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Press Release

TCF Reports Quarterly Net Income of $24.0 Million, or 12 Cents Per Share and Annual Net Income of $174.2 Million, or 94 Cents Per Share

Company Release - 1/29/2015 8:00 AM ET

WAYZATA, Minn.--(BUSINESS WIRE)-- 2014 HIGHLIGHTS

  • Revenue of $1.2 billion, up 3.5 percent from 2013
  • Loan and lease originations of $13.5 billion, up 12.2 percent from 2013
  • Average deposits of $14.9 billion, up 5.2 percent from 2013
  • Provision for credit losses of $95.7 million, down 19.1 percent from 2013
  • Non-accrual loans and leases of $216.7 million, down 21.8 percent from December 31, 2013
  • Return on average assets of 0.96 percent, up 9 basis points from 2013
  • Return on average tangible common equity (1) of 10.08 percent, up 50 basis points from 2013

FOURTH QUARTER HIGHLIGHTS

  • Revenue of $313.8 million, up 2.1 percent from the fourth quarter of 2013
  • Loan and lease originations of $3.5 billion, up 12.6 percent from the fourth quarter of 2013
  • Average deposits of $15.3 billion, up 6.6 percent from the fourth quarter of 2013
  • Reduced balance sheet credit risk by selling $405.9 million of consumer TDR loans
  • Sale of $405.9 million of consumer TDR loans resulted in a $23.1 million pre-tax charge, or 9 cents per share
  • Additional provision for credit losses of $21.8 million, or 8 cents per share
                                           
Summary of Financial Results                                   Table 1
(Dollars in thousands, except per-share data)     Percent Change      
 

4Q

  3Q 4Q

 4Q14 vs 

 

 4Q14 vs 

YTD YTD Percent

2014

   

2014

   

2013

    3Q14   4Q13   2014     2013     Change
Net income attributable to TCF

23,988

52,317 $ 39,995 (54.1 )% (40.0 )% $ 174,187 $ 151,668 14.8 %
Net interest income

 204,074

 204,180

201,862 (0.1 ) 1.1 815,629 802,624 1.6
Diluted earnings per common share 0.12 0.29 0.22 (58.6 ) (45.5 ) 0.94 0.82 14.6
 

Financial Ratios (2)

Pre-tax pre-provision return on average assets (3) 1.91 % 2.13 % 1.90 % 2.00 % 1.98 %
Return on average assets 0.53 1.15 0.90 0.96 0.87
Return on average common equity 4.15 10.50 8.39 8.71 8.12
Return on average tangible common equity (1) 4.80 12.11 9.83 10.08 9.58
Net interest margin 4.49 4.60 4.67 4.61 4.68
Net charge-offs as a percentage of average loans and leases 0.40 0.66 0.76 0.49 0.81
 
(1) See "Reconciliation of GAAP to Non-GAAP Financial Measures" table.
(2) Annualized.
(3) Pre-tax pre-provision profit is calculated as total revenues less non-interest expense.
 

TCF Financial Corporation ("TCF" or the "Company") (NYSE:TCB) today reported net income of $24.0 million for the fourth quarter of 2014, compared with net income of $40.0 million for the fourth quarter of 2013, and net income of $52.3 million for the third quarter of 2014. Diluted earnings per common share was 12 cents for the fourth quarter of 2014, compared with 22 cents for the fourth quarter of 2013, and 29 cents for the third quarter of 2014.

TCF reported net income of $174.2 million for the year ended December 31, 2014, compared with net income of $151.7 million for the same period in 2013. Diluted earnings per common share was 94 cents for the year ended December 31, 2014, compared with 82 cents for the same period in 2013.

Chairman's Statement

"TCF completed a strong year as earnings per share increased 14.6 percent from 82 cents in 2013 to 94 cents in 2014," said William A. Cooper, Chairman and Chief Executive Officer. "This earnings per share growth in 2014 occurred despite a pre-tax charge of 17 cents related to the sale of consumer troubled debt restructurings and additional provision for credit losses during the fourth quarter. This sale allowed us to reduce balance sheet credit risk and provide further diversification of our loan and lease portfolio by reducing the high concentration of legacy consumer real estate loans. I believe that the clean-up of this portfolio gives us a fresh start and will significantly reduce credit and operating costs as we move into 2015.

"Overall, 2014 was highlighted by strong loan and lease originations, a focus on diversification of both revenue and earning assets, one of the highest net interest margins in the industry and continued strong credit quality particularly in our national lending businesses. While I am pleased with where we stand today, our focus is on the future and I believe we have the team in place to fulfill our goals moving forward."

     
Revenue
                                                   
Total Revenue                                         Table 2
          Percent Change
(Dollars in thousands)

4Q

3Q

4Q

 4Q14 vs 

 

 4Q14 vs 

YTD YTD Percent

2014

     

2014

   

2013

    3Q14   4Q13   2014     2013     Change
Net interest income $ 204,074       $ 204,180     $ 201,862   (0.1 )% 1.1 % $ 815,629     $ 802,624   1.6 %
Fees and other revenue:
Fees and service charges 39,477 40,255 43,254 (1.9 ) (8.7 ) 154,386 166,606 (7.3 )
Card revenue 12,830 12,994 13,066 (1.3 ) (1.8 ) 51,323 51,920 (1.1 )
ATM revenue 5,249       5,863     5,382   (10.5 ) (2.5 ) 22,225     22,656   (1.9 )
Total banking fees 57,556 59,112 61,702 (2.6 ) (6.7 ) 227,934 241,182 (5.5 )
Gains on sales of auto loans, net 12,962 14,863 7,278 (12.8 ) 78.1 43,565 29,699 46.7
Gains on sales of consumer real estate loans, net 6,175 8,762 5,345 (29.5 ) 15.5 34,794 21,692 60.4
Servicing fee income 6,365       5,880     3,903   8.2 63.1 21,444     13,406   60.0
Subtotal 25,502 29,505 16,526 (13.6 ) 54.3 99,803 64,797 54.0
Leasing and equipment finance 24,367 24,383 23,328 (0.1 ) 4.5 93,799 90,919 3.2
Other 2,363       3,170     2,812   (25.5 ) (16.0 ) 10,704     6,196   72.8
Total fees and other revenue 109,788       116,170     104,368   (5.5 ) 5.2 432,240     403,094   7.2
Gains (losses) on securities, net (20 )     (94 )   1,044   78.7 N.M. 1,027     964   6.5
Total non-interest income 109,768  

 

  116,076     105,412   (5.4 ) 4.1 433,267     404,058   7.2
Total revenue $ 313,842       $ 320,256     $ 307,274   (2.0 ) 2.1 $ 1,248,896     $ 1,206,682   3.5
 
Net interest margin (1) 4.49 % 4.60 % 4.67 % 4.61 % 4.68 %
Total non-interest income as a % of total revenue 35.0 36.2 34.3 34.7 33.5
 
N.M. Not Meaningful.
(1) Annualized.
 

Net Interest Income

  • Net interest income for the fourth quarter of 2014 increased $2.2 million, or 1.1 percent, compared with the fourth quarter of 2013. The increase was primarily driven by higher average loan and lease balances in the auto finance, leasing and equipment finance and inventory finance businesses, partially offset by lower average consumer real estate loan balances due to run-off, as well as continued margin reduction.
  • Net interest margin in the fourth quarter of 2014 was 4.49 percent, compared with 4.67 percent in the fourth quarter of 2013 and 4.60 percent in the third quarter of 2014. The decreases from both periods were primarily due to continued margin reduction resulting from the competitive low interest rate environment. The yield on inventory finance loans was 5.56 percent in the fourth quarter of 2014, compared with 5.85 percent in the fourth quarter of 2013 and 6.18 percent