TCF Bank 2005 Annual Report Download - page 56

36 TCF Financial Corporation and Subsidiaries
Contractual Obligations and Commitments As disclosed in the Notes to Consolidated Financial Statements, TCF has certain obliga-
tions and commitments to make future payments under contracts. At December 31, 2005, the aggregate contractual obligations (excluding
bank deposits) and commitments are as follows:
(In thousands) Payments Due by Period
Less than 1-3 4-5 After 5
Contractual Obligations Total 1 Year Years Years Years
Total borrowings $2,983,136 $805,519 $229,292 $224,647 $1,723,678
Annual rental commitments under non-cancelable
operating leases 187,704 26,891 42,889 34,187 83,737
Campus marketing agreements 51,068 1,623 2,770 5,103 41,572
Construction contracts and land purchase commitments
for future branch sites 13,996 13,996–––
$3,235,904 $848,029 $274,951 $263,937 $1,848,987
(In thousands) Amount of Commitment – Expiration by Period
Less than 1-3 4-5 After 5
Commitments Total 1 Year Years Years Years
Commitments to lend:
Consumer home equity and other $1,750,738 $ 8,470 $ 15,239 $ 35,165 $1,691,864
Commercial 811,652 494,514 230,646 66,961 19,531
Leasing and equipment finance 74,418 74,418–––
Other 77,766 77,766 – – –
Total commitments to lend 2,714,574 655,168 245,885 102,126 1,711,395
Loans serviced with recourse 71,332 1,548 3,237 2,963 63,584
Standby letters of credit and guarantees on industrial
revenue bonds 100,892 76,436 5,735 18,071 650
$2,886,798 $733,152 $254,857 $123,160 $1,775,629
Commitments to lend are agreements to lend to a customer
provided there is no violation of any condition in the contract.
These commitments generally have fixed expiration dates or
other termination clauses and may require payment of a fee.
Since certain of the commitments are expected to expire without
being drawn upon, the total commitment amounts do not necessar-
ily represent future cash requirements. Collateral predominantly
consists of residential and commercial real estate.
Borrowings Borrowings totaled $3 billion at December 31, 2005,
down $121.5 million from December 31, 2004. The decrease was
primarily due to the overall increase in deposits exceeding the
growth in assets. During 2005, TCF Bank issued $50 million of
subordinated notes due in 2015. The notes bear interest at a fixed
rate of 5.00% for the first five years and will reprice quarterly
thereafter at the three-month LIBOR rate plus 1.56%. These notes
qualify as Tier 2 or supplemental capital for regulatory purposes,
subject to certain limitations. TCF Bank paid the proceeds from the
offering to TCF as a permanent capital distribution. See Notes 11
and 12 of Notes to Consolidated Financial Statements for detailed
information on TCF’s borrowings. The weighted-average rate on
borrowings increased to 4.49% at December 31, 2005, from 3.37%
at December 31, 2004 primarily due to the impact of rising short-
term interest rates. TCF does not utilize unconsolidated subsidiaries
or special purpose entities to provide off-balance sheet borrowings.
See Note 19 of Notes to Consolidated Financial Statements for
further information relating to off-balance sheet instruments.
TCF Financial (parent company only) has a $105 million line
of credit maturing in April 2006, which is unsecured and contains
certain covenants common to such agreements. TCF is not in default
with respect to any of its covenants under the credit agreement.
The interest rate on the line of credit is based on either the prime
rate or LIBOR. TCF has the option to select the interest rate index
and term for advances on the line of credit. The line of credit may
be used for appropriate corporate purposes. At December 31, 2005,
TCF had $16.5 million outstanding on this bank line of credit at
an average interest rate of 5.15%, compared with $14 million
outstanding at December 31, 2004 at an average interest rate
of 3.18%.