91576--3/1/2010--KEYCORP

related topics

{stock, price, share}

{condition, economic, financial}

{capital, credit, financial}

{competitive, industry, competition}

{regulation, change, law}

{operation, natural, condition}

{debt, indebtedness, cash}

{loss, insurance, financial}

{system, service, information}

{product, market, service}

{acquisition, growth, future}

{personnel, key, retain}

{provision, law, control}

{control, financial, internal}

{financial, litigation, operation}

We are subject to credit risk. The credit ratings of KeyCorp and KeyBank are important in order to maintain liquidity. There can be no assurance that the EESA, the American Recovery and Reinvestment Act of 2009, and other initiatives undertaken by the United States government to restore liquidity and stability to the U.S. financial system will help stabilize the U.S. financial system. The U.S. Treasury may require us to raise additional capital that would likely be dilutive to our Common Shares. The potential issuance of a significant amount of Common Shares or equity convertible into our Common Shares to a private investor or group of private investors may be dilutive and cause the market price of our Common Shares to decline. Issuing a significant amount of common equity to a private investor may result in a change in control of KeyCorp under regulatory standards and contractual terms. Should we decide to repurchase the U.S. Treasury s Series B Preferred Stock, future issuance(s) of Common Shares may be necessary, which, if necessary, would likely result in significant dilution to holders of KeyCorp Common Shares. We may not be permitted to repurchase the U.S. Treasury s TARP CPP investment if and when we request approval to do so. During 2009, disruptions and volatility in financial markets adversely affected KeyCorp. These factors could continue to affect KeyCorp. Our actions in response to these financial market disruptions may not be sufficient to mitigate the effects of market uncertainties and other risks presented. We are subject to interest rate risk. We are subject to other market risk. The soundness of other financial institutions could adversely affect us. We are subject to liquidity risk. Various factors may cause our allowance for loan losses to increase. We are subject to operational risk. Our profitability depends significantly on economic conditions in the geographic regions in which we operate. We operate in a highly competitive industry and market areas. We are subject to extensive government regulation and supervision. Our controls and procedures may fail or be circumvented. We rely on dividends from our subsidiaries for most of our funds. Our earnings and/or financial condition may be affected by changes in accounting principles and in tax laws, or the interpretation of them. Potential acquisitions may disrupt our business and dilute shareholder value. We may not be able to attract and retain skilled people. Our information systems may experience an interruption or breach in security. We continually encounter technological change. We are subject to claims and litigation. Severe weather, natural disasters, acts of war or terrorism and other external events could significantly impact our business. Risks Associated With Our Common Shares Our issuance of securities to the U.S. Treasury may limit our ability to return capital to our shareholders and is dilutive to our Common Shares. If we are unable to redeem such preferred shares, the dividend rate increases substantially after five years. You may not receive dividends on the Common Shares. KeyCorp was required to conduct stress tests pursuant to the U.S. Treasury s CAP and could be required to conduct additional stress tests and raise additional capital that would be dilutive to our Common Shares and may limit our ability to return capital to our shareholders. Our share price can be volatile. An investment in our Common Shares is not an insured deposit. Our articles of incorporation and regulations, as well as certain banking laws, may have an anti-takeover effect. Risks Associated With Our Industry Difficult market conditions have adversely affected the financial services industry, business and results of operations.

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