TCF Bank 2006 Annual Report Download - page 22

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strategy for generating additional non-interest income.
See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations – Consolidated Income
Statement and Analysis – Non-Interest Income” and
“Management’s Discussion and Analysis of Financial
Condition and Results of Operations – Forward-Looking
Information” for additional information.
Lending Activities
General TCF’s lending activities reflect its community
banking philosophy, emphasizing secured loans to individu-
als and businesses in its primary market areas in Minnesota,
Illinois, Michigan, Colorado, Wisconsin, Indiana and Arizona.
TCF is also engaged in leasing and equipment finance
activities nationwide. See “Management’s Discussion and
Analysis of Financial Condition and Results of Operations –
Consolidated Financial Condition Analysis – Loans and
Leases” and Note 5 of Notes to Consolidated Financial
Statements for additional information regarding TCF’s loan
and lease portfolios.
Consumer Lending TCF makes consumer loans for personal,
family or household purposes, such as home purchases,
debt consolidation, financing of home improvements,
automobiles, vacations and education. Consumer loans
totaled $5.9 billion at December 31, 2006, with $4.4 billion,
or 75%, having fixed interest rates and $1.5 billion, or 25%,
having variable interest rates tied to the prime rate.
TCF’s consumer lending activities are primarily home
equity real estate secured loans. They also include loans
secured by personal property and to a limited extent, unse-
cured personal loans. Consumer loans may be made on a
revolving line of credit or fixed-term basis.
Education Lending TCF originates education loans for
resale. TCF had $144.6 million of education loans held for sale
at December 31, 2006, compared with $229.8 million at
December 31, 2005. Due to legislative changes to student
loan programs in 2006, TCF accelerated the timing of certain
education loan sales. In the past, TCF generally sold the
education loans it originated just before the loans entered
repayment status. Beginning in the third quarter of 2006,
TCF began selling certain education loans once they were
fully disbursed. These loans are originated in accordance
with designated guarantor and U.S. Department of Education
guidelines and do not involve any independent credit
underwriting by TCF.
Commercial Real Estate Lending Commercial real
estate loans are loans originated by TCF that are secured
by commercial real estate including, to a lesser extent,
commercial real estate construction loans, generally to
borrowers based in its primary markets. At December 31,
2006, commercial real estate loans totaled $2.4 billion.
At December 31, 2006, variable- and adjustable-rate loans
represented 72% of commercial real estate loans outstand-
ing. At December 31, 2006, TCF’s commercial construction
and development loan portfolio totaled $188.7 million.
Commercial Business Lending Commercial business
loans are loans originated by TCF that are generally secured
by various types of business assets including inventory,
receivables, equipment, financial instruments and commer-
cial real estate. In limited cases, loans may be made on an
unsecured basis. Commercial business loans are used for a
variety of purposes including working capital and financing
the purchase of equipment.
TCF concentrates on originating commercial business
loans to middle-market companies with borrowing require-
ments of less than $25 million based in its primary markets.
Substantially all of TCF’s commercial business loans out-
standing at December 31, 2006, were to borrowers based in
its primary markets.
Leasing and Equipment Finance TCF provides a broad
range of comprehensive lease and equipment finance
products addressing the financing needs of diverse types
of small to large companies. At December 31, 2006, TCF’s
leasing and equipment finance portfolio (including operat-
ing leases) was $1.9 billion, consisting of $492.1 million of
loans and $1.4 billion of leases. TCF’s leasing and equipment
finance businesses, TCF Equipment Finance, Inc. (“TCF
Equipment Finance”) and Winthrop Resources Corporation
(“Winthrop Resources”), operate in all 50 states and have
equipment installations domestically and to a limited
extent in foreign countries. TCF Equipment Finance delivers
equipment finance solutions to small and mid-size compa-
nies in various industries. Winthrop Resources primarily
leases technology and data processing equipment to com-
panies nationwide.
2TCF Financial Corporation and Subsidiaries