KeyBank 2007 Annual Report Download - page 81

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79
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS KEYCORP AND SUBSIDIARIES
The amortized cost, unrealized gains and losses, and fair value of Key’s
securities available for sale and held-to-maturity securities are presented
in the following tables. Gross unrealized gains and losses are represented
by the difference between the amortized cost and the fair value of
securities on the balance sheet as of the dates indicated. Accordingly, the
amount of these gains and losses may change in the future as market
conditions change.
6. SECURITIES
December 31, 2007 2006
Gross Gross Gross Gross
Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair
in millions Cost Gains Losses Value Cost Gains Losses Value
SECURITIES AVAILABLE FOR SALE
U.S. Treasury, agencies and corporations $19 — — $19 $94 — — $94
States and political subdivisions 10 — — 10 14 $ 1 — 15
Collateralized mortgage obligations 6,167 $33 $33 6,167 7,098 13 $110 7,001
Other mortgage-backed securities 1,393 13 3 1,403 336 2 4 334
Retained interests in securitizations 149 36 — 185 151 57 — 208
Other securities 72 8 4 76 165 10 — 175
Total securities available for sale $7,810 $90 $40 $7,860 $7,858 $83 $114 $7,827
HELD-TO-MATURITY SECURITIES
States and political subdivisions $9 — — $9 $20 $1 — $21
Other securities 19 — — 19 21 — — 21
Total held-to-maturity securities $28 — — $28 $41 $1 — $42
When Key retains an interest in loans it securitizes, it bears risk that the
loans will be prepaid (which would reduce expected interest income) or
not paid at all. Key accounts for these retained interests as debt securities
and classifies them as available for sale.
“Other securities” held in the available-for-sale portfolio are primarily
marketable equity securities. “Other securities” held in the held-to-
maturity portfolio are primarily foreign bonds.
Realized gains and losses related to securities available for sale were
as follows:
Duration of Unrealized Loss Position
Less Than 12 Months 12 Months or Longer Total
Gross Gross Gross
Fair Unrealized Fair Unrealized Fair Unrealized
in millions Value Losses Value Losses Value Losses
DECEMBER 31, 2007
Securities available for sale:
Collateralized mortgage obligations $656 $ 8 $1,042 $25 $1,698 $33
Other mortgage-backed securities 83 1 67 2 150 3
Other securities 37 4 — — 37 4
Total temporarily impaired securities $776 $13 $1,109 $27 $1,885 $40
DECEMBER 31, 2006
Securities available for sale:
Collateralized mortgage obligations $766 $1 $4,354 $109 $5,120 $110
Other mortgage-backed securities 138 1 86 3 224 4
Total temporarily impaired securities $904 $2 $4,440 $112 $5,344 $114
The following table summarizes Key’s securities that were in an unrealized loss position.
Year ended December 31,
in millions 2007 2006 2005
Realized gains $40 $137 $13
Realized losses 75 136 12
Net securities (losses) gains $(35) $1 $1