KEYCORP NEW

Segment imperatives

•Solve complex client needs through a differentiated product set of banking and capital markets capabilities

•Drive targeted scale through distinct product capabilities delivered to a broad set of clients

•Utilize industry expertise and broad capabilities to build relationships with narrowly targeted client sets

Market and business overview

Building relationships and delivering complex solutions for middle market clients requires a distinctive operating model that understands their business and can provide a broad set of product capabilities. As competition for these clients intensifies, we have positioned the business to maintain and grow our competitive advantage by building targeted scale in businesses and client segments. Strong market share in businesses such as real estate loan servicing and equipment finance highlights our ability to successfully meet customer needs through targeted scale in distinct product capabilities. Clients expect us to understand every aspect of their business. Our seven industry verticals are aligned to drive targeted scale in segments where we have a breadth of industry expertise. Our business model is positioned to meet our client needs because our focus is not on being a universal bank, but rather being the right bank for our clients.

Summary of operations

•Net income attributable to Key of $1.1 billion in 2024, compared to $885 million in 2023, an increase of 23.3%, largely driven by an increase in investment banking and debt placement fees and commercial mortgage servicing income, along with lower FDIC assessment charges

•Taxable equivalent net interest income decreased in 2024 by $61 million, or 3.3%, from the prior year, primarily driven by a reduction in loan balances

•Average loan and lease balances decreased $7.3 billion in 2024, or 9.6%, driven by a decline in commercial and industrial loans

•Average deposit balances increased $3.0 billion in 2024, or 5.4%, driven by our focus on growing deposits across our commercial businesses

•Provision for credit losses decreased $152 million in 2024 compared to the prior year, resulting from reserve releases due to changes in the portfolio and economic conditions, partially offset by higher net charge-offs

•Noninterest income increased $198 million in 2024, or 13.8%, from the prior year, driven by growth in investment banking and debt placement fees and commercial mortgage servicing income

•Noninterest expense increased by $28 million in 2024, or 1.6%, from the prior year, primarily due to increases in incentive compensation and other personnel expenses, partially offset by decreases in FDIC special assessment charges and operating lease expenses