Huntington National Bank 2012 Annual Report Download - page 60

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TDR Loans
(This section should be read in conjunction with Note 3 of the Notes to Consolidated Financial Statements.)
TDRs are modified loans in which a concession is provided to a borrower experiencing financial difficulties. TDRs can be
classified as either accrual or nonaccrual loans. Nonaccrual TDRs are included in NALs whereas accruing TDRs are excluded from
NALs, as it is probable that all contractual principal and interest due under the restructured terms will be collected. TDRs primarily
reflect our loss mitigation efforts to proactively work with borrowers having difficulty making their payments.
The table below presents our accruing and nonaccruing TDRs at period-end for each of the past four years:
Table 16 - Accruing and Nonaccruing Troubled Debt Restructured Loans
December 31,
(dollar amounts in thousands) 2012 2011 2010 2009
Troubled debt restructured loans - accruing:
Commercial and industrial $ 76,586 $ 54,007 $ 70,136 $ 59,215
Commercial real estate 208,901 249,968 152,496 97,834
Automobile 35,784 36,573 29,764 24,704
Home equity 110,581 52,224 37,257 25,357
Residential mortgage 290,011 309,678 328,411 229,470
Other consumer 2,544 6,108 9,565 2,810
Total troubled debt restructured loans -
accruing 724,407 708,558 627,629 439,390
Troubled debt restructured loans -
nonaccruing:
Commercial and industrial 19,268 48,553 15,275 37,849
Commercial real estate 32,548 21,968 18,187 70,609
Automobile 7,823 --- --- ---
Home equity 6,951 369 --- ---
Residential mortgage 84,515 26,089 5,789 4,988
Other consumer 113 113 --- ---
Total troubled debt restructured loans -
nonaccruing 151,218 97,092 39,251 113,446
Total troubled debt restructured loans $ 875,625 $ 805,650 $ 666,880 $ 552,836
Our strategy is to structure the commercial TDRs in a manner that avoids new concessions subsequent to the initial TDR terms.
However, there are times when subsequent modifications are required, such as when the modified loan matures. Often the loans are
performing in accordance with the TDR terms, and a new note is originated with similar modified terms. These loans are subjected to
the normal underwriting standards and processes for other similar credit extensions, both new and existing. If the loan is not
performing in accordance with the existing TDR terms, typically a more aggressive strategy is put in place. In accordance with ASC
310-20-35, the refinanced note is evaluated to determine if it is considered a new loan or a continuation of the prior loan. A new loan
is considered for removal of the TDR designation. A continuation of the prior note requires the continuation of the TDR designation,
and because the refinanced note constitutes a new legal agreement, they are included in our TDR activity table (below) as both a new
TDR and a restructured TDR removal during the period.
The types of concessions granted are consistent with those granted on new TDRs and include interest rate reductions,
amortization or maturity date changes beyond what the collateral supports, and principal forgiveness based on the borrower’s specific
needs at a point in time. Our policy does not limit the number of times a loan may be modified. A loan may be modified multiple
times if it is considered to be in the best interest of both the borrower and us.
Loans are not automatically considered to be accruing TDRs upon the granting of a new concession. Accrual status is determined
based on delinquency status and whether collection of principal and interest is in doubt. If the loan is not 90-days past due and no loss
is expected based on the modified terms, the modified TDR remains in accruing status. For loans that are on nonaccrual status before
the modification, collection of both principal and interest must not be in doubt, and the borrower must be able to exhibit sufficient
cash flows for a six-month period of time to service the debt in order to return to accruing status. This six-month period could extend
before or after the restructure date.