KEYCORP /NEW/ - FORM 8-K - EX-99.1

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Exhibit 99.1

NEWS

FOR IMMEDIATE RELEASE

KEYCORP REPORTS THIRD QUARTER NET INCOME OF $214 MILLION

Net interest income increases 6% from prior quarter

Continued loan growth driven by commercial and small businesses

Improved mix of earning assets and funding

Net interest margin expands 17 basis points from second quarter 2012

CLEVELAND, October 18, 2012 – KeyCorp (NYSE: KEY) today announced third quarter net income from continuing operations attributable to Key common shareholders of $214 million, or $.23 per common share, compared to $221 million, or $.23 per common share for the second quarter of 2012, and $229 million, or $.24 per common share for the third quarter of 2011. For the nine months ended September 30, 2012, net income from continuing operations attributable to Key common shareholders was $634 million, or $.67 per common share, compared to $656 million, or $.71 per common share for the same period one year ago.

SIGNIFICANT EVENTS

Strategic acquisitions enhance revenue and contribute to higher noninterest expense, provision

•

Completed branch and credit card acquisitions, improving asset and funding mix

•

Acquisition of branches and credit card portfolio included one-time costs of $8 million and amortization expense of $8 million

Early termination of leveraged lease transactions

•

Continued opportunity to realize economic benefit in low interest rate environment

•

Realized nontaxable net gain of $26 million

•

Net interest margin negatively impacted by seven (7) basis points due to the write-off of capitalized loan origination costs

Provision for loan losses impacted by acquisitions and updated guidance

•

Acquired credit card portfolios and branch loans increased provision by $32 million

•

Updated regulatory guidance increased net loan charge-offs and provision by $45 million

Executing on capital management priorities

•

Repurchased 9.6 million Common Shares

•

Redeemed $707 million of trust preferred securities realizing a $54 million gain

“During the third quarter, Key announced a number of actions aimed at enhancing the company’s franchise, product offerings and profitability. We re-entered the credit card business, repositioned our merchant services and debit card processing, and improved market share with a 37-branch acquisition in Western New York,” said Chairman and Chief Executive Officer Beth E. Mooney.

“Our third quarter results reflect the impact of these actions and underscore the company’s sustained drive to increase revenue and reduce costs,” Mooney continued. “Revenue trends benefited from the acquisitions, higher net interest margin due to lower funding costs, and the fourth consecutive quarter of average loan growth, primarily in our commercial, financial and agricultural portfolio. On the cost side, we made

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

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progress on our efficiency initiative goal and remain on track to capture $150 million to $200 million annual expense reductions by December 2013.”

THIRD QUARTER 2012 FINANCIAL RESULTS

•

Net interest income of $578 million, up $34 million from prior quarter

•

Continued loan growth driven by 5.1% quarterly increase in commercial, financial and agricultural loans

•

Net interest margin of 3.23%, up 17 basis points from prior quarter due to improved mix of earning assets and lower funding cost

•

Provision for loan and lease losses increased $88 million, primarily due to acquisitions and the application of the recently updated regulatory guidance

•

Asset quality trends impacted by updated regulatory guidance; net charge-offs increased $32 million, nonperforming assets down

•

Maintained solid balance sheet with Tier 1 common equity of 11.4%

Selected Financial Highlights


dollars in millions, except per share data										Change 3Q12 vs.
	3Q12			2Q12			3Q11			2Q12			3Q11
Income (loss) from continuing operations attributable to Key common shareholders	$	214		$	221		$	229			(3.2	)%		(6.6	)%
Income (loss) from continuing operations attributable to Key common shareholders per common share		.23			.23			.24			—			(4.2	)
Return on average total assets from continuing operations		1.08	%		1.12	%		1.14	%		N/A			N/A
Tier 1 common equity		11.43			11.63			11.28			N/A			N/A
Book value at period end	$	10.64		$	10.43		$	10.09			2.0	%		5.5	%
Net interest margin (TE) from continuing operations		3.23	%		3.06	%		3.09	%		N/A			N/A

N/A = Not Applicable

INCOME STATEMENT HIGHLIGHTS

Revenue


dollars in millions							Change 3Q12 vs.
	3Q12		2Q12		3Q11		2Q12			3Q11
Net interest income (TE)	$	578	$	544	$	555		6.3	%		4.1	%
Noninterest income		544		485		483		12.2			12.6

Total revenue	$	1,122	$	1,029	$	1,038		9.0	%		8.1	%

Taxable-equivalent net interest income was $578 million for the third quarter of 2012, and the net interest margin was 3.23%. These results compare to taxable-equivalent net interest income of $555 million and a net interest margin of 3.09% for the third quarter of 2011. The increase in net interest income and the net interest margin was primarily a result of a change in funding mix from the redemption of certain trust preferred securities and the continued maturity of higher-costing certificates of deposit and long-term debt during the third quarter of 2012. This funding was replaced with lower-cost deposits obtained through Key’s branch acquisition, and an overall increase in demand deposits. The improvement in net interest income and the net interest margin was partially offset by a $13 million reduction to net interest income from the write-off of capitalized loan origination costs due to the early termination of leveraged leases, resulting in a seven (7) basis point decline in the net interest margin for the third quarter of 2012.

Compared to the second quarter of 2012, taxable-equivalent net interest income increased by $34 million, and the net interest margin improved by 17 basis points. The improvement was driven largely by lower funding costs, the redemption of trust preferred securities, the maturity of long-term debt in both the second and third quarters of 2012, and the maturity of higher rate certificates of deposit. The favorable impact of Key’s credit card portfolio acquisition in the third quarter was largely offset by lower reinvestment

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

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yields on investment securities and other loans. The write-off of fees and capitalized loan origination costs from the early termination of leveraged leases was $13 million in both the second and third quarters of 2012.

Noninterest Income


dollars in millions							Change 3Q12 vs.
	3Q12		2Q12		3Q11		2Q12			3Q11
Trust and investment services income	$	106	$	102	$	107		3.9	%		(.9	)%
Service charges on deposit accounts		74		70		74		5.7			—
Operating lease income		17		20		30		(15.0	)		(43.3	)
Letter of credit and loan fees		52		56		55		(7.1	)		(5.5	)
Corporate-owned life insurance income		26		30		31		(13.3	)		(16.1	)
Electronic banking fees		18		19		33		(5.3	)		(45.5	)
Gains on leased equipment		46		36		7		27.8			557.1
Insurance income		13		11		13		18.2			—
Net gains (losses) from loan sales		39		32		18		21.9			116.7
Net gains (losses) from principal investing		11		24		34		(54.2	)		(67.6	)
Investment banking and capital markets income (loss)		38		37		25		2.7			52.0
Other income		104		48		56		116.7			85.7

Total noninterest income	$	544	$	485	$	483		12.2	%		12.6	%

N/M = Not Meaningful

Key’s noninterest income was $544 million for the third quarter of 2012, compared to $483 million for the year-ago quarter. Gains on leased equipment increased $39 million compared to the same period one year ago, primarily related to the early terminations of leveraged leases. Net gains (losses) from loan sales also increased $21 million from the year-ago quarter. Other income was $48 million higher due to a $54 million gain associated with the redemption of certain trust preferred securities in the third quarter of 2012. Investment banking and capital markets income (loss) also increased $13 million from one year ago. These increases in noninterest income were partially offset by a $23 million decrease in net gains (losses) from principal investing (including results attributable to noncontrolling interests), a $15 million decrease in electronic banking fees as a result of government pricing controls on debit transactions that went into effect October 1, 2011, and a $13 million decline in operating lease income.

Compared to the second quarter of 2012, noninterest income increased by $59 million. Other income increased $56 million resulting from a $54 million gain associated with the redemption of certain trust preferred securities in the third quarter of 2012 and an increase in credit card fees of $7 million primarily due to the credit card portfolio acquisition. Gains on leased equipment also increased $10 million, primarily related to the early terminations of leveraged leases in the third quarter of 2012. These increases in noninterest income were partially offset by a decline in net gains (losses) from principal investing (including results attributable to noncontrolling interests) of $13 million.

Noninterest Expense


dollars in millions							Change 3Q12 vs.
	3Q12		2Q12		3Q11		2Q12			3Q11
Personnel expense	$	411	$	389	$	382		5.7	%		7.6	%
Nonpersonnel expense		323		325		310		(.6	)		4.2

Total noninterest expense	$	734	$	714	$	692		2.8	%		6.1	%

Key’s noninterest expense was $734 million for the third quarter of 2012, compared to $692 million for the same period last year. Personnel expense increased $29 million due to increased salaries and incentive compensation expense resulting from the hiring of client-facing personnel and Key’s acquisition of 37 branches in Western New York, which closed on July 13. Nonpersonnel expense increased $13 million from one year ago and included an increase of $8 million related to the amortization of the intangible assets associated with the third quarter 2012 acquisitions of the previously discussed credit card portfolio as well as

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October 18, 2012

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the branches. Various other expenses also increased $14 million. These increases in noninterest expense were partially offset by a $10 million decrease in operating lease expense compared to the same period one year ago. The provision (credit) for losses on lending-related commitments was a credit of $8 million compared to a credit of $1 million for the year-ago quarter.

Compared to the second quarter of 2012, noninterest expense increased by $20 million. Personnel expense increased $22 million, primarily attributable to an increase in incentive compensation, and nonpersonnel expense decreased by $2 million. Included in nonpersonnel expense was an increase of $8 million related to the amortization of the intangible assets associated with the third quarter 2012 acquisitions of the previously discussed credit card portfolio and branches. The increase in amortization expense was offset by a decline in the provision (credit) for losses on lending-related commitments, which was a credit of $8 million in the current quarter compared to a charge of $6 million in the prior quarter, and a decrease in other real estate owned (“OREO”) expense of $6 million compared to the prior quarter.

BALANCE SHEET HIGHLIGHTS

As of September 30, 2012, Key had total assets of $87.0 billion compared to $86.5 billion at June 30, 2012, and $89.3 billion at September 30, 2011.

Average Loans


dollars in millions							Change 9-30-12 vs.
	9-30-12		6-30-12		9-30-11		6-30-12			9-30-11
Commercial, financial and agricultural^(a)	$	21,473	$	20,606	$	17,381		4.2	%		23.5	%
Other commercial loans		13,605		14,055		15,568		(3.2	)		(12.6	)
Total home equity loans		10,202		9,852		9,970		3.6			2.3
Other consumer loans		5,415		4,933		5,089		9.8			6.4

Total loans	$	50,695	$	49,446	$	48,008		2.5	%		5.6	%

(a)	Commercial, financial and agricultural average balance includes $54 million of assets from commercial credit cards.

Average loans were $50.7 billion for the third quarter of 2012, an increase of $2.7 billion compared to the third quarter of 2011. Commercial, financial and agricultural loans grew by $4.1 billion over the year-ago quarter, with strong growth across Key’s commercial and middle market segments. This growth was partially offset by declines in the commercial real estate portfolio, the equipment lease portfolios resulting from the early termination of certain leveraged leases in the exit portfolio, and run-off of consumer loans in the designated exit portfolio.

Compared to the second quarter of 2012, average loans increased by $1.2 billion. Commercial, financial and agricultural loans grew $867 million, and home equity loans increased $350 million as a result of Key’s home equity loan campaign. The branch acquisition added $223 million of mostly consumer loans, and the credit card portfolio acquisition added $473 million (including commercial credit cards) to average balances in the third quarter. These increases were partially offset by the early termination of certain leveraged leases and other exit portfolio run-off.

Key originated approximately $9 billion in new or renewed lending commitments to consumers and businesses during the third quarter of 2012.

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

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Average Deposits


dollars in millions										Change 9-30-12 vs.
	9-30-12			6-30-12			9-30-11			6-30-12			9-30-11
Nontime deposits	$	54,098		$	51,560		$	47,196			4.9	%		14.6	%
Certificates of deposits ($100,000 or more)		3,420			3,858			4,762			(11.4	)		(28.2	)
Other time deposits		5,158			5,645			6,942			(8.6	)		(25.7	)

Total deposits	$	62,676		$	61,063		$	58,900			2.6	%		6.4	%

Cost of interest-bearing deposits		.57	%		.69	%		.91	%		N/A			N/A

N/A = Not Applicable

Average deposits totaled $62.7 billion for the third quarter of 2012, an increase of $3.8 billion compared to the year-ago quarter. The growth reflects an increase in business demand deposits and the impact of Key’s branch acquisition. The growth in nontime deposits more than offset the maturities in certificates of deposit.

Compared to the second quarter of 2012, average deposits increased by $1.6 billion. The increase in average balances was attributable to Key’s branch acquisition in the third quarter 2012, which added $1.6 billion of mostly nontime consumer deposits.

ASSET QUALITY


dollars in millions										Change 3Q12 vs.
	3Q12			2Q12			3Q11			2Q12			3Q11
Net loan charge-offs	$	109		$	77		$	109			41.6	%		—
Net loan charge-offs to average loans		.86	%		.63	%		.90	%		N/A			N/A
Nonperforming loans at period end^(a)	$	653		$	657		$	788			(.6	)		(17.1	)%
Nonperforming assets at period end		718			751			914			(4.4	)		(21.4	)
Allowance for loan and lease losses		888			888			1,131			—			(21.5	)
Allowance for loan and lease losses to nonperforming loans		136	%		135	%		144	%		N/A			N/A
Provision (credit) for loan and lease losses	$	109		$	21		$	10			419.0	%		990.0	%

(a)	September 30, 2012 amount excludes $25 million of purchased credit impaired loans acquired in July 2012.

N/A = Not Applicable, N/M = Not Meaningful

Key’s provision for loan and lease losses was $109 million for the third quarter of 2012, compared to $21 million for the second quarter of 2012 and $10 million for the year-ago quarter. Key’s allowance for loan and lease losses was $888 million, or 1.73% of total period-end loans at September 30, 2012, compared to 1.79% at June 30, 2012, and 2.35% at September 30, 2011.

Net loan charge-offs for the third quarter of 2012 totaled $109 million, or .86% of average loans, including $45 million (.35% of average loans) of incremental net loan charge-offs reported in accordance with updated regulatory guidance requiring loans discharged through Chapter 7 bankruptcy and not reaffirmed by the borrower to be charged off to the collateral’s fair market value less selling costs and classified as nonaccrual regardless of their delinquency status. The current period net loan charge-offs compare to $77 million, or .63% for the second quarter of 2012, and $109 million, or .90% for the same period last year.

Key also established an allowance for loan and lease losses for the acquired credit card and branch loans above the discount related to these acquired portfolios in accordance with the applicable accounting guidance. The allowance for these loan and lease losses was approximately $29 million at September 30, 2012.

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October 18, 2012

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At September 30, 2012, Key’s nonperforming loans totaled $653 million and represented 1.27% of period-end portfolio loans. Included in this total was $38 million or the net carrying amount of the secured loans reclassified as troubled-debt restructurings under the updated regulatory guidance discussed above. Nonperforming loans at June 30, 2012 and September 30, 2011 represented 1.32% and 1.64% of period-end loans, respectively. Nonperforming assets at September 30, 2012, totaled $718 million and represented 1.39% of portfolio loans and OREO and other nonperforming assets, compared to 1.51% at June 30, 2012, and 1.89% at September 30, 2011.

CAPITAL

Key’s estimated risk-based capital ratios included in the following table continued to exceed all “well-capitalized” regulatory benchmarks at September 30, 2012.

Capital Ratios


	9-30-12			6-30-12			9-30-11
Tier 1 common equity^{(a), (b)}		11.43	%		11.63	%		11.28	%
Tier 1 risk-based capital^(a)		12.24			12.45			13.49
Total risk based capital^(a)		15.33			15.83			17.05
Tangible common equity to tangible assets^(b)		10.39			10.44			9.82

(a)	9-30-12 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 September 30, 2012, Key’s estimated Tier 1 common equity and Tier 1 risk-based capital ratios stood at 11.4% and 12.2%, respectively. In addition, the tangible common equity ratio was 10.4% at September 30, 2012.

Summary of Changes in Common Shares Outstanding


in thousands										Change 3Q12 vs.
	3Q12			2Q12			3Q11			2Q12			3Q11
Shares outstanding at beginning of period		945,473			956,102			953,822			(1.1	)%		(.9	)%
Common shares repurchased		(9,639	)		(10,468	)		—			N/M			N/M
Shares reissued (returned) under employee benefit plans		361			(161	)		(1,014	)		N/M			N/M

Shares outstanding at end of period		936,195			945,473			952,808			(1.0	)%		(1.7	)%

N/M = Not Meaningful

As previously reported and as authorized by Key’s Board of Directors and pursuant to Key’s 2012 capital plan submitted to the Federal Reserve and not objected to by the Federal Reserve, Key had authority to repurchase up to $344 million of its Common Shares for general repurchase and repurchases in connection with employee elections under its compensation and benefit programs.

During the third quarter of 2012, Key completed $82 million of Common Share repurchases. Following completion of these repurchases, Key has remaining authority to repurchase up to $177 million of its Common Shares for general repurchase and repurchases in connection with employee elections under its compensation and benefit programs. Key’s existing repurchase program does not have an expiration date. Common Share repurchases under the current authorization are expected to be executed through the first quarter of 2013.

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

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LINE OF BUSINESS RESULTS

The following table shows the contribution made by each major business segment to Key’s taxable-equivalent revenue from continuing operations and income (loss) from continuing operations attributable to Key for the periods presented. For more detailed financial information pertaining to each business segment, see the tables at the end of this release.

Major Business Segments


dollars in millions								Change 3Q12 vs.
	3Q12			2Q12		3Q11		2Q12			3Q11
Revenue from continuing operations (TE)
Key Community Bank	$	576		$	537	$	565		7.3	%		1.9	%
Key Corporate Bank		392			392		369		—			6.2
Other segments		160			99		103		61.6			55.3

Total segments		1,128			1,028		1,037		9.7			8.8
Reconciling items		(6	)		1		1		N/M			N/M

Total	$	1,122		$	1,029	$	1,038		9.0	%		8.1	%

Income (loss) from continuing operations attributable to Key
Key Community Bank	$	(23	)	$	41	$	57		N/M			N/M
Key Corporate Bank		118			104		123		13.5	%		(4.1	)%
Other segments		102			56		52		82.1			96.2

Total segments		197			201		232		(2.0	)		(15.1	)
Reconciling items		22			25		2		(12.0	)		N/M

Total	$	219		$	226	$	234		(3.1	)%		(6.4	)%

TE = Taxable equivalent, N/M = Not Meaningful

Key Community Bank


dollars in millions								Change 3Q12 vs.
	3Q12			2Q12		3Q11		2Q12			3Q11
Summary of operations
Net interest income (TE)	$	365		$	348	$	371		4.9	%		(1.6	)%
Noninterest income		211			189		194		11.6			8.8

Total revenue (TE)		576			537		565		7.3			1.9
Provision (credit) for loan and lease losses		120			11		39		990.9			207.7
Noninterest expense		512			476		457		7.6	%		12.0	%

Income (loss) before income taxes (TE)		(56	)		50		69		N/M			N/M
Allocated income taxes (benefit) and TE adjustments		(33	)		9		12		N/M			N/M

Net income (loss) attributable to Key	$	(23	)	$	41	$	57		N/M			N/M

Average balances
Loans and leases	$	28,386		$	27,043	$	26,270		5.0	%		8.1	%
Total assets		32,136			30,638		29,681		4.9			8.3
Deposits		49,537			48,253		47,672		2.7			3.9

Assets under management at period end	$	21,988		$	21,116	$	17,195		4.1	%		27.9	%

TE = Taxable Equivalent, N/M = Not Meaningful

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October 18, 2012

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Additional Key Community Bank Data


dollars in millions										Change 3Q12 vs.
	3Q12			2Q12			3Q11			2Q12			3Q11
Noninterest income
Trust and investment services income	$	51		$	47		$	45			8.5	%		13.3	%
Service charges on deposit accounts		62			59			62			5.1			—
Electronic banking fees		18			18			33			—			(45.5	)
Other noninterest income		80			65			54			23.1			48.1

Total noninterest income	$	211		$	189		$	194			11.6	%		8.8	%

Average deposit balances
NOW and money market deposit accounts	$	25,072		$	23,919		$	21,967			4.8	%		14.1	%
Savings deposits		2,373			2,078			1,971			14.2			20.4
Certificates of deposit ($100,000 or more)		2,941			3,275			3,862			(10.2	)		(23.8	)
Other time deposits		5,137			5,630			6,928			(8.8	)		(25.9	)
Deposits in foreign office		344			361			336			(4.7	)		2.4
Noninterest-bearing deposits		13,670			12,990			12,608			5.2			8.4

Total deposits	$	49,537		$	48,253		$	47,672			2.7	%		3.9	%

Home equity loans
Average balance	$	9,734		$	9,359		$	9,388
Weighted-average loan-to-value ratio (at date of origination)		71	%		71	%		70	%
Percent first lien positions		54			54			53
Other data
Branches		1,087			1,062			1,063
Automated teller machines		1,620			1,576			1,584

Key Community Bank Summary of Operations

•

Five consecutive quarters of average loan growth

•

Acquisition of 37 branches and credit card portfolio added $696 million to average loans during the third quarter

•

Continued migration to lower-cost deposits

•

Net loan charge-offs increased to 1.30% of average loans primarily due to the application of recently updated regulatory guidance related to debts discharged through Chapter 7 bankruptcy

Key Community Bank recorded a net loss attributable to Key of $23 million for the third quarter of 2012, compared to net income attributable to Key of $57 million for the year-ago quarter. The net loss for the third quarter of 2012 is attributable to additional provision expense for loan and lease losses related to the acquisitions completed and implementing the updated regulatory guidance on debts discharged through Chapter 7 bankruptcy.

Taxable-equivalent net interest income declined by $6 million, or 1.6% from the third quarter of 2011. Average loans and leases grew 8.1% while average deposits increased 3.9% from one year ago. The branch and credit card portfolio acquisitions contributed $26 million to net interest income, $696 million to average loans and leases, and $1.6 billion to deposits. Given the prolonged low-rate environment, the value derived from deposits was less in the current period compared to the same period one year ago.

Noninterest income increased by $17 million, or 8.8% from the year-ago quarter. Credit card fees and trust and investment services income each increased $6 million primarily due to the credit card portfolio and branch acquisitions. Miscellaneous income also increased $15 million primarily due to gains realized on the sale of certain tax credits. Net gains (losses) from loan sales were also $4 million higher. These increases in noninterest income were partially offset by a $15 million decline in electronic banking fees resulting from government pricing controls on debit transactions that went into effect October 1, 2011.

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

Page 9

The provision for loan and lease losses increased by $81 million, or 207.7% compared to the third quarter of 2011. The application of recently updated regulatory guidance related to debts discharged through Chapter 7 bankruptcy increased the provision $45 million, and the acquisition of the credit card portfolio and the loans associated with the branch acquisition increased the provision $32 million. Net loan charge-offs were $93 million for the third quarter of 2012, up $33 million from the same period one year ago, primarily due to the application of recently updated regulatory guidance discussed above.

Noninterest expense increased by $55 million, or 12% from the year-ago quarter. Key’s third quarter 2012 branch and credit card portfolio acquisitions contributed $26 million to the increase in noninterest expense spread across several expense categories. Personnel expense was $13 million higher than one year ago. Amortization of the intangible assets associated with the third quarter 2012 acquisitions of the previously discussed credit card portfolio and the branches and internally-allocated support costs each increased $8 million, and other miscellaneous expenses also increased $21 million from the same period one year ago.

Key Corporate Bank


									Change 3Q12 vs.
dollars in millions	3Q12			2Q12		3Q11			2Q12			3Q11
Summary of operations
Net interest income (TE)	$	182		$	182	$	172			—			5.8	%
Noninterest income		210			210		197			—			6.6

Total revenue (TE)		392			392		369			—			6.2
Provision (credit) for loan and lease losses		(3	)		4		(40	)		N/M			N/M
Noninterest expense		209			218		216			(4.1	)%		(3.2	)

Income (loss) before income taxes (TE)		186			170		193			9.4			(3.6	)
Allocated income taxes and TE adjustments		68			62		70			9.7			(2.9	)

Net income (loss)		118			108		123			9.3			(4.1	)
Less: Net income (loss) attributable to noncontrolling interests		—			4		—			N/M			N/M

Net income (loss) attributable to Key	$	118		$	104	$	123			13.5	%		(4.1	)%

Average balances
Loans and leases	$	18,886		$	18,532	$	16,986			1.9	%		11.2	%
Loans held for sale		441			514		273			(14.2	)		61.5
Total assets		22,914			22,715		21,168			.9			8.2
Deposits		12,873			12,409		10,544			3.7			22.1

Assets under management at period end	$	27,682		$	28,033	$	34,389			(1.3	)%		(19.5	)%

TE = Taxable Equivalent, N/M = Not Meaningful

Additional Key Corporate Bank Data


							Change 3Q12 vs.
dollars in millions	3Q12		2Q12		3Q11		2Q12			3Q11
Noninterest income
Trust and investment services income	$	56	$	55	$	62		1.8	%		(9.7	)%
Investment banking and debt placement fees^(a)		82		69		44		18.8			86.4
Operating lease income and other leasing gains^(b)		20		20		29		—			(31.0	)
Corporate services income^(c)		27		30		31		(10.0	)		(12.9	)
Other noninterest income		25		36		31		(30.6	)%		(19.4	)

Total noninterest income	$	210	$	210	$	197		—			6.6	%

(a)	Included in “Investment banking and capital markets income (loss),” “Net gains (losses) from loan sales,” and “Letter of credit and loan fees” on the Consolidated Statements of Income.

(b)	Included in “Operating lease income” and “Gains on leased equipment” on the Consolidated Statements of Income.

(c)	Included in “Service charges on deposit accounts,” “Letter of credit and loan fees,” and “Investment banking and capital markets income (loss)” on the Consolidated Statements of Income.

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

Page 10

Key Corporate Bank Summary of Operations

•

Investment banking and debt placement fees were $82 million, up 18.8% from the second quarter

•

Average loans up 11.2% from the prior year and 1.9% from the prior quarter

•

Average deposits up 22.1% from the prior year and 3.7% from the prior quarter

Key Corporate Bank recorded net income attributable to Key of $118 million for the third quarter of 2012, compared to net income attributable to Key of $123 million for the same period one year ago.

Taxable-equivalent net interest income increased by $10 million, or 5.8% compared to the third quarter of 2011. Average earning assets increased $1.8 billion, or 9.7% from the year-ago quarter, resulting in an increase in earning asset spread of $4 million. Average deposit balances increased $2.3 billion, or 22.1% from one year ago, resulting in an increase in deposit spread of $6 million.

Noninterest income increased by $13 million, or 6.6% from the third quarter of 2011. Net gains (losses) from loan sales increased $20 million, and investment banking and capital markets income increased $16 million. These improvements in noninterest income were partially offset by a decrease in operating lease income of $8 million as that portfolio continues to run down. Trust and investment services income also declined $5 million, and other miscellaneous income items decreased $8 million compared to the year-ago quarter.

The provision for loan and lease losses in the third quarter of 2012 was a credit of $3 million compared to a credit of $40 million for the same period one year ago. The portfolio’s asset quality continued to improve for the twelfth consecutive quarter. Net loan charge-offs in the third quarter of 2012 were $8 million compared to $22 million for the same period one year ago.

Noninterest expense decreased by $7 million, or 3.2% from the third quarter of 2011. The provision (credit) for losses on lending-related commitments was a credit of $6 million compared to a charge of $1 million one year ago. Also contributing to the decline in noninterest expense were decreases in operating lease expense of $7 million and various other miscellaneous expenses of $6 million. These decreases in noninterest expense were partially offset by an increase in personnel expense of $13 million.

Other Segments

Other Segments consist of Corporate Treasury, Key’s Principal Investing unit, and various exit portfolios. Other Segments generated net income attributable to Key of $102 million for the third quarter of 2012, compared to net income attributable to Key of $52 million for the same period last year. These results were primarily attributable to an increase in other income of $71 million due to a $54 million gain on the redemption of certain trust preferred securities and a $26 million net gain resulting from the early terminations of leveraged leases in the third quarter of 2012 (a $39 million gain on leased equipment less a $13 million charge for the write-off of capitalized loan origination costs). These results were partially offset by a decrease in net gains (losses) from principal investing of $23 million.

*****

Key traces its history back more than 160 years and is headquartered in Cleveland, Ohio. One of the nation’s largest bank-based financial services companies, Key has assets of approximately $87.0 billion at September 30, 2012.

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

Page 11

Key provides deposit, lending, cash management and investment services to individuals and small businesses through its 14-state branch network under the name KeyBank National Association. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name.

For more information, visit https://www.key.com/. KeyBank is Member FDIC.

CONTACTS:


ANALYSTS		MEDIA
Vernon L. Patterson		David Reavis
216.689.0520		216.471.2886
Vernon_Patterson@KeyBank.com		David_Reavis@KeyBank.com
		Twitter: @keybank_news

Kelly L. Lammers
216.689.3133
Kelly_L_Lammers@KeyBank.com

INVESTOR		KEY MEDIA
RELATIONS: www.key.com/ir		NEWSROOM: 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 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 KeyCorp’s Annual Report on Form 10-K for the year ended December 31, 2011, its Quarterly Report on Form 10-Q for the period ended March 31, 2012, and its Quarterly Report on Form 10-Q for the period ended June 30, 2012, each of which have been filed with the Securities and Exchange Commission and are available on Key’s website (www.key.com/ir) 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.

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 at https://www.key.com/ir at 9:00 a.m. ET, on Thursday, October 18, 2012. An audio replay of the call will be available through October 25, 2012.

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

*****

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

Page 12

KeyCorp

Third Quarter 2012

Financial Supplement


Page
13		Financial Highlights
15		GAAP to Non-GAAP Reconciliation
17		Consolidated Balance Sheets
18		Consolidated Statements of Income
19		Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations
21		Noninterest Income
21		Trust and Investment Services Income
21		Investment Banking and Capital Markets Income (Loss)
22		Noninterest Expense
22		Personnel Expense
23		Loan Composition
23		Loans Held for Sale Composition
23		Summary of Changes in Loans Held for Sale
24		Exit Loan Portfolio From Continuing Operations
24		Asset Quality Statistics From Continuing Operations
25		Summary of Loan and Lease Loss Experience From Continuing Operations
26		Summary of Nonperforming Assets and Past Due Loans From Continuing Operations
27		Summary of Changes in Nonperforming Loans From Continuing Operations
27		Summary of Changes in Nonperforming Loans Held for Sale From Continuing Operations
27		Summary of Changes in Other Real Estate Owned, Net of Allowance, From Continuing Operations
28		Line of Business Results

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

Page 13

Financial Highlights

(dollars in millions, except per share amounts)


	Three months ended
	9-30-12			6-30-12			9-30-11
Summary of operations
Net interest income (TE)	$	578		$	544		$	555
Noninterest income		544			485			483

Total revenue (TE)		1,122			1,029			1,038
Provision (credit) for loan and lease losses		109			21			10
Noninterest expense		734			714			692
Income (loss) from continuing operations attributable to Key		219			226			234
Income (loss) from discontinued operations, net of taxes^(b)		—			10			(17	)
Net income (loss) attributable to Key		219			236			217

Income (loss) from continuing operations attributable to Key common shareholders	$	214		$	221		$	229
Income (loss) from discontinued operations, net of taxes^(b)		—			10			(17	)
Net income (loss) attributable to Key common shareholders		214			231			212

Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	.23		$	.23		$	.24
Income (loss) from discontinued operations, net of taxes^(b)		—			.01			(.02	)
Net income (loss) attributable to Key common shareholders^(e)		.23			.24			.22

Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution		.23			.23			.24
Income (loss) from discontinued operations, net of taxes — assuming dilution^(b)		—			.01			(.02	)
Net income (loss) attributable to Key common shareholders — assuming dilution ^(e)		.23			.24			.22

Cash dividends paid		.05			.05			.03
Book value at period end		10.64			10.43			10.09
Tangible book value at period end		9.54			9.45			9.10
Market price at period end		8.74			7.74			5.93

Performance ratios
From continuing operations:
Return on average total assets		1.08	%		1.12	%		1.14	%
Return on average common equity		8.57			9.06			9.52
Return on tangible common equity^(a)		9.53			9.95			10.47
Net interest margin (TE)		3.23			3.06			3.09
Cash efficiency ratio^(a)		64.62			69.29			66.57

From consolidated operations:
Return on average total assets		1.01	%		1.10	%		.98	%
Return on average common equity		8.57			9.47			8.82
Return on tangible common equity^(a)		9.53			10.40			9.70
Net interest margin (TE)		3.14			2.99			3.02
Loan to deposit^(d)		86.24			86.38			85.71

Capital ratios at period end
Key shareholders’ equity to assets		11.79	%		11.74	%		11.09	%
Tangible Key shareholders’ equity to tangible assets		10.73			10.78			10.15
Tangible common equity to tangible assets^(a)		10.39			10.44			9.82
Tier 1 common equity^{(a), (c)}		11.43			11.63			11.28
Tier 1 risk-based capital^(c)		12.24			12.45			13.49
Total risk-based capital^(c)		15.33			15.83			17.05
Leverage^(c)		11.29			11.35			11.93

Asset quality — from continuing operations
Net loan charge-offs	$	109		$	77		$	109
Net loan charge-offs to average loans		.86	%		.63	%		.90	%
Allowance for loan and lease losses to annualized net loan charge-offs		204.78			286.74			261.54
Allowance for loan and lease losses	$	888		$	888		$	1,131
Allowance for credit losses		931			939			1,187
Allowance for loan and lease losses to period-end loans		1.73	%		1.79	%		2.35	%
Allowance for credit losses to period-end loans		1.81			1.89			2.46
Allowance for loan and lease losses to nonperforming loans		135.99			135.16			143.53
Allowance for credit losses to nonperforming loans		142.57			142.92			150.63
Nonperforming loans at period end^(f)	$	653		$	657		$	788
Nonperforming assets at period end		718			751			914
Nonperforming loans to period-end portfolio loans		1.27	%		1.32	%		1.64	%
Nonperforming assets to period-end portfolio loans plus
OREO and other nonperforming assets		1.39			1.51			1.89

Trust and brokerage assets
Assets under management	$	49,670		$	49,149		$	51,584
Nonmanaged and brokerage assets		24,220			23,912			28,007

Other data
Average full-time equivalent employees		15,833			15,455			15,490
Branches		1,087			1,062			1,063

Taxable-equivalent adjustment	$	6		$	6		$	6

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

Page 14

Financial Highlights (continued)

(dollars in millions, except per share amounts)


	Nine months ended
	9-30-12			9-30-11
Summary of operations
Net interest income (TE)	$	1,681		$	1,729
Noninterest income		1,501			1,394

Total revenue (TE)		3,182			3,123
Provision (credit) for loan and lease losses		172			(38	)
Noninterest expense		2,151			2,073
Income (loss) from continuing operations attributable to Key		650			757
Income (loss) from discontinued operations, net of taxes^(b)		5			(37	)
Net income (loss) attributable to Key		655			720

Income (loss) from continuing operations attributable to Key common shareholders	$	634		$	656
Income (loss) from discontinued operations, net of taxes^(b)		5			(37	)
Net income (loss) attributable to Key common shareholders		639			619

Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	.67		$	.71
Income (loss) from discontinued operations, net of taxes^(b)		.01			(.04	)
Net income (loss) attributable to Key common shareholders^(e)		.68			.67

Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution		.67			.71
Income (loss) from discontinued operations, net of taxes — assuming dilution^(b)		.01			(.04	)
Net income (loss) attributable to Key common shareholders — assuming dilution ^(e)		.67			.67

Cash dividends paid		.13			.07

Performance ratios
From continuing operations:
Return on average total assets		1.08	%		1.23	%
Return on average common equity		8.63			9.62
Net interest margin (TE)		3.15			3.18

From consolidated operations:
Return on average total assets		1.01	%		1.09	%
Return on average common equity		8.70			9.08
Net interest margin (TE)		3.07			3.10

Asset quality — from continuing operations
Net loan charge-offs	$	287		$	436
Net loan charge-offs to average loans		.77	%		1.20	%

Other data
Average full-time equivalent employees		15,565			15,381

Taxable-equivalent adjustment	$	18		$	19

(a)

The following table entitled “GAAP to Non-GAAP Reconciliations” presents the computations of certain financial measures related to “tangible common equity,” “Tier 1 common equity,” and “cash efficiency.” The table reconciles the GAAP performance measures to the corresponding non-GAAP measures, which provides a basis for period-to-period comparisons.

(b)

In April 2009, management decided to wind down the operations of Austin Capital Management, Ltd., a subsidiary that specialized in managing hedge fund investments for institutional customers. In September 2009, management decided to discontinue the education lending business conducted through Key Education Resources, the education payment and financing unit of KeyBank National Association. As a result of these decisions, Key has accounted for these businesses as discontinued operations.

(c)	9-30-12 ratio is estimated.

(d)	Represents period-end consolidated total loans and loans held for sale (excluding education loans in the securitization trusts) divided by period-end consolidated total deposits (excluding deposits in foreign office).

(e)	Earnings per share may not foot due to rounding.

(f)	September 30, 2012 amount excludes $25 million of purchased credit impaired loans acquired in July 2012.

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

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

Page 15

GAAP to Non-GAAP Reconciliations

(dollars in millions)

The table below presents certain non-GAAP financial measures related to “tangible common equity,” “return on tangible common equity,” “Tier 1 common equity,” “pre-provision net revenue,” and “cash efficiency ratio.”

The tangible common equity ratio and the return on tangible common equity ratio have been a focus for some investors, and management believes these ratios may assist investors in analyzing Key’s capital position without regard to 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 the composition of capital, the calculation of which is prescribed in federal banking regulations. Since the commencement of the Comprehensive Capital Analysis and Review process in early 2009, the Federal Reserve has focused its assessment of capital adequacy on a component of Tier 1 risk-based capital known as Tier 1 common equity, a non-GAAP financial measure. Because the Federal Reserve has long indicated that voting common shareholders’ equity (essentially Tier 1 risk-based capital less preferred stock, qualifying capital securities and noncontrolling interests in subsidiaries) generally should be the dominant element in Tier 1 risk-based capital, this focus on Tier 1 common equity is consistent with existing capital adequacy categories.

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 enable investors to assess Key’s capital adequacy on these same bases. The table also reconciles the GAAP performance measures to the corresponding non-GAAP measures.

The table also shows the computation for pre-provision net revenue, which is not formally defined by GAAP. Management believes that eliminating the effects of the provision for loan and lease losses makes it easier to analyze the results by presenting them on a more comparable basis.

The cash efficiency ratio performance measure removes the impact of Key’s intangible asset amortization from the calculation. Management believes this ratio provides greater consistency and comparability between Key’s results and those of its peer banks. Additionally, this ratio is used by analysts and investors to assist in the development of their earnings forecasts and peer bank analysis.

Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited. Although these non-GAAP financial measures are frequently used by investors to evaluate 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
	9-30-12			6-30-12			9-30-11
Tangible common equity to tangible assets at period end
Key shareholders’ equity (GAAP)	$	10,251		$	10,155		$	9,901
Less: Intangible assets ^(a)		1,031			932			935
Preferred Stock, Series A		291			291			291

Tangible common equity (non-GAAP)	$	8,929		$	8,932		$	8,675

Total assets (GAAP)	$	86,950		$	86,523		$	89,262
Less: Intangible assets ^(a)		1,031			932			935

Tangible assets (non-GAAP)	$	85,919		$	85,591		$	88,327

Tangible common equity to tangible assets ratio (non-GAAP)		10.39	%		10.44	%		9.82	%

Tier 1 common equity at period end
Key shareholders’ equity (GAAP)	$	10,251		$	10,155		$	9,901
Qualifying capital securities		339			339			1,377
Less: Goodwill		979			917			917
Accumulated other comprehensive income (loss)^(b)		(109	)		(109	)		88
Other assets^(c)		121			71			72

Total Tier 1 capital (regulatory)		9,599			9,615			10,201
Less: Qualifying capital securities		339			339			1,377
Preferred Stock, Series A		291			291			291

Total Tier 1 common equity (non-GAAP)	$	8,969		$	8,985		$	8,533

Net risk-weighted assets (regulatory)^{(c), (d)}	$	78,447		$	77,236		$	75,643

Tier 1 common equity ratio (non-GAAP)^(d)		11.43	%		11.63	%		11.28	%

Pre-provision net revenue
Net interest income (GAAP)	$	572		$	538		$	549
Plus: Taxable-equivalent adjustment		6			6			6
Noninterest income		544			485			483
Less: Noninterest expense		734			714			692

Pre-provision net revenue from continuing operations (non-GAAP)	$	388		$	315		$	346

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

Page 16

GAAP to Non-GAAP Reconciliations (continued)

(dollars in millions)


	Three months ended
	9-30-12			6-30-12			9-30-11
Return on tangible common equity from continuing operations
Net income (loss) from continuing operations attributable to Key common shareholders	$	214		$	221		$	229
Tangible common equity (non-GAAP)		8,929			8,932			8,675

Return on tangible common equity from continuing operations (non-GAAP)		9.53	%		9.95	%		10.47	%

Return on tangible common equity consolidated
Net income (loss) attributable to Key common shareholders	$	214		$	231		$	212
Tangible common equity (non-GAAP)		8,929			8,932			8,675

Return on tangible common equity consolidated (non-GAAP)		9.53	%		10.40	%		9.70	%

Cash efficiency ratio
Noninterest expense (GAAP)	$	734		$	714		$	692
Less: Intangible asset amortization on credit cards		6			—			—
Other intangible asset amortization		3			1			1

Adjusted noninterest expense (non-GAAP)	$	725		$	713		$	691

Net interest income (GAAP)	$	572		$	538		$	549
Plus: Taxable-equivalent adjustment		6			6			6
Noninterest income		544			485			483

Total taxable-equivalent revenue (non-GAAP)	$	1,122		$	1,029		$	1,038

Cash efficiency ratio (non-GAAP)		64.62	%		69.29	%		66.57	%

(a)	September 30, 2012 excludes $130 million of purchased credit card receivable intangible assets that are not fully excludable for capital purposes.

(b)

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.

(c)	Other assets deducted from Tier 1 capital and net risk-weighted assets consist of disallowed intangible assets (excluding goodwill) and deductible portions of nonfinancial equity investments. There were no disallowed deferred tax assets at September 30, 2012, June 30, 2012, and September 30, 2011.

(d)	9-30-12 amount is estimated.

GAAP = U.S. generally accepted accounting principles

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

Page 17

Consolidated Balance Sheets

(dollars in millions)


	9-30-12			6-30-12			9-30-11
Assets
Loans	$	51,419		$	49,605		$	48,195
Loans held for sale		628			656			479
Securities available for sale		11,962			13,205			17,612
Held-to-maturity securities		4,153			4,352			1,176
Trading account assets		663			679			729
Short-term investments		2,208			2,216			4,766
Other investments		1,106			1,186			1,210

Total earning assets		72,139			71,899			74,167
Allowance for loan and lease losses		(888	)		(888	)		(1,131	)
Cash and due from banks		974			717			828
Premises and equipment		942			931			924
Operating lease assets		290			318			393
Goodwill		979			917			917
Other intangible assets		182			15			18
Corporate-owned life insurance		3,309			3,285			3,227
Derivative assets		771			818			940
Accrued income and other assets		2,871			2,978			2,946
Discontinued assets		5,381			5,533			6,033

Total assets	$	86,950		$	86,523		$	89,262

Liabilities
Deposits in domestic offices:
NOW and money market deposit accounts	$	30,573		$	28,957		$	27,548
Savings deposits		2,393			2,103			1,968
Certificates of deposit ($100,000 or more)		3,226			3,669			4,457
Other time deposits		4,941			5,385			6,695

Total interest-bearing deposits		41,133			40,114			40,668
Noninterest-bearing deposits		22,486			21,435			19,803
Deposits in foreign office — interest-bearing		569			618			561

Total deposits		64,188			62,167			61,032
Federal funds purchased and securities sold under repurchase agreements		1,746			1,716			1,728
Bank notes and other short-term borrowings		388			362			519
Derivative liabilities		657			763			1,141
Accrued expense and other liabilities		1,238			1,417			1,556
Long-term debt		6,119			7,521			10,717
Discontinued liabilities		2,335			2,401			2,651

Total liabilities		76,671			76,347			79,344
Equity
Preferred stock, Series A		291			291			291
Common shares		1,017			1,017			1,017
Capital surplus		4,118			4,120			4,191
Retained earnings		6,762			6,595			6,079
Treasury stock, at cost		(1,868	)		(1,796	)		(1,820	)
Accumulated other comprehensive income (loss)		(69	)		(72	)		143

Key shareholders’ equity		10,251			10,155			9,901
Noncontrolling interests		28			21			17

Total equity		10,279			10,176			9,918

Total liabilities and equity	$	86,950		$	86,523		$	89,262

Common shares outstanding (000)		936,195			945,473			952,808

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

Page 18

Consolidated Statements of Income

(dollars in millions, except per share amounts)


	Three months ended								Nine months ended
	9-30-12			6-30-12		9-30-11			9-30-12			9-30-11
Interest income
Loans	$	538		$	518	$	543		$	1,592		$	1,664
Loans held for sale		5			5		3			15			10
Securities available for sale		93			105		140			314			455
Held-to-maturity securities		21			17		2			50			3
Trading account assets		4			5		5			15			21
Short-term investments		1			2		3			4			5
Other investments		9			10		9			27			33

Total interest income		671			662		705			2,017			2,191
Interest expense
Deposits		60			71		95			208			305
Federal funds purchased and securities sold under repurchase agreements		1			1		1			3			4
Bank notes and other short-term borrowings		1			2		3			5			9
Long-term debt		37			50		57			138			163

Total interest expense		99			124		156			354			481

Net interest income		572			538		549			1,663			1,710
Provision (credit) for loan and lease losses		109			21		10			172			(38	)

Net interest income (expense) after provision for loan and lease losses		463			517		539			1,491			1,748

Noninterest income
Trust and investment services income		106			102		107			317			330
Service charges on deposit accounts		74			70		74			212			211
Operating lease income		17			20		30			59			97
Letter of credit and loan fees		52			56		55			162			157
Corporate-owned life insurance income		26			30		31			86			86
Net securities gains (losses)^(a)		—			—		—			—			1
Electronic banking fees		18			19		33			54			96
Gains on leased equipment		46			36		7			109			16
Insurance income		13			11		13			36			42
Net gains (losses) from loan sales		39			32		18			93			48
Net gains (losses) from principal investing		11			24		34			70			86
Investment banking and capital markets income (loss)		38			37		25			118			110
Other income		104			48		56			185			114

Total noninterest income		544			485		483			1,501			1,394

Noninterest expense
Personnel		411			389		382			1,185			1,133
Net occupancy		65			62		65			191			192
Operating lease expense		13			15		23			45			76
Computer processing		43			43		40			127			124
Business services and professional fees		49			51		47			138			129
FDIC assessment		7			8		7			23			45
OREO expense, net		1			7		1			14			8
Equipment		27			27		26			80			78
Marketing		18			17		16			48			36
Provision (credit) for losses on lending-related commitments		(8	)		6		(1	)		(2	)		(17	)
Intangible asset amortization on credit cards		6			—		—			6			—
Other intangible asset amortization		3			1		1			5			3
Other expense		99			88		85			291			266

Total noninterest expense		734			714		692			2,151			2,073

Income (loss) from continuing operations before income taxes		273			288		330			841			1,069
Income taxes		52			57		95			184			300

Income (loss) from continuing operations		221			231		235			657			769
Income (loss) from discontinued operations, net of taxes		—			10		(17	)		5			(37	)

Net income (loss)		221			241		218			662			732
Less: Net income (loss) attributable to noncontrolling interests		2			5		1			7			12

Net income (loss) attributable to Key	$	219		$	236	$	217		$	655		$	720

Income (loss) from continuing operations attributable to Key common shareholders	$	214		$	221	$	229		$	634		$	656
Net income (loss) attributable to Key common shareholders		214			231		212			639			619

Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	.23		$	.23	$	.24		$	.67		$	.71
Income (loss) from discontinued operations, net of taxes		—			.01		(.02	)		.01			(.04	)
Net income (loss) attributable to Key common shareholders^(b)		.23			.24		.22			.68			.67

Per common share — assuming dilution
Income (loss) from continuing operations attributable to Key common shareholders	$	.23		$	.23	$	.24		$	.67		$	.71
Income (loss) from discontinued operations, net of taxes		—			.01		(.02	)		.01			(.04	)
Net income (loss) attributable to Key common shareholders^(b)		.23			.24		.22			.67			.67

Cash dividends declared per common share	$	.05		$	.05	$	.03		$	.13		$	.07

Weighted-average common shares outstanding (000)		936,223			944,648		948,702			943,378			926,298
Weighted-average common shares and potential common shares outstanding (000)^(c)		940,764			948,087		950,686			947,582			930,449

(a)	For the three months ended September 30, 2012, June 30, 2012, and September 30, 2011, Key did not have any impairment losses related to securities.

(b)	Earnings per share may not foot due to rounding.

(c)	Assumes conversion of stock options and/or Preferred Series A shares, as applicable.

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

Page 19

Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations

(dollars in millions)


	Third Quarter 2012								Second Quarter 2012								Third Quarter 2011
	Average Balance			Interest ^(a)		Yield/Rate ^(a)			Average Balance			Interest ^(a)		Yield/Rate ^(a)			Average Balance			Interest ^(a)		Yield/Rate ^(a)
Assets
Loans:^{(b), (c)}

Commercial, financial and agricultural	$	21,473	^(h)	$	203		3.76	%	$	20,606		$	196		3.82	%	$	17,381		$	175		3.98	%
Real estate — commercial mortgage		7,463			83		4.40			7,613			85		4.50			7,978			89		4.47
Real estate — construction		1,116			12		4.55			1,216			14		4.64			1,545			18		4.46
Commercial lease financing		5,026			39		3.13			5,226			45		3.45			6,045			72		4.80

Total commercial loans		35,078			337		3.83			34,661			340		3.94			32,949			354		4.27
Real estate — residential mortgage		2,092			25		4.80			1,990			24		4.91			1,853			25		5.23
Home equity:
Key Community Bank		9,734			99		4.02			9,359			94		4.04			9,388			97		4.12
Other		468			9		7.73			493			9		7.66			582			11		7.69

Total home equity loans		10,202			108		4.19			9,852			103		4.23			9,970			108		4.33
Consumer other — Key Community Bank		1,297			32		9.65			1,247			29		9.20			1,169			28		9.60
Credit cards		432			17		15.38			—			—		—			—			—		—
Consumer other:
Marine		1,493			22		6.28			1,595			26		6.29			1,928			30		6.29
Other		101			3		8.02			101			2		8.49			139			3		7.89

Total consumer other		1,594			25		6.39			1,696			28		6.42			2,067			33		6.40

Total consumer loans		15,617			207		5.26			14,785			184		4.99			15,059			194		5.14

Total loans		50,695			544		4.27			49,446			524		4.26			48,008			548		4.54
Loans held for sale		532			5		3.28			585			5		3.43			341			3		3.75
Securities available for sale^{(b), (e)}		12,608			94		3.07			13,865			105		3.13			18,165			141		3.16
Held-to-maturity securities^(b)		4,251			21		1.94			3,493			17		1.98			354			2		2.59
Trading account assets		693			4		2.10			768			5		3.01			869			5		2.45
Short-term investments		1,868			1		.24			2,608			2		.29			3,348			3		.25
Other investments^(e)		1,134			8		3.08			1,177			10		3.21			1,190			9		2.94

Total earning assets		71,781			677		3.78			71,942			668		3.74			72,275			711		3.93
Allowance for loan and lease losses		(883	)							(928	)							(1,176	)
Accrued income and other assets		9,957								9,906								10,360
Discontinued assets — education lending business		5,421								5,633								6,079

Total assets	$	86,276							$	86,553							$	87,538

Liabilities
NOW and money market deposit accounts	$	30,176			14		.19		$	29,106			13		.18		$	26,917			18		.26
Savings deposits		2,378			1		.06			2,085			—		.03			1,980			—		.06
Certificates of deposit ($100,000 or more)^(f)		3,420			22		2.53			3,858			27		2.85			4,762			36		3.03
Other time deposits		5,158			23		1.76			5,645			30		2.13			6,942			40		2.28
Deposits in foreign office		666			—		.21			759			1		.24			675			1		.28

Total interest-bearing deposits		41,798			60		.57			41,453			71		.69			41,276			95		.91
Federal funds purchased and securities sold under repurchase agreements		1,822			1		.17			1,880			1		.20			1,724			1		.28
Bank notes and other short-term borrowings		390			1		1.53			468			2		1.80			598			3		1.85
Long-term debt^{(f), (g)}		3,793			37		4.43			5,463			50		4.01			7,777			57		3.14

Total interest-bearing liabilities		47,803			99		.83			49,264			124		1.02			51,375			156		1.21

Noninterest-bearing deposits		20,878								19,610								17,624
Accrued expense and other liabilities		1,928								1,927								2,612
Discontinued liabilities — education lending business^{(d), (g)}		5,421								5,633								6,079

Total liabilities		76,030								76,434								77,690
Equity
Key shareholders’ equity		10,222								10,100								9,831
Noncontrolling interests		24								19								17

Total equity		10,246								10,119								9,848

Total liabilities and equity	$	86,276							$	86,553							$	87,538

Interest rate spread (TE)							2.95	%							2.72	%							2.72	%

Net interest income (TE) and net interest margin (TE)					578		3.23	%					544		3.06	%					555		3.09	%

TE adjustment^(b)					6								6								6

Net interest income, GAAP basis				$	572							$	538							$	549

(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.

(g)	A portion of long-term debt and the related interest expense is allocated to discontinued liabilities as a result of applying our matched funds transfer pricing methodology to discontinued operations.

(h)	Commercial, financial and agricultural average balance includes $54 million of assets from commercial credit cards.

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

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

Page 20

Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations

(dollars in millions)


	Nine months ended September 30, 2012								Nine months ended September 30, 2011
	Average Balance			Interest^(a)		Yield/Rate^(a)			Average Balance			Interest^(a)		Yield/Rate^(a)
Assets
Loans:^{(b), (c)}

Commercial, financial and agricultural	$	20,706	^(h)	$	597		3.85	%	$	16,875		$	523		4.14	%
Real estate — commercial mortgage		7,689			257		4.46			8,554			288		4.51
Real estate — construction		1,205			42		4.69			1,777			57		4.28
Commercial lease financing		5,234			138		3.52			6,157			227		4.92

Total commercial loans		34,834			1,034		3.97			33,363			1,095		4.39
Real estate — residential mortgage		2,011			74		4.92			1,827			73		5.29
Home equity:
Key Community Bank		9,423			286		4.05			9,427			291		4.13
Other		494			28		7.69			613			35		7.65

Total home equity loans		9,917			314		4.23			10,040			326		4.35
Consumer other — Key Community Bank		1,246			89		9.49			1,159			83		9.62
Credit cards		145			17		15.38			—			—		—
Consumer other:
Marine		1,601			75		6.29			2,050			96		6.26
Other		106			7		8.11			147			9		7.87

Total consumer other		1,707			82		6.40			2,197			105		6.36

Total consumer loans		15,026			576		5.11			15,223			587		5.15

Total loans		49,860			1,610		4.31			48,586			1,682		4.63
Loans held for sale		566			15		3.45			369			10		3.66
Securities available for sale^{(b), (e)}		13,906			315		3.12			19,432			456		3.18
Held-to-maturity securities^(b)		3,335			50		1.98			132			3		3.37
Trading account assets		756			15		2.63			926			21		3.04
Short-term investments		2,124			4		.27			2,413			5		.24
Other investments^(e)		1,160			26		3.02			1,292			33		3.18

Total earning assets		71,707			2,035		3.81			73,150			2,210		4.05
Allowance for loan and lease losses		(926	)							(1,315	)
Accrued income and other assets		9,967								10,534
Discontinued assets — education lending business		5,603								6,301

Total assets	$	86,351							$	88,670


Liabilities
NOW and money market deposit accounts	$	29,207			42		.19		$	26,758			56		.28
Savings deposits		2,154			1		.05			1,956			1		.06
Certificates of deposit ($100,000 or more)^(f)		3,770			78		2.77			5,152			117		3.03
Other time deposits		5,611			86		2.04			7,414			129		2.33
Deposits in foreign office		731			1		.23			860			2		.32

Total interest-bearing deposits		41,473			208		.67			42,140			305		.97
Federal funds purchased and securities sold under repurchase agreements		1,851			3		.19			2,060			4		.27
Bank notes and other short-term borrowings		449			5		1.62			669			9		1.83
Long-term debt^{(f), (g)}		5,134			138		3.95			7,385			163		3.17

Total interest-bearing liabilities		48,907			354		.98			52,254			481		1.24

Noninterest-bearing deposits		19,656								17,016
Accrued expense and other liabilities		2,060								2,751
Discontinued liabilities — education lending business^{(d), (g)}		5,603								6,301

Total liabilities		76,226								78,322

Key shareholders’ equity		10,105								10,197
Noncontrolling interests		20								151

Total equity		10,125								10,348

Total liabilities and equity	$	86,351							$	88,670

Interest rate spread (TE)							2.83	%							2.81	%

Net interest income (TE) and net interest margin (TE)					1,681		3.15	%					1,729		3.18	%

TE adjustment^(b)					18								19

Net interest income, GAAP basis				$	1,663							$	1,710

(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.

(g)	A portion of long-term debt and the related interest expense is allocated to discontinued liabilities as a result of applying our matched funds transfer pricing methodology to discontinued operations.

(h)	Commercial, financial and agricultural average balance includes $18 million of assets from commercial credit cards.

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

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

Page 21

Noninterest Income

(in millions)


	Three months ended						Nine months ended
	9-30-12		6-30-12		9-30-11		9-30-12		9-30-11
Trust and investment services income^(a)	$	106	$	102	$	107	$	317	$	330
Service charges on deposit accounts		74		70		74		212		211
Operating lease income		17		20		30		59		97
Letter of credit and loan fees		52		56		55		162		157
Corporate-owned life insurance income		26		30		31		86		86
Net securities gains (losses)		—		—		—		—		1
Electronic banking fees		18		19		33		54		96
Gains on leased equipment		46		36		7		109		16
Insurance income		13		11		13		36		42
Net gains (losses) from loan sales		39		32		18		93		48
Net gains (losses) from principal investing		11		24		34		70		86
Investment banking and capital markets income (loss) ^(a)		38		37		25		118		110
Other income		104		48		56		185		114

Total noninterest income	$	544	$	485	$	483	$	1,501	$	1,394

(a)	Additional detail provided in tables below.

Trust and Investment Services Income

(in millions)


	Three months ended						Nine months ended
	9-30-12		6-30-12		9-30-11		9-30-12		9-30-11
Brokerage commissions and fee income	$	34	$	32	$	34	$	102	$	99
Personal asset management and custody fees		41		39		37		119		115
Institutional asset management and custody fees		31		31		36		96		116

Total trust and investment services income	$	106	$	102	$	107	$	317	$	330

Investment Banking and Capital Markets Income (Loss)

(in millions)


	Three months ended									Nine months ended
	9-30-12			6-30-12			9-30-11			9-30-12			9-30-11
Investment banking income	$	32		$	25		$	16		$	77		$	67
Income (loss) from other investments		2			4			6			11			18
Dealer trading and derivatives income (loss), proprietary^{(a), (b)}		4			(8	)		(10	)		(1	)		(18	)
Dealer trading and derivatives income (loss), nonproprietary^(b)		(9	)		6			2			3			11

Total dealer trading and derivatives income (loss)		(5	)		(2	)		(8	)		2			(7	)
Foreign exchange income		9			10			11			28			32

Total investment banking and capital markets income (loss)	$	38		$	37		$	25		$	118		$	110

(a)

For the quarters ended September 30, 2012, June 30, 2012, and September 30, 2011, fixed income securities trading comprised the vast majority of this amount. For the quarter ended September 30, 2012, income related to foreign exchange derivative trading and interest rate derivative trading was less than $1 million and was offset by losses from Key’s credit portfolio management activities. For the quarter ended June 30, 2012, income related to foreign exchange derivative trading, interest rate derivative trading, and Key’s credit portfolio management activities were all less than $1 million. For the quarter ended September 30, 2011, income related to foreign exchange and interest rate derivative trading was less than $2 million and was offset by losses from Key’s credit portfolio management activities.

(b)

The allocation between proprietary and nonproprietary is made based upon whether the trade is conducted for the benefit of Key or Key’s clients rather than based upon the proposed rulemakings under the Volcker Rule. The prohibitions and restrictions on proprietary trading activities contemplated by the Volcker Rule and the rules proposed thereunder are not yet final. Therefore, the ultimate impact of the rules proposed under the Volcker Rule is not yet known.

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

Page 22

Noninterest Expense

(dollars in millions)


	Three months ended								Nine months ended
	9-30-12			6-30-12		9-30-11			9-30-12			9-30-11
Personnel^(a)	$	411		$	389	$	382		$	1,185		$	1,133
Net occupancy		65			62		65			191			192
Operating lease expense		13			15		23			45			76
Computer processing		43			43		40			127			124
Business services and professional fees		49			51		47			138			129
FDIC assessment		7			8		7			23			45
OREO expense, net		1			7		1			14			8
Equipment		27			27		26			80			78
Marketing		18			17		16			48			36
Provision (credit) for losses on lending-related commitments		(8	)		6		(1	)		(2	)		(17	)
Intangible asset amortization on credit cards		6			—		—			6			—
Other intangible asset amortization		3			1		1			5			3
Other expense		99			88		85			291			266

Total noninterest expense	$	734		$	714	$	692		$	2,151		$	2,073

Average full-time equivalent employees^(b)		15,833			15,455		15,490			15,565			15,381

(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						Nine months ended
	9-30-12		6-30-12		9-30-11		9-30-12		9-30-11
Salaries	$	251	$	245	$	233	$	732	$	685
Incentive compensation		89		71		78		226		224
Employee benefits		55		56		54		176		174
Stock-based compensation		11		13		11		38		32
Severance		5		4		6		13		18

Total personnel expense	$	411	$	389	$	382	$	1,185	$	1,133

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

Page 23

Loan Composition

(dollars in millions)


							Percent change 9-30-12 vs.
	9-30-12		6-30-12		9-30-11		6-30-12			9-30-11
Commercial, financial and agricultural ^(a)	$	21,979	$	20,916	$	17,848		5.1	%		23.1	%
Commercial real estate:
Commercial mortgage		7,529		7,409		7,958		1.6			(5.4	)
Construction		1,067		1,172		1,456		(9.0	)		(26.7	)

Total commercial real estate loans		8,596		8,581		9,414		.2			(8.7	)
Commercial lease financing		4,960		5,106		5,957		(2.9	)		(16.7	)

Total commercial loans		35,535		34,603		33,219		2.7			7.0
Residential — prime loans:
Real estate — residential mortgage		2,138		2,016		1,875		6.1			14.0
Home equity:
Key Community Bank		9,768		9,601		9,347		1.7			4.5
Other		409		479		565		(14.6	)		(27.6	)

Total home equity loans		10,177		10,080		9,912		1.0			2.7

Total residential — prime loans		12,315		12,096		11,787		1.8			4.5
Consumer other — Key Community Bank		1,313		1,263		1,187		4.0			10.6
Credit cards		710		—		—		N/M			N/M
Consumer other:
Marine		1,448		1,542		1,871		(6.1	)		(22.6	)
Other		98		101		131		(3.0	)		(25.2	)

Total consumer — indirect loans		1,546		1,643		2,002		(5.9	)		(22.8	)

Total consumer loans		15,884		15,002		14,976		5.9			6.1

Total loans^{(b), (c)}	$	51,419	$	49,605	$	48,195		3.7	%		6.7	%

Loans Held for Sale Composition

(dollars in millions)


							Percent change 9-30-12 vs.
	9-30-12		6-30-12		9-30-11		6-30-12			9-30-11
Commercial, financial and agricultural	$	13	$	18	$	29		(27.8	)%		(55.2	)%
Real estate — commercial mortgage		484		523		325		(7.5	)		48.9
Real estate — construction		10		12		20		(16.7	)		(50.0	)
Commercial lease financing		4		13		26		(69.2	)		(84.6	)
Real estate — residential mortgage		117		90		79		30.0			48.1

Total loans held for sale	$	628	$	656	$	479		(4.3	)%		31.1	%

Summary of Changes in Loans Held for Sale

(dollars in millions)


	3Q12			2Q12			1Q12			4Q11			3Q11
Balance at beginning of period	$	656		$	511		$	728		$	479		$	381
New originations		1,280			1,308			935			1,235			853
Transfers from held to maturity, net		13			7			19			19			23
Loan sales		(1,311	)		(1,165	)		(1,168	)		(932	)		(759	)
Loan draws (payments), net		(9	)		(4	)		(3	)		(72	)		1
Transfers to OREO / valuation adjustments		(1	)		(1	)		—			(1	)		(20	)

Balance at end of period	$	628		$	656		$	511		$	728		$	479

(a)	September 30, 2012 loan balance includes $88 million of commercial credit card balances.

(b)	Excluded at September 30, 2012, June 30, 2012, and September 30, 2011, are loans in the amount of $5.3 billion, $5.5 billion, and $6.0 billion, respectively, related to the discontinued operations of the education lending business.

(c)	Includes purchased loans of $231 million of which $25 million were purchased credit impaired as of September 30, 2012.

N/M = Not Meaningful

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

Page 24

Exit Loan Portfolio From Continuing Operations

(dollars in millions)


	Balance				Change			Net Loan					Balance on
	Outstanding				9-30-12 vs.			Charge-offs					Nonperforming Status
	9-30-12		6-30-12		6-30-12			3Q12^(c)			2Q12		9-30-12		6-30-12
Residential properties — homebuilder	$	31	$	33	$	(2	)		—			—	$	6	$	14
Marine and RV floor plan		35		39		(4	)	$	(1	)	$	2		12		15
Commercial lease financing^(a)		1,035		1,237		(202	)		(3	)		1		8		9

Total commercial loans		1,101		1,309		(208	)		(4	)		3		26		38
Home equity — Other		409		479		(70	)		5			7		18		17
Marine		1,448		1,542		(94	)		6			7		31		19
RV and other consumer		98		101		(3	)		(1	)		2		2		1

Total consumer loans		1,955		2,122		(167	)		10			16		51		37

Total exit loans in loan portfolio	$	3,056	$	3,431	$	(375	)	$	6		$	19	$	77	$	75

Discontinued operations — education lending business (not included in exit loans above)^(b)	$	5,328	$	5,483	$	(155	)	$	12		$	12	$	22	$	18

(a)

Includes (1) the business aviation, commercial vehicle, office products, construction and industrial leases; (2) Canadian lease financing portfolios; and (3) all remaining balances related to lease in, lease out; sale in, lease out; service contract leases; and qualified technological equipment leases.

(b)	Includes loans in Key’s consolidated education loan securitization trusts.

(c)	Credit amounts indicate recoveries exceeded charge-offs.

Asset Quality Statistics From Continuing Operations

(dollars in millions)


	3Q12			2Q12			1Q12			4Q11			3Q11
Net loan charge-offs	$	109		$	77		$	101		$	105		$	109
Net loan charge-offs to average loans		.86	%		.63	%		.82	%		.86	%		.90	%
Allowance for loan and lease losses to annualized net loan charge-offs		204.78			286.74			232.39			241.01			261.54
Allowance for loan and lease losses	$	888		$	888		$	944		$	1,004		$	1,131
Allowance for credit losses^(a)		931			939			989			1,049			1,187
Allowance for loan and lease losses to period-end loans		1.73	%		1.79	%		1.92	%		2.03	%		2.35	%
Allowance for credit losses to period-end loans		1.81			1.89			2.01			2.12			2.46
Allowance for loan and lease losses to nonperforming loans		135.99			135.16			141.74			138.10			143.53
Allowance for credit losses to nonperforming loans		142.57			142.92			148.50			144.29			150.63
Nonperforming loans at period end^(b)	$	653		$	657		$	666		$	727		$	788
Nonperforming assets at period end		718			751			767			859			914
Nonperforming loans to period-end portfolio loans		1.27	%		1.32	%		1.35	%		1.47	%		1.64	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		1.39			1.51			1.55			1.73			1.89

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

(b)	September 30, 2012 amount excludes $25 million of purchased credit impaired loans acquired in July 2012.

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

Page 25

Summary of Loan and Lease Loss Experience From Continuing Operations

(dollars in millions)


	Three months ended									Nine months ended
	9-30-12			6-30-12			9-30-11			9-30-12			9-30-11
Average loans outstanding	$	50,695		$	49,446		$	48,008		$	49,860		$	48,586

Allowance for loan and lease losses at beginning of period	$	888		$	944		$	1,230		$	1,004		$	1,604
Loans charged off:
Commercial, financial and agricultural		16			23			31			65			124

Real estate — commercial mortgage		23			23			27			69			89
Real estate — construction		3			5			19			19			81

Total commercial real estate loans		26			28			46			88			170
Commercial lease financing		—			16			10			20			36

Total commercial loans		42			67			87			173			330
Real estate — residential mortgage		6			7			5			19			22
Home equity:
Key Community Bank		65			23			25			113			78
Other		6			9			9			23			35

Total home equity loans		71			32			34			136			113
Consumer other — Key Community Bank		9			10			11			29			34
Credit cards		2			—			—			2			—
Consumer other:
Marine		11			13			18			41			60
Other		—			2			2			4			7

Total consumer other		11			15			20			45			67

Total consumer loans		99			64			70			231			236

Total loans charged off		141			131			157			404			566
Recoveries:
Commercial, financial and agricultural		9			20			8			40			33

Real estate — commercial mortgage		2			14			2			18			9
Real estate — construction		1			1			11			3			19

Total commercial real estate loans		3			15			13			21			28
Commercial lease financing		8			6			8			18			19

Total commercial loans		20			41			29			79			80
Real estate — residential mortgage		—			1			1			2			3
Home equity:
Key Community Bank		3			2			7			7			9
Other		1			2			1			4			3

Total home equity loans		4			4			8			11			12
Consumer other — Key Community Bank		2			2			2			5			6
Consumer other:
Marine		5			6			7			18			26
Other		1			—			1			2			3

Total consumer other		6			6			8			20			29

Total consumer loans		12			13			19			38			50

Total recoveries		32			54			48			117			130

Net loan charge-offs		(109	)		(77	)		(109	)		(287	)		(436	)
Provision (credit) for loan and lease losses		109			21			10			172			(38	)
Foreign currency translation adjustment		—			—			—			(1	)		1

Allowance for loan and lease losses at end of period	$	888		$	888		$	1,131		$	888		$	1,131

Liability for credit losses on lending-related commitments at beginning of period	$	51		$	45		$	57		$	45		$	73
Provision (credit) for losses on lending-related commitments		(8	)		6			(1	)		(2	)		(17	)

Liability for credit losses on lending-related commitments at end of period^(a)	$	43		$	51		$	56		$	43		$	56

Total allowance for credit losses at end of period	$	931		$	939		$	1,187		$	931		$	1,187

Net loan charge-offs to average loans		.86	%		.63	%		.90	%		.77	%		1.20	%
Allowance for loan and lease losses to annualized net loan charge-offs		204.78			286.74			261.54			231.63			194.02
Allowance for loan and lease losses to period-end loans		1.73			1.79			2.35			1.73			2.35
Allowance for credit losses to period-end loans		1.81			1.89			2.46			1.81			2.46
Allowance for loan and lease losses to nonperforming loans		135.99			135.16			143.53			135.99			143.53
Allowance for credit losses to nonperforming loans		142.57			142.92			150.63			142.57			150.63

Discontinued operations — education lending business:
Loans charged off	$	17		$	16		$	34		$	56		$	107
Recoveries		5			4			3			13			9

Net loan charge-offs	$	(12	)	$	(12	)	$	(31	)	$	(43	)	$	(98	)

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

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

Page 26

Summary of Nonperforming Assets and Past Due Loans From Continuing Operations

(dollars in millions)


	9-30-12			6-30-12			3-31-12			12-31-11			9-30-11
Commercial, financial and agricultural	$	132		$	141		$	168		$	188		$	188

Real estate — commercial mortgage		134			172			175			218			237
Real estate — construction		53			68			66			54			93

Total commercial real estate loans		187			240			241			272			330
Commercial lease financing		18			18			22			27			31

Total commercial loans		337			399			431			487			549
Real estate — residential mortgage		83			78			82			87			88
Home equity:
Key Community Bank		171			141			109			108			102
Other		18			17			12			12			12

Total home equity loans		189			158			121			120			114
Consumer other — Key Community Bank		3			2			1			1			4
Credit cards		8			—			—			—			—
Consumer other:
Marine		31			19			30			31			32
Other		2			1			1			1			1

Total consumer other		33			20			31			32			33

Total consumer loans		316			258			235			240			239

Total nonperforming loans^(a)		653			657			666			727			788
Nonperforming loans held for sale		19			38			24			46			42
OREO		29			28			61			65			63
Other nonperforming assets		17			28			16			21			21

Total nonperforming assets	$	718		$	751		$	767		$	859		$	914


Accruing loans past due 90 days or more	$	89		$	131		$	169		$	164		$	118
Accruing loans past due 30 through 89 days		354			362			420			441			478
Restructured loans — accruing and nonaccruing^(b)		323			274			293			276			277
Restructured loans included in nonperforming loans^(b)		217			163			184			191			178
Nonperforming assets from discontinued operations — education lending business		22			18			19			23			22
Nonperforming loans to period-end portfolio loans		1.27	%		1.32	%		1.35	%		1.47	%		1.64	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		1.39			1.51			1.55			1.73			1.89

(a)	September 30, 2012 amount excludes $25 million of purchased credit impaired loans acquired in July 2012.

(b)

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 Third Quarter 2012 Profit

October 18, 2012

Page 27

Summary of Changes in Nonperforming Loans From Continuing Operations

(in millions)


	3Q12			2Q12			1Q12			4Q11			3Q11
Balance at beginning of period	$	657		$	666		$	727		$	788		$	842
Loans placed on nonaccrual status		276			350			214			230			292
Charge-offs		(141	)		(131	)		(132	)		(149	)		(157	)
Loans sold		(43	)		(49	)		(27	)		(28	)		(16	)
Payments		(74	)		(110	)		(65	)		(70	)		(125	)
Transfers to OREO		(10	)		(6	)		(15	)		(12	)		(11	)
Transfers to nonperforming loans held for sale		—			(16	)		—			(19	)		(24	)
Transfers to other nonperforming assets		—			(14	)		—			(4	)		(3	)
Loans returned to accrual status		(12	)		(33	)		(36	)		(9	)		(10	)

Balance at end of period^(a)	$	653		$	657		$	666		$	727		$	788

(a)	September 30, 2012 amount excludes $25 million of purchased credit impaired loans acquired in July 2012.

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

(in millions)


	3Q12			2Q12			1Q12			4Q11			3Q11
Balance at beginning of period	$	38		$	24		$	46		$	42		$	42
Transfers in		—			16			—			19			24
Net advances / (payments)		(1	)		—			(1	)		(3	)		(5	)
Loans sold		(17	)		(1	)		(1	)		(11	)		(5	)
Transfers to OREO		(1	)		—			—			(1	)		(19	)
Valuation adjustments		—			(1	)		(1	)		—			(1	)
Loans returned to accrual status / other		—			—			(19	)		—			6

Balance at end of period	$	19		$	38		$	24		$	46		$	42

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

(in millions)


	3Q12			2Q12			1Q12			4Q11			3Q11
Balance at beginning of period	$	28		$	61		$	65		$	63		$	52
Properties acquired — nonperforming loans		11			6			15			13			30
Valuation adjustments		(2	)		(7	)		(7	)		(4	)		(3	)
Properties sold		(8	)		(32	)		(12	)		(7	)		(16	)

Balance at end of period	$	29		$	28		$	61		$	65		$	63

KeyCorp Reports Third Quarter 2012 Profit

October 18, 2012

Page 28

Line of Business Results

(dollars in millions)


																Percent change 3Q12 vs.
	3Q12			2Q12			1Q12			4Q11			3Q11			2Q12			3Q11
Key Community Bank
Summary of operations
Total revenue (TE)	$	576		$	537		$	528		$	546		$	565			7.3	%		1.9	%
Provision (credit) for loan and lease losses		120			11			2			30			39			990.9			207.7
Noninterest expense		512			476			457			476			457			7.6			12.0
Net income (loss) attributable to Key		(23	)		41			57			40			57			N/M			N/M
Average loans and leases		28,386			27,043			26,617			26,406			26,270			5.0			8.1
Average deposits		49,537			48,253			47,768			48,076			47,672			2.7			3.9
Net loan charge-offs		93			50			49			71			60			86.0			55.0
Net loan charge-offs to average loans		1.30	%		.74	%		.74	%		1.07	%		.91	%		N/A			N/A
Nonperforming assets at period end	$	422		$	401		$	402		$	415		$	439			5.2			(3.9	)
Return on average allocated equity		(3.11	)%		5.73	%		7.74	%		5.07	%		7.19	%		N/A			N/A
Average full-time equivalent employees		9,139			8,757			8,719			8,633			8,641			4.4			5.8

Key Corporate Bank
Summary of operations
Total revenue (TE)	$	392		$	392		$	401		$	412		$	369			—			6.2	%
Provision (credit) for loan and lease losses		(3	)		4			13			(61	)		(40	)		N/M			N/M
Noninterest expense		209			218			230			228			216			(4.1	)%		(3.2	)
Net income (loss) attributable to Key		118			104			100			156			123			13.5			(4.1	)
Average loans and leases		18,886			18,532			18,584			17,784			16,986			1.9			11.2
Average loans held for sale		441			514			509			356			273			(14.2	)		61.5
Average deposits		12,873			12,409			11,556			11,162			10,544			3.7			22.1
Net loan charge-offs		8			9			25			12			22			(11.1	)		(63.6	)
Net loan charge-offs to average loans		.17	%		.20	%		.54	%		.27	%		.51	%		N/A			N/A
Nonperforming assets at period end	$	197		$	248		$	237		$	294		$	326			(20.6	)		(39.6	)
Return on average allocated equity		27.61	%		23.53	%		21.24	%		30.03	%		22.70	%		N/A			N/A
Average full-time equivalent employees		2,146			2,175			2,169			2,204			2,209			(1.3	)		(2.9	)

Key Corporate Bank supplementary information (lines of business)
Real Estate Capital and Corporate Banking Services
Total revenue (TE)	$	166		$	181		$	165		$	184		$	153			(8.3	)%		8.5	%
Provision (credit) for loan and lease losses		(3	)		5			—			(31	)		(38	)		N/M			N/M
Noninterest expense		62			67			63			66			68			(7.5	)		(8.8	)
Net income (loss) attributable to Key		67			65			64			94			78			3.1			(14.1	)
Average loans and leases		7,342			7,344			7,700			7,446			7,089			—			3.6
Average loans held for sale		359			337			291			216			173			6.5			107.5
Average deposits		9,674			9,254			8,279			7,694			7,339			4.5			31.8
Net loan charge-offs		9			7			16			10			19			28.6			(52.6	)
Net loan charge-offs to average loans		.49	%		.38	%		.84	%		.53	%		1.06	%		N/A			N/A
Nonperforming assets at period end	$	142		$	186		$	173		$	209		$	240			(23.7	)		(40.8	)
Return on average allocated equity		34.44	%		31.27	%		27.92	%		36.35	%		28.01	%		N/A			N/A
Average full-time equivalent employees		929			983			982			983			971			(5.5	)		(4.3	)

Equipment Finance
Total revenue (TE)	$	57		$	57		$	64		$	62		$	68			—			(16.2	)%
Provision (credit) for loan and lease losses		—			6			(2	)		(15	)		(8	)		N/M			N/M
Noninterest expense		35			37			37			48			45			(5.4	)%		(22.2	)
Net income (loss) attributable to Key		14			9			18			18			19			55.6			(26.3	)
Average loans and leases		5,159			4,887			4,780			4,681			4,620			5.6			11.7
Average loans held for sale		7			23			24			10			7			(69.6	)		—
Average deposits		6			7			8			9			11			(14.3	)		(45.5	)
Net loan charge-offs		(1	)		4			5			(1	)		(1	)		N/M			N/M
Net loan charge-offs to average loans		(.08	)%		.33	%		.42	%		(.08	)%		(.09	)%		N/A			N/A
Nonperforming assets at period end	$	30		$	33		$	28		$	41		$	31			(9.1	)		(3.2	)
Return on average allocated equity		22.73	%		14.48	%		26.71	%		23.19	%		23.05	%		N/A			N/A
Average full-time equivalent employees		383			393			394			442			434			(2.5	)		(11.8	)

Institutional and Capital Markets
Total revenue (TE)	$	169		$	154		$	172		$	166		$	148			9.7	%		14.2	%
Provision (credit) for loan and lease losses		—			(7	)		15			(15	)		6			N/M			N/M
Noninterest expense		112			114			130			114			103			(1.8	)		8.7
Net income (loss) attributable to Key		37			30			18			44			26			23.3			42.3
Average loans and leases		6,385			6,301			6,104			5,657			5,277			1.3			21.0
Average loans held for sale		75			154			194			130			93			(51.3	)		(19.4	)
Average deposits		3,193			3,148			3,269			3,459			3,194			1.4			—
Net loan charge-offs		—			(2	)		4			3			4			N/M			N/M
Net loan charge-offs to average loans		—			(.13	)%		.26	%		.21	%		.30	%		N/A			N/A
Nonperforming assets at period end	$	25		$	29		$	36		$	44		$	55			(13.8	)		(54.5	)
Return on average allocated equity		21.61	%		17.44	%		10.33	%		24.01	%		14.37	%		N/A			N/A
Average full-time equivalent employees		834			799			793			779			804			4.4			3.7

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

KEYCORP /NEW/ - FORM 8-K - EX-99.1 - October 18, 2012

Attached files

KEYCORP /NEW/ Reports