KeyCorp (KEY) Q1 2023 Earnings Call Transcript

KeyCorp (NYSE:KEY.PK) Q1 2023 Earnings Conference Call April 20, 2023 10:00 AM ET

Company Participants

Chris Gorman - Chairman & Chief Executive Officer

Clark Khayat - Chief Financial Officer

Conference Call Participants

Ebrahim Poonawala - Bank of America

Scott Siefers - Piper Sandler

John Pancari - Evercore

Erika Najarian - UBS

Ken Usdin - Jefferies

Mike Mayo - Wells Fargo Securities

Manan Gosalia - Morgan Stanley

Steven Alexopoulos - JPMorgan

Gerard Cassidy - RBC

Operator

Ladies and gentlemen, good morning, and welcome to KeyCorp's First Quarter 2023 Earnings Conference Call. As a reminder, this conference is being recorded.

I would now like to turn the conference over to the Chairman and CEO, Chris Gorman. Please go ahead.

Chris Gorman

Well, good morning, and thank you for joining us for KeyCorp's First Quarter 2023 Earnings Conference Call. Joining me on the call today are Clark Khayat, our Chief Financial Officer; Don Kimble, our Vice Chairman and Chief Administrative Officer; and Mark Midkiff, our Chief Risk Officer.

On slide 2, you will find our statement on forward-looking disclosure and non-GAAP financial measures. It covers our presentation materials and comments as well as the question-and-answer segment of our call.

I am now moving to slide 3. Before I comment on our quarterly results, I want to touch on three areas that I know have been top of mind for investors, namely deposits, capital and credit quality. Key has significantly strengthened each of these areas over the last decade. We have de-risked our business and built a differentiated franchise that is well positioned for all business conditions, including the current environment.

Key's relationship-based business model provides us with strong granular deposit base and with attractive lending and fee-based opportunities. Our long-term standing strategic commitment to primacy that is serving as our client's primary bank continues to serve us well.

Over 60% of our deposit balances are from consumers, wealth clients, small businesses and escrow accounts. Over 80% of our commercial balances are core operating accounts. The diversity of our deposits extends across client type, account size, industry and geography.

Our deposits come from 3.5 million retail, small business private banking and commercial customers with 56% covered by FDIC insurance and an additional 10% of balances that are collateralized.

In the first quarter, our period-end deposits remained stable and balances from March 31 to present remain relatively unchanged. With respect to capital, Key's position remains strong with a common equity Tier 1 ratio of 9.1%. This positions us well to execute against our capital priorities, including supporting our clients.