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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 21, 2010

 


 

 

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 21, 2010, attached to this Form 8-K as Exhibit 99.1, announcing its results of operations for the quarter ended December 31, 2009.

 

Item 9.01    Financial Statements and Exhibits.

 

(d)         Exhibits.

 

Exhibit No.

Description

 

 

99.1

Earnings Release of TCF Financial Corporation,
dated January 21, 2010

 

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 21, 2010

 

2

 

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

 

NEWS RELEASE

Exhibit 99.1

 

 

 

 

 

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 59th Consecutive Quarter of Net Income – Earns $19.5 Million
 

FOURTH QUARTER HIGHLIGHTS

·                  Diluted earnings per common share of 15 cents

·                  Net income of $19.5 million

·                  Total revenue increased by $40.7 million, or 15 percent

·                  Net interest margin of 4.07 percent

·                  Average loans and leases increased by $1.3 billion, or 9.7 percent

·                  Average deposits increased by $1.5 billion, or 15.6 percent

·                  Restructured $240.1 million of consumer real estate loans in 2009 helping customers to stay in their homes

·                  Announced quarterly cash dividend of five cents per common share, payable February 26, 2010

 

 Earnings Summary

 

 

 

 

 

 

 

 

 

      

 

 

 

 

 

 

Table 1  

 ($ in thousands, except per-share data)

 

 

 

 

 

 

    

    

Percent Change

    

    

 

 

 

 

 

 

 

  

4Q
2009

 

3Q
2009

 

4Q
2008

 

 

4Q09 vs
3Q09

 

4Q09 vs
4Q08

 

 

YTD
2009

 

YTD
2008

 

Percent
Change

 

 Net income

 

$ 19,456

 

$ 17,451

 

$ 27,704

 

 

11.5

%

 

(29.8)

%

  

$ 87,097

 

$ 128,958

 

(32.5

)% 

 Diluted earnings per common share

 

.15

 

.14

 

.20

 

 

7.1

 

 

(25.0)

 

 

.54

 

1.01

 

(46.5

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Financial Ratios (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Return on average assets

 

.43 

%

.39 

%

.68 

%

 

 

 

 

 

 

 

.49 

%

.79 

%

 

 

 Return on average common equity (2)

 

6.57 

 

6.03 

 

9.00 

 

 

 

 

 

 

 

 

8.57 

 

11.46 

 

 

 

 Net interest margin

 

4.07 

 

3.92 

 

3.84 

 

 

 

 

 

 

 

 

3.87 

 

3.91 

 

 

 

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

 

1.35 

 

1.52 

 

1.02 

 

 

 

 

 

 

 

 

1.34 

 

.78 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Annualized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2) Year-to-date 2009 excludes a non-cash deemed preferred stock dividend of $12,025 recorded in the second quarter of 2009. Including this amount, the year-to-date return on average common equity was 5.95% for 2009.

 

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2

 

WAYZATA, MN, January 21, 2010 – TCF Financial Corporation (“TCF”) (NYSE: TCB) today reported diluted earnings per common share of 15 cents for the fourth quarter of 2009, compared with 14 cents in the third quarter of 2009 and 20 cents in the fourth quarter of 2008. Net income for the fourth quarter of 2009 was $19.5 million, compared with $17.5 million in the third quarter of 2009 and $27.7 million in the fourth quarter of 2008.

 

Diluted earnings per common share was 54 cents for 2009, compared with $1.01 for 2008. Net income was $87.1 million for 2009, compared with $129 million for 2008. Diluted earnings per common share and net income for 2009, excluding the non-cash deemed preferred stock dividend in the second quarter of 2009, was 64 cents and $99.1 million, respectively.

 

TCF declared a quarterly cash dividend of five cents per common share payable on February 26, 2010 to stockholders of record at the close of business on January 29, 2010.

 

Chairman’s Statement

 

“TCF is reporting its 59th consecutive profitable quarter and has announced its 87th consecutive dividend payment,” said William A. Cooper, TCF Chairman and CEO. “While credit issues remain at elevated levels, TCF has remained profitable throughout this economic crisis and our credit metrics have outperformed most of our peers. An improving economy and stabilizing home values may signal improvements in the credit cycle in the coming quarters. TCF’s conservative business model has proven its sustainability throughout the recent economic recession. I remain optimistic about the future of TCF going into this new decade.”

 

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3

 

 Total Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 2  

 

 

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 

 

($ in thousands)

 

 

4Q
2009

 

3Q
2009

 

4Q
2008

 

 

4Q09 vs
3Q09

 

4Q09 vs
4Q08

 

 

YTD
2009

 

YTD
2008

 

 

Percent
Change

 

 Net interest income

 

 

$ 169,641

 

$ 161,489

 

$ 147,117

 

 

   5.0%

 

 15.3%

 

 

$    633,006

 

$    593,673

 

 

6.6

 Fees and other revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Fees and service charges

 

 

74,875

 

77,433

 

67,448

 

 

(3.3)

 

11.0  

 

 

286,908

 

270,739

 

 

6.0

 

 Card revenue

 

 

26,813

 

26,393

 

25,243

 

 

1.6

 

6.2

 

 

104,770

 

103,082

 

 

1.6

 

 ATM revenue

 

 

7,006

 

7,861

 

7,688

 

 

(10.9)  

 

(8.9)

 

 

30,438

 

32,645

 

 

(6.8

)

 Total banking fees

 

 

108,694

 

111,687

 

100,379

 

 

(2.7)

 

8.3

 

 

422,116

 

406,466

 

 

3.9

 

 Leasing and equipment finance

 

 

24,408

 

15,173

 

16,298

 

 

60.9  

 

49.8  

 

 

69,113

 

55,488

 

 

24.6

 

 Other

 

 

2,764

 

1,197

 

130

 

 

130.9    

 

N.M.   

 

 

5,239

 

12,107

 

 

(56.7

)

 Total fees and other revenue

 

 

135,866

 

128,057

 

116,807

 

 

6.1

 

16.3  

 

 

496,468

 

474,061

 

 

4.7

 

 Gains on securities, net

 

 

7,283

 

-

 

8,167

 

 

N.M.   

 

(10.8)  

 

 

29,387

 

16,066

 

 

82.9

 

 Visa share redemption

 

 

-

 

-

 

-

 

 

-

 

-

 

 

-

 

8,308

 

 

N.M.

 

 Total non-interest income

 

 

143,149

 

128,057

 

124,974

 

 

11.8  

 

14.5  

 

 

525,855

 

498,435

 

 

5.5

 

 Total revenue

 

 

$ 312,790

 

$ 289,546

 

$ 272,091

 

 

8.0

 

15.0  

 

 

$ 1,158,861

 

$ 1,092,108

 

 

6.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Net interest margin(1)

 

 

4.07%

 

3.92%

 

3.84%

 

 

 

 

 

 

 

3.87%

 

3.91%

 

 

 

 

 Fees and other revenue as a % of total revenue

 

 

43.44   

 

44.23   

 

42.93   

 

 

 

 

 

 

 

42.84   

 

43.41   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 N.M. = Not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (1) Annualized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income

 

·                  Net interest income for the fourth quarter of 2009 was $169.6 million, up $22.5 million, or 15.3 percent, compared with the fourth quarter of 2008 and up $8.2 million, or 5 percent, compared with the third quarter of 2009. Net interest margin in the fourth quarter of 2009 was 4.07 percent, compared with 3.84 percent in the fourth quarter of 2008 and 3.92 percent in the third quarter of 2009. The increase in net interest margin in the fourth quarter of 2009 from the third quarter of 2009 was primarily due to lower average deposit rates and decreased amounts placed in low rate deposits at the Federal Reserve, partially offset by the negative impact of increased non-accrual loans and leases and loan restructurings. The increase in net interest margin in the fourth quarter of 2009 from the fourth quarter of 2008 was primarily due to decreased rates paid on deposits and earning asset growth, partially offset by an increased negative effect of non-accrual loans and leases and loan restructurings.

 

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4

 

·                  Net interest income in 2009 was $633 million, up $39.3 million, or 6.6 percent, from 2008. Net interest margin in 2009 was 3.87 percent, compared with 3.91 percent for 2008. The increase in net interest income from 2008 was primarily attributable to a $1.2 billion, or 7.9 percent, increase in average interest-earning assets, partially offset by a 4 basis point reduction in net interest margin. The decrease in net interest margin from 2008 was primarily due to declines in yields on interest-earning assets, resulting from lower market interest rates, the effect of higher balances of non-accrual loans and leases, loan restructurings and investments in lower yielding securities, partially offset by declines in rates paid on average deposits and an improvement in deposit mix.

 

Non-interest Income

 

·                  Banking fees and service charges in the fourth quarter of 2009 were $108.7 million, up $8.3 million, or 8.3 percent, from the fourth quarter of 2008 and down $3 million, or 2.7 percent, from the third quarter of 2009. Banking fees and service charges in 2009 were $422.1 million, up $15.7 million, or 3.9 percent, from 2008. The decrease from the third quarter of 2009 was primarily due to seasonal lower activity in deposit service fees. The increase from 2008 was primarily due to an increased number of checking accounts and related fee income.

 

·                  Card revenues in the fourth quarter of 2009 were $26.8 million, up $1.6 million, or 6.2 percent, from the fourth quarter of 2008 and up $420 thousand, or 1.6 percent, from the third quarter of 2009. Card revenues in 2009 totaled $104.8 million, up $1.7 million, or 1.6 percent, from 2008. The increases in all periods were the result of growth in active accounts and increases in customer transactions in 2009 partially offset by lower average transaction amounts.

 

·                  Leasing and equipment finance revenues in the fourth quarter of 2009 were $24.4 million, up $8.1 million, or 49.8 percent, from the fourth quarter of 2008 and up $9.2 million, or 60.9 percent, from the third quarter of 2009. Leasing and equipment finance revenues in 2009 were $69.1 million, up $13.6 million, or 24.6 percent, from 2008. The increase in leasing and equipment finance revenues was primarily due to higher sales-type lease revenue and increased operating lease revenue as a result of the Fidelity National Capital, Inc. acquisition by Winthrop Resources Corporation at the end of the third quarter of 2009. The acquisition

 

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5

 

also contributed $6.5 million to the increases in operating lease depreciation in the fourth quarter and full year of 2009.

 

·                  Other non-interest income in the fourth quarter of 2009 was $2.8 million, up $2.6 million from the fourth quarter of 2008 and up $1.6 million from the third quarter of 2009. Other non-interest income in 2009 was $5.2 million, down $6.9 million, or 56.7 percent, from 2008. The decrease in other non-interest income in 2009 from 2008 was primarily due to TCF no longer selling investment and insurance products in the branches, partially offset by servicing fees generated in the inventory finance business.

 

Loans and Leases

 

 Average Loans and Leases

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 3  

 

  

 

   

 

   

 

  

  

Percent Change

 

 

 

 

 

 

 

 

 ($ in thousands)

 

4Q
2009

 

3Q
2009

 

4Q
2008

 

 

4Q09 vs

3Q09

 

4Q09 vs
4Q08

 

YTD
2009

 

YTD
2008

 

 

Percent Change

 

 Loans and leases:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Consumer real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 First mortgage lien

 

  $   4,954,306

 

  $   4,939,529

 

  $   4,866,310

 

 

.3

%

 

1.8

%

 

$   4,932,315

 

$   4,835,524

 

 

2.0

 Junior lien

 

2,321,045

 

 2,329,096

 

 2,423,873

 

 

(.3

)

 

(4.2

)

 

2,351,033

 

2,411,502

 

 

(2.5

)

Total

 

7,275,351

 

7,268,625

 

7,290,183

 

 

.1

 

 

(.2

)

 

7,283,348

 

7,247,026

 

 

.5

 

 Consumer other

 

32,676

 

35,015

 

45,495

 

 

(6.7

)

 

(28.2

)

 

35,849

 

132,890

 

 

(73.0

)

Total consumer

 

7,308,027

 

7,303,640

 

7,335,678

 

 

.1

 

 

(.4

)

 

7,319,197

 

7,379,916

 

 

(.8

)

 Commercial real estate

 

3,241,269

 

3,193,686

 

2,895,935

 

 

1.5

 

 

11.9

 

 

3,136,699

 

2,724,507

 

 

15.1

 

 Commercial business

 

443,013

 

477,041

 

522,636

 

 

(7.1

)

 

(15.2

)

 

475,674

 

535,147

 

 

(11.1

)

Total commercial

 

3,684,282

 

3,670,727

 

3,418,571

 

 

.4

 

 

7.8

 

 

3,612,373

 

3,259,654

 

 

10.8

 

 Leasing and equipment finance

 

3,049,093

 

2,811,165

 

2,389,225

 

 

8.5

 

 

27.6

 

 

2,826,835

 

2,265,391

 

 

24.8

 

 Inventory finance

 

 383,291

 

 185,914

 

158

 

 

106.2

 

 

N.M.

 

 

 179,990

 

40

 

 

N.M.

 

 Total

 

  $ 14,424,693

 

   $ 13,971,446

 

  $ 13,143,632

 

 

3.2

 

 

9.7

 

 

  $ 13,938,395

 

  $ 12,905,001

 

 

8.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 N.M. = Not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·                  Average consumer real estate loan balances for the fourth quarter of 2009 compared to the fourth quarter of 2008, and the third quarter of 2009, as well as all of 2009 compared to all of 2008 were relatively flat reflecting less demand for home equity financing due in part to declines in home values and reductions in consumer spending in the weak economy.

 

·                  At December 31, 2009, 68.1 percent of the consumer real estate loan portfolio was secured by first liens. The average home value used to secure consumer real estate loans was $250 thousand at December 31, 2009.

 

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6

 

·                  Average commercial loan balances in the fourth quarter of 2009 increased $265.7 million, or 7.8 percent, from the fourth quarter of 2008 and were essentially flat from the third quarter of 2009. Average commercial loan balances in 2009 increased $352.7 million, or 10.8 percent, from 2008. Increases in average commercial loan balances in 2009 were the result of increased opportunities to attract high quality customers who have fewer competitive alternatives.

 

·                  Average leasing and equipment finance balances in the fourth quarter of 2009 increased $659.9 million, or 27.6 percent, from the fourth quarter of 2008 and increased $237.9 million, or 8.5 percent, from the third quarter of 2009. Average leasing and equipment finance balances in 2009 increased $561.4 million, or 24.8 percent, from 2008. Portfolio purchases and company acquisitions in the first and third quarters of 2009 contributed $428.7 million of the increase in average balances in fourth quarter 2009 from the fourth quarter of 2008, $200.2 million of the increase from the third quarter of 2009 and $256.3 million of the increase in average balances in 2009 from 2008.

 

·                  Average inventory finance loans in the fourth quarter of 2009 increased $197.4 million, or 106.2 percent, from the third quarter of 2009. The increase was due primarily to purchases of inventory finance loans in the lawn and garden sector in the fourth quarter totaling $225.8 million.

 

Securities Available for Sale

 

 Average Securities Available for Sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 4  

 

 

 

 

 

 

 

 

 

Yield

 

 

 

 

 

 

Yield

 

 ($ in thousands)

 

4Q
2009

   

3Q
2009

   

4Q
2008

 

 

4Q09

 

4Q08

 

YTD
2009

 

YTD
2008

 

 

YTD
2009

 

YTD
2008

 

 U.S. Government sponsored entities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities

 

  $ 1,497,672

   

$ 1,432,670

   

$ 1,963,608

 

 

4.73

%

 

5.13

%

 

  $ 1,645,544

 

  $ 2,100,291

 

 

4.92

%

 

5.26

%

 

Debentures

 

413,647

 

600,098

 

-

 

 

 2.23

 

 

-

 

 

 389,245

 

-

 

 

 2.18

 

 

-

 

 

 Other securities

 

68,415

 

489

 

2,953

 

 

.11

 

 

 3.93

 

 

 17,617

 

 12,674

 

 

.22

 

 

 3.50

 

 

Total

 

$ 1,979,734

   

$ 2,033,257

    

$ 1,966,561

 

 

 4.05

 

 

 5.13

 

 

$ 2,052,406

 

$ 2,112,965

 

 

 4.36

 

 

 5.25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·                  In December of 2009, TCF sold $600.1 million of Fannie Mae and Freddie Mac callable debentures with a weighted average yield of 2.19 percent and $86.4 million of Fannie Mae and Freddie Mac mortgage-backed securities with a weighted average yield of 5.36 percent and purchased $624.1 million of Fannie Mae and Freddie Mac mortgage-backed securities with a weighted average yield of 4.13 percent.

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7

 

 

Deposits

 

 Average Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 5  

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 ($ in thousands)

 

4Q
2009

 

3Q
2009

 

4Q
2008

 

4Q09 vs
3Q09

 

4Q09 vs
4Q08

 

YTD
2009

 

YTD
2008

 

Percent
Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Non-interest bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

$ 1,355,543

 

$ 1,380,591

 

$ 1,345,832

 

(1.8

)%

 

.7

%

 

$ 1,402,442

 

$1,408,657

 

(.4

)%

 

Small business

 

611,454

 

591,451

 

593,626

 

3.4

 

 

3.0

 

 

584,605

 

583,611

 

.2

 

 

Commercial

 

297,223

 

277,135

 

234,045

 

7.2

 

 

27.0

 

 

265,681

 

231,903

 

14.6

 

 

Subtotal

 

2,264,220

 

2,249,177

 

2,173,503

 

.7

 

 

4.2

 

 

2,252,728

 

2,224,171

 

1.3

 

 

 Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking

 

1,868,911

 

1,800,583

 

1,754,111

 

3.8

 

 

6.5

 

 

1,802,694

 

1,830,361

 

(1.5

)

 

Savings

 

5,214,318

 

5,071,509

 

2,847,838

 

2.8

 

 

83.1

 

 

4,732,316

 

2,812,115

 

68.3

 

 

Money market

 

671,755

 

723,098

 

625,198

 

(7.1

)

 

7.4

 

 

683,030

 

613,543

 

11.3

 

 

Subtotal

 

7,754,984

 

7,595,190

 

5,227,147

 

2.1

 

 

48.4

 

 

7,218,040

 

5,256,019

 

37.3

 

 

Certificates

 

1,366,871

 

1,757,884

 

2,448,815

 

(22.2

)

 

(44.2

)

 

1,915,467

 

2,472,357

 

(22.5

)

 

Subtotal

 

9,121,855

 

9,353,074

 

7,675,962

 

(2.5

)

 

18.8

 

 

9,133,507

 

7,728,376

 

18.2

 

 

Total deposits

 

$11,386,075

 

$11,602,251

 

$ 9,849,465

 

(1.9

)

 

15.6

 

 

$11,386,235

 

$9,952,547

 

14.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Average interest rate on deposits

 

.74%

 

.94%

 

1.51%

 

 

 

 

 

1.07%

 

1.58%

 

 

 

 

·                  Total average deposits in the fourth quarter of 2009 were $11.4 billion, up $1.5 billion, or 15.6 percent, from the fourth quarter of 2008 and down $216 million, or 1.9 percent, from the third quarter of 2009.  Total average deposits in 2009 were $11.4 billion, up $1.4 billion, or 14.4 percent, from 2008.  The increase in average deposits in the fourth quarter of 2009 from the fourth quarter of 2008 and the increase for the full year of 2009 from 2008 were primarily due to strong growth in savings deposits due to several initiatives involving products, pricing and marketing efforts, partially offset by declines in certificates of deposits resulting from reduced interest rates. Average deposit balances decreased from the third quarter of 2009 primarily due to management’s strategy to decrease balances of higher cost certificates of deposits and money market deposits, partially offset by increases in savings and interest-bearing checking deposits.

 

·                  The average rate paid on deposits in the fourth quarter of 2009 was .74 percent, down 77 basis points from the fourth quarter of 2008 and down 20 basis points from the third quarter of 2009.  The average rate paid on deposits in 2009 was 1.07 percent, down 51 basis points from 2008.  Average rate paid on deposits declined due to reductions in interest rates paid on certain deposit products and mix changes as a result of management’s strategy to reduce balances of certificates of deposit. The weighted average interest rate on total deposits was .65 percent at December 31, 2009.

 

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8

 

Non-interest Expense

 

 Non-interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 6  

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 ($ in thousands)

 

4Q
2009

 

3Q
2009

 

4Q
2008

 

4Q09 vs
3Q09

 

4Q09 vs
4Q08

 

YTD
2009

 

YTD
2008

 

Percent
Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Compensation and employee benefits

 

$ 89,374

 

$ 90,680

 

$ 83,323

 

(1.4

)%

 

7.3

%

 

$ 356,996

 

$ 341,203

 

4.6

%

 Occupancy and equipment

 

31,099

 

31,619

 

32,503

 

(1.6

)

 

(4.3

)

 

126,292

 

127,953

 

(1.3

)

 Deposit account premiums

 

9,347

 

7,472

 

5,659

 

25.1

 

 

65.2

 

 

30,682

 

16,888

 

81.7

 

 Advertising and marketing

 

3,789

 

4,766

 

4,643

 

(20.5

)

 

(18.4

)

 

17,134

 

19,150

 

(10.5

)

 FDIC premiums and assessments

 

5,288

 

5,085

 

1,706

 

4.0

 

 

N.M.

 

 

27,471

 

2,990

 

N.M.

 

 Foreclosed real estate and repossessed assets

 

12,088

 

8,038

 

6,341

 

50.4

 

 

90.6

 

 

30,542

 

18,731

 

63.1

 

 Other

 

45,028

 

38,873

 

41,366

 

15.8

 

 

8.9

 

 

156,299

 

150,030

 

4.2

 

Subtotal

 

196,013

 

186,533

 

175,541

 

5.1

 

 

11.7

 

 

745,416

 

676,945

 

10.1

 

 Operating lease depreciation

 

10,750

 

3,734

 

4,269

 

187.9

 

 

151.8

 

 

22,368

 

17,458

 

28.1

 

Total non-interest expense

 

$206,763

 

$190,267

 

$179,810

 

8.7

 

 

15.0

 

 

$767,784

 

$694,403

 

10.6

 

 

 N.M. = Not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·                  The increased compensation and employee benefits costs in the fourth quarter of 2009 from the fourth quarter of 2008 and the increase for the full year of 2009 from 2008 were primarily due to increased employee medical plan expenses and increased costs in leasing and equipment finance and inventory finance as a result of expansion and growth, partially offset by headcount reductions in banking.

 

·                  The increased FDIC premiums and assessments in the fourth quarter of 2009 from the fourth quarter of 2008 were primarily due to higher insurance rates and deposit growth.  The increase in FDIC premiums and assessments in 2009 from 2008 was primarily due to higher insurance rates and deposit growth as well as a FDIC special assessment of $8.2 million in June of 2009.  On December 30, 2009, TCF was required to prepay $77.6 million of premiums to the FDIC.  The expense related to this prepayment is anticipated to be recognized over the next three years based on actual calculations of quarterly premiums.

 

·                  Foreclosed real estate and repossessed asset expenses in the fourth quarter of 2009 increased $5.7 million, or 90.6 percent, from the fourth quarter of 2008 and increased $4.1 million, or 50.4 percent, from the third quarter of 2009. Foreclosed real estate and repossessed asset expenses increased $11.8 million in 2009, or 63.1 percent, from 2008.  The increases from all periods were primarily due to increased numbers of foreclosed commercial and consumer real estate properties, adjustments to property valuations and losses on sales of properties.

 

·                  In the fourth quarter of 2009, management began a reorganization of its structure and business segments, incurring $3.4 million of severance costs, which are included in other non-interest expense.

 

 

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9

 

Credit Quality

 

 Credit Quality Summary

 

 

 

 

 

 

 

 

 

Table 7  

 

 

 

 

 

 

 

 

Percent Change

 

 

 

 

 

 

 

 ($ in thousands)

 

4Q
2009

 

3Q
2009

 

4Q
2008

 

 4Q09 vs
 3Q09

 

4Q09 vs
4Q08

     

YTD
2009

     

YTD
2008

 

  %
  Chg

 

 Allowance for Loan and Lease Losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Balance at beginning of period

 

$

  215,732

 

$

  193,445

 

$

  158,978

 

    11.5

%

35.7

%      

$

  172,442

 

$

  80,942

 

113.0

%

Charge-offs

 

(52,841

)

(57,214

)

(37,100)

 

(7.6

)

42.4

 

(202,398

)

(114,800

)

76.3

 

Recoveries

 

4,191

 

3,957

 

3,514

 

6.0

 

19.3

 

15,891

 

14,255

 

11.5

 

Net charge-offs

 

(48,650

)

(53,257

)

(33,586

)

(8.7

)

44.8

 

(186,507

)

(100,545

)

85.5

 

Provision for credit losses

 

77,389

 

75,544

 

47,050

 

2.4

 

64.5

 

258,536

 

192,045

 

34.6

 

 Balance at end of period

 

$

 244,471

 

$

 215,732

 

$

172,442

 

13.3

 

41.8

 

$

244,471

 

$

  172,442

 

41.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Allowance as a percentage of period end loans and leases

 

1.68

 %

1.51

 %

1.29

 %

 

 

 

 

1.68

 %

1.29

 %

 

 

 Ratio of allowance to net charge-offs(1)

1.3

 X

1.0

 X

1.3

 X

 

 

 

 

1.3

 X

1.7

 X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Credit Loss Reserves

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Allowance for loan and lease losses

 

$

244,471

 

$

215,732

 

$

172,442

 

13.3

 

41.8

 

 

 

 

 

 

 

 Reserves netted against portfolio asset balances

 

10,168

 

12,951

 

-

 

(21.5

)

N.M.

 

 

 

 

 

 

 

 Reserves for unfunded commitments

 

3,850

 

2,871

 

1,510

 

34.1

 

155.0

 

 

 

 

 

 

 

Total credit loss reserves

 

$

258,489

 

$

231,554

 

$

173,952

 

11.6

 

48.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Total credit loss reserves as a % of period end loans and leases

 

1.77

 %

1.61

 %

1.30

 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Non-accrual loans and leases

 

$

296,275

 

$

268,834

 

$

172,518

 

10.2

 

71.7

 

 

 

 

 

 

 

 Real estate owned

 

105,768

 

94,167

 

61,665

 

12.3

 

71.5

 

 

 

 

 

 

 

Total non-performing assets

 

$

402,043

 

$

363,001

 

$

234,183

 

10.8

 

71.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

2.80

 %

2.57

 %

1.78

 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Accruing consumer real estate restructured loans

 

$

252,510

 

$

159,881

 

$

27,423

 

57.9

%

    N.M.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 N.M. = Not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (1) Annualized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2009:

 

·                  Allowance for loan and lease losses was $244.5 million, or 1.68 percent of loans and leases, compared with $215.7 million, or 1.51 percent, at September 30, 2009 and $172.4 million, or 1.29 percent, at December 31, 2008.

 

·                  Over 60-day delinquency rate was .69 percent, down from .81 percent at September 30, 2009 and up from .60 percent at December 31, 2008, primarily due to fluctuations in consumer real estate delinquency rates.

 

·                  Non-accrual loans and leases increased $27.4 million, or 10.2 percent, from September 30, 2009 and $123.8 million, or 71.7 percent, from December 31, 2008 primarily due to increases in consumer and commercial real estate non-accrual loans.

 

-more-


 

10

 

·                  Loan restructuring programs for consumer real estate borrowers implemented in the third quarter of 2009 have resulted in a significant increase in troubled debt restructurings, which management refers to as restructured loans.  Restructured loan borrowers have experienced financial difficulties and concessions were granted that would not otherwise have been considered.  Restructured loans generally accrue interest although at lower rates than the original loan over their restructured period. During the fourth quarter and for the full year of 2009, TCF restructured loans totaling $95.4 million and $240.1 million, respectively.  At December 31, 2009, total restructured loans were $252.5 million, up from $27.4 million at December 31, 2008. Reserves for losses on accruing consumer real estate restructured loans were $27 million, or 10.7 percent of the outstanding balance at December 31, 2009.  The over 60-day delinquency rate on these restructured loans was 2.48 percent at December 31, 2009.

 

For the quarter ended December 31, 2009:

 

·                  Provision for credit losses was $77.4 million, up from $47.1 million in the fourth quarter of 2008 and relatively flat compared to the $75.5 million recorded in the third quarter of 2009. The increase from the fourth quarter of 2008 was primarily due to increased reserves for certain commercial loans and restructured consumer real estate loans and increased consumer real estate, commercial and leasing net charge-offs.

 

·                  Net loan and lease charge-offs were $48.7 million, or 1.35 percent annualized, of average loans and leases, up from $33.6 million, or 1.02 percent annualized, of average loans and leases from the fourth quarter of 2008 and down from $53.3 million, or 1.52 percent annualized, of average loans and leases in the third quarter of 2009. Increases over the fourth quarter of 2008 were primarily due to increases in consumer real estate, commercial real estate and leasing and equipment finance net charge-offs.  The decrease from the third quarter of 2009 was the result of decreases in every category with the exception of a small increase in consumer loan net charge-offs.

 

“For the first time in eight quarters, TCF experienced a decrease in total net charge-offs,” said William A. Cooper.  “While this decrease may not signal a trend, TCF is starting to realize the value associated with the stabilization or increases in property values in most of our markets and a slight improvement in economic

 

-more-

 


 

11

 

activity.  While charge-offs remain high compared with historical standards, the overall value of TCF’s secured lending philosophy has been evident during one of the worst economies of our era.”

 

Income Taxes

 

·                  Income tax expense was $9.4 million for the fourth quarter of 2009, or 32.8 percent of pre-tax income, compared with $17.5 million, or 38.8 percent of pre-tax income, for the comparable 2008 period and $6.5 million, or 27.4 percent of pre-tax income, for the third quarter 2009.  The effective tax rate for the fourth quarter of 2009 has a year-to-date change in estimate of the rate of $1.1 million, or 85 basis points on the effective tax rate. Income tax expense for the fourth quarter of 2008 included a $1.5 million increase in income tax expense for distributions from the company’s deferred compensation plans.  Excluding this item, the effective income tax rate was 35.5 percent for 2008.

 

·                  Income tax expense was $45.9 million for 2009, or 34.6 percent of pre-tax income, compared with $76.7 million, or 37.3 percent of pre-tax income, for 2008.  Income tax expense for 2009 included a $4.2 million decrease in income tax expense related to favorable developments in uncertain tax positions, partially offset by a slight increase in the effective income tax rate.  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 related to distributions from the company’s deferred compensation plans.  Excluding these significant items, the effective income tax rate was 37.8 percent for 2009, up from 34.2 percent for 2008 due to higher state income taxes.

 

-more-


 

12

 

Capital and Liquidity

 

Capital Information

 

 

 

 

 

 

 

Table 8

 

At period end

 

 

 

 

 

 

 

 

 

($ in thousands, except per-share data)

 

4Q

 

4Q

 

 

 

2009

 

2008

 

Total TCF stockholders’ equity

 

$1,179,755

 

 

 

$1,493,776

 

 

 

Total equity

 

$1,175,362

 

 

 

$1,493,776

 

 

 

Total equity to total assets

 

6.60

 %

 

 

8.92

 %

 

 

Book value per common share

 

$         9.10

 

 

 

$         8.99

 

 

 

Tangible realized common equity to tangible assets(1)

 

5.86

 %

 

 

6.01

 %

 

 

 

 

 

 

 

 

 

 

 

 

Risk-based capital

 

 

 

 

 

 

 

 

 

Tier 1

 

$1,161,750

 

      8.52 %

 

$1,461,973

 

    11.79 %

 

Total

 

1,514,878

 

11.12

 

1,817,225

 

14.65

 

Total stated “well-capitalized” requirement

 

1,362,795

 

10.00

 

1,240,147

 

10.00

 

Excess over stated “well-capitalized” requirement

 

152,083

 

  1.12

 

577,078

 

  4.65

 

 

 

 

 

 

 

 

 

 

 

(1) Excludes the impact of preferred stock, goodwill, other intangibles and accumulated other comprehensive income (loss) (see “Reconciliation of GAAP to Non-GAAP Measures” table).

 

 

·                  Total risk-based capital at December 31, 2009 of $1.5 billion, or 11.12 percent of risk-weighted assets, was $152.1 million in excess of the stated “well-capitalized” requirement.  Decreases in tier 1 and total risk-based capital are primarily the result of TCF redeeming all shares of preferred stock issued to the U.S. Department of Treasury under the Capital Purchase Program for $361.2 million in April of 2009.

 

·                  In December, the U.S. Department of Treasury completed a public auction for the warrant issued by TCF under the Capital Purchase Program, which is now being traded under the symbol “TCB WS” on the New York Stock Exchange.

 

·                  On January 19, 2010, the Board of Directors of TCF declared a regular quarterly cash dividend of five cents per common share payable on February 26, 2010 to stockholders of record at the close of business on January 29, 2010.

 

·                  At December 31, 2009, TCF had $1.9 billion in unused, secured borrowing capacity at the FHLB of Des Moines and $708 million in unused, secured borrowing capacity at the Federal Reserve Discount Window.

 

-more-

 


 

13

 

Website Information

 

A live webcast of TCF’s conference call to discuss 2009 earnings will be hosted at TCF’s website, http://ir.tcfbank.com, on January 21, 2010 at 10:00 a.m., CST. 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 $17.9 billion in total assets. TCF has 443 banking offices in Minnesota, Illinois, Michigan, Colorado, Wisconsin, Indiana, Arizona and South Dakota, 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-

 


 

14

 

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 the following:

 

Adverse Economic or Business Conditions, Credit Risks.  Continued or deepening deterioration in general economic and banking industry conditions, or continued increases in unemployment in TCF’s primary banking markets; adverse economic, business and competitive developments such as shrinking interest margins, deposit outflows, deposit account attrition, or an inability to increase the number of deposit accounts; adverse 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 the allowance for loan and lease losses dictated by new market conditions or regulatory requirements.

 

Earnings/capital constraints, Liquidity Risks.  Limitations on TCF’s ability to pay dividends or to increase dividends in the future because of financial performance deterioration, regulatory restrictions or limitations; increased deposit insurance premiums, special assessments or other costs related to deteriorating conditions in the banking industry and the economic impact on banks of the Emergency Economic Stabilization Act, as amended (“EESA”); the impact of financial regulatory reform proposals, including possible additional capital requirements; adverse changes in securities markets directly or indirectly affecting TCF’s ability to sell assets or to fund its operations; diminished unsecured borrowing capacity resulting from TCF credit rating downgrades and unfavorable conditions in the credit markets that restrict or limit various funding sources.

 

Legislative and Regulatory Requirements.  Consumer protection and supervisory requirements which could include the creation of a new consumer protection agency and limits on Federal preemption for state laws that could be applied to national banks; the imposition of requirements with an adverse impact relating to TCF’s lending, loan collection and other business activities as a result of the EESA,  or other legislative or regulatory developments such as mortgage foreclosure moratorium laws; reduction of interchange revenue from debit card transactions; impact of legislative, regulatory or other changes affecting customer account charges and fee income; changes to bankruptcy laws which would result in the loss of all or part of TCF’s security interest due to collateral value declines (so-called “cramdown” provisions);  adverse regulatory examinations and resulting enforcement actions, including those provided for under the Bank Secrecy Act; heightened regulatory practices, requirements or expectations, including, but not limited to, requirements related to the Bank Secrecy Act and anti-money laundering compliance activity.

 

Litigation Risks.  Results of litigation, including class action litigation concerning TCF’s lending or deposit activities or fees or charges, 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 covered litigation or other litigation against Visa.

 

Competitive Conditions; Supermarket Branching Risks.  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.

 

Accounting, Audit, Tax and Insurance Matters.  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 state or Federal tax assessments or findings in tax audits; lack of or inadequate insurance coverage for claims against TCF.

 

Technological and Operational Matters.  Technological, computer related or operational difficulties or loss or theft of information and the possibility that deposit account losses (fraudulent checks, etc.) may increase.

 

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-

 


 

15

 

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per-share data)

(Unaudited)

 

 

 

Three Months Ended
December 31,

 

Change

 

 

 

2009

 

2008

 

$

 

%

 

Interest income:

 

 

 

 

 

 

 

 

 

Loans and leases

 

  $

222,300

 

  $

211,346

 

  $

10,954

 

5.2

%

Securities available for sale

 

20,035

 

25,232

 

(5,197)

 

(20.6)

 

Investments and other

 

1,160

 

1,224

 

(64)

 

(5.2)

 

Total interest income

 

243,495

 

237,802

 

5,693

 

2.4

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

 

21,171

 

37,362

 

(16,191)

 

(43.3)

 

Borrowings

 

52,683

 

53,323

 

(640)

 

(1.2)

 

Total interest expense

 

73,854

 

90,685

 

(16,831)

 

(18.6)

 

Net interest income

 

169,641

 

147,117

 

22,524

 

15.3

 

Provision for credit losses

 

77,389

 

47,050

 

30,339

 

64.5

 

Net interest income after provision for
credit losses

 

92,252

 

100,067

 

(7,815)

 

(7.8)

 

Non-interest income:

 

 

 

 

 

 

 

 

 

Fees and service charges

 

74,875

 

67,448

 

7,427

 

11.0

 

Card revenue

 

26,813

 

25,243

 

1,570

 

6.2

 

ATM revenue

 

7,006

 

7,688

 

(682)

 

(8.9)

 

Subtotal

 

108,694

 

100,379

 

8,315

 

8.3

 

Leasing and equipment finance

 

24,408

 

16,298

 

8,110

 

49.8

 

Other

 

2,764

 

130

 

2,634

 

N.M.

 

Fees and other revenue

 

135,866

 

116,807

 

19,059

 

16.3

 

Gains on securities, net

 

7,283

 

8,167

 

(884)

 

(10.8)

 

Total non-interest income

 

143,149

 

124,974

 

18,175

 

14.5

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

89,374

 

83,323

 

6,051

 

7.3

 

Occupancy and equipment

 

31,099

 

32,503

 

(1,404)

 

(4.3)

 

Deposit account premiums

 

9,347

 

5,659

 

3,688

 

65.2

 

Advertising and promotions

 

3,789

 

4,643

 

(854)

 

(18.4)

 

FDIC premiums and assessments

 

5,288

 

1,706

 

3,582

 

N.M.

 

Foreclosed real estate and repossessed assets, net

 

12,088

 

6,341

 

5,747

 

90.6

 

Other

 

45,028

 

41,366

 

3,662

 

8.9

 

Subtotal

 

196,013

 

175,541

 

20,472

 

11.7

 

Operating lease depreciation

 

10,750

 

4,269

 

6,481

 

151.8

 

Total non-interest expense

 

206,763

 

179,810

 

26,953

 

15.0

 

Income before income tax expense

 

28,638

 

45,231

 

(16,593)

 

(36.7)

 

Income tax expense

 

9,385

 

17,527

 

(8,142)

 

(46.5)

 

Income after income tax expense

 

19,253

 

27,704

 

(8,451)

 

(30.5)

 

Income (loss) attributable to non-controlling interest

 

(203)

 

-

 

(203)

 

N.M.

 

Net income

 

19,456

 

27,704

 

(8,248)

 

(29.8)

 

Preferred stock dividends

 

-

 

2,540

 

(2,540)

 

N.M.

 

Net income available to common stockholders

 

  $

19,456

 

  $

25,164

 

  $

(5,708)

 

(22.7)

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

Basic

 

  $

.15

 

  $

.20

 

  $

(.05)

 

(25.0)

 

Diluted

 

.15

 

.20

 

(.05)

 

(25.0)

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

  $

.05

 

  $

.25

 

  $

(.20)

 

(80.0)

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Basic

 

127,157

 

125,345

 

1,812

 

1.4

 

Diluted

 

127,203

 

125,355

 

1,848

 

1.5

 

 

 

 

 

 

 

 

 

 

 

N.M. Not meaningful

 

 

 

 

 

 

 

 

 

 

-more-


 

16

 

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per-share data)

(Unaudited)

 

 

 

Year Ended
December 31,

 

Change

 

 

 

2009

 

2008

 

$

 

%

 

Interest income:

 

 

 

 

 

 

 

 

 

Loans and leases

 

  $

864,384

 

  $

847,512

 

  $

16,872

 

2.0

%

Securities available for sale

 

89,427

 

110,946

 

(21,519)

 

(19.4)

 

Investments and other

 

4,370

 

5,937

 

(1,567)

 

(26.4)

 

Total interest income

 

958,181

 

964,395

 

(6,214)

 

(.6)

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

 

122,112

 

156,774

 

(34,662)

 

(22.1)

 

Borrowings

 

203,063

 

213,948

 

(10,885)

 

(5.1)

 

Total interest expense

 

325,175

 

370,722

 

(45,547)

 

(12.3)

 

Net interest income

 

633,006

 

593,673

 

39,333

 

6.6

 

Provision for credit losses

 

258,536

 

192,045

 

66,491

 

34.6

 

Net interest income after provision for
credit losses

 

374,470

 

401,628

 

(27,158)

 

(6.8)

 

Non-interest income:

 

 

 

 

 

 

 

 

 

Fees and service charges

 

286,908

 

270,739

 

16,169

 

6.0

 

Card revenue

 

104,770

 

103,082

 

1,688

 

1.6

 

ATM revenue

 

30,438

 

32,645

 

(2,207)

 

(6.8)

 

Subtotal

 

422,116

 

406,466

 

15,650

 

3.9

 

Leasing and equipment finance

 

69,113

 

55,488

 

13,625

 

24.6

 

Other

 

5,239

 

12,107

 

(6,868)

 

(56.7)

 

Fees and other revenue

 

496,468

 

474,061

 

22,407

 

4.7

 

Gains on securities, net

 

29,387

 

16,066

 

13,321

 

82.9

 

Visa share redemption

 

-

 

8,308

 

(8,308)

 

N.M.

 

Total non-interest income

 

525,855

 

498,435

 

27,420

 

5.5

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

356,996

 

341,203

 

15,793

 

4.6

 

Occupancy and equipment

 

126,292

 

127,953

 

(1,661)

 

(1.3)

 

Deposit account premiums

 

30,682

 

16,888

 

13,794

 

81.7

 

Advertising and promotions

 

17,134

 

19,150

 

(2,016)

 

(10.5)

 

FDIC premiums and assessments

 

27,471

 

2,990

 

24,481

 

N.M.

 

Foreclosed real estate and repossessed assets, net

 

30,542

 

18,731

 

11,811

 

63.1

 

Other

 

156,299

 

150,030

 

6,269

 

4.2

 

Subtotal

 

745,416

 

676,945

 

68,471

 

10.1

 

Operating lease depreciation

 

22,368

 

17,458

 

4,910

 

28.1

 

Total non-interest expense

 

767,784

 

694,403

 

73,381

 

10.6

 

Income before income tax expense

 

132,541

 

205,660

 

(73,119)

 

(35.6)

 

Income tax expense

 

45,854

 

76,702

 

(30,848)

 

(40.2)

 

Income after income tax expense

 

86,687

 

128,958

 

(42,271)

 

(32.8)

 

Income (loss) attributable to non-controlling interest

 

(410)

 

-

 

(410)

 

N.M.

 

Net income

 

87,097

 

128,958

 

(41,861)

 

(32.5)

 

Preferred stock dividends

 

18,403

 

2,540

 

15,863

 

N.M.

 

Net income available to common stockholders

 

  $

68,694

 

  $

126,418

 

  $

(57,724)

 

(45.7)

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

Basic

 

  $

.54

 

  $

1.01

 

  $

(.47)

 

(46.5)

 

Diluted

 

.54

 

1.01

 

(.47)

 

(46.5)

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

  $

.40

 

  $

1.00

 

  $

(.60)

 

(60.0)