Key Financial Results and Metrics

1Strategic Updates and Business Highlights

Capital Management: Repurchased nearly $400 million in common stock, exceeding the $300 million commitment. Plans to repurchase at least $1.3 billion in 2026.

Investment in Technology: Approximately $1 billion allocated for technology enhancements, including AI applications to improve client experiences and operational efficiencies.

Client Growth: Commercial clients up 3% and relationship households up 2% year-over-year. Wealth and investment banking businesses collectively grew by 12%.

Hiring Initiatives: Continued hiring of frontline bankers and specialized teams to support growth in targeted areas.

2Forward Guidance and Outlook

Net Interest Income (NII): Revised full-year growth guidance to 9%-10%, up from 8%-10%.

Loan Growth: Average loans expected to increase by 2%-4%, with commercial loans projected to grow by 6%-8%.

Investment Banking Fees: Anticipated mid-single-digit growth for the year, despite a forecasted decline in Q2 due to current market conditions.

3Bad News, Challenges, or Points of Concern

Deposit Trends: Average deposits decreased by 2% sequentially, with a decline in noninterest-bearing deposits. Expected to trough in early May before growth resumes.

Investment Banking Outlook: While pipelines remain strong, there is concern over the slower-than-expected recovery in middle-market M&A activity, with geopolitical uncertainties affecting deal timelines.

Credit Quality Monitoring: Increase in nonperforming assets driven by specific sectors (utilities and multifamily real estate), though not seen as systemic risks.

4Notable Q&A Insights

Client Sentiment: Mixed feelings among commercial clients due to geopolitical volatility; however, consumer sentiment remains strong with increased spending.

Loan Growth Drivers: Utilization rates have improved, with expectations for continued growth in sectors like utilities, healthcare, and commercial real estate.

Private Credit Market: Not viewed as a significant risk; however, there is ongoing scrutiny of credit quality across various sectors, particularly in oil and gas and transportation.

AI Utilization: Emphasis on leveraging AI to enhance client service and operational efficiency, particularly in wealth management. Overall, KeyCorp reported a strong Q1 2026 with significant year-over-year growth in earnings and revenue, while also navigating challenges in deposit levels and investment banking activity. The outlook remains positive with strategic investments and a focus on client growth.