KeyCorp Barclays 24th Annual Global Financial Services Conference

If we were here a year ago, we would've been talking about how many cuts there were going to be coming into 2026. We obviously haven't seen that. And if you look at the forwards this morning, now it's three pretty high probability hikes, so very different. That said, I think client activity generally remains constructive. The economy appears resilient, and I think some aspect of that is throughout 2026, we've been working with an underlying constructive economy and a bunch of uncertainty, and every month the driver of the uncertainty changes a little bit, but it's uncertainty. So this is, I think, a flavor of it, and I feel like when we talk to our clients, they're telling us, regardless of that source of uncertainty, they're getting comfortable sort of navigating this area. So the business is performing well.

Loan growth continues to be strong, albeit a little bit moderated in the second half versus the first half, but the first half was exceptionally strong. We continue to grow clients. We continue to see really good activity in pipelines and fee-based businesses. Overall, I think we're feeling quite good about the health of the business. Credit quality continues to be pretty benign to improving. Again, you can point to a lot of things that we're watching, and we are watching, as you mentioned, rates, some of the general tariff activity, the geopolitical risk. We're watching all those things, but generally speaking, it feels like the activity continues to be pretty good.

Sure. The first thing I'd say is we've been on this journey since I got to Key in 2012 of kind of some proactive modernization of core systems every year. We pick a couple, we modernize them, we make sure we're never too far behind. I think while we spend some money every year that feels like maybe not the most valuable in the moment, over time, you just have a portfolio that's generally current and you're avoiding any significant huge investments. I think that's, we've continued to do that. We'll continue to do that. The second thing I'd say is, I inherited technology and ops over the course of March to July. We sort of assessed that, and I no longer have ops. I moved all the ops to the business.

That now is aligned directly with the businesses they support, and we did that because we think at this point it's really more important to have visibility end-to-end on that client and employee journey to understand that process, to have the data that underlies that. Frankly, that's where we've seen AI be most powerful, when you have all of those components in there. You'll see us sitting here where everybody in the building's got access to Copilot and things like that, and they're becoming more efficient. But we're looking at some of these big end-to-end areas to find some real AI-driven efficiencies, and we think they're there.

I am sure we will talk about it as we go here, but from this technology seat, I am pretty optimistic about the ways we are unlocking the power of some of these tools. I think they have the potential to create some real efficiency. The question is that expense dollars out, or is it effectively just more revenue for the same dollar of expense?

Yeah. I think we are confident here on the midpoint of the overall loan guide for the year. I think if anything, we might be leaning a little higher on the commercial side. Again, we are seeing really good client relationship growth in those businesses, the industries you talked about, but also just broad-based middle market across all geographies. Again, continue to see really positive opportunities there to add clients and add good return relationships over time. It is moderating relative to again, what was a significant first half growth, but it is still quite valuable and quite strong.

Yeah. For us, we've been a leader in renewables now for a couple decades, and we're seeing the demand for power just drive a lot of utilities and renewable growth, and we're well positioned to take advantage of that, and we are. We don't have huge direct exposure to data centers, maybe $700 million-$800 million, not a lot in the broad scheme. But we don't see the power demand abating really anytime soon, unless something pretty significant happens. We feel good about how we're picking our spots there and what we're seeing. Our guidance on NII and NIM is pretty kind of rate movement agnostic right now. I think we're set up to be neutral as we have been for several quarters, and we can kind of zig and zag with those moves.

I think the thing I would've expected maybe at this point just coming into the year is a little bit less loan demand than we've seen, just because rates are not necessarily historically high, but they're certainly higher than people would've thought at the beginning of the year. That hasn't seemed to drive through the bank loan market. I think if we got three more hikes, you might start to see something slow, but we just haven't seen that yet.