KeyCorp (KEY) Earnings Call Transcript & Summary

Well, good morning, and welcome to KeyCorp's 2022 Investor Day. My name is Vern Patterson, and I'm Head of Investor Relations at Key. It's great to see many of you in the room this morning, and we also appreciate those who have joined us on the webcast. Before I get started, I have just a couple of housekeeping items. First, you'll find our materials for the day on our website, key.com/ir under 2022 Investor Day. For those of you in the room, we've provided a QR code that will take you directly to the presentation PDF. Second, you'll find our statement on forward-looking disclosure in our slide deck. This statement covers both our Q&A and presentations as well as the discussions throughout the day. I'm joined today by Key's leadership team, and I hope you'll take the opportunity to engage with them during our Q&A as well as during our breaks and lunch that follows. So with that covered, let me introduce our Chairman and Chief Executive Officer, Chris Gorman. Chris?

Thank you, Vern, and welcome to all of you, and thank you for joining us today. I am particularly appreciative of all of you being here. And these times when we have really volatile markets, we've got the [ 10-year at 1.74 or 1.749 ], something like that. So it's great to have everybody here in the midst of a lot of activity. We are very appreciative. I'm on Slide 3, which is our agenda for the day. I will begin by sharing an overview that will provide the framework for our discussion. Following my remarks, Angela Mago, President of Keys Commercial Bank; and Randy Paine, President of Key's Institutional Bank, will discuss our relationship bank -- banker-driven strategy, and also the continued success they are driving through our well-established and differentiated commercial platform. Ken Gavrity, Head of Enterprise Payments, will discuss our strong and growing position in the ever-expanding commercial payment space. Victor Alexander, Head of our Consumer Bank, will then review the strength and momentum of our consumer business and the growth opportunities that lie ahead. Following Victor will be Jamie Warder, he's Head of our Digital Banking. He'll be joined by Alyssa Schaefer, Head of Laurel Road. They will discuss the execution of our targeted scale strategy by sharing a tangible example in health care. We are very proud of what Laurel Road has accomplished since our acquisition in 2019, and we are excited to share the growth opportunities ahead. Clark Khayat, our Chief Strategy Officer; and Arjun Sirrah, Head of Engineering at Laurel Road will discuss our approach to -- with entrepreneurial partnerships, a successful strategy that we will continue to deploy. Amy Brady, our Chief Information Officer, will then join us to discuss how we are leveraging technology to enable our targeted scale strategy. Don Kimble, our Chief Financial Officer, will talk about the progress we have made with respect to our financial commitments and importantly, the path forward. We have set aside time in 3 separate segments today to field your questions. We certainly look forward to that interchange. I'm now moving to Slide 4. One theme will be consistent throughout the day, and that theme is simply focus propels growth, and focus is central to our targeted scale strategy. We have an outstanding team and a unique business model, which is very targeted around specific client segments and high-growth businesses, where we can build enduring relationships. We are not seeking to be everything to everyone. Our discipline around targeted scale means that for those whom we serve, we can develop clear value propositions, and we can deliver in ways that our competitors simply cannot, resulting in deep relationships and outsized market share as well as sound, profitable growth and strong returns. Our focus provides us with clear strategic opportunities to identify, accelerate and execute growth strategies in additional targeted markets where we can win. We have continued to make investments in these targeted areas, which are driving tangible results. You will see evidence of momentum in all of our businesses. We are delivering on our commitments, and we are creating long-term value for all of our stakeholders. Importantly, we are balancing near-term results, which, by the way, have been very compelling with long-term investments that are positioning us for the next leg of growth. Finally and importantly, we believe that many of Key's strengths are not yet fully recognized in terms of our valuation. We will share several key takeaways to illustrate the many aspects of our business that may be not fully appreciated by the market. Examples will include the relationship-based recurring nature of our investment banking platform. The acceleration of our consumer business or the investments we have made to position Key in fast-growing markets and geographies. Despite these differentiated strengths, we continue to trade at a discount to our peers. The market will make the ultimate call as to valuation, but we will be making the case today that Key is a compelling investment. To do so, I now want to turn to Slide 5. This is an important slide. It really underscores what we -- that we are a different company today. What were competitive disadvantages in the past are now competitive strengths. One important difference is that we are a more balanced franchise. For as long as I have been part of Key, our commercial business has been a strength. We have continued to grow this business, and now we're able to pair that with a strong and accelerating consumer business. Our consumer business is performing better than it has in over a decade. In 2021, we grew households at a record pace and continued to expand our existing relationships. Our new leadership has brought a clear focus to the business, and this focus, coupled with our investments, has driven strong returns. We are growing faster than ever before because we are delivering a significantly strengthened product offering to markets that include our scaled Eastern markets, our fast-growing Western markets and the national digital affinity bank that serves our targeted, high-value consumer clients nationwide. On the commercial side, we have continued to invest in this business, including growing our team and strengthening our focus within our industry verticals. We have also added and expanded focus to several niche high-growth sectors or subverticals, where secular tailwinds, combined with our leading positions will continue to create strong growth opportunities. From a credit perspective, we have taken a proactive and intentional approach to derisk our business over the past decade, focused on sound, profitable growth. During the global financial crisis, we experienced outsized losses, which impaired our ability to serve our clients and our shareholders. This will not happen again. We have significantly reduced our risk profile over the past decade by focusing on relationships with targeted clients and a differentiated ability to distribute risk in the capital markets that enables us to deliver a broad set of solutions to our clients, and we can still remain diligent in managing risk. Using the latest stress test, as an example, Key was a leader in our peer group for both capital consumption and stress losses. Finally, we are delivering strong, sustainable growth. 2021 was a record year from many perspectives, including record revenue growth, record PPNR. Our PPNR increased 10% in 2021, best-in-class among our peer group. Importantly, we have delivered positive operating leverage in 8 of the last 9 years, a strong track record that we expect to continue again in 2022. Next, I'm turning to Slide 6. I want to spend a few minutes on both the consumer and the Commercial Bank, introducing some key themes that you will hear throughout the rest of today. First, Key's consumer business is an important part of our franchise and is a significant driver of our growth going forward. Our Consumer Bank foundation is strong. We have 3 million clients. We have 1,000 branches. We have 6,500 bankers who serve our clients each and every day. We have broad product capabilities, including highly valuable subscription-like revenue streams in places like payments and wealth management. We have reoriented the business over the last number of years, and we are executing well. And by the way, we believe we're just getting started. As you can see on Slide 7, the acceleration in this business is clear. We are adding new consumer households at a record pace, propelled by continued investments in the 1/3 of our business that represents our Western footprint. In addition to geographic diversity, 25% of our new clients are under the age of 30. That's our fastest-growing segment. And I believe this is a testament to our combined physical and digital offering, which will pay significant dividends over time as their financial lives become more complex. We have originated more than $22 billion in mortgages over the last 2 years in a product that had $2 billion in annual originations just a few short years ago. Our digital and analytics investments are fueling many of these gains. Perhaps the most notably, our digital and analytics capabilities have enabled us to drive a 75% increase in our deposits per branch over the past 4 years. In Laurel Road, we have a targeted scale segment, where we have 48,000 high-quality households that we serve through a national digital-first affinity bank. While these results are encouraging, we have a long -- we're a long way from reaching our potential in any of these categories. I'm now turning to Slide 8. Our integrated commercial and investment bank has a comprehensive set of products and capabilities delivered through a unique, relationship-based approach. We're focused on serving middle-market clients within 7 targeted industry verticals. Importantly, we are truly differentiated in our industry vertical approach. Our deep expertise in these industries enables us to serve our clients, whether on balance sheet or in the capital markets. As all of you know, this is not a new view of our Commercial Bank, but we believe it is still a powerful perspective for 3 reasons. First, we remain one of the very few platforms who combine a high level of industry expertise and product capability focused on middle-market companies, a true differentiator. Next, we continue to strengthen our product set by listening to our clients and understanding the market. The most recent examples of this were the launch of 2 unitranche funds and an affordable housing syndication capability just last year. Lastly, we have a deep expertise within our proven industry verticals. Additionally, we are well positioned to benefit from long-term secular tailwinds in areas such as renewable energy financing, affordable housing and real estate. I'm now turning to Slide 9. These results speak for themselves. In 2021, our commercial businesses drove record performance, including double-digit top line growth. Our Commercial Bank has been a consistent, sustainable growth engine for Key. We have grown investment banking fees by 15% and C&I loans by 11% annually over the last decade. Importantly, we believe we can continue to grow both loans and fees. What differentiates our investment banking business is our real focus on relationships. In 2021, 80% -- I'm going to repeat that number, 80% of our investment banking revenues came from relationship clients. These relationships are much more meaningful than just the investment banking fees, as the strategic adviser to these middle-market CEOs, we are in a very good position to pull through significant amounts of ancillary and recurring business. We will continue to invest in and add bankers to serve clients in our targeted high-growth industries and geographies. I'm now turning to Slide 10. While we will continue to grow and take share across each of our 7 industry verticals, there are 4 verticals or subverticals, namely health care, technology, renewable energy financing and affordable housing, where we combine deep expertise with very specific growth opportunities. I will start with health care. Key is a leading health care bank and our focus on this sector spans both our consumer and commercial businesses. On the commercial side, Cain Brothers has one of the largest, most experienced teams of senior investment bankers devoted exclusively to the health care industry. 2021 marked a record year for health care M&A at Key. On the consumer side, 20% of our consumer mortgage production is attributed to health care professionals. Our national digital affinity bank, Laurel Road for Doctors, is targeted specifically for health care professionals, whom we serve nationally. We are building digital relationships with these high-quality clients in a way that many digital-first offerings simply have not. Technology, another important and ever-growing part of our economy. Our technology vertical continues to produce strong results. In 2021, we more than doubled our technology-related investment banking fees. But even more importantly, our deep expertise in this vertical, ceded by the acquisition of Pacific Crest Securities, pays dividends across our entire platform, as the influence of technology grows throughout all middle-market businesses that we serve. In addition to these 2 power verticals, as we call them, we also have 2 niche subverticals where Key has leading market position. Renewables financing. We are the #2 renewable energy lender in North America. We have raised over $50 billion for our clients since we started serving this sector way back in 2007. The renewable sector has grown at 400% across wind, solar and storage since 2020 -- I'm sorry, since 2014. The sector is poised obviously for continued strong growth. Affordable housing. We're the #3 affordable housing lender in the United States, a hugely important area for the communities we call home, where existing housing stock only covers 1/3 of this pressing need. Both of these are important and growing sectors in today's economy, and both are areas where Key is very well positioned. Combined, these 4 areas that I just mentioned, represented 20% of Key's entire commercial revenue in 2021 and growing. I'm now moving to Slide 11. Looking more broadly, growth would not be possible without the investments we have made and continue to make. These investments in our teams, in technology, in digital capabilities, in analytics have supported and will accelerate our growth across the entire enterprise. We have made a multitude of investments in our team in recent years. On the inorganic front, we have a proven track record of acquiring, integrating and retaining entrepreneurial teammates in our areas of focus. Good examples include our acquisition of leading boutique investment banks, like Cain Brothers and Pacific Crest or born-digital organizations like AQN, XUP and Laurel Road. We have built our organization to unleash the power of these entrepreneurial-minded teams and the results, frankly, have been powerful. Importantly, we have retained 85% of the teammates from these acquired businesses. Further, we increased our population of senior bankers across Key by 10% in 2021. This enables us to deliver our differentiated platform to more clients more often. In addition to these investments we are making in bankers and engineers and analytics professionals, we're also focused on digitizing the enterprise from front to back office, across both our consumer and commercial businesses. We are replacing clunky handoffs with streamlined software and ensuring the best experience for both our clients and our teammates. Although we are still early on our journey, we are seeing tangible results. Nearly 85% of our clients who consider Key to be their primary bank are digitally active. Additionally, we have seen significant improvement in our client satisfaction scores. I'm now turning to Slide 12. We believe the best way to drive long-term value is by delivering on our commitments to every stakeholder we serve, our shareholders, our clients, our colleagues, our regulators and our communities. For our shareholders, we continue to focus on both the return on and the return of capital, which has driven strong shareholder returns. Since our last Investor Day, which was held in this exact room, by the way, Key's total shareholder return has outperformed our peers by 11%. At Key, being a responsible corporate citizen is central to who we are and how we do business. Our purpose is to help our clients and our communities thrive. And through these efforts, we create outstanding results for our shareholders. We have a highly engaged team who keeps the client at the center of everything we do, a calling that each and every one of us answer each and every day. An example of both our focused execution and dedication to our clients is the fact that we delivered $11 billion in PPP funding to our clients when they needed it the most, and that was in the early days of the pandemic when no one knew how much money would be available. Through lending, investing and volunteerism, we participate in the growth and sustainability of the communities we proudly serve. A testament to our commitment to our communities, we received our 10th consecutive outstanding rating from the Office of the Comptroller of the Currency for meeting or exceeding the terms of the Community Reinvestment Act. We're one of the very few banks to reach this milestone and it's just one example of our track record of fairness, access and equity for every client that we serve. With that in mind, I want to spend a moment on our progress related to environmental, social and governance efforts, which is on Slide 13. ESG is core to both our business and our culture. We have a real strength in areas such as affordable housing, renewable energy, philanthropy and, of course, direct -- diversity, equity and inclusion. While our track record is strong, there is a greater interest in investor-grade reporting and climate stewardship. In November of last year, we published our inaugural Task Force on Climate-related Financial Disclosure or TCFD Report, which highlights our climate strategy and risk management approach. Going forward, our climate strategy and commitments will evolve, as will our process for managing and mitigating risk. This will include engaging and supporting clients through the transition to a lower carbon economy. Additionally, we are providing more information and greater transparency through our enhanced ESG report and our inaugural SASB disclosure and updated pay equity statement. All of these are available on key.com. And I really encourage everyone to go out and take a look at them, these are all very important to us. Speaking of equity, we are proud of our award-winning culture that champions diversity, equity and inclusion. In 2021, we committed to increasing people of color representation in our senior leadership and executive levels by 25% by 2025 and 50%, 5-0, by 2030. As the landscape continues to evolve, we are committed to remaining a leader in driving positive outcomes for every stakeholder we serve. I'm now moving to Slide 14. Our collective focus is centered around sound, profitable growth, and I believe that our focus does, in fact, propel our growth. To that point, throughout the presentations today, our team will share a number of specific and measurable commitments for growth looking ahead to 2025. These are commitments across our Consumer Bank, our Commercial Bank and Laurel Road. Victor will discuss the growth trajectory of our consumer business. We are committed to growing our relationship households by 20% by 2025. Randy and Angela will share our commitment to growing our senior banker population by 25% by 2025, while concurrently improving banker productivity across the entire platform. Jamie and Alyssa will share the success that we have had with the launch of our national digital affinity bank, Laurel Road for Doctors. They will detail our commitment to grow our members to 250,000 by 2025, that is 5x our current level. Our commitment to continued organic growth is significant. As I mentioned, we plan to report out on these commitments. So all of you will be able to track our progress over time. I'd like to close on Slide 15. Before I turn it over to the team to share their perspectives on the path ahead, I want to reiterate that Key is a different company today and a compelling investment. We have a unique business model and strategy. As a result, we are well positioned for growth. We have quality, diverse revenue streams built for consistent earnings. We are positioned to grow and deliver through various markets and economic conditions. Lastly, we are committed to our disciplined approach to both risk and capital management. And with that, it is my pleasure now to turn it over to both Randy and Angela. They are going to discuss our relationship banker-driven business. Randy and Angela, the floor is yours.

Okay. Well, thank you, Chris, and good morning, everybody. Today, Randy and I are going to share a deeper view of the momentum in our banker-driven businesses and why, despite the remarkable success this platform has generated for our stakeholders over the past 10-plus years, we are even more excited about the future. We will provide context on the evolution, consistent growth and relationship-driven model that makes these businesses so valuable. And our message is clear. This is a differentiated platform that delivers durable, high-value growth through a targeted, relationship-driven approach. And our results speak for themselves. We have consistently grown loans faster than peers. We have generated more investment banking fee income from those relationships. And we have maintained very strong credit quality favorable to peers. So let's dive in. As we have articulated in the past, the power of this platform is in the unique combination of a broad set of scaled capabilities and our deep industry expertise that enables us to be a top-tier financial partner for targeted client sets, specifically to thousands of middle-market companies across our 7 industry verticals. Key is truly unique in our industry-focused approach. For one, we combined our corporate and investment bank almost 20 years ago, while many of our peers still approach industry specialization as an adjunct to their geographically focused client coverage models. Furthermore, there are very few competitors who have as robust a solution set and even fewer who are able to collaborate well enough to deliver it seamlessly. And we feel our size is a competitive advantage as most of our competitors are much larger than Key and cover middle-market companies as an afterthought. We are big enough to have a developed and proven full solution set and focused and nimble enough to deliver it seamlessly to targeted middle-market clients. These are very powerful attributes and very difficult to develop or replicate. It's also important to note that we continue to strengthen and diversify the platform. Highlighted here, you'll see 2 new capabilities in unitranche lending and affordable housing, low-income housing tax credit equity syndication as recent examples. But the growth has been broad-based. In 2021, we raised $108 billion in capital for our clients, more than double the amount of capital raised back in 2013 when Christopher started sharing this metric.

Thanks, Angela. Importantly, we have thoughtfully and intentionally positioned our business for continued growth, starting with the investments we've made over the last decade. We've made targeted investments, both organic and inorganic to reach more clients in our targeted industries like technology, renewables, affordable housing and health care. We've expanded our equity research coverage, which is approaching 700 companies, all aligned with our targeted industry coverage. And we have added additional execution capabilities to better serve clients and capture more of their wallet. This includes things like asset-based securitization, renewables, M&A. And as you heard from Angela, most recently, 2 unitranche lending solutions with $2.25 billion of investment capacity as well as low income housing tax credit equity syndications platform last year. And lastly, as you know, we have been growing the number of bankers we have calling on clients and prospects. Not only has this driven a 15% compounded annual growth rate over the last decade in investment banking fees, more importantly, for the future, it is that it has allowed us to capture the tailwind of some very attractive growth industries and diversify our product set materially from where we were in 2011. As you can see, we have very good balance across the investment banking fee set and have been growing each aspect of this aspect -- each part of this business with the overall growth in our fees.

Reflected on Page 19, you'll see that, that level of growth and client activity has met consistent, long-term and valuable growth for our shareholders as well. Our sound, steady commercial loan growth fuels a platform that with a 50% fee income ratio has a demonstrated ability to monetize those loans. And those fees come from a range of sources, chief among them, our burgeoning Commercial Payments business, capital markets and advisory fees and other sources of income, such as foreign exchange, derivatives and commercial mortgage servicing revenue to name a few. Because we are often left lead or sole capital provider for most of our relationships, we have the ear of the C-suite decision makers. This positions us well to capture a high percentage of fee income from our relationships, even in years like 2021, when our assets declined slightly but our fee income continued to grow. We feel the strength in fee-based businesses at Key positions us well to perform through the cycle. It certainly means we're less dependent upon a [ great ] environment for growth. It drives up our returns, it shows our ability to get compensated well for the credit risk we take in our book and also represents earnings with little to no tail risk in the form of credit outlays because we retain less than 20% of the capital we raised for clients on our own balance sheet. The consistent growth and durability of our fee-generating businesses is a differentiator for our investors because our relationship approach is a differentiator for our clients. And that's a great transition back to Randy.

Now I'm turning to Page 20. We recognize there are questions about the durability of our investment banking revenue stream, broadly in financial services, investment banking and markets driven businesses exhibit a level of volatility that can be concerning as an investor. One thing to keep in mind is that we do not have any trading-related revenue in Key's investment banking line item. While we certainly have equity and fixed income sales and trading units, the proportion of our business related to sales and trading is much smaller than our larger investment banking competitors and as we act as an agent to facilitate liquidity for institutional clients with immaterial levels of daily VaR. Once again, trading-related revenue is not included in our investment banking revenue stream. With that in mind, we want to highlight why this business has performed and will continue to perform differently than investors might expect when compared to our competitors. Like everything, the heart of our differentiation comes from our relationship strategy. As you heard from Chris, over the past 3 years, including 2021, 80% of our investment banking fees came from relationship clients. We are an important strategic partner for our targeted middle-market clients, advising CEOs and Boards on strategic opportunities, advising on M&A and growth strategies and providing access to whatever sources of capital, Key's or the market's, that best serves our clients' needs. In fact, we believe volatile markets are where Key's approach is most differentiated. We are not a boutique with 1 or 2 solutions to offer, and we find the larger investment banks we compete against often show up in a subscale way when they seek to serve middle-market clients. We are partnering with our clients to help them build their businesses over the long term. This is not a market-based trading business, this is a relationship-based solutions business. Again, over the past 3 years, 80% of our investment banking revenue has come from relationship clients. For Key, this has resulted in very consistent results in what many may otherwise view as a volatile business. We've demonstrated, especially last year, that there is upside in this business, particularly as it continues to mature and extend to new products and industries. But we have demonstrated even more consistently that the volatility to the downside is limited. On Page 21, we are sharing some introspective metrics in an attempt to illuminate how we are positioned for the future. But we also recognize that the true acid test and performance is our performance versus the market. And in that comparison, the message is very clear. We're growing loans faster than the market, and we're monetizing those loans better than our peer set. But beyond that, as Angela will address in a moment, we are also prudently managing risk, another dimension where our model is differentiated. The loan growth you see on this page represents a fraction of the total capital we originate each year for our clients.

An important addendum to the growth we have driven through our balance sheet and fee-driven businesses is the diligent focus on credit risk. We materially outperformed peers in the most recent stress tests and exhibit top-tier credit measures across the peer group in the current environment. As we referenced earlier, we have focused on building a business that can perform through the cycle, so we're focused on sound, profitable growth. And like our banking teams, our underwriting teams are industry focused, using this deep expertise to help Key better manage risk. Additionally, we're ready for rising rates as our credit underwriting leverages rising rate stress scenarios to understand the durability of client cash flows and asset values. Yes, we're growing loans faster than peers and monetizing those loans better than peers, but we're also focused on managing credit better than peers. So let's double-click on this point and look at how we've transformed this aspect of our commercial businesses. Relative to Key's position before the crisis, we have significantly derisked our balance sheet by exiting the riskiest components, focusing on a diverse set of targeted industry verticals, capturing more value for each dollar lent to our clients and significantly improving efficiency. Our loan book is 50% bigger, but we have repositioned the business to be focused on better client selection and lower risk business mix. For example, while commercial real estate is still our largest industry vertical, we have a much lower concentration in construction loans. We are not doing business with merchant builders and homebuilders as in the past, and we have little to no exposure to condos, land holdings and project financing with mezzanine debt in the capital stack. We are delivering more client solutions than ever before, but we are doing it with targeted clients who are well capitalized and modestly leveraged. In fact, 50% of our C&I loan commitments are to investment-grade companies. That is all to illustrate that we have built a sturdy franchise that will perform through the cycle, both for our investors but also for our clients because the best way to build valuable long-term relationships is to deliver for clients when they need us most. So advancing to Page 24, I want to spend a couple of minutes going deeper on 2 aspects of how we're driving these types of results. I'd like to share a couple of hard stats to quantify the power of collaboration on our platform, and then Randy is going to share an actual client example. So first, more than 2/3 of our closed middle-market deals in 2021 had a joint call with another area of the bank, such as KeyBanc Capital Markets, Key Private Bank, Commercial Payments, et cetera. And 77% of middle-market revenue comes from relationship clients. That's how we take market share. We leverage the value of the expertise we built in one area of the bank to pay dividends across the bank.

Thanks, Angela. So let's dive into an example of this at work for an important relationship client, one of the leading distributors and installers of windows, doors and other home improvement products in the U.S. It's an incredible industrial business that was originally brought to Key through our Private Bank -- well, brought to the Private Bank through an introduction by a teller in one of our branches. Key Private Banks served the ownership team's individual planning needs and referred the company into our commercial team when the business needed a PPP loan. Off of that stellar PPP experience, which you'll hear about more from Amy Brady in a moment, we won a broader relationship and ultimately served as a company's sole M&A adviser in the sale of the business to a strategic buyer. But the story doesn't end here, as Key's Private Bank now manages the majority of the proceeds realized, this is a great example of what you heard Angela mention earlier. Very few competitors have as robust a solution set as Key and even fewer are able to collaborate well enough to deliver it seamlessly. Now not every client is quite this picturesque, but Angela shared the stats with you first to show you it isn't isolated. When we said at the beginning that this combination of capabilities, expertise and relationship-driven delivery is a differentiator, this is what we were referring to. We mobilize the bank to serve our clients, which powers us to earn deeper relationships and more market share and higher returns. On the next page, I'll describe the second point that demonstrates how we are achieving these results, which is our targeted scale strategy. Scale is a dominant theme in financial services, and we are a fraction of the size of many of our competitors, but we have demonstrated the ability to punch above our weight when we choose targeted client sets to serve. When we match our product capabilities, relationship model and industry expertise against a targeted set of clients, we experience outsized growth and much stronger market share than our overall size might naturally imply. We're not trying to be everything to everyone, which means that we can deliver much more value for the clients we seek to serve, which we have provided a few examples of here on the right side of this page. Turning to Page 26. As we look to the future, there are multiple drivers that will fuel our continued growth. The first of which is how we have positioned ourselves to capture the growth in very -- in 4 very fast-growing targeted segments by establishing targeted scale. Renewable energy is a great case study. We entered this business in 2007, a decade before most of our competitors even started to think about renewables. Over this period, we have raised as lead arranger over $50 billion to finance utility scale, wind and solar projects and residential solar installations across the U.S. Key has a leading position in this market, which is forecasted to continue to grow at very high rates, fueled by ESG, government support and technology innovation.

As Randy described, renewables is a very exciting business opportunity and also aligns really well with Key's broader ESG initiatives. But I'd also like to highlight a few other targeted growth sectors for Key. Health care makes up 20% of the GDP and is growing at 6%. We are the second most active M&A adviser for health care companies in the U.S. and have grown our health care investment banking fees at almost 20% annually since the Cain Brothers acquisition. We're the #3 affordable housing lender, where we're facing a massive shortage of rental housing units for very low-income households in the U.S. with approximately 7 million too few units and only 110,000 new units placed into stock each year. This will require continued investments in new supply, refurbishment and preservation of existing supply and an expansion of government subsidies and programs such as the Low-Income Housing Tax Credit. We are very well poised to propel growth in this sector, while also furthering Key's broader ESG priorities. We doubled our affordable housing business over the last 3 years with over $3.5 billion in capital raised in 2021, and we expect to double again over the next 3 years. We've also grown revenue in our tech vertical by a 14% compound annual growth rate since acquiring Pacific Crest Securities in 2015, as the industry is seeing astronomical growth and is fueling disruption across other industries as well. Later, you'll hear from Ken about how we are leveraging our deep industry expertise and broad coverage of software companies to drive future growth with embedded payment solutions. Targeted scale in these high-growth areas will create meaningful value for our shareholders in the future, while as you heard earlier, also furthering our ESG priorities as a company. Now I'll hand it back to Randy to talk about banker growth.

Thank you. The final point on capturing our opportunity is that we are meaningfully adding bankers to our franchise to deliver on our proven and differentiated relationship strategy. We have grown the productivity of our bankers every year for the past 5 years. These are meaningful gains, and we are proud of them. As we have discussed, we're driving that improvement by adding products and value-added capabilities to our solution set, but also by investing in tools and capabilities to make bankers more productive and effective. We have and will continue to invest in robust banker training, including capabilities, building and sales excellence. We're also investing in digital capabilities to improve both the banker experience and the client experience, including client security. Some examples include a fully digital RM workbench based in Salesforce and other digital service and sales assist functionality tied to our primary systems, including our KeyNavigator Commercial Payments portal. We are committing to grow our overall banker count across our banker-driven businesses by 25% by 2025. We have become a destination platform for bankers as a function of how successfully they can be serving clients at Key, while working in a great culture with valued teammates. These investments have significant ROIs for our clients and shareholders, and we're committed to this growth. I hope these last few slides have been helpful in illustrating why Key's corporate and investment bank is so unique and so valuable. Remember, we have been building and refining our relationship model for more than 20 years, far longer than any of our peer set. At the same time, our vision to be the premier corporate and investment bank, serving middle-market companies has remained unchanged. We are proud of our accomplishments and growth, we see significant green space to continue to grow and are confident that our relationship strategy and unique ability to deliver Key to clients through collaboration, along with our unique position in many high-growth verticals and geographies, positions our business for continued meaningful growth. To close, I want to reiterate a few key messages. We continue to strengthen and diversify our expertise-driven platform. We are delivering consistent, durable, high-value growth through targeted scale. We are growing loans faster than our peers, outperform managing credit risk and monetize our lending at peer-leading rates. Our collaborative relationship model is a differentiator for clients and, therefore, our shareholders. And we are very well positioned for continued growth with more bankers, higher productivity and targeted scale in high-growth industries. Thank you. And with that, we'll turn it over to Ken Gavrity.

Thanks, Randy. Good morning. The next portion of the day, I'm going to spend some time building off of Angela and Randy's remarks and highlight how we pull the same themes of robust capability and expertise through the payments organization to help our clients operate and grow their businesses. This is an area of significant innovation and opportunity, and a place where we've been investing for growth. And in our 2018 Investor Day, we shared some of the early results and highlighted the significant opportunity in front of us. Today, we're going to look back at the progress we've made and the market share that we've gained since then. It's been a remarkable journey and a credit to the team's ability to execute. More importantly, I can share how our continued investments and truly differentiated model have set us up for the next leg of growth in an area that's critical to our clients but also extremely valuable to our shareholders. So first on Slide 30, an overview of our payments business. We span the entire franchise and serve a wide range of clients from consumers up through large corporations. It's unique to house this all in one organization, and it's a true differentiator, but it's also an acknowledgment of the opportunity we believe we have in this space. It also allows us to leverage a common infrastructure and create the elevated focus needed to compete in both a complex and rapidly evolving industry. We also deeply believe in expertise. And within our commercial teams, we've organized around industry verticals so we can speak in the language of our customers and truly understand the pain points that exist from their lens. The way these products were leveraged is deeply integrated into our customers' business operations and it's increasingly more integral as behaviors and business models have evolved during the pandemic. So the combination of C-suite access that you heard from Randy and Angela, along with the depth of expertise from our payments team, provides us both differentiated access and opportunity. Our payments organization is a scaled business, with more than $5 trillion of volume going through our platforms annually and a broad reach that touches customers in all 50 states. This not only drives efficiencies, but it also allows us to be meaningful to all of our ecosystem partners and provides a large existing network as we look to continue to expand our service offering. And we believe we've built a truly unique set of capabilities, including very competitive solutions in our traditional offerings, such as consumer cards, treasury, merchant. But we've also meaningfully differentiated by building one of the most robust suites of payments automation in the industry and as a result of our fintech partnership strategy. And most recently, we've launched an embedded banking capability that we've been incubating for the past year, which has the potential to capture the explosive growth that we're seeing in the technology vertical. It is clear that this is the future of banking. And I'm going to spend more time on that opportunity later in the presentation. So in summary, we believe we've assembled a compelling set of capabilities. We've differentiated from the competition, and we continue to drive meaningful customer outcomes. So moving to our next slide. Our rationale for focus in this space has been very clear and very consistent, becoming the primary provider for payment solutions drives customer engagement and significant shareholder value. And we've made it a top priority, and we have it coordinated across the entire bank. In 2021, 73% of our business customers were highly engaged, meaning they were transacting with us more than 10x a month. And that segment of customers has grown more than 16% since 2019. These high-touch relationships give us the opportunity to more deeply shape brand, test new ideas and more importantly, build unique data assets that fuel the next leg of our growth and innovation. And the net result is predictable, recurring, high-value revenue, with payment relationships, 2.5x more valuable than those without payments, a meaningfully higher return on equity and not surprisingly, a higher NPS as well. Last, but certainly not least, our Commercial Payments relationships drive our low-cost commercial deposit base. More than 82% of those are in operating accounts today, which are less rate sensitive, and that's a favorable percentage when compared to our peers. Obviously, this is an area of increasing importance as we head into the current rate cycle. So winning in this space matters. It clearly drives attractive returns, and I'll talk more about the macro tailwinds that get us really excited in a later slide. So now on Slide 32, I want to connect back to our last Investor Day in 2018. And during that presentation, I talked about the transformation journey that we were on and I laid out a very clear road map required to drive growth. It's exciting to see the progress against those 4 key themes from that discussion, and I'm going to spend a minute on each. Our partnership approach is foundational to our strategy. It allows us to access best-in-class capabilities, and it drives significant value for our clients. We were early to the game here, and you'll hear more about how we've continued to evolve this effort beyond payments from Clark later in the day. But since our first round of fintech investment partnerships back in 2014, we've been aggressive about identifying, investing in and commercializing capabilities that allow us to serve our clients more effectively. The differentiator here is not only identifying the right partner, but it's about how you operationalize a partnership. And we built a brand as a preferred provider for entrepreneurs and investors in this space, both for our ability to understand the complexity and how to stand up these relationships, but also our very compatible culture that keeps the teams on both sides, energized and productive. Lots of banks are very enthusiastic now about fintech, but few are driving results from it. Our track record speaks for itself. We have delivered these capabilities to thousands of our commercial clients, which has created tremendous financial and relationship benefits and our pipelines are only growing. On the analytics front, we've invested heavily, including the acquisition of AQN Strategies last year, to continue the progression of bringing the value of our substantial data assets to bear for both clients and shareholders. To be a great omnichannel bank requires great analytics. And that's been foundational to our primacy efforts as we fuel faster, data-driven business decisions to prioritize our focus areas. The results have been felt across the organization is now being imprinted in the DNA of our business. And when you couple an entrepreneurial environment with a very clear focus on analytics, you start creating a destination platform for next-generation talent. And speaking of talent, I've mentioned a few times that expertise and consultative delivery are the key ingredients for success in this space. And as the products and services evolve toward more software offerings, there is a fundamentally different skill set required to be an adviser. And we think that this is a significant differentiator and an area where banks have been very slow to react. But over the past 4 years, we have completely retooled our business development teams, our delivery model and our training programs, and the results have been dramatic as we've seen annual sales levels grow by more than 40% since 2018. And finally, the primary consideration in everything we do, client experience. Our differentiated set of capabilities would fall flat without an intentional and proactive approach to managing the complexity for our client. The acquisition of XUP was an exciting part of that story, but we've been on a multiyear journey to build the tight feedback loops between us, our clients and our partners to drive great omnichannel experiences. We've got more work to do here, but the NPS impact so far has been substantial and now puts us in the top quartile for similar products. So the overall message that we've been consistent in our strategy and very execution focused, and Slide 33 shows the results of those efforts, driving more than $1.5 billion of high-value revenue that shows up in our financials in the cards and payments line item, deposit service charges and net interest income. And on the charts on the left, we're comparing against 2019 to show how we're faring against prepandemic baselines. And you can see we've had really strong growth across our payment revenue streams, and that's headlined by 30% growth in our Commercial Payments fee revenue that's benefited the most from our differentiated relationship strategy. Certainly, there are secular growth trends in our business as the world migrates towards digital payments, but you can see in the payment volumes on the right-hand side of the slide that we are meaningfully outpacing the industry and taking share, which as Randy and Angela highlighted, is the true acid test for any business. We're obviously energized by the results, but we are not satisfied, and we continue to outpace -- we expect to continue to outpace the industry as we recently set our long-term 2025 targets. So with that in mind, I'll spend a few minutes focusing on the most important component of today's discussion, which is the next leg of our growth opportunity. And as I make this pivot, I want to highlight that the investments that we've made and the platform that we've built is oriented towards the future. We have the talent, the capabilities and the track record to deliver on these opportunities in a way that very few of our peers can. And while we're proud of our success, we are still underpenetrated in capturing what we believe is a fair share with our existing clients and product set. On the consumer and small business side of our franchise, the off-us card opportunity with existing clients using competitor cards would allow us to more than double the volume on our platform. And you're going to hear more about that later today when Victor Alexander talks about our consumer strategy and the reinvigorated efforts toward consumer payments. And on the commercial side of the house, we are far below the 30% to 40% penetration rates from card and merchant portfolios that can be expected from fully mature programs. Add to that, a secular shift toward digital payments that expands the overall revenue pool and an industry-wide focus on payments automation, and we really like the opportunity in front of us. So now moving to Slide 35. In addition to taking market share with our existing products and services, we are really excited about the strategy that we've been incubating over the past year to go after the explosive growth occurring in embedded banking or described more simply, embedding financial products into software programs. With most small- and medium-sized businesses already using some type of software to run their businesses, the customer value proposition of including payments and lending is both clear and compelling. Using a dental office as an example, which is a clear targeted focus area for Key, today, most dentists use software for basic practice management, storing patient records, managing lab orders, scheduling procedures. It's made them more efficient. But the next evolution is to drive greater patient engagement. And that's where innovative companies, like our partner, Rectangle Health, have stepped in to create a software platform that integrates with what the dentist is already using and creates those industry-specific services to drive patient engagement. So think text reminders and confirmation for upcoming appointments, digital sign-in and registration, card on file for one-click payments, payment plans for larger procedures. So for the dentist, it's driving workflow automation, it's pulling cash flow forward with higher pay rates and more on-time payments, and it's driving revenue with cross-sell opportunities for more procedures. So very exciting for the dentist. But for the consumer, it's a better overall experience and allows them to engage how they want, when they want, an Amazon-like experience. It's estimated that in 2019, already 8% of card payments in the U.S. were going through software platforms. And it's expected that number will grow to 40% by 2025. That's an extraordinary shift in where and how payments are processed. And we're seeing this trend across every type of business we serve, including restaurants, law firms, construction companies, schools, et cetera. Software platforms creating beautiful experiences unique to each industry, which is why the estimated growth in a number of software companies is expected to grow 5x in the next 5 years, which creates a significant opportunity for us to serve these new and high-growth customers. But this is still a developing market. And if you are a software platform, it can be very difficult to assemble the right technology, risk expertise and banking capabilities to deliver these types of embedded banking solutions. So we think there's a great opportunity to be the bank powering these software platforms, bundling the required capabilities and providing the expertise to simplify their journey. And success has a geometric outcome in this space because when we win one new software client, we're typically getting access to hundreds or thousands of new underlying small business customers, which is why these payment deals are more than 10x the size of our standard commercial relationships and have a natural tailwind as those technology customers grow. And we like how we're positioned to go after the opportunity. Our acquisition of Pacific Crest in 2014 gives a very strong foothold in technology vertical. And you heard Angela talk about our ongoing growth and focus in this space. That means we have C-suite access to talk about our capabilities that are crucial to the growth and the market positioning for these software platforms, and we're talking to the CEO, the head of product, the CIO and often the Board of Directors given the strategic importance of these types of decisions, which is why our positioning is unique, given our advisory banking relationships with these customers and deeply entrenched relationships within the venture capital community. We've also put in place the foundational building blocks with the talent and the technology acquired in our recent acquisitions. XUP up gave us an end-to-end digital origination and servicing platform built on modern technology infrastructure to be able to serve these customers in a way that they expect from their partners. And as importantly, the talent that can speak the language of our targeted customers and have the track record of execution. When coupled with the acquisition of AQN to add powerful analytical capabilities, it gave us a great head start but it also signaled to the market our meaningful focus in this space and it catalyzed our ability to organically attract talent from across the entire ecosystem. How we enable these teams is the final ingredient to ensure that we maintain the entrepreneurial lean and high-speed delivery, which is why our learnings from the Laurel Road acquisition have been instrumental as we established dedicated cross-functional teams that can leverage the infrastructure of Key, but have the agility to make decisions quickly across the entire value chain. In the last quarter, we tested our value proposition in the market against the competition, already onboarded our first set of customers. It's early, but our success is very encouraging, and this adds a new growth vector that provides meaningful upside potential. So finally, on Slide 37, before I close, there are a few key messages that bear repeating. We have built a differentiated platform that drives value for clients by combining our robust product set and deep expertise. Our platform creates material value for key shareholders through higher customer engagement along with predictable recurring revenue streams. Our team is execution-focused, and we delivered on the road map that we set out in 2018, which created a durable and very hard to replicate strategy. We're consistently outpacing the industry, but the opportunity remains substantial as we go after fair share penetration with our existing customer base. But we've also added a new growth engine as we target the significant opportunity surrounding embedded banking. In closing, our mission is simple and consistent: To help our clients grow and run their businesses better every day. We built the business model around that idea. It is strongly resonating in the market, and we like the pathway in front of us. Thank you.

Okay. We are now ready for the first of 3 Q&A sessions. As Angela and Randy make their way to the podium, I think it's a pretty simple formula. It's -- it all starts with focus knowing who you want to do business with, then having the capabilities. And lastly, you have to collaborate. And a key collaborating isn't just sort of a nice thing to mention at year-end. It's a requirement if you want to play here. With that, let's open it up. Yes, Mike Mayo. For those that are watching virtually, maybe give your name and your affiliation before you ask the question.

Mike Mayo, Wells Fargo Securities. I guess we can try this for the panel. One positive question, one negative question. In terms of the total addressable market, how much have you achieved like within investment banking? I mean it's very impressive 15% CAGR over a decade, 80% of your investment banking fees are to existing clients. But how much more do you have to go there maybe in each space. So that's the revenue question. That's a positive. The negative is the efficiency of the commercial bank is 900 basis points worse than some of your peers. And your target is to grow relationship bankers by what, 25% in the next 3 years. I guess that will be your 200-year anniversary. I think that's right, Chris. But that's kind of an input, hiring 25% more bankers. What are some metrics that we should see in 2025 about the output, whether it's revenues or market share or something like that, like what you're giving us on the consumer metrics, you're not giving us that on the commercial metrics. So revenue potential, total addressable market share and then a little bit more on the efficiency side and what you expect to see in 3 years.

So there's a lot there. Let me take a first pass, and then we'll go across. We'll start with Randy. As it relates to the addressable market, and he'll give you the numbers, but the nice thing about being a middle market bank is the pyramid gets pretty wide pretty fast. And so Randy will give you some addressable market numbers, but it's a big market as opposed to if you're an integrated corporate and investment bank focused on Fortune 500 companies, for example. So that's the first thing. Second thing, with respect to your good question about efficiency, the efficiency is going to lag a bit. We are investing very, very heavily in our business around analytics, around technology, and we talked about people. We think kind of a high ticket senior banker. We can give you a bunch of stats that they're more productive on our platform than they are on others, et cetera, et cetera. But we always say it takes about 18 months, Mike, for them to really get traction. So there's no question that there is an efficiency hit as we invest in our business. That's why what we've really tried to get people focused on is this notion of positive operating leverage because I think it's imperative. We think we have these unique businesses. I think it's imperative that we make the effort to invest in these businesses. So those are just a couple of thoughts. Randy, do you want to talk a little bit about your addressable market and then we'll kind of go right down the line.

Yes. So good question. I think we're at a fraction of the addressable market, Mike. If you look at our business compared to firms like Wells Fargo or other very large investment banks, our market share is just a fraction of what those firms come in. And as you think about the middle market, there are orders of magnitude, more targets that we can serve with our model. So I don't see any issues in terms of directing our team to go out and serve more prospects, make them clients of Key and deliver what we just talked to you about. As it relates to efficiency and your other question. The commercial bank, we had, I think it was close to 5% operating leverage last year. So we were accretive to Key's franchise while making the investments that Chris just spoke to. And I think if you just look at one aspect like efficiency ratio and don't look at returns on capital, you're missing the boat. So we have some very high return on capital businesses that are less efficient admittedly. So -- but you've got to look at both.

And then maybe I'll just address banker productivity. So we do look at revenue per banker. That's clearly something we showed a slide that showed a pretty good trajectory there. But that is something that we look at very carefully. We're making investments, as Chris said, in digital capabilities to make our bankers better, and we're doing a lot of training for sales excellence and advisory. And some things that I look at is the percentage of bankers that are hitting all their targets and metrics, not only the things that we ask them to do quantitatively, but driving new names, growing their back, things like that. So those are things that we pay close attention to. And we also benchmark ourselves against peers. We've got some good benchmarking data from some of the consultants, and we're consistently at median or higher and very much higher on fee income as a percentage of the total.

Let's go to John and then we'll go to Erika.

John Pancari, Evercore ISI. A question on your capital markets revenue expectation. As you look here, I know I think Dealogic data has shown a pretty good pullback in volumes -- in deal volumes month-to-month. Are you seeing that near term? And why not, if you're not? And then second of all, if you could just give us your thought on how you expect the trajectory of your capital markets revenues as you look further out beyond the next quarter and the sustainability of it. We're getting a lot of questions about do you have a cliff coming. So see if you could talk around that.

Sure. I'll kick it off and then I'll let Randy and Angela speak to it a bit. We've said before, and I'll reiterate this morning, we expect to grow our investment banking fees this year. It's not without challenges. Obviously, in areas like equity issuance, it's choppy right now. As we look at our backlogs, our backlogs are strong. The first quarter, John, is typically a weaker quarter for us. But on a relative basis, we feel good about it. Randy and Angela, what would you add to that?

Yes. We obviously have a very good look into the first quarter, sitting here, 2/3 of the way through it, and we have seen the quarter play out as expected, with one exception being the equity markets. But we've also seen strength in some other product categories. And that's why I wanted to show you the slide we did today in terms of the pie chart of our investment banking fees. And as you saw, every aspect is growing, but we also have great diversification. I think we were -- based on what I saw, and you all are more closer to this than I am, but we had record levels of backlog at the end of 2021, and that was after 5 consecutive quarters of record growth. And so we were very well positioned entering this year. And that's what gives us a lot of confidence about the rest of the year. We'll have to deal with the markets. But so far, it's playing out as expected with one exception being equity capital markets, but we still feel very, very good about how we're positioned.

We talked about the relationship percentage of our investment banking fee income, which is very high. We target our clients well. So they're serially back into the markets, right? And we can continue to invest in that. And I think just investing in capabilities, capabilities and strengthening that's -- we're always going to be focused on that. We're never satisfied in sitting still. And then how are our teams working together to deliver our platform. I mean that's really the power of our platform. If I hire a banker from another bank, it's really what they love about us is that they can align with a vertical banker and get in front of a company and differentiate and win business. And so the more we can do that, the more we can continue to grow. So that's our focus.

Erika. Gerard, I'll come to you next.

Erika Najarian, UBS. I have two questions, one for Angela and one for Ken. And you can answer, too. I'm not trying to leave you out. Angela, you mentioned something that I wrote down. It's actually a question we're getting from investors a lot. Obviously, the big question now with the forward curve changing the way it has is, can the Fed land the plane without crashing it? And could you give us a sense as you do your debt service sensitivities, what sort of rate shock would start concerning you in terms of debt service coverage ratios. And I'm sure you lost a lot of business to nonbanks, even now and prior to the pandemic. Could you sort of compare what the credit standards and the debt sort of the structure standards are versus Key? But really wanted to focus on the sensitivity of credit to rates. And the second question for Ken is, you mentioned that operating deposits grew from 2019. Could you give us a sense of how much that has grown from 2015? Additionally, you gave us balanced growth from '19 to '21. What about account growth? We're just trying to get a sense of what these deposit betas could look like. And if you could give us your outlook on if we really do go 7x, what does that mean for deposit growth in the commercial bank as well as deposit betas?

So with regard to interest rate sensitivity, and I oversee the -- obviously, the real estate business, so this is a big issue for real estate, right? And we will consistently use underwriting rates that are at least 300 basis points higher than the current. So we're underwriting to like an exit interest rate of probably 6.25% when we evaluate our deal. So we still feel that there actually is pretty good room between the treasuries and the cap rate spreads to absorb some of that based upon what we're seeing in the forward curves. I mean most of our balance sheet activity is floating rate. We use our capital markets to place debt more permanently, and we also study those permanent mortgage markets in terms of how they're moving. So from our perspective, I think we feel good that we've got good sensitivity, and that's how we underwrite deals today, right? We won't put a deal on the book if we don't feel like we've got good exit sensitivity to be able to get out even in an environment where there's a pretty big shot. Now obviously, if rates continue to rise much more swiftly or rapidly than that, then you could see some challenges, but that's how we think about it. And from a client selection, I mean, that's really the name of the game. And we -- our client selection is outstanding, right, in terms of the wherewithal, the capability of these clients, the scale, the focus in the sectors where they have expertise. And they're all active in the capital markets as well. So they're following and pretty close to what's happening and repositioning their portfolios appropriately based upon what they're seeing happening in the markets.

Two things I would add to that. Thanks for that answer, Angela. I think one is what sector are you in? Right now, we have very, very little exposure to Class A office. And I think all of you will say, probably this is the first time you've been gathered with this many people in one room for a long time. Class A office is something that we've got under the microscope. We feel great about our exposure there. The other thing that I think you always need to be careful of when you look at a rising rate environment and some choppiness is what percentage do you have that's in construction. And our construction is...

10%.

10% total. So that's kind of -- as we think about really managing risks in a rising interest rate environment, we look where there's leverage and whether sensitivity, those are a couple of places we're paying attention to. I'm sorry, Ken, you're getting ready to answer the second question.

Yes. And then on the commercial deposit side, it was just incredibly important for us starting back in 2017, 2018 to look at the mix of our commercial deposits. And that's why you saw that shift from 74% operating accounts to 80%, 82%. And we were very disciplined in that to push away a lot of hot money so that we had less volatility in the book for exactly this reason. So when I think about in the current rate cycle, we have deposits that are really important for our customers to operate their businesses. As a result of that, we would expect less volatility than our peers set. And I think the 82% being a favorable percentage when compared to peers, I think, is a good data point around that. In terms of the commercial deposit growth back since 2015, you have a bit of a spike in there because of the First Niagara acquisition, which brought those up. But I'd say it's probably around 100%, but we can look at those numbers.

Thank you. Let's go to Gerard in the back. Ryan, we'll come to you next.

Thank you, Chris. Gerard Cassidy, RBC Capital Markets. Randy, Slide 24 that you gave us with your client case. Some people might say that's the holy grail of commercial banking, getting 4 distinct groups within your organization to work together to take this company all the way through its life cycle and obviously quite nicely. Two questions. First, how do you get all the different departments and groups to work together like this to achieve a successful outcome, as you showed here? And second, if incentive comp is part of the equation, what would that frontline teller receive as part of this transaction for starting the process?

Great question, Gerard. I think this is where we are incredibly advantaged. We're big enough to have all these capabilities, but actually small enough to bring it to bear for our clients because it is hard. And it involves cultural aspects. It involves remuneration, how do people get rewarded, and it also involves just navigating a much bigger organization. And it really comes down to our people. And we just have a very unique culture from that standpoint. We brought on this renewables M&A team last year. That team had never had any real integration at the former firm they were with into the balance sheet activities. When we acquire these boutique investment banks, we don't just overlay the M&A function over our corporate and investment bank. We have every aspect of our technology business, every aspect of our health care business under one leader, and they're managing that P&L, whether it's loans, leases, deposits, payments or investment banking fees. So that brings real focus to those businesses. And I think it's very, very unique versus our competitive set. And so again, we're big enough to have all these capabilities. We're small enough to bring it to bear, and also to make sure that our people are properly recognized so they feel incented and rewarded when these great things happen, always keeping the client at the front of everything we're doing. It's hard to measure, but we require it.

I mean the people sitting in the front of this room absolutely require that people work together. And that's hard to do. And it's hard for me to quantify for all of you who collaborates better. Who knows? But we're the people that review all of the senior people in our company. We just went through the process, and it's something we take really seriously.

If there's one point I could just add to that, Chris. I think sometimes it's hard to paint that picture internally, but I think there's a really interesting acid test that's out there in the market. When you start to look at some of the fintech partnerships that I talked about, you're going to hear more about this from Clark later. But that's an area where you have to partner outside your four walls with another really innovative company. And I think a lot of banks have struggled with that in the marketplace. It sounds like a great idea. A lot of banks are placing capital into those companies, but they haven't been able to monetize those relationships. I think we have, and I think it goes back to everything that Randy just said, it starts with the DNA. There's an expectation in the business. It gets into the incentive structures, but it also gets into recognition and sales process. So there's a structure that goes down the business that really supports it.

And I think the bankers, as I said earlier, they figured out that this is what makes us unique, and we've got to pull it together and leverage it. and everybody here is committed to it. Chris Gorman loves to be on calls. You can get him on a call with a client within 24 hours. And that's powerful. That doesn't happen everywhere, and we take advantage of that at Key.

Ryan, you were next, I think.

Thanks, Chris. So a couple of questions I wanted to ask about. So you talked about adding 25% more new bankers to the business. Can you maybe just talk a little bit like which verticals specifically are you looking to add? Is it broader? And are there any where the revenue opportunity is larger as you bring them on? And then I guess related to that, you said it's about an 18-month ramp up. Are we actually seeing -- are we assuming that over time, we're going to see revenue per banker improve across the platform? Is that a major part of the growth? Or is there an expectation of it to be more steady? And I guess the second thing is, I think Randy or Angela talked about we just have a small piece of the overall market share. And I'm curious, as you continue to expand the business, how do you think the product offering is going to evolve over time as you potentially target larger middle-market customers for you brought down across more subverticals within the verticals?

Great question. So let me kind of take the first one on. The first one, are we going to be focused anywhere in particular? The 4 -- not exclusively, but the 4 areas where we're leaning in and leaning in hard, and we talked about it today, it's technology, it's health care, it's affordable housing, and it's renewables. Ryan, those are areas that we just see huge, as I described, secular growth in. Secondly, a big part of what we've asked Randy and Angela to do is to raise the level of play of all of the bankers. So yes, we want to bring people on and have them productive. But that productivity, we will drive productivity and we continue to invest in and drive productivity. There was a third part of your question, and I'm going to flip it over right now to Randy and Angela. Why don't we spend a little bit of time talking about the 2 unitranche deals that we launched because that's a new product as opposed to just bankers. And also, the incredible opportunity we have around the syndication -- equity syndication capability and affordable. Randy?

Sure. So a couple of things that I want to make sure everyone's clear about, it's not just about hiring external talent, although that's certainly a big piece of it. It's also about developing our own base of talent. So we're investing in both areas because as we talk about culture, that's a really great way to sustain and elevate the culture if you're that destination platform and people can go from an analyst up to an MD. And so that certainly is a big driver of those numbers. I think last year, about 40% of our banker growth came from the 4 verticals that Chris just mentioned. As it relates to unitranche. We launched 2 funds here in the last year and the beginning of this year. And these are institutional debt funds, Erika mentioned earlier that we had been -- we probably lost some share there, and we had. By launching these funds, one, I think it speaks to the power of our platform. Welltower is our equity partner and our health care facilities-based fund, which I don't think you can get a better stamp of approval than the largest owner of health care real estate in the world wanting to partner with us on this initiative. And we haven't been public with our partner on our middle market lending capability, but that too is a very substantial asset manager. And we really had to get great alignment around what good business is and obviously make sure that our credit underwriting fit with each of those firms culturally. We're seeing great uptake. And this is really a way for us to participate in that market in a manner that's consistent with our moderate risk appetite. I don't -- to answer your question directly, though, we don't have a lot of capabilities that we need to invest in. We've made incredible progress on that front over the last decade. So it's really about continuing to incrementally add to those capabilities as well as obviously do that in alignment with how we think about our industry growth.

And then what I would say relative to banker growth in addition to the verticals, you heard Victor talk a little bit about growth in the West. There's -- our Western franchise is growing fast as well. So that's a place where we're looking bankers and then in other pockets like Hudson Valley Metro, New England. Actually, the state of Michigan for us, we've got some great opportunities to go deeper. We've added a satellite office up in Grand Rapids. So there is some geographic play where we think there's more targeted companies in our sweet spot that we think we can get after with the right talent in addition to the verticals. On the affordable housing side, so as Chris mentioned, we're active in the space where we were the #3 lender in the past year. Bringing our own equity syndication platform to bear gives us the ability to really be a one-stop shop, right? We're providing debt capital. We're providing mortgage banking. We have a large mortgage banking platform. And we always make investments for our own account as a CRA investor, right, into low income housing tax credit funds. But to be able to be a syndicator and raise funds with multi-investor funds or even proprietary funds for investors really enables us to control deal flow, frankly, and drive more debt, more mortgage banking and even deposits and payments, right? In addition to asset management fees and syndication fees, which could be 3% of a raise, right? So it's meaningful business for us to bring it all in-house. And we've got the relationships, we can do it. So as Randy said, that's an example of we're already in the space, we're already active, but just taking that one more step to bring it in-house gives us a little bit more leverage to drive more revenue.

Maybe just the last piece I would add to that is it's important. We win in this space when we deliver the whole bank. And I think that's exactly where Angela is ending there. And if you think about the fact that we've shown the success of when we have a business customer, 90% of the time, they're using some type of payment capability, only 73% of them are highly engaged. We have all this opportunity to get them more engaged. And when you look at each of the products that I talked about in merchant and card, we're so underpenetrated. So this trajectory has a lot of runway in front of us. We got to deliver both sides of it.

We've got time for a couple more and then Ken will have -- we'll let you have the final question, and then we'll go to you in the next session, if you don't mind. All right. Let's go.

Ebrahim Poonawala, Bank of America. I just wanted to double-click on the 4 secular growth sectors you've highlighted. You've been early in renewables, as you mentioned. When you talk to most banks, large or small today, these would be the 3 or 4 segments they would highlight as where they are focused on health care, tech, renewables. Just talk to us in terms of what differentiates Key? Is it the go-to-market strategy, the talent, the technology? I'm assuming it's all of that, but would love to hear just in terms of as these -- there's a secular growth aspect to it and there's a market share aspect to it. Just would love to hear what differentiates Key relative to 50 other banks who are competing in the same space.

So I'll make a couple of comments, and then I'll turn it over to the practitioners who are running it day in and day out. First is we have a huge leg up. I mean, when you start and you're the #2 player in affordable financing -- I'm sorry, renewable financing, #3 in affordable financing, you've bought and successfully many years ago, integrated a technology investment bank, you've bought and successfully integrated a health care bank. One, you're really integrated in a way that others aren't and you have a huge head start. So those are 2 kind of fundamental things. With that, let me turn it over to Randy and Angela to fill that in.

Yes. I think with regard to renewables, I'll touch on that and maybe let Angela speak to affordable housing. These are complex niches. And whether it's understanding power curves, really getting into the nitty gritty and power purchase agreements, it takes a lot of expertise. And it's not just one person, it's a team, a very large team, whether it's our credit risk partners, our portfolio management teams, obviously, our frontline banking teams, all the junior resources below that. So we've been doing it now for over a decade. We've got just an incredible cadence that we can speak to and an infrastructure in place that is very differentiated. The other thing I would just point to is that we've been very innovative. If you look at the institutional loan market, we are leading the inaugural transactions for renewables clients in that loan market. You're going to see renewables companies start to go public, and you will see us at the forefront of that. So we have deep relationships. We know where the puck is going, and our teams are very, very highly aligned to go after it.

Yes. And we -- I'll just say a few things. We talked about health care and technology, right? I mean health care, having the second most active M&A boutique in the country and to be able to align that expertise when you think about the deep expertise they have across many subsectors within health care, our bankers can tap into that when they're going into behavioral health or managed care or it's incredibly empowering, credentialized or, if you will, when you're trying to win the banking business. So we leverage that. We leverage that deep expertise that we have, and we can turn it into meaningful relationships. And we are -- Ken can say more about technology, but embedded payments, I mean that's leveraging software companies that are clients, right? They are in our tech vertical, and it's just pulling the pieces together. On the affordable side, it used to be a very small CRA driven kind of business that every bank has in the country. We pulled it in, frankly, to our real estate platform about 5 years ago and recognize this is a business we can grow out. We need to be in it. It's a smart business. There's more demand than supply. But we can make this a good business. We can generate fee income through mortgage banking, through payment, through now equity syndication, and we're doing that. So it's lifting it up and giving it resources. And so that does mean investment in talent. That does mean investment in capabilities. So we've done those things, and we will continue to do those things. As I said, we're not sitting still. We're going to figure out the things that we need to continue to do to drive those platforms forward.

And the brand is reinforced, to Angela's point, when you've had the #2 health care investment banking team in the country in there talking about what's going on in the marketplace, and then we show up with our health care payments-focused team that's organized around that space and we can talk about revenue cycle management, we can talk about consumer pay responsibility. So our teams are built around that, the fintechs partnership with Rectangle Health, our solution specific in that space. So end to end from the banker through to the payments team and our partners, we organize around these focused areas.

And this is a fundamental difference. I know it sounds like everyone is doing the same thing. Everybody has a health care group. We go to market as an industry vertical. It's not like we're set up geographically, and we have these health care experts that are off to the side. So it's just -- it is -- and it's a lot harder to run, by the way. It's a lot harder to get it wired up, obviously, because you have people going. Great questions. I want to be respectful and keep us on time. Ken, I'll give you the last question. Steve, you'll have the first question in the next session. Ken, what's the -- what's your question, please?

Great. Thank you. So on Page 18, you showed the pie charts and how it's been more diversified. But we don't see the -- which are the product sets in there. So I wanted to ask you just to maybe kind of help us detail, you talk about ECM, which one is that of the product sets, if you don't mind? And then also just do the other product sets have stability, meaning the commercial mortgage, debt capital markets, public finance, those are all more rate-sensitive businesses. What kind of stability do they have throughout tough cycles?

So let me take that first part of that. We've never disclosed it by products, and we frankly don't intend to start disclosing it by products. I can tell you that obviously, of anything, the most volatile is always new equity issuance, as all of you know really well. Debt, you can always sell debt at a price every single day. The new issue equity is binary. Some days, the market is there and some days, it just isn't. So with that, let me send us to break. Great, great questions. We're going to come back promptly at 10:15 where Victor Alexander is going to lead off. So we've got a little bit of a 10-minute break or so. Thank you so much. Really appreciate the engagement. [Break]

Hey, gang, if we could if we could get people back in their seats, we'd really appreciate it. We're -- obviously, it's another interesting day in the market, and we're trying to be respectful of everybody's time. Thank you. I really appreciate it. Thank you all. With that, it is now my pleasure to introduce Victor Alexander, who runs our consumer business. Victor, the floor is yours.

Thanks Chris. Welcome back from break. For this next portion of the day, we're going to spend some time focusing on our consumer franchise. I'll share some perspectives on our retail and wealth businesses, and then Jamie and Alyssa will take a deep dive into Laurel Road. You'll hear me hit on a few key messages throughout, which I also want to lay out upfront. First, we are intensely focused on executing our relationship strategy because it delivers the best outcome for both our clients and our shareholders. At the highest level, we're constantly asking ourselves, how can we win in the market and get more clients, personal and small business, to say, Key is my primary bank. How can we deepen with the more than 3 million consumer and 250,000 small business clients who have some relationship with Key today. As we're successful in growing the number of primary bank clients, we will increase checking balances, payments income and assets under management within our wealth businesses. We call these our relationship revenue streams, and they're all durable and annuity like, and all generate very high returns on equity through the cycle. This focus has enhanced our ability to execute. Over the past couple of years, we've performed better than we ever have in many core areas of our business such as household growth, checking sales, loan growth and organic growth in assets under management within our wealth business. And as we look towards the future, we're well positioned for continued relationship growth with both new and existing clients. First, we think clients, both today and over time, will prefer a combination of digital and physical channels, and Key is fortunate to have a strong foundation in both. Our ability to add new households to Key is enhanced by our sizable and growing presence in highly attractive Western markets and our ability to deliver for clients in important moments of truth like the purchase of a home. We also have a meaningful opportunity to deepen relationships with our large existing client base, a nice competitive advantage for us and one that most fintechs would love to have. The simple fact is we can do more with hundreds of thousands of clients who already do business with Key today. So in short, we have what it takes to compete and win client relationships in both consumer and small business now and into the future. With that as background, let's dig in, starting on Page 40. As I mentioned, we have the ingredients to grow. We have a strong product set at Key, the capabilities to help every client, from the young person trying to build a credit history, purchase that first home and avoid bank fees to the suburban family thinking about getting rewarded for everyday payment activity, reducing debt service costs and planning for the future, to the successful business owner planning for a liquidity event in their estate, Key has a product offering that can meet their needs and make them better off. We deliver this rich product set to more than 3 million clients through a combination of our digital channels, 1,000 branches and our contact center. Our physical and phone channels are supported by 10,000 of my teammates who are passionate about delivering crazy good service and doing the right thing for our clients, every banker, every client, every time. As I mentioned at the outset, we have a sharp focus in our consumer business on growing client relationships. We define a relationship client as one who has a primary checking account, think direct deposit at Key, plus either a savings or investment product or a lending product. One of the most important ways we measure our success in this effort is in the growth of the relationship revenue streams of checking, payments and wealth. As more clients call Key their primary bank, our operating account balances will grow, our payments revenue will increase as we become a more important part of our clients' everyday lives, and we will grow our assets under management as we increasingly help our clients plan, save and invest for the future. What's common about these revenue streams is they are extremely durable and annuity-like and also generally less exposed to loss in credit or other downturns. In fact, in total, our relationship clients generate 4x the revenue, perform 3x better from a credit perspective and are far more likely to remain with Key. As a result, their through the cycle return on equity is extremely attractive, well north of 20%. Quite frankly, I think consumer checking, payments and wealth management are among the most valuable revenue streams in our industry. At Key today, more than half the revenue from our consumer business is within these categories. And as we successfully execute our relationship strategy, this contribution should only increase. On Slide 42, we provided some of the more recent actions we've taken to make our focus on relationship real. One of the thing I'm most proud of is we're not just walking around saying that we're a relationship bank. It's actually pretty easy to do and reasonably common. On the other hand, we're doing a number of things, big and small differently, to grow relationships and make our strategy real. We exited indirect auto lending, which by its nature is a nonrelationship business where clients are acquired through dealerships and like all other providers in this space, we had essentially 0 success in broadening our relationships with our end borrowers. The simple fact is indirect auto is a nonrelationship business for Key and the industry. It also means that the business, while a source of consumer loan growth, we had $4.5 billion balances at the time we made the decision to exit, delivers returns well below our corporate targets and our core relationship-oriented business. We also remixed our incentive plans across the retail network to reward our team members for their ability to drive relationship checking, shifting focus and dollars from other products and also sharpening our criteria to highlight the value in relationship checking versus other deposit products. We believe the core operating account is foundational to relationship banking. Our aggregate incentive dollar amount paid to branch bankers for checking accounts increased approximately 4x from 2019 to 2021. And to qualify for a payment last year, it required a relationship checking account, think direct deposit. We also significantly shifted our marketing focus, spending essentially no time and resources on messages for higher rate, nonrelationship money market acquisition campaigns, reallocating those resources instead to our campaigns more focused on our relationship revenue streams such as checking and payments. These actions are just a few of the tangible examples of the way we're driving this cultural change through the organization, making it real for our teammates and our clients. Our focus on the relationships and the associated revenue streams has also enhanced our ability to drive successful business outcomes in these areas. As Chris always says and Page 1 of our presentation today, focus propels growth. Page 43 depicts the results we've been able to achieve by sharpening our relationship focus. Record levels of checking sales are driving the strongest net household growth in Key's recent history. Our new clients are also younger and more likely to open a savings account with Key. They're also more likely to start their relationship with us through the purchase of a home. Roughly 1/3 of our mortgage volume is with new to Key clients, and we've had regular success and deepening relationships with these clients. Our payment sales in both consumer and small business established new sales records in 2021. I'm also pleased with the recent performance of our Wealth Management business. Wealth is a core relationship business. And in 2021, our sales of new managed money products were up 50%, 5-0, over our recent performance. This growth should benefit Key in future periods due to the recurring nature of money management fees. Wealth is good business for us. We managed nearly $55 billion for our clients, and one I expect will continue to grow steadily over time. Lastly, our client experience, always something we're trying to strengthen has improved in recent periods. We spend a lot of time on this, listening to our clients, observing best practices from within and outside of banking, and focusing on making improvements, big and small, to make it easier for our clients to bank with Key. Driving stronger client experiences for us will be a journey without end, but over time, can be hugely impactful to our business as our clients stay with Key and refer their friends, family and colleagues. For the remainder of my presentation, I'll speak to why I expect us to continue to be able to execute and grow relationship clients and relationship revenues at Key, while remaining within our moderate risk appetite. First, as shown on Page 44, I believe our omnichannel approach is the winning combination for both clients and shareholders today and into the future. As you've heard a number of times already, our strategy starts and ends with our clients. We strive to meet them where they are and bring our product solutions and expertise to help them thrive. On this dimension, it's evident that our clients value the ability to leverage the higher touch, more personal and frequently more consultative experience of a branch and the convenience of a digital channel. They also like the peace of mind that comes from knowing should there be a problem, should they have a question, they can easily get in touch with one of our bankers either in person or over the phone. After all, it's our clients' financial assets and well-being that they're entrusting to us. It's pretty darn important to them. We believe our physical and digital channels are complementary, not competitive and work together to strengthen Key's value proposition for our clients. We see this play out in client behavior with our best clients, those with the strongest, deepest, most enduring relationships with Key, actively engaging across both physical and digital channels. In fact, 2/3 of our relationship checking households are actively engaged with us across both channels, which we like because we know that client attrition falls by nearly half when we have active multichannel engagement with our clients. We also see an increase in revenue. Clients to engage with us across digital and physical channels generate 20% more in annual revenue versus clients who engage in only one. While we want more engagement across both channels, we've also been on a multiyear journey, which is continuing to follow our clients' behavior and optimize our investment between our physical and digital channels. For Key, this has meant ongoing reductions to our branch footprint, totaling 16% over the past few years, the largest number of which occurred in 2021. In the branch network overall, our deposits per branch have grown by 75% over the past 4 years and now rank above the peer median, which we view as an important indicator of scale, efficiency and relationship opportunity at the branch level. We took this ground through a combination of above-market deposit growth rates and a proactive effort to optimize our network for the shifting role of branches. Our improved branch efficiency has furthered our ability to invest in our digital channels, where we have recently made enhancements to the client origination experience for checking accounts, savings accounts, our secured credit card, mortgage and small business lending, and we expect to drive further improvement later in 2022 across consumer and small business card, small business deposits and other areas, including significant enhancements to our contact center technology. We're also making it easier for our clients to self-serve on their terms. Our App store rating has improved from 4.0 to 4.5 as we continue to invest in mobile capabilities. Collectively, our channels are working better than ever before for the benefit of our clients. You saw that on the business results earlier and also in the client sentiment scores on this page. Turning to Slide 46. Our significant exposure to attractive markets in the Western United States also makes me optimistic about our future growth prospects and consumer. I think, frankly, we underappreciated this opportunity for many years. I know I didn't fully grasp our potential in the West until 2019 when I was asked to lead the mortgage business, and I started to spend a significant amount of my time in Salt Lake City and Denver and Seattle, Portland and Boise. I'm from Cleveland. And the reality is these markets are just very different. And not just in that their football teams are usually better than mine, the amount of growth occurring is just tremendous. And we're really fortunate to have a sizable presence that will expand over time in these great markets. About 1/3 of our branches are in these geographies where population growth is strong today and is projected to double the U.S. average over the next 5 years. In these fast-growing markets, we've also demonstrated an ability to take share, growing deposits 15% faster than peers over the last 4 years, largely driven by new client acquisition, which clocked in at greater than 6% in 2021. Additionally, while our mortgage business has been growing at a solid pace across the franchise, it has been particularly strong in the West, where our volume in 2021 was 7x what it was in 2017 compared with market growth of 2.5x in those states overall. We're continuing to double down our investment in these attractive markets, which will be a primary driver of our growth into the future. While the new client growth should be the fastest in the West, I expect us to grow across the breadth of our franchise. The vital organs of Key stretched from Toledo to Albany through Cleveland, Buffalo, Rochester and Syracuse, where we have a healthy growing franchise with solid market share. We're also in good markets across Central Indiana, Central and Southwest Ohio, Southeast Michigan, Pennsylvania, the Hudson Valley in New England. The majority of our clients today are in our eastern markets, and we have a meaningful opportunity to do more with them. As I shared at the beginning of my remarks, the focused execution of our relationship strategy has delivered results on this front over the past 2 years, higher mortgage volumes, stronger savings cross-sell and strong wealth management production as a function of our collaborative approach. But I think we're just getting started and still under-penetrated versus the opportunity. The investments we've made in our product set, delivery model, analytics capabilities are unlocking the opportunity for Key to identify and ultimately meet more of our clients' needs. As you see on Page 47, we have hundreds of thousands of clients doing business with Key today, many of whom trust us as their primary bank, we can provide incremental value through our lending, payments or wealth management capabilities. We're also investing to make our solutions even more competitive for clients, including the segments shown on the right-hand side of this page. Later this year, Key will introduce a new bundled offer for our mass affluent clients, providing value to them across the breadth of our capabilities, from banking to planning and investing. We're also going to strengthen our offering for what we term the emerging segment, clients who primarily rely on Key for everyday banking or who may not be well served by the banking system today. For these clients, in addition to our industry-leading hassle-free account, which has no overdraft, monthly maintenance or minimum balance fees, we're going to enhance the remainder of our checking suite by implementing features such as a new de minimis threshold, whereby clients won't incur fees for negative balances below this level, a new small dollar-lending product, which will provide clients short-term liquidity up to $1,000 for a nominal fee and early wage access, giving clients access to their paycheck 2 days early. We're also refreshing our fee structure, including standard pricing and daily limits. We expect these changes to begin to go into effect in the third quarter of this year and that when fully implemented, to result in an approximate 65% reduction in our consumer and small business NSF overdraft fee income. Don also asked that I share that this reduction is already incorporated into our 2022 guidance. We also expect to benefit over time as our strong and improving competitive position helps us attract, retain and deepen relationships with our clients. Moving to 48. When you add everything up, I expect the Consumer Bank to be a steady, consistent source of growth for Key. As we continue our trend of recent execution, we will deliver growth in relationships driven by new client acquisition and deeper relationships with our existing clients. As with the rest of our business, we think the sharpened focus on growing client relationships integrated across our operating strategy, incentive plans, marketing, analytics and technology areas will result in better execution than Key has historically achieved in consumer. In 2021, we grew relationships at the fastest pace since we started tracking this metric, and we expect to continue to deliver solid annual growth in client relationships. In total, we expect to generate 5% annual growth in relationship households through 2025, which, as you see, would be well above Key's historic average on an organic basis. Before I pass the microphone to Jamie and Alyssa, I want to reiterate a few key points on Page 49. First, we are intensely focused on our relationship strategy, delivers steady high-value revenue streams, the most valuable revenue and banking. Over the past 2 years, we've delivered a step change in productivity and business performance in our consumer bank, and the momentum continues to build. We're well positioned for the next leg of growth as our omnichannel approach meets clients where they are and delivers deeper, more engaged relationships and stronger returns for our shareholders. We benefit from our presence in fast-growing markets where we're adding clients and taking share, and we continue to unlock the opportunity to deepen relationships with our large existing client base and in attractive segments. Taken together, we expect to grow consumer bank client relationships at a pace well in excess of our historic performance, which will drive growth in stable funding, fee income and returns for Key. I'm very excited about the future of consumer banking at Key. And with that, we'll turn the presentation to Jamie Warder and Alyssa Schaefer to discuss the strong progress occurring at Laurel Road.

Thanks, Victor. As Angela mentioned earlier today, the health care industry is 20% of GDP and growing at 6%. It's an industry that I know you've heard this morning, Key has chosen to focus on deliberately and where we think we're well positioned to win. Our focus on health care spans our full bank from institutional through consumer. We have built expertise at multiple levels to serve this rapidly growing industry in a differentiated way. What we want to share with you in this next portion of the day is exactly what health care differentiation looks like from a consumer perspective. Our answer to serving this critical segment was supercharged with the acquisition of Laurel Road, a fintech company that's focused on the growing market of student loan refinance. This is the second largest debt category in the United States. Laurel Road joined the Key family in April of 2019 and has since originated over $6 billion in high-quality consumer loans, while also serving as a critical beachhead for strategically winning in health care. Joining me today is Alyssa Schaefer, the Head of Laurel Road, who joined the company in its infancy as Chief Marketing Officer. Alyssa and her team have done a tremendous job of building out truly curated experiences that we believe is the key enabler for building targeted scale and consumer banking.

Thanks, Jamie. Importantly, all of our $6 billion of loans are originated online by super prime borrowers who we call members. Our members are primarily health care professionals with an average FICO of 780 an average income of $240,000 and great future earnings potential at an average age of only 33. Laurel Road has established top share among private student loan refinance providers, now in the top 3 originators in the country. Our student loan refinance offering was the foundation that allowed us to expand Key's footprint to a national and digital reach, providing a customer acquisition engine that creates significant value for both members and shareholders. We have built targeted scale with health care professionals through an array of marketing strategies, including partnerships with leading affinity groups. These relationships such as that with the American Dental Association are exclusive, and we have held them for a number of years. We also continue to add strong partnerships in the health care segment. The American Nurses Association is a more recent addition to our portfolio of more than 80 such partners. Partnerships are important to our strategy as the ADA has market share of approximately 70% of dentists in the country. And other partners have hundreds and thousands of medical professionals that look to them every single day for advice and partner recommendations. As I mentioned, our partner relationships are exclusive. We are the only student loan refinance provider that is endorsed by these large incredible organizations. And as we've delivered for them and their members, simultaneously growing our own product set, we have expanded these partnerships over time. I'd like to go into more detail about one of our partners, the American Medical Association. They are the largest association of doctors in the country with over 0.25 million members and have been our exclusive partner since 2018. A year later, we added mortgage and personal loan products geared towards doctors to the suite of products offered through the AMA. And when we say offer through, we don't just mean an endorsement on a website. The AMA is partnering with us to create a full marketing plan to most effectively reach their members to recommend Laurel Road. Activities range from webinars to in-person events, digital targeting and more. This type of 2-way commitment to partnerships is critical for success and is made possible by tangible value that Laurel Road provides our members and our partners that other organizations simply cannot. After 2 years of exclusively offering our consumer lending products, the AMA came to us in 2020 and asked if we could offer practice loans to their members. We opened up that capability by funneling leads to our Key colleagues. Today, we are also offering deposit products to the partnership. Through the AMA, we have originated nearly $1 billion in loan volume across all products and have grown the number of AMA members who are now Laurel Road members by an average growth rate of 142%. The AMA and other partners in our portfolio are hardly sought after by other fintech companies and banks. As a testament to the strength of our partnership, they have continued to grow the relationship with Laurel Road to ensure their members benefit from our differentiated health care-specific products and services. Now on Slide 53. The strength of our member base and partnerships behind us, we made a bold move to expand into a full-service national digital bank focused on doctors and dentists last year. On National Doctors Day, which is March 30, we officially launched Laurel Road for Doctors. The only digital bank serving doctors and dentists in all 50 states with a suite of customized lending and deposit products. Now we've been asked in the past if Laurel Road for Doctors is a marketing spin. It is not. All of our products and digital experiences for doctors are informed by feedback from more than 1,000 doctors who we engage through quantitative and qualitative research. We heard what their needs are directly, which informs our product designs. Each product has unique features geared towards the needs of doctors. For example, we have gained great traction through our differentiated bundling experience, coupling together student loan refinance with deposit products in a seamless experience, so that when you use your deposit product as your primary account, you can earn discounts on your student loan. All of this is accomplished through a beautifully integrated digital origination experience, something no other competitor offers. This offering and others like it appeal to the needs of young doctors and have contributed to a 900% growth in our relationships for those customers who have more than 1 product. Today, over 1/3 of our customers after launching Laurel Road for Doctors, have established a multiproduct relationship with us. Now in addition to our great suite of financial products, we created a holistic experience for members with targeted advice, and data-driven insights, coupled with premium servicing that gives doctors the data points they care about and ensures they have someone to engage with both digitally and on the phone on their schedule. As we leverage deep relationships from research to launch Laurel Road for Doctors, we continue to learn from doctors in our design target. We have a panel of doctors and dentists that help inform our strategy and engagement efforts. We even have a doctor on staff who is consulting with us on a regular basis to provide input and feedback on our offerings. In short, we are evolving to a targeted relationship-driven digital bank through a full suite of products and services all informed by doctors and dentists themselves. Our products yield a 70-plus Net Promoter Score, which speaks to the strength of our offering and the ease of our technology. And these are high-quality, valuable members. The lifetime value of a doctor or dentist member is 4x that of their non-healthcare counterparts. What's so exciting about Laurel Road for Doctors within KeyBank is it allows us to scale and grow nationally, but do so in a targeted way, which enables efficiency, effectiveness and a deep knowledge of our members that provides for diligent risk management. We focused our brand marketing on areas with high density of advanced healthcare professionals per capita as well as those with large hospital systems such as Boston, Atlanta and Houston, to name a few. We are bringing valuable members into the bank that Key would otherwise not be able to reach. 80% of our members are outside Key's branch footprint, and we know we are reaching at least 1/3 of doctors online every single month. What we are seeing from our brand marketing investments is that this segment continues to have great potential for Key. From a modest investment last year, we increased traffic to our website in targeted cities by over 200% and increased awareness by 40%, so that now 1 in every 3 doctors is aware of Laurel Road and our offerings. In quantitative research, we asked doctors, "What financial institutions offer solutions that are tailored to people in my profession?" Among a set of competitors that includes large fintechs, digital banks, money center banks and regional banks, Laurel Road for Doctors ranks #1. Our nearest competitor showed up approximately half as favorable, even with significantly higher marketing spend. To say the least, we are seeing momentum in our brand awareness, which is making a material difference in our marketing efficiency and our relevance with doctors. As I mentioned, over 1/3 of our members since the launch of Laurel Road for doctors have more than 1 product with us. One such member is Dr. Jeffrey Martinez, and he has -- he happens to be from New Mexico. Dr. Martinez is a dentist and a member of our partner, the ADA. He refinanced his $300,000 student loan with us back in 2015 and enjoys an added discount on his loan rate as an ADA member. When he was ready to buy his first home last fall -- and again, this was only 6 months after the launch of Laurel Road for Doctors -- he looked to Laurel Road for his mortgage. Later last year, when we launched Laurel Road for Doctors Checking, he added that product as an additional account to manage his daily spend. Dr. Martinez first came to us through the ADA partnership and for all other products, he came to us directly through the Laurel Road website. To create a true relationship like this in a digital way is unique, and we believe more and more members over time will look like Dr. Martinez. We are actually seeing this happen every day. Speaking of our members, we talk a lot both publicly and every day inside our company about our mission to treat them to financial peace of mind. While Jamie will speak next about the impact of Laurel Road on Key as a whole, I will leave you with some perspectives directly from 3 of our members. Let's hear what they have to say, unscripted, about Laurel Road and why we are different. [Presentation]

That's who we're serving. That video doesn't get old for me, especially at the time where our healthcare heroes have faced such monumental challenges. It's just a rewarding thing to be delivering in our mission to them every day. So as we move on to Slide 57, I'll just reiterate that Laurel Road is a powerful engine that we'll continue to leverage to drive outsized growth in a strategically aligned way with relationship-based, targeted scale on a national level through a digital-first approach. As Chris has shared publicly, in 2022, we plan to expand Laurel Road beyond doctors. We will be a leading differentiated bank for all healthcare professionals. Healthcare, as we've talked about, is one of the fastest-growing industries in the U.S. with a workforce that is expected to grow by 2.6 million by 2030. This is on top of a very large base already. This year, we will extend our products and services to the country's 4 million nurses while continuing to build on our unique ability to serve healthcare employers like hospitals and hospital systems. Our differentiated affinity approach, coupled with the tailwinds in this industry, will drive accelerated, sustainable growth for Key. By 2025, we will serve 250,000 high-value member households under the Laurel Road brand. That will be growing the business 5x over this time period. And this growth represents $300 million of annual sustainable relationship-based revenue. So as we move on to Slide 58, let me now talk about the symbiotic relationship between Laurel Road and the broader Key enterprise. Key has made Laurel Road stronger and better through its core systems, developer security operations, open banking infrastructure that allows engineers to innovate and a strong risk management framework that keeps us well managed. These are assets that many fintechs just don't enjoy organically. But similarly, Laurel Road has made Key better and more future-ready: agile delivery, proprietary applications built in the cloud, fintech quality experiences and componentry, which we're reverse integrating into Key. Laurel Road also brings a suite of products that many of our commercial and Cain Brothers clients, namely hospitals and academic medical centers, will find valuable as a benefit for their employees. This business also serves as an incubator for great digital talent, benefiting our entire enterprise. We have a senior marketing and partnership team that knows how to drive digital first growth, advanced data science talent and capabilities and a strong base of full stack engineers that we continue to grow at pace. We've increased this progressive talent at Laurel Road twofold since the acquisition. What's happening at Laurel Road is exciting, but it's also 1 example of a proven capability for integrating entrepreneurial businesses and allowing them to continue to operate with speed and innovation within and while also improving our scaled company. We've really been innovating on an operating model that helps with this. This includes specialized HR practices, intentional management of distinct brands, open banking that speeds interoperability, external advisory boards that replicate venture capital and specific roles within the bank that help Laurel Road move at speed while still remaining well managed. Clark and Arjun will cover that even more in a moment. But it is this deliberate approach to collaboration that has enabled us to launch a full-scale digital bank in 6 months. We just have not seen this anywhere else in the industry. So if we flip to Page 59, we really like our competitive positioning here. We have seen other affinity banking models work well. You've seen it in military, emerging affluent venture capitalists. Of course, every bank in the land says they have a health care offering. But often, it is the exact same products, services and branches with some stock photos of dentists on their web page. We have also seen the momentum of some startup born digital financial services players that play nationally. They bring great design and engineering to narrow slivers of the value chain. They often are dealing with a limited product set and a higher cost of capital. We think it's our unique combination of a skilled banking platform, broad and deep healthcare expertise, national scale and a full-service offering that position us well strategically now and in the future. And we're seeing the proof: Our LTV over CPA and ARPU match some of the best fintechs in the industry. So let me close before we invite Chris back up on Slide 60. In summary, I want to emphasize the strategic growth opportunities that Laurel Road represents for Key. In less than a year, we've taken an already strong core business and built a targeted relationship-based digital-first bank for healthcare professionals. We are laser focused on growing this business. We'll leverage our industry expertise, our breadth of offering and our strong affinity partnerships. The agility, speed and innovation focus at Laurel Road will continue to make Key better and more progressive as a whole. And finally, Laurel Road is a great proof point of one of Key's differentiated strengths: a track record of integrating focused entrepreneurial companies that drive value and make our whole enterprise better. Chris, with that, I'll let you back up.

Well, thank you, Jamie. Thank you, Alyssa. Victor come on up, if you could. A couple of things. Focus propels growth. Same thing as you heard on our commercial side, you've got the combination of a lot of focus, really great capabilities and the ability to work together. And I think that is sort of the secret sauce as you think about stitching all this together in that the digital channel can make the branches stronger and vice versa. I'm going to go a little out of order right now. We had received a couple of texts, people wanting us to brief just a moment on Key's exposure with the terrible things that are going on, both in the Ukraine and in Russia. I am pleased to report -- by the way, Mark Midkiff, our Chief Risk Officer, is here. As you can imagine, we've been doing a deep dive on this for the better part of the last month. I'm pleased to tell you we have really no meaningful exposure -- as in 0. We have no exposure to the Russian banks. We obviously, through some European banks, would have some de minimis counterparty risk that we're not worried about. It will impact the supply chains. These middle market companies are doing business in places like the Ukraine. And for example, there's a lot of aluminum, just to pick 1 thing, that does come out of Russia. I just wanted to mention that to the group. I know it's front and center for many of you, and it clearly is front and center in the market today.

With that, it is my pleasure to call on Steve Alexopoulos of JPMorgan for the first question.

So first -- I have 2 questions. So first for Victor. Regarding the omnichannel approach, your client satisfaction scores look like they're getting better, but it's not clear what they're getting better from or to, right? You disclosed Laurel Road, 70-plus NPS. Why not disclose the NPS for the rest of the business?

Yes, that's a good question, Steve. One thing we do disclose we talked about today, it's out in public domain is the App Store rating, which is something we look at pretty closely, and we've been able to move that. I'd say, first, client experience is very important to us. And we spend a lot of time thinking about it and not just digitally, but holistically across Key, how our clients feel. And we've been on the journey of moving it further north for some time now, and I think we're making really good progress. See some of our internal metrics in here. We're not up to Alyssa and Jamie standard across the business today. But we're a lot closer than you might think. And I think this focus -- with our focus, we'll continue to move it in the right direction. One thing, I did just get an e-mail this morning, which is good. When we had the mortgage business in 2019, that business was a 19 NPS; we've moved it to a 60 and just last month, we made 70. We'll break some internal news as well. It just shows the result of years of persistent focus, and we'll have that same challenge in the broader consumer business, but it's the team, it's our technology partners, it's thinking how can we make each and every experience better for our clients and it's doing a ton of listening to them and actually paying attention and then circling back with improvements. And I've seen us be able to move the needle, where we've had this focus over time. You see it in the App Store rating, we see it in home lending. I'm pretty confident over time, we'll see it in the broader consumer business as well.

And then secondly, so following up on the relationship approach you're taking and the embedded banking initiative, is the embedded banking initiative white label or is that an opportunity to have relationships with the end-user consumers? And how is Laurel Road involved in that initiative?

[ Stacy, ] if you could take the microphone over to Ken Gavrity and let Ken Gavrity address Steve's question, please?

Sure. Great question. And we were talking about this on the break with a couple of folks. I think when you think about indirect auto, and that's a business we're not interested in because I can't touch the end customer. The difference in embedded banking is that although Rectangle Health, for the example that I was giving, is the technology customer that is our direct relationship, I now have the dentist office logging every day into that software, so I can engage them every day. It's not white labeled. They know that it's Key. And so the obvious progression here is we want to go from payments as a starting point, but we want to build the entire relationship around that. And I'd also mention the fact that the data that goes along with that is building data assets that's making us much more powerful in understanding the space.

And Steve, I'll take the second part. 50% of dentists, 25% of doctors are also business owners, right? They're bought into their practice. And that creates -- we see opportunities now. We see opportunities in the future around embedded banking, serving their practice management needs. So already on that path and thinking about it kind of now and later.

Erika.

I have 2 questions. The first is -- what is the advantage of having Laurel Road as a very separate brand from Key? And piggybacking off of Steve's question, you won't reveal the NPS score -- what is the big difference between the 2 systems in terms of, obviously, the difference between NPS scores? So I guess that's the first question. The second question is when you gave the example of Dr. Martinez's experience. The actual loan amount for me was eye-popping. And so I'm wondering if you could give us a sense of what the payment behavior is like for student debt that is attached to medical professionals versus student debt that is not attached to medical professionals in terms of payment behaviors and payment priorities in a tougher economic time.

This one Alyssa?

Sure. regarding the 2 brands, a couple of things there. I believe there is real strength in having a brand if you have a very specific design target, especially when it comes to consumer. So you heard in the video from one of our doctor members, you heard Victor talk about it. A lot of people -- a lot of banks out there will say they have a health care offering or a doctor offering, but what are they really building behind that? So we are building very differentiated products for our doctor and dentists members, and we believe brand goes along with that. We believe it's a consistent experience that shows that differentiation in the market. And it allows us to do some pretty unique things. It allows us to have not only panels of doctors that help us inform those strategies, but where we take the brand, how we speak to the doctors, how we address them when they call in to us, and then how we treat them online. So it provides and opens up some really unique opportunities for us. So that's what I would say about brands.

Before you go on the second question, just a few things I might add, Alyssa. When you think about the market for Laurel Road is national and you start to think about, okay, I'm really focused on health care. Laurel Road carries a stronger brand than KeyBank nationally in healthcare -- than Keybank, right? In Dallas, there's just fewer consumers, in particular, who have heard the KeyBank brand. And then I do think the most important thing is, we need them to understand this is different. This is built for them. This is not a generalist. The brand helps communicate that to our consumers. We do though -- last thing I'll say here, and then I can't even remember the second question, you'll have to take it. We do a -- we do really subscribe to this concept of 2 restaurants, 1 kitchen. So the hard stuff, the core systems, the risk management, the finance and accounting, the stuff that we need to get right, we're doing that. We're sharing that amongst the 2 brands, and we're differentiating in the eyes of the consumer. So it creates a structurally -- a structural cost advantage that we can take advantage of.

As far as the payment behavior of doctors, I mean, obviously, we just went through a pretty hard time with the pandemic, and we did see a bit of a spike in forbearance, but those have been a hardship forbearance due to COVID, but those levels are now normalized. And we've done a lot of stress testing around doctors and dentists and it's a stable career. If anything, it's more stable than many other sectors. So like I said, we saw a bit of a spike, but those levels have now come down to pre-pandemic levels.

If you look at the demographics of doctors, and now we're going to be in nurses -- doctors and nurses will be employed wherever they want to be employed for as long as they want to be employed. So that's not to say you'll never have credit challenges. But the reality is where there's a bunch of industries, all of ours included, that have more ebbs and flows just because of the control upfront and the demographics, doctors and nurses will be -- and dentists will be employed as long as they want to be, wherever they want to be. It's a pretty strong future.

And just to add to that, too, Erika, your comments around the size of the debt, it is staggering. The average debt coming out of medical school for a doctor is $175,000 and the average debt level for a dentist is actually $200,000 to $250,000. So it is what it is, and that is the cost of -- that they pay to take care of us all.

And on the consumer NPS point, all I'll just say broadly speaking, is it matters a ton to us. We totally sweat the details. We're a relationship bank, right? And over time, for us to win in this game, our clients have to love doing business with Key. They have to want to do more business with us. They have to refer their friends, family and colleagues. Like that is the holy grail to our business. That won't happen if we're not driving this metric constantly up and it's -- we monitor -- it's the sum of every interaction you have with Key. When you walk into the branch, how are you greeted -- are you given great advice? When you open your phone, how long does it take? Are you able to transact digitally when you want to? If you have to call our contact center, how likely are you -- are we to resolve that through the first call? What does it look like when we mail you things every month -- are we hitting you with offers relevant to you? And what are our clients telling us in return -- they think of each and every one of those interactions? And it's something that we, as a management team, holistically just spend a lot of time on. And we spend a lot of time with our clients. We follow up with them. We listen to what they're telling us. We drive improvements. And what we've seen is, over time, moving in the right direction. Alyssa and Jamie have a nice beacon out there for us to aspire to every day, and we're moving in that direction.

Every single month at our monthly business reviews, Don and I have the opportunity to meet with all of our business heads. And we have a 1-page scorecard and there's a whole band on that 1-page scorecard that's about NPS. It's important to us. We're focused on it. I'm not satisfied with where we are as a company. We're going to continue to focus on it. Thank you for your question. Let's go to Scott, and then I'll come back to you. Scott?

I guess, Victor, first question was for you. Within the context of the 20% household growth aspiration, can you maybe drill down a little more into the balance of where that comes from? Like you'll get a couple hundred thousand from Laurel Road, but that's still very extraordinary growth. I mean is that all kind of getting your fair share in the West or some of that even deeper penetration in the core Midwest and Northeast? And then I had a separate question for Alyssa. I was hoping you could just maybe give some updated thoughts on how the lifting of the federal student loan moratorium, how that sort of works through the Laurel Road customer base and demand as well?

Sure. So the first part of your question, I'm glad you asked. That gives us a chance to clarify. So the number I spoke of, the 5% annual consumer relationship growth, actually excludes Laurel. So that's really just on the, if you will, kind of the Red Key part of our franchise. And that will come -- I would expect it to come -- if you look last year, we did a little north of the 5% target. It was almost equally split between new clients or clients who just joined us, but they joined us at the relationship level. We were their primary bank, and we also provided them -- could be a home loan product, it could be a payments product, could be a savings or investment product or could be all 3. And about half of that growth was from deepening relationships. So 1 of our existing 3 million clients who didn't meet the definition, either wasn't primary or had a check -- had a direct deposit, but didn't engage with us more broadly and did so. And I think that's what I would expect going forward. We want to win through both net new client acquisition as well as deepening with existing -- to your point on the net new side, I would expect more to come from the West, just given the growth dynamics there. But I expect to grow the business organically in every one of our geographies, and we think we can do that.

To your question on what the student loan holiday does to our business and our demand, there is no question that it definitely impacts our business. But we've been able to really just do tremendous work and show some really great momentum despite the holiday. There's been -- one of our competitors very publicly saying that their student loan growth has been depressed last year by 50%. Ours was only slightly down versus the previous year. and we're actually going to have a very strong quarter, kind of record-breaking quarter for us. So we have been able to prove the growth regardless of the holiday, and that is in part due to our focus on the segment and how strong the segment is as well as the need for them for a service like this.

I would just add, I don't think there's any question, Scott, that there's pent-up demand. When and if the federal student loan payment holiday is lifted, I think there'll be a big surge just because there's probably not many people on this call or in the room that wouldn't have taken advantage of the federal student loan payment holiday. Yes?

Manan Gosalia of Morgan Stanley. Victor, question for you. You said that mortgage originations were up 3x in 2021 versus 2019. Can you talk about how much of that is share gain versus a stronger housing market? And the reason I ask is because obviously, higher rates will be a little bit of a headwind to mortgage growth originations. But at the same time, you're growing households, particularly in the West. There's probably also an opportunity in home equity because housing prices have gone up. So can you maybe talk a little bit about that?

Sure. Yes, we feel good about the underlying growth trends, organic growth trends within our Home Lending business, also the outlook for the future. We have -- no question, we've taken share by any metric. It was in a forum like this a few years ago that Chris was talking about 1 mortgage per branch per month would get to whatever. We're well through that right now, which is great. One of the things that I'm most proud of and that makes me feel positive going forward is our focus on purchase. So we've been really focused over time. We view that as the more sustainable portion of the business. It's about half our business. Last year, we grew purchase last year almost 85%. And I think the purchase market according to the MBA was plus 9%, something like that. So a real strong purchase outperformance, and that -- that trend of purchase outperformance wasn't a 2021 thing. It happened in '19. It happened in '20, it happened again in '21. Our purchase pipelines are strong. And back to those NPS scores I talked about earlier, we're typically 5 to 10 points higher in purchase than we are in refinancing. And it just gets to really -- we focus this business on making sure we deliver a great purchase experience for clients, which is great for our home lending business and the sustainability also happens to be, as I mentioned in my remarks, an important moment of truth in people's life when we think they're more likely to switch banks. And gives us a great chance to -- if they're moving to a new community where they have a great experience with that loan officer, what are the other ways that Key can help them more broadly.

If I could just add something to that. You cannot be a great digital bank without having great analytics. We obviously invested in AQN. We're really focused on analytics. And if you think about it, when you pull together a mortgage is the only time you see the 360 view of the client. Any other time you see exactly what the client would like you to see. And so it's valuable in and of itself. It's valuable as a relationship product. It's also immensely valuable in terms of understanding these customers that we're trying to serve. [ Mike? ]

So Laurel Road sounds very exciting. It's like USAA for doctors and dentists -- now all health care professionals. But first question is what happens when rates go up and the refi activity slows and that funnel isn't as good. And second, the idea of cross-selling off of this initial product, you say 1/3 of these customers have other relationships. Like, I can't -- can you give us a better sense for how much of the profit share of these customers really is comprised of things other than the student loan debt refinancing?

Yes, I'll take that one, and Alyssa, you can add, please. But we do think as rates go up, generally, these government loans that's where 80% of the opportunity -- 80% of student loans out there are government, those are variable. So we just think the refinance opportunity is there for a member. They can save money, doesn't matter what the rate environment is. They can save money, the [ right ] members can save money with Laurel Road. So we like that piece of it. Now private is a different story. Usually, when they do that 20% that are refinancing into the private market, they're usually fixing their rate. So that starts to dry up a little more. But we'll take the opportunity on the 80% that we haven't had over the student loan holiday. We'll take that trade, and we like that trade. So we're pretty bullish looking forward with both the rate environment and the holiday. And then second, we do fully understand that the student loan for doctors is the wedge. This is why they're coming to us. We'll add more doctors to Laurel Road in the last -- since 4 or 5 years since Laurel Road started than Key has in the last 200 years because they're coming to us for this product and this capability. We then have created some unique capabilities that set -- that tie together other products that are good for them but accretive for the bank. So as a -- for instance, and it's on the website, if you start using your checking with us, day-to-day, month-to-month, you could save some money on your student loan, and we're seeing doctors take that trade. So this isn't -- these aren't shallow relationships. This is moving straight from a student loan to a daily operating account with KeyBank. We offered a credit card, 2% cash back that goes straight to your student loan. Interesting for those who are carrying $200,000 in debt, we're seeing them not only take the card, but actually transact on the card and move away from their other cards in the industry to work with us. Now it's going to take a little time, [ Mike, ] for profitability to catch up, as you can imagine. We're just getting started with those additional products 9 months ago. So it will take a little time for us to catch up, but we like how the mix looks in the out years.

And if I could just add to that a couple of things. One, until 11 months ago, nobody had the opportunity to do anything with Laurel Road other than refinance their student debt. So as you think about this penetration, we are literally in month 11, so we have a pretty good trajectory there. The other thing I would share with you is -- and we -- and you'll hear more about our relationship with fintechs. We have tremendous respect for fintechs. We partner with them very well. We've purchased them, et cetera. What fintechs typically do, if you think about it, is they're very good at removing 1 pain point. So they'll focus on a certain thing, they'll do it extremely well. What the fintechs haven't yet really mastered is how do you turn that into a relationship. What's exciting about Laurel Road is it is a national digital affinity bank. You use the analogy of US -- of a digital version of USAA, that's probably a pretty good analogy. All right. Other questions please? Yes.

Peter Winter, Wedbush Securities. I had 2 lending questions. First 1 on home equity. If I look, it's only about 8% of the loan portfolio, but it has been declining for a number of years. So I was just curious what the strategy is around home equity. And then for Alyssa, just the opportunity, you touched upon it, but financing the practices. I'm just wondering if you could size up the potential for that since you own the relationship on the consumer side, it seems like the lending to practices should be a tremendous opportunity going forward.

Yes. Thanks, Peter. I've been asking myself the same question looking at the home equity balance sheet, not just at Key but in the industry for a number of years. I actually think -- and certainly, we're getting closer. But I actually think given the forward curve and where rates are, I actually think there's a -- I feel pretty bullish on home equity going forward because I think you have a large number of Americans who have refinanced into a really attractive first lien mortgage over the last 36 months -- not just with us, but in the industry. Homes have done nothing but appreciate. So there is embedded equity. And I think what you might see is those clients have a capital need -- rather than want to redo the first, it's a real nice opportunity for a second. And so I would anticipate that maybe as an industry, we are -- we might -- the trends in that category might change as we look ahead. We're also doing some things systematically to make it easier prospectively for our clients to do a piggyback transaction upfront to make it easier for them to get that line of credit alongside the first mortgage. That will lag, but that's another opportunity that we would see kind of midterm.

As far as the practice loans go, Jamie mentioned it here: 50% of dentists have their own practice or are partners in a practice; 25% of doctors. So the opportunity is sizable. As I mentioned in my presentation, we are actually working very closely with our Key colleagues and the demand is there. So the AMA, our partner, came to us and said, "Hey, can you do practice loans?" And we said, we don't have the digital capability right now. It is on our road map, but we don't have the digital capability, but our partners at Key do. So that was just another example of really close collaboration there, where we're sending our partner leads from the AMA to our Key colleagues to underwrite those loans. So the demand is there. It is something on our road map. But right now, we are focused on their consumer needs.

I'm going to cut it off there, Peter. Thank you for your question. Thank you, team. And now it's my pleasure to introduce both Arjun and Clark, who are going to talk about some of the partnerships and some of the entrepreneurial activities that we are involved with. Clark and Arjun, the floor is yours.

Thank you, Chris. There will be a test on ARPU at the end of the day. Yes. The detail -- the detail Jamie and Alyssa just shared is a perfect springboard into a broader discussion of the competitive advantage we've built by partnering with entrepreneurial firms. Historically, the focus of our partnership strategy is entered -- has centered on the fintech ecosystem. Certainly, our activity in that space, as Ken specifically discussed in payments, makes up a large portion of the deals we've done to date, but we hold a more expansive perspective. To share this view with me today is Arjun Sirrah, Head of Engineering at Laurel Road. Arjun will offer his own personal perspective on why the Laurel Road team has not just been willing to stay with Key but to engage and to thrive here. We've created a lot of value by designing our organization to effectively engage, partner and integrate with entrepreneurs in all types of businesses. At the end of the day, entrepreneurs are entrepreneurs and that mentality makes the challenges and opportunities similar, even when the businesses are very different. As an example, what we learned in acquiring boutique investment banks greatly informed our approach with the Laurel Road team. Engaging these new teammates on the Key platform is the recipe for success. When we get it right, which is happening more and more, it has paid huge dividends for the clients we serve, the teammates we bring on board and ultimately for our shareholders. The list of partners you see here is not exhaustive, but it does depict a broader view of entrepreneurship. It also provides a sense of how long we've been at this. We think we were pretty early to this party, which gave us the opportunity to refine our approach and learn from our mistakes. We now enjoy a strong reputation as a partner built on a proven track record of shared success with these partners and opportunities. Moving to Slide 64. One of the primary benefits of that track record is a pretty robust level of deal flow we see. Through the network of partners, investors, bankers and entrepreneurs we've developed in this ecosystem, we see hundreds of opportunities a year that range across all our businesses and client segments. Let me spend a moment talking about the process through which we filter these opportunities. For us, the evaluation begins with the client. Is this the type of client that we serve today or would like to serve in the future? If so, does this firm or capability fill a gap in our existing value proposition for that client segment? Or does it present a new set of clients to whom we can deliver our existing value proposition? And oftentimes, it's both. In Laurel Road, for example, we added digital student loan refinance platform that we didn't have and an attractive set of clients who can use our core banking products. Implicit in this view is a focus on solving a high-impact need for that targeted client set, addressing real problems for targeted clients. This is yet another place where you see our laser-focused targeted scale strategy come into play. When you really understand your clients, you can identify what matters to them. And using this disciplined lens allows us to quickly spot the best opportunities so we don't waste time and resources. Now back to the funnel. If we get to the next step here, we then look at the size of the prize. If we effectively serve this need for this client set, does it matter to the client, to the partner and to Key? There must be enough financial opportunity in each part of the platform to keep everyone's attention. Often in our experience, this is why the referral relationships with partners fail so frequently. Some player in the ecosystem can't realize enough benefit to focus any resources or commit to the process. We spend a lot of time and effort upfront getting that right so that when we go to launch, we can run hard at realizing the benefits for everyone. Assuming those pieces are in place, we move to step 3 and ask whether we're doing this the right way. Do we have the capacity to add a partner and do it in the way we think it needs to be done? We're deeply committed to these opportunities, often dedicating teammates to focus solely on these activities. We strongly believe that this is the only way to make these work well over time. The practical implication of this type of commitment is that there's a limit to how many of these we can do well at once. And this is why we are and can be so selective. It's a quality over quantity game. We'd rather do a few of these exceptionally well and move on to the next wave than try to do too many at once and dilute the necessary effort and focus. The last criteria in the filter is often the most complex to evaluate. Does this firm or capability fit within our business? Said differently, the issue we need to understand is how well a business can integrate into a relationship-based strategy. This can include the product or offering itself, the sales process and service approach, and the cultural fit between the partner and Key. Are we truly aligned around a better end-to-end offering for our customers? For the acquisitions we've done with boutique investment banks, that means assessing how motivated the team is to bring the full power of our differentiated platform. This tends to be the primary factor that turns these opportunities into home runs. This is not about integrating -- sorry, this is about integrating expert bankers into a fully developed platform so we can serve these clients broadly. It is not 1 product. It's about delivering the whole bank. The easiest example would be a traditional boutique M&A banker embracing the opportunity to use the full balance sheet, a broad set of capital market solutions and to introduce payments capabilities. For the partnerships we've done in payments, it means thoughtfully and intentionally designing the client experiences that will be required to deliver the product in a seamless fashion with the rest of our robust suite of solutions. By the time these products reach scale, they tend to have a large number of channel partners, but our early engagement, influence on product road maps and focus on integrated delivery model makes these infinitely more valuable than the traditional referral arrangements that many of our competitors leverage. Just as a tangible example with some of our payments partners, we've integrated their solutions into our core treasury systems. By doing this, clients can bring deposits to Key to pay for these services just like they can for any other core treasury product. That's the type of focus on client experience that can make a real difference. Now on to Slide 65. To further illustrate this point, we can look at how we evaluated the opportunity with Cain Brothers in 2017 at each level of this funnel and the compelling results we've seen since bringing that talented team on board. Step one, the targeted client segment. I think we've been fairly explicit in our healthcare focus across the entirety of the bank today and especially within our health care vertical. When we started the dialogue with Cain, we already had more than $10 billion of lending commitments across thousands of clients in the space. In Cain, we found a partner who had unparalleled expertise and a singular focus on serving the space with that deep expertise. At the next level, we found even stronger alignment as Cain's advisory relationships and productivity were particularly strong with health systems and other providers, which tightly correlated with Key's focus on facilities-based health care. The total addressable market on this one is pretty easy, as we've said throughout the day, the size and trajectory of the health care sector provided what we expected to be tremendous tailwinds for our growth, and it has been. Next, the capacity piece we see in 2 very distinct ways. Can the Cain team remain equally productive in serving and acquiring clients if they're expected to take on the additional responsibilities of delivering the entire bank? And on the Key side, can we take our existing business and teammates and merge them into the Cain team to create a new, better health care capability? And finally, but perhaps most importantly, there was a very strong culture alignment between Cain Brothers' desire to deliver value for their clients in any way possible and Key's proven ability to make that a reality. We're immensely proud of what the combined team has accomplished since the acquisition and the results speak for themselves. We've grown our health care vertical by more than 20% organically since the acquisition, and we see continued tremendous runway going forward. Advancing to Slide 66. The results we've seen from all these efforts are compelling. Financially, the shared vision of synergies that we've developed with our acquired team has played out in spades. We've seen greater than 55% growth in these businesses after the acquisition, in large part driven by a tight integration into the relationship strategy I mentioned moments ago. Speaking of relationships, we now serve in excess of 3,000 of our commercial clients with at least 1 of our fintech partnership capabilities and obviously countless more with the entrepreneurial capabilities we offer from our Cain Brothers and Pacific Crest acquisitions. Of course, that means revenue growth, but it also means deeper, stickier relationships and heightened credibility with our clients around our ability to deliver distinctive solutions and be experts in the space. Our equity investment returns have been pretty excellent as well. Although we view this as the least important result of these efforts, it's a testament to the shareholder -- the shared success model we bring to our investments, and we certainly aren't laughing at 3x return on cash. The last 2 benefits of Key are a little bit more intangible. The first is our ability to learn from these partners in our network and apply it to improving daily work at Key. You've heard a little bit about this already, and I'll talk more about that in a moment. The second intangible benefit is one that you've heard mentioned a couple of times today, but not one that gets enough airtime. The core of our capability for partnering with entrepreneurial firms is the ability to bring these massively talented teams and empower them to be successful at Key. Through these efforts, we've accelerated our strategies by adding significantly to our roster of bankers, engineers and analytics professionals. And more importantly, we've created an environment where they're excited to stay and help us grow the bank. Given the intensity of the competition to acquire and retain talent, we're really proud of this retention stat. As a general matter, I don't think entrepreneurs wake up looking to work for a bank. But we think we found a recipe that works for all sides. And to that end, I'd like to hand it over to Arjun to share a little bit about his experience since he joined Key a few years ago in the acquisition of Laurel Road. Arjun?

Thanks, Clark. Of course, from my perspective, the process of considering new ownership when selling Laurel Road hinged on a shared strategic vision and the aspirations for what we wanted to create together. I couldn't be happier about the journey we've been on with Key, as we've continued to iterate on and expand on the founding mission of Laurel Road. As a software entrepreneur, those are not words I previously expected to say about a bank. I'm not sure how many other banks would have had the focus or fortitude to keep pushing like we have, especially when we've seen a number of similar platforms get plugged into banks simply and myopically to serve as asset generators. But beyond that, I'd like to highlight 3 themes that really are important to me and my team. First, for a builder, it's really exciting to be able to solve problems at scale. As a stand-alone fintech, you spend so much time building a world-class team and writing new software, often to only have your features get used by a few thousand people. We have built design, underwriting and pricing engines, which means you could scale, if given the opportunity, too. We often said that after being acquired, we were no longer limited to driving our figurative fancy car on local county roads. We were speeding down the 405. Therefore, for my team and I, the opportunity to scale up our impact from thousands to millions overnight. That was pretty exciting. Now that sounds nice in theory, but at large organizations, when builders find the opportunity to work at that level of established scale, you get bogged down by legacy infrastructure and a much slower pace of output. At Key, we found a platform that bucks that trend. Part of that is the modern infrastructure that Amy is going to discuss next. But just as important is the dynamic operating model, collaborative environment and the focus to achieving our strategic goals, which leads me to my next point. That dedication to a dynamic and collaborative environment shows up most frequently in Key's deep appreciation for the talent and innovation that entrepreneurs bring to an organization. There are hundreds of small and large considerations to take into account when constructing an environment to empower these talented builders. And while it hasn't always been easy, I found it refreshing to see the level of focus and investment here, and the results have been really rewarding on a personal and professional level. We've retained 80% of the Laurel Road engineering team since the deal and added 45% on top. And best of all, we've continued to maintain our caliber of talent, hiring from the top universities and tech companies in the world. The bottom line here is while previously my team and I never imagined working at a regional bank or any bank for that matter, we have found an environment that isn't what you traditionally expect in banking, where we are empowered to build amazing products and solutions at scale with a management team that understands and invests in builders, having us have an impact or helping us have an impact that we could not have had on our own.

Well, Arjun, it's awesome to have you as part of the Key team and what you and your team have done at Key has been really exciting, and I'm not just saying that. I was personally really involved in this acquisition and everything that's happening is what we could have hoped for, and I think we're just getting started. So I'm just really excited about it. As we move on to my last point, which is the value of this effort, this entrepreneurial partnership effort as a strategic resource for Key. Aside from the financial returns, the networks we've established, the hundreds of business models we evaluate annually and the discussions we get to have with investors, builders and partners are hugely impactful in developing and sharpening our business plans. We've spoken at length as to how our payments partnerships played a role in taking that business to a different level. But there are other examples as well. Over the course of evaluating, acquiring and growing with the Laurel Road team, we've sharpened our focus on what targeted scale can mean in retail banking, a business historically dominated by what we would call traditional scale. Working with AQN Strategies and ultimately bringing the firm into Key last year has really accelerated our analytics capabilities and how we leverage those capabilities and insights to run our businesses better. We're getting even more focused and surgical about finding and prioritizing the most valuable opportunities. This is really about using our resources most effectively and not confusing activity with impact. We've launched a broader enterprise agile effort across Key in 2021 to work with more speed and intentionality than we had been across the company and not just in our technology teams. These are cross-functional business-led teams driving clear client-oriented outcomes. This was a direct result of watching these partner teams think about and then grow their businesses in sound profitable ways. These types of exchanges are a big reason why we're able to develop the level of conviction around our strategies and why we have growing confidence in our ability to execute and deliver on our commitments. Before handing off to Amy Brady, I want to restate just a few key points here. One, we have a proven track record of successful partnerships with entrepreneurial firms of all types. And that will continue to be a source of differentiation for Key with clients and shareholders. We've been successful here because we built our platform to intentionally engage entrepreneurial talent and unleash their skill sets within our organization. And lastly, in addition to the financial benefits, the ecosystem we've developed is an invaluable strategic resource as we build the future of Key. And with that, I'll introduce Amy.

Thanks, Clark. Well, throughout the morning, you've heard from each of our business leaders regarding their distinctive growth strategies. They articulated how our relationship strategy is fueled by thoughtfully designed client experiences, which are foundational to our success. And to enable these outsized results with speed, we employ a nimble approach to our technology, investment and talent strategies. So first, let's talk about our focused technology strategy. So moving to Slide 71. At the center of our technology strategy is a focus on client centricity and ensuring an exceptional experience in their channel of choice. We work to anticipate client preferences and adapt and adopt technologies to serve these needs. We have been investing in modernizing our core platforms and advancing our security for over a decade, resulting in a rock-solid foundation that leverages best-in-breed technology to drive efficient operations and the capabilities that sit on top of them. We have a demonstrated ability to build, buy and partner to implement leading-edge technology capabilities. This has allowed us to deliver solutions at an ever-increasing velocity, leading to new growth strategies. And we continue to take advantage of speed, agility and new capabilities that cloud Software-as-a-Service provide to accelerate differentiated growth capabilities for our businesses. This includes leveraging things like advanced analytics at scale and conversational AI capabilities that are only available in the cloud. And lastly, we have invested in a developer experience to make Key a desirable destination for great engineering talent. Now turning to Slide 72. I want to highlight some select proof points that exemplify the speed and results that our technology strategy delivers. PPP is a powerful example of the impact of this strategy. Key and all of our competitors left the starting blocks simultaneously, yet our modern technology stack, tight alignment with our businesses, strong engineering talent and agile operating model enabled us to deliver outsized results compared to our peers. We stood up our PPP origination solution in 2 weeks including a digital client portal for applications through closing, leveraging investments in our nCino process management platform, open banking APIs, robotic process automation and modern core platforms. These enablers allowed us to outperform in terms of overall volume originated. In the first round of funding, Key was ranked #2 in volume among all banks in giving relief to clients. We're proud of how it showcased our ability to build innovative solutions at speed. We're even more proud of the 66,000 businesses and their employees that we helped through a very tumultuous time. Now Jamie and Alyssa shared the exciting progress and the outlook for Laurel Road, yet another example of our focused technology strategy. We launched a full-service national digital bank in 6 months, something that has taken years for the few competitors who have tried it. This was made possible by our Agile team methodology, modern API core-enabled platforms, deep engineering talent and cloud-hosted applications. At the onset of the pandemic, we recognized the need to strengthen our engagement with our clients in collections. In just 6 months, we implemented an industry-leading digital default experience. This gave our customers avenues to stay out of financial trouble at an already challenging time in a way that maintained their privacy. This effort has delivered millions in savings already. But as importantly, materially improved the client experience, and we'll continue to pay dividends into the future. And earlier today, Victor highlighted the tremendous growth in our mortgage businesses. In 2021, we launched our digital mortgage origination solution in 5 months. That solution will fuel the next leg of growth through broader reach, more efficient originations and better omnichannel experiences. And we delivered this by leveraging a cloud-based digital mortgage origination platform, integrated through APIs with our mortgage underwriting platform. It showcases our expertise in integrating these best-in-breed platforms and allows us to quickly deliver business capability to drive our business strategies forward. These are just a few examples that illuminate how our technology strategy comes to life. Next, I'll provide more context on the tangible investments we have made to make these type of outcomes possible. So advancing to Slide 73. Now security is a foundation to our technology strategy and one where investment is growing to meet the dynamic threat landscape. In 2022, we will invest more than twice what we did in 2018, allocating in part to targeted areas such as advanced client authentication, cloud security and things like zero trust networking. At Key, we see a dual mandate for ourselves: We are accountable to protect the bank and accountable to protect our clients. Combining our expertise and targeted scales -- scale means we are able to build deep trust with our clients and deliver a unique level of engagement and education. We proactively reach out to our clients to offer educational security seminars like cybersecurity best practices. Our ability to directly connect our cyber professionals with our clients is a differentiator that positively impacts our clients. This also allows us to extend our security posture well beyond our own walls. That's an important factor when many cybersecurity and fraud incidents rely on the clients' actions to exploit potential vulnerabilities. In parallel, we are implementing technology solutions, including advanced authentication platforms across all digital channels that leverage the power of behavioral and mobile native biometrics to help protect our clients and Key. Turning now to Slide 74. Our application modernization strategy is a progressive journey, underpinned by a foundation of integrated best-in-breed platforms that we have invested in over the past decade. The takeaway here is not about any 1 particular platform. Rather, it's about an intentional and broad-based effort to ensure we have the platforms that are modern and secure to support an efficient operation. Additionally, these investments allow us to accelerate innovation to our omnichannel client experiences. Through modernization, we aim to simplify the environment by consolidating and retiring old systems, including retiring over 100 applications in 2021 alone. We leveraged the modernization journey to transition teams to an agile posture and accelerate the delivery of important business outcomes through modern capabilities. An important point to highlight is that our modernization journey also enhances our ability to attract talent, particularly engineers that are excited to deliver critical capabilities on modern technologies. We are 90% through our core modernization transformation and plan to continue to invest in modernizing to ensure flexibility for future innovation. The significant effort we have put into modernizing allows us to free up investments for new business capabilities as you will see on the next slide. Overall, our technology spend remains relatively flat due to Key's enterprise focused on operating leverage and creating efficiencies through continuous improvement. By reducing our cost to operate our technology platforms, we have been able to materially increase our new technology investments. Additionally, we achieved outsized results with our investment dollars by embracing a discipline of building once and reusing our technology services. While we will continue to build on a strong security foundation, our progress on modernization has enabled a material shift allowing us to increase our investment in new business capabilities to 65% of our portfolio. We are focused on ensuring we offer innovative solutions for our clients that support and anticipate their evolving needs. In the next 2 slides, I will discuss how we are also leveraging these investments to innovate and implement leading-edge technology capabilities and to drive our cloud acceleration. So moving to Slide 76. To continue delivering new and differentiated capabilities to our clients, we have implemented leading-edge technologies. While many competitors are in the early stages of adopting these technologies, we are well into the journey and are leveraging them for tangible results. Our automation efforts began in 2019, and we have enabled a 3x return on investment. By the end of this year, we will have captured over $40 million in value. Automation also allows our talented teammates to be more productive and focus on higher order work. We have automated thousands of tasks, completing the equivalent work of more than 350 FTEs. Automation has proven to be a highly effective tool to enhance client experiences, reduce cycle times, increase speed to market, improve our risk posture, and we're just getting started. Our intelligent marketing capability is reshaping how we engage our clients by delivering timely, targeted, cohesive and personalized touchpoints at scale. This new platform allows us to be truly client-centric and coordinate seamless experiences across channels. We will be able to execute personalized journeys in days rather than weeks or months as well as test and optimize interactions in real time. And our open banking engineering strategy allows us to build once and reuse for internal applications and direct client and fintech integrations in a secure way. These new APIs are improving our speed to market for new solutions, creating efficiency and accelerating strategies like embedded banking like you heard about earlier. By aligning technology resources into agile squads with cross-functional teams that Clark mentioned, we can be more responsive to client expectations and market demands while building and releasing new capabilities at a rapid pace. All of our digital platforms from Consumer to Commercial to Laurel Road leverage fully automated code and release management capabilities. Today, our most critical digital properties are releasing new capabilities into production multiple times a week. Turning now to Slide 77. For years, we have made targeted use of cloud services through our hybrid cloud strategy. Moving forward, we see significant opportunity to grow and accelerate these efforts to meet some of our most important strategic goals outlined on the left-hand side of this page. Today, more than 40% of our applications already run in the cloud or our Software-as-a-Service applications. As recently announced, over the next 3 years, our cloud acceleration program will focus on migrating our distributed applications, which currently reside in our data center to Google Cloud. We will not only achieve operating efficiencies in doing this, but will also enable agility, speed and new capabilities while leveraging Google's vast expertise in security. One example where we have leveraged advanced capabilities is in our data and analytics space where we are already seeing benefit from these efforts. We completed the migration of our on-premise data and analytics environment to Google Cloud, where our data scientists can take advantage of advanced analytics and machine learning capabilities. This deployment brings trillionaire banks scale to Key, high speed and real-time access to our entire data catalog allows us to build sophisticated AI and machine learning targeted algorithms, optimize digital customer experiences, advanced fraud defenses, compliance excellence and comprehensive credit risk strategies. It puts valuable real-time data at the fingertips of our network of analysts, modelers, frontline employees and the executive team. These capabilities, along with the analytics talent we've added both organically and through the acquisition of AQN that Ken touched on earlier, are meaningful accelerators to cultivating a data science culture at Key. Moving to Slide 78. Everything I've spoken about up to now could not be possible without us continuing to grow and invest in our team. And I cannot tell you how proud I am of the talented and diverse group of engineers we have at Key. We have created an engine for growth in what is a very competitive market for talent. Our technologists are excited to work with modern technologies to solve complex problems at scale of millions of clients. Not only is technology advancing at a rapid pace, but our workforce experiences are changing like never before. The war for talent and the resources is real. And we have put together programs to compete for this talent, and we are winning. We have been aggressively growing our tech talent base by hiring new technology resources, not only in our existing hubs, but also in new micro markets, allowing us to hire over 160% more engineers in 2021 than we did in 2019. And while recruiting is an imperative, we are also committed to the growth of our technical professionals. In 2018, we started our future-ready program to support our employees in modernizing their skill sets and becoming the CEOs of their own careers. Additionally, we are having great success in reskilling team members with deep financial services expertise to become our next generation of technologists. These opportunities create a culture where people thrive and choose to stay, a tight partnership with our business and focus on employee growth, coupled with a culture of collaboration and innovation allow us to retain our talent with more than a 90% retention rate. Now before I close, I want to reinforce a few key messages. Our technology strategy remains critical to enabling Key's distinctive relationship model and growth. We have consistently invested to maintain modern and secure platforms to produce differentiated capabilities for our clients and our business. We have a demonstrated discipline and a capability to prioritize and deploy targeted, high-impact leading-edge technologies that accelerate our business objectives. And as recently announced, our cloud acceleration partnership is just one more example. And we are aggressively investing in our technology organization to grow the talent and competencies required to compete and win in today's world. And now I'd like to turn it over to Don Kimble.

I have to readjust here. I apologize. Thank you for hanging in there, and we're getting close to wrapping it up. So hopefully, we can go through this fairly quickly. But again, thank you, Amy. And today, you've heard from our leadership team on how we're building targeted scale and driving sustainable growth and returns. I want to bring this all together and discuss how we are positioned to continue to deliver strong financial results and achieve our long-term targets. Following my remarks, Chris will provide some closing comments. I'm now turning to Slide 81. I'm not planning to spend a lot of time on this slide since you've all had the opportunity to review our 2021 financial results. But I think it's worth underscoring that this was another extraordinary year for the company with record results in many parts of our business. Importantly, we delivered another year of positive operating leverage, something we've accomplished in 8 of the last 9 years. We also reaffirmed our commitment to deliver positive operating leverage once again in 2022. We generated a record revenue and record PPNR driven by strong fee income. Our fee income benefited from record investment banking fees last year. As you heard from Angela and Randy, we have grown our investment banking fees at a 15% compounded annual growth rate over the last decade, and we expect this business to continue to grow over time. Throughout the morning, you've heard us also talk about the investments we've made and continue to make to drive growth. These include investments in our teammates in digital and our analytics capabilities. Foundational to everything we do is our focus on strong risk management. This includes the work we have done to derisk our business over the past decade. We have significantly improved our risk profile, and one measure of our progress is our peer-leading stress test performance which I'll discuss later in the presentation. Lastly, we continue to be disciplined in the way that we manage our capital. In addition to supporting organic growth, we have returned a significant amount of capital back to our shareholders in the form of dividends and share repurchases. Continuing on to Slide 82. Not only did we deliver record results last year, but we elevated our performance relative to our peers in several key measures. First, operating leverage. Key was an outlier in committing to delivering operating leverage in 2021. And despite some headwinds, we are one of just a few banks in our peer group to achieve operating -- positive operating leverage for the full year. We are also among leaders in revenue growth. Total revenue grew at 9% relative to the year ago period. Key was best in class for pre-provision net revenue growth, reflecting our strong revenue as well as our balanced approach to making targeted investments while maintaining strong expense discipline. Return on tangible common equity was strong on both an absolute and relative basis despite Key reporting less reserve recapture benefit than peers. Finally, a testament to our disciplined credit underwriting and strong risk practices, our net charge-offs were among the best in our peer group. We're proud of our financial performance for 2021 and the strides we took to achieve our peer-leading results. However, we're even more focused than ever on building off this foundation and continuing to generate sustainable growth and returns. Now turning to Slide 83. As I said, we expect to deliver positive operating leverage again this year. We continue to generate strong growth company and remain disciplined with our expense management. Today, you've heard of the leadership team discuss a number of growth drivers and how we're acquiring and deepening relationships. One of the long-standing strengths and something that differentiates us from peers is our relationship-based commercial business model. Today, almost 80% of our investment banking fees come from relationship clients. In our Consumer business, you've heard Victor say that we're growing households at a faster pace than we've done over the last decade. We have an opportunity to leverage our position in our faster-growing western markets, especially with younger clients, which today is our fastest-growing segment. We also are leveraging digital and analytics to improve the experience for both our clients and our teammates. This includes our recent acquisitions of AQN and XUP. You cannot be a leading digital bank without leading analytical capabilities. Jamie and Alyssa discussed our unique growth opportunity in health care, including the launch of our national digital affinity bank, Laurel Road for Doctors. There is no comparable offering in the market that builds targeted relationships digitally with health care professionals. By 2025, we expect to grow Laurel Health -- Laurel Road members by 5x its current size, presenting us with more opportunities to cultivate relationships. You've also heard us use the term targeted scale throughout the day, and there is no better example than with our 7 industry verticals, including our leading position in 4 high-growth sectors: health care, renewables, affordable housing, and technology. With our differentiated business model and our industry expertise, we can continue to take share in these high-growth areas. We're also continuing to add bankers across the franchise. In 2021, we grew senior bankers by 10%, and we are far from finished. In order to sustain and accelerate our growth, we've committed to increase the number of senior bankers by 25% by 2025. Importantly, to deliver positive operating leverage, we also need to be disciplined expense managers. We're also balancing the savings realized from continuous improvement efforts with investments. We've made and embraced an agile framework that increases the speed and quality of processes that we apply across all of our businesses. Amy discussed how we're digitizing the enterprise, making investments to create cost efficiencies with automation to create a seamless and efficient experience for teammates and clients. Additionally, we've made incrementally -- we've incrementally invested in core modernization of our core systems over time and do not expect outsized costs in this area over the next few years. We've also continued to rationalize our branch network. We believe the best way to serve our clients is through our omnichannel approach, balancing a thinner physical branch presence with our strong digital offerings. Last year, we consolidated 7% of our branch network and experienced very minimal attrition. We'll continue to evaluate how to best serve the clients while optimizing our branch fleet. The pandemic not only shifted how our clients interact with us but also how our employees work, with many of our teammates leveraging our mobile-by-design office structure or working from home. We have had the opportunity to reduce our nonbranch real estate over time by 25%. Finally, there are a number of elevated expenses that occurred last year, and we do not expect them to continue at the same pace in 2022. Two categories, professional fees and cards and payments expense, were elevated, and we expect these line items to decline this year. We run and manage each of our businesses to deliver positive operating leverage and remain confident in our ability to continue to achieve this long-term target. Now turning to Slide 84. We remain very disciplined in the low rate environment with our liquidity deployment strategy. We did not reinvest significant amounts of cash for nominal returns. Currently, our asset sensitivity position of about 5% enables us to benefit from rising rates. Also, our interest sensitivity assumptions include an interest-bearing deposit beta of about 30%. Keep in mind that for every 5 percentage point decline in that beta, our asset sensitivity increases by about 130 basis points. Our December ending cash and short-term treasury position was about $20 billion, presenting us with plenty of opportunities to deploy excess liquidity over time. In the near term, as rates move higher, we can incrementally lean into our redeployment strategy each quarter. However, if we decide to invest half of that excess liquidity position or about $10 billion at current rates, we would see the benefit of about -- to net interest income of approximately $175 million. If we deployed all $20 billion in excess cash and short-term treasuries, we would see the benefit to net interest income of about $350 million. Our discipline positions us well to benefit and provides us with more opportunities as interest rates increase. Moving on to Slide 85. One theme that you've heard consistently today is that Key is a different company. Since 2007, Key has transformed its approach to managing risk, and we've upheld our strong risk profile over the years. In the consumer bank, we exited high-risk businesses that did not align with our relationship strategy. The work we've done over the last decade and our focus on building relationships has helped us form a strong foundation built on sound, profitable growth. We've seen strong growth from our consumer mortgage business and Laurel Road. Even with the tremendous growth we have seen, our moderate risk profile has not strayed. Our mortgage clients and credit card clients have FICO scores above 760. And we're also excited to continue to build and expand relationships with a high-quality health care professionals through Laurel Road. These clients have an average FICO score of about 780. Today, 20% of our residential mortgage loans are coming from the health care professionals, and we look forward to adding more relationship products with the expansion of nurses. Shifting to the commercial bank. We're focused on building relationships with middle-market clients in our 7 industry verticals. We have a robust commercial real estate platform focused on targeted verticals in health care, institutional real estate and affordable housing. And we've reduced exposure and exited areas that did not meet our moderate risk profile. We can offer clients in our verticals both on- and off-balance sheet financing solutions. We are uniquely positioned with the market insight into who we want to do business with and perhaps more importantly, who we don't. Nearly 80% of our commercial credit exposure comes from relationship clients. And 50% of our C&I portfolio is investment grade, clearly, a distinguishing characteristic relative to our regional peers. Flipping to Slide 86. As we've discussed, Key has undergone a significant transformation over the last decade by significantly derisking our businesses. To see how far we've come since the last economic downturn, let's look at how much our stress test results have improved since 2012. Key went from having the most capital consumption in 2012 to the least out of our peer group this past year, a testament to the strength of our strategy in our relationship-based business model. These results reflect the benefit of strong risk management and improved operating results. As for the loan loss rate, Key went from the middle of the pack to the lowest loan loss rate among peers, showing significant improvement. We have proven through the pandemic that we are good risk managers through our peer-leading results. We believe that the quality of our business, coupled with our strong risk management practices, positions us to perform well through any economic cycle. Moving to Slide 87. We have been and will continue to be disciplined in the way that we manage and deploy our capital, focusing on both the return on and the return of capital. We've been operating at or above our common equity Tier 1 cap target range over the last 5 years. We believe this range provides us with sufficient capital to support our customers and our businesses while concurrently returning capital to our shareholders. Our capital position allows us to continue to execute against each of our capital priorities, including supporting organic growth, dividends and share repurchases. We remain committed to using our capital to support the growth of our businesses. We continue to invest in our teammates in important areas, including digital and analytics capabilities. We recognize that a strong dividend payout is also important to our shareholders. We have targeted dividend payout range of 40% to 50%. Our dividend has grown at an 18% compounded annual growth rate since 2016, including most recently a 5% increase in the fourth quarter. We will supplement our capital return by prudently repurchasing common stock. Since 2012, we repurchased nearly $6 billion worth of common shares at an average price of $16.27 per share. In total, we returned 75% of net income back to our shareholders in 2021 in the form of dividends and share repurchases. Moving on to Slide 88. I'll wrap up my remarks starting first with our guidance for the year and then close with our long-term targets. Our guidance reflects normal seasonality in the first quarter results, along with our expectation of some slight downward market-related adjustments. Importantly, we've increased our outlook for net interest income for the year from relatively stable to up low single digits. This positive adjustment reflects our expectation for strong loan growth, the continued deployment of excess liquidity and the benefit of 4 interest rate increases during the year. As Chris pointed out, we would expect another year of positive operating leverage, which would be supported by using the midpoints of our guidance ranges. Now continuing on Slide 89. On this slide, we show our long-term targets. We remain committed to positive operating leverage by balancing our investments for growth with disciplined expense management. We generated positive operating leverage in 2021 and expect to do once again in 2022. Positive operating leverage will also drive continued improvement in our efficiency ratio. We view the efficiency ratio as an output to how we manage our businesses. On the credit side, foundational to our strong performance is a relentless focus on disciplined credit underwriting standards. Our net charge-offs to average loans through the cycle targeted range remains at 40 to 60 basis points. Our last long-term target is return on tangible common equity of 16% to 19%. With our strong focus on generating positive operating leverage, partnered with our disciplined approach to managing risk and capital, we can continue to drive sound, profitable growth across our business. Key has made significant changes over the past few years to transform into the Key that we are today. We are generating strong, sustainable returns and focus on sound, profitable growth in our targeted verticals and client segments. With this management team and dedicated teammates, I remain confident in our ability to continue to grow and deliver on our commitments to all stakeholders. So with that, I'll turn it over to Chris for some closing comments. Chris?

Thank you so much, Don. And before I make my brief closing remarks, I just want to thank everyone for this incredible turnout and incredible engagement throughout the day. As Don mentioned, our long-term financial targets remain unchanged. We are committed to making continued progress against each of these measures. Our long-term goals are supported by specific and measurable growth targets that we have shared with you today. Victor discussed improvement and momentum that we are seeing in our consumer business. We are committed to growing relationship households by 20% by 2025. Randy and Angela committed to growing our senior banker team by 25% by 2025, while concurrently improving banker productivity across our entire platform. Jamie and Alyssa shared success that we have had with the launch of our national digital affinity bank, Laurel Road for Doctors. We are committed to growing our members to 250,000 by 2025. As I mentioned earlier, that's 5x our current level. As I mentioned, we plan to report out on these regularly. So everybody in the room and on the call will certainly be able to track our progress over time. I'll wrap up my formal remarks today on Slide 92 with just a few summary comments. Key is a different company today. We have a different risk profile. We have a different growth trajectory. So let me end where I started the day and reinforce some very key themes. First, we have a unique and distinctive business model. Secondly, we have a leading position in targeted high-growth areas where we expect to continue to take share, grow and deliver consistent results. Our integrated corporate and investment bank is truly unique with our targeted industry-focused approach. As I mentioned, while many of our peers still approach industry specialization as an adjunct to their geographically focused models, we use our deep industry expertise to deliver unique industry-driven solutions and advice. 20% of our commercial revenue comes from 4 very targeted growth areas where we have a leading competitive position. On the consumer side, 25% of our deposits are in the fastest-growing markets in the country, a tailwind that will clearly amplify our growth. Third, our franchise is now a balanced one. generating sustainable revenue streams. Victor described how our focus on our consumer franchise has led to stronger momentum than ever before. Randy and Angela discussed our investment banking business where we have a proven unique model that is driving sustainable relationship-based revenue. Fourth, we are accelerating our growth with targeted investments, investments in teammates, investments in digital, investments in analytics and the acquisition of niche businesses. Our unique targeted scale opportunity in health care is a true differentiator. Health care represents a continued growth opportunity, not only for Laurel Road, but for Key. Next, foundational to everything we do is our relentless focus on strong risk management and our moderate risk profile. We have derisked our business over the past decade and maintain a strict focus on risk management. We believe the best way to drive long-term value is by delivering on our commitments to all of our stakeholders. And we remain committed to corporate and environmental responsibility. Finally, we believe Key is a compelling investment. With that, let me wrap it up. Again, thank everyone for your engagement today. We will now open up with our third of 3 Q&A sessions. Amy, why don't you come up and join me? Arjun and Clark and Don, Don, you can join me here at the podium, and we'll start taking questions. Yes, Ryan?

Thanks, and thank you for all the information, Chris, to you and the team. So if I take a step back and reflect on everything that we've gone over, you highlighted lots of different growth opportunities, whether across Consumer, Commercial, Laurel Road that maybe the market hasn't appreciated as much just how much growth there could be as well as how many investments you've made in the core infrastructure and growth in the business through Amy and Clark and the like. Yet the stock continues to trade at a discount, as you highlighted. So I guess when you think about all this from a financial perspective though, like can you kind of help bridge for us what of all these growth items mean in terms of -- do you expect to have better than peer revenue growth? How much positive operating leverage could we generate over an intermediate time? Can you maybe bridge for us all these growth opportunities to what does it mean in terms of reaching the financial targets over a certain period of time? Thanks, Chris.

Well, sure. So we laid out, Ryan, our long-term financial targets, which -- one of which is 16% to 19% return on tangible common equity, which I think, in our industry, really, really matters. So the next thing that I would point to is just relative growth. We will outgrow our peers. This whole notion of focus propels growth. That, I think, is really important. And then lastly, and it's something that I thought we would have frankly been able to prove in the pandemic, and we didn't, is this notion in our business, you make money by not losing it. And we have really derisked our company. You heard earlier today that when you raise $108 billion for your customers and you only put 18% of it on your balance sheet, you're sort of in a position where you can manage risk pretty well. I think those are some things that I think are sometimes missed. The other thing that I think is missed is we are -- our business is not exactly like everybody else's. And that's by design. We think if you have 5,000 competitors out there, you have to have something that's a bit unique, and I think that's something that's missed. We'll just start going around the room. Yes, John?

In terms of your expectation for positive operating leverage, can you talk about the risks to that? If we don't get the magnitude of hikes or the 4 hikes you now model, or perhaps if the capital markets business sees greater pressure than you expected, can you perhaps talk about your ability or your confidence in still generating positive operating leverage? And do you have levers to pull that can still create that despite any revenue risk?

It's a great question. We do have levers we can pull. Obviously, for example, you mentioned our investment banking business. That is a big variable comp business. And so if you think about that business, that's a business where if we were, and we're not we're not predicting that we will, but if we do, obviously, we'll have significantly less compensation. The whole notion of continuous improvement, we continue to take costs out of our business, and we continue to redirect our people. Once we use software to take care of some of these processes that are handoffs, we continue to -- software become more and more efficient. The other thing we obviously can do is we talked about a lot of investments that we're going to make. And in a market where you don't have any benefit from rates and business isn't good, obviously, we can measure that. And I think Don mentioned a couple of other important ones. Obviously, is this -- the notion of our prepaid unemployment business burning off, it's hugely helpful to our positive operating leverage because that's about 100% sort of efficiency ratio. Don, what would you add to that?

I think the only thing I'd add there, Chris, is that in 2021, we made some incremental investments at a different pace than we've ever done before, with Laurel Road and the start-up there and with adding 10% new bankers. That was a much stronger lean into our investment strategy, and we're expecting to continue to see paybacks for those investments we made. And to Chris' point, if we slow down that pace of growth in the investments, we'll actually create positive operating leverage by doing that if we don't see the economic benefit out there. So it's -- again, we'll see the benefit of what we've invested in 2021 and to have the control as to the pace of investment in 2022.

Gerard, in the back, please.

Thank you, Chris. A 2-part question about interest rates. Maybe we could start on the asset side of the balance sheet. Chris, you've been very emphatic of how the underwriting in this company has changed over the years and the numbers bared out. Can you share with us what type of interest rate assumptions you use in your underwriting of loans? Are you stress testing them for up 200 basis points? And how does the portfolio perform in a rising rate environment? And then I have a follow-up.

Sure. And I think Angela addressed that a little earlier today, but we're constantly, Gerard, testing and particularly areas where there is leverage. And that means mostly in our real estate business, we're constantly seeing how many rate increases could we endure and still be able to cover what we want to cover and have the kind of coverage ratios. The same in our -- we haven't talked about it today, but we have a sort of de minimis leverage finance book that has a lot of velocity to it, and we're obviously testing that to a great degree as well.

Very good. And then on the liability side, Don, you talked about the beta for deposits. Can you give us a little more color behind your thinking on that 30%? What are some of the assumptions you're making to come up with that type of number?

The 30% is just based on historic modeling, and we think there are some strong opportunities to do better than that. I would say, historically, we had a consumer book that was much more rate sensitive than it is today. Victor has talked a lot today about how we're focused on relationship and having those core operating accounts with the consumer and not being out there as far as marketing promo rates or other things like that, that Key may have done in the past. And so that deposit beta should be much slower for the retail business than what it was historically and much lower than that 30% beta for the first few rate increases. I don't think we're going to have to move consumer rates much at all for the first few rate increases and probably start to lag into it after that. On the commercial side, Ken also talked about this as well, at 82% of our accounts are operating accounts. And to have that kind of percentage, it's going to have less rate sensitivity than what we would have seen historically for that book as well, less money market type of a rate performance. But we will still see higher levels of beta for the commercial book than we will for the consumer book just because contractually, many of those are tied to changes in interest rates. But again, I believe that the first few rates, we can perform much better than that 30% beta that's assumed.

Let's go up front. Let's go to Steve.

How do you say it that way? So I have 2 questions. I'd love to hear from Amy on this one and maybe you too, Chris. So many banks talk about a need to do M&A, MOEs because they need to get bigger to spend more on technology. At your current size, do you think you could be competitive against banks of all sizes, fintechs? Or do you also need to scale up to spend more?

I'll take that. I do not think we have to make some acquisition to get greater scale. And in fact, if we were looking at a depository, it would be, frankly, a high bar. The first test would be, does it matter strategically to our customers? The second would be a series of rigorous financial metrics. On the margin, I don't think -- I just don't feel like we need to buy anything to get scale as it relates to technology. And part of that is our whole notion of targeted scale. When you're not trying to be everything to everyone, you don't have to have everything. The other thing, Steve, I sometimes think is missed by some people is as everyone goes to sort of pay by the drink, the value of scale diminishes because if you're doing 100 mortgages, you're paying the same for those 100 as someone doing 1,000 mortgages, for example. Amy, what would you add to that?

So I think the other thing is, over the past decade, we have been progressively modernizing behind the scenes in an incremental way that has allowed us to build this modern capability behind the scenes, so that we can then do very innovative things on top. And we've also had very proven capability now to partner with fintechs to build our own and then to really innovate with some of the largest of the tech companies and some of the smallest. So I think we can compete with anybody we want to compete with delivering against our business strategy, and that's the key. We have to be very focused. We can't throw caution to the wind and spend everything on everything, and we have to be really disciplined about reuse. And that takes a lot of collaboration. So that culture you heard about that is so key to our relationship strategy is also really key to our investment strategy and technology because we build once and we reuse across businesses. A lot of institutions -- I have been at -- someone else. They don't do that. You build many of them, repeat and then you have -- so your tech dollars aren't necessarily the most efficient. We have to be really, really efficient with what we do.

And then for my second question. I chuckled when Chris, you got to your final slide, and it said the new KeyCorp because under Robert, we had the new KeyCorp, we had the new KeyCorp. Now under you we have the new KeyCorp. I think it's partially why your stock trades at a discount for the whole time I've covered it. What do you have to say to your investors today that this KeyCorp that you've put on display today is the KeyCorp of the future?

Well, I think it's -- I think we're focused. I think it's durable, Steve. And I think it's a unique business strategy. And being new and being like everyone else doesn't really work. We have built a unique business, and it starts with risk management. You have to do a good job of managing risk. And then you have to have elements where you can really outgrow people from an organic perspective. Yes, we've bought and successfully integrated a variety of businesses. But the reality is you have to have a business that's attractive enough to your targeted client sets that you can grow organically. And I think that is much what is new, new. At Key is we've really continued -- and I wouldn't say it's new, new. We've developed our strategy such that we know exactly how we win, where we win, why we win. And as Amy said, it's important to really know what you do, but it's in business, it's very important to know where you don't compete. And that's really the nature of our focus, and that is what is different about our business. And I would contend it's different than many of our competitors. Yes, in the back.

Matt O'Connor, Deutsche Bank. Can you guys talk about kind of medium term, what the underlying expense pressure is for your firm? Obviously, there's a lot of inflation right now. Some things were priced right away, like chicken wings, some things take long time, banks maybe somewhere in between. So I realize you're focused on the operating leverage, but you still come in day one and it's probably not 2% or 3% expense pressure, maybe it's higher. So if you could just talk to that.

Let me speak to that a bit. Thanks, Matt. We do have some offsets that Don mentioned, but we're no different than everyone else. We are seeing inflation across the board. Whereas in the past, we'd look at annual raises that are kind of in the 2% range. We're now looking in the 2% to 4% range. If you look at entry-level positions at Key depending on geography, depending obviously on people's background, depending on what the job is, we have increased the entry-level position over the last 5 years by about 43%. So this is not anything that is real new. We're also seeing in certain areas. And you saw today, we have a lot of talent around people that are software engineers, analytics professionals. Those skill sets, obviously, are applicable not only to finance, but everything that is digital. And as a consequence, the bid for that talent is very, very significant. And the other thing -- we were very direct about this. We and everybody else in the middle of the pandemic, didn't hire enough junior level investment banking people. The business took off. And as a consequence, we were doing some off-cycle raises. Are there expense pressures? Yes, there are expense pressures. We have some specific things that can offset those just based -- that are idiosyncratic to us. Don, what would you add to that?

I think that's a good summary there. As far as the items we talked about before, the prepaid card expenses will be coming down dramatically from last year this year, that we had elevated levels of professional fees. But beyond that, we'll see increased costs coming from vendors. And so it's Clark and Amy and I that are there talking about how we can change the demand for those products, so that we can have some efficiencies from that perspective as well. It's critical that we have those ongoing continuous improvement savings in order to offset some of the inflationary pressures from wages or because of the amount that we want to invest back in the business. And so Chris referenced the business reviews that we have each month. And I can't remember any 1 of those over the last 2 years that Chris hasn't started off by saying, "We are going to achieve positive operating leverage at the individual business unit as well." And so that's being drilled in that we have to manage our outcomes so that we can achieve that kind of result. And it really is part of our core system going forward.

Erika?

Two questions for me, please. So the first is just a reframing of Ryan and Steve's question. We've heard a lot about the persistent discount the stock is trading at. If I look forward to 2024 consensus expectations, the consensus expectations for ROTCE for Key is 16%. For your large regional peers, it's 18%. So your capital stack seems optimized or close to optimize at the moment. So it seems like a numerator question. So the question -- the first question really here is, what gets you close to peers or really what gets you to the higher end of your ROTCE range of 16% to 19%? And if The Street has you underperforming your peers by 200 basis points, what are they missing?

So I can't speak to our peers, but I can tell you the biggest lift or detriment that you get to return on tangible common equity are charge-offs. I mean that is the biggest driver. And I think one of the things that is missed when we're stacked and racked against our peers, whomever you're using -- for example, 50% of our C&I loans are investment grade. I think that's probably unusual. The fact that we're distributing out over 80% of the capital we raise, I think in a market like this when everything is flashing green, I think you could assume that we're distributing out credit that doesn't fit -- the perfectly good credit, for example, 10-year nonrecourse debt for -- in real estate. We don't do that. We have a variety of places where we can distribute it. I think that's one of the things that is clearly missed, and there's no question that credit is the biggest driver of return on tangible common equity in our industry over time. Don?

The only other thing I'd really add is that, as we've talked earlier in the day, we outperformed on PPP. And we really had a lot of benefit come through in 2021 from that. The falloff from '21 to '22 is about $190 million. That's outsized where our peers are as far as the overall impact for them versus us on a relative basis. The other thing is we have been investing at a different pace than what I hear our peers at. Our outlook, and I'm sure the consensus would also reflect that continuation of that investment. And so I think that we are in a position to continue to show outsized growth and outsized returns over the long haul, but we're also investing at a different rate and a different pace than many of our peers with that long-term return focus. And then the last thing is I want to take a look at that at the end of 2022 as opposed to what the consensus estimates are for all of '22 at the beginning of this year. I think we will outperform. And I think that we will be in a level that is equal to or better than our peers associated with the return on tangible common equity even this year.

So I was referring to 2024.

Okay. I'm sorry.

I was thinking that, that would be fully baked in for rates. And I would also point out, I doubt that, that includes a recessionary scenario. So banks aren't distinguishing themselves. But just to repeat, it sounds like you're saying that charge-offs aside, right -- because I think that 18% ROTCE would presume that everything is still going great. It sounds like it's the pace of investment that you had recently accelerated and some Key-specific headwinds like prepaid card are -- that's going to help you at least match your peers looking forward.

For this next year. And I would also want to make sure that as far as the 2022 outlook that we are positioning for that future, like you've said. And I think that our peers probably aren't at that level. And then the last piece is if you just take a look at our 2022 outlook using the midpoints for this guidance range, it's still in the 15% plus ROTCE, which I think is better than what most of our peers would be showing despite some of those headwinds we talked about.

I'm sorry, the second question -- and I'll give up the mic is, I got a few e-mails, Don, asking about -- asking me to ask about a swap update in terms of -- if you could remind us what the maturity schedule is over the next 2 years. Clearly, there's a big difference since we heard from you in a public forum with regards to the forward curve. And a question I'm going to sneak in, Arjun, where are you based?

I'm based in New York.

He also has a team in San Diego as well. So he goes across the country. So with the reference of 405, I think, was related to that. But as far as the swaps, we've got about $4.5 billion maturing this year, close to $5 billion next year. I would say that the received fixed rate on our swap portfolio is a little over [ 1 2 ]. I don't know what it is today. I haven't looked at my chart today after seeing all the noise and seeing where the tenure was opening up at. But before we were looking at a [ 1 8 or a 1 9 ] kind of received fixed rate. And so if we just roll over those swaps, we will have an incremental benefit over that 2-year time horizon as far as the impact from interest rate swaps. Keep in mind, though, that we would expect, as LIBOR goes up, the net income that you realize for those swaps goes down. And so what you see that is a continuation of basically converting those commercial LIBOR loans to fixed rates.

Yes, over here.

Manan Gosalia of Morgan Stanley. Don, can you talk about how you manage the expense impact of going from data centers to going fully on the cloud? Because presumably, you're going from a lower amortized cost to a higher expense base that's more annualized and that presumably grows even faster?

Yes. Well, Amy and I have been talking about that question for a while, and we've gone through the reviews. I would say that once fully implemented, we would expect to see a modest savings for going through that. There are savings from the efficiencies of being in a cloud environment as opposed to having the data center. At some point in time, we'll have some costs associated with winding down our 1 data center that we have today and talking about how we migrate that activity to the cloud. But there will be some minor elevated cost to the near term. But generally, long term, we would expect to see some incremental savings. Amy, anything else?

Yes. I mean, but clearly one of the things you're hitting on, there's no doubt, as all financial institutions, any company migrates the whole development of your FinOps capability and making sure that you really have the strong governance on how are you monitoring that, how are you really understanding your usage is really critical. So Clark and I will be working on that for one. Two, if you noticed one of the things I talked about was that our overall technology spend has remained relatively flat. We've done that while adding a lot of new applications, a lot of new products and services. So we're delivering a lot of efficiencies as we've been going along the way through our operating efficiencies. So going back to that continuous improvement mindset, we have to continue to do that to offset some of these new capabilities because the new capabilities, in many cases, are more expensive than some of the things that we're sunsetting, no doubt. With that said, those new capabilities provide the opportunity for growth for some of the businesses and the innovative capability. So you have to offset that. But it's constantly -- we're constantly balancing all that. But in full implementation, we are actually forecasting an annual reduction in our expenses modest.

So I think every -- the easiest tech decision every year is we don't -- that's fully depreciated. We shouldn't replace it, right? And if we did that, we'd be in a bad place. So we're rigorously and regularly upgrading. And in some cases, you're maintaining capability. In most cases, we're getting more capability. I think the cloud is clearly one of those examples. So you are transferring these to sort of software costs in some ways and going from fully depreciated to some expense, but you're getting capability, flexibility and speed in that trade.

Mike?

I'm Mike Mayo, Wells Fargo Securities. Chris Gorman, you said 4 of the most dangerous words in our business, this time it's different. And I do want to recognize like the investment banking integration, where you're going to is a new level. I do want to recognize the Laurel Road targets. I do want to recognize you're going to the cloud. So in those ways, it's different, of course. But my question from 29 years ago, when the merger was announced is the same as it is today, and you know what it is. Why does this geographic footprint makes sense? And maybe that's weighing you down a little bit. Now especially in this -- you have 4% market share by state, some of the largest banks is 2 or 3x more than that. Doesn't brand matter a whole lot more, so when it comes to marketing spend -- so you have that familiarity with the customers as they're using digital banking outside of Laurel Road. So -- do you maybe want to get rid of Alaska? For just as just one idea or something like that. So how do you reconcile this disparate geographic footprint with an optimal franchise and business model?

Sure. No, it's a great question. And what's different about footprints now is digital, right? Because you and I will transact everything that's just regular way transactions on our phones. We will go into branches when you're going to do some life-changing event. You're going to send your kid to college, you're going to buy a house, you're going to retire. But you're not going to be in branches all the time, which leads you to think that the winning strategy is the combination of a really great digital offering and a thin branch strategy. And so if you think about what we've been doing, we had 1,400 branches 3 or 4 years ago. Today, we have 1,000. Our business is growing. Our deposits per branch are up 75%. And the difference is we can target people digitally. The thin branch network, in conjunction with great digital -- and I think we've spent a lot of time today talking about how advanced we think we are on a relative basis on digital. Now I will tell you, no one yet knows where this is going to end, right? I mean we're in -- it's being played out as we speak. But where it's going to go is you will go to branches to get really good advice. You can actually promote the brand digitally because if you're really targeted in who you want to do business with, it's not hard to figure out who the 1.1 million doctors are. We know who they are. It's not hard to figure out who the 4.4 million nurses are. We know who they are. So I think the whole notion of sort of having this great density and having a bunch of billboards, I think that was very true at some point. I really like our footprint right now. I like the fact that the West is growing and there's huge in-migration. In-migration is a big tailwind for banking. I also like that in the East, we basically have older, richer clients that completely trust us that aren't going anywhere. That's a good thing, too, if you have $55 billion in AUM. So I think your thesis at one point actually was a lot stronger now, Mike, than it is now. And then I think the big change is digital, and that is what's different.

If I could add to that, too. I think something Victor played on, Mike, that I think is really important that also ties into our cloud strategy is the omnichannel. I mean, banks have been talking about it since I started in banking [ 18 million years ] ago, too. But I think the time now is actually -- it's within our grasp, and we will achieve it. When you talk about branch, digital and contact center, and the contact center is going to -- we're going to -- with our movement to Google Cloud, we are going to a contact center technologies tremendously to enable this strategy. So that delivery, your footprint becomes whatever footprint you want your clients -- where they want to choose how to interact with us. And that's what's important.

One thing that's not different, by the way, is the credit cycle. It will absolutely repeat itself. This time, it was pushed off with massive stimulus, it will happen. Kenneth?

Sorry, just last piece. The thing we haven't talked about, and Victor hit a little bit on it, is just the expansion of product capability in consumer. So for years, we didn't really have a competitive card product. We didn't have a mortgage cap. And these are things that Victor's teams are driving through all of our branches and all of our consumer clients. You couple that with digital and analytics. And if you point those things in the right channels and you have the right products to point there and they're competitive, that's a different thing. We're not saying that's all world-class stuff, but it's very different than what we've had in the past.

Ken?

Ken Usdin from Jefferies. Chris, just to dovetail off your last point, I want to -- if I can, ask Mark a question.

Please do.

You mentioned that charge-offs, Chris, are the biggest input to potentially that ROTCE output. And we just did [ 8 9 8 ] over the last 3 quarters. You're saying 2030 this year, the long-term target is still 40 to 60. But what, if anything, are you thinking about right now as far as things that might start popping out in the book on an ex Ukraine basis because, of course, that's the biggest uncertainty. But what have you been seeing at all that would lead us towards any type of normalization in the portfolio?

I would say early days coming off the pandemic. But I would say that I would expect that the consumer would normalize a little bit as they come off of the stimulus payments. We've got a strong consumer book, but I think that moderates back. So that would be one place. I think that generally feel really, really good about where our commercial book is positioned in our commercial real estate. So I'd say the first place I'm looking is in the consumer book.

And second, Don, if I can just ask you a separate question just on -- you guys had the new disclosure in the retail presentation about the overdrafts going back to 65% below '19 on overdraft and NSF. I don't know if you can help us understand what the base of that is. As a comparison point, we can get from the reg filings, but if you can help us kind of understand that.

What we disclosed in there basically between $140 million and $150 million as far as the baseline for NSFOD income. And so the 65% reduction is based on that level. And as Victor was forced to announce that, that is included in our guidance, assuming a third quarter type of implementation of the changes.

Scott, in the back.

Scott Siefers, Piper Sandler. Don, I was just hoping you could clarify. When you talk about the liquidity deployment opportunity, the up to $20 billion, how much any of it is just already assumed in the NII guidance? And I guess, broadly, of course, there's just so much volatility in rates these days. But what's a reasonable time period in your mind to end up deploying all of that?

Sure. that most of our assumption for 2022 deployment is really coming from the loan growth exceeding our deposit growth in our outlook. And so we would expect some of that liquidity to be used for that purpose throughout this year. Very little change in the core investment portfolio throughout the year. So not much of the assumption there as far as moving that forward. And so that's included in our guideline. That would still take probably 3 years for us to be in a position where we've absorbed the majority of that liquidity position given that kind of an outlook.

Other questions? Well, let me just close again on behalf of everyone at Key, thanking everyone for all of you being here to start with today. And then secondly, for your engagement throughout what was what was a full morning. I think we covered a lot. We now have lunch. We can adjourn to lunch. We will all be around to answer any questions that you might have. And thank you again for your interest in Key. Much appreciated. Have a good afternoon. Thank you.