TCF Bank 2003 Annual Report Download - page 9

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2003 Annual Report 7
Finally, the management of interest rate risk in this record low interest rate environment remains a major challenge.
This is not something we have previously experienced to this extent. Over time, we intend to reduce TCF’s risk of
prepayments. Much of this will be accomplished by the reduction of residential loans and mortgage-backed securities as
well as replacing borrowings with core deposits. However, we will also explore other strategies to reduce this risk in our
mortgage-banking operations.
Risks We think it is appropriate to also mention here what we consider to be the other major risks to our continued
success. First is the success of our new branch expansion. We are relying on the continued, long-term success of branch
banking. Second, TCF, like all banks, is subject to the effects of any economic downturn. In particular, a significant decline
in home values in our markets could have a negative effect on our results. A bad economy can create increased loan and
lease losses. The third risk is our ability to attract and retain new customers. Our overall growth is dependent on our
ability to grow our checking accounts. Deposit losses (fraudulent checks, etc.) remain high and combating them is a con-
tinuing challenge. Technological change is a risk. Additionally, as became very clear in 2003, rising and falling interest
rates affect our results. Legal, regulatory and tax issues are always a risk (the Visa debit card lawsuit is a good example
of this legal risk).
New Branch Expansion
(number of new branches opened)
Supermarket Traditional
04 Plan
27 27
19
28
22
6
25
35
106
02 03010098 99
New Branch1 Total Deposits
(millions of dollars)
03
$1,225
$1,088
$744
$594
$190
$344
02010098 99
1 Branches opened since January 1, 1998
New Branch1 Banking Fees
& Other Revenue2
(millions of dollars)
03
$126
$108
$85
$61
$14
$39
02010098 99
1 Branches opened since January 1, 1998
2 Consisting of fees and service charges, debit card revenue,
ATM revenue, and investments and insurance commissions