8/14/2019 Key Corp 3Q07 Presentation
1/26
8/14/2019 Key Corp 3Q07 Presentation
2/26
2
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995FORWARD-LOOKING STATEMENT DISCLOSURE
This presentation contains forward-looking statements, including statements about our financialcondition, results of operations, earnings outlook, asset quality trends and profitability. Forward-looking statements express management's current expectations or forecasts of future events and,by their nature, are subject to assumptions, risks and uncertainties. Although management
believes that the expectations and forecasts reflected in these forward-looking statements arereasonable, actual results could differ materially due to a variety of factors including: (1) changesin interest rates; (2) changes in trade, monetary or fiscal policy; (3) changes in general economicconditions, or in the condition of the local economies or industries in which we have significantoperations or assets, which could, among other things, materially impact credit quality trends and
our ability to generate loans; (4) increased competitive pressure among financial servicescompanies; (5) the inability to successfully execute strategic initiatives designed to grow revenuesand/or manage expenses; (6) consummation of significant business combinations or divestitures;(7) operational or risk management failures due to technological or other factors; (8) heightenedregulatory practices, requirements or expectations; (9) new legal obligations or liabilities or
unfavorable resolution of litigation; (10) adverse capital markets conditions; (11) continueddisruption in the fixed income markets; (12) disruption in the economy and general businessclimate as a result of terrorist activities or military actions; and (13) changes in accounting or taxpractices or requirements. Forward-looking statements are not guarantees of future performanceand should not be relied upon as representing management's views as of any subsequent date.We do not assume any obligation to update these forward-looking statements. For further
information regarding KeyCorp, please read KeyCorp's reports that are filed with the Securitiesand Exchange Commission and are available at www.sec.gov.
8/14/2019 Key Corp 3Q07 Presentation
3/26
3
Strategic Update
Fixed income market volatility adversely
impacts results
Continued focus on credit quality
On track to complete UBH (Union State Bank)acquisition
Completed acquisition of Tuition ManagementSystems
8/14/2019 Key Corp 3Q07 Presentation
4/26
8/14/2019 Key Corp 3Q07 Presentation
5/26
5
Net Interest Margin (TE)Continuing Ops.
$700$716
$692
$722 $726 $726$744
$712$706
2.96%
2.70%
2.62%
3.68%
3.50%3.46%
3.40%
3.09%3.06% 3.05%
2.85% 2.85%
2.52%
3.66%3.61%
3.72%3.68%
3.63%
$200
$300
$400
$500
$600
$700
$800
3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07
2.25%
2.50%
2.75%
3.00%
3.25%
3.50%
3.75%
4.00%
4.25%
Net Interest Income Net Interest Spread Net Interest Margin
TE = Taxable Equivalent
$ in millions
8/14/2019 Key Corp 3Q07 Presentation
6/26
6
Change 3Q07 vs.3Q07 2Q07 3Q06 2Q07 3Q06
Trust and investment services income $119 $115 $137 $4 $(18)Service charges on deposit accounts 88 84 78 4 10
Investment banking and capital markets income 9 52 44 (43) (35)
Operating lease income 70 66 58 4 12
Letter of credit and loan fees 51 45 48 6 3
Corporate-owned life insurance income 27 32 23 (5) 4
Electronic banking fees 25 25 27 - (2)
Net gains (losses) from loan securitizations and sales (53) 33 14 (86) (67)
Net securities gains (losses) 4 2 (7) 2 11
Gains related to MasterCard Incorporated shares 27 40 - (13) 27Net gains from principal investing 9 90 28 (81) (19)
Other income 62 65 93 (3) (31)
Total noninterest income $438 $649 $543 $(211) $(105)
Noninterest IncomeContinuing Ops.
$ in millions
8/14/2019 Key Corp 3Q07 Presentation
7/26
7
Change 3Q07 vs.
3Q07 2Q07 3Q06 2Q07 3Q06
Personnel $383 $411 $418 $(28) $(35)
Net occupancy 60 59 62 1 (2)
Computer processing 49 49 52 - (3)
Operating lease expense 58 55 48 3 10
Professional fees 27 26 28 1 (1)
Equipment 22 24 26 (2) (4)
Marketing 21 20 32 1 (11)
Litigation reserve - 42 - (42) -
Provision for losses on lending-relatedcommitments 5 6 - (1) 5
Other expense 128 123 124 5 4
Total noninterest expense $753 $815 $790 $(62) $(37)
Noninterest ExpenseContinuing Ops.
$ in millions
8/14/2019 Key Corp 3Q07 Presentation
8/26
8
64.2 64.963.467.766.3
62.065.2 65.6 65.7
$0
$15
$30
$45
$60
$75
3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07
-10%
-5%
0%
5%
10%
15%
Average Loan Growth from Prior Year
$ in billions
CommercialConsumer
$44.317.7
$45.817.6
$46.717.5
$47.317.6
$47.617.6
Average LoansContinuing Ops.
$48.017.6
$48.317.4
$48.817.5
$49.718.0
8/14/2019 Key Corp 3Q07 Presentation
9/26
9
$ in billions
$49.4$47.9
$51.7$50.6$50.3$52.1$51.7$51.6$50.3
$0
$10
$20
$30
$40
$50
$60
3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07
-4%
0%
4%
8%
12%
16%
Average Core Deposit Growth from Prior YearAverage Core Deposit Growth Adjusted for McDonald Divestiture
Average Core DepositsContinuing Ops.
DDA
NOW/MMDASavingsCDs
$12.2
22.92.0
10.8
$12.6
23.91.9
11.0
$12.7
24.51.8
11.3
$13.0
25.31.8
11.5
$13.1
25.21.7
11.7
$13.4
25.11.7
11.9
$13.2
23.41.6
12.1
$14.0
23.01.6
12.0
$14.4
24.21.6
11.5
8/14/2019 Key Corp 3Q07 Presentation
10/26
10
Net C/O $ 59 $ 53 $ 43 $ 6 $ 16to Average Loans fromContinuing Operations 0.35 % 0.32 % 0.26 %
Nonperforming Loans $ 498 $ 276 $ 223 $ 222 $ 275
to EOP Loans 0.72 % 0.41 % 0.34 %
Nonperforming Assets $ 570 $ 378 $ 329 $ 192 $ 241to EOP Loans + OREO 0.83 % 0.57 % 0.50 %
Allowance $ 955 $ 945 $ 944 $ 10 $ 11to Total Loans 1.38 % 1.42 % 1.44 %to Non performing Loans 192 % 342 % 423 %
Change 3Q07 vs.3Q062Q073Q07 2Q07 3Q06
Asset Quality
$ in millions
8/14/2019 Key Corp 3Q07 Presentation
11/26
11
Capital Ratios
Tangible Equity to Tangible AssetsTier 1 Risk-based Capital
Peer MedianTangible Equity to Tangible AssetsPeer MedianTier 1 Risk-based Capital
6.68% 6.71% 6.68%6.81%
7.01% 6.97% 6.89%6.78%
6.68%
7.72%7.59% 7.64%
7.90%8.02%
8.15% 8.14%8.24%
7.92%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07
8/14/2019 Key Corp 3Q07 Presentation
12/26
12
Fourth Quarter 2007 Outlook
Low- to mid-single-digit rangeCore Deposit Growth
35 45 basis point range
Approximately 32%
$0.68 $0.74 per share
Net Charge-Offs
Effective Tax Rate
4th Quarter Earnings Outlook
Commercial: Mid- to upper-single-digit rangeConsumer: Low- to mid-single-digit rangeLoan Growth
Low to mid 3.30% rangeNet Interest Margin
8/14/2019 Key Corp 3Q07 Presentation
13/26
13
Appendix
8/14/2019 Key Corp 3Q07 Presentation
14/26
14
Community Banking
Great Lakes
Core Deposits: 36%Comml Loans: 39%
Northwest
Core Deposits: 24%Comml Loans: 25%
Rocky Mountains
Core Deposits: 9%Comml Loans: 12%
Northeast
Core Deposits: 31%Comml Loans: 24%
15
8/14/2019 Key Corp 3Q07 Presentation
15/26
15
Average Balance % Increase (Decrease) vs.3Q07 2Q07 3Q06 2Q07 3Q06
Commercial, financial and agricultural 22,393$ 21,856$ 21,648$ 2.5 % 3.4 %
Real estate commercial mortgage 8,855 8,565 8,106 3.4 9.2
Real estate construction 8,285 8,243 7,965 .5 4.0
Commercial lease financing 10,172 10,096 9,850 .8 3.3
Total Commercial Loans 49,705 48,760 47,569 1.9 4.5
Real Estate residential 1,586 1,472 1,415 7.7 12.1
Home equity 10,883 10,752 11,017 1.2 (1.2)
Consumer direct 1,342 1,370 1,585 (2.0) (15.3)
Consumer indirect 4,164 3,961 3,594 5.1 15.9
Total Consumer Loans 17,975 17,555 17,611 2.4 2.1Total Loans 67,680$ 66,315$ 65,180$ 2.1 % 3.8 %
Average Loan Breakdown
$ in millionsContinuing Operations
16
8/14/2019 Key Corp 3Q07 Presentation
16/26
16
Commercial Portfolio*Credit Size
12.6%
28.4%
15.3%11.0%
27.4%
46.3%
23.2%
35.8%
98.5%
0.2%0.3%1.0%
0%
20%
40%
60%
80%
100%
$25
($ in millions)
Outstanding Commitments # of Obligations
as of 9/30/07
*Excludes commercial lease financing balances
17
8/14/2019 Key Corp 3Q07 Presentation
17/26
17
Net Charge-Offs to Average Loans
(1) Excludes Passenger Airline Lease Portfolio
0.27%
1.02%
0.32%
0.24% 0.22%0.26%
0.33% 0.35%0.32%
0.22%0.26%
0.00%
0.30%
0.60%
0.90%
1.20%
3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07
Peer Median S&P Regional & Diversified Bank Indices
(1)(1)
Continuing Operations
18
8/14/2019 Key Corp 3Q07 Presentation
18/26
18
Net Charge-Offs to Average Loans
Consumer(1)Commercial
0.46%
0.15%0.23%
0.12%
0.28%0.20%
0.29%
0.51%0.43%
0.36%0.45% 0.47%
0.30%
0.41%
1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q071Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07
(1)Excludes Champion Mortgage
by Loan Type
19
8/14/2019 Key Corp 3Q07 Presentation
19/26
19
$ in millions
$307
$393
$570
$378$353
$273
$329$308$320
0.44%0.46%
0.50%0.54%
0.83%
0.41%
0.54%
0.57%
0.50%0.46%
0.48%0.46%
0.60%
0.43% 0.44%
0.49%
0.62%
$0
$100
$200
$300
$400
$500
$600
3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07
0.20%
0.40%
0.60%
0.80%
1.00%
CommercialConsumerOREO + Other
Nonperforming Assets
$23712333
$14213530
$13815725
$14413529
Peer Median S&P Regional & Diversified Bank Indices
$13588
106
$1189758
$1559999
$18195
102
$39310572
NPAs to Loans + OREO
20
8/14/2019 Key Corp 3Q07 Presentation
20/26
20
Allowance to Period-End Loans
1.44%1.45%
1.67%
1.44% 1.42% 1.44% 1.43% 1.38%1.42%
0.50%
1.00%
1.50%
2.00%
3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07
Peer Median S&P Regional & Diversified Bank Indices
21
8/14/2019 Key Corp 3Q07 Presentation
21/26
21
Allowance to NPLs
372%349%
304%
327%343%
423%439%
192%
342%
0%
100%
200%
300%
400%
500%
3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07
Peer Median S&P Regional & Diversified Bank Indices
22
8/14/2019 Key Corp 3Q07 Presentation
22/26
22
% ofWest Southwest Central Midwest Southeast Northeast Total Total
Nonowner-occupied:
Residential properties 1,445$ 309$ 477$ 185$ 1,093$ 234$ 3,743$ 21.4 %Multi-family properties 449 243 471 263 293 330 2,049 11.7
Retail properties 255 175 338 389 652 167 1,976 11.3Land and development 202 207 227 113 247 60 1,056 6.1Office buildings 309 91 138 194 244 165 1,141 6.5Warehouses 176 12 80 81 161 79 589 3.4Health facilities 123 14 56 125 146 142 606 3.5Manufacturing facilities 18 22 23 57 4 124 .7
Hotels/Motels 52
50 15 39 1 157 .9Other 199 2 92 211 22 179 705 4.0
3,228 1,075 1,929 1,599 2,954 1,361 12,146 69.5
Owner-occupied 1,494 109 483 2,006 204 1,044 5,340 30.5
Total 4,722$ 1,184$ 2,412$ 3,605$ 3,158$ 2,405$ 17,486$ 100.0 %
Nonowner-occupied:
Nonperforming loans $81 $7 $25 $106 $9 $228 N/M90+ days past due 32 4 36 N/M30 89 days past due 33 $16 1 14 20 29 113 N/M
Geographic Region
Commercial Real Estate Loans
September 30, 2007$ in millions
N/M = Not Meaningful
23
8/14/2019 Key Corp 3Q07 Presentation
23/26
23
Commercial Real Estate
Residential Properties: $3.7 Billion
$1.4 B
$0.3 B$0.5 B
$0.2 B
$1.1 B
$0.2 B
$0.9 B
$0.7 B
Nonperforming & Past Due Loans
$ in millions West SW Central MW SE NE Total
Nonperforming loans $80 $18 $97 $4 $19990+ days past due 32 3230 89 days past due 3 $16 1 12 3 14 49
24
8/14/2019 Key Corp 3Q07 Presentation
24/26
24
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
$160.0
2000 2001 2002 2003 2004 2005 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
$5.0
Servicing Portfolio Average Escrow Deposits
Commercial Real Estate Servicing
$ in billions
AverageEscro
w
Deposits
Servicing Portfolio
25
8/14/2019 Key Corp 3Q07 Presentation
25/26
25
Loan
Balances
Average
FICO
Average
LTV
% of
Loans
LTV>90%
Regional Banking
Home Equity Loans and LinesFirst Lien $5,597 744 66 % 0.49 %Second Lien 4,077 739 75 3.64
Total Home Equity Loans and Lines $9,674 742 70 1.84
Nonaccrual LoansTotal First Lien $ 28 689 76 % 0.54 %
Total Second Lien 24 684 80 7.13Total Home Equity Nonaccrual loans $ 52 687 78 3.61
Key Home Equity Services - Home Imp Div (Secured)
Home Equity Loans and LinesFirst Lien $ 43 749 26 % 0.55 %Second Lien 1,187 729 80 32.28
Total Home Equity Loans and Lines $1,230 730 78 31.16
Nonaccrual LoansTotal First Lien 704 28 % N/M
Total Second Lien $ 9 671 88 47.70 %Total Home Equity Nonaccrual loans $ 9 672 86 46.33
Home Equity Loans
Period End BalanceSeptember 30, 2007N/M = Not Meaningful
$ in millions
8/14/2019 Key Corp 3Q07 Presentation
26/26