TCF Bank 2006 Annual Report Download - page 33

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2006 Form10-K 13
and civil money penalties, injunctive relief, imposition of
restrictions on mergers and acquisitions activity, and
restrictions on expansion activity. Private parties may also
have the ability to challenge an institution’s performance
under fair lending laws in private class action litigation.
USA Patriot and Bank Secrecy Acts The USA Patriot
and Bank Secrecy Acts require financial institutions to
develop programs to prevent financial institutions from
being used for money laundering and terrorist activities.
If such activities are detected, financial institutions are
obligated to file suspicious activity reports with the U.S.
Treasury Department’s Office of Financial Crimes Enforcement
Network. These rules require financial institutions to estab-
lish procedures for identifying and verifying the identity of
customers seeking to open new financial accounts. Failure
to comply with these regulations could result in fines or
sanctions. In recent years, several banking institutions
have received large fines for non-compliance with these
laws and regulations. TCF has developed policies and pro-
cedures designed to ensure compliance.
Disruption to Infrastructure The extended disruption
of vital infrastructure could negatively impact TCF’s business,
results of operations, and financial condition. TCF’s opera-
tions depend upon, among other things, its technological
and physical infrastructure, including its equipment and
facilities. Extended disruption of its vital infrastructure
by fire, power loss, natural disaster, telecommunications
failure, computer hacking and viruses, terrorist activity or
the domestic and foreign response to such activity, or other
events outside of TCF’s control, could have a material
adverse impact either on the financial services industry as
a whole, or on TCF’s business, results of operations, and
financial condition.
Estimates and Assumptions TCF’s consolidated finan-
cial statements conform with generally accepted accounting
principles, which require management to make estimates
and assumptions that affect amounts reported in the con-
solidated financial statements. These estimates are based
on information available to management at the time the
estimates are made. Actual results could differ from those
estimates. For further information relating to critical
accounting estimates, see “Management’s Discussion and
Analysis of Financial Condition and Results of Operations –
Summary of Critical Accounting Estimates.”
Item 1B. Unresolved
Staff Comments
None.
Item 2. Properties
Offices At December 31, 2006, TCF owned the buildings
and land for 139 of its bank branch offices, owned the
buildings but leased the land for 14 of its bank branch
offices and leased or licensed the remaining 300 bank
branch offices, all of which are well maintained. The prop-
erties related to the bank branch offices owned by TCF
had a depreciated cost of approximately $230.8 million at
December 31, 2006. At December 31, 2006, the aggregate
net book value of leasehold improvements associated
with leased bank branch office facilities was $29.4 million.
In addition to the above-referenced branch offices, TCF
owned and leased other facilities with an aggregate net
book value of $41.2 million at December 31, 2006. For more
information on premises and equipment, see Note 7 of
Notes to Consolidated Financial Statements.
Item 3. Legal Proceedings
From time to time, TCF is a party to legal proceedings arising
out of its lending, leasing and deposit operations. TCF is and
expects to become engaged in a number of foreclosure pro-
ceedings and other collection actions as part of its lending
and leasing collection activities. From time to time, borrow-
ers and other customers, or employees or former employees
have also brought actions against TCF, in some cases claim-
ing substantial amounts of damages. Financial services
companies are subject to the risk of class action litigation,
and TCF has had such actions brought against it from time
to time. Litigation is often unpredictable and the actual
results of litigation cannot be determined with certainty.
Item 4. Submission of Matters
to a Vote of Security Holders
None.