Do your guys' banks send out EOY Interest Statements for Nonaccrual Loans? If the customer is making payments and on THEIR ledger it shows principal and interest payments (even though our book ledger shows principal only), wouldn't they be expecting an EOY Interest Statement reflecting the "interest" they paid?

Define EOY statement? You mean a 1098?

No, these are basically letters that show what interest was paid on non-mortgage loans.

Since they are not required, not sure it makes any difference what other banks might do. It is just a business decision. But if you are sending them, you need to make sure they accurately reflect the legal obligation between you and the borrower. Non-accrual is just an internal accounting requirement for the bank and has no impact on the borrower..

Sounds like if we are doing it for other customers (with Accrual loans), we should do it for the Nonaccrual loans, as well, since the legal obligation between ourselves and the borrower stipulates principal and interest payments. Thanks rlcarey!