KeyCorp (KEY) 2022 Q2 法說會逐字稿

Good morning, and welcome to KeyCorp's Second Quarter 2022 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.

早上好，歡迎參加 KeyCorp 的 2022 年第二季度收益電話會議。提醒一下，本次會議正在錄製中。我現在想把會議交給董事長兼首席執行官克里斯·戈爾曼。請繼續。

Thank you for joining us for KeyCorp's Second Quarter 2022 Earnings Conference Call. Joining me on the call today are Don Kimble, our Chief Financial Officer; Clark Khayat, our Chief Strategy 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.

感謝您參加 KeyCorp 的 2022 年第二季度收益電話會議。今天和我一起參加電話會議的是我們的首席財務官 Don Kimble；我們的首席戰略官 Clark Khayat；和我們的首席風險官 Mark Midkiff。在幻燈片 2 上，您會看到我們關於前瞻性披露和非公認會計原則財務指標的聲明。它涵蓋了我們的演示材料和評論以及我們電話的問答部分。我現在要轉到幻燈片 3。

This morning, we reported earnings of $504 million or $0.54 per share. We delivered positive operating leverage compared to the prior quarter and the year ago period. Our results reflect the resiliency of both our business model and our teammates as we continue to successfully navigate a rapidly changing environment. Pre-provision net revenue was up 14% from the first quarter, with a 6% increase in revenue and relatively stable expenses. Revenue was driven by growth in net interest income, which benefited from higher interest rates and strong loan growth. Importantly, we will continue to benefit from higher interest rates over the next several years as our hedges and short-term investments continue to reprice.

今天早上，我們報告了 5.04 億美元或每股 0.54 美元的收益。與上一季度和去年同期相比，我們提供了積極的經營槓桿。我們的結果反映了我們的商業模式和我們的隊友在我們繼續成功地駕馭快速變化的環境時的彈性。撥備前淨收入較一季度增長 14%，收入增長 6%，費用相對穩定。收入受到淨利息收入增長的推動，這得益於更高的利率和強勁的貸款增長。重要的是，隨著我們的對沖和短期投資繼續重新定價，未來幾年我們將繼續受益於更高的利率。

Our balance sheet also benefits from our strong stable deposit base. Approximately 60% of our deposits are in stable retail and escrow balances. In our commercial business, approximately 85% of our deposits are from core operating accounts. As I mentioned, loan growth continues to be strong. Average loans were up 5% from the last quarter and 8% from the year ago period. Adjusting for the planned runoff of PPP and the sale of our indirect auto business, average loans grew by 21% year-over-year. Our growth was driven by both our consumer and our commercial businesses.

我們的資產負債表也受益於我們強大穩定的存款基礎。我們大約 60% 的存款處於穩定的零售和託管餘額中。在我們的商業業務中，我們約 85% 的存款來自核心經營賬戶。正如我所提到的，貸款增長繼續強勁。平均貸款比上一季度增長 5%，比去年同期增長 8%。調整 PPP 的計劃徑流和我們間接汽車業務的出售，平均貸款同比增長 21%。我們的增長是由我們的消費者和商業業務共同推動的。

We continue to add clients and support our existing relationships. In our consumer business, we generated over $3.6 billion in loan originations in the quarter from consumer mortgages and Laurel Road. Let me spend just a moment on Laurel Road. We continue to see good momentum in this business, then that is despite the continuation of the federal student loan payment holiday. In May, we launched a new offering for nurses, the largest segment of the health care industry. While early, we are very encouraged with the response to our expanded offering. Nurses represent a sizable demographic looking for differentiated, personalized financial products and services, and Laurel Road has the unique opportunity to meet these needs. In the second quarter, we also announced the acquisition of GradFin, a leading loan counselor for health care professionals with a digital platform that provides fast and effective solutions for debt relief and government forgiveness programs. In June, our first month with GradFin, we held over 3,200 individual consultations for refinance and public student loan forgiveness.

我們繼續增加客戶並支持我們現有的關係。在我們的消費者業務中，我們在本季度通過消費者抵押貸款和 Laurel Road 產生了超過 36 億美元的貸款。讓我在勞雷爾路上稍等片刻。我們繼續看到這項業務的良好勢頭，儘管聯邦學生貸款支付假期仍在繼續。 5 月，我們推出了針對護士的新產品，這是醫療保健行業的最大細分市場。雖然很早，但我們對擴展產品的響應感到非常鼓舞。護士代表了一個龐大的群體，他們正在尋找差異化、個性化的金融產品和服務，而 Laurel Road 擁有滿足這些需求的獨特機會。在第二季度，我們還宣布收購 GradFin，這是一家領先的醫療保健專業貸款顧問，其數字平台可為債務減免和政府減免計劃提供快速有效的解決方案。 6 月，我們在 GradFin 的第一個月，我們就再融資和公共學生貸款減免進行了 3,200 多次個人諮詢。

This acquisition aligns well with Laurel Road and our recent expansion to include nurses. These actions enhance our commitment to accelerate growth through targeted investments in niche digital businesses. In our commercial businesses, we continue to see strong loan growth in our targeted industry verticals. Additionally, we benefited from a 100 basis point increase in C&I line utilization. Our outlook for loan growth across our franchise remains strong. Fee income this quarter reflects a slowdown in capital markets activity. Importantly, we continue to offer our clients the best solutions and execution, both on and off balance sheet. This is exactly the way our business model is designed to work.

此次收購與 Laurel Road 以及我們最近擴大到包括護士的業務非常吻合。這些行動加強了我們通過有針對性地投資於利基數字業務來加速增長的承諾。在我們的商業業務中，我們的目標垂直行業繼續看到強勁的貸款增長。此外，我們還受益於 C&I 線路利用率增加 100 個基點。我們對整個特許經營權的貸款增長前景依然強勁。本季度的費用收入反映了資本市場活動的放緩。重要的是，我們將繼續為我們的客戶提供最佳的解決方案和執行，無論是在資產負債表上還是表外。這正是我們的商業模式設計的運作方式。

In the second quarter, we raised over $36 billion in capital for our clients, retaining 22% on our balance sheet. Historically, we've retained approximately 18% on our balance sheet. Despite the slowdown in the capital markets, our pipelines remain strong, and our long-term outlook for this business is positive. We have and we will continue to invest in this business, including adding high-performing senior bankers.

在第二季度，我們為客戶籌集了超過 360 億美元的資金，在我們的資產負債表上保留了 22%。從歷史上看，我們在資產負債表上保留了大約 18%。儘管資本市場放緩，我們的管道仍然強勁，我們對該業務的長期前景是積極的。我們已經並將繼續投資這項業務，包括增加表現出色的高級銀行家。

Now let me shift to expenses. Our expense trends this quarter reflect our strong focus on managing costs, while concurrently making investments, investments in places like additional teammates, investments in digital and of course, analytics to drive future growth. In addition to investments in Laurel Road and GradFin that I mentioned earlier, we have also continued to invest in digital innovations throughout our business, including our recent expansion of our embedded banking platform with new end-to-end capabilities.

現在讓我轉向費用。我們本季度的支出趨勢反映了我們對管理成本的強烈關注，同時進行投資，對額外隊友等地方的投資，對數字的投資，當然還有分析，以推動未來的增長。除了我之前提到的對 Laurel Road 和 GradFin 的投資外，我們還繼續投資於整個業務的數字創新，包括我們最近擴展了具有新的端到端功能的嵌入式銀行平台。

We remain committed to delivering sound, profitable growth by maintaining our risk discipline. Credit quality remained strong this quarter, with net charge-offs as a percentage of average loans of 16 basis points. Nonperforming loans and criticized loans both declined this quarter. We will continue to support our clients while maintaining our moderate risk profile, which has and will continue to position the company to perform well through the entire business cycle.

我們仍然致力於通過維持我們的風險紀律來實現穩健、盈利的增長。本季度信貸質量保持強勁，淨沖銷占平均貸款的百分比為 16 個基點。本季度不良貸款和批評貸款均有所下降。我們將繼續支持我們的客戶，同時保持我們適度的風險狀況，這已經並將繼續使公司在整個商業周期中表現良好。

Our capital levels remain strong, providing us with sufficient capacity to support our clients and return capital to our shareholders. Our Board of Directors recently announced our third quarter dividend of $0.195 per share. This equates to $182 million and a dividend yield of approximately 4.5%. As is our normal practice, the Board will evaluate a dividend increase in the fourth quarter.

我們的資本水平保持強勁，為我們提供了足夠的能力來支持我們的客戶並將資本返還給我們的股東。我們的董事會最近宣布了我們第三季度每股 0.195 美元的股息。這相當於 1.82 億美元，股息收益率約為 4.5%。按照我們的常規做法，董事會將評估第四季度的股息增長情況。

I will close this morning by reaffirming our expectation that we will deliver another year of positive operating leverage in 2022. We recognize there is a great deal of economic uncertainty. Areas like inflation, higher interest rates, quantitative tightening and of course, the potential for a recession. Given the economic backdrop, we remain steadfast in our focus on serving our clients, maintaining our strong balance sheet, managing our capital and remaining disciplined in our credit underwriting. Don will cover the specifics of our full year guidance in his comments. Overall, Key delivered another solid quarter, and I remain confident in our future and our ability to create value for all of our stakeholders.

我將在今天上午結束時重申我們的預期，即我們將在 2022 年實現又一年的積極經營槓桿。我們認識到存在很大的經濟不確定性。通貨膨脹、利率上升、量化緊縮，當然還有衰退的可能性等領域。鑑於經濟背景，我們仍將堅定不移地專注於為客戶服務、維持強勁的資產負債表、管理資本並在信用承銷方面保持紀律。唐將在他的評論中介紹我們全年指導的細節。總體而言，Key 實現了又一個穩健的季度，我對我們的未來以及我們為所有利益相關者創造價值的能力充滿信心。

With that, I'd like to turn the call over to Don to provide details on the results for the quarter and our outlook for the balance of 2022. Don?

有了這個，我想把電話轉給唐，以提供有關本季度業績的詳細信息以及我們對 2022 年餘額的展望。唐？

Thanks, Chris. I'm now on Slide 5. For the second quarter, net income from continuing operations was $0.54 per common share, down $0.18 from last year and up $0.09 from the prior quarter. Our results in the current quarter reflect strong core operating performance and the resiliency of our business model as we continue to navigate through the current market conditions. Importantly, we generated positive operating leverage compared to both the prior quarter and the prior year, and remain confident in our ability to do so for the full year. As Chris mentioned, pre-provision net revenues was up 14% from the first quarter, with a 6% increase in revenue and relatively stable expenses.

謝謝，克里斯。我現在在幻燈片 5 上。第二季度，持續經營業務的淨收入為每股普通股 0.54 美元，比去年下降 0.18 美元，比上一季度增加 0.09 美元。我們在本季度的業績反映了強勁的核心運營業績和我們業務模式的彈性，因為我們繼續在當前的市場條件下導航。重要的是，與上一季度和上一年度相比，我們產生了積極的經營槓桿，並且對我們全年實現這一目標的能力充滿信心。正如克里斯所說，預提淨收入較第一季度增長 14%，收入增長 6%，支出相對穩定。

Higher net interest income was driven by strong loan growth and the way we have positioned our balance sheet to benefit from higher interest rates. Our results also reflect our focus on strong expense management and our strong risk profile.

較高的淨利息收入是由強勁的貸款增長以及我們將資產負債表定位以從較高的利率中受益的方式推動的。我們的結果還反映了我們對強大的費用管理和強大的風險狀況的關注。

Turning to Slide 6. Average loans for the quarter were $109 billion, up 8% from the year ago period and up 5% from the prior quarter. We continue to add and deepen client relationships across our franchise, which drove strong loan growth in both our commercial and consumer businesses. Commercial loans increased 4% from last quarter, reflecting broad-based growth across our industry verticals. Line utilization rates improved this quarter, increasing 100 basis points from last quarter.

轉到幻燈片 6。本季度的平均貸款為 1090 億美元，比去年同期增長 8%，比上一季度增長 5%。我們繼續在我們的特許經營中增加和深化客戶關係，這推動了我們商業和消費業務的強勁貸款增長。商業貸款比上一季度增長 4%，反映了我們垂直行業的廣泛增長。本季度生產線利用率有所提高，比上一季度增加了 100 個基點。

Our consumer businesses continued its strong performance as we saw residential real estate originations of $3.2 billion, resulting in an increase in balances of 13% from last quarter. Consistent with our focus on the healthcare segment, approximately 1/3 of our consumer mortgage originations were to health care professionals. Laurel Road originated $445 million of loans this quarter despite the ongoing federal student loan payment holiday. PPP loan balances were $658 million on average this quarter compared to $7.5 billion last year and $1.2 billion last quarter. If we adjust for the sale of the indirect auto portfolio last year as well as the impact of PPP, our core loans were up year-over-year by approximately $19 billion on average or 21%.

我們的消費業務繼續保持強勁表現，因為我們看到住宅房地產的發起額為 32 億美元，導致餘額比上一季度增長 13%。與我們對醫療保健領域的關註一致，我們大約 1/3 的消費者抵押貸款是針對醫療保健專業人士的。儘管聯邦學生貸款還款假期持續進行，Laurel Road 本季度仍發放了 4.45 億美元的貸款。本季度 PPP 貸款餘額平均為 6.58 億美元，而去年為 75 億美元，上一季度為 12 億美元。如果我們根據去年間接汽車投資組合的銷售以及 PPP 的影響進行調整，我們的核心貸款平均同比增長約 190 億美元或 21%。

Continuing on to Slide 7. Average deposits totaled $147 billion for the second quarter of 2022, up $3 billion or 2% compared to the year ago period and down $3 billion or 2% compared to the prior quarter. Year-over-year, we saw a broad-based growth in consumer and commercial relationships, including higher commercial escrow and retail deposits, partially offset by the expected continued decline in time deposits. The decline from the prior quarter reflects seasonal commercial outflows, including annual tax payments as well as lower public sector deposits related to stimulus funds. Our cost of interest-bearing deposits only increased 2 basis points from the prior quarter. We continue to have a strong, stable core deposit base, with consumer deposits accounting for approximately 60% of our total deposit mix. In addition, 85% of our commercial deposits are from core operating accounts.

繼續幻燈片 7。2022 年第二季度的平均存款總額為 1470 億美元，比去年同期增加 30 億美元或 2%，與上一季度相比下降 30 億美元或 2%。與去年同期相比，我們看到消費者和商業關係的廣泛增長，包括更高的商業託管和零售存款，部分被預期的定期存款持續下降所抵消。與上一季度相比的下降反映了季節性商業流出，包括年度納稅以及與刺激基金相關的公共部門存款減少。我們的有息存款成本僅比上一季度增加了 2 個基點。我們繼續擁有強大、穩定的核心存款基礎，消費存款約占我們總存款組合的 60%。此外，我們 85% 的商業存款來自核心經營賬戶。

Turning to Slide 8. Taxable equivalent net interest income was $1.1 billion for the second quarter compared to $1.02 billion in both the year ago period and the prior quarter. Our net interest margin was 2.61% for the second quarter compared to 2.52% for the same period last year and 2.46% for the prior quarter. Year-over-year and quarter-over-quarter, both net interest income and net interest margin benefited from higher earning asset balances and a favorable balance sheet mix as well as the benefit from higher interest rates. Quarter-over-quarter net interest income also benefited from 1 additional day in the quarter. Both net interest income and the net interest margin reflects the lower loan fees related to PPP loan forgiveness. The current quarter reflected $14 million of net interest income from PPP, down from $21 million in the prior quarter and $62 million in the second quarter of 2021.

轉到幻燈片 8。第二季度的應稅等值淨利息收入為 11 億美元，而去年同期和上一季度均為 10.2 億美元。我們第二季度的淨息差為 2.61%，而去年同期為 2.52%，上一季度為 2.46%。同比和環比來看，淨利息收入和淨息差均受益於較高的收益資產餘額和有利的資產負債表組合以及較高的利率。季度環比淨利息收入也受益於本季度增加的 1 天。淨利息收入和淨息差都反映了與 PPP 貸款減免相關的較低貸款費用。本季度反映了 1400 萬美元的 PPP 淨利息收入，低於上一季度的 2100 萬美元和 2021 年第二季度的 6200 萬美元。

Included in the appendix is additional detail on our investment portfolio and asset liability position. As Chris mentioned, we have significant upside to higher interest rates over the next several years. For example, if we were to reprice our existing $9.5 billion in short-term treasuries and $27 billion of swaps to today's interest rates, we would have an annualized net interest income benefit of over $700 million.

附錄中包含有關我們投資組合和資產負債狀況的更多詳細信息。正如克里斯所提到的，我們在未來幾年內對更高的利率有很大的好處。例如，如果我們將現有的 95 億美元短期國債和 270 億美元的掉期重新定價為今天的利率，我們將獲得超過 7 億美元的年化淨利息收入收益。

Moving to Slide 9. Noninterest income was $688 million for the second quarter of 2022 compared to $750 million for the year ago period and $676 million in the first quarter. As we mentioned in our mid-quarter update last month, our fee income continues to be impacted by the slowdown in capital markets. Investment banking and debt placement fees were $149 million for the quarter, down $14 million from the first quarter. Compared to the prior period, offsetting the decline in investment banking fees was an increase of $15 million in the other income, mostly related to larger negative market-related adjustments in the prior quarter.

轉到幻燈片 9。2022 年第二季度的非利息收入為 6.88 億美元，而去年同期為 7.5 億美元，第一季度為 6.76 億美元。正如我們在上個月的季度中期更新中提到的，我們的費用收入繼續受到資本市場放緩的影響。本季度投資銀行業務和債務配售費用為 1.49 億美元，比第一季度減少 1400 萬美元。與上一期相比，抵消投資銀行費用下降的是其他收入增加了 1500 萬美元，主要與上一季度較大的與市場相關的負面調整有關。

Commercial mortgage servicing fees also increased related to elevated prepayment fees. Year-over-year, in addition to lower investment banking fees, cards and payments income was $28 million lower, primarily driven by lower prepaid card revenue, which was partially offset by core growth. Consumer mortgage income was also lower, reflecting higher balance sheet retention and lower gain on sale margins.

商業抵押貸款服務費也因提前還款費增加而增加。與去年同期相比，除了投資銀行費用降低外，信用卡和支付收入也減少了 2800 萬美元，這主要是由於預付卡收入減少，這部分被核心增長所抵消。消費者抵押貸款收入也較低，反映出資產負債表保留率較高和銷售利潤率收益較低。

Strength in our corporate services income partially offset these declines.

我們企業服務收入的強勁部分抵消了這些下降。

I'm now on Slide 10. Total noninterest expense for the quarter was $1.1 billion, relatively stable with both last year and the last quarter. Compared with the year ago quarter, our expenses are up $2 million. Personnel expenses reflect lower production-related incentives and stock-based compensation, offset by higher salaries, including the impact of our direct investments into the business. On the nonpersonnel side, other expense increased $8 million and computer processing expense increased $7 million. Compared to the prior quarter, noninterest expense is up $8 million. Other expense was elevated, reflecting charges for lease terminations, higher travel line entertainment and FDIC assessments. We also saw increases in marketing expense and net occupancy, which were more than offset from lower personnel costs reflecting lower production-related incentives and stock-based compensation and seasonally higher -- excuse me, seasonally lower employee benefit expense.

我現在在幻燈片 10 上。本季度的總非利息支出為 11 億美元，與去年和上一季度相比相對穩定。與去年同期相比，我們的開支增加了 200 萬美元。人事費用反映了較低的與生產相關的激勵措施和基於股票的薪酬，但被較高的工資所抵消，包括我們對業務的直接投資的影響。在非人事方面，其他費用增加了 800 萬美元，計算機處理費用增加了 700 萬美元。與上一季度相比，非利息支出增加了 800 萬美元。其他費用增加，反映了租賃終止、更高的旅遊線路娛樂和 FDIC 評估的費用。我們還看到營銷費用和淨入住率的增加，這被較低的人員成本所抵消，這反映出與生產相關的激勵措施和基於股票的薪酬較低以及季節性較高——對不起，季節性較低的員工福利費用。

Moving to Slide 11. Overall credit quality remained strong. For the second quarter, net charge-offs were $44 million or 16 basis points of average loans. Nonperforming loans were $429 million this quarter or 38 basis points of period-end loans, a decline of $10 million from the prior quarter. Additionally, criticized loans declined and delinquencies were relatively stable quarter-over-quarter. Our allowance for credit losses remained stable with last quarter. Keep in mind, we added Tier 1 our reserves in the first quarter, reflecting our expectation for a slowing economy. The reserve level is based on our continued strong credit metrics as well as our outlook for the overall economy.

轉到幻燈片 11。整體信用質量保持強勁。第二季度，淨沖銷為 4400 萬美元或平均貸款的 16 個基點。本季度不良貸款為 4.29 億美元，或期末貸款 38 個基點，比上一季度減少 1000 萬美元。此外，受批評的貸款下降，拖欠率環比相對穩定。我們的信用損失準備與上一季度保持穩定。請記住，我們在第一季度增加了一級儲備，反映了我們對經濟放緩的預期。儲備水平基於我們持續強勁的信貸指標以及我們對整體經濟的展望。

Now on to Slide 12. We ended the second quarter with a common equity Tier 1 ratio of 9.2%, within our targeted range of 9% to 9.5%. This provides us with sufficient capacity to continue to support our customers and their borrowing needs and return capital to our shareholders. We continue to manage our capital consistent with our capital priorities of: first, supporting organic growth in our business. In this quarter, we certainly saw a strong loan growth across our franchise. Second, paying dividends; and third, repurchasing shares. As Chris said, our Board of Directors just approved a quarterly common dividend of $0.195 per share for the third quarter. As is our normal practice, the Board will evaluate a dividend increase in the fourth quarter.

現在轉到幻燈片 12。我們在第二季度末的普通股一級比率為 9.2%，在我們 9% 至 9.5% 的目標範圍內。這為我們提供了足夠的能力來繼續支持我們的客戶及其借貸需求並將資本返還給我們的股東。我們繼續按照我們的資本優先事項管理我們的資本：首先，支持我們業務的有機增長。在本季度，我們當然看到整個特許經營權的貸款增長強勁。二、分紅；三是回購股份。正如克里斯所說，我們的董事會剛剛批准了第三季度每股 0.195 美元的季度普通股息。按照我們的常規做法，董事會將評估第四季度的股息增長情況。

On Slide 13 is our full year 2022 outlook. The guidance is relative to our full year 2021 results. To make comparison easier, we provided both our prior guidance and our updated outlook, which is shown on the right-hand side of the slide. Using the midpoints of our guidance ranges, would support Chris' comments about delivering another year of positive operating leverage in 2022. Average loans will be up between 9% and 11%. This is on a reported basis. Excluding PPP and the impact of the sale of our indirect auto business last year, average loans will be up closer to 20%. We expect average deposits to be up 1% to 3%. Net interest income is expected to be up between 10% and 12%, reflecting growth in average loan balances and higher interest rates, partially offset by lower fees from PPP forgiveness.

幻燈片 13 是我們對 2022 年全年的展望。該指導與我們的 2021 年全年業績相關。為了便於比較，我們提供了之前的指導和更新後的展望，如幻燈片右側所示。使用我們指導範圍的中點，將支持克里斯關於在 2022 年實現又一年的正經營槓桿的評論。平均貸款將增長 9% 至 11%。這是在報告的基礎上。剔除購買力平價和去年出售間接汽車業務的影響，平均貸款將增長接近 20%。我們預計平均存款將增長 1% 至 3%。淨利息收入預計將增長 10% 至 12%，反映了平均貸款餘額的增長和更高的利率，部分被 PPP 寬恕的較低費用所抵消。

Our guidance is based on the forward curve, assuming a Fed funds rate of 3.5% by the end of 2022. Noninterest income will be down between 10% and 12%. This reflects the slowdown in the capital markets and lower investment banking revenue as well as lower prepaid card fees related to the government support program and the step down in market-related adjustments relative to year ago period. We expect noninterest expense to be down between 2% and 4%, reflecting lower production-related incentives and our continued focus on strong expense management.

我們的指導基於遠期曲線，假設到 2022 年底聯邦基金利率為 3.5%。非利息收入將下降 10% 至 12%。這反映了資本市場的放緩和投資銀行收入的下降，以及與政府支持計劃相關的預付卡費用下降以及與去年同期相比市場相關調整的減少。我們預計非利息費用將下降 2% 至 4%，這反映了與生產相關的激勵措施減少以及我們繼續專注於強大的費用管理。

Included in our outlook are our ongoing investments in our business. For the year, we expect credit quality to remain strong and net charge-offs to be in the range of 15 to 25 basis points. Our guidance for our GAAP tax rate is approximately 19%. Following on the bottom of -- finally, on the -- shown on the bottom of the slide are our long-term targets, which remain unchanged. We expect to continue to make progress on these targets by maintaining our moderate risk profile and improving our productivity and efficiency, which will drive returns. Overall, it was a solid quarter, and we remain confident in our ability to grow and deliver on our commitments.

我們的展望中包括我們對業務的持續投資。今年，我們預計信貸質量將保持強勁，淨沖銷將在 15 至 25 個基點之間。我們對 GAAP 稅率的指導約為 19%。在幻燈片底部顯示的 - 最後，在 - 顯示的是我們的長期目標，這些目標保持不變。我們希望通過保持適度的風險狀況並提高我們的生產力和效率來繼續在這些目標上取得進展，這將推動回報。總體而言，這是一個穩健的季度，我們對我們的增長和兌現承諾的能力仍然充滿信心。

With that, I'll now turn the call back to the operator for instructions for the Q&A portion of our call. Operator?

有了這個，我現在將電話轉回接線員，以獲取我們電話問答部分的說明。操作員？

(Operator Instructions) Our first question comes from the line of Ebrhim-Poonawala, Bank of America.

（操作員說明）我們的第一個問題來自美國銀行的 Ebrhim-Poonawala。

I guess maybe first question, Don, I just wanted to go back to your comments around interest rate risk management and the securities book, looking at the slide in the Appendix 17. Just talk to us when you talk about the $700 million upside from repricing; one, what part of the core is that sensitive to; and second, if interest rates run well over in the next 3 to 6 months, is there a way to capture that NII upside?

我想也許是第一個問題，Don，我只是想回到您關於利率風險管理和證券書籍的評論，查看附錄 17 中的幻燈片。當您談到重新定價帶來的 7 億美元上行空間時，請與我們交談;一、對內核的哪個部分敏感；其次，如果利率在未來 3 到 6 個月內運行良好，有沒有辦法抓住 NII 的上行空間？

That's a great question. As far as the impact, I'm talking about $9.5 billion of our investment portfolio, which is in our short-term treasuries. And that's just repricing those securities at basically a 2-year yield on the assets. So it's picking up over 200 basis points on that $9.5 billion. The other piece would be to reprice our swap book, which is a little over $27 billion, and that has an average life of 2.5 years. And just repricing that, combined with the short-term treasuries, would yield over $700 million in run rate benefit.

這是一個很好的問題。就影響而言，我說的是我們投資組合中的 95 億美元，這些投資組合在我們的短期國債中。這只是將這些證券重新定價為資產的 2 年收益率。因此，它在這 95 億美元上上漲了 200 多個基點。另一部分是重新定價我們的掉期賬簿，它略高於 270 億美元，平均壽命為 2.5 年。只需重新定價，再加上短期國債，就會產生超過 7 億美元的運行率收益。

As far as capturing that earlier, we'll always take a look to see how we can, and we've done some things such as forward starting swaps and other things to position the portfolio to start to benefit from that in earlier quarters. But we feel good about how we're positioned and with the opportunity to realize that over the next couple of years.

至於更早地捕捉到這一點，我們將始終看看我們如何能夠做到這一點，並且我們已經做了一些事情，例如遠期開始掉期和其他事情，以使投資組合在早期幾個季度開始從中受益。但我們對自己的定位感到滿意，並且有機會在未來幾年內實現這一點。

Got it. and I guess just a separate question on the outlook for loan growth. Obviously, seems like you're not seeing any real signs of slowdown. Just talk to us in terms of how you're balancing customer demand, capital market stuff on the balance sheet versus the risk of a downturn and maybe we enter the recession over the next 6 to 12 months, and how you're thinking about credit quality and just tightening the underwriting book?

知道了。我想這只是一個關於貸款增長前景的單獨問題。顯然，您似乎沒有看到任何真正的放緩跡象。只需與我們談談您如何平衡客戶需求、資產負債表上的資本市場因素與經濟低迷的風險，也許我們將在未來 6 到 12 個月內進入衰退，以及您對信貸的看法質量和只是收緊承銷書？

Sure,Ebrahim. Obviously, the time to prepare for any kind of a downturn is long before the downturn. And so if you go back, over the last 10 years, we have been derisking Key. And if you look in areas like, for example, housing and gateway cities, we've been dialing that back for some period of time. The actions that we've taken more recently, of course, is we exited indirect auto last year. We had a $3.3 billion book that we exited. And then we are constantly looking at our portfolio, any place that there's leverage we focus intently on. And we focus on certain places where we think there's been a run-up in asset values.

當然，易卜拉欣。顯然，為任何類型的衰退做準備的時間早在衰退之前。所以如果你回顧過去，在過去的 10 年裡，我們一直在貶低 Key。如果您查看例如住房和門戶城市等領域，我們已經將其撥回了一段時間。當然，我們最近採取的行動是我們去年退出了間接汽車。我們退出了一本價值 33 億美元的書。然後我們一直在關注我們的投資組合，任何有我們關注的槓桿的地方。我們專注於我們認為資產價值上漲的某些地方。

So for example, we've been dialing back loan-to-value percentages in places like the West. That kind of gives you an idea. The notion of what goes on our balance sheet and what we distribute, we do what's best for our clients. And when you get into markets such as we have right now where there's dislocation, that's obviously an opportunity, and we went from about 18% typically on our balance sheet up to 22%. And obviously, 4% of $36 billion is a lot.

例如，我們一直在回撥西方等地的貸款價值百分比。那種給你一個想法。我們資產負債表上的內容和我們分配的內容的概念，我們為客戶做最好的事情。當你進入像我們現在這樣錯位的市場時，這顯然是一個機會，我們從資產負債表上通常的 18% 上升到 22%。顯然，360 億美元中的 4% 是很多。

Our next question comes from the line of Ken Usdin, Jefferies.

我們的下一個問題來自 Jefferies 的 Ken Usdin。

I just wanted to follow up on the capital market side. So obviously, a tough market environment to execute, obviously, you're talking still about strong pipeline. So can you just talk about just how do you get a sense of what the revenue outlook looks like from here? And you obviously did some adjustments on the cost side as a result as well. How much flexibility do you see on that side as well?

我只是想在資本市場方面跟進。所以很明顯，一個艱難的市場環境來執行，很明顯，你仍然在談論強大的管道。那麼，您能否談談您如何從這裡了解收入前景？因此，您顯然也在成本方面進行了一些調整。您在這方面也看到了多大的靈活性？

Sure, Ken. Well, one of the things we really like about the business is it is a variable cost business, and you saw that reflected in our expense numbers. In terms of the trajectory of the business, the pipelines, with the exception of equity, as you can well imagine, remains stronger this year than they did at this time last year. Having said that, the real challenge is going to be what is the actual yield. And as you think about, for example, the M&A market, there's a disequilibrium right now between publicly-traded companies and where these private companies are being priced, and there's a bit of price discovery. I think it's going to take a while for that to shake out. But in my experience, it does shake out.

當然，肯。好吧，我們真正喜歡該業務的一件事是它是一項可變成本業務，您可以在我們的費用數字中看到這一點。就業務發展軌跡而言，正如您可以想像的那樣，除了股權之外，今年的管道仍然比去年這個時候更強勁。話雖如此，真正的挑戰將是實際產量是多少。例如，當您考慮併購市場時，目前上市公司與這些私營公司的定價位置之間存在不平衡，並且存在一些價格發現。我認為這需要一段時間才能擺脫。但根據我的經驗，它確實會動搖。

And so I think the back half, given -- if we can get some cooperation from the markets, I think the back half will generate some momentum. The other thing I will share with you about this business, and you've been following us for a long time, this is a business that we believe in and we'll continue to invest in. And it's been challenging, frankly, to be out in the hiring market in this ride up in the last couple of years. And so you'll see us invest in this business and hiring more people in sort of a flat or down market than we have in the past. Thanks for your question.

所以我認為後半部分，如果我們能從市場上得到一些合作，我認為後半部分會產生一些動力。關於這項業務，我將與您分享另一件事，您已經關注我們很長時間了，這是我們相信並且我們將繼續投資的業務。坦率地說，成為在過去的幾年裡，在招聘市場上出現了這種情況。因此，您會看到我們投資這項業務，並在某種平坦或低迷的市場中僱用比過去更多的人。謝謝你的問題。

Got it. And 1 follow-up, if I may. The starting point here you had -- interest-bearing deposit cost was really excellent. Can you just talk about how you're expecting that to traject as, obviously, we get into the media part of the magnitude of rate raises?

知道了。如果可以的話，還有 1 次跟進。你的起點——有息存款成本非常好。你能談談你對它的預期軌跡嗎？顯然，我們進入了加息幅度的媒體部分？

Sure, Ken, that you're right that the starting point here that we haven't seen a lot of pressure on deposit rates. And so we've got a very low beta for the quarter as a 2-basis-point increase in and average interest-bearing deposit costs compared to about a 60-basis-point increase in the LIBOR would suggest about a 3.5% to 4% deposit beta. We think the incremental betas will increase from here going forward. And by the end of the year, as we talked about in the last call, we do expect that incremental beta in the -- towards the end of the year to be closer to that 30% range that -- so that's really our expectations. We'll start to see more customer changes and more competition for deposit rates going forward.

當然，肯，你是對的，我們沒有看到存款利率面臨很大壓力。因此，我們本季度的貝塔係數非常低，因為與 LIBOR 增加約 60 個基點相比，平均計息存款成本增加 2 個基點，這意味著約 3.5% 至 4 % 存款測試版。我們認為增量 beta 將從這裡開始增加。到今年年底，正如我們在上次電話會議中談到的那樣，我們確實預計到年底的增量測試版將接近 30% 的範圍，所以這確實是我們的預期。我們將開始看到更多的客戶變化和更多的存款利率競爭。

And our next question is from the line of Steven Alexopoulos, JP Morgan.

我們的下一個問題來自摩根大通的 Steven Alexopoulos。

So looking at the updated guidance and specifically I'm looking at the 9% to 11% loan growth and 1% to 3% decline in deposits, which is a pretty wide mismatch, how do you plan to fund loan growth beyond 2022? And at what loan-to-deposit ratio do you need to start fully funding loan growth 1 for 1 with deposits?

因此，查看更新後的指導，特別是我看到 9% 至 11% 的貸款增長和 1% 至 3% 的存款下降，這是一個相當廣泛的不匹配，您計劃如何為 2022 年以後的貸款增長提供資金？您需要以多大的貸存比率開始以存款為 1 比 1 的貸款增長提供全部資金？

Steve, this is Don. And as far as the loan growth, you're right, the updated guidance is 9% to 11%. Deposits are expected to be up 1% to 3% year-over-year. That implies relatively stable deposits through the rest of the year. We do have some investment security maturities. We also will tap the wholesale market as far as funding that one of the benefits of originating residential real estate loans adds to our capacity as far as borrowing at the home loan and we can do that in a cost-effective way. Loan-to-deposit ratios were currently below 80% on our balance sheet. Typically, we would target between 90% and 95% loan-to-deposit ratio. So we've got plenty of room to work through that. I would say that we'll continue to monitor this.

史蒂夫，這是唐。就貸款增長而言，你是對的，更新後的指導是 9% 到 11%。存款預計將同比增長 1% 至 3%。這意味著在今年剩餘時間裡存款相對穩定。我們確實有一些投資證券到期。我們還將利用批發市場為發起住宅房地產貸款的好處之一增加我們在房屋貸款借款方面的能力提供資金，我們可以以具有成本效益的方式做到這一點。我們資產負債表上的貸存比率目前低於 80%。通常，我們的目標是貸存比率在 90% 到 95% 之間。所以我們有足夠的空間來解決這個問題。我會說我們將繼續對此進行監控。

But as Chris has highlighted a couple of times, we want to support our customers. And in these markets, we're going to see more customer demand for loans than we are probably going to see for capital markets opportunities. And so we'll continue to see that. We could see that reverse at some point in time. And help alleviate some of the pressure on loan growth overall.

但正如 Chris 多次強調的那樣，我們希望支持我們的客戶。在這些市場中，我們將看到更多的客戶對貸款的需求，而不是我們可能看到的資本市場機會。因此，我們將繼續看到這一點。我們可以在某個時間點看到這種逆轉。並有助於緩解整體貸款增長的一些壓力。

Okay. That's helpful. Don, how do we think about this? So at some point, you'll reach a loan-to-deposit ratio where you need to be more competitive on deposits. And I heard your response to Ken's question, you think you'll be at 30% or so loan deposit bay by end of this year. But if we keep moving it forward, what do you think is the through-the-cycle deposit beta? And Chris, just given your commentary that you feel good that NIM higher rates are going to benefit you long term, do you think your loan beta can stay consistently above the incremental deposit beta as we move forward beyond 2022?

好的。這很有幫助。唐，我們如何看待這個問題？因此，在某些時候，您將達到一個貸款與存款比率，您需要在存款方面更具競爭力。我聽到你對肯的問題的回答，你認為到今年年底你的貸款存款利率將達到 30% 左右。但是，如果我們繼續向前推進，您認為全週期存款測試版是什麼？克里斯，剛剛給出您的評論，您認為較高的 NIM 利率將使您長期受益，您認為隨著我們在 2022 年之後的發展，您的貸款貝塔值能否始終保持在增量存款貝塔值之上？

I think it can. And the reason I said I think, as we go into an inevitable downturn and clearly, the economy is slowing, I think you're going to see sort of a repricing of risk, and I think we'll be in a good position with the relationships that we have to garner that. And so I think the answer to your question is, I think it will.

我認為可以。我說的原因是我認為，隨著我們不可避免地陷入低迷，經濟正在放緩，我認為你會看到風險重新定價，我認為我們將處於有利地位我們必須獲得的關係。所以我認為你的問題的答案是，我認為會的。

And then on the deposit side as well, historically, we would have had a deposit beta of around 40% to 45%. And I would say that our deposit mix is much different today than what it was during the last rate increase cycle. Then on the consumer side, we're very focused on core primacy accounts or operating accounts for the consumer as opposed to historically we might have been more focused on promotional money market type of products and programs. And so we should see less interest rate sensitivity there. On the commercial side, we're seeing now 85% of our deposits are in core operating accounts, and that's probably up 5 to 10 points from what it was just 3 years ago.

然後在存款方面，從歷史上看，我們的存款貝塔係數應該在 40% 到 45% 左右。我想說的是，我們今天的存款組合與上一個加息週期的存款組合大不相同。然後在消費者方面，我們非常關注核心首要賬戶或消費者的運營賬戶，而不是過去我們可能更關注促銷貨幣市場類型的產品和計劃。因此，我們應該看到那裡的利率敏感性降低。在商業方面，我們現在看到我們 85% 的存款都在核心運營賬戶中，這可能比 3 年前增加了 5 到 10 個百分點。

So that mix should be helpful for us to continue to manage that beta down longer term compared to what the historic levels were for us. And so we will probably drift above that 30% level, but I think we'll be well below that 40% to 45% level that we were historically.

因此，與我們的歷史水平相比，這種組合應該有助於我們繼續長期控制該測試版。因此，我們可能會超過 30% 的水平，但我認為我們將遠低於歷史上的 40% 到 45% 的水平。

Okay. And Don, if I could squeeze 1 more in. So the 85% of commercial deposits that are operating accounts, is the implication from that, that we shouldn't expect much of a mix shift out of noninterest-bearing? Is that the read-through from that?

好的。唐，如果我能再擠入 1 筆。那麼 85% 的商業存款是營運賬戶，這是否意味著我們不應該期望從無息賬戶中轉移出太多的組合？那是從那里通讀的嗎？

Well, we'll see some shift there just because of the impact of the higher rates and earnings crediting rate that we provide to help manage fees. And so as rates go up, you might see less of a need to keep some of the funds there and they might look to put some of those in other interest-bearing categories, but it still does imply that we'll see less shift than what we would have historically just because of the higher level of operating account balances.

好吧，由於我們為幫助管理費用而提供的更高利率和收益計入利率的影響，我們將看到那裡的一些轉變。因此，隨著利率上升，您可能會發現將一些資金留在那裡的必要性降低，他們可能會考慮將其中一些資金放在其他有息類別中，但這仍然意味著我們將看到更少的轉變由於經營賬戶餘額較高，我們在歷史上會擁有什麼。

Our next question comes from the line of Erika Najarian, UBS.

我們的下一個問題來自瑞銀的 Erika Najarian。

My first question is on credit quality, which is clearly pristine currently. Chris, you said to Ebrahim that the time to prepare for a downturn is well before the downturn hits. And maybe help us understand how we should think about how Key's ACL would look like in a recession. So you ended the quarter at 113 and clearly, your book has changed, but you also have more consumer loans, which, even if the credit is good, my understanding is from a CECL standpoint, they have longer lives, right? So I guess the question here is, if we do have a mild recession next year or sooner than that, where would this ACL ratio trend?

我的第一個問題是關於信用質量，目前這顯然是原始的。克里斯，你對易卜拉欣說，為經濟衰退做準備的時間遠遠早於經濟衰退來襲。也許可以幫助我們了解我們應該如何考慮 Key 的 ACL 在經濟衰退中的樣子。所以你以 113 結束了這個季度，很明顯，你的賬面發生了變化，但你也有更多的消費貸款，即使信用良好，我的理解是從 CECL 的角度來看，它們的壽命更長，對吧？所以我想這裡的問題是，如果我們明年或更早出現溫和衰退，這個 ACL 比率趨勢會在哪裡？

So obviously, we're really comfortable with where our reserves are today. A few things to keep in mind, both on our commercial and our consumer side. I'll start with the consumer. That book of business at funding is about -- FICO scores of about [780]. So it's a little bit of a unique customer base as it relates to our consumers. So that's one thing to keep in mind. The other thing on the commercial side is, as I've mentioned earlier, we've been consistently derisking all of Key. And we also have been consistently laying off about 72% of the risk that kind of flows through Key. And there were a lot of deals that we're able to place that don't meet our moderate risk profile. So I'm very comfortable with where our reserves are now. As you can imagine, we are modeling continually just a whole lot of different scenarios. But at the moment, we're very comfortable with where our reserve is.

很明顯，我們對我們今天的儲備情況感到非常滿意。在我們的商業和消費者方面，有幾件事要記住。我將從消費者開始。那本關於融資的商業書籍大約是——FICO 分數約為 [780]。所以它有點獨特的客戶群，因為它與我們的消費者有關。所以這是要記住的一件事。商業方面的另一件事是，正如我之前提到的，我們一直在貶低所有 Key。而且我們也一直在減少大約 72% 的這種流經 Key 的風險。我們能夠進行的許多交易不符合我們的中等風險狀況。所以我對我們現在的儲備情況感到非常滿意。正如您可以想像的那樣，我們不斷地建模大量不同的場景。但目前，我們對我們的預備隊位置感到非常滿意。

You'll recall, last quarter, we actually increased our qualitative reserve just on the premise that, under CECL, our macro view had changed and clearly there were some more challenges out there.

你會記得，上個季度，我們實際上增加了我們的定性儲備，前提是在 CECL 下，我們的宏觀觀點發生了變化，顯然還有更多的挑戰。

Erika, this is Don. I can probably add a little bit more color to that as well. And that if you look at our allowance, it is very quantitative in the approach. I would say that under CECL, what you do is take a look at the foreseeable period as far as forecasted losses. And so for us, that's a 2-year type of period. And so even in a recession, you would see those 2 years of losses go up from where they're at today. And then we'll start to migrate back to the norm. And so you might think that with the longer life loans as far as the residential real estate or even our student loans to Laurel Road, that you would see that for the entire life. And you really would. You would see it spike in that first 2-year period. And so it might imply somewhere between a 40- or 50-basis-point kind of increase to the allowance, but it wouldn't be a doubling, it would be our best guess at this point in time.

埃里卡，這是唐。我可能也可以為此添加更多顏色。如果你看一下我們的津貼，它在方法上是非常量化的。我想說的是，在 CECL 下，你所做的就是看看可預見的時期，就預測的損失而言。所以對我們來說，這是一個 2 年的時期。因此，即使在經濟衰退中，你也會看到這 2 年的損失從今天的水平上升。然後我們將開始回歸常態。因此，您可能會認為，就住宅房地產甚至我們向勞雷爾路提供的學生貸款而言，您會在整個生命中看到這種情況。你真的會的。你會看到它在第一個 2 年期間飆升。因此，這可能意味著津貼將增加 40 或 50 個基點，但不會翻倍，這將是我們目前最好的猜測。

Got it. And Chris, maybe a follow-up question for you. As you take a step back, you and your colleagues have built Key into this powerhouse, super regional commercial and corporate bank. And I think a lot of investors are thinking that a lot of the issues in credit and corporate from higher rates and lower EBITDA, perhaps, may come outside of the banking system. And given your comments about derisking, is there any room at KeyCorp for perhaps some market share gains if you do see some blowups in the private credit markets? Or are those deals just deals that you wouldn't be comfortable with any way?

知道了。克里斯，也許是你的後續問題。當您退後一步時，您和您的同事已經將 Key 打造成了這家強大的超級區域商業和企業銀行。而且我認為很多投資者都認為，信貸和企業方面的許多問題可能來自銀行體系之外的更高利率和更低的 EBITDA。鑑於您對去風險化的評論，如果您確實看到私人信貸市場出現一些爆炸式增長，KeyCorp 是否有可能獲得一些市場份額增長？還是這些交易只是您不會以任何方式感到滿意的交易？

Well, I think there's no question that depending on how people are funded, I think banks, in general, will be able to gain share. And the nice thing about a downturn, Erika, is you can have things structured the way you want to structure them to put them on your balance sheet. I think there's no question that, in this location, it will be an opportunity for us to gain market share given our relationships, and given that we can have things structured the way we'd like them to structure because the market is obviously adjusting as we speak.

好吧，我認為毫無疑問，取決於人們的資金來源，我認為銀行總體上能夠獲得份額。埃里卡，經濟低迷的好處是你可以按照你想要的方式來組織事情，把它們放在你的資產負債表上。我認為毫無疑問，在這個位置，鑑於我們的關係，這將是我們獲得市場份額的機會，而且我們可以按照我們希望的方式構建事物，因為市場顯然正在調整我們說。

(Operator Instructions) And our next question comes from the line of Matt O'Connor, Deutsche Bank.

（操作員說明）我們的下一個問題來自德意志銀行的 Matt O'Connor。

Your capital is kind of right in the middle of your range at 9.2% versus 9% to 9.5%. Can you just update us on thoughts on both your buybacks? And then also where you want to be within that capital range at this point of cycle and maybe longer term?

您的資本在 9.2% 與 9% 到 9.5% 之間處於您的範圍中間。你能告訴我們你對兩次回購的想法嗎？然後，您還想在這個週期的這個時間點甚至更長時間內處於該資本範圍內的哪個位置？

Sure, Matt. So we're obviously very comfortable at 9.2%. Frankly, I'd be comfortable at even a range that's a little broader than that. 9% to 9.5% was just an internal range that we had put in place. As it relates to capital actions, first and foremost, as Don mentioned in his remarks, we preserve our capital to help our clients grow. So that's the first thing. The second thing is obviously our dividend, which is very important. And then our third tertiary priority is the repurchase of shares. And so I feel very good about where we are from a capital perspective.

當然，馬特。所以我們顯然很滿意 9.2%。坦率地說，即使是比這更寬一點的範圍，我也會感到舒服。 9% 到 9.5% 只是我們設定的一個內部範圍。由於它與資本行動有關，首先，正如 Don 在他的講話中提到的那樣，我們保留我們的資本以幫助我們的客戶成長。所以這是第一件事。第二件事顯然是我們的分紅，這非常重要。然後我們的第三個優先事項是回購股票。因此，從資本的角度來看，我對我們所處的位置感覺非常好。

All right. And then somewhat related, as you mentioned earlier about investing even more so within the investment banking capital markets broadly speaking. Is that all kind of organic? Or are there maybe some niche acquisition opportunities within those businesses?

好的。然後有點相關，正如您之前提到的，從廣義上講，在投資銀行資本市場中進行更多投資。這都是有機的嗎？或者這些業務中是否存在一些利基收購機會？

Well, as you know, in the past, we have bought businesses, and I'm really proud of our ability to integrate these entrepreneurial businesses. But what I was really focused on in my comments is sort of organic individual hires that we think would be a good cultural fit to plug into our platform.

好吧，如你所知，過去我們收購了企業，我為我們整合這些創業企業的能力感到非常自豪。但我在評論中真正關注的是某種有機的個人招聘，我們認為這將是一種很好的文化適合插入我們的平台。

And we have last question here from the line of Mike Mayo, Wells Fargo.

最後一個問題來自富國銀行的 Mike Mayo。

It's not a new statement from you, but if you can't catch the ball with your left hand with investment banking than you catch it with your right hand with traditional lending or the reintermediation to bank balance sheets and capital markets. So I know you've described this in the past, Chris, and this is your old area, as we all know. But can you be more specific like what are we talking about? We say capital market transactions don't get completed. So therefore, they go to Key's balance sheet. Just a little bit more detail would be great.

這不是你的新聲明，但如果你不能用左手在投資銀行業務中接球，而不是在傳統貸款或銀行資產負債表和資本市場的再中介中用右手接球。所以我知道你過去曾描述過，克里斯，這是你的老領域，我們都知道。但是你能更具體一點，比如我們在說什麼嗎？我們說資本市場交易沒有完成。因此，他們進入 Key 的資產負債表。再多一點細節就很好了。

Sure. So let me give you an example. Say someone is trying to privately raise debt and there's all these debt funds and there's all these unitranche offerings, and all of a sudden, those markets frees up. But whoever is the sponsor behind the deal has significant capital. We can then go back to the parties involved that we have a relationship with and we would say, we won't structure it the way -- we're trying to structure it to place it out in the market, but we'd be pleased to put a very conservative amount of debt on our balance sheet, and you, sponsor, will need to come up with more equity. That would be an example. Another example would be, a company that we were going to take public that we could continue to fund in a variety of ways until they go public. A third example would be, a large -- let's say it's a large, affordable project that wanted ultimately to place the paper with one of the agencies. But because of dislocation, you couldn't do that. That's a deal that we could bridge over a period of time with a known takeout. That would be a few examples.

當然。所以讓我給你舉個例子。假設有人試圖私下籌集債務，並且有所有這些債務基金和所有這些單位發行產品，突然間，這些市場都釋放了。但無論誰是這筆交易的讚助商，都擁有大量資金。然後我們可以回到與我們有關係的相關方，我們會說，我們不會以這種方式構建它——我們正在嘗試構建它以將其投放市場，但我們會很高興在我們的資產負債表上存入非常保守的債務，而您，贊助商，將需要拿出更多的股權。那將是一個例子。另一個例子是，一家我們將要上市的公司，我們可以繼續以各種方式資助它，直到它們上市。第三個例子是，一個大型的——假設它是一個大型的、負擔得起的項目，最終希望將論文交給其中一個機構。但是因為錯位，你不能那樣做。這是一筆我們可以在一段時間內通過已知的外賣來彌補的交易。這將是幾個例子。

Okay. And your investment banking fees were down less than the biggest players, down 1/3 versus the 1/5. I guess that's partly just due to your mix, upper middle market. But the decline was not as much first quarter to second quarter. You said you expect things to improve. Now I mean, maybe your guess is as good as anyone else's? Or perhaps you have some extra insight or maybe you hear what your clients are saying, but -- and with that backdrop, how are you allocating resources? You said you're going to be investing more than you have in the past. Does that reflect your optimism?

好的。而且您的投資銀行費用下降幅度小於最大的參與者，下降 1/3 對 1/5。我想這部分是由於你的混合，中上端市場。但下降幅度沒有第一季度到第二季度那麼大。你說你希望事情會有所改善。現在我的意思是，也許你的猜測和其他人的猜測一樣好？或者，也許您有一些額外的見解，或者您聽到客戶在說什麼，但是——在這種背景下，您是如何分配資源的？你說你將比過去投資更多。這反映了你的樂觀情緒嗎？

There's no question I'm optimistic about the business long term. Mike, as you know, how these markets play out over the next 6 months is, in fact, anybody's guess. But we're playing the long game. We're investing in the business. The pipelines are there. I don't see anything happening in the equity market, for example, in the next 3 or 6 months. I do think this price discovery that I discussed earlier in the M&A market, I do think that buyers and sellers will start to come together on that.

毫無疑問，我對長期業務持樂觀態度。邁克，正如你所知，這些市場在未來 6 個月內的表現實際上是任何人的猜測。但我們正在玩長期遊戲。我們正在投資這項業務。管道在那裡。例如，在接下來的 3 或 6 個月內，我認為股票市場不會發生任何事情。我確實認為我之前在併購市場中討論過的價格發現，我確實認為買家和賣家將開始在這個問題上走到一起。

And at this time, there are no other questions in queue.

而此時，隊列中沒有其他問題。

Again, we thank you for participating in our call today. If you have any follow-up questions, you can direct them to our Investor Relations team ,(216) 689-4221. This concludes our remarks. Thank you.

再次感謝您今天參加我們的電話會議。如果您有任何後續問題，您可以直接聯繫我們的投資者關係團隊，(216) 689-4221。我們的發言到此結束。謝謝你。

And ladies and gentlemen, that concludes our conference for today. Thank you for your participation and for using AT&T conferencing service. You may now disconnect.

女士們，先生們，今天的會議到此結束。感謝您的參與和使用 AT&T 會議服務。您現在可以斷開連接。