TCF Bank 2012 Annual Report Download - page 11

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Expenses
TCF’s non-interest expense totaled $1.4 billion in
2012, including a $550.7 million loss on termination
of debt related to the balance sheet repositioning.
Excluding this charge, non-interest expense
increased $47.4 million, or 6.2 percent from 2011.
Compensation and benefits expense increased
12.9 percent during the year due to the ramp-up of
our revenue-producing national lending businesses,
particularly TCF Inventory Finance and Gateway One.
On a combined basis, advertising, marketing and
deposit account premium expense declined
23.3 percent in 2012 due to the change in marketing
strategy as a result of the return to free checking,
which dramatically decreased the need to offer
premiums to open accounts.
In early 2013, TCF entered into an agreement with
the Office of the Comptroller of the Currency (OCC)
related to previously disclosed deficiencies in its
Bank Secrecy Act/Anti-Money Laundering (BSA/AML)
compliance program. As a result, TCF agreed to
payment of a civil money penalty and reported a
charge to earnings of $10 million, or 6 cents per
common share, in the fourth quarter of 2012 for this
penalty. We believe that this settlement, along with
comprehensive changes TCF has made to strengthen
our BSA/AML compliance program, is a significant
step towards a satisfactory resolution of the July
2010 BSA-related consent order with the OCC.
TCF takes pride in providing monetary and volunteer
support to the communities in which we operate.
During 2012, TCF and its employees contributed over
$2.7 million to charitable organizations in human
services, education, community development and
the arts. TCF employees from across the company
gave their time by volunteering and serving in
leadership roles at local non-profit organizations. TCF
and its employees are committed to doing our part to
make a difference in the communities we serve.
Keys to Success in 2013
After building and investing throughout 2012, it will
be important to execute on our strategies and deliver
results in 2013. I believe we have the right pieces in
place to make this happen. Below are some keys to
success in 2013:
• Improve credit quality. The most important area
of improvement for TCF in 2013 is in credit quality.
We believe rebounding home values in many
markets and a slowly improving economy will
improve the outlook in consumer real estate.
Initiatives to aggressively address commercial
credit issues in 2012 will continue into 2013. The
overall loan and lease portfolio is expected to
Net Charge-Offs
Percent
1211100908
1.54%
.78%
1.34%
1.47%
1.45%
Impact of Bankruptcy-Related
Regulatory Guidance
Net Charge-Offs
Non-Performing Assets1
Millions of Dollars
1211100908
$476
$234
$402
$486
$433
Non-Performing Assets
Impact of Bankruptcy-Related
Regulatory Guidance
1
Includes non-accrual loans and leases and other
real estate owned
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