US Bank 2014 Annual Report Download - page 49

The following tables provide further information on
residential mortgages and home equity and second
mortgages as a percent of ending loan balances by borrower
type at December 31:
Residential mortgages(a) 2014 2013
Prime Borrowers
30-89 days .................................. .33% .55%
90 days or more ............................. .35 .55
Nonperforming ............................. 1.42 1.31
Total ..................................... 2.10% 2.41%
Sub-Prime Borrowers
30-89 days .................................. 5.12% 7.60%
90 days or more ............................. 3.41 6.02
Nonperforming ............................. 16.73 13.19
Total ..................................... 25.26% 26.81%
Other Borrowers
30-89 days .................................. 1.37% 1.65%
90 days or more ............................. 1.13 1.43
Nonperforming ............................. 3.50 2.09
Total ..................................... 6.00% 5.17%
(a) Excludes delinquent and nonperforming information on loans purchased from GNMA
mortgage pools as their repayments are primarily insured by the Federal Housing
Administration or guaranteed by the Department of Veterans Affairs.
Home equity and second mortgages 2014 2013
Prime Borrowers
30-89 days .................................. .47% .57%
90 days or more ............................. .24 .27
Nonperforming ............................. .95 .98
Total ..................................... 1.66% 1.82%
Sub-Prime Borrowers
30-89 days .................................. 3.36% 4.39%
90 days or more ............................. 1.26 2.03
Nonperforming ............................. 5.88 4.73
Total ..................................... 10.50% 11.15%
Other Borrowers
30-89 days .................................. 1.18% 1.24%
90 days or more ............................. .40 .62
Nonperforming ............................. 2.36 1.86
Total ..................................... 3.94% 3.72%
The following table provides summary delinquency
information for covered loans:
At December 31
(Dollars in Millions)
Amount
As a Percent of Ending
Loan Balances
2014 2013 2014 2013
30-89 days ............ $ 68 $166 1.28% 1.96%
90 days or more ...... 395 476 7.48 5.63
Nonperforming ....... 14 127 .27 1.50
Total ............... $477 $769 9.03% 9.09%
Restructured Loans In certain circumstances, the Company
may modify the terms of a loan to maximize the collection of
amounts due when a borrower is experiencing financial
difficulties or is expected to experience difficulties in the
near-term. In most cases the modification is either a
concessionary reduction in interest rate, extension of the
maturity date or reduction in the principal balance that would
otherwise not be considered.
Troubled Debt Restructurings Concessionary modifications
are classified as TDRs unless the modification results in only
an insignificant delay in the payments to be received. TDRs
accrue interest if the borrower complies with the revised
terms and conditions and has demonstrated repayment
performance at a level commensurate with the modified
terms over several payment cycles, which is generally six
months or greater. At December 31, 2014, performing TDRs
were $5.1 billion, compared with $6.0 billion, $5.6 billion and
$4.9 billion at December 31, 2013, 2012 and 2011,
respectively. Loans classified as TDRs are considered
impaired loans for reporting and measurement purposes.
The Company continues to work with customers to
modify loans for borrowers who are experiencing financial
difficulties, including those acquired through FDIC-assisted
acquisitions. Many of the Company’s TDRs are determined on
a case-by-case basis in connection with ongoing loan
collection processes. The modifications vary within each of
the Company’s loan classes. Commercial lending segment
TDRs generally include extensions of the maturity date and
may be accompanied by an increase or decrease to the
interest rate. The Company may also work with the borrower
to make other changes to the loan to mitigate losses, such as
obtaining additional collateral and/or guarantees to support
the loan.
The Company has also implemented certain residential
mortgage loan restructuring programs that may result in
TDRs. The Company participates in the U.S. Department of the
Treasury Home Affordable Modification Program (“HAMP”).
HAMP gives qualifying homeowners an opportunity to
permanently modify their loan and achieve more affordable
monthly payments, with the U.S. Department of the Treasury
compensating the Company for a portion of the reduction in
monthly amounts due from borrowers participating in this
program. The Company also modifies residential mortgage
loans under Federal Housing Administration, Department of
Veterans Affairs, and its own internal programs. Under these
programs, the Company provides concessions to qualifying
borrowers experiencing financial difficulties. The concessions
may include adjustments to interest rates, conversion of
adjustable rates to fixed rates, extensions of maturity dates or
deferrals of payments, capitalization of accrued interest and/or
outstanding advances, or in limited situations, partial
forgiveness of loan principal. In most instances, participation
in residential mortgage loan restructuring programs requires
the customer to complete a short-term trial period. A
U.S. BANCORP The power of potential
47