Toggle SGML Header (+)


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):  July 24, 2007

 


 

 

TCF FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

 


 

Delaware

 

001-10253

 

41-1591444

(State or other jurisdiction of

 

(Commission File Number)

 

(IRS Employer Identification No.)

incorporation or organization)

 

 

 

 

 

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

(Address of principal executive offices)

 

(612) 661-6500

(Registrant’s telephone number, including area code)

 


 

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

 

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

 

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

 

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

 

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

 

 




Item 2.02  Results of Operations and Financial Condition.

In accordance with General Instruction B.2 of Form 8-K, the following information, including Exhibit 99.1, shall not be deemed filed for the 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 shall be expressly set forth by specific reference in such a filing.

The registrant issued a press release dated July 24, 2007, attached to this Form 8-K as Exhibit 99.1, announcing its results of operations for the quarter ended June 30, 2007.

Item 9.01    Financial Statements and Exhibits.

(c)          Exhibits.

Exhibit No.                                                             Description

99.1                                                                                                                                                        Earnings Release of TCF Financial Corporation,
dated July 24, 2007

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

TCF FINANCIAL CORPORATION

 

 

 

 

 

/s/ Lynn A. Nagorske

 

 

Lynn A. Nagorske,

 

 

Chief Executive Officer and Director

 

 

(Principal Executive Officer)

 

 

 

 

 

/s/ Thomas F. Jasper

 

 

Thomas F. Jasper, Executive Vice President and

 

 

Chief Financial Officer

 

 

(Principal Financial Officer)

 

 

 

 

 

/s/ David M. Stautz

 

 

David M. Stautz, Senior Vice President,

 

 

Controller and Assistant Treasurer

 

 

(Principal Accounting Officer)

 

Dated:    July 24, 2007

 

2



(Back To Top)

Section 2: EX-99.1 (EARNINGS RELEASE OF TCF FINANCIAL CORPORATION, DATED JULY 24, 2007)

Exhibit 99.1

NEWS RELEASE

 

 

 

 

 

CONTACT:

Jason Korstange

 

 

 

(952) 745-2755

 

 

 

www.tcfbank.com

 

 

 

 

 

FOR IMMEDIATE RELEASE

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

 

TCF Reports Second Quarter Earnings and EPS ($.49)

 

SECOND QUARTER HIGHLIGHTS

·                  Diluted earnings per share of 49 cents

·                  Net income of $62.1 million

·                  Return on average assets of 1.67 percent

·                  Return on average common equity of 24.16 percent

 

EARNINGS SUMMARY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 1

 

($ in thousands, except per-share data)

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 

 

2Q

 

1Q

 

2Q

 

2Q07 vs

 

2Q07 vs

 

YTD

 

YTD

 

Percent

 

 

 

2007

 

2007

 

2006

 

1Q07

 

2Q06

 

2007

 

2006

 

Change

 

Net income

 

$

62,129

 

$

82,724

 

$

67,061

 

 

(24.9

)%

 

 

(7.4

)%

 

$

144,853

 

$

125,283

 

 

15.6

%

 

Diluted earnings per common share

 

.49

 

.65

 

.52

 

 

(24.6

)

 

 

(5.8

)

 

1.14

 

.96

 

 

18.8

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Ratios (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

1.67

%

 

 

2.24

%

 

 

1.92

%

 

 

 

 

 

 

1.95

%

 

 

1.82

%

 

 

 

Return on average common equity

 

 

24.16

 

 

 

31.81

 

 

 

27.75

 

 

 

 

 

 

 

28.08

 

 

 

25.80

 

 

 

 

Net interest margin

 

 

4.02

 

 

 

4.00

 

 

 

4.22

 

 

 

 

 

 

 

4.01

 

 

 

4.23

 

 

 

 

Net charge-offs as a percentage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  of average loans and leases

 

 

.24

 

 

 

.10

 

 

 

.16

 

 

 

 

 

 

 

.17

 

 

 

.12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  (1) Annualized.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1




WAYZATA, MN, July 24, 2007 — TCF Financial Corporation (“TCF”) (NYSE: TCB) today reported diluted earnings per share of 49 cents for the second quarter of 2007, down 5.8 percent, compared with 52 cents for the same 2006 period.  Net income for the second quarter of 2007 was $62.1 million, down 7.4 percent from $67.1 million for the second quarter of 2006.  The second quarter of 2007 includes $2.7 million in pre-tax gains on sales of real estate and a $1.9 million favorable income tax adjustment for a combined after-tax impact of three cents per diluted share.  The second quarter of 2006 included a $4.1 million favorable income tax adjustment for an after-tax impact of three cents per diluted share.

For the second quarter of 2007, return on average assets (“ROA”) was 1.67 percent and return on average common equity (“ROE”) was 24.16 percent, compared with 1.92 percent and 27.75 percent, respectively, for the second quarter of 2006.

Diluted earnings per share for the first six months of 2007 was $1.14, compared with 96 cents for the same 2006 period.  The first six months of 2007 includes a $31.2 million pre-tax gain on the sale of ten outstate Michigan branches, $2.7 million of pre-tax gains on sales of real estate, and $10.4 million of favorable income tax settlements and adjustments for a combined after-tax impact of 26 cents per diluted share.  The first six months of 2006 includes $4.5 million in pre-tax gains on sale of assets and $4.1 million in favorable income tax adjustments for a combined after-tax impact of five cents per diluted share.

 

Chief Executive Officer’s Statement

“Despite a very difficult operating environment primarily due to the inverted yield curve, TCF successfully increased its net interest income and net interest margin rate from the first quarter of 2007 and effectively controlled expenses,” said Lynn A. Nagorske, CEO, TCF Financial Corporation. “However, the provision for credit losses increased from the first quarter primarily as a result of the slowdown in the housing market and increased reserves for certain commercial loans. Also, the first quarter provision included a large lease recovery.”

2




 

Total Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 2

 

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

($ in thousands)

 

2Q

 

1Q

 

2Q

 

2Q07 vs

 

2Q07 vs

 

YTD

 

YTD

 

Percent

 

 

 

2007

 

2007

 

2006

 

1Q07

 

2Q06

 

2007

 

2006

 

Change

 

Net interest income

 

$

137,425

 

$

135,477

 

$

135,442

 

 

1.4

%

 

 

1.5

%

 

$

272,902

 

$

266,610

 

 

2.4

%

 

Fees and other revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Fees and service charges

 

71,728

 

62,022

 

71,099

 

 

15.6

 

 

 

.9

 

 

133,750

 

132,654

 

 

.8

 

 

  Card revenue

 

24,876

 

23,261

 

22,984

 

 

6.9

 

 

 

8.2

 

 

48,137

 

44,246

 

 

8.8

 

 

  ATM revenue

 

9,314

 

8,749

 

9,762

 

 

6.5

 

 

 

(4.6

)

 

18,063

 

18,861

 

 

(4.2

)

 

  Investments and insurance

 

2,772

 

2,178

 

2,894

 

 

27.3

 

 

 

(4.2

)

 

4,950

 

5,382

 

 

(8.0

)

 

    Total banking fees

 

108,690

 

96,210

 

106,739

 

 

13.0

 

 

 

1.8

 

 

204,900

 

201,143

 

 

1.9

 

 

  Leasing and equipment finance

 

15,199

 

14,001

 

12,552

 

 

8.6

 

 

 

21.1

 

 

29,200

 

24,467

 

 

19.3

 

 

  Other

 

2,993

 

1,953

 

4,331

 

 

53.3

 

 

 

(30.9

)

 

4,946

 

12,583

 

 

(60.7

)

 

    Total fees and other revenue

 

126,882

 

112,164

 

123,622

 

 

13.1

 

 

 

2.6

 

 

239,046

 

238,193

 

 

.4

 

 

    Gains on sales of branches

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      and real estate

 

2,723

 

31,173

 

-    

 

 

(91.3

)

 

 

100.0

 

 

33,896

 

2,928

 

 

N.M

.

 

      Total non-interest income

 

129,605

 

143,337

 

123,622

 

 

(9.6

)

 

 

4.8

 

 

272,942

 

241,121

 

 

13.2

 

 

      Total revenue

 

$

267,030

 

$

278,814

 

$

259,064

 

 

(4.2

)

 

 

3.1

 

 

$

545,844

 

$

507,731

 

 

7.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (1)

 

 

4.02

%

 

 

4.00

%

 

 

4.22

%

 

 

 

 

 

 

4.01

%

 

 

4.23

%

 

 

 

Fees and other revenue as a % of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Total revenue

 

 

47.52

 

 

 

40.23

 

 

 

47.72

 

 

 

 

 

 

 

43.79

 

 

 

46.91

 

 

 

 

    Average assets (1)

 

 

3.42

 

 

 

3.03

 

 

 

3.54

 

 

 

 

 

 

 

3.23

 

 

 

3.45

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

N.M. = Not Meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Annualized.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income

TCF’s net interest income in the second quarter of 2007 was $137.4 million, up $2 million, or 1.5 percent, from the second quarter of 2006 and up $1.9 million, or 1.4 percent, from the first quarter of 2007.  Net interest margin in the second quarter of 2007 was 4.02 percent, compared with 4.22 percent for the second quarter of 2006 and 4.00 percent for the first quarter of 2007.

The increase in net interest income from the second quarter of 2006 was primarily attributable to a $841.6 million, or 6.5 percent, increase in average interest-earning assets, partially offset by a 20 basis point reduction in net interest margin.  The decrease in net interest margin from the second quarter of 2006 was primarily due to continued customer preference for lower-yielding fixed-rate loans and higher-cost market-rate deposits largely due to the flat or inverted yield curve which persisted for the majority of the period.

3




The increase in net interest income from the first quarter of 2007 was primarily due to a $64.4 million increase in total interest-earning assets, a 2 basis point increase in net interest margin and one additional day in the second quarter of 2007.  The increase in net interest margin from the first quarter of 2007 was primarily due to investments that were replaced by higher-yielding Power Assets and increased yields in leasing, partially offset by the effect of Michigan deposits sold in the first quarter of 2007.

 

Non-interest Income

Total non-interest income was $129.6 million for the second quarter of 2007, up $6 million, or 4.8 percent, from the same period of 2006.

Banking fees and service charges were $71.7 million for the second quarter of 2007, up $629 thousand, or .9 percent, from the second quarter of 2006 primarily attributable to deposit account growth.

Card revenues totaled $24.9 million for the second quarter of 2007, up $1.9 million, or 8.2 percent, over the same period in 2006, due to increased sales volume as a result of increases in the number of active accounts and transactions per account.

Leasing and equipment finance revenues were $15.2 million for the second quarter of 2007, up $2.6 million, or 21.1 percent, from the 2006 second quarter due to higher sales-type and operating lease revenues.

Other revenues were $3 million for the second quarter of 2007, down $1.3 million from the same period of 2006.  The decline primarily reflects non-recurring transactions in the second quarter of 2006 including a $706 thousand gain on the sale of a private bank investment and $704 thousand of interest on an income tax refund.

Gains on sales of real estate were $2.7 million for the second quarter of 2007.  These gains primarily relate to the relocation of certain mature traditional branches to improved sites and facilities.  No such sales or gains occurred in the second quarter of 2006.

4




Branches

Number of Branches - 2Q 2007

 

 

 

 

 

 

 

 

 

Table 3

 

 

 

Total

 

New

 

 

 

 

 

Total

 

New

 

 

 

Branches

 

Branches (1)

 

 

 

 

 

Branches

 

Branches (1)

 

Minnesota

 

108

 

23

 

 

 

Traditional

 

191

 

78

 

Illinois

 

199

 

38

 

 

 

Supermarket

 

241

 

46

 

Michigan

 

56

 

25

 

 

 

Campus

 

14

 

9

 

Colorado

 

45

 

41

 

 

 

 

 

446

 

133

 

Wisconsin

 

32

 

4

 

 

 

 

 

 

 

 

 

Indiana

 

5

 

1

 

 

 

 

 

 

 

 

 

Arizona

 

1

 

1

 

 

 

 

 

 

 

 

 

    Total Branches

 

446

 

133

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) New branches opened since January 1, 2002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

During the second quarter of 2007, TCF opened seven new branches, including three traditional branches, two supermarket branches, and two campus branches.  TCF also relocated one traditional branch and closed two traditional and two supermarket branches and transferred the customer accounts to nearby branches.  Since January 2002, TCF has now opened 133 new branches, representing 29.8 percent of TCF’s 446 total branches.

During the remainder of 2007, TCF plans to open nine additional branches, consisting of five traditional branches, three supermarket branches and one campus branch.  To improve the customer experience and enhance deposit growth, TCF also intends to relocate six branches to improved locations and facilities, including five traditional branches and one supermarket branch, and to remodel 16 supermarket branches and one traditional branch during the last six months of 2007.  TCF also plans to close one traditional branch in the third quarter of 2007.

5




Additional information regarding the results of TCF’s new branches opened since January 1, 2002 is summarized as follows:

New Branch Information

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 4

 

 

 

 

 

 

 

2Q07 vs 2Q06

 

 

 

 

 

 

 

($ in thousands)

 

2Q

 

2Q

 

 

 

Percent

 

YTD

 

YTD

 

Percent

 

 

 

2007

 

2006

 

Change

 

Change

 

2007

 

2006

 

Change

 

Number of deposit accounts

 

351,669

 

257,019

 

94,650

 

 

36.8

%

 

 

 

 

 

 

 

Average deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Checking

 

$

343,395

 

$

276,021

 

$

67,374

 

 

24.4

 

 

$

331,959

 

$

265,393

 

 

25.1

%

 

  Savings

 

335,415

 

251,023

 

84,392

 

 

33.6

 

 

323,303

 

244,718

 

 

32.1

 

 

  Money market

 

43,548

 

25,938

 

17,610

 

 

67.9

 

 

41,664

 

25,552

 

 

63.1

 

 

    Subtotal

 

722,358

 

552,982

 

169,376

 

 

30.6

 

 

696,926

 

535,663

 

 

30.1

 

 

  Certificates of deposit

 

446,333

 

406,314

 

40,019

 

 

9.8

 

 

440,148

 

360,877

 

 

22.0

 

 

    Total deposits

 

$

1,168,691

 

$

959,296

 

$

209,395

 

 

21.8

 

 

$

1,137,074

 

$

896,540

 

 

26.8

 

 

  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total fees and other revenue

 

$

18,570

 

$

14,187

 

$

4,383

 

 

30.9

 

 

$

33,526

 

$

25,771

 

 

30.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6




Power Assets®

Average Power Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 5

 

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

($ in thousands)

 

2Q

 

1Q

 

2Q

 

2Q07 vs

 

2Q07 vs

 

YTD

 

YTD

 

Percent

 

 

 

2007

 

2007

 

2006

 

1Q07

 

2Q06

 

2007

 

2006

 

Change

 

Loans and leases: (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Consumer home equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  First mortgage lien

 

$

3,894,939

 

$

3,808,390

 

$

3,509,588

 

 

2.3

%

 

 

11.0

%

 

$

3,851,905

 

$

3,459,600

 

 

11.3

%

 

  Junior lien

 

2,140,773

 

2,109,723

 

1,901,063

 

 

1.5

 

 

 

12.6

 

 

2,125,333

 

1,854,125

 

 

14.6

 

 

    Total consumer home equity

 

6,035,712

 

5,918,113

 

5,410,651

 

 

2.0

 

 

 

11.6

 

 

5,977,238

 

5,313,725

 

 

12.5

 

 

  Consumer other

 

41,708

 

41,853

 

34,854

 

 

(.3

)

 

 

19.7

 

 

41,780

 

34,843

 

 

19.9

 

 

      Total consumer

 

6,077,420

 

5,959,966

 

5,445,505

 

 

2.0

 

 

 

11.6

 

 

6,019,018

 

5,348,568

 

 

12.5

 

 

  Commercial real estate

 

2,349,608

 

2,377,683

 

2,398,425

 

 

(1.2

)

 

 

(2.0

)

 

2,363,568

 

2,364,192

 

 

-

 

 

  Commercial business

 

557,134

 

554,127

 

500,530

 

 

.5

 

 

 

11.3

 

 

555,639

 

475,088

 

 

17.0

 

 

      Total commercial

 

2,906,742

 

2,931,810

 

2,898,955

 

 

(.9

)

 

 

.3

 

 

2,919,207

 

2,839,280

 

 

2.8

 

 

  Leasing and equipment finance

 

1,879,958

 

1,837,964

 

1,624,781

 

 

2.3

 

 

 

15.7

 

 

1,859,077

 

1,579,161

 

 

17.7

 

 

      Total Power Assets

 

$

10,864,120

 

$

10,729,740

 

$

9,969,241

 

 

1.3

 

 

 

9.0

 

 

$

10,797,302

 

$

9,767,009

 

 

10.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  (1) Excludes residential real estate loans, education loans held for sale and operating lease receivables.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TCF’s average Power Assets increased $894.9 million, or 9 percent, from the second quarter of 2006.  TCF’s average consumer loan balances increased $631.9 million, or 11.6 percent, average commercial loan balances increased $7.8 million, or .3 percent, and leasing and equipment finance balances increased $255.2 million, or 15.7 percent, from the second quarter of 2006.

TCF’s average Power Assets increased $134.4 million, or 5 percent (annualized), from the first quarter of 2007.  The second quarter’s lower annualized growth rate is related to slower growth in consumer home equity loans resulting from the slow down in the housing market and increased prepayments of commercial real estate loans.

7




Power Liabilities®

Average Power Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 6

 

 

 

 

 

 

 

 

 

Percent  Change

 

 

 

 

 

 

 

($ in thousands)

 

2Q

 

1Q

 

2Q

 

2Q07 vs

 

2Q07 vs

 

YTD

 

YTD

 

Percent

 

 

 

2007

 

2007

 

2006

 

1Q07

 

2Q06

 

2007

 

2006

 

Change

 

Non-interest bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Retail

 

$

1,492,429

 

$

1,532,150

 

$

1,557,933

 

 

(2.6

)%

 

 

(4.2

)%

 

$

1,512,180

 

$

1,555,982

 

 

(2.8

)%

 

  Small business

 

586,711

 

596,460

 

604,776

 

 

(1.6

)

 

 

(3.0

)

 

591,559

 

597,548

 

 

(1.0

)

 

  Commercial and custodial

 

199,226

 

201,860

 

234,188

 

 

(1.3

)

 

 

(14.9

)

 

200,534

 

258,165

 

 

(22.3

)

 

    Total non-interest bearing

 

2,278,366

 

2,330,470

 

2,396,897

 

 

(2.2

)

 

 

(4.9

)

 

2,304,273

 

2,411,695

 

 

(4.5

)

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Premier checking

 

1,070,397

 

1,073,500

 

1,000,749

 

 

(.3

)

 

 

7.0

 

 

1,071,940

 

969,575

 

 

10.6

 

 

  Other checking

 

834,405

 

824,512

 

893,800

 

 

1.2

 

 

 

(6.6

)

 

829,486

 

901,835

 

 

(8.0

)

 

    Subtotal

 

1,904,802

 

1,898,012

 

1,894,549

 

 

.4

 

 

 

.5

 

 

1,901,426

 

1,871,410

 

 

1.6

 

 

  Premier savings

 

1,109,341

 

1,070,059

 

855,979

 

 

3.7

 

 

 

29.6

 

 

1,089,809

 

818,222

 

 

33.2

 

 

  Other savings

 

1,300,857

 

1,314,471

 

1,415,767

 

 

(1.0

)

 

 

(8.1

)

 

1,307,627

 

1,428,223

 

 

(8.4

)

 

    Subtotal

 

2,410,198

 

2,384,530

 

2,271,746

 

 

1.1

 

 

 

6.1

 

 

2,397,436

 

2,246,445

 

 

6.7

 

 

  Money market

 

604,217

 

610,286

 

610,766

 

 

(1.0

)

 

 

(1.1

)

 

607,235

 

640,022

 

 

(5.1

)

 

    Subtotal

 

4,919,217

 

4,892,828

 

4,777,061

 

 

.5

 

 

 

3.0

 

 

4,906,097

 

4,757,877

 

 

3.1

 

 

  Certificates of deposit

 

2,525,886

 

2,513,838

 

2,249,694

 

 

.5

 

 

 

12.3

 

 

2,519,895

 

2,128,341

 

 

18.4

 

 

      Total interest-bearing

 

7,445,103

 

7,406,666

 

7,026,755

 

 

.5

 

 

 

6.0

 

 

7,425,992

 

6,886,218

 

 

7.8

 

 

        Power Liabilities

 

$

9,723,469

 

$

9,737,136

 

$

9,423,652

 

 

(.1

)

 

 

3.2

 

 

$

9,730,265

 

$

9,297,913

 

 

4.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average rate on deposits

 

 

2.40

%

 

 

2.38

%

 

 

1.97

%

 

 

 

 

 

 

 

 

 

 

2.39

%

 

 

1.87

%

 

 

 

# of deposit accounts

 

2,428,643

 

2,406,725

 

2,395,827

 

 

.9

 

 

 

1.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Power Liabilities totaled $9.7 billion for the second quarter of 2007, with an average interest rate of 2.40 percent, an increase of $299.8 million, or 3.2 percent, from the second quarter of 2006.  Excluding the Michigan deposits sold in the first quarter of 2007, average Power Liabilities increased $521.3 million, or 5.7 percent, from the second quarter of 2006, primarily driven by increases in Premier Checking, Premier Savings and certificates of deposit, partially offset by declines in other interest-bearing checking and savings.

Average Power Liabilities decreased $13.7 million, or .6 percent (annualized), from the first quarter of 2007.  Excluding the Michigan deposits sold in the first quarter of 2007, average Power Liabilities increased $207.8 million, or 8.7 percent (annualized), from the first quarter of 2007 primarily in interest-bearing checking, savings and certificates of deposit.

8




Non-interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 7

 

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

($ in thousands)

 

2Q

 

1Q

 

2Q

 

2Q07 vs

 

2Q07 vs

 

YTD

 

YTD

 

Percent

 

 

 

2007

 

2007

 

2006

 

1Q07

 

2Q06

 

2007

 

2006

 

Change

 

Compensation and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  employee benefits

 

$

86,707

 

$

88,093

 

$

85,083

 

 

(1.6

)%

 

 

1.9

%

 

$

174,800

 

$

171,251

 

 

2.1

%

 

Occupancy and equipment

 

29,329

 

30,451

 

27,998

 

 

(3.7

)

 

 

4.8

 

 

59,780

 

56,049

 

 

6.7

 

 

Advertising and promotions

 

5,586

 

5,981

 

6,755

 

 

(6.6

)

 

 

(17.3

)

 

11,567

 

12,471

 

 

(7.2

)

 

Other

 

36,531

 

35,315

 

37,725

 

 

3.4

 

 

 

(3.2

)

 

71,846

 

74,907

 

 

(4.1

)

 

  Subtotal

 

158,153

 

159,840

 

157,561

 

 

(1.1

)

 

 

.4

 

 

317,993

 

314,678

 

 

1.1

 

 

Operating lease depreciation

 

4,381

 

4,360

 

3,405

 

 

.5

 

 

 

28.7

 

 

8,741

 

6,568

 

 

33.1

 

 

  Total non-interest expense

 

$

162,534

 

$

164,200

 

$

160,966

 

 

(1.0

)

 

 

1.0

 

 

$

326,734

 

$

321,246

 

 

1.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense totaled $162.5 million for the second quarter of 2007, up $1.6 million, or 1 percent, from $161 million for the second quarter of 2006.

Compensation and employee benefits were well controlled and increased $1.6 million, or 1.9 percent, from the second quarter of 2006.  Increases due to branch expansion and production-related compensation were partially offset by reductions from branches sold, closed branches and other efficiency initiatives.

Occupancy and equipment expenses increased $1.3 million, or 4.8 percent, from the second quarter of 2006 primarily due to the costs associated with branch expansion and relocation.

Advertising and promotions expense was $5.6 million, down $1.2 million, or 17.3 percent, from the second quarter of 2006 primarily due to lower media and promotion costs.

Operating lease depreciation increased $976 thousand, or 28.7 percent, from the second quarter of 2006 primarily due to a $9.9 million, or 15.4 percent, increase in average operating lease balances in TCF’s leasing and equipment finance subsidiaries.

9




Credit Quality

Credit Quality Summary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 8

 

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

($ in thousands)

 

2Q

 

1Q

 

2Q

 

2Q07 vs

 

2Q07 vs

 

YTD

 

YTD

 

Percent

 

 

 

2007

 

2007

 

2006

 

1Q07

 

2Q06

 

2007

 

2006

 

Change

 

Allowance for loan and lease losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

60,483

 

$

58,543

 

$

54,805

 

 

3.3

%

 

 

10.4

%

 

$

58,543

 

$

55,823

 

 

4.9

%

 

  Charge-offs

 

(10,749

)

(9,232

)

(7,939

)

 

16.4

 

 

 

35.4

 

 

(19,981

)

(15,076

)

 

32.5

 

 

  Recoveries

 

3,746

 

6,516

 

3,630

 

 

(42.5

)

 

 

3.2

 

 

10,262

 

8,598

 

 

19.4

 

 

    Net charge-offs

 

(7,003

)

(2,716

)

(4,309

)

 

157.8

 

 

 

62.5

 

 

(9,719

)

(6,478

)

 

50.0

 

 

  Provision for credit losses

 

13,329

 

4,656

 

4,177

 

 

186.3

 

 

 

N.M

.

 

17,985

 

5,328

 

 

N.M.

 

 

Balance at end of period

 

$

66,809

 

$

60,483

 

$

54,673

 

 

10.5

 

 

 

22.2

 

 

$

66,809

 

$

54,673

 

 

22.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance as a percentage of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Period end loans and leases

 

 

.58

%

 

 

.53

%

 

 

.50

%

 

 

 

 

 

 

.58

%

 

 

.50

%

 

 

 

  Net charge-offs (1)

 

 

2.4

X

 

 

5.6

X

 

 

3.2

X

 

 

 

 

 

 

3.4

X

 

 

4.2

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Charge-offs as a Percentage of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Average Loans and Leases (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Consumer home equity

 

 

.30

%

 

 

.22

%

 

 

.09

%

 

 

 

 

 

 

.26

%

 

 

.10

%

 

 

 

  Total consumer

 

 

.37

 

 

 

.20

 

 

 

.18

 

 

 

 

 

 

 

.28

 

 

 

.13

 

 

 

 

  Commercial real estate

 

 

-

 

 

 

.07

 

 

 

-

 

 

 

 

 

 

 

.03

 

 

 

.01

 

 

 

 

  Commercial business

 

 

.03

 

 

 

.11

 

 

 

.14

 

 

 

 

 

 

 

.07

 

 

 

.14

 

 

 

 

  Leasing and equipment finance

 

 

.29

 

 

 

(.18

)

 

 

.42

 

 

 

 

 

 

 

.06

 

 

 

.32

 

 

 

 

  Residential real estate

 

 

.01

 

 

 

.02

 

 

 

.02

 

 

 

 

 

 

 

.02

 

 

 

.02

 

 

 

 

    Total

 

 

.24

 

 

 

.10

 

 

 

.16

 

 

 

 

 

 

 

.17

 

 

 

.12

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Credit Quality Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Delinquencies (30+ days)

 

$

58,687

 

$

46,814

 

$

34,550

 

 

 

 

 

 

 

 

 

 

 

  Delinquencies as a percentage of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    loan and lease portfolio

 

 

.51

%

 

 

.41

%

 

 

.32

%

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Non-accrual loans

 

$

40,391

 

$

55,106

 

$

25,140

 

 

(26.7

)

 

 

60.7

 

 

 

 

 

 

 

 

  Real estate owned

 

44,813

 

27,212

 

25,986

 

 

64.7

 

 

 

72.5

 

 

 

 

 

 

 

 

    Total non-performing assets

 

85,204

 

82,318

 

51,126

 

 

3.5

 

 

 

66.7

 

 

 

 

 

 

 

 

  Non-performing assets as a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    percentage of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Net loans and leases

 

 

.74

%

 

 

.72

%

 

 

.47

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Annualized.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At June 30, 2007, TCF’s allowance for loan and lease losses totaled $66.8 million, or .58 percent of loans and leases, an increase of $6.3 million from $60.5 million, or .53 percent, at March 31, 2007.  The provision for credit losses for the second quarter of 2007 was $13.3 million, up $9.2­ million from the second quarter of 2006, primarily due to higher consumer home equity net charge-offs and the resulting portfolio reserve rate increases and increased reserves for commercial loans, and equipment finance loans and leases.

10




At June 30, 2007, TCF’s over-30-day delinquency rate was .51 percent, up from .41 percent at March 31, 2007 primarily due to one commercial real estate loan which was in the process of renewal subsequent to maturity.  Total non-performing assets were $85.2 million, or .57 percent of total assets, at June 30, 2007, up from $82.3 million, or .55 percent, at March 31, 2007.  The increase in non-performing assets reflected a $17.6 million increase in real estate owned and a $14.8 million decrease in non-accrual loans primarily due to a $13.8 million Minnesota commercial real estate loan which migrated from non-accrual status at March 31, 2007 to real estate owned as of June 30, 2007.

 

Income Taxes

TCF’s income tax expense was $29 million for the second quarter of 2007, or 31.9 percent of pre-tax income, compared with $26.9 million, or 28.6 percent, for the comparable 2006 period.  The second quarter 2007 income tax expense includes a $1.9 million reduction in income tax expense related to favorable developments in uncertain tax positions.  The income tax expense for the second quarter of 2006 includes a $4.1 million reduction in income tax expense related to favorable developments in uncertain tax positions.  Excluding these items, the effective income tax rate was 33.9 percent for the second quarter of 2007 and 33 percent for the second quarter of 2006.

11




Capital

Capital Information

 

 

 

 

 

 

 

Table 9

 

At period end

 

 

 

 

 

 

 

 

 

($ in thousands, except per-share data)

 

2Q

 

 

 

4Q

 

 

 

 

 

2007

 

 

 

2006

 

 

 

Stockholders’ equity

 

$

1,001,032

 

 

 

$

1,033,374

 

 

 

Stockholders’ equity to total assets

 

6.68

%

 

 

7.04

%

 

 

Book value per common share

 

$

7.88

 

 

 

$

7.92

 

 

 

&nbs