KeyBank 2014 Annual Report Download - page 158

A breakdown of the individual and collective ALLL and the corresponding loan balances as of December 31,
2013, follows:
Allowance Outstanding
December 31, 2013
in millions
Individually
Evaluated for
Impairment
Collectively
Evaluated for
Impairment
Purchased
Credit
Impaired Loans
Individually
Evaluated for
Impairment
Collectively
Evaluated for
Impairment
Purchased
Credit
Impaired
Commercial, financial and agricultural $ 8 $ 354 — $ 24,963 $ 50 $ 24,913 —
Commercial real estate:
Commercial mortgage 2 163 — 7,720 27 7,692 $ 1
Construction — 32 — 1,093 50 1,043 —
Total commercial real estate loans 2 195 — 8,813 77 8,735 1
Commercial lease financing — 62 — 4,551 — 4,551 —
Total commercial loans 10 611 — 38,327 127 38,199 1
Real estate — residential mortgage 9 27 $ 1 2,187 56 2,117 14
Home equity:
Key Community Bank 10 74 — 10,340 102 10,237 1
Other 1 10 — 334 12 322 —
Total home equity loans 11 84 — 10,674 114 10,559 1
Consumer other — Key Community Bank 1 28 — 1,449 3 1,446 —
Credit cards 1 33 — 722 5 717 —
Consumer other:
Marine 10 19 — 1,028 52 976 —
Other — 3 — 70 1 69 —
Total consumer other 10 22 — 1,098 53 1,045 —
Total consumer loans 32 194 1 16,130 231 15,884 15
Total ALLL — continuing operations 42 805 1 54,457 358 54,083 16
Discontinued operations 1 38 — 4,497(a) 13 4,484(a) —
Total ALLL — including discontinued operations $ 43 $ 843 $ 1 $ 58,954 $ 371 $ 58,567 $ 16
(a) Amount includes $2.1 billion of loans carried at fair value that are excluded from ALLL consideration.
The liability for credit losses inherent in lending-related unfunded commitments, such as letters of credit and
unfunded loan commitments, is included in “accrued expense and other liabilities” on the balance sheet. We
establish the amount of this reserve by considering both historical trends and current market conditions quarterly,
or more often if deemed necessary. Our liability for credit losses on lending-related commitments is $36 million
at December 31, 2014. When combined with our ALLL, our total allowance for credit losses represented 1.45%
of loans at December 31, 2014, compared to 1.63% at December 31, 2013.
Changes in the liability for credit losses on unfunded lending-related commitments are summarized as follows:
Year ended December 31,
in millions 2014 2013 2012
Balance at beginning of period $37$29$45
Provision (credit) for losses on lending-related commitments (1) 8 (16)
Balance at end of period $36$37$29
6. Fair Value Measurements
Fair Value Determination
As defined in the applicable accounting guidance, fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market participants in our principal market. We have
established and documented our process for determining the fair values of our assets and liabilities, where
applicable. Fair value is based on quoted market prices, when available, for identical or similar assets or
liabilities. In the absence of quoted market prices, we determine the fair value of our assets and liabilities using
valuation models or third-party pricing services. Both of these approaches rely on market-based parameters,
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