TCF Bank 2000 Annual Report Download - page 32

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30
TCF
Loan and lease originations were as follows:
Year Ended December 31,
(In thousands) 2000 1999 1998
Consumer(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,111,644 $1,371,712 $1,181,027
Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 768,024 746,769 519,386
Leasing and equipment finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 648,052 327,265 199,639
Residential real estate(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 893,873 1,362,742 2,023,078
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,421,593 $3,808,488 $3,923,130
(1) Includes loans held for sale.
Allowance for Loan and Lease Losses – Credit risk is the
risk of loss from a customer default. TCF has in place a process to
identify and manage its credit risk. The process includes initial
credit review and approval, periodic monitoring to measure com-
pliance with credit agreements and internal credit policies, mon-
itoring changes in the risk ratings of loans and leases, identification
of problem loans and leases and special procedures for collection
of problem loans and leases. The risk of loss is difficult to quan-
tify and is subject to fluctuations in values and general economic
conditions and other factors. See Notes 1 and 7 of Notes to
Consolidated Financial Statements for additional information
concerning TCF’s allowance for loan and lease losses.
Commercial real estate loans increased $298.4 million from
year-end 1999 to $1.4 billion at December 31, 2000. Commercial
business loans increased $59.1 million in 2000 to $410.4 mil-
lion at December 31, 2000. TCF is seeking to expand its com-
mercial business and commercial real estate lending activity to
borrowers located in its primary midwestern markets. At December
31, 2000, approximately 87% of TCF’s commercial real estate
loans outstanding were secured by properties located in its pri-
mary markets. In addition, approximately 96% of TCF’s com-
mercial business and commercial real estate loans are secured either
by properties or underlying business assets. At December 31, 2000
and December 31, 1999, there were no commercial real estate loans
with terms that have been modified in troubled debt restructur-
ings included in performing loans.
Leasing and equipment finance increased $363.8 million from
year-end 1999 to $856.5 million at December 31, 2000. At
December 31, 2000, $165.8 million or 25.4% of TCF’s lease
portfolio was funded on a non-recourse basis with other banks
and consequently TCF retains no credit risk on such amounts.
This compares with non-recourse fundings of $178.4 million or
38.9% at December 31, 1999. Total loan and lease originations
for TCF’s leasing business were $648.1 million during 2000,
compared with $327.3 million in 1999 and $199.6 million in
1998. At December 31, 2000, the backlog of approved transac-
tions related to TCF’s leasing business totaled $165.6 million,
compared with $125.2 million at December 31, 1999. The increase
in the leasing and equipment finance portfolio is primarily due
to the de novo expansion activity of TCF Leasing, which began in
1999. Included in this portfolio at December 31, 2000 are $144.4
million of loans and leases secured by trucks and trailers, com-
pared with $34.1 million at December 31, 1999. TCF’s expanded
leasing activity is subject to the risk of cyclical downturns and other
adverse economic developments affecting these industries and mar-
kets. TCF Leasing has originated most of its portfolio during
2000, and consequently the performance of this portfolio may
not be reflective of future results and credit quality.