TCF Bank 2011 Annual Report Download - page 22

in “Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations — Consolidated
Financial Condition Analysis — Borrowings” and in Notes 11
and 12 of Notes to Consolidated Financial Statements.
Other Information
Activities of Subsidiaries of TCF Financial
Corporation TCF’s business operations include those
conducted 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 Bank’s subsidiaries principally engage in leasing and
equipment finance, inventory finance and auto finance
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 primary
banking market areas and nationally, and experiences
significant competition in attracting and retaining deposits
and in lending funds. Direct competition for deposits
comes primarily from 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
banks, mortgage bankers, mortgage brokers, consumer,
commercial and auto finance companies, credit unions,
insurance companies and savings institutions. TCF also
competes nationwide with other companies and banks in
the financing of autos, equipment and inventory. Expanded
use of the Internet has increased competition affecting TCF
and its loan, lease and deposit products.
Employees As of December 31, 2011, TCF had 7,143
employees, including 2,172 part-time employees. TCF
provides its employees with a comprehensive program of
benefits, 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
regulatory oversight. TCF Financial, as a publicly held
bank 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 and TCF Bank’s primary regulator is the Office of
the Comptroller of the Currency (“OCC”).
Regulatory Capital Requirements TCF Financial and
TCF Bank are subject to regulatory capital requirements of
the Federal Reserve and the OCC, respectively, as described
below. These regulatory agencies are required by law to
take prompt action when institutions are viewed to be
unsafe or unsound or do not meet certain minimum capital
standards. The Federal Deposit Insurance Corporation
Improvement Act of 1991 (“FDICIA”) defines five levels
of capital condition, the highest of which is “well-
capitalized.” It requires that undercapitalized institutions
be subjected to various restrictions such as limitations
on dividends or other capital distributions, limitations on
growth or restrictions on activities. Undercapitalized banks
must develop a capital restoration plan and the parent
bank holding company is required to guarantee compliance
with the plan. TCF Financial and TCF Bank are “well-
capitalized” under the FDICIA capital standards.
Additionally, the Federal Reserve and the OCC have
adopted rules that could permit them to quantify and
account for interest-rate risk exposure and market risk
from trading activity and to potentially reflect these risks
in higher capital requirements. New legislation, additional
rulemaking, or changes in regulatory policies may affect
future regulatory capital requirements applicable to TCF
Financial and TCF Bank.
Restrictions on Distributions TCF Financial’s ability
to pay dividends is subject to limitations imposed by the
Federal Reserve. In general, Federal Reserve regulatory
guidelines require the board of directors of a bank holding
company to consider a number of factors when considering
the payment of dividends, including the quality and level of
current and future earnings.
Dividends or other capital distributions from TCF Bank
to TCF Financial are an important source of funds to enable
TCF Financial to pay dividends on its common stock, to
make payments on TCF Financial’s borrowings, or to meet
4 TCF Financial Corporation and Subsidiaries