SunTrust 2012 Annual Report Download - page 140

Notes to Consolidated Financial Statements (Continued)
124
Nonperforming assets as of December 31 are shown in the following table:
(Dollars in millions) 2012 2011
Nonaccrual/NPLs:
Commercial loans:
Commercial & industrial $194 $348
Commercial real estate 66 288
Commercial construction 34 290
Residential loans:
Residential mortgages - nonguaranteed 775 1,392
Home equity products 341 338
Residential construction 112 220
Consumer loans:
Other direct 67
Indirect 19 20
Total nonaccrual/NPLs 1,547 2,903
OREO1264 479
Other repossessed assets 910
Nonperforming LHFS 37 —
Total nonperforming assets $1,857 $3,392
1Does not include foreclosed real estate related to loans insured by the FHA or the VA. Proceeds due from the FHA and the VA are recorded as a receivable in
other assets until the funds are received and the property is conveyed. The receivable amount related to proceeds due from the FHA or the VA totaled $140 million
and $132 million at December 31, 2012 and 2011, respectively.
Restructured Loans
TDRs are loans in which the borrower is experiencing financial difficulty, and the Company has granted an economic concession
to the borrower that it would not otherwise consider. When loans are modified under the terms of a TDR, the Company typically
offers the borrower an extension of the loan maturity date and/or a reduction in the original contractual interest rate. In certain
limited situations, the Company may offer to restructure a loan in a manner that ultimately results in the forgiveness of contractually
specified principal balances.
During 2012, the Company changed its policy with respect to residential loans discharged in Chapter 7 bankruptcy that have not
been reaffirmed by the borrower. As a result of the policy change, the Company identified and reclassified an incremental $232
million of residential real estate loans to nonaccrual, of which $177 million were newly designated as TDRs, regardless of the
loans' actual payment history and expected performance. Additionally, $24 million in existing nonaccrual Chapter 7 loans were
newly designated as TDRs. Prior to December 31, 2012, the Company's policy was to classify loans to borrowers who had filed
for bankruptcy as nonaccrual when such loans became 60 days past due. However, the Company did not previously report these
Chapter 7 loans as TDRs unless otherwise modified under one of the Company's loss mitigation programs. See additional discussion
in "Loans" and "Allowance for Credit Losses" sections of Note 1, "Significant Accounting Policies," for further information
regarding Chapter 7 bankruptcy loans.
At December 31, 2012 and 2011, the Company had $1 million and $5 million, respectively, in commitments to lend additional
funds to debtors whose terms have been modified in a TDR.