TCF Bank 2013 Annual Report Download - page 89

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The table below summarizes TDR loans that defaulted during the years ended December 31, 2013 and 2012, which were
modified within one year of the beginning of the respective reporting period. TCF considers a loan to have defaulted when it
becomes 90 or more days delinquent under the modified terms, has been transferred to non-accrual status subsequent to the
modification or has been transferred to other real estate owned.
Year Ended December 31,
2013 2012
Number Number
(Dollars in thousands) of Loans Loan Balance(1) of Loans Loan Balance(1)
Consumer real estate:
First mortgage lien 85 $ 12,511 62 $ 10,007
Junior lien 50 2,479 25 1,221
Total consumer real estate 135 14,990 87 11,228
Commercial real estate 7 5,561 21 41,027
Leasing and equipment finance 2 268 ––
Auto finance 659––
Other 11––
Total defaulted modified loans 151 $ 20,878 108 $ 52,255
Total loans modified in the applicable period 1,865 $374,761 2,383 $575,014
Defaulted modified loans as a percent of total loans modified
in the applicable period 8.1% 5.6% 4.5% 9.1%
(1) The loan balances presented are not materially different than the pre-modification loan balances as TCF’s loan modifications generally do not
forgive principal amounts.
Consumer real estate TDR loans are evaluated separately in TCF’s allowance methodology. Impairment is generally based upon
the present value of the expected future cash flows or the fair value of the collateral less selling expenses for collateral
dependent loans. The allowance on accruing consumer real estate TDR loans was $103.3 million, or 20.4% of the outstanding
balance, at December 31, 2013 and $82.3 million, or 17.2% of the outstanding balance, at December 31, 2012. For consumer
real estate TDR loans, TCF utilized average remaining re-default rates ranging from 6% to 25% in 2013, and 10% to 25% in 2012,
depending on modification type, in determining impairment, which is consistent with actual experience.
Generally consumer real estate loans remain on accruing status upon modification if they are less than 90 days past due and
payment in full under the modified loan terms is expected based on a current credit evaluation and historical payment
performance. In addition, consumer real estate junior lien loans are placed on non-accrual status and charged-off to the estimated
fair value when the junior lien loan is 30 days or more past due and when TCF has evidence that the related third-party first
mortgage lien is 90 days or more past due or foreclosure action has been initiated. Loans are placed on non-accrual status and
reported as non-accrual until there is sustained repayment performance for six consecutive payments, except for loans
discharged in Chapter 7 bankruptcy that are not reaffirmed, which remain on non-accrual status for the remainder of the term of
the loan. All eligible loans are re-aged to current delinquency status upon modification.
Commercial TDR loans are individually evaluated for impairment based upon the present value of the expected future cash flows
or for collateral dependent loans at the fair value of collateral, less selling expense if repayment or satisfaction of the loans is
expected to be dependent on the sale of the collateral. Non-accrual commercial loans are charged-off to the estimated fair value
of underlying collateral, less estimated selling costs; however, if payment or satisfaction of the loan is dependent on the
operation, rather than the sale, of the collateral, the impairment does not include selling costs. The allowance on accruing
commercial TDR loans was $6.3 million, or 5.2% of the outstanding balance, at December 31, 2013 and $1.5 million, or 1% of the
outstanding balance, at December 31, 2012.
Impaired Loans TCF considers impaired loans to include non-accrual commercial loans, non-accrual equipment finance loans
and non-accrual inventory finance loans, as well as all TDR loans. Non-accrual impaired loans, including non-accrual TDR loans,
are included in non-accrual loans and leases within the previous tables. Accruing TDR loans have been disclosed by delinquency
status within the previous tables of accruing and non-accrual loans and leases. In the following tables, 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.
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