Wells Fargo 2014 Annual Report Download - page 75

NONPERFORMING ASSETS (NONACCRUAL LOANS AND
FORECLOSED ASSETS) Table 31 summarizes nonperforming
assets (NPAs) for each of the last five years. We generally place
loans on nonaccrual status when:
• the full and timely collection of interest or principal
becomes uncertain (generally based on an assessment of the
borrower’s financial condition and the adequacy of
collateral, if any);
• they are 90 days (120 days with respect to real estate 1-4
family first and junior lien mortgages) past due for interest
or principal, unless both well-secured and in the process of
collection;
• part of the principal balance has been charged off (including
loans discharged in bankruptcy);
• for junior lien mortgages, we have evidence that the related
first lien mortgage may be 120 days past due or in the
process of foreclosure regardless of the junior lien
delinquency status; or
• performing consumer loans are discharged in bankruptcy,
regardless of their delinquency status.
Note 1 (Summary of Significant Accounting Policies –
Loans) to Financial Statements in this Report describes our
accounting policy for nonaccrual and impaired loans.
Table 31: Nonperforming Assets (Nonaccrual Loans and Foreclosed Assets)
December 31,
(in millions) 2014 2013 2012 2011 2010
Nonaccrual loans:
Commercial:
Commercial and industrial $ 538 775 1,467 2,167 3,277
Real estate mortgage 1,490 2,254 3,323 4,085 5,228
Real estate construction 187 416 1,003 1,890 2,676
Lease financing 24 30 29 55 115
Total commercial (1) 2,239 3,475 5,822 8,197 11,296
Consumer:
Real estate 1-4 family first mortgage (2) 8,583 9,799 11,456 10,932 12,333
Real estate 1-4 family junior lien mortgage 1,848 2,188 2,923 1,976 2,303
Automobile 137 173 245 159 248
Other revolving credit and installment 41 33 40 40 62
Total consumer (3) 10,609 12,193 14,664 13,107 14,946
Total nonaccrual loans (4)(5)(6) 12,848 15,668 20,486 21,304 26,242
As a percentage of total loans 1.49% 1.91 2.57 2.77 3.47
Foreclosed assets:
Government insured/guaranteed (7) $ 982 2,093 1,509 1,319 1,479
Non-government insured/guaranteed 1,627 1,844 2,514 3,342 4,530
Total foreclosed assets 2,609 3,937 4,023 4,661 6,009
Total nonperforming assets $ 15,457 19,605 24,509 25,965 32,251
As a percentage of total loans 1.79% 2.38 3.07 3.37 4.26
(1) Includes LHFS of $1 million, $1 million, $16 million, $25 million and $3 million at December 31, 2014, 2013, 2012, 2011 and 2010, respectively.
(2) Includes MHFS of $177 million, $227 million, $336 million, $301 million and $426 million at December 31, 2014, 2013, 2012, 2011, and 2010, respectively.
(3) December 31, 2012, includes the impact of the implementation of guidance issued by bank regulatory agencies in 2012.
(4) Excludes PCI loans because they continue to earn interest income from accretable yield, independent of performance in accordance with their contractual terms.
(5) Real estate 1-4 family mortgage loans predominantly insured by the FHA or guaranteed by the VA and student loans predominantly guaranteed by agencies on behalf of
the U.S. Department of Education under the Federal Family Education Loan Program are not placed on nonaccrual status because they are insured or guaranteed.
(6) See Note 6 (Loans and Allowance for Credit Losses) to Financial Statements in this Report for further information on impaired loans.
(7) During fourth quarter 2014, we adopted Accounting Standards Update (ASU) 2014-14, Classification of Certain Government-Guaranteed Mortgage Loans Upon Foreclosure,
effective as of January 1, 2014. This ASU requires that certain government guaranteed residential real estate mortgage loans that meet specific criteria be recognized as
other receivables upon foreclosure; previously, these assets were included in foreclosed assets. Government guaranteed residential real estate mortgage loans that
completed foreclosure during 2014 and met the criteria specified by ASU 2014-14 are excluded from this table and included in Accounts Receivable in Other Assets. For
more information on the changes in foreclosures for government guaranteed residential real estate mortgage loans, see Note 1 (Summary of Significant Accounting
Policies) and Note 7 (Premises, Equipment, Lease Commitments and Other Assets).
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