TCF Reports Third Quarter 2019 Results and Announces $150 Million Share Repurchase Authorization

TCF also announces quarterly cash dividends on common and preferred stock

DETROIT–(BUSINESS WIRE)–TCF Financial Corporation (NYSE: TCF):

Third Quarter Highlights

  • Quarterly net income of $22.1 million, or $0.15 per diluted share
  • Adjusted diluted earnings per common share of $0.98(1), excluding $106.2 million, or $0.83 per share, after-tax impact of merger-related expenses and non-core items
  • Successfully closed merger of equals between Legacy TCF Financial Corporation (Legacy TCF) and Chemical Financial Corporation (Chemical) on August 1, 2019
  • Purchase accounting fair value credit mark of $183 million and interest rate mark of $66 million on the Chemical loans
  • Efficiency ratio of 91.32%; adjusted efficiency ratio of 58.74%(1)
  • Return on average common equity (“ROACE”) of 1.75%; return on average tangible common equity (“ROATCE”) of 2.68%(1); adjusted ROATCE of 14.96%(1)
  • Repositioned assets through investment securities sales and termination of interest rate swaps to lower the risk profile, reduce asset sensitivity and and enhance capital efficiency and liquidity
  • Transferred Legacy TCF auto finance portfolio to held-for-sale ($1.2 billion at September 30, 2019), resulting in a $19.3 million pre-tax loss, or $14.7 million after tax
  • Net charge-off rate as a percentage of average loans and leases of 0.39%, annualized
  • Common equity Tier 1 capital ratio of 10.88%
  • Announced $150 million share repurchase authorization on October 28, 2019
  • Announced quarterly cash dividends on common stock of $0.35 per share on October 28, 2019

Merger-related Expenses and Non-core Items in the Third Quarter(1)

  • Pre-tax merger-related expenses of $111.3 million, $82.9 million net of tax, or 64 cents per diluted common share
  • Pre-tax loss of $41.1 million, $23.3 million net of tax, or 19 cents per diluted common share related to non-core items, see summary of non-core adjustments below
(1)

Denotes a non-GAAP financial measure. See “Reconciliation of GAAP to Non-GAAP Financial Measures” tables.

Note: TCF’s financial results for any periods ended prior to August 1, 2019 reflect Legacy TCF financial results only on a standalone basis. In addition, TCF’s reported financial results for the third quarter of 2019 reflect Legacy TCF financial results only for the month of July and the post-merger combined TCF financial results for August and September. As a result of these two factors, TCF’s financial results for the third quarter of 2019 may not be directly comparable to prior reported periods. The number of shares issued and outstanding, earnings per share, additional paid-in-capital and all references to share quantities of TCF have been retrospectively restated to reflect the equivalent number of shares issued in the Merger as the Merger was treated as a reverse merger.

Summary of Financial Results(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

At or For the Quarter Ended

 

Change From

 

Sep. 30,

 

Jun. 30,

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

Jun. 30,

Sep. 30,

(Dollars in thousands, except per share data)

2019

 

2019

 

2019

 

2018

 

2018

 

2019

 

2018

Financial Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to TCF

$

22,148

 

 

$

90,427

 

 

$

70,494

 

 

$

85,652

 

 

$

86,196

 

 

(75.5

)

%

(74.3

)

%

Net interest income

 

371,793

 

 

 

254,057

 

 

 

254,429

 

 

 

253,153

 

 

 

253,502

 

 

46.3

 

 

46.7

 

 

Basic earnings per common share

 

0.15

 

 

 

1.07

 

 

 

0.83

 

 

 

1.00

 

 

 

1.00

 

 

(86.0

)

 

(85.0

)

 

Diluted earnings per common share

 

0.15

 

 

 

1.07

 

 

 

0.83

 

 

 

1.00

 

 

 

1.00

 

 

(86.0

)

 

(85.0

)

 

Return on average assets (“ROAA”)(3)

 

0.26

%

 

 

1.54

%

 

 

1.22

%

 

 

1.52

%

 

 

1.55

%

 

(128

)

bps

(129

)

bps

ROACE(3)

 

1.75

 

 

 

14.27

 

 

 

11.40

 

 

 

14.30

 

 

 

14.44

 

 

(1,252

)

 

(1,269

)

 

ROATCE(2)(3)

 

2.68

 

 

 

15.46

 

 

 

12.42

 

 

 

15.58

 

 

 

15.76

 

 

(1,278

)

 

(1,308

)

 

Net interest margin (FTE)(3)

 

4.14

 

 

 

4.49

 

 

 

4.61

 

 

 

4.67

 

 

 

4.73

 

 

(35

)

 

(59

)

 

Net charge-offs as a percentage of average loans and leases(3)

 

0.39

 

 

 

0.29

 

 

 

0.39

 

 

 

0.46

 

 

 

0.15

 

 

10

 

 

24

 

 

Nonperforming assets as a percentage of total loans and leases and other real estate owned

 

0.62

 

 

 

0.62

 

 

 

0.63

 

 

 

0.65

 

 

 

0.59

 

 

 

 

3

 

 

Efficiency ratio

 

91.32

 

 

 

65.11

 

 

 

70.70

 

 

 

66.30

 

 

 

67.41

 

 

2,621

 

 

2,391

 

 

Adjusted Financial Results (non-GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income attributable to TCF(2)

$

128,301

 

 

$

93,650

 

 

$

77,700

 

 

$

85,652

 

 

$

86,196

 

 

37.0

 

%

48.8

 

%

Adjusted diluted earnings per common share(2)

 

0.98

 

 

 

1.11

 

 

 

0.91

 

 

 

1.00

 

 

 

1.00

 

 

(11.7

)

 

(2.0

)

 

Adjusted ROAA(2)(3)

 

1.34

%

 

 

1.59

%

 

 

1.34

%

 

 

1.52

%

 

 

1.55

%

 

(25

)

bps

(21

)

bps

Adjusted ROACE(2)(3)

 

11.21

 

 

 

14.79

 

 

 

12.61

 

 

 

14.30

 

 

 

14.44

 

 

(358

)

 

(323

)

 

Adjusted ROATCE(2)(3)

 

14.96

 

 

 

16.02

 

 

 

13.72

 

 

 

15.58

 

 

 

15.76

 

 

(106

)

 

(80

)

 

Adjusted efficiency ratio(2)

 

58.74

 

 

 

61.48

 

 

 

65.67

 

 

 

63.89

 

 

 

64.91

 

 

(274

)

 

(617

)

 

(1) Financial results for any periods ended prior to August 1, 2019 reflect Legacy TCF financials on a standalone basis. Certain reclassifications have been made to prior period financial statements to conform to the current period presentation.

(2) Denotes a non-GAAP financial measure. See “Reconciliation of GAAP to Non-GAAP Financial Measures” tables.

(3) Annualized.

The following table includes merger-related expenses and non-core items used to arrive at adjusted net income in the Adjusted Financial Results (non-GAAP) (see Reconciliation of Non-GAAP Financial Measures).

 

For the quarter ended September 30, 2019

(Dollars in thousands, except per share data)

Pre-tax income

(loss)

 

After-tax

benefit (loss)(1)

 

Per Share

Merger-related expenses

$

(111,259)

 

$

(82,862)

 

$

(0.64)

Non-core items:

 

 

 

 

 

Transfer of Legacy TCF auto finance portfolio to held-for-sale(2)

(19,264)

 

(14,664)

 

(0.11)

Termination of interest rate swaps(3)

(17,302)

 

(13,170)

 

(0.10)

Write-down of company-owned vacant land parcels(4)

(5,890)

 

(4,483)

 

(0.04)

Sale of certain investment securities(5)

5,869

 

4,467

 

0.03

Loan servicing rights impairment(3)

(4,520)

 

(3,441)

 

(0.03)

Tax basis adjustment benefit(6)

 

8,000

 

0.06

Total non-core items

$

(41,107)

 

$

(23,291)

 

$

(0.19)

Total merger-related and non-core items

$

(152,366)

 

$

(106,153)

 

$

(0.83)

(1) Net of tax benefit at TCF’s normal tax rate and other tax benefits.

(2) Included within Net (loss) gain on sales of loans and leases.

(3) Included within Other noninterest income.

(4) Included within Other noninterest expense.

(5) Included within Net gains on investment securities.

(6) Included within Income tax (benefit) expense.

TCF Financial Corporation (“TCF” or the “Corporation”) (NASDAQ: TCF) today reported net income of $22.1 million and diluted earnings per common share of 15 cents for the third quarter of 2019. Adjusted net income was $128.3 million, or 98 cents per diluted earnings per common share, for the third quarter of 2019, excluding merger-related expenses and non-core items of 83 cents per common share (see “Reconciliation of GAAP to Non-GAAP Financial Measures” tables).

“Following the closing of the merger of equals on August 1, we continue to make progress on integration initiatives and I am optimistic about the growth outlook of the organization as we establish our roadmaps for execution on business synergy opportunities,” said Craig R. Dahl, president and chief executive officer. “Our integration program and activities remain on track, and we continue to be focused on achieving targeted cost savings, planning for systems conversions and leveraging our full-scale product offering across our broader consumer and commercial customer base throughout the Midwest. Our teams are collaborating across the organization to ensure we continue to build on the momentum that each bank brings to the table, for both continued organic growth and taking care of our customers. As we go to market as One TCF, we are well positioned to deliver shareholder value through improved efficiency and return on capital, while maintaining an exceptional customer experience.”

Net Interest Income and Net Interest Margin

Net interest income was $371.8 million for the third quarter of 2019. Purchase accounting accretion and amortization included in net interest income was $28.4 million. Net interest income, excluding purchase accounting accretion and amortization, was $343.4 million. Net interest margin on a fully tax-equivalent basis (FTE) was 4.14% for the third quarter of 2019. Net interest margin FTE, excluding purchase accounting accretion and amortization, was 3.83% (see “Reconciliation of GAAP to Non-GAAP Financial Measures” tables).

Noninterest Income

Noninterest income was $94.3 million for the third quarter of 2019. Noninterest income included the following balance sheet repositioning actions considered to be non-core items: a $19.3 million loss related to the transfer of the Legacy TCF auto finance portfolio to held-for-sale, a $17.3 million loss related to the termination of interest rate swaps, and a gain of $5.9 million related to the sale of $1.6 billion of certain investment securities. Noninterest income additionally included $4.5 million of loan servicing rights impairment, also considered a non-core item. Adjusted noninterest income for the third quarter of 2019 was $129.5 million (see “Reconciliation of GAAP to Non-GAAP Financial Measures” tables). The third quarter of 2019 also included a $2.1 million unrealized loss related to interest rate swaps mark-to-market adjustments resulting from changes in the interest rate environment. Noninterest income, excluding the interest rate swap mark-to-market adjustment and non-core items discussed previously, was $131.6 million for the third quarter of 2019.

Noninterest Expense

Noninterest expense was $425.6 million for the third quarter of 2019 and included $111.3 million of merger-related expenses. Noninterest expense also included $5.9 million of expense, included within other noninterest expense, related to the write-down of company-owned vacant land parcels, considered a non-core item. Excluding merger-related expenses and the write-down of company-owned vacant land parcels, adjusted noninterest expense was $308.5 million (see “Reconciliation of GAAP to Non-GAAP Financial Measures” tables).

Income Tax (Benefit) Expense

Income tax benefit for the third quarter of 2019 was $11.7 million. The third quarter of 2019 included an $8.0 million tax basis adjustment benefit. The third quarter of 2019 also included a $5.7 million benefit provided by the repricing of TCF’s net deferred tax position in conjunction with the completion of the merger and is reflected in the after-tax impact of merger-related expenses.

Credit Quality

Provision for credit losses Provision for credit losses was $27.2 million for the third quarter of 2019.

Net charge-off rate The annualized net charge-offs as a percentage of average loans and leases was 0.39% for the third quarter of 2019.

Allowance for Loan and Lease Losses Allowance for loan and lease losses was $121.2 million, or 0.36% of total loans and leases, at September 30, 2019. Loans acquired in the Merger were recorded at their fair value as of the merger date without a carryover of the related allowance, and as of September 30, 2019, the determination was made that no allowance was needed for this population of loans. Allowance for loan and lease losses and the credit discount on acquired loans was $297.0 million, or 0.89% of total loans and leases at September 30, 2019.

Nonaccrual loans and leases Nonaccrual loans and leases were $181.8 million at September 30, 2019 and represented 0.54% of total loans and leases.

Balance Sheet

Loans and leases Loans and leases were $33.5 billion at September 30, 2019, compared to $19.2 billion at June 30, 2019. Loan and lease balances were impacted by the addition of Chemical’s $15.7 billion loan and lease portfolio, partially offset by the transfer of the Legacy TCF auto finance portfolio to held-for-sale ($1.2 billion at September 30, 2019).

Investment securities The investment securities portfolio was $5.7 billion at September 30, 2019, compared to $3.3 billion at June 30, 2019. Portfolio balances were impacted by the addition of Chemical’s $3.8 billion investment securities portfolio and the subsequent sale of $1.6 billion of these investment securities during the third quarter of 2019.

Deposits Deposits were $35.3 billion at September 30, 2019, compared to $19.1 billion at June 30, 2019. Deposit balances were impacted by the addition of $16.8 billion of Chemical deposits during the third quarter of 2019.

Capital The common equity Tier 1 capital ratio was 10.88% at September 30, 2019.

TCF’s board of directors approved an authorization to repurchase up to $150 million of TCF common stock.

TCF’s board of directors also declared a regular quarterly cash dividend of $0.35 per common share payable on December 2, 2019 to shareholders of record at the close of business on November 15, 2019. In addition, the board of directors declared a quarterly cash dividend of $0.35625 per depositary share payable on December 2, 2019 to shareholders of record of the depositary shares, representing a 1/1,000th interest in a share of the 5.70% Series C Non-Cumulative Perpetual Preferred Stock, at the close of business on November 15, 2019.

Conference Call Details TCF will host a conference call to discuss third quarter 2019 results on Tuesday, October 29, 2019 at 10:00 a.m. Eastern Daylight Time. The conference call will be available via a live webcast on the Investor Relations section of TCF’s website, ir.tcfbank.com, and archived for replay. The conference call can also be accessed by dialing (844) 512-2926 and entering access code 3865677. To listen to the replay via phone, please dial (877) 344-7529 and enter access code 10135947. The replay begins approximately one hour after the call is completed on Tuesday, October 29, 2019 and will be available through Tuesday, November 5, 2019.

TCF Financial Corporation (NASDAQ: TCF) is a Detroit, Michigan-based financial holding company with $46 billion in total assets and a top 10 deposit market share in the Midwest at September 30, 2019. TCF’s primary banking subsidiary, TCF National Bank, is a premier Midwest bank offering consumer and commercial banking, trust and wealth management, and specialty leasing and lending products and services to consumers, small businesses and commercial clients. TCF has more than 500 branches primarily located in Michigan, Illinois and Minnesota with additional locations in Arizona, Colorado, Indiana, Ohio, South Dakota and Wisconsin. TCF also conducts business across all 50 states and Canada through its specialty lending and leasing businesses. To learn more about TCF, visit 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 Corporation’s businesses and their respective markets, such as projections of future performance, targets, guidance, statements of the Corporation’s plans and objectives, forecasts of market trends and other matters are forward-looking statements based on the Corporation’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 Corporation’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 Corporation’s Annual Report on Form 10-K for the year ended December 31, 2018 under the heading “Risk Factors” 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.

Use of Non-GAAP Financial Measures

Management uses the adjusted diluted earnings per common share, adjusted ROAA, adjusted ROACE, ROATCE, adjusted ROATCE, adjusted efficiency ratio, tangible book value per common share and tangible common equity to tangible assets internally to measure performance and believes that these financial measures not recognized under generally accepted accounting principles in the United States (“GAAP”) (i.e. non-GAAP) provide meaningful information to investors that will permit them to assess the Corporation’s capital and ability to withstand unexpected market or economic conditions and to assess the performance of the Corporation in relation to other banking institutions on the same basis as that applied by management, analysts and banking regulators. TCF adjusts certain results to exclude merger-related expenses and non-core items management believes it is useful to investors in understanding TCF’s business and operating results.

These non-GAAP financial measures are not defined by GAAP and other entities may calculate them differently than TCF does. Non-GAAP financial measures have inherent limitations and are not required to be uniformly applied. Although these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a corporation, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of results as reported under GAAP. In particular, a measure of earnings that excludes selected items does not represent the amount that effectively accrues directly to shareholders.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Financial Condition (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Change From

(Dollars in thousands)

Sep. 30,

 

Jun. 30,

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

Jun. 30, 2019

 

Sep. 30, 2018

2019

 

2019

 

2019

 

2018

 

2018

 

$

 

%

 

$

 

%

ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

$

586,060

 

$

294,566

 

$

283,659

 

$

279,267

 

$

306,834

 

$

291,494

 

99.0

%

$

279,226

 

91.0

%

Interest-bearing deposits with other banks

736,954

 

260,705

 

180,163

 

307,790

 

263,134

 

476,249

 

182.7

 

473,820

 

180.1

 

Total cash and cash equivalents

1,323,014

 

555,271

 

463,822

 

587,057

 

569,968

 

767,743

 

138.3

 

753,046

 

132.1

 

Federal Home Loan Bank and Federal Reserve Bank stocks, at cost

290,238

 

105,659

 

103,644

 

91,654

 

80,672

 

184,579

 

174.7

209,566

 

N.M.

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carried at fair value

5,579,835

 

3,109,803

 

2,945,342

 

2,470,065

 

2,379,546

 

2,470,032

 

79.4

 

3,200,289

 

134.5

 

Held-to-maturity, at amortized cost

144,000

 

144,919

 

148,024

 

148,852

 

152,881

 

(919)

 

(0.6)

 

(8,881)

 

(5.8)

 

Total investment securities

5,723,835

 

3,254,722

 

3,093,366

 

2,618,917

 

2,532,427

 

2,469,113

 

75.9

 

3,191,408

 

126.0

 

Loans and leases held-for-sale

1,436,069

 

74,410

 

64,468

 

90,664

 

114,198

 

1,361,659

 

N.M.

1,321,871

 

N.M.

Loans and leases

33,510,752

 

19,185,137

 

19,384,210

 

19,073,020

 

18,422,088

 

14,325,615

 

74.7

 

15,088,664

 

81.9

 

Allowance for loan and lease losses

(121,218)

 

(146,503)

 

(147,972)

 

(157,446)

 

(160,621)

 

25,285

 

17.3

 

39,403

 

24.5

 

Loans and leases, net

33,389,534

 

19,038,634

 

19,236,238

 

18,915,574

 

18,261,467

 

14,350,900

 

75.4

 

15,128,067

 

82.8

 

Premises and equipment, net

554,194

 

432,751

 

429,711

 

427,534

 

429,648

 

121,443

 

28.1

 

124,546

 

29.0

 

Goodwill

1,265,111

 

154,757

 

154,757

 

154,757

 

154,757

 

1,110,354

 

N.M.

1,110,354

 

N.M.

Other intangible assets, net

215,910

 

18,885

 

19,684

 

20,496

 

21,339

 

197,025

 

N.M.

194,571

 

N.M.

Loan servicing rights

55,301

 

19

 

20

 

23

 

25

 

55,282

 

N.M.

55,276

 

N.M.

Other assets

1,439,305

 

991,722

 

853,005

 

792,936

 

740,284

 

447,583

 

45.1

 

699,021

 

94.4

 

Total assets

$

45,692,511

 

$

24,626,830

 

$

24,418,715

 

$

23,699,612

 

$

22,904,785

 

$

21,065,681

 

85.5

 

$

22,787,726

 

99.5

 

LIABILITIES AND EQUITY:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing

$

7,979,900

 

$

4,062,912

 

$

4,104,652

 

$

3,936,155

 

$

3,974,333

 

$

3,916,988

 

96.4

%

$

4,005,567

 

100.8

%

Interest-bearing

27,306,174

 

15,049,475

 

14,919,459

 

14,967,531

 

14,522,178

 

12,256,699

 

81.4

 

12,783,996

 

88.0

 

Total deposits

35,286,074

 

19,112,387

 

19,024,111

 

18,903,686

 

18,496,511

 

16,173,687

 

84.6

 

16,789,563

 

90.8

 

Short-term borrowings

2,607,300

 

350,764

 

355,992

 

 

2,324

 

2,256,536

 

N.M.

2,604,976

 

N.M.

Long-term borrowings

860,482

 

1,617,531

 

1,411,426

 

1,449,472

 

1,171,541

 

(757,049)

 

(46.8)

 

(311,059)

 

(26.6)

 

Other liabilities

1,245,238

 

835,630

 

981,341

 

790,194

 

706,397

 

409,608

 

49.0

 

538,841

 

76.3

 

Total liabilities

39,999,094

 

21,916,312

 

21,772,870

 

21,143,352

 

20,376,773

 

18,082,782

 

82.5

 

19,622,321

 

96.3

 

Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

169,302

 

169,302

 

169,302

 

169,302

 

169,302

 

 

 

 

 

Common stock

153,571

 

87,944

 

88,063

 

88,198

 

88,201

 

65,627

 

74.6

 

65,370

 

74.1

 

Additional paid-in capital

3,478,159

 

781,788

 

789,467

 

798,627

 

795,856

 

2,696,371

 

N.M.

2,682,303

 

N.M.

Retained earnings

1,840,214

 

1,874,308

 

1,810,701

 

1,766,994

 

1,708,410

 

(34,094)

 

(1.8)

 

131,804

 

7.7

 

Accumulated other comprehensive income (loss)

56,228

 

37,334

 

5,481

 

(33,138)

 

(65,259)

 

18,894

 

50.6

121,487

 

N.M.

Treasury stock at cost and other

(27,370)

 

(265,016)

 

(246,621)

 

(252,182)

 

(189,652)

 

237,646

 

89.7

 

162,282

 

85.6

 

Total TCF Financial Corporation shareholders’ equity

5,670,104

 

2,685,660

 

2,616,393

 

2,537,801

 

2,506,858

 

2,984,444

 

111.1

 

3,163,246

 

126.2

 

Non-controlling interest

23,313

 

24,858

 

29,452

 

18,459

 

21,154

 

(1,545)

 

(6.2)

 

2,159

 

10.2

 

Total equity

5,693,417

 

2,710,518

 

2,645,845

 

2,556,260

 

2,528,012

 

2,982,899

 

110.0

 

3,165,405

 

125.2

 

Total liabilities and equity

$

45,692,511

 

$

24,626,830

 

$

24,418,715

 

$

23,699,612

 

$

22,904,785

 

$

21,065,681

 

85.5

 

$

22,787,726

 

99.5

 

N.M. Not Meaningful

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Income (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Change From

(Dollars in thousands)

Sep. 30,

 

Jun. 30,

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

Jun. 30, 2019

 

Sep. 30, 2018

2019

 

2019

 

2019

 

2018

 

2018

 

$

 

%

 

$

 

%

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans and leases

$

417,370

 

$

283,282

 

$

283,238

 

$

275,200

 

$

269,167

 

$

134,088

 

47.3

%

 

$

148,203

 

55.1

%

Interest on investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

31,038

 

22,041

 

16,666

 

13,915

 

11,498

 

8,997

 

40.8

 

 

19,540

 

169.9

 

Tax-exempt

3,385

 

1,208

 

2,684

 

4,147

 

4,328

 

2,177

 

180.2

 

 

(943)

 

(21.8)

 

Interest on loans held-for-sale

1,408

 

599

 

825

 

1,405

 

3,625

 

809

 

135.1

 

 

(2,217)

 

(61.2)

 

Interest on other earning assets

6,607

 

3,651

 

3,481

 

3,242

 

3,089

 

2,956

 

81.0

 

 

3,518

 

113.9

 

Total interest income

459,808

 

310,781

 

306,894

 

297,909

 

291,707

 

149,027

 

48.0

 

 

168,101

 

57.6

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

70,900

 

40,646

 

37,608

 

33,462

 

27,479

 

30,254

 

74.4

 

 

43,421

 

158.0

 

Interest on borrowings

17,115

 

16,078

 

14,857

 

11,294

 

10,726

 

1,037

 

6.4

 

 

6,389

 

59.6

 

Total interest expense

88,015

 

56,724

 

52,465

 

44,756

 

38,205

 

31,291

 

55.2

 

 

49,810

 

130.4

 

Net interest income

371,793

 

254,057

 

254,429

 

253,153

 

253,502

 

117,736

 

46.3

 

 

118,291

 

46.7

 

Provision for credit losses

27,188

 

13,569

 

10,122

 

18,894

 

2,270

 

13,619

 

100.4

 

 

24,918

 

N.M.

Net interest income after provision for credit losses

344,605

 

240,488

 

244,307

 

234,259

 

251,232

 

104,117

 

43.3

 

 

93,373

 

37.2

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges on deposit accounts

34,384

 

27,842

 

26,278

 

29,539

 

29,175

 

6,542

 

23.5

 

 

5,209

 

17.9

 

Leasing revenue

39,590

 

39,277

 

38,165

 

51,602

 

41,944

 

313

 

0.8

 

 

(2,354)

 

(5.6)

 

Wealth management revenue

4,241

 

 

 

 

 

4,241

 

N.M.

 

4,241

 

N.M.

Card and ATM revenue

23,315

 

20,496

 

18,659

 

20,093

 

20,074

 

2,819

 

13.8

 

 

3,241

 

16.1

 

Net (loss) gain on sales of loans and leases

(5,984)

 

11,141

 

8,217

 

8,795

 

8,502

 

(17,125)

 

N.M.

 

(14,486)

 

N.M.

Servicing fee revenue

5,121

 

4,523

 

5,110

 

5,523

 

6,032

 

598

 

13.2

 

 

(911)

 

(15.1)

 

Net gains on investment securities

5,900

 

1,066

 

451

 

167

 

94

 

4,834

 

N.M.

 

5,806

 

N.M.

Other

(12,309)

 

5,373

 

6,624

 

8,149

 

6,243

 

(17,682)

 

N.M.

 

(18,552)

 

N.M.

Total noninterest income

94,258

 

109,718

 

103,504

 

123,868

 

112,064

 

(15,460)

 

(14.1)

 

 

(17,806)

 

(15.9)

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

155,745

 

116,266

 

123,942

 

130,022

 

124,996

 

39,479

 

34.0

 

 

30,749

 

24.6

 

Occupancy and equipment

49,229

 

41,850

 

41,710

 

42,277

 

42,337

 

7,379

 

17.6

 

 

6,892

 

16.3

 

Lease financing equipment depreciation

19,408

 

19,133

 

19,256

 

19,085

 

19,525

 

275

 

1.4

 

 

(117)

 

(0.6)

 

Net foreclosed real estate and repossessed assets

2,203

 

2,448

 

4,630

 

4,396

 

3,880

 

(245)

 

(10.0)

 

 

(1,677)

 

(43.2)

 

Merger-related expenses

111,259

 

4,226

 

9,458

 

 

 

107,033

 

N.M.

 

111,259

 

N.M.

Other

87,776

 

52,926

 

54,079

 

54,178

 

55,685

 

34,850

 

65.8

 

 

32,091

 

57.6

 

Total noninterest expense

425,620

 

236,849

 

253,075

 

249,958

 

246,423

 

188,771

 

79.7

 

 

179,197

 

72.7

 

Income before income tax expense

13,243

 

113,357

 

94,736

 

108,169

 

116,873

 

(100,114)

 

(88.3)

 

 

(103,630)

 

(88.7)

 

Income tax (benefit) expense

(11,735)

 

19,314

 

21,287

 

20,013

 

28,034

 

(31,049)

 

N.M.

 

(39,769)

 

N.M.

Income after income tax expense

24,978

 

94,043

 

73,449

 

88,156

 

88,839

 

(69,065)

 

(73.4)

 

 

(63,861)

 

(71.9)

 

Income attributable to non-controlling interest

2,830

 

3,616

 

2,955

 

2,504

 

2,643

 

(786)

 

(21.7)

 

 

187

 

7.1

 

Net income attributable to TCF Financial Corporation

22,148

 

90,427

 

70,494

 

85,652

 

86,196

 

(68,279)

 

(75.5)

 

 

(64,048)

 

(74.3)

 

Preferred stock dividends

2,494

 

2,494

 

2,493

 

2,494

 

2,494

 

 

 

 

 

 

Net income available to common shareholders

$

19,654

 

$

87,933

 

$

68,001

 

$

83,158

 

$

83,702

 

$

(68,279)

 

(77.6)

 

 

$

(64,048)

 

(76.5)

 

N.M. Not Meaningful

Contacts

Tom Wennerberg

(248) 498-2872

news@tcfbank.com
(Media)

Timothy Sedabres

(952) 745-2766

investor@tcfbank.com
(Investors)

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