KeyBank 2014 Annual Report Download - page 72

Figure 17. Commercial Real Estate Loans
December 31, 2014
dollars in millions
Geographic Region Percent of
Total
Commercial
MortgageWest Southwest Central Midwest Southeast Northeast National Total Construction
Nonowner-occupied:
Retail properties $ 167 $ 133 $ 95 $ 119 $ 183 $ 59 $ 129 $ 885 9.7 % $ 107 $ 778
Multifamily properties 489 143 425 531 762 126 181 2,657 29.0 551 2,106
Health facilities 198 — 192 149 115 259 171 1,084 11.9 99 985
Office buildings 230 14 145 97 48 98 — 632 6.9 86 546
Warehouses 170 10 27 105 81 84 102 579 6.3 29 550
Manufacturing facilities 19 — 11 6 56 1 — 93 1.0 16 77
Hotels/Motels 37 — 7 17 17 6 — 84 .9 — 84
Residential properties 1 — 24 2 4 13 — 44 .5 12 32
Land and development 8 — 8 6 12 11 — 45 .5 35 10
Other 61 — 15 14 67 78 102 337 3.7 14 323
Total nonowner-occupied 1,380 300 949 1,046 1,345 735 685 6,440 70.4 949 5,491
Owner-occupied 1,138 7 312 622 48 580 — 2,707 29.6 151 2,556
Total $ 2,518 $ 307 $ 1,261 $ 1,668 $ 1,393 $ 1,315 $ 685 $ 9,147 100.0 % $ 1,100 $ 8,047
Nonowner-occupied:
Nonperforming loans $ 1 — — $ 8 — $ 12 — $ 21 N/M $ 10 $ 11
Accruing loans past due 90 days or more — — — — — 3 — 3 N/M — 3
Accruing loans past due 30 through 89 days 1 — $ 4 2 — 2 — 9 N/M — 9
West – Alaska, California, Hawaii, Idaho, Montana, Oregon, Washington, and Wyoming
Southwest – Arizona, Nevada, and New Mexico
Central – Arkansas, Colorado, Oklahoma, Texas, and Utah
Midwest – Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin
Southeast – Alabama, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, South Carolina, Tennessee,
Virginia, Washington, D.C., and West Virginia
Northeast – Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont
National – Accounts in three or more regions
During 2014, nonperforming loans related to our nonowner-occupied properties decreased by $2 million from
$23 million at December 31, 2013, to $21 million at December 31, 2014, as a result of continued improvement in
asset quality and market conditions. This category of loans declined by $104 million during 2013.
Since December 31, 2013, our nonowner-occupied CRE portfolio has increased by approximately $567 million,
or 9.7%, as many of our clients have taken advantage of opportunities to permanently refinance their loans at
historically low interest rates.
If the economic recovery stalls, it may weaken the CRE market fundamentals (i.e., vacancy rates, the stability of
rental income and asset values), leading to reduced cash flow to support debt service payments. Reduced client
cash flow would adversely affect our ability to collect such payments. Accordingly, the value of CRE loan
portfolio could be adversely affected.
Commercial lease financing. We conduct commercial lease financing arrangements through our KEF line of
business and have both the scale and array of products to compete in the equipment lease financing business.
Commercial lease financing receivables represented 10% of commercial loans at December 31, 2014, and 12% at
December 31, 2013.
Commercial loan modification and restructuring
We modify and extend certain commercial loans in the normal course of business for our clients. Loan
modifications vary and are handled on a case by case basis with strategies responsive to the specific
circumstances of each loan and borrower. In many cases, borrowers have other resources and can reinforce the
credit with additional capital, collateral, guarantees, or income sources.
Modifications are negotiated to achieve mutually agreeable terms that maximize loan credit quality while at the
same time meeting our clients’ financing needs. Modifications made to loans of creditworthy borrowers not
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