KeyCorp First Quarter 2025 Earnings Review April 17, 2025 Chris Gorman Chairman and Chief Executive Officer Clark Khayat Chief Financial Officer 1Q25 Results Growth rates are year-over-year, unless otherwise noted +6% Noninterest Income Growth(1) +3% on a reported basis $61Bn In Assets Under Management(2) Differentiated Fee Businesses Focused on Targeted Scale +4% Client Deposit Growth +2% Net New Relationship Household Growth Driving New Relationships Focused on Primacy 11.8% Common Equity Tier 1(3), up ~1 ...

Financial Data and Key Metrics Changes - Operating earnings per share increased to 52 cents, a four cent increase from the previous quarter, indicating positive operating leverage and a strong balance sheet [11] - The quarterly operating efficiency ratio improved to 56.7%, operating return on assets rose to 1.25%, and operating return on average tangible common equity grew to 15.95% [11] - Tangible book value per share increased by 13.8% on an annualized basis [12] Business Line Data and Key Metrics Changes - Customer deposit growth was solid, with total deposits increasing by $200 million or 3%, driven by strong growth in interest-bearing money market products [21] - Total loans declined by $182 million during the quarter, influenced by strategic portfolio management actions [22] - Commercial mortgage and residential mortgage loans showed growth, offsetting some declines in other areas [22] Market Data and Key Metrics Changes - Non-interest income for the quarter was $67.2 million, with fee income as a percentage of revenue at 21% [26] - The average cost of total deposits decreased by 11 basis points to 2.03% [25] Company Strategy and Development Direction - The company continues to execute its strategic transformation through the implementation of Fulton First, focusing on talent alignment, reinvestment for growth, and operational simplification [13] - Loan growth is expected to be in the low single-digit range for the year due to strategic decisions and the current environment [17] Management's Comments on Operating Environment and Future Outlook - Management remains cautious regarding credit quality as customers navigate a volatile environment, despite improvements in asset quality metrics [18] - The company updated its rate forecast to include four 25 basis point cuts in 2025, which may impact net interest income and non-interest income [32] Other Important Information - The allowance for credit losses to total loans ratio increased to 159%, and the allowance for credit losses to non-performing loans coverage increased to 193% [30] - The company expects to incur up to $14 million of additional non-operating expenses related to Fulton First for the remainder of 2025 [29] Q&A Session Summary Question: Can you talk about loan growth and strategic offsets? - Management noted that overall pipelines increased year over year, but they remain cautious about the pull-through rate due to macro uncertainty [38] Question: What is the impact of potential rate cuts on net interest income? - A 25 basis point cut would be a headwind of about $1.7 million annually [44] Question: How is the credit portfolio being managed in light of tariffs? - Management is closely monitoring the credit portfolio for potential impacts from tariffs and government cost-cutting, particularly in the agricultural and manufacturing sectors [50][54] Question: What is the company's stance on share buybacks? - The capital strategy prioritizes organic growth and corporate initiatives before considering buybacks, although some shares were purchased in the first quarter [66] Question: How flexible is the operating expense guidance? - There is potential flexibility in timing for operating expenses, but management is comfortable with the midpoint of the expense range for now [73] Question: What is the outlook for fee income given market sensitivity? - Fee income growth has been strong, but headwinds are anticipated due to market sensitivity and interest rate volatility [78]

Core Insights - Unity Bancorp, Inc. reported a net income of $11.6 million, or $1.13 per diluted share, for Q1 2025, reflecting a 0.8% increase from the previous quarter [1][2] Financial Performance - The company achieved a return on assets (ROA) of 1.83% and a return on equity (ROE) of 15.56% [2] - Commercial and residential lending saw strong originations, with loans increasing by $84.5 million, a 3.74% rise from year-end [3] - Customer deposits (excluding brokered deposits) grew by $90.7 million, or 4.82%, quarter over quarter [3] Strategic Focus - Unity Bancorp aims to manage its balance sheet diligently, planning to fund future credit growth through deposit growth [3] - The company emphasizes disciplined credit-risk management, focusing on conservative loan-to-value and debt-service-coverage levels [3] - Unity Bancorp remains committed to supporting local economic development and providing financial services to its communities [4] Market Context - Despite capital market volatility due to tariffs, Unity Bancorp does not anticipate adverse impacts on loan demand [4] - The company is prepared to assist small business customers who may benefit from tariffs on foreign goods [4] Company Overview - Unity Bancorp, Inc. is headquartered in Clinton, New Jersey, with approximately $2.8 billion in assets and $2.2 billion in deposits [5] - Unity Bank, the wholly owned subsidiary, serves retail, corporate, and small business customers through a robust branch network in New Jersey and Pennsylvania [5]