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KeyCorp Presentation to the
CFA Society of Cleveland
April 29, 2010
Beth E. Mooney
Vice Chair – KeyCorp
Key Community Banking
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PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995 FORWARD-LOOKING STATEMENT DISCLOSURE
This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements about Key’s financial condition, results of operations, earnings outlook, asset quality trends
and profitability. Forward-looking statements are not historical facts but instead represent only management’s current
expectations and forecasts regarding future events, many of which, by their nature, are inherently uncertain and outside
of Key’s control. Key’s actual results and financial condition may differ, possibly materially, from the anticipated results
and financial condition indicated in these forward-looking statements. Factors that could cause Key’s actual results to
differ materially from those described in the forward-looking statements can be found in Key’s Quarterly Reports on Form
10-Q for the quarters ended March 31, 2009, June 30, 2009, and September 30, 2009, and in its Annual Report on Form
10-K for the year ended December 31, 2008, each of which has been filed with the Securities and Exchange
Commission and is available on Key’s website (www.key.com) and on the Securities and Exchange Commission’s
website (www.sec.gov). Forward-looking statements are not guarantees of future performance and should not be relied
upon as representing management's views as of any subsequent date. Key does not undertake any obligation to update
the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the
forward-looking statements.
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Key Facts
– 14th largest U.S. bank-based financial services
company by asset size
– NYSE Symbol: KEY
– Assets: $95 billion
– Market Cap: $8 billion
– Headquarters: Cleveland, Ohio
– Employees: 15,700
– Banking Offices: 14 States
– Web Site: www.key.com
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Strong Franchise – Geographically Diverse
AK
WA
VT
ME
OR ID
MI NY
IN OH
UT CO
KY CT
Rocky Mountain
Great Lakes Northeast
and Northwest
Branches 367 343 304
ATMs 530 541 430
Loans (a) $10.7 $6.8 $5.8
Deposits (a) $16.2 $16.7 $15.5
Competitors Bank of America Fifth Third Citizens Bank
J.P. Morgan Chase PNC M&T Bank
U.S. Bank Huntington TD Banknorth
Wells Fargo J.P. Morgan Chase J.P. Morgan Chase
(a) Community Banking average total loans and deposits for the first quarter of 2010
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Strategic Update
First quarter 2010 loss narrows
Continued improvement in credit quality
Capital and liquidity positions remain strong
Management transition completed
Continued investment in relationship businesses
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Financial Summary ― First Quarter 2010
1Q10 1Q09
Loss from continuing operations attributable to Key common shareholders $ (.11) $(1.03)
Performance – from continuing operations
Net interest margin (TE) 3.19% 2.79%
Return on average total assets (.26) (1.87)
Capital
Tier 1 common equity (a) 7.53% 5.62%
Tier 1 risk-based capital (a) 12.96 11.22
Total risk-based capital (a) 17.11 15.18
Asset quality – from continuing operations
Allowance for credit losses to period-end loans 4.55% 2.96%
Net loan charge-offs to average loans 3.67 2.60
Allowance for loan losses to nonperforming loans 117 116
Liquidity
Loan to deposit ratio (b) 93% 115%
TE = Taxable Equivalent, EOP = End of Period
(a) Ratios are estimated.
(b) From consolidated operations, calculated as loans and loans held for sale (excluding securitized loans) to deposits (excluding deposits in foreign office)
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2010 Strategic Priorities
Return to sustainable profitability
Sustain strong reserves, capital and liquidity
Continue building a robust risk management culture
Expand and acquire client relationships
Attract and retain a capable, diverse and engaged workforce
8
Key’s Targets for Success
KEY Business KEY
KEY Metrics (a) Targets Action Plans
Model 1Q10
Improve risk profile of loan portfolio
Core funded Loan to deposit ratio (b) (c) 93% 90-100%
Improve mix and grow deposit base
Focus on relationship clients
Returning to a Exit noncore portfolios
moderate risk NCOs to average loans 3.67% 40-50 bps
profile Limit concentrations
Focus on risk-adjusted returns
• Improve funding mix
Growing high Net Interest Margin 3.19% >3.50%
• Focus on risk-adjusted returns
quality, diverse
revenue streams Noninterest income/
41.6% >40%
• Leverage Key’s total client solutions and
total revenue cross-selling capabilities
Creating Improve efficiency and effectiveness
positive $191 million $300-$375
Keyvolution cost savings Leverage technology
operating implemented million
leverage Change cost base to more variable from fixed
Execute our client insight-driven relationship
model
Executing our
Return on average assets (.26)% 1.00-1.25% Improved funding mix with lower cost core
strategies
deposits
Keyvolution savings
(a) Continuing operations, unless otherwise noted
(b) Consolidated operations
(c) Loans & loans HFS (excluding securitized loans) to deposits (excluding foreign branch)
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Diversified Business Mix
First Quarter 2010 Revenue (TE)
Regional Banking Real Estate Capital and
Retail Banking Corporate Banking Services
Business Banking 13%
Private Banking 46%
Wealth Management 6% Equipment Finance
16%
10% 9%
Institutional and Capital Markets
Victory Capital Management
Commercial Banking KeyBanc Capital Markets
Other Segments
Corporate Treasury
Community Banking Principal Investing
National Banking Exit Portfolios
Other Segments
TE = Taxable Equivalent
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Community Banking – Financial Summary
Total Revenue (TE) Average Deposits (a)
$ in millions $ in billions
$700 $60
$612 $632 $632 $629 $50.9 $52.1 $52.5 $52.1 $51.0
$599
$600 103 104 $50
103 117 8.5 9.0 8.9 8.2 7.4
109
$500
$40
14.9 14.7 13.7 12.6
$400 14.7
$30 1.8
$300 1.7 1.8 1.8 1.8
509 529 528 512 490 $20 17.9 18.6
$200 17.4 17.3 17.4
$100 $10
8.6 9.1 9.7 10.5 10.6
$0 $0
1Q09 2Q09 3Q09 4Q09 1Q10 1Q09 2Q09 3Q09 4Q09 1Q10
CDs > $100K Savings DDA
Regional Banking Commercial Banking
CDs < $100K NOW/MMDA
(a) Excludes foreign office deposits.
Noninterest Expense
$ in millions Average Loans and Leases
$600 9,500 $ in billions
$496 $491 $492 $40
$500 $468 $468 9,250
57 61 63
57 46 $31.3 $30.3 $29.1
$400 9,000 $30 $28.3 $27.8
11.3 10.6 9.8
$300 429 422 8,750 9.2 9.0
430
$20
$200 411 439 8,500
19.7 19.3 19.1 18.8
20.0
$10
$100 8,250
$0 8,000 $0
1Q09 2Q09 3Q09 4Q09 1Q10 1Q09 2Q09 3Q09 4Q09 1Q10
Regional Banking FTE Commercial Banking Regional Banking Commercial Banking
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Community Banking Model
Growing and Investing…
Leveraging Client Insight
Integrated Delivery Channels
Enhanced Sales/Service Culture
Optimizing to Maintain Efficiency and Effectiveness
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Leveraging Client Insight
Sustainable, Profitable Revenue
Growth
Acquire & Expand Client Relationships
Client Product Human Sales &
Brand Delivery
Experience Development/ Capital Service
Positioning Channels
Innovation Process
Execution
Culture
Segment Value Propositions
Client Insight
Client Needs/ Preferences/ Attitudes
Client Behavior
Local Market Conditions and Competitive Intelligence
Client Economics/ Profitability
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Integrated Delivery Channels
Branch Strategy
Branch Introduce
Branch November 2007
Integrated
Capabilities:
=
Expansion:
Market
+ Modernization:
Repair,
+ Differentiate
Branch
Strategy
Portfolio Revitalize & the Client
Approach Re-brand Experience
• Concentrate investment in • Create a look distinctly Key • Match service levels, • Reintroduce Key into the
select markets functionality & design with market in a concentrated
• Condition of outlet lifts
client transaction potential “burst”
• Align capital investment with performance
return • Leverage client insight to • Achieve management focus
customize and localize the & in-market efficiencies
• Build branch density in experience
growth markets • Optimize marketing spend
• Use technology as an
• Relative outlet share drives accelerator of momentum (e.g., • Create market awareness
client acquisition Teller21, Remote ATM,
• Increase branch density,
Desktop, etc.)
deposit market share and
• Integrate with other channels maximize revenue lift
14
Integrated Delivery Channels
Branch Expansion
128th & Thornton, Colorado North French & Transit, Western NY
Shoppes of Solon, Cleveland
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Integrated Delivery Channels
Branch Modernization
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Integrated Delivery Channels
Mobile Banking
Online Banking clients with iPhone or Blackberry
phones can:
• View accounts balances and transactions
• Make payments to existing payees
• Transfer money between Key accounts
• Locate ATMs and Branches
Introduced in Q1 2010:
• Text messaging capabilities for all clients and
phones, including:
– Mobile Alerts
– Real-time inquiries
Convenience is more than a nearby branch or ATM — it’s being able to bank wherever you are
when you want, and being convenient is still one of the top reasons why people choose their
bank. Key’s Mobile Banking is ideal for clients on the go — it allows them to locate a branch,
view account information, pay bills and transfer funds from anywhere at any time.
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Integrated Delivery Channels
Online Banking
• In Corporate Insight’s 2010 Bank Monitor Report, Key
was cited for enhancements made to its online banking
site Key.com for 2009:
• 1 GOLD MEDAL (Online Application capabilities)
• 2 SILVER MEDALS (Online Banking Account Information
and Account Transfer Capabilities)
• 2 BRONZE MEDALS (Online Banking Alerts and Help Area)
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Enhanced Sales/Service Culture
2009 BusinessWeek 2010 American Customer
Customer Service Champ Satisfaction Index Recognition
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Optimizing to Maintain Efficiency and Effectiveness
Capital optimization
– Exiting unprofitable relationships
– Differentiating return thresholds based on risk model
Focus on operating efficiency and effectiveness
– Consolidation of regions, branches, management, and headcount
Strong risk management
– Net charge-offs at 1st Qtr 2010:
Home Equity 122 bps
Commercial Banking 90 bps
– Balance risk and reward
Enhancing profitability of deposit portfolio
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Improving Net Interest Margin
First Quarter 2010 Net Interest Margin
Key = 3.19%
5.00%
Net interest margin increased by 40 bps Peers (a) = 3.55%
compared to the 1Q09 4.00%
3.00%
Core funded; loan to deposit ratio 2.00%
improved from 115% in 1st quarter 2009 to 1.00%
93% in 1st quarter 2010
0.00%
N
N
C
A
TB
I
T
N
SB
I
TB
Y
F
FC
M
ST
BB
BA
M
FH
PN
R
O
KE
M
FI
U
W
C
ZI
H
Continued benefit from improved funding
mix as maturing CDs re-price or move into
Loan to Deposit Ratio (b)
lower cost deposits 125% 115%
107%
101% 98%
100% 93%
75%
109% 101%
50% 95% 91% 88%
25%
0%
1Q09 2Q09 3Q09 4Q09 1Q10
Discontinued operations Continuing operations
(a) Peer data pulled from 1Q10 earnings releases and the peer calculation represents the median of Key and its 13 peer banks.
(b) Ending balances; loans & loans held for sale (excluding securitized loans) to deposits (excluding foreign branch)
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Deposit Repricing Opportunity
5.00% Opportunity for
continued repricing
and improved rates
4.00%
3.29% 3.32%
3.13% 3.19%
3.04%
2.84% 2.87%
3.00% 2.79% 2.77%
3.10%
2.56% 2.57% 2.56%
2.00% 2.24% 2.15%
2.03%
1.84%
1.71%
1.00%
0.00%
(a) (a) (a) (a) (a)
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10
KEY - Net Interest Margin KEY - Interest-bearing Deposits
Community Bank
$ in billions
CDs $19.2 $19.4 $20.0 $22.6 $23.2 $23.9 $23.6 $21.9 $20.0
(a) Net interest margin is adjusted to exclude the impact of certain items related to leveraged leases.
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Community Banking – Advertising
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Community Banking – Advertising
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Community Banking – Advertising
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Community Banking – Advertising
