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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):

October 24, 2014

 

 

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))

 



 

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 October 24, 2014, attached to this Form 8-K as Exhibit 99.1, announcing its results of operations for the quarter ended September 30, 2014.

 

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 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 third quarter of 2014 and does not represent a complete set of financial statements and related notes prepared in conformity with generally accepted accounting principles (“GAAP”). Most, but not all, of the selected financial information furnished herein is derived from the Company’s consolidated financial statements and related notes prepared in accordance with GAAP and management’s discussion and analysis included in the Company’s reports on Forms 10-K and 10-Q. The Company’s annual financial statements are subject to independent audit. These materials are dated October 24, 2014 and TCF does not undertake to update the materials after that date.

 

The presentation is also available on the Investor Relations section of the Company’s web site at http://ir.tcfbank.com. 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 October 24, 2014

 

 

99.2

Slide presentation prepared for use with the Earnings Release, dated October 24, 2014

 



 

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/ Susan D. Bode

 

Susan D. Bode,
Senior Vice President and Chief Accounting Officer
(Principal Accounting Officer)

 

Dated:  October 24, 2014

 


 

 

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

Exhibit 99.1

NEWS RELEASE

 

 

 

 

Investors:

Media:

 

 

 

Jason Korstange

Mark Goldman

 

 

 

(952) 745-2755

(952) 475-7050

 

 

 

 

 

 

 

 

FOR IMMEDIATE RELEASE

 

TCF FINANCIAL CORPORATION 200 Lake Street East, Wayzata, MN 55391-1693

 

TCF Reports Quarterly Net Income of $52.3 Million, or 29 Cents Per Share,

Up 6 Cents, or 26.1 Percent from the Third Quarter of 2013

 

THIRD QUARTER HIGHLIGHTS

-       Revenue of $320.3 million, up 4.7 percent from the third quarter of 2013

-       Loan and lease originations of $3.6 billion, up 14.9 percent from the third quarter of 2013

-       Average deposits of $15.2 billion, up 5.9 percent from the third quarter of 2013

-       Provision for credit losses of $15.7 million, down 36.0 percent from the third quarter of 2013

-       Non-accrual loans and leases of $275.1 million, down 2.7 percent from the third quarter of 2013

-       Return on average assets of 1.15 percent, up 18 basis points from the third quarter of 2013

-       Return on average tangible common equity of 12.11 percent, up 120 basis points from the third quarter of 2013

 

Summary of Financial Results

Table 1

(Dollars in thousands, except per-share data)

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 

3Q
2014

 

2Q
2014

 

3Q
2013

 

3Q14 vs
2Q14

 

3Q14 vs
3Q13

 

YTD
2014

 

YTD
2013

 

Percent
Change

Net income attributable to TCF

 

$

52,317

 

$

53,125

 

$

42,795

 

(1.5

)%

22.3

 %

$

150,199

 

$

111,673

 

34.5

 %

Net interest income

 

204,180

 

206,101

 

199,627

 

(0.9

)

2.3

 

611,555

 

600,762

 

1.8

 

Diluted earnings per common share

 

0.29

 

0.29

 

0.23

 

 

26.1

 

0.83

 

0.60

 

38.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Ratios (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax pre-provision return on average assets (2)

 

2.13

 %

2.05

 %

2.04

 %

 

 

 

 

2.02

 %

2.00

 %

 

 

Return on average assets

 

1.15

 

1.17

 

0.97

 

 

 

 

 

1.11

 

0.86

 

 

 

Return on average common equity

 

10.50

 

10.99

 

9.28

 

 

 

 

 

10.30

 

8.03

 

 

 

Return on average tangible common equity (3)

 

12.11

 

12.72

 

10.91

 

 

 

 

 

11.93

 

9.49

 

 

 

Net interest margin

 

4.60

 

4.65

 

4.62

 

 

 

 

 

4.64

 

4.69

 

 

 

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

 

0.66

 

0.45

 

0.71

 

 

 

 

 

0.52

 

0.82

 

 

 

 

(1) Annualized.

(2) Pre-tax pre-provision profit is calculated as total revenues less non-interest expense.

(3) See “Reconciliation of GAAP to Non-GAAP Financial Measures” table.

 



 

2

 

WAYZATA, MN, October 24, 2014 - TCF Financial Corporation (“TCF” or the “Company”) (NYSE: TCB) today reported net income of $52.3 million for the third quarter of 2014, compared with net income of $42.8 million for the third quarter of 2013, and net income of $53.1 million for the second quarter of 2014. Diluted earnings per common share was 29 cents for the third quarter of 2014, compared with 23 cents for the third quarter of 2013, and 29 cents for the second quarter of 2014.

 

TCF reported net income of $150.2 million for the first nine months of 2014, compared with net income of $111.7 million for the same period in 2013. Diluted earnings per common share was 83 cents for the first nine months of 2014, compared with 60 cents for the same period in 2013.

 

Chairman’s Statement

 

“TCF reported another steady quarter of profitability, with earnings of 29 cents per share and a strong return on average assets of 1.15 percent and return on average tangible common equity of 12.11 percent, while maintaining an industry-leading net interest margin of 4.60 percent,” said William A. Cooper, Chairman and Chief Executive Officer.

 

“TCF’s growth is driven by a unique loan and lease origination capability funded by an increasing, low-cost deposit base.  Strong loan and lease originations during the quarter continued to provide a growing source of non-interest income through loan sales and servicing revenue, as well as TCF’s first auto loan securitization completed in July.  I believe TCF’s ability to generate national loan and lease growth while developing a diversified revenue base positions us to deliver long-term shareholder value.”

 

-more-

 



 

3

 

Revenue

 

Total Revenue

Table 2

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

(Dollars in thousands)

 

3Q
2014

 

2Q
2014

 

3Q
2013

 

3Q14 vs
2Q14

 

3Q14 vs
3Q13

 

YTD
2014

 

YTD
2013

 

Percent
Change

Net interest income

 

$

204,180

 

$

206,101

 

$

199,627

 

(0.9)%

 

2.3%

 

$

611,555

 

$

600,762

 

1.8%

 

Fees and other revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges

 

40,255

 

38,035

 

42,457

 

5.8

 

(5.2)

 

114,909

 

123,352

 

(6.8)

 

Card revenue

 

12,994

 

13,249

 

13,167

 

(1.9)

 

(1.3)

 

38,493

 

38,854

 

(0.9)

 

ATM revenue

 

5,863

 

5,794

 

5,941

 

1.2

 

(1.3)

 

16,976

 

17,274

 

(1.7)

 

Total banking fees

 

59,112

 

57,078

 

61,565

 

3.6

 

(4.0)

 

170,378

 

179,480

 

(5.1)

 

Leasing and equipment finance

 

24,383

 

23,069

 

28,778

 

5.7

 

(15.3)

 

69,432

 

67,591

 

2.7

 

Gains on sales of auto loans, net

 

14,863

 

7,270

 

7,140

 

104.4

 

108.2

 

30,603

 

22,421

 

36.5

 

Gains on sales of consumer real estate loans, net

 

8,762

 

8,151

 

4,152

 

7.5

 

111.0

 

28,619

 

16,347

 

75.1

 

Servicing fee income

 

5,880

 

4,892

 

3,619

 

20.2

 

62.5

 

15,079

 

9,503

 

58.7

 

Other

 

3,170

 

2,789

 

986

 

13.7

 

N.M.

 

8,341

 

3,384

 

146.5

 

Total fees and other revenue

 

116,170

 

103,249

 

106,240

 

12.5

 

9.3

 

322,452

 

298,726

 

7.9

 

Subtotal

 

320,350

 

309,350

 

305,867

 

3.6

 

4.7

 

934,007

 

899,488

 

3.8

 

(Losses) gains on securities, net

 

(94

)

767

 

(80

)

N.M.

 

(17.5)

 

1,047

 

(80

)

N.M.

 

Total revenue

 

$

320,256

 

$

310,117

 

$

305,787

 

3.3

 

4.7

 

$

935,054

 

$

899,408

 

4.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (1)

 

4.60

 %

4.65

 %

4.62

 %

 

 

 

 

4.64

 %

4.69

 %

 

 

Fees and other revenue as a % of total revenue

 

36.27

 

33.29

 

34.74

 

 

 

 

 

34.48

 

33.21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

N.M. Not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Annualized.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income

 

·                 Net interest income for the third quarter of 2014 increased $4.6 million, or 2.3 percent, compared with the third quarter of 2013. The increase was primarily driven by higher average loan and lease balances in the auto finance, inventory finance and leasing and equipment finance businesses as well as a reduced cost of borrowings. This increase was partially offset by downward pressure on yields across the lending businesses in this increasingly competitive low interest rate environment, as well as lower average balances of higher yielding fixed-rate loans of that type in the commercial and consumer real estate portfolios due to run-off exceeding originations.

 

·                 Net interest income for the third quarter of 2014 decreased $1.9 million, or 0.9 percent, compared with the second quarter of 2014. The decrease was primarily due to lower average loan and lease balances in the inventory finance portfolio due to seasonality as well as higher rates on various deposit products as asset growth was funded with deposits at incremental market rates. The decrease was partially offset by higher average loan balances in the auto finance and leasing and equipment finance businesses.

 

-more-

 



 

4

 

·                  Net interest margin in the third quarter of 2014 was 4.60 percent, compared with 4.62 percent in the third quarter of 2013 and 4.65 percent in the second quarter of 2014. The decreases from both periods were primarily due to continued margin compression resulting from the increasingly competitive low interest rate environment.

 

Non-interest Income

 

·                 Fees and service charges in the third quarter of 2014 were $40.3 million, down $2.2 million, or 5.2 percent, from the third quarter of 2013 and up $2.2 million, or 5.8 percent, from the second quarter of 2014. The decrease from the third quarter of 2013 was primarily due to customer behavior changes, as well as higher average checking account balances per customer. The increase from the second quarter of 2014 was primarily due to seasonal differences in customer activity.

 

·                Leasing and equipment finance revenue was $24.4 million during the third quarter of 2014, down $4.4 million, or 15.3 percent, from the third quarter of 2013 and up $1.3 million, or 5.7 percent, from the second quarter of 2014. The decrease from the third quarter of 2013 and the increase from the second quarter of 2014 were primarily due to customer-driven events impacting sales-type lease revenue.

 

·                 TCF sold $484.4 million, $182.5 million and $220.2 million of auto loans during the third quarters of 2014 and 2013, and the second quarter of 2014, respectively, resulting in net gains in the same respective periods. Included in auto loans sold for the third quarter of 2014 is $256.3 million related to the execution of the Company’s inaugural auto loan securitization.

 

·                 TCF sold $233.6 million, $142.4 million and $224.2 million of consumer real estate loans during the third quarters of 2014 and 2013, and the second quarter of 2014, respectively, resulting in net gains in the same respective periods.

 

·                 Servicing fee income was $5.9 million on $3.1 billion of period-end loans and leases serviced for others during the third quarter of 2014 compared to $3.6 million on $1.7 billion of period-end loans and leases serviced for others during the third quarter of 2013 and $4.9 million on $2.6 billion of period-end loans and leases serviced for others during the second quarter of 2014.

 

-more-

 



 

5

 

Loans and Leases

 

Period-End and Average Loans and Leases

 

 

 

 

 

 

 

 

 

 

 

Table 3

 

 

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

3Q
2014

 

2Q
2014

 

3Q
2013

 

 

3Q14 vs
2Q14

 

3Q14 vs
3Q13

 

 

YTD
2014

 

YTD
2013

 

Percent
Change

 

Period-End:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First mortgage lien

 

$

 3,444,581

 

$

 3,542,324

 

$

 3,862,174

 

 

(2.8

)%

(10.8

)%

 

 

 

 

 

 

 

Junior lien

 

2,526,486

 

2,480,763

 

2,553,458

 

 

1.8

 

(1.1

)

 

 

 

 

 

 

 

Total consumer real estate

 

5,971,067

 

6,023,087

 

6,415,632

 

 

(0.9

)

(6.9

)

 

 

 

 

 

 

 

Commercial

 

3,159,766

 

3,093,161

 

3,137,088

 

 

2.2

 

0.7

 

 

 

 

 

 

 

 

Leasing and equipment finance

 

3,632,793

 

3,526,264

 

3,286,506

 

 

3.0

 

10.5

 

 

 

 

 

 

 

 

Inventory finance

 

1,836,538

 

1,880,667

 

1,716,542

 

 

(2.3

)

7.0

 

 

 

 

 

 

 

 

Auto finance

 

1,749,411

 

1,502,860

 

1,069,053

 

 

16.4

 

63.6

 

 

 

 

 

 

 

 

Other

 

24,003

 

24,486

 

26,827

 

 

(2.0

)

(10.5

)

 

 

 

 

 

 

 

Total

 

$

16,373,578

 

$

16,050,525

 

$

15,651,648

 

 

2.0

 

4.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First mortgage lien

 

$

 3,498,068

 

$

 3,606,635

 

$

 3,918,411

 

 

(3.0

)%

(10.7

)%

 

$

3,607,408

 

$

4,056,845

 

 

(11.1

)%

Junior lien

 

2,607,811

 

2,498,151

 

2,484,201

 

 

4.4

 

5.0

 

 

2,571,271

 

2,405,832

 

 

6.9

 

Total consumer real estate

 

6,105,879

 

6,104,786

 

6,402,612

 

 

 

(4.6

)

 

6,178,679

 

6,462,677

 

 

(4.4

)

Commercial

 

3,144,135

 

3,131,320

 

3,282,880

 

 

0.4

 

(4.2

)

 

3,132,588

 

3,321,458

 

 

(5.7

)

Leasing and equipment finance

 

3,575,698

 

3,500,647

 

3,261,638

 

 

2.1

 

9.6

 

 

3,504,194

 

3,232,873

 

 

8.4

 

Inventory finance

 

1,806,271

 

2,061,437

 

1,637,538

 

 

(12.4

)

10.3

 

 

1,908,628

 

1,731,022

 

 

10.3

 

Auto finance

 

1,603,392

 

1,518,194

 

973,418

 

 

5.6

 

64.7

 

 

1,483,951

 

823,316

 

 

80.2

 

Other

 

11,599

 

12,040

 

12,299

 

 

(3.7

)

(5.7

)

 

12,299

 

12,996

 

 

(5.4

)

Total

 

$

16,246,974

 

$

16,328,424

 

$

15,570,385

 

 

(0.5

)

4.3

 

 

$

16,220,339

 

$

15,584,342

 

 

4.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·                 Period-end loans and leases were $16.4 billion at September 30, 2014, an increase of $0.7 billion, or 4.6 percent, compared with September 30, 2013 and a increase of $0.3 billion, or 2.0 percent, compared with June 30, 2014. Average loans and leases were $16.2 billion for the third quarter of 2014, an increase of $0.7 billion, or 4.3 percent, compared with the third quarter of 2013 and a decrease of $0.1 billion, or 0.5 percent, compared with the second quarter of 2014.

 

The increase in period-end loans and leases from both periods and the increase in average loans and leases from the third quarter of 2013 were primarily due to the continued growth of the auto finance portfolio as TCF expands the number of active dealers and sales force in its network and further penetrates existing territories, as well as an increase in the leasing and equipment finance portfolio.

 

·                 Loan and lease originations were $3.6 billion for the third quarter of 2014, an increase of $461.3 million, or 14.9 percent, compared with the third quarter of 2013 and an increase of $92.8 million, or 2.7 percent, compared with the second quarter of 2014. The increase from the third quarter of 2013 was primarily due to the continued growth in auto finance and an increase in leasing and equipment finance and commercial originations. The increase from the second quarter of 2014 was primarily due to increased fundings in the

 

-more-

 



 

6

 

commercial business and continued growth in auto finance, partially offset by seasonality within the inventory finance business.

 

·                 Period-end and average loan and lease balances were impacted by $484.4 million of auto finance loan sales and $233.6 million of consumer real estate loan sales during the third quarter of 2014.

 

Credit Quality

 

Credit Trends

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 4

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent Change

 

(Dollars in thousands)

 

3Q

 

2Q

 

1Q

 

4Q

 

3Q

 

3Q14 vs

 

3Q14 vs

 

 

 

 

2014

 

2014

 

2014

 

2013

 

2013

 

2Q14

 

3Q13

 

 

Non-accrual loans and leases and other real estate owned

 

$

342,725

 

$

325,374

 

$

330,127

 

$

345,896

 

$

348,452

 

5.3

%

(1.6

)%

 

Over 60-day delinquencies (1)

 

27,019

 

28,094

 

30,638

 

30,194

 

38,638

 

(3.8

)

(30.1

)

 

Net charge-offs

 

26,937

 

18,355

 

17,416

 

30,096

 

27,616

 

46.8

 

(2.5

)

 

Provision for credit losses

 

15,739

 

9,909

 

14,492

 

22,792

 

24,602

 

58.8

 

(36.0

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Excludes acquired portfolios and non-accrual loans and leases

 

 

 

 

 

 

 

 

 

 

 

 

 

·                 Non-accrual loans and leases and other real estate owned totaled $342.7 million at September 30, 2014, a decrease of $5.7 million, or 1.6 percent, from September 30, 2013, and an increase of $17.4 million, or 5.3 percent, from June 30, 2014. The decrease from September 30, 2013 was primarily due to improving credit quality trends and continued efforts to actively work out problem loans in the commercial portfolio. The increase from June 30, 2014 was driven by the migration of two commercial loans to non-accrual and an increase in the consumer loan portfolio.

 

·                 The over 60-day delinquency rate, excluding acquired portfolios and non-accrual loans and leases, was 0.17 percent at September 30, 2014, down from 0.25 percent at September 30, 2013, and down slightly from 0.18 percent at June 30, 2014. The decrease from September 30, 2013 was primarily a result of the stabilization of the consumer real estate portfolio as economic conditions improved in our markets.

 

·                 Net charge-offs were $26.9 million for the third quarter of 2014, a decrease of $0.7 million, or 2.5 percent, from the third quarter of 2013, and an increase of $8.6 million, or 46.8 percent, from the second quarter of 2014. The decrease from the third quarter of 2013 was primarily due to improved credit quality in the commercial portfolio resulting in  net recoveries for the third quarter of 2014. The increase from the second quarter of 2014 was primarily due to increased charge-offs in the consumer loan portfolio as a result of a more conservative approach on credit. The over 60-day delinquent consumer real estate loan balance and delinquency rate, excluding acquired portfolios and non-accrual loans, were $17.1 million and 0.3 percent at September 30, 2014, compared to $23.1 million and 0.4 percent at June 30, 2014.

 

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7

 

·                 Provision for credit losses was $15.7 million for the third quarter of 2014, a decrease of $8.9 million, or 36.0 percent, from the third quarter of 2013, and an increase of $5.8 million, or 58.8 percent, from the second quarter of 2014. The decrease from the third quarter of 2013 was primarily due to reduced reserve requirements in the consumer real estate portfolio. The increase from the second quarter of 2014 was primarily due to increased charge-offs in the consumer loan portfolio as a result of a more conservative approach on credit. The over 60-day delinquent consumer real estate loan balance and delinquency rate, excluding acquired portfolios and non-accrual loans, were $17.1 million and 0.3 percent at September 30, 2014, compared to $23.1 million and 0.4 percent at June 30, 2014.

 

Deposits

 

Average Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 5

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

(Dollars in thousands)

 

   3Q

 

   2Q

 

   3Q

 

3Q14 vs

3Q14 vs

  YTD

 

  YTD

 

Percent

 

 

2014

 

2014

 

2013

 

2Q14

3Q13

2014

 

2013

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking

 

$

5,077,753

 

$

5,098,650

 

$

4,833,196

 

(0.4

)%

5.1

%

$

5,064,401

 

$

4,834,368

 

4.8

%

Savings

 

5,524,409

 

5,908,219

 

6,258,866

 

(6.5

)

(11.7

)

5,856,259

 

6,152,292

 

(4.8

)

Money market

 

1,527,820

 

1,019,543

 

822,094

 

49.9

 

85.8

 

1,124,821

 

809,800

 

38.9

 

Subtotal

 

12,129,982

 

12,026,412

 

11,914,156

 

0.9

 

1.8

 

12,045,481

 

11,796,460

 

2.1

 

Certificates of deposit

 

3,028,259

 

2,742,832

 

2,401,811

 

10.4

 

26.1

 

2,773,254

 

2,362,274

 

17.4

 

Total average deposits

 

$

15,158,241

 

$

14,769,244

 

$

14,315,967

 

2.6

 

5.9

 

$

14,818,735

 

$

14,158,734

 

4.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average interest rate on deposits (1)

 

0.28

%

0.24

%

0.27

%

 

 

 

 

0.25

%

0.27

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Annualized.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·                 Total average deposits for the third quarter of 2014 increased $842.3 million, or 5.9 percent, from the third quarter of 2013 and increased $389.0 million, or 2.6 percent, from the second quarter of 2014. The increases from both periods were primarily due to special campaigns for certificates of deposit and money market accounts. The increase from the third quarter of 2013 was further driven by higher average checking account balances per customer.

 

·                 The average interest rate on deposits for the third quarter of 2014 was 0.28 percent, up 1 basis point from the third quarter of 2013 and up 4 basis points from the second quarter of 2014. The increases from both periods were primarily due to increased average interest rates resulting from promotions for money market accounts. The increase from the second quarter of 2014 was further driven by certificates of deposit promotions.

 

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8

 

Non-interest Expense

 

Non-interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 6

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

(Dollars in thousands)

 

3Q

 

2Q

 

3Q

 

3Q14 vs

3Q14 vs

YTD

 

YTD

 

Percent

 

 

2014

 

2014

 

2013

 

2Q14

3Q13

2014

 

2013

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

$

112,393

 

$

109,664

 

$

110,833

 

2.5

%

1.4

%

 $

337,146

 

$

320,599

 

5.2

%

Occupancy and equipment

 

34,121

 

34,316

 

33,253

 

(0.6

)

2.6

 

103,276

 

99,190

 

4.1

 

FDIC insurance

 

7,292

 

7,625

 

8,102

 

(4.4

)

(10.0

)

22,480

 

24,174

 

(7.0

)

Operating lease depreciation

 

7,434

 

6,613

 

6,706

 

12.4

 

10.9

 

20,274

 

18,491

 

9.6

 

Advertising and marketing

 

5,336

 

5,862

 

4,593

 

(9.0

)

16.2

 

16,676

 

15,857

 

5.2

 

Deposit account premiums

 

320

 

383

 

664

 

(16.4

)

(51.8

)

1,121

 

1,866

 

(39.9

)

Other

 

47,888

 

42,618

 

43,730

 

12.4

 

9.5

 

131,841

 

123,615

 

6.7

 

Subtotal

 

214,784

 

207,081

 

207,881

 

3.7

 

3.3

 

632,814

 

603,792

 

4.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreclosed real estate and repossessed assets, net

 

5,315

 

5,743

 

4,162

 

(7.5

)

27.7

 

17,126

 

21,884

 

(21.7

)

Other credit costs, net

 

(411

)

371

 

189

 

N.M.  

N.M.  

79

 

(876

)

N.M. 

Total non-interest expense

 

$

219,688

 

$

213,195

 

$

212,232

 

3.0

 

3.5

 

 $

650,019

 

$

624,800

 

4.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

N.M. Not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·                 Compensation and employee benefits expense increased $1.6 million, or 1.4 percent, from the third quarter of 2013 and increased $2.7 million, or 2.5 percent, from the second quarter of 2014. The increase from the third quarter of 2013 was primarily due to increased staff levels to support the growth of auto finance and risk management. The increase from the second quarter of 2014 was primarily due to increased expenses related to higher commissions based on production results and performance incentives, as well as increased staff levels to support the growth of the auto finance business.

 

·                Foreclosed real estate and repossessed assets expense increased $1.2 million, or 27.7 percent, from the third quarter of 2013 and decreased $0.4 million, or 7.5 percent, compared to the second quarter of 2014. The increase from the third quarter of 2013 was primarily due to fewer gains on the sales of foreclosed consumer real estate properties and an increase in maintenance expense related to commercial properties. The decrease from the second quarter of 2014 was primarily due to a reduction in write-downs of existing foreclosed commercial properties as a result of improved exit values.

 

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9

 

Capital

 

Capital Information

 

 

 

 

 

 

 

Table 7

 

At period end

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands, except per-share data)

 

3Q 2014

 

4Q 2013

Total equity

 

$

2,113,432

 

 

 

 

$

1,964,759

 

 

 

Book value per common share

 

$

10.98

 

 

 

 

$

10.23

 

 

 

Tangible book value per common share (1)

 

$

9.60

 

 

 

 

$

8.83

 

 

 

Tangible common equity to tangible assets (1)

 

8.54

%

 

 

 

8.03

%

 

 

Capital accumulation rate (2)

 

12.19

%

 

 

 

9.72

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk-based capital (3)

 

 

 

 

 

 

 

 

 

 

Tier 1

 

$

1,902,785

 

11.64

%

 

$

1,763,682

 

11.41

%

Total

 

2,232,412

 

13.65

 

 

2,107,981

 

13.64

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 leverage capital

 

$

1,902,785

 

10.19

%

 

$

1,763,682

 

9.71

%

 

 

 

 

 

 

 

 

 

 

 

Tier 1 common capital (4)

 

$

1,624,700

 

9.94

%

 

$

1,488,651

 

9.63

%

 

 

 

 

 

 

 

 

 

 

 

(1) Excludes the impact of preferred shares, goodwill and other intangibles (see “Reconciliation of GAAP to Non-GAAP Financial Measures” table).

(2) Calculated as the change in annualized year to date Tier 1 common capital as a percentage of prior period Tier 1 common capital.

(3) The Company’s capital ratios continue to be in excess of “well-capitalized” regulatory benchmarks.

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

 

·                 Capital ratios continue to improve as the Company accumulates capital through earnings.

 

·                 On October 20, 2014, TCF’s Board of Directors declared a regular quarterly cash dividend of 5 cents per common share, payable on December 1, 2014, to stockholders of record at the close of business on November 14, 2014. TCF also declared dividends on the 7.50% Series A and 6.45% Series B Non-Cumulative Perpetual Preferred Stock, both payable on December 1, 2014, to stockholders of record at the close of business on November 14, 2014.

 

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10

 

Webcast Information

 

A live webcast of TCF’s conference call to discuss the third quarter earnings will be hosted at TCF’s website, http://ir.tcfbank.com, on October 24, 2014 at 8:00 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 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. As of September 30, 2014, TCF had $19.0 billion in total assets and 382 branches in Minnesota, Illinois, Michigan, Colorado, Wisconsin, Indiana, 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 the U.S. and Canada. For more information about TCF, please visit http://ir.tcfbank.com.

 

 

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11

 

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, 2013, 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 in TCF’s primary banking markets; adverse economic, business and competitive developments such as shrinking interest margins, reduced demand for financial services and loan and lease products, deposit outflows, 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 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 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 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 as a result of the Dodd-Frank Act, or other legislative or regulatory developments such as mortgage foreclosure moratorium laws, further regulation of financial institution campus banking programs, use by municipalities of eminent domain on underwater mortgages, or imposition of underwriting or other limitations

 

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12

 

that impact the ability to use certain variable-rate 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’s fee revenue; 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; 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.

 

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 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 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 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 any of the supermarket chains in which TCF maintains supermarket branches; costs related to closing underperforming branches; 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 TCF’s balance sheet through programs or new opportunities; failure to successfully attract and retain new customers, including the failure to attract and retain manufacturers and dealers to expand the inventory finance business; 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, including the failure to develop and maintain technology necessary to satisfy customer demands.

 

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; the effect of interchange rate litigation against the Federal Reserve on debit card interchange fees; 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 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.

 

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13

 

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per-share data)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

Change

 

 

2014

 

2013

 

$

 

%

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

Loans and leases

 

$

205,604

 

 

$

203,879

 

 

$

1,725

 

 

0.8

 %

Securities available for sale

 

2,973

 

 

4,448

 

 

(1,475

)

 

(33.2

)

Securities held to maturity

 

1,445

 

 

57

 

 

1,388

 

 

N.M.

Investments and other

 

9,681

 

 

7,069

 

 

2,612

 

 

37.0

 

Total interest income

 

219,703

 

 

215,453

 

 

4,250

 

 

2.0

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

10,711

 

 

9,644

 

 

1,067

 

 

11.1

 

Borrowings

 

4,812

 

 

6,182

 

 

(1,370

)

 

(22.2

)

Total interest expense

 

15,523

 

 

15,826

 

 

(303

)

 

(1.9

)

Net interest income

 

204,180

 

 

199,627

 

 

4,553

 

 

2.3

 

Provision for credit losses

 

15,739

 

 

24,602

 

 

(8,863

)

 

(36.0

)

Net interest income after provision for credit losses

 

188,441

 

 

175,025

 

 

13,416

 

 

7.7

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges

 

40,255

 

 

42,457

 

 

(2,202

)

 

(5.2

)

Card revenue

 

12,994

 

 

13,167

 

 

(173

)

 

(1.3

)

ATM revenue

 

5,863

 

 

5,941

 

 

(78

)

 

(1.3

)

Subtotal

 

59,112

 

 

61,565

 

 

(2,453

)

 

(4.0

)

Leasing and equipment finance

 

24,383

 

 

28,778

 

 

(4,395

)

 

(15.3

)

Gains on sales of auto loans, net

 

14,863

 

 

7,140

 

 

7,723

 

 

108.2

 

Gains on sales of consumer real estate loans, net

 

8,762

 

 

4,152

 

 

4,610

 

 

111.0

 

Servicing fee income

 

5,880

 

 

3,619

 

 

2,261

 

 

62.5

 

Other

 

3,170

 

 

986

 

 

2,184

 

 

N.M.

Fees and other revenue

 

116,170

 

 

106,240

 

 

9,930

 

 

9.3

 

Losses on securities, net

 

(94

)

 

(80

)

 

(14

)

 

(17.5

)

Total non-interest income

 

116,076

 

 

106,160

 

 

9,916

 

 

9.3

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

112,393

 

 

110,833

 

 

1,560

 

 

1.4

 

Occupancy and equipment

 

34,121

 

 

33,253

 

 

868

 

 

2.6

 

FDIC insurance

 

7,292

 

 

8,102

 

 

(810

)

 

(10.0

)

Operating lease depreciation

 

7,434

 

 

6,706

 

 

728

 

 

10.9

 

Advertising and marketing

 

5,336

 

 

4,593

 

 

743

 

 

16.2

 

Deposit account premiums

 

320

 

 

664

 

 

(344

)

 

(51.8

)

Other

 

47,888

 

 

43,730

 

 

4,158

 

 

9.5

 

Subtotal

 

214,784

 

 

207,881

 

 

6,903

 

 

3.3

 

Foreclosed real estate and repossessed assets, net

 

5,315

 

 

4,162

 

 

1,153

 

 

27.7

 

Other credit costs, net

 

(411

)

 

189

 

 

(600

)

 

N.M.

Total non-interest expense

 

219,688

 

 

212,232

 

 

7,456

 

 

3.5

 

Income before income tax expense

 

84,829

 

 

68,953

 

 

15,876

 

 

23.0

 

Income tax expense

 

30,791

 

 

24,551

 

 

6,240

 

 

25.4

 

Income after income tax expense

 

54,038

 

 

44,402

 

 

9,636

 

 

21.7

 

Income attributable to non-controlling interest

 

1,721

 

 

1,607

 

 

114

 

 

7.1

 

Net income attributable to TCF Financial Corporation

 

52,317

 

 

42,795

 

 

9,522

 

 

22.3

 

Preferred stock dividends

 

4,847

 

 

4,847

 

 

 

 

 

Net income available to common stockholders

 

$

47,470

 

 

$

37,948

 

 

$

9,522

 

 

25.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.29

 

 

$

0.24

 

 

$

0.05

 

 

20.8

 %

Diluted

 

0.29

 

 

0.23

 

 

0.06

 

 

26.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.05

 

 

$

0.05

 

 

$

 

 

 %

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common and common equivalent shares outstanding (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

163,901

 

 

161,220

 

 

2,681

 

 

1.7

 %

Diluted

 

164,480

 

 

162,184

 

 

2,296

 

 

1.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

N.M. Not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

 

-more-

 



 

14

 

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per-share data)

(Unaudited)

 

 

 

Nine Months Ended September 30,

 

Change

 

 

2014

 

2013

 

$

 

%

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

Loans and leases

 

$

614,929

 

 

$

615,459

 

 

$

(530

)

 

(0.1

)%

Securities available for sale

 

8,941

 

 

13,880

 

 

(4,939

)

 

(35.6

)

Securities held to maturity

 

3,852

 

 

183

 

 

3,669

 

 

N.M.

Investments and other

 

26,699

 

 

19,089

 

 

7,610

 

 

39.9

 

Total interest income

 

654,421

 

 

648,611

 

 

5,810

 

 

0.9

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

27,625

 

 

28,176

 

 

(551

)

 

(2.0

)

Borrowings

 

15,241

 

 

19,673

 

 

(4,432

)

 

(22.5

)

Total interest expense

 

42,866

 

 

47,849

 

 

(4,983

)

 

(10.4

)

Net interest income

 

611,555

 

 

600,762

 

 

10,793

 

 

1.8

 

Provision for credit losses

 

40,140

 

 

95,576

 

 

(55,436

)

 

(58.0

)

Net interest income after provision for credit losses

 

571,415

 

 

505,186

 

 

66,229

 

 

13.1

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges

 

114,909

 

 

123,352

 

 

(8,443

)

 

(6.8

)

Card revenue

 

38,493

 

 

38,854

 

 

(361

)

 

(0.9

)

ATM revenue

 

16,976

 

 

17,274

 

 

(298

)

 

(1.7

)

Subtotal

 

170,378

 

 

179,480

 

 

(9,102

)

 

(5.1

)

Leasing and equipment finance

 

69,432

 

 

67,591

 

 

1,841

 

 

2.7

 

Gains on sales of auto loans, net

 

30,603

 

 

22,421

 

 

8,182

 

 

36.5

 

Gains on sales of consumer real estate loans, net

 

28,619

 

 

16,347

 

 

12,272

 

 

75.1

 

Servicing fee income

 

15,079

 

 

9,503

 

 

5,576

 

 

58.7

 

Other

 

8,341

 

 

3,384

 

 

4,957

 

 

146.5

 

Fees and other revenue

 

322,452

 

 

298,726

 

 

23,726

 

 

7.9

 

Gains (losses) on securities, net

 

1,047

 

 

(80

)

 

1,127

 

 

N.M.

Total non-interest income

 

323,499

 

 

298,646

 

 

24,853

 

 

8.3

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

337,146

 

 

320,599

 

 

16,547

 

 

5.2

 

Occupancy and equipment

 

103,276

 

 

99,190

 

 

4,086

 

 

4.1

 

FDIC insurance

 

22,480

 

 

24,174

 

 

(1,694

)

 

(7.0

)

Operating lease depreciation

 

20,274

 

 

18,491

 

 

1,783

 

 

9.6

 

Advertising and marketing

 

16,676

 

 

15,857

 

 

819

 

 

5.2

 

Deposit account premiums

 

1,121

 

 

1,866

 

 

(745

)

 

(39.9

)

Other

 

131,841

 

 

123,615

 

 

8,226

 

 

6.7

 

Subtotal

 

632,814

 

 

603,792

 

 

29,022

 

 

4.8

 

Foreclosed real estate and repossessed assets, net

 

17,126

 

 

21,884

 

 

(4,758

)

 

(21.7

)

Other credit costs, net

 

79

 

 

(876

)

 

955

 

 

N.M.

Total non-interest expense

 

650,019

 

 

624,800

 

 

25,219

 

 

4.0

 

Income before income tax expense

 

244,895

 

 

179,032

 

 

65,863

 

 

36.8

 

Income tax expense

 

88,755

 

 

61,554

 

 

27,201

 

 

44.2

 

Income after income tax expense

 

156,140

 

 

117,478

 

 

38,662

 

 

32.9

 

Income attributable to non-controlling interest

 

5,941

 

 

5,805

 

 

136

 

 

2.3

 

Net income attributable to TCF Financial Corporation

 

150,199

 

 

111,673

 

 

38,526

 

 

34.5

 

Preferred stock dividends

 

14,541

 

 

14,218

 

 

323

 

 

2.3

 

Net income available to common stockholders

 

$

135,658

 

 

$

97,455

 

 

$

38,203

 

 

39.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.83

 

 

$

0.61

 

 

$

0.22

 

 

36.1

%

Diluted

 

0.83

 

 

0.60

 

 

0.23

 

 

38.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.15

 

 

$

0.15

 

 

$

 

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common and common equivalent shares outstanding (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

163,311

 

 

160,838

 

 

2,473

 

 

1.5

%

Diluted

 

163,823

 

 

161,694

 

 

2,129

 

 

1.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

N.M. Not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

 

-more-

 



 

15

 

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

Change

 

 

2014

 

2013

 

$

 

%

Net income attributable to TCF Financial Corporation

 

$

52,317

 

 

$

42,795

 

 

$

9,522

 

 

22.3

%

Other comprehensive (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (losses) gains arising during the period

 

(862

)

 

850

 

 

(1,712

)

 

N.M.

Reclassification of net losses to net income

 

254

 

 

 

 

254

 

 

N.M.

Net investment hedges:

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains (losses) arising during the period

 

1,849

 

 

(647

)

 

2,496

 

 

N.M.

Foreign currency translation adjustment:

 

 

 

 

 

 

 

 

 

 

 

Unrealized (losses) gains arising during the period

 

(2,066

)

 

615

 

 

(2,681

)

 

N.M.

Recognized postretirement prior service cost and transition obligation:

 

 

 

 

 

 

 

 

 

 

 

 

Net actuarial losses arising during the period

 

(12

)

 

(11

)

 

(1

)

 

(9.1

)

Income tax expense

 

(464

)

 

(72

)

 

(392

)

 

N.M.

Total other comprehensive (loss) income

 

(1,301

)

 

735

 

 

(2,036

)

 

N.M.

Comprehensive income

 

$

51,016

 

 

$

43,530

 

 

$

7,486

 

 

17.2

 

 

 

 

Nine Months Ended September 30,

 

Change

 

 

2014

 

2013

 

$

 

%

Net income attributable to TCF Financial Corporation

 

$

150,199

 

 

$

111,673

 

 

$

38,526

 

 

34.5

%

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains (losses) arising during the period

 

19,652

 

 

(47,399

)