Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

12. Goodwill and Other Intangible Assets

Our annual goodwill impairment testing is performed as of October 1 each year, or more frequently as events occur or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying amount. Additional information pertaining to our accounting policy for goodwill and other intangible assets is summarized in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Goodwill and Other Intangible Assets.”

We conducted a quantitative analysis as of October 1, 2019, and concluded goodwill was not impaired.

We determined that the estimated fair value of each of Key’s reporting units was greater than its carrying amount. The estimated fair value of the Consumer Bank reporting unit was 76% greater than its carrying amount, the

estimated fair value of the Commercial Bank reporting unit was 29% greater than its carrying amount and the estimated fair value of the Institutional Bank reporting unit, which is aggregated in the Commercial Bank reporting segment, was 34% greater than its carrying amount. The fair values of each reporting unit were estimated using a combination of income and market approaches. The income approach utilized discounted cash flow projections for each reporting unit. The market approach consisted primarily of public company metrics but also considered recent transactions in the financial services industry. The carrying amounts of Key’s reporting units represent the average equity based on risk-weighted regulatory capital for goodwill impairment testing and management reporting purposes.

Based on our quarterly review of impairment indicators during 2019 and 2018, it was not necessary to perform further reviews of goodwill recorded in our reporting units. We will continue to monitor as appropriate.

Changes in the carrying amount of goodwill by reporting segment are presented in the following table:



in millions	Consumer Bank			Commercial Bank		Total
BALANCE AT DECEMBER 31, 2017	$	2,124		$	414	$	2,538
KIBS divestiture	(22		)	—		(22		)
BALANCE AT DECEMBER 31, 2018	2,102			414		2,516
Reallocation of goodwill	(498		)	498		—
Laurel Road acquisition	148			—		148
BALANCE AT DECEMBER 31, 2019	$	1,752		$	912	$	2,664

Additional information regarding the above acquisition and divestiture is provided in Note 15 (“Acquisitions, Divestiture, and Discontinued Operations”). Additional information regarding the above reallocation of goodwill is provided in Note 25 (“Business Segment Reporting”).

As of December 31, 2019, we expect goodwill in the amount of $608 million to be deductible for tax purposes in future periods.

There were no accumulated impairment losses related to any of Key’s reporting units at December 31, 2019, December 31, 2018, and December 31, 2017.

The following table shows the gross carrying amount and the accumulated amortization of intangible assets subject to amortization:



	2019				2018
December 31, in millions	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Intangible assets subject to amortization:
Core deposit intangibles	$	355	$	193	$	396	$	184
PCCR intangibles	152		145		152		138
Other intangible assets	115		31		115		25
Total	$	622	$	369	$	663	$	347

The following table presents estimated intangible asset amortization expense for the next five years.



	Estimated
in millions	2020		2021		2022		2023		2024
Intangible asset amortization expense	$	62	$	52	$	43	$	34	$	25