TCF Bank 2012 Annual Report Download - page 5

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In late 2011, TCF announced an agreement for TCF
Inventory Finance to provide inventory financing to
the dealers of Bombardier Recreational Products,
Inc. (BRP) in the U.S. and Canada adding approxi-
mately 1,200 dealers to its already growing
footprint. The acquisition of Gateway One
Lending & Finance, Inc. (Gateway One), an
indirect auto finance company, completed in late
November 2011, added an additional consumer
lending channel to our organization. In addition,
TCF announced in March 2012 the creation of TCF
Capital Funding, a new commercial banking
division specializing in asset-based and cash flow
lending to smaller middle market companies across
the U.S. As a result of these key additions, TCF’s
loan and lease portfolio grew 9 percent in 2012.
The emphasis on national lending platforms has
had a significant impact on lending as a whole at
TCF. Instead of having to rely on growing commer-
cial and consumer loans regionally in a very
competitive pricing environment, we now have the
ability to be more selective given our asset growth
and diversification opportunities through national
lending platforms.
• Balance Sheet Repositioning
In March 2012, TCF repositioned its balance sheet
by prepaying $3.6 billion of long-term debt and
selling $1.9 billion of mortgage-backed securities.
While this action resulted in a one-time, net
after-tax charge of $295.8 million, the elimination
of higher cost, longer term debt has had the
beneficial impacts we expected. We now have
a more flexible funding structure which better
supports TCF’s strategic focus on growth in shorter
duration assets. The balance sheet repositioning
also had a positive impact on TCF’s net interest
margin which was 4.65 percent in 2012, up 66
basis points from 2011. The increase has primarily
been driven by the elimination of higher cost,
long-term debt and the growth in our higher
yielding national lending businesses. We believe
that TCF is positioned to continue to have one of
the highest net interest margins in the industry.
We have also reduced our mark-to-market risk on
securities and net interest income at risk, which
should better position us when interest rates
eventually rise.
• Deposit Acquisition
TCF acquired $778 million of deposits from
Prudential Bank & Trust, FSB in June 2012. The
deposit acquisition has provided a diversified and
stable portfolio of deposit funding from accounts
located throughout the U.S.
Net Interest Margin
Percent
1211100908
4.65%
3.91%
3.87%
4.15%
3.99%
Diluted Earnings
Per Common Share
Dollars
1
Includes a net, after-tax charge of $295.8 million or $1.87 per
share, related to repositioning TCF’s balance sheet in the rst
quarter of 2012.
Diluted EPS
1211100908
$(1.37)1
$.88
$.60
$1.08
$.71
Dividends Paid
{ 2012 Annual Report } { 03 }