<PAGE>
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] Annual Report Pursuant to Section 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended
December 31, 1996
or
[ ] Transition Report Pursuant to Section 15(d)
of the Securities Exchange Act of 1934
--------------------------
Commission File
No. 33-43030
--------------------------
TCF EMPLOYEES STOCK OWNERSHIP PLAN - 401(K)
-------------------------------------------
(Full title of the plan)
TCF FINANCIAL CORPORATION
---------------------------------------------------------------
(Name of issuer of the securities held pursuant to the plan)
801 Marquette Avenue, Suite 302, Minneapolis, Minnesota 55402
---------------------------------------------------------------
(Address and zip code of principal executive office)
-1-
<PAGE>
Index
PAGE NO.
--------
Financial Statements and Exhibits
Independent Auditors' Report 3
Statements of Net Assets Available for Plan
Benefits - at December 31, 1996 and 1995 4
Statements of Changes in Net Assets Available for
Plan Benefits - Years ended December 31, 1996,
1995 and 1994 5
Notes to Financial Statements 6-11
Supplemental Schedules 12-13
Signatures 14
Index to Exhibits 15
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<PAGE>
[LOGO]
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Administrator of the
TCF Employees Stock Ownership Plan - 401(k):
We have audited the accompanying statements of net assets available for plan
benefits of the TCF Employees Stock Ownership Plan - 401(k) (the Plan) as of
December 31, 1996 and 1995 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, 1996. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based upon our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit 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 as of December
31, 1996 and 1995 and the changes in net assets available for plan benefits for
each of the years in the three-year period ended December 31, 1996 in conformity
with 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. 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 Peat Marwick LLP
Minneapolis, Minnesota
June 23, 1997
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<PAGE>
TCF Employees Stock Ownership Plan - 401(k)
Statements of Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
At December 31,
-------------------------
1996 1995
----------- ----------
<S> <C> <C>
Assets:
Investment in TCF Financial Corporation
common stock, at market value
(cost of $29,530,448 and $21,576,372 ) $109,021,266 $68,320,975
Cash fund 844,692 607,148
Accrued interest receivable 5,010 2,889
----------- ----------
Total assets 109,870,968 68,931,012
Liabilities:
Due to broker on purchase of securities - 83,836
----------- ----------
Net assets available for plan benefits $109,870,968 $68,847,176
----------- ----------
----------- ----------
</TABLE>
See accompanying notes to financial statements.
-4-
<PAGE>
TCF Employees Stock Ownership Plan - 401(k)
Statements of Changes in Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------
1996 1995 1994
------------ ----------- -----------
<S> <C> <C> <C>
Investment income:
Dividends $ 1,803,822 $ 1,244,440 $ 1,027,604
Interest 43,274 20,470 21,764
------------ ----------- -----------
Total investment income 1,847,096 1,264,910 1,049,368
------------ ----------- -----------
Realized gain on distributions for
withdrawals and terminations 11,161,520 3,550,493 1,583,018
Change in unrealized appreciation
of investments 13,867,319 22,517,910 6,077,568
------------ ----------- -----------
Deposits and contributions:
Participant deposits 4,439,577 3,260,211 3,001,716
Employer contributions 1,826,564 1,395,641 1,789,609
------------ ----------- -----------
Total deposits and contributions 6,266,141 4,655,852 4,791,325
------------ ----------- -----------
Merger of Republic Capital Group, Inc. plans - 120,114 464,822
Merger of Great Lakes Bancorp plans 26,815,264 - -
Distributions:
Withdrawals and terminations (17,073,229) (5,603,840) (3,029,747)
Dividends (1,855,939) (1,232,428) (870,540)
------------ ----------- -----------
Total distributions (18,929,168) (6,836,268) (3,900,287)
------------ ----------- -----------
Administrative expenses (4,380) - -
------------ ----------- -----------
Increase in net assets available for 41,023,792 25,273,011 10,065,814
plan benefits
Net assets available for plan benefits:
Beginning of year 68,847,176 43,574,165 33,508,351
------------ ----------- -----------
End of year $109,870,968 $68,847,176 $43,574,165
------------ ----------- -----------
------------ ----------- -----------
</TABLE>
See accompanying notes to financial statements.
-5-
<PAGE>
TCF Employees Stock Ownership Plan - 401(k)
Notes to Financial Statements
(1) ACCOUNTING PRINCIPLES
The financial statements of the TCF Employees Stock Ownership Plan - 401(k)
(the "Plan") have been prepared on the accrual basis of accounting. Assets
of the Plan are stated at market value. The cost of Plan investments sold
is determined by the average cost method. Benefits are recorded when paid.
Basis of Presentation
The preparation of financial statements in conformity with generally
accepted accounting principles requires the plan administrator to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
(2) EMPLOYEE STOCK OWNERSHIP PLAN
The Plan was adopted by the Board of Directors of TCF Bank Minnesota fsb
("TCF Bank") and approved by its stockholders effective January 1, 1987 as
the TCF Employees Stock Bonus Plan - 401(k). Effective October 1, 1988,
the Plan was amended and restated as the TCF Employees Stock Ownership Plan
- 401(k). The Plan is intended to meet the requirements for qualification
of a stock bonus plan under Section 401(a) of the Internal Revenue Code of
1986 (the "Code"), as amended, an employee stock ownership plan under
Section 4975(e)(7) 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 ("ERISA"), as amended.
The Plan was established for the purpose of providing eligible employees
with a convenient, tax-favored opportunity to invest in the stock of TCF
Bank's parent, TCF Financial Corporation ("TCF Financial"), and to provide
an additional source of retirement income. All "regular stated salary"
employees and certain commissioned employees of participating employers,
with one year of service, are eligible to participate.
With certain limitations, participants may elect to invest up to 12% of
their covered pay on a tax-deferred basis and an additional 6% on an
after-tax basis in the Plan. Through December 31, 1994, the participating
employers matched the contributions for tax-favored deposits of
participants who were non-highly compensated employees, as defined, at the
rate of 75 cents per dollar, with a maximum employer contribution of 4.5%
of the employee's salary. The contributions of the remaining participants
were matched at the rate of 50 cents per dollar, with a maximum employer
contribution of 3% of the employee's salary. Beginning January 1, 1995,
the participating employers matched the contributions of all employees at
the rate of 50 cents per dollar with a maximum employer contribution of 3%
of the employee's salary. Employer contributions are made in the form of
TCF Financial common stock or cash. Cash contributions are invested in TCF
Financial common stock shortly after the date contributed.
-6-
<PAGE>
TCF Employees Stock Ownership Plan - 401(k)
Notes to Financial Statements (Continued)
Beginning in 1994, dividends earned on shares in the Plan are distributed
in cash to participants. (Previously, dividends were credited to the
individual accounts and used to purchase additional shares of TCF Financial
common stock.) TCF Bank made a one time dividend distribution to
participants, in December 1994, for the entire year of dividends paid on
vested shares. Dividends paid on unvested shares in 1994 will be retained
as TCF Financial common stock in the Plan. For years beginning January 1,
1995 and after, TCF Bank will distribute dividends for all shares (vested
and unvested) on a quarterly basis. However, TCF Bank reserves the right
to change the treatment of dividends on a prospective basis.
First Trust National Association ("First Trust" or "Trustee") is the
trustee of the Plan appointed to serve under the trust agreement.
With the concurrence of TCF Bank, First Trust is authorized to borrow funds
for purchases of TCF Financial common stock. As of December 31, 1996 and
1995 no such loans had occurred. The Plan provides that the only sources
of repayment are employer contributions made in the usual course of
operation of the Plan and/or a guarantee from TCF Financial. Employee
contributions will not be used in any event to repay such loans and TCF
Bank is prohibited from guaranteeing any such loans. Shares purchased with
the proceeds of any such loans initially will be held unallocated in the
Plan, and then released and allocated to the matching accounts of employees
as payments are made on the loan.
The participating employers, at their discretion, may make additional
contributions to the Plan, subject to an overall limit of 15% of covered
pay of Plan participants. These additional contributions are allocated to
participants' matching accounts in proportion to their respective
percentage rate of matched contributions, subject to certain limitations.
Participant deposits to the Plan are fully vested at all times.
Participants' interest in the employer matching account generally vest at
the rate of 20% per year (with full vesting after five years of vesting
service). The Plan permits financial hardship withdrawals consistent with
the safe harbor provisions of regulations issued pursuant to the Tax Reform
Act of 1986.
Prior to September 30, 1996, amounts which have been forfeited in
accordance with provisions of the Plan are reallocated to the remaining
participants' matching accounts in proportion to their respective
percentage rate of matched contributions, subject to certain limitations.
These forfeitures have been reallocated as of the last day of the Plan
year. Beginning October 1, 1996, forfeitures will be applied to the
payment of plan expenses.
TCF Bank has reserved the right to amend the Plan at any time and each
participating employer may terminate the Plan at any time as to its
employees. In the event of termination of the Plan, participating
employees become 100% vested in their employer matching account balances.
-7-
<PAGE>
TCF Employees Stock Ownership Plan - 401(k)
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:
<TABLE>
<CAPTION>
Year Ended At
December 31, 1996 December 31, 1996
------------------------- -----------------
Participant Employer
Deposits Contributions Net Assets
Participating Employer at Cost at Cost
---------------------- ------------ ----------- -----------------
<S> <C> <C> <C>
TCF Financial Corporation $ 948,987 $ 404,904 $ 30,227,722
TCF Bank Minnesota fsb 1,145,150 479,179 31,455,250
TCF Bank Illinois fsb 334,663 131,835 4,642,634
TCF Bank Wisconsin fsb 324,879 128,088 4,414,590
Great Lakes Bancorp 795,983 318,222 22,053,249
TCF Mortgage Corporation, Inc. 260,977 110,081 7,810,477
North Star Title, Inc. 167,828 69,422 2,571,826
North Star Real Estate Services, Inc. 24,232 7,774 209,862
TCF Agency Minnesota, Inc. 17,361 5,545 457,685
TCF Realty, Inc. - - 81,707
TCF Financial Insurance Agency, Inc. 42,597 19,484 873,277
TCF Financial Insurance Agency
Wisconsin, Inc. 6,679 3,340 228,507
TCF Financial Insurance Agency
Illinois, Inc. 6,767 2,043 222,433
TCF Financial Insurance Agency
Michigan, Inc. 16,586 4,147 24,735
TCF Financial Services, Inc. 139,729 58,483 3,244,888
TCF Consumer Financial Services, Inc. 183,185 75,050 674,547
TCF Securities, Inc. 18,394 7,293 648,129
Twin City/Burnet, Inc. 5,580 1,674 29,450
----------- ---------- ------------
Total $4,439,577 $1,826,564 $109,870,968
----------- ---------- ------------
----------- ---------- ------------
</TABLE>
TCF Realty, Inc. had no active employees as of December 31, 1996 or 1995.
Vanguard Financial Services, Inc. was dissolved and its employees merged into
TCF Financial Services, Inc. effective May 5, 1995.
<TABLE>
<CAPTION>
Year Ended At
December 31, 1995 December 31, 1995
------------------------- -----------------
Participant Employer
Deposits Contributions Net Assets
Participating Employer at Cost at Cost
---------------------- ------------ ----------- -----------------
<S> <C> <C> <C>
TCF Financial Corporation $ 720,605 $ 307,181 $19,885,912
TCF Bank Minnesota fsb 1,002,445 440,598 26,429,330
TCF Bank Illinois fsb 299,956 124,571 3,411,746
TCF Bank Wisconsin fsb 325,903 135,718 3,698,826
TCF Bank Michigan fsb 132,347 57,206 1,837,718
TCF Mortgage Corporation, Inc. 326,596 145,324 7,299,879
North Star Title, Inc. 124,187 52,165 1,790,888
North Star Real Estate Services, Inc. 30,281 8,235 133,951
TCF Agency Minnesota, Inc. 22,110 8,309 512,265
TCF Realty, Inc. - - 163,294
TCF Financial Insurance Agency, Inc. 36,319 17,516 703,041
TCF Financial Insurance Agency
Wisconsin, Inc. 5,374 2,687 31,294
TCF Financial Insurance Agency
Illinois, Inc. 4,777 1,976 157,998
TCF Financial Services, Inc. 106,976 47,519 1,861,869
TCF Consumer Financial Services, Inc. 101,944 39,116 449,428
TCF Securities, Inc. 15,331 6,002 463,964
Twin City/Burnet, Inc. 5,060 1,518 15,773
Vanguard Financial Services, Inc. - - -
----------- ---------- -----------
Total $3,260,211 $1,395,641 $68,847,176
----------- ---------- -----------
----------- ---------- -----------
</TABLE>
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<PAGE>
TCF Employees Stock Ownership Plan - 401(k)
Notes to Financial Statements (Continued)
(4) INCOME TAX STATUS
TCF Bank has received a favorable tax determination letter from the
Internal Revenue Service ("IRS") indicating that the Plan qualified under
Section 401(a) and 409 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 deposits and amounts
contributed by participating employers are not taxed to the employee until
a distribution from the Plan is received.
(5) INVESTMENT IN TCF FINANCIAL COMMON STOCK
Plan investments are stated at market value, determined by quoted market
price. The net unrealized appreciation of investments reflected in Plan
equity is as follows:
<TABLE>
<CAPTION>
At December 31,
--------------------------
1996 1995
------------ -----------
<S> <C> <C>
Market value $109,021,266 $68,320,975
Cost 29,530,448 21,576,372
------------ -----------
Unrealized appreciation $ 79,490,818 $46,744,603
------------ -----------
------------ -----------
</TABLE>
The investments shown in the preceding table represent five percent or more
of plan equity.
(6) WITHDRAWALS AND TERMINATIONS
Participants can elect to receive distributions from the Plan in the form
of cash or shares of TCF Financial common stock. Distributions and sales
of TCF Financial common stock are as follows:
<TABLE>
<CAPTION>
Year Ended
December 31,
----------------------------------------
1996 1995 1994
----------- ---------- ----------
<S> <C> <C> <C>
Number of shares 448,180 134,784 88,981
----------- ---------- ----------
----------- ---------- ----------
Cost of shares $ 4,892,963 $2,321,899 $1,519,824
Market value 16,054,483 5,872,392 3,102,842
----------- ---------- ----------
Gain on distribution $11,161,520 $3,550,493 $1,583,018
----------- ---------- ----------
----------- ---------- ----------
</TABLE>
-9-
<PAGE>
TCF Employees Stock Ownership Plan - 401(k)
Notes to Financial Statements (Continued)
Cash and TCF Financial common stock of $18,929,168, $6,836,268 and
$3,900,287 was distributed in 1996, 1995 and 1994, respectively. At
December 31, 1996 and 1995, liabilities including amounts due to
participants, which are deducted from net assets available for plan
benefits when paid, are $3,188,840 and $838,154, respectively.
The accompanying financial statements for 1996 and 1995 differ from Form
5500, as filed with the Internal Revenue Service, as follows:
<TABLE>
<CAPTION>
1996 1995
------------ -----------
<S> <C> <C>
Net assets available for plan benefits per
accompanying financial statements $109,870,968 $68,847,176
Liabilities including amounts due to
participants (3,188,840) (838,154)
------------ -----------
Net assets available for plan benefits
per Form 5500 $106,682,128 $68,009,022
------------ -----------
------------ -----------
</TABLE>
Amounts forfeited and allocated to remaining participants are as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------
1996 1995 1994
----------- ---------- ----------
<S> <C> <C> <C>
Value of accounts terminated and
withdrawn $19,007,119 $7,086,829 $4,109,635
Withdrawals and terminations
distributed 18,929,168 6,836,268 3,900,287
----------- ---------- ----------
Amount forfeited and allocated
to remaining participants $ 77,951 $ 250,561 $ 209,348
----------- ---------- ----------
----------- ---------- ----------
</TABLE>
(7) MERGERS AND PLAN MERGERS
On April 21, 1993, Republic Capital Group, Inc. ("RCG") merged with TCF
Financial. Effective October 1, 1993, RCG employees eligible for the RCG
Employee Stock Ownership Plan and Trust (the "RCG ESOP") became eligible
for participation in the Plan. The accounts of participants in the RCG
ESOP were transferred to the Plan in March 1994. This merger increased the
net assets of the Plan, net of expenses, by $464,822.
The RCG 401(k) Employees' Savings Plan ("RCG 401(k)") was terminated on
September 30, 1993 and the termination was approved by the IRS on November
9, 1994. RCG employees were given until January 31, 1995 to elect the
method of distribution of their participant value in the terminated RCG
plan. Forty-six RCG 401(k) participants elected to rollover to the Plan
and these accounts were transferred in February 1995. These rollovers
increased the net assets of the Plan by $120,114.
On February 8, 1995, Great Lakes Bancorp ("GLB") merged with TCF Financial.
Effective January 1, 1996, GLB employees eligible for the GLB Employee
Stock Ownership Plan (the "GLB ESOP") became eligible for participation in
the Plan. The accounts of participants in the GLB ESOP were transferred to
the Plan in 1996. Transfers from the GLB ESOP have increased the net
assets of the Plan, net of expenses, by $24,958,455.
-10-
<PAGE>
TCF Employees Stock Ownership Plan - 401(k)
Notes to Financial Statements (Continued)
The GLB 401(k) Savings and Investment Plan (the "GLB" 401(k)") was
terminated on December 31, 1995 and the termination was approved by the IRS
on February 14, 1996. GLB employees were given until April 30, 1996 to
elect the method of distribution of their participant value in the
terminated plan. Assets were transferred in 1996 for those participants
requesting rollovers to the Plan. These rollovers increased the net assets
of the Plan by $1,856,809.
(8) PARTY-IN-INTEREST TRANSACTIONS
The Plan engages in transactions involving the acquisition or disposition
of TCF Financial common stock and units of First American Prime Obligation
Class C Institutional Fund investment fund of the Trustee. TCF Financial
and the Trustee are parties-in-interest. These transactions are covered by
an exemption from the "prohibited transactions" provisions of ERISA and the
Internal Revenue Code.
-11-
<PAGE>
SCHEDULE 1
TCF Employees Stock Ownership Plan - 401(k)
Item 27a - Schedule of Assets Held for Investment Purposes
At December 31, 1996
<TABLE>
<CAPTION>
Number
of Market
Issuer Description Shares Cost Value
------ ----------- ------ ---------- ------------
<S> <C> <C> <C> <C>
TCF Financial* Common Stock 2,506,236 $29,530,448 $109,021,266
First American
Prime Obligation
Class C
Institutional
Fund* Money Fund 844,692 $ 844,692 $ 844,692
</TABLE>
*Parties-in-interest
See accompanying independent auditors' report.
-12-
<PAGE>
SCHEDULE 2
TCF Employees Stock Ownership Plan - 401(k)
Item 27d - Schedule of Reportable Transactions
Year Ended December 31, 1996
SERIES OF TRANSACTIONS (INVOLVING ONE SECURITY) WHICH EXCEED 5% OF PLAN ASSETS:
<TABLE>
<CAPTION>
Number of Amount of
------------------- -----------------------
Description of Asset Purchases Sales Purchases Sales Net Gain
- -------------------------- --------- ----- --------- ----- --------
<S> <C> <C> <C> <C> <C>
TCF Financial Common Stock* 29 20 $ 5,656,681 $16,054,483 $11,161,520
First American Prime
Obligation Class C
Institutional Fund* 76 67 $19,200,591 $18,963,047 $ -
</TABLE>
*Parties-in-interest
See accompanying independent auditors' report.
-13-
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, TCF
National Bank Minnesota has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
TCF National Bank Minnesota
(Plan Sponsor and Plan Administrator of
the TCF Employees Stock Ownership
Plan - 401(k))
By /s/ Gregory J. Pulles
--------------------------------
Gregory J. Pulles
Executive Vice President
By /s/ Mark R. Lund
--------------------------------
Mark R. Lund
Senior Vice President, Assistant
Treasurer and Controller
Date: June 27, 1997
-14-
<PAGE>
TCF Employees Stock Ownership Plan - 401(k)
Index to Exhibits
For Form 11-K
Exhibit Sequentially
Number Description Numbered Page
------- ----------- -------------
23 Consent of KPMG Peat Marwick 16
dated June 27, 1997
-15-
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and
The Administrator of the TCF
Employee Stock Ownership
Plan - 401(k):
We consent to incorporation by reference in the registration statement (No.
33-43030) on Form S-8 of TCF Financial Corporation of our report dated June 23,
1997, relating to the statements of net assets available for plan benefits of
the TCF Employees Stock Ownership Plan - 401(k) as of December 31, 1996 and
1995, 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, 1996,
and related schedules as of and for the year ended December 31, 1996, which
report appears elsewhere in this December 31, 1996 annual report on Form 11-K of
the TCF Employees Stock Ownership Plan - 401(k).
/s/ KPMG Peat Marwick LLP
Minneapolis, Minnesota
June 27, 1997
-16-
