Huntington National Bank 2012 Annual Report Download - page 142

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(4) At December 31, 2012, $31,605 thousand of the $193,413 thousand commercial real estate loans
with an allowance recorded were considered impaired due to their status as a TDR.
(5) The differences between the ending balance and unpaid principal balance amounts represent partial
charge-offs.
(6) At December 31, 2012, $28,695 thousand of the $374,526 thousand residential mortgage loans with
an allowance recorded were guaranteed by the U.S. government.
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TDR Loans
TDRs are modified loans where a concession was provided to a borrower experiencing financial difficulties. Loan modifications
are considered TDRs when the concessions provided are not available to the borrower through either normal channels or other
sources. However, not all loan modifications are TDRs.
The amount of interest that would have been recorded under the original terms for total accruing TDR loans was $41.2 million for
2012, $37.7 million for 2011, and $30.6 million for 2010. The total amount of interest recorded to interest income for these loans was
$32.2 million for 2012, $28.2 million for 2011, and $23.9 million for 2010.
TDR Concession Types
The Company’s standards relating to loan modifications consider, among other factors, minimum verified income requirements,
cash flow analysis, and collateral valuations. Each potential loan modification is reviewed individually and the terms of the loan are
modified to meet a borrower’s specific circumstances at a point in time. Commercial TDRs are reviewed and approved by our SAD.
The types of concessions provided to borrowers include:
xInterest rate reduction: A reduction of the stated interest rate to a nonmarket rate for the remaining original life of the debt.
xAmortization or maturity date change beyond what the collateral supports, including any of the following:
(1) Lengthens the amortization period of the amortized principal beyond market terms. This concession reduces the
minimum monthly payment and increases the amount of the balloon payment at the end of the term of the loan.
Principal is generally not forgiven.
(2) Reduces the amount of loan principal to be amortized. This concession also reduces the minimum monthly
payment and increases the amount of the balloon payment at the end of the term of the loan. Principal is generally
not forgiven.
(3) Extends the maturity date or dates of the debt beyond what the collateral supports. This concession generally
applies to loans without a balloon payment at the end of the term of the loan.
xChapter 7 bankruptcy: A bankruptcy court’s discharge of a borrower’s debt is considered a concession when the borrower
does not reaffirm the discharged debt.
xOther: A concession that is not categorized as one of the concessions described above. These concessions include, but are
not limited to: principal forgiveness, collateral concessions, covenant concessions, and reduction of accrued interest.
Principal forgiveness may result from any TDR modification of any concession type. However, the aggregate amount of
principal forgiven as a result of loans modified as TDRs during the years ended December 31, 2012 and 2011, was not
significant.
TDRs by Loan Type
Following is a description of TDRs by the different loan types:
Commercial loan TDRs – Commercial accruing TDRs often result from loans receiving a concession with terms that
are not considered a market transaction to Huntington. The TDR remains in accruing status as long as the customer is
less than 90-days past due on payments per the restructured loan terms and no loss is expected.