Fifth Third Bank 2010 Annual Report Download - page 57

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Fifth Third Bancorp 55
Troubled Debt Restructurings
If a borrower is experiencing financial difficulty, the Bancorp may
consider, in certain circumstances, modifying the terms of their
loan to maximize collection of amounts due. Typically, these
modifications reduce the loan interest rate, extend the loan term,
or in limited circumstances, reduce the principal balance of the
loan. These modifications are classified as TDRs.
At the time of modification, the Bancorp maintains certain
consumer loan TDRs (including residential mortgage loans, home
equity loans, and other consumer loans) on accrual status,
provided there is reasonable assurance of repayment and
performance according to the modified terms based upon a
current, well-documented credit evaluation. Commercial loan
TDRs and credit card TDRs are classified as nonaccrual loans and
are typically returned to accrual status upon a six month period of
sustained performance under the restructured terms. These
approaches are consistent with published guidance from
regulatory agencies. The following table summarizes TDRs by
loan type and delinquency status.
TABLE 37: SUMMARY OF NONPERFORMING ASSETS AND DELINQUENT LOANS
A
s of December 31 ($ in millions) 2010 2009 2008 2007 2006
Nonaccrual loans and leases:
Commercial and industrial loans (a) $473 734 541 175 127
Commercial mortgage loans 407 898 482 243 84
Commercial construction loans 182 646 362 249 54
Commercial leases 11 67 21 5 6
Residential mortgage loans 152 275 259 92 38
Home equity 23 21 26 45 40
Automobile loans 115 33
Other consumer loans and leases (a) 84 -- 1-
Restructured loans and leases:
Commercial and industrial loans 95 35 - - -
Commercial mortgage loans 28 4- --
Commercial construction loans 10 8- --
Commercial leases 8-- --
Residential mortgage loans (b) 116 137 20 27 -
Home equity (b) 33 33 29 11 -
Automobile loans (b) 211 --
Credit card 55 87 30 5 -
Total nonperforming loans and leases 1,680 2,947 1,776 856 352
Repossessed personal property and other real estate owned 494 297 230 171 103
Total nonperforming assets (c) 2,174 3,244 2,006 1,027 455
Nonaccrual loans held for sale 294 224 473 - -
Total nonperforming assets including loans held for sale $2,468 3,468 2,479 1,027 455
Commercial and industrial loans $16 118 76 44 38
Commercial mortgage loans 11 59 136 73 17
Commercial construction loans 317 74 67 6
Commercial leases -44 42
Residential mortgage loans(d) 100 189 198 186 68
Home equity 89 99 96 72 51
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utomobile loans 13 17 21 13 11
Credit card 42 64 56 31 16
Other consumer loans and leases --1 11
Total 90 days past due loans and leases $274 567 662 491 210
Nonperforming assets as a percent of total loans, leases and other assets,
including other real estate owned (c) 2.79 % 4.22 2.38 1.25 .61
A
llowance for loan and lease losses as a percent of nonperforming assets (b) 138 116 139 93 170
(a) Nonaccrual loans and leases reflect a reclassification of $84 million in nonperforming loans from commercial and industrial loans to other consumer loans and leases which occurred after the
Bancorp’s Form 8-K was filed on January 19, 2011. This reclassification was primarily a result of the determination that consumer loans obtained in the foreclosure of a commercial loan were
more appropriately categorized as other consumer loans and leases in accordance with regulatory guidance.
(b) During 2009, the Bancorp modified its consumer nonaccrual policy to exclude TDR loans that were less than 90 days past due because they were performing in accordance with the restructured
terms. For comparability purposes, prior periods were adjusted to reflect this reclassification.
(c) Excludes nonaccrual loans held for sale.
(d) Information for all periods presented excludes advances made pursuant to servicing agreements to GNMA mortgage pools whose repayments are insured by the Federal Housing Administration or
guaranteed by the Department of Veterans Affairs. As of December 31, 2010 , 2009, 2008, 2007 and 2006, these advances were $279 , $130, $40, $25 and $14, respectively.
TABLE 38: PERFORMING AND NONPERFORMING TDRs
Performing
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s of December 31, 2010 ($ in millions) Current
30-89 Days Past
Due
90 Days or More
Past Due Nonaccrual Total
Commercial $227 - 1 141 $369
Residential mortgages(a) 950 67 49 116 1,182
Home equity 364 47 - 33 444
Credit card 46 - - 55 101
Other consumer 32 3 - 2 37
Total $1,619 117 50 347 $2,133
(a) Information includes advances made pursuant to servicing agreements to GNMA mortgage pools whose repayments are insured by the Federal Housing Administration or guaranteed by the
Department of Veterans Affairs. As of December 31, 2010, these advances represented $44 of current loans, $17 of 30-89 days past due loans and $22 of 90 days or more past due loans.