TCF Financial Corporation (1923–2019)

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TCF Financial Corporation (NYSE: TCB) is a financial services holding company based in Wayzata, Minnesota, USA, employing more than 5,600 people. The holding company consists of several wholly owned subsidiaries; its prinicpal subsidiary is TCF Bank, a nationally chartered bank generating more than 85% of the company's net income. Other subsidiaries offer insurance, annuities, brokerage products, and nation-wide equipment leasing. As of December 31, 2005, the company reported more than $13 billion in assets. As of 2006, TCF has increased dividend payments for fifteen consecutive years.

Subsidiaries

Banking:

• TCF Bank
• TCF Mortgage Corporation

Insurance and annuities:

• TCF Insurance Agency, Inc.
• TCF Agency Insurance Services, Inc.

Leasing:

• TCF Leasing, Inc. d/b/a TCF Express Leasing
• TCF Equipment Finance, Inc.
• Winthrop Resources Corporation

Brokerage:

• TCF Investments, Inc.

Philathropy:

• TCF Foundation

Officers

• Chairman of the Board of Directors: William Allen Cooper
• Vice-chairman of the Board of Directors and General Counsel: Gregory J. Pulles
• Chief Executive Officer: Lynn A. Nagorske
• President and Chief Financial Officer: Neil W. Brown
• Chief Operating Officer: Barry N. Winslow
• Controller: David M. Stautz

History

TCF Financial Corporation, formerly Twin Cities Financial, has roots that can be traced to 1923. The current holding company structure was created in the mid-1980s to take advantage of easing regulations and allow expansion into non-bank services. In the 1990s, the company expanded banking into Michigan through the acquisitions of First Federal Savings Bank of Oakland County and Great Lakes National Bank; the early 2000s saw the acquisition of Winthrop Resources Corporation and the expansion of leasing operations nation-wide.

Operations

TCF's lending is focused on assets such as commercial loans and leases while they seek lower cost deposits such as checking accounts as a source of funds. They hope to attract these deposits through longer hours of operation. Most branches are open 80 hours a week including Saturdays and Sundays. TCF also engages in business lines such as check cashing, Western Union and insurance reaching out to traditionally "unbanked" customers.

TCF's major sources of non-interest (fee) income are overdraft fees, VISA interchange fees, and lending origination fees. Historically ATM fees were also a major source of income, but industry-wide this has fallen over the last seven years, and TCF is no exception. ATMs are used far less frequently today than they were seven to ten years ago (debit cards having become more popular and widespread, a trend in which TCF was a leader), and so fee income from this category has fallen off sharply.

Generally speaking, an inverse relationship exists among financial institutions between size and percent of income derived from interest. For example a mid-cap institution such as TCF would be expected to derive approximately 66% to 80% of its income from interest arbitrage, while for a large-cap the number would be approximately 40% to 50%. TCF earns only 50% of its income from interest. This reduces TCF exposure to interest rate shifts, but according to banking regulators, it is a strategy of questionable merit, which may actually increase earnings volatility.

Criticism

Politics

TCF Financial Corporation has recently come under heavy criticism for the political actions of top executives. After being criticized by the Star Tribune (the largest newspaper in Minnesota) for allowing an executive to write for a right-wing blog on company time, TCF withdrew all advertising from that newspaper. After a follow-up article in the City Pages pointed out that TCF's large political contributions have gone almost exclusively to Republicans, the company withdrew advertising from that newspaper as well.

The City Pages' claim about TCF political donations appears to be true. According to the Center for Responsive Politics, TCF Financial has consistently given large amounts of money, almost exclusively to Republicans.

Fees

TCF has come under frequent criticism for its fees, particularly the overdraft fees charged by the bank, which are actually average for a financial institution. In this regard, TCF has come under particular attack because their supermarket branches, free checking accounts, and extended hours often attract customers with lower incomes, who can ill-afford such fees. Many states are considering or have already enacted new legal limits which would bring bank overdraft fees under usury laws, and this could severely impede TCF's future profitability and growth.