TCF Bank 2011 Annual Report Download - page 32

Download and view the complete annual report

Please find page 32 of the 2011 TCF Bank annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 140

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140

Significant legal actions could subject TCF
to substantial uninsured liabilities.
TCF is subject to various claims related to its operations.
These claims and legal actions, including supervisory
actions by its regulators, could involve large monetary
claims or monetary penalties, as well as significant
defense costs. To protect itself from the cost of these
claims, TCF maintains insurance coverage in amounts and
with deductibles that it believes are appropriate for its
operations. However, TCF’s insurance coverage only covers
certain types of liability, and such insurance may not
continue to be available to TCF at a reasonable cost, or at
all. As a result, TCF may be exposed to substantial uninsured
liabilities, which could have a material adverse effect on
TCF’s financial condition and results of operations.
In addition, customers may make claims and take
legal action pertaining to the performance by TCF of its
fiduciary responsibilities. Whether customer claims and
legal action related to the performance of TCF’s fiduciary
responsibilities are founded or unfounded, such claims and
legal actions may result in significant financial liability and
could adversely affect the market perception of TCF and its
products and services, as well as impact customer demand
for those products and services. Any financial liability or
reputational damage could have a material adverse effect
on TCF’s financial condition and results of operations.
TCF is subject to environmental liability risk
associated with lending activities.
A significant portion of TCF’s loan portfolio is secured
by real property. In the ordinary course of business, TCF
may foreclose on and take title to properties securing
certain loans. In doing so, there is a risk that hazardous
or toxic substances could be found on these properties.
If hazardous or toxic substances are found, TCF may be
liable for remediation costs, as well as for personal injury
and property damage. Environmental laws may require TCF
to incur substantial expenses and may materially reduce
the affected property’s value or limit TCF’s ability to use
or sell the affected property. In addition, future laws or
more stringent interpretations or enforcement policies
with respect to existing laws may increase TCF’s exposure
to environmental liability. The remediation costs and any
other financial liabilities associated with an environmental
hazard could have a material adverse effect on TCF’s
financial condition and results of operations.
Acquisitions may disrupt TCF’s business
and dilute stockholder value.
TCF regularly evaluates merger and acquisition
opportunities and conducts due diligence activities
related to possible transactions with banks or other
financial institutions. As a result, negotiations may take
place and future mergers or acquisitions involving cash,
debt or equity securities may occur at any time. TCF
seeks merger or acquisition partners that are culturally
similar, have experienced management and possess
either significant market presence or have potential for
improved profitability through financial management,
economies of scale or expanded services. Acquiring other
banks, businesses or branches involves potential adverse
impact to TCF’s results of operations and various other
risks commonly associated with acquisitions, such as:
difficulty in estimating the value of the target company;
payment of a premium over book and market values that
may dilute TCF’s tangible book value and earnings per share
in the short and long term; potential exposure to unknown
or contingent liabilities of the target company; exposure
to potential asset quality issues of the target company;
volatility in reported income as goodwill impairment losses
could occur irregularly and in varying amounts; difficulty
and expense of integrating the operations and personnel
of the target company; inability to realize the expected
revenue increases, cost savings, increases in geographic
or product presence or other projected benefits; potential
disruption to TCF’s business; potential diversion of TCF
management’s time and attention; potential loss of key
employees and customers of the target company; and
potential changes in banking or tax laws or regulations
that may affect the target company.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
Offices At December 31, 2011, TCF owned the buildings
and land for 144 of its bank branch offices, owned the
buildings but leased the land for 23 of its bank branch
offices and leased or licensed the remaining 266 bank
branch offices, all of which are functional and appropriately
maintained. Bank branch properties owned by TCF had an
14 TCF Financial Corporation and Subsidiaries