US Bank 2015 Annual Report Download - page 53

The following table provides a summary of TDRs by loan class, including the delinquency status for TDRs that continue to accrue
interest and TDRs included in nonperforming assets:
As a Percent of Performing TDRs
At December 31, 2015
(Dollars in Millions)
Performing
TDRs
30-89 Days
Past Due
90 Days or More
Past Due
Nonperforming
TDRs
Total
TDRs
Commercial ........................................... $ 346 2.5% .9% $ 89(a) $ 435
Commercial real estate .................................. 209 3.7 3.5 61
(b) 270
Residential mortgages .................................. 1,863 3.3 3.6 465 2,328(d)
Credit card ........................................... 201 10.2 6.1 9(c) 210
Other retail ........................................... 147 4.6 4.4 64
(c) 211(e)
TDRs, excluding GNMA and covered loans ............... 2,766 3.8 3.5 688 3,454
Loans purchased from GNMA mortgage pools .............. 1,913 5.2 67.8 — 1,913(f)
Covered loans ......................................... 31 .6 5.7 4 35
Total .............................................. $4,710 4.3% 29.6% $692 $5,402
(a) Primarily represents loans less than six months from the modification date that have not met the performance period required to return to accrual status (generally six months) and small
business credit cards with a modified rate equal to 0 percent.
(b) Primarily represents loans less than six months from the modification date that have not met the performance period required to return to accrual status (generally six months).
(c) Primarily represents loans with a modified rate equal to 0 percent.
(d) Includes $299 million of residential mortgage loans to borrowers that have had debt discharged through bankruptcy and $77 million in trial period arrangements or previously placed in trial
period arrangements but not successfully completed.
(e) Includes $104 million of other retail loans to borrowers that have had debt discharged through bankruptcy and $19 million in trial period arrangements or previously placed in trial period
arrangements but not successfully completed.
(f) Includes $460 million of Federal Housing Administration and Department of Veterans Affairs residential mortgage loans to borrowers that have had debt discharged through bankruptcy and
$668 million in trial period arrangements or previously placed in trial period arrangements but not successfully completed.
Short-term Modifications The Company makes short-term
modifications that it does not consider to be TDRs, in limited
circumstances, to assist borrowers experiencing temporary
hardships. Consumer lending programs include payment
reductions, deferrals of up to three past due payments, and
the ability to return to current status if the borrower makes
required payments. The Company may also make short-term
modifications to commercial lending loans, with the most
common modification being an extension of the maturity date
of three months or less. Such extensions generally are used
when the maturity date is imminent and the borrower is
experiencing some level of financial stress, but the Company
believes the borrower will pay all contractual amounts owed.
Short-term modifications were not material at December 31,
2015.
Nonperforming Assets The level of nonperforming assets
represents another indicator of the potential for future credit
losses. Nonperforming assets include nonaccrual loans,
restructured loans not performing in accordance with
modified terms and not accruing interest, restructured loans
that have not met the performance period required to return
to accrual status, other real estate owned (“OREO”) and other
nonperforming assets owned by the Company.
Nonperforming assets are generally either originated by the
Company or acquired under FDIC loss sharing agreements
that substantially reduce the risk of credit losses to the
Company. Interest payments collected from assets on
nonaccrual status are generally applied against the principal
balance and not recorded as income. However, interest
income may be recognized for interest payments if the
remaining carrying amount of the loan is believed to be
collectible.
At December 31, 2015, total nonperforming assets were
$1.5 billion, compared with $1.8 billion at December 31, 2014
and $2.0 billion at December 31, 2013. The $285 million
(15.8 percent) decrease in nonperforming assets, from
December 31, 2014 to December 31, 2015, was primarily
driven by reductions in the commercial real estate loans,
residential mortgages and home equity and second mortgage
balances, as economic conditions continued to slowly
improve during 2015. Nonperforming covered assets at
December 31, 2015 were $40 million, compared with $51
million at December 31, 2014 and $224 million at
December 31, 2013. The ratio of total nonperforming assets
to total loans and other real estate was 0.58 percent at
December 31, 2015, compared with 0.73 percent at
December 31, 2014, and 0.86 percent at December 31,
2013.
OREO, excluding covered assets, was $280 million at
December 31, 2015, compared with $288 million at
December 31, 2014 and $327 million at December 31, 2013,
and was related to foreclosed properties that previously
secured loan balances. These balances exclude foreclosed
GNMA loans whose repayments are primarily insured by the
Federal Housing Administration or guaranteed by the
Department of Veterans Affairs.
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