Navy Federal Credit Union 2015 Annual Report Download - page 44

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Financial Section 25
2015—SHARED SUCCESS
December 31, 2014
Loan Amount Associated
Allowance Average Balance Interest Income
(cash basis)
(dollars in thousands)
Impaired Loans with an associated allowance
Consumer $ 402,651 $ 56,454 $ 376,967 $ 39,035
Credit card 257,795 68,674 232,492 26,403
Real estate 557,226 82,028 526,784 22,007
Business real estate 552 554 1,601 90
Total Impaired Loans with
an associated allowance $ 1,218,224 $ 207,710 $ 1,137,844 $ 87,535
Impaired Loans without an associated allowance
Consumer 1,844 — 1,520 199
Credit card 1,825 — 1,064 260
Real estate 8,799 — 4,412 299
Business real estate 138,906 — 132,962 3,286
Total Impaired Loans without
an associated allowance $ 151,373 $ — $ 139,958 $ 4,044
Total Impaired Loans $ 1,369,597 $ 207,710 $ 1,277,802 $ 91,579
NOTE 5: ACQUIRED CREDIT-IMPAIRED LOANS
The carrying value of Navy Federal’s acquired credit-impaired (ACI) loans is included in Loans
to members in the Consolidated Statements of Financial Condition, and the related outstanding
balances as of December31 were as follows:
(dollars in thousands) 2015 2014
Outstanding balance $ 51,018 $ 80,778
Carrying amount 24,190 27,919
For the years ended December 31, 2015 and 2014, Navy Federal recorded provision expense of
$0.7 million and $2.4 million, respectively, due to decreases in cash flows expected to be received
on ACI loans, which resulted in an increase in allowance for loan losses.
During 2015 and 2014, previously established allowances were reduced by $1.7 million and $1.4
million, respectively, because either cash flows received were significantly greater than previously
expected or it was probable there would be a significant increase in expected cash flows.
Accretable yield activity for ACI loans for the years ended December 31, 2015 and 2014 was as follows: