TCF Bank 2009 Annual Report Download - page 60
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44 : TCF Financial Corporation and Subsidiaries
The following table summarizes TCF’s interest-rate gap position at December 31, 2009.
(Dollars in thousands)
Interest-earning assets:
Consumer loans (1)
Commercial loans (1)
Leasing and equipment nance (1)
Securities available for sale (1)
Investments
Inventory nance
Total
Interest-bearing liabilities:
Checking deposits (2)
Savings deposits (2)
Money market deposits (2)
Certicates of deposit
Short-term borrowings
Long-term borrowings (3)
Total
Interest-earning assets (under) over
interest-bearing liabilities
Cumulative gap
Cumulative gap as a percentage
of total assets:
At December 31, 2009
At December 31, 2008 (9.5)% (7.6)% (3.8)% 16.3% 3.4% 3.4%
(1) Based upon contractual maturity, repricing date, if applicable, scheduled repayments of principal and projected prepayments of principal based upon experience and
third-party projections.
(2) Includes non-interest bearing deposits. At December 31, 2009, 18% of checking deposits, 51% of savings deposits, and 54% of money market deposits are included in
amounts repricing within one year. At December 31, 2008, 15% of checking deposits, 60% of savings deposits, and 56% of money market deposits are included in amounts
repricing within one year.
(3) Includes $2.5 billion of callable borrowings.
in the correlation of various interest-bearing instruments,
competition, or a rise or decline in interest rates.
TCF’s one-year interest rate gap was a negative $1.2
billion, or 6.6% of total assets at December 31, 2009,
compared with a negative $631 million, or 3.8% of total
assets at December 31, 2008. A negative interest rate
gap position exists when the amount of interest-bearing
liabilities maturing or re-pricing exceeds the amount of
interest-earning assets maturing or re-pricing, including
assumed prepayments, within a particular time period.
TCF estimates that an immediate 25 basis point decrease
in current mortgage loan interest rates would increase
prepayments on the $7.2 billion of xed-rate mortgage-
backed securities, residential real estate loans and
consumer loans at December 31, 2009, by approximately
$57 million, or 8.6%, in the rst year. An increase in
prepayments would decrease the estimated life of the
portfolios and may adversely impact net interest income or
net interest margin in the future. Although prepayments on
xed-rate portfolios are currently at a relatively low level,
TCF estimates that an immediate 100 basis point increase
in current mortgage loan interest rates would reduce
prepayments on the xed-rate mortgage-backed securi-
ties, residential real estate loans and consumer loans at
December 31, 2009, by approximately $132 million, or
19.9%, in the rst year. A slowing in prepayments would
increase the estimated life of the portfolios and may also
adversely impact net interest income or net interest margin
in the future. The level of prepayments that would actually
occur in any scenario will be impacted by factors other than
interest rates. Such factors include lenders’ willingness to
lend funds, which can be impacted by the value of assets
underlying loans and leases.