TCF Bank 2004 Annual Report Download - page 7

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2004 Annual Report 5
0403020100
Net Income
(millions of dollars)
$186
$207
$233
$216
$255
by the 2004 acquisition of VGM Financial Services, a company spe-
cializing in home medical equipment financing. We are pleased with
this acquisition and our leasing operation results.
Average balances for TCF’s core deposits increased $249.4 million, or
4 percent. Certificates of deposit continued to decline in 2004, as other
lower cost funding sources were available to TCF. The weighted-average
interest rate on deposits at December 31, 2004 was .69 percent, one
of the lowest rates in the country. This low cost is directly attributa-
ble to our convenience banking strategy and the large amount of TCF’s
non-interest bearing deposits. We look to grow deposits faster in 2005
to fund a larger portion of TCF’s Power Asset growth.
New Branch Expansion
A good portion of TCF’s growth comes from our new branch expansion.
This strategy has provided TCF an ever-growing customer base with a
very low cost of funds.
TCF opened 30 new branches during 2004, including 19 new traditional
branches and 11 new supermarket branches. New branches opened
since 1998 now have $1.5 billion in deposits with an average interest
cost of .53 percent and 576,000 checking accounts. Checking account
growth in new branches was approximately 16 percent. Our new tradi-
tional branches are generally performing close to our expectations and
financial models. However, we have had traditional branch opening
delays due to government approval difficulties, construction delays
and poor weather, which has negatively impacted growth in new check-
ing accounts. We have continued to improve our internal capabilities
to identify and select the best sites for future growth.
During 2004, we entered into a new supermarket banking relationship
in Colorado with King Soopers®
, an affiliate of Kroger®
. We are encour-
aged by the early results.
We believe TCF’s de novo strategy is a better use of our capital than
paying the high premiums of a bank acquisition. We intend to stick to
this disciplined approach in 2005.
“TCF continued to experience
strong growth in its core
businesses in 2004.”