TCF Bank 2010 Annual Report Download - page 5

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At year-end, TCF reported its 63rd consecutive quarter of protability.
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 our competitors. Our success with
opt-in, as well as our implementation
of new account maintenance fees,
demonstrates our willingness and ability
to meet regulatory challenges head-on.
Dodd-Frank Act, particularly the Durbin
Amendment TCF senior management,
with the assistance of third party
experts, extensively researched the
legality of provisions of the Dodd-Frank
Act known as the Durbin Amendment,
that limit the ability of banks to receive
debit card interchange fees. On October
12, 2010, TCF filed a lawsuit challenging
the constitutionality of the Durbin
Amendment. We believe the provisions
of the Durbin Amendment clearly
violate multiple constitutional rights of
TCF and similarly situated banks. More
specifically, the rights that have been
compromised deal with our ability to
earn a fair rate of return on our invested
capital and to compete on even ground
with banks exempted by the law. In
December 2010, the Federal Reserve
Board issued a proposed regulation
based on the Durbin Amendment
creating proposed caps on interchange
fees that, if implemented, will result
in a significant revenue loss for banks
like TCF. Since the Fed announced its
proposal, we have seen more and more
parties express increased concern
about the potential implications of the
Durbin Amendment. Our lawsuit has
certainly been the right thing to do for
our customers and stockholders and
we remain confident that a favorable
outcome can be achieved.
• Despite the lingering economic crisis,
TCF earned $146.6 million in 2010, up
68 percent from the previous year.
Diluted earnings per common share
was $1.05, up 94 percent from 2009.
• TCF’s net interest margin was 4.14
percent for the full year of 2010 and
4.04 percent in the fourth quarter of
2010. Our industry leading deposit
strategies and continued reduction of
high interest-rate certificates of deposit
balances contributed significantly to net
interest margin. During 2010, we took
certain actions to increase the asset
sensitivity of the balance sheet in
anticipation of rising interest rates,
which included changing the mix of
fixed- and variable-rate loans. This has
limited expansion of the net interest
margin in the short-term, but is in the
best long-term interest of the company.
Overall, TCF’s net interest margin
continues to be better than the
average of the Top 50 Banks by
approximately 68 basis points.
• 3 •
2010 Annual Report