TCF Bank 2007 Annual Report Download

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07
TCF® The Convenience Franchise TCF Financial Corporation 2007 Annual Report
Our goal is to be the
most convenient bank
in the markets we serve.

Table of contents

  • Page 1
    Our goal is to be the most convenient bank in the markets we serve. 07 TCF ® The Convenience Franchise TCF Financial Corporation 2007 Annual Report

  • Page 2
    ... 10.6 2.0 4.3 (5.8) 8.9 Operating Results: Net interest income Provision for credit losses Net interest income after provision for credit losses Non-interest income: Fees and other revenue Gains on sales of securities available for sale Gains on sales of branches and real estate Total non-interest...

  • Page 3
    ..., from the previous year. • TCF's return on average assets was 1.76 percent and As stockholders, you should be aware of the risky activities in which TCF has not participated. These activities have caused the depressed housing market and related credit crunch. TCF does not have: • Subprime...

  • Page 4
    ... from higher home equity loan charge-offs, primarily in Minnesota and Michigan. The industry subprime lending crisis led to record foreclosures and an oversupply of homes held for sale. This, in turn, led to lower home values and increased credit losses for TCF. Our commercial loan and leasing...

  • Page 5
    ...The wisdom of TCF's secured lending philosophy has helped to weather the recent credit storms. 4. Fee Income Fees and service charges increased 2.9 percent in 2007. A concentrated effort was made to manage this area well in 2007. Checking account customers continued to change their banking behavior...

  • Page 6
    ..., in TCF's Power Asset lending operations continued to generate strong growth. Power Assets totaled $11.8 billion at the end of 2007 and average Power Assets $2,175 12/03 12/04 12/05 12/06 12/07 $1,162 $1,389 increased 9.4 percent over the prior year. $1,899 Consumer home equity loans grew 10...

  • Page 7
    ...a great opportunity for new business in our campus banking division. 8. Other Asset Sale Gains In 2007, TCF sold its remaining out-state Michigan branches and $241 million in deposits for an 11.5 percent premium plus a related gain on the sale of branch real estate. The total gain was $31.2 million...

  • Page 8
    ... reï¬,ect the slower housing markets. We also consolidated our retail branch backroom functions and outsourced our investment and insurance backroom operations. TCF froze its pension plan in 2006 and in 2007 converted TCF's company-funded long-term In the fourth quarter of 2007, Visa completed its...

  • Page 9
    ... the closing of certain previous years' tax returns, changes in state tax laws, and positive developments in income tax audits. In 2008, we are refocusing our retail banking efforts to improve the quality of our deposit accounts and grow deposit balances. Active checking account customers produce...

  • Page 10
    ... to grow deposit accounts, deposit balances and consumer loans. TCF also plans to open 10 new branches in 2008, three of which are scheduled to open in our new separately chartered Arizona Bank. Arizona's prospects are strong and remain an excellent growth market for TCF. The Visa payment system is...

  • Page 11
    ... senior management and board of directors own over 10 million shares, or eight percent of TCF stock. Eighty-five percent of our match-eligible employees participate in TCF's Employees Stock Purchase Plan, which at year-end held over 7.2 million shares. We are operating in one of the toughest banking...

  • Page 12
    ...underlying banking philosophy was written in 1989 and continues to guide our business strategies today, withstanding even the recent volatility in the financial services sector resulting from the housing slowdown and deteriorating credit markets. At TCF, we plan for long-term growth and profits with...

  • Page 13
    ... detail into financial software applications. In 2007, TCF began offering a merchant payment processing service via a third party to enhance the efficiency of our business banking customers. TCF's convenient products and services help small business owners manage their businesses more effectively...

  • Page 14
    ... base. Our extended branch network offers longer banking hours, assorted products and services, and convenience technology to serve our valued customers. In 2007, TCF grew Power Assets by $1.1 billion, or 10 percent. TCF tightened its credit standards in consumer home equity lending as a result of...

  • Page 15
    ... bank-owned equipment finance/leasing company in the U.S. and we expect continued growth from this business. TCF utilizes conservative accounting and financial reporting principles that accurately and honestly report our financial condition and results of operations. We believe good accounting...

  • Page 16
    ...development initiatives, customer relations, and community involvement. Managers are incented to achieve these goals. A strong management team is needed to truly operate as a retail business offering convenient services, innovative products and good service. One of TCF's most important assets is its...

  • Page 17
    ... teams are responsible for business development, customer relations and community involvement within their bank. TCF also believes functional product line management benefits from a centralized approach. Centralized functional management, with support and direction from specific bank presidents...

  • Page 18
    ... organizations through volunteer time, counsel, board representation and grant making, as well as supporting key projects through financial contributions. Our TCF Foundation believes that all children should have the right to good education. Since 1987, TCF has successfully worked with inner-city...

  • Page 19
    ...200 Lake Street East, Mail Code EX0-03-A, Wayzata, Minnesota 55391-1693 (Address of principal executive offices and zip code) Registrant's telephone number, including area code: 952-745-2760 Securities registered pursuant to Section 12(b) of the Act: Common Stock (par value $.01 per share) New York...

  • Page 20
    ...Item 14. Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accounting Fees and Services 79 80...

  • Page 21
    ... in Minnesota, Illinois, Michigan, Colorado, Wisconsin and Indiana. TCF National Bank Arizona operates bank branches in Arizona. TCF's primary focus is on the delivery of retail and commercial banking products in markets served by TCF Bank. TCF's products, such as its commercial equipment loans and...

  • Page 22
    .... TCF's consumer lending origination activities primarily consist of home equity real estate secured lending. They also include loans secured by personal property and to a limited extent, unsecured personal loans. Consumer loans may be made on a revolving line of credit or fixed-term basis. TCF does...

  • Page 23
    ..., money market conditions and other factors. Consumer, small business and commercial deposits are attracted principally from within TCF's primary market areas through the offering of a broad selection of deposit instruments including consumer, small business and commercial demand deposit accounts...

  • Page 24
    ... rate, single premium tax-deferred annuities, mutual funds, life insurance and broker-assisted securities. Real Estate Investment Trust TCF has a Real Estate Investment Trust ("REIT") and a related foreign operating company ("FOC") that acquire, hold and manage real estate loans and other assets...

  • Page 25
    ... or other capital distributions, limitations on growth or restrictions on activities. Undercapitalized banks must develop a capital restoration plan and the parent financial holding company is required to guarantee compliance with the plan. TCF Financial and TCF Bank are "well-capitalized" under...

  • Page 26
    ... to establish a one-time historical assessment credit that provides banks a credit that can be used to offset insurance assessments in 2007 and 2008. This one-time historical assessment credit was established to benefit banks that had funded deposit 6 | TCF Financial Corporation and Subsidiaries

  • Page 27
    ...Funds Availability Act and Regulation CC, and the Truth-in-Savings Act and Regulation DD. TCF is also subject to laws and regulations that may impose liability on lenders and owners for clean-up costs and other costs stemming from hazardous waste located on property securing real estate loans. 2007...

  • Page 28
    ... at TCF Financial Corporation, 200 Lake Street East, Mail Code EX0-03-A, Wayzata, MN 55391-1693. Item 1A. Risk Factors Enterprise Risk Management In the normal course of business, TCF is exposed to various risks. Management balances the Company's strategic goals, including revenue and profitability...

  • Page 29
    ... of these policies and procedures. Customers are evaluated as part of the initial underwriting processes and through periodic reviews. For consumer loans and small business banking loans, credit scoring models are used to help determine eligibility for credit and terms of credit. These models...

  • Page 30
    ... reviews market conditions for issuing debt securities to wholesale investors. Key liquidity ratios and the amount available from alternative funding sources are reported to ALCO on a monthly basis. TCF maintains diverse and reliable sources of funding. They include federal funds lines totaling...

  • Page 31
    ... other financial institutions could result in higher numbers of closed accounts and increased account acquisition costs. TCF actively monitors customer behavior and adjusts policies and marketing efforts accordingly to attract new and retain existing checking account customers. New Branch Expansion...

  • Page 32
    ... if enacted, could limit interest rates or loan, deposit or other fees and service charges. For example, recently enacted federal legislation will reduce interest subsidies and other benefits available to financial institutions that make education loans. Financial institutions have increasingly been...

  • Page 33
    ... "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, 2007, TCF owned the buildings and land for 134 of its bank branch offices, owned...

  • Page 34
    ... at the time, including TCF's earnings, financial condition and capital requirements, the cash available to pay such dividends (derived mainly from dividends and distributions from TCF Bank), as well as regulatory and contractual limitations and such other factors as the Board of Directors may deem...

  • Page 35
    ... 2007 TCF Peer Group due to merger and acquisition activity or changes in asset size. Those 10 companies are: Mercantile Bankshares Corporation; W Holding Company, Inc.(September 30, 2007 data not available); Sky Financial Group, Inc.; Fremont General Corporation; Investors Financial Services Corp...

  • Page 36
    ... and leases excluding residential real estate loans Securities available for sale Residential real estate loans Subtotal Total assets Checking, savings and money market deposits Certificates of deposit Total deposits Borrowings Stockholders' equity Book value per common share Key Ratios and Other...

  • Page 37
    .... TCF's largest core lending business is its consumer home equity loan operation, which offers fixed- and variable-rate loans and lines of credit secured by residential real estate properties. Commercial loans are generally made on local properties or to local customers. The leasing and equipment...

  • Page 38
    ... TCF's results of operations. A key driver of non-interest income is its number of deposit accounts and the related transaction activity. Increasing fee and service charge revenues has been challenging as a result of slower growth in deposit accounts and changing customer behaviors. See "Management...

  • Page 39
    ... fees and service charges related to the Michigan sold branches. Card revenues were $98.9 million for 2007, up 7.4% from $92.1 million in 2006. This increase was primarily attributable to an increased sales volume as a result of increases in transactions per account and the number of active accounts...

  • Page 40
    ..., 2007 Year Ended December 31, 2006 Change (Dollars in thousands) Assets: Investments Securities available for sale (2) Education loans held for sale Loans and leases: Consumer home equity: Fixed-rate Variable-rate Consumer - other Total consumer home equity and other Commercial real estate: Fixed...

  • Page 41
    ...2006 Year Ended December 31, 2005 Change Average (Dollars in thousands) Assets: Investments Securities available for sale (2) Education loans held for sale Loans and leases: Consumer home equity: Fixed-rate Variable-rate Consumer - other Total consumer home equity and other Commercial real estate...

  • Page 42
    ... $ 4,599 Securities available for sale 10,336 Education loans held for sale (4,485) Loans and leases: Consumer home equity: Fixed-rate 57,947 Variable-rate (17,033) Consumer - other 682 Commercial real estate: Fixed- and adjustable-rate 7,183 Variable-rate (8,665) Commercial business: Fixed- and...

  • Page 43
    .... Year Ended December 31, (Dollars in thousands) Fees and service charges Card revenue ATM revenue Investments and insurance revenue Subtotal Leasing and equipment finance Other Fees and other revenue Gains on sales of securities available for sale Gains on sales of branches and real estate Losses...

  • Page 44
    ... fee free checking products and changes in customer ATM usage behavior. The following table sets forth information about TCF's card business. (Dollars in thousands) Average number of checking accounts with a TCF card Average active card users Average number of transactions per card per month Sales...

  • Page 45
    ... sales of education loans Mortgage banking Other Total other earnings N.M. Not Meaningful. 2007 $2,011 - 6,259 $8,270 2006 $ 7,224 4,734 9,609 $21,567 2005 $ 2,078 5,578 5,088 $12,744 2004 $ 7,789 12,960 1,879 $22,628 2003 $ 3,092 12,719 3,146 $18,957 Compound Annual Growth Rate 1-Year 5-Year...

  • Page 46
    ... ("REIT") and a related foreign operating company ("FOC") that acquire, hold and manage real estate loans and other assets. These companies are consolidated with TCF Bank and are included in the consolidated financial statements of TCF Financial Corporation. The REIT and related companies must meet...

  • Page 47
    ... offsets the decline in residential real estate loans. TCF's securities available for sale portfolio primarily included fixed-rate mortgage-backed securities. Net unrealized pre-tax losses on securities available for sale totaled $16.4 million at December 31, 2007, compared with net unrealized pre...

  • Page 48
    ... and Equipment Finance(2) $ 74,024 73,303 89,152 39,497 34,909 270,003 135,750 132,504 87,298 94,449 83,833 35,331 954,290 $2,104,343 Geographic Distribution: Minnesota Illinois Michigan Wisconsin Colorado California Florida Texas Arizona New York Ohio Indiana Other Total Residential Real Estate...

  • Page 49
    ...business and commercial real estate lending activity generally to borrowers located in its primary markets. With a focus on secured lending, approximately 98% of TCF's commercial real estate and commercial business loans were secured either by properties or other business assets at December 31, 2007...

  • Page 50
    ... $2,390,653 Number of Loans 437 591 270 274 39 97 16 253 1,977 Leasing and Equipment Finance The following tables summarize TCF's leasing and equipment finance portfolio by marketing segment and by equipment type, excluding operating leases. At December 31, (Dollars in thousands) 2007 Over 30-Day...

  • Page 51
    ...amortization of loan balances and loan prepayments. Management expects that the residential loan portfolio will continue to decline, which will provide funding for anticipated growth in other loan, lease or investment categories. At December 31, 2007, TCF's residential real estate loan portfolio was...

  • Page 52
    ... of making comparisons to other banks. Most of TCF's non-performing assets and past due loans and leases are secured by real estate. Given the nature of these assets and the related mortgage foreclosure, property sale and, if applicable, mortgage insurance claims processes, it can take 18 months or...

  • Page 53
    ... mortgage lien Junior lien Total home equity Consumer other Total consumer Commercial real estate Commercial business Leasing and equipment finance Residential real estate Total recoveries Net charge-offs Provision charged to operations Acquired allowance Balance at end of year 2007 $ 58,543 Year...

  • Page 54
    ...) 2007 2006 At December 31, 2005 2004 2003 Non-accrual loans and leases: Consumer home equity First mortgage lien Junior lien Total home equity Consumer other Total consumer Commercial real estate Commercial business Total commercial Leasing and equipment finance Residential real estate Total...

  • Page 55
    ...64 .47 1.61 .63 (Dollars in thousands) Consumer home equity First mortgage lien Junior lien Total home equity Consumer other Total consumer Commercial real estate Commercial business Total commercial Leasing and equipment finance Residential real estate Total Potential Problem Loans and Leases In...

  • Page 56
    ... for TCF Financial Corporation (parent company only) include cash dividends from TCF National Bank, issuance of debt and equity securities and borrowings under a $80 million line of credit. TCF Bank's ability to pay dividends or make other capital distributions to TCF is restricted by regulation and...

  • Page 57
    ...Michigan branches, including the related deposit accounts. In order to improve the customer experience and enhance deposit and loan growth, TCF relocated six traditional branches to improved locations and facilities, remodeled one traditional branch and 14 supermarket branches in 2007. In 2008, TCF...

  • Page 58
    ...and commercial real estate. TCF is a member of Visa USA, Inc. (Visa USA) for issuance and processing of its card transactions. On October 3, 2007, Visa, Inc. (Visa) completed a restructuring including Visa USA in preparation for its planned initial public offering (IPO). As a member of Visa, TCF has...

  • Page 59
    ...105.3 million and the payment of $124.5 million in dividends on common stock. At December 31, 2007, TCF had 5.4 million shares remaining in stock repurchase programs authorized by its Board of Directors. For the year ended December 31, 2007, average total equity to average assets was 6.82%, compared...

  • Page 60
    ... consumer home equity and commercial real estate loan net charge-offs. Total non-interest income in the fourth quarter of 2007 was $138.9 million, up $20 million, or 16.9 percent, from the fourth quarter of 2006, primarily due to gains on sales of securities available for sale. Fees and service...

  • Page 61
    ... actions; changes in credit and other risks posed by TCF's loan, lease, investment, and securities available for sale portfolios, including declines in commercial or residential real estate values or changes in allowance for loan and lease losses methodology dictated by new market conditions or...

  • Page 62
    ..., TCF estimates that an immediate 100 basis point increase in current mortgage loan interest rates would reduce prepayments on the fixedrate mortgage-backed securities, residential real estate loans and consumer loans at December 31, 2007, by approximately $257 million, or 35.4%, in the first year...

  • Page 63
    ... sale Securities available for sale (1) Real estate loans (1) Leasing and equipment finance (1) Commercial loans (1) Consumer loans (1) Investments Total Interest-bearing liabilities: Checking deposits (2) Savings deposits (2) Money market deposits (2) Certificates of deposit Short-term borrowings...

  • Page 64
    ... statements of financial condition of TCF Financial Corporation and subsidiaries (the Company) as of December 31, 2007 and 2006, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2007. These...

  • Page 65
    ... 2007 2006 $ 358,174 148,267 1,963,681 156,135 $ 348,980 170,129 1,816,126 144,574 Assets Cash and due from banks Investments Securities available for sale Education loans held for sale Loans and leases: Consumer home equity and other Commercial real estate Commercial business Leasing and equipment...

  • Page 66
    ... and service charges Card revenue ATM revenue Investments and insurance revenue Subtotal Leasing and equipment finance Other Fees and other revenue Gains on sales of securities available for sale Gains on sales of branches and real estate Total non-interest income Non-interest expense: Compensation...

  • Page 67
    ... Cancellation of shares for tax withholding Amortization of stock compensation Exercise of stock options, 87,083 shares Stock compensation tax benefits Change in shares held in trust for deferred compensation plans, at cost Balance, December 31, 2007 184,939,094 114,004) (438,897) - - - - 184,386...

  • Page 68
    ...) in federal funds sold Purchases of Federal Home Loan Bank stock Proceeds from redemptions of Federal Home Loan Bank stock Proceeds from sales of real estate owned Purchases of premises and equipment Proceeds from sales of premises and equipment Proceeds from sale of mortgage servicing rights Other...

  • Page 69
    ...financial holding company engaged primarily in community banking and leasing and equipment finance through its primary subsidiaries, TCF National Bank and TCF National Bank Arizona, collectively ("TCF Bank"). TCF Bank owns leasing and equipment finance, investment and insurance sales and Real Estate...

  • Page 70
    ... as operating leases. Operating leases represent a rental agreement where ownership of the underlying equipment resides with the lessor. Such leased equipment and related initial direct costs are included in other assets on the balance sheet and are depreciated on a straight-line basis over the term...

  • Page 71
    ...and costs on home equity lines of credit are amortized to service fee income. Loans and leases, including loans or leases that are considered to be impaired, are reviewed regularly by management and are placed on non-accrual status when the collection of interest or principal is 90 days or more past...

  • Page 72
    ... days from the date of overdraft. Uncollectible deposit fees are reversed against fees and service charges and a related reserve for uncollectible deposit fees is maintained in other liabilities. Other deposit account losses are reported in other non-interest expense. 52 | TCF Financial Corporation...

  • Page 73
    ...be adversely impacted by the financial operations of the FHLBs and actions by the Federal Housing Board's Office of Supervision. The carrying values and yields on investments at December 31, 2007, by contractual maturity, are shown below. (Dollars in thousands) Federal Home Loan Bank stock, at cost...

  • Page 74
    ..., aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position. Unrealized losses on securities available for sale are due to changes in interest rates and not due to credit quality issues. TCF has the ability and intent to hold...

  • Page 75
    ... Other Total consumer home equity and other Commercial: Commercial real estate: Permanent Construction and development Total commercial real estate Commercial business Total commercial Leasing and equipment finance: (1) Equipment finance loans Lease financings: Direct financing leases Sales-type...

  • Page 76
    ... Balance at beginning of year Provision for credit losses Charge-offs Recoveries Net charge-offs Balance at end of year Net charge-offs as a percentage of average loans and leases Allowance for loan and lease losses as a percentage of total loans and leases at year end Year Ended December 31, 2007...

  • Page 77
    ... related to the banking segment Goodwill related to the leasing segment Total $141,245 11,354 $152,599 $141,245 11,354 $152,599 Amortization expense for intangible assets was $1 million, $2.9 million and $11.8 million for the years ended December 31, 2007, 2006 and 2005, respectively. 2007 Form...

  • Page 78
    ...interest bearing Interest bearing Total checking Savings Money market Total checking, savings, and money market Certificates of deposit Total deposits During the first quarter of 2007, TCF sold 10 out-state Michigan branches with $241.4 million in deposits. Certificates of deposit had the following...

  • Page 79
    ...31, 2007, all of the securities sold under short-term repurchase agreements provided for the repurchase of identical securities and were collateralized by mortgage-backed securities having a fair value of $44.6 million. TCF Financial (parent company) has an $80 million unsecured line of credit that...

  • Page 80
    ... and securities sold under repurchase agreements Subtotal Subordinated bank notes Subtotal Discounted lease rentals Subtotal Other borrowings Subtotal Total long-term borrowings At December 31, 2007, TCF has pledged residential real estate loans, consumer loans, commercial real estate loans and...

  • Page 81
    ... on TCF's financial statements. A reconciliation of the change in the gross amount, before related tax effects, of unrecognized tax benefits from January 1, 2007 to December 31, 2007 is as follows: (In thousands) Balance at January 1, 2007 Increases for tax positions related to the current year...

  • Page 82
    ... plans Allowance for loan and lease losses Securities available for sale Net operating losses and credits Valuation allowance Other Total deferred tax assets Deferred tax liabilities: Lease financing Loan fees and discounts Premises and equipment Prepaid expenses Pension and postretirement benefits...

  • Page 83
    ... 31, 2007, TCF, TCF National Bank and TCF National Bank Arizona exceeded their regulatory capital requirements and are considered "well-capitalized" under guidelines established by the FRB and the OCC pursuant to the Federal Deposit Insurance Corporation Improvement Act of 1991. 2007 Form 10...

  • Page 84
    ... in 2011 and the remaining 50% exercisable in 2012. TCF also issued under the Program 100,000 shares of performance-based restricted stock, with 50% of the award vesting in each of 2008 and 2009, provided certain return on equity goals and service conditions are met. The following table reflects...

  • Page 85
    ...vesting schedule based on an employee's years of vesting service with full vesting after five years. Employees have the opportunity to diversify and invest their vested account balance in various mutual funds or TCF common stock. Effective January 1, 2007, the Company's matching contributions can be...

  • Page 86
    ...at end of year Change in fair value of plan assets: Fair value of plan assets at beginning of year Actual return on plan assets Benefits paid TCF contributions Fair value of plan assets at end of year Funded status plans at end of year Amounts recognized in Statements of Financial Condition: Prepaid...

  • Page 87
    ...long-term rate of return on plan assets and the rate of increase in future compensation used to determine the net benefit cost were as follows. Pension Plan Year Ended December 31, 2007 2006 2005 5.5% 5.25/5.5%(1) 6.0% 8.50 N.A. 8.75 4.0 8.75 4.0 Postretirement Plan Year Ended December 31, 2007 2006...

  • Page 88
    long term annual returns of 8.5%, net of administrative expenses, on plan assets over complete market cycles. A 1% difference in the expected return on plan assets would result in a $589 thousand change in net periodic pension expense. The discount rate used to determine TCF's pension and ...

  • Page 89
    ... issued by TCF guaranteeing the performance of a customer to a third-party. These conditional commitments expire in various years through the year 2018. Collateral held primarily consists of commercial real estate mortgages. Since the conditions under which TCF is required to fund these commitments...

  • Page 90
    ... equity lines of credit (1) Total consumer home equity and other Commercial real estate Commercial business Equipment finance loans Residential real estate Allowance for loan losses (2) Total financial instrument assets Financial instrument liabilities: Checking, savings and money market deposits...

  • Page 91
    ... securities available for sale Reclassification adjustment for securities gains included in net income Recognized pension and postretirement actuarial losses and transition obligation Income tax (expense) benefit Total other comprehensive income (loss) Comprehensive income 2007 $266,808 Year Ended...

  • Page 92
    ... financial services to customers: deposits and investments products, commercial banking, consumer lending and treasury services. Management of TCF's banking operations is organized by state. The separate state operations have been aggregated for purposes of segment disclosures. Leasing and equipment...

  • Page 93
    ... TCF's parent company, corporate functions and mortgage banking. Leasing and Equipment Finance Eliminations and Reclassifications (In thousands) Banking Other Consolidated At or For the Year Ended December 31, 2007: Revenues from external customers: Interest income Non-interest income Total...

  • Page 94
    ... Dividends from TCF National Bank Other non-interest income: Affiliate service fees Other Total other non-interest income Non-interest expense: Compensation and employee benefits Occupancy and equipment Other Total non-interest expense Income before income tax benefit and equity in undistributed...

  • Page 95
    ...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 proceedings and other collection actions as part of its lending and leasing collection activities. From time to time, borrowers and other customers...

  • Page 96
    ...real estate loans Securities available for sale Residential real estate loans Subtotal Goodwill Total assets Checking, savings and money market deposits Certificates of deposit Total deposits Short-term borrowings Long-term borrowings Stockholders' equity Dec. 31, 2007 Sept. 30, 2007 June 30, 2007...

  • Page 97
    ... issues and instances of fraud, if any, will be detected. Lynn A. Nagorske Chief Executive Officer and Director Thomas F. Jasper Executive Vice President and Chief Financial Officer David M. Stautz Senior Vice President, Controller and Assistant Treasurer February 14, 2008 2007 Form 10-K | 77

  • Page 98
    ... statements of financial condition of TCF Financial Corporation and subsidiaries as of December 31, 2007 and 2006, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2007, and our report dated...

  • Page 99
    ...in March 2003. This code of ethics is available for review at the Company's website at www.tcfbank.com under the "Corporate Governance" section. Any changes to or waivers of violations of the code of ethics for senior financial management will be posted to the Company's website. 2007 Form 10-K | 79

  • Page 100
    ... in 2007; Outstanding Equity Awards at Fiscal Year-End; Option Exercises and Stock Vested in 2007; Pension Benefits; Nonqualified Deferred Compensation and Potential Payments Upon Termination or Change in Control. Item 13. Certain Relationships and Related Transactions, and Director Independence...

  • Page 101
    ... of this report: Description Page Selected Financial Data Consolidated Statements of Financial Condition at December 31, 2007 and 2006 Consolidated Statements of Income for each of the years in the three-year period ended December 31, 2007 Consolidated Statements of Stockholders' Equity for each...

  • Page 102
    ... duly authorized. TCF Financial Corporation Registrant By /s/ Lynn A. Nagorske Lynn A. Nagorske Chief Executive Officer and Director Dated: February 14, 2008 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of...

  • Page 103
    ... 10(a) to TCF Financial Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 1987, No. 0-16431]; Fifth Amendment to the Plan [incorporated by reference to Exhibit 10(a) to TCF Financial Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 1989...

  • Page 104
    ...Summary of Stock Award Program for Consumer Lending and Business Banker Divisions [incorporated by reference to Exhibit 10(b)-3 to TCF Financial Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 2005] Form of Year 2006 Executive Stock Grant Award Agreement dated January...

  • Page 105
    ... 1, 1997 [incorporated by reference to Exhibit 10(e) to TCF Financial Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 1996] Agreement between William A. Cooper and TCF Financial Corporation and TCF National Bank dated January 24, 2005 [incorporated by reference to...

  • Page 106
    ... Form of Change in Control and Non-Solicitation Agreement as executed by certain Senior Officers effective January 1, 2008 [incorporated by reference to Exhibit 10(g)-7 to TCF Financial Corporation's Current Report on Form 8-K filed October 19, 2007] Supplemental Employee Retirement Plan - ESPP Plan...

  • Page 107
    ... filed April 26, 2007]; 2008 Management Incentive Plan - Leasing Executive Agreement [incorporated by reference to Exhibit 10(o)-1 of TCF Financial Corporation's Current Report on Form 8-K filed January 25, 2008] TCF Performance-Based Compensation Policy for Covered Executive Officers as amended and...

  • Page 108
    ... 30, 2003] TCF Directors Retirement Plan dated October 24, 1995 [incorporated by reference to Exhibit 10(y) to TCF Financial Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 1995] Supplemental Employee Retirement Plan for TCF Cash Balance Pension Plan, as amended and...

  • Page 109
    ...Jasper TCF Equipment Finance, Inc. President and Chief Executive Officer Craig R. Dahl Executive Vice President and Chief Information Officer Earl D. Stratton TCF Bank Minnesota President Mark L. Jeter Executive Vice President and Chief Marketing Officer Candace H. Lex Executive Vice Presidents...

  • Page 110
    Board of Directors William A. Cooper 5 Peter L. Scherer 4 Offices Executive Offices TCF Financial Corporation 200 Lake Street East Wayzata, MN 55391-1693 (952) 745-2760 Traditional Branches Metro Detroit Area (51) Chairman of the Board Lynn A. Nagorske 5 Chief Executive Officer William F. ...

  • Page 111
    ...to investor information, news releases, investor presentations, access to TCF's quarterly conference calls, TCF's annual report, and SEC filings. Information may also be obtained, free of charge, from: TCF Financial Corporation Corporate Communications 200 Lake Street East EX0-01-C Wayzata, MN 55391...

  • Page 112
    Credit Ratings Last Review Last Rating Action September 2007 Moody's TCF National Bank: Outlook Stable Issuer A1 Long-term deposits A1 Short-term deposits Prime-1 Bank financial strength BLast Review Last Rating Action October 2007 Standard & Poor's Outlook Stable TCF Financial Corporation: Long-...

  • Page 113
    ... deposit side of the 2007 Annual Report | 93 bank. We accumulate a large number of low cost accounts through convenient services and products targeted to a broad range of customers. As a result of the profits we earn from the deposit business, we can minimize credit risk on the asset side. • TCF...

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    TCF Financial Corporation 2007 Annual Report TCF Financial Corporation 200 Lake Street East Wayzata, MN 55391-1693 www.tcfbank.com 002CS-60875 TCFIR9338