Wednesday, March 20, 2013

Troubled Debt Restructuring

Credit unions started reporting information on Troubled Debt Restructurings (TDR) at the end of 2012.

The 5300 Call Report states that a TDR "means a restructuring in which a credit union, for economic or legal reasons related to a member borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. The restructuring of a loan may include, but is not necessarily limited to: (1) the transfer from the borrower to the credit union of real estate, receivables from third parties, other assets, or an equity interest in the borrower in full or partial satisfaction of the loan; (2) a modification of the loan terms, such as a reduction of the stated interest rate, principal, or accrued interest or an extension of the maturity date at a stated interest rate lower than the current market rate for new debt with similar risk; or (3) a combination of the above."

At the end of 2012, 3,190 credit union reported a TDR. Outstanding TDRs were approximately $10.5 billion in TDRs with almost $1.8 billion in nonaccrual status. The TDR portion of allowances for loan and lease losses was $1.2 billion.

The following table list the 25 credit unions with the most TDRs. The table includes information on the accrual status of the TDR and Total TDRs as a percent of Net Worth.

It should not come as a surprise that Navy FCU has the most TDRs.

Two credit unions reported TDRs in excess of their net worth plus the portion of loan loss allowances allocated to TDRs -- Appalachian (KY) and PEF (OH).

The following table provides information on the 25 credit unions with the greatest exposure to TDRs as a percent of Net Worth plus TDR portion of loan and lease loss allowances (ALLL). At the end of 2012, 21 credit unions reported an exposure in excess of 100 percent.

1 comment:

  1. Perfect example of NCYA performance and inconsistency.
    GTE, Farmers, Kinecta, Evangelical, north island are not conserved.
    Arrowhead gets conserved.
    Have a feeling my assessments are going up again at some point.
    Where is this all headed....



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