TCF Bank 2005 Annual Report Download - page 8

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6
conduct their banking has shifted toward
greater use of debit cards, ACH trans-
actions, Internet banking, etc., all
contributing to a significant reduction
in check volumes. We must continue to
innovate to stay ahead of this curve.
Economic conditions are always a major
risk for all banks including TCF. A weak
economy could result in a decline in home
values in our markets and adversely
impact our results. A bad economy can
result in increased loan and lease
charge-offs.
Industry regulatory issues and the related
compliance burden continue to increase.
The Bank Secrecy Act is a good example
of this burden. These burdens will continue
to grow in 2006.
We are also subject to the risks of new
regulations. Legal and tax law issues are
always a risk.
Another area to watch in 2006 is card
revenues. Major retailers are making big
efforts to reduce their card interchange
expenses through litigation with Visa or
through technological changes in how
customer card payments are processed.
The debit card is now an integral part of
the checking account and TCF has nearly
$80 million of card revenues at stake.
The success and viability of our super-
market partners are important to TCF. If
our partners sell or close their stores, we
are at risk; though over time, as we build
out our traditional branch system, this
risk is mitigated somewhat. We continue
to work closely with our partners to opti-
mize our businesses and to be aware of
and address any potential risks.
These risks are not new and we believe
we are prepared to address them in the
future. Our philosophy is to run a highly
profitable bank and minimize risk.
In Closing
A careful reading of this annual report will
tell you almost everything about our com-
pany. We try to keep our financial reporting
simple and our disclosures complete.
We continue to have a mutuality of inter-
est with our stockholders. Our senior
management and board of directors own
approximately 11 million shares, or 8.5
percent of TCF stock. Sixty-three percent
of our eligible employees participate in
TCF’s Employees Stock Purchase Plan,
which at year-end held over eight million
shares. Our stock plans for senior manage-
ment continue to be performance-based,
TCF Financial Corporation and Subsidiaries
“We have an experienced and disciplined management
team focused on producing superior returns.”