KeyCorp Reports Fourth Quarter 2011 Net Income of $201 Million and Full Year Net Income of $857 Million

CLEVELAND, Jan. 24, 2012 /PRNewswire/ --

Net income from continuing operations of $201 million, or $.21 per common share, for the fourth quarter of 2011
Full year net income from continuing operations of $857 million, or $.92 per common share
Net interest margin of 3.13%, up four basis points from the third quarter of 2011
Average total loans increased $656 million from the third quarter of 2011
Net charge-offs declined to $105 million, or .86% of average loan balances for the fourth quarter of 2011
Nonperforming loans declined to $727 million, or 1.47% of period-end loans, and nonperforming assets decreased to $859 million
Loan loss reserve at 2.03% of total period-end loans and 138% of nonperforming loans at December 31, 2011
VISA planned litigation escrow deposit resulted in a $24 million charge during the fourth quarter of 2011
Tier 1 common equity and Tier 1 risk-based capital ratios estimated at 11.28% and 13.01%, respectively, at December 31, 2011

KeyCorp (NYSE: KEY) today announced fourth quarter net income from continuing operations attributable to Key common shareholders of $201 million, or $.21 per common share. Key's fourth quarter 2011 results compare to net income from continuing operations attributable to Key common shareholders of $292 million, or $.33 per common share, for the fourth quarter of 2010. The results for the fourth quarter of 2011 were negatively impacted by a $24 million charge resulting from VISA's late fourth quarter announcement of a planned litigation escrow deposit. In addition, Key recorded a $28 million gain on the sale of Tuition Management Systems during the fourth quarter of 2010. Fourth quarter 2011 net income attributable to Key common shareholders was $194 million compared to net income attributable to Key common shareholders of $279 million for the same quarter one year ago.

For 2011, net income from continuing operations attributable to Key common shareholders was $857 million, or $.92 per common share, compared to net income from continuing operations attributable to Key common shareholders of $413 million, or $.47 per common share, for 2010. The results for 2011 reflect lower credit costs and an improvement in noninterest expense as compared to 2010. Net income attributable to Key common shareholders for the year ended December 31, 2011, was $813 million compared to net income attributable to Key common shareholders of $390 million for 2010.

During the fourth quarter of 2011, the Company continued to benefit from improved asset quality. Nonperforming loans decreased by $341 million and nonperforming assets declined by $479 million from the year-ago quarter to $727 million and $859 million, respectively. Net charge-offs declined to $105 million, or .86% of average loan balances for the fourth quarter of 2011, compared to $256 million, or 2.00% of average loan balances for the same period one year ago.

Chairman and Chief Executive Officer Beth Mooney stated, "Key's fourth quarter results reflect continued improvement in credit quality and the third consecutive quarter of growth in our commercial, financial and agricultural loan portfolio. We are encouraged by this growth and believe it demonstrates our ability to leverage the alignment of our franchise across business lines to support the needs of our clients. Further, these results confirm our belief that the inflection point for loan growth was reached in the third quarter of 2011."

The Company originated new or renewed lending commitments to consumers and businesses of approximately $10.5 billion during the quarter and $36.6 billion for 2011. This annual amount compares to approximately $29.5 billion in 2010, an increase of 24%.

Mooney continued: "We are pleased by the positive survey results that tell us that Key's customer satisfaction, loyalty and retention scores continue to exceed those of other large U.S. banks. This includes the customer satisfaction survey by American Customer Satisfaction Index showing that Key is one of only two large banks that improved its overall customer satisfaction score for two consecutive years. This accomplishment, in the face of an extremely difficult operating environment, demonstrates the success of our client-focused relationship strategy. Key also ranked fifth nationwide in overall customer satisfaction in the J.D. Power and Associates 2011 Small Business Banking Satisfaction Survey."

At December 31, 2011, Key's estimated Tier 1 common equity and Tier 1 risk-based capital ratios were 11.28% and 13.01%, compared to 11.28% and 13.49%, respectively, at September 30, 2011.

On January 12, 2012, Key signed a purchase and assumption agreement to acquire 37 retail banking branches in Buffalo and Rochester, NY. The deposits associated with these branches total approximately $2.4 billion, while loans total approximately $400 million.

"Viewed in a broader perspective, this acquisition marks an important milestone for Key," said Mooney. "During the challenging last few years, we have focused on taking actions to strengthen our balance sheet, fortify our capital, effectively manage risk and expenses, and focus on our core relationship business. Those actions, while sometimes difficult, have now positioned us so that we can, in a disciplined manner, act on opportunities to strengthen our franchise."

The following table shows Key's continuing and discontinued operating results for the comparative quarters and for the years ended December 31, 2011 and 2010.


Results of Operations

			Three months ended						Twelve months ended
in millions, except per share amounts			12-31-11		9-30-11		12-31-10		12-31-11		12-31-10
Summary of operations
Income (loss) from continuing operations attributable to Key		$	207	$	234	$	333	$	964	$	577
Income (loss) from discontinued operations, net of taxes (a)			(7)		(17)		(13)		(44)		(23)
Net income (loss) attributable to Key		$	200	$	217	$	320	$	920	$	554

Income (loss) from continuing operations attributable to Key		$	207	$	234	$	333	$	964	$	577
Less:	Dividends on Series A Preferred Stock		6		5		6		23		23
	Cash dividends on Series B Preferred Stock(b)		-		-		31		31		125
	Amortization of discount on Series B Preferred Stock (b)		-		-		4		53		16
Income (loss) from continuing operations attributable to Key common shareholders			201		229		292		857		413
Income (loss) from discontinued operations, net of taxes (a)			(7)		(17)		(13)		(44)		(23)
Net income (loss) attributable to Key common shareholders		$	194	$	212	$	279	$	813	$	390

Per common share - assuming dilution
Income (loss) from continuing operations attributable to Key common shareholders		$	.21	$	.24	$	.33	$	.92	$	.47
Income (loss) from discontinued operations, net of taxes(a)			(.01)		(.02)		(.02)		(.05)		(.03)
Net income (loss) attributable to Key common shareholders (c)		$	.20	$	.22	$	.32	$	.87	$	.44

(a) 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. 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. As a result of these decisions, Key has accounted for these businesses as discontinued operations. The loss from discontinued operations for the year ended December 31, 2011, was primarily attributable to fair value adjustments related to the education lending securitization trusts.

(b) The year ended December 31, 2011, includes a $49 million deemed dividend recorded in the first quarter of 2011 related to the repurchase of the $2.5 billion Series B Preferred Stock.

SUMMARY OF CONTINUING OPERATIONS

Taxable-equivalent net interest income was $563 million for the fourth quarter of 2011, and the net interest margin was 3.13%. These results compare to taxable-equivalent net interest income of $635 million and a net interest margin of 3.31% for the fourth quarter of 2010. The decrease in net interest income is attributable to both a decline in earning assets and the net interest margin. The net interest margin has been under pressure as a result of the continuation of the low rate environment contracting the spread between lending rates and funding costs.

Compared to the third quarter of 2011, taxable-equivalent net interest income increased by $8 million, and the net interest margin improved by four basis points. The improvement in the net interest income and net interest margin resulted from a decline in Key's cost of funds due to rate reductions on deposits, maturities of higher rate certificates of deposit, and the impact of certain capital securities redemptions during the third and fourth quarters of 2011. In addition to the improved funding mix, a decrease in the balance of lower yielding short-term investments during the fourth quarter of 2011 also contributed to the margin improvement.

Key's noninterest income was $414 million for the fourth quarter of 2011, compared to $526 million for the year-ago quarter. Investment banking and capital markets income decreased $39 million compared to the same period one year ago, which includes a $24 million charge resulting from VISA's late fourth quarter announcement of a planned increase to its litigation escrow deposit. Other income also decreased from the year-ago quarter due to a $28 million gain from the sale of Tuition Management Systems in the fourth quarter of 2010. Also contributing to the decline in noninterest income were decreases in operating lease income of $17 million and net securities gains (losses) of $12 million. Electronic banking fees also declined $13 million as a result of new government pricing controls on debit transactions which were effective October 1, 2011.

The major components of Key's noninterest income for the past five quarters are shown in the following table.


Noninterest Income - Major Components

in millions		4Q11		3Q11		2Q11		1Q11		4Q10
Trust and investment services income	$	104	$	107	$	113	$	110	$	108
Service charges on deposit accounts		70		74		69		68		70
Operating lease income		25		30		32		35		42
Letter of credit and loan fees		56		55		47		55		51
Corporate-owned life insurance income		35		31		28		27		42
Electronic banking fees		18		33		33		30		31
Insurance income		11		13		14		15		12
Net gains (losses) from loan sales		27		18		11		19		29
Net gains (losses) from principal investing		(8)		34		17		35		(6)
Investment banking and capital markets income (loss)		24		25		42		43		63

Compared to the third quarter of 2011, noninterest income decreased by $69 million. The decrease was a result of lower net gains (losses) from principal investing (including results attributable to noncontrolling interests) of $42 million and a $10 million loss associated with the redemption of certain capital securities compared to a $13 million gain in the third quarter. Electronic banking fees also declined $15 million as a result of new government pricing controls on debit transactions which were effective October 1, 2011. These declines were partially offset by an increase in net gains (losses) from loan sales of $9 million.

Key's noninterest expense was $717 million for the fourth quarter of 2011, compared to $744 million for the same period last year. The improvement in expense levels resulted from declines of $20 million in FDIC deposit insurance premiums, $10 million in operating lease expense and reductions across several other expense categories. These decreases were partially offset by a $21 million increase in employee benefits expense due to higher medical claims expense compared to the year ago quarter when Key recorded a reduced amount due to favorable experience. In addition, the fourth quarter reflected a credit of $11 million in the provision (credit) for losses on lending-related commitments compared to a credit of $26 million in the same period one year ago.

Compared to the third quarter of 2011, noninterest expense increased by $25 million. Business services and professional fees and miscellaneous expenses both increased by $10 million and personnel expense increased $5 million. Marketing expense also increased $8 million as Key continues to promote, support and advertise relationship-based products, services and capabilities. These increases were partially offset by a decrease of $10 million in the provision (credit) for losses on lending-related commitments.

ASSET QUALITY

Key's provision for loan and lease losses was a credit of $22 million for the fourth quarter of 2011, compared to a credit of $97 million for the year-ago quarter and a charge of $10 million for the third quarter of 2011. Key's allowance for loan and lease losses was $1 billion, or 2.03% of total period-end loans, at December 31, 2011, compared to 2.35% at September 30, 2011, and 3.20% at December 31, 2010.

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


Selected Asset Quality Statistics from Continuing Operations

dollars in millions		4Q11			3Q11			2Q11			1Q11			4Q10
Net loan charge-offs	$	105		$	109		$	134		$	193		$	256
Net loan charge-offs to average loans		.86	%		.90	%		1.11	%		1.59	%		2.00	%
Allowance for loan and lease losses	$	1,004		$	1,131		$	1,230		$	1,372		$	1,604
Allowance for credit losses(a)		1,049			1,187			1,287			1,441			1,677
Allowance for loan and lease losses to period-end loans		2.03	%		2.35	%		2.57	%		2.83	%		3.20	%
Allowance for credit losses to period-end loans		2.12			2.46			2.69			2.97			3.35
Allowance for loan and lease losses to nonperforming loans		138.10			143.53			146.08			155.03			150.19
Allowance for credit losses to nonperforming loans		144.29			150.63			152.85			162.82			157.02
Nonperforming loans at period end	$	727		$	788		$	842		$	885		$	1,068
Nonperforming assets at period end		859			914			950			1,089			1,338
Nonperforming loans to period-end portfolio loans		1.47	%		1.64	%		1.76	%		1.82	%		2.13	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		1.73			1.89			1.98			2.23			2.66

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

Net loan charge-offs for the quarter totaled $105 million, or .86% of average loans. These results compare to $256 million, or 2.00%, for the same period last year and $109 million, or .90%, for the previous quarter. Net loan charge-offs have declined for the last eight consecutive quarters and were less than one percent of average loans for the second consecutive quarter.

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


Net Loan Charge-offs from Continuing Operations

dollars in millions		4Q11			3Q11			2Q11			1Q11			4Q10
Commercial, financial and agricultural	$	28		$	23		$	36		$	32		$	80
Real estate - commercial mortgage		23			25			12			43			52
Real estate - construction (a)		(6)			8			24			30			28
Commercial lease financing		-			2			4			11			12
Total commercial loans		45			58			76			116			172
Home equity - Key Community Bank		20			18			27			24			26
Home equity - Other		9			8			10			14			13
Marine		14			11			4			19			17
Other		17			14			17			20			28
Total consumer loans		60			51			58			77			84
Total net loan charge-offs	$	105		$	109		$	134		$	193		$	256

Net loan charge-offs to average loans from continuing operations		.86	%		.90	%		1.11	%		1.59	%		2.00	%

Net loan charge-offs from discontinued operations - education lending business	$	25		$	31		$	32		$	35		$	32

(a) Credit amount indicates recoveries exceeded charge-offs.

Compared to the third quarter of 2011, net loan charge-offs in the commercial loan portfolio decreased by $13 million which was attributable to a decline in the real estate - construction category. As shown in the table on page 6, Key's exit loan portfolio accounted for $22 million, or 21%, of Key's total net loan charge-offs for the fourth quarter of 2011. Net charge-offs in the exit loan portfolio decreased by $5 million from the third quarter of 2011, primarily driven by a decrease in net charge-offs in the residential properties - homebuilder loan portfolio.

At December 31, 2011, Key's nonperforming loans totaled $727 million and represented 1.47% of period-end portfolio loans, compared to 1.64% at September 30, 2011, and 2.13% at December 31, 2010. Nonperforming assets at December 31, 2011, totaled $859 million and represented 1.73% of portfolio loans and OREO and other nonperforming assets, compared to 1.89% at September 30, 2011, and 2.66% at December 31, 2010. The following table illustrates the trend in Key's nonperforming assets by loan type over the past five quarters.


Nonperforming Assets from Continuing Operations

dollars in millions		4Q11			3Q11			2Q11			1Q11			4Q10
Commercial, financial and agricultural	$	188		$	188		$	213		$	221		$	242
Real estate - commercial mortgage		218			237			230			245			255
Real estate - construction		54			93			131			146			241
Commercial lease financing		27			31			41			42			64
Total consumer loans		240			239			227			231			266
Total nonperforming loans		727			788			842			885			1,068
Nonperforming loans held for sale		46			42			42			86			106
OREO and other nonperforming assets		86			84			66			118			164
Total nonperforming assets	$	859		$	914		$	950		$	1,089		$	1,338

Restructured loans - accruing and nonaccruing(a)	$	276		$	277		$	252		$	242		$	297
Restructured loans included in nonperforming loans(a)		191			178			144			136			202
Nonperforming assets from discontinued operations - education lending business		23			22			21			22			40
Nonperforming loans to period-end portfolio loans		1.47	%		1.64	%		1.76	%		1.82	%		2.13	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		1.73			1.89			1.98			2.23			2.66

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

Nonperforming assets continued to decrease during the fourth quarter of 2011, representing the ninth consecutive quarterly decline. As shown in the following table, Key's exit loan portfolio accounted for $119 million, or 13.9%, of Key's total nonperforming assets at December 31, 2011.

The following table shows the composition of Key's exit loan portfolio at December 31, 2011, and September 30, 2011, the net charge-offs recorded on this portfolio for the third and fourth quarters of 2011, and the nonperforming status of these loans at December 31, 2011, and September 30, 2011.


Exit Loan Portfolio from Continuing Operations

		Balance Outstanding				Change		Net Loan Charge-offs					Balance on Nonperforming Status
		Balance Outstanding				12-31-11 vs.		Net Loan Charge-offs					Balance on Nonperforming Status
	in millions	12-31-11		9-30-11		9-30-11		4Q11		(c)	3Q11		12-31-11		9-30-11
	Residential properties - homebuilder	$	41	$	48	$	(7)	$	(2)		$	4	$	23	$	28
	Marine and RV floor plan		81		92		(11)		2			3		45		38
	Commercial lease financing(a)		1,669		1,728		(59)		(2)			-		7		9
	Total commercial loans		1,791		1,868		(77)		(2)			7		75		75
	Home equity - Other		535		565		(30)		9			8		12		12
	Marine		1,766		1,871		(105)		14			11		31		32
	RV and other consumer		125		131		(6)		1			1		1		-
	Total consumer loans		2,426		2,567		(141)		24			20		44		44
	Total exit loans in loan portfolio	$	4,217	$	4,435	$	(218)	$	22		$	27	$	119	$	119

	Discontinued operations - education lending business (not included in exit loans above)(b)	$	5,812	$	5,984	$	(172)	$	25		$	31	$	23	$	22

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

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

CAPITAL

Key's estimated risk-based capital ratios included in the following table continued to exceed all "well-capitalized" regulatory benchmarks at December 31, 2011.


Capital Ratios

		12-31-11		9-30-11		6-30-11		3-31-11		12-31-10
	Tier 1 common equity(a), (b)	11.28	%	11.28	%	11.14	%	10.74	%	9.34	%
	Tier 1 risk-based capital(a)	13.01		13.49		13.93		13.48		15.16
	Total risk-based capital(a)	16.53		17.05		17.88		17.38		19.12
	Tangible common equity to tangible assets(b)	9.88		9.82		9.67		9.16		8.19

(a) 12-31-11 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 December 31, 2011, Key's estimated Tier 1 common equity and Tier 1 risk-based capital ratios stood at 11.28% and 13.01%, respectively. In addition, the tangible common equity ratio was 9.88% at December 31, 2011.

The changes in Key's outstanding common shares over the past five quarters are summarized in the following table.


Summary of Changes in Common Shares Outstanding

in thousands	4Q11	3Q11	2Q11	1Q11	4Q10
Shares outstanding at beginning of period	952,808	953,822	953,926	880,608	880,328
Common shares issued	-	-	-	70,621	-
Shares reissued (returned) under employee benefit plans	200	(1,014)	(104)	2,697	280
Shares outstanding at end of period	953,008	952,808	953,822	953,926	880,608

During the first quarter of 2011, Key successfully completed a $625 million common equity offering and a $1 billion debt offering. The proceeds from these offerings, along with other available funds, were used to repurchase the $2.5 billion of Fixed-Rate Perpetual Preferred Stock, Series B issued to the U.S. Treasury Department as a result of Key's participation in the U.S. Treasury's Capital Purchase Program.

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. The specific lines of business that comprise each of the major business segments are described under the heading "Line of Business Descriptions." For more detailed financial information pertaining to each business segment and its respective lines of business, see the tables at the end of this release.


Major Business Segments

							Percent change 4Q11 vs.
dollars in millions		4Q11		3Q11		4Q10		3Q11		4Q10
Revenue from continuing operations (TE)
Key Community Bank	$	546	$	565	$	597		(3.4)	%	(8.5)	%
Key Corporate Bank		411		368		434		11.7		(5.3)
Other Segments		46		105		112		(56.2)		(58.9)
Total Segments		1,003		1,038		1,143		(3.4)		(12.2)
Reconciling Items		(26)		-		18		N/M		(244.4)
Total	$	977	$	1,038	$	1,161		(5.9)	%	(15.8)	%

Income (loss) from continuing operations
attributable to Key
Key Community Bank	$	40	$	58	$	58		(31.0)	%	(31.0)	%
Key Corporate Bank		156		122		289		27.9		(46.0)
Other Segments		24		55		3		(56.4)		700.0
Total Segments		220		235		350		(6.4)		(37.1)
Reconciling Items		(13)		(1)		(17)		N/M		N/M
Total	$	207	$	234	$	333		(11.5)	%	(37.8)	%

TE = Taxable Equivalent, N/M = Not Meaningful


Key Community Bank

							Percent change 4Q11 vs.
dollars in millions		4Q11		3Q11		4Q10		3Q11		4Q10
Summary of operations
Net interest income (TE)	$	365	$	371	$	394		(1.6)	%	(7.4)	%
Noninterest income		181		194		203		(6.7)		(10.8)
Total revenue (TE)		546		565		597		(3.4)		(8.5)
Provision (credit) for loan and lease losses		30		39		74		(23.1)		(59.5)
Noninterest expense		477		456		457		4.6		4.4
Income (loss) before income taxes (TE)		39		70		66		(44.3)		(40.9)
Allocated income taxes and TE adjustments		(1)		12		8		(108.3)		(112.5)
Net income (loss) attributable to Key	$	40	$	58	$	58		(31.0)	%	(31.0)	%

Average balances
Loans and leases	$	26,406	$	26,270	$	26,436		.5	%	(.1)	%
Total assets		29,867		29,681		29,830		.6		.1
Deposits		48,076		47,672		48,124		.8		(.1)

Assets under management at period end	$	17,938	$	17,195	$	18,788		4.3	%	(4.5)	%

TE = Taxable Equivalent, N/M = Not Meaningful


Additional Key Community Bank Data										Percent change 4Q11 vs.
dollars in millions		4Q11			3Q11			4Q10			3Q11		4Q10
Average deposit balances
NOW and money market deposit accounts	$	22,524		$	21,967		$	20,513			2.5	%	9.8	%
Savings deposits		1,959			1,971			1,863			(.6)		5.2
Certificates of deposit ($100,000 or more)		3,639			3,862			4,885			(5.8)		(25.5)
Other time deposits		6,491			6,928			8,638			(6.3)		(24.9)
Deposits in foreign office		393			336			421			17.0		(6.7)
Noninterest-bearing deposits		13,070			12,608			11,804			3.7		10.7
Total deposits	$	48,076		$	47,672		$	48,124			.8	%	(.1)	%

Home equity loans
Average balance	$	9,280		$	9,388		$	9,582
Weighted-average loan-to-value ratio (at date of origination)		70	%		70	%		70	%
Percent first lien positions		53			53			53
Other data
Branches		1,058			1,063			1,033
Automated teller machines		1,579			1,584			1,531

Key Community Bank Summary of Operations

Key Community Bank recorded net income attributable to Key of $40 million for the fourth quarter of 2011, compared to net income attributable to Key of $58 million for the year-ago quarter.

Taxable-equivalent net interest income declined by $29 million, or 7%, from the fourth quarter of 2010. Average loans and leases and average deposits were essentially even with the level one year ago; however, given the continued low rate environment the value derived from these assets and deposits was less in the current period.

Noninterest income decreased by $22 million, or 11%, from the year-ago quarter. Electronic banking fees declined $13 million as a result of new government pricing controls on debit transactions which were effective October 1, 2011. Investment banking and capital markets income also decreased $5 million from one year ago.

The provision for loan and lease losses declined by $44 million, or 59%, compared to the fourth quarter of 2010 due to lower net charge-offs and nonperforming loans from the same period one year ago. Net charge-offs were $71 million for the fourth quarter of 2011, down $44 million from the $115 million incurred in the same period one year ago. Nonperforming loans declined to $415 million at December 31, 2011, down $82 million from one year ago.

Noninterest expense increased by $20 million, or 4%, from the year-ago quarter. Personnel expense increased $17 million and real estate costs associated with investments in Key's branch network increased $18 million. These increases were partially offset by a reduction in FDIC deposit insurance premiums of $18 million from one year ago.


Key Corporate Bank

							Percent change 4Q11 vs.
dollars in millions		4Q11		3Q11		4Q10		3Q11		4Q10
Summary of operations
Net interest income (TE)	$	175	$	170	$	204		2.9	%	(14.2)	%
Noninterest income		236		198		230		19.2		2.6
Total revenue (TE)		411		368		434		11.7		(5.3)
Provision (credit) for loan and lease losses		(61)		(40)		(263)		N/M		N/M
Noninterest expense		227		216		240		5.1		(5.4)
Income (loss) before income taxes (TE)		245		192		457		27.6		(46.4)
Allocated income taxes and TE adjustments		89		70		168		27.1		(47.0)
Net income (loss) attributable to Key	$	156	$	122	$	289		27.9	%	(46.0)	%

Average balances
Loans and leases	$	17,783	$	16,985	$	18,602		4.7	%	(4.4)	%
Loans held for sale		356		273		253		30.4		40.7
Total assets		21,810		21,168		22,607		3.0		(3.5)
Deposits		11,162		10,544		12,766		5.9		(12.6)

Assets under management at period end	$	31,603	$	34,389	$	41,027		(8.1)	%	(23.0)	%

TE = Taxable Equivalent, N/M = Not Meaningful

Key Corporate Bank Summary of Operations

Key Corporate Bank recorded net income attributable to Key of $156 million for the fourth quarter of 2011, compared to net income attributable to Key of $289 million for the same period one year ago. This decrease was primarily driven by a $202 million reduction in a credit to the provision for loan and lease losses compared to the same period one year ago.

Taxable-equivalent net interest income decreased by $29 million, or 14%, compared to the fourth quarter of 2010, due to lower average deposits and average earning assets. Average deposits declined by $1.6 billion, or 13%, from one year ago primarily because Key moved $1.5 billion in escrow balances out of the Real Estate Capital line of business to a third party in the first quarter of 2011. Average earning assets decreased by $969 million, or 5%, from the year-ago quarter, while lower levels of nonperforming assets and better pricing helped to partially offset volume-related declines.

Noninterest income increased by $6 million, or 3%, from the fourth quarter of 2010. Other income increased $22 million as a result of gains on the disposition of certain investments held by the Real Estate Capital line of business. This increase was partially offset by decreases in operating lease income of $8 million, investment banking and capital markets income of $5 million and trust and investment services income of $4 million.

The provision for loan and lease losses in the fourth quarter of 2011 was a credit of $61 million compared to a credit of $263 million for the same period one year ago. Key Corporate Bank continued to experience improved asset quality for the ninth quarter in a row. Net charge-offs were $12 million for the fourth quarter of 2011, down $49 million from the $61 million incurred in the same period one year ago. Nonperforming loans declined to $294 million at December 31, 2011, down $281 million from one year ago.

Noninterest expense decreased by $13 million, or 5%, from the fourth quarter of 2010. Contributing to the improvement in expense levels were decreases in various miscellaneous expense items of $22 million, operating lease expense of $6 million, and business services and professional fees of $4 million from the year-ago quarter. These improvements were partially offset by an increase in personnel expense of $12 million. In addition, the fourth quarter reflected a credit to the provision for losses on lending-related commitments of $10 million compared to a credit of $18 million for the same period one year ago.

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 $24 million for the fourth quarter of 2011, compared to net income attributable to Key of $3 million for the same period last year. These results were primarily attributable to a decrease in the provision for loan and lease losses of $81 million in the exit portfolio partially offset by decreases in various miscellaneous income items of $41 million and net interest income of $12 million.

Line of Business Descriptions

Key Community Bank

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

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

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

Key Corporate Bank

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

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

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

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

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

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

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 $89 billion at December 31, 2011.

Key provides deposit, lending, cash management and investment services to individuals and small businesses in 14 states 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.

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 Tuesday, January 24, 2012. An audio replay of the call will be available through January 31, 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.

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about Key's financial condition, results of operations, earnings outlook, asset quality trends and profitability. Forward-looking statements are not historical facts but instead represent only management's current expectations and forecasts regarding future events, many of which, by their nature, are inherently uncertain and outside of Key's control. Key's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Factors that could cause Key's actual results to differ materially from those described in the forward-looking statements can be found in KeyCorp's Annual Report on Form 10-K for the year ended December 31, 2010, and its Quarterly Reports on Form 10-Q for the periods ended March 31, 2011, June 30, 2011, and September 30, 2011, 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.


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

			Three months ended
			12-31-11			9-30-11			12-31-10
Summary of operations
	Net interest income (TE)		$	563		$	555		$	635
	Noninterest income			414			483			526
		Total revenue (TE)		977			1,038			1,161
	Provision (credit) for loan and lease losses			(22)			10			(97)
	Noninterest expense			717			692			744
	Income (loss) from continuing operations attributable to Key			207			234			333
	Income (loss) from discontinued operations, net of taxes(b)			(7)			(17)			(13)
	Net income (loss) attributable to Key			200			217			320

	Income (loss) from continuing operations attributable to Key common shareholders		$	201		$	229		$	292
	Income (loss) from discontinued operations, net of taxes(b)			(7)			(17)			(13)
	Net income (loss) attributable to Key common shareholders			194			212			279

Per common share
	Income (loss) from continuing operations attributable to Key common shareholders		$	.21		$	.24		$	.33
	Income (loss) from discontinued operations, net of taxes(b)			(.01)			(.02)			(.02)
	Net income (loss) attributable to Key common shareholders			.20			.22			.32

	Income (loss) from continuing operations attributable to Key common shareholders - assuming dilution			.21			.24			.33
	Income (loss) from discontinued operations, net of taxes - assuming dilution(b)			(.01)			(.02)			(.02)
	Net income (loss) attributable to Key common shareholders - assuming dilution			.20			.22			.32

	Cash dividends paid			.03			.03			.01
	Book value at period end			10.09			10.09			9.52
	Tangible book value at period end			9.11			9.10			8.45
	Market price at period end			7.69			5.93			8.85

Performance ratios
	From continuing operations:
	Return on average total assets			1.01	%		1.14	%		1.53	%
	Return on average common equity			8.26			9.52			13.71
	Net interest margin (TE)			3.13			3.09			3.31

	From consolidated operations:
	Return on average total assets			.91	%		.98	%		1.36	%
	Return on average common equity			7.97			8.82			13.10
	Net interest margin (TE)			3.04			3.02			3.22
	Loan to deposit(d)			87.00			85.71			90.30

Capital ratios at period end
	Key shareholders' equity to assets			11.16	%		11.09	%		12.10	%
	Tangible Key shareholders' equity to tangible assets			10.21			10.15			11.20
	Tangible common equity to tangible assets (a)			9.88			9.82			8.19
	Tier 1 common equity(a), (c)			11.28			11.28			9.34
	Tier 1 risk-based capital(c)			13.01			13.49			15.16
	Total risk-based capital(c)			16.53			17.05			19.12
	Leverage(c)			11.70			11.93			13.02

Asset quality - from continuing operations
	Net loan charge-offs		$	105		$	109		$	256
	Net loan charge-offs to average loans			.86	%		.90	%		2.00	%
	Allowance for loan and lease losses		$	1,004		$	1,131		$	1,604
	Allowance for credit losses			1,049			1,187			1,677
	Allowance for loan and lease losses to period-end loans			2.03	%		2.35	%		3.20	%
	Allowance for credit losses to period-end loans			2.12			2.46			3.35
	Allowance for loan and lease losses to nonperforming loans			138.10			143.53			150.19
	Allowance for credit losses to nonperforming loans			144.29			150.63			157.02
	Nonperforming loans at period end		$	727		$	788		$	1,068
	Nonperforming assets at period end			859			914			1,338
	Nonperforming loans to period-end portfolio loans			1.47	%		1.64	%		2.13	%
	Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets			1.73			1.89			2.66

Trust and brokerage assets
	Assets under management		$	49,541		$	51,584		$	59,815
	Nonmanaged and brokerage assets			30,639			28,007			28,069

Other data
	Average full-time equivalent employees			15,381			15,490			15,424
	Branches			1,058			1,063			1,033

Taxable-equivalent adjustment			$	6		$	6		$	6


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

			Twelve months ended
			12-31-11			12-31-10
Summary of operations
	Net interest income (TE)		$	2,292		$	2,537
	Noninterest income			1,808			1,954
		Total revenue (TE)		4,100			4,491
	Provision (credit) for loan and lease losses			(60)			638
	Noninterest expense			2,790			3,034
	Income (loss) from continuing operations attributable to Key			964			577
	Income (loss) from discontinued operations, net of taxes(b)			(44)			(23)
	Net income (loss) attributable to Key			920			554

	Income (loss) from continuing operations attributable to Key common shareholders		$	857		$	413
	Income (loss) from discontinued operations, net of taxes(b)			(44)			(23)
	Net income (loss) attributable to Key common shareholders			813			390

Per common share
	Income (loss) from continuing operations attributable to Key common shareholders		$	.92		$	.47
	Income (loss) from discontinued operations, net of taxes (b)			(.05)			(.03)
	Net income (loss) attributable to Key common shareholders			.87			.45

	Income (loss) from continuing operations attributable to Key common shareholders - assuming dilution			.92			.47
	Income (loss) from discontinued operations, net of taxes - assuming dilution(b)			(.05)			(.03)
	Net income (loss) attributable to Key common shareholders - assuming dilution			.87			.44

	Cash dividends paid			.10			.04

Performance ratios
	From continuing operations:
	Return on average total assets			1.17	%		.66	%
	Return on average common equity			9.26			5.06
	Net interest margin (TE)			3.16			3.26

	From consolidated operations:
	Return on average total assets			1.04	%		.59	%
	Return on average common equity			8.79			4.78
	Net interest margin (TE)			3.09			3.16

Asset quality - from continuing operations
	Net loan charge-offs		$	541		$	1,570
	Net loan charge-offs to average loans			1.11	%		2.91	%

Other data
	Average full-time equivalent employees			15,381			15,610

Taxable-equivalent adjustment			$	25		$	26

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

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

(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).

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

GAAP to Non-GAAP Reconciliations

(dollars in millions, except per share amounts)

The table below presents the computations of certain financial measures related to "tangible common equity," "Tier 1 common equity" and "pre-provision net revenue." The tangible common equity ratio has become a focus of some investors, and management believes that this ratio may assist investors in analyzing Key's capital position absent the effects of intangible assets and preferred stock. Traditionally, the banking regulators have assessed bank and bank holding company capital adequacy based on both the amount and composition of capital, the calculation of which is prescribed in federal banking regulations. As a result of the Supervisory Capital Assessment Program, the Federal Reserve has focused its assessment of capital adequacy on a component of Tier 1 capital, known as Tier 1 common equity. Because the Federal Reserve has long indicated that voting common shareholders' equity (essentially Tier 1 capital less preferred stock, qualifying capital securities and noncontrolling interests in subsidiaries) generally should be the dominant element in Tier 1 capital, such a focus is consistent with existing capital adequacy guidelines and does not imply a new or ongoing capital standard. Because Tier 1 common equity is neither formally defined by GAAP nor prescribed in amount by federal banking regulations, this measure is considered to be a non-GAAP financial measure. Since analysts and banking regulators may assess Key's capital adequacy using tangible common equity and Tier 1 common equity, management believes it is useful to provide investors the ability to assess Key's capital adequacy on these same bases. The table also reconciles the GAAP performance measures to the corresponding non-GAAP measures.

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.

Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited. To mitigate these limitations, Key has procedures in place to ensure that these measures are calculated using the appropriate GAAP or regulatory components, and to ensure that Key's performance is properly reflected to facilitate period-to-period comparisons. Although these non-GAAP financial measures are frequently used by investors 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
			12-31-11			9-30-11			12-31-10
Tangible common equity to tangible assets at period end
	Key shareholders' equity (GAAP)		$	9,905		$	9,901		$	11,117
	Less:	Intangible assets		934			935			938
		Preferred Stock, Series B		-			-			2,446
		Preferred Stock, Series A		291			291			291
		Tangible common equity (non-GAAP)	$	8,680		$	8,675		$	7,442

	Total assets (GAAP)		$	88,785		$	89,262		$	91,843
	Less:	Intangible assets		934			935			938
		Tangible assets (non-GAAP)	$	87,851		$	88,327		$	90,905

	Tangible common equity to tangible assets ratio (non-GAAP)			9.88	%		9.82	%		8.19	%

Tier 1 common equity at period end
	Key shareholders' equity (GAAP)		$	9,905		$	9,901		$	11,117
	Qualifying capital securities			1,046			1,377			1,791
	Less:	Goodwill		917			917			917
		Accumulated other comprehensive income (loss)(a)		(72)			88			(66)
		Other assets(b)		72			72			248
		Total Tier 1 capital (regulatory)		10,034			10,201			11,809
	Less:	Qualifying capital securities		1,046			1,377			1,791
		Preferred Stock, Series B		-			-			2,446
		Preferred Stock, Series A		291			291			291
		Total Tier 1 common equity (non-GAAP)	$	8,697		$	8,533		$	7,281

	Net risk-weighted assets (regulatory)(b), (c)		$	77,125		$	75,643		$	77,921

	Tier 1 common equity ratio (non-GAAP)(c)			11.28	%		11.28	%		9.34	%

Pre-provision net revenue
	Net interest income (GAAP)		$	557		$	549		$	629
	Plus:	Taxable-equivalent adjustment		6			6			6
		Noninterest income		414			483			526
	Less:	Noninterest expense		717			692			744
	Pre-provision net revenue from continuing operations (non-GAAP)		$	260		$	346		$	417

(a) Includes net unrealized gains or losses on securities available for sale (except for net unrealized losses on marketable equity securities), net gains or losses on cash flow hedges, and amounts resulting from the December 31, 2006 adoption and subsequent application of the applicable accounting guidance for defined benefit and other postretirement plans.

(b) Other assets deducted from Tier 1 capital and net risk-weighted assets consist of disallowed deferred tax assets of $158 million at December 31, 2010, disallowed intangible assets (excluding goodwill) and deductible portions of nonfinancial equity investments. There were no disallowed deferred tax assets at December 31, 2011 and September 30, 2011.

GAAP = U.S. generally accepted accounting principles


Consolidated Balance Sheets
(dollars in millions)

			12-31-11		9-30-11		12-31-10
Assets
	Loans		$	49,575	$	48,195	$	50,107
	Loans held for sale			728		479		467
	Securities available for sale			16,012		17,612		21,933
	Held-to-maturity securities			2,109		1,176		17
	Trading account assets			623		729		985
	Short-term investments			3,519		4,766		1,344
	Other investments			1,163		1,210		1,358
		Total earning assets		73,729		74,167		76,211
	Allowance for loan and lease losses			(1,004)		(1,131)		(1,604)
	Cash and due from banks			694		828		278
	Premises and equipment			944		924		908
	Operating lease assets			350		393		509
	Goodwill			917		917		917
	Other intangible assets			17		18		21
	Corporate-owned life insurance			3,256		3,227		3,167
	Derivative assets			945		940		1,006
	Accrued income and other assets			3,077		2,946		3,876
	Discontinued assets			5,860		6,033		6,554
		Total assets	$	88,785	$	89,262	$	91,843

Liabilities
	Deposits in domestic offices:
		NOW and money market deposit accounts	$	27,954	$	27,548	$	27,066
		Savings deposits		1,962		1,968		1,879
		Certificates of deposit ($100,000 or more)		4,111		4,457		5,862
		Other time deposits		6,243		6,695		8,245
		Total interest-bearing deposits		40,270		40,668		43,052
		Noninterest-bearing deposits		21,098		19,803		16,653
	Deposits in foreign office - interest-bearing			588		561		905
		Total deposits		61,956		61,032		60,610
	Federal funds purchased and securities sold under repurchase agreements			1,711		1,728		2,045
	Bank notes and other short-term borrowings			337		519		1,151
	Derivative liabilities			1,026		1,141		1,142
	Accrued expense and other liabilities			1,763		1,556		1,931
	Long-term debt			9,520		10,717		10,592
	Discontinued liabilities			2,550		2,651		2,998
		Total liabilities		78,863		79,344		80,469

Equity
	Preferred stock, Series A			291		291		291
	Preferred stock, Series B			-		-		2,446
	Common shares			1,017		1,017		946
	Common stock warrant			-		-		87
	Capital surplus			4,194		4,191		3,711
	Retained earnings			6,246		6,079		5,557
	Treasury stock, at cost			(1,815)		(1,820)		(1,904)
	Accumulated other comprehensive income (loss)			(28)		143		(17)
		Key shareholders' equity		9,905		9,901		11,117
	Noncontrolling interests			17		17		257
		Total equity		9,922		9,918		11,374
Total liabilities and equity			$	88,785	$	89,262	$	91,843

Common shares outstanding (000)				953,008		952,808		880,608


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

			Three months ended						Twelve months ended
			12-31-11		9-30-11		12-31-10		12-31-11		12-31-10
Interest income
	Loans		$	542	$	543	$	617	$	2,206	$	2,653
	Loans held for sale			4		3		4		14		17
	Securities available for sale			128		140		170		583		644
	Held-to-maturity securities			9		2		-		12		2
	Trading account assets			5		5		8		26		37
	Short-term investments			1		3		1		6		6
	Other investments			9		9		11		42		49
		Total interest income		698		705		811		2,889		3,408

Interest expense
	Deposits			85		95		124		390		671
	Federal funds purchased and securities sold under repurchase agreements			1		1		2		5		6
	Bank notes and other short-term borrowings			2		3		3		11		14
	Long-term debt			53		57		53		216		206
		Total interest expense		141		156		182		622		897

Net interest income				557		549		629		2,267		2,511
Provision (credit) for loan and lease losses				(22)		10		(97)		(60)		638
Net interest income (expense) after provision for loan and lease losses				579		539		726		2,327		1,873

Noninterest income
	Trust and investment services income			104		107		108		434		444
	Service charges on deposit accounts			70		74		70		281		301
	Operating lease income			25		30		42		122		173
	Letter of credit and loan fees			56		55		51		213		194
	Corporate-owned life insurance income			35		31		42		121		137
	Net securities gains (losses) (a)			-		-		12		1		14
	Electronic banking fees			18		33		31		114		117
	Gains on leased equipment			9		7		6		25		20
	Insurance income			11		13		12		53		64
	Net gains (losses) from loan sales			27		18		29		75		76
	Net gains (losses) from principal investing			(8)		34		(6)		78		66
	Investment banking and capital markets income (loss)			24		25		63		134		145
	Other income			43		56		66		157		203
		Total noninterest income		414		483		526		1,808		1,954

Noninterest expense
	Personnel			387		382		365		1,520		1,471
	Net occupancy			66		65		70		258		270
	Operating lease expense			18		23		28		94		142
	Computer processing			42		40		45		166		185
	Business services and professional fees			57		47		56		186		176
	FDIC assessment			7		7		27		52		124
	OREO expense, net			5		1		10		13		68
	Equipment			25		26		26		103		100
	Marketing			24		16		22		60		72
	Provision (credit) for losses on lending-related commitments			(11)		(1)		(26)		(28)		(48)
	Other expense			97		86		121		366		474
		Total noninterest expense		717		692		744		2,790		3,034
Income (loss) from continuing operations before income taxes				276		330		508		1,345		793
	Income taxes			69		95		172		369		186
Income (loss) from continuing operations				207		235		336		976		607
	Income (loss) from discontinued operations, net of taxes			(7)		(17)		(13)		(44)		(23)
Net income (loss)				200		218		323		932		584
	Less: Net income (loss) attributable to noncontrolling interests			-		1		3		12		30
Net income (loss) attributable to Key			$	200	$	217	$	320	$	920	$	554

Income (loss) from continuing operations attributable to Key common shareholders			$	201	$	229	$	292	$	857	$	413
Net income (loss) attributable to Key common shareholders				194		212		279		813		390

Per common share
Income (loss) from continuing operations attributable to Key common shareholders			$	.21	$	.24	$	.33	$	.92	$	.47
Income (loss) from discontinued operations, net of taxes				(.01)		(.02)		(.02)		(.05)		(.03)
Net income (loss) attributable to Key common shareholders				.20		.22		.32		.87		.45

Per common share - assuming dilution
Income (loss) from continuing operations attributable to Key common shareholders			$	.21	$	.24	$	.33	$	.92	$	.47
Income (loss) from discontinued operations, net of taxes				(.01)		(.02)		(.02)		(.05)		(.03)
Net income (loss) attributable to Key common shareholders				.20		.22		.32		.87		.44

Cash dividends declared per common share			$	.03	$	.03	$	.01	$	.10	$	.04

Weighted-average common shares outstanding (000)				948,658		948,702		875,501		931,934		874,748
Weighted-average common shares and potential common shares outstanding (000)(b)				951,684		950,686		900,263		935,801		878,153

(a) For the three months ended December 31, 2011, September 30, 2011, and December 31, 2010, Key did not have any impairment losses related to securities.

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


Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations
(dollars in millions)
			Fourth Quarter 2011								Third Quarter 2011								Fourth Quarter 2010
			Average Balance								Average Balance								Average Balance
			Average Balance		Interest		(a)	Yield/Rate		(a)		Interest	(a)	Yield/Rate	(a)			Interest		(a)	Yield/Rate		(a)
Assets
	Loans:(b), (c)
	Commercial, financial and agricultural		$	18,323	$	179			3.88	%	$	17,381	$	175		3.98	%		$	16,562		$	189	4.51	%
	Real estate - commercial mortgage			8,090		92			4.48			7,978		89		4.47				9,514			117	4.89
	Real estate - construction			1,380		16			4.68			1,545		18		4.46				2,531			26	4.15
	Commercial lease financing			5,982		69			4.62			6,045		72		4.80				6,484			82	5.08
		Total commercial loans		33,775		356			4.19			32,949		354		4.27				35,091			414	4.69
	Real estate - residential mortgage			1,918		24			5.15			1,853		25		5.23				1,837			25	5.43
	Home equity:
		Key Community Bank		9,280		96			4.10			9,388		97		4.12				9,583			101	4.16
		Other		553		11			7.68			582		11		7.69				686			13	7.58
		Total home equity loans		9,833		107			4.30			9,970		108		4.33				10,269			114	4.39
	Consumer other - Key Community Bank			1,191		30			9.62			1,169		28		9.60				1,170			30	10.38
	Consumer other:
		Marine		1,820		29			6.35			1,928		30		6.29				2,295			36	6.30
		Other		127		2			7.87			139		3		7.89				167			3	7.98
		Total consumer other		1,947		31			6.44			2,067		33		6.40				2,462			39	6.41
		Total consumer loans		14,889		192			5.12			15,059		194		5.14				15,738			208	5.27
		Total loans		48,664		548			4.47			48,008		548		4.54				50,829			622	4.87
	Loans held for sale			440		4			3.36			341		3		3.75				403			4	3.16
	Securities available for sale(b), (e)			16,790		128			3.16			18,165		141		3.16				21,257			171	3.27
	Held-to-maturity securities(b)			1,648		9			2.12			354		2		2.59				17			-	11.92
	Trading account assets			736		5			2.72			869		5		2.45				967			8	3.22
	Short-term investments			2,929		1			.26			3,348		3		.25				2,521			1	.22
	Other investments (e)			1,181		9			2.98			1,190		9		2.94				1,400			11	2.86
		Total earning assets		72,388		704			3.90			72,275		711		3.93				77,394			817	4.22
	Allowance for loan and lease losses			(1,057)								(1,176)								(1,789)
	Accrued income and other assets			9,942								10,360								11,025
	Discontinued assets - education lending business			5,912								6,079								6,674
		Total assets	$	87,185							$	87,538							$	93,304

Liabilities
	NOW and money market deposit accounts		$	27,722		15			.22		$	26,917		18		.26			$	27,047			21	.30
	Savings deposits			1,964		-			.06			1,980		-		.06				1,873			-	.06
	Certificates of deposit ($100,000 or more)(f)			4,275		32			2.97			4,762		36		3.03				6,341			49	3.05
	Other time deposits			6,505		37			2.24			6,942		40		2.28				8,664			53	2.43
	Deposits in foreign office			650		1			.25			675		1		.28				1,228			1	.32
		Total interest-bearing deposits		41,116		85			.82			41,276		95		.91				45,153			124	1.09
	Federal funds purchased and securitiessold under repurchase agreements			1,747		1			.25			1,724		1		.28				2,236			2	.31
	Bank notes and other short-term borrowings			471		2			1.87			598		3		1.85				480			3	2.77
	Long-term debt (f), (g)			7,020		53			3.21			7,777		57		3.14				7,525			53	3.02
		Total interest-bearing liabilities		50,354		141			1.12			51,375		156		1.21				55,394			182	1.31
	Noninterest-bearing deposits			18,464								17,624								16,841
	Accrued expense and other liabilities			2,496								2,612								2,965
	Discontinued liabilities - education lending business (d), (g)			5,912								6,079								6,674
		Total liabilities		77,226								77,690								81,874

Equity
	Key shareholders' equity			9,943								9,831								11,183
	Noncontrolling interests			16								17								247
		Total equity		9,959								9,848								11,430

		Total liabilities and equity	$	87,185							$	87,538							$	93,304

Interest rate spread (TE)									2.78	%						2.72	%							2.91	%

Net interest income (TE) and net interest margin (TE)						563			3.13	%				555		3.09	%						635	3.31	%
TE adjustment(b)						6								6									6
	Net interest income, GAAP basis				$	557							$	549								$	629

(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%.

(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.

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


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


			Twelve months ended December 31, 2011								Twelve months ended December 31, 2010
			Average Balance		Interest		(a)	Yield/Rate		(a)	Average Balance		Interest		(a)	Yield/ Rate		(a)
Assets
	Loans:(b), (c)
	Commercial, financial and agricultural		$	17,240	$	702			4.07	%	$	17,500	$	813			4.64	%
	Real estate - commercial mortgage			8,437		380			4.50			10,027		491			4.90
	Real estate - construction			1,677		73			4.36			3,495		149			4.26
	Commercial lease financing			6,113		296			4.85			6,754		352			5.21
		Total commercial loans		33,467		1,451			4.34			37,776		1,805			4.78
	Real estate - residential mortgage			1,850		97			5.25			1,828		102			5.57
	Home equity:
		Key Community Bank		9,390		387			4.12			9,773		411			4.20
		Other		598		46			7.66			751		57			7.59
	Total home equity loans			9,988		433			4.34			10,524		468			4.45
	Consumer other - Key Community Bank			1,167		113			9.62			1,158		132			11.44
	Consumer other:
		Marine		1,992		125			6.28			2,497		155			6.23
		Other		142		11			7.87			188		15			7.87
		Total consumer other		2,134		136			6.38			2,685		170			6.34
	Total consumer loans			15,139		779			5.14			16,195		872			5.39
	Total loans			48,606		2,230			4.59			53,971		2,677			4.96
	Loans held for sale			387		14			3.58			453		17			3.62
	Securities available for sale (b), (e)			18,766		584			3.20			18,800		646			3.50
	Held-to-maturity securities (b)			514		12			2.35			20		2			10.56
	Trading account assets			878		26			2.97			1,068		37			3.47
	Short-term investments			2,543		6			.25			2,684		6			.24
	Other investments (e)			1,264		42			3.14			1,442		49			3.08
	Total earning assets			72,958		2,914			4.02			78,438		3,434			4.39
	Allowance for loan and lease losses			(1,250)								(2,207)
	Accrued income and other assets			10,385								11,243
	Discontinued assets - education lending business			6,203								6,677
	Total assets		$	88,296							$	94,151

Liabilities
	NOW and money market deposit accounts		$	27,001		71			.26		$	25,712		91			.35
	Savings deposits			1,958		1			.06			1,867		1			.06
	Certificates of deposit ($100,000 or more) (f)			4,931		149			3.02			8,486		275			3.24
	Other time deposits			7,185		166			2.31			10,545		301			2.86
	Deposits in foreign office			807		3			.30			926		3			.34
		Total interest-bearing deposits		41,882		390			.93			47,536		671			1.41
	Federal funds purchased and securitiessold under repurchase agreements			1,981		5			.27			2,044		6			.31
	Bank notes and other short-term borrowings			619		11			1.84			545		14			2.63
	Long-term debt(f), (g)			7,293		216			3.18			7,211		206			3.09
		Total interest-bearing liabilities		51,775		622			1.21			57,336		897			1.58
	Noninterest-bearing deposits			17,381								15,856
	Accrued expense and other liabilities			2,687								3,131
	Discontinued liabilities - education lending business(d), (g)			6,203								6,677
	Total liabilities			78,046								83,000

Equity
	Key shareholders' equity			10,133								10,895
	Noncontrolling interests			117								256
	Total equity			10,250								11,151

	Total liabilities and equity		$	88,296							$	94,151

Interest rate spread (TE)									2.81	%							2.81	%

Net interest income (TE) and net interest margin (TE)						2,292			3.16	%				2,537			3.26	%
TE adjustment (b)						25								26
	Net interest income, GAAP basis				$	2,267							$	2,511

(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%.

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

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

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


Noninterest Income
(in millions)

	Three months ended						Twelve months ended
	12-31-11		9-30-11		12-31-10		12-31-11		12-31-10
Trust and investment services income(a)	$	104	$	107	$	108	$	434	$	444
Service charges on deposit accounts		70		74		70		281		301
Operating lease income		25		30		42		122		173
Letter of credit and loan fees		56		55		51		213		194
Corporate-owned life insurance income		35		31		42		121		137
Net securities gains (losses)		-		-		12		1		14
Electronic banking fees		18		33		31		114		117
Gains on leased equipment		9		7		6		25		20
Insurance income		11		13		12		53		64
Net gains (losses) from loan sales		27		18		29		75		76
Net gains (losses) from principal investing		(8)		34		(6)		78		66
Investment banking and capital markets income (loss) (a)		24		25		63		134		145
Other income		43		56		66		157		203
Total noninterest income	$	414	$	483	$	526	$	1,808	$	1,954

(a) Additional detail provided in tables below.


Trust and Investment Services Income
(in millions)
	Three months ended						Twelve months ended
	12-31-11		9-30-11		12-31-10		12-31-11		12-31-10
Brokerage commissions and fee income	$	33	$	34	$	32	$	132	$	134
Personal asset management and custody fees		38		37		38		153		149
Institutional asset management and custody fees		33		36		38		149		161
Total trust and investment services income	$	104	$	107	$	108	$	434	$	444


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

	Three months ended						Twelve months ended
	12-31-11		9-30-11		12-31-10		12-31-11		12-31-10
Investment banking income	$	25	$	16	$	33	$	92	$	112
Income (loss) from other investments		3		6		-		21		6
Dealer trading and derivatives income (loss)		(15)		(8)		18		(22)		(16)
Foreign exchange income		11		11		12		43		43
Total investment banking and capital markets income (loss)	$	24	$	25	$	63	$	134	$	145


Noninterest Expense
(dollars in millions)

	Three months ended						Twelve months ended
	12-31-11		9-30-11		12-31-10		12-31-11		12-31-10
Personnel(a)	$	387	$	382	$	365	$	1,520	$	1,471
Net occupancy		66		65		70		258		270
Operating lease expense		18		23		28		94		142
Computer processing		42		40		45		166		185
Business services and professional fees		57		47		56		186		176
FDIC assessment		7		7		27		52		124
OREO expense, net		5		1		10		13		68
Equipment		25		26		26		103		100
Marketing		24		16		22		60		72
Provision (credit) for losses on lending-related commitments		(11)		(1)		(26)		(28)		(48)
Other expense		97		86		121		366		474
Total noninterest expense	$	717	$	692	$	744	$	2,790	$	3,034

Average full-time equivalent employees(b)		15,381		15,490		15,424		15,381		15,610

(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						Twelve months ended
	12-31-11		9-30-11		12-31-10		12-31-11		12-31-10
Salaries	$	234	$	233	$	232	$	919	$	913
Incentive compensation		82		78		85		306		266
Employee benefits		55		54		34		229		224
Stock-based compensation		13		11		11		45		52
Severance		3		6		3		21		16
Total personnel expense	$	387	$	382	$	365	$	1,520	$	1,471


Loan Composition
(dollars in millions)

									Percent change 12-31-11 vs.
			12-31-11		9-30-11		12-31-10		9-30-11			12-31-10
Commercial, financial and agricultural			$	19,378	$	17,848	$	16,441		8.6	%		17.9	%
Commercial real estate:
	Commercial mortgage			8,037		7,958		9,502		1.0			(15.4)
	Construction			1,312		1,456		2,106		(9.9)			(37.7)
	Total commercial real estate loans			9,349		9,414		11,608		(.7)			(19.5)
Commercial lease financing				6,055		5,957		6,471		1.6			(6.4)
	Total commercial loans			34,782		33,219		34,520		4.7			.8
Residential - prime loans:
	Real estate - residential mortgage			1,946		1,875		1,844		3.8			5.5
	Home equity:
		Key Community Bank		9,229		9,347		9,514		(1.3)			(3.0)
		Other		535		565		666		(5.3)			(19.7)
	Total home equity loans			9,764		9,912		10,180		(1.5)			(4.1)
Total residential - prime loans				11,710		11,787		12,024		(.7)			(2.6)
Consumer other - Key Community Bank				1,192		1,187		1,167		.4			2.1
Consumer other:
	Marine			1,766		1,871		2,234		(5.6)			(20.9)
	Other			125		131		162		(4.6)			(22.8)
	Total consumer - indirect loans			1,891		2,002		2,396		(5.5)			(21.1)
	Total consumer loans			14,793		14,976		15,587		(1.2)			(5.1)
	Total loans(a)		$	49,575	$	48,195	$	50,107		2.9	%		(1.1)	%



Loans Held for Sale Composition
(dollars in millions)

									Percent change 12-31-11 vs.
			12-31-11		9-30-11		12-31-10		9-30-11			12-31-10
Commercial, financial and agricultural			$	19	$	29	$	196		(34.5)	%		(90.3)	%
Real estate - commercial mortgage				567		325		118		74.5			380.5
Real estate - construction				35		20		35		75.0			-
Commercial lease financing				12		26		8		(53.8)			50.0
Real estate - residential mortgage				95		79		110		20.3			(13.6)
	Total loans held for sale(b)		$	728	$	479	$	467		52.0	%		55.9	%



Summary of Changes in Loans Held for Sale
(dollars in millions)

			4Q11		3Q11		2Q11		1Q11			4Q10
Balance at beginning of period			$	479	$	381	$	426	$	467		$	637
	New originations			1,235		853		914		980			1,053
	Transfers from held to maturity, net			19		23		16		32			-
	Loan sales			(932)		(759)		(1,039)		(991)			(1,174)
	Loan draws (payments), net			(72)		1		73		(62)			(49)
	Transfers to OREO / valuation adjustments			(1)		(20)		(9)		-			-
Balance at end of period			$	728	$	479	$	381	$	426		$	467

(a) Excluded at December 31, 2011, September 30, 2011, and December 31, 2010, are loans in the amount of $5.8 billion, $6.0 billion, and $6.5 billion, respectively, related to the discontinued operations of the education lending business.

(b) Excluded at December 31, 2010, are loans held for sale in the amount of $15 million related to the discontinued operations of the education lending business. There were no loans held for sale in the discontinued operations of the education lending business at December 31, 2011, and September 30, 2011.


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

	Three months ended									Twelve months ended
	12-31-11			9-30-11			12-31-10			12-31-11			12-31-10
Average loans outstanding	$	48,664		$	48,008		$	50,829		$	48,606		$	53,971

Allowance for loan and lease losses at beginning of period	$	1,131		$	1,230		$	1,957		$	1,604		$	2,534
Loans charged off:
Commercial, financial and agricultural		45			31			104			169			565

Real estate - commercial mortgage		24			27			73			113			360
Real estate - construction		2			19			49			83			380
Total commercial real estate loans		26			46			122			196			740
Commercial lease financing		6			10			20			42			88
Total commercial loans		77			87			246			407			1,393
Real estate - residential mortgage		7			5			11			29			36
Home equity:
Key Community Bank		22			25			28			100			123
Other		10			9			13			45			62
Total home equity loans		32			34			41			145			185
Consumer other - Key Community Bank		11			11			16			45			64
Consumer other:
Marine		20			18			25			80			129
Other		2			2			4			9			15
Total consumer other		22			20			29			89			144
Total consumer loans		72			70			97			308			429
Total loans charged off		149			157			343			715			1,822
Recoveries:
Commercial, financial and agricultural		17			8			24			50			87

Real estate - commercial mortgage		1			2			21			10			30
Real estate - construction		8			11			21			27			44
Total commercial real estate loans		9			13			42			37			74
Commercial lease financing		6			8			8			25			25
Total commercial loans		32			29			74			112			186
Real estate - residential mortgage		-			1			-			3			2
Home equity:
Key Community Bank		2			7			2			11			7
Other		1			1			-			4			3
Total home equity loans		3			8			2			15			10
Consumer other - Key Community Bank		2			2			2			8			7
Consumer other:
Marine		6			7			8			32			43
Other		1			1			1			4			4
Total consumer other		7			8			9			36			47
Total consumer loans		12			19			13			62			66
Total recoveries		44			48			87			174			252
Net loan charge-offs		(105)			(109)			(256)			(541)			(1,570)
Provision (credit) for loan and lease losses		(22)			10			(97)			(60)			638
Foreign currency translation adjustment		-			-			-			1			2
Allowance for loan and lease losses at end of period	$	1,004		$	1,131		$	1,604		$	1,004		$	1,604

Liability for credit losses on lending-related commitments at beginning of period	$	56		$	57		$	99		$	73		$	121
Provision (credit) for losses on lending-related commitments		(11)			(1)			(26)			(28)			(48)
Liability for credit losses on lending-related commitments at end of period(a)	$	45		$	56		$	73		$	45		$	73

Total allowance for credit losses at end of period	$	1,049		$	1,187		$	1,677		$	1,049		$	1,677

Net loan charge-offs to average loans		.86	%		.90	%		2.00	%		1.11	%		2.91	%
Allowance for loan and lease losses to period-end loans		2.03			2.35			3.20			2.03			3.20
Allowance for credit losses to period-end loans		2.12			2.46			3.35			2.12			3.35
Allowance for loan and lease losses to nonperforming loans		138.10			143.53			150.19			138.10			150.19
Allowance for credit losses to nonperforming loans		144.29			150.63			157.02			144.29			157.02

Discontinued operations - education lending business:
Loans charged off	$	31		$	34		$	34		$	138		$	129
Recoveries		6			3			2			15			8
Net loan charge-offs	$	(25)		$	(31)		$	(32)		$	(123)		$	(121)

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


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

	12-31-11			9-30-11			6-30-11			3-31-11			12-31-10
Commercial, financial and agricultural	$	188		$	188		$	213		$	221		$	242

Real estate - commercial mortgage		218			237			230			245			255
Real estate - construction		54			93			131			146			241
Total commercial real estate loans		272			330			361			391			496
Commercial lease financing		27			31			41			42			64
Total commercial loans		487			549			615			654			802
Real estate - residential mortgage		87			88			79			84			98
Home equity:
Key Community Bank		108			102			101			99			102
Other		12			12			11			13			18
Total home equity loans		120			114			112			112			120
Consumer other - Key Community Bank		1			4			3			3			4
Consumer other:
Marine		31			32			32			31			42
Other		1			1			1			1			2
Total consumer other		32			33			33			32			44
Total consumer loans		240			239			227			231			266
Total nonperforming loans		727			788			842			885			1,068
Nonperforming loans held for sale		46			42			42			86			106
OREO		65			63			52			97			129
Other nonperforming assets		21			21			14			21			35
Total nonperforming assets	$	859		$	914		$	950		$	1,089		$	1,338

Accruing loans past due 90 days or more	$	164		$	118		$	118		$	153		$	239
Accruing loans past due 30 through 89 days		441			478			465			474			476
Restructured loans - accruing and nonaccruing(a)		276			277			252			242			297
Restructured loans included in nonperforming loans(a)		191			178			144			136			202
Nonperforming assets from discontinued operations - education lending business		23			22			21			22			40
Nonperforming loans to period-end portfolio loans		1.47	%		1.64	%		1.76	%		1.82	%		2.13	%
Nonperforming assets to period-end portfolio loansplus OREO and other nonperforming assets		1.73			1.89			1.98			2.23			2.66


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

	4Q11		3Q11		2Q11		1Q11		4Q10
Balance at beginning of period	$	788	$	842	$	885	$	1,068	$	1,372
Loans placed on nonaccrual status		230		292		410		335		544
Charge-offs		(149)		(157)		(177)		(232)		(343)
Loans sold		(28)		(16)		(11)		(74)		(162)
Payments		(70)		(125)		(156)		(114)		(250)
Transfers to OREO		(12)		(11)		(6)		(12)		(14)
Transfers to nonperforming loans held for sale		(19)		(24)		(15)		(39)		(41)
Transfers to other nonperforming assets		(4)		(3)		-		(2)		(3)
Loans returned to accrual status		(9)		(10)		(88)		(45)		(35)
Balance at end of period	$	727	$	788	$	842	$	885	$	1,068




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

	4Q11		3Q11		2Q11		1Q11		4Q10
Balance at beginning of period	$	42	$	42	$	86	$	106	$	230
Transfers in		19		24		15		39		41
Net advances / (payments)		(3)		(5)		(13)		(20)		(26)
Loans sold		(11)		(5)		(37)		(38)		(139)
Transfers to OREO		(1)		(19)		(5)		-		-
Valuation adjustments		-		(1)		(4)		(1)		-
Loans returned to accrual status / other		-		6		-		-		-
Balance at end of period	$	46	$	42	$	42	$	86	$	106




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

	4Q11		3Q11		2Q11		1Q11		4Q10
Balance at beginning of period	$	63	$	52	$	97	$	129	$	163
Properties acquired - nonperforming loans		13		30		11		12		14
Valuation adjustments		(4)		(3)		(7)		(11)		(9)
Properties sold		(7)		(16)		(49)		(33)		(39)
Balance at end of period	$	65	$	63	$	52	$	97	$	129


Line of Business Results
(dollars in millions)

Key Community Bank
																Percent change 4Q11 vs.
	4Q11			3Q11			2Q11			1Q11			4Q10			3Q11			4Q10
Summary of operations
Total revenue (TE)	$	546		$	565		$	559		$	565		$	597			(3.4)	%		(8.5)	%
Provision (credit) for loan and lease losses		30			39			79			11			74			(23.1)			(59.5)
Noninterest expense		477			456			447			446			457			4.6			4.4
Net income (loss) attributable to Key		40			58			34			81			58			(31.0)			(31.0)
Average loans and leases		26,406			26,270			26,242			26,312			26,436			.5			(.1)
Average deposits		48,076			47,672			47,719			48,108			48,124			.8			(.1)
Net loan charge-offs		71			60			79			76			115			18.3			(38.3)
Net loan charge-offs to average loans		1.07	%		.91	%		1.21	%		1.17	%		1.73	%		N/A			N/A
Nonperforming assets at period end	$	415		$	439		$	455		$	475		$	497			(5.5)			(16.5)
Return on average allocated equity		5.14	%		7.37	%		4.28	%		10.07	%		6.83	%		N/A			N/A
Average full-time equivalent employees		8,633			8,641			8,504			8,378			8,291			(.1)			4.1


Supplementary information (lines of business)
Regional Banking
Total revenue (TE)	$	430		$	448		$	449		$	448		$	470			(4.0)	%		(8.5)	%
Provision (credit) for loan and lease losses		54			48			63			17			77			12.5			(29.9)
Noninterest expense		429			407			398			400			413			5.4			3.9
Net income (loss) attributable to Key		(18)			10			6			33			4			(280.0)			(550.0)
Average loans and leases		17,360			17,407			17,495			17,597			17,810			(.3)			(2.5)
Average deposits		41,226			41,204			41,710			42,189			42,371			.1			(2.7)
Net loan charge-offs		59			53			65			62			77			11.3			(23.4)
Net loan charge-offs to average loans		1.35	%		1.21	%		1.49	%		1.43	%		1.72	%		N/A			N/A
Nonperforming assets at period end	$	287		$	292		$	302		$	294		$	326			(1.7)			(12.0)
Return on average allocated equity		(3.27)	%		1.80	%		1.08	%		5.96	%		.69	%		N/A			N/A
Average full-time equivalent employees		8,258			8,275			8,138			8,009			7,930			(.2)			4.1

Commercial Banking
Total revenue (TE)	$	116		$	117		$	110		$	117		$	127			(.9)	%		(8.7)	%
Provision (credit) for loan and lease losses		(24)			(9)			16			(6)			(3)			N/M			N/M
Noninterest expense		48			49			49			46			44			(2.0)			9.1
Net income (loss) attributable to Key		58			48			28			48			54			20.8			7.4
Average loans and leases		9,046			8,863			8,747			8,715			8,626			2.1			4.9
Average deposits		6,850			6,468			6,009			5,919			5,753			5.9			19.1
Net loan charge-offs		12			7			14			14			38			71.4			(68.4)
Net loan charge-offs to average loans		.53	%		.31	%		.64	%		.65	%		1.75	%		N/A			N/A
Nonperforming assets at period end	$	128		$	147		$	153		$	181		$	171			(12.9)			(25.1)
Return on average allocated equity		25.51	%		20.59	%		11.72	%		19.20	%		19.86	%		N/A			N/A
Average full-time equivalent employees		375			366			366			369			361			2.5			3.9


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

Key Corporate Bank
																Percent change 4Q11 vs.
	4Q11			3Q11			2Q11			1Q11			4Q10			3Q11			4Q10
Summary of operations
Total revenue (TE)	$	411		$	368		$	388		$	403		$	434			11.7	%		(5.3)	%
Provision (credit) for loan and lease losses		(61)			(40)			(76)			(21)			(263)			N/M			N/M
Noninterest expense		227			216			206			228			240			5.1			(5.4)
Net income (loss) attributable to Key		156			122			163			125			289			27.9			(46.0)
Average loans and leases		17,783			16,985			17,168			17,677			18,602			4.7			(4.4)
Average loans held for sale		356			273			302			275			253			30.4			40.7
Average deposits		11,162			10,544			10,195			11,282			12,766			5.9			(12.6)
Net loan charge-offs		12			22			29			75			61			(45.5)			(80.3)
Net loan charge-offs to average loans		.27	%		.51	%		.68	%		1.72	%		1.30	%		N/A			N/A
Nonperforming assets at period end	$	294		$	326		$	339		$	427		$	575			(9.8)			(48.9)
Return on average allocated equity		30.43	%		22.54	%		28.61	%		19.82	%		41.07	%		N/A			N/A
Average full-time equivalent employees		2,286			2,288			2,191			2,155			2,169			(.1)			5.4


Supplementary information (lines of business)
Real Estate Capital and Corporate Banking Services
Total revenue (TE)	$	175		$	144		$	154		$	165		$	177			21.5	%		(1.1)	%
Provision (credit) for loan and lease losses		(31)			(38)			(49)			9			(211)			N/M			N/M
Noninterest expense		63			65			49			69			83			(3.1)			(24.1)
Net income (loss) attributable to Key		90			74			96			56			192			21.6			(53.1)
Average loans and leases		7,445			7,088			7,713			8,583			9,381			5.0			(20.6)
Average loans held for sale		216			173			229			140			199			24.9			8.5
Average deposits		7,643			7,286			7,371			8,611			10,409			4.9			(26.6)
Net loan charge-offs		10			19			26			65			57			(47.4)			(82.5)
Net loan charge-offs to average loans		.53	%		1.06	%		1.35	%		3.07	%		2.41	%		N/A			N/A
Nonperforming assets at period end	$	209		$	240		$	245		$	334		$	442			(12.9)			(52.7)
Return on average allocated equity		35.04	%		26.47	%		31.36	%		15.42	%		46.14	%		N/A			N/A
Average full-time equivalent employees		953			942			902			882			889			1.2			7.2

Equipment Finance
Total revenue (TE)	$	62		$	68		$	63		$	63		$	66			(8.8)	%		(6.1)	%
Provision (credit) for loan and lease losses		(15)			(8)			(30)			(26)			(16)			N/M			N/M
Noninterest expense		48			45			45			52			52			6.7			(7.7)
Net income (loss) attributable to Key		18			20			30			23			19			(10.0)			(5.3)
Average loans and leases		4,680			4,619			4,545			4,621			4,656			1.3			.5
Average loans held for sale		10			7			-			4			-			42.9			N/M
Average deposits		9			11			12			6			2			(18.2)			350.0
Net loan charge-offs		(1)			(1)			2			10			7			-			(114.3)
Net loan charge-offs to average loans		(.08)	%		(.09)	%		.18	%		.88	%		.60	%		N/A			N/A
Nonperforming assets at period end	$	41		$	31		$	39		$	44		$	68			32.3			(39.7)
Return on average allocated equity		24.80	%		25.76	%		37.96	%		28.53	%		22.04	%		N/A			N/A
Average full-time equivalent employees		517			511			511			521			529			1.2			(2.3)

Institutional and Capital Markets
Total revenue (TE)	$	174		$	156		$	171		$	175		$	191			11.5	%		(8.9)	%
Provision (credit) for loan and lease losses		(15)			6			3			(4)			(36)			(350.0)			N/M
Noninterest expense		116			106			112			107			105			9.4			10.5
Net income (loss) attributable to Key		48			28			37			46			78			71.4			(38.5)
Average loans and leases		5,658			5,278			4,910			4,473			4,565			7.2			23.9
Average loans held for sale		130			93			73			131			54			39.8			140.7
Average deposits		3,510			3,247			2,812			2,665			2,355			8.1			49.0
Net loan charge-offs		3			4			1			-			(3)			(25.0)			N/M
Net loan charge-offs to average loans		.21	%		.30	%		.08	%		-			(.26)	%		N/A			N/A
Nonperforming assets at period end	$	44		$	55		$	55		$	49		$	65			(20.0)			(32.3)
Return on average allocated equity		26.19	%		15.22	%		20.05	%		24.61	%		38.73	%		N/A			N/A
Average full-time equivalent employees		816			835			778			752			751			(2.3)			8.7

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

SOURCE KeyCorp

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