TCF Bank 2011 Annual Report Download - page 10

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are seeing opportunity for growth.
TCFIF ended the year with a portfolio
balance of $625 million, down 21.2
percent from 2010, at an average yield
of 7.19 percent. The portfolio decrease
during the year was largely due to
the termination of a lawn and garden
program and the transitioning of an
electronics and appliance program to a
servicing-only program. Following the
entrance into the powersports industry
in 2010 with the acquisition of Arctic
Cat® Canadian powersports equipment
floorplan programs, TCF built on its
powersports market share in 2011
through an agreement with BRP to
finance BRP’s Ski-Doo®, Sea-Doo® and
Can-Am® dealers across the U.S. and
Canada. The BRP agreement has the
potential for approximately $600
million in average net receivables when
the program matures. In addition,
TCFIF entered the recreation vehicle
and marine products industries in 2011
through agreements with Jayco, Inc.
and Alumacraft Boat Co. in 2011.
TCFIF, which TCF started in 2008, is
now becoming a significant player in
the inventory finance marketplace.
TCFIF has proven that it can provide
excellent service and financing for
some of the largest manufacturers in
their respective industries. Our proven
track record is now resonating with
some of the smaller manufacturers
as well. Our increased presence and
credibility in the market will only help
as we continue to grow this profitable
business for TCF. We are continuing
to pursue future programs as well as
renew contracts with existing manu-
facturers in a very competitive market.
06 TCF Financial Corporation and Subsidiaries
In November 2011, TCF acquired
Gateway One Lending & Finance.
Gateway One originates and services
primarily used retail auto loans
acquired from over 3,400 franchised
and independent dealers across the
country. The acquisition of Gateway
One was another step toward the
further diversification of TCF by
growing high-quality assets with
strong risk-adjusted returns through
national specialty finance lending
programs in the second largest
consumer finance market in the U.S.
The lower cost of funding that TCF
provides will allow Gateway One to
reach more dealers and compete for
higher quality loans. The experienced
management team from Gateway One,
along with the TCF’s proven track
record of integrating and operating
these types of businesses, make this
acquisition an ideal fit.
At December 31, 2011, Gateway One
had managed assets totaling $437.7
million and loan balances of $3.6
million. We expect to see asset balances
ramp up throughout 2012 with start-up
expenses in the near-term. Gateway
One will be an important component
of TCF’s 2012 success.
Credit Quality
While we started to see some stabiliza-
tion, credit losses continued to be a
challenge for TCF in 2011 and impacted
TCF’s results. Net charge-offs decreased
only 2 percent, or 2 basis points, in
2011. Overall, credit metrics showed
some improvement from peak 2010
levels, but until we see unemployment
decline and home values start to recover,
credit costs are likely to remain elevated.
1986
In 1986, TCF became one of the rst banks to offer free
checking. To this day, TCF continues to develop convenient
and innovative deposit account products.