Company: KEY-PI
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0000091576-25-000058
Chunk: 178

Company: KEYCORP /NEW/
Filing Date: 2025-05-06
Form: 10-Q
Item: Item 1
Chunk 178
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 Servicing retained from loan sales3 2 Amortization(3)(2)Balance at end of period$111 $108 Fair value at end of period$138 $133  The fair value of mortgage servicing assets is determined by calculating the present value of future cash flows associated with servicing the loans. This calculation uses a number of assumptions that are based on current market conditions. The range and weighted-average of the significant unobservable inputs used to fair value our mortgage servicing assets at March 31, 2025, and March 31, 2024, along with the valuation techniques, are shown in the following table:March 31, 2025March 31, 2024Valuation TechniqueSignificantUnobservable InputRangeWeighted AverageRangeWeighted AverageDiscounted cash flowPrepayment speed5.54 %29.62 %7.77 %6.29 %43.74 %7.68 %Discount rate6.50 %8.75 %6.61 %6.50 %8.75 %6.59 %Servicing cost$70.00 $4,332 $76.54 $70.00 $3,582 $74.91  If these economic assumptions change or prove incorrect, the fair value of residential mortgage servicing assets may also change. Prepayment speed, discount rates, and servicing cost are critical to the valuation of residential mortgage servicing assets. Estimates of these assumptions are based on how a market participant would view the respective rates and reflect historical data associated with the residential mortgage loans, industry trends, and other considerations. Actual rates may differ from those estimated due to changes in a variety of economic factors. Anincrease in the prepayment speed would cause a decrease in the fair value of our residential mortgage servicingassets. An increase in the assigned discount rates and servicing cost assumptions would cause a decrease in thefair value of our residential mortgage servicing assets.The amortization of residential servicing assets for March 31, 2025, as shown in the table above, is recorded as a reduction to contractual fee income. The contractual fee income from servicing residential mortgage loans totaled $9 million for the three-month period ended March 31, 2025, and $9 million for the three-month period ended March 31, 2024. This fee income was offset by $3 million of amortization for the three-month period ended March 31, 2025,