TCF Bank 2010 Annual Report Download

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TCF Financial Corporation | 2010 Annual Report
Bold Thinking
Smart Banking
Swift Decisions

Table of contents

  • Page 1
    TCF Financial Corporation | 2010 Annual Report Bold Thinking Swift Decisions Smart Banking

  • Page 2
    ... Board of Directors Annual Report on Form 10-K 01 08 17 18 52 56 95 Business Risk Factors Selected Financial Data Management's Discussion and Analysis Consolidated Financial Statements Notes to Consolidated Financial Statements Other Financial Data Additional Information 108 Corporate Information...

  • Page 3
    ...Annual Report • 1• Financial Highlights At or For the Year Ended December 31, (Dollars in thousands, except per-share data) 2010 2009 % Change Operating Results: Net interest income Provision for credit losses Net interest income after provision for credit losses Non-interest income: Fees...

  • Page 4
    ...August 15, 2010, new regulations on overdraft fees specific to ATM transactions and one-time debit card transactions became fully effective. TCF was one of the first banks in the country to proactively implement a highly successful customer education program around this issue and the number of opt...

  • Page 5
    2010 Annual Report • 3• At year-end, TCF reported its 63rd consecutive quarter of profitability. value the overdraft services provided by TCF. Since implementation, we have seen a decline in overall fees and service charges, but this decline has been less significant than that of most of ...

  • Page 6
    ...Chairman Barry Winslow to lead a reorganized and improved risk management system. TCF Retail Banking TCF's Retail Banking division consists of branch banking and retail lending. In branch banking, we spent a lot of time this year evaluating our product line-up and pricing structures in light of the...

  • Page 7
    ... accounts. TCF branch banking has seen the most change of our business lines over the past year with the imposition of new regulations and legislation. While the dust has yet to settle, we continue to stay innovative while providing competitive products and services to our customers. Loan balances...

  • Page 8
    .... At year-end, the TCFIF portfolio balance was $792.4 million with indirect credit lines to 169 manufacturers and buying groups and direct credit lines with 8,866 dealers in the United States and Canada. This management team continues to work hard to position the Asset Diversification In 2010, TCF...

  • Page 9
    ...positive sign of credit stabilization, which could be attributable to our efforts to work out problem loans and leases and perhaps to an improving economy. In 2010, TCF's consumer real estate delinquencies and net charge-offs continued to increase, but at a slower rate than in the previous two years...

  • Page 10
    ..., as well as management's efforts to change the mix of assets by replacing the run-off of higher-yielding fixed-rate loans with lower-yielding variable-rate loans in anticipation of future interest rate increases. Banking fees and service charges in 2010 decreased from last year primarily due to...

  • Page 11
    2010 Annual Report • 9• regulations in August 2010. This impact was partially offset by new monthly maintenance fee income. We look forward to 2011 as we believe our banking customers will find value in the enhancements we have recently made to our anchor checking account, TCF Convenience ...

  • Page 12
    ... lending to creditworthy customers. Despite a decrease in the number of deposit accounts in 2010, we intend to earn them back in 2011. Deposit gathering and loan and lease production are the bread and butter of TCF, and a high priority for our entire management team in 2011. Checking account growth...

  • Page 13
    ... further impact fee revenue. In addition, further changes to our product and service offerings in response to legislative changes could impact customer banking preferences in the future. • Growth expectations of our new inventory finance business may not be achieved. This new line of business has...

  • Page 14
    ...Director since 2010 George G. Johnson Vance K. Opperman Gregory J. Pulles Gerald A. Schwalbach CPA/Managing Director, George Johnson & Company Director since 1998 President and Chief Executive Officer, Key Investment, Inc. Director since 2009 Vice Chairman, TCF Financial Corporation Director...

  • Page 15
    ...State or other jurisdiction of (I.f.S. Employer Identification No.) incorporation or organization) 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...

  • Page 16
    ... Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and felated Stockholder Matters Certain felationships and felated Transactions, and Director Independence Principal Accounting Fees and Services 99 100 100 100 100 Part IV Item 15. Exhibits, Financial...

  • Page 17
    ... Bank ("TCF Bank"), which is headquartered in Sioux Falls, South Dakota. TCF Bank operates bank branches in Minnesota, Illinois, Michigan, Colorado, Wisconsin, Indiana, Arizona and South Dakota (TCF's primary banking markets). TCF's focus is on the delivery of retail and commercial banking products...

  • Page 18
    ... income are the number of deposit accounts and related transaction activity. New regulations that became fully effective on August 15, 2010 require consumer checking account customers to elect if they want TCF to authorize debit card and ATM transactions if, at the time of authorization, there...

  • Page 19
    ... Government sponsored enterprises, deposits of insured banks, bankers' acceptances and federal funds. TCF Bank's investments do not include commercial paper, asset-backed commercial paper, asset-backed securities secured by credit cards or auto loans, trust preferred securities or preferred stock...

  • Page 20
    ... activities. See "Item 1. Business - Wholesale Banking" for more information. Competition TCF competes with a number of depository institutions and financial service providers in its market areas, and experiences significant competition in attracting and retaining deposits and in lending funds...

  • Page 21
    ... policies. In general, TCF Bank may not declare or pay a dividend to TCF Financial in excess of 100% of its net retained profits for the current year combined with its net retained profits for the preceding two calendar years without prior approval of the OCC. TCF Bank's ability to make capital...

  • Page 22
    ... a number of restrictions or new requirements on institutions, including, but not limited to, growth limitations, dividend restrictions, individual increased regulatory capital requirements, increased loan, lease and real estate loss reserve requirements, increased supervisory assessments, activity...

  • Page 23
    ... institutions to pay interest on business checking accounts starting July 2011; and • fequires publicly-traded bank holding companies with assets of $10 billion or more to establish a risk committee of the Board of Directors responsible for enterprise-wide risk management practices. Taxation...

  • Page 24
    ... and changes to Codes of Ethics and information on all TCF's securities are also available on this website. Stockholders may request these documents in print free of charge by contacting the Corporate Secretary at TCF Financial Corporation, 200 Lake Street East, Mail Code EX0-03-A, Wayzata, MN 55391...

  • Page 25
    ... of the portfolio. The Concentration Credit fisk Management Committee and the Board of Directors have adopted a Concentration Policy to direct management of the Company's concentration risk. To manage credit risk arising from lending and leasing activities, management has adopted and maintains...

  • Page 26
    ... needs. Key liquidity ratios, level of asset liquidity, and the amount available from available funding sources are reported to ALCO on a monthly basis. At year end, TCF's Liquidity Management Policy and current operating practices established a minimum on-balance sheet asset liquidity target...

  • Page 27
    ... OCC directing the Bank to address certain deficiencies relating to the BSA. See "Item 1. Business - fegulation - Examinations and fegulatory Sanctions". Other Risks Declines in Real Estate Values Declines in home and real estate values in TCF's markets have adversely impacted results of operations...

  • Page 28
    ... in higher numbers of closed accounts and increased account acquisition costs. New Products In 2010, TCF introduced a new anchor retail deposit account product that replaced TCF Totally Free Checking, and that calls for a monthly maintenance fee on accounts not meeting certain requirements. After...

  • Page 29
    ... or if such changes may have an impact on TCF. TCF's income in future periods may be negatively impacted by pending state and federal legislative proposals which, if enacted, could limit interest rates or loan, deposit or other fees and service charges. Financial institutions have also increasingly...

  • Page 30
    ... TCF's consolidated financial statements conform with generally accepted accounting principles, which require management to make estimates and assumptions that affect amounts reported in the consolidated financial statements. These estimates are based on information available to management...

  • Page 31
    ... New York Stock Exchange Composite Tape, as reported by Bloomberg. As of January 31, 2011, there were 7,299 holders of record of TCF's common stock. The Board of Directors of TCF Financial and TCF Bank have adopted a Capital Plan and Dividend Policy. The policies define how enterprise risk related...

  • Page 32
    ... and South Financial Group, Inc. Source: SNL Financial LC and Standard & Poor's © 2011 The following table summarizes share repurchase activity for the quarter ended December 31, 2010. Total Number of Shares Purchased - 3,332 - - - - - 3,332 Average Price Paid Per Share $ - $16.37 Total Number of...

  • Page 33
    ... in thousands, except per-share data) Loans and leases Securities available for sale Total assets Checking, savings and money market deposits Certificates of deposit Total deposits Borrowings Equity Book value per common share Key Ratios and Other Data: 2010 2009 2008 2007 2006 $14,788,304 $14...

  • Page 34
    ... and primarily secured loans and leases. TCF's retail lending operation offers fixed- and variable-rate loans and lines of credit secured by residential real estate properties. Commercial loans are generally made on properties or to customers located within TCF's primary banking markets. The leasing...

  • Page 35
    ... checking account product that replaced the TCF Totally Free Checking product. The new product carries a monthly maintenance fee on accounts not meeting certain specific requirements. TCF is considering future retail deposit account changes that could include charging a daily negative balance fee...

  • Page 36
    ... compensation and employee benefit expense due to headcount reductions, decreased deposit account premiums and the 2009 FDIC special assessment. WHOLESALE BANKING - Consisting of commercial banking, leasing and equipment finance and inventory finance, reported net income of $39.5 million for 2010...

  • Page 37
    ...31, 2010 Year Ended December 31, 2009 Change (Dollars in thousands) Assets: Investments and other U.S. Government sponsored entities: Mortgage-backed securities Debentures U.S. Treasury Bills Other securities Total securities available for sale (2) Loans and leases: Consumer real estate: Fixed-rate...

  • Page 38
    ...Year Ended December 31, 2008 Change Average (Dollars in thousands) Assets: Investments and other U.S. Government sponsored entities: Mortgage-backed securities Debentures U.S. Treasury Bills Other securities Total securities available for sale (2) Loans and leases: Consumer real estate: Fixed-rate...

  • Page 39
    ... Mortgage-backed securities 8,017 Debentures (8,487) U.S. Treasury Bills 64 Other securities (2) Total securities available for sale (6,990) Loans and leases: Consumer home equity: Fixed-rate (21,230) Variable-rate 15,747 Consumer - other (803) Total consumer real estate and other (3,853) Commercial...

  • Page 40
    ... income. Year Ended December 31, (Dollars in thousands) Fees and service charges Card revenue ATM revenue Subtotal Leasing and equipment finance Other Fees and other revenue Gains on securities, net Gains on sales of branches and real estate Visa share redemption Total non-interest income Fees and...

  • Page 41
    ... 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 volume for the year ended: Off-line (Signature) On-line (PIN) Total Average transaction size (in...

  • Page 42
    ... expense. Year Ended December 31, (Dollars in thousands) Compensation and employee benefits Occupancy and equipment FDIC insurance Deposit account premiums Advertising and marketing Other Subtotal Foreclosed real estate and repossessed assets, net Operating lease depreciation Other credit costs...

  • Page 43
    ... rates and deposit growth. In 2009, the FDIC charged banks a special assessment which totaled $8.4 million for TCF. The Dodd-Frank Act requires changes to a number of components of the FDIC insurance assessment, with an implementation date by the FDIC of April 1, 2011. The changes amend the current...

  • Page 44
    .... If such rates change, deferred income tax assets and liabilities must be adjusted in the period of change through a charge or credit to the Consolidated Statements of Income. Also, if current period income tax rates change, the impact on the annual effective income tax rate is applied year-to-date...

  • Page 45
    ... total assets, at December 31, 2010. During 2010, TCF recognized gains of $31.5 million on the sale of $598.5 million of mortgage-backed securities in the available for sale securities portfolio. TCF's securities available for sale portfolio primarily consists of fixed-rate mortgagebacked securities...

  • Page 46
    ... real estate loan balance consisted of closed-end loans, compared with 76% at December 31, 2009. TCF's closed-end consumer real estate loans require payments of principal and interest over a fixed term. The average home value, which is based on original values securing the loans and lines of credit...

  • Page 47
    .... Outstanding balances on consumer real estate lines of credit were 61% of total lines of credit at December 31, 2010, compared with 58% at December 31, 2009. At December 31, 2010, 28% of retail lending accruing loans over 30-days delinquent made a payment during the last month of the year, compared...

  • Page 48
    ... 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) 2010 Balance $1,632,829 833,053 530,063 158,533 $3,154,478 Percent of Total 51.8% 26.4 16.8 5.0 100.0% Balance $1,465,122...

  • Page 49
    ...100.0% Balance $346,509 - 122,296 $468,805 2009 Percent of Total 73.9% - 26.1 100.0% Equipment Type Lawn and garden Power sports and other Electronics and appliances Total In the third quarter of 2010, TCF expanded into the power sports industry by entering into an agreement with Arctic Cat Sales...

  • Page 50
    ... that are delinquent. Delinquent balances are determined based on the contractual terms of the loan or lease. See Note 6 of Notes to Consolidated Financial Statements, "Allowance for Loan and Lease Losses and Credit Quality Information", for additional information. (In thousands) 2010 $ 55,618 59...

  • Page 51
    ... or greater than the rate that TCF was willing to accept at the time of modification for a new loan with comparable risk and the loans are no longer impaired based on the terms of the restructuring agreements. feserves for losses on accruing restructured consumer real estate loans were $36.8 million...

  • Page 52
    ... loans where interest rates were changed to current market rates for borrowers with similar credit characteristics or where TCF received additional collateral or loan conditions. Loans that are 90 or more days past due and not well secured at the time of modification remain on non-accrual status...

  • Page 53
    ...non-accrual. Most of TCF's non-accrual loans and past due loans 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 longer for a loan to migrate from initial...

  • Page 54
    ...226) $ 345,257 (In thousands) Balance, at beginning of year Additions Charge-offs Transfers to other assets feturn to accrual status Payments received Other, net Balance, at end of year Consumer $ 82,936 223,785 (43,180) (85,944) (30,274) (6,136) (1,887) $139,300 Total $ 172,518 451,511 (112,523...

  • Page 55
    ... in commercial or residential real estate values in TCF's markets may have an adverse impact on the current adequacy of the allowance for loan and lease losses by increasing credit risk and the risk of potential loss. The total allowance for loan and lease losses is generally available to absorb...

  • Page 56
    ... consumer real estate Consumer other Total consumer Commercial real estate Commercial business Total commercial Leasing and equipment finance Inventory finance Total recoveries Net charge-offs Provision charged to operations Balance, at end of year Net charge-offs as a percentage of average loans...

  • Page 57
    ... due to the addition of 1,019 new properties exceeding sales of 797 properties. The average amount of time to sell consumer real estate properties once they are listed for sale was 4.2 months in 2010. The consumer real estate portfolio is secured by a total of 82,543 properties of which 813, or .98...

  • Page 58
    ... funds and fee income for TCF. Checking, savings and money market deposits totaled $10.6 billion, up $176 million from December 31, 2009, and comprised 91% of total deposits at December 31, 2010, compared with 90% of total deposits at December 31, 2009. The average balance of these deposits for 2010...

  • Page 59
    ... primary funding sources for dividends are earnings and dividends received from TCF Bank. At December 31, 2010, TCF had 5.4 million shares remaining in its stock repurchase program authorized by its Board of Directors. For the year ended December 31, 2010, average total equity to average assets was...

  • Page 60
    ... assets At December 31, 2010, TCF Financial and TCF Bank exceeded their regulatory capital requirements and are considered "well-capitalized" under guidelines established by the Federal feserve and the OCC. See Notes 13 and 14 of Notes to Consolidated Financial Statements. Tier 1 risk-based...

  • Page 61
    ... allowance for loan and lease losses, lease financing and income taxes. See Note 1 of Notes to Consolidated Financial Statements for further discussion of critical accounting estimates. 2010 Net income available to common stockholders $146,564 Treasury shares sold to TCF employee benefit plans 11...

  • Page 62
    ... quarter 2011. The remaining disclosures under ASU No. 2010-20 were not deferred and are included in Note 6 of Notes to Consolidated Financial Statements, "Allowance for Loan and Lease Losses and Credit Quality Information" . Fourth Quarter Summary In the fourth quarter of 2010, TCF reported net...

  • Page 63
    ... risks posed by TCF's loan, lease, investment, and securities available for sale portfolios, including continuing declines in commercial or residential real estate values or changes in the allowance for loan and lease losses dictated by new market conditions or regulatory requirements; interest rate...

  • Page 64
    ... changes, including limitations on TCF's ability to predict customer behavior and the impact on TCF's fee revenues. Litigation Risks fesults of litigation, including class action litigation concerning TCF's lending or deposit activities including account servicing processes or fees or charges...

  • Page 65
    ... that an immediate 100 basis point increase in current mortgage loan interest rates would reduce prepayments on the fixed-rate mortgage-backed securities, residential real estate loans and consumer loans at December 31, 2010, by approximately $144 million, or 25.1%, in the first year. A slowing in...

  • Page 66
    ... assets: Consumer loans (1) (2) Commercial loans (1) (2) Leasing and equipment finance (2) Securities available for sale (2) Investments Inventory finance Total Interest-bearing liabilities: Checking deposits (3) Savings deposits (3) Money market deposits (3) Certificates of deposit Short-term...

  • Page 67
    2010 Form 10-K • 51 • Item 8. Financial Statements and Supplementary Data Report of I n dep end ent R egistered P ublic Accounting Firm The Board of Directors and Stockholders TCF Financial Corporation: We have audited the accompanying consolidated statements of financial condition of TCF ...

  • Page 68
    ... Consolidated Statements of Financial Condition (Dollars in thousands, except per-share data) At December 31, 2010 2009 $ 663,901 179,768 1,931,174 $ 299,127 163,692 1,910,476 Assets Cash and due from banks Investments Securities available for sale Loans and leases: Consumer real estate...

  • Page 69
    ... and service charges Card revenue ATM revenue Subtotal Leasing and equipment finance Other Fees and other revenue Gains on securities, net Visa share redemption Total non-interest income Non-interest expense: Compensation and employee benefits Occupancy and equipment FDIC insurance Deposit account...

  • Page 70
    ...,579 - Treasury shares sold to TCF employee benefit plans, 757,612 shares - - Cancellation of shares of restricted stock (23,723) - Cancellation of common shares for tax withholding (135,594) - Amortization of stock compensation - - Stock compensation tax benefits - - Change in shares held in trust...

  • Page 71
    ... banks Cash and due from banks at beginning of year Cash and due from banks at end of year Supplemental disclosures of cash flow information: Cash paid for: Interest on deposits and borrowings Income taxes Transfer of loans and leases to other assets See accompanying notes to consolidated financial...

  • Page 72
    ... cash and due from banks. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the...

  • Page 73
    ... do not transfer substantially all benefits and risks of ownership to the lessee are classified as operating leases. Such leased equipment and related initial direct costs are included in other assets on the balance sheet and depreciated on a straight-line basis over the term of the lease to its...

  • Page 74
    ...real estate 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. Consumer real estate loans are placed on non-accrual status when the collection of interest and principal is 150 days...

  • Page 75
    ... 10-K • 59 • non-accrual status at 90 days or when four payments are owed, or after a partial charge-off, which management feels is appropriate based on the experience of TCF's customer activity and loan type. Commercial real estate and commercial business, leasing and equipment finance and...

  • Page 76
    ...for additional information concerning stockbased compensation. Deposit Account Overdrafts Deposit account overdrafts are reported in consumer or commercial loans. Net losses on uncollectible overdrafts are reported as net charge-offs in the allowance for loan and lease losses within 60 days from the...

  • Page 77
    ... losses on securities available for sale are due to lower values for equity securities or changes in interest rates and not due to credit quality issues. TCF has the ability and intent to hold these investments until a recovery of fair value occurs. At December 31, 2010 12 Months or More Unrealized...

  • Page 78
    ... outside directors and their related interests were made in the ordinary course of business on normal credit terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons. The aggregate amount of loans to executive officers of TCF...

  • Page 79
    ... principal cash flows of $168.6 million. In total, TCF paid $355.4 million during the year ended 2010 to acquire loans and leases having remaining contractual principal cash flows including residual on leases of $355.4 million. At the time of acquisition, the expected principal cash flows including...

  • Page 80
    ... and other information regarding the allowance for loan and leases losses and balances by type of allowance methodology. TCF's key credit quality indicator is the receivable's performance status, defined as accruing or non-accruing. For the Year Ended December 31, 2010 Commercial Real Estate and...

  • Page 81
    ... market Small ticket Winthrop Other Total leasing and equipment finance Inventory finance Subtotal Portfolios acquired with deteriorated credit quality Total (1) Operating leases of $77.4 million at December 31, 2010 are included in Other Assets on the Consolidated Statements of Financial Condition...

  • Page 82
    ... non-accrual status at December 31, 2010 and 2009, respectively. As of December 31, 2010 and 2009, approximately 76% and 77%, respectively, of TCF consumer real estate loan customers in bankruptcy were less than 60 days past due on their payments. For the years ended December 31, 2010 and December...

  • Page 83
    ... losses on accruing commercial real estate loan TDfs were $695 thousand, or 1.42% of the outstanding balance, at December 31, 2010. Consumer real estate loans that are less than 150 days past due, or six payments owing, at the time of modification remain on accrual status if there is demonstrated...

  • Page 84
    ... Year-to-Date Loan Allowance Average Loan Interest Income Balance fecorded Balance fecognized Impaired loans with an allowance recorded: Consumer real estate: First mortgage lien Junior lien Total consumer real estate Commercial real estate and commercial business: Commercial real estate Commercial...

  • Page 85
    ... in accruing consumer real estate TDfs resulting from TCF's expanded consumer modification activity and an increase in accruing commercial real estate loan TDfs. Included in impaired loans were $326.1 million and $249.6 million of accruing consumer real estate loan TDfs less than 90 days past due...

  • Page 86
    ...1,187,505 $11,568,319 % of Total 20.6% 17.4 38.0 46.2 5.5 89.7 10.3 100.0% Rate at Year-End Amount Checking: Non-interest bearing Interest bearing Total checking Savings Money market Total checking, savings, and money market Certificates of deposit Total deposits -% $ 2,429,061 .26 2,101,003 .12...

  • Page 87
    ... $100,000 15,000 7,534 3,054 1,202 $126,790 At December 31, Federal Home Loan Bank advances Federal funds purchased Securities sold under repurchase agreements U.S. Treasury, tax and loan borrowings Line of credit - TCFCFC Total Year ended December 31, Average daily balance Federal Home Loan Bank...

  • Page 88
    ...call period. If FHLB advances are called, replacement funding will be available from the FHLB at the then-prevailing market rate of interest for the term selected by TCF, subject to standard terms and conditions. Subordinated bank notes with stated maturities in 2014 and 2015 are callable quarterly...

  • Page 89
    ... of the following. Year Ended December 31, 2010 2009 2008 35.00% 35.00% 35.00% Federal income tax rate Increase (decrease) in income tax expense resulting from: State income tax,net of federal income tax benefit Investments in affordable housing Deductible stock dividends Changes in uncertain tax...

  • Page 90
    ... for sale Net operating losses Valuation allowance Accrued expenses Other Total deferred tax assets Deferred tax liabilities: Lease financing Loan fees and discounts Premises and equipment Prepaid expenses Investment in FHLB stock Investments in affordable housing Securities available for sale Other...

  • Page 91
    ... Bank may not declare or pay a dividend to TCF in excess of 100% of its net retained profits for the current year combined with its retained net profits for the preceding two calendar years, which was $239.9 million at December 31, 2010, without prior approval of the OCC. TCF Bank's ability to make...

  • Page 92
    ... table sets forth TCF's and TCF National Bank's regulatory tier 1 leverage, tier 1 risk-based and total risk-based capital levels, and applicable percentages of adjusted assets, together with the stated minimum and well-capitalized capital ratio requirements. Actual (Dollars in thousands) Amount...

  • Page 93
    ...(56,000) - 2,208,619 - - - 2,208,619 - The following table summarizes information about stock options outstanding at December 31, 2010. Stock Options Outstanding WeightedWeightedAverage Average femaining Exercise Contractual Shares Price Life in Years 2,208,619 $14.44 7.26 Stock Options Exercisable...

  • Page 94
    ... an employee's years of service with full vesting after five years. Employees have the opportunity to diversify and invest their account balance, including matching contributions, in various mutual funds or TCF common stock. At December 31, 2010, the fair value of the assets in the plan totaled $163...

  • Page 95
    ... 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 of plans at end of year Amounts recognized in the Statements of Financial Condition...

  • Page 96
    ... TCF Financial Corporation and Subsidiaries At December 31, 2010, assets held in trust for the Pension Plan included investments in mutual funds and money market funds. The fair value of these assets is based upon quotes from independent asset pricing services for identical assets based on active...

  • Page 97
    ... to the Postretirement Plan for the year ended December 31, 2010. TCF currently has no plans to pre-fund the Postretirement Plan in 2011. The following are expected future benefit payments used to determine projected benefit obligations. (In thousands) 2011 2012 2013 2014 2015 2016-2020 Pension...

  • Page 98
    ... the same credit policies in making these commitments as it does for making direct loans. TCF evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained is based on a credit evaluation of the customer. Financial instruments with off-balance sheet risk are...

  • Page 99
    ... forward contracts, are used to manage the foreign exchange risk associated with the TCF's minimum lease payment stream. These foreign exchange contracts are hedges of the forecasted cash flows from the underlying lease agreement expected through June 30, 2011. At December 31, 2010, the Company had...

  • Page 100
    ... flow hedge Total Year Ended December 31, 2010 $ 1,720 - - (1,976) (1,976) 575 (195) (1) $ 379 TCF executes all of its foreign exchange contracts in the over-the-counter market with large, international financial institutions. These contracts also include credit risk-related contingent features...

  • Page 101
    ..., 2010, the fair value of assets measured on a recurring basis are: feadily Available Market Prices(1) Observable Market Prices(2) Company Determined Market Prices(3) Total at Fair Value (In thousands) Securities available for sale: Mortgage-backed securities: U.S. Government sponsored enterprises...

  • Page 102
    ...time of transfer to real estate owned or repossessed and returned equipment. Long-lived assets held for sale were written down $20 million, which is included in foreclosed real estate and repossessed assets, net expense, during the year ended December 31, 2010. The table below presents the balances...

  • Page 103
    ... available for sale Loans: Consumer real estate and other Commercial real estate Commercial business Equipment finance loans Inventory finance loans Allowance for loan and lease losses (1) Total financial instrument assets Financial instrument liabilities: Checking, savings and money market deposits...

  • Page 104
    ... interest rates for borrowings of similar remaining maturities and characteristics. Financial Instruments with Off-Balance Sheet Risk The fair value of TCF's commitments to extend credit and standby letters of credit are estimated using fees currently charged to enter into similar agreements, as...

  • Page 105
    ...) Year Ended December 31, 2010 2009 $ 2008 Basic Earnings Per Common Share Net income Preferred stock dividends Non-cash deemed preferred stock dividend Net income available to common stockholders Earnings allocated to participating securities Earnings allocated to common stock Weighted-average...

  • Page 106
    ...146,295 Note 24. Business Segments fetail Banking, Wholesale Banking, Treasury Services and Support Services have been identified as reportable operating segments. fetail Banking includes branch banking and retail lending. Wholesale Banking includes commercial banking, leasing and equipment finance...

  • Page 107
    ... information of each of TCF's reportable segments, including a reconciliation of TCF's consolidated totals. (In thousands) fetail Banking Wholesale Banking Treasury Services Support Services Eliminations Consolidated At or For the Year Ended December 31, 2010: Revenues from external customers...

  • Page 108
    ...Interest income Interest expense Net interest expense Dividends from TCF National Bank Other non-interest income: Affiliate service fees 12,712 Other (1,549) Total other non-interest income 11,163 Non-interest expense: Compensation and employee benefits 13,058 Occupancy and equipment 298 Other 2,182...

  • Page 109
    ...securities Sale of trust preferred securities Capital infusions to TCF National Bank Shares sold to Employees Stock Purchase Plans Net decrease in short-term borrowings Stock compensation tax (expense) benefits Proceeds from senior unsecured term note Other, net Net cash used by financing activities...

  • Page 110
    ... the Securities and Exchange Commission, the Federal feserve and the Comptroller of the Currency. From time to time, borrowers and other customers, or employees or former employees, have also brought actions against TCF, in some cases claiming substantial damages. Financial services companies...

  • Page 111
    ... Consolidated Financial Statements and related notes. Selected Quarterly Financial Data (Unaudited) At (Dollars in thousands, except per-share data) Selected Financial Condition Data: Loans and leases Securities available for sale Goodwill Total assets Total deposits Short-term borrowings Long-term...

  • Page 112
    ... effective, as of December 31, 2010. Disclosure controls and procedures are designed to ensure that information required to be disclosed by TCF in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules...

  • Page 113
    ... system of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, will be detected. William A. Cooper Chairman and Chief Executive Officer Thomas F. Jasper Executive Vice President and Chief Financial Officer David M. Stautz Senior Vice President...

  • Page 114
    ... of income, equity, and cash flows for each of the years in the three-year period ended December 31, 2010, and our report dated February 15, 2011 expressed an unqualified opinion on those consolidated financial statements. Minneapolis, Minnesota February 15, 2011 Item 9B. Other Information None.

  • Page 115
    2010 Form 10-K • 99 • Part III Item 10. Directors, Executive Officers and Corporate Governance Information regarding directors and executive officers of TCF is set forth in the following sections of TCF's definitive Proxy Statement for the 2011 Annual Meeting of Stockholders to be held on ...

  • Page 116
    • 100 • TCF Financial Corporation and Subsidiaries Item 11. Executive Compensation Information regarding compensation of directors and executive officers of TCF is set forth in the following sections of TCF's 2011 Proxy Statement, and is incorporated herein by reference: Election of Directors:...

  • Page 117
    ... financial statements of TCF and its subsidiaries, are filed as part of this report: Desc rip tio n Page Selected Financial Data Consolidated Statements of Financial Condition at December 31, 2010 and 2009 Consolidated Statements of Income for each of the years in the three-year period ended...

  • Page 118
    ... duly authorized. TCF Financial Corporation fegistrant By /s/ William A. Cooper William A. Cooper Chairman and Chief Executive Officer Dated: February 15, 2011 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 119
    ...by reference to Exhibit 4.6 to TCF Financial Corporation's Current feport on Form 8-K filed August 19, 2008] Copies of instruments with respect to long-term debt will be furnished to the Securities and Exchange Commission upon request 3(b) 4(a) 4(b) 4(c) 4(d) 4(e) 4(f) 4(g) 4(h) 4(i) 4(j) 4(k)

  • Page 120
    ... Stock Award Program for Consumer Lending and Business Banker Divisions [incorporated by reference to Exhibit 10(b)-3 to TCF Financial Corporation's Annual feport on Form 10-K for the fiscal year ended December 31, 2005] Form of Year 2006 Executive Stock Grant Award Agreement dated January 23, 2006...

  • Page 121
    ... Current feport on Form 8-K filed January 27, 2005] festated Trust Agreement as executed with First National Bank in Sioux Falls as trustee effective as of October 1, 2000 [incorporated by reference to Exhibit 10(d) of TCF Financial Corporation's Annual feport on Form 10-K for the fiscal year ended...

  • Page 122
    ... 24, 2005 [incorporated by reference to Exhibit 10(l) to TCF Financial Corporation's Current feport on Form 8-K filed January 27, 2005] Trust Agreement for TCF Financial Senior Officer Deferred Compensation Plan as executed with First National Bank in Sioux Falls as trustee effective as of October...

  • Page 123
    2010 Form 10-K • 107 • Ex h ibit N o. Desc rip tio n 10(s) Trust Agreement for TCF Directors Deferred Compensation Plan [incorporated by reference to Exhibit 10(d) to TCF Financial Corporation's Annual feport on Form 10-K for the fiscal year ended December 31, 2000]; as amended by ...

  • Page 124
    ... Executive Vice President and Chief Information Officer Earl D. Stratton CPA/Managing Director, George Johnson & Company Vance K. Opperman Gregory J. Pulles 1,2,3,4,6,7 Executive Vice President, Wholesale Banking Craig f. Dahl President and Chief Executive Officer, Key Investment, Inc. Vice...

  • Page 125
    ... S. Jones Peter D. Kelley Christopher Meals TCF Support Survicus Executive Vice President and Chief Information Officer, TCF Financial Corporation Earl D. Stratton Executive Vice Presidents Gregg f. Goudy James C. LaPlante Senior Vice Presidents Peter J. Baranowski Kevin L. Harrington James...

  • Page 126
    ...fices Executive Offices TCF Financial Corporation 200 Lake Street East Mail Code EX0-03-A Wayzata, MN 55391-1693 (952) 745-2760 Minnesota/South Dakota Traditional Branches Minneapolis/St. Paul Area (46) Greater Minnesota (2) South Dakota (1) TCF Equipment Finance, Inc. Headquarters 11100 Wayzata...

  • Page 127
    ... to keep the transfer agent informed of their current address and to cash their dividend payments; otherwise, TCF may be required by state law to report and deliver (or "escheat") these shares and any unclaimed dividends as unclaimed property, even if TCF does not have physical possession...

  • Page 128
    ..., news releases, investor presentations, quarterly conference calls, annual reports, 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 55391-1693 (952) 745-2760 Credit Ratings Last...

  • Page 129
    ... business lines: Wholesale Banking (commercial banking, leasing and equipment finance, and inventory finance), Retail Banking (branch banking and retail lending), Treasury Services and Support Services, each with profit center goals and objectives. TCF emphasizes net income, return on average assets...

  • Page 130
    TCF Financial Corporation 200 Lake Street East Wayzata, MN 55391-1693 www.tcfbank.com TCFIR9347