TCF Bank 2011 Annual Report Download - page 37

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Item 7. Management’s Discussion
and Analysis of Financial Condition
and Results of Operations
Table of Contents Page
Overview 19
Results of Operations 20
Performance Summary 20
Operating Segment Results 21
Consolidated Income Statement Analysis 21
Net Interest Income 21
Provision for Credit Losses 25
Non-Interest Income 25
Non-Interest Expense 28
Income Taxes 29
Consolidated Financial Condition Analysis 30
Securities Available for Sale 30
Loans and Leases 30
Credit Quality 34
Other Real Estate Owned and Repossessed
and Returned Equipment 42
Liquidity Management 44
Deposits 44
Borrowings 44
Contractual Obligations and Commitments 45
Equity 45
Summary of Critical Accounting Estimates 47
Recent Accounting Pronouncements 48
Fourth Quarter Summary 48
Legislative, Legal and Regulatory Developments 49
Forward-Looking Information 49
Management’s discussion and analysis of the consolidated
financial condition and results of operations of TCF
Financial Corporation should be read in conjunction with
the consolidated financial statements in Item 8 and
selected financial data in Item 6.
Overview
TCF Financial Corporation, a Delaware corporation (“TCF” or
the “Company”), is a national bank holding company based
in Wayzata, Minnesota. Its principal subsidiary, TCF National
Bank (“TCF Bank”), is headquartered in South Dakota. TCF
had 434 branches in Minnesota, Illinois, Michigan, Colorado,
Wisconsin, Indiana, Arizona and South Dakota (TCF’s primary
banking markets) at December 31, 2011.
TCF provides convenient financial services through
multiple channels in its primary banking markets. TCF has
developed products and services designed to meet the
needs of all consumers. The Company focuses on attracting
and retaining customers through service and convenience,
including branches that are open seven days a week and
on most holidays, extensive full-service supermarket
branches, automated teller machine (“ATM”) networks and
internet, mobile and telephone banking. TCF’s philosophy is
to generate interest income, fees and other revenue growth
through business lines that emphasize higher yielding
assets and low or no interest-cost deposits. The Company’s
growth strategies include the development of new products
and services, new branch expansion and acquisitions. New
products and services are designed to build on existing
businesses and expand into complementary products and
services through strategic initiatives.
TCF’s core businesses include Retail Banking, Wholesale
Banking and Treasury Services. Retail Banking includes
branch banking and retail lending. Wholesale Banking
includes commercial banking, leasing and equipment
finance, inventory finance and auto finance. TCF refers to
its combined leasing and equipment finance, inventory
finance and auto finance businesses as Specialty Finance.
Treasury Services includes the Company’s investment and
borrowing portfolios and management of capital, debt and
market risks, including interest rate and liquidity risks.
TCF’s lending strategy is to originate high credit quality
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 and equipment finance businesses consist of TCF
Equipment Finance, Inc., which delivers equipment finance
solutions to businesses in select markets, and Winthrop
Resources Corporation, which primarily leases technology
and data processing equipment. TCF’s leasing and
equipment finance businesses have equipment installations
in all 50 states and, to a limited extent, in foreign countries.
TCF Inventory Finance originates commercial variable-rate
loans which are secured by equipment under a floorplan
arrangement and supported by repurchase agreements
from original equipment manufacturers to businesses
in the United States and Canada. In November 2011, TCF
entered into the auto finance business with its acquisition
of Gateway One Lending & Finance, LLC (“Gateway One”).
Gateway One currently originates and services loans on new
and used autos in 30 states and is expected to expand into
a nationwide business.
192011 Form 10-K