TCF Bank 2006 Annual Report Download - page 10

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The Yield Curve
We anticipate the strong headwinds from the inverted
yield curve to continue. We will still have risk in this
area in 2007.
Increased Competition
For a long time, TCF faced limited competition and
owned the “free checking” market. This is no longer
the case as our strategy has been widely copied and
we face intense competition in all aspects of our retail
banking model.
Credit Quality
Economic conditions are always a major risk for all
banks, including TCF. A weaker than anticipated
economy could adversely impact our results through
increased loan and lease charge-offs and higher loss
provisions. Our risk has increased somewhat in this
area due to the soft Michigan economy and a slowing
housing market.
Expense Control
As discussed previously, this remains a focus for 2007.
We intend to continue our efforts in this area.
Income Taxes
Legislative changes in current state and federal tax laws
could negatively impact TCF in the future.
New Products
We intend to introduce several new products in 2007.
The TCF Power CheckingSM product will give consumers
a new and significantly improved interest-bearing
product in between Totally Free Checking (zero interest)
and TCF® Premier Checking (high rate). We believe
we can increase TCF’s market share and grow balances
in this category. We are also working to launch a new
merchant rewards loyalty program mid year. This will
help differentiate TCF’s checking products from the
competition. There are several other new products on
the drawing board.
Regulatory Burden
Changes in industry regulations and the related com-
pliance burden continue to increase. The Bank Secrecy
Act is a good example of this burden. These burdens
increased in 2006 and will continue to grow in 2007.
We must comply with these regulations in a cost-
effective manner.
8TCF Financial Corporation and Subsidiaries
New Branch1 Deposits & Fees
Millions of Dollars
12/0612/0512/0412/0312/02
$980
$442
$238
$142
12/01
1Branches opened since January 1, 2001.
235% annual growth rate (’06 vs. ’05).
330% annual growth rate (’06 vs. ’05).
$24
$1,319
■ Fees & Other Revenue3
■ Total Deposits2
$0
$25
$50
$75
$100
$125