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Section 1: 8-K (8-K)

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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 24, 2017
 
 2000216403_deluxetcfcorplogorgba35.jpg
 
TCF FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation)
001-10253
(Commission File Number)
41-1591444
(IRS Employer Identification No.)
 
200 Lake Street East, Mail Code EX0-03-A, Wayzata, Minnesota 55391-1693
(Address of principal executive offices, including 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:
 
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

¨ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨





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 24, 2017, attached to this Form 8-K as Exhibit 99.1, announcing its results of operations for the quarter ended March 31, 2017.
 
The earnings release is also available on the Investor Relations section of the Company’s website 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 7.01 Regulation FD Disclosure.
 
Information is being furnished herein in Exhibit 99.2 with respect to the slide presentation prepared for use with the press release. This information includes selected financial and operational information through the first quarter of 2017 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 of financial condition and results of operations 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 are dated April 24, 2017 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 website 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.
 
Information contained herein, including Exhibit 99.2, 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 9.01 Financial Statements and Exhibits.
 
(d)         Exhibits.

Exhibit No.        Description

99.1            Earnings Release of TCF Financial Corporation, dated April 24, 2017

99.2            Slide presentation prepared for use with the Earnings Release, dated April 24, 2017






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/ Craig R. Dahl
 
Craig R. Dahl,
Vice Chairman, President and Chief Executive Officer
(Principal Executive Officer)
 
 
 
 
 
/s/ Brian W. Maass
 
Brian W. Maass,
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
 
 
 
 
 
/s/ Susan D. Bode
 
Susan D. Bode,
Senior Vice President and Chief Accounting Officer
(Principal Accounting Officer)
 
Dated:  April 24, 2017



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
Exhibit 99.1

2000216403_deluxetcfcorplogorgba34.jpg
NEWS RELEASE

TCF Financial Corporation • 200 Lake Street East • Wayzata MN 55391

FOR IMMEDIATE RELEASE
                                
Contact:
Mark Goldman        (952) 475-7050        news@tcfbank.com         (Media)
Jason Korstange        (952) 745-2755        investor@tcfbank.com        (Investors)

TCF REPORTS QUARTERLY NET INCOME OF $46.3 MILLION, OR 25 CENTS PER SHARE

FIRST QUARTER HIGHLIGHTS

Revenue of $325.6 million, up 0.4 percent from the first quarter of 2016
Net interest income of $222.1 million, up 4.9 percent from the first quarter of 2016
Net interest margin of 4.46 percent, up 9 basis points from the first quarter of 2016
Period-end loans and leases of $18.0 billion, up 0.7 percent from March 31, 2016
Loan and lease originations of $4.0 billion, down 1.0 percent from the first quarter of 2016
Net charge-offs as a percentage of average loans and leases of 0.11 percent, down 16 basis points from the first quarter of 2016
Non-accrual loans and leases of $139.0 million, down 30.0 percent from March 31, 2016
Average deposits of $17.1 billion, up 1.3 percent from the first quarter of 2016
Effective income tax rate of 30.0 percent, down 480 basis points from the first quarter of 2016
Earnings per share of 25 cents, down 3.8 percent from the first quarter of 2016

Summary of Financial Results
 
 
 
 
 
 
 
 
Table 1

 
 
 
 
 
 
 
Percent Change
(Dollars in thousands, except per-share data)
1Q
 
4Q
 
1Q
 
1Q17 vs
 
1Q17 vs
 
2017
 
2016
 
2016
 
4Q16
 
1Q16
Net income attributable to TCF
$
46,278

 
$
50,092

 
$
48,046

 
(7.6
)%
 
(3.7
)%
Net interest income
222,114

 
211,446

 
211,658

 
5.0

 
4.9

Diluted earnings per common share
0.25

 
0.27

 
0.26

 
(7.4
)
 
(3.8
)
 
 
 
 
 
 
 
 
 
 
Financial Ratios(1)
 
 
 
 
 
 
 
 
 
Return on average assets
0.90
%
 
0.99
%
 
0.96
%
 
 
 
 
Return on average common equity
7.64

 
8.40

 
8.45

 
 
 
 
Return on average tangible common equity(2)
8.55

 
9.43

 
9.57

 
 
 
 
Net interest margin
4.46

 
4.30

 
4.37

 
 
 
 
Net charge-offs as a percentage of average loans and leases
0.11

 
0.27

 
0.27

 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Annualized.
(2) See "Reconciliation of GAAP to Non-GAAP Financial Measures" table.




WAYZATA, Minn. (April 24, 2017) - TCF Financial Corporation ("TCF" or the "Company") (NYSE: TCB) today reported net income of $46.3 million for the first quarter of 2017, compared with $48.0 million for the first quarter of 2016 and $50.1 million for the fourth quarter of 2016. Diluted earnings per common share was 25 cents for the first quarter of 2017, compared with 26 cents for the first quarter of 2016 and 27 cents for the fourth quarter of 2016.

"During the first quarter, we completed an auto finance strategic reassessment which resulted in the implementation of changes to that business," said Craig R. Dahl, president and chief executive officer. "In addition, we completed a consumer real estate non-accrual loan sale which lowered our risk profile and allowed us to recognize recoveries from previous charge-offs related to these loans. We also saw strong year-over-year and quarter-over-quarter improvement in net interest income and net interest margin.

"Changes to our auto finance strategy and continued strategic investments in technology capabilities resulted in increased expenses during the first quarter. We are refocusing our auto strategy to ensure profitable growth and increase operating leverage in this business moving forward. In addition, we are making key investments in 2017 that are focused on enhancing our technology capabilities to better serve our customers and drive efficiencies in our business. These initiatives are well underway and I am confident that they put us on a path to generating superior and sustainable returns for our stockholders."


2




Revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Revenue
 
 
 
 
 
 
 
 
Table 2

 
 
 
 
 
 
 
Percent Change
(Dollars in thousands)
1Q
 
4Q
 
1Q
 
1Q17 vs
 
1Q17 vs
 
2017
 
2016
 
2016
 
4Q16
 
1Q16
Net interest income
$
222,114

 
$
211,446

 
$
211,658

 
5.0
 %
 
4.9
 %
Non-interest income:
 
 
 
 
 
 
 
 
 
Fees and service charges
31,282

 
35,132

 
32,817

 
(11.0
)
 
(4.7
)
Card revenue
13,150

 
13,689

 
13,363

 
(3.9
)
 
(1.6
)
ATM revenue
4,675

 
4,806

 
5,021

 
(2.7
)
 
(6.9
)
Subtotal
49,107

 
53,627

 
51,201

 
(8.4
)
 
(4.1
)
Gains on sales of auto loans, net
2,864

 
1,145

 
11,920

 
150.1

 
(76.0
)
Gains on sales of consumer real estate loans, net
8,891

 
16,676

 
9,384

 
(46.7
)
 
(5.3
)
Servicing fee income
11,651

 
11,404

 
8,883

 
2.2

 
31.2

Subtotal
23,406

 
29,225

 
30,187

 
(19.9
)
 
(22.5
)
Leasing and equipment finance
28,298

 
31,316

 
28,487

 
(9.6
)
 
(0.7
)
Other
2,703

 
1,365

 
2,843

 
98.0

 
(4.9
)
Fees and other revenue
103,514

 
115,533

 
112,718

 
(10.4
)
 
(8.2
)
Gains (losses) on securities, net

 
135

 
(116
)
 
(100.0
)
 
(100.0
)
Total non-interest income
103,514

 
115,668

 
112,602

 
(10.5
)
 
(8.1
)
Total revenue
$
325,628

 
$
327,114

 
$
324,260

 
(0.5
)
 
0.4

 
 
 
 
 
 
 
 
 
 
Net interest margin(1)
4.46
%
 
4.30
%
 
4.37
%
 
 
 
 
Total non-interest income as a percentage of total revenue
31.8

 
35.4

 
34.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Annualized.
 
 

Net Interest Income
Net interest income for the first quarter of 2017 increased $10.5 million, or 4.9 percent, compared with the first quarter of 2016 and increased $10.7 million, or 5.0 percent, compared with the fourth quarter of 2016. The increase from the first quarter of 2016 was primarily due to higher average balances of inventory finance loans, leasing and equipment finance loans and leases, securities available for sale, loans and leases held for sale, and commercial loans, as well as higher average yields on variable- and adjustable-rate consumer, commercial and inventory finance loans. These increases were partially offset by lower average consumer real estate loan balances. The increase from the fourth quarter of 2016 was primarily due to higher average yields on all interest-earning assets, seasonally higher average inventory finance loan balances and higher average commercial loan balances, partially offset by two fewer days in the quarter.

Net interest margin for the first quarter of 2017 was 4.46 percent, compared with 4.37 percent for the first quarter of 2016 and 4.30 percent for the fourth quarter of 2016. The increase from the first quarter of 2016 was primarily due to higher average balances of interest-earning assets and higher average yields on the variable- and adjustable-rate loans. The increase from the fourth quarter of 2016 was primarily due to higher average yields on all interest-earning assets, seasonally higher average inventory finance loan balances and higher average commercial loan balances.

3




Non-interest Income
Fees and service charges for the first quarter of 2017 were $31.3 million, down $1.5 million, or 4.7 percent, from the first quarter of 2016 and down $3.9 million, or 11.0 percent, from the fourth quarter of 2016. The decreases from both periods were primarily due to lower overdraft fees.

TCF sold $250.6 million, $444.3 million and $516.0 million of auto loans during the first quarters of 2017 and 2016 and the fourth quarter of 2016, respectively, resulting in net gains in each respective period.

TCF sold $379.4 million, $321.4 million and $520.8 million of consumer real estate loans during the first quarters of 2017 and 2016 and the fourth quarter of 2016, respectively, resulting in net gains in each respective period. Included in consumer real estate loans sold in the first quarter of 2017 was $49.4 million of non-accrual loans, servicing released. As these loans were previously partially charged-off, a recovery of $8.7 million was recorded as a reduction to provision for credit losses and a loss of $0.8 million was recorded in gains on sales of consumer real estate loans, net.

Servicing fee income was $11.7 million on $5.6 billion of average loans and leases serviced for others for the first quarter of 2017, compared with $8.9 million on $4.4 billion for the first quarter of 2016 and $11.4 million on $5.5 billion for the fourth quarter of 2016. The increase from the first quarter of 2016 was due to the cumulative effect of the increase in the portfolio of auto finance and consumer real estate loans sold with servicing retained by TCF.


4




Loans and Leases
 
 
 
 
 
 
 
 
 
 
Period-End and Average Loans and Leases
Table 3

 
 
 
 
 
 
 
Percent Change
(Dollars in thousands)
1Q
 
4Q
 
1Q
 
1Q17 vs
 
1Q17 vs
 
2017
 
2016
 
2016
 
4Q16
 
1Q16
Period-End:
 
 
 
 
 
 
 
 
 
Consumer real estate:
 
 
 
 
 
 
 
 
 
First mortgage lien
$
2,166,691

 
$
2,292,596

 
$
2,521,492

 
(5.5
)%
 
(14.1
)%
Junior lien
2,494,696

 
2,791,756

 
2,729,075

 
(10.6
)
 
(8.6
)
Total consumer real estate
4,661,387

 
5,084,352

 
5,250,567

 
(8.3
)
 
(11.2
)
Commercial
3,376,050

 
3,286,478

 
3,114,594

 
2.7

 
8.4

Leasing and equipment finance
4,276,008

 
4,336,310

 
4,005,934

 
(1.4
)
 
6.7

Inventory finance
2,864,248

 
2,470,175

 
2,676,675

 
16.0

 
7.0

Auto finance
2,780,416

 
2,647,741

 
2,786,731

 
5.0

 
(0.2
)
Other
16,785

 
18,771

 
18,940

 
(10.6
)
 
(11.4
)
Total
$
17,974,894

 
$
17,843,827

 
$
17,853,441

 
0.7

 
0.7

 
 
 
 
 
 
 
 
 
 
Average:
 
 
 
 
 
 
 
 
 
Consumer real estate:
 
 
 
 
 
 
 
 
 
First mortgage lien
$
2,237,801

 
$
2,306,421

 
$
2,573,915

 
(3.0
)%
 
(13.1
)%
Junior lien
2,791,200

 
2,779,725

 
2,884,859

 
0.4

 
(3.2
)
Total consumer real estate
5,029,001

 
5,086,146

 
5,458,774

 
(1.1
)
 
(7.9
)
Commercial
3,302,891

 
3,147,517

 
3,158,101

 
4.9

 
4.6

Leasing and equipment finance
4,285,944

 
4,252,543

 
3,992,678

 
0.8

 
7.3

Inventory finance
2,696,787

 
2,389,980

 
2,433,534

 
12.8

 
10.8

Auto finance
2,714,862

 
2,647,088

 
2,703,880

 
2.6

 
0.4

Other
9,740

 
9,307

 
10,018

 
4.7

 
(2.8
)
Total
$
18,039,225

 
$
17,532,581

 
$
17,756,985

 
2.9

 
1.6

 
 
 
 
 
 
 
 
 
 

Period-end loans and leases were $18.0 billion at March 31, 2017, an increase of $0.1 billion, or 0.7 percent, compared with March 31, 2016 and December 31, 2016. Average loans and leases were $18.0 billion for the first quarter of 2017, an increase of $0.3 billion, or 1.6 percent, compared with the first quarter of 2016 and an increase of $0.5 billion, or 2.9 percent, compared with the fourth quarter of 2016.

The increase from March 31, 2016 for period-end loans and leases was primarily due to increases in the leasing and equipment finance, commercial and inventory finance portfolios. The increase from the first quarter of 2016 for average loans and leases was primarily due to increases in the leasing and equipment finance, inventory finance and commercial portfolios. Both of these increases were partially offset by a decrease in the consumer real estate portfolio. The increase from December 31, 2016 for period-end loans and leases was primarily due to seasonal increases in the inventory finance portfolio and an increase in the auto finance portfolio, partially offset by a decrease in the consumer real estate portfolio. The increase from the fourth quarter of 2016 for average loans and leases was primarily due to seasonal increases in the inventory finance portfolio and an increase in the commercial portfolio.


5




Loan and lease originations were $4.0 billion for the first quarter of 2017, a decrease of 1.0 percent compared with the first quarter of 2016 and a decrease of $0.3 billion, or 6.9 percent compared with the fourth quarter of 2016. The decrease from the fourth quarter of 2016 was primarily due to decreased originations in consumer real estate, leasing and equipment finance and commercial, partially offset by seasonally higher inventory finance originations.

Credit Quality
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit Trends
 
 
 
 
 
 
 
Table 4

 
 
 
 
 
 
 
Change
(Dollars in thousands)
1Q
4Q
3Q
2Q
1Q
 
1Q17 vs
1Q17 vs
 
2017
2016
2016
2016
2016
 
4Q16
1Q16
Over 60-day delinquencies as a percentage of period-end loans and leases(1)
0.09
%
0.12
%
0.12
%
0.12
%
0.10
%
 
(3) bps

(1) bps

Net charge-offs as a percentage of average loans and leases(2)
0.11

0.27

0.26

0.23

0.27

 
(16
)
(16
)
Non-accrual loans and leases and other real estate owned
$
170,940

$
228,242

$
223,759

$
232,334

$
241,090

 
(25.1)%

(29.1)%

Provision for credit losses
12,193

19,888

13,894

13,250

18,842

 
(38.7
)
(35.3
)
 
(1) Excludes non-accrual loans and leases.
(2) Annualized.

The over 60-day delinquency rate, excluding non-accrual loans and leases, was 0.09 percent at March 31, 2017, down from 0.10 percent at March 31, 2016, and down from 0.12 percent at December 31, 2016. The decrease from March 31, 2016 was primarily driven by improved credit quality in the consumer real estate first mortgage lien portfolio, partially offset by higher delinquencies in the auto finance portfolio. The decrease from December 31, 2016 was primarily driven by improved delinquencies in the consumer real estate first mortgage lien and auto finance portfolios.

The net charge-off rate was 0.11 percent for the first quarter of 2017, down from 0.27 percent for the first quarter and fourth quarter of 2016. The decreases from both periods were primarily due to the recovery of previously charged-off consumer real estate non-accrual loans that were sold, partially offset by increased net charge-offs in the commercial portfolio. The decrease from the first quarter of 2016 was also partially offset by increased net charge-offs in the auto finance portfolio. Excluding the $8.7 million recovery from the non-accrual loan sale, the net charge-off rate was 0.31% for the first quarter of 2017.

Non-accrual loans and leases and other real estate owned was $170.9 million at March 31, 2017, a decrease of $70.2 million, or 29.1 percent, from March 31, 2016, and a decrease of $57.3 million, or 25.1 percent, from December 31, 2016. Non-accrual loans and leases were $139.0 million at March 31, 2017, a decrease of $59.7 million, or 30.0 percent, from March 31, 2016 and a decrease of $42.5 million, or 23.4 percent, from December 31, 2016. The decrease from March 31, 2016 was primarily due to the consumer real estate non-accrual loan sale of $49.4 million and a decrease in auto finance non-accrual loans, partially offset by an increase in non-accrual loans in the commercial and inventory finance portfolios. The decrease from December 31, 2016 was primarily due to the consumer real estate non-accrual loan sale of $49.4 million,

6




partially offset by an increase in non-accrual commercial loans and non-accrual leasing and equipment finance loans and leases. Other real estate owned was $32.0 million at March 31, 2017, a decrease of $10.5 million, or 24.7 percent, from March 31, 2016, and a decrease of $14.8 million, or 31.7 percent, from December 31, 2016. The decreases from both periods were primarily due to the sales of consumer real estate properties outpacing additions.

Provision for credit losses was $12.2 million for the first quarter of 2017, a decrease of $6.6 million, or 35.3 percent, from the first quarter of 2016, and a decrease of $7.7 million, or 38.7 percent, from the fourth quarter of 2016. The decreases from both periods were primarily due to the recovery of $8.7 million on previous charge-offs related to the consumer real estate non-accrual loans that were sold.

Deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Deposits
 
 
 
 
 
 
 
 
Table 5

 
 
 
 
 
 
 
Percent Change
(Dollars in thousands)
1Q
 
4Q
 
1Q
 
1Q17 vs
 
1Q17 vs
 
2017
 
2016
 
2016
 
4Q16
 
1Q16
 
 
 
 
 
 
 
 
 
 
Checking
$
5,914,203

 
$
5,759,806

 
$
5,593,300

 
2.7
 %
 
5.7
 %
Savings
4,773,788

 
4,681,662

 
4,713,765

 
2.0

 
1.3

Money market
2,385,353

 
2,429,239

 
2,472,751

 
(1.8
)
 
(3.5
)
Certificates of deposit
4,033,143

 
4,198,190

 
4,104,951

 
(3.9
)
 
(1.7
)
Total average deposits
$
17,106,487

 
$
17,068,897

 
$
16,884,767

 
0.2

 
1.3

 
 
 
 
 
 
 
 
 
 
Average interest rate on deposits(1)
0.33
%
 
0.35
%
 
0.36
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Annualized.
 
 
 
 
 
 
 
 
 

Total average deposits for the first quarter of 2017 increased $221.7 million, or 1.3 percent, from the first quarter of 2016 and increased $37.6 million or 0.2 percent from the fourth quarter of 2016. The increase from the first quarter of 2016 was primarily due to growth in average checking balances, partially offset by decreases in money market balances and certificates of deposit. The increase from the fourth quarter of 2016 was primarily due to growth in average checking and savings balances, partially offset by a decrease in certificates of deposit.

The average interest rate on deposits for the first quarter of 2017 was 0.33 percent, down 3 basis points from the first quarter of 2016 and down 2 basis points from the fourth quarter of 2016. The decreases from both periods were primarily due to decreased average interest rates on money market balances and certificates of deposit.


7




Non-interest Expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest Expense
 
 
 
 
 
 
 
 
Table 6

 
 
 
 
 
 
 
 Change
(Dollars in thousands)
1Q
 
4Q
 
1Q
 
1Q17 vs
 
1Q17 vs
 
2017
 
2016
 
2016
 
4Q16
 
1Q16
 
 
 
 
 
 
 
 
 
 
Compensation and employee benefits
$
124,477

 
$
115,001

 
$
124,473

 
8.2
 %
 
—%

Occupancy and equipment
39,600

 
38,150

 
37,008

 
3.8

 
7.0

Other
64,037

 
59,235

 
53,348

 
8.1

 
20.0

Subtotal
228,114

 
212,386

 
214,829

 
7.4

 
6.2

Operating lease depreciation
11,242

 
10,906

 
9,573

 
3.1

 
17.4

Foreclosed real estate and repossessed assets, net
4,549

 
1,889

 
3,920

 
140.8

 
16.0

Other credit costs, net
101

 
178

 
12

 
(43.3
)
 
N.M.

Total non-interest expense
$
244,006

 
$
225,359

 
$
228,334

 
8.3

 
6.9

 
 
 
 
 
 
 
 
 
 
Efficiency ratio
74.93
%
 
68.89
%
 
70.42
%
 
604 bps

 
451 bps

 
 
 
 
 
 
 
 
 
 
N.M. Not Meaningful.
 
 
 
 
 
 
 
 
 

Compensation and employee benefits expense was consistent with the first quarter of 2016 and increased $9.5 million, or 8.2 percent, from the fourth quarter of 2016. The increase from the fourth quarter of 2016 was primarily due to seasonality of payroll taxes, the annual pension plan valuation adjustment in the fourth quarter of 2016 and the Company's 401K match on incentive compensation, as well as higher salaries, partially offset by lower medical and pharmacy claims.

Other non-interest expense increased $10.7 million, or 20.0 percent, from the first quarter of 2016 and increased $4.8 million, or 8.1 percent, from the fourth quarter of 2016. The increases were primarily due to higher severance expense in our auto finance business and higher professional fees related to strategic investments in technology capabilities.

Net expenses related to foreclosed real estate and repossessed assets increased $0.6 million, or 16.0 percent, from the first quarter of 2016 and increased $2.7 million, or 140.8 percent, from the fourth quarter of 2016. The increase from the first quarter of 2016 was primarily due to lower gains on sales of other real estate owned and higher repossessed assets expense, partially offset by lower valuation adjustments and lower operating costs. The increase from the fourth quarter of 2016 was primarily due to lower gains on sales of commercial properties and higher repossessed assets expense.


8




Income Tax Expense

The Company’s effective income tax rate was 30.0 percent for the first quarter of 2017, compared with 34.8 percent for the first quarter of 2016 and 36.4 percent for the fourth quarter of 2016. The effective tax rate for the first quarter of 2017 included discrete tax benefits totaling $2.3 million, of which $2.0 million resulted from tax benefits related to stock compensation recorded in income tax expense that were previously recorded in additional paid-in capital subject to new accounting guidance adopted January 1, 2017. The decreases from both periods were also due to increased investments in tax-exempt securities available for sale.

Capital
 
 
 
 
 
 
 
Capital Information
 
 
Table 7

 
At Mar. 31,
 
At Dec. 31,
(Dollars in thousands, except per-share data)
2017
 
2016
Total equity
$
2,490,663

 
$
2,444,645

Book value per common share
12.88

 
12.66

Tangible book value per common share(1)
11.55

 
11.33

Common equity to assets
10.08
%
 
10.09
%
Tangible common equity to tangible assets(1)
9.13

 
9.13

Capital accumulation rate(2)
6.83

 
8.59

 
 
 
 
 
At Mar. 31,
 
At Dec. 31,
Regulatory Capital:
2017(3)
 
2016
Common equity Tier 1 capital
$
2,003,988

 
$
1,970,323

Tier 1 capital
2,288,736

 
2,248,221

Total capital
2,667,204

 
2,635,925

 
 
 
 
Regulatory Capital Ratios:
 
 
 
Common equity Tier 1 capital ratio
10.11
%
 
10.24
%
Tier 1 risk-based capital ratio
11.55

 
11.68

Total risk-based capital ratio
13.46

 
13.69

Tier 1 leverage ratio
10.64

 
10.73

 
 
 
 
(1) See "Reconciliation of GAAP to Non-GAAP Financial Measures" table.
(2) Calculated as the change in annualized year-to-date common equity Tier 1 capital as a percentage of prior year end common equity Tier 1 capital.
(3) The regulatory capital ratios for 1Q 2017 are preliminary pending completion and filing of the Company's regulatory reports.

TCF maintained strong capital ratios as the Company accumulated capital through earnings.

Book value per common share increased 1.7 percent from December 31, 2016 and tangible book value per common share increased 1.9 percent from December 31, 2016.

On April 20, 2017, TCF's Board of Directors declared a regular quarterly cash dividend of 7.5 cents per common share, payable on June 1, 2017, to stockholders of record at the close of business on May 15, 2017. TCF also declared dividends on the 7.50% Series A and 6.45% Series B Non-Cumulative Perpetual Preferred Stock, both payable on June 1, 2017, to stockholders of record at the close of business on May 15, 2017.

9




Webcast 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 24, 2017 at 9:00 a.m. CDT. A slide presentation for the call will be available on the website prior to the call. Additionally, the webcast will be available for replay on 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. As of March 31, 2017, TCF had $21.8 billion in total assets and 331 branches in Illinois, Minnesota, Michigan, Colorado, Wisconsin, Arizona and South Dakota providing retail and commercial banking services. TCF, through its subsidiaries, also conducts commercial leasing, equipment finance and auto finance business in all 50 states and commercial inventory finance business in all 50 states and Canada. For more information about TCF, please visit http://ir.tcfbank.com.



10




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 herein. 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, 2016 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; Competitive Conditions; Credit and Other Risks. Deterioration in general economic and banking industry conditions, including those arising from government shutdowns, defaults, anticipated defaults or rating agency downgrades of sovereign debt (including debt of the U.S.), or increases in unemployment; adverse economic, business and competitive developments such as shrinking interest margins, reduced demand for financial services and loan and lease products, deposit outflows, increased deposit costs due to competition for deposit growth and evolving payment system developments, deposit account attrition or an inability to increase the number of deposit accounts; customers completing financial transactions without using a bank; adverse changes in credit quality and other risks posed by TCF's loan, lease, investment, securities held to maturity and securities available for sale portfolios, including declines in commercial or residential real estate values, changes in the allowance for loan and lease losses dictated by new market conditions or regulatory requirements, or the inability of home equity line borrowers to make increased payments caused by increased interest rates or amortization of principal; deviations from estimates of prepayment rates and fluctuations in interest rates that result in decreases in the value of assets such as interest-only strips that arise in connection with TCF's loan sales activity; 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; the effect of any negative publicity.
 
Legislative and Regulatory Requirements. New consumer protection and supervisory requirements and regulations, including those resulting from action by the Consumer Financial Protection Bureau ("CFPB") and changes in the scope of Federal preemption of state laws that could be applied to national banks and their subsidiaries; the imposition of requirements that adversely impact TCF's deposit, lending, loan collection and other business activities such as mortgage foreclosure moratorium laws, further regulation of financial institution campus banking programs, or new restrictions on loan and lease products; changes affecting customer account charges and fee income, including changes to interchange rates; regulatory actions or changes in customer opt-in preferences with respect to overdrafts, which may have an adverse impact on TCF; governmental regulations or judicial actions affecting the security interests of creditors; deficiencies in TCF's compliance programs, including under the Bank Secrecy Act in past or future periods, which may result in regulatory enforcement action including monetary penalties; increased health care costs including those resulting from health care reform; regulatory criticism and resulting enforcement actions or other adverse consequences such as increased capital requirements, higher deposit insurance assessments or monetary damages or penalties; heightened regulatory practices, requirements or expectations, including, but not limited to, requirements related to enterprise risk management, the Bank Secrecy Act and anti-money laundering compliance activity.

11




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 impact on banks of regulatory reform, including 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 or unfavorable conditions in the credit markets that restrict or limit various funding sources; costs associated with new regulatory requirements or interpretive guidance including those relating to liquidity; 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.
 
Branching Risk; Growth Risks. Adverse developments affecting TCF's supermarket banking relationships or either of the primary supermarket chains in which TCF maintains supermarket branches; costs related to closing underperforming branches; inability to timely close underperforming branches due to long-term lease obligations; slower than anticipated growth in existing or acquired businesses; inability to successfully execute on TCF's growth strategy through acquisitions or expanding existing business relationships; failure to expand or diversify TCF's balance sheet through new or expanded programs or opportunities; technology-related risks, including the failure to successfully attract and retain customers; failure to effectuate, and risks of claims related to, sales and securitizations of loans; risks related to new 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, cyber-attacks and other security breaches, counterparty failures and the possibility that deposit account losses (fraudulent checks, etc.) may increase; failure to keep pace with technological change, such as by failing to develop and maintain technology necessary to satisfy customer demands, costs and possible disruptions related to upgrading systems; the failure to attract and retain key employees.
 
Litigation Risks. Results of litigation or government enforcement actions such as TCF's pending litigation with the CFPB and related matters, including class action litigation or enforcement actions concerning TCF's lending or deposit activities, including account opening/origination, servicing practices, fees or charges, employment practices, or checking account overdraft program "opt in" requirements; and possible increases in indemnification obligations for certain litigation against Visa U.S.A.

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 federal, state or foreign 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.



12




TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per-share data)
(Unaudited)
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
Change
 
2017
 
2016
 
$
 
%
Interest income:
 
 
 
 
 
 
 
Loans and leases
$
219,548

 
$
214,805

 
$
4,743

 
2.2
 %
Securities available for sale
7,980

 
5,498

 
2,482

 
45.1

Securities held to maturity
1,280

 
1,319

 
(39
)
 
(3.0
)
Loans held for sale and other
13,499

 
10,720

 
2,779

 
25.9

Total interest income
242,307

 
232,342

 
9,965

 
4.3

Interest expense:
 
 
 
 
 
 
 
Deposits
13,715

 
14,991

 
(1,276
)
 
(8.5
)
Borrowings
6,478

 
5,693

 
785

 
13.8

Total interest expense
20,193

 
20,684

 
(491
)
 
(2.4
)
Net interest income
222,114

 
211,658

 
10,456

 
4.9

Provision for credit losses
12,193

 
18,842

 
(6,649
)
 
(35.3
)
Net interest income after provision for credit losses
209,921

 
192,816

 
17,105

 
8.9

Non-interest income:
 
 
 
 
 
 
 
Fees and service charges
31,282

 
32,817

 
(1,535
)
 
(4.7
)
Card revenue
13,150

 
13,363

 
(213
)
 
(1.6
)
ATM revenue
4,675

 
5,021

 
(346
)
 
(6.9
)
Subtotal
49,107

 
51,201

 
(2,094
)
 
(4.1
)
Gains on sales of auto loans, net
2,864

 
11,920

 
(9,056
)
 
(76.0
)
Gains on sales of consumer real estate loans, net
8,891

 
9,384

 
(493
)
 
(5.3
)
Servicing fee income
11,651

 
8,883

 
2,768

 
31.2

Subtotal
23,406

 
30,187

 
(6,781
)
 
(22.5
)
Leasing and equipment finance
28,298

 
28,487

 
(189
)
 
(0.7
)
Other
2,703

 
2,843

 
(140
)
 
(4.9
)
Fees and other revenue
103,514

 
112,718

 
(9,204
)
 
(8.2
)
Gains (losses) on securities, net

 
(116
)
 
116

 
(100.0
)
Total non-interest income
103,514

 
112,602

 
(9,088
)
 
(8.1
)
Non-interest expense:
 
 
 
 
 
 
 
Compensation and employee benefits
124,477

 
124,473

 
4

 

Occupancy and equipment
39,600

 
37,008

 
2,592

 
7.0

Other
64,037

 
53,348

 
10,689

 
20.0

Subtotal
228,114

 
214,829

 
13,285

 
6.2

Operating lease depreciation
11,242

 
9,573

 
1,669

 
17.4

Foreclosed real estate and repossessed assets, net
4,549

 
3,920

 
629

 
16.0

Other credit costs, net
101

 
12

 
89

 
N.M.

Total non-interest expense
244,006

 
228,334

 
15,672

 
6.9

Income before income tax expense
69,429

 
77,084

 
(7,655
)
 
(9.9
)
Income tax expense
20,843

 
26,803

 
(5,960
)
 
(22.2
)
Income after income tax expense
48,586

 
50,281

 
(1,695
)
 
(3.4
)
Income attributable to non-controlling interest
2,308

 
2,235

 
73

 
3.3

Net income attributable to TCF Financial Corporation
46,278

 
48,046

 
(1,768
)
 
(3.7
)
Preferred stock dividends
4,847

 
4,847

 

 

Net income available to common stockholders
$
41,431

 
$
43,199

 
$
(1,768
)
 
(4.1
)
 
 
 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
 
 
Basic
$
0.25

 
$
0.26

 
$
(0.01
)
 
(3.8
)%
Diluted
0.25

 
0.26

 
(0.01
)
 
(3.8
)
 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.075

 
$
0.075

 
$

 
 %
 
 
 
 
 
 
 
 
Average common and common equivalent shares
 
 
 
 
 
 
 
outstanding (in thousands):
 
 
 
 
 
 
 
Basic
167,903

 
166,887

 
1,016

 
0.6
 %
Diluted
168,530

 
167,435

 
1,095

 
0.7

 
 
 
 
 
 
 
 
N.M. Not Meaningful.

13




TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
(Unaudited)
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
Change
 
2017
 
2016
 
$
 
%
Net income attributable to TCF Financial Corporation
$
46,278

 
$
48,046

 
$
(1,768
)
 
(3.7
)%
Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
Net unrealized gains (losses) on securities available for sale and interest-only strips
2,769

 
12,037

 
(9,268
)
 
(77.0
)
Net unrealized gains (losses) on net investment hedges
(313
)
 
(2,020
)
 
1,707

 
84.5

Foreign currency translation adjustment
581

 
3,409

 
(2,828
)
 
(83.0
)
Recognized postretirement prior service cost
(7
)
 
(7
)
 

 

Total other comprehensive income (loss), net of tax
3,030

 
13,419

 
(10,389
)
 
(77.4
)
Comprehensive income
$
49,308

 
$
61,465

 
$
(12,157
)
 
(19.8
)
 
 
 
 
 
 
 
 



14




TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except per-share data)
(Unaudited)
 
 
 
 
 
 
 
 
 
At March 31,
 
At Dec. 31,
 
Change
 
2017
 
2016
 
$
 
%
ASSETS:
 
 
 
 
 
 
 
Cash and due from banks
$
468,584

 
$
609,603

 
$
(141,019
)
 
(23.1
)%
Investments
81,717

 
74,714

 
7,003

 
9.4

Securities held to maturity
176,236

 
181,314

 
(5,078
)
 
(2.8
)
Securities available for sale
1,475,950

 
1,423,435

 
52,515

 
3.7

Loans and leases held for sale
605,631

 
268,832

 
336,799

 
125.3

Loans and leases:
 
 
 
 
 
 
 
Consumer real estate:
 
 
 
 
 
 
 
First mortgage lien
2,166,691

 
2,292,596

 
(125,905
)
 
(5.5
)
Junior lien
2,494,696

 
2,791,756

 
(297,060
)
 
(10.6
)
Total consumer real estate
4,661,387

 
5,084,352

 
(422,965
)
 
(8.3
)
Commercial
3,376,050

 
3,286,478

 
89,572

 
2.7

Leasing and equipment finance
4,276,008

 
4,336,310

 
(60,302
)
 
(1.4
)
Inventory finance
2,864,248

 
2,470,175

 
394,073

 
16.0

Auto finance
2,780,416

 
2,647,741

 
132,675

 
5.0

Other
16,785

 
18,771

 
(1,986
)
 
(10.6
)
Total loans and leases
17,974,894

 
17,843,827

 
131,067

 
0.7

Allowance for loan and lease losses
(160,166
)
 
(160,269
)
 
103

 
0.1

Net loans and leases
17,814,728

 
17,683,558

 
131,170

 
0.7

Premises and equipment, net
423,055

 
418,372

 
4,683

 
1.1

Goodwill
225,640

 
225,640

 

 

Other assets
565,027

 
555,858

 
9,169

 
1.6

Total assets
$
21,836,568

 
$
21,441,326

 
$
395,242

 
1.8

 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY:
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
Checking
$
6,218,654

 
$
6,009,151

 
$
209,503

 
3.5
 %
Savings
4,850,742

 
4,719,481

 
131,261

 
2.8

Money market
2,301,643

 
2,421,467

 
(119,824
)
 
(4.9
)
Certificates of deposit
4,094,551

 
4,092,423

 
2,128

 
0.1

Total deposits
17,465,590

 
17,242,522

 
223,068

 
1.3

Short-term borrowings
5,432

 
4,391

 
1,041

 
23.7

Long-term borrowings
1,241,155

 
1,073,181

 
167,974

 
15.7

Total borrowings
1,246,587

 
1,077,572

 
169,015

 
15.7

Accrued expenses and other liabilities
633,728

 
676,587

 
(42,859
)
 
(6.3
)
Total liabilities
19,345,905

 
18,996,681

 
349,224

 
1.8

Equity:
 
 
 
 
 
 
 
Preferred stock, par value $0.01 per share, 30,000,000 shares authorized;
 
 
 
 
 
 
 
4,006,900 shares issued
263,240

 
263,240

 

 

Common stock, par value $0.01 per share, 280,000,000 shares authorized;
 
 
 
 
 
 
 
170,983,828 and 171,034,506 shares issued, respectively
1,710

 
1,710

 

 

Additional paid-in capital
853,024

 
862,776

 
(9,752
)
 
(1.1
)
Retained earnings, subject to certain restrictions
1,410,418

 
1,382,901

 
27,517

 
2.0

Accumulated other comprehensive income (loss)
(30,695
)
 
(33,725
)
 
3,030

 
9.0

Treasury stock at cost, 42,566 shares, and other
(33,585
)
 
(49,419
)
 
15,834

 
32.0

Total TCF Financial Corporation stockholders' equity
2,464,112

 
2,427,483

 
36,629

 
1.5

Non-controlling interest in subsidiaries
26,551

 
17,162

 
9,389

 
54.7

Total equity
2,490,663

 
2,444,645

 
46,018

 
1.9

Total liabilities and equity
$
21,836,568

 
$
21,441,326

 
$
395,242

 
1.8

 
 
 
 
 
 
 
 


15




TCF FINANCIAL CORPORATION AND SUBSIDIARIES
SUMMARY OF CREDIT QUALITY DATA
(Dollars in thousands)
(Unaudited)
 
Over 60-Day Delinquencies as a Percentage of Portfolio(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
At
 
At
 
At
 
At
 
At
 
Change from
 
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
 
Dec. 31,
 
Mar. 31,
 
 
2017
 
2016
 
2016
 
2016
 
2016
 
2016
 
2016
 
Consumer real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
First mortgage lien
0.28
%
 
0.40
%
 
0.36
%
 
0.36
%
 
0.39
%
 
(12
)
bps
(11
)
bps
Junior lien
0.05

 
0.05

 
0.03

 
0.03

 
0.05

 

 

 
Total consumer real estate
0.15

 
0.21

 
0.18

 
0.18

 
0.21

 
(6
)
 
(6
)
 
Commercial

 

 
0.01

 
0.11

 

 

 

 
Leasing and equipment finance
0.12

 
0.10

 
0.14

 
0.13

 
0.12

 
2

 

 
Inventory finance

 

 
0.01

 

 

 

 

 
Auto finance
0.13

 
0.23

 
0.20

 
0.13

 
0.09

 
(10
)
 
4

 
Other
0.05

 
0.10

 
0.05

 
0.33

 
0.13

 
(5
)
 
(8
)
 
Subtotal
0.09

 
0.12

 
0.12

 
0.12

 
0.10

 
(3
)
 
(1
)
 
Portfolios acquired with deteriorated credit quality

 

 
3.06

 
0.02

 
1.51

 

 
(151
)
 
Total delinquencies
0.09

 
0.12

 
0.12

 
0.12

 
0.10

 
(3
)
 
(1
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
Excludes non-accrual loans and leases.

Net Charge-Offs as a Percentage of Average Loans and Leases
 
 
 
 
 
 
Three Months Ended(1)
 
Change from
 
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
 
Dec. 31,
 
Mar. 31,
 
 
2017
 
2016
 
2016
 
2016
 
2016
 
2016
 
2016
 
Consumer real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
First mortgage lien
(0.18
)%
 
0.26
%
 
0.34
 %
 
0.35
%
 
0.55
 %
 
(44
)
bps
(73
)
bps
Junior lien
(0.89
)
 
0.08

 
0.04

 
0.05

 
0.17

 
(97
)
 
(106
)
 
Total consumer real estate
(0.58
)
 
0.17

 
0.17

 
0.19

 
0.35

 
(75
)
 
(93
)
 
Commercial
0.32

 
0.01

 
(0.01
)
 
0.08

 
(0.02
)
 
31

 
34

 
Leasing and equipment finance
0.13

 
0.10

 
0.18

 
0.11

 
0.13

 
3

 

 
Inventory finance
0.01

 
0.07

 
0.10

 
0.09

 
0.04

 
(6
)
 
(3
)
 
Auto finance
1.12

 
1.09

 
0.86

 
0.69

 
0.81

 
3

 
31

 
Other
 N.M.

 
 N.M.

 
 N.M.

 
 N.M.

 
 N.M.

 
N.M.

 
N.M.

 
Total
0.11

 
0.27

 
0.26

 
0.23

 
0.27

 
(16
)
 
(16
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
N.M. Not Meaningful.
(1)
Annualized.

Non-Accrual Loans and Leases Rollforward
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Change from
 
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
 
Dec. 31,
 
Mar. 31,
 
 
2017
 
2016
 
2016
 
2016
 
2016
 
2016
 
2016
 
Balance, beginning of period
$
181,445

 
$
190,047

 
$
195,542

 
$
198,649

 
$
200,466

 
$
(8,602
)
 
$
(19,021
)
 
Additions
34,661

 
32,398

 
28,697

 
35,280

 
38,029

 
2,263

 
(3,368
)
 
Charge-offs
(6,412
)
 
(4,158
)
 
(5,670
)
 
(5,475
)
 
(7,436
)
 
(2,254
)
 
1,024

 
Transfers to other assets
(8,786
)
 
(17,118
)
 
(11,687
)
 
(10,310
)
 
(12,342
)
 
8,332

 
3,556

 
Return to accrual status
(2,591
)
 
(4,546
)
 
(5,447
)
 
(6,687
)
 
(7,698
)
 
1,955

 
5,107

 
Payments received
(10,732
)
 
(14,351
)
 
(13,845
)
 
(17,774
)
 
(15,551
)
 
3,619

 
4,819

 
Sales
(49,916
)
 
(2,764
)
 

 
(900
)
 

 
(47,152
)
 
(49,916
)
 
Other, net
1,312

 
1,937

 
2,457

 
2,759

 
3,181

 
(625
)
 
(1,869
)
 
Balance, end of period
$
138,981

 
$
181,445

 
$
190,047

 
$
195,542

 
$
198,649

 
$
(42,464
)
 
$
(59,668
)
 


16




TCF FINANCIAL CORPORATION AND SUBSIDIARIES
SUMMARY OF CREDIT QUALITY DATA, CONTINUED
(Dollars in thousands)
(Unaudited)
 
Other Real Estate Owned Rollforward
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Change from
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
 
Dec. 31,
 
Mar. 31,
 
2017
 
2016
 
2016
 
2016
 
2016
 
2016
 
2016
Balance, beginning of period
$
46,797

 
$
33,712

 
$
36,792

 
$
42,441

 
$
49,982

 
$
13,085

 
$
(3,185
)
Transferred in
7,212

 
13,865

 
10,124

 
9,661

 
10,575

 
(6,653
)
 
(3,363
)
Sales
(14,982
)
 
(8,655
)
 
(12,997
)
 
(16,058
)
 
(18,885
)
 
(6,327
)
 
3,903

Writedowns
(1,538
)
 
(1,281
)
 
(1,984
)
 
(2,027
)
 
(2,744
)
 
(257
)
 
1,206

Other, net(1)
(5,530
)
 
9,156

 
1,777

 
2,775

 
3,513

 
(14,686
)
 
(9,043
)
Balance, end of period
$
31,959

 
$
46,797

 
$
33,712

 
$
36,792

 
$
42,441

 
$
(14,838
)