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TCF Reports Quarterly Net Income of $101.4 Million, or 57 Cents Per Share and Annual Net Income of $268.6 Million, or $1.44 Per Share

TCF Utilizes Tax Benefits to Give Back to Its Team Members and Communities, Invest in Its Business and Drive Shareholder Value

Tuesday, January 30, 2018 7:00 am CST

Dateline:

WAYZATA, Minn.

Public Company Information:

NYSE:
TCF
"Reconciliation of GAAP to Non-GAAP Financial Measures"

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

2018 ANNOUNCEMENTS

  • Announced a 100 percent increase to the quarterly common stock dividend
  • Announced the redemption of the Series B non-cumulative perpetual preferred stock on March 1, 2018

2017 OBSERVATIONS

  • Revenue of $1.4 billion, up 4.5 percent from 2016
  • Net interest margin of 4.54 percent, up 20 basis points from 2016
  • Period-end loans and leases of $19.1 billion, up 7.1 percent from December 31, 2016
  • Non-accrual loans and leases of $118.6 million, down 34.6 percent from December 31, 2016
  • Average deposits of $17.6 billion, up 2.7 percent from 2016
  • Earnings per share of $1.44, up 29 cents from 2016

FOURTH QUARTER OBSERVATIONS

  • Revenue of $362.8 million, up 10.9 percent from the fourth quarter of 2016
  • Net interest income of $241.9 million, up 14.4 percent from the fourth quarter of 2016
  • Net interest margin of 4.57 percent, up 27 basis points from the fourth quarter of 2016
  • Net charge-offs as a percentage of average loans and leases of 0.38 percent, up 11 basis points from the fourth quarter of 2016
  • Average deposits of $18.1 billion, up 6.3 percent from the fourth quarter of 2016
  • Earnings per share of 57 cents, up 30 cents from the fourth quarter of 2016
                                 
Summary of Financial Results   Table 1
        Change      
4Q 3Q 4Q 4Q17 vs   4Q17 vs YTD YTD
(Dollars in thousands, except per-share data) 2017   2017   2016   3Q17   4Q16   2017   2016   Change
Net income attributable to TCF $ 101,399 $ 60,528 $ 50,092 67.5 % 102.4 % $ 268,637 $ 212,124 26.6 %
Net interest income 241,860 234,103 211,446 3.3 14.4 925,238 848,106 9.1
Diluted earnings per common share 0.57 0.29 0.27 96.6 111.1 1.44 1.15 25.2
 

Financial Ratios (1)

Return on average assets 1.82 % 1.15 % 0.99 % 67 bps 83 bps 1.26 % 1.05 % 21 bps
Return on average common equity 16.95 8.44 8.40 851 855 10.80 9.13 167
Return on average tangible common equity(2) 32.87 9.57 9.43 2,330 2,344 15.73 10.29 544
Net interest margin 4.57 4.61 4.30 (4 ) 27 4.54 4.34 20
Net charge-offs as a percentage of average loans and leases 0.38 0.18 0.27 20 11 0.24 0.26 (2 )
 
(1) Annualized.
(2) See "Reconciliation of GAAP to Non-GAAP Financial Measures" table.
 

TCF Financial Corporation ("TCF" or the "Company") (NYSE: TCF) today reported net income of $101.4 million for the fourth quarter of 2017, compared with $50.1 million for the fourth quarter of 2016 and $60.5 million for the third quarter of 2017. Diluted earnings per common share was 57 cents for the fourth quarter of 2017 (inclusive of 29 cents per share of items listed below), compared with 27 cents for the fourth quarter of 2016 and 29 cents for the third quarter of 2017 (inclusive of a one-time reduction in net income available to common stockholders of 4 cents per common share related to the redemption of the Series A non-cumulative perpetual preferred stock in the third quarter of 2017). Net income and diluted earnings per common share for the fourth quarter of 2017 were impacted by the following items:

  • Estimated net tax benefit of $130.7 million, or 77 cents per common share, as a result of the enactment of the Tax Cuts and Jobs Act ("Tax Reform") on December 22, 2017,
  • Pre-tax charge of $88.2 million, or 48 cents per common share, related to impairment of goodwill and other intangible assets, severance, other asset impairments and lease termination write-offs associated with the discontinuation of auto finance loan originations effective December 1, 2017 and
  • Pre-tax impact of $13.1 million, or 5 cents per common share, related to additional TCF Foundation contribution, one-time team member bonuses, planned closure of five branches and inventory finance program extension.

"TCF generated positive momentum throughout 2017 that positions us well for continued success in 2018," said Craig R. Dahl, chairman and chief executive officer. "During the year, we successfully improved core earnings trends, reduced our risk profile and executed on our key initiatives. Our success in these areas, combined with the benefits from the recent Tax Reform, enabled us to give back to our team members and communities, invest in our business and drive shareholder value.

"During the fourth quarter, we discontinued auto finance loan originations and began deploying capital into other areas that we believe will provide a better return for our shareholders. We expect this initiative to result in a meaningful earnings improvement in 2018. As part of this decision, we announced a new share repurchase program and began repurchasing shares in the fourth quarter.

"Enactment of Tax Reform in the fourth quarter not only will reduce TCF’s effective tax rate moving forward, but it also created a significant net tax benefit in the quarter. As a result, we were pleased to provide one-time bonuses to eligible team members and make a significant donation to the TCF Foundation that will increase the grants we provide to nonprofit organizations in the communities we serve. Our strong capital position and earnings outlook have also allowed us to announce a 100 percent increase to our quarterly common stock dividend and the redemption of our Series B non-cumulative perpetual preferred stock on March 1, 2018.

"These actions, along with the execution of our business strategy in 2017, put us in a position of strength as we enter 2018. With a continued focus on our four strategic pillars and enhanced capital and earnings positions, we are poised to deliver improved returns for our shareholders."

Revenue

                               
Total Revenue Table 2
        Change      
(Dollars in thousands) 4Q 3Q 4Q 4Q17 vs   4Q17 vs YTD YTD
2017   2017   2016   3Q17   4Q16   2017   2016   Change
Total interest income $ 270,628 $ 257,605 $ 231,658 5.1 % 16.8 % $ 1,019,057 $ 930,730 9.5 %
Total interest expense 28,768     23,502     20,212   22.4 42.3 93,819     82,624   13.5
Net interest income 241,860     234,103     211,446   3.3 14.4 925,238     848,106   9.1
Non-interest income:
Fees and service charges 33,267 34,605 35,132 (3.9 ) (5.3 ) 131,887 137,664 (4.2 )
Card revenue 14,251 14,177 13,689 0.5 4.1 55,732 54,882 1.5
ATM revenue 4,654     5,234     4,806   (11.1 ) (3.2 ) 19,624     20,445   (4.0 )
Subtotal 52,172 54,016 53,627 (3.4 ) (2.7 ) 207,243 212,991 (2.7 )
Gains on sales of auto loans, net 2,216 1,145 N.M. 93.5 5,460 34,832 (84.3 )
Gains on sales of consumer real estate loans, net 11,407 8,049 16,676 41.7 (31.6 ) 37,327 50,427 (26.0 )
Servicing fee income 9,000     9,966     11,404   (9.7 ) (21.1 ) 41,347     40,182   2.9
Subtotal 22,623 18,015 29,225 25.6 (22.6 ) 84,134 125,441 (32.9 )
Leasing and equipment finance 42,831 34,080 31,316 25.7 36.8 145,039 119,166 21.7
Other 3,218     2,930     1,365   9.8 135.8 11,646     8,883   31.1
Fees and other revenue 120,844 109,041 115,533 10.8 4.6 448,062 466,481 (3.9 )
Gains (losses) on securities, net 48     189     135   (74.6 ) (64.4 ) 237     (581 ) N.M.
Total non-interest income 120,892     109,230     115,668   10.7 4.5 448,299     465,900   (3.8 )
Total revenue $ 362,752     $ 343,333     $ 327,114   5.7 10.9 $ 1,373,537     $ 1,314,006   4.5
 
Net interest margin(1) 4.57 % 4.61 % 4.30 % (4

) bps

27 bps 4.54 % 4.34 % 20 bps
Total non-interest income as a percentage of total revenue 33.3 31.8 35.4 150 (210 ) 32.6 35.5 (290 )
 
N.M. Not Meaningful.
(1) Annualized.

Net Interest Income

  • Net interest income for the fourth quarter of 2017 increased $30.4 million, or 14.4 percent, from the fourth quarter of 2016 primarily due to an increase in interest income on loans and leases, partially offset by an increase in total interest expense and a decrease in interest income on loans held for sale. Total interest income increased $39.0 million, or 16.8 percent, from the fourth quarter of 2016 primarily due to higher average balances and increased average yields on leasing and equipment finance loans and leases and increased average yields and higher average balances of commercial loans. The increase was also due to increased average yields on auto finance and consumer real estate loans and higher average balances of inventory finance loans. Total interest expense increased $8.6 million, or 42.3 percent, from the fourth quarter of 2016 primarily due to increased average rates and higher average balances of certificates of deposit, as well as higher average balances of long-term borrowings.
  • Net interest income for the fourth quarter of 2017 increased $7.8 million, or 3.3 percent, from the third quarter of 2017 primarily due to an increase in interest income on loans and leases, partially offset by an increase in total interest expense. Total interest income increased $13.0 million, or 5.1 percent, from the third quarter of 2017 primarily due to higher average balances and increased average yields on leasing and equipment finance loans and leases, higher average balances of consumer real estate loans and increased average yields on commercial loans. Total interest expense increased $5.3 million, or 22.4 percent, from the third quarter of 2017 primarily due to increased average rates and higher average balances of certificates of deposit, higher average balances of long-term borrowings and increased average rates on savings accounts.
  • Net interest margin was 4.57 percent for the fourth quarter of 2017, up 27 basis points from the fourth quarter of 2016 and down 4 basis points from the third quarter of 2017. The increase from the fourth quarter of 2016 was due to overall margin expansion on loans and leases, primarily impacted by interest rate increases, partially offset by higher average rates on higher average balances of certificates of deposit. The decrease from the third quarter of 2017 was primarily due to increased rates on higher average balances of certificates of deposits, as well as decreased average yields on inventory finance loans. These decreases were partially offset by higher average balances and increased average yields on leasing and equipment finance loans and leases.

Non-interest Income

  • TCF sold $126.1 million and $516.0 million of auto loans during the fourth quarters of 2017 and 2016, respectively, resulting in net gains in each respective period. TCF sold no auto loans during the third quarter of 2017. The decrease from the fourth quarter of 2016 was due to the strategic shift in auto finance.
  • TCF sold $359.7 million, $520.8 million and $291.0 million of consumer real estate loans during the fourth quarters of 2017 and 2016 and the third quarter of 2017, respectively, resulting in net gains in each respective period.
  • Servicing fee income was $9.0 million on $4.7 billion of average loans and leases serviced for others for the fourth quarter of 2017, compared with $11.4 million on $5.5 billion for the fourth quarter of 2016 and $10.0 million on $5.0 billion for the third quarter of 2017. The decreases from both periods were primarily due to run-off in the auto finance serviced for others portfolio.
  • Leasing and equipment finance non-interest income for the fourth quarter of 2017 increased $11.5 million, or 36.8 percent, from the fourth quarter of 2016 and increased $8.8 million, or 25.7 percent, from the third quarter of 2017. The increase from the fourth quarter of 2016 was primarily due to an increase in operating lease revenue, mainly driven by the acquisition of Equipment Financing & Leasing Corporation ("EFLC") in the second quarter of 2017. The increase from the third quarter of 2017 was primarily due to an increase in operating lease revenue driven by increased originations in the fourth quarter of 2017, as well as an increase in sales-type lease revenue due to customer-driven events.

Loans and Leases

 
     
Period-End and Average Loans and Leases   Table 3
        Percent Change    
4Q 3Q 4Q 4Q17 vs   4Q17 vs YTD YTD Percent
(Dollars in thousands) 2017   2017   2016   3Q17   4Q16   2017   2016   Change
Period-End:
Consumer real estate:
First mortgage lien $ 1,959,387 $ 1,953,199 $ 2,292,596 0.3 % (14.5 )%
Junior lien 2,860,309     2,977,613     2,791,756   (3.9 ) 2.5
Total consumer real estate 4,819,696 4,930,812 5,084,352 (2.3 ) (5.2 )
Commercial 3,561,193 3,489,680 3,286,478 2.0 8.4
Leasing and equipment finance 4,761,661 4,730,931 4,336,310 0.6 9.8
Inventory finance 2,739,754 2,576,077 2,470,175 6.4 10.9
Auto finance 3,199,639 3,240,413 2,647,741 (1.3 ) 20.8
Other 22,517     20,439     18,771   10.2 20.0
Total $ 19,104,460     $ 18,988,352     $ 17,843,827   0.6 7.1
 
Average:
Consumer real estate:
First mortgage lien $ 1,959,067 $ 2,016,049 $ 2,306,421 (2.8 )% (15.1 )% $ 2,081,568 $ 2,424,013 (14.1 )%
Junior lien 3,013,356     2,821,051     2,779,725   6.8 8.4 2,814,276     2,810,116   0.1
Total consumer real estate 4,972,423 4,837,100 5,086,146 2.8 (2.2 ) 4,895,844 5,234,129 (6.5 )
Commercial 3,536,725 3,473,425 3,147,517 1.8 12.4 3,433,276 3,126,881 9.8
Leasing and equipment finance 4,713,015 4,316,434 4,252,543 9.2 10.8 4,399,138 4,106,718 7.1
Inventory finance 2,688,387 2,479,416 2,389,980 8.4 12.5 2,646,500 2,414,684 9.6
Auto finance 3,267,855 3,280,612 2,647,088 (0.4 ) 23.5 3,105,326 2,693,041 15.3
Other 13,007     11,567     9,307   12.4 39.8 11,149     9,538   16.9
Total $ 19,191,412     $ 18,398,554     $ 17,532,581   4.3 9.5 $ 18,491,233     $ 17,584,991   5.2
 
  • Period-end loans and leases were $19.1 billion at December 31, 2017, an increase of $1.3 billion, or 7.1 percent, from December 31, 2016 and consistent with loans and leases at September 30, 2017. Average loans and leases were $19.2 billion for the fourth quarter of 2017, an increase of $1.7 billion, or 9.5 percent, from the fourth quarter of 2016 and an increase of $0.8 billion, or 4.3 percent, from the third quarter of 2017.

    The increases from December 31, 2016 for period-end loans and leases and average loans and leases were primarily due to increases in the auto finance and leasing and equipment finance portfolios, as well as increases in the commercial and inventory finance portfolios, partially offset by a decrease in the consumer real estate portfolio. The increases in the auto finance portfolio were primarily due to the reclassification of loans from held for sale to held for investment during the second quarter of 2017, partially offset by the discontinuation of auto finance loan originations effective December 1, 2017. The increases in the leasing and equipment finance portfolio were primarily attributable to a loan and lease portfolio purchase of $445.5 million on September 29, 2017. The decreases in the consumer real estate portfolio were primarily due to decreases in the first mortgage lien portfolio due to run-off and the non-accrual loan sales in the first and third quarters of 2017 totaling $71.2 million.

    The increase from the third quarter of 2017 for average loans and leases was primarily due to increases in the leasing and equipment finance, inventory finance and consumer real estate loan portfolios. The increase in the leasing and equipment finance portfolio is primarily due to the loan and lease portfolio purchase on September 29, 2017. The increase in the inventory finance portfolio is primarily due to seasonality and the expansion of the number of active dealers. The increase in the consumer real estate portfolio is primarily due to an increase in the junior lien portfolio attributable to the purchase of a loan portfolio of $175.4 million on September 27, 2017.
  • Loan and lease originations were $3.9 billion for the fourth quarter of 2017, a decrease of $0.4 billion, or 8.7 percent, from the fourth quarter of 2016 and consistent with the third quarter of 2017. The decrease from the fourth quarter of 2016 was primarily due to decreased originations in auto finance and consumer real estate, partially offset by higher inventory finance and commercial originations.

Credit Quality

 
Credit Trends Table 4
    Change    
4Q 3Q 2Q 1Q 4Q 4Q17 vs 4Q17 vs
(Dollars in thousands) 2017 2017 2017 2017 2016   3Q17   4Q16  
Over 60-day delinquencies as a percentage of period-end loans and leases(1) 0.12 % 0.13 % 0.11 % 0.09 % 0.12 % (1

) bps

bps
Net charge-offs as a percentage of average loans and leases(2), (3), (4) 0.38 0.18 0.28 0.11 0.27 20 11
Non-accrual loans and leases and other real estate owned $ 136,807 $ 146,024 $ 158,000 $ 170,940 $ 228,242

(6.3

)%

(40.1

)%

Provision for credit losses 22,259 14,545 19,446 12,193 19,888 53.0 11.9
 
(1) Excludes non-accrual loans and leases.
(2) Annualized.
(3) Excluding the $4.6 million recovery from the consumer real estate non-accrual loan sale, net charge-offs as a percentage of average loans and leases was 0.28% for 3Q 2017.
(4) Excluding the $8.7 million recovery from the consumer real estate non-accrual loan sale, net charge-offs as a percentage of average loans and leases was 0.31% for 1Q 2017.
  • The over 60-day delinquency rate, excluding non-accrual loans and leases, was 0.12 percent at December 31, 2017, consistent with the rate at December 31, 2016 and down 1 basis point from the September 30, 2017 rate. Delinquencies improved in the consumer real estate portfolio from December 31, 2016, however this improvement was offset by higher delinquencies in the auto finance and leasing and equipment finance portfolios. The decrease from September 30, 2017 was primarily due to improved delinquencies in the consumer real estate portfolio, partially offset by higher delinquencies in the auto finance portfolio.
  • The net charge-off rate was 0.38 percent for the fourth quarter of 2017, up 11 basis points from the fourth quarter of 2016 and up 20 basis points from the third quarter of 2017. The increase from the fourth quarter of 2016 was primarily due to increased net charge-offs in the leasing and equipment finance and auto finance portfolios, partially offset by decreased net charge-offs in the consumer real estate portfolio. The increase from the third quarter of 2017 was primarily due to a $4.6 million recovery of previous charge-offs related to the consumer real estate non-accrual loans that were sold in the third quarter of 2017 and increased net charge-offs in the leasing and equipment finance and auto finance portfolios.
  • Non-accrual loans and leases and other real estate owned were $136.8 million at December 31, 2017, a decrease of $91.4 million, or 40.1 percent, from December 31, 2016 and a decrease of $9.2 million, or 6.3 percent, from September 30, 2017. Non-accrual loans and leases were $118.6 million at December 31, 2017, a decrease of $62.9 million, or 34.6 percent, from December 31, 2016 and a decrease of $1.0 million, or 0.9 percent, from September 30, 2017. The decrease from December 31, 2016 was primarily due to the consumer real estate non-accrual loan sales in the first and third quarters of 2017, totaling $71.2 million, partially offset by an increase in non-accrual loans and leases in the leasing and equipment finance portfolio. The decrease from September 30, 2017 was primarily due to a decrease in non-accrual loans in the commercial portfolio, partially offset by an increase in non-accrual loans in the consumer real estate portfolio. Other real estate owned was $18.2 million at December 31, 2017, a decrease of $28.6 million, or 61.1 percent, from December 31, 2016 and a decrease of $8.2 million, or 31.0 percent, from September 30, 2017. The decrease from December 31, 2016 was primarily due to sales of consumer real estate properties outpacing additions and sales of commercial real estate properties. The decrease from September 30, 2017 was primarily due to sales of commercial real estate properties and sales of consumer real estate properties outpacing additions.
  • Provision for credit losses was $22.3 million for the fourth quarter of 2017, an increase of $2.4 million, or 11.9 percent, from the fourth quarter of 2016 and an increase of $7.7 million, or 53.0 percent, from the third quarter of 2017. The increase from the fourth quarter of 2016 was primarily due to increased net charge-offs in the leasing and equipment finance portfolio. The increase from the third quarter of 2017 was primarily due to increased reserve requirements and increased net charge-offs in the consumer real estate portfolio mainly driven by the recovery of $4.6 million in the third quarter of 2017 on previous charge-offs related to the consumer real estate non-accrual loans that were sold.

Deposits

   
Average Deposits Table 5
        Change    
4Q 3Q 4Q 4Q17 vs   4Q17 vs YTD YTD
(Dollars in thousands) 2017   2017   2016   3Q17   4Q16   2017   2016   Change
 
Checking $ 6,098,522 $ 6,046,372 $ 5,759,806 0.9 % 5.9 % $ 6,018,415 $ 5,688,690 5.8 %
Savings 5,154,216 4,859,973 4,681,662 6.1 10.1 4,903,505 4,689,543 4.6
Money market 1,854,442 2,106,814 2,429,239 (12.0 ) (23.7 ) 2,140,553 2,488,977 (14.0 )
Certificates of deposit 5,032,085     4,636,007     4,198,190   8.5 19.9 4,495,062     4,229,247   6.3
Total average deposits $ 18,139,265     $ 17,649,166     $ 17,068,897   2.8 6.3 $ 17,557,535     $ 17,096,457   2.7
 
Average interest rate on deposits(1) 0.46 % 0.38 % 0.35 % 8 bps 11 bps 0.38 % 0.36 % 2 bps
 
(1) Annualized.
  • Total average deposits for the fourth quarter of 2017 increased $1.1 billion, or 6.3 percent, from the fourth quarter of 2016 and increased $490.1 million, or 2.8 percent, from the third quarter of 2017. The increases from both periods were primarily due to growth in average certificates of deposit, savings balances and checking balances, partially offset by a decrease in money market balances.
  • The average interest rate on deposits for the fourth quarter of 2017 was 0.46 percent, up 11 basis points from the fourth quarter of 2016 and up 8 basis points from the third quarter of 2017. The increases from both periods were primarily due to increased average interest rates resulting from promotions for certificates of deposit and savings accounts. The increase from the fourth quarter of 2016 was partially offset by decreased average interest rates on money market balances.

Non-interest Expense

   
Non-interest Expense Table 6
        Change    
4Q 3Q 4Q 4Q17 vs   4Q17 vs YTD YTD
(Dollars in thousands) 2017   2017   2016   3Q17   4Q16   2017   2016   Change
 
Compensation and employee benefits $ 127,713 $ 115,127 $ 115,001 10.9 % 11.1 % $ 483,235 $ 474,722 1.8 %
Occupancy and equipment 39,578 38,766 38,150 2.1 3.7 156,909 149,980 4.6
Other 158,936     61,408     59,235   158.8 168.3 345,456     231,420   49.3
Subtotal 326,227 215,301 212,386 51.5 53.6 985,600 856,122 15.1
Operating lease depreciation 16,497 15,696 10,906 5.1 51.3 55,901 40,359 38.5
Foreclosed real estate and repossessed assets, net 4,739 3,829 1,889 23.8 150.9 17,756 13,187 34.6
Other credit costs, net 343     209     178   64.1 92.7 677     219   N.M.
Total non-interest expense $ 347,806     $ 235,035     $ 225,359   48.0 54.3 $ 1,059,934     $ 909,887   16.5
 
Efficiency ratio 95.88 % 68.46 % 68.89 % 2,742 bps 2,699 bps 77.17 % 69.25 % 792 bps
 
N.M. Not Meaningful.                                
  • Non-interest expense for the fourth quarter of 2017 increased $122.4 million, or 54.3 percent, from the fourth quarter of 2016 and increased $112.8 million, or 48.0 percent, from the third quarter of 2017. The increases from both periods were primarily due to increases in other non-interest expense and compensation and employee benefits. The increase from the fourth quarter of 2016 was also due to increases in operating lease depreciation and foreclosed real estate and repossessed assets expense.
  • Compensation and employee benefits expense increased $12.7 million, or 11.1 percent, from the fourth quarter of 2016 and increased $12.6 million, or 10.9 percent, from the third quarter of 2017. The increases from both periods were primarily due to higher incentive compensation and one-time employee bonuses, partially offset by reduced headcount in auto finance.
  • Other non-interest expense increased $99.7 million, or 168.3 percent, from the fourth quarter of 2016 and increased $97.5 million, or 158.8 percent, from the third quarter of 2017. The increases from both periods were primarily due to charges related to the discontinuation of auto finance loan originations, including goodwill and other intangible assets impairment charges of $73.4 million and severance, asset impairment and lease termination write-offs expenses of $14.8 million, as well as the donation to TCF Foundation of $5.0 million.
  • Operating lease depreciation increased $5.6 million, or 51.3 percent, from the fourth quarter of 2016 primarily due to an increase in leasing and equipment finance operating lease revenue related to the acquisition of EFLC.
  • Net expenses related to foreclosed real estate and repossessed assets increased $2.9 million, or 150.9 percent, from the fourth quarter of 2016 primarily due to lower gains on sales of commercial properties and higher repossessed assets expense attributable to auto finance, partially offset by lower operating expenses primarily due to maintaining fewer consumer real estate properties.

Income Tax Expense (Benefit)

  • The Company’s income tax benefit for the fourth quarter of 2017 was $111.0 million, compared with income tax expense of $29.8 million for the fourth quarter of 2016 and $30.7 million for the third quarter of 2017. The income tax benefit for the fourth quarter of 2017 was impacted by an estimated net tax benefit of $130.7 million primarily resulting from the re-measurement of the Company's estimated net deferred tax liability as a result of the enactment of Tax Reform.

Capital

   
Capital Information Table 7
  At Dec. 31, At Dec. 31,
(Dollars in thousands, except per-share data) 2017 2016
Total equity $ 2,680,584 $ 2,444,645
Book value per common share 13.96 12.66
Tangible book value per common share(1) 12.92 11.33
Common equity to assets 10.42 % 10.09 %
Tangible common equity to tangible assets(1) 9.72 9.13
Capital accumulation rate(2) 13.81 8.59
 
At Dec. 31, At Dec. 31,
Regulatory Capital: 2017 (3) 2016
Common equity Tier 1 capital $ 2,242,410 $ 1,970,323
Tier 1 capital 2,522,178 2,248,221
Total capital 2,889,323 2,635,925
 
Regulatory Capital Ratios:
Common equity Tier 1 capital ratio 10.79 % 10.24 %
Tier 1 risk-based capital ratio 12.14 11.68
Total risk-based capital ratio 13.90 13.69
Tier 1 leverage ratio 11.12 10.73
 
(1) See "Reconciliation of GAAP to Non-GAAP Financial Measures" table.
(2) Calculated as the change in annualized year-to-date common equity Tier 1 capital as a percentage of prior year-end common equity Tier 1 capital.
(3) The regulatory capital ratios for 4Q 2017 are preliminary pending completion and filing of the Company's regulatory reports.
  • TCF maintained strong capital ratios as the Company accumulated capital through earnings as well as the impact of Tax Reform.
  • TCF repurchased 446,464 shares of its common stock during the fourth quarter of 2017 at an average cost of $20.51 per share under its share repurchase program. TCF has the ability to purchase an additional $140.8 million in aggregate value of shares of TCF's common stock in its stock repurchase program authorized by its Board of Directors on November 27, 2017.
  • Effective October 16, 2017, TCF redeemed all outstanding shares of its Series A non-cumulative perpetual preferred stock and related depositary shares for $172.5 million using cash on hand and the net proceeds from the offering on September 14, 2017 of its Series C non-cumulative perpetual preferred stock and related depositary shares.
  • On January 30, 2018, TCF's Board of Directors declared a regular quarterly cash dividend of 15 cents per common share, an increase of 100.0 percent, payable on March 1, 2018, to stockholders of record at the close of business on February 15, 2018. TCF also declared dividends on the 6.45% Series B and 5.70% Series C non-cumulative perpetual preferred stock, both payable on March 1, 2018, to stockholders of record at the close of business on February 15, 2018.
  • On January 30, 2018, TCF's Board of Directors approved the redemption of all outstanding shares of TCF's 6.45% Series B non-cumulative perpetual preferred stock on March 1, 2018.

Webcast Information

A live webcast of TCF's conference call to discuss the fourth quarter earnings will be hosted at TCF's website, http://ir.tcfbank.com , on January 30, 2018 at 9:00 a.m. CST. A slide presentation for the call will be available on the website prior to the call. Additionally, the webcast will be available for replay on TCF's website after the conference call. The website also includes free access to company news releases, TCF's annual report, investor presentations and SEC filings.

 

TCF is a Wayzata, Minnesota-based national bank holding company. As of December 31, 2017, TCF had $23.0 billion in total assets and 320 bank branches in Illinois, Minnesota, Michigan, Colorado, Wisconsin, Arizona and South Dakota providing retail and commercial banking services. TCF, through its subsidiaries, also conducts commercial leasing and equipment finance business in all 50 states and commercial inventory finance business in all 50 states and Canada. For more information about TCF, please visit http://ir.tcfbank.com.

Cautionary Statements for Purposes of the Safe Harbor Provisions of the Securities Litigation Reform Act

Any statements contained in this earnings release regarding the outlook for the Company's businesses and their respective markets, such as projections of future performance, targets, guidance, statements of the Company's plans and objectives, forecasts of market trends and other matters, are forward-looking statements based on the Company's assumptions and beliefs. Such statements may be identified by such words or phrases as "will likely result," "are expected to," "will continue," "outlook," "will benefit," "is anticipated," "estimate," "project," "management believes" or similar expressions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those discussed in such statements and no assurance can be given that the results in any forward-looking statement will be achieved. For these statements, TCF claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Any forward-looking statement speaks only as of the date on which it is made, and we disclaim any obligation to subsequently revise any forward-looking statement to reflect events or circumstances after such date or to reflect the occurrence of anticipated or unanticipated events.

Certain factors could cause the Company's future results to differ materially from those expressed or implied in any forward-looking statements contained herein. These factors include the factors discussed in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2016 under the heading "Risk Factors," the factors discussed below and any other cautionary statements, written or oral, which may be made or referred to in connection with any such forward-looking statements. Since it is not possible to foresee all such factors, these factors should not be considered as complete or exhaustive.

Adverse Economic or Business Conditions; Competitive Conditions; Credit and Other Risks.  Deterioration in general economic and banking industry conditions, including those arising from government shutdowns, defaults, anticipated defaults or rating agency downgrades of sovereign debt (including debt of the U.S.), or increases in unemployment; adverse economic, business and competitive developments such as shrinking interest margins, reduced demand for financial services and loan and lease products, deposit outflows, increased deposit costs due to competition for deposit growth and evolving payment system developments, deposit account attrition or an inability to increase the number of deposit accounts; customers completing financial transactions without using a bank; adverse changes in credit quality and other risks posed by TCF's loan, lease, investment, securities held to maturity and securities available for sale portfolios, including declines in commercial or residential real estate values, changes in the allowance for loan and lease losses dictated by new market conditions or regulatory requirements, or the inability of home equity line borrowers to make increased payments caused by increased interest rates or amortization of principal; deviations from estimates of prepayment rates and fluctuations in interest rates that result in decreases in the value of assets such as interest-only strips that arise in connection with TCF's loan sales activity; interest rate risks resulting from fluctuations in prevailing interest rates or other factors that result in a mismatch between yields earned on TCF's interest-earning assets and the rates paid on its deposits and borrowings; foreign currency exchange risks; counterparty risk, including the risk of defaults by our counterparties or diminished availability of counterparties who satisfy our credit quality requirements; decreases in demand for the types of equipment that TCF leases or finances; the effect of any negative publicity; the effects of man-made and natural disasters, including fires, floods, tornadoes, hurricanes, acts of terrorism, civil disturbances and environmental damage, which may negatively affect our operations and/or our customers.

Legislative and Regulatory Requirements.  New consumer protection and supervisory requirements and regulations, including those resulting from action by the Consumer Financial Protection Bureau ("CFPB") and changes in the scope of Federal preemption of state laws that could be applied to national banks and their subsidiaries; the imposition of requirements that adversely impact TCF's deposit, lending, loan collection and other business activities such as mortgage foreclosure moratorium laws, further regulation of financial institution campus banking programs, restrictions on arbitration, or new restrictions on loan and lease products; changes affecting customer account charges and fee income, including changes to interchange rates; regulatory actions or changes in customer opt-in preferences with respect to overdrafts, which may have an adverse impact on TCF; governmental regulations or judicial actions affecting the security interests of creditors; deficiencies in TCF's compliance programs, including under the Bank Secrecy Act in past or future periods, which may result in regulatory enforcement action including monetary penalties; increased health care costs including those resulting from health care reform; regulatory criticism and resulting enforcement actions or other adverse consequences such as increased capital requirements, higher deposit insurance assessments or monetary damages or penalties; heightened regulatory practices, requirements or expectations, including, but not limited to, requirements related to enterprise risk management, the Bank Secrecy Act and anti-money laundering compliance activity.

Earnings/Capital Risks and Constraints, Liquidity Risks. Limitations on TCF's ability to carry out its share repurchase program, pay dividends or increase dividends because of financial performance deterioration, regulatory restrictions or limitations; increased deposit insurance premiums, special assessments or other costs related to adverse conditions in the banking industry; the impact on banks of regulatory reform, including additional capital, leverage, liquidity and risk management requirements or changes in the composition of qualifying regulatory capital; adverse changes in securities markets directly or indirectly affecting TCF's ability to sell assets or to fund its operations; diminished unsecured borrowing capacity resulting from TCF credit rating downgrades or unfavorable conditions in the credit markets that restrict or limit various funding sources; costs associated with new regulatory requirements or interpretive guidance including those relating to liquidity; uncertainties relating to future retail deposit account changes, including limitations on TCF's ability to predict customer behavior and the impact on TCF's fee revenues.

Branching Risk; Growth Risks.  Adverse developments affecting TCF's supermarket banking relationships or either of the primary supermarket chains in which TCF maintains supermarket branches; costs related to closing underperforming branches; inability to timely close underperforming branches due to long-term lease obligations; slower than anticipated growth in existing or acquired businesses; inability to successfully execute on TCF's growth strategy through acquisitions or expanding existing business relationships; failure to expand or diversify TCF's balance sheet through new or expanded programs or opportunities; failure to effectuate, and risks of claims related to, sales of loans; risks related to new product additions and addition of distribution channels (or entry into new markets) for existing products.

Technological and Operational Matters.  Technological or operational difficulties, loss or theft of information, cyber-attacks and other security breaches, counterparty failures and the possibility that deposit account losses (fraudulent checks, etc.) may increase; failure to keep pace with technological change, such as by failing to develop and maintain technology necessary to satisfy customer demands, costs and possible disruptions related to upgrading systems; the failure to attract and retain key employees.

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

Accounting, Audit, Tax and Insurance Matters. Changes in accounting standards or interpretations of existing standards; federal or state monetary, fiscal or tax policies, including the impact of the Tax Cuts and Jobs Act tax reform legislation and adoption of federal or state legislation that would increase federal or state taxes; ineffective internal controls; adverse federal, state or foreign tax assessments or findings in tax audits; lack of or inadequate insurance coverage for claims against TCF; potential for claims and legal action related to TCF's fiduciary responsibilities.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per-share data)
(Unaudited)
       
Quarter Ended December 31, Change
2017 2016 $ %
Interest income:
Loans and leases $ 256,633 $ 210,848 $ 45,785 21.7 %
Securities available for sale 8,760 7,553 1,207 16.0
Securities held to maturity 1,048 1,165 (117 ) (10.0 )
Loans held for sale and other 4,187   12,092   (7,905 ) (65.4 )
Total interest income 270,628   231,658   38,970   16.8
Interest expense:
Deposits 20,846 15,053 5,793 38.5
Borrowings 7,922   5,159   2,763   53.6
Total interest expense 28,768   20,212   8,556   42.3
Net interest income 241,860 211,446 30,414 14.4
Provision for credit losses 22,259   19,888   2,371   11.9
Net interest income after provision for credit losses 219,601   191,558   28,043   14.6
Non-interest income:
Fees and service charges 33,267 35,132 (1,865 ) (5.3 )
Card revenue 14,251 13,689 562 4.1
ATM revenue 4,654   4,806   (152 ) (3.2 )
Subtotal 52,172 53,627 (1,455 ) (2.7 )
Gains on sales of auto loans, net 2,216 1,145 1,071 93.5
Gains on sales of consumer real estate loans, net 11,407 16,676 (5,269 ) (31.6 )
Servicing fee income 9,000   11,404   (2,404 ) (21.1 )
Subtotal 22,623 29,225 (6,602 ) (22.6 )
Leasing and equipment finance 42,831 31,316 11,515 36.8
Other 3,218   1,365   1,853   135.8
Fees and other revenue 120,844 115,533 5,311 4.6
Gains (losses) on securities, net 48   135   (87 ) (64.4 )
Total non-interest income 120,892   115,668   5,224   4.5
Non-interest expense:
Compensation and employee benefits 127,713 115,001 12,712 11.1
Occupancy and equipment 39,578 38,150 1,428 3.7
Other 158,936   59,235   99,701   168.3
Subtotal 326,227 212,386 113,841 53.6
Operating lease depreciation 16,497 10,906 5,591 51.3
Foreclosed real estate and repossessed assets, net 4,739 1,889 2,850 150.9
Other credit costs, net 343   178   165   92.7
Total non-interest expense 347,806   225,359   122,447   54.3
Income (loss) before income tax expense (benefit) (7,313 ) 81,867 (89,180 ) N.M.
Income tax expense (benefit) (110,965 ) 29,762   (140,727 ) N.M.
Income after income tax expense (benefit) 103,652 52,105 51,547 98.9
Income attributable to non-controlling interest 2,253   2,013   240   11.9
Net income attributable to TCF Financial Corporation 101,399 50,092 51,307 102.4
Preferred stock dividends 3,746   4,847   (1,101 ) (22.7 )
Net income available to common stockholders $ 97,653   $ 45,245   $ 52,408   115.8
 
Earnings per common share:
Basic $ 0.58 $ 0.27 $ 0.31 114.8 %
Diluted 0.57 0.27 0.30 111.1
 
Dividends declared per common share $ 0.075 $ 0.075 $ %
 
Average common and common equivalent shares
outstanding (in thousands):
Basic 169,233 167,412 1,821 1.1 %
Diluted 170,069 168,049 2,020 1.2
 

N.M. Not Meaningful.

 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per-share data)
(Unaudited)
       
Year Ended December 31, Change
2017 2016 $ %
Interest income:
Loans and leases $ 954,246 $ 850,546 $ 103,700 12.2 %
Securities available for sale 33,278 26,573 6,705 25.2
Securities held to maturity 4,436 4,649 (213 ) (4.6 )
Loans held for sale and other 27,097   48,962   (21,865 ) (44.7 )
Total interest income 1,019,057   930,730   88,327   9.5
Interest expense:
Deposits 66,012 61,788 4,224 6.8
Borrowings 27,807   20,836   6,971   33.5
Total interest expense 93,819   82,624   11,195   13.5
Net interest income 925,238 848,106 77,132 9.1
Provision for credit losses 68,443   65,874   2,569   3.9
Net interest income after provision for credit losses 856,795   782,232   74,563   9.5
Non-interest income:
Fees and service charges 131,887 137,664 (5,777 ) (4.2 )
Card revenue 55,732 54,882 850 1.5
ATM revenue 19,624   20,445   (821 ) (4.0 )
Subtotal 207,243 212,991 (5,748 ) (2.7 )
Gains on sales of auto loans, net 5,460 34,832 (29,372 ) (84.3 )
Gains on sales of consumer real estate loans, net 37,327 50,427 (13,100 ) (26.0 )
Servicing fee income 41,347   40,182   1,165   2.9
Subtotal 84,134 125,441 (41,307 ) (32.9 )
Leasing and equipment finance 145,039 119,166 25,873 21.7
Other 11,646   8,883   2,763   31.1
Fees and other revenue 448,062 466,481 (18,419 ) (3.9 )
Gains (losses) on securities, net 237   (581 ) 818   N.M.
Total non-interest income 448,299   465,900   (17,601 ) (3.8 )
Non-interest expense:
Compensation and employee benefits 483,235 474,722 8,513 1.8
Occupancy and equipment 156,909 149,980 6,929 4.6
Other 345,456   231,420   114,036   49.3
Subtotal 985,600 856,122 129,478 15.1
Operating lease depreciation 55,901 40,359 15,542 38.5
Foreclosed real estate and repossessed assets, net 17,756 13,187 4,569 34.6
Other credit costs, net 677   219   458   N.M.
Total non-interest expense 1,059,934   909,887   150,047   16.5
Income before income tax expense (benefit) 245,160 338,245 (93,085 ) (27.5 )
Income tax expense (benefit) (33,624 ) 116,528   (150,152 ) N.M.
Income after income tax expense (benefit) 278,784 221,717 57,067 25.7
Income attributable to non-controlling interest 10,147   9,593   554   5.8
Net income attributable to TCF Financial Corporation 268,637 212,124 56,513 26.6
Preferred stock dividends 19,904 19,388 516 2.7
Impact of preferred stock redemption 5,779     5,779   N.M.
Net income available to common stockholders $ 242,954   $ 192,736   $ 50,218   26.1
 
Earnings per common share:
Basic $ 1.44 $ 1.15 $ 0.29 25.2 %
Diluted 1.44 1.15 0.29 25.2
 
Dividends declared per common share $ 0.30 $ 0.30 $ %
 
Average common and common equivalent shares
outstanding (in thousands):
Basic 168,680 167,220 1,460 0.9 %
Diluted 169,089 167,807 1,282 0.8
 

N.M. Not Meaningful.

 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except per-share data)
(Unaudited)
       
At Dec. 31, At Dec. 31, Change
2017 2016 $ %
ASSETS:
Cash and due from banks $ 621,782 $ 609,603 $ 12,179 2.0 %
Investments 82,644 74,714 7,930 10.6
Securities held to maturity 161,576 181,314 (19,738 ) (10.9 )
Securities available for sale 1,709,018 1,423,435 285,583 20.1
Loans and leases held for sale 134,862 268,832 (133,970 ) (49.8 )
Loans and leases:
Consumer real estate:
First mortgage lien 1,959,387 2,292,596 (333,209 ) (14.5 )
Junior lien 2,860,309   2,791,756   68,553   2.5
Total consumer real estate 4,819,696 5,084,352 (264,656 ) (5.2 )
Commercial 3,561,193 3,286,478 274,715 8.4
Leasing and equipment finance 4,761,661 4,336,310 425,351 9.8
Inventory finance 2,739,754 2,470,175 269,579 10.9
Auto finance 3,199,639 2,647,741 551,898 20.8
Other 22,517   18,771   3,746   20.0
Total loans and leases 19,104,460 17,843,827 1,260,633 7.1
Allowance for loan and lease losses (171,041 ) (160,269 ) (10,772 ) (6.7 )
Net loans and leases 18,933,419 17,683,558 1,249,861 7.1
Premises and equipment, net 421,549 418,372 3,177 0.8
Goodwill, net 154,757 225,640 (70,883 ) (31.4 )
Other assets 782,552   555,858   226,694   40.8
Total assets $ 23,002,159   $ 21,441,326   $ 1,560,833   7.3
 
LIABILITIES AND EQUITY:
Deposits:
Checking $ 6,300,127 $ 6,009,151 $ 290,976 4.8 %
Savings 5,287,606 4,719,481 568,125 12.0
Money market 1,764,998 2,421,467 (656,469 ) (27.1 )
Certificates of deposit 4,982,271   4,092,423   889,848   21.7
Total deposits 18,335,002   17,242,522   1,092,480   6.3
Short-term borrowings 4,391 (4,391 ) (100.0 )
Long-term borrowings 1,249,449   1,073,181   176,268   16.4
Total borrowings 1,249,449 1,077,572 171,877 16.0
Accrued expenses and other liabilities 737,124   676,587   60,537   8.9
Total liabilities 20,321,575   18,996,681   1,324,894   7.0
Total TCF Financial Corporation stockholders' equity 2,662,757 2,427,483 235,274 9.7
Non-controlling interest in subsidiaries 17,827   17,162   665   3.9
Total equity 2,680,584   2,444,645   235,939   9.7
Total liabilities and equity $ 23,002,159   $ 21,441,326   $ 1,560,833   7.3
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
SUMMARY OF CREDIT QUALITY DATA
(Dollars in thousands)
(Unaudited)
 

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

           
At At At At At Change from
Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30, Dec. 31,
2017 2017 2017 2017 2016 2017 2016
Consumer real estate:
First mortgage lien 0.25 % 0.32 % 0.31 % 0.28 % 0.40 % (7 ) bps (15 ) bps
Junior lien 0.04 0.05 0.05 0.05 0.05 (1 ) (1 )
Total consumer real estate 0.13 0.15 0.16 0.15 0.21 (2 ) (8 )
Commercial
Leasing and equipment finance 0.14 0.15 0.14 0.12 0.10 (1 ) 4
Inventory finance 0.01 0.01 0.01 1
Auto finance 0.28 0.25 0.20 0.13 0.23 3 5
Other 0.04 0.07 0.30 0.05 0.10 (3 ) (6 )
Subtotal 0.11 0.12 0.11 0.09 0.12 (1 ) (1 )
Portfolios acquired with deteriorated credit quality 13.18 9.42 376 1,318
Total delinquencies 0.12 0.13 0.11 0.09 0.12 (1 )
 

(1) Excludes non-accrual loans and leases.

 

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

   
Quarter Ended (1) Change from
Dec. 31,   Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31, Sep. 30, Dec. 31,
2017 2017 2017 2017 2016 2017 2016
Consumer real estate:
First mortgage lien 0.18 % (0.16 )% 0.15 % (0.18 )% 0.26 % 34 bps (8 ) bps
Junior lien (0.03 ) (0.38 ) 0.05 (0.89 ) 0.08 35 (11 )
Total consumer real estate 0.05 (0.29 ) 0.09 (0.58 ) 0.17 34 (12 )
Commercial (0.04 ) (0.02 ) 0.29 0.32 0.01 (2 ) (5 )
Leasing and equipment finance 0.41 0.10 0.14 0.13 0.10 31 31
Inventory finance 0.15 0.08 0.09 0.01 0.07 7 8
Auto finance 1.36 1.13 0.83 1.12 1.09 23 27
Other N.M. N.M. N.M. N.M. N.M. N.M. N.M.
Total 0.38 0.18 0.28 0.11 0.27 20 11
 
N.M. Not Meaningful.
(1) Annualized.
 

Non-Accrual Loans and Leases Rollforward

             
Quarter Ended Change from
Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30, Dec. 31,
2017 2017 2017 2017 2016 2017 2016
Balance, beginning of period $ 119,619 $ 129,273 $ 138,981 $ 181,445 $ 190,047 $ (9,654 ) $ (70,428 )
Additions 32,384 39,094 23,667 34,661 32,398 (6,710 ) (14 )
Charge-offs (7,636 ) (3,916 ) (6,819 ) (6,412 ) (4,158 ) (3,720 ) (3,478 )
Transfers to other assets (9,551 ) (7,308 ) (10,870 ) (8,786 ) (17,118 ) (2,243 ) 7,567
Return to accrual status (2,187 ) (3,559 ) (3,077 ) (2,591 ) (4,546 ) 1,372 2,359
Payments received (14,412 ) (7,993 ) (11,647 ) (10,732 ) (14,351 ) (6,419 ) (61 )
Sales (25,924 ) (892 ) (49,916 ) (2,764 ) 25,924 2,764
Other, net 365   (48 ) (70 ) 1,312   1,937   413   (1,572 )
Balance, end of period $ 118,582   $ 119,619   $ 129,273   $ 138,981   $ 181,445   $ (1,037 ) $ (62,863 )
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
SUMMARY OF CREDIT QUALITY DATA, CONTINUED
(Dollars in thousands)
(Unaudited)
 

Other Real Estate Owned Rollforward

             
Quarter Ended Change from
Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30, Dec. 31,
2017 2017 2017 2017 2016 2017 2016
Balance, beginning of period $ 26,405 $ 28,727 $ 31,959 $ 46,797 $ 33,712 $ (2,322 ) $ (7,307 )
Transferred in 5,638 5,685 8,638 7,212 13,865 (47 ) (8,227 )
Sales (13,395 ) (9,204 ) (11,243 ) (14,982 ) (8,655 ) (4,191 ) (4,740 )
Writedowns (1,024 ) (1,345 ) (1,674 ) (1,538 ) (1,281 ) 321 257
Other, net(1) 601   2,542   1,047   (5,530 ) 9,156   (1,941 ) (8,555 )
Balance, end of period $ 18,225   $ 26,405   $ 28,727   $ 31,959   $ 46,797   $ (8,180 ) $ (28,572 )
 

(1) Includes transfers (to) from premises and equipment.

 

Allowance for Loan and Lease Losses

                   
At At At At At
Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,
2017 2017 2017 2017 2016
% of % of % of % of % of
Balance

 

Portfolio

Balance

 

Portfolio

Balance

 

Portfolio

Balance

 

Portfolio

Balance Portfolio
Consumer real estate $ 47,168 0.98 % $ 47,838 0.97 % $ 52,408 1.10 % $ 53,851 1.16 % $ 59,448 1.17 %
Commercial 37,195 1.04 36,344 1.04 34,669 0.99 33,697 1.00 32,695 0.99
Leasing and equipment finance 22,528 0.47 22,771 0.48 21,922 0.51 21,257 0.50 21,350 0.49
Inventory finance 13,233 0.48 11,978 0.46 12,129 0.48 15,816 0.55 13,932 0.56
Auto finance 50,225 1.57 48,660 1.50 43,893 1.35 35,108 1.26 32,310 1.22
Other 692   3.07 653   3.19 599   3.08 437   2.60 534   2.84
Total $ 171,041   0.90 $ 168,244   0.89 $ 165,620   0.90 $ 160,166   0.89 $ 160,269   0.90
 

Changes in Allowance for Loan and Lease Losses

             
Quarter Ended Change from
Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30, Dec. 31,
2017 2017 2017 2017 2016 2017 2016
Balance, beginning of period $ 168,244 $ 165,620 $ 160,166 $ 160,269 $ 155,841 $ 2,624 $ 12,403
Charge-offs (23,865 ) (17,999 ) (18,326 ) (18,902 ) (16,451 ) (5,866 ) (7,414 )
Recoveries 5,580   9,847   5,412   13,813   4,718   (4,267 ) 862  
Net (charge-offs) recoveries (18,285 ) (8,152 ) (12,914 ) (5,089 ) (11,733 ) (10,133 ) (6,552 )
Provision for credit losses 22,259 14,545 19,446 12,193 19,888 7,714 2,371
Other (1,177 ) (3,769 ) (1,078 ) (7,207 ) (3,727 ) 2,592   2,550  
Balance, end of period $ 171,041   $ 168,244   $ 165,620   $ 160,166   $ 160,269   $ 2,797   $ 10,772  
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Dollars in thousands)
(Unaudited)
           
Quarter Ended December 31,
2017 2016
Average Yields and Average Yields and
Balance Interest (1) Rates (1)(2) Balance Interest (1) Rates (1)(2)
ASSETS:
Investments and other $ 303,958 $ 2,349 3.07 % $ 276,018 $ 2,322 3.35 %
Securities held to maturity 163,080 1,048 2.57 182,177 1,165 2.56
Securities available for sale:(3)
Taxable 831,113 4,675 2.25 791,289 4,400 2.22
Tax-exempt(4) 779,964 6,284 3.22 610,070 4,851 3.18
Loans and leases held for sale 113,501 1,838 6.43 492,457 9,770 7.89
Loans and leases:(5)
Consumer real estate:
Fixed-rate 1,821,240 25,729 5.61 2,169,493 30,367 5.57
Variable- and adjustable-rate 3,151,183   47,290   5.95 2,916,653   39,294   5.36
Total consumer real estate 4,972,423 73,019 5.83 5,086,146 69,661 5.45
Commercial:
Fixed-rate 963,703 13,337 5.49 948,856 11,212 4.70
Variable- and adjustable-rate 2,573,022   30,382   4.68 2,198,661   22,395   4.05
Total commercial 3,536,725 43,719 4.90 3,147,517 33,607 4.25
Leasing and equipment finance 4,713,015 57,722 4.90 4,252,543 47,129 4.43
Inventory finance 2,688,387 40,753 6.01 2,389,980 34,820 5.80
Auto finance 3,267,855 43,109 5.23 2,647,088 26,903 4.04
Other 13,007   157   4.75 9,307   135   5.72
Total loans and leases 19,191,412   258,479   5.35 17,532,581   212,255   4.82
Total interest-earning assets 21,383,028   274,673   5.11 19,884,592   234,763   4.70
Other assets(6) 1,437,126   1,253,002  
Total assets $ 22,820,154   $ 21,137,594  
LIABILITIES AND EQUITY:
Non-interest bearing deposits:
Retail $ 1,938,053 $ 1,773,673
Small business 972,493 926,388
Commercial and custodial 660,300   615,686  
Total non-interest bearing deposits 3,570,846 3,315,747
Interest-bearing deposits:
Checking 2,541,475 114 0.02 2,454,815 85 0.01
Savings 5,140,417 2,284 0.18 4,670,906 429 0.04
Money market 1,854,442 2,242 0.48 2,429,239 3,451 0.57
Certificates of deposit 5,032,085   16,206   1.28 4,198,190   11,088   1.05
Total interest-bearing deposits 14,568,419   20,846   0.57 13,753,150   15,053   0.44
Total deposits 18,139,265   20,846   0.46 17,068,897   15,053   0.35
Borrowings:
Short-term borrowings 3,759 17 1.75 5,063 9 0.77
Long-term borrowings 1,295,268   7,905   2.43 931,720   5,150   2.21
Total borrowings 1,299,027   7,922   2.43 936,783   5,159   2.20
Total interest-bearing liabilities 15,867,446   28,768   0.72 14,689,933   20,212   0.55
Total deposits and borrowings 19,438,292   28,768   0.59 18,005,680 20,212   0.45
Accrued expenses and other liabilities 790,850   695,778  
Total liabilities 20,229,142   18,701,458  
Total TCF Financial Corp. stockholders' equity 2,570,613 2,417,222
Non-controlling interest in subsidiaries 20,399   18,914  
Total equity 2,591,012   2,436,136  
Total liabilities and equity $ 22,820,154   $ 21,137,594  
Net interest income and margin $ 245,905   4.57 $ 214,551   4.30
 
(1) Interest and yields are presented on a fully tax-equivalent basis.
(2) Annualized.
(3) Average balances and yields of securities available for sale are based upon historical amortized cost and exclude equity securities.
(4) The yield on tax-exempt securities available for sale is computed on a tax-equivalent basis using a statutory federal income tax rate of 35% for all periods presented.
(5) Average balances of loans and leases include non-accrual loans and leases and are presented net of unearned income.
(6) Includes leased equipment and related initial direct costs under operating leases of $267.8 million and $157.2 million for the fourth quarters of 2017 and 2016, respectively.
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Dollars in thousands)
(Unaudited)
           
Year Ended December 31,
2017 2016
Average Yields and Average Yields and
Balance Interest (1) Rates (1) Balance Interest (1) Rates (1)
ASSETS:
Investments and other $ 282,507 $ 10,491 3.71 % $ 319,582 $ 9,314 2.91 %
Securities held to maturity 170,006 4,436 2.61 190,863 4,649 2.44
Securities available for sale:(2)
Taxable 823,526 18,382 2.23 719,743 16,238 2.26
Tax-exempt(3) 712,530 22,916 3.22 495,708 15,900 3.21
Loans and leases held for sale 208,678 16,606 7.96 479,401 39,648 8.27
Loans and leases:(4)
Consumer real estate:
Fixed-rate 1,934,395 109,185 5.64 2,285,647 130,753 5.72
Variable- and adjustable-rate 2,961,449   171,671   5.80 2,948,482   156,919   5.32
Total consumer real estate 4,895,844 280,856 5.74 5,234,129 287,672 5.50
Commercial:
Fixed-rate 977,698 47,587 4.87 972,107 47,445 4.88
Variable- and adjustable-rate 2,455,578   111,886   4.56 2,154,774   85,996   3.99
Total commercial 3,433,276 159,473 4.64 3,126,881 133,441 4.27
Leasing and equipment finance 4,399,138 202,508 4.60 4,106,718 183,029 4.46
Inventory finance 2,646,500 164,386 6.21 2,414,684 140,453 5.82
Auto finance 3,105,326 152,974 4.93 2,693,041 110,651 4.11
Other 11,149   571   5.11 9,538   548   5.74
Total loans and leases 18,491,233   960,768   5.20 17,584,991   855,794   4.87
Total interest-earning assets 20,688,480   1,033,599   5.00 19,790,288   941,543   4.76
Other assets(5) 1,363,487   1,285,127  
Total assets $ 22,051,967   $ 21,075,415  
LIABILITIES AND EQUITY:
Non-interest bearing deposits:
Retail $ 1,931,856 $ 1,778,707
Small business 925,890 884,192
Commercial and custodial 634,487   585,611  
Total non-interest bearing deposits 3,492,233 3,248,510
Interest-bearing deposits:
Checking 2,541,407 379 0.01 2,452,206 346 0.01
Savings 4,888,280 4,255 0.09 4,677,517 1,510 0.03
Money market 2,140,553 10,139 0.47 2,488,977 15,114 0.61
Certificates of deposit 4,495,062   51,239   1.14 4,229,247   44,818   1.06
Total interest-bearing deposits 14,065,302   66,012   0.47 13,847,947   61,788   0.45
Total deposits 17,557,535   66,012   0.38 17,096,457   61,788   0.36
Borrowings:
Short-term borrowings 5,267 58 1.10 7,051 51 0.73
Long-term borrowings 1,239,433   27,749   2.24 890,846   20,785   2.33
Total borrowings 1,244,700   27,807   2.23 897,897   20,836   2.32
Total interest-bearing liabilities 15,310,002   93,819   0.61 14,745,844   82,624   0.56
Total deposits and borrowings 18,802,235   93,819   0.50 17,994,354   82,624   0.46
Accrued expenses and other liabilities 713,794   686,360  
Total liabilities 19,516,029   18,680,714  
Total TCF Financial Corp. stockholders' equity 2,513,424 2,373,176
Non-controlling interest in subsidiaries 22,514   21,525  
Total equity 2,535,938   2,394,701  
Total liabilities and equity $ 22,051,967   $ 21,075,415  
Net interest income and margin $ 939,780   4.54 $ 858,919   4.34
 
 
(1) Interest and yields are presented on a fully tax-equivalent basis.
(2) Average balances and yields of securities available for sale are based upon historical amortized cost and exclude equity securities.
(3) The yield on tax-exempt securities available for sale is computed on a tax-equivalent basis using a statutory federal income tax rate of 35% for all periods presented.
(4) Average balances of loans and leases include non-accrual loans and leases and are presented net of unearned income.
(5) Includes leased equipment and related initial direct costs under operating leases of $224.7 million and $140.3 million for the year ended December 31, 2017 and 2016, respectively.
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per-share data)
(Unaudited)
         
Quarter Ended
Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,
2017 2017 2017 2017 2016
Interest income:
Loans and leases $ 256,633 $ 243,973 $ 234,092 $ 219,548 $ 210,848
Securities available for sale 8,760 8,486 8,052 7,980 7,553
Securities held to maturity 1,048 1,073 1,035 1,280 1,165
Loans held for sale and other 4,187   4,073   5,338   13,499   12,092  
Total interest income 270,628   257,605   248,517   242,307   231,658  
Interest expense:
Deposits 20,846 17,015 14,436 13,715 15,053
Borrowings 7,922   6,487   6,920   6,478   5,159  
Total interest expense 28,768   23,502   21,356   20,193   20,212  
Net interest income 241,860 234,103 227,161 222,114 211,446
Provision for credit losses 22,259   14,545   19,446   12,193   19,888  
Net interest income after provision for credit losses 219,601   219,558   207,715   209,921   191,558  
Non-interest income:
Fees and service charges 33,267 34,605 32,733 31,282 35,132
Card revenue 14,251 14,177 14,154 13,150 13,689
ATM revenue 4,654   5,234   5,061   4,675   4,806  
Subtotal 52,172 54,016 51,948 49,107 53,627
Gains on sales of auto loans, net 2,216 380 2,864 1,145
Gains on sales of consumer real estate loans, net 11,407 8,049 8,980 8,891 16,676
Servicing fee income 9,000   9,966   10,730   11,651   11,404  
Subtotal 22,623 18,015 20,090 23,406 29,225
Leasing and equipment finance 42,831 34,080 39,830 28,298 31,316
Other 3,218   2,930   2,795   2,703   1,365  
Fees and other revenue 120,844 109,041 114,663 103,514 115,533
Gains (losses) on securities, net 48   189       135  
Total non-interest income 120,892   109,230   114,663   103,514   115,668  
Non-interest expense:
Compensation and employee benefits 127,713 115,127 115,918 124,477 115,001
Occupancy and equipment 39,578 38,766 38,965 39,600 38,150
Other 158,936   61,408   61,075   64,037   59,235  

Subtotal

326,227 215,301 215,958 228,114 212,386
Operating lease depreciation 16,497 15,696 12,466 11,242 10,906
Foreclosed real estate and repossessed assets, net 4,739 3,829 4,639 4,549 1,889
Other credit costs, net 343   209   24   101   178  
Total non-interest expense 347,806   235,035   233,087   244,006   225,359  
Income (loss) before income tax expense (benefit) (7,313 ) 93,753 89,291 69,429 81,867
Income tax expense (benefit) (110,965 ) 30,704   25,794   20,843   29,762  
Income after income tax expense (benefit) 103,652 63,049 63,497 48,586 52,105
Income attributable to non-controlling interest 2,253   2,521   3,065   2,308   2,013  
Net income attributable to TCF Financial Corporation 101,399 60,528 60,432 46,278 50,092
Preferred stock dividends 3,746 6,464 4,847 4,847 4,847
Impact of preferred stock redemption   5,779        
Net income available to common stockholders $ 97,653   $ 48,285   $ 55,585   $ 41,431   $ 45,245  
 
Earnings per common share:
Basic $ 0.58 $ 0.29 $ 0.33 $ 0.25 $ 0.27
Diluted 0.57 0.29 0.33 0.25 0.27
 
Dividends declared per common share $ 0.075 $ 0.075 $ 0.075 $ 0.075 $ 0.075
 
Financial highlights: (1)
Return on average assets 1.82 % 1.15 % 1.17 % 0.90 % 0.99 %
Return on average common equity 16.95 8.44 9.96 7.64 8.40
Net interest margin 4.57 4.61 4.52 4.46 4.30
 

(1) Annualized.

 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED QUARTERLY AVERAGE BALANCE SHEETS
(In thousands)
(Unaudited)
         

Dec. 31,
2017

Sep. 30,
2017

Jun. 30,
2017

Mar. 31,
2017

Dec. 31,
2016

ASSETS:
Investments and other $ 303,958 $ 279,839 $ 259,548 $ 286,519 $ 276,018
Securities held to maturity 163,080 166,883 172,322 177,939 182,177
Securities available for sale:(1)
Taxable 831,113 825,192 821,744 815,867 791,289
Tax-exempt 779,964 737,859 689,667 640,826 610,070
Loans and leases held for sale 113,501 96,143 165,859 464,301 492,457
Loans and leases:(2)
Consumer real estate:
Fixed-rate 1,821,240 1,872,607 1,963,822 2,083,472 2,169,493
Variable- and adjustable-rate 3,151,183   2,964,493   2,782,296   2,945,529   2,916,653
Total consumer real estate 4,972,423 4,837,100 4,746,118 5,029,001 5,086,146
Commercial:
Fixed-rate 963,703 980,262 966,884 1,000,316 948,856
Variable- and adjustable-rate 2,573,022   2,493,163   2,450,168   2,302,575   2,198,661
Total commercial 3,536,725 3,473,425 3,417,052 3,302,891 3,147,517
Leasing and equipment finance 4,713,015 4,316,434 4,277,376 4,285,944 4,252,543
Inventory finance 2,688,387 2,479,416 2,723,340 2,696,787 2,389,980
Auto finance 3,267,855 3,280,612 3,149,974 2,714,862 2,647,088
Other 13,007   11,567   10,235   9,740   9,307
Total loans and leases 19,191,412   18,398,554   18,324,095   18,039,225   17,532,581
Total interest-earning assets 21,383,028   20,504,470   20,433,235   20,424,677   19,884,592
Other assets(3) 1,437,126   1,434,957   1,315,495   1,263,678   1,253,002
Total assets $ 22,820,154   $ 21,939,427   $ 21,748,730   $ 21,688,355   $ 21,137,594
 
LIABILITIES AND EQUITY:
Non-interest-bearing deposits:
Retail $ 1,938,053 $ 1,940,797 $ 1,967,542 $ 1,880,298 $ 1,773,673
Small business 972,493 937,847 897,391 894,845 926,388
Commercial and custodial 660,300   642,400   608,706   626,081   615,686

Total non-interest bearing deposits

3,570,846 3,521,044 3,473,639 3,401,224 3,315,747
Interest-bearing deposits:
Checking 2,541,475 2,539,211 2,554,563 2,530,281 2,454,815
Savings 5,140,417 4,846,090 4,806,371 4,756,486 4,670,906
Money market 1,854,442 2,106,814 2,221,807 2,385,353 2,429,239
Certificates of deposit 5,032,085   4,636,007   4,266,488   4,033,143   4,198,190
Total interest-bearing deposits 14,568,419   14,128,122   13,849,229   13,705,263   13,753,150
Total deposits 18,139,265   17,649,166   17,322,868   17,106,487   17,068,897
Borrowings:
Short-term borrowings 3,759 6,448 6,230 4,628 5,063
Long-term borrowings 1,295,268   983,004   1,225,022   1,459,053   931,720
Total borrowings 1,299,027   989,452   1,231,252   1,463,681   936,783
Total interest-bearing liabilities 15,867,446   15,117,574   15,080,481   15,168,944   14,689,933
Total deposits and borrowings 19,438,292   18,638,618   18,554,120   18,570,168   18,005,680
Accrued expenses and other liabilities 790,850   723,792   673,740   665,301   695,778
Total liabilities 20,229,142   19,362,410   19,227,860   19,235,469   18,701,458
Total TCF Financial Corporation stockholders' equity 2,570,613 2,554,667 2,494,682 2,431,755 2,417,222
Non-controlling interest in subsidiaries 20,399   22,350   26,188   21,131   18,914
Total equity 2,591,012   2,577,017   2,520,870   2,452,886   2,436,136
Total liabilities and equity $ 22,820,154   $ 21,939,427   $ 21,748,730   $ 21,688,355   $ 21,137,594
 
(1) Average balances of securities available for sale are based upon historical amortized cost and exclude equity securities.
(2) Average balances of loans and leases include non-accrual loans and leases and are presented net of unearned income.
(3) Includes leased equipment and related initial direct costs under operating leases of $267.8 million, $249.0 million, $200.7 million, $180.3 million and $157.2 million for the fourth, third, second and first quarters of 2017, and for the fourth quarter of 2016, respectively.
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED QUARTERLY YIELDS AND RATES (1)(2)
(Unaudited)
         

Dec. 31,
2017

Sep. 30,
2017

Jun. 30,
2017

Mar. 31,
2017

Dec. 31,
2016

ASSETS:
Investments and other 3.07 % 3.80 % 4.20 % 3.88 % 3.35 %
Securities held to maturity 2.57 2.57 2.40 2.88 2.56
Securities available for sale:(3)
Taxable 2.25 2.24 2.16 2.28 2.22
Tax-exempt(4) 3.22 3.22 3.23 3.19 3.18
Loans and leases held for sale 6.43 5.75 6.34 9.39 7.89
Loans and leases:
Consumer real estate:
Fixed-rate 5.61 5.61 5.65 5.70 5.57
Variable- and adjustable rate 5.95 5.91 5.76 5.54 5.36
Total consumer real estate 5.83 5.80 5.72 5.60 5.45
Commercial:
Fixed-rate 5.49 4.62 4.62 4.75 4.70
Variable- and adjustable-rate 4.68 4.76 4.45 4.30 4.05
Total commercial 4.90 4.72 4.50 4.43 4.25
Leasing and equipment finance 4.90 4.53 4.48 4.48 4.43
Inventory finance 6.01 6.71 6.22 5.93 5.80
Auto finance 5.23 5.17 5.01 4.15 4.04
Other 4.75 5.03 5.37 5.44 5.72
Total loans and leases 5.35 5.31 5.15 4.95 4.82
 
Total interest-earning assets 5.11 5.07 4.94 4.86 4.70
 
LIABILITIES:
Interest-bearing deposits:
Checking 0.02 0.02 0.01 0.01 0.01
Savings 0.18 0.08 0.04 0.04 0.04
Money market 0.48 0.47 0.45 0.50 0.57
Certificates of deposit 1.28 1.16 1.07 1.02 1.05
Total interest-bearing deposits 0.57 0.48 0.42 0.41 0.44
Total deposits 0.46 0.38 0.33 0.33 0.35
Borrowings:
Short-term borrowings 1.75 1.33 0.79 0.65 0.77
Long-term borrowings 2.43 2.62 2.26 1.78 2.21
Total borrowings 2.43 2.62 2.25 1.78 2.20
 
Total interest-bearing liabilities 0.72 0.62 0.57 0.54 0.55
 
Net interest margin 4.57 4.61 4.52 4.46 4.30
 
(1) Annualized.
(2) Yields are presented on a fully tax-equivalent basis.
(3) Average yields of securities available for sale are based upon historical amortized cost and exclude equity securities.
(4) The yield on tax-exempt securities available for sale is computed on a tax-equivalent basis using a statutory federal income tax rate of 35% for all periods presented.
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (1)
(Dollars in thousands, except per share data)
(Unaudited)
    At Dec. 31,   At Dec. 31,
2017 2016

Computation of tangible common equity to tangible assets and tangible book value per common share:

Total equity $ 2,680,584 $ 2,444,645
Less: Non-controlling interest in subsidiaries 17,827   17,162  
Total TCF Financial Corporation stockholders' equity 2,662,757 2,427,483
Less: Preferred stock 265,821   263,240  
Total common stockholders' equity (a) 2,396,936 2,164,243
Less:
Goodwill, net 154,757 225,640
Other intangibles, net 23,687   1,738  
Tangible common equity (b) $ 2,218,492   $ 1,936,865  
 
Total assets (c) $ 23,002,159 $ 21,441,326
Less:
Goodwill, net 154,757 225,640
Other intangibles, net 23,687   1,738  
Tangible assets (d) $ 22,823,715   $ 21,213,948  
 
Common stock shares outstanding (e) 171,669,419 170,991,940
 
Common equity to assets (a) / (c) 10.42 % 10.09 %
Tangible common equity to tangible assets (b) / (d) 9.72 % 9.13 %
 
Book value per common share (a) / (e) $ 13.96 $ 12.66
Tangible book value per common share (b) / (e) $ 12.92 $ 11.33
 
    Quarter Ended   Year Ended
Dec. 31,   Sep. 30,   Dec. 31, Dec. 31,   Dec. 31,
2017 2017 2016 2017 2016

Computation of return on average tangible common equity:

Net income available to common stockholders (f) $ 97,653 $ 48,285 $ 45,245 $ 242,954 $ 192,736
Plus: Goodwill impairment 73,041 73,041
Plus: Other intangibles amortization and impairment 1,187 806 290 2,354 1,388
Less: Income tax expense attributable to other intangibles amortization and impairment 530   277   103   1,050   493  
Adjusted net income available to common stockholders (g) $ 171,351   $ 48,814   $ 45,432   $ 317,299   $ 193,631  
 
Average balances:
Total equity $ 2,591,012 $ 2,577,017 $ 2,436,136 $ 2,535,938 $ 2,394,701
Less: Non-controlling interest in subsidiaries 20,399   22,350   18,914   22,514   21,525  
Total TCF Financial Corporation stockholders' equity 2,570,613 2,554,667 2,417,222 2,513,424 2,373,176
Less: Preferred stock 265,821   265,556   263,240   264,474   263,240  
Average total common stockholders' equity (h) 2,304,792 2,289,111 2,153,982 2,248,950 2,109,936
Less:
Goodwill, net 197,734 227,539 225,640 219,144 225,640
Other intangibles, net 21,901   22,279   1,872   12,807   2,414  
Average tangible common equity (i) $ 2,085,157   $ 2,039,293   $ 1,926,470   $ 2,016,999   $ 1,881,882  
 
Return on average common equity(2) (f) / (h) 16.95 % 8.44 % 8.40 % 10.80 % 9.13 %
Return on average tangible common equity(2) (g) / (i) 32.87 % 9.57 % 9.43 % 15.73 % 10.29 %
 
(1) When evaluating capital adequacy and utilization, management considers financial measures such as tangible common equity to tangible assets, tangible book value per common share and return on average tangible common equity. These measures are non-GAAP financial measures and are viewed by management as useful indicators of capital levels available to withstand unexpected market or economic conditions and also provide investors, regulators and other users with information to be viewed in relation to other banking institutions.
(2) Annualized.
 

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TCF Financial Corporation
Media
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