KEYCORP REPORTS SECOND QUARTER 2022 NET INCOME OF $504 MILLION,

OR $.54 PER DILUTED COMMON SHARE

Positive operating leverage compared to the prior quarter and year-ago period

Revenue up 6% from the prior quarter, driven by growth in net interest income

Strong loan growth across commercial and consumer businesses

Credit quality remains strong with net charge-offs to average loans of 16 basis points

Expanded Laurel Road's offering for healthcare professionals and completed acquisition of GradFin

CLEVELAND, July 21, 2022 - KeyCorp (NYSE: KEY) today announced net income from continuing operations attributable to Key common shareholders of $504 million, or $.54 per diluted common share for the second quarter of 2022. This compared to $420 million, or $.45 per diluted common share, for the first quarter of 2022 and $698 million, or $.72 per diluted common share, for the second quarter of 2021.

"Key's second quarter results demonstrate the strength and resiliency of both our business model and our team, while navigating dynamic market conditions. We remain well positioned to support our clients through the economic cycle.

This quarter, we continued to gain market share and deepen client relationships in both our commercial and consumer businesses, resulting in strong loan growth across our franchise. Additionally, we expanded Laurel Road's targeted offering to nurses and completed the acquisition of GradFin, a leading loan counselor for healthcare professionals.

The quality of our balance sheet continues to be a strength, as we focus on delivering sound, profitable growth. Credit quality remains strong, supported by our strong risk culture and disciplined underwriting practices.

We delivered positive operating leverage. Further, we remain confident in our ability to make continued progress against our long-term financial targets and to deliver value for all of our stakeholders."

- Chris Gorman, Chairman and CEO

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 2

Selected Financial Highlights

Dollars in millions, except per share data Change 2Q22 vs.
2Q22 1Q22 2Q21 1Q22 2Q21

Income (loss) from continuing operations attributable to Key common shareholders

$ 504 $ 420 $ 698 20.0 % (27.8 )%

Income (loss) from continuing operations attributable to Key common shareholders per common share - assuming dilution

.54 .45 .72 20.0 (25.0 )

Return on average tangible common equity from continuing operations (a)

20.90 % 14.12 % 21.34 % N /A N /A

Return on average total assets from continuing operations

1.16 .99 1.63 N /A N /A

Common Equity Tier 1 ratio (b)

9.2 9.4 9.9 N /A N /A

Book value at period end

$ 13.48 $ 14.43 $ 16.75 (6.6 ) (19.5 )

Net interest margin (TE) from continuing operations

2.61 % 2.46 % 2.52 % 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 "Return on average tangible common equity from continuing operations." The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.

(b)

June 30, 2022 ratio is estimated.

TE = Taxable Equivalent, N/A = Not Applicable

INCOME STATEMENT HIGHLIGHTS

Revenue

Dollars in millions Change 2Q22 vs.
2Q22 1Q22 2Q21 1Q22 2Q21

Net interest income (TE)

$ 1,104 $ 1,020 $ 1,023 8.2 % 7.9 %

Noninterest income

688 676 750 1.8 (8.3)

Total revenue

$ 1,792 $ 1,696 $ 1,773 5.7 % 1.1 %

TE = Taxable Equivalent

Taxable-equivalent net interest income was $1.1 billion for the second quarter of 2022 and the net interest margin was 2.61%. Compared to the second quarter of 2021, net interest income increased $81 million and the net interest margin increased by nine basis points. Net interest income and the net interest margin benefited from higher earning asset balances, a favorable balance sheet mix, and higher interest rates. Net interest income and the net interest margin were negatively impacted by the exit of the indirect auto loan portfolio and lower loan fees from the Paycheck Protection Program ("PPP").

Compared to the first quarter of 2022, taxable-equivalent net interest income increased by $84 million and the net interest margin increased by 15 basis points. Net interest income and the net interest margin benefited from a favorable balance sheet mix and higher interest rates, partly offset by lower loan fees related to the PPP and higher interest-bearing deposit costs. Net interest income also benefited from one additional day in the quarter.

Noninterest Income

Dollars in millions Change 2Q22 vs.
2Q22 1Q22 2Q21 1Q22 2Q21
Trust and investment services income $ 137 $ 136 $ 133 .7 % 3.0 %
Investment banking and debt placement fees 149 163 217 (8.6) (31.3)
Service charges on deposit accounts 96 91 83 5.5 15.7
Operating lease income and other leasing gains 28 32 36 (12.5) (22.2)
Corporate services income 88 90 55 (2.2) 60.0
Cards and payments income 85 80 113 6.3 (24.8)
Corporate-owned life insurance income 35 31 30 12.9 16.7
Consumer mortgage income 14 21 26 (33.3) (46.2)
Commercial mortgage servicing fees 45 36 44 25.0 2.3

Other income

11 (4 ) 13 375.0 (15.4)

Total noninterest income

$ 688 $ 676 $ 750 1.8 % (8.3) %

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 3

Compared to the second quarter of 2021, noninterest income decreased by $62 million. The decrease was largely due to investment banking and debt placement fees, down $68 million, reflecting a slowdown in capital markets activity. Other drivers for the decrease include cards and payments income and consumer mortgage income, down $28 million and $12 million, respectively. Cards and payments income decreased as a result of lower levels of prepaid card activity. Consumer mortgage income decreased reflecting higher balance sheet retention as well as lower gain on sale margins. Partially offsetting the decrease was a $33 million increase in corporate services income, due to higher derivatives trading income.

Compared to the first quarter of 2022, noninterest income increased by $12 million. The primary drivers were other income, which increased $15 million, reflecting market-related adjustments in the prior quarter and commercial mortgage servicing, up $9 million, as a result of higher special servicing fees. Partially offsetting the increase was a $14 million decrease in investment banking and debt placement fees, related to a slowdown in capital markets activity.

Noninterest Expense

Dollars in millions Change 2Q22 vs.
2Q22 1Q22 2Q21 1Q22 2Q21

Personnel expense

$ 607 $ 630 $ 623 (3.7 )% (2.6 )%

Nonpersonnel expense

471 440 453 7.0 4.0

Total noninterest expense

$ 1,078 $ 1,070 1,076 .7 % .2 %

Key's noninterest expense was $1.1 billion for the second quarter of 2022, an increase of $2 million from the year-ago period. Nonpersonnel expense increased $18 million, including an increase in other expense, due to higher travel and entertainment, as well as an increase in computer processing expense. Personnel expense decreased $16 million, driven by lower incentive and stock-based compensation, reflecting lower production related incentives, partially offset by an increase in salaries and contract labor, as a result of higher merit increases and technology contract labor.

Compared to the first quarter of 2022, noninterest expense increased $8 million. The increase was driven by nonpersonnel expense, which increased $31 million, largely due to higher other expense, reflecting increased travel and entertainment. Other contributing factors for the linked quarter increase include higher marketing expense and net occupancy expense. Partially offsetting the linked quarter increase was a $23 million decrease in personnel expense. The decrease was related to lower incentive and stock-based compensation as a result of lower production-related incentives and lower employee benefits expense.

BALANCE SHEET HIGHLIGHTS

Average Loans

Dollars in millions Change 2Q22 vs.
2Q22 1Q22 2Q21 1Q22 2Q21

Commercial and industrial (a)

$ 53,858 $ 51,574 $ 51,808 4.4 % 4.0 %

Other commercial loans

21,173 20,556 19,034 3.0 11.2

Total consumer loans

34,107 31,632 29,972 7.8 13.8

Total loans

$ 109,138 $ 103,762 $ 100,814 5.2 % 8.3 %
(a)

Commercial and industrial average loan balances include $153 million, $141 million, and $132 million of assets from commercial credit cards at June 30, 2022, March 31, 2022, and June 30, 2021, respectively.

Average loans were $109.1 billion for the second quarter of 2022, an increase of $8.3 billion compared to the second quarter of 2021. Commercial loans increased by $4.2 billion, reflecting strength in commercial mortgage real estate loans and core commercial and industrial loans, which mitigated the impact of a $6.8 billion decline in PPP balances. Consumer loans increased $4.1 billion, due to strength from Key's consumer mortgage business and Laurel Road, partly offset by the sale of the indirect auto loan portfolio.

Compared to the first quarter of 2022, average loans increased by $5.4 billion. Commercial loans increased $2.9 billion, reflecting strength in commercial and industrial loans and commercial mortgage real estate loans. Consumer loans increased $2.5 billion, driven by continued strength in Key's consumer mortgage business and Laurel Road.

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 4

Average Deposits

Dollars in millions Change 2Q22 vs.
2Q22 1Q22 2Q21 1Q22 2Q21

Non-time deposits

$144,012 $146,426 $139,480 (1.6 )% 3.2 %

Certificates of deposit ($100,000 or more)

1,487 1,639 2,212 (9.3 ) (32.8 )

Other time deposits

1,972 2,098 2,630 (6.0 ) (25.0 )

Total deposits

$147,471 $150,163 $144,322 (1.8 )% 2.2 %

Cost of total deposits

.06 % .04 % .05 % N /A N /A

N/A = Not Applicable

Average deposits totaled $147.5 billion for the second quarter of 2022, an increase of $3.1 billion compared to the year-ago quarter. The increase reflects growth from consumer and commercial relationships, including higher commercial escrow and retail deposits, partially offset by a decline in time deposits.

Compared to the first quarter of 2022, average deposits decreased by $2.7 billion, largely reflecting seasonal commercial outflows and public sector deposit outflows related to stimulus funds.

ASSET QUALITY

Dollars in millions Change 2Q22 vs.
2Q22 1Q22 2Q21 1Q22 2Q21

Net loan charge-offs

$ 44 $ 33 $ 22 33.3 % 100.0 %

Net loan charge-offs to average total loans

.16 % .13 % .09 % N /A N /A

Nonperforming loans at period end

$ 429 $ 439 $ 694 (2.3 ) (38.2 )

Nonperforming assets at period end

463 467 738 (0.9 ) (37.3 )

Allowance for loan and lease losses

1,099 1,105 1,220 (0.5 ) (9.9 )

Allowance for credit losses

1,272 1,271 1,372 0.1 (7.3 )

Provision for credit losses

45 83 (222 ) (45.8 ) 120.3

Allowance for loan and lease losses to nonperforming loans

256.2 % 251.7 % 175.8 % N /A N /A

Allowance for credit losses to nonperforming loans

296.5 289.5 197.7 N /A N /A

N/A = Not Applicable

Key's provision for credit losses was $45 million, compared to a net benefit of $222 million in the second quarter of 2021 and provision of $83 million in the first quarter of 2022.

Net loan charge-offs for the second quarter of 2022 totaled $44 million, or .16% of average total loans. These results compare to $22 million, or .09%, for the second quarter of 2021 and $33 million, or .13%, for the first quarter of 2022. Key's allowance for credit losses was $1.3 billion, or 1.13% of total period-end loans at June 30, 2022, compared to 1.36% at June 30, 2021, and 1.19% at March 31, 2022.

At June 30, 2022, Key's nonperforming loans totaled $429 million, which represented .38% of period-end portfolio loans. These results compare to .69% at June 30, 2021, and .41% at March 31, 2022. Nonperforming assets at June 30, 2022, totaled $463 million, and represented .41% of period-end portfolio loans and OREO and other nonperforming assets. These results compare to .73% at June 30, 2021, and .44% at March 31, 2022.

CAPITAL

Key's estimated risk-based capital ratios included in the following table continued to exceed all "well-capitalized" regulatory benchmarks at June 30, 2022.

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 5

Capital Ratios

6/30/2022 3/31/2022 6/30/2021

Common Equity Tier 1 (a)

9.2 % 9.4 % 9.9 %

Tier 1 risk-based capital (a)

10.4 10.7 11.3

Total risk based capital (a)

12.0 12.4 13.2

Tangible common equity to tangible assets (b)

5.3 6.0 7.4

Leverage (a)

8.8 8.6 8.7
(a)

June 30, 2022 ratio is estimated and reflects Key's election to adopt the CECL optional transition provision.

(b)

The table entitled "GAAP to Non-GAAP Reconciliations" in the attached financial supplement presents the computations of certain financial measures related to "tangible common equity." The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.

Key's capital position remained strong in the second quarter of 2022. As shown in the preceding table, at June 30, 2022, Key's estimated Common Equity Tier 1 and Tier 1 risk-based capital ratios stood at 9.2% and 10.4%, respectively. Key's tangible common equity ratio was 5.3% at June 30, 2022.

Key elected the CECL phase-in option provided by regulatory guidance which delayed for two years the estimated impact of CECL on regulatory capital and phases it in over three years beginning in 2022. Effective for the first quarter 2022, Key is now in the three-year transition period. On a fully phased-in basis, Key's Common Equity Tier 1 ratio would be reduced by 12 basis points.

Summary of Changes in Common Shares Outstanding

In thousands Change 2Q22 vs.
2Q22 1Q22 2Q21 1Q22 2Q21

Shares outstanding at beginning of period

932,398 928,850 972,587 .4 % (4.1 )%

Open market repurchases, repurchases under the accelerated repurchase program, and return of shares under employee compensation plans

(24 ) (1,707 ) (13,304 ) (98.6 ) (99.8 )

Shares issued under employee compensation plans (net of cancellations)

269 5,255 993 (94.9 ) (72.9 )

Shares outstanding at end of period

932,643 932,398 960,276 - % (2.9 )%

During the second quarter of 2022, Key declared a dividend of $.195 per common share.

LINE OF BUSINESS RESULTS

The following table shows the contribution made by each major business segment to Key's taxable-equivalent revenue from continuing operations and income (loss) from continuing operations attributable to Key for the periods presented. For more detailed financial information pertaining to each business segment, see the tables at the end of this release.

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 6

Major Business Segments

Dollars in millions Change 2Q22 vs.
2Q22 1Q22 2Q21 1Q22 2Q21
Revenue from continuing operations (TE)

Consumer Bank

$ 824 $ 799 $ 852 3.1 % (3.3 )%

Commercial Bank

844 810 871 4.2 (3.1 )

Other (a)

124 87 50 42.5 148.0

Total

$ 1,792 $ 1,696 $ 1,773 5.7 % 1.1 %
Income (loss) from continuing operations attributable to Key

Consumer Bank

$ 107 $ 70 $ 257 52.9 % (58.4 )%

Commercial Bank

315 283 432 11.3 (27.1 )

Other (a)

108 94 35 14.9 208.6

Total

$ 530 $ 447 $ 724 18.6 % (26.8 )%
(a)

Other includes other segments that consists of corporate treasury, our principal investing unit, and various exit portfolios as well as reconciling items which primarily represents the unallocated portion of nonearning assets of corporate support functions. Charges related to the funding of these assets are part of net interest income and are allocated to the business segments through noninterest expense. Reconciling items also includes intercompany eliminations and certain items that are not allocated to the business segments because they do not reflect their normal operations.

TE = Taxable Equivalent

Consumer Bank

Dollars in millions Change 2Q22 vs.
2Q22 1Q22 2Q21 1Q22 2Q21
Summary of operations

Net interest income (TE)

$ 570 $ 543 $ 599 5.0 % (4.8 )%

Noninterest income

254 256 253 (.8 ) .4

Total revenue (TE)

824 799 852 3.1 (3.3 )

Provision for credit losses

8 43 (70 ) (81.4 ) 111.4

Noninterest expense

676 663 584 2.0 15.8

Income (loss) before income taxes (TE)

140 93 338 50.5 (58.6 )

Allocated income taxes (benefit) and TE adjustments

33 23 81 43.5 (59.3 )

Net income (loss) attributable to Key

$ 107 $ 70 $ 257 52.9 % (58.4 )%
Average balances

Loans and leases

$ 40,818 $ 38,637 $ 40,598 5.6 % .5 %

Total assets

43,868 41,814 43,818 4.9 .1

Deposits

91,256 91,468 88,412 (.2 ) 3.2
Assets under management at period end $ 49,003 $ 53,707 $ 51,013 (8.8 )% (3.9 )%

TE = Taxable Equivalent

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 7

Additional Consumer Bank Data

Dollars in millions Change 2Q22 vs.
2Q22 1Q22 2Q21 1Q22 2Q21
Noninterest income

Trust and investment services income

$ 104 $ 106 $ 104 (1.9 )% - %

Service charges on deposit accounts

59 54 48 9.3 22.9

Cards and payments income

62 57 62 8.8 -

Consumer mortgage income

14 21 26 (33.3 ) (46.2 )

Other noninterest income

15 18 13 (16.7 ) 15.4

Total noninterest income

$ 254 $ 256 $ 253 (.8 )% .4 %
Average deposit balances

NOW and money market deposit accounts

$ 57,884 $ 58,625 $ 56,038 (1.3 )% 3.3 %

Savings deposits

7,515 7,233 6,523 3.9 15.2

Certificates of deposit ($100,000 or more)

1,375 1,520 2,083 (9.5 ) (34.0 )

Other time deposits

1,966 2,090 2,616 (5.9 ) (24.8 )

Noninterest-bearing deposits

22,516 22,000 21,152 2.3 6.4

Total deposits

$ 91,256 $ 91,468 $ 88,412 (.2 )% 3.2 %
Other data

Branches

978 993 1,014

Automated teller machines

1,284 1,308 1,329

Consumer Bank Summary of Operations (2Q22 vs. 2Q21)

•

Net income attributable to Key of $107 million for the second quarter of 2022, compared to $257 million for the year-ago quarter

•

Taxable-equivalent net interest income decreased by $29 million, compared to the second quarter of 2021, related to the sale of the indirect auto portfolio, partially offset by strong consumer mortgage and Laurel Road balance sheet growth

•

Average loans and leases increased $220 million, or 0.5%, from the second quarter of 2021, driven by growth in consumer mortgage and Laurel Road, largely offset by the sale of the indirect auto loan portfolio

•

Average deposits increased $2.8 billion, or 3.2%, from the second quarter of 2021, driven by higher retail deposits

•

Provision for credit losses increased $78 million, compared to the second quarter of 2021, due to a reserve release in the year-ago quarter as uncertainty caused by the pandemic subsided

•

Noninterest income increased $1 million, or 0.4%, from the year-ago quarter, driven by an increase in service charges on deposit accounts, partially offset by a decline in consumer mortgage income, reflecting lower gain on sale margins and higher balance sheet retention

•

Noninterest expense increased $92 million, or 15.8%, from the year-ago quarter, driven by higher salary and employee benefits expense, as well as investments in digital, security, and fraud

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 8

Commercial Bank

Dollars in millions Change 2Q22 vs.
2Q22 1Q22 2Q21 1Q22 2Q21
Summary of operations

Net interest income (TE)

$ 440 $ 415 $ 417 6.0 % 5.5 %

Noninterest income

404 395 454 2.3 (11.0)

Total revenue (TE)

844 810 871 4.2 (3.1)

Provision for credit losses

37 41 (131 ) 9.8 128.2

Noninterest expense

414 417 451 (.7) (8.2)

Income (loss) before income taxes (TE)

393 352 551 11.6 (28.7)

Allocated income taxes and TE adjustments

78 69 119 13.0 (34.5)

Net income (loss) attributable to Key

$ 315 $ 283 $ 432 11.3 % (27.1) %
Average balances

Loans and leases

$ 67,834 $ 64,701 $ 59,953 4.8 % 13.1 %

Loans held for sale

1,016 1,323 1,341 (23.2) (24.2)

Total assets

78,824 74,860 69,101 5.3 14.1

Deposits

54,864 57,289 54,814 (4.2) % 0.1 %

TE = Taxable Equivalent

Additional Commercial Bank Data

Dollars in millions Change 2Q22 vs.
2Q22 1Q22 2Q21 1Q22 2Q21
Noninterest income

Trust and investment services income

$ 33 $ 30 $ 27 10.0 % 22.2 %

Investment banking and debt placement fees

149 163 215 (8.6) (30.7)

Operating lease income and other leasing gains

27 32 35 (15.6) (22.9)

Corporate services income

80 82 47 (2.4) 70.2

Service charges on deposit accounts

36 36 34 - 5.9

Cards and payments income

23 22 49 4.5 (53.1)

Payments and services income

139 140 130 (0.7) 6.9

Commercial mortgage servicing fees

45 36 44 25.0 2.3

Other noninterest income

11 (6 ) 3 283.3 266.7

Total noninterest income

$ 404 $ 395 $ 454 2.3 % (11.0)%

Commercial Bank Summary of Operations (2Q22 vs. 2Q21)

•

Net income attributable to Key of $315 million for the second quarter of 2022, compared to $432 million for the year-ago quarter

•

Taxable-equivalent net interest income increased by $23 million, compared to the second quarter of 2021, reflecting core loan growth in commercial and industrial loans and commercial mortgage real estate loans and higher interest rates, partially offset by lower loan fees from the PPP

•

Average loan and lease balances increased $7.9 billion, compared to the second quarter of 2021, reflecting growth in core commercial and industrial loans and commercial mortgage real estate loans, partially offset by a decline in PPP balances

•

Average deposit balances increased $50 million, or 0.1%, compared to the second quarter of 2021, driven by growth in targeted relationships and higher commercial escrow deposits, partially offset by outflows in interest-bearing deposits

•

Provision for credit losses increased $168 million, compared to the second quarter of 2021, due to a reserve release in the year-ago period as uncertainty caused by the pandemic subsided

•

Noninterest income decreased $50 million from the year-ago quarter, driven by lower investment banking and debt placement fees and lower cards and payments income, partially offset by an increase in corporate services income

•

Noninterest expense decreased $37 million, or 8.2%, from the second quarter of 2021, driven by lower incentive compensation, reflecting a decrease in investment banking and debt placement fees

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 9

*******************************************

KeyCorp's roots trace back nearly 200 years to Albany, New York. Headquartered in Cleveland, Ohio, Key is one of the nation's largest bank-based financial services companies, with assets of approximately $187.0 billion at June 30, 2022.

Key provides deposit, lending, cash management, and investment services to individuals and businesses in 15 states under the name KeyBank National Association through a network of approximately 1,000 branches and approximately 1,300 ATMs. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name. For more information, visit https://www.key.com/. KeyBank is Member FDIC.

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 10

CONTACTS:

ANALYSTS

MEDIA

Vernon L. Patterson

Susan Donlan

216.689.0520

216.471.3133

Vernon_Patterson@KeyBank.com

Susan_E_Donlan@KeyBank.com

Melanie S. Kaiser

Beth Strauss

216.689.4545

216.471.2787

Melanie_S_Kaiser@KeyBank.com

Beth_A_Strauss@KeyBank.com

Halle A. Nichols

Twitter: @keybank

216.471.2184

Halle_A_Nichols@KeyBank.com

INVESTOR RELATIONS:

KEY MEDIA NEWSROOM:

www.key.com/ir

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, 2021, as well as in KeyCorp's subsequent SEC filings, all of which have been or will be filed with the Securities and Exchange Commission (the "SEC") and are or will be available on Key's website (www.key.com/ir) and on the SEC's website (www.sec.gov). These factors may include, among others, deterioration of commercial real estate market fundamentals, adverse changes in credit quality trends, declining asset prices, a worsening of the U.S. economy due to financial, political, or other shocks, the extensive regulation of the U.S. financial services industry, and the impact of the COVID-19 global pandemic on us, our clients, our third-party service providers, and the markets. 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 athttps://www.key.com/irat 8:00 a.m. ET, on July 21, 2022. A replay of the call will be available through July 30, 2022.

For up-to-date company information, media contacts, and facts and figures about Key's lines of business, visit our Media Newsroom athttps://www.key.com/newsroom.

*****

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 11

KeyCorp

Second Quarter 2022

Financial Supplement

Page

12 Financial Highlights
14 GAAP to Non-GAAP Reconciliation
16 Consolidated Balance Sheets
17 Consolidated Statements of Income
18 Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations
20 Noninterest Expense
20 Personnel Expense
21 Loan Composition
21 Loans Held for Sale Composition
21 Summary of Changes in Loans Held for Sale
22 Summary of Loan and Lease Loss Experience From Continuing Operations
23 Asset Quality Statistics From Continuing Operations
23 Summary of Nonperforming Assets and Past Due Loans From Continuing Operations
23 Summary of Changes in Nonperforming Loans From Continuing Operations
24 Line of Business Results

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 12

Financial Highlights

(Dollars in millions, except per share amounts)

Three months ended
6/30/2022 3/31/2022 6/30/2021

Summary of operations

Net interest income (TE)

$ 1,104 $ 1,020 $ 1,023

Noninterest income

688 676 750

Total revenue (TE)

1,792 1,696 1,773

Provision for credit losses

45 83 (222 )

Noninterest expense

1,078 1,070 1,076

Income (loss) from continuing operations attributable to Key

530 447 724

Income (loss) from discontinued operations, net of taxes

3 1 5

Net income (loss) attributable to Key

533 448 729

Income (loss) from continuing operations attributable to Key common shareholders

504 420 698

Income (loss) from discontinued operations, net of taxes

3 1 5

Net income (loss) attributable to Key common shareholders

507 421 703

Per common share

Income (loss) from continuing operations attributable to Key common shareholders

$ .54 $ .45 $ .73

Income (loss) from discontinued operations, net of taxes

- - -

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

.55 .46 .73

Income (loss) from continuing operations attributable to Key common shareholders - assuming dilution

.54 .45 .72

Income (loss) from discontinued operations, net of taxes - assuming dilution

- - -

Net income (loss) attributable to Key common shareholders - assuming dilution (a)

.54 .45 .73

Cash dividends declared

.195 .195 .185

Book value at period end

13.48 14.43 16.75

Tangible book value at period end

10.40 11.41 13.81

Market price at period end

17.23 22.38 20.65

Performance ratios

From continuing operations:

Return on average total assets

1.16 % .99 % 1.63 %

Return on average common equity

16.17 11.45 17.54

Return on average tangible common equity (b)

20.90 14.12 21.34

Net interest margin (TE)

2.61 2.46 2.52

Cash efficiency ratio (b)

59.5 62.4 59.9

From consolidated operations:

Return on average total assets

1.16 % .99 % 1.64 %

Return on average common equity

16.27 11.47 17.67

Return on average tangible common equity (b)

21.03 14.15 21.49

Net interest margin (TE)

2.60 2.46 2.55

Loan to deposit (c)

78.3 72.9 70.4

Capital ratios at period end

Key shareholders' equity to assets

7.7 % 8.5 % 9.9 %

Key common shareholders' equity to assets

6.7 7.4 8.9

Tangible common equity to tangible assets (b)

5.3 6.0 7.4

Common Equity Tier 1 (d)

9.2 9.4 9.9

Tier 1 risk-based capital (d)

10.4 10.7 11.3

Total risk-based capital (d)

12.0 12.4 13.2

Leverage (d)

8.8 8.6 8.7

Asset quality - from continuing operations

Net loan charge-offs

$ 44 $ 33 $ 22

Net loan charge-offs to average loans

.16 % .13 % .09 %

Allowance for loan and lease losses

$ 1,099 $ 1,105 $ 1,220

Allowance for credit losses

1,272 1,271 1,372

Allowance for loan and lease losses to period-end loans

.98 % 1.04 % 1.21 %

Allowance for credit losses to period-end loans

1.13 1.19 1.36

Allowance for loan and lease losses to nonperforming loans

256.2 251.7 175.8

Allowance for credit losses to nonperforming loans

296.5 289.5 197.7

Nonperforming loans at period-end

$ 429 $ 439 $ 694

Nonperforming assets at period-end

463 467 738

Nonperforming loans to period-end portfolio loans

.38 % .41 % .69 %

Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets

.41 .44 .73

Trust assets

Assets under management

$ 49,003 $ 53,707 $ 51,013

Other data

Average full-time equivalent employees

17,414 17,110 17,003

Branches

978 993 1,014

Taxable-equivalent adjustment

$ 7 $ 6 $ 6

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 13

Financial Highlights (continued)

(Dollars in millions, except per share amounts)

Six months ended
6/30/2022 6/30/2021

Summary of operations

Net interest income (TE)

$ 2,124 $ 2,035

Noninterest income

1,364 1,488

Total revenue (TE)

3,488 3,523

Provision for credit losses

128 (315 )

Noninterest expense

2,148 2,147

Income (loss) from continuing operations attributable to Key

977 1,342

Income (loss) from discontinued operations, net of taxes

4 9

Net income (loss) attributable to Key

981 1,351

Income (loss) from continuing operations attributable to Key common shareholders

924 1,289

Income (loss) from discontinued operations, net of taxes

4 9

Net income (loss) attributable to Key common shareholders

928 1,298

Per common share

Income (loss) from continuing operations attributable to Key common shareholders

$ 1.00 $ 1.34

Income (loss) from discontinued operations, net of taxes

- .01

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

1.00 1.35

Income (loss) from continuing operations attributable to Key common shareholders - assuming dilution

.99 1.33

Income (loss) from discontinued operations, net of taxes - assuming dilution

- .01

Net income (loss) attributable to Key common shareholders - assuming dilution (a)

1.00 1.34

Cash dividends paid

.39 .37

Performance ratios

From continuing operations:

Return on average total assets

1.08 % 1.55 %

Return on average common equity

13.62 16.33

Return on average tangible common equity (b)

17.15 19.88

Net interest margin (TE)

2.53 2.56

Cash efficiency ratio (b)

60.9 60.1

From consolidated operations:

Return on average total assets

1.08 % 1.55 %

Return on average common equity

13.68 16.45

Return on average tangible common equity (b)

17.23 20.02

Net interest margin (TE)

2.53 2.57

Asset quality - from continuing operations

Net loan charge-offs

$ 77 $ 136

Net loan charge-offs to average total loans

.15 % .27 %

Other data

Average full-time equivalent employees

17,262 17,046

Taxable-equivalent adjustment

13 13
(a)

Earnings per share may not foot due to rounding.

(b)

The following table entitled "GAAP to Non-GAAP Reconciliations" presents the computations of certain financial measures related to "tangible common equity" and "cash efficiency." The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.

(c)

Represents period-end consolidated total loans and loans held for sale divided by period-end consolidated total deposits.

(d)

June 30, 2022, ratio is estimated and reflects Key's election to adopt the CECL optional transition provision.

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 14

GAAP to Non-GAAP Reconciliations

(Dollars in millions)

The table below presents certain non-GAAP financial measures related to "tangible common equity," "return on average tangible common equity," "pre-provision net revenue," and "cash efficiency ratio."

The tangible common equity ratio and the return on average tangible common equity ratio have been a focus for some investors, and management believes these ratios may assist investors in analyzing Key's capital position without regard to the effects of intangible assets and preferred stock.

The table also shows the computation for pre-provision net revenue, which is not formally defined by GAAP. Management believes that eliminating the effects of the provision for credit losses makes it easier to analyze the results by presenting them on a more comparable basis.

The cash efficiency ratio is a ratio of two non-GAAP performance measures. As such, there is no directly comparable GAAP performance measure. The cash efficiency ratio performance measure removes the impact of Key's intangible asset amortization from the calculation. Management believes this ratio provide 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 Six months ended
6/30/2022 3/31/2022 6/30/2021 6/30/2022 6/30/2021

Tangible common equity to tangible assets at period-end

Key shareholders' equity (GAAP)

$ 14,427 $ 15,308 $ 17,941

Less: Intangible assets (a)

2,868 2,810 2,828

Preferred Stock (b)

1,856 1,856 1,856

Tangible common equity (non-GAAP)

$ 9,703 $ 10,642 $ 13,257

Total assets (GAAP)

$ 187,008 $ 181,221 $ 181,115

Less: Intangible assets (a)

2,868 2,810 2,828

Tangible assets (non-GAAP)

$ 184,140 $ 178,411 $ 178,287

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

5.27 % 5.96 % 7.44 %

Pre-provision net revenue

Net interest income (GAAP)

$ 1,097 $ 1,014 $ 1,017 $ 2,111 $ 2,022

Plus: Taxable-equivalent adjustment

7 6 6 13 13

Noninterest income

688 676 750 1,364 1,488

Less: Noninterest expense

1,078 1,070 1,076 2,148 2,147

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

$ 714 $ 626 $ 697 $ 1,340 $ 1,376

Average tangible common equity

Average Key shareholders' equity (GAAP)

$ 14,398 $ 16,780 $ 17,859 $ 15,583 $ 17,814

Less: Intangible assets (average) (c)

2,827 2,814 2,840 2,821 2,840

Preferred stock (average)

1,900 1,900 1,900 1,900 1,900

Average tangible common equity (non-GAAP)

$ 9,671 $ 12,066 $ 13,119 $ 10,862 $ 13,074

Return on average tangible common equity from continuing operations

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

$ 504 $ 420 $ 698 $ 924 $ 1,289

Average tangible common equity (non-GAAP)

9,671 12,066 13,119 10,862 13,074

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

20.90 % 14.12 % 21.34 % 17.15 % 19.88 %

Return on average tangible common equity consolidated

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

$ 507 $ 421 $ 703 $ 928 $ 1,298

Average tangible common equity (non-GAAP)

9,671 12,066 13,119 10,862 13,074

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

21.03 % 14.15 % 21.49 % 17.23 % 20.02 %

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 15

GAAP to Non-GAAP Reconciliations (continued)

(Dollars in millions)

Three months ended Six months ended
6/30/2022 3/31/2022 6/30/2021 6/30/2022 6/30/2021

Cash efficiency ratio

Noninterest expense (GAAP)

$ 1,078 $ 1,070 $ 1,076 $ 2,148 $ 2,147

Less: Intangible asset amortization

12 11 14 23 29

Adjusted noninterest expense (non-GAAP)

$ 1,066 $ 1,059 $ 1,062 $ 2,125 $ 2,118

Net interest income (GAAP)

$ 1,097 $ 1,014 $ 1,017 $ 2,111 $ 2,022

Plus: Taxable-equivalent adjustment

7 6 6 13 13

Noninterest income

688 676 750 1,364 1,488

Total taxable-equivalent revenue (non-GAAP)

$ 1,792 $ 1,696 $ 1,773 $ 3,488 $ 3,523

Cash efficiency ratio (non-GAAP)

59.5 % 62.4 % 59.9 % 60.9 % 60.1 %
(a)

For the three months ended June 30, 2022, March 31, 2022, and June 30, 2021, intangible assets exclude $2 million, $2 million, and $4 million, respectively, of period-end purchased credit card receivables.

(b)

Net of capital surplus.

(c)

For the three months ended June 30, 2022, March 31, 2022, and June 30, 2021, average intangible assets exclude $2 million, $3 million, and $4 million, respectively, of average purchased credit card receivables. For the six months ended June 30, 2022, and June 30, 2021, average intangible assets exclude $2 million, and $4 million, respectively, of average purchased credit card receivables.

GAAP = U.S. generally accepted accounting principles

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 16

Consolidated Balance Sheets

(Dollars in millions)

6/30/2022 3/31/2022 6/30/2021

Assets

Loans

$ 112,390 $ 106,600 $ 100,730

Loans held for sale

1,306 1,170 1,537

Securities available for sale

42,437 43,681 34,638

Held-to-maturity securities

8,186 6,871 6,175

Trading account assets

809 848 851

Short-term investments

2,456 3,881 20,460

Other investments

969 722 635

Total earning assets

168,553 163,773 165,026

Allowance for loan and lease losses

(1,099 ) (1,105 ) (1,220 )

Cash and due from banks

678 684 792

Premises and equipment

638 647 785

Goodwill

2,752 2,694 2,673

Other intangible assets

118 118 159

Corporate-owned life insurance

4,343 4,340 4,304

Accrued income and other assets

10,529 9,544 7,966

Discontinued assets

496 526 630

Total assets

$ 187,008 $ 181,221 $ 181,115

Liabilities

Deposits in domestic offices:

NOW and money market deposit accounts

$ 83,628 $ 86,829 $ 85,242

Savings deposits

7,934 7,840 6,993

Certificates of deposit ($100,000 or more)

1,421 1,533 2,064

Other time deposits

1,909 2,037 2,493

Total interest-bearing deposits

94,892 98,239 96,792

Noninterest-bearing deposits

50,973 50,424 49,280

Total deposits

145,865 148,663 146,072

Federal funds purchased and securities sold under repurchase agreements

3,234 599 211

Bank notes and other short-term borrowings

2,809 2,222 723

Accrued expense and other liabilities

4,056 3,615 2,957

Long-term debt

16,617 10,814 13,211

Total liabilities

172,581 165,913 163,174

Equity

Preferred stock

1,900 1,900 1,900

Common shares

1,257 1,257 1,257

Capital surplus

6,241 6,214 6,232

Retained earnings

15,118 14,793 13,689

Treasury stock, at cost

(5,923 ) (5,927 ) (5,287 )

Accumulated other comprehensive income (loss)

(4,166 ) (2,929 ) 150

Key shareholders' equity

14,427 15,308 17,941

Total liabilities and equity

$ 187,008 $ 181,221 $ 181,115

Common shares outstanding (000)

932,643 932,398 960,276

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 17

Consolidated Statements of Income

(Dollars in millions, except per share amounts)

Three months ended Six months ended
6/30/2022 3/31/2022 6/30/2021 6/30/2022 6/30/2021

Interest income

Loans

$ 923 $ 837 $ 888 $ 1,760 $ 1,777

Loans held for sale

10 12 11 22 22

Securities available for sale

188 173 133 361 263

Held-to-maturity securities

48 46 45 94 90

Trading account assets

7 6 5 13 10

Short-term investments

13 4 6 17 11

Other investments

4 2 2 6 4

Total interest income

1,193 1,080 1,090 2,273 2,177

Interest expense

Deposits

20 14 16 34 37

Federal funds purchased and securities sold under repurchase agreements

6 - - 6 -

Bank notes and other short-term borrowings

9 3 3 12 4

Long-term debt

61 49 54 110 114

Total interest expense

96 66 73 162 155

Net interest income

1,097 1,014 1,017 2,111 2,022

Provision for credit losses

45 83 (222 ) 128 (315 )

Net interest income after provision for credit losses

1,052 931 1,239 1,983 2,337

Noninterest income

Trust and investment services income

137 136 133 273 266

Investment banking and debt placement fees

149 163 217 312 379

Service charges on deposit accounts

96 91 83 187 156

Operating lease income and other leasing gains

28 32 36 60 74

Corporate services income

88 90 55 178 119

Cards and payments income

85 80 113 165 218

Corporate-owned life insurance income

35 31 30 66 61

Consumer mortgage income

14 21 26 35 73

Commercial mortgage servicing fees

45 36 44 81 78

Other income

11 (4 ) 13 7 64

Total noninterest income

688 676 750 1,364 1,488

Noninterest expense

Personnel

607 630 623 1,237 1,247

Net occupancy

78 73 75 151 151

Computer processing

78 77 71 155 144

Business services and professional fees

52 53 51 105 101

Equipment

26 23 25 49 50

Operating lease expense

27 28 31 55 65

Marketing

34 28 31 62 57

Other expense

176 158 169 334 332

Total noninterest expense

1,078 1,070 1,076 2,148 2,147

Income (loss) from continuing operations before income taxes

662 537 913 1,199 1,678

Income taxes

132 90 189 222 336

Income (loss) from continuing operations

530 447 724 977 1,342

Income (loss) from discontinued operations, net of taxes

3 1 5 4 9

Net income (loss)

533 448 729 981 1,351

Less: Net income (loss) attributable to noncontrolling interests

- - - - -

Net income (loss) attributable to Key

$ 533 $ 448 $ 729 $ 981 1,351

Income (loss) from continuing operations attributable to Key common shareholders

$ 504 $ 420 $ 698 $ 924 $ 1,289

Net income (loss) attributable to Key common shareholders

507 421 703 928 1,298

Per common share

Income (loss) from continuing operations attributable to Key common shareholders

$ .54 $ .45 $ .73 $ 1.00 $ 1.34

Income (loss) from discontinued operations, net of taxes

- - - - .01

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

.55 .46 .73 1.00 1.35

Per common share - assuming dilution

Income (loss) from continuing operations attributable to Key common shareholders

$ .54 $ .45 $ .72 $ .99 $ 1.33

Income (loss) from discontinued operations, net of taxes

- - - - .01

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

.54 .45 .73 1.00 1.34

Cash dividends declared per common share

$ .195 $ .195 $ .185 $ .390 $ .370

Weighted-average common shares outstanding (000)

924,302 922,941 957,423 923,717 961,292

Effect of common share options and other stock awards

7,506 10,692 9,740 9,087 9,514

Weighted-average common shares and potential common shares outstanding (000) (b)

931,808 933,634 967,163 932,805 970,806
(a)

Earnings per share may not foot due to rounding.

(b)

Assumes conversion of common share options and other stock awards, as applicable.

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 18

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

(Dollars in millions)

Second Quarter 2022 First Quarter 2022 Second Quarter 2021
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 and industrial (d)

$ 53,858 $ 449 3.34 % $ 51,574 $ 410 3.22 % $ 51,808 $ 450 3.48 %

Real estate - commercial mortgage

15,231 136 3.58 14,587 121 3.37 12,825 117 3.67

Real estate - construction

2,125 20 3.81 2,027 17 3.37 2,149 20 3.68

Commercial lease financing

3,817 24 2.47 3,942 24 2.41 4,060 30 2.98

Total commercial loans

75,031 629 3.36 72,130 572 3.21 70,842 617 3.49

Real estate - residential mortgage

18,383 131 2.85 16,309 112 2.75 11,055 81 2.92

Home equity loans

8,208 78 3.83 8,345 74 3.61 9,089 85 3.76

Consumer direct loans

6,514 68 4.19 5,954 61 4.16 4,910 57 4.69

Credit cards

943 24 10.20 932 24 10.36 908 22 9.79

Consumer indirect loans

59 - - 92 - - 4,010 32 3.19

Total consumer loans

34,107 301 3.53 31,632 271 3.45 29,972 277 3.71

Total loans

109,138 930 3.41 103,762 843 3.28 100,814 894 3.56

Loans held for sale

1,107 10 3.49 1,485 12 3.32 1,616 11 2.60

Securities available for sale (b), (e)

43,023 188 1.60 44,923 173 1.50 33,623 133 1.57

Held-to-maturity securities (b)

7,291 48 2.65 7,188 46 2.54 6,452 45 2.75

Trading account assets

854 7 3.45 842 6 2.74 837 5 2.56

Short-term investments

3,591 13 1.45 7,323 4 .25 18,817 6 .13

Other investments (e)

800 4 2.27 651 2 1.26 622 2 1.02

Total earning assets

165,804 1,200 2.83 166,174 1,086 2.62 162,781 1,096 2.70

Allowance for loan and lease losses

(1,103 ) (1,056 ) (1,442 )

Accrued income and other assets

18,826 17,471 16,531

Discontinued assets

505 539 650

Total assets

$ 184,032 $ 183,128 $ 178,520

Liabilities

NOW and money market deposit accounts

$ 85,389 $ 18 .08 $ 88,515 $ 11 .05 $ 83,981 $ 9 .05

Savings deposits

7,891 - .01 7,599 - .01 6,859 1 .03

Certificates of deposit ($100,000 or more)

1,487 1 .44 1,639 2 .44 2,212 4 .72

Other time deposits

1,972 1 .13 2,098 1 .15 2,630 2 .38

Total interest-bearing deposits

96,739 20 .08 99,851 14 .06 95,682 16 .07

Federal funds purchased and securities sold under repurchase agreements

2,792 6 .88 287 - .13 251 - .02

Bank notes and other short-term borrowings

1,943 9 1.77 705 3 1.94 744 3 1.19

Long-term debt (f), (g)

12,662 61 1.92 10,830 49 1.79 11,978 54 1.79

Total interest-bearing liabilities

114,136 96 .34 111,673 66 .24 108,655 73 .27

Noninterest-bearing deposits

50,732 50,312 48,640

Accrued expense and other liabilities

4,261 3,824 2,716

Discontinued liabilities (g)

505 539 650

Total liabilities

$ 169,634 $ 166,348 $ 160,661

Equity

Key shareholders' equity

$ 14,398 $ 16,780 $ 17,859

Noncontrolling interests

- - -

Total equity

14,398 16,780 17,859

Total liabilities and equity

$ 184,032 $ 183,128 $ 178,520

Interest rate spread (TE)

2.50 % 2.38 % 2.43 %

Net interest income (TE) and net interest margin (TE)

$ 1,104 2.61 % $ 1,020 2.46 % $ 1,023 2.52 %

TE adjustment (b)

7 6 6

Net interest income, GAAP basis

$ 1,097 $ 1,014 $ 1,017
(a)

Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (g) below, calculated using a matched funds transfer pricing methodology.

(b)

Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 21% for the three months ended June 30, 2022, March 31, 2022, and June 30, 2021.

(c)

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

(d)

Commercial and industrial average balances include $153 million, $141 million, and $132 million of assets from commercial credit cards for the three months ended June 30, 2022, March 31, 2022, and June 30, 2021, 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 Second Quarter 2022 Profit

July 21, 2022

Page 19

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

(Dollars in millions)

Six months ended June 30, 2022 Six months ended June 30, 2021
Average
Balance		 Interest (a) Yield/
Rate (a)		 Average
Balance		 Interest (a) Yield/
Rate (a)

Assets

Loans: (b), (c)

Commercial and industrial (d)

$ 52,723 $ 858 3.28 % $ 52,194 $ 902 3.49 %

Real estate - commercial mortgage

14,910 257 3.48 12,742 232 3.67

Real estate - construction

2,076 37 3.60 2,099 39 3.71

Commercial lease financing

3,879 48 2.44 4,101 61 2.99

Total commercial loans

73,588 1,200 3.28 71,136 1,234 3.49

Real estate - residential mortgage

17,352 243 2.80 10,380 154 2.97

Home equity loans

8,276 153 3.72 9,189 173 3.79

Consumer direct loans

6,236 129 4.18 4,864 113 4.70

Credit cards

938 48 10.28 920 46 10.12

Consumer indirect loans

75 - - 4,288 69 3.25

Total consumer loans

32,877 573 3.49 29,641 555 3.77

Total loans

106,465 1,773 3.35 100,777 1,789 3.58

Loans held for sale

1,295 22 3.40 1,574 22 2.74

Securities available for sale (b), (e)

43,968 361 1.55 31,841 263 1.66

Held-to-maturity securities (b)

7,239 94 2.59 6,818 90 2.63

Trading account assets

848 13 3.10 842 10 2.35

Short-term investments

5,447 17 .65 17,670 11 .13

Other investments (e)

726 6 1.82 618 4 1.21

Total earning assets

165,988 2,286 2.72 160,140 2,189 2.75

Allowance for loan and lease losses

(1,080 ) (1,532 )

Accrued income and other assets

18,152 16,463

Discontinued assets

522 668

Total assets

$ 183,582 $ 175,739

Liabilities

NOW and money market deposit accounts

$ 86,943 $ 29 .07 $ 82,717 $ 20 .05

Savings deposits

7,746 1 .01 6,533 1 .03

Certificates of deposit ($100,000 or more)

1,562 3 .44 2,390 10 .85

Other time deposits

2,035 1 .14 2,766 6 .48

Total interest-bearing deposits

98,286 34 .07 94,406 37 .08

Federal funds purchased and securities sold under repurchase agreements

1,547 6 .81 247 - .03

Bank notes and other short-term borrowings

1,327 12 1.82 811 4 .89

Long-term debt (f), (g)

11,751 110 1.86 12,402 114 1.85

Total interest-bearing liabilities

112,911 162 .29 107,866 155 .29

Noninterest-bearing deposits

50,523 46,638

Accrued expense and other liabilities

4,043 2,753

Discontinued liabilities (g)

522 668

Total liabilities

$ 167,999 $ 157,925

Equity

Key shareholders' equity

$ 15,583 $ 17,814

Noncontrolling interests

- -

Total equity

15,583 17,814

Total liabilities and equity

$ 183,582 $ 175,739

Interest rate spread (TE)

2.44 % 2.46 %

Net interest income (TE) and net interest margin (TE)

$ 2,124 2.53 % $ 2,035 2.56 %

TE adjustment (b)

13 13

Net interest income, GAAP basis

$ 2,111 $ 2,022
(a)

Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (g) below, calculated using a matched funds transfer pricing methodology.

(b)

Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 21% for the six months ended June 30, 2022, and June 30, 2021, respectively.

(c)

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

(d)

Commercial and industrial average balances include $147 million and $129 million of assets from commercial credit cards for the six months ended June 30, 2022, and June 30, 2021, 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 Second Quarter 2022 Profit

July 21, 2022

Page 20

Noninterest Expense

(Dollars in millions)

Three months ended Six months ended
6/30/2022 3/31/2022 6/30/2021 6/30/2022 6/30/2021

Personnel (a)

 $ 607 $ 630 $ 623 $ 1,237 $ 1,247

Net occupancy

78 73 75 151 151

Computer processing

78 77 71 155 144

Business services and professional fees

52 53 51 105 101

Equipment

26 23 25 49 50

Operating lease expense

27 28 31 55 65

Marketing

34 28 31 62 57

Other expense

176 158 169 334 332

Total noninterest expense

$ 1,078 $ 1,070 $ 1,076 $ 2,148 $ 2,147

Average full-time equivalent employees (b)

 17,414 17,110 17,003 17,262 17,046
(a)

Additional detail provided in Personnel Expense table below.

(b)

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

Personnel Expense

(Dollars in millions)

Three months ended Six months ended
6/30/2022 3/31/2022 6/30/2021 6/30/2022 6/30/2021

Salaries and contract labor

$ 357 $ 348 $ 321 $ 705 $ 641

Incentive and stock-based compensation

163 183 210 346 406

Employee benefits

83 97 92 180 199

Severance

4 2 - 6 1

Total personnel expense

$ 607 $ 630 $ 623 $ 1,237 $ 1,247

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 21

Loan Composition

(Dollars in millions)

Change 6/30/2022 vs
6/30/2022 3/31/2022 6/30/2021 3/31/2022 6/30/2021

Commercial and industrial (a)

 $ 55,245 $ 52,815 $ 50,672 4.6 % 9.0 %
Commercial real estate:

Commercial mortgage

15,636 15,124 12,965 3.4 20.6

Construction

2,144 2,065 2,132 3.8 .6

Total commercial real estate loans

17,780 17,189 15,097 3.4 17.8

Commercial lease financing (b)

3,956 3,916 4,061 1.0 (2.6)

Total commercial loans

76,981 73,920 69,830 4.1 10.2

Residential - prime loans:

Real estate - residential mortgage

19,588 17,181 12,131 14.0 61.5

Home equity loans

8,134 8,258 9,047 (1.5 ) (10.1)

Total residential - prime loans

27,722 25,439 21,178 9.0 30.9

Consumer direct loans

6,665 6,249 5,049 6.7 32.0

Credit cards

967 930 923 4.0 4.8

Consumer indirect loans

55 62 3,750 (11.3 ) (98.5)

Total consumer loans

35,409 32,680 30,900 8.4 14.6

Total loans (c), (d)

 $ 112,390 $ 106,600 $ 100,730 5.4 % 11.6 %
(a)

Loan balances include $161 million, $147 million, and $135 million of commercial credit card balances at June 30, 2022, March 31, 2022, and June 30, 2021, respectively.

(b)

Commercial lease financing includes receivables held as collateral for a secured borrowing of $12 million, $14 million, and $19 million at June 30, 2022, March 31, 2022, and June 30, 2021, respectively. Principal reductions are based on the cash payments received from these related receivables.

(c)

Total loans exclude loans of $498 million at June 30, 2022, $531 million at March 31, 2022, and $636 million at June 30, 2021, related to the discontinued operations of the education lending business.

(d)

Accrued interest of $233 million, $193 million, and $225 million at June 30, 2022, March 31, 2022, and June 30, 2021, respectively, presented in "other assets" on the Consolidated Balance Sheets is excluded from the amortized cost basis disclosed in this table.

Loans Held for Sale Composition

(Dollars in millions)

Change 6/30/2022 vs
6/30/2022 3/31/2022 6/30/2021 3/31/2022 6/30/2021

Commercial and industrial

$ 213 $ 216 $ 233 (1.4 )% (8.6)%

Real estate - commercial mortgage

1,004 819 1,073 22.6 (6.4)

Real estate - construction

6 21 - (71.4 )% N/M

Real estate - residential mortgage

83 114 231 (27.2 ) (64.1)

Total loans held for sale

$ 1,306 $ 1,170 $ 1,537 11.6 % (15.0)%

N/M = Not Meaningful

Summary of Changes in Loans Held for Sale

(Dollars in millions)

2Q22 1Q22 4Q21 3Q21 2Q21

Balance at beginning of period

$ 1,170 $ 2,729 $ 1,805 $ 1,537 $ 2,296

New originations

2,837 2,724 5,704 3,328 3,573

Transfers from (to) held to maturity, net

(57 ) - (1 ) 3,305 (71 )

Loan sales

(2,506 ) (4,269 ) (4,742 ) (6,405 ) (4,195 )

Loan draws (payments), net

(133 ) (12 ) (12 ) 8 (27 )

Valuation and other adjustments

(5 ) (2 ) (25 ) 32 (39 )

Balance at end of period

$ 1,306 $ 1,170 $ 2,729 $ 1,805 $ 1,537

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 22

Summary of Loan and Lease Loss Experience From Continuing Operations

(Dollars in millions)

Three months ended Six months ended
6/30/2022 3/31/2022 6/30/2021 6/30/2022 6/30/2021

Average loans outstanding

$ 109,138 $ 103,762 $ 100,814 $ 106,465 $ 100,777

Allowance for loan and lease losses at the beginning of the period

1,105 1,061 1,438 1,061 1,626

Loans charged off:

Commercial and industrial

39 30 41 69 114

Real estate - commercial mortgage

3 4 4 7 39

Real estate - construction

- - - - -

Total commercial real estate loans

3 4 4 7 39

Commercial lease financing

- 2 - 2 4

Total commercial loans

42 36 45 78 157

Real estate - residential mortgage

(2 ) (1 ) 1 (3 ) 1

Home equity loans

- 1 4 1 6

Consumer direct loans

10 7 7 17 15

Credit cards

8 7 9 15 15

Consumer indirect loans

1 1 5 2 12

Total consumer loans

17 15 26 32 49

Total loans charged off

59 51 71 110 206

Recoveries:

Commercial and industrial

8 11 32 19 40

Real estate - commercial mortgage

1 1 6 2 7

Real estate - construction

1 - - 1 -

Total commercial real estate loans

2 1 6 3 7

Commercial lease financing

1 - - 1 1

Total commercial loans

11 12 38 23 48

Real estate - residential mortgage

1 - - 1 1

Home equity loans

1 1 1 2 2

Consumer direct loans

1 2 2 3 4

Credit cards

1 2 3 3 5

Consumer indirect loans

- 1 5 1 10

Total consumer loans

4 6 11 10 22

Total recoveries

15 18 49 33 70

Net loan charge-offs

(44 ) (33 ) (22 ) (77 ) (136 )

Provision (credit) for loan and lease losses

38 77 (196 ) 115 (270 )

Allowance for loan and lease losses at end of period

$ 1,099 $ 1,105 $ 1,220 $ 1,099 $ 1,220

Liability for credit losses on lending-related commitments at beginning of period

166 160 178 160 197

Provision (credit) for losses on lending-related commitments

7 6 (26 ) 13 (45 )

Liability for credit losses on lending-related commitments at end of period (a)

 $ 173 $ 166 $ 152 $ 173 $ 152

Total allowance for credit losses at end of period

$ 1,272 $ 1,271 $ 1,372 $ 1,272 $ 1,372

Net loan charge-offs to average total loans

.16 % .13 % .09 % .15 % .27 %

Allowance for loan and lease losses to period-end loans

.98 1.04 1.21 .98 1.21

Allowance for credit losses to period-end loans

1.13 1.19 1.36 1.13 1.36

Allowance for loan and lease losses to nonperforming loans

256.2 251.7 175.8 256.2 175.8

Allowance for credit losses to nonperforming loans

296.5 289.5 197.7 296.5 197.7

Discontinued operations - education lending business:

Loans charged off

$ 1 2 $ 1 $ 3 $ 2

Recoveries

1 - - 1 1

Net loan charge-offs

$ - $ (2 ) $ (1 ) $ (2 ) $ (1 )
(a)

Included in "Accrued expense and other liabilities" on the balance sheet.

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 23

Asset Quality Statistics From Continuing Operations

(Dollars in millions)

2Q22 1Q22 4Q21 3Q21 2Q21

Net loan charge-offs

$ 44 $ 33 $ 19 $ 29 $ 22

Net loan charge-offs to average total loans

.16 % .13 % .08 % .11 % .09 %

Allowance for loan and lease losses

$ 1,099 $ 1,105 $ 1,061 $ 1,084 $ 1,220

Allowance for credit losses (a)

1,272 1,271 1,221 1,236 1,372

Allowance for loan and lease losses to period-end loans

.98 % 1.04 % 1.04 % 1.10 % 1.21 %

Allowance for credit losses to period-end loans

1.13 1.19 1.20 1.25 1.36

Allowance for loan and lease losses to nonperforming loans

256.2 251.7 233.7 195.7 175.8

Allowance for credit losses to nonperforming loans

296.5 289.5 268.9 223.1 197.7

Nonperforming loans at period end

$ 429 $ 439 $ 454 $ 554 $ 694

Nonperforming assets at period end

463 467 489 599 738

Nonperforming loans to period-end portfolio loans

.38 % .41 % .45 % .56 % .69 %

Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets

.41 .44 .48 .61 .73
(a)

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

Summary of Nonperforming Assets and Past Due Loans From Continuing Operations

(Dollars in millions)

6/30/2022 3/31/2022 12/31/2021 9/30/2021 6/30/2021

Commercial and industrial

$ 197 $ 186 $ 191 $ 253 $ 355

Real estate - commercial mortgage

35 40 44 49 66

Real estate - construction

- - - - -

Total commercial real estate loans

35 40 44 49 66

Commercial lease financing

2 3 4 5 7

Total commercial loans

234 229 239 307 428

Real estate - residential mortgage

67 73 72 93 99

Home equity loans

120 129 135 146 146

Consumer direct loans

3 4 4 4 4

Credit cards

3 3 3 3 3

Consumer indirect loans

2 1 1 1 14

Total consumer loans

195 210 215 247 266

Total nonperforming loans

429 439 454 554 694

OREO

9 8 8 8 9

Nonperforming loans held for sale

25 20 24 35 32

Other nonperforming assets

- - 3 2 3

Total nonperforming assets

$ 463 $ 467 $ 489 $ 599 $ 738

Accruing loans past due 90 days or more

41 55 68 82 74

Accruing loans past due 30 through 89 days

137 122 165 164 190

Restructured loans - accruing and nonaccruing (a)

216 219 220 270 334

Restructured loans included in nonperforming loans (a)

94 98 99 146 177

Nonperforming assets from discontinued operations - education lending business

3 4 4 4 5

Nonperforming loans to period-end portfolio loans

.38 % .41 % .45 % .56 % .69 %

Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets

.41 .44 .48 .61 .73
(a)

Restructured loans (i.e., troubled debt restructuring) 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.

Summary of Changes in Nonperforming Loans From Continuing Operations

(Dollars in millions)

2Q22 1Q22 4Q21 3Q21 2Q21

Balance at beginning of period

$ 439 $ 454 $ 554 $ 694 $ 728

Loans placed on nonaccrual status

118 87 116 116 186

Charge-offs

(59 ) (50 ) (51 ) (66 ) (74 )

Loans sold

(8 ) - (38 ) (17 ) (10 )

Payments

(35 ) (27 ) (68 ) (136 ) (92 )

Transfers to OREO

(2 ) (1 ) (1 ) (1 ) -

Loans returned to accrual status

(24 ) (24 ) (58 ) (36 ) (44 )

Balance at end of period

$ 429 $ 439 $ 454 $ 554 $ 694

KeyCorp Reports Second Quarter 2022 Profit

July 21, 2022

Page 24

Line of Business Results

(Dollars in millions)

Change 2Q22 vs.
2Q22 1Q22 4Q21 3Q21 2Q21 1Q22 2Q21

Consumer Bank

Summary of operations

Total revenue (TE)

$ 824 $ 799 $ 839 $ 870 $ 852 3.1 % (3.3 )%

Provision for credit losses

8 43 14 (38) (70) (81.4) 111.4

Noninterest expense

676 663 613 591 584 2.0 15.8

Net income (loss) attributable to Key

107 70 161 241 257 52.9 (58.4 )

Average loans and leases

40,818 38,637 37,792 39,796 40,598 5.6 .5

Average deposits

91,256 91,468 90,271 89,156 88,412 (.2) 3.2

Net loan charge-offs

23 22 22 35 34 4.5 (32.4 )

Net loan charge-offs to average total loans

.23 % .23 % .23 % .35 % .34 % - (32.4 )

Nonperforming assets at period end

$ 203 $ 217 $ 222 $ 254 $ 274 (6.5) (25.9 )

Return on average allocated equity

11.66 % 7.91 % 18.05 % 25.81 % 28.53 % 47.4 (59.1 )

Commercial Bank

Summary of operations

Total revenue (TE)

$ 844 $ 810 $ 1,028 $ 886 $ 871 4.2 % (3.1 )%

Provision for credit losses

37 41 (12) (69) (131) (9.8) 128.2

Noninterest expense

414 417 501 470 451 (.7) (8.2 )

Net income (loss) attributable to Key

315 283 449 381 432 11.3 (27.1 )

Average loans and leases

67,834 64,701 61,127 59,914 59,953 4.8 13.1

Average loans held for sale

1,016 1,323 1,962 1,190 1,341 (23.2) (24.2 )

Average deposits

54,864 57,289 59,537 56,522 54,814 (4.2) .1

Net loan charge-offs

21 11 - (6) 9 90.9 133.3

Net loan charge-offs to average total loans

.12 % .07 % - % (.04) % .06 % 71.4 100.0

Nonperforming assets at period end

$ 260 $ 250 $ 267 $ 345 $ 464 4.0 (44.0 )

Return on average allocated equity

14.16 % 13.21 % 21.54 % 18.54 % 20.69 % 7.2 (31.6 )

TE = Taxable Equivalent

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KeyCorp published this content on 21 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 July 2022 21:13:03 UTC.