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

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Exhibit 99.1

NEWS

FOR IMMEDIATE RELEASE

KEYCORP REPORTS FOURTH QUARTER 2013

NET INCOME OF $229 MILLION, OR $.26 PER COMMON SHARE AND

FULL YEAR NET INCOME OF $847 MILLION, OR $.93 PER COMMON SHARE

Average loans up 5% for the full year, driven by a

12% increase in commercial, financial and agricultural

Credit quality remains strong, with net loan charge-offs to average loans of .27%

Disciplined capital management, returning 76% of net income to shareholders in 2013

CLEVELAND, January 23, 2014 – KeyCorp (NYSE: KEY) today announced fourth quarter net income from continuing operations attributable to Key common shareholders of $229 million, or $.26 per common share, compared to $229 million, or $.25 per common share for the third quarter of 2013, and $190 million, or $.20 per common share for the fourth quarter of 2012. During the fourth quarter of 2013, Key incurred $24 million, or $.02 per common share of costs related to both its previously announced efficiency initiative and a pension settlement charge.

For the twelve months ended December 31, 2013, net income from continuing operations attributable to Key common shareholders was $847 million, or $.93 per common share, compared to $813 million, or $.86 per common share for the same period one year ago. During 2013, Key incurred $117 million, or $.08 per common share of costs related to both its efficiency initiative and pension settlement charge.

“2013 was a significant year for Key,” said Chairman and Chief Executive Officer Beth Mooney. “We executed our strategy, acquired relationships, successfully invested in our businesses and returned peer-leading capital to shareholders.”

“Reflecting the success of our distinctive business model, average loans were up 5% in 2013 compared to the prior year, driven by a 12% increase in commercial, financial and agricultural loans, and our credit quality improved to levels not seen since 2007,” Mooney added. “Both commercial and consumer loans grew relative to the full year and fourth quarter of 2012. Fee income benefitted from the investments we have made in several of our businesses. Cards and payments income was up 20% from 2012, and mortgage servicing fees more than doubled. We also had a record year for investment banking and debt placement fees, with five consecutive years of growth. We achieved the goal we set in June 2012, by implementing annualized cost savings of $241 million. With increased cost discipline embedded in our culture, we are poised to drive further improvements in efficiency and productivity.”

“We have also maintained our disciplined approach to capital management by investing in our businesses and returning 76% of our net income to our shareholders through dividends and common share repurchases in 2013. At year end our capital remained in the top tier of our peer group, positioning us well for the future,” continued Mooney.

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

Page 2

FOURTH QUARTER 2013 FINANCIAL RESULTS, from continuing operations

Compared with Fourth Quarter of 2012

•

Average loans up 3.4% (5% excluding impact of exit portfolios), driven by growth in commercial, financial and agricultural loans; period ending loans up 3.1%

•

Average deposits up 7.5% due to commercial mortgage servicing acquisition and growth in commercial and consumer deposits

•

Net interest income (taxable-equivalent) down $18 million, primarily due to yield pressure on new loans and reinvestment yields on securities

•

Noninterest income up $14 million, reflecting higher principal investing gains and benefits from investments in payments and commercial mortgage servicing

•

Noninterest expense down $22 million, reflecting successful execution of efficiency initiative

•

Asset quality improved, with net loan charge-offs to average loans declining from .44% to .27%

•

Disciplined capital management, with total shareholder payout of 76% of net income attributable to Key common shareholders in 2013, including the repurchase of $474 million of common shares for the year

Compared with Third Quarter of 2013

•

Average loans up .6%, driven by growth in commercial, financial and agricultural loans; period ending loans up 1.6%

•

Average deposits up 3.7% due to growth in commercial mortgage escrow deposits and continued client inflows

•

Net interest income (taxable-equivalent) up $5 million, with growth in average earning assets and lower net interest margin

•

Noninterest income down $6 million, including decline of $19 million in gains related to leveraged lease terminations

•

Noninterest expense down $4 million, which included higher efficiency-related charges, a lower pension settlement adjustment and higher expenses from incentives and business services and professional fees

•

Asset quality remains strong and stable with net loan charge-offs to average loans of .27%

•

Disciplined capital management, repurchasing $99 million of common shares during the fourth quarter of 2013 and maintaining top tier capital position with Tier 1 common equity of 11.23%

Selected Financial Highlights


dollars in millions, except per share data										Change 4Q13 vs.
dollars in millions, except per share data	4Q13			3Q13			4Q12			3Q13			4Q12
Income (loss) from continuing operations attributable to Key common shareholders	$	229		$	229		$	190			—			20.5	%
Income (loss) from continuing operations attributable to Key common shareholders per common share — assuming dilution		.26			.25			.20			4.0	%		30.0
Return on average total assets from continuing operations		1.08	%		1.12	%		.96	%		N/A			N/A
Tier 1 common equity^(a)		11.23			11.17			11.36			N/A			N/A
Book value at period end	$	11.25		$	11.05		$	10.78			1.8	%		4.4	%
Net interest margin (TE) from continuing operations		3.01	%		3.11	%		3.37	%		N/A			N/A

(a)

The table entitled “GAAP to Non-GAAP Reconciliations” in the attached financial supplement presents the computations of certain financial measures related to “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.

TE = Taxable Equivalent, N/A = Not Applicable

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

Page 3

INCOME STATEMENT HIGHLIGHTS

Revenue


dollars in millions							Change 4Q13 vs.
dollars in millions	4Q13		3Q13		4Q12		3Q13			4Q12
Net interest income (TE)	$	589	$	584	$	607		.9	%		(3.0	)%
Noninterest income		453		459		439		(1.3	)		3.2

Total revenue	$	1,042	$	1,043	$	1,046		(.1	)%		(.4	)%

TE = Taxable Equivalent

Taxable-equivalent net interest income was $589 million for the fourth quarter of 2013, and the net interest margin was 3.01%. These results compare to taxable-equivalent net interest income of $607 million and a net interest margin of 3.37% for the fourth quarter of 2012. The decrease in net interest income and net interest margin is attributable to the impact of lower interest rates on asset yields combined with a significant increase in liquidity levels resulting from strong deposit inflows. The decreases were partially offset by the maturity of higher-rate certificates of deposit and a more favorable mix of lower-cost deposits.

Compared to the third quarter of 2013, taxable-equivalent net interest income increased by $5 million, and the net interest margin declined by 10 basis points. The increase in net interest income was primarily due to $5 million less of amortized lease origination costs recognized in the fourth quarter of 2013 compared to the third quarter of 2013 in connection with the early termination of leveraged leases. The decrease in the net interest margin was largely attributable to higher levels of liquidity, which were deployed in lower-yielding short-term investments.

Noninterest Income


dollars in millions							Change 4Q13 vs.
dollars in millions	4Q13		3Q13		4Q12		3Q13			4Q12
Trust and investment services income	$	98	$	100	$	95		(2.0	)%		3.2	%
Investment banking and debt placement fees		84		86		110		(2.3	)		(23.6	)
Service charges on deposit accounts		68		73		75		(6.8	)		(9.3	)
Operating lease income and other leasing gains		23		43		19		(46.5	)		21.1
Corporate services income		40		44		41		(9.1	)		(2.4	)
Cards and payments income		40		43		38		(7.0	)		5.3
Corporate-owned life insurance income		33		26		36		26.9			(8.3	)
Consumer mortgage income		3		3		11		—			(72.7	)
Mortgage servicing fees		22		15		7		46.7			214.3
Net gains (losses) from principal investing		20		17		2		17.6			900.0
Other income		22		9		5		144.4			340.0

Total noninterest income	$	453	$	459	$	439		(1.3	)%		3.2	%

Key’s noninterest income was $453 million for the fourth quarter of 2013, compared to $439 million for the year-ago quarter. The fourth quarter reflects the benefits from Key’s recent investments in payments and commercial mortgage servicing, with cards and payments income up $2 million and mortgage servicing fees up $15 million. In addition, net gains from principal investing increased $18 million. These increases were partially offset by decreases in investment banking and debt placement fees of $26 million and consumer mortgage income of $8 million.

Compared to the third quarter of 2013, noninterest income decreased by $6 million. Operating lease income and other leasing gains decreased $20 million primarily due to a $19 million decrease in gains on the early termination of leveraged leases. This decrease was partially offset by increases in other income of $13 million and mortgage servicing fees of $7 million primarily due to higher special servicing fees.

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

Page 4

Noninterest Expense


dollars in millions							Change 4Q13 vs.
dollars in millions	4Q13		3Q13		4Q12		3Q13			4Q12
Personnel expense	$	398	$	414	$	422		(3.9	)%		(5.7	)%
Nonpersonnel expense		314		302		312		4.0			.6

Total noninterest expense	$	712	$	716	$	734		(.6	)%		(3.0	)%

Key’s noninterest expense was $712 million for the fourth quarter of 2013, compared to $734 million for the same period last year. Excluding the $22 million in expenses related to Key’s efficiency initiative and the pension settlement charge of $2 million in the fourth quarter of 2013 and the $16 million in efficiency initiative expenses one year ago, noninterest expense was down $30 million from the prior year. Personnel expense decreased $24 million, due to the realization of expense efficiencies. Nonpersonnel expense increased $2 million. The provision (credit) for losses on lending-related commitments increased $11 million, offset by a $12 million decrease in business services and professional fees.

Compared to the third quarter of 2013, noninterest expense decreased by $4 million. The reduction in expenses reflected $17 million in lower expenses related to Key’s efficiency initiative and pension settlement charges. This reduction was partially offset by increases in incentive compensation of $6 million and business services and professional fees of $5 million.

BALANCE SHEET HIGHLIGHTS

As of December 31, 2013, Key had total assets of $92.9 billion compared to $90.7 billion at September 30, 2013, and $89.2 billion at December 31, 2012.

Average Loans


dollars in millions							Change 12-31-13 vs.
dollars in millions	12-31-13		9-30-13		12-31-12		9-30-13			12-31-12
Commercial, financial and agricultural^(a)	$	24,218	$	23,864	$	22,436		1.5	%		7.9	%
Other commercial loans		13,266		13,281		13,494		(.1	)		(1.7	)
Total home equity loans		10,653		10,611		10,218		.4			4.3
Other consumer loans		5,471		5,515		5,711		(.8	)		(4.2	)

Total loans	$	53,608	$	53,271	$	51,859		.6	%		3.4	%

(a)	Commercial, financial and agricultural average balance for the three months ended December 31, 2013, September 30, 2013, and December 31, 2012, includes $97 million, $96 million, and $90 million, respectively, of assets from commercial credit cards.

Average loans were $53.6 billion for the fourth quarter of 2013, an increase of $1.7 billion compared to the fourth quarter of 2012. Total commercial loans increased $1.6 billion, mostly due to commercial, financial and agricultural loan growth across Key’s business lending segments, which was modestly offset by leveraged lease terminations occurring in 2013. Consumer loans grew modestly, as growth in Key’s home equity portfolio was partially offset by exit portfolio run-off.

Compared to the third quarter of 2013, average loans increased by $337 million. The loan growth occurred primarily in commercial lending within our commercial, financial and agricultural and commercial mortgage portfolios. Much of the growth occurred toward the latter part of the fourth quarter, resulting in a larger increase in period end loans than average loans. Consumer loans remained relatively unchanged for the fourth quarter.

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

Page 5

Average Deposits


dollars in millions										Change 12-31-13 vs.
dollars in millions	12-31-13			9-30-13			12-31-12			9-30-13			12-31-12
Non-time deposits^(a)	$	61,394		$	58,620		$	55,355			4.7	%		10.9	%
Certificates of deposits ($100,000 or more)		2,649			2,785			2,992			(4.9	)		(11.5	)
Other time deposits		3,736			3,957			4,714			(5.6	)		(20.7	)

Total deposits	$	67,779		$	65,362		$	63,061			3.7	%		7.5	%

Cost of total deposits^(a)		.20	%		.22	%		.31	%		N/A			N/A

(a)	Excludes deposits in foreign office.

N/A = Not Applicable

Average deposits, excluding deposits in foreign office, totaled $67.8 billion for the fourth quarter of 2013, an increase of $4.7 billion compared to the year-ago quarter. The growth was driven by corporate clients and the addition of escrow demand deposits from the commercial mortgage servicing acquisition completed earlier in 2013. Demand deposits were up $3.2 billion, and interest-bearing non-time deposits were up $2.9 billion. This deposit growth was partially offset by $1.3 billion of run-off of certificates of deposit and other time deposits.

Compared to the third quarter of 2013, average deposits, excluding deposits in foreign office, increased by $2.4 billion. Demand deposits increased by $1.7 billion mostly due to average escrow deposits and interest-bearing non-time deposits growth of $1.1 billion associated with deposits from business and public sector clients. This growth was partially offset by run-off in certificates of deposit.

ASSET QUALITY


dollars in millions										Change 4Q13 vs.
dollars in millions	4Q13			3Q13			4Q12			3Q13			4Q12
Net loan charge-offs	$	37		$	37		$	58			—			(36.2	)%
Net loan charge-offs to average total loans		.27	%		.28	%		.44	%		N/A			N/A
Nonperforming loans at period end^(a)	$	508		$	541		$	674			(6.1	)%		(24.6	)
Nonperforming assets at period end		531			579			735			(8.3	)		(27.8	)
Allowance for loan and lease losses		848			868			888			(2.3	)		(4.5	)
Allowance for loan and lease losses to nonperforming loans		166.9	%		160.4	%		131.8	%		N/A			N/A
Provision (credit) for loan and lease losses	$	19		$	28		$	57			(32.1	)%		(66.7	)%

(a)	December 31, 2013, September 30, 2013, and December 31, 2012 amounts exclude $16 million, $18 million, and $23 million, respectively, of purchased credit impaired loans acquired in July 2012.

N/A = Not Applicable

Key’s provision for loan and lease losses was $19 million for the fourth quarter of 2013, compared to $28 million for the third quarter of 2013 and $57 million for the year-ago quarter. Key’s allowance for loan and lease losses was $848 million, or 1.56% of total period-end loans at December 31, 2013, compared to 1.62% at September 30, 2013, and 1.68% at December 31, 2012.

Net loan charge-offs for the fourth quarter of 2013 totaled $37 million, or .27% of average total loans. These results compare to $37 million, or .28% for the third quarter of 2013, and $58 million, or .44% for the same period last year.

At December 31, 2013, Key’s nonperforming loans totaled $508 million and represented .93% of period-end portfolio loans, compared to 1.01% at September 30, 2013, and 1.28% at December 31, 2012. Nonperforming assets at December 31, 2013 totaled $531 million and represented .97% of period-end portfolio loans and OREO and other nonperforming assets, compared to 1.08% at September 30, 2013, and 1.39% at December 31, 2012.

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

Page 6

CAPITAL

Key’s estimated risk-based capital ratios included in the following table continued to exceed all “well-capitalized” regulatory benchmarks at December 31, 2013.

Capital Ratios


	12-31-13			9-30-13			12-31-12
Tier 1 common equity^{(a), (b)}		11.23	%		11.17	%		11.36	%
Tier 1 risk-based capital^(a)		11.97			11.92			12.15
Total risk based capital^(a)		14.34			14.37			15.13
Tangible common equity to tangible assets^(b)		9.80			9.93			10.15
Leverage^(a)		11.09			11.33			11.41

(a)	12-31-13 ratio is estimated.

(b)

The table entitled “GAAP to Non-GAAP Reconciliations” in the attached financial supplement 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, 2013, Key’s estimated Tier 1 common equity and Tier 1 risk-based capital ratios stood at 11.23% and 11.97%, respectively. In addition, the tangible common equity ratio was 9.80% at December 31, 2013.

In July 2013, the Federal banking regulators approved the final Basel III capital framework for U.S. banking organizations (the “Regulatory Capital Rules”). While the Regulatory Capital Rules are effective January 1, 2014, the mandatory compliance date for Key as a “standardized approach” banking organization begins on January 1, 2015, and is subject to transitional provisions extending to January 1, 2019. Key’s estimated Tier 1 common equity as calculated under the Regulatory Capital Rules was 10.63% at December 31, 2013. This exceeds the fully phased-in required minimum Tier 1 common equity (including capital conservation buffer) of 7.00%.

Summary of Changes in Common Shares Outstanding


in thousands										Change 4Q13 vs.
in thousands	4Q13			3Q13			4Q12			3Q13			4Q12
Shares outstanding at beginning of period		897,821			912,883			936,195			(1.6	)%		(4.1	)%
Common shares repurchased		(7,659	)		(16,364	)		(10,530	)		(53.2	)		(27.3	)
Shares reissued (returned) under employee benefit plans		562			1,302			104			(56.8	)		440.4

Shares outstanding at end of period		890,724			897,821			925,769			(.8	)%		(3.8	)%

Key completed $474 million of common share repurchases during calendar year 2013, including $99 million of repurchases in the fourth quarter of 2013. Common share repurchases under Key’s 2013 CCAR capital plan are expected to be executed through the first quarter of 2014.

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

Page 7

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 4Q13 vs.
dollars in millions	4Q13			3Q13			4Q12			3Q13			4Q12
Revenue from continuing operations (TE)
Key Community Bank	$	534		$	551		$	580			(3.1	)%		(7.9	)%
Key Corporate Bank		407			377			402			8.0			1.2
Other Segments		103			114			69			(9.6	)		49.3

Total segments		1,044			1,042			1,051			.2			(.7	)
Reconciling Items		(2	)		1			(5	)		N/M			N/M

Total	$	1,042		$	1,043		$	1,046			(.1	)%		(.4	)%

Income (loss) from continuing operations attributable to Key
Key Community Bank	$	28		$	54		$	33			(48.1	)%		(15.2	)%
Key Corporate Bank		127			96			115			32.3			10.4
Other Segments		84			92			53			(8.7	)		58.5

Total segments		239			242			201			(1.2	)%		18.9
Reconciling Items		(4	)		(7	)		(5	)		N/M			N/M

Total	$	235		$	235		$	196			—			19.9	%

TE = Taxable equivalent, N/M = Not Meaningful

Key Community Bank


dollars in millions							Change 4Q13 vs.
dollars in millions	4Q13		3Q13		4Q12		3Q13			4Q12
Summary of operations
Net interest income (TE)	$	350	$	357	$	383		(2.0	)%		(8.6	)%
Noninterest income		184		194		197		(5.2	)		(6.6	)

Total revenue (TE)		534		551		580		(3.1	)		(7.9	)
Provision (credit) for loan and lease losses		33		24		26		37.5			26.9
Noninterest expense		456		441		502		3.4			(9.2	)

Income (loss) before income taxes (TE)		45		86		52		(47.7	)		(13.5	)
Allocated income taxes (benefit) and TE adjustments		17		32		19		(46.9	)		(10.5	)

Net income (loss) attributable to Key	$	28	$	54	$	33		(48.1	)%		(15.2	)%

Average balances
Loans and leases	$	29,596	$	29,495	$	28,629		.3	%		3.4	%
Total assets		31,784		31,679		31,224		.3			1.8
Deposits		50,409		49,652		49,839		1.5			1.1
Assets under management at period end	$	26,664	$	25,574	$	23,638		4.3	%		12.8	%

TE = Taxable Equivalent

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

Page 8

Additional Key Community Bank Data


dollars in millions										Change 4Q13 vs.
dollars in millions	4Q13			3Q13			4Q12			3Q13			4Q12
Noninterest income
Trust and investment services income	$	67		$	68		$	66			(1.5	)%		1.5	%
Service charges on deposit accounts		58			61			61			(4.9	)		(4.9	)
Cards and payments income		37			36			34			2.8			8.8
Other noninterest income		22			29			36			(24.1	)		(38.9	)

Total noninterest income	$	184		$	194		$	197			(5.2	)%		(6.6	)%

Average deposit balances
NOW and money market deposit accounts	$	27,438		$	26,564		$	25,697			3.3	%		6.8	%
Savings deposits		2,472			2,510			2,399			(1.5	)		3.0
Certificates of deposit ($100,000 or more)		2,124			2,264			2,619			(6.2	)		(18.9	)
Other time deposits		3,731			3,949			4,702			(5.5	)		(20.7	)
Deposits in foreign office		285			278			287			2.5			(.7	)
Noninterest-bearing deposits		14,359			14,087			14,135			1.9			1.6

Total deposits	$	50,409		$	49,652		$	49,839			1.5	%		1.1	%

Home equity loans
Average balance	$	10,310		$	10,247		$	9,807
Weighted-average loan-to-value ratio (at date of origination)		71	%		71	%		70	%
Percent first lien positions		58			58			55
Other data
Branches		1,028			1,044			1,088
Automated teller machines		1,335			1,350			1,611

Key Community Bank Summary of Operations

•

Successfully completed integrations of credit card and Western New York branches

•

Loan growth of $967 million, or 3.4% from prior year

•

Core deposits up $2.0 billion, or 4.8% from the prior year

Key Community Bank recorded net income attributable to Key of $28 million for the fourth quarter of 2013, compared to net income attributable to Key of $33 million for the year-ago quarter.

Taxable-equivalent net interest income decreased by $33 million, or 8.6% from the fourth quarter of 2012 due to declines in the deposit spread in the current period as a result of the continued low-rate environment. Average loans and leases grew 3.4% while average deposits increased 1.1% from one year ago.

Noninterest income declined by $13 million, or 6.6% from the year-ago quarter. Consumer mortgage income decreased $8 million, service charges on deposit accounts declined $3 million, and other income declined by $4 million. These decreases were partially offset by increases in cards and payments income of $3 million.

The provision for loan and lease losses increased by $7 million, or 26.9% from the fourth quarter of 2012. Net loan charge-offs increased $20 million from the same period one year ago.

Noninterest expense declined by $46 million, or 9.2% from the year-ago quarter as a result of Key’s efficiency initiative. Personnel expense decreased $15 million primarily due to declines in salaries and employee benefits. Nonpersonnel expense declined $31 million primarily due to declines in business services and professional fees, computer processing, and other support costs.

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

Page 9

Key Corporate Bank


dollars in millions								Change 4Q13 vs.
dollars in millions	4Q13			3Q13		4Q12		3Q13			4Q12
Summary of operations
Net interest income (TE)	$	192		$	188	$	195		2.1	%		(1.5	)%
Noninterest income		215			189		207		13.8			3.9

Total revenue (TE)		407			377		402		8.0			1.2
Provision (credit) for loan and lease losses		(13	)		13		11		N/M			N/M
Noninterest expense		225			217		207		3.7			8.7

Income (loss) before income taxes (TE)		195			147		184		32.7			6.0
Allocated income taxes and TE adjustments		68			51		69		33.3			(1.4	)

Net income (loss) attributable to Key	$	127		$	96	$	115		32.3	%		10.4	%

Average balances
Loans and leases	$	21,013		$	20,586	$	19,481		2.1	%		7.9	%
Loans held for sale		668			422		538		58.3			24.2
Total assets		25,114			24,487		23,450		2.6			7.1
Deposits		17,372			16,125		13,681		7.7			27.0
Assets under management at period end	$	10,241		$	10,536	$	11,106		(2.8	)%		(7.8	)%

TE = Taxable Equivalent, N/M = Not Meaningful

Additional Key Corporate Bank Data


dollars in millions									Change 4Q13 vs.
dollars in millions	4Q13		3Q13			4Q12			3Q13			4Q12
Noninterest income
Trust and investment services income	$	32	$	31		$	30			3.2	%		6.7	%
Investment banking and debt placement fees		84		85			109			(1.2	)		(22.9	)
Operating lease income and other leasing gains		19		14			18			35.7			5.6
Corporate services income		30		34			31			(11.8	)		(3.2	)
Service charges on deposit accounts		11		11			14			—			(21.4	)
Cards and payments income		3		6			4			(50.0	)		(25.0	)

Payments and services income		44		51			49			(13.7	)		(10.2	)
Mortgage servicing fees		21		16			7			31.3			200.0
Other noninterest income		15		(8	)		(6	)		N/M			N/M

Total noninterest income	$	215	$	189		$	207			13.8	%		3.9	%

N/M = Not Meaningful

Key Corporate Bank Summary of Operations

•

Average loan balances up 7.9% from the prior year

•

Average deposits up 27% from the prior year

•

Total revenue increased 1.2% from prior year

•

Investment banking and debt placement fees declined 22.9% from the prior year, but increased 3.1% for the full year

Key Corporate Bank recorded net income attributable to Key of $127 million for the fourth quarter of 2013, compared to $115 million for the same period one year ago.

Taxable-equivalent net interest income decreased by $3 million, or 1.5% compared to the fourth quarter of 2012. Average earning assets increased $1.9 billion, or 9% from the year-ago quarter, driving an $8 million increase in earning asset spread. Average deposit balances increased $3.7 billion, or 27% from the year-ago quarter, driven by the commercial mortgage servicing acquisition and increases in other business flows. However, these increases in balances were offset by declines in the deposit spread as a result of the continued low-rate environment.

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

Page 10

Noninterest income increased by $8 million, or 3.9% from the fourth quarter of 2012. Mortgage servicing fees increased $14 million due to higher levels of core servicing fees, special servicing fees, and the impact of the previously announced acquisition of a commercial mortgage servicing portfolio. Other noninterest income increased $21 million mostly driven by gains related to the disposition of certain investments held by the Real Estate Capital line of business. Offsetting these increases was a $25 million decrease in investment banking and debt placement fees from the fourth quarter of 2012 as a result of a business mix shift in Key’s real estate business.

The provision for loan and lease losses decreased $24 million compared to the fourth quarter of 2012 due to improved credit quality within the portfolio.

Noninterest expense increased by $18 million, or 8.7% from the fourth quarter of 2012, mostly due to an increase of $14 million in the provision (credit) for losses on lending-related commitments. There was a credit of $2 million in the provision (credit) for losses on lending-related commitments in the fourth quarter of 2013 compared to a credit of $16 million for the fourth quarter of 2012.

Other Segments

Other Segments consist of Corporate Treasury, Community Development, Key’s Principal Investing unit, and various exit portfolios. Other Segments generated net income attributable to Key of $84 million for the fourth quarter of 2013, compared to net income attributable to Key of $53 million for the same period last year. These results were primarily attributable to an increase in net gains (losses) from principal investing of $18 million, and an increase in net interest income of $17 million.

*****

KeyCorp was organized more than 160 years ago and is headquartered in Cleveland, Ohio. One of the nation’s largest bank-based financial services companies, Key had assets of approximately $92.9 billion at December 31, 2013.

Key provides deposit, lending, cash management and investment services to individuals and small and mid-sized businesses in 12 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.

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

Page 11

CONTACTS:


ANALYSTS				MEDIA
Vernon L. Patterson				Jack Sparks
216.689.0520				720.904.4554
Vernon_Patterson@KeyBank.com				Jack_Sparks@KeyBank.com
				Twitter: @keybank_news

Kelly L. Dillon
216.689.3133
Kelly_L_Dillon@KeyBank.com

Matt Gardner
216.689.8334
Matt_Gardner@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, and profitability. Forward-looking statements can be identified by words such as “expect,” “believe,” and “anticipate,” and other similar references to future periods. 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 Form 10-K for the year ended December 31, 2012, and its Quarterly Reports on Form 10-Q for the periods ended March 31, 2013, June 30, 2013, and September 30, 2013, each of which has been filed with the Securities and Exchange Commission and is available on Key’s website (www.key.com/ir) and on the Securities and Exchange Commission’s website (www.sec.gov). These factors may include, among others: economic, political or other shocks to financial markets in the United States and abroad; current reform initiatives in the U.S., including the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as amended, subjecting us to a variety of new and more stringent legal and regulatory requirements and increased scrutiny from our regulators; adverse behaviors in securities, public debt, and capital markets, including changes in market liquidity and volatility; and our ability to timely and effectively implement our strategic initiatives. 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, January 23, 2014. An audio replay of the call will be available through January 30, 2014.

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 Fourth Quarter 2013 Profit

January 23, 2014

Page 12

KeyCorp

Fourth Quarter 2013

Financial Supplement


Page
13		Financial Highlights
15		GAAP to Non-GAAP Reconciliation
18		Consolidated Balance Sheets
19		Consolidated Statements of Income
20		Consolidated Average Balance Sheets, and Net Interest Income and Yields/Rates From Continuing Operations
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 Fourth Quarter 2013 Profit

January 23, 2014

Page 13

Financial Highlights

(dollars in millions, except per share amounts)


	Three months ended
	12-31-13			9-30-13			12-31-12
Summary of operations
Net interest income (TE)	$	589		$	584		$	607
Noninterest income		453			459			439

Total revenue (TE)		1,042			1,043			1,046
Provision (credit) for loan and lease losses		19			28			57
Noninterest expense		712			716			734
Income (loss) from continuing operations attributable to Key		235			235			196
Income (loss) from discontinued operations, net of taxes^(a)		(5	)		37			7
Net income (loss) attributable to Key		230			272			203
Income (loss) from continuing operations attributable to Key common shareholders	$	229		$	229		$	190
Income (loss) from discontinued operations, net of taxes^(a)		(5	)		37			7
Net income (loss) attributable to Key common shareholders		224			266			197
Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	.26		$	.25		$	.21
Income (loss) from discontinued operations, net of taxes ^(a)		(.01	)		.04			.01
Net income (loss) attributable to Key common shareholders ^(b)		.25			.29			.21
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution		.26			.25			.20
Income (loss) from discontinued operations, net of taxes — assuming dilution ^(a)		(.01	)		.04			.01
Net income (loss) attributable to Key common shareholders — assuming dilution ^(b)		.25			.29			.21
Cash dividends paid		.055			.055			.05
Book value at period end		11.25			11.05			10.78
Tangible book value at period end		10.11			9.92			9.67
Market price at period end		13.42			11.40			8.42
Performance ratios
From continuing operations:
Return on average total assets		1.08	%		1.12	%		.96	%
Return on average common equity		9.10			9.13			7.58
Return on average tangible common equity ^(c)		10.13			10.18			8.45
Net interest margin (TE)		3.01			3.11			3.37
Cash efficiency ratio ^(c)		67.4			67.5			69.0
From consolidated operations:
Return on average total assets		1.00	%		1.22	%		.93	%
Return on average common equity		8.90			10.61			7.86
Return on average tangible common equity ^(c)		9.91			11.82			8.77
Net interest margin (TE)		2.91			3.06			3.29
Loan to deposit ^(d)		83.8			83.8			85.8
Capital ratios at period end
Key shareholders’ equity to assets		11.09	%		11.25	%		11.51	%
Key common shareholders’ equity to assets		10.78			10.94			11.18
Tangible common equity to tangible assets ^(c)		9.80			9.93			10.15
Tier 1 common equity ^{(c), (e)}		11.23			11.17			11.36
Tier 1 risk-based capital ^(e)		11.97			11.92			12.15
Total risk-based capital ^(e)		14.34			14.37			15.13
Leverage ^(e)		11.09			11.33			11.41
Asset quality — from continuing operations
Net loan charge-offs	$	37		$	37		$	58
Net loan charge-offs to average loans		.27	%		.28	%		.44	%
Allowance for loan and lease losses	$	848		$	868		$	888
Allowance for credit losses		885			908			917
Allowance for loan and lease losses to period-end loans		1.56	%		1.62	%		1.68	%
Allowance for credit losses to period-end loans		1.63			1.69			1.74
Allowance for loan and lease losses to nonperforming loans		166.9			160.4			131.8
Allowance for credit losses to nonperforming loans		174.2			167.8			136.1
Nonperforming loans at period end ^(f)	$	508		$	541		$	674
Nonperforming assets at period end		531			579			735
Nonperforming loans to period-end portfolio loans		.93	%		1.01	%		1.28	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		.97			1.08			1.39
Trust and brokerage assets
Assets under management	$	36,905		$	36,110		$	34,744
Nonmanaged and brokerage assets		47,418			38,525			35,550
Other data
Average full-time equivalent employees		14,197			14,555			15,589
Branches		1,028			1,044			1,088
Taxable-equivalent adjustment	$	6		$	6		$	6

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

Page 14

Financial Highlights (continued)

(dollars in millions, except per share amounts)


	Twelve months ended
	12-31-13			12-31-12
Summary of operations
Net interest income (TE)	$	2,348		$	2,288
Noninterest income		1,766			1,856

Total revenue (TE)		4,114			4,144
Provision (credit) for loan and lease losses		130			229
Noninterest expense		2,820			2,818
Income (loss) from continuing operations attributable to Key		870			835
Income (loss) from discontinued operations, net of taxes ^(a)		40			23
Net income (loss) attributable to Key		910			858
Income (loss) from continuing operations attributable to Key common shareholders	$	847		$	813
Income (loss) from discontinued operations, net of taxes ^(a)		40			23
Net income (loss) attributable to Key common shareholders		887			836
Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	.93		$	.87
Income (loss) from discontinued operations, net of taxes ^(a)		.04			.02
Net income (loss) attributable to Key common shareholders ^(b)		.98			.89
Income (loss) from continuing operations attributable to Key common shareholders — assuming dilution		.93			.86
Income (loss) from discontinued operations, net of taxes — assuming dilution ^(a)		.04			.02
Net income (loss) attributable to Key common shareholders — assuming dilution ^(b)		.97			.89
Cash dividends paid		.215			.18
Performance ratios
From continuing operations:
Return on average total assets		1.03	%		1.03	%
Return on average common equity		8.48			8.25
Return on average tangible common equity ^(c)		9.45			9.16
Net interest margin (TE)		3.12			3.21
Cash efficiency ratio ^(c)		67.5			67.4
From consolidated operations:
Return on average total assets		1.02	%		.99	%
Return on average common equity		8.88			8.48
Return on average tangible common equity ^(c)		9.90			9.42
Net interest margin (TE)		3.02			3.13
Asset quality — from continuing operations
Net loan charge-offs	$	168		$	345
Net loan charge-offs to average total loans		.32	%		.69	%
Other data
Average full-time equivalent employees		14,783			15,589
Taxable-equivalent adjustment	$	23		$	24

(a)

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. In February 2013, Key decided to sell its investment subsidiary, Victory Capital Management, and its broker-dealer affiliate, Victory Capital Advisors, to a private equity fund. As a result of these decisions, Key has accounted for these businesses as discontinued operations.

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

(c)

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.

(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)	12-31-13 ratio is estimated.

(f)	December 31, 2013, September 30, 2013, and December 31, 2012 amounts exclude $16 million, $18 million, and $23 million, respectively, of purchased credit impaired loans acquired in July 2012.

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

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

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,” “cash efficiency ratio,” and “adjusted 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 and the adjusted cash efficiency ratio are ratios of two non-GAAP performance measures. As such, there are no directly comparable GAAP performance measures. The cash efficiency ratio performance measure removes the impact of Key’s intangible asset amortization from the calculation. The adjusted cash efficiency ratio further removes the impact of the efficiency initiative charges. Management believes these ratios provide greater consistency and comparability between Key’s results and those of its peer banks. Additionally, these ratios are used by analysts and investors as they develop 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
	12-31-13			9-30-13			12-31-12
Tangible common equity to tangible assets at period end
Key shareholders’ equity (GAAP)	$	10,303		$	10,206		$	10,271
Less: Intangible assets ^(a)		1,014			1,017			1,027
Preferred Stock, Series A ^(b)		282			282			291

Tangible common equity (non-GAAP)	$	9,007		$	8,907		$	8,953

Total assets (GAAP)	$	92,934		$	90,708		$	89,236
Less: Intangible assets ^(a)		1,014			1,017			1,027

Tangible assets (non-GAAP)	$	91,920		$	89,691		$	88,209

Tangible common equity to tangible assets ratio (non-GAAP)		9.80	%		9.93	%		10.15	%
Tier 1 common equity at period end
Key shareholders’ equity (GAAP)	$	10,303		$	10,206		$	10,271
Qualifying capital securities		339			340			339
Less: Goodwill		979			979			979
Accumulated other comprehensive income (loss) ^(c)		(394	)		(409	)		(172	)
Other assets ^(d)		91			96			114

Total Tier 1 capital (regulatory)		9,966			9,880			9,689
Less: Qualifying capital securities		339			340			339
Preferred Stock, Series A ^(b)		282			282			291

Total Tier 1 common equity (non-GAAP)	$	9,345		$	9,258		$	9,059

Net risk-weighted assets (regulatory) ^{(d), (e)}	$	83,251		$	82,913		$	79,734
Tier 1 common equity ratio (non-GAAP) ^(e)		11.23	%		11.17	%		11.36	%
Pre-provision net revenue
Net interest income (GAAP)	$	583		$	578		$	601
Plus: Taxable-equivalent adjustment		6			6			6
Noninterest income (GAAP)		453			459			439
Less: Noninterest expense (GAAP)		712			716			734

Pre-provision net revenue from continuing operations (non-GAAP)	$	330		$	327		$	312

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

Page 16

GAAP to Non-GAAP Reconciliations (continued)

(dollars in millions)


	Three months ended
	12-31-13			9-30-13			12-31-12
Average tangible common equity
Average Key shareholders’ equity (GAAP)	$	10,272		$	10,237		$	10,261
Less: Intangible assets (average)^(f)		1,016			1,019			1,030
Preferred Stock, Series A (average)		291			291			291

Average tangible common equity (non-GAAP)	$	8,965		$	8,927		$	8,940

Return on average tangible common equity from continuing operations
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP)	$	229		$	229		$	190
Average tangible common equity (non-GAAP)		8,965			8,927			8,940
Return on average tangible common equity from continuing operations (non-GAAP)		10.13	%		10.18	%		8.45	%
Return on average tangible common equity consolidated
Net income (loss) attributable to Key common shareholders (GAAP)	$	224		$	266		$	197
Average tangible common equity (non-GAAP)		8,965			8,927			8,940
Return on average tangible common equity consolidated (non-GAAP)		9.91	%		11.82	%		8.77	%
Cash efficiency ratio
Noninterest expense (GAAP)	$	712		$	716		$	734
Less: Intangible asset amortization on credit cards (GAAP)		7			8			8
Other intangible asset amortization (GAAP)		3			4			4

Adjusted noninterest expense (non-GAAP)	$	702		$	704		$	722

Net interest income (GAAP)	$	583		$	578		$	601
Plus: Taxable-equivalent adjustment		6			6			6
Noninterest income (GAAP)		453			459			439

Total taxable-equivalent revenue (non-GAAP)	$	1,042		$	1,043		$	1,046

Cash efficiency ratio (non-GAAP)		67.4	%		67.5	%		69.0	%
Adjusted cash efficiency ratio net of efficiency initiative charges
Adjusted noninterest expense (non-GAAP)	$	702		$	704		$	722
Less: Efficiency initiative and pension settlement charges (non-GAAP)		24			41			16

Net adjusted noninterest expense (non-GAAP)	$	678		$	663		$	706

Total taxable-equivalent revenue (non-GAAP)	$	1,042		$	1,043		$	1,046
Adjusted cash efficiency ratio net of efficiency initiative charges (non-GAAP)		65.1	%		63.6	%		67.5	%


	Three months ended
	12-31-13			9-30-13
Tier 1 common equity under the Regulatory Capital Rules (estimates)
Tier 1 common equity under current regulatory rules	$	9,345		$	9,258
Adjustments from current regulatory rules to the Regulatory Capital Rules:
Deferred tax assets and other^(g)		(130	)		(140	)

Tier 1 common equity anticipated under the Regulatory Capital Rules^(h)	$	9,215		$	9,118

Net risk-weighted assets under current regulatory rules	$	83,251		$	82,913
Adjustments from current regulatory rules to the Regulatory Capital Rules:
Loan commitments less than one year		891			496
Past due loans		206			244
Mortgage servicing assets⁽ⁱ⁾		576			576
Deferred tax assets⁽ⁱ⁾		240			240
Other		1,490			1,451

Total risk-weighted assets anticipated under the Regulatory Capital Rules	$	86,654		$	85,920

Tier 1 common equity ratio under the Regulatory Capital Rules^(h)		10.63	%		10.61	%

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

Page 17

GAAP to Non-GAAP Reconciliations (continued)

(dollars in millions)


	Twelve months ended
	12-31-13			12-31-12
Pre-provision net revenue
Net interest income (GAAP)	$	2,325		$	2,264
Plus: Taxable-equivalent adjustment		23			24
Noninterest income (GAAP)		1,766			1,856
Less: Noninterest expense (GAAP)		2,820			2,818

Pre-provision net revenue from continuing operations (non-GAAP)	$	1,294		$	1,326

Average tangible common equity
Average Key shareholders’ equity (GAAP)	$	10,276		$	10,144
Less: Intangible assets (average)^(j)		1,021			978
Preferred Stock, Series A (average)		291			291

Average tangible common equity (non-GAAP)	$	8,964		$	8,875

Return on average tangible common equity from continuing operations
Net income (loss) from continuing operations attributable to Key common shareholders (GAAP)	$	847		$	813
Average tangible common equity (non-GAAP)		8,964			8,875
Return on average tangible common equity from continuing operations (non-GAAP)		9.45	%		9.16	%
Return on average tangible common equity consolidated
Net income (loss) attributable to Key common shareholders (GAAP)	$	887		$	836
Average tangible common equity (non-GAAP)		8,964			8,875
Return on average tangible common equity consolidated (non-GAAP)		9.90	%		9.42	%
Cash efficiency ratio
Noninterest expense (GAAP)	$	2,820		$	2,818
Less: Intangible asset amortization on credit cards (GAAP)		30			14
Other intangible asset amortization (GAAP)		14			9

Adjusted noninterest expense (non-GAAP)	$	2,776		$	2,795

Net interest income (GAAP)	$	2,325		$	2,264
Plus: Taxable-equivalent adjustment		23			24
Noninterest income (GAAP)		1,766			1,856

Total taxable-equivalent revenue (non-GAAP)	$	4,114		$	4,144

Cash efficiency ratio (non-GAAP)		67.5	%		67.4	%
Adjusted cash efficiency ratio net of efficiency initiative charges
Adjusted noninterest expense (non-GAAP)	$	2,776		$	2,795
Less: Efficiency initiative and pension settlement charges (non-GAAP)		117			25

Net adjusted noninterest expense (non-GAAP)	$	2,659		$	2,770

Total taxable-equivalent revenue (non-GAAP)	$	4,114		$	4,144
Adjusted cash efficiency ratio net of efficiency initiative charges (non-GAAP)		64.6	%		66.8	%

(a)	Three months ended December 31, 2013, September 30, 2013, and December 31, 2012 exclude $92 million, $99 million, and $123 million, respectively, of period end purchased credit card receivable intangible assets.

(b)	Net of capital surplus for the three months ended December 31, 2013 and September 30, 2013.

(c)

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 application of the applicable accounting guidance for defined benefit and other postretirement plans.

(d)

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 December 31, 2013, September 30, 2013, and December 31, 2012.

(e)	12-31-13 amount is estimated.

(f)	Three months ended December 31, 2013, September 30, 2013, and December 31, 2012 exclude $96 million, $103 million, and $126 million, respectively, of average ending purchased credit card receivable intangible assets.

(g)	Includes the deferred tax asset subject to future taxable income for realization, primarily tax credit carryforwards, as well as the deductible potion of purchased credit card receivables.

(h)	The anticipated amount of regulatory capital and risk-weighted assets is based upon the federal banking agencies’ Regulatory Capital Rules (as fully phased-in on January 1, 2019); Key is subject to the Regulatory Capital Rules under the “standardized approach.”

(i)	Item is included in the 10%/15% exceptions bucket calculation and is risk-weighted at 250%.

(j)	Twelve months ended December 31, 2013 and December 31, 2012 exclude $107 million and $55 million, respectively, of average ending purchased credit card receivable intangible assets.

GAAP = U.S. generally accepted accounting principles

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

Page 18

Consolidated Balance Sheets

(dollars in millions)


	12-31-13			9-30-13			12-31-12
Assets
Loans	$	54,457		$	53,597		$	52,822
Loans held for sale		611			699			599
Securities available for sale		12,346			12,606			12,094
Held-to-maturity securities		4,756			4,835			3,931
Trading account assets		738			806			605
Short-term investments		5,590			3,535			3,940
Other investments		969			1,007			1,064

Total earning assets		79,467			77,085			75,055
Allowance for loan and lease losses		(848	)		(868	)		(888	)
Cash and due from banks		617			748			584
Premises and equipment		885			890			965
Operating lease assets		305			293			288
Goodwill		979			979			979
Other intangible assets		127			137			171
Corporate-owned life insurance		3,408			3,384			3,333
Derivative assets		407			475			693
Accrued income and other assets		3,015			2,747			2,774
Discontinued assets		4,572			4,838			5,282

Total assets	$	92,934		$	90,708		$	89,236

Liabilities
Deposits in domestic offices:
NOW and money market deposit accounts	$	33,952		$	33,132		$	32,380
Savings deposits		2,472			2,489			2,433
Certificates of deposit ($100,000 or more)		2,631			2,698			2,879
Other time deposits		3,648			3,833			4,575

Total interest-bearing deposits		42,703			42,152			42,267
Noninterest-bearing deposits		26,001			25,778			23,319
Deposits in foreign office — interest-bearing		558			605			407

Total deposits		69,262			68,535			65,993
Federal funds purchased and securities sold under repurchase agreements		1,534			1,455			1,609
Bank notes and other short-term borrowings		343			466			287
Derivative liabilities		414			450			584
Accrued expense and other liabilities		1,557			1,375			1,387
Long-term debt		7,650			6,154			6,847
Discontinued liabilities		1,854			2,037			2,220

Total liabilities		82,614			80,472			78,927
Equity
Preferred stock, Series A		291			291			291
Common shares		1,017			1,017			1,017
Capital surplus		4,022			4,029			4,126
Retained earnings		7,606			7,431			6,913
Treasury stock, at cost		(2,281	)		(2,193	)		(1,952	)
Accumulated other comprehensive income (loss)		(352	)		(369	)		(124	)

Key shareholders’ equity		10,303			10,206			10,271
Noncontrolling interests		17			30			38

Total equity		10,320			10,236			10,309

Total liabilities and equity	$	92,934		$	90,708		$	89,236

Common shares outstanding (000)		890,724			897,821			925,769

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

Page 19

Consolidated Statements of Income

(dollars in millions, except per share amounts)


	Three months ended									Twelve months ended
	12-31-13			9-30-13			12-31-12			12-31-13		12-31-12
Interest income
Loans	$	532		$	532		$	563		$	2,151	$	2,155
Loans held for sale		6			5			5			20		20
Securities available for sale		75			76			85			311		399
Held-to-maturity securities		22			22			19			82		69
Trading account assets		6			5			3			21		18
Short-term investments		2			1			2			6		6
Other investments		6			6			11			29		38

Total interest income		649			647			688			2,620		2,705
Interest expense
Deposits		34			37			49			158		257
Federal funds purchased and securities sold under repurchase agreements		—			1			1			2		4
Bank notes and other short-term borrowings		3			2			2			8		7
Long-term debt		29			29			35			127		173

Total interest expense		66			69			87			295		441

Net interest income		583			578			601			2,325		2,264
Provision (credit) for loan and lease losses		19			28			57			130		229

Net interest income (expense) after provision for loan and lease losses		564			550			544			2,195		2,035
Noninterest income
Trust and investment services income		98			100			95			393		375
Investment banking and debt placement fees		84			86			110			333		327
Service charges on deposit accounts		68			73			75			281		287
Operating lease income and other leasing gains		23			43			19			108		195
Corporate services income		40			44			41			172		168
Cards and payments income		40			43			38			162		135
Corporate-owned life insurance income		33			26			36			120		122
Consumer mortgage income		3			3			11			19		40
Mortgage servicing fees		22			15			7			58		24
Net gains (losses) from principal investing		20			17			2			52		72
Other income ^(a)		22			9			5			68		111

Total noninterest income		453			459			439			1,766		1,856
Noninterest expense
Personnel		398			414			422			1,609		1,570
Net occupancy		73			66			69			275		260
Computer processing		40			38			38			156		164
Business services and professional fees		42			37			54			151		190
Equipment		26			25			27			104		107
Operating lease expense		10			14			12			47		57
Marketing		18			16			20			51		68
FDIC assessment		7			7			8			30		31
Intangible asset amortization on credit cards		7			8			8			30		14
Other intangible asset amortization		3			4			4			14		9
Provision (credit) for losses on lending-related commitments		(3	)		3			(14	)		8		(16	)
OREO expense, net		2			1			1			7		15
Other expense		89			83			85			338		349

Total noninterest expense		712			716			734			2,820		2,818

Income (loss) from continuing operations before income taxes		305			293			249			1,141		1,073
Income taxes		70			59			53			271		231

Income (loss) from continuing operations		235			234			196			870		842
Income (loss) from discontinued operations, net of taxes		(5	)		37			7			40		23

Net income (loss)		230			271			203			910		865
Less: Net income (loss) attributable to noncontrolling interests		—			(1	)		—			—		7

Net income (loss) attributable to Key	$	230		$	272		$	203		$	910	$	858

Income (loss) from continuing operations attributable to Key common shareholders	$	229		$	229		$	190		$	847	$	813
Net income (loss) attributable to Key common shareholders		224			266			197			887		836
Per common share
Income (loss) from continuing operations attributable to Key common shareholders	$	.26		$	.25		$	.21		$	.93	$	.87
Income (loss) from discontinued operations, net of taxes		(.01	)		.04			.01			.04		.02
Net income (loss) attributable to Key common shareholders ^(b)		.25			.29			.21			.98		.89
Per common share — assuming dilution
Income (loss) from continuing operations attributable to Key common shareholders	$	.26		$	.25		$	.20		$	.93	$	.86
Income (loss) from discontinued operations, net of taxes		(.01	)		.04			.01			.04		.02
Net income (loss) attributable to Key common shareholders ^(b)		.25			.29			.21			.97		.89
Cash dividends declared per common share	$	.055		$	.055		$	.05		$	.215	$	.18
Weighted-average common shares outstanding (000)		890,516			901,904			925,725			906,524		938,941
Weighted-average common shares and potential common shares outstanding (000) ^(c)		897,712			928,854			930,382			912,571		943,259

(a)	For the three months ended December 31, 2013, September 30, 2013, and December 31, 2012, 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 Fourth Quarter 2013 Profit

January 23, 2014

Page 20

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

(dollars in millions)


	Fourth Quarter 2013								Third Quarter 2013								Fourth Quarter 2012
	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^(d)	$	24,218		$	212		3.47	%	$	23,864		$	213		3.54	%	$	22,436		$	213		3.77	%
Real estate — commercial mortgage		7,678			78		4.01			7,575			77		4.06			7,555			82		4.35
Real estate — construction		1,075			11		4.21			1,073			12		4.24			1,070			14		4.94
Commercial lease financing		4,513			41		3.62			4,633			36		3.14			4,869			49		4.01

Total commercial loans		37,484			342		3.62			37,145			338		3.61			35,930			358		3.96
Real estate — residential mortgage		2,199			24		4.43			2,193			25		4.43			2,164			26		4.70
Home equity:
Key Community Bank		10,310			102		3.92			10,247			101		3.92			9,807			98		3.99
Other		343			7		7.72			364			7		7.72			411			9		8.23

Total home equity loans		10,653			109		4.04			10,611			108		4.05			10,218			107		4.16
Consumer other — Key Community Bank		1,446			26		7.18			1,435			26		7.24			1,339			32		9.63
Credit cards		701			20		11.17			700			21		11.77			714			23		13.15
Consumer other:
Marine		1,056			17		6.24			1,120			17		6.26			1,403			22		6.16
Other		69			1		8.03			67			2		8.72			91			1		8.25

Total consumer other		1,125			18		6.35			1,187			19		6.40			1,494			23		6.29

Total consumer loans		16,124			197		4.88			16,126			199		4.93			15,929			211		5.30

Total loans		53,608			539		3.98			53,271			537		4.00			51,859			569		4.37
Loans held for sale		688			6		3.65			456			5		4.06			618			5		3.47
Securities available for sale^{(b), (e)}		12,464			74		2.40			12,926			77		2.37			11,980			84		2.95
Held-to-maturity securities^(b)		4,775			22		1.85			4,796			22		1.84			4,036			19		1.94
Trading account assets		819			6		2.90			747			5		2.52			606			3		1.91
Short-term investments		4,455			2		.18			1,615			1		.20			2,090			2		.27
Other investments^(e)		983			6		2.47			1,022			6		2.67			1,088			12		4.05

Total earning assets		77,792			655		3.37			74,833			653		3.49			72,277			694		3.85
Allowance for loan and lease losses		(859	)							(873	)							(898	)
Accrued income and other assets		9,467								9,549								9,878
Discontinued assets		4,777								5,061								5,350

Total assets	$	91,177							$	88,570							$	86,607

Liabilities
NOW and money market deposit accounts	$	33,834			12		.15		$	32,736			13		.15		$	31,058			14		.18
Savings deposits		2,483			—		.03			2,520			—		.04			2,408			—		.06
Certificates of deposit ($100,000 or more)^(f)		2,649			11		1.57			2,785			12		1.67			2,992			16		2.15
Other time deposits		3,736			11		1.16			3,957			12		1.24			4,714			18		1.52
Deposits in foreign office		615			—		.21			621			—		.20			874			1		.21

Total interest-bearing deposits		43,317			34		.32			42,619			37		.35			42,046			49		.47
Federal funds purchased and securities sold under repurchase agreements		1,618			—		.15			1,837			1		.08			1,702			1		.16
Bank notes and other short-term borrowings		438			3		1.96			383			2		1.98			306			2		1.97
Long-term debt^{(f), (g)}		4,174			29		2.94			3,504			29		3.41			3,301			35		4.84

Total interest-bearing liabilities		49,547			66		.53			48,343			69		.56			47,355			87		.73

Noninterest-bearing deposits		25,077								23,364								21,889
Accrued expense and other liabilities		1,548								1,626								1,747
Discontinued liabilities^(g)		4,717								4,968								5,321

Total liabilities		80,889								78,301								76,312
Equity
Key shareholders’ equity		10,272								10,237								10,261
Noncontrolling interests		16								32								34

Total equity		10,288								10,269								10,295

Total liabilities and equity	$	91,177							$	88,570							$	86,607

Interest rate spread (TE)							2.84	%							2.93	%							3.12	%

Net interest income (TE) and net interest margin (TE)					589		3.01	%					584		3.11	%					607		3.37	%

TE adjustment^(b)					6								6								6

Net interest income, GAAP basis				$	583							$	578							$	601

(a)	Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (g) 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)	Commercial, financial and agricultural average balance for the three months ended December 31, 2013, September 30, 2013, and December 31, 2012 includes $97 million, $96 million, and $90 million, respectively, of assets from commercial credit cards.

(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

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

Page 21

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

(dollars in millions)


	Twelve months ended December 31, 2013								Twelve months ended December 31, 2012
	Average Balance			Interest^(a)		Yield/Rate ^(a)			Average Balance			Interest^(a)		Yield/Rate ^(a)
Assets
Loans:^{(b), (c)}
Commercial, financial and agricultural ^(d)	$	23,723		$	855		3.60	%	$	21,141		$	810		3.83	%
Real estate — commercial mortgage		7,591			312		4.11			7,656			339		4.43
Real estate — construction		1,058			45		4.25			1,171			56		4.74
Commercial lease financing		4,683			172		3.67			5,142			187		3.64

Total commercial loans		37,055			1,384		3.73			35,110			1,392		3.96
Real estate — residential mortgage		2,185			98		4.49			2,049			100		4.86
Home equity:
Key Community Bank		10,086			397		3.93			9,520			384		4.03
Other		377			29		7.70			473			37		7.81

Total home equity loans		10,463			426		4.07			9,993			421		4.21
Consumer other — Key Community Bank		1,404			103		7.33			1,269			121		9.53
Credit cards		701			83		11.86			288			40		13.99
Consumer other:
Marine		1,172			74		6.26			1,551			97		6.26
Other		74			6		8.32			102			8		8.14

Total consumer other		1,246			80		6.38			1,653			105		6.38

Total consumer loans		15,999			790		4.94			15,252			787		5.16

Total loans		53,054			2,174		4.10			50,362			2,179		4.33
Loans held for sale		532			20		3.72			579			20		3.45
Securities available for sale^{(b), (e)}		12,689			311		2.49			13,422			399		3.08
Held-to-maturity securities^(b)		4,387			82		1.87			3,511			69		1.97
Trading account assets		756			21		2.78			718			18		2.48
Short-term investments		2,948			6		.20			2,116			6		.27
Other investments^(e)		1,028			29		2.84			1,141			38		3.27

Total earning assets		75,394			2,643		3.51			71,849			2,729		3.82
Allowance for loan and lease losses		(879	)							(919	)
Accrued income and other assets		9,662								9,912
Discontinued assets		5,036								5,573

Total assets	$	89,213							$	86,415

Liabilities
NOW and money market deposit accounts	$	32,846			53		.16		$	29,673			56		.19
Savings deposits		2,505			1		.04			2,218			1		.05
Certificates of deposit ($100,000 or more)^(f)		2,829			50		1.76			3,574			94		2.64
Other time deposits		4,084			53		1.30			5,386			104		1.92
Deposits in foreign office		567			1		.23			767			2		.23

Total interest-bearing deposits		42,831			158		.37			41,618			257		.62
Federal funds purchased and securities sold under repurchase agreements		1,802			2		.13			1,814			4		.19
Bank notes and other short-term borrowings		394			8		1.89			413			7		1.69
Long-term debt^{(f), (g)}		4,184			127		3.28			4,673			173		4.10

Total interest-bearing liabilities		49,211			295		.60			48,518			441		.92

Noninterest-bearing deposits		23,046								20,217
Accrued expense and other liabilities		1,656								1,958
Discontinued liabilities^(g)		4,995								5,555

Total liabilities		78,908								76,248
Equity
Key shareholders’ equity		10,276								10,144
Noncontrolling interests		29								23

Total equity		10,305								10,167

Total liabilities and equity	$	89,213							$	86,415

Interest rate spread (TE)							2.91	%							2.90	%

Net interest income (TE) and net interest margin (TE)					2,348		3.12	%					2,288		3.21	%

TE adjustment^(b)					23								24

Net interest income, GAAP basis				$	2,325							$	2,264

(a)	Results are from continuing operations. Interest excludes the interest associated with the liabilities referred to in (g) 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)	Commercial, financial and agricultural average balance for the twelve months ended December 31, 2013 and December 31, 2012 includes $95 million and $36 million, respectively, of assets from commercial credit cards.

(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

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

Page 22

Noninterest Expense

(dollars in millions)


	Three months ended								Twelve months ended
	12-31-13			9-30-13		12-31-12			12-31-13		12-31-12
Personnel ^(a)	$	398		$	414	$	422		$	1,609	$	1,570
Net occupancy		73			66		69			275		260
Computer processing		40			38		38			156		164
Business services and professional fees		42			37		54			151		190
Equipment		26			25		27			104		107
Operating lease expense		10			14		12			47		57
Marketing		18			16		20			51		68
FDIC assessment		7			7		8			30		31
Intangible asset amortization on credit cards		7			8		8			30		14
Other intangible asset amortization		3			4		4			14		9
Provision (credit) for losses on lending-related commitments		(3	)		3		(14	)		8		(16	)
OREO expense, net		2			1		1			7		15
Other expense		89			83		85			338		349

Total noninterest expense	$	712		$	716	$	734		$	2,820	$	2,818

Average full-time equivalent employees ^(b)		14,197			14,555		15,589			14,783		15,589

(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
	12-31-13		9-30-13		12-31-12		12-31-13		12-31-12
Salaries	$	226	$	222	$	228	$	897	$	902
Technology contract labor, net		16		19		24		72		69
Incentive compensation		87		81		81		318		290
Employee benefits		56		78		65		249		237
Stock-based compensation		8		8		13		35		49
Severance		5		6		11		38		23

Total personnel expense	$	398	$	414	$	422	$	1,609	$	1,570

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

Page 23

Loan Composition

(dollars in millions)


							Percent change 12-31-13 vs.
	12-31-13		9-30-13		12-31-12		9-30-13			12-31-12
Commercial, financial and agricultural ^(a)	$	24,963	$	24,317	$	23,242		2.7	%		7.4	%
Commercial real estate:
Commercial mortgage		7,720		7,544		7,720		2.3			—
Construction		1,093		1,058		1,003		3.3			9.0

Total commercial real estate loans		8,813		8,602		8,723		2.5			1.0
Commercial lease financing		4,551		4,550		4,915		—			(7.4	)

Total commercial loans		38,327		37,469		36,880		2.3			3.9
Residential — prime loans:
Real estate — residential mortgage		2,187		2,198		2,174		(.5	)		.6
Home equity:
Key Community Bank		10,340		10,285		9,816		.5			5.3
Other		334		353		423		(5.4	)		(21.0	)

Total home equity loans		10,674		10,638		10,239		.3			4.2

Total residential — prime loans		12,861		12,836		12,413		.2			3.6
Consumer other — Key Community Bank		1,449		1,440		1,349		.6			7.4
Credit cards		722		698		729		3.4			(1.0	)
Consumer other:
Marine		1,028		1,083		1,358		(5.1	)		(24.3	)
Other		70		71		93		(1.4	)		(24.7	)

Total consumer other		1,098		1,154		1,451		(4.9	)		(24.3	)

Total consumer loans		16,130		16,128		15,942		—			1.2

Total loans^{(b), (c)}	$	54,457	$	53,597	$	52,822		1.6	%		3.1	%

Loans Held for Sale Composition

(dollars in millions)


							Percent change 12-31-13 vs.
	12-31-13		9-30-13		12-31-12		9-30-13			12-31-12
Commercial, financial and agricultural	$	278	$	68	$	29		308.8	%		858.6	%
Real estate — commercial mortgage		307		608		477		(49.5	)		(35.6	)
Commercial lease financing		9		—		8		N/M			12.5
Real estate — residential mortgage		17		23		85		(26.1	)		(80.0	)

Total loans held for sale	$	611	$	699	$	599		(12.6	)%		2.0	%

Summary of Changes in Loans Held for Sale

(dollars in millions)


	4Q13			3Q13			2Q13			1Q13			4Q12
Balance at beginning of period	$	699		$	402		$	434		$	599		$	628
New originations		1,669			1,467			1,241			1,075			1,686
Transfers from held to maturity, net		1			15			17			19			38
Loan sales		(1,750	)		(1,181	)		(1,292	)		(1,257	)		(1,747	)
Loan draws (payments), net		(8	)		(4	)		—			—			(4	)
Transfers to OREO / valuation adjustments		—			—			2			(2	)		(2	)

Balance at end of period	$	611		$	699		$	402		$	434		$	599

(a)	December 31, 2013, September 30, 2013, and December 31, 2012 loan balances include $94 million, $96 million, and $90 million, respectively, of commercial credit card balances.

(b)	Excluded at December 31, 2013, September 30, 2013, and December 31, 2012 are loans in the amount of $4.5 billion, $4.7 billion, and $5.2 billion, respectively, related to the discontinued operations of the education lending business.

(c)

December 31, 2013 loan balance includes purchased loans of $166 million of which $16 million were purchased credit impaired. September 30, 2013 loan balance includes purchased loans of $176 million of which $18 million were purchased credit impaired. December 31, 2012 loan balance includes purchased loans of $217 million of which $23 million were purchased credit impaired.

N/M = Not Meaningful

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

Page 24

Exit Loan Portfolio From Continuing Operations

(dollars in millions)


	Balance				Change			Net Loan						Balance on
	Outstanding				12-31-13 vs.			Charge-offs						Nonperforming Status
	12-31-13		9-30-13		9-30-13			4Q13^(c)			3Q13^(c)			12-31-13		9-30-13
Residential properties — homebuilder	$	20	$	26	$	(6	)		—			—		$	7	$	8
Marine and RV floor plan		24		25		(1	)		—			—			6		6
Commercial lease financing^(a)		782		796		(14	)	$	(2	)	$	(2	)		—		1

Total commercial loans		826		847		(21	)		(2	)		(2	)		13		15
Home equity — Other		334		353		(19	)		3			2			16		14
Marine		1,028		1,083		(55	)		5			1			26		25
RV and other consumer		70		71		(1	)		1			—			1		2

Total consumer loans		1,432		1,507		(75	)		9			3			43		41

Total exit loans in loan portfolio	$	2,258	$	2,354	$	(96	)	$	7		$	1		$	56	$	56

Discontinued operations — education lending business (not included in exit loans above)^(b)	$	4,497	$	4,738	$	(241	)	$	9		$	9		$	25	$	23

(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)


	4Q13			3Q13			2Q13			1Q13			4Q12
Net loan charge-offs	$	37		$	37		$	45		$	49		$	58
Net loan charge-offs to average total loans		.27	%		.28	%		.34	%		.38	%		.44	%
Allowance for loan and lease losses	$	848		$	868		$	876		$	893		$	888
Allowance for credit losses^(a)		885			908			913			925			917
Allowance for loan and lease losses to period-end loans		1.56	%		1.62	%		1.65	%		1.70	%		1.68	%
Allowance for credit losses to period-end loans		1.63			1.69			1.72			1.76			1.74
Allowance for loan and lease losses to nonperforming loans		166.9			160.4			134.4			137.4			131.8
Allowance for credit losses to nonperforming loans		174.2			167.8			140.0			142.3			136.1
Nonperforming loans at period end^(b)	$	508		$	541		$	652		$	650		$	674
Nonperforming assets at period end		531			579			693			705			735
Nonperforming loans to period-end portfolio loans		.93	%		1.01	%		1.23	%		1.24	%		1.28	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		.97			1.08			1.30			1.34			1.39

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

(b)	December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013, and December 31, 2012 amounts exclude $16 million, $18 million, $19 million, $22 million, and $23 million, respectively, of purchased credit impaired loans acquired in July 2012.

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

Page 25

Summary of Loan and Lease Loss Experience From Continuing Operations

(dollars in millions)


	Three months ended									Twelve months ended
	12-31-13			9-30-13			12-31-12			12-31-13			12-31-12
Average loans outstanding	$	53,608		$	53,271		$	51,859		$	53,054		$	50,362

Allowance for loan and lease losses at beginning of period	$	868		$	876		$	888		$	888		$	1,004
Loans charged off:
Commercial, financial and agricultural		18			15			15			62			80
Real estate — commercial mortgage		2			2			33			20			102
Real estate — construction		1			—			5			3			24

Total commercial real estate loans		3			2			38			23			126
Commercial lease financing		2			17			7			27			27

Total commercial loans		23			34			60			112			233
Real estate — residential mortgage ^(a)		7			3			8			20			27
Home equity:
Key Community Bank^(a)		12			14			(14	)		62			99
Other^(a)		4			4			12			20			35

Total home equity loans		16			18			(2	)		82			134
Consumer other — Key Community Bank		7			8			9			31			38
Credit cards		5			9			9			30			11
Consumer other:
Marine^(a)		7			5			18			29			59
Other^(a)		1			1			2			4			6

Total consumer other		8			6			20			33			65

Total consumer loans		43			44			44			196			275

Total loans charged off		66			78			104			308			508
Recoveries:
Commercial, financial and agricultural		9			11			23			39			63
Real estate — commercial mortgage		7			10			5			27			23
Real estate — construction		—			6			2			14			5

Total commercial real estate loans		7			16			7			41			28
Commercial lease financing		5			2			4			15			22

Total commercial loans		21			29			34			95			113
Real estate — residential mortgage		1			1			1			2			3
Home equity:
Key Community Bank		2			2			4			10			11
Other		1			2			1			6			5

Total home equity loans		3			4			5			16			16
Consumer other — Key Community Bank		2			1			1			7			6
Credit cards		—			1			—			3			—
Consumer other:
Marine		2			4			4			15			22
Other		—			1			1			2			3

Total consumer other		2			5			5			17			25

Total consumer loans		8			12			12			45			50

Total recoveries		29			41			46			140			163

Net loan charge-offs		(37	)		(37	)		(58	)		(168	)		(345	)
Provision (credit) for loan and lease losses		19			28			57			130			229
Foreign currency translation adjustment		(2	)		1			1			(2	)		—

Allowance for loan and lease losses at end of period	$	848		$	868		$	888		$	848		$	888

Liability for credit losses on lending-related commitments at beginning of period	$	40		$	37		$	43		$	29		$	45
Provision (credit) for losses on lending-related commitments		(3	)		3			(14	)		8			(16	)

Liability for credit losses on lending-related commitments at end of period^(b)	$	37		$	40		$	29		$	37		$	29

Total allowance for credit losses at end of period	$	885		$	908		$	917		$	885		$	917

Net loan charge-offs to average total loans		.27	%		.28	%		.44	%		.32	%		.69	%
Allowance for loan and lease losses to period-end loans		1.56			1.62			1.68			1.56			1.68
Allowance for credit losses to period-end loans		1.63			1.69			1.74			1.63			1.74
Allowance for loan and lease losses to nonperforming loans		166.9			160.4			131.8			166.9			131.8
Allowance for credit losses to nonperforming loans		174.2			167.8			136.1			174.2			136.1
Discontinued operations — education lending business:
Loans charged off	$	13		$	14		$	19		$	55		$	75
Recoveries		4			5			4			18			17

Net loan charge-offs	$	(9	)	$	(9	)	$	(15	)	$	(37	)	$	(58	)

(a)

Further review of the loans subject to updated regulatory guidance in the third quarter of 2012 was performing during the fourth quarter of 2012. This review resulted in a partial home equity loan charge-off reversal and reallocation of the updated charge-off amounts to other consumer loan portfolios. Home equity — Key Community Bank charge-offs were $18 million prior to adjustments made from this review. Prior to reallocation, Real estate — residential mortgage, Home equity — Other, Consumer other — Marine, and Consumer other — Other charge-offs were $3 million, $6 million, $11 million, and $1 million, respectively.

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

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

Page 26

Summary of Nonperforming Assets and Past Due Loans From Continuing Operations

(dollars in millions)


	12-31-13			9-30-13			6-30-13			3-31-13			12-31-12
Commercial, financial and agricultural	$	77		$	102		$	146		$	142		$	99
Real estate — commercial mortgage		37			58			106			114			120
Real estate — construction		14			17			26			27			56

Total commercial real estate loans		51			75			132			141			176
Commercial lease financing		19			22			14			12			16

Total commercial loans		147			199			292			295			291
Real estate — residential mortgage		107			98			94			96			103
Home equity:
Key Community Bank		205			198			205			199			210
Other		15			13			16			18			21

Total home equity loans		220			211			221			217			231
Consumer other — Key Community Bank		3			2			3			3			2
Credit cards		4			4			11			13			11
Consumer other:
Marine		26			25			30			25			34
Other		1			2			1			1			2

Total consumer other		27			27			31			26			36

Total consumer loans		361			342			360			355			383

Total nonperforming loans^(a)		508			541			652			650			674
Nonperforming loans held for sale		1			13			14			23			25
OREO		15			15			18			21			22
Other nonperforming assets		7			10			9			11			14

Total nonperforming assets	$	531		$	579		$	693		$	705		$	735

Accruing loans past due 90 days or more	$	71		$	90		$	80		$	83		$	78
Accruing loans past due 30 through 89 days		318			288			251			368			424
Restructured loans — accruing and nonaccruing^(b)		338			349			311			294			320
Restructured loans included in nonperforming loans^(b)		214			228			195			178			249
Nonperforming assets from discontinued operations — education lending business		25			23			19			15			20
Nonperforming loans to period-end portfolio loans		.93	%		1.01	%		1.23	%		1.24	%		1.28	%
Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets		.97			1.08			1.30			1.34			1.39

(a)	December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013, and December 31, 2012 amounts exclude $16 million, $18 million, $19 million, $22 million, and $23 million, respectively, 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 Fourth Quarter 2013 Profit

January 23, 2014

Page 27

Summary of Changes in Nonperforming Loans From Continuing Operations

(in millions)


	4Q13			3Q13			2Q13			1Q13			4Q12
Balance at beginning of period	$	541		$	652		$	650		$	674		$	653
Loans placed on nonaccrual status		129			161			160			278			288
Charge-offs		(66	)		(78	)		(74	)		(91	)		(104	)
Loans sold		(19	)		(61	)		(5	)		(42	)		(44	)
Payments		(46	)		(43	)		(36	)		(83	)		(78	)
Transfers to OREO		(5	)		(2	)		(7	)		(7	)		(7	)
Transfers to nonperforming loans held for sale		—			—			—			—			(8	)
Transfers to other nonperforming assets		—			—			—			—			(1	)
Loans returned to accrual status		(26	)		(88	)		(36	)		(79	)		(25	)

Balance at end of period^(a)	$	508		$	541		$	652		$	650		$	674

(a)	December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013, and December 31, 2012 amounts exclude $16 million, $18 million, $19 million, $22 million, and $23 million, respectively, of purchased credit impaired loans acquired in July 2012.

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

(in millions)


	4Q13			3Q13			2Q13			1Q13			4Q12
Balance at beginning of period	$	13		$	14		$	23		$	25		$	19
Transfers in		—			—			—			—			8
Net advances / (payments)		(1	)		(1	)		(1	)		—			(1	)
Loans sold		(11	)		—			(8	)		—			(1	)
Valuation adjustments		—			—			—			(2	)		—

Balance at end of period	$	1		$	13		$	14		$	23		$	25

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

(in millions)


	4Q13			3Q13			2Q13			1Q13			4Q12
Balance at beginning of period	$	15		$	18		$	21		$	22		$	29
Properties acquired — nonperforming loans		5			2			7			7			7
Valuation adjustments		(1	)		(1	)		(2	)		(3	)		(2	)
Properties sold		(5	)		(4	)		(8	)		(5	)		(12	)

Balance at end of period	$	14		$	15		$	18		$	21		$	22

KeyCorp Reports Fourth Quarter 2013 Profit

January 23, 2014

Page 28

Line of Business Results

(dollars in millions)


																Percent change 4Q13 vs.
	4Q13			3Q13			2Q13			1Q13			4Q12			3Q13			4Q12
Key Community Bank
Summary of operations
Total revenue (TE)	$	534		$	551		$	556		$	549		$	580			(3.1	)%		(7.9	)%
Provision (credit) for loan and lease losses		33			24			41			59			26			37.5			26.9
Noninterest expense		456			441			456			439			502			3.4			(9.2	)
Net income (loss) attributable to Key		28			54			37			32			33			(48.1	)		(15.2	)
Average loans and leases		29,596			29,495			29,161			28,977			28,629			.3			3.4
Average deposits		50,409			49,652			49,473			49,349			49,839			1.5			1.1
Net loan charge-offs		31			27			42			47			12			14.8			158.3
Net loan charge-offs to average total loans		.42	%		.36	%		.58	%		.66	%		.17	%		N/A			N/A
Nonperforming assets at period end	$	396		$	383		$	476		$	481		$	444			3.4			(10.8	)
Return on average allocated equity		3.97	%		7.49	%		5.16	%		4.53	%		4.56	%		N/A			N/A
Average full-time equivalent employees		7,805			7,990			8,316			8,709			8,869			(2.3	)		(12.0	)
Key Corporate Bank
Summary of operations
Total revenue (TE)	$	407		$	377		$	375		$	379		$	402			8.0	%		1.2	%
Provision (credit) for loan and lease losses		(13	)		13			(10	)		4			11			N/M			N/M
Noninterest expense		225			217			202			210			207			3.7			8.7
Net income (loss) attributable to Key		127			96			116			105			115			32.3			10.4
Average loans and leases		21,013			20,586			20,133			20,044			19,481			2.1			7.9
Average loans held for sale		668			422			466			409			538			58.3			24.2
Average deposits		17,372			16,125			15,606			13,968			13,681			7.7			27.0
Net loan charge-offs		1			7			(6	)		(1	)		21			(85.7	)		(95.2	)
Net loan charge-offs to average total loans		.02	%		.13	%		(.12	)%		(.02	)%		.43	%		N/A			N/A
Nonperforming assets at period end	$	59		$	119		$	136		$	136		$	174			(50.4	)		(66.1	)
Return on average allocated equity		31.35	%		23.32	%		28.58	%		26.37	%		28.02	%		N/A			N/A
Average full-time equivalent employees		1,968			2,018			1,955			1,930			1,920			(2.5	)		2.5

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

KEYCORP /NEW/ - FORM 8-K - EX-99.1 - January 23, 2014

Attached files

KEYCORP /NEW/ Reports