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TCF Reports Quarterly Net Income of $52.5 Million, or 29 Cents Per Share and Annual Net Income of $197.1 Million, or $1.07 Per Share

Company Release - 1/28/2016 8:00 AM ET

2015 HIGHLIGHTS

  • Loan and lease originations of $15.3 billion, up 13.1 percent from 2014
  • Period-end loans and leases of $17.4 billion, up 6.3 percent from 2014
  • Non-accrual loans and leases of $200.5 million, down 7.5 percent from 2014
  • Average deposits of $15.9 billion, up 6.7 percent from 2014
  • Revenue of $1.3 billion, up 1.1 percent from 2014
  • Provision for credit losses of $52.9 million, down 44.7 percent from 2014
  • Earnings per share of $1.07, up 13.8 percent from 2014

FOURTH QUARTER HIGHLIGHTS

  • Loan and lease originations of $3.8 billion, up 11.2 percent from the fourth quarter of 2014
  • Average deposits of $16.3 billion, up 6.4 percent from the fourth quarter of 2014
  • Revenue of $321.3 million, up 2.4 percent from the fourth quarter of 2014
  • Provision for credit losses of $17.6 million, down 68.3 percent from the fourth quarter of 2014
  • Earnings per share of 29 cents, up 141.7 percent from the fourth quarter of 2014

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

TCF Financial Corporation (NYSE:TCB):

                                     
Summary of Financial Results                                   Table 1
            Percent Change      
(Dollars in thousands, except per-share data) 4Q3Q4Q4Q15 vs   4Q15 vsYTDYTDPercent
2015   2015   2014   3Q15   4Q14   2015   2014   Change
Net income attributable to TCF $ 52,492 $ 52,575 $ 23,988 (0.2 )% 118.8 % $ 197,123 $ 174,187 13.2 %
Net interest income 205,669 205,270 204,074 0.2 0.8 820,388 815,629 0.6
Diluted earnings per common share 0.29 0.29 0.12 141.7 1.07 0.94 13.8
 

Financial Ratios(1)

Pre-tax pre-provision return on average assets(2)

1.95 % 1.92 % 1.91 % 1.85 % 2.00 %
Return on average assets 1.08 1.10 0.53 1.03 0.96
Return on average common equity 9.53 9.76 4.15 9.19 8.71

Return on average tangible common equity(3)

10.82 11.12 4.80 10.48 10.08
Net interest margin 4.35 4.40 4.49 4.42 4.61

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

0.29 0.23 0.40 0.30 0.49
 
(1) Annualized.
(2) Pre-tax pre-provision profit is calculated as total revenues less non-interest expense.
(3) See "Reconciliation of GAAP to Non-GAAP Financial Measures" table.
 

TCF Financial Corporation ("TCF" or the "Company") (NYSE: TCB) today reported net income of $52.5 million for the fourth quarter of 2015, compared with net income of $24.0 million for the fourth quarter of 2014, and net income of $52.6 million for the third quarter of 2015. Diluted earnings per common share was 29 cents for the fourth quarter of 2015, compared with 12 cents for the fourth quarter of 2014, and 29 cents for the third quarter of 2015.

TCF reported net income of $197.1 million for the year ended December 31, 2015, compared with net income of $174.2 million for the same period in 2014. Diluted earnings per common share was $1.07 for the year ended December 31, 2015, compared with 94 cents for the same period in 2014.

"TCF experienced another successful year in 2015 as earnings per share increased 13.8 percent while return on average tangible common equity improved by 40 basis points," said Craig R. Dahl, chief executive officer. "Meanwhile, loan and lease originations increased 13.1 percent during the year which led to additional revenue growth and diversification. Fourth quarter results were highlighted by continued progress toward improving operating leverage and continued strong performance on credit results.

"As I begin my new role, I look forward to building on TCF's historical track record of delivering sustained growth and returns for our shareholders by executing against our four strategic pillars: diversification, profitable growth, operating leverage and core funding. As we entered the new year, we implemented several leadership changes that align the expertise of our senior management team with these core priorities. I am confident we have a strong team in place to execute our strategy and build on TCF's long history of delivering business results. With a well-positioned balance sheet and business model for rising interest rates, and continued strong credit performance, we are poised to drive shareholder value in 2016 and beyond."

                   
Revenue
                                   

 

Total Revenue                                

 

Table 2

Percent Change
(Dollars in thousands) 4Q3Q4Q4Q15 vs4Q15 vsYTDYTDPercent
2015   2015   2014   3Q15   4Q14   2015   2014   Change
Net interest income $ 205,669     $ 205,270     $ 204,074   0.2 % 0.8 % $ 820,388     $ 815,629   0.6 %
Non-interest income:
Fees and service charges 37,741 36,991 39,477 2.0 (4.4 ) 144,999 154,386 (6.1 )
Card revenue 13,781 13,803 12,830 (0.2 ) 7.4 54,387 51,323 6.0
ATM revenue 5,143     5,739     5,249   (10.4 ) (2.0 ) 21,544     22,225   (3.1 )
Subtotal 56,665 56,533 57,556 0.2 (1.5 ) 220,930 227,934 (3.1 )
Gains on sales of auto loans, net 3,136 10,423 12,962 (69.9 ) (75.8 ) 30,580 43,565 (29.8 )

Gains on sales of consumer real estate loans, net

13,104 7,143 6,175 83.5 112.2 40,964 34,794 17.7
Servicing fee income 8,622     8,049     6,365   7.1 35.5 31,229     21,444   45.6
Subtotal 24,862 25,615 25,502 (2.9 ) (2.5 ) 102,773 99,803 3.0
Leasing and equipment finance 32,355 27,165 24,367 19.1 32.8 108,129 93,799 15.3
Other 1,806     3,070     2,363   (41.2 ) (23.6 ) 10,463     10,704   (2.3 )
Fees and other revenue 115,688 112,383 109,788 2.9 5.4 442,295 432,240 2.3
Gains (losses) on securities, net (29 )   (131 )   (20 ) 77.9 (45.0 ) (297 )   1,027   N.M.
Total non-interest income 115,659     112,252     109,768   3.0 5.4 441,998     433,267   2.0
Total revenue $ 321,328     $ 317,522     $ 313,842   1.2 2.4 $ 1,262,386     $ 1,248,896   1.1
 
Net interest margin(1) 4.35 % 4.40 % 4.49 % 4.42 % 4.61 %
Total non-interest income as a percentage of total revenue 36.0 35.4 35.0 35.0 34.7
 
N.M. Not Meaningful.
 
(1) Annualized.                                    
 

Net Interest Income

  • Net interest income for the fourth quarter of 2015 increased $1.6 million, or 0.8 percent, compared with the fourth quarter of 2014 and increased $0.4 million, or 0.2 percent, compared with the third quarter of 2015. The increases from both periods were primarily due to higher average loan and lease balances in the auto finance, inventory finance and leasing and equipment finance portfolios, partially offset by the run-off of consumer real estate first mortgage lien balances and overall net margin compression.
  • Net interest margin for the fourth quarter of 2015 was 4.35 percent, compared with 4.49 percent for the fourth quarter of 2014 and 4.40 percent for the third quarter of 2015. The decreases from both periods were primarily due to margin compression resulting from the impact of the competitive low interest rate environment on the asset composition and higher rates on total deposits, driven primarily by certificates of deposits, acquired at market rates to fund asset growth.

Non-interest Income

  • Fees and service charges in the fourth quarter of 2015 were $37.7 million, down $1.7 million, or 4.4 percent, from the fourth quarter of 2014 and consistent with the third quarter of 2015. The decrease from the fourth quarter of 2014 was primarily due to consumer behavior changes, as well as higher average checking account balances per customer.
  • TCF sold $271.1 million, $367.0 million and $436.6 million of auto loans during the fourth quarters of 2015 and 2014, and the third quarter of 2015, respectively, resulting in net gains in each respective period. TCF executed another auto loan securitization in the four quarter of 2015.
  • TCF sold $389.1 million, $613.7 million and $246.0 million of consumer real estate loans during the fourth quarters of 2015 and 2014, and the third quarter of 2015, respectively, resulting in net gains in each respective period. TCF has two consumer real estate loan sale programs; one that sells nationally originated junior lien loans and the other that originates first mortgage lien loans in our primary banking markets and sells the loans through a correspondent relationship. Included in consumer real estate loans sold (servicing released) for the fourth quarter of 2014 is $405.9 million related to the portfolio sale of consumer real estate loans, primarily troubled debt restructuring ("TDR") loans, the proceeds of which were reinvested in our core businesses in 2015.
  • Servicing fee income was $8.6 million on $4.2 billion of average loans and leases serviced for others during the fourth quarter of 2015 compared with $6.4 million on $3.3 billion for the fourth quarter of 2014 and $8.0 million on $4.0 billion for the third quarter of 2015. The increases from both periods were primarily due to the cumulative effect of an increase in the portfolio of auto and consumer real estate loans sold with servicing retained by TCF.
           
Loans and Leases
                                     
Period-End and Average Loans and Leases   Table 3
      Percent Change
(Dollars in thousands) 4Q3Q4Q4Q15 vs   4Q15 vsYTDYTDPercent
2015   2015   2014   3Q15   4Q14   2015   2014   Change
Period-End:
Consumer real estate:
First mortgage lien $ 2,624,956 $ 2,724,594 $ 3,139,152 (3.7 )% (16.4 )%
Junior lien 2,839,316     2,889,120     2,543,212   (1.7 ) 11.6
Total consumer real estate 5,464,272 5,613,714 5,682,364 (2.7 ) (3.8 )
Commercial 3,145,832 3,112,325 3,157,665 1.1 (0.4 )
Leasing and equipment finance 4,012,248 3,873,581 3,745,322 3.6 7.1
Inventory finance 2,146,754 2,153,385 1,877,090 (0.3 ) 14.4
Auto finance 2,647,596 2,427,367 1,915,061 9.1 38.3
Other 19,297     20,674     24,144   (6.7 ) (20.1 )
Total $ 17,435,999     $ 17,201,046     $ 16,401,646   1.4 6.3
 
Average:
Consumer real estate:
First mortgage lien $ 2,670,355 $ 2,793,129 $ 3,447,447 (4.4 )% (22.5 )% $ 2,867,948 $ 3,567,088 (19.6 )%
Junior lien 2,934,169     2,813,253     2,611,709   4.3 12.3 2,754,253     2,581,464   6.7
Total consumer real estate 5,604,524 5,606,382 6,059,156 (7.5 ) 5,622,201 6,148,552 (8.6 )
Commercial 3,117,983 3,118,024 3,143,614 (0.8 ) 3,134,428 3,135,367
Leasing and equipment finance 3,911,025 3,821,590 3,611,557 2.3 8.3 3,804,015 3,531,256 7.7
Inventory finance 2,180,534 2,036,054 1,891,504 7.1 15.3 2,154,357 1,888,080 14.1
Auto finance 2,514,923 2,361,057 1,817,024 6.5 38.4 2,278,617 1,567,904 45.3
Other 9,060     9,833     11,396   (7.9 ) (20.5 ) 10,303     12,071   (14.6 )
Total $ 17,338,049     $ 16,952,940     $ 16,534,251   2.3 4.9 $ 17,003,921     $ 16,283,230   4.4
 
  • Period-end loans and leases were $17.4 billion at December 31, 2015, an increase of $1.0 billion, or 6.3 percent, compared with December 31, 2014 and an increase of $0.2 billion, or 1.4 percent, compared with September 30, 2015. Average loans and leases were $17.3 billion for the fourth quarter of 2015, an increase of $0.8 billion, or 4.9 percent, compared with the fourth quarter of 2014 and an increase of $0.4 billion, or 2.3 percent, compared with the third quarter of 2015.

    The increases from both periods for period-end loans and leases and for average loans and leases were primarily due to the continued growth of the auto finance portfolio as TCF expands the number of active dealers in its network, partially offset by run-off in the consumer real estate first mortgage lien portfolio. The increases from the fourth quarter of 2014 for period-end loans and leases and from both periods for average loans and leases were also due to increases in the inventory finance and the leasing and equipment finance portfolios. The increase from the third quarter of 2015 for period-end loans and leases was also due to an increase in the leasing and equipment finance portfolio due to strong fourth quarter originations.
  • Loan and lease originations were $3.8 billion for the fourth quarter of 2015, an increase of $0.4 billion, or 11.2 percent, compared with the fourth quarter of 2014 and a decrease of $0.1 billion, or 1.3 percent, compared with the third quarter of 2015. The increase in originations from the fourth quarter of 2014 was primarily due to an increase in commercial originations and continued growth in auto finance. The decrease in originations from the third quarter of 2015 was primarily due to seasonality of inventory finance originations and a decrease in consumer real estate originations, partially offset by an increase in commercial and leasing and equipment finance originations.
                   
Credit Quality
                                   
Credit Trends                                 Table 4
Change
(Dollars in thousands) 4Q3Q2Q1Q4Q4Q15 vs4Q15 vs
2015   2015   2015   2015   2014     3Q15   4Q14

Over 60-day delinquencies as a percentage of portfolio(1)

0.11

%

0.17

% 0.10 % 0.14 % 0.14 %

(6

) bps

(3

) bps

Net charge-offs as a percentage of portfolio(2)

0.29 0.23 0.41 0.28 0.40 6 (11 )

Non-accrual loans and leases and other real estate owned

$ 250,448 $ 264,694 $ 263,717 $ 284,541 $ 282,384 (5.4 )% (11.3 )%
Provision for credit losses 17,607 10,018 12,528 12,791 55,597 75.8 (68.3 )
 
(1) Excludes acquired portfolios and non-accrual loans and leases.
(2) Annualized.
 
  • The over 60-day delinquency rate, excluding acquired portfolios and non-accrual loans and leases, was 0.11 percent at December 31, 2015, down from 0.14 percent at December 31, 2014, and down from 0.17 percent at September 30, 2015. The decrease from December 31, 2014 was primarily a result of the stabilization of the consumer real estate portfolio as economic conditions improved in our markets. The decrease from September 30, 2015 was primarily driven by delinquencies in the commercial and leasing and equipment finance portfolios at September 30, 2015 that have been brought current.
  • The net charge-off rate was 0.29 percent for the fourth quarter of 2015, down from 0.40 percent for the fourth quarter of 2014, and up from 0.23 percent for the third quarter of 2015. The decrease from the fourth quarter of 2014 was primarily due to improved credit quality in the consumer real estate and commercial portfolios. The increase from the third quarter of 2015 was due to increased net charge-offs of loans in the auto finance portfolio as a result of seasonality, increased net charge-offs in the leasing and equipment finance portfolio and net recoveries in the commercial portfolio during the third quarter of 2015.
  • Non-accrual loans and leases and other real estate owned was $250.4 million at December 31, 2015, a decrease of $31.9 million, or 11.3 percent, from December 31, 2014, and a decrease of $14.2 million, or 5.4 percent, from September 30, 2015. The decreases from both periods were primarily due to the improving credit quality trends and continued efforts to actively work out problem loans in the commercial portfolio.
  • Provision for credit losses was $17.6 million for the fourth quarter of 2015, a decrease of $38.0 million, or 68.3 percent, from the fourth quarter of 2014, and an increase of $7.6 million, or 75.8 percent, from the third quarter of 2015. The decrease from the fourth quarter of 2014 was primarily due to provision expense recorded in the fourth quarter of 2014 related to the TDR loan sale in that period. The increase from the third quarter of 2015 was due to increased reserve requirements related to asset growth and increased net charge-offs of loans in the auto finance portfolio driven by seasonality.
                   
Deposits
                                     
Average Deposits                                   Table 5
Percent Change
(Dollars in thousands) 4Q3Q4Q4Q15 vs4Q15 vsYTDYTDPercent
2015   2015   2014   3Q15   4Q14   2015   2014   Change
 
Checking $ 5,412,454 $ 5,405,442 $ 5,109,465 0.1 % 5.9 % $ 5,387,112 $ 5,075,759 6.1 %
Savings 4,733,703 4,872,853 5,289,435 (2.9 ) (10.5 ) 4,952,680 5,713,389 (13.3 )
Money market 2,349,127 2,297,893 1,869,350 2.2 25.7 2,265,121 1,312,483 72.6
Certificates of deposit 3,793,653     3,400,282     3,041,722   11.6 24.7 3,340,341     2,840,922   17.6
Total average deposits $ 16,288,937     $ 15,976,470     $ 15,309,972   2.0 6.4 $ 15,945,254     $ 14,942,553   6.7
 
Average interest rate on deposits(1) 0.34 % 0.31 % 0.28 % 0.30 % 0.26 %
 
(1) Annualized.                                    
 
  • Total average deposits for the fourth quarter of 2015 increased $1.0 billion, or 6.4 percent, from the fourth quarter of 2014 and increased $0.3 billion, or 2.0 percent, from the third quarter of 2015. The increases from both periods were primarily due to special campaigns for certificates of deposit and money market accounts.
  • The average interest rate on deposits for the fourth quarter of 2015 was 0.34 percent, up 6 basis points from the fourth quarter of 2014 and up 3 basis points from the third quarter of 2015. The increases from both periods were primarily due to increased average interest rates resulting from promotions for certificates of deposit.
                   
Non-interest Expense
                                     
Non-interest Expense                                   Table 6
Percent Change
(Dollars in thousands) 4Q3Q4Q4Q15 vs4Q15 vsYTDYTDPercent
2015   2015   2014   3Q15   4Q14   2015   2014   Change
 
Compensation and employee benefits $ 109,061 $ 116,708 $ 115,796 (6.6 )% (5.8 )% $ 457,743 $ 452,942 1.1 %
Occupancy and equipment 37,824 34,159 35,747 10.7 5.8 144,962 139,023 4.3
FDIC insurance 5,173 4,832 2,643 7.1 95.7 20,262 25,123 (19.3 )
Advertising and marketing 5,316 5,793 5,146 (8.2 ) 3.3 22,782 22,943 (0.7 )
Other 46,441     45,750     48,063   1.5 (3.4 ) 186,211     179,904   3.5
Subtotal 203,815 207,242 207,395 (1.7 ) (1.7 ) 831,960 819,935 1.5
Operating lease depreciation 13,608 9,485 6,878 43.5 97.8 39,409 27,152 45.1
Foreclosed real estate and repossessed assets, net 4,940 5,680 7,441 (13.0 ) (33.6 ) 23,193 24,567 (5.6 )
Other credit costs, net 224     (123 )   44   N.M. N.M. 185     123   50.4
Total non-interest expense $ 222,587     $ 222,284     $ 221,758   0.1 0.4 $ 894,747     $ 871,777   2.6
 
N.M. Not Meaningful.                                    
 
  • Compensation and employee benefits expense decreased $6.7 million, or 5.8 percent, from the fourth quarter of 2014 and decreased $7.6 million, or 6.6 percent, from the third quarter of 2015. The decreases from both periods were primarily due to non-recurring items, including the annual pension plan valuation adjustment resulting from an increase to the discount rate.
  • FDIC insurance expense increased $2.5 million, or 95.7 percent, from the fourth quarter of 2014 and remained consistent with the third quarter of 2015. The increase from the fourth quarter of 2014 was primarily due to a non-recurring assessment rate catch-up in the fourth quarter of 2014.
  • Foreclosed real estate and repossessed assets, net expense decreased $2.5 million, or 33.6 percent, from the fourth quarter of 2014 and decreased $0.7 million, or 13.0 percent from the third quarter of 2015. The decreases from both periods were due to a reduction in write-downs of existing foreclosed commercial and consumer real estate properties. The other real estate owned balance was $50.0 million at December 31, 2015, the lowest level since the first quarter of 2008.
       
Capital
               
Capital Information           Table 7
 
(Dollars in thousands, except per-share data) 4Q 20154Q 2014
Total equity $ 2,306,917 $ 2,135,364
Book value per common share 11.94 11.10
Tangible book value per common share(1) 10.59 9.72
Tangible common equity to tangible assets(1) 8.79 % 8.50 %
Capital accumulation rate(2) 10.44 10.36
 
4Q 2015(3)4Q 2014
Regulatory Capital: Under Basel III Under Basel I
Common equity Tier 1 capital $ 1,814,442 N.A.
Tier 1 capital 2,092,195 $ 1,919,887
Total capital 2,487,060 2,209,999
 
Regulatory Capital Ratios:
Common equity Tier 1 capital ratio 10.00 % N.A.
Tier 1 risk-based capital ratio 11.54 11.76 %
Total risk-based capital ratio 13.71 13.54
Tier 1 leverage ratio 10.46 10.07
 
N.A. Not Applicable.
(1) See "Reconciliation of GAAP to Non-GAAP Financial Measures" table.
(2) Calculated as the change in annualized year-to-date common equity Tier 1 capital as a percentage of prior year end common equity Tier 1 capital.
(3) The regulatory capital ratios for 4Q 2015 are preliminary pending completion and filing of the Company's regulatory reports.
 
  • TCF maintained strong capital ratios as the Company accumulates capital through earnings. The decrease in the Tier 1 risk-based capital ratio from the fourth quarter of 2014 was primarily the result of strong asset growth.
  • On January 22, 2016, TCF's Board of Directors declared a regular quarterly cash dividend of 7.5 cents per common share, payable on March 1, 2016, to stockholders of record at the close of business on February 12, 2016. TCF also declared dividends on the 7.50% Series A and 6.45% Series B Non-Cumulative Perpetual Preferred Stock, both payable on March 1, 2016, to stockholders of record at the close of business on February 12, 2016.

Webcast Information

A live webcast of TCF's conference call to discuss the fourth quarter earnings will be hosted at TCF's website, http://ir.tcfbank.com, on January 28, 2016 at 9:00 a.m. CST. A slide presentation for the call will be available on the website prior to the call. Additionally, the webcast will be available for replay on 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. As of December 31, 2015, TCF had $20.7 billion in total assets and 375 branches in Illinois, Minnesota, Michigan, Colorado, Wisconsin, Arizona, South Dakota and Indiana, providing retail and commercial banking services. TCF, through its subsidiaries, also conducts commercial leasing, equipment finance, and auto finance business in all 50 states and commercial inventory finance business in all 50 states and Canada. 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 herein. 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, 2014, 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 increases in unemployment; adverse economic, business and competitive developments such as shrinking interest margins, reduced demand for financial services and loan and lease products, deposit outflows, increased deposit costs due to competition for deposit growth and evolving payment system developments, 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, securities held to maturity 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 the 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 deposit, lending, loan collection and other business activities such as mortgage foreclosure moratorium laws, further regulation of financial institution campus banking programs, use by municipalities of eminent domain on property securing troubled residential mortgage loans, or imposition of underwriting or other limitations that impact the ability to offer certain variable-rate products; changes affecting customer account charges and fee income, including changes to interchange rates; regulatory actions or changes in customer opt-in preferences with respect to overdrafts, which may have an adverse impact on TCF's fee revenue; 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; regulatory criticism and resulting enforcement actions or other adverse consequences such as increased capital requirements, higher deposit insurance assessments or monetary damages or penalties; heightened regulatory practices, requirements or expectations, including, but not limited to, requirements related to enterprise risk management, 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 impact on banks of regulatory reform, including 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 or 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 future retail deposit account changes, including limitations on TCF's ability to predict customer behavior and the impact on TCF's fee revenues.

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 new or expanded programs or 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, including the failure to develop and maintain technology necessary to satisfy customer demands; ability to attract and retain employees given competitive conditions and the impact of consolidating facilities.

Litigation Risks. Results of litigation or government enforcement actions, including class action litigation or enforcement actions concerning TCF's lending or deposit activities, including account opening/origination, servicing practices, fees or charges, employment practices, or checking account overdraft program "opt in" requirements; and possible increases in indemnification obligations for certain litigation against Visa U.S.A.

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 December 31,Change
20152014$%
Interest income:
Loans and leases $ 212,346 $ 205,507 $ 6,839 3.3 %
Securities available for sale 4,864 3,053 1,811 59.3
Securities held to maturity 1,336 1,429 (93 ) (6.5 )
Investments and other 6,905   9,819   (2,914 ) (29.7 )
Total interest income 225,451   219,808   5,643   2.6
Interest expense:
Deposits 13,772 10,760 3,012 28.0
Borrowings 6,010   4,974   1,036   20.8
Total interest expense 19,782   15,734   4,048   25.7
Net interest income 205,669 204,074 1,595 0.8
Provision for credit losses 17,607   55,597   (37,990 ) (68.3 )

Net interest income after provision for credit losses

188,062   148,477   39,585   26.7
Non-interest income:
Fees and service charges 37,741 39,477 (1,736 ) (4.4 )
Card revenue 13,781 12,830 951 7.4
ATM revenue 5,143   5,249   (106 ) (2.0 )
Subtotal 56,665 57,556 (891 ) (1.5 )
Gains on sales of auto loans, net 3,136 12,962 (9,826 ) (75.8 )

Gains on sales of consumer real estate loans, net

13,104 6,175 6,929 112.2
Servicing fee income 8,622   6,365   2,257   35.5
Subtotal 24,862 25,502 (640 ) (2.5 )
Leasing and equipment finance 32,355 24,367 7,988 32.8

Other

1,806   2,363   (557 )

(23.6

)
Fees and other revenue 115,688 109,788 5,900 5.4
Gains (losses) on securities, net (29 ) (20 ) (9 ) (45.0 )
Total non-interest income 115,659   109,768   5,891   5.4
Non-interest expense:
Compensation and employee benefits 109,061 115,796 (6,735 ) (5.8 )
Occupancy and equipment 37,824 35,747 2,077 5.8
FDIC insurance 5,173 2,643 2,530 95.7
Advertising and marketing 5,316 5,146 170 3.3
Other 46,441   48,063   (1,622 ) (3.4 )
Subtotal 203,815 207,395 (3,580 ) (1.7 )
Operating lease depreciation 13,608 6,878 6,730 97.8
Foreclosed real estate and repossessed assets, net 4,940 7,441 (2,501 ) (33.6 )
Other credit costs, net 224   44   180   N.M.
Total non-interest expense 222,587   221,758   829   0.4
Income before income tax expense 81,134 36,487 44,647 122.4
Income tax expense 26,614   11,011   15,603   141.7
Income after income tax expense 54,520 25,476 29,044 114.0
Income attributable to non-controlling interest 2,028   1,488   540   36.3
Net income attributable to TCF Financial Corporation 52,492   23,988   28,504   118.8
Preferred stock dividends 4,847   4,847    
Net income available to common stockholders $ 47,645   $ 19,141   $ 28,504   148.9
 
Net income per common share:
Basic $ 0.29 $ 0.12 $ 0.17 141.7 %
Diluted 0.29 0.12 0.17 141.7
 
Dividends declared per common share $ 0.075 $ 0.05 $ 0.025 50.0 %
 

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

Basic 166,343 164,384 1,959 1.2 %
Diluted 166,942 164,869 2,073 1.3
 
N.M. Not Meaningful.
 
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per-share data)
(Unaudited)
             
Year Ended December 31,Change
20152014$%
Interest income:
Loans and leases $ 832,736 $ 820,436 $ 12,300 1.5 %
Securities available for sale 15,648 11,994 3,654 30.5
Securities held to maturity 5,486 5,281 205 3.9
Investments and other 38,060   36,518   1,542   4.2
Total interest income 891,930   874,229   17,701   2.0
Interest expense:
Deposits 48,226 38,385 9,841 25.6
Borrowings 23,316   20,215   3,101   15.3
Total interest expense 71,542   58,600   12,942   22.1
Net interest income 820,388 815,629 4,759 0.6
Provision for credit losses 52,944   95,737   (42,793 ) (44.7 )
Net interest income after provision for credit losses 767,444   719,892   47,552   6.6
Non-interest income:
Fees and service charges 144,999 154,386 (9,387 ) (6.1 )
Card revenue 54,387 51,323 3,064 6.0
ATM revenue 21,544   22,225   (681 ) (3.1 )
Subtotal 220,930 227,934 (7,004 ) (3.1 )
Gains on sales of auto loans, net 30,580 43,565 (12,985 ) (29.8 )
Gains on sales of consumer real estate loans, net 40,964 34,794 6,170 17.7
Servicing fee income 31,229   21,444   9,785   45.6
Subtotal 102,773 99,803 2,970 3.0
Leasing and equipment finance 108,129 93,799 14,330 15.3
Other 10,463   10,704   (241 ) (2.3 )
Fees and other revenue 442,295 432,240 10,055 2.3
Gains (losses) on securities, net (297 ) 1,027   (1,324 ) N.M.
Total non-interest income 441,998   433,267   8,731   2.0
Non-interest expense:
Compensation and employee benefits 457,743 452,942 4,801 1.1
Occupancy and equipment 144,962 139,023 5,939 4.3
FDIC insurance 20,262 25,123 (4,861 ) (19.3 )
Advertising and marketing 22,782 22,943 (161 ) (0.7 )
Other 186,211   179,904   6,307   3.5
Subtotal 831,960 819,935 12,025 1.5
Operating lease depreciation 39,409 27,152 12,257 45.1
Foreclosed real estate and repossessed assets, net 23,193 24,567 (1,374 ) (5.6 )
Other credit costs, net 185   123   62   50.4
Total non-interest expense 894,747   871,777   22,970   2.6
Income before income tax expense 314,695 281,382 33,313 11.8
Income tax expense 108,872   99,766   9,106   9.1
Income after income tax expense 205,823 181,616 24,207 13.3
Income attributable to non-controlling interest 8,700   7,429   1,271   17.1
Net income attributable to TCF Financial Corporation 197,123   174,187   22,936   13.2
Preferred stock dividends 19,388   19,388    
Net income available to common stockholders $ 177,735   $ 154,799   $ 22,936   14.8
 
Net income per common share:
Basic $ 1.07 $ 0.95 $ 0.12 12.6 %
Diluted 1.07 0.94 0.13 13.8
 
Dividends declared per common share $ 0.225 $ 0.20 $ 0.025 12.5 %
 

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

Basic 165,697 163,581 2,116 1.3 %
Diluted 166,242 164,085 2,157 1.3
 
N.M. Not Meaningful.
 
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
(Unaudited)
             
Three Months Ended December 31,Change
20152014$%
Net income attributable to TCF Financial Corporation $ 52,492   $ 23,988   $ 28,504   118.8 %
Other comprehensive income (loss):
Securities available for sale:
Unrealized gains (losses) arising during the period (5,494 ) 9,419 (14,913 ) N.M.
Reclassification of net (gains) losses to net income 288 299 (11 ) (3.7 )
Net investment hedges:
Unrealized gains (losses) arising during the period 1,841 1,449 392 27.1
Foreign currency translation adjustment:
Unrealized gains (losses) arising during the period (1,986 ) (1,661 ) (325 ) (19.6 )
Recognized postretirement prior service cost:
Reclassification of net (gains) losses to net income (11 ) (12 ) 1 8.3
Income tax (expense) benefit 1,283   (4,188 ) 5,471   N.M.
Total other comprehensive income (loss) (4,079 ) 5,306   (9,385 ) N.M.
Comprehensive income $ 48,413   $ 29,294   $ 19,119   65.3
 
 
Year Ended December 31,Change
20152014$%
Net income attributable to TCF Financial Corporation $ 197,123   $ 174,187   $ 22,936   13.2 %
Other comprehensive income (loss):
Securities available for sale:
Unrealized gains (losses) arising during the period (2,523 ) 29,071 (31,594 ) N.M.
Reclassification of net (gains) losses to net income 1,159 (76 ) 1,235 N.M.
Net investment hedges:
Unrealized gains (losses) arising during the period 7,613 3,126 4,487 143.5
Foreign currency translation adjustment:
Unrealized gains (losses) arising during the period (8,304 ) (3,704 ) (4,600 ) (124.2 )
Recognized postretirement prior service cost:
Reclassification of net (gains) losses to net income (46 ) (47 ) 1 2.1
Income tax (expense) benefit (2,335 ) (12,067 ) 9,732   80.6
Total other comprehensive income (loss) (4,436 ) 16,303   (20,739 ) N.M.
Comprehensive income $ 192,687   $ 190,490   $ 2,197   1.2
 
N.M. Not Meaningful.
 
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except per-share data)
(Unaudited)
             
At Dec. 31,Change
20152014$%
ASSETS:
Cash and due from banks $ 889,337 $ 1,115,250 $ (225,913 ) (20.3 )%
Investments 70,537 85,492 (14,955 ) (17.5 )
Securities held to maturity 201,920 214,454 (12,534 ) (5.8 )
Securities available for sale 888,885 463,294 425,591 91.9
Loans and leases held for sale 157,625 132,266 25,359 19.2
Loans and leases:
Consumer real estate:
First mortgage lien 2,624,956 3,139,152 (514,196 ) (16.4 )
Junior lien 2,839,316   2,543,212   296,104   11.6
Total consumer real estate 5,464,272 5,682,364 (218,092 ) (3.8 )
Commercial 3,145,832 3,157,665 (11,833 ) (0.4 )
Leasing and equipment finance 4,012,248 3,745,322 266,926 7.1
Inventory finance 2,146,754 1,877,090 269,664 14.4
Auto finance 2,647,596 1,915,061 732,535 38.3
Other 19,297   24,144   (4,847 ) (20.1 )
Total loans and leases 17,435,999 16,401,646 1,034,353 6.3
Allowance for loan and lease losses (156,054 ) (164,169 ) 8,115   4.9
Net loans and leases 17,279,945 16,237,477 1,042,468 6.4
Premises and equipment, net 445,934 436,361 9,573 2.2
Goodwill 225,640 225,640
Other assets 531,881   484,377   47,504   9.8
Total assets $ 20,691,704   $ 19,394,611   $ 1,297,093   6.7
 
LIABILITIES AND EQUITY:
Deposits:
Checking $ 5,690,559 $ 5,195,243 $ 495,316 9.5
Savings 4,717,457 5,212,320 (494,863 ) (9.5 )
Money market 2,408,180 1,993,130 415,050 20.8
Certificates of deposit 3,903,793   3,049,189   854,604   28.0
Total deposits 16,719,989   15,449,882   1,270,107   8.2
Short-term borrowings 5,381 4,425 956 21.6
Long-term borrowings 1,036,652   1,232,065   (195,413 ) (15.9 )
Total borrowings 1,042,033 1,236,490 (194,457 ) (15.7 )
Accrued expenses and other liabilities 622,765   572,875   49,890   8.7
Total liabilities 18,384,787   17,259,247   1,125,540   6.5
Equity:

Preferred stock, par value $0.01 per share, 30,000,000 shares authorized; 4,006,900 shares issued

263,240 263,240

Common stock, par value $0.01 per share, 280,000,000 shares authorized; 169,887,030 and 167,503,568 shares issued, respectively

1,699 1,675 24 1.4
Additional paid-in capital 851,836 817,130 34,706 4.2
Retained earnings, subject to certain restrictions 1,240,347 1,099,914 140,433 12.8
Accumulated other comprehensive income (loss) (15,346 ) (10,910 ) (4,436 ) (40.7 )
Treasury stock at cost, 42,566 shares, and other (50,860 ) (49,400 ) (1,460 ) (3.0 )
Total TCF Financial Corporation stockholders' equity 2,290,916 2,121,649 169,267 8.0
Non-controlling interest in subsidiaries 16,001   13,715   2,286   16.7
Total equity 2,306,917   2,135,364   171,553   8.0
Total liabilities and equity $ 20,691,704   $ 19,394,611   $ 1,297,093   6.7
 
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
SUMMARY OF CREDIT QUALITY DATA
(Dollars in thousands)
(Unaudited)
 

Over 60-Day Delinquencies as a Percentage of Portfolio(1)

                   

 

At

At

At

At

At

Change from

 

Dec. 31,Sep. 30,Jun. 30,Mar. 31,Dec. 31,Sep. 30,Dec. 31,
2015201520152015201420152014
Consumer real estate:
First mortgage lien 0.46 % 0.36 % 0.38 % 0.53 % 0.49 % 10 bps (3 ) bps
Junior lien 0.05 0.08 0.08 0.11 0.08 (3 ) (3 )
Total consumer real estate 0.23 0.21 0.22 0.32 0.30 2 (7 )
Commercial 0.25 (25 )
Leasing and equipment finance 0.06 0.19 0.06 0.09 0.07 (13 ) (1 )
Inventory finance 0.01 0.01 1
Auto finance 0.14 0.11 0.11 0.16 0.22 3 (8 )
Other 0.13 0.17 0.11 0.02 (4 ) 13
Subtotal 0.11 0.17 0.10 0.14 0.14 (6 ) (3 )
Acquired portfolios 0.41 0.37 0.28 0.21 0.03 4 38
Total delinquencies 0.11 0.17 0.10 0.14 0.14 (6 ) (3 )
 
(1) Excludes non-accrual loans and leases.
 
 

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

         
Quarter Ended(1)Change from
Dec. 31,   Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31,Sep. 30,   Dec. 31,
2015201520152015201420152014
Consumer real estate:
First mortgage lien 0.54 % 0.53 % 0.79 % 0.62 % 0.80 % 1 bps (26 ) bps
Junior lien 0.17 0.11 0.59 0.38 0.46 6 (29 )

Total consumer real estate

0.34 0.32 0.69 0.51 0.66 2 (32 )
Commercial 0.05 0.21 (0.07 ) 0.12

5

 

 

(7 )
Leasing and equipment finance 0.16 0.09 0.16 0.10 0.08 7 8
Inventory finance 0.05 0.03 0.11 0.08 0.12 2 (7 )
Auto finance 0.75 0.62 0.66 0.66 0.83 13 (8 )
Other

N.M.

N.M. N.M. N.M.

N.M.

N.M. N.M.
Total 0.29 0.23 0.41 0.28 0.40 6 (11 )
 
N.M. Not Meaningful.
(1) Annualized.
 
 

Non-Accrual Loans and Leases Rollforward

                           
Quarter EndedChange from
Dec. 31,Sep. 30,Jun. 30,Mar. 31,Dec. 31,Sep. 30,Dec. 31,
2015201520152015201420152014
Balance, beginning of period $ 206,110 $ 205,710 $ 222,143 $ 216,734 $ 275,111 $ 400 $ (69,001 )
Additions 44,387 48,505 40,846 51,647 44,626 (4,118 ) (239 )
Charge-offs (9,002 ) (7,055 ) (14,050 ) (8,921 ) (14,456 ) (1,947 ) 5,454
Transfers to other assets (13,612 ) (16,400 ) (17,738 ) (16,781 ) (18,471 ) 2,788 4,859
Return to accrual status (9,282 ) (10,190 ) (10,298 ) (7,668 ) (8,280 ) 908 (1,002 )
Payments received (20,103 ) (14,721 ) (15,543 ) (10,974 ) (21,859 ) (5,382 ) 1,756
Sales (775 ) (705 ) (353 ) (2,250 ) (40,354 ) (70 ) 39,579
Other, net 2,743   966   703   356   417   1,777   2,326  
Balance, end of period $ 200,466   $ 206,110   $ 205,710   $ 222,143   $ 216,734   $ (5,644 ) $ (16,268 )
 
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
SUMMARY OF CREDIT QUALITY DATA, CONTINUED
(Dollars in thousands)
(Unaudited)
 

Other Real Estate Owned Rollforward

                           
Quarter EndedChange from
Dec. 31,Sep. 30,Jun. 30,Mar. 31,Dec. 31,Sep. 30,Dec. 31,
2015201520152015201420152014
Balance, beginning of period $ 58,584 $ 58,007 $ 62,398 $ 65,650 $ 67,614 $ 577 $ (9,030 )
Transferred in 12,626 15,087 15,359 15,513 18,220 (2,461 ) (5,594 )
Sales (19,174 ) (13,442 ) (17,164 ) (15,399 ) (13,766 ) (5,732 ) (5,408 )
Writedowns (2,130 ) (2,868 ) (4,003 ) (3,424 ) (5,753 ) 738 3,623
Other, net 76   1,800   1,417   58   (665 ) (1,724 ) 741  
Balance, end of period $ 49,982   $ 58,584   $ 58,007   $ 62,398   $ 65,650   $ (8,602 ) $ (15,668 )
 
 

Allowance for Loan and Lease Losses

                         
At December 31,At September 30,At December 31,
201520152014Change from
% of% of% ofSep. 30,Dec. 31,
BalancePortfolioBalancePortfolioBalancePortfolio20152014
Consumer real estate $ 67,992 1.24 % $ 70,329 1.25 % $ 85,361 1.50 % (1 ) bps (26 ) bps
Commercial 30,185 0.96 30,006 0.96 31,367 0.99 (3 )
Leasing and equipment finance 19,018 0.47 18,177 0.47 18,446 0.49 (2 )
Inventory finance 11,128 0.52 11,121 0.52 10,020 0.53 (1 )
Auto finance 26,486 1.00 23,722 0.98 18,230 0.95 2 5
Other 1,245   6.45 607   2.94 745   3.09 351 336
Total $ 156,054   0.90 $ 153,962   0.90 $ 164,169   1.00 (10 )
 
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Dollars in thousands)
(Unaudited)
                 
Three Months Ended December 31,
20152014
AverageYields andAverageYields and
BalanceInterest(1)Rates(1)(2)BalanceInterest(1)Rates(1)(2)
ASSETS:
Investments and other $ 405,252 $ 2,644 2.59 % $ 611,286 $ 3,551 2.31 %
Securities held to maturity 201,944 1,336 2.64 215,039 1,429 2.66
Securities available for sale(3)
Taxable 611,816 3,691 2.41 465,676 3,053 2.62
Tax-exempt(4) 221,113 1,804 3.26
Loans and leases held for sale 180,278 4,261 9.38 297,474 6,268 8.36
Loans and leases:(5)
Consumer real estate:
Fixed-rate 2,520,567 36,384 5.73 3,257,428 46,848 5.71
Variable-rate 3,083,957   40,294   5.18 2,801,728   36,302   5.14
Total consumer real estate 5,604,524 76,678 5.43 6,059,156 83,150 5.45
Commercial:
Fixed-rate 1,090,001 13,869 5.05 1,362,306 16,883 4.92
Variable- and adjustable-rate 2,027,982   20,705   4.05 1,781,308   17,334   3.86
Total commercial 3,117,983 34,574 4.40 3,143,614 34,217 4.32
Leasing and equipment finance 3,911,025 44,479 4.55 3,611,557 42,789 4.74
Inventory finance 2,180,534 31,128 5.66 1,891,504 26,515 5.56
Auto finance 2,514,923 26,422 4.17 1,817,024 19,437 4.24
Other 9,060   157   6.88 11,396   228   7.93
Total loans and leases 17,338,049   213,438   4.89 16,534,251   206,336   4.96
Total interest-earning assets 18,958,452 227,174 4.76 18,123,726 220,637 4.84
Other assets(6) 1,247,875   1,132,112  
Total assets $ 20,206,327   $ 19,255,838  
LIABILITIES AND EQUITY:
Non-interest bearing deposits:
Retail $ 1,639,550 $ 1,528,579
Small business 874,892 842,004
Commercial and custodial 525,692   455,086  
Total non-interest bearing deposits 3,040,134 2,825,669
Interest-bearing deposits:
Checking 2,384,452 124 0.02 2,301,035 163 0.03
Savings 4,721,571 466 0.04 5,272,196 1,320 0.10
Money market 2,349,127 3,649 0.62 1,869,350 3,071 0.65
Certificates of deposit 3,793,653   9,533   1.00 3,041,722   6,206   0.81
Total interest-bearing deposits 13,248,803   13,772   0.41 12,484,303   10,760   0.34
Total deposits 16,288,937   13,772   0.34 15,309,972   10,760   0.28
Borrowings:
Short-term borrowings 28,364 6 0.09 9,383 13 0.56
Long-term borrowings 1,011,715   6,004   2.37 1,326,591   4,961   1.49
Total borrowings 1,040,079   6,010   2.31 1,335,974   4,974   1.49
Total interest-bearing liabilities 14,288,882   19,782   0.55 13,820,277   15,734   0.45
Total deposits and borrowings 17,329,016 19,782 0.45 16,645,946 15,734 0.38
Other liabilities 595,317   485,655  
Total liabilities 17,924,333   17,131,601  
Total TCF Financial Corp. stockholders' equity 2,263,018 2,109,402
Non-controlling interest in subsidiaries 18,976   14,835  
Total equity 2,281,994   2,124,237  
Total liabilities and equity $ 20,206,327   $ 19,255,838  
Net interest income and margin $ 207,392   4.35 $ 204,903   4.49
 

(1)

 

Interest and yields are presented on a fully tax-equivalent basis.

(2)

Annualized.

(3)

Average balances and yields of securities available for sale are based upon historical amortized cost and exclude equity securities.

(4)

The yield on tax-exempt securities available for sale is computed on a tax-equivalent basis using a statutory federal income tax rate of 35% for all periods presented.

(5)

Average balances of loans and leases include non-accrual loans and leases and are presented net of unearned income.

(6)

Includes operating leases.

 
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Dollars in thousands)
(Unaudited)
                 
Year Ended December 31,
20152014
AverageYields andAverageYields and
BalanceInterest(1)Rates(1)(2)BalanceInterest(1)Rates(1)(2)
ASSETS:
Investments and other $ 520,577 $ 12,294 2.36 % $ 586,803 $ 15,390 2.62 %
Securities held to maturity 207,140 5,486 2.65 197,943 5,281 2.67
Securities available for sale(3)
Taxable 564,205 13,930 2.47 447,016 11,994 2.68
Tax-exempt(4) 80,894 2,643 3.27
Loans and leases held for sale 286,295 25,766 9.00 259,186 21,128 8.15
Loans and leases:(5)
Consumer real estate:
Fixed-rate 2,710,512 157,428 5.81 3,359,670 190,973 5.68
Variable-rate 2,911,689   149,770   5.14 2,788,882   143,431   5.14
Total consumer real estate 5,622,201 307,198 5.46 6,148,552 334,404 5.44
Commercial:
Fixed-rate 1,173,039 59,037 5.03 1,469,579 73,752 5.02
Variable- and adjustable-rate 1,961,389   76,677   3.91 1,665,788   66,450   3.99
Total commercial 3,134,428 135,714 4.33 3,135,367 140,202 4.47
Leasing and equipment finance 3,804,015 175,565 4.62 3,531,256 166,974 4.73
Inventory finance 2,154,357 122,799 5.70 1,888,080 112,603 5.96
Auto finance 2,278,617 94,463 4.15 1,567,904 68,595 4.37
Other 10,303   712   6.91 12,071   931   7.71
Total loans and leases 17,003,921   836,451   4.92 16,283,230   823,709   5.06
Total interest-earning assets 18,663,032 896,570 4.80 17,774,178 877,502 4.94
Other assets(6) 1,228,651   1,124,226  
Total assets $ 19,891,683   $ 18,898,404  
LIABILITIES AND EQUITY:
Non-interest bearing deposits:
Retail $ 1,658,951 $ 1,546,453
Small business 838,758 806,649
Commercial and custodial 507,446   413,893  
Total non-interest bearing deposits 3,005,155 2,766,995
Interest-bearing deposits:
Checking 2,396,334 547 0.02 2,328,402 921 0.04
Savings 4,938,303 3,005 0.06 5,693,751 8,343 0.15
Money market 2,265,121 14,237 0.63 1,312,483 7,032 0.54
Certificates of deposit 3,340,341   30,437   0.91 2,840,922   22,089   0.78
Total interest-bearing deposits 12,940,099   48,226   0.37 12,175,558   38,385   0.32
Total deposits 15,945,254   48,226   0.30 14,942,553   38,385   0.26
Borrowings:
Short-term borrowings 18,822 53 0.28 83,673 261 0.31
Long-term borrowings 1,121,181   23,263   2.07 1,311,176   19,954   1.52
Total borrowings 1,140,003   23,316   2.05 1,394,849   20,215   1.45
Total interest-bearing liabilities 14,080,102   71,542   0.51 13,570,407   58,600   0.43
Total deposits and borrowings 17,085,257 71,542 0.42 16,337,402 58,600 0.36
Other liabilities 589,222   502,560  
Total liabilities 17,674,479   16,839,962  
Total TCF Financial Corp. stockholders' equity 2,197,690 2,041,428
Non-controlling interest in subsidiaries 19,514   17,014  
Total equity 2,217,204   2,058,442  
Total liabilities and equity $ 19,891,683   $ 18,898,404  
Net interest income and margin $ 825,028   4.42 $ 818,902   4.61
 

(1)

 

Interest and yields are presented on a fully tax-equivalent basis.

(2)

Annualized.

(3)

Average balances and yields of securities available for sale are based upon historical amortized cost and exclude equity securities.

(4)

The yield on tax-exempt securities available for sale is computed on a tax-equivalent basis using a statutory federal income tax rate of 35% for all periods presented.

(5)

Average balances of loans and leases include non-accrual loans and leases and are presented net of unearned income.

(6)

Includes operating leases.

 
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per-share data)
(Unaudited)
             
Three Months Ended
Dec. 31,Sep. 30,Jun. 30,Mar. 31,Dec. 31,
20152015201520152014
Interest income:
Loans and leases $ 212,346 $ 207,250 $ 207,164 $ 205,976 $ 205,507
Securities available for sale 4,864 4,161 3,543 3,080 3,053
Securities held to maturity 1,336 1,361 1,384 1,405 1,429
Investments and other 6,905   10,832   10,990   9,333   9,819  
Total interest income 225,451   223,604   223,081   219,794   219,808  
Interest expense:
Deposits 13,772 12,302 11,080 11,072 10,760
Borrowings 6,010   6,032   5,972   5,302   4,974  
Total interest expense 19,782   18,334   17,052   16,374   15,734  
Net interest income 205,669 205,270 206,029 203,420 204,074
Provision for credit losses 17,607   10,018   12,528   12,791   55,597  
Net interest income after provision for credit losses 188,062   195,252   193,501   190,629   148,477  
Non-interest income:
Fees and service charges 37,741 36,991 36,295 33,972 39,477
Card revenue 13,781 13,803 13,902 12,901 12,830
ATM revenue 5,143   5,739   5,540   5,122   5,249  
Subtotal 56,665 56,533 55,737 51,995 57,556
Gains on sales of auto loans, net 3,136 10,423 10,756 6,265 12,962
Gains on sales of consumer real estate loans, net 13,104 7,143 11,954 8,763 6,175
Servicing fee income 8,622     8,049     7,216     7,342     6,365  
Subtotal 24,862 25,615 29,926 22,370 25,502
Leasing and equipment finance 32,355 27,165 26,385 22,224 24,367
Other 1,806   3,070   1,460   4,127   2,363  
Fees and other revenue 115,688 112,383 113,508 100,716 109,788
Gains (losses) on securities, net (29 ) (131 ) (59 ) (78 ) (20 )
Total non-interest income 115,659   112,252   113,449   100,638   109,768  
Non-interest expense:
Compensation and employee benefits 109,061 116,708 116,159 115,815 115,796
Occupancy and equipment 37,824 34,159 36,152 36,827 35,747
FDIC insurance 5,173 4,832 4,864 5,393 2,643
Advertising and marketing 5,316 5,793 5,150 6,523 5,146
Other 46,441   45,750   45,887   48,133   48,063  
Subtotal 203,815 207,242 208,212 212,691 207,395
Operating lease depreciation 13,608 9,485 8,582 7,734 6,878
Foreclosed real estate and repossessed assets, net 4,940 5,680 6,377 6,196 7,441
Other credit costs, net 224   (123 ) (62 ) 146   44  
Total non-interest expense 222,587   222,284   223,109   226,767   221,758  
Income before income tax expense 81,134 85,220 83,841 64,500 36,487
Income tax expense 26,614   30,528   28,902   22,828   11,011  
Income after income tax expense 54,520 54,692 54,939 41,672 25,476
Income attributable to non-controlling interest 2,028   2,117   2,684