TCF Bank 2011 Annual Report Download - page 112

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The change in total assets carried at fair value using
Company Determined Market Prices, from December 31,
2010 to December 31, 2011, was the result of decreases
in fair values of $672 thousand recorded within non-
interest expense, decreases in fair value of $82 thousand
recorded through other comprehensive income, sales of
$100 thousand and reductions due to principal paydowns
of $70 thousand. Transfers to securities measured at fair
value using Readily Available Market Prices from securities
measured using Company Determined Market Prices were
$264 thousand.
The following is a description of valuation methodologies
used for assets measured on a non-recurring basis.
Loans Impaired loans for which repayment of the loan is
expected to be provided solely by the value of the underlying
collateral are considered collateral dependent and are
valued based on the estimated fair value of such collateral.
Real Estate Owned and Repossessed and Returned
Equipment The fair value of real estate owned is based
on independent full appraisals, real estate broker’s price
opinions, or automated valuation methods, less estimated
selling costs. Certain properties require assumptions that
are not observable in an active market in the determination
of fair value. The fair value of repossessed and returned
equipment is based on available pricing guides, auction
results or price opinions, less estimated selling costs.
Assets acquired through foreclosure, repossession or
returned to TCF are initially recorded at the lower of the
loan or lease carrying amount or fair value less estimated
selling costs at the time of transfer to real estate owned or
repossessed and returned equipment. Real estate owned
and repossessed and returned equipment were written down
$26.4 million, which is included in foreclosed real estate
and repossessed assets, net expense, during the year ended
December 31, 2011.
The table below presents the balances of assets which were measured at fair value on a non-recurring basis.
(In thousands)
Readily
Available
Market Prices(1)
Observable
Market Prices(2)
Company
Determined
Market Prices(3)
Total at
Fair Value
At December 31, 2011:
Loans (4) $ – $ – $ 29,003 $ 29,003
Real estate owned (5) – – 122,263 122,263
Repossessed and returned equipment (5) – 3,889 270 4,159
Investments (6) – – 4,244 4,244
Total $ – $3,889 $155,780 $159,669
At December 31, 2010:
Loans (4) $ – $ – $ 42,683 $ 42,683
Real estate owned (5) – – 127,295 127,295
Repossessed and returned equipment (5) – 5,731 1,180 6,911
Investments (6) – – 4,296 4,296
Total $ – $5,731 $ 175,454 $181,185
(1) Considered Level 1 under ASC 820, Fair Value Measurements and Disclosures.
(2) Considered Level 2 under ASC 820, Fair Value Measurements and Disclosures.
(3) Considered Level 3 under ASC 820, Fair Value Measurements and Disclosures and are based on valuation models that use significant assumptions that are not observable in
an active market.
(4) Represents the carrying value of loans for which impairment reserves are determined based on the appraisal value of the collateral.
(5) Amounts do not include assets held at cost at December 31, 2011 or 2010.
(6) Represents the carrying value of other investments which were recorded at fair value determined by using quoted prices, when available, and incorporating results of
internal pricing techniques and observable market information.
94 TCF Financial Corporation and Subsidiaries