/FIRST ADD -- CLTU003 -- KeyCorp Earnings/

Financial Highlights (dollars in millions, except per share amounts) Three months ended 12-31-07 9-30-07 12-31-06 Summary of operations Net interest income (TE) $750 $712 $744 Noninterest income 488 438 558 Total revenue (TE) 1,238 1,150 1,302 Provision for loan losses 363 69 53 Noninterest expense 896 753 809 Income from continuing operations before cumulative effect of accounting change 22 224 311 Income (loss) from discontinued operations, net of taxes (a) 3 (14) (165) Net income 25 210 146 Per common share Income from continuing operations before cumulative effect of accounting change $.06 $.58 $.77 Income from continuing operations before cumulative effect of accounting change - assuming dilution .06 .57 .76 Income (loss) from discontinued operations (a) .01 (.03) (.41) Income (loss) from discontinued operations - assuming dilution (a) .01 (.03) (.40) Net income .06 .54 .36 Net income - assuming dilution .06 .54 .36 Cash dividends paid .365 .365 .345 Book value at period end 19.92 20.12 19.30 Market price at period end 23.45 32.33 38.03 Performance ratios - from continuing operations Return on average total assets .09 % .93 % 1.33 % Return on average equity 1.11 11.50 15.63 Net interest margin (TE) 3.48 3.40 3.66 Performance ratios - from consolidated operations Return on average total assets .10 % .88 % .61 % Return on average equity 1.26 10.79 7.34 Net interest margin (TE) 3.48 3.40 3.69 Capital ratios at period end Equity to assets 7.75 % 8.03 % 8.34 % Tangible equity to tangible assets 6.46 6.78 7.01 Tier 1 risk-based capital (b) 7.37 7.94 8.24 Total risk-based capital (b) 11.29 11.76 12.43 Leverage (b) 8.30 8.96 8.98 Asset quality Net loan charge-offs $119 $59 $54 Net loan charge-offs to average loans from continuing operations .67 % .35 % .33 % Allowance for loan losses $1,200 $955 $944 Allowance for loan losses to period- end loans 1.69 % 1.38 % 1.43 % Allowance for loan losses to nonperforming loans 174.67 191.77 439.07 Nonperforming loans at period end $687 $498 $215 Nonperforming assets at period end 764 570 273 Nonperforming loans to period-end portfolio loans .97 % .72 % .33 % Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets 1.08 .83 .41 Trust and brokerage assets Assets under management $85,442 $88,100 $84,699 Nonmanaged and brokerage assets (c) 33,918 33,273 56,292 Other data Average full-time equivalent employees 18,500 18,567 20,100 Branches 955 954 950 Taxable-equivalent adjustment $40 $18 $32 Financial Highlights (continued) (dollars in millions, except per share amounts) Twelve months ended 12-31-07 12-31-06 Summary of operations Net interest income (TE) $2,868 $2,918 Noninterest income 2,229 2,127 Total revenue (TE) 5,097 5,045 Provision for loan losses 529 150 Noninterest expense 3,248 3,149 Income from continuing operations before cumulative effect of accounting change 941 1,193 Loss from discontinued operations, net of taxes (a) (22) (143) Net income 919 1,055 Per common share Income from continuing operations before cumulative effect of accounting change $2.40 $2.95 Income from continuing operations before cumulative effect of accounting change - assuming dilution 2.38 2.91 Loss from discontinued operations (a) (.06) (.35) Loss from discontinued operations - assuming dilution (a) (.05) (.35) Net income 2.35 2.61 Net income - assuming dilution 2.32 2.57 Cash dividends paid 1.46 1.38 Performance ratios - from continuing operations Return on average total assets .99 % 1.30 % Return on average equity 12.19 15.43 Net interest margin (TE) 3.46 3.67 Performance ratios - from consolidated operations Return on average total assets .97 % 1.12 % Return on average equity 11.90 13.64 Net interest margin (TE) 3.46 3.69 Asset quality Net loan charge-offs $275 $170 Net loan charge-offs to average loans from continuing operations .41 % .26 % Other data Average full-time equivalent employees 18,934 20,006 Taxable-equivalent adjustment $99 $103 (a) Key sold the subprime mortgage loan portfolio held by the Champion Mortgage finance business in November 2006, and completed the sale of Champion's origination platform in February 2007. As a result of these actions, Key has accounted for this business as a discontinued operation. (b) 12-31-07 ratio is estimated. (c) On February 9, 2007, Key sold the McDonald Investments branch network. TE = Taxable Equivalent Consolidated Balance Sheets (dollars in millions) 12-31-07 9-30-07 12-31-06 Assets Loans $70,823 $68,999 $65,826 Loans held for sale 4,736 4,791 3,637 Securities available for sale 7,860 7,915 7,827 Held-to-maturity securities 28 36 41 Trading account assets 1,056 1,060 912 Short-term investments 800 663 495 Other investments 1,538 1,509 1,352 Total earning assets 86,841 84,973 80,090 Allowance for loan losses (1,200) (955) (944) Cash and due from banks 1,814 2,016 2,264 Premises and equipment 681 631 595 Operating lease assets 1,128 1,135 1,124 Goodwill 1,252 1,202 1,202 Other intangible assets 123 105 120 Corporate-owned life insurance 2,872 2,845 2,782 Derivative assets 2,205 1,497 1,091 Accrued income and other assets 4,267 3,917 4,013 Total assets $99,983 $97,366 $92,337 Liabilities Deposits in domestic offices: NOW and money market deposit accounts $27,635 $24,198 $24,340 Savings deposits 1,513 1,544 1,642 Certificates of deposit ($100,000 or more) 6,982 6,672 5,941 Other time deposits 11,615 11,403 11,956 Total interest-bearing deposits 47,745 43,817 43,879 Noninterest-bearing deposits 11,028 14,003 13,553 Deposits in foreign office - interest-bearing 4,326 5,894 1,684 Total deposits 63,099 63,714 59,116 Federal funds purchased and securities sold under repurchase agreements 3,927 5,398 3,643 Bank notes and other short-term borrowings 6,453 2,743 1,192 Derivative liabilities 1,340 1,063 922 Accrued expense and other liabilities 5,461 5,079 5,228 Long-term debt 11,957 11,549 14,533 Total liabilities 92,237 89,546 84,634 Shareholders' equity Preferred stock - - - Common shares 492 492 492 Capital surplus 1,623 1,617 1,602 Retained earnings 8,522 8,788 8,377 Treasury stock, at cost (3,021) (3,023) (2,584) Accumulated other comprehensive income (loss) 130 (54) (184) Total shareholders' equity 7,746 7,820 7,703 Total liabilities and shareholders' equity $99,983 $97,366 $92,337 Common shares outstanding (000) 388,793 388,708 399,153 Consolidated Statements of Income (dollars in millions, except per share amounts) Three months ended Twelve months ended 12-31-07 9-30-07 12-31-06 12-31-07 12-31-06 Interest income Loans $1,205 $1,209 $1,187 $4,751 $4,561 Loans held for sale 89 91 90 337 325 Securities available for sale 115 106 96 427 347 Held-to-maturity securities 1 - - 2 2 Trading account assets 12 11 8 38 30 Short-term investments 13 5 8 37 33 Other investments 12 12 24 52 82 Total interest income 1,447 1,434 1,413 5,644 5,380 Interest expense Deposits 483 482 440 1,845 1,576 Federal funds purchased and securities sold under repurchase agreements 45 55 37 208 107 Bank notes and other short- term borrowings 45 30 19 104 94 Long-term debt 164 173 205 718 788 Total interest expense 737 740 701 2,875 2,565 Net interest income 710 694 712 2,769 2,815 Provision for loan losses 363 69 53 529 150 Net interest income after provision for loan losses 347 625 659 2,240 2,665 Noninterest income Trust and investment services income 131 119 142 490 553 Service charges on deposit accounts 90 88 77 337 304 Investment banking and capital markets income 12 9 69 117 230 Operating lease income 72 70 63 272 229 Letter of credit and loan fees 58 51 55 192 188 Corporate-owned life insurance income 37 27 31 121 105 Electronic banking fees 25 25 27 99 105 Net (losses) gains from loan securitizations and sales (6) (53) 42 (17) 76 Net securities gains (losses) 6 4 3 (35) 1 Net gains from principal investing 6 9 5 134 53 Gain from sale of McDonald Investments branch network - - - 171 - Other income 57 89 44 348 283 Total noninterest income 488 438 558 2,229 2,127 Noninterest expense Personnel 399 383 447 1,621 1,692 Net occupancy 64 60 68 246 250 Computer processing 52 49 55 201 212 Operating lease expense 59 58 50 224 184 Professional fees 38 27 33 117 134 Equipment 25 22 24 96 102 Marketing 16 21 27 76 97 Other expense 243 133 105 667 478 Total noninterest expense 896 753 809 3,248 3,149 (Loss) income from continuing operations before income taxes and cumulative effect of accounting change (61) 310 408 1,221 1,643 Income taxes (83) 86 97 280 450 Income from continuing operations before cumulative effect of accounting change 22 224 311 941 1,193 Income (loss) from discontinued operations, net of taxes 3 (14) (165) (22) (143) Income before cumulative effect of accounting change 25 210 146 919 1,050 Cumulative effect of change in accounting for forfeited stock-based awards, net of taxes - - - - 5 Net income $25 $210 $146 $919 $1,055 Per common share: Income from continuing operations before cumulative effect of accounting change $.06 $.58 $.77 $2.40 $2.95 Income before cumulative effect of accounting change .06 .54 .36 2.35 2.60 Net income .06 .54 .36 2.35 2.61 Per common share - assuming dilution: Income from continuing operations before cumulative effect of accounting change $.06 $.57 $.76 $2.38 $2.91 Income before cumulative effect of accounting change .06 .54 .36 2.32 2.56 Net income .06 .54 .36 2.32 2.57 Cash dividends declared per common share $.74 $.365 $.345 $1.835 $1.38 Weighted-average common shares outstanding (000) 388,841 389,319 402,329 391,988 404,490 Weighted-average common shares and potential common shares outstanding (000) 389,911 393,164 407,828 395,823 410,222 Consolidated Average Balance Sheets, Net Interest Income and Yields/Rates From Continuing Operations (dollars in millions) Fourth Quarter 2007 Average Balance Interest Yield/Rate Assets Loans: (a,b) Commercial, financial and agricultural $23,825 $419 6.98 % Real estate - commercial mortgage 9,351 175 7.42 Real estate - construction 8,192 153 7.42 Commercial lease financing 10,252 171 6.65 Total commercial loans 51,620 918 7.06 Real estate - residential 1,596 27 6.72 Home equity 10,917 192 7.02 Consumer - direct 1,308 35 10.73 Consumer - indirect 4,276 73 6.76 Total consumer loans 18,097 327 7.20 Total loans 69,717 1,245 7.10 Loans held for sale 4,748 89 7.53 Securities available for sale (c) 7,858 115 5.89 Held-to-maturity securities (a) 30 1 6.24 Trading account assets 1,042 12 4.40 Short-term investments 1,226 13 3.94 Other investments (c) 1,589 12 3.02 Total earning assets 86,210 1,487 6.86 Allowance for loan losses (966) Accrued income and other assets 13,547 Total assets $98,791 Liabilities NOW and money market deposit accounts $25,687 197 3.05 Savings deposits 1,523 1 .19 Certificates of deposit ($100,000 or more) (d) 6,887 86 4.98 Other time deposits 11,455 135 4.68 Deposits in foreign office (e) 5,720 64 4.42 Total interest-bearing deposits 51,272 483 3.74 Federal funds purchased and securities sold under repurchase agreements (e) 4,194 45 4.23 Bank notes and other short-term borrowings 4,233 45 4.15 Long-term debt (d,e) 11,851 164 5.72 Total interest-bearing liabilities 71,550 737 4.11 Noninterest-bearing deposits 12,948 Accrued expense and other liabilities 6,405 Total liabilities 90,903 Shareholders' equity 7,888 Total liabilities and shareholders' equity $98,791 Interest rate spread (TE) 2.75 % Net interest income (TE) and net interest margin (TE) 750 3.48 % TE adjustment a 40 Net interest income, GAAP basis $710 Third Quarter 2007 Average Balance Interest Yield/Rate Assets Loans: (a,b) Commercial, financial and agricultural $22,393 $410 7.25 % Real estate - commercial mortgage 8,855 172 7.69 Real estate - construction 8,285 167 8.01 Commercial lease financing 10,172 147 5.80 Total commercial loans 49,705 896 7.16 Real estate - residential 1,586 26 6.68 Home equity 10,883 199 7.22 Consumer - direct 1,342 36 10.66 Consumer - indirect 4,164 70 6.79 Total consumer loans 17,975 331 7.33 Total loans 67,680 1,227 7.20 Loans held for sale 4,731 91 7.59 Securities available for sale (c) 7,825 106 5.45 Held-to-maturity securities (a) 36 - 6.43 Trading account assets 1,055 11 4.39 Short-term investments 633 5 3.32 Other investments (c) 1,563 12 2.99 Total earning assets 83,523 1,452 6.92 Allowance for loan losses (942) Accrued income and other assets 12,581 Total assets $95,162 Liabilities NOW and money market deposit accounts $24,190 209 3.41 Savings deposits 1,581 - .19 Certificates of deposit ($100,000 or more) (d) 6,274 80 5.06 Other time deposits 11,512 136 4.68 Deposits in foreign office (e) 4,540 57 5.00 Total interest-bearing deposits 48,097 482 3.98 Federal funds purchased and securities sold under repurchase agreements (e) 4,470 55 4.85 Bank notes and other short-term borrowings 2,539 30 4.70 Long-term debt (d,e) 11,801 173 5.89 Total interest-bearing liabilities 66,907 740 4.40 Noninterest-bearing deposits 14,424 Accrued expense and other liabilities 6,106 Total liabilities 87,437 Shareholders' equity 7,725 Total liabilities and shareholders' equity $95,162 Interest rate spread (TE) 2.52 % Net interest income (TE) and net interest margin (TE) 712 3.40 % TE adjustment a 18 Net interest income, GAAP basis $694 Fourth Quarter 2006 Average Balance Interest Yield/Rate Assets Loans: (a,b) Commercial, financial and agricultural $21,384 $400 7.42 % Real estate - commercial mortgage 8,399 167 7.86 Real estate - construction 8,347 174 8.25 Commercial lease financing 9,891 160 6.47 Total commercial loans 48,021 901 7.44 Real estate - residential 1,428 24 6.59 Home equity 10,896 197 7.22 Consumer - direct 1,557 34 8.63 Consumer - indirect 3,671 62 6.85 Total consumer loans 17,552 317 7.21 Total loans 65,573 1,218 7.38 Loans held for sale 4,547 90 7.86 Securities available for sale (c) 7,765 96 4.88 Held-to-maturity securities (a) 38 1 7.68 Trading account assets 883 8 3.70 Short-term investments 701 8 4.46 Other investments (c) 1,351 24 6.76 Total earning assets 80,858 1,445 7.09 Allowance for loan losses (941) Accrued income and other assets 13,129 Total assets $93,046 Liabilities NOW and money market deposit accounts $25,136 198 3.13 Savings deposits 1,651 1 .19 Certificates of deposit ($100,000 or more) (d) 6,013 75 4.93 Other time deposits 11,921 136 4.50 Deposits in foreign office (e) 2,245 30 5.55 Total interest-bearing deposits 46,966 440 3.72 Federal funds purchased and securities sold under repurchase agreements (e) 2,816 37 5.21 Bank notes and other short-term borrowings 1,814 19 4.17 Long-term debt (d,e) 14,092 205 5.80 Total interest-bearing liabilities 65,688 701 4.24 Noninterest-bearing deposits 13,424 Accrued expense and other liabilities 6,041 Total liabilities 85,153 Shareholders' equity 7,893 Total liabilities and shareholders' equity $93,046 Interest rate spread (TE) 2.85 % Net interest income (TE) and net interest margin (TE) 744 3.66 % TE adjustment a 32 Net interest income, GAAP basis $712 (a) Interest income on tax-exempt securities and loans has been adjusted to taxable-equivalent basis using the statutory federal income tax rate of 35%. (b) For purposes of these computations, nonaccrual loans are included in average loan balances. (c) Yield is calculated on the basis of amortized cost. (d) Rate calculation excludes basis adjustments related to fair value hedges. (e) Results from continuing operations exclude the dollar amount of liabilities assumed necessary to support interest-earning assets held by the discontinued Champion Mortgage finance business. The interest expense related to these liabilities, which also is excluded from continuing operations, was calculated using a matched funds transfer pricing methodology. TE = Taxable Equivalent GAAP = U.S. generally accepted accounting principles Consolidated Average Balance Sheets, Net Interest Income and Yields/Rates From Continuing Operations (dollars in millions) Twelve months ended December 31, 2007 Average Balance Interest Yield/Rate Assets Loans: (a,b) Commercial, financial and agricultural $22,415 $1,622 7.23 % Real estate - commercial mortgage 8,802 675 7.67 Real estate - construction 8,237 653 7.93 Commercial lease financing 10,154 606 5.97 Total commercial loans 49,608 3,556 7.17 Real estate - residential 1,525 101 6.64 Home equity 10,815 775 7.17 Consumer - direct 1,367 144 10.53 Consumer - indirect 4,042 274 6.77 Total consumer loans 17,749 1,294 7.29 Total loans 67,357 4,850 7.20 Loans held for sale 4,461 337 7.57 Securities available for sale (c) 7,757 427 5.52 Held-to-maturity securities (a) 36 2 6.68 Trading account assets 917 38 4.10 Short-term investments 846 37 4.34 Other investments (c) 1,524 52 3.33 Total earning assets 82,898 5,743 6.84 Allowance for loan losses (948) Accrued income and other assets 12,934 Total assets $94,884 Liabilities NOW and money market deposit accounts $24,070 762 3.17 Savings deposits 1,591 3 .19 Certificates of deposit ($100,000 or more) (d) 6,389 321 5.02 Other time deposits 11,767 550 4.68 Deposits in foreign office (e) 4,287 209 4.87 Total interest-bearing deposits 48,104 1,845 3.84 Federal funds purchased and securities sold under repurchase agreements (e) 4,330 208 4.79 Bank notes and other short-term borrowings 2,423 104 4.28 Long-term debt (d,e) 12,537 718 5.84 Total interest-bearing liabilities 67,394 2,875 4.28 Noninterest-bearing deposits 13,635 Accrued expense and other liabilities 6,133 Total liabilities 87,162 Shareholders' equity 7,722 Total liabilities and shareholders' equity $94,884 Interest rate spread (TE) 2.56% Net interest income (TE) and net interest margin (TE) 2,868 3.46% TE adjustment a 99 Net interest income, GAAP basis $2,769 Twelve months ended December 31, 2006 Average Balance Interest Yield/Rate Assets Loans: (a,b) Commercial, financial and agricultural $21,679 $1,547 7.13 % Real estate - commercial mortgage 8,167 628 7.68 Real estate - construction 7,802 635 8.14 Commercial lease financing 9,773 595 6.08 Total commercial loans 47,421 3,405 7.18 Real estate - residential 1,430 93 6.49 Home equity 10,971 775 7.07 Consumer - direct 1,639 152 9.26 Consumer - indirect 3,535 238 6.73 Total consumer loans 17,575 1,258 7.16 Total loans 64,996 4,663 7.17 Loans held for sale 4,168 325 7.80 Securities available for sale (c) 7,302 347 4.71 Held-to-maturity securities (a) 47 3 7.43 Trading account assets 857 30 3.51 Short-term investments 791 33 4.15 Other investments (c) 1,362 82 5.78 Total earning assets 79,523 5,483 6.88 Allowance for loan losses (952) Accrued income and other assets 13,131 Total assets $91,702 Liabilities NOW and money market deposit accounts $25,044 710 2.84 Savings deposits 1,728 4 .23 Certificates of deposit ($100,000 or more) (d) 5,581 261 4.67 Other time deposits 11,592 481 4.14 Deposits in foreign office (e) 2,305 120 5.22 Total interest-bearing deposits 46,250 1,576 3.41 Federal funds purchased and securities sold under repurchase agreements (e) 2,215 107 4.80 Bank notes and other short-term borrowings 2,284 94 4.12 Long-term debt (d,e) 13,983 788 5.62 Total interest-bearing liabilities 64,732 2,565 3.96 Noninterest-bearing deposits 13,053 Accrued expense and other liabilities 6,183 Total liabilities 83,968 Shareholders' equity 7,734 Total liabilities and shareholders' equity $91,702 Interest rate spread (TE) 2.92% Net interest income (TE) and net interest margin (TE) 2,918 3.67% TE adjustment a 103 Net interest income, GAAP basis $2,815 (a) Interest income on tax-exempt securities and loans has been adjusted to taxable-equivalent basis using the statutory federal income tax rate of 35%. (b) For purposes of these computations, nonaccrual loans are included in average loan balances. (c) Yield is calculated on the basis of amortized cost. (d) Rate calculation excludes basis adjustments related to fair value hedges. (e) Results from continuing operations exclude the dollar amount of liabilities assumed necessary to support interest-earning assets held by the discontinued Champion Mortgage finance business. The interest expense related to these liabilities, which also is excluded from continuing operations, was calculated using a matched funds transfer pricing methodology. TE = Taxable Equivalent GAAP = U.S. generally accepted accounting principles Noninterest Income (in millions) Three months ended Twelve months ended 12-31-07 9-30-07 12-31-06 12-31-07 12-31-06 Trust and investment services income (a) $131 $119 $142 $490 $553 Service charges on deposit accounts 90 88 77 337 304 Investment banking and capital markets income (a) 12 9 69 117 230 Operating lease income 72 70 63 272 229 Letter of credit and loan fees 58 51 55 192 188 Corporate-owned life insurance income 37 27 31 121 105 Electronic banking fees 25 25 27 99 105 Net (losses) gains from loan securitizations and sales (6) (53) 42 (17) 76 Net securities gains (losses) 6 4 3 (35) 1 Net gains from principal investing 6 9 5 134 53 Gain from sale of McDonald Investments branch network - - - 171 - Other income: Insurance income 10 16 15 55 64 Loan securitization servicing fees 5 5 5 21 20 Credit card fees 3 4 3 13 17 Gains related to MasterCard Incorporated shares - 27 - 67 9 Litigation settlement - automobile residual value insurance - - - 26 - Miscellaneous income 39 37 21 166 173 Total other income 57 89 44 348 283 Total noninterest income $488 $438 $558 $2,229 $2,127 (a) Additional detail provided in tables below. Trust and Investment Services Income (in millions) Three months ended Twelve months ended 12-31-07 9-30-07 12-31-06 12-31-07 12-31-06 Brokerage commissions and fee income $31 $26 $58 $125 $235 Personal asset management and custody fees 43 41 40 165 156 Institutional asset management and custody fees 57 52 44 200 162 Total trust and investment services income $131 $119 $142 $490 $553 Investment Banking and Capital Markets Income (in millions) Three months ended Twelve months ended 12-31-07 9-30-07 12-31-06 12-31-07 12-31-06 Investment banking income $21 $22 $43 $86 $112 (Loss) income from other investments (23) (22) 6 (34) 43 Dealer trading and derivatives (loss) income (1) (2) 10 17 33 Foreign exchange income 15 11 10 48 42 Total investment banking and capital markets income $12 $9 $69 $117 $230 Noninterest Expense (dollars in millions) Three months ended Twelve months ended 12-31-07 9-30-07 12-31-06 12-31-07 12-31-06 Personnel (a) $399 $383 $447 $1,621 $1,692 Net occupancy 64 60 68 246 250 Computer processing 52 49 55 201 212 Operating lease expense 59 58 50 224 184 Professional fees 38 27 33 117 134 Equipment 25 22 24 96 102 Marketing 16 21 27 76 97 Other expense: Postage and delivery 13 11 12 47 50 Franchise and business taxes 7 8 (7) 32 22 Telecommunications 7 7 7 28 28 Provision (credit) for losses on lending-related commitments 25 5 (6) 28 (6) Liability to Visa 64 - - 64 - Miscellaneous expense 127 102 99 468 384 Total other expense 243 133 105 667 478 Total noninterest expense $896 $753 $809 $3,248 $3,149 Average full-time equivalent employees (b) 18,500 18,567 20,100 18,934 20,006 (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 12-31-07 9-30-07 12-31-06 12-31-07 12-31-06 Salaries $255 $240 $238 $976 $940 Incentive compensation 52 55 120 264 388 Employee benefits 65 67 64 287 287 Stock-based compensation 3 17 17 60 64 Severance 24 4 8 34 13 Total personnel expense $399 $383 $447 $1,621 $1,692 Loan Composition (dollars in millions) Percent change 12-31-07 vs. 12-31-07 9-30-07 12-31-06 9-30-07 12-31-06 Commercial, financial and agricultural $24,797 $23,192 $21,412 6.9 % 15.8 % Commercial real estate: Commercial mortgage 9,630 9,272 8,426 3.9 14.3 Construction 8,102 8,214 8,209 (1.4) (1.3) Total commercial real estate loans 17,732 17,486 16,635 1.4 6.6 Commercial lease financing 10,176 10,309 10,259 (1.3) (.8) Total commercial loans 52,705 50,987 48,306 3.4 9.1 Real estate - residential mortgage 1,594 1,583 1,442 .7 10.5 Home equity 10,917 10,904 10,826 .1 .8 Consumer - direct 1,298 1,308 1,536 (.8) (15.5) Consumer - indirect: Marine 3,637 3,549 3,077 2.5 18.2 Other 672 668 639 .6 5.2 Total consumer - indirect loans 4,309 4,217 3,716 2.2 16.0 Total consumer loans 18,118 18,012 17,520 .6 3.4 Total loans $70,823 $68,999 $65,826 2.6 % 7.6 % Loans Held for Sale Composition (dollars in millions) Percent change 12-31-07 vs. 12-31-07 9-30-07 12-31-06 9-30-07 12-31-06 Commercial, financial and agricultural $250 $67 $47 273.1 % 431.9 % Real estate - commercial mortgage 1,219 1,560 946 (21.9) 28.9 Real estate - construction 35 237 36 (85.2) (2.8) Commercial lease financing 1 5 3 (80.0) (66.7) Real estate - residential mortgage 47 36 21 30.6 123.8 Home equity 1 1 180 - (99.4) Education 3,176 2,877 2,390 10.4 32.9 Automobile 7 8 14 (12.5) (50.0) Total loans held for sale $4,736 $4,791 $3,637 (1.1)% 30.2 % Summary of Loan Loss Experience (dollars in millions) Three months ended Twelve months ended 12-31-07 9-30-07 12-31-06 12-31-07 12-31-06 Average loans outstanding from continuing operations $69,717 $67,680 $65,573 $67,357 $64,996 Allowance for loan losses at beginning of period $955 $945 $944 $944 $ 966 Loans charged off: Commercial, financial and agricultural 48 33 18 128 92 Real estate - commercial mortgage 3 2 15 16 24 Real estate - construction 44 7 1 54 4 Total commercial real estate loans 47 9 16 70 28 Commercial lease financing 18 11 13 51 40 Total commercial loans 113 53 47 249 160 Real estate - residential mortgage 3 1 2 6 7 Home equity 12 9 8 37 30 Consumer - direct 8 8 7 31 33 Consumer - indirect 16 11 10 47 38 Total consumer loans 39 29 27 121 108 152 82 74 370 268 Recoveries: Commercial, financial and agricultural 13 11 7 37 34 Real estate - commercial mortgage 2 - 2 6 5 Real estate - construction - 1 - 1 1 Total commercial real estate loans 2 1 2 7 6 Commercial lease financing 12 3 4 22 27 Total commercial loans 27 15 13 66 67 Real estate - residential mortgage - - - 1 1 Home equity - 1 2 4 7 Consumer - direct 2 3 2 8 7 Consumer - indirect 4 4 3 16 16 Total consumer loans 6 8 7 29 31 33 23 20 95 98 Net loan charge-offs (119) (59) (54) (275) (170) Provision for loan losses from continuing operations 363 69 53 529 150 Credit for loan losses from discontinued operations - - - - (3) Foreign currency translation adjustment 1 - 1 2 1 Allowance for loan losses at end of period $1,200 $955 $944 $1,200 $ 944 Net loan charge-offs to average loans from continuing operations .67% .35% .33% .41% .26% Allowance for loan losses to period-end loans 1.69 1.38 1.43 1.69 1.43 Allowance for loan losses to nonperforming loans 174.67 191.77 439.07 174.67 439.07 Changes in Liability for Credit Losses on Lending-Related Commitments (in millions) Three months ended Twelve months ended 12-31-07 9-30-07 12-31-06 12-31-07 12-31-06 Balance at beginning of period $55 $50 $59 $53 $59 Provision (credit) for losses on lending- related commitments 25 5 (6) 28 (6) Charge-offs - - - (1) - Balance at end of period (a) $80 $55 $53 $80 $53 Summary of Nonperforming Assets and Past Due Loans (dollars in millions) 12-31-07 9-30-07 6-30-07 3-31-07 12-31-06 Commercial, financial and agricultural $84 $94 $83 $70 $38 Real estate - commercial mortgage 41 41 41 44 48 Real estate - construction 415 228 23 10 10 Total commercial real estate loans 456 269 64 54 58 Commercial lease financing 28 30 34 31 22 Total commercial loans 568 393 181 155 118 Real estate - residential mortgage 28 29 27 32 34 Home equity 66 61 55 52 50 Consumer - direct 2 2 2 2 2 Consumer - indirect 23 13 11 13 11 Total consumer loans 119 105 95 99 97 Total nonperforming loans 687 498 276 254 215 Nonperforming loans held for sale 25 6 4 3 3 OREO 21 21 27 42 57 Allowance for OREO losses (2) (1) (2) (2) (3) OREO, net of allowance 19 20 25 40 54 Other nonperforming assets (b) 33 46 73 56 1 Total nonperforming assets $764 $570 $378 $353 $273 Accruing loans past due 90 days or more $231 $190 $181 $146 $120 Accruing loans past due 30 through 89 days 843 717 623 626 644 Nonperforming loans to period-end portfolio loans .97% .72% .41% .39% .33% Nonperforming assets to period-end portfolio loans plus OREO and other nonperforming assets 1.08 .83 .57 .54 .41 Summary of Changes in Nonperforming Loans (in millions) 4Q07 3Q07 2Q07 1Q07 4Q06 Balance at beginning of period $498 $276 $254 $215 $223 Loans placed on nonaccrual status 378 337 130 129 115 Charge-offs (147) (81) (72) (61) (74) Loans sold (13) (6) (7) - (5) Payments (17) (13) (21) (7) (23) Transfers to OREO (5) (12) - (9) (12) Loans returned to accrual status (7) (3) (8) (13) (9) Balance at end of period $687 $498 $276 $254 $215 (a) Included in "accrued expense and other liabilities" on the consolidated balance sheet. (b) Primarily investments held by the Private Equity unit within Key's Real Estate Capital line of business. Line of Business Results (dollars in millions) Community Banking 4Q07 3Q07 2Q07 1Q07 4Q06 Summary of operations Total revenue (TE) $651 $626 $629 $805 $677 Provision for loan losses 36 1 21 14 23 Noninterest expense 441 418 449 471 493 Net income 109 130 99 200 101 Average loans and leases 27,236 26,947 26,576 26,456 26,697 Average deposits 47,253 46,727 46,124 46,521 47,348 Net loan charge-offs 31 20 26 19 24 Return on average allocated equity 17.14% 20.60% 16.12% 32.93% 16.03% Average full-time equivalent employees 8,464 8,632 9,028 9,478 9,683 Supplementary information (lines of business) Regional Banking Total revenue (TE) $553 $531 $535 $713 $579 Provision for loan losses 26 12 19 18 19 Noninterest expense 389 371 401 422 445 Net income 86 93 72 170 72 Average loans and leases 18,768 18,661 18,459 18,483 18,677 Average deposits 43,692 43,229 42,712 43,039 43,749 Net loan charge-offs 26 18 19 18 19 Return on average allocated equity 19.61% 21.13% 16.70% 39.53% 16.07% Average full-time equivalent employees 8,162 8,322 8,709 9,155 9,362 Commercial Banking Total revenue (TE) $98 $95 $94 $92 $98 Provision for loan losses 10 (11) 2 (4) 4 Noninterest expense 52 47 48 49 48 Net income 23 37 27 30 29 Average loans and leases 8,468 8,286 8,117 7,973 8,020 Average deposits 3,561 3,498 3,412 3,482 3,599 Net loan charge-offs 5 2 7 1 5 Return on average allocated equity 11.65% 19.37% 14.73% 16.92% 15.94% Average full-time equivalent employees 302 310 319 323 321 Percent change 4Q07 vs. 3Q07 4Q06 Summary of operations Total revenue (TE) 4.0% (3.8)% Provision for loan losses N/M 56.5 Noninterest expense 5.5 (10.5) Net income (16.2) 7.9 Average loans and leases 1.1 2.0 Average deposits 1.1 (.2) Net loan charge-offs 55.0 29.2 Return on average allocated equity N/A N/A Average full-time equivalent employees (1.9) (12.6) Supplementary information (lines of business) Regional Banking Total revenue (TE) 4.1% (4.5)% Provision for loan losses 116.7 36.8 Noninterest expense 4.9 (12.6) Net income (7.5) 19.4 Average loans and leases .6 .5 Average deposits 1.1 (.1) Net loan charge-offs 44.4 36.8 Return on average allocated equity N/A N/A Average full-time equivalent employees (1.9) (12.8) Commercial Banking Total revenue (TE) 3.2% - Provision for loan losses N/M 150.0% Noninterest expense 10.6 8.3 Net income (37.8) (20.7) Average loans and leases 2.2 5.6 Average deposits 1.8 (1.1) Net loan charge-offs 150.0 - Return on average allocated equity N/A N/A Average full-time equivalent employees (2.6) (5.9) Line of Business Results (continued) (dollars in millions) National Banking 4Q07 3Q07 2Q07 1Q07 4Q06 Summary of operations Total revenue (TE) $614 $511 $617 $600 $670 Provision for loan losses 327 68 32 30 30 Noninterest expense 388 328 327 314 328 Loss (income) continuing operations (65) 73 162 160 195 Net (loss) income (62) 59 159 152 30 Average loans and leases (a) 42,037 40,277 39,323 38,839 38,469 Average loans held for sale (a) 4,709 4,692 4,377 3,917 4,521 Average deposits (a) 12,630 12,633 12,085 11,294 11,876 Net loan charge-offs (a) 88 39 27 25 30 Return on average allocated equity (a) (5.78)% 6.93% 15.65% 16.07% 19.38% Return on average allocated equity (5.52) 5.60 15.36 15.26 2.81 Average full-time equivalent employees 3,996 3,841 3,820 4,207 4,293 Supplementary information (lines of business) Real Estate Capital Total revenue (TE) $127 $104 $187 $167 $189 Provision for loan losses 270 43 8 1 18 Noninterest expense 105 76 78 71 69 Net (loss) income (155) (9) 63 59 63 Average loans and leases 13,847 13,187 12,827 12,755 12,931 Average loans held for sale 1,257 1,584 1,241 1,145 1,125 Average deposits 5,273 5,559 4,864 4,293 4,091 Net loan charge-offs 45 7 3 1 8 Return on average allocated equity (43.09)% (2.67)% 19.27% 19.30% 20.42% Average full-time equivalent employees 1,014 1,007 991 971 957 Equipment Finance Total revenue (TE) $184 $139 $153 $134 $146 Provision for loan losses 23 16 16 13 7 Noninterest expense 95 93 92 85 77 Net income 41 18 28 23 39 Average loans and leases 10,729 10,681 10,609 10,479 10,222 Average loans held for sale 15 6 10 4 33 Average deposits 17 16 16 13 15 Net loan charge-offs 18 16 16 13 14 Return on average allocated equity 17.68% 7.92% 12.69% 10.65% 17.99% Average full-time equivalent employees 1,009 985 971 952 938 Institutional and Capital Markets Total revenue (TE) $203 $182 $189 $184 $223 Provision for loan losses 15 (3) - - (5) Noninterest expense 132 121 116 117 137 Net income 36 41 46 42 58 Average loans and leases 8,381 7,693 7,454 7,435 7,521 Average loans held for sale 394 373 468 140 387 Average deposits 6,796 6,633 6,815 6,600 7,372 Net loan charge- offs (recoveries) 6 5 - 1 (2) Return on average allocated equity 11.61% 14.29% 15.92% 14.90% 19.99% Average full-time equivalent employees 1,281 1,320 1,302 1,350 1,375 Consumer Finance Total revenue (TE) $100 $86 $88 $115 $112 Provision for loan losses 19 12 8 16 10 Noninterest expense 56 38 41 41 45 Income from continuing operations 13 23 25 36 35 Net income (loss) 16 9 22 28 (130) Average loans and leases (a) 9,080 8,716 8,433 8,170 7,795 Average loans held for sale (a) 3,043 2,729 2,658 2,628 2,976 Average deposits (a) 544 425 390 388 398 Net loan charge-offs (a) 19 11 8 10 10 Return on average allocated equity (a) 5.85% 11.38% 12.60% 18.72% 18.34% Return on average allocated equity 7.20 4.45 11.09 14.56 (51.78) Average full-time equivalent employees 692 529 556 934 1,023 Percent change 4Q07 vs. 3Q07 4Q06 Summary of operations Total revenue (TE) 20.2% (8.4)% Provision for loan losses 380.9 990.0 Noninterest expense 18.3 18.3 Loss (income) continuing operations N/M N/M Net (loss) income N/M N/M Average loans and leases (a) 4.4 9.3 Average loans held for sale (a) .4 4.2 Average deposits (a) - 6.3 Net loan charge-offs (a) 125.6 193.3 Return on average allocated equity (a) N/A N/A Return on average allocated equity N/A N/A Average full-time equivalent employees 4.0 (6.9) Supplementary information (lines of business) Real Estate Capital Total revenue (TE) 22.1% (32.8)% Provision for loan losses 527.9 N/M Noninterest expense 38.2 52.2 Net (loss) income N/M N/M Average loans and leases 5.0 7.1 Average loans held for sale (20.6) 11.7 Average deposits (5.1) 28.9 Net loan charge-offs 542.9 462.5 Return on average allocated equity N/A N/A Average full-time equivalent employees .7 6.0 Equipment Finance Total revenue (TE) 32.4% 26.0% Provision for loan losses 43.8 228.6 Noninterest expense 2.2 23.4 Net income 127.8 5.1 Average loans and leases .4 5.0 Average loans held for sale 150.0 (54.5) Average deposits 6.3 13.3 Net loan charge-offs 12.5 28.6 Return on average allocated equity N/A N/A Average full-time equivalent employees 2.4 7.6 Institutional and Capital Markets Total revenue (TE) 11.5% (9.0)% Provision for loan losses N/M N/M Noninterest expense 9.1 (3.6) Net income (12.2) (37.9) Average loans and leases 8.9 11.4 Average loans held for sale 5.6 1.8 Average deposits 2.5 (7.8) Net loan charge-offs (recoveries) 20.0 N/M Return on average allocated equity N/A N/A Average full-time equivalent employees (3.0) (6.8) Consumer Finance Total revenue (TE) 16.3% (10.7)% Provision for loan losses 58.3 90.0 Noninterest expense 47.4 24.4 Income from continuing operations (43.5) (62.9) Net income (loss) 77.8 N/M Average loans and leases (a) 4.2 16.5 Average loans held for sale (a) 11.5 2.3 Average deposits (a) 28.0 36.7 Net loan charge-offs (a) 72.7 90.0 Return on average allocated equity (a) N/A N/A Return on average allocated equity N/A N/A Average full-time equivalent employees 30.8 (32.4) (a) From continuing operations. TE = Taxable Equivalent N/A = Not Applicable N/M = Not Meaningful DATASOURCE: KeyCorp Web site: http://www.key.com/ http://www.key.com/newsroom https://www.key.com/ir