KEYCORP NEW

(a)See the section entitled “GAAP to Non-GAAP Reconciliations,” which presents the computations of certain financial measures related to “cash efficiency.” The section includes tables that reconcile the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.

(a)See the section entitled “GAAP to Non-GAAP Reconciliations,” which presents the computations of certain financial measures related to “tangible common equity.” The section includes tables that reconcile the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.

Positive Operating Leverage

Generate positive operating leverage and a cash efficiency ratio in the range of 54% to 56%.

For the second quarter of 2024, both our operating leverage and our cash efficiency ratio compared to the year-ago period were impacted by an expected decrease in net interest income stemming from lower loan balances and higher funding costs. This decrease was slightly offset by an increase in noninterest income primarily due to trust and investment income and commercial mortgage servicing fees. Positive operating leverage remains a long-term financial target.

Moderate Risk Profile

Maintain a moderate risk profile by targeting a net loan charge-offs to average loans ratio in the range of .40% to .60% through a credit cycle.

Our net charge-offs to average loans ratio remains below our long-term target. We believe our strong risk management practices will allow us to continue supporting our clients, while maintaining our moderate risk profile, and will position Key to perform well through all business cycles.

Financial Return

A return on average tangible common equity in the range of 16% to 19%.

We remain focused on efforts to deliver sound profitable growth and value for our stakeholders. Our return on average tangible common equity compared to the year-ago period reflects the expected decrease in net interest income stemming from lower loan balances and higher funding costs. Additionally, at the end of the second quarter, our CET1 ratio improved to 10.50% and our tangible common equity to tangible assets ratio increased slightly to 5.17%, reflecting the work we have done to improve balance sheet resiliency to changes in interest rates, up or down.