Huntington National Bank 2011 Annual Report Download - page 160

(5) The differences between the ending balance and unpaid principal balance amounts represent partial charge-
offs.
(6) At December 31, 2011, $22,564 thousand of the $335,768 thousand residential mortgage loans with an
allowance recorded were guaranteed by the U.S. government.
TDR Loans
TDRs are modified loans where a concession was provided to a borrower experiencing financial difficulties.
Loan modifications are considered TDRs when the concessions provided are not available to the borrower
through either normal channels or other sources. However, not all loan modifications are TDRs.
TDR Concession Types
The Company’s standards relating to loan modifications consider, among other factors, minimum verified
income requirements, cash flow analysis, and collateral valuations. Each potential loan modification is reviewed
individually and the terms of the loan are modified to meet a borrower’s specific circumstances at a point in time.
Commercial loan modifications, including those classified as TDRs, are reviewed and approved by our SAD. The
types of concessions provided to borrowers include:
• Interest rate reduction: A reduction of the stated interest rate to a nonmarket rate for the remaining
original life of the debt.
• Amortization or maturity date change beyond what the collateral supports, including any of the following:
(1) Lengthens the amortization period of the amortized principal beyond market terms. This concession
reduces the minimum monthly payment and increases the amount of the balloon payment at the end of
the term of the loan. Principal is generally not forgiven.
(2) Reduces the amount of loan principal to be amortized. This concession also reduces the minimum
monthly payment and increases the amount of the balloon payment at the end of the term of the loan.
Principal is generally not forgiven.
(3) Extends the maturity date or dates of the debt beyond what the collateral supports. This concession
generally applies to loans without a balloon payment at the end of the term of the loan.
• Other: A concession that is not categorized as one of the concessions described above. These concessions
include, but are not limited to: principal forgiveness, collateral concessions, covenant concessions, and
reduction of accrued interest. Principal forgiveness may result from any TDR modification of any
concession type. However, the aggregate amount of principal forgiven as a result of loans modified as
TDRs during the year ended December 31, 2011, was not significant.
TDRs by Loan Type
Following is a description of TDRs by the different loan types:
Commercial loan TDRs — Commercial accruing TDRs often result from loans receiving a concession with
terms that are not considered a market transaction to Huntington. The TDR remains in accruing status as
long as the customer is less than 90 days past due on payments per the restructured loan terms and no loss is
expected.
Commercial nonaccrual TDRs result from either: (1) an accruing commercial TDR being placed on
nonaccrual status, or (2) a workout where an existing commercial NAL is restructured and a concession was
given. At times, these workouts restructure the NAL so that two or more new notes are created. The primary
note is underwritten based upon our normal underwriting standards and is sized so projected cash flows are
sufficient to repay contractual principal and interest. The terms on the secondary note(s) vary by situation,
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