KeyCorp at Boston Conference: Strategic Growth Insights

On Thursday, 06 November 2025, KeyCorp (NYSE:KEY) shared its strategic vision at The BancAnalysts Association of Boston Conference. The company outlined its focus on organic growth and wealth management while maintaining a disciplined approach to capital allocation. Executives highlighted both opportunities and challenges, expressing optimism about future performance and shareholder returns.

Key Takeaways

• KeyCorp’s consumer bank holds $88 billion in deposits, with 80% from relationship households.
• The wealth management business targets $100 billion in assets under management by 2030.
• The company plans to exceed $100 million in share repurchases in Q4 2025.
• KeyCorp maintains a CET1 ratio of 11.8% and marked capital at 10.3%.
• Leadership focuses on organic growth and bolt-on acquisitions over large-scale M&A.

Financial Results

• Deposits and Fee Income:

- $88 billion in consumer bank deposits.

- $1 billion in annual fee income.

• Wealth Management:

- Current assets under management stand at $68 billion.

- Targeting $100 billion in AUM by 2030.

- $6 billion in additional assets from mass affluent households.

• Capital and Share Repurchase:

- CET1 ratio at 11.8%.

- Marked capital at 10.3%, with a long-term target of 9.5%-10%.

- Committed to over $100 million in share repurchases in Q4.

Operational Updates

• Consumer Banking:

- Relationship household growth is stronger in the West.

- Branch sizes are 40% larger on average.

- Workforce reduced by 1,000 employees compared to previous years.

• Wealth Management:

- 50,000 mass affluent households acquired through Key Private Client.

- Average asset value per family is $125,000.

• Lending:

- Average FICO score in the consumer portfolio is 790.

- Residential mortgage FICO scores are above 800.

- $700 million growth in specialty finance lending in the first three quarters.

Future Outlook

• Organic Growth:

- Emphasizing growth in relationship households and wealth management.

• Wealth Management Expansion:

- Plans to start 2026 with 100 more sales professionals than in January 2025.

• Capital Allocation:

- Focus on organic growth, bolt-on acquisitions, dividends, and share repurchases.

Q&A Highlights

• Competition:

- Confident in closing gaps with competitors through relationship value and client experience.

• M&A Strategy:

- High strategic and financial thresholds for depository M&A.

- Preference for organic growth and bolt-on acquisitions.

• Capital Deployment:

- Potential for accelerated share buybacks due to excess capital.

• Wealth Management KPIs:

- Focus on productivity of new hires and client engagement.

• Lending Focus:

- Prioritizing return on equity and supporting relationship clients.

In conclusion, KeyCorp’s strategic focus on organic growth and disciplined capital allocation was evident throughout the conference. For further insights, please refer to the full transcript below.

Full transcript - The BancAnalysts Association of Boston Conference:

Ruth, Conference Host: All right, I think we’re ready to start. Welcome back from the break. Thanks, everyone. We have KeyCorp up next. Key is a large regional bank with $187 billion of assets based in Cleveland, Ohio. Today, presenting for Key, we have Clark Khayat and we have Victor Alexander. Clark has been with the organization since 2012. Prior to becoming CFO, he was Chief Strategy Officer, responsible for corporate strategy, M&A, corporate and strategic investments. We also have Victor. Victor Alexander has been with the bank since he was an intern. Congratulations on that.

Victor Alexander, Head of Consumer Banking, KeyCorp: Thank you.

Ruth, Conference Host: He’s Head of Consumer Banking. Consumer Banking serves more than 3 million customers across 15 states. Prior to this role, you were doing home lending, Head of Home Lending, and you’ve also had roles at the bank doing treasury and I think probably many other roles. Thank you very much for coming to our conference. I know you’re going to make a brief presentation, and then we’ll get into Q&A.

Victor Alexander, Head of Consumer Banking, KeyCorp: I am. Yep. Thanks, Ruth. Good to see everyone. Thanks for your interest in Key and the conference today. As Ruth mentioned, I’m Victor Alexander, and I lead the consumer bank at Key. I spent 25 years with the bank, starting as that summer intern. The first third of my career was in our excellent corporate investment banking business, moved through finance, and I’ve had the privilege of leading our consumer business. I’m now just wrapping up my sixth year. Before I start, I want to reference our forward-looking statements on slide nine. These will cover my remarks as well as the question and answer portion of the presentation for both Clark and me. Let’s see. Moving to slide two. Very high-level overview. I wanted to start with a high-level overview of our consumer bank, our businesses, and our markets.

Our retail and business banking teams serve more than 2 million households and a quarter of a million small business clients who reward us with $80 billion of very attractive deposits. Our growing wealth business now manages a record $68 billion on behalf of our clients. Our footprint always attracts attention and comments, but we like the balance and the growth that it provides. Our Eastern markets are a little more affluent. 75% of that $68 billion in wealth that we manage actually comes from the Eastern part of our franchise. We also really like the growth tailwinds that are occurring in our Western markets, places like Utah, Idaho, Colorado, and the Pacific Northwest. It is an advantage to have a third of your branches in such high-growth markets. We have benefited as our relationship household growth rate is about double in the West what we see in the East.

Slide three shows the role of the consumer bank within Key. Most importantly, we are the major source of raw material for the bank: $88 billion of deposits, the most granular, highest liquidity value, lowest cost deposits that we have. The cost of this $88 billion is well inside of our overall company average. Our excellent commercial businesses can take this material and transform it into very high-quality, very high-returning middle-market client relationships. This business is an important component of their success. In addition, while we’re certainly not the largest contributor to fee income at Key, as you all know, consumer generates roughly $1 billion annually. Because most of this is in categories like cards and payments, wealth management, these fees are very stable quarter in and quarter out. Lastly, our consumer business is additive to Key’s strong credit profile. We’re a super prime lender.

We do not participate in any indirect businesses. The average FICO of our consumer portfolio today is 790. In our largest asset class, residential mortgage, it is north of 800. That formula, sizable low-cost deposits, stable fees, and solid credit performance positions the consumer bank to deliver strong returns through the cycle. Moving to slide four, Chris and I both assumed our current roles in 2020, and he is always pushing us to stay focused. Focus propels growth is something that we repeat often around Key. We really tried to incorporate this into our everyday execution in our consumer business over the last five and a half years.

Since 2020, we’ve had a more consistent focus on what I think are the most core activities of our consumer bank: growing relationship households, growing our wealth business, and taking the best care of our clients that we can day in and day out. This consistent focus has helped us execute better than we did historically. We still believe we have headroom in every one of these areas. We’re also pleased with the progress we’ve made. We have a better consumer business today than we’ve had historically. We’re growing relationship households faster. On an annual basis, we’ve more than doubled our wealth sales, which has resulted in solid net flows and enabled our assets under management to rise meaningfully along with rising markets in recent years. We’ll talk more about wealth in a few minutes. We’re also taking better care of our clients today than historically.

Internal measures of their satisfaction with our branch, digital, and contact center channels are all up double digits over the last few years. Our clients are also telling JD Power and Apple that we’re doing better as well. Now, let me be clear. We are not high-fiving each other in Cleveland about being number 11. The reality is it takes a lot of hard work to gain ground. It takes work across people, across systems, across culture. We’re pleased with our trajectory. No one wants to give up their spot to us, but we intend to keep climbing. We’ve also driven efficiencies while taking this ground. Our branch is 40% bigger on average, and we have 1,000 fewer people working in the business today than we did just a few years ago.

On slide five, we’ve talked about being a relationship bank for the entire time I worked at Key since I was that 20-year-old intern. But the reality of that was in our consumer business, we never really aligned our products and services offering to back that up. Today, we do. For us, it all starts with an active checking account. This is the anchor of a relationship household at Key. Relationship households have an active checking account and one additional product. It could be a savings or investment account, credit card, home equity line of credit, or other lending solution. And they are the most valuable component of our retail client base. You see the differences depicted on this page. Significantly greater deposit balances drive higher revenue. And these households also stay with Key longer and outperform from a credit perspective.

In 2022, we more closely aligned our value proposition, services, rates, and other benefits to reward our clients for our relationship with Key. This has helped us grow and strengthen our client base. Today, 80% of our consumer deposits are from a relationship household, up from approximately 70% pre-COVID. These households are more engaged with Key than ever before, as measured by debit and digital activity. I’m also encouraged by the growth trends within our relationship household base. We’re 200 years old as a bank. We celebrated that in April this year. Nearly a quarter, 22% of our relationship households have joined Key since 2020. Relative to our longer-tenured client base, these new clients are younger and also more likely to reside in the Western United States, the western part of our footprint I talked about earlier.

They’re also continuing our trend of outsized value from relationship households. While not yet as valuable as our longer-tenured and older clients, our new relationship households have twice the balances at Key today as non-relationship households from the same vintage. We are encouraged by the curves that we’re seeing early in our new household acquisition. I’d now like to focus on slide six on our wealth business for the remainder of my presentation this morning. We are fortunate at Key to have a really nice wealth business. Wealth is the second largest component of our fee income after investment banking. Our roots in wealth are deep, and we have the capabilities to serve clients across the wealth continuum.

From our recently launched Key Private Client initiative, which targets clients with $250,000 to $2 million of investable assets, up through our private banking business, which serves thousands of families and institutions with wealth that can be measured in the billions at the highest end. On a relative per-branch basis, we are the second largest wealth business among our peers, with the largest having done a significant wealth acquisition more than a decade ago. On seven, while we’ve had a capable wealth business for a long time, we haven’t always had a strong organic growth trajectory in this business. In the spirit of focus propels growth under Chris’s leadership, in 2020, wealth was an area we specifically selected as a distinctive growth opportunity for the consumer bank in Key. We sharpened our focus and began to execute in a more purposeful manner.

Over the past few years, we’ve added significant talent throughout the business, from senior leadership to field sales leaders to relationship managers at the tip of the spear across both our high net worth and mass affluent businesses. We built and launched a holistic mass affluent offering covering both banking and investments. We call this Key Private Client. This has been a significant deepening opportunity for us. 50,000 mass affluent households have brought $6 billion of additional assets to Key, split roughly evenly between deposits and investments. That works out to $125,000 per family. It’s been meaningful for us.

Like the rest of consumer, we increased our efforts to improve the client experience within our wealth business, which includes everything from how often our clients hear from us and what’s the intellectual content we’re providing to them on a regular basis, to the depth and breadth of our planning capabilities, to their service experience across our digital and physical channels. Lastly, we leaned into our franchise and redoubled our partnership efforts with our retail business as well as our commercial and institutional teammates. Key’s branch business is the number one feeder into wealth and has been critical to the success and growth of Key Private Client. It is also the number one referral partner into our private bank. While we’ve had phenomenal wins with our commercial partners, these are too episodic in Clark and I’s judgment.

Along with Ken and Randy, our consumer teams are working on ways to be more consistent in our execution and better capitalize on the opportunity we know exists within our commercial client base. Much like in the rest of our business, we feel like we’re just getting started and have plenty of headroom in wealth. We’ll start 2026 with 100 more sales professionals, tip of the spear producers, than we had in January 2025. Our mass affluent business continues to scale. Our new client wins, I talked about that $125,000 number on average with the first 50,000. This year, that number is closer to $175,000. We are being more impactful with every client that we’re winning. We just had a record quarter of managed money production within the mass affluent space. In fact, third quarter was a record quarter. July was a record month.

We beat that in August. We beat that in September. A record quarter with three consecutive record months. This business is still accelerating. Every month, we talk to more clients and do more plans. That sounds really simple, but that is a significant leading indicator of organic growth and happy clients. This is going to be the second consecutive year where the number of plans we do with our clients approximately doubles. Taken together, we think this is the recipe for consistent organic growth and wealth management. With constructive markets, we have set a goal of $100 billion in assets under management by 2030 for Key’s wealth business. To wrap on the final page, thank you for your time and interest in Key and our consumer bank.

We’re a valuable contributor of stable, low-cost deposits, the raw material for Key’s excellent commercial businesses, generate roughly $1 billion of fee income annually, and have a disciplined approach to credit. Together, this combination results in solid returns on capital. As we look ahead, our relationship strategy, combined with good execution, will enable consumer to deliver consistent growth at attractive returns. We will continue to organically grow relationship households, which will further the attractive funding we provide to Key. We will continue to organically grow in wealth and expect to approach $100 billion in assets under management by 2030. We will continue to make our business better for our clients and shareholders, building off the steady progress we’ve made over the last five years. I’m excited for the future of Key and our consumer franchise. Thanks for joining us, and look forward to your questions. Great.

Thank you, Victor. That was a great update. It sounds like he’s made a lot of progress in consumer bank and moving up in performance metrics. I just would like to get a sense of the competition’s invested a lot in consumer banking, and no one’s standing still. How confident are you that you can continue to close the gap? Yeah, I would say we’re more confident today than we’ve been at any time in my tenure. Funny thing about life, I think sometimes inertia is a powerful thing. The hardest part about getting momentum is kind of taking those first couple of steps and establishing that. I think we’ve done that. I think there’s no question this is a very attractive part of the banking space, the low-cost, stable.

Everyone sees the value of the raw materials that come from a consumer franchise, but that’s not new. People have been investing in it. We’ve been able to accelerate our progress kind of through that over the last five years. As we look forward, we see no reason why that can’t continue. If you think about these new households that are coming in, kind of what’s the value proposition that you think is drawing new customers? Sure. We are proud of the relationship value proposition that we built that I referenced in my comments. If you have that active checking account with Key, it all starts with that. You’re going to get better rewards on our credit card products. You’re going to get better deposit rates on our savings products. You’re going to get lower interest rates on our lending products.

You’re going to get priority routing in our contact center. We’ve tried to enable both kind of hard financial as well as soft service benefits. That’s made a big difference. The other thing that’s made a big difference, and we don’t underestimate it, is the client experience. If clients walk into our branches, they’re served by our teammates, they are consistently really satisfied with that experience. They’re increasingly satisfied with the experience they get on our digital properties. We’ve got a number of investments queued up to make sure that that continues. I just think as we continue to provide value to clients, as we continue to give them a great service experience, they stay with Key, they tell their friends and families, and we’ve been able to really grow our business consistently through that. Okay, thanks. I guess the next question is really around.

The density. Because you are in 15 states, you have a lot of branches. I think you’ve got like 942 branches. Yeah. Good memory. Yeah. The question is really around that branch density. Do you need to be top five in a market to really be able to get that conversion for the Key? Yeah. We like the density of our footprint. We like the markets that we have. We’re in 25 markets as we think about it from the states I showed on the picture. In every single one of those markets, we’re growing relationship households this year. In every single one of those markets, we grew relationship households last year. I do think it’s an advantage that we have 300 of our branches, plus or minus. I actually don’t know the number exactly, but around a third in the high-growth western part of our franchise.

We don’t need to build 50 new ones or 100 new ones to be able to participate in some of the fastest-growing economic growth areas of the country. We already have them. We just need to continue to perform better. The other thing that I think sometimes is underappreciated is that of our deposit franchise, 70% of it is in a market where we start with the top five branch position. We like the balance of our footprint, the diversity it provides, the growth that it provides. We’ve been able to see growth kind of from west to east with really outsized growth coming from our western markets. Okay, thanks. Clark, I’m going to pivot over to you. I wanted to touch on M&A. And.

I think at the conference call, Chris made some comments about being sensitive to any sort of tangible value dilution and that the focus is really on organic growth. I guess the question is really around M&A is picking up the industry. There’s been more consolidation. Is there a scenario where you would consider buying a depository institution? Yeah. I mean, maybe just to double down on the comment you made, we feel very good about the organic path. Our capital priorities haven’t changed. Very, very low down on that list is depository M&A. If I just quickly remind folks, it’s supporting our clients in organic growth. We’ve had great C&I growth in particular this year. We see that continuing. We obviously want to participate in that. I do think you’ll see us do some.

Potential acquisitions, but in what we call the bolt-on or add-on spaces, things like Kane Brothers and Pacific Crest that we’ve done in the past. We’ll continue to do those. I tend to think about those as kind of organic extensions or pseudo organic because they’re just part and parcel to the way we run our businesses. And we’re quite good at integrating those. Our dividends are dividend. I might remind folks that two years ago, I was here and asked directly if we were going to keep paying our dividends. It is a different place to be today. I am sure we’ll talk about that in a minute. We’ll keep our dividend where it is. We’ve gotten back into share repurchase. We said on the call, we do $100 million. I think we’re going to comfortably get above that here in the fourth quarter.

I think people can feel comfortable that whatever we do this quarter, as we go into 2026, we’ll exceed that kind of throughout 2026 on a quarterly basis. There are other things we can do with the capital we have. We are very lucky today to have a lot of excess capital. We will consider more buybacks faster. We’ll consider potentially doing some things on the balance sheet. Look, given the market we’re in with M&A, it’s the right question to ask. Candidly, the bar strategically is very high. If we get through that, the bar financially is exceptionally high, given Chris’s comments about tangible book value dilution. Frankly, unless we can extract some unique value out of a property, given where our multiple is, we’re not likely to win any sort of auction.

Candidly, we’re just not spending a lot of time on that right now. We’re just really focused on, I think Victor’s story is a microcosm of what we’re doing, which is let’s just run the bank better. Let’s take the opportunities that are in front of us. Let’s continue to do the best work we can to build the best bank we can. We feel really good about that. Okay, that’s great. You mentioned this just now, but you have $100 million that you’ve kind of committed for buyback in the fourth quarter. Again, kind of given the excess capital, given the valuation of the stock, I mean, really, could you do more? Yeah. Again, I think we will do more in the quarter than the $100 million. I’m pretty confident about that, given what we’ve done quarter to date.

I think the bigger question is how much more and when. We’re sitting at 11.8% CET1. We’re sitting at 10.3% marked capital. We’ve really talked much more about marked capital. And we’ve said, look, we think our kind of long-term targets are 9.5%-10%. So we’ve got clear room to get down to that kind of 9.5%. And then I think our closest peers at the end of the third quarter were kind of 9.1%, 9.2%. So we’re well above that. And we will lean into share buybacks. I can’t say sitting here today exactly how much we’re going to do or. Some big wave of that. But I think people can feel confident that they’re going to see more of that. Okay, great. Thanks. Victor, I’m going to pivot back to you. You gave a really good update on the wealth business. And.

Really good to hear about the successes that you’re having there. Can you kind of give us some of the KPIs that you have around the growing households and AUM? What are some of the kind of primary metrics that we should be looking at? Sure. In wealth, what I really sweat the team’s on is a bunch of things. They sweat themselves on stuff a lot because they don’t necessarily need me. What we really look at is we look at the number of people that we have, both new to the platform as well as the existing base of more tenured producers. We look at their productivity. On the new hires, how are they ramping? Are they ramping according to our expectations? On our kind of legacy book, how are they performing? Where we need to make changes, we do.

So far, we’ve been really pleased with both the performance of our teammates that have been on the platform for a while, as well as the ramping of our new hires. That would be in both the private banking business as well as the mass affluent business. We look at, as I mentioned, the number of plans. We look at how often we’re talking to our clients and how often we’re doing planning activities. Again, I know it just sounds incredibly simple. One of the things we’ve seen over the last few years, we’ve significantly increased how often our bankers are in front of our clients. We’ve increased how often they’re doing financial planning with them. We’ve increased the quality of the content that our chief investment office does within the private banking business.

Quality and the frequency of that content, especially down to the mass affluent sector. Historically, it’s going to sound silly. We never were generating all—we’ve got this legacy private banking business. It’s been a strong business for decades, very sophisticated. Until a couple of years ago, we never took their intellectual content down to the mass affluent space. Today we do. It makes our advisors better, and it makes our clients think more highly of Key. That’s what we’re focused on. I mean, wealth is a very desirable area and lots of competition. Many regional banks want to grow this business. What do you think is the differentiation for Key and the wealth platform versus other regional banks? Sure. I think two things. I think number one, it gets back a little bit to the footprint where we started.

We do have, by virtue of especially the eastern part of our franchise, we’ve got an older, more affluent client base. We would say we’ve got a million households that we think are qualified for Key Private Client today. I talked about the 50,000 that we’ve been able to convert. That’s great. A small end that we’ve gotten $125,000 per family from each one of those 50. As we accelerate and as we grow into this opportunity, it can be very meaningful for Key. We still think we are kind of in the early innings of the opportunity, I would say. I think the other thing that we’ve done is I was just in one of our markets yesterday. I was talking to our private client team. There was an advisor that joined us from another regional bank.

I asked him, I said, "Hey, what’s something that they did better than us? And what’s something that we did better than them?" I’ll answer both sides of that in case you’re curious. They had some better kind of middle office tech that really makes the kind of banker experience better. It’s actually tech that we’re going to deploy in the first quarter of next year. We’ll have that gap closed in the next three to four months. We feel very good about that. What he said in terms of like, "Hey, what’s been great about Key," is the partnership between the mass affluent business and the branches. We built Key Private Client from scratch. It took us a year and a half to do it.

It was a bunch of us, both from the retail business as well as the wealth business, really sweating every detail of that experience. How are we going to incent people? How are we going to staff? How are we going to align roles? What are the expectations of our branch teammates? It was built jointly. We have an incredibly strong partnership between both those organizations. That was his perspective to us: "Hey, I’m not competing internally. Referrals are flowing naturally to me. We are getting our clients in front of the right people at the right time better than he had seen previously." I think that has been an important component of how we have been able to kind of accelerate into this opportunity. We have gotten focus propels growth. We have our retail business and our wealth business incredibly focused on the mass affluent opportunity.

You have hired a lot of bankers, I think about 10% growth this year. I mean, where are you sourcing? You mentioned someone from another regional bank. Where are you sourcing these? Yeah, all the above. I’ll let Clark comment more broadly on bankers across the rest of the franchise. In our wealth business, actually, one of the top areas is our retail business. Again, back to this, we’ve created a lot of focus on wealth and some of our best. We’ve got some kind of developmental roles, but some of our best new hires are actually folks that were already productive on our platform. They know Key. They know our branches. They know our clients. They know our teammates. They’re trusted. They can come right in. We can train them up on wealth.

They’ve been able to really be added up to the platform. I would say beyond that, we’ve been successful hiring from other regionals, from RIAs, from kind of a who’s who across the board. Again, a lot of focus. Every month, we look at every new hire, how they’re ramping. So far, so good. We feel like they’ve been able to come to Key and be very productive. Okay. I’m going to go to the audience and take a couple of questions and then move on and get back to some questions with Clark. I want to go ahead. Thank you. Yeah, I think the microphone’s coming. Just a second. Thank you. A question for Victor and then a follow-up question for Clark. Victor, my question is around the $35 billion or so of loans in the consumer bank.

I know a large chunk of those are on the mortgage side, which you are running off. Can you talk a little bit more about the opportunity set to grow the other parts of the consumer loan book? My follow-up question for Clark is, you just mentioned that in addition to buybacks, there could be other things that you’re considering on the balance sheet. Can you talk about what those are and what the timeframe for that could be? Sure. Sure. Thanks for your question. Just to give you a perspective on how we think about lending in general. Number one, first and foremost, we want to be able to support our relationship clients with lending products. Today, we have a pretty full suite of lending products, everything from student lending, credit card, personal lending, mortgage, as you talked about.

That is important for us to support our clients. While the overall residential portfolio is shrinking, for those Key Private clients that still have $250,000 with the bank, if they have a home lending opportunity, we want that to be done through Key. We are really confident that we can give them a great client experience. As we think about lending overall, I would say we prioritize return on equity above all else. One of the reasons we do that is Ken and Randy are not here, but we have really strong commercial businesses that have a proven ability to take capital and monetize that very effectively into high-returning commercial relationships. That just raises the bar for us from a consumer lending perspective. That is the biggest reason we do not do any indirect businesses, right? For some people, they work.

The ROE on an indirect business where I’m not going to get any cross-sell at all is just simply not as good as what we know we can get in commercial. The same holds true for Rezi Mortgage, candidly, right? It’s a lower-returning product. If you have $250,000 with the bank, there’s enough deposits and investments there that that ROE is reasonably competitive with what we can do on the commercial side. If not, it’s a little different, right? We’re really content to, hey, let’s have a very strong credit focus. Let’s make sure we’re generating high returns on the capital that we provide. Let’s make sure if we don’t need it, that Randy and Ken can use it to help us grow the business on that side of the house. We still do see opportunities.

To the second part of your question on growth, I would say the HELOC business, in particular, home equity line of credit, is an area that we feel good about going forward. As you all know, right, home equity in America is at an all-time high. Again, our client base, back to the comments I was making earlier, skews in some of our markets, a little bit older, a little bit more affluent, more likely to be a homeowner. Many of those homeowners might have a low rate first that they do not want to touch. We think there is meaningful opportunity in the coming years, multi-year play, to kind of get a little bigger in the line of credit space than we are today.

I think the only thing I’d add to that before I answer your second question, Manan, is we’ve told Victor we want him to lend money to relationships, right? Rezi Mortgage is a hard relationship product. It’s very hard to try to acquire somebody with a mortgage and then make them a relationship. We tried that. We, frankly, didn’t do it as well as we wanted to. It’s just not where we’re going to spend time when we’ve identified the places where we think we can actually create a lot more value. You’ll likely see us break out kind of what we think that runoff portfolio will be over time. Then we can talk about the growth on the platform that we want. To your question about other things, I’d first say we are in a position today where I’m not.

Contemplating doing something on the balance sheet in lieu of doing buybacks. I think we have the opportunity to do both. The question is, does it make sense and when might it make sense to do something, either to move maybe some of those residential mortgages we do not want off the balance sheet faster or address the remaining component of our investment portfolio that just is not where it needs to be? We do not have to do either of those. It is an opportunity we have to, again, sort of pull that 15% ROTCE up and sooner. We will contemplate both of those. It will not be restructuring the balance sheet in lieu of doing buybacks. I think it is an opportunity to do both. I will take one more question in the back. Clark, can you give a capital markets update?

On the consumer side, I guess you have 2 million households. Yesterday, Bank of America said they’ve grown 3 million new customers this decade. JPMorgan’s grown 10 million new customers this decade. Looking out 5 to 10 years, do you really have the scale to compete? Thank you. Sure. Capital markets, I think, look, we’re a third of the way through the quarter, off to a solid start. I think debt issuance continues to be very strong just given the markets, although a little bit of spread widening here in the last week to 10 days. We are starting to see a little bit of the uptick we’re expecting in middle market M&A. Obviously, that’s a very important business for us. It’s been slow this year.

On the one side, I’d say we are very happy with our capital markets results year to date when the M&A component’s running in kind of about half of its normal contribution. We have seen that start to pick up. If that continues, we’ll feel very good about the quarter and going into 2026. I would say on the second part of that question, I guess my perspective is that I think both can be true. I mean, there’s banks out there that have done a nice job growing their consumer franchise. The stats that I talked about at the beginning are real, right? The last five years, we’re growing faster than we have historically. We’re winning in wealth more than we have historically. Our branches are more efficient and more productive.

Our clients are happier with us today than they were really at any point in the history of Key. We feel like we can, to Clark’s point, just keep grinding forward. I talk about kind of four or five yards at a time in our businesses. That is what we are really focused on. I see no reason for that not to be able to continue, regardless of what else is happening around us. Clark, I wanted to ask you about some topics that are kind of front and center right now. One of those is on NDFI. I know you have not been caught up in any of the issues around the fraud or bankruptcy. You do screen as having a high concentration to NDFI.

Can you just kind of talk about the, or do an overview of the portfolio, how fast it’s grown, and the quality you have of the book? Sure. One, I think everybody knows this, but worth a public reminder that we did not grow NDFI’s $12-plus billion last year. That was a reg reporting change where we tried our best to comply with the spirit of an expansion of those disclosures. Historically, it would have been $5.5 billion. It shows up now around $18 billion. We are absolutely in NDFI as it is defined today. I would tell you, we are really happy to be in those businesses, and I’ll tell you why here. I mean, one, we do not think of it as NDFI. We do not think of it in the reg reporting categories. There are many categories.

We get a lot of questions about what’s in this bucket. The short answer is, if you ask me, I will say, I don’t know what’s in that specific bucket. I’ll tell you what’s in the $18 billion. We really think about it as very dedicated examples of targeted scale for us at Key, where we have deep expertise. We’ve been in these businesses a long time. We think we’re really good at them. They are hardcore relationship businesses. Of the $18 billion, think about $7 billion as being what we call our specialty finance lending business. That is what I think is most in scope in these NDFI questions. It is lending to lenders. I’ll remind you that this is a business we’ve been in close to two decades. We’ve had literally one loss in that timeframe.

This is where we got SSFA treatment, 20% risk weighting in late 2023. This is where we did our deal with Blackstone, right? So this is a portfolio that has been scrubbed a bunch of different ways, highly structured, highly profitable. We have deposits, payments, and capital markets business with these clients. I will continue to grow that business as long as it’s available. It’s great business for us. I think we do it exceptionally well. There’s $6 billion of REITs. We think we’re an outstanding commercial real estate platform. REITs is an extension of that. That is 97% investment grade. It is 40% loan to value. It is three times fixed cost coverage. We are top of the heap in terms of equity capital markets for REITs, which is just one other example of having dedicated targeted scale there. We are going to keep doing that business.

We have about $3 billion of insurance and finance company business that is super high quality borrowers where we have deposits. In many cases, we are running their payment operations or claims operations. Again, very deep client relationships, very profitable book, very high quality. The last piece is about $1 billion of what we refer to as our Unitranch fund. This is for the benefit of our own clients and prospects. This is a way for us to compete with direct lenders. It is an off-balance sheet JV with a third party who has put in 87.5% equity. We put in 12.5%. We are the senior lender to that facility. We are going to expand that because it has gone very well. It is a very good tool in our bankers’ toolkit to retain great clients and win new relationships.

When I talk about that book, like that is four examples of what we think is outstanding, excellent business where we excel. We are going to continue to grow that. We have not grown it exceptionally. $700 million of growth in the first three quarters of this year, just below kind of our overall C&I growth. That is not because we are backing off, right? It is just because we are being selective and continuing to do deals that we think make sense. If the head of our specialty finance lending business were here today, he would tell you he has turned down more deals this year than he has ever turned down in the time he has been doing this. It is largely because he has seen the competition loosen standards, tighten spreads, and be more aggressive on deals in a way that he does not think makes sense for the bank.

We’re going to do the deals that make sense for us. We’re going to continue to lean into this business. Another question or topic that’s been in the news is the U.S. government shutdown. Has there been any impact that you can comment on, whether it’s consumer, commercial, or corporate area from the government shutdown? Yeah. Maybe I’ll hit the capital markets piece. Then Victor can talk about his consumer client base. Really, the places we look when we get to government shutdown are IPOs because the SEC needs to review things and our commercial mortgage business because Fannie and Freddie need to be open for business and FHA. There is a little bit of risk. The longer this goes on, we will likely see some deterioration in those numbers. To date, we’re not expecting it. We really haven’t seen it.

It’s sort of a marginal number. Those are the pockets where we would be concerned. I think just the broader comment, which is part of your question, Ruth, which is the longer this goes on, how much more kind of expansive effect does it have just on the economy? With respect to consumer, I would say very little impact. I think just given the nature of our footprint, there are federal government employees across the country, obviously, but it has not been a significant impact. We do have kind of the standard forbearance programs available that we bring out when things like this happen. Little impact so far. Okay. Great. Thank you for that. I think we have time for one more question. Yeah, Julie. Can you just wait for the microphone? Or if you say it, I can repeat it. Yeah.

I have a question more about QAR. KeyCorp is now almost 15% owned by Scotiabank. Can you talk about the business relationships, like lead generation or anything else between them? Yeah. The question is around our relationship with Bank of Nova Scotia as an almost 15% owner and our business relationship there flows. One, I would say, we’ve talked about this for some period of time. We are scoping out what we think the opportunities are. I’ve equated this, because this might be another question, I’ve equated this to sort of how we’re thinking about AI. The reason I use those as comparisons is you start by saying, what’s even the possibility of opportunity there? Frankly, and coincidentally, in both cases, we’ve sort of identified kind of 40-50 things we could do.

Now the work is, how do you whittle that down to two or three things that actually matter? We’re not going to do 50 things in AI. We’re not going to try to do 50 different things with Bank of Nova Scotia. I will say to date, and Victor can comment on this also, it’s not been a top two or three priority. We’ve got a lot of opportunity in front of us. We continue to sort of chop the wood on the stuff that is right in front of us sitting in the halls of our branches and buildings. We are way more focused on that than we are on what the Nova Scotia opportunities are. We do think there are probably two or three things that are meaningful over time. They continue to look like.

Us supporting their clients in the U.S. and vice versa and potentially porting some product capability that we have that maybe they do not have as much of or vice versa, right? For us, it would probably be payments supporting them. For them, it would be some of the wealth stuff that they do in Canada, maybe porting down to the U.S. More to come there, I would say. I could not give you a number that was material today on what that has happened because not much has happened. I cannot give you a scoping of what it could be. We do, again, think there is something material. We will talk about it as we move further. Clark and Victor, thank you so much for coming to Babb. We appreciate the update. Thank you so much. Thank you, Ruth. Thank you all.

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