Capital One 2011 Annual Report Download - page 202

CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED STATEMENTS—(Continued)
TDR—Subsequent Payment Defaults of Completed TDR Modifications
The following table presents the type, number and amount of loans accounted for as TDRs that experienced a
payment default during the period and had completed a modification event in the twelve months prior to the
payment default. A payment default occurs if the loan is either 90 days or more delinquent or the loan has been
charged-off as of the end of the period presented.
December 31, 2011
(Dollars in millions)
Number of
contracts
Total
Loans
Credit card:
Domestic credit card .......................................................... 34,489 $ 93
International credit card(1) ...................................................... 47,989 185
Total credit card .............................................................. 82,478 278
Consumer banking:
Auto ....................................................................... 1,499 15
Home loan .................................................................. 101 12
Retail banking ............................................................... 237 11
Total consumer banking ........................................................ 1,837 38
Commercial banking:
Commercial and multifamily real estate ........................................... 17 41
Middle market ............................................................... 56
Specialty lending ............................................................. 83
Total commercial lending ...................................................... 30 50
Small-ticket commercial real estate ............................................... 10
Total commercial banking ...................................................... 31 50
Total ....................................................................... 84,346 $366
(1) The regulatory regime in the United Kingdom (“U.K.”) requires U.K. credit card businesses to accept payment plan
proposals even when the proposed payments are less than the contractual minimum amount. As a result, loans entering
long-term TDR payment programs in the U.K. typically continue to age and ultimately charge-off even when fully in
compliance with the TDR program terms.
Purchased Credit Impaired Loans
In connection with the acquisition of Chevy Chase Bank on February 27, 2009, we acquired loans with a
contractual outstanding unpaid principal and interest balance at acquisition of $15.4 billion. We recorded these
loans on our consolidated balance sheet at estimated fair value at the date of acquisition of $9.0 billion. We
concluded that the substantial majority of the loans we acquired from Chevy Chase Bank were PCI loans. PCI
loans are acquired loans with evidence of credit quality deterioration since origination for which it is probable at
the date of purchase that we will be unable to collect all contractually required payments. The Chevy Chase Bank
loans that we concluded were credit impaired had a contractual outstanding unpaid principal and interest balance
at acquisition of $12.0 billion and an estimated fair value of $6.3 billion. These loans consisted of Chevy Chase
Bank’s entire portfolio of option-adjustable rate mortgage loans, hybrid adjustable-rate mortgage loans and
construction-to-permanent mortgage loans. We also concluded that Chevy Chase Bank’s portfolio of commercial
loans, auto loans, fixed-mortgage loans, home equity loans and other consumer loans included segments of PCI
loans.
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