# Key Corporate Bank summary of operations

As shown in Figure 13, Key Corporate Bank recorded net income attributable to Key of \$814 million for 2017, compared to\$628 million for 2016 and \$544 million for 2015. The 2017 increase was driven by an increase in revenue and lower provision for credit losses, but slightly offset by higher noninterest expense.

TE net interest income increased in 2017 compared to 2016. This increase is primarily due to growth in both loan and deposit balances. The balance increases are due to a full year impact of the First Niagara acquisition as well as growth in core businesses.

Noninterest income increased from 2016. The majority of the increase is related to growth in investment banking and debt placement fees, with growth in financial advisory, debt capital markets, and mortgage banking fees from our core Key franchise as well as the fourth quarter acquisition of Cain Brothers. Operating lease income and other leasing gains increased due to higher originations. Cards and payments income increased due to higher volumes in purchase and pre­paid card and merchant services. Slightly offsetting these increases is a decline in other noninterest income mostly driven by impairments and lower gains related to certain investments held by the Real Estate Capital line of business.

The provision for credit losses decreased from 2016, primarily due to lower net loan charge­offs and lower provisioning related to improving credit quality in the overall portfolio.

Noninterest expense increased from 2016. Personnel expense increased due to higher salaries, incentive compensation, benefits, and stock­based compensation expense partially related to the acquisition of Cain Brothers as well as higher performance­based compensation. Nonpersonnel expense increased due to higher operating lease expense, cards and payments processing, and other various expenses related to the acquisition of Cain Brothers.

In 2016, Key Corporate Bank’s net income attributable to Key increased from the prior year. TE net interest income increased compared to 2015, due to higher balances related to the First Niagara acquisition and growth in core businesses. Noninterest income increased due to growth in investment banking and debt placement fees, other noninterest income, and cards and payments income. The provision for credit losses increased primarily due to increased net loan charge­offs. Noninterest expense increased due to higher salaries, incentive compensation, benefits, and stock­based compensation expense largely related to the acquisition of First Niagara as well as higher performance­based compensation, higher operating lease expense, cards and payments processing, FDIC assessment, and other various expenses related to the acquisition of First Niagara.

# Figure 13. Key Corporate Bank

<table><tr><td>Year ended December 31,</td><td rowspan="2">2017</td><td rowspan="2">2016</td><td rowspan="2">2015</td><td colspan="2">Change 2017 vs. 2016</td></tr><tr><td>dollars in millions</td><td>Amount</td><td>Percent</td></tr><tr><td>SUMMARY OF OPERATIONS</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net interest income (TE)</td><td>$        1,190</td><td>$        1,049</td><td>$          886</td><td>$         141</td><td>13.4 %</td></tr><tr><td>Noninterest income</td><td>1,147</td><td>1,013</td><td>926</td><td>134</td><td>13.2</td></tr><tr><td>Total revenue (TE)</td><td>2,337</td><td>2,062</td><td>1,812</td><td>275</td><td>13.3</td></tr><tr><td>Provision for credit losses</td><td>20</td><td>127</td><td>83</td><td>(107)</td><td>(84.3)</td></tr><tr><td>Noninterest expense</td><td>1,257</td><td>1,131</td><td>988</td><td>126</td><td>11.1</td></tr><tr><td>Income (loss) before income taxes (TE)</td><td>1,060</td><td>804</td><td>741</td><td>256</td><td>31.8</td></tr><tr><td>Allocated income taxes and TE adjustments</td><td>246</td><td>178</td><td>196</td><td>68</td><td>38.2</td></tr><tr><td>Net income (loss)</td><td>814</td><td>626</td><td>545</td><td>188</td><td>30.0</td></tr><tr><td>Less: Net income (loss) attributable to noncontrolling interests</td><td>—</td><td>(2)</td><td>1</td><td>2</td><td>(100.0)</td></tr><tr><td>Net income (loss) attributable to Key</td><td>$         814</td><td>$          628</td><td>$         544</td><td>$          186</td><td>29.6 %</td></tr><tr><td>AVERAGE BALANCES</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Loans and leases</td><td>$       37,732</td><td>$       31,929</td><td>$       25,865</td><td>$        5,803</td><td>18.2 %</td></tr><tr><td>Loans held for sale</td><td>1,242</td><td>934</td><td>937</td><td>308</td><td>33.0</td></tr><tr><td>Total assets</td><td>44,521</td><td>37,801</td><td>31,541</td><td>6,720</td><td>17.8</td></tr><tr><td>Deposits</td><td>21,318</td><td>20,783</td><td>19,043</td><td>535</td><td>2.6</td></tr></table>

# ADDITIONAL KEY CORPORATE BANK DATA

<table><tr><td>Year ended December 31,</td><td colspan="2"></td><td></td><td colspan="2">Change 2017 vs. 2016</td></tr><tr><td>dollars in millions</td><td>2017</td><td>2016</td><td>2015</td><td>Amount</td><td>Percent</td></tr><tr><td>NONINTEREST INCOME</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Trust and investment services income</td><td>$          138</td><td>$         143</td><td>$          137</td><td>$           (5)</td><td>(3.5)%</td></tr><tr><td>Investment banking and debt placement fees</td><td>589</td><td>471</td><td>439</td><td>118</td><td>25.1</td></tr><tr><td>Operating lease income and other leasing gains</td><td>80</td><td>56</td><td>62</td><td>24</td><td>42.9</td></tr><tr><td>Corporate services income</td><td>156</td><td>157</td><td>155</td><td>(1)</td><td>(.6)</td></tr><tr><td>Service charges on deposit accounts</td><td>50</td><td>50</td><td>43</td><td>—</td><td>—</td></tr><tr><td>Cards and payments income</td><td>40</td><td>29</td><td>15</td><td>11</td><td>37.9</td></tr><tr><td>Payments and services income</td><td>246</td><td>236</td><td>213</td><td>10</td><td>4.2</td></tr><tr><td>Mortgage servicing fees</td><td>61</td><td>53</td><td>48</td><td>8</td><td>15.1</td></tr><tr><td>Other noninterest income</td><td>33</td><td>54</td><td>27</td><td>(21)</td><td>(38.9)</td></tr><tr><td>Total noninterest income</td><td>$       1,147</td><td>$        1,013</td><td>$          926</td><td>$         134</td><td>13.2 %</td></tr></table>

# Other Segments

Other Segments consist of Corporate Treasury, our Principal Investing unit, and various exit portfolios. Other Segments generated net income attributable to Key of \$125 million for 2017, compared to \$89 million for 2016, and \$125 million for 2015.