TCF Bank 2010 Annual Report Download - page 83

Download and view the complete annual report

Please find page 83 of the 2010 TCF Bank annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 130

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130

• 67 •
2010 Form 10-K
Loan Modifications for Borrowers with Financial
Difficulties Included within the loans and leases above
are certain loans that have been modified in order to
maximize collection of loan balances. If, for economic or
legal reasons related to the customer’s financial difficulties,
TCF grants a concession compared to the original terms
and conditions on the loan that it would not have otherwise
considered, the modified loan is classified as a TDR.
Concessions related to TDRs generally do not include
forgiveness of principal balances. All TDRs are considered
to be impaired. TCF held consumer real estate loan TDRs
of $367.9 million and $267.9 million at December 31, 2010
and December 31, 2009, respectively. Of these loans,
$337.4 million and $252.5 million were accruing at
December 31, 2010 and December 31, 2009, respectively.
TCF also held $66.3 million and $9.6 million of commercial
real estate loan TDRs at December 31, 2010 and December
31, 2009, respectively. Of these loans, $48.8 million were
accruing at December 31, 2010. There were no accruing
commercial loan TDRs at December 31, 2009. The amount
of additional funds committed to borrowers who are in TDR
status was $2.2 million at December 31, 2010 and $3 million
at December 31, 2009.
TDRs are evaluated separately in TCF’s allowance
methodology based on the expected cash flows for loans
in this status. Reserves for losses on accruing consumer
real estate loan TDRs were $36.8 million, or 10.9% of the
outstanding balance, at December 31, 2010 and $27 million,
or 10.7% of the outstanding balance at December 31, 2009.
TCF utilized its historical 16% re-default rate on consumer
real estate loan TDRs in determining its assumed 20% re-
default rate included in the estimated cash flows. Reserves
for losses on accruing commercial real estate loan TDRs were
$695 thousand, or 1.42% of the outstanding balance, at
December 31, 2010.
Consumer real estate loans that are less than 150 days
past due, or six payments owing, at the time of modifica-
tion remain on accrual status if there is demonstrated
performance under a reduced payment amount prior to the
actual legal modification and payment in full under the
modified loan is expected. Otherwise, the loans are placed
on non-accrual status and reported as non-accrual until
there is sustained repayment performance for six con-
secutive payments. An accruing modified loan is re-aged
to current delinquency status after the receipt of three
consecutive modified payments.
The following table provides interest income recognized
on TDRs and contractual interest that would have been
recorded had the loans performed in accordance with their
original contractual terms.
For the Year Ended December 31,
(In thousands) 2010 2009 2008
Contractual interest due on TDRs $21,297 $6,308 $1,331
Interest income recognized on TDRs 11,318 3,215 495
Net reduction in interest income $ 9,979 $3,093 $ 836
Impaired Loans TCF considers impaired loans to include
non-accrual commercial loans, equipment finance loans,
inventory finance loans and consumer real estate or
commercial TDRs. Non-accrual impaired loans are included
in the previous tables within the amounts disclosed as
non-accrual and the accruing consumer real estate and
commercial TDRs have been previously disclosed as
performing within the tables of performing and non-accrual
loans and leases. The loan balance of impaired loans
represents the amount recorded within loans and leases on the
Consolidated Statements of Financial Condition whereas the
unpaid contractual balance represents the balances legally
owed by the borrowers, excluding write-downs.