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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 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 second 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 July 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 second 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 July 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 July 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:      July 22, 2011

 

3

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

 

Exhibit 99.1

 

1.)

 

TCF Financial Corporation

2011 Second Quarter Investor Presentation

 

 

 

2.)                                  Corporate Profile

 

At June 30, 2011

 

·                  $18.8 billion national bank holding company headquartered in Minnesota

 

·                  31st largest publicly-traded U.S. based bank holding company by asset size

 

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

 

·                  25th largest U.S. branch network

 

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

 

·                  894 ATMs available free to TCF customers; 419 off-site

 

·                  14th largest issuer of Visa® Consumer debit cards

 

·                  12th largest issuer of Visa Small Business debit cards

 

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

 

·                  Total equity to total assets of  9.40%

 

·                  Tangible realized common equity of  8.71% 1

 

·                  65th consecutive quarter of profitability

 

Branch Summary

 

Minnesota

 

110

 

Illinois

 

199

 

Michigan

 

55

 

Colorado

 

36

 

Wisconsin

 

26

 

Arizona

 

7

 

Indiana

 

5

 

South Dakota

 

1

 

Total

 

439

 

 

Well-Diversified Loan Portfolio
($ millions)

 

 

 

12/31/00

 

% of Total

 

6/30/11

 

% of Total

 

 

 

 

 

 

 

 

 

 

 

Consumer Lending

 

$

5,909

 

69

%

$

7,056

 

48

%

Commercial Lending

 

1,782

 

21

 

3,614

 

25

 

Leasing

 

856

 

10

 

3,056

 

21

 

Inventory Finance

 

 

 

906

 

6

 

Total

 

$

8,547

 

100

%

$

14,632

 

100

%

 

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

 

 


 

3.)                                  What Makes TCF Different

 

At June 30, 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 894 free ATMs available

·                  TCF Free Online Banking

·                  TCF Free Mobile Banking

 

·                  Credit Quality

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

 

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

·                  Grew core deposits by $3.2 billion since December 31, 2008.  As of June 30, 2011, core deposits carried an average interest rate of .36%

·                  Increased nationally-oriented specialty finance businesses by $1.5 billion, or 59%, 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.)                                  The TCF Strategy

 

·                  Deposits and Fees

·                  Increase deposits through premium offers and customer-friendly products

·                  Introduction of innovative daily negative balance fee product

·                  Carefully analyze various debit card interchange mitigation strategies

 

·                  Asset Growth and Diversification

·                  Continue to grow the specialty finance businesses by taking advantage of marketplace opportunities

·                  Move asset portfolio mix toward a more equal diversification between consumer mortgages, commercial and specialty finance

 

·                  Credit Quality

·                  Credit culture produces relatively low credit costs

·                  Improve upon encouraging 2011 overall credit trends

 


 

6.)                                  Diversified Revenue Base

 

At June 30, 2011

 

Good Revenue Growth
($ millions)

 

 

 

12/07

 

12/08

 

12/09

 

12/10

 

6/11 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income

 

$

550

 

$

594

 

$

633

 

$

699

 

$

350

 

Non-interest Income

 

542

 

498

 

526

 

538

 

229

 

Total

 

$

1,092

 

$

1,092

 

$

1,159

 

$

1,237

 

$

579

 

 

Strong Net Interest Margin
(Percent)

 

 

 

2007

 

2008

 

2009

 

2010

 

2011

 

TCF, 4.02%

 

 

 

 

 

 

 

 

 

 

 

First Quarter

 

4.00

%

3.84

%

3.66

%

4.21

%

4.06

%

Second Quarter

 

4.02

 

4.00

 

3.80

 

4.19

 

4.02

 

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, 3.75% 2

 

 

 

 

 

 

 

 

 

 

 

First Quarter

 

3.66

%

3.61

%

3.49

%

3.71

%

3.75

%

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)

 

 

 

6/11

 

% of Total

 

 

 

 

 

 

 

Banking Fees and Service Charges

 

$

110

 

48

%

Card Revenue

 

55

 

24

 

Specialty Finance

 

50

 

22

 

ATM Revenue and Other

 

13

 

6

 

Total

 

$

228

 

100

%

 

1-Year Interest Rate GAP

 

 

 

At 6/30/10

 

At 6/30/11

 

Asset (Liability) Sensitive

 

 

.6

%

6.1

%

 

1   Year-to-date

2   QTD March 31, 2011

 


 

7.)                 Credit Trends
($ millions)

 

 

 

9/09

 

12/09

 

3/10

 

6/10

 

9/10

 

12/10

 

3/11

 

6/11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Performing Assets

 

$

363

 

$

402

 

$

407

 

$

448

 

$

506

 

$

486

 

$

461

 

$

458

 

Over 60-day Delinquencies 1

 

$

110

 

$

95

 

$

114

 

$

121

 

$

107

 

$

109

 

$

97

 

$

101

 

Net Charge-Offs

 

$

53

 

$

49

 

$

45

 

$

48

 

$

58

 

$

65

 

$

56

 

$

44

 

 

1   Excludes acquired portfolios

 


 

8.)                 Allowance for Loan & Lease Losses
($ millions)

 

 

 

12/07

 

12/08

 

12/09

 

12/10

 

6/11

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Loan & Lease Losses

 

$

80.9

 

$

172.4

 

$

244.5

 

$

265.8

 

$

255.5

 

Net Charge-Offs

 

.29%

 

.78%

 

1.34%

 

1.47%

 

1.35%

 1

 

 

 

 

 

 

 

 

 

 

 

 

Allowance as a % of
period end loans & leases:

 

.65%

 

1.29%

 

1.68%

 

1.80%

 

1.75%

 

Ratio of allowance to net charge-offs:

 

2.3X

 

1.7X

 

1.3X

 

1.2X

 

1.3X

 1

 

1   Annualized

 


 

9.)                 Capital Ratios - Holding Company
($ millions)

 

 

 

12/07

 

12/08

 

12/09

 

12/10

 

6/11

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Tier 1 Common Capital

 

$

964

 

$

999

 

$

1,042

 

$

1,352

 

$

1,629

 

Total Tier 1 Common Capital Ratio 1

 

8.28

%

8.05

%

7.65

%

9.71

%

11.79

%

 

At June 30, 2011

 

·      Other Capital Ratios

·      Total equity to total assets — 9.40%

 

·      Tangible realized common equity — 8.71% 2

 

·      Total risk-based capital — 14.83%

 

·      Tangible realized common equity has increased nine 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

 


 

10.)                           Strong Deposit Franchise
Quarterly Average Balances
($ millions)

 

 

 

12/07

 

12/08

 

12/09

 

12/10

 

6/11

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking

 

$

3,981

 

$

3,914

 

$

4,116

 

$

4,359

 

$

4,571

 

Savings

 

2,596

 

2,861

 

5,231

 

5,412

 

5,628

 

Money Market

 

598

 

625

 

672

 

644

 

649

 

Certificates of Deposit (CDs)

 

2,307

 

2,449

 

1,367

 

1,040

 

1,092

 

Total

 

$

9,482

 

$

9,849

 

$

11,386

 

$

11,455

 

$

11,940

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Rate 1:

 

2.29

%

1.51

%

.74

%

.46

%

.38

%

 

 

 

 

 

 

 

 

 

 

 

 

CDs as a % of total deposits:

 

24.3

%

24.9

%

12.0

%

9.1

%

9.1

%

 

1   Quarter-to-date (annualized)

 


 

11.)              Total New Checking Accounts

 

 

 

 

Retail focus on new low-cost, active,
revenue-producing checking accounts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6/10

 

9/10

 

12/10

 

3/11

 

6/11

 

 

 

 

 

 

 

 

 

 

 

 

 

Total New Checking Accounts

 

114,654

 

100,366

 

71,225

 

97,459

 

120,281

 

Deposit Account Premium Expense ($ millions)

 

$

5.5

 

$

3.3

 

$

1.7

 

$

3.2

 

$

6.2

 

 


 

 

12.)              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 Free Mobile Banking

·      Pilot of new checking account program in Michigan began in March 2011

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

·      Improved customer experience through program simplification and transparency

·      Plan to implement in all markets during the fourth quarter of 2011


 

13.)                           Wholesale Loan Growth 10%*
($ millions)

 

 

 

Diverse Products and Geographies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/07

 

12/08

 

12/09

 

12/10

 

6/11

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Lending

 

$

3,116

 

$

3,491

 

$

3,719

 

$

3,646

 

$

3,614

 

Leasing and Equipment Finance

 

2,104

 

2,486

 

3,071

 

3,155

 

3,056

 

Inventory Finance

 

 

5

 

469

 

792

 

906

 

Total

 

$

5,220

 

$

5,982

 

$

7,259

 

$

7,593

 

$

7,576

 

 

*   Five-year compound annual growth rate

 


 

14.)                           Leasing & Equipment Finance 1
($ millions)

 

 

 

12/07

 

12/08

 

12/09

 

12/10

 

6/11

 

 

 

 

 

 

 

 

 

 

 

 

 

Leasing and Equipment Finance

 

$

2,175

 

$

2,545

 

$

3,177

 

$

3,232

 

$

3,122

 

 

At June 30, 2011

 

·      13th largest bank-affiliated leasing company and 28th largest equipment finance/leasing company in the U.S.

 

·      Diverse equipment types

 

·                  21% specialty vehicles, 16% manufacturing, 14% medical, 11% construction

 

·      6.06% average yield

 

·      2011 year-to-date originations are up 12.9% from same 2010 period

 

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

 

·      Over 60-day delinquency rate .09% 2

 

·      Net charge-offs:

 

2011

 

2010

 

2009

 

 

 

.41% 3

 

1.00%

 

.97%

 

 

·      Uninstalled backlog of $420.6 million

 

·      Unguaranteed residuals of only $105.6 million, or 5.1% of leases

 

1   Includes operating leases ($66.4 million at June 30, 2011)

2   Excludes non-accrual loans and leases and acquired portfolios

3   Annualized

 

 


 

15.)                           TCF Inventory Finance
($ millions)

 

 

 

Strong Traction in Multiple

 

 

 

 

 

 

 

Origination Segments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/08

 

12/09

 

12/10

 

6/11

 

 

 

 

 

 

 

 

 

 

 

Lawn & Garden

 

$

 

$

347

 

$

442

 

$

590

 

PowerSports & Other

 

 

 

221

 

193

 

Electronics & Appliances

 

4

 

122

 

129

 

123

 

Total

 

$

4

 

$

469

 

$

792

 

$

906

 

 

At June 30, 2011

 

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

 

·      Experienced and seasoned management

 

·      Operates in the U.S. and Canada

 

·      262 employees

 

·      100% variable rate receivables

 

·      Average yield 7.11%

 

·      Net charge-offs:

 

2011

 

2010

 

 

 

 

 

.12% 1

 

.17%

 

 

 

 

·      Credit support from equipment manufacturers

 

·      Credit risk spread across more than 9,000 active dealers

 

1   Annualized

 


 

16.)                           Commercial Lending
($ millions)

 

 

 

Secured Lending Philosophy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/07

 

12/08

 

12/09

 

12/10

 

6/11

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Real Estate

 

$

2,558

 

$

2,984

 

$

3,269

 

$

3,328

 

$

3,310

 

Commercial Business

 

558

 

507

 

450

 

318

 

304

 

Total

 

$

3,116

 

$

3,491

 

$

3,719

 

$

3,646

 

$

3,614

 

 

At June 30, 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 — $304 million

 

·      Commercial highlights

·      5.52% average yield

·      85% fixed-rate, 15% variable-rate

·      Over 60-day delinquency rate .18% 1

·      Net charge-offs:

 

2011

 

2010

 

2009

 

 

 

1.13% 2

 

1.31%

 

1.24%

 

 

·      Approximately 99% of all commercial loans secured

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

 

1   Excludes non-accrual loans

2   Annualized

 


 

17.)                           Wholesale Banking 1 Credit Quality

($ millions)

 

 

 

12/10

 

3/11

 

6/11

 

Performing loans and leases:

 

 

 

 

 

 

 

Non-classified

 

$

6,950

 

$

7,061

 

$

6,959

 

Classified 2

 

396

 

446

 

413

 

Subtotal performing

 

7,346

 

7,507

 

7,372

 

60+ days delinquent and accruing 3

 

20

 

12

 

6

 

Accruing TDRs

 

49

 

17

 

27

 

Non-accrual loans and leases

 

178

 

164

 

171

 

Total loans and leases

 

$

7,593

 

$

7,700

 

$

7,576

 

Net charge-offs

 

$

27

 

$

21

 

$

6

 

 

1   Includes commercial banking and specialty finance

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

3   Excludes accruing TDRs that are 60+ days delinquent

 


 

18.)                           Consumer Real Estate

($ millions)

 

 

 

12/07

 

12/08

 

12/09

 

12/10

 

6/11

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed-rate

 

$

5,481

 

$

5,487

 

$

5,332

 

$

4,793

 

$

4,626

 

Variable-rate

 

1,570

 

1,815

 

1,949

 

2,363

 

2,392

 

Total

 

$

7,051

 

$

7,302

 

$

7,281

 

$

7,156

 

$

7,018

 

Balances of Loans Originated Since 1/1/09

 

 

 

$

 

$

857

 

$

1,442

 

$

1,640

 

 

At June 30, 2011

 

·                  74% first mortgage lien positions, average loan amount of $122,611

 

·                  26% junior lien positions, average loan amount of $40,527

 

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

 

·                  Average home value of $256,189 1

 

·                  Yields: 6.12% fixed-rate, 5.17% variable-rate

 

·                  Over 60-day delinquency rate of 1.34% 2

 

·      Net charge-offs:

 

2011

 

2010

 

2009

 

 

 

2.04% 3

 

1.80%

 

1.46%

 

·                  Average FICO score of the retail lending operation:

At origination - 726

Updated 2Q11 - 727

 

·                  82% of retail lending loans have never been delinquent

 

·                  23% of loan balance has been originated since January 1, 2009, with 2011 net charge-offs of .10% 3

 

1   Based on value at origination

2   Excludes non-accrual loans

3   Annualized

 


 

19.)                           Consumer Credit Quality

($ millions)

 

 

 

12/10

 

3/11

 

6/11

 

Performing loans

 

$

6,613

 

$

6,533

 

$

6,492

 

60+ days delinquent and accruing 1

 

77

 

67

 

69

 

Accruing TDRs

 

337

 

342

 

344

 

Non-accrual loans and leases

 

168

 

155

 

151

 

Total loans

 

$

7,195

 

$

7,097

 

$

7,056

 

Net charge-offs

 

$

38

 

$

35

 

$

37

 

 

1   Excludes accruing TDRs that are 60+ days delinquent and accruing

 


 

20.)                           Consumer Real Estate TDRs

 

·                  Loans modified to assist customers with their financial hardship by lowering their monthly loan payments

 

·                  At June 30, 2011, TCF held $343.6 million of modified consumer real estate loans that are considered TDRs and continue to accrue interest, a net increase of $1.6 million, or .5% from March 31, 2011 (lowest quarter-over-quarter growth rate since the program was announced in August 2009)

 

·                  Reserved for based on present value of expected cash flows - $44.5 million, or 12.9% at June 30, 2011

 

·                  The over 60-day delinquency rate was 6.8% at June 30, 2011, up slightly from 6.5% at March 31, 2011

 


 

21.)                           Loan & Lease Geographic Diversification

($000s)

 

At Jun. 30, 2011:

 

Consumer
Real Estate

and Other

 

Commercial
Real Estate

and Commercial
Business

 

Leasing and
Equipment

Finance

 

Inventory
Finance

 

Total

 

Minnesota

 

$

2,777,808

 

$

887,000

 

$

83,106

 

$

21,804

 

$

3,769,718

 

Illinois

 

2,147,840

 

864,317

 

99,589

 

29,164

 

3,140,910

 

Michigan

 

980,515

 

708,907

 

115,579

 

25,383

 

1,830,384

 

Wisconsin

 

460,486

 

588,148

 

55,082

 

27,942

 

1,131,658

 

Colorado

 

566,923

 

140,330

 

40,322

 

8,465

 

756,040

 

California

 

4,578

 

17,833

 

384,612

 

19,041

 

426,064

 

Texas

 

2,938

 

2,595

 

241,463

 

48,079

 

295,075

 

Florida

 

5,784

 

59,552

 

165,848

 

41,033

 

272,217

 

Ohio

 

3,223

 

53,981

 

131,551

 

41,801

 

230,556

 

Indiana

 

24,793

 

104,259

 

60,708

 

27,964

 

217,724

 

North Carolina

 

1,176

 

6,648

 

105,926

 

87,498

 

201,248

 

New York

 

4,060

 

505

 

164,225

 

31,533

 

200,323

 

Pennsylvania

 

112

 

 

135,639

 

40,215

 

175,966

 

Canada

 

 

 

4,450

 

164,732

 

169,182

 

Arizona

 

51,580

 

33,799

 

67,352

 

6,506

 

159,237

 

Other

 

23,934

 

146,521

 

1,200,426

 

284,762

 

1,655,643

 

Total

 

$

7,055,750

 

$

3,614,395

 

$

3,055,878

 

$

905,922

 

$

14,631,945

 

 


 

22.)                           Non-Accrual Loans & Leases

($ millions)

 

 

 

 

 

 

 

 

Down $23.6 million

in 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer 

 

Commercial

 

Leasing and

Equipment
Finance

 

Inventory
Finance

 

Total

 

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

 

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

 

Inflows

 

58.5

 

 

 

20.9

 

 

 

6.8

 

 

 

 

.8

 

 

 

 

87.0

 

Outflows

 

(62.8

)

 

 

(8.3

)

 

 

(11.7

)

 

 

 

(1.5

)

 

 

 

(84.3

)

Net Change

 

(4.3

)

 

 

12.6

 

 

 

(4.9

)

 

 

 

(.7

)

 

 

 

2.7

 

Balance at June 30, 2011

 

$

 150.9

 

 

$

140.4

 

 

$

29.7

 

 

 

$

.7

 

 

$

 

321.7

 

Net change since year-end

 

$

 (16.6

)

 

$

(1.9

)

 

$

(4.7

)

 

 

$

(.4

)

 

$

 

(23.6

)

 


 

23.)                           Summary of Non-Accrual Loans

($ millions)

 

At June 30, 2011:

 

Contractual
Balance

 

Charge-offs and
     Allowance     

Recorded

 

Net
Exposure

 

Impairment 1

 

 

 

 

 

 

 

 

 

 

 

Consumer

 

$

202.5

 

$

53.8

 

$

148.7

 

26.6

%

Commercial

 

199.5

 

75.7

 

123.8

 

37.9

 

Leasing and equipment finance

 

29.7

 

6.1

 

23.6

 

20.5

 

Inventory finance

 

.6

 

.1

 

.5

 

11.8

 

Total

 

$

432.3

 

$

135.7

 

$

296.6

 

31.4

 

 

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

 


 

24.)                           Summary of Real Estate Owned

($ millions)

 

At June 30, 2011:

 

 

 

Contractual Loan
Balance Prior to
Non-performing

Status

 

Charge-offs and
Writedowns

Recorded

 

Other Real Estate
Owned Balance

 

Impairment 1

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 

 

 

$

141.0

 

$

46.7

 

$

94.3

 

33.1

%

Commercial

 

 

 

63.2

 

21.0

 

42.2

 

33.2

 

Total

 

 

 

$

204.2

 

$

67.7

 

$

136.5

 

33.1

 

 

 

 

 

 

 

 

 

 

 

 

 

# of Properties:

 

6/10

 

9/10

 

12/10

 

3/11

 

6/11

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 

657

 

740

 

813

 

812

 

801

 

Commercial

 

41

 

33

 

31

 

29

 

29

 

Total

 

698

 

773

 

844

 

841

 

830

 

 

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

 


 

25.)                           Real Estate Owned

($ millions)

 

 

 

Good Activity Levels Related to Sales and
a Slowdown of Inflows

 

 

 

 

 

 

 

 

 

 

 

Consumer 

 

Commercial

 

Total

 

Balance at December 31, 2010

 

$

90.1

 

$

51.0

 

$

141.1

 

Inflows

 

33.1

 

2.4

 

35.5

1

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

 

Inflows

 

25.8

 

1.8

 

27.6

2

Outflows

 

(29.5

)

(3.8

)

(33.3

)

Net Change

 

(3.7

)

(2.0

)

(5.7

)

Balance at June 30, 2011

 

$

94.3

 

$

42.2

 

$

136.5

 

 

1                   Down 20.3% from 4Q10 inflows of $44.5 million

2                   Down 22.1% from 1Q11 inflows of $35.5 million, lowest since 3Q09

 


 

26.)                           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

 

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

 

·                  Strong capital position provides flexibility to grow by taking advantage of bank and/or specialty finance program acquisition opportunities

 

·                  Ability to take advantage of acquisition opportunities for established loan and lease programs in nationally-oriented specialty finance businesses through funding from TCF’s strong regional low-cost core deposits

 


 

27.)                           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.  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 (continued)

 


 

28.)                           Cautionary Statement (continued)

 

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.

 

* 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.

 


 

29.)                           Reconciliation of GAAP to Non-GAAP Measures - Tangible Realized Common Equity 1

($000s)

 

 

 

June 30, 2011

Computation of total equity to total assets:

 

 

 

Total equity

 

$

1,769,645

 

Total assets

 

$

18,834,443

 

Total equity to total assets

 

9.40

%

 

 

 

 

Computation of tangible realized common equity to tangible assets:

 

 

 

Total equity

 

$

1,769,645

 

Less: Non-controlling interest in subsidiaries

 

13,380

 

Total TCF stockholders’ equity

 

1,756,265

 

Less:

 

 

 

Goodwill

 

152,599

 

Other intangibles

 

1,146

 

Add:

 

 

 

Accumulated other comprehensive loss

 

23,823

 

Tangible realized common equity

 

$

1,626,343

 

 

 

 

 

Total assets

 

$

18,834,443

 

Less:

 

 

 

Goodwill

 

152,599

 

Other intangibles

 

1,146

 

Tangible assets

 

$

18,680,698

 

 

 

 

 

Tangible realized common equity to tangible assets

 

8.71

%

 

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.

 


 

30.)                           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

 

June 30, 2011

Total Tier 1 risk-based capital ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total tier 1 capital

 

$

964,467

 

 

$

1,461,973

 

 

$

1,161,750

 

 

$

1,475,525

 

 

$

1,757,410

 

Total risk-weighted assets

 

$

11,648,286

 

 

$

12,401,467

 

 

$

13,627,871

 

 

$

13,929,097

 

 

$

13,819,938

 

Total tier 1 risk-based capital ratio

 

8.28

%

 

11.79

%

 

8.52

%

 

10.59

%

 

12.72

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Computation of tier 1 common capital ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total tier 1 capital

 

$

964,467

 

 

$

1,461,973

 

 

$

1,161,750

 

 

$

1,475,525

 

 

$

1,757,410

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Qualifying trust preferred securities

 

 

 

115,000

 

 

115,000

 

 

115,000

 

 

115,000

 

Qualifying non-controlling interest in subsidiaries

 

 

 

 

 

4,393

 

 

8,500

 

 

13,380

 

Preferred stock

 

 

 

348,437

 

 

 

 

 

 

 

Total tier 1 common capital

 

$

964,467

 

 

$

998,536

 

 

$

1,042,357

 

 

$

1,352,025

 

 

$

1,629,030

 

Total risk-weighted assets

 

$

11,648,286

 

 

$

12,401,467

 

 

$

13,627,871

 

 

$

13,929,097

 

 

$

13,819,938

 

Total tier 1 common capital ratio

 

8.28

%

 

8.05

%

 

7.65

%

 

9.71

%

 

11.79

%

 

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.

 

 


 

31.)                           Source References & Footnotes    

 

Slide: Corporate Profile

31st largest publicly-traded U.S. based bank holding company - SNL Financial, LC; 3/31/2011

25th largest branch network - SNL Financial, LC; 2Q11

5th largest in campus card relationships - CR80News; June 2011

14th largest issuer of Visa Consumer - Visa; 1Q11; ranked by sales volume

12th largest issuer of Visa Small Business - Visa; 1Q11; ranked by sales volume        

13th largest bank-affiliated leasing company - The Monitor; 2011 Monitor Bank 40

 

Slide: Diversified Revenue Base

KBW Regional Banking Index net interest margin data - KBW & SNL Financial LC; 3/31/11

 

Slide: Leasing and Equipment Finance

13th largest bank-affiliated leasing company - The Monitor; 2011 Monitor Bank 40

28th largest equipment finance/leasing company - The Monitor; 2011 Monitor 100

 

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