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Press Release

TCF Reports 65th Consecutive Quarter of Net Income – Earns $29.8 Million

Company Release - 7/21/2011 8:00 AM ET

SECOND QUARTER HIGHLIGHTS

  • Diluted earnings per common share of 19 cents
  • Net income of $29.8 million
  • Net interest margin of 4.02 percent
  • Average deposits increased $227.7 million, or 1.9 percent, from the first quarter of 2011
  • Announced quarterly cash dividend of 5 cents per common share, payable August 31, 2011

WAYZATA, Minn.--(BUSINESS WIRE)-- TCF Financial Corporation (NYSE:TCB):

Earnings Summary      

 

           

 

         

Table 1

($ in thousands, except per-share data)         Percent Change      
2Q1Q2Q

2Q11 vs

 

2Q11 vs

YTDYTD

Percent

2011   2011     2010    

1Q11

 

2Q10

  2011   2010  

Change

Net income $ 29,837 $ 29,686 $ 45,025

.5

%

(33.7

)

%

$ 59,523 $ 78,946

(24.6

)

%

Diluted earnings per common share

.19

.20

.32

(5.0

)

(40.6

)

.39

.58

(32.8

)

 

Financial Ratios (1)

Return on average assets

.67

%

.66

% 1.02 %

.67

%

.89

%
Return on average common equity 6.86 7.84 12.71 7.32 11.75
Net interest margin 4.02 4.06 4.19 4.04

4.20

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

1.19 1.51

1.30

1.35 1.26
 
(1) Annualized.
 

TCF Financial Corporation (“TCF”) (NYSE:TCB) today reported net income for the second quarter of 2011 of $29.8 million, compared with $45 million in the second quarter of 2010 and $29.7 million in the first quarter of 2011. Diluted earnings per common share was 19 cents for the second quarter of 2011, compared with 32 cents in the second quarter of 2010 and 20 cents in the first quarter of 2011.

Net income for the first six months of 2011 was $59.5 million, compared with $78.9 million for the same 2010 period. Diluted earnings per common share for the first six months of 2011 was 39 cents, compared with 58 cents for the same 2010 period.

TCF declared a quarterly cash dividend of five cents per common share payable on August 31, 2011 to stockholders of record at the close of business on July 29, 2011.

Chairman’s Statement

“TCF’s 65th consecutive quarter of profitability saw many encouraging developments including favorable overall credit trends and strong new checking account production,” said William A. Cooper, TCF Chairman and Chief Executive Officer. “Much of the uncertainty surrounding the Durbin Amendment was also eliminated during the quarter following the Federal Reserve Board’s issuance of their final rule on debit card interchange and our decision to dismiss our lawsuit challenging the constitutionality of the Durbin Amendment. We feel our lawsuit served its purpose in reducing the final impact of the Durbin Amendment and are encouraged that the Federal Reserve Board’s final rule took into consideration many of the points we made in our case.

“Our focus remains on positioning TCF for future growth and success. This includes analyzing various opportunities to grow the balance sheet and working toward continuing our favorable overall credit quality trends. Certainly, we have continued to evaluate potential strategies to mitigate the lost debit card interchange revenue. We believe the industry will be making changes to products and fees in the fourth quarter and TCF expects to be implementing its new product and fee structures in the fourth quarter. I am confident that as the market continues to adjust to the new regulatory environment, we will find the appropriate solutions for the benefit of our shareholders and customers.”

     
Total Revenue   Table 2
  Percent Change      
($ in thousands)   2Q

2011

  1Q

2011

  2Q

2010

 

2Q11 vs
1Q11

 

2Q11 vs
2Q10

 

YTD

2011

 

YTD

2010

 

Percent
Change

Net interest income $ 176,150     $ 174,040     $ 176,499   1.2 %   (.2 )% $ 350,190     $ 351,161   (.3 )%
Fees and other revenue:    
Fees and service charges 56,396 53,513 77,845 5.4 (27.6 ) 109,909 144,017 (23.7 )
Card revenue 28,219 26,584 28,591 6.2 (1.3 ) 54,803 55,663 (1.5 )
ATM revenue   7,091       6,705       7,844   5.8 (9.6 )   13,796       14,866   (7.2 )
Total banking fees 91,706 86,802 114,280 5.6 (19.8 ) 178,508 214,546 (16.8 )

Leasing and equipment finance

22,279

 

26,750 20,528 (16.7 ) 8.5 49,029 40,880 19.9
Other   384       694       1,235   (44.7 ) (68.9 )   1,078       3,690   (70.8 )
Total fees and other revenue   114,369       114,246       136,043   .1 (15.9 )   228,615       259,116   (11.8 )
Subtotal 290,519 288,286 312,542 .8 (7.0 ) 578,805 610,277 (5.2 )
Losses on securities   (227 )     -       (137 ) N.M. (65.7 )   (227 )     (567 ) 60.0
Total revenue $ 290,292     $ 288,286     $ 312,405   .7 (7.1 ) $ 578,578     $ 609,710   (5.1 )
 
Net interest margin(1) 4.02 % 4.06 % 4.19 % 4.04 % 4.20 %

Fees and other revenue as a % of total revenue

39.40 39.63 43.55 39.51 42.50
 
N.M. = Not meaningful.
(1) Annualized.                                
 

Net Interest Income

  • Net interest income increased $2.1 million, or 1.2 percent, from the first quarter of 2011 and was relatively flat with the second quarter of 2010. The increase in net interest income from the first quarter of 2011 was primarily due to growth in the higher-yielding inventory finance portfolio, decreased rates paid on deposits and a decrease in interest expense on borrowings. These changes were partially offset by the impact of operating in a lower interest rate environment and growth in lower yielding variable-rate consumer real estate and commercial loans.
  • Net interest margin in the second quarter of 2011 was 4.02 percent, compared with 4.19 percent in the second quarter of 2010 and 4.06 percent in the first quarter of 2011. The decrease in net interest margin from both periods was primarily due to increased asset liquidity and growth in variable-rate loans and leases at lower yields as a result of the lower interest rate environment. These changes were partially offset by the lower average cost of deposits and borrowings.
  • As a result of higher regulatory liquidity expectations across the industry, TCF increased its asset liquidity during the second quarter of 2011. Interest-bearing deposits held at the Federal Reserve and unencumbered securities were $859 million at June 30, 2011, an increase of $616 million from the second quarter of 2010 and $23 million from the first quarter of 2011. The increased asset liquidity position, which includes maintaining $115 million of securities in anticipation of the future redemption of the trust preferred securities, negatively impacted net interest margin for the second quarter of 2011 by 8 basis points compared to the second quarter of 2010 and by 3 basis points from the first quarter of 2011.
  • TCF has been repositioning its balance sheet for an eventual increase in interest rates. While this has negatively impacted the net interest margin rate in the short term, TCF’s balance sheet is in an asset sensitive position, based on TCF’s one-year interest rate gap assumptions, of 6.1 percent of total assets as of June 30, 2011, up from an asset sensitive position of 5.4 percent of total assets as of March 31, 2011. Variable-rate interest-earning assets comprised 16.4 percent of total interest earning assets at June 30, 2011, up from 12.8 percent at June 30, 2010 and down slightly from 16.6 percent at March 31, 2011.

Non-interest Income

  • Banking fees and service charges in the second quarter of 2011 were $56.4 million, down $21.4 million, or 27.6 percent, from the second quarter of 2010 and up $2.9 million, or 5.4 percent, from the first quarter of 2011. The decrease in banking fees and services charges from the second quarter of 2010 was primarily due to decreased activity-based fee revenue as a result of a change in overdraft fee regulations in the third quarter of 2010, changes in customer banking and spending behavior and lower monthly maintenance fees as more customers qualified for fee waivers. The increase in banking fees and service charges from the first quarter of 2011 was primarily due to higher seasonal transaction activity.
  • Card revenues were $28.2 million in the second quarter of 2011, down $372 thousand, or 1.3 percent, from the second quarter of 2010 and up $1.6 million, or 6.2 percent, from the first quarter of 2011. The decrease in card revenue from the second quarter of 2010 was primarily due to a decrease in the average interchange rate. The increase in card revenue from the first quarter of 2011 was primarily due to seasonal transaction volume.
  • On June 29, 2011, the Federal Reserve issued its final debit card interchange rules, establishing a debit card interchange fee cap. These rules are effective October 1, 2011 and apply to issuers that, together with their affiliates, have assets of $10 billion or more. These regulations are estimated to reduce TCF’s card interchange revenue by approximately 50 percent ($50-$60 million annually).
  • Leasing and equipment finance revenues were $22.3 million in the second quarter of 2011, up $1.8 million, or 8.5 percent, from the second quarter of 2010 and down $4.5 million, or 16.7 percent, from the first quarter of 2011. The increase from the second quarter of 2010 was due to increased sales-type lease revenues. The decrease from the first quarter of 2011 was due to a higher level of customer initiated lease activity during the first quarter of 2011.

Loans and Leases

     
Average Loans and Leases   Table 3
        Percent Change      
($ in thousands) 2Q

2011

  1Q

2011

  2Q

2010

  2Q11 vs

1Q11

 

2Q11 vs
2Q10

  YTD

2011

  YTD

2010

 

Percent
Change

Consumer real estate  
First mortgage lien $ 4,838,896 $ 4,863,679 $ 4,930,801 (.5 ) % (1.9 ) % $ 4,851,219 $ 4,938,594 (1.8 ) %
Junior lien   2,195,552     2,238,280     2,303,400 (1.9 ) (4.7 )   2,216,799     2,307,841 (3.9 )
Total 7,034,448 7,101,959 7,234,201 (1.0 ) (2.8 ) 7,068,018 7,246,435 (2.5 )
Consumer other   19,463     21,757     27,584 (10.5 ) (29.4 )   20,603     28,988 (28.9 )
Total consumer 7,053,911 7,123,716 7,261,785 (1.0 ) (2.9 ) 7,088,621 7,275,423 (2.6 )
Commercial 3,597,644 3,623,463 3,721,815 (.7 ) (3.3 ) 3,610,481 3,712,079 (2.7 )

Leasing and equipment finance

3,068,550 3,119,669 3,021,532 (1.6 ) 1.6 3,093,969 3,032,537 2.0
Inventory finance   978,505     872,785     692,816 12.1 41.2   925,913     623,283 48.6
Total $ 14,698,610   $ 14,739,633   $ 14,697,948 (.3 ) - $ 14,718,984   $ 14,643,322 .5

 

                                                 
  • Average consumer real estate loan balances decreased $199.8 million, or 2.8 percent, from the second quarter of 2010 and decreased $67.5 million, or 1 percent, from the first quarter of 2011. Decreases from both periods reflect a decline in production of new loans along with a more competitive environment for those borrowers who meet TCF’s underwriting criteria.
  • Variable-rate consumer real estate loans increased $298 million from June 30, 2010 and $11.9 million from March 31, 2011, while fixed-rate consumer real estate loans decreased $497.8 million from June 30, 2010 and $79.4 million from March 31, 2011. Variable-rate loans comprised 34.1 percent of total consumer real estate loans at June 30, 2011, up from 29.8 percent at June 30, 2010 and 33.6 percent at March 31, 2011.
  • Average commercial loan balances in the second quarter of 2011 decreased $124.2 million, or 3.3 percent, from the second quarter of 2010 and decreased $25.8 million, or .7 percent, from the first quarter of 2011. The decreases for both periods were primarily due to higher levels of repayments, partially offset by an increase in loan originations and renewals. Commercial loan originations and renewals of $307.7 million during the first six months of 2011 represent an increase of $25.9 million, or 9.2 percent, compared to the first six months of 2010.
  • Average leasing and equipment finance loan and lease balances in the second quarter of 2011 increased $47 million, or 1.6 percent, from the second quarter of 2010 and decreased $51.1 million, or 1.6 percent, from the first quarter of 2011. The increase from the second quarter of 2010 was primarily due to a portfolio acquisition completed in the third quarter of 2010. The decrease from the first quarter of 2011 was primarily due to runoff of acquired portfolios, partially offset by increased originations. Leasing and equipment finance originations of $654.9 million during the first six months of 2011 represent an increase of $74.9 million, or 12.9 percent, compared to the first six months of 2010.
  • Average inventory finance loans were $978.5 million in the second quarter of 2011, an increase of $285.7 million, or 41.2 percent, from the second quarter of 2010. Average inventory finance loans increased $105.7 million, or 12.1 percent, from the first quarter of 2011. The increase from the second quarter of 2010 was primarily due to TCF’s entrance into the power sports industry in the third quarter of 2010. The increase from the first quarter of 2011 was primarily due to seasonal growth in receivables from lawn and garden programs.

Credit Quality

(Table 4 - Credit Trends: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=6799775&lang=en)

  • Overall favorable trends in credit quality are continuing as the level of non-performing assets, net charge-offs and over 60-day delinquencies have remained below the peak levels in 2010.
                             
Credit Quality Summary of Performing and Underperforming Loans and Leases       Table 5

($ in thousands)

 

Performing Loans and Leases

 

60+ Days
Delinquent and

 

Accruing

 

Non-accrual

 

Total Loans

June 30, 2011:

Non-classified   Classified(1)   Total   Accruing(2)   TDRs   Loans and Leases   and Leases
Consumer real estate and other $ 6,492,656   $ -   $ 6,492,656 $ 68,546 $ 343,610 $ 150,938 $ 7,055,750
Commercial 3,070,765 375,210 3,445,975 899 27,114 140,407 3,614,395
Leasing and equipment finance 2,987,135 33,625 3,020,760 5,436 - 29,682 3,055,878
Inventory finance   900,630       4,509       905,139       149       -       634       905,922  
Total loans and leases $ 13,451,186     $ 413,344     $ 13,864,530     $ 75,030     $ 370,724     $ 321,661     $ 14,631,945  
Percent of total loans and leases 92.0 % 2.8 % 94.8 % .5 % 2.5 % 2.2 % 100.0 %
                             
Performing Loans and Leases

60+ Days
Delinquent and

Accruing Non-accrual Total Loans

March 31, 2011:

Non-classified   Classified(1)   Total   Accruing(2)   TDRs   Loans and Leases   and Leases
Consumer real estate and other $ 6,532,544 $ - $ 6,532,544 $ 67,409 $ 341,989 $ 155,233 $ 7,097,175
Commercial 3,053,296 407,978 3,461,274 1,864 17,473 127,745 3,608,356
Leasing and equipment finance 3,001,249 34,443 3,035,692 9,640 - 34,634 3,079,966
Inventory finance   1,005,837       3,496       1,009,333       274       -       1,437       1,011,044  
Total loans and leases $ 13,592,926     $ 445,917     $ 14,038,843     $ 79,187     $ 359,462     $ 319,049     $ 14,796,541  
Percent of total loans and leases 91.9 % 3.0 % 94.9 % .5 % 2.4 % 2.2 % 100.0 %
 
(1) Excludes classified loans and leases that are 60+ days delinquent and accruing or accruing TDRs.
(2) Excludes accruing TDRs that are 60+ days delinquent.

At June 30, 2011:

  • The combined balance of performing classified loans and leases, over 60-day delinquent and accruing loans and leases, accruing TDRs and non-accrual loans and leases decreased $22.9 million, or 1.9 percent from the first quarter of 2011. This was primarily due to an increase in the amount of performing classified commercial loans migrating to non-classified status.
  • Over 60-day delinquency rate was .73 percent, down from .87 percent at June 30, 2010 and up from .69 percent at March 31, 2011. The decrease from the second quarter of 2010 was primarily due to decreases in consumer real estate and leasing and equipment finance delinquencies. The increase from the first quarter of 2011 was primarily due to a small number of new commercial delinquencies, partially offset by decreases in leasing and equipment finance delinquencies.
  • Total non-accrual loans and leases and other real estate owned (non-performing assets) were $458.2 million at June 30, 2011, an increase of $10 million, or 2.2 percent, from June 30, 2010 and a decrease of $3 million, or .7 percent, from March 31, 2011. Non-accrual loans and leases decreased $8.5 million, or 2.6 percent, from June 30, 2010 as a $19.1 million decrease in leasing and equipment finance loans and leases was partially offset by one $15.9 million commercial credit that was placed on non-accrual in the most recent quarter and had previously been reserved for. Excluding this one credit, the new inflows to non-accrual status fell for the third consecutive quarter.
  • Other real estate owned was $136.5 million at June 30, 2011, a decrease of $5.7 million from March 31, 2011, primarily due to sales of consumer real estate properties exceeding additions during the quarter.

Allowance for Loan and Lease Losses

                                                     
Credit Quality Summary              

 

                             

Table 6

   
       

Percent Change

     
($ in thousands) 2Q1Q2Q2Q11 vs   2Q11 vsYTDYTDPercent
2011     2011     2010     1Q11     2Q10       2011     2010     Change    
Allowance for Loan and Lease Losses
Balance at beginning of period $ 255,308 $ 265,819 $ 250,430 (4.0 ) % 1.9 % $ 265,819 $ 244,471 8.7 %
Charge-offs (48,457 ) (61,104 ) (53,654 ) (20.7 ) (9.7 ) (109,561 ) (104,205 ) 5.1
Recoveries   4,612         5,292         5,854   (12.8 ) (21.2 )   9,904         11,873   (16.6 )
Net charge-offs (43,845 ) (55,812 ) (47,800 ) (21.4 ) (8.3 ) (99,657 ) (92,332 ) 7.9
Provision for credit losses 44,005 45,274 49,013 (2.8 ) (10.2 ) 89,279 99,504 (10.3 )
Other   4         27         -   (85.2 ) N.M.   31         -   N.M.
Balance at end of period $ 255,472       $ 255,308       $ 251,643   .1 1.5 $ 255,472       $ 251,643   1.5
 

Net charge-offs as a percentage of average loans and leases(1)

Consumer real estate and other:
First mortgage lien 1.78 % 1.81 % 1.36 % (3 ) bps 42 bps 1.80 % 1.34 % 46 bps
Junior lien 2.75 2.39 2.20 36 55 2.56 2.22 34
Total consumer real estate 2.09 1.99 1.63 10 46 2.04 1.62 42
Total consumer real estate and other 2.12 1.97 1.71 15 41 2.04 1.67 37
Commercial .30 1.96 .98 (166 ) (68 ) 1.13 .91 22
Leasing and equipment finance .45 .36 .99 9 (54 ) .41 .93 (52 )
Inventory finance .13 .10 .04 3 9 .12 .16 (4 )
Total 1.19 1.51 1.30 (32 ) (11 ) 1.35 1.26 9
 

Allowance as a percentage of period end loans and leases

1.75 % 1.73 % 1.72 %
Ratio of allowance to net charge-offs(1) 1.5 X 1.1 X 1.3 X
 
N.M. = Not meaningful.
(1) Annualized.                                                    

At June 30, 2011:

  • Allowance for loan and lease losses was $255.5 million, or 1.75 percent of loans and leases, compared with $251.6 million, or 1.72 percent, at June 30, 2010 and $255.3 million, or 1.73 percent, at March 31, 2011.

For the quarter ended June 30, 2011:

  • Provision for credit losses was $44 million, down from $49 million in the second quarter of 2010 and down from $45.3 million recorded in the first quarter of 2011. The decrease from the second quarter of 2010 was primarily due to decreased net charge-offs and reserves in the commercial and leasing and equipment finance portfolios as customer performance improved. The decrease from the first quarter of 2011 was primarily due to decreased commercial and leasing and equipment finance net charge-offs, partially offset by increased consumer real estate net charge-offs.
  • Net loan and lease charge-offs were $43.8 million, or 1.19 percent, annualized, of average loans and leases, down from $47.8 million, or 1.30 percent, annualized, in the second quarter of 2010 and down from $55.8 million, or 1.51 percent, annualized, in the first quarter of 2011. The decrease from the second quarter of 2010 was primarily due to decreases in commercial and leasing and equipment finance, partially offset by increases in consumer real estate, primarily in Illinois. The decrease from the first quarter of 2011 was due primarily to decreases in commercial net charge-offs.

Deposits

     
Average Deposits   Table 7
        Percent Change      

($ in thousands)

2Q

2011

  1Q

2011

  2Q

2010

  2Q11 vs

1Q11

  2Q11 vs

2Q10

  YTD

2011

  YTD

2010

  Percent

Change

 
Checking $ 4,570,543 $ 4,501,931 $ 4,529,356 1.5 % .9 % $ 4,536,427 $ 4,468,434 1.5 %
Savings 5,628,249 5,444,381 5,494,723 3.4 2.4 5,536,823 5,429,359 2.0
Money market   648,862       673,503       660,654   (3.7 ) (1.8 )   661,114       664,595   (.5 )
Subtotal 10,847,654 10,619,815 10,684,733 2.1 1.5 10,734,364 10,562,388 1.6
Certificates   1,092,368       1,092,537       1,044,008   - 4.6   1,092,452       1,085,349   .7
Total deposits $ 11,940,022     $ 11,712,352     $ 11,728,741   1.9 1.8 $ 11,826,816     $ 11,647,737   1.5
 
Total new checking accounts 120,281 97,459 114,654 23.4 % 4.9 % 217,740 247,079 (11.9 )%
Average interest rate on deposits     .38 %     .42 %     .56 %             .40 %     .59 %    
 
  • Total average deposits increased $211.3 million, or 1.8 percent, from the second quarter of 2010 primarily due to various targeted marketing campaigns as well as increases in checking account production and savings account balances. Average savings balances increased $133.5 million, or 2.4 percent, from the second quarter of 2010. Total new checking accounts increased 4.9 percent from the second quarter of 2010. Total average deposits increased $227.7 million, or 1.9 percent from the first quarter of 2011, primarily due to increases in the number of savings accounts.
  • The average interest cost of deposits in the second quarter of 2011 was .38 percent, down 18 basis points from the second quarter of 2010 and down 4 basis points from the first quarter of 2011. Declines in the average interest cost of deposits were primarily due to pricing strategies on certain deposit products, mix changes and lower market interest rates. The weighted average interest rate on deposits was .40 percent at June 30, 2011.

Non-interest Expense

     
Non-interest Expense   Table 8
        Percent Change      
($ in thousands) 2Q

2011

  1Q

2011

  2Q

2010

  2Q11 vs

1Q11

  2Q11 vs

2Q10

  YTD

2011

  YTD

2010

  Percent

Change

Compensation and employee benefits

$ 89,997 $ 90,273 $ 86,983 (.3 )%   3.5 % $ 180,270 $ 175,208 2.9 %
Occupancy and equipment 30,783 32,159 31,311 (4.3 ) (1.7 ) 62,942 63,492 (.9 )
FDIC insurance 7,542 7,195 5,219 4.8 44.5 14,737 10,700 37.7
Deposit account premiums 6,166 3,198 5,478 92.8 12.6 9,364 12,276 (23.7 )
Advertising and marketing 3,479 3,160 3,734 10.1 (6.8 ) 6,639 6,554 1.3
Other   37,067     34,566     35,053 7.2 5.7   71,633     69,463 3.1
Core operating expenses 175,034 170,551 167,778 2.6 4.3 345,585 337,693 2.3

Foreclosed real estate and repossessed assets, net

12,617 12,868 8,756 (2.0 ) 44.1 25,485 18,016 41.5
Operating lease depreciation 7,859 7,928 9,812 (.9 ) (19.9 ) 15,787 19,852 (20.5 )
Other credit costs, net   496     2,548     2,723 (80.5 ) (81.8 )   3,044     5,310 (42.7 )
Total non-interest expense $ 196,006   $ 193,895   $ 189,069   1.1 3.7 $ 389,901   $ 380,871 2.4
                                 
 
  • Compensation and employee benefits expense in the second quarter of 2011 increased $3 million, or 3.5 percent, from the second quarter of 2010 and was relatively flat with the first quarter of 2011. The increase from the second quarter of 2010 was primarily due to production related compensation as a result of growth in the specialty finance business.
  • FDIC insurance expense increased $2.3 million, or 44.5 percent, from the second quarter of 2010 and increased $347 thousand, or 4.8 percent, from the first quarter of 2011. The increases were primarily the result of changes in the FDIC insurance rate calculations for banks over $10 billion in total assets, which were implemented on April 1, 2011. As a result of the FDIC’s clarification of certain items in the new rate calculations, TCF now expects 2011 expense to be approximately $7 million higher than 2010.
  • Deposit account premiums increased $688 thousand, or 12.6 percent, from the second quarter of 2010 and increased $3 million, or 92.8 percent, from the first quarter of 2011. The increase from the second quarter of 2010 was primarily due to changes in the account premium programs beginning in April 2011, which increased the premiums paid for each qualified account. The increase from the first quarter of 2011 was primarily due to increased production of checking accounts that qualified for premiums.
  • Foreclosed real estate and repossessed asset expense increased $3.9 million, or 44.1 percent, from the second quarter of 2010 and decreased $251 thousand, or 2 percent, from the first quarter of 2011. The increase from the second quarter of 2010 was primarily due to an increase in the number of consumer real estate properties owned and the related expenses, continued valuation writedowns on both consumer and commercial real estate properties and increased property tax expenses. The decrease from the first quarter of 2011 was primarily due to a decrease in the number of consumer real estate properties owned and the associated expenses.

Capital and Borrowing Capacity

                 
Capital Information               Table 9
At period end        
($ in thousands, except per-share data)

2Q

2011

4Q

2010

Total equity $ 1,769,645 $ 1,480,163
Total equity to total assets 9.40 % 8.02 %
Book value per common share $ 11.00 $ 10.30
Tangible realized common equity to tangible assets(1) 8.71 % 7.37 %
 
 
Risk-based capital
Tier 1 $ 1,757,410 12.72 % $ 1,475,525 10.59 %
Total 2,049,616 14.83 1,808,412 12.98

Excess over stated “10% well-capitalized” requirement

667,622 4.83 415,502 2.98
 
Tier 1 common capital(2) $ 1,629,030 11.79 % $ 1,352,025 9.71 %
 

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

(2) Excludes the effect of qualifying trust preferred securities and qualifying non-controlling interest in subsidiaries (see “Reconciliation of GAAP to Non-GAAP Measures” table).

 
  • Total risk-based capital at June 30, 2011 of $2 billion, or 14.83 percent of risk-weighted assets, was $667.6 million in excess of the stated “10 percent well-capitalized” requirement.
  • On July 18, 2011, the Board of Directors of TCF declared a regular quarterly cash dividend of five cents per common share payable on August 31, 2011 to stockholders of record at the close of business on July 29, 2011.
  • At June 30, 2011, TCF had $1.8 billion in unused, secured borrowing capacity at the FHLB of Des Moines and $518 million in unused, secured borrowing capacity at the Federal Reserve Discount Window.

Website Information

A live webcast of TCF’s conference call to discuss second quarter earnings will be hosted at TCF’s website, http://ir.tcfbank.com, on July 21, 2011 at 10:00 a.m. CT. Additionally, the webcast is available for replay at TCF’s website after the conference call. The website also includes free access to company news releases, TCF’s annual report, quarterly reports, investor presentations and SEC filings.

 

TCF is a Wayzata, Minnesota-based national bank holding company with $18.8 billion in total assets. TCF has 439 branches in Minnesota, Illinois, Michigan, Colorado, Wisconsin, Indiana, Arizona and South Dakota, providing retail and commercial banking services. TCF also conducts commercial leasing and equipment finance business in all 50 states and commercial inventory finance business in the U.S. and Canada. For more information about TCF, please visit www.tcfbank.com.

 

Forward-Looking Information

This earnings release and other reports issued by the Company, including reports filed with the SEC, may contain “forward-looking” statements that deal with future results, plans or performance. In addition, TCF’s management may make such statements orally to the media, or to securities analysts, investors or others. Forward-looking statements deal with matters that do not relate strictly to historical facts. TCF’s future results may differ materially from historical performance and forward-looking statements about TCF’s expected financial results or other plans and are subject to a number of risks and uncertainties. These include, but are not limited to the following:

Adverse Economic or Business Conditions, Credit and Other Risks.Deterioration in general economic and banking industry conditions, including defaults, anticipated defaults or rating agency downgrades of sovereign debt (including debt of the United States), or continued high rates of or 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 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; and foreign currency exchange risks.

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 adverse conditions in the banking industry, the economic impact on banks of the Dodd-Frank Act and other regulatory reform legislation; the impact of financial regulatory reform, including the phase out of trust preferred securities in tier 1 capital called for by the Dodd-Frank Act, or additional capital, leverage, liquidity and risk management requirements or changes in the composition of qualifying regulatory capital; 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; possible regulatory and other changes to the Federal Home Loan Bank System that may affect TCF’s borrowing capacity; costs associated with new regulatory requirements or interpretive guidance relating to liquidity.

Legislative and Regulatory Requirements.New consumer protection and supervisory requirements, including the Dodd-Frank Act’s creation of a new Bureau of Consumer Financial Protection 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 Dodd-Frank Act, or other legislative or regulatory developments such as mortgage foreclosure moratorium laws or imposition of underwriting or other limitations that impact the ability to use certain variable-rate products; reduction of interchange revenue from debit card transactions resulting from the so-called Durbin Amendment to the Dodd-Frank Act, which limits debit card interchange fees; 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); deficiencies in TCF’s compliance under the Bank Secrecy Act in past or future periods, which may result in regulatory enforcement action including monetary penalties; increased health care costs resulting from Federal health care reform legislation; adverse regulatory examinations and resulting enforcement actions or other adverse consequences such as increased capital requirements or higher deposit insurance assessments; heightened regulatory practices, requirements or expectations, including, but not limited to, requirements related to the Bank Secrecy Act and anti-money laundering compliance activity.

Other Risks Relating to Fee Income.Future effects on fee income following TCF’s implementation of regulatory requirements that prohibit financial institutions from charging overdraft fees on point-of-sale and ATM transactions unless customers opt-in, including customer opt-in preferences which may have an adverse impact on TCF’s fee revenue; and uncertainties relating to future retail deposit account changes such as charging a daily negative balance fee in lieu of per item overdraft fees or other significant changes, including limitations on TCF’s ability to predict customer behavior and the impact on TCF’s fee revenues.

Litigation Risks.Results of litigation, including class action litigation concerning TCF’s lending or deposit activities including account servicing processes 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 Risk.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; federal or state monetary, fiscal or tax policies, 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. TCF assumes no obligation to update forward-looking information contained in this release as a result of new information or future events or developments.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per-share data)
(Unaudited)
             
Three Months Ended
June 30,Change
20112010$

%

Interest income:
Loans and leases$213,823$221,913$(8,090)(3.6)

%

Securities available for sale20,63921,065(426)(2.0)
Investments and other   1,836     1,236     600   48.5
Total interest income   236,298     244,214     (7,916)(3.2)
Interest expense:
Deposits11,43016,281(4,851)(29.8)
Borrowings   48,718     51,434     (2,716)(5.3)
Total interest expense   60,148     67,715     (7,567)(11.2)
Net interest income176,150176,499(349)(.2)
Provision for credit losses   44,005     49,013     (5,008)(10.2)
Net interest income after provision for credit losses   132,145     127,486     4,659   3.7
Non-interest income:
Fees and service charges56,39677,845(21,449)(27.6)
Card revenue28,21928,591(372)(1.3)
ATM revenue   7,091     7,844     (753)(9.6)
Subtotal91,706114,280(22,574)(19.8)
Leasing and equipment finance22,27920,5281,7518.5
Other   384     1,235     (851)(68.9)
Fees and other revenue114,369136,043(21,674)(15.9)
Losses on securities   (227)   (137)   (90)65.7
Total non-interest income   114,142     135,906     (21,764)(16.0)
Non-interest expense:
Compensation and employee benefits89,99786,9833,0143.5
Occupancy and equipment30,78331,311(528)(1.7)
FDIC insurance7,5425,2192,32344.5
Deposit account premiums6,1665,47868812.6
Advertising and marketing3,4793,734(255)(6.8)
Other   37,067     35,053     2,014   5.7
Subtotal175,034167,7787,2564.3
Foreclosed real estate and repossessed assets, net12,6178,7563,86144.1
Operating lease depreciation7,8599,812(1,953)(19.9)
Other credit costs, net   496     2,723     (2,227)(81.8)
Total non-interest expense   196,006     189,069     6,937   3.7
Income before income tax expense50,28174,323(24,042)(32.3)
Income tax expense   18,758     28,112     (9,354)(33.3)
Income after income tax expense31,52346,211(14,688)(31.8)
Income attributable to non-controlling interest   1,686     1,186     500   42.2
Net income available to common stockholders$29,837   $45,025   $(15,188)(33.7)
 
Net income per common share:
Basic$.19$.32$(.13)(40.6)
Diluted.19.32(.13)(40.6)
 
Dividends declared per common share$.05$.05$--
 
Average common and common equivalent shares outstanding (in thousands):
Basic157,064140,35216,71211.9
Diluted157,463140,63316,83012.0
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per-share data)
(Unaudited)
             
Six Months Ended
June 30,Change
20112010$%
Interest income:
Loans and leases$428,496$443,177$(14,681)(3.3)

%

Securities available for sale40,06842,472(2,404)(5.7)
Investments and other   3,637     2,377     1,260   53.0
Total interest income   472,201     488,026     (15,825)(3.2)
Interest expense:
Deposits23,43433,885(10,451)(30.8)
Borrowings   98,577     102,980     (4,403)(4.3)
Total interest expense   122,011     136,865     (14,854)(10.9)
Net interest income350,190351,161(971)(.3)
Provision for credit losses   89,279     99,504     (10,225)(10.3)
Net interest income after provision for credit losses   260,911     251,657     9,254   3.7
Non-interest income:
Fees and service charges109,909144,017(34,108)(23.7)
Card revenue54,80355,663(860)(1.5)
ATM revenue   13,796     14,866     (1,070)(7.2)
Subtotal178,508214,546(36,038)(16.8)
Leasing and equipment finance49,02940,8808,14919.9
Other   1,078     3,690     (2,612)(70.8)
Fees and other revenue228,615259,116(30,501)(11.8)
Losses on securities   (227)   (567)   340   (60.0)
Total non-interest income   228,388     258,549     (30,161)(11.7)
Non-interest expense:
Compensation and employee benefits180,270175,2085,0622.9
Occupancy and equipment62,94263,492(550)(.9)
FDIC insurance14,73710,7004,03737.7
Deposit account premiums9,36412,276(2,912)(23.7)
Advertising and marketing6,6396,554851.3
Other   71,633     69,463     2,170   3.1
Subtotal345,585337,6937,8922.3
Foreclosed real estate and repossessed assets, net25,48518,0167,46941.5
Operating lease depreciation15,78719,852(4,065)(20.5)
Other credit costs, net   3,044     5,310     (2,266)(42.7)
Total non-interest expense   389,901     380,871     9,030   2.4
Income before income tax expense99,398129,335(29,937)(23.1)
Income tax expense   37,200     48,902     (11,702)(23.9)
Income after income tax expense62,19880,433(18,235)(22.7)
Income attributable to non-controlling interest   2,675     1,487     1,188   79.9
Net income available to common stockholders$59,523   $78,946   $(19,423)(24.6)
 
Net income per common share:
Basic$.39$.58$(.19)(32.8)
Diluted.39.58(.19)(32.8)
 
Dividends declared per common share$.10$.10$--
 
Average common and common equivalent shares outstanding (in thousands):
Basic150,765136,37014,39510.6
Diluted151,136136,52414,61210.7
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except per-share data)
(Unaudited)
           
AtAtAt% Change From
June 30,December 31,June 30,December 31,June 30,
20112010201020102010
ASSETS
 
Cash and due from banks$752,504$663,901$387,67513.3%94.1

%

Investments161,830179,768159,576(10.0)1.4
Securities available for sale2,463,3671,931,1741,940,33127.627.0
Loans and leases:
Consumer real estate and other7,055,7507,195,2697,289,499(1.9)(3.2)
Commercial3,614,3953,646,2033,705,916(.9)(2.5)
Leasing and equipment finance3,055,8783,154,4783,000,239(3.1)1.9
Inventory finance   905,922     792,354     644,239   14.340.6
Total loans and leases14,631,94514,788,30414,639,893(1.1)(.1)
Allowance for loan and lease losses   (255,472)   (265,819)   (251,643)3.9(1.5)
Net loans and leases14,376,47314,522,48514,388,250(1.0)(.1)
Premises and equipment, net439,884443,768447,266(.9)(1.7)
Goodwill152,599152,599152,599--
Other assets   487,786     571,330     554,348   (14.6)(12.0)
Total assets$18,834,443   $18,465,025   $18,030,045   2.04.5
 
LIABILITIES AND EQUITY
 
Deposits:
Checking$4,496,756$4,530,064$4,406,752(.7)2.0
Savings5,715,1265,390,8025,498,5356.03.9
Money market   643,706     635,922     633,255   1.21.7
Subtotal10,855,58810,556,78810,538,5422.83.0
Certificates of deposit   1,083,888     1,028,327     984,501   5.410.1
Total deposits   11,939,476     11,585,115     11,523,043   3.13.6
Short-term borrowings9,514126,79014,805(92.5)(35.7)
Long-term borrowings   4,415,362     4,858,821     4,600,820   (9.1)(4.0)
Total borrowings4,424,8764,985,6114,615,625(11.2)(4.1)
Accrued expenses and other liabilities   700,446     414,136     416,841   69.168.0
Total liabilities   17,064,798     16,984,862     16,555,509   .53.1
Equity:
Preferred stock, par value $.01 per share, 30,000,000 authorized; 0 shares issued-----

Common stock, par value $.01 per share, 280,000,000 shares authorized; 159,664,604,
142,965,012 and 142,547,564 shares issued

1,5971,4301,42511.712.1
Additional paid-in capital702,192459,884451,44052.755.5
Retained earnings, subject to certain restrictions1,109,5411,064,9781,011,4974.29.7
Accumulated other comprehensive income (loss)(23,823)(31,514)25,04624.4(195.1)

Treasury stock at cost, 45,504, 51,160 and 186,504 shares, and other

(33,242)(23,115)(26,475)(43.8)(25.6)
Total TCF Financial Corp. stockholders' equity   1,756,265     1,471,663     1,462,933   19.320.1
Non-controlling interest in subsidiaries   13,380     8,500     11,603   57.415.3
Total equity   1,769,645     1,480,163     1,474,536   19.620.0
Total liabilities and equity$18,834,443   $18,465,025   $18,030,045   2.04.5
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
SUMMARY OF CREDIT QUALITY DATA
(Dollars in thousands)
(Unaudited)
         
AtAtAtAtAtChange from
Jun. 30,Mar. 31,Dec. 31,Sep. 30,Jun. 30,Mar. 31,Jun. 30,
  2011     2011     2010     2010     2010     2011     2010  

Delinquency Data - Principal Balances (1)

60 days or more:
Consumer real estate
First mortgage lien$74,090$70,024$73,848$80,795$85,581$4,066$(11,491)
Junior lien   17,780     19,528     20,763     20,387     21,152     (1,748)   (3,372)
Total consumer real estate91,87089,55294,611101,182106,7332,318(14,863)
Consumer other   171     78     39     61     131     93     40  
Total consumer real estate and other92,04189,63094,650101,243106,8642,411(14,823)
Commercial6,2381,8649,0211,2607,8724,374(1,634)
Leasing and equipment finance2,4475,2745,0544,3465,817(2,827)(3,370)
Inventory finance   145     240     318     255     178     (95)   (33)
Subtotal100,87197,008109,043107,104120,7313,863(19,860)
Acquired portfolios   2,993     4,399     6,000     5,618     8,078     (1,406)   (5,085)
Total delinquencies$103,864   $101,407   $115,043   $112,722   $128,809   $2,457   $(24,945)
 

Delinquency Data - % of Portfolio

60 days or more:
Consumer real estate
First mortgage lien1.58%1.48%1.55%1.68%1.78%10bps(20)bps
Junior lien.82.89.93.90.93(7)(11)
Total consumer real estate1.341.301.351.431.514(17)
Consumer other.46.22.10.14.272419
Total consumer real estate and other1.331.291.351.421.504(17)
Commercial.18.05.26.04.2213(4)
Leasing and equipment finance.09.20.19.17.23(11)(14)
Inventory finance.02.03.05.04.03(1)(1)
Subtotal.73.69.79.78.874(14)
Acquired portfolios.70.891.00.791.92(19)(122)
Total delinquencies.73.70.80.78.903(17)
 
(1) Excludes non-accrual loans and leases.
 
AtAtAtAtAtChange from
Jun. 30,Mar. 31,Dec. 31,Sep. 30,Jun. 30,Mar. 31,Jun. 30,
  2011     2011     2010     2010     2010     2011     2010  

Non-Accrual Loans and Leases

Non-accrual loans and leases:
Consumer real estate
First mortgage lien$129,837$133,865$140,871$140,315$127,966$(4,028)$1,871
Junior lien   21,069     21,325     26,626     26,225     23,065     (256)   (1,996)
Total consumer real estate150,906155,190167,497166,540151,031(4,284)(125)
Consumer other   32     43     50     57     73     (11)   (41)
Total consumer real estate and other150,938155,233167,547166,597151,104(4,295)(166)
Commercial140,407127,745142,248161,889129,26612,66211,141
Leasing and equipment finance29,68234,63434,40740,45548,777(4,952)(19,095)
Inventory finance   634     1,437     1,055     871     1,035     (803)   (401)
Total non-accrual loans and leases$321,661   $319,049   $345,257   $369,812   $330,182   $2,612   $(8,521)
 
Non-accrual loans and leases - rollforward
Balance, beginning of period$319,049$345,257$369,812$330,182$305,401$(26,208)$13,648
Additions86,99680,59692,180143,929125,2706,400(38,274)
Charge-offs(22,401)(37,417)(43,092)(36,371)(28,042)15,0165,641
Transfers to other assets(27,078)(33,541)(41,659)(39,072)(36,820)6,4639,742
Return to accrual status(21,985)(24,634)(17,989)(15,785)(12,593)2,649(9,392)
Payments received(14,383)(12,881)(15,036)(15,653)(17,012)(1,502)2,629
Other, net   1,463     1,669     1,041     2,582     (6,022)   (206)   7,485  
Balance, end of period$321,661   $319,049   $345,257   $369,812   $330,182   $2,612   $(8,521)
 

Charge-offs and allowance recorded on non-accrual loans and leases as a percentage of contractual balance

Consumer real estate26.6%24.5%22.0%20.7%21.8%210bps480bps
Commercial37.940.543.128.126.8(260)1,110
Leasing and equipment finance20.523.624.328.632.0(310)(1,150)
Inventory finance11.87.117.519.519.6470(780)
Total31.431.431.624.725.0-640
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
SUMMARY OF CREDIT QUALITY DATA, CONTINUED
(Dollars in thousands)
(Unaudited)
         
 
AtAtAtAtAtChange from
Jun. 30,Mar. 31,Dec. 31,Sep. 30,Jun. 30,Mar. 31,Jun. 30,
  2011     2011     2010     2010     2010     2011     2010  

Other Real Estate Owned

Other real estate owned:
Consumer real estate$94,311$97,976$90,115$88,303$81,895$(3,665)$12,416
Commercial real estate   42,188     44,178     50,950     47,841     36,036     (1,990)   6,152  
Total other real estate owned$136,499   $142,154   $141,065   $136,144   $117,931   $(5,655)$18,568  
 
Ending number of properties owned
Consumer real estate801812813740657(11)144
Commercial real estate   29     29     31     33     41     -     (12)
Total   830     841     844     773     698     (11)   132  
 
Other real estate owned - rollforward
Balance, beginning of period$142,154$141,065$136,144$117,931$101,436$1,089$40,718
Transferred in27,64935,48044,51341,12137,253(7,831)(9,604)
Sales(28,759)(31,328)(34,666)(18,674)(20,464)2,569(8,295)
Writedowns(6,741)(6,266)(6,220)(3,394)(2,998)(475)(3,743)
Other, net   2,196     3,203     1,294     (840)   2,704     (1,007)   (508)
Balance, end of period$136,499   $142,154   $141,065   $136,144   $117,931   $(5,655)$18,568  
 

Charge-offs and writedowns recorded on other real estate owned as a percentage of contractual loan balance prior to non-performing status

Consumer33.1%32.2%33.0%30.9%27.3%90bps580bps
Commercial33.224.526.630.934.6870(140)
Total33.130.030.830.929.7310340
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
SUMMARY OF CREDIT QUALITY DATA, CONTINUED
(Dollars in thousands)
(Unaudited)
               
 
 

Allowance for Loan and Lease Losses

At June 30, 2011At March 31, 2011At June 30, 2010Change from
Mar. 31,Jun. 30,
Balance% of PortfolioBalance% of PortfolioBalance% of Portfolio   2011     2010  
Consumer real estate$175,7162.50%$174,0972.47%$168,8352.33%3bps17bps
Consumer other   1,4213.79   1,4764.20   2,5455.14(41)(135)
Total consumer real estate and other177,1372.51175,5732.47171,3802.35416
Commercial50,7831.4150,1191.3945,2551.22219
Leasing and equipment finance24,611.8126,272.8532,4431.08(4)(27)
Inventory finance   2,941.32   3,344.33   2,565.40(1)(8)
Total$255,4721.75$255,3081.73$251,6431.7223
 
 

Credit Loss Reserves

At June 30, 2011At March 31, 2011At June 30, 2010Change from
Mar. 31,Jun. 30,
Balance% of PortfolioBalance% of PortfolioBalance% of Portfolio   2011     2010  
Allowance for loan and lease losses$255,4721.75%$255,3081.73%$251,6431.72%2bps3bps
Reserves for unfunded commitments   2,223N.M.   2,298N.M.   4,581N.M.N.M.N.M.
Total$257,6951.76$257,6061.74$256,2241.7521
 
 

Net Charge-Offs (Recoveries)

Change from
Quarter EndedQuarter Ended  
Jun. 30,Mar. 31,Dec. 31,Sep. 30,Jun. 30,Mar. 31,Jun. 30,
20112011201020102010   2011     2010  
Consumer real estate
First mortgage lien$21,593$21,950$23,206$20,119$16,775$(357)$4,818
Junior lien15,078   13,35313,450   14,37412,672   1,725     2,406  
Total consumer real estate36,67135,30336,65634,49329,4471,3687,224
Consumer other684   (266)1,316   1,7371,622   950     (938)
Total consumer real estate and other37,35535,03737,97236,23031,0692,3186,286
Commercial2,68417,77818,59612,8269,143(15,094)(6,459)
Leasing and equipment finance3,4782,7897,8148,6747,514689(4,036)
Inventory finance328   208565   8074   120     254  
Total$43,845$55,812$64,947$57,810$47,800$(11,967)$(3,955)
 
 

Net Charge-Offs as a Percentage of Average Loans and Leases

Change from
Quarter Ended (1)Quarter Ended

Jun. 30,

Mar. 31,Dec. 31,Sep. 30,Jun. 30,Mar. 31,Jun. 30,
20112011

2010

20102010   2011     2010  
Consumer real estate
First mortgage lien1.78%1.81

%

1.88%1.63%1.36%(3)bps42bps
Junior lien2.752.392.372.502.203655
Total consumer real estate2.091.992.041.911.631046
Total consumer real estate and other2.121.97

2.10

2.001.7115</