KeyCorp (KEY) 8-K Keycorp Reports First Quarter 2004 Earnings

EXHIBIT 99.1

Analyst Contact:	Vernon L. Patterson	Media Contact:	Gary Cavano
	216.689.0520		216.689.0517
Investor Relations		Key Media
Information:	www.Key.com/ir	Newsroom:	www.Key.com/newsroom

FOR IMMEDIATE RELEASE

KEYCORP REPORTS FIRST QUARTER 2004 EARNINGS

• EPS of $0.59 for the first quarter vs. $0.51 for the year-ago quarter

• Noninterest income up 9% from the year-ago quarter

• Continued improvement in asset quality

• Strong expense discipline

• Strong capital position; 8 million shares repurchased

CLEVELAND, April 15, 2004 – KeyCorp (NYSE: KEY) today announced first quarter net income of $250 million, or $0.59 per diluted common share. These results compare with net income of $217 million, or $0.51 per share, for the first quarter of 2003.

     “I am very pleased with our first quarter results,” said Chairman and Chief Executive Officer Henry L. Meyer III. “Relative to the year-ago quarter, revenue grew, expenses were stable and asset quality improved significantly.

     “We are particularly pleased with the improved performance of Key’s market-sensitive businesses, including trust and investment services, and principal investing. These businesses contributed to a 9% increase in total noninterest income from that reported one year ago. They have benefited not only from strengthening equity markets, but also from the integration of our banking, investments and trust businesses, and our focus on targeted client segments.

     “The improvement in asset quality continues a trend that has been in place for well over a year. Nonperforming loans fell for the sixth consecutive quarter, and net loan charge-offs declined to their lowest level since the first quarter of 2001.

     “We are committed to enhancing shareholder value through effective capital management. In that regard, during the first quarter, Key increased its quarterly dividend and repurchased 8 million of its common shares.

     “We expect earnings to be in the range of $0.54 to $0.59 per share for the second quarter of 2004 and $2.30 to $2.45 per share for the full year.”

KeyCorp Reports First Quarter 2004 Earnings
April 15, 2004
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SUMMARY OF CONSOLIDATED RESULTS

     Taxable-equivalent net interest income was $685 million for the first quarter of 2004, compared with $703 million for the year-ago quarter. A 12 basis point reduction in Key’s net interest margin drove the decrease, as the level of Key’s average earning assets was essentially unchanged. Declines in commercial real estate lending and indirect automobile lease financing were offset by the growth in commercial lease financing and home equity lending.

     Key’s noninterest income was $431 million for the first quarter of 2004, up from $397 million for the first three months of 2003. Stronger financial markets contributed to a $14 million increase in income from trust and investment services. In addition, Key recorded net gains of $10 million from principal investing in the first quarter of 2004, compared with net losses of $3 million for the year-ago quarter. Noninterest income also benefited from a $14 million decrease in losses incurred on the residual values of leased vehicles and equipment, and a $10 million increase in net gains from loan sales. These positive results were partially offset by lower income from trading activities and from service charges on deposit accounts.

     Noninterest expense was $659 million for the first quarter of 2004 and essentially unchanged from the same period last year. Higher personnel expense resulting from an increase in incentive compensation accruals was offset by declines in most of the other major components of noninterest expense.

ASSET QUALITY

     Key’s provision for loan losses was $81 million for the first quarter of 2004, down from $123 million for the fourth quarter of 2003 and $130 million for the year-ago quarter.

     Net loan charge-offs for the quarter totaled $111 million, or 0.71% of average loans, compared with $123 million, or 0.78%, for the previous quarter and $161 million, or 1.04%, for the same period last year.

     During the first quarter of 2004, Key’s nonperforming loans decreased by $107 million to $587 million, primarily due to reductions in the structured finance, large corporate, commercial lease financing and healthcare portfolios. Nonperforming loans represented 0.94% of loans outstanding at March 31, 2004, down from 1.11% at December 31, 2003, and 1.44% at March 31, 2003.

     Key’s allowance for loan losses stood at $1.3 billion, or 2.09% of loans outstanding at March 31, 2004, compared with $1.4 billion, or 2.24% at December 31, 2003, and $1.4 billion, or 2.27% at March 31, 2003. At March 31, 2004, the allowance for loan losses represented 222% of nonperforming loans, compared with 203% at December 31, 2003, and 157% a year ago. During the first quarter of 2004, Key reclassified $70 million of its allowance for loan losses to a separate allowance for probable credit losses inherent in lending-related commitments. First quarter earnings and prior period balances were not affected by this reclassification. The separate allowance is included in “accrued expenses and other liabilities” on the balance sheet.

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April 15, 2004
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CAPITAL

     Key’s capital ratios continued to exceed all “well-capitalized” regulatory benchmarks at March 31, 2004. In addition, Key’s tangible equity to tangible assets ratio was 6.98% at quarter end, compared with 6.94% at December 31, 2003, and 6.71% at March 31, 2003.

     Key’s strong capital position provides the company with the flexibility to take advantage of future investment opportunities and to repurchase shares when appropriate. During the first quarter of 2004, Key repurchased 8 million of its common shares under an authorization that allows for the repurchase of up to 25 million shares. At March 31, 2004, there were 13 million shares remaining for repurchase under that authorization. Share repurchases and other activities that caused the change in Key’s outstanding common shares over the past five quarters are summarized in the table below.

Summary of Changes in Common Shares Outstanding

in thousands	1Q04			4Q03			3Q03			2Q03			1Q03
Shares outstanding at beginning of period		416,494			419,266			421,074			422,783			423,944
Issuance of shares under employee benefit and dividend reinvestment plans		3,659			1,228			692			1,291			839
Repurchase of common shares		(8,000	)		(4,000	)		(2,500	)		(3,000	)		(2,000	)
Shares outstanding at end of period		412,153			416,494			419,266			421,074			422,783

LINE OF BUSINESS RESULTS

     The following table summarizes the contribution made by each major business group to Key’s taxable-equivalent revenue and net income 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.” For more detailed financial information pertaining to each business group and its respective lines of business, see the last three pages of this release.

Major Business Groups

										Percent change 1Q04 vs.
dollars in millions	1Q04			4Q03			1Q03			4Q03			1Q03
Revenue (taxable equivalent)
Consumer Banking	$	572		$	576		$	572			(.7	)%		—	%
Corporate and Investment Banking		369			402			363			(8.2	)		1.7
Investment Management Services		203			210			186			(3.3	)		9.1
Other Segments		4			9			2			(55.6	)		100.0
Total segments		1,148			1,197			1,123			(4.1	)		2.2
Reconciling Items		(32	)		(38	)		(23	)		15.8			(39.1	)
Total	$	1,116		$	1,159		$	1,100			(3.7	)		1.5
Net income (loss)
Consumer Banking	$	109		$	95		$	100			14.7	%		9.0	%
Corporate and Investment Banking		115			106			95			8.5			21.1
Investment Management Services		32			27			16			18.5			100.0
Other Segments		7			12			7			(41.7	)		—
Total segments		263			240			218			9.6			20.6
Reconciling Items		(13	)		(6	)		(1	)		(116.7	)		N/M
Total	$	250		$	234		$	217			6.8			15.2

N/M = Not Meaningful

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April 15, 2004
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Consumer Banking

										Percent change 1Q04 vs.
dollars in millions	1Q04			4Q03			1Q03			4Q03			1Q03
Summary of operations
Net interest income (TE)	$	446		$	452		$	454			(1.3	)%		(1.8	)%
Noninterest income		126			124			118			1.6			6.8
Total revenue (TE)		572			576			572			(.7	)		—
Provision for loan losses		59			68			78			(13.2	)		(24.4	)
Noninterest expense		338			356			334			(5.1	)		1.2
Income before income taxes (TE)		175			152			160			15.1			9.4
Allocated income taxes and TE adjustments		66			57			60			15.8			10.0
Net income	$	109		$	95		$	100			14.7			9.0
Percent of consolidated net income		44	%		41	%		46	%		N/A			N/A
Average balances
Loans	$	29,736		$	29,244		$	28,576			1.7	%		4.1	%
Total assets		32,217			31,729			31,065			1.5			3.7
Deposits		34,739			35,003			34,401			(.8	)		1.0

TE = Taxable Equivalent, N/A = Not Applicable

Additional Consumer Banking Data										Percent change 1Q04 vs.
dollars in millions	1Q04			4Q03			1Q03			4Q03			1Q03
Average deposits outstanding
Noninterest-bearing	$	5,519		$	5,722		$	5,335			(3.5	)%		3.4	%
Money market deposit accounts and other savings		15,672			15,672			14,547			—			7.7
Time		13,548			13,609			14,519			(.4	)		(6.7	)
Total deposits	$	34,739		$	35,003		$	34,401			(.8	)		1.0
Home equity loans
Retail Banking and Small Business:
Average balance	$	8,412		$	8,340		$	7,663
Average loan-to-value ratio		72	%		72	%		72	%
Percent first lien positions		59			59			53
National Home Equity:
Average balance	$	5,067		$	5,193		$	5,005
Average loan-to-value ratio		73	%		74	%		78	%
Percent first lien positions		79			82			82
Other data
On-line clients / household penetration		828,047/41	%		768,106/39	%		623,039/33	%
KeyCenters		903			906			911
Automated teller machines		2,172			2,167			2,179

     Net income for Consumer Banking was $109 million for the first quarter of 2004, representing a $9 million increase from the year-ago quarter. The increase was attributable to a significant reduction in the provision for loan losses and growth in noninterest income. The positive effects of these factors were offset in part by a decrease in taxable-equivalent net interest income and an increase in noninterest expense.

     Taxable-equivalent net interest income decreased by $8 million, or 2%, from the first quarter of 2003, due largely to a less favorable interest rate spread on deposits and a decline in yield-related loan fees resulting from our efforts to exit the automobile leasing business. The adverse effects of these factors were moderated by a more favorable interest rate spread on earning assets, and increases in average loans and core deposits.

     Noninterest income increased by $8 million, or 7%, due largely to a $13 million reduction in net losses incurred on the residual values of leased vehicles and a $10 million increase in net gains from the sales of loans (primarily those in the home equity portfolio), both in the Consumer Finance line of business. These improvements were offset in part by a $7 million reduction in service charges

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April 15, 2004
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on deposit accounts (primarily those generated in the Retail Banking line of business), which resulted from lower overdraft and maintenance fees. Maintenance fees were lower because a higher proportion of Key’s clients have elected to use Key’s free checking products.

     Noninterest expense rose by $4 million, or 1%, from the first quarter of 2003, and the provision for loan losses decreased by $19 million, or 24%, reflecting improved asset quality in each of the Consumer Banking lines of business.

Corporate & Investment Banking

										Percent change 1Q04 vs.
dollars in millions	1Q04			4Q03			1Q03			4Q03			1Q03
Summary of operations
Net interest income (TE)	$	247		$	254		$	251			(2.8	)%		(1.6	)%
Noninterest income		122			148			112			(17.6	)		8.9
Total revenue (TE)		369			402			363			(8.2	)		1.7
Provision for loan losses		21			49			50			(57.1	)		(58.0	)
Noninterest expense		165			183			161			(9.8	)		2.5
Income before income taxes (TE)		183			170			152			7.6			20.4
Allocated income taxes and TE adjustments		68			64			57			6.3			19.3
Net income	$	115		$	106		$	95			8.5			21.1
Percent of consolidated net income		46	%		45	%		44	%		N/A			N/A
Average balances
Loans	$	27,222		$	27,421		$	28,244			(.7	)%		(3.6	)%
Total assets		32,077			31,951			32,695			.4			(1.9	)
Deposits		4,842			4,780			4,000			1.3			21.1

TE = Taxable Equivalent, N/A = Not Applicable

     Net income for Corporate and Investment Banking was $115 million for the first quarter of 2004, up from $95 million for the same period last year. A significant reduction in the provision for loan losses and an increase in noninterest income drove the improvement, and more than offset a decrease in taxable-equivalent net interest income and a slight increase in noninterest expense.

     Taxable-equivalent net interest income decreased by $4 million, or 2%, from the first quarter of 2003, due primarily to a less favorable interest rate spread on deposits and other funding sources, and a decrease in average loans outstanding. The adverse effects of these factors were offset in part by a more favorable interest rate spread on earning assets and growth in average deposits.

     During the same period, noninterest income increased by $10 million, or 9%, due largely to an aggregate $6 million increase in letter of credit and non-yield-related loan fees in the KeyBank Real Estate Capital and Corporate Banking lines of business.

     Noninterest expense rose by $4 million, or 2%, due primarily to a $6 million increase in personnel expense. This increase was partially offset by a $3 million reduction in professional fees.

     The provision for loan losses decreased by $29 million, or 58%, as a result of improved asset quality, primarily in the Corporate Banking line of business.

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April 15, 2004
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Investment Management Services

										Percent change 1Q04 vs.
dollars in millions	1Q04			4Q03			1Q03			4Q03			1Q03
Summary of operations
Net interest income (TE)	$	60		$	61		$	59			(1.6	)%		1.7	%
Noninterest income		143			149			127			(4.0	)		12.6
Total revenue (TE)		203			210			186			(3.3	)		9.1
Provision for loan losses		1			6			2			(83.3	)		(50.0	)
Noninterest expense		152			161			159			(5.6	)		(4.4	)
Income before income taxes (TE)		50			43			25			16.3			100.0
Allocated income taxes and TE adjustments		18			16			9			12.5			100.0
Net income	$	32		$	27		$	16			18.5			100.0
Percent of consolidated net income		13	%		12	%		7	%		N/A			N/A
Average balances
Loans	$	5,154		$	5,151		$	4,957			.1	%		4.0	%
Total assets		6,137			6,144			5,850			(.1	)		4.9
Deposits		6,917			6,779			5,214			2.0			32.7

TE = Taxable Equivalent, N/A = Not Applicable

Additional Investment Management Services Data
dollars in billions	1Q04		4Q03		1Q03
Assets under management	$	69.4	$	68.7	$	60.8
Nonmanaged and brokerage assets		67.1		66.4		57.9

     Net income for Investment Management Services was $32 million for the first quarter of 2004, up from $16 million for the first quarter of last year. The increase was due primarily to growth in noninterest income and a reduction in noninterest expense.

     Taxable-equivalent net interest income rose by $1 million, or 2%, from the first quarter of 2003, due primarily to strong growth in average core deposits. The positive effect of this growth was moderated, however, by a less favorable interest rate spread on deposits and other funding sources.

     Noninterest income rose by $16 million, or 13%, due to a $15 million increase in income from trust and investment services. This growth was attributable primarily to a rise in the market value of assets under management and a higher level of brokerage commissions, both of which reflected improvements in the equity markets. In addition, trust and investment services income benefited from the implementation of various pricing initiatives and the acquisition of Newbridge Partners, both of which occurred during 2003. Higher income from investment banking activities also contributed to the growth in noninterest income.

     Noninterest expense decreased by $7 million, or 4%, due primarily to lower indirect operations and technology charges.

Other Segments

     Other segments consist primarily of Treasury and principal investing. These segments generated net income of $7 million for both the first quarter of 2004 and the first quarter of 2003. A $13 million improvement in principal investing results was offset by a decrease in taxable-equivalent net interest income; net losses from the sales of securities, compared with net gains recorded a year-ago; and an increase in noninterest expense.

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April 15, 2004
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Line of Business Descriptions

Consumer Banking

Retail 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.

Small Businessprovides businesses that have annual sales revenues of $10 million or less with deposit, investment and credit products, and business advisory services.

Consumer Financeincludes Indirect Lending and National Home Equity.

Indirect Lending offers automobile and marine loans to consumers through dealers and finances inventory for automobile and marine dealers. This business unit also provides federal and private education loans to students and their parents and processes payments on loans from private schools to parents.

National Home Equity provides both prime and nonprime mortgage and home equity loan products to individuals. These products originate outside of Key’s retail branch system. This business unit also works with mortgage brokers and home improvement contractors to provide home equity and home improvement solutions.

Corporate and Investment Banking

Corporate Bankingprovides an array of products and services to large corporations, middle-market companies, financial institutions and government organizations. These products and services include financing, treasury management, investment banking, derivatives and foreign exchange, equity and debt trading, and syndicated finance.

KeyBank Real Estate Capitalprovides construction and interim lending, permanent debt placements and servicing, and equity and investment banking services to developers, brokers and owner-investors. This line of business deals exclusively with nonowner-occupied properties (i.e., generally properties for which the owner occupies less than 60% of the premises).

Key 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 Corporate Banking) if those businesses are principally responsible for maintaining the relationship with the client.

Investment Management Services

Investment Management Servicesincludes Victory Capital Management and McDonald Financial Group.

Victory Capital Management manages or gives 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.

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April 15, 2004
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McDonald Financial Group offers financial, estate and retirement planning and asset management services to assist high-net-worth clients with their banking, brokerage, trust, portfolio management, insurance, charitable giving and related needs.

     Cleveland-based KeyCorp is one of the nation’s largest bank-based financial services companies, with assets of approximately $84 billion. Key companies provide investment management, retail and commercial banking, consumer finance, and investment banking products and services to individuals and companies throughout the United States and, for certain businesses, internationally. The company’s businesses deliver their products and services through 903 KeyCenters and offices; a network of 2,172 ATMs; telephone banking centers (1.800.KEY2YOU); and a Web site, Key.com,®that provides account access and financial products 24 hours a day.

Notes to Editors:

A live Internet broadcast of KeyCorp’s conference call to discuss quarterly earnings and currently anticipated earnings trends and to answer analysts’ questions can be accessed through the Investor Relations section atwww.Key.com/irat 9:00 a.m. ET, on Thursday, April 15, 2004. A tape of the call will be available through April 22.

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

This news release contains forward-looking statements about issues like anticipated earnings outlook, asset quality trends and anticipated improvement in profitability and competitiveness. Forward-looking statements by their nature are subject to assumptions, risks and uncertainties. Actual results could differ materially from those contained in or implied by such forward-looking statements for a variety of factors including: changes in interest rates; failure of the economy to continue to recover which could materially impact credit quality trends and the ability to generate loans; failure of the capital markets to function consistent with customary levels; delay in or inability to execute strategic initiatives designed to grow revenues and/or manage expenses; consummation of significant business combinations or divestitures; new legal obligations or restrictions or unfavorable resolution of litigation; further disruption in the economy and the general business climate as a result of terrorist activities or military actions; and changes in accounting, tax or regulatory practices or requirements.

###

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April 15, 2004
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Financial Highlights
(dollars in millions, except per share amounts)

	Three months ended
	3-31-04			12-31-03			3-31-03
Summary of operations
Net interest income (TE)	$	685		$	693		$	703
Noninterest income		431			466			397
Total revenue (TE)		1,116			1,159			1,100
Provision for loan losses		81			123			130
Noninterest expense		659			698			657
Net income		250			234			217
Per common share
Net income	$	.60		$	.56		$	.51
Net income — assuming dilution		.59			.55			.51
Cash dividends paid		.31			.305			.305
Book value at period end		16.98			16.73			16.32
Market price at period end		30.29			29.32			22.56
Performance ratios
Return on average total assets		1.19	%		1.11	%		1.05	%
Return on average equity		14.47			13.37			12.91
Net interest margin (TE)		3.74			3.78			3.86
Capital ratios at period end
Equity to assets		8.29	%		8.25	%		7.98	%
Tangible equity to tangible assets		6.98			6.94			6.71
Tier 1 risk-based capitala		7.97			8.35			7.86
Total risk-based capitala		12.04			12.57			12.18
Leveragea		8.45			8.55			8.13
Asset quality
Net loan charge-offs	$	111		$	123		$	161
Net loan charge-offs to average loans		.71	%		.78	%		1.04	%
Allowance for loan losses	$	1,306		$	1,406		$	1,421
Allowance for loan losses to period-end loans		2.09	%		2.24	%		2.27	%
Allowance for loan losses to nonperforming loans		222.49			202.59			157.19
Nonperforming loans at period end	$	587		$	694		$	904
Nonperforming assets at period end		670			753			968
Nonperforming loans to period-end loans		.94	%		1.11	%		1.44	%
Nonperforming assets to period-end loans plus OREO and other nonperforming assets		1.07			1.20			1.54
Other data
Average full-time equivalent employees		19,585			19,618			20,447
KeyCenters		903			906			911
Taxable-equivalent adjustment	$	24		$	22		$	22
(a) 3-31-04 ratio is estimated.
TE = Taxable Equivalent

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April 15, 2004
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Consolidated Balance Sheets
(dollars in millions)

	3-31-04			12-31-03			3-31-03
Assets
Loans	$	62,513		$	62,711		$	62,719
Investment securities		94			98			132
Securities available for sale		7,463			7,638			8,455
Short-term investments		2,042			1,604			2,837
Other investments		1,157			1,092			970
Total earning assets		73,269			73,143			75,113
Allowance for loan losses		(1,306	)		(1,406	)		(1,421	)
Cash and due from banks		2,113			2,712			3,074
Premises and equipment		604			606			623
Goodwill		1,150			1,150			1,142
Other intangible assets		34			37			34
Corporate-owned life insurance		2,528			2,512			2,442
Accrued income and other assets		6,056			5,733			5,483
Total assets	$	84,448		$	84,487		$	86,490
Liabilities
Deposits in domestic offices:
NOW and money market deposit accounts	$	19,120		$	18,947		$	17,356
Savings deposits		2,067			2,083			2,095
Certificates of deposit ($100,000 or more)		4,850			4,891			4,667
Other time deposits		10,834			11,008			11,620
Total interest-bearing		36,871			36,929			35,738
Noninterest-bearing		10,826			11,175			10,811
Deposits in foreign office — interest-bearing		2,234			2,754			3,906
Total deposits		49,931			50,858			50,455
Federal funds purchased and securities sold under repurchase agreements		3,584			2,667			3,721
Bank notes and other short-term borrowings		2,588			2,947			2,551
Accrued expense and other liabilities		6,013			5,752			5,346
Long-term debt		15,333			15,294			16,269
Capital securities of subsidiary trusts		—			—			1,250
Total liabilities		77,449			77,518			79,592
Shareholders’ equity
Preferred stock		—			—			—
Common shares		492			492			492
Capital surplus		1,459			1,448			1,449
Retained earnings		6,960			6,838			6,536
Treasury stock		(1,966	)		(1,801	)		(1,621	)
Accumulated other comprehensive income (loss)		54			(8	)		42
Total shareholders’ equity		6,999			6,969			6,898
Total liabilities and shareholders’ equity	$	84,448		$	84,487		$	86,490
Common shares outstanding (000)		412,153			416,494			422,780

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April 15, 2004
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Consolidated Statements of Income
(dollars in millions, except per share amounts)

	Three months ended
	3-31-04		12-31-03		3-31-03
Interest income
Loans	$	833	$	856	$	904
Taxable investment securities		—		1		—
Tax-exempt investment securities		1		1		2
Securities available for sale		88		82		101
Short-term investments		9		8		8
Other investments		8		8		6
Total interest income		939		956		1,021
Interest expense
Deposits		161		164		188
Federal funds purchased and securities sold under repurchase agreements		10		9		14
Bank notes and other short-term borrowings		12		14		18
Long-term debt, including capital securities		95		98		120
Total interest expense		278		285		340
Net interest income		661		671		681
Provision for loan losses		81		123		130
		580		548		551
Noninterest income
Trust and investment services income		146		147		132
Service charges on deposit accounts		84		88		92
Investment banking and capital markets income		41		51		34
Letter of credit and loan fees		37		49		31
Corporate-owned life insurance income		27		33		27
Net gains from loan securitizations and sales		25		22		15
Electronic banking fees		18		19		19
Net securities gains		—		2		4
Other income		53		55		43
Total noninterest income		431		466		397
Noninterest expense
Personnel		373		379		363
Net occupancy		58		57		59
Computer processing		44		47		44
Equipment		31		32		32
Marketing		23		32		25
Professional fees		25		32		25
Other expense		105		119		109
Total noninterest expense		659		698		657
Income before income taxes		352		316		291
Income taxes		102		82		74
Net income	$	250	$	234	$	217
Net income per common share	$	.60	$	.56	$	.51
Net income per common share — assuming dilution		.59		.55		.51
Weighted-average common shares outstanding (000)		416,680		420,043		425,275
Weighted-average common shares and potential common shares outstanding (000)		421,572		423,752		428,090

KeyCorp Reports First Quarter 2004 Earnings
April 15, 2004
Page 12

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

	First Quarter 2004								Fourth Quarter 2003								First Quarter 2003
	Average								Average								Average
	Balance			Interest		Yield/Rate			Balance			Interest		Yield/Rate			Balance			Interest		Yield/Rate
Assets
Loans:a,b
Commercial, financial and agricultural	$	17,037		$	190		4.50	%	$	16,847		$	198		4.69	%	$	17,221		$	206		4.86	%
Real estate — commercial mortgage		5,750			72		5.00			5,812			76		5.21			6,034			82		5.49
Real estate — construction		4,856			58		4.79			5,138			68		5.22			5,683			72		5.16
Commercial lease financing		8,536			127		5.96			8,172			122		5.95			7,790			123		6.30
Total commercial loans		36,179			447		4.96			35,969			464		5.14			36,728			483		5.31
Real estate — residential		1,589			25		6.21			1,639			25		6.32			1,904			32		6.66
Home equity		14,963			210		5.64			14,999			209		5.54			14,005			217		6.29
Consumer — direct		2,083			40		7.69			2,138			38		7.12			2,129			40		7.68
Consumer — indirect lease financing		266			6		9.72			350			9		9.65			772			18		9.40
Consumer — indirect other		5,389			105		7.79			5,116			106		8.16			4,917			107		8.74
Total consumer loans		24,290			386		6.37			24,242			387		6.34			23,727			414		7.05
Loans held for sale		2,327			23		4.07			2,353			26		4.47			2,390			28		4.70
Total loans		62,796			856		5.47			62,564			877		5.58			62,845			925		5.95
Taxable investment securities		17			—		4.36			17			1		4.35			2			—		8.43
Tax-exempt investment securitiesa		79			2		9.71			85			2		9.75			125			3		8.89
Total investment securities		96			2		8.79			102			3		8.88			127			3		8.88
Securities available for salea, c		7,516			88		4.70			7,474			82		4.39			7,790			101		5.21
Short-term investments		1,859			9		1.95			1,855			8		1.73			1,706			8		1.87
Other investmentsc		1,114			8		2.78			1,118			8		2.70			956			6		2.46
Total earning assets		73,381			963		5.27			73,113			978		5.32			73,424			1,043		5.73
Allowance for loan losses		(1,378	)							(1,398	)							(1,438	)
Accrued income and other assets		12,522								12,285								11,928
Total assets	$	84,525							$	84,000							$	83,914
Liabilities
NOW and money market deposit accounts	$	18,882			29		.61		$	18,760			31		.65		$	16,747			42		1.03
Savings deposits		2,052			1		.23			2,069			2		.39			2,043			3		.60
Certificates of deposit ($100,000 or more)d		4,883			46		3.81			4,886			45		3.77			4,654			48		4.20
Other time deposits		10,957			80		2.96			11,023			81		2.91			11,799			90		3.09
Deposits in foreign office		2,167			5		.97			1,750			5		.96			1,719			5		1.24
Total interest-bearing deposits		38,941			161		1.67			38,488			164		1.69			36,962			188		2.07
Federal funds purchased and securities sold under repurchase agreements		4,068			10		.96			3,953			9		.93			4,800			14		1.19
Bank notes and other short-term borrowings		2,603			12		1.81			2,698			14		1.92			2,801			18		2.65
Long-term debt, including capital securitiesd		15,229			95		2.63			15,214			98		2.64			17,279			120		2.90
Total interest-bearing liabilities		60,841			278		1.86			60,353			285		1.89			61,842			340		2.25
Noninterest-bearing deposits		10,660								10,904								9,788
Accrued expense and other liabilities		6,077								5,797								5,465
Total liabilities		77,578								77,054								77,095
Shareholders’ equity		6,947								6,946								6,819
Total liabilities and shareholders’ equity	$	84,525							$	84,000							$	83,914
Interest rate spread (TE)							3.41	%							3.43	%							3.48	%
Net interest income (TE) and net interest margin (TE)					685		3.74	%					693		3.78	%					703		3.86	%
TE adjustmenta					24								22								22
Net interest income, GAAP basis				$	661							$	671							$	681
Capital securities		—			—					—			—				$	1,254		$	18

^(a) 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%.

^(b) For purposes of these computations, nonaccrual loans are included in average loan balances.

^(c) Yield is calculated on the basis of amortized cost.

^(d) Rate calculation excludes basis adjustments related to fair value hedges.

TE = Taxable Equivalent

GAAP = Accounting Principles Generally Accepted in the United States

KeyCorp Reports First Quarter 2004 Earnings
April 15, 2004
Page 13

Noninterest Income
(in millions)

	Three months ended
	3-31-04		12-31-03		3-31-03
Trust and investment services incomea	$	146	$	147	$	132
Service charges on deposit accounts		84		88		92
Investment banking and capital markets incomea		41		51		34
Letter of credit and loan fees		37		49		31
Corporate-owned life insurance income		27		33		27
Net gains from loan securitizations and sales		25		22		15
Electronic banking fees		18		19		19
Net securities gains		—		2		4
Other income:
Insurance income		11		12		13
Loan securitization servicing fees		1		1		2
Credit card fees		3		3		3
Miscellaneous income		38		39		25
Total other income		53		55		43
Total noninterest income	$	431	$	466	$	397
(a) Additional detail provided in tables below.

Trust and Investment Services Income
(in millions)

	Three months ended
	3-31-04		12-31-03		3-31-03
Brokerage commission income	$	50	$	50	$	47
Personal asset management and custody fees		42		45		35
Institutional asset management and custody fees		9		9		11
Bond services		11		10		9
All other fees		34		33		30
Total trust and investment services income	$	146	$	147	$	132

Investment Banking and Capital Markets Income
(in millions)

	Three months ended
	3-31-04			12-31-03			3-31-03
Investment banking income	$	24		$	39		$	22
Net gains (losses) from principal investing		10			8			(3	)
Foreign exchange income		12			11			7
Dealer trading and derivatives income (loss)		(5	)		(7	)		8
Total investment banking and capital markets income	$	41		$	51		$	34

KeyCorp Reports First Quarter 2004 Earnings
April 15, 2004
Page 14

Noninterest Expense
(dollars in millions)

	Three months ended
	3-31-04			12-31-03		3-31-03
Personnela	$	373		$	379	$	363
Net occupancy		58			57		59
Computer processing		44			47		44
Equipment		31			32		32
Marketing		23			32		25
Professional fees		25			32		25
Other expense:
Postage and delivery		13			14		15
Telecommunications		7			8		8
Equity- and gross receipts-based taxes		(7	)		5		5
OREO expense, net		4			6		1
Miscellaneous expense		88			86		80
Total other expense		105			119		109
Total noninterest expense	$	659		$	698	$	657
Average full-time equivalent employees		19,585			19,618		20,447
(a) Additional detail provided in table below.

Personnel Expense
(in millions)

	Three months ended
	3-31-04		12-31-03		3-31-03
Salaries	$	209	$	211	$	218
Incentive compensation		85		94		64
Employee benefits		71		57		72
Stock-based compensation		7		8		4
Severance		1		9		5
Total personnel expense	$	373	$	379	$	363

KeyCorp Reports First Quarter 2004 Earnings
April 15, 2004
Page 15

Loan Composition
(in millions)

							Percent change 3-31-04 vs.
	3-31-04		12-31-03		3-31-03		12-31-03			3-31-03
Commercial, financial and agricultural	$	17,058	$	17,012	$	17,292		.3	%		(1.4	)%
Commercial real estate:
Commercial mortgage		5,802		5,677		6,029		2.2			(3.8	)
Construction		4,777		4,978		5,437		(4.0	)		(12.1	)
Total commercial real estate loans		10,579		10,655		11,466		(.7	)		(7.7	)
Commercial lease financing		8,705		8,522		7,848		2.1			10.9
Total commercial loans		36,342		36,189		36,606		.4			(.7	)
Real estate — residential mortgage		1,585		1,613		1,862		(1.7	)		(14.9	)
Home equity		14,483		15,038		14,144		(3.7	)		2.4
Consumer — direct		2,050		2,119		2,100		(3.3	)		(2.4	)
Consumer — indirect:
Automobile lease financing		227		305		680		(25.6	)		(66.6	)
Automobile loans		1,968		2,025		2,127		(2.8	)		(7.5	)
Marine		2,541		2,506		2,197		1.4			15.7
Other		884		542		619		63.1			42.8
Total consumer — indirect loans		5,620		5,378		5,623		4.5			(.1	)
Total consumer loans		23,738		24,148		23,729		(1.7	)		—
Loans held for sale:
Real estate — commercial mortgage		277		154		237		79.9			16.9
Real estate — residential mortgage		20		18		32		11.1			(37.5	)
Commercial, financial & agricultural		6		—		—		N/M			N/M
Education		2,130		2,202		2,115		(3.3	)		.7
Total loans held for sale		2,433		2,374		2,384		2.5			2.1
Total loans	$	62,513	$	62,711	$	62,719		(.3	)		(.3	)

N/M = Not Meaningful

KeyCorp Reports First Quarter 2004 Earnings
April 15, 2004
Page 16

Summary of Loan Loss Experience
(dollars in millions)

	Three months ended
	3-31-04			12-31-03			3-31-03
Average loans outstanding during the period	$	62,796		$	62,564		$	62,845
Allowance for loan losses at beginning of period	$	1,406		$	1,405		$	1,452
Loans charged off:
Commercial, financial and agricultural		52			59			87
Real estate — commercial mortgage		8			3			11
Real estate — construction		—			2			4
Total commercial real estate loans		8			5			15
Commercial lease financing		10			15			12
Total commercial loans		70			79			114
Real estate — residential mortgage		2			5			2
Home equity		17			16			14
Consumer — direct		12			10			12
Consumer — indirect lease financing		3			3			5
Consumer — indirect other		45			37			43
Total consumer loans		79			71			76
		149			150			190
Recoveries:
Commercial, financial and agricultural		13			9			6
Real estate — commercial mortgage		1			1			5
Real estate — construction		—			—			3
Total commercial real estate loans		1			1			8
Commercial lease financing		3			2			1
Total commercial loans		17			12			15
Home equity		1			1			1
Consumer — direct		2			2			2
Consumer — indirect lease financing		1			1			1
Consumer — indirect other		17			11			10
Total consumer loans		21			15			14
		38			27			29
Net loans charged off		(111	)		(123	)		(161	)
Provision for loan losses		81			123			130
Reclassification of allowance for credit losses on lending-related commitmentsa		(70	)		—			—
Foreign currency translation adjustment		—			1			—
Allowance for loan losses at end of period	$	1,306		$	1,406		$	1,421
Net loan charge-offs to average loans		.71	%		.78	%		1.04	%
Allowance for loan losses to period-end loans		2.09			2.24			2.27
Allowance for loan losses to nonperforming loans		222.49			202.59			157.19

^(a) Included in accrued expenses and other liabilities on the consolidated balance sheet.

KeyCorp Reports First Quarter 2004 Earnings
April 15, 2004
Page 17

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

	3-31-04			12-31-03			9-30-03			6-30-03			3-31-03
Commercial, financial and agricultural	$	191		$	252		$	345		$	361		$	381
Real estate — commercial mortgage		72			85			89			143			165
Real estate — construction		12			25			38			22			37
Total commercial real estate loans		84			110			127			165			202
Commercial lease financing		84			103			108			92			91
Total commercial loans		359			465			580			618			674
Real estate — residential mortgage		39			39			36			38			39
Home equity		161			153			151			152			154
Consumer — direct		10			14			12			13			13
Consumer — indirect lease financing		2			3			3			4			5
Consumer — indirect other		16			20			13			12			19
Total consumer loans		228			229			215			219			230
Total nonperforming loans		587			694			795			837			904
OREO		76			61			69			60			62
Allowance for OREO losses		(5	)		(4	)		(4	)		(3	)		(3	)
OREO, net of allowance		71			57			65			57			59
Other nonperforming assets		12			2			2			3			5
Total nonperforming assets	$	670		$	753		$	862		$	897		$	968
Accruing loans past due 90 days or more	$	127		$	152		$	165		$	172		$	207
Accruing loans past due 30 through 89 days		559			613			710			731			721
Nonperforming loans to period-end loans		.94	%		1.11	%		1.27	%		1.32	%		1.44	%
Nonperforming assets to period-end loans plus OREO and other nonperforming assets		1.07			1.20			1.37			1.42			1.54

Summary of Changes in Nonperforming Loans
(in millions)

	1Q04			4Q03			3Q03			2Q03			1Q03
Balance at beginning of period	$	694		$	795		$	837		$	904		$	943
Loans placed on nonaccrual status		145			111			240			168			237
Charge-offs		(111	)		(123	)		(123	)		(141	)		(161	)
Loans sold		(58	)		(40	)		(73	)		(42	)		(23	)
Payments		(56	)		(46	)		(73	)		(26	)		(58	)
Transfers to OREO		(11	)		—			(6	)		(1	)		(19	)
Loans returned to accrual status		(16	)		(3	)		(7	)		(25	)		(15	)
Balance at end of period	$	587		$	694		$	795		$	837		$	904

KeyCorp Reports First Quarter 2004 Earnings
April 15, 2004
Page 18

Line of Business Results
(dollars in millions)

Consumer Banking

																Percent change 1Q04 vs.
	1Q04			4Q03			3Q03			2Q03			1Q03			4Q03			1Q03
Summary of operations
Total revenue (TE)	$	572		$	576		$	600		$	585		$	572			(.7	)%		—	%
Provision for loan losses		59			68			70			65			78			(13.2	)		(24.4	)
Noninterest expense		338			356			358			358			334			(5.1	)		1.2
Net income		109			95			107			102			100			14.7			9.0
Average loans		29,736			29,244			29,180			28,962			28,576			1.7			4.1
Average deposits		34,739			35,003			35,053			34,828			34,401			(.8	)		1.0
Net loan charge-offs		71			68			70			64			78			4.4			(9.0	)
Return on average allocated equity		21.22	%		18.31	%		20.49	%		19.93	%		20.09	%		N/A			N/A
Average full-time equivalent employees		8,385			8,291			8,496			8,436			8,512			1.1			(1.5	)
Supplementary information (lines of business)
Retail Banking
Total revenue (TE)	$	312		$	325		$	330		$	333		$	329			(4.0	)%		(5.2	)%
Provision for loan losses		15			14			14			15			16			7.1			(6.3	)
Noninterest expense		202			210			213			214			202			(3.8	)		—
Net income		60			63			64			65			70			(4.8	)		(14.3	)
Average loans		10,389			10,280			10,194			9,839			9,570			1.1			8.6
Average deposits		29,793			29,894			30,051			30,181			29,929			(.3	)		(.5	)
Net loan charge-offs		15			14			14			15			16			7.1			(6.3	)
Return on average allocated equity		40.42	%		41.80	%		42.46	%		43.82	%		48.04	%		N/A			N/A
Average full-time equivalent employees		6,094			6,021			6,212			6,142			6,200			1.2			(1.7	)
Small Business
Total revenue (TE)	$	91		$	97		$	96		$	97		$	94			(6.2	)%		(3.2	)%
Provision for loan losses		13			16			17			17			17			(18.8	)		(23.5	)
Noninterest expense		49			51			51			52			47			(3.9	)		4.3
Net income		18			19			18			17			18			(5.3	)		—
Average loans		4,424			4,437			4,486			4,526			4,517			(.3	)		(2.1	)
Average deposits		4,582			4,731			4,618			4,312			4,119			(3.1	)		11.2
Net loan charge-offs		14			16			17			17			17			(12.5	)		(17.6	)
Return on average allocated equity		19.05	%		19.78	%		18.74	%		18.23	%		19.95	%		N/A			N/A
Average full-time equivalent employees		415			379			382			379			360			9.5			15.3
Consumer Finance
Total revenue (TE)	$	169		$	154		$	174		$	155		$	149			9.7	%		13.4	%
Provision for loan losses		31			38			39			33			45			(18.4	)		(31.1	)
Noninterest expense		87			95			94			92			85			(8.4	)		2.4
Net income		31			13			25			20			12			138.5			158.3
Average loans		14,923			14,527			14,500			14,597			14,489			2.7			3.0
Average deposits		364			378			384			335			353			(3.7	)		3.1
Net loan charge-offs		42			38			39			32			45			10.5			(6.7	)
Return on average allocated equity		11.45	%		4.78	%		9.07	%		7.40	%		4.58	%		N/A			N/A
Average full-time equivalent employees		1,876			1,891			1,902			1,915			1,952			(.8	)		(3.9	)

KeyCorp Reports First Quarter 2004 Earnings
April 15, 2004
Page 19

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

Corporate and Investment Banking

																Percent change 1Q04 vs.
	1Q04			4Q03			3Q03			2Q03			1Q03			4Q03			1Q03
Summary of operations
Total revenue (TE)	$	369		$	402		$	370		$	378		$	363			(8.2	)%		1.7	%
Provision for loan losses		21			49			48			56			50			(57.1	)		(58.0	)
Noninterest expense		165			183			175			174			161			(9.8	)		2.5
Net income		115			106			92			92			95			8.5			21.1
Average loans		27,222			27,421			27,904			28,039			28,244			(.7	)		(3.6	)
Average deposits		4,842			4,780			4,566			4,097			4,000			1.3			21.1
Net loan charge-offs		39			49			48			73			79			(20.4	)		(50.6	)
Return on average allocated equity		15.41	%		13.92	%		12.01	%		12.06	%		12.72	%		N/A			N/A
Average full-time equivalent employees		2,463			2,480			2,485			2,438			2,464			(.7	)		—
Supplementary information (lines of business)
Corporate Banking
Total revenue (TE)	$	192		$	207		$	202		$	203		$	203			(7.2	)%		(5.4	)%
Provision for loan losses		15			37			43			50			42			(59.5	)		(64.3	)
Noninterest expense		106			115			110			108			104			(7.8	)		1.9
Net income		46			34			30			27			36			35.3			27.8
Average loans		12,213			12,372			12,816			12,876			13,086			(1.3	)		(6.7	)
Average deposits		3,701			3,655			3,576			3,212			3,195			1.3			15.8
Net loan charge-offs		31			37			43			67			71			(16.2	)		(56.3	)
Return on average allocated equity		11.77	%		8.45	%		7.25	%		6.44	%		8.60	%		N/A			N/A
Average full-time equivalent employees		1,182			1,192			1,177			1,145			1,194			(.8	)		(1.0	)
KeyBank Real Estate Capital
Total revenue (TE)	$	89		$	117		$	99		$	101		$	87			(23.9	)%		2.3	%
Provision for loan losses		1			4			—			(3	)		1			(75.0	)		—
Noninterest expense		36			43			41			40			34			(16.3	)		5.9
Net income		32			44			37			40			33			(27.3	)		(3.0	)
Average loans		7,628			8,062			8,260			8,399			8,531			(5.4	)		(10.6	)
Average deposits		1,127			1,111			976			872			793			1.4			42.1
Net loan charge-offs (recoveries)		2			4			—			(3	)		1			(50.0	)		100.0
Return on average allocated equity		13.71	%		18.30	%		15.82	%		17.55	%		15.24	%		N/A			N/A
Average full-time equivalent employees		668			673			688			681			664			(.7	)		.6
Key Equipment Finance
Total revenue (TE)	$	88		$	78		$	69		$	74		$	73			12.8	%		20.5	%
Provision for loan losses		5			8			5			9			7			(37.5	)		(28.6	)
Noninterest expense		23			25			24			26			23			(8.0	)		—
Net income		37			28			25			25			26			32.1			42.3
Average loans		7,381			6,987			6,828			6,764			6,627			5.6			11.4
Average deposits		14			14			14			13			12			—			16.7
Net loan charge-offs		6			8			5			9			7			(25.0	)		(14.3	)
Return on average allocated equity		30.37	%		23.59	%		21.15	%		21.66	%		23.28	%		N/A			N/A
Average full-time equivalent employees		613			615			620			612			606			(.3	)		1.2

KeyCorp Reports First Quarter 2004 Earnings
April 15, 2004
Page 20

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

Investment Management Services

																	Percent change 1Q04 vs.
	1Q04			4Q03			3Q03			2Q03			1Q03			4Q03			1Q03
Summary of operations
Total revenue (TE)	$	203		$	210		$	199		$	187		$	186			(3.3	)%		9.1	%
Provision for loan losses		1			6			5			4			2			(83.3	)		(50.0	)
Noninterest expense		152			161			163			159			159			(5.6	)		(4.4	)
Net income		32			27			20			15			16			18.5			100.0
Average loans		5,154			5,151			5,100			5,031			4,957			.1			4.0
Average deposits		6,917			6,779			6,382			5,939			5,214			2.0			32.7
Net loan charge-offs		1			6			5			4			4			(83.3	)		(75.0	)
Return on average allocated equity		21.67	%		18.19	%		13.87	%		10.78	%		11.44	%		N/A			N/A
Average full-time equivalent employees		2,642			2,712			2,780			2,849			2,955			(2.6	)		(10.6	)
N/A = Not Applicable
TE = Taxable Equivalent