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TCF Reports First Quarter 2021 Results

TCF Financial Corporation (NASDAQ: TCF):

First Quarter 2021 Highlights

  • Quarterly net income of $123.3 million, or $0.79 per diluted share, up 35.0% from the fourth quarter of 2020
  • Adjusted diluted earnings per common share of $0.84(1), up 12.0% from the fourth quarter of 2020. Adjusted diluted earnings per common share excludes $6.7 million, or $0.04 per share, after-tax impact of merger-related expenses and notable items
  • Loan and lease balances grew $1.8 billion, or 5.1%, from December 31, 2020. Loan and lease balances, excluding PPP loans(1), grew $1.4 billion, or 4.4%, from December 31, 2020
  • Deposit balances grew $930 million, or 2.4%, from December 31, 2020
  • Provision for credit losses of $20.6 million, up 73.9% from the fourth quarter of 2020, primarily reflects loan and lease growth
  • Allowance for credit losses, which includes the reserve for unfunded lending commitments, of 1.45% of total loans and leases, compared to 1.59% at December 31, 2020
  • Nonaccrual loans and leases of $677.9 million, relatively stable compared to December 31, 2020
  • Net charge-offs of $43.3 million, or 0.49% of average loans and leases (annualized)
  • Efficiency ratio of 67.85%, improved 668 basis points from the fourth quarter of 2020. Adjusted efficiency ratio of 62.69%(1), improved 211 basis points from the fourth quarter of 2020
  • Common equity Tier 1 capital ratio of 11.06%, compared to 11.45% at December 31, 2020
  • On January 29, 2021, TCF acquired BB&T Commercial Equipment Capital, Corp. ("CEC"), which included a portfolio of $1.0 billion of equipment finance loans and leases
  • On March 25, 2021, TCF shareholders approved the announced merger with Huntington Bancshares Incorporated ("Huntington"), which is expected to close in the second quarter of 2021, subject to regulatory approval

Merger-related Expenses and Notable items in the First Quarter of 2021 and Fourth Quarter of 2020(1)

  • Pre-tax merger-related expenses of $16.2 million, $12.7 million net of tax, or $0.08 per diluted common share for the first quarter of 2021, compared to pre-tax merger-related expenses of $31.5 million, $24.4 million net of tax, or $0.17 per diluted common share for the fourth quarter of 2020
  • Pre-tax benefit of $7.6 million, $6.0 million net of tax, related to notable items for the first quarter of 2021, compared to pre-tax expenses of $357 thousand, $276 thousand net of tax, related to notable items for the fourth quarter of 2020, see summary of notable items adjustments below
(1)

Denotes a non-GAAP financial measure. See "Reconciliation of GAAP to Non-GAAP Financial Measures" tables and the following table detailing merger-related expenses and notable items.

Summary of Financial Results

 

 

 

 

 

 

 

 

 

 

 

 

 

At or For the Quarter Ended

 

Change From

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

Jun. 30,

 

Mar. 31,

 

Dec. 31,

 

Mar. 31,

(Dollars in thousands, except per share data)

2021

 

2020

 

2020

 

2020

 

2020

 

2020

 

2020

Financial Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to TCF

$

123,336

 

 

$

91,358

 

 

$

55,738

 

 

$

23,764

 

 

$

51,899

 

 

35.0

 

%

 

137.6

 

%

Net interest income

 

381,827

 

 

 

381,394

 

 

 

377,167

 

 

 

378,359

 

 

 

401,481

 

 

0.1

 

 

 

(4.9)

 

 

Basic earnings per common share

$

0.79

 

 

$

0.58

 

 

$

0.35

 

 

$

0.14

 

 

$

0.33

 

 

36.2

 

 

 

139.4

 

 

Diluted earnings per common share

 

0.79

 

 

 

0.58

 

 

 

0.35

 

 

 

0.14

 

 

 

0.32

 

 

36.2

 

 

 

146.9

 

 

Return on average assets ("ROAA")(1)

 

1.03

%

 

 

0.78

%

 

 

0.46

%

 

 

0.21

%

 

 

0.46

%

 

25

 

bps

 

57

 

bps

ROACE(1)

 

8.78

 

 

 

6.44

 

 

 

3.87

 

 

 

1.56

 

 

 

3.64

 

 

234

 

 

 

514

 

 

ROATCE (non-GAAP)(1)(2)

 

12.51

 

 

 

9.18

 

 

 

5.71

 

 

 

2.57

 

 

 

5.42

 

 

333

 

 

 

709

 

 

Net interest margin

 

3.45

 

 

 

3.53

 

 

 

3.31

 

 

 

3.33

 

 

 

3.73

 

 

(8)

 

 

 

(28)

 

 

Net interest margin (FTE)(1)(2)

 

3.47

 

 

 

3.55

 

 

 

3.34

 

 

 

3.35

 

 

 

3.76

 

 

(8)

 

 

 

(29)

 

 

Net charge-offs as a percentage of average loans and leases(1)

 

0.49

 

 

 

0.14

 

 

 

0.28

 

 

 

0.04

 

 

 

0.06

 

 

35

 

 

 

43

 

 

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

 

1.96

 

 

 

2.06

 

 

 

1.20

 

 

 

0.94

 

 

 

0.80

 

 

(10)

 

 

 

116

 

 

Efficiency ratio

 

67.85

 

 

 

74.53

 

 

 

75.29

 

 

 

78.26

 

 

 

69.57

 

 

(668)

 

 

 

(172)

 

 

Adjusted Financial Results (non-GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income attributable to TCF(1)(2)

$

130,074

 

 

$

116,054

 

 

$

98,696

 

 

$

84,862

 

 

$

89,855

 

 

12.1

 

%

 

44.8

 

%

Adjusted diluted earnings per common

share(2)

$

0.84

 

 

$

0.75

 

 

$

0.63

 

 

$

0.54

 

 

$

0.57

 

 

12.0

 

 

 

47.4

 

 

Adjusted ROAA(1)(2)

 

1.08

%

 

 

0.99

%

 

 

0.81

%

 

 

0.70

%

 

 

0.78

%

 

9

 

bps

 

30

 

bps

Adjusted ROACE(1)(2)

 

9.27

 

 

 

8.23

 

 

 

6.99

 

 

 

6.03

 

 

 

6.43

 

 

104

 

 

 

284

 

 

Adjusted ROATCE(1)(2)

 

13.18

 

 

 

11.62

 

 

 

9.96

 

 

 

8.70

 

 

 

9.24

 

 

156

 

 

 

394

 

 

Adjusted efficiency ratio(2)

 

62.69

 

 

 

64.80

 

 

 

61.17

 

 

 

59.80

 

 

 

58.24

 

 

(211)

 

 

 

445

 

 

(1)

Annualized.

(2)

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

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

 

For the Quarter Ended March 31, 2021

 

For the Quarter Ended December 31, 2020

(Dollars in thousands, except per share data)

Pre-tax

income (loss)

 

After-tax

benefit (loss)(1)

 

Per Share

 

Pre-tax

income (loss)

 

After-tax

benefit (loss)(1)

 

Per Share

Merger-related expenses

$

(16,216

)

 

$

(12,736

)

 

$

(0.08

)

 

$

(31,530

)

 

 

(24,420

)

 

$

(0.17

)

Notable items:

 

 

 

 

 

 

 

 

 

 

 

Loan servicing rights recovery (impairment)(2)

 

7,637

 

 

 

5,998

 

 

 

0.04

 

 

 

(357

)

 

 

(276

)

 

 

 

Total notable items

 

7,637

 

 

 

5,998

 

 

 

0.04

 

 

 

(357

)

 

 

(276

)

 

 

 

Total merger-related and notable items

$

(8,579

)

 

$

(6,738

)

 

$

(0.04

)

 

$

(31,887

)

 

$

(24,696

)

 

$

(0.17

)

(1)

Net of tax benefit at our normal tax rate and other tax benefits.

(2)

Included within other mortgage banking income.

TCF Financial Corporation ("TCF" or the "Corporation") (NASDAQ: TCF) today reported net income of $123.3 million, or diluted earnings per common share of $0.79, for the first quarter of 2021, compared with $91.4 million, or diluted earnings per common share of $0.58, for the fourth quarter of 2020. Adjusted net income was $130.1 million, or $0.84 per diluted common share for the first quarter of 2021, compared with $116.1 million, or $0.75 per diluted common share, for the fourth quarter of 2020 (see "Reconciliation of GAAP to Non-GAAP Financial Measures" tables).

“Our first quarter performance was highlighted by strong balance sheet growth as our teams remained focused on taking care of our customers, while we also continued preparing for the closing of our merger with Huntington,” said David T. Provost, chief executive officer. “We were pleased by the overwhelming shareholder approval of the pending merger with Huntington. With the transaction on track to close later in the second quarter of 2021, we look forward to delivering enhanced shareholder value through our greater Midwest market share, increased scale, broader product set, and enhanced technology capabilities and investments.”

“We continued to execute on our business strategy during the quarter as we generated strong loan and lease growth driven by our commercial portfolios,” said Thomas C. Shafer, vice chairman and chief executive officer of TCF National Bank. “This growth included the acquisition of an equipment finance company in January, further bolstering our team of talented and experienced professionals, which we believe will continue to provide incremental growth opportunities going forward. In addition, we saw strong deposit growth driven by noninterest-bearing deposit inflows during the quarter, which helped to further reduce our overall cost of deposits. As we continue to operate our business and serve our customers today, we will be well positioned to transition our business into Huntington when the merger closes.”

Net Interest Income and Net Interest Margin

Net interest income was $381.8 million for the first quarter of 2021, an increase of $0.4 million, or 0.1%, from the fourth quarter of 2020. Purchase accounting accretion and amortization related to the TCF/Chemical merger included in net interest income was $15.0 million for the first quarter of 2021, compared to $23.0 million for the fourth quarter of 2020. At March 31, 2021, the remaining fair value discount from purchase accounting on acquired loans totaled $91.1 million. Additionally, net interest income recorded for the first quarter of 2021 included $17.8 million of interest and fee income from PPP less funding costs, compared to $19.1 million for the fourth quarter of 2020. Adjusted net interest income (FTE), excluding purchase accounting accretion and amortization and the impact from PPP loans, a non-GAAP financial measure, was $351.8 million for the first quarter of 2021, compared to $342.5 million for the fourth quarter of 2020.

Net interest margin was 3.45% for the first quarter of 2021, compared to 3.53% in the fourth quarter of 2020, while net interest margin on a fully tax-equivalent basis (FTE), a non-GAAP financial measure, was 3.47%, down 8 basis points from the fourth quarter of 2020. Adjusted net interest margin (FTE), a non-GAAP financial measure, was 3.30% for the first quarter of 2021, consistent with the fourth quarter of 2020. Adjusted net interest margin (FTE) excluded a 14 basis point impact related to purchase accounting accretion and amortization related to the TCF/Chemical merger and a three basis point impact related to PPP loans. See the "Reconciliation of GAAP to Non-GAAP Financial Measures" tables for reconciliations of our noted non-GAAP measures. The decrease in net interest margin from the fourth quarter of 2020 was primarily driven by lower purchase accounting accretion and new loan and lease originations at lower yields than loan and lease runoff, partially offset by lower cost of funds. Deposit costs continued to reprice lower as they declined from 0.22% in the fourth quarter of 2020 to 0.14% in the first quarter of 2021.

Noninterest Income

Noninterest income was $132.1 million for the first quarter of 2021, an increase of $4.8 million, or 3.8%, from the fourth quarter of 2020. Noninterest income for the first quarter of 2021 included a notable item of a $7.6 million loan servicing rights recovery of impairment, included in mortgage banking income. Noninterest income for the fourth quarter of 2020 included a notable item of a $357 thousand loan servicing rights impairment, included in mortgage banking income. Adjusted noninterest income, a non-GAAP financial measure that excludes the identified notable items, for the first quarter of 2021 was $124.4 million, compared to $127.6 million in the fourth quarter of 2020. Noninterest income in the first quarter of 2021, compared to the fourth quarter of 2020, also included an increase of $5.7 million in net gains on sales of loans and leases, a decrease of $3.9 million in fees and service charges on deposit accounts and a decrease of $3.6 million in leasing revenue. Net gains on sales of loans and leases for the first quarter of 2021 included the sale of $17.8 million of consumer nonaccrual loans. The first quarter of 2021 also included a $1.9 million favorable interest rate swap mark-to-market adjustment resulting from changes in the interest rate environment, included in other noninterest income, compared to a favorable interest rate swap mark-to-market adjustment of $2.4 million in the fourth quarter of 2020. See the "Reconciliation of GAAP to Non-GAAP Financial Measures" tables for reconciliations of our noted non-GAAP measures.

Noninterest Expense

Noninterest expense was $348.7 million for the first quarter of 2021, a decrease of $30.4 million, or 8.0%, from the fourth quarter of 2020. The first quarter of 2021 included $16.2 million of merger-related expenses and $543 thousand of historic tax credit amortization recorded in other noninterest expense. The decrease in the first quarter of 2021 primarily reflected decreases of $17.5 million in compensation and benefits expense and $15.3 million in merger-related expenses, partially offset by increases of $2.1 million in occupancy and equipment expense and $1.8 million in lease financing equipment depreciation. The decrease in compensation and benefits expense was primarily due to executive severance expense recognized in the fourth quarter of 2020 and a decrease in commissions and incentives expense, partially offset by an increase in payroll taxes due to the beginning of a new tax year.

Income Tax Expense

Income tax expense for the first quarter of 2021 was $19.5 million, an effective tax rate of 13.5%, compared to income tax expense of $25.0 million, an effective tax rate of 21.3%, for the fourth quarter of 2020. Income tax expense for the first quarter of 2021 included an additional $11.0 million benefit attributable to tax net operating loss carryback benefits associated with the CARES Act. Excluding the benefit provided by the CARES Act, our effective income tax rate was 21.1% for the first quarter of 2021.

Credit Quality

Provision for credit losses Provision for credit losses was $20.6 million for the first quarter of 2021, an increase of $8.7 million, from the fourth quarter of 2020. The provision for credit losses in the first quarter of 2021 primarily reflects loan and lease growth and the impact of higher net charge-offs. First quarter 2021 net charge-offs were $43.3 million, compared to $11.6 million in the fourth quarter of 2020.

Net charge-off rate The annualized net charge-offs as a percentage of average loans and leases were 0.49% for the first quarter of 2021, compared to 0.24% for the average of the trailing four quarters. The increase in the first quarter of 2021 was primarily due to charge-offs taken on nonaccrual loans and leases within the commercial and industrial portfolio, as well as the commercial real estate portfolio primarily in the hotel sector.

Allowance for Credit Losses The ACL includes both the allowance for loan and lease losses, which is presented separately on the Consolidated Statements of Financial Condition, and the reserve for unfunded lending commitments, which is included in other liabilities on the Consolidated Statements of Financial Condition. The ACL was $526.6 million, or 1.45% of total loans and leases, at March 31, 2021, compared to $549.2 million, or 1.59%, at December 31, 2020. The ACL as a percentage of total loans and leases, excluding PPP loans, a non-GAAP financial measure, was 1.53% at March 31, 2021, compared to 1.67% at December 31, 2020 (see "Reconciliation of GAAP to Non-GAAP Financial Measures" tables). The PPP loans are individually guaranteed by the Small Business Administration and therefore the accounting under CECL does not require reserves to be recorded on such loans. The decrease in the ACL as a percentage of total loans and leases from December 31, 2020 was primarily due to continued improvement in both current and forecasted macro-economic conditions and benefit from nonaccrual loan sale recoveries.

Nonaccrual loans and leases Nonaccrual loans and leases were $677.9 million at March 31, 2021 and represented 1.87% of total loans and leases, compared to $677.3 million, or 1.97% of total loans and leases, at December 31, 2020.

Nonaccrual loans and leases in the hotel sector were $110.6 million, an increase of $32.0 million from December 31, 2020, while nonaccrual loans in the motor coach sector were $100.2 million, a decrease of $3.9 million from December 31, 2020, and nonaccrual loans and leases in the shuttle bus sector were $37.0 million, an increase of $569 thousand from December 31, 2020. Due to the prolonged recovery of revenues for borrowers in these sectors given the dependency on travel and related activity levels, we have taken a proactive approach by working with borrowers to extend deferrals continuing into 2021 where necessary, many of which have been moved to nonaccrual status.

Loan and Lease Deferrals Loans and leases on deferral status were $231.0 million at March 31, 2021, a decrease of $98.9 million, or 30.0%, from December 31, 2020. Loans and leases on deferral status included $148.8 million of balances that are included in nonaccrual balances at March 31, 2021, the majority of which have been on deferral for over 180 days.

Balance Sheet

Loans and leases

 

 

 

 

March 31,

 

December 31,

 

Change

(Dollars in thousands)

2021

 

2020

 

$

 

%

Total loans and leases

$

36,221,019

 

$

34,466,408

 

$

1,754,611

5.1

%

PPP loans

 

1,865,319

 

 

1,553,908

 

$

311,411

20.0

 

Adjusted total loans and leases, excluding PPP(1)

$

34,355,700

 

$

32,912,500

 

$

1,443,200

4.4

%

(1)

Denotes a non-GAAP financial measure.

Loans and leases were $36.2 billion at March 31, 2021, an increase of $1.8 billion, or 5.1%, compared to $34.5 billion at December 31, 2020. At March 31, 2021 we had $1.9 billion of PPP loans outstanding, compared to $1.6 billion at December 31, 2020, all included in our commercial and industrial loan portfolio. Loans and leases excluding PPP loans, a non-GAAP financial measure, increased $1.4 billion, or 4.4%, from December 31, 2020, primarily due to the CEC portfolio purchase and additional increases in the commercial loan and lease portfolio and residential mortgage loans.

Investment securities The investment securities portfolio was $8.6 billion at March 31, 2021, an increase of $144.5 million, or 1.7%, compared to $8.5 billion at December 31, 2020.

Deposits Deposits were $39.8 billion at March 31, 2021, an increase of $930.5 million, or 2.4%, compared to $38.9 billion at December 31, 2020. Increases in noninterest-bearing deposits of $1.4 billion, savings account balances of $478.5 million and checking deposit account balances of $3.3 million, were partially offset by decreases in certificates of deposits of $859.2 million and money market accounts of $50.8 million as of March 31, 2021 compared to December 31, 2020. On a year-over-year basis, noninterest-bearing deposits increased $4.2 billion, or 50.5%.

Capital The common equity Tier 1 capital ratio was 11.06% at March 31, 2021, compared to 11.45% at December 31, 2020. Our capital ratios reflect our election of the five-year CECL transition for regulatory capital purposes.

TCF's board of directors declared a quarterly cash dividend of $0.35625 per depositary share payable on June 1, 2021 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 May 14, 2021.

TCF's board of directors has not declared a regular quarterly cash dividend on TCF's common shares given the expected closing date of the merger with Huntington in the second quarter of 2021. If necessary to give effect to the intent of the Agreement and Plan of Merger to provide that TCF shareholders will receive either a common dividend from TCF or a common dividend from Huntington, but not both for the quarter, TCF's board of directors will revisit the dividend topic.

TCF Financial Corporation (NASDAQ: TCF) is a Detroit, Michigan-based financial holding company with $49 billion in total assets at March 31, 2021 and a top 10 deposit market share in the Midwest. 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 approximately 475 banking centers primarily located in Michigan, Illinois and Minnesota with additional locations in Colorado, 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 statements regarding 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.

This release also contains forward-looking statements regarding TCF's outlook or expectations with respect to the planned merger with Huntington. Examples of forward-looking statements include, but are not limited to, statements regarding the outlook and expectations of TCF and Huntington with respect to the planned merger, the strategic benefits and financial benefits of the merger, including the expected impact of the merger on the combined corporation's future financial performance (including anticipated accretion to earnings per share, the tangible book value earn-back period and other operating and return metrics), and the timing of the closing of the merger. Such risks, uncertainties and assumptions, include, among others:

  • the failure to obtain necessary regulatory approvals when expected or at all (and the risk that such approvals may result in the imposition of conditions that could adversely affect TCF or Huntington or the expected benefits of the merger);
  • the failure of either TCF or Huntington to satisfy any of the other closing conditions to the merger on a timely basis or at all;
  • the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement;
  • the possibility that the anticipated benefits of the merger, including anticipated cost savings and strategic gains, are not realized when expected or at all, including as a result of the impact of, or problems arising from, economic weakness, competitive factors in the areas where TCF and Huntington do business, or as a result of other unexpected factors or events;
  • the impact of purchase accounting with respect to the merger, or any change in the assumptions used regarding the assets purchased and liabilities assumed to determine their fair value;
  • diversion of management's attention from ongoing business operations and opportunities;
  • potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the merger;
  • the ability of either TCF or Huntington to repurchase their stock and the prices at which such repurchases may be made;
  • the outcome of any legal proceedings that may be instituted against TCF or Huntington;
  • the integration of the businesses and operations of TCF and Huntington, which may take longer than anticipated or be more costly than anticipated or have unanticipated adverse results relating to our businesses;
  • business disruptions following the merger; and
  • other factors that may affect future results of TCF and Huntington including changes in asset quality and credit risk; the inability to grow revenue and earnings; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; the impact, extent and timing of technological changes; capital management activities; and other actions of the Federal Reserve Board and legislative and regulatory actions and reforms.

Additional factors that could cause results to differ materially from those described above can be found in the risk factors described in Part I, Item 1A of TCF’s Annual Report on Form 10-K under the heading "Risk Factors" and Huntington’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2020 or otherwise disclosed in documents filed or furnished by us with or to the SEC after the filing of the Annual Report on Form 10-K. TCF disclaims any obligation to update or revise any forward-looking statements contained in this communication, which speak only as of the date hereof, whether as a result of new information, future events or otherwise, except as required by law. 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 net income, adjusted diluted earnings per common share, adjusted ROAA, adjusted ROACE, ROATCE, adjusted ROATCE, adjusted efficiency ratio, adjusted net interest income, net interest margin (FTE), adjusted net interest margin (FTE), adjusted noninterest income, adjusted noninterest expense, tangible book value per common share, tangible common equity to tangible assets and the allowance for credit losses as percentage of total loans and leases, excluding PPP loans, 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 notable items, including the related tax impact, in addition to presenting net interest income and net interest margin (FTE) excluding purchase accounting accretion and amortization and the impact of PPP loans. Management believes these measures are 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. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measure may be found in the reconciliation tables included in this press release.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Financial Condition (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Change From

(Dollars in thousands)

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

Jun. 30,

 

Mar. 31,

 

Dec. 31, 2020

 

Mar. 31, 2020

2021

 

2020

 

2020

 

2020

 

2020

 

$

 

%

 

$

 

%

ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

$

585,663

 

 

$

531,918

 

 

$

538,481

 

 

$

535,507

 

 

$

713,413

 

 

$

53,745

 

 

10.1

%

 

$

(127,750

)

 

(17.9

)%

Interest-bearing deposits with other banks

 

463,641

 

 

 

728,677

 

 

 

1,232,773

 

 

 

2,545,170

 

 

 

565,458

 

 

 

(265,036

)

 

(36.4

)

 

 

(101,817

)

 

(18.0

)

Total cash and cash equivalents

 

1,049,304

 

 

 

1,260,595

 

 

 

1,771,254

 

 

 

3,080,677

 

 

 

1,278,871

 

 

 

(211,291

)

 

(16.8

)

 

 

(229,567

)

 

(18.0

)

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

 

358,414

 

 

 

320,436

 

 

 

300,444

 

 

 

386,483

 

 

 

484,461

 

 

 

37,978

 

 

11.9

 

 

 

(126,047

)

 

(26.0

)

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale, at fair value

 

8,403,788

 

 

 

8,284,723

 

 

 

7,446,163

 

 

 

7,219,373

 

 

 

7,025,224

 

 

 

119,065

 

 

1.4

 

 

 

1,378,564

 

 

19.6

 

Held-to-maturity, at amortized cost

 

209,778

 

 

 

184,359

 

 

 

170,309

 

 

 

130,101

 

 

 

135,619

 

 

 

25,419

 

 

13.8

 

 

 

74,159

 

 

54.7

 

Total investment securities

 

8,613,566

 

 

 

8,469,082

 

 

 

7,616,472

 

 

 

7,349,474

 

 

 

7,160,843

 

 

 

144,484

 

 

1.7

 

 

 

1,452,723

 

 

20.3

 

Loans and leases held-for-sale

 

107,649

 

 

 

222,028

 

 

 

460,427

 

 

 

532,799

 

 

 

287,177

 

 

 

(114,379

)

 

(51.5

)

 

 

(179,528

)

 

(62.5

)

Loans and leases

 

36,221,019

 

 

 

34,466,408

 

 

 

34,343,691

 

 

 

35,535,824

 

 

 

35,921,614

 

 

 

1,754,611

 

 

5.1

 

 

 

299,405

 

 

0.8

 

Allowance for loan and lease losses

 

(504,645

)

 

 

(525,868

)

 

 

(515,229

)

 

 

(461,114

)

 

 

(406,383

)

 

 

21,223

 

 

4.0

 

 

 

(98,262

)

 

(24.2

)

Loans and leases, net

 

35,716,374

 

 

 

33,940,540

 

 

 

33,828,462

 

 

 

35,074,710

 

 

 

35,515,231

 

 

 

1,775,834

 

 

5.2

 

 

 

201,143

 

 

0.6

 

Premises and equipment, net

 

455,032

 

 

 

470,131

 

 

 

469,699

 

 

 

472,240

 

 

 

516,454

 

 

 

(15,099

)

 

(3.2

)

 

 

(61,422

)

 

(11.9

)

Goodwill

 

1,379,890

 

 

 

1,313,046

 

 

 

1,313,046

 

 

 

1,313,046

 

 

 

1,313,046

 

 

 

66,844

 

 

5.1

 

 

 

66,844

 

 

5.1

 

Other intangible assets, net

 

149,438

 

 

 

146,377

 

 

 

151,875

 

 

 

157,373

 

 

 

162,887

 

 

 

3,061

 

 

2.1

 

 

 

(13,449

)

 

(8.3

)

Loan servicing rights

 

44,151

 

 

 

38,303

 

 

 

38,253

 

 

 

38,816

 

 

 

47,283

 

 

 

5,848

 

 

15.3

 

 

 

(3,132

)

 

(6.6

)

Other assets

 

1,585,733

 

 

 

1,621,949

 

 

 

1,615,857

 

 

 

1,656,842

 

 

 

1,828,130

 

 

 

(36,216

)

 

(2.2

)

 

 

(242,397

)

 

(13.3

)

Total assets

$

49,459,551

 

 

$

47,802,487

 

 

$

47,565,789

 

 

$

50,062,460

 

 

$

48,594,383

 

 

$

1,657,064

 

 

3.5

%

 

$

865,168

 

 

1.8

%

LIABILITIES AND EQUITY:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing

$

12,394,753

 

 

$

11,036,086

 

 

$

10,691,041

 

 

$

10,480,245

 

 

$

8,237,916

 

 

$

1,358,667

 

 

12.3

%

 

$

4,156,837

 

 

50.5

%

Interest-bearing

 

27,392,061

 

 

 

27,820,233

 

 

 

28,481,056

 

 

 

28,730,627

 

 

 

27,561,387

 

 

 

(428,172

)

 

(1.5

)

 

 

(169,326

)

 

(0.6

)

Total deposits

 

39,786,814

 

 

 

38,856,319

 

 

 

39,172,097

 

 

 

39,210,872

 

 

 

35,799,303

 

 

 

930,495

 

 

2.4

 

 

 

3,987,511

 

 

11.1

 

Short-term borrowings

 

1,426,083

 

 

 

617,363

 

 

 

655,461

 

 

 

2,772,998

 

 

 

3,482,535

 

 

 

808,720

 

 

131.0

 

 

 

(2,056,452

)

 

(59.1

)

Long-term borrowings

 

1,518,816

 

 

 

1,374,732

 

 

 

871,845

 

 

 

936,908

 

 

 

2,600,594

 

 

 

144,084

 

 

10.5

 

 

 

(1,081,778

)

 

(41.6

)

Other liabilities

 

1,136,067

 

 

 

1,264,776

 

 

 

1,207,966

 

 

 

1,483,127

 

 

 

1,056,118

 

 

 

(128,709

)

 

(10.2

)

 

 

79,949

 

 

7.6

 

Total liabilities

 

43,867,780

 

 

 

42,113,190

 

 

 

41,907,369

 

 

 

44,403,905

 

 

 

42,938,550

 

 

 

1,754,590

 

 

4.2

 

 

 

929,230

 

 

2.2

 

Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

169,302

 

 

 

169,302

 

 

 

169,302

 

 

 

169,302

 

 

 

169,302

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

152,696

 

 

 

152,566

 

 

 

152,380

 

 

 

152,233

 

 

 

152,186

 

 

 

130

 

 

0.1

 

 

 

510

 

 

0.3

 

Additional paid-in capital

 

3,466,655

 

 

 

3,457,802

 

 

 

3,450,669

 

 

 

3,441,925

 

 

 

3,433,234

 

 

 

8,853

 

 

0.3

 

 

 

33,421

 

 

1.0

 

Retained earnings

 

1,802,340

 

 

 

1,735,201

 

 

 

1,700,044

 

 

 

1,700,480

 

 

 

1,732,932

 

 

 

67,139

 

 

3.9

 

 

 

69,408

 

 

4.0

 

Accumulated other comprehensive income

 

2,654

 

 

 

182,673

 

 

 

191,771

 

 

 

198,408

 

 

 

166,170

 

 

 

(180,019

)

 

(98.5

)

 

 

(163,516

)

 

(98.4

)

Other

 

(29,813

)

 

 

(26,731

)

 

 

(27,122

)

 

 

(27,093

)

 

 

(28,140

)

 

 

(3,082

)

 

(11.5

)

 

 

(1,673

)

 

(5.9

)

Total TCF Financial Corporation shareholders' equity

 

5,563,834

 

 

 

5,670,813

 

 

 

5,637,044

 

 

 

5,635,255

 

 

 

5,625,684

 

 

 

(106,979

)

 

(1.9

)

 

 

(61,850

)

 

(1.1

)

Non-controlling interest

 

27,937

 

 

 

18,484

 

 

 

21,376

 

 

 

23,300

 

 

 

30,149

 

 

 

9,453

 

 

51.1

 

 

 

(2,212

)

 

(7.3

)

Total equity

 

5,591,771

 

 

 

5,689,297

 

 

 

5,658,420

 

 

 

5,658,555

 

 

 

5,655,833

 

 

 

(97,526

)

 

(1.7

)

 

 

(64,062

)

 

(1.1

)

Total liabilities and equity

$

49,459,551

 

 

$

47,802,487

 

 

$

47,565,789

 

 

$

50,062,460

 

 

$

48,594,383

 

 

$

1,657,064

 

 

3.5

%

 

$

865,168

 

 

1.8

%

N.M. Not Meaningful

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Income (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Change From

(Dollars in thousands)

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

Jun. 30,

 

Mar. 31,

 

Dec. 31, 2020

 

Mar. 31, 2020

2021

 

2020

 

2020

 

2020

 

2020

 

$

 

%

 

$

 

%

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans and leases

$

360,584

 

$

366,152

 

$

373,112

 

 

$

392,826

 

$

443,096

 

$

(5,568

)

 

(1.5

)%

 

$

(82,512

)

 

(18.6

)%

Interest on investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

38,716

 

 

35,389

 

 

35,648

 

 

 

32,505

 

 

40,920

 

 

3,327

 

 

9.4

 

 

 

(2,204

)

 

(5.4

)

Tax-exempt

 

3,700

 

 

3,772

 

 

3,892

 

 

 

4,155

 

 

4,349

 

 

(72

)

 

(1.9

)

 

 

(649

)

 

(14.9

)

Interest on loans held-for-sale

 

975

 

 

2,682

 

 

3,829

 

 

 

3,322

 

 

1,561

 

 

(1,707

)

 

(63.6

)

 

 

(586

)

 

(37.5

)

Interest on other earning assets

 

1,657

 

 

3,457

 

 

3,967

 

 

 

5,562

 

 

5,466

 

 

(1,800

)

 

(52.1

)

 

 

(3,809

)

 

(69.7

)

Total interest income

 

405,632

 

 

411,452

 

 

420,448

 

 

 

438,370

 

 

495,392

 

 

(5,820

)

 

(1.4

)

 

 

(89,760

)

 

(18.1

)

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

13,786

 

 

20,930

 

 

31,852

 

 

 

46,785

 

 

67,419

 

 

(7,144

)

 

(34.1

)

 

 

(53,633

)

 

(79.6

)

Interest on borrowings

 

10,019

 

 

9,128

 

 

11,429

 

 

 

13,226

 

 

26,492

 

 

891

 

 

9.8

 

 

 

(16,473

)

 

(62.2

)

Total interest expense

 

23,805

 

 

30,058

 

 

43,281

 

 

 

60,011

 

 

93,911

 

 

(6,253

)

 

(20.8

)

 

 

(70,106

)

 

(74.7

)

Net interest income

 

381,827

 

 

381,394

 

 

377,167

 

 

 

378,359

 

 

401,481

 

 

433

 

 

0.1

 

 

 

(19,654

)

 

(4.9

)

Provision for credit losses

 

20,556

 

 

11,818

 

 

69,664

 

 

 

78,726

 

 

96,943

 

 

8,738

 

 

73.9

 

 

 

(76,387

)

 

(78.8

)

Net interest income after provision for credit losses

 

361,271

 

 

369,576

 

 

307,503

 

 

 

299,633

 

 

304,538

 

 

(8,305

)

 

(2.2

)

 

 

56,733

 

 

18.6

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leasing revenue

 

36,453

 

 

40,081

 

 

31,905

 

 

 

37,172

 

 

33,565

 

 

(3,628

)

 

(9.1

)

 

 

2,888

 

 

8.6

 

Fees and service charges on deposit accounts

 

25,895

 

 

29,782

 

 

25,470

 

 

 

22,832

 

 

34,597

 

 

(3,887

)

 

(13.1

)

 

 

(8,702

)

 

(25.2

)

Card and ATM revenue

 

24,661

 

 

22,995

 

 

23,383

 

 

 

20,636

 

 

21,685

 

 

1,666

 

 

7.2

 

 

 

2,976

 

 

13.7

 

Mortgage banking income(1)

 

20,986

 

 

11,647

 

 

19,880

 

 

 

16,300

 

 

5,665

 

 

9,339

 

 

80.2

 

 

 

15,321

 

 

N.M.

 

Wealth management revenue

 

6,944

 

 

6,838

 

 

6,506

 

 

 

6,206

 

 

6,151

 

 

106

 

 

1.6

 

 

 

793

 

 

12.9

 

Net gains on sales of loans and leases(2)

 

6,058

 

 

330

 

 

1,760

 

 

 

4,717

 

 

7,573

 

 

5,728

 

 

N.M.

 

 

 

(1,515

)

 

(20.0

)

Net gains on investment securities

 

8

 

 

6

 

 

2,324

 

 

 

8

 

 

 

 

2

 

 

33.3

 

 

 

8

 

 

N.M.

 

Other

 

11,055

 

 

15,557

 

 

7,582

 

 

 

25,183

 

 

27,727

 

 

(4,502

)

 

(28.9

)

 

 

(16,672

)

 

(60.1

)

Total noninterest income

 

132,060

 

 

127,236

 

 

118,810

 

 

 

133,054

 

 

136,963

 

 

4,824

 

 

3.8

 

 

 

(4,903

)

 

(3.6

)

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

173,602

 

 

191,052

 

 

168,323

 

 

 

171,799

 

 

171,528

 

 

(17,450

)

 

(9.1

)

 

 

2,074

 

 

1.2

 

Occupancy and equipment

 

52,166

 

 

50,062

 

 

48,233

 

 

 

54,107

 

 

57,288

 

 

2,104

 

 

4.2

 

 

 

(5,122

)

 

(8.9

)

Lease financing equipment depreciation

 

20,426

 

 

18,610

 

 

17,932

 

 

 

18,212

 

 

18,450

 

 

1,816

 

 

9.8

 

 

 

1,976

 

 

10.7

 

Net foreclosed real estate and repossessed assets

 

1,029

 

 

761

 

 

1,518

 

 

 

998

 

 

1,859

 

 

268

 

 

35.2

 

 

 

(830

)

 

(44.6

)

Merger-related expenses

 

16,216

 

 

31,530

 

 

54,011

 

 

 

81,619

 

 

36,728

 

 

(15,314

)

 

(48.6

)

 

 

(20,512

)

 

(55.8

)

Other

 

85,243

 

 

87,076

 

 

83,423

 

 

 

73,506

 

 

88,746

 

 

(1,833

)

 

(2.1

)

 

 

(3,503

)

 

(3.9

)

Total noninterest expense

 

348,682

 

 

379,091

 

 

373,440

 

 

 

400,241

 

 

374,599

 

 

(30,409

)

 

(8.0

)

 

 

(25,917

)

 

(6.9

)

Income before income tax expense (benefit)

 

144,649

 

 

117,721

 

 

52,873

 

 

 

32,446

 

 

66,902

 

 

26,928

 

 

22.9

 

 

 

77,747

 

 

116.2

 

Income tax expense (benefit)

 

19,540

 

 

25,031

 

 

(4,429

)

 

 

6,213

 

 

13,086

 

 

(5,491

)

 

(21.9

)

 

 

6,454

 

 

49.3

 

Income after income tax expense (benefit)

 

125,109

 

 

92,690

 

 

57,302

 

 

 

26,233

 

 

53,816

 

 

32,419

 

 

35.0

 

 

 

71,293

 

 

132.5

 

Income attributable to non-controlling interest

 

1,773

 

 

1,332

 

 

1,564

 

 

 

2,469

 

 

1,917

 

 

441

 

 

33.1

 

 

 

(144

)

 

(7.5

)

Net income attributable to TCF Financial Corporation

 

123,336

 

 

91,358

 

 

55,738

 

 

 

23,764

 

 

51,899

 

 

31,978

 

 

35.0

 

 

 

71,437

 

 

137.6

 

Preferred stock dividends

 

2,493

 

 

2,494

 

 

2,494

 

 

 

2,494

 

 

2,493

 

 

(1

)

 

 

 

 

 

 

 

Net income available to common shareholders

$

120,843

 

$

88,864

 

$

53,244

 

 

$

21,270

 

$

49,406

 

$

31,979

 

 

36.0

%

 

$

71,437

 

 

144.6

%

(1)

Mortgage banking income includes revenues from originating, selling and servicing residential mortgage loans, changes in fair value of mortgage loans held-for-sale and the related derivative instruments, amortization and changes in impairment of mortgage loan servicing rights, and other miscellaneous loan fees.

(2)

Net gains on sales of loans and leases includes net gains on sales of loans and leases originated as held-for-investment.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Average Balance Sheets, Yields and Rates (Unaudited)

 

Quarter Ended

 

Mar. 31, 2021

 

Dec. 31, 2020

 

Mar. 31, 2020

 

Average

 

Yields &

 

Average

 

Yields &

 

Average

 

Yields &

(Dollars in thousands)

Balance

Interest(1)

Rates(1)(2)

 

Balance

Interest(1)

Rates(1)(2)

 

Balance

Interest(1)

Rates(1)(2)

ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank and Federal Reserve Bank stocks

$

354,019

 

$

999

 

1.14

%

 

$

301,460

 

$

2,855

 

3.77

%

 

$

454,675

 

$

3,152

 

2.79

%

Investment securities held-to-maturity

 

188,824

 

 

1,085

 

2.30

 

 

 

162,590

 

 

638

 

1.57

 

 

 

136,277

 

 

560

 

1.64

 

Investment securities available-for-sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

7,203,647

 

 

37,631

 

2.09

 

 

 

6,553,126

 

 

34,751

 

2.12

 

 

 

5,892,006

 

 

40,360

 

2.74

 

Tax-exempt(3)

 

646,001

 

 

4,684

 

2.90

 

 

 

652,743

 

 

4,774

 

2.93

 

 

 

773,468

 

 

5,503

 

2.85

 

Loans and leases held-for-sale

 

160,716

 

 

975

 

2.43

 

 

 

419,704

 

 

2,682

 

2.56

 

 

 

138,058

 

 

1,561

 

4.53

 

Loans and leases(3)(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

12,265,082

 

 

133,510

 

4.37

 

 

 

11,425,226

 

 

130,654

 

4.51

 

 

 

11,827,315

 

 

160,802

 

5.42

 

Commercial real estate

 

9,818,737

 

 

88,377

 

3.60

 

 

 

9,623,256

 

 

96,278

 

3.91

 

 

 

9,291,540

 

 

117,743

 

5.01

 

Lease financing

 

2,849,741

 

 

34,189

 

4.80

 

 

 

2,700,298

 

 

32,617

 

4.83

 

 

 

2,682,323

 

 

34,156

 

5.09

 

Residential mortgage

 

6,219,844

 

 

53,735

 

3.46

 

 

 

5,788,514

 

 

52,711

 

3.64

 

 

 

6,113,279

 

 

61,379

 

4.02

 

Home equity

 

2,988,761

 

 

37,781

 

5.13

 

 

 

3,202,321

 

 

39,722

 

4.93

 

 

 

3,514,278

 

 

51,103

 

5.85

 

Consumer installment

 

1,191,606

 

 

14,818

 

5.04

 

 

 

1,288,382

 

 

16,396

 

5.06

 

 

 

1,517,412

 

 

19,742

 

5.23

 

Total loans and leases(3)(4)

 

35,333,771

 

 

362,410

 

4.12

 

 

 

34,027,997

 

 

368,378

 

4.28

 

 

 

34,946,147

 

 

444,925

 

5.08

 

Interest-bearing deposits with banks and other

 

515,163

 

 

658

 

0.52

 

 

 

706,114

 

 

602

 

0.34

 

 

 

538,971

 

 

2,314

 

1.72

 

Total interest-earning assets

 

44,402,141

 

 

408,442

 

3.69

 

 

 

42,823,734

 

 

414,680

 

3.83

 

 

 

42,879,602

 

 

498,375

 

4.64

 

Other assets

 

4,348,617

 

 

 

 

 

 

4,537,786

 

 

 

 

 

 

4,105,824

 

 

 

 

Total assets

$

48,750,758

 

 

 

 

 

$

47,361,520

 

 

 

 

 

$

46,985,426

 

 

 

 

LIABILITIES AND EQUITY:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

$

11,322,059

 

 

 

 

 

$

10,942,071

 

 

 

 

 

$

7,929,933

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings

 

9,697,206

 

 

883

 

0.04

 

 

 

9,395,608

 

 

1,759

 

0.07

 

 

 

8,589,815

 

 

13,669

 

0.64

 

Checking

 

7,259,029

 

 

1,442

 

0.08

 

 

 

7,029,938

 

 

1,763

 

0.10

 

 

 

5,990,309

 

 

5,830

 

0.39

 

Money market

 

5,577,424

 

 

4,704

 

0.34

 

 

 

5,478,528

 

 

5,828

 

0.42

 

 

 

4,792,248

 

 

14,855

 

1.25

 

Certificates of deposit

 

5,094,423

 

 

6,757

 

0.54

 

 

 

5,784,759

 

 

11,580

 

0.80

 

 

 

7,329,632

 

 

33,065

 

1.81

 

Total interest-bearing deposits

 

27,628,082

 

 

13,786

 

0.20

 

 

 

27,688,833

 

 

20,930

 

0.30

 

 

 

26,702,004

 

 

67,419

 

1.02

 

Total deposits

 

38,950,141

 

 

13,786

 

0.14

 

 

 

38,630,904

 

 

20,930

 

0.22

 

 

 

34,631,937

 

 

67,419

 

0.78

 

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

1,228,501

 

 

833

 

0.27

 

 

 

252,749

 

 

101

 

0.16

 

 

 

2,689,262

 

 

10,582

 

1.56

 

Long-term borrowings

 

1,587,028

 

 

9,186

 

2.32

 

 

 

1,253,556

 

 

9,027

 

2.87

 

 

 

2,608,204

 

 

15,910

 

2.42

 

Total borrowings

 

2,815,529

 

 

10,019

 

1.42

 

 

 

1,506,305

 

 

9,128

 

2.41

 

 

 

5,297,466

 

 

26,492

 

1.98

 

Total interest-bearing liabilities

 

30,443,611

 

 

23,805

 

0.32

 

 

 

29,195,138

 

 

30,058

 

0.41

 

 

 

31,999,470

 

 

93,911

 

1.18

 

Total deposits and borrowings

 

41,765,670

 

 

23,805

 

0.23

 

 

 

40,137,209

 

 

30,058

 

0.30

 

 

 

39,929,403

 

 

93,911

 

0.94

 

Accrued expenses and other liabilities

 

1,288,804

 

 

 

 

 

 

1,517,120

 

 

 

 

 

 

1,425,536

 

 

 

 

Total liabilities

 

43,054,474

 

 

 

 

 

 

41,654,329

 

 

 

 

 

 

41,354,939

 

 

 

 

Total TCF Financial Corporation shareholders' equity

 

5,673,654

 

 

 

 

 

 

5,687,196

 

 

 

 

 

 

5,605,159

 

 

 

 

Non-controlling interest in subsidiaries

 

22,630

 

 

 

 

 

 

19,995

 

 

 

 

 

 

25,328

 

 

 

 

Total equity

 

5,696,284

 

 

 

 

 

 

5,707,191

 

 

 

 

 

 

5,630,487

 

 

 

 

Total liabilities and equity

$

48,750,758

 

 

 

 

 

$

47,361,520

 

 

 

 

 

$

46,985,426

 

 

 

 

Net interest spread (FTE)

 

 

 

 

3.46

%

 

 

 

 

 

3.53

%

 

 

 

 

 

3.70

%

Net interest income (FTE) and net interest margin (FTE)

 

 

$

384,637

 

3.47

%

 

 

 

$

384,622

 

3.55

%

 

 

 

$

404,464

 

3.76

%

Reconciliation to Reported Net Interest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income and net interest margin (GAAP)

 

 

$

381,827

 

3.45

%

 

 

 

$

381,394

 

3.53

%

 

 

 

$

401,481

 

3.73

%

Adjustments for taxable equivalent

interest(1)(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans and leases

 

 

 

1,826

 

 

 

 

 

 

2,226

 

 

 

 

 

 

1,829

 

 

Tax-exempt investment securities

 

 

 

984

 

 

 

 

 

 

1,002

 

 

 

 

 

 

1,154

 

 

Total FTE adjustments

 

 

 

2,810

 

 

 

 

 

 

3,228

 

 

 

 

 

 

2,983

 

 

Net interest income and net interest margin (FTE)

 

 

$

384,637

 

3.47

%

 

 

 

$

384,622

 

3.55

%

 

 

 

$

404,464

 

3.76

%

(1)

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

(2)

Annualized.

(3)

The yield on tax-exempt loans and investment securities available-for-sale is computed on a tax-equivalent basis using a statutory federal income tax rate of 21%.

(4)

Average balances of loans and leases include nonaccrual loans and leases and are presented net of unearned income.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Quarterly Average Balance Sheets (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Change From

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

Jun. 30,

 

Mar. 31,

 

Dec. 31, 2020

 

Mar. 31, 2020

(Dollars in thousands)

2021

 

2020

 

2020

 

2020

 

2020

 

$

 

%

 

$

 

%

ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank and Federal Reserve Bank stocks

$

354,019

 

$

301,460

 

$

361,320

 

$

401,532

 

$

454,675

 

$

52,559

 

 

17.4

%

 

$

(100,656

)

 

(22.1

)%

Investment securities held-to-maturity

 

188,824

 

 

162,590

 

 

135,332

 

 

132,054

 

 

136,277

 

 

26,234

 

 

16.1

 

 

 

52,547

 

 

38.6

 

Investment securities available-for-sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

7,203,647

 

 

6,553,126

 

 

6,021,643

 

 

5,730,762

 

 

5,892,006

 

 

650,521

 

 

9.9

 

 

 

1,311,641

 

 

22.3

 

Tax-exempt

 

646,001

 

 

652,743

 

 

685,652

 

 

743,744

 

 

773,468

 

 

(6,742

)

 

(1.0

)

 

 

(127,467

)

 

(16.5

)

Loans and leases held-for-sale

 

160,716

 

 

419,704

 

 

490,886

 

 

356,671

 

 

138,058

 

 

(258,988

)

 

(61.7

)

 

 

22,658

 

 

16.4

 

Loans and leases(1) :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

12,265,082

 

 

11,425,226

 

 

11,740,727

 

 

12,713,714

 

 

11,827,315

 

 

839,856

 

 

7.4

 

 

 

437,767

 

 

3.7

 

Commercial real estate

 

9,818,737

 

 

9,623,256

 

 

9,616,301

 

 

9,658,124

 

 

9,291,540

 

 

195,481

 

 

2.0

 

 

 

527,197

 

 

5.7

 

Lease financing

 

2,849,741

 

 

2,700,298

 

 

2,679,142

 

 

2,712,291

 

 

2,682,323

 

 

149,443

 

 

5.5

 

 

 

167,418

 

 

6.2

 

Residential mortgage

 

6,219,844

 

 

5,788,514

 

 

5,987,754

 

 

6,326,227

 

 

6,113,279

 

 

431,330

 

 

7.5

 

 

 

106,565

 

 

1.7

 

Home equity

 

2,988,761

 

 

3,202,321

 

 

3,399,468

 

 

3,509,107

 

 

3,514,278

 

 

(213,560

)

 

(6.7

)

 

 

(525,517

)

 

(15.0

)

Consumer installment

 

1,191,606

 

 

1,288,382

 

 

1,386,448

 

 

1,459,446

 

 

1,517,412

 

 

(96,776

)

 

(7.5

)

 

 

(325,806

)

 

(21.5

)

Total loans and

leases(1)

 

35,333,771

 

 

34,027,997

 

 

34,809,840

 

 

36,378,909

 

 

34,946,147

 

 

1,305,774

 

 

3.8

 

 

 

387,624

 

 

1.1

 

Interest-bearing deposits with banks and other

 

515,163

 

 

706,114

 

 

2,572,254

 

 

1,587,665

 

 

538,971

 

 

(190,951

)

 

(27.0

)

 

 

(23,808

)

 

(4.4

)

Total interest-earning assets

 

44,402,141

 

 

42,823,734

 

 

45,076,927

 

 

45,331,337

 

 

42,879,602

 

 

1,578,407

 

 

3.7

 

 

 

1,522,539

 

 

3.6

 

Other assets

 

4,348,617

 

 

4,537,786

 

 

4,462,673

 

 

4,384,779

 

 

4,105,824

 

 

(189,169

)

 

(4.2

)

 

 

242,793

 

 

5.9

 

Total assets

$

48,750,758

 

$

47,361,520

 

$

49,539,600

 

$

49,716,116

 

$

46,985,426

 

$

1,389,238

 

 

2.9

%

 

$

1,765,332

 

 

3.8

%

LIABILITIES AND EQUITY:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

$

11,322,059

 

$

10,942,071

 

$

10,654,288

 

$

9,830,687

 

$

7,929,933

 

$

379,988

 

 

3.5

%

 

$

3,392,126

 

 

42.8

%

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings

 

9,697,206

 

 

9,395,608

 

 

9,301,198

 

 

9,082,184

 

 

8,589,815

 

 

301,598

 

 

3.2

 

 

 

1,107,391

 

 

12.9

 

Checking

 

7,259,029

 

 

7,029,938

 

 

7,029,914

 

 

6,649,288

 

 

5,990,309

 

 

229,091

 

 

3.3

 

 

 

1,268,720

 

 

21.2

 

Money market

 

5,577,424

 

 

5,478,528

 

 

5,501,747

 

 

5,380,547

 

 

4,792,248

 

 

98,896

 

 

1.8

 

 

 

785,176

 

 

16.4

 

Certificates of deposit

 

5,094,423

 

 

5,784,759

 

 

6,657,697

 

 

7,491,502

 

 

7,329,632

 

 

(690,336

)

 

(11.9

)

 

 

(2,235,209

)

 

(30.5

)

Total interest-bearing deposits

 

27,628,082

 

 

27,688,833

 

 

28,490,556

 

 

28,603,521

 

 

26,702,004

 

 

(60,751

)

 

(0.2

)

 

 

926,078

 

 

3.5

 

Total deposits

 

38,950,141

 

 

38,630,904

 

 

39,144,844

 

 

38,434,208

 

 

34,631,937

 

 

319,237

 

 

0.8

 

 

 

4,318,204

 

 

12.5

 

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

1,228,501

 

 

252,749

 

 

2,153,030

 

 

3,016,490

 

 

2,689,262

 

 

975,752

 

 

N.M.

 

 

(1,460,761

)

 

(54.3

)

Long-term borrowings

 

1,587,028

 

 

1,253,556

 

 

910,149

 

 

1,072,394

 

 

2,608,204

 

 

333,472

 

 

26.6

 

 

 

(1,021,176

)

 

(39.2

)

Total borrowings

 

2,815,529

 

 

1,506,305

 

 

3,063,179

 

 

4,088,884

 

 

5,297,466

 

 

1,309,224

 

 

86.9

 

 

 

(2,481,937

)

 

(46.9

)

Total interest-bearing liabilities

 

30,443,611

 

 

29,195,138

 

 

31,553,735

 

 

32,692,405

 

 

31,999,470

 

 

1,248,473

 

 

4.3

 

 

 

(1,555,859

)

 

(4.9

)

Total deposits and borrowings

 

41,765,670

 

 

40,137,209

 

 

42,208,023

 

 

42,523,092

 

 

39,929,403

 

 

1,628,461

 

 

4.1

 

 

 

1,836,267

 

 

4.6

 

Accrued expenses and other liabilities

 

1,288,804

 

 

1,517,120

 

 

1,633,850

 

 

1,534,769

 

 

1,425,536

 

 

(228,316

)

 

(15.0

)

 

 

(136,732

)

 

(9.6

)

Total liabilities

 

43,054,474

 

 

41,654,329

 

 

43,841,873

 

 

44,057,861

 

 

41,354,939

 

 

1,400,145

 

 

3.4

 

 

 

1,699,535

 

 

4.1

 

Total TCF Financial Corporation shareholders' equity

 

5,673,654

 

 

5,687,196

 

 

5,675,089

 

 

5,630,133

 

 

5,605,159

 

 

(13,542

)

 

(0.2

)

 

 

68,495

 

 

1.2

 

Non-controlling interest in subsidiaries

 

22,630

 

 

19,995

 

 

22,638

 

 

28,122

 

 

25,328

 

 

2,635

 

 

13.2

 

 

 

(2,698

)

 

(10.7

)

Total equity

 

5,696,284

 

 

5,707,191

 

 

5,697,727

 

 

5,658,255

 

 

5,630,487

 

 

(10,907

)

 

(0.2

)

 

 

65,797

 

 

1.2

 

Total liabilities and equity

$

48,750,758

 

$

47,361,520

 

$

49,539,600

 

$

49,716,116

 

$

46,985,426

 

$

1,389,238

 

 

2.9

%

 

$

1,765,332

 

 

3.8

%

N.M. Not Meaningful
(1)

Average balances of loans and leases include nonaccrual loans and leases and are presented net of unearned income.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Quarterly Yields and Rates(1)(2) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Change From

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

Jun. 30,

 

Mar. 31,

 

Dec. 31,

Mar. 31,

 

2021

 

2020

 

2020

 

2020

 

2020

 

2020

2020

ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank and Federal Reserve Bank stocks

1.14

%

 

3.77

%

 

3.27

%

 

4.38

%

 

2.79

%

 

(263)

bps

(165)

bps

Investment securities held-to-maturity

2.30

 

 

1.57

 

 

1.69

 

0.21

 

 

1.64

 

 

73

 

66

 

Investment securities available-for-sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

2.09

 

 

2.12

 

 

2.33

 

2.26

 

 

2.74

 

 

(3)

 

(65)

 

Tax-exempt(3)

2.90

 

 

2.93

 

 

2.90

 

 

2.81

 

 

2.85

 

 

(3)

 

5

 

Loans and leases held-for-sale

2.43

 

 

2.56

 

 

3.13

 

3.73

 

 

4.53

 

 

(13)

 

(210)

 

Loans and leases(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

4.37

 

 

4.51

 

 

4.30

 

 

4.41

 

 

5.42

 

 

(14)

 

(105)

 

Commercial real estate

3.60

 

 

3.91

 

 

3.90

 

 

3.91

 

 

5.01

 

 

(31)

 

(141)

 

Lease financing

4.80

 

 

4.83

 

 

4.88

 

4.99

 

 

5.09

 

 

(3)

 

(29)

 

Residential mortgage

3.46

 

 

3.64

 

 

3.86

 

3.93

 

 

4.02

 

 

(18)

 

(56)

 

Home equity

5.13

 

 

4.93

 

 

5.09

 

5.19

 

 

5.85

 

 

20

 

(72)

 

Consumer installment

5.04

 

 

5.06

 

 

5.04

 

4.88

 

 

5.23

 

 

(2)

 

(19)

 

Total loans and leases(3)

4.12

 

 

4.28

 

 

4.26

 

4.33

 

 

5.08

 

 

(16)

 

(96)

 

Interest-bearing deposits with banks and other

0.52

 

 

0.34

 

 

0.16

 

0.30

 

 

1.72

 

 

18

 

(120)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest-earning assets

3.69

 

 

3.83

 

 

3.72

 

3.88

 

 

4.64

 

 

(14)

 

(95)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings

0.04

 

 

0.07

 

 

0.17

 

0.40

 

 

0.64

 

 

(3)

 

(60)

 

Checking

0.08

 

 

0.10

 

 

0.11

 

0.14

 

 

0.39

 

 

(2)

 

(31)

 

Money market

0.34

 

 

0.42

 

 

0.53

 

0.66

 

 

1.25

 

 

(8)

 

(91)

 

Certificates of deposit

0.54

 

 

0.80

 

 

1.10

 

1.44

 

 

1.81

 

 

(26)

 

(127)

 

Total interest-bearing deposits

0.20

 

 

0.30

 

 

0.44

 

0.66

 

 

1.02

 

 

(10)

 

(82)

 

Total deposits

0.14

 

 

0.22

 

 

0.32

 

0.49

 

 

0.78

 

 

(8)

 

(64)

 

Borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

0.27

 

 

0.16

 

 

0.46

 

0.54

 

 

1.56

 

 

11

 

(129)

 

Long-term borrowings

2.32

 

 

2.87

 

 

3.91

 

3.40

 

 

2.42

 

 

(55)

 

(10)

 

Total borrowings

1.42

 

 

2.41

 

 

1.48

 

1.29

 

 

1.98

 

 

(99)

 

(56)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest-bearing liabilities

0.32

 

 

0.41

 

 

0.55

 

0.74

 

 

1.18

 

 

(9)

 

(86)

 

Total deposits and borrowings

0.23

 

 

0.30

 

 

0.41

 

0.57

 

 

0.94

 

 

(7)

 

(71)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (GAAP)

3.45

 

 

3.53

 

 

3.31

 

3.33

 

 

3.73

 

 

(8)

 

(28)

 

Net interest margin (FTE)

3.47

 

 

3.55

 

 

3.34

 

3.35

 

 

3.76

 

 

(8)

 

(29)

 

(1)

Annualized.

(2)

Yields are presented on a fully tax-equivalent basis.

(3)

The yield on tax-exempt loans and investment securities available-for-sale is computed on a tax-equivalent basis using a statutory federal income tax rate of 21%.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Composition of Loans (Unaudited)

 

 

 

 

 

 

 

Quarter Ended

 

Change From

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

Jun. 30,

 

Mar. 31,

 

Dec. 31, 2020

Mar. 31, 2020

(Dollars in thousands)

2021

 

2020

 

2020

 

2020

 

2020

 

$

%

$

%

Commercial and industrial

$

12,856,701

 

$

11,422,383

 

$

11,557,237

 

$

12,200,721

 

$

12,326,943

 

$

1,434,318

 

12.6

%

$

529,758

 

4.3

%

Commercial real estate

 

9,881,341

 

 

9,702,587

 

 

9,627,330

 

 

9,628,344

 

 

9,486,904

 

 

178,754

 

1.8

 

 

394,437

 

4.2

 

Lease financing

 

2,956,626

 

 

2,817,231

 

 

2,724,686

 

 

2,707,402

 

 

2,708,998

 

 

139,395

 

4.9

 

 

247,628

 

9.1

 

Total commercial loan and lease portfolio

 

25,694,668

 

 

23,942,201

 

 

23,909,253

 

 

24,536,467

 

 

24,522,845

 

 

1,752,467

 

7.3

 

 

1,171,823

 

4.8

 

Residential mortgage

 

6,510,981

 

 

6,182,045

 

 

5,790,251

 

 

6,123,118

 

 

6,435,314

 

 

328,936

 

5.3

 

 

75,667

 

1.2

 

Home equity

 

2,864,142

 

 

3,108,736

 

 

3,302,983

 

 

3,445,584

 

 

3,453,502

 

 

(244,594

)

(7.9

)

 

(589,360

)

(17.1

)

Consumer installment

 

1,151,228

 

 

1,233,426

 

 

1,341,204

 

 

1,430,655

 

 

1,509,953

 

 

(82,198

)

(6.7

)

 

(358,725

)

(23.8

)

Total consumer loan portfolio

 

10,526,351

 

 

10,524,207

 

 

10,434,438

 

 

10,999,357

 

 

11,398,769

 

 

2,144

 

0.0

 

 

(872,418

)

(7.7

)

Total

$

36,221,019

 

$

34,466,408

 

$

34,343,691

 

$

35,535,824

 

$

35,921,614

 

$

1,754,611

 

5.1

%

$

299,405

 

0.8

%

Composition of Deposits (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Change From

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

Jun. 30,

 

Mar. 31,

 

Dec. 31, 2020

Mar. 31, 2020

(Dollars in thousands)

2021

 

2020

 

2020

 

2020

 

2020

 

$

%

$

%

Noninterest-bearing deposits

$

12,394,753

 

$

11,036,086

 

$

10,691,041

 

$

10,480,245

 

$

8,237,916

 

$

1,358,667

 

12.3

%

$

4,156,837

 

50.5

%

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings

 

9,988,434

 

 

9,509,963

 

 

9,295,467

 

 

9,310,362

 

 

8,703,864

 

 

478,471

 

5.0

 

 

1,284,570

 

14.8

 

Checking

 

7,225,588

 

 

7,222,275

 

 

7,453,504

 

 

6,693,092

 

 

6,289,046

 

 

3,313

 

 

 

936,542

 

14.9

 

Money market

 

5,512,828

 

 

5,563,614

 

 

5,397,325

 

 

5,584,177

 

 

5,105,285

 

 

(50,786

)

(0.9

)

 

407,543

 

8.0

 

Certificates of deposit

 

4,665,211

 

 

5,524,381

 

 

6,334,760

 

 

7,142,996

 

 

7,463,192

 

 

(859,170

)

(15.6

)

 

(2,797,981

)

(37.5

)

Total interest-bearing deposits

 

27,392,061

 

 

27,820,233

 

 

28,481,056

 

 

28,730,627

 

 

27,561,387

 

 

(428,172

)

(1.5

)

 

(169,326

)

(0.6

)

Total deposits

$

39,786,814

 

$

38,856,319

 

$

39,172,097

 

$

39,210,872

 

$

35,799,303

 

$

930,495

 

2.4

%

$

3,987,511

 

11.1

%

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

 

 

 

 

 

 

 

 

Summary of Credit Quality Data

 

Allowance for Credit Losses (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

Jun. 30,

 

Mar. 31,

 

2021

 

2020

 

2020

 

2020

 

2020

(Dollars in thousands)

Balance

 

Reserve

Rate

 

Balance

 

Reserve

Rate

 

Balance

 

Reserve

Rate

 

Balance

 

Reserve

Rate

 

Balance

 

Reserve

Rate

Allowance for loan and lease losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

$

148,056

 

1.15

%

 

$

155,665

 

1.36

%

 

$

145,814

 

1.26

%

 

$

122,024

 

1.00

%

 

$

117,507

 

0.95

%

Commercial real estate

 

166,452

 

1.68

 

 

 

192,331

 

1.98

 

 

 

197,892

 

2.06

 

 

 

162,364

 

1.69

 

 

 

86,209

 

0.91

 

Lease financing

 

46,658

 

1.58

 

 

 

40,978

 

1.45

 

 

 

36,386

 

1.34

 

 

 

19,041

 

0.70

 

 

 

27,610

 

1.02

 

Residential mortgage

 

79,609

 

1.22

 

 

 

72,315

 

1.17

 

 

 

62,006

 

1.07

 

 

 

79,479

 

1.30

 

 

 

97,185

 

1.51

 

Home equity

 

48,251

 

1.68

 

 

 

45,761

 

1.47

 

 

 

49,003

 

1.48

 

 

 

56,824

 

1.65

 

 

 

57,694

 

1.67

 

Consumer installment

 

15,619

 

1.36

 

 

 

18,818

 

1.53

 

 

 

24,128

 

1.80

 

 

 

21,382

 

1.49

 

 

 

20,178

 

1.34

 

Total allowance for loan and lease losses

 

504,645

 

1.39

 

 

 

525,868

 

1.53

 

 

 

515,229

 

1.50

 

 

 

461,114

 

1.30

 

 

 

406,383

 

1.13

 

Reserve for unfunded lending commitments

 

21,909

 

 

 

 

23,313

 

 

 

 

34,129

 

 

 

 

42,788

 

 

 

 

22,188

 

 

Total allowance for credit losses

$

526,554

 

1.45

%

 

$

549,181

 

1.59

%

 

$

549,358

 

1.60

%

 

$

503,902

 

1.42

%

 

$

428,571

 

1.19

%

Changes in Allowance for Credit Losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Change From

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

Jun. 30,

 

Mar. 31,

 

Dec. 31,

 

Mar. 31,

(Dollars in thousands)

2021

 

2020

 

2020

 

2020

 

2020

 

2020

 

2020

Allowance for loan and lease losses

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

$

525,868

 

 

$

515,229

 

 

$

461,114

 

 

$

406,383

 

 

$

113,052

 

 

$

10,639

 

 

$

412,816

 

Impact of CECL adoption

 

 

 

 

 

 

 

 

 

 

 

 

 

205,992

 

 

 

 

 

 

(205,992

)

Adjusted balance, beginning of period

 

525,868

 

 

 

515,229

 

 

 

461,114

 

 

 

406,383

 

 

 

319,044

 

 

 

10,639

 

 

 

206,824

 

Charge-offs

 

(55,618

)

 

 

(29,593

)

 

 

(32,235

)

 

 

(9,958

)

 

 

(14,729

)

 

 

(26,025

)

 

 

(40,889

)

Recoveries

 

12,356

 

 

 

17,958

 

 

 

7,659

 

 

 

6,563

 

 

 

9,252

 

 

 

(5,602

)

 

 

3,104

 

Net (charge-offs) recoveries

 

(43,262

)

 

 

(11,635

)

 

 

(24,576

)

 

 

(3,395

)

 

 

(5,477

)

 

 

(31,627

)

 

 

(37,785

)

Provision for credit losses related to loans and leases(1)

 

21,960

 

 

 

22,634

 

 

 

78,323

 

 

 

58,126

 

 

 

92,990

 

 

 

(674

)

 

 

(71,030

)

Other(2)

 

79

 

 

 

(360

)

 

 

368

 

 

 

 

 

 

(174

)

 

 

439

 

 

 

253

 

Balance, end of period

 

504,645

 

 

 

525,868

 

 

 

515,229

 

 

 

461,114

 

 

 

406,383

 

 

 

(21,223

)

 

 

98,262

 

Reserve for unfunded lending commitments

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

23,313

 

 

 

34,129

 

 

 

42,788

 

 

 

22,188

 

 

 

3,528

 

 

 

(10,816

)

 

 

19,785

 

Impact of CECL adoption

 

 

 

 

 

 

 

 

 

 

 

 

 

14,707

 

 

 

 

 

 

(14,707

)

Adjusted balance, beginning of period

 

23,313

 

 

 

34,129

 

 

 

42,788

 

 

 

22,188

 

 

 

18,235

 

 

 

(10,816

)

 

 

5,078

 

Provision (benefit) for credit losses related to unfunded lending commitments(1)

 

(1,404

)

 

 

(10,816

)

 

 

(8,659

)

 

 

20,600

 

 

 

3,953

 

 

 

9,412

 

 

 

(5,357

)

Balance, end of period

 

21,909

 

 

 

23,313

 

 

 

34,129

 

 

 

42,788

 

 

 

22,188

 

 

 

(1,404

)

 

 

(279

)

Total allowance for credit losses

$

526,554

 

 

$

549,181

 

 

$

549,358

 

 

$

503,902

 

 

$

428,571

 

 

$

(22,627

)

 

$

97,983

 

(1)

Provision for credit losses related to loans and leases and the provision (benefit) for credit losses related to unfunded lending commitments are included within provision for credit losses in the Consolidated Statements of Income.

(2)

Primarily includes allowance for PCD acquisitions and the transfer of the allowance for credit losses to loans and leases held-for-sale.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Summary of Credit Quality Data (Unaudited), Continued

 

Net (Charge-offs) Recoveries

 

 

 

 

 

Quarter Ended

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

Jun. 30,

 

Mar. 31,

 

2021

 

2020

 

2020

 

2020

 

2020

(Dollars in thousands)

Balance

 

Rate(1)

 

Balance

 

Rate(1)

 

Balance

 

Rate(1)

 

Balance

 

Rate(1)

 

Balance

 

Rate(1)

Commercial and industrial

$

(20,476

)

 

0.67

%

 

$

(672

)

 

0.02

%

 

$

(22,201

)

 

0.76

%

 

$

9

 

 

%

 

$

(4,022

)

 

0.14

%

Commercial real estate

 

(18,389

)

 

0.75

 

 

 

(6,050

)

 

0.25

 

 

 

(144

)

 

0.01

 

 

 

(644

)

 

0.03

 

 

 

563

 

 

(0.02

)

Lease financing

 

(3,936

)

 

0.55

 

 

 

(1,748

)

 

0.26

 

 

 

(161

)

 

0.02

 

 

 

(1,392

)

 

0.21

 

 

 

(878

)

 

0.13

 

Residential mortgage

 

3,878

 

 

(0.25

)

 

 

216

 

 

(0.01

)

 

 

803

 

 

(0.05

)

 

 

(871

)

 

0.06

 

 

 

355

 

 

(0.02

)

Home equity

 

(2,864

)

 

0.38

 

 

 

(182

)

 

0.02

 

 

 

(237

)

 

0.03

 

 

 

(335

)

 

0.04

 

 

 

(246

)

 

0.03

 

Consumer installment

 

(1,475

)

 

0.49

 

 

 

(3,199

)

 

0.99

 

 

 

(2,636

)

 

0.76

 

 

 

(162

)

 

0.04

 

 

 

(1,249

)

 

0.33

 

Total net (charge-offs) recoveries

$

(43,262

)

 

0.49

%

 

$

(11,635

)

 

0.14

%

 

$

(24,576

)

 

0.28

%

 

$

(3,395

)

 

0.04

%

 

$

(5,477

)

 

0.06

%

(1)

Annualized net charge-off rate based on average loans and leases.

Over 90-Day Delinquencies as a Percentage of Portfolio(1)

 

 

 

 

 

 

 

 

 

 

 

Change From

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

Jun. 30,

 

Mar. 31,

 

Dec. 31,

Mar. 31,

 

2021

 

2020

 

2020

 

2020

 

2020

 

2020

2020

Commercial and industrial

0.02

%

 

0.01

%

 

0.03

%

 

0.02

%

 

%

 

1

 

bps

2

 

bps

Commercial real estate

 

 

 

 

 

 

 

 

0.02

 

 

 

 

(2)

 

 

Lease financing

0.17

 

 

0.14

 

 

0.13

 

 

0.18

 

 

0.11

 

 

3

 

 

6

 

 

Residential mortgage

0.03

 

 

0.03

 

 

0.02

 

 

0.01

 

 

0.01

 

 

 

 

2

 

 

Home equity

 

 

 

 

 

 

 

 

0.01

 

 

 

 

(1)

 

 

Consumer installment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total delinquencies

0.03

%

 

0.02

%

 

0.02

%

 

0.02

%

 

0.02

%

 

1

 

 

1

 

 

(1)

Excludes nonaccrual loans and leases.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Summary of Credit Quality Data (Unaudited), Continued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming Assets

 

 

 

 

 

 

 

 

 

 

 

 

Change From

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

Jun. 30,

 

Mar. 31,

 

Dec. 31,

Mar. 31,

(Dollars in thousands)

2021

 

2020

 

2020

 

2020

 

2020

 

2020

2020

Nonaccrual loans and leases:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

$

239,987

 

 

$

259,439

 

 

$

140,492

 

 

$

98,184

 

 

$

84,157

 

 

$

(19,452

)

 

 

$

155,830

 

 

 

Commercial real estate

 

188,420

 

 

 

154,439

 

 

 

70,252

 

 

 

57,521

 

 

 

47,032

 

 

 

33,981

 

 

 

 

141,388

 

 

 

Lease financing

 

93,958

 

 

 

90,822

 

 

 

42,023

 

 

 

18,756

 

 

 

13,170

 

 

 

3,136

 

 

 

 

80,788

 

 

 

Total commercial

 

522,365

 

 

 

504,700

 

 

 

252,767

 

 

 

174,461

 

 

 

144,359

 

 

 

17,665

 

 

 

 

378,006

 

 

 

Residential mortgage

 

76,533

 

 

 

97,653

 

 

 

65,235

 

 

 

67,762

 

 

 

61,980

 

 

 

(21,120

)

 

 

 

14,553

 

 

 

Home equity

 

72,941

 

 

 

69,383

 

 

 

52,184

 

 

 

47,560

 

 

 

43,147

 

 

 

3,558

 

 

 

 

29,794

 

 

 

Consumer installment

 

6,062

 

 

 

5,566

 

 

 

6,535

 

 

 

1,668

 

 

 

989

 

 

 

496

 

 

 

 

5,073

 

 

 

Total consumer

 

155,536

 

 

 

172,602

 

 

 

123,954

 

 

 

116,990

 

 

 

106,116

 

 

 

(17,066

)

 

 

 

49,420

 

 

 

Total nonaccrual loans and leases

 

677,901

 

 

 

677,302

 

 

 

376,721

 

 

 

291,451

 

 

 

250,475

 

 

 

599

 

 

 

 

427,426

 

 

 

Other real estate owned

 

32,115

 

 

 

33,192

 

 

 

35,554

 

 

 

42,744

 

 

 

38,914

 

 

 

(1,077

)

 

 

 

(6,799

)

 

 

Total nonperforming assets

$

710,016

 

 

$

710,494

 

 

$

412,275

 

 

$

334,195

 

 

$

289,389

 

 

$

(478

)

 

 

$

420,627

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans and leases as a percentage of total loans and leases

 

1.87

%

 

 

1.97

%

 

 

1.10

%

 

 

0.82

%

 

 

0.70

%

 

 

(10

)

 

bps

 

117

 

 

bps

Allowance for loan and lease losses as a percentage of nonaccrual loans and leases

 

74.44

 

 

 

77.64

 

 

 

136.77

 

 

 

158.21

 

 

 

162.24

 

 

 

(320

)

 

 

 

(8,780

)

 

 

Allowance for credit losses as a percentage of nonaccrual loans and leases

 

77.67

 

 

 

81.08

 

 

 

145.83

 

 

 

172.89

 

 

 

171.10

 

 

 

(341

)

 

 

 

(9,343

)

 

 

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

 

1.96

 

 

 

2.06

 

 

 

1.20

 

 

 

0.94

 

 

 

0.80

 

 

 

(10

)

 

 

 

116

 

 

 

Consolidated Capital Information (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change From

(Dollars in thousands, except per share data)

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

Jun. 30,

 

Mar. 31,

 

Dec. 31,

 

Mar. 31,

2021

 

2020

 

2020

 

2020

 

2020

 

2020

 

2020

Book value per common share

$

35.33

 

 

$

36.06

 

 

$

35.88

 

 

$

35.91

 

 

$

35.85

 

 

(2.0

)

%

(1.5

)

%

Tangible book value per common share(1)

 

25.31

 

 

 

26.49

 

 

 

26.27

 

 

 

26.25

 

 

 

26.16

 

 

(4.5

)

 

(3.2

)

 

Common equity to assets

 

10.91

%

 

 

11.51

%

 

 

11.50

%

 

 

10.92

%

 

 

11.23

%

 

(60

)

bps

(32

)

bps

Tangible common equity to tangible assets(1)

 

8.06

 

 

 

8.72

 

 

 

8.68

 

 

 

8.22

 

 

 

8.45

 

 

(66

)

 

(39

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory Capital:(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital

$

4,101,896

 

 

$

4,103,007

 

 

$

4,053,931

 

 

$

4,028,681

 

 

$

4,026,304

 

 

0.0

 

%

1.9

 

%

Tier 1 capital

 

4,299,135

 

 

 

4,290,793

 

 

 

4,244,609

 

 

 

4,221,283

 

 

 

4,225,755

 

 

0.2

 

 

1.7

 

 

Total capital

 

4,994,676

 

 

 

5,026,611

 

 

 

4,972,715

 

 

 

4,907,760

 

 

 

4,744,899

 

 

(0.6

)

 

5.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital ratio

 

11.06

%

 

 

11.45

%

 

 

11.45

%

 

 

11.06

%

 

 

10.44

%

 

(39

)

bps

62

 

bps

Tier 1 risk-based capital ratio

 

11.59

 

 

 

11.98

 

 

 

11.98

 

 

 

11.59

 

 

 

10.96

 

 

(39

)

 

63

 

 

Total risk-based capital ratio

 

13.47

 

 

 

14.03

 

 

 

14.04

 

 

 

13.47

 

 

 

12.31

 

 

(56

)

 

116

 

 

Tier 1 leverage ratio

 

9.09

 

 

 

9.34

 

 

 

8.83

 

 

 

8.75

 

 

 

9.27

 

 

(25

)

 

(18

)

 

(1)

See "Reconciliation of GAAP to Non-GAAP Financial Measures" tables.

(2)

March 31, 2021 amounts are preliminary pending completion and filing of the Corporation's regulatory reports. Regulatory capital ratios presented reflect our election of the five-year CECL transition for regulatory capital purposes.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Computation of adjusted diluted earnings per common share and adjusted net income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

Jun. 30,

 

Mar. 31,

(Dollars in thousands, except per share data)

 

2021

 

2020

 

2020

 

2020

 

2020

Net income available to common shareholders

(a)

$

120,843

 

 

$

88,864

 

 

$

53,244

 

 

$

21,270

 

 

$

49,406

 

Merger-related expenses

 

 

16,216

 

 

 

31,530

 

 

 

54,011

 

 

 

81,619

 

 

 

36,728

 

Notable items:

 

 

 

 

 

 

 

 

 

 

Sale of legacy TCF auto finance portfolio and related expenses(1)

 

 

 

 

 

 

 

 

 

 

 

901

 

 

 

3,063

 

Gains on sales of branches, write-down of company-owned vacant land parcels and branch exit costs, net(2)

 

 

 

 

 

 

 

 

 

 

 

(14,166

)

 

 

 

Loan servicing rights (recovery) impairment(3)

 

 

(7,637

)

 

 

357

 

 

 

154

 

 

 

8,858

 

 

 

8,236

 

Total notable items

 

 

(7,637

)

 

 

357

 

 

 

154

 

 

 

(4,407

)

 

 

11,299

 

Total merger-related and notable items

 

 

8,579

 

 

 

31,887

 

 

 

54,165

 

 

 

77,212

 

 

 

48,027

 

Related income tax expense, net of benefits(4)

 

 

(1,841

)

 

 

(7,191

)

 

 

(11,207

)

 

 

(16,114

)

 

 

(10,071

)

Total adjustments, net of tax

 

 

6,738

 

 

 

24,696

 

 

 

42,958

 

 

 

61,098

 

 

 

37,956

 

Adjusted earnings allocated to common stock

(b)

$

127,581

 

 

$

113,560

 

 

$

96,202

 

 

$

82,368

 

 

$

87,362

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding used in diluted earnings per common share calculation

(c)

 

152,540,687

 

 

 

152,084,428

 

 

 

151,821,592

 

 

 

151,660,139

 

 

 

152,114,017

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

(a)/(c)

$

0.79

 

 

$

0.58

 

 

$

0.35

 

 

$

0.14

 

 

$

0.32

 

Adjusted diluted earnings per common share

(b)/(c)

 

0.84

 

 

 

0.75

 

 

 

0.63

 

 

 

0.54

 

 

 

0.57

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to TCF

 

$

123,336

 

 

$

91,358

 

 

$

55,738

 

 

$

23,764

 

 

$

51,899

 

Total adjustments, net of tax

 

 

6,738

 

 

 

24,696

 

 

 

42,958

 

 

 

61,098

 

 

 

37,956

 

Adjusted net income attributable to TCF

 

$

130,074

 

 

$

116,054

 

 

$

98,696

 

 

$

84,862

 

 

$

89,855

 

(1)

Second quarter 2020 amount included within other noninterest expense ($0.8 million) and compensation and employee benefits ($0.1 million). First quarter 2020 amount included within occupancy and equipment ($1.6 million), compensation and employee benefits ($0.9 million) and other noninterest expense ($0.6 million).

(2)

Second quarter 2020 amount included within other noninterest income ($14.7 million net gain) and other noninterest expense ($0.6 million).

(3)

Included within mortgage banking income.

(4)

Included within income tax expense (benefit).

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited), Continued

 

 

 

 

 

 

 

 

 

 

 

Computation of adjusted return on average assets, common equity and average tangible common equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

Jun. 30,

 

Mar. 31,

(Dollars in thousands)

 

2021

 

2020

 

2020

 

2020

 

2020

Adjusted net income after income tax expense (benefit):

 

 

 

 

 

 

 

 

 

 

Income after tax expense

(a)

$

125,109

 

 

$

92,690

 

 

$

57,302

 

 

$

26,233

 

 

$

53,816

 

Merger-related expenses

 

 

16,216

 

 

 

31,530

 

 

 

54,011

 

 

 

81,619

 

 

 

36,728

 

Notable items

 

 

(7,637

)

 

 

357

 

 

 

154

 

 

 

(4,407

)

 

 

11,299

 

Related income tax expense, net of tax benefits

 

 

(1,841

)

 

 

(7,191

)

 

 

(11,207

)

 

 

(16,114

)

 

 

(10,071

)

Adjusted net income after income tax expense (benefit) for adjusted ROAA calculation

(b)

 

131,847

 

 

 

117,386

 

 

 

100,260

 

 

 

87,331

 

 

 

91,772

 

Net income available to common shareholders

(c)

 

120,843

 

 

 

88,864

 

 

 

53,244

 

 

 

21,270

 

 

 

49,406

 

Other intangibles amortization

 

 

5,168

 

 

 

5,498

 

 

 

5,498

 

 

 

5,516

 

 

 

5,480

 

Related income tax expense

 

 

(1,109

)

 

 

(1,240

)

 

 

(1,137

)

 

 

(1,151

)

 

 

(1,149

)

Adjusted net income available to common shareholders used in adjusted ROATCE calculation

(d)

 

124,902

 

 

 

93,122

 

 

 

57,605

 

 

 

25,635

 

 

 

53,737

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income available to common shareholders:

 

 

 

 

 

 

 

 

 

 

Net income available to common shareholders

 

 

120,843

 

 

 

88,864

 

 

 

53,244

 

 

 

21,270

 

 

 

49,406

 

Notable items

 

 

(7,637

)

 

 

357

 

 

 

154

 

 

 

(4,407

)

 

 

11,299

 

Merger-related expenses

 

 

16,216

 

 

 

31,530

 

 

 

54,011

 

 

 

81,619

 

 

 

36,728

 

Related income tax expense, net of tax benefits

 

 

(1,841

)

 

 

(7,191

)

 

 

(11,207

)

 

 

(16,114

)

 

 

(10,071

)

Adjusted net income available to common shareholders used in adjusted ROACE calculation

(e)

 

127,581

 

 

 

113,560

 

 

 

96,202

 

 

 

82,368

 

 

 

87,362

 

Other intangibles amortization

 

 

5,168

 

 

 

5,498

 

 

 

5,498

 

 

 

5,516

 

 

 

5,480

 

Related income tax expense

 

 

(1,109

)

 

 

(1,240

)

 

 

(1,137

)

 

 

(1,151

)

 

 

(1,149

)

Adjusted net income available to common shareholders used in adjusted ROATCE calculation

(f)

 

131,640

 

 

 

117,818

 

 

 

100,563

 

 

 

86,733

 

 

 

91,693

 

Average balances:

 

 

 

 

 

 

 

 

 

 

Average assets

(g)

 

48,750,758

 

 

 

47,361,520

 

 

 

49,539,600

 

 

 

49,716,116

 

 

 

46,985,426

 

Total equity

 

 

5,696,284

 

 

 

5,707,191

 

 

 

5,697,727

 

 

 

5,658,255

 

 

 

5,630,487

 

Non-controlling interest in subsidiaries

 

 

(22,630

)

 

 

(19,995

)

 

 

(22,638

)

 

 

(28,122

)

 

 

(25,328

)

Total TCF Financial Corporation shareholders' equity

 

 

5,673,654

 

 

 

5,687,196

 

 

 

5,675,089

 

 

 

5,630,133

 

 

 

5,605,159

 

Preferred stock

 

 

(169,302

)

 

 

(169,302

)

 

 

(169,302

)

 

 

(169,302

)

 

 

(169,302

)

Average total common shareholders' equity used in ROACE calculation

(h)

 

5,504,352

 

 

 

5,517,894

 

 

 

5,505,787

 

 

 

5,460,831

 

 

 

5,435,857

 

Goodwill, net

 

 

(1,363,039

)

 

 

(1,313,046

)

 

 

(1,313,046

)

 

 

(1,313,046

)

 

 

(1,301,080

)

Other intangibles, net

 

 

(146,763

)

 

 

(149,140

)

 

 

(155,142

)

 

 

(160,841

)

 

 

(166,298

)

Average tangible common shareholders' equity used in ROATCE calculation

(i)

$

3,994,550

 

 

$

4,055,708

 

 

$

4,037,599

 

 

$

3,986,944

 

 

$

3,968,479

 

 

 

 

 

 

 

 

 

 

 

 

ROAA(1)

(a)/(g)

 

1.03

%

 

 

0.78

%

 

 

0.46

%

 

 

0.21

%

 

 

0.46

%

Adjusted ROAA(1)

(b)/(g)

 

1.08

 

 

 

0.99

 

 

 

0.81

 

 

 

0.70

 

 

 

0.78

 

ROACE(1)

(c)/(h)

 

8.78

 

 

 

6.44

 

 

 

3.87

 

 

 

1.56

 

 

 

3.64

 

Adjusted ROACE(1)

(e)/(h)

 

9.27

 

 

 

8.23

 

 

 

6.99

 

 

 

6.03

 

 

 

6.43

 

ROATCE(1)

(d)/(i)

 

12.51

 

 

 

9.18

 

 

 

5.71

 

 

 

2.57

 

 

 

5.42

 

Adjusted ROATCE(1)

(f)/(i)

 

13.18

 

 

 

11.62

 

 

 

9.96

 

 

 

8.70

 

 

 

9.24

 

(1)

Annualized.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited), Continued

 

 

 

 

 

 

 

 

 

 

 

Computation of adjusted efficiency ratio, interest income, noninterest income and noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

Jun. 30,

 

Mar. 31,

(Dollars in thousands)

 

2021

 

2020

 

2020

 

2020

 

2020

Noninterest expense

(a)

$

348,682

 

 

$

379,091

 

 

$

373,440

 

 

$

400,241

 

 

$

374,599

 

Merger-related expenses

 

 

(16,216

)

 

 

(31,530

)

 

 

(54,011

)

 

 

(81,619

)

 

 

(36,728

)

Write-down of company-owned vacant land parcels and branch exit costs

 

 

 

 

 

 

 

 

 

 

 

(551

)

 

 

 

Expenses related to the sale of Legacy TCF auto finance portfolio

 

 

 

 

 

 

 

 

 

 

 

(901

)

 

 

(3,063

)

Adjusted noninterest expense

 

 

332,466

 

 

 

347,561

 

 

 

319,429

 

 

 

317,170

 

 

 

334,808

 

Lease financing equipment depreciation

 

 

(20,426

)

 

 

(18,610

)

 

 

(17,932

)

 

 

(18,212

)

 

 

(18,450

)

Amortization of intangibles

 

 

(5,168

)

 

 

(5,498

)

 

 

(5,498

)

 

 

(5,516

)

 

 

(5,480

)

Historic tax credit amortization

 

 

(543

)

 

 

(3,591

)

 

 

(1,758

)

 

 

(179

)

 

 

(1,521

)

Adjusted noninterest expense, efficiency ratio

(b)

 

306,329

 

 

 

319,862

 

 

 

294,241

 

 

 

293,263

 

 

 

309,357

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

381,827

 

 

 

381,394

 

 

 

377,167

 

 

 

378,359

 

 

 

401,481

 

Noninterest income

 

 

132,060

 

 

 

127,236

 

 

 

118,810

 

 

 

133,054

 

 

 

136,963

 

Total revenue

(c)

 

513,887

 

 

 

508,630

 

 

 

495,977

 

 

 

511,413

 

 

 

538,444

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income

 

 

132,060

 

 

 

127,236

 

 

 

118,810

 

 

 

133,054

 

 

 

136,963

 

Gain on sales of branches

 

 

 

 

 

 

 

 

 

 

 

(14,717

)

 

 

 

Loan servicing rights (recovery) impairment

 

 

(7,637

)

 

 

357

 

 

 

154

 

 

 

8,858

 

 

 

8,236

 

Adjusted noninterest income

 

 

124,423

 

 

 

127,593

 

 

 

118,964

 

 

 

127,195

 

 

 

145,199

 

Net interest income

 

 

381,827

 

 

 

381,394

 

 

 

377,167

 

 

 

378,359

 

 

 

401,481

 

Adjustments for taxable equivalent interest (FTE)

 

 

2,810

 

 

 

3,228

 

 

 

2,844

 

 

 

3,032

 

 

 

2,983

 

Net interest income (FTE)

 

 

384,637

 

 

 

384,622

 

 

 

380,011

 

 

 

381,391

 

 

 

404,464

 

Lease financing equipment depreciation

 

 

(20,426

)

 

 

(18,610

)

 

 

(17,932

)

 

 

(18,212

)

 

 

(18,450

)

Adjusted total revenue, efficiency ratio

(d)

$

488,634

 

 

$

493,605

 

 

$

481,043

 

 

$

490,374

 

 

$

531,213

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio

(a)/(c)

 

67.85

%

 

 

74.53

%

 

 

75.29

%

 

 

78.26

%

 

 

69.57

%

Adjusted efficiency ratio

(b)/(d)

 

62.69

 

 

 

64.80

 

 

 

61.17

 

 

 

59.80

 

 

 

58.24

 

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited), Continued

 

 

 

 

 

 

 

 

 

Computation of adjusted net interest income and margin:

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Mar. 31,

 

Dec. 31,

Sep. 30,

 

Jun. 30,

 

Mar. 31,

(Dollars in thousands)

2021

 

2020

2020

 

2020

 

2020

Net interest income

$

381,827

 

 

$

381,394

 

$

377,167

 

 

$

378,359

 

 

$

401,481

 

Adjustments for taxable equivalent interest (FTE)

 

2,810

 

 

 

3,228

 

 

2,844

 

 

 

3,032

 

 

 

2,983

 

Net interest income (FTE)

 

384,637

 

 

 

384,622

 

 

380,011

 

 

 

381,391

 

 

 

404,464

 

Purchase accounting accretion and amortization(1)

 

(15,043

)

 

 

(22,997

)

 

(17,710

)

 

 

(18,209

)

 

 

(25,258

)

Net fees recognized on PPP loans

 

(14,607

)

 

 

(16,071

)

 

(11,886

)

 

 

(7,805

)

 

 

 

Interest recognition on PPP loans(2)

 

(3,201

)

 

 

(3,051

)

 

(2,824

)

 

 

(1,759

)

 

 

 

Total PPP loans impact

 

(17,808

)

 

 

(19,122

)

 

(14,710

)

 

 

(9,564

)

 

 

 

Adjusted net interest income (FTE), excluding purchase accounting accretion and amortization and PPP impact

$

351,786

 

 

$

342,503

 

$

347,591

 

 

$

353,618

 

 

$

379,206

 

Net interest margin (GAAP)

 

3.45

%

 

 

3.53

%

 

3.31

%

 

 

3.33

%

 

 

3.73

%

FTE impact

 

0.02

 

 

 

0.02

 

 

0.03

 

 

 

0.02

 

 

 

0.03

 

Net interest margin (FTE)

 

3.47

 

 

 

3.55

 

 

3.34

 

 

 

3.35

 

 

 

3.76

 

Purchase accounting accretion and amortization impact

 

(0.14

)

 

 

(0.21

)

 

(0.16

)

 

 

(0.16

)

 

 

(0.23

)

PPP loans impact(3)

 

(0.03

)

 

 

(0.04

)

 

0.01

 

 

 

0.01

 

 

 

 

Adjusted net interest margin (FTE), excluding purchase accounting accretion and amortization and PPP loans impact

 

3.30

%

 

 

3.30

%

 

3.19

%

 

 

3.20

%

 

 

3.53

%

(1)

Includes purchase accounting accretion and amortization resulting from the TCF/Chemical merger.

(2)

Interest income recorded on PPP loans less funding costs.

(3)

The exclusion of PPP loans additionally reduces average earning assets by $1.7 billion in the first quarter of 2021 and by $1.7 billion, $1.8 billion and $1.2 billion in the fourth, third and second quarters of 2020, respectively.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

Jun. 30,

 

Mar. 31,

(Dollars in thousands, except per share data)

 

2021

 

2020

 

2020

 

2020

 

2020

Total equity

 

$

5,591,771

 

 

$

5,689,297

 

 

$

5,658,420

 

 

$

5,658,555

 

 

$

5,655,833

 

Non-controlling interest in subsidiaries

 

 

(27,937

)

 

 

(18,484

)

 

 

(21,376

)

 

 

(23,300

)

 

 

(30,149

)

Total TCF Financial Corporation shareholders' equity

 

 

5,563,834

 

 

 

5,670,813

 

 

 

5,637,044

 

 

 

5,635,255

 

 

 

5,625,684

 

Preferred stock

 

 

(169,302

)

 

 

(169,302

)

 

 

(169,302

)

 

 

(169,302

)

 

 

(169,302

)

Total common stockholders' equity

(a)

 

5,394,532

 

 

 

5,501,511

 

 

 

5,467,742

 

 

 

5,465,953

 

 

 

5,456,382

 

Goodwill, net

 

 

(1,379,890

)

 

 

(1,313,046

)

 

 

(1,313,046

)

 

 

(1,313,046

)

 

 

(1,313,046

)

Other intangibles, net

 

 

(149,438

)

 

 

(146,377

)

 

 

(151,875

)

 

 

(157,373

)

 

 

(162,887

)

Tangible common shareholders' equity

(b)

 

3,865,204

 

 

 

4,042,088

 

 

 

4,002,821

 

 

 

3,995,534

 

 

 

3,980,449

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

(c)

 

49,459,551

 

 

 

47,802,487

 

 

 

47,565,789

 

 

 

50,062,460

 

 

 

48,594,383

 

Goodwill, net

 

 

(1,379,890

)

 

 

(1,313,046

)

 

 

(1,313,046

)

 

 

(1,313,046

)

 

 

(1,313,046

)

Other intangibles, net

 

 

(149,438

)

 

 

(146,377

)

 

 

(151,875

)

 

 

(157,373

)

 

 

(162,887

)

Tangible assets

(d)

$

47,930,223

 

 

$

46,343,064

 

 

$

46,100,868

 

 

$

48,592,041

 

 

$

47,118,450

 

 

 

 

 

 

 

 

 

 

 

 

Common stock shares outstanding

(e)

 

152,696,133

 

 

 

152,565,504

 

 

 

152,379,722

 

 

 

152,233,106

 

 

 

152,185,984

 

 

 

 

 

 

 

 

 

 

 

 

Common equity to assets

(a) / (c)

 

10.91

%

 

 

11.51

%

 

 

11.50

%

 

 

10.92

%

 

 

11.23

%

Tangible common equity to tangible assets

(b) / (d)

 

8.06

 

 

 

8.72

 

 

 

8.68

 

 

 

8.22

 

 

 

8.45

 

 

 

 

 

 

 

 

 

 

 

 

Book value per common share

(a) / (e)

$

35.33

 

 

$

36.06

 

 

$

35.88

 

 

$

35.91

 

 

$

35.85

 

Tangible book value per common share

(b) / (e)

 

25.31

 

 

 

26.49

 

 

 

26.27

 

 

 

26.25

 

 

 

26.16

 

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited), Continued

 

 

 

 

Computation of loans and leases and the related allowance for credit losses excluding PPP

 

 

 

 

 

Quarter Ended

 

Change From

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

Jun. 30,

 

Mar. 31,

 

Dec. 31, 2020

(Dollars in thousands)

2021

 

2020

 

2020

 

2020

 

2020

 

$

%

Commercial and industrial

$

12,856,701

 

 

$

11,422,383

 

 

$

11,557,237

 

 

$

12,200,721

 

 

$

12,326,943

 

 

$

1,434,318

 

12.6

%

Commercial real estate

 

9,881,341

 

 

 

9,702,587

 

 

 

9,627,330

 

 

 

9,628,344

 

 

 

9,486,904

 

 

 

178,754

 

1.8

 

Lease financing

 

2,956,626

 

 

 

2,817,231

 

 

 

2,724,686

 

 

 

2,707,402

 

 

 

2,708,998

 

 

 

139,395

 

4.9

 

Total commercial loan and lease portfolio

 

25,694,668

 

 

 

23,942,201

 

 

 

23,909,253

 

 

 

24,536,467

 

 

 

24,522,845

 

 

 

1,752,467

 

7.3

 

Residential mortgage

 

6,510,981

 

 

 

6,182,045

 

 

 

5,790,251

 

 

 

6,123,118

 

 

 

6,435,314

 

 

 

328,936

 

5.3

 

Home equity

 

2,864,142

 

 

 

3,108,736

 

 

 

3,302,983

 

 

 

3,445,584

 

 

 

3,453,502

 

 

 

(244,594

)

(7.9

)

Consumer installment

 

1,151,228

 

 

 

1,233,426

 

 

 

1,341,204

 

 

 

1,430,655

 

 

 

1,509,953

 

 

 

(82,198

)

(6.7

)

Total consumer loan portfolio

 

10,526,351

 

 

 

10,524,207

 

 

 

10,434,438

 

 

 

10,999,357

 

 

 

11,398,769

 

 

 

2,144

 

0.0

 

Total loans and leases

 

36,221,019

 

 

 

34,466,408

 

 

 

34,343,691

 

 

 

35,535,824

 

 

 

35,921,614

 

 

 

1,754,611

 

5.1

 

PPP (Commercial and industrial)

 

1,865,319

 

 

 

1,553,908

 

 

 

1,836,850

 

 

 

1,819,469

 

 

 

 

 

 

311,411

 

20.0

 

Loans and leases excluding PPP loans

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

10,991,382

 

 

 

9,868,475

 

 

 

9,720,387

 

 

 

10,381,252

 

 

 

12,326,943

 

 

 

1,122,907

 

11.4

 

Commercial real estate

 

9,881,341

 

 

 

9,702,587

 

 

 

9,627,330

 

 

 

9,628,344

 

 

 

9,486,904

 

 

 

178,754

 

1.8

 

Lease financing

 

2,956,626

 

 

 

2,817,231

 

 

 

2,724,686

 

 

 

2,707,402

 

 

 

2,708,998

 

 

 

139,395

 

4.9

 

Total commercial loan and lease portfolio

 

23,829,349

 

 

 

22,388,293

 

 

 

22,072,403

 

 

 

22,716,998

 

 

 

24,522,845

 

 

 

1,441,056

 

6.4

 

Residential mortgage

 

6,510,981

 

 

 

6,182,045

 

 

 

5,790,251

 

 

 

6,123,118

 

 

 

6,435,314

 

 

 

328,936

 

5.3

 

Home equity

 

2,864,142

 

 

 

3,108,736

 

 

 

3,302,983

 

 

 

3,445,584

 

 

 

3,453,502

 

 

 

(244,594

)

(7.9

)

Consumer installment

 

1,151,228

 

 

 

1,233,426

 

 

 

1,341,204

 

 

 

1,430,655

 

 

 

1,509,953

 

 

 

(82,198

)

(6.7

)

Total consumer loan portfolio

 

10,526,351

 

 

 

10,524,207

 

 

 

10,434,438

 

 

 

10,999,357

 

 

 

11,398,769

 

 

 

2,144

 

0.0

 

Total loans and leases, excluding PPP loans

$

34,355,700

 

 

$

32,912,500

 

 

$

32,506,841

 

 

$

33,716,355

 

 

$

35,921,614

 

 

$

1,443,200

 

4.4

 

Allowance for credit losses

$

526,554

 

 

$

549,181

 

 

$

549,358

 

 

$

503,902

 

 

$

428,571

 

 

$

(22,627

)

(4.1

)%

Allowance for credit losses as a % of total loans and leases

 

1.45

%

 

 

1.59

%

 

 

1.60

%

 

 

1.42

%

 

 

1.19

%

 

 

(14

)

bps

 

Allowance for credit losses as a % of loans and leases, excluding PPP loans

 

1.53

 

 

 

1.67

 

 

 

1.69

 

 

 

1.49

 

 

 

1.19

 

 

 

(14

)

 

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Source: TCF Financial Corporation

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