TCF Bank 2009 Annual Report Download - page 8

6 : TCF Financial Corporation and Subsidiaries
charge legislation is pending that could impact our
checking account products. We are staying close to
the topic and will take careful steps to manage our way
through any regulatory or legislative changes.
Regulatory reform following the financial crisis was the
government’s main focus in 2009 and into 2010. Members
of Congress have been busy pursuing several legislative
changes that could significantly impact the banking
industry. The proposed bill to limit interchange fees could
impact the banking industry; however, I do not believe
this bill will pass in the Senate as it is a concern between
merchants and banks without a consumer advocate.
The industry could also be impacted by the creation of
a centralized regulatory agency, the Consumer Financial
Protection Agency, by adding undue regulatory burden.
We continue to closely monitor developments on the
regulatory front and are committed to remaining innovative
in both our product and service offerings that fall within the
parameters of Congressional and regulatory requirements.
Revenue:
TCF’s total revenue in 2009 was $1.2 billion, up 6 percent,
from last year. Net interest income increased 7 percent
as a result of our aggressive deposit pricing strategy and
the favorable yields we received on our loans and leases,
and non-interest income increased 6 percent from 2008.
We saw some improvement in deposit fee income in
2009; however, volume levels remained low as customers
continued to be mindful of their spending and saved more.
This trend in customer behavior also impacted TCF’s card
revenue which totaled $104.8 million in 2009 and was
essentially flat from 2008. Our large checking account
base contributed to TCF’s ranking as the 10th largest
Visa®
Classic debit card issuer in the United States.
A strong fee category in 2009 was leasing and
equipment finance revenues, which totaled $69.1 million,
up 25 percent, from the prior year. Both operating lease
revenues and customer-driven sales-type lease revenues
increased in 2009. We also saw an increase in new
originations on equipment placed in service.
Expenses:
TCF was very efficient in managing its operating expenses
in 2009. We continued to place emphasis on our core
businesses of deposit gathering and loan and lease
production. As a result, we streamlined our day-to-day
operations and reorganized the company by profit
centers within business lines. We believe these actions
reduce redundancies, improve efficiencies and create
a highly responsive and performance-driven culture.
Unfortunately, these decisions were made at the cost
of a number of long-term and loyal employees. I applaud
those employees that have assumed additional duties as
a result of the restructuring and look to all employees to
continue to find ways to contribute to the bottom line
while carefully monitoring expenses.
The year 2009 also presented some unusual charges
that fell outside of core operating expenses. First, the
Federal Deposit Insurance Corporation required a special
FDIC insurance assessment of $8.2 million in the second
quarter and subsequently increased our insurance
premium rate. Second, foreclosed real estate and
repossessed asset expenses increased $11.8 million, or
63 percent, from last year as a result of increased levels of
commercial and consumer real estate owned properties.
TCF’s income tax expense was $45.9 million for 2009,
or 35 percent of pre-tax income. Income tax expense
for 2009 included a $4.2 million decrease in income tax
expense related to favorable developments in uncertain
tax positions, partially offset by a slight increase in the
effective income tax rate.
0908070605
$996
$1,027
$1,092 $1,092
$1,159
Total Revenue
Millions of Dollars
+6% annual growth rate (’09 vs. ’08)
Fees and Other Revenue
Net Interest Income
0908070605
$550
$594
$633
Net Interest Income
Millions of Dollars
+7% annual growth rate (’09 vs. ’08)
$518
$538