TCF Reports 2006 Annual Earnings and EPS ($1.90)
WAYZATA, Minn.--(BUSINESS WIRE)--
TCF Financial Corporation ("TCF") (NYSE:TCB):
2006 YEAR END HIGHLIGHTS
-- Diluted earnings per share of $1.90
-- Net income of $244.9 million
-- Return on average assets of 1.74 percent
-- Return on average common equity of 24.37 percent
-- Board declares quarterly dividend increase of 5.4 percent to
24.25 cents per share
-- Average Power Assets(R) increased by $1.3 billion, or 14
percent
-- Average Power Liabilities(R) increased by $929 million, or 11
percent
-- Increased deposit accounts by 130,417, or 6 percent, to
2,426,616
-- Opened 19 new branches
EARNINGS
SUMMARY
($ in thousands, except per-share data)
Three Months Year
Ended December 31, Ended December 31,
-------------------------- --------------------------
2006 2005 Change 2006 2005 Change
-------- -------- ------ --------- --------- ------
Net income $53,733 $65,540 (18.0)% $244,943 $265,132 (7.6)%
Diluted
earnings per
common share .42 .50 (16.0) 1.90 2.00 (5.0)
Financial
Ratios (1)
--------------
Return on
average
assets 1.49 % 2.01 % 1.74 % 2.08 %
Return on
average
common equity 20.68 27.09 24.37 28.03
Net interest
margin 4.07 4.31 4.16 4.46
Net charge-
offs as a
percentage of
average loans
and leases .24 .16 .17 .29
----------------------------------------------------------------------
(1)
Annualized.
TCF Financial Corporation ("TCF") (NYSE:TCB) today reported diluted earnings per share of $1.90 for 2006, down 5 percent from $2.00 in 2005. Net income for 2006 was $244.9 million, compared with $265.1 million for 2005. Net income for 2006 included $5.8 million in pre-tax gains on sales of buildings and mortgage servicing rights and a $6.1 million reduction of income tax expense for a combined after-tax impact of eight cents per diluted share. 2005 net income included $24.3 million in pre-tax gains on sales of buildings and mortgage-backed securities, a $3.3 million commercial loan recovery and a $14 million reduction in income tax expense for a combined after-tax impact of 25 cents per diluted share.
Diluted earnings per share was 42 cents for the 2006 fourth quarter, compared with 50 cents for the same 2005 period, a decline of 16 percent. The fourth quarter of 2006 net income included an $851 thousand, or one cent per diluted share, reduction in income tax expense. Net income for the fourth quarter of 2005 included $3.5 million in pre-tax gains on sales of buildings and branches and an $8.8 million reduction in income tax expense for a combined after-tax impact of nine cents per diluted share.
Dividend Increase
TCF's Board of Directors has announced, for the sixteenth consecutive year, an increase in the regular quarterly dividend to 24.25 cents per common share, effective for the first quarter of 2007. This represents a 5.4 percent increase over the 2006 quarterly dividend of 23 cents per common share. The dividend is payable on February 28, 2007 to common stockholders of record at the close of business on February 2, 2007. TCF's 10-year compounded dividend growth rate is the 5th highest among the 50 largest banks in the country.
Chief Executive Officer's Statement
"TCF recorded its second best year in earnings per share despite an interest rate environment that was not favorable," said Lynn A. Nagorske, Chief Executive Officer. "In 2006, TCF continued to experience strong Power Asset growth and good growth of lower interest cost retail and small business deposits," said Nagorske.
Three Months
($ in thousands) Ended December 31, Change
-------------------- ---------------
2006 2005 $ %
--------- --------- ------- ------
Net interest income $135,887 $129,282 $6,605 5.1
--------- --------- -------
Fees and other revenue:
Fees and service charges 66,735 67,628 (893) (1.3)
Card revenue 23,485 21,419 2,066 9.6
ATM revenue 9,019 9,557 (538) (5.6)
Investments and insurance 2,087 2,339 (252) (10.8)
--------- --------- -------
Total banking fees and 101,326 100,943 383 .4
other revenue
Leasing and equipment finance 15,165 15,405 (240) (1.6)
Other 2,340 8,590 (6,250) (72.8)
--------- --------- -------
Total fees and other revenue 118,831 124,938 (6,107) (4.9)
--------- --------- -------
Gains on sales of securities - - - -
--------- --------- -------
Total non-interest income 118,831 124,938 (6,107) (4.9)
--------- --------- -------
Total revenue $254,718 $254,220 $498 .2
========= ========= =======
Net interest margin (1) 4.07 % 4.31 %
Fees and other revenue as a % of:
Total revenue 46.65 49.15
Average assets (1) 3.29 3.82
Year Ended
($ in thousands) December 31, Change
---------------------- ----------------
2006 2005 $ %
----------- --------- -------- -------
Net interest income $537,530 $517,690 $19,840 3.8
----------- --------- --------
Fees and other revenue:
Fees and service charges 270,166 262,636 7,530 2.9
Card revenue 92,084 79,803 12,281 15.4
ATM revenue 37,760 40,730 (2,970) (7.3)
Investments and insurance 10,695 10,665 30 .3
----------- --------- --------
Total banking fees and 410,705 393,834 16,871 4.3
other revenue
Leasing and equipment
finance 53,004 47,387 5,617 11.9
Other 25,755 26,350 (595) (2.3)
----------- --------- --------
Total fees and other
revenue 489,464 467,571 21,893 4.7
----------- --------- --------
Gains on sales of
securities - 10,671 (10,671) (100.0)
----------- --------- --------
Total non-interest income 489,464 478,242 11,222 2.3
----------- --------- --------
Total revenue $1,026,994 $995,932 $31,062 3.1
=========== ========= ========
Net interest margin (1) 4.16 % 4.46 %
Fees and other revenue as a %
of:
Total revenue 47.66 46.95
Average assets (1) 3.48 3.67
----------------------------------------------------------------------
(1) Annualized.
Net Interest Income
TCF's net interest income in 2006 was $537.5 million, up $19.8 million, or 3.8 percent, from 2005. Net interest margin in 2006 was 4.16 percent, compared with 4.46 percent for 2005. The increase in net interest income in 2006 was primarily attributable to an increase of $1.3 billion, or 11.2 percent, in average interest-earning assets, partially offset by the 30 basis point decline in net interest margin.
TCF's net interest income in the fourth quarter of 2006 was $135.9 million, up $6.6 million, or 5.1 percent, from the fourth quarter of 2005. Net interest margin in the fourth quarter of 2006 was 4.07 percent, compared with 4.31 percent last year and 4.11 percent in the third quarter of 2006. The decreases in net interest margin from 2005 and the third quarter of 2006 were primarily due to the continued customer preference for lower-yielding fixed-rate loans and higher-cost market-rate deposits, largely due to the flat or inverted yield curve which persisted throughout 2006, and the growth of higher interest-cost borrowings.
In December 2006, TCF lengthened the maturities of $500 million of borrowings at a weighted average fixed rate of 4.29 percent. In January 2007, TCF lengthened the maturities of an additional $300 million of borrowings at a weighted average fixed rate of 4.48 percent. These actions on long-term borrowings will reduce TCF's interest expense as they replace short-term borrowings with current interest rates of approximately one percent higher than the average rate on the new long-term borrowings.
Non-interest Income
Total non-interest income was $489.5 million for 2006, up $11.2 million, or 2.3 percent, from 2005. Fees and service charges were $270.2 million for 2006, up $7.5 million, or 2.9 percent, from 2005, primarily due to the growth in deposit accounts. Card revenues totaled $92.1 million for 2006, up $12.3 million, or 15.4 percent, from 2005 primarily due to an increase in active accounts and customer transaction volumes. ATM revenue was $37.8 million, down $3 million from 2005. The decline in ATM revenue was primarily attributable to continued declines in fees charged to TCF customers for use of non-TCF ATM machines due to expansion of TCF's ATM network and growth in TCF's fee free checking products, partially offset by the increased number of TCF customers. Leasing and equipment finance revenues were $53 million for 2006, up $5.6 million, or 11.9 percent, from 2005, primarily due to an $8.5 million increase in operating lease revenues, partially offset by a $3.7 million decrease in sales-type revenue. Sales-type revenues may fluctuate from period to period based on customer driven factors not within the control of TCF. During 2005, TCF sold $1 billion of mortgage-backed securities and realized gains of $10.7 million, and had no such sales or gains in 2006. At December 31, 2006, the unrealized pre-tax loss on TCF's securities available for sale portfolio was $33.3 million.
Total non-interest income in the fourth quarter of 2006 was $118.8 million, down $6.1 million, or 4.9 percent, from the fourth quarter of 2005. Fees and service charges were $66.7 million, down 1.3 percent from the fourth quarter of 2005 primarily due to lower consumer spending and lower overdraft incident rates. Card revenues totaled $23.5 million for the fourth quarter of 2006, up 9.6 percent over the same period in 2005. Other revenues were $2.3 million for the fourth quarter of 2006, down $6.3 million from the same period of 2005. This decrease was primarily due to a $3.1 million decrease in mortgage banking revenue relating to the exit from this business in the first quarter of 2006 and a $3.5 million decrease in gains on sales of buildings and branches.
Branches
TCF opened 19 new branches during 2006, including ten traditional branches, five supermarket branches, and four campus branches. TCF has now opened 148 new branches since January 2001, representing nearly one-third of TCF's 453 total branches. During the fourth quarter of 2006, TCF opened seven new branches consisting of six traditional branches, including its first branch in Arizona, and one campus branch. TCF closed 13 supermarket branches in the fourth quarter of 2006 primarily as a result of the sale of the supermarket stores.
TCF plans to open 20 new branches in 2007; consisting of 11 traditional branches, including six branches carried over from 2006 due to construction and municipal delays; six supermarket branches and three campus branches. In order to improve the customer experience and enhance deposit and loan growth, TCF also plans to relocate nine branches, including seven traditional branches and two supermarket branches to improved locations and new facilities, and to remodel 15 existing supermarket branches in 2007. In connection with the traditional branch relocation activities, the sale of existing real estate will produce significant gains in 2007, which will more than offset the increased operating costs of the new branches.
In November 2006, TCF entered into a definitive agreement to sell ten outstate Michigan branches with approximately $235 million of deposits. TCF expects to record a pre-tax gain on the sale of these branches of approximately $29 million, or 15 cents per diluted share after-tax in 2007.
December 31, December 31, December 31,
(# of branches) 2006 2005 2000
------------ ------------ ------------
Total Branches
------------------------------
Minnesota 107 105 84
Illinois 195 202 167
Michigan 64 63 56
Colorado 44 42 12
Wisconsin 36 35 32
Indiana 6 6 1
Arizona 1 - -
------------ ------------ ------------
453 453 352
============ ============ ============
New Branches(a)
------------------------------
Traditional 78 68
Supermarket 63 58
Campus 7 3
------------ ------------
Total 148 129
============ ============
% of Total Branches 33 % 28 %
============ ============
----------------------------------------------------------------------
(a) New branches opened since January 1, 2001.
Additional information regarding the results of TCF's new branches opened since January 1, 2001 is summarized as follows:
At or For the Year Ended
December 31, Change
------------------------ ----------------
($ in thousands) 2006 2005 $ %
-------------- --------- --------- ------
Number of deposit accounts 389,236 287,474 101,762 35.4
Average deposits:
Checking $404,331 $298,706 $105,625 35.4
Savings 313,129 208,004 105,125 50.5
Money market 35,323 20,191 15,132 74.9
-------------- --------- ---------
Subtotal 752,783 526,901 225,882 42.9
Certificates of deposit 437,708 186,889 250,819 134.2
-------------- --------- ---------
Total deposits $ 1,190,491 $713,790 $476,701 66.8
============== ========= =========
Total fees and other revenue
(quarter ended) $18,447 $15,291 $3,156 20.6
============== ========= =========
Total fees and other revenue
(year ended) $71,587 $55,028 $16,559 30.1
============== ========= =========
Power Assets(R)
Average Power Assets grew $1.3 billion, or 14.1 percent, in 2006. TCF's average consumer loan balances increased $757.6 million, or 15.8 percent; average commercial loan balances increased $257.1 million, or 9.7 percent; and average leasing and equipment finance balances increased $236.5 million, or 16.6 percent, from 2005.
Average Balances for the
Year Ended December 31, Change
------------------------- -----------------
($ in thousands) 2006 2005 $ %
------------- ----------- ----------- -----
Loans and leases(a):
Consumer home equity and
other:
Home equity:
First mortgage lien $3,561,922 $3,139,232 $422,690 13.5
Junior lien 1,948,739 1,615,742 332,997 20.6
------------- ----------- -----------
Total consumer home
equity 5,510,661 4,754,974 755,687 15.9
Other 36,711 34,763 1,948 5.6
------------- ----------- -----------
Total consumer home
equity and other 5,547,372 4,789,737 757,635 15.8
Commercial real estate 2,387,402 2,212,839 174,563 7.9
Commercial business 508,250 425,704 82,546 19.4
------------- ----------- -----------
Total commercial loans 2,895,652 2,638,543 257,109 9.7
Leasing and equipment
finance 1,659,807 1,423,264 236,543 16.6
------------- ----------- -----------
Power Assets $ 10,102,831 $8,851,544 $1,251,287 14.1
============= =========== ===========
----------------------------------------------------------------------
(a) Excludes residential real estate loans, education loans held for
sale and operating leases.
Power Liabilities(R)
Average Power Liabilities totaled $9.4 billion for 2006, with an average interest rate of 2.08 percent, an increase of $928.6 million, or 11 percent, from 2005. The increase was primarily driven by increases in Premier Checking and Savings and certificates of deposit, partially offset by declines in other checking and savings deposits and a $69.8 million decline in non-interest bearing custodial deposits as a result of the sale of mortgage servicing rights. TCF increased the total number of deposit accounts by 130,417, or 5.7 percent, in 2006 to 2,426,616 accounts, as compared with an increase of 80,186, or 3.6 percent, in 2005.
Average Balances and
Rates for the
Year Ended December 31, Change
------------------------ -------------------
($ in thousands) 2006 2005 $ %
----------- ----------- ---------- ------
Non-interest bearing
deposits:
Retail $1,513,121 $1,548,027 $(34,906) (2.3)
Small business 609,907 585,860 24,047 4.1
Commercial and
custodial 232,725 311,497 (78,772) (25.3)
----------- ----------- ----------
Total non-interest
bearing deposits 2,355,753 2,445,384 (89,631) (3.7)
Interest-bearing
deposits:
Premier checking 1,001,024 641,672 359,352 56.0
Other checking 864,316 1,026,017 (161,701) (15.8)
----------- ----------- ----------
Subtotal 1,865,340 1,667,689 197,651 11.9
Premier savings 899,067 427,070 471,997 110.5
Other savings 1,376,182 1,558,423 (182,241) (11.7)
----------- ----------- ----------
Subtotal 2,275,249 1,985,493 289,756 14.6
Money market 620,844 640,576 (19,732) (3.1)
----------- ----------- ----------
Subtotal 4,761,433 4,293,758 467,675 10.9
Certificates of
deposit 2,291,002 1,740,440 550,562 31.6
----------- ----------- ----------
Total interest-
bearing deposits 7,052,435 6,034,198 1,018,237 16.9
----------- ----------- ----------
Power Liabilities $9,408,188 $8,479,582 $928,606 11.0
=========== =========== ==========
Average rate on deposits 2.08 % 1.15 % 93 bps N/A
Total number of deposit
accounts 2,426,616 2,296,199 130,417 5.7
----------------------------------------------------------------------
N/A Not Applicable.
Non-interest Expense
Non-interest expense totaled $649.2 million for 2006, an increase of $42.3 million, or 7 percent, from 2005. Compensation and employee benefits increased $15.3 million, or 4.7 percent, from 2005, primarily due to an $8.2 million increase from new branch expansion, an $8.2 million increase in other salaries and employee benefits, partially offset by lower performance-based incentive compensation. Occupancy and equipment expenses increased $10.7 million, or 10.3 percent, from 2005, primarily due to $5.3 million associated with new branch expansion. Operating lease depreciation increased $7 million from 2005, primarily driven by a $39.7 million increase in average operating lease balances. Other expenses totaled $151.4 million for 2006, up $8 million from 2005, primarily driven by a $2.3 million increase in card and internet processing expenses related to transaction increases and a $1.4 million increase in foreclosed real estate expense primarily due to net losses on sales in 2006 versus net gains in 2005.
Non-interest expense totaled $165.6 million for the 2006 fourth quarter, up $8.9 million, or 5.7 percent, from the fourth quarter of 2005. Compensation and employee benefits increased $3.1 million, or 3.8 percent, from the fourth quarter of 2005, primarily due to new branch expansion totaling $1.8 million. Occupancy and equipment expenses increased $2.1 million, or 7.5 percent, from the fourth quarter of 2005, primarily due to $1.1 million associated with new branch expansion. Operating lease depreciation increased $1.8 million from the fourth quarter of 2005, primarily driven by a $36.1 million increase in average operating lease balances. Other expenses increased $1.8 million, or 4.6 percent, from the fourth quarter of 2005, primarily driven by new branch expansion totaling $1.3 million and a $671 thousand increase in net real estate expense primarily due to the sale of real estate owned.
During the fourth quarter of 2006, TCF incurred approximately $1 million of severance and other exit costs related to the closure and consolidation of 13 branches, and other staff reductions. "These actions will improve TCF's efficiency in 2007," said Nagorske.
Three Months Ended
December 31, Change
------------------- -------------
($ in thousands) 2006 2005 $ %
--------- --------- ------- -----
Compensation and employee benefits $85,811 $82,700 $3,111 3.8
Occupancy and equipment 29,905 27,819 2,086 7.5
Advertising and promotions 6,235 6,088 147 2.4
Operating lease depreciation 4,000 2,164 1,836 84.8
Other 39,610 37,858 1,752 4.6
--------- --------- -------
Total non-interest expense $165,561 $156,629 $8,932 5.7
========= ========= =======
Year Ended
December 31, Change
------------------- --------------
($ in thousands) 2006 2005 $ %
--------- --------- -------- -----
Compensation and employee benefits $341,857 $326,526 $15,331 4.7
Occupancy and equipment 114,618 103,900 10,718 10.3
Advertising and promotions 26,926 25,691 1,235 4.8
Operating lease depreciation 14,347 7,335 7,012 95.6
Other 151,449 143,483 7,966 5.6
--------- --------- --------
Total non-interest expense $649,197 $606,935 $42,262 7.0
========= ========= ========
Credit Quality
At December 31, 2006, TCF's allowance for loan and lease losses totaled $58.5 million, or .52 percent of loans and leases, compared with $55.8 million, or .55 percent, at December 31, 2005 and $55.1 million, or .49 percent, at September 30, 2006. The provision for credit losses for 2006 was $20.7 million, up from $8.6 million in 2005, primarily due to higher consumer net charge-offs, a $3.3 million recovery on one commercial business loan in 2005 and the $1.1 billion increase in total loans and leases. Net loan and lease charge-offs in 2006 were $18 million, or .17 percent of average loans and leases, down from $28.2 million, or .29 percent, in 2005. Excluding the charge-off of an $18.8 million investment in a leveraged lease, 2005 net charge-offs were $9.4 million, or .10 percent of average loans and leases.
The provision for credit losses was $10.1 million in the fourth quarter of 2006, up from $5.4 million in the fourth quarter of 2005, primarily due to higher consumer and leasing and equipment finance net charge-offs and provisions related to increases in commercial real estate non-accrual loans. Net loan and lease charge-offs during the fourth quarter of 2006 were $6.6 million, or .24 percent of average loans and leases, up from $4.1 million, or .16 percent in the same period of 2005.
At December 31, 2006, TCF's over-30-day delinquency rate was .63 percent, up from .43 percent at December 31, 2005 and .45 percent at September 30, 2006. Non-accrual loans and leases were $43.2 million, or .38 percent of net loans and leases, at December 31, 2006, compared with $29.6 million, or .29 percent, at December 31, 2005 and $27.3 million, or .25 percent at September 30, 2006. Non-accrual loans increased primarily due to several Michigan commercial real estate loans.
Total non-performing assets were $65.6 million, or .45 percent of total assets, at December 31, 2006, up from $47.4 million, or .35 percent, at December 31, 2005 and $55.1 million, or .39 percent at September 30, 2006. The increase in non-performing assets was primarily due to increases in commercial real estate non-accrual loans and residential real estate owned.
Three Months Ended Year Ended
December 31, December 31,
------------------ -----------------
($ in thousands) 2006 2005 2006 2005
--------- -------- -------- --------
Allowance for loan and lease
losses:
Balance at beginning of period $55,098 $54,531 $55,823 $75,393
Net (charge-offs) recoveries:
Consumer home equity (3,100) (1,784) (7,346) (4,892)
Consumer other (1,611) (2,062) (4,802) (3,970)
--------- -------- -------- --------
Total consumer (4,711) (3,846) (12,148) (8,862)
Commercial real estate 28 76 (189) 8
Commercial business (168) (157) (469) 2,173
Leasing and equipment finance (1,611) (167) (4,892) (21,384)
Residential real estate (166) (10) (271) (91)
--------- -------- -------- --------
Total net charge-offs (6,628) (4,104) (17,969) (28,156)
Provision for credit losses 10,073 5,396 20,689 8,586
--------- -------- -------- --------
Balance at end of period $58,543 $55,823 $58,543 $55,823
========= ======== ======== ========
Accounting for Deposit Account Overdrafts
During the fourth quarter of 2006, TCF changed its accounting policy for deposit account overdrafts to a more preferred method under generally accepted accounting principles. Previously, certain deposit account overdraft balances were presented net in deposits and net losses on uncollectible overdrafts were reported in deposit account losses in non-interest expense. TCF now reports all overdraft balances in either consumer or commercial loans. Net losses on uncollectible overdrafts are reported as net charge-offs in the allowance for loan and lease losses. In addition, the portion of the allowance for loan and lease losses related to uncollectible deposit fees was transferred to other liabilities. This accounting change had no impact on net income and all prior period amounts have been reclassified to conform to the new accounting policy.
Income Taxes
TCF's income tax expense was $112.2 million for 2006, or 31.41 percent of pre-tax income, compared with $115.3 million, or 30.30 percent, for 2005. The 2006 effective income tax rate increased over the 2005 rate primarily due to $6.1 million of reductions in income tax expense in 2006 for favorable developments involving uncertain tax positions, compared with $14 million of reductions in income tax expense in 2005. Favorable developments included the closing of certain previous years' tax returns, clarification of existing state tax legislation and favorable developments in income tax audits.
TCF's income tax expense was $25.4 million for the fourth quarter of 2006, or 32.05 percent of pre-tax income, compared with $26.7 million, or 28.91 percent, for the comparable 2005 period. The higher effective income tax rate for the fourth quarter of 2006 is primarily due to $851 thousand of reductions in income tax expense for favorable developments involving uncertain tax positions, compared with $8.8 million of reductions in income tax expense in the fourth quarter of 2005.
Capital
TCF repurchased 3.9 million shares of its common stock during 2006 at an average cost of $25.91 per share. TCF has 2.8 million shares remaining in its stock repurchase programs authorized by its Board of Directors.
During the fourth quarter of 2006, TCF adopted SFAS No. 158, Employer's Accounting for Defined Benefit Pension and Other Postretirement Plans. Total stockholders' equity at December 31, 2006 was reduced by $13.3 million from the adoption of this Statement.
In November 2006, TCF retired 52.5 million shares of treasury stock, which reduced additional paid-in capital and retained earnings by $126.7 million and $876.7 million, respectively with an equal offset in treasury stock.
($ in thousands, except per- At December 31, At December 31,
share data) 2006 2005
------------------- -------------------
Stockholders' equity $1,033,374 $998,472
Stockholders' equity to total
assets 7.04 % 7.46 %
Book value per common share $7.92 $7.46
Tier 1 risk-based capital $914,128 8.65 % $863,955 8.79 %
Total risk-based capital 1,173,073 11.10 1,049,615 10.68
Total risk-based capital
"well-capitalized"
requirement 1,056,694 10.00 982,821 10.00
Excess total risk-based
capital over "well-
capitalized" requirement 116,379 1.10 66,794 .68
Website Information
A live webcast of TCF's conference call to discuss 2006 earnings will be hosted at TCF's website, www.tcfbank.com, on January 24, 2007 at 10:00 a.m., CT. Additionally, the webcast is available for replay at TCF's website after the conference call. The website also includes free access to company news releases, TCF's annual report, quarterly reports, investor presentations and SEC filings.
TCF is a Wayzata, Minnesota-based national financial holding company with $14.7 billion in total assets. TCF has 453 banking offices in Minnesota, Illinois, Michigan, Colorado, Wisconsin, Indiana and Arizona. Other TCF affiliates provide leasing and equipment finance, and investments and insurance sales.
Forward-looking Information
This earnings release and other reports issued by the Company, including reports filed with the SEC, may contain "forward-looking" statements that deal with future results, plans or performance. In addition, TCF's management may make such statements orally to the media, or to securities analysts, investors or others. Forward-looking statements deal with matters that do not relate strictly to historical facts. TCF's future results may differ materially from historical performance and forward-looking statements about TCF's expected financial results or other plans and are subject to a number of risks and uncertainties. These include but are not limited to possible legislative changes and adverse economic, business and competitive developments such as shrinking interest margins; deposit outflows; an inability to increase the number of deposit accounts and the possibility that deposit account losses (fraudulent checks, etc.) may increase; reduced demand for financial services and loan and lease products; adverse developments affecting TCF's supermarket banking relationships or any of the supermarket chains in which TCF maintains supermarket branches; changes in accounting standards or interpretations of existing standards; monetary, fiscal or tax policies of the federal or state governments; adverse findings in tax audits or regulatory examinations; changes in credit and other risks posed by TCF's loan, lease and investment portfolios, including declines in commercial or residential real estate values; imposition of vicarious liability on TCF as lessor in its leasing operations; denial of insurance coverage for claims made by TCF; technological, computer-related or operational difficulties or loss or theft of information; adverse changes in securities markets; and results of litigation, including reductions in card revenues resulting from litigation brought by various merchants or merchant organizations against Visa; or other significant uncertainties. Investors should consult TCF's Annual Report on Form 10-K, and Forms 10-Q and 8-K for additional important information about the Company.
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per-share data)
(Unaudited)
Three Months Ended
December 31, Change
------------------- ----------------
2006 2005 $ %
--------- --------- --------- ------
Interest income:
Loans and leases $204,150 $171,436 $32,714 19.1
Securities available for sale 24,699 20,766 3,933 18.9
Education loans held for sale 3,019 3,342 (323) (9.7)
Investments 1,173 841 332 39.5
--------- --------- ---------
Total interest income 233,041 196,385 36,656 18.7
--------- --------- ---------
Interest expense:
Deposits 55,996 34,283 21,713 63.3
Borrowings 41,158 32,820 8,338 25.4
--------- --------- ---------
Total interest expense 97,154 67,103 30,051 44.8
--------- --------- ---------
Net interest income 135,887 129,282 6,605 5.1
Provision for credit losses 10,073 5,396 4,677 86.7
--------- --------- ---------
Net interest income after
provision for credit losses 125,814 123,886 1,928 1.6
--------- --------- ---------
Non-interest income:
Fees and service charges 66,735 67,628 (893) (1.3)
Card revenue 23,485 21,419 2,066 9.6
ATM revenue 9,019 9,557 (538) (5.6)
Investments and insurance
revenue 2,087 2,339 (252) (10.8)
--------- --------- ---------
Subtotal 101,326 100,943 383 .4
Leasing and equipment finance 15,165 15,405 (240) (1.6)
Other 2,340 8,590 (6,250) (72.8)
--------- --------- ---------
Fees and other revenue 118,831 124,938 (6,107) (4.9)
Gains on sales of securities
available for sale - - -
--------- --------- ---------
Total non-interest income 118,831 124,938 (6,107) (4.9)
--------- --------- ---------
Non-interest expense:
Compensation and employee
benefits 85,811 82,700 3,111 3.8
Occupancy and equipment 29,905 27,819 2,086 7.5
Advertising and promotions 6,235 6,088 147 2.4
Operating lease depreciation 4,000 2,164 1,836 84.8
Other 39,610 37,860 1,750 4.6
--------- --------- ---------
Total non-interest expense 165,561 156,631 8,930 5.7
--------- --------- ---------
Income before income tax
expense 79,084 92,193 (13,109) (14.2)
Income tax expense 25,351 26,653 (1,302) (4.9)
--------- --------- ---------
Net income $53,733 $65,540 $(11,807) (18.0)
========= ========= =========
Net income per common share:
Basic $.42 $.50 $(.08) (16.0)
========= ========= =========
Diluted $.42 $.50 $(.08) (16.0)
========= ========= =========
Dividends declared per common
share $.23 $.2125 $.0175 8.2
========= ========= =========
Average common and common
equivalent shares outstanding
(in thousands):
Basic 128,209 131,447 (3,238) (2.5)
========= ========= =========
Diluted 128,515 131,816 (3,301) (2.5)
========= ========= =========
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per-share data)
(Unaudited)
Year Ended
December 31, Change
-------------------- -----------------
2006 2005 $ %
---------- --------- --------- -------
Interest income:
Loans and leases $769,590 $636,172 $133,418 21.0
Securities available for sale 98,035 81,479 16,556 20.3
Education loans held for sale 15,009 10,921 4,088 37.4
Investments 3,504 3,450 54 1.6
---------- --------- ---------
Total interest income 886,138 732,022 154,116 21.1
---------- --------- ---------
Interest expense:
Deposits 195,324 97,406 97,918 100.5
Borrowings 153,284 116,926 36,358 31.1
---------- --------- ---------
Total interest expense 348,608 214,332 134,276 62.6
---------- --------- ---------
Net interest income 537,530 517,690 19,840 3.8
Provision for credit losses 20,689 8,586 12,103 141.0
---------- --------- ---------
Net interest income after
provision for credit losses 516,841 509,104 7,737 1.5
---------- --------- ---------
Non-interest income:
Fees and service charges 270,166 262,636 7,530 2.9
Card revenue 92,084 79,803 12,281 15.4
ATM revenue 37,760 40,730 (2,970) (7.3)
Investments and insurance
revenue 10,695 10,665 30 .3
---------- --------- ---------
Subtotal 410,705 393,834 16,871 4.3
Leasing and equipment finance 53,004 47,387 5,617 11.9
Other 25,755 26,350 (595) (2.3)
---------- --------- ---------
Fees and other revenue 489,464 467,571 21,893 4.7
Gains on sales of securities
available for sale - 10,671 (10,671) (100.0)
---------- --------- ---------
Total non-interest
income 489,464 478,242 11,222 2.3
---------- --------- ---------
Non-interest expense:
Compensation and employee
benefits 341,857 326,526 15,331 4.7
Occupancy and equipment 114,618 103,900 10,718 10.3
Advertising and promotions 26,926 25,691 1,235 4.8
Operating lease depreciation 14,347 7,335 7,012 95.6
Other 151,449 143,484 7,965 5.6
---------- --------- ---------
Total non-interest expense 649,197 606,936 42,261 7.0
---------- --------- ---------
Income before income tax
expense 357,108 380,410 (23,302) (6.1)
Income tax expense 112,165 115,278 (3,113) (2.7)
---------- --------- ---------
Net income $244,943 $265,132 $(20,189) (7.6)
========== ========= =========
Net income per common share:
Basic $1.90 $2.00 $(.10) (5.0)
========== ========= =========
Diluted $1.90 $2.00 $(.10) (5.0)
========== ========= =========
Dividends declared per common
share $.92 $.85 $.0700 8.2
========== ========= =========
Average common and common
equivalent shares outstanding
(in thousands):
Basic 129,010 132,379 (3,369) (2.5)
========== ========= =========
Diluted 129,225 132,742 (3,517) (2.6)
========== ========= =========
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except per-share data)
(Unaudited)
At At Change
December 31, December 31, -----------------
2006 2005 $ %
------------ ------------ ---------- ------
ASSETS
Cash and due from banks $348,980 $374,701 $(25,721) (6.9)
Investments 170,129 79,943 90,186 112.8
Securities available for
sale 1,816,126 1,648,615 167,511 10.2
Education loans held for
sale 144,574 229,820 (85,246) (37.1)
Loans and leases:
Consumer home equity and
other 5,945,077 5,206,275 738,802 14.2
Commercial real estate 2,390,653 2,297,500 93,153 4.1
Commercial business 551,995 435,203 116,792 26.8
Leasing and equipment
finance 1,818,165 1,503,794 314,371 20.9
------------ ------------
Subtotal 10,705,890 9,442,772 1,263,118 13.4
Residential real estate 627,790 770,441 (142,651) (18.5)
------------ ------------
Total loans and leases 11,333,680 10,213,213 1,120,467 11.0
Allowance for loan and
lease losses (58,543) (55,823) (2,720) (4.9)
------------ ------------
Net loans and leases 11,275,137 10,157,390 1,117,747 11.0
Premises and equipment 406,087 365,146 40,941 11.2
Goodwill 152,599 152,599 - -
Other assets 356,102 380,380 (24,278) (6.4)
------------ ------------
$14,669,734 $13,388,594 1,281,140 9.6
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Checking $4,348,256 $4,298,145 $50,111 1.2
Savings 2,351,580 2,238,562 113,018 5.0
Money market 585,779 677,028 (91,249) (13.5)
------------ ------------
Subtotal 7,285,615 7,213,735 71,880 1.0
Certificates of deposit 2,483,635 1,915,620 568,015 29.7
------------ ------------
Total deposits 9,769,250 9,129,355 639,895 7.0
------------ ------------
Short-term borrowings 214,112 472,126 (258,014) (54.6)
Long-term borrowings 3,374,428 2,511,010 863,418 34.4
------------ ------------
Total borrowings 3,588,540 2,983,136 605,404 20.3
Accrued expenses and other
liabilities 278,570 277,631 939 .3
------------ ------------
Total liabilities 13,636,360 12,390,122 1,246,238 10.1
------------ ------------
Stockholders' equity:
Common stock, par value
$.01 per share,
280,000,000 shares
authorized; 131,660,749
and 184,386,193 shares
issued 1,317 1,844 (527) (28.6)
Additional paid-in capital 343,744 476,884 (133,140) (27.9)
Retained earnings, subject
to certain restrictions 784,011 1,536,611 (752,600) (49.0)
Accumulated other
comprehensive loss (34,926) (21,215) (13,711) (64.6)
Treasury stock at cost,
1,242,413 and 50,609,970
shares, and other (60,772) (995,652) 934,880 93.9
------------ ------------
Total
stockholders'
equity 1,033,374 998,472 34,902 3.5
------------ ------------
$14,669,734 $13,388,594 1,281,140 9.6
============ ============
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CREDIT QUALITY DATA
(Dollars in thousands)
(Unaudited)
Allowance for loan and lease losses:
-------------------------------------
At or For the Year Ended December 31,
2006
-------------------------------------
Net Charge-
offs
Allowance (Recoveries)
as a % of --------------
Allowance Portfolio $ %
--------- ----------- -------- -----
Consumer home equity $12,615 .21 % $7,346 .13 %
Consumer other 2,211 3.54 4,802 N.M.
--------- --------
Total consumer $14,826 .25 $12,148 .22
Commercial real estate 22,662 .95 189 .01
Commercial business 7,503 1.36 469 .09
Leasing and equipment finance 12,990 .71 4,892 .29
Residential real estate 562 .09 271 .04
--------- --------
Total $58,543 .52 $17,969 .17
========= ========
At or For the Year Ended December
31, 2005
------------------------------------
Net Charge-
offs
Allowance (Recoveries)
as a % of --------------
Allowance Portfolio $ %
--------- ---------- -------- -----
Consumer home equity $10,017 .19 % $4,892 .10 %
Consumer other 2,053 3.57 3,970 N.M.
--------- --------
Total consumer $12,070 .23 $8,862 .19
Commercial real estate 21,222 .92 (8) -
Commercial business 6,602 1.52 (2,173) (.51)
Leasing and equipment finance 15,313 1.02 21,384 1.50
Residential real estate 616 .08 91 .01
--------- --------
Total $55,823 .55 $28,156 .29
========= ========
Quarterly Net Charge-Offs:
--------------------------
Quarter Ended
--------------------------------------------
Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,
2006 2006 2006 2006 2005
-------- -------- -------- -------- --------
Consumer home equity $3,100 $1,615 $1,232 $1,399 $1,784
Consumer other 1,611 2,340 1,167 (316) 2,062
-------- -------- -------- -------- --------
Total consumer $4,711 $3,955 $2,399 $1,083 $3,846
Commercial real estate (28) 148 - 69 (76)
Commercial business 168 (23) 170 154 157
Leasing and equipment
finance 1,611 745 1,705 831 167
Residential real estate 166 38 35 32 10
-------- -------- -------- -------- --------
Total $6,628 $4,863 $4,309 $2,169 $4,104
======== ======== ======== ======== ========
Change from
-----------------
Sep. 30, Dec. 31,
2006 2005
-------- --------
Consumer home equity $1,485 $1,316
Consumer other (729) (451)
-------- --------
Total consumer $756 $865
Commercial real estate (176) 48
Commercial business 191 11
Leasing and equipment finance 866 1,444
Residential real estate 128 156
-------- --------
Total $1,765 $2,524
======== ========
Quarterly Net Charge-Offs as a Percentage of Average Loans
and Leases:
-------------------------------------------------------------
Quarter Ended
------------------------------------------------
Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,
2006 2006 2006 2006 2005
-------- -------- -------- -------- --------
Consumer home
equity .21 % .12 % .09 % .11 % .14 %
Total
consumer .32 .28 .18 .08 .30
Commercial real
estate - .02 - .01 (.01)
Commercial business .13 (.02) .14 .14 .15
Leasing and
equipment finance .36 .17 .42 .22 .05
Residential real
estate .10 .02 .02 .02 .01
Total .24 .18 .16 .08 .16
Change from
------------------
Sep. 30, Dec. 31,
2006 2005
-------- --------
Consumer home equity .09 % .07 %
Total consumer .04 .02
Commercial real estate (.02) .01
Commercial business .15 (.02)
Leasing and equipment finance .19 .31
Residential real estate .08 .09
Total .06 .08
Non-performing
assets: At At At Change from
---------------------December September December ------------------
31, 30, 31, Sept. 30, Dec. 31,
2006 2006 2005 2006 2005
--------- ---------- --------- --------- --------
Non-accrual loans
and leases:
Consumer home
equity and
other $16,520 $12,363 $18,410 $4,157 $(1,890)
Commercial real
estate 12,849 5,226 188 7,623 12,661
Commercial
business 3,421 1,337 2,207 2,084 1,214
Leasing and
equipment
finance 7,596 6,133 6,434 1,463 1,162
Residential
real estate 2,799 2,209 2,409 590 390
--------- ---------- --------- --------- --------
Total non-
accrual loans
and leases 43,185 27,268 29,648 15,917 13,537
Other real
estate owned:
Residential
real estate 19,899 20,712 14,877 (813) 5,022
Commercial real
estate 2,554 7,156 2,834 (4,602) (280)
--------- ---------- --------- --------- --------
Total other
real estate
owned 22,453 27,868 17,711 (5,415) 4,742
--------- ---------- --------- --------- --------
Total non-
performing
assets $65,638 $55,136 $47,359 $10,502 $18,279
========= ========== ========= ========= ========
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CREDIT QUALITY DATA
(Dollars in thousands)
(Unaudited)
Over 30-day
delinquency
data (1):
-------------- At December 31, At September 30,
2006 2006
---------------------- ---------------------------
Principal % of Principal % of
Balances Portfolio Balances Portfolio
--------- ------------ -------------- ------------
Consumer home
equity and
other $34,313 .58 % $25,808 .45 %
Commercial
real estate 18,072 .76 4,697 .19
Commercial
business 762 .14 340 .06
Leasing and
equipment
finance 8,499 .47 8,849 .51
Residential
real estate 10,047 1.61 10,018 1.52
--------- --------------
Total $71,693 .63 $49,712 .45
========= ==============
At At At
December 31, September 30, December 31,
2006 2006 2005
------------ -------------- ------------
Accruing loans and
leases 90 or
more days past due $12,164 $9,243 $6,475
============ ============== ============
Potential
Problem Loans
and Leases
(2):
--------------- At At At
December 31, September 30, December 31,
2006 2006 2005
------------ -------------- ------------
Commercial
real
estate $43,216 $25,878 $35,341
Commercial
business 11,664 12,493 11,793
Leasing and
equipment
finance 11,265 11,707 7,648
------------ -------------- ------------
$66,145 $50,078 $54,782
============ ============== ============
Over 30-day delinquency data (1):
--------------------------------------- At December 31,
2005
--------------------------
Principal % of
Balances Portfolio
----------- ------------
Consumer home equity and other $18,556 .36 %
Commercial real estate 10,038 .44
Commercial business 819 .19
Leasing and equipment finance 6,182 .41
Residential real estate 8,009 1.04
-----------
Total $43,604 .43
===========
Change from
--------------------------
September 30, December 31,
2006 2005
----------- ------------
Accruing loans and
leases 90 or
more days past due $2,921 $5,689
=========== ============
Potential Problem Loans and Leases (2): Change from
---------------------------------------- --------------------------
September 30, December 31,
2006 2005
----------- ------------
Commercial real estate $17,338 $7,875
Commercial business (829) (129)
Leasing and equipment finance (442) 3,617
----------- ------------
$16,067 $11,363
=========== ============
(1) Excludes non-accrual loans and leases.
(2) Consists of loans and leases primarily classified for regulatory
purposes as substandard and reflect the distinct possibility,
but not probability, that they will become non-performing or
that TCF will not be able to collect all amounts due according
to the contractual terms of the loan or lease agreement.
N.M. Not meaningful.
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Dollars in thousands)
(Unaudited)
Three Months Ended December 31,
-----------------------------------
2006
---------------------------------
Average Yields and
Balance Interest Rates (1)
------------ --------- ----------
ASSETS
Investments $101,548 $1,173 4.59 %
Securities available for sale 1,840,649 24,699 5.37
Education loans held for sale 145,283 3,019 8.24
Loans and leases:
Consumer home equity:
Fixed-rate 4,293,070 74,869 6.92
Variable-rate 1,502,537 33,636 8.88
Consumer - other 40,119 1,042 10.30
------------ ---------
Total consumer home
equity and other 5,835,726 109,547 7.45
Commercial real estate:
Fixed- and adjustable-rate 1,718,735 28,220 6.51
Variable-rate 692,497 13,761 7.88
------------ ---------
Total commercial real
estate 2,411,232 41,981 6.91
Commercial business:
Fixed- and adjustable-rate 152,018 2,488 6.49
Variable-rate 384,360 7,320 7.56
------------ ---------
Total commercial business 536,378 9,808 7.25
Leasing and equipment finance 1,771,231 33,462 7.56
------------ ---------
Subtotal 10,554,567 194,798 7.33
Residential real estate 643,087 9,352 5.81
------------ ---------
Total loans and leases 11,197,654 204,150 7.25
------------ ---------
Total interest-earning
assets 13,285,134 233,041 6.98
------------ ---------
Other assets 1,160,876
------------
Total assets $14,446,010
============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Non-interest bearing deposits:
Retail $1,457,265
Small business 629,011
Commercial and custodial 206,034
------------
Total non-interest bearing
deposits 2,292,310
Interest-bearing deposits:
Premier checking 1,042,361 8,196 3.12
Other checking 813,851 464 .23
------------ ---------
Subtotal 1,856,212 8,660 1.85
Premier savings 1,014,427 11,073 4.33
Other savings 1,299,319 3,473 1.06
------------ ---------
Subtotal 2,313,746 14,546 2.49
Money market 593,961 4,179 2.79
------------ ---------
Subtotal 4,763,919 27,385 2.28
Certificates of deposit 2,470,659 28,611 4.59
------------ ---------
Total interest-bearing
deposits 7,234,578 55,996 3.07
------------ ---------
Total deposits 9,526,888 55,996 2.33
------------ ---------
Borrowings:
Short-term borrowings 520,883 7,026 5.35
Long-term borrowings 3,039,011 34,132 4.46
------------ ---------
Total borrowings 3,559,894 41,158 4.59
------------ ---------
Total deposits and borrowings 13,086,782 97,154 2.94
------------ ---------
Other liabilities 319,740
------------
Total liabilities 13,406,522
Stockholders' equity 1,039,488
------------
Total liabilities and
stockholders' equity $14,446,010
============
Net interest income and margin $135,887 4.07 %
========= ==========
Three Months Ended December 31,
-----------------------------------
2005
---------------------------------
Average Yields and
Balance Interest Rates (1)
------------ --------- ----------
ASSETS
Investments $83,027 $841 4.03 %
Securities available for sale 1,577,967 20,766 5.26
Education loans held for sale 230,623 3,342 5.75
Loans and leases:
Consumer home equity:
Fixed-rate 2,944,673 49,457 6.66
Variable-rate 2,120,363 41,059 7.68
Consumer - other 34,544 834 9.58
------------ ---------
Total consumer home equity
and other 5,099,580 91,350 7.11
Commercial real estate:
Fixed- and adjustable-rate 1,451,488 22,550 6.16
Variable-rate 809,855 13,786 6.75
------------ ---------
Total commercial real estate 2,261,343 36,336 6.37
Commercial business:
Fixed- and adjustable-rate 106,974 1,591 5.90
Variable-rate 321,436 5,196 6.41
------------ ---------
Total commercial business 428,410 6,787 6.29
Leasing and equipment finance 1,461,491 25,590 7.00
------------ ---------
Subtotal 9,250,824 160,063 6.87
Residential real estate 792,245 11,373 5.73
------------ ---------
Total loans and leases 10,043,069 171,436 6.78
------------ ---------
Total interest-earning
assets 11,934,686 196,385 6.54
------------ ---------
Other assets 1,139,016
------------
Total assets $13,073,702
============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Non-interest bearing deposits:
Retail $1,492,418
Small business 623,310
Commercial and custodial 295,910
------------
Total non-interest bearing
deposits 2,411,638
Interest-bearing deposits:
Premier checking 827,742 6,201 2.97
Other checking 936,517 550 .23
------------ ---------
Subtotal 1,764,259 6,751 1.52
Premier savings 640,444 5,906 3.66
Other savings 1,475,505 3,025 .81
------------ ---------
Subtotal 2,115,949 8,931 1.67
Money market 649,123 2,914 1.78
------------ ---------
Subtotal 4,529,331 18,596 1.63
Certificates of deposit 1,886,787 15,687 3.29
------------ ---------
Total interest-bearing
deposits 6,416,118 34,283 2.12
------------ ---------
Total deposits 8,827,756 34,283 1.54
------------ ---------
Borrowings:
Short-term borrowings 739,372 7,630 4.09
Long-term borrowings 2,207,711 25,190 4.53
------------ ---------
Total borrowings 2,947,083 32,820 4.42
------------ ---------
Total deposits and borrowings 11,774,839 67,103 2.26
------------ ---------
Other liabilities 331,095
------------
Total liabilities 12,105,934
Stockholders' equity 967,768
------------
Total liabilities and
stockholders' equity $13,073,702
============
Net interest income and margin $129,282 4.31 %
========= ==========
(1) Annualized.
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Dollars in thousands)
(Unaudited)
Year Ended December 31,
-----------------------------------
2006
---------------------------------
Average Yields and
Balance Interest Rates
------------ --------- ----------
ASSETS
Investments $78,511 $3,504 4.46 %
Securities available for sale 1,833,359 98,035 5.35
Education loans held for sale 210,992 15,009 7.11
Loans and leases:
Consumer home equity:
Fixed-rate 3,851,117 263,157 6.83
Variable-rate 1,659,544 143,576 8.65
Consumer - other 36,711 3,717 10.13
------------ ---------
Total
consumer
home equity
and other 5,547,372 410,450 7.40
Commercial real estate:
Fixed- and adjustable-rate 1,665,531 105,089 6.31
Variable-rate 721,871 55,239 7.65
------------ ---------
Total
commercial
real estate 2,387,402 160,328 6.72
Commercial business:
Fixed- and adjustable-rate 134,560 8,471 6.30
Variable-rate 373,690 27,619 7.39
------------ ---------
Total
commercial
business 508,250 36,090 7.10
Leasing and equipment finance 1,659,807 122,292 7.37
------------ ---------
Subtotal 10,102,831 729,160 7.22
Residential real estate 696,086 40,430 5.81
------------ ---------
Total loans and leases 10,798,917 769,590 7.13
------------ ---------
Total
interest-
earning
assets 12,921,779 886,138 6.86
------------ ---------
Other assets 1,141,934
------------
Total assets $14,063,713
============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Non-interest bearing deposits:
Retail $1,513,121
Small business 609,907
Commercial and custodial 232,725
------------
Total non-interest bearing
deposits 2,355,753
Interest-bearing deposits:
Premier checking 1,001,024 31,539 3.15
Other checking 864,316 2,017 .23
------------ ---------
Subtotal 1,865,340 33,556 1.80
Premier savings 899,067 37,275 4.15
Other savings 1,376,182 12,797 .93
------------ ---------
Subtotal 2,275,249 50,072 2.20
Money market 620,844 15,216 2.45
------------ ---------
Subtotal 4,761,433 98,844 1.39
Certificates of deposit 2,291,002 96,480 4.21
------------ ---------
Total interest-bearing
deposits 7,052,435 195,324 2.77
------------ ---------
Total
deposits 9,408,188 195,324 2.08
------------ ---------
Borrowings:
Short-term borrowings 596,852 30,041 5.03
Long-term borrowings 2,752,847 123,243 4.48
------------ ---------
Total
borrowings 3,349,699 153,284 4.58
------------ ---------
Total deposits and borrowings 12,757,887 348,608 2.73
------------ ---------
Other liabilities 300,930
------------
Total liabilities 13,058,817
Stockholders' equity 1,004,896
------------
Total liabilities and
stockholders'
equity $14,063,713
============
Net interest income and margin $537,530 4.16 %
========= ==========
Year Ended December 31,
-----------------------------------
2005
---------------------------------
Average Yields and
Balance Interest Rates
------------ --------- ----------
ASSETS
Investments $95,349 $3,450 3.62 %
Securities available for sale 1,569,808 81,479 5.19
Education loans held for sale 214,588 10,921 5.09
Loans and leases:
Consumer home equity:
Fixed-rate 2,304,340 154,241 6.69
Variable-rate 2,450,634 171,133 6.98
Consumer - other 34,763 3,213 9.24
------------ ---------
Total consumer home equity
and other 4,789,737 328,587 6.86
Commercial real estate:
Fixed- and adjustable-rate 1,385,905 85,214 6.15
Variable-rate 826,934 49,561 5.99
------------ ---------
Total commercial real
estate 2,212,839 134,775 6.09
Commercial business:
Fixed- and adjustable-rate 85,390 4,959 5.81
Variable-rate 340,314 19,575 5.75
------------ ---------
Total commercial business 425,704 24,534 5.76
Leasing and equipment finance 1,423,264 97,596 6.86
------------ ---------
Subtotal 8,851,544 585,492 6.61
Residential real estate 885,735 50,680 5.72
------------ ---------
Total loans and leases 9,737,279 636,172 6.53
------------ ---------
Total interest-earning
assets 11,617,024 732,022 6.30
------------ ---------
Other assets 1,113,850
------------
Total assets $12,730,874
============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Non-interest bearing deposits:
Retail $1,548,027
Small business 585,860
Commercial and custodial 311,497
------------
Total non-interest bearing
deposits 2,445,384
Interest-bearing deposits:
Premier checking 641,672 15,910 2.48
Other checking 1,026,017 2,067 .20
------------ ---------
Subtotal 1,667,689 17,977 1.08
Premier savings 427,070 13,246 3.10
Other savings 1,558,423 9,419 .60
------------ ---------
Subtotal 1,985,493 22,665 1.14
Money market 640,576 7,640 1.19
------------ ---------
Subtotal 4,293,758 48,282 1.12
Certificates of deposit 1,740,440 49,124 2.82
------------ ---------
Total interest-bearing
deposits 6,034,198 97,406 1.61
------------ ---------
Total deposits 8,479,582 97,406 1.15
------------ ---------
Borrowings:
Short-term borrowings 917,665 29,830 3.25
Long-term borrowings 2,038,561 87,096 4.27
------------ ---------
Total borrowings 2,956,226 116,926 3.96
------------ ---------
Total deposits and borrowings 11,435,808 214,332 1.87
------------ ---------
Other liabilities 349,216
------------
Total liabilities 11,785,024
Stockholders' equity 945,850
------------
Total liabilities and
stockholders' equity $12,730,874
============
Net interest income and margin $517,690 4.46 %
========= ==========
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME AND FINANCIAL RATIOS
(Dollars in thousands, except per-share data)
(Unaudited)
At or For the Three Months
Ended
-------------------------------
Dec. 31, Sep. 30, Jun. 30,
2006 2006 2006
--------- --------- ---------
Interest income:
Loans and leases $204,150 $199,469 $188,988
Securities available for sale 24,699 24,481 25,156
Education loans held for sale 3,019 3,438 4,205
Investments 1,173 862 792
--------- --------- ---------
Total interest income 233,041 228,250 219,141
--------- --------- ---------
Interest expense:
Deposits 55,996 53,234 46,247
Borrowings 41,158 39,983 37,452
--------- --------- ---------
Total interest expense 97,154 93,217 83,699
--------- --------- ---------
Net interest income 135,887 135,033 135,442
Provision for credit losses 10,073 5,288 4,177
--------- --------- ---------
Net interest income after
provision for credit losses 125,814 129,745 131,265
Non-interest income:
Fees and service charges 66,735 70,777 71,099
Card revenue 23,485 24,353 22,984
ATM revenue 9,019 9,880 9,762
Investments and insurance revenue 2,087 3,226 2,894
--------- --------- ---------
Subtotal 101,326 108,236 106,739
Leasing and equipment finance 15,165 13,372 12,552
Other 2,340 7,904 4,331
--------- --------- ---------
Fees and other revenue 118,831 129,512 123,622
Gains on sales of securities
available for sale - - -
--------- --------- ---------
Total non-interest income 118,831 129,512 123,622
--------- --------- ---------
Non-interest expense:
Compensation and employee benefits 85,811 84,795 85,083
Occupancy and equipment 29,905 28,664 27,998
Advertising and promotions 6,235 8,220 6,755
Operating lease depreciation 4,000 3,779 3,405
Other 39,610 36,931 37,725
--------- --------- ---------
Total non-interest expense 165,561 162,389 160,966
--------- --------- ---------
Income before income tax
expense 79,084 96,868 93,921
Income tax expense 25,351 30,941 26,860
--------- --------- ---------
Net income $53,733 $65,927 $67,061
========= ========= =========
Net income per common share:
Basic $.42 $.51 $.52
========= ========= =========
Diluted $.42 $.51 $.52
========= ========= =========
Dividends declared per common share $.23 $.23 $.23
========= ========= =========
Financial Ratios:
--------------------------------------
Return on average assets (1) 1.49 % 1.86 % 1.92 %
Return on average common equity (1) 20.68 26.44 27.75
Net interest margin (1) 4.07 4.11 4.22
Net charge-offs as a percentage of
average loans and leases (1) .24 .18 .16
Average total equity to average assets 7.20 % 7.02 % 6.92 %
At or For the Three Months
Ended
-------------------------------
Mar. 31, Dec. 31,
2006 2005
--------------- --------------
Interest income:
Loans and leases $176,983 $171,436
Securities available for sale 23,699 20,766
Education loans held for sale 4,347 3,342
Investments 677 841
--------------- --------------
Total interest income 205,706 196,385
--------------- --------------
Interest expense:
Deposits 39,847 34,283
Borrowings 34,691 32,820
--------------- --------------
Total interest expense 74,538 67,103
--------------- --------------
Net interest income 131,168 129,282
Provision for credit losses 1,151 5,396
--------------- --------------
Net interest income after
provision for credit losses 130,017 123,886
Non-interest income:
Fees and service charges 61,555 67,628
Card revenue 21,262 21,419
ATM revenue 9,099 9,557
Investments and insurance revenue 2,488 2,339
--------------- --------------
Subtotal 94,404 100,943
Leasing and equipment finance 11,915 15,405
Other 11,180 8,590
--------------- --------------
Fees and other revenue 117,499 124,938
Gains on sales of securities
available for sale - -
--------------- --------------
Total non-interest income 117,499 124,938
--------------- --------------
Non-interest expense:
Compensation and employee benefits 86,168 82,700
Occupancy and equipment 28,051 27,819
Advertising and promotions 5,716 6,088
Operating lease depreciation 3,163 2,164
Other 37,182 37,860
--------------- --------------
Total non-interest expense 160,280 156,631
--------------- --------------
Income before income tax
expense 87,236 92,193
Income tax expense 29,014 26,653
--------------- --------------
Net income $58,222 $65,540
=============== ==============
Net income per common share:
Basic $.45 $.50
=============== ==============
Diluted $.45 $.50
=============== ==============
Dividends declared per common share $.23 $.2125
=============== ==============
Financial Ratios:
--------------------------------------
Return on average assets (1) 1.71 % 2.01 %
Return on average common equity (1) 23.82 27.09
Net interest margin (1) 4.25 4.31
Net charge-offs as a percentage of
average loans and leases (1) .08 .16
Average total equity to average assets 7.18 % 7.40 %
(1) Annualized.
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED QUARTERLY AVERAGE BALANCE SHEETS AND SUPPLEMENTAL
INFORMATION
(In thousands)
(Unaudited)
Dec. 31, Sep. 30, Jun. 30,
2006 2006 2006
------------ ------------ ------------
ASSETS
Cash and due from banks $316,389 $322,484 $325,715
Investments 101,548 72,393 69,176
Securities available for sale 1,840,649 1,829,917 1,880,671
Education loans held for sale 145,283 190,724 228,492
Loans and leases:
Consumer home equity:
Fixed-rate 4,293,070 4,027,680 3,721,249
Variable-rate 1,502,537 1,585,487 1,689,402
Consumer - other 40,119 36,978 34,854
------------ ------------ ------------
Total consumer home equity
and other 5,835,726 5,650,145 5,445,505
Commercial real estate:
Fixed- and adjustable-rate 1,718,735 1,699,431 1,672,865
Variable-rate 692,497 709,806 725,560
------------ ------------ ------------
Total commercial real
estate 2,411,232 2,409,237 2,398,425
Commercial business:
Fixed- and adjustable-rate 152,018 142,293 127,702
Variable-rate 384,360 403,070 372,828
------------ ------------ ------------
Total commercial business 536,378 545,363 500,530
Leasing and equipment finance 1,771,231 1,707,045 1,624,781
------------ ------------ ------------
Subtotal 10,554,567 10,311,790 9,969,241
Residential real estate 643,087 676,454 714,433
------------ ------------ ------------
Total loans and leases 11,197,654 10,988,244 10,683,674
Allowance for loan and lease
losses (56,440) (55,079) (55,085)
------------ ------------ ------------
Net loans and leases 11,141,214 10,933,165 10,628,589
Premises and equipment 400,812 388,099 381,174
Goodwill 152,599 152,599 152,599
Other assets 347,516 321,465 305,771
------------ ------------ ------------
$14,446,010 $14,210,846 $13,972,187
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Non-interest-bearing deposits:
Retail $1,457,265 $1,484,651 $1,557,933
Small business 629,011 615,119 604,776
Commercial and custodial 206,034 209,365 234,188
------------ ------------ ------------
Total non-interest bearing
deposits 2,292,310 2,309,135 2,396,897
Interest-bearing deposits:
Premier checking 1,042,361 1,021,560 1,000,749
Other checking 813,851 840,966 893,800
------------ ------------ ------------
Subtotal 1,856,212 1,862,526 1,894,549
Premier savings 1,014,427 942,760 855,979
Other savings 1,299,319 1,350,659 1,415,767
------------ ------------ ------------
Subtotal 2,313,746 2,293,419 2,271,746
Money market 593,961 609,997 610,766
------------ ------------ ------------
Subtotal 4,763,919 4,765,942 4,777,061
Certificates of deposit 2,470,659 2,431,364 2,249,694
------------ ------------ ------------
Total interest-bearing
deposits 7,234,578 7,197,306 7,026,755
------------ ------------ ------------
Total deposits 9,526,888 9,506,441 9,423,652
------------ ------------ ------------
Borrowings:
Short-term borrowings 520,883 619,683 573,418
Long-term borrowings 3,039,011 2,780,532 2,703,623
------------ ------------ ------------
Total borrowings 3,559,894 3,400,215 3,277,041
Accrued expenses and other
liabilities 319,740 306,971 304,875
------------ ------------ ------------
Total liabilities 13,406,522 13,213,627 13,005,568
------------ ------------ ------------
Stockholders' equity:
Common stock 1,534 1,842 1,842
Additional paid-in capital 395,237 468,271 467,768
Retained earnings 1,129,892 1,611,335 1,573,856
Accumulated other comprehensive
loss (23,804) (37,225) (48,838)
Treasury stock at cost and
other (463,371) (1,047,004) (1,028,009)
------------ ------------ ------------
1,039,488 997,219 966,619
------------ ------------ ------------
$14,446,010 $14,210,846 $13,972,187
============ ============ ============
Supplemental Information:
--------------------------------
Securities available for sale $1,840,649 $1,829,917 $1,880,671
Residential real estate loans 643,087 676,454 714,433
------------ ------------ ------------
Total securities available for
sale and residential real
estate loans $2,483,736 $2,506,371 $2,595,104
============ ============ ============
Mar. 31, Dec. 31,
2006 2005
------------ ------------
ASSETS
Cash and due from banks $332,293 $346,555
Investments 70,655 83,027
Securities available for sale 1,781,586 1,577,967
Education loans held for sale 281,185 230,623
Loans and leases:
Consumer home equity:
Fixed-rate 3,350,168 2,944,673
Variable-rate 1,865,549 2,120,363
Consumer - other 34,833 34,544
------------ ------------
Total consumer home equity and other 5,250,550 5,099,580
Commercial real estate:
Fixed- and adjustable-rate 1,569,077 1,451,488
Variable-rate 760,502 809,855
------------ ------------
Total commercial real estate 2,329,579 2,261,343
Commercial business:
Fixed- and adjustable-rate 115,745 106,974
Variable-rate 333,619 321,436
------------ ------------
Total commercial business 449,364 428,410
Leasing and equipment finance 1,533,034 1,461,491
------------ ------------
Subtotal 9,562,527 9,250,824
Residential real estate 751,782 792,245
------------ ------------
Total loans and leases 10,314,309 10,043,069
Allowance for loan and lease losses (55,121) (55,107)
------------ ------------
Net loans and leases 10,259,188 9,987,962
Premises and equipment 372,746 358,505
Goodwill 152,599 152,599
Other assets 364,808 336,464
------------ ------------
$13,615,060 $13,073,702
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Non-interest-bearing deposits:
Retail $1,554,007 $1,492,418
Small business 590,240 623,310
Commercial and custodial 282,409 295,910
------------ ------------
Total non-interest bearing deposits 2,426,656 2,411,638
Interest-bearing deposits:
Premier checking 938,055 827,742
Other checking 909,960 936,517
------------ ------------
Subtotal 1,848,015 1,764,259
Premier savings 780,046 640,444
Other savings 1,440,818 1,475,505
------------ ------------
Subtotal 2,220,864 2,115,949
Money market 669,602 649,123
------------ ------------
Subtotal 4,738,481 4,529,331
Certificates of deposit 2,005,639 1,886,787
------------ ------------
Total interest-bearing deposits 6,744,120 6,416,118
------------ ------------
Total deposits 9,170,776 8,827,756
------------ ------------
Borrowings:
Short-term borrowings 674,868 739,372
Long-term borrowings 2,481,793 2,207,711
------------ ------------
Total borrowings 3,156,661 2,947,083
Accrued expenses and other liabilities 310,038 331,095
------------ ------------
Total liabilities 12,637,475 12,105,934
------------ ------------
Stockholders' equity:
Common stock 1,843 1,844
Additional paid-in capital 469,062 475,334
Retained earnings 1,541,523 1,510,336
Accumulated other comprehensive loss (24,638) (24,157)
Treasury stock at cost and other (1,010,205) (995,589)
------------ ------------
977,585 967,768
------------ ------------
$13,615,060 $13,073,702
============ ============
Supplemental Information:
-------------------------------------------
Securities available for sale $1,781,586 $1,577,967
Residential real estate loans 751,782 792,245
------------ ------------
Total securities available for sale and
residential real estate loans $2,533,368 $2,370,212
============ ============
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED QUARTERLY YIELDS AND RATES (1)
(Unaudited)
Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,
2006 2006 2006 2006 2005
-------- -------- -------- -------- --------
ASSETS
Investments 4.59 % 4.74 % 4.59 % 3.86 % 4.03 %
Securities
available for
sale 5.37 5.35 5.35 5.32 5.26
Education loans
held for sale 8.24 7.15 7.38 6.27 5.75
Loans and leases:
Consumer home
equity:
Fixed-rate 6.92 6.87 6.80 6.72 6.66
Variable-rate 8.88 8.91 8.69 8.20 7.68
Consumer - other 10.30 10.31 10.60 9.23 9.58
Total
consumer
home equity
and other 7.45 7.46 7.41 7.26 7.11
Commercial real
estate:
Fixed- and
adjustable-rate 6.51 6.29 6.24 6.18 6.16
Variable-rate 7.88 7.97 7.60 7.18 6.75
Total
commercial
real estate 6.91 6.78 6.65 6.51 6.37
Commercial
business:
Fixed- and
adjustable-rate 6.49 6.32 6.18 6.13 5.90
Variable-rate 7.56 7.60 7.47 6.85 6.41
Total
commercial
business 7.25 7.27 7.14 6.66 6.29
Leasing and
equipment
finance 7.56 7.54 7.23 7.12 7.00
Subtotal 7.33 7.31 7.18 7.03 6.87
Residential real
estate 5.81 5.81 5.80 5.80 5.73
Total loans and
leases 7.25 7.21 7.09 6.94 6.78
Total
interest-
earning
assets 6.98 6.94 6.83 6.68 6.54
LIABILITIES
Interest-bearing
deposits:
Premier checking 3.12 3.26 3.18 3.04 2.97
Other checking .23 .23 .23 .25 .23
Subtotal 1.85 1.89 1.79 1.67 1.52
Premier savings 4.33 4.33 4.04 3.79 3.66
Other savings 1.06 .95 .84 .88 .81
Subtotal 2.49 2.34 2.04 1.90 1.67
Money market 2.79 2.64 2.25 2.15 1.78
Subtotal 2.28 2.21 1.97 1.85 1.63
Certificates of
deposit 4.59 4.36 4.06 3.70 3.29
Total interest-
bearing
deposits 3.07 2.93 2.64 2.40 2.12
Total
deposits 2.33 2.22 1.97 1.76 1.54
Borrowings:
Short-term
borrowings 5.35 5.36 4.99 4.51 4.09
Long-term
borrowings 4.46 4.51 4.50 4.44 4.53
Total borrowings 4.59 4.67 4.58 4.45 4.42
Total
interest-
bearing
liabilities 2.94 2.86 2.64 2.45 2.26
Net interest margin 4.07 % 4.11 % 4.22 % 4.25 % 4.31 %
======== ======== ======== ======== ========
(1) Annualized.
Source: TCF Financial Corporation
Contact: TCF Financial Corporation, Wayzata Jason Korstange, 952-745-2755 www.tcfbank.com
