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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, 2012

 

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/ Susan D. Bode

 

 

 

Susan D. Bode, Senior Vice
President and Chief Accounting Officer
(Principal Accounting Officer)

 

 

 

 

 

 

Dated:  June 26, 2013

 



 

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 (EX-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. 333-184676, 333-168893, 333-154929, 333-146741, 333-113748 and 333-72394) on Form S-8 of TCF Financial Corporation of our report dated June 26, 2013, with respect to the statements of net assets available for plan benefits of the TCF Employees Stock Purchase Plan as of December 31, 2012 and 2011, 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, 2012, and supplemental schedules as of and for the year ended December 31, 2012, which report appears in the December 31, 2012 annual report on Form 11-K of the TCF Employees Stock Purchase Plan.

 

 

 

 

 

/s/ KPMG LLP

 

 

 

 

Minneapolis, Minnesota

June 26, 2013

 


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Section 3: EX-99 (EX-99)

Exhibit 99

 

 

 

 

 

 

 

TCF Employees Stock Purchase Plan

 

 

Financial Statements and

Supplemental Schedules

 

 

December 31, 2012, 2011 and 2010

 



 

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, 2012 and 2011

 

2

 

 

 

Statements of Changes in Net Assets Available for Plan Benefits -
Years ended December 31, 2012, 2011 and 2010

 

3

 

 

 

Notes to Financial Statements

 

4 - 14

 

 

 

Supplemental Schedules:

 

 

 

 

 

Schedule 1 – Schedule H, line 4i - Schedule of Assets (Held at End of Year)

 

15

 

 

 

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, 2012 and 2011, 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, 2012.  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, 2012 and 2011, and the changes in net assets available for plan benefits for each of the years in the three-year period ended December 31, 2012 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 26, 2013

 

1



 

TCF Employees Stock Purchase Plan

 

Statements of Net Assets Available for Plan Benefits

 

 

 

 

As of December 31,

 

 

 

2012

 

 

2011

 

Assets:

 

 

 

 

 

 

Investments at fair value:

 

 

 

 

 

 

TCF Financial Stock Fund:

 

 

 

 

 

 

TCF Financial Corporation common stock

 

$  104,435,073

 

 

$  83,979,946

 

Cash and accrued interest receivable

 

34,588

 

 

36,394

 

Total TCF Financial Stock Fund

 

104,469,661

 

 

84,016,340

 

 

 

 

 

 

 

 

Mutual funds

 

66,360,608

 

 

53,051,795

 

Pooled separate accounts

 

-    

 

 

1,392,057

 

Other investments

 

-    

 

 

10,751

 

Total investments

 

170,830,269

 

 

138,470,943

 

 

 

 

 

 

 

 

Contributions receivable

 

90,755

 

 

27,053

 

Notes receivable from participants

 

1,261

 

 

8,694

 

Total assets

 

170,922,285

 

 

138,506,690

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Distributions payable to participants

 

218,193

 

 

205,629

 

 

 

 

 

 

 

 

Net assets available for plan benefits

 

$ 170,704,092

 

 

$ 138,301,061

 

 

 

See accompanying notes to financial statements.

 

2



 

TCF Employees Stock Purchase Plan

 

Statements of Changes in Net Assets Available for Plan Benefits

 

 

 

 

Year Ended December 31,

 

 

2012

 

 

2011

 

 

2010

 

Investment income:

 

 

 

 

 

 

 

 

 

Dividends

 

$

3,121,646

 

 

$

2,620,532

 

 

$

2,333,589

 

 

 

 

 

 

 

 

 

 

 

Net appreciation/(depreciation):

 

 

 

 

 

 

 

 

 

Realized (losses)/gains on distributions, sales and share class changes:

 

 

 

 

 

 

 

 

 

TCF Financial Stock Fund

 

(2,569,662

)

 

(421,175

)

 

2,544,664

 

Mutual funds

 

929,042

 

 

599,792

 

 

164,473

 

Pooled separate accounts

 

116,501

 

 

-    

 

 

-    

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized appreciation/ (depreciation) of investments:

 

 

 

 

 

 

 

 

 

TCF Financial Stock Fund

 

18,135,147

 

 

(34,645,917

)

 

7,770,681

 

Mutual funds

 

4,744,391

 

 

(1,653,897

)

 

4,973,284

 

Total net appreciation/ (depreciation)

 

21,355,419

 

 

(36,121,197

)

 

15,453,102

 

 

 

 

 

 

 

 

 

 

 

Deposits and contributions:

 

 

 

 

 

 

 

 

 

Participant deposits

 

15,787,463

 

 

13,936,922

 

 

12,971,619

 

Employer cash contributions

 

8,059,894

 

 

7,626,048

 

 

6,849,824

 

Total deposits and contributions

 

23,847,357

 

 

21,562,970

 

 

19,821,443

 

 

 

 

 

 

 

 

 

 

 

Distributions:

 

 

 

 

 

 

 

 

 

Withdrawals and distributions

 

(15,420,552

)

 

(13,450,730

)

 

(17,368,402

)

Dividends

 

(500,366

)

 

(524,944

)

 

(570,377

)

Total distributions

 

(15,920,918

)

 

(13,975,674

)

 

(17,938,779

)

 

 

 

 

 

 

 

 

 

 

Administrative expenses

 

(473

)

 

-    

 

 

(1,000

)

 

 

 

 

 

 

 

 

 

 

Transfer from other plan (See note 1)

 

-    

 

 

1,438,555

 

 

-    

 

 

 

 

 

 

 

 

 

 

 

Increase/ (Decrease) in net assets available for plan benefits

 

32,403,031

 

 

(24,474,814

)

 

19,668,355

 

 

 

 

 

 

 

 

 

 

 

Net assets available for plan benefits:

 

 

 

 

 

 

 

 

 

Beginning of year

 

138,301,061

 

 

162,775,875

 

 

143,107,520

 

End of year

 

$

170,704,092

 

 

$

138,301,061

 

 

$

162,775,875

 

 

 

See accompanying notes to financial statements.

 

3



 

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 (“TCF Financial”) acquired Gateway One Lending & Finance LLC (“GOLF”).  Effective December 31, 2011, the Gateway One Lending & Finance 401(k)Plan (“GOLF Plan”) along with its assets of $1,438,555 was merged into the Plan.  On April 3, 2012, the Plan liquidated the GOLF Plan participant investments held at Principal Financial Group for a total of $1,526,326.  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.

 

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.  During 2012 and 2011 notes receivable from participants of $4,447 and $0 were reclassified as distributed, respectively.

 

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 common stock.  At both December 31, 2012 and 2011, approximately 61% of the Plan’s total assets were invested in the common stock of TCF Financial. The underlying value of the TCF Financial common stock is entirely dependent upon the performance of TCF Financial and the market’s evaluation of such performance.

 

4



 

TCF Employees Stock Purchase Plan

 

Notes to Financial Statements (Continued)

 

(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.  Commencing July 1, 2012, the portion of the Plan that is invested in the TCF Financial Stock Fund is the Plan’s stock bonus portion, which is an employee stock ownership plan under Section 4975(e) of the Code, designed to invest primarily in TCF Financial common stock, and the portion of the Plan that is not invested in the TCF Financial Stock Fund is the Plan’s profit sharing portion; both portions are part of a plan that includes a qualified cash or deferred arrangement under Section 401(k) of the Code.  The Plan continues to qualify under Section 401(a) of the Code.  There is no impact to the Plan participants.  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.  For the year ended December 31, 2012, Mercer Trust Company (“Mercer”) was the trustee of the Plan appointed to serve under the trust agreement.  For the year ended December 31, 2011, Mercer and Principal Financial Group (“Principal”) together were the trustees of the Plan under the trust agreement.  Record keeping administration of the Plan was managed by Mercer HR Services, LLC  for the year ended December 31, 2012 and by Mercer HR Services, LLC and Principal Financial Group for the year ended December 31, 2011.

 

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 limits imposed by the Internal Revenue Service (“IRS”). The maximum annual limit was $17,000 for 2012 and $16,500 for 2011 and 2010, 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 2012, 2011 and 2010, 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 common stock.

 

All employee and employer contributions are invested in participant directed investments.  Participants may elect to invest their employee account balance in any or all of the offered mutual fund investments or the TCF Financial Stock Fund.  Employer matching contributions initially are invested in the TCF Financial Stock Fund, but participants may direct investment of employer matching contributions in available mutual funds; if a participant does not make a valid investment election with respect to any

 

5



 

TCF Employees Stock Purchase Plan

 

Notes to Financial Statements (Continued)

 

other contributions, including participant contributions, these contributions will be invested in the TCF Financial Stock Fund.  For the years ended December 31, 2012, 2011 and 2010, all balances were directed by participants.

 

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.

 

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 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 2012, 2011 and 2010 totaled $499,246, $461,952, and $445,564, 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 2012 and 2011, TCF Financial received $13,899 and $35,300 of redeposited distributions from the trustee and reissued distribution checks to former participants totaling $1,335 and $24,247, respectively.  As of December 31, 2012 and 2011, $218,193 and $205,629 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, 2012

 

 

 

 

Participating Employer

 

 

 

Participant
Deposits at
Cost

 

 

 

Employer
Contributions
at Cost

 

 

 

At December 31,
2012
Net Assets

 

TCF National Bank

 

 

 

$

10,703,914

 

 

 

$

5,680,408

 

 

 

$

134,202,837

 

TCF Equipment Finance, Inc.

 

 

 

1,630,960

 

 

 

918,440

 

 

 

13,356,987

 

Winthrop Resources Corporation

 

 

 

885,949

 

 

 

558,842

 

 

 

9,268,664

 

TCF Financial

 

 

 

312,506

 

 

 

146,843

 

 

 

3,813,642

 

TCF Inventory Finance, Inc.

 

 

 

1,051,013

 

 

 

385,970

 

 

 

3,940,971

 

Gateway One Lending & Finance, LLC

 

 

 

1,085,436

 

 

 

279,692

 

 

 

3,561,012

 

TCF Portfolio Services, Inc.

 

 

 

87,872

 

 

 

71,157

 

 

 

1,476,338

 

TCF Agency, Inc.

 

 

 

20,311

 

 

 

13,791

 

 

 

607,434

 

TCF Insurance Agency, Inc.

 

 

 

-

 

 

 

-

 

 

 

395,196

 

Great Lakes Mortgage, LLC

 

 

 

9,502

 

 

 

4,751

 

 

 

81,011

 

Total

 

 

 

$

15,787,463

 

 

 

$

8,059,894

 

 

 

$

170,704,092

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

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

 

 

 

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

 

 

7



 

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, 2012

 

 

 

Cost

 

 

 

Fair Value

 

 

 

Unrealized
(Depreciation)/
Appreciation

 

TCF Financial Stock Fund:

 

 

 

 

 

 

 

 

 

 

 

 

TCF Financial common stock

 

 

$

113,447,434

 

 

 

$

104,435,073

 

 

 

$

(9,012,361

)

Cash and accrued interest receivable

 

 

34,588

 

 

 

34,588

 

 

 

-

 

Total TCF Financial Stock Fund

 

 

113,482,022

 

 

 

104,469,661

 

 

 

(9,012,361

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Mutual funds

 

 

59,152,989

 

 

 

66,360,608

 

 

 

7,207,619

 

 

 

 

$

172,635,011

 

 

 

$

170,830,269

 

 

 

$

(1,804,742

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2011

 

 

 

Cost

 

 

 

Fair Value

 

 

 

Unrealized
(Depreciation)/
Appreciation

 

TCF Financial Stock Fund:

 

 

 

 

 

 

 

 

 

 

 

 

TCF Financial common stock

 

 

$

111,127,454

 

 

 

$

83,979,946

 

 

 

$

(27,147,508

)

Cash and accrued interest receivable

 

 

36,394

 

 

 

36,394

 

 

 

-

 

Total TCF Financial 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

)

 

9



 

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, 2012:

 

 

 

 

 

TCF Financial common stock

 

8,595,465

 

$

104,435,073

 

Vanguard Institutional Index Fund

 

123,081

 

16,064,518

 

Vanguard Mid-Cap Index Fund

 

695,755

 

15,668,394

 

Vanguard Small-Cap Index Fund

 

314,557

 

12,192,233

 

Vanguard Intermediate-Term Bond Index Fund

 

916,702

 

10,963,758

 

 

 

 

 

 

 

Year ended December 31, 2011:

 

 

 

 

 

TCF Financial 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

 

 

(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, 2012, assets held in trust for the Plan included investments in publicly traded stock and mutual funds. 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.  At December 31, 2012, there were no assets measured on a recurring basis that are based on observable market prices (level 2) or company determined market prices (level 3).

 

During 2011, 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 common stock: 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, 2012

 

TCF’s Categories

 

Readily
Available Market
Prices (1)

 

Observable
Market
Prices (2)

 

Total at Fair
Value

 

TCF Financial Stock Fund

 

$

104,469,661

 

$

-

 

$

104,469,661

 

Mutual funds

 

 

 

 

 

 

 

-Domestic equity

 

43,925,145

 

-

 

43,925,145

 

-Fixed income

 

10,963,758

 

-

 

10,963,758

 

-Money market fund

 

7,871,691

 

-

 

7,871,691

 

-International equity

 

3,600,014

 

-

 

3,600,014

 

 

 

$

170,830,269

 

$

-

 

$

170,830,269

 

 

 

 

 

Year Ended December 31, 2011

 

TCF’s Categories

 

Readily
Available Market
Prices (1)

 

Observable
Market
Prices (2)

 

Total at Fair
Value

 

TCF Financial 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

 

 

(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 common stock.  Distributions, sales and share class changes (mutual funds) are as follows:

 

 

 

 

Year Ended December 31, 2012

 

 

Number of
Shares

 

Cost

 

Fair Value

 

(Losses)/
Gains on
Distributions
and Sales

TCF Financial common stock

 

1,264,196

 

$

16,895,078

 

$

14,325,416

 

$

(2,569,662)

Mutual funds

 

21,567,259

 

29,302,101

 

30,231,143

 

929,042

Pooled separate accounts

 

66,946

 

1,406,548

 

1,523,049

 

116,501

 

 

22,898,401

 

$

47,603,727

 

$

46,079,608

 

$

(1,524,119)

 

 

 

 

 

 

 

 

Year Ended December 31, 2011

 

 

Number of
Shares

 

Cost

 

Fair Value

 

(Losses)/
Gains on
Distributions
and Sales

TCF Financial 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 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

 

12



 

TCF Employees Stock Purchase Plan

 

Notes to Financial Statements (Continued)

 

(8)                                 Distributions and Forfeitures

 

Cash and shares of TCF Financial common stock totaling $15,920,918, $13,975,674 and $17,938,779 were distributed in 2012, 2011 and 2010, respectively.  In addition, at December 31, 2012 and 2011 there were $218,193 and $205,629 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,

 

 

2012

 

2011

 

2010

 

 

 

 

 

 

 

 

Total forfeitures during year

 

$

347,382

 

$

354,660

 

$

393,126

 

 

 

 

 

 

 

 

 

Forfeitures carried over from previous year

 

4,827

 

24,698

 

6,878

 

 

 

 

 

 

 

 

 

Interest on forfeited amounts

 

79

 

103

 

141

 

 

 

 

 

 

 

 

 

Forfeitures used to reinstate employee balances

 

(21,816)

 

(14,634)

 

(19,447

)

 

 

 

 

 

 

 

 

Forfeitures used to fund employer contributions

 

(325,000)

 

(360,000)

 

(355,000

)

 

 

 

 

 

 

 

 

Forfeitures used to pay plan expenses

 

-

 

-

 

(1,000

)

 

 

 

 

 

 

 

 

Forfeitures to be used to offset future obligations

 

$

5,472

 

$

4,827

 

$

24,698

 

 

Forfeitures to be used to offset future obligations are included in the Vanguard Prime Money Market Fund.

 

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 2012 and 2011 differ from the Form 5500, as filed with the Department of Labor, as follows:

 

 

 

As of December 31,

 

 

 

2012

 

2011

 

Net assets available for plan benefits reported on the accompanying financial statements

 

$  170,704,092

 

$  138,301,061

 

Liabilities including amounts due to participants

 

(7,010)

 

(12,452)

 

Net assets available for plan benefits reported on Form 5500

 

$  170,697,082

 

$  138,288,609

 

 

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

 

 

 

Year Ended December 31,

 

 

 

2012

 

2011

 

Distributions to participants reported on the accompanying financial statements

 

$   15,920,918

 

$   13,975,674

 

Add: Amounts allocated to withdrawing participants at year end

 

7,010

 

12,452

 

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

 

(12,452)

 

(30,759)

 

Distributions to participants reported on Form 5500

 

$   15,915,476

 

$   13,957,367

 

 

(10)                          Party-in-Interest Transactions

 

The Plan engages in transactions involving the acquisition or disposition of TCF Financial 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 2012 and 2011, TCF Financial did not purchase any shares of TCF Financial common stock from the Plan.

 

During 2012 and 2011, the Plan purchased 1,583,275 and 1,276,301 shares, respectively, of TCF Financial common stock from TCF Financial for $17,688,412 and $16,309,361, 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, 2012

 

Description of Investment including the Identity
of Issuer, Borrower or Similar Party and maturity
date if applicable

 

Shares or
Interest Rate

 

Cost

 

Current Value

 

 

 

 

 

 

 

 

 

 

 

 

*

Corporate Stock

 

 

 

 

 

 

 

 

 

 

TCF Financial common stock

 

 

 

 

 

$

113,447,434

 

$

104,435,073

 

 

Cash and accrued interest receivable

 

 

 

 

 

34,588

 

34,588

 

 

Total TCF Financial Stock Fund:

 

8,595,465

 

shares

 

113,482,022

 

104,469,661

 

 

 

 

 

 

 

 

 

 

 

 

 

Mutual Funds

 

 

 

 

 

 

 

 

 

 

Vanguard Institutional Index Fund

 

123,081

 

shares

 

14,023,427

 

16,064,518

 

 

Vanguard Mid-Cap Index Fund

 

695,755

 

shares

 

13,036,674

 

15,668,394

 

 

Vanguard Small-Cap Index Fund

 

314,557

 

shares

 

10,325,612

 

12,192,233

 

 

Vanguard Intermediate-Term Bond Index Fund

 

916,702

 

shares

 

10,421,189

 

10,963,758

 

 

Vanguard Prime Money Market Fund

 

7,871,691

 

shares

 

7,871,691

 

7,871,691

 

 

Vanguard Developed Markets Index Fund

 

128,389

 

shares

 

3,474,396

 

3,600,014

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes Receivable from Participants

 

 

 

 

 

 

 

 

 

 

Individual participants loans maturing between October 2013 and June 2015

 

Interest rate

 

5.25%

 

-

 

1,261

 

 

Total

 

 

 

 

 

$

172,635,011

 

$

170,831,530

 

 

*Parties-in-interest

 

See accompanying Report of Independent Registered Public Accounting Firm.

 

15



 

Schedule 2

 

TCF Employees Stock Purchase Plan

 

Schedule H, line 4j - Schedule of Reportable Transactions

 

Year Ended December 31, 2012

 

Series of Transactions (Involving One Security) Which Exceed 5% of Plan Assets:

 

 

 

Number of

 

Amount of

 

 

 

Description of
Asset

 

Purchases

 

Sales

 

Purchases

 

Sales

 

Cost

 

Net Loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TCF Financial Stock Fund *

 

403

 

913

 

$ 19,215,059

 

$  14,325,416

 

$ 16,895,078

 

$  (2,569,662)

 

 

 

*Parties–in-interest

 

See accompanying Report of Independent Registered Public Accounting Firm.

 

16


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