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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 22, 2009

 


 

 

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)

 

(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:

 

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 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.

 

The registrant issued a press release dated January 22, 2009, attached to this Form 8-K as Exhibit 99.1, announcing its results of operations for the quarter ended December 31, 2008.

 

Item 9.01    Financial Statements and Exhibits.

 

(d)         Exhibits.

 

Exhibit No.

 Description

 

 

99.1

Earnings Release of TCF Financial Corporation,

dated January 22, 2009

 

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/ 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:    January 22, 2009

 

2

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

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 2008 Earnings Per Share of $1.01
 
2008 YEAR END HIGHLIGHTS

·                  Diluted earnings per common share of $1.01

·                  Net income of $129 million

·                  Net interest margin of 3.91 percent

·                  Average loans and leases increased by $1.2 billion, or 10.2 percent

·                  Allowance for loan and lease losses increased to 1.29 percent

·                  Issued $361.2 million of senior perpetual preferred stock to the U.S. Treasury

·                  Capital ratios exceed stated well capitalized requirements

·                  Declared regular quarterly cash dividend of 25 cents per common share, payable February 27, 2009

 

 Earnings Summary

 

 

 

 

 

 

 

 

 

 

Table 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 ($ in thousands, except per-share data)

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 

 

 

  4Q

 

 

  3Q

 

 

  4Q

 

4Q08 vs

 

4Q08 vs

 

 

YTD

 

 

YTD

 

Percent

 

 

 

 

2008

 

 

2008

 

 

2007

 

3Q08

 

4Q07

 

 

2008

 

 

2007

 

Change

 

 Net income

 

$

27,704

 

$

30,126

 

$

62,817

 

     (8.0)

%

   (55.9)

%

$

128,958

 

$

266,808

 

(51.7)

%

 Net income available to common stockholders

 

 

25,164

 

 

30,126

 

 

62,817

 

   (16.5)

 

   (59.9)

 

 

126,418

 

 

266,808

 

(52.6)

 

 Diluted earnings per common share

 

 

      .20

 

 

      .24

 

 

      .50

 

   (16.7)

 

   (60.0)

 

 

      1.01

 

 

      2.12

 

(52.4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Financial Ratios (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Return on average assets

 

 

    .68 %

 

 

    .73 %

 

 

  1.60 %

 

 

 

 

 

 

    .79 %

 

 

  1.76 %

 

 

 

 Return on average common equity

 

 

  9.00

 

 

11.11

 

 

23.55

 

 

 

 

 

 

11.46

 

 

25.82

 

 

 

 Net interest margin

 

 

  3.84

 

 

  3.97

 

 

  3.83

 

 

 

 

 

 

  3.91

 

 

  3.94

 

 

 

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

 

 

  1.02

 

 

    .82

 

 

    .46

 

 

 

 

 

 

    .78

 

 

    .30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (1) Annualized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-more-

 


 

2

 

WAYZATA, MN, January 22, 2009 – TCF Financial Corporation (“TCF”) (NYSE: TCB) today reported 2008 diluted earnings per common share of $1.01, compared with $2.12 for 2007. Net income was $129 million for 2008, compared with $266.8 million for 2007. TCF recorded $192 million in the provision for credit losses for 2008, as compared with $57 million for 2007. 2007 earnings also included pre-tax gains on sales of branches and real estate totaling $37.9 million, or 19 cents per share.

 

Diluted earnings per common share were 20 cents for the fourth quarter of 2008, compared with 24 cents in the third quarter of 2008 and 50 cents in the fourth quarter of 2007. Net income for the fourth quarter of 2008 was $27.7 million, compared with $30.1 million in the third quarter of 2008 and $62.8 million in the fourth quarter of 2007. TCF recorded $47.1 million in the provision for credit losses for the fourth quarter of 2008, as compared with $52.1 million in the third quarter of 2008 and $20.1 million in the fourth quarter of 2007. See discussion beginning on page 11 regarding the provision for credit losses.

 

Chairman’s Statement

 

“TCF did not engage in the activities that have created so many problems in the financial industry,” said William A. Cooper, Chairman and CEO. “TCF has not made subprime, broker purchased, Option ARM, teaser rate, out of market, low doc or other risky mortgage loans.  TCF kept on its balance sheet all the loans it originated.  TCF has no auto or credit card portfolios or asset backed commercial paper.  We have never owned Fannie Mae or Freddie Mac preferreds, trust preferred securities or bank owned life insurance (BOLI).  TCF does not have any derivative contracts. Higher charge-offs at TCF have been primarily due to the imprudent behavior of our competitors and an ill-advised monetary policy that created the unprecedented rise and fall of the housing markets. TCF remains profitable, solidly capitalized and ready to take advantage of prudent growth opportunities. TCF declared a $0.25 quarterly dividend payable to stockholders on February 27, 2009.  We expect to continue our dividend in future periods subject to maintaining solid profits and strong capital.

 

In accordance with our compensation programs, TCF Executive Management received no bonuses for 2008.  As Chairman and Chief Executive Officer, I receive neither a salary nor a bonus.”

 

-more-

 


 

3

 

 Total Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 

 ($ in thousands)

 

4Q

 

3Q

 

 

  4Q

 

4Q08 vs

 

 

4Q08 vs

 

 

YTD

 

YTD

 

Percent 

 

 

 

2008

 

2008

 

 

2007

 

3Q08  

 

 

4Q07

 

 

2008

 

2007

 

Change 

 

 Net interest income

 

$ 147,117

 

$ 152,165

 

$

139,571

 

 

(3.3

)

%

5.4

%

 

$

593,673

 

$   550,177 

 

7.9 

%

 Fees and other revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Fees and service charges

 

67,448

 

71,783

 

 

  72,331

 

 

(6.0

)

 

(6.8

)

 

 

270,739

 

278,046 

 

(2.6)

 

 Card revenue

 

25,243

 

26,240

 

 

  25,058

 

 

(3.8

)

 

.7

 

 

 

103,082

 

98,880 

 

4.2 

 

 ATM revenue

 

7,688

 

8,720

 

 

    8,306

 

 

(11.8

)

 

(7.4

)

 

 

32,645

 

35,620 

 

(8.4)

 

 Investments and insurance

 

      -

 

3,193

 

 

    2,736

 

 

(100.0

)

 

(100.0

)

 

 

9,405

 

10,318 

 

(8.8)

 

 Total banking fees

 

100,379

 

109,936

 

 

108,431

 

 

(8.7

)

 

(7.4

)

 

 

415,871

 

422,864 

 

(1.7)

 

 Leasing and equipment finance

 

16,298

 

13,006

 

 

  14,841

 

 

25.3

 

 

9.8

 

 

 

55,488

 

59,151 

 

(6.2)

 

 Other

 

130

 

103

 

 

    1,573

 

 

26.2

 

 

(91.7

)

 

 

2,702

 

8,270 

 

(67.3)

 

 Total fees and other revenue

 

116,807

 

123,045

 

 

124,845

 

 

(5.1

)

 

(6.4

)

 

 

474,061

 

490,285 

 

(3.3)

 

 Gains on securities

 

8,167

 

498

 

 

  11,261

 

 

N.M.

 

 

(27.5

)

 

 

16,066

 

13,278 

 

21.0 

 

 Visa share redemption

 

      -

 

    -

 

 

-  

 

 

     -

 

 

    -

 

 

 

8,308

 

-       

 

100.0 

 

 Gains on sales of branches and real estate

 

      -

 

    -

 

 

    2,752

 

 

     -

 

 

(100.0

)

 

 

    -

 

37,894 

 

(100.0)

 

Total non-interest income

 

124,974

 

123,543

 

 

138,858

 

 

1.2

 

 

(10.0

)

 

 

498,435

 

541,457 

 

(7.9)

 

Total revenue

 

$ 272,091

 

$ 275,708

 

$

278,429

 

 

(1.3

)

 

(2.3

)

 

$

1,092,108

 

$ 1,091,634 

 

      -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Net interest margin(1)

 

3.84

 

%

3.97

 

%

 

     3.83

%

 

 

 

 

 

 

 

 

3.91

 

%

 

3.94  

%

 

 

 Fees and other revenue as a % of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

42.93

 

 

44.63

 

 

 

   44.84

 

 

 

 

 

 

 

 

43.41

 

 

 

44.91  

 

 

 

Average assets (1)

 

2.85

 

 

3.00

 

 

 

     3.18

 

 

 

 

 

 

 

 

2.90

 

 

 

3.24  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 N.M.=Not Meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (1) Annualized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income

 

TCF’s net interest income in 2008 was $593.7 million, up $43.5 million, or 7.9 percent, from 2007. Net interest margin in 2008 was 3.91 percent, compared with 3.94 percent for 2007. The increase in net interest income from 2007 was primarily attributable to a $1.2 billion, or 8.5 percent, increase in average interest-earning assets, partially offset by a 3 basis point reduction in net interest margin.

 

Net interest income for the fourth quarter of 2008 increased $7.5 million, or 5.4 percent, compared with the fourth quarter of 2007. Net interest margin in the fourth quarter of 2008 was 3.84 percent, compared with 3.83 percent last year and 3.97 percent in the third quarter of 2008.

 

The decrease in net interest margin for 2008 from 2007 is primarily due to funding the growth in interest-earning assets with higher cost deposits and borrowings, partially offset by declines in rates on

 

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4

 

deposits exceeding declines in yields on interest-earning assets. The decrease in net interest margin in the fourth quarter of 2008 from the third quarter of 2008 was primarily due to increased rates paid on deposits due to competition and declines in yields on Power Assets, partially offset by lower rates paid on borrowings.

 

Non-interest Income

 

Total fees and other revenue was $474.1 million for 2008, down $16.2 million, or 3.3 percent, from 2007. Banking fees and service charges were $270.7 million for 2008, down $7.3 million, or 2.6 percent, from 2007 primarily due to lower activity in deposit service fees. Card revenues totaled $103.1 million for 2008, up $4.2 million, or 4.2 percent, from 2007 primarily due to increased transactions per active card. ATM revenue was $32.6 million, down $3 million, or 8.4 percent, from 2007 due to continued declines in fees charged to TCF customers for use of non-TCF ATM machines due to growth in TCF’s no fee checking products. Leasing and equipment finance revenues were $55.5 million for 2008, down $3.7 million, or 6.2 percent, from 2007, primarily due to lower operating lease revenue and sales-type lease revenue. Other revenues were $2.7 million for 2008, down $5.6 million from 2007, due in part to decreased gains on sales of education loans as TCF exited that business in 2008. Investments and insurance revenues were $9.4 million, down $913 thousand from 2007 as TCF stopped selling investment and insurance products in the branches during the fourth quarter of 2008. No gains on sales of branches and real estate were recorded in 2008, compared to gains of $37.9 million in 2007. Gains on securities in 2008 were $16.1 million primarily due to sales of $1.5 billion of mortgage-backed securities compared with gains of $13.3 million on sales of $1.2 billion of mortgage backed securities in 2007.

 

Total fees and other revenue in the fourth quarter of 2008 was $116.8 million, down $8 million, or 6.4 percent, from the fourth quarter of 2007 and down $6.2 million, or 5.1 percent, from the third quarter of 2008. Banking fees and service charges were $67.4 million, down $4.9 million, or 6.8 percent, from the fourth quarter of 2007 and $4.3 million, or 6 percent, from the third quarter of 2008 primarily due to lower activity in deposit service fees. Card revenues totaled $25.2 million for the fourth quarter of 2008, up $185

 

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5

 

thousand, or .7 percent, over the same period in 2007 and down $997 thousand, or 3.8 percent, from the third quarter of 2008. The decline in card revenue from the third quarter of 2008 was primarily due to lower average transaction amounts and volumes. ATM revenue was $7.7 million, down $618 thousand, or 7.4 percent, from the fourth quarter of 2007 and $1 million, or 11.8 percent from the third quarter of 2008. Investments and insurance revenues declined $2.7 million from the fourth quarter of 2007 and $3.2 million from the third quarter of 2008 as TCF stopped selling investment and insurance products in the branches during the fourth quarter of 2008.

 

Branches

 

 Number of Branches

Table 3

 

 At period end

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

New

 

 

 

 

Total

 

New

 

 

 

Branches

 

Branches(1)

 

 

 

 

Branches

 

Branches(1)

 

 Illinois

 

206

 

  34

 

 

Traditional

 

197

 

  76

 

 Minnesota

 

111

 

  20

 

 

Supermarket

 

236

 

  29

 

 Michigan

 

  56

 

  20

 

 

Campus

 

  15

 

  10

 

 Colorado

 

  36

 

  29

 

 

 

 

448

 

115

 

 Wisconsin

 

  27

 

    4

 

 

 

 

 

 

 

 

 Arizona

 

    7

 

    7

 

 

 

 

 

 

 

 

 Indiana

 

    5

 

    1

 

 

 

 

 

 

 

 

 Total Branches

 

448

 

115

 

 

 

 

 

 

 

 

 

 (1) New branches opened since January 1, 2003.

 

TCF opened 11 branches during 2008, including five traditional branches and six supermarket branches, and relocated three traditional branches. TCF also closed and consolidated two traditional branches and 14 supermarket branches into nearby branches to improve operating efficiencies. Since January 1, 2003, TCF has opened 115 new branches, representing 25.7 percent of TCF’s 448 total branches. During the fourth quarter of 2008, TCF opened one traditional branch and two supermarket branches, and relocated three traditional branches. In 2009, TCF plans to open one traditional branch and two supermarket branches, and remodel 28 supermarket branches.

 

-more-


 

6

 

Power Assets®

 

Average Power Assets

 

 

 

 

 

 

 

 

 

 

 

Table 4

 

 

 

 

 

 

 

 

 

Percentage Change

 

 

 

 

 

 

 

($ in thousands)

  

4Q
2008

  

3Q
2008

  

4Q
2007

  

4Q08vs
3Q08

  

4Q08vs
4Q07

  

YTD
2008

  

YTD
2007

  

YTD
%

 

Loans and leases(1):

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

   

Consumer home equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First mortgage lien

 

$  4,403,503

 

$  4,396,754

 

$  4,112,086

 

.2

%

7.1

%

$  4,347,025

 

$  3,953,442

 

10.0

%

Junior lien

 

2,423,873

 

2,434,392

 

2,299,461

 

(.4

)

5.4

 

2,411,502

 

2,190,988

 

10.1

 

Total consumer home equity

 

6,827,376

 

6,831,146

 

6,411,547

 

(.1

)

6.5

 

6,758,527

 

6,144,430

 

10.0

 

Consumer other

 

43,619

 

45,939

 

45,294

 

(5.1

)

(3.7

)

45,013

 

43,589

 

3.3

 

Total consumer

 

6,870,995

 

6,877,085

 

6,456,841

 

(.1

)

6.4

 

6,803,540

 

6,188,019

 

9.9

 

Commercial real estate

 

2,895,935

 

2,776,830

 

2,445,012

 

4.3

 

18.4

 

2,724,507

 

2,386,022

 

14.2

 

Commercial business

 

522,636

 

544,826

 

574,881

 

(4.1

)

(9.1

)

535,147

 

563,218

 

(5.0

)

Total commercial

 

3,418,571

 

3,321,656

 

3,019,893

 

2.9

 

13.2

 

3,259,654

 

2,949,240

 

10.5

 

Leasing and equipment finance

 

2,389,225

 

2,300,429

 

2,005,889

 

3.9

 

19.1

 

2,265,391

 

1,915,790

 

18.2

 

Inventory finance

 

158

 

-

 

-

 

N.M.

 

N.M.

 

40

 

-

 

N.M.

 

Total Power Assets

 

  $12,678,949

 

  $12,499,170

 

  $11,482,623

 

1.4

 

10.4

 

  $12,328,625

 

  $11,053,049

 

11.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

TCF’s average Power Assets grew $1.3 billion, or 11.5 percent, in 2008 from 2007. TCF’s average consumer loan balances increased $615.5 million, or 9.9 percent, average leasing and equipment finance balances increased $349.6 million, or 18.2 percent, and average commercial loan balances increased $310.4 million, or 10.5 percent.

 

Average Power Assets increased $179.8 million, or 5.8 percent, annualized, from the third quarter of 2008. Management expects future growth to increase based on the issuance of senior perpetual preferred stock to the United States Department of the Treasury and trust preferred securities. TCF’s new Inventory Finance business generated $4.4 million in new loans during the fourth quarter of 2008.

 

The increase in average consumer home equity loans over 2007 was primarily due to a $360 million increase in fixed-rate consumer home equity loans, along with a $254.1 million increase in variable-rate consumer home equity loans. At December 31, 2008, 64.5 percent of the consumer home equity portfolio was secured by first liens.

 

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7

 

Power Liabilities®

 

Average Power Liabilities

 

 

 

 

 

 

 

 

 

 

 

Table 5

 

 

 

 

 

 

 

 

 

Percentage Change

 

 

 

 

 

 

 

($ in thousands)

  

4Q
2008

  

3Q
2008

  

4Q
2007

  

4Q08vs
3Q08

  

4Q08vs
4Q07

  

YTD
2008

  

YTD
2007

  

Percent
Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

$1,345,832

 

$1,409,855

 

$1,348,202

 

(4.5

)%

(.2

)%

$1,320,951

 

$1,444,125

 

(8.5

)%

Small business

 

593,626

 

597,894

 

600,491

 

(.7

)

(1.1

)

583,611

 

594,979

 

(1.9

)

Commercial and custodial

 

234,045

 

253,900

 

201,161

 

(7.8

)

16.3

 

231,903

 

199,432

 

16.3

 

Total non-interest bearing

 

2,173,503

 

2,261,649

 

2,149,854

 

(3.9

)

1.1

 

2,136,465

 

2,238,536

 

(4.6

)

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premier checking

 

850,059

 

933,189

 

1,026,408

 

(8.9

)

(17.2

)

945,097

 

1,054,542

 

(10.4

)

Other checking

 

904,052

 

904,351

 

816,512

 

-

 

10.7

 

885,264

 

824,791

 

7.3

 

Subtotal

 

1,754,111

 

1,837,540

 

1,842,920

 

(4.5

)

(4.8

)

1,830,361

 

1,879,333

 

(2.6

)

Premier savings

 

1,397,516

 

1,403,323

 

1,353,638

 

(.4

)

3.2

 

1,448,123

 

1,184,756

 

22.2

 

Other savings

 

1,450,322

 

1,388,236

 

1,229,808

 

4.5

 

17.9

 

1,451,698

 

1,279,577

 

13.5

 

Subtotal

 

2,847,838

 

2,791,559

 

2,583,446

 

2.0

 

10.2

 

2,899,821

 

2,464,333

 

17.7

 

Money market

 

625,198

 

629,905

 

598,483

 

(.7

)

4.5

 

613,543

 

604,767

 

1.5

 

Subtotal

 

5,227,147

 

5,259,004

 

5,024,849

 

(.6

)

4.0

 

5,343,725

 

4,948,433

 

8.0

 

Certificates of deposit

 

2,448,815

 

2,469,327

 

2,307,411

 

(.8

)

6.1

 

2,472,357

 

2,461,055

 

.5

 

Total interest-bearing

 

7,675,962

 

7,728,331

 

7,332,260

 

(.7

)

4.7

 

7,816,082

 

7,409,488

 

5.5

 

Power Liabilities

 

  $9,849,465

 

  $9,989,980

 

  $9,482,114

 

(1.4

)

3.9

 

  $9,952,547

 

  $9,648,024

 

3.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average rate on deposits

 

1.51% 

 

1.34% 

 

2.29% 

 

 

 

 

 

1.58% 

 

2.39% 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Power Liabilities totaled $10 billion for 2008,  an increase of $304.5 million, or 3.2 percent, from 2007. The increase was primarily driven by increases in interest bearing savings balances, partially offset by decreases in checking balances.

 

Average Power Liabilities totaled $9.8 billion for the fourth quarter of 2008, down $140.5 million, or 1.4 percent, from the third quarter of 2008, primarily due to declines in non-interest bearing deposits and interest bearing checking, partially offset by increases in interest bearing savings. The average rate on deposits was 1.51 percent in the fourth quarter of 2008, up 17 basis points from the third quarter of 2008, as a result of decreases in the balances of non-interest bearing deposits and increases in the balances of higher cost deposits as well as rate increases made on certain deposit products in an attempt to increase deposit growth.

 

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8

 

Non-interest Expense

 

Non-interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 6

 

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

(in thousands)

  

4Q 2008

  

3Q 2008

  

4Q 2007

  

4Q08 vs
3Q08

   

4Q08 vs
4Q07

   

2008

  

2007

  

Percent
Change

 

Compensation and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

employee benefits

 

$  83,323

 

$  84,895

 

$  86,555

 

(1.9

)%

(3.7

)%

$341,203

 

$346,468

 

(1.5

)%

Occupancy and equipment

 

32,503

 

31,832

 

30,818

 

2.1

 

5.5

 

127,953

 

120,824

 

5.9

 

Deposit account premiums

 

5,659

 

7,292

 

572

 

(22.4

)

N.M.

 

16,888

 

4,849

 

N.M.

 

Advertising and promotions

 

4,644

 

5,017

 

4,060

 

(7.4

)

14.4

 

19,150

 

16,830

 

13.8

 

Operating lease depreciation

 

4,269

 

4,215

 

4,521

 

1.3

 

(5.6

)

17,458

 

17,588

 

(0.7

)

Other

 

49,412

 

44,337

 

38,391

 

11.4

 

28.7

 

175,517

 

147,869

 

18.7

 

Subtotal

 

179,810

 

177,588

 

164,917

 

1.3

 

9.0

 

698,169

 

654,428

 

6.7

 

Visa indemnification

 

-

 

-

 

7,696

 

-

 

(100.0

)

(3,766

)

7,696

 

(148.9

)

Total non-interest expense

 

  $179,810

 

  $177,588

 

  $172,613

 

1.3

 

4.2

 

  $694,403

 

  $662,124

 

4.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense totaled $694.4 million for 2008, up $32.3 million, or 4.9 percent, from $662.1 million for 2007. Compensation and employee benefits were well controlled and decreased $5.3 million, or 1.5 percent, from 2007. The decrease in compensation and benefits in 2008 from 2007 was primarily due to intentional headcount reductions and decreased performance-based compensation, partially offset by expenses from branch expansion and the new inventory finance business. Occupancy and equipment expenses increased $7.1 million, or 5.9 percent, from 2007, primarily due to the costs associated with branch expansion and increased real estate taxes. Deposit account premium expenses increased $12 million from 2007 due to new marketing campaigns which resulted in increased checking account production. Other expense increased $27.6 million, or 18.7 percent, primarily due to a $13.2 million increase in foreclosed real estate expense due to an increased number of foreclosed properties and related property taxes and real estate disposition losses, an $8.6 million increase in severance and separation costs related to the investments and insurance business, certain lender reductions and various other headcount reductions throughout the company, and a $1.8 million increase in deposit insurance premiums.

 

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9

 

Non-interest expense totaled $179.8 million for the 2008 fourth quarter, up $7.2 million, or 4.2 percent, from the fourth quarter of 2007 and up $2.2 million, or 1.3 percent, from the third quarter of 2008. Compensation and employee benefits were well controlled and decreased $3.2 million, or 3.7 percent, from the fourth quarter of 2007 and decreased $1.6 million, or 1.9 percent, from the third quarter of 2008. Deposit account premium expenses were $5.7 million for the 2008 fourth quarter, up $5.1 million from the fourth quarter of 2007 due to new marketing campaigns which resulted in increased checking account production. Other operating expense increased $11 million from the fourth quarter of 2007 and increased $5.1 million from the third quarter of 2008 primarily due to higher foreclosed real estate expense, increased deposit insurance premiums, and a $3.7 million increase in severance and separation costs.

 

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10

 

Credit Quality

 

 Credit Quality Summary

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 7

 

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 (in thousands)

    

4Q
2008

    

3Q
2008

    

4Q
2007

    

4Q08 vs
3Q08

    

4Q08vs
4Q07

    

YTD
2008

    

YTD
2007

    

%
Chg

 

 Allowance for loan and lease losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Balance at beginning of period

 

$

158,978

 

$

133,637

 

$

74,632

 

19.0

%

113.0

%

$

80,942

 

$

58,543

 

38.3

%

Charge-offs

 

(37,100

)

(29,976

)

(17,771

)

23.8

 

108.8

 

(114,800

)

(52,421

)

   119.0

 

Recoveries

 

3,514

 

3,212

 

3,957

 

9.4

 

(11.2

)

14,255

 

17,828

 

(20.0

)

Net charge-offs

 

(33,586

)

(26,764

)

(13,814

)

25.5

 

143.1

 

(100,545

)

(34,593

)

190.7

 

Provision for credit losses

 

47,050

 

52,105

 

20,124

 

(9.7

)

133.8

 

192,045

 

56,992

 

N.M.

 

 Balance at end of period

 

$

172,442

 

$

158,978

 

$

80,942

 

8.5

 

113.0

 

$

172,442

 

$

80,942

 

113.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Allowance as a percentage of
period end loans and leases

 

1.29

%

1.21

%

.66

%

 

 

 

 

1.29

%

.66

%

 

 

 Ratio of allowance to net
charge-offs
(1)

 

1.3

X

1.5

X

1.5

X

 

 

 

 

1.7

X

2.3

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Net Charge-offs as a Percentage of Average Loans and Leases(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer home equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First mortgage lien

 

.87

%

.77

%

.30

%

 

 

 

 

.66

%

.24

%

 

 

Junior lien

 

1.76

 

1.56

 

.62

 

 

 

 

 

1.34

 

.50

 

 

 

Total home equity

 

1.19

 

1.05

 

.42

 

 

 

 

 

.90

 

.33

 

 

 

Total consumer

 

1.37

 

1.23

 

.56

 

 

 

 

 

1.04

 

.43

 

 

 

Commercial real estate

 

.41

 

.39

 

.33

 

 

 

 

 

.44

 

.10

 

 

 

Commercial business

 

2.01

 

.05

 

.30

 

 

 

 

 

1.05

 

.22

 

 

 

Leasing and equipment finance

 

.64

 

.42

 

.45

 

 

 

 

 

.50

 

.20

 

 

 

Inventory finance

 

-

 

-

 

-

 

 

 

 

 

-

 

-

 

 

 

Residential real estate

 

.52

 

.31

 

.05

 

 

 

 

 

.25

 

.04

 

 

 

Total

 

1.02

 

.82

 

.46

 

 

 

 

 

.78

 

.30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Other Credit Quality Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Delinquencies(2)  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30+days

 

$

149,284

 

$

142,125

 

$

82,577

 

5.0

 

80.8

 

 

 

 

 

 

 

90+days

 

$

37,619

 

$

34,808

 

$

15,384

 

8.1

 

144.5

 

 

 

 

 

 

 

Delinquencies as a percentage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

of loan and lease portfolio(2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30+days

 

1.13

%

1.10

%

.67

%

 

 

 

 

 

 

 

 

 

 

90+days

 

.28

%

.27

%

.12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Non-accrual loans and leases

 

$

172,518

 

$

145,890

 

$

59,854

 

18.3

 

188.2

 

 

 

 

 

 

 

 Real estate owned

 

61,665

 

54,179

 

45,765

 

13.8

 

34.7

 

 

 

 

 

 

 

Total non-performing assets

 

$

234,183

 

$

200,069

 

$

105,619

 

17.1

 

121.7

 

 

 

 

 

 

 

 Non-performing assets as a
percentage of net loans
and leases

 

1.78% 

 

1.55% 

 

.86% 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 N.M. = Not Meaningful

 

 (1) Annualized

 

 (2) Excludes non-accrual loans and leases

 

 

 

 

-more-

 


 

11

 

At December 31, 2008, TCF’s allowance for loan and lease losses totaled $172.4 million, or 1.29 percent of loans and leases, compared with $80.9 million, or .66 percent, at December 31, 2007 and $159 million, or 1.21 percent, at September 30, 2008. The provision for credit losses for 2008 was $192 million, up from $57 million in 2007, primarily due to higher consumer home equity net charge-offs and the resulting portfolio reserve rate increases, higher net charge-offs and reserves for certain commercial loans, primarily in Michigan, and increased leasing and equipment finance net charge-offs.

 

Consumer home equity net charge-offs for 2008 were $61.1 million, an increase of $40.8 million from 2007. The higher net charge-offs were due to the depressed residential real estate market conditions, primarily in Minnesota and Michigan. Commercial net charge-offs for 2008 were $17.5 million, an increase of $13.8 million from 2007. Leasing and equipment finance net charge-offs for 2008 were $11.4 million, up $7.5 million from 2007 which included a one-time recovery of $2.1 million. During 2008, $1.1 billion of new home equity loans were originated. Of these loans, the net charge-offs totaled $273 thousand, or .03 percent.

 

The provision for credit losses was $47.1 million in the fourth quarter of 2008, up from $20.1 million in the fourth quarter of 2007, primarily due to higher consumer home equity net charge-offs and the resulting portfolio reserve rate increases. The provision for credit losses was down $5.1 million from the third quarter of 2008 mostly due to lower provisions for certain commercial loans and less portfolio reserve rate increases for consumer home equity loans. Net loan and lease charge-offs during the fourth quarter of 2008 were $33.6 million, or 1.02 percent of average loans and leases, up from $13.8 million, or .46 percent, in the same period of 2007, and up from $26.8 million, or .82 percent, in the third quarter of 2008.

 

At December 31, 2008, TCF’s over-30-day delinquency rate was 1.13 percent, up from 1.10 percent at September 30, 2008. TCF’s over-90-day delinquency rate was .28 percent, up slightly from .27 percent at September 30, 2008. Total non-performing assets were $234.2 million, or 1.40 percent of total assets, at December 31, 2008, up from $200.1 million, or 1.21 percent of total assets, at September 30, 2008. The increase in non-performing assets from September 30, 2008 was primarily due to a $16.7 million increase in

 

-more-

 


 

12

 

consumer home equity non-accrual loans, a $6.3 million increase in commercial non-accrual loans, and a $7.5 million increase in real estate owned.

 

Income Taxes

 

TCF’s income tax expense was $76.7 million for 2008, or 37.3 percent of pre-tax income, compared with $105.7 million, or 28.4 percent, for 2007. Income tax expense for 2008 included a $2.2 million increase in income tax expense and a $2.8 million increase in deferred income taxes related to changes in state tax laws, primarily in Minnesota, and a $1.5 million increase in income tax expense for distributions from the company’s deferred compensation plans. Income tax expense for 2007 includes an $8.5 million reduction related to a favorable settlement with the IRS of a tax issue from a prior year and $9.9 million of other reductions primarily resulting from changes in uncertain tax positions and state tax laws. Excluding these items, the effective income tax rate was 34.2 percent for 2008 and 33.9 percent for 2007.

 

TCF’s income tax expense was $17.5 million for the fourth quarter of 2008, or 38.8 percent of pre-tax income, compared with $22.9 million, or 26.7 percent, for the comparable 2007 period and $15.9 million, or 34.5 percent, for the third quarter of 2008. The higher effective income tax rate for the fourth quarter of 2008 as compared with the third quarter of 2008, was primarily due to a $1.5 million charge recorded to income tax expense for distributions from the company’s deferred compensation plans.  The fourth quarter of 2007 also included $5.4 million of reductions in income tax expense for uncertain tax positions. Excluding these items, the effective income tax rates for the fourth quarters of 2008 and 2007 were 35.5 percent and 33 percent, respectively.

 

-more-


 

13

 

Capital

 

Capital Information

 

 

 

 

 

 

 

Table 8

 

At period end

    

 

    

 

    

 

    

 

    

($ in thousands, except per-share data)

 

4Q

2008

    

4Q

2007

    

Stockholders’ equity

 

$1,493,776

 

 

 

$1,099,012

 

 

 

Stockholders’ equity to total assets

 

8.92

%

 

 

6.88

%

 

 

Book value per common share

 

$         8.99

 

 

 

$         8.68

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk-based capital

 

 

 

 

 

 

 

 

 

Tier 1

 

$1,461,973

 

11.79

%

$   964,467

 

8.28

%

Total

 

1,817,225

 

14.65

 

1,245,808

 

10.70

 

Total stated “well-capitalized” requirement

 

1,240,147

 

10.00

 

1,164,829

 

10.00

 

Excess over stated “well-capitalized” requirement

 

577,078

 

4.65

 

80,979

 

.70

 

 

TCF’s total risk-based capital of $1.8 billion or 14.65 percent of risk-weighted assets is $577.1 million in excess of the “well-capitalized” requirement. During the fourth quarter of 2008, TCF received proceeds of $361.2 million from the issuance of 361,172 shares of senior perpetual preferred stock to the United States Department of the Treasury. In connection with the issuance of preferred stock, TCF also issued the U.S. Treasury a warrant for 3.2 million shares of TCF stock at an exercise price of $16.93. TCF will begin making the required 5 percent quarterly dividend payments on the preferred stock in February 2009.  “TCF continues to be solidly capitalized and maintains adequate liquidity to facilitate lending through our strong retail deposit franchise. With the increased capital as a result of participating in this program, we are expanding our lending activities and expect strong loan and lease production in 2009,” said William A. Cooper. Since September 30, 2008, TCF’s average loans and leases have increased $165.2 million. TCF has originated $490.4 million of loans and leases since receiving the proceeds from the United States Department of the Treasury on November 14, 2008 and has completed 762 loan modifications and extensions on $117.1 million of consumer home equity loans to help these customers avoid home foreclosures.

 

On January 20, 2009, the Board of Directors of TCF declared its regular quarterly cash dividend of 25 cents per common share, payable on February 27, 2009 to stockholders of record at the close of business on January 30, 2009.

 

-more-

 


 

14

 

Website Information

 

A live webcast of TCF’s conference call to discuss 2008 earnings will be hosted at TCF’s website, www.tcfbank.com, on January 22, 2009 at 10:00 a.m., CT. Additionally, the webcast is 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, quarterly reports, investor presentations and SEC filings.

 

 

TCF is a Wayzata, Minnesota-based national financial holding company with $16.7 billion in total assets. TCF has 448 banking offices in Minnesota, Illinois, Michigan, Colorado, Wisconsin, Indiana and Arizona, providing retail and commercial banking services. TCF also conducts commercial leasing and equipment finance business in all 50 states and commercial inventory finance business in the U.S. and Canada. For more information about TCF, please visit www.tcfbank.com.

 

 

 

-more-

 


 

15

 

Forward-looking Information

 

This earnings release and other reports issued by the Company, including reports filed with the SEC, may contain “forward-looking” statements that deal with future results, plans or performance. In addition, TCF’s management may make such statements orally to the media, or to securities analysts, investors or others. Forward-looking statements deal with matters that do not relate strictly to historical facts. TCF’s future results may differ materially from historical performance and forward-looking statements about TCF’s expected financial results or other plans and are subject to a number of risks and uncertainties. These include, but are not limited to, continued or deepening deterioration in banking industry conditions; limitations on TCF’s ability to pay dividends at current levels or to increase dividends in the future because of financial performance deterioration, regulatory restrictions, or limitations imposed as a result of TCF’s participation in the U.S. Treasury Department’s Capital Purchase Program (“CPP”); increased deposit insurance premiums or other costs related to deteriorating conditions in the banking industry and the economic impact on banks of the Emergency Economic Stabilization Act (“EESA”) or other related legislative and regulatory developments; the imposition of requirements with an adverse financial impact relating to TCF’s lending, loan collection and other business activities as a result of the EESA, TCF’s participation in the CPP, or other legislative or regulatory developments; possible legislative changes and adverse economic, business and competitive developments such as shrinking interest margins, deposit outflows, an inability to increase the number of deposit accounts and the possibility that deposit account losses (fraudulent checks, etc.) may increase; impact of legislative, regulatory or other changes affecting customer account charges and fee income; reduced demand for financial services and loan and lease products; adverse developments affecting TCF’s supermarket banking relationships or any of the supermarket chains in which TCF maintains supermarket branches; changes in accounting standards or interpretations of existing standards; monetary, fiscal or tax policies of the federal or state governments; including adoption of state legislation that would increase state taxes; adverse findings in tax audits or regulatory examinations and resulting enforcement actions; changes in credit and other risks posed by TCF’s loan, lease, investment, and securities available for sale portfolios, including continuing declines in commercial or residential real estate values or changes in allowance for loan and lease losses methodology dictated by new market conditions or regulatory requirements; lack of or inadequate insurance coverage for claims against TCF; technological, computer related or operational difficulties or loss or theft of information; adverse changes in securities markets directly or indirectly affecting TCF’s ability to sell assets or to fund its operations; results of litigation, including potential class action litigation concerning TCF’s lending or deposit activities or employment practices and possible increases in indemnification obligations for certain litigation against Visa U.S.A. (“covered litigation”) and potential reductions in card revenues resulting from other litigation against Visa; heightened regulatory practices, requirements or expectations, including but not limited to requirements related to the Bank Secrecy Act and anti-money laundering compliance activity; or other significant uncertainties. Investors should consult TCF’s Annual Report on Form 10-K, and Forms 10-Q and 8-K for additional important information about the Company.

 

-more-

 


 

16

 

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per-share data)

(Unaudited)

 

 

 

Three Months Ended

 

 

 

 

 

December 31,

 

Change

 

 

 

2008

 

2007

 

$

 

%

 

Interest income:

    

 

    

 

    

 

    

 

    

Loans and leases

 

$

211,322

 

$

215,082

 

$

(3,760)

 

(1.7)

 

Securities available for sale

 

25,232

 

29,372

 

(4,140)

 

(14.1)

 

Education loans held for sale

 

24

 

3,153

 

(3,129)

 

(99.2)

 

Investments and other

 

1,224

 

1,595

 

(371)

 

(23.3)

 

Total interest income

 

237,802

 

249,202

 

(11,400)

 

(4.6)

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

 

37,362

 

54,788

 

(17,426)

 

(31.8)

 

Borrowings

 

53,323

 

54,843

 

(1,520)

 

(2.8)

 

Total interest expense

 

90,685

 

109,631

 

(18,946)

 

(17.3)

 

Net interest income

 

147,117

 

139,571

 

7,546

 

5.4

 

Provision for credit losses

 

47,050

 

20,124

 

26,926

 

133.8

 

Net interest income after provision for

 

 

 

 

 

 

 

 

 

credit losses

 

100,067

 

119,447

 

(19,380)

 

(16.2)

 

Non-interest income:

 

 

 

 

 

 

 

 

 

Fees and service charges

 

67,448

 

72,331

 

(4,883)

 

(6.8)

 

Card revenue

 

25,243

 

25,058

 

185

 

.7

 

ATM revenue

 

7,688

 

8,306

 

(618)

 

(7.4)

 

Investments and insurance revenue

 

-

 

2,736

 

(2,736)

 

(100.0)

 

Subtotal

 

100,379

 

108,431

 

(8,052)

 

(7.4)

 

Leasing and equipment finance

 

16,298

 

14,841

 

1,457

 

9.8

 

Other

 

130

 

1,573

 

(1,443)

 

(91.7)

 

Fees and other revenue

 

116,807

 

124,845

 

(8,038)

 

(6.4)

 

Gains on securities

 

8,167

 

11,261

 

(3,094)

 

(27.5)

 

Gains on sales of branches and real estate

 

-

 

2,752

 

(2,752)

 

(100.0)

 

Total non-interest income

 

124,974

 

138,858

 

(13,884)

 

(10.0)

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

83,323

 

86,555

 

(3,232)

 

(3.7)

 

Occupancy and equipment

 

32,503

 

30,818

 

1,685

 

5.5

 

Deposit account premiums

 

5,659

 

572

 

5,087

 

N.M.

 

Advertising and promotions

 

4,644

 

4,060

 

584

 

14.4

 

Operating lease depreciation

 

4,269

 

4,521

 

(252)

 

(5.6)

 

Other

 

49,412

 

46,087

 

3,325

 

7.2

 

Total non-interest expense

 

179,810

 

172,613

 

7,197

 

4.2

 

Income before income tax expense

 

45,231

 

85,692

 

(40,461)

 

(47.2)

 

Income tax expense

 

17,527

 

22,875

 

(5,348)

 

(23.4)

 

Net income

 

27,704

 

62,817

 

(35,113)

 

(55.9)

 

Preferred stock dividends

 

2,540

 

-

 

2,540

 

N.M.

 

Net income available to common stockholders

 

$

25,164

 

$

62,817

 

$

(37,653)

 

(59.9)

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

.20

 

$

.51

 

$

(.31)

 

(60.8)

 

Diluted

 

.20

 

.50

 

(.30)

 

(60.0)

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

$

.2500

 

$

.2425

 

$

.0075

 

3.1

 

 

 

 

 

 

 

 

 

 

 

Average common and common equivalent

 

 

 

 

 

 

 

 

 

shares outstanding (in thousands):

 

 

 

 

 

 

 

 

 

Basic

 

125,345

 

124,058

 

1,287

 

1.0

 

Diluted

 

125,733

 

124,927

 

806

 

.6

 

 

N.M.  Not meaningful

 

-more-

 

 


 

17

 

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per-share data)

(Unaudited)

 

 

 

Year Ended

 

 

 

 

 

 

 

 

December 31,

 

Change

 

 

2008

 

2007

 

$

 

%

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

Loans and leases

 

$

842,157

 

 

$

836,953

 

 

$

5,204

 

 

.6

 

Securities available for sale

 

110,946

 

 

109,581

 

 

1,365

 

 

1.2

 

Education loans held for sale

 

5,355

 

 

13,252

 

 

(7,897

)

 

(59.6

)

Investments and other

 

5,937

 

 

8,237

 

 

(2,300

)

 

(27.9

)

Total interest income

 

964,395

 

 

968,023

 

 

(3,628

)

 

(.4

)

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

156,774

 

 

230,625

 

 

(73,851

)

 

(32.0

)

Borrowings

 

213,948

 

 

187,221

 

 

26,727

 

 

14.3

 

Total interest expense

 

370,722

 

 

417,846

 

 

(47,124

)

 

(11.3

)

Net interest income

 

593,673

 

 

550,177

 

 

43,496

 

 

7.9

 

Provision for credit losses

 

192,045

 

 

56,992

 

 

135,053

 

 

N.M.

 

Net interest income after provision for credit losses

 

401,628

 

 

493,185

 

 

(91,557

)

 

(18.6

)

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges

 

270,739

 

 

278,046

 

 

(7,307

)

 

(2.6

)

Card revenue

 

103,082

 

 

98,880

 

 

4,202

 

 

4.2

 

ATM revenue

 

32,645

 

 

35,620

 

 

(2,975

)

 

(8.4

)

Investments and insurance revenue

 

9,405

 

 

10,318

 

 

(913

)

 

(8.8

)

Subtotal

 

415,871

 

 

422,864

 

 

(6,993

)

 

(1.7

)

Leasing and equipment finance

 

55,488

 

 

59,151

 

 

(3,663

)