TCF Bank 2013 Annual Report Download - page 18

Part I
Item 1. Business
General
TCF Financial Corporation (‘‘TCF’’ or the ‘‘Company’’), a Delaware corporation incorporated on April 28, 1987, is a national bank
holding company based in Wayzata, Minnesota. Its principal subsidiary is TCF National Bank (‘‘TCF Bank’’), which is
headquartered in Sioux Falls, South Dakota. TCF Bank operates bank branches in Minnesota, Illinois, Michigan, Colorado,
Wisconsin, Indiana, Arizona and South Dakota (TCF’s primary banking markets). TCF delivers retail banking products in over
40 states and commercial banking products mainly in TCF’s primary banking markets. TCF also conducts commercial leasing and
equipment finance business in all 50 states and, to a limited extent, in foreign countries, commercial inventory finance in the U.S.
and Canada and, to a limited extent, in other foreign countries and indirect auto finance business in 45 states. TCF generated total
revenue, defined as net interest income plus total non-interest income, of $1.2 billion, $1.2 billion and $1.1 billion in the U.S.
during 2013, 2012 and 2011, respectively. International revenue was $25.3 million, $21.3 million and $10.4 million during 2013,
2012, and 2011, respectively.
At December 31, 2013, TCF had total assets of $18.4 billion and was the 41st largest publicly traded bank holding company in the
United States based on total assets at September 30, 2013. References herein to the ‘‘Holding Company’’ or ‘‘TCF Financial’’
refer to TCF Financial Corporation on an unconsolidated basis.
TCF provides convenient financial services through multiple channels in its primary banking markets. TCF has developed
products and services designed to meet specific needs of the largest consumer segments in the market. 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, 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 interest-cost deposits. TCF’s growth strategies have included organic growth in
existing businesses, development of new products and services, and 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 continues to focus on asset growth in its leasing and equipment finance, inventory finance and auto finance
businesses and on making these businesses a more substantial part of its loan and lease portfolio.
TCF’s reportable segments are comprised of Lending, Funding and Support Services. Lending includes retail lending,
commercial banking, leasing and equipment finance, inventory finance and auto finance. Funding includes branch banking and
treasury services, which includes the Company’s investment and borrowing portfolios and management of capital, debt and
market risks, including interest rate and liquidity risks. Support Services includes holding company and corporate functions that
provide data processing, bank operations and other professional services to the operating segments. See ‘‘Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (‘‘Management’s Discussion and
Analysis’’) – Results of Operations – Reportable Segment Results’’ and Note 23 of Notes to Consolidated Financial Statements
for information regarding revenue, income and assets for each of TCF’s reportable segments.
Lending
TCF’s lending strategy is to originate diversified portfolios of high credit quality, primarily secured, loans and leases.
Retail Lending TCF makes consumer loans for personal, family or household purposes, such as home purchases, debt
consolidation, financing of home improvements, autos and education. TCF’s retail lending origination activity primarily consists of
consumer real estate secured lending. It also includes originating loans secured by personal property and, to a limited extent,
unsecured personal loans. Consumer loans are made on a fixed-term basis or a revolving line of credit. TCF does not have any
consumer real estate subprime lending programs nor did it ever originate or purchase from brokers, 2⁄28 adjustable-rate
mortgages (‘‘ARM’’) or option ARM loans. Beginning in 2012, TCF expanded its junior lien lending business through the
development of a national lending platform focused on junior lien loans to high credit quality customers.
Commercial Real Estate and Business Lending Commercial real estate loans are loans originated by TCF that are secured by
commercial real estate, including retail services, multi-family housing, office buildings and, to a lesser extent, commercial real
estate construction loans, mainly to borrowers based in its primary banking markets.
Commercial business loans are loans originated by TCF that are generally secured by various types of business assets including
inventory, receivables, equipment or financial instruments. In limited cases, loans may be originated on an unsecured basis.
Commercial business loans are used for a variety of purposes, including working capital and financing the purchase of
2