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Press Release

TCF Reports Quarterly Net Income of $37.9 Million, or 23 Cents Per Share

Company Release - 10/25/2013 8:00 AM ET

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

THIRD QUARTER HIGHLIGHTS

  • Earnings per share of 23 cents, up 17 cents from the third quarter of 2012
  • Core revenue(1) of $305.9 million, up 2.1 percent from the third quarter of 2012
  • Provision for credit losses of $24.6 million, down 74.4 percent from the third quarter of 2012
  • Non-accrual loans and leases of $282.9 million, down 32.9 percent from the third quarter of 2012
  • Loan and lease originations increased $595.5 million, or 23.9 percent, from the third quarter of 2012
  • Average deposits increased $758.2 million, or 5.6 percent, from the third quarter of 2012
  • Announced common and preferred stock dividend payments payable November 29, 2013 and December 2, 2013, respectively
                                   
Summary of Financial Results                           Table 1
(Dollars in thousands, except per-share data)           Percent Change      
3Q2Q3Q

 

3Q13 vs

  3Q13 vsYTDYTDPercent
2013     2013     2012     2Q13     3Q12     2013    

2012 (2)

Change
Net income (loss) $ 37,948 $ 34,057 $ 9,322 11.4 % N.M. % $ 97,455 $ (242,041 ) N.M. %
Net interest income 199,627 202,044 200,559 (1.2 ) (0.5 ) 600,762 578,956 3.8
Diluted earnings (loss) per common share .23 .21 .06 9.5 N.M. .60 (1.52 ) N.M.
 

Financial Ratios (3)

Pre-tax pre-provision profit return on average assets (4)

2.04 % 2.04 % 2.61 % 2.00 % (1.32 ) %
Return on average assets .97

 

.90

 

.30

 

.86

 

(1.73 )

 

Return on average common equity 9.28 8.39 2.36 8.03 (19.50 )
Net interest margin 4.62 4.72 4.85 4.69 4.61

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

.71 .70 2.74 .82 1.67
 
N.M. Not Meaningful                                                  
 
(1)  

Core revenue is calculated as total revenue less gains (losses) on sales of securities of $(80) thousand and $13 million at September 30, 2013 and September 30, 2012, respectively.

(2) Includes a net, after-tax charge of $295.8 million, or $1.87 per common share, related to the balance sheet repositioning.
(3) Annualized.
(4)

Pre-tax pre-provision profit (''PTPP'') is calculated as total revenues less non-interest expense. Year-to-date 2012 PTPP excludes the non-recurring net loss of $473.8 million related to the balance sheet repositioning completed in the first quarter of 2012.

 

TCF Financial Corporation (“TCF” or the “Company”) (NYSE:TCB) today reported net income for the third quarter of 2013 of $37.9 million, compared with $9.3 million for the third quarter of 2012, and $34.1 million for the second quarter of 2013. Diluted earnings per common share was 23 cents for the third quarter of 2013, compared with 6 cents for the third quarter of 2012, and 21 cents for the second quarter of 2013.

TCF reported net income for the first nine months of 2013 of $97.5 million, compared with a net loss of $242 million for the same period in 2012 (inclusive of a net after-tax charge of $295.8 million, or $1.87 per common share, related to a balance sheet repositioning involving certain investments and borrowings in the first quarter of 2012 and a net after-tax gain of $8.2 million, or 5 cents per common share, related to the sale of Visa® Class B stock in the second quarter of 2012). Diluted earnings per common share was 60 cents for the first nine months of 2013, compared with a diluted loss per common share of $1.52 for the same period in 2012 (earnings per common share of 30 cents excluding the balance sheet repositioning charge and the net gain related to the sale of Visa Class B stock).

Chairman’s Statement

“TCF’s credit quality showed steady improvement for the fourth consecutive quarter,” said William A. Cooper, Chairman and Chief Executive Officer. “The third quarter was highlighted by meaningful reductions in provision, delinquencies, and commercial classified assets.”

“During the quarter, TCF continued to take advantage of loan and lease origination opportunities. Meanwhile, TCF’s fifth consecutive quarter of net checking account growth has offset some of the banking fee pressure caused by a change in consumer behavior leading to reduced transaction volumes.

“I am pleased by the progress we have made in executing on our business strategies over the past two years. There is more work to be done, but we believe TCF is now in a much better position for future success, especially as interest rates eventually begin to rise.”

     
Revenue
                                                   
Total Revenue                             Table 2  
          Percent Change
3Q2Q3Q3Q13 vs   3Q13 vsYTDYTDPercent
(Dollars in thousands)     2013       2013     2012     2Q13     3Q12     2013       2012Change
Net interest income $ 199,627       $ 202,044     $ 200,559 (1.2 ) % (.5 ) % $ 600,762       $ 578,956 3.8 %
Fees and other revenue:
Fees and service charges 42,457 41,572 43,745 2.1 (2.9 ) 123,352 133,691 (7.7 )
Card revenue 13,167 13,270 12,927 (.8 ) 1.9 38,854 39,664 (2.0 )
ATM revenue   5,941         5,828       6,122 1.9 (3.0 )   17,274         18,597 (7.1 )
Total banking fees 61,565 60,670 62,794 1.5 (2.0 ) 179,480 191,952 (6.5 )
Leasing and equipment finance 29,079 22,874 20,498 27.1 41.9 68,413 66,572 2.8
Gains on sales of auto loans 7,140 8,135 7,486 (12.2 ) (4.6 ) 22,421 15,232 47.2
Gains on sales of consumer real estate loans 4,152 4,069 4,559 2.0 (8.9 ) 16,347 4,559 N.M.
Other   4,304         4,035       3,688 6.7 16.7   12,065         9,211 31.0
Total fees and other revenue   106,240         99,783       99,025 6.5 7.3   298,726         287,526 3.9
Subtotal - core revenue 305,867 301,827 299,584 1.3 2.1 899,488 866,482 3.8
(Losses) gains on securities, net   (80 )       -       13,033 N.M. N.M.   (80 )       102,760 N.M.
Total revenue $ 305,787       $ 301,827     $ 312,617 1.3 (2.2 ) $ 899,408       $ 969,242 (7.2 )
 
Net interest margin (1) 4.62 % 4.72 % 4.85 % 4.69 % 4.61 %

Fees and other revenue as a % of total revenue

34.74 33.06 31.68 33.21 29.67
 
N.M. Not meaningful.
(1) Annualized.
 

Net Interest Income

  • Net interest income for the third quarter of 2013 decreased $932 thousand, or .5 percent, compared with the third quarter of 2012. The decrease was driven by downward pressure on yields across the lending businesses due to the prolonged low interest rate environment, partially offset by increases in average loan and lease balances primarily in the auto finance, inventory finance and leasing and equipment finance businesses.
  • Net interest income for the third quarter of 2013 decreased $2.4 million, or 1.2 percent, compared with the second quarter of 2013. The decrease was attributable to a combination of downward pressure on yields within the quarter mainly in auto finance and consumer real estate and lower average loan balances in the inventory finance portfolio from seasonal liquidations.
  • Net interest margin in the third quarter of 2013 was 4.62 percent, compared with 4.85 percent in the third quarter of 2012 and 4.72 percent in the second quarter of 2013. The decrease from the third quarter of 2012 was primarily due to increased cash held at the Federal Reserve. The decrease from the second quarter of 2013 was primarily due to run-off of higher yielding fixed-rate first mortgages exceeding originations and margin pressure within auto finance, as well as the impact of increased cash held at the Federal Reserve.

Non-interest Income

  • Fees and service charges in the third quarter of 2013 were $42.5 million, down $1.3 million, or 2.9 percent, from the third quarter of 2012 and up $885 thousand, or 2.1 percent, from the second quarter of 2013. The decrease from the third quarter of 2012 was due to fewer average transactions per customer, partially offset by a higher account base. The increase from the second quarter of 2013 was primarily due to growth in the account base for the fifth consecutive quarter.
  • Leasing and equipment finance revenue was $29.1 million during the third quarter of 2013, up $8.6 million, or 41.9 percent, from the third quarter of 2012 andup $6.2 million, or 27.1 percent, from the second quarter of 2013. The increase was primarily due to higher sales-type lease revenue in the leasing and equipment finance portfolio as a result of customer-driven events.
  • TCF sold $182.5 million, $161.1 million and $196.9 million of auto loans during the third quarters of 2013 and 2012, and the second quarter of 2013, respectively, resulting in gains in the same respective periods.
  • TCF sold $142.4 million, $136 million and $139.2 million of consumer real estate loans during the third quarters of 2013 and 2012, and the second quarter of 2013, respectively, resulting in gains in the same respective periods.
         
Loans and Leases
                                         
Period-End and Average Loans and Leases                   Table 3  
      Percent Change
(Dollars in thousands) 3Q2Q3Q3Q13 vs3Q13 vsYTDYTDPercent
2013   2013   2012   2Q13     3Q12     2013   2012   Change  
Period-End:
Consumer real estate $ 6,415,632 $ 6,356,426 $ 6,648,036 .9 % (3.5 ) %
Commercial 3,137,088 3,350,334 3,511,234 (6.4 ) (10.7 )
Leasing and equipment finance 3,286,506 3,251,703 3,157,977 1.1 4.1
Inventory finance 1,716,542 1,713,528 1,466,269 .2 17.1
Auto finance 1,069,053 882,202 407,091 21.2 162.6
Other   26,827     25,099     27,610 6.9 (2.8 )
Total $ 15,651,648   $ 15,579,292   $ 15,218,217 .5 2.8
 
Average:
Consumer real estate $ 6,402,612 $ 6,430,685 $ 6,729,254 (.4 ) % (4.9 ) % $ 6,462,677 $ 6,789,026 (4.8 ) %
Commercial 3,282,880 3,336,406 3,538,111 (1.6 ) (7.2 ) 3,321,458 3,496,114 (5.0 )
Leasing and equipment finance 3,261,638 3,236,799 3,164,592 .8 3.1 3,232,873 3,146,345 2.8
Inventory finance 1,637,538 1,875,810 1,440,298 (12.7 ) 13.7 1,731,022 1,392,828 24.3
Auto finance 973,418 823,102 367,271 18.3 165.0 823,316 226,092 N.M.
Other   12,299     13,060     16,280 (5.8 ) (24.5 )   12,996     17,166 (24.3 )
Total $ 15,570,385   $ 15,715,862   $ 15,255,806 (.9 ) 2.1 $ 15,584,342   $ 15,067,571 3.4
 
N.M. Not meaningful.
 
  • Loans and leases were $15.7 billion at September 30, 2013, an increase of $433.4 million, or 2.8 percent, compared with September 30, 2012. Quarterly average loans and leases were $15.6 billion for the third quarter of 2013, an increase of $314.6 million, or 2.1 percent, compared with the third quarter of 2012. The increases in period-end and average loans and leases were primarily due to the continued growth of the auto finance portfolio as TCF expands the number of active dealers and sales force in its network and the penetration of existing territories, as well as an increase in the inventory finance portfolio. These increases were partially offset by decreases in commercial loans, primarily due to payoffs in this low interest rate environment exceeding new originations, as well as decreases in consumer real estate loans driven by ongoing loan sales and run-off of first mortgages exceeding originations.
  • Loan and lease originations were $3.1 billion for the third quarter of 2013, an increase of $595.5 million, or 23.9 percent, compared with the third quarter of 2012. This increase was due to increased fundings in the inventory finance business, execution of strategies in the consumer business and continued growth within auto finance, partially offset by a decrease in leasing and equipment finance originations. Loan and lease originations decreased $94.8 million, or 3 percent, compared with the second quarter of 2013, due to low seasonal balances in the inventory finance portfolio and lower leasing and equipment finance originations, partially offset by continued growth within auto finance.

Credit Quality

(Table 4 - Credit Trends: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50735570&lang=en)

  • Non-accrual loans and leases were $282.9 million at September 30, 2013, an increase of $4.4 million, or 1.6 percent, from June 30, 2013 and a decrease of $138.9 million, or 32.9 percent, from September 30, 2012. The increase from June 30, 2013 was primarily due to a change in the non-accrual policy for consumer real estate loans which resulted in an additional $48.6 million, primarily offset by a decrease in the commercial non-accrual balance of $39.8 million as the portfolio improves. The reduction from September 30, 2012 was primarily due to fewer non-accrual commercial and consumer real estate loans, which was the result of improved credit quality in those portfolios resulting in fewer loans entering non-accrual status, as well as the sale of $40.5 million of loans during the second quarter of 2013. The reduction was partially offset by the change in the non-accrual policy for consumer real estate loans.
  • Other real estate owned was $65.6 million at September 30, 2013, a decrease of $653 thousand from June 30, 2013 and a decrease of $54.8 million from September 30, 2012. The decrease from September 30, 2012 was primarily due to a portfolio sale of 184 consumer properties during the first quarter of 2013 and continued efforts to actively workout problem loans.
  • The over 60-day delinquency rate, excluding acquired portfolios and non-accrual loans and leases, at September 30, 2013 was .25 percent, down from .52 percent at June 30, 2013 and .67 percent at September 30, 2012. The decreases from June 30, 2013 and September 30, 2012 were primarily a result of reduced over 60-day delinquencies in the consumer real estate portfolio due to a change in the non-accrual policy.
  • Net charge-offs decreased $76.8 million from the third quarter of 2012. The decrease was primarily due to improved credit quality in the consumer real estate portfolio and the impact of the clarifying bankruptcy-related regulatory guidance implemented in the third quarter of 2012, as well as improved credit quality in the commercial portfolio and continued efforts to actively workout problem loans. Consumer real estate net charge-offs were down for the fourth consecutive quarter.
  • Provision for credit losses was $24.6 million for the third quarter of 2013, a decrease of $8 million from the second quarter of 2013 and a decrease of $71.7 million from the third quarter of 2012. The decrease from second quarter of 2013 was primarily due to decreased net charge-offs in the consumer real estate portfolio. The decrease from third quarter of 2012 was primarily due to decreased net charge-offs in the consumer real estate portfolio due to improved credit quality and the impact of the clarifying bankruptcy-related regulatory guidance implemented in the third quarter of 2012, as well as commercial portfolios due to improved credit quality and continued efforts to actively workout problem loans.
                 
Deposits
                                         
Average Deposits                           Table 5  
Percent Change
(Dollars in thousands) 3Q2Q3Q3Q13 vs3Q13 vsYTDYTDPercent
2013     2013     2012     2Q13     3Q12     2013     2012     Change  
 
Checking $ 4,833,196 $ 4,884,433 $ 4,582,088 (1.0 )

%

5.5

% $ 4,834,368 $ 4,594,572 5.2 %
Savings 6,258,866 6,082,200 6,173,524 2.9 1.4 6,152,292 6,044,442 1.8
Money market   822,094       791,859       848,899   3.8 (3.2 )   809,800       753,486   7.5
Subtotal 11,914,156 11,758,492 11,604,511 1.3 2.7 11,796,460 11,392,500 3.5
Certificates   2,401,811       2,360,881       1,953,208   1.7

23.0

  2,362,274       1,567,258   50.7
Total average deposits $ 14,315,967     $ 14,119,373     $ 13,557,719   1.4 5.6 $ 14,158,734     $ 12,959,758   9.3
 
Average interest rate on deposits (1) .27 % .25 % .32 % .27 % .31 %
 
(1) Annualized.
 
  • Total average deposits for the third quarter of 2013 increased $758.2 million, or 5.6 percent, from the third quarter of 2012 and increased $196.6 million, or 1.4 percent, from the second quarter of 2013. The increase from the third quarter of 2012 was primarily due to special programs for certificates of deposit, as well as checking account growth. The increase from the second quarter of 2013 was primarily due to higher average savings balances, offset by lower average checking balances on a greater number of accounts.
  • The average interest rate on deposits in the third quarter of 2013 was .27 percent, down five basis points from the third quarter of 2012 and up two basis points from the second quarter of 2013. The decrease from the third quarter of 2012 was primarily due to declines in average interest rates on various savings accounts. The increase from second quarter of 2013 was due to increased balances in savings and money market accounts with higher rates.
                 
Non-interest Expense
                                         
Non-interest Expense                           Table 6  
Percent Change
(Dollars in thousands) 3Q2Q3Q3Q13 vs3Q13 vsYTDYTDPercent
2013   2013   2012   2Q13     3Q12     2013     2012   Change  

Compensation and employee benefits

$ 110,833 $ 105,537 $ 98,409 5.0 % 12.6 % $ 320,599 $ 292,163 9.7 %
Occupancy and equipment 33,253 33,062 33,006 .6 .7 99,190 97,983 1.2
FDIC insurance 8,102 8,362 6,899 (3.1 ) 17.4 24,174 21,754 11.1
Operating lease depreciation 6,706 6,150 6,325 9.0 6.0 18,491 19,473 (5.0 )
Advertising and marketing 4,593 5,532 4,248 (17.0 ) 8.1 15,857 12,269 29.2
Deposit account premiums 664 600 485 10.7 36.9 1,866 8,146 (77.1 )
Other   43,675     41,946       36,173 4.1 20.7   123,560       110,425 11.9
Core operating expenses 207,826 201,189 185,545 3.3 12.0 603,737 562,213 7.4
Loss on termination of debt 55 - - N.M. N.M. 55 550,735 (100.0 )

Foreclosed real estate and repossessed assets, net

4,162 7,555 10,670 (44.9 ) (61.0 ) 21,884 33,776 (35.2 )
Other credit costs, net   189     (228 )     593 N.M. (68.1 )   (876 )     1,781 N.M.
Total non-interest expense $ 212,232   $ 208,516     $ 196,808 1.8 7.8 $ 624,800     $ 1,148,505 (45.6 )
N.M. Not meaningful.  
 
  • Compensation and employee benefits expense for the third quarter of 2013 increased $12.4 million, or 12.6 percent, from the third quarter of 2012 and increased $5.3 million, or 5 percent, from the second quarter of 2013. The increase from both periods was primarily due to increased staff levels to support the growth of auto finance and expenses related to higher commissions based on production results and performance incentives.
  • Foreclosed real estate and repossessed assets expense decreased $6.5 million, or 61 percent, from the third quarter of 2012 and decreased $3.4 million, or 44.9 percent, from the second quarter of 2013. The decrease from the third quarter of 2012 was driven by reduced expenses related to fewer foreclosed properties in consumer and commercial. The decrease from the second quarter of 2013 was due to a reduction in write-downs of values of existing foreclosed real estate properties as a result of improved real estate property values.
           
Capital
                                 
Capital Information               Table 7  
At period end
(Dollars in thousands, except per-share data) 3Q4Q
20132012
Total equity $ 1,941,243 $ 1,876,643
Book value per common share $ 10.10 $ 9.79
Tangible realized common equity to tangible assets (1) 7.99 % 7.52 %
 
Risk-based capital (2)
Tier 1 $ 1,729,992 11.36 % $ 1,633,336 11.09 %
Total 2,071,454 13.61 2,007,835 13.63
 
Tier 1 leverage capital $ 1,729,992 9.53 % $ 1,633,336 9.21 %
 
Tier 1 common capital (3) $ 1,453,474 9.55 % $ 1,356,826 9.21 %
 
(1)   Excludes the impact of goodwill, other intangibles and accumulated other comprehensive (loss) income (see “Reconciliation of GAAP to Non-GAAP Financial Measures” table).
(2) The Company's capital ratios continue to be in excess of "well-capitalized" regulatory benchmarks.
(3)   Excludes the effect of preferred shares and qualifying non-controlling interest in subsidiaries (see “Reconciliation of GAAP to Non-GAAP Financial Measures” table).
 
  • On October 21, 2013, the Board of Directors of TCF declared a regular quarterly cash dividend of 5 cents per common share payable on November 29, 2013, to stockholders of record at the close of business on November 15, 2013. TCF also declared dividends on the 7.50% Series A and 6.45% Series B Non-Cumulative Perpetual Preferred Stock, both payable on December 2, 2013, to stockholders of record at the close of business on November 15, 2013.

Webcast Information

A live webcast of TCF’s conference call to discuss the third quarter earnings will be hosted at TCF’s website, http://ir.tcfbank.com, on October 25, 2013 at 8:00 a.m. CT. A slide presentation for the call will be available on the website prior to the call. Additionally, the webcast will be 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, investor presentations and SEC filings.

 

TCF is a Wayzata, Minnesota-based national bank holding company with $18.4 billion in total assets at September 30, 2013. TCF has over 425 branches in Minnesota, Illinois, Michigan, Colorado, Wisconsin, Indiana, Arizona and South Dakota, providing retail and commercial banking services. TCF, through its subsidiaries, also conducts commercial leasing and equipment finance business in all 50 states, commercial inventory finance business in the U.S. and Canada, and indirect auto finance business in over 40 states. For more information about TCF, please visit http://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 Company’s businesses and their respective markets, such as projections of future performance, guidance, statements of the Company’s plans and objectives, forecasts of market trends and other matters, are forward-looking statements based on the Company’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 Company’s future results to differ materially from those expressed or implied in any forward-looking statements contained in this earnings release. These factors include the factors discussed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 under the heading “Risk Factors,” the factors discussed below 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.

Adverse Economic or Business Conditions; Competitive Conditions; Credit and Other Risks. Deterioration in general economic and banking industry conditions, including those arising from government shutdowns, defaults, anticipated defaults or rating agency downgrades of sovereign debt (including debt of the U.S.), 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, reduced demand for financial services and loan and lease products, deposit outflows, deposit account attrition or an inability to increase the number of deposit accounts; customers completing financial transactions without using a bank; adverse changes in credit quality 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, changes in the allowance for loan and lease losses dictated by new market conditions or regulatory requirements, or the inability of home equity line borrowers to make increased payments caused by increased interest rates or amortization of principal; deviations from estimates of prepayment rates and fluctuations in interest rates that result in decreases in value of assets such as interest-only strips that arise in connection with TCF’s loan sales activity; 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; foreign currency exchange risks; counterparty risk, including the risk of defaults by our counterparties or diminished availability of counterparties who satisfy our credit quality requirements; decreases in demand for the types of equipment that TCF leases or finances; the effect of any negative publicity.

Legislative and Regulatory Requirements. New consumer protection and supervisory requirements and regulations, including those resulting from action by the Consumer Financial Protection Bureau and changes in the scope of Federal preemption of state laws that could be applied to national banks and their subsidiaries; the imposition of requirements that adversely impact 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, use by municipalities of eminent domain on underwater mortgages, or imposition of underwriting or other limitations that impact the ability to use certain variable-rate products; 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; 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.

Earnings/Capital Risks and Constraints, Liquidity Risks. Limitations on TCF’s ability to pay dividends or to increase dividends 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 additional capital, leverage, liquidity and risk management requirements or changes in the composition of qualifying regulatory capital (including those resulting from U.S. implementation of Basel III requirements); adverse changes in securities markets directly or indirectly affecting TCF’s ability to sell assets or to fund its operations; diminished unsecured borrowing capacity resulting from TCF credit rating downgrades and unfavorable conditions in the credit markets that restrict or limit various funding sources; costs associated with new regulatory requirements or interpretive guidance relating to liquidity; uncertainties relating to regulatory requirements or customer opt-in preferences with respect to overdraft, which may have an adverse impact on TCF’s fee revenue; uncertainties relating to future retail deposit account changes, including limitations on TCF’s ability to predict customer behavior and the impact on TCF’s fee revenues.

Supermarket Branching Risk; Growth Risks. Adverse developments affecting TCF’s supermarket banking relationships or any of the supermarket chains in which TCF maintains supermarket branches; costs related to closing underperforming branches; slower than anticipated growth in existing or acquired businesses; inability to successfully execute on TCF’s growth strategy through acquisitions or cross-selling opportunities; failure to expand or diversify TCF’s balance sheet through programs or new opportunities; failure to successfully attract and retain new customers, including the failure to attract and retain manufacturers and dealers to expand the inventory finance business; failure to effectuate, and risks of claims related to, sales and securitizations of loans; risks related to new product additions and addition of distribution channels (or entry into new markets) for existing products.

Technological and Operational Matters. Technological or operational difficulties, loss or theft of information, cyber-attacks and other security breaches, counterparty failures and the possibility that deposit account losses (fraudulent checks, etc.) may increase; failure to keep pace with technological change.

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, the effect of interchange rate litigation against the Federal Reserve on debit card interchange fees and possible increases in indemnification obligations for certain litigation against Visa U.S.A. and potential reductions in card revenues resulting from such litigation or other litigation against Visa.

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; ineffective internal controls; adverse Federal, state or foreign tax assessments or findings in tax audits; lack of or inadequate insurance coverage for claims against TCF; potential for claims and legal action related to TCF’s fiduciary responsibilities.

 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per-share data)
(Unaudited)
               
Three Months Ended September 30,Change
20132012$%
Interest income:
Loans and leases$203,879$210,140$(6,261)(3.0)%
Securities available for sale4,4485,607(1,159)(20.7)
Investments and other   7,126     4,105   3,021   73.6
Total interest income   215,453     219,852   (4,399)(2.0)
Interest expense:
Deposits9,64410,757(1,113)(10.3)
Borrowings   6,182     8,536   (2,354)(27.6)
Total interest expense   15,826     19,293   (3,467)(18.0)
Net interest income199,627200,559(932)(.5)
Provision for credit losses   24,602     96,275   (71,673)(74.4)

Net interest income after provision for credit losses

  175,025     104,284   70,741   67.8
Non-interest income:
Fees and service charges42,45743,745(1,288)(2.9)
Card revenue13,16712,9272401.9
ATM revenue   5,941     6,122   (181)(3.0)
Subtotal61,56562,794(1,229)(2.0)
Leasing and equipment finance29,07920,4988,58141.9
Gains on sales of auto loans7,1407,486(346)(4.6)
Gains on sales of consumer real estate loans4,1524,559(407)(8.9)
Other   4,304     3,688   616   16.7
Fees and other revenue106,24099,0257,2157.3
(Losses) gains on securities, net   (80)   13,033   (13,113)N.M.
Total non-interest income   106,160     112,058   (5,898)(5.3)
Non-interest expense:
Compensation and employee benefits110,83398,40912,42412.6
Occupancy and equipment33,25333,006247.7
FDIC insurance8,1026,8991,20317.4
Operating lease depreciation6,7066,3253816.0
Advertising and marketing4,5934,2483458.1
Deposit account premiums66448517936.9
Other   43,675     36,173   7,502   20.7
Subtotal207,826185,54522,28112.0
Loss on termination of debt55-55N.M.
Foreclosed real estate and repossessed assets, net4,16210,670(6,508)(61.0)
Other credit costs, net   189     593   (404)(68.1)
Total non-interest expense   212,232     196,808   15,424   7.8
Income before income tax expense68,95319,53449,419N.M.
Income tax expense   24,551     6,304   18,247   N.M.
Income after income tax expense44,40213,23031,172N.M.
Income attributable to non-controlling interest   1,607     1,536   71   4.6
Net income attributable to TCF Financial Corporation   42,795     11,694   31,101   N.M.
Preferred stock dividends   4,847     2,372   2,475   104.3
Net income available to common stockholders$37,948   $9,322$28,626   N.M.
 
Net income per common share:
Basic$.24$.06$.18N.M.
Diluted.23.06.17N.M.
 
Dividends declared per common share$.05$.05$--
 

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

Basic161,220159,5331,6871.1
Diluted162,184160,0162,1681.4
 
N.M. Not meaningful.
 
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per-share data)
(Unaudited)
               
Nine Months Ended September 30,Change
20132012$%
Interest income:
Loans and leases$615,459$624,890$(9,431)(1.5)%
Securities available for sale13,88030,535(16,655)(54.5)
Investments and other   19,272     10,171     9,101   89.5
Total interest income   648,611     665,596     (16,985)(2.6)
Interest expense:
Deposits28,17630,015(1,839)(6.1)
Borrowings   19,673     56,625     (36,952)(65.3)
Total interest expense   47,849     86,640     (38,791)(44.8)
Net interest income600,762578,95621,8063.8
Provision for credit losses   95,576     198,923     (103,347)(52.0)

Net interest income after provision for credit losses

  505,186     380,033     125,153   32.9
Non-interest income:
Fees and service charges123,352133,691(10,339)(7.7)
Card revenue38,85439,664(810)(2.0)
ATM revenue   17,274     18,597     (1,323)(7.1)
Subtotal179,480191,952(12,472)(6.5)
Leasing and equipment finance68,41366,5721,8412.8
Gains on sales of auto loans22,42115,2327,18947.2
Gains on sales of consumer real estate loans16,3474,55911,788N.M.
Other   12,065     9,211     2,854   31.0
Fees and other revenue298,726287,52611,2003.9
(Losses) gains on securities, net   (80)   102,760     (102,840)N.M.
Total non-interest income   298,646     390,286     (91,640)(23.5)
Non-interest expense:
Compensation and employee benefits320,599292,16328,4369.7
Occupancy and equipment99,19097,9831,2071.2
FDIC insurance24,17421,7542,42011.1
Operating lease depreciation18,49119,473(982)(5.0)
Advertising and marketing15,85712,2693,58829.2
Deposit account premiums1,8668,146(6,280)(77.1)
Other   123,560     110,425     13,135   11.9
Subtotal603,737562,21341,5247.4
Loss on termination of debt55550,735(550,680)(100.0)
Foreclosed real estate and repossessed assets, net21,88433,776(11,892)(35.2)
Other credit costs, net   (876)   1,781     (2,657)N.M.
Total non-interest expense   624,800     1,148,505     (523,705)(45.6)
Income (loss) before income tax expense (benefit)179,032(378,186)557,218N.M.
Income tax expense (benefit)   61,554     (143,398)   204,952   N.M.
Income (loss) after income tax expense (benefit)117,478(234,788)352,266N.M.
Income attributable to non-controlling interest   5,805     4,881     924   18.9
Net income (loss) attributable to TCF Financial Corporation   111,673     (239,669)   351,342   N.M.
Preferred stock dividends   14,218     2,372     11,846   N.M.
Net income (loss) available to common stockholders$97,455   $(242,041)$339,496   N.M.
 
Net income (loss) per common share:
Basic$.61$(1.52)$2.13N.M.
Diluted.60(1.52)2.12N.M.
 
Dividends declared per common share$.15$.15$--
 

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

Basic160,838159,0521,7861.1
Diluted161,694159,0522,6421.7
 
N.M. Not meaningful.
 
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
(Unaudited)
               
Three Months Ended September 30,Change
20132012$%
Net income attributable to TCF Financial Corporation$42,795   $11,694   $31,101   N.M. %
Other comprehensive income:

Reclassification adjustment for securities gains included in net income

-(12,912)12,912(100.0)

Unrealized holding gains arising during the period on securities available for sale

85016,283(15,433)(94.8)
Foreign currency hedge(647)(630)(17)(2.7)
Foreign currency translation adjustment615640(25)(3.9)

Recognized postretirement prior service cost and transition obligation

(11)(7)(4)(57.1)
Income tax expense   (72)   (1,010)   938   92.9
Total other comprehensive income   735     2,364     (1,629)(68.9)
Comprehensive income$43,530   $14,058   $29,472   N.M.
 
Nine Months Ended September 30,Change
20132012$%
Net income (loss) attributable to TCF Financial Corporation$111,673   $(239,669)$351,342   N.M. %
Other comprehensive income (loss):

Reclassification adjustment for securities gains included in net income

-(89,879)89,879(100.0)

Unrealized holding (losses) gains arising during the period on securities available for sale

(47,399)28,383(75,782)N.M.
Foreign currency hedge764(766)1,530N.M.
Foreign currency translation adjustment(980)701(1,681)N.M.

Recognized postretirement prior service cost and transition obligation

(35)(21)(14)(66.7)
Income tax benefit   17,609     22,823     (5,214)(22.8)
Total other comprehensive loss   (30,041)   (38,759)   8,718   22.5
Comprehensive income (loss)$81,632   $(278,428)$360,060   N.M.
 
N.M. Not meaningful.
 
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except per-share data)
(Unaudited)
               
At Sep. 30,At Dec. 31,Change
20132012$%
ASSETS
 
Cash and due from banks$983,846$1,100,347$(116,501)(10.6)%
Investments101,950120,867(18,917)(15.7)
Securities available for sale631,677712,091(80,414)(11.3)
Loans and leases held for sale170,69910,289160,410N.M.
Loans and leases:
Consumer real estate6,415,6326,674,501(258,869)(3.9)
Commercial3,137,0883,405,235(268,147)(7.9)
Leasing and equipment finance3,286,5063,198,01788,4892.8
Inventory finance1,716,5421,567,214149,3289.5
Auto finance1,069,053552,833516,22093.4
Other loans and leases   26,827     27,924     (1,097)(3.9)
Total loans and leases15,651,64815,425,724225,9241.5
Allowance for loan and lease losses   (261,285)   (267,128)   5,843   2.2
Net loans and leases15,390,36315,158,596231,7671.5
Premises and equipment, net437,051440,466(3,415)(.8)
Goodwill225,640225,640--
Other assets   428,862     457,621     (28,759)(6.3)
Total assets$18,370,088   $18,225,917   $144,171   .8
 
LIABILITIES AND EQUITY
 
Deposits:
Checking$4,911,479$4,834,632$76,8471.6
Savings6,263,6906,104,104159,5862.6
Money market   870,727     820,553     50,174   6.1
Subtotal12,045,89611,759,289286,6072.4
Certificates of deposit   2,379,134     2,291,497     87,637   3.8
Total deposits   14,425,030     14,050,786     374,244   2.7
Short-term borrowings8,2492,6195,630N.M.
Long-term borrowings   1,523,235     1,931,196     (407,961)(21.1)
Total borrowings1,531,4841,933,815(402,331)(20.8)
Accrued expenses and other liabilities   472,331     364,673     107,658   29.5
Total liabilities   16,428,845     16,349,274     79,571   .5
Equity:

Preferred stock, par value $.01 per share, 30,000,000 authorized; and 4,006,900 shares issued

263,240263,240--

Common stock, par value $.01 per share, 280,000,000 shares authorized; 164,820,917 and 163,428,763 shares issued, respectively

1,6481,63414.9
Additional paid-in capital771,570750,04021,5302.9
Retained earnings, subject to certain restrictions950,777877,44573,3328.4
Accumulated other comprehensive (loss) income(17,598)12,443(30,041)N.M.
Treasury stock at cost, 42,566 shares, and other   (41,672)   (41,429)   (243)(.6)
Total TCF Financial Corporation stockholders' equity1,927,9651,863,37364,5923.5
Non-controlling interest in subsidiaries   13,278     13,270     8   .1
Total equity   1,941,243     1,876,643     64,600   3.4
Total liabilities and equity$18,370,088   $18,225,917   $144,171   .8
 
N.M. Not Meaningful.
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
SUMMARY OF CREDIT QUALITY DATA
(Dollars in thousands)
(Unaudited)
   
AtAtAtAtAtChange from
Sep. 30,Jun. 30,Mar. 31,Dec. 31,Sep. 30,Jun. 30,Sep. 30,
2013201320132012201220132012

Delinquency Data - Principal Balances (1)

60 days or more:
Consumer real estate
First mortgage lien$23,576$66,876$66,164$76,020$80,153$(43,300)$(56,577)
Junior lien3,822   8,022   9,674   13,141   13,388   (4,200)(9,566)
Total consumer real estate27,39874,89875,83889,16193,541(47,500)(66,143)
Commercial7,2011,6799062,6302,6525,5224,549
Leasing and equipment finance2,5391,8402,0672,5681,554699985
Inventory finance71331561198038(9)
Auto finance1,4298685635323055611,124
Other-   26   -   31   22   (26)(22)
Subtotal38,63879,34479,53095,04198,154(40,706)(59,516)
Acquired portfolios334   627   578   982   1,069   (293)(735)
Total delinquencies$38,972   $79,971   $80,108   $96,023   $99,223   $(40,999)$(60,251)
 

Delinquency Data - % of Portfolio (1)

60 days or more:
Consumer real estate
First mortgage lien.64%1.74%1.67%1.88%1.93%(110)bps(129)bps
Junior lien.15.34.43.55.59(19)(44)
Total consumer real estate.441.211.221.381.46(77)(102)
Commercial.23.05.03.08.081815
Leasing and equipment finance.08.06.07.08.0523
Inventory finance--.01.01.01-(1)
Auto finance.13.10.08.10.0835
Other-.11-.12.09(11)(9)
Subtotal.25.52.53.64.67(27)(42)
Acquired portfolios.33.51.37.58.50(18)(17)
Total delinquencies.25.52.52.64.67(27)(42)
 
(1) Excludes non-accrual loans and leases.
 
AtAtAtAtAtChange from
Sep. 30,Jun. 30,Mar. 31,Dec. 31,Sep. 30,Jun. 30,Sep. 30,
2013201320132012201220132012

Non-Accrual Loans and Leases

Non-accrual loans and leases:
Consumer real estate
First mortgage lien$170,306$132,586$186,218$199,631$197,649$37,720$(27,343)
Junior lien35,732   30,744   33,907   35,269   35,936   4,988   (204)
Total consumer real estate206,038163,330220,125234,900233,58542,708(27,547)
Commercial62,273102,103108,505127,746169,339(39,830)(107,066)
Leasing and equipment finance11,82011,10311,69513,65215,812717(3,992)
Inventory finance1,8021,0081,4801,4871,120794682
Auto finance212118106101-94212
Other728   809   1,477   1,571   1,957   (81)(1,229)
Total non-accrual loans and leases$282,873   $278,471   $343,388   $379,457   $421,813   $4,402   $(138,940)
 
Non-accrual loans and leases - rollforward
Balance, beginning of period$278,471$343,388$379,457$421,813$324,426$(64,917)$(45,955)
Additions93,33741,54956,71288,235210,91651,788(117,579)
Charge-offs(10,225)(12,780)(23,773)(27,657)(49,116)2,55538,891
Transfers to other assets(23,810)(16,014)(20,087)(17,305)(24,632)(7,796)822
Return to accrual status(16,218)(21,360)(34,692)(55,261)(30,300)5,14214,082
Payments received(40,319)(16,977)(15,399)(30,832)(9,652)(23,342)(30,667)
Sales-(40,461)(133)--40,461-
Other, net1,637   1,126   1,303   464   171   511   1,466  
Balance, end of period$282,873   $278,471   $343,388   $379,457   $421,813   $4,402   $(138,940)
 
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
SUMMARY OF CREDIT QUALITY DATA, CONTINUED
(Dollars in thousands)
(Unaudited)
               
Change from
Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,Jun 30,Sep 30,
2013201320132012201220132012

Other Real Estate Owned

Other real estate owned (1)
Consumer real estate$48,910$44,759$46,404$69,599$85,764$4,151$(36,854)
Commercial real estate16,669   21,473   25,359   27,379   34,662   (4,804)(17,993)
Total other real estate owned$65,579   $66,232   $71,763   $96,978   $120,426   $(653)$(54,847)
 
Other real estate owned - rollforward
Balance, beginning of period$66,232$71,763$96,978$120,426$125,876$(5,531)$(59,644)
Transferred in23,33916,50320,85518,44426,0976,836(2,758)
Sales(22,683)(17,895)(40,456)(39,528)(28,479)(4,788)5,796
Writedowns(2,197)(4,270)(5,294)(4,614)(3,493)2,0731,296
Other, net888   131   (320)2,250   425   757   463  
Balance, end of period$65,579   $66,232   $71,763   $96,978   $120,426   $(653)$(54,847)
 
Ending number of properties owned
Consumer real estate32724622441842581(98)
Commercial real estate18   20   18   18   26   (2)(8)
Total345   266   242   436   451   79   (106)
 
(1) Includes properties owned and foreclosed properties subject to redemption.
 
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
SUMMARY OF CREDIT QUALITY DATA, CONTINUED
(Dollars in thousands)
(Unaudited)
           

Allowance for Loan and Lease Losses

At September 30, 2013At June 30, 2013At September 30, 2012Change from
% of% of% ofJun. 30,Sep. 30,
BalancePortfolioBalancePortfolioBalancePortfolio20132012
Consumer real estate$177,9702.77%$181,0522.85%$178,9422.69%(8)bps8bps
Commercial46,6381.4950,0721.4953,7561.53-(4)

Leasing and equipment finance

18,216.5517,975.5521,331.68-(13)
Inventory finance8,547.508,197.487,003.4822
Auto finance9,112.857,509.853,059.75-10
Other8022.99794   3.167502.72(17)27
Total$261,2851.67$265,599   1.70$264,8411.74(3)(7)
 

Net Charge-Offs

Change from
Quarter EndedQuarter Ended
Sep. 30,Jun. 30,Mar. 31,Dec. 31,Sep. 30,Jun. 30,Sep. 30,
2013201320132012201220132012
Consumer real estate
First mortgage lien$12,770$15,084$19,907$22,163$40,469

 

$

(2,314)

 

$

(27,699)
Junior lien5,4748,642   10,54011,75734,202(3,168)(28,728)
Total consumer real estate18,24423,72630,44733,92074,671(5,482)(56,427)
Commercial6,5132,4497,8498,35120,5474,064(14,034)
Leasing and equipment finance6582441,2101,3457,521414(6,863)
Inventory finance86(14)355193444100(358)
Auto finance1,122765836771280357842
Other993524   307940991469   2  
Total$27,616$27,694   $41,004$45,520$104,454

 

$

(78)

 

$

(76,838)
 

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

Change from
Quarter Ended (1)Quarter Ended
Sep. 30,Jun. 30,Mar. 31,Dec. 31,Sep. 30,Jun. 30,Sep. 30,
2013201320132012201220132012
Consumer real estate
First mortgage lien1.30%1.48%1.90%2.06%3.60%(18)bps(230)bps
Junior lien.881.461.781.996.12(58)(524)
Total consumer real estate1.141.481.862.044.44(34)(330)
Commercial.79.29.94.972.3250(153)
Leasing and equipment finance.08.03.15.17.955(87)
Inventory finance.02-.08.05.122(10)
Auto finance.46.37.50.61.30916
OtherNM16.059.01N.M.N.M.N.M.N.M.
Total.71.701.061.182.741(203)
 
(1) Annualized.
N.M. Not Meaningful.
 
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Dollars in thousands)
(Unaudited)
           
Three Months Ended September 30,
20132012
AverageYields andAverageYields and
BalanceInterest

Rates(1)(2)

BalanceInterest

Rates(1)(2)

ASSETS:
Investments and other$876,685$4,1611.89%$479,083$2,5082.09%
U.S. Government sponsored entities:
Mortgage-backed securities, fixed rate638,4184,4482.79710,8355,6053.15
U.S. Treasury securities------
Other securities   110   -2.04   154   23.32
Total securities available for sale (3)   638,528   4,4482.79   710,989   5,6073.15
Loans and leases held for sale156,5932,9657.5180,5491,5977.89
Loans and leases:
Consumer real estate:
Fixed-rate3,678,66553,1205.734,197,90362,6795.94
Variable-rate   2,723,947   34,9875.10   2,531,351   32,0715.04
Total consumer real estate   6,402,612   88,1075.46   6,729,254   94,7505.60
Commercial:
Fixed- and adjustable-rate2,284,31830,4795.292,682,19337,5655.57
Variable-rate   998,562   9,1243.62   855,918   8,1163.77
Total commercial   3,282,880   39,6034.79   3,538,111   45,6815.14
Leasing and equipment finance3,261,63840,2814.943,164,59242,1525.33
Inventory finance1,637,53824,8206.011,440,29822,3956.19
Auto finance973,41811,5444.70367,2715,5155.97
Other   12,299   2588.34   16,280   3207.83
Total loans and leases (4)   15,570,385   204,6135.22   15,255,806   210,8135.50
Total interest-earning assets   17,242,191   216,1874.98   16,526,427   220,5255.32
Other assets (5)   1,060,409   1,190,094
Total assets$18,302,600$17,716,521
LIABILITIES AND EQUITY:
Non-interest bearing deposits:
Retail$1,435,958$1,275,722
Small business777,538746,511
Commercial and custodial   347,971   324,739
Total non-interest bearing deposits   2,561,467   2,346,972
Interest-bearing deposits:
Checking2,292,133350.062,255,561698.12
Savings6,238,4623,574.236,153,0794,720.31
Money market   822,094   588.28   848,899   816.38
Subtotal9,352,6894,512.199,257,5396,234.27
Certificates of deposit   2,401,811   5,132.85   1,953,208   4,523.92
Total interest-bearing deposits   11,754,500   9,644.33   11,210,747   10,757.38
Total deposits   14,315,967   9,644.27   13,557,719   10,757.32
Borrowings:
Short-term borrowings6,54511.5965,53139.24
Long-term borrowings   1,609,211   6,1711.53   1,985,094   8,4971.71
Total borrowings   1,615,756   6,1821.52   2,050,625   8,5361.66
Total interest-bearing liabilities   13,370,256   15,826.47   13,261,372   19,293.58
Total deposits and borrowings   15,931,723   15,826.39   15,608,344   19,293.49
Other liabilities   455,911   343,336
Total liabilities   16,387,634   15,951,680

Total TCF Financial Corp. stockholders' equity

1,899,2821,749,951
Non-controlling interest in subsidiaries   15,684   14,890
Total equity   1,914,966   1,764,841
Total liabilities and equity$18,302,600$17,716,521
Net interest income and margin$200,3614.62$201,2324.85
 
(1) Annualized.
(2) Interest and yields are presented on a fully tax equivalent basis.
(3) Average balances and yields of securities available for sale are based upon historical amortized cost and exclude equity securities.
(4) Average balances of loans and leases include non-accrual loans and leases, and are presented net of unearned income.
(5) Includes operating leases.
 
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Dollars in thousands)
(Unaudited)
             
Nine Months Ended September 30,
20132012
AverageYields andAverageYields and
BalanceInterest

Rates(1)(2)

BalanceInterest

Rates(1)(2)

ASSETS:
Investments and other$809,237$11,1681.84%$551,653$7,5501.83%
U.S. Government sponsored entities:
Mortgage-backed securities, fixed rate655,94913,8782.821,175,51430,5293.46
U.S. Treasury securities461-.07---
Other securities   103   22.35   203   63.92
Total securities available for sale (3)   656,513   13,8802.82   1,175,717   30,5353.46
Loans and leases held for sale142,5908,1047.6043,8712,6217.98
Loans and leases:
Consumer real estate:
Fixed-rate3,800,608166,1555.844,335,073192,2635.92
Variable-rate   2,662,069   101,6145.10   2,453,953   92,3415.03
Total consumer real estate   6,462,677   267,7695.54   6,789,026   284,6045.60
Commercial:
Fixed- and adjustable-rate2,384,19494,2875.292,716,583113,0175.56
Variable-rate   937,264   24,9923.57   779,531   23,1793.97
Total commercial   3,321,458   119,2794.80   3,496,114   136,1965.20
Leasing and equipment finance3,232,873121,1845.003,146,345129,2615.48
Inventory finance1,731,02278,2856.051,392,82864,8116.22
Auto finance823,31630,3794.93226,09210,9336.46
Other   12,996   7978.21   17,166   1,0257.97
Total loans and leases (4)   15,584,342   617,6935.30   15,067,571   626,8305.55
Total interest-earning assets   17,192,682   650,8455.06   16,838,812   667,5365.29
Other assets (5)   1,098,845   1,256,931
Total assets$18,291,527$18,095,743
LIABILITIES AND EQUITY:
Non-interest bearing deposits:
Retail$1,446,184$1,317,448
Small business758,156726,732
Commercial and custodial   334,978   313,240
Total non-interest bearing deposits   2,539,318   2,357,420
Interest-bearing deposits:
Checking2,317,2901,224.072,258,8432,482.15
Savings6,130,0529,733.216,022,75115,323.34
Money market   809,800   1,765.29   753,486   2,144.38
Subtotal9,257,14212,722.189,035,08019,949.29
Certificates of deposit   2,362,274   15,454.87   1,567,258   10,067.86
Total interest-bearing deposits   11,619,416   28,176.32   10,602,338   30,016.38
Total deposits   14,158,734   28,176.27   12,959,758   30,016.31
Borrowings:
Short-term borrowings7,48727.47</