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April 27, 2020, 11:04 p.m. EDT

TCF Reports First Quarter 2020 Results

TCF also announces quarterly cash dividends on common and preferred stock

TCF Financial Corporation /zigman2/quotes/202459217/composite TCF -1.77% :

First Quarter 2020 Highlights

  • Quarterly net income of $51.9 million, or $0.32 per diluted share, down 53.8% from the fourth quarter of 2019

  • Adjusted diluted earnings per common share of $0.57 [(1)] , down 45.2% from the fourth quarter of 2019. Adjusted diluted earnings per common share excludes $38.0 million, or $0.25 per share, after-tax impact of merger-related expenses and notable items

  • Loan and lease growth of 4.1% compared to December 31, 2019, driven by $1.2 billion of commercial loan and lease portfolio growth

  • Deposit growth of 3.9% compared to December 31, 2019

  • Net charge-offs of $5.5 million, or 0.06% of average loans and leases (annualized)

  • Provision for credit losses of $96.9 million, including $74.1 million related to COVID-19, a $0.38 detriment to earnings per diluted common share

  • Assisted consumers via approximately 7,300 COVID-19-related loan modification requests for $825 million as of April 23, 2020

  • Assisted business and commercial customers via $1.2 billion of approved loans through the Payment Protection Program as of April 23, 2020

  • Efficiency ratio of 69.57%, improved 392 basis points from the fourth quarter of 2019. Adjusted efficiency ratio of 58.24% [(1)] , improved 27 basis points [] from the fourth quarter of 2019

  • Common equity Tier 1 capital ratio of 10.44%

  • Repurchased 873 thousand common shares at a cost of $33.1 million in the first quarter of 2020; in response to the COVID-19 pandemic, TCF temporarily suspended buybacks under its share repurchase program, but retains the ability to reinstate as circumstances warrant

  • Declared quarterly cash dividends on common stock of $0.35 per share payable on June 1, 2020

Merger-related Expenses and Notable items in the First Quarter of 2020 and Fourth Quarter of 2019(1)

  • Pre-tax merger-related expenses of $36.7 million, $29.0 million net of tax, or $0.19 per diluted common share for the first quarter of 2020, compared to pre-tax merger-related expenses of $47.0 million, $36.1 million net of tax, or $0.24 per diluted common share for the fourth quarter of 2019

  • Pre-tax expenses of $11.3 million, $8.9 million net of tax, or $0.06 per diluted common share related to notable items for the first quarter of 2020, compared to pre-tax net expenses of $22.1 million, $13.1 million net of tax, or $0.08 per diluted common share related to notable items for the fourth quarter of 2019, see summary of notable items adjustments below

(1) Denotes a non-GAAP financial measure. See "Reconciliation of GAAP to Non-GAAP Financial Measures" tables and the following table detailing merger-related expenses and notable items.

Note: TCF’s financial results for periods ended prior to August 1, 2019 reflect Legacy TCF financial results only on a standalone basis. In addition, TCF’s reported financial results for the first, second and third quarter of 2019 reflect Legacy TCF financial results for the period before August 1, 2019 and the post-merger combined TCF financial results on and after August 1, 2019, with the fourth quarter of 2019 and first quarter of 2020 financial results being solely of the post-merger combined TCF. The number of shares issued and outstanding, earnings per share, additional paid-in-capital, dividends paid and all references to share quantities of TCF have been retrospectively restated to reflect the equivalent number of shares issued in the Merger as the Merger was treated as a reverse merger.

Summary of Financial Results(1)                        
  At or For the Quarter Ended   Change From
  Mar. 31,   Dec. 31,   Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31, Mar. 31,
(Dollars in thousands, except per share data) 2020   2019   2019   2019   2019   2019 2019
Financial Results                            
Net income attributable to TCF $ 51,899     $ 112,399     $ 22,148     $ 90,427     $ 70,494     (53.8 ) % (26.4 ) %
Net interest income 401,481     408,753     371,793     254,057     254,429     (1.8 )   57.8    
Basic earnings per common share $ 0.33     $ 0.72     $ 0.15     $ 1.07     $ 0.83     (54.2 )   (60.2 )  
Diluted earnings per common share 0.32     0.72     0.15     1.07     0.83     (55.6 )   (61.4 )  
Return on average assets ("ROAA") [(3)] 0.46 %   0.99 %   0.26 %   1.54 %   1.22 %   (53 ) bps (76 ) bps
ROACE [(3)] 3.64     8.00     1.75     14.27     11.40     (436 )   (776 )  
ROATCE (non-GAAP) [(2)(3)] 5.42     11.35     2.68     15.46     12.42     (593 )   (700 )  
Net interest margin 3.73     3.86     4.12     4.46     4.58     (13 )   (85 )  
Net interest margin (FTE) [(2)(3)] 3.76     3.89     4.14     4.49     4.61     (13 )   (85 )  
Net charge-offs as a percentage of average loans and leases [(3)] 0.06     0.07     0.39     0.29     0.39     (1 )   (33 )  
Nonperforming assets as a percentage of total loans and leases and other real estate owned [(4)] 0.80     0.59     0.62     0.62     0.63     21     17    
Efficiency ratio 69.57     73.49     91.32     65.11     70.70     (392 )   (113 )  
Adjusted Financial Results (non-GAAP)                            
Adjusted net income attributable to TCF [(2)] $ 89,855     $ 161,581     $ 128,301     $ 93,650     $ 77,700     (44.4 ) % 15.6   %
Adjusted diluted earnings per common share [(2)] $ 0.57     $ 1.04     $ 0.98     $ 1.11     $ 0.91     (45.2 )   (37.4 )  
Adjusted ROAA [(2)(3)] 0.78 %   1.42 %   1.34 %   1.59 %   1.34 %   (64 ) bps (56 ) bps
Adjusted ROACE [(2)(3)] 6.43     11.57     11.21     14.79     12.61     (514 )   (618 )  
Adjusted ROATCE [(2)(3)] 9.24     16.25     14.96     16.02     13.72     (701 )   (448 )  
Adjusted efficiency ratio [(2)] 58.24     58.51     58.74     61.48     65.67     (27 )   (743 )  
N.M. Not meaningful
(1) Financial results for any periods ended prior to August 1, 2019 reflect Legacy TCF financials on a standalone basis. Certain reclassifications have been made to prior period financial information to conform to the current period presentation.
(2) Denotes a non-GAAP financial measure. See "Reconciliation of GAAP to Non-GAAP Financial Measures" tables.
(3) Annualized.
(4) Prior to the adoption of CECL as of January 1, 2020, purchased credit impaired loans were not classified as nonaccrual loans because they were recorded at their net realizable value based on the principal and interest expected to be collected on the loans. At January 1, 2020, $73.4 million of previous purchased credit impaired loans were reclassified to nonaccrual loans as a result of the adoption of CECL.

The following table includes merger-related expenses and notable items used to arrive at adjusted net income in the Adjusted Financial Results (non-GAAP) (see Reconciliation of Non-GAAP Financial Measures).

  For the Quarter Ended March 31, 2020   For the Quarter Ended December 31, 2019
(Dollars in thousands, except per share data) Pre-tax income (loss)   After-tax benefit (loss)(1)   Per Share   Pre-tax income (loss)   After-tax benefit (loss)(1)   Per Share
Merger-related expenses $ (36,728 )   $ (29,026 )   $ (0.19 )   $ (47,025 )   (36,059 )   $ (0.24 )
Notable items:                      
Sale of Legacy TCF auto finance portfolio and related expenses [(2)] (3,063 )   (2,421 )   (0.02 )   (12,864 )   (9,865 )   (0.06 )
Branch exit costs [(3)]             (3,494 )   (2,679 )   (0.02 )
Loan servicing rights (impairment) recovery [(4)] (8,236 )   (6,509 )   (0.04 )   638     490      
Pension fair valuation adjustment [(4)]             (6,341 )   (4,862 )   (0.03 )
Tax basis adjustment benefit [(5)]                 3,793     0.03  
Total notable items (11,299 )   (8,930 )   (0.06 )   (22,061 )   (13,123 )   (0.08 )
Total merger-related and notable items $ (48,027 )   $ (37,956 )   $ (0.25 )   $ (69,086 )   $ (49,182 )   $ (0.32 )
(1) Net of tax benefit at our normal tax rate and other tax benefits.
(2) First quarter of 2020 included within occupancy and equipment ($1.6 million), compensation and employee benefits ($0.9 million) and other noninterest expense ($0.6 million). Fourth quarter of 2019 included within net (loss) gain on sales of loans and leases ($8.2 million), other noninterest expense ($2.2 million), occupancy and equipment ($1.5 million) and compensation and employee benefits ($0.9 million).
(3) Included within Other noninterest expense.
(4) Included within Other noninterest income.
(5) Included within Income tax expense.

TCF Financial Corporation ("TCF" or the "Corporation") /zigman2/quotes/202459217/composite TCF -1.77% today reported net income of $51.9 million, or diluted earnings per common share of $0.32, for the first quarter of 2020, compared with $112.4 million, or diluted earnings per common share of $0.72, for the fourth quarter of 2019. Adjusted net income was $89.9 million, or $0.57 per diluted common share for the first quarter of 2020, compared with $161.6 million, or $1.04 per diluted common share, for the fourth quarter of 2019. (see "Reconciliation of GAAP to Non-GAAP Financial Measures" tables).

"As we work through the impacts related to COVID-19, I am continually impressed with the dedication of our teams and how our team members have rallied to support our customers as well as each other during these unprecedented times," said Craig R. Dahl, president and chief executive officer. “Our top priorities continue to be on ensuring the health and well-being of our team members, the financial stability of our customers, and the overall wellness of the communities where we live and operate.

“We entered the year with momentum across the company and in January and February, we saw strong business performance that reflected the opportunity we see in our markets as a result of our merger of equals, including robust loan and deposit growth, stable credit quality and on-time execution of our integration initiatives. With the arrival of COVID-19, we quickly took numerous actions to prioritize the well-being of those we work with, both from a health and economic perspective. This included transitioning our branch services to drive-up only where possible, closing select other nearby branches, and implementing a work-from-home approach for many of our team members, all of which were designed to protect the health and safety of our employees. In addition, we are offering relief programs for impacted customers and we have deployed substantial resources to support applications for the Paycheck Protection Program.

“As we look ahead, our focus will remain on managing the impact of COVID-19 across the organization, completing our integration activities and capturing the related cost synergies, and continuing to actively manage the business in this volatile and fluid environment. We are operating with robust capital and liquidity levels, strong diversification across our portfolios as a result of the merger of equals, and an experienced management team that is providing strong leadership as we support our customers and employees in these difficult times.”

Net Interest Income and Net Interest Margin

Net interest income was $401.5 million for the first quarter of 2020, a decrease of $7.3 million, or 1.8%, from the fourth quarter of 2019. Purchase accounting accretion and amortization included in net interest income was $25.3 million for the first quarter of 2020, compared to $30.5 million for the fourth quarter of 2019. Net interest income, excluding purchase accounting accretion and amortization, was $376.2 million for the first quarter of 2020, compared to $378.2 million for the fourth quarter of 2019. Net interest margin was 3.73% for the first quarter of 2020, compared to 3.86% in the fourth quarter of 2019, while net interest margin on a fully tax-equivalent basis (FTE) was 3.76%, down 13 basis points from the fourth quarter of 2019. The decrease in net interest margin from the fourth quarter of 2019 was driven primarily by the Federal Reserve's rate cuts in addition to a decrease in the benefit provided by purchase accounting accretion and amortization. Net interest margin FTE, excluding purchase accounting accretion and amortization, was 3.53% in the first quarter of 2020, compared to 3.60% in the fourth quarter of 2019 (see "Reconciliation of GAAP to Non-GAAP Financial Measures" tables).

Noninterest Income

Noninterest income was $137.0 million for the first quarter of 2020, a decrease of $21.1 million, or 13.3%, from the fourth quarter of 2019. Noninterest income for the first quarter of 2020 included an $8.2 million loan servicing rights impairment, included in other noninterest income, a notable item. Noninterest income for the fourth quarter of 2019 included the following notable items: an $8.2 million loss related to the sale of the Legacy TCF auto finance portfolio, included in net gains (losses) on sales of loans and leases, and a $0.6 million recovery of prior loan servicing rights impairment, included in other noninterest income. Adjusted noninterest income for the first quarter of 2020 was $145.2 million, compared to $165.6 million in the fourth quarter of 2019 (see "Reconciliation of GAAP to Non-GAAP Financial Measures" tables). The first quarter of 2020 also included a $6.0 million favorable interest rate swap mark-to-market adjustment resulting from changes in the interest rate environment, included in other noninterest income, a $7.7 million increase in net gains on sales of loans and leases, and decreases of $13.1 million in leasing revenue, primarily due to a seasonal decline in sales-type leasing revenue, and of $4.8 million and $3.1 million in service charges on deposit accounts and card and ATM revenue, respectively. The fourth quarter of 2019 included a $3.7 million gain on sale of loans and leases related to a nonaccrual and TDR loan sale, included in net gains (losses) on sales of loans and leases and a $2.4 million favorable interest rate swap mark-to-market adjustment resulting from changes in the interest rate environment, included in other noninterest income.

Noninterest Expense

Noninterest expense was $374.6 million for the first quarter of 2020, a decrease of $42.0 million, or 10.1%, from the fourth quarter of 2019. The first quarter of 2020 included $36.7 million of merger-related expenses, compared to $47.0 million for the fourth quarter of 2019. Noninterest expense also included $3.1 million of expense related to the sale of the Legacy TCF auto finance portfolio ($1.6 million in occupancy and equipment expense, $0.9 million in compensation and employee benefits and $0.6 million in other noninterest expense) considered a notable item for the first quarter of 2020. Noninterest expense for the fourth quarter of 2019 included the following notable items: $6.3 million of expense related to pension fair valuation adjustment on plans with previously announced terminations, included in other noninterest expense, $4.6 million of expense related to the sale of the Legacy TCF auto finance portfolio ($2.2 million in other noninterest expense, $1.5 million in occupancy and equipment expense and $0.9 million in compensation and employee benefits) and $3.5 million of expense related to branch exit costs, included in other noninterest expense. Excluding merger-related expenses and notable items, adjusted noninterest expense was $334.8 million for the first quarter of 2020, compared to $355.0 million for the fourth quarter of 2019 (see "Reconciliation of GAAP to Non-GAAP Financial Measures" tables). The first quarter of 2020 also included $1.5 million of impairment related to federal historic tax credits placed into service, included in other noninterest expense. The fourth quarter of 2019 also included $4.0 million of impairment related to federal historic tax credits placed into service, included in other noninterest expense, and a $1.3 million impairment charge recognized on a branch we intend to sell in the future, included within occupancy and equipment expense.

Income Tax Expense

Income tax expense for the first quarter of 2020 was $13.1 million, a decrease of $8.3 million, or 38.8%, from the fourth quarter of 2019. The fourth quarter of 2019 included a $3.6 million federal historic tax credit benefit and a $3.8 million tax basis adjustment benefit.

Credit Quality

Provision for credit losses Provision for credit losses was $96.9 million for the first quarter of 2020, an increase of $82.5 million, from the fourth quarter of 2019. The increase from the fourth quarter of 2019 was primarily due to the recognition of an economic downturn related to COVID-19 (increased provision for credit losses on loans and leases by $74.1 million, $70.5 million related to the provision for credit losses on loans and leases and $3.6 million related to the provision for unfunded commitments) and the adoption of a new accounting standard, often referred to as Current Expected Credit Losses ("CECL"). This framework requires that management estimate credit losses over the full remaining expected life and consider expected future changes in macroeconomic conditions. As a result of the adoption of CECL, the provision for credit losses now includes the provision for unfunded commitment that was previously included within other noninterest expense. The first quarter of 2020 provision for unfunded commitments was $4.0 million. Provision for credit losses for the fourth quarter of 2019 was reduced by $4.7 million of recoveries of previous charge-offs related to the sale of consumer nonaccrual and TDR loans.

Net charge-off rate The annualized net charge-offs as a percentage of average loans and leases was 0.06% for the first quarter of 2020, down 1 basis point from the fourth quarter of 2019. Net charge-offs for the fourth quarter of 2019 were reduced by $4.7 million of recoveries of previous charge-offs related to the sale of consumer nonaccrual and TDR loans.

Allowance for Credit Losses Allowance for credit losses was $406.4 million, or 1.13% of total loans and leases, at March 31, 2020, up from $113.1 million, or 0.33%, at December 31, 2019. The increase from December 31, 2019 was primarily due to the adoption of CECL and the impact of COVID-19 (increased the allowance for credit losses by $70.5 million) and the adoption of CECL as of January 1, 2020. Upon adoption of CECL, $206.0 million was recorded as an increase in the allowance for credit losses. Prior to the adoption of CECL, the allowance for credit losses was calculated under an incurred loss model which delayed recognition of loss until it was probable the loss had been incurred in comparison to the accounting under CECL which considers current credit losses expected to be incurred in the loan and lease portfolios over the life of each financial asset.

Nonaccrual loans and leases Nonaccrual loans and leases were $250.5 million at March 31, 2020 and represented 0.70% of total loans and leases, compared to $169.7 million, or 0.49% of total loans and leases, at December 31, 2019. The $80.8 million increase in nonaccrual loans and leases from December 31, 2019 was substantially driven by the adoption of CECL ($73.4 million of loans previously accounted for as purchased credit impaired were reclassified to nonaccrual loans as of January 1, 2020 due to the adoption of CECL).

Balance Sheet

Loans and leases Loans and leases were $35.9 billion at March 31, 2020, an increase of $1.4 billion, or 4.1%, compared to $34.5 billion at December 31, 2019. The increase from December 31, 2019 was primarily due to growth in the commercial and industrial, commercial real estate and residential mortgage portfolios.

Investment securities The investment securities portfolio was $7.2 billion at March 31, 2020, an increase of $301.4 million, or 4.4%, compared to $6.9 billion at December 31, 2019. The increase from December 31, 2019 was primarily due to purchases of residential agency mortgage-backed securities.

Deposits Deposits were $35.8 billion at March 31, 2020, an increase of $1.3 billion, or 3.9%, compared to $34.5 billion at December 31, 2019. The increase from December 31, 2019 was primarily due to increases in money market deposits of $535.2 million, checking deposit account balances of $322.9 million and savings account balances of $197.8 million, reflecting seasonal increases in addition to lower consumer spending.

Capital The common equity Tier 1 capital ratio was 10.44% at March 31, 2020, compared to 10.99% at December 31, 2019. Our capital ratios as of March 31, 2020 reflect our election of the five-year CECL transition for regulatory capital purposes.

In response to the COVID-19 pandemic, TCF temporarily suspended buybacks under its share repurchase program, but retains the ability to reinstate as circumstances warrant. TCF is well positioned with strong capital and liquidity and is committed to supporting our customers, team members and communities.

TCF's board of directors also declared a regular quarterly cash dividend of $0.35 per common share payable on June 1, 2020 to shareholders of record at the close of business on May 15, 2020. In addition, the board of directors declared a quarterly cash dividend of $0.35625 per depositary share payable on June 1, 2020 to shareholders of record of the depositary shares, representing a 1/1,000th interest in a share of the 5.70% Series C Non-Cumulative Perpetual Preferred Stock, at the close of business on May 15, 2020.

Conference Call Details TCF will host a conference call to discuss first quarter 2020 results on Tuesday, April 28, 2020 at 10:00 a.m. Eastern Time. The conference call will be available via a live webcast on the Investor Relations section of TCF's website, ir.tcfbank.com , and archived for replay. The conference call can also be accessed by dialing (844) 512-2926 and entering access code 6598992. To listen to the replay via phone, please dial (877) 344-7529 and enter access code 10141568. The replay begins approximately one hour after the call is completed on Tuesday, April 28, 2020 and will be available through Tuesday, May 5, 2020.

TCF Financial Corporation <SYMBOL COUNTRY="US" EXCHANGE="U.S.: Nasdaq" TICKER="TCF" ID="1183" COMPANY="TCF Financial Corp." MKTW-TICKER="US:TCF" /> is a Detroit, Michigan-based financial holding company with $49 billion in total assets at March 31, 2020 and a top 10 deposit market share in the Midwest. TCF’s primary banking subsidiary, TCF National Bank, is a premier Midwest bank offering consumer and commercial banking, trust and wealth management, and specialty leasing and lending products and services to consumers, small businesses and commercial clients. TCF has approximately 500 branches primarily located in Michigan, Illinois and Minnesota with additional locations in Arizona, Colorado, Ohio, South Dakota and Wisconsin. TCF also conducts business across all 50 states and Canada through its specialty lending and leasing businesses. To learn more about TCF, visit ir.tcfbank.com.

Cautionary Statements for Purposes of the Safe Harbor Provisions of the Securities Litigation Reform Act

Any statements contained in this earnings release regarding the outlook for the Corporation's businesses and their respective markets, such as projections of future performance, targets, guidance, statements of the Corporation's plans and objectives, forecasts of market trends and other matters are forward-looking statements based on the Corporation's assumptions and beliefs. Such statements may be identified by such words or phrases as "will likely result," "are expected to," "will continue," "outlook," "will benefit," "is anticipated," "estimate," "project," "management believes" or similar expressions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those discussed in such statements and no assurance can be given that the results in any forward-looking statement will be achieved. For these statements, TCF claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Any forward-looking statement speaks only as of the date on which it is made and we disclaim any obligation to subsequently revise any forward-looking statement to reflect events or circumstances after such date or to reflect the occurrence of anticipated or unanticipated events.

Certain factors could cause the Corporation's future results to differ materially from those expressed or implied in any forward-looking statements contained herein. These factors include the factors discussed in Part I, Item 1A of the Corporation's Annual Report on Form 10-K for the year ended December 31, 2019 under the heading "Risk Factors" or otherwise disclosed in documents filed or furnished by the Corporation with or to the SEC after the filing of such Annual Report on Form 10-K, and any other cautionary statements, written or oral, which may be made or referred to in connection with any such forward-looking statements. Since it is not possible to foresee all such factors, these factors should not be considered as complete or exhaustive.

This release also contains forward-looking statements regarding TCF’s outlook or expectations with respect to the merger. Examples of forward-looking statements include, but are not limited to, statements regarding outlook and expectations with respect to the strategic and financial benefits of the merger, including the expected impact of the transaction on TCF’s future financial performance (including anticipated accretion to earnings per share, the tangible book value earn-back period and other operating and return metrics), the expected costs to be incurred in connection with the merger, and operational aspects of post-merger integration.

Use of Non-GAAP Financial Measures

Management uses the adjusted net income, adjusted diluted earnings per common share, adjusted ROAA, adjusted ROACE, ROATCE, adjusted ROATCE, adjusted efficiency ratio, adjusted net interest income, net interest margin (FTE), adjusted net interest margin (FTE), adjusted noninterest income, adjusted noninterest expense, tangible book value per common share and tangible common equity to tangible assets internally to measure performance and believes that these financial measures not recognized under generally accepted accounting principles in the United States ("GAAP") (i.e. non-GAAP) provide meaningful information to investors that will permit them to assess the Corporation's capital and ability to withstand unexpected market or economic conditions and to assess the performance of the Corporation in relation to other banking institutions on the same basis as that applied by management, analysts and banking regulators. TCF adjusts certain results to exclude merger-related expenses and notable items in addition to presenting net interest income and net interest margin (FTE) excluding purchase accounting accretion and amortization. Management believes these measures are useful to investors in understanding TCF's business and operating results.

These non-GAAP financial measures are not defined by GAAP and other entities may calculate them differently than TCF does. Non-GAAP financial measures have inherent limitations and are not required to be uniformly applied. Although these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a corporation, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of results as reported under GAAP. In particular, a measure of earnings that excludes selected items does not represent the amount that effectively accrues directly to shareholders. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measure may be found in the reconciliation tables included in this press release.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES          
Consolidated Statements of Financial Condition (Unaudited)          
                      Change From
(Dollars in thousands) Mar. 31,   Dec. 31,   Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31, 2019 Mar. 31, 2019
2020   2019   2019   2019   2019   $ % $ %
ASSETS:                            
Cash and cash equivalents:                            
Cash and due from banks $ 713,413     $ 491,787     $ 586,060     $ 294,566     $ 283,659     $ 221,626   45.1 % $ 429,754   151.5 %
Interest-bearing deposits with other banks 565,458     736,584     736,954     260,705     180,163     (171,126 ) (23.2 ) 385,295   N.M.  
Total cash and cash equivalents 1,278,871     1,228,371     1,323,014     555,271     463,822     50,500   4.1   815,049   175.7  
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost 484,461     442,440     290,238     105,659     103,644     42,021   9.5   380,817   N.M.  
Investment securities:                            
Available-for-sale, at fair value 7,025,224     6,720,001     5,579,835     3,109,803     2,945,342     305,223   4.5   4,079,882   138.5  
Held-to-maturity, at amortized cost 135,619     139,445     144,000     144,919     148,024     (3,826 ) (2.7 ) (12,405 ) (8.4 )
Total investment securities 7,160,843     6,859,446     5,723,835     3,254,722     3,093,366     301,397   4.4   4,067,477   131.5  
Loans and leases held-for-sale 287,177     199,786     1,436,069     74,410     64,468     87,391   43.7   222,709   N.M.  
Loans and leases 35,921,614     34,497,464     33,510,752     19,185,137     19,384,210     1,424,150   4.1   16,537,404   85.3  
Allowance for credit losses (406,383 )   (113,052 )   (121,218 )   (146,503 )   (147,972 )   (293,331 ) N.M.   (258,411 ) (174.6 )
Loans and leases, net 35,515,231     34,384,412     33,389,534     19,038,634     19,236,238     1,130,819   3.3   16,278,993   84.6  
Premises and equipment, net 516,454     533,138     554,194     432,751     429,711     (16,684 ) (3.1 ) 86,743   20.2  
Goodwill 1,313,046     1,299,878     1,265,111     154,757     154,757     13,168   1.0   1,158,289   N.M.  
Other intangible assets, net 162,887     168,368     215,910     18,885     19,684     (5,481 ) (3.3 ) 143,203   N.M.  
Loan servicing rights 47,283     56,313     55,301     19     20     (9,030 ) (16.0 ) 47,263   N.M.  
Other assets 1,828,130     1,479,401     1,439,305     991,722     853,005     348,729   23.6   975,125   114.3  
Total assets $ 48,594,383     $ 46,651,553     $ 45,692,511     $ 24,626,830     $ 24,418,715     $ 1,942,830   4.2   $ 24,175,668   99.0  
LIABILITIES AND EQUITY:                          
Deposits:                            
Noninterest-bearing $ 8,237,916     $ 7,970,590     $ 7,979,900     $ 4,062,912     $ 4,104,652     $ 267,326   3.4 % $ 4,133,264   100.7 %
Interest-bearing 27,561,387     26,497,873     27,306,174     15,049,475     14,919,459     1,063,514   4.0   12,641,928   84.7  
Total deposits 35,799,303     34,468,463     35,286,074     19,112,387     19,024,111     1,330,840   3.9   16,775,192   88.2  
Short-term borrowings 3,482,535     2,669,145     2,607,300     350,764     355,992     813,390   30.5   3,126,543   N.M.  
Long-term borrowings 2,600,594     2,354,448     860,482     1,617,531     1,411,426     246,146   10.5   1,189,168   84.3  
Other liabilities 1,056,118     1,432,256     1,245,238     835,630     981,341     (376,138 ) (26.3 ) 74,777   7.6  
Total liabilities 42,938,550     40,924,312     39,999,094     21,916,312     21,772,870     2,014,238   4.9   21,165,680   97.2  
Equity:                              
Preferred stock 169,302     169,302     169,302     169,302     169,302            
Common stock 152,186     152,966     153,571     87,944     88,063     (780 ) (0.5 ) 64,123   72.8  
Additional paid-in capital 3,433,234     3,462,080     3,478,159     781,788     789,467     (28,846 ) (0.8 ) 2,643,767   N.M.  
Retained earnings 1,732,932     1,896,427     1,840,214     1,874,308     1,810,701     (163,495 ) (8.6 ) (77,769 ) (4.3 )
Accumulated other comprehensive income 166,170     54,277     56,228     37,334     5,481     111,893   N.M.   160,689   N.M.  
Treasury stock at cost and other (28,140 )   (28,037 )   (27,370 )   (265,016 )   (246,621 )   (103 ) (0.4 ) 218,481   88.6  
Total TCF Financial Corporation shareholders' equity 5,625,684     5,707,015     5,670,104     2,685,660     2,616,393     (81,331 ) (1.4 ) 3,009,291   115.0  
Non-controlling interest 30,149     20,226     23,313     24,858     29,452     9,923   49.1   697   2.4  
Total equity 5,655,833     5,727,241     5,693,417     2,710,518     2,645,845     (71,408 ) (1.2 ) 3,009,988   113.8  
Total liabilities and equity $ 48,594,383     $ 46,651,553     $ 45,692,511     $ 24,626,830     $ 24,418,715     $ 1,942,830   4.2   $ 24,175,668   99.0  
 
N.M. Not Meaningful
TCF FINANCIAL CORPORATION AND SUBSIDIARIES                
Consolidated Statements of Income (Unaudited)                
                                   
  Quarter Ended   Change From
(Dollars in thousands) Mar. 31,   Dec. 31,   Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31, 2019   Mar. 31, 2019
2020   2019   2019   2019   2019   $   %   $   %
Interest income:                                  
Interest and fees on loans and leases $ 443,096     $ 446,738     $ 417,370     $ 283,282     $ 283,238     $ (3,642 )   (0.8 )%   $ 159,858     56.4 %
Interest on investment securities:                                  
Taxable 40,920     36,282     31,038     22,041     16,666     4,638     12.8     24,254     145.5  
Tax-exempt 4,349     4,374     3,385     1,208     2,684     (25 )   (0.6 )   1,665     62.0  
Interest on loans held-for-sale 1,561     15,767     1,408     599     825     (14,206 )   (90.1 )   736     89.2  
Interest on other earning assets 5,466     6,617     6,607     3,651     3,481     (1,151 )   (17.4 )   1,985     57.0  
Total interest income 495,392     509,778     459,808     310,781     306,894     (14,386 )   (2.8 )   188,498     61.4  
Interest expense:                                  
Interest on deposits 67,419     77,003     70,900     40,646     37,608     (9,584 )   (12.4 )   29,811     79.3  
Interest on borrowings 26,492     24,022     17,115     16,078     14,857     2,470     10.3     11,635     78.3  
Total interest expense 93,911     101,025     88,015     56,724     52,465     (7,114 )   (7.0 )   41,446     79.0  
Net interest income 401,481     408,753     371,793     254,057     254,429     (7,272 )   (1.8 )   147,052     57.8  
Provision for credit losses 96,943     14,403     27,188     13,569     10,122     82,540     N.M.     86,821     N.M.  
Net interest income after provision for credit losses 304,538     394,350     344,605     240,488     244,307     (89,812 )   (22.8 )   60,231     24.7  
Noninterest income:                                  
Fees and service charges on deposit accounts 34,597     39,356     34,384     27,842     26,278     (4,759 )   (12.1 )   8,319     31.7  
Leasing revenue 33,565     46,686     39,590     39,277     38,165     (13,121 )   (28.1 )   (4,600 )   (12.1 )
Card and ATM revenue 21,685     24,751     23,315     20,496     18,659     (3,066 )   (12.4 )   3,026     16.2  
Net gains (losses) on sales of loans and leases 20,590     12,934     (5,984 )   11,141     8,217     7,656     59.2     12,373     150.6  
Servicing fee revenue 6,792     6,022     5,121     4,523     5,110     770     12.8     1,682     32.9  
Wealth management revenue 6,151     6,172     4,241             (21 )   (0.3 )   6,151     N.M.  
Net gains on investment securities     8     5,900     1,066     451     (8 )   (100.0 )   (451 )   (100.0 )
Other 13,583     22,123     (12,309 )   5,373     6,624     (8,540 )   (38.6 )   6,959     105.1  
Total noninterest income 136,963     158,052     94,258     109,718     103,504     (21,089 )   (13.3 )   33,459     32.3  
Noninterest expense:                                  
Compensation and employee benefits 171,528     180,969     155,745     116,266     123,942     (9,441 )   (5.2 )   47,586     38.4  
Occupancy and equipment 57,288     56,771     49,229     41,850     41,710     517     0.9     15,578     37.3  
Lease financing equipment depreciation 18,450     18,629     19,408     19,133     19,256     (179 )   (1.0 )   (806 )   (4.2 )
Net foreclosed real estate and repossessed assets 1,859     4,242     2,203     2,448     4,630     (2,383 )   (56.2 )   (2,771 )   (59.8 )
Merger-related expenses 36,728     47,025     111,259     4,226     9,458     (10,297 )   (21.9 )   27,270     N.M.  
Other 88,746     108,935     87,776     52,926     54,079     (20,189 )   (18.5 )   34,667     64.1  
Total noninterest expense 374,599     416,571     425,620     236,849     253,075     (41,972 )   (10.1 )   121,524     48.0  
Income before income tax expense 66,902     135,831     13,243     113,357     94,736     (68,929 )   (50.7 )   (27,834 )   (29.4 )
Income tax expense (benefit) 13,086     21,375     (11,735 )   19,314     21,287     (8,289 )   (38.8 )   (8,201 )   (38.5 )
Income after income tax expense 53,816     114,456     24,978     94,043     73,449     (60,640 )   (53.0 )   (19,633 )   (26.7 )
Income attributable to non-controlling interest 1,917     2,057     2,830     3,616     2,955     (140 )   (6.8 )   (1,038 )   (35.1 )
Net income attributable to TCF Financial Corporation 51,899     112,399     22,148     90,427     70,494     (60,500 )   (53.8 )   (18,595 )   (26.4 )
Preferred stock dividends 2,493     2,494     2,494     2,494     2,493     (1 )            
Net income available to common shareholders $ 49,406     $ 109,905     $ 19,654     $ 87,933     $ 68,001     $ (60,499 )   (55.0 )   $ (18,595 )   (27.3 )
 
N.M. Not Meaningful
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields and Rates (Unaudited)
  Quarter Ended
  Mar. 31, 2020   Dec. 31, 2019   Mar. 31, 2019
  Average   Yields &   Average   Yields &   Average   Yields &
(Dollars in thousands) Balance Interest(1) Rates(1)(2)   Balance Interest(1) Rates(1)(2)   Balance Interest(1) Rates(1)(2)
ASSETS:                      
Federal Home Loan Bank and Federal Reserve Bank stocks $ 454,675   $ 3,152   2.79 %   $ 388,640   $ 3,170   3.24 %   $ 105,135   $ 961   3.70 %
Investment securities held-to-maturity 136,277   560   1.64     140,434   889   2.53     147,556   535   1.45  
Investment securities available-for-sale:                    
Taxable 5,892,006   40,360   2.74     4,960,520   35,393   2.85     2,121,196   16,131   3.04  
Tax-exempt [(3)] 773,468   5,503   2.85     778,994   5,536   2.84     516,995   3,397   2.63  
Loans and leases held-for-sale 138,058   1,561   4.53     1,121,326   15,767   5.58     55,204   825   6.05  
Loans and leases [(3)(4)]                      
Commercial and industrial 11,827,315   160,802   5.42     10,955,937   156,246   5.63     6,495,163   106,716   6.63  
Commercial real estate 9,291,540   117,743   5.01     9,057,834   124,431   5.38     2,917,631   37,737   5.17  
Lease financing 2,682,323   34,156   5.09     2,616,360   33,431   5.11     2,527,346   32,384   5.13  
Residential mortgage 6,113,279   61,379   4.02     6,023,647   61,072   4.05     2,345,881   29,458   5.07  
Consumer installment 1,517,412   19,742   5.23     1,546,952   19,382   4.97     1,852,813   25,500   5.58  
Home equity 3,514,278   51,103   5.85     3,604,153   53,910   5.93     3,048,128   52,452   6.98  
Total loans and leases [(3)(4)] 34,946,147   444,925   5.08     33,804,883   448,472   5.24     19,186,962   284,247   5.97  
Interest-bearing deposits with banks and other 538,971   2,314   1.72     656,555   3,448   2.07     261,556   2,520   3.87  
Total interest-earning assets 42,879,602   498,375   4.64     41,851,352   512,675   4.85     22,394,604   308,616   5.55  
Other assets 4,105,824         4,268,162         1,712,337      
Total assets $ 46,985,426         $ 46,119,514         $ 24,106,941      
LIABILITIES AND EQUITY:                      
Noninterest-bearing deposits $ 7,929,933         $ 7,968,769         $ 3,919,746      
Interest-bearing deposits:                      
Checking 5,990,309   5,830   0.39 %   5,891,566   7,614   0.51 %   2,457,767   387   0.06 %
Savings 8,589,815   13,669   0.64     8,404,460   14,993   0.71     6,253,992   10,670   0.69  
Money market 4,792,248   14,855   1.25     4,463,476   15,537   1.38     1,490,631   4,453   1.21  
Certificates of deposit 7,329,632   33,065   1.81     7,825,573   38,859   1.97     4,622,120   22,098   1.94  
Total interest-bearing deposits 26,702,004   67,419   1.02     26,585,075   77,003   1.15     14,824,510   37,608   1.03  
Total deposits 34,631,937   67,419   0.78     34,553,844   77,003   0.88     18,744,256   37,608   0.81  
Borrowings:                      
Short-term borrowings 2,689,262   10,582   1.56     2,585,682   11,403   1.73     293,499   1,957   2.67  
Long-term borrowings 2,608,204   15,910   2.42     1,739,852   12,620   2.87     1,500,832   12,900   3.44  
Total borrowings 5,297,466   26,492   1.98     4,325,534   24,023   2.19     1,794,331   14,857   3.31  
Total interest-bearing liabilities 31,999,470   93,911   1.18     30,910,609   101,026   1.29     16,618,841   52,465   1.28  
Total deposits and borrowings 39,929,403   93,911   0.94     38,879,378   101,026   1.03     20,538,587   52,465   1.03  
Accrued expenses and other liabilities 1,425,536         1,549,017         989,104      
Total liabilities 41,354,939         40,428,395         21,527,691      
Total TCF Financial Corporation shareholders' equity 5,605,159         5,667,436         2,554,729      
Non-controlling interest in subsidiaries 25,328         23,683         24,521      
Total equity 5,630,487         5,691,119         2,579,250      
Total liabilities and equity $ 46,985,426         $ 46,119,514         $ 24,106,941      
Net interest spread (FTE)     3.70 %       3.82 %       4.52 %
Net interest income(FTE) and net interest margin(FTE)   $ 404,464   3.76 %     $ 411,649   3.89 %     $ 256,151   4.61 %
Reconciliation to Reported Net Interest Income                  
Net interest income (FTE)   $ 404,464         $ 411,649         $ 256,151    
Adjustments for taxable equivalent                      
Loans and leases   (1,829 )       (1,734 )       (1,009 )  
Tax-exempt investment securities   (1,154 )       (1,162 )       (713 )  
Total FTE adjustments   (2,983 )       (2,896 )       (1,722 )  
Net interest income (GAAP)   $ 401,481         $ 408,753         $ 254,429    
Net interest margin (GAAP)   3.73 %       3.86 %       4.58 %  
(1) Interest and yields are presented on a fully tax-equivalent basis.
(2) Annualized.
(3) The yield on tax-exempt loans and investment securities available-for-sale is computed on a tax-equivalent basis using a statutory federal income tax rate of 21%.
(4) Average balances of loans and leases include nonaccrual loans and leases and are presented net of unearned income.
TCF FINANCIAL CORPORATION AND SUBSIDIARIES                
Consolidated Quarterly Average Balance Sheets (Unaudited)                
                                   
  Quarter Ended   Change From
  Mar. 31,   Dec. 31,   Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31, 2019   Mar. 31, 2019
(Dollars in thousands) 2020   2019   2019   2019   2019   $   %   $   %
ASSETS:                                  
Federal Home Loan Bank and Federal Reserve Bank stocks $ 454,675     $ 388,640     $ 230,767     $ 112,118     $ 105,135     $ 66,035     17.0 %   $ 349,540     N.M.  
Investment securities held-to-maturity 136,277     140,434     143,078     146,296     147,556     (4,157 )   (3.0 )   (11,279 )   (7.6 )%
Investment securities available-for-sale:                                  
Taxable 5,892,006     4,960,520     4,232,878     2,711,984     2,121,196     931,486     18.8     3,770,810     177.8  
Tax-exempt 773,468     778,994     643,576     222,534     516,995     (5,526 )   (0.7 )   256,473     49.6  
Loans and leases held-for-sale 138,058     1,121,326     118,482     40,835     55,204     (983,268 )   (87.7 )   82,854     150.1  
Loans and leases [(1)] :                                  
Commercial and industrial 11,827,315     10,955,937     9,290,978     6,683,060     6,495,163     871,378     8.0     5,332,152     82.1  
Commercial real estate 9,291,540     9,057,834     6,964,643     3,069,969     2,917,631     233,706     2.6     6,373,909     N.M.  
Lease financing 2,682,323     2,616,360     2,570,567     2,565,175     2,527,346     65,963     2.5     154,977     6.1  
Residential mortgage 6,113,279     6,023,647     4,853,627     2,337,818     2,345,881     89,632     1.5     3,767,398     160.6  
Consumer installment 1,517,412     1,546,952     2,389,830     1,586,633     1,852,813     (29,540 )   (1.9 )   (335,401 )   (18.1 )
Home equity 3,514,278     3,604,153     3,433,830     2,997,050     3,048,128     (89,875 )   (2.5 )   466,150     15.3  
Total loans and leases [(1)] 34,946,147     33,804,883     29,503,475     19,239,705     19,186,962     1,141,264     3.4     15,759,185     82.1  
Interest-bearing deposits with banks and other 538,971     656,555     933,014     280,075     261,556     (117,584 )   (17.9 )   277,415     106.1  
Total interest-earning assets 42,879,602     41,851,352     35,805,270     22,753,547     22,394,604     1,028,250     2.5     20,484,998     91.5  
Other assets 4,105,824     4,268,162     3,289,096     1,730,275     1,712,337     (162,338 )   (3.8 )   2,393,487     139.8  
Total assets $ 46,985,426     $ 46,119,514     $ 39,094,366     $ 24,483,822     $ 24,106,941     $ 865,912     1.9     $ 22,878,485     94.9  
LIABILITIES AND EQUITY:                                
Noninterest-bearing deposits $ 7,929,933     $ 7,968,769     $ 6,564,195     $ 3,980,811     $ 3,919,746     $ (38,836 )   (0.5 )   $ 4,010,187     102.3 %
Interest-bearing deposits:                                  
Checking 5,990,309     5,891,566     4,805,843     2,479,814     2,457,767     98,743     1.7     3,532,542     143.7  
Savings 8,589,815     8,404,460     7,676,165     6,452,510     6,253,992     185,355     2.2     2,335,823     37.3  
Money market 4,792,248     4,463,476     3,490,922     1,430,556     1,490,631     328,772     7.4     3,301,617     N.M.  
Certificates of deposit 7,329,632     7,825,573     7,320,720     4,527,822     4,622,120     (495,941 )   (6.3 )   2,707,512     58.6  
Total interest-bearing deposits 26,702,004     26,585,075     23,293,650     14,890,702     14,824,510     116,929     0.4     11,877,494     80.1  
Total deposits 34,631,937     34,553,844     29,857,845     18,871,513     18,744,256     78,093     0.2     15,887,681     84.8  
Borrowings:                                  
Short-term borrowings 2,689,262     2,585,682     1,884,228     321,043     293,499     103,580     4.0     2,395,763     N.M.  
Long-term borrowings 2,608,204     1,739,852     1,472,150     1,657,527     1,500,832     868,352     49.9     1,107,372     73.8  
Total borrowings 5,297,466     4,325,534     3,356,378     1,978,570     1,794,331     971,932     22.5     3,503,135     195.2  
Total interest-bearing liabilities 31,999,470     30,910,609     26,650,028     16,869,272     16,618,841     1,088,861     3.5     15,380,629     92.5  
Total deposits and borrowings 39,929,403     38,879,378     33,214,223     20,850,083     20,538,587     1,050,025     2.7     19,390,816     94.4  
Accrued expenses and other liabilities 1,425,536     1,549,017     1,197,014     969,723     989,104     (123,481 )   (8.0 )   436,432     44.1  
Total liabilities 41,354,939     40,428,395     34,411,237     21,819,806     21,527,691     926,544     2.3     19,827,248     92.1  
Total TCF Financial Corporation shareholders' equity 5,605,159     5,667,436     4,657,613     2,634,386     2,554,729     (62,277 )   (1.1 )   3,050,430     119.4  
Non-controlling interest in subsidiaries 25,328     23,683     25,516     29,630     24,521     1,645     6.9     807     3.3  
Total equity 5,630,487     5,691,119     4,683,129     2,664,016     2,579,250     (60,632 )   (1.1 )   3,051,237     118.3  
Total liabilities and equity $ 46,985,426     $ 46,119,514     $ 39,094,366     $ 24,483,822