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Section 1: 8-K (CURRENT REPORT OF MATERIAL EVENTS OR CORPORATE CHANGES)

 

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): August 17, 2006

 


 

 

TCF FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

 


 

Delaware

 

001-10253

 

41-1591444

(State or other jurisdiction of

 

(Commission File Number)

 

(IRS Employer Identification No.)

incorporation or organization)

 

 

 

 

 

200 Lake Street East, Mail Code EX0-03-A, Wayzata, Minnesota 55391-1693

(Address of principal executive offices)

 

(612) 661-6500

(Registrant’s telephone number, including area code)

 


 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 



 

Item 2.02  Results of Operations and Financial Condition.

 

Information is being furnished herein in Exhibit 99.1 with respect to a presentation made by executive officers of TCF Financial Corporation (“the Company”) which will be webcast beginning at approximately 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on August 17, 2006. This information includes selected financial and operational information through the second quarter of 2006 and does not represent a complete set of financial statements and related footnotes 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 footnotes prepared in accordance with GAAP and management’s discussion and analysis included in the Company’s reports of Forms 10-K and 10-Q. The Company’s annual financial statements are subject to independent audit. These materials supplement investor presentation materials previously furnished as an exhibit to Current Reports on Form 8-K dated July 26, 2006. These materials are dated August 17, 2006, and TCF does not undertake to update the materials after that date. The presentation is also available on the Company’s web site at www.tcfexpress.com. TCF Financial Corporation’s Annual Report to Shareholders and its reports on Forms 10-K, 10-Q and 8-K and other publicly available information should be consulted for other important information about the Company.

 

Information contained herein, including Exhibit 99.1, shall not be deemed filed for the purposes of the Securities Exchange Act of 1934, nor shall such information and Exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such a filing.

 

Item 7.01    Regulation FD Disclosure.

 

Information is being furnished herein in Exhibit 99.1 with respect to a presentation made by executive officers of TCF Financial Corporation (“the Company”) which will be webcast beginning at approximately 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on August 17, 2006. This information includes selected financial and operational information through the second quarter of 2006 and does not represent a complete set of financial statements and related footnotes 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 footnotes prepared in accordance with GAAP and management’s discussion and analysis included in the Company’s reports of Forms 10-K and 10-Q. The Company’s annual financial statements are subject to independent audit. These materials supplement investor presentation materials previously furnished as an exhibit to Current Reports on Form 8-K dated July 26, 2006. These materials are dated August 17, 2006, and TCF does not undertake to update the materials after that date. The presentation is also available on the Company’s web site at www.tcfexpress.com. TCF Financial Corporation’s Annual Report to Shareholders and its reports on Forms 10-K, 10-Q and 8-K and other publicly available information should be consulted for other important information about the Company.

 

Information contained herein, including Exhibit 99.1, shall not be deemed filed for the purposes of the Securities Exchange Act of 1934, nor shall such information and Exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such a filing.

 

2



 

Item 9.01    Financial Statements and Exhibits.

 

(c)          Exhibits.

 

Exhibit No.

 

 

 

Description

 

 

 

 

99.1

 

Analyst Presentation of TCF Financial Corporation,

 

 

Dated August 17, 2006

 

 

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/ Lynn A. Nagorske

 

Lynn A. Nagorske,
Chief Executive Officer and Director

 

 

 

 

 

 

 

/s/ Neil W. Brown

 

Neil W. Brown, President
and Chief Financial Officer
(Principal Financial Officer)

 

 

 

 

 

 

 

/s/ David M. Stautz

 

David M. Stautz, Senior Vice President,
Controller and Assistant Treasurer
(Principal Accounting Officer)

 

 

 

 

Dated:    August 17, 2006

 

 

3


(Back To Top)

Section 2: EX-99.1 (EX-99)

Exhibit 99.1

 

TCF Financial Corporation

The leader in convenience banking

TCF Analyst Day

August 17, 2006

 

Cautionary Statement

 

This presentation and other reports issued by the Company, including reports filed with the SEC, may contain “forward-looking” statements that deal with future results, plans or performance.  In addition, TCF’s management may make such statements orally to the media, or to securities analysts, investors or others.  Forward-looking statements deal with matters that do not relate strictly to historical facts. TCF’s future results may differ materially from historical performance and forward-looking statements about TCF’s expected financial results or other plans and are subject to a number of risks and uncertainties.  These include but are not limited to possible legislative changes and adverse economic, business and competitive developments such as shrinking interest margins; deposit outflows; an inability to increase the number of checking accounts and the possibility that deposit account losses (fraudulent checks,etc.) may increase; reduced demand for financial services and loan and lease products; adverse developments affecting TCF’s supermarket banking relationships or any of the supermarket chains in which TCF maintains supermarket branches;  changes in accounting standards or interpretations of existing standards; monetary, fiscal or tax policies of the federal or state governments; adverse findings in tax audits or regulatory examinations; changes in credit and other risks posed by TCF’s loan, lease and investment portfolios, including declines in commercial or residential real estate values; imposition of vicarious liability on TCF as lessor in its leasing operations; denial of insurance coverage for claims made by TCF; technological, computer-related or operational difficulties or loss or theft of information; adverse changes in securities markets; and results of litigation, including reductions in card revenues resulting from litigation brought by various merchants or merchant organizations against Visa; or other significant uncertainties.  Investors should consult TCF’s Annual Report on Form 10-K, and Forms 10-Q and 8-K for additional important information about the Company.

 

1)    Strategic Overview & Business Update

 

Lynn A. Nagorske

Chief Executive Officer

 

2)    Corporate Profile

 

At June 30, 2006

 

              $14.2 billion financial holding company headquartered in Minnesota

              43rd largest1 U.S. based bank by asset size

              36th largest1 based on market cap

 

              455 bank branches, 136 branches opened since January 1, 2001

              22nd largest branch network2

 

              1,713 ATMs free to TCF customers; 1,210 off-site

 

              11th largest issuer of VISA® Classic debit cards3

 

              18th largest bank-owned equipment finance/leasing company in the U.S.4

 

              ROA5 1.82%; ROE5 25.80%; ROTE5,6 30.83%

 

              1,658,815 checking accounts

 

1     Source: CapitalBridge; 6/30/06

2     Source: SNL Financial, LLC; 7/3/06

3     Source: VISA; 1Q06; ranked by sales volume

4     Source: Equipment Leasing Association; 7/06

5     Annualized

6     Excludes the impact of intangibles (see reconciliation slide in the appendix)

 

3)    Corporate Profile

 

              Bank branches located in six states

 

 

 

At 6/30/06

 

At 1/1/01

Traditional

 

191

 

132

 

Supermarket

 

255

 

213

 

Campus

 

9

 

7

 

Total

 

455

 

352

 

 

 

 

At 6/30/06

 

At 1/1/01

Minnesota

 

106

 

84

 

Illinois

 

202

 

167

 

Michigan

 

62

 

56

 

Colorado

 

44

 

12

 

Wisconsin

 

35

 

32

 

Indiana

 

6

 

1

 

Total

 

455

 

352

 

 



 

4)    Corporate Strategy

 

              Convenience

              TCF banks a large and diverse customer base by offering a host of convenient banking services:

              Open seven days a week, 364 days/year

              Traditional, supermarket and campus branches

              1,713 ATMs free to TCF customers

              Debit cards

              Gift cards

              Phone banking

              TCF Totally Free OnlineSM banking

 

              De Novo Expansion

              TCF is increasing its market share through de novo expansion:

              Opening new branches

              Arizona

              Starting new businesses

              Offering new products and services

 



 

5)    Corporate Strategy

 

        The Checking Account is the Anchor Account of the Banking Relationship

              TCF has accumulated a large number of low cost checking accounts with significant fee income

              Over 47% of profits are earned from the deposit side of the bank

              TCF sources the majority of its consumer loans from its checking account base

 

        TCF Emphasizes Power Assets® and Power Liabilities® to Generate Power Profits

              These asset categories (consumer loans, commercial loans and leases) generate the highest returns and are funded by low interest cost core deposits

              TCF’s net interest margin of 4.22% is 76 basis points higher than the Top 50 Banks1 as a result of this strategy

              The Power Assets and Power Liabilities categories generate 90% of TCF’s profits

 

1          Source: CapitalBridge; 6/30/06

 

6)    Corporate Strategy

 

        Strong Credit Quality through Secured Lending

              As a result of our low cost deposit funding costs, we can minimize credit risk

 

        TCF believes interest-rate risk should be minimized since speculation does not generate consistent profits and is high risk

 

        Organized Geographically and by Function

              Banking process is local and decentralized

              Functional product line management is centralized

              Operational functions which involve paper processing are centralized to produce greater efficiencies

              Facilitates development of management and employee talent

 

        TCF uses technology to enhance productivity, customer service and develop new products

 

        Continue to repurchase TCF stock

 

7)    Power ProfitsSM

Average Balance ($ millions)

Profit center net income ($ 000s)

 

 

 

 

 

YTD 2006

 

 

 

 

 

Balance

 

Net Income

 

%

 

Commercial Lending

 

$

2,839

 

$

12,040

 

10

%

Consumer Lending

 

5,349

 

24,093

 

19

 

Leasing and Equipment Finance

 

1,579

 

17,256

 

14

 

Total Power Assets®

 

$

9,767

 

53,389

 

43

 

 

 

 

 

 

 

 

 

Traditional and Campus Branches

 

$

7,268

 

41,968

 

33

 

Supermarket Branches

 

2,030

 

18,141

 

14

 

Total Power Liabilities®

 

$

9,298

 

60,109

 

47

 

Total Power Assets & Liabilities

 

 

 

113,498

 

90

 

Equity and Other

 

 

 

11,785

 

10

 

Net Income

 

 

 

$

125,283

 

100

%

 

 

 

 

 

 

 

 

ROA1

 

 

 

1.82

%

 

 

ROE1

 

 

 

25.80

%

 

 

 

1       Annualized

 



 

8)    Interest Rate Risk & Capital Strategies

 

Neil W. Brown

President & Chief Financial Officer

 

9)    U.S. Treasury Yields

(Percent)

 

 

 

Fed Funds

 

3 Month

 

1 Year

 

2 Year

 

5 Year

 

10 Year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

August 2006

 

5.26

%

5.10

%

5.08

%

4.91

%

4.85

%

4.93

%

August 2005

 

3.50

 

3.54

 

3.93

 

4.16

 

4.28

 

4.42

 

Change

 

1.76

%

1.56

%

1.15

%

0.75

%

0.57

%

0.51

%

 



 

10)  TCF NIM vs. Top 50 Banks1

(Percent)

 

 

 

TCF

 

Top 50 Banks1

 

2Q01

 

4.40

 

3.87

 

3Q01

 

4.55

 

3.87

 

4Q01

 

4.74

 

3.85

 

1Q02

 

4.83

 

4.09

 

2Q02

 

4.76

 

3.93

 

3Q02

 

4.68

 

4.06

 

4Q02

 

4.59

 

3.90

 

1Q03

 

4.45

 

3.80

 

2Q03

 

4.45

 

3.64

 

3Q03

 

4.57

 

3.72

 

4Q03

 

4.68

 

3.70

 

1Q04

 

4.52

 

3.56

 

2Q04

 

4.53

 

3.53

 

3Q04

 

4.56

 

3.53

 

4Q04

 

4.56

 

3.54

 

1Q05

 

4.56

 

3.56

 

2Q05

 

4.53

 

3.56

 

3Q05

 

4.43

 

3.53

 

4Q05

 

4.31

 

3.50

 

1Q06

 

4.25

 

3.50

 

2Q06

 

4.22

 

3.46

 

 

 

 

2Q01

 

2Q06

 

Change

 

TCF

 

4.40

%

4.22

%

(18)bps

 

Top 50 Banks1

 

3.87

%

3.46

%

(41)bps

 

Difference

 

53 bps

 

76 bps

 

23 bps

 

 

1 Source: CapitalBridge

 

11)  One Year Interest Rate Gap

($ millions)

 

 

 

12/02

 

12/03

 

12/04

 

12/05

 

6/06

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Gap

 

$

1,110

 

$

161

 

$

585

 

$

318

 

$

(632

)

 

 

 

 

 

 

 

 

 

 

 

 

% of Total Assets

 

9.1

%

1.0

%

4.7

%

2.4

%

(4.4%

)

 

12)  Changes in Net Interest Margin

 

 

 

 

 

2006

 

 

 

 

 

Second Quarter

 

First Quarter

 

Prior quarter

 

4.25

%

4.31

%

 

 

 

 

 

 

 

 

 

Balance sheet growth

 

(0.04

)

(0.08

)

 

Asset remix and gross yields

 

(0.05

)

(0.04

)

 

Repricing of variable-rate assets and liabilities

 

0.06

 

0.07

 

 

Other, net

 

-

 

(0.01

)

 

 

 

 

 

 

 

 

Current quarter

 

4.22

%

4.25

%

 

13)  Total Power Asset and Power Liability Growth

Quarterly Average Balances

($ millions)

 

 

 

2006

 

2005

 

Change

 

Power Asset Growth

 

 

 

 

 

 

 

 

 

Consumer home equity and other

 

$

5,445

 

$

4,677

 

$

768

 

16.4

%

Commercial

 

2,899

 

2,633

 

266

 

10.1

 

Leasing and equipment finance

 

1,625

 

1,412

 

213

 

15.1

 

Power Assets

 

$

9,969

 

$

8,722

 

$

1,247

 

14.3

%

 

 

 

 

 

 

 

 

 

 

Average yield

 

7.18

%

6.52

%

66 bps

 

 

 

 

 

 

 

 

 

 

 

 

 

Power Liability Growth

 

 

 

 

 

 

 

 

 

Non-interest bearing deposits

 

$

2,397

 

$

2,472

 

$

(75

)

(3.0%

)

Interest-bearing checking

 

1,895

 

1,655

 

240

 

14.5

 

Savings and money market

 

2,882

 

2,584

 

298

 

11.5

 

Certificates of deposit

 

2,250

 

1,708

 

542

 

31.7

 

Power Liabilities

 

$

9,424

 

$

8,419

 

$

1,005

 

11.9

%

 

 

 

 

 

 

 

 

 

 

Average rate

 

1.97

%

.98

%

99 bps

 

 

 

 



 

14)  Consumer Home Equity and Commercial Loans

Quarterly Average Balances

($ million)

 

 

 

 

 

 

 

Change
Inc./(Dec.)

 

 

 

6/30/06

 

6/30/05

 

$

 

 

 

%

 

Consumer Home Equity:

 

 

 

 

 

 

 

 

 

 

 

Variable-rate

 

$

1,689

 

$

2,595

 

$

(906

)

 

 

(35

)%

Yield

 

8.69

%

6.77

%

 

 

192 bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed-rate

 

$

3,722

 

$

2,048

 

$

1,674

 

 

 

82

%

Yield

 

6.80

%

6.72

%

 

 

8 bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

Variable-rate

 

$

1,098

 

$

1,194

 

$

(96

)

 

 

(8

)%

Yield

 

7.56

%

5.67

%

 

 

189 bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed- and adjustable-rate

 

$

1,801

 

$

1,439

 

$

362

 

 

 

25

%

Yield

 

6.23

%

6.12

%

 

 

11 bps

 

 

 

 

15)  Premier Checking & Savings Deposits +101%*

Quarterly Average Balances

($ 000s)

 

 

 

6/30/05

 

9/30/05

 

12/31/05

 

3/31/06

 

6/30/06

 

 

 

 

 

 

 

 

 

 

 

 

 

Premier Savings

 

$

346

 

$

437

 

$

640

 

$

780

 

$

856

 

Premier Checking

 

580

 

695

 

828

 

938

 

1,001

 

Total

 

$

926

 

$

1,132

 

$

1,468

 

$

1,718

 

$

1,857

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Rate:

 

2.21

%

2.87

%

3.27

%

3.38

%

3.57

%

1-month LIBOR spread

 

(.90

)

(.73

)

(.90

)

(1.23

)

(1.52

)

 

*Twelve-month growth rate

 

16)  Capital

 

17)  Realized Tangible Equity¹

($ millions)

 

 

 

12/02

 

12/03

 

12/04

 

12/05

 

6/06

 

 

 

 

 

 

 

 

 

 

 

 

 

Realized Tangible Equity1

 

$

778

 

$

764

 

$

803

 

$

865

 

$

879

 

 

 

 

 

 

 

 

 

 

 

 

 

% of Total Assets:

 

6.38

%

6.75

%

6.51

%

6.47

%

6.19

%

 

 

 

 

 

 

 

 

 

 

 

 

Target (6%):

 

$

732

 

$

679

 

$

740

 

$

802

 

$

852

 

 

 

 

 

 

 

 

 

 

 

 

 

Excess Over Target:

 

$

46

 

$

85

 

$

63

 

$

63

 

$

27

 

 

¹       See reconciliation to GAAP in appendix

 



 

18)  Risk-Based Capital

($ millions)

 

 

 

12/02

 

12/03

 

12/04

 

12/05

 

6/06

 

 

 

 

 

 

 

 

 

 

 

 

 

Actual

 

$

851

 

$

842

 

$

959

 

$

1,050

 

$

1,138

 

Well Capitalized Requirement

 

$

777

 

$

785

 

$

881

 

$

983

 

$

1,023

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1:

 

9.96

%

9.75

%

9.12

%

8.79

%

8.58

%

Total:

 

10.95

%

10.73

%

10.88

%

10.68

%

11.12

%

 

 

 

 

 

 

 

 

 

 

 

 

Target (10.6%):

 

$

832

 

$

824

 

$

934

 

$

1,042

 

$

1,084

 

Excess RBC:

 

$

74

 

$

57

 

$

77

 

$

67

 

$

115

 

Excess Over Target:

 

$

19

 

$

18

 

$

25

 

$

8

 

$

54

 

 

19)  Return of Net Income to Stockholders

($ millions)

 

 

 

Net

 

Dividends

 

Stock

 

 

 

% of Net

 

 

 

Income

 

Paid

 

Repurchase

 

Total

 

Income

 

 

 

 

 

 

 

 

 

 

 

 

 

2002

 

$

232.9

 

$

86.5

 

$

148.0

 

$

234.5

 

101

%

2003

 

215.9

 

93.0

 

150.4

 

243.4

 

113

 

2004

 

255.0

 

104.0

 

116.1

 

220.1

 

86

 

2005

 

265.1

 

114.5

 

93.5

 

208.0

 

78

 

2006¹

 

125.3

 

61.1

 

73.9

 

135.0

 

108

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

1,094.2

 

$

459.1

 

$

581.9

 

$

1,041.0

 

95

%

 

¹  Year-to-date

 

20)  Share Repurchase Program

 

              Repurchased 2,900,000 shares of common stock during the first six months of 2006 at an average cost of $25.47 per share

 

              At 6/30/06, 3.8 million shares remain available to purchase under board authorizations

 



 

21)  Dividend History

 

10-year compounded annual growth rate of 18% is the 5th highest among the 50 largest banks in the country¹

 

 

 

1996

 

1997

 

1998

 

1999

 

2000

 

2001

 

2002

 

2003

 

2004

 

2005

 

2006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends Paid

 

$

.18

 

$

.23

 

$

.31

 

$

.36

 

$

.41

 

$

.50

 

$

.58

 

$

.65

 

$

.75

 

$

.85

 

$

.46

²

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend Payout Ratio:

 

30

%

28

%

35

%

36

%

35

%

37

%

37

%

43

%

40

%

43

%

48

%

 

¹       Source:  CapitalBridge

²       Year-to-date

 

22)  New Branch Expansion, Checking & Small Business Banking

 

Barry N. Winslow

Chief Operating Officer

 

23)  Total New Branches

Branches opened since January 1, 2001

 

 

 

12/01

 

12/02

 

12/03

 

12/04

 

12/05

 

6/06

 

12/06
Projected

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Supermarket Branches

 

20

 

35

 

40

 

51

 

58

 

61

 

64

 

 Traditional and Campus Branches

 

5

 

17

 

31

 

50

 

71

 

75

 

89

 

Total

 

25

 

52

 

71

 

101

 

129

 

136

 

153

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

# of Branches Opened:

 

27

 

27

 

19

 

30

 

28

 

7

 

24

 

Percent of Total:

 

7

%

13

%

18

%

23

%

28

%

30

%

32

%

 



 

24)  2006 New Branch Expansion

 

 

 

Traditional

 

Supermarket

 

Campus

 

Total

 

Minnesota

 

-

 

3

 

-

 

3

 

Lakeshore

 

4

 

3

 

2

 

9

 

Michigan

 

6

 

-

 

1

 

7

 

Colorado

 

4

 

-

 

-

 

4

 

Arizona

 

1

 

-

 

-

 

1

 

Total

 

15

 

6

 

3

 

24

 

 

25)  New Traditional Branch Model - Net Income

($ 000s)

 

 

 

Year of Existence

 

 

 

1

 

2

 

3

 

4

 

5

 

6

 

7

 

8

 

9

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income¹

 

$

(386

)

$

(103

)

$

(5

)

$

182

 

$

237

 

$

355

 

$

417

 

$

450

 

$

556

 

$

645

 

 

Traditional branch capital expenditure $3.5 million

 

¹       Includes deposits and consumer lending

 

26)  New Branch Total Deposits +79%*

Branches opened since January 1, 2001

($ millions)

 

 

 

12/01

 

12/02

 

12/03

 

12/04

 

12/05

 

6/06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

24

 

$

142

 

$

238

 

$

442

 

$

980

 

$

1,246

 

 

*      Twelve-month growth rate

 

27)  New Branch Total Checking Accounts +35%*

Branches opened since January 1, 2001

(000s)

 

 

 

12/01

 

12/02

 

12/03

 

12/04

 

12/05

 

6/06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking Accounts

 

29

 

60

 

103

 

158

 

214

 

252

 

 

*      Twelve-month growth rate

 

28)  New Branch Banking Fees & Other Revenue¹ +38%*     

Branches opened since January 1, 2001

($ millions)

 

 

 

2001

 

2002

 

2003

 

2004

 

2005

 

2006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Quarter

 

$

-

 

$

1.1

 

$

3.1

 

$

6.3

 

$

10.9

 

$

15.4

 

Second Quarter

 

0.1

 

1.7

 

4.2

 

9.9

 

13.8

 

18.6

 

Third Quarter

 

0.3

 

2.1

 

4.9

 

10.6

 

15.0

 

-

 

Fourth Quarter

 

0.8

 

2.9

 

5.5

 

11.2

 

15.3

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

1.2

 

$

7.8

 

$

17.7

 

$

38.0

 

$

55.0

 

$

34.0

 

 

¹       Consisting of fees and service charges, card revenue, ATM revenue, and investments and insurance revenue

*      Twelve-month growth rate

 

29)  Checking Accounts +7%*

(000s)

 

 

 

12/02

 

12/03

 

12/04

 

12/05

 

6/06

 

 

 

 

 

 

 

 

 

 

 

 

 

Supermarket Branches

 

549

 

608

 

652

 

678

 

700

 

Traditional and Campus Branches

 

789

 

836

 

883

 

925

 

959

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

1,338

 

1,444

 

1,535

 

1,603

 

1,659

 

 

*      Year-to-date growth rate (annualized)

 

30)  Banking Fees and Other Revenue¹ +7%*

($ millions)

 

 

 

2002

 

2003

 

2004

 

2005

 

2006

 

 

 

 

 

 

 

 

 

 

 

 

 

First Quarter

 

$

72.7

 

$

82.1

 

$

87.7

 

$

88.2

 

$

94.4

 

Second Quarter

 

84.7

 

92.8

 

104.5

 

100.1

 

106.7

 

Third Quarter

 

87.7

 

94.3

 

103.0

 

104.7

 

-

 

Fourth Quarter

 

91.3

 

90.8

 

99.1

 

101.1

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

336

 

$

360

 

$

394

 

$

394

 

$

201

 

 

¹       Consisting of fees and service charges, card revenue, ATM revenue, and investments and insurance revenue

*      Year-to-date growth rate (‘06 vs. ‘05)

 



 

31)  Retail Checking Deposits +9%*

($ millions)

 

 

 

12/02

 

12/03

 

12/04

 

12/05

 

6/06

 

 

 

 

 

 

 

 

 

 

 

 

 

Supermarket Branches

 

$

695

 

$

829

 

$

1,000

 

$

1,125

 

$

1,174

 

Traditional and Campus Branches

 

1,903

 

2,146

 

2,565

 

2,815

 

2,863

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

2,598

 

$

2,975

 

$

3,565

 

$

3,940

 

$

4,037

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Rate:

 

.05

%

.01

%

.22

%

.74

%

.86

%

 

*      Twelve-month growth rate

 

32)  Small Business Banking

 

33)  Small Business Checking Deposits

($ millions)

 

 

 

12/02

 

12/03

 

12/04

 

12/05

 

6/06

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Business Checking Deposits

 

$

380

 

$

461

 

$

546

 

$

607

 

$

617

 

 

 

 

 

 

 

 

 

 

 

 

 

 # of Accounts

 

91,385

 

102,557

 

113,605

 

122,956

 

130,314

 

 

34)  Small Business Services and Products

 

At June 30, 2006

 

              $617 million in 0% interest checking account deposits

 

              Small business loans up to $500,000; small business administration loans up to $150,000; home equity loans up to $500,000

 

              86,440 TCF Business Check Cards SM

 

              Introduced TCF Miles Plus Business Check Card SM loyalty program in April 2005

 

              TCF Personal Pay Day® - employee benefit package (checking, savings, loan discounts, etc.) through participating businesses

 



 

35)  Banking Fee Income & Card Products

 

Earl D. Stratton

Chief Information Officer

 

36)  Summary of Banking Fee Income
($ millions)

 

For the Six Months

 

 

 

 

 

 

 

Ended June:

 

2006

 

2005

 

Change

 

Fees & service charges

 

$

132.7

 

$

124.7

 

6

%

Card revenue

 

44.2

 

37.4

 

18

 

ATM

 

18.9

 

20.5

 

(8

)

Other

 

5.3

 

5.6

 

(5

)

Total

 

$

201.1

 

$

188.2

 

7

%

 

37)  Customer Payment Activity
Transaction Volume
(millions)

 

 

 

YTD 2Q06

 

YTD 2Q05

 

% Increase/
Decrease

 

 

 

 

 

 

 

 

 

Checks

 

48.2

 

54.5

 

(11.6

)%

ACH

 

16.9

 

13.8

 

22.4

%

ATM

 

16.5

 

16.5

 

(.3

)%

Debit Card Purchases

 

86.5

 

75.0

 

15.3

%

 

38)  Customer Behavior

 

              Debit card transactions continue to replace checks

              More debit card transactions than checks

              More ACH transactions

              More internet banking customers

              Lower average account balances in 2006

 

39)  Card Revenue +18%*

($ millions)

 

 

 

2002

 

2003

 

2004

 

2005

 

2006

 

 

 

 

 

 

 

 

 

 

 

 

 

First Quarter

 

$

10.2

 

$

13.2

 

$

13.5

 

$

17.6

 

$

21.3

 

Second Quarter

 

11.8

 

14.8

 

16.0

 

19.8

 

22.9

 

Third Quarter

 

12.1

 

12.9

 

16.3

 

21.0

 

-

 

Fourth Quarter

 

13.1

 

12.1

 

17.7

 

21.4

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

47.2

 

$

53.0

 

$

63.5

 

$

79.8

 

$

44.2

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales Volume:

 

$

3,216

 

$

3,899

 

$

4,735

 

$

5,673

 

$

3,157

¹

 

 

 

 

 

 

 

 

 

 

 

 

Avg. Off-line Interchange Rate:

 

1.55

%

1.43

%

1.40

%

1.43

%

1.42

 

*      Year-to-date growth rate (‘06 vs. ‘05)

¹       Year-to-date

 



 

40)  Card Revenue

 

              11th largest issuer of VISA® Classic debit cards¹

 

              15th largest issuer of VISA® Commercial debit cards¹

 

              20th largest overall issuer of VISA® cards¹

 

              17% increase in sales volume2

 

              Number of active accounts up 44,150, or 6%2, to 805,382

 

              16.6 transactions per month on active cards, up 9%2

 

1  Source: VISA; 1Q06; ranked by sales volume

2 2Q06 vs. 2Q05

 



 

41)  TCF Visa® Gift Cards

 

              Convenience theme extension

              Holiday/event themed gift cards

 

              Purchase-fee free  for customers

 

              Multiple sales channels

 

              Bulk orders - online available

 

42)  Merchant Gift Cards

 

              Convenience differentiator

              Allows customers to personalize gift

 

 

              Purchase-fee free 

 

              Point of sale merchandising

 

              Available online

 

43)  Return to Stockholders¹ + 18%*

 

 

 

 

 

SNL All

 

 

 

Period Ending

 

 

TCF

 

Bank & Thrift

 

S&P 500

 

6/86

 

$

100.00

 

$

100.00

 

$

100.00

 

6/87

 

$

85.05

 

$

110.34

 

$

128.15

 

6/88

 

$

76.64

 

$

107.02

 

$

119.30

 

6/89

 

$

105.59

 

$

130.55

 

$

143.82

 

6/90

 

$

76.26

 

$

119.91

 

$

167.53

 

6/91

 

$

117.56

 

$

138.76

 

$

179.92

 

6/92

 

$

225.27

 

$

203.06

 

$

204.05

 

6/93

 

$

295.36

 

$

244.55

 

$

231.86

 

6/94

 

$

304.72

 

$

254.81

 

$

235.12

 

6/95

 

$

438.69

 

$

288.03

 

$

296.42

 

6/96

 

$

627.69

 

$

387.24

 

$

373.49

 

6/97

 

$

950.69

 

$

604.53

 

$

503.09

 

6/98

 

$

1,156.51

 

$

852.23

 

$

654.83

 

6/99

 

$

1,122.13

 

$

886.04

 

$

803.85

 

6/00

 

$

1,066.08

 

$

781.22

 

$

862.12

 

6/01

 

$

1,970.79

 

$

1,010.73

 

$

734.26

 

6/02

 

$

2,136.98

 

$

990.75

 

$

602.18

 

6/03

 

$

1,784.08

 

$

1,062.82

 

$

603.70

 

6/04

 

$

1,672.97

 

$

1,231.18

 

$

719.07

 

6/05

 

$

2,450.77

 

$

1,318.41

 

$

764.54

 

6/06

 

$

2,590.40

 

$

1,444.61

 

$

830.52

 

 

¹       Assumes $100 invested June 18, 1986 with dividends reinvested

*      Annualized return since June 18, 1986

Source:  SNL Financial, LC and S&P

 



 

44)  Consumer Lending & Commercial Lending

 

Timothy P. Bailey

Chief Executive Officer &

President, TCF National Bank

 

45)  Consumer Home Equity Lending +16%*

($ millions)

 

 

 

12/02

 

12/03

 

12/04

 

12/05

 

6/06

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

2,955

 

$

3,588

 

$

4,382

 

$

5,149

 

$

5,539

 

 

*      Twelve-month growth rate

 

46)  Consumer Home Equity Loans

 

At June 30, 2006

 

              77% amortizing loans, 23% lines of credit

 

              64% are 1st mortgages, 36% are 2nd mortgages

 

              70% fixed rate and 30% variable rate (prime based)

 

              Average home value of $234,2041

 

              Yield 7.45%

 

              Over-30-day delinquency rate .35%2

 

              Net charge-offs: 2006 = .10%3, 2005 = .10% , 2004 = .09%

 

              Average FICO score 720

 

1  Based on most recent appraisal values known to TCF

2  Excludes non-accrual loans

3  Annualized

 

47)  Geographic Statistics

 

 

 

Mpls./St. Paul

 

Chicago

 

Detroit

 

Denver

 

Milwaukee

 

Phoenix

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Population growth increase1

 

5.7

%

3.7

%

1.4

%

7.9

%

1.2

%

14.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unemployment2

 

3.5

%

4.7

%

7.0

%

5.2

%

5.5

%

3.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average home value3

 

$

250,239

 

$

252,306

 

$

199,807

 

$

269,388

 

$

161,112

 

$

366,997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home median appreciation4

 

7.13

%

9.33

%

2.86

%

5.10

%

7.51

%

32.81

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average FICO5

 

727

 

704

 

730

 

723

 

708

 

722

 

 

1   Change in population from 2000 to 2005

Source: Claritas, Inc. 2006

2  June 2006 unemployment rate; 2005 unemployment rate for Detroit and Denver areas

Source: U.S. Department of Labor

3   Average home value of TCF’s portfolio by state; based on most recent appraisal values known to TCF

4   Year-to-date state appreciation rate (1Q06 vs. 1Q05)

Source: Mortgage Guaranty Insurance Corporation (MGIC); July 2006

5   Average FICO score for TCF’s portfolio by state

 



 

48)  Commercial Lending 11%*

($ millions)

 

 

 

12/02

 

12/03

 

12/04

 

12/05

 

6/06

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Business

 

$

440.1

 

$

427.7

 

$

424.1

 

$

435.2

 

$

543.3

 

Commercial Real Estate

 

1,835.8

 

1,916.7

 

2,154.4

 

2,297.5

 

2,411.0

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

2,276

 

$

2,344

 

$

2,579

 

$

2,733

 

$

2,954

 

 

* Twelve-month growth rate

 

49)  Commercial Loans

 

At June 30, 2006

 

              Commercial real estate

              23% retail services

              20% apartment loans

              20% office buildings

 

              Commercial business – $543 million

 

              Yield 6.77%

 

              Over-30-day delinquency rate .01%¹

 

              Net charge-offs/(recoveries): 2006 = .03%², 2005 =(.08%) , 2004 = .03%

 

              Approximately 99% of all commercial loans secured

 

              CRE location mix: 94% Midwest, 6% Other

 

¹ Excludes non-accrual loans

² Annualized

 

50)  Commercial Real Estate Portfolio

($ 000s)

 

 

 

 

 

Construction &

 

 

 

At June 30, 2006:

 

Permanent

 

Development

 

Total

 

Retail services

 

$

531,026

 

$

33,479

 

$

564,505

 

Apartments

 

478,620

 

524

 

479,144

 

Office buildings

 

458,763

 

3,893

 

462,656

 

Warehouse/industrial buildings

 

293,237

 

10,727

 

303,964

 

Hotels and motels

 

107,034

 

-

 

107,034

 

Health care facilities

 

54,464

 

-

 

54,464

 

Other

 

321,060

 

118,201

 

439,261

 

Total

 

$

2,244,204

 

$

166,824

 

$

2,411,028

 

 

51)  Leasing & Equipment Finance

 

Craig R. Dahl

EVP, TCF Financial Corporation

President, TCF Equipment Finance

Chariman, Winthrop Resources Corp.

 

52)  Leasing and Equipment Finance¹ +21%*

($ millions)

 

 

 

12/02

 

12/03

 

12/04

 

12/05

 

6/06

 

 

 

 

 

 

 

 

 

 

 

 

 

Leasing and Equipment Finance

 

$

1,047

 

$

1,162

 

$

1,389

 

$

1,560

 

$

1,744

 

 

¹       Includes operating leases

*      Twelve-month growth rate

 



 

53)  Leasing and Equipment Finance

 

At June 30, 2006

 

              37th largest equipment finance/leasing company in the U.S.1

 

              18th largest bank-owned equipment finance/leasing company in the U.S.²

 

              Equipment type

              18% manufacturing

              18% specialty vehicle

              17% construction

              14% medical

              13% technology

              20% other

 

              Yield 7.37%

 

              YTD originations: 2006 = $530.2 million, 2005 = $380.5 million

 

              Uninstalled backlog of $277.5 million; up $28 million from year-end 2005

 

              Over-30-day delinquency rate .42%³

 

              Net charge-offs: 2006 = .32%4, 2005 = 1.50%5, 2004 = .43%

 

1 Source: Equipment Leasing Association; 6/06

2 Source: Equipment Leasing Association; 7/06

3 Excludes non-accrual loans and leases

4 Annualized

5 Net charge-offs excluding leveraged lease were .18%

 



 

54)  Market Segment Composition

($ 000s)

 

At June 30:

 

2006

 

2005

 

Change

 

Middle market

 

$

1,001,462

 

$

789,222

 

26.9

%

Small ticket

 

337,144

 

283,722

 

18.8

 

Winthrop

 

232,995

 

204,226

 

14.1

 

Wholesale

 

83,792

 

77,516

 

8.1

 

Leveraged lease

 

-

 

18,786

 

(100.0

)

Subtotal

 

1,655,393

 

1,373,472

 

20.5

 

Other

 

22,248

 

46,396

 

(52.0

)

Total

 

$

1,677,641

 

$

1,419,868

 

18.2

%

 

55)  Leasing Strategy

 

              Middle Market

              Continue to develop niche markets 

              Great ability to have new reps with fast starts

              Introduce Internet-based Front End system to program sources

 

              Small Ticket

              Medical continues to be strong emphasis

              Continued development of larger opportunities with slight increase in ticket size

 

              Winthrop Resources

              Very effective in Healthcare segment

              More emphasis on Retail segment

              Maturing sales force will increase productivity

 

              Wholesale

              Segment has been de-emphasized since 2003

 

56)  Leasing Future

 

              Look to grow all existing segments

              Where we know the credit and collections profile, documentation process, etc.

 

              Look to enter new segments

              With similar transaction profiles (transaction size, credit profile, etc.)

 

              Upgrade information technology systems

 

              As always - be opportunistic

 

57)  Credit Quality

 

Paul B. Brawner

Senior Credit Officer

 



 

58)  Allowance for Loan & Lease Losses
($ millions)

 

 

 

12/02

 

12/03

 

12/04

 

12/05

 

6/06

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Loan & Lease Losses

 

$

77.0

 

$

76.6

 

$

79.9

 

$

60.4

 

$

59.2

 

Net Charge-offs (NCO)

 

$

20.0

 

$

12.9

 

$

9.5

 

$

24.5

 

$

5.8

 

 

 

 

 

 

 

 

 

 

 

 

 

As a % of Loans & Leases: