KeyBank 2014 Annual Report Download - page 146

We evaluate purchased loans for impairment in accordance with the applicable accounting guidance. Purchased
loans that have evidence of deterioration in credit quality since origination and for which it is probable, at
acquisition, that all contractually required payments will not be collected are deemed PCI and initially recorded
at fair value without recording an allowance for loan losses. At the date of acquisition, the estimated gross
contractual amount receivable of all PCI loans totaled $41 million. The estimated cash flows not expected to be
collected (the nonaccretable amount) were $11 million, and the accretable amount was approximately $5 million.
The difference between the fair value and the cash flows expected to be collected from the purchased loans is
accreted to interest income over the remaining term of the loans.
At December 31, 2014, the outstanding unpaid principal balance and carrying value of all PCI loans was $20
million and $13 million, respectively. Changes in the accretable yield during 2014 included accretion and net
reclassifications of less than $1 million, resulting in an ending balance of $5 million at December 31, 2014.
At December 31, 2014, the approximate carrying amount of our commercial nonperforming loans outstanding
represented 74% of their original contractual amount, total nonperforming loans outstanding represented 79% of
their original contractual amount owed, and nonperforming assets in total were carried at 79% of their original
contractual amount.
At December 31, 2014, our 20 largest nonperforming loans totaled $88 million, representing 21% of total loans
on nonperforming status. At December 31, 2013, the 20 largest nonperforming loans totaled $86 million,
representing 17% of total loans on nonperforming status.
Nonperforming loans and loans held for sale reduced expected interest income by $16 million for the year ended
December 31, 2014, and $23 million for the year ended December 31, 2013.
133