Navy Federal Credit Union 2014 Annual Report Download - page 40

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Navy Federal Credit Union22
NOTE 5: TROUBLED DEBT RESTRUCTURINGS
Troubled Debt Restructurings (TDRs) are individually evaluated for impairment beginning in the month
of restructuring. Impairment is measured as the dierence between the net carrying amount of the
loan (less any fees received to aect the restructuring) and the modified future expected cash flows
discounted at the loan’s eective interest rate. Loans that have been discharged in Chapter 7 bankruptcy
are classified as TDRs. Non-performing Chapter 7 bankruptcy TDRs are measured for impairment based
on the value of the underlying collateral.
The following tables summarize the financial impact, by concession type, of loans that became TDRs
during the years ended December 31, 2014 and 2013:
Troubled Debt Restructurings During the Year Ended
December 31, 2014(1)
(dollars in thousands)
Interest Rate
Reduction & Term
Extension
Interest Rate
Reduction
Term
Extension
Other(2)
Consumer $ 3,687 $ 7,637 $ 5,556 $ 2,504
Credit card — 28,484 — 1,625
Real estate 4,712 269 1,859 6,856
Total $ 8,399 $ 36,390 $ 7,415 $ 10,986
(1)Includes loans that were classified as TDRs in prior years and re-modified during the year.
(2)Includes TDR loans resulting from actions taken by a bankruptcy court, such as the reduction of the loan’s contractual principal or interest,
or where the borrower has been released from personal liability, and mortgage deferrals.
Troubled Debt Restructurings During the Year Ended
December 31, 2013(1)
(dollars in thousands)
Interest Rate
Reduction & Term
Extension
Interest Rate
Reduction
Term
Extension
Other(2)
Consumer $ 3,614 $ 14,799 $ 10,530 $ 1,386
Credit card — 29,620 — —
Real estate 9,536 4,094 2,191 5,229
Total $ 13,150 $ 48,513 $ 12,721 $ 6,615
(1)Includes loans that were classified as TDRs in prior years and re-modified during the year.
(2)Includes TDR loans resulting from actions taken by a bankruptcy court, such as the reduction of the loan’s contractual principal or interest,
or where the borrower has been released from personal liability, and mortgage deferrals.
In subsequent periods, income is recognized based on a loan’s modified expected cash flows and
revised eective interest rate. Additional impairment is recognized for TDRs that exhibit further credit
deterioration after modification.