KeyBank 2014 Annual Report Download - page 173

Education lending business. The discontinued education lending business consists of assets and liabilities
(recorded at fair value) in the securitization trusts, as well as loans in portfolio (recorded at fair value), and loans
in portfolio (recorded at carrying value with appropriate valuation reserves) that are outside the trusts. All of
these loans were excluded from the table above as follows:
/Loans at carrying value, net of allowance, of $2.1 billion ($1.8 billion at fair value) at December 31, 2014,
and $2.4 billion ($2.0 billion at fair value) at December 31, 2013;
/Portfolio loans at fair value of $191 million at December 31, 2014, and $147 million at December 31, 2013;
and
/Loans in the trusts at fair value of $2.0 billion at December 31, 2013.
Securities issued by the education lending securitization trusts, which are the primary liabilities of the trusts,
totaling $1.8 billion in fair value at December 31, 2013, are also excluded from the above table.
These loans and securities are classified as Level 3 because we rely on unobservable inputs when determining
fair value since observable market data is not available.
On September 30, 2014, we sold the residual interests in all of our outstanding education loan securitization
trusts to a third party. With that transaction, in accordance with the applicable accounting guidance, we
deconsolidated the securitization trusts and removed the trust assets and liabilities from our balance sheet at
September 30, 2014. Additional information regarding the sale of the residual interests and deconsolidation of
the securitization trusts is provided in Note 13 (“Acquisitions and Discontinued Operations”).
Residential real estate mortgage loans. Residential real estate mortgage loans with carrying amounts of $2.2
billion at December 31, 2014, and December 31, 2013, are included in “Loans, net of allowance” in the previous
table.
Short-term financial instruments. For financial instruments with a remaining average life to maturity of less
than six months, carrying amounts were used as an approximation of fair values.
7. Securities
The amortized cost, unrealized gains and losses, and fair value of our securities available for sale and held-to-
maturity securities are presented in the following table. Gross unrealized gains and losses represent 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. For
more information about our securities available for sale and held-to-maturity securities and the related accounting
policies, see Note 1 (“Summary of Significant Accounting Policies”).
2014 2013
December 31,
in millions
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
SECURITIES AVAILABLE FOR SALE
States and political subdivisions $22 $1 — $23 $39 $1 — $40
Collateralized mortgage obligations 11,310 96 $ 136 11,270 11,120 152 $ 272 11,000
Other mortgage-backed securities 2,004 32 1 2,035 1,270 27 11 1,286
Other securities 29 3 — 32 17 3 — 20
Total securities available for sale $ 13,365 $ 132 $ 137 $ 13,360 $ 12,446 $ 183 $ 283 $ 12,346
HELD-TO-MATURITY SECURITIES
Collateralized mortgage obligations $ 4,755 $ 15 $ 57 $ 4,713 $ 4,736 $ 6 $ 145 $ 4,597
Other mortgage-backed securities 240 1 — 241 —— ——
Other securities 20 — — 20 20 — — 20
Total held-to-maturity securities $ 5,015 $ 16 $ 57 $ 4,974 $ 4,756 $ 6 $ 145 $ 4,617
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