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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): April 26, 2010

 


 

 

TCF FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

 


 

Delaware

 

001-10253

 

41-1591444

(State of other jurisdiction of

 

(Commission File Number)

 

(IRS Employer Identification No.)

incorporation)

 

 

 

 

 

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

(Address of principal executive offices) (Zip Code)

 

(952) 745-2760

(Registrant’s telephone number, including area code)

 


 

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

 

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

 

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

 

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

 

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

 

 

 

 


 

Item 2.02  Results of Operations and Financial Condition.

 

Information is being furnished herein in Exhibit 99.1 with respect to presentations to investors and others that may be made by executive officers of TCF Financial Corporation (the “Company”).  This information includes selected financial and operational information through the first quarter of 2010 and does not represent a complete set of financial statements and related notes prepared in conformity with generally accepted accounting principles (“GAAP”).  Most, but not all, of the selected financial information furnished herein is derived from the Company’s consolidated financial statements and related notes prepared in accordance with GAAP and management’s discussion and analysis included in the Company’s reports on Forms 10-K and 10-Q.  The Company’s annual financial statements are subject to independent audit.  These materials replace and supersede investor presentation materials previously furnished as an exhibit to Current Reports on Form 8-K.  These materials are dated April 26, 2010, and TCF does not undertake to update the materials after that date.

 

The presentation is also available on the Company’s web site at http://ir.tcfbank.com.  TCF Financial Corporation’s Annual Report to Shareholders and its reports on Forms 10-K, 10-Q and 8-K and other publicly available information should be consulted for other important information about the Company.

 

Information contained herein, including Exhibit 99.1, shall not be deemed filed for the purposes of the Securities Exchange Act of 1934, nor shall such information and Exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such a filing.

 

Item 7.01  Regulation FD Disclosure.

 

Information is being furnished herein in Exhibit 99.1 with respect to presentations to investors and others that may be made by executive officers of TCF Financial Corporation (the “Company”).  This information includes selected financial and operational information through the first quarter of 2010 and does not represent a complete set of financial statements and related notes prepared in conformity with generally accepted accounting principles (“GAAP”).  Most, but not all, of the selected financial information furnished herein is derived from the Company’s consolidated financial statements and related notes prepared in accordance with GAAP and management’s discussion and analysis included in the Company’s reports on Forms 10-K and 10-Q.  The Company’s annual financial statements are subject to independent audit.  These materials replace and supersede investor presentation materials previously furnished as an exhibit to Current Reports on Form 8-K.  These materials are dated April 26, 2010, and TCF does not undertake to update the materials after that date.

 

The presentation is also available on the Company’s web site at http://ir.tcfbank.com.  TCF Financial Corporation’s Annual Report to Shareholders and its reports on Forms 10-K, 10-Q and 8-K and other publicly available information should be consulted for other important information about the Company.

 

Information contained herein, including Exhibit 99.1, shall not be deemed filed for the purposes of the Securities Exchange Act of 1934, nor shall such information and Exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such a filing.

 

2


 

Item 9.01  Financial Statements and Exhibits.

 

(d)         Exhibits.

 

Exhibit No.

 

Description

 

 

 

99.1

 

Investor Presentation of TCF Financial Corporation,
dated April 26, 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 hereunto 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)

 

Date:       April 26, 2010

 

3

 

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

 

Exhibit 99.1

 

TCF Financial Corporation

2010 First Quarter Investor Presentation

Built on convenience, stability and trust.

 

1.)                                  Corporate Profile

 

At March 31, 2010

 

·                  $18.2 billion financial holding company headquartered in Minnesota

 

·                  34th largest publicly traded U.S. based bank by asset size

 

·                  441 bank branches in eight states, 70 branches opened since January 1, 2005

 

·                  25th largest U.S. branch network

 

·                  Nine campus alliances; 5th largest in campus card banking relationships

 

·                  1,626 ATMs free to TCF customers; 1,141 off-site

 

·                  11th largest issuer of Visa® Classic debit cards

 

·                  11th largest issuer of Visa Commercial debit cards

 

·                  15th largest bank affiliated leasing company in the U.S.

 

·                  Total equity to total assets of 7.66%

 

·                  Tangible realized common equity of 6.87% 1

 

·                  60th consecutive quarter of profitability

 

Branches by State

 

Minnesota

 

110

 

Illinois

 

200

 

Michigan

 

56

 

Colorado

 

36

 

Wisconsin

 

26

 

Arizona

 

7

 

Indiana

 

5

 

South Dakota

 

1

 

Total

 

441

 

 

Well-Diversified Loan Portfolio

($ millions)

 

 

 

12/31/99

 

% of Total

 

3/31/10

 

% of Total

 

 

 

 

 

 

 

 

 

 

 

Consumer Lending

 

$

5,978

 

76

%

$

7,296

 

50

%

Commercial Lending

 

1,425

 

18

 

3,703

 

25

 

Leasing

 

493

 

6

 

3,007

 

20

 

Inventory Finance

 

 

 

700

 

5

 

Total

 

$

7,896

 

100

%

$

14,706

 

100

%

 

1                   See “Reconciliation of GAAP to Non-GAAP Measures” slide


 

2.)                                  What Makes TCF Different

 

At March 31, 2010

 

·      Convenience

TCF banks a large and diverse customer base by offering a host of convenient banking services:

·                  Traditional, supermarket and campus branches open seven days a week

·                  Free debit cards, free coin counting and 1,626 free ATMs

·                  TCF Totally Free Online banking

 

·      Credit Quality

TCF is primarily a secured portfolio lender, emphasizing credit quality over asset growth

 

·      Core deposit funding for national diverse lending platform

·                  Grew core deposits by $1.4 billion year-over-year; decreased total certificate of deposit balance by $1.1 billion year-over-year

·                  Grew nationally-oriented specialty finance businesses by $809.2 million year-over-year

 

3.)           What Makes TCF Different

 

·      No teaser rate or subprime lending programs

 

·      No option ARM loans

 

·      No asset-backed commercial paper

 

·      No Freddie Mac or Fannie Mae preferred stock

 

·      No non-agency mortgage-backed securities

 

·      No off-balance sheet funding or securitizations

 

·      No auto lease portfolio

 

·      No bank-owned life insurance

 

·      No structured investment vehicles (SIVs)

 

·      No mortgage servicing rights

 

·      No brokered deposits

 

·      No derivatives

 


 

4.)           Diversified Revenue Base

 

At March 31, 2010

 

Good Revenue Growth +15%*

($ millions)

 

 

 

12/06

 

12/07

 

12/08

 

12/09

 

3/10

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income

 

$

538

 

$

550

 

$

594

 

$

633

 

$

175

 

Non-interest Income

 

489

 

541

 

498

 

526

 

122

 

Total

 

$

1,027

 

$

1,092

 

$

1,092

 

$

1,159

 

$

297

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Strong Net Interest Margin

 

 

 

 

 

 

 

 

 

 

 

(Percent)

 

 

 

 

 

 

 

 

 

 

 

 

 

2006

 

2007

 

2008

 

2009

 

2010

 

TCF, 4.20%

 

 

 

 

 

 

 

 

 

 

 

First Quarter

 

4.25

 

4.00

 

3.84

 

3.66

 

4.20

 

Second Quarter

 

4.22

 

4.02

 

4.00

 

3.80

 

 

 

Third Quarter

 

4.11

 

3.90

 

3.97

 

3.92

 

 

 

Fourth Quarter

 

4.07

 

3.83

 

3.84

 

4.07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

KBW Regional Banking

 

 

 

 

 

 

 

 

 

 

 

Index Median, 3.68%2

 

 

 

 

 

 

 

 

 

 

 

First Quarter

 

3.79

 

3.66

 

3.61

 

3.49

 

 

 

Second Quarter

 

3.84

 

3.69

 

3.64

 

3.57

 

 

 

Third Quarter

 

3.81

 

3.68

 

3.64

 

3.64

 

 

 

Fourth Quarter

 

3.70

 

3.69

 

3.65

 

3.68

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Strong Mix of Fee Revenues1

 

 

 

 

 

 

 

 

 

 

 

($ millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

3/10

 

% of Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Banking Fees and Service Charges

 

$

66

 

54

%

 

 

 

 

 

 

Card Revenue

 

27

 

22

 

 

 

 

 

 

 

Specialty Finance

 

22

 

18

 

 

 

 

 

 

 

ATM Revenue

 

7

 

6

 

 

 

 

 

 

 

Other

 

1

 

N.A.

 

 

 

 

 

 

 

Total

 

$

123

 

100

%

 

 

 

 

 

 

 

*      Twelve-month growth rate

1      Year-to-date

2      As of December 31, 2009


 

5.)           Strong Deposit Franchise

Quarterly Average Balances +6%*

($ millions)

 

 

 

12/06

 

12/07

 

12/08

 

12/09

 

3/10

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking

 

$

4,141

 

$

3,981

 

$

3,914

 

$

4,116

 

$

4,407

 

Savings

 

2,321

 

2,596

 

2,861

 

5,231

 

5,363

 

Money Market

 

594

 

598

 

625

 

672

 

669

 

Certificates of Deposit

 

2,471

 

2,307

 

2,449

 

1,367

 

1,127

 

Total

 

$

9,527

 

$

9,482

 

$

9,849

 

$

11,386

 

$

11,566

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Rate1:

 

2.33

%

2.29

%

1.51

%

.74

%

.62

%

 

*      Twelve-month growth rate

1          Quarter-to-date (annualized)

 

6.)           Deposit Strategies

 

·                  Earn a significant portion of our profits from the deposit side of the bank

 

·                  Branch location strategy is great retail locations in densely populated suburban/metro markets

 

·                  Accumulate a large number of low-cost core accounts by offering convenient, competitive and diversified products and services

 

·                  Low cost checking accounts are the anchor account used to build additional customer relationships

 

·                  Convenience oriented - open longer hours, 7 days a week

 

7.)           Significant Liquidity & Borrowing Capacity

 

At March 31, 2010

 

·                  TCF has unused, secured borrowing capacity from the following sources:

 

·                  $2.2 billion in secured borrowing capacity at the Federal Home Loan Bank of Des Moines

 

·                  $517 million of secured borrowing capacity at the Federal Reserve Discount Window

 

8.)           Banking Fees and Other Revenue 1 +12%*

($ millions)

 

 

 

Growing and Sustainable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2006

 

2007

 

2008

 

2009

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

First Quarter

 

$

92

 

$

94

 

$

96

 

$

90

 

$

100

 

Second Quarter

 

104

 

106

 

103

 

112

 

 

 

Third Quarter

 

105

 

107

 

107

 

111

 

 

 

Fourth Quarter

 

99

 

106

 

100

 

109

 

 

 

Total

 

$

400

 

$

413

 

$

406

 

$

422

 

$

100

 

 

1      Consisting of fees and service charges, card revenue and ATM revenue

*      Twelve-month growth rate

 

9.)           Proactive Deposit Fee Initiatives

 

·                  New Federal Reserve regulation prohibits financial institutions from charging NSF fees on certain transactions unless customers opt-in

 

·                  Currently educating new and existing customers on the benefits of opting-in

 

·                  Replaced Totally Free Checking with new anchor account during the first quarter of 2010

·                  Monthly maintenance fee on accounts not meeting certain minimum balance requirements or having a direct deposit

 

·                  Goal is to remain revenue neutral for 2010

 


 

10.)                           Card Revenue +9%*
($ millions)

 

 

 

2006

 

2007

 

2008

 

2009

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Quarter

 

$

21.3

 

$

23.3

 

$

24.8

 

$

25.0

 

$

27.1

 

 

Second Quarter

 

22.9

 

24.9

 

26.8

 

26.6

 

 

 

 

Third Quarter

 

24.4

 

25.6

 

26.2

 

26.4

 

 

 

 

Fourth Quarter

 

23.5

 

25.1

 

25.3

 

26.8

 

 

 

 

Total

 

$

92.1

 

$

98.9

 

$

103.1

 

$

104.8

 

$

27.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales Volume:

 

$

6,465

 

$

6,949

 

$

7,280

 

$

7,308

 

$

1,902

 

1

Average Interchange Rate:

 

1.36

%

1.35

%

1.34

%

1.34

%

1.34

%

1

 

At March 31, 2010

 

·                  11th largest issuer of Visa Classic debit cards

 

·                  11th largest issuer of Visa Commercial debit cards

 

·                  $1.9 billion in sales volume, up 8.6%1

 

·                  20.6 transactions per month on active cards, up 4% 1

 

·                  61% of transactions were for less than $25

 

·                  Interchange fees paid by merchants, not customers

 

·                  Potential interchange legislation would likely result in fees being paid by customers

 

*                 Twelve-month growth rate

1                   Year-to-date

 

11.)                           Stable Loan Growth +7%*
($ millions)

 

 

 

Diverse Products and Geographies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/06

 

12/07

 

12/08

 

12/09

 

3/10

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Lending

 

$

6,717

 

$

7,274

 

$

7,364

 

$

7,332

 

$

7,296

 

Commerical Lending

 

2,943

 

3,116

 

3,491

 

3,719

 

3,703

 

Leasing and Equipment Finance

 

1,818

 

2,104

 

2,486

 

3,071

 

3,007

 

Inventory Finance

 

 

 

5

 

469

 

700

 

Total

 

$

11,478

 

$

12,494

 

$

13,346

 

$

14,591

 

$

14,706

 

 

*                 Twelve-month growth rate

 


 

12.)                           Commercial Lending +5%*
($ millions)

 

 

 

Secured Lending Philosophy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/06

 

12/07

 

12/08

 

12/09

 

3/10

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Real Estate

 

$

2,391

 

$

2,558

 

$

2,984

 

$

3,269

 

$

3,281

 

Commercial Business

 

552

 

558

 

507

 

450

 

422

 

Total

 

$

2,943

 

$

3,116

 

$

3,491

 

$

3,719

 

$

3,703

 

 

At March 31, 2010

 

·                  Commercial real estate — $3.3 billion

·                  26% retail services

·                  20% apartment loans

·                  19% office buildings

·                  15% industrial buildings

·                  2% residential development and construction

 

·                  Commercial business — $422 million

 

·                  Commercial highlights

 

·                  5.66% average yield

·                  85.6% fixed rate, 14.4% variable rate

·                  Over 60-day delinquency rate .00% 1

 

·

Net charge-offs:

 

2010

 

2009

 

2008

 

 

 

 

 

.85% 2

 

1.24%

 

.54%

 

·                  Approximately 99% of all commercial loans secured

·                  CRE location mix: 93% TCF Banking Markets, 7% Other

·                  Michigan exposure is $805 million

 

*                 Twelve-month growth rate

1                   Excludes non-accrual loans

2                   Annualized

 

13.)                           Leasing and Equipment Finance 1 +9%*
($ millions)

 

 

 

Growth Opportunities Still Exist

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/06

 

12/07

 

12/08

 

12/09

 

3/10

 

 

 

 

 

 

 

 

 

 

 

 

 

Leasing and Equipment Finance

 

$

1,899

 

$

2,175

 

$

2,545

 

$

3,177

 

$

3,107

 

 

At March 31, 2010

 

·                  15th largest bank affiliated leasing company in the U.S.

 

·                  32nd largest equipment finance/leasing company in the U.S.

 

·                  Diverse equipment types

·                  18% specialty vehicles

·                  15% manufacturing

·                  15% medical

·                  13% construction

 

·                  6.57% average yield

 

·                  Uninstalled backlog of $361.6 million

 

·                  Over 60-day delinquency rate .39% 2

 

 

·

Net charge-offs:

2010

 

2009

 

2008

 

 

 

 

.87% 3

 

.97%

 

.50%

 

 

*                 Twelve-month growth rate

1                   Includes operating leases ($99.1 million at March 31, 2010)

2                   Excludes non-accrual loans and leases

3                   Annualized

 


 

14.)                           TCF Inventory Finance
($ millions)

 

 

 

Experienced and Seasoned

 

 

 

 

 

 

 

 

Management

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3/09

 

6/09

 

9/09

 

12/09

 

3/10

 

 

 

 

 

 

 

 

 

 

 

 

 

Electronics & Appliances

 

$

100.6

 

$

118.3

 

$

128.4

 

$

122.3

 

$

119.6

 

Lawn & Garden

 

 

38.9

 

96.4

 

346.5

 

580.8

 

Total

 

$

100.6

 

$

157.2

 

$

224.8

 

$

468.8

 

$

700.4

 

 

At March 31, 2010

 

·                  Inventory floorplan finance business with a focus on lawn and garden products, consumer electronics, and household appliances

 

·                  Operates primarily in the U.S. with a presence in Canada

 

·                  236 employees

 

·                  100% variable rate receivables

 

·                  Average yield 7.33%

 

 

·

Net charge-offs:

 

 

2010

 

2009

 

 

 

 

 

 

.31% 1

 

.10%

 

 

·                  Credit support from equipment manufacturers

 

1          Annualized

 

15.)                           Wholesale Banking1 Credit Quality
Quarter-to-Date
($ millions)

 

 

 

6/09

 

9/09

 

12/09

 

3/10

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs 2:

 

 

 

 

 

 

 

 

 

Commercial

 

2.17

%

1.23

%

.79

%

.85

%

Specialty finance

 

.76

%

1.27

%

.91

%

.79

%

Total wholesale banking

 

1.53

%

1.25

%

.84

%

.82

%

Over 60-day delinquencies 3

 

.31

%

.39

%

.32

%

.27

%

Non-accrual loans and leases

 

$

144.8

 

$

150.1

 

$

157.0

 

$

157.4

 

Other real estate owned/
 repossessed assets

 

$

24.1

 

$

20.8

 

$

38.8

 

$

36.1

 

 

1                   Includes commercial banking and specialty finance

2                   Annualized

3                   Excludes non-accrual loans and leases

 

16.)                           Classified Commercial Loans and Leases 1
($ millions)

 

 

 

3/09

 

6/09

 

9/09

 

12/09

 

3/10

 

 

 

 

 

 

 

 

 

 

 

 

 

Classified Commercial Loans and Leases

 

$

240

 

$

213

 

$

329

 

$

370

 

$

435

 

 

At March 31, 2010

 

·                  By type

·                  Commercial real estate — $348.8 million

·                  Up 21% from December 31, 2009

·                  Commercial business — $46.4 million

·                  Up 9% from December 31, 2009

·                  Leasing and equipment finance — $40 million

·                  Up 2% from December 31, 2009

 

·                  Over 60-day delinquency rate 1.50% 2

 

1                   See “Source References and Footnotes” slide for a detailed description of classified commercial loans and leases

2                   As a percent of classified commercial loans and leases

 


 

17.)                           Consumer Real Estate
($ millions)

 

 

 

12/06

 

12/07

 

12/08

 

12/09

 

3/10

 

 

 

 

 

 

 

 

 

 

 

 

 

First Mortgages

 

$

4,409

 

$

4,707

 

$

4,882

 

$

4,962

 

$

4,940

 

Junior Liens

 

2,101

 

2,344

 

2,420

 

2,319

 

2,307

 

Total

 

$

6,510

 

$

7,051

 

$

7,302

 

$

7,281

 

$

7,247

 

 

At March 31, 2010

 

·                  68.2% first mortgages, average loan amount of $117,009

 

·                  31.8% junior lien positions, average loan amount of $36,360

 

·                  72.1% fixed rate, 27.9% variable rate

 

·                  Average home value of $251,1331

 

·                  6.08% average yield

 

·                  Over 60-day delinquency rate 1.45%2

 

 

·

Net charge-offs:

2010

 

2009

 

2008

 

 

 

 

1.61%3

 

1.46%

 

.86%

 

 

·                  Average FICO score at origination 725

 

·                  Michigan exposure is $1 billion

 

1                   Based on value at origination

2                   Excludes non-accrual loans

3                   Annualized

 

18.)                           Consumer Real Estate Credit Quality
Quarter-to-Date
($ millions)

 

 

 

6/09

 

9/09

 

12/09

 

3/10

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs 1:

 

 

 

 

 

 

 

 

 

First mortgage lien

 

.96

%

1.27

%

1.34

%

1.32

%

Junior lien

 

1.90

%

2.44

%

2.54

%

2.25

%

Total

 

1.26

%

1.65

%

1.73

%

1.61

%

Over 60-day delinquencies 2

 

1.09

%

1.33

%

1.16

%

1.45

%

Non-accrual loans

 

$

95.0

 

$

118.6

 

$

139.2

 

$

147.9

 

Other real estate owned

 

$

72.7

 

$

73.4

 

$

67.0

 

$

65.3

 

Accruing restructured loans 2

 

$

51.5

 

$

159.9

 

$

252.5

 

$

285.6

 

 

1                   Annualized

2                   Excludes non-accrual loans

 

19.)                           Restructured Consumer Real Estate Loans

 

·                  Loans modified to assist customers with their financial hardship by lowering their monthly loan payments through a reduced interest rate for up to 18 months

 

·                  Modified $41.1 million of consumer real estate loans in the first quarter of 2010 that are considered restructured loans which continue to accrue interest

 

·                  Reserved for based on present value of expected cash flows, currently $30 million, or 10.5%

 

·                  The over 60-day delinquency rate was 4.33% at March 31, 2010

 

·                  TCF’s current modification program started in August 2009 and represents 75% of the March 31, 2010 balance

 


 

20.)                           Seasonally Adjusted Home Price Trends

 

 

 

August

 

September

 

October

 

November

 

December

 

January

 

 

 

2009

 

2009

 

2009

 

2009

 

2009

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minneapolis

 

1.9

%

.9

%

.2

%

.2

%

.3

%

.7

%

Chicago

 

1.0

 

1.2

 

(1.1

)

(.7

)

(.7

)

(.8

)

Detroit

 

1.0

 

.9

 

1.3

 

(.3

)

.2

 

.1

 

Denver

 

1.0

 

(.4

)

.4

 

.3

 

 

.1

 

Phoenix

 

.7

 

.8

 

1.0

 

1.6

 

1.2

 

.8

 

 

·                  Seasonally adjusted home prices have improved recently in all TCF markets, with the exception of Chicago.

 

21.)                           Loan and Lease Geographic Diversification
($000s)

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

Consumer

 

Real Estate

 

Leasing and

 

 

 

 

 

 

 

Real Estate

 

& Commercial

 

Equipment

 

Inventory

 

 

 

At March 31, 2010:

 

& Other

 

Business

 

Finance

 

Finance

 

Total

 

Minnesota

 

$

2,819,381

 

$

941,847

 

$

76,222

 

$

42,870

 

$

3,880,320

 

Illinois

 

2,212,629

 

936,962

 

108,008

 

31,883

 

3,289,482

 

Michigan

 

1,125,289

 

805,278

 

108,250

 

24,536

 

2,063,353

 

Wisconsin

 

498,599

 

500,351

 

50,668

 

23,068

 

1,072,686

 

Colorado

 

517,569

 

123,255

 

47,802

 

6,254

 

694,880

 

California

 

9,549

 

18,564

 

378,333

 

15,614

 

422,060

 

Florida

 

4,293

 

59,036

 

190,916

 

28,398

 

282,643

 

Texas

 

2,122

 

2,933

 

239,540

 

27,906

 

272,501

 

Ohio

 

3,692

 

54,122

 

117,002

 

37,088

 

211,904

 

New York

 

3,641

 

4,529

 

167,418

 

35,129

 

210,717

 

Indiana

 

24,501

 

72,697

 

58,685

 

21,753

 

177,636

 

Arizona

 

55,657

 

36,694

 

72,715

 

7,952

 

173,018

 

Other

 

18,843

 

146,465

 

1,391,945

 

397,970

 

1,955,223

 

Total

 

$

7,295,765

 

$

3,702,733

 

$

3,007,504

 

$

700,421

 

$

14,706,423

 

 

22.)                           Allowance for Loan & Lease Losses
($ millions)

 

 

 

12/06

 

 

12/07

 

 

12/08

 

 

12/09

 

 

3/10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Loan & Lease Losses

 

$

58.5

 

 

$

80.9

 

 

$

172.4

 

 

$

244.5

 

1 

$

250.4

 

2 

Net Charge-Offs

 

.16

%

 

.29

%

 

.78

%

 

1.34

%

 

1.22

%

3 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance as a % of
period end loans & leases

 

.51

%

 

.65

%

 

1.29

%

 

1.68

%

 

1.70

%

 

Coverage ratio

 

3.3

X

 

2.3

X

 

1.7

X

 

1.3

X

 

1.4

X

3 

 

1                   Excludes $10.2 million in reserves netted against acquired equipment finance portfolio balances

2                   Excludes $8 million in reserves netted against acquired equipment finance portfolio balances

3                   Annualized

 

23.)                           Net Charge-Offs and Provision
($ millions)

 

 

 

3/09

 

6/09

 

9/09

 

12/09

 

3/10

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Charge-Offs

 

$

34.9

 

$

49.7

 

$

53.3

 

$

48.7

 

$

44.5

 

Provision

 

$

43.7

 

$

61.9

 

$

75.5

 

$

77.4

 

$

50.5

 

Provision Exceeding NCOs

 

25

%

25

%

42

%

59

%

13

%

 

24.)                           Credit Trends
(Percent)

 

 

 

6/08

 

9/08

 

12/08

 

3/09

 

6/09

 

9/09

 

12/09

 

3/10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Charge-Offs 1

 

.84

%

.82

%

1.02

%

1.04

%

1.43

%

1.52

%

1.35

%

1.22

%

Over 60-day Delinquencies

 

.55

%

.54

%

.60

%

.60

%

.72

%

.81

%

.69

%

.82

%

 

1                   Annualized


 

25.)                           Non-Performing Assets
($ millions)

 

 

 

12/06

 

12/07

 

12/08

 

12/09

 

3/10

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Accrual Loans & Leases

 

$

43.2

 

$

59.8

 

$

172.5

 

$

296.3

 

$

305.4

 

Properties in Foreclosure

 

12.3

 

31.1

 

37.6

 

59.4

 

56.8

 

Properties Owned

 

10.1

 

14.7

 

24.1

 

46.3

 

44.6

 

Total

 

$

65.6

 

$

105.6

 

$

234.2

 

$

402.0

 

$

406.8

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential properties owned
Number:

 

95

 

137

 

187

 

298

 

350

 

 

26.)                           Net Charge-Offs1 vs. Other Banks
(Percent)

 

 

 

2006

 

2007

 

2008

 

2009

 

2010 2

 

 

 

 

 

 

 

 

 

 

 

 

 

TCF

 

.16

%

.29

%

.78

%

1.34

%

1.22

%

Bank of America

 

.68

 

.81

 

1.72

 

3.42

 

4.19

 

US Bancorp

 

.38

 

.52

 

1.07

 

2.02

 

2.31

 

Wells Fargo

 

.64

 

.93

 

1.84

 

2.10

 

2.55

 

JP Morgan Chase

 

.67

 

.95

 

1.67

 

3.36

 

4.36

 

KeyCorp

 

.25

 

.38

 

1.52

 

3.37

 

3.60

 

PNC

 

.27

 

.31

 

.72

 

1.60

 

1.71

 

 

1                   As a percent of average loans & leases

2                   YTD as of March 31, 2010 (annualized)

 

27.)                           Non-Accrual Loans & Leases
($ millions)

 

 

 

 

 

 

 

Leasing and

 

 

 

 

 

 

 

Consumer

 

Commercial

 

Equipment

 

Inventory

 

 

 

YTD March 31, 2010:

 

Real Estate

 

Lending

 

Finance

 

Finance

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

139.3

 

$

106.2

 

$

50.0

 

$

.8

 

$

296.3

 

Additions

 

54.6

 

5.0

 

22.6

 

2.0

 

84.2

 

Charge-offs

 

(11.0

)

(6.8

)

(5.7

)

 

(23.5

)

Transfers to other assets

 

(22.8

)

(.5

)

(6.2

)

(.1

)

(29.6

)

Return to accrual status

 

(9.0

)

 

(.4

)

(1.7

)

(11.1

)

Payments received

 

(1.4

)

(5.0

)

(6.2

)

(.1

)

(12.7

)

Other, net

 

(1.7

)

3.5

 

 

 

1.8

 

Balance, end of period

 

$

148.0

 

$

102.4

 

$

54.1

 

$

.9

 

$

305.4

 

Net change

 

$

8.7

 

$

(3.8

)

$

4.1

 

$

.1

 

$

9.1

 

 

28.)                           Summary of Non-Accrual Loans
($ millions)

 

 

 

 

 

Charge-offs and

 

 

 

Charge-offs and Allowance

 

 

 

Contractual

 

Allowance

 

Net

 

Recorded as a % of

 

At March 31, 2010:

 

Balance

 

Recorded

 

Exposure

 

Contractual Balance

 

 

 

 

 

 

 

 

 

 

 

Consumer real estate

 

$

184.8

 

$

37.9

 

$

146.9

 

20.5

%

 

Commercial lending

 

136.9

 

39.2

 

97.7

 

28.6

 

 

Leasing and equipment finance

 

54.1

 

15.6

 

38.5

 

28.7

 

 

Inventory finance

 

.9

 

 

.9

 

2.9

 

 

Total

 

$

376.7

 

$

92.7

 

$

284.0

 

24.6

 

 


 

29.)                           Summary of Real Estate Owned
($ millions)

 

 

 

 

 

 

 

 

 

Charge-offs and Writedowns

 

 

 

Contractual Loan

 

 

 

 

 

Recorded as a % of

 

 

 

Balance Prior to

 

Charge-offs and

 

Other Real

 

Contractual Loan Balance

 

 

 

Non-performing

 

Writedowns

 

Estate Owned

 

Prior to Non-performing

 

At March 31, 2010:

 

Status

 

Recorded

 

Balance

 

Status

 

 

 

 

 

 

 

 

 

 

 

Consumer

 

$

93.1

 

$

27.8

 

$

65.3

 

29.9%

 

Commercial

 

55.0

 

18.8

 

36.1

 

34.2

 

Total

 

$

148.1

 

$

46.6

 

$

101.4

 

31.5

 

 

30.)                           Real Estate Owned
($ millions)

 

YTD March 31, 2010:

 

Consumer

 

Commercial

 

Total

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

67.0

 

$

38.8

 

$

105.8

 

Transferred in

 

27.7

 

.5

 

28.2

 

Sales

 

(23.4

)

(1.8

)

(25.2

)

Writedowns

 

(3.7

)

(.4

)

(4.1

)

Other, net

 

(2.3

)

(1.0

)

(3.3

)

Balance, end of period

 

$

65.3

 

$

36.1

 

$

101.4

 

Net change

 

$

(1.7

)

$

(2.7

)

$

(4.4

)

 

31.)                           Capital Ratios
($ millions)

 

 

 

12/06

 

12/07

 

12/08

 

12/09

 

3/10

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible Realized Common Equity

 

$

915

 

$

964

 

$

996

 

$

1,040

 

$

1,240

 

Tangible Realized Common Equity Ratio 1

 

6.30

%

6.09

%

6.01

%

5.86

%

6.87

%

 

At March 31, 2010

 

·                  Other Capital Ratios

·                  Total equity to total assets — 7.66%

 

·                  Tier 1 common capital — 9.05%

 

·                  Tier 1 leverage capital — 7.67%

 

·                  Tier 1 risk-based capital —9.98%

 

·                  Total risk-based capital — 12.49%

·                  Excess of $341 million over well-capitalized requirement

 

1          See “Reconciliation of GAAP to Non-GAAP Measures” slide

 

32.)         Common Equity Stock Offering Transaction Rationale

 

·                  Numerous opportunities from ongoing market dislocation

·                  Current business expansion

·                  Portfolio acquisitions

 

·                  Further enhancement of capital position

·                  Proactive raise in anticipation of rising industry standards

·                  Provides flexibility to prudently pursue expansion opportunities

·                  Enhanced capacity for non-dilutive capital

 

·                  Ability to enhance franchise value

·                  Potential strategic merger and acquisition opportunities including FDIC-assisted transactions


 

33.)         Well-Positioned for Future Success

 

·                  An experienced and tenured management team

 

·                  “New” industry approach of portfolio lending funded with retail deposits has been a part of TCF’s business philosophy for many years

 

·                  New management structure improves execution and reduces overhead

 

·                  Strong wholesale banking management team will enable profitable growth

 

·                  High-quality capital to operate in an expansive mode

 

·                  Core profitability is still very high when credit costs normalize


 

34.)                           Reconciliation of GAAP to Non-GAAP Measures1
($000s)

 

 

 

March 31, 2010

Computation of total equity to total assets:

 

 

 

Total equity

 

$

1,393,617

 

Total assets

 

$

18,187,314

 

Total equity to total assets

 

7.66

%

 

 

 

 

Computation of tangible realized common equity to tangible assets:

 

 

 

Total equity

 

$

1,393,617

 

Less: Non-controlling interest in subsidiaries

 

11,797

 

Total TCF stockholders’ equity

 

1,381,820

 

Less:

 

 

 

Goodwill

 

152,599

 

Other intangibles

 

1,361

 

Add:

 

 

 

Accumulated other comprehensive loss

 

11,836

 

Tangible realized common equity

 

$

1,239,696

 

 

 

 

 

Total assets

 

$

18,187,314

 

Less:

 

 

 

Goodwill

 

152,599

 

Other intangibles

 

1,361

 

Tangible assets

 

$

18,033,354

 

 

 

 

 

Tangible realized common equity to tangible assets

 

6.87

%

 

1                   In contrast to GAAP-basis measures, tangible realized common equity excludes the effect of goodwill, other intangibles and accumulated other comprehensive income (loss). Management reviews tangible realized common equity as an ongoing measure and has included this information because of current interest in the industry.  The methodology for calculating tangible realized common equity may vary between companies.

 

35.)                           Cautionary Statement

 

This presentation 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; interest rate risks resulting from fluctuations in prevailing interest rates or other factors that result in a mismatch between yields earned on TCF’s interest-earning assets and the rates paid on its deposits and borrowings.

* 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 of 2008, 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; costs associated with new regulatory requirements or interpretive guidance relating to liquidity.

* 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; (continued)


 

36.)                           Cautionary Statement (continued)

 

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); increased health care costs resulting from recently enacted Federal health care reform legislation; 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.

* Risks Relating to New Product Introduction. TCF has recently introduced a new anchor retail deposit account product that replaces TCF Totally Free Checking, and that calls for a monthly maintenance fee on accounts not meeting certain specific requirements. TCF is also in the process of implementing new regulatory requirements that prohibit financial institutions from charging NSF fees on point-of-sale and ATM transactions unless customers opt-in. Customer acceptance of the new product changes and regulatory requirements cannot be predicted with certainty, and these changes may have an adverse impact on TCF’s ability to generate and retain accounts and on its fee revenue.

* 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, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K for additional important information about the Company.

 

37.)                           Source References and Footnotes

 

Slide: Corporate Profile

34th largest U.S. bank - Ipreo; 12/31/09

25th largest branch network - SNL Financial, LC; 1Q10

5th largest in campus card relationships - CR80News; Spring 2009

11th largest issuer of Visa Classic - Visa; 4Q09; ranked by sales volume

11th largest issuer of Visa Commercial - Visa; 4Q09; ranked by sales volume

15th largest bank affiliated leasing company - 2009 Monitor Bank 25

 

Slide: Diversified Revenue Base

KBW Regional Banking Index net interest margin data - KBW & SNL Financial LC; 12/31/09

 

Slide: Card Revenue

11th largest issuer of Visa Classic - Visa; 4Q09; ranked by sales volume

11th largest issuer of Visa Commercial - Visa; 4Q09; ranked by sales volume

 

Slide: Leasing and Equipment Finance

15th largest bank affiliated leasing company - 2009 Monitor Bank 25

32nd largest equipment finance/leasing company - The Monitor; 2009 Monitor 100

 

Slide: Classified Commercial Loans and Leases

Classified commercial loans and leases excludes non-accrual loans and leases, over 90-day delinquent loans and leases, real estate owned, and repossessed assets and includes commercial loans and leases primarily classified for regulatory purposes as substandard and reflect the distinct possibility, but not probability, that they will become non-performing or that TCF will not be able to collect all amounts due according to the contractual terms of the loan or lease agreement

 

Slide: Seasonally Adjusted Home Price Trends

Home price data - S&P/Case-Schiller Home Price Index

 

Slide: Net Charge-Offs vs. Other Banks

Net charge-off data - SNL Financial, LC; 3/31/10

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