TCF Bank 2015 Annual Report Download - page 59

Download and view the complete annual report

Please find page 59 of the 2015 TCF Bank annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 144

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144

44
TCF Bank had $538.7 million and $767.0 million of net liquidity qualifying interest-bearing deposits at the Federal
Reserve Bank at December 31, 2015 and 2014, respectively. Interest-bearing deposits held at the Federal Reserve
Bank and unencumbered securities were $1.3 billion and $1.4 billion at December 31, 2015 and 2014, respectively.
ALCO and the Finance Committee of TCF Financial's Board of Directors have adopted a Holding Company Investment
and Liquidity Management Policy, which establishes a minimum target amount of cash or liquid investments TCF
Financial will hold. See "Item 7A. Quantitative and Qualitative Disclosures about Market Risk" for more information.
TCF Financial had cash and liquid investments of $69.5 million and $71.8 million at December 31, 2015 and 2014,
respectively.
Deposits are the primary source of TCF's funds for use in lending and for other general business purposes. In addition
to deposits, TCF derives funds from loan and lease repayments, loan sales and securitizations, and borrowings.
Lending activities, such as loan originations and purchases and equipment purchases for lease financing, are the
primary uses of TCF's funds. Deposit inflows and outflows are significantly influenced by general interest rates, money
market conditions, competition for funds, customer service and other factors. TCF's deposit inflows and outflows have
been and will continue to be affected by these factors. Borrowings may be used to compensate for reductions in normal
sources of funds, such as deposit inflows at less than projected levels, net deposit outflows or to fund balance sheet
growth. Historically, TCF has borrowed primarily from the Federal Home Loan Bank ("FHLB") of Des Moines, institutional
sources under repurchase agreements and other sources. TCF had $2.4 billion of additional borrowing capacity at the
FHLB of Des Moines at December 31, 2015, as well as access to the Federal Reserve Discount Window. In addition,
TCF maintains a diversified set of unsecured and uncommitted funding sources, including access to overnight federal
funds purchased lines, brokered deposits and capital markets.
The primary source of funding for TCF Commercial Finance Canada, Inc. ("TCFCFC") is a line of credit with TCF Bank.
TCFCFC also maintains a $20.0 million Canadian dollar-denominated line of credit facility with a counterparty, which
is guaranteed by TCF Bank and was unused at both December 31, 2015 and 2014.
Deposits Deposits totaled $16.7 billion at December 31, 2015, an increase of $1.3 billion, or 8.2%, from
December 31, 2014, primarily due to special campaigns for certificates of deposit and money market accounts.
Checking, savings and certain money market deposits are an important source of low interest cost funds for TCF. The
average balance of these types of deposits was $10.0 billion for both 2015 and 2014. These deposits comprised 62.6%
of total average deposits for 2015, compared with 67.0% of total average deposits for 2014.
Certificates of deposit totaled $3.9 billion at December 31, 2015, compared with $3.0 billion at December 31, 2014.
Non-interest bearing checking accounts represented 19.1% of total deposits at December 31, 2015, compared with
18.3% at December 31, 2014. TCF's weighted-average rate for deposits, including non-interest bearing deposits, was
0.30% at December 31, 2015, compared with 0.26% at December 31, 2014. The increase was primarily due to
increased average rates resulting from promotions for certificates of deposit.
Borrowings Borrowings totaled $1.0 billion and $1.2 billion at December 31, 2015 and 2014, respectively. Historically,
TCF has borrowed primarily from the FHLB of Des Moines, institutional sources under repurchase agreements and
other sources.
On February 27, 2015, TCF Bank issued $150.0 million of subordinated notes due February 27, 2025 with a fixed-
rate coupon of 4.60% per annum. Simultaneously, TCF Bank entered into an interest rate swap agreement designated
as a fair value hedge. The effect of the interest rate swap is to effectively convert the fixed-rate on the subordinated
notes to a floating interest rate based on the three-month London InterBank Offered Rate ("LIBOR") plus a fixed number
of basis points on the notional amount.
See Note 10, Short-term Borrowings and Note 11, Long-term Borrowings of Notes to Consolidated Financial Statements
for additional information regarding TCF's borrowings.