TCF Bank 2009 Annual Report Download - page 77
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2009 Form 10-K : 61
The $71 million of subordinated notes due 2014 will
reprice quarterly at the three-month LIBOR rate plus 1.63%.
These subordinated notes may be redeemed by TCF Bank
at its discretion. The $50 million of subordinated notes due
2015 have a xed-rate coupon of 5% through March 14, 2010,
and will reprice quarterly thereafter at the three-month
LIBOR rate plus 1.56%. These subordinated notes may
be redeemed by TCF Bank at par after March 14, 2010. The
$74.5 million of subordinated notes due 2016 have a xed-
rate coupon of 5.5% until February 1, 2016. All of these
subordinated notes qualify as Tier 2 or supplementary capi-
tal for regulatory purposes, subject to certain limitations.
For certain equipment leases, TCF sells its minimum
lease rentals to other nancial institutions at xed rates
on a non-recourse basis with its underlying equipment as
collateral as a credit risk reduction tool. In the event of
a default by customer on these leases, the other nancial
institution has a rst lien on the underlying leased equipment
and TCF is only entitled to residual proceeds in excess of
the outstanding borrowing balance. In these non-recourse
nancings, the other nancial institution has no further
recourse against TCF.
Note 12. Income Taxes
(In thousands) Current Deferred Total
Year ended December 31, 2008:
Federal $46,627 $24,191 $ 70,818
State 1,715 4,169 5,884
Total $48,342 $28,360 $ 76,702
Year ended December 31, 2007:
Federal $91,170 $13,900 $105,070
State 3,100 (2,460) 640
Total $94,270 $11,440 $105,710
The effective income tax rate differs from the federal
income tax rate of 35% as a result of the following.
Year Ended December 31,
2008 2007
Federal income tax rate 35.00% 35.00%
Increase (decrease) in income
tax expense resulting from:
State income tax, net
of federal income
tax benet 1.86 .11
Deductible stock dividends (1.60) (1.04)
Investments in affordable
housing (.77) (.60)
Changes in uncertain
tax positions .57 (2.39)
Compensation deduction
limitations .77 .04
Deferred tax adjustments
due to law changes 1.40 (.55)
Federal settlement of
prior year issue – (2.27)
Non-controlling interest
tax effect – –
Other, net .07 .08
Effective income tax rate 37.30% 28.38%
A reconciliation of the change in the gross amount,
before related tax effects, of unrecognized tax benets
from January 1, 2009 to December 31, 2009 is as follows:
(In thousands)
Balance at January 1, 2009 $ 9,221
Settlements with taxing authorities (4,621)
Decreases related to lapses of applicable statutes (2,027)
Other 284
The total amount of unrecognized tax benets that,
if recognized, would affect the tax provision and the
effective income tax rate is $1.3 million, net of related
tax benet effects.
TCF’s policy is to report interest and penalties, if any,
related to unrecognized tax benets in income tax expense
in the Consolidated Statements of Income. The gross
amount of accrued interest on unrecognized tax benets
was $372 thousand at December 31, 2009. TCF recorded
a reduction of accrued interest of $419 thousand and
$572 thousand during 2009 and 2008, respectively.