KeyBank 2004 Annual Report Download - page 43

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NEXT PAGEPREVIOUS PAGE SEARCH BACK TO CONTENTS 41
MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION & RESULTS OF OPERATIONS KEYCORP AND SUBSIDIARIES
December 31, 2004 2003 2002
Percent of Percent of Percent of Percent of Percent of Percent of
Allowance Loan Type Allowance Loan Type Allowance Loan Type
to Total to Total to Total to Total to Total to Total
dollars in millions Amount Allowance Loans Amount Allowance Loans Amount Allowance Loans
Commercial, financial and agricultural $589 51.8% 28.3% $799 56.8% 27.1% $ 961 66.2% 27.9%
Real estate — commercial mortgage 39 3.4 11.0 42 3.0 9.1 48 3.3 9.6
Real estate — construction 165 14.5 8.0 148 10.5 7.9 145 10.0 9.1
Commercial lease financing 217 19.1 15.9 152 10.8 13.6 105 7.2 12.0
Total commercial loans 1,010 88.8 63.2 1,141 81.1 57.7 1,259 86.7 58.6
Real estate — residential mortgage 6.52.1 3.22.5 2.13.1
Home equity 45 4.0 20.5 77 5.5 24.0 65 4.5 22.1
Consumer — direct 41 3.6 2.9 47 3.3 3.4 16 1.1 3.5
Consumer — indirect lease financing 3.2.1 8.6.5 5.4 1.4
Consumer — indirect other 18 1.6 4.8 118 8.4 8.1 103 7.1 7.9
Total consumer loans 113 9.9 30.4 253 18.0 38.5 191 13.2 38.0
Loans held for sale 15 1.3 6.4 12 .9 3.8 2 .1 3.4
Total $1,138 100.0% 100.0% $1,406 100.0% 100.0% $1,452 100.0% 100.0%
2001 2000
Percent of Percent of Percent of Percent of
Allowance Loan Type Allowance Loan Type
to Total to Total to Total to Total
dollars in millions Amount Allowance Loans Amount Allowance Loans
Commercial, financial and agricultural $1,182 70.5% 28.7% $ 698 69.7% 30.0%
Real estate — commercial mortgage 45 2.7 10.5 34 3.4 10.3
Real estate — construction 145 8.6 9.3 70 7.0 7.7
Commercial lease financing 90 5.4 11.6 47 4.7 10.7
Total commercial loans 1,462 87.2 60.1 849 84.8 58.7
Real estate — residential mortgage 4 .2 3.7 2 .2 6.3
Home equity 63 3.8 17.7 29 2.9 14.8
Consumer — direct 24 1.4 3.7 14 1.4 3.8
Consumer — indirect lease financing 7 .4 3.2 10 1.0 4.5
Consumer — indirect other 114 6.8 8.4 95 9.5 8.6
Total consumer loans 212 12.6 36.7 150 15.0 38.0
Loans held for sale 3 .2 3.2 2 .2 3.3
Total $1,677 100.0% 100.0% $1,001 100.0% 100.0%
FIGURE 29. ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES
As shown in Figure 29, the 2004 decrease in Key’s allowance for loan
losses was attributable to developments in both the commercial and
consumer loan portfolios.
•Credit quality trends in certain commercial loan portfolios have
been improving.
•During the fourth quarter of 2004, we sold Key’s broker-originated
home equity loan portfolio and reclassified the indirect automobile
loan portfolio to held-for-sale status in anticipation of its sale.
•During the second quarter of 2004, we sold the indirect recreational
vehicle loan portfolio.
•During the first quarter of 2004, we reclassified $70 million of Key’s
allowance for loan losses to the separate allowance mentioned above.
During the second quarter of 2004, the portion of the allowance for loan
losses allocated to Key’s commercial loan portfolio at December 31 for
each of the four preceding years was reallocated among the various
segments of that portfolio to more accurately reflect the inherent risk
embedded in those segments. The reallocation did not change the total
allowance previously allocated to either commercial loans or the loan
portfolio as a whole.