What determines a TDR?
The definition makes clear that in order for a loan to be considered a TDR, the borrower must be experiencing financial difficulty AND a concession must made by the lender. As always, the devil lies in the details.
Is a TDR always impaired?
A TDR designation means the loan is impaired for accounting purposes, but it does not automatically result in an adverse classification or credit risk grade. However, at the time of the modification, an assessment of the credit risk grade or classification should be made.
Are all substandard loans impaired?
Answer: Given the definition, a “Substandard” loan that is individually evaluated for impairment under FAS 114 (and that is not the remaining recorded investment in a loan that has been partially charged off) would not automatically meet the definition of impaired.
In which topic sub topic and section would you find the definition of a troubled debt restructuring and what is the definition?
General. > > Troubled Debt Restructuring. 310-40-15-5 A restructuring of a debt constitutes a troubled debt restructuring for purposes of this Subtopic if the creditor for economic or legal reasons related to the debtor’s financial difficulties grants a concession to the debtor that it would not otherwise consider.
What does a TDR measure?
The TDR measures the time between release and return of the low voltage pulse from any reflections. By measuring the time and knowing the propagation velocity of the pulse, the distance to the reflection can be calculated.
What makes a loan a TDR?
To be considered in compliance with its modified terms for call report purposes, a loan that is a TDR must be in accrual status and must be current or less than 30 days past due under the modified repayment terms.
What are individually impaired loans?
Collateral held as security against impaired loans primarily relates to property, equipment and guarantees. Where the fair value of collateral held exceeds the outstanding loan, any excess is paid back to the customers and is not available for offset against other loans.
When should a loan be charged off FDIC?
For open- and closed-end loans secured by residential real estate, a current assessment of value should be made no later than 180 days past due. Any outstanding loan balance in excess of the value of the property, less cost to sell, should be classified Loss and charged off.
When can you remove a loan from TDR status?
The loan cannot be removed from TDR status simply because the modification period has expired and the loan is performing according to its original terms. At the time of subsequent restructuring, a credit evaluation should be performed and must be well-documented.
What is a TDR in electrical?
TDR stands for Time Domain Reflectometry and is used to determine cable lengths, cable faults, cable breaks, short circuits and cable crushes. A TDR meter, such as our KE2100, sends an electrical pulse and then calculates the cable lengths or fault location based on the time taken to return to the transmitter.
What is a substandard asset?
Under the banking agencies’ regulatory classification guidelines, “Substandard” assets are defined as assets that are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any.
What is a TDR designation for a loan?
A TDR designation means a modified loan is impaired for accounting purposes, but it does not automatically result in an adverse classification. A TDR designation also does not mean that the modified loan should remain adversely classified for its remaining life if it already was or becomes adversely classified at the time of the modification.
Are all TDRs on nonaccrual at the time of restructuring?
Although these loans will likely have an associated ALLL after their restructuring, this does not mean that all TDRs must be placed on or remain on nonaccrual. If a TDR meets the guidance above, it is eligible for accrual status either at the time of the restructuring or at a later date.
What is the definition of a substandard loan?
However, if a “Substandard” loan is significantly past due or is in nonaccrual status, the borrower’s performance and condition provide evidence that the loan is impaired, i.e., that it is probable that the institution will be unable to collect all amounts due according to the contractual terms of the loan agreement.