Wells Fargo 2014 Annual Report Download - page 175

Primary modification type (1) Financial effects of modifications
Recorded
Weighted investment
average related to
Interest rate Other interest rate interest rate
(in millions) Principal (2) reduction concessions (3) Total Charge- offs (4) reduction reduction (5)
Year ended December 31, 2014
Commercial:
Commercial and industrial $ 4 51 914 969 36 1.53 % $ 51
Real estate mortgage 7 182 929 1,118 — 1.21 182
Real estate construction — 10 270 280 — 2.12 10
Total commercial 11 243 2,113 2,367 36 1.32 243
Consumer:
Real estate 1-4 family first mortgage 571 401 2,690 3,662 92 2.50 833
Real estate 1-4 family junior lien mortgage 50 114 246 410 64 3.27 157
Credit card — 155 — 155 — 11.40 155
Automobile 2 5 85 92 36 8.56 5
Other revolving credit and installment — 12 16 28 — 5.26 12
Trial modifications (6) — — (74) (74) — — —
Total consumer 623 687 2,963 4,273 192 3.84 1,162
Total $ 634 930 5,076 6,640 228 3.41 % $ 1,405
Year ended December 31, 2013
Commercial:
Commercial and industrial $ 19 177 1,081 1,277 17 4.71 % $ 177
Real estate mortgage 33 307 1,391 1,731 8 1.66 308
Real estate construction — 12 381 393 4 1.07 12
Total commercial 52 496 2,853 3,401 29 2.72 497
Consumer:
Real estate 1-4 family first mortgage 1,143 1,170 3,681 5,994 233 2.64 2,019
Real estate 1-4 family junior lien mortgage 103 181 472 756 42 3.33 276
Credit card — 182 — 182 — 10.38 182
Automobile 3 12 97 112 34 7.66 12
Other revolving credit and installment — 10 12 22 — 4.87 10
Trial modifications (6) — — 50 50 — — —
Total consumer 1,249 1,555 4,312 7,116 309 3.31 2,499
Total $ 1,301 2,051 7,165 10,517 338 3.21 % $ 2,996
Year ended December 31, 2012
Commercial:
Commercial and industrial $ 11 35 1,389 1,435 40 1.60 % $ 38
Real estate mortgage 47 219 1,907 2,173 12 1.57 226
Real estate construction 12 19 531 562 10 1.69 19
Lease financing — — 4 4 — — —
Total commercial 70 273 3,831 4,174 62 1.58 283
Consumer:
Real estate 1-4 family first mortgage 1,371 1,302 5,822 8,495 547 3.00 2,379
Real estate 1-4 family junior lien mortgage 79 244 756 1,079 512 3.70 313
Credit card — 241 — 241 — 10.85 241
Automobile 5 54 265 324 50 6.90 56
Other revolving credit and installment — 1 22 23 5 4.29 2
Trial modifications (6) — — 666 666 — — —
Total consumer 1,455 1,842 7,531 10,828 1,114 3.78 2,991
Total $ 1,525 2,115 11,362 15,002 1,176 3.59 % $ 3,274
(1) Amounts represent the recorded investment in loans after recognizing the effects of the TDR, if any. TDRs may have multiple types of concessions, but are presented only
once in the first modification type based on the order presented in the table above. The reported amounts include loans remodified of $2.1 billion, $3.1 billion and
$3.9 billion, for the years ended December 31, 2014, 2013, and 2012, respectively.
(2) Principal modifications include principal forgiveness at the time of the modification, contingent principal forgiveness granted over the life of the loan based on borrower
performance, and principal that has been legally separated and deferred to the end of the loan, with a zero percent contractual interest rate.
(3) Other concessions include loan renewals, term extensions and other interest and noninterest adjustments, but exclude modifications that also forgive principal and/or
reduce the contractual interest rate.
(4) Charge-offs include write-downs of the investment in the loan in the period it is contractually modified. The amount of charge-off will differ from the modification terms if
the loan has been charged down prior to the modification based on our policies. In addition, there may be cases where we have a charge-off/down with no legal principal
modification. Modifications resulted in legally forgiving principal (actual, contingent or deferred) of $149 million, $393 million and $495 million for the years ended
December 31, 2014, 2013, and 2012, respectively.
(5) Reflects the effect of reduced interest rates on loans with principal or interest rate reduction primary modification type.
(6) Trial modifications are granted a delay in payments due under the original terms during the trial payment period. However, these loans continue to advance through
delinquency status and accrue interest according to their original terms. Any subsequent permanent modification generally includes interest rate related concessions;
however, the exact concession type and resulting financial effect are usually not known until the loan is permanently modified. Trial modifications for the period are
presented net of previously reported trial modifications that became permanent in the current period.
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