Good day and welcome to KeyCorp's first quarter 2009 earnings results conference call. This call is being recorded. At this time I would like to turn the call over to the Chairman and Chief Executive Officer of KeyCorp, Mr. Henry Meyer. Mr. Meyer, please go ahead, sir.

Thank you, operator. Good morning and welcome to KeyCorp's First Quarter 2009 Earnings Conference Call. Joining me for today's presentation is our CFO, Jeff Weeden and available for the Q&A portion of the call are our Vice Chairs, Beth Mooney, and Peter Hancock, our Chief Risk Officer, Chuck Hyle, and our Treasurer Joe Vayda. I hope you all look at Slide #2 which is our forward-looking disclosure statement. It covers our presentation materials and comments as well as the Q&A segment of our call today. Now if you turn to Slide #3, today, we announced net loss of $1.09 per share for the first quarter. As was the case for the fourth quarter of last year, the loss was primarily attributable to a non-cash accounting charge for goodwill impairment and continued building of a loan loss reserve. In light of the prevailing economic environment during the first quarter of this year, we continued to build our loan loss reserve by taking a $875 million provision for loan losses which exceeded our net charge-offs by $383 million. At March 31, 2009, our loan loss reserve stood at almost $2.2 billion and represented 2.97% of period end loans and 126% of nonperforming loans. In our earnings release this morning, we announced that the Board of Directors intends to reduce the quarterly common stock dividend from $6.25 per share to a penny per share commencing in the second quarter. Obviously, no one likes having to reduce the dividend again. However, given the current operating environment, I, my management team and our Board believe this action is prudent. As a result of this decision, the Company will retain approximately 100 million of capital on an annual basis. These are challenging times and operating expenses in the form of higher collection cost and deposit insurance…

Thank you, Henry. Slide #4 provides a summary about the Company's first quarter 2009 results. And as Henry mentioned we incurred a net loss of $1.09 for common share for the quarter. Impacting the first quarter results were the continued building of the reserve for loan losses in excess of net charge-offs and the 223 million or $0.38 per share non-cash charge we took for intangible asset impairment in our national banking operations. With this latest impairment charge we have now written off all of the remaining goodwill assigned to this business unit as of March 31st 2009. This charge did not impact our regulatory or tangible capital ratios. We included a more extensive list of items impacting our first quarter results on Page #2 of today's earnings release. Turning to Slide #5 the Company's net interest margin was 2.77% for the first quarter of 2009 compared to an adjusted 2.84% for the fourth quarter of 2008. As the first quarter progressed, we experienced an improving margin in the back half of the quarter as lower spread assets matured and repricing for deposits began to ease somewhat in our markets. While higher levels of nonperforming assets will keep pressure on the net interest margin we believe we will see greater stability in the margin and the possibility for expansion in coming quarters as assets continue to reprice to improve credit spread. Turning to Slide #6, the loan categories on this slide have been adjusted for the exit portfolio shown. For example, the Marine and RV floor plan loans on this slide have been removed from the commercial, financial and agricultural loans, CF&A totals for all periods and are reflected in the exit portfolio details. As we discussed in our fourth quarter earnings call, Key experienced an increase in loan draws…

(Operator instructions). Let's begin with Brian Foran with Goldman Sachs. Brian Foran – Goldman Sachs: Good morning, guys. How are you?

Good.

Good morning. Brian Foran – Goldman Sachs: I guess you have the $675 million convertible preferred outstanding and then the credit environment is obviously becoming increasingly tough. And then I guess is a third moving part you obviously have the stress test results coming up. Is that security in your mind one that's likely to be proactively converted to further strengthen the common equity component of your capital base?

Brian, this is Jeff Weeden. We are certainly looking at all the different opportunities that maybe out there. And that is one that we have had discussions on with respect to the conversion of that particular security. Brian Foran – Goldman Sachs: And then I guess is a follow-up when we look at some of the deterioration in NPAs, one of the issues you highlighted in the past is the liquidity issue on the commercial real estate side both commercial construction and commercial mortgages and the need to I guess re-underwrite some of these loans and keep them on your balance sheet. When we look at the jump-in in construction and commercial mortgage NPAs, can you give us a sense of how much of this is loans that otherwise would have rolled off your balance sheet in a normal credit environment and maybe are moving to nonperforming because of that and how much of it is just term loans on your balance sheet that would have gone bad no matter what credit environment – no matter what liquidity environment we were at?

This is Chuck Hyle. I think that its, it's not – it's a bit of a split. Some of the larger names, we have a couple in particular that show up on the CF&A category that are clearly impacted by liquidity. These are major names that have access to the capital markets or at least used to have access to the capital markets. I think those are loans that would have, not be in the position they are in as an NPA if we had that liquidity in the business. I think most of the others in the CRE category, where we are able to refinance the asset in a logical way by either remargining or dealing with the developer in an appropriate way, those we're getting refinanced, those that clearly are impaired are moving into the NPA and charge-off categories. So it's a bit of a split. Brian Foran – Goldman Sachs: Thank you.

(Operator instructions) We'll go next to Jeff Davis with Howe Barnes. Jeff Davis – Howe Barnes: Good morning.

Good morning, Jeff. Jeff Davis – Howe Barnes: Chuck, maybe I know loss rates e-log [ph] book out of the community bank are almost to minimus relative to where we are in the cycle maybe if you can comment on how you would expect that to play out over the next four quarters, five quarters, and not on employ rising unemployment impacts, it will not impact that maybe the industry. And then secondly, as it relates to the exit portfolio and then maybe liquidity generally, are things loosening up here in the last month or so that the ability to monetize assets looks like it's going to get better going forward?

Jeff, on the first point, I would say, our home equity portfolio is continuing to perform as we have expected. We've seen a little bit of an increase in deterioration, although our early stage delinquencies in that category have actually improved. So, I think that March was a better month. And our LTVs, while they deteriorated a little bit from underwriting timeframe, where we are normally sort of 70% LTV, those have probably moved up to sort of 74%, 75% across the entire portfolio. We're clearly as we've reported in previous quarters seeing more deterioration in Ohio and the Midwest than in some of the other geographic locations, but our expectation is that this portfolio, which as you know, is pretty seasoned, originated over a long period of time, we don't have the LTV issue as some of the other regions do have and our expectation is that will carry on pretty much in the range that we have talked in the past. You have seen a little bit of an uptake in the utilization but it's fairly minor and overall, we are relatively happy with that portfolio. As far as second question is concerned, we haven't seen much change in liquidity in the held for sale side. We are very happy to put our commercial real estate portfolio out last spring. We had good activity through the summer and into the autumn. But in the first quarter I would say that liquidity was deminimus. I think we might have sold one transaction. And we don't see a lot of volume – particularly in the residential space we don't see a lot of volume in that through the end of the first quarter. Jeff Davis – Howe Barnes: Chuck, let me ask one quick follow-up. Is that a function of just pricing is not acceptable to you all or is it a function of markets are still locked up, we now have the overlay of whatever the treasuries legacy security purchase program is going to do to the markets?

Bit of both, Jeff. I would say that in the residential single family home space there is just no market. Everybody is waiting. And one or two of the other real estate space, there is some activity, and then it gets down to whether we like the price and we think it's better to hold on to them. But I would say overall the liquidity is pretty sparse. Jeff Davis – Howe Barnes: Thank you.

We'll go next to Gerard Cassidy with RBC Capital Markets. Gerard Cassidy – RBC Capital Markets: Thank you. Good morning, guys. Could you tell us – you mentioned I think that some of the construction loans cannot find permanent financing and you've issued many (inaudible) when you rewrite the loan to put it into the commercial mortgage portfolio. What was the dollar amount of that in the quarter? And do you continue to see that as a source of funding these construction loans throughout the year if they cannot find financing?

Gerard, this is Jeff Weeden. At the end of the quarter we had moved to approximately $1.3 billion of loans that went out of – that the completed construction and moved into the mortgage portfolio at that particular point in time. Gerard Cassidy – RBC Capital Markets: Okay. And could you give us a little color on what types of property types? It was mostly in retail or mostly in office or whatever?

Well, it was spread across a range of properties, certainly some retail, some office, and some warehouse. So it's pretty much a mix of asset classes. Gerard Cassidy – RBC Capital Markets: I see. And are all of the loans that have been moved over they would stand your credit underwriting test so that these aren't trouble debt restructurings or anything like that? These are legitimate new mortgages that you are comfortable with?

Absolutely. We wouldn't do it otherwise and these tend to be with your larger and better developers that have other assets and if it doesn't underwrite to our standards, we don't do it. Gerard Cassidy – RBC Capital Markets: Okay. The other question was I think you guys in the non-performing asset slide that you have given us – I think it was on page 25, you mentioned that you've got some loans held for sale to dispose of. Can you tell us are those mark-to-market the ones that are held for sale? And if so, what have you marked them to market to relative to original balance?

Yes. They are mark-to-market. Most of those, the $72 million that's in that particular outstanding balance at the end of the first quarter were from the original sale that we announced last year in the second quarter. And there's a schedule if you look at on page 27, it actually does the roll forward of that particular balance amount. But we've continued to mark those down and they're basically mark down to around the $0.40 on the dollar on average. Gerard Cassidy – RBC Capital Markets: And are you finding that at those levels they are readily salable, that's a pretty good mark at this point in time?

Well, we continue to take write-downs on them each, you can kind of follow the progression on that slide 27, but we continue to work those, Chuck and his team work them very, very hard each and every quarter, but again it's a matter of how much liquidity is actually in the marketplace and what are we seeing for indication of values.

Again Gerard, because this – most of those assets are in the residential space, as I said earlier, we don't have a – we're not seeing a lot of liquidity there. Gerard Cassidy – RBC Capital Markets: I see. And regarding the exit portfolio what are you guys – I mean, you're making steady progress obviously in reducing that portfolio. What seems to be a constraint to see even better progress? Is it pricing or is it the lack of financing that the potential buyers would need to find to buy these loans? What would accelerate it I guess?

Well, Gerard, it's Henry. We have – I have been little disappointed in the progress there and I think in almost every case, it's the lack of ability by the current borrower to find another take out. Still as you can see a lot of, these are performing loans, it's a strategic decision, but there aren't a lot of alternatives for these borrowers. Most of the reductions are the scheduled pay-downs, but we had hoped that getting out of the business would send some of those borrowers to an institution that was actively in that business and we haven't seen as much of that as we would have liked. Gerard Cassidy – RBC Capital Markets: Great. And then one final question. Thank you for giving us the detail on the commercial real estate retail properties that you did this quarter. Could you – two questions. One, just define for us power center, what type of retailers are in the power center? And second you've done it in the past with your resi exposure pointing out that the California and Florida markets were weaker than most parts of the country. Where are the weaker spots regionally that you guys have seen in the commercial retail properties? Is it California and Florida again or is it somewhere else?

Gerard, the power centers are going to be your big box shopping centers. So if you go and see some of the larger – like a Wal-Mart, Target, Best Buy, you see a number of those very large retailers that are located in those particular centers. And clearly, what we see is this the – if you look at the schedule, obviously on page 23, you will see that the Southeast has some of the softer areas. It doesn't appear to be in Florida. It's more within the Carolina's and Georgia.

And a bit in the southwest as well I think. Gerard Cassidy – RBC Capital Markets: I see. Thank you.

(Operator instructions). We'll go next to David Knutson with Legal and General. David Knutson – Legal and General: Hi, good morning. With Timothy Geithner's comments regarding loan underwriting standards being part of the criteria, what would be your company's view towards a shared national credit – Key traditionally has had relatively higher percentage of loan assets in the shared national credit program. Someone say that it's not direct origination or the underwriting is somewhat different?

This is Chuck Hyle. Our percentage of our wholesale portfolio that is shared national credit really hasn't changed much in the last several years. I would say that we've got something like $7 billion – little over $7 billion where we are a participant in shared national credit and we lead about $1.3 billion. So that's about a third of our wholesale C&I portfolio and that percentage really has not changed in two years or three years. So that's been pretty consistent. David Knutson – Legal and General: Okay. A follow-up would be on the student loan portfolio. The delinquencies are increasing relative to the recent past especially in private student lending. What's the company's view regarding reserve or provision requirements for that portfolio?

Well, I think you see the reserve build up on the portfolio just simply looking at slide 9; we break everything out by portfolio. So, you'll see that the reserves are currently on that particular book of business standing at $170 million and represent 4.59%. Charge-offs are running on that entire book at about 3.5% right now. They have actually been relatively stable in the last couple of quarters. We do believe that student loans in the lending portfolio will track basically with the overall health of the consumer. So it's not unexpected that you would see a rise in delinquencies if unemployment, et cetera continues to increase. David Knutson – Legal and General: Thank you.

We currently have no further questions at this time. I would like to turn the call back over to Mr. Henry Meyer.

Thank you, operator. And I'd like to thank all of you for taking your time from your busy schedules to participate on our call today. If you have any follow-up questions on the items we discussed, please call Vern Patterson, our Head of Investor Relations at 216-689-0520. That concludes our remarks and I hope everyone has a great day.

This does conclude today's conference call. We thank you for your participation.