Regions Bank 2008 Annual Report Download - page 90

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not appropriate, a FAS 114 Specific Reserve is established for the individual loan in question. That Specific
Reserve is incorporated as a part of the overall allowance for credit losses. The recorded investment in impaired
loans was $1,421.1 million at December 31, 2008 and $660.4 million at December 31, 2007. The allowance
allocated to impaired loans, excluding TDRs, totaled $129.8 million and $103.9 million at December 31, 2008
and 2007, respectively. Loans that were characterized as TDRs totaled $532.7 million and $11.0 million at
December 31, 2008 and 2007, respectively, and the allowance allocated to TDRs at December 31, 2008 and 2007
totaled $9.3 million and zero, respectively. The average amount of impaired loans was $1,262.2 million during
2008 and $396.0 million during 2007. No material amount of interest income was recognized on impaired loans
for the years ended December 31, 2008, 2007 and 2006.
Management considers the current level of allowance for credit losses adequate to absorb losses inherent in
the loan portfolio and unfunded commitments. Management’s determination of the adequacy of the allowance for
credit losses, which is based on the factors and risk identification procedures previously discussed, requires the
use of judgments and estimations that may change in the future. Changes in the factors used by management to
determine the adequacy of the allowance or the availability of new information could cause the allowance for
credit losses to be increased or decreased in future periods. In addition, bank regulatory agencies, as part of their
examination process, may require changes in the level of the allowance based on their judgments and estimates.
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