TCF Bank 2011 Annual Report Download - page 60

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Consumer real estate net charge-offs during 2011
increased $23.3 million from 2010, including Illinois where
economic conditions are lagging other TCF markets and
where foreclosure times are longer, thus exposing TCF to
continued losses caused by declining home values. TCF’s
consumer real estate charge-off policy was recently
modified to require an increase in the frequency of
valuations after loans are moved to non-accrual status
until clear title is received. While the initial impact of the
policy change accelerated the timing of charge-offs on
non-accrual consumer real estate loans by $2.2 million
in the third quarter of 2011, it had no impact on TCF’s
provision for credit losses or net income, since these
losses were previously provided for in the allowance
for loan and lease losses. During 2011, commercial net
charge-offs decreased $7.3 million from 2010, primarily due
to decreased net charge-offs on office buildings and land
development. Leasing and equipment finance net charge-
offs in 2011 decreased $18.1 million from 2010, primarily
due to decreases in the middle market and small ticket
segments, as customer performance continued to improve
in these areas.
Other Real Estate Owned and Repossessed and
Returned Equipment Other real estate owned and
repossessed and returned equipment are summarized in
the following table.
Year Ended December 31,
(In thousands) 2011 2010 2009 2008 2007
Other real estate owned (1):
Consumer real estate $ 87,792 $ 90,115 $ 66,956 $38,632 $28,752
Commercial real estate 47,106 50,950 38,812 23,033 17,013
Total other real estate owned 134,898 141,065 105,768 61,665 45,765
Repossessed and returned equipment 4,758 8,325 17,166 10,927 2,292
Total other real estate owned
and repossessed and returned equipment $139,656 $149,390 $122,934 $72,592 $48,057
(1) Includes properties owned and foreclosed properties subject to redemption.
Other real estate owned is recorded at the lower of
cost or fair value less estimated costs to sell the property.
At December 31, 2011, TCF owned 465 consumer real
estate properties, a decrease of 55 from 2010, due to the
sale of 1,077 properties exceeding the addition of 1,022
properties. The average length of time to sell consumer
real estate properties during 2011 was 6.1 months from
the date they were classified as other real estate owned.
The consumer real estate portfolio is secured by a total
of 83,761 properties of which 723, or .86%, were owned or
foreclosed properties subject to redemption and included
within other real estate owned as of December 31, 2011.
This compares with 813, or .94%, owned or in the process of
foreclosure and included within other real estate owned as
of December 31, 2010.
42 TCF Financial Corporation and Subsidiaries