TCF Bank 2011 Annual Report Download - page 7

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Asset Growth and Diversification
As a result of competition from large
national banks in our markets, it has
become more difficult for regional
banks to continue to add high-quality
loans and leases within a regional
footprint. To be successful, regional
banks must be able to make loans on
a national platform. As a result, over
the last several years TCF has begun
shifting its lending focus toward its
already successful national niche
lending programs. These national
platforms include equipment finance,
inventory finance, mortgage lending
and now auto finance. In 2011, TCF
announced an agreement to provide
inventory financing to the dealers of
Bombardier Recreational Products, Inc.
(BRP) in the U.S. and Canada as well as
an acquisition of Gateway One Lending
& Finance, Inc. (Gateway One), an
indirect auto finance company head-
quartered in California. While these
new programs will result in additional
operational risks, I am confident that
with the extensive due diligence
completed, their experienced manage-
ment teams, and TCF’s successful track
record of integrating and operating
national specialty finance programs,
we will be able to manage these risks.
These high-quality, secured lending
programs will provide TCF with an
avenue for growth in 2012. These new
programs will be a great complement
to our current specialty finance
portfolio and accretive to our business,
all while staying true to our conserva-
tive lending philosophy.
Functionally Organized Management
Structure As a result of the evolution
taking place at TCF, it was necessary to
reevaluate the responsibilities of our
experienced executive management
team to more efficiently manage and
implement strategies moving forward.
Our new functionally organized
management structure will allow us to
better manage our four key initiatives:
1) Enterprise Risk Management,
2) Lending, 3) Funding and 4) Corporate
Development. This structure is well
suited to both protect and increase
shareholder value into the future.
• TCF continued its consistency of
profitability in 2011, earning $109.4
million, down 28 percent from 2010.
Diluted earnings per common share
was $.71. These results remain below
TCF’s historical performance while
we continue to operate in a difficult
economic and regulatory environment.
With the continued evolution of TCF
and a slowly improving economy, I
look forward to improving these results.
• TCF’s net interest margin was 3.99
percent for the full year of 2011, down
16 basis points from the full year of
2010. In 2011, we continued to take
actions to increase the asset sensitivity
of the balance sheet, such as changing
the mix of fixed- and variable-rate
loans, in anticipation of rising interest
rates. Despite recent guidance from the
Federal Reserve suggesting rates will
likely not rise until late 2014, rates will
eventually rise and we will be ready to
take advantage when they do. In the
meantime, with our increased focus on
national specialty finance programs, we
have laid the groundwork for significant
growth in our higher-yielding portfolios.
Overall, TCF’s net interest margin
continues to be strong when compared
to the Top 50 Banks.
032011 Annual Report
Diluted Earnings Per
Common Share
Dollars
1110090807
$2.13
Dollars
$.88
$.60
$1.08
$.71
Diluted EPS
Dividends Paid
Net Interest Margin
Percent
1110090807
3.94%
3.91%
3.87%
4.15%
3.99%