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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):  July 21, 2011

 


 

 

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.

 

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.

 

TCF Financial Corporation (the “Company”) issued a press release dated July 21, 2011, attached to this Form 8-K as Exhibit 99.1, announcing its results of operations for the quarter ended June 30, 2011.

 

The earnings release is also available on the Investor Relations section of the Company’s web site at http://ir.tcfbank.com.  The Company’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 July 21, 2011

 

2

 

 


 

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:    July 21, 2011

 

3

 

(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 65th Consecutive Quarter of Net Income – Earns $29.8 Million

 

SECOND QUARTER HIGHLIGHTS

·                  Diluted earnings per common share of 19 cents

·                  Net income of $29.8 million

·                  Net interest margin of 4.02 percent

·                  Average deposits increased $227.7 million, or 1.9 percent, from the first quarter of 2011

·                  Announced quarterly cash dividend of 5 cents per common share, payable August 31, 2011

 

Earnings Summary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 1

 

($ in thousands, except per-share data)

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 

 

2Q
2011

 

1Q
2011

 

2Q
2010

 

2Q11 vs
1Q11

 

2Q11 vs 2Q10

 

YTD
2011

 

YTD
2010

 

Percent
Change

 

Net income

 

$29,837

 

 

$29,686

 

 

$45,025

 

 

.5

%

 

(33.7)

%

 

$59,523

 

 

$78,946

 

 

(24.6)

%

 

Diluted earnings per common share

 

.19

 

 

.20

 

 

.32

 

 

(5.0

)

 

(40.6)

 

 

.39

 

 

.58

 

 

(32.8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Ratios (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

.67

%

 

.66

%

 

1.02

%

 

 

 

 

 

 

 

.67

%

 

.89

%

 

 

 

 

Return on average common equity

 

6.86

 

 

7.84

 

 

12.71

 

 

 

 

 

 

 

 

7.32

 

 

11.75

 

 

 

 

 

Net interest margin

 

4.02

 

 

4.06

 

 

4.19

 

 

 

 

 

 

 

 

4.04

 

 

4.20

 

 

 

 

 

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

 

1.19

 

 

1.51

 

 

1.30

 

 

 

 

 

 

 

 

1.35

 

 

1.26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Annualized.

 

 

-more-


2

 

WAYZATA, MN, July 21, 2011 – TCF Financial Corporation (“TCF”) (NYSE: TCB) today reported net income for the second quarter of 2011 of $29.8 million, compared with $45 million in the second quarter of 2010 and $29.7 million in the first quarter of 2011.  Diluted earnings per common share was 19 cents for the second quarter of 2011, compared with 32 cents in the second quarter of 2010 and 20 cents in the first quarter of 2011.

 

Net income for the first six months of 2011 was $59.5 million, compared with $78.9 million for the same 2010 period.  Diluted earnings per common share for the first six months of 2011 was 39 cents, compared with 58 cents for the same 2010 period.

 

TCF declared a quarterly cash dividend of five cents per common share payable on August 31, 2011 to stockholders of record at the close of business on July 29, 2011.

 

Chairman’s Statement

 

“TCF’s 65th consecutive quarter of profitability saw many encouraging developments including favorable overall credit trends and strong new checking account production,” said William A. Cooper, TCF Chairman and Chief Executive Officer.  “Much of the uncertainty surrounding the Durbin Amendment was also eliminated during the quarter following the Federal Reserve Board’s issuance of their final rule on debit card interchange and our decision to dismiss our lawsuit challenging the constitutionality of the Durbin Amendment.  We feel our lawsuit served its purpose in reducing the final impact of the Durbin Amendment and are encouraged that the Federal Reserve Board’s final rule took into consideration many of the points we made in our case.

 

“Our focus remains on positioning TCF for future growth and success.  This includes analyzing various opportunities to grow the balance sheet and working toward continuing our favorable overall credit quality trends.   Certainly, we have continued to evaluate potential strategies to mitigate the lost debit card interchange revenue.   We believe the industry will be making changes to products and fees in the fourth quarter and TCF expects to be implementing its new product and fee structures in the fourth quarter. I am confident that as the market continues to adjust to the new regulatory environment, we will find the appropriate solutions for the benefit of our shareholders and customers.”

 

-more-

 


 

3

 

Total Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 2

 

 

 

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 

 

($ in thousands)

 

2Q
2011

 

1Q
2011

 

 

2Q
2010

 

2Q11 vs
1Q11

 

 

2Q11 vs
2Q10

 

 

YTD
2011

 

YTD
2010

 

Percent
Change

 

Net interest income

 

$176,150

 

 

$174,040

 

 

 

$176,499

 

 

 

1.2

%

 

 

(.2

)%

 

 

 

$350,190

 

 

$351,161

 

 

(.3

)%

 

Fees and other revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges

 

56,396

 

 

53,513

 

 

 

77,845

 

 

 

5.4

 

 

 

(27.6

)

 

 

 

109,909

 

 

144,017

 

 

(23.7

)

 

Card revenue

 

28,219

 

 

26,584

 

 

 

28,591

 

 

 

6.2

 

 

 

(1.3

)

 

 

 

54,803

 

 

55,663

 

 

(1.5

)

 

ATM revenue

 

7,091

 

 

6,705

 

 

 

7,844

 

 

 

5.8

 

 

 

(9.6

)

 

 

 

13,796

 

 

14,866

 

 

(7.2

)

 

Total banking fees

 

91,706

 

 

86,802

 

 

 

114,280

 

 

 

5.6

 

 

 

(19.8

)

 

 

 

178,508

 

 

214,546

 

 

(16.8

)

 

Leasing and equipment finance

 

22,279

 

 

26,750

 

 

 

20,528

 

 

 

(16.7

)

 

 

8.5

 

 

 

 

49,029

 

 

40,880

 

 

19.9

 

 

Other

 

384

 

 

694

 

 

 

1,235

 

 

 

(44.7

)

 

 

(68.9

)

 

 

 

1,078

 

 

3,690

 

 

(70.8

)

 

Total fees and other revenue

 

114,369

 

 

114,246

 

 

 

136,043

 

 

 

.1

 

 

 

(15.9

)

 

 

 

228,615

 

 

259,116

 

 

(11.8

)

 

Subtotal

 

290,519

 

 

288,286

 

 

 

312,542

 

 

 

.8

 

 

 

(7.0

)

 

 

 

578,805

 

 

610,277

 

 

(5.2

)

 

Losses on securities

 

(227

)

 

-

 

 

 

(137

)

 

 

N.M.

 

 

 

(65.7

)

 

 

 

(227

)

 

(567

)

 

60.0

 

 

Total revenue

 

$290,292

 

 

$288,286

 

 

 

$312,405

 

 

 

.7

 

 

 

(7.1

)

 

 

 

$578,578

 

 

$609,710

 

 

(5.1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin(1) 

 

4.02

%

 

4.06

%

 

 

4.19

%

 

 

 

 

 

 

 

 

 

 

 

4.04

%

 

4.20

%

 

 

 

 

Fees and other revenue as a % of total revenue

 

39.40

 

 

39.63

 

 

 

43.55

 

 

 

 

 

 

 

 

 

 

 

 

39.51

 

 

42.50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

N.M. = Not meaningful.
(1) Annualized.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income

 

·                  Net interest income increased $2.1 million, or 1.2 percent, from the first quarter of 2011 and was relatively flat with the second quarter of 2010. The increase in net interest income from the first quarter of 2011 was primarily due to growth in the higher-yielding inventory finance portfolio, decreased rates paid on deposits and a decrease in interest expense on borrowings.  These changes were partially offset by the impact of operating in a lower interest rate environment and growth in lower yielding variable-rate consumer real estate and commercial loans.

 

·                  Net interest margin in the second quarter of 2011 was 4.02 percent, compared with 4.19 percent in the second quarter of 2010 and 4.06 percent in the first quarter of 2011. The decrease in net interest margin from both periods was primarily due to increased asset liquidity and growth in variable-rate loans and leases at lower yields as a result of the lower interest rate environment. These changes were partially offset by the lower average cost of deposits and borrowings.

 

·                  As a result of higher regulatory liquidity expectations across the industry, TCF increased its asset liquidity during the second quarter of 2011.  Interest-bearing deposits held at the Federal Reserve and unencumbered securities were $859 million at June 30, 2011, an increase of $616 million from the second quarter of 2010 and $23 million from the first quarter of 2011.  The increased asset liquidity position, which includes

 

-more-

 


 

4

 

maintaining $115 million of securities in anticipation of the future redemption of the trust preferred securities, negatively impacted net interest margin for the second quarter of 2011 by 8 basis points compared to the second quarter of 2010 and by 3 basis points from the first quarter of 2011.

 

·                  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, TCF’s balance sheet is in an asset sensitive position, based on TCF’s one-year interest rate gap assumptions, of 6.1 percent of total assets as of June 30, 2011, up from an asset sensitive position of 5.4 percent of total assets as of March 31, 2011. Variable-rate interest-earning assets comprised 16.4 percent of total interest earning assets at June 30, 2011, up from 12.8 percent at June 30, 2010 and down slightly from 16.6 percent at March 31, 2011.

 

Non-interest Income

 

·                  Banking fees and service charges in the second quarter of 2011 were $56.4 million, down $21.4 million, or 27.6 percent, from the second quarter of 2010 and up $2.9 million, or 5.4 percent, from the first quarter of 2011.  The decrease in banking fees and services charges from the second quarter of 2010 was primarily due to decreased activity-based fee revenue as a result of a change in overdraft fee regulations in the third quarter of 2010, changes in customer banking and spending behavior and lower monthly maintenance fees as more customers qualified for fee waivers. The increase in banking fees and service charges from the first quarter of 2011 was primarily due to higher seasonal transaction activity.

 

·                  Card revenues were $28.2 million in the second quarter of 2011, down $372 thousand, or 1.3 percent, from the second quarter of 2010 and up $1.6 million, or 6.2 percent, from the first quarter of 2011. The decrease in card revenue from the second quarter of 2010 was primarily due to a decrease in the average interchange rate. The increase in card revenue from the first quarter of 2011 was primarily due to seasonal transaction volume.

 

·                  On June 29, 2011, the Federal Reserve issued its final debit card interchange rules, establishing a debit card interchange fee cap. These rules are effective October 1, 2011 and apply to issuers that, together with their affiliates, have assets of $10 billion or more. These regulations are estimated to reduce TCF’s card interchange revenue by approximately 50 percent ($50-$60 million annually).

 

-more-


 

5

 

·                  Leasing and equipment finance revenues were $22.3 million in the second quarter of 2011, up $1.8 million, or 8.5 percent, from the second quarter of 2010 and down $4.5 million, or 16.7 percent, from the first quarter of 2011. The increase from the second quarter of 2010 was due to increased sales-type lease revenues. The decrease from the first quarter of 2011 was due to a higher level of customer initiated lease activity during the first quarter of 2011.

 

Loans and Leases

 

 Average Loans and Leases

 

Table 3

 

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 ($ in thousands)

 

  2Q
  2011

 

  1Q
  2011

 

  2Q
  2010

 

2Q11 vs
1Q11

 

2Q11 vs
2Q10

 

  YTD
  2011

 

  YTD
  2010

 

Percent
Change

 

 Consumer real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First mortgage lien

 

$  4,838,896

 

$  4,863,679

 

$  4,930,801

 

      (.5) %

 

    (1.9) %

 

$  4,851,219

 

$  4,938,594

 

   (1.8) %

 

Junior lien

 

    2,195,552

 

    2,238,280

 

    2,303,400

 

(1.9)

 

(4.7)

 

    2,216,799

 

    2,307,841

 

(3.9) 

 

Total

 

    7,034,448

 

    7,101,959

 

    7,234,201

 

(1.0)

 

(2.8)

 

    7,068,018

 

    7,246,435

 

(2.5) 

 

 Consumer other

 

         19,463

 

         21,757

 

         27,584

 

(10.5) 

 

(29.4)  

 

         20,603

 

         28,988

 

(28.9)   

 

Total consumer

 

    7,053,911

 

    7,123,716

 

    7,261,785

 

(1.0)

 

(2.9)

 

    7,088,621

 

    7,275,423

 

(2.6) 

 

 Commercial

 

    3,597,644

 

    3,623,463

 

    3,721,815

 

  (.7)

 

(3.3)

 

    3,610,481

 

    3,712,079

 

(2.7) 

 

 Leasing and equipment finance

 

    3,068,550

 

    3,119,669

 

    3,021,532

 

(1.6)

 

1.6

 

    3,093,969

 

    3,032,537

 

2.0 

 

 Inventory finance

 

       978,505

 

       872,785

 

       692,816

 

12.1 

 

41.2  

 

       925,913

 

       623,283

 

48.6   

 

Total

 

$14,698,610

 

$14,739,633

 

$14,697,948

 

  (.3)

 

    - 

 

$14,718,984

 

$14,643,322

 

  .5 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·                  Average consumer real estate loan balances decreased $199.8 million, or 2.8 percent, from the second quarter of 2010 and decreased $67.5 million, or 1 percent, from the first quarter of 2011.  Decreases from both periods reflect a decline in production of new loans along with a more competitive environment for those borrowers who meet TCF’s underwriting criteria.

 

·                  Variable-rate consumer real estate loans increased $298 million from June 30, 2010 and $11.9 million from March 31, 2011, while fixed-rate consumer real estate loans decreased $497.8 million from June 30, 2010 and $79.4 million from March 31, 2011. Variable-rate loans comprised 34.1 percent of total consumer real estate loans at June 30, 2011, up from 29.8 percent at June 30, 2010 and 33.6 percent at March 31, 2011.

 

·                  Average commercial loan balances in the second quarter of 2011 decreased $124.2 million, or 3.3 percent, from the second quarter of 2010 and decreased $25.8 million, or .7 percent, from the first quarter of 2011.  The decreases for both periods were primarily due to higher levels of repayments, partially offset by an increase in loan originations and renewals. Commercial loan originations and renewals of $307.7 million

 

-more-

 


 

6

 

during the first six months of 2011 represent an increase of $25.9 million, or 9.2 percent, compared to the first six months of 2010.

 

·                  Average leasing and equipment finance loan and lease balances in the second quarter of 2011 increased $47 million, or 1.6 percent, from the second quarter of 2010 and decreased $51.1 million, or 1.6 percent, from the first quarter of 2011. The increase from the second quarter of 2010 was primarily due to a portfolio acquisition completed in the third quarter of 2010. The decrease from the first quarter of 2011 was primarily due to runoff of acquired portfolios, partially offset by increased originations. Leasing and equipment finance originations of $654.9 million during the first six months of 2011 represent an increase of $74.9 million, or 12.9 percent, compared to the first six months of 2010.

 

·                  Average inventory finance loans were $978.5 million in the second quarter of 2011, an increase of $285.7 million, or 41.2 percent, from the second quarter of 2010. Average inventory finance loans increased $105.7 million, or 12.1 percent, from the first quarter of 2011.  The increase from the second quarter of 2010 was primarily due to TCF’s entrance into the power sports industry in the third quarter of 2010.  The increase from the first quarter of 2011 was primarily due to seasonal growth in receivables from lawn and garden programs.

 

-more-

 


 

7

 

Credit Quality

 

 

·                  Overall favorable trends in credit quality are continuing as the level of non-performing assets, net charge-offs and over 60-day delinquencies have remained below the peak levels in 2010.

 

-more-

 


 

8

 

Credit Quality Summary of Performing and Underperforming Loans and Leases

 

Table 5

 

 

 

 

 

 

 

 

 

60+ Days

 

 

 

 

 

 

 

($ in thousands)

 

Performing Loans and Leases

 

Delinquent and

 

Accruing

 

Non-accrual

 

Total Loans

 

June 30, 2011:

 

Non-classified

 

Classified(1)

 

Total

 

Accruing(2)

 

TDRs

 

Loans and Leases

 

and Leases

 

Consumer real estate and other

 

$       6,492,656

 

$                   -

 

$    6,492,656

 

$              68,546

 

$       343,610

 

$        150,938

 

$     7,055,750

 

Commercial

 

         3,070,765

 

         375,210

 

      3,445,975

 

                     899

 

           27,114

 

          140,407

 

       3,614,395

 

Leasing and equipment finance

 

         2,987,135

 

           33,625

 

      3,020,760

 

                  5,436

 

                    -

 

            29,682

 

       3,055,878

 

Inventory finance

 

            900,630

 

             4,509

 

         905,139

 

                     149

 

                    -

 

                 634

 

          905,922

 

Total loans and leases

 

$     13,451,186

 

$       413,344

 

$  13,864,530

 

$              75,030

 

$       370,724

 

$        321,661

 

$   14,631,945

 

Percent of total loans and leases

 

              92.0%

 

             2.8%

 

           94.8%

 

                    .5%

 

             2.5%

 

               2.2%

 

           100.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

60+ Days

 

 

 

 

 

 

 

 

 

Performing Loans and Leases

 

Delinquent and

 

Accruing

 

Non-accrual

 

Total Loans

 

March 31, 2011:

 

Non-classified

 

Classified(1)

 

Total

 

Accruing(2)

 

TDRs

 

Loans and Leases

 

and Leases

 

Consumer real estate and other

 

$       6,532,544

 

$                  -

 

$    6,532,544

 

$              67,409

 

$       341,989

 

$        155,233

 

$     7,097,175

 

Commercial

 

         3,053,296

 

         407,978

 

      3,461,274

 

                  1,864

 

           17,473

 

          127,745

 

       3,608,356

 

Leasing and equipment finance

 

         3,001,249

 

           34,443

 

      3,035,692

 

                  9,640

 

                    -

 

            34,634

 

       3,079,966

 

Inventory finance

 

         1,005,837

 

             3,496

 

      1,009,333

 

                     274

 

                    -

 

              1,437

 

       1,011,044

 

Total loans and leases

 

$     13,592,926

 

$       445,917

 

$  14,038,843

 

$              79,187

 

$       359,462

 

$        319,049

 

$    14,796,541

 

Percent of total loans and leases

 

               91.9%

 

              3.0%

 

            94.9%

 

                     .5%

 

              2.4%

 

               2.2%

 

           100.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Excludes classified loans and leases that are 60+ days delinquent and accruing or accruing TDRs.

 

(2) Excludes accruing TDRs that are 60+ days delinquent.

 

 

 

 

At June 30, 2011:

 

·                  The combined balance of performing classified loans and leases, over 60-day delinquent and accruing loans and leases, accruing TDRs and non-accrual loans and leases decreased $22.9 million, or 1.9 percent from the first quarter of 2011. This was primarily due to an increase in the amount of performing classified commercial loans migrating to non-classified status.

 

·                  Over 60-day delinquency rate was .73 percent, down from .87 percent at June 30, 2010 and up from .69 percent at March 31, 2011. The decrease from the second quarter of 2010 was primarily due to decreases in consumer real estate and leasing and equipment finance delinquencies. The increase from the first quarter of 2011 was primarily due to a small number of new commercial delinquencies, partially offset by decreases in leasing and equipment finance delinquencies.

 

·                  Total non-accrual loans and leases and other real estate owned (non-performing assets) were $458.2 million at June 30, 2011, an increase of $10 million, or 2.2 percent, from June 30, 2010 and a decrease of $3 million, or .7 percent, from March 31, 2011. Non-accrual loans and leases decreased $8.5 million, or 2.6 percent, from June 30, 2010 as a $19.1 million decrease in leasing and equipment finance loans and leases was partially offset by one $15.9 million commercial credit that was placed on non-accrual in the most

 

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9

 

                        recent quarter and had previously been reserved for. Excluding this one credit, the new inflows to non-accrual status fell for the third consecutive quarter.

 

·                  Other real estate owned was $136.5 million at June 30, 2011, a decrease of $5.7 million from March 31, 2011, primarily due to sales of consumer real estate properties exceeding additions during the quarter.

 

Allowance for Loan and Lease Losses

 

 Credit Quality Summary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 6

 

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 ($ in thousands)

 

    2Q

 

    1Q

 

    2Q

 

2Q11 vs

 

2Q11 vs

 

    YTD

 

    YTD

 

Percent

 

 

 

    2011

 

    2011

 

    2010

 

1Q11

 

2Q10

 

    2011

 

    2010

 

Change

 

 Allowance for Loan and Lease Losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Balance at beginning of period

 

$

255,308

 

$

265,819

 

$

250,430

 

(4.0

) %

 

1.9

 %

 

$

265,819

 

$

244,471

 

8.7

 %

 

Charge-offs

 

(48,457

)

(61,104

)

(53,654

)

(20.7

)

 

(9.7

)

 

(109,561

)

(104,205

)

5.1

 

 

Recoveries

 

4,612

 

5,292

 

5,854

 

(12.8

)

 

(21.2

)

 

9,904

 

11,873

 

(16.6

)

 

Net charge-offs

 

(43,845

)

(55,812

)

(47,800

)

(21.4

)

 

(8.3

)

 

(99,657

)

(92,332

)

7.9

 

 

Provision for credit losses

 

44,005

 

45,274

 

49,013

 

(2.8

)

 

(10.2

)

 

89,279

 

99,504

 

(10.3

)

 

Other

 

4

 

27

 

-

 

(85.2

)

 

N.M.

 

 

31

 

-

 

N.M.

 

 

 Balance at end of period

 

$

255,472

 

$

255,308

 

$

251,643

 

.1

 

 

1.5

 

 

$

255,472

 

$

251,643

 

1.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Net charge-offs as a percentage of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 average loans and leases(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Consumer real estate and other:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First mortgage lien

 

1.78

 %

1.81

 %

1.36

 %

(3

) bps

 

42

 bps

 

1.80

 %

1.34

 %

46

 bps

 

Junior lien

 

2.75

 

2.39

 

2.20

 

36

 

 

55

 

 

2.56

 

2.22

 

34

 

 

Total consumer real estate

 

2.09

 

1.99

 

1.63

 

10

 

 

46

 

 

2.04

 

1.62

 

42

 

 

 Total consumer real estate and other

 

2.12

 

1.97

 

1.71

 

15

 

 

41

 

 

2.04

 

1.67

 

37

 

 

 Commercial

 

.30

 

1.96

 

.98

 

(166

)

 

(68

)

 

1.13

 

.91

 

22

 

 

 Leasing and equipment finance

 

.45

 

.36

 

.99

 

9

 

 

(54

)

 

.41

 

.93

 

(52

)

 

 Inventory finance

 

.13

 

.10

 

.04

 

3

 

 

9

 

 

.12

 

.16

 

(4

)

 

Total

 

1.19

 

1.51

 

1.30

 

(32

)

 

(11

)

 

1.35

 

1.26

 

9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Allowance as a percentage of period end loans and leases

 

1.75

 %

1.73

 %

1.72

 %

 

 

 

 

 

 

 

 

 

 

 Ratio of allowance to net charge-offs(1)

 

1.5

 X

1.1

 X

1.3

 X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 N.M. = Not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (1) Annualized.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At June 30, 2011:

 

·                  Allowance for loan and lease losses was $255.5 million, or 1.75 percent of loans and leases, compared with $251.6 million, or 1.72 percent, at June 30, 2010 and $255.3 million, or 1.73 percent, at March 31, 2011.

 

For the quarter ended June 30, 2011:

 

·              Provision for credit losses was $44 million, down from $49 million in the second quarter of 2010 and down from $45.3 million recorded in the first quarter of 2011. The decrease from the second quarter of 2010 was primarily due to decreased net charge-offs and reserves in the commercial and leasing and equipment finance portfolios as customer performance improved. The decrease from the first quarter of 2011 was

 

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10

 

                    primarily due to decreased commercial and leasing and equipment finance net charge-offs, partially offset by increased consumer real estate net charge-offs.

 

·                  Net loan and lease charge-offs were $43.8 million, or 1.19 percent, annualized, of average loans and leases, down from $47.8 million, or 1.30 percent, annualized, in the second quarter of 2010 and down from $55.8 million, or 1.51 percent, annualized, in the first quarter of 2011. The decrease from the second quarter of 2010 was primarily due to decreases in commercial and leasing and equipment finance, partially offset by increases in consumer real estate, primarily in Illinois.  The decrease from the first quarter of 2011 was due primarily to decreases in commercial net charge-offs.

 

Deposits

 

 Average Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 7

 

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 ($ in thousands)

 

2Q
2011

 

1Q
2011

 

2Q
2010

 

2Q11 vs
1Q11

 

2Q11 vs
2Q10

 

YTD
2011

 

YTD
2010

 

Percent
Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Checking

 

$  4,570,543

 

$  4,501,931

 

$  4,529,356

 

  1.5%

 

    .9%

 

$  4,536,427

 

$  4,468,434

 

   1.5%

 

 Savings

 

    5,628,249

 

    5,444,381

 

    5,494,723

 

3.4

 

2.4

 

    5,536,823

 

    5,429,359

 

 2.0

 

 Money market

 

       648,862

 

       673,503

 

       660,654

 

(3.7)

 

(1.8)

 

       661,114

 

       664,595

 

  (.5)

 

Subtotal

 

  10,847,654

 

  10,619,815

 

  10,684,733

 

2.1

 

1.5

 

  10,734,364

 

  10,562,388

 

 1.6

 

 Certificates

 

    1,092,368

 

    1,092,537

 

    1,044,008

 

  -

 

4.6

 

    1,092,452

 

    1,085,349

 

  .7

 

Total deposits

 

$11,940,022

 

$11,712,352

 

$11,728,741

 

1.9

 

1.8

 

$11,826,816

 

$11,647,737

 

 1.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Total new checking accounts

 

       120,281

 

         97,459

 

       114,654

 

 23.4%

 

  4.9%

 

       217,740

 

       247,079

 

  (11.9)%

 

 Average interest rate on deposits

 

            .38%

 

           .42%

 

           .56%

 

 

 

 

 

            .40%

 

           .59%

 

 

 

 

·                  Total average deposits increased $211.3 million, or 1.8 percent, from the second quarter of 2010 primarily due to various targeted marketing campaigns as well as increases in checking account production and savings account balances. Average savings balances increased $133.5 million, or 2.4 percent, from the second quarter of 2010.  Total new checking accounts increased 4.9 percent from the second quarter of 2010. Total average deposits increased $227.7 million, or 1.9 percent from the first quarter of 2011, primarily due to increases in the number of savings accounts.

 

·                  The average interest cost of deposits in the second quarter of 2011 was .38 percent, down 18 basis points from the second quarter of 2010 and down 4 basis points from the first quarter of 2011.  Declines in the average interest cost of deposits were primarily due to pricing strategies on certain deposit products, mix changes and lower market interest rates.  The weighted average interest rate on deposits was .40 percent at June 30, 2011.

 

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Non-interest Expense

 

 Non-interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 8

 

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 ($ in thousands)

 

2Q
2011

 

1Q
2011

 

2Q
2010

 

2Q11 vs
1Q11

 

2Q11 vs
2Q10

 

YTD
2011

 

YTD
2010

 

Percent
Change

 

 Compensation and
employee benefits

 

$  89,997

 

$  90,273

 

$  86,983

 

     (.3)%

 

   3.5%

 

$180,270

 

$175,208

 

   2.9%

 

 Occupancy and equipment

 

     30,783

 

    32,159

 

    31,311

 

(4.3)

 

(1.7)

 

   62,942

 

    63,492

 

 (.9)

 

 FDIC insurance

 

       7,542

 

      7,195

 

      5,219

 

4.8

 

44.5 

 

   14,737

 

    10,700

 

37.7 

 

 Deposit account premiums

 

       6,166

 

      3,198

 

      5,478

 

92.8 

 

12.6 

 

     9,364

 

    12,276

 

(23.7) 

 

 Advertising and marketing

 

       3,479

 

      3,160

 

      3,734

 

10.1 

 

(6.8)

 

     6,639

 

      6,554

 

1.3

 

 Other

 

    37,067

 

    34,566

 

    35,053

 

7.2

 

5.7

 

   71,633

 

    69,463

 

3.1

 

Core operating expenses

 

  175,034

 

  170,551

 

  167,778

 

2.6

 

4.3

 

  345,585

 

  337,693

 

2.3

 

 Foreclosed real estate and
repossessed assets, net

 

    12,617

 

    12,868

 

      8,756

 

(2.0)

 

44.1 

 

   25,485

 

    18,016

 

41.5 

 

 Operating lease depreciation

 

       7,859

 

        7,928

 

      9,812

 

 (.9)

 

(19.9) 

 

   15,787

 

    19,852

 

(20.5) 

 

 Other credit costs, net

 

         496

 

        2,548

 

      2,723

 

(80.5)  

 

(81.8) 

 

     3,044

 

      5,310

 

(42.7) 

 

Total non-interest expense

 

$196,006

 

$193,895

 

$189,069

 

1.1 

 

3.7

 

$389,901

 

$380,871

 

2.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·                  Compensation and employee benefits expense in the second quarter of 2011 increased $3 million, or 3.5 percent, from the second quarter of 2010 and was relatively flat with the first quarter of 2011. The increase from the second quarter of 2010 was primarily due to production related compensation as a result of growth in the specialty finance business.

 

·                  FDIC insurance expense increased $2.3 million, or 44.5 percent, from the second quarter of 2010 and increased $347 thousand, or 4.8 percent, from the first quarter of 2011. The increases were primarily the result of changes in the FDIC insurance rate calculations for banks over $10 billion in total assets, which were implemented on April 1, 2011. As a result of the FDIC’s clarification of certain items in the new rate calculations, TCF now expects 2011 expense to be approximately $7 million higher than 2010.

 

·                  Deposit account premiums increased $688 thousand, or 12.6 percent, from the second quarter of 2010 and increased $3 million, or 92.8 percent, from the first quarter of 2011. The increase from the second quarter of 2010 was primarily due to changes in the account premium programs beginning in April 2011, which increased the premiums paid for each qualified account. The increase from the first quarter of 2011 was primarily due to increased production of checking accounts that qualified for premiums.

 

·                  Foreclosed real estate and repossessed asset expense increased $3.9 million, or 44.1 percent, from the second quarter of 2010 and decreased $251 thousand, or 2 percent, from the first quarter of 2011. The increase from the second quarter of 2010 was primarily due to an increase in the number of consumer real

 

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12

 

estate properties owned and the related expenses, continued valuation writedowns on both consumer and commercial real estate properties and increased property tax expenses. The decrease from the first quarter of 2011 was primarily due to a decrease in the number of consumer real estate properties owned and the associated expenses.

 

Capital and Borrowing Capacity

 

 Capital Information

 

 

 

Table 9    

 At period end

 

 

 

 

 

 ($ in thousands, except per-share data)

 

2Q
2011

 

4Q
2010

 

 Total equity

 

$ 1,769,645

 

 

 

$ 1,480,163

 

 

 

 Total equity to total assets

 

9.40

%

 

 

8.02

%

 

 

 Book value per common share

 

$        11.00

 

 

 

$        10.30

 

 

 

 Tangible realized common equity to tangible assets(1)

 

8.71

%

 

 

7.37

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Risk-based capital

 

 

 

 

 

 

 

 

 

Tier 1

 

$ 1,757,410

 

    12.72%  

 

$ 1,475,525

 

    10.59%  

 

Total

 

2,049,616

 

14.83

 

1,808,412

 

12.98

 

Excess over stated “10% well-capitalized” requirement

 

667,622

 

   4.83

 

415,502

 

   2.98

 

 

 

 

 

 

 

 

 

 

 

 Tier 1 common capital(2)

 

$ 1,629,030

 

    11.79%    

 

$ 1,352,025

 

      9.71%   

 

 

 

 

 

 

 

 

 

 

 

(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 June 30, 2011 of $2 billion, or 14.83 percent of risk-weighted assets, was $667.6 million in excess of the stated “10 percent well-capitalized” requirement.

 

·                  On July 18, 2011, the Board of Directors of TCF declared a regular quarterly cash dividend of five cents per common share payable on August 31, 2011 to stockholders of record at the close of business on July 29, 2011.

 

·                  At June 30, 2011, TCF had $1.8 billion in unused, secured borrowing capacity at the FHLB of Des Moines and $518 million in unused, secured borrowing capacity at the Federal Reserve Discount Window.

 

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Website Information

 

A live webcast of TCF’s conference call to discuss second quarter earnings will be hosted at TCF’s website, http://ir.tcfbank.com, on July 21, 2011 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 $18.8 billion in total assets. TCF has 439 branches 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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14

 

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 and Other Risks.  Deterioration in general economic and banking industry conditions, including defaults, anticipated defaults or rating agency downgrades of sovereign debt (including debt of the United States), or continued high rates of or 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 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; and 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; 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); deficiencies in TCF’s compliance under the Bank Secrecy Act in past or future periods, which may result in regulatory enforcement action including monetary penalties; increased health care costs resulting from 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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15

 

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. TCF assumes no obligation to update forward-looking information contained in this release as a result of new information or future events or developments.

 

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16

 

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per-share data)

(Unaudited)

 

 

 

Three Months Ended

 

 

 

 

 

 

 

June 30,

 

Change

 

 

 

2011

 

2010

 

$

 

%

 

Interest income:

 

 

 

 

 

 

 

 

 

Loans and leases

 

$

213,823

 

$

221,913

 

$

(8,090)

 

(3.6)

 %

Securities available for sale

 

20,639

 

21,065

 

(426)

 

(2.0)

 

Investments and other

 

1,836

 

1,236

 

600

 

48.5

 

Total interest income

 

236,298

 

244,214

 

(7,916)

 

(3.2)

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

 

11,430

 

16,281

 

(4,851)

 

(29.8)

 

Borrowings

 

48,718

 

51,434

 

(2,716)

 

(5.3)

 

Total interest expense

 

60,148

 

67,715

 

(7,567)

 

(11.2)

 

Net interest income

 

176,150

 

176,499

 

(349)

 

(.2)

 

Provision for credit losses

 

44,005

 

49,013

 

(5,008)

 

(10.2)

 

Net interest income after provision for

 

 

 

 

 

 

 

 

 

credit losses

 

132,145

 

127,486

 

4,659

 

3.7

 

Non-interest income:

 

 

 

 

 

 

 

 

 

Fees and service charges

 

56,396

 

77,845

 

(21,449)

 

(27.6)

 

Card revenue

 

28,219

 

28,591

 

(372)

 

(1.3)

 

ATM revenue

 

7,091

 

7,844

 

(753)

 

(9.6)

 

Subtotal

 

91,706

 

114,280

 

(22,574)

 

(19.8)

 

Leasing and equipment finance

 

22,279

 

20,528

 

1,751

 

8.5

 

Other

 

384

 

1,235

 

(851)

 

(68.9)

 

Fees and other revenue

 

114,369

 

136,043

 

(21,674)

 

(15.9)

 

Losses on securities

 

(227)

 

(137)

 

(90)

 

65.7

 

Total non-interest income

 

114,142

 

135,906

 

(21,764)

 

(16.0)

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

89,997

 

86,983

 

3,014

 

3.5

 

Occupancy and equipment

 

30,783

 

31,311

 

(528)

 

(1.7)

 

FDIC insurance

 

7,542

 

5,219

 

2,323

 

44.5

 

Deposit account premiums

 

6,166

 

5,478

 

688

 

12.6

 

Advertising and marketing

 

3,479

 

3,734

 

(255)

 

(6.8)

 

Other

 

37,067

 

35,053

 

2,014

 

5.7

 

Subtotal

 

175,034

 

167,778

 

7,256

 

4.3

 

Foreclosed real estate and repossessed assets, net

 

12,617

 

8,756

 

3,861

 

44.1

 

Operating lease depreciation

 

7,859

 

9,812

 

(1,953)

 

(19.9)

 

Other credit costs, net

 

496

 

2,723

 

(2,227)

 

(81.8)

 

Total non-interest expense

 

196,006

 

189,069

 

6,937

 

3.7

 

Income before income tax expense

 

50,281

 

74,323

 

(24,042)

 

(32.3)

 

Income tax expense

 

18,758

 

28,112

 

(9,354)

 

(33.3)

 

Income after income tax expense

 

31,523

 

46,211

 

(14,688)

 

(31.8)

 

Income attributable to non-controlling interest

 

1,686

 

1,186

 

500

 

42.2

 

Net income available to common stockholders

 

$

29,837

 

$

45,025

 

$

(15,188)

 

(33.7)

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

.19

 

$

.32

 

$

(.13)

 

(40.6)

 

Diluted

 

.19

 

.32

 

(.13)

 

(40.6)

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

$

.05

 

$

.05

 

$

-

 

-

 

 

 

 

 

 

 

 

 

 

 

Average common and common equivalent

 

 

 

 

 

 

 

 

 

shares outstanding (in thousands):

 

 

 

 

 

 

 

 

 

Basic

 

157,064

 

140,352

 

16,712

 

11.9

 

Diluted

 

157,463

 

140,633

 

16,830

 

12.0

 

 

 

 

 

 

 

 

 

 

 

 

-more-


 

17

 

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per-share data)

(Unaudited)

 

 

 

Six Months Ended

 

 

 

 

 

 

 

June 30,

 

Change

 

 

 

2011

 

2010

 

$

 

%

 

Interest income:

 

 

 

 

 

 

 

 

 

Loans and leases

 

$

428,496

 

$

443,177

 

$

(14,681)

 

(3.3)

 %

Securities available for sale

 

40,068

 

42,472

 

(2,404)

 

(5.7)

 

Investments and other

 

3,637

 

2,377

 

1,260

 

53.0

 

Total interest income

 

472,201

 

488,026

 

(15,825)

 

(3.2)

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

 

23,434

 

33,885

 

(10,451)

 

(30.8)

 

Borrowings

 

98,577

 

102,980

 

(4,403)

 

(4.3)

 

Total interest expense

 

122,011

 

136,865

 

(14,854)

 

(10.9)

 

Net interest income

 

350,190

 

351,161

 

(971)

 

(.3)

 

Provision for credit losses

 

89,279

 

99,504

 

(10,225)

 

(10.3)

 

Net interest income after provision for

 

 

 

 

 

 

 

 

 

credit losses

 

260,911

 

251,657

 

9,254

 

3.7

 

Non-interest income:

 

 

 

 

 

 

 

 

 

Fees and service charges

 

109,909

 

144,017

 

(34,108)

 

(23.7)

 

Card revenue

 

54,803

 

55,663

 

(860)

 

(1.5)

 

ATM revenue

 

13,796

 

14,866

 

(1,070)

 

(7.2)

 

Subtotal

 

178,508

 

214,546

 

(36,038)

 

(16.8)

 

Leasing and equipment finance

 

49,029

 

40,880

 

8,149

 

19.9

 

Other

 

1,078

 

3,690

 

(2,612)

 

(70.8)

 

Fees and other revenue

 

228,615

 

259,116

 

(30,501)

 

(11.8)

 

Losses on securities

 

(227)

 

(567)

 

340

 

(60.0)

 

Total non-interest income

 

228,388

 

258,549

 

(30,161)

 

(11.7)

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

180,270

 

175,208

 

5,062

 

2.9

 

Occupancy and equipment

 

62,942

 

63,492

 

(550)

 

(.9)

 

FDIC insurance

 

14,737

 

10,700

 

4,037

 

37.7

 

Deposit account premiums

 

9,364

 

12,276

 

(2,912)

 

(23.7)

 

Advertising and marketing

 

6,639

 

6,554

 

85

 

1.3

 

Other

 

71,633

 

69,463

 

2,170

 

3.1

 

Subtotal

 

345,585

 

337,693

 

7,892

 

2.3

 

Foreclosed real estate and repossessed assets, net

 

25,485

 

18,016

 

7,469

 

41.5

 

Operating lease depreciation

 

15,787

 

19,852

 

(4,065)

 

(20.5)

 

Other credit costs, net

 

3,044

 

5,310

 

(2,266)

 

(42.7)

 

Total non-interest expense

 

389,901

 

380,871

 

9,030

 

2.4

 

Income before income tax expense

 

99,398

 

129,335

 

(29,937)

 

(23.1)

 

Income tax expense

 

37,200