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Section 1: 8-K (8-K)

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 8-K

 


 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  October 21, 2010

 


 

 

TCF FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

 


 

Delaware

 

001-10253

 

41-1591444

(State or other jurisdiction of

 

(Commission File Number)

 

(IRS Employer Identification No.)

incorporation or organization)

 

 

 

 

 

200 Lake Street East, Mail Code EX0-03-A, Wayzata, Minnesota 55391-1693

(Address of principal executive offices)

 

(952) 745-2760

(Registrant’s telephone number, including area code)

 


 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

 


 

Item 2.02  Results of Operations and Financial Condition.

 

In accordance with General Instruction B.2 of Form 8-K, the following information, including Exhibit 99.1, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall such information and Exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933, except as may be expressly set forth by specific reference in such a filing.

 

The registrant issued a press release dated October 21, 2010, attached to this Form 8-K as Exhibit 99.1, announcing its results of operations for the quarter ended September 30, 2010.

 

The earnings release is also available on the Company’s web site at http://ir.tcfbank.com.  TCF Financial Corporation’s Annual Report to Shareholders and its reports on Forms 10-K, 10-Q and 8-K and other publicly available information should be consulted for other important information about the Company.

 

Item 9.01    Financial Statements and Exhibits.

 

(d)         Exhibits.

 

Exhibit No.

 Description

 

 

99.1

Earnings Release of TCF Financial Corporation,
dated October 21, 2010

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

TCF FINANCIAL CORPORATION

 

 

 

 

 

/s/ William A. Cooper

 

William A. Cooper,
Chairman and Chief Executive Officer
(Principal Executive Officer)

 

 

 

/s/ Thomas F. Jasper

 

Thomas F. Jasper, Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)

 

 

 

/s/ David M. Stautz

 

David M. Stautz, Senior Vice President,
Controller and Assistant Treasurer
(Principal Accounting Officer)

 

Dated:    October 21, 2010

 

2

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

 

Exhibit 99.1

 

NEWS RELEASE

 

 

CONTACT:

Jason Korstange

 

 

(952) 745-2755

 

 

 

 

 

www.tcfbank.com

 

 

 

FOR IMMEDIATE RELEASE

 

 

TCF FINANCIAL CORPORATION 200 Lake Street East, Wayzata, MN 55391-1693

 

TCF Reports 62nd Consecutive Quarter of Net Income — Earns $36.9 Million, $.26 Per Share

 

THIRD QUARTER HIGHLIGHTS

·                  Diluted earnings per common share of 26 cents

·                  Net income of $36.9 million, up 111.4 percent

·                  Total revenue increased by $22.2 million, or 7.7 percent

·                  Net interest margin of 4.12 percent, up from 3.92 percent

·                  Announced quarterly cash dividend of five cents per common share, payable November 30, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Earnings Summary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 1  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 ($ in thousands, except per-share data)

 

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 

 

 

 

 

  3Q

 

 

 

  2Q

 

 

 

  3Q

 

 

3Q10 vs

 

3Q10 vs

 

 

YTD

 

 

 

YTD

 

 

Percent

 

 

 

2010

 

 

 

2010

 

 

 

2009

 

 

2Q10

 

3Q09

 

 

2010

 

 

 

2009

 

 

Change

 

 Net income

$

36,893

 

 

$

45,025

 

 

$

17,451

 

 

(18.1)

 %

111.4

 %

$

115,839

 

 

$

67,641

 

 

71.3

 %  

 Diluted earnings per
common share
(1)

 

      .26

 

 

 

     .32

 

 

 

     .14

 

 

  (18.8)

 

     85.7

 

 

       .84

 

 

 

      .39

 

 

115.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Financial Ratios (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Return on average assets

 

    .84 %

 

 

 

   1.02 %

 

 

 

   .39 %

 

 

 

 

 

 

 

     .87 %

 

 

 

   .52 %

 

 

 

 

 Return on average
common equity
(1)

 

    9.95

 

 

 

  12.71

 

 

 

  6.03

 

 

 

 

 

 

 

 11.11

 

 

 

  5.73

 

 

 

 

 Net interest margin

 

    4.12

 

 

 

    4.18

 

 

 

  3.92

 

 

 

 

 

 

 

   4.17

 

 

 

  3.80

 

 

 

 

 Net charge-offs as a
percentage of average
loans and leases

 

    1.58

 

 

 

    1.30

 

 

 

   1.52

 

 

 

 

 

 

 

   1.37

 

 

 

  1.33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)  Includes a non-cash deemed preferred stock dividend of $12,025 recorded in the nine months ended September 30, 2009. Excluding this amount, diluted earnings per common share was $.48 and the return on average common equity was 7.13% for the nine months ended September 30, 2009.

(2)  Annualized.

 

 

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2

 

WAYZATA, MN, October 21, 2010 – TCF Financial Corporation (“TCF”) (NYSE: TCB) today reported diluted earnings per common share of 26 cents for the third quarter of 2010, compared with 14 cents in the third quarter of 2009, an increase of 85.7 percent.  Net income for the third quarter of 2010 was $36.9 million, compared with $17.5 million in the third quarter of 2009, an increase of 111.4 percent.

 

Diluted earnings per common share for the first nine months of 2010 was 84 cents, compared with 39 cents for the same 2009 period, an increase of 115.4 percent.  Net income for the first nine months of 2010 was $115.8 million, compared with $67.6 million for the same 2009 period, an increase of 71.3 percent.

 

TCF declared a quarterly cash dividend of five cents per common share payable on November 30, 2010 to stockholders of record at the close of business on October 29, 2010.

 

Chairman’s Statement

 

“TCF’s long-term policy of secured lending to qualified customers, funded by low-cost core deposits, has continued to pay off with TCF reporting its 62nd consecutive profitable quarter,” said William A. Cooper, TCF Chairman and CEO.  “While there are still storm clouds on the horizon with a slow economic recovery and increased regulatory burden, we continue to stay the course that has worked well for us in the past.”

 

Cooper adds, “On October 12, 2010, TCF filed a lawsuit challenging the constitutionality of the Durbin Amendment of the Dodd-Frank financial reform bill, which limits the fees that debit card issuers like TCF may receive for this product.  After lengthy review by TCF and its counsel, we believe the Durbin Amendment is both unconstitutional and unfair.  The amendment mandates a fee charged in the free market that denies TCF and similarly situated banks a reasonable rate of return on investment.  In addition, the amendment affects only one percent of banks in the country, giving unaffected banks—those 99 percent of the nation’s banks—an unfair competitive advantage.  We are confident the courts will find the Durbin Amendment unconstitutional and we will win this case.”

 

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3

 

 Total Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 2  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 ($ in thousands)

 

3Q

 

2Q

 

 

3Q

 

 

3Q10 vs

 

3Q10 vs

 

YTD

 

YTD

 

Percent 

 

 

 

2010

 

2010

 

 

2009

 

 

2Q10  

 

3Q09

 

2010

 

2009

 

Change 

 

 Net interest income

 

$173,755

 

$176,499

 

 

$161,489

 

 

 

(1.6

)%

7.6

 %

 

$524,916

 

$463,365

 

13.3

 %   

 Fees and other revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Fees and service charges

 

67,684

 

77,845

 

 

   77,433

 

 

 

(13.1

)

(12.6

)

 

211,701

 

212,033

 

(.2)

 

 Card revenue

 

27,779

 

28,591

 

 

   26,393

 

 

 

(2.8

)

5.3

 

 

83,442

 

77,957

 

7.0

 

 ATM revenue

 

7,985

 

7,844

 

 

     7,861

 

 

 

1.8

 

1.6

 

 

22,851

 

23,432

 

(2.5)

 

Total banking fees

 

103,448

 

114,280

 

 

 111,687

 

 

 

(9.5

)

(7.4

)

 

317,994

 

313,422

 

1.5

 

 Leasing and equipment finance

 

24,912

 

20,528

 

 

   15,173

 

 

 

21.4

 

64.2

 

 

65,792

 

44,705

 

47.2

 

 Other

 

1,077

 

1,235

 

 

     1,197

 

 

 

(12.8

)

(10.0

)

 

4,767

 

2,475

 

92.6

 

Total fees and other revenue

 

129,437

 

136,043

 

 

 128,057

 

 

 

(4.9

)

1.1

 

 

388,553

 

360,602

 

7.8

 

 Gains (losses) on securities, net

 

8,505

 

(137)

 

 

-

 

 

 

N.M.

 

N.M.

 

 

7,938

 

22,104

 

(64.1)

 

Total non-interest income

 

137,942

 

135,906

 

 

  128,057

 

 

 

1.5

 

7.7

 

 

396,491

 

382,706

 

3.6

 

Total revenue

 

$311,697

 

$312,405

 

 

$289,546

 

 

 

(.2

)

7.7

 

 

$921,407

 

$846,071

 

8.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Net interest margin(1)

 

4.12%

 

4.18%

 

 

3.92%

 

 

 

 

 

 

 

 

4.17

%

3.80%

 

 

 

 Fees and other revenue as a % of total revenue

 

41.53   

 

43.55   

 

 

44.23   

 

 

 

 

 

 

 

 

42.17 

 

42.62   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 N.M. = Not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (1) Annualized.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income

 

·                 Net interest income for the third quarter of 2010 was $173.8 million, up $12.3 million, or 7.6 percent, compared with the third quarter of 2009 and down $2.7 million, or 1.6 percent, compared with the second quarter of 2010.  The increase in net interest income from the third quarter of 2009 was primarily due to decreased rates paid on deposits and growth in loans and leases, partially offset by increased levels of non-accrual and restructured loans and leases. The decrease from the second quarter of 2010 was primarily due to decreased yields on wholesale banking balances, which includes commercial banking, leasing and equipment finance and inventory finance loans and leases, change in the mix of consumer loans with lower yielding variable-rate loans replacing higher-yielding fixed-rate loans, a decrease in the yield of the investment portfolio due to a change in the mix, and a higher average balance of non-accrual loans, partially offset by lower average costs of deposits.

 

·                  Net interest margin in the third quarter of 2010 was 4.12 percent, compared with 3.92 percent in the third quarter of 2009 and 4.18 percent in the second quarter of 2010.  The increase in net interest margin from the third quarter of 2009 was primarily due to lower average rates on deposits, partially offset by lower yields on new loan and lease production and the impact of higher balances of non-accrual loans and leases.  The decrease in net interest margin from the second quarter of 2010 was primarily due to decreased yields on

 

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4

 

wholesale banking balances and variable-rate consumer real estate loans and changes in the earning asset mix, partially offset by lower average rates on deposits.  Since the end of 2009, when TCF’s balance sheet was 6.6 percent liability sensitive, TCF has been repositioning its balance sheet for an eventual increase in interest rates. While this has negatively impacted the net interest margin rate in the short term, the balance sheet has shifted to an asset sensitive position of 2 percent as of September 30, 2010.

 

Non-interest Income

 

·                  Banking fees and service charges in the third quarter of 2010 were $67.7 million, down $9.7 million, or 12.6 percent, from the third quarter of 2009 and down $10.2 million, or 13.1 percent, from the second quarter of 2010.  The decrease from the third quarter of 2009 was primarily due to changes in customer banking and spending behavior resulting in less fee income.  Additionally, the favorable impact of the new monthly maintenance fee income was largely offset by the impact of recent opt-out regulations. The decrease from the second quarter of 2010 was primarily due to implementation of the new Federal Reserve rule and a decrease in monthly service charges.

 

·                  Card revenues in the third quarter of 2010 were $27.8 million, up $1.4 million, or 5.3 percent, from the third quarter of 2009 and down $812 thousand, or 2.8 percent from the second quarter of 2010. The increase from the third quarter of 2009 was primarily the result of an increase in average spending per active account and a small increase in interchange rates, partially offset by a decrease in active accounts. The decrease from the second quarter of 2010 was due mainly to a decrease in active accounts, partially offset by an increase in average spending per active account and a small increase in interchange rates.

 

·                  Leasing and equipment finance revenues in the third quarter of 2010 were $24.9 million, up $9.7 million, or 64.2 percent, from the third quarter of 2009 and up $4.4 million, or 21.4 percent, from the second quarter of 2010. The increase from the third quarter of 2009 was primarily due to increased operating lease revenue which was partially offset by an increase in operating lease depreciation. These increases in operating leases were primarily due to the full quarter impact of the acquisition of Fidelity National Capital, Inc., which occurred during the third quarter of 2009. The increase in leasing revenues from the second quarter of 2010 was primarily due to increased sales-type lease activity which is based on customer-driven factors not within TCF’s control.

 

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5

 

Loans and Leases

 

Average Loans and Leases

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 3  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

($ in thousands)

 

3Q
2010

 

2Q
2010

 

3Q
2009

 

3Q10 vs
2Q10

 

3Q10 vs
3Q09

 

YTD
2010

 

YTD
2009

 

Percent
Change

 

 Consumer real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First mortgage lien

 

$ 4,935,583

 

$ 4,930,801

 

$ 4,939,529

 

.1

 %

(.1

)%

$ 4,937,578

 

$ 4,924,902

 

.3

 %  

Junior lien

 

2,297,433

 

2,303,400

 

2,329,096

 

(.3

)

(1.4

)

2,304,335

 

2,361,140

 

(2.4

)

Total

 

7,233,016

 

7,234,201

 

7,268,625

 

-

 

(.5

)

7,241,913

 

7,286,042

 

(.6

)

 Consumer other

 

25,130

 

27,584

 

35,015

 

(8.9

)

(28.2

)

27,687

 

36,920

 

(25.0

)

Total consumer

 

7,258,146

 

7,261,785

 

7,303,640

 

(.1

)

(.6

)

7,269,600

 

7,322,962

 

(.7

)

 Commercial real estate

 

3,327,417

 

3,322,986

 

3,193,686

 

.1

 

4.2

 

3,307,932

 

3,101,459

 

6.7

 

 Commercial business

 

346,431

 

398,829

 

477,041

 

(13.1

)

(27.4

)

391,263

 

486,680

 

(19.6

)

Total commercial

 

3,673,848

 

3,721,815

 

3,670,727

 

(1.3

)

.1

 

3,699,195

 

3,588,139

 

3.1

 

 Leasing and equipment finance

 

3,002,714

 

3,021,532

 

2,811,165

 

(.6

)

6.8

 

3,022,487

 

2,751,935

 

9.8

 

 Inventory finance

 

655,485

 

692,816

 

185,914

 

(5.4

)

N.M.

 

634,182

 

111,479

 

N.M.

 

Total

 

$14,590,193

 

$14,697,948

 

$13,971,446

 

(.7

)

4.4

 

$14,625,464

 

$13,774,515

 

6.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 N.M. = Not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·                  Average consumer real estate loan balances decreased $35.6 million, or .5 percent, from the third quarter of 2009 and were essentially flat with the second quarter of 2010.  The decrease from the third quarter of 2009 reflects less consumer demand for financing due in part to declines in home values and reductions in spending in the continued weakened economy and a decrease in the average loan balances in Michigan of $88.7 million.

 

·                  Variable-rate consumer real estate loans increased $339.2 million from September 30, 2009 and $131.8 million from June 30, 2010, while fixed-rate consumer real estate loans decreased $374.8 million from September 30, 2009 and $133 million from June 30, 2010. Variable-rate loans comprised 31.6 percent of total consumer real estate loans at September 30, 2010, up from 26 percent at September 30, 2009 and 29.8 percent at June 30, 2010.

 

·                  TCF is in a first lien position on 74 percent of its consumer real estate loan portfolio as of September 30, 2010.

 

·                  Average commercial loan balances increased $3.1 million, or .1 percent, from the third quarter of 2009 and decreased $48 million, or 1.3 percent, from the second quarter of 2010. The decrease from the second quarter of 2010 is due mainly to a decrease in average loan balances in Michigan of $14.5 million and a decrease in loan production caused by the continued weakened economy.

 

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6

 

·                  Average leasing and equipment finance balances increased $191.5 million, or 6.8 percent, from the third quarter of 2009 and were essentially flat with the second quarter of 2010.  TCF’s acquisition of Fidelity National Capital, Inc., which occurred in the third quarter of 2009, contributed $205.2 million to the increase in year-over-year average balances. TCF Equipment Finance completed a portfolio acquisition of $186.8 million of middle market leases towards the end of the third quarter of 2010 which will increase average leasing and equipment finance balances in the fourth quarter of 2010.

 

·                  Average inventory finance loans increased $469.6 million from the third quarter of 2009 and decreased $37.3 million, or 5.4 percent, from the second quarter of 2010.  The increase from the third quarter of 2009 was primarily due to the impact of lawn and garden programs added in the fourth quarter of 2009 and TCF’s entrance into the power sports industry in the third quarter of 2010. The decrease from the second quarter of 2010 was primarily due to a seasonal decline in receivables in the lawn and garden programs, partially offset by the impact of power sports programs added in the third quarter of 2010. TCF Inventory Finance entered into an agreement with Arctic Cat Sales Inc. in the third quarter of 2010 which led to the acquisition of $125.8 million in loans towards the end of the third quarter of 2010.  This acquisition will increase average inventory finance balances in the fourth quarter of 2010.

 

 Securities Available for Sale

 

 Average Securities Available for Sale

 

 

Table 4

 

 

 

 

 

 

 

 

 

 

Yield

 

 

 

 

 

 

Yield

 

 ($ in thousands)

 

3Q

 

2Q

 

3Q

 

 

 

 

YTD

 

YTD

 

 

YTD

 

YTD

 

 

 

2010

 

2010

 

2009

 

 

3Q10

 

3Q09

 

2010

 

2009

 

 

2010

 

2009

 

 U.S. Government sponsored entities:

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

 

  

 

    

Mortgage-backed securities

 

$1,796,348

 

$1,860,233

 

$1,432,670

 

 

4.43

%

4.80

%

$1,846,895

 

$1,695,377

 

 

4.50

%

4.97

%

Debentures

 

-

 

-

 

600,098

 

 

-

 

2.19

 

-

 

381,022

 

 

-

 

2.16

 

 U.S. Treasury Bills

 

69,705

 

14,167

 

-

 

 

.13

 

-

 

28,212

 

-

 

 

.14

 

-

 

 Other securities

 

3,473

 

4,358

 

489

 

 

.57

 

4.91

 

4,306

 

497

 

 

.50

 

5.37

 

Total

 

$1,869,526

 

$1,878,758

 

$2,033,257

 

 

4.26

 

4.03

 

$1,879,413

 

$2,076,896

 

 

4.43

 

4.45

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·                  At September 30, 2010, the unrealized gains in the available for sale security portfolio were $63.5 million.

 

·                  During the third quarter of 2010, $275.1 million of available for sale securities were sold and a $9.6 million gain was recognized. In addition, an impairment charge of $1 million was recorded on other securities.

 

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7

 

 Deposits

 

 Average Deposits

 

Table 5

 

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 ($ in thousands)

 

3Q

 

2Q

 

3Q

 

3Q10 vs

 

3Q10 vs

 

YTD

 

YTD

 

Percent

 

 

 

2010

 

2010

 

2009

 

2Q10

 

3Q09

 

2010

 

2009

 

Change

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

    

 Checking

 

$ 4,341,803

 

$ 4,529,356

 

$ 4,031,486

 

(4.1

)%

7.7

%

$ 4,425,754

 

$ 4,012,917

 

 

10.3

%

 Savings

 

5,446,852

 

5,494,723

 

5,089,783

 

(.9

)

7.0

 

5,435,254

 

4,586,213

 

 

18.5

 

 Money market

 

654,030

 

660,654

 

723,098

 

 

(1.0

)

(9.6

)

661,035

 

686,830

 

 

(3.8

)

Subtotal

 

10,442,685

 

10,684,733

 

9,844,367

 

 

(2.3

)

6.1

 

10,522,043

 

9,285,960

 

 

13.3

 

 Certificates

 

1,006,685

 

1,044,008

 

1,757,884

 

 

(3.6

)

(42.7

)

1,058,840

 

2,100,342

 

 

(49.6

)

Total deposits

 

$11,449,370

 

$11,728,741

 

$11,602,251

 

 

(2.4

)

(1.3

)

$11,580,883

 

$11,386,302

 

 

1.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Average interest rate on deposits

 

.48%

 

.56%

 

.94%

 

 

 

 

 

 

.55%

 

1.19%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·                  Total average deposits in the third quarter of 2010 were $11.4 billion, down $152.9 million, or 1.3 percent, from the third quarter of 2009 and down $279.4 million, or 2.4 percent, from the second quarter of 2010.  The decrease from the third quarter of 2009 was primarily due to a $751.2 million decline in average certificates of deposits resulting from pricing strategies to reduce higher cost funds, partially offset by a $667.4 million growth in average checking and savings balances. The decrease from the second quarter of 2010 reflects our current deposit gathering strategies and related pricing and marketing efforts in light of the recent decrease in total assets.

 

·                  The average interest cost of deposits in the third quarter of 2010 was .48 percent, down 46 basis points from the third quarter of 2009 and down 8 basis points from the second quarter of 2010.  The average interest cost of deposits declined for both periods due to pricing strategies on certain deposit products and mix changes.  The weighted average interest cost of deposits on September 30, 2010 was .48 percent, compared with .55 percent on June 30, 2010.

 

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8

 

 Non-interest Expense

 

 Non-interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 6   

 

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 

 ($ in thousands)

 

3Q

 

2Q

 

3Q

 

 

3Q10 vs

 

3Q10 vs

 

YTD

 

YTD

 

 

Percent

 

 

  

2010

  

2010

  

2009

  

 

2Q10

  

3Q09

  

2010

  

2009

  

 

Change

      

 Compensation and
employee benefits

  

$ 90,282

  

$ 86,983

  

$ 90,680

  

 

3.8

%

(.4

)%

$265,490

 

$267,622

 

 

(.8

)%  

 Occupancy and equipment

 

32,091

 

31,311

 

31,619

 

 

2.5

 

1.5

 

95,583

 

95,193

 

 

.4

 

 FDIC premiums

 

5,486

 

5,219

 

5,085

 

 

5.1

 

7.9

 

16,186

 

13,821

 

 

17.1

 

 Advertising and marketing

 

3,354

 

3,734

 

4,766

 

 

(10.2

)

(29.6

)

9,908

 

13,345

 

 

(25.8

)

 Deposit account premiums

 

3,340

 

5,478

 

7,472

 

 

(39.0

)

(55.3

)

15,616

 

21,335

 

 

(26.8

)

 Other

 

39,481

 

35,053

 

34,736

 

 

12.6

 

13.7

 

108,944

 

102,625

 

 

6.2

 

Core operating expenses

 

174,034

 

167,778

 

174,358

 

 

3.7

 

(.2

)

511,727

 

513,941

 

 

(.4

)

 Operating lease depreciation

 

8,965

 

9,812

 

3,734

 

 

(8.6

)

140.1

 

28,817

 

11,618

 

 

148.0

 

 Foreclosed real estate and repossessed assets, net

 

9,588

 

8,756

 

8,461

 

 

9.5

 

13.3

 

27,604

 

19,349

 

 

42.7

 

 Other credit costs, net

 

(834

)

2,723

 

3,714

 

 

N.M.

 

N.M.

 

4,476

 

7,751

 

 

(42.3

)

 FDIC special assessment

 

-

 

-

 

-

 

 

-

 

-

 

-

 

8,362

 

 

(100.0

)

Total non-interest expense

 

$191,753

 

$189,069

 

$190,267

 

 

1.4

 

.8

 

$572,624

 

$561,021

 

 

2.1

 

 N.M. = Not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·                  Core operating expenses were flat with the third quarter of 2009 and increased $6.3 million, or 3.7 percent, from the second quarter of 2010. The increase from the second quarter of 2010 was primarily attributable to increased compensation and employee benefits and increased regulatory, legal and compliance-related costs.

 

·                  Compensation and employee benefits costs were $90.3 million for the third quarter of 2010, essentially flat with the third quarter of 2009 and up $3.3 million, or 3.8 percent, from the second quarter of 2010. Compensation and benefits expenses were flat from the third quarter of 2009 primarily due to headcount reductions in Branch Banking and decreased employee medical plan expenses, offset by increased costs in the Specialty Finance businesses as a result of expansion and growth.  The increase from the second quarter of 2010 was primarily due to an increase in medical plan expenses.

 

·                  Deposit account premiums were $3.3 million for the third quarter of 2010, down $4.1 million, or 55.3 percent, from the third quarter of 2009 and down $2.1 million, or 39 percent, from the second quarter of 2010.  The decreases in deposit account premiums were due to revised marketing strategies and lower checking account production.

 

·                  Other non-interest expense was $39.5 million for the third quarter of 2010, up $4.7 million, or 13.7 percent, from the third quarter of 2009 and up $4.4 million, or 12.6 percent, from the second quarter of 2010. The increases were primarily attributable to increased consulting costs related to the administration of the company’s Bank

 

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9

 

Secrecy Act program and, to a lesser extent, other legal costs including the challenge of the Durbin Amendment of the Dodd-Frank Act.

 

·                  Foreclosed real estate and repossessed asset expenses were $9.6 million for the third quarter of 2010, up $1.1 million, or 13.3 percent, from the third quarter of 2009 and up $832 thousand, or 9.5 percent, from the second quarter of 2010.  The increases were primarily due to an increase in the number of consumer real estate properties owned and the associated expenses.

 

·                  Other credit costs, net provided a benefit of $834 thousand during the third quarter of 2010, compared with net expenses of $3.7 million during the third quarter of 2009 and $2.7 million during the second quarter of 2010. The current quarter’s benefit was primarily attributable to a decrease in reserves on commercial letters of credit due to the elimination of an exposure on an impaired loan in Michigan and lower premium costs related to consumer real estate loan pool insurance.

 

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10

 

 Credit Quality

 

 Credit Quality Summary

 

Table 7

 

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 ($ in thousands)

   

3Q
2010

   

2Q
2010

   

3Q
2009

   

3Q10 vs
2Q10

   

3Q10 vs
3Q09

   

YTD
2010

   

YTD
2009

   

Percent
Change

    

 Allowance for Loan and Lease Losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Balance at beginning of period

 

$251,643

 

$250,430

 

$193,445

 

.5

%

30.1

%

$244,471

 

$172,442

 

41.8

Charge-offs

 

(62,945

)

(53,654

)

(57,214

)

17.3

 

10.0

 

(167,150

)

(149,557

)

11.8

 

Recoveries

 

5,135

 

5,854

 

3,957

 

 

(12.3

)

29.8

 

17,008

 

11,700

 

 

45.4

 

Net charge-offs

 

(57,810

)

(47,800

)

(53,257

)

 

20.9

 

8.5

 

(150,142

)

(137,857

)

 

8.9

 

Provision for credit losses

 

59,287

 

49,013

 

75,544

 

 

21.0

 

(21.5

)

158,791

 

181,147

 

 

(12.3

 Balance at end of period

 

$253,120

 

$251,643

 

$215,732

 

 

.6

 

17.3

 

$253,120

 

$215,732

 

 

17.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Allowance as a percentage of period end loans and leases

 

1.70

%

1.72

%

1.51

%

 

 

 

 

1.70

%

1.51

%

 

 

 Ratio of allowance to net
charge-offs
(1)

 

1.1

X

1.3

X

1.0

X

 

 

 

 

1.3

X

1.2

X

 

 

 Net charge-offs as a percentage of average loans and leases(1)

 

1.58

%

1.30

%

1.52

%

 

 

 

 

1.37

%

1.33

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Credit Loss Reserves

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Allowance for loan and lease losses

 

$253,120

 

$251,643

 

$215,732

 

.6

 

17.3

 

 

 

 

 

 

 

 Reserves for unfunded commitments

 

2,696

 

4,581

 

2,871

 

 

(41.1

)

(6.1

)

 

 

 

 

 

 

Total credit loss reserves

 

$255,816

 

$256,224

 

$218,603

 

 

(.2

)

17.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Non-accrual loans and leases

 

$369,812

 

$330,182

 

$268,834

 

 

12.0

 

37.6

 

 

 

 

 

 

 

 Real estate owned

 

136,144

 

117,931

 

94,167

 

 

15.4

 

44.6

 

 

 

 

 

 

 

Total non-performing assets

 

$505,956

 

$448,113

 

$363,001

 

 

12.9

 

39.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Non-performing assets as a percentage of loans and leases and real estate owned

 

3.37

%

3.04

%

2.52%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Restructured Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Accruing:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer real estate

 

$315,588

 

$297,083

 

$159,881

 

 

6.2

 

97.4

 

 

 

 

 

 

 

Commercial real estate

 

5,468

 

-

 

-

 

 

N.M.

 

N.M.

 

 

 

 

 

 

 

 Non-accruing:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer real estate

 

25,489

 

21,570

 

14,227

 

 

18.2

 

79.2

 

 

 

 

 

 

 

Commercial real estate

 

9,339

 

10,620

 

10,523

 

 

(12.1

)

(11.3

)

 

 

 

 

 

 

Total restructured loans

 

$355,884

 

$329,273

 

$184,631

 

 

8.1

 

92.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 N.M. = Not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (1) Annualized.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At September 30, 2010:

 

·                  Allowance for loan and lease losses was $253.1 million, or 1.70 percent of loans and leases, compared with $215.7 million, or 1.51 percent, at September 30, 2009 and $251.6 million, or 1.72 percent, at June 30, 2010.

 

·                  Over 60-day delinquency rate was .78 percent, down from .81 percent at September 30, 2009 and down from .87 percent at June 30, 2010. The decrease from the third quarter of 2009 was primarily due to decreases in specialty finance loan delinquencies, partially offset by increases in consumer real estate loan

 

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11

 

delinquencies.  The decrease from the second quarter of 2010 was primarily due to decreases in commercial real estate and leasing and equipment finance loan delinquencies.

 

·                  Non-accrual loans and leases increased $101 million, or 37.6 percent, from September 30, 2009 and $39.6 million, or 12 percent, from June 30, 2010 primarily due to increases in non-accrual commercial and consumer real estate loans.

 

·                  Total accruing restructured consumer real estate loans were $315.6 million, up $18.5 million, or 6.2 percent, from June 30, 2010. The allowance for loan losses on accruing restructured consumer real estate loans was $34 million, or 10.8 percent of the outstanding balance, at September 30, 2010.  The over 60-day delinquency rate on these loans was 5.5 percent at September 30, 2010.

 

“Many large banks with large residential mortgage outstandings and servicing portfolios have announced foreclosure moratoriums due to process and documentation issues,” said William A. Cooper.  “TCF does not have these issues and continues to process foreclosures in an orderly manner.”

 

For the quarter ended September 30, 2010:

 

·                  Provision for credit losses was $59.3 million, down from $75.5 million in the third quarter of 2009 and up from $49 million recorded in the second quarter of 2010. The decrease from the third quarter of 2009 was primarily due to a lower level of increase in restructured consumer real estate loans and lower levels of provision in excess of net charge-offs in the consumer real estate portfolio as the rate of increase in losses slowed. The increase from the second quarter of 2010 was primarily due to reserve rate increases in the consumer real estate portfolio and increases in consumer and commercial real estate loan charge-offs.

 

·                  Net loan and lease charge-offs were $57.8 million, or 1.58 percent annualized, of average loans and leases, up from $53.3 million, or 1.52 percent annualized, of average loans and leases in the third quarter of 2009 and up from $47.8 million, or 1.30 percent annualized, of average loans and leases in the second quarter of 2010. Increases over the third quarter of 2009 were primarily due to increases in consumer real estate and commercial real estate net charge-offs, partially offset by decreases in commercial business net charge-offs.  The increase from the second quarter of 2010 was primarily the result of increases in consumer real estate

 

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12

 

and commercial real estate net charge-offs, both primarily in Illinois. Leasing and equipment finance net charge-offs were $8.7 million, or 1.16 percent annualized, of average loans and leases, up from $7.5 million, or .99 percent annualized, of average loans and leases in the second quarter of 2010, primarily due to charge-offs of previously reserved non-accrual loans and leases, which resulted in a significant decrease in the non-accrual balances in the leasing and equipment finance portfolio.

 

Income Taxes

 

·                  Income tax expense was $22.9 million for the third quarter of 2010, or 37.7 percent of pre-tax income, compared with $6.5 million, or 27.4 percent of pre-tax income, for the comparable 2009 period and $28.1 million, or 37.8 percent of pre-tax income, for the second quarter of 2010. The third quarter of 2009 income tax expense included a $3 million decrease in income tax expense related to favorable developments in uncertain tax positions, partially offset by a slight increase in the annual effective income tax rate. Excluding these items, the effective income tax rate for the third quarter of 2009 was 38.8 percent.

 

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13

 

 Capital and Liquidity

 

 Capital Information

 

 

 

Table 8

 

 At period end

 

 

 

 

 

 ($ in thousands, except per-share data)

    

3Q
2010

    

4Q
2009

    

 Total equity

 

$1,505,962

 

 

 

$1,179,755

 

 

 

 Total equity to total assets

 

8.22

 %

 

 

6.60

 %

 

 

 Book value per common share

 

$       10.49

 

 

 

$         9.10

 

 

 

 Tangible realized common equity to tangible assets(1)

 

7.27

 %

 

 

5.86

 %

 

 

 

 

 

 

 

 

 

 

 

 

 Risk-based capital

 

 

 

 

 

 

 

 

 

Tier 1

 

$1,447,070

 

    10.35 %

 

$1,161,750

 

      8.52 %

 

Total

 

1,780,484

 

12.73

 

1,514,940

 

11.12

 

Excess over stated “10% well-capitalized” requirement

 

382,066

 

  2.73

 

152,153

 

  1.12

 

 

 

 

 

 

 

 

 

 

 

Tier 1 common capital(2)

 

$1,322,063

 

  9.45

 

$1,042,357

 

  7.65

 

 

 

 

 

 

 

 

 

 

 

 (1) Excludes the impact of goodwill, other intangibles and accumulated other comprehensive income (loss) (see “Reconciliation of  GAAP to Non-GAAP Measures” table).

 

 (2) Excludes the effect of qualifying trust preferred securities and qualifying non-controlling interest in subsidiaries (see “Reconciliation of GAAP to Non-GAAP Measures” table).

 

 

 

 

·                  Total risk-based capital at September 30, 2010 of $1.8 billion, or 12.73 percent of risk-weighted assets, was $382.1 million in excess of the stated “10 percent well-capitalized” requirement.

 

·                  On October 18, 2010, the Board of Directors of TCF declared a regular quarterly cash dividend of five cents per common share payable on November 30, 2010 to stockholders of record at the close of business on October 29, 2010.

 

·                  At September 30, 2010, TCF had $2 billion in unused, secured borrowing capacity at the FHLB of Des Moines and $529 million in unused, secured borrowing capacity at the Federal Reserve Discount Window.

 

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14

 

Website Information

 

A live webcast of TCF’s conference call to discuss third quarter earnings will be hosted at TCF’s website, http://ir.tcfbank.com, on October 21, 2010 at 10:00 a.m., CT.  Additionally, the webcast is available for replay at TCF’s website after the conference call. The website also includes free access to company news releases, TCF’s annual report, quarterly reports, investor presentations and SEC filings.

 

 

TCF is a Wayzata, Minnesota-based national bank holding company with $18.3 billion in total assets. TCF has 440 banking offices in Minnesota, Illinois, Michigan, Colorado, Wisconsin, Indiana, Arizona and South Dakota, providing retail and commercial banking services. TCF also conducts commercial leasing and equipment finance business in all 50 states and commercial inventory finance business in the U.S. and Canada. For more information about TCF, please visit www.tcfbank.com.

 

 

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15

 

Forward-Looking Information

 

This earnings release and other reports issued by the Company, including reports filed with the SEC, may contain “forward-looking” statements that deal with future results, plans or performance. In addition, TCF’s management may make such statements orally to the media, or to securities analysts, investors or others. Forward-looking statements deal with matters that do not relate strictly to historical facts. TCF’s future results may differ materially from historical performance and forward-looking statements about TCF’s expected financial results or other plans and are subject to a number of risks and uncertainties. These include, but are not limited to the following:

 

Adverse Economic or Business Conditions, Credit Risks.  Continued or deepening deterioration in general economic and banking industry conditions, or continued increases in unemployment in TCF’s primary banking markets; adverse economic, business and competitive developments such as shrinking interest margins, deposit outflows, deposit account attrition, or an inability to increase the number of deposit accounts; adverse changes in credit and other risks posed by TCF’s loan, lease, investment, and securities available for sale portfolios, including continuing declines in commercial or residential real estate values or changes in the allowance for loan and lease losses dictated by new market conditions or regulatory requirements; interest rate risks resulting from fluctuations in prevailing interest rates or other factors that result in a mismatch between yields earned on TCF’s interest-earning assets and the rates paid on its deposits and borrowings.

 

Earnings/Capital Constraints, Liquidity Risks.  Limitations on TCF’s ability to pay dividends or to increase dividends in the future because of financial performance deterioration, regulatory restrictions or limitations; increased deposit insurance premiums, special assessments or other costs related to deteriorating conditions in the banking industry,  the economic impact on banks of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Act”) and Emergency Economic Stabilization Act of 2008, as amended (“EESA”), and other regulatory reform legislation; the impact of financial regulatory reform, including the phase out of trust preferred securities in Tier 1 capital called for by the Act, or additional capital, leverage, liquidity and risk management requirements or changes in the composition of qualifying regulatory capital; adverse changes in securities markets directly or indirectly affecting TCF’s ability to sell assets or to fund its operations; diminished unsecured borrowing capacity resulting from TCF credit rating downgrades and unfavorable conditions in the credit markets that restrict or limit various funding sources; costs associated with new regulatory requirements or interpretive guidance relating to liquidity.

 

Legislative and Regulatory Requirements.  New consumer protection and supervisory requirements, including the Act’s creation of a new consumer protection bureau and limits on Federal preemption for state laws that could be applied to national banks; the imposition of requirements with an adverse impact relating to TCF’s lending, loan collection and other business activities as a result of the EESA and the Act, or other legislative or regulatory developments such as mortgage foreclosure moratorium laws or imposition of underwriting or other limitations that impact the ability to use certain variable-rate products; reduction of interchange revenue from debit card transactions resulting from the so-called Durbin Amendment (the “Amendment”) to the Act, which limits debit card interchange fees to amounts that will only allow issuers to recover incremental costs of authorization, clearance and settlement of debit card transactions, plus possibly some costs relating to fraud prevention; impact of legislative, regulatory or other changes affecting customer account charges and fee income; changes to bankruptcy laws which would result in the loss of all or part of TCF’s security interest due to collateral value declines (so-called “cramdown” provisions); any material failure of TCF to comply with the terms of its Consent Order with the Office of the Comptroller of the Currency relating to TCF’s Bank Secrecy Act compliance, which may result in regulatory enforcement action including monetary penalties; increased health care costs resulting from recently enacted Federal health care reform legislation; adverse regulatory examinations and resulting enforcement actions or other adverse consequences such as increased capital requirements or higher deposit insurance assessments; heightened regulatory practices, requirements or expectations, including, but not limited to, requirements related to the Bank Secrecy Act and anti-money laundering compliance activity.

 

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16

 

Risks Relating to New Product Introduction.  TCF has introduced a new anchor retail deposit account product that replaces TCF Totally Free Checking, and that calls for a monthly maintenance fee on accounts not meeting certain specific requirements. TCF has also implemented new regulatory requirements that prohibit financial institutions from charging NSF fees on point-of-sale and ATM transactions unless customers opt-in.  Customer acceptance of the new product changes and regulatory requirements cannot be predicted with certainty, and these changes may have an adverse impact on TCF’s ability to generate and retain accounts and on its fee revenue.

 

Litigation Risks.  Results of litigation, including class action litigation concerning TCF’s lending or deposit activities including account servicing processes or fees or charges, or employment practices, and possible increases in indemnification obligations for certain litigation against Visa U.S.A. (“covered litigation”) and potential reductions in card revenues resulting from covered litigation or other litigation against Visa.

 

Competitive Conditions; Supermarket Branching Risk.  Reduced demand for financial services and loan and lease products; adverse developments affecting TCF’s supermarket banking relationships or any of the supermarket chains in which TCF maintains supermarket branches.

 

Accounting, Audit, Tax and Insurance Matters.  Changes in accounting standards or interpretations of existing standards; monetary, fiscal or tax policies of the federal or state governments, including adoption of state legislation that would increase state taxes; adverse state or Federal tax assessments or findings in tax audits; lack of or inadequate insurance coverage for claims against TCF.

 

Technological and Operational Matters.  Technological, computer-related or operational difficulties or loss or theft of information and the possibility that deposit account losses (fraudulent checks, etc.) may increase.

 

Investors should consult TCF’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K for additional important information about the Company.

 

-more-


 

17

 

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per-share data)

(Unaudited)

 

 

 

Three Months Ended

 

 

 

 

 

September 30,

 

Change

 

 

 

2010

 

2009

 

$

 

%

 

Interest income:

 

 

 

 

 

 

 

 

 

Loans and leases

 

$

219,974

 

$

217,307

 

$

2,667

 

1.2

%

Securities available for sale

 

19,901

 

20,474

 

(573)

 

(2.8)

 

Investments and other

 

1,232

 

1,217

 

15

 

1.2

 

Total interest income

 

241,107

 

238,998

 

2,109

 

.9

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

 

13,974

 

27,512

 

(13,538)

 

(49.2)

 

Borrowings

 

53,378

 

49,997

 

3,381

 

6.8

 

Total interest expense

 

67,352

 

77,509

 

(10,157)

 

(13.1)

 

Net interest income

 

173,755

 

161,489

 

12,266

 

7.6

 

Provision for credit losses

 

59,287

 

75,544

 

(16,257)

 

(21.5)

 

Net interest income after provision for
credit losses

 

114,468

 

85,945

 

28,523

 

33.2

 

Non-interest income:

 

 

 

 

 

 

 

 

 

Fees and service charges

 

67,684

 

77,433

 

(9,749)

 

(12.6)

 

Card revenue

 

27,779

 

26,393

 

1,386

 

5.3

 

ATM revenue

 

7,985

 

7,861

 

124

 

1.6

 

Subtotal

 

103,448

 

111,687

 

(8,239)

 

(7.4)

 

Leasing and equipment finance

 

24,912

 

15,173

 

9,739

 

64.2

 

Other

 

1,077

 

1,197

 

(120)

 

(10.0)

 

Fees and other revenue

 

129,437

 

128,057

 

1,380

 

1.1

 

Gains on securities, net

 

8,505

 

-

 

8,505

 

N.M.

 

Total non-interest income

 

137,942

 

128,057

 

9,885

 

7.7

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

90,282

 

90,680

 

(398)

 

(.4)

 

Occupancy and equipment

 

32,091

 

31,619

 

472

 

1.5

 

FDIC premiums

 

5,486

 

5,085

 

401

 

7.9

 

Advertising and marketing

 

3,354

 

4,766

 

(1,412)

 

(29.6)

 

Deposit account premiums

 

3,340

 

7,472

 

(4,132)

 

(55.3)

 

Other

 

39,481

 

34,736

 

4,745

 

13.7

 

Subtotal

 

174,034

 

174,358

 

(324)

 

(.2)

 

Operating lease depreciation

 

8,965

 

3,734

 

5,231

 

140.1

 

Foreclosed real estate and repossessed assets, net

 

9,588

 

8,461

 

1,127

 

13.3

 

Other credit costs, net

 

(834)

 

3,714

 

(4,548)

 

(122.5)

 

Total non-interest expense

 

191,753

 

190,267

 

1,486

 

.8

 

Income before income tax expense

 

60,657

 

23,735

 

36,922

 

155.6

 

Income tax expense

 

22,852

 

6,491

 

16,361

 

N.M.

 

Income after income tax expense

 

37,805

 

17,244

 

20,561

 

119.2

 

Income (loss) attributable to non-controlling interest

 

912

 

(207)

 

1,119

 

N.M.

 

Net income available to common stockholders

 

$

36,893

 

$

17,451

 

$

19,442

 

111.4

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

.26

 

$

.14

 

$

.12

 

85.7

 

Diluted

 

.26

 

.14

 

.12

 

85.7

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

$

.05

 

$

.05

 

$

-

 

-

 

 

 

 

 

 

 

 

 

 

 

Average common and common equivalent
shares outstanding (in thousands):

 

 

 

 

 

 

 

 

 

Basic

 

140,684

 

126,811

 

13,873

 

10.9

 

Diluted

 

140,922

 

126,833

 

14,089

 

11.1

 

 

N.M.  Not meaningful.

 

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18

 

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per-share data)

(Unaudited)

 

 

 

Nine Months Ended

 

 

 

 

 

 

 

September 30,

 

Change

 

 

 

2010

 

2009

 

$

 

%

 

Interest income:

 

 

 

 

 

 

 

 

 

Loans and leases

 

$

663,151

 

$

642,084

 

$

21,067

 

3.3

%

Securities available for sale

 

62,373

 

69,392

 

(7,019)

 

(10.1)

 

Investments and other

 

3,609

 

3,210

 

399

 

12.4

 

Total interest income

 

729,133

 

714,686

 

14,447

 

2.0

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

 

47,859

 

100,941

 

(53,082)

 

(52.6)

 

Borrowings

 

156,358

 

150,380

 

5,978

 

4.0

 

Total interest expense

 

204,217

 

251,321

 

(47,104)

 

(18.7)

 

Net interest income

 

524,916

 

463,365

 

61,551

 

13.3

 

Provision for credit losses

 

158,791

 

181,147

 

(22,356)

 

(12.3)

 

Net interest income after provision for
credit losses

 

366,125

 

282,218

 

83,907

 

29.7

 

Non-interest income:

 

 

 

 

 

 

 

 

 

Fees and service charges

 

211,701

 

212,033

 

(332)

 

(.2)

 

Card revenue

 

83,442

 

77,957

 

5,485

 

7.0

 

ATM revenue

 

22,851

 

23,432

 

(581)

 

(2.5)

 

Subtotal

 

317,994

 

313,422

 

4,572

 

1.5

 

Leasing and equipment finance

 

65,792

 

44,705

 

21,087

 

47.2

 

Other

 

4,767

 

2,475

 

2,292

 

92.6

 

Fees and other revenue

 

388,553

 

360,602

 

27,951

 

7.8

 

Gains on securities, net

 

7,938

 

22,104

 

(14,166)

 

(64.1)

 

Total non-interest income

 

396,491

 

382,706

 

13,785

 

3.6

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

265,490

 

267,622

 

(2,132)

 

(.8)

 

Occupancy and equipment

 

95,583

 

95,193

 

390

 

.4

 

FDIC premiums

 

16,186

 

13,821

 

2,365

 

17.1

 

Advertising and marketing

 

9,908

 

13,345

 

(3,437)

 

(25.8)

 

Deposit account premiums

 

15,616

 

21,335

 

(5,719)

 

(26.8)

 

Other

 

108,944

 

102,625

 

6,319

 

6.2

 

Subtotal

 

511,727

 

513,941

 

(2,214)

 

(.4)

 

Operating lease depreciation

 

28,817

 

11,618

 

17,199

 

148.0

 

Foreclosed real estate and repossessed assets, net

 

27,604

 

19,349

 

8,255

 

42.7

 

Other credit costs, net

 

4,476

 

7,751

 

(3,275)

 

(42.3)

 

FDIC special assessment

 

-

 

8,362

 

(8,362)

 

(100.0)

 

Total non-interest expense

 

572,624

 

561,021

 

11,603

 

2.1

 

Income before income tax expense

 

189,992

 

103,903

 

86,089

 

82.9

 

Income tax expense

 

71,754

 

36,469

 

35,285

 

96.8

 

Income after income tax expense

 

118,238

 

67,434

 

50,804

 

75.3

 

Income (loss) attributable to non-controlling interest

 

2,399

 

(207)

 

2,606

 

N.M.

 

Net income

 

115,839

 

67,641

 

48,198