Fifth Third Bank 2014 Annual Report Download - page 71

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
69 Fifth Third Bancorp
The following table provides a rollforward of portfolio nonperforming loans and leases, by portfolio segment:
TABLE 50: ROLLFORWARD OF PORTFOLIO NONPERFORMING LOANS AND LEASES
Residential
For the year ended December 31, 2014 ($ in millions) Commercial Mortgage Consumer Total
Beginning Balance $ 458 166 127 $ 751
Transfers to nonperforming 520 135 219 874
Transfers to performing (22) (39) (42) (103)
Transfers to performing (restructured) (49) (40) (46) (135)
Transfers to held for sale (4) (24) - (28)
Loans sold from portfolio (43) - - (43)
Loan paydowns/payoffs (181) (41) (9) (231)
Transfers to other real estate owned (41) (67) (22) (130)
Charge-offs (279) (13) (92) (384)
Draws/other extensions of credit 8 - - 8
Ending Balance $ 367 77 135 $ 579
For the year ended December 31, 2013 ($ in millions)
Beginning Balance $ 697 237 95 $ 1,029
Transfers to nonperforming 409 204 297 910
Transfers to performing (9) (52) (60) (121)
Transfers to performing (restructured) (15) (41) (62) (118)
Transfers to held for sale (3) - - (3)
Loans sold from portfolio (38) - - (38)
Loan paydowns/payoffs (295) (112) (11) (418)
Transfers to other real estate owned (81) (73) (13) (167)
Charge-offs (recoveries) (221) 3 (122) (340)
Draws/other extensions of credit 14 - 3 17
Ending Balance $ 458 166 127 $ 751
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,
reduce the accrued interest 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 loans modified as part
of a TDR are maintained on accrual status provided there is a
sustained payment history of six months or greater prior to the
modification in accordance with the modified terms and all
remaining contractual payments under the modified terms are
reasonably assured of collection. TDRs of commercial loans and
credit card loans that do not have a sustained payment history of six
months or greater in accordance with the modified terms remain on
nonaccrual status until a six month payment history is sustained.
Consumer restructured loans on accrual status totaled $905
million and $1.7 billion at December 31, 2014 and December 31,
2013, respectively. The decrease from the prior year was primarily
due to the transfer of $720 million of restructured residential
mortgage loans from the portfolio to loans held for sale during the
fourth quarter of 2014. As a result of the transfer, the Bancorp
recognized a charge-off of $87 million in 2014. As of December 31,
2014, the percentage of restructured residential mortgage loans,
home equity loans, and credit card loans that are past due 30 days or
more were 40%, 12% and 33%, respectively.
The following tables summarize TDRs by loan type and delinquency status:
TABLE 51: PERFORMING AND NONPERFORMING TDRs
Performing
30-89 Days 90 Days or
A
s of December 31, 2014 ($ in millions) Current Past Due More Past Due Nonaccrual Total
Commercial loans(b)(c) $ 867 2 - 214 $ 1,083
Residential mortgage loans(a)(c) 312 54 119 33 518
Home equity 337 23 - 21 381
Credit card 31 6 - 41 78
A
utomobile and other consumer loans and leases 22 1 - 1 24
Total $ 1,569 86 119 310 $ 2,084
(a) Information includes advances made pursuant to servicing agreements for GNMA mortgage pools whose repayments are insured by the FHA or guaranteed by the VA. As of December 31,
2014
, these advances represented $165 of current loans, $42 of 30-89 days past due loans and $102 of 90 days or more past due loans.
(b) As of December 31, 2014 , excludes $7 of restructured accruing loans and $21 of restructured nonaccrual loans associated with a consolidated VIE in which the Bancorp has no continuing credit
risk due to the risk being assumed by a third party.
(c) Excludes restructured nonaccrual loans held for sale.