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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): April 22, 2011

 


 

 

TCF FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

 


 

Delaware

 

001-10253

 

41-1591444

(State of other jurisdiction of incorporation)

 

(Commission File Number)

 

(IRS Employer Identification No.)

 

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

(Address of principal executive offices) (Zip Code)

 

(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.

 

Information is being furnished herein in Exhibit 99.1 with respect to presentations to investors and others that may be made by executive officers of TCF Financial Corporation (the “Company”).  This information includes selected financial and operational information through the first quarter of 2011 and does not represent a complete set of financial statements and related notes prepared in conformity with generally accepted accounting principles (“GAAP”).  Most, but not all, of the selected financial information furnished herein is derived from the Company’s consolidated financial statements and related notes prepared in accordance with GAAP and management’s discussion and analysis included in the Company’s reports on Forms 10-K and 10-Q.  The Company’s annual financial statements are subject to independent audit.  These materials replace and supersede investor presentation materials previously furnished as an exhibit to Current Reports on Form 8-K.  These materials are dated April 22, 2011, and TCF does not undertake to update the materials after that date.

 

The presentation is also available on the Investor Relations section of 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.

 

Information contained herein, including Exhibit 99.1, shall not be deemed filed for the purposes 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 shall be expressly set forth by specific reference in such a filing.

 

Item 7.01  Regulation FD Disclosure.

 

Information is being furnished herein in Exhibit 99.1 with respect to presentations to investors and others that may be made by executive officers of TCF Financial Corporation (the “Company”).  This information includes selected financial and operational information through the first quarter of 2011 and does not represent a complete set of financial statements and related notes prepared in conformity with generally accepted accounting principles (“GAAP”).  Most, but not all, of the selected financial information furnished herein is derived from the Company’s consolidated financial statements and related notes prepared in accordance with GAAP and management’s discussion and analysis included in the Company’s reports on Forms 10-K and 10-Q.  The Company’s annual financial statements are subject to independent audit.  These materials replace and supersede investor presentation materials previously furnished as an exhibit to Current Reports on Form 8-K.  These materials are dated April 22, 2011, and TCF does not undertake to update the materials after that date.

 

The presentation is also available on the Investor Relations section of 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.

 

Information contained herein, including Exhibit 99.1, shall not be deemed filed for the purposes 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 shall be expressly set forth by specific reference in such a filing.

 

2


 

Item 9.01  Financial Statements and Exhibits.

 

(d)         Exhibits.

 

Exhibit No.

 

Description

 

 

 

 99.1

 

Investor Presentation of TCF Financial Corporation, dated April 22, 2011

 

 

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 hereunto 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)

 

Date:       April 22, 2011

 

3

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

 

Exhibit 99.1

 

1.)

 

TCF Financial Corporation
2011 First Quarter Investor Presentation

 

 

 

 

2.)                                  Corporate Profile

 

At March 31, 2011

 

·                  $18.7 billion national bank holding company headquartered in Minnesota

 

·                  32nd largest publicly-traded U.S. based bank holding company by asset size

 

·                  442 bank branches in eight states, 48 branches opened since January 1, 2006

 

·                  25th largest U.S. branch network

 

·                  Seven campus alliances; 5th largest in campus card banking relationships

 

·                  956 ATMs free to TCF customers; 475 off-site

 

·                  11th largest issuer of Visa® Classic debit cards

 

·                  12th largest issuer of Visa Commercial debit cards

 

·                  13th largest bank-affiliated leasing company in the U.S.

 

·                  Total equity to total assets of  9.22%

 

·                  Tangible realized common equity of 8.61% 1

 

·                  64th consecutive quarter of profitability

 

Branch Summary

 

Minnesota

 

111

 

Illinois

 

201

 

Michigan

 

55

 

Colorado

 

36

 

Wisconsin

 

26

 

Arizona

 

7

 

Indiana

 

5

 

South Dakota

 

1

 

Total

 

442

 

 

Well-Diversified Loan Portfolio

($ millions)

 

 

 

12/31/00

 

% of Total

 

3/31/11

 

% of Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Lending

 

$

5,909

 

69

%

$

7,097

 

48

%

 

 

Commercial Lending

 

1,782

 

21

 

3,609

 

24

 

 

 

Leasing

 

856

 

10

 

3,080

 

21

 

 

 

Inventory Finance

 

 

 

1,011

 

7

 

 

 

Total

 

$

8,547

 

100

%

$

14,797

 

100

%

 

 

 

1   See “Reconciliation of GAAP to Non-GAAP Measures - Tangible Realized Common Equity” slide

 


 

3.)                                  What Makes TCF Different

 

At March 31, 2011

 

·                  Convenience

TCF banks a large and diverse customer base by offering a host of convenient banking services:

·                  Traditional, supermarket and campus branches open seven days a week

·                  Free debit cards, free coin counting and 956 free ATMs

·                  TCF Free Online Banking

·                  TCF Mobile Banking

 

·                  Credit Quality

·                  TCF is primarily a secured portfolio lender, emphasizing credit quality over asset growth

 

·                  Low-cost core deposit funding for national diverse lending platform

·                  Grew core deposits by $3.3 billion since December 31, 2008.  As of March 31, 2011, core deposits carried an average interest rate of .37%

·                  Increased nationally-oriented specialty finance businesses by $1.6 billion, or 64.3%, since December 31, 2008

 


 

 

4.)                                  What Makes TCF Different

 

·                  No deficient foreclosure procedures

 

·                  No mortgage repurchase risk

 

·                  No non-agency mortgage-backed securities

 

·                  No option ARM loans

 

·                  No teaser rate or subprime lending programs

 

·                  No low-doc/no-doc loans

 

·                  No Freddie Mac or Fannie Mae preferred stock

 

·                  No mortgage servicing rights

 

·                  No off-balance-sheet funding or securitizations

 

·                  No bank-owned life insurance

 


 

5.)                                  Diversified Revenue Base

 

At March 31, 2011

 

Good Revenue Growth

($ millions)

 

 

12/07

 

12/08

 

12/09

 

12/10

 

3/11 1

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income

 

$

550

 

$

594

 

$

633

 

$

699

 

$

174

 

Non-interest Income

 

542

 

498

 

526

 

538

 

114

 

Total

 

$

1,092

 

$

1,092

 

$

1,159

 

$

1,237

 

$

288

 

 

Strong Net Interest Margin

(Percent)

 

 

2007

 

2008

 

2009

 

2010

 

2011

 

TCF, 4.06%

 

 

 

 

 

 

 

 

 

 

 

First Quarter

 

4.00

%

3.84

%

3.66

%

4.21

%

4.06

%

Second Quarter

 

4.02

 

4.00

 

3.80

 

4.19

 

 

 

Third Quarter

 

3.90

 

3.97

 

3.92

 

4.14

 

 

 

Fourth Quarter

 

3.83

 

3.84

 

4.08

 

4.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

KBW Regional Banking

 

 

 

 

 

 

 

 

 

 

 

Index Median, 3.69% 2

 

 

 

 

 

 

 

 

 

 

 

First Quarter

 

3.66

%

3.61

%

3.49

%

3.71

%

 

 

Second Quarter

 

3.69

 

3.64

 

3.57

 

3.73

 

 

 

Third Quarter

 

3.68

 

3.64

 

3.64

 

3.78

 

 

 

Fourth Quarter

 

3.69

 

3.65

 

3.68

 

3.69

 

 

 

 

Strong Mix of Fee Revenues 1

($ millions)

 

 

3/11

 

% of Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Banking Fees and Service Charges

 

$

53

 

46

%

 

 

 

 

 

 

Card Revenue

 

27

 

24

 

 

 

 

 

 

 

Specialty Finance

 

27

 

24

 

 

 

 

 

 

 

ATM Revenue and Other

 

7

 

6

 

 

 

 

 

 

 

Total

 

$

114

 

100

%

 

 

 

 

 

 

 

1-Year Interest Rate GAP

 

 

At 3/31/10

 

At 3/31/11

 

 

 

 

 

 

 

Asset (Liability) Sensitive

 

(1.5

)%

5.4

%

 

 

 

 

 

 

 

1   Year-to-date

2   QTD December 31, 2010

 


 

6.)                                  Common Stock Offering

 

·                  Gross proceeds of $230 million

·                  Issued 15,081,968 shares at $15.25 per share

 

·                  Rationale

·                  Ability to proactively manage capital structure from a position of strength

·                  Eliminate all holding company debt and thus eliminate all debt service requirements at the bank

·                  Increase balance sheet flexibility to aggressively take advantage of marketplace opportunities

 

·                  Use of proceeds

·                  Redeem trust preferred securities upon the occurrence of a capital treatment event

·                  Repaid all senior unsecured holding company debt

·                  Allows for immediate and long-term business expansion and portfolio acquisitions in Specialty Finance

 


 

7.)                                  Capital Ratios - Holding Company

($ millions)

 

 

12/07

 

12/08

 

12/09

 

12/10

 

3/11

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Tier 1 Common Capital

 

$

964

 

$

999

 

$

1,042

 

$

1,352

 

$

1,601

 

Total Tier 1 Common Capital Ratio 1

 

8.28

%

8.05

%

7.65

%

9.71

%

11.47

%

 

At March 31, 2011

 

·                  Other Capital Ratios

·                  Total equity to total assets — 9.22%

 

·                  Tangible realized common equity — 8.61% 2

 

·                  Total risk-based capital — 14.62%

 

·                  Tangible realized common equity has increased eight consecutive quarters

 

1   See “Reconciliation of GAAP to Non-GAAP Measures - Total Tier 1 Common Capital Ratio” slide

2   See “Reconciliation of GAAP to Non-GAAP Measures - Tangible Realized Common Equity” slide

 

 


 

8.)                                  Strong Deposit Franchise

Quarterly Average Balances

($ millions)

 

 

 

12/07

 

12/08

 

12/09

 

12/10

 

3/11

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking

 

$

3,981

 

$

3,914

 

$

4,116

 

$

4,359

 

$

4,502

 

Savings

 

2,596

 

2,861

 

5,231

 

5,412

 

5,444

 

Money Market

 

598

 

625

 

672

 

644

 

674

 

Certificates of Deposit (CDs)

 

2,307

 

2,449

 

1,367

 

1,040

 

1,092

 

Total

 

$

9,482

 

$

9,849

 

$

11,386

 

$

11,455

 

$

11,712

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Rate 1:

 

2.29

%

1.51

%

.74

%

.46

%

.42

%

 

 

 

 

 

 

 

 

 

 

 

 

CDs as a % of total deposits:

 

24.3

%

24.9

%

12.0

%

9.1

%

9.3

%

 

1   Quarter-to-date (annualized)

 


 

9.)                                  Industry Leader in Retail Checking

Product Development

 

 

 

Bold and Forward Thinking

 

 

 

·                  Among the first to introduce Free Checking in 1986

·                  Leader in debit card innovations

·                  Solid opt-in results due to proactive customer education

·                  Announced checking product enhancement initiative in January 2011

·                  Removed minimum balance fee requirement

·                  Monthly maintenance fee waived for meeting account activity requirements

·                  Launched TCF Mobile Banking

·                  Pilot of new checking account program began in March 2011

·                  A single daily fee is assessed when a customer’s end of day ledger balance is negative

·                  Improved customer experience through program simplification and transparency


 

10.)         Card Revenue

($ millions)

 

 

 

2007

 

2008

 

2009

 

2010

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Quarter

 

$

23

 

$

25

 

$

25

 

$

27

 

$

27

 

 

Second Quarter

 

25

 

27

 

27

 

29

 

 

 

Third Quarter

 

26

 

26

 

26

 

27

 

 

 

Fourth Quarter

 

25

 

25

 

27

 

28

 

 

 

Total

 

$

99

 

$

103

 

$

105

 

$

111

 

$

27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales Volume:

 

$

6,949

 

$

7,280

 

$

7,308

 

$

7,630

 

$

1,867

 

1 

Average Interchange Rate:

 

1.35

%

1.34

%

1.34

%

1.38

%

1.35

%

1 

 

At March 31, 2011

 

·             31% of total banking fees

 

·             11th largest issuer of Visa Classic debit cards

 

·             12th largest issuer of Visa Commercial debit cards

 

·             $1.9 billion in sales volume 1

 

·             22.2 transactions per month on active cards, up 7.8% 1

 

·             Average interchange rate of 1.35%

 

1      Year-to-date

 


 

11.)         Durbin Amendment

 

·                  Durbin Amendment of the Dodd-Frank Act orders Federal Reserve to enact regulations that strictly limit the amount of interchange fees banks can charge retailers on debit card transactions

·                  Federal Reserve announced proposed rates of 7 to 12 cents per transaction based only on incremental processing fees while specifically excluding other costs such as network costs

·                          Federal Reserve has received an overwhelming number of comment letters and announced they would be unable to meet the April 21, 2011 deadline for issuing the final interchange rule

 

·                  On October 12, 2010, TCF filed a lawsuit challenging the constitutionality of the Durbin Amendment

·                  Challenge of constitutionality based on due process, the taking clause and equal protection

·                  On April 4, 2011, a U.S. District judge denied the government’s motion to dismiss TCF’s complaint and also denied TCF’s motion for a preliminary injunction

·                  TCF appealed the judge’s ruling regarding the preliminary injunction and received expedited treatment in the 8th Circuit Court of Appeals with a hearing to be set during the month of June

 

·                  Bills have been introduced with bi-partisan support in both the U.S. House of Representatives and Senate that seek a delay of the implementation of the Durbin Amendement while a study is conducted

 


 

 

12.)         Wholesale Loan Growth 12%*

($ millions)

 

 

 

Diverse Products and Geographies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/07

 

12/08

 

12/09

 

12/10

 

3/11

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Lending

 

$

3,116

 

$

3,491

 

$

3,719

 

$

3,646

 

$

3,609

 

Leasing and Equipment Finance

 

2,104

 

2,486

 

3,071

 

3,155

 

3,080

 

Inventory Finance

 

 

5

 

469

 

792

 

1,011

 

Total

 

$

5,220

 

$

5,982

 

$

7,259

 

$

7,593

 

$

7,700

 

 

*   Five-year compound annual growth rate


 

13.)         Leasing & Equipment Finance 1

($ millions)

 

 

 

1Q11 Originations up 16% from 1Q10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/07

 

12/08

 

12/09

 

12/10

 

3/11

 

 

 

 

 

 

 

 

 

 

 

 

 

Leasing and Equipment Finance

 

$

2,175

 

$

2,545

 

$

3,177

 

$

3,232

 

$

3,146

 

 

At March 31, 2011

 

·                  13th largest bank-affiliated leasing company and 29th largest equipment finance/leasing company in the U.S.

 

·                  Diverse equipment types

·                  20% specialty vehicles, 17% manufacturing, 14% medical, 11% construction

 

·                  6.10% average yield

 

·                  Government stimulus of 100% year-one depreciation creates volume and spread opportunities

 

·                  Over 60-day delinquency rate .20%  2

 

·                 Net charge-offs:

 

2011

 

2010

 

2009

 

 

 

.36% 3

 

1.00%

 

.97%

 

 

·                  Uninstalled backlog of $429.6 million

 

·                  Unguaranteed residuals of only $105.9 million, or 5.0% of leases

 

1          Includes operating leases ($65.6 million at March 31, 2011)

2          Excludes non-accrual loans and leases and acquired portfolios

3          Annualized


 

14.)         TCF Inventory Finance

($ millions)

 

 

 

Strong Traction in Multiple

 

 

 

 

 

 

 

Origination Segments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/08

 

12/09

 

12/10

 

3/11

 

 

 

 

 

 

 

 

 

 

 

Lawn & Garden

 

$

 

$

347

 

$

442

 

$

710

 

PowerSports & Other

 

 

 

221

 

194

 

Electronics & Appliances

 

4

 

122

 

129

 

107

 

Total

 

$

4

 

$

469

 

$

792

 

$

1,011

 

 

At March 31, 2011

 

·                  Inventory floorplan finance business with a focus on lawn and garden products, consumer electronics and appliances, and power sports

 

·                  Experienced and seasoned management

 

·                  Operates in the U.S. and Canada

 

·                  239 employees

 

·                  100% variable rate receivables

 

·                  Average yield 7.12%

 

·                 Net charge-offs:

 

2011

 

2010

 

 

 

.40% 1

 

.17%

 

 

·                  Credit support from equipment manufacturers

 

·                  Credit risk spread across more than 8,900 active dealers

 

1          Annualized


 

15.)         Commercial Lending

($ millions)

 

 

 

Secured Lending Philosophy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/07

 

12/08

 

12/09

 

12/10

 

3/11

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Real Estate

 

$

2,558

 

$

2,984

 

$

3,269

 

$

3,328

 

$

3,300

 

Commercial Business

 

558

 

507

 

450

 

318

 

309

 

Total

 

$

3,116

 

$

3,491

 

$

3,719

 

$

3,646

 

$

3,609

 

 

At March 31, 2011

 

·                  Commercial real estate — $3.3 billion

·                  26% retail services

·                  25% apartment loans

·                  18% office buildings

·                  13% industrial buildings

·                  7% hotels and motels

 

·                  Commercial business — $309 million

 

·                  Commercial highlights

·                  5.56% average yield

·                  85% fixed rate, 15% variable rate

·                  Over 60-day delinquency rate .05% 1

·                 Net charge-offs:

 

2011

 

2010

 

2009

 

 

 

1.39% 2

 

1.31%

 

1.24%

 

 

·                  Non-accrual loans decreased $14.5 million during 1Q11

·                  Approximately 99% of all commercial loans secured

·                  CRE location mix: 92% TCF banking markets, 8% other

 

1          Excludes non-accrual loans

2      Annualized


 

16.)                           Wholesale Banking1 Credit Quality

($ millions)

 

 

 

9/10

 

12/10

 

3/11

 

 

 

 

 

 

 

 

 

Performing loans and leases:

 

 

 

 

 

 

 

Non-classified

 

$

6,979

 

$

6,950

 

$

7,061

 

Classified 2

 

418

 

396

 

446

 

Subtotal performing

 

7,397

 

7,346

 

7,507

 

60+ days delinquent and accruing 3

 

11

 

20

 

12

 

Accruing TDRs 4

 

5

 

49

 

17

 

Non-accrual loans and leases

 

203

 

178

 

164

 

Total loans and leases

 

$

7,616

 

$

7,593

 

$

7,700

 

Net charge-offs

 

$

22

 

$

27

 

$

21

 

 

1   Includes commercial banking and specialty finance

2   Excludes classified loans and leases that are 60+ days delinquent or accruing TDRs

3   Excludes accruing TDRs that are 60+ days delinquent

4   No over 60-day delinquencies as of March 31, 2011

 


 

17.)                           Consumer Real Estate

($ millions)

 

 

 

12/07

 

12/08

 

12/09

 

12/10

 

3/11

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed-rate

 

$

5,481

 

$

5,487

 

$

5,332

 

$

4,793

 

$

4,687

 

Variable-rate

 

1,570

 

1,815

 

1,949

 

2,363

 

2,375

 

Total

 

$

7,051

 

$

7,302

 

$

7,281

 

$

7,156

 

$

7,062

 

Balances of Loans Originated Since 1/1/09

 

 

 

$

 

$

857

 

$

1,442

 

$

1,530

 

 

At March 31, 2011

 

·                  74% first mortgage lien positions, average loan amount of $122,716

 

·                  26% junior lien positions, average loan amount of $40,578

 

·                  66% fixed-rate, 34% variable-rate

 

·                  Average home value of $255,636 1

 

·                  5.83% average yield

 

·                  Over 60-day delinquency rate of 1.30% 2; down for 3rd consecutive quarter

 

·                  Net charge-offs:

 

2011

 

2010

 

2009

 

 

 

1.99% 3

 

1.80%

 

1.46%

 

 

·                  Average FICO score of the retail lending operation:

At origination — 726

Updated 1Q11 — 724

 

·                  $2.2 billion of loans originated since January 1, 2009 has improved credit quality metrics (2011 net charge-offs of .06% 3 ) and has increased the composition of variable-rate loans in the portfolio

 

·                  82% of retail lending loans have never been delinquent

 

1   Based on value at origination

2   Excludes non-accrual loans

3   Annualized

 


 

18.)                           Consumer Credit Quality

($ millions)

 

 

 

9/10

 

12/10

 

3/11

 

Performing loans

 

$

6,713

 

$

6,613

 

$

6,533

 

60+ days delinquent and accruing 1

 

84

 

77

 

67

 

Accruing TDRs

 

316

 

337

 

342

 

Non-accrual loans and leases

 

167

 

168

 

155

 

Total loans

 

$

7,280

 

$

7,195

 

$

7,097

 

Net charge-offs

 

$

36

 

$

38

 

$

35

 

% of total past due with a recent payment 2

 

28.0

%

28.0

%

29.2

%

 

1   Excludes accruing TDRs that are 60+ days delinquent

2   Retail lending accruing loans over 30-days delinquent that made a payment during the last month of the period

 


 

19.)                           Consumer Real Estate TDRs

 

·                  Loans modified to assist customers with their financial hardship by lowering their monthly loan payments for up to 18 months

 

·                  At March 31, 2011, TCF held $342 million of modified consumer real estate loans that are considered TDRs and continue to accrue interest, a net increase of $4.6 million, or 1.4% from December 31, 2010 (lowest quarter-over-quarter growth rate since the program was announced in August 2009)

 

·                  Reserved for based on present value of expected cash flows - $40.4 million, or 11.8% at March 31, 2011

 

·                  The over 60-day delinquency rate was 6.5% at March 31, 2011, up from 5.3% at December 31, 2010

 

·                  TCF’s current modification program started in August 2009 and represents 76.9% of the March 31, 2011 balance of accruing TDRs

 


 

20.)                           Loan & Lease Geographic Diversification

($000s)

 

At Mar. 31, 2011:

 

Consumer
Real Estate
and Other

 

Commercial
Real Estate
and Commercial
Business

 

Leasing and
Equipment
Finance

 

Inventory
Finance

 

Total

 

Minnesota

 

$

2,791,925

 

$

875,824

 

$

83,484

 

$

25,946

 

$

3,777,179

 

Illinois

 

2,150,316

 

882,296

 

102,335

 

34,438

 

3,169,385

 

Michigan

 

1,005,659

 

731,307

 

115,011

 

32,165

 

1,884,142

 

Wisconsin

 

466,621

 

571,451

 

54,022

 

30,536

 

1,122,630

 

Colorado

 

565,656

 

139,065

 

42,040

 

8,144

 

754,905

 

California

 

4,031

 

17,993

 

385,652

 

20,961

 

428,637

 

Texas

 

2,675

 

2,741

 

242,393

 

52,509

 

300,318

 

Florida

 

5,045

 

60,688

 

173,354

 

39,922

 

279,009

 

Ohio

 

3,303

 

54,268

 

131,002

 

52,202

 

240,775

 

New York

 

3,777

 

531

 

164,875

 

40,201

 

209,384

 

Indiana

 

24,202

 

79,622

 

60,822

 

32,624

 

197,270

 

Canada

 

 

 

4,041

 

174,353

 

178,394

 

Arizona

 

52,076

 

34,130

 

71,164

 

5,006

 

162,376

 

Other

 

21,889

 

158,440

 

1,449,771

 

462,037

 

2,092,137

 

Total

 

$

7,097,175

 

$

3,608,356

 

$

3,079,966

 

$

1,011,044

 

$

14,796,541

 

 

 


 

21.)                           Allowance for Loan & Lease Losses

($ millions)

 

 

 

12/07

 

12/08

 

12/09

 

12/10

 

3/11

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Loan & Lease Losses

 

$

80.9

 

$

172.4

 

$

244.5

 

$

265.8

 

$

255.3

 

Net Charge-offs

 

.29

%

.78

%

1.34

%

1.47

%

1.51

1

 

 

 

 

 

 

 

 

 

 

 

 

Allowance as a % of period end loans & leases:

 

.65

%

1.29

%

1.68

%

1.80

%

1.73

%

Ratio of allowance to net charge-offs:

 

2.3

X

1.7

X

1.3

X

1.2

X

1.1

X

 

1   Annualized

 


 

22.)                           Credit Trends

(Percent)

 

 

Improving Trends Across All 3 Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6/09

 

9/09

 

12/09

 

3/10

 

6/10

 

9/10

 

12/10

 

3/11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Accrual Loans and Leases

 

1.72

%

1.88

%

2.03

%

2.08

%

2.26

%

2.48

%

2.33

%

2.16

%

Net Charge-offs 1

 

1.43

%

1.52

%

1.35

%

1.22

%

1.30

%

1.58

%

1.75

%

1.51

%

Over 60-day Delinquencies 2

 

.72

%

.81

%

.69

%

.82

%

.87

%

.78

%

.79

%

.69

%

 

1   Annualized

2   Excludes acquired portfolios

 


 

23.)                           Non-Accrual Loans & Leases

($ millions)

 

 

Inflows of New Non-Accruals is Slowing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 

Commercial

 

Leasing and
Equipment
Finance

 

Inventory
Finance

 

Total

 

Balance at September 30, 2010

 

$

166.6

 

$

161.9

 

$

40.4

 

$

.9

 

$

369.8

 

Inflows

 

61.0

 

18.3

 

11.2

 

1.6

 

92.1

 1

Outflows

 

(60.1

)

(37.9

)

(17.2

)

(1.4

)

(116.6

)

Net Change

 

.9

 

(19.6

)

(6.0

)

.2

 

(24.5

)

Balance at December 31, 2010

 

$

167.5

 

$

142.3

 

$

34.4

 

$

1.1

 

$

345.3

 

Inflows

 

58.4

 

7.6

 

10.8

 

3.8

 

80.6

 2

Outflows

 

(70.7

)

(22.1

)

(10.6

)

(3.5

)

(106.9

)

Net Change

 

(12.3

)

(14.5

)

.2

 

.3

 

(26.3

)

Balance at March 31, 2011

 

$

155.2

 

$

127.8

 

$

34.6

 

$

1.4

 

$

319.0

 

Combined two quarter net change

 

$

(11.4

)

$

(34.1

)

$

(5.8

)

$

.5

 

$

(50.8

)

 

1   Down 36.0% from 3Q10 inflows of $143.9 million

2   Down 12.6% from 4Q10 inflows of $92.1 million; lowest since 2Q08

 


 

24.)                           Summary of Non-Accrual Loans

($ millions)

 

At Mar. 31, 2011:

 

Contractual
Balance

 

Charge-offs and
Allowance
Recorded

 

Net
Exposure

 

Impairment 1

 

 

 

 

 

 

 

 

 

 

 

Consumer

 

$

203.6

 

$

49.8

 

$

153.8

 

24.5

%

Commercial

 

187.5

 

75.9

 

111.6

 

40.5

 

Leasing and equipment finance

 

34.6

 

8.2

 

26.4

 

23.6

 

Inventory finance

 

1.4

 

.1

 

1.3

 

7.1

 

Total

 

$

427.1

 

$

134.0

 

$

293.1

 

31.4

 

 

1   Represents the ratio of charge-offs and allowance recorded to the contractual loan balances prior to non-accrual status

 


 

25.)                           Summary of Real Estate Owned

($ millions)

 

At Mar. 31, 2011:

 

Contractual Loan
Balance Prior to
Non-performing
Status

 

Charge-offs and
Writedowns
Recorded

 

Other Real Estate
Owned Balance

 

Impairment 1

 

 

 

 

 

 

 

 

 

 

 

Consumer

 

$

144.5

 

$

46.5

 

$

98.0

 

32.2

%

Commercial

 

58.5

 

14.3

 

44.2

 

24.5

 

Total

 

$

203.0

 

$

60.8

 

$

142.2

 

30.0

 

 

1   Represents the ratio of charge-offs and writedowns recorded to the contractual loan balances prior to non-performing status

 

 


 

26.)                           Real Estate Owned
($ millions)

 

 

 

Good Activity Levels Related to Sales and
 a Slowdown of Inflows

 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 

Commercial

 

Total

 

Balance at September 30, 2010

 

$

88.3

 

$

47.8

 

$

136.1

 

Inflows

 

32.0

 

12.5

 

44.5

 

Outflows

 

(30.2

)

(9.3

)

(39.5

)

Net Change

 

1.8

 

3.2

 

5.0

 

Balance at December 31, 2010

 

$

90.1

 

$

51.0

 

$

141.1

 

Inflows

 

33.1

 

2.4

 

35.5

 

Outflows

 

(25.2

)

(9.2

)

(34.4

)

Net Change

 

7.9

 

(6.8

)

1.1

 

Balance at March 31, 2011

 

$

98.0

 

$

44.2

 

$

142.2

 

 


 

27.)         Well-Positioned for Future Success

 

·                  Experienced and tenured management team’s bold and innovative approach takes advantage of marketplace opportunities created by the current environment

 

·                  “New” industry approach of diverse portfolio lending funded with low-cost core retail deposits has been a part of TCF’s business philosophy for many years

 

·                  Current management structure (Wholesale, Retail and Treasury & Support Services) has improved execution, reduces overhead and increased ability to quickly react to the current environment

 

·                  Strong wholesale banking management team positions us for profitable growth

 


 

28.)         Cautionary Statement

 

This presentation 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 and Other 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; foreign currency exchange risks.

 

* 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 adverse conditions in the banking industry,  the economic impact on banks of the Dodd-Frank Act, 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 Dodd-Frank 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; possible regulatory and other changes to the Federal Home Loan Bank System that may affect TCF’s borrowing capacity; costs associated with new regulatory requirements or interpretive guidance relating to liquidity.

 

* Legislative and Regulatory Requirements.  New consumer protection and supervisory requirements, including the  Dodd-Frank Act’s creation of a new Bureau of Consumer Financial Protection 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 Dodd-Frank 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 to the  Dodd-Frank 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, (continued)

 


 

29.)         Cautionary Statement (continued)

 

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.

 

* Other Risks Relating to Fee Income. Future effects on fee income following TCF’s implementation of regulatory requirements that prohibit financial institutions from charging overdraft fees on point-of-sale and ATM transactions unless customers opt-in, including customer opt-in preferences which may have an adverse impact on TCF’s fee revenue; and uncertainties relating to future retail deposit account changes such as charging a daily negative balance fee in lieu of per item overdraft fees or other significant changes, including limitations on TCF’s ability to predict customer behavior and the impact on TCF’s fee revenues.

 

* 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;  federal or state monetary, fiscal or tax policies, 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.

 


 

30.)                           Reconciliation of GAAP to Non-GAAP Measures - Tangible Realized Common Equity 1
($000s)

 

 

 

March 31, 2011

Computation of total equity to total assets:

 

 

 

Total equity

 

$

1,724,484

 

Total assets

 

$

18,712,149

 

Total equity to total assets

 

9.22

%

 

 

 

 

Computation of tangible realized common equity to tangible assets:

 

 

 

Total equity

 

$

1,724,484

 

Less: Non-controlling interest in subsidiaries

 

16,540

 

Total TCF stockholders’ equity

 

1,707,944

 

Less:

 

 

 

Goodwill

 

152,599

 

Other intangibles

 

1,189

 

Add:

 

 

 

Accumulated other comprehensive loss

 

44,172

 

Tangible realized common equity

 

$

1,598,328

 

 

 

 

 

Total assets

 

$

18,712,149

 

Less:

 

 

 

Goodwill

 

152,599

 

Other intangibles

 

1,189

 

Tangible assets

 

$

18,558,361

 

 

 

 

 

Tangible realized common equity to tangible assets

 

8.61

%

 

1                   In contrast to GAAP-basis measures, tangible realized common equity excludes the effect of goodwill, other intangibles and accumulated other comprehensive income (loss). Management reviews tangible realized common equity as an ongoing measure and has included this information because of current interest in the industry.  The methodology for calculating tangible realized common equity may vary between companies.

 


 

31.)                           Reconciliation of GAAP to Non-GAAP Measures - Total Tier 1 Common Capital Ratio 1
($000s)

 

 

 

Dec. 31, 2007

 

Dec. 31, 2008

 

Dec. 31, 2009

 

Dec. 31, 2010

 

Mar. 31, 2011

Total Tier 1 risk-based capital ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total tier 1 capital

 

$

964,467

 

 

$

1,461,973

 

 

$

1,161,750

 

 

$

1,475,525

 

 

$

1,732,554

 

Total risk-weighted assets

 

$

11,648,286

 

 

$

12,401,467

 

 

$

13,627,871

 

 

$

13,929,097

 

 

$

13,961,754

 

Total tier 1 risk-based capital ratio

 

8.28

%

 

11.79

%

 

8.52

%

 

10.59

%

 

12.41

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Computation of tier 1 common capital ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total tier 1 capital

 

$

964,467

 

 

$

1,461,973

 

 

$

1,161,750

 

 

$

1,475,525

 

 

$

1,732,554

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Qualifying trust preferred securities

 

 

 

115,000

 

 

115,000

 

 

115,000

 

 

115,000

 

Qualifying non-controlling interest in subsidiaries

 

 

 

 

 

4,393

 

 

8,500

 

 

16,450

 

Preferred stock

 

 

 

348,437

 

 

 

 

 

 

 

Total tier 1 common capital

 

$

964,467

 

 

$

998,536

 

 

$

1,042,357

 

 

$

1,352,025

 

 

$

1,601,104

 

Total risk-weighted assets

 

$

11,648,286

 

 

$

12,401,467

 

 

$

13,627,871

 

 

$

13,929,097

 

 

$

13,961,754

 

Total tier 1 common capital ratio

 

8.28

%

 

8.05

%

 

7.65

%

 

9.71

%

 

11.47

%

 

1                   In contrast to GAAP-basis measures, the total tier 1 common capital ratio excludes the effect of qualifying trust preferred securities and qualifying  non-controlling interest in subsidiaries. Management reviews the total tier 1 common capital ratio as an ongoing measure and has included this information because of current interest in the industry.  The  methodology for calculating total tier 1 common capital may vary between companies.

 


 

32.)                           Source References & Footnotes

 

Slide: Corporate Profile

32nd largest publicly-traded U.S. based bank holding company - SNL Financial, LC; 12/31/10

25th largest branch network - SNL Financial, LC; 1Q11

5th largest in campus card relationships - CR80News; Spring 2010

11th largest issuer of Visa Classic - Visa; 4Q10; ranked by sales volume

12th largest issuer of Visa Commercial - Visa; 4Q10; ranked by sales volume

13th largest bank affiliated leasing company - The Monitor; 2010 Monitor 100

 

Slide: Diversified Revenue Base

KBW Regional Banking Index net interest margin data - KBW & SNL Financial LC; 12/31/10

 

Slide: Card Revenue

11th largest issuer of Visa Classic - Visa; 4Q10; ranked by sales volume

12th largest issuer of Visa Commercial - Visa; 4Q10; ranked by sales volume

 

Slide: Leasing and Equipment Finance

13th largest bank-affiliated leasing company - The Monitor; 2010 Monitor Bank 40

29th largest equipment finance/leasing company - The Monitor; 2010 Monitor 100

 

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