TCF Bank 2012 Annual Report Download - page 83

the amount of impairment. Impairment losses, if any,
are recorded as a charge to non-interest expense and an
adjustment to the carrying value of goodwill.
Other intangible assets are reviewed for impairment
whenever events or changes in circumstances indicate
their carrying amount may not be recoverable. Impairment
is indicated if the sum of the undiscounted estimated
future net cash flows is less than the carrying value of the
intangible asset. Impairment losses, if any, permanently
reduce the carrying value of the other intangible assets.
Stock-Based Compensation The fair value of
restricted stock and stock options is determined on the
date of grant and amortized to compensation expense,
with a corresponding increase in additional paid-in capital,
over the longer of the service period or performance period,
but in no event beyond an employee’s retirement date
or date of employment termination. For performance-
based restricted stock, TCF estimates the degree to
which performance conditions will be met to determine
the number of shares that will vest and the related
compensation expense. Compensation expense is adjusted
in the period such estimates change. Non-forfeitable
dividends, if any, paid on shares of restricted stock are
recorded to retained earnings for shares that are expected
to vest and to compensation expense for shares that are
not expected to vest.
Income tax benefits related to stock compensation,
in excess of grant date fair value less any proceeds on
exercise, are recognized as additional paid-in capital
upon vesting or exercise and delivery of the stock. Any
income tax benefits that are less than grant date fair
value less any proceeds on exercise are recognized as
a reduction of additional paid in capital to the extent
of previously recognized income tax benefits and then
as income tax expense for any remaining amount. See
Note 16, Stock Compensation, for additional information
concerning stock-based compensation.
Deposit Account Overdrafts Deposit account overdrafts
are reported in other loans and leases. Net losses on
uncollectible overdrafts are reported as net charge-offs
in the allowance for loan and lease losses within 60 days
from the date of overdraft. Uncollectible deposit fees are
reversed against fees and service charges and a related
reserve for uncollectible deposit fees is maintained in other
liabilities. Other deposit account losses are reported in
other non-interest expense.
Note 2. Business Combination
On November 30, 2011, TCF Bank entered the auto finance
business with the acquisition of 100% of the outstanding
common shares of Gateway One Lending & Finance, LLC
(“Gateway One”), a privately held lending company that
indirectly originates loans on new and used autos to
consumers through established dealer relationships.
As a result of the acquisition, Gateway One became a
wholly-owned subsidiary of TCF Bank and, accordingly,
its results of operations have been included within TCF’s
consolidated financial statements since November 30, 2011.
TCF’s Consolidated Statements of Income for the year ended
December 31, 2011 included net interest income, non-
interest income and net income of Gateway One totaling
$282 thousand, $1.9 million and $89 thousand,
respectively. During the fourth quarter of 2011, TCF
recognized $2 million of acquisition costs. These costs
are reported in other non-interest expense within the
Consolidated Statement of Income for the year ended
December 31, 2011.
The following unaudited pro forma financial information
presents the combined results of operations of TCF and
Gateway One as if the acquisition had been effective
January 1, 2010. These results include the impact of
amortizing certain purchase accounting adjustments such
as intangible assets, compensation expenses and the
impact of the acquisition on income tax expense. There
were no material nonrecurring pro forma adjustments
directly attributable to the acquisition included within the
following pro forma financial information. The pro forma
financial information does not necessarily reflect the
results of operations that would have occurred had TCF and
Gateway One constituted a single entity during such periods.
Years Ended December 31,
(In thousands, except per-share data)
2011
Unaudited
2010
Unaudited
Interest income $943,776 $978,623
Net interest income 704,693 706,556
Non-interest income 458,998 547,940
Net income available to common
stockholders 107,597 150,613
Basic net income per common share $ .70 $ 1.08
Diluted net income per common share $ .69 $ 1.08
{ 2012 Form 10K } { 67 }