Asset Quality

3 Months Ended

Mar. 31, 2012

Asset Quality [Abstract]

Asset Quality

4. Asset Quality

We manage our exposure to credit risk by closely monitoring loan performance trends and general economic conditions. A key indicator of the potential for future credit losses is the level of nonperforming assets and past due loans.

Our nonperforming assets and past due loans were as follows:

	March 31,		December 31,		March 31,
in millions	2012		2011		2011
Total nonperforming loans	$	666	$	727	$	885
Nonperforming loans held for sale		24		46		86
OREO		61		65		97
Other nonperforming assets		16		21		21
Total nonperforming assets	$	767	$	859	$	1,089
Restructured loans included in nonperforming loans(a)	$	184	$	191	$	136
Restructured loans with an allocated specific allowance (b)		47		50		29
Specifically allocated allowance for restructured loans (c)		18		10		9
Accruing loans past due 90 days or more	$	169	$	164	$	153
Accruing loans past due 30 through 89 days		420		441		474

(a) A loan is “restructured” (i.e., troubled debt restructurings) when the borrower is experiencing financial difficulty and we grant a concession that we would not otherwise have considered to improve the collectability of the loan. Typical concessions include reducing the interest rate, extending the maturity date or reducing the principal balance.

(b) Included in individually impaired loans allocated a specific allowance.

(c) Included in allowance for individually evaluated impaired loans.

At March 31, 2012, the approximate carrying amount of our commercial nonperforming loans outstanding represented 58% of their original contractual amount, total nonperforming loans outstanding represented 68% of their original contractual amount owed, and nonperforming assets in total were carried at 63% of their original contractual amount.

At March 31, 2012, our twenty largest nonperforming loans totaled $215 million, representing 32% of total loans on nonperforming status from continuing operations. At March 31, 2011, the twenty largest nonperforming loans totaled $284 million representing 32% of total loans on nonperforming status.

The amount by which nonperforming loans and loans held for sale reduced expected interest income was $6 million for the three months ended March 31, 2012, and $31 million for the year ended December 31, 2011.

The following tables set forth a further breakdown of individually impaired loans as of March 31, 2012, December 31, 2011 and March 31, 2011:

March 31, 2012	Recorded			Unpaid   Principal			Specific		Average   Recorded
in millions	Investment		(a)	Balance		(b)	Allowance		Investment
With no related allowance recorded:
Commercial, financial and agricultural	$	77		$	189			—	$	83
Commercial real estate:
Commercial mortgage		113			252			—		106
Construction		47			164			—		39
Total commercial real estate loans		160			416			—		145
Total commercial loans with no related allowance recorded		237			605			—		228
With an allowance recorded:
Commercial, financial and agricultural		49			60		$	19		55
Commercial real estate:
Commercial mortgage		69			111			16		83
Construction		4			4			3		8
Total commercial real estate loans		73			115			19		91
Total commercial loans with an allowance recorded		122			175			38		146
Total	$	359		$	780		$	38	$	374

(a) The Recorded Investment in impaired loans represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, unamortized premium or discount, and reflects direct charge-offs. This amount is a component of total loans on our consolidated balance sheet.

(b) The Unpaid Principal Balance represents the customer’s legal obligation to us.

December 31, 2011	Recorded			Unpaid   Principal			Specific		Average   Recorded
in millions	Investment		(a)	Balance		(b)	Allowance		Investment
With no related allowance recorded:
Commercial, financial and agricultural	$	88		$	195			—	$	75
Commercial real estate:
Commercial mortgage		100			240			—		131
Construction		30			113			—		98
Total commercial real estate loans		130			353			—		229
Total loans with no related allowance recorded		218			548			—		304
With an allowance recorded:
Commercial, financial and agricultural		62			70		$	26		75
Commercial real estate:
Commercial mortgage		96			115			21		91
Construction		12			18			4		29
Total commercial real estate loans		108			133			25		120
Commercial lease financing		—			—			—		6
Total loans with an allowance recorded		170			203			51		201
Total	$	388		$	751		$	51	$	505

(a) The Recorded Investment in impaired loans represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, unamortized premium or discount, and reflects direct charge-offs. This amount is a component of total loans on our consolidated balance sheet.

(b) The Unpaid Principal Balance represents the customer’s legal obligation to us.

March 31, 2011	Recorded			Unpaid   Principal			Specific		Average   Recorded
in millions	Investment		(a)	Balance		(b)	Allowance		Investment
With no related allowance recorded:
Commercial, financial and agricultural	$	84		$	178			—	$	72
Commercial real estate:
Commercial mortgage		156			298			—		159
Construction		121			408			—		144
Total commercial real estate loans		277			706			—		303
Total loans with no related allowance recorded		361			884			—		375
With an allowance recorded:
Commercial, financial and agricultural		63			117		$	25		76
Commercial real estate:
Commercial mortgage		62			115			13		74
Construction		7			11			1		26
Total commercial real estate loans		69			126			14		100
Commercial lease financing		—			—			—		6
Total loans with an allowance recorded		132			243			39		182
Total	$	493		$	1,127		$	39	$	557

(a) The Recorded Investment in impaired loans represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, unamortized premium or discount, and reflects direct charge-offs. This amount is a component of total loans on our consolidated balance sheet.

(b) The Unpaid Principal Balance represents the customer’s legal obligation to us.

For the three months ended March 31, 2012 and 2011, interest income recognized on the outstanding balances of accruing impaired loans totaled $1 million respectively.

At March 31, 2012, aggregate restructured loans (accrual, nonaccrual and held-for-sale loans) totaled $293 million, compared to $276 million at December 31, 2011 and $242 million at March 31, 2011. We added $56 million in restructured loans during the first three months of 2012, partially offset by $39 million in payments and charge-offs.

A further breakdown of restructured loans (TDRs) included in nonperforming loans by loan category as of March 31, 2012, follows:

March 31, 2012 dollars in millions	Number of loans		Pre-modification Outstanding Recorded Investment		Post-modification Outstanding Recorded Investment
LOAN TYPE
Nonperforming:
Commercial, financial and agricultural		102	$	105	$	64
Commercial real estate:
Real estate — commercial mortgage		16		102		64
Real estate — construction		8		35		19
Total commercial real estate loans		24		137		83
Total commercial loans		126		242		147
Real estate — residential mortgage		43		5		5
Home equity:
Key Community Bank		27		3		3
Other		32		1		1
Total home equity loans		59		4		4
Consumer other — Key Community Bank		2		—		—
Consumer other:
Marine		48		28		28
Other		6		—		—
Total consumer other		54		28		28
Total consumer loans		158		37		37
Total nonperforming TDRs		284		279		184
Prior-year accruing(a)
Commercial, financial and agricultural		176		20		11
Commercial real estate:
Real estate — commercial mortgage		7		75		57
Real estate — construction		1		15		2
Total commercial real estate loans		8		90		59
Total commercial loans		184		110		70
Real estate — residential mortgage		113		12		12
Home equity:
Key Community Bank		88		7		7
Other		104		3		3
Total home equity loans		192		10		10
Consumer other — Key Community Bank		19		—		—
Consumer other:
Marine		140		15		15
Other		51		2		2
Total consumer other		191		17		17
Total consumer loans		515		39		39
Total prior-year accruing TDRs		699		149		109
Total TDRs		983	$	428	$	293

(a) All TDRs that were restructured prior to January 1, 2012 and are fully accruing.

We classify loan modifications as TDRs when a borrower is experiencing financial difficulties and we have granted a concession to the borrower without commensurate financial, structural or legal consideration. All commercial loan TDRs, regardless of size, are evaluated for impairment individually to determine the probable loss content and are assigned a specific loan allowance if deemed appropriate. Consumer loan TDRs are assigned a loss rate that reflects the current assessment of that category of consumer loans to determine the appropriate allowance level. The financial effects of TDRs are reflected in the components that comprise the allowance for loan and lease losses in either the amount of charge-offs or loan loss provision and appropriately impact the ultimate allowance level.

Commercial and consumer loan TDRs are considered subsequently defaulted at 90 days past due and when they are greater than 60 days past due, respectively, for principal and interest payments. There were no significant commercial or consumer loans that were designated as TDRs during calendar year 2011, for which there was a payment default during the first three months of 2012.

Our loan modifications are handled on a case by case basis and are negotiated to achieve mutually agreeable terms that maximize loan collectability and meet our client’s financial needs. A majority of our concessions granted to borrowers are in the form of interest rate reductions. Other concession types include forgiveness of principal and other modifications of loan terms. Consumer loan concessions include Home Affordable Modification Program (“HAMP”) loans of approximately $3 million as of March 31, 2012. These loan concessions have successfully completed the required trial period under HAMP and as a result have been permanently modified and are included in consumer TDRs.

The following table shows the concession types for our commercial accruing and nonaccruing TDRs.

dollars in millions	March 31,    2012			December 31,    2011			March 31,    2011
Interest rate reduction	$	184		$	177		$	165
Forgiveness of principal		11			23			10
Other modification of loan terms		22			8			7
Total	$	217		$	208		$	182
Total commercial and consumer TDRs(a)	$	293			276		$	242
Total commercial TDRs to total commercial loans		.63	%		.60	%		.55	%
Total commercial TDRs to total loans		.44			.42			.37
Total commercial loans	$	34,622		$	34,782		$	33,298
Total loans		49,226			49,575			48,552

(a) Commitments outstanding to lend additional funds to borrowers whose terms have been modified in TDRs are $24 million, $25 million, and $44 million at March 31, 2012, December 31, 2011 and March 31, 2011, respectively.

Our policies for our commercial and consumer loan portfolios for determining past due loans, placing loans on nonaccrual, applying payments on nonaccrual loans and resuming accrual of interest are disclosed in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Nonperforming Loans” on page 117 of our 2011 Annual Report on Form 10-K.

At March 31, 2012, approximately $48.0 billion, or 97%, of our total loans are current. At March 31, 2012, total past due loans and nonperforming loans of $1.3 billion represent approximately 3% of total loans.

The following aging analysis as of March 31, 2012 and 2011, of past due and current loans provides further information regarding Key’s credit exposure.

March 31, 2012 in millions	Current		30-59 Days Past Due		60-89 Days Past Due		90 and Greater Days Past Due		Nonperforming Loans		Total Past Due and Nonperforming Loans		Total Loans
LOAN TYPE
Commercial, financial and agricultural	$	19,559	$	25	$	16	$	19	$	168	$	228	$	19,787
Commercial real estate:
Commercial mortgage		7,533		7		11		82		174		274		7,807
Construction		1,170		19		7		11		66		103		1,273
Total commercial real estate loans		8,703		26		18		93		240		377		9,080
Commercial lease financing		5,570		126		22		15		22		185		5,755
Total commercial loans	$	33,832	$	177	$	56	$	127	$	430	$	790	$	34,622
Real estate — residential mortgage	$	1,851	$	20	$	8	$	5	$	83	$	116	$	1,967
Home equity:
Key Community Bank		8,941		53		34		16		109		212		9,153
Other		476		9		6		4		12		31		507
Total home equity loans		9,417		62		40		20		121		243		9,660
Consumer other — Key Community Bank		1,189		9		4		9		1		23		1,212
Consumer other:
Marine		1,576		30		11		7		30		78		1,654
Other		106		2		1		1		1		5		111
Total consumer other		1,682		32		12		8		31		83		1,765
Total consumer loans	$	14,139	$	123	$	64	$	42	$	236	$	465	$	14,604
Total loans	$	47,971	$	300	$	120	$	169	$	666	$	1,255	$	49,226
March 31, 2011 in millions	Current		30-59 Days Past Due		60-89 Days Past Due		90 and Greater Days Past Due		Nonperforming Loans		Total Past Due and Nonperforming Loans		Total Loans
LOAN TYPE
Commercial, financial and agricultural	$	16,138	$	46	$	13	$	22	$	221	$	302	$	16,440
Commercial real estate:
Commercial mortgage		8,459		36		37		29		245		347		8,806
Construction		1,623		40		14		22		146		222		1,845
Total commercial real estate loans		10,082		76		51		51		391		569		10,651
Commercial lease financing		6,054		53		21		37		42		153		6,207
Total commercial loans	$	32,274	$	175	$	85	$	110	$	654	$	1,024	$	33,298
Real estate — residential mortgage	$	1,676	$	22	$	12	$	9	$	84	$	127	$	1,803
Home equity:
Key Community Bank		9,211		60		34		17		99		210		9,421
Other		591		11		7		5		13		36		627
Total home equity loans		9,802		71		41		22		112		246		10,048
Consumer other — Key Community Bank		1,115		10		5		8		3		26		1,141
Consumer other:
Marine		2,030		34		14		3		31		82		2,112
Other		144		3		1		1		1		6		150
Total consumer other		2,174		37		15		4		32		88		2,262
Total consumer loans	$	14,767	$	140	$	73	$	43	$	231	$	487	$	15,254
Total loans	$	47,041	$	315	$	158	$	153	$	885	$	1,511	$	48,552

The risk characteristic prevalent to both commercial and consumer loans is the risk of loss arising from an obligor’s inability or failure to meet contractual payment or performance terms. Evaluation of this risk is stratified and monitored by the assigned loan risk rating grades for the commercial loan portfolios and the regulatory risk ratings assigned for the consumer loan portfolios. This risk rating stratification assists in the determination of the ALLL. Loan grades are assigned at the time of origination, verified by credit risk management and periodically reevaluated thereafter.

Most extensions of credit are subject to loan grading or scoring. This risk rating methodology blends our judgment with quantitative modeling. Commercial loans generally are assigned two internal risk ratings. The first rating reflects the probability that the borrower will default on an obligation; the second reflects expected recovery rates on the credit facility. Default probability is determined based on, among other factors, the financial strength of the borrower, an assessment of the borrower’s management, the borrower’s competitive position within its industry sector and our view of industry risk within the context of the general economic outlook. Types of exposure, transaction structure and collateral, including credit risk mitigants, affect the expected recovery assessment.

Credit quality indicators for loans are updated on an ongoing basis. Bond rating classifications are indicative of the credit quality of our commercial loan portfolios and are determined by converting our internally assigned risk rating grades to bond rating categories. Payment activity and the regulatory classifications of pass and substandard are indicators of the credit quality of our consumer loan portfolios.

Credit quality indicators for our commercial and consumer loan portfolios based on bond rating, regulatory classification and payment activity as of March 31, 2012 and 2011, are as follows:

Commercial Credit Exposure

Credit Risk Profile by Creditworthiness Category ^(a)

March 31,
in millions
	Commercial, financial and     agricultural				RE — Commercial				RE — Construction				Commercial Lease				Total
RATING (b) (c)	2012		2011		2012		2011		2012		2011		2012		2011		2012		2011
AAA — AA	$	165	$	95	$	3	$	2	$	3		—	$	599	$	645	$	770	$	742
A		785		712		62		84		1	$	5		1,156		1,246		2,004		2,047
BBB — BB		16,801		12,646		6,007		6,045		788		801		3,623		3,655		27,219		23,147
B		848		1,125		568		954		165		309		236		365		1,817		2,753
CCC — C		1,188		1,862		1,167		1,721		316		730		141		296		2,812		4,609
Total	$	19,787	$	16,440	$	7,807	$	8,806	$	1,273	$	1,845	$	5,755	$	6,207	$	34,622	$	33,298
(a)    Credit quality indicators are updated on an ongoing basis and reflect credit quality information as of the dates indicated.
(b)    Our bond rating to internal loan grade conversion system is as follows: AAA - AA = 1, A = 2, BBB - BB = 3 - 13, B = 14 - 16, and CCC - C = 17 - 20.
(c)    Our internal loan grade to regulatory-defined classification is as follows: Pass = 1-16, Special Mention = 17, Substandard = 18, Doubtful = 19, and Loss = 20.

Consumer Credit Exposure
Credit Risk Profile by Regulatory Classifications (a)
March 31,
in millions
	Residential — Prime
GRADE	2012		2011
Pass	$	11,398	$	11,624
Substandard		229		227
Total	$	11,627	$	11,851

Credit Risk Profile Based on Payment Activity (a) (b)
March 31,	Consumer — Key Community Bank				Consumer — Marine				Consumer — Other				Total
in millions	2012		2011		2012		2011		2012		2011		2012		2011
Performing	$	1,211	$	1,138	$	1,624	$	2,081	$	110	$	149	$	2,945	$	3,368
Nonperforming		1		3		30		31		1		1		32		35
Total	$	1,212	$	1,141	$	1,654	$	2,112	$	111	$	150	$	2,977	$	3,403

(a) Credit quality indicators are updated on an ongoing basis and reflect credit quality information as of the dates indicated.

(b) Our past due payment activity to regulatory classification conversion is as follows: pass = less than 90 days, and substandard = 90 days and greater plus nonperforming loans.

We determine the appropriate level of the ALLL on at least a quarterly basis. The methodology is described in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Allowance for Loan and Lease Losses” beginning on page 117 of our 2011 Annual Report on Form 10-K. We apply expected loss rates to existing loans with similar risk characteristics as noted in the credit quality indicator table above and exercise judgment to assess the impact of factors such as changes in economic conditions, changes in credit policies or underwriting standards, and changes in the level of credit risk associated with specific industries and markets. For all commercial TDRs, regardless of size, as well as impaired commercial loans with an outstanding balance greater than $2.5 million, we conduct further analysis to determine the probable loss content and assign a specific allowance to the loan if deemed appropriate. We estimate the extent of impairment by comparing the carrying amount of the loan with the estimated present value of its future cash flows, the fair value of its underlying collateral or the loan’s observable market price. A specific allowance also may be assigned — even when sources of repayment appear sufficient — if we remain uncertain about whether the loan will be repaid in full. Consumer loan TDRs are assigned a loss rate that reflects the current assessment of that category of consumer loans to determine the appropriate ALLL level. The ALLL at March 31, 2012 represents our best estimate of the probable credit losses inherent in the loan portfolio at that date.

While quantitative modeling factors such as default probability and expected recovery rates are constantly changing as the financial strength of the borrower and overall economic conditions change, there have been no changes to the accounting policies or methodology we used to estimate the ALLL.

Commercial loans generally are charged off in full or charged down to the fair value of the underlying collateral when the borrower’s payment is 180 days past due. Our charge-off policy for most consumer loans is similar but takes effect when payments are 120 days past due. Home equity and residential mortgage loans generally are charged down to the fair value of the underlying collateral when payment is 180 days past due.

At March 31, 2012, the ALLL was $944 million, or 1.92% of loans, compared to $1.4 billion, or 2.83% of loans, at March 31, 2011. At March 31, 2012, the ALLL was 141.74% of nonperforming loans compared to 155.03% at March 31, 2011.

A summary of the allowance for loan and lease losses for the periods indicated is presented in the table below:

	Three months ended March 31,
in millions	2012		2011
Balance at beginning of period — continuing operations	$	1,004	$	1,604
Charge-offs		(132)		(232)
Recoveries		31		39
Net loans charged off		(101)		(193)
Provision for loan and lease losses from continuing operations		42		(40)
Foreign currency translation adjustment		(1)		1
Balance at end of period — continuing operations	$	944	$	1,372

The changes in the ALLL by loan category for the periods indicated are as follows:

in millions	December 31,    2011		Provision				Charge-offs		Recoveries		March 31,    2012
Commercial, financial and agricultural	$	334	$	(3)			$	(26)	$	11	$	316
Real estate — commercial mortgage		272		12				(23)		2		263
Real estate — construction		63		3				(11)		1		56
Commercial lease financing		78		(10)				(4)		4		68
Total commercial loans		747		2				(64)		18		703
Real estate — residential mortgage		37		4				(6)		1		36
Home equity:
Key Community Bank		103		14				(25)		2		94
Other		29		6				(8)		1		28
Total home equity loans		132		20				(33)		3		122
Consumer other — Key Community Bank		41		5				(10)		1		37
Consumer other:
Marine		46		9				(17)		7		45
Other		1		1				(2)		1		1
Total consumer other:		47		10				(19)		8		46
Total consumer loans		257		39				(68)		13		241
Total ALLL — continuing operations		1,004		41	(a	)		(132)		31		944
Discontinued operations		104		5				(23)		4		90
Total ALLL — including discontinued operations	$	1,108	$	46			$	(155)	$	35	$	1,034

(a) Includes $1 million of foreign currency translation adjustment.

in millions	December 31,    2010		Provision			Charge-offs		Recoveries		March 31,    2011
Commercial, financial and agricultural	$	485	$	(34)		$	(42)	$	10	$	419
Real estate — commercial mortgage		416		13			(46)		3		386
Real estate — construction		145		2			(35)		5		117
Commercial lease financing		175		(32)			(17)		6		132
Total commercial loans		1,221		(51)			(140)		24		1,054
Real estate — residential mortgage		49		—			(10)		1		40
Home equity:
Key Community Bank		120		15			(25)		1		111
Other		57		2			(15)		1		45
Total home equity loans		177		17			(40)		2		156
Consumer other — Key Community Bank		57		3			(12)		2		50
Consumer other:
Marine		89		(2)			(27)		8		68
Other		11		(6)			(3)		2		4
Total consumer other:		100		(8)			(30)		10		72
Total consumer loans		383		12			(92)		15		318
Total ALLL — continuing operations		1,604		(39)	(a)		(232)		39		1,372
Discontinued operations		114		32			(38)		3		111
Total ALLL — including discontinued operations	$	1,718	$	(7)		$	(270)	$	42	$	1,483

(a) Includes $1 million of foreign currency translation adjustment.

Our ALLL decreased by $428 million, or 31%, since the first quarter of 2011. This contraction was associated with the improvement in credit quality of our loan portfolios, which has trended more favorably over the past five quarters. Our asset quality metrics have showed continued improvement and, therefore, resulted in favorable risk rating migration and a reduction in our general allowance. Our general allowance encompasses the application of expected loss rates to our existing loans with similar risk characteristics and an assessment of factors such as changes in economic conditions and changes in credit policies or underwriting standards. Our delinquency trends improved during 2011 and into 2012. We attribute this improvement to a more moderate level of lending activity, more favorable conditions in the capital markets, improvement in client income statements and continued run off in our exit loan portfolio.

For continuing operations, the loans outstanding individually evaluated for impairment totaled $359 million, with a corresponding allowance of $38 million at March 31, 2012. Loans outstanding collectively evaluated for impairment totaled $48.9 billion, with a corresponding allowance of $906 million at March 31, 2012.

A breakdown of the individual and collective allowance for loan and lease losses and the corresponding loan balances as of March 31, 2012 follows:

	Allowance (a)				Outstanding (a)
March 31, 2012 in millions	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Loans			Individually Evaluated for Impairment		Collectively Evaluated for Impairment
Commercial, financial and agricultural	$	19	$	297	$	19,787		$	125	$	19,662
Commercial real estate:
Commercial mortgage		16		247		7,807			182		7,625
Construction		3		53		1,273			52		1,221
Total commercial real estate loans		19		300		9,080			234		8,846
Commercial lease financing		—		68		5,755			—		5,755
Total commercial loans		38		665		34,622			359		34,263
Real estate — residential mortgage		—		36		1,967			—		1,967
Home equity:
Key Community Bank		—		94		9,153			—		9,153
Other		—		28		507			—		507
Total home equity loans		—		122		9,660			—		9,660
Consumer other — Key Community Bank		—		37		1,212			—		1,212
Consumer other:
Marine		—		45		1,654			—		1,654
Other		—		1		111			—		111
Total consumer other		—		46		1,765			—		1,765
Total consumer loans		—		241		14,604			—		14,604
Total ALLL — continuing operations		38		906		49,226			359		48,867
Discontinued operations		—		90		5,715	(b)		—		5,715
Total ALLL — including discontinued operations	$	38	$	996	$	54,941		$	359	$	54,582

(a) There were no loans acquired with deteriorated credit quality at March 31, 2012.

(b) Amount includes $2.8 billion of loans carried at fair value that are excluded from ALLL consideration.

A breakdown of the individual and collective allowance for loan and lease losses and the corresponding loan balances as of March 31, 2011 follows:

	Allowance(a)				Outstanding(a)
March 31, 2011 in millions	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Loans		Individually Evaluated for Impairment		Collectively Evaluated for Impairment
Commercial, financial and agricultural	$	25	$	394	$	16,440	$	143	$	16,297
Commercial real estate:
Commercial mortgage		13		373		8,806		218		8,588
Construction		1		116		1,845		128		1,717
Total commercial real estate loans		14		489		10,651		346		10,305
Commercial lease financing		—		132		6,207		2		6,205
Total commercial loans		39		1,015		33,298		491		32,807
Real estate — residential mortgage		—		40		1,803		—		1,803
Home equity:
Key Community Bank		—		111		9,421		2		9,419
Other		—		45		627		—		627
Total home equity loans		—		156		10,048		2		10,046
Consumer other — Key Community Bank		—		50		1,141		—		1,141
Consumer other:
Marine		—		68		2,112		—		2,112
Other		—		4		150		—		150
Total consumer other		—		72		2,262		—		2,262
Total consumer loans		—		318		15,254		2		15,252
Total ALLL — continuing operations		39		1,333		48,552		493		48,059
Discontinued operations		—		111		6,304		—		6,304
Total ALLL — including discontinued operations	$	39	$	1,444	$	54,856	$	493	$	54,363

(a) There were no loans acquired with deteriorated credit quality at March 31, 2011.

The liability for credit losses inherent in lending-related commitments, such as letters of credit and unfunded loan commitments, is included in “accrued expense and other liabilities” on the balance sheet. We establish the amount of this reserve by considering both historical trends and current market conditions quarterly, or more often if deemed necessary. Our liability for credit losses on lending-related commitments has decreased by $24 million since the first quarter of 2011 to $45 million at March 31, 2012. When combined with our ALLL, our total allowance for credit losses represented 2.01% of loans at March 31, 2012, compared to 2.97% at March 31, 2011.

Changes in the liability for credit losses on lending-related commitments are summarized as follows:

	Three months ended March 31,
in millions	2012		2011
Balance at beginning of period	$	45	$	73
Provision (credit) for losses on lending-related commitments		—		(4)
Balance at end of period	$	45	$	69