Huntington National Bank 2011 Annual Report Download - page 148

Any loan in any portfolio may be placed on nonaccrual status prior to the policies described below when
collection of principal or interest is in doubt.
All classes within the C&I and CRE portfolios are placed on nonaccrual status at no greater than 90-days
past due. First-lien and second-lien home equity portfolios are placed on nonaccrual status at 150-days past due
and 120-days past due, respectively. Automobile and other consumer loans are not placed on nonaccrual status,
but are generally charged-off when the loan is 120-days past due. Residential mortgage loans are placed on
nonaccrual status at 150-days past due, with the exception of residential mortgages guaranteed by government
agencies which continue to accrue interest at the rate guaranteed by the government agency. We are reimbursed
from the government agency for reasonable expenses incurred in servicing loans. The FHA reimburses us for
66% of expenses, and the VA reimburses us at a maximum percentage of guarantee which is established for each
individual loan. We have not experienced either material losses in excess of guarantee caps or significant delays
or rejected claims from the related government entity.
For all classes within all loan portfolios, when a loan is placed on nonaccrual status, any accrued interest
income is reversed with current year accruals charged to interest income, and prior year amounts charged-off as a
credit loss.
For all classes within all loan portfolios, cash receipts received on NALs are applied entirely against
principal until the loan or lease has been collected in full, after which time any additional cash receipts are
recognized as interest income.
The amount of interest that would have been recorded under the original terms for total NAL loans was
$38.4 million for 2011, $59.7 million for 2010, and $92.7 million for 2009. The total amount of interest recorded
to interest income for these loans was $5.1 million, $5.5 million, and $7.2 million in 2011, 2010, and 2009,
respectively.
Regarding all classes within the C&I and CRE portfolios, the determination of a borrower’s ability to make
the required principal and interest payments is based on an examination of the borrower’s current financial
statements, industry, management capabilities, and other qualitative measures. For all classes within the
consumer loan portfolio, the determination of a borrower’s ability to make the required principal and interest
payments is based on multiple factors, including number of days past due and, in some instances, an evaluation
of the borrower’s financial condition. When, in Management’s judgment, the borrower’s ability to make required
principal and interest payments resumes and collectability is no longer in doubt, the loan or lease is returned to
accrual status. For these loans that have been returned to accrual status, cash receipts are applied according to the
contractual terms of the loan. Regarding all classes within the C&I and CRE portfolios, the determination of a
borrower’s ability to make the required principal and interest payments is based on an examination of the
borrower’s current financial statements, industry, management capabilities, and other qualitative measures. For
all classes within the consumer loan portfolio, the determination of a borrower’s ability to make the required
principal and interest payments is based on multiple factors, including number of days past due and, in some
instances, an evaluation of the borrower’s financial condition. When, in Management’s judgment, the borrower’s
ability to make required principal and interest payments resumes and collectability is no longer in doubt, the loan
or lease is returned to accrual status. For these loans that have been returned to accrual status, cash receipts are
applied according to the contractual terms of the loan.
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