KeyBank 2015 Annual Report Download - page 67

adjustments to our tax reserves. In 2015, our effective tax rate was reduced by additional federal tax credit
refunds filed for prior years. In addition, in 2014 and 2013, our effective tax rate was lower due to the early
termination of certain leveraged leases that resulted in nontaxable gains pursuant to a prior settlement with the
IRS.
We recorded a valuation allowance of $.4 million at December 31, 2015, compared to $.3 million at
December 31, 2014, and $1 million at December 31, 2013, against the gross deferred tax assets for certain state
net operating loss and state credit carryforwards.
Line of Business Results
This section summarizes the financial performance and related strategic developments of our two major business
segments (operating segments): Key Community Bank and Key Corporate Bank. Note 23 (“Line of Business
Results”) describes the products and services offered by each of these business segments, provides more detailed
financial information pertaining to the segments and certain lines of business, and explains “Other Segments”
and “Reconciling Items.”
Figure 12 summarizes the contribution made by each major business segment to our “taxable-equivalent revenue
from continuing operations” and “income (loss) from continuing operations attributable to Key” for each of the
past three years.
Figure 12. Major Business Segments - Taxable-Equivalent (“TE”) Revenue from Continuing Operations
and Income (Loss) from Continuing Operations Attributable to Key
Year ended December 31, Change 2015 vs. 2014
dollars in millions 2015 2014 2013 Amount Percent
REVENUE FROM CONTINUING OPERATIONS (TE)
Key Community Bank $ 2,275 $ 2,215 $ 2,315 $ 60 2.7%
Key Corporate Bank 1,811 1,646 1,557 165 10.0
Other Segments 177 257 243 (80) (31.1)
Total Segments 4,263 4,118 4,115 145 3.5
Reconciling Items (7) (4) (1) (3) N/M
Total $ 4,256 $ 4,114 $ 4,114 $ 142 3.5%
INCOME (LOSS) FROM CONTINUING OPERATIONS
ATTRIBUTABLE TO KEY
Key Community Bank $ 256 $ 242 $ 197 $ 14 5.8%
Key Corporate Bank 545 548 529 (3) (.6)
Other Segments 124 158 158 (34) (21.5)
Total Segments 925 948 884 (23) (2.4)
Reconciling Items (10) (9) (14) (1) N/M
Total $ 915 $ 939 $ 870 $ (24) (2.6)%
Key Community Bank summary of operations
As shown in Figure 13, Key Community Bank recorded net income attributable to Key of $256 million for 2015,
compared to $242 million for 2014, and $197 million for 2013. The increase in 2015 was primarily due to growth
in net interest income, as the value of deposits increased, and noninterest income, partially offset by higher
provision for credit losses and noninterest expense.
Taxable-equivalent net interest income increased $40 million, or 2.8%, from 2014. Average loans and leases
grew $729 million while average deposits increased $837 million compared to 2014. The positive contribution to
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