TCF Bank 2004 Annual Report Download - page 67

2004 Annual Report 65
Note 15. Stockholders’ Equity
Restricted Retained Earnings Retained earnings at
December 31, 2004 includes approximately $134.4 million for which
no provision for federal income taxes has been made. This amount
represents earnings legally appropriated to bad debt reserves and
deducted for federal income tax purposes and is generally not avail-
able for payment of cash dividends or other distributions to share-
holders. Future payments or distributions of these appropriated
earnings could invoke a tax liability for TCF based on the amount of
the distributions removed and the tax rates in effect at that time.
Shareholder Rights Plan Each share of TCF common stock out-
standing includes one preferred share purchase right. TCF’s preferred
share purchase rights will become exercisable only if a person or
group acquires or announces an offer to acquire 15% or more of
TCF’s common stock. When exercisable, each right will entitle the
holder to buy one one-hundredth of a share of a new series of junior
participating preferred stock at a price of $200. In addition, upon
the occurrence of certain events, holders of the rights will be enti-
tled to purchase either TCF’s common stock or shares in an “acquir-
ing entity” at half of the market value. TCF’s Board of Directors (the
“Board”) is generally entitled to redeem the rights at $.001 per right
at any time before they become exercisable. The rights will expire on
June 9, 2009, if not previously redeemed or exercised.
Stock Split During the third quarter of 2004, TCF announced and
completed a two-for-one stock split of its common stock in the form
of a 100% stock dividend. The stock split resulted in an increase in
issued common stock of 92,485,601 shares and was accounted for by
a transfer of $925 thousand to common stock from additional paid-
in capital. All prior period common shares and per share disclosures
have been restated to reflect the split.
TCF purchased 3,984,890; 6,918,980 and 6,216,862 shares of
its common stock during the years ended December 31, 2004, 2003
and 2002 respectively. On July 21, 2003, TCF’s Board of Directors
authorized the repurchase of up to an additional 5% of TCF’s
common stock, or 7.2 million shares. At December 31, 2004, TCF
had 3.5 million shares remaining in its stock repurchase program
authorized by the Board of Directors.
Shares Held in Trust for Deferred Compensation Plans
TCF has deferred compensation plans that allow eligible executives,
senior officers and certain other employees to defer payment of up
to 100% of their base salary and bonus as well as grants of restricted
stock. There are no company contributions to these plans, other
than payment of administrative expenses. The amounts deferred are
invested in TCF stock or other publicly traded stocks, bonds or mutual
funds. At December 31, 2004 the fair value of the assets in the plans
totaled $253.3 million and included $246.3 million invested in TCF
common stock. The cost of TCF common stock held by TCF’s deferred
compensation plans is reported separately in a manner similar to
treasury stock (that is, changes in fair value are not recognized)
with a corresponding deferred compensation obligation reflected
in additional paid-in capital.
Note 16. Regulatory Capital Requirements
TCF is subject to various regulatory capital requirements administered
by the federal banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory, and possibly additional
discretionary, actions by the federal banking agencies that could
have a direct material effect on TCF’s financial statements. Also, in
general, TCF National Bank may not declare or pay a dividend to TCF
in excess of 100% of its net profits for that year combined with its
retained net profits for the preceding two calendar years without prior
approval of the Office of the Comptroller of the Currency (“OCC”).
Treasury Stock and Other Treasury stock and other consists of the following:
At December 31,
(In thousands) 2004 2003
Treasury stock, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(862,543) $(751,586)
Shares held in trust for deferred compensation plans, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (70,775) (71,103)
Unamortized stock compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,199) (16,712)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(946,517) $(839,401)