KeyBank 2014 Annual Report Download - page 60

Figure 7. Noninterest Income
Year ended December 31, Change 2014 vs. 2013
dollars in millions 2014 2013 2012 Amount Percent
Trust and investment services income $ 403 $ 393 $ 375 $ 10 2.5 %
Investment banking and debt placement fees 397 333 327 64 19.2
Service charges on deposit accounts 261 281 287 (20) (7.1)
Operating lease income and other leasing gains 96 117 201 (21) (17.9)
Corporate services income 178 172 168 6 3.5
Cards and payments income 166 162 135 4 2.5
Corporate-owned life insurance income 118 120 122 (2) (1.7)
Consumer mortgage income 10 19 40 (9) (47.4)
Mortgage servicing fees 46 58 24 (12) (20.7)
Net gains (losses) from principal investing 78 52 72 26 50.0
Other income (a) 44 59 105 (15) (25.4)
Total noninterest income $ 1,797 $ 1,766 $1,856 $ 31 1.8 %
(a) Included in this line item is our “Dealer trading and derivatives income (loss).” Additional detail is provided in Figure 8.
Figure 8. Dealer Trading and Derivatives Income (Loss)
Year ended December 31, Change 2014 vs. 2013
dollars in millions 2014 2013 2012 Amount Percent
Dealer trading and derivatives income (loss), proprietary (a), (b) $ (18) $ (14) $ (2) $ (4) N/M
Dealer trading and derivatives income (loss), nonproprietary (b) 727 6 (20) (74.1) %
Total dealer trading and derivatives income (loss) $ (11) $ 13 $ 4 $ (24) N/M
(a) For the year ended December 31, 2014, income of $4 million related to foreign exchange, interest rate, and commodity derivative trading
was offset by losses related to equity securities trading, fixed income, and credit portfolio management activities. For the year ended
December 31, 2013, income of $3 million related to foreign exchange and interest rate derivative trading was offset by losses related to
fixed income, equity securities trading, commodity derivative trading, and credit portfolio management activities. For the year ended
December 31, 2012, equity securities trading and credit portfolio management securities trading constitute the majority of this amount.
These losses were partially offset by income of $6 million related to fixed income, foreign exchange, interest rate, and commodity
derivative trading activities.
(b) The allocation between proprietary and nonproprietary is made based upon whether the trade is conducted for the benefit of Key or
Key’s clients rather than based upon rulemaking under the Volcker Rule. The prohibitions and restrictions on proprietary trading
activities contemplated by the Volcker Rule were detailed in a final rule approved by federal banking regulators in December 2013,
which became effective April 1, 2014. For more information, see the discussion under the heading “Other regulatory developments under
the Dodd-Frank Act — ‘Volcker Rule’” in the section entitled “Supervision and Regulation” in Item 1 of this report.
The following discussion explains the composition of certain elements of our noninterest income and the factors
that caused those elements to change.
Trust and investment services income
Trust and investment services income is one of our largest sources of noninterest income and consists of
brokerage commissions, trust and asset management commissions, and insurance income. The assets under
management that primarily generate these revenues are shown in Figure 9. For 2014, trust and investment
services income increased $10 million, or 2.5%, from the prior year primarily due to the third quarter 2014
acquisition of Pacific Crest Securities. For 2013, trust and investment services income increased $18 million, or
4.8%, from the prior year.
A significant portion of our trust and investment services income depends on the value and mix of assets under
management. At December 31, 2014, our bank, trust, and registered investment advisory subsidiaries had assets
under management of $39.2 billion, compared to $36.9 billion at December 31, 2013 and $34.7 billion at
December 31, 2012. As shown in Figure 9, increases across all portfolios were primarily attributable to market
appreciation.
47