DESPITE finishing joint top of the table, level on points with Laois and Westmeath, Kerry's inferior points difference means Tom Howard's charges will not contest the divisional final.
Kerry managed to bag their fourth win from five outings, but only just after Derry staged a remarkable second-half comeback as the winners wilted after a bright start.
The Kingdom had to play all but five minutes of the second half with 14 men after wing-back Tommy Barrett received a second yellow card.
Sean Maunsell netted a fifth-minute goal for Kerry, who led 1-9 to 0-4 at the interval.
A 66th-minute goal from Michael Kirkpatrick and a point from Brendan Rodgers had Derry in front with three minutes to go, but late points from Shane Nolan and Aidan Boyle saw Kerry snatch a win they hardly deserved.
Man of the match: D Collins (Kerry)
SCORERS – Kerry: S Nolan 0-5 (4fs, 1 '65'), S Maunsell 1-1, A Boyle 0-2, D O'Connell (f), P Boyle, D Collins, J Griffin, B O'Leary 0-1 each. Derry:
M Kirkpatrick 1-5 (0-2fs), P Henry 0-3 (3fs), B Rodgers, A Grant, K Hinphey, S Farren 0-1 each.
KERRY – B Rochford 7; P O'Keeffe 7, L Boyle 8, R Horgan 6; D O'Connell 8, D Dineen 8, T Barrett 5; J Griffin 8, D Collins 9; C Harty 5, G O'Brien 5, B O'Leary 7; S Maunsell 7, A Boyle 7, S Nolan 7. Subs: PJ Connolly 6 for C Harty (32), D Fitzell 6 for R Horgan (h-t), P Boyle 6 for G O'Brien (h-t), D Walsh 6 for S Maunsell (58).
DERRY – D McDermott 7; M Warnock 7, C Quinn 7, J McCloskey 6; R McCloskey 6 , O McCloskey 7, D McCloskey 7; C Convery 6, P Kelly 7; B Rodgers 7, A Grant 7, K Hinphey 7; P Henry 8, M Kirkpatrick 8, S Farren 6. Subs: P Cleary 6 for S Farren (45), D McAlary 5 for M Kirkpatrick (69).
REF – F Horgan (Tipperary)