TCF Bank 2012 Annual Report Download - page 57

Changes in the amount of non-accrual loans and leases for the years ended December 31, 2012 and 2011 are summarized in
the following tables.
At or For the Year Ended December 31, 2012
(In thousands)
Consumer
Real Estate Commercial
Leasing and
Equipment
Finance
Inventory
Finance
Auto
Finance Other Total
Balance, beginning of year $149,371 $127,519 $ 20,583 $ 823 $ – $ 15 $ 298,311
Additions 340,359 120,155 27,138 8,784 110 14 496,560
Charge-offs (62,591) (40,502) (19,667) (736) – (1,188) (124,684)
Transfers to other assets (82,632) (15,044) (2,915) (817) – (605) (102,013)
Return to accrual status (96,137) (27,692) (1,308) (3,867) – – (129,004)
Payments received (12,827) (35,480) (10,170) (2,885) (13) (572) (61,947)
Other, net (643) (1,210) (9) 185 4 3,907 2,234
Balance, end of year $234,900 $127,746 $ 13,652 $ 1,487 $101 $ 1,571 $ 379,457
At or For the Year Ended December 31, 2011
(In thousands)
Consumer
Real Estate Commercial
Leasing and
Equipment
Finance
Inventory
Finance
Auto
Finance Other Total
Balance, beginning of year $ 167,497 $142,248 $ 34,407 $ 1,055 $ – $ 50 $ 345,257
Additions 230,944 106,259 29,261 6,875 – 160 373,499
Charge-offs (71,848) (42,098) (13,217) (61) – (195) (127,419)
Transfers to other assets (83,138) (23,142) (6,724) (755) – – (113,759)
Return to accrual status (79,602) – (2,943) (4,278) – – (86,823)
Payments received (13,273) (60,859) (20,113) (2,100) – – (96,345)
Other, net (1,209) 5,111 (88) 87 – – 3,901
Balance, end of year $ 149,371 $ 127,519 $ 20,583 $ 823 $ – $ 15 $ 298,311
Total non-accrual loans and leases that returned to
accrual status increased $42.2 million, while payments
received decreased $34.4 million and non-accrual loans
and leases transferred to other assets decreased $11.7
million. These changes were primarily driven by a more
aggressive workout approach in the commercial portfolio
and reduced foreclosures.
Allowance for Loan and Lease Losses The
determination of the allowance for loan and lease losses
is a critical accounting estimate. TCF’s methodologies for
determining and allocating the allowance for loan and
lease losses focus on ongoing reviews of larger individual
loans and leases, historical net charge-offs, delinquencies
in the loan and lease portfolio, the level of impaired and
non-accrual assets, values of underlying collateral, the
overall risk characteristics of the portfolios, changes in
character or size of the portfolios, geographic location,
year of origination, prevailing economic conditions and
other relevant factors. The various factors used in the
methodologies are reviewed on a periodic basis.
The Company considers the allowance for loan and lease
losses of $267.1 million appropriate to cover losses incurred
in the loan and lease portfolios as of December 31, 2012.
However, no assurance can be given that TCF will not, in any
particular period, sustain loan and lease losses that are
sizable in relation to the amount reserved, or that subsequent
evaluations of the loan and lease portfolio, in light of factors
then prevailing, including economic conditions, TCF’s ongoing
credit review process or regulatory requirements, will not
require significant changes in the balance of the allowance
for loan and lease losses. Among other factors, a continued
economic slowdown, increasing levels of unemployment and/
or a decline in commercial or residential real estate values
in TCF’s markets may have an adverse impact on the current
adequacy of the allowance for loan and lease losses by
increasing credit risk and the risk of potential loss.
The total allowance for loan and lease losses is generally
available to absorb losses from any segment of the portfolio.
The allocation of TCF’s allowance for loan and lease losses
disclosed in the following table is subject to change based on
changes in the criteria used to evaluate the allowance and is
not necessarily indicative of the trend of future losses in any
particular portfolio.
{ 2012 Form 10K } { 41 }