Huntington National Bank 2010 Annual Report Download - page 78

Franklin were not included in the nonperforming assets total. At 2008 year-end, the loans to Franklin were
reported as nonaccrual commercial and industrial loans. At 2009 year-end, nonaccrual Franklin loans were
reported as residential mortgage loans, home equity loans, and other real estate owned. The 2009 impact
primarily reflects loan and lease losses, as well as payments.
TDR Loans
TDRs are modified loans in which a concession is provided to a borrower experiencing financial
difficulties. Loan modifications are considered TDRs when the concession provided is not available to the
borrower through either normal channels or other sources. However, not all loan modifications are TDRs. Our
standards relating to loan modifications consider, among other factors, minimum verified income requirements,
cash flow analysis, and collateral valuations. However, each potential loan modification is reviewed individu-
ally and the terms of the loan are modified to meet a borrower’s specific circumstances at a point in time. All
loan modifications, including those classified as TDRs, are reviewed and approved. Our ALLL is largely
driven by updated risk ratings to commercial loans, updated borrower credit scores on consumer loans, and
borrower delinquency history in both the commercial and consumer loan portfolios. As such, the provision for
credit losses is impacted primarily by changes in borrower payment performance rather than the TDR
classification.
TDRs can be classified as either accrual or nonaccrual loans. Nonaccrual TDRs are included in NALs
whereas accruing TDRs are excluded because the borrower remains contractually current. The table below
provides a summary of our TDRs (both accrual and nonaccrual) by loan type at December 31, 2010 and 2009:
Table 23 — Accruing and Nonaccruing Troubled Debt Restructured Loans
2010 2009
December 31,
(Dollar amounts in thousands)
Restructured loans and leases — accruing:
Mortgage loans ............................................ $328,411 $229,470
Other consumer loans ....................................... 76,586 52,871
Commercial loans .......................................... 222,632 157,049
Total restructured loans and leases — accruing ....................... 627,629 439,390
Restructured loans and leases — nonaccruing:
Mortgage loans ............................................ 5,789 4,988
Other consumer loans ....................................... ——
Commercial loans .......................................... 33,462 108,458
Total restructured loans and leases — nonaccruing .................... 39,251 113,446
Total restructured loans and leases .............................. $666,880 $552,836
In the workout of a problem loan, there are many factors considered when determining the most favorable
resolution. For consumer loans, we evaluate the ability and willingness of the borrower to make contractual or
reduced payments, the value of the underlying collateral, and the costs associated with the foreclosure or
repossession, and remarketing of the collateral. For commercial loans, we consider similar criteria and also
evaluate the borrower’s business prospects.
Residential Mortgage loan TDRs — Residential mortgage TDRs represent loan modifications associated
with traditional first-lien mortgage loans in which a concession has been provided to the borrower. Residential
mortgages identified as TDRs involve borrowers who are unable to refinance their mortgages through our
normal mortgage origination channels or through other independent sources. Some, but not all, of the loans
may be delinquent. Modifications can include adjustments to rates and/or principal. Modified loans identified
as TDRs are aggregated into pools for analysis. Cash flows and weighted average interest rates are used to
calculate impairment at the pooled-loan level. Once the loans are aggregated into the pool, they continue to be
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