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Section 1: 8-K (8-K)

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 8-K

 


 

CURRENT REPORT

 

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

 

Date of Report (Date of earliest event reported):  April 19, 2012

 


 

 

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 April 19, 2012, attached to this Form 8-K as Exhibit 99.1, announcing its results of operations for the quarter ended March 31, 2012.

 

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 April 19, 2012

 

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/ Michael S. Jones

 

Michael S. Jones, Executive Vice President and

 

Chief Financial Officer

 

(Principal Financial Officer)

 

 

 

 

 

 

 

/s/ David M. Stautz

 

David M. Stautz, Senior Vice President,

 

Controller and Managing Director of

 

Corporate Development

 

(Principal Accounting Officer)

 

Dated: April 19, 2012

 

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

 

Previously Announced Balance Sheet Repositioning Drives TCFs First Quarter 2012 Results

Total Loans and Leases up $1 billion in the first quarter

 

FIRST QUARTER HIGHLIGHTS

-

Net loss of $282.9 million or $1.78 per share

-

Balance sheet repositioned through reductions and refinance of long-term borrowings and sales of mortgage backed securities at a net loss of $295.8 million, or $1.87 per share

-

Total loans and leases of $15.2 billion, up 7.5 percent from $14.2 billion at December 31, 2011

-

Net interest margin of 4.14 percent, up 22 bps from the fourth quarter 2011

-

Total delinquent loans declined $18.5 million from December 31, 2011

-

Announced quarterly cash dividend of 5 cents per common share, payable May 31, 2012

 

 Summary of Financial Results

 

 

 

 

 

 

 

Table 1

 

 ($ in thousands, except per-share data)

 

 

 

 

 

 

 

Percent Change

 

 

 

1Q
2012

 

4Q
2011

 

1Q
2011

 

1Q 2012 vs
4Q 2011

 

1Q 2012 vs
1Q 2011

 

 Net (loss) income

 

$     (282,894

)

$        16,443

 

$        30,272

 

N.M.%

 

N.M.%

 

 Diluted earnings per common share

 

(1.78

)

.10

 

.21

 

N.M.   

 

N.M.   

 

 

 

 

 

 

 

 

 

 

 

 

 

 Financial Ratios(1)

 

 

 

 

 

 

 

 

 

 

 

 Return on average assets

 

(5.96

)%

.37

%

.68

%

 

 

 

 

 Return on average common equity

 

(63.38

)

3.55

 

8.00

 

 

 

 

 

 Net interest margin

 

4.14

 

3.92

 

4.06

 

 

 

 

 

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

 

1.06

 

1.63

 

1.51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (1) Annualized.

 

 

 

 

 

 

 

 

 

 

 

 N.M. = Not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 


 

2

 

WAYZATA, MN, April 19, 2012 – TCF Financial Corporation (“TCF”) (NYSE: TCB) today reported a net loss for the first quarter of 2012 of $282.9 million, or $1.78 per share, inclusive of a net, after-tax charge of $295.8 million, or $1.87 per share, related to repositioning certain investments and borrowings of TCF’s balance sheet.  TCF reported net income of $30.3 million, or 21 cents per share, in the first quarter of 2011 and $16.4 million, or 10 cents per share, in the fourth quarter of 2011.

 

TCF declared a quarterly cash dividend of 5 cents per common share payable on May 31, 2012 to stockholders of record at the close of business on April 27, 2012.

 

Chairman’s Statement

 

“TCF’s first quarter results were highlighted by significant loan and lease growth from our specialty finance businesses, along with the successful completion of the repositioning of our balance sheet,” said William A. Cooper, Chairman and Chief Executive Officer.  “While the balance sheet repositioning resulted in TCF’s first quarterly loss in 17 years, it was absolutely the right thing to do.  Through the elimination of much of the high-cost, long-term debt and the sale of lower yielding, long-term mortgage-backed securities that were significantly limiting our net interest margin, we increased the transparency for the market to see the true franchise value of TCF in future periods.

 

“The growth in loans and leases during the quarter was primarily in inventory finance and auto finance.  We are very excited about the growth potential of these businesses, especially in a time where many banks are struggling to find disciplined loan growth opportunities.  TCF’s emphasis over the past several years on diversification into additional secured lending-oriented national specialty finance platforms has become a major contributor to TCF’s value proposition.

 

“With the asset growth tailwind at our back and the elimination of the headwind related to our long-term borrowing costs, we can focus our efforts on growing revenue and continuing overall improvements in credit quality.  We look for our newly launched Choice Checking account product to positively impact both checking account generation and attrition.  Meanwhile, as the economy slowly improves and we continue to focus on our underperforming real estate loans, I am optimistic about our credit outlook for the second half of 2012.  While

 

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3

 

there are still challenges ahead, I am confident that the recent evolution of the bank has put TCF on the right path for success in today’s unique banking environment.”

 

 Total Revenue

 

 

 

 

 

 

 

 

 

Table 2

 

 

 

 

 

 

 

 

 

Percent Change

 

 ($ in thousands)

 

1Q
2012

 

4Q
2011

 

1Q
2011

 

1Q12 vs
4Q11

 

1Q12 vs
1Q11

 

 Net interest income

 

$         180,173

 

$         173,434

 

$         174,040

 

3.9 

%

3.5 

 Fees and other revenue:

 

 

 

 

 

 

 

 

 

 

 

 Fees and service charges

 

41,856

 

51,002

 

53,513

 

(17.9)

 

(21.8)

 

 Card revenue

 

13,207

 

13,643

 

26,584

 

(3.2)

 

(50.3)

 

 ATM revenue

 

6,199

 

6,608

 

6,705

 

(6.2)

 

(7.5)

 

 Total banking fees

 

61,262

 

71,253

 

86,802

 

(14.0)

 

(29.4)

 

 Leasing and equipment finance

 

22,867

 

18,492

 

26,750

 

23.7 

 

(14.5)

 

 Gains on sales of auto loans

 

2,250

 

1,133

 

-

 

98.6 

 

N.M.

 

 Other

 

2,355

 

1,570

 

694

 

50.0 

 

N.M.

 

 Total fees and other revenue

 

88,734

 

92,448

 

114,246

 

(4.0)

 

(22.3)

 

 Subtotal

 

268,907

 

265,882

 

288,286

 

1.1 

 

(6.7)

 

 Gains on securities, net

 

76,611

 

5,842

 

-

 

N.M.

 

N.M.

 

 

 

 

 

 

 

 

 

 

 

 

 

 Total revenue

 

$         345,518

 

$         271,724

 

$         288,286

 

27.2 

 

19.9 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Net interest margin(1)

 

4.14

 %

3.92

 %

4.06

 %

 

 

 

 

 Fees and other revenue as
a % of total revenue

 

25.68

 

34.02

 

39.63

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (1) Annualized.

 

 

 

 

 

 

 

 

 

 

 

 N.M. = Not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income

 

 

·

Net interest income for first quarter of 2012 increased $6.1 million, or 3.5 percent, compared with the first quarter of 2011. This increase is primarily due to lower average balances and cost of borrowings resulting from the balance sheet repositioning completed in March 2012, lower average borrowings due to 2011 debt maturities replaced with deposits, decreased rates on various deposit products and higher average loan and lease balances as a result of growth in the inventory finance and auto finance portfolios. These increases were partially offset by decreases in the consumer and commercial real estate portfolio balances and average yields. Net interest income for the first quarter of 2012 increased $6.7 million, or 3.9 percent, compared with the fourth quarter of 2011. This increase is primarily due to increased growth in the inventory finance portfolio, lower average cost of borrowings offset by lower mortgage-backed securities balances resulting from the balance sheet repositioning completed in March 2012, and growth in the auto finance portfolio. These increases were partially offset by decreases in the consumer and commercial real estate portfolio average balances and yields.

 

 

 

 

·

Net interest margin in the first quarter of 2012 was 4.14 percent, compared with 4.06 percent in the first

 

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4

 

 

 

quarter of 2011.  This increase is primarily due to lower average balance and cost of borrowings due to the effects of the balance sheet repositioning completed in March 2012, lower average borrowings due to 2011 debt maturities replaced with deposits, as well as decreased rates on various deposit products.  These increases were partially offset by a decrease in yields in the consumer, commercial, and leasing and equipment finance portfolios as a result of the lower interest rate environment. Net interest margin increased by 22 basis points from 3.92 percent in the fourth quarter of 2011.  This increase is primarily due to a lower average cost of borrowings due to the effects of the balance sheet repositioning completed in March 2012.  This increase was partially offset by decreased levels of higher yielding loans and leases in the consumer, commercial, and leasing and equipment finance portfolios as a result of the lower interest rate environment.

 

 

 

 

·

At March 31, 2012, interest-bearing deposits held at the Federal Reserve and unencumbered securities were $1.1 billion, an increase of $372 million from March 31, 2011 and a decrease of $319 million from December 31, 2011.

 

Non-interest Income

 

 

·

Banking fees and service charges in the first quarter of 2012 were $41.9 million, down $11.7 million, or 21.8 percent, from the first quarter of 2011 and down $9.1 million, or 17.9 percent, from the fourth quarter of 2011. The decrease in banking fees and revenues from the first quarter of 2011 was primarily due to changes in customer behaviors and increased levels of checking account attrition. The decrease from the fourth quarter of 2011 was primarily due to modifications to fee structures, seasonality, changes in customer behaviors and checking account attrition. Certain changes in checking account product design were implemented late in the first quarter, which management expects will have a meaningful impact on these revenues in the second quarter and beyond.

 

 

 

 

·

Card revenues were $13.2 million in the first quarter of 2012, a decrease of $13.4 million, or 50.3 percent, from the first quarter of 2011 and down $436 thousand, or 3.2 percent, from the fourth quarter of 2011. Compared with the first quarter of 2011, the average interchange rate per transaction decreased due to new debit card interchange regulations which took effect on October 1, 2011. The decrease in

 

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5

 

 

 

card revenue from the fourth quarter of 2011 was primarily due to lower seasonal transaction volume.

 

 

 

 

·

Leasing and equipment finance revenues were $22.9 million in the first quarter of 2012, down $3.9 million, or 14.5 percent, from the first quarter of 2011 and up $4.4 million, or 23.7 percent, from the fourth quarter of 2011. The changes from the prior periods were attributable to differing levels of customer-initiated lease activity.

 

 

 

 

·

TCF sold $72 million of auto loans and recognized $2.3 million in associated gains during the first quarter of 2012, compared with the sale of $37.4 million of auto loans and recognition of $1.1 million in associated gains during the fourth quarter of 2011.

 

Loans and Leases

 

 Period-End and Average Loans and Leases

 

 

 

 

 

 

 

 

 

Table 3

 

 

 

 

 

 

 

 

 

Percent Change

 

 ($ in thousands)

 

1Q
2012

 

4Q
2011

 

1Q
2011

 

1Q 2012
vs
4Q 2011

 

1Q 2012
vs
1Q 2011

 

 Period-End:

 

 

 

 

 

 

 

 

 

 

 

 Consumer real estate

 

$    6,815,909

 

$    6,895,291

 

$    7,062,035

 

(1.2)

%

(3.5)

 Commercial

 

3,467,089

 

3,449,492

 

3,608,356

 

.5 

 

(3.9)

 

 Leasing and equipment finance

 

3,118,755

 

3,142,259

 

3,079,966

 

(.7)

 

1.3 

 

 Inventory finance

 

1,637,958

 

624,700

 

1,011,044

 

162.2 

 

62.0 

 

 Auto finance

 

139,047

 

3,628

 

-

 

N.M.

 

N.M.

 

 Other

 

29,178

 

34,885

 

35,140

 

(16.4)

 

(17.0)

 

 Total

 

$  15,207,936

 

$  14,150,255

 

$  14,796,541

 

7.5 

 

2.8 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Average:

 

 

 

 

 

 

 

 

 

 

 

 Consumer real estate

 

$    6,845,063

 

$    6,933,051

 

$    7,101,959

 

(1.3)

 

(3.6)

 

 Commercial

 

3,457,720

 

3,476,660

 

3,623,463

 

(.5)

 

(4.6)

 

 Leasing and equipment finance

 

3,128,329

 

3,043,329

 

3,119,669

 

2.8 

 

.3 

 

 Inventory finance

 

1,145,183

 

766,885

 

872,785

 

49.3 

 

31.2 

 

 Auto finance

 

85,562

 

1,442

 

-

 

N.M.

 

N.M.

 

 Other

 

17,582

 

17,944

 

21,757

 

(2.0)

 

(19.2)

 

 Total

 

$  14,679,439

 

$  14,239,311

 

$  14,739,633

 

3.1 

 

(.4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 N.M. = Not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

 

·

Period end loans and leases were $15.2 billion at March 31, 2012, an increase of $411.4 million, or 2.8 percent, compared with March 31, 2011, and $1.1 billion, or 7.5 percent, compared with December 31, 2011. The increases in total loans and leases from March 31, 2011 and December 31, 2011 were primarily due to growth in the inventory finance and auto finance portfolios. The increase in the inventory finance portfolio, from the first quarter of 2011 was primarily due to the funding of dealers of Bombardier Recreational Products Inc. (“BRP”), a new program commencing on February 1, 2012. The

 

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6

 

 

 

increase from the fourth quarter of 2011 was primarily due to seasonal growth in the lawn and garden programs and the funding of BRP® dealers.  Auto finance loans are expected to grow throughout 2012 as Gateway One expands its sales force, the number of active dealers and the number of states in its network. Gateway One increased its portfolio of managed loans, including loans, loans held for sale, and loans sold and serviced for others, by 39.1 percent to $555.8 million at March 31, 2012 from $399.7 million at December 31, 2011. Gateway One expanded its active dealers to 4,452 at March 31, 2012, from 3,438 at December 31, 2011.

 

 

 

 

·

Average loans and leases were $14.7 billion at March 31, 2012, a decrease of $60.2 million, or .4 percent, compared with March 31, 2011, and an increase of $440.1 million, or 3.1 percent, compared with December 31, 2011. The decrease in average loans and leases from March 31, 2011 was primarily due to a decrease in the consumer real estate and commercial portfolios, offset by growth in the inventory finance, auto finance and leasing and equipment finance portfolios. The increase in average loans and leases from December 31, 2011 was primarily due to growth in the inventory finance, leasing and equipment finance and auto finance portfolios. The decreases in the average consumer real estate portfolios reflect a decline in production of new loans as marketplace rates available for fixed-rate loans are not as attractive to TCF. The increase in the average leasing and equipment finance portfolios from both periods was primarily due to growth in core market segments and an equipment finance portfolio acquisition in December 2011, partially offset by runoff of acquired portfolios. The increase in average inventory finance portfolios from the first quarter of 2011 was primarily due to the funding of dealers of BRP. The increase from the fourth quarter of 2011 was primarily due to seasonal growth in the lawn and garden programs and the funding of BRP dealers.

 

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7

 

Credit Quality

 

 

 

·

Non-performing assets and over 60-day delinquencies remained relatively flat and first quarter 2012 net charge-offs were at the lowest quarterly level over the last eight quarters.

 

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8

 

Credit Quality Summary of Performing and Underperforming Loans and Leases

 

Table 5

 

 

 

 

 

 

 

 

 

 

 

($ in thousands) 

 

Performing Loans and Leases(1)

 

60+ Days

 

 

 

 

 

 

 

 

 

 

 

Accruing

 

 

 

Delinquent and

 

Non-accrual

 

Total Loans

 

March 31, 2012

 

Non-classified

 

Classified(2)

 

TDRs(3)

 

Total

 

Accruing

 

Loans and Leases

 

and Leases

 

Consumer real estate

 

$

6,149,586

 

$

-

 

$

413,364

 

$

6,562,950

 

$

103,655

 

$

149,304

 

$

6,815,909

 

Commercial

 

3,011,101

 

207,691

 

109,195

 

3,327,987

 

3,425

 

135,677

 

3,467,089

 

Leasing and equipment finance

 

3,071,833

 

19,111

 

845

 

3,091,789

 

6,951

 

20,015

 

3,118,755

 

Inventory finance

 

1,630,126

 

6,538

 

-

 

1,636,664

 

185

 

1,109

 

1,637,958

 

Auto finance

 

138,879

 

-

 

-

 

138,879

 

168

 

-

 

139,047

 

Other

 

26,288

 

-

 

-

 

26,288

 

52

 

2,838

 

29,178

 

Total loans and leases

 

$

14,027,813

 

$

233,340

 

$

523,404

 

$

14,784,557

 

$

114,436

 

$

308,943

 

$

15,207,936

 

Percent of total loans and leases

 

92.3

%

1.5

%

3.4

%

97.2

%

.8

%

2.0

%

100.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in thousands)

 

Performing Loans and Leases(1)

 

60+ Days

 

 

 

 

 

 

 

 

 

 

 

Accruing

 

 

 

Delinquent and

 

Non-accrual

 

Total Loans

 

December 31, 2011

 

Non-classified

 

Classified(2)

 

TDRs(3)

 

Total

 

Accruing

 

Loans and Leases

 

and Leases

 

Consumer real estate

 

$

6,233,515

 

$

-

 

$

402,770

 

$

6,636,285

 

$

109,635

 

$

149,371

 

$

6,895,291

 

Commercial

 

2,987,876

 

234,501

 

98,448

 

3,320,825

 

1,148

 

127,519

 

3,449,492

 

Leasing and equipment finance

 

3,093,194

 

21,451

 

776

 

3,115,421

 

6,255

 

20,583

 

3,142,259

 

Inventory finance

 

616,677

 

7,040

 

-

 

623,717

 

160

 

823

 

624,700

 

Auto finance

 

3,231

 

-

 

-

 

3,231

 

397

 

-

 

3,628

 

Other

 

34,829

 

-

 

-

 

34,829

 

41

 

15

 

34,885

 

Total loans and leases

 

$

12,969,322

 

$

262,992

 

$

501,994

 

$

13,734,308

 

$

117,636

 

$

298,311

 

$

14,150,255

 

Percent of total loans and leases

 

91.7

%

1.9

%

3.5

%

97.1

%

.8

%

2.1

%

100.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in thousands)

 

Performing Loans and Leases(1)

 

60+ Days

 

 

 

 

 

 

 

 

 

 

 

Accruing

 

 

 

Delinquent and

 

Non-accrual

 

Total Loans

 

March 31, 2011

 

Non-classified

 

Classified(2)

 

TDRs(3)

 

Total

 

Accruing

 

Loans and Leases

 

and Leases

 

Consumer real estate

 

$

6,489,701

 

$

-

 

$

327,592

 

$

6,817,293

 

$

89,552

 

$

155,190

 

$

7,062,035

 

Commercial

 

3,053,296

 

398,524

 

26,927

 

3,478,747

 

1,864

 

127,745

 

3,608,356

 

Leasing and equipment finance

 

3,001,250

 

33,333

 

1,110

 

3,035,693

 

9,639

 

34,634

 

3,079,966

 

Inventory finance

 

1,005,837

 

3,496

 

-

 

1,009,333

 

274

 

1,437

 

1,011,044

 

Other

 

35,019

 

-

 

-

 

35,019

 

78

 

43

 

35,140

 

Total loans and leases

 

$

13,585,103

 

$

435,353

 

$

355,629

 

$

14,376,085

 

$

101,407

 

$

319,049

 

$

14,796,541

 

Percent of total loans and leases

 

91.8

%

2.9

%

2.4

%

97.1

%

.7

%

2.2

%

100.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes all loans and leases that are not 60+ days delinquent or on non-accrual status.

 

 

 

(2) Excludes classified loans and leases that are accruing TDRs and 60+ days delinquent.  “Classified” loans and leases are those for which management has concerns regarding the borrower’s ability to meet the existing terms and conditions, but may never become non-performing or result in a loss.

 

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

 

 

At March 31, 2012:

 

 

·

Performing loans and leases includes all loans and leases that are not over 60-days delinquent or on non-accrual status. Performing loans and leases were 97.2 percent of total loans and leases at March 31, 2012, a slight increase from 97.1 percent at December 31, 2011. The increase was due to the growth of high credit quality inventory finance loans.

 

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9

 

·

The over 60-day delinquency rate was .77 percent, down from .85 percent at December 31, 2011 and up from .7 percent at March 31, 2011. The decrease from the fourth quarter of 2011 was primarily due to growth in the overall inventory finance portfolio and, to a lesser extent, decreases in consumer real estate junior lien delinquencies.

 

 

·

Non-accrual loans and leases were $308.9 million at March 31, 2012, an increase of $10.6 million, or 3.6 percent, from December 31, 2011 and a decrease of $10.1 million, or 3.2 percent, from March 31, 2011. The increase from December 31, 2011 was primarily due to a $15.2 million increase in commercial real estate non-accrual loans, partially offset by a $7 million decrease in commercial business non-accrual loans. The decrease from March 31, 2011 was primarily due to a $14.6 million decrease in leasing and equipment finance non-accrual loans and leases as a result of fewer loans and leases entering non-accrual status, partially offset by an increase in commercial real estate non-accruals.

 

 

·

Other real estate owned was $127.2 million at March 31, 2012, a decrease of $7.7 million from December 31, 2011 and a decrease of $14.9 million from March 31, 2011. The decrease from December 31, 2011 was primarily due to decreased transfers of commercial real estate loans from non-accrual status. The decrease from March 31, 2011 was primarily due to a decrease in the number of consumer properties owned.

 

 

·

Consumer real estate TDRs include loans where a payment modification (but not a reduction of principal) has been granted to a residential real estate customer. Accruing consumer real estate TDRs totaled $445 million at March 31, 2012, and had been in that status for an average of 15 months. These loans had a weighted average yield of 3.7 percent, were reserved at 13.5 percent and 7.1 percent were over 60-days delinquent.

 

 

·

At March 31, 2012, approximately 56 percent of the accruing consumer real estate TDRs were permanent modifications and 4.1 percent of the accruing permanent modifications were over 60-days delinquent.

 

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10

 

·

Commercial TDRs include loans where a payment or other modification (but not a reduction of principal) has been granted. Accruing commercial TDRs had a weighted average yield of 5.4 percent and .63 percent were over 60-days delinquent at March 31, 2012.

 

Allowance for Loan and Lease Losses

 

Credit Quality Summary 

 

 

 

 

 

 

 

 

 

Table 6

 

($ in thousands) 

 

 

 

 

 

 

 

Percent Change

 

 

 

1Q

 

4Q

 

1Q

 

1Q 2012 vs

 

1Q 2012 vs

 

Allowance for Loan and Lease Losses 

 

2012

 

2011

 

2011

 

4Q 2011

 

1Q 2011

 

Balance at beginning of period

 

$

255,672

 

$

254,325

 

$

265,819

 

.5

 %

(3.8

)%

Charge-offs

 

(44,675

)

(62,973

)

(61,105

)

(29.1

)

(26.9

)

Recoveries

 

5,742

 

5,051

 

5,293

 

13.7

 

8.5

 

Net charge-offs

 

38,933

 

57,922

 

55,812

 

(32.8

)

(30.2

)

Provision for credit losses

 

48,542

 

59,249

 

45,274

 

(18.1

)

7.2

 

Other

 

12

 

20

 

27

 

(40.0

)

(55.6

)

Balance at end of period

 

$

265,293

 

$

255,672

 

$

255,308

 

3.8

 

3.9

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs as a percentage of

 

 

 

 

 

 

 

 

 

 

 

average loans and leases(1)

 

 

 

 

 

 

 

 

 

 

 

Consumer real estate

 

 

 

 

 

 

 

 

 

 

 

First mortgage lien

 

1.66

 %

1.94

 %

1.81

 %

(28

) bps

(15

) bps

Junior lien

 

3.03

 

2.63

 

2.39

 

40

 

64

 

Total consumer real estate

 

2.09

 

2.15

 

1.99

 

(6

)

10

 

Commercial

 

.18

 

1.79

 

1.96

 

(161

)

(178

)

Leasing and equipment finance

 

.02

 

.46

 

.36

 

(44

)

(34

)

Inventory finance

 

.22

 

.03

 

.10

 

19

 

12

 

Auto finance

 

.01

 

-

 

-

 

1

 

1

 

Other

 

N.M

.

N.M

.

N.M

.

N.M

.

N.M

.

Total

 

1.06

 

1.63

 

1.51

 

(57

)

(45

)

 

 

 

 

 

 

 

 

 

 

 

 

Allowance as a percentage of period
end loans and leases

 

1.74

 %

1.81

 %

1.73

 %

 

 

 

 

Ratio of allowance to net charge-offs(1)

 

1.70

 X

1.10

 X

1.10

 X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

N.M. = Not meaningful.

 

 

 

 

 

 

 

 

 

 

 

(1) Annualized.

 

 

 

 

 

 

 

 

 

 

 

 

At March 31, 2012:

 

 

·

Allowance for loan and lease losses was $265.3 million, or 1.74 percent of loans and leases, an increase of $10 million compared with $255.7 million, or 1.81 percent, at December 31, 2011 and $255.3 million, or 1.73 percent, at March 31, 2011.

 

For the quarter ended March 31, 2012:

 

 

·

Provision for credit losses was $48.5 million, a decrease of $10.7 million from $59.2 million recorded in the fourth quarter of 2011 and an increase from $45.3 million in the first quarter of 2011. The decrease from the fourth quarter of 2011 was primarily due to decreased net charge-offs in the commercial

 

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11

 

 

 

portfolio and decreased provision expense on consumer real estate TDRs, as fewer loans were modified in the first quarter of 2012 compared with the fourth quarter of 2011. The increase from the first quarter of 2011 was primarily due to increased reserves on the inventory finance portfolio as a result of increased loan balances.

 

 

 

 

·

Net loan and lease charge-offs were $38.9 million, or 1.06 percent, annualized, of average loans and leases, down $19 million from $57.9 million, or 1.63 percent, annualized, in the fourth quarter of 2011 and down from $55.8 million, or 1.51 percent, annualized, in the first quarter of 2011. The decrease from both the first quarter and the fourth quarter of 2011 was primarily due to decreases in net charge-offs in commercial real estate and leasing and equipment finance.

 

Deposits

 

Average Deposits

 

 

 

 

 

 

 

Table 7

 

 

 

 

 

 

 

 

 

Percent Change

 

($ in thousands) 

 

1Q

 

4Q

 

1Q

 

1Q 2012
vs

 

1Q 2012
vs

 

 

 

2012

 

2011

 

2011

 

4Q 2011

 

1Q 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking

 

$

4,565,065

 

$

4,449,640

 

$

4,501,931

 

2.6

%

1.4

%

Savings

 

5,905,118

 

5,878,392

 

5,444,381

 

.5

 

8.5

 

Money market

 

662,493

 

662,024

 

673,503

 

.1

 

(1.6

)

Subtotal

 

11,132,676

 

10,990,056

 

10,619,815

 

1.3

 

4.8

 

Certificates

 

1,135,673

 

1,112,735

 

1,092,537

 

2.1

 

3.9

 

  Total deposits

 

$

12,268,349

 

$

12,102,791

 

$

11,712,352

 

1.4

 

4.8

 

 

 

 

 

 

 

 

 

 

 

 

 

Total new checking accounts

 

97,719

 

94,321

 

97,459

 

3.6

 

.27

 

Average interest rate on deposits(1)

 

.30

 %

.32

 %

.42

 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Annualized.

 

 

 

 

 

 

 

 

 

 

 

 

 

·

Total average deposits increased $165.6 million, or 1.4 percent, from the fourth quarter of 2011 primarily due to increases in the average balances of checking accounts. Total average deposits increased $556 million, or 4.8 percent, from the first quarter of 2011 primarily due to an increase in the average balance of savings accounts.

 

 

 

 

·

The average interest cost of deposits in the first quarter of 2012 was .30 percent, down 2 basis points from the fourth quarter of 2011 and down 12 basis points from the first quarter of 2011. The decrease

 

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12

 

 

 

from both periods was primarily due to pricing strategies on certain deposit products. The weighted average interest rate on deposits was .29 percent at March 31, 2012.

 

Non-interest Expense

 

Non-interest Expense

 

 

 

 

 

 

 

 

 

Table 8

 

 

 

 

 

 

 

 

 

Percent Change

 

($ in thousands)

 

1Q

 

4Q

 

1Q

 

1Q 2012 vs

 

1Q 2012 vs

 

 

 

2012

 

2011

 

2011

 

4Q 2011

 

1Q 2011

 

Compensation and

 

 

 

 

 

 

 

 

 

 

 

employee benefits

 

  $

 95,967

 

$

82,595

 

$

89,357

 

16.2

 %

7.4

 %  

Occupancy and equipment

 

32,246

 

32,366

 

32,159

 

(.4

)

.3

 

FDIC insurance

 

6,386

 

6,647

 

7,195

 

(3.9

)

(11.2

)

Deposit account premiums

 

5,971

 

6,482

 

3,198

 

(7.9

)

86.7

 

Advertising and marketing

 

2,617

 

2,250

 

3,160

 

16.3

 

(17.2

)

Other

 

37,296

 

39,148

 

34,566

 

(4.7

)

7.9

 

Core operating expenses

 

180,483

 

169,488

 

169,635

 

6.5

 

6.4

 

Loss on termination of debt

 

550,735

 

-

 

-

 

100.0

 

100.0

 

Foreclosed real estate and

 

 

 

 

 

 

 

 

 

 

 

repossessed assets, net

 

11,047

 

11,323

 

12,868

 

(2.4

)

(14.2

)

Operating lease depreciation

 

6,731

 

6,811

 

7,928

 

(1.2

)

(15.1

)

Other credit costs, net

 

(288

)

(89

)

2,548

 

N.M

.

N.M

.

Total non-interest expense

 

  $

 748,708

 

$

187,533

 

$

192,979

 

N.M

.

N.M

.

 

 

 

 

 

 

 

 

 

 

 

 

N.M. = Not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

 

·

Compensation and employee benefits expense increased $6.6 million, or 7.4 percent, from the first quarter of 2011 and increased $13.4 million, or 16.2 percent, from the fourth quarter of 2011. The increase from the first quarter of 2011 was primarily due to the newly acquired auto finance business as well as increased headcount related to achieving staffing levels for increased assets in the BRP program in Inventory Finance. The increase from the fourth quarter of 2011 was primarily due to $4.4 million of net gains recognized on the annual re-measurement of retirement benefit plan assets and liabilities during the fourth quarter of 2011, the newly acquired auto finance business as it ramps up capacity to originate loans and service higher loan volumes and higher seasonal payroll tax expenses in the first quarter of 2012.

 

 

 

 

·

FDIC insurance expense decreased $809 thousand, or 11.2 percent, from the first quarter of 2011 and decreased $261 thousand, or 3.9 percent, from the fourth quarter of 2011. The decrease from the first quarter of 2011 was primarily due to the balance sheet repositioning during March of 2012 which resulted in a lower assessment base and changes in the FDIC insurance rate calculation for banks over

 

-more-


 

13

 

 

 

$10 billion in assets, which were implemented on April 1, 2011. The decrease from the fourth quarter of 2011 was primarily due to the balance sheet repositioning during March of 2012 which resulted in a lower assessment base.

 

 

 

 

·

Deposit account premiums increased $2.8 million, or 86.7 percent, from the first quarter of 2011 and decreased $511 thousand, or 7.9 percent, from the fourth quarter of 2011. The increase from the first quarter of 2011 was primarily due to changes in the account premium programs, beginning in April 2011, resulting in increased premiums paid to qualifying accounts. The decrease from the fourth quarter of 2011 was primarily due to a decrease in the production of accounts that qualified for premiums despite an overall increase in account production.

 

 

 

 

·

Other non-interest expense increased $2.7 million, or 7.9 percent, from the first quarter of 2011 and decreased $1.9 million, or 4.7 percent, from the fourth quarter of 2011. The increase from the first quarter of 2011 was primarily due to an increase in expenses incurred as a result of the transfer of certain bank operations to South Dakota during the first quarter of 2012. The decrease from the fourth quarter of 2011 was primarily due to transaction costs related to the acquisition of Gateway One that were incurred during the fourth quarter of 2011.

 

 

 

 

·

As previously disclosed, during March of 2012, TCF restructured $3.6 billion of long-term borrowings that had a 4.3 percent weighted average rate and recognized a pre-tax loss of $551 million. TCF replaced $2.1 billion of 4.4 percent weighted average fixed-rate, Federal Home Loan Bank advances with a mix of floating and fixed-rate borrowings with a current weighted average rate of .5 percent. In addition, TCF terminated $1.5 billion of 4.2 percent weighted average fixed-rate borrowings under repurchase agreements. Related to these transactions, TCF sold $1.9 billion of mortgage backed securities and recognized a pre-tax gain of $77 million.

 

 

 

 

·

Foreclosed real estate and repossessed asset expense decreased $1.8 million, or 14.2 percent, from the first quarter of 2011 and decreased $276 thousand, or 2.4 percent, from the fourth quarter of 2011. The decrease from the first quarter of 2011 was primarily due to reduced writedowns on consumer real estate

 

-more-


 

14

 

 

 

properties as a result of a decrease in the number of properties owned. The decrease from the fourth quarter of 2011 was primarily due to reduced writedowns on consumer real estate properties owned, partially offset by increased property tax expenses on consumer real estate and commercial real estate properties owned.

 

Capital and Borrowing Capacity

 

Capital Information

 

 

 

 

 

 

 

Table 9

 

At period end

 

 

 

 

 

 

 

 

 

($ in thousands, except per-share data)

 

1Q

 

4Q

 

 

 

2012

 

2011

 

Total equity

 

$

1,549,325

 

 

 

$

1,878,627

 

 

 

Total equity to total assets

 

8.69

 %

 

 

9.90

 %

 

 

Book value per common share

 

$

9.44

 

 

 

$

11.65

 

 

 

Tangible realized common equity to tangible assets(1)

 

7.36

 %

 

 

8.42

 %

 

 

 

 

 

 

 

 

 

 

 

 

Risk-based capital

 

 

 

 

 

 

 

 

 

Tier 1

 

$

1,431,565

 

9.97

 %

$

1,706,926

 

12.67

 %

Total

 

1,705,518

 

11.88

 

1,994,875

 

14.80

 

Excess over 10%(2)

 

269,779

 

1.88

 

647,342

 

4.80

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Leverage Capital

 

$

1,431,565

 

7.68

 %

$

1,706,926

 

9.15

 %

 

 

 

 

 

 

 

 

 

 

Tier 1 common capital(3)

 

$

1,298,259

 

9.04

 %

$

1,581,432

 

11.74

 %

 

 

 

 

 

 

 

 

 

 

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

 

(2) The well-capitalized requirements are determined by the Federal Reserve for TCF pursuant to the FDIC Improvement Act of 1991.

 

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

 

 

 

·

Changes in capital ratios since December 31, 2011 are primarily the result of the balance sheet repositioning completed during March 2012, offset by earnings from operations in the quarter. TCF continues to exceed the 10 percent “well-capitalized” requirement.

 

 

 

 

·

On April 16, 2012, the Board of Directors of TCF declared a regular quarterly cash dividend of 5 cents per common share payable on May 31, 2012 to stockholders of record at the close of business on April 27, 2012.

 

 

 

 

·

At March 31, 2012, TCF had $2.8 billion in unused, secured borrowing capacity at the FHLB of Des Moines and $530 million in unused, secured borrowing capacity at the Federal Reserve Discount Window.

 

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15

 

Website Information

 

A live webcast of TCF’s conference call to discuss the first quarter earnings will be hosted at TCF’s website, http://ir.tcfbank.com, on April 19, 2012 at 10:00 a.m. CT.  Additionally, the webcast will be 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, investor presentations and SEC filings.

 


 

TCF is a Wayzata, Minnesota-based national bank holding company with $17.8 billion in total assets at March 31, 2012. TCF has over 430 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 and leverage lending in all 50 states, commercial inventory finance business in the U.S. and Canada, and indirect auto finance business in over 30 states. For more information about TCF, please visit http://ir.tcfbank.com.

 


 

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16

 

Cautionary Statements for Purposes of the Safe Harbor Provisions of the Securities Litigation Reform Act

 

Any statements contained in this earnings release regarding the outlook for the Company’s businesses and their respective markets, such as projections of future performance, guidance, statements of the Company’s plans and objectives, forecasts of market trends and other matters, are forward-looking statements based on the Company’s assumptions and beliefs. Such statements may be identified by such words or phrases as “will likely result,” “are expected to,” “will continue,” “outlook,” “will benefit,” “is anticipated,” “estimate,” “project,” “management believes” or similar expressions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those discussed in such statements and no assurance can be given that the results in any forward-looking statement will be achieved. For these statements, TCF claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Any forward-looking statement speaks only as of the date on which it is made, and we disclaim any obligation to subsequently revise any forward-looking statement to reflect events or circumstances after such date or to reflect the occurrence of anticipated or unanticipated events.

 

Certain factors could cause the Company’s future results to differ materially from those expressed or implied in any forward-looking statements contained in this release.  These factors include the factors discussed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 under the heading “Risk Factors,” the factors discussed below and any other cautionary statements, written or oral, which may be made or referred to in connection with any such forward-looking statements. Since it is not possible to foresee all such factors, these factors should not be considered as complete or exhaustive.

 

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 U.S.), 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 quality 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; foreign currency exchange risks; counterparty risk, including the risk of defaults by our counterparties or diminished availability of counterparties who satisfy our credit quality requirements; decreases in demand for the types of equipment that TCF leases or finances; limitations on TCF’s ability to attract and retain manufacturers and dealers to expand the inventory finance business.

 

Legislative and Regulatory Requirements  New consumer protection and supervisory requirements and regulations, including those resulting from action by the CFPB and changes in the scope of Federal preemption of 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; 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; 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.

 

Earnings/Capital Risks and Constraints, Liquidity Risks  Limitations on TCF’s ability to pay dividends or to increase dividends 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 (including those resulting from U.S. implementation of Basel III requirements); adverse changes in

 

-more-


 

17

 

securities markets directly or indirectly affecting TCF’s ability to sell assets or to fund its operations; diminished unsecured borrowing capacity resulting from TCF credit rating downgrades and unfavorable conditions in the credit markets that restrict or limit various funding sources; costs associated with new regulatory requirements or interpretive guidance relating to liquidity; uncertainties relating to customer opt-in preferences with respect to overdraft fees on point of sale and ATM transactions which may have an adverse impact on TCF’s fee revenue; uncertainties relating to future retail deposit account changes, including limitations on TCF’s ability to predict customer behavior and the impact on TCF’s fee revenues.

 

Competitive Conditions; Supermarket Branching Risk; Growth Risks  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; customers completing financial transactions without using a bank; the effect of any negative publicity; slower than anticipated growth in existing or acquired businesses; inability to successfully execute on TCF’s growth strategy through acquisitions or cross-selling opportunities; failure to expand or diversify our balance sheet through programs or new opportunities; failure to successfully attract and retain new customers; product additions and addition of distribution channels (or entry into new markets) for existing products.

 

Technological and Operational Matters  Technological or operational difficulties, loss or theft of information, counterparty failures and the possibility that deposit account losses (fraudulent checks, etc.) may increase; failure to keep pace with technological change.

 

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. and potential reductions in card revenues resulting from such litigation or other litigation against Visa.

 

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; ineffective internal controls; adverse state or Federal tax assessments or findings in tax audits; lack of or inadequate insurance coverage for claims against TCF; potential for claims and legal action related to TCF’s fiduciary responsibilities.

 

-more-

 


 

18

 

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands, except per-share data)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

Change

 

 

 

2012

 

2011

 

$

 

%

 

Interest income:

 

 

 

 

 

 

 

 

 

Loans and leases

 

$

205,984

 

$

214,673

 

$

(8,689)

 

(4.0)

%

Securities available for sale

 

19,112

 

19,429

 

(317)

 

(1.6)

 

Investments and other

 

2,433

 

1,801

 

632

 

35.1

 

Total interest income

 

227,529

 

235,903

 

(8,374)

 

(3.5)

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

 

9,061

 

12,004

 

(2,943)

 

(24.5)

 

Borrowings

 

38,295

 

49,859

 

(11,564)

 

(23.2)

 

Total interest expense

 

47,356

 

61,863

 

(14,507)

 

(23.5)

 

Net interest income

 

180,173

 

174,040

 

6,133

 

3.5

 

Provision for credit losses

 

48,542

 

45,274

 

3,268

 

7.2

 

Net interest income after provision for

 

 

 

 

 

 

 

 

 

credit losses

 

131,631

 

128,766

 

2,865

 

2.2

 

Non-interest income:

 

 

 

 

 

 

 

 

 

Fees and service charges

 

41,856

 

53,513

 

(11,657)

 

(21.8)

 

Card revenue

 

13,207

 

26,584

 

(13,377)

 

(50.3)

 

ATM revenue

 

6,199

 

6,705

 

(506)

 

(7.5)

 

Subtotal

 

61,262

 

86,802

 

(25,540)

 

(29.4)

 

Leasing and equipment finance

 

22,867

 

26,750

 

(3,883)

 

(14.5)

 

Gains on sales of auto loans

 

2,250

 

-

 

2,250

 

N.M.

 

Other

 

2,355

 

694

 

1,661

 

N.M.

 

Fees and other revenue

 

88,734

 

114,246

 

(25,512)

 

(22.3)

 

Gains on securities, net

 

76,611

 

-

 

76,611

 

N.M.

 

Total non-interest income

 

165,345

 

114,246

 

51,099

 

44.7

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

95,967

 

89,357

 

6,610

 

7.4

 

Occupancy and equipment

 

32,246

 

32,159

 

87

 

.3

 

FDIC insurance

 

6,386

 

7,195

 

(809)

 

(11.2)

 

Deposit account premiums

 

5,971

 

3,198

 

2,773

 

86.7

 

Advertising and marketing

 

2,617

 

3,160

 

(543)

 

(17.2)

 

Other

 

37,296

 

34,566

 

2,730

 

7.9

 

Subtotal

 

180,483

 

169,635

 

10,848

 

6.4

 

Loss on termination of debt

 

550,735

 

-

 

550,735

 

N.M.

 

Foreclosed real estate and repossessed assets, net

 

11,047

 

12,868

 

(1,821)

 

(14.2)

 

Operating lease depreciation

 

6,731

 

7,928

 

(1,197)

 

(15.1)

 

Other credit costs, net

 

(288)

 

2,548

 

(2,836)

 

(111.3)

 

Total non-interest expense

 

748,708

 

192,979

 

555,729

 

N.M.

 

(Loss) income before income tax expense

 

(451,732)

 

50,033

 

(501,765)

 

N.M.

 

Income tax (benefit) expense

 

(170,244)

 

18,772

 

(189,016)

 

N.M.

 

(Loss) income after income tax expense

 

(281,488)

 

31,261

 

(312,749)

 

N.M.

 

Income attributable to non-controlling interest

 

1,406

 

989

 

417

 

42.2

 

Net (loss) income available to common stockholders

 

$

(282,894)

 

$

30,272

 

$

(313,166)

 

N.M.

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

Reclassification adjustment for securities gains

 

 

 

 

 

 

 

 

 

included in net income

 

(76,967)

 

-

 

(76,967)

 

N.M.

 

Unrealized holding losses arising during the

 

 

 

 

 

 

 

 

 

period on securities available for sale

 

(7,768)

 

(21,070)

 

13,302

 

(63.1)

 

Foreign currency hedge

 

(404)

 

(507)

 

103

 

(20.3)

 

Foreign currency translation adjustment

 

385

 

414

 

(29)

 

(7.0)

 

Recognized postretirement prior service cost

 

 

 

 

 

 

 

 

 

and transition obligation

 

(7)

 

1

 

(8)

 

N.M.

 

Income tax benefit

 

31,208

 

7,904

 

23,304

 

N.M.

 

Total other comprehensive loss

 

(53,553)

 

(13,258)

 

(40,295)

 

N.M.

 

Comprehensive (loss) income

 

$

(336,447)

 

$

17,014

 

$

(353,461)

 

N.M.

 

Net (loss) income per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

(1.78)

 

$

.21

 

$

(1.99)

 

N.M.

 

Diluted

 

(1.78)

 

.21

 

(1.99)

 

N.M.

 

Dividends declared per common share

 

$

.05

 

$

.05

 

$

-

 

-

 

 

 

 

 

 

 

 

 

 

 

Average common and common equivalent

 

 

 

 

 

 

 

 

 

shares outstanding (in thousands):

 

 

 

 

 

 

 

 

 

Basic

 

158,506

 

144,395

 

14,112

 

9.8

 

Diluted

 

158,506

 

144,739

 

13,768

 

9.5

 

 

 

 

 

 

 

 

 

 

 

N.M. Not meaningful.

 

 

 

 

 

 

 

 

 

 

-more-


 

19

 

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollars in thousands, except per-share data)

(Unaudited)

 

 

 

At Mar. 31

 

At Dec. 31

 

Change

 

 

 

2012

 

2011

 

$

 

%

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

705,642

 

$

1,389,704

 

$

(684,062)

 

(49.2)

%

Investments

 

168,440

 

157,780

 

10,660

 

6.8

 

Securities available for sale

 

728,894

 

2,324,038

 

(1,595,144)

 

(68.6)

 

Loans and leases held for sale

 

1,918

 

14,321

 

(12,403)

 

(86.6)

 

Loans and leases:

 

 

 

 

 

 

 

 

 

Consumer real estate

 

6,815,909

 

6,895,291

 

(79,382)

 

(1.2)

 

Commercial

 

3,467,089

 

3,449,492

 

17,597

 

.5

 

Leasing and equipment finance

 

3,118,755

 

3,142,259

 

(23,504)

 

(.7)

 

Inventory finance

 

1,637,958

 

624,700

 

1,013,258

 

162.2

 

Auto finance

 

139,047

 

3,628

 

135,419

 

N.M.

 

Other

 

29,178

 

34,885

 

(5,707)

 

(16.4)

 

Total loans and leases

 

15,207,936

 

14,150,255

 

1,057,681

 

7.5

 

Allowance for loan and lease losses

 

(265,293)

 

(255,672)

 

(9,621)

 

(3.8)

 

Net loans and leases

 

14,942,643

 

13,894,583

 

1,048,060

 

7.5

 

Premises and equipment, net

 

433,364

 

436,281

 

(2,917)

 

(.7)

 

Goodwill

 

225,640

 

225,640

 

-

 

-

 

Other assets

 

626,916

 

537,041

 

89,875

 

16.7

 

Total assets

 

$

17,833,457

 

$

18,979,388

 

$

(1,145,931)

 

(6.0)

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

Checking

 

$

4,886,003

 

$

4,629,749

 

$

256,254

 

5.5

 

Savings

 

5,998,764

 

5,855,263

 

143,501

 

2.5

 

Money market

 

665,642

 

651,377

 

14,265

 

2.2

 

Subtotal

 

11,550,409

 

11,136,389

 

414,020

 

3.7

 

Certificates of deposit

 

1,208,631

 

1,065,615

 

143,016

 

13.4

 

Total deposits

 

12,759,040

 

12,202,004

 

557,036

 

4.6

 

Short-term borrowings

 

1,157,189

 

6,416

 

1,150,773

 

N.M.

 

Long-term borrowings

 

1,962,053

 

4,381,664

 

(2,419,611)

 

(55.2)

 

Total borrowings

 

3,119,242

 

4,388,080

 

(1,268,838)

 

(28.9)

 

Accrued expenses and other liabilities

 

405,850

 

510,677

 

(104,827)

 

(20.5)

 

Total liabilities

 

16,284,132

 

17,100,761

 

(816,629)

 

(4.8)

 

Equity:

 

 

 

 

 

 

 

 

 

Preferred stock, par value $.01 per share,

 

 

 

 

 

 

 

 

 

30,000,000 authorized; none issued and outstanding

 

-

 

-

 

-

 

-

 

Common stock, par value $.01 per share,

 

 

 

 

 

 

 

 

 

280,000,000 shares authorized; 162,174,546

 

 

 

 

 

 

 

 

 

and 160,366,380 shares issued

 

1,622

 

1,604

 

18

 

1.1

 

Additional paid-in capital

 

736,288

 

715,247

 

21,041

 

2.9

 

Retained earnings, subject to certain restrictions

 

836,995

 

1,127,823

 

(290,828)

 

(25.8)

 

Accumulated other comprehensive income

 

3,273

 

56,826

 

(53,553)

 

(94.2)

 

Treasury stock at cost, 42,566, and 42,566

 

 

 

 

 

 

 

 

 

shares, and other

 

(47,159)

 

(33,367)

 

(13,792)

 

(41.3)

 

Total TCF Financial Corp. stockholders’ equity

 

1,531,019

 

1,868,133

 

(337,114)

 

(18.0)

 

Non-controlling interest in subsidiaries

 

18,306

 

10,494

 

7,812

 

74.4

 

Total equity

 

1,549,325

 

1,878,627

 

(329,302)

 

(17.5)

 

Total liabilities and equity

 

$

17,833,457

 

18,979,388

 

(1,145,931)

 

(6.0)

 

 

 

 

 

 

 

 

 

 

 

N.M. Not meaningful.

 

 

 

 

 

 

 

 

 

 

-more-


 

20

 

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

SUMMARY OF CREDIT QUALITY DATA

(Dollars in thousands)

(Unaudited)

 

 

 

At

 

At

 

At

 

At

 

At

 

Change from

 

 

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

Jun. 30,

 

Mar. 31,

 

Dec. 31,

 

Mar. 31,

 

 

 

2012

 

2011

 

2011

 

2011