Huntington National Bank 2015 Annual Report Download - page 62

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TDRs are modified loans where a concession was provided to a borrower experiencing financial difficulties. TDRs can be
classified as either accruing or nonaccruing loans. Nonaccrual TDRs are included in NALs whereas accruing TDRs are excluded from
NALs, as it is probable that all contractual principal and interest due under the restructured terms will be collected. TDRs primarily
reflect our loss mitigation efforts to proactively work with borrowers in financial difficulty or to comply with regulatory regulations
regarding the treatment of certain bankruptcy filing situations. Over the past five quarters, the accruing component of the total TDR
balance has been between 86% and 83% indicating there is no identified credit loss and the borrowers continue to make their monthly
payments. In fact, over 81% of the $464 million of accruing TDRs secured by residential real estate (Residential mortgage and Home
Equity in Table 14) are current on their required payments. In addition over 60% of the accruing pool have had no delinquency at all
in the past 12 months. There is very limited migration from the accruing to non-accruing components, and virtually all of the charge-
offs as presented in Table 14 come from the non-accruing TDR balances.
The following table presents our accruing and nonaccruing TDRs at period-end for each of the past five years:
Table 13 - Accruing and Nonaccruing Troubled Debt Restructured Loans
(dollar amounts in thousands)
At December 31,
2015 2014 2013 2012 2011
Troubled debt restructured loans—accruing:
Commercial and industrial $ 235,689 $ 116,331 $ 83,857 $ 76,586 $ 54,007
Commercial real estate 115,074 177,156 204,668 208,901 249,968
Automobile 24,893 26,060 30,781 35,784 36,573
Home equity 199,393 (1) 252,084 188,266 110,581 52,224
Residential mortgage 264,666 265,084 305,059 290,011 309,678
Other consumer 4,488 4,018 1,041 2,544 6,108
Total troubled debt restructured loans—accruing 844,203 840,733 813,672 724,407 708,558
Troubled debt restructured loans—nonaccruing:
Commercial and industrial 56,919 20,580 7,291 19,268 48,553
Commercial real estate 16,617 24,964 23,981 32,548 21,968
Automobile 6,412 4,552 6,303 7,823 —
Home equity 20,996 (2) 27,224 20,715 6,951 369
Residential mortgage 71,640 69,305 82,879 84,515 26,089
Other consumer 151 70 — 113 113
Total troubled debt restructured loans—
nonaccruing 172,735 146,695 141,169 151,218 97,092
Total troubled debt restructured loans $1,016,938 $ 987,428 $ 954,841 $ 875,625 $ 805,650
(1) Excludes approximately $88 million in accruing home equity TDRs transferred from loans to loans held for sale at September 30,
2015.
(2) Excludes approximately $9 million in nonaccruing home equity TDRs transferred from loans to loans held for sale at September
30, 2015.
Our strategy is to structure TDRs in a manner that avoids new concessions subsequent to the initial TDR terms. However, there
are times when subsequent modifications are required, such as when the modified loan matures. Often the loans are performing in
accordance with the TDR terms, and a new note is originated with similar modified terms. These loans are subjected to the normal
underwriting standards and processes for other similar credit extensions, both new and existing. If the loan is not performing in
accordance with the existing TDR terms, typically an individualized approach to repayment is established. In accordance with ASC
310-20-35, the refinanced note is evaluated to determine if it is considered a new loan or a continuation of the prior loan. A new loan
is considered for removal of the TDR designation. A continuation of the prior note requires the continuation of the TDR designation,
and because the refinanced note constitutes a new or amended debt instrument, it is included in our TDR activity table (below) as a
new TDR and a restructured TDR removal during the period.
The types of concessions granted are consistent with those granted on new TDRs and include interest rate reductions,
amortization or maturity date changes beyond what the collateral supports, and principal forgiveness based on the borrower’s specific