Loans and the Allowance for Credit Losses | 6 Months Ended |
Jun. 30, 2014 |
Text Block [Abstract] | ' |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | ' |
LOANS AND THE ALLOWANCE FOR CREDIT LOSSES |
LOANS |
The following table presents the distribution of Regions' loan portfolio by segment and class, net of unearned income: |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| June 30, 2014 | | December 31, 2013 | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions, net of unearned income) | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | $ | 31,354 | | | $ | 29,413 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate mortgage—owner-occupied | 9,024 | | | 9,495 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate construction—owner-occupied | 366 | | | 310 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total commercial | 40,744 | | | 39,218 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Commercial investor real estate mortgage | 5,193 | | | 5,318 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Commercial investor real estate construction | 1,780 | | | 1,432 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total investor real estate | 6,973 | | | 6,750 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Residential first mortgage | 12,187 | | | 12,163 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Home equity | 11,064 | | | 11,294 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Indirect | 3,422 | | | 3,075 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Consumer credit card | 945 | | | 948 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Other consumer | 1,178 | | | 1,161 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total consumer | 28,796 | | | 28,641 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| $ | 76,513 | | | $ | 74,609 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
During the three months ended June 30, 2014 and 2013, Regions purchased approximately $272 million and $236 million, respectively, in indirect loans from a third party. During the six months ended June 30, 2014 and 2013, the comparable loan purchase amounts were approximately $518 million and $456 million, respectively. |
At June 30, 2014, $13.3 billion in loans held by Regions were pledged to secure borrowings from the FHLB. At June 30, 2014, an additional $29.6 billion of loans held by Regions were pledged to the Federal Reserve Bank. |
|
ALLOWANCE FOR CREDIT LOSSES |
Regions determines the appropriate level of the allowance on at least a quarterly basis. Refer to Note 1 “Summary of Significant Accounting Policies” to the consolidated financial statements to the Annual Report on Form 10-K for the year ended December 31, 2013, for a description of the methodology. |
ROLLFORWARD OF ALLOWANCE FOR CREDIT LOSSES |
The following tables present analyses of the allowance for credit losses by portfolio segment for the three and six months ended June 30, 2014 and 2013. The total allowance for loan losses and the related loan portfolio ending balances as of June 30, 2014 and 2013 are disaggregated to detail the amounts derived through individual evaluation and collective evaluation for impairment. Prior to the second quarter of 2013, only impaired loans with the amount of impairment measured at a note-level (i.e. non-accrual commercial and investor real-estate loans greater than or equal to $2.5 million) were reported as individually evaluated in the tables below. In the second quarter of 2013, Regions revised its presentation to also reflect all troubled debt restructurings ("TDRs") as individually evaluated for impairment. The allowance for loan losses and the loan portfolio ending balances related to collectively evaluated loans included the remainder of the portfolio. |
Beginning in the third quarter of 2013, Regions revised its estimation process for non-accrual commercial and investor real-estate loans less than $2.5 million to utilize the same discounted cash flow analysis used for accruing and non-accruing TDRs less than $2.5 million described in Note 1 “Summary of Significant Accounting Policies” to the Annual Report on Form 10-K for the year ended December 31, 2013. This change in the estimation process did not have a material impact to the overall level of the allowance for loan losses or the provision for loan losses. As a result, the June 30, 2014 allowance for loan losses and the loan portfolio ending balances for loans individually evaluated for impairment reflect this revision in the tables below. |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, 2014 | | | | | | | | | | | | | | | | |
| Commercial | | Investor Real | | Consumer | | Total | | | | | | | | | | | | | | | | |
Estate | | | | | | | | | | | | | | | | |
| (In millions) | | | | | | | | | | | | | | | | |
Allowance for loan losses, April 1, 2014 | $ | 692 | | | $ | 208 | | | $ | 361 | | | $ | 1,261 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Provision (credit) for loan losses | 39 | | | (18 | ) | | 14 | | | 35 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Loan losses: | | | | | | | | | | | | | | | | | | | | | | | |
Charge-offs | (40 | ) | | (7 | ) | | (63 | ) | | (110 | ) | | | | | | | | | | | | | | | | |
Recoveries | 14 | | | 7 | | | 22 | | | 43 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Net loan losses | (26 | ) | | — | | | (41 | ) | | (67 | ) | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Allowance for loan losses, June 30, 2014 | 705 | | | 190 | | | 334 | | | 1,229 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Reserve for unfunded credit commitments, April 1, 2014 | $ | 63 | | | $ | 11 | | | $ | 4 | | | $ | 78 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Provision (credit) for unfunded credit losses | 11 | | | 1 | | | (1 | ) | | 11 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Reserve for unfunded credit commitments, June 30, 2014 | 74 | | | 12 | | | 3 | | | 89 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Allowance for credit losses, June 30, 2014 | $ | 779 | | | $ | 202 | | | $ | 337 | | | $ | 1,318 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, 2013 | | | | | | | | | | | | | | | | |
| Commercial | | Investor Real | | Consumer | | Total | | | | | | | | | | | | | | | | |
Estate | | | | | | | | | | | | | | | | |
| (In millions) | | | | | | | | | | | | | | | | |
Allowance for loan losses, April 1, 2013 | $ | 782 | | | $ | 424 | | | $ | 543 | | | $ | 1,749 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Provision (credit) for loan losses | 40 | | | (68 | ) | | 59 | | | 31 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Loan losses: | | | | | | | | | | | | | | | | | | | | | | | |
Charge-offs | (77 | ) | | (23 | ) | | (90 | ) | | (190 | ) | | | | | | | | | | | | | | | | |
Recoveries | 19 | | | 9 | | | 18 | | | 46 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Net loan losses | (58 | ) | | (14 | ) | | (72 | ) | | (144 | ) | | | | | | | | | | | | | | | | |
Allowance for loan losses, June 30, 2013 | 764 | | | 342 | | | 530 | | | 1,636 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Reserve for unfunded credit commitments, April 1, 2013 | $ | 74 | | | $ | 10 | | | $ | 4 | | | $ | 88 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Provision (credit) for unfunded credit losses | (14 | ) | | (1 | ) | | — | | | (15 | ) | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Reserve for unfunded credit commitments, June 30, 2013 | 60 | | | 9 | | | 4 | | | 73 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Allowance for credit losses, June 30, 2013 | $ | 824 | | | $ | 351 | | | $ | 534 | | | $ | 1,709 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, 2014 | | | | | | | | | | | | | | | | |
| Commercial | | Investor Real | | Consumer | | Total | | | | | | | | | | | | | | | | |
Estate | | | | | | | | | | | | | | | | |
| (In millions) | | | | | | | | | | | | | | | | |
Allowance for loan losses, January 1, 2014 | $ | 711 | | | $ | 236 | | | $ | 394 | | | $ | 1,341 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Provision (credit) for loan losses | 44 | | | (45 | ) | | 38 | | | 37 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Loan losses: | | | | | | | | | | | | | | | | | | | | | | | |
Charge-offs | (81 | ) | | (16 | ) | | (137 | ) | | (234 | ) | | | | | | | | | | | | | | | | |
Recoveries | 31 | | | 15 | | | 39 | | | 85 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Net loan losses | (50 | ) | | (1 | ) | | (98 | ) | | (149 | ) | | | | | | | | | | | | | | | | |
Allowance for loan losses, June 30, 2014 | 705 | | | 190 | | | 334 | | | 1,229 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Reserve for unfunded credit commitments, January 1, 2014 | 63 | | | 12 | | | 3 | | | 78 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Provision (credit) for unfunded credit losses | 11 | | | — | | | — | | | 11 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Reserve for unfunded credit commitments, June 30, 2014 | 74 | | | 12 | | | 3 | | | 89 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Allowance for credit losses, June 30, 2014 | $ | 779 | | | $ | 202 | | | $ | 337 | | | $ | 1,318 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Portion of ending allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | $ | 212 | | | $ | 92 | | | $ | 82 | | | $ | 386 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Collectively evaluated for impairment | 493 | | | 98 | | | 252 | | | 843 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total allowance for loan losses | $ | 705 | | | $ | 190 | | | $ | 334 | | | $ | 1,229 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Portion of loan portfolio ending balance: | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | $ | 846 | | | $ | 523 | | | $ | 858 | | | $ | 2,227 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Collectively evaluated for impairment | 39,898 | | | 6,450 | | | 27,938 | | | 74,286 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total loans evaluated for impairment | $ | 40,744 | | | $ | 6,973 | | | $ | 28,796 | | | $ | 76,513 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, 2013 | | | | | | | | | | | | | | | | |
| Commercial | | Investor Real | | Consumer | | Total | | | | | | | | | | | | | | | | |
Estate | | | | | | | | | | | | | | | | |
| (In millions) | | | | | | | | | | | | | | | | |
Allowance for loan losses, January 1, 2013 | $ | 847 | | | $ | 469 | | | $ | 603 | | | $ | 1,919 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Provision (credit) for loan losses | 57 | | | (99 | ) | | 83 | | | 41 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Loan losses: | | | | | | | | | | | | | | | | | | | | | | | |
Charge-offs | (176 | ) | | (46 | ) | | (192 | ) | | (414 | ) | | | | | | | | | | | | | | | | |
Recoveries | 36 | | | 18 | | | 36 | | | 90 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Net loan losses | (140 | ) | | (28 | ) | | (156 | ) | | (324 | ) | | | | | | | | | | | | | | | | |
Allowance for loan losses, June 30, 2013 | 764 | | | 342 | | | 530 | | | 1,636 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Reserve for unfunded credit commitments, January 1, 2013 | 69 | | | 10 | | | 4 | | | 83 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Provision (credit) for unfunded credit losses | (9 | ) | | (1 | ) | | — | | | (10 | ) | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Reserve for unfunded credit commitments, June 30, 2013 | 60 | | | 9 | | | 4 | | | 73 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Allowance for credit losses, June 30, 2013 | $ | 824 | | | $ | 351 | | | $ | 534 | | | $ | 1,709 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Portion of ending allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | $ | 157 | | | $ | 154 | | | $ | 175 | | | $ | 486 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Collectively evaluated for impairment | 607 | | | 188 | | | 355 | | | 1,150 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total allowance for loan losses | $ | 764 | | | $ | 342 | | | $ | 530 | | | $ | 1,636 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Portion of loan portfolio ending balance: | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | $ | 1,000 | | | $ | 1,044 | | | $ | 1,608 | | | $ | 3,652 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Collectively evaluated for impairment | 38,030 | | | 5,970 | | | 27,338 | | | 71,338 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total loans evaluated for impairment | $ | 39,030 | | | $ | 7,014 | | | $ | 28,946 | | | $ | 74,990 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
|
PORTFOLIO SEGMENT RISK FACTORS |
The following describe the risk characteristics relevant to each of the portfolio segments. |
Commercial—The commercial loan portfolio segment includes commercial and industrial loans to commercial customers for use in normal business operations to finance working capital needs, equipment purchases or other expansion projects. Commercial also includes owner-occupied commercial real estate loans to operating businesses, which are loans for long-term financing of land and buildings, and are repaid by cash flow generated by business operations. Owner-occupied construction loans are made to commercial businesses for the development of land or construction of a building where the repayment is derived from revenues generated from the business of the borrower. Collection risk in this portfolio is driven by the creditworthiness of underlying borrowers, particularly cash flow from customers’ business operations. |
Investor Real Estate—Loans for real estate development are repaid through cash flow related to the operation, sale or refinance of the property. This portfolio segment includes extensions of credit to real estate developers or investors where repayment is dependent on the sale of real estate or income generated from the real estate collateral. A portion of Regions’ investor real estate portfolio segment consists of loans secured by residential product types (land, single-family and condominium loans) within Regions’ markets. Additionally, these loans are made to finance income-producing properties such as apartment buildings, office and industrial buildings, and retail shopping centers. Loans in this portfolio segment are particularly sensitive to valuation of real estate. |
Consumer—The consumer loan portfolio segment includes residential first mortgage, home equity, indirect, consumer credit card, and other consumer loans. Residential first mortgage loans represent loans to consumers to finance a residence. These loans are typically financed over a 15 to 30 year term and, in most cases, are extended to borrowers to finance their primary residence. Home equity lending includes both home equity loans and lines of credit. This type of lending, which is secured by a first or second mortgage on the borrower’s residence, allows customers to borrow against the equity in their home. Real estate market values as of the time the loan or line is secured directly affect the amount of credit extended and, in addition, changes in these values impact the depth of potential losses. Indirect lending, which is lending initiated through third-party business partners, largely consists of loans made through automotive dealerships. Consumer credit card includes Regions branded consumer credit card accounts. Other consumer loans include direct consumer installment loans and overdrafts. Loans in this portfolio segment are sensitive to unemployment and other key consumer economic measures. |
CREDIT QUALITY INDICATORS |
The following tables present credit quality indicators for the loan portfolio segments and classes, excluding loans held for sale, as of June 30, 2014 and December 31, 2013. Commercial and investor real estate loan portfolio segments are detailed by categories related to underlying credit quality and probability of default. Regions assigns these categories at loan origination and reviews the relationship utilizing a risk-based approach on, at minimum, an annual basis or at any time management becomes aware of information affecting the borrowers' ability to fulfill their obligations. Both quantitative and qualitative factors are considered in this review process. These categories are utilized to develop the associated allowance for credit losses. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
• | Pass—includes obligations where the probability of default is considered low; | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
• | Special Mention—includes obligations that have potential weakness which may, if not reversed or corrected, weaken the credit or inadequately protect the Company’s position at some future date. Obligations in this category may also be subject to economic or market conditions which may, in the future, have an adverse effect on debt service ability; | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
• | Substandard Accrual—includes obligations that exhibit a well-defined weakness which presently jeopardizes debt repayment, even though they are currently performing. These obligations are characterized by the distinct possibility that the Company may incur a loss in the future if these weaknesses are not corrected; | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
• | Non-accrual—includes obligations where management has determined that full payment of principal and interest is in doubt. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Substandard accrual and non-accrual loans are often collectively referred to as “classified.” Special mention, substandard accrual, and non-accrual loans are often collectively referred to as “criticized and classified.” Classes in the consumer portfolio segment are disaggregated by accrual status. |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 30-Jun-14 | | | | | | | | | | | | |
| Pass | | Special Mention | | Substandard | | Non-accrual | | Total | | | | | | | | | | | | |
Accrual | | | | | | | | | | | | |
| (In millions) | | | | | | | | | | | | |
Commercial and industrial | $ | 30,043 | | | $ | 717 | | | $ | 394 | | | $ | 200 | | | $ | 31,354 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Commercial real estate mortgage—owner-occupied | 8,053 | | | 288 | | | 389 | | | 294 | | | 9,024 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Commercial real estate construction—owner-occupied | 349 | | | 5 | | | 4 | | | 8 | | | 366 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Total commercial | $ | 38,445 | | | $ | 1,010 | | | $ | 787 | | | $ | 502 | | | $ | 40,744 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Commercial investor real estate mortgage | $ | 4,534 | | | $ | 257 | | | $ | 244 | | | $ | 158 | | | $ | 5,193 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Commercial investor real estate construction | 1,687 | | | 60 | | | 24 | | | 9 | | | 1,780 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Total investor real estate | $ | 6,221 | | | $ | 317 | | | $ | 268 | | | $ | 167 | | | $ | 6,973 | | | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | Accrual | | Non-accrual | | Total | | | | | | | | | | | | |
| | | | | (In millions) | | | | | | | | | | | | |
Residential first mortgage | | | | | $ | 12,068 | | | $ | 119 | | | $ | 12,187 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Home equity | | | | | 10,953 | | | 111 | | | 11,064 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Indirect | | | | | 3,422 | | | — | | | 3,422 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Consumer credit card | | | | | 945 | | | — | | | 945 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Other consumer | | | | | 1,178 | | | — | | | 1,178 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Total consumer | | | | | $ | 28,566 | | | $ | 230 | | | $ | 28,796 | | | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | $ | 76,513 | | | | | | | | | | | | | |
| | | | | | | | | | | |
|
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2013 | | | | | | | | | | | | |
| Pass | | Special | | Substandard | | Non-accrual | | Total | | | | | | | | | | | | |
Mention | Accrual | | | | | | | | | | | | |
| (In millions) | | | | | | | | | | | | |
Commercial and industrial | $ | 28,282 | | | $ | 395 | | | $ | 479 | | | $ | 257 | | | $ | 29,413 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Commercial real estate mortgage—owner-occupied | 8,593 | | | 191 | | | 408 | | | 303 | | | 9,495 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Commercial real estate construction—owner-occupied | 264 | | | 25 | | | 4 | | | 17 | | | 310 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Total commercial | $ | 37,139 | | | $ | 611 | | | $ | 891 | | | $ | 577 | | | $ | 39,218 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Commercial investor real estate mortgage | $ | 4,479 | | | $ | 269 | | | $ | 332 | | | $ | 238 | | | $ | 5,318 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Commercial investor real estate construction | 1,335 | | | 47 | | | 40 | | | 10 | | | 1,432 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Total investor real estate | $ | 5,814 | | | $ | 316 | | | $ | 372 | | | $ | 248 | | | $ | 6,750 | | | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | Accrual | | Non-accrual | | Total | | | | | | | | | | | | |
| | | | | (In millions) | | | | | | | | | | | | |
Residential first mortgage | | | | | $ | 12,017 | | | $ | 146 | | | $ | 12,163 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Home equity | | | | | 11,183 | | | 111 | | | 11,294 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Indirect | | | | | 3,075 | | | — | | | 3,075 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Consumer credit card | | | | | 948 | | | — | | | 948 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Other consumer | | | | | 1,161 | | | — | | | 1,161 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Total consumer | | | | | $ | 28,384 | | | $ | 257 | | | $ | 28,641 | | | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | $ | 74,609 | | | | | | | | | | | | | |
| | | | | | | | | | | |
|
AGING ANALYSIS |
The following tables include an aging analysis of days past due (DPD) for each portfolio segment and class as of June 30, 2014 and December 31, 2013: |
| | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 30-Jun-14 | | | | |
| Accrual Loans | | | | | | | | | | |
| 30-59 DPD | | 60-89 DPD | | 90+ DPD | | Total | | Total | | Non-accrual | | Total | | | | |
30+ DPD | Accrual | | | | |
| (In millions) | | | | |
Commercial and industrial | $ | 19 | | | $ | 16 | | | $ | 9 | | | $ | 44 | | | $ | 31,154 | | | $ | 200 | | | $ | 31,354 | | | | | |
| | | |
Commercial real estate | 37 | | | 19 | | | 5 | | | 61 | | | 8,730 | | | 294 | | | 9,024 | | | | | |
mortgage—owner-occupied | | | | |
Commercial real estate construction—owner-occupied | 1 | | | — | | | — | | | 1 | | | 358 | | | 8 | | | 366 | | | | | |
| | | |
Total commercial | 57 | | | 35 | | | 14 | | | 106 | | | 40,242 | | | 502 | | | 40,744 | | | | | |
| | | |
Commercial investor real estate mortgage | 41 | | | 20 | | | 17 | | | 78 | | | 5,035 | | | 158 | | | 5,193 | | | | | |
| | | |
Commercial investor real estate construction | — | | | — | | | — | | | — | | | 1,771 | | | 9 | | | 1,780 | | | | | |
| | | |
Total investor real estate | 41 | | | 20 | | | 17 | | | 78 | | | 6,806 | | | 167 | | | 6,973 | | | | | |
| | | |
Residential first mortgage | 110 | | | 62 | | | 224 | | | 396 | | | 12,068 | | | 119 | | | 12,187 | | | | | |
| | | |
Home equity | 75 | | | 36 | | | 65 | | | 176 | | | 10,953 | | | 111 | | | 11,064 | | | | | |
| | | |
Indirect | 36 | | | 9 | | | 5 | | | 50 | | | 3,422 | | | — | | | 3,422 | | | | | |
| | | |
Consumer credit card | 7 | | | 4 | | | 11 | | | 22 | | | 945 | | | — | | | 945 | | | | | |
| | | |
Other consumer | 14 | | | 4 | | | 3 | | | 21 | | | 1,178 | | | — | | | 1,178 | | | | | |
| | | |
Total consumer | 242 | | | 115 | | | 308 | | | 665 | | | 28,566 | | | 230 | | | 28,796 | | | | | |
| | | |
| $ | 340 | | | $ | 170 | | | $ | 339 | | | $ | 849 | | | $ | 75,614 | | | $ | 899 | | | $ | 76,513 | | | | | |
| | | |
|
| | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2013 | | | | |
| Accrual Loans | | | | | | | | | | |
| 30-59 DPD | | 60-89 DPD | | 90+ DPD | | Total | | Total | | Non-accrual | | Total | | | | |
30+ DPD | Accrual | | | | |
| (In millions) | | | | |
Commercial and industrial | $ | 29 | | | $ | 14 | | | $ | 6 | | | $ | 49 | | | $ | 29,156 | | | $ | 257 | | | $ | 29,413 | | | | | |
| | | |
Commercial real estate | 30 | | | 26 | | | 6 | | | 62 | | | 9,192 | | | 303 | | | 9,495 | | | | | |
mortgage—owner-occupied | | | | |
Commercial real estate construction—owner-occupied | — | | | — | | | — | | | — | | | 293 | | | 17 | | | 310 | | | | | |
| | | |
Total commercial | 59 | | | 40 | | | 12 | | | 111 | | | 38,641 | | | 577 | | | 39,218 | | | | | |
| | | |
Commercial investor real estate mortgage | 29 | | | 6 | | | 6 | | | 41 | | | 5,080 | | | 238 | | | 5,318 | | | | | |
| | | |
Commercial investor real estate construction | 4 | | | 1 | | | — | | | 5 | | | 1,422 | | | 10 | | | 1,432 | | | | | |
| | | |
Total investor real estate | 33 | | | 7 | | | 6 | | | 46 | | | 6,502 | | | 248 | | | 6,750 | | | | | |
| | | |
Residential first mortgage | 130 | | | 74 | | | 248 | | | 452 | | | 12,017 | | | 146 | | | 12,163 | | | | | |
| | | |
Home equity | 95 | | | 51 | | | 75 | | | 221 | | | 11,183 | | | 111 | | | 11,294 | | | | | |
| | | |
Indirect | 39 | | | 11 | | | 5 | | | 55 | | | 3,075 | | | — | | | 3,075 | | | | | |
| | | |
Consumer credit card | 8 | | | 5 | | | 12 | | | 25 | | | 948 | | | — | | | 948 | | | | | |
| | | |
Other consumer | 14 | | | 5 | | | 4 | | | 23 | | | 1,161 | | | — | | | 1,161 | | | | | |
| | | |
Total consumer | 286 | | | 146 | | | 344 | | | 776 | | | 28,384 | | | 257 | | | 28,641 | | | | | |
| | | |
| $ | 378 | | | $ | 193 | | | $ | 362 | | | $ | 933 | | | $ | 73,527 | | | $ | 1,082 | | | $ | 74,609 | | | | | |
| | | |
|
IMPAIRED LOANS |
The following tables present details related to the Company’s impaired loans as of June 30, 2014 and December 31, 2013. Loans deemed to be impaired include all TDRs and all non-accrual commercial and investor real estate loans (including those less than $2.5 million), excluding leases. Loans which have been fully charged-off do not appear in the tables below. |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-accrual Impaired Loans As of June 30, 2014 | | | | | |
| | | | | Book Value(3) | | | | | | | | | |
| Unpaid | | Charge-offs | | Total | | Impaired | | Impaired | | Related | | Coverage %(4) | | | | | |
Principal | and Payments | Impaired | Loans on | Loans on | Allowance | | | | | |
Balance(1) | Applied(2) | Loans on | Non-accrual | Non-accrual | for Loan | | | | | |
| | Non-accrual | Status with | Status with | Losses | | | | | |
| | Status | No Related | Related | | | | | | |
| | | Allowance | Allowance | | | | | | |
| (Dollars in millions) | | | | | |
Commercial and industrial | $ | 230 | | | $ | 42 | | | $ | 188 | | | $ | 28 | | | $ | 160 | | | $ | 65 | | | 46.3 | % | | | | | |
| | | | |
Commercial real estate mortgage—owner-occupied | 331 | | | 37 | | | 294 | | | 50 | | | 244 | | | 94 | | | 39.6 | | | | | | |
| | | | |
Commercial real estate construction—owner-occupied | 9 | | | 1 | | | 8 | | | — | | | 8 | | | 4 | | | 55.6 | | | | | | |
| | | | |
Total commercial | 570 | | | 80 | | | 490 | | | 78 | | | 412 | | | 163 | | | 42.6 | | | | | | |
| | | | |
Commercial investor real estate mortgage | 221 | | | 63 | | | 158 | | | 7 | | | 151 | | | 46 | | | 49.3 | | | | | | |
| | | | |
Commercial investor real estate construction | 10 | | | 1 | | | 9 | | | 4 | | | 5 | | | 2 | | | 30 | | | | | | |
| | | | |
Total investor real estate | 231 | | | 64 | | | 167 | | | 11 | | | 156 | | | 48 | | | 48.5 | | | | | | |
| | | | |
Residential first mortgage | 97 | | | 32 | | | 65 | | | — | | | 65 | | | 9 | | | 42.3 | | | | | | |
| | | | |
Home equity | 17 | | | — | | | 17 | | | — | | | 17 | | | 1 | | | 5.9 | | | | | | |
| | | | |
Total consumer | 114 | | | 32 | | | 82 | | | — | | | 82 | | | 10 | | | 36.8 | | | | | | |
| | | | |
| $ | 915 | | | $ | 176 | | | $ | 739 | | | $ | 89 | | | $ | 650 | | | $ | 221 | | | 43.3 | % | | | | | |
| | | | |
|
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Accruing Impaired Loans As of June 30, 2014 | | | | | | | | | | | | | |
| Unpaid | | Charge-offs | | Book Value(3) | | Related | | Coverage %(4) | | | | | | | | | | | | | |
Principal | and Payments | Allowance for | | | | | | | | | | | | | |
Balance(1) | Applied(2) | Loan Losses | | | | | | | | | | | | | |
| (Dollars in millions) | | | | | | | | | | | | | |
Commercial and industrial | $ | 141 | | | $ | 2 | | | $ | 139 | | | $ | 21 | | | 16.3 | % | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Commercial real estate mortgage—owner-occupied | 200 | | | 8 | | | 192 | | | 27 | | | 17.5 | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Commercial real estate construction—owner-occupied | 25 | | | — | | | 25 | | | 1 | | | 4 | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Total commercial | 366 | | | 10 | | | 356 | | | 49 | | | 16.1 | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Commercial investor real estate mortgage | 314 | | | 9 | | | 305 | | | 38 | | | 15 | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Commercial investor real estate construction | 51 | | | — | | | 51 | | | 6 | | | 11.8 | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Total investor real estate | 365 | | | 9 | | | 356 | | | 44 | | | 14.5 | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Residential first mortgage | 395 | | | 8 | | | 387 | | | 54 | | | 15.7 | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Home equity | 365 | | | — | | | 365 | | | 18 | | | 4.9 | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Indirect | 1 | | | — | | | 1 | | | — | | | — | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Consumer credit card | 2 | | | — | | | 2 | | | — | | | — | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Other consumer | 21 | | | — | | | 21 | | | — | | | — | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Total consumer | 784 | | | 8 | | | 776 | | | 72 | | | 10.2 | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
| $ | 1,515 | | | $ | 27 | | | $ | 1,488 | | | $ | 165 | | | 12.7 | % | | | | | | | | | | | | | |
| | | | | | | | | | | | |
|
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Impaired Loans As of June 30, 2014 | | | | | |
| | | | | Book Value(3) | | | | | | | | | |
| Unpaid | | Charge-offs | | Total | | Impaired | | Impaired | | Related | | Coverage %(4) | | | | | |
Principal | and Payments | Impaired | Loans with No | Loans with | Allowance | | | | | |
Balance(1) | Applied(2) | Loans | Related | Related | for Loan | | | | | |
| | | Allowance | Allowance | Losses | | | | | |
| (Dollars in millions) | | | | | |
Commercial and industrial | $ | 371 | | | $ | 44 | | | $ | 327 | | | $ | 28 | | | $ | 299 | | | $ | 86 | | | 34.9 | % | | | | | |
| | | | |
Commercial real estate mortgage—owner-occupied | 531 | | | 45 | | | 486 | | | 50 | | | 436 | | | 121 | | | 31.3 | | | | | | |
| | | | |
Commercial real estate construction—owner-occupied | 34 | | | 1 | | | 33 | | | — | | | 33 | | | 5 | | | 17.6 | | | | | | |
| | | | |
Total commercial | 936 | | | 90 | | | 846 | | | 78 | | | 768 | | | 212 | | | 32.2 | | | | | | |
| | | | |
Commercial investor real estate mortgage | 535 | | | 72 | | | 463 | | | 7 | | | 456 | | | 84 | | | 29.2 | | | | | | |
| | | | |
Commercial investor real estate construction | 61 | | | 1 | | | 60 | | | 4 | | | 56 | | | 8 | | | 14.8 | | | | | | |
| | | | |
Total investor real estate | 596 | | | 73 | | | 523 | | | 11 | | | 512 | | | 92 | | | 27.7 | | | | | | |
| | | | |
Residential first mortgage | 492 | | | 40 | | | 452 | | | — | | | 452 | | | 63 | | | 20.9 | | | | | | |
| | | | |
Home equity | 382 | | | — | | | 382 | | | — | | | 382 | | | 19 | | | 5 | | | | | | |
| | | | |
Indirect | 1 | | | — | | | 1 | | | — | | | 1 | | | — | | | — | | | | | | |
| | | | |
Consumer credit card | 2 | | | — | | | 2 | | | — | | | 2 | | | — | | | — | | | | | | |
| | | | |
Other consumer | 21 | | | — | | | 21 | | | — | | | 21 | | | — | | | — | | | | | | |
| | | | |
Total consumer | 898 | | | 40 | | | 858 | | | — | | | 858 | | | 82 | | | 13.6 | | | | | | |
| | | | |
| $ | 2,430 | | | $ | 203 | | | $ | 2,227 | | | $ | 89 | | | $ | 2,138 | | | $ | 386 | | | 24.2 | % | | | | | |
| | | | |
_________ |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-1 | Unpaid principal balance represents the contractual obligation due from the customer and includes the net book value plus charge-offs and payments applied. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-2 | Charge-offs and payments applied represents cumulative partial charge-offs taken, as well as interest payments received that have been applied against the outstanding principal balance. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-3 | Book value represents the unpaid principal balance less charge-offs and payments applied; it is shown before any allowance for loan losses. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-4 | Coverage % represents charge-offs and payments applied plus the related allowance as a percent of the unpaid principal balance. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-accrual Impaired Loans As of December 31, 2013 | | | | | |
| | | | | Book Value(3) | | | | | | | | | |
| Unpaid | | Charge-offs | | Total | | Impaired | | Impaired | | Related | | Coverage %(4) | | | | | |
Principal | and Payments | Impaired | Loans on | Loans on | Allowance | | | | | |
Balance(1) | Applied(2) | Loans on | Non-accrual | Non-accrual | for Loan | | | | | |
| | Non-accrual | Status with | Status with | Losses | | | | | |
| | Status | No Related | Related | | | | | | |
| | | Allowance | Allowance | | | | | | |
| (Dollars in millions) | | | | | |
Commercial and industrial | $ | 280 | | | $ | 48 | | | $ | 232 | | | $ | 45 | | | $ | 187 | | | $ | 72 | | | 42.9 | % | | | | | |
| | | | |
Commercial real estate mortgage—owner-occupied | 343 | | | 40 | | | 303 | | | 54 | | | 249 | | | 92 | | | 38.5 | | | | | | |
| | | | |
Commercial real estate construction—owner-occupied | 17 | | | — | | | 17 | | | — | | | 17 | | | 8 | | | 47.1 | | | | | | |
| | | | |
Total commercial | 640 | | | 88 | | | 552 | | | 99 | | | 453 | | | 172 | | | 40.6 | | | | | | |
| | | | |
Commercial investor real estate mortgage | 306 | | | 68 | | | 238 | | | 17 | | | 221 | | | 68 | | | 44.4 | | | | | | |
| | | | |
Commercial investor real estate construction | 15 | | | 5 | | | 10 | | | — | | | 10 | | | 3 | | | 53.3 | | | | | | |
| | | | |
Total investor real estate | 321 | | | 73 | | | 248 | | | 17 | | | 231 | | | 71 | | | 44.9 | | | | | | |
| | | | |
Residential first mortgage | 112 | | | 37 | | | 75 | | | — | | | 75 | | | 12 | | | 43.8 | | | | | | |
| | | | |
Home equity | 17 | | | — | | | 17 | | | — | | | 17 | | | 1 | | | 5.9 | | | | | | |
| | | | |
Total consumer | 129 | | | 37 | | | 92 | | | — | | | 92 | | | 13 | | | 38.8 | | | | | | |
| | | | |
| $ | 1,090 | | | $ | 198 | | | $ | 892 | | | $ | 116 | | | $ | 776 | | | $ | 256 | | | 41.7 | % | | | | | |
| | | | |
|
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Accruing Impaired Loans As of December 31, 2013 | | | | | | | | | | | | | |
| Unpaid | | Charge-offs | | Book Value(3) | | Related | | Coverage %(4) | | | | | | | | | | | | | |
Principal | and Payments | Allowance for | | | | | | | | | | | | | |
Balance(1) | Applied(2) | Loan Losses | | | | | | | | | | | | | |
| (Dollars in millions) | | | | | | | | | | | | | |
Commercial and industrial | $ | 245 | | | $ | 2 | | | $ | 243 | | | $ | 34 | | | 14.7 | % | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Commercial real estate mortgage—owner-occupied | 209 | | | 7 | | | 202 | | | 23 | | | 14.4 | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Commercial real estate construction—owner-occupied | 25 | | | — | | | 25 | | | 1 | | | 4 | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Total commercial | 479 | | | 9 | | | 470 | | | 58 | | | 14 | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Commercial investor real estate mortgage | 435 | | | 11 | | | 424 | | | 39 | | | 11.5 | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Commercial investor real estate construction | 89 | | | — | | | 89 | | | 8 | | | 9 | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Total investor real estate | 524 | | | 11 | | | 513 | | | 47 | | | 11.1 | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Residential first mortgage | 397 | | | 8 | | | 389 | | | 60 | | | 17.1 | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Home equity | 373 | | | — | | | 373 | | | 24 | | | 6.4 | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Indirect | 1 | | | — | | | 1 | | | — | | | — | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Consumer credit card | 2 | | | — | | | 2 | | | — | | | — | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Other consumer | 26 | | | — | | | 26 | | | 1 | | | 3.8 | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
Total consumer | 799 | | | 8 | | | 791 | | | 85 | | | 11.6 | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
| $ | 1,802 | | | $ | 28 | | | $ | 1,774 | | | $ | 190 | | | 12.1 | % | | | | | | | | | | | | | |
| | | | | | | | | | | | |
|
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Impaired Loans As of December 31, 2013 | | | | | |
| | | | | Book Value(3) | | | | | | | | | |
| Unpaid | | Charge-offs | | Total | | Impaired | | Impaired | | Related | | Coverage %(4) | | | | | |
Principal | and Payments | Impaired | Loans with No | Loans with | Allowance for | | | | | |
Balance(1) | Applied(2) | Loans | Related | Related | Loan Losses | | | | | |
| | | Allowance | Allowance | | | | | | |
| (Dollars in millions) | | | | | |
Commercial and industrial | $ | 525 | | | $ | 50 | | | $ | 475 | | | $ | 45 | | | $ | 430 | | | $ | 106 | | | 29.7 | % | | | | | |
| | | | |
Commercial real estate mortgage—owner-occupied | 552 | | | 47 | | | 505 | | | 54 | | | 451 | | | 115 | | | 29.3 | | | | | | |
| | | | |
Commercial real estate construction—owner-occupied | 42 | | | — | | | 42 | | | — | | | 42 | | | 9 | | | 21.4 | | | | | | |
| | | | |
Total commercial | 1,119 | | | 97 | | | 1,022 | | | 99 | | | 923 | | | 230 | | | 29.2 | | | | | | |
| | | | |
Commercial investor real estate mortgage | 741 | | | 79 | | | 662 | | | 17 | | | 645 | | | 107 | | | 25.1 | | | | | | |
| | | | |
Commercial investor real estate construction | 104 | | | 5 | | | 99 | | | — | | | 99 | | | 11 | | | 15.4 | | | | | | |
| | | | |
Total investor real estate | 845 | | | 84 | | | 761 | | | 17 | | | 744 | | | 118 | | | 23.9 | | | | | | |
| | | | |
Residential first mortgage | 509 | | | 45 | | | 464 | | | — | | | 464 | | | 72 | | | 23 | | | | | | |
| | | | |
Home equity | 390 | | | — | | | 390 | | | — | | | 390 | | | 25 | | | 6.4 | | | | | | |
| | | | |
Indirect | 1 | | | — | | | 1 | | | — | | | 1 | | | — | | | — | | | | | | |
| | | | |
Consumer credit card | 2 | | | — | | | 2 | | | — | | | 2 | | | — | | | — | | | | | | |
| | | | |
Other consumer | 26 | | | — | | | 26 | | | — | | | 26 | | | 1 | | | 3.8 | | | | | | |
| | | | |
Total consumer | 928 | | | 45 | | | 883 | | | — | | | 883 | | | 98 | | | 15.4 | | | | | | |
| | | | |
| $ | 2,892 | | | $ | 226 | | | $ | 2,666 | | | $ | 116 | | | $ | 2,550 | | | $ | 446 | | | 23.2 | % | | | | | |
| | | | |
________ |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-1 | Unpaid principal balance represents the contractual obligation due from the customer and includes the net book value plus charge-offs and payments applied. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-2 | Charge-offs and payments applied represents cumulative partial charge-offs taken, as well as interest payments received that have been applied against the outstanding principal balance. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-3 | Book value represents the unpaid principal balance less charge-offs and payments applied; it is shown before any allowance for loan losses. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-4 | Coverage % represents charge-offs and payments applied plus the related allowance as a percent of the unpaid principal balance. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
The following table presents the average balances of total impaired loans and interest income for the three and six months ended June 30, 2014 and 2013. Interest income recognized represents interest on accruing loans modified in a TDR. TDRs are considered impaired loans. |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30 | | Six Months Ended June 30 |
| 2014 | | 2013 | | 2014 | | 2013 |
| Average | | Interest | | Average | | Interest | | Average | | Interest | | Average | | Interest |
Balance | Income | Balance | Income | Balance | Income | Balance | Income |
| Recognized | | Recognized | | Recognized | | Recognized |
| (In millions) |
Commercial and industrial | $ | 382 | | | $ | 2 | | | $ | 631 | | | $ | 3 | | | $ | 424 | | | $ | 5 | | | $ | 655 | | | $ | 7 | |
|
Commercial real estate mortgage—owner-occupied | 499 | | | 3 | | | 609 | | | 2 | | | 505 | | | 7 | | | 622 | | | 5 | |
|
Commercial real estate construction—owner-occupied | 38 | | | — | | | 42 | | | 1 | | | 40 | | | — | | | 37 | | | 1 | |
|
Total commercial | 919 | | | 5 | | | 1,282 | | | 6 | | | 969 | | | 12 | | | 1,314 | | | 13 | |
|
Commercial investor real estate mortgage | 529 | | | 6 | | | 1,084 | | | 8 | | | 575 | | | 14 | | | 1,137 | | | 17 | |
|
Commercial investor real estate construction | 74 | | | 1 | | | 120 | | | 2 | | | 80 | | | 2 | | | 127 | | | 3 | |
|
Total investor real estate | 603 | | | 7 | | | 1,204 | | | 10 | | | 655 | | | 16 | | | 1,264 | | | 20 | |
|
Residential first mortgage | 454 | | | 3 | | | 1,177 | | | 9 | | | 456 | | | 7 | | | 1,183 | | | 19 | |
|
Home equity | 383 | | | 5 | | | 408 | | | 5 | | | 385 | | | 10 | | | 415 | | | 11 | |
|
Indirect | 1 | | | — | | | 1 | | | — | | | 1 | | | — | | | 2 | | | — | |
|
Consumer credit card | 2 | | | — | | | 1 | | | — | | | 2 | | | — | | | 1 | | | — | |
|
Other consumer | 22 | | | 1 | | | 34 | | | 1 | | | 23 | | | 1 | | | 35 | | | 1 | |
|
Total consumer | 862 | | | 9 | | | 1,621 | | | 15 | | | 867 | | | 18 | | | 1,636 | | | 31 | |
|
Total impaired loans | $ | 2,384 | | | $ | 21 | | | $ | 4,107 | | | $ | 31 | | | $ | 2,491 | | | $ | 46 | | | $ | 4,214 | | | $ | 64 | |
|
In addition to the impaired loans detailed in the tables above, there were approximately $20 million in non-performing loans classified as held for sale at June 30, 2014, compared to $82 million at December 31, 2013. The loans are carried at an amount approximating a price which is expected to be recoverable through the loan sale market. During the three months ended June 30, 2014 and 2013, approximately $18 million and $38 million, respectively, in non-performing loans were transferred to held for sale; these amounts are net of charge-offs of $7 million and $23 million, respectively, recorded upon transfer. During the six months ended June 30, 2014 and 2013, approximately $33 million and $69 million, respectively, in non-performing loans were transferred to held for sale; these amounts are net of charge-offs of $15 million and $41 million, respectively, recorded upon transfer. At June 30, 2014 and December 31, 2013, non-accrual loans including loans held for sale totaled $919 million and $1.2 billion, respectively. |
TROUBLED DEBT RESTRUCTURINGS |
The majority of Regions’ commercial and investor real estate TDRs are the result of renewals of classified loans at an interest rate that is not considered to be a market rate. Consumer TDRs primarily involve an interest rate concession and not a forgiveness of principal. Accordingly, the financial impact of the modifications is best illustrated by the impact to the allowance calculation at the loan or pool level, as a result of the loans being considered impaired due to their status as TDRs. Regions most often does not record a charge-off at the modification date. |
None of the modified consumer loans listed in the following TDR disclosures were collateral-dependent at the time of modification. At June 30, 2014, approximately $78 million in residential first mortgage TDRs were in excess of 180 days past due and were considered collateral-dependent. At June 30, 2014, approximately $9 million in home equity first lien TDRs were in excess of 180 days past due and approximately $5 million in home equity second lien TDRs were in excess of 120 days past due, both of which were considered collateral-dependent. |
Further discussion related to TDRs, including their impact on the allowance for loan losses and designation of TDRs in periods subsequent to the modification is included in Note 1 in the consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2013. |
The following tables present the end of period balance for loans modified in a TDR during the periods presented by portfolio segment and class, and the financial impact of those modifications. The tables include modifications made to new TDRs, as well as renewals of existing TDRs. The end of period balance, for the period in which it was added, of total loans first reported as new TDRs totaled approximately $209 million and $439 million for the six months ended June 30, 2014 and 2013, respectively. |
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, 2014 | | | | | | | | | | | | | | | | | | | | | |
| | | | | Financial Impact | | | | | | | | | | | | | | | | | | | | | |
of Modifications | | | | | | | | | | | | | | | | | | | | | |
Considered TDRs | | | | | | | | | | | | | | | | | | | | | |
| Number of | | Recorded | | Increase in | | | | | | | | | | | | | | | | | | | | | |
Obligors | Investment | Allowance at | | | | | | | | | | | | | | | | | | | | | |
| | Modification | | | | | | | | | | | | | | | | | | | | | |
| (Dollars in millions) | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | 58 | | | $ | 70 | | | $ | 2 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Commercial real estate mortgage—owner-occupied | 72 | | | 77 | | | 2 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Commercial real estate construction—owner-occupied | 2 | | | 2 | | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total commercial | 132 | | | 149 | | | 4 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Commercial investor real estate mortgage | 52 | | | 101 | | | 4 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Commercial investor real estate construction | 13 | | | 8 | | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total investor real estate | 65 | | | 109 | | | 4 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Residential first mortgage | 139 | | | 21 | | | 3 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Home equity | 185 | | | 10 | | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Consumer credit card | 32 | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Indirect and other consumer | 66 | | | 1 | | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total consumer | 422 | | | 32 | | | 3 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| 619 | | | $ | 290 | | | $ | 11 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, 2013 | | | | | | | | | | | | | | | | | | | | | |
| | | | | Financial Impact | | | | | | | | | | | | | | | | | | | | | |
of Modifications | | | | | | | | | | | | | | | | | | | | | |
Considered TDRs | | | | | | | | | | | | | | | | | | | | | |
| Number of | | Recorded | | Increase in | | | | | | | | | | | | | | | | | | | | | |
Obligors | Investment | Allowance at | | | | | | | | | | | | | | | | | | | | | |
| | Modification | | | | | | | | | | | | | | | | | | | | | |
| (Dollars in millions) | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | 112 | | | $ | 155 | | | $ | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Commercial real estate mortgage—owner-occupied | 103 | | | 74 | | | 1 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Commercial real estate construction—owner-occupied | 2 | | | 1 | | | 1 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total commercial | 217 | | | 230 | | | 2 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Commercial investor real estate mortgage | 112 | | | 191 | | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Commercial investor real estate construction | 21 | | | 16 | | | 2 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total investor real estate | 133 | | | 207 | | | 2 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Residential first mortgage | 339 | | | 63 | | | 7 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Home equity | 121 | | | 9 | | | 1 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Consumer credit card | 41 | | | 1 | | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Indirect and other consumer | 78 | | | 1 | | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total consumer | 579 | | | 74 | | | 8 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| 929 | | | $ | 511 | | | $ | 12 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, 2014 | | | | | | | | | | | | | | | | | | | | | |
| | | | | Financial Impact | | | | | | | | | | | | | | | | | | | | | |
of Modifications | | | | | | | | | | | | | | | | | | | | | |
Considered TDRs | | | | | | | | | | | | | | | | | | | | | |
| Number of | | Recorded | | Increase in | | | | | | | | | | | | | | | | | | | | | |
Obligors | Investment | Allowance at | | | | | | | | | | | | | | | | | | | | | |
| | Modification | | | | | | | | | | | | | | | | | | | | | |
| (Dollars in millions) | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | 149 | | | $ | 164 | | | $ | 2 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Commercial real estate mortgage—owner-occupied | 157 | | | 147 | | | 3 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Commercial real estate construction—owner-occupied | 3 | | | 3 | | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total commercial | 309 | | | 314 | | | 5 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Commercial investor real estate mortgage | 150 | | | 208 | | | 4 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Commercial investor real estate construction | 28 | | | 15 | | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total investor real estate | 178 | | | 223 | | | 4 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Residential first mortgage | 264 | | | 45 | | | 7 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Home equity | 339 | | | 20 | | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Consumer credit card | 64 | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Indirect and other consumer | 117 | | | 2 | | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total consumer | 784 | | | 67 | | | 7 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| 1,271 | | | $ | 604 | | | $ | 16 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, 2013 | | | | | | | | | | | | | | | | | | | | | |
| | | | | Financial Impact | | | | | | | | | | | | | | | | | | | | | |
of Modifications | | | | | | | | | | | | | | | | | | | | | |
Considered TDRs | | | | | | | | | | | | | | | | | | | | | |
| Number of | | Recorded | | Increase in | | | | | | | | | | | | | | | | | | | | | |
Obligors | Investment | Allowance at | | | | | | | | | | | | | | | | | | | | | |
| | Modification | | | | | | | | | | | | | | | | | | | | | |
| (Dollars in millions) | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | 226 | | | $ | 310 | | | $ | 1 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Commercial real estate mortgage—owner-occupied | 179 | | | 173 | | | 2 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Commercial real estate construction—owner-occupied | 3 | | | 27 | | | 1 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total commercial | 408 | | | 510 | | | 4 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Commercial investor real estate mortgage | 223 | | | 396 | | | 1 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Commercial investor real estate construction | 43 | | | 52 | | | 2 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total investor real estate | 266 | | | 448 | | | 3 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Residential first mortgage | 672 | | | 122 | | | 14 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Home equity | 279 | | | 19 | | | 2 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Consumer credit card | 145 | | | 2 | | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Indirect and other consumer | 158 | | | 2 | | | — | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total consumer | 1,254 | | | 145 | | | 16 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| 1,928 | | | $ | 1,103 | | | $ | 23 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
|
|
Defaulted TDRs |
The following table presents TDRs by portfolio segment and class which defaulted during the three and six months ended June 30, 2014 and 2013, and which were modified in the previous twelve months (i.e., the twelve months prior to the default). For purposes of this disclosure, default is defined as 90 days past due and still accruing for the consumer portfolio segment, and placement on non-accrual status for the commercial and investor real estate portfolio segments. Consideration of defaults in the calculation of the allowance for loan losses is described in detail in the consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2013. |
|
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30 | | Six Months Ended June 30 | | | | | | | | | | | | | | | | |
| 2014 | | 2013 | | 2014 | | 2013 | | | | | | | | | | | | | | | | |
| (In millions) | | | | | | | | | | | | | | | | |
Defaulted During the Period, Where Modified in a TDR Twelve Months Prior to Default | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | $ | 4 | | | $ | 16 | | | $ | 46 | | | $ | 28 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Commercial real estate mortgage—owner-occupied | 4 | | | 14 | | | 7 | | | 23 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total commercial | 8 | | | 30 | | | 53 | | | 51 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Commercial investor real estate mortgage | 2 | | | 15 | | | 4 | | | 55 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Commercial investor real estate construction | — | | | 4 | | | 1 | | | 5 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total investor real estate | 2 | | | 19 | | | 5 | | | 60 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Residential first mortgage | 3 | | | 11 | | | 12 | | | 29 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Home equity | 1 | | | 1 | | | 2 | | | 3 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total consumer | 4 | | | 12 | | | 14 | | | 32 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| $ | 14 | | | $ | 61 | | | $ | 72 | | | $ | 143 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Commercial and investor real estate loans that were on non-accrual status at the time of the latest modification are not included in the default table above, as they are already considered to be in default at the time of the restructuring. At June 30, 2014, approximately $68 million of commercial and investor real estate loans modified in a TDR during the three months ended June 30, 2014 were on non-accrual status. Less than $1 million of this amount was 90 days past due. |
At June 30, 2014, Regions had restructured binding unfunded commitments totaling $213 million where a concession was granted and the borrower was in financial difficulty. |