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Section 1: 8-K (8-K)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

 FORM 8-K
 
 CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported):
July 24, 2017
 
 389567569_deluxetcfcorplogorgba37.jpg
 
TCF FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation)
001-10253
(Commission File Number)
41-1591444
(IRS Employer Identification No.)
 
200 Lake Street East, Mail Code EX0-03-A, Wayzata, Minnesota 55391-1693
(Address of principal executive offices, including Zip Code)
 
(952) 745-2760
(Registrant’s telephone number, including area code)
  
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

¨ Emerging growth company

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





Item 2.02 Results of Operations and Financial Condition.
 
The following information, including Exhibit 99.1, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall such information and Exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933, except as may be expressly set forth by specific reference in such a filing.
 
TCF Financial Corporation (the "Company") issued a press release dated July 24, 2017, attached to this Form 8-K as Exhibit 99.1, announcing its results of operations for the quarter ended June 30, 2017.
 
The earnings release is also available on the Investor Relations section of the Company’s website at http://ir.tcfbank.com. The Company’s Annual Report to Shareholders and its reports on Forms 10-K, 10-Q and 8-K and other publicly available information should be consulted for other important information about the Company.
 
Item 7.01 Regulation FD Disclosure.
 
Information is being furnished herein in Exhibit 99.2 with respect to the slide presentation prepared for use with the press release. This information includes selected financial and operational information through the second quarter of 2017 and does not represent a complete set of financial statements and related notes prepared in conformity with generally accepted accounting principles ("GAAP"). Most, but not all, of the selected financial information furnished herein is derived from the Company’s consolidated financial statements and related notes prepared in accordance with GAAP and management’s discussion and analysis of financial condition and results of operations included in the Company’s reports on Forms 10-K and 10-Q. The Company’s annual financial statements are subject to independent audit. These materials are dated July 24, 2017 and TCF does not undertake to update the materials after that date.
 
The presentation is also available on the Investor Relations section of the Company’s website at http://ir.tcfbank.com. The Company’s Annual Report to Shareholders and its reports on Forms 10-K, 10-Q and 8-K and other publicly available information should be consulted for other important information about the Company.
 
Information contained herein, including Exhibit 99.2, shall not be deemed filed for the purposes of the Securities Exchange Act of 1934, nor shall such information and Exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such a filing.
 
Item 9.01 Financial Statements and Exhibits.
 
(d)         Exhibits.

Exhibit No.        Description

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

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






SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
TCF FINANCIAL CORPORATION
 
 
 
 
 
/s/ Craig R. Dahl
 
Craig R. Dahl,
Chairman, President and Chief Executive Officer
(Principal Executive Officer)
 
 
 
 
 
/s/ Brian W. Maass
 
Brian W. Maass,
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
 
 
 
 
 
/s/ Susan D. Bode
 
Susan D. Bode,
Senior Vice President and Chief Accounting Officer
(Principal Accounting Officer)
 
Dated:  July 24, 2017



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
Exhibit 99.1

389567569_deluxetcfcorplogorgba38.jpg
NEWS RELEASE

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

FOR IMMEDIATE RELEASE
                                
Contact:
Mark Goldman        (952) 475-7050        [email protected]         (Media)
Jason Korstange        (952) 745-2755        [email protected]        (Investors)

TCF REPORTS QUARTERLY NET INCOME OF $60.4 MILLION, OR 33 CENTS PER SHARE

SECOND QUARTER OBSERVATIONS

Revenue of $341.8 million, up 3.3 percent from the second quarter of 2016
Net interest income of $227.2 million, up 6.7 percent from the second quarter of 2016
Net interest margin of 4.52 percent, up 17 basis points from the second quarter of 2016
Period-end loans and leases of $18.4 billion, up 5.1 percent from June 30, 2016
Net charge-offs as a percentage of average loans and leases of 0.28 percent, up 5 basis points from the second quarter of 2016
Non-accrual loans and leases of $129.3 million, down 33.9 percent from June 30, 2016
Average deposits of $17.3 billion, up 0.2 percent from the second quarter of 2016
Efficiency ratio of 68.19%, down 50 bps from the second quarter of 2016
Effective income tax rate of 28.9 percent, down 400 basis points from the second quarter of 2016
Earnings per share of 33 cents, up 6.5 percent from the second quarter of 2016

Summary of Financial Results
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table 1
 
 
 
 
 
 
 
Percent Change
 
 
 
 
 
 
 
(Dollars in thousands, except per-share data)
2Q
 
1Q
 
2Q
 
2Q17 vs
 
2Q17 vs
 
YTD
 
YTD
 
Percent
 
 
2017
 
2017
 
2016
 
1Q17
 
2Q16
 
2017
 
2016
 
Change
 
Net income attributable to TCF
$
60,432

 
$
46,278

 
$
57,694

 
30.6
%
 
4.7
%
 
$
106,710

 
$
105,740

 
0.9
%
 
Net interest income
227,161

 
222,114

 
212,984

 
2.3

 
6.7

 
449,275

 
424,642

 
5.8

 
Diluted earnings per common share
0.33

 
0.25

 
0.31

 
32.0

 
6.5

 
0.58

 
0.57

 
1.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Ratios(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
1.17
%
 
0.90
%
 
1.14
%
 
 
 
 
 
1.03
%
 
1.05
%
 
 
 
Return on average common equity
9.96

 
7.64

 
10.09

 
 
 
 
 
8.82

 
9.28

 
 
 
Return on average tangible common equity(2)
11.15

 
8.55

 
11.38

 
 
 
 
 
9.87

 
10.49

 
 
 
Net interest margin
4.52

 
4.46

 
4.35

 
 
 
 
 
4.49

 
4.36

 
 
 
Net charge-offs as a percentage of average loans and leases
0.28

 
0.11

 
0.23

 
 
 
 
 
0.20

 
0.25

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




WAYZATA, Minn. (July 24, 2017) - TCF Financial Corporation ("TCF" or the "Company") (NYSE: TCF) today reported net income of $60.4 million for the second quarter of 2017, compared with $57.7 million for the second quarter of 2016 and $46.3 million for the first quarter of 2017. Diluted earnings per common share was 33 cents for the second quarter of 2017, compared with 31 cents for the second quarter of 2016 and 25 cents for the first quarter of 2017.

"TCF reported solid second quarter results driven by strong revenue and balance sheet growth and stable credit quality,” said Craig R. Dahl, chairman and chief executive officer. "TCF’s strong growth in net interest income was a key driver in creating a more stable source of revenue. We were able to generate margin expansion on both a linked quarter and year-over-year basis primarily due to our asset sensitive balance sheet. In addition, a strong quarter of leasing and equipment finance revenue continues to demonstrate the strength of our diversified model. We also continue to make important investments to enhance our technology capabilities and drive efficiencies.

"TCF’s auto finance business is performing as expected following the announced strategic shift last quarter. During the first full quarter of implementation, the auto finance business saw reduced loan originations, increased held for investment loan yield and risk-adjusted yield, reduced reliance on gain on sale revenue and a more efficient operating structure. As the transition continues, credit performance remains within our expectations and the business remains on track to support the organization’s focus on driving profitable growth and increasing operating leverage moving forward."


2




Revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
Table 2
 
 
 
 
 
 
 
Percent Change
 
 
 
 
 
 
 
(Dollars in thousands)
2Q
 
1Q
 
2Q
 
2Q17 vs
 
2Q17 vs
 
YTD
 
YTD
 
Percent
 
 
2017
 
2017
 
2016
 
1Q17
 
2Q16
 
2017
 
2016
 
Change
 
Net interest income
$
227,161

 
$
222,114

 
$
212,984

 
2.3
 %
 
6.7
 %
 
$
449,275

 
$
424,642

 
5.8
 %
 
Non-interest income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fees and service charges
32,733

 
31,282

 
34,622

 
4.6

 
(5.5
)
 
64,015

 
67,439

 
(5.1
)
 
Card revenue
14,154

 
13,150

 
14,083

 
7.6

 
0.5

 
27,304

 
27,446

 
(0.5
)
 
ATM revenue
5,061

 
4,675

 
5,288

 
8.3

 
(4.3
)
 
9,736

 
10,309

 
(5.6
)
 
Subtotal
51,948

 
49,107

 
53,993

 
5.8

 
(3.8
)
 
101,055

 
105,194

 
(3.9
)
 
Gains on sales of auto loans, net
380

 
2,864

 
10,143

 
(86.7
)
 
(96.3
)
 
3,244

 
22,063

 
(85.3
)
 
Gains on sales of consumer real estate loans, net
8,980

 
8,891

 
10,839

 
1.0

 
(17.2
)
 
17,871

 
20,223

 
(11.6
)
 
Servicing fee income
10,730

 
11,651

 
9,502

 
(7.9
)
 
12.9

 
22,381

 
18,385

 
21.7

 
Subtotal
20,090

 
23,406

 
30,484

 
(14.2
)
 
(34.1
)
 
43,496

 
60,671

 
(28.3
)
 
Leasing and equipment finance
39,830

 
28,298

 
31,074

 
40.8

 
28.2

 
68,128

 
59,561

 
14.4

 
Other
2,795

 
2,703

 
2,405

 
3.4

 
16.2

 
5,498

 
5,248

 
4.8

 
Fees and other revenue
114,663

 
103,514

 
117,956

 
10.8

 
(2.8
)
 
218,177

 
230,674

 
(5.4
)
 
Gains (losses) on securities, net

 

 

 

 

 

 
(116
)
 
(100.0
)
 
Total non-interest income
114,663

 
103,514

 
117,956

 
10.8

 
(2.8
)
 
218,177

 
230,558

 
(5.4
)
 
Total revenue
$
341,824

 
$
325,628

 
$
330,940

 
5.0

 
3.3

 
$
667,452

 
$
655,200

 
1.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest margin(1)
4.52
%
 
4.46
%
 
4.35
%
 
 
 
 
 
4.49
%
 
4.36
%
 
 
 
Total non-interest income as a percentage of total revenue
33.5

 
31.8

 
35.6

 
 
 
 
 
32.7

 
35.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Annualized.
 
 
 
 
 
 
 
 
 

Net Interest Income

Net interest income for the second quarter of 2017 increased $14.2 million, or 6.7 percent, from the second quarter of 2016 and increased $5.0 million, or 2.3 percent, from the first quarter of 2017. The increases in net interest income were primarily due to increases in interest income on loans and leases, partially offset by decreases in interest income on loans held for sale.

Total interest income increased $14.5 million, or 6.2 percent, from the second quarter of 2016 and increased $6.2 million, or 2.6 percent, from the first quarter of 2017, primarily due to increased average yields on the variable-rate inventory finance loans, variable- and adjustable-rate consumer real estate and commercial loans and fixed-rate auto finance loans. In addition, the increase from the second quarter of 2016 was due to higher average balances in the commercial, leasing and equipment finance and inventory finance portfolios, partially offset by a lower average balance in the consumer real estate portfolio.

Net interest margin for the second quarter of 2017 was 4.52 percent, compared with 4.35 percent for the second quarter of 2016 and 4.46 percent for the first quarter of 2017. The increases from both periods were primarily due to higher average yields on the variable- and adjustable-rate loans due to interest rate increases.

3





Non-interest Income

TCF sold $48.0 million, $533.4 million and $250.6 million of auto loans during the second quarters of 2017 and 2016 and the first quarter of 2017, respectively, resulting in net gains in each respective period. The decreases from both periods were due to the strategic shift in auto finance.

TCF sold $273.4 million, $344.6 million and $379.4 million of consumer real estate loans during the second quarters of 2017 and 2016 and the first quarter of 2017, respectively, resulting in net gains in each respective period.

Servicing fee income was $10.7 million on $5.3 billion of average loans and leases serviced for others for the second quarter of 2017, compared with $9.5 million on $4.7 billion for the second quarter of 2016 and $11.7 million on $5.6 billion for the first quarter of 2017. The increase from the second quarter of 2016 was due to the cumulative effect of the increase in the portfolio of consumer real estate and auto finance loans sold with servicing retained by TCF. The decrease from the first quarter of 2017 was primarily due to the shift in auto finance, resulting in a decrease in the portfolio of auto finance loans sold with servicing retained by TCF.

Leasing and equipment finance non-interest income for the second quarter of 2017 increased $8.8 million, or 28.2 percent, from the second quarter of 2016 and increased $11.5 million, or 40.8 percent, from the first quarter of 2017 due to customer-driven events resulting in increases in sales-type and operating lease revenue.


4




Loans and Leases
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Period-End and Average Loans and Leases
 
 
 
 
 
 
Table 3
 
 
 
 
 
 
 
Percent Change
 
 
 
 
 
 
 
(Dollars in thousands)
2Q
 
1Q
 
2Q
 
2Q17 vs
 
2Q17 vs
 
YTD
 
YTD
 
Percent
 
 
2017
 
2017
 
2016
 
1Q17
 
2Q16
 
2017
 
2016
 
Change
 
Period-End:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
First mortgage lien
$
2,070,385

 
$
2,166,691

 
$
2,409,320

 
(4.4
)%
 
(14.1
)%
 
 
 
 
 
 
 
Junior lien
2,701,592

 
2,494,696

 
2,677,522

 
8.3

 
0.9

 
 
 
 
 
 
 
Total consumer real estate
4,771,977

 
4,661,387

 
5,086,842

 
2.4

 
(6.2
)
 
 
 
 
 
 
 
Commercial
3,488,725

 
3,376,050

 
3,096,046

 
3.3

 
12.7

 
 
 
 
 
 
 
Leasing and equipment finance
4,333,735

 
4,276,008

 
4,120,359

 
1.4

 
5.2

 
 
 
 
 
 
 
Inventory finance
2,509,485

 
2,864,248

 
2,334,893

 
(12.4
)
 
7.5

 
 
 
 
 
 
 
Auto finance
3,243,144

 
2,780,416

 
2,812,807

 
16.6

 
15.3

 
 
 
 
 
 
 
Other
19,459

 
16,785

 
20,890

 
15.9

 
(6.9
)
 
 
 
 
 
 
 
Total
$
18,366,525

 
$
17,974,894

 
$
17,471,837

 
2.2

 
5.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
First mortgage lien
$
2,117,138

 
$
2,237,801

 
$
2,464,692

 
(5.4
)%
 
(14.1
)%
 
$
2,177,136

 
$
2,519,303

 
(13.6
)%
 
Junior lien
2,628,980

 
2,791,200

 
2,794,035

 
(5.8
)
 
(5.9
)
 
2,709,642

 
2,839,448

 
(4.6
)
 
Total consumer real estate
4,746,118

 
5,029,001

 
5,258,727

 
(5.6
)
 
(9.7
)
 
4,886,778

 
5,358,751

 
(8.8
)
 
Commercial
3,417,052

 
3,302,891

 
3,109,946

 
3.5

 
9.9

 
3,360,287

 
3,134,023

 
7.2

 
Leasing and equipment finance
4,277,376

 
4,285,944

 
4,032,112

 
(0.2
)
 
6.1

 
4,281,636

 
4,012,395

 
6.7

 
Inventory finance
2,723,340

 
2,696,787

 
2,564,648

 
1.0

 
6.2

 
2,710,137

 
2,499,091

 
8.4

 
Auto finance
3,149,974

 
2,714,862

 
2,751,679

 
16.0

 
14.5

 
2,933,620

 
2,727,779

 
7.5

 
Other
10,235

 
9,740

 
9,585

 
5.1

 
6.8

 
9,989

 
9,802

 
1.9

 
Total
$
18,324,095

 
$
18,039,225

 
$
17,726,697

 
1.6

 
3.4

 
$
18,182,447

 
$
17,741,841

 
2.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Period-end loans and leases were $18.4 billion at June 30, 2017, an increase of $0.9 billion, or 5.1 percent, from June 30, 2016 and an increase of $0.4 billion, or 2.2 percent, from March 31, 2017. Average loans and leases were $18.3 billion for the second quarter of 2017, an increase of $0.6 billion, or 3.4 percent, from the second quarter of 2016 and an increase of $0.3 billion, or 1.6 percent, from the first quarter of 2017.

The increases from June 30, 2016 for period-end and average loans and leases were primarily due to increases in the auto finance and commercial portfolios, as well as increases in the leasing and equipment finance and inventory finance portfolios, partially offset by decreases in the consumer real estate portfolio. The increases in the auto finance portfolio were primarily due to the reclassification of approximately $345 million of loans from held for sale to held for investment during the second quarter of 2017. The increases in the commercial portfolio were primarily attributable to originations outpacing lower prepayments and pay-offs. The decreases in the consumer real estate portfolio were primarily due to decreases in the first mortgage lien portfolio due to run-off.

5




The increase from March 31, 2017 for period-end loans and leases was primarily due to an increase in the auto finance portfolio due to the strategic shift and an increase in the consumer real estate junior lien portfolio, partially offset by a seasonal decrease in the inventory finance portfolio. The increase from the first quarter of 2017 for average loans and leases was primarily due to an increase in the auto finance portfolio, partially offset by a decrease in the consumer real estate portfolio.

Loan and lease originations were $4.1 billion for the second quarter of 2017, a decrease of $0.2 billion, or 4.8 percent, from the second quarter of 2016 and an increase of $0.1 billion, or 2.0 percent, from the first quarter of 2017. The decrease from the second quarter of 2016 was primarily due to decreased originations in auto finance, partially offset by higher inventory finance originations. The increase from the first quarter of 2017 was primarily due to increased originations in consumer real estate and leasing and equipment finance, partially offset by lower auto finance originations.

Credit Quality
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit Trends
 
 
 
 
 
 
 
Table 4
 
 
 
 
 
 
 
Change
 
(Dollars in thousands)
2Q
1Q
4Q
3Q
2Q
 
2Q17 vs
2Q17 vs
 
 
2017
2017
2016
2016
2016
 
1Q17
2Q16
 
Over 60-day delinquencies as a percentage of period-end loans and leases(1)
0.11
%
0.09
%
0.12
%
0.12
%
0.12
%
 
2 bps

(1) bps

 
Net charge-offs as a percentage of average loans and leases(2)
0.28

0.11

0.27

0.26

0.23

 
17

5

 
Non-accrual loans and leases and other real estate owned
$
158,000

$
170,940

$
228,242

$
223,759

$
232,334

 
(7.6)%

(32.0)%

 
Provision for credit losses
19,446

12,193

19,888

13,894

13,250

 
59.5

46.8

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

The over 60-day delinquency rate, excluding non-accrual loans and leases, was 0.11 percent at June 30, 2017, down from 0.12 percent at June 30, 2016, and up from 0.09 percent at March 31, 2017. The decrease from June 30, 2016 was primarily driven by improved delinquencies in the commercial and consumer real estate first mortgage lien portfolios, partially offset by higher delinquencies in the auto finance portfolio. The increase from March 31, 2017 was primarily driven by higher delinquencies in the auto finance portfolio.

The net charge-off rate was 0.28 percent for the second quarter of 2017, up from 0.23 percent for the second quarter of 2016 and up from 0.11 percent for the first quarter of 2017. The increase from the second quarter of 2016 was primarily due to increased net charge-offs in the commercial and auto finance portfolios, partially offset by decreased net charge-offs in the consumer real estate first mortgage lien portfolio. The increase from the first quarter of 2017 was primarily due to an $8.7 million recovery of previously charged-off consumer real estate non-accrual loans that were sold in the first quarter of 2017, partially offset by decreased net charge-offs in the auto finance portfolio. Excluding the $8.7 million recovery from the consumer real estate non-accrual loan sale, the net charge-off rate was 0.31% for the first quarter of 2017.


6




Non-accrual loans and leases and other real estate owned were $158.0 million at June 30, 2017, a decrease of $74.3 million, or 32.0 percent, from June 30, 2016, and a decrease of $12.9 million, or 7.6 percent, from March 31, 2017. Non-accrual loans and leases were $129.3 million at June 30, 2017, a decrease of $66.3 million, or 33.9 percent, from June 30, 2016 and a decrease of $9.7 million, or 7.0 percent, from March 31, 2017. The decrease from June 30, 2016 was primarily due to a decrease in consumer real estate non-accrual loans driven by the sale of $49.4 million of non-accrual loans in the first quarter of 2017. The decrease from March 31, 2017 was primarily due to decreases in commercial, consumer real estate and inventory finance non-accrual loans. Other real estate owned was $28.7 million at June 30, 2017, a decrease of $8.1 million, or 21.9 percent, from June 30, 2016, and a decrease of $3.2 million, or 10.1 percent, from March 31, 2017. The decreases from both periods were primarily due to the sales of consumer real estate properties outpacing additions.

Provision for credit losses was $19.4 million for the second quarter of 2017, an increase of $6.2 million, or 46.8 percent, from the second quarter of 2016, and an increase of $7.3 million, or 59.5 percent, from the first quarter of 2017.

The increase from the second quarter of 2016 was primarily due to increases in the provision for credit losses attributable to the auto finance and commercial portfolios, partially offset by decreases in the provision for credit losses attributable to the inventory finance and consumer real estate portfolios. The increase in the provision for credit losses attributable to the auto finance portfolio was primarily due to growth in the portfolio, increased net charge-offs and increased reserve requirements due to the reclassification of loans from held for sale to held for investment. The increase in the provision for credit losses attributable to the commercial portfolio was primarily due to increased net charge-offs related to the work-out activities of three loans transferred to non-accrual during the first quarter of 2017 and growth in the portfolio. The decrease in provision for credit losses attributable to the inventory finance portfolio was primarily due to improving credit quality and the decrease in provision for credit losses attributable to the consumer real estate portfolio was primarily due to a decrease in the loan balance and net charge-offs in the consumer real estate first mortgage lien portfolio.

The increase from the first quarter of 2017 was primarily due to the recovery of $8.7 million in the first quarter of 2017 on previous charge-offs related to the consumer real estate non-accrual loans that were sold and an increase in the provision for credit losses in the second quarter of 2017 attributable to the reclassification of auto finance loans from held for sale to held for investment, partially offset by a decrease in the provision for credit losses attributable to the inventory finance portfolio due to a decrease in the portfolio.


7




Deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table 5
 
 
 
 
 
 
 
Percent Change
 
 
 
 
 
 
 
(Dollars in thousands)
2Q
 
1Q
 
2Q
 
2Q17 vs
 
2Q17 vs
 
YTD
 
YTD
 
Percent
 
 
2017
 
2017
 
2016
 
1Q17
 
2Q16
 
2017
 
2016
 
Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Checking
$
6,012,235

 
$
5,914,203

 
$
5,727,147

 
1.7
 %
 
5.0
 %
 
$
5,963,488

 
$
5,660,223

 
5.4
 %
 
Savings
4,822,338

 
4,773,788

 
4,690,376

 
1.0

 
2.8

 
4,798,198

 
4,702,072

 
2.0

 
Money market
2,221,807

 
2,385,353

 
2,557,897

 
(6.9
)
 
(13.1
)
 
2,303,129

 
2,515,324

 
(8.4
)
 
Certificates of deposit
4,266,488

 
4,033,143

 
4,308,367

 
5.8

 
(1.0
)
 
4,150,460

 
4,206,659

 
(1.3
)
 
Total average deposits
$
17,322,868

 
$
17,106,487

 
$
17,283,787

 
1.3

 
0.2

 
$
17,215,275

 
$
17,084,278

 
0.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average interest rate on deposits(1)
0.33
%
 
0.33
%
 
0.37
%
 
 
 
 
 
0.33
%
 
0.36
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Annualized.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Total average deposits for the second quarter of 2017 increased $39.1 million, or 0.2 percent, from the second quarter of 2016 and increased $216.4 million or 1.3 percent, from the first quarter of 2017. The increase from the second quarter of 2016 was primarily due to growth in average checking and savings balances, partially offset by a decrease in money market balances. The increase from the first quarter of 2017 was primarily due to growth in average certificates of deposit, partially offset by a decrease in money market balances.

The average interest rate on deposits for the second quarter of 2017 was 0.33 percent, down 4 basis points from the second quarter of 2016 and consistent with the first quarter of 2017. The decrease from the second quarter of 2016 was primarily due to decreased average interest rates on money market balances.


8




Non-interest Expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest Expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table 6
 
 
 
 
 
 
 
 Change
 
 
 
 
 
 
 
(Dollars in thousands)
2Q
 
1Q
 
2Q
 
2Q17 vs
 
2Q17 vs
 
YTD
 
YTD
 
Percent
 
 
2017
 
2017
 
2016
 
1Q17
 
2Q16
 
2017
 
2016
 
Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation and employee benefits
$
115,918

 
$
124,477

 
$
118,093

 
(6.9
)%
 
(1.8)%

 
$
240,395

 
$
242,566

 
(0.9
)%
 
Occupancy and equipment
38,965

 
39,600

 
36,884

 
(1.6
)
 
5.6

 
78,565

 
73,892

 
6.3

 
Other
61,075

 
64,037

 
59,416

 
(4.6
)
 
2.8

 
125,112

 
112,764

 
11.0

 
Subtotal
215,958

 
228,114

 
214,393

 
(5.3
)
 
0.7

 
444,072

 
429,222

 
3.5

 
Operating lease depreciation
12,466

 
11,242

 
9,842

 
10.9

 
26.7

 
23,708

 
19,415

 
22.1

 
Foreclosed real estate and repossessed assets, net
4,639

 
4,549

 
3,135

 
2.0

 
48.0

 
9,188

 
7,055

 
30.2

 
Other credit costs, net
24

 
101

 
(54
)
 
(76.2
)
 
N.M.

 
125

 
(42
)
 
N.M.

 
Total non-interest expense
$
233,087

 
$
244,006

 
$
227,316

 
(4.5
)
 
2.5

 
$
477,093

 
$
455,650

 
4.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Efficiency ratio
68.19
%
 
74.93
%
 
68.69
%
 
(674) bps

 
(50) bps

 
71.48
%
 
69.54
%
 
194 bps

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
N.M. Not Meaningful.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Compensation and employee benefits expense decreased $2.2 million, or 1.8 percent, from the second quarter of 2016 and decreased $8.6 million, or 6.9 percent, from the first quarter of 2017. The decrease from the second quarter of 2016 was primarily due to reduced headcount in auto finance, partially offset by higher enterprise services contract labor utilization. The decrease from the first quarter of 2017 was primarily due to seasonality of payroll taxes and reduced headcount in auto finance.

Other non-interest expense increased $1.7 million, or 2.8 percent, from the second quarter of 2016 and decreased $3.0 million, or 4.6 percent, from the first quarter of 2017. The increase from the second quarter of 2016 was primarily due to higher professional fees related to strategic investments in technology capabilities, as well as advertising and marketing expenses, partially offset by $2.9 million of branch realignment expense incurred in the second quarter of 2016. The decrease from the first quarter of 2017 was primarily due to lower severance expense in the auto finance business.

Net expenses related to foreclosed real estate and repossessed assets increased $1.5 million, or 48.0 percent, from the second quarter of 2016 and were consistent with the first quarter of 2017. The increase from the second quarter of 2016 was primarily due to lower gains on sales of consumer real estate properties and higher repossessed assets expense attributable to auto finance, partially offset by lower operating costs.


9




Income Tax Expense

The Company’s effective income tax rate was 28.9 percent for the second quarter of 2017, compared with 32.9 percent for the second quarter of 2016 and 30.0 percent for the first quarter of 2017. The effective income tax rate for the second quarter of 2017 was impacted by a $3.4 million favorable state tax settlement and $0.7 million of tax benefits related to stock compensation. The effective income tax rate for the first quarter of 2017 was impacted by $2.0 million of tax benefits related to stock compensation.

Capital
 
 
 
 
 
 
 
 
 
Capital Information
 
 
Table 7
 
At Jun. 30,
 
At Dec. 31,
 
(Dollars in thousands, except per-share data)
2017
 
2016
 
Total equity
$
2,549,831

 
$
2,444,645

 
Book value per common share
13.20

 
12.66

 
Tangible book value per common share(1)
11.74

 
11.33

 
Common equity to assets
10.26
%
 
10.09
%
 
Tangible common equity to tangible assets(1)
9.24

 
9.13

 
Capital accumulation rate(2)
6.70

 
8.59

 
 
 
 
 
 
 
At Jun. 30,
 
At Dec. 31,
 
Regulatory Capital:
2017(3)
 
2016
 
Common equity Tier 1 capital
$
2,036,369

 
$
1,970,323

 
Tier 1 capital
2,317,915

 
2,248,221

 
Total capital
2,683,319

 
2,635,925

 
 
 
 
 
 
Regulatory Capital Ratios:
 
 
 
 
Common equity Tier 1 capital ratio
10.24
%
 
10.24
%
 
Tier 1 risk-based capital ratio
11.66

 
11.68

 
Total risk-based capital ratio
13.49

 
13.69

 
Tier 1 leverage ratio
10.76

 
10.73

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

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

On July 19, 2017, TCF's Board of Directors declared a regular quarterly cash dividend of 7.5 cents per common share, payable on September 1, 2017, to stockholders of record at the close of business on August 15, 2017. TCF also declared dividends on the 7.50% Series A and 6.45% Series B Non-Cumulative Perpetual Preferred Stock, both payable on September 1, 2017, to stockholders of record at the close of business on August 15, 2017.

10




Webcast Information
A live webcast of TCF's conference call to discuss the second quarter earnings will be hosted at TCF's website,     http://ir.tcfbank.com, on July 24, 2017 at 9:00 a.m. CDT. A slide presentation for the call will be available on the website prior to the call. Additionally, the webcast will be available for replay on TCF's website after the conference call. The website also includes free access to company news releases, TCF's annual report, investor presentations and SEC filings.

TCF is a Wayzata, Minnesota-based national bank holding company. As of June 30, 2017, TCF had $22.1 billion in total assets and 321 branches in Illinois, Minnesota, Michigan, Colorado, Wisconsin, Arizona and South Dakota providing retail and commercial banking services. TCF, through its subsidiaries, also conducts commercial leasing, equipment finance and auto finance business in all 50 states and commercial inventory finance business in all 50 states and Canada. For more information about TCF, please visit http://ir.tcfbank.com.



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

Certain factors could cause the Company's future results to differ materially from those expressed or implied in any forward-looking statements contained herein. These factors include the factors discussed in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2016 under the heading "Risk Factors", the factors discussed below and any other cautionary statements, written or oral, which may be made or referred to in connection with any such forward-looking statements. Since it is not possible to foresee all such factors, these factors should not be considered as complete or exhaustive.
 
Adverse Economic or Business Conditions; Competitive Conditions; Credit and Other Risks. Deterioration in general economic and banking industry conditions, including those arising from government shutdowns, defaults, anticipated defaults or rating agency downgrades of sovereign debt (including debt of the U.S.), or increases in unemployment; adverse economic, business and competitive developments such as shrinking interest margins, reduced demand for financial services and loan and lease products, deposit outflows, increased deposit costs due to competition for deposit growth and evolving payment system developments, deposit account attrition or an inability to increase the number of deposit accounts; customers completing financial transactions without using a bank; adverse changes in credit quality and other risks posed by TCF's loan, lease, investment, securities held to maturity and securities available for sale portfolios, including declines in commercial or residential real estate values, changes in the allowance for loan and lease losses dictated by new market conditions or regulatory requirements, or the inability of home equity line borrowers to make increased payments caused by increased interest rates or amortization of principal; deviations from estimates of prepayment rates and fluctuations in interest rates that result in decreases in the value of assets such as interest-only strips that arise in connection with TCF's loan sales activity; interest rate risks resulting from fluctuations in prevailing interest rates or other factors that result in a mismatch between yields earned on TCF's interest-earning assets and the rates paid on its deposits and borrowings; foreign currency exchange risks; counterparty risk, including the risk of defaults by our counterparties or diminished availability of counterparties who satisfy our credit quality requirements; decreases in demand for the types of equipment that TCF leases or finances; the effect of any negative publicity.
 
Legislative and Regulatory Requirements. New consumer protection and supervisory requirements and regulations, including those resulting from action by the Consumer Financial Protection Bureau ("CFPB") and changes in the scope of Federal preemption of state laws that could be applied to national banks and their subsidiaries; the imposition of requirements that adversely impact TCF's deposit, lending, loan collection and other business activities such as mortgage foreclosure moratorium laws, further regulation of financial institution campus banking programs, or new restrictions on loan and lease products; changes affecting customer account charges and fee income, including changes to interchange rates; regulatory actions or changes in customer opt-in preferences with respect to overdrafts, which may have an adverse impact on TCF; governmental regulations or judicial actions affecting the security interests of creditors; deficiencies in TCF's compliance programs, including under the Bank Secrecy Act in past or future periods, which may result in regulatory enforcement action including monetary penalties; increased health care costs including those resulting from health care reform; regulatory criticism and resulting enforcement actions or other adverse consequences such as increased capital requirements, higher deposit insurance assessments or monetary damages or penalties; heightened regulatory practices, requirements or expectations, including, but not limited to, requirements related to enterprise risk management, the Bank Secrecy Act and anti-money laundering compliance activity.

12





Earnings/Capital Risks and Constraints, Liquidity Risks. Limitations on TCF's ability to pay dividends or to increase dividends because of financial performance deterioration, regulatory restrictions or limitations; increased deposit insurance premiums, special assessments or other costs related to adverse conditions in the banking industry; the impact on banks of regulatory reform, including additional capital, leverage, liquidity and risk management requirements or changes in the composition of qualifying regulatory capital; adverse changes in securities markets directly or indirectly affecting TCF's ability to sell assets or to fund its operations; diminished unsecured borrowing capacity resulting from TCF credit rating downgrades or unfavorable conditions in the credit markets that restrict or limit various funding sources; costs associated with new regulatory requirements or interpretive guidance including those relating to liquidity; uncertainties relating to future retail deposit account changes, including limitations on TCF's ability to predict customer behavior and the impact on TCF's fee revenues.
 
Branching Risk; Growth Risks. Adverse developments affecting TCF's supermarket banking relationships or either of the primary supermarket chains in which TCF maintains supermarket branches; costs related to closing underperforming branches; inability to timely close underperforming branches due to long-term lease obligations; slower than anticipated growth in existing or acquired businesses; inability to successfully execute on TCF's growth strategy through acquisitions or expanding existing business relationships; failure to expand or diversify TCF's balance sheet through new or expanded programs or opportunities; failure to effectuate, and risks of claims related to, sales and securitizations of loans; risks related to new product additions and addition of distribution channels (or entry into new markets) for existing products.

Technological and Operational Matters. Technological or operational difficulties, loss or theft of information, cyber-attacks and other security breaches, counterparty failures and the possibility that deposit account losses (fraudulent checks, etc.) may increase; failure to keep pace with technological change, such as by failing to develop and maintain technology necessary to satisfy customer demands, costs and possible disruptions related to upgrading systems; the failure to attract and retain key employees.
 
Litigation Risks. Results of litigation or government enforcement actions such as TCF's pending litigation with the CFPB and related matters, including class action litigation or enforcement actions concerning TCF's lending or deposit activities, including account opening/origination, servicing practices, fees or charges, employment practices, or checking account overdraft program "opt in" requirements; possible increases in indemnification obligations for certain litigation against Visa U.S.A.

Accounting, Audit, Tax and Insurance Matters. Changes in accounting standards or interpretations of existing standards; federal or state monetary, fiscal or tax policies, including adoption of state legislation that would increase state taxes; ineffective internal controls; adverse federal, state or foreign tax assessments or findings in tax audits; lack of or inadequate insurance coverage for claims against TCF; potential for claims and legal action related to TCF's fiduciary responsibilities.



13




TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per-share data)
(Unaudited)
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Change
 
2017
 
2016
 
$
 
%
Interest income:
 
 
 
 
 
 
 
Loans and leases
$
234,092

 
$
214,128

 
$
19,964

 
9.3
 %
Securities available for sale
8,052

 
6,396

 
1,656

 
25.9

Securities held to maturity
1,035

 
1,116

 
(81
)
 
(7.3
)
Loans held for sale and other
5,338

 
12,364

 
(7,026
)
 
(56.8
)
Total interest income
248,517

 
234,004

 
14,513

 
6.2

Interest expense:
 
 
 
 
 
 
 
Deposits
14,436

 
15,893

 
(1,457
)
 
(9.2
)
Borrowings
6,920

 
5,127

 
1,793

 
35.0

Total interest expense
21,356

 
21,020

 
336

 
1.6

Net interest income
227,161

 
212,984

 
14,177

 
6.7

Provision for credit losses
19,446

 
13,250

 
6,196

 
46.8

Net interest income after provision for credit losses
207,715

 
199,734

 
7,981

 
4.0

Non-interest income:
 
 
 
 
 
 
 
Fees and service charges
32,733

 
34,622

 
(1,889
)
 
(5.5
)
Card revenue
14,154

 
14,083

 
71

 
0.5

ATM revenue
5,061

 
5,288

 
(227
)
 
(4.3
)
Subtotal
51,948

 
53,993

 
(2,045
)
 
(3.8
)
Gains on sales of auto loans, net
380

 
10,143

 
(9,763
)
 
(96.3
)
Gains on sales of consumer real estate loans, net
8,980

 
10,839

 
(1,859
)
 
(17.2
)
Servicing fee income
10,730

 
9,502

 
1,228

 
12.9

Subtotal
20,090

 
30,484

 
(10,394
)
 
(34.1
)
Leasing and equipment finance
39,830

 
31,074

 
8,756

 
28.2

Other
2,795

 
2,405

 
390

 
16.2

Fees and other revenue
114,663

 
117,956

 
(3,293
)
 
(2.8
)
Gains (losses) on securities, net

 

 

 

Total non-interest income
114,663

 
117,956

 
(3,293
)
 
(2.8
)
Non-interest expense:
 
 
 
 
 
 
 
Compensation and employee benefits
115,918

 
118,093

 
(2,175
)
 
(1.8
)
Occupancy and equipment
38,965

 
36,884

 
2,081

 
5.6

Other
61,075

 
59,416

 
1,659

 
2.8

Subtotal
215,958

 
214,393

 
1,565

 
0.7

Operating lease depreciation
12,466

 
9,842

 
2,624

 
26.7

Foreclosed real estate and repossessed assets, net
4,639

 
3,135

 
1,504

 
48.0

Other credit costs, net
24

 
(54
)
 
78

 
N.M.

Total non-interest expense
233,087

 
227,316

 
5,771

 
2.5

Income before income tax expense
89,291

 
90,374

 
(1,083
)
 
(1.2
)
Income tax expense
25,794

 
29,706

 
(3,912
)
 
(13.2
)
Income after income tax expense
63,497

 
60,668

 
2,829

 
4.7

Income attributable to non-controlling interest
3,065

 
2,974

 
91

 
3.1

Net income attributable to TCF Financial Corporation
60,432

 
57,694

 
2,738

 
4.7

Preferred stock dividends
4,847

 
4,847

 

 

Net income available to common stockholders
$
55,585

 
$
52,847

 
$
2,738

 
5.2

 
 
 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
 
 
Basic
$
0.33

 
$
0.32

 
$
0.01

 
3.1
 %
Diluted
0.33

 
0.31

 
0.02

 
6.5

 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.075

 
$
0.075

 
$

 
 %
 
 
 
 
 
 
 
 
Average common and common equivalent shares
 
 
 
 
 
 
 
outstanding (in thousands):
 
 
 
 
 
 
 
Basic
168,594

 
167,334

 
1,260

 
0.8
 %
Diluted
168,857

 
167,849

 
1,008

 
0.6

 
 
 
 
 
 
 
 
N.M. Not Meaningful.

14




TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per-share data)
(Unaudited)
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
Change
 
2017
 
2016
 
$
 
%
Interest income:
 
 
 
 
 
 
 
Loans and leases
$
453,640

 
$
428,933

 
$
24,707

 
5.8
 %
Securities available for sale
16,032

 
11,894

 
4,138

 
34.8

Securities held to maturity
2,315

 
2,435

 
(120
)
 
(4.9
)
Loans held for sale and other
18,837

 
23,084

 
(4,247
)
 
(18.4
)
Total interest income
490,824

 
466,346

 
24,478

 
5.2

Interest expense:
 
 
 
 
 
 
 
Deposits
28,151

 
30,884

 
(2,733
)
 
(8.8
)
Borrowings
13,398

 
10,820

 
2,578

 
23.8

Total interest expense
41,549

 
41,704

 
(155
)
 
(0.4
)
Net interest income
449,275

 
424,642

 
24,633

 
5.8

Provision for credit losses
31,639

 
32,092

 
(453
)
 
(1.4
)
Net interest income after provision for credit losses
417,636

 
392,550

 
25,086

 
6.4

Non-interest income:
 
 
 
 
 
 
 
Fees and service charges
64,015

 
67,439

 
(3,424
)
 
(5.1
)
Card revenue
27,304

 
27,446

 
(142
)
 
(0.5
)
ATM revenue
9,736

 
10,309

 
(573
)
 
(5.6
)
Subtotal
101,055

 
105,194

 
(4,139
)
 
(3.9
)
Gains on sales of auto loans, net
3,244

 
22,063

 
(18,819
)
 
(85.3
)
Gains on sales of consumer real estate loans, net
17,871

 
20,223

 
(2,352
)
 
(11.6
)
Servicing fee income
22,381

 
18,385

 
3,996

 
21.7

Subtotal
43,496

 
60,671

 
(17,175
)
 
(28.3
)
Leasing and equipment finance
68,128

 
59,561

 
8,567

 
14.4

Other
5,498

 
5,248

 
250

 
4.8

Fees and other revenue
218,177

 
230,674

 
(12,497
)
 
(5.4
)
Gains (losses) on securities, net

 
(116
)
 
116

 
(100.0
)
Total non-interest income
218,177

 
230,558

 
(12,381
)
 
(5.4
)
Non-interest expense:
 
 
 
 
 
 
 
Compensation and employee benefits
240,395

 
242,566

 
(2,171
)
 
(0.9
)
Occupancy and equipment
78,565

 
73,892

 
4,673

 
6.3

Other
125,112

 
112,764

 
12,348

 
11.0

Subtotal
444,072

 
429,222

 
14,850

 
3.5

Operating lease depreciation
23,708

 
19,415

 
4,293

 
22.1

Foreclosed real estate and repossessed assets, net
9,188

 
7,055

 
2,133

 
30.2

Other credit costs, net
125

 
(42
)
 
167

 
N.M.

Total non-interest expense
477,093

 
455,650

 
21,443

 
4.7

Income before income tax expense
158,720

 
167,458

 
(8,738
)
 
(5.2
)
Income tax expense
46,637

 
56,509

 
(9,872
)
 
(17.5
)
Income after income tax expense
112,083

 
110,949

 
1,134

 
1.0

Income attributable to non-controlling interest
5,373

 
5,209

 
164

 
3.1

Net income attributable to TCF Financial Corporation
106,710

 
105,740

 
970

 
0.9

Preferred stock dividends
9,694

 
9,694

 

 

Net income available to common stockholders
$
97,016

 
$
96,046

 
$
970

 
1.0

 
 
 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
 
 
Basic
$
0.58

 
$
0.57

 
$
0.01

 
1.8
 %
Diluted
0.58

 
0.57

 
0.01

 
1.8

 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.15

 
$
0.15

 
$

 
 %
 
 
 
 
 
 
 
 
Average common and common equivalent shares
 
 
 
 
 
 
 
outstanding (in thousands):
 
 
 
 
 
 
 
Basic
168,250

 
167,111

 
1,139

 
0.7
 %
Diluted
168,615

 
167,638

 
977

 
0.6

 
 
 
 
 
 
 
 
N.M. Not Meaningful.


15




TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
(Unaudited)
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Change
 
2017
 
2016
 
$
 
%
Net income attributable to TCF Financial Corporation
$
60,432

 
$
57,694

 
$
2,738

 
4.7
 %
Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
Net unrealized gains (losses) on securities available for sale and interest-only strips
12,341

 
13,568

 
(1,227
)
 
(9.0
)
Net unrealized gains (losses) on net investment hedges
(1,149
)
 
(210
)
 
(939
)
 
N.M.

Foreign currency translation adjustment
2,007

 
339

 
1,668

 
N.M.

Recognized postretirement prior service cost
(7
)
 
(7
)
 

 

Total other comprehensive income (loss), net of tax
13,192

 
13,690

 
(498
)
 
(3.6
)
Comprehensive income
$
73,624

 
$
71,384

 
$
2,240

 
3.1

 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
Change
 
2017