TCF Bank 2004 Annual Report Download - page 29

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2004 Annual Report 27
The following table sets forth information about TCF’s card business:
At or For the Year Ended December 31, Percentage Increase (Decrease)
(Dollars in thousands) 2004 2003 2002 2004/2003 2003/2002
Average number of checking accounts with a TCF card . . . . . . . . . . . . 1,323,877 1,193,936 1,087,592 10.9% 9.8%
Active card users . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 710,893 647,407 578,347 9.8 11.9
Average number of transactions per month . . . . . . . . . . . . . . . . . . . . 13.5 12.5 11.8 8.0 5.9
Sales volume for the year ended:
Off-line (Signature) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,197,678 $3,543,657 $2,958,633 18.5 19.8
On-line (PIN) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 537,124 355,045 257,560 51.3 37.8
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,734,802 $3,898,702 $3,216,193 21.4 21.2
Percentage off-line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88.66% 90.89% 91.99% (2.5) (1.2)
Average off-line interchange rate . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.40% 1.43% 1.55% (2.1) (7.7)
Fees and Service Charges Fees and service charges increased
$24.2 million, or 9.8%, in 2004 and $21.4 million, or 9.5%, in 2003.
This increase primarily reflects the impact of TCF’s expanding
branch network and customer base, new products and services,
and increased fees.
Card Revenue During 2004, card revenue, primarily interchange
fees, totaled $63.3 million, up 19.5%, from $53 million in 2003. The
increase in card revenue in 2004 was primarily attributed to a 21.4%
increase in sales volumes generated by increases in both active
accounts and the number of transactions per active account, par-
tially offset by a 3 basis point decline in average off-line interchange
rates from 2003. Interchange fees have been impacted as a result of
the settlement of certain merchant litigation against Visa in 2003. As
part of the settlement, interchange rates on debit cards for certain
merchants were reduced from August 2003 through February 2004.
Additionally, as part of the settlement, Visa established new
interchange rates for debit cards, which took effect in February 2004,
and these rates increased from the rate established August 1, 2003;
however, overall these new rates remained below the rates which were
in effect prior to August 2003.
ATM Revenue ATM revenue totaled $42.9 million for 2004, down
1.6% from $43.6 million for 2003. The declines in ATM revenue were
attributable to the continued decline in utilization of non-owned
ATM machines by TCF customers and declines in utilization of TCF’s
ATM machines by non-customers partially offset by the increased
number of TCF customers with cards. These declines resulted from
increased use of debit cards as well as the increased competition
from other ATM machine networks. Additionally, as ATM site contracts
are renewed, merchants have generally required a larger percentage
of the fee charged to non-customers for use of TCF’s ATM’s. At
December 31, 2004, TCF had 1,141 EXPRESS TELLER®ATM machines,
compared with 1,166 machines at December 31, 2003.