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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): July 21, 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 second 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 July 21, 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 second 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 July 21, 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 www.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 July 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 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:    July 21, 2010

 

3

 

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

 

Exhibit 99.1

 

TCF Financial Corporation

2010 Second Quarter Investor Presentation

Built on convenience, stability and trust.

 

1.)                                  Corporate Profile

 

At June 30, 2010

 

·                  $18 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

 

·                  24th largest U.S. branch network

 

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

 

·                  At July 7, 2010, 982 ATMs free to TCF customers; 496 off-site

 

·                  10th largest issuer of Visa® Classic debit cards

 

·                  12th largest issuer of Visa Commercial debit cards

 

·                  13th largest bank-affiliated leasing company in the U.S.

 

·                  Total equity to total assets of 8.18%

 

·                  Tangible realized common equity of 7.18% 1

 

·                  61st 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

 

6/30/10

 

% of Total

 

 

 

 

 

 

 

 

 

 

 

Consumer Lending

 

$

5,978

 

76

%

$

7,289

 

50

%

Commercial Lending

 

1,425

 

18

 

3,706

 

25

 

Leasing

 

493

 

6

 

3,000

 

21

 

Inventory Finance

 

 

 

645

 

4

 

Total

 

$

7,896

 

100

%

$

14,640

 

100

%

 

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


 

2.)                                  What Makes TCF Different

 

At June 30, 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 982 free ATMs at July 7, 2010

·                  TCF 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 $805.9 million year-over-year; decreased total certificate of deposit balances by $901.9 million year-over-year

·                  Grew nationally-oriented specialty finance businesses by $664.4 million year-over-year


 

3.)           What Makes TCF Different (continued)

 

·      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

 


 

4.)                                  Diversified Revenue Base

 

At June 30, 2010

 

Good Revenue Growth +5%*

 

 

 

 

 

 

 

 

 

 

 

($ millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/06

 

12/07

 

12/08

 

12/09

 

6/10

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income

 

$

538

 

$

550

 

$

594

 

$

633

 

$

351

 

Non-interest Income

 

489

 

542

 

498

 

526

 

259

 

Total

 

$

1,027

 

$

1,092

 

$

1,092

 

$

1,159

 

$

610

 

 

Strong Net Interest Margin

 

 

 

 

 

 

 

 

 

 

 

(Percent)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2006

 

2007

 

2008

 

2009

 

2010

 

TCF, 4.18%

 

 

 

 

 

 

 

 

 

 

 

First Quarter

 

4.25

 

4.00

 

3.84

 

3.66

 

4.20

 

Second Quarter

 

4.22

 

4.02

 

4.00

 

3.80

 

4.18

 

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, 3.71%2

 

 

 

 

 

 

 

 

 

 

 

First Quarter

 

3.79

 

3.66

 

3.61

 

3.49

 

3.71

 

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 Revenues 1

 

 

 

 

 

 

 

 

 

 

 

($ millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6/10

 

% of Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Banking Fees and Service Charges

 

$

144

 

56

%

 

 

 

 

 

 

Card Revenue

 

56

 

21

 

 

 

 

 

 

 

Specialty Finance

 

43

 

17

 

 

 

 

 

 

 

ATM Revenue

 

15

 

6

 

 

 

 

 

 

 

Other

 

1

 

N.M.

 

 

 

 

 

 

 

Total

 

$

259

 

100

%

 

 

 

 

 

 

 

*      Twelve-month growth rate

1      Year-to-date

2      As of March 31, 2010

N.M.- Not Meaningful

 


 

5.)                                  Non-Interest Expense

($ millions)

 

 

 

2Q10

 

2Q09

 

% Change

 

 

 

 

 

Compensation and employee benefits

 

$

87.0

 

$

90.8

 

(4.2

)%

 

 

 

 

Occupancy and equipment

 

31.3

 

31.5

 

(.7

)

 

 

 

 

Deposit account premiums

 

5.5

 

7.3

 

(24.8

)

 

 

 

 

FDIC Premiums

 

5.2

 

4.9

 

5.6

 

 

 

 

 

Advertising and marketing

 

3.7

 

4.1

 

(9.7

)

 

 

 

 

Other

 

35.1

 

36.0

 

(2.8

)

 

 

 

 

Core operating expenses 1

 

167.8

 

174.6

 

(4.0

)

 

 

 

 

Operating lease depreciation

 

9.8

 

3.9

 

154.2

 

 

 

 

 

REO and repossessed assets, net

 

8.8

 

6.4

 

37.0

 

 

 

 

 

Other credit costs, net

 

2.7

 

3.2

 

(15.3

)

 

 

 

 

FDIC special assessment

 

 

8.4

 

(100.0

)

 

 

 

 

Total non-interest expense

 

$

189.1

 

$

196.5

 

(3.8

)%

 

 

 

 

 

1Reduction is net of a $4.8 million increase in core operating expenses due to continued expansion of TCF Inventory Finance.

 


 

6.)                                  Strong Deposit Franchise

Quarterly Average Balances

($ millions)

 

 

 

12/06

 

12/07

 

12/08

 

12/09

 

6/10

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking

 

$

4,141

 

$

3,981

 

$

3,914

 

$

4,116

 

$

4,529

 

Savings

 

2,321

 

2,596

 

2,861

 

5,231

 

5,495

 

Money Market

 

594

 

598

 

625

 

672

 

661

 

Certificates of Deposit

 

2,471

 

2,307

 

2,449

 

1,367

 

1,044

 

Total

 

$

9,527

 

$

9,482

 

$

9,849

 

$

11,386

 

$

11,729

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Rate 1:

 

2.33

%

2.29

%

1.51

%

.74

%

.56

%

 

1    Quarter-to-date (annualized)


 

7.)           Deposit Strategies

 

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

 

·      Branch location strategy emphasizes 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

 


 

8.)           Significant Liquidity & Borrowing Capacity

 

At June 30, 2010

 

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

 

·      Federal Home Loan Bank of Des Moines - $2.2 billion

 

·      Federal Reserve Discount Window - $591 million

 


 

9.)           Banking Fees & Other Revenue 1

($ millions)

 

 

 

2006

 

2007

 

2008

 

2009

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

First Quarter

 

$

92

 

$

94

 

$

96

 

$

90

 

$

100

 

Second Quarter

 

104

 

106

 

103

 

112

 

115

 

Third Quarter

 

105

 

107

 

107

 

111

 

 

Fourth Quarter

 

99

 

106

 

100

 

109

 

 

Total

 

$

400

 

$

413

 

$

406

 

$

422

 

$

215

 

 

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

 


 

10.)         Proactive Deposit Fee Initiatives

 

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

 

·      Continuing to educate new and existing customers on the new opt-in regulation; all accounts are subject to opt-in election on August 15 th

 

·      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 not having a direct deposit

 

·      Goal is to remain revenue neutral for 2010

 


 

11.)                           Card Revenue +8%*
($ 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

 

28.6

 

 

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

 

$

55.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales Volume:

 

$

6,465

 

$

6,949

 

$

7,280

 

$

7,308

 

$

3,850

 

1

Average Interchange Rate:

 

1.36

%

1.35

%

1.34

%

1.34

%

1.37

%

1

 

At June 30, 2010

 

·      10th largest issuer of Visa Classic debit cards

 

·      12th largest issuer of Visa Commercial debit cards

 

·      $3.9 billion in sales volume, up 6.8% 1

 

·      21.5 transactions per month on active cards, up 4.9% 1

 

·      Interchange fees paid by merchants, not customers

 

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

 

*     Twelve-month growth rate

1     Year-to-date

 


 

12.)                           Stable Loan Growth +5%*
($ millions)

 

 

 

Diverse Products and Geographies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/06

 

12/07

 

12/08

 

12/09

 

6/10

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Lending

 

$

6,717

 

$

7,274

 

$

7,364

 

$

7,332

 

$

7,289

 

Commercial Lending

 

2,943

 

3,116

 

3,491

 

3,719

 

3,706

 

Leasing and Equipment Finance

 

1,818

 

2,104

 

2,486

 

3,071

 

3,000

 

Inventory Finance

 

 

 

5

 

469

 

645

 

Total

 

$

11,478

 

$

12,494

 

$

13,346

 

$

14,591

 

$

14,640

 

 

*   Twelve-month growth rate

 


 

13.)         Commercial Lending
($ millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured Lending Philosophy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/06

 

12/07

 

12/08

 

12/09

 

6/10

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Real Estate

 

$

2,391

 

$

2,558

 

$

2,984

 

$

3,269

 

$

3,341

 

Commercial Business

 

552

 

558

 

507

 

450

 

365

 

Total

 

$

2,943

 

$

3,116

 

$

3,491

 

$

3,719

 

$

3,706

 

 

At June 30, 2010

 

·      Commercial real estate — $3.3 billion

·      25% retail services

·      20% apartment loans

·      19% office buildings

·      15% industrial buildings

·      2% residential home builders

 

·      Commercial business — $365 million

 

·      Commercial highlights

 

·      5.62% average yield

·      86% fixed rate, 14% variable rate

·      Over 60-day delinquency rate .22% 1

 

·

Net charge-offs:

2010

 

2009

 

2008

 

 

 

 

.91% 2

 

1.24%

 

.54%

 

·      Approximately 99% of all commercial loans secured

·      CRE location mix: 94% TCF Banking Markets, 6% Other

·      Michigan exposure is $796 million

 

1      Excludes non-accrual loans

2      Annualized

 


 

14.)         Leasing & Equipment Finance 1 +8%*
($ millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Growth Opportunities Still Exist

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/06

 

12/07

 

12/08

 

12/09

 

6/10

 

 

 

 

 

 

 

 

 

 

 

 

 

Leasing and Equipment Finance

 

$

1,899

 

$

2,175

 

$

2,545

 

$

3,177

 

$

3,093

 

 

At June 30, 2010

 

·      13th largest bank-affiliated leasing company in the U.S.

 

·      29th largest equipment finance/leasing company in the U.S.

 

·      Diverse equipment types

·      19% specialty vehicles

·      14% manufacturing

·      14% medical

·      12% construction

 

·      6.54% average yield

 

·      Uninstalled backlog of $348 million

 

·      Unguaranteed residuals of only $110.2 million, or 3.7% of loans and leases

 

·      Over 60-day delinquency rate .23% 2

 

 

·

Net charge-offs:

2010

 

2009

 

2008

 

 

 

 

.93% 3

 

.97%

 

.50%

 

 

*      Twelve-month growth rate

1      Includes operating leases ($92.5 million at June 30, 2010)

2      Excludes non-accrual loans and leases

3      Annualized

 


 

15.)                           TCF Inventory Finance

($ millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Experienced and Seasoned

 

 

 

 

 

 

 

 

Management

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6/09

 

9/09

 

12/09

 

3/10

 

6/10

 

 

 

 

 

 

 

 

 

 

 

 

 

Electronics & Appliances

 

  $

118.3

 

$

128.4

 

$

122.3

 

$

119.6

 

$

122.4

 

Lawn & Garden

 

38.9

 

96.4

 

346.5

 

580.8

 

521.8

 

Total

 

  $

157.2

 

$

224.8

 

$

468.8

 

$

700.4

 

$

644.2

 

 

At June 30, 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

 

·                  239 employees

 

·                  100% variable rate receivables

 

·                  Average yield 7.38%

 

 

·

Net charge-offs:

2010

 

2009

 

 

 

 

 

 

.16% 1

 

.10%

 

 

 

 

·      Credit support from equipment manufacturers

 

·      Credit risk spread across 8,489 active dealers

 

1          Annualized

 


 

16.)                           Wholesale Banking1 Credit Quality

Quarter-to-Date

($ millions)

 

 

 

9/09

 

12/09

 

3/10

 

6/10

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs 2:

 

 

 

 

 

 

 

 

 

Commercial

 

1.23

%

.79

%

.85

%

.98

%

Specialty finance

 

1.27

%

.91

%

.79

%

.82

%

Total wholesale banking

 

1.25

%

.84

%

.82

%

.90

%

Over 60-day delinquencies 3

 

.39

%

.32

%

.27

%

.31

%

Non-accrual loans and leases

 

$

150.1

 

$

157.0

 

$

157.4

 

$

179.1

 

Other real estate owned and
repossessed assets

 

$

41.5

 

$

56.0

 

$

51.7

 

$

48.3

 

 

1                   Includes commercial banking and specialty finance

2                   Annualized

3                   Excludes non-accrual loans and leases


 

17.)

 

Classified Wholesale Loans & Leases 1

 

 

($ millions)

 

 

 

6/09

 

9/09

 

12/09

 

3/10

 

6/10

 

 

 

 

 

 

 

 

 

 

 

 

 

Classified Wholesale Loans and Leases

 

$

213

 

$

329

 

$

370

 

$

435

 

$

439

 

 

At June 30, 2010

 

·      By type

·      Commercial real estate — $343.9 million

·              Up 19.1% from December 31, 2009

·      Commercial business — $52.1 million

·              Up 22.6% from December 31, 2009

·      Leasing and equipment finance — $38.1 million

·              Down 2.3% from December 31, 2009

·      Inventory Finance — $5.2 million

 

·      Over 60-day delinquency rate 2.15% 2

 

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

2                   As a percent of classified wholesale loans and leases

 


 

18.)

 

Consumer Real Estate

 

 

($ millions)

 

 

 

12/06

 

12/07

 

12/08

 

12/09

 

6/10

 

 

 

 

 

 

 

 

 

 

 

 

 

First Mortgages

 

$

4,409

 

$

4,707

 

$

4,882

 

$

4,962

 

$

4,933

 

Junior Liens

 

2,101

 

2,344

 

2,420

 

2,319

 

2,307

 

Total

 

$

6,510

 

$

7,051

 

$

7,302

 

$

7,281

 

$

7,240

 

 

 

At June 30, 2010

 

·      74% first lien positions, average loan amount of $123,127

 

·      26% junior lien positions, average loan amount of $40,519

 

·      70% fixed rate, 30% variable rate

 

·                 $1.9 billion, or 89%, of variable-rate consumer real estate loans were at their contractual interest rate floor at July 1, 2010

 

·      Average home value of $252,9401

 

·      6.02% average yield

 

·      Over 60-day delinquency rate 1.51%2

 

·      Net charge-offs:

2010

 

2009

 

2008

 

1.62%3

 

1.46%

 

.86%

 

·      Average FICO score at origination 726

 

·      Michigan exposure is $1.1 billion

 

·      $2 billion of loans originated since January 1, 2008 with 2010 net charge-offs of .33%3

 

1                   Based on value at origination

2                   Excludes non-accrual loans

3                   Annualized

 


 

19.)         Consumer Real Estate Credit Quality

Quarter-to-Date

($ millions)

 

 

 

9/09

 

12/09

 

3/10

 

6/10

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs 1:

 

 

 

 

 

 

 

 

 

First mortgage lien

 

1.27

%

1.34

%

1.32

%

1.36

%

Junior lien

 

2.44

%

2.54

%

2.25

%

2.20

%

Total

 

1.65

%

1.73

%

1.61

%

1.63

%

Over 60-day delinquencies2

 

1.33

%

1.16

%

1.45

%

1.51

%

Non-accrual loans

 

$

118.6

 

$

139.2

 

$

147.9

 

$

151.0

 

Other real estate owned

 

$

73.4

 

$

67.0

 

$

65.3

 

$

81.9

 

Accruing restructured loans

 

$

159.9

 

$

252.5

 

$

285.6

 

$

297.1

 

 

1      Annualized

2      Excludes non-accrual loans

 


 

20.)         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

 

·      In the second quarter of 2010, modified $23.5 million of consumer real estate loans that are considered restructured loans which continue to accrue interest

 

·      Reserved for based on present value of expected cash flows - $32.9 million, or 11.1% at June 30, 2010

 

·      The over 60-day delinquency rate was 4.30% at June 30, 2010

 

·      TCF’s current modification program started in August 2009 and represents 78.4% of the June 30, 2010 balance

 


 

21.)         Home Price Trends

 

 

 

S&P/Case-Shiller® Home Price Index1

 

 

 

 

 

April

 

April

 

April

 

April

 

Last Year

 

 

 

2007

 

2008

 

2009

 

2010

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

Minneapolis

 

168.5

 

143.1

 

111.8

 

122.5

 

9.6

%

Chicago

 

168.3

 

153.1

 

124.8

 

122.9

 

(1.5

)

Detroit

 

116.3

 

95.6

 

71.5

 

69.4

 

(2.9

)

Denver

 

136.7

 

130.4

 

124.1

 

129.5

 

4.4

 

Phoenix

 

218.5

 

164.4

 

106.6

 

112.4

 

5.5

 

 

1 The S&P/Case-Shiller Home Price Indices track the price path of typical single-family homes located in various metropolitan areas. Each index combines matched price pairs for thousands of individual houses from the available universe of arms-length sales data. The indices have a base value of 100 in January 2000; thus, for example, a current index value of 150 translates to a 50% appreciation rate since January 2000 for a typical home located in the given market.  Data is seasonally adjusted. Source: Standard & Poor’s


 

22.)                           Loan & Lease Geographic Diversification

($000s)

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

Consumer

 

Real Estate

 

Leasing and

 

 

 

 

 

 

 

Real Estate

 

and Commercial

 

Equipment

 

Inventory

 

 

 

At June 30, 2010:

 

and Other

 

Business

 

Finance

 

Finance

 

Total

 

Minnesota

 

$

2,827,708

 

$

917,307

 

$

74,351

 

$

42,815

 

$

3,862,181

 

Illinois

 

2,208,522

 

939,325

 

104,280

 

27,309

 

3,279,436

 

Michigan

 

1,100,453

 

796,407

 

105,424

 

23,008

 

2,025,292

 

Wisconsin

 

492,173

 

541,824

 

50,367

 

19,888

 

1,104,252

 

Colorado

 

546,980

 

126,110

 

44,905

 

4,294

 

722,289

 

California

 

2,947

 

18,425

 

377,799

 

15,852

 

415,023

 

Texas

 

1,967

 

2,802

 

240,352

 

30,307

 

275,428

 

Florida

 

3,858

 

58,779

 

180,487

 

29,377

 

272,501

 

Ohio

 

3,534

 

53,928

 

119,075

 

31,469

 

208,006

 

New York

 

3,620

 

4,205

 

165,092

 

31,438

 

204,355

 

Indiana

 

24,440

 

72,882

 

58,910

 

19,700

 

175,932

 

Arizona

 

55,011

 

36,543

 

72,620

 

7,055

 

171,229

 

Canada

 

 

 

4,091

 

21,612

 

25,703

 

Other

 

18,286

 

137,379

 

1,402,486

 

340,115

 

1,898,266

 

Total

 

$

7,289,499

 

$

3,705,916

 

$

3,000,239

 

$

644,239

 

$

14,639,893

 

 


 

23.)                           Allowance for Loans and Leases 1

($ millions)

 

 

 

12/06

 

12/07

 

12/08

 

12/09

 

6/10

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Loan & Lease Losses

 

$

58.5

 

$

80.9

 

$

172.4

 

$

244.5

 

$

251.6

 

Net Charge-offs

 

.16

%

.29

%

.78

%

1.34

%

1.30

%2

 

 

 

 

 

 

 

 

 

 

 

 

Allowance as a % of

 

 

 

 

 

 

 

 

 

 

 

period end loans & leases:

 

.51

%

.65

%

1.29

%

1.68

%

1.72

%

Coverage ratio:

 

3.3

X

2.3

X

1.7

X

1.3

X

1.3

X2

 

1                   Excludes reserves netted against acquired equipment finance portfolio balances ($10.2 million at 12/09 and $6.9 million at 6/10)

2                   Annualized

 


 

24.)                           Credit Trends

(Percent)

 

 

 

9/08

 

12/08

 

3/09

 

6/09

 

9/09

 

12/09

 

3/10

 

6/10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Charge-offs 1

 

.82

%

1.02

%

1.04

%

1.43

%

1.52

%

1.35

%

1.22

%

1.30

%

Over 60-day Delinquencies

 

.54

%

.60

%

.60

%

.72

%

.81

%

.69

%

.82

%

.87

%

 

1                   Annualized

 


 

25.)                           Non-Performing Assets
($ millions)

 

 

 

6/09

 

9/09

 

12/09

 

3/10

 

6/10

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-accrual Loans & Leases

 

$

239.9

 

$

268.8

 

$

296.3

 

$

305.4

 

$

330.2

 

Properties in Foreclosure

 

46.6

 

41.5

 

59.4

 

56.9

 

64.4

 

Properties Owned

 

50.3

 

52.7

 

46.3

 

44.5

 

53.5

 

Total

 

$

336.8

 

$

363.0

 

$

402.0

 

$

406.8

 

$

448.1

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential properties owned

 

 

 

 

 

 

 

 

 

 

 

Number:

 

269

 

298

 

298

 

350

 

410

 

 


 

26).                           Net Charge-offs 1 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

 

 

 

 

 

Real Estate

 

Lending

 

Finance

 

Finance

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at March 31, 2010

 

$

148.0

 

$

102.4

 

$

54.1

 

$

.9

 

$

305.4

 

Additions

 

59.9

 

51.8

 

12.1

 

1.4

 

125.2

 

Charge-offs

 

(13.9

)

(7.4

)

(6.6

)

 

(27.9

)

Transfers to other assets

 

(27.9

)

(5.7

)

(3.3

)

 

(36.9

)

Return to accrual status

 

(10.6

)

 

(1.4

)

(.6

)

(12.6

)

Payments received

 

(2.7

)

(7.5

)

(6.1

)

(.7

)

(17.0

)

Other, net

 

(1.7

)

(4.3

)

 

 

(6.0

)

Balance at June 30, 2010

 

$

151.1

 

$

129.3

 

$

48.8

 

$

1.0

 

$

330.2

 

Net change

 

$

3.1

 

$

26.9

 

$

(5.3

)

$

.1

 

$

24.8

 

 


 

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

 

 

 

 

 

Charge-offs and

 

 

 

Charge-offs and Allowance

 

 

 

Contractual

 

Allowance

 

Net

 

Recorded as a % of

 

At June 30, 2010:

 

Balance

 

Recorded

 

Exposure

 

Contractual Balance

 

 

 

 

 

 

 

 

 

 

 

Consumer real estate

 

$

191.7

 

$

41.7

 

$

150.0

 

   21.8%

 

Commercial lending

 

161.4

 

43.3

 

118.1

 

26.8

 

Leasing and equipment finance

 

50.1

 

16.0

 

34.1

 

32.0

 

Inventory finance

 

1.0

 

.2

 

.8

 

19.6

 

Total

 

$

404.2

 

$

101.2

 

$

303.0

 

25.0

 

 


 

29.)                           Summary of Real Estate Owned

($ millions)

 

 

 

Contractual Loan

 

 

 

 

 

Charge-offs and Writedowns
Recorded as a % of

 

 

 

Balance Prior to

 

Charge-offs and

 

 

 

Contractual Loan Balance

 

 

 

Non-performing

 

Writedowns

 

Other Real Estate

 

Prior to Non-performing

 

At June 30, 2010:

 

Status

 

Recorded

 

Owned Balance

 

Status

 

 

 

 

 

 

 

 

 

 

 

Consumer

 

$

112.6

 

$

30.7

 

$

81.9

 

27.3%

 

Commercial

 

55.1

 

19.1

 

36.0

 

34.6

 

Total

 

$

167.7

 

$

49.8

 

$

117.9

 

29.7

 

 


 

30.)                           Real Estate Owned

($ millions)

 

 

 

Consumer

 

Commercial

 

Total

 

 

 

 

 

 

 

 

 

Balance at March 31, 2010

 

$

65.3

 

$

36.1

 

$

101.4

 

Transferred in

 

34.5

 

2.8

 

37.3

 

Sales

 

(16.3

)

(.5

)

(16.8

)

Writedowns

 

(2.3

)

(.8

)

(3.1

)

Other, net

 

.7

 

(1.6

)

(.9

)

Balance at June 30, 2010

 

$

81.9

 

$

36.0

 

$

117.9

 

Net change

 

$

16.6

 

$

(.1

)

$

16.5

 

 


 

31.)                           Capital Ratios
($ millions)

 

 

 

12/06

 

12/07

 

12/08

 

12/09

 

6/10

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible Realized Common Equity

 

$

915

 

$

964

 

$

996

 

$

1,040

 

$

1,284

 

Tangible Realized Common Equity Ratio 1

 

6.30

%

6.09

%

6.01

%

5.86

%

7.18

%

 

At June 30, 2010

 

·                  Other Capital Ratios

·                  Total equity to total assets — 8.18%

 

·                  Tier 1 common capital — 9.38%

 

·                  Tier 1 risk-based capital — 10.30%

 

·                  Total risk-based capital — 12.71%

 

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

 


 

32.)                           Well-Positioned for Future Success

 

·                  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 (Wholesale, Retail and Treasury & Support Services) improves execution, reduces overhead and increases our ability to quickly react to changes and new opportunities

 

·                  Strong wholesale banking management team will enable profitable growth

 

·                  Core profitability is still very high when credit costs normalize

 


 

33.)                           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 as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Act”), special assessments or other costs related to deteriorating conditions in the banking industry, the economic impact on banks of the Act, including phase out of trust preferred securities in Tier 1 capital, or additional capital, leverage, liquidity and risk management requirements; other regulatory reform legislation; 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.  The creation of a new consumer protection bureau and limits on Federal preemption of state laws for national banks set forth in the Act; the imposition of requirements with an adverse impact relating to TCF’s lending, loan collection and other business activities as a result of the Act, including the imposition of underwriting or other limitations that impact the ability to use certain variable-rate products, and the reduction of interchange revenue from debit card transactions; other legislative or regulatory developments such as (continued)

 


 

34.)                           Cautionary Statement (continued)

 

mortgage foreclosure moratorium laws; 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 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.

 


 

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

 

 

 

June 30, 2010

Computation of total equity to total assets:

 

 

 

Total equity

 

$

1,474,536

 

Total assets

 

$

18,030,045

 

Total equity to total assets

 

8.18

%

 

 

 

 

Computation of tangible realized common equity to tangible assets:

 

 

 

Total equity

 

$

1,474,536

 

Less: Non-controlling interest in subsidiaries

 

11,603

 

Total TCF stockholders’ equity

 

1,462,933

 

Less:

 

 

 

Accumulated other comprehensive income

 

25,046

 

Goodwill

 

152,599

 

Other intangibles

 

1,318

 

Tangible realized common equity

 

$

1,283,970

 

 

 

 

 

Total assets

 

$

18,030,045

 

Less:

 

 

 

Goodwill

 

152,599

 

Other intangibles

 

1,318

 

Tangible assets

 

$

17,876,128

 

 

 

 

 

Tangible realized common equity to tangible assets

 

7.18

%

 

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.

 


 

36.)                           Source References & Footnotes

 

Slide: Corporate Profile

34th largest U.S. bank - Ipreo; 3/31/10

24th largest branch network - SNL Financial, LC; 2Q10

5th largest in campus card relationships - CR80News; Spring 2010

10th largest issuer of Visa Classic - Visa; 1Q10; ranked by sales volume

12th largest issuer of Visa Commercial - Visa; 1Q10; ranked by sales volume

13th largest bank affiliated leasing company - The Monitor; 2010 Monitor 100

 

Slide: Diversified Revenue Base

KBW Regional Banking Index net interest margin data - KBW & SNL Financial LC; 3/31/10

 

Slide: Card Revenue

10th largest issuer of Visa Classic - Visa; 1Q10; ranked by sales volume

12th largest issuer of Visa Commercial - Visa; 1Q10; ranked by sales volume

 

Slide: Leasing and Equipment Finance

13th largest bank-affiliated leasing company - The Monitor; 2010 Monitor Bank 100

29nd largest equipment finance/leasing company - The Monitor; 2010 Monitor 100

 

Slide: Classified Wholesale Loans & Leases

Classified wholesale 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: Home Price Trends

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

 

Slide: Net Charge-offs vs. Other Banks

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

 

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