TD Bank 2012 Annual Report Download - page 126

TD BANK GROUP ANNUAL REPORT 2012 FINANCIAL RESULTS124
LOANS PAST DUE BUT NOT IMPAIRED
A loan is classified as past due when a borrower has failed to make
a payment by the contractual due date, taking into account the grace
period, if applicable. The grace period represents the additional time
period beyond the contractual due date during which a borrower may
make the payment without the loan being classified as past due. The
grace period varies depending on the product type and the borrower.
The following tables summarize loans that are past due but not
impaired as at October 31, 2012, October 31, 2011 and November 1,
2010. Generally, these amounts exclude loans that fall within the
allowed grace period. Although U.S. Personal and Commercial Banking
may grant a grace period of up to 15 days, there were $1.2 billion as
at October 31, 2012 (October 31, 2011 – $ 1.3 billion; November 1,
2010 – $1.3 billion) of U.S. Personal and Commercial Banking loans
that were past due up to 15 days that are included in the 1-30 days
category in the following tables.
Loans Past Due but not Impaired1
(millions of Canadian dollars) October 31, 2012
1-30 31-60 61-89
days days days Total
Residential mortgages $ 1,370 $ 821 $ 164 $ 2,355
Consumer instalment and other personal 4,752 705 188 5,645
Credit card 695 144 83 922
Business and government 1,186 289 55 1,530
Total $ 8,003 $ 1,959 $ 490 $ 10,452
October 31, 2011
Residential mortgages $ 1,428 $ 799 $ 176 $ 2,403
Consumer instalment and other personal 4,766 764 169 5,699
Credit card 395 78 45 518
Business and government 1,082 211 84 1,377
Total $ 7,671 $ 1,852 $ 474 $ 9,997
November 1, 2010
Residential mortgages $ 1,559 $ 715 $ 158 $ 2,432
Consumer instalment and other personal 5,043 835 183 6,061
Credit card 405 81 46 532
Business and government 1,312 454 137 1,903
Total $ 8,319 $ 2,085 $ 524 $ 10,928
1 Excludes all acquired credit-impaired loans.
Collateral
As at October 31, 2012, the fair value of financial collateral held
against loans that were past due but not impaired was $167 million
(October 31, 2011 – $113 million, November 1, 2010 – $22 million).
In addition, the Bank also holds non-financial collateral as security for
loans. The fair value of non-financial collateral is determined at the
origination date of the loan. A revaluation of non-financial collateral
is performed if there has been a significant change in the terms and
conditions of the loan and/or the loan is considered impaired. Manage-
ment considers the nature of the collateral, seniority ranking of the
debt, and loan structure in assessing the value of collateral. These
estimated cash flows are reviewed at least annually, or more frequently
when new information indicates a change in the timing or amount
expected to be received.
Gross Impaired Debt Securities Classified as Loans
As at October 31, 2012, impaired loans excludes $1.5 billion
(October 31, 2011 – $1.6 billion; November 1, 2010 – $1.2 billion)
of gross impaired debt securities classified as loans as subsequent to
any recorded impairment, interest income continues to be recognized
using the effective interest rate which was used to discount the
future cash flows for the purpose of measuring the credit loss.