KeyBank 2014 Annual Report Download - page 76
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Loans held for sale
As shown in Note 4 (“Loans and Loans Held for Sale”), our loans held for sale were $734 million at
December 31, 2014, compared to $611 million at December 31, 2013. During 2014, we recorded net gains
(losses) from loan sales of $97 million. There were no loans held for sale related to the discontinued operations
of the education lending business at December 31, 2014, and 2013.
At December 31, 2014, loans held for sale included $638 million of commercial mortgages, which increased by
$331 million from December 31, 2013, $63 million of commercial, financial and agricultural loans, which
decreased by $215 million from December 31, 2013, $18 million of residential mortgage loans, which increased
by $1 million from December 31, 2013, and $15 million of commercial lease financing, which increased $6
million from December 31, 2013. Valuations are conducted using internal models that rely on market data from
sales or nonbinding bids on similar assets, including credit spreads, treasury rates, interest rate curves and risk
profiles, as well as our own assumptions about the exit market for the loans and details about individual loans
within the respective portfolios. We review our assumptions quarterly. For additional information related to the
valuation of loans held for sale, see Note 6 (“Fair Value Measurements”).
Loan sales
As shown in Figure 20, during 2014, we sold $4.4 billion of CRE loans, $407 million of residential real estate
loans, and $376 million of commercial loans. Most of these sales came from the held-for-sale portfolio.
Among the factors that we consider in determining which loans to sell are:
/our business strategy for particular lending areas;
/whether particular lending businesses meet established performance standards or fit with our relationship
banking strategy;
/our A/LM needs;
/the cost of alternative funding sources;
/the level of credit risk;
/capital requirements; and
/market conditions and pricing.
Figure 20 summarizes our loan sales for 2014 and 2013.
Figure 20. Loans Sold (Including Loans Held for Sale)
in millions Commercial
Commercial
Real Estate
Commercial
Lease
Financing
Residential
Real Estate Total
2014
Fourth quarter $ 29 $ 2,333 $ 80 $ 103 $ 2,545
Third quarter 179 913 48 127 1,267
Second quarter 152 679 45 104 980
First quarter 16 489 39 73 617
Total $ 376 $ 4,414 $ 212 $ 407 $ 5,409
2013
Fourth quarter $ 39 $ 1,504 $ 141 $ 102 $ 1,786
Third quarter 17 923 129 184 1,253
Second quarter 181 815 90 226 1,312
First quarter 38 880 69 328 1,315
Total $ 275 $ 4,122 $ 429 $ 840 $ 5,666 (a)
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