports Fourth Quarter 2015 Profit

January 21, 2016

Page 6

CAPITAL

Key’s estimated risk-based capital ratios included in the following table continued to exceed all “well-capitalized” regulatory benchmarks at December 31, 2015.

Capital Ratios

	12-31-15			9-30-15			12-31-14
Common Equity Tier 1 (a), (b)		10.95	%		10.47	%		N/A
Tier 1 common equity (b)		N/A			N/A			11.17	%
Tier 1 risk-based capital (a)		11.36	%		10.87	%		11.90
Total risk based capital (a)		12.98			12.47			13.89
Tangible common equity to tangible assets (b)		9.98			9.90			9.88
Leverage (a)		10.71			10.68			11.26

(a) 12-31-15 ratio is estimated.

(b) The table entitled “GAAP to Non-GAAP Reconciliations” in the attached financial supplement presents the computations of certain financial measures related to “Common Equity Tier 1” (compliance date of January 1, 2015, under the Regulatory Capital Rules) and “Tier 1 common equity” (prior to January 1, 2015). The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons. See below for further information on the Regulatory Capital Rules.

As shown in the preceding table, at December 31, 2015, Key’s estimated Common Equity Tier 1 and Tier 1 risk-based capital ratios stood at 10.95% and 11.36%, respectively. In addition, the tangible common equity ratio was 9.98% at December 31, 2015.

In October 2013, federal banking regulators published the final Basel III capital framework for U.S. banking organizations (the “Regulatory Capital Rules”). The mandatory compliance date for Key as a “standardized approach” banking organization began on January 1, 2015, subject to transitional provisions extending to January 1, 2019. Key’s estimated Common Equity Tier 1 ratio as calculated under the fully phased-in Regulatory Capital Rules was 10.85% at December 31, 2015. This estimate exceeds the fully phased-in required minimum Common Equity Tier 1 and Capital Conservation Buffer of 7.00%.

Summary of Changes in Common Shares Outstanding

in thousands									Change 4Q15 vs.
	4Q15		3Q15			4Q14			3Q15			4Q14
Shares outstanding at beginning of period		835,285		843,608			868,477			(1.0	)%		(3.8	)%
Common shares repurchased		—		(8,386	)		(9,786	)		N/M			N/M
Shares reissued (returned) under employee benefit plans		466		63			712			639.7			(34.6	)
Shares outstanding at end of period		835,751		835,285			859,403			.1	%		(2.8	)%

N/M = Not Meaningful

During 2015, Key repurchased $460 million of common shares and increased its quarterly common share dividend by 15% in the second quarter.

As previously reported, Key’s existing share repurchase program is suspended through the second quarter of 2016. Share repurchases are expected to be included in the upcoming 2016 Comprehensive Capital Analysis and Review submission.

KeyCorp Reports Fourth Quarter 2015 Profit

January 21, 2016

Page 7

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.

As previously reported, in the third quarter of 2015, Key enhanced the approach used to determine the commercial reserve factors used in estimating the quantitative component of the commercial allowance for loan and lease losses. In addition, Key began utilizing an enhanced framework to quantify commercial allowance for loan and lease loss adjustments resulting from qualitative factors not fully captured within the statistical analysis of incurred loss. These methodology enhancements did not create a significant difference in provisioning between segments.

Major Business Segments

										Change 4Q15 vs.
dollars in millions	4Q15			3Q15			4Q14			3Q15			4Q14
Revenue from continuing operations (TE)
Key Community Bank	$	588		$	579		$	558			1.6	%		5.4	%
Key Corporate Bank		479			454			460			5.5			4.1
Other Segments		32			35			62			(8.6	)		(48.4	)
Total segments		1,099			1,068			1,080			2.9			1.8
Reconciling Items		(4	)		—			(2	)		N/M			N/M
Total	$	1,095		$	1,068		$	1,078			2.5	%		1.6	%
Income (loss) from continuing operations attributable to Key
Key Community Bank	$	68		$	71		$	62			(4.2	)%		9.7	%
Key Corporate Bank		145			138			149			5.1			(2.7	)
Other Segments		23			26			38			(11.5	)		(39.5	)
Total segments		236			235			249			.4			(5.2	)
Reconciling Items		(6	)		(13	)		2			N/M			N/M
Total	$	230		$	222		$	251			3.6	%		(8.4	)%

TE = Taxable Equivalent, N/M = Not Meaningful

Key Community Bank

							Change 4Q15 vs.
dollars in millions	4Q15		3Q15		4Q14		3Q15			4Q14
Summary of operations
Net interest income (TE)	$	388	$	379	$	362		2.4	%		7.2	%
Noninterest income		200		200		196		—			2.0
Total revenue (TE)		588		579		558		1.6			5.4
Provision for credit losses		20		18		11		11.1			81.8
Noninterest expense		459		448		449		2.5			2.2
Income (loss) before income taxes (TE)		109		113		98		(3.5	)		11.2
Allocated income taxes (benefit) and TE adjustments		41		42		36		(2.4	)		13.9
Net income (loss) attributable to Key	$	68	$	71	$	62		(4.2	)%		9.7	%
Average balances
Loans and leases	$	30,925	$	31,039	$	30,478		(.4	)%		1.5	%
Total assets		32,997		33,090		32,558		(.3	)		1.3
Deposits		52,219		51,234		50,851		1.9			2.7
Assets under management at period end	$	33,983	$	35,158	$	39,157		(3.3	)%		(13.2	)%

TE = Taxable Equivalent

KeyCorp Reports Fourth Quarter 2015 Profit

January 21, 2016

Page 8

Additional Key Community Bank Data

										Change 4Q15 vs.
dollars in millions	4Q15			3Q15			4Q14			3Q15			4Q14
Noninterest income
Trust and investment services income	$	73		$	73		$	75			—			(2.7	)%
Service charges on deposit accounts		54			56			54			(3.6	)%		—
Cards and payments income		44			43			40			2.3			10.0
Other noninterest income		29			28			27			3.6			7.4
Total noninterest income	$	200		$	200		$	196			—			2.0	%
Average deposit balances
NOW and money market deposit accounts	$	28,861		$	28,568		$	27,691			1.0	%		4.2	%
Savings deposits		2,330			2,362			2,378			(1.4	)		(2.0	)
Certificates of deposit ($100,000 or more)		1,687			1,560			1,793			8.1			(5.9	)
Other time deposits		3,045			3,060			3,301			(.5	)		(7.8	)
Deposits in foreign office		208			271			332			(23.2	)		(37.3	)
Noninterest-bearing deposits		16,088			15,413			15,356			4.4			4.8
Total deposits	$	52,219		$	51,234		$	50,851			1.9	%		2.7	%
Home equity loans
Average balance	$	10,203		$	10,281		$	10,365
Weighted-average loan-to-value ratio (at date of origination)		71	%		71	%		71	%
Percent first lien positions		61			60			60
Other data
Branches		966			972			994
Automated teller machines		1,256			1,259			1,287

Key Community Bank Summary of Operations

• Positive operating leverage from prior year

• Net income increased to $68 million, up 9.7% from prior year

• Commercial, financial and agricultural loan growth of $672 million, or 5.6% from prior year

• Average deposits up $1.4 billion, or 2.7% from the prior year

Key Community Bank recorded net income attributable to Key of $68 million for the fourth quarter of 2015, compared to net income attributable to Key of $62 million for the year-ago quarter.

Taxable-equivalent net interest income increased by $26 million, or 7.2%, from the fourth quarter of 2014 due to increases in average loans and leases of 1.5% and average deposits of 2.7% from one year ago. Commercial, financial and agricultural loans grew by $672 million, or 5.6%, from the prior year.

Noninterest income increased $4 million, or 2.0%, from the year-ago quarter. This growth was driven by increases in cards and payments income of $4 million and strong investment banking and debt placement fees, which increased $4 million from one year ago. These increases were partially offset by lower trust and investment services income due to weaker market trends.

The provision for credit losses increased by $9 million, or 82%, from the fourth quarter of 2014. Net loan charge-offs decreased $5 million from the same period one year ago.

Noninterest expense increased by $10 million, or 2.2%, from the year-ago quarter. Personnel expense increased by $8 million, driven by hiring across the franchise as well as higher performance-based compensation, while nonpersonnel expense increased by $2 million.

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January 21, 2016

Page 9

Key Corporate Bank

								Change 4Q15 vs.
dollars in millions	4Q15		3Q15			4Q14		3Q15			4Q14
Summary of operations
Net interest income (TE)	$	224	$	220		$	219		1.8	%		2.3	%
Noninterest income		255		234			241		9.0			5.8
Total revenue (TE)		479		454			460		5.5			4.1
Provision for credit losses		26		30			7		(13.3	)		271.4
Noninterest expense		254		246			244		3.3			4.1
Income (loss) before income taxes (TE)		199		178			209		11.8			(4.8	)
Allocated income taxes and TE adjustments		52		42			60		23.8			(13.3	)
Net income (loss)		147		136			149		8.1			(1.3	)
Less: Net income (loss) attributable to noncontrolling interests		2		(2	)		—		N/M			N/M
Net income (loss) attributable to Key	$	145	$	138		$	149		5.1	%		(2.7	)%
Average balances
Loans and leases	$	26,981	$	26,425		$	23,798		2.1	%		13.4	%
Loans held for sale		820		918			855		(10.7	)		(4.1	)
Total assets		32,718		32,163			28,997		1.7			12.8
Deposits		19,081		18,809			18,355		1.4			4.0

TE = Taxable Equivalent, N/M = Not Meaningful

Additional Key Corporate Bank Data

								Change 4Q15 vs.
dollars in millions	4Q15		3Q15		4Q14			3Q15			4Q14
Noninterest income
Trust and investment services income	$	32	$	35	$	37			(8.6	)%		(13.5	)%
Investment banking and debt placement fees		125		107		125			16.8			—
Operating lease income and other leasing gains		13		16		17			(18.8	)		(23.5	)
Corporate services income		44		46		43			(4.3	)		2.3
Service charges on deposit accounts		10		11		10			(9.1	)		—
Cards and payments income		3		4		3			(25.0	)		—
Payments and services income		57		61		56			(6.6	)		1.8
Mortgage servicing fees		15		11		11			36.4			36.4
Other noninterest income		13		4		(5	)		225.0			N/M
Total noninterest income	$	255	$	234	$	241			9.0	%		5.8	%

N/M = Not Meaningful

Key Corporate Bank Summary of Operations

• Record year for investment banking and debt placement fees

• Revenue up 4.1% from the prior year

• Average loan and lease balances up 13.4% from the prior year

Key Corporate Bank recorded net income attributable to Key of $145 million for the fourth quarter of 2015, a decrease of $4 million, or 2.7%, from the same period one year ago.

Taxable-equivalent net interest income increased by $5 million, or 2.3%, compared to the fourth quarter of 2014. Average earning assets increased $3.1 billion, or 12.1%, from the year-ago quarter, primarily driven by growth in commercial, financial and agricultural loans. Average deposit balances increased $726 million, or 4.0%, from the year-ago quarter, driven by commercial mortgage servicing deposits.

Noninterest income was up $14 million, or 5.8% from the prior year. Other noninterest income increased $18 million mostly driven by gains related to the disposition of certain investments held by the Real Estate Capital line of business. Mortgage servicing fees increased $4 million, or 36.4%, due to higher

KeyCorp Reports Fourth Quarter 2015 Profit

January 21, 2016

Page 10

transaction volumes. Partially offsetting these increases were declines in trust and investment services income of $5 million and operating lease income and other leasing gains of $4 million.

The provision for credit losses increased $19 million, or 271.4%, from the same period one year ago, primarily due to higher net loan charge-offs, as well as a 13.4% increase in average loan and lease balances.

Noninterest expense increased by $10 million, or 4.1%, from the fourth quarter of 2014. This increase was primarily driven by higher personnel expense due to new hires across the platform and an increase in business services and professional fees.

Other Segments

Other Segments consist of Corporate Treasury, Key’s Principal Investing unit and various exit portfolios. Other Segments generated net income attributable to Key of $23 million for the fourth quarter of 2015, compared to $38 million for the same period last year. This decline was primarily attributable to lower net gains from principal investing.

*****

KeyCorp was organized more than 160 years ago and is headquartered in Cleveland, Ohio. One of the nation’s largest bank-based financial services companies, Key had assets of approximately $95.1 billion at December 31, 2015.

Key provides deposit, lending, cash management and investment services to individuals and small and mid-sized businesses in 12 states under the name KeyBank National Association. 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 Fourth Quarter 2015 Profit

January 21, 2016

Page 11

CONTACTS:
ANALYSTS	MEDIA
Vernon L. Patterson	Jack Sparks
216.689.0520	720.904.4554
Vernon_Patterson@KeyBank.com	Jack_Sparks@KeyBank.com
	Twitter: @keybank_news
Kelly L. Dillon
216.689.3133
Kelly_L_Dillon@KeyBank.com
Melanie S. Misconish
216.689.4545
Melanie_S_Misconish@KeyBank.com
INVESTOR	KEY MEDIA
RELATIONS: www.key.com/ir	NEWSROOM: www.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, 2014, as well as in KeyCorp’s subsequent SEC filings, all of which have been filed with the Securities and Exchange Commission (the “SEC”) and are 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 reversal of the U.S. economic recovery due to financial, political, or other shocks, and the extensive and increasing regulation of the U.S. financial services industry. 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 Thursday, January 21, 2016. An audio replay of the call will be available through January 28, 2016.

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 Fourth Quarter 2015 Profit

January 21, 2016

Page 12

KeyCorp

Fourth Quarter 2015

Financial Supplement

Page
13	Financial Highlights
15	GAAP to Non-GAAP Reconciliation
18	Consolidated Balance Sheets
19	Consolidated Statements of Income
20	Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations
22	Noninterest Expense
22	Personnel Expense
23	Loan Composition
23	Loans Held for Sale Composition
23	Summary of Changes in Loans Held for Sale
24	Exit Loan Portfolio From Continuing Operations
24	Asset Quality Statistics From Continuing Operations
25	Summary of Loan and Lease Loss Experience From Continuing Operations
26	Summary of Nonperforming Assets and Past Due Loans From Continuing Operations
27	Summary of Changes in Nonperforming Loans From Continuing Operations
27	Summary of Changes in Other Real Estate Owned, Net of Allowance, From Continuing Operations
28	Line of Business Results

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Financial Highlights

(dollars in millions, except per share amounts)

	Three months ended
	12-31-15			9-30-15			12-31-14
Summary of operations
Net interest income (TE)	$	610		$	598		$	588
Noninterest income		485			470			490
Total revenue (TE)		1,095			1,068			1,078
Provision for credit losses		45			45			22
Noninterest expense		736			724			704
Income (loss) from continuing operations attributable to Key		230			222			251
Income (loss) from discontinued operations, net of taxes (a)		(4	)		(3	)		2
Net income (loss) attributable to Key		226			219			253
Income (loss) from continuing operations attributable to Key common shareholders	$	224		$	216		$	246
Income (loss) from discontinued operations, net of taxes (a)		(4	)		(3	)		2
Net income (loss) attributable to Key common shareholders		220			213			248
Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	.27		$	.26		$	.29
Income (loss) from discontinued operations, net of taxes (a)		(.01	)		—			—
Net income (loss) attributable to Key common shareholders (b)		.27			.26			.29
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution		.27			.26			.28
Income (loss) from discontinued operations, net of taxes — assuming dilution (a)		(.01	)		—			—
Net income (loss) attributable to Key common shareholders — assuming dilution (b)		.26			.25			.28
Cash dividends paid		.075			.075			.065
Book value at period end		12.51			12.47			11.91
Tangible book value at period end		11.22			11.17			10.65
Market price at period end		13.19			13.01			13.90
Performance ratios
From continuing operations:
Return on average total assets		.97	%		.95	%		1.12	%
Return on average common equity		8.51			8.30			9.50
Return on average tangible common equity (c)		9.50			9.27			10.64
Net interest margin (TE)		2.87			2.87			2.94
Cash efficiency ratio (c)		66.4			66.9			64.4
From consolidated operations:
Return on average total assets		.93	%		.92	%		1.10	%
Return on average common equity		8.36			8.19			9.58
Return on average tangible common equity (c)		9.33			9.14			10.72
Net interest margin (TE)		2.84			2.84			2.93
Loan to deposit (d)		87.8			89.3			84.6
Capital ratios at period end
Key shareholders’ equity to assets		11.30	%		11.22	%		11.22	%
Key common shareholders’ equity to assets		10.99			10.91			10.91
Tangible common equity to tangible assets (c)		9.98			9.90			9.88
Common Equity Tier 1 (c), (e)		10.95			10.47			N/A
Tier 1 common equity (c)		N/A			N/A			11.17
Tier 1 risk-based capital (e)		11.36			10.87			11.90
Total risk-based capital (e)		12.98			12.47			13.89
Leverage (e)		10.71			10.68			11.26
Asset quality — from continuing operations
Net loan charge-offs	$	37		$	41		$	32
Net loan charge-offs to average loans		.25	%		.27	%		.22	%
Allowance for loan and lease losses	$	796		$	790		$	794
Allowance for credit losses		852			844			829
Allowance for loan and lease losses to period-end loans		1.33	%		1.31	%		1.38	%
Allowance for credit losses to period-end loans		1.42			1.40			1.44
Allowance for loan and lease losses to nonperforming loans		205.7			197.5			190.0
Allowance for credit losses to nonperforming loans		220.2			211.0			198.3
Nonperforming loans at period end (f)	$	387		$	400		$	418
Nonperforming assets at period end		403			417			436
Nonperforming loans to period-end portfolio loans		.65	%		.67	%		.73	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		.67			.69			.76
Trust and brokerage assets
Assets under management	$	33,983		$	35,158		$	39,157
Nonmanaged and brokerage assets		47,681			46,796			49,147
Other data
Average full-time equivalent employees		13,359			13,555			13,590
Branches		966			972			994
Taxable-equivalent adjustment	$	8		$	7		$	6

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Page 14

Financial Highlights (continued)

(dollars in millions, except per share amounts)

	Twelve months ended
	12-31-15			12-31-14
Summary of operations
Net interest income (TE)	$	2,376		$	2,317
Noninterest income		1,880			1,797
Total revenue (TE)		4,256			4,114
Provision for credit losses		166			57
Noninterest expense		2,840			2,761
Income (loss) from continuing operations attributable to Key		915			939
Income (loss) from discontinued operations, net of taxes (a)		1			(39	)
Net income (loss) attributable to Key		916			900
Income (loss) from continuing operations attributable to Key common shareholders	$	892		$	917
Income (loss) from discontinued operations, net of taxes (a)		1			(39	)
Net income (loss) attributable to Key common shareholders		893			878
Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	1.06		$	1.05
Income (loss) from discontinued operations, net of taxes (a)		—			(.04	)
Net income (loss) attributable to Key common shareholders (b)		1.06			1.01
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution		1.05			1.04
Income (loss) from discontinued operations, net of taxes — assuming dilution (a)		—			(.04	)
Net income (loss) attributable to Key common shareholders — assuming dilution (b)		1.05			.99
Cash dividends paid		.29			.25
Performance ratios
From continuing operations:
Return on average total assets		.99	%		1.08	%
Return on average common equity		8.63			9.01
Return on average tangible common equity (c)		9.64			10.04
Net interest margin (TE)		2.88			2.97
Cash efficiency ratio (c)		65.9			66.2
From consolidated operations:
Return on average total assets		.97	%		.99	%
Return on average common equity		8.64			8.63
Return on average tangible common equity (c)		9.65			9.61
Net interest margin (TE)		2.85			2.94
Asset quality — from continuing operations
Net loan charge-offs	$	142		$	113
Net loan charge-offs to average total loans		.24	%		.20	%
Other data
Average full-time equivalent employees		13,483			13,853
Taxable-equivalent adjustment	$	28		$	24

(a) In April 2009, management decided to wind down the operations of Austin Capital Management, Ltd., a subsidiary that specialized in managing hedge fund investments for institutional customers. In September 2009, management decided to discontinue the education lending business conducted through Key Education Resources, the education payment and financing unit of KeyBank National Association. In February 2013, Key decided to sell its investment subsidiary, Victory Capital Management, and its broker-dealer affiliate, Victory Capital Advisors, to a private equity fund. As a result of these decisions, Key has accounted for these businesses as discontinued operations.

(b) Earnings per share may not foot due to rounding.

(c) The following table entitled “GAAP to Non-GAAP Reconciliations” presents the computations of certain financial measures related to “tangible common equity,” “Common Equity Tier 1” (compliance date of January 1, 2015, under the Regulatory Capital Rules) “Tier 1 common equity” (prior to January 1, 2015), 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. For further information on the Regulatory Capital Rules, see the “Capital” section of this release.

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

(e) 12-31-15 ratio is estimated.

(f) Loan balances exclude $11 million, $12 million, and $13 million of purchased credit impaired loans at December 31, 2015, September 30, 2015, and December 31, 2014, respectively.

TE = Taxable Equivalent, GAAP = U.S. generally accepted accounting principles

KeyCorp Reports Fourth Quarter 2015 Profit

January 21, 2016

Page 15

GAAP to Non-GAAP Reconciliations

(dollars in millions)

The table below presents certain non-GAAP financial measures related to “tangible common equity,” “return on tangible common equity,” “Common Equity Tier 1,” “Tier 1 common equity,” “pre-provision net revenue,” and “cash efficiency ratio.”

The tangible common equity ratio and the return on 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. Traditionally, the banking regulators have assessed bank and bank holding company capital adequacy based on both the amount and the composition of capital, the calculation of which is prescribed in federal banking regulations. In October 2013, the federal banking regulators published the final Basel III capital framework for U.S. banking organizations (the “Regulatory Capital Rules”). The Regulatory Capital Rules require higher and better-quality capital and introduces a new capital measure, “Common Equity Tier 1,” a non-GAAP financial measure. The mandatory compliance date for Key as a “standardized approach” banking organization began on January 1, 2015, subject to transitional provisions extending to January 1, 2019. Prior to January 1, 2015, the Federal Reserve focused its assessment of capital adequacy on a component of Tier 1 risk-based capital known as Tier 1 common equity, also a non-GAAP financial measure.

Common Equity Tier 1 is not formally defined by GAAP and is considered to be a non-GAAP financial measure. Since analysts and banking regulators may assess Key’s capital adequacy using tangible common equity and Common Equity Tier 1, management believes it is useful to enable investors to assess Key’s capital adequacy on these same bases. The table also reconciles the GAAP performance measures to the corresponding non-GAAP measures.

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 loan and lease 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
	12-31-15			9-30-15			12-31-14
Tangible common equity to tangible assets at period end
Key shareholders’ equity (GAAP)	$	10,746		$	10,705		$	10,530
Less: Intangible assets (a)		1,080			1,084			1,090
Preferred Stock, Series A (b)		281			281			282
Tangible common equity (non-GAAP)	$	9,385		$	9,340		$	9,158
Total assets (GAAP)	$	95,133		$	95,422		$	93,821
Less: Intangible assets (a)		1,080			1,084			1,090
Tangible assets (non-GAAP)	$	94,053		$	94,338		$	92,731
Tangible common equity to tangible assets ratio (non-GAAP)		9.98	%		9.90	%		9.88	%
Common Equity Tier 1 at period end
Key shareholders’ equity (GAAP)	$	10,746		$	10,705			—
Less: Preferred Stock, Series A (b)		281			281			—
Common Equity Tier 1 capital before adjustments and deductions		10,465			10,424			—
Less: Goodwill, net of deferred taxes		1,036			1,036			—
Intangible assets, net of deferred taxes		26			29			—
Deferred tax assets		1			1			—
Net unrealized gains (losses) on available-for-sale securities, net of deferred taxes		(58	)		54			—
Accumulated gains (losses) on cash flow hedges, net of deferred taxes		(20	)		21			—
Amounts in accumulated other comprehensive income (loss) attributed to pension and postretirement benefit costs, net of deferred taxes		(365	)		(385	)		—
Total Common Equity Tier 1 capital (c)	$	9,845		$	9,668			—
Net risk-weighted assets (regulatory) (c)	$	89,889		$	92,307			—
Common Equity Tier 1 ratio (non-GAAP) (c)		10.95	%		10.47	%		—
Tier 1 common equity at period end
Key shareholders’ equity (GAAP)		—			—		$	10,530
Qualifying capital securities		—			—			339
Less: Goodwill		—			—			1,057
Accumulated other comprehensive income (loss) (d)		—			—			(395	)
Other assets (e)		—			—			83
Total Tier 1 capital (regulatory)		—			—			10,124
Less: Qualifying capital securities		—			—			339
Preferred Stock, Series A (b)		—			—			282
Total Tier 1 common equity (non-GAAP)		—			—		$	9,503
Net risk-weighted assets (regulatory)		—			—		$	85,100
Tier 1 common equity ratio (non-GAAP)		—			—			11.17	%

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GAAP to Non-GAAP Reconciliations (continued)

(dollars in millions)

	Three months ended
	12-31-15			9-30-15			12-31-14
Pre-provision net revenue
Net interest income (GAAP)	$	602		$	591		$	582
Plus: Taxable-equivalent adjustment		8			7			6
Noninterest income (GAAP)		485			470			490
Less: Noninterest expense (GAAP)		736			724			704
Pre-provision net revenue from continuing operations (non-GAAP)	$	359		$	344		$	374
Average tangible common equity
Average Key shareholders’ equity (GAAP)	$	10,731		$	10,614		$	10,562
Less: Intangible assets (average) (f)		1,082			1,083			1,096
Preferred Stock, Series A (average)		290			290			291
Average tangible common equity (non-GAAP)	$	9,359		$	9,241		$	9,175
Return on average tangible common equity from continuing operations
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP)	$	224		$	216		$	246
Average tangible common equity (non-GAAP)		9,359			9,241			9,175
Return on average tangible common equity from continuing operations (non-GAAP)		9.50	%		9.27	%		10.64	%
Return on average tangible common equity consolidated
Net income (loss) attributable to Key common shareholders (GAAP)	$	220		$	213		$	248
Average tangible common equity (non-GAAP)		9,359			9,241			9,175
Return on average tangible common equity consolidated (non-GAAP)		9.33	%		9.14	%		10.72	%
Cash efficiency ratio
Noninterest expense (GAAP)	$	736		$	724		$	704
Less: Intangible asset amortization (GAAP)		9			9			10
Adjusted noninterest expense (non-GAAP)	$	727		$	715		$	694
Net interest income (GAAP)	$	602		$	591		$	582
Plus: Taxable-equivalent adjustment		8			7			6
Noninterest income (GAAP)		485			470			490
Total taxable-equivalent revenue (non-GAAP)	$	1,095		$	1,068		$	1,078
Cash efficiency ratio (non-GAAP)		66.4	%		66.9	%		64.4	%
	Three months ended
	12-31-15
Common Equity Tier 1 under the Regulatory Capital Rules (“RCR”) (estimates)
Common Equity Tier 1 under current RCR	$	9,845
Adjustments from current RCR to the fully phased-in RCR:
Deferred tax assets and other intangible assets (g)		(41	)
Common Equity Tier 1 anticipated under the fully phased-in RCR (h)	$	9,804
Net risk-weighted assets under current RCR	$	89,889
Adjustments from current RCR to the fully phased-in RCR:
Mortgage servicing assets (i)		479
All other assets (j)		6
Total risk-weighted assets anticipated under the fully phased-in RCR (h)	$	90,374
Common Equity Tier 1 ratio under the fully phased-in RCR (h)		10.85	%

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January 21, 2016

Page 17

GAAP to Non-GAAP Reconciliations (continued)

(dollars in millions)

	Twelve months ended
	12-31-15			12-31-14
Pre-provision net revenue
Net interest income (GAAP)	$	2,348		$	2,293
Plus: Taxable-equivalent adjustment		28			24
Noninterest income (GAAP)		1,880			1,797
Less: Noninterest expense (GAAP)		2,840			2,761
Pre-provision net revenue from continuing operations (non-GAAP)	$	1,416		$	1,353
Average tangible common equity
Average Key shareholders’ equity (GAAP)	$	10,626		$	10,467
Less: Intangible assets (average) (k)		1,085			1,039
Preferred Stock, Series A (average)		290			291
Average tangible common equity (non-GAAP)	$	9,251		$	9,137
Return on average tangible common equity from continuing operations
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP)	$	892		$	917
Average tangible common equity (non-GAAP)		9,251			9,137
Return on average tangible common equity from continuing operations (non-GAAP)		9.64	%		10.04	%
Return on average tangible common equity consolidated
Net income (loss) attributable to Key common shareholders (GAAP)	$	893		$	878
Average tangible common equity (non-GAAP)		9,251			9,137
Return on average tangible common equity consolidated (non-GAAP)		9.65	%		9.61	%
Cash efficiency ratio
Noninterest expense (GAAP)	$	2,840		$	2,761
Less: Intangible asset amortization (GAAP)		36			39
Adjusted noninterest expense (non-GAAP)	$	2,804		$	2,722
Net interest income (GAAP)	$	2,348		$	2,293
Plus: Taxable-equivalent adjustment		28			24
Noninterest income (GAAP)		1,880			1,797
Total taxable-equivalent revenue (non-GAAP)	$	4,256		$	4,114
Cash efficiency ratio (non-GAAP)		65.9	%		66.2	%

(a) For the three months ended December 31, 2015, September 30, 2015, and December 31, 2014, intangible assets exclude $45 million, $50 million, and $68 million, respectively, of period-end purchased credit card receivables.

(b) Net of capital surplus.

(c) 12-31-15 amount is estimated.

(d) 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.

(e) 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.

(f) For the three months ended December 31, 2015, September 30, 2015, and December 31, 2014, average intangible assets exclude $47 million, $52 million, and $69 million, respectively, of average purchased credit card receivables.

(g) Includes the deferred tax assets subject to future taxable income for realization, primarily tax credit carryforwards, as well as intangible assets (other than goodwill and mortgage servicing assets) subject to the transition provisions of the final rule.

(h) 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.”

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

(j) Includes the phase-in of deferred tax assets arising from temporary differences at 250% risk-weight. Additionally, under the fully implemented rule, certain deferred tax assets and intangible assets subject to the transition provision are no longer required to be risk-weighted because they are deducted directly from capital.

(k) For the twelve months ended December 31, 2015, and December 31, 2014, average intangible assets exclude $55 million and $79 million, respectively, of average purchased credit card receivables.

GAAP = U.S. generally accepted accounting principles

KeyCorp Reports Fourth Quarter 2015 Profit

January 21, 2016

Page 18

Consolidated Balance Sheets

(dollars in millions)

	12-31-15			9-30-15			12-31-14
Assets
Loans	$	59,876		$	60,085		$	57,381
Loans held for sale		639			916			734
Securities available for sale		14,218			14,376			13,360
Held-to-maturity securities		4,897			4,936			5,015
Trading account assets		788			811			750
Short-term investments		2,707			1,964			4,269
Other investments		655			691			760
Total earning assets		83,780			83,779			82,269
Allowance for loan and lease losses		(796	)		(790	)		(794	)
Cash and due from banks		607			470			653
Premises and equipment		779			771			841
Operating lease assets		340			315			330
Goodwill		1,060			1,060			1,057
Other intangible assets		65			74			101
Corporate-owned life insurance		3,541			3,516			3,479
Derivative assets		619			793			609
Accrued income and other assets		3,292			3,348			2,952
Discontinued assets		1,846			2,086			2,324
Total assets	$	95,133		$	95,422		$	93,821
Liabilities
Deposits in domestic offices:
NOW and money market deposit accounts	$	37,089		$	37,301		$	34,536
Savings deposits		2,341			2,338			2,371
Certificates of deposit ($100,000 or more)		2,392			2,001			2,040
Other time deposits		3,127			3,020			3,259
Total interest-bearing deposits		44,949			44,660			42,206
Noninterest-bearing deposits		26,097			25,985			29,228
Deposits in foreign office — interest-bearing		—			428			564
Total deposits		71,046			71,073			71,998
Federal funds purchased and securities sold under repurchase agreements		372			407			575
Bank notes and other short-term borrowings		533			677			423
Derivative liabilities		632			676			784
Accrued expense and other liabilities		1,605			1,562			1,621
Long-term debt		10,186			10,310			7,875
Discontinued liabilities		—			—			3
Total liabilities		84,374			84,705			83,279
Equity
Preferred stock, Series A		290			290			291
Common shares		1,017			1,017			1,017
Capital surplus		3,922			3,914			3,986
Retained earnings		8,922			8,764			8,273
Treasury stock, at cost		(3,000	)		(3,008	)		(2,681	)
Accumulated other comprehensive income (loss)		(405	)		(272	)		(356	)
Key shareholders’ equity		10,746			10,705			10,530
Noncontrolling interests		13			12			12
Total equity		10,759			10,717			10,542
Total liabilities and equity	$	95,133		$	95,422		$	93,821
Common shares outstanding (000)		835,751			835,285			859,403

KeyCorp Reports Fourth Quarter 2015 Profit

January 21, 2016

Page 19

Consolidated Statements of Income

(dollars in millions, except per share amounts)

	Three months ended								Twelve months ended
	12-31-15			9-30-15			12-31-14		12-31-15		12-31-14
Interest income
Loans	$	552		$	542		$	534	$	2,149	$	2,110
Loans held for sale		8			10			8		37		21
Securities available for sale		76			75			67		293		277
Held-to-maturity securities		24			24			23		96		93
Trading account assets		6			5			6		21		25
Short-term investments		3			1			2		8		6
Other investments		4			4			6		18		22
Total interest income		673			661			646		2,622		2,554
Interest expense
Deposits		26			27			26		105		117
Federal funds purchased and securities sold under repurchase agreements		—			—			—		—		2
Bank notes and other short-term borrowings		3			2			3		9		9
Long-term debt		42			41			35		160		133
Total interest expense		71			70			64		274		261
Net interest income		602			591			582		2,348		2,293
Provision for credit losses		45			45			22		166		57
Net interest income after provision for credit losses		557			546			560		2,182		2,236
Noninterest income
Trust and investment services income		105			108			112		433		403
Investment banking and debt placement fees		127			109			126		445		397
Service charges on deposit accounts		64			68			64		256		261
Operating lease income and other leasing gains		15			15			15		73		96
Corporate services income		55			57			53		198		178
Cards and payments income		47			47			43		183		166
Corporate-owned life insurance income		36			30			38		127		118
Consumer mortgage income		2			3			3		12		10
Mortgage servicing fees		15			11			11		48		46
Net gains (losses) from principal investing		—			11			18		51		78
Other income (a), (b)		19			11			7		54		44
Total noninterest income		485			470			490		1,880		1,797
Noninterest expense
Personnel		429			426			409		1,652		1,591
Net occupancy		64			60			63		255		261
Computer processing		43			41			40		164		158
Business services and professional fees		44			40			38		159		156
Equipment		22			22			23		88		96
Operating lease expense		13			11			11		47		42
Marketing		17			17			16		57		49
FDIC assessment		8			8			9		32		30
Intangible asset amortization		9			9			10		36		39
OREO expense, net		1			2			2		6		5
Other expense		86			88			83		344		334
Total noninterest expense		736			724			704		2,840		2,761
Income (loss) from continuing operations before income taxes		306			292			346		1,222		1,272
Income taxes		73			72			94		303		326
Income (loss) from continuing operations		233			220			252		919		946
Income (loss) from discontinued operations, net of taxes		(4	)		(3	)		2		1		(39	)
Net income (loss)		229			217			254		920		907
Less: Net income (loss) attributable to noncontrolling interests		3			(2	)		1		4		7
Net income (loss) attributable to Key	$	226		$	219		$	253	$	916	$	900
Income (loss) from continuing operations attributable to Key common shareholders	$	224		$	216		$	246	$	892	$	917
Net income (loss) attributable to Key common shareholders		220			213			248		893		878
Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	.27		$	.26		$	.29	$	1.06	$	1.05
Income (loss) from discontinued operations, net of taxes		(.01	)		—			—		—		(.04	)
Net income (loss) attributable to Key common shareholders (c)		.27			.26			.29		1.06		1.01
Per common share — assuming dilution
Income (loss) from continuing operations attributable to Key common shareholders	$	.27		$	.26		$	.28	$	1.05	$	1.04
Income (loss) from discontinued operations, net of taxes		(.01	)		—			—		—		(.04	)
Net income (loss) attributable to Key common shareholders (c)		.26			.25			.28		1.05		.99
Cash dividends declared per common share	$	.075		$	.075		$	.065	$	.29	$	.25
Weighted-average common shares outstanding (000)		828,206			831,430			858,811		836,846		871,464
Effect of convertible preferred stock		—			—			20,602		—		—
Effect of common share options and other stock awards		7,733			7,450			6,773		7,643		6,735
Weighted-average common shares and potential common shares outstanding (000) (d)		835,939			838,880			886,186		844,489		878,199

(a) For the three months ended December 31, 2015, net securities gains (losses) totaled $1 million. For the three months ended September 30, 2015, and December 31, 2014, net securities gains (losses) totaled less than $1 million. For the three months ended December 31, 2015, September 30, 2015, and December 31, 2014, Key did not have any impairment losses related to securities.

(b) For the twelve months ended December 31, 2015, and December 31, 2014, net securities gains (losses) totaled less than $1 million. For the twelve months ended December 31, 2015, and December 31, 2014, Key did not have any impairment losses related to securities.

(c) Earnings per share may not foot due to rounding.

(d) Assumes conversion of common share options and other stock awards and/or convertible preferred stock, as applicable.

KeyCorp Reports Fourth Quarter 2015 Profit

January 21, 2016

Page 20

Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations

(dollars in millions)

	Fourth Quarter 2015									Third Quarter 2015								Fourth Quarter 2014
	Average Balance			Interest (a)			Yield/Rate (a)			Average Balance			Interest (a)		Yield/Rate (a)			Average Balance			Interest (a)		Yield/Rate (a)
Assets
Loans: (b), (c)
Commercial, financial and agricultural (d)	$	30,884		$	253			3.25	%	$	30,374		$	244		3.19	%	$	27,188		$	223		3.24	%
Real estate — commercial mortgage		8,019			75			3.70			7,988			73		3.65			8,161			77		3.73
Real estate — construction		1,067			10			3.65			1,164			11		3.78			1,077			10		3.90
Commercial lease financing		3,910			36			3.68			3,946			35		3.57			4,119			38		3.67
Total commercial loans		43,880			374			3.38			43,472			363		3.32			40,545			348		3.40
Real estate — residential mortgage		2,252			24			4.18			2,258			24		4.19			2,223			24		4.28
Home equity:
Key Community Bank		10,203			100			3.89			10,281			101		3.88			10,365			103		3.91
Other		215			5			7.87			229			4		7.87			274			5		7.84
Total home equity loans		10,418			105			3.97			10,510			105		3.96			10,639			108		4.01
Consumer other — Key Community Bank		1,605			26			6.48			1,597			26		6.51			1,552			27		6.78
Credit cards		780			21			10.66			759			21		10.74			728			20		11.02
Consumer other:
Marine		600			10			6.40			645			10		6.38			802			13		6.29
Other		41			—			7.16			40			1		8.00			52			—		7.52
Total consumer other		641			10			6.45			685			11		6.47			854			13		6.36
Total consumer loans		15,696			186			4.69			15,809			187		4.69			15,996			192		4.76
Total loans		59,576			560			3.72			59,281			550		3.69			56,541			540		3.79
Loans held for sale		841			8			4.13			939			10		3.96			871			8		3.72
Securities available for sale (b), (e)		14,168			76			2.13			14,247			74		2.11			12,153			67		2.20
Held-to-maturity securities (b)		4,908			24			1.99			4,923			24		1.95			4,947			23		1.91
Trading account assets		822			6			3.31			699			5		2.50			868			6		2.84
Short-term investments		3,483			3			.28			2,257			1		.26			3,520			2		.27
Other investments (e)		674			4			2.71			696			4		2.52			792			6		2.77
Total earning assets		84,472			68	1		3.21			83,042			668		3.21			79,692			652		3.27
Allowance for loan and lease losses		(790	)								(790	)							(798	)
Accrued income and other assets		10,437									10,399								9,868
Discontinued assets		1,947									2,118								2,359
Total assets	$	96,066								$	94,769							$	91,121
Liabilities
NOW and money market deposit accounts	$	37,640			14			.15		$	36,289			15		.16		$	34,811			13		.14
Savings deposits		2,338			—			.02			2,371			—		.02			2,388			—		.02
Certificates of deposit ($100,000 or more) (f)		2,150			7			1.31			1,985			6		1.27			2,277			7		1.25
Other time deposits		3,047			5			.72			3,064			6		.70			3,306			6		.76
Deposits in foreign office		354			—			.24			492			—		.23			543			—		.24
Total interest-bearing deposits		45,529			26			.24			44,201			27		.24			43,325			26		.24
Federal funds purchased and securities sold under repurchase agreements		392			—			.02			859			—		.08			621			—		.02
Bank notes and other short-term borrowings		556			3			1.65			567			2		1.51			772			3		1.17
Long-term debt (f), (g)		8,318			42			2.05			7,895			41		2.19			5,135			35		2.80
Total interest-bearing liabilities		54,795			71			.52			53,522			70		.53			49,853			64		.51
Noninterest-bearing deposits		26,292									26,268								26,342
Accrued expense and other liabilities		2,289									2,236								1,989
Discontinued liabilities (g)		1,947									2,118								2,359
Total liabilities		85,323									84,144								80,543
Equity
Key shareholders’ equity		10,731									10,614								10,562
Noncontrolling interests		12									11								16
Total equity		10,743									10,625								10,578
Total liabilities and equity	$	96,066								$	94,769							$	91,121
Interest rate spread (TE)								2.69	%							2.68	%							2.76	%
Net interest income (TE) and net interest margin (TE)					610			2.87	%					598		2.87	%					588		2.94	%
TE adjustment (b)					8									7								6
Net interest income, GAAP basis				$	602								$	591							$	582

(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 35%.

(c) For purposes of these computations, nonaccrual loans are included in average loan balances.

(d) Commercial, financial and agricultural average balances include $87 million, $88 million, and $90 million of assets from commercial credit cards for the three months ended December 31, 2015, September 30, 2015, and December 31, 2014, 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 Fourth Quarter 2015 Profit

January 21, 2016

Page 21

Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations

(dollars in millions)

	Twelve months ended December 31, 2015								Twelve months ended December 31, 2014
	Average Balance			Interest (a)		Yield/Rate (a)			Average Balance			Interest (a)		Yield/Rate (a)
Assets
Loans: (b), (c)
Commercial, financial and agricultural (d)	$	29,658		$	953		3.21	%	$	26,375		$	866		3.28	%
Real estate — commercial mortgage		8,020			295		3.68			7,999			303		3.79
Real estate — construction		1,143			43		3.73			1,061			43		4.07
Commercial lease financing		3,976			143		3.60			4,239			156		3.67
Total commercial loans		42,797			1,434		3.35			39,674			1,368		3.45
Real estate — residential mortgage		2,244			95		4.21			2,201			96		4.37
Home equity:
Key Community Bank		10,266			399		3.89			10,340			405		3.91
Other		237			19		7.85			299			23		7.80
Total home equity loans		10,503			418		3.98			10,639			428		4.02
Consumer other — Key Community Bank		1,580			103		6.54			1,501			104		6.92
Credit cards		752			81		10.76			712			78		10.95
Consumer other:
Marine		675			43		6.36			894			56		6.22
Other		43			3		7.56			58			4		7.70
Total consumer other		718			46		6.43			952			60		6.31
Total consumer loans		15,797			743		4.70			16,005			766		4.79
Total loans		58,594			2,177		3.71			55,679			2,134		3.83
Loans held for sale		959			37		3.85			570			21		3.76
Securities available for sale (b), (e)		13,720			293		2.14			12,210			277		2.27
Held-to-maturity securities (b)		4,936			96		1.95			4,949			93		1.88
Trading account assets		761			21		2.80			932			25		2.70
Short-term investments		2,843			8		.27			2,886			6		.21
Other investments (e)		706			18		2.63			865			22		2.53
Total earning assets		82,519			2,650		3.21			78,091			2,578		3.30
Allowance for loan and lease losses		(791	)							(818	)
Accrued income and other assets		10,300								9,806
Discontinued assets		2,132								3,828
Total assets	$	94,160							$	90,907
Liabilities
NOW and money market deposit accounts	$	36,258			56		.15		$	34,283			48		.14
Savings deposits		2,372			—		.02			2,446			1		.02
Certificates of deposit ($100,000 or more) (f)		2,041			26		1.28			2,616			35		1.35
Other time deposits		3,115			22		.71			3,495			32		.91
Deposits in foreign office		489			1		.23			615			1		.23
Total interest-bearing deposits		44,275			105		.24			43,455			117		.27
Federal funds purchased and securities sold under repurchase agreements		632			—		.04			1,182			2		.16
Bank notes and other short-term borrowings		572			9		1.52			597			9		1.49
Long-term debt (f), (g)		7,334			160		2.24			5,161			133		2.68
Total interest-bearing liabilities		52,813			274		.52			50,395			261		.52
Noninterest-bearing deposits		26,355								24,410
Accrued expense and other liabilities		2,222								1,791
Discontinued liabilities (g)		2,132								3,828
Total liabilities		83,522								80,424
Equity
Key shareholders’ equity		10,626								10,467
Noncontrolling interests		12								16
Total equity		10,638								10,483
Total liabilities and equity	$	94,160							$	90,907
Interest rate spread (TE)							2.69	%							2.78	%
Net interest income (TE) and net interest margin (TE)					2,376		2.88	%					2,317		2.97	%
TE adjustment (b)					28								24
Net interest income, GAAP basis				$	2,348							$	2,293

(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 35%.

(c) For purposes of these computations, nonaccrual loans are included in average loan balances.

(d) Commercial, financial and agricultural average balances include $88 million and $93 million of assets from commercial credit cards for the twelve months ended December 31, 2015, and December 31, 2014, 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 Fourth Quarter 2015 Profit

January 21, 2016

Page 22

Noninterest Expense

(dollars in millions)

	Three months ended						Twelve months ended
	12-31-15		9-30-15		12-31-14		12-31-15		12-31-14
Personnel (a)	$	429	$	426	$	409	$	1,652	$	1,591
Net occupancy		64		60		63		255		261
Computer processing		43		41		40		164		158
Business services and professional fees		44		40		38		159		156
Equipment		22		22		23		88		96
Operating lease expense		13		11		11		47		42
Marketing		17		17		16		57		49
FDIC assessment		8		8		9		32		30
Intangible asset amortization		9		9		10		36		39
OREO expense, net		1		2		2		6		5
Other expense		86		88		83		344		334
Total noninterest expense	$	736	$	724	$	704	$	2,840	$	2,761
Average full-time equivalent employees (b)		13,359		13,555		13,590		13,483		13,853

(a) Additional detail provided in table below.

(b) The number of average full-time equivalent employees has not been adjusted for discontinued operations.

Personnel Expense 

(in millions)

	Three months ended						Twelve months ended
	12-31-15		9-30-15		12-31-14		12-31-15		12-31-14
Salaries	$	231	$	234	$	224	$	912	$	891
Technology contract labor, net		13		13		13		46		56
Incentive and stock-based compensation		115		103		117		410		380
Employee benefits		64		75		53		266		240
Severance		6		1		2		18		24
Total personnel expense	$	429	$	426	$	409	$	1,652	$	1,591

KeyCorp Reports Fourth Quarter 2015 Profit

January 21, 2016

Page 23

Loan Composition

(dollars in millions)

										Percent change 12-31-15 vs.
	12-31-15			9-30-15			12-31-14			9-30-15			12-31-14
Commercial, financial and agricultural (a)	$	31,240		$	31,095		$	27,982			.5	%		11.6	%
Commercial real estate:
Commercial mortgage		7,959			8,180			8,047			(2.7	)		(1.1	)
Construction		1,053			1,070			1,100			(1.6	)		(4.3	)
Total commercial real estate loans		9,012			9,250			9,147			(2.6	)		(1.5	)
Commercial lease financing (b)		4,020			3,929			4,252			2.3			(5.5	)
Total commercial loans		44,272			44,274			41,381			—			7.0
Residential — prime loans:
Real estate — residential mortgage		2,242			2,267			2,225			(1.1	)		.8
Home equity:
Key Community Bank		10,127			10,282			10,366			(1.5	)		(2.3	)
Other		208			222			267			(6.3	)		(22.1	)
Total home equity loans		10,335			10,504			10,633			(1.6	)		(2.8	)
Total residential — prime loans		12,577			12,771			12,858			(1.5	)		(2.2	)
Consumer other — Key Community Bank		1,600			1,612			1,560			(.7	)		2.6
Credit cards		806			770			754			4.7			6.9
Consumer other:
Marine		583			620			779			(6.0	)		(25.2	)
Other		38			38			49			—			(22.4	)
Total consumer other		621			658			828			(5.6	)		(25.0	)
Total consumer loans		15,604			15,811			16,000			(1.3	)		(2.5	)
Total loans (c), (d)	$	59,876		$	60,085		$	57,381			(.3	)%		4.3	%
Loans Held for Sale Composition
(dollars in millions)
										Percent change 12-31-15 vs.
	12-31-15			9-30-15			12-31-14			9-30-15			12-31-14
Commercial, financial and agricultural	$	76		$	74		$	63			2.7	%		20.6	%
Real estate — commercial mortgage		532			806			638			(34.0	)		(16.6	)
Commercial lease financing		14			10			15			40.0			(6.7	)
Real estate — residential mortgage		17			26			18			(34.6	)		(5.6	)
Total loans held for sale (e)	$	639		$	916		$	734			(30.2	)%		(12.9	)%
Summary of Changes in Loans Held for Sale
(in millions)
	4Q15			3Q15			2Q15			1Q15			4Q14
Balance at beginning of period	$	916		$	835		$	1,649		$	734		$	784
New originations		1,655			1,673			1,650			2,130			2,465
Transfers from (to) held to maturity, net		22			24			6			10			2
Loan sales		(1,943	)		(1,616	)		(2,466	)		(1,204	)		(2,516	)
Loan draws (payments), net		(11	)		—			(4	)		(21	)		(1	)
Balance at end of period (e)	$	639		$	916		$	835		$	1,649		$	734

(a) Loan balances include $85 million, $88 million, and $88 million of commercial credit card balances at December 31, 2015, September 30, 2015, and December 31, 2014, respectively.

(b) Commercial lease financing includes receivables held as collateral for a secured borrowing of $134 million, $162 million, and $302 million at December 31, 2015, September 30, 2015, and December 31, 2014, respectively. Principal reductions are based on the cash payments received from these related receivables.

(c) At December 31, 2015, total loans include purchased loans of $114 million, of which $11 million were purchased credit impaired. At September 30, 2015, total loans include purchased loans of $119 million, of which $12 million were purchased credit impaired. At December 31, 2014, total loans include purchased loans of $138 million, of which $13 million were purchased credit impaired.

(d) Total loans exclude loans of $1.8 billion at December 31, 2015, $1.9 billion at September 30, 2015, and $2.3 billion at December 31, 2014, related to the discontinued operations of the education lending business.

(e) Total loans held for sale exclude loans held for sale of $169 million at September 30, 2015, and $179 million at June 30, 2015, related to the discontinued operations of the education lending business.

KeyCorp Reports Fourth Quarter 2015 Profit

January 21, 2016

Page 24

Exit Loan Portfolio From Continuing Operations

(in millions)

	Balance Outstanding				Change 12-31-15 vs.			Net Loan Charge-offs					Balance on Nonperforming Status
	12-31-15		9-30-15		9-30-15			4Q15		3Q15 (c)			12-31-15		9-30-15
Residential properties — homebuilder	$	6	$	6		—			—		—		$	8	$	5
Marine and RV floor plan		1		1		—			—		—			—		—
Commercial lease financing (a)		765		798	$	(33	)		—	$	(1	)		1		—
Total commercial loans		772		805		(33	)		—		(1	)		9		5
Home equity — Other		208		222		(14	)	$	2		(1	)		8		7
Marine		583		620		(37	)		1		3			6		6
RV and other consumer		41		44		(3	)		—		(1	)		—		1
Total consumer loans		832		886		(54	)		3		1			14		14
Total exit loans in loan portfolio	$	1,604	$	1,691	$	(87	)	$	3		—		$	23	$	19
Discontinued operations — education lending business (not included in exit loans above) (b)	$	1,828	$	1,891	$	(63	)	$	8	$	7		$	7	$	8

(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) Excludes loans held for sale of $169 million at September 30, 2015. There were no loans held for sale at December 31, 2015.

(c) Credit amounts indicate recoveries exceeded charge-offs.

Asset Quality Statistics From Continuing Operations

(dollars in millions)

	4Q15			3Q15			2Q15			1Q15			4Q14
Net loan charge-offs	$	37		$	41		$	36		$	28		$	32
Net loan charge-offs to average total loans		.25	%		.27	%		.25	%		.20	%		.22	%
Allowance for loan and lease losses	$	796		$	790		$	796		$	794		$	794
Allowance for credit losses (a)		852			844			841			835			829
Allowance for loan and lease losses to period-end loans		1.33	%		1.31	%		1.37	%		1.37	%		1.38	%
Allowance for credit losses to period-end loans		1.42			1.40			1.44			1.44			1.44
Allowance for loan and lease losses to nonperforming loans		205.7			197.5			190.0			181.7			190.0
Allowance for credit losses to nonperforming loans		220.2			211.0			200.7			191.1			198.3
Nonperforming loans at period end (b)	$	387		$	400		$	419		$	437		$	418
Nonperforming assets at period end		403			417			440			457			436
Nonperforming loans to period-end portfolio loans		.65	%		.67	%		.72	%		.75	%		.73	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		.67			.69			.75			.79			.76

(a) Includes the allowance for loan and lease losses plus the liability for credit losses on lending-related unfunded commitments.

(b) Loan balances exclude $11 million, $12 million, $12 million, $12 million, and $13 million of purchased credit impaired loans at December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015, and December 31, 2014, respectively.

KeyCorp Reports Fourth Quarter 2015 Profit

January 21, 2016

Page 25

Summary of Loan and Lease Loss Experience From Continuing Operations

(dollars in millions)

	Three months ended									Twelve months ended
	12-31-15			9-30-15			12-31-14			12-31-15			12-31-14
Average loans outstanding	$	59,576		$	59,281		$	56,541		$	58,594		$	55,679
Allowance for loan and lease losses at beginning of period	$	790		$	796		$	804		$	794		$	848
Loans charged off:
Commercial, financial and agricultural		18			26			10			77			45
Real estate — commercial mortgage		2			—			3			4			6
Real estate — construction		—			—			1			1			5
Total commercial real estate loans		2			—			4			5			11
Commercial lease financing		6			2			4			11			10
Total commercial loans		26			28			18			93			66
Real estate — residential mortgage		2			1			3			6			10
Home equity:
Key Community Bank		5			6			8			26			37
Other		2			1			1			6			9
Total home equity loans		7			7			9			32			46
Consumer other — Key Community Bank		6			6			7			24			30
Credit cards		7			7			7			30			34
Consumer other:
Marine		3			4			5			17			23
Other		—			—			—			1			2
Total consumer other		3			4			5			18			25
Total consumer loans		25			25			31			110			145
Total loans charged off		51			53			49			203			211
Recoveries:
Commercial, financial and agricultural		3			2			6			16			33
Real estate — commercial mortgage		4			—			—			6			4
Real estate — construction		—			—			1			1			17
Total commercial real estate loans		4			—			1			7			21
Commercial lease financing		—			2			2			7			10
Total commercial loans		7			4			9			30			64
Real estate — residential mortgage		2			—			—			3			2
Home equity:
Key Community Bank		2			2			2			7			9
Other		—			2			1			4			5
Total home equity loans		2			4			3			11			14
Consumer other — Key Community Bank		1			1			2			6			6
Credit cards		—			1			—			2			1
Consumer other:
Marine		2			1			2			8			9
Other		—			1			1			1			2
Total consumer other		2			2			3			9			11
Total consumer loans		7			8			8			31			34
Total recoveries		14			12			17			61			98
Net loan charge-offs		(37	)		(41	)		(32	)		(142	)		(113	)
Provision (credit) for loan and lease losses		43			36			22			145			59
Foreign currency translation adjustment		—			(1	)		—			(1	)		—
Allowance for loan and lease losses at end of period	$	796		$	790		$	794		$	796		$	794
Liability for credit losses on lending-related commitments at beginning of period	$	54		$	45		$	35		$	35		$	37
Provision (credit) for losses on lending-related commitments		2			9			—			21			(2	)
Liability for credit losses on lending-related commitments at end of period (a)	$	56		$	54		$	35		$	56		$	35
Total allowance for credit losses at end of period	$	852		$	844		$	829		$	852		$	829
Net loan charge-offs to average total loans		.25	%		.27	%		.22	%		.24	%		.20	%
Allowance for loan and lease losses to period-end loans		1.33			1.31			1.38			1.33			1.38
Allowance for credit losses to period-end loans		1.42			1.40			1.44			1.42			1.44
Allowance for loan and lease losses to nonperforming loans		205.7			197.5			190.0			205.7			190.0
Allowance for credit losses to nonperforming loans		220.2			211.0			198.3			220.2			198.3
Discontinued operations — education lending business:
Loans charged off	$	10		$	9		$	11		$	35		$	45
Recoveries		2			2			3			12			14
Net loan charge-offs	$	(8	)	$	(7	)	$	(8	)	$	(23	)	$	(31	)

(a) Included in “accrued expense and other liabilities” on the balance sheet.

KeyCorp Reports Fourth Quarter 2015 Profit

January 21, 2016

Page 26

Summary of Nonperforming Assets and Past Due Loans From Continuing Operations

(dollars in millions)

	12-31-15			9-30-15			6-30-15			3-31-15			12-31-14
Commercial, financial and agricultural	$	82		$	89		$	100		$	98		$	59
Real estate — commercial mortgage		19			23			26			30			34
Real estate — construction		9			9			12			12			13
Total commercial real estate loans		28			32			38			42			47
Commercial lease financing		13			21			18			20			18
Total commercial loans		123			142			156			160			124
Real estate — residential mortgage		64			67			67			72			79
Home equity:
Key Community Bank		182			174			176			182			185
Other		8			7			8			9			10
Total home equity loans		190			181			184			191			195
Consumer other — Key Community Bank		2			1			1			2			2
Credit cards		2			2			2			2			2
Consumer other:
Marine		6			6			8			9			15
Other		—			1			1			1			1
Total consumer other		6			7			9			10			16
Total consumer loans		264			258			263			277			294
Total nonperforming loans (a)		387			400			419			437			418
OREO		14			17			20			20			18
Other nonperforming assets		2			—			1			—			—
Total nonperforming assets	$	403		$	417		$	440		$	457		$	436
Accruing loans past due 90 days or more	$	72		$	54		$	66		$	111		$	96
Accruing loans past due 30 through 89 days		208			271			181			216			235
Restructured loans — accruing and nonaccruing (b)		280			287			300			268			270
Restructured loans included in nonperforming loans (b)		159			160			170			141			157
Nonperforming assets from discontinued operations — education lending business		7			8			6			8			11
Nonperforming loans to period-end portfolio loans		.65	%		.67	%		.72	%		.75	%		.73	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		.67			.69			.75			.79			.76

(a) Loan balances exclude $11 million, $12 million, $12 million, $12 million, and $13 million of purchased credit impaired loans at December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015, and December 31, 2014, respectively.

(b) Restructured loans (i.e., troubled debt restructurings) are those for which Key, for reasons related to a borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. These concessions are made to improve the collectability of the loan and generally take the form of a reduction of the interest rate, extension of the maturity date or reduction in the principal balance.

KeyCorp Reports Fourth Quarter 2015 Profit

January 21, 2016

Page 27

Summary of Changes in Nonperforming Loans From Continuing Operations

(in millions)

	4Q15			3Q15			2Q15			1Q15			4Q14
Balance at beginning of period	$	400		$	419		$	437		$	418		$	401
Loans placed on nonaccrual status		81			81			92			123			103
Charge-offs		(51	)		(53	)		(52	)		(47	)		(49	)
Loans sold		—			(2	)		—			—			(2	)
Payments		(21	)		(16	)		(25	)		(9	)		(17	)
Transfers to OREO		(4	)		(4	)		(5	)		(7	)		(6	)
Transfers to other nonperforming assets		(1	)		—			—			—			—
Loans returned to accrual status		(17	)		(25	)		(28	)		(41	)		(12	)
Balance at end of period (a)	$	387		$	400		$	419		$	437		$	418

(a) Loan balances exclude $11 million, $12 million, $12 million, $12 million, and $13 million of purchased credit impaired loans at December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015, and December 31, 2014, respectively.

Summary of Changes in Other Real Estate Owned, Net of Allowance, From Continuing Operations

(in millions)

	4Q15			3Q15			2Q15			1Q15			4Q14
Balance at beginning of period	$	17		$	20		$	20		$	18		$	16
Properties acquired — nonperforming loans		4			4			5			7			6
Valuation adjustments		(2	)		(2	)		(1	)		(1	)		(2	)
Properties sold		(5	)		(5	)		(4	)		(4	)		(2	)
Balance at end of period	$	14		$	17		$	20		$	20		$	18

KeyCorp Reports Fourth Quarter 2015 Profit

January 21, 2016

Page 28

Line of Business Results

(dollars in millions)

																Percent change 4Q15 vs.
	4Q15			3Q15			2Q15			1Q15			4Q14			3Q15			4Q14
Key Community Bank
Summary of operations
Total revenue (TE)	$	588		$	579		$	560		$	549		$	558			1.6	%		5.4	%
Provision for credit losses		20			18			3			30			11			11.1			81.8
Noninterest expense		459			448			450			441			449			2.5			2.2
Net income (loss) attributable to Key		68			71			67			49			62			(4.2	)		9.7
Average loans and leases		30,925			31,039			30,707			30,662			30,478			(.4	)		1.5
Average deposits		52,219			51,234			50,766			50,417			50,851			1.9			2.7
Net loan charge-offs		23			21			20			28			28			9.5			(17.9	)
Net loan charge-offs to average total loans		.30	%		.27	%		.26	%		.37	%		.36	%		N/A			N/A
Nonperforming assets at period end	$	303		$	306		$	305		$	328		$	340			(1.0	)		(10.9	)
Return on average allocated equity		10.11	%		10.49	%		10.05	%		7.27	%		9.15	%		N/A			N/A
Average full-time equivalent employees		7,228			7,326			7,400			7,452			7,414			(1.3	)		(2.5	)
Key Corporate Bank
Summary of operations
Total revenue (TE)	$	479		$	454		$	477		$	401		$	460			5.5	%		4.1	%
Provision for credit losses		26			30			41			6			7			(13.3	)		271.4
Noninterest expense		254			246			252			214			244			3.3			4.1
Net income (loss) attributable to Key		145			138			133			129			149			5.1			(2.7	)
Average loans and leases		26,981			26,425			25,298			24,722			23,798			2.1			13.4
Average loans held for sale		820			918			1,234			775			855			(10.7	)		(4.1	)
Average deposits		19,081			18,809			19,708			18,567			18,355			1.4			4.0
Net loan charge-offs		12			20			12			(4	)		(3	)		(40.0	)		N/M
Net loan charge-offs to average total loans		.18	%		.30	%		.19	%		(.07	)%		(.05	)%		N/A			N/A
Nonperforming assets at period end	$	74		$	85		$	105		$	93		$	50			(12.9	)		48.0
Return on average allocated equity		29.61	%		28.65	%		29.62	%		28.04	%		33.63	%		N/A			N/A
Average full-time equivalent employees		2,113			2,173			2,058			2,057			2,043			(2.8	)		3.4

TE = Taxable Equivalent, N/A = Not Applicable, N/M = Not Meaningful

EX-99.2

KeyCorp

Fourth Quarter 2015 Earnings Review

January 21, 2016

Beth E. Mooney

Chairman and

Chief Executive Officer

Don Kimble

Chief Financial Officer

Exhibit 99.2

FORWARD-LOOKING STATEMENTS AND ADDITIONAL

INFORMATION DISCLOSURE

This

communication

contains

forward-looking

statements

within

the

meaning

of

the

Private

Securities

Litigation

Reform

Act

of

1995

including,

but

not

limited

to,

KeyCorp’s

and

First

Niagara’s

expectations

or

predictions

of

future

financial

or

business

performance

or

conditions.

Forward-looking

statements

are

typically

identified

by

words

such

as

“believe,”

“expect,”

“anticipate,”

“intend,”

“target,”

“estimate,”

“continue,”

“positions,”

“plan,”

“predict,”

“project,”

“forecast,”

“guidance,”

“goal,”

“objective,”

“prospects,”

“possible”

or

“potential,”

by

future

conditional

verbs

such

as

“assume,”

“will,”

“would,”

“should,”

“could”

or

“may”,

or

by

variations

of

such

words

or

by

similar

expressions.

These

forward-looking

statements

are

subject

to

numerous

assumptions,

risks

and

uncertainties,

which

change

over

time.

Forward-looking

statements

speak

only

as

of

the

date

they

are

made

and

we

assume

no

duty

to

update

forward-looking

statements.

Actual

results

may

differ

materially

from

current

projections.

In

addition

to

factors

previously

disclosed

in

KeyCorp’s

and

First

Niagara’s

reports

filed

with

the

SEC

and

those

identified

elsewhere

in

this

communication,

the

following

factors,

among

others,

could

cause

actual

results

to

differ

materially

from

forward-looking

statements

or

historical

performance:

ability

to

obtain

regulatory

approvals

and

meet

other

closing

conditions

to

the

merger,

including

approval

by

KeyCorp

and

First

Niagara

shareholders

on

the

expected

terms

and

schedule,

including

the

risk

that

regulatory

approvals

required

for

the

merger

are

not

obtained

or

are

obtained

subject

to

conditions

that

are

not

anticipated;

delay

in

closing

the

merger;

difficulties

and

delays

in

integrating

the

First

Niagara

business

or

fully

realizing

cost

savings

and

other

benefits;

business

disruption

following

the

merger;

changes

in

asset

quality

and

credit

risk;

the

inability

to

sustain

revenue

and

earnings

growth;

changes

in

interest

rates

and

capital

markets;

inflation;

customer

acceptance

of

KeyCorp’s

products

and

services;

customer

borrowing,

repayment,

investment

and

deposit

practices;

customer

disintermediation;

the

introduction,

withdrawal,

success

and

timing

of

business

initiatives;

competitive

conditions;

the

inability

to

realize

cost

savings

or

revenues

or

to

implement

integration

plans

and

other

consequences

associated

with

mergers,

acquisitions

and

divestitures;

economic

conditions;

and

the

impact,

extent

and

timing

of

technological

changes,

capital

management

activities,

and

other

actions

of

the

Federal

Reserve

Board

and

legislative

and

regulatory

actions

and

reforms.

Annualized,

pro

forma,

projected

and

estimated

numbers

are

used

for

illustrative

purpose

only,

are

not

forecasts

and

may

not

reflect

actual

results.

This

presentation

also

includes

certain

non-GAAP

financial

measures

related

to

“tangible

common

equity,”

“Common

Equity

Tier

1,”

“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

of

this

presentation

or

page

100

of

our

Form

10-Q

dated

September

30,

2015.

2

Note: graphs not to scale; P.E. = period-end

(a)

Non-GAAP measure; see Appendix for reconciliation

(b)

12-31-15 ratio is estimated

3

Disciplined

Capital

Management

Generated positive operating leverage from prior year

Total average loans up 5% from prior year

Positive trends in fee-based businesses

-

Investment banking and debt placement (record year,

+12%), corporate services (+11%), cards and payments

(+10%), and trust & investment services (+7%)

Expenses well-managed, reflect strategic investments

Strong Risk

Management

Investor Highlights –

2015

Positive

Operating

Leverage

Strong asset quality

-

NCOs represented 24 bps of average loans in 2015

-

NPLs down 7% from prior year: 65 bps of P.E. loans

Maintained credit discipline

Maintained strong capital position

Increased dividend by 15% in 2Q15; planned

increase of 13% in 2016 (subject to Board approval)

Expect share repurchases and an increased

dividend to be included in 2016 CCAR submission

2015

2014

+5%

Pre-Provision Net

Revenue

(a)

Net Charge-offs

2015 NCOs to

average loans

.24%

-

.40%

.60%

1.00%

Targeted range

Strong Capital

Common Equity

Tier 1 Ratio

(a), (b)

of

11.0%

at December 31,

2015

4

First Niagara: A Compelling Opportunity

Acquisition Drives Value

4Q15 Updates

Executing against comprehensive pre-merger

integration plan

Merger integration team established

–

Top talent at KEY and FNFG; significant prior

M&A experience

Focused on continued assessment, detailed

planning and the approval process

Continued progress and momentum on announced acquisition; anticipated

closing in 3Q16

Accelerates Key’s transformation into a high-

performing regional bank

Generates attractive financial returns

Provides significant revenue opportunities

–

Broader suite of products to new and existing

clients

Creates complementary business mix and a more

balanced franchise

Key

Cash

Efficiency

> 300 bps

> 200 bps

~5%

ROTCE

EPS

Key

Key

Pro Forma

Pro Forma

Pro Forma

5

Financial Review

6

Financial Highlights

TE = Taxable equivalent, EOP = End of Period

(a)

From continuing operations

(b)

Year-over-year average balance growth

(c) 

From consolidated operations

(d)

12-31-15 ratios are estimated

(e)

Non-GAAP measure: see Appendix for reconciliation

EPS –

assuming dilution

$ .27

$ .26

$ .27

$ .26

$ .28

Cash efficiency

ratio

(e)

66.4

%

66.9

%

65.1

%

65.1

%

64.4

%

Net interest margin (TE)

2.87

2.87

2.88

2.91

2.94

Return on average total assets

.97

.95

1.03

1.03

1.12

Total loans and leases

5

%

6

%

4

%

5

%

5

%

CF&A

loans

14

15

10

12

12

Deposits

(excl. foreign deposits)

3

3

6

5

2

Common Equity Tier 1

(d), (e)

11.0

%

10.5

%

10.7

%

10.6

%

-

Tier 1 common equity

(e)

-

-

-

-

11.2

%

Tier 1 risk-based capital

(d)

11.4

10.9

11.1

11.0

11.9

Tangible

common equity to tangible assets

(e)

10.0

9.9

9.9

9.9

9.9

NCOs to average loans

.25

%

.27

%

.25

%

.20

%

.22

%

NPLs to EOP portfolio loans

.65

.67

.72

.75

.73

Allowance for loan losses to EOP loans

1.33

1.31

1.37

1.37

1.38

Balance

Sheet

Growth

(a),

(b)

Capital

(c)

Asset

Quality

(a)

Financial

Performance

(a)

Metrics

4Q15

3Q15

2Q15

1Q15

4Q14

7

Loans

$ in billions

Average Commercial, Financial & Agricultural Loans

Average Commercial, Financial & Agricultural Loans

Total Average Loans

Total Average Loans

Exit Portfolios

Home Equity & Other

Commercial

$ in billions

Period-end total loans up 4% in 4Q15 from 4Q14,

driven by CF&A loans up 12%

Total commitments continue to grow, with

utilization relatively stable

Average Loans

Period-End Loans

CF&A loans

up 14%

CF&A loans

up 14%

Highlights

Highlights

Total average loans up 5%

Total average loans up 5%

Average total loans up 5% in 4Q15 from 4Q14,

driven by CF&A loans up 14%

–

Broad-based growth across Key’s

commercial lines of business

Community Bank and Corporate Bank 4Q15

average balances up 2% and 13%, respectively,

compared to 4Q14

$20.0

$30.0

$40.0

$50.0

$60.0

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

$21.0

$23.0

$25.0

$27.0

$29.0

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

Deposits up 2% from 3Q15 reflecting:

–

Seasonal and short-term deposit inflows from

commercial clients

–

Growth in NOW and money market deposit

accounts, along with certificates of deposit

$26.3

$37.6

$2.3

$5.2

8

4Q15 Average Deposit Mix

Deposit growth of 3% from 4Q14 related to:

–

Growth in commercial mortgage servicing

–

Inflows from both commercial and consumer

clients

Average

Deposits

(a)

(a)

Excludes deposits in foreign office

Cost of total deposits

(a)

CDs and other time deposits

Savings

Noninterest-bearing

NOW and MMDA

Total average deposits

(a)

Highlights

Deposits

vs. Prior Quarter

vs. Prior Year

$ in billions

$ in billions

Deposit cost remains relatively stable

.15%

.15%

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

$25.0

$35.0

$45.0

$55.0

$65.0

$75.0

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

Total average deposits up 3%

Net interest income up $12 MM, or 2%, from

3Q15, primarily due to higher earning asset

yields and loan fees

9

TE = Taxable equivalent

Net interest income (TE)

NIM (TE)

NIM Change (bps):

vs.  3Q15

Higher earning asset yields

0.02

Loan fees

0.02

Higher

levels of excess liquidity

(0.04)

Total change

-

Maintained moderate asset sensitivity

–

Naturally asset sensitive balance sheet flows:

approximately 70% of loans variable rate

–

High quality investment portfolio with average

life of 3.9 years

–

Flexibility to quickly adjust interest rate risk

position

vs. Prior Year

Net interest income up $22 MM, or 4%, from

4Q14, reflecting higher earning asset balances,

partially offset by lower earning asset yields

vs. Prior Quarter

Net Interest Income and Margin

Net Interest Income & Net Interest Margin Trend (TE)

Highlights

$ in millions; continuing operations

$588

$610

2.94%

2.87%

2.00%

2.50%

3.00%

3.50%

4.00%

$500

$540

$580

$620

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

10

Noninterest Income

Noninterest Income

Noninterest Income

$ in millions

4Q15

vs. 3Q15

vs. 4Q14

Trust and

investment services income

$

$

(3)

$         (7)

Investment banking and debt

placement fees

127

18

1

Service charges on deposit accounts

64

(4)

-

Operating lease

income and other

leasing gains

15

-

-

Corporate services

income

55

(2)

2

Cards

and payments income

47

-

4

Corporate-owned life insurance

36

6

(2)

Consumer mortgage income

2

(1)

(1)

Mortgage

servicing fees

15

4

4

Net gains (losses) from principal

investing

-

(11)

(18)

Other income

19

8

12

Total

noninterest income

$

$        15

$         (5)

Highlights

Highlights

Noninterest income down 1% from 4Q14

–

Principal investing down $18 MM

–

Lower trust and investment services,

reflecting market variability

–

Other income $12 MM higher, impacted by

investment gains in Real Estate Capital

–

Strength in core businesses, with growth

in investment banking and debt placement,

corporate services, cards and payments

and mortgage servicing

Noninterest income up 3% from 3Q15

–

Investment banking and debt placement

fees up $18 MM, or 17%

–

Growth in other income due to investment

gains in Real Estate Capital

–

Principal investing down $11 MM

vs. Prior Quarter

vs. Prior Year

(a)

(a)

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

22%

26%

13%

10%

11%

3%

3%

12%

Trust & Investment Services

Investment Banking & Debt Placement

Deposit Service Charges

Cards & Payments

Corporate Services

Mortgage Servicing Fees

Operating Lease Income

Other

485

105

Noninterest

expense

$ in millions

4Q15

vs. 3Q15

vs. 4Q14

Personnel

(a)

$        429

$        (3)

$       (20)

Net occupancy

64

(4)

(1)

Computer processing

43

(2)

(3)

Business services, professional fees

44

(4)

(6)

Equipment

22

-

1

Operating lease expense

13

(2)

(2)

Marketing

17

-

(1)

FDIC

assessment

8

-

1

Intangible asset amortization

9

-

1

OREO

expense, net

1

1

1

Other expense

86

2

(3)

Total

noninterest expense

$

736

$        (12)

$        (32)

11

Noninterest Expense

Noninterest Expense

Noninterest Expense

(a)

(b)

Non-GAAP measure: see Appendix for reconciliation

Highlights

Highlights

Cash efficiency ratio, excl. efficiency,

pension settlement, and merger-

related costs

Cash efficiency

ratio

(b)

4Q15 noninterest expense up 5% from 4Q14

–

Higher personnel costs (+$20 MM)

Employee benefits expense (+$11 MM)

Investments in client-facing personnel

Merger-related costs in 4Q15 (+$6 MM)

Expense increase of 2% from 3Q15

–

Higher incentive compensation (+$12 MM)

–

Lower employee benefits expense (-$11 MM)

Lower pension settlement charge

–

Merger-related costs in 4Q15 (+$6 MM)

–

Higher efficiency-related costs (+$6 MM)

vs. Prior Year

vs. Prior Quarter

$736

4Q15 noninterest expense includes:

Efficiency-related costs of $10 MM

Reflecting branch closures and severance

Merger-related costs of $6 MM

Pension settlement charge of $4 MM

$ in millions

$704

60.0%

64.0%

68.0%

72.0%

$620

$660

$700

$740

2Q13

4Q13

2Q14

4Q14

2Q15

4Q15

Includes a pension settlement charge of $4 million in 4Q15, $18 million in 3Q15 and $3 million in 4Q14

12

Nonperforming Assets

Net Charge-offs & Provision for Credit Losses

NPLs

NPLs to period-end loans

NCOs

Provision for credit

losses

NCOs to average loans

$ in millions

NPLs held for sale,

OREO & other NPAs

Credit Quality

Highlights

Net loan charge-offs remain below targeted range,

at 25 basis points of average loans

Nonperforming loans represented 65 basis points

of period-end loans

Nonperforming assets down 8% from prior year

Allowance for loan and lease losses represented

1.33% of period-end loans; 206% coverage of

nonperforming loans

Allowance for Loan and Lease Losses

Allowance for loan and

lease losses to NPLs

Allowance for loan

and lease losses

$ in millions

$436

$403

$ in millions

NPAs down 8%

$32

$37

$22

$45

.22%

.25%

.00%

.20%

.40%

.60%

$0

$10

$20

$30

$40

$50

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

.73%

.65%

0.40%

0.80%

1.20%

1.60%

$0

$200

$400

$600

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

$794

$796

190%

206%

110%

135%

160%

185%

210%

$600

$700

$800

$900

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

13

Maintained strong capital position

Common Equity Tier 1 ratio of 10.95% at 12/31/15

Increased quarterly common share dividend by

15% in 2Q15; planned increase of 13% in 2016

(subject to Board approval)

Expect share repurchases and an increased

dividend to be included in 2016 CCAR

submission

Tier 1 Common Equity

(a)

Tangible Common Equity to Tangible Assets

(a)

Highlights

(a)

Non-GAAP measure: see Appendix for reconciliations

(b)

12-31-15 ratio is estimated

(c)

The Regulatory Capital Rules, effective January 1, 2015 for Key, introduced a new capital measure, “Common Equity Tier 1”

Common Equity

Tier 1

(a), (b), (c)

Capital

11.17%

10.95%

6.00%

8.00%

10.00%

12.00%

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

9.88%

9.98%

6.00%

7.00%

8.00%

9.00%

10.00%

11.00%

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

Outlook and Expectations

Average Loans

•

Mid-single digit growth vs. FY 2015

Net Interest Income

•

Up low single-digit percentage

without the benefit from higher interest rates

•

Mid-single digit growth with the benefit of higher interest rates

Noninterest

Income

•

Mid-single digit growth compared to 2015

Expense

•

Relatively stable with 2015

Efficiency / Productivity

•

Positive operating leverage

Asset Quality

•

Net charge-offs to average loans below targeted range of 40 –

60 bps 

•

Allowance, as a percentage of period-end loans, to remain relatively stable with        

4Q15 level

Capital

•

Dividend expected to increase

to $.085 per common share in 2Q16 (subject to Board

approval)

•

Expect 2016 CCAR submission to include common share repurchases and an increased

dividend

14

Guidance ranges:   relatively stable:

+/-

2%;

low

single-digit:

<5%;

mid-single

digit:

4%

-

6%

Note: Guidance provided does not include merger-related charges

FY 2016: Key Stand-alone

15

Appendix

Progress on Targets for Success: Key Stand-alone

(a) 

Continuing operations, unless otherwise noted

(b)

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

foreign office)

(c)

Excludes intangible asset amortization; non-GAAP measure: see Appendix for reconciliation

16

Balance Sheet

Efficiency

Moderate Risk Profile

High Quality, Diverse

Revenue Streams

Positive Operating

Leverage

Financial Returns

Metrics

(a)

2014

2015

Targets

Loan

to

deposit

ratio

(b)

NCOs to average loans

Provision for credit losses          

to average loans

Net interest margin

Noninterest income to total revenue

Cash

efficiency

ratio

(c)

85%

88%

.20%

.24%

66.2%

65.9%

.10%

.28%

2.97%

2.88%

44%

44%

90% -100%

40 -

60 bps

3.00% -3.25%

<60%

>40%

1.08%

.99%

1.00% -

1.25%

Return on average assets

17

Average Total Investment Securities

Highlights

Average AFS securities

Investment Portfolio

Portfolio composed primarily of GNMA and GSE-

backed MBS and CMOs

Continue to position portfolio for regulatory

liquidity requirements:

–

2015 average balance growth reflects

actions taken to increase liquidity reserves

–

Growth and reinvestment of portfolio cash

flows have been predominantly in GNMA

securities (~53% of total portfolio was

GNMA at 12/31/15)

Securities cash flows of $1.0 B in 4Q15 and     

$1.1 billion in 3Q15

Average portfolio life at 12/31/15 of 3.9 years vs.

3.8 years at 9/30/15

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

2.10%

.00%

1.00%

2.00%

3.00%

4.00%

5.00%

$0.0

$5.0

$10.0

$15.0

$20.0

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

20%

20%

10%

14%

18%

22%

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

2.12%

$17.1

$19.1

$ in billions

Interest Rate Risk Management

Naturally Asset Sensitive Balance Sheet

Actively Managing Rate Risk

•

High quality

•

Fixed rate agency MBS and CMOs

•

Average maturity: 3.9 years

•

GNMAs total 53% of total portfolio

at period-end

•

Reinvesting cash flows into GNMAs

$11.7

$18

$7.1

$7.1

Size of swap

portfolio

Modeled asset

sensitivity

~3%

0%

8%

$7.1

Flexibility to Adjust Rate

Sensitivity with Swaps

Loan Portfolio

Variable:

70%

Fixed:

30%

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: 37%

Interest-

bearing, non-

time: 56%

CDs:

7%

•

Maintained moderate asset sensitive position of ~3%

-

Assumes 200 basis point increase in short and intermediate-

term rates over a 12-month period

•

Utilize swaps for debt hedging and asset liability management

-

Fairly even pace of A/LM swap maturities

-

$2.4B A/LM swaps scheduled to mature by year end 2016

12/31/15

Swaps

($ in B)

12/31/15

Notional Amt.

Wtd. Avg.

Maturity (Yrs.)

Receive

Rate

Pay

Rate

A/L

Management

$   11.7

2.5

1.1%

.3%

Debt

7.1

3.6

2.0

.4

$  18.8

1.4%

.3%

4Q15

$19.1 B

AFS: $14.2 B

HTM: $4.9 B

Balance sheet has relatively short duration and is

impacted by the short-end of the curve

$18.8 B

18

4Q15

4Q15

Note: Loan, deposit and investment portfolio balances reflect quarterly average balances

(a)

Excludes deposits in foreign office

19

Credit Quality Trends

Criticized Outstandings

(a)

to Period-end Total Loans

Delinquencies to Period-end Total Loans

(a)

Loan and lease outstandings

(b)

From continuing operations

2.5%

3.1%

0.0%

1.0%

2.0%

3.0%

4.0%

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

Metric

(b)

4Q15

3Q15

2Q15

1Q15

4Q14

Delinquencies to

EOP total loans: 30-89 days

.35

%

.45

%

.31

%

.37

%

.41

%

Delinquencies to

EOP total loans: 90+ days

.12

.09

.11

.19

.17

NPLs to EOP portfolio loans

.65

.67

.72

.75

.73

NPAs to EOP portfolio loans + OREO + Other NPAs

.67

.69

.75

.79

.76

Allowance for loan losses to period-end loans

1.33

1.31

1.37

1.37

1.38

Allowance for loan losses to NPLs

205.7

197.5

190.0

181.7

190.0

Continuing operations

Continuing operations

.41%

.35%

.17%

.12%

.00%

.25%

.50%

.75%

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

30 –

89 days delinquent

90+ days delinquent

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

(%)

12/31/15

4Q15

4Q15

4Q15

12/31/15

12/31/15

12/31/15

12/31/15

$   31,240

$   30,884

$            15

.19%

$                 82

$             450

1.44%

548.78%

Commercial real estate:

Commercial Mortgage

7,959

8,019

(2)

N/M

19

134

1.68

705.26

Construction

1,053

1,067

-

-

9

25

2.37

277.78

Commercial lease financing

4,020

3,910

6

.61

13

47

1.17

361.54

Real

estate

–

residential

mortgage

2,242

2,252

-

-

64

17

.76

26.56

Home equity

10,335

10,418

5

.19

190

57

.55

30.00

Credit cards

806

780

7

3.56

2

33

4.09

N/M

Consumer

other

–

Key

Community

Bank

1,600

1,605

5

1.24

2

20

1.25

N/M

Consumer

other

–

Exit

Portfolio

621

641

1

.62

6

13

2.09

216.67

Continuing total

(e)

$   59,876

$    59,576

$            37

.25%

$                 387

$             796

1.33

205.68%

Discontinued operations

1,828

1,851

8

1.71

7

28

1.53

400.00

Consolidated total

$   61,704

$    61,427

$            45

.29%

$                 394

$             824

1.34

209.14%

Credit Quality by Portfolio

Credit Quality

$ in millions

20

(a) 

12-31-15 ending loan balance includes $85 million of commercial credit card balances; 12-31-15 average loan balance includes $87 million of

assets from commercial credit cards

(b)

Net loan charge-off amounts are annualized in calculation

(c)

12-31-15 NPL amount excludes $11 million of purchased credit impaired loans

(d)

12-31-15 allowance by portfolio is estimated

(e)

12-31-15 ending loan balance includes purchased loans of $114 million, of which $11 million were purchased credit impaired

N/M = Not meaningful

Commercial, financial and agricultural

(a)

Oil & Gas

Longstanding history, expertise and relationships

21

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

Total Loans Outstanding, 12/31/15

Primarily secured by proven reserves

Relationships contributed ~2% of FY15 investment

banking and debt placement fees

Net charge-offs lower than overall portfolio

Oil & Gas Outstanding Balances, 12/31/15

Oil & Gas: 2%

Other: 98%

Oilfield Services

Upstream: 57%,

$0.6 B

Midstream: 34%,   

$0.4 B

Downstream: 9%,

$0.1 B

$0.1 B

Oil & Gas

$1.1 B

(a) Average LTVs are at origination; current average LTVs for Community Bank total home equity loans and lines is approximately 67%, which

compares to 68% at the end of the third quarter of 2015

Home Equity Portfolio –

12/31/15

$ in millions, except average loan size

Home Equity Portfolio

Highlights

High quality portfolio

Community bank loans and lines: 98% of total portfolio; branch-

originated

–

61% first lien position

–

Average FICO score of 770

–

Average LTV at origination: 71%

$4.1 billion of the total portfolio are fixed rate loans that require

principal and interest payments; $6.2 billion are lines

$1.1 billion in lines outstanding (11% 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

22

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

$            6,128

$

771

67

%

.6   %

58

%

4

%

2

%

3

%

33

%

Second lien

3,999

46,102

767

77

3.5

41

4

3

3

49

Community Bank

$          10,127

58,363

770

71

1.7

52

4

3

3

38

Exit portfolio

208

19,066

728

80

28.9

-

-

-

-

100

Total home equity portfolio

$          10,335

Nonaccrual loans and lines

First lien

109

$          64,368

715

73

%

3.5%

14

%

3

%

2

%

5

%

76

%

Second lien

73

47,372

709

80

4.0

6

2

2

5

85

Community Bank

182

56,245

713

77

3.7

11

2

2

5

80

Exit portfolio

8

22,333

705

83

23.0

-

-

-

-

100

Total home equity nonaccruals

190

Fourth quarter net charge-offs (NCOs)

Total home equity portfolio

5

% of average loans

.19

%

70,622

$

$

$

$

Balance Outstanding

Change

Net Loan Charge-offs

Balance on

Nonperforming Status

12-31-15

9-30-15

12-31-15 vs.  

9-30-15

4Q15

3Q15

(b)

12-31-15

9-30-15

Residential properties –

homebuilder

$           6

$           6

-

-

-

$          8  

$          5  

Marine and RV floor plan

1

1

-

-

-

-

-

Commercial

lease

financing

(a)

765

798

$      

(33)

-

$        (1)

1

-

Total commercial loans

772

805

(33)

-

(1)

9  

5  

Home equity –

Other

208

222

(14)

$      2

(1)

8

7

Marine

583

620

(37)

1

3

6

6

RV and other consumer

41

44

(3)

-

(1)

-

1

Total consumer loans

832

886

(54)

3

1

14

14

Total exit loans in loan portfolio

$    1,604

$    1,691

$

(87)

$         3

$         -

$        23

$        19

Discontinued

operations

–

education

lending

business

(not

included

in

exit

loans

above)

(c)

$    1,828

$    1,891

$        (63)

$        8

$        7

$       

7

$       

8

$2,148

$1,648

$0

$1,000

$2,000

$3,000

$4,000

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

$ in millions; average balances

$ in millions

Exit Loan Portfolio

Exit Loan Portfolio

23

(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

(c)

Excludes loans held for sale of $169 million at September 30, 2015. There were no loans held for sale at December 31, 2015. 

Three months ended

12-31-15

9-30-15

6-30-15

3-31-15

12-31-14

Tangible common equity to tangible assets at period end

Key shareholders’ equity (GAAP)

$

10,746

$

10,705

$

10,590

$

10,603

$

10,530

Less:

Intangible

assets

(a)

1,080

1,084

1,085

1,088

1,090

Preferred

Stock,

Series

A

(b)

281

281

281

281

282

Tangible common equity (non-GAAP) 

$

9,3485

$

9,340

$

9,224

$

9,234

$

9,158

Total assets (GAAP)

$

95,133

$

95,422

$

94,606

$

94,206

$

93,821

Less:

Intangible

assets

(a)

1,080

1,084

1,085

1,088

1,090

Tangible assets (non-GAAP)

$

94,053

$

94,338

$

93,521

$

93,118

$

92,731

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

9.98

%

9.90

%

9.86

%

9.92

%

9.88

%

Common Equity Tier 1 at period end

Key shareholders’ equity (GAAP)

$

10,746

$

10,705

$

10,590

$

10,603

-

Less:

Preferred

Stock,

Series

A

(b)

281

281

281

281

-

Common Equity Tier 1 capital before adjustments and deductions

10,465

10,424

10,309

10,322

-

Less:

Goodwill, net of deferred taxes

1,036

1,036

1,034

1,036

-

Intangible

assets, net of deferred taxes

26

29

33

36

-

Deferred tax assets

1

1

1

1

-

Net unrealized gains (losses) on available-for-sale securities, net of       

deferred

taxes

(58)

54

-

52

-

Accumulated gains (losses) on cash flow hedges, net of deferred taxes

(20)

21

(20)

(8)

-

Amounts

in

accumulated

other

comprehensive

income

(loss)

attributed

to pension and postretirement benefit costs, net of deferred taxes

(365)

(385)

(361)

(364)

-

Total

Common

Equity

Tier

1

capital

(c)

$

9,845

$

9,668

$

9,622

$

9,569

-

Net

risk-weighted

assets

(regulatory)

(c)

$

89,889

$

92,307

$

89,851

$

89,967

-

Common

Equity

Tier

1

ratio

(non-GAAP)

(c)

10.95

%

10.47

%

10.71

%

10.64

%

-

Tier 1 common equity at period end

Key shareholders’ equity (GAAP)

-

-

$

10,530

Qualifying capital securities

-

-

339

Less:

Goodwill

-

-

-

-

1,057

Accumulated

other

comprehensive

income

(loss)

(d)

-

-

-

-

(395)

Other

assets

(e)

-

-

-

-

83

Total Tier 1 capital (regulatory)

-

-

-

-

10,124

Less:

Qualifying capital securities

-

-

-

-

339

Preferred Stock, Series A

(b)

-

-

-

-

282

Total Tier 1 common equity (non-GAAP) 

-

-

-

-

$

9,503

Net risk-weighted assets (regulatory)

-

-

-

-

$

85,100

Tier 1 common equity ratio (non-GAAP)

-

-

-

-

11.17

%

GAAP to Non-GAAP Reconciliation

$ in millions

24

a)

Three

months

ended

12/31/15,

9/30/15,

6/30/15,

3/31/15,

and

12/31/14,

exclude

$45

million,

$50

million,

$55

million,

$61

million,

and

$68

million,

respectively,

of

period-end purchased credit card receivables

b)

Net of capital surplus

c)

12-31-15 amount is estimated

d)

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  

e)

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.

Three months ended

12-31-15

9-30-15

6-30-15

3-31-15

12-31-14

Pre-provision net revenue

Net interest income (GAAP)

$

602

$

591

$

584

$

571

$

582

Plus:

Taxable-equivalent adjustment

8

7

7

6

6

Noninterest income (GAAP)

485

470

488

437

490

Less:

Noninterest expense (GAAP)

736

724

711

669

704

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

$

359

$

344

$

368

$

345

$

374

Average tangible common equity

Average Key shareholders’ equity (GAAP)

$

10,731

$

10,614

$

10,590

$

10,570

$

10,562

Less:

Intangible assets (average)

(a)

1,082

1,083

1,086

1,089

1,096

Preferred Stock, Series A (average)

290

290

290

290

291

Average tangible common equity (non-GAAP)

$

9,359

$

9,241

$

9,214

$

9,191

$

9,175

Return on average tangible common equity from continuing operations

Net income (loss) from continuing operations attributable to Key common

shareholders (GAAP)

$

224

$

216

$

230

$

222

$

246

Average tangible common equity (non-GAAP)

9,359

9,241

9,214

9,191

9,175

Return on average tangible common equity from continuing operations (non-GAAP)

9.50

%

9.27

%

10.01

%

9.80

%

10.64

%

Return on average tangible common equity consolidated

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

$

220

$

213

$

233

$

227

$

248

Average tangible common equity (non-GAAP)

9,359

9,241

9,214

9,191

9,175

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

9.33

%

9.14

%

10.14

%

10.02

%

10.72

%

Cash efficiency ratio

Noninterest expense (GAAP)

$

736

$

724

$

711

$

669

$

704

Less:

Intangible asset amortization (GAAP)

9

9

9

9

10

Adjusted noninterest expense (non-GAAP)

$

727

$

715

$

702

$

660

$

694

Net interest income (GAAP)

$

602

$

591

$

584

$

571

$

582

Plus:

Taxable-equivalent adjustment

8

7

7

6

6

Noninterest income (GAAP)

485

470

488

437

490

Total taxable-equivalent revenue (non-GAAP)

$

1,095

$

1,068

$

1,079

$

1,014

$

1,078

Cash efficiency ratio (non-GAAP)

66.4

%

66.9

%

65.1

%

65.1

%

64.4

%

GAAP to Non-GAAP Reconciliation

(continued)

$ in millions

(a)

Three months ended 12/31/15, 9/30/15, 6/30/15, 3/31/15, and 12/31/14, exclude $47 million, $52 million, $58 million, $64 million, and $69 million, respectively, 

of average purchased credit card receivables

25

KeyCorp & Subsidiaries

$ in billions

Quarter ended

December 31, 2015

Common Equity Tier 1 under current RCR

Adjustments from

current RCR to the fully phased-in RCR:

Deferred

tax assets and other intangible assets

(b)

Common

Equity

Tier

1

anticipated

under

the

fully

phased-in

RCR

(c)

Net risk-weighted assets under current RCR

Adjustments from

current RCR to the fully phased-in RCR:

Mortgage

servicing assets

(d)

All other assets

(e)

Total

risk-weighted

assets

anticipated

under

the

fully

phased-in

RCR

(c)

Common Equity Tier 1 under the fully phased-in RCR

Table may not foot due to rounding

26

Common Equity Tier 1 Under the Regulatory Capital Rules

(RCR) (estimated)

(a)

(a)

Common Equity Tier 1 capital is a non-generally accepted accounting principle (GAAP) financial measure that is used by investors, analysts and bank regulatory

agencies to assess the capital position of financial services companies. Management reviews Common Equity Tier 1 along with other measures of capital as part of its

financial analyses

(b)

Includes the deferred tax asset subject to future taxable income for realization, primarily tax credit carryforwards, as well as intangible assets (other than goodwill and

mortgage servicing assets) subject to the transition provisions of the final rule.

(c)

The anticipated amount of regulatory capital and risk-weighted assets is based upon the federal banking agencies’ Regulatory Capital Rules (as fully phased-in on

January 1, 2019); Key is subject to the Regulatory Capital Rules under the “standardized approach”

(d)

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

(e)

Under the fully implemented rule, certain deferred tax assets and intangible assets subject to the transition provision are no longer required to be risk-weighted because

they are deducted directly from capital.

-

9.8

9.8

89.9

.5

-

90.4

10.85

%

$

$

$

$

IMPORTANT ADDITIONAL INFORMATION AND WHERE

TO FIND IT

In

connection

with

the

proposed

merger,

KeyCorp

has

filed

with

the

SEC

a

Registration

Statement

on

Form

S-4

on

November

30,

2015

that

includes

the

preliminary

Joint

Proxy

Statement

of

KeyCorp

and

First

Niagara

and

a

preliminary

Prospectus

of

KeyCorp,

as

well

as

other

relevant

documents

concerning

the

proposed

transaction.

The

information

in

the

preliminary

Joint

Proxy

Statement/Prospectus

is

not

complete

and

may

be

changed.

The

definitive

Joint

Proxy

Statement/Prospectus

will

be

mailed

to

stockholders

of

KeyCorp

and

First

Niagara

after

the

Registration

Statement

is

declared

effective

by

the

SEC.

This

communication

does

not

constitute

an

offer

to

sell

or

the

solicitation

of

an

offer

to

buy

any

securities

or

a

solicitation

of

any

vote

or

approval.

INVESTORS

AND

SHAREHOLDERS

ARE

URGED

TO

READ

THE

REGISTRATION

STATEMENT

AND

THE

JOINT

PROXY

STATEMENT/PROSPECTUS

REGARDING

THE

MERGER

AND

ANY

OTHER

RELEVANT

DOCUMENTS

FILED

WITH

THE

SEC,

AS

WELL

AS

ANY

AMENDMENTS

OR

SUPPLEMENTS

TO

THOSE

DOCUMENTS,

BECAUSE

THEY

WILL

CONTAIN

IMPORTANT

INFORMATION.

A

free

copy

of

the

Joint

Proxy

Statement/Prospectus,

as

well

as

other

filings

containing

information

about

KeyCorp

and

First

Niagara,

may

be

obtained

at

the

SEC’s

Internet

site

(http://www.sec.gov).

You

will

also

be

able

to

obtain

these

documents,

free

of

charge,

from

KeyCorp

at

investor.key.com

or

from

First

Niagara

by

accessing

First

Niagara’s

website

at

www.firstniagara.com.

Copies

of

the

Joint

Proxy

Statement/Prospectus

can

also

be

obtained,

free

of

charge,

by

directing

a

request

to

KeyCorp

Investor

Relations

at

Investor

Relations,

KeyCorp,

127

Public

Square,

Mailcode

OH-01-27-0737,

Cleveland,

Ohio

44114-1306,

by

calling

(216)

689-3000,

or

by

sending

an

e-mail

to

investor_relations@keybank.com

or

to

First

Niagara

Investor

Relations

at

726

Exchange

Street,

Suite

618,

Buffalo,

New

York

14210,

by

calling

(716)

819-5669

or

by

sending

an

e-mail

to

investor@fnfg.com.

In

addition,

KeyCorp

and

First

Niagara

use

their

respective

Investor

Relations

websites

and

social

media

outlets

as

channels

of

distribution

of

material

company

information.

Such

information

is

accessible

on

KeyCorp’s

and

First

Niagara’s

Investor

Relations

websites,

as

well

as

on

their

respective

Facebook

pages

and

through

their

Twitter

accounts

and

LinkedIn

accounts.

KeyCorp

and

First

Niagara

and

certain

of

their

respective

directors

and

executive

officers

may

be

deemed

to

be

participants

in

the

solicitation

of

proxies

from

the

respective

shareholders

of

KeyCorp

and

First

Niagara

in

respect

of

the

transaction

described

in

the

Joint

Proxy

Statement/Prospectus.

Information

regarding

KeyCorp’s

directors

and

executive

officers

is

contained

in

KeyCorp’s

Proxy

Statement

on

Schedule

14A,

dated

April

7,

2015,

which

is

filed

with

the

SEC.

Information

regarding

First

Niagara’s

directors

and

executive

officers

is

contained

in

First

Niagara’s

Proxy

Statement

on

Schedule

14A,

dated

March

23,

2015,

which

is

filed

with

the

SEC.

Additional

information

regarding

the

interests

of

those

participants

and

other

persons

who

may

be

deemed

participants

in

the

transaction

may

be

obtained

by

reading

the

Joint

Proxy

Statement/Prospectus

regarding

the

proposed

merger.

Free

copies

of

this

document

may

be

obtained

as

described

in

the

preceding

paragraph.

27

EX-99.3

Exhibit 99.3

Consolidated Balance Sheets

(dollars in millions)

	12-31-15			9-30-15			12-31-14
Assets
Loans	$	59,876		$	60,085		$	57,381
Loans held for sale		639			916			734
Securities available for sale		14,218			14,376			13,360
Held-to-maturity securities		4,897			4,936			5,015
Trading account assets		788			811			750
Short-term investments		2,707			1,964			4,269
Other investments		655			691			760
Total earning assets		83,780			83,779			82,269
Allowance for loan and lease losses		(796	)		(790	)		(794	)
Cash and due from banks		607			470			653
Premises and equipment		779			771			841
Operating lease assets		340			315			330
Goodwill		1,060			1,060			1,057
Other intangible assets		65			74			101
Corporate-owned life insurance		3,541			3,516			3,479
Derivative assets		619			793			609
Accrued income and other assets		3,292			3,348			2,952
Discontinued assets		1,846			2,086			2,324
Total assets	$	95,133		$	95,422		$	93,821
Liabilities
Deposits in domestic offices:
NOW and money market deposit accounts	$	37,089		$	37,301		$	34,536
Savings deposits		2,341			2,338			2,371
Certificates of deposit ($100,000 or more)		2,392			2,001			2,040
Other time deposits		3,127			3,020			3,259
Total interest-bearing deposits		44,949			44,660			42,206
Noninterest-bearing deposits		26,097			25,985			29,228
Deposits in foreign office — interest-bearing		—			428			564
Total deposits		71,046			71,073			71,998
Federal funds purchased and securities sold under repurchase agreements		372			407			575
Bank notes and other short-term borrowings		533			677			423
Derivative liabilities		632			676			784
Accrued expense and other liabilities		1,605			1,562			1,621
Long-term debt		10,186			10,310			7,875
Discontinued liabilities		—			—			3
Total liabilities		84,374			84,705			83,279
Equity
Preferred stock, Series A		290			290			291
Common shares		1,017			1,017			1,017
Capital surplus		3,922			3,914			3,986
Retained earnings		8,922			8,764			8,273
Treasury stock, at cost		(3,000	)		(3,008	)		(2,681	)
Accumulated other comprehensive income (loss)		(405	)		(272	)		(356	)
Key shareholders’ equity		10,746			10,705			10,530
Noncontrolling interests		13			12			12
Total equity		10,759			10,717			10,542
Total liabilities and equity	$	95,133		$	95,422		$	93,821
Common shares outstanding (000)		835,751			835,285			859,403

Consolidated Statements of Income

(dollars in millions, except per share amounts)

	Three months ended								Twelve months ended
	12-31-15			9-30-15			12-31-14		12-31-15		12-31-14
Interest income
Loans	$	552		$	542		$	534	$	2,149	$	2,110
Loans held for sale		8			10			8		37		21
Securities available for sale		76			75			67		293		277
Held-to-maturity securities		24			24			23		96		93
Trading account assets		6			5			6		21		25
Short-term investments		3			1			2		8		6
Other investments		4			4			6		18		22
Total interest income		673			661			646		2,622		2,554
Interest expense
Deposits		26			27			26		105		117
Federal funds purchased and securities sold under repurchase agreements		—			—			—		—		2
Bank notes and other short-term borrowings		3			2			3		9		9
Long-term debt		42			41			35		160		133
Total interest expense		71			70			64		274		261
Net interest income		602			591			582		2,348		2,293
Provision for credit losses		45			45			22		166		57
Net interest income after provision for credit losses		557			546			560		2,182		2,236
Noninterest income
Trust and investment services income		105			108			112		433		403
Investment banking and debt placement fees		127			109			126		445		397
Service charges on deposit accounts		64			68			64		256		261
Operating lease income and other leasing gains		15			15			15		73		96
Corporate services income		55			57			53		198		178
Cards and payments income		47			47			43		183		166
Corporate-owned life insurance income		36			30			38		127		118
Consumer mortgage income		2			3			3		12		10
Mortgage servicing fees		15			11			11		48		46
Net gains (losses) from principal investing		—			11			18		51		78
Other income (a), (b)		19			11			7		54		44
Total noninterest income		485			470			490		1,880		1,797
Noninterest expense
Personnel		429			426			409		1,652		1,591
Net occupancy		64			60			63		255		261
Computer processing		43			41			40		164		158
Business services and professional fees		44			40			38		159		156
Equipment		22			22			23		88		96
Operating lease expense		13			11			11		47		42
Marketing		17			17			16		57		49
FDIC assessment		8			8			9		32		30
Intangible asset amortization		9			9			10		36		39
OREO expense, net		1			2			2		6		5
Other expense		86			88			83		344		334
Total noninterest expense		736			724			704		2,840		2,761
Income (loss) from continuing operations before income taxes		306			292			346		1,222		1,272
Income taxes		73			72			94		303		326
Income (loss) from continuing operations		233			220			252		919		946
Income (loss) from discontinued operations, net of taxes		(4	)		(3	)		2		1		(39	)
Net income (loss)		229			217			254		920		907
Less: Net income (loss) attributable to noncontrolling interests		3			(2	)		1		4		7
Net income (loss) attributable to Key	$	226		$	219		$	253	$	916	$	900
Income (loss) from continuing operations attributable to Key common shareholders	$	224		$	216		$	246	$	892	$	917
Net income (loss) attributable to Key common shareholders		220			213			248		893		878
Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	.27		$	.26		$	.29	$	1.06	$	1.05
Income (loss) from discontinued operations, net of taxes		(.01	)		—			—		—		(.04	)
Net income (loss) attributable to Key common shareholders (c)		.27			.26			.29		1.06		1.01
Per common share — assuming dilution
Income (loss) from continuing operations attributable to Key common shareholders	$	.27		$	.26		$	.28	$	1.05	$	1.04
Income (loss) from discontinued operations, net of taxes		(.01	)		—			—		—		(.04	)
Net income (loss) attributable to Key common shareholders (c)		.26			.25			.28		1.05		.99
Cash dividends declared per common share	$	.075		$	.075		$	.065	$	.290	$	.25
Weighted-average common shares outstanding (000)		828,206			831,430			858,811		836,846		871,464
Weighted-average common shares and potential common shares outstanding (000) (d)		835,939			838,880			886,186		844,489		878,199

(a) For the three months ended December 31, 2015, net securities gains (losses) totaled $1 million. For the three months ended September 30, 2015, and December 31, 2014, net securities gains (losses) totaled less than $1 million. For the three months ended December 31, 2015, September 30, 2015, and December 31, 2014, Key did not have any impairment losses related to securities.

(b) For the twelve months ended December 31, 2015, and December 31, 2014, net securities gains (losses) totaled less than $1 million. For the twelve months ended December 31, 2015, and December 31, 2014, Key did not have any impairment losses related to securities.

(c) Earnings per share may not foot due to rounding.

(d) Assumes conversion of common share options and other stock awards and/or convertible preferred stock, as applicable.