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Section 1: 11-K (11-K)

 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 11-K

 

 

 

[x]   ANNUAL REPORT PURSUANT TO SECTION 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended

December 31, 2011

 

or

 

[ ]   TRANSITION REPORT PURSUANT TO SECTION 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

Commission File No. 33-43030

 

 

A.    Full title of the plan and the address of the plan, if different from that of the issuer named below:

 

TCF EMPLOYEES STOCK PURCHASE PLAN

 

B.    Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

 

TCF FINANCIAL CORPORATION

200 Lake Street East

 Mail Code EX0-03-A

Wayzata, Minnesota 55391-1693

 


 

 

 

 

REQUIRED INFORMATION

 

The TCF Employees Stock Purchase Plan of TCF Financial Corporation is subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA").  Therefore, in lieu of the requirements of Items 1-3 of Form 11-K, the financial statements and supplementary schedules of the TCF Employees Stock Purchase Plan of TCF Financial Corporation, which have been prepared in accordance with the financial reporting requirements of ERISA, are attached hereto as Exhibit 99 to this Form 11-K and are incorporated herein by reference.

 

SIGNATURES

 

The Plan.  Pursuant to the requirements of the Securities Exchange Act of 1934, the trustee (or other persons who administer the employee benefit plan) has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

TCF Financial Corporation

(Plan Sponsor and Plan Administrator of

the TCF Employees Stock Purchase Plan)

 

 

By

/s/ William A. Cooper,

 

William A. Cooper,

Chairman and Chief Executive Officer

(Principal Executive Officer)

 

 

By

/s/ Michael S. Jones

 

Michael S. Jones, Executive Vice President and

Chief Financial Officer

(Principal Financial Officer)

 

 

By

/s/ David M. Stautz

 

David M. Stautz, Senior Vice President,

Controller and Managing Director of

Corporate Development

(Principal Accounting Officer)

 

Dated:  June 22, 2012

 


 

 

 

TCF Employees Stock Purchase Plan

 

Form 11-K

 

Index to Exhibits

 

 

Exhibit

Number

 

Description

 

 

 

23

 

Consent of Independent Registered Public Accounting Firm

 

 

 

99

 

Financial Statements and Supplementary Schedules

 

   

 

 


 
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Section 2: EX-23 (EXHIBIT 23)

 

 

Exhibit 23

 

 

Consent of Independent Registered Public Accounting Firm

 

The Board of Directors of TCF Financial Corporation and

The Plan Sponsor and Plan Administrator of the

TCF Employees Stock Purchase Plan:

 

We consent to the incorporation by reference in the registration statements (No. 333-168893, 333-154929, 333-146741, 333-113748 and 333-72394) on Form S-8 of TCF Financial Corporation of our report dated June 22, 2012, with respect to the statements of net assets available for plan benefits of the TCF Employees Stock Purchase Plan as of December 31, 2011 and 2010, the related statements of changes in net assets available for plan benefits for each of the years in the three-year period ended December 31, 2011, and supplemental schedules as of and for the year ended December 31, 2011, which report appears in the December 31, 2011 annual report on Form 11-K of the TCF Employees Stock Purchase Plan.

 

 

 

 

/s/ KPMG LLP        

 

 

 

Minneapolis, Minnesota

June 22, 2012

 

 


 
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Section 3: EX-99 (EXHIBIT 99)

 

Exhibit 99

 

 

 

 

 

TCF Employees Stock Purchase Plan

 

Financial Statements and

Supplemental Schedules

 

 

December 31, 2011, 2010 and 2009


 

 

TCF Employees Stock Purchase Plan

 

Index – Financial Statements and Schedules

 

 

Page No.

Report of Independent Registered Public Accounting Firm

1

 

 

 

 

Statements of Net Assets Available for Plan Benefits –

 

 

as of December 31, 2011 and 2010

2

 

 

 

 

Statements of Changes in Net Assets Available for Plan Benefits -

 

 

Years ended December 31, 2011, 2010 and 2009

3

 

 

 

 

Notes to Financial Statements

4

 

 

 

 

Supplemental Schedules:

 

 

 

 

 

Schedule 1 – Schedule H, line 4i - Schedule of Assets

15

 

 

(Held at End of Year)

 

 

 

 

 

Schedule 2 – Schedule H, line 4j - Schedule of

 

 

 

Reportable Transactions

16

           

 


 

 

Report of Independent Registered Public Accounting Firm

 

The Board of Directors of TCF Financial Corporation and

The Plan Sponsor and Plan Administrator of the

TCF Employees Stock Purchase Plan:

 

We have audited the accompanying statements of net assets available for plan benefits of the TCF Employees Stock Purchase Plan (the “Plan”) as of December 31, 2011 and 2010, and the related statements of changes in net assets available for plan benefits for each of the years in the three-year period ended December 31, 2011.  These financial statements are the responsibility of the Plan’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion. 

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan as of December 31, 2011 and 2010, and the changes in net assets available for plan benefits for each of the years in the three-year period ended December 31, 2011 in conformity with U.S. generally accepted accounting principles.

 

Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole.  Supplemental Schedules 1 and 2 are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974.  These supplemental schedules are the responsibility of the Plan’s management.  The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. 

 

/s/ KPMG LLP

 

 

Minneapolis, Minnesota

June 22, 2012

1


 

TCF Employees Stock Purchase Plan

 

Statements of Net Assets Available for Plan Benefits

 

  

  

  

  

  

  

  

As of December 31,

  

  

  

  

  

  

  

2011 

  

  

2010 

Assets:

  

  

  

  

  

  

Investments at fair value:

  

  

  

  

  

  

  

TCF Financial Corporation Stock Fund:

  

  

  

  

  

  

  

  

TCF Financial Corporation common stock

$

 83,979,946 

  

$

 116,024,012 

  

  

  

Cash and accrued interest receivable

  

 36,394 

  

  

 14,664 

  

  

  

  

Total TCF Financial Corporation Stock Fund

  

 84,016,340 

  

  

 116,038,676 

  

  

  

  

  

  

  

  

  

  

  

  

  

Mutual funds

  

 53,051,795 

  

  

 46,931,775 

  

  

Pooled separate accounts

  

 1,392,057 

  

  

 - 

  

  

Other investments

  

 10,751 

  

  

 - 

  

  

  

  

Total investments

  

 138,470,943 

  

  

 162,970,451 

  

  

  

  

  

  

  

  

  

  

  

  

  

Contributions receivable

  

 27,053 

  

  

 - 

  

  

Notes receivable from participants

  

 8,694 

  

  

 - 

  

  

  

  

Total assets

  

 138,506,690 

  

  

 162,970,451 

  

  

  

  

  

  

  

  

  

  

  

Liabilities:

  

  

  

  

  

  

Distributions payable to participants

  

 205,629 

  

  

 194,576 

  

  

  

  

  

  

  

  

  

  

  

Net assets available for plan benefits

$

 138,301,061 

  

$

 162,775,875 

  

  

  

  

  

  

  

  

  

  

  

See accompanying notes to financial statements.

  

  

  

  

  

  

  

  

  

  

  

  

  

  


 

TCF Employees Stock Purchase Plan

 

Statements of Changes in Net Assets Available for Plan Benefits

 

  

  

  

  

  

  

  

Year Ended December 31,

  

  

  

  

  

  

  

  

2011 

  

  

2010 

  

  

2009 

Investment income:

  

  

  

  

  

  

  

  

  

Dividends

$

 2,620,532 

  

$

 2,333,589 

  

$

 3,712,238 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Net (depreciation)/appreciation:

  

  

  

  

  

  

  

  

  

Realized (losses)/gains on distributions,

  

  

  

  

  

  

  

  

  

  

sales and share class changes:

  

  

  

  

  

  

  

  

  

  

  

TCF Financial Corporation stock fund

  

 (421,175) 

  

  

 2,544,664 

  

  

 (224,971) 

  

  

  

Mutual funds

  

 599,792 

  

  

 164,473 

  

  

 (1,035,313) 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Change in unrealized (depreciation)/

  

  

  

  

  

  

  

  

  

  

appreciation of investments:

  

  

  

  

  

  

  

  

  

  

  

TCF Financial Corporation stock fund

  

 (34,645,917) 

  

  

 7,770,681 

  

  

 463,219 

  

  

  

Mutual funds

  

 (1,653,897) 

  

  

 4,973,284 

  

  

 5,989,852 

  

  

  

  

Total net (depreciation)/ appreciation

  

 (36,121,197) 

  

  

 15,453,102 

  

  

 5,192,787 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Deposits and contributions:

  

  

  

  

  

  

  

  

  

Participant deposits

  

 13,936,922 

  

  

 12,971,619 

  

  

 12,753,184 

  

Employer cash contributions

  

 7,626,048 

  

  

 6,849,824 

  

  

 6,868,723 

  

  

Total deposits and contributions

  

 21,562,970 

  

  

 19,821,443 

  

  

 19,621,907 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Distributions:

  

  

  

  

  

  

  

  

  

Withdrawals and distributions

  

 (13,450,730) 

  

  

 (17,368,402) 

  

  

 (11,550,388) 

  

Dividends

  

 (524,944) 

  

  

 (570,377) 

  

  

 (1,295,598) 

  

  

Total distributions

  

 (13,975,674) 

  

  

 (17,938,779) 

  

  

 (12,845,986) 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Administrative expenses

  

 - 

  

  

 (1,000) 

  

  

 - 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Transfer from other plan (See note 1)

  

 1,438,555 

  

  

 - 

  

  

 - 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

(Decrease)/increase in net assets

  

  

  

  

  

  

  

  

  

available for plan benefits

  

 (24,474,814) 

  

  

 19,668,355 

  

  

 15,680,946 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Net assets available for plan benefits:

  

  

  

  

  

  

  

  

  

Beginning of year

  

 162,775,875 

  

  

 143,107,520 

  

  

 127,426,574 

  

End of year

$

 138,301,061 

  

$

 162,775,875 

  

$

 143,107,520 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

See accompanying notes to financial statements.

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  


 

TCF Employees Stock Purchase Plan

Notes to Financial Statements

 

(1)                Accounting Policies

 

Basis of Presentation

 

The financial statements of the TCF Employees Stock Purchase Plan (the “Plan”) have been prepared on the accrual basis of accounting.  Assets of the Plan are stated at fair value.  Purchases and sales of investments are recorded on a trade-date basis.  The cost of Plan investments sold is determined by the average cost method.  Distributions are recorded when paid.

 

On November 30, 2011, TCF Financial Corporation acquired Gateway One Lending & Finance LLC (“GOLF”).  Effective December 31, 2011, the Gateway One Lending & Finance 401(k) (“GOLF Plan”) along with its assets of $1,438,555 was merged into the Plan.

 

Notes Receivable from Participants

 

The Plan does not allow for loans to participants. Due to the GOLF Plan merger on December 31, 2011, the Plan held notes receivable from GOLF Plan participants as of year end.  Notes receivable from GOLF Plan participants are measured at their unpaid principal balance plus any accrued but unpaid interest.  Delinquent participant notes receivable are reclassified as distributions. 

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires the Plan administrator to make estimates and assumptions that affect the reported amounts of net assets available for plan benefits at the date of the financial statements and the reported amounts of changes in net assets available for plan benefits during the reporting period.  Actual results could differ from those estimates.

 

Risks and Uncertainties

 

The Plan invests in various investment securities.  Investment securities are exposed to various risks such as interest rate, market, and credit risks.  Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statement of net assets available for plan benefits.

 

The Plan provides for investment in TCF Financial Corporation common stock.  At December 31, 2011 and 2010, approximately 61% and 71% of the Plan’s total assets were invested in the common stock of TCF Financial Corporation. The underlying value of the TCF Financial Corporation common stock is entirely dependent upon the performance of TCF Financial Corporation and the market’s evaluation of such performance.

 

4


 

TCF Employees Stock Purchase Plan

Notes to Financial Statements (Continued)

 

Subsequent Event

 

On April 3, 2012, The Plan liquidated the GOLF Plan participant investments held at Principal Financial Group for a total of $1,523,326.  The total amount was then transferred to and invested in the Plan investment options available through Mercer Trust Company.  Principal Financial Group is no longer a Plan trustee.

 

Recent Accounting Developments

 

On May 12, 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS (Topic 820), which is a joint effort between the FASB and International Accounting Standards Board (“IASB”) to converge fair value measurement and disclosure guidance.  The ASU permits measuring financial assets and liabilities on a net credit risk basis, if certain criteria are met.  The ASU also increases disclosure surrounding company determined fair value for level 3 financial instruments and also requires the fair value hierarchy disclosure of financial assets and liabilities that are not recognized at fair value in the statement of financial position but included in disclosures at fair value.  The adoption of the ASU will be required for the Plan’s Annual Report on Form 11-K for the year ending December 31, 2012 and is not expected to have a material impact on the Plan.

 

(2)                Employees Stock Purchase Plan

 

The Plan is intended to meet the requirements of a stock bonus plan under section 401(a) of the Internal Revenue Code of 1986, as amended (the “Code”), an employee stock ownership plan under Section 4975(e) of the Code, and a qualified cash or deferred arrangement under Section 401(k) of the Code.  The Plan is a tax-qualified contributory plan subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).  The Plan sponsor is TCF Financial Corporation (“TCF Financial”).  For the year ended December 31, 2011, Mercer Trust Company (“Mercer”) and Principal Financial Group (“Principal”) together were the trustees of the Plan appointed to serve under the trust agreement.  For the year ended December 31, 2010, Mercer was the trustee of the Plan under the trust agreement.  Record keeping administration of the Plan was managed by Mercer HR Services, LLC and Principal Financial Group for the year ended December 31, 2011 and by Mercer HR Services, LLC for the year ended December 31, 2010. 

 

All full-time and part-time employees of TCF Financial or its subsidiaries are eligible to participate in the Plan with the exception of GOLF employees who were eligible to participate starting January 1, 2012.   Participants may elect to invest, in increments of 1%, up to 50% of their covered pay on a tax deferred basis.  Contributions of employees defined by the Code as “highly compensated” are limited based on an annual determination by TCF Financial.  The aggregate contributions are subject to the Internal Revenue Service (“IRS”). The maximum annual limit was $16,500 for 2011, 2010 and 2009, respectively. The Plan allows participants age 50 or older to make “catch up” pre-tax contributions in excess of the IRS limits stated above.  The maximum catch-up contribution was $5,500 for 2011, 2010 and 2009, respectively.

 

Participating employers match the contributions of employees who have completed one year of service at the rate of 50 cents per dollar contributed for employees with one to less than five years of service, 75 cents per dollar contributed for employees with five to less than ten years of service and $1 per dollar contributed for employees with ten or more years of service.  Employer matching contributions are made on the first 6% of eligible compensation contributed.  Employer contributions are generally made in cash and can also be made in the form of TCF Financial Corporation common stock.

 

All employee and employer contributions are invested in participant directed investments, including TCF Financial Corporation common stock, shortly after the date contributed. For the years ended December 31, 2011, 2010 and 2009, all balances were directed by participants. 

 

5


 

TCF Employees Stock Purchase Plan

Notes to Financial Statements (Continued)

 

The participating employers, at their discretion, may make additional contributions to the Plan, subject to an overall limit.  These additional contributions, if any, are allocated to participants’ matching accounts in proportion to their respective percentage rate of matched contributions, subject to certain limitations.  To date, no such contributions have been made.

 

Participants may elect to invest their employee account balance in any or all of the offered mutual fund investments or TCF Financial Corporation common stock. 

 

Participant contributions to the Plan are fully vested at all times.  Participants’ interests in the employer matching contributions generally vest at the rate of 20% per year (with full vesting after five years of service).  The Plan permits financial hardship withdrawals consistent with the safe harbor provisions of regulations issued pursuant to the Tax Reform Act of 1986.

 

Dividends paid on the TCF Financial Corporation Stock Fund are reinvested in such fund or, at the election of the participant, may be paid in cash to the participant.  Dividends paid from the mutual funds are reinvested in the mutual funds.

 

Amounts which have been forfeited in accordance with the provisions of the Plan are available to use for payment of various Plan obligations according to the following hierarchy: reinstatement of participant accounts upon rehire, reduction of employer contributions and Plan administration expenses as defined.  Other Plan obligations are paid directly by TCF Financial.  Administrative expenses paid by TCF Financial during 2011, 2010 and 2009 totaled $461,952, $445,564, and $517,203, respectively.  Any remaining forfeiture amounts are retained by the Plan to be used for payment of Plan obligations in future periods.

 

The trustee redeposits to the Plan, on a monthly basis, all outstanding distribution checks which have not been cashed within 9 months from date of issuance.  During 2011 and 2010, TCF Financial received $35,300 and $16,978 of redeposited distributions from the trustee and reissued distribution checks to former participants totaling $24,247 and $69,988, respectively.  As of December 31, 2011 and 2010, $205,629 and $194,576 of distributions were payable to former participants, respectively. 

 

The Advisory Committee for the TCF Employees Stock Purchase Plan has shared voting power with participants of all allocated shares of TCF Financial common stock in the Plan.

 

TCF Financial has reserved the right to amend the Plan at any time and each participating employer may cease to participate in the Plan and stop offering the Plan at any time to its employees.  In the event of termination of the Plan, participating employees become 100% vested in their employer matching account balances.

 

6


 

TCF Employees Stock Purchase Plan

Notes to Financial Statements (Continued)

 

(3)                Participating Employers Included in the Plan

 

The Plan is a pooled fund for certain participating employers, all of which are direct or indirect subsidiaries of TCF Financial.  Participant deposits, employer contributions and the related net assets are as follows:

 

  

  

  

  

Year Ended December 31, 2011

  

  

  

  

Participating Employer

  

Participant Deposits at Cost

  

Employer Contributions at Cost

  

At December 31,

2011

Net Assets

  

  

  

  

  

  

  

  

  

  

  

  

TCF National Bank

  

$

 10,281,634 

  

$

 5,602,722 

  

$

 111,987,729 

  

TCF Equipment Finance, Inc.

  

  

 1,691,068 

  

  

 907,563 

  

  

 9,928,688 

  

Winthrop Resources Corporation

  

  

 757,399 

  

  

 538,793 

  

  

 7,218,937 

  

TCF Financial Corporation

  

  

 155,327 

  

  

 130,344 

  

  

 3,085,896 

  

TCF Inventory Finance, Inc.

  

  

 918,615 

  

  

 349,830 

  

  

 2,231,093 

  

Gateway One Lending & Finance, LLC

  

  

 - 

  

  

 - 

  

  

 1,440,271 

  

TCF Portfolio Services, Inc.

  

  

 97,924 

  

  

 75,823 

  

  

 1,334,464 

  

TCF Agency, Inc.

  

  

 25,546 

  

  

 16,269 

  

  

 666,526 

  

TCF Insurance Agency, Inc.

  

  

 - 

  

  

 - 

  

  

 343,943 

  

Great Lakes Mortgage, LLC

  

  

 9,409 

  

  

 4,704 

  

  

 63,514 

  

Total

  

$

 13,936,922 

  

$

 7,626,048 

  

$

 138,301,061 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Year Ended December 31, 2010

  

  

  

  

Participating Employer

  

Participant Deposits at Cost

  

Employer Contributions at Cost

  

At December 31,

2010

Net Assets

  

  

  

  

  

  

  

  

  

  

  

  

TCF National Bank

  

$

 9,772,686 

  

$

 5,213,220 

  

$

 135,822,125 

  

TCF Equipment Finance, Inc.

  

  

 1,541,481 

  

  

 753,401 

  

  

 10,308,304 

  

Winthrop Resources Corporation

  

  

 771,855 

  

  

 494,351 

  

  

 7,471,927 

  

TCF Financial Corporation

  

  

 137,539 

  

  

 109,393 

  

  

 4,716,645 

  

TCF Portfolio Services, Inc.

  

  

 92,411 

  

  

 70,867 

  

  

 1,735,266 

  

TCF Inventory Finance, Inc.

  

  

 625,559 

  

  

 190,514 

  

  

 1,392,394 

  

TCF Agency, Inc.

  

  

 22,672 

  

  

 14,370 

  

  

 791,861 

  

TCF Insurance Agency, Inc.

  

  

 - 

  

  

 - 

  

  

 487,038 

  

Great Lakes Mortgage,  LLC

  

  

 7,416 

  

  

 3,708 

  

  

 50,315 

  

Total

  

$

 12,971,619 

  

$

 6,849,824 

  

$

 162,775,875 

  

  

  

  

  

  

  

  

  

  

  


 

TCF Employees Stock Purchase Plan

Notes to Financial Statements (Continued)

 

(4)                Income Tax Status

 

TCF Financial has received a favorable tax determination letter from the IRS dated May 7, 2003, indicating that the Plan qualified under Sections 401(a) and 4975(e) (7) of the Code and met the requirements for a qualified cash or deferred arrangement under Section 401(k) of the Code, and the trust established thereunder is thereby exempt from federal income taxes under Section 501(a) of the Code.  As such, the Plan’s assets are exempt from federal income tax, and participant tax-deferred contributions and amounts contributed by participating employers are not taxed to the employee until distributed from the Plan.  Continued compliance with applicable provisions of the Code is required to maintain this tax-exempt status.

The most recent determination letter dated May 7, 2003 provided a favorable determination regarding the restatement of the Plan document in its entirety on April 30, 2001.  In accordance with applicable regulations the Plan administrator filed a request with the IRS for a new determination letter on January 20, 2010.  That determination letter request is still pending.  The Plan administrator believes the Plan continues to qualify under provisions of Section 401(a) of the Code and that the related trust is exempt from federal income taxes.

Based on the tax exempt status of the Plan, there are no accruals for income tax uncertainties.  The Plan administrator believes the Plan is no longer subject to income tax examinations for the years prior to 2009 and there are currently no audits for any tax period in progress.

8


 

TCF Employees Stock Purchase Plan

Notes to Financial Statements (Continued)

 

(5)    Investments 

 

The net unrealized (depreciation) / appreciation of investments reflected in Plan total and net assets is as follows:

 

  

  

  

  

  

As of December 31, 2011

  

  

  

  

  

Cost

  

Fair Value

  

Unrealized (Depreciation)/ Appreciation

TCF Financial Corporation Stock Fund:

  

  

  

  

  

  

  

  

  

TCF Financial Corporation common stock

$

 111,127,454 

  

$

 83,979,946 

  

$

 (27,147,508) 

  

Cash and accrued interest receivable

  

 36,394 

  

  

 36,394 

  

  

 - 

  

  

  

Total TCF Financial Corporation Stock Fund

  

 111,163,848 

  

  

 84,016,340 

  

  

 (27,147,508) 

  

  

  

  

  

  

  

  

  

  

  

  

  

Mutual funds

  

 50,588,567 

  

  

 53,051,795 

  

  

 2,463,228 

Pooled separate accounts

  

 1,392,057 

  

  

 1,392,057 

  

  

 - 

Other investments

  

 10,751 

  

  

 10,751 

  

  

 - 

  

  

  

  

  

$

 163,155,223 

  

$

 138,470,943 

  

$

 (24,684,280) 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

As of December 31, 2010

  

  

  

  

  

Cost

  

Fair Value

  

Unrealized Appreciation

TCF Financial Corporation Stock Fund:

  

  

  

  

  

  

  

  

  

TCF Financial Corporation common stock

$

 108,525,603 

  

$

 116,024,012 

  

$

 7,498,409 

  

Cash and accrued interest receivable

  

 14,664 

  

  

 14,664 

  

  

 - 

  

  

  

Total TCF Financial Corporation Stock Fund

  

 108,540,267 

  

  

 116,038,676 

  

  

 7,498,409 

  

  

  

  

  

  

  

  

  

  

  

  

  

Mutual funds

  

 42,814,650 

  

  

 46,931,775 

  

  

 4,117,125 

  

  

  

  

  

$

 151,354,917 

  

$

 162,970,451 

  

$

 11,615,534 

  

  

  

  

  

  

  

  

  

  

  

  

  


 

 

TCF Employees Stock Purchase Plan

Notes to Financial Statements (Continued)

 

The fair values of individual investments that represent 5% or more of the Plan’s net assets are as follows:

 

  

  

  

  

Shares

  

Fair Value

  

  

  

  

  

  

  

  

Year ended December 31, 2011:

  

  

  

  

  

TCF Financial Corporation common stock

 8,137,584 

  

$

 83,979,946 

  

Vanguard Institutional Index Fund

 109,908 

  

  

 12,643,767 

  

Vanguard Mid-Cap Index Fund

 632,891 

  

  

 12,461,616 

  

Vanguard Small-Cap Index Fund

 281,543 

  

  

 9,400,736 

  

Vanguard Intermediate-Term Bond Index Fund

 735,371 

  

  

 8,655,316 

  

Vanguard Prime Money Market Fund

 7,491,465 

  

  

 7,491,465 

  

  

  

  

  

  

  

  

Year ended December 31, 2010:

  

  

  

  

  

TCF Financial Corporation common stock

 7,834,155 

  

$

 116,024,012 

  

Vanguard Mid-Cap Index Fund

 562,099 

  

  

 11,444,333 

  

Vanguard Institutional Index Fund

 90,755 

  

  

 10,437,714 

  

Vanguard Small-Cap Index Fund

 241,747 

  

  

 8,405,544 

 

(6)                Fair Value Measurement

 

FASB Accounting Standard Codification (“ASC”) 820, Fair Value Measurements and Disclosures defines fair value and establishes a consistent framework for measuring fair value and disclosure requirements for fair value measurements.  Fair values represent the estimated price that would be received from selling an asset or paid to transfer a liability, otherwise known as an “exit price”.

 

At December 31, 2011, assets held in trust for the Plan included investments in publicly traded stock, mutual funds and pooled separate accounts. The fair value of level 1 assets are based upon quotes from independent asset pricing services based on active markets, which are considered level 1 under ASC 820 and are measured on a recurring basis.  The fair value of level 2 assets are measured on a recurring basis based on observable market prices.  There were no assets measured on a recurring basis based on company determined market prices (level 3).

 

All observable market assets (level 2) were acquired through the GOLF Plan merger discussed in Note 1.  There were no transfers between readily available market assets and observable market assets.

 

The following is a description of the valuation techniques and inputs used by the Plan to measure each major class of assets at the fair value:

 

·         TCF Financial Corporation common stock fund: Valued at the closing price reported in the active market in which the individual securities are traded.

 

·         Mutual Funds: Valued at the quoted net asset value (NAV) of shares held by the Plan at year-end in the active market in which the individual mutual funds are traded.

 

·         Pooled separate accounts: Valued using the NAV provided by the administrator of the Account based on the underlying investments.

 

10


 

TCF Employees Stock Purchase Plan

Notes to Financial Statements (Continued)

As required by applicable authoritative accounting guidance, the level in the fair value hierarchy within which the fair value measurement of the asset in its entirety is classified is based on the lowest level input that is significant to the fair value measurement in its entirety.

 

The following table summarizes the Plan’s investment assets measured at fair value as of December 31:

 

  

  

  

  

Year Ended December 31, 2011

  

  

  

  

Readily Available

  

Observable Market

  

  

  

TCF's Categories

  

 Market Prices (1)

  

Prices (2)

  

Total at Fair Value

  

  

  

  

  

  

  

  

  

  

  

  

TCF Financial Corporation

  

  

  

  

  

  

  

  

  

common stock fund

  

$

 84,016,340 

  

$

 - 

  

$

 84,016,340 

  

  

  

  

  

  

  

  

  

  

  

  

Mutual funds

  

  

  

  

  

  

  

  

  

  

-Domestic equity

  

  

 34,506,119 

  

  

 - 

  

  

 34,506,119 

  

-Fixed income

  

  

 8,655,316 

  

  

 - 

  

  

 8,655,316 

  

-Money market fund

  

  

 7,491,465 

  

  

 - 

  

  

 7,491,465 

  

-International equity

  

  

 2,398,895 

  

  

 - 

  

  

 2,398,895 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Pooled separate accounts

  

  

  

  

  

  

  

  

  

  

-Target date funds

  

  

 - 

  

  

 698,722 

  

  

 698,722 

  

-Money market funds

  

  

 - 

  

  

 354,736 

  

  

 354,736 

  

-Fixed income

  

  

 - 

  

  

 157,800 

  

  

 157,800 

  

-Domestic equity

  

  

 - 

  

  

 149,050 

  

  

 149,050 

  

-International equity

  

  

 - 

  

  

 31,749 

  

  

 31,749 

  

  

  

  

  

  

  

  

  

  

  

  

Other investments

  

  

 - 

  

  

 10,751 

  

  

 10,751 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

$

 137,068,135 

  

$

 1,402,808 

  

$

 138,470,943 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Year Ended December 31, 2010

  

  

  

  

Readily Available

  

Observable Market

  

  

  

TCF's Categories

  

 Market Prices (1)

  

Prices (2)

  

Total at Fair Value

  

  

  

  

  

  

  

  

  

  

  

  

TCF Financial Corporation

  

  

  

  

  

  

  

  

  

common stock fund

  

$

 116,038,676 

  

$

 - 

  

$

 116,038,676 

  

  

  

  

  

  

  

  

  

  

  

  

Mutual funds

  

  

  

  

  

  

  

  

  

  

-Domestic equity

  

  

 30,287,591 

  

  

 - 

  

  

 30,287,591 

  

-Money market fund

  

  

 7,992,025 

  

  

 - 

  

  

 7,992,025 

  

-Fixed income

  

  

 6,714,954 

  

  

 - 

  

  

 6,714,954 

  

-International equity

  

  

 1,937,205 

  

  

 - 

  

  

 1,937,205 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

$

 162,970,451 

  

$

 - 

  

$

 162,970,451 

  

  

  

  

  

  

  

  

  

  

  

  

(1)

Considered Level 1 under ASC 820.

(2)

Considered Level 2 under ASC 820.

11 


 

TCF Employees Stock Purchase Plan

Notes to Financial Statements (Continued)

 

(7)                Realized (Losses) Gains on Distributions, Sales and Share Class Changes

 

Participants can elect to receive distributions from the Plan in the form of cash or shares of TCF Financial Corporation common stock.  Distributions, sales and share class changes (mutual funds) are as follows:

 

  

  

  

Year Ended December 31, 2011

  

  

  

Number of Shares

  

Cost

  

Fair Value

  

(Losses)/ Gains on Distributions and Sales

TCF Financial Corporation common stock

  

 1,072,905 

  

$

 14,882,017 

  

$

 14,460,842 

  

$

 (421,175) 

Mutual funds

  

 21,227,530 

  

  

 27,636,763 

  

  

 28,236,555 

  

  

 599,792 

  

  

  

  

 22,300,435 

  

$

 42,518,780 

  

$

 42,697,397 

  

$

 178,617 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Year Ended December 31, 2010

  

  

  

Number of Shares

  

Cost

  

Fair Value

  

Gains on Distributions and Sales

  

  

  

  

  

  

  

  

  

  

  

  

  

  

TCF Financial Corporation common stock

  

 1,458,645 

  

$

 20,089,535 

  

$

 22,634,199 

  

$

 2,544,664 

Mutual funds

  

 19,003,953 

  

  

 24,520,423 

  

  

 24,684,896 

  

  

 164,473 

  

  

  

  

 20,462,598 

  

$

 44,609,958 

  

$

 47,319,095 

  

$

 2,709,137 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Year Ended December 31, 2009

  

  

  

Number of Shares

  

Cost

  

Fair Value

  

Losses on Distributions and Sales

  

  

  

  

  

  

  

  

  

  

  

  

  

  

TCF Financial Corporation common stock

  

 1,075,601 

  

$

 14,719,690 

  

$

 14,494,719 

  

$

 (224,971) 

Mutual funds

  

 20,194,242 

  

  

 25,401,649 

  

  

 24,366,336 

  

  

 (1,035,313) 

  

  

  

  

 21,269,843 

  

$

 40,121,339 

  

$

 38,861,055 

  

$

 (1,260,284) 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

12 


 

TCF Employees Stock Purchase Plan

Notes to Financial Statements (Continued)

 

(8)                Distributions and Forfeitures

 

Cash and shares of TCF Financial Corporation common stock totaling $13,975,674, $17,938,779 and $12,845,986 were distributed in 2011, 2010 and 2009, respectively.  At December 31, 2011 and 2010, there were $12,452 and $30,759, respectively, of distribution amounts that have not yet been paid to participants.  In addition, at December 31, 2011 and 2010 there were $205,629 and $194,576 of distribution amounts paid to current and prior plan participants by check which had not yet been cashed.  Outstanding distribution payments are shown as a liability reducing assets available for plan benefits.

Forfeitures of unvested employer matching contributions were used to offset plan obligations as follows:

 

  

  

  

  

Year Ended December 31,

  

  

  

  

  

2011 

  

  

2010 

  

  

2009 

  

  

  

  

  

  

  

  

  

  

  

  

Total forfeitures during year

  

$

 354,660 

  

$

 393,126 

  

$

 362,276 

  

  

  

  

  

  

  

  

  

  

  

  

Forfeitures carried over from previous year

  

  

 24,698 

  

  

 6,878 

  

  

 15,233 

  

  

  

  

  

  

  

  

  

  

  

  

Interest on forfeited amounts

  

  

 103 

  

  

 141 

  

  

 626 

  

  

  

  

  

  

  

  

  

  

  

  

Forfeitures used to reinstate employee balances

  

  

 (14,634) 

  

  

 (19,447) 

  

  

 (11,257) 

  

  

  

  

  

  

  

  

  

  

  

  

Forfeitures used to fund employer contributions

  

  

 (360,000) 

  

  

 (355,000) 

  

  

 (360,000) 

  

  

  

  

  

  

  

  

  

  

  

  

Forfeitures used to pay plan expenses

  

  

 - 

  

  

 (1,000) 

  

  

 - 

  

  

  

  

  

  

  

  

  

  

  

  

  

Forfeitures to be used to offset future obligations

  

$

 4,827 

  

$

 24,698 

  

$

 6,878 

 

If participants are rehired by a participating employer within five years of termination, unvested balances forfeited are returned to the participants’ accounts.

13


 

TCF Employees Stock Purchase Plan

Notes to Financial Statements (Continued)

 

(9)                Reconciliation to Form 5500

 

The accompanying financial statements for 2011 and 2010 differ from the Form 5500, as filed with the Department of Labor, as follows:

 

  

  

  

  

As of December 31,

  

  

  

  

  

2011 

  

  

2010 

Net assets available for plan benefits

  

  

  

  

  

  

  

reported on the accompanying financial statements

  

$

 138,301,061 

  

$

 162,775,875 

Liabilities including amounts due to participants

  

  

 (12,452) 

  

  

 (30,759) 

Net assets available for plan benefits reported on Form 5500

  

$

 138,288,609 

  

$

 162,745,116 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

The following is a reconciliation of distributions paid to participants per the financial statements to Form 5500:

  

  

  

  

  

  

  

  

  

  

  

  

  

Year Ended December 31,

  

  

  

  

  

2011 

  

  

2010 

Distributions to participants reported on the accompanying

  

  

  

  

  

  

  

financial statements

  

$

 13,975,674 

  

$

 17,938,779 

Add: Amounts allocated to withdrawing participants at year end

  

  

 12,452 

  

  

 30,759 

Less: Amounts allocated to withdrawing participants at the prior year end

  

  

 (30,759) 

  

  

 (5,396) 

Distributions to participants reported on Form 5500

  

$

 13,957,367 

  

$

 17,964,142 

 

(10)            Party-in-Interest Transactions

 

The Plan engages in transactions involving the acquisition or disposition of TCF Financial Corporation common stock.  TCF Financial is a party-in-interest.  These transactions are covered by an exemption from the “prohibited transactions” provisions of ERISA and the Code.

 

During 2011 and 2010, TCF Financial did not purchase any shares of TCF Financial Corporation common stock from the Plan.

  

During 2011 and 2010, the Plan purchased 1,276,301 and 1,037,816 shares, respectively, of TCF Financial Corporation common stock from TCF Financial Corporation for $16,309,361 and $15,672,973, respectively.  The shares were purchased at current market prices with no commission fees.

14


 

Schedule 1

TCF Employees Stock Purchase Plan

Schedule H, line 4i – Schedule of Assets (Held at End of Year)

At December 31, 2011

 

  

Description of Investment including the Identity of Issuer,

Borrower or Similar Party and maturity date if applicable

  

Shares/Units or Interest Rate

  

Cost

  

Current Value

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

*

Corporate Stock

  

  

  

  

  

  

  

  

  

  

  

TCF Financial Corporation common stock

  

  

  

  

$

 111,127,454 

  

$

 83,979,946 

  

  

Cash and accrued interest receivable

  

  

  

  

  

 36,394 

  

  

 36,394 

  

  

  

  

Total Corporate Stock Fund:

  

 8,137,584 

shares

  

  

 111,163,848 

  

  

 84,016,340 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Mutual Funds

  

  

  

  

  

  

  

  

  

  

  

Vanguard Institutional Index Fund

  

 109,908 

shares

  

  

 12,072,087 

  

  

 12,643,767 

  

  

Vanguard Mid-Cap Index Fund

  

 632,891 

shares

  

  

 11,355,076 

  

  

 12,461,616 

  

  

Vanguard Small-Cap Index Fund

  

 281,543 

shares

  

  

 8,864,069 

  

  

 9,400,736 

  

  

Vanguard Intermediate-Term Bond Index Fund

  

 735,371 

shares

  

  

 8,120,628 

  

  

 8,655,316 

  

  

Vanguard Prime Money Market Fund

  

 7,491,465 

shares

  

  

 7,491,465 

  

  

 7,491,465 

  

  

Vanguard Developed Markets Index Fund

  

 282,555 

shares

  

  

 2,685,242 

  

  

 2,398,895 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Pooled Separate Accounts

  

  

  

  

  

  

  

  

  

  

  

Principal Global Investors Money Market Fund

  

 8,500 

units

  

  

 354,736 

  

  

 354,736 

  

  

Principal Global Investors Bond and Mtg Fund

  

 186 

units

  

  

 151,771 

  

  

 151,771 

  

  

Principal Global Investors Large-Cap S&P 500 Index

  

 789 

units

  

  

 35,684 

  

  

 35,684 

  

  

Columbus Circle Investors Large-Cap Growth

  

 1,561 

units

  

  

 33,683 

  

  

 33,683 

  

  

Fidelity / Schroders International I

  

 1,197 

units

  

  

 31,749 

  

  

 31,749 

  

  

TS&W / Herndon Large-Cap Value I

  

 2,280 

units

  

  

 25,393 

  

  

 25,393 

  

  

Principal Global Investors Small-Cap S&P 600 Index

  

 673 

units

  

  

 15,499 

  

  

 15,499 

  

  

Turner / Jacobs Levy Mid-Cap Growth III

  

 919 

units

  

  

 12,689 

  

  

 12,689 

  

  

Principal Global Investors Mid-Cap S&P 400 Index

  

 410 

units

  

  

 9,231 

  

  

 9,231 

  

  

Goldman Sachs/LA Capital Mgmt Mid-Cap Value I

  

 248 

units

  

  

 8,019 

  

  

 8,019 

  

  

Principal Real Estate Investors US Property

  

 13 

units

  

  

 6,029 

  

  

 6,029 

  

  

Emerald Advisers, Inc. Small-Cap Growth II

  

 542 

units

  

  

 5,487 

  

  

 5,487 

  

  

Principal Global Investors Small-Cap Value

  

 97 

units

  

  

 3,365 

  

  

 3,365 

  

  

Principal Life Term 2010 Target Fund

  

 43 

units

  

  

 641 

  

  

 641 

  

  

Principal Life Term 2015 Target Fund

  

 114 

units

  

  

 1,156 

  

  

 1,156 

  

  

Principal Life Term 2020 Target Fund

  

 162 

units

  

  

 2,420 

  

  

 2,420 

  

  

Principal Life Term 2030 Target Fund

  

 10,652 

units

  

  

 155,737 

  

  

 155,737 

  

  

Principal Life Term 2035 Target Fund

  

 121 

units

  

  

 1,158 

  

  

 1,158 

  

  

Principal Life Term 2040 Target Fund

  

 35,245 

units

  

  

 507,061 

  

  

 507,061 

  

  

Principal Life Term 2045 Target Fund

  

 167 

units

  

  

 1,574 

  

  

 1,574 

  

  

Principal Life Term 2050 Target Fund

  

 2,098 

units

  

  

 28,975 

  

  

 28,975 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Other Investments

  

  

  

  

  

  

  

  

  

  

  

Guaranteed Interest Account maturing 12/31/2011

  

Interest rate

0.32%

  

  

 322 

  

  

 322 

  

  

Guaranteed Interest Account maturing 12/31/2012

  

Interest rate

0.25%

  

  

 1,796 

  

  

 1,796 

  

  

Guaranteed Interest Account maturing 12/31/2013

  

Interest rate

0.21%

  

  

 8,633 

  

  

 8,633 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Notes Receivable from Participants

  

  

  

  

  

  

  

  

  

  

  

Individual participants loans maturing

  

  

  

  

  

  

  

  

  

  

  

  

between October 2012 and October 2015

  

Interest rate

5.25%

  

  

 - 

  

  

 8,694 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Total

  

  

  

  

$

 163,155,223 

  

$

 138,479,637 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

*

Parties-in-interest