TCF Bank 2009 Annual Report Download - page 21

2009 Form 10-K : 5
In general, TCF Bank may not declare or pay a dividend
to TCF Financial in excess of 100% of its net retained prots
for the current year combined with its net retained prots
for the preceding two calendar years without prior approval
of the OCC. TCF Bank’s ability to make capital distributions
in the future may require regulatory approval and may be
restricted by its regulatory authorities. TCF Bank’s ability to
make any such distributions will also depend on its earnings
and ability to meet minimum regulatory capital requirements
in effect during future periods. These capital adequacy
standards may be higher in the future than existing minimum
regulatory capital requirements. The OCC also has the
authority to prohibit the payment of dividends by a national
bank when it determines such payments would constitute
an unsafe and unsound banking practice. In addition,
income tax considerations may limit the ability of TCF Bank
to make dividend payments in excess of its current and
accumulated tax “earnings and prots” (“E&P”). Annual
dividend distributions in excess of E&P could result in a tax
liability based on the amount of excess earnings distributed
and current tax rates. See “Management’s Discussion and
Analysis of Financial Condition and Results of Operations
— Consolidated Financial Condition Analysis — Liquidity
Management” and Notes 13 and 14 of Notes to Consolidated
Financial Statements.

 TCF Financial is subject to FRB regulations,
examinations and reporting requirements relating to bank
or nancial holding companies. Bank subsidiaries of nancial
holding companies like TCF Bank are subject to certain
restrictions in their dealings with holding company afliates.
A holding company must serve as a source of strength
for its subsidiary banks, and the FRB may require a holding
company to contribute additional capital to an under-
capitalized subsidiary bank. In addition, Section 55 of the
National Bank Act may permit the OCC to order the pro rata
assessment of shareholders of a national bank where the
capital of the bank has become impaired. If a shareholder
fails to pay such an assessment within three months, the
Board of Directors must cause the sale of the shareholder’s
stock at public auction to cover a deciency in the capital
of a subsidiary bank. In the event of a holding company’s
bankruptcy, any commitment by the holding company to
a federal bank regulatory agency to maintain the capital
of a subsidiary bank would be assumed by the bankruptcy
trustee and may be entitled to priority over other creditors.
Under the Bank Holding Company Act (“BHCA”), FRB
approval is required before acquiring more than 5% control,
or substantially all of the assets, of another bank, or bank
or nancial holding company, or merging or consolidating
with such a bank or holding company. The BHCA also gener-
ally prohibits a bank holding company, with certain excep-
tions, from acquiring direct or indirect ownership or control
of more than 5% of the voting shares of any company which
is not a bank or bank holding company, or from engaging
directly or indirectly in activities other than those of
banking, managing or controlling banks, providing services
for its subsidiaries, or conducting activities permitted by
the FRB as being closely related to the business of banking.
 Federal and state
laws and regulations contain a number of provisions which
impose restrictions on changes in control of nancial
institutions such as TCF Bank, and which require regulatory
approval prior to any such changes in control. The Restated
Certicate of Incorporation of TCF Financial contains fea-
tures which may inhibit a change in control of TCF Financial.
 Under federal
law, interstate merger transactions may be approved by
federal bank regulators without regard to whether such
transactions are prohibited by the law of any state, unless
the home state of one of the banks opted out of the
Riegle-Neal Interstate Banking and Branching Act of 1994
by adopting a law after the date of enactment of such act,
and prior to June 1, 1997, which applies equally to all out-
of-state banks and expressly prohibits merger transactions
involving out-of-state banks. Interstate acquisitions of
branches by banks are permitted only if the law of the state
in which the branches are located permits such acquisitions.
Interstate mergers and branch acquisitions may also be
subject to certain nationwide and statewide insured
deposit maximum concentration levels or other limitations.
 The deposits of TCF Bank have
historically been insured by the FDIC up to $100,000 per
insured depositor, except certain types of retirement
accounts, which are insured up to $250,000 per insured