TCF Bank 2003 Annual Report Download - page 40

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38 TCF Financial Corporation and Subsidiaries
Non-Performing Assets Non-performing assets consist
of non-accrual loans and leases and other real estate owned.
The decrease in total non-performing assets reflects decreases of
$4.7 million, $3.9 million and $3.1 million, respectively, in leasing
and equipment finance, residential real estate and commercial
business non-performing assets, partially offset by increases of
$7 million and $3.4 million, respectively, in consumer and com-
mercial real estate non-performing assets.
Approximately 53% of non-performing assets at December 31, 2003
consisted of, or were secured by, residential real estate. Non-accrual
loans and leases in the truck and trailer marketing segment of the
leasing and equipment finance portfolio totaled $3.5 million at
December 31, 2003, compared with $7.5 million at December 31,
2002. The accrual of interest income is generally discontinued when
loans and leases become 90 days or more past due with respect to
either principal or interest (150 days or six payments past due for
loans secured by residential real estate) unless such loans and
leases are adequately secured and in the process of collection.
The following table sets forth additional information regarding net charge-offs:
Year Ended December 31,
2003 2002
% of Average % of Average
Net Loans and Net Loans and
(Dollars in thousands) Charge-offs Leases Charge-offs Leases
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,189 .10% $ 3,974 .15%
Commercial real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,336 .07 2,138 .12
Commercial business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 782 .18 5,898 1.35
Leasing and equipment finance:
Middle market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,883 .40 1,017 .39
Winthrop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (32) – 113 .04
Wholesale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,774 1.13 2,998 1.57
Small ticket . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,422 1.28 759 .83
Leveraged leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ––––
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,047 .31 4,887 .56
Truck and trailer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,490 3.03 3,079 2.50
Total leasing and equipment finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,537 .69 7,966 .80
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,844 .19 19,976 .34
Residential real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 .01 50 –
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,921 .16 $20,026 .25
The allocated allowance balances for TCF’s residential and
consumer loan portfolios, at December 31, 2003, reflect the
Company’s credit quality and related low level of net loan charge-
offs for these portfolios. The increase in the allocated allowance for
commercial real estate losses reflects the growth in the portfolio.
The decline in the allocated allowance for commercial business
reflects the decline in the portfolio coupled with declines in net
charge-offs, non-performing loans and potential problem loans
in the commercial business portfolio during 2003. The allocated
allowance for the loan and lease portfolios do not reflect any
significant changes in estimation methods or assumptions.
The decrease in TCF’s allowance for loan and lease losses as a
percentage of total loans and leases, at December 31, 2003, reflects
the impact of the reduction in commercial and commercial real
estate, consumer and leasing and equipment finance charge-offs
and the reduction in non-accrual loans and leases, partially offset
by growth in loans and leases.