TCF Bank 2014 Annual Report Download - page 83

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The table below summarizes TDR loans that defaulted during the years ended December 31, 2014 and 2013, which were
modified during the respective reporting period or 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 or repossessed and
returned assets.
Loan Balance(1)
Year Ended December 31,
(Dollars in thousands) 2014 2013
Consumer real estate:
First mortgage lien $ 1,969 $ 12,510
Junior lien 1,364 2,479
Total consumer real estate 3,333 14,989
Commercial:
Commercial real estate 3,895 5,561
Commercial business 127 –
Total commercial 4,022 5,561
Leasing and equipment finance –268
Auto finance 392 59
Other –1
Defaulted TDR loans modified during the applicable period $ 7,747 $ 20,878
Total loans modified in the applicable period $177,674 $374,761
Defaulted modified TDR loans as a percent of total loans modified in the applicable period 4.4% 5.6%
(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 $20.4 million, or 18.2% of the outstanding
balance, at December 31, 2014, and $103.3 million, or 20.4% of the outstanding balance, at December 31, 2013. In determining
impairment for consumer real estate accruing TDR loans, TCF utilized assumed remaining re-default rates ranging from 4% to
22% in 2014 and 6% to 25% in 2013, depending on modification type and actual experience. At December 31, 2014, 2.4% of
accruing consumer real estate TDR loans were more than 60-days delinquent, compared with 1.4% at December 31, 2013.
Consumer real estate TDR loans generally remain on accruing status following modification if they are less than 90 days past due
and payment in full under the modified terms of the loan is expected based on a current credit evaluation and historical payment
performance. Of the non-accrual TDR balance at December 31, 2014, $50.0 million, or 57.0%, were loans discharged in
Chapter 7 bankruptcy that were not reaffirmed, of which 68.4% were current. Of the non-accrual TDR balance at December 31,
2013, $81.5 million, or 60.6%, were loans discharged in Chapter 7 bankruptcy that were not reaffirmed, of which 71.8% were
current. 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. The allowance on accruing commercial TDR
loans was $1.4 million, or 1.7% of the outstanding balance, at December 31, 2014, and $6.3 million, or 5.2% of the outstanding
balance, at December 31, 2013. No accruing commercial TDR loans were 60 days or more delinquent at December 31, 2014,
compared with one commercial TDR loan with $0.9 million outstanding at December 31, 2013.
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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