TCF Bank 2012 Annual Report Download - page 63

Commitments to extend credit are agreements to
lend to a customer provided there is no violation of any
condition in the contract. These commitments generally
have fixed expiration dates or other termination clauses
and may require payment of a fee. Since certain of the
commitments are expected to expire without being
drawn upon, the total commitment amounts do not
necessarily represent future cash requirements. Collateral
predominantly consists of residential and commercial
real estate. The credit facilities established for inventory
finance customers are discretionary credit arrangements
which do not obligate the Company to lend.
Unrecognized tax benefits, projected benefit obligations
and demand deposits with indeterminate maturities have been
excluded from the contractual obligations presented above.
Campus marketing agreements consist of fixed or
minimum obligations for exclusive marketing and naming
rights with seven campuses. TCF is obligated to make
various annual payments for these rights in the form of
royalties and scholarships through 2029. TCF also has
various renewal options, which may extend the terms of
these agreements. Campus marketing agreements are an
important element of TCF’s campus banking strategy.
See Note 18 of Notes to Consolidated Financial
Statements for information on commitments to extend
credit and standby letters of credit and guarantees on
industrial revenue bonds.
Capital Resources
Preferred Stock On June 25, 2012, TCF completed the
public offering of 6,900,000 depositary shares, each
representing a 1/1,000th interest in a share of the Series
A Preferred Stock, par value $.01 per share, at a public
offering price of $25 per depositary share. Net proceeds of
the offering to TCF, after deducting underwriting discounts,
commissions and estimated offering costs of $5.8 million,
were $166.7 million. Dividends are payable on the Series
A Preferred Stock if, as, and when declared by TCF’s Board
of Directors on a non-cumulative basis on March 1, June 1,
September 1, and December 1 of each year, at a per annum
rate of 7.5%.
On December 19, 2012, TCF completed the public offering
of 4,000,000 shares of 6.45% Series B Non-Cumulative
Perpetual Preferred Stock, par value $.01 per share,
with a liquidation preference of $25 per share (“Series B
Preferred Stock”). Net proceeds of the offering to TCF,
after deducting underwriting discounts, commissions and
estimated offering costs of $3.5 million, were $96.5 million.
Dividends are payable on the Series B Preferred Stock if, as,
and when declared by TCF’s Board of Directors on a non-
cumulative basis on March 1, June 1, September 1, and
December 1 of each year, at a per annum rate of 6.45%.
Equity Dividends to common stockholders on a per
share basis totaled 5 cents for each of the quarters ended
December 31, 2012 and December 31, 2011. TCF’s dividend
payout ratio was 34% for the quarter ended December 31,
2012. The Company’s primary funding sources for dividends
are earnings and dividends received from TCF Bank.
At December 31, 2012, TCF had 5.4 million shares remain-
ing in its stock repurchase program authorized by its Board of
Directors, but would need approval from the Federal Reserve
before repurchasing stock pursuant to this authorization.
Tangible realized common equity at December 31, 2012,
was $1.4 billion, or 7.52% of total tangible assets,
compared with $1.6 billion, or 8.42% of total tangible
assets, at December 31, 2011. Tangible realized common
equity is a non-GAAP financial measure and represents
common equity less goodwill, other intangible assets,
accumulated other comprehensive income and non-
controlling interest in subsidiaries. Tangible assets
represent total assets less goodwill and other intangible
assets. When evaluating capital adequacy and utilization,
management considers financial measures such as Tangible
Realized Common Equity to Tangible Assets and the Tier 1
Common Capital Ratio. These measures are non-GAAP
financial measures and are viewed by management as
useful indicators of capital levels available to withstand
unexpected market or economic conditions, and also provide
investors, regulators, and other users with information to be
viewed in relation to other banking institutions.
{ 2012 Form 10K } { 47 }