KeyCorp (KEY) 8-K Keycorp Reports Second Quarter 2010 Profit

Exhibit 99.1

News

	KeyCorp
	127 Public Square
	Cleveland, OH 44114

CONTACTS:	ANALYSTS	MEDIA
	Vernon L. Patterson	William C. Murschel
	216.689.0520	216.828.7416
	Vernon_Patterson@KeyBank.com	William_C_Murschel@KeyBank.com
	Christopher F. Sikora
	216.689.3133
	Chris_F_Sikora@KeyBank.com

INVESTOR	KEY MEDIA
RELATIONS: www.key.com/ir	NEWSROOM: www.key.com/newsroom
FOR IMMEDIATE RELEASE

KEYCORP REPORTS SECOND QUARTER 2010 PROFIT

• Net income from continuing operations of $56 million, or $.06 per common share

• Net interest margin of 3.17%

• Nonperforming loans decrease by $362 million from first quarter of 2010 to 3.19% of period-end loans

• Loan loss reserve at 4.16% of total period-end loans

• Tier 1 common equity and Tier 1 risk-based capital ratios of 8.01% and 13.55%, respectively

• $7.6 billion in new or renewed lending commitments originated

     CLEVELAND, July 22, 2010 – KeyCorp (NYSE: KEY) today announced second quarter net income from continuing operations attributable to Key common shareholders of $56 million, or $.06 per common share. These results compare to a net loss from continuing operations attributable to Key common shareholders of $394 million, or $.68 per common share, for the second quarter of 2009, which was negatively impacted by an $823 million loan loss provision. Second quarter net income attributable to Key common shareholders was $29 million compared to a net loss attributable to Key common shareholders of $390 million for the second quarter of 2009. Net loss attributable to Key common shareholders for the six-month period ended June 30, 2010 was $67 million compared to a net loss attributable to Key common shareholders of $926 million for the same period one year ago.

     Key’s second quarter earnings improvement results from a lower provision for loan losses, higher fee income, and well-controlled expenses when compared to the first quarter of 2010. Credit quality continued to improve across the majority of the loan portfolios in both Community Banking and National Banking. Net charge-offs declined by $87 million, and nonperforming loans decreased by $362 million from March 31, 2010.

     “These results are encouraging and the return to profitability represents an important step forward for our company,” said Chief Executive Officer Henry L. Meyer III. “Continued improvement in credit quality across most of our businesses was the principal contributor to the quarterly performance.”

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 2

     Meyer continued: “Key is now focusing on opportunities in a gradually improving economy. That said, some uncertainty remains in the markets, and consumer and business loan demand is soft. Recognizing current economic conditions, we remain focused on investing in our relationship businesses, maintaining our strong capital and liquidity positions, reducing risk, and careful expense control as we navigate through the economic cycle.”

     At June 30, 2010, Key’s estimated Tier 1 common equity ratio was 8.01% compared to 7.51% at March 31, 2010, and estimated Tier 1 risk-based capital ratio was 13.55% up from 12.92% one quarter ago.

     Key’s strong capital and liquidity positions enable the Company to support the borrowing needs of clients. The Company originated approximately $7.6 billion in new or renewed lending commitments to consumers and businesses during the quarter.

     Meyer also noted that Key opened 18 new branches during the first six months and expects to open an additional 22 new branches during the remainder of 2010, increasing its market presence in selected markets of its 14-state branch network. In addition, Key continues with its plans to modernize its existing branches.

     The following table shows Key’s continuing and discontinued operating results for the comparative quarters and for the six-month periods ended June 30, 2010 and 2009.

Results of Operations

	Three months ended									Six months ended
in millions, except per share amounts	6-30-10			3-31-10			6-30-09			6-30-10			6-30-09
Summary of operations
Income (loss) from continuing operations attributable to Key	$	97		$	(57	)	$	(230	)	$	40		$	(689	)
Income (loss) from discontinued operations, net of taxes(a)		(27	)		2			4			(25	)		(25	)
Net income (loss) attributable to Key	$	70		$	(55	)	$	(226	)	$	15		$	(714	)
Income (loss) from continuing operations attributable to Key	$	97		$	(57	)	$	(230	)	$	40		$	(689	)
Less: Dividends on Series A Preferred Stock		6			6			15			12			27
Noncash deemed dividend — common shares exchanged for Series A Preferred Stock		___			___			114			___			114
Cash dividends on Series B Preferred Stock		31			31			31			62			63
Amortization of discount on Series B Preferred Stock		4			4			4			8			8
Income (loss) from continuing operations attributable to Key common shareholders		56			(98	)		(394	)		(42	)		(901	)
Income (loss) from discontinued operations, net of taxes(a)		(27	)		2			4			(25	)		(25	)
Net income (loss) attributable to Key common shareholders	$	29		$	(96	)	$	(390	)	$	(67	)	$	(926	)
Per common share — assuming dilution
Income (loss) from continuing operations attributable to Key common shareholders	$	.06		$	(.11	)	$	(.68	)	$	(.05	)	$	(1.68	)
Income (loss) from discontinued operations, net of taxes(a)		(.03	)		___			.01			(.03	)		(.05	)
Net income (loss) attributable to Key common shareholders(b)	$	.03		$	(.11	)	$	(.68	)	$	(.08	)	$	(1.73	)

(a)

In September 2009, management made the decision to discontinue the education lending business conducted through Key Education Resources, the education payment and financing unit of KeyBank National Association. In April 2009, management made the decision to curtail the operations of Austin Capital Management, Ltd., an investment subsidiary that specializes in managing hedge fund investments for its institutional customer base. As a result of these decisions, Key has accounted for these businesses as discontinued operations. The loss from discontinued operations for the six-month period ended June 30, 2010 was primarily attributable to fair value adjustments related to the education lending securitization trusts. Included in the loss from discontinued operations for the six-month period ended June 30, 2009, is a $23 million after tax, or $.05 per common share, charge for intangible assets impairment related to Austin Capital Management.

(b)

Earnings per share may not foot due to rounding.

SUMMARY OF CONTINUING OPERATIONS

     Taxable-equivalent net interest income was $623 million for the second quarter of 2010, and the net interest margin was 3.17%. These results compare to taxable-equivalent net interest income of $575 million and a net interest margin of 2.70% for the second quarter of 2009. The increase in the net interest margin is primarily attributable to lower funding costs. The Company continues to experience an improvement in the mix of deposits by reducing the level of higher costing certificates of deposit and increasing lower costing transaction accounts. The Company expects this change in funding mix to continue through the second half of 2010

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 3

as certificates of deposit mature and re-price to lower current market rates. Over the past year, funding costs were also reduced by maturities of long-term debt and the 2009 exchanges of capital securities for Key common shares. Key also experienced improved spreads on loan renewals.

     Compared to the first quarter of 2010, taxable-equivalent net interest income decreased by $9 million, and the net interest margin fell by two basis points. Although there was a benefit from the improvement in the mix of deposits, the decline in the net interest margin was largely the result of funds from loan pay downs being reinvested in lower yielding investment securities.

     Key’s noninterest income was $492 million for the second quarter of 2010, compared to $706 million for the year-ago quarter. The second quarter of 2009 included a $125 million net gain from the sale of collateralized mortgage obligations, a $95 million gain related to the exchange of common shares for capital securities, and a $32 million gain from the sale of Key’s claim associated with the Lehman Brothers’ bankruptcy. Additionally, net gains on leased equipment during the second quarter of 2010 declined by $34 million from the year-ago quarter. Partially offsetting this decline in noninterest income were net gains of $25 million from loan sales, and net gains of $17 million from principal investing (including results attributable to noncontrolling interests) in the second quarter of 2010, compared to net losses of $3 million and $6 million for the same period last year, as well as an increase in investment banking and capital markets income of $17 million during the second quarter of 2010.

     The major components of Key’s fee-based income for the past five quarters are shown in the following table.

Fee-based Income – Major Components

in millions	2Q10		1Q10		4Q09			3Q09			2Q09
Trust and investment services income	$	112	$	114	$	117		$	113		$	119
Service charges on deposit accounts		80		76		82			83			83
Operating lease income		43		47		52			55			59
Letter of credit and loan fees		42		40		52			46			44
Corporate-owned life insurance income		28		28		36			26			25
Electronic banking fees		29		27		27			27			27
Insurance income		19		18		16			18			16
Net gains (losses) from principal investing		17		37		80			(6	)		(6	)
Investment banking and capital markets income (loss)		31		9		(47	)		(26	)		14

     Compared to the first quarter of 2010, noninterest income increased by $42 million. This increase in noninterest income resulted from an increase of $22 million in investment banking and capital markets income, a $21 million increase in net gains from loan sales, and increases in various other miscellaneous income components. These gains were partially offset by a $20 million decline in net gains from principal investing (including results attributable to noncontrolling interests).

     Key’s noninterest expense was $769 million for the second quarter of 2010, compared to $855 million for the same period last year. FDIC deposit insurance premiums decreased by $37 million from the second quarter of 2009 as a result of a special assessment imposed during that time period. Key also recorded a credit of $10 million to the provision for losses on lending-related commitments during the second quarter of 2010, compared to a charge to the provision of $11 million in the year-ago quarter. Additionally, in the second quarter of 2009, Key recognized a $16 million charge to the provision for losses on low-income housing tax credit (“LIHTC”) guaranteed funds and incurred $14 million more in operating lease expense than in the current quarter.

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 4

     Compared to the first quarter of 2010, noninterest expense decreased by $16 million. Nonpersonnel expense decreased by $39 million, reflecting a decrease in other real estate owned (“OREO”) expense of $10 million, an increase in the credit to the provision for losses on lending-related commitments of $8 million, and reductions in various other miscellaneous expense items. These items were partially offset by a $23 million increase in personnel expense due primarily to compensation accruals on increases in fee-related revenues and improved profitability.

ASSET QUALITY

     Key’s provision for loan losses was $228 million for the second quarter of 2010, compared to $823 million for the year-ago quarter and $413 million for the first quarter of 2010. Key’s allowance for loan losses was $2.2 billion, or 4.16% of total loans, at June 30, 2010, compared to 4.34% at March 31, 2010, and 3.48% at June 30, 2009.

     Selected asset quality statistics for Key for each of the past five quarters are presented in the following table.

Selected Asset Quality Statistics from Continuing Operations

dollars in millions	2Q10			1Q10			4Q09			3Q09			2Q09
Net loan charge-offs	$	435		$	522		$	708		$	587		$	502
Net loan charge-offs to average loans		3.18	%		3.67	%		4.64	%		3.59	%		2.93	%
Allowance for loan losses	$	2,219		$	2,425		$	2,534		$	2,485		$	2,339
Allowance for credit losses (a)		2,328			2,544			2,655			2,579			2,404
Allowance for loan losses to period-end loans		4.16	%		4.34	%		4.31	%		4.00	%		3.48	%
Allowance for credit losses to period-end loans		4.36			4.55			4.52			4.15			3.58
Allowance for loan losses to nonperforming loans		130.30			117.43			115.87			108.52			107.05
Allowance for credit losses to nonperforming loans		136.70			123.20			121.40			112.62			110.02
Nonperforming loans at period end	$	1,703		$	2,065		$	2,187		$	2,290		$	2,185
Nonperforming assets at period end		2,086			2,428			2,510			2,799			2,548
Nonperforming loans to period-end portfolio loans		3.19	%		3.69	%		3.72	%		3.68	%		3.25	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		3.88			4.31			4.25			4.46			3.77

(a) Includes the allowance for loan losses plus the liability for credit losses on lending-related commitments.

     Net loan charge-offs for the quarter totaled $435 million, or 3.18% of average loans. These results compare to $502 million, or 2.93%, for the same period last year and $522 million, or 3.67%, for the previous quarter. Management expects net charge-offs to remain elevated in 2010 but continue to show improvement in future quarters.

     Key’s net loan charge-offs by loan type for each of the past five quarters are shown in the following table.

Net Loan Charge-offs from Continuing Operations

dollars in millions	2Q10			1Q10			4Q09			3Q09			2Q09
Commercial, financial and agricultural	$	136		$	126		$	218		$	168		$	168
Real estate___ commercial mortgage		126			106			165			81			87
Real estate___ construction		75			157			181			216			133
Commercial lease financing		14			21			39			27			22
Total commercial loans		351			410			603			492			410
Home equity — Community Banking		25			30			27			25			24
Home equity — Other		16			17			19			20			18
Marine		19			38			33			25			29
Other		24			27			26			25			21
Total consumer loans		84			112			105			95			92
Total net loan charge-offs	$	435		$	522		$	708		$	587		$	502
Net loan charge-offs to average loans from continuing operations		3.18	%		3.67	%		4.64	%		3.59	%		2.93	%
Net loan charge-offs from discontinued operations — education lending business	$	31		$	36		$	36		$	38		$	37

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 5

     Compared to the first quarter of 2010, net loan charge-offs in the commercial loan portfolio decreased by $59 million. The decrease was primarily attributable to a decline in the real estate construction loan portfolio. The level of net charge-offs in the consumer portfolio also declined by $28 million. As shown in the table on page 6, Key’s exit loan portfolio accounted for $114 million, or 26.21%, of Key’s total net loan charge-offs for the second quarter of 2010. Net charge-offs in the exit loan portfolio decreased by $39 million from the first quarter of 2010, primarily driven by improvements in the residential properties – homebuilder and marine portfolios.

     At June 30, 2010, Key’s nonperforming loans totaled $1.7 billion and represented 3.19% of period-end portfolio loans, compared to 3.69% at March 31, 2010, and 3.25% at June 30, 2009. Nonperforming assets at June 30, 2010 totaled $2.1 billion and represented 3.88% of portfolio loans, OREO and other nonperforming assets, compared to 4.31% at March 31, 2010, and 3.77% at June 30, 2009. The following table illustrates the trend in Key’s nonperforming assets by loan type over the past five quarters.

Nonperforming Assets from Continuing Operations

dollars in millions	2Q10			1Q10			4Q09			3Q09			2Q09
Commercial, financial and agricultural	$	489		$	558		$	586		$	679		$	700
Real estate — commercial mortgage		404			579			614			566			454
Real estate — construction		473			607			641			702			716
Commercial lease financing		83			99			113			131			122
Total consumer loans		254			222			233			212			193
Total nonperforming loans		1,703			2,065			2,187			2,290			2,185
Nonperforming loans held for sale		221			195			116			304			145
OREO and other nonperforming assets		162			168			207			205			218
Total nonperforming assets	$	2,086		$	2,428		$	2,510		$	2,799		$	2,548
Restructured loans included in nonperforming loans(a)	$	213		$	226		$	364		$	65		$	7
Nonperforming assets from discontinued operations — education lending business		40			43			14			12			3
Nonperforming loans to period-end portfolio loans		3.19	%		3.69	%		3.72	%		3.68	%		3.25	%
Nonperforming assets to period-end portfolio loans, plus OREO and other nonperforming assets		3.88			4.31			4.25			4.46			3.77

(a) Restructured loans (i.e. troubled debt restructurings) are those for which Key, for reasons related to a borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. These concessions are made to improve the collectability of the loan and generally take the form of a reduction of the interest rate, extension of the maturity date or reduction in the principal balance.

     Nonperforming assets continued to decrease during the second quarter of 2010, representing the third consecutive quarterly decline. Most of the reduction came from nonperforming loans in the commercial real estate and commercial, financial and agricultural portfolios. These reductions were offset in part by an increase in nonperforming loans held for sale and consumer loans. As shown in the following table, Key’s exit loan portfolio accounted for $385 million, or 18.46%, of Key’s total nonperforming assets at June 30, 2010, compared to $499 million, or 20.55%, at March 31, 2010.

     Shown in the following table are the composition of Key’s exit loan portfolio at June 30, 2010, and March 31, 2010, the net charge-offs recorded on this portfolio for the first and second quarters of 2010, and the nonperforming status of these loans at June 30, 2010, and March 31, 2010.

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 6

Exit Loan Portfolio from Continuing Operations

												Balance on
	Balance				Change			Net Loan				Nonperforming
	Outstanding				6-30-10 vs.			Charge-offs				Status
in millions	6-30-10		3-31-10		3-31-10			2Q10		1Q10		6-30-10		3-31-10
Residential properties___ homebuilder	$	195	$	269	$	(74	)	$	20	$	44	$	109	$	167
Residential properties___ held for sale		25		40		(15	)		___		___		25		40
Total residential properties		220		309		(89	)		20		44		134		207
Marine and RV floor plan		268		339		(71	)		14		28		59		66
Commercial lease financing(a)		2,437		2,685		(248	)		44		22		133		191
Total commercial loans		2,925		3,333		(408	)		78		94		326		464
Home equity___ Other		753		795		(42	)		16		17		17		18
Marine		2,491		2,636		(145	)		19		38		41		16
RV and other consumer		188		201		(13	)		1		4		1		1
Total consumer loans		3,432		3,632		(200	)		36		59		59		35
Total exit loans in loan portfolio	$	6,357	$	6,965	$	(608	)	$	114	$	153	$	385	$	499
Discontinued operations — education lending business (not included in exit loans above)(b)	$	6,686	$	6,268	$	418		$	31	$	36	$	40	$	42

(a)	Includes the business aviation, commercial vehicle, office products, construction and industrial leases, and Canadian lease financing portfolios; and all remaining balances related to lease in, lease out; sale in, sale out; service contract leases; and qualified technological equipment leases.
(b)	Includes loans in Key’s education loan securitization trusts consolidated upon the adoption of new consolidation accounting guidance on January 1, 2010.

CAPITAL

     Key’s risk-based capital ratios included in the following table continued to exceed all “well-capitalized” regulatory benchmarks at June 30, 2010.

Capital Ratios

	6-30-10			3-31-10			12-31-09			9-30-09			6-30-09
Tier 1 common equity(a) (b)		8.01	%		7.51	%		7.50	%		7.64	%		7.36	%
Tier 1 risk-based capital(a)		13.55			12.92			12.75			12.61			12.57
Total risk-based capital (a)		17.58			17.07			16.95			16.65			16.67
Tangible common equity to tangible assets(b)		7.65			7.37			7.56			7.58			7.35

(a)	June 30, 2010 ratio is estimated.
(b)	The table entitled “GAAP to Non-GAAP Reconciliations” presents the computations of certain financial measures related to “tangible common equity” and “Tier 1 common equity.” The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.

     As shown in the preceding table, at June 30, 2010, Key had an estimated Tier 1 common equity ratio of 8.01%, an estimated Tier 1 risk-based capital ratio of 13.55%, and a tangible common equity ratio of 7.65%.

     Transactions that caused the change in Key’s outstanding common shares over the past five quarters are summarized in the following table.

Summary of Changes in Common Shares Outstanding

in thousands	2Q10		1Q10		4Q09			3Q09		2Q09
Shares outstanding at beginning of period		879,052		878,535		878,559			797,246		498,573
Common shares exchanged for capital securities		___		___		___			81,278		46,338
Common shares exchanged for Series A Preferred Stock		___		___		___			___		46,602
Common shares issued		___		___		___			___		205,439
Shares reissued (returned) under employee benefit plans		1,463		517		(24	)		35		294
Shares outstanding at end of period		880,515		879,052		878,535			878,559		797,246

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 7

     During each of the first and second quarters of 2010, Key made a $31 million cash dividend payment to the U.S. Treasury Department as a participant in the U.S. Treasury’s Capital Purchase Program. During 2009, Key made four quarterly dividend payments aggregating $125 million to the U.S. Treasury Department.

LINE OF BUSINESS RESULTS

     The following table shows the contribution made by each major business group to Key’s taxable-equivalent revenue from continuing operations and income (loss) from continuing operations attributable to Key for the periods presented. The specific lines of business that comprise each of the major business groups are described under the heading “Line of Business Descriptions.” During the first quarter of 2010, Key re-aligned its reporting structure for its business groups. Prior to 2010, Consumer Finance consisted mainly of portfolios which were identified as exit or run-off portfolios and were included in Key’s National Banking segment. Effective for all periods presented, Key is reflecting the results of these exit portfolios in Other Segments. The automobile dealer floor plan business, previously included in Consumer Finance, has been re-aligned with the Commercial Banking line of business within the Community Banking segment. In addition, other previously identified exit portfolios included in the National Banking segment have been moved to Other Segments. For more detailed financial information pertaining to each business group and its respective lines of business, see the tables at the end of this release.

Major Business Groups

									Percent change 2Q10 vs.
dollars in millions	2Q10		1Q10			2Q09			1Q10			2Q09
Revenue from continuing operations (TE)
Community Banking	$	607	$	599		$	630			1.3	%		(3.7	)%
National Banking		409		376			445			8.8			(8.1	)
Other Segments(a)		86		96			187			(10.4	)		(54.0	)
Total Segments		1,102		1,071			1,262			2.9			(12.7	)
Reconciling Items (b)		13		11			19			18.2			(31.6	)
Total	$	1,115	$	1,082		$	1,281			3.0	%		(13.0	)%
Income (loss) from continuing operations attributable to Key
Community Banking	$	32	$	6		$	(30	)		433.3	%		N/M
National Banking		33		(33	)		(211	)		N/M			N/M
Other Segments(a)		29		(47	)		8			N/M			262.5	%
Total Segments		94		(74	)		(233	)		N/M			N/M
Reconciling Items (b)		3		17			3			(82.4	)		___
Total	$	97	$	(57	)	$	(230	)		N/M			N/M

(a) Other Segments’ results for the second quarter of 2009 include net gains of $125 million ($78 million after tax) in connection with the repositioning of the securities portfolio and a $95 million ($59 million after tax) gain related to the exchange of Key common shares for capital securities.

(b) Reconciling Items for the second quarter of 2009 include a $32 million ($20 million after tax) gain from the sale of Key’s claim associated with the Lehman Brothers’ bankruptcy.

TE = Taxable Equivalent, N/M = Not Meaningful

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 8

Community Banking

										Percent change 2Q10 vs.
dollars in millions	2Q10			1Q10			2Q09			1Q10			2Q09
Summary of operations
Net interest income (TE)	$	408		$	412		$	437			(1.0)	%		(6.6	)%
Noninterest income		199			187			193			6.4			3.1
Total revenue (TE)		607			599			630			1.3			(3.7	)
Provision for loan losses		121			142			199			(14.8	)		(39.2	)
Noninterest expense		455			467			496			(2.6	)		(8.3	)
Income (loss) before income taxes (TE)		31			(10	)		(65	)		N/M			N/M
Allocated income taxes and TE adjustments		(1	)		(16	)		(35	)		93.8			97.1	%
Net income (loss) attributable to Key	$	32		$	6		$	(30	)		433.3	%		N/M
Average balances
Loans and leases	$	27,218		$	27,769		$	30,305			(2.0)	%		(10.2	)%
Total assets		30,292			30,873			33,162			(1.9	)		(8.7	)
Deposits		50,421			51,459			52,786			(2.0	)		(4.5	)
Assets under management at period end	$	16,980		$	18,248		$	15,815			(6.9)	%		7.4	%

TE = Taxable Equivalent, N/M = Not Meaningful

Additional Community Banking Data

										Percent change 2Q10 vs.
dollars in millions	2Q10			1Q10			2Q09			1Q10			2Q09
Average deposits outstanding
NOW and money market deposit accounts	$	19,418		$	18,650		$	17,367			4.1	%		11.8	%
Savings deposits		1,870			1,814			1,785			3.1			4.8
Certificates of deposit ($100,000 or more)		6,597			7,363			8,975			(10.4	)		(26.5	)
Other time deposits		11,248			12,559			14,898			(10.4	)		(24.5	)
Deposits in foreign office		421			502			549			(16.1	)		(23.3	)
Noninterest-bearing deposits		10,867			10,571			9,212			2.8			18.0
Total deposits	$	50,421		$	51,459		$	52,786			(2.0)	%		(4.5	)%
Home equity loans
Average balance	$	9,837		$	9,967		$	10,291
Weighted-average loan-to-value ratio (at date of origination)		70	%		70	%		70	%
Percent first lien positions		52			53			53
Other data
Branches		1,019			1,014			993
Automated teller machines		1,511			1,501			1,485

Community Banking Summary of Operations

     Community Banking recorded net income attributable to Key of $32 million for the second quarter of 2010, compared to a net loss attributable to Key of $30 million for the year-ago quarter. Decreases in the provision for loan losses and noninterest expense and an increase in noninterest income contributed to the improvement in the second quarter of 2010.

     Taxable-equivalent net interest income declined by $29 million, or 7%, from the second quarter of 2009, due to declines in average earning assets and average deposits. Average earning assets decreased $3 billion, or 10%, from the year-ago quarter, reflecting reductions in the commercial loan and home equity loan portfolios. Average deposits declined by $2 billion, or 5%. The mix of deposits continues to change from the prior period as higher-costing certificates of deposit originated in prior years mature, partially offset by growth in noninterest-bearing deposits and NOW and money market deposit accounts.

     Noninterest income increased by $6 million, or 3%, from the year-ago quarter, due to higher income from trust and investment services, electronic banking fees, and a reduction in the provision for credit losses from client derivatives. The increase in trust and investment services income reflects increased performance in our Key Private Bank, as well as growth in our branch based investment services. These factors were partially offset by lower service charges on deposits, increased net losses on securities from a Community Development lending investment, and decreases in various other components of noninterest income.

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 9

     The provision for loan losses declined by $78 million, or 39%, compared to the second quarter of 2009 due to the improved economic conditions from one year ago and lower loan balances.

     Noninterest expense declined by $41 million, or 8%, from the year-ago quarter. FDIC deposit insurance premiums decreased $29 million from the second quarter of 2009 as a result of a special assessment imposed during that time period, and a credit of $4 million was recorded to the provision for losses on lending-related commitments compared to a charge of $4 million recorded in the second quarter of 2009. These decreases were partially offset by increases in personnel expense and professional fees.

National Banking

									Percent change 2Q10 vs.
dollars in millions	2Q10		1Q10			2Q09			1Q10			2Q09
Summary of operations
Net interest income (TE)	$	199	$	197		$	234			1.0	%		(15.0	)%
Noninterest income		210		179			211			17.3			(.5	)
Total revenue (TE)		409		376			445			8.8			(8.1	)
Provision for loan losses		99		161			494			(38.5	)		(80.0	)
Noninterest expense		259		271			292			(4.4	)		(11.3	)
Income (loss) before income taxes (TE)		51		(56	)		(341	)		N/M			N/M
Allocated income taxes and TE adjustments		18		(23	)		(129	)		N/M			N/M
Net income (loss)		33		(33	)		(212	)		N/M			N/M
Less: Net income (loss) attributable to noncontrolling interests		—		—			(1	)		N/M			(100.0	)
Net income (loss) attributable to Key	$	33	$	(33	)	$	(211	)		N/M			N/M
Average balances
Loans and leases	$	20,948	$	22,440		$	28,586			(6.6)	%		(26.7	)%
Loans held for sale		381		240			393			58.8			(3.1	)
Total assets		24,781		26,269			34,798			(5.7	)		(28.8	)
Deposits		12,474		12,416			13,019			.5			(4.2	)
Assets under management at period end	$	41,882	$	47,938		$	47,567			(12.6)	%		(12.0	)%

TE = Taxable Equivalent, N/M = Not Meaningful

National Banking Summary of Operations

     National Banking recorded net income attributable to Key of $33 million for the second quarter of 2010, compared to a $211 million net loss attributable to Key for the same period one year ago. This improvement in the second quarter of 2010 was a result of a substantial decrease in the provision for loan losses.

     Taxable-equivalent net interest income decreased by $35 million, or 15%, from the second quarter of 2009, primarily due to lower earning assets, partially offset by improved earning asset yields. Average earning assets decreased by $8 billion, or 26%, from the year-ago quarter.

     Noninterest income declined $1 million from the second quarter of 2009. Investment banking and capital markets income increased $18 million, and net gains from loan sales were $9 million, compared to net losses from loan sales of $7 million for the same period one year ago. These gains were offset by decreases in brokerage commissions and fee income of $13 million, operating lease revenue of $8 million, and various other miscellaneous income items from the second quarter of 2009.

     The provision for loan losses in the second quarter of 2010 was $99 million compared to $494 million for the same period one year ago. National Banking continued to experience improved asset quality for the third quarter in a row.

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 10

     Noninterest expense decreased by $33 million, or 11%, from the second quarter of 2009 as a result of a credit of $6 million to the provision for losses on lending-related commitments compared to a charge of $13 million in the year-ago quarter. Operating lease expense, the provision for losses on LIHTC guaranteed funds, and FDIC deposit insurance premiums also declined from the second quarter of 2009. These improvements were partially offset by an increase in personnel costs and higher costs associated with OREO.

Other Segments

     Other Segments consist of Corporate Treasury, Key’s Principal Investing unit and various exit portfolios which were previously included within the National Banking segment. These exit portfolios were moved to Other Segments during the first quarter of 2010. Prior periods have been adjusted to conform with the current reporting of the financial information for each segment. Other Segments generated net income attributable to Key of $29 million for the second quarter of 2010, compared to net income attributable to Key of $8 million for the same period last year. These results reflect an increase in net interest income from the second quarter of 2009 as well as a decrease in the provision for loan losses. In addition, net gains from principal investing attributable to Key were $12 million during the current quarter, compared to net losses of $10 million in the year-ago quarter. Compared to the same period in the prior year, the impact of the above items was partially offset by net gains of $125 million recorded in connection with the repositioning of the securities portfolio as well as a $95 million gain related to the exchange of Key common shares for capital securities during the second quarter of 2009.

Line of Business Descriptions

Community Banking

Regional Bankingprovides individuals with branch-based deposit and investment products, personal finance services and loans, including residential mortgages, home equity and various types of installment loans. This line of business also provides small businesses with deposit, investment and credit products, and business advisory services.

Regional Banking also offers financial, estate and retirement planning, and asset management services to assist high-net-worth clients with their banking, trust, portfolio management, insurance, charitable giving and related needs.

Commercial Bankingprovides midsize businesses with products and services that include commercial lending, cash management, equipment leasing, investment and employee benefit programs, succession planning, access to capital markets, derivatives and foreign exchange.

National Banking

Real Estate Capital and Corporate Banking Servicesconsists of two business units, Real Estate Capital and Corporate Banking Services.

Real Estate Capital is a national business that provides construction and interim lending, permanent debt placements and servicing, equity and investment banking, and other commercial banking products and services to developers, brokers and owner-investors. This unit deals primarily with nonowner-occupied properties (i.e., generally properties in which at least 50% of the debt service is provided by rental income from nonaffiliated third parties). Real Estate Capital emphasizes providing clients with finance solutions through access to the capital markets.

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 11

Corporate Banking Services provides cash management, interest rate derivatives, and foreign exchange products and services to clients served by both the Community Banking and National Banking groups. Through its Public Sector and Financial Institutions businesses, Corporate Banking Services also provides a full array of commercial banking products and services to government and not-for-profit entities, and to community banks. A variety of cash management services, including the processing of tuition payments for private schools, are provided through the Global Treasury Management unit.

Equipment Financemeets the equipment leasing needs of companies worldwide and provides equipment manufacturers, distributors and resellers with financing options for their clients. Lease financing receivables and related revenues are assigned to other lines of business (primarily Institutional and Capital Markets, and Commercial Banking) if those businesses are principally responsible for maintaining the relationship with the client.

Institutional and Capital Markets,through its KeyBanc Capital Markets unit, provides commercial lending, treasury management, investment banking, derivatives, foreign exchange, equity and debt underwriting and trading, and syndicated finance products and services to large corporations and middle-market companies.

Through its Victory Capital Management unit, Institutional and Capital Markets also manages or offers advice regarding investment portfolios for a national client base, including corporations, labor unions, not-for-profit organizations, governments and individuals. These portfolios may be managed in separate accounts, common funds or the Victory family of mutual funds.

     Cleveland-based KeyCorp (NYSE: KEY) is one of the nation’s largest bank-based financial services companies, with assets of approximately $94 billion at June 30, 2010. Key companies provide investment management, retail and commercial banking, and investment banking products and services to individuals and companies throughout the United States and, for certain businesses, internationally. In 2009, KeyBank was awarded its seventh consecutive “Outstanding” rating for economic development achievements under the Community Reinvestment Act, the only national bank among the 50 largest in the United States to achieve this distinction from the Office of the Comptroller of the Currency. Key has also been recognized for excellence in numerous areas of the multi-channel customer banking experience, including Corporate Insight’s 2009Bank Monitorfor online service. For more information about Key, visithttps://www.key.com/.

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 12

Notes to Editors:

A live Internet broadcast of KeyCorp’s conference call to discuss quarterly results and currently anticipated earnings trends and to answer analysts’ questions can be accessed through the Investor Relations section athttps://www.key.com/irat 9:00 a.m. ET, on Thursday, July 22, 2010. An audio replay of the call will be available through July 29, 2010.

For up-to-date company information, media contacts and facts and figures about Key’s lines of business visit our Media Newsroom athttps://www.key.com/newsroom.

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about Key’s financial condition, results of operations, earnings outlook, asset quality trends and profitability. Forward-looking statements are not historical facts but instead represent only management’s current expectations and forecasts regarding future events, many of which, by their nature, are inherently uncertain and outside of Key’s control. Key’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Factors that could cause Key’s actual results to differ materially from those described in the forward-looking statements can be found in Key’s Annual Report on Form 10-K for the year ended December 31, 2009 and Quarterly Report on Form 10-Q for the period ended March 31, 2010, which have been filed with the Securities and Exchange Commission and are available on Key’s website (www.key.com) and on the Securities and Exchange Commission’s website (www.sec.gov). Forward-looking statements are not guarantees of future performance and should not be relied upon as representing management’s views as of any subsequent date. Key does not undertake any obligation to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.

###

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 13

Financial Highlights
(dollars in millions, except per share amounts)

		Three months ended
		6-30-10			3-31-10			6-30-09
Summary of operations
Net interest income (TE)		$	623		$	632		$	575
Noninterest income			492			450			706
Total revenue (TE)			1,115			1,082			1,281
Provision for loan losses			228			413			823
Noninterest expense			769			785			855
Income (loss) from continuing operations attributable to Key			97			(57	)		(230	)
Income (loss) from discontinued operations, net of taxes(b)			(27	)		2			4
Net income (loss) attributable to Key			70			(55	)		(226	)
Income (loss) from continuing operations attributable to Key common shareholders		$	56		$	(98	)	$	(394	)
Income (loss) from discontinued operations, net of taxes (b)			(27	)		2			4
Net income (loss) attributable to Key common shareholders			29			(96	)		(390	)
Per common share
Income (loss) from continuing operations attributable to Key common shareholders		$	.06		$	(.11	)	$	(.68	)
Income (loss) from discontinued operations, net of taxes (b)			(.03	)		—			.01
Net income (loss) attributable to Key common shareholders			.03			(.11	)		(.68	)
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution			.06			(.11	)		(.68	)
Income (loss) from discontinued operations, net of taxes — assuming dilution(b)			(.03	)		—			.01
Net income (loss) attributable to Key common shareholders — assuming dilution			.03			(.11	)		(.68	)
Cash dividends paid			.01			.01			.01
Book value at period end			9.19			9.01			10.21
Tangible book value at period end			8.10			7.91			8.93
Market price at period end			7.69			7.75			5.24
Performance ratios
From continuing operations:
Return on average total assets			.44	%		(.26	)%		(.96	)%
Return on average common equity			2.84			(4.95	)		(15.54	)
Net interest margin (TE)			3.17			3.19			2.70
From consolidated operations:
Return on average total assets			.30	%		(.23	)%		(.90	)%
Return on average common equity			1.47			(4.85	)		(15.32	)
Net interest margin (TE)			3.12			3.13			2.67
Loan to deposit			93.43			93.44			107.24
Capital ratios at period end
Key shareholders’ equity to assets			11.49	%		11.17	%		11.10	%
Tangible Key shareholders’ equity to tangible assets			10.58			10.26			10.16
Tangible common equity to tangible assets(a)			7.65			7.37			7.35
Tier 1 common equity(a) (c)			8.01			7.51			7.36
Tier 1 risk-based capital (c)			13.55			12.92			12.57
Total risk-based capital(c)			17.58			17.07			16.67
Leverage (c)			11.99			11.60			12.26
Asset quality — from continuing operations
Net loan charge-offs		$	435		$	522		$	502
Net loan charge-offs to average loans			3.18	%		3.67	%		2.93	%
Allowance for loan losses		$	2,219		$	2,425		$	2,339
Allowance for credit losses			2,328			2,544			2,404
Allowance for loan losses to period-end loans			4.16	%		4.34	%		3.48	%
Allowance for credit losses to period-end loans			4.36			4.55			3.58
Allowance for loan losses to nonperforming loans			130.30			117.43			107.05
Allowance for credit losses to nonperforming loans			136.70			123.20			110.02
Nonperforming loans at period end	��	$	1,703		$	2,065		$	2,185
Nonperforming assets at period end			2,086			2,428			2,548
Nonperforming loans to period-end portfolio loans			3.19	%		3.69	%		3.25	%
Nonperforming assets to period-end portfolio loans plus
OREO and other nonperforming assets			3.88			4.31			3.77
Trust and brokerage assets
Assets under management		$	58,862		$	66,186		$	63,382
Nonmanaged and brokerage assets			27,189			27,809			23,261
Other data
Average full-time equivalent employees			15,665			15,772			16,937
Branches			1,019			1,014			993
Taxable-equivalent adjustment		$	6		$	7		$	6

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 14

Financial Highlights (continued)
(dollars in millions, except per share amounts)

	Six months ended
	6-30-10			6-30-09
Summary of operations
Net interest income (TE)	$	1,255		$	1,170
Noninterest income		942			1,184
Total revenue (TE)		2,197			2,354
Provision for loan losses		641			1,670
Noninterest expense		1,554			1,782
Income (loss) from continuing operations attributable to Key		40			(689	)
Income (loss) from discontinued operations, net of taxes(b)		(25	)		(25	)
Net income (loss) attributable to Key		15			(714	)
Income (loss) from continuing operations attributable to Key common shareholders	$	(42	)	$	(901	)
Income (loss) from discontinued operations, net of taxes (b)		(25	)		(25	)
Net income (loss) attributable to Key common shareholders		(67	)		(926	)
Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	(0.05	)	$	(1.68	)
Income (loss) from discontinued operations, net of taxes (b)		(.03	)		(.05	)
Net income (loss) attributable to Key common shareholders		(.08	)		(1.73	)
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution		(.05	)		(1.68	)
Income (loss) from discontinued operations, net of taxes — assuming dilution(b)		(.03	)		(.05	)
Net income (loss) attributable to Key common shareholders — assuming dilution		(.08	)		(1.73	)
Cash dividends paid		.02			.0725
Performance ratios
From continuing operations:
Return on average total assets		.09	%		(1.42	)%
Return on average common equity		(1.06	)		(21.88	)
Net interest margin (TE)		3.18			2.75
From consolidated operations:
Return on average total assets		.03	%		(1.41	)%
Return on average common equity		(1.70	)		(22.58	)
Net interest margin (TE)		3.13			2.72
Asset quality — from continuing operations
Net loan charge-offs	$	957		$	962
Net loan charge-offs to average loans		3.43	%		2.77	%
Other data
Average full-time equivalent employees		15,718			17,201
Taxable-equivalent adjustment	$	13		$	12

(a)	The following table entitled “GAAP to Non-GAAP Reconciliations” presents the computations of certain financial measures related to “tangible common equity” and “Tier 1 common equity.” The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.
(b)	In September 2009, management made the decision to discontinue the education lending business conducted through Key Education Resources, the education payment and financing unit of KeyBank National Association. In April 2009, management made the decision to curtail the operations of Austin Capital Management, Ltd., an investment subsidiary that specializes in managing hedge fund investments for its institutional customer base. As a result of these decisions, Key has accounted for these businesses as discontinued operations.
(c)	6-30-10 ratio is estimated.

TE = Taxable Equivalent, GAAP = U.S. generally accepted accounting principles

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 15

GAAP to Non-GAAP Reconciliations
(dollars in millions, except per share amounts)

The table below presents the computations of certain financial measures related to “tangible common equity” and “Tier 1 common equity.” The tangible common equity ratio has become a focus of some investors, and management believes that this ratio may assist investors in analyzing Key’s capital position absent the effects of intangible assets and preferred stock. Traditionally, the banking regulators have assessed bank and bank holding company capital adequacy based on both the amount and composition of capital, the calculation of which is prescribed in federal banking regulations. As a result of the Supervisory Capital Assessment Program, the Federal Reserve has focused its assessment of capital adequacy on a component of Tier 1 capital, known as Tier 1 common equity. Because the Federal Reserve has long indicated that voting common shareholders’ equity (essentially Tier 1 capital less preferred stock, qualifying capital securities and noncontrolling interests in subsidiaries) generally should be the dominant element in Tier 1 capital, such a focus is consistent with existing capital adequacy guidelines and does not imply a new or ongoing capital standard.

Because the Tier 1 common equity is neither formally defined by GAAP nor prescribed in amount by federal banking regulations, this measure is considered to be a non-GAAP financial measure. Since analysts and banking regulators may assess Key’s capital adequacy using tangible common equity and Tier 1 common equity, management believes it is useful to provide investors the ability to assess Key’s capital adequacy on these same bases. The table also reconciles the GAAP performance measures to the corresponding non-GAAP measures.

Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited. To mitigate these limitations, Key has procedures in place to ensure that these measures are calculated using the appropriate GAAP or regulatory components and to ensure that Key’s performance is properly reflected to facilitate period-to-period comparisons. Although these non-GAAP financial measures are frequently used by investors in the evaluation of a company, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP.

	Three months ended
	6-30-10			3-31-10			6-30-09
Tangible common equity to tangible assets at period end
Key shareholders’ equity (GAAP)	$	10,820		$	10,641		$	10,851
Less: Intangible assets		959			963			1,021
Preferred Stock, Series B		2,438			2,434			2,422
Preferred Stock, Series A		291			291			291
Tangible common equity (non-GAAP)	$	7,132		$	6,953		$	7,117
Total assets (GAAP)	$	94,167		$	95,303		$	97,792
Less: Intangible assets		959			963			1,021
Tangible assets (non-GAAP)	$	93,208		$	94,340		$	96,771
Tangible common equity to tangible assets ratio (non-GAAP)		7.65	%		7.37	%		7.35	%
Tier 1 common equity at period end
Key shareholders’ equity (GAAP)	$	10,820		$	10,641		$	10,851
Qualifying capital securities		1,791			1,791			2,290
Less: Goodwill		917			917			917
Accumulated other comprehensive income (loss)(a)		127			(25	)		(20	)
Other assets(b)		517			765			172
Total Tier 1 capital (regulatory)		11,050			10,775			12,072
Less: Qualifying capital securities		1,791			1,791			2,290
Preferred Stock, Series B		2,438			2,434			2,422
Preferred Stock, Series A		291			291			291
Total Tier 1 common equity (non-GAAP)	$	6,530		$	6,259		$	7,069
Net risk-weighted assets (regulatory)(b), (c)	$	81,572		$	83,362		$	96,006
Tier 1 common equity ratio (non-GAAP)(c)		8.01	%		7.51	%		7.36	%

(a)	Includes net unrealized gains or losses on securities available for sale (except for net unrealized losses on marketable equity securities), net gains or losses on cash flow hedges, and amounts resulting from the December 31, 2006, adoption and subsequent application of the applicable accounting guidance for defined benefit and other postretirement plans.
(b)	Other assets deducted from Tier 1 capital and net risk-weighted assets consist of disallowed deferred tax assets of $405 million at June 30, 2010, and $651 million at March 31, 2010, disallowed intangible assets (excluding goodwill) and deductible portions of nonfinancial equity investments.
(c)	6-30-10 amount or ratio is estimated.

GAAP = U.S. generally accepted accounting principles

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 16

Consolidated Balance Sheets
(dollars in millions)

	6-30-10			3-31-10			6-30-09
Assets
Loans	$	53,334		$	55,913		$	67,167
Loans held for sale		699			556			761
Securities available for sale		19,773			16,553			11,988
Held-to-maturity securities		19			22			25
Trading account assets		1,014			1,034			771
Short-term investments		1,984			4,345			3,487
Other investments		1,415			1,525			1,450
Total earning assets		78,238			79,948			85,649
Allowance for loan losses		(2,219	)		(2,425	)		(2,339	)
Cash and due from banks		591			619			706
Premises and equipment		872			872			858
Operating lease assets		589			652			842
Goodwill		917			917			917
Other intangible assets		42			46			104
Corporate-owned life insurance		3,109			3,087			3,016
Derivative assets		1,153			1,063			1,182
Accrued income and other assets		4,061			4,150			2,775
Discontinued assets		6,814			6,374			4,082
Total assets	$	94,167		$	95,303		$	97,792
Liabilities
Deposits in domestic offices:
NOW and money market deposit accounts	$	25,526		$	25,068		$	23,939
Savings deposits		1,883			1,873			1,795
Certificates of deposit ($100,000 or more)		8,476			10,188			13,486
Other time deposits		10,430			12,010			15,055
Total interest-bearing deposits		46,315			49,139			54,275
Noninterest-bearing deposits		15,226			15,364			12,873
Deposits in foreign office — interest-bearing		834			646			632
Total deposits		62,375			65,149			67,780
Federal funds purchased and securities sold under repurchase agreements		2,836			1,927			1,530
Bank notes and other short-term borrowings		819			446			1,710
Derivative liabilities		1,321			1,103			528
Accrued expense and other liabilities		2,154			2,089			1,600
Long-term debt		10,451			11,177			13,462
Discontinued liabilities		3,139			2,490			122
Total liabilities		83,095			84,381			86,732
Equity
Preferred stock, Series A		291			291			291
Preferred stock, Series B		2,438			2,434			2,422
Common shares		946			946			865
Common stock warrant		87			87			87
Capital surplus		3,701			3,724			3,292
Retained earnings		5,118			5,098			5,878
Treasury stock, at cost		(1,914	)		(1,958	)		(1,984	)
Accumulated other comprehensive income (loss)		153			19			—
Key shareholders’ equity		10,820			10,641			10,851
Noncontrolling interests		252			281			209
Total equity		11,072			10,922			11,060
Total liabilities and equity	$	94,167		$	95,303		$	97,792
Common shares outstanding (000)		880,515			879,052			797,246

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 17

Consolidated Statements of Income
(dollars in millions, except per share amounts)

	Three months ended									Six months ended
	6-30-10			3-31-10			6-30-09			6-30-10			6-30-09
Interest income
Loans	$	677		$	710		$	819		$	1,387		$	1,659
Loans held for sale		5			4			8			9			16
Securities available for sale		154			150			89			304			189
Held-to-maturity securities		—			1			—			1			1
Trading account assets		10			11			13			21			26
Short-term investments		2			2			3			4			6
Other investments		13			14			13			27			25
Total interest income		861			892			945			1,753			1,922
Interest expense
Deposits		188			212			296			400			596
Federal funds purchased and securities sold under repurchase agreements		2			1			1			3			2
Bank notes and other short-term borrowings		4			3			4			7			10
Long-term debt		50			51			75			101			156
Total interest expense		244			267			376			511			764
Net interest income		617			625			569			1,242			1,158
Provision for loan losses		228			413			823			641			1,670
Net interest income (expense) after provision for loan losses		389			212			(254	)		601			(512	)
Noninterest income
Trust and investment services income		112			114			119			226			229
Service charges on deposit accounts		80			76			83			156			165
Operating lease income		43			47			59			90			120
Letter of credit and loan fees		42			40			44			82			82
Corporate-owned life insurance income		28			28			25			56			52
Net securities gains (losses)		(2	)(a)		3	(a)		125			1			111
Electronic banking fees		29			27			27			56			51
Gains on leased equipment		2			8			36			10			62
Insurance income		19			18			16			37			34
Net gains (losses) from loan sales		25			4			(3	)		29			4
Net gains (losses) from principal investing		17			37			(6	)		54			(78	)
Investment banking and capital markets income (loss)		31			9			14			40			31
Gain from sale/redemption of Visa Inc. shares		—			—			—			—			105
Gain (loss) related to exchange of common shares for capital securities		—			—			95			—			95
Other income		66			39			72			105			121
Total noninterest income		492			450			706			942			1,184
Noninterest expense
Personnel		385			362			375			747			734
Net occupancy		64			66			63			130			129
Operating lease expense		35			39			49			74			99
Computer processing		47			47			48			94			95
Professional fees		41			38			46			79			80
FDIC assessment		33			37			70			70			100
OREO expense, net		22			32			15			54			21
Equipment		26			24			25			50			47
Marketing		16			13			17			29			31
Provision (credit) for losses on lending-related commitments		(10	)		(2	)		11			(12	)		11
Intangible assets impairment		—			—			—			—			196
Other expense		110			129			136			239			239
Total noninterest expense		769			785			855			1,554			1,782
Income (loss) from continuing operations before income taxes		112			(123	)		(403	)		(11	)		(1,110	)
Income taxes		11			(82	)		(176	)		(71	)		(414	)
Income (loss) from continuing operations		101			(41	)		(227	)		60			(696	)
Income (loss) from discontinued operations, net of taxes		(27	)		2			4			(25	)		(25	)
Net income (loss)		74			(39	)		(223	)		35			(721	)
Less: Net income (loss) attributable to noncontrolling interests		4			16			3			20			(7	)
Net income (loss) attributable to Key	$	70		$	(55	)	$	(226	)	$	15		$	(714	)
Income (loss) from continuing operations attributable to Key common shareholders	$	56		$	(98	)	$	(394	)	$	(42	)	$	(901	)
Net income (loss) attributable to Key common shareholders		29			(96	)		(390	)		(67	)		(926	)
Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	.06		$	(.11	)	$	(.68	)	$	(.05	)	$	(1.68	)
Income (loss) from discontinued operations, net of taxes		(.03	)		—			.01			(.03	)		(.05	)
Net income (loss) attributable to Key common shareholders		.03			(.11	)		(.68	)		(.08	)		(1.73	)
Per common share — assuming dilution
Income (loss) from continuing operations attributable to Key common shareholders	$	.06		$	(.11	)	$	(.68	)	$	(.05	)	$	(1.68	)
Income (loss) from discontinued operations, net of taxes		(.03	)		—			.01			(.03	)		(.05	)
Net income (loss) attributable to Key common shareholders		.03			(.11	)		(.68	)		(.08	)		(1.73	)
Cash dividends declared per common share	$	.01		$	.01		$	.01		$	.02		$	.0725
Weighted-average common shares outstanding (000)		874,664			874,386			576,883			874,526			535,080
Weighted-average common shares and potential common shares outstanding (000)		874,664			874,386			576,883			874,526			535,080

(a) For the three months ended June 30, 2010, Key had $4 million in impairment losses related to securities while for the three months ended March 31, 2010, Key did not have impairment losses related to securities.

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 18

Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations
(dollars in millions)

	Second Quarter 2010								First Quarter 2010											Second Quarter 2009
	Average									Average								Average
	Balance			Interest(a)		Yield/Rate(a)				Balance			Interest(a)		Yield/Rate(a)			Balance			Interest(a)		Yield/Rate(a)
Assets
Loans:(b), (c)
Commercial, financial and agricultural	$	17,725		$	209		4.74	%		$	18,796		$	222		4.78	%	$	24,468		$	273		4.48	%
Real estate — commercial mortgage		10,354			124		4.78				10,430			128		4.98			11,892			144		4.83
Real estate — construction		3,773			41		4.31				4,537			45		4.07			6,264			76		4.89
Commercial lease financing		6,759			90		5.33				7,195			93		5.19			8,432			90		4.26
Total commercial loans		38,611			464		4.81				40,958			488		4.82			51,056			583		4.58
Real estate — residential mortgage		1,829			25		5.60				1,803			26		5.65			1,750			26		5.96
Home equity:
Community Banking		9,837			103		4.21				9,967			105		4.26			10,291			112		4.36
Other		773			15		7.62				816			15		7.57			972			18		7.49
Total home equity loans		10,610			118		4.45				10,783			120		4.51			11,263			130		4.63
Consumer other — Community Banking		1,145			33		11.57				1,162			36		12.63			1,207			31		10.41
Consumer other:
Marine		2,563			39		6.21				2,713			42		6.15			3,178			49		6.23
Other		195			4		7.80				209			4		7.76			256			6		7.96
Total consumer other		2,758			43		6.32				2,922			46		6.27			3,434			55		6.36
Total consumer loans		16,342			219		5.40				16,670			228		5.51			17,654			242		5.49
Total loans		54,953			683		4.99				57,628			716		5.02			68,710			825		4.81
Loans held for sale		516			5		3.50				390			4		4.43			635			8		4.92
Securities available for sale(b), (e)		17,285			154		3.63				16,312			151		3.73			8,360			89		4.37
Held-to-maturity securities(b)		22			—		11.46				23			1		8.20			25			—		9.75
Trading account assets		1,048			10		3.71				1,186			11		3.86			1,217			13		4.09
Short-term investments		3,830			2		.23				2,806			2		.28			5,195			3		.26
Other investments(e)		1,445			13		3.11				1,498			14		3.32			1,463			13		3.19
Total earning assets		79,099			867		4.40				79,843			899		4.54			85,605			951		4.45
Allowance for loan losses		(2,356	)								(2,603	)							(2,211	)
Accrued income and other assets		11,133									11,454								13,094
Discontinued assets — education lending business		6,389									6,884								4,370
Total assets	$	94,265								$	95,578							$	100,858
Liabilities
NOW and money market deposit accounts	$	25,270			24		.39			$	24,722			23		.37		$	24,058			32		.52
Savings deposits		1,883			1		.06				1,828			—		.06			1,806			1		.07
Certificates of deposit ($100,000 or more) (f)		9,485			77		3.28				10,538			88		3.39			13,555			124		3.69
Other time deposits		11,309			85		3.01				12,611			100		3.23			14,908			139		3.74
Deposits in foreign office		818			1		.36				693			1		.30			579			—		.26
Total interest-bearing deposits		48,765			188		1.55				50,392			212		1.71			54,906			296		2.15
Federal funds purchased and securities
sold under repurchase agreements		1,841			2		.33				1,790			1		.32			1,627			1		.31
Bank notes and other short-term borrowings		539			4		3.06				490			3		2.41			1,821			4		.79
Long-term debt (f)		7,031			50		3.09				7,001			51		3.16			10,132			75		3.23
Total interest-bearing liabilities		58,176			244		1.70				59,673			267		1.83			68,486			376		2.22
Noninterest-bearing deposits		15,644									14,941								12,457
Accrued expense and other liabilities		3,151									3,064								5,140
Discontinued liabilities — education lending business(d)		6,389									6,884								4,370
Total liabilities		83,360									84,562								90,453
Equity
Key shareholders’ equity		10,646									10,747								10,201
Noncontrolling interests		259									269								204
Total equity		10,905									11,016								10,405
Total liabilities and equity	$	94,265								$	95,578							$	100,858
Interest rate spread (TE)							2.70	%								2.71	%							2.23	%
Net interest income (TE) and net interest margin (TE)					623		3.17	%						632		3.19	%					575		2.70	%
TE adjustment(b)					6									7								6
Net interest income, GAAP basis				$	617								$	625							$	569

Average balances have not been adjusted prior to the third quarter of 2009 to reflect Key’s January 1, 2008, adoption of the applicable accounting guidance related to the offsetting of certain derivative contracts on the consolidated balance sheet.

(a)	Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (d) below, calculated using a matched funds transfer pricing methodology.
(b)	Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 35%.
(c)	For purposes of these computations, nonaccrual loans are included in average loan balances.
(d)	Discontinued liabilities include the liabilities of the education lending business and the dollar amount of any additional liabilities assumed necessary to support the assets associated with this business.
(e)	Yield is calculated on the basis of amortized cost.
(f)	Rate calculation excludes basis adjustments related to fair value hedges.

TE = Taxable Equivalent, GAAP = U.S. generally accepted accounting principles

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 19

Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations
(dollars in millions)

	Six months ended June 30, 2010								Six months ended June 30, 2009
	Average								Average
	Balance			Interest(a)		Yield/Rate(a)			Balance			Interest(a)		Yield/Rate(a)
Assets
Loans:(b),(c)
Commercial, financial and agricultural	$	18,257		$	431		4.76	%	$	25,442		$	551		4.37	%
Real estate — commercial mortgage		10,392			252		4.88			11,431	(d)		284		5.01
Real estate — construction		4,153			86		4.18			6,884	(d)		160		4.70
Commercial lease financing		6,976			183		5.25			8,610			184		4.27
Total commercial loans		39,778			952		4.82			52,367			1,179		4.54
Real estate — residential mortgage		1,816			51		5.62			1,763			53		5.98
Home equity:
Community Banking		9,902			208		4.23			10,284			226		4.42
Other		794			30		7.58			1,004			37		7.50
Total home equity loans		10,696			238		4.48			11,288			263		4.70
Consumer other — Community Banking		1,153			69		12.10			1,216			63		10.48
Consumer other:
Marine		2,637			81		6.18			3,254			101		6.23
Other		202			8		7.78			265			11		7.97
Total consumer other		2,839			89		6.29			3,519			112		6.36
Total consumer loans		16,504			447		5.45			17,786			491		5.55
Total loans		56,282			1,399		5.00			70,153			1,670		4.79
Loans held for sale		454			9		3.90			660			16		4.91
Securities available for sale(b), (g)		16,801			305		3.68			8,244			190		4.70
Held-to-maturity securities(b)		22			1		9.79			25			1		9.79
Trading account assets		1,117			21		3.79			1,282			26		4.03
Short-term investments		3,321			4		.25			3,830			6		.33
Other investments(g)		1,471			27		3.22			1,493			25		3.00
Total earning assets		79,468			1,766		4.47			85,687			1,934		4.54
Allowance for loan losses		(2,478	)							(2,054	)
Accrued income and other assets		11,293								14,265
Discontinued assets — education lending business		6,635								4,430
Total assets	$	94,918							$	102,328
Liabilities
NOW and money market deposit accounts	$	24,997			47		.38		$	24,008			70		.58
Savings deposits		1,855			1		.06			1,775			1		.08
Certificates of deposit ($100,000 or more) (g)		10,009			165		3.34			13,008			245		3.80
Other time deposits		11,957			185		3.12			14,823			279		3.79
Deposits in foreign office		756			2		.33			917			1		.25
Total interest-bearing deposits		49,574			400		1.63			54,531			596		2.20
Federal funds purchased and securities sold under repurchase agreements		1,816			3		.32			1,586			2		.31
Bank notes and other short-term borrowings		515			7		2.75			3,106			10		.64
Long-term debt (g)		7,002			101		3.13			10,281			156		3.31
Total interest-bearing liabilities		58,907			511		1.76			69,504			764		2.24
Noninterest-bearing deposits		15,308								11,779
Accrued expense and other liabilities		3,108								6,134
Discontinued liabilities — education lending business (e)		6,635								4,430
Total liabilities		83,958								91,847
Equity
Key shareholders’ equity		10,696								10,276
Noncontrolling interests		264								205
Total equity		10,960								10,481
Total liabilities and equity	$	94,918							$	102,328
Interest rate spread (TE)							2.71	%							2.30	%
Net interest income (TE) and net interest margin (TE)					1,255		3.18	%					1,170		2.75	%
TE adjustment(b)					13								12
Net interest income, GAAP basis				$	1,242							$	1,158

Average balances have not been adjusted prior to the third quarter of 2009 to reflect Key’s January 1, 2008, adoption of the applicable accounting guidance related to the offsetting of certain derivative contracts on the consolidated balance sheet.
(a)	Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (e) below, calculated using a matched funds transfer pricing methodology.
(b)	Interest income on tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory federal income tax rate of 35%.
(c)	For purposes of these computations, nonaccrual loans are included in average loan balances.
(d)	In late March 2009, Key transferred $1.5 billion of loans from the construction portfolio to the commercial mortgage portfolio in accordance with regulatory guidelines pertaining to the classification of loans that have reached a completed status.
(e)	Discontinued liabilities include the liabilities of the education lending business and the dollar amount of any additional liabilities assumed necessary to support the assets associated with this business.
(f)	Yield is calculated on the basis of amortized cost.
(g)	Rate calculation excludes basis adjustments related to fair value hedges.
TE = Taxable Equivalent, GAAP = U.S. generally accepted accounting principles

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 20

Noninterest Income
(in millions)

	Three months ended								Six months ended
	6-30-10			3-31-10		6-30-09			6-30-10		6-30-09
Trust and investment services income(a)	$	112		$	114	$	119		$	226	$	229
Service charges on deposit accounts		80			76		83			156		165
Operating lease income		43			47		59			90		120
Letter of credit and loan fees		42			40		44			82		82
Corporate-owned life insurance income		28			28		25			56		52
Net securities gains (losses)		(2	)		3		125			1		111
Electronic banking fees		29			27		27			56		51
Gains on leased equipment		2			8		36			10		62
Insurance income		19			18		16			37		34
Net gains (losses) from loan sales		25			4		(3	)		29		4
Net gains (losses) from principal investing		17			37		(6	)		54		(78	)
Investment banking and capital markets income (loss)(a)		31			9		14			40		31
Gain from sale/redemption of Visa Inc. shares		—			—		—			—		105
Gain (loss) related to exchange of common shares for capital securities		—			—		95			—		95
Other income:
Gain from sale of Key’s claim associated with the Lehman Brothers’ Bankruptcy		—			—		32			—		32
Credit card fees		3			3		3			6		6
Miscellaneous income		63			36		37			99		83
Total other income		66			39		72			105		121
Total noninterest income	$	492		$	450	$	706		$	942	$	1,184

(a) Additional detail provided in tables below.

Trust and Investment Services Income
(in millions)

	Three months ended						Six months ended
	6-30-10		3-31-10		6-30-09		6-30-10		6-30-09
Brokerage commissions and fee income	$	35	$	33	$	45	$	68	$	83
Personal asset management and custody fees		37		37		36		74		69
Institutional asset management and custody fees		40		44		38		84		77
Total trust and investment services income	$	112	$	114	$	119	$	226	$	229

Investment Banking and Capital Markets Income (Loss)
(in millions)

	Three months ended									Six months ended
	6-30-10			3-31-10			6-30-09			6-30-10			6-30-09
Investment banking income	$	25		$	16		$	21		$	41		$	32
Income (loss) from other investments		3			1			(6	)		4			(14	)
Dealer trading and derivatives income (loss)		(8	)		(16	)		(14	)		(24	)		(13	)
Foreign exchange income		11			8			13			19			26
Total investment banking and capital markets income (loss)	$	31		$	9		$	14		$	40		$	31

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 21

Noninterest Expense
(dollars in millions)

	Three months ended								Six months ended
	6-30-10			3-31-10			6-30-09		6-30-10			6-30-09
Personnel(a)	$	385		$	362		$	375	$	747		$	734
Net occupancy		64			66			63		130			129
Operating lease expense		35			39			49		74			99
Computer processing		47			47			48		94			95
Professional fees		41			38			46		79			80
FDIC assessment		33			37			70		70			100
OREO expense, net		22			32			15		54			21
Equipment		26			24			25		50			47
Marketing		16			13			17		29			31
Provision (credit) for losses on lending-related commitments		(10	)		(2	)		11		(12	)		11
Intangible assets impairment		—			—			—		—			196
Other expense:
Postage and delivery		8			7			8		15			16
Franchise and business taxes		6			7			9		13			18
Telecommunications		5			6			6		11			13
Provision for losses on LIHTC guaranteed funds		—			—			16		—			16
Miscellaneous expense		91			109			97		200			176
Total other expense		110			129			136		239			239
Total noninterest expense	$	769		$	785		$	855	$	1,554		$	1,782
Average full-time equivalent employees(b)		15,665			15,772			16,937		15,718			17,201

(a)	Additional detail provided in table below.
(b)	The number of average full-time equivalent employees has not been adjusted for discontinued operations.

Personnel Expense
(in millions)

	Three months ended						Six months ended
	6-30-10		3-31-10		6-30-09		6-30-10		6-30-09
Salaries	$	229	$	222	$	225	$	451	$	448
Incentive compensation		65		47		52		112		88
Employee benefits		71		74		69		145		152
Stock-based compensation		15		14		15		29		24
Severance		5		5		14		10		22
Total personnel expense	$	385	$	362	$	375	$	747	$	734

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 22

Loan Composition
(dollars in millions)

							Percent change 6-30-10 vs.
	6-30-10		3-31-10		6-30-09		3-31-10			6-30-09
Commercial, financial and agricultural	$	17,113	$	18,015	$	23,542		(5.0)	%		(27.3	)%
Commercial real estate:
Commercial mortgage		9,971		10,467		11,761		(4.7	)		(15.2	)
Construction		3,430		3,990		6,119		(14.0	)		(43.9	)
Total commercial real estate loans		13,401		14,457		17,880		(7.3	)		(25.1	)
Commercial lease financing		6,620		6,964		8,263		(4.9	)		(19.9	)
Total commercial loans		37,134		39,436		49,685		(5.8	)		(25.3	)
Real estate — residential mortgage		1,846		1,812		1,753		1.9			5.3
Home equity:
Community Banking		9,775		9,892		10,250		(1.2	)		(4.6	)
Other		753		795		940		(5.3	)		(19.9	)
Total home equity loans		10,528		10,687		11,190		(1.5	)		(5.9	)
Consumer other — Community Banking		1,147		1,141		1,199		.5			(4.3	)
Consumer other:
Marine		2,491		2,636		3,095		(5.5	)		(19.5	)
Other		188		201		245		(6.5	)		(23.3	)
Total consumer other		2,679		2,837		3,340		(5.6	)		(19.8	)
Total consumer loans		16,200		16,477		17,482		(1.7	)		(7.3	)
Total loans(a)	$	53,334	$	55,913	$	67,167		(4.6)	%		(20.6	)%

Loans Held for Sale Composition
(dollars in millions)

									Percent change 6-30-10 vs.
	6-30-10			3-31-10			6-30-09		3-31-10			6-30-09
Commercial, financial and agricultural	$	255		$	25		$	51		920.0	%		400.0	%
Real estate — commercial mortgage		235			265			288		(11.3	)		(18.4	)
Real estate — construction		112			147			146		(23.8	)		(23.3	)
Commercial lease financing		16			27			30		(40.7	)		(46.7	)
Real estate — residential mortgage		81			92			245		(12.0	)		(66.9	)
Automobile		—			—			1		N/M			(100.0	)
Total loans held for sale (b)	$	699	(c)	$	556	(c)	$	761		25.7	%		(8.1	)%

(a)	Excluded at June 30, 2010, March 31, 2010, and June 30, 2009, are loans in the amount of $6.6 billion, $6.0 billion and $3.6 billion, respectively, related to the discontinued operations of the education lending business.
(b)	Excluded at June 30, 2010, March 31, 2010, and June 30, 2009, are loans held for sale in the amount of $92 million, $246 million, and $148 million, respectively, related to the discontinued operations of the education lending business.
(c)	The beginning balance at March 31, 2010 of $556 million increased by new originations in the amount of $812 million and net transfers from held to maturity in the amount of $65 million, and decreased by loan sales of $712 million, transfers to OREO/valuation adjustments of $6 million and loan payments of $16 million, for an ending balance of $699 million at June 30, 2010.
N/M = Not Meaningful

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 23

Summary of Loan Loss Experience from Continuing Operations
(dollars in millions)

	Three months ended									Six months ended
	6-30-10			3-31-10			6-30-09			6-30-10			6-30-09
Average loans outstanding	$	54,953		$	57,628		$	68,710		$	56,282		$	70,153
Allowance for loan losses at beginning of period	$	2,425		$	2,534		$	2,016		$	2,534		$	1,629
Loans charged off:
Commercial, financial and agricultural		152			139			182			291			426
Real estate___ commercial mortgage		128			109			87			237			109
Real estate___ construction		86			157			135			243			239
Total commercial real estate loans		214			266			222			480			348
Commercial lease financing		21			25			29			46			51
Total commercial loans		387			430			433			817			825
Real estate___ residential mortgage		11			7			4			18			7
Home equity:
Community Banking		28			31			25			59			43
Other		17			18			19			35			34
Total home equity loans		45			49			44			94			77
Consumer other — Community Banking		15			18			17			33			31
Consumer other:
Marine		31			48			39			79			78
Other		3			5			3			8			9
Total consumer other		34			53			42			87			87
Total consumer loans		105			127			107			232			202
Total loans charged off		492			557			540			1,049			1,027
Recoveries:
Commercial, financial and agricultural		16			13			14			29			26
Real estate___ commercial mortgage		2			3			___			5			1
Real estate___ construction		11			___			2			11			2
Total commercial real estate loans		13			3			2			16			3
Commercial lease financing		7			4			7			11			11
Total commercial loans		36			20			23			56			40
Real estate___ residential mortgage		1			___			___			1			___
Home equity:
Community Banking		3			1			1			4			2
Other		1			1			1			2			1
Total home equity loans		4			2			2			6			3
Consumer other — Community Banking		2			2			2			4			3
Consumer other:
Marine		12			10			10			22			17
Other		2			1			1			3			2
Total consumer other		14			11			11			25			19
Total consumer loans		21			15			15			36			25
Total recoveries		57			35			38			92			65
Net loan charge-offs		(435	)		(522	)		(502	)		(957	)		(962	)
Provision for loan losses		228			413			823			641			1,670
Foreign currency translation adjustment		1			___			2			1			2
Allowance for loan losses at end of period	$	2,219		$	2,425		$	2,339		$	2,219		$	2,339
Liability for credit losses on lending-related commitments at beginning of period	$	119		$	121		$	54		$	121		$	54
Provision (credit) for losses on lending-related commitments		(10	)		(2	)		11			(12	)		11
Liability for credit losses on lending-related commitments at end of period(a)	$	109		$	119		$	65		$	109		$	65
Total allowance for credit losses at end of period	$	2,328		$	2,544		$	2,404		$	2,328		$	2,404
Net loan charge-offs to average loans		3.18	%		3.67	%		2.93	%		3.43	%		2.77	%
Allowance for loan losses to period-end loans		4.16			4.34			3.48			4.16			3.48
Allowance for credit losses to period-end loans		4.36			4.55			3.58			4.36			3.58
Allowance for loan losses to nonperforming loans		130.30			117.43			107.05			130.30			107.05
Allowance for credit losses to nonperforming loans		136.70			123.20			110.02			136.70			110.02
Discontinued operations — education lending business:
Loans charged off	$	32		$	37		$	38		$	69		$	71
Recoveries		1			1			1			2			2
Net loan charge-offs	$	(31	)	$	(36	)	$	(37	)	$	(67	)	$	(69	)

(a) Included in “accrued expense and other liabilities” on the balance sheet.

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 24

Summary of Nonperforming Assets and Past Due Loans From Continuing Operations
(dollars in millions)

	6-30-10			3-31-10				12-31-09			9-30-09			6-30-09
Commercial, financial and agricultural	$	489		$	558			$	586		$	679		$	700
Real estate — commercial mortgage		404			579				614			566			454
Real estate — construction		473			607				641			702			716
Total commercial real estate loans		877			1,186				1,255			1,268			1,170
Commercial lease financing		83			99				113			131			122
Total commercial loans		1,449			1,843				1,954			2,078			1,992
Real estate — residential mortgage		77			72				73			68			46
Home equity:
Community Banking		112			111		��		107			103			101
Other		17			18				21			21			20
Total home equity loans		129			129				128			124			121
Consumer other — Community Banking		5			4				4			4			5
Consumer other:
Marine		41			16				26			15			19
Other		2			1				2			1			2
Total consumer other		43			17				28			16			21
Total consumer loans		254			222				233			212			193
Total nonperforming loans		1,703			2,065				2,187			2,290			2,185
Nonperforming loans held for sale		221			195				116			304			145
OREO		200			175				191			187			182
Allowance for OREO losses		(64	)		(45	)			(23	)		(40	)		(11	)
OREO, net of allowance		136			130				168			147			171
Other nonperforming assets		26			38				39			58			47
Total nonperforming assets	$	2,086		$	2,428			$	2,510		$	2,799		$	2,548
Accruing loans past due 90 days or more	$	240		$	434			$	331		$	375		$	552
Accruing loans past due 30 through 89 days		610			639				933			1,071			1,081
Restructured loans included in nonperforming loans(a)		213			226				364			65			7
Nonperforming assets from discontinued operations — education lending business		40			43				14			12			3
Nonperforming loans to period-end portfolio loans		3.19	%		3.69	%			3.72	%		3.68	%		3.25	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		3.88			4.31				4.25			4.46			3.77

(a) Restructured loans (i.e. troubled debt restructurings) are those for which Key, for reasons related to a borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. These concessions are made to improve the collectability of the loan and generally take the form of a reduction of the interest rate, extension of the maturity date or reduction in the principal balance.

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 25

Summary of Changes in Nonperforming Loans From Continuing Operations
(in millions)

	2Q10			1Q10			4Q09			3Q09			2Q09
Balance at beginning of period	$	2,065		$	2,187		$	2,290		$	2,185		$	1,735
Loans placed on nonaccrual status		682			746			1,141			1,160			1,227
Charge-offs		(492	)		(557	)		(750	)		(619	)		(540	)
Loans sold		(136	)		(15	)		(70	)		(4	)		(12	)
Payments		(185	)		(102	)		(237	)		(294	)		(142	)
Transfers to OREO		(66	)		(20	)		(98	)		(91	)		(45	)
Transfers to nonperforming loans held for sale		(82	)		(59	)		(23	)		(5	)		(30	)
Transfers to other nonperforming assets		(36	)		(3	)		(4	)		(29	)		—
Loans returned to accrual status		(47	)		(112	)		(62	)		(13	)		(8	)
Balance at end of period	$	1,703		$	2,065		$	2,187		$	2,290		$	2,185

Summary of Changes in Nonperforming Loans Held For Sale From Continuing Operations
(in millions)

	2Q10			1Q10			4Q09			3Q09			2Q09
Balance at beginning of period	$	195		$	116		$	304		$	145		$	72
Transfers in		86			129			71			216			79
Loans sold		(53	)		(38	)		(228	)		(45	)		(1	)
Transfers to OREO		(6	)		(6	)		—			—			(1	)
Valuation adjustments		(1	)		(6	)		(15	)		(10	)		(4	)
Loans returned to accrual status / other		—			—			(16	)		(2	)		—
Balance at end of period	$	221		$	195		$	116		$	304		$	145

Summary of Changes in Other Real Estate Owned, Net of Allowance, From Continuing Operations
(in millions)

	2Q10			1Q10			4Q09			3Q09			2Q09
Balance at beginning of period	$	130		$	168		$	147		$	171		$	143
Properties acquired — nonperforming loans		72			26			98			91			46
Valuation adjustments		(24	)		(28	)		(12	)		(36	)		(9	)
Properties sold		(42	)		(36	)		(65	)		(79	)		(9	)
Balance at end of period	$	136		$	130		$	168		$	147		$	171

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 26

Line of Business Results
(dollars in millions)

Community Banking

																Percent change 2Q10 vs.
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09
Summary of operations
Total revenue (TE)	$	607		$	599		$	628		$	630		$	630			1.3	%		(3.7)	%
Provision for loan losses		121			142			230			160			199			(14.8	)		(39.2	)
Noninterest expense		455			467			492			490			496			(2.6	)		(8.3	)
Net income (loss) attributable to Key		32			6			(41	)		(1	)		(30	)		433.3			N/M
Average loans and leases		27,218			27,769			28,321			29,126			30,305			(2.0	)		(10.2	)
Average deposits		50,421			51,459			52,640			53,068			52,786			(2.0	)		(4.5	)
Net loan charge-offs		148			116			148			103			114			27.6			29.8
Net loan charge-offs to average loans		2.18	%		1.69	%		2.07	%		1.40	%		1.51	%		N/A			N/A
Nonperforming assets at period end	$	561		$	597		$	544		$	559		$	512			(6.0	)		9.6
Return on average allocated equity		3.46	%		.65	%		(4.52)	%		(.11	)%		(3.30	)%		N/A			N/A
Average full-time equivalent employees		8,246			8,187			8,227			8,472			8,709			.7			(5.3	)
Supplementary information (lines of business)
Regional Banking
Total revenue (TE)	$	494		$	490		$	511		$	526		$	527			.8	%		(6.3)	%
Provision for loan losses		57			115			139			93			166			(50.4	)		(65.7	)
Noninterest expense		409			420			429			429			439			(2.6	)		(6.8	)
Net income (loss) attributable to Key		30			(16	)		(18	)		14			(38	)		N/M			N/M
Average loans and leases		18,405			18,753			19,076			19,347			19,745			(1.9	)		(6.8	)
Average deposits		45,234			46,197			47,569			48,551			48,717			(2.1	)		(7.1	)
Net loan charge-offs		82			96			82			78			72			(14.6	)		13.9
Net loan charge-offs to average loans		1.79	%		2.08	%		1.71	%		1.60	%		1.46	%		N/A			N/A
Nonperforming assets at period end	$	339		$	327		$	319		$	289		$	245			3.7			38.4
Return on average allocated equity		4.90	%		(2.66)	%		(3.07)	%		2.40	%		(6.60	)%		N/A			N/A
Average full-time equivalent employees		7,891			7,836			7,877			8,120			8,339			.7			(5.4	)
Commercial Banking
Total revenue (TE)	$	113		$	109		$	117		$	104		$	103			3.7	%		9.7	%
Provision for loan losses		64			27			91			67			33			137.0			93.9
Noninterest expense		46			47			63			61			57			(2.1	)		(19.3	)
Net income (loss) attributable to Key		2			22			(23	)		(15	)		8			(90.9	)		(75.0	)
Average loans and leases		8,813			9,016			9,245			9,779			10,560			(2.3	)		(16.5	)
Average deposits		5,187			5,262			5,071			4,517			4,069			(1.4	)		27.5
Net loan charge-offs		66			20			66			25			42			230.0			57.1
Net loan charge-offs to average loans		3.00	%		.90	%		2.83	%		1.01	%		1.60	%		N/A			N/A
Nonperforming assets at period end	$	222		$	270		$	225		$	270		$	267			(17.8	)		(16.9	)
Return on average allocated equity		.64	%		6.98	%		(7.19)	%		(4.54	)%		2.39	%		N/A			N/A
Average full-time equivalent employees		355			351			350			352			370			1.1			(4.1	)

KeyCorp Reports Second Quarter 2010 Profit
July 22, 2010
Page 27

Line of Business Results (continued)
(dollars in millions)

National Banking

																Percent change 2Q10 vs.
	2Q10			1Q10			4Q09			3Q09			2Q09			1Q10			2Q09
Summary of operations
Total revenue (TE)	$	409		$	376		$	340		$	381		$	445			8.8	%		(8.1)	%
Provision for loan losses		99			161			382			439			494			(38.5	)		(80.0	)
Noninterest expense		259			271			297			323			292			(4.4	)		(11.3	)
Net income (loss) attributable to Key		33			(33	)		(212	)		(235	)		(211	)		N/M			N/M
Average loans and leases		20,948			22,440			24,011			26,716			28,586			(6.6	)		(26.7	)
Average loans held for sale		381			240			431			368			393			58.8			(3.1	)
Average deposits		12,474			12,416			13,257			13,305			13,019			.5			(4.2	)
Net loan charge-offs		173			251			411			357			252			(31.1	)		(31.3	)
Net loan charge-offs to average loans		3.31	%		4.54	%		6.79	%		5.30	%		3.54	%		N/A			N/A
Nonperforming assets at period end	$	1,089		$	1,285		$	1,326		$	1,510		$	1,217			(15.3	)		(10.5	)
Return on average allocated equity		3.92	%		(3.89)	%		(22.76)	%		(24.00	)%		(21.47	)%		N/A			N/A
Average full-time equivalent employees		2,327			2,370			2,400			2,473			2,545			(1.8	)		(8.6	)
Supplementary information (lines of business)
Real Estate Capital and Corporate Banking Services
Total revenue (TE)	$	176		$	145		$	92		$	135		$	191			21.4	%		(7.9)	%
Provision for loan losses		77			145			304			336			414			(46.9	)		(81.4	)
Noninterest expense		106			115			113			97			113			(7.8	)		(6.2	)
Net income (loss) attributable to Key		(4	)		(72	)		(203	)		(184	)		(209	)		94.4			98.1
Average loans and leases		11,465			12,340			13,256			14,322			15,145			(7.1	)		(24.3	)
Average loans held for sale		194			115			228			201			182			68.7			6.6
Average deposits		9,811			9,835			10,602			10,848			10,678			(.2	)		(8.1	)
Net loan charge-offs		142			207			381			276			212			(31.4	)		(33.0	)
Net loan charge-offs to average loans		4.97	%		6.80	%		11.40	%		7.65	%		5.61	%		N/A			N/A
Nonperforming assets at period end	$	867		$	1,067		$	1,094		$	1,184		$	1,023			(18.7	)		(15.2	)
Return on average allocated equity		(.78)	%		(14.08)	%		(35.62)	%		(30.66	)%		(34.43	)%		N/A			N/A
Average full-time equivalent employees		1,052			1,078			1,093			1,110			1,125			(2.4	)		(6.5	)
Equipment Finance
Total revenue (TE)	$	61		$	61		$	66		$	59		$	65			—			(6.2)	%
Provision for loan losses		10			4			65			75			42			150.0	%		(76.2	)
Noninterest expense		49			46			57			86			60			6.5			(18.3	)
Net income (loss) attributable to Key		1			7			(35	)		(64	)		(23	)		(85.7	)		N/M
Average loans and leases		4,478			4,574			4,610			5,010			5,051			(2.1	)		(11.3	)
Average loans held for sale		16			1			—			20			18			N/M			(11.1	)
Average deposits		5			6			7			6			9			(16.7	)		(44.4	)
Net loan charge-offs		18			18			21			30			29			—			(37.9	)
Net loan charge-offs to average loans		1.61	%		1.60	%		1.81	%		2.38	%		2.30	%		N/A			N/A
Nonperforming assets at period end	$	106		$	111		$	122		$	118		$	105			(4.5	)		1.0
Return on average allocated equity		1.14	%		7.71	%		(37.94)	%		(65.95	)%		(25.07	)%		N/A			N/A
Average full-time equivalent employees		549			563			586			619			637			(2.5	)		(13.8	)
Institutional and Capital Markets
Total revenue (TE)	$	172		$	170		$	182		$	187		$	189			1.2	%		(9.0)	%
Provision for loan losses		12			12			13			28			38			—			(68.4	)
Noninterest expense		104			110			127			140			119			(5.5	)		(12.6	)
Net income (loss) attributable to Key		36			32			26			13			21			12.5			71.4
Average loans and leases		5,005			5,526			6,145			7,384			8,390			(9.4	)		(40.3	)
Average loans held for sale		171			124			203			147			193			37.9			(11.4	)
Average deposits		2,658			2,575			2,648			2,451			2,332			3.2			14.0
Net loan charge-offs		13			26			9			51			11			(50.0	)		18.2
Net loan charge-offs to average loans		1.04	%		1.91	%		.58	%		2.74	%		.53	%		N/A			N/A
Nonperforming assets at period end	$	116		$	107		$	110		$	208		$	89			8.4			30.3
Return on average allocated equity		14.92	%		12.96	%		9.66	%		4.61	%		7.40	%		N/A			N/A
Average full-time equivalent employees		726			729			721			744			783			(.4	)		(7.3	)

TE = Taxable Equivalent, N/A = Not Applicable, N/M = Not Meaningful