TCF Bank 2012 Annual Report Download - page 7

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Lending
TCF’s Lending division consists of retail lending,
commercial banking and the national lending
businesses (TCF Equipment Finance, Winthrop, TCF
Inventory Finance and Gateway One). Total loan and
lease balances of $15.4 billion at December 31, 2012
increased $1.3 billion, or 9 percent from a year ago,
primarily due to strong growth in TCF Inventory
Finance and Gateway One, as well as increased
originations across most lending platforms. The
emphasis on national lending has led to increased
diversity throughout the lending portfolio — a portfolio
that is now 43 percent consumer real estate, 35
percent national lending and 22 percent commercial.
Loan and lease balances in TCF’s national lending
businesses increased 41 percent to $5.3 billion at
December 31, 2012. With experienced management
teams and strong asset diversification by industry,
transaction size, geography and collateral type, the
national lending businesses not only originate the
highest yielding assets at TCF, but also deliver the
best credit quality.
The most significant asset growth during the year
came from TCF Inventory Finance. Largely due to
the floorplan financing agreement with BRP, portfolio
balances totaled $1.6 billion at year-end, up 150.9
percent. TCF Inventory Finance is well-diversified
with loans spread across powersports, lawn and
garden, consumer electronics and appliances,
recreation vehicle, and marine product industries.
This portfolio has a high average yield (6.20 percent
in 2012), while maintaining credit quality that is
among the best of TCF’s lending businesses.
TCF Inventory Finance now has agreements with
many industry-leading manufacturers including
BRP, The Toro Company and Arctic Cat, Inc. These
relationships, along with its seasoned and
experienced management team, have given TCF
Inventory Finance strong credibility and made
it a significant player in the inventory finance
marketplace. We believe TCF Inventory Finance
will continue to be a key contributor to the TCF
story as we pursue additional programs in 2013.
TCF began originating high quality indirect auto
loans following the acquisition of Gateway One in
November 2011. Gateway One finished 2012 with
loan balances of $552.8 million and an average yield
of 6.06 percent. Gateway One also has managed
assets, which includes portfolio loans, loans held
for sale and loans sold and serviced for others,
of $1.3 billion. After joining TCF with 3,200 dealer
relationships in 30 states, Gateway One now has
nearly 6,200 dealer relationships in 43 states.
Throughout 2012, TCF has successfully integrated
Gateway One into TCF. In addition to the strong
on-balance sheet growth at Gateway One, we have
also executed on our strategy of selling a portion of
the originations each quarter to generate additional
revenue. In 2012, TCF realized gains of $22.1 million
as a result of the sales of these auto loans, which we
continue to service. We expect Gateway One will
continue to provide disciplined growth in 2013.
A Better Way of Lending
“The emphasis on national lending has
led to increased diversity throughout
the lending portfolio — a portfolio
that is now 43 percent consumer real
estate, 35 percent national lending
and 22 percent commercial.”
{ 2012 Annual Report } { 05 }