TCF Bank 2005 Annual Report Download - page 24

4 TCF Financial Corporation and Subsidiaries
of the counterparty is important in establishing that the overcol-
lateralized amount of securities delivered by TCF is protected
and TCF enters into repurchase agreements only with institutions
with a satisfactory credit history.
During 2005, TCF Bank issued $50 million of subordinated notes
due in 2015. During 2004, TCF Bank issued $75 million of subordi-
nated notes due in 2014. In February 2006, TCF Bank issued $75
million of subordinated notes due in 2016. These notes qualify as
Tier 2 or supplemental capital for regulatory purposes, subject to
certain limitations.
Information concerning TCF’s FHLB advances, repurchase
agreements, subordinated notes and other borrowings is set
forth in “Management’s Discussion and Analysis of Financial
Condition and Results of Operations — Consolidated Financial
Condition Analysis – Borrowings” and in Notes 11 and 12 of
Notes to Consolidated Financial Statements.
Other Information
Activities of Subsidiaries of TCF Financial Corporation
TCF’s business operations include those conducted by direct and
indirect subsidiaries of TCF Financial, all of which are consolidated
for purposes of preparing TCF’s consolidated financial statements.
TCF does not utilize unconsolidated subsidiaries or special purpose
entities to provide off-balance sheet borrowings. TCF’s only direct
subsidiary is TCF Bank. Subsidiaries of TCF Bank are principally
engaged in the following activities.
Leasing and Equipment Finance See “Item 1. Business-
Lending Activities” for information on TCF’s leasing and equipment
finance businesses.
Insurance and Investment Services TCF Financial
Insurance Agency, Inc. is an insurance agency engaging in the
sale of fixed-rate, single premium tax-deferred annuities and
life insurance products. TCF Investments, Inc. engages in the sale
of non-proprietary mutual fund products; in the sale of variable-
rate, single premium tax-deferred annuities; and online and
broker-assisted securities sales activity.
Mortgage Servicing TCF Mortgage Corporation services a
portfolio of residential mortgage loans for third-party investors.
Real Estate Investment Trust TCF has a Real Estate
Investment Trust (“REIT”) and a related foreign operating company
(“FOC”) that acquire, hold and manage real estate loans and
other assets. These companies are consolidated with TCF Bank and
are therefore included in the consolidated financial statements of
TCF Financial Corporation. TCF’s FOC operates under laws in certain
states (including Minnesota and Illinois) that allow deductions for
income derived from FOCs.
Competition TCF competes with a number of depository insti-
tutions and financial service providers in its market areas, and
experiences significant competition in attracting and retaining
deposits and in lending funds. Direct competition for deposits
comes primarily from other commercial banks, investment banks,
credit unions and savings institutions. Additional significant
competition for deposits comes from institutions selling money
market mutual funds and corporate and government securities.
TCF competes for the origination of loans with commercial banks,
mortgage bankers, mortgage brokers, consumer and commercial
finance companies, credit unions, insurance companies and sav-
ings institutions. TCF also competes nationwide with other leasing
and equipment finance companies and commercial banks in the
financing of high-technology and other equipment. Expanded
use of the internet has increased potential competition affecting
TCF and its loan, lease and deposit products.
Employees As of December 31, 2005, TCF had 8,572 employees,
including 2,835 part-time employees. TCF provides its employees
with a comprehensive program of benefits, some of which are
provided on a contributory basis, including comprehensive
medical and dental plans, a 401(k) savings plan with a company
matching contribution, life insurance and short- and long-term
disability coverage.
Regulation
The banking industry is generally subject to extensive regulatory
oversight. TCF Financial, as a publicly held financial holding
company, and TCF Bank, as a national bank with deposits
insured by the Federal Deposit Insurance Corporation (“FDIC”),
are subject to a number of laws and regulations. Many of these
laws and regulations have undergone significant change in
recent years. These laws and regulations impose restrictions on
activities, minimum capital requirements, lending and deposit
restrictions and numerous other requirements. Future changes to
these laws and regulations, and other new financial services laws
and regulations, are likely and cannot be predicted with certainty.
TCF Financial’s primary regulator is the FRB and TCF Bank’s primary
regulator is the Office of the Comptroller of the Currency (“OCC”).