TCF Bank 2009 Annual Report Download - page 94

78 : TCF Financial Corporation and Subsidiaries
TCF Financial Corporation’s (parent company only)
operations are conducted through its banking subsidiaries
and other subsidiaries. As a result, TCF’s cash ow and abil-
ity to make dividend payments to its common stockholders
depend on the earnings of its subsidiaries. The ability of
TCF’s banking subsidiaries to pay dividends or make other
payments to TCF is limited by their obligations to maintain
sufcient capital and by other regulatory restrictions on
dividends. At December 31, 2009, TCF’s banking subsidiar-
ies could pay a total of approximately $158.3 million in
dividends to TCF without prior regulatory approval.
Additionally, retained earnings at TCF National Bank,
a wholly owned subsidiary of TCF Financial Corporation, at
December 31, 2009 includes approximately $134.4 million
for which no provision for federal income taxes has been
made. This amount represents earnings legally appropri-
ated to thrift bad debt reserves and deducted for federal
income tax purposes in prior years and is generally not
available for payment of cash dividends or other distribu-
tions to shareholders. Future payments or distributions of
these appropriated earnings could invoke a tax liability for
TCF based on the amount of the distributions and the tax
rates in effect at that time.
Note 25. Litigation Contingencies
From time to time, TCF is a party to legal proceedings arising
out of its lending, leasing and deposit operations. TCF is
and expects to become engaged in a number of foreclosure
proceedings and other collection actions as part of its
lending and leasing collection activities. From time to time,
borrowers and other customers, or employees or former
employees, have also brought actions against TCF, in some
cases claiming substantial damages. Financial services
companies are subject to the risk of class action litigation,
and TCF has had such actions brought against it from time
to time. Litigation is often unpredictable and the actual
results of litigation cannot be determined with certainty.

Year Ended December 31,
(In thousands)  2008 2007
Cash ows from operating activities:
Net income    $ 128,958 $ 266,808
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed earnings of bank subsidiaries  (14,172) (68,163)
Other, net  (6,394) 1,188
Total adjustments  (20,566) (66,975)
Net cash provided by operating activities  108,392 199,833
Cash ows from investing activities:
Purchases of premises and equipment, net  (40) (88)
Net cash used by investing activities  (40) (88)
Cash ows from nancing activities:
Dividends paid on common stock  (126,447) (124,513)
Dividends paid on preferred stock  – –
Purchases of common stock  – (105,251)
Recission of capital contribution  – –
(Redemption)/Issuance of preferred stock  361,004 –
Interest paid on preferred trust securities  – –
Sale of trust preferred securities  111,378 –
Capital infusions to TCF National Bank  (434,092) –
Treasury shares sold to Employees Stock Purchase Plans  10,178 –
Net (decrease) increase in short-term borrowings  (9,500) 9,500
Stock compensation tax (expense) benets  9,638 4,534
Other, net  163 1,216
Net cash used by nancing activities  (77,678) (214,514)
Net (decrease) increase in cash  30,674 (14,769)
Cash and cash equivalents at beginning of year  2,883 17,652
Cash and cash equivalents at end of year    $ 33,557 $ 2,883