TCF Bank 2001 Annual Report Download - page 8

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6
DE NOVO BRANCH EXPANSION TCF believes in a de novo style
of expansion. While de novo expansion is unusual in
today’s banking environment, most successful retailers
such as Wal-Mart,
®Target,
®and our supermarket part-
ners, Cub®Foods and Jewel-Osco,
®grow through de
novo expansion. We opened 21 new supermarket
branches and 6 traditional branches in 2001. We have
opened 193 branches in the last four years, bringing
our overall branch network to 375. Many of these new
branches are now becoming profitable. The increasing
profits from past de novo expansion funds continued
expansion. What we really like about the de novo model
is that you can pick the places you want to go, determine
the pace that you want to expand and control the culture.
The cost of this expansion flows through the income
statement faster than the dilution created through
acquisition, but is ultimately more profitable. We
believe we can bring these branches to profitability
fast enough that de novo expansion is a better use of
our capital than paying the premiums of acquisition.
The internal rate of return on de novo expansion is
one of the “hurdle rates” we use to measure acquisi-
TCF CHECK CARD
With over 1.2 million
check cards issued,
TCF is the 13th
largest issuer of
VISA®check cards
in the United States.
The TCF Express
Card provides
our customers the
convenience of
having purchases
deducted directly
from their checking
accounts and is a
significant part of
fee income for TCF.