TCF Bank 2007 Annual Report Download - page 22

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Non-interest income is a significant source of revenue
for TCF and an important factor in TCF’s results of operations.
Increasing fee and service charge revenue has been challeng-
ing as a result of slower growth in deposit accounts and
changing customer behavior. Providing a wide range of retail
banking services is an integral component of TCF’s business
philosophy and a major 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, automo-
biles, vacations and education.
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 not have any subprime lending programs or originate
2/28 adjustable-rate mortgages (ARM) or option ARM loans.
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.
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, 2007, 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. TCF’s leasing and equipment
finance businesses, TCF Equipment Finance, Inc. (“TCF
Equipment Finance”) and Winthrop Resources Corporation
(“Winthrop Resources”), finance equipment in all 50 states
and, to a limited extent, in foreign countries. TCF Equipment
Finance delivers equipment finance solutions to small and
mid-size companies in various industries. Winthrop Resources
focuses on providing customized, high technology lease
financing to meet the special needs of mid-size and large
companies and health care facilities that procure computers,
servers, telecommunication and other technology equipment.
TCF funds most of its leases internally, and consequently
retains the credit risk on such leases. TCF may arrange
financing of certain leases through non-recourse discounting
of lease rentals with various other financial institutions at
fixed interest rates.
Education Lending TCF originates education loans for
resale. TCF sells certain education loans once they are 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.
2 | TCF Financial Corporation and Subsidiaries