Acquisitions and Discontinued Operations

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Acquisitions and Discontinued Operations

13. Acquisition and Discontinued Operations

Acquisition

Laurel Road Digital Lending Business. On April 3, 2019, KeyBank acquired Laurel Road's digital lending business from Laurel Road Bank. Laurel Road Bank's three bank branches located in southeast Connecticut were not part of this transaction. Through the acquisition, KeyBank expects to enhance its digital capabilities with state-of-the-art, customer-centric technology and to leverage Laurel Road's proven ability to attract and serve professional millennial clients. The acquisition is accounted for as a business combination. As a result of the acquisition, we recognized identifiable intangible assets with a fair value of $37 million and goodwill of $148 million. The valuation of the acquired assets and liabilities of Laurel Road was final at June 30, 2020.

Discontinued operations

Discontinued operations primarily includes our government-guaranteed and private education lending business. At September 30, 2020, and December 31, 2019, approximately $743 million and $865 million, respectively, of education loans are included in discontinued assets on the consolidated balance sheets. Net interest income after provision for credit losses for this business is not material and is included in income (loss) from discontinued operations, net of taxes on the consolidated statements of income.