TCF Bank 2011 Annual Report Download - page 83

Deposit Account Overdrafts Deposit account
overdrafts are reported in consumer or commercial loans.
Net losses on uncollectible overdrafts are reported as net
charge-offs in the allowance for loan and lease losses
within 60 days from the date of overdraft. Uncollectible
deposit fees are reversed against fees and service charges
and a related reserve for uncollectible deposit fees is
maintained in other liabilities. Other deposit account
losses are reported in other non-interest expense.
Note 2. Business Combinations
On November 30, 2011, TCF Bank acquired 100% of the
outstanding common shares of Gateway One Lending &
Finance, LLC (“Gateway One”), a privately held lending
company that indirectly originates loans on new and
used autos to consumers through established dealer
relationships. The acquisition of Gateway One further
diversifies the Company’s lending business and provides
growth opportunities within the U.S. auto lending
marketplace. As a result of the acquisition, Gateway
One became a wholly-owned subsidiary of TCF Bank and,
accordingly, its results of operations since November 30,
2011 have been included within TCF’s consolidated
financial statements. TCF’s Consolidated Statement of
Income for the year ended December 31, 2011 included
net interest income, non-interest income and net income
of Gateway One totaling $282 thousand, $1.9 million and
$89 thousand, respectively. During the fourth quarter of
2011, TCF recognized $2 million of acquisition costs. These
expenses are reported in other non-interest expense within
the Consolidated Statement of Income for the year ended
December 31, 2011.
The following unaudited pro forma financial information
presents the combined results of operations of TCF and
Gateway One as if the acquisition had been effective
January 1, 2010. These results include the impact of
amortizing certain purchase accounting adjustments such
as intangible assets, compensation expenses and the
impact of the acquisition on income tax expense. There
were no material nonrecurring pro forma adjustments
directly attributable to the acquisition included within
the following pro forma financial information. The pro
forma financial information does not necessarily reflect
the results of operations that would have occurred had
TCF and Gateway One constituted a single entity during
such periods. Growth opportunities are expected to be
achieved in various amounts at various times during the
years subsequent to the acquisition and not ratably over,
or at the beginning or end of such periods. No adjustments
have been reflected in the following pro forma financial
information for anticipated growth opportunities.
Year Ended December 31,
(In thousands, except per-share data) 2011 2010
(Unaudited)
Interest income $943,776 $978,623
Net interest income 704,693 706,556
Non-interest income 458,998 547,940
Net income 107,597 150,613
Basic earnings per common share $ .70 $ 1.08
Diluted earnings per common share $ .69 $ 1.08
The following table summarizes the consideration paid for
Gateway One and the amounts of the assets acquired and
liabilities assumed recognized at the acquisition date.
(In thousands) At November 30, 2011
Cash Consideration $115,218
Recognized amounts of identifiable assets
acquired and liabilities assumed:
Cash and cash equivalents $ 2,210
Restricted cash 18,685
Loans held for sale 13,711
Loans held for investment 3,779
Intangible assets 6,170
Interest only strip 21,210
Deferred tax asset 11,286
Deferred stock compensation 2,600
Other assets 1,588
Accounts payable (1,043)
Loan sale liability (5,972)
Debt assumed (9,988)
Servicing funds to be remitted (17,901)
Other liabilities (4,158)
Total identifiable net assets $ 42,177
Goodwill 73,041
Total net assets acquired $115,218
652011 Form 10-K