TCF is the national financial holding company of two federally chartered banks, TCF National Bank headquartered in Minnesota and TCF National Bank Colorado. The Company has 360 banking offices in Minnesota, Illinois, Michigan, Wisconsin, Colorado and Indiana. Other affiliates provide leasing, mortgage banking, discount brokerage and annuity, insurance and mutual fund sales.
TCF provides convenient financial services through multiple channels to customers located primarily in the Midwest. TCF has developed products and services designed to meet the needs of all consumers with a primary focus on middle- and lower-income individuals. 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 branch and automated teller machine (“ATM”) networks, and telephone and Internet banking. TCF’s philosophy is to generate top-line revenue growth (net interest income and fees and other revenues) through business lines that emphasize higher yielding assets and lower interest-cost deposits. The Company’s growth strategies include de novo branch expansion and the development of new products and services designed to build on its core businesses and expand into complementary products and services through emerging businesses and strategic initiatives.
TCF’s core businesses are comprised of traditional bank branches, EXPRESS TELLER ATMs, and commercial, consumer and mortgage lending. TCF emphasizes the “Totally Free” checking account as its anchor account, which provides opportunities to cross sell other convenience products and services and generate additional fee income. TCF’s strategy is to originate high credit quality, primarily secured loans and earn profits through lower interest-cost deposits. Commercial loans are generally made on local properties or to local customers, and are virtually all secured. TCF’s largest core lending business is its consumer home equity loan portfolio, comprised of fixed- and variable-rate closed-end loans and lines of credit.
TCF’s strategic initiatives are businesses that complement the Company’s core and emerging businesses. TCF’s new products have been significant contributors to the growth in fees and other revenues generated by checking accounts and loan products. Currently, TCF’s strategic initiatives include new card products designed to provide additional convenience to deposit and loan customers and to further leverage its EXPRESS TELLER ATM network. On June 8, 2001, the Company launched its discount brokerage, TCF Express Trade, Inc., to provide discount brokerage business and on-line brokerage in the future. The Company is also planning to launch additional insurance and investment products in 2001.
RESULTS OF OPERATIONS
TCF reported diluted earnings per common share of 67 cents and $1.29 for the second quarter and first six months of 2001, respectively, compared with 59 cents and $1.10 for the same 2000 periods. Net income was $52 million and $100.2 million for the second quarter and first six months of 2001, compared with $46.7 million and $87.4 million for the same 2000 periods. The first six months of 2001 results included a $2.1 million after-tax gain on sale of a branch, or 3 cents per diluted common share, compared with a $2.4 million after-tax gain on the sales of three branches, or 3 cents per diluted common share for the same period in 2000. Return on average assets was 1.78% and 1.74% for the second quarter and first six months of 2001, respectively, compared with 1.73% and 1.63% for the same 2000 periods. Return on average realized common equity was 23.22% and 22.33% for the second quarter and first six months of 2001, respectively, compared with 22.19% and 20.67% for the same 2000 periods. Diluted cash earnings per common share, which excludes amortization and reduction of goodwill, net of income tax benefits, was 70 cents and $1.34 for the second quarter and six months of 2001, respectively, compared with 61 cents and $1.14 for the same 2000 periods. On the same basis, cash return on average assets was 1.84% and 1.81% for the second quarter and first six months of 2001, respectively, compared with 1.80% and 1.70% for the same 2000 periods, and cash return on average realized equity was 24.07% and 23.18% for the second quarter and first six months of 2001, respectively, compared with 23.09% and 21.56% for the same 2000 periods.
Operating Segment Results
BANKING, comprised of deposits and investment products, commercial lending, consumer lending, residential lending and treasury services, reported net income of $45.7 million and $88.1 million for the second quarter and first six months of 2001, respectively, up 6.9% and 10.7% from $42.8 million and $79.6 million for the same 2000 periods. Net interest income for the second quarter and first six months of 2001 was $104.6 million and $204.5 million, respectively, up from $100.9 million and $200.3 million for the same 2000 periods. The provision for credit losses totaled $1.8 million and $2.4 million for the second quarter and first six months of 2001, respectively, down from $4.2 million and $4.3 million for the same 2000 periods. Non-interest income (excluding gains on sales of branches) totaled $77.8 million and $147.8 million for the second quarter and first six months of 2001, respectively, up 13.2% and 14.3% from $68.7 million and $129.2 million for the same 2000 periods. This improvement was primarily due to increased fees and service charges and electronic funds transfer revenues, reflecting TCF’s expanded retail banking operations and customer base. Non-interest expense (excluding the amortization of goodwill and deposit base intangibles) totaled $104.8 million and $207 million for the second quarter and first six months of 2001, respectively, up 7.5% and 6.1% from $97.5 million and $195 million for the same 2000 periods. The increases were primarily due to the costs associated with TCF’s continued retail banking expansion, including de novo supermarket branches, offset by sales of underperforming branches.
TCF has significantly expanded its retail banking franchise in recent periods and had 360 retail banking branches at June 30, 2001. Since January 1, 1998, TCF has opened 176 new branches, of which 164 were supermarket branches. TCF continued to expand its retail banking franchise by opening 8 new branches during the 2001 second quarter. TCF anticipates opening approximately 25 branches during 2001.
LEASING AND EQUIPMENT FINANCE, an operating segment comprised of TCF’s wholly owned subsidiaries Winthrop and TCF Leasing, provides a broad range of comprehensive lease and equipment finance products. This operating segment reported net income of $6 million and $10.5 million for the second quarter and first six months of 2001, respectively, up 6.3% and 1.9% from $5.6 million and $10.3 million for the same 2000 periods. As previously discussed in Note 4, leasing and equipment finance results for the second quarter and first six months of 2001 include increases of $415,000 and $915,000, after-tax, respectively, in intercompany expense. Net interest income for the second quarter and first six months of 2001 was $10.3 million and $20.5 million, respectively, up 48.5% and 62.2% from $6.9 million and $12.6 million for the same 2000 periods. Leasing and equipment finance’s provision for credit losses totaled $3.6 million and $5.4 million for the second quarter and first six months of 2001 respectively, up from $1.2 million and $2.1 million for the same 2000 periods, primarily as a result of the significant growth in the portfolio coupled with increased net charge-offs. Non-interest income totaled $13 million and $21.2 million for the second quarter and first six months of 2001, respectively, up 28.2% and 10.8% from $10.1 million and $19.2 million for the same 2000 periods. This increase is due to higher levels of sales type lease revenues during the second quarter of 2001. Non-interest expense (excluding the amortization of goodwill) totaled $10 million and $19.2 million for the second quarter and first six months of 2001, respectively, up 50.8% and 51% from $6.6 million and $12.7 million for the same 2000 periods, primarily as a result of the growth experienced in TCF Leasing during the past year.
MORTGAGE BANKING activities include the origination and purchase of residential mortgage loans, generally for sale to third parties with servicing retained. This operating segment reported net income of $2.2 million and $3.2 million for the second quarter and first six months of 2001, respectively, compared with net income of $209,000 and a net loss of $49,000 for the same 2000 periods. As a result of changes in methodologies of certain allocations in 2001 as discussed in Note 4, 2001 results for the mortgage banking operating segment include a reduction of $289,000, after-tax, for the second quarter of 2001 and $538,000 after-tax for the first six months of 2001, in intercompany expense compared with 2000. Non-interest income totaled $5.4 million and $9.4 million for the second quarter and first six months of 2001, respectively, up 46.9% and 28.7% from $3.7 million and $7.3 million for the same 2000 periods. This increase in non-interest income from the second quarter of 2000 is primarily due to a $3.1 million increase in gains on sales of loans held for sale, a $1.4 million increase in service fees and other fees on mortgage loans and an increase in other income of $884,000, partially offset by a $3.2 million increase in amortization of mortgage servicing rights. During the second quarter and first six months of 2001, this operating segment had increased amortization of mortgage servicing rights of $2.4 million and $3.3 million, respectively, and recorded $500,000 and $900,000, respectively, in additional valuation allowance expense, due to the accelerating prepayments and larger servicing portfolios. As a result of declines in interest rates during the first six months of 2001, the mortgage banking segment has experienced an increase in refinance activity. During the first six months of 2001, this operating segment generated $1.8 billion in new loan applications and $1.1 billion in closed loans, up from $688.4 million and $430.9 million, respectively for the same 2000 period. TCF’s mortgage pipeline (applications in process but not yet closed) was $747 million at June 30, 2001, compared with $221 million at December 31, 2000. The third-party servicing portfolio was $4.3 billion at June 30, 2001 with a weighted average coupon on loans of 7.31%, compared with $4 billion at December 31, 2000 with a weighted average coupon on loans of 7.42%. Non-interest expense totaled $5.7 million and $9.9 million for the second quarter and first six months of 2001, respectively, up 17.3% and down 1.7% from $4.9 million and $10.1 million for the same 2000 period. Contributing to the increase in non-interest expense during the second quarter of 2001 were increased expenses resulting from the high level of loan originations during the quarter. Mortgage servicing rights totaled $52.4 million or 1.22% of the servicing portfolio at June 30, 2001, compared with $40.1 million or 1.01% at December 31, 2000.
Net Interest Income
Net interest income for the second quarter of 2001 was $119.3 million, compared with $110.2 million for the second quarter of 2000 and $113.8 million for the 2001 first quarter. The net interest margin for the second quarter of 2001 was 4.40%, compared with 4.38% for the same 2000 period and 4.35% for the first quarter of 2001. TCF’s second quarter 2001 net interest income increased $9.1 million over the comparable 2000 period. Net interest income for the first six months of 2001 was $233.1 million, compared with $217 million for the same 2000 period. The net interest margin for the first six months of 2001 was 4.38%, compared with 4.35% for the same period of 2000. Net interest income improved by $24.2 million due to volume changes and decreased $8.1 million due to rate changes. The increase in net interest income and net interest margin during the second quarter and first six months of 2001 is primarily due to the growth in higher yielding commercial loans and leases along with strong growth in low cost deposits. Changes in net interest income are dependent upon the movement of interest rates, the volume and mix of interest-earning assets and interest-bearing liabilities, and the level of non-performing assets. Achieving net interest margin growth is dependent on TCF’s ability to generate higher-yielding assets and lower-cost retail deposits. If variable index rates (e.g., prime) were to decline, TCF may experience compression of its net interest margin depending on the timing and amount of any reductions, as it is possible that interest rates paid on retail deposits will not decline as quickly, or to the same extent, as the decline in the yield on interest-rate-sensitive assets such as home equity loans. Competition for checking, savings and money market deposits, important sources of lower cost funds for TCF, is intense. TCF may also experience compression in its net interest margin if the rates paid on deposits increase or as a result of new pricing strategies and lower rates offered on loan products in order to respond to competitive conditions. See “Market Risk - Interest-Rate Risk” and “Financial Condition - Deposits.”
The following rate/volume analysis details the increases (decreases) in net interest income resulting from interest rate and volume changes during the second quarter and first six months of 2001 as compared with the same periods last year. Changes attributable to the combined impact of volume and rate have been allocated proportionately to the change due to volume and the change due to rate.
| | Three Months Ended
June 30, 2001
Versus Same Period in 2000 | | Six Months Ended
June 30, 2001
Versus Same Period in 2000 | |
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| | Increase (Decrease) Due to | | Increase (Decrease) Due to | |
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| (In thousands) | Volume | | Rate | | Total | | Volume | | Rate | | Total | |
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| Investments | $ | 686 | | $ | (591 | ) | $ | 95 | | $ | 823 | | $ | (798 | ) | $ | 25 | |
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| Securities available for sale | 5,749 | | - | | 5,749 | | 4,871 | | 77 | | 4,948 | |
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| Loans held for sale | 3,371 | | (492 | ) | 2,879 | | 4,941 | | (799 | ) | 4,142 | |
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| Loans and leases: | | | | | | | | | | | | |
| | Residential real estate | (10,855 | ) | (97 | ) | (10,952 | ) | (17,327 | ) | 1,360 | | (15,967 | ) |
| | Commercial real estate | 5,766 | | (1,910 | ) | 3,856 | | 11,608 | | (2,306 | ) | 9,302 | |
| | Commercial business | 1,030 | | (1,431 | ) | (401 | ) | 2,016 | | (1,504 | ) | 512 | |
| | Consumer | 4,297 | | (4,225 | ) | 72 | | 8,600 | | (4,403 | ) | 4,197 | |
| | Leasing and equipment finance | 7,985 | | (964 | ) | 7,021 | | 17,454 | | (890 | ) | 16,564 | |
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| | Total loans and leases | 8,223 | | (8,627 | ) | (404 | ) | 22,351 | | (7,743 | ) | 14,608 | |
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| | Total interest income | 18,029 | | (9,710 | ) | 8,319 | | 32,986 | | (9,263 | ) | 23,723 | |
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| Deposits: | | | | | | | | | | | | |
| | Checking | 39 | | (38 | ) | 1 | | 66 | | (79 | ) | (13 | ) |
| | Savings | (135 | ) | (736 | ) | (871 | ) | (325 | ) | (1,000 | ) | (1,325 | ) |
| | Money market | 1,089 | | (1,013 | ) | 76 | | 2,236 | | 72 | | 2,308 | |
| | Certificates | (1,948 | ) | 141 | | (1,807 | ) | (3,605 | ) | 4,880 | | 1,275 | |
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| | Total deposits | (955 | ) | (1,646 | ) | (2,601 | ) | (1,628 | ) | 3,873 | | 2,245 | |
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| Borrowings: | | | | | | | | | | | | |
| | Securities sold under repurchase agreements and federal funds purchased | 6,455 | | (3,377 | ) | 3,078 | | 10,127 | | (3,515 | ) | 6,612 | |
| | FHLB advances | 1,645 | | (538 | ) | 1,107 | | 3,267 | | (948 | ) | 2,319 | |
| | Discounted lease rentals | (248 | ) | (205 | ) | (453 | ) | (502 | ) | (173 | ) | (675 | ) |
| | Other borrowings | (1,378 | ) | (514 | ) | (1,892 | ) | (2,430 | ) | (379 | ) | (2,809 | ) |
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| | Total borrowings | 6,474 | | (4,634 | ) | 1,840 | | 10,462 | | (5,015 | ) | 5,447 | |
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| | Total interest expense | 5,519 | | (6,280 | ) | (761 | ) | 8,834 | | (1,142 | ) | 7,692 | |
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| Net interest income | $ | 12,510 | | $ | (3,430 | ) | $ | 9,080 | | $ | 24,152 | | $ | (8,121 | ) | $ | 16,031 | |
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Provision for Credit Losses
TCF provided $5.4 million for credit losses in the second quarter of 2001, compared with $5.4 million for the same prior-year period. TCF provided $7.8 million for the first six months of 2001, compared with $6.4 million for the same period in 2000. Net loan and lease charge-offs were $3.9 million and $4.8 million during the second quarter and first six months of 2001, respectively, compared with $1.2 million and $1.1 million during the same 2000 periods. The increase in provisions and net loan and lease charge-offs from 2000 reflects the impact of the growth in the higher-risk commercial loan and lease portfolios coupled with increased charge-offs in the leasing portfolio. At June 30, 2001, the allowance for loan and lease losses totaled $69.7 million, compared with $66.7 million at December 31, 2000. See “Financial Condition - Allowance for Loan and Lease Losses.”
Non-Interest Income
Non-interest income is a significant source of revenues for TCF and an important factor in TCF’s results of operations. Providing a wide range of retail banking services is an integral component of TCF’s business philosophy and a major strategy for generating additional non-interest income. Excluding gains on sales of branches, non-interest income increased $14.3 million, or 17.6%, to $95.7 million for the second quarter of 2001, compared with $81.3 million for the same period in 2000. On the same basis, non-interest income increased $23.3 million, or 15.3%, to $176.4 million for the first six months of 2001, compared with $153.1 million for the same period in 2000. The increase was primarily due to increased fee and service charges and electronic funds transfer revenues, and reflects TCF’s expanded retail banking and customer base.
Electronic funds transfer revenues totaled $22 million and $41.4 million for the second quarter and first six months of 2001, respectively, representing increases of 10.4% and 11.1% from $19.9 million and $37.3 million for the same 2000 periods. These increases reflect TCF’s efforts to provide banking services through its EXPRESS TELLER ATM network and the TCF Express Cards. Included in electronic funds transfer revenues are Express Card interchange fees of $9.3 million and $17.3 million compared with $7.1 million and $13.1 million for the second quarter and first six months ended June 30, 2001 and 2000, respectively. The significant increase in these fees reflects an increase in the distribution of Express Cards, and an increase in utilization resulting from TCF’s phone card promotion which rewards customers with long distance minutes based on usage, a promotion begun in February 2000. TCF had 1.3 million EXPRESS TELLER ATM cards outstanding at June 30, 2001, of which 1.2 million were Express Cards. At June 30, 2000, TCF had 1.2 million EXPRESS TELLER ATM cards outstanding of which 1 million were Express Cards. The percentage of TCF’s checking account base with Express Cards increased to 79% during the second quarter of 2001, from 74.3% during the second quarter of 2000. The average number of transactions per month on active Express Cards increased to 11 during the second quarter of 2001, from 10 during the second quarter of 2000. TCF had 1,377 EXPRESS TELLER ATMs in its network at June 30, 2001, compared with 1,381 at June 30, 2000. Electronic funds transfer revenues in future periods may be negatively impacted by pending legislative proposals which, if enacted and not judicially restrained, could limit EXPRESS TELLER ATM fees.
Leasing revenues totaled $13 million and $21.2 million for the second quarter and first six months of 2001, respectively, compared with $10.1 million and $19.2 million for the same 2000 periods. The volume and type of new lease transactions and the resulting revenues may fluctuate from period to period based upon factors not within the control of TCF, such as economic conditions. The increase in total leasing revenues from the second quarter of 2000 is primarily due to increases of $1.6 million from sales-type lease transactions, $907,000 from operating lease transactions, and $352,000 in other revenues.
Mortgage banking revenues were $4.8 million and $7.4 million for the second quarter and first six months of 2001, respectively, compared with $2.5 million and $4.6 million for the same 2000 periods. The increase in revenues is attributable to increased gains on sales of loans and other income on higher origination and sales activity. The following table sets forth information about mortgage banking revenues:
| | Three Months Ended
June 30, | | | | Six Months Ended
June 30, | | | |
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| (Dollars in thousands) | 2001 | | 2000 | | $ Change | | 2001 | | 2000 | | $ Change | |
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| Servicing income | $ | 4,181 | | $ | 2,861 | | $ | 1,320 | | $ | 7,941 | | $ | 5,762 | | $ | 2,179 | |
| Less: Mortgage servicing amortization | 4,076 | | 1,130 | | 2,946 | | 6,580 | | 2,340 | | 4,240 | |
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| | Net servicing income | 105 | | 1,731 | | (1,626 | ) | 1,361 | | 3,422 | | (2,061 | ) |
| Gains on sales of loans | 3,373 | | 246 | | 3,127 | | 3,967 | | 495 | | 3,472 | |
| Other income | 1,359 | | 475 | | 884 | | 2,027 | | 692 | | 1,335 | |
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| | Total mortgage banking | $ | 4,837 | | $ | 2,452 | | $ | 2,385 | | $ | 7,355 | | $ | 4,609 | | $ | 2,746 | |
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During the first quarter of 2001, TCF recognized a gain of $3.3 million on the sale of one Michigan branch with $30 million in deposits, compared with gains of $3.9 million on the sale of three Michigan branches with $31 million in deposits during the second quarter of 2000.
Non-Interest Expense
Non-interest expense totaled $126 million for the second quarter of 2001, compared with $114.1 million for the same 2000 period. For the first six months of 2001, non-interest expense totaled $243.9 million, up 8.2% from $225.5 million for the same 2000 period. Compensation and employee benefits expense totaled $67.7 million and $130.4 million for the 2001 second quarter and first six months, respectively, compared with $59.8 million and $118.2 million for the comparable periods in 2000. The increase in compensation and employee benefits over the first six months of 2000 is primarily due to TCF’s continued leasing and de novo retail banking expansion as well as increased production in mortgage banking.
Advertising and promotions expenses totaled $5.6 million and $10.9 million for the second quarter and first six months of 2001, respectively, compared with $5 million and $9.1 million for the same periods in 2000. The increases in 2001, are primarily due to costs associated with expanded retail banking activities and promotional expenses associated with TCF Express Phone Card, where customers earn free long distance minutes for use of their debit cards. During the second quarter of 2001, TCF awarded over 25.2 million minutes under this promotion, compared with 12.2 million during the second quarter of 2000.
Other non-interest expense totaled $30.7 million and $58.6 million for the second quarter and first six months of 2001, respectively, reflecting an increase of 9.1% and 5.5% from $28.1 million and $55.5 million for the same 2000 periods, primarily the result of increased expenses associated with higher levels of activity in mortgage banking and expanded leasing operations.
Income Taxes
TCF recorded income tax expense of $31.5 million and $60.8 million for the second quarter and first six months of 2001, respectively, or 37.75% of income before income tax expense, compared with $29.2 million and $54.7 million, or 38.5% of income before income tax expense, for the comparable 2000 periods. The lower tax rates in 2001 primarily reflect lower state taxes.
FINANCIAL CONDITION
Investments and Securities Available for Sale
TCF purchased $550 million of mortgage-backed securities during the first quarter of 2001 in response to expected declines in the residential real estate loan portfolio.
Loans and Leases
The following table sets forth information about loans and leases held in TCF’s portfolio, excluding loans held for sale:
| (In thousands) | At
June 30,
2001 | | At
December 31,
2000 | | %
Change from
December 31,
2000 | |
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| Residential real estate | $ | 3,247,212 | | $ | 3,666,765 | | (11.4 | )% |
| Unearned premiums and deferred loan fees | 4,601 | | 7,066 | | (34.9 | ) |
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| | 3,251,813 | | 3,673,831 | | (11.5 | ) |
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| Consumer: | | | | | | |
| | Home equity | 2,292,238 | | 2,168,827 | | 5.7 | |
| | Other secured | 49,232 | | 56,812 | | (13.3 | ) |
| | Unsecured | 22,433 | | 25,175 | | (10.9 | ) |
| | Unearned discounts and deferred loan fees | (14,910 | ) | (16,680 | ) | 10.6 | |
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| | 2,348,993 | | 2,234,134 | | 5.1 | |
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| Commercial real estate: | | | | | | |
| | Apartments | 382,421 | | 324,666 | | 17.8 | |
| | Other permanent | 935,891 | | 871,614 | | 7.4 | |
| | Construction and development | 169,123 | | 178,372 | | (5.2 | ) |
| | Unearned discounts and deferred loan fees | (3,201 | ) | (2,811 | ) | 13.9 | |
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| | 1,484,234 | | 1,371,841 | | 8.2 | |
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| Commercial business | 418,274 | | 409,915 | | 2.0 | |
| Deferred loan costs | 524 | | 507 | | 3.4 | |
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| | 418,798 | | 410,422 | | 2.0 | |
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| Leasing and equipment finance: | | | | | | |
| | Loans: | | | | | | |
| | Equipment finance loans | 255,568 | | 204,351 | | 25.1 | |
| | Deferred loan costs | 2,939 | | 2,708 | | 8.5 | |
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| | 258,507 | | 207,059 | | 24.8 | |
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| | Lease financings: | | | | | | |
| | Direct financing leases | 680,529 | | 658,678 | | 3.3 | |
| | Sales-type leases | 36,735 | | 37,645 | | (2.4 | ) |
| | Lease residuals | 31,897 | | 30,426 | | 4.8 | |
| | Unearned income and deferred lease costs | (95,388 | ) | (94,506 | ) | (0.9 | ) |
| | Investment in leveraged leases | 16,955 | | 17,169 | | (1.2 | ) |
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| | 670,728 | | 649,412 | | 3.3 | |
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| | 929,235 | | 856,471 | | 8.5 | |
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| | $ | 8,433,073 | | $ | 8,546,699 | | (1.3 | ) |
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Approximately 69% of the home equity loan portfolio at June 30, 2001 consists of closed-end loans, compared with 68% at December 31, 2000. In addition, at June 30, 2001, 45% of this portfolio carries a variable interest rate, compared with 47% at December 31, 2000. At June 30, 2001, the weighted average loan-to-value ratio for the home equity loan portfolio was 77%, unchanged from December 31, 2000.
The following table sets forth additional information about the loan-to-value ratios for TCF’s home equity loan portfolio:
| (Dollars in thousands) | At June 30, 2001 | | At December 31, 2000 | |
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| | Balance | | Percent of
Total | | Balance | | Percent of
Total | |
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| Loan-to-Value Ratios (1): | | | | | | | | |
| | Over 100% (2) | $ | 50,182 | | 2.2 | % | $ | 45,633 | | 2.1 | % |
| | Over 90% to 100% | 500,101 | | 21.8 | | 486,536 | | 22.4 | |
| | Over 80 to 90% | 724,617 | | 31.6 | | 648,218 | | 29.9 | |
| | 80% or less | 1,017,338 | | 44.4 | | 988,440 | | 45.6 | |
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| | Total | $ | 2,292,238 | | 100.0 | % | $ | 2,168,827 | | 100.0 | % |
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| (1) | Loan-to-value is based on the loan amount (current outstanding balance on closed-end loans and the total commitment on lines of credit) plus deferred loan origination costs net of fees and refundable insurance premiums, if any, plus the original amount of senior liens, if any. Property values represent the most recent appraised value or property tax assessment value known to TCF. In most cases, this value was obtained at the loan origination date and does not reflect subsequent appreciation or depreciation in property values, if any. |
| | |
| (2) | Amount reflects the outstanding loan balance. The portion of the loan balance in excess of 100% of the property value is substantially less. |
| | | | | | | | | | | | | | |
TCF continues to expand its commercial business and commercial real estate lending activity to borrowers located in its primary midwestern markets. At June 30, 2001, approximately 87% of TCF’s commercial real estate loans outstanding were secured by properties located in its primary markets. In addition, approximately 98% of TCF’s commercial business and commercial real estate loans are secured either by properties or underlying business assets.
Total loan and lease originations for TCF’s leasing business were $264.3 million for the first six months of 2001, compared with $296.5 million for the same 2000 period. At June 30, 2001, the backlog of approved transactions related to TCF’s leasing business totaled $141.5 million, compared with $165.6 million at December 31, 2000. Included in this portfolio at June 30, 2001 are $149.5 million of loans and leases secured by trucks and trailers, compared with $152.3 million at December 31, 2000. TCF has substantially reduced its originations in the transportation segment. TCF’s expanded leasing activity is subject to the risk of cyclical downturns and other adverse economic developments affecting these industries and markets. TCF’s ability to grow its lease portfolio is dependent upon its ability to place new equipment in service. In an adverse economic environment, there is a lower demand for some types of equipment which TCF leases, resulting in a decline in the amount of new equipment being placed into service. TCF Leasing has originated most of its portfolio during recent periods, and consequently the performance of this portfolio may not be reflective of future results and credit quality.
Loan and lease originations, including loans held for sale, for the first six months of 2001 and 2000 were as follows:
| | Six Months Ended June 30, | |
| |
| |
| (In thousands) | 2001 | | 2000 | |
| |
| |
| |
| | | | | |
| Consumer (1) | $ | 741,559 | | $ | 524,848 | |
| Commercial | 309,397 | | 364,551 | |
| Leasing and equipment finance | 264,287 | | 296,493 | |
| Residential real estate (1) | 1,114,412 | | 427,612 | |
| |
| |
| |
| | Total | $ | 2,429,655 | | $ | 1,613,504 | |
| |
| |
| |
| | | | | | | |
(1) Includes loans held for sale.
Allowance for Loan and Lease Losses
A summary of the activity of the allowance for loan and lease losses and selected statistics follows:
| | Three Months Ended
June 30 , | | Six Months Ended
June 30, | |
| |
| |
| |
| | 2001 | | 2000 | | 2001 | | 2000 | |
| (Dollars in thousands) |
| |
| |
| |
| |
| | | | | | | | | |
| Balance at beginning of period | $ | 68,136 | | $ | 56,775 | | $ | 66,669 | | $ | 55,755 | |
| | Provision for credit losses | 5,422 | | 5,383 | | 7,847 | | 6,373 | |
| | Charge-offs | (5,026 | ) | (2,959 | ) | (7,285 | ) | (4,902 | ) |
| | Recoveries | 1,135 | | 1,798 | | 2,436 | | 3,771 | |
| | |
| |
| |
| |
| |
| | Net charge-offs | (3,891 | ) | (1,161 | ) | (4,849 | ) | (1,131 | ) |
| | |
| |
| |
| |
| |
| Balance at end of period | $ | 69,667 | | $ | 60,997 | | $ | 69,667 | | $ | 60,997 | |
| |
| |
| |
| |
| |
| | | | | | | | | |
| Ratio of annualized net loan and lease charge-offs to average loans and leases outstanding | .19 | % | .06 | % | .11 | % | .03 | % |
| | | | | | | | | |
| Allowance for loan and lease losses as a percentage of total loans and leases at period end | .83 | % | .74 | % | | | | |
| | | | | | | | | | | | | | |
Additional information on the allowance for loan and lease losses follows:
| | At or For the Six Months Ended June 30, 2001 | | At or For the Year Ended December 31, 2000 | |
| |
| |
| |
| (Dollars in thousands) | Allowance for Loan and Lease Losses | | Total Loans
and Leases | | Allowance as a % of Portfolio | | Net Charge
Offs
(Recoveries)(1) | | Allowance for Loan and Lease Losses | | Total Loans
and Leases | | Allowance as a % of Portfolio | | Net Charge Offs (Recoveries) | |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| Commercial real estate | $ | 22,060 | | $ | 1,484,234 | | 1.49 | % | - | % | $ | 20,753 | | $ | 1,371,841 | | 1.51 | % | (.02 | )% |
| Commercial business | 11,012 | | 418,798 | | 2.63 | | .03 | | 9,668 | | 410,422 | | 2.36 | | (.15 | ) |
| Consumer | 8,732 | | 2,348,993 | | .37 | | .09 | | 9,764 | | 2,234,134 | | .44 | | .12 | |
| Leasing and equipment finance | 9,257 | | 929,235 | | 1.00 | | .82 | | 7,583 | | 856,471 | | .89 | | .33 | |
| Unallocated | 16,139 | | - | | .19 | | N.A. | | 16,139 | | - | | .19 | | N.A. | |
| |
| |
| | | | | |
| |
| | | | | |
| | Subtotal | 67,200 | | 5,181,260 | | 1.30 | | .19 | | 63,907 | | 4,872,868 | | 1.31 | | .09 | |
| Residential real estate | 2,467 | | 3,251,813 | | .08 | | - | | 2,762 | | 3,673,831 | | .08 | | - | |
| |
| |
| | | | | |
| |
| | | | | |
| | Total | $ | 69,667 | | $ | 8,433,073 | | .83 | | .11 | | $ | 66,669 | | $ | 8,546,699 | | .78 | | .05 | |
| |
| |
| | | | | |
| |
| | | | | |
(1) Annualized.
N.A. Not applicable.
The ratio of annualized net loan charge-offs (recoveries) to average loans outstanding for TCF’s consumer portfolio were .12% and .09% for the three and six months ended June 30, 2001, respectively, compared with (.01)% and .04% for the same periods of 2000. Included in the net loan and lease charge-offs for the second quarter and first six months of 2001 were net recoveries related to the consumer finance automobile loans of $428,000 and $942,000 respectively, compared with $875,000 and $1.1 million for the same periods of 2000.
As previously noted, TCF provided $5.4 million for credit losses in the second quarter of 2001, compared with $5.4 million for the same period of 2000 and $2.4 million for the first quarter of 2001. At June 30, 2001, the allowance for loan and lease losses totaled $69.7 million, compared with $66.7 million at December 31, 2000 and $68.1 million at March 31, 2001. The increase in the provision for credit losses and the allowance for loan and lease losses during the second quarter of 2001 reflects the impact of the growth in the higher-risk commercial loan and lease portfolios coupled with increased charge-offs in the leasing portfolio.
On an ongoing basis, TCF’s loan and lease portfolios are reviewed and analyzed as to credit risk, performance, collateral value and quality. The allowance for loan and lease losses is maintained at a level believed to be appropriate by management to provide for probable loan and lease losses inherent in the portfolio. Management’s judgment as to the amount of the allowance, including the allocated and unallocated elements, is a result of ongoing review of larger individual loans and leases, the overall risk characteristics of the portfolios, changes in the character or size of the portfolios, the level of non-performing assets, historical net charge-off amounts, geographic location and prevailing economic conditions. The allowance for loan and lease losses is established for probable losses inherent in TCF’s loan and lease portfolios as of the balance sheet date, including known or anticipated problem loans and leases, as well as for loans and leases which are not currently known to require specific allowances. Loans and leases are charged off to the extent they are deemed to be uncollectible.
The amount of the allowance for loan and lease losses is highly dependent upon management’s estimates of variables affecting valuation, appraisals of collateral, evaluations of performance and status, and the amounts and timing of future cash flows expected to be received on impaired loans. Such estimates, appraisals, evaluations and cash flows may be subject to frequent adjustments due to changing economic prospects of borrowers, lessees or properties. These estimates are reviewed periodically and adjustments, if necessary, are reported in the provision for credit losses in the periods in which they become known.
Non-Performing Assets
Non-performing assets, consisting of non-accrual loans and leases and other real estate owned, totaled $43.8 million, or .52% of net loans and leases at June 30, 2001, compared with $46.1 million, or .54% at December 31, 2000. Included in non-accrual leasing and equipment finance at June 30, 2001 are $1.5 million of leases that have been funded on a non-recourse basis by third-party financial institutions. Approximately 63% of non-performing assets at June 30, 2001 consist of, or are secured by, residential real estate. Non-performing assets are summarized in the following table:
| | June 30, | | December 31, | |
| (Dollars in thousands) | 2001 | | 2000 | |
| |
| |
| |
| Non-accrual loans and leases: | | | | |
| | Consumer | $ | 13,397 | | $ | 13,027 | |
| | Residential real estate | 5,985 | | 4,829 | |
| | Commercial real estate | 4,958 | | 5,820 | |
| | Commercial business | 665 | | 236 | |
| | Leasing and equipment finance, net | 7,981 | | 7,376 | |
| | |
| |
| |
| | Total non-accrual loans and leases, net | 32,986 | | 31,288 | |
| | Non-recourse discounted lease rentals | 1,545 | | 3,910 | |
| | |
| |
| |
| | Total non-accrual loans and leases, gross | 34,531 | | 35,198 | |
| Other real estate owned | 9,294 | | 10,869 | |
| |
| |
| |
| | | | | |
| | Total non-performing assets, gross | $ | 43,825 | | $ | 46,067 | |
| |
| |
| |
| | | | | |
| | Total non-performing assets, net | $ | 42,280 | | $ | 42,127 | |
| |
| |
| |
| | | | | |
| Accruing loans and leases 90 days or more past due | $ | 6,741 | | $ | 5,020 | |
| |
| |
| |
| | | | | |
| Gross non-performing assets as a percentage of net loans and leases | .52 | % | .54 | % |
| | | | | |
| Gross non-performing assets as a percentage of total assets | .38 | % | .41 | % |
| | | | | | | | |
The over 30-day delinquency rate on TCF’s loans and leases (excluding loans held for sale and non-accrual loans and leases) was .65% of loans and leases outstanding at June 30, 2001, compared with .69% at year-end 2000. TCF’s delinquency rates are determined using the contractual method. The following table sets forth information regarding TCF’s over 30-day delinquent loan and lease portfolio, excluding loans held for sale and non-accrual loans and leases:
| | At June 30, 2001 | | At December 31, 2000 | |
| |
| |
| |
| | Principal | | Percentage of | | Principal | | Percentage of | |
| (Dollars in thousands) | Balances | | Portfolio | | Balances | | Portfolio | |
| |
| |
| |
| |
| |
| | | | | | | | | |
| Consumer | $ | 22,129 | | .95 | % | $ | 20,628 | | .93 | % |
| Residential real estate | 13,658 | | .42 | | 16,971 | | .46 | |
| Commercial real estate | 101 | | .01 | | 1,793 | | .13 | |
| Commercial business | 1,345 | | .32 | | 3,958 | | .96 | |
| Leasing and equipment finance | 17,739 | | 1.93 | | 15,508 | | 1.83 | |
| |
| | | |
| | | |
| | Total | $ | 54,972 | | .65 | | $ | 58,858 | | .69 | |
| | |
| | | |
| | | |
TCF’s over 30-day delinquency rate on total consumer loans was .95% at June 30, 2001, compared to .93% at year-end 2000. TCF’s over 30-day delinquency on total leasing and equipment finance increased to 1.93% at June 30, 2001 from 1.83% at December 31, 2000. Included in delinquent leasing and equipment finance at June 30, 2001 are $1.5 million of leases that have been funded on a non-recourse basis by third-party financial institutions. Management continues to monitor the leasing and equipment finance and consumer loan portfolios, which will generally have higher delinquencies than other categories.
In addition to the non-accrual loans and leases, there were commercial real estate and commercial business loans with an aggregate principal balance of $58.4 million outstanding at June 30, 2001 for which management has concerns regarding the ability of the borrowers to meet existing repayment terms. This amount consists of loans that were classified for regulatory purposes as substandard or doubtful, or were to borrowers that currently are experiencing financial difficulties or that management believes may experience financial difficulties in the future. This compares with $19.9 million of such loans at December 31, 2000. Although these loans are secured by commercial real estate or other corporate assets, they may be subject to future modifications of their terms or may become non-performing. The recorded investment in loans that are considered to be impaired was $8 million and $6.8 million at June 30, 2001 and December 31, 2000, respectively. The related allowance for credit losses was $1.7 million at June 30, 2001, compared with $1.3 million at December 31, 2000. All of the impaired loans were on non-accrual status. The average recorded investment in impaired loans during the three months ended June 30, 2001 was $8.4 million, compared with $7.7 million for the 2001 first quarter. Management monitors the performance and classification of such loans and leases and the financial condition of these borrowers.
Deposits
Checking, savings and money market deposits are an important source of lower cost funds and fee income for TCF. Deposits totaled $6.9 billion at June 30, 2001, up $24.3 million from December 31, 2000. The increase in deposits is net of the impact of the previously noted sale of one branch during the first six months of 2001. Lower interest-cost checking, savings and money market deposits totaled $4.3 billion, up $246.5 million from December 31, 2000, and comprised 62.6% of total deposits at June 30, 2001. The average annualized fee revenue per retail checking account for the first six months of 2001 was $207, compared with $175 for the comparable 2000 period. Higher interest-cost certificates of deposit decreased $222.2 million from December 31, 2000 as a result of the growth in other lower cost deposits, the availability of other, lower cost funding sources and TCF’s reluctance to match higher certificate of deposit pricing by competitors. TCF’s weighted-average rate for deposits, including non-interest bearing deposits, was 2.31% at June 30, 2001, compared with 3.12% at December 31, 2000.
TCF continued to expand its supermarket banking franchise by opening 7 new branches during the 2001 second quarter. TCF now has 222 supermarket branches, up from 207 such branches a year ago. Additional information regarding TCF’s supermarket branches is as follows:
| Supermarket Banking Summary: | At or for the Six Months
Ended June 30, | | | | | |
| |
| | | | | |
| (Dollars in thousands) | 2001 | | 2000 | | Increase (Decrease) | | % Change | |
| |
| |
| |
| |
| |
| Number of branches | 222 | | 207 | | 15 | | 7.2 | % |
| Number of deposit accounts | 699,597 | | 614,983 | | 84,614 | | 13.8 | |
| Deposits: | | | | | | | | |
| | Checking | $ | 544,111 | | $ | 436,220 | | $ | 107,891 | | 24.7 | |
| | Savings | 165,016 | | 142,878 | | 22,138 | | 15.5 | |
| | Money market | 120,461 | | 86,837 | | 33,624 | | 38.7 | |
| | Certificates | 312,339 | | 305,214 | | 7,125 | | 2.3 | |
| | |
| |
| |
| | | |
| | Total deposits | $ | 1,141,927 | | $ | 971,149 | | $ | 170,778 | | 17.6 | |
| | |
| |
| |
| | | |
| | | | | | | | | |
| Average rate on deposits | 1.91 | % | 2.35 | % | (.44 | )% | (18.7 | ) |
| |
| |
| |
| | | |
| Total fees and other revenues (quarter ended) | $ | 35,074 | | $ | 28,497 | | $ | 6,577 | | 23.1 | |
| |
| |
| |
| | | |
| Total fees and other revenues (year-to-date) | $ | 64,710 | | $ | 51,811 | | $ | 12,899 | | 24.9 | |
| |
| |
| |
| | | |
| Consumer loans outstanding | $ | 263,328 | | $ | 213,498 | | $ | 49,830 | | 23.3 | |
| |
| |
| |
| | | |
| | | | | | | | | | | | | |
Borrowings
Borrowings totaled $3.6 billion as of June 30, 2001, up $387.3 million from year-end 2000. The increase was primarily due to increases of $150 million in FHLB advances, $135.9 million in treasury, tax and loan notes, $106.2 million in securities sold under repurchase agreements and $39 million in federal funds purchased, partially offset by decreases of $28.8 million in subordinated debt and $18.1 million in discounted lease rentals. Included in FHLB advances at June 30, 2001 are $1.8 billion of fixed-rate advances which are callable at par on certain anniversary dates and quarterly thereafter until maturity. If called, the FHLB will provide replacement funding at the then-prevailing market rate of interest for the remaining term-to-maturity of the advances, subject to standard terms and conditions. The weighted-average rate on borrowings decreased to 5.26% at June 30, 2001, from 6.23% at December 31, 2000. At June 30, 2001, borrowings with a maturity of one year or less totaled $1.4 billion.
On July 2, 2001, TCF exercised its right of redemption on the $28.8 million of 9.50% senior subordinated debentures at par plus accrued earnings to the date of redemption, in accordance with redemption provisions of the debentures.
Stockholders’ Equity
Stockholders’ equity at June 30, 2001 was $890.4 million, or 7.7% of total assets, down from $910.2 million, or 8.1% of total assets, at December 31, 2000. The decrease in stockholders’ equity is primarily due to the repurchase of 2.3 million shares of TCF’s common stock at a cost of $88.1 million and the payment of $39.1 million in dividends on common stock, partially offset by net income of $100.2 million for the first six months of 2001. On April 30, 2001, TCF’s Board of Directors authorized another repurchase of up to 5% of TCF’s common stock, or approximately 3.9 million shares. At June 30, 2001, TCF has 4.2 million shares remaining in stock repurchase programs authorized by its Board of Directors. On July 24, 2001, TCF declared a quarterly dividend of 25 cents per common share, payable on August 31, 2001 to shareholders of record as of August 3, 2001.
MARKET RISK - INTEREST-RATE RISK
TCF’s results of operations are dependent to a large degree on its net interest income, which is the difference between interest income and interest expense, and the Company’s ability to manage its interest-rate risk. Although TCF manages other risks, such as credit and liquidity risk, in the normal course of its business, the Company considers interest-rate risk to be its most significant market risk. TCF, like most financial institutions, has a material interest-rate risk exposure to changes in both short-term and long-term interest rates as well as variable index interest rates (e.g., prime). Since TCF does not hold a trading portfolio, the Company is not exposed to market risk from trading activities.
Like most financial institutions, TCF’s interest income and cost of funds are significantly affected by general economic conditions and by policies of regulatory authorities. The mismatch between maturities and interest-rate sensitivities of assets and liabilities results in interest-rate risk. Although the measure is subject to a number of assumptions and is only one of a number of measurements, management believes the interest-rate gap (difference between interest-earnings assets and interest-bearing liabilities repricing within a given period) is an important indication of TCF’s exposure to interest-rate risk and the related volatility of net interest income in a changing interest rate environment. In addition to the interest-rate gap analysis, management also utilizes a simulation model to measure and manage TCF’s interest-rate risk.
For an institution with a negative interest-rate gap for a given period, the amount of its interest-bearing liabilities maturing or otherwise repricing within such period exceeds the amount of its interest-earning assets repricing within the same period. In a rising interest-rate environment, institutions with negative interest-rate gaps will generally experience more immediate increases in the cost of their liabilities than in the yield on their assets. Conversely, the yield on assets of institutions with negative interest-rate gaps will generally decrease more slowly than the cost of their funds in a falling interest-rate environment.
TCF’s Asset/Liability Management Committee manages TCF’s interest-rate risk based on interest rate expectations and other factors. The principal objective of TCF’s asset/liability management activities is to provide maximum levels of net interest income while maintaining acceptable levels of interest-rate risk and liquidity risk and facilitating the funding needs of the Company. Management’s estimates and assumptions could be significantly affected by external factors such as prepayment rates other than those assumed, early withdrawals of deposits, changes in the correlation of various interest-bearing instruments, competition and a general rise in interest rates. Decisions by management to purchase or sell assets, or retire debt could change the maturity/repricing and spread relationships. In addition, TCF’s interest-rate risk will increase during periods of rising interest rates due to resulting slower prepayments on loans and mortgage-backed securities, and the increased likelihood that the Federal Home Loan Bank (“FHLB”) will exercise its option to call certain of TCF’s longer-term FHLB advances. See “Financial Condition - Borrowings.” TCF’s one-year adjusted interest-rate gap was a negative $353 million, or (3)% of total assets, at June 30, 2001, compared with a negative $215 million, or (2)% of total assets, at December 31, 2000.
Recent Accounting Developments
In July 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 141, “Business Combinations,” and SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 as well as all purchase method business combinations completed after June 30, 2001. SFAS No. 141 also specifies criteria intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart from goodwill. SFAS No. 142 will require that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS No. 142.
The Company is required to adopt the provisions of SFAS No. 141 immediately, for all business combinations initiated after July 1, 2001 and SFAS No. 142 effective January 1, 2002. Furthermore, any goodwill and any intangible asset determined to have an indefinite useful life that are acquired in a purchase business combination completed after June 30, 2001 will no longer be amortized, but will continue to be evaluated for impairment in accordance with the appropriate pre-SFAS No. 142 accounting literature. Goodwill and intangible assets with indefinite useful lives acquired in business combinations completed before July 1, 2001 will continue to be amortized until SFAS No. 142 is adopted on January 1, 2002.
Upon adoption of SFAS No. 142, TCF will be required to evaluate its existing intangible assets and goodwill that were acquired in prior purchase business combinations, and make any necessary reclassifications of intangible assets in order to conform with the new criteria of SFAS No. 141 for recognition apart from goodwill. Upon adoption of SFAS No. 142, the Company will be required to reassess the useful lives and residual values of all intangible assets acquired in purchase business combinations, and make any necessary amortization period adjustments by the end of the first quarter after adoption. In addition, to the extent an intangible asset is identified as having an indefinite useful life, as in the case of goodwill, the Company will be required to test the intangible asset for impairment in accordance with the provisions of SFAS No. 142 within the first quarter of 2002. Any impairment loss will be measured as of the date of adoption and recognized as a cumulative effect of a change in accounting principle during the first quarter of 2002.
As of the date of adoption, the Company expects to have unamortized goodwill in the amount of $145.5 million and unamortized identifiable intangible assets (deposit base intangibles) in the amount of $9.2 million, all of which will be subject to the transition provisions of SFAS Nos. 141 and 142. Amortization expense related to goodwill was $7.7 million ($7.5 million after-tax) and $3.9 million ($3.8 million after-tax) for the year ended December 31, 2000 and the six months ended June 30, 2001, respectively. Amortization of goodwill for both the years ended December 31, 2001 and 2002 is scheduled at $7.7 million ($7.6 million after-tax). Management has not determined the impact of adopting these Statements on TCF’s financial statements, including whether any transitional impairment losses will be required to be recognized as the cumulative effect of a change in accounting principle.
Earnings Teleconference
TCF hosts quarterly conference calls to discuss its financial results. Additional information regarding TCF’s conference calls can be obtained from the investor relations section within TCF’s web site at www.tcfexpress.com or contact TCF’s Corporate Communications Department at (952) 745-2760.
Legislative, Legal and Regulatory Developments
Federal and state legislation imposes numerous legal and regulatory requirements on financial institutions. Future legislative or regulatory change, or changes in enforcement practices or court rulings, may have a dramatic and potentially adverse impact on TCF and its bank and other subsidiaries
Forward-Looking Information
This report and other reports issued by the Company, including reports filed with the Securities and Exchange Commission, may contain “forward-looking” statements that deal with future results, plans or performance. In addition, TCF’s management may make such statements orally to the media, or to securities analysts, investors or others. Forward-looking statements deal with matters that do not relate strictly to historical facts. TCF’s future results may differ materially from historical performance and forward-looking statements about TCF’s expected financial results or other plans are subject to a number of risks and uncertainties. These include but are not limited to possible legislative changes and adverse economic, business and competitive developments such as shrinking interest margins; deposit outflows; reduced demand for financial services and loan and lease products; changes in accounting policies or guidelines, or monetary and fiscal policies of the federal government; changes in credit and other risks posed by TCF’s loan, lease and investment portfolios; technological, computer-related or operational difficulties; adverse changes in securities markets; results of litigation or other significant uncertainties.
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Supplementary Information
| SELECTED QUARTERLY FIANANCIAL DATA (Unaudited) | |
(Dollars in thousands,
except per-share data) | At
June 30,
2001 | | At
March 31,
2001 | | At
Dec. 31,
2000 | | At
Sept. 30,
2000 | | At
June 30,
2000 | | At
March 31,
2000 | | |
| |
| |
| |
| |
| |
| |
| | |
| SELECTED FINANCIAL CONDITION DATA: | | | | | | | | | | | | | |
| Total assets | $ | 11,628,663 | | $ | 11,845,124 | | $ | 11,197,462 | | $ | 10,980,000 | | $ | 10,905,705 | | $ | 10,761,821 | | |
| Investments | 162,681 | | 242,065 | | 134,059 | | 132,173 | | 131,635 | | 155,265 | | |
| Securities available for sale | 1,843,871 | | 1,928,338 | | 1,403,888 | | 1,413,218 | | 1,436,836 | | 1,470,532 | | |
| Residential real estate loans | 3,251,813 | | 3,450,311 | | 3,673,831 | | 3,797,023 | | 3,866,659 | | 3,932,944 | | |
| Other loans and leases | 5,181,260 | | 5,010,256 | | 4,872,868 | | 4,562,644 | | 4,364,491 | | 4,158,849 | | |
| Deposits | 6,916,145 | | 7,030,818 | | 6,891,824 | | 6,810,921 | | 6,719,962 | | 6,823,248 | | |
| Borrowings | 3,571,501 | | 3,675,428 | | 3,184,245 | | 3,115,066 | | 3,205,732 | | 2,975,080 | | |
| Stockholders' equity | 890,369 | | 895,066 | | 910,220 | | 859,444 | | 807,382 | | 780,311 | | |
| | | | | | | | | | | | | | |
| SELECTED OPERATIONS DATA: | | | | | | | | | | | | | |
| Interest income | $ | 212,726 | | $ | 212,561 | | $ | 214,408 | | $ | 210,709 | | $ | 204,407 | | $ | 197,157 | | |
| Interest expense | 93,448 | | 98,770 | | 103,584 | | 100,035 | | 94,209 | | 90,317 | | |
| |
| |
| |
| |
| |
| |
| | |
| | Net interest income | 119,278 | | 113,791 | | 110,824 | | 110,674 | | 110,198 | | 106,840 | | |
| Provision for credit losses | 5,422 | | 2,425 | | 4,711 | | 3,688 | | 5,383 | | 990 | | |
| |
| |
| |
| |
| |
| |
| | |
| | Net interest income after provision for credit losses | 113,856 | | 111,366 | | 106,113 | | 106,986 | | 104,815 | | 105,850 | | |
| | |
| |
| |
| |
| |
| |
| | |
| Non-interest income: | | | | | | | | | | | | | |
| | Fees and other revenues | 95,652 | | 80,741 | | 86,343 | | 84,069 | | 81,308 | | 71,743 | | |
| | Gains on sales of branches | - | | 3,316 | | 8,947 | | - | | 3,866 | | - | | |
| | |
| |
| |
| |
| |
| |
| | |
| | Total non-interest income | 95,652 | | 84,057 | | 95,290 | | 84,069 | | 85,174 | | 71,743 | |
| | |
| |
| |
| |
| |
| |
| |
| Non-interest expense: | | | | | | | | | | | | | |
| | Amortization of goodwill | 1,945 | | 1,944 | | 1,940 | | 1,937 | | 1,915 | | 1,914 | | |
| | Other non-interest expense | 124,009 | | 116,012 | | 114,641 | | 113,189 | | 112,200 | | 109,466 | | |
| | |
| |
| |
| |
| |
| |
| | |
| | Total non-interest expense | 125,954 | | 117,956 | | 116,581 | | 115,126 | | 114,115 | | 111,380 | |
| | |
| |
| |
| |
| |
| |
| |
| Income before income tax expense | 83,554 | | 77,467 | | 84,822 | | 75,929 | | 75,874 | | 66,213 | | |
| Income tax expense | 31,540 | | 29,244 | | 32,657 | | 29,232 | | 29,212 | | 25,492 | | |
| |
| |
| |
| |
| |
| |
| | |
| | Net income | $ | 52,014 | | $ | 48,223 | | $ | 52,165 | | $ | 46,697 | | $ | 46,662 | | $ | 40,721 | | |
| |
| |
| |
| |
| |
| |
| | |
| Per common share: | | | | | | | | | | | | | |
| | Basic earnings | $ | .68 | | $ | .62 | | $ | .67 | | $ | .60 | | $ | .60 | | $ | .51 | | |
| | |
| |
| |
| |
| |
| |
| | |
| | Diluted earnings | $ | .67 | | $ | .62 | | $ | .66 | | $ | .59 | | $ | .59 | | $ | .51 | | |
| | |
| |
| |
| |
| |
| |
| | |
| | Diluted cash earnings (1) | $ | .70 | | $ | .64 | | $ | .68 | | $ | .61 | | $ | .61 | | $ | .53 | | |
| | |
| |
| |
| |
| |
| |
| | |
| | Dividends declared | $ | .25 | | $ | .25 | | $ | .2125 | | $ | .2125 | | $ | .2125 | | $ | .1875 | | |
| | |
| |
| |
| |
| |
| |
| | |
| | | | | | | | | | | | | | |
| MORTGAGE BANKING REVENUES: | | | | | | | | | | | | | |
| Servicing income | $ | 4,181 | | $ | 3,760 | | $ | 3,739 | | $ | 3,141 | | $ | 2,861 | | $ | 2,901 | | |
| Less: Mortgage servicing amortization | 4,076 | | 2,504 | | 1,779 | | 1,207 | | 1,130 | | 1,210 | | |
| |
| |
| |
| |
| |
| |
| | |
| | Net servicing income | 105 | | 1,256 | | 1,960 | | 1,934 | | 1,731 | | 1,691 | | |
| Gains on sales of loans | 3,373 | | 594 | | 637 | | 215 | | 246 | | 249 | | |
| Other income | 1,359 | | 668 | | 563 | | 600 | | 479 | | 213 | | |
| |
| |
| |
| |
| |
| |
| | |
| | Total mortgage banking | $ | 4,837 | | $ | 2,518 | | $ | 3,160 | | $ | 2,749 | | $ | 2,456 | | $ | 2,153 | | |
| | |
| |
| |
| |
| |
| |
| | |
| | | | | | | | | | | | | | |
| FINANCIAL RATIOS: (2) | | | | | | | | | | | | | |
| Return on average assets | 1.78 | % | 1.71 | % | 1.89 | % | 1.71 | % | 1.73 | % | 1.53 | % | |
| Cash return on average assets (1) | 1.84 | | 1.77 | | 1.96 | | 1.78 | | 1.80 | | 1.60 | | |
| Return on average realized common equity | 23.22 | | 21.47 | | 23.17 | | 21.52 | | 22.19 | | 19.24 | | |
| Return on average common equity | 23.37 | | 21.54 | | 23.78 | | 22.55 | | 23.72 | | 20.55 | | |
| Cash return on average realized common equity (1) | 24.07 | | 22.31 | | 24.01 | | 22.39 | | 23.09 | | 20.12 | | |
| Average total equity to average assets | 7.61 | | 7.93 | | 7.95 | | 7.60 | | 7.28 | | 7.44 | | |
| Average realized tangible equity to average assets | 6.28 | | 6.51 | | 6.66 | | 6.43 | | 6.23 | | 6.35 | | |
| Average tangible equity to average assets | 6.23 | | 6.48 | | 6.45 | | 6.06 | | 5.72 | | 5.84 | | |
| Net interest margin (3) | 4.40 | | 4.35 | | 4.33 | | 4.38 | | 4.38 | | 4.32 | | |
| |
| (1) | Excludes amortization and reduction of goodwill, net of income tax benefit. | |
| (2) | Annualized. | |
| (3) | Net interest income divided by average interest-earning assets. | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Supplementary Information (Continued)
Consolidated Average Balance Sheets, Interest and Dividends
Earned or Paid, and Related Interest Yields and Rates
| | Six Months Ended June 30, | |
| |
| |
| | 2001 | | 2000 | |
| |
| |
| |
| (Dollars in thousands) | Average
Balance | | Interest (1) | | Yields and Rates (2) | | Average
Balance | | Interest (1) | | Yields and Rates (2) | |
| |
| |
| |
| |
| |
| |
| |
| Assets: | | | | | | | | | | | | |
| | Investments | $ | 163,405 | | $ | 4,786 | | 5.86 | % | $ | 137,401 | | $ | 4,761 | | 6.93 | % |
| | Securities available for sale (3) | 1,693,749 | | 55,968 | | 6.61 | | 1,546,089 | | 51,020 | | 6.60 | |
| | Loans held for sale | 351,705 | | 12,237 | | 6.96 | | 211,481 | | 8,095 | | 7.66 | |
| | Loans and leases: | | | | | | | | | | | | |
| | Residential real estate | 3,441,536 | | 123,012 | | 7.15 | | 3,926,183 | | 138,979 | | 7.08 | |
| | Commercial real estate | 1,423,174 | | 57,673 | | 8.10 | | 1,138,888 | | 48,371 | | 8.49 | |
| | Commercial business | 408,670 | | 16,484 | | 8.07 | | 360,438 | | 15,972 | | 8.86 | |
| | Consumer | 2,270,555 | | 109,142 | | 9.61 | | 2,094,362 | | 104,945 | | 10.02 | |
| | Leasing and equipment finance | 899,131 | | 45,985 | | 10.23 | | 558,437 | | 29,421 | | 10.54 | |
| | |
| |
| | | |
| |
| | | |
| | Total loans and leases (4) | 8,443,066 | | 352,296 | | 8.35 | | 8,078,308 | | 337,688 | | 8.36 | |
| | |
| |
| | | |
| |
| | | |
| | Total interest-earning assets | 10,651,925 | | 425,287 | | 7.99 | | 9,973,279 | | 401,564 | | 8.05 | |
| | | | |
| | | | | |
| | | |
| | Other assets (5) | 847,534 | | | | | | 752,913 | | | | | |
| | |
| | | | | |
| | | | | |
| | Total assets | $ | 11,499,459 | | | | | | $ | 10,726,192 | | | | | |
| |
| | | | | |
| | | | | |
| Liabilities and Stockholders' Equity: | | | | | | | | | | | | |
| | Non-interest bearing deposits | $ | 1,509,919 | | | | | | $ | 1,279,164 | | | | | |
| | Interest-bearing deposits: | | | | | | | | | | | | |
| | Checking | 764,636 | | 2,175 | | .57 | | 741,052 | | 2,188 | | .59 | |
| | Savings | 999,221 | | 4,560 | | .91 | | 1,061,404 | | 5,885 | | 1.11 | |
| | Money market | 871,020 | | 12,653 | | 2.91 | | 716,545 | | 10,345 | | 2.89 | |
| | Certificates | 2,710,817 | | 75,261 | | 5.55 | | 2,846,714 | | 73,986 | | 5.20 | |
| | |
| |
| | | |
| |
| | | |
| | Total interest-bearing deposits | 5,345,694 | | 94,649 | | 3.54 | | 5,365,715 | | 92,404 | | 3.44 | |
| | |
| |
| | | |
| |
| | | |
| | Total deposits | 6,855,613 | | 94,649 | | 2.76 | | 6,644,879 | | 92,404 | | 2.78 | |
| | |
| |
| | | |
| |
| | | |
| Borrowings: | | | | | | | | | | | | |
| | Securities sold under repurchase agreements and federal funds purchased | 1,215,055 | | 32,033 | | 5.27 | | 842,737 | | 25,421 | | 6.03 | |
| | FHLB advances | 1,997,382 | | 56,158 | | 5.62 | | 1,882,260 | | 53,839 | | 5.72 | |
| | Discounted lease rentals | 154,917 | | 6,277 | | 8.10 | | 167,218 | | 6,952 | | 8.31 | |
| | Other borrowings | 94,497 | | 3,101 | | 6.56 | | 167,833 | | 5,910 | | 7.04 | |
| | |
| |
| | | |
| |
| | | |
| | Total borrowings | 3,461,851 | | 97,569 | | 5.64 | | 3,060,048 | | 92,122 | | 6.02 | |
| | |
| |
| | | |
| |
| | | |
| | Total interest-bearing liabilities | 8,807,545 | | 192,218 | | 4.36 | | 8,425,763 | | 184,526 | | 4.38 | |
| | |
| |
| | | |
| |
| | | |
| Total deposits and borrowings | 10,317,464 | | 192,218 | | 3.73 | | 9,704,927 | | 184,526 | | 3.80 | |
| | | |
| | | | | |
| | | |
| Other liabilities (5) | 289,520 | | | | | | 230,174 | | | | | |
| |
| | | | | |
| | | | | |
| | Total liabilities | 10,606,984 | | | | | | 9,935,101 | | | | | |
| Stockholders' equity (5) | 892,475 | | | | | | 791,091 | | | | | |
| |
| | | | | |
| | | | | |
| | Total liabilities and stockholders' equity | $ | 11,499,459 | | | | | | $ | 10,726,192 | | | | | |
| |
| | | | | |
| | | | | |
| Net interest income and margin | | | $ | 233,069 | | 4.38 | % | | | $ | 217,038 | | 4.35 | % |
| | | |
| |
| | | |
| |
| |
|
| (1) | Tax-exempt income was not significant and thus has not been presented on a tax equivalent basis. Tax-exempt income of $82,000 and $93,000 was recognized during the six months ended June 30, 2001 and 2000, respectively. |
| (2) | Annualized. |
| (3) | Average balance and yield of securities available for sale are based upon the historical amortized cost. |
| (4) | Average balance of loans and leases includes non-accrual loans and leases, and is presented net of unearned income. |
| (5) | Average balance is based upon month-end balances. |
| | | | | | | | | | | | | | | | | | | | | |
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, TCF is a party to legal proceedings arising out of its general lending and operating activities. Management, after review with its legal counsel, believes that the ultimate disposition of its current litigation will not have a material effect on TCF’s financial condition. TCF is and expects to become engaged in a number of foreclosure proceedings and other collection actions as part of its loan collection activities. From time to time, borrowers have also brought actions against TCF, in some cases claiming substantial amounts of damages. There have been a considerable number of consumer class actions brought against banks and financial service companies and TCF is subject to the risk of such actions.
On November 2, 1993, TCF National Bank Minnesota (“TCF Minnesota,” now known as “TCF National Bank”) filed a complaint in the United States Court of Federal Claims seeking monetary damages from the United States for breach of contract, taking of property without just compensation and deprivation of property without due process. TCF Minnesota’s claim is based on the government’s breach of contract in connection with TCF Minnesota’s acquisitions of certain savings institutions prior to the enactment of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”), which contracts allowed TCF Minnesota to treat the “supervisory goodwill” created by the acquisitions as an asset that could be counted toward regulatory capital, and provided for other favorable regulatory accounting treatment. The United States has not yet answered TCF Minnesota’s complaint. TCF Minnesota’s complaint involves approximately $80.3 million in supervisory goodwill.
In August 1995, TCF National Bank Michigan (“TCF Michigan,” now known as “TCF National Bank”) filed with the United States Court of Federal Claims a complaint seeking monetary damages from the United States for breach of contract, taking of property without just compensation and deprivation of property without due process. TCF Michigan’s claim is based on the government’s breach of contract in connection with TCF Michigan’s acquisitions of certain savings institutions prior to the enactment of FIRREA in 1989, which contracts allowed TCF Michigan to treat the “supervisory goodwill” created by the acquisitions as an asset that could be counted toward regulatory capital, and provided for other favorable regulatory accounting treatment. The United States has not yet answered TCF Michigan’s complaint. TCF Michigan’s complaint involves approximately $87.3 million in supervisory goodwill.
On July 1, 1996, the United States Supreme Court issued a decision affirming the August 30, 1995 decision of the United States Court of Appeals for the Federal Circuit, which decision had affirmed the Court of Federal Claims’ liability determinations in three other “supervisory goodwill” cases, consolidated for review under the title Winstar Corp. v. United States, 116 S.Ct. 2432 (1996). In rejecting the United States’ consolidated appeal from the Court of Federal Claims’ decisions, the Supreme Court held in Winstar that the United States had breached contracts it had entered into with the plaintiffs which provided for the treatment of supervisory goodwill, created through the plaintiffs’ acquisitions of failed or failing savings institutions, as an asset that could be counted toward regulatory capital. Two of the three cases consolidated in the Supreme Court proceedings have since been tried before the Court of Federal Claims on the issue of damages, and the third was settled without trial. In one of the cases that proceeded to a damages trial, Glendale Federal Bank, FSB v. United States, 43 Fed. Cl. 390 (1999), the Court of Federal Claims issued a decision on April 9, 1999, awarding the plaintiff in that case $908,948,000 in restitution and non-overlapping reliance damages. The other case which went to trial was settled in June 1998.
The Glendale damages decision was appealed to the United States Court of Appeals for the Federal Circuit, and on February 16, 2001, the Federal Circuit vacated the trial court’s award of damages. The Federal Circuit held that the trial court’s award of approximately $530 million in restitution was erroneous given the facts of the case. The Federal Circuit concluded that for purposes of measuring the loss suffered by Glendale as a result of the Government’s breach, reliance damages provided a “firmer and more rational basis” than the alternative damages theories argued by the parties. The Federal Circuit did not affirm or reverse the trial court’s award of approximately $380 million in non- overlapping post-breach reliance damages, but instead remanded the case to the Court of Federal Claims for a determination of the total reliance damages to which Glendale may be entitled.
On December 22, 1997, the Court of Federal Claims issued a decision finding the existence of contracts and governmental breaches of those contracts in four other “supervisory goodwill” cases, consolidated for purposes of that decision only under the title California Federal Bank v. United States, 39 Fed. Cl. 753 (1997). In reaching its decision, the Court of Federal Claims rejected a number of “common issue” defenses that the government has raised in a number of “supervisory goodwill” cases. In November 1998, the Court of Federal Claims issued another decision in the California Federal case prohibiting the plaintiff in that case from offering evidence as to a lost profits theory of damages. A two-month trial regarding the plaintiff’s other damages theories in that case was concluded in early March 1999. On April 21, 1999, the Court of Federal Claims entered judgment for the plaintiff in California Federal, and awarded the plaintiff $22,966,523.42 in damages under a cost of replacement capital theory. California Federal Bank v. United States, 43 Fed Cl. 445 (1999). The California Federal decision was appealed to the United States Court of Appeals for the Federal Circuit, and on April 2, 2001, the Federal Circuit affirmed-in-part the judgment of the Court of Federal Claims, vacated that judgment in part, and remanded the case for further proceedings in the trial court. The Federal Circuit affirmed the Court of Federal Claims’ decision on liability, and held that the parties had entered into “supervisory goodwill” contracts and that the government had breached these contracts. With respect to damages issues, the Federal Circuit rejected the plaintiff’s argument that the Court of Federal Claims had erred in limiting damages under a cost of replacement capital theory to “floatation costs,” holding that it found “no clear error in the [trial] court’s factual finding that the floatation costs provided an appropriate measure of Cal Fed’s damages incurred in replacing the supervisory goodwill with tangible capital.” The Federal Circuit also held that it found no fault with the Court of Federal Claims’ denial of restitution damages. The Federal Circuit held that the Court of Federal Claims had erred by not permitting the plaintiff to present evidence on its lost profits claim, and remanded for a trial on that claim. The plaintiff has sought rehearing of the Federal Circuit’s decision with respect to the restitution and cost of replacement capital claims, and the government has sought rehearing of the Federal Circuit’s liability decision. Both parties’ rehearing requests are pending.
The Court of Federal Claims has also issued damages decisions in several other “supervisory goodwill” cases. While the Court awarded the plaintiffs in some of these cases damages for the government’s breach of “supervisory goodwill” contracts, the Court rejected certain of the plaintiffs’ claims for damages, and awarded the plaintiffs only a portion of the damages they sought. Certain of these decisions are currently on appeal to the United States Court of Appeals for the Federal Circuit, and the Company expects the remaining decisions to be appealed as well. As noted, the Court of Federal Claims has held or is soon to hold trials in several other “supervisory goodwill” cases, and it is expected both that the Court will continue to issue additional decisions on both liability and damages issues and that most, if not all, of the Court’s decisions in these cases will be appealed.
The government has indicated that it will have a number of affirmative defenses against goodwill litigation filed against it. The TCF Minnesota and TCF Michigan actions involve a variety of different types of transactions, contracts and contract provisions. There can be no assurance that the U.S. Supreme Court decision in Winstar or liability and damages decisions in Glendale, California Federal and other cases will mean that a similar result would be obtained in the actions filed by TCF Minnesota and TCF Michigan. There also can be no assurance that the government will be determined liable in connection with the loss of supervisory goodwill by either TCF Minnesota or TCF Michigan or, even if a determination favorable to TCF Minnesota or TCF Michigan is made on the issue of the government’s liability, that a measure of damages will be employed that will permit any recovery on TCF Minnesota’s or TCF Michigan’s claim. Because of the complexity of the issues involved in both the liability and damages phases of this litigation, and the usual risks associated with litigation, the Company cannot predict the outcome of TCF Minnesota’s or TCF Michigan’s cases, and investors should not anticipate any recovery.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
On May 9, 2001, the Annual Meeting of the shareholders of TCF was held to obtain the approval of shareholders of record as of March 16, 2001 in connection with matter indicated below. Following is a brief description of the matter voted on at the meeting, and the number of votes cast for, against or withheld, as well as the number of abstentions and broker nonvotes, as to the matter:
| | | Vote |
| | |
|
| | | | | Against or | | | | Broker |
| | | For | | Withheld | | Abstain | | Nonvote |
| | |
| |
| |
| |
|
| | | | | | | | | |
| 1. Election of Directors | | | | | | | | |
| Luella G. Goldberg | | 68,709,739 | | 655,722 | | N/A | | N/A |
| George G. Johnson | | 68,711,615 | | 653,846 | | N/A | | N/A |
| Lynn A. Nagorske | | 68,705,234 | | 660,227 | | N/A | | N/A |
| Ralph Strangis | | 67,817,634 | | 1,547,827 | | N/A | | N/A |
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
| (a) | Exhibits.
|
| | See Index to Exhibits on pages 33 and 34 of this report.
|
| (b) | Reports on Form 8-K.
|
| | A Current Report on Form 8-K, dated May 9, 2001, was submitted furnishing certain investor presentation materials under Item 9 of Form 8-K. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | TCF FINANCIAL CORPORATION |
| | |
| | /s/ Neil W. Brown |
| |
|
| | Neil W. Brown, Executive Vice President,
Chief Financial Officer and Treasurer
(Principal Financial Officer) |
| | |
| | /s/ David M. Stautz |
| |
|
| | David M. Stautz, Senior Vice President,
Controller and Assistant Treasurer
(Principal Accounting Officer) |
Dated: August 7, 2001
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
INDEX TO EXHIBITS
FOR FORM 10-Q
| Exhibit Number | Description | Sequentially Numbered Page |
|
|
|
| 3(b)* | Restated Bylaws of TCF Financial Corporation, as amended and restated through October 25, 1999; as amended by amendment adopted April 28, 2000 [incorporated by reference to Exhibit 3(b) to TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2000, No. 001-10253]; and as amended by amendment adopted January 22, 2001 | |
| | | |
| 4(a) | Copies of instruments with respect to long-term debt will be furnished to the Securities and Exchange Commission upon request. | N/A |
| | | |
| 10(c)* | Amended and Restated TCF Financial Corporation Executive Deferred Compensation Plan as amended and restated effective as of January 1, 2000 [incorporated by reference to Exhibit 10(c) of TCF Financial Corporation’s Annual Report on Form 10-K for the year ended December 31, 1999, No. 001-10253]; as amended by amendment adopted April 30, 2001 | |
| | | |
| 10(d)* | Amended and Restated Trust Agreement for TCF Financial Corporation Executive Deferred Compensation Plan effective September 1, 1998; amendment adopted effective November 1, 1998 [incorporated by reference to Exhibit 10(d) to TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1998, No. 001-10253]; Restated Trust Agreement as executed with First National Bank in Sioux Falls as trustee effective as of October 1, 2000; as amended by amendment adopted April 30, 2001 | |
| | | |
| 10(j)* | Supplemental Employee Retirement Plan, as amended and restated effective July 21, 1997 [incorporated by reference to Exhibit 10(m) to TCF Financial Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997, No. 001-10253]; as amended effective September 30, 1998 [incorporated by reference to Exhibit 10(m) to TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1998, No. 001-10253]; as further amended on May 11, 1999 [incorporated by reference to Exhibit 10(m) to TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999, No. 001-10253]; as amended by amendment adopted January 24, 2000 [incorporated by reference to Exhibit 10(l) of TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2000, No. 001-10253]; and as amended by amendment adopted April 30, 2001 | |
| | | |
| 10(k)* | Trust Agreement for TCF Financial Corporation Supplemental Employee Retirement Plan, dated August 21, 1991 [incorporated by reference to Exhibit 10.16 to TCF Financial Corporation’s Registration Statement on Form S-2, filed November 15, 1991, No. 33-43988]; as amended on October 20, 1997 [incorporated by reference to Exhibit 10(n) to TCF Financial Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997, No. 001-10253]; and as amended by amendment adopted on April 30, 2001 | |
| | | |
| 10(l)* | TCF Financial Corporation Senior Officer Deferred Compensation Plan as amended and restated effective as of January 1, 2000 [incorporated by reference to Exhibit 10(n) of TCF Financial Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000, No. 001-10253]; and as amended by amendment adopted April 30, 2001 | |
| | | |
| 10(m)* | Amended and Restated Trust Agreement for TCF Financial Corporation Senior Officer Deferred Compensation Plan effective September 1, 1998; amendment adopted effective November 1, 1998 [incorporated by reference to Exhibit 10(p) to TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1998, No. 001-10253]; Restated Trust Agreement as executed with First National Bank in Sioux Falls as trustee effective as of October 1, 2000; as amended by amendment adopted April 30, 2001 | |
| | | |
| 10(r)* | TCF Directors Deferred Compensation Plan [incorporated by reference to Plan filed with registrant’s definitive proxy statement dated March 15, 1995, No. 001-10253]; as amended October 22, 1996 [incorporated by reference to Exhibit 10(x) to TCF Financial Corporation’s Annual Report on Form 10-K for the year ended December 31, 1996, No. 001-10253]; amendment adopted effective September 30, 1998 [incorporated by reference to Exhibit 10(v) to TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1998, No. 001-10253]; as amended on May 11, 1999 [incorporated by reference to Exhibit 10(v) to TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999, No.001-10253]; and as further amended by amendment adopted April 30, 2001 | |
| | | |
| 10(s)* | Trust Agreement for TCF Directors Compensation Plan; as amended by amendment adopted April 30, 2001 | |
| | | |
| 11* | Computation of Earnings Per Share | |
* Filed Herein
