KeyBank 2006 Annual Report Download - page 86

86
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS KEYCORP AND SUBSIDIARIES
During 2006, Key acquired other intangible assets with a fair value of
$18 million in conjunction with the purchase of Austin Capital
Management, Ltd. These assets are being amortized using the straight-
line method over periods ranging from five to ten years. During 2005,
Key acquired other intangible assets with fair values of $21 million and
$12 million in conjunction with the purchase of ORIX and Malone
Mortgage Company, respectively. These assets are being amortized
based on expected cash flows over periods ranging from three to five
years. During 2005, other intangible assets acquired from AEBF in
December 2004 were adjusted by $22 million. Additional information
pertaining to these acquisitions is included in Note 3 (“Acquisitions and
Divestitures”), which begins on page 75.
Changes in the carrying amount of goodwill by major business group are
as follows:
Key’sannual goodwill impairment testing was performed as of October
1, 2006, and management determined that no impairment existed at
that date. On December 1, Key announced that it sold the nonprime
mortgage loan portfolio held by the Champion Mortgage finance business
on November 29, and also announced that it had entered into a separate
agreement to sell Champion’sloan origination platform. As a result,
$170 million of goodwill related to the Champion Mortgage finance
business was written off during the fourth quarter of 2006. During the
fourth quarter of 2004, $55 million of goodwill related to Key’s nonprime
indirect automobile lending business was written off.
Community National
in millions Banking Banking Total
BALANCE AT DECEMBER 31, 2004 $786 $573 $1,359
Acquisition of Payroll Online — 5 5
Adjustment to EverTrust goodwill (4) — (4)
Adjustment to AEBF goodwill — (15) (15)
Acquisition of ORIX —99
Acquisition of Malone Mortgage Company — 1 1
BALANCE AT DECEMBER 31, 2005 $782 $573 $1,355
Acquisition of Austin Capital Management — 17 17
Divestiture of Champion Mortgage finance business — (170) (170)
BALANCE ATDECEMBER 31, 2006 $782 $420 $1,202
Selected financial information pertaining to the components of Key’s short-termborrowings is as follows:
dollars in millions 2006 2005 2004
FEDERAL FUNDS PURCHASED
Balance at year end $1,899 $3,074 $ 421
Average during the year
a
1,142 1,489 1,801
Maximum month-end balance 3,147 3,109 4,222
Weighted-average rate during the year
a
5.43% 3.09% .89%
Weighted-average rate at December 31 5.45 4.20 2.01
SECURITIES SOLD UNDER REPURCHASE AGREEMENTS
Balance at year end $1,744 $1,761 $1,724
Average during the year
a
1,073 1,088 1,328
Maximum month-end balance 1,932 1,966 2,300
Weighted-average rate during the year
a
4.19% 2.30% .45%
Weighted-average rate at December 31 4.86 3.83 1.97
SHORT-TERM BANK NOTES
Balance at year end —$101 —
Average during the year $48 27 $ 36
Maximum month-end balance 101 101 100
Weighted-average rate during the year 4.26% 4.07% 1.05%
Weighted-average rate at December 31 —4.24 —
OTHER SHORT-TERM BORROWINGS
Balance at year end $1,192 $1,679 $2,515
Average during the year 2,236 2,769 2,595
Maximum month-end balance 2,594 3,390 2,853
Weighted-average rate during the year 3.89% 2.67% 1.16%
Weighted-average rate at December 31 3.32 4.41 1.63
Rates presented in the above table exclude the effects of interest rate swaps and caps, which modify the repricing characteristics of certain short-term borrowings. For more information about
such financial instruments, see Note 19 (“Derivatives and Hedging Activities”), which begins on page 100.
a
From continuing operations.
11. SHORT-TERM BORROWINGS
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