TCF Bank 2007 Annual Report Download - page 24

Other Information
Activities of Subsidiaries of TCF Financial
Corporation TCF’s business operations include those con-
ducted by direct and indirect subsidiaries of TCF Financial,
all of which are consolidated for purposes of preparing TCF’s
consolidated financial statements. TCF does not utilize
unconsolidated subsidiaries or special purpose entities to
provide off-balance sheet borrowings. TCF’s primary direct
subsidiaries are TCF National Bank and TCF National Bank
Arizona (collectively, “TCF Bank”). Subsidiaries of TCF Bank
are principally engaged in the following activities.
Leasing and Equipment Finance See “Item 1.
Business-Lending Activities” for information on TCF’s
leasing and equipment finance businesses.
Insurance and Investment Services TCF Investments
sells a variety of investment products to its retail banking
clients. These products include fixed and variable 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. 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 specific provisions of the Internal
Revenue Code (“IRC”) and state tax laws. If these companies
fail to meet any of the required provisions of federal and
state tax laws, TCF’s tax expense would increase significantly.
TCF’s FOC operates under income tax laws in certain states
(including Minnesota and Illinois) that recognize FOCs.
The taxation of REITs and FOCs is and has been the subject
of federal and state audits, litigation with state taxing
authorities and tax policy debates by various state legisla-
tures. Illinois passed legislation in 2007 that will reduce or
eliminate TCF’s REIT and FOC tax benefits in the future. Other
states may revise their tax laws applicable to REITs or FOCs
and such changes would increase TCF’s income tax expense.
Competition TCF competes with a number of depository
institutions and financial service providers in its market
areas, and experiences significant competition in attract-
ing and retaining deposits and in lending funds. Direct
competition for deposits comes primarily from retail banks,
commercial banks, savings institutions, credit unions and
investment banks. Additional significant competition
for deposits comes from institutions selling money market
mutual funds and corporate and government securities.
TCF competes for the origination of loans with commercial
banks, mortgage bankers, mortgage brokers, consumer and
commercial finance companies, credit unions, insurance
companies and savings institutions. TCF also competes
nationwide with other leasing and equipment finance com-
panies and commercial banks in the financing of equipment.
Expanded use of the Internet has increased competition
affecting TCF and its loan, lease and deposit products.
Employees As of December 31, 2007, TCF had 8,183
employees, including 2,755 part-time employees. TCF pro-
vides its employees with a comprehensive program of bene-
fits, some of which are provided on a contributory basis,
including comprehensive medical and dental plans, a 401(k)
savings plan with a company matching contribution, life
insurance and short- and long-term disability coverage.
Regulation
The banking industry is generally subject to extensive regu-
latory oversight. TCF Financial, as a publicly held financial
holding company, and TCF Bank, which has deposits insured
by the Federal Deposit Insurance Corporation (“FDIC”), are
subject to a number of laws and regulations. Many of these
laws and regulations have undergone significant change in
recent years. These laws and regulations impose restrictions
on activities, minimum capital requirements, lending and
deposit restrictions and numerous other requirements.
Future changes to these laws and regulations, and other
new financial services laws and regulations, are likely and
cannot be predicted with certainty. TCF Financial’s primary
regulator is the Federal Reserve Bank (“FRB”) and TCF Bank’s
primary regulator is the Office of the Comptroller of the
Currency (“OCC”).
4 | TCF Financial Corporation and Subsidiaries