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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):

January 29, 2015

 

 

TCF FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

 

 

 

(State or other jurisdiction of

 

001-10253

 

41-1591444

incorporation)

 

(Commission File Number)

 

(IRS Employer Identification No.)

 

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

(Address of principal executive offices, 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 January 29, 2015, attached to this Form 8-K as Exhibit 99.1, announcing its results of operations for the quarter ended December 31, 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 earnings release. This information includes selected financial and operational information through the fourth 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 January 29, 2015 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 January 29, 2015

 

 

99.2

Slide presentation prepared for use with the Earnings Release, dated January 29, 2015

 



 

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:  January 29, 2015

 


(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 $24.0 Million, or 12 Cents Per Share and

Annual Net Income of $174.2 Million, or 94 Cents Per Share

 

2014 HIGHLIGHTS

-  Revenue of $1.2 billion, up 3.5 percent from 2013

-  Loan and lease originations of $13.5 billion, up 12.2 percent from 2013

-  Average deposits of $14.9 billion, up 5.2 percent from 2013

-  Provision for credit losses of $95.7 million, down 19.1 percent from 2013

-  Non-accrual loans and leases of $216.7 million, down 21.8 percent from December 31, 2013

-  Return on average assets of 0.96 percent, up 9 basis points from 2013

-  Return on average tangible common equity (1) of 10.08 percent, up 50 basis points from 2013

 

FOURTH QUARTER HIGHLIGHTS

-  Revenue of $313.8 million, up 2.1 percent from the fourth quarter of 2013

-  Loan and lease originations of $3.5 billion, up 12.6 percent from the fourth quarter of 2013

-  Average deposits of $15.3 billion, up 6.6 percent from the fourth quarter of 2013

-  Reduced balance sheet credit risk by selling $405.9 million of consumer TDR loans

-  Sale of $405.9 million of consumer TDR loans resulted in a $23.1 million pre-tax charge, or 9 cents per share

-  Additional provision for credit losses of $21.8 million, or 8 cents per share

 

Summary of Financial Results

Table 1

(Dollars in thousands, except per-share data)

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 

4Q

2014

 

3Q

2014

 

4Q

2013

 

4Q14 vs

3Q14

 

4Q14 vs

4Q13

 

YTD

2014

 

YTD

2013

 

Percent

Change

Net income attributable to TCF

 

$

23,988

 

$

52,317

 

$

39,995

 

(54.1

)%

(40.0

)%

$

174,187

 

$

151,668

 

14.8

%

Net interest income

 

204,074

 

204,180

 

201,862

 

(0.1

)

1.1

 

815,629

 

802,624

 

1.6

 

Diluted earnings per common share

 

0.12

 

0.29

 

0.22

 

(58.6

)

(45.5

)

0.94

 

0.82

 

14.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Ratios (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax pre-provision return on average assets (3)

1.91

%

2.13

%

1.90

%

 

 

 

 

2.00

%

1.98

%

 

 

Return on average assets

 

0.53

 

1.15

 

0.90

 

 

 

 

 

0.96

 

0.87

 

 

 

Return on average common equity

 

4.15

 

10.50

 

8.39

 

 

 

 

 

8.71

 

8.12

 

 

 

Return on average tangible common equity (1)

 

4.80

 

12.11

 

9.83

 

 

 

 

 

10.08

 

9.58

 

 

 

Net interest margin

 

4.49

 

4.60

 

4.67

 

 

 

 

 

4.61

 

4.68

 

 

 

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

 

0.40

 

0.66

 

0.76

 

 

 

 

 

0.49

 

0.81

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

(2) Annualized.

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 



 

2

 

WAYZATA, MN, January 29, 2015 - TCF Financial Corporation (“TCF” or the “Company”) (NYSE: TCB) today reported net income of $24.0 million for the fourth quarter of 2014, compared with net income of $40.0 million for the fourth quarter of 2013, and net income of $52.3 million for the third quarter of 2014. Diluted earnings per common share was 12 cents for the fourth quarter of 2014, compared with 22 cents for the fourth quarter of 2013, and 29 cents for the third quarter of 2014.

 

TCF reported net income of $174.2 million for the year ended December 31, 2014, compared with net income of $151.7 million for the same period in 2013. Diluted earnings per common share was 94 cents for the year ended December 31, 2014, compared with 82 cents for the same period in 2013.

 

Chairman’s Statement

 

“TCF completed a strong year as earnings per share increased 14.6 percent from 82 cents in 2013 to 94 cents in 2014,” said William A. Cooper, Chairman and Chief Executive Officer. “This earnings per share growth in 2014 occurred despite a pre-tax charge of 17 cents related to the sale of consumer troubled debt restructurings and additional provision for credit losses during the fourth quarter. This sale allowed us to reduce balance sheet credit risk and provide further diversification of our loan and lease portfolio by reducing the high concentration of legacy consumer real estate loans. I believe that the clean-up of this portfolio gives us a fresh start and will significantly reduce credit and operating costs as we move into 2015.

 

“Overall, 2014 was highlighted by strong loan and lease originations, a focus on diversification of both revenue and earning assets, one of the highest net interest margins in the industry and continued strong credit quality particularly in our national lending businesses. While I am pleased with where we stand today, our focus is on the future and I believe we have the team in place to fulfill our goals moving forward.”

 

-more-

 



 

3

 

Revenue

 

Total Revenue

Table 2

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

(Dollars in thousands)

 

4Q
2014

 

3Q
2014

 

4Q
2013

 

4Q14 vs
3Q14

 

4Q14 vs
4Q13

 

YTD
2014

 

YTD
2013

 

Percent
Change

Net interest income

 

$204,074

 

$204,180

 

$201,862

 

(0.1

)%

1.1

%

$  815,629

 

$  802,624

 

1.6

%

Fees and other revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges

 

39,477

 

40,255

 

43,254

 

(1.9

)

(8.7

)

154,386

 

166,606

 

(7.3

)

Card revenue

 

12,830

 

12,994

 

13,066

 

(1.3

)

(1.8

)

51,323

 

51,920

 

(1.1

)

ATM revenue

 

5,249

 

5,863

 

5,382

 

(10.5

)

(2.5

)

22,225

 

22,656

 

(1.9

)

Total banking fees

 

57,556

 

59,112

 

61,702

 

(2.6

)

(6.7

)

227,934

 

241,182

 

(5.5

)

Gains on sales of auto loans, net

 

12,962

 

14,863

 

7,278

 

(12.8

)

78.1

 

43,565

 

29,699

 

46.7

 

Gains on sales of consumer real estate loans, net

6,175

 

8,762

 

5,345

 

(29.5

)

15.5

 

34,794

 

21,692

 

60.4

 

Servicing fee income

 

6,365

 

5,880

 

3,903

 

8.2

 

63.1

 

21,444

 

13,406

 

60.0

 

Subtotal

 

25,502

 

29,505

 

16,526

 

(13.6

)

54.3

 

99,803

 

64,797

 

54.0

 

Leasing and equipment finance

 

24,367

 

24,383

 

23,328

 

(0.1

)

4.5

 

93,799

 

90,919

 

3.2

 

Other

 

2,363

 

3,170

 

2,812

 

(25.5

)

(16.0

)

10,704

 

6,196

 

72.8

 

Total fees and other revenue

 

109,788

 

116,170

 

104,368

 

(5.5

)

5.2

 

432,240

 

403,094

 

7.2

 

Gains (losses) on securities, net

 

(20

)

(94

)

1,044

 

78.7

 

N.M.

 

1,027

 

964

 

6.5

 

Total non-interest income

 

109,768

 

116,076

 

105,412

 

(5.4

)

4.1

 

433,267

 

404,058

 

7.2

 

Total revenue

 

$313,842

 

$320,256

 

$307,274

 

(2.0

)

2.1

 

$1,248,896

 

$1,206,682

 

3.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (1)

 

4.49

%

4.60

%

4.67

%

 

 

 

 

4.61

%

4.68

%

 

 

Total non-interest income as a % of total revenue

 

35.0

 

36.2

 

34.3

 

 

 

 

 

34.7

 

33.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

N.M. Not Meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Annualized.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income

 

·                   Net interest income for the fourth quarter of 2014 increased $2.2 million, or 1.1 percent, compared with the fourth quarter of 2013. The increase was primarily driven by higher average loan and lease balances in the auto finance, leasing and equipment finance and inventory finance businesses, partially offset by lower average consumer real estate loan balances due to run-off, as well as continued margin reduction.

 

·                   Net interest margin in the fourth quarter of 2014 was 4.49 percent, compared with 4.67 percent in the fourth quarter of 2013 and 4.60 percent in the third quarter of 2014. The decreases from both periods were primarily due to continued margin reduction resulting from the competitive low interest rate environment. The yield on inventory finance loans was 5.56 percent in the fourth quarter of 2014, compared with 5.85 percent in the fourth quarter of 2013 and 6.18 percent in the third quarter of 2014. The decreases from both periods were primarily attributable to a one-time impact from a significant program extension.

 

-more-

 



 

4

 

Non-interest Income

 

·     Fees and service charges in the fourth quarter of 2014 were $39.5 million, down $3.8 million, or 8.7 percent, from the fourth quarter of 2013, and down $0.8 million, or 1.9 percent, from the third quarter of 2014. The decreases from both periods were driven primarily by customer behavior changes, as well as higher average checking account balances per customer.

 

·     TCF sold $367.0 million, $236.0 million and $484.4 million of auto loans during the fourth quarters of 2014 and 2013, and the third 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, which took place in July 2014.

 

·     TCF sold $613.7 million, $202.3 million and $233.6 million of consumer real estate loans during the fourth quarters of 2014 and 2013, and the third quarter of 2014, respectively, resulting in net gains in the same respective periods. Included in consumer real estate loans sold (servicing released) for the fourth quarter of 2014 is $405.9 million related to the portfolio sale of consumer real estate loans, primarily troubled debt restructuring (“TDR”) loans. These loans were transferred to held for sale during the quarter, net of a previously established provision for credit losses of $77.0 million, written down to fair value through an $18.3 million charge to provision for credit losses and sold at a loss of $4.8 million.

 

·     Servicing fee income was $6.4 million on $3.4 billion of period-end loans and leases serviced for others during the fourth quarter of 2014, compared to $3.9 million on $2.0 billion of period-end loans and leases serviced for others during the fourth quarter of 2013, and $5.9 million on $3.1 billion of period-end loans and leases serviced for others during the third quarter of 2014.

 

-more-

 



 

5

 

Loans and Leases

 

Period-End and Average Loans and Leases

 

 

 

 

 

 

 

 

 

 

 

Table 3

 

 

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

4Q
2014

 

3Q
2014

 

4Q
2013

 

 

4Q14 vs
3Q14

 

4Q14 vs
4Q13

 

 

YTD
2014

 

YTD
2013

 

Percent
Change

 

Period-End:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First mortgage lien

 

  $

3,139,152

 

$

3,444,581

 

$

3,766,421

 

 

(8.9

)%

(16.7

)%

 

 

 

 

 

 

 

Junior lien

 

2,543,212

 

2,526,486

 

2,572,905

 

 

0.7

 

(1.2

)

 

 

 

 

 

 

 

Total consumer real estate

 

5,682,364

 

5,971,067

 

6,339,326

 

 

(4.8

)

(10.4

)

 

 

 

 

 

 

 

Commercial

 

3,157,665

 

3,159,766

 

3,148,352

 

 

(0.1

)

0.3

 

 

 

 

 

 

 

 

Leasing and equipment finance

 

3,745,322

 

3,632,793

 

3,428,755

 

 

3.1

 

9.2

 

 

 

 

 

 

 

 

Inventory finance

 

1,877,090

 

1,836,538

 

1,664,377

 

 

2.2

 

12.8

 

 

 

 

 

 

 

 

Auto finance

 

1,915,061

 

1,749,411

 

1,239,386

 

 

9.5

 

54.5

 

 

 

 

 

 

 

 

Other

 

24,144

 

24,003

 

26,743

 

 

0.6

 

(9.7

)

 

 

 

 

 

 

 

Total

 

  $

16,401,646

 

$

16,373,578

 

$

15,846,939

 

 

0.2

 

3.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First mortgage lien

 

  $

3,447,447

 

$

3,498,068

 

$

3,814,365

 

 

(1.4

)%

(9.6

)%

 

$

3,567,088

 

$

3,995,727

 

(10.7

)%

Junior lien

 

2,611,709

 

2,607,811

 

2,597,817

 

 

0.1

 

0.5

 

 

2,581,464

 

2,454,223

 

5.2

 

Total consumer real estate

 

6,059,156

 

6,105,879

 

6,412,182

 

 

(0.8

)

(5.5

)

 

6,148,552

 

6,449,950

 

(4.7

)

Commercial

 

3,143,614

 

3,144,135

 

3,088,524

 

 

 

1.8

 

 

3,135,367

 

3,262,746

 

(3.9

)

Leasing and equipment finance

 

3,611,557

 

3,575,698

 

3,342,182

 

 

1.0

 

8.1

 

 

3,531,256

 

3,260,425

 

8.3

 

Inventory finance

 

1,891,504

 

1,806,271

 

1,734,286

 

 

4.7

 

9.1

 

 

1,888,080

 

1,723,253

 

9.6

 

Auto finance

 

1,817,024

 

1,603,392

 

1,157,586

 

 

13.3

 

57.0

 

 

1,567,904

 

907,571

 

72.8

 

Other

 

11,396

 

11,599

 

13,369

 

 

(1.8

)

(14.8

)

 

12,071

 

13,088

 

(7.8

)

Total

 

  $

16,534,251

 

$

16,246,974

 

$

15,748,129

 

 

1.8

 

5.0

 

 

$

16,283,230

 

$

15,617,033

 

4.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·     Period-end loans and leases were $16.4 billion at December 31, 2014, an increase of $0.6 billion, or 3.5 percent, compared with December 31, 2013 and an increase of $28.1 million, or 0.2 percent, compared with September 30, 2014. Average loans and leases were $16.5 billion for the fourth quarter of 2014, an increase of $0.8 billion, or 5.0 percent, compared with the fourth quarter of 2013 and an increase of $0.3 billion, or 1.8 percent, compared with the third quarter of 2014.

 

The increases in period-end loans and leases and average loans and leases from both periods were primarily due to increases in auto finance, leasing and equipment finance and inventory finance, partially offset by a decrease in consumer real estate loans as a result of the portfolio loan sale in December 2014. Excluding the $405.9 million TDR loan sale, period-end loans and leases and average loans and leases increased 6.1 percent and 5.2 percent, respectively, compared with December 31, 2013, and increased 2.7 percent and 2.0 percent, respectively, compared with September 30, 2014. The auto finance business continues to expand its number of active dealers and sales force, driving increased originations and higher period-end and average loan balances in spite of increasing loan sales. Leasing and equipment finance and inventory finance balances increased from both periods due to originations exceeding runoff.

 

-more-

 



 

6

 

·     Loan and lease originations were $3.5 billion for the fourth quarter of 2014, an increase of $0.4 billion, or 12.6 percent, compared with the fourth quarter of 2013 and basically flat, compared with the third quarter of 2014. The increase from the fourth quarter of 2013 was primarily due to the continued growth in auto finance, as well as an increase in inventory finance and consumer real estate originations.

 

·     Period-end and average loan and lease balances were reduced by $613.7 million of consumer real estate loan sales and $367.0 million of auto finance loan sales during the fourth quarter of 2014.

 

Credit Quality

 

Credit Trends

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 4

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent Change

 

(Dollars in thousands)

 

4Q

 

3Q

 

2Q

 

1Q

 

4Q

 

4Q14 vs

 

4Q14 vs

 

 

 

 

2014

 

2014

 

2014

 

2014

 

2013

 

3Q14

 

4Q13

 

 

Non-accrual loans and leases and other real estate owned

 

 $

282,384

 

$

342,725

 

$

325,374

 

$

330,127

 

$

345,896

 

(17.6

)%

(18.4

)%

 

Over 60-day delinquencies (1)

 

22,348

 

27,019

 

28,094

 

30,638

 

30,194

 

(17.3

)

(26.0

)

 

Net charge-offs

 

16,623

 

26,937

 

18,355

 

17,416

 

30,096

 

(38.3

)

(44.8

)

 

Provision for credit losses

 

55,597

 

15,739

 

9,909

 

14,492

 

22,792

 

N.M.  

N.M.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

N.M. Not Meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

·     Non-accrual loans and leases and other real estate owned totaled $282.4 million at December 31, 2014, a decrease of $63.5 million, or 18.4 percent, from December 31, 2013, and a decrease of $60.3 million, or 17.6 percent, from September 30, 2014. The decrease from December 31, 2013 was primarily due to the $405.9 million TDR loan sale, which included $40.1 million of non-accrual TDR loans, and improving credit quality trends and continued efforts to actively work out problem loans in the commercial portfolio. The decrease from September 30, 2014 was also driven primarily by the portfolio loan sale, as well as the payoff of a large loan in the commercial portfolio.

 

·     The over 60-day delinquency rate, excluding acquired portfolios and non-accrual loans and leases, was 0.14 percent at December 31, 2014, down from 0.19 percent at December 31, 2013, and down from 0.17 percent at September 30, 2014. The decrease from December 31, 2013 was primarily a result of the stabilization of the consumer real estate portfolio as economic conditions improved in our markets. The decrease from September 30, 2014 was primarily the result of improving credit quality in the commercial portfolio.

 

·     Net charge-offs were $16.6 million for the fourth quarter of 2014, a decrease of $13.5 million, or 44.8 percent, from the fourth quarter of 2013, and a decrease of $10.3 million, or 38.3 percent, from the third quarter of 2014. The decrease from the fourth quarter of 2013 was primarily due to improved credit quality in both the commercial and consumer real estate loan portfolios. The decrease from the third quarter of 2014 was primarily due to the improved credit quality in the consumer real estate loan portfolio.

 

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7

 

·     Provision for credit losses was $55.6 million for the fourth quarter of 2014, an increase of $32.8 million from the fourth quarter of 2013, and an increase of $39.9 million from the third quarter of 2014. The increases from both periods were primarily a result of the portfolio loan sale which increased the provision by $18.3 million. Additionally, the TDR loan sale provided market information that was utilized during the quarter to evaluate the adequacy of the allowance for loan and lease losses related to the remaining portfolio and along with our continued conservative approach on credit, resulted in additional provision of $21.8 million.

 

 

 

Deposits

 

Average Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 5  

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

(Dollars in thousands)

 

4Q

 

3Q

 

4Q

 

4Q14 vs

4Q14 vs

YTD

 

YTD

 

Percent

 

 

2014

 

2014

 

2013

 

3Q14

4Q13

2014

 

2013

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking

 

$

5,109,465

 

$

5,077,753

 

$

4,904,125

 

0.6

%

4.2

%

$

5,075,759

 

$

4,851,952

 

4.6

%

Savings

 

5,289,435

 

5,524,409

 

6,217,662

 

(4.3

)

(14.9

)

5,713,389

 

6,168,768

 

(7.4

)

Money market

 

1,869,350

 

1,527,820

 

845,562

 

22.4

 

121.1

 

1,312,483

 

818,814

 

60.3

 

   Subtotal

 

12,268,250

 

12,129,982

 

11,967,349

 

1.1

 

2.5

 

12,101,631

 

11,839,534

 

2.2

 

Certificates of deposit

 

3,041,722

 

3,028,259

 

2,392,896

 

0.4

 

27.1

 

2,840,922

 

2,369,992

 

19.9

 

   Total average deposits

 

$

15,309,972

 

$

15,158,241

 

$

14,360,245

 

1.0

 

6.6

 

$

14,942,553

 

$

14,209,526

 

5.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average interest rate on deposits (1)

 

0.28

%

0.28

%

0.23

%

 

 

 

 

0.26

%

0.26

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Annualized.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·     Total average deposits for the fourth quarter of 2014 increased $0.9 billion, or 6.6 percent, from the fourth quarter of 2013 and increased $0.2 billion, or 1.0 percent, from the third quarter of 2014. The increases from both periods were primarily due to special campaigns for money market accounts and certificates of deposit, partially offset by a reduction in savings account balances.

 

·     The average interest rate on deposits for the fourth quarter of 2014 was 0.28 percent, up 5 basis points from the fourth quarter of 2013, and flat compared to the third quarter of 2014. The increase from the fourth quarter of 2013 was primarily due to promotions for money market accounts in select markets during the quarter.

 

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8

 

Non-interest Expense

 

 Non-interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 6

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 (Dollars in thousands)

 

4Q

 

3Q

 

4Q

 

 

4Q14 vs

 

4Q14 vs

 

YTD

 

YTD

 

 

Percent

 

 

 

2014

 

2014

 

2013

 

 

3Q14

 

4Q13

 

2014

 

2013

 

 

Change

 

 Compensation and employee benefits

 

$

115,796

 

$

112,393

 

$

108,589

 

 

3.0

%

6.6

%

$

452,942

 

$

429,188

 

 

5.5

%

 Occupancy and equipment

 

35,747

 

34,121

 

35,504

 

 

4.8

 

0.7

 

139,023

 

134,694

 

 

3.2

 

 FDIC insurance

 

2,643

 

7,292

 

7,892

 

 

(63.8

)

(66.5

)

25,123

 

32,066

 

 

(21.7

)

 Operating lease depreciation

 

6,878

 

7,434

 

6,009

 

 

(7.5

)

14.5

 

27,152

 

24,500

 

 

10.8

 

 Advertising and marketing

 

5,146

 

5,656

 

3,754

 

 

(9.0

)

37.1

 

22,943

 

21,477

 

 

6.8

 

 Other

 

48,063

 

47,888

 

44,162

 

 

0.4

 

8.8

 

179,904

 

167,777

 

 

7.2

 

 Subtotal

 

214,273

 

214,784

 

205,910

 

 

(0.2

)

4.1

 

847,087

 

809,702

 

 

4.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Branch realignment

 

 

 

8,869

 

 

 

(100.0

)

 

8,869

 

 

(100.0

)

 Foreclosed real estate and repossessed assets, net

 

7,441

 

5,315

 

6,066

 

 

40.0

 

22.7

 

24,567

 

27,950

 

 

(12.1

)

 Other credit costs, net

 

44

 

(411

)

(376

)

 

N.M.   

N.M.   

123

 

(1,252

)

 

N.M. 

 Total non-interest expense

 

$

221,758

 

$

219,688

 

$

220,469

 

 

0.9

 

0.6

 

$

871,777

 

$

845,269

 

 

3.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 N.M. Not Meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·                   Compensation and employee benefits expense increased $7.2 million, or 6.6 percent, from the fourth quarter of 2013 and increased $3.4 million, or 3.0 percent, from the third quarter of 2014. The increases from both periods were primarily due to the annual pension plan valuation adjustment resulting from a reduction to the discount rate and a lower actual return on plan assets. The increase from the fourth quarter of 2013 was also impacted by increased staff levels to support the growth of auto finance and risk management.

 

·                   FDIC insurance expense decreased $5.2 million, or 66.5 percent, from the fourth quarter of 2013 and decreased $4.6 million, or 63.8 percent, from the third quarter of 2014. The decreases from both periods were due to a lower assessment rate primarily as a result of the sale of the TDR loans, overall improving credit metrics and a non-recurring assessment rate catch-up.

 

·                   Foreclosed real estate and repossessed assets, net expense increased $1.4 million, or 22.7 percent, from the fourth quarter of 2013 and increased $2.1 million, or 40.0 percent, compared to the third quarter of 2014. The increases from both periods were primarily due to an increase in valuation reductions for consumer real estate and commercial properties, partially offset by increased gains on the sales of foreclosed commercial properties.

 

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9

 

Capital

 

Capital Information

 

 

 

 

 

 

 

Table 7 

At period end

 

 

 

 

 

 

 

 

 

(Dollars in thousands, except per-share data)

 

4Q 2014

 

4Q 2013

Total equity

 

$

2,135,364

 

 

 

$

1,964,759

 

 

 

Book value per common share

 

$

11.10

 

 

 

$

10.23

 

 

 

Tangible book value per common share (1)

 

$

9.72

 

 

 

$

8.83

 

 

 

Tangible common equity to tangible assets (1)

 

8.50

%

 

 

8.03

%

 

 

Capital accumulation rate (2)

 

10.36

%

 

 

9.72

%

 

 

Tier 1 risk-based capital (3)

 

$

1,919,887

 

11.76

%

$

1,763,682

 

11.41

%

Total risk-based capital (3)

 

2,209,999

 

13.54

 

2,107,981

 

13.64

 

Tier 1 leverage capital (3)

 

1,919,887

 

10.07

 

1,763,682

 

9.71

 

Tier 1 common capital (1)

 

1,642,932

 

10.07

 

1,488,651

 

9.63

 

 

 

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

 

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

 

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

 

·                   Maintained strong capital ratios as the Company accumulates capital through earnings.

 

·                   On January 23, 2015, TCF’s Board of Directors declared a regular quarterly cash dividend of 5 cents per common share, payable on March 2, 2015, to stockholders of record at the close of business on February 13, 2015. TCF also declared dividends on the 7.50% Series A and 6.45% Series B Non-Cumulative Perpetual Preferred Stock, both payable on March 2, 2015, to stockholders of record at the close of business on February 13, 2015.

 

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10

 

Webcast Information

 

A live webcast of TCF’s conference call to discuss the fourth quarter earnings will be hosted at TCF’s website, http://ir.tcfbank.com, on January 29, 2015 at 9:00 a.m. CST. 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 December 31, 2014, TCF had $19.4 billion in total assets and 379 branches in Illinois, Minnesota, Michigan, Colorado, Wisconsin, Arizona, South Dakota and Indiana, 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, 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.

 

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12

 

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 such as mortgage foreclosure moratorium laws, further regulation of financial institution campus banking programs, use by municipalities of eminent domain on property securing troubled residential mortgage loans, or imposition of underwriting or other limitations that impact the ability to offer 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; 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 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 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 or government enforcement actions, including class action litigation or enforcement actions concerning TCF’s lending or deposit activities including account servicing processes or fees or charges, or employment practices; and possible increases in indemnification obligations for certain litigation against Visa U.S.A. and potential reductions in card revenues resulting from such litigation or other litigation against Visa.

 

Accounting, Audit, Tax and Insurance Matters. Changes in accounting standards or interpretations of existing standards; federal or state monetary, fiscal or tax policies, including adoption of state legislation that would increase state taxes; ineffective internal controls; adverse 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 December 31,

 

Change

 

 

2014

 

2013

 

$

 

%

Interest income:

 

 

 

 

 

 

 

 

 

Loans and leases

 

  $

205,507

 

  $

204,042

 

  $

1,465

 

0.7

%

Securities available for sale

 

3,053

 

4,194

 

(1,141)

 

(27.2)

 

Securities held to maturity

 

1,429

 

94

 

1,335

 

N.M.   

Investments and other

 

9,819

 

7,599

 

2,220

 

29.2

 

Total interest income

 

219,808

 

215,929

 

3,879

 

1.8

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

 

10,760

 

8,428

 

2,332

 

27.7

 

Borrowings

 

4,974

 

5,639

 

(665)

 

(11.8)

 

Total interest expense

 

15,734

 

14,067

 

1,667

 

11.9

 

Net interest income

 

204,074

 

201,862

 

2,212

 

1.1

 

Provision for credit losses

 

55,597

 

22,792

 

32,805

 

143.9

 

Net interest income after provision for credit losses

 

148,477

 

179,070

 

(30,593)

 

(17.1)

 

Non-interest income:

 

 

 

 

 

 

 

 

 

Fees and service charges

 

39,477

 

43,254

 

(3,777)

 

(8.7)

 

Card revenue

 

12,830

 

13,066

 

(236)

 

(1.8)

 

ATM revenue

 

5,249

 

5,382

 

(133)

 

(2.5)

 

Subtotal

 

57,556

 

61,702

 

(4,146)

 

(6.7)

 

Gains on sales of auto loans, net

 

12,962

 

7,278

 

5,684

 

78.1

 

Gains on sales of consumer real estate loans, net

 

6,175

 

5,345

 

830

 

15.5

 

Servicing fee income

 

6,365

 

3,903

 

2,462

 

63.1

 

Subtotal

 

25,502

 

16,526

 

8,976

 

54.3

 

Leasing and equipment finance

 

24,367

 

23,328

 

1,039

 

4.5

 

Other

 

2,363

 

2,812

 

(449)

 

(16.0)

 

Fees and other revenue

 

109,788

 

104,368

 

5,420

 

5.2

 

Gains (losses) on securities, net

 

(20)

 

1,044

 

(1,064)

 

N.M.   

Total non-interest income

 

109,768

 

105,412

 

4,356

 

4.1

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

115,796

 

108,589

 

7,207

 

6.6

 

Occupancy and equipment

 

35,747

 

35,504

 

243

 

0.7

 

FDIC insurance

 

2,643

 

7,892

 

(5,249)

 

(66.5)

 

Operating lease depreciation

 

6,878

 

6,009

 

869

 

14.5

 

Advertising and marketing

 

5,146

 

3,754

 

1,392

 

37.1

 

Other

 

48,063

 

44,162

 

3,901

 

8.8

 

Subtotal

 

214,273

 

205,910

 

8,363

 

4.1

 

Branch realignment

 

 

8,869

 

(8,869)

 

(100.0)

 

Foreclosed real estate and repossessed assets, net

 

7,441

 

6,066

 

1,375

 

22.7

 

Other credit costs, net

 

44

 

(376)

 

420

 

N.M.   

Total non-interest expense

 

221,758

 

220,469

 

1,289

 

0.6

 

Income before income tax expense

 

36,487

 

64,013

 

(27,526)

 

(43.0)

 

Income tax expense

 

11,011

 

22,791

 

(11,780)

 

(51.7)

 

Income after income tax expense

 

25,476

 

41,222

 

(15,746)

 

(38.2)

 

Income attributable to non-controlling interest

 

1,488

 

1,227

 

261

 

21.3

 

Net income attributable to TCF Financial Corporation

 

23,988

 

39,995

 

(16,007)

 

(40.0)

 

Preferred stock dividends

 

4,847

 

4,847

 

 

 

Net income available to common stockholders

 

  $

19,141

 

  $

35,148

 

  $

(16,007)

 

(45.5)

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

Basic

 

  $

0.12

 

  $

0.22

 

  $

(0.10)

 

(45.5)

%

Diluted

 

0.12

 

0.22

 

(0.10)

 

(45.5)

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

  $

0.05

 

  $

0.05

 

  $

 

%

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Basic

 

164,384

 

161,544

 

2,840

 

1.8

%

Diluted

 

164,869

 

162,625

 

2,244

 

1.4

 

 

 

 

 

 

 

 

 

 

 

N.M. Not Meaningful.

 

 

 

 

 

 

 

 

 

 

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14

 

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per-share data)

(Unaudited)

 

 

 

Year Ended December 31,

 

Change

 

 

2014

 

2013

 

$

 

%

Interest income:

 

 

 

 

 

 

 

 

 

Loans and leases

 

  $

820,436

 

  $

819,501

 

  $

935

 

0.1

%

Securities available for sale

 

11,994

 

18,074

 

(6,080)

 

(33.6

)

Securities held to maturity

 

5,281

 

277

 

5,004

 

N.M. 

Investments and other

 

36,518

 

26,688

 

9,830

 

36.8

 

Total interest income

 

874,229

 

864,540

 

9,689

 

1.1

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

 

38,385

 

36,604

 

1,781

 

4.9

 

Borrowings

 

20,215

 

25,312

 

(5,097)

 

(20.1

)

Total interest expense

 

58,600

 

61,916

 

(3,316)

 

(5.4

)

Net interest income

 

815,629

 

802,624

 

13,005

 

1.6

 

Provision for credit losses

 

95,737

 

118,368

 

(22,631)

 

(19.1

)

Net interest income after provision for credit losses

 

719,892

 

684,256

 

35,636

 

5.2

 

Non-interest income:

 

 

 

 

 

 

 

 

 

Fees and service charges

 

154,386

 

166,606

 

(12,220)

 

(7.3

)

Card revenue

 

51,323

 

51,920

 

(597)

 

(1.1

)

ATM revenue

 

22,225

 

22,656

 

(431)

 

(1.9

)

Subtotal

 

227,934

 

241,182

 

(13,248)

 

(5.5

)

Gains on sales of auto loans, net

 

43,565

 

29,699

 

13,866

 

46.7

 

Gains on sales of consumer real estate loans, net

 

34,794

 

21,692

 

13,102

 

60.4

 

Servicing fee income

 

21,444

 

13,406

 

8,038

 

60.0

 

Subtotal

 

99,803

 

64,797

 

35,006

 

54.0

 

Leasing and equipment finance

 

93,799

 

90,919

 

2,880

 

3.2

 

Other

 

10,704

 

6,196

 

4,508

 

72.8

 

Fees and other revenue

 

432,240

 

403,094

 

29,146

 

7.2

 

Gains (losses) on securities, net

 

1,027

 

964

 

63

 

6.5

 

Total non-interest income

 

433,267

 

404,058

 

29,209

 

7.2

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

452,942

 

429,188

 

23,754

 

5.5

 

Occupancy and equipment

 

139,023

 

134,694

 

4,329

 

3.2

 

FDIC insurance

 

25,123

 

32,066

 

(6,943)

 

(21.7

)

Operating lease depreciation

 

27,152

 

24,500

 

2,652

 

10.8

 

Advertising and marketing

 

22,943

 

21,477

 

1,466

 

6.8

 

Other

 

179,904

 

167,777

 

12,127

 

7.2

 

Subtotal

 

847,087

 

809,702

 

37,385

 

4.6

 

Branch realignment

 

 

8,869

 

(8,869)

 

(100.0

)

Foreclosed real estate and repossessed assets, net

 

24,567

 

27,950

 

(3,383)

 

(12.1

)

Other credit costs, net

 

123

 

(1,252)

 

1,375

 

N.M. 

Total non-interest expense

 

871,777

 

845,269

 

26,508

 

3.1

 

Income before income tax expense

 

281,382

 

243,045

 

38,337

 

15.8

 

Income tax expense

 

99,766

 

84,345

 

15,421

 

18.3

 

Income after income tax expense

 

181,616

 

158,700

 

22,916

 

14.4

 

Income attributable to non-controlling interest

 

7,429

 

7,032

 

397

 

5.6

 

Net income attributable to TCF Financial Corporation

 

174,187

 

151,668

 

22,519

 

14.8

 

Preferred stock dividends

 

19,388

 

19,065

 

323

 

1.7

 

Net income available to common stockholders

 

  $

154,799

 

  $

132,603

 

  $

22,196

 

16.7

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

Basic

 

  $

0.95

 

  $

0.82

 

  $

0.13

 

15.9

%

Diluted

 

0.94

 

0.82

 

0.12

 

14.6

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

  $

0.20

 

  $

0.20

 

  $

 

%

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Basic

 

163,581

 

161,016

 

2,565

 

1.6

%

Diluted

 

164,085

 

161,927

 

2,158

 

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 December 31,

 

Change

 

 

 

2014

 

2013

 

$

 

%

 

Net income attributable to TCF Financial Corporation

 

 $

23,988

 

 $

39,995

 

 $

(16,007)

 

(40.0)%

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

Securities available for sale:

 

 

 

 

 

 

 

 

 

Unrealized gains (losses) arising during the period

 

9,419

 

(13,778)

 

23,197

 

N.M.

 

Reclassification of net (gains) losses to net income

 

299

 

(860)

 

1,159

 

N.M.

 

Net investment hedges:

 

 

 

 

 

 

 

 

 

Unrealized gains (losses) arising during the period

 

1,449

 

861

 

588

 

68.3

 

Foreign currency translation adjustment:

 

 

 

 

 

 

 

 

 

Unrealized gains (losses) arising during the period

 

(1,661)

 

(999)

 

(662)

 

(66.3)

 

Recognized postretirement prior service cost and transition obligation:

 

 

 

 

 

 

 

 

 

Net actuarial gains (losses) arising during the period

 

(12)

 

(11)

 

(1)

 

(9.1)

 

Income tax (expense) benefit

 

(4,188)

 

5,172

 

(9,360)

 

N.M.

 

Total other comprehensive income (loss)

 

5,306

 

(9,615)

 

14,921

 

N.M.

 

Comprehensive income

 

 $

29,294

 

 $

30,380

 

 $

(1,086)

 

(3.6)

 

 

 

 

 

Year Ended December 31,

 

Change

 

 

 

2014

 

2013

 

$

 

%

 

Net income attributable to TCF Financial Corporation

 

 $

174,187

 

 $

151,668

 

 $

22,519

 

14.8%

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

Securities available for sale:

 

 

 

 

 

 

 

 

 

Unrealized gains (losses) arising during the period

 

29,071

 

(61,177)

 

90,248

 

N.M.

 

Reclassification of net (gains) losses to net income

 

(76)

 

(860)

 

784

 

91.2

 

Net investment hedges:

 

 

 

 

 

 

 

 

 

Unrealized gains (losses) arising during the period

 

3,126

 

1,625

 

1,501

 

92.4

 

Foreign currency translation adjustment:

 

 

 

 

 

 

 

 

 

Unrealized gains (losses) arising during the period

 

(3,704)

 

(1,979)

 

(1,725)

 

(87.2)

 

Recognized postretirement prior service cost and transition obligation:

 

 

 

 

 

 

 

 

 

Net actuarial gains (losses) arising during the period

 

(47)

 

(46)

 

(1)

 

(2.2)

 

Income tax (expense) benefit

 

(12,067)

 

22,781

 

(34,848)

 

N.M.

 

Total other comprehensive income (loss)

 

16,303

 

(39,656)

 

55,959

 

N.M.

 

Comprehensive income

 

 $

190,490

 

 $

112,012

 

 $

78,478

 

70.1

 

 

 

 

 

 

 

 

 

 

 

N.M. Not Meaningful.

 

 

 

 

 

 

 

 

 

 

-more-

 



 

16

 

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollars in thousands, except per-share data)

(Unaudited)

 

 

 

At Dec. 31,

 

Change

 

 

 

2014

 

2013

 

$

 

%

 

ASSETS:

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 $

1,115,250

 

 $

915,076

 

 $

200,174

 

21.9%

 

Investments

 

85,492

 

94,326

 

(8,834)

 

(9.4)

 

Securities held to maturity

 

214,454

 

19,912

 

194,542

 

N.M.

 

Securities available for sale

 

463,294

 

551,064

 

(87,770)

 

(15.9)

 

Loans and leases held for sale

 

132,266

 

79,768

 

52,498

 

65.8

 

Loans and leases:

 

 

 

 

 

 

 

 

 

Consumer real estate:

 

 

 

 

 

 

 

 

 

First mortgage lien

 

3,139,152

 

3,766,421

 

(627,269)

 

(16.7)

 

Junior lien

 

2,543,212

 

2,572,905

 

(29,693)