KeyBank 2008 Annual Report Download - page 66

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64
MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION & RESULTS OF OPERATIONS KEYCORP AND SUBSIDIARIES
Year ended December 31,
dollars in millions 2008 2007 2006 2005 2004
Average loans outstanding from
continuing operations $75,619 $67,357 $64,996 $61,997 $58,226
Allowance for loan losses at beginning of period $ 1,200 $ 944 $ 966 $1,138 $1,406
Loans charged off:
Commercial, financial and agricultural 332 128 92 80 145
Real estate — commercial mortgage 83 16 24 19 35
Real estate — construction 494 54455
Total commercial real estate loans
(a),(b)
577 70 28 24 40
Commercial lease financing 83 51 40 183 52
Total commercial loans 992 249 160 287 237
Real estate — residential mortgage 15 67717
Home equity:
Community Banking 43 21 19 16 21
National Banking 47 16 11 10 42
Total home equity loans 90 37 30 26 63
Consumer other — Community Banking 44 31 33 38 42
Consumer other — National Banking:
Marine 85 33 23 23 23
Education
(c)
131 5 6 15 16
Other 14 9 9 13 185
Total consumer other — National Banking 230 47 38 51 224
Total consumer loans 379 121 108 122 346
Total loans 1,371 370 268 409 583
Recoveries:
Commercial, financial and agricultural 54 37 34 21 41
Real estate — commercial mortgage 16538
Real estate — construction 21134
Total commercial real estate loans
(b)
376612
Commercial lease financing 20 22 27 35 14
Total commercial loans 77 66 67 62 67
Real estate — residential mortgage 11111
Home equity:
Community Banking 33433
National Banking 11323
Total home equity loans 44756
Consumer other — Community Banking 68789
Consumer other — National Banking:
Marine 18 12 11 10 10
Education 21233
Other 333556
Total consumer other — National Banking 23 16 16 18 69
Total consumer loans 34 29 31 32 85
Total loans 111 95 98 94 152
Net loans charged off (1,260) (275) (170) (315) (431)
Provision for loan losses from continuing operations 1,835 529 150 143 185
Credit for loan losses from discontinued operations —— (3) — —
Reclassification of allowance for credit losses
on lending-related commitments
(d)
—— — — (70)
Allowance related to loans acquired, net 32 ———48
Foreign currency translation adjustment (4) 2 1——
Allowance for loan losses at end of year $ 1,803 $1,200 $944 $ 966 $1,138
Net loan charge-offs to average loans from
continuing operations 1.67% .41% .26% .51% .74%
Allowance for loan losses to year-end loans 2.36 1.69 1.43 1.45 1.80
Allowance for loan losses to nonperforming loans 147.18 174.67 439.07 348.74 369.48
(a)
During the second quarter of 2008, Key transferred $384 million of commercial real estate loans ($719 million of primarily construction loans, net of $335 million in net charge-offs)
from the loan portfolio to held-for-sale status.
(b)
See Figure 18 and the accompanying discussion on page 42 for more information related to Key’s commercial real estate portfolio.
(c)
On March 31, 2008, Key transferred $3.284 billion of education loans from loans held for sale to the loan portfolio.
(d)
Included in “accrued expenses and other liabilities” on the consolidated balance sheet.
FIGURE 38. SUMMARY OF LOAN LOSS EXPERIENCE