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TCF Financial Corp. Reports Operating Results (10-K)

February 15, 2011 | About:
10qk

10qk

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TCF Financial Corp. (TCB) filed Annual Report for the period ended 2010-12-31.

Tcf Financial Corp. has a market cap of $2.34 billion; its shares were traded at around $16.43 with a P/E ratio of 15.5 and P/S ratio of 1.6. The dividend yield of Tcf Financial Corp. stocks is 1.2%. Tcf Financial Corp. had an annual average earning growth of 0.1% over the past 10 years.Hedge Fund Gurus that owns TCB: Irving Kahn of Kahn Brothers & Company Inc., Jim Simons of Renaissance Technologies LLC. Mutual Fund and Other Gurus that owns TCB: Bill Frels of Mairs & Power Inc. , John Buckingham of Al Frank Asset Management, Inc., Columbia Wanger of Columbia Wanger Asset Management, Jeremy Grantham of GMO LLC.

Highlight of Business Operations:

The FDIC has set a designated reserve ratio of 1.35% ($1.35 for each $100 of insured deposits) for the Deposit Insurance Fund (DIF). The Federal Deposit Insurance Act of 2005 (FDIC Act) provides the FDIC Board of Directors the authority to set the designated reserve ratio between 1.15% and 1.50% . The FDIC must adopt a restoration plan when the reserve ratio falls below 1.15% and begin paying dividends when the reserve ratio exceeds 1.35% . There is no requirement to achieve a specific ratio within a given timeframe. The DIF reserve ratio calculated by the FDIC at September 30, 2010 was a negative .15% and therefore, the FDIC needs to increase premiums charged to banks.

In 2010, the annual insurance premiums on bank deposits insured by the DIF varied between $.07 per $100 of deposits for banks classified in the highest capital and supervisory evaluation categories to $.78 per $100 of deposits for banks classified in the lowest capital and supervisory evaluation categories.

On November 12, 2009, the FDIC adopted a final rule requiring depository institutions to prepay their estimated quarterly insurance premium for fourth quarter 2009 and all of 2010, 2011 and 2012. TCF Bank prepaid $77.6 million of such premium on December 30, 2009 and $50.5 million remained as a prepaid balance at December 31, 2010. The expense related to this prepayment is anticipated to be recognized over the next two years based on actual calculations of quarterly premiums.

The Dodd-Frank Act requires changes to a number of components of the FDIC insurance assessment, with an implementation date of April 1, 2011. The changes amend the current methodology used to determine the assessments paid by institutions with assets greater than $10 billion, including changing the assessment base from deposits to total average assets less tier 1 capital. Additionally, the FDIC has developed a scorecard approach to determine a separate assessment rate for each institution with assets greater than $10 billion. As a result of these changes, TCFs FDIC insurance expense is expected to increase by approximately $15 million in 2011.

In addition to risk-based deposit insurance premiums, additional assessments may be imposed by the Financing Corporation, a separate U.S. government agency affiliated with the FDIC, on insured deposits to pay for the interest cost of Financing Corporation bonds. Financing Corporation assessment rates for 2010 ranged from $.0102 to $.0104 for each $100 of deposits. Financing Corporation assessments of $1.2 million, $1.2 million and $1.1 million were paid by TCF Bank for 2010, 2009 and 2008, respectively.

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