Fifth Third Bank 2010 Annual Report Download - page 85

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fifth Third Bancorp 83
The following table summarizes the credit risk profile of the Bancorp’s commercial portfolio segment, by class, as of December 31, 2010:
Credit Grade ($ in millions)
Commercial &
Industrial Loans
Commercial
Mortgage Loans
Owner-Occupied
Commercial
Mortgage Loans
Nonowner-Occupied
Commercial
Construction
Commercial
Leases
Pass $23,147 4,034 3,620 1,034 3,269
Special Mention 1,406 430 647 416 60
Substandard 2,541 854 1,174 540 48
Doubtful 97 22 64 58 1
Total $27,191 5,340 5,505 2,048 3,378
For purposes of monitoring the credit quality and risk
characteristics of its consumer portfolio segment, the Bancorp
disaggregates the segment into the following classes: home equity,
automobile loans, credit card, and other consumer loans and
leases. The Bancorp’s residential mortgage portfolio segment is
also a separate class.
The Bancorp considers repayment performance as the best
indicator of credit quality for residential mortgage and consumer
loans. Residential mortgage loans that have principal and interest
payments that have become past due one hundred fifty days are
classified as nonperforming unless such loans are both well
secured and in the process of collection. Home equity,
automobile, and other consumer loans and leases that have
principal and interest payments that have become past due ninety
days are classified as nonperforming unless the loan is both well
secured and in the process of collection. Credit card loans that
have been modified in a TDR are classified as nonperforming
unless such loans have a sustained repayment performance of six
months or greater and are reasonably assured of repayment in
accordance with the restructured terms. All other loans and leases
are classified as performing. Well secured loans are collateralized
by perfected security interests in real and/or personal property for
which the Bancorp estimates proceeds from sale would be
sufficient to recover the outstanding principal and accrued interest
balance of the loan and pay all costs to sell the collateral. The
Bancorp considers a loan in the process of collection if collection
efforts or legal action is proceeding and the Bancorp expects to
collect funds sufficient to bring the loan current or recover the
entire outstanding principal and accrued interest balance.
The following table summarizes the credit risk profile of the Bancorp’s residential mortgage and consumer portfolio segments, by class, as
of December 31, 2010:
($ in millions)
Residential
Mortgage Loans(a)
Home Equity
Automobile
Loans
Credit
Card
Other Consumer
Loans and Leases
Performing $8,642 11,457 10,980 1,841 597
Nonperforming 268 56 3 55 84
Total $8,910 11,513 10,983 1,896 681
(a) Excludes $46 of loans measured at fair value.
Age Analysis of Past Due Loans and Leases
The following table summarizes the Bancorp’s recorded investment in portfolio loans and leases by age and class as of December 31, 2010:
Portfolio Loans and Leases ($ in millions)
30-89 Days
Past Due
90 Days
and
Greater (b)
Total Past
Due
Current
Loans and
Leases
Total Loans
and Leases
90 Days Past
Due and Still
Accruing
Commercial:
Commercial and industrial loans $201 303 504 26,687 $27,191 $16
Commercial mortgage owner-occupied 50 139 189 5,151 5,340 8
Commercial mortgage nonowner-occupied 38 215 253 5,252 5,505 3
Commercial construction 72 145 217 1,831 2,048 3
Commercial leasing 10 717 3,361 3,378 -
Residential mortgage loans (a) 138 368 506 8,404 8,910 100
Consumer:
Home equity loans 148 145 293 11,220 11,513 89
Automobile loans 96 15 111 10,872 10,983 13
Credit card loans 35 90 125 1,771 1,896 42
Other consumer loans and leases 3 6 9 672 681 -
Total portfolio loans and leases (a) $791 1,433 2,224 75,221 $77,445 $274
(a) Excludes $46 of loans measured at fair value.
(b) Includes accrual and nonaccrual loans and leases.
Impaired Loans and Leases
Larger commercial loans included within aggregate borrower
relationship balances exceeding $1 million that exhibit probable
or observed credit weaknesses are subject to individual review.
The Bancorp also performs an individual review on loans that are
restructured in a troubled debt restructuring. The Bancorp
considers the current value of collateral, credit quality of any
guarantees, the loan structure, and other factors when evaluating
whether an individual loan is impaired. Other factors may include
the geography and industry of the borrower, size and financial
condition of the borrower, cash flow and leverage of the
borrower, and the Bancorp’s evaluation of the borrower’s
management.