Table 4 - Credit Trends (Graphic: TCF Financial Corporation)

TCF Financial Corporation (NYSE: TCB):

THIRD QUARTER HIGHLIGHTS
  • Net interest margin of 4.85 percent, up 89 bps from third quarter 2011
  • Pre-tax pre-provision profit of $115.8 million, up 10.3 percent from third quarter 2011
  • Over 60-day accruing delinquent loans improved by $10.4 million from the second quarter of 2012
  • Provision for credit losses of $96.3 million includes $31.5 million related to regulatory guidance
  • Total loans and leases of $15.2 billion, increase of 6.1 percent from September 30, 2011
  • Announced common and preferred stock dividend payments, payable November 30, 2012 and December 3, 2012, respectively
                                                         
Summary of Financial Results                                                  

 
 

Table 1
($ in thousands, except per-share data)         Percent Change      
3Q 2Q

3Q

3Q12 vs
  3Q12 vs

YTD

YTD

Percent

2012
 

2012
 

2011
 

2Q12
 

3Q11
 

2012(3)
   

2011
 

Change
Net income (loss) $ 9,322 $ 31,531 $ 32,255 (70.4 ) % (71.1 ) % $ (242,041 ) $ 92,951 N.M. %
Net interest income 200,559 198,224 176,064 1.2 13.9 578,956 526,254 10.0
Pre-tax pre-provision profit(1) 115,809 108,117 104,972 7.1 10.3 371,471 295,480 25.72
Diluted earnings (loss) per common share .06 .20 .20 (70.0 ) (70.0 ) (1.52 ) .60 N.M.
 

Financial Ratios(2)
Return on average assets .30 % .76 % .71 % (1.73 ) % .69 %
Return on average common equity 2.36 8.13 7.12 (19.50 ) 7.33
Net interest margin 4.85 4.86 3.96 4.61 4.01

Net charge-offs as a percentage of average loans and leases
2.74 1.18 1.48 1.67 1.39
 
N.M. = Not meaningful.

(1) Pre-tax pre-provision profit ("PTPP") is calculated as total revenues less non-interest expense. Year-to-date 2012 PTPP excludes the net loss of $473.8 million related to the balance sheet repositioning completed in the first quarter of 2012.
(2) Annualized.
(3) Includes a net, after-tax charge of $295.8 million, or $1.87 per share, related to repositioning certain investments and borrowings.
 

TCF Financial Corporation (“TCF”) (NYSE: TCB) today reported net income for the third quarter of 2012 of $9.3 million, compared with net income of $32.3 million in the third quarter of 2011 and net income of $31.5 million for the second quarter of 2012. Net income for the third quarter of 2012 included a net after-tax charge of $20.6 million, or 13 cents per common share, related to the implementation of clarifying regulatory guidance requiring loans subject to a borrower’s discharge from personal liability following Chapter 7 bankruptcy, to be reported as non-accrual loans, and written down to the estimated collateral value, regardless of delinquency status. Of these loans, 93 percent were less than 60 days past due on their payments as of September 30, 2012. Diluted earnings per common share was 6 cents for the third quarter of 2012, compared with diluted earnings per common share of 20 cents in both the third quarter of 2011 and the second quarter of 2012.

TCF reported a net loss of $242 million for the first nine months of 2012, compared with net income of $93 million for the same period in 2011. The net loss for the first nine months of 2012 included a net, after-tax charge of $295.8 million, or $1.87 per common share, related to a balance sheet repositioning involving certain investments and borrowings as well as the after-tax charge of $20.6 million, or 13 cents per common share, related to the implementation of clarifying bankruptcy-related regulatory guidance. Diluted loss per common share for the first nine months of 2012 was $1.52, compared with diluted earnings per common share of 60 cents for the same period in 2011.

TCF declared a quarterly cash dividend of 5 cents per common share payable on November 30, 2012 to stockholders of record at the close of business on November 15, 2012. TCF also declared a dividend on its 7.50 percent Series A Non-cumulative Perpetual Preferred Stock payable on December 3, 2012, to stockholders of record at the close of business on November 15, 2012.

Chairman’s Statement

“TCF’s third quarter results were impacted by incremental charge-offs reported in accordance with regulatory guidance and by increased provision in the commercial portfolio as we aggressively addressed credit issues in the area,” said William A. Cooper, Chairman and Chief Executive Officer. “While these credit-related items were notable in the third quarter, there has been much accomplished throughout the bank in the first nine months of 2012, a building and investing year for TCF.

“We continue to experience the benefits of the first quarter repositioning of our balance sheet with increased net interest margin, reduction of mark-to-market risk on securities and a pre-tax pre-provision profit that is one of the strongest in the industry. In addition, our national lending businesses continue to contribute to the bottom line with Gateway One, our new auto finance business, being integrated into TCF and originating high quality loans into the portfolio and our inventory finance business completing the integration of our BRP relationship; increasing outstanding balances in a challenging growth market.

“Another encouraging sign was our success in bringing back Free Checking. Upon review of the first full quarter impact, we saw the results we expected with increased checking account production, decreased attrition and overall net checking account growth.

“While the third quarter results were not what we anticipated due to the impact of the adoption of the clarifying regulatory guidance, we believe we are on the right track as we work through the remainder of 2012 and move forward with our strategy into 2013.”

Revenue
 
                                                               
Total Revenue                                                      

Table 2
          Percent Change      
3Q 2Q 3Q 3Q12 vs   3Q12 vs YTD YTD Percent
($ in thousands)   2012   2012   2011   2Q12   3Q11   2012   2011   Change
Net interest income $ 200,559     $ 198,224     $ 176,064 1.2 % 13.9 % $ 578,956     $ 526,254 10.0 %
Fees and other revenue:
Fees and service charges 43,745 48,090 58,452 (9.0 ) (25.2 ) 133,691 168,361 (20.6 )
Card revenue 12,927 13,530 27,701 (4.5 ) (53.3 ) 39,664 82,504 (51.9 )
ATM revenue   6,122       6,276       7,523 (2.5 ) (18.6 )   18,597       21,319 (12.8 )
Total banking fees 62,794 67,896 93,676 (7.5 ) (33.0 ) 191,952 272,184 (29.5 )
Leasing and equipment finance 20,498 23,207 21,646 (11.7 ) (5.3 ) 66,572 70,675 (5.8 )
Gains on sales of auto loans 7,486 5,496 - 36.2 N.M. 15,232 - N.M.
Gain on sale of consumer real estate loans 4,559 - - N.M. N.M. 4,559 - N.M.
Other   3,688       3,168       786

16.4
N.M.   9,211       1,864 N.M.
Total fees and other revenue   99,025       99,767       116,108 (.7 ) (14.7 )   287,526       344,723 (16.6 )
Subtotal 299,584 297,991 292,172 .5 2.5 866,482 870,977 (.5 )
Gains on securities, net   13,033       13,116       1,648 (.6 ) N.M.   102,760       1,421 N.M.
Total revenue $ 312,617     $ 311,107     $ 293,820 .5 6.4 $ 969,242     $ 872,398 11.1
 
Net interest margin(1) 4.85 % 4.86 % 3.96 % 4.61 % 4.01 %
Fees and other revenue as
a % of total revenue 31.68 32.07 39.52 29.67 39.51
 
N.M. = Not meaningful.
(1) Annualized.                                                          
 

Net Interest Income
  • Net interest income for the third quarter of 2012 increased $24.5 million, or 13.9 percent, compared with the third quarter of 2011. The increase was due to the balance sheet repositioning completed in the first quarter of 2012, which resulted in a $37.9 million reduction to the cost of borrowings, partially offset by a $16 million reduction of interest income on lower levels of mortgage-backed securities and by higher average balances of inventory and auto finance loans. Offsetting the increase in net interest income were lower yields on leasing and equipment finance loans and leases and consumer and commercial real estate loans as higher yielding loans prepay or refinance and are replaced with lower yielding loans in the current rate environment.
  • Net interest income for the third quarter of 2012 increased $2.3 million, or 1.2 percent, compared with the second quarter of 2012. The increase in net interest income from the second quarter of 2012 was primarily due to a higher average balance of auto finance loans. This was partially offset by a seasonally lower average balance of inventory finance loans. Additionally, interest expense decreased due to the redemption of $115 million of Trust Preferred securities, partially offset by both the issuance of $110 million of subordinated debt and slightly higher deposit expenses due to product mix, primarily in certificates of deposit.
  • Net interest margin in the third quarter of 2012 was 4.85 percent, compared with 3.96 percent in the third quarter of 2011 and 4.86 percent in the second quarter of 2012. The increase from the third quarter of 2011 was primarily due to a lower average cost of borrowings due to the effects of the balance sheet repositioning, which increased net interest margin by 92 basis points.
  • At September 30, 2012, interest-bearing deposits held at the Federal Reserve and unencumbered securities were $1.3 billion, a decrease of $189 million from the third quarter of 2011 and $156 million from the second quarter of 2012.

Non-interest Income
  • Banking fees and service charges in the third quarter of 2012 were $43.7 million, down $14.7 million, or 25.2 percent, from the third quarter of 2011, and down $4.3 million, or 9 percent, from the second quarter of 2012. The decrease in banking fees and revenues from the third quarter of 2011 was primarily due to lower transaction volume related to a lower account base driven by our deposit product fee structure changes. The decrease from the second quarter of 2012 was primarily due to the decrease in monthly maintenance fee revenue resulting from the reintroduction of free checking products.
  • Card revenues were $12.9 million in the third quarter of 2012, a decrease of $14.8 million, or 53.3 percent, from the third quarter of 2011 and down $603 thousand, or 4.5 percent, from the second quarter of 2012. The decrease from the prior year is due to debit card interchange regulations which took effect on October 1, 2011. The decrease in card revenue from the second quarter of 2012 was primarily due to a decrease in transaction volume.
  • TCF sold $161.1 million of auto loans and recognized $7.5 million in associated gains during the third quarter of 2012, compared with the sale of $144.1 million of auto loans and recognition of $5.5 million in associated gains during the second quarter of 2012.
  • TCF sold $136.7 million of consumer real estate loans and $164.7 million of mortgage-backed securities and recognized $4.6 million and $13.2 million in associated gains, respectively, during the third quarter of 2012.
Loans and Leases                
                                                     
Period-End and Average Loans and Leases                                 Table 3
    Percent Change
($ in thousands) 3Q 2Q 3Q 3Q12 vs 3Q12 vs YTD YTD Percent
2012   2012   2011   2Q12   3Q11   2012   2011   Change
Period-End:
Consumer real estate $ 6,648,036 $ 6,811,784 $ 6,970,821 (2.4 ) % (4.6 ) %
Commercial 3,511,234 3,523,070 3,495,797 (.3 ) .4
Leasing and equipment finance 3,157,977 3,151,105 3,011,795 .2 4.9
Inventory finance 1,466,269 1,457,263 828,214 .6 77.0
Auto finance 407,091 262,188 - 55.3 N.M.
Other   27,610     29,094     33,088 (5.1 ) (16.6 )
Total $ 15,218,217   $ 15,234,504   $ 14,339,715 (.1 ) 6.1
 
Average:
Consumer real estate $ 6,729,254 $ 6,793,415 $ 6,985,821 (.9 ) (3.7 ) $ 6,789,026 $ 7,040,318 (3.6 ) %
Commercial 3,538,111 3,492,049 3,564,198 1.3 (.7 ) 3,496,114 3,594,884 (2.7 )
Leasing and equipment finance 3,164,592 3,145,914 3,066,208 .6 3.2 3,146,345 3,084,613 2.0
Inventory finance 1,440,298 1,571,004 826,198 (8.3 ) 74.3 1,392,828 889,709 56.5
Auto finance 367,271 223,893 - 64.0 N.M. 226,092 - N.M.
Other   16,280     17,647     18,183 (7.7 ) (10.5 )   17,166     19,788 (13.3 )
Total $ 15,255,806   $ 15,243,922   $ 14,460,608 .1 5.5 $ 15,067,571   $ 14,629,312 3.0
 
N.M. = Not meaningful.                                                
 
  • Loans and leases were $15.2 billion at September 30, 2012, an increase of $878.5 million, or 6.1 percent, compared with September 30, 2011, and nearly flat compared with June 30, 2012. The increase from 2011 was due to new programs in inventory finance, the addition of auto finance and growth in equipment finance and commercial banking, partially offset by the third quarter 2012 sale and net run off of consumer real estate loans.
  • Auto finance loans are expected to continue growing as Gateway One Lending and Finance, LLC (“Gateway One”) expands its number and geographic coverage of active dealers in its network by expanding its sales force. Gateway One increased its portfolio of managed loans, which includes portfolio loans, loans held for sale, and loans sold and serviced for others, by 31.3 percent to $1 billion at September 30, 2012 from $780.3 million at June 30, 2012. Gateway One expanded its active dealers to 6,087 at September 30, 2012 from 5,420 at June 30, 2012.
  • Originations were $2.4 billion for the third quarter of 2012, an increase of $1.2 billion, or 92 percent, compared with the third quarter of 2011. This increase was primarily due to growth in our national lending businesses (leasing and equipment finance, inventory finance and auto finance) and includes the high velocity of fundings and repayments with dealers in the inventory finance business. Originations decreased $188 million, or 7.2 percent, compared with the second quarter of 2012, due to slower seasonal transactions in the inventory finance portfolio, partially offset by growth in auto finance.
  • Average loans and leases were $15.3 billion at September 30, 2012, an increase of $795 million, or 5.5 percent, compared with September 30, 2011, and an increase of $11.9 million, or .1 percent, compared with June 30, 2012. The increase from June 30, 2012 was primarily due to growth in the auto finance portfolio, partially offset by a decrease in the average inventory finance portfolio due to lower seasonal levels of transactions. The increase from September 30, 2011 was primarily due to growth in the inventory finance portfolio due to the funding of dealers of BRP products, as well as the addition of the auto finance portfolio in the fourth quarter of 2011.

Credit Quality

(Table 4 - Credit Trends: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50453358&lang=en )
  • Over 60-day delinquencies improved slightly from June 30, 2012 and net charge-offs increased primarily due to $43.9 million in charge-offs related to the implementation of clarifying bankruptcy-related regulatory guidance in the third quarter of 2012, as well as more aggressive commercial loan workouts. Non-performing assets increased from the second quarter due to the implementation of clarifying bankruptcy-related regulatory guidance in the third quarter of 2012 which caused an increase in consumer real estate non-accrual loans of $103.2 million, partially offset by decreases in other real estate owned and non-accrual loans in leasing and equipment finance.
  • The over 60-day delinquency rate was .67 percent, down from .73 percent at June 30, 2012 and down from .75 percent at September 30, 2011. The decrease from the third quarter of 2011 and second quarter of 2012 was primarily due to improvements in commercial and leasing and equipment finance delinquencies.
  • Non-accrual loans and leases were $421.8 million at September 30, 2012, an increase of $97.4 million, or 30 percent, from June 30, 2012 and an increase of $114.1 million, or 37.1 percent, from September 30, 2011. The increase from June 30, 2012 was primarily due to $103.2 million of additional consumer non-accrual loans resulting from the implementation of clarifying bankruptcy-related regulatory guidance in the third quarter of 2012. Of these loans, 93 percent were less than 60 days past due on their payments as of September 30, 2012. These increases were partially offset by decreases in leasing and equipment finance non-accrual loans. The increase from September 30, 2011 was primarily due to the implementation of clarifying bankruptcy-related regulatory guidance as well as increased commercial real estate non-accrual loans. Of the commercial and leasing non-accrual loans and leases, which totaled $185.2 million at September 30, 2012, 75.6 percent were less than 60 days past due.
  • Other real estate owned was $120.4 million at September 30, 2012, a decrease of $5.5 million from June 30, 2012 and a decrease of $10 million from September 30, 2011. The decrease from September 30, 2011 was primarily due to a decrease in the number of consumer properties owned.
Allowance for Loan and Lease Losses
                                                                             
Credit Quality Summary                                                                   Table 6
($ in thousands)         Percent Change      
    3Q 2Q 3Q 3Q12 vs   3Q12 vs YTD YTD Percent
Allowance for Loan and Lease Losses   2012     2012     2011     2Q12   3Q11   3Q12   3Q11     Change
Balance at beginning of period $ 274,161 $ 265,293 $ 255,472 3.3 % 7.3 % $ 255,672 $ 265,819 (3.8 ) %
Charge-offs (108,714 ) (49,833 ) (57,761 ) 118.2 88.2 (203,223 ) (167,323 ) 21.5
Recoveries 4,260   4,974   4,359   (14.4 ) (2.3 ) 14,976   14,263   5.0
Net charge-offs (104,454 ) (44,859 ) (53,402 ) 132.8 95.6 (188,247 ) (153,060 ) 23.0
Provision for credit losses 96,275 54,106 52,315 77.9 84.0 198,923 141,594 40.5
Other (1,141 ) (379 ) (60 ) N.M. N.M. (1,507 ) (28 ) N.M.
Balance at end of period $ 264,841   $ 274,161   $ 254,325   (3.4 ) 4.1 $ 264,841   $ 254,325   4.1
 
Net charge-offs as a percentage of
average loans and leases(1)
Consumer real estate
First mortgage lien 3.60

%

 
1.58

%

 
2.29 % 202 bps 131 bps 2.26 1.96 30 bps
Junior lien 6.12 3.07 2.99 305 313 4.10 2.70 140
Total consumer real estate 4.44 2.05 2.51 239 193 2.85 2.19 66
Commercial 2.32 .97 .57 135 175 1.16 .95 21
Leasing and equipment finance .95 .15 .36 80 59 .37 .39 (2 )
Inventory finance .12 .06 .13 6 (1 ) .13 .12 1
Auto finance .30 .14 - 16 30 .21 - 21
Other

N.M.

N.M.

N.M.

N.M.

N.M.

N.M.

N.M.

N.M.
Total 2.74 1.18 1.48 156 126 1.67 1.39 28
 

Allowance as a percentage of period end loans and leases
1.74

%

 
1.80

%

 
1.77 % 1.74 % 1.77 %
Ratio of allowance to net charge-offs(1) .60

X

 
1.50

X

 
1.20 X 1.10 X 1.20 X
 
N.M. = Not meaningful.
(1) Annualized.                                                                        
 
  • Allowance for loan and lease losses was $264.8 million, or 1.7 percent of loans and leases, a decrease of $9.4 million, compared with $274.2 million, or 1.8 percent of loans and leases, at June 30, 2012 and an increase of $10.5 million, compared with $254.3 million, or 1.8 percent of loans and leases, at September 30, 2011.
  • Provision for credit losses was $96.3 million, an increase of $42.2 million from the second quarter of 2012 and an increase of $44 million from the third quarter of 2011. The increase from both periods was primarily due to an additional provision recorded for consumer real estate loans of $31.5 million related to the implementation of clarifying bankruptcy-related regulatory guidance and increased provision in the commercial portfolio as we aggressively addressed credit issues in this area in the third quarter of 2012.
  • Net loan and lease charge-offs were $104.5 million, or 2.74 percent, annualized, of average loans and leases, up $59.6 million, or 1.2 percent, annualized, of average loans and leases, from the second quarter of 2012 and up $51.1 million, or 1.5 percent, annualized, of average loans and leases, from the third quarter of 2011. Excluding the additional net charge-offs of $43.9 million related to the implementation of bankruptcy-related regulatory guidance, net loan and lease charge-offs were $61 million up $16 million from the second quarter of 2012. The increase in net charge-offs from the second quarter of 2012 and third quarter of 2011, excluding the additional net charge-offs due to the bankruptcy-related regulatory guidance, was primarily due to increased net charge-offs on a small population of commercial loans, which was driven by a more aggressive workout approach and the charge off of one large lease exposure.
Deposits                
                                                 
Average Deposits                                           Table 7
Percent Change
($ in thousands) 3Q 2Q 3Q 3Q12 vs 3Q12 vs YTD YTD Percent
2012   2012   2011   2Q12   3Q11   2012   2011   Change
 
Checking $ 4,582,088 $ 4,636,700 $ 4,475,566 (1.2 ) % 2.4 % $ 4,594,572 $ 4,515,916 1.7 %
Savings 6,173,524 6,053,264 5,812,187 2.0 6.2 6,044,442 5,629,620 7.4
Money market   848,899       748,016       650,598   13.5 30.5   753,486       657,570   14.6
Subtotal 11,604,511 11,437,980 10,938,351 1.5 6.1 11,392,500 10,803,106 5.5
Certificates   1,953,208       1,608,654       1,114,935   21.4 75.2   1,567,258       1,100,029   42.5
Total average deposits $ 13,557,719     $ 13,046,634     $ 12,053,286   3.9 12.5 $ 12,959,758     $ 11,903,135   8.9
 
Average interest rate on deposits(1) .32 % .31 % .39 % .31 % .40 %
 
(1) Annualized.                                                
 
  • Total average deposits increased $1.5 billion, or 12.5 percent, from the third quarter of 2011 and increased $511.1 million, or 3.9 percent, from the second quarter of 2012. The increase from the third quarter of 2011 was primarily due to the assumption of $778 million of deposits from Prudential Bank & Trust, FSB (“PB&T”) in June 2012 and the reintroduction of free checking and special programs for certificates of deposits. The increase from the second quarter of 2012 is primarily due to increased certificates of deposit due to special promotions on these products in the third quarter of 2012, as well as the full quarter average of the PB&T deposits.
  • The average interest cost of deposits in the third quarter of 2012 was .32 percent, down 7 basis points from the third quarter of 2011 and up 1 basis point from the second quarter of 2012. The decrease in the average interest cost of deposits from the third quarter of 2011 was primarily due to pricing strategies on certain deposit products, partially offset by higher average interest costs on the PB&T deposits.
Non-interest Expense                
                                                       
Non-interest Expense                                               Table 8
  Percent Change
($ in thousands) 3Q 2Q 3Q 3Q12 vs 3Q12 vs YTD YTD Percent
2012   2012   2011   2Q12   3Q11   2012   2011   Change
Compensation and
employee benefits $ 98,409 $ 97,787 $ 87,758 .6 % 12.1 % $ 292,163 $ 266,197 9.8 %
Occupancy and equipment 33,006 32,731 31,129 .8 6.0 97,983 94,071 4.2
FDIC insurance 6,899 8,469 7,363 (18.5 ) (6.3 ) 21,754 22,100 (1.6 )
Advertising and marketing 4,248 5,404 1,145 (21.4 ) N.M. 12,269 7,784 57.6
Deposit account premiums 485 1,690 7,045 (71.3 ) (93.1 ) 8,146 16,409 (50.4 )
Operating lease depreciation 6,325 6,417 7,409 (1.4 ) (14.6 ) 19,473 23,196 (16.1 )
Other   36,173     36,956     34,708   (2.1 ) 4.2   110,425     106,341 3.8
Core operating expenses 185,545 189,454 176,557 (2.1 ) 5.1 562,213 536,098 4.9
Loss on termination of debt - - - - - 550,735 - N.M.
Foreclosed real estate and
repossessed assets, net 10,670 12,059 12,430 (11.5 ) (14.2 ) 33,776 37,915 (10.9 )
Other credit costs, net   593     1,476     (139 ) (59.8 ) N.M.   1,781     2,905 (38.7 )
Total non-interest expense $ 196,808   $ 202,989   $ 188,848   (3.0 ) 4.2 $ 1,148,505   $ 576,918 99.1
 
N.M. = Not meaningful.                                                    
 
  • Compensation and employee benefits expense increased $10.7 million, or 12.1 percent, from the third quarter of 2011 and increased $622 thousand, or .6 percent, from the second quarter of 2012. The increase from the third quarter of 2011 was primarily due to Gateway One, acquired in November 2011, as well as increased staffing levels to support the increased assets of the BRP program in Inventory Finance. The increase from the second quarter of 2012 was primarily due to higher salary expense in the auto finance business as it ramps up capacity to originate and service higher loan volumes.
  • The combined expense associated with advertising, marketing and deposit account premiums decreased $3.5 million from the third quarter of 2011 and decreased $2.4 million compared with the second quarter of 2012. The decreases are attributable to TCF's shift in strategy for acquiring high quality accounts through the reintroduction of a free checking product, versus the utilization of high dollar premiums.
  • Foreclosed real estate and repossessed asset expense decreased $1.8 million, or 14.2 percent, from the third quarter of 2011 and decreased $1.4 million, or 11.5 percent, from the second quarter of 2012. The decrease from the third quarter of 2011 was primarily due to fewer consumer real estate properties owned. The decrease from the second quarter of 2012 was primarily due to decreased write-downs on commercial real estate properties owned.
Capital and Borrowing Capacity        
                             
Capital Information                         Table 9
At period end
($ in thousands, except per-share data) 3Q 4Q
2012 2011
Total equity $ 1,764,669 $ 1,878,627
Total equity to total assets 9.87 % 9.90 %
Book value per common share $ 9.71 $ 11.65
Tangible realized common equity to tangible assets(1) 7.55 % 8.42 %
 
Risk-based capital
Tier 1 $ 1,515,050 10.40 % $ 1,706,926 12.67 %
Total(2) 1,887,488 12.96 1,994,875 14.80
 
Tier 1 leverage capital $ 1,515,050 8.66 % $ 1,706,926 9.15 %
 
Tier 1 common capital(3) $ 1,335,124 9.17 % $ 1,581,432 11.74 %
 

(1) Excludes the impact of goodwill, other intangibles and accumulated other comprehensive income (loss) (see “Reconciliation of GAAP to Non-GAAP Measures” table).

(2) The Company's capital ratios continue to be in excess of "Well-capitalized" regulatory benchmarks.
(3) Excludes the effect of preferred shares, qualifying trust preferred securities and qualifying non-controlling interest in subsidiaries (see “Reconciliation of GAAP to Non-GAAP Measures” table).
 
  • On July 30, 2012, TCF redeemed all of its $115 million Trust Preferred securities.
  • TCF’s Tier 1 common capital ratio decreased to 9.17 percent from 9.26 percent at June 30, 2012.
  • On October 25, 2012, the Board of Directors of TCF declared a regular quarterly cash dividend of 5 cents per common share payable on November 30, 2012, to stockholders of record at the close of business on November 15, 2012. TCF also declared dividends on the 7.50 percent Series A Non-cumulative Perpetual Preferred Stock payable on December 3, 2012, to stockholders of record at the close of business on November 15, 2012.
  • At September 30, 2012, TCF had $2.4 billion in unused, secured borrowing capacity at the FHLB of Des Moines, $531 million in unused, secured borrowing capacity at the Federal Reserve Discount Window and $571 million in unused borrowing capacity under existing federal funds lines.

Webcast Information

A live webcast of TCF’s conference call to discuss third quarter earnings will be hosted at TCF’s website, http://ir.tcfbank.com, on October 26, 2012 at 8:00 a.m. CT. A slide presentation for the call will be available on the website prior to the call. Additionally, the webcast will be available for replay at TCF’s website after the conference call. The website also includes free access to company news releases, TCF’s annual report, investor presentations and SEC filings.
 

TCF is a Wayzata, Minnesota-based national bank holding company with $17.9 billion in total assets at September 30, 2012. TCF has nearly 430 branches in Minnesota, Illinois, Michigan, Colorado, Wisconsin, Indiana, Arizona and South Dakota, providing retail and commercial banking services. TCF, through its subsidiaries, also conducts commercial leasing and equipment finance business in all 50 states, commercial inventory finance business in the U.S. and Canada, and indirect auto finance business in 40 states. For more information about TCF, please visit http://ir.tcfbank.com.

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

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

Certain factors could cause the Company’s future results to differ materially from those expressed or implied in any forward-looking statements contained in this release. These factors include the factors discussed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 under the heading “Risk Factors,” the factors discussed below and any other cautionary statements, written or oral, which may be made or referred to in connection with any such forward-looking statements. Since it is not possible to foresee all such factors, these factors should not be considered as complete or exhaustive.

Adverse Economic or Business Conditions, Credit and Other Risks Deterioration in general economic and banking industry conditions, including defaults, anticipated defaults or rating agency downgrades of sovereign debt (including debt of the U.S.), or continued high rates of or increases in unemployment in TCF’s primary banking markets; adverse economic, business and competitive developments such as shrinking interest margins, deposit outflows, deposit account attrition or an inability to increase the number of deposit accounts; adverse changes in credit quality and other risks posed by TCF’s loan, lease, investment and securities available for sale portfolios, including declines in commercial or residential real estate values or changes in the allowance for loan and lease losses dictated by new market conditions or regulatory requirements; interest rate risks resulting from fluctuations in prevailing interest rates or other factors that result in a mismatch between yields earned on TCF’s interest-earning assets and the rates paid on its deposits and borrowings; foreign currency exchange risks; counterparty risk, including the risk of defaults by our counterparties or diminished availability of counterparties who satisfy our credit quality requirements; decreases in demand for the types of equipment that TCF leases or finances.

Legislative and Regulatory Requirements New consumer protection and supervisory requirements and regulations, including those resulting from action by the CFPB and changes in the scope of Federal preemption of state laws that could be applied to national banks; the imposition of requirements with an adverse impact relating to TCF’s lending, loan collection and other business activities as a result of the Dodd-Frank Act, or other legislative or regulatory developments such as mortgage foreclosure moratorium laws or imposition of underwriting or other limitations that impact the ability to use certain variable-rate products; impact of legislative, regulatory or other changes affecting customer account charges and fee income or expense; changes to bankruptcy laws which would result in the loss of all or part of TCF’s security interest due to collateral value declines; deficiencies in TCF’s compliance under the Bank Secrecy Act in past or future periods, which may result in regulatory enforcement action including monetary penalties; increased health care costs resulting from Federal health care reform legislation; adverse regulatory examinations and resulting enforcement actions or other adverse consequences such as increased capital requirements or higher deposit insurance assessments; heightened regulatory practices, requirements or expectations, including, but not limited to, requirements related to the Bank Secrecy Act and anti-money laundering compliance activity.

Earnings/Capital Risks and Constraints, Liquidity Risks Limitations on TCF’s ability to pay dividends or to increase dividends because of financial performance deterioration, regulatory restrictions or limitations; increased deposit insurance premiums, special assessments or other costs related to adverse conditions in the banking industry, the economic impact on banks of the Dodd-Frank Act and other regulatory reform legislation; the impact of financial regulatory reform, including additional capital, leverage, liquidity and risk management requirements or changes in the composition of qualifying regulatory capital (including those resulting from U.S. implementation of Basel III requirements); adverse changes in securities markets directly or indirectly affecting TCF’s ability to sell assets or to fund its operations; diminished unsecured borrowing capacity resulting from TCF credit rating downgrades and unfavorable conditions in the credit markets that restrict or limit various funding sources; costs associated with new regulatory requirements or interpretive guidance relating to liquidity; uncertainties relating to customer opt-in preferences with respect to overdraft fees on point of sale and ATM transactions or the success of TCF’s reintroduction of the Free Checking product which may have an adverse impact on TCF’s fee revenue; uncertainties relating to future retail deposit account changes, including limitations on TCF’s ability to predict customer behavior and the impact on TCF’s fee revenues.

Competitive Conditions; Supermarket Branching Risk; Growth Risks Reduced demand for financial services and loan and lease products; adverse developments affecting TCF’s supermarket banking relationships or any of the supermarket chains in which TCF maintains supermarket branches including the announcement on July 11, 2012 by SuperValu that it is exploring strategic alternatives; customers completing financial transactions without using a bank; the effect of any negative publicity; slower than anticipated growth in existing or acquired businesses; inability to successfully execute on TCF’s growth strategy through acquisitions or cross-selling opportunities; failure to expand or diversify our balance sheet through programs or new opportunities; failure to successfully attract and retain new customers; product additions and addition of distribution channels (or entry into new markets) for existing products, limitations on TCF’s ability to attract and retain manufacturers and dealers to expand the inventory finance business or dealers in connection with its expansion of the automobile finance business.

Technological and Operational Matters Technological or operational difficulties, loss or theft of information, counterparty failures and the possibility that deposit account losses (fraudulent checks, etc.) may increase; failure to keep pace with technological change.

Litigation Risks Results of litigation, including class action litigation concerning TCF’s lending, deposit or leasing activities including account servicing processes or fees or charges, or employment practices, and possible increases in financial obligations for certain litigation against Visa U.S.A. and potential reductions in card revenues resulting from such litigation or other litigation against Visa.

Accounting, Audit, Tax and Insurance Matters Changes in accounting standards or interpretations of existing standards; federal or state monetary, fiscal or tax policies, including adoption of state legislation that would increase state taxes; ineffective internal controls; adverse state or Federal tax assessments or findings in tax audits; lack of or inadequate insurance coverage for claims against TCF; potential for claims and legal action related to TCF’s fiduciary responsibilities.
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands, except per-share data)
(Unaudited)
             
Three Months Ended September 30, Change
2012 2011 $ %
Interest income:
Loans and leases $ 210,140 $ 210,885 $ (745 ) (.4 )
Securities available for sale 5,607 22,561 (16,954 ) (75.1 )
Investments and other 4,105   1,997   2,108   105.6
Total interest income 219,852   235,443   (15,591 ) (6.6 )
Interest expense:
Deposits 10,757 11,883 (1,126 ) (9.5 )
Borrowings 8,536   47,496   (38,960 ) (82.0 )
Total interest expense 19,293   59,379   (40,086 ) (67.5 )
Net interest income 200,559 176,064 24,495 13.9
Provision for credit losses 96,275   52,315   43,960   84.0
Net interest income after provision for
credit losses 104,284   123,749   (19,465 ) (15.7 )
Non-interest income:
Fees and service charges 43,745 58,452 (14,707 ) (25.2 )
Card revenue 12,927 27,701 (14,774 ) (53.3 )
ATM revenue 6,122   7,523   (1,401 ) (18.6 )
Subtotal 62,794 93,676 (30,882 ) (33.0 )
Leasing and equipment finance 20,498 21,646 (1,148 ) (5.3 )
Gain on sales of auto loans 7,486 - 7,486 N.M.
Gain on sale of consumer real estate loans 4,559 - 4,559 N.M.
Other 3,688   786   2,902   N.M.
Fees and other revenue 99,025 116,108 (17,083 ) (14.7 )
Gains on securities, net 13,033   1,648   11,385   N.M.
Total non-interest income 112,058   117,756   (5,698 ) (4.8 )
Non-interest expense:
Compensation and employee benefits 98,409 87,758 10,651 12.1
Occupancy and equipment 33,006 31,129 1,877 6.0
FDIC insurance 6,899 7,363 (464 ) (6.3 )
Advertising and marketing 4,248 1,145 3,103 N.M.
Deposit account premiums 485 7,045 (6,560 ) (93.1 )
Operating lease depreciation 6,325 7,409 (1,084 ) (14.6 )
Other 36,173   34,708   1,465   4.2
Subtotal 185,545 176,557 8,988 5.1
Foreclosed real estate and repossessed assets, net 10,670 12,430 (1,760 ) (14.2 )
Other credit costs, net 593   (139 ) 732   N.M.
Total non-interest expense 196,808   188,848   7,960   4.2
Income before income tax expense 19,534 52,657 (33,123 ) (62.9 )
Income tax expense 6,304   19,159   (12,855 ) (67.1 )
Income after income tax expense 13,230 33,498 (20,268 ) (60.5 )
Income attributable to non-controlling interest 1,536 1,243 293 23.6
Preferred Stock Dividends 2,372   -   2,372   N.M.
Net income available to common stockholders 9,322   32,255   (22,933 ) (71.1 )
Other comprehensive income:
Reclassification adjustment for securities gains
included in net income (12,912 ) (1,915 ) (10,997 ) N.M.
Unrealized holding gains arising during the
period on securities available for sale 16,283 116,958 (100,675 ) (86.1 )
Foreign currency hedge (630 ) 1,319 (1,949 ) (147.8 )
Foreign currency translation adjustment 640 (1,410 ) 2,050 (145.4 )
Recognized postretirement prior service cost
and transition obligation (6 ) 1 (7 ) N.M.
Income tax expense (1,011 ) (42,643 ) 41,632   97.6
Total other comprehensive income 2,364   72,310   (69,946 ) (96.7 )
Comprehensive income $ 11,686   $ 104,565   $ (92,879 ) (88.8 )
Net income per common share:
Basic $ .06 $ .20 $ (.14 ) (70.0 )
Diluted .06 .20 (.14 ) (70.0 )
 
Dividends declared per common share $ .05 $ .05 $ - -
 
Average common and common equivalent
shares outstanding (in thousands):
Basic 159,533 157,419 2,114 1.3
Diluted 160,016 157,621 2,395 1.5
N.M. Not meaningful.
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands, except per-share data)
(Unaudited)
             
Nine Months Ended September 30, Change
2012 2011 $ %
Interest income:
Loans and leases $ 624,890 $ 639,381 $ (14,491 ) (2.3 ) %
Securities available for sale 30,535 62,629 (32,094 ) (51.2 )
Investments and other 10,171   5,634   4,537   80.5
Total interest income 665,596   707,644   (42,048 ) (5.9 )
Interest expense:
Deposits 30,015 35,317 (5,302 ) (15.0 )
Borrowings 56,625   146,073   (89,448 ) (61.2 )
Total interest expense 86,640   181,390   (94,750 ) (52.2 )
Net interest income 578,956 526,254 52,702 10.0
Provision for credit losses 198,923   141,594   57,329   40.5
Net interest income after provision for
credit losses 380,033   384,660   (4,627 ) (1.2 )
Non-interest income:
Fees and service charges 133,691 168,361 (34,670 ) (20.6 )
Card revenue 39,664 82,504 (42,840 ) (51.9 )
ATM revenue 18,597   21,319   (2,722 ) (12.8 )
Subtotal 191,952 272,184 (80,232 ) (29.5 )
Leasing and equipment finance 66,572 70,675 (4,103 ) (5.8 )
Gain on sale of auto loans 15,232 - 15,232 N.M.
Gain on sale of consumer real estate loans 4,559 - 4,559 N.M.
Other 9,211   1,864   7,347   N.M.
Fees and other revenue 287,526 344,723 (57,197 ) (16.6 )
Gains on securities, net 102,760   1,421   101,339   N.M.
Total non-interest income 390,286   346,144   44,142   12.8
Non-interest expense:
Compensation and employee benefits 292,163 266,197 25,966 9.8
Occupancy and equipment 97,983 94,071 3,912 4.2
FDIC insurance 21,754 22,100 (346 ) (1.6 )
Advertising and marketing 12,269 7,784 4,485 57.6
Deposit account premiums 8,146 16,409 (8,263 ) (50.4 )
Operating lease depreciation 19,473 23,196 (3,723 ) (16.1 )
Other 110,425   106,341   4,084   3.8
Subtotal 562,213 536,098 26,115 4.9
Loss on termination of debt 550,735 - 550,735 N.M.
Foreclosed real estate and repossessed assets, net 33,776 37,915 (4,139 ) (10.9 )
Other credit costs, net 1,781   2,905   (1,124 ) (38.7 )
Total non-interest expense 1,148,505   576,918   571,587   99.1
(Loss) income before income tax expense (378,186 ) 153,886 (532,072 ) N.M.
Income tax (benefit) expense (143,398 ) 57,017   (200,415 ) N.M.
(Loss) income after income tax expense (234,788 ) 96,869 (331,657 ) N.M.
Income attributable to non-controlling interest 4,881 3,918 963 24.6
Preferred Stock Dividends 2,372   -   2,372   N.M.
Net (loss) income available to common stockholders (242,041 ) 92,951   (334,992 ) N.M.
Other comprehensive (loss) income:
Reclassification adjustment for securities gains
included in net income (89,879 ) (1,915 ) (87,964 ) N.M.
Unrealized holding gains (losses) arising during the
period on securities available for sale 28,383 126,972 (98,589 ) (77.6 )
Foreign currency hedge (766 ) 719 (1,485 ) N.M.
Foreign currency translation adjustment 701 (876 ) 1,577 (180.0 )
Recognized postretirement prior service cost
and transition obligation (20 ) 3 (23 ) N.M.
Income tax benefit (expense) 22,822   (46,101 ) 68,923   (149.5 )
Total other comprehensive (loss) income (38,759 ) 78,802   (117,561 ) (149.2 )
Comprehensive (loss) income $ (280,800 ) $ 171,753   $ (452,553 ) N.M.
Net (loss) income per common share:
Basic $ (1.52 ) $ .61 $ (2.13 ) N.M.
Diluted (1.52 ) .60 (2.12 ) N.M.
 
Dividends declared per common share $ .15 $ .15 $ - -
 
Average common and common equivalent
shares outstanding (in thousands):
Basic 159,052 153,007 6,045 4.0
Diluted 159,052 153,302 5,750 3.8
 
N.M. Not meaningful.
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except per-share data)
(Unaudited)
             
At Sep. 30 At Dec. 31 Change
2012 2011 $ %
ASSETS
 
Cash and due from banks $ 922,127 $ 1,389,704 $ (467,577 ) (33.6 ) %
Investments 126,487 157,780 (31,293 ) (19.8 )
Securities available for sale 559,671 2,324,038 (1,764,367 ) (75.9 )
Loans and leases held for sale 3,691 14,321 (10,630 ) (74.2 )
Loans and leases:
Consumer real estate 6,648,036 6,895,291 (247,255 ) (3.6 )
Commercial 3,511,234 3,449,492 61,742 1.8
Leasing and equipment finance 3,157,977 3,142,259 15,718 .5
Inventory finance 1,466,269 624,700 841,569 134.7
Auto finance 407,091 3,628 403,463 N.M.
Other loans and leases 27,610   34,885   (7,275 ) (20.9 )
Total loans and leases 15,218,217 14,150,255 1,067,962 7.5
Allowance for loan and lease losses (264,841 ) (255,672 ) (9,169 ) (3.6 )
Net loans and leases 14,953,376 13,894,583 1,058,793 7.6
Premises and equipment, net 442,356 436,281 6,075 1.4
Goodwill 225,640 225,640 - -
Other assets 645,045   537,041   108,004   20.1
Total assets $ 17,878,393   $ 18,979,388   $ (1,100,995 ) (5.8 )
 
LIABILITIES AND EQUITY
 
Deposits:
Checking $ 4,707,179 $ 4,629,749 $ 77,430 1.7
Savings 6,127,889 5,855,263 272,626 4.7
Money market 812,442   651,377   161,065   24.7
Subtotal 11,647,510 11,136,389 511,121 4.6
Certificates of deposit 2,073,909   1,065,615   1,008,294   94.6
Total deposits 13,721,419   12,202,004   1,519,415   12.5
Short-term borrowings 115,529 6,416 109,113 N.M.
Long-term borrowings 1,936,988   4,381,664   (2,444,676 ) (55.8 )
Total borrowings 2,052,517 4,388,080 (2,335,563 ) (53.2 )
Accrued expenses and other liabilities 339,788   510,677   (170,889 ) (33.5 )
Total liabilities 16,113,724   17,100,761   (987,037 ) (5.8 )
Equity:
Preferred stock, par value $.01 per share,
30,000,000 authorized; and 6,900 shares issued 166,721 - 166,721 N.M.
Common stock, par value $.01 per share,
280,000,000 shares authorized; 163,281,955
and 160,366,380 shares issued 1,633 1,604 29 1.8
Additional paid-in capital 746,543 715,247 31,296 4.4
Retained earnings, subject to certain restrictions 861,895 1,127,823 (265,928 ) (23.6 )
Accumulated other comprehensive income 18,067 56,826 (38,759 ) (68.2 )
Treasury stock at cost, 42,566 shares, and other (43,395 ) (33,367 ) (10,028 ) (30.1 )
Total TCF Financial Corporation stockholders' equity 1,751,464   1,868,133   (116,669 ) (6.2 )
Non-controlling interest in subsidiaries 13,205   10,494   2,711   25.8
Total equity 1,764,669   1,878,627   (113,958 ) (6.1 )
Total liabilities and equity $ 17,878,393   $ 18,979,388   $ (1,100,995 ) (5.8 )
 
N.M. Not meaningful.
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
SUMMARY OF CREDIT QUALITY DATA
(Dollars in thousands)
(Unaudited)
                         
At At At At At Change from
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30, Sep. 30,
2012 2012 2012 2011 2011 2012 2011

Delinquency Data - Principal Balances(1)
60 days or more:
Consumer real estate
First mortgage lien $ 80,153 $ 86,714 $ 88,092 $ 87,358 $ 78,241 $ (6,561 ) $ 1,912
Junior lien 13,388   13,967   15,563   22,277   18,499   (579 ) (5,111 )
Total consumer real estate 93,541 100,681 103,655 109,635 96,740 (7,140 ) (3,199 )
Commercial 2,652 5,616 3,425 1,148 3,079 (2,964 ) (427 )
Leasing and equipment finance 1,554 1,492 4,919 3,512 2,840 62 (1,286 )
Inventory finance 80 206 185 160 306 (126 ) (226 )
Auto finance 305 62 2 - - 243 305
Other 22   34   52   41   58   (12 ) (36 )
Subtotal 98,154 108,091 112,238 114,496 103,023 (9,937 ) (4,869 )
Acquired portfolios 1,069   1,483   2,198   3,140   1,870   (414 ) (801 )
Total delinquencies $ 99,223   $ 109,574   $ 114,436   $ 117,636   $ 104,893   $ (10,351 ) $ (5,670 )
 

Delinquency Data - % of Portfolio(1)
60 days or more:
Consumer real estate
First mortgage lien 1.93 % 1.93 % 1.93 % 1.89 % 1.68 % - bps 25 bps
Junior lien .59 .64 .74 1.04 .86 (5 ) (27 )
Total consumer real estate 1.46 1.51 1.55 1.63 1.42 (5 ) 4
Commercial .08 .17 .10 .03 .09 (9 ) (1 )
Leasing and equipment finance .05 .05 .17 .13 .11 - (6 )
Inventory finance .01 .01 .01 .03 .04 - (3 )
Auto finance .08 .02 - - - 6 8
Other .09 .13 .20 .12 .18 (4 ) (9 )
Subtotal .67 .74 .77 .85 .75 (7 ) (8 )
Acquired portfolios .50 .58 .66 .84 .51 (8 ) (1 )
Total delinquencies .67 .73 .77 .85 .75 (6 ) (8 )
 
(1) Excludes non-accrual loans and leases.
At At At At At Change from
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30, Sep. 30,
2012 2012 2012 2011 2011 2012 2011

Non-Accrual Loans and Leases
Non-accrual loans and leases:
Consumer real estate
First mortgage lien $ 197,649 $ 122,406 $ 125,895 $ 129,114 $ 130,671 $ 75,243 $ 66,978
Junior lien 35,936   18,272   23,409   20,257   18,223   17,664   17,713  
Total consumer real estate 233,585 140,678 149,304 149,371 148,894 92,907 84,691
Commercial 169,339 150,215 135,677 127,519 133,260 19,124 36,079
Leasing and equipment finance 15,812 29,429 20,015 20,583 24,437 (13,617 ) (8,625 )
Inventory finance 1,120 1,900 1,109 823 1,077 (780 ) 43
Other 1,957   2,204   2,838   15   4   (247 ) 1,953  
Total non-accrual loans and leases $ 421,813   $ 324,426   $ 308,943   $ 298,311   $ 307,672   $ 97,387   $ 114,141  
 
Non-accrual loans and leases - rollforward
Balance, beginning of period $ 324,426 $ 308,943 $ 298,311 $ 307,672 $ 321,661 $ 15,483 $ 2,765
Additions 210,916 111,739 85,670 125,893 80,014 99,177 130,902
Charge-offs (49,116 ) (28,228 ) (19,683 ) (38,263 ) (29,338 ) (20,888 ) (19,778 )
Transfers to other assets (24,632 ) (34,473 ) (25,603 ) (31,486 ) (21,654 ) 9,841 (2,978 )
Return to accrual status (30,300 ) (22,200 ) (21,243 ) (19,932 ) (20,272 ) (8,100 ) (10,028 )
Payments received (9,652 ) (12,261 ) (9,202 ) (45,238 ) (23,843 ) 2,609 14,191
Other, net 171   906   693   (335 ) 1,104   (735 ) (933 )
Balance, end of period $ 421,813   $ 324,426   $ 308,943   $ 298,311   $ 307,672   $ 97,387   $ 114,141  
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
SUMMARY OF CREDIT QUALITY DATA, CONTINUED
(Dollars in thousands)
(Unaudited)
                     
 
 
Change from
Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, Sep 30,
2012 2012 2012 2011 2011 2012 2011

Other Real Estate Owned
Other real estate owned(1)
Consumer real estate $ 85,764 $ 83,176 $ 84,996 $ 87,792 $ 88,206 $ 2,588 $ (2,442 )
Commercial real estate 34,662   42,700   42,232   47,106   42,208   (8,038 ) (7,546 )
Total other real estate owned $ 120,426   $ 125,876   $ 127,228   $ 134,898   $ 130,414   $ (5,450 ) $ (9,988 )
 
Other real estate owned - rollforward
Balance, beginning of period $ 125,876 $ 127,228 $ 134,898 $ 130,414 $ 136,499 $ (1,352 ) $ (10,623 )
Transferred in 26,097 33,739 25,624 33,864 24,939 (7,642 ) 1,158
Sales (28,479 ) (29,448 ) (28,601 ) (25,909 ) (26,095 ) 969 (2,384 )
Writedowns (3,493 ) (6,237 ) (5,267 ) (5,719 ) (6,337 ) 2,744 2,844
Other, net 425   594   574   2,248   1,408   (169 ) (983 )
Balance, end of period $ 120,426   $ 125,876   $ 127,228   $ 134,898   $ 130,414   $ (5,450 ) $ (9,988 )
 
Ending number of properties owned
Consumer real estate 425 426 466 465 456 (1 ) (31 )
Commercial real estate 26   32   32   33   33   (6 ) (7 )
Total 451   458   498   498   489   (7 ) (38 )
 
(1) Includes properties owned and foreclosed properties subject to redemption.
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
SUMMARY OF CREDIT QUALITY DATA, CONTINUED
(Dollars in thousands)
(Unaudited)
                     
 
 

Allowance for Loan and Lease Losses
At September 30, 2012 At June 30, 2012 At September 30, 2011 Change from
% of % of % of Jun. 30, Sep. 30,
Balance Portfolio Balance Portfolio Balance Portfolio 2012 2011
Consumer real estate $ 178,942 2.69 % $ 188,087 2.58 % $ 177,430 2.55 % 11 bps 14 bps
Commercial 53,756 1.53 50,699 1.44 49,499 1.42 9 11
Leasing and
equipment finance 21,331 .68 25,450 .81 23,300 .77 (13 ) (9 )
Inventory finance 7,003 .48 7,072 .49 2,877 .35 (1 ) 13
Auto finance 3,059 .75 1,951 .74 - - 1 N.M.
Other 750 2.72 902 3.10 1,219 3.68 (38 ) (96 )
Total $ 264,841 1.74 $ 274,161 1.80 $ 254,325 1.77 (6 ) (3 )
 

Net Charge-Offs
Change from
Quarter Ended Quarter Ended
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30, Sep. 30,
2012 2012 2012 2011 2011 2012 2011
Consumer real estate
First mortgage lien $ 40,469 18,369 19,526 23,081 27,590 22,100 12,879
Junior lien 34,202 16,487 16,162 14,219 16,247 17,715   17,955  
Total consumer real estate 74,671 34,856 35,688 37,300 43,837 39,815 30,834
Commercial 20,547 8,455 1,524 15,577 5,040 12,092 15,507
Leasing and equipment finance 7,521 1,173 151 3,473 2,783 6,348 4,738
Inventory finance 444 225 643 53 262 219 182
Auto finance 280 81 2 - - 199 280
Other 991 69 925 1,519 1,480 922   (489 )
Total $ 104,454 $ 44,859 $ 38,933 $ 57,922 $ 53,402

 

$
59,595  

 

$
51,052  
 

Net Charge-Offs as a Percentage of Average Loans and Leases
Change from
Quarter Ended(1) Quarter Ended
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30, Sep. 30,
2012 2012 2012 2011 2011 2012 2011
Consumer real estate
First mortgage lien 3.60 % 1.58

%

 
1.66 % 1.94

%

 
2.29 % 202 bps 131 bps
Junior lien 6.12 3.07 3.03 2.63 2.99 305 313
Total consumer real estate 4.44 2.05 2.09 2.15 2.51 239 193
Commercial 2.32 .97 .18 1.79 .57 135 175
Leasing and equipment finance .95 .15 .02 .46 .36 80 59
Inventory finance .12 .06 .22 .03 .13 6 (1 )
Auto finance .30 .14 .01 - - 16 N.M.
Other N.M. N.M. N.M. N.M. N.M. N.M. N.M.
Total 2.74 1.18 1.06 1.63 1.48 156 126
 
(1) Annualized.
N.M. Not Meaningful.
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Dollars in thousands)
(Unaudited)
                   
Three Months Ended September 30,
2012 2011
Average Yields and Average Yields and
Balance Interest Rates(1) (2) Balance Interest Rates(1) (2)
ASSETS:
Investments and other $ 479,083 $ 2,508 2.09 % $ 958,996 $ 1,997 .83 %
U.S. Government sponsored entities:
Mortgage-backed securities, fixed-rate 710,835 5,605 3.15 2,339,862 22,556 3.86
U.S. Treasury securities - - - 10,761 1 .04
Other securities 154 2 3.32 340 4 4.68
Total securities available for sale(3) 710,989 5,607 3.15 2,350,963 22,561 3.84
Loans and leases held for sale 80,549 1,597 7.89 - - -
Loans and leases:
Consumer real estate:
Fixed-rate 4,197,903 62,679 5.94 4,592,855 70,087 6.06
Variable-rate 2,531,351 32,071 5.04 2,392,966 30,845 5.11
Total consumer real estate 6,729,254 94,750 5.60 6,985,821 100,932 5.73
Commercial:
Fixed- and adjustable-rate 2,682,193 37,565 5.57 2,853,117 41,150 5.72
Variable-rate 855,918 8,116 3.77 711,081 7,759 4.33
Total commercial 3,538,111 45,681 5.14 3,564,198 48,909 5.44
Leasing and equipment finance 3,164,592 42,152 5.33 3,066,208 46,072 6.01
Inventory finance 1,440,298 22,395 6.19 826,198 15,151 7.28
Auto finance 367,271 5,515 5.97 - - -
Other 16,280 320 7.83 18,183 387 8.44
Total loans and leases 15,255,806 210,813 5.50 14,460,608 211,451 5.81
Total interest-earning assets 16,526,427 220,525 5.32 17,770,567 236,009 5.28
Other assets 1,190,094 1,222,700
Total assets $ 17,716,521 $ 18,993,267
LIABILITIES AND EQUITY:
Non-interest bearing deposits:
Retail $ 1,275,722 $ 1,396,857
Small business 746,511 704,272
Commercial and custodial 324,739 294,253
Total non-interest bearing deposits 2,346,972 2,395,382
Interest-bearing deposits:
Checking 2,255,561 698 .12 2,103,184 1,057 .20
Savings 6,153,079 4,720 .31 5,789,188 7,912 .54
Money market 848,899 816 .38 650,598 692 .42
Subtotal 9,257,539 6,234 .27 8,542,970 9,661 .45
Certificates of deposit 1,953,208 4,523 .92 1,114,934 2,222 .79
Total interest-bearing deposits 11,210,747 10,757 .38 9,657,904 11,883 .49
Total deposits 13,557,719 10,757 .32 12,053,286 11,883 .39
Borrowings:
Short-term borrowings 65,531 81 .49 43,073 31 .29
Long-term borrowings 1,985,094 8,455 1.70 4,403,724 47,465 4.28
Total borrowings 2,050,625 8,536 1.66 4,446,797 47,496 4.24
Total interest-bearing liabilities 13,261,372 19,293 .58 14,104,701 59,379 1.67
Total deposits and borrowings 15,608,344 19,293 .49 16,500,083 59,379 1.43
Other liabilities 343,336 672,944
Total liabilities 15,951,680 17,173,027
Total TCF Financial Corporation stockholders' equity 1,749,951 1,813,384
Non-controlling interest in subsidiaries 14,890 6,856
Total equity 1,764,841 1,820,240
Total liabilities and equity $ 17,716,521 $ 18,993,267
Net interest income and margin $ 201,232 4.85 $ 176,630 3.96
 
(1) Annualized.

 
(2) Interest and yields are presented on a fully tax equivalent basis.
(3) Average balances and yields of securities available for sale are based upon the historical amortized cost and excludes equity securities.
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Dollars in thousands)
(Unaudited)
                   
Nine Months Ended September 30,
2012 2011
Average Yields and Average Yields and
Balance Interest Rates(1) (2) Balance Interest Rates(1) (2)
ASSETS:
Investments and other $ 551,653 $ 7,550 1.83 % $ 744,934 $ 5,634 1.01 %
U.S. Government sponsored entities:
Mortgage-backed securities, fixed-rate 1,175,514 30,529 3.46 2,136,516 62,581 3.91
U.S. Treasury securities - - - 64,414 34 .07
Other securities 203 6 3.92 360 14 5.20
Total securities available for sale(3) 1,175,717 30,535 3.46 2,201,290 62,629 3.79
Loans and leases held for sale 43,871 2,621 7.98 - - -
Loans and leases:
Consumer real estate:
Fixed-rate 4,335,073 192,263 5.92 4,660,371 212,508 6.10
Variable-rate 2,453,953 92,341 5.03 2,379,947 91,691 5.15
Total consumer real estate 6,789,026 284,604 5.60 7,040,318 304,199 5.78
Commercial:
Fixed- and adjustable-rate 2,716,583 113,017 5.56 2,880,986 124,634 5.78
Variable-rate 779,531 23,179 3.97 713,898 23,173 4.34
Total commercial 3,496,114 136,196 5.20 3,594,884 147,807 5.50
Leasing and equipment finance 3,146,345 129,261 5.48 3,084,613 139,813 6.04
Inventory finance 1,392,828 64,811 6.22 889,709 47,816 7.19
Auto finance 226,092 10,933 6.46 - - -
Other 17,166 1,025 7.97 19,788 1,300 8.78
Total loans and leases 15,067,571 626,830 5.55 14,629,312 640,935 5.85
Total interest-earning assets 16,838,812 667,536 5.29 17,575,536 709,198 5.39
Other assets 1,256,931 1,176,606
Total assets $ 18,095,743 $ 18,752,142
LIABILITIES AND EQUITY:
Non-interest bearing deposits:
Retail $ 1,317,448 $ 1,443,033
Small business 726,732 685,435
Commercial and custodial 313,240 288,202
Total non-interest bearing deposits 2,357,420 2,416,670
Interest-bearing deposits:
Checking 2,258,843 2,482 .15 2,120,083 3,633 .23
Savings 6,022,751 15,323 .34 5,608,783 22,688 .54
Money market 753,486 2,144 .38 657,570 2,331 .47
Subtotal 9,035,080 19,949 .29 8,386,436 28,652 .46
Certificates of deposit 1,567,258 10,067 .86 1,100,029 6,665 .81
Total interest-bearing deposits 10,602,338 30,016 .38 9,486,465 35,317 .50
Total deposits 12,959,758 30,016 .31 11,903,135 35,317 .40
Borrowings:
Short-term borrowings 401,305 945 .31 53,619 144 .36
Long-term borrowings 2,593,917 55,679 2.86 4,538,823 145,929 4.30
Total borrowings 2,995,222 56,624 2.52 4,592,442 146,073 4.25
Total interest-bearing liabilities 13,597,560 86,640 .85 14,078,907 181,390 1.72
Total deposits and borrowings 15,954,980 86,640 .72 16,495,577 181,390 1.47
Other liabilities 411,114 558,119
Total liabilities 16,366,094 17,053,696
Total TCF Financial Corporation stockholders' equity 1,714,238 1,689,695
Non-controlling interest in subsidiaries 15,411 8,751
Total equity 1,729,649 1,698,446
Total liabilities and equity $ 18,095,743 $ 18,752,142
Net interest income and margin $ 580,896 4.61 $ 527,808 4.01
 
(1) Annualized.
(2) Interest and yields are presented on a fully tax equivalent basis.
(3) Average balances and yields of securities available for sale are based upon the historical amortized cost and excludes equity securities.
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED QUARTERLY STATEMENTS OF COMPREHENSIVE INCOME AND FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per-share data)
(Unaudited)
        At or For the Three Months Ended
Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31,   Sep. 30,
2012     2012     2012     2011     2011
Interest income:
Loans and leases $ 210,140 $ 208,766 $ 205,984 $ 205,415 $ 210,885
Securities available for sale 5,607 5,816 19,112 22,559 22,561
Investments and other 4,105   3,633   2,433   2,333   1,997  
Total interest income 219,852   218,215   227,529   230,307   235,443  
Interest expense:
Deposits 10,757 10,197 9,061 9,791 11,883
Borrowings 8,536   9,794   38,295   47,082   47,496  
Total interest expense 19,293   19,991   47,356   56,873   59,379  
Net interest income 200,559 198,224 180,173 173,434 176,064
Provision for credit losses 96,275   54,106   48,542   59,249   52,315  
Net interest income after provision for
credit losses 104,284   144,118   131,631   114,185   123,749  
Non-interest income:
Fees and service charges 43,745 48,090 41,856 51,002 58,452
Card revenue 12,927 13,530 13,207 13,643 27,701
ATM revenue 6,122   6,276   6,199   6,608   7,523  
Subtotal 62,794 67,896 61,262 71,253 93,676
Leasing and equipment finance 20,498 23,207 22,867 18,492 21,646
Gain on sale of auto loans 7,486 5,496 2,250 1,133 -
Gain on sale of consumer real estate loans 4,559 - - - -
Other 3,688   3,168   2,355   1,570   786  
Fees and other revenue 99,025 99,767 88,734 92,448 116,108
Gains on securities, net 13,033   13,116   76,611   5,842   1,648  
Total non-interest income 112,058   112,883   165,345   98,290   117,756  
Non-interest expense:
Compensation and employee benefits 98,409 97,787 95,967 82,595 87,758
Occupancy and equipment 33,006 32,731 32,246 32,366 31,129
FDIC insurance 6,899 8,469 6,386 6,647 7,363
Advertising and marketing 4,248 5,404 2,617 2,250 1,145
Deposit account premiums 485 1,690 5,971 6,482 7,045
Operating lease depreciation 6,325 6,417 6,731 6,811 7,409
Other 36,173   36,956   37,296   39,148   34,708  
Subtotal 185,545 189,454 187,214 176,299 176,557
Loss on termination of debt - - 550,735 - -
Foreclosed real estate and repossessed assets, net 10,670 12,059 11,047 11,323 12,430
Other credit costs, net 593   1,476   (288 ) (89 ) (139 )
Total non-interest expense 196,808   202,989   748,708   187,533   188,848  
Income (loss) before income tax expense 19,534 54,012 (451,732 ) 24,942 52,657
Income tax expense (benefit) 6,304   20,542   (170,244 ) 7,424   19,159  
Income (loss) after income tax expense 13,230 33,470 (281,488 ) 17,518 33,498
Income attributable to non-controlling interest 1,536 1,939 1,406 1,075 1,243
Preferred stock dividends 2,372   -   -   -   -  
Net income (loss) available to common stockholders 9,322   31,531   (282,894 ) 16,443   32,255  
Other comprehensive income (loss):
Reclassification adjustment for securities gains
included in net income (12,912 ) - (76,967 ) (6,130 ) (1,915 )
Unrealized holding gains (losses) arising during the
period on securities available for sale 16,283 19,868 (7,768 ) (4,334 ) 116,958
Foreign currency hedge (630 ) 268 (404 ) (458 ) 1,319
Foreign currency translation adjustment 640 (324 ) 385 443 (1,410 )
Recognized postretirement prior service cost
and transition obligation (6 ) (7 ) (7 ) 305 1
Income tax (expense) benefit (1,011 ) (7,375 ) 31,208   3,890   (42,643 )
Total other comprehensive income (loss) 2,364   12,430   (53,553 ) (6,284 ) 72,310  
Comprehensive income (loss) $ 11,686   $ 43,961   $ (336,447 ) $ 10,159   $ 104,565  
Net income (loss) per common share:
Basic $ .06 $ .20 $ (1.78 ) $ .10 $ .20
Diluted .06 .20 (1.78 ) .10 .20
 
Dividends declared per common share $ .05 $ .05 $ .05 $ .05 $ .05
Financial Highlights:
Pre-tax pre-provision profit(1) $ 115,809 $ 108,118 $ 70,578 $ 84,191 $ 104,972
Return on average assets(2) .30 % .76 % (5.96 ) % .37 % .71 %
Return on average common equity(2) 2.36 8.13 (63.38 ) 3.55 7.12
Net interest margin(2) 4.85 4.86 4.14 3.92 3.96
 

(1) Pre-tax pre-provision profit ("PTPP") is calculated as total revenues less non-interest expense. First quarter 2012 PTPP excludes the net loss of $473.8 million related to the balance sheet repositioning completed in the first quarter of 2012.
(2) Annualized.
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED QUARTERLY AVERAGE BALANCE SHEETS
(In thousands)
(Unaudited)
                 
 
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,
2012 2012 2012 2011 2011
 
ASSETS
Cash and due from banks $ 628,697 $ 555,590 $ 863,310 $ 1,175,118 $ 1,078,521
Investments 123,223 149,813 168,805 162,359 162,717
U.S. Government sponsored entities:
Mortgage-backed securities 701,155 736,251 2,021,574 2,374,026 2,357,865
U.S. Treasury securities - - - - 10,761
Other securities 2,224   2,097   1,678   1,816   2,132  
Total securities available for sale 703,379 738,348 2,023,252 2,375,842 2,370,758
Loans and leases held for sale 80,549 44,788 5,872 4,822 -
Loans and leases:
Consumer real estate:
Fixed-rate 4,197,903 4,365,670 4,443,148 4,528,165 4,592,855
Variable-rate 2,531,351   2,427,745   2,401,915   2,404,886   2,392,966  
Total consumer real estate 6,729,254 6,793,415 6,845,063 6,933,051 6,985,821
Commercial:
Fixed- and adjustable-rate 2,682,193 2,730,085 2,737,848 2,775,219 2,853,117
Variable-rate 855,918   761,964   719,872   701,441   711,081  
Total commercial 3,538,111 3,492,049 3,457,720 3,476,660 3,564,198
Leasing and equipment finance 3,164,592 3,145,914 3,128,329 3,043,329 3,066,208
Inventory finance 1,440,298 1,571,004 1,145,183 766,885 826,198
Auto finance 367,271 223,893 85,562 1,442 -
Other 16,280   17,647   17,582   17,944   18,183  
Total loans and leases 15,255,806   15,243,922   14,679,439   14,239,311   14,460,608  
Allowance for loan and lease losses (264,626 ) (266,187 ) (257,895 ) (251,158 ) (253,547 )
Net loans and leases 14,991,180 14,977,735 14,421,544 13,988,153 14,207,061
Premises and equipment, net 442,456 438,438 435,412 436,715 439,288
Goodwill 225,640 225,640 225,640 179,070 152,599
Other assets 521,397   524,466   753,873   598,367   582,290  
Total assets $ 17,716,521   $ 17,654,818   $ 18,897,708   $ 18,920,446   $ 18,993,234  
 
LIABILITIES AND EQUITY
Non-interest-bearing deposits:
Retail $ 1,275,722 $ 1,316,767 $ 1,359,781 $ 1,330,462 $ 1,396,857
Small business 746,511 725,052 708,416 738,867 704,272
Commercial and custodial 324,739   310,321   305,064   303,216   294,253  
Total non-interest bearing deposits 2,346,972 2,352,140 2,373,261 2,372,545 2,395,382
Interest-bearing deposits:
Checking 2,255,561 2,306,810 2,214,192 2,096,340 2,103,184
Savings 6,153,079 6,031,015 5,882,730 5,859,147 5,789,188
Money market 848,899   748,016   662,493   662,024   650,598  
Subtotal 9,257,539 9,085,841 8,759,415 8,617,511 8,542,970
Certificates of deposit 1,953,208   1,608,653   1,135,673   1,112,735   1,114,934  
Total interest-bearing deposits 11,210,747   10,694,494   9,895,088   9,730,246   9,657,904  
Total deposits 13,557,719   13,046,634   12,268,349   12,102,791   12,053,286  
Borrowings:
Short-term borrowings 65,531 705,888 436,171 37,081 43,073
Long-term borrowings 1,985,094   1,986,182   3,817,165   4,387,036   4,403,724  
Total borrowings 2,050,625 2,692,070 4,253,336 4,424,117 4,446,797
Accrued expenses and other liabilities 343,336   335,113   577,142   538,148   672,944  
Total liabilities 15,951,680   16,073,817   17,098,827   17,065,056   17,173,027  
Equity:
Preferred stock 166,721 10,993 - - -
Common stock 1,631 1,625 1,617 1,602 1,598
Additional paid-in capital 742,598 738,089 727,596 711,914 705,366
Retained earnings, subject to certain restrictions 862,570 846,349 1,052,632 1,121,866 1,105,322
Accumulated other comprehensive income (loss) 19,321 11,601 46,029 48,618 34,073
Treasury stock at cost and other (42,890 ) (45,499 ) (42,499 ) (33,032 ) (33,008 )
Total TCF Financial Corporation stockholders equity 1,749,951 1,563,158 1,785,375 1,850,968 1,813,351
Non-controlling interest in subsidiaries 14,890   17,843   13,506   4,422   6,856  
Total equity 1,764,841   1,581,001   1,798,881   1,855,390   1,820,207  
Total liabilities and equity $ 17,716,521   $ 17,654,818   $ 18,897,708   $ 18,920,446   $ 18,993,234  
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED QUARTERLY YIELDS AND RATES(1) (2)
(Unaudited)
                       
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,
2012 2012 2012 2011 2011
 
ASSETS
 
Investments and other 2.09 % 2.48 % 1.29 % .84 % .83 %
U.S. Government sponsored entities:
Mortgage-backed securities, fixed-rate 3.15 3.17 3.66 3.79 3.86
U.S. Treasury securities - - - - .04
Other securities 3.32 4.14 5.24 3.36 4.68
Total securities available for sale(3) 3.15 3.17 3.66 3.79 3.84
Loans and leases held for sale 7.89 8.80 3.08 10.78 -
Loans and leases:
Consumer real estate:
Fixed-rate 5.94 5.84 5.99 6.04 6.06
Variable-rate 5.04 5.00 5.03 5.09 5.11
Total consumer real estate 5.60 5.54 5.65 5.71 5.73
Commercial:
Fixed- and adjustable-rate 5.57 5.49 5.61 5.68 5.72
Variable-rate 3.77 3.99 4.20 4.28 4.33
Total commercial 5.14 5.16 5.32 5.40 5.44
Leasing and equipment finance 5.33 5.48 5.63 5.88 6.01
Inventory finance 6.19 6.07 6.58 7.12 7.28
Auto finance 5.97 6.89 7.44 3.30 -
Other 7.83 7.66 8.42 8.91 8.44
Total loans and leases 5.50 5.52 5.65 5.75 5.81
 
Total interest-earning assets 5.32 5.34 5.24 5.20 5.28
 
LIABILITIES
 
Interest-bearing deposits:
Checking .12 .15 .16 .15 .20
Savings .31 .34 .37 .42 .54
Money market .38 .39 .37 .37 .42
Subtotal .27 .30 .32 .35 .45
Certificates of deposit .92 .86 .75 .75 .79
Total interest-bearing deposits .38 .38 .37 .40 .49
Total deposits .32 .31 .30 .32 .39
Borrowings:
Short-term borrowings .49 .30 .30 .29 .29
Long-term borrowings 1.70 1.87 4.00 4.26 4.28
Total borrowings 1.66 1.46 3.62 4.23 4.24
 
Total interest-bearing liabilities .58 .60 1.35 1.59 1.67
 
Net interest margin 4.85 4.86 4.14 3.92 3.96
 
(1) Annualized.
(2) Yields are presented on a fully tax equivalent basis.
(3) Average yields of securities available for sale are based upon the historical amortized cost and excludes equity securities.
 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES(1)
(Dollars in thousands)
(Unaudited)
  At Sep. 30,   At Dec. 31,

 
2012 2011
Computation of total equity to total assets:
Total equity $ 1,764,669 $ 1,878,627
Total assets 17,878,393 18,979,388
Total equity to total assets 9.87 % 9.90 %
 
Computation of tangible realized common equity to tangible assets:
Total equity $ 1,764,669 $ 1,878,627
Less: Non-controlling interest in subsidiaries   13,205   10,494
Total TCF Financial Corp. stockholders’ equity 1,751,464 1,868,133
Less:
Preferred stock 166,721 -
Goodwill 225,640 225,640
Other intangibles 9,092 7,134
Accumulated other comprehensive income   18,067   56,826
Tangible realized common equity $ 1,331,944 $ 1,578,533
 
Total assets $ 17,878,393 $ 18,979,388
Less:
Goodwill 225,640 225,640
Other intangibles   9,092   7,134
Tangible assets $ 17,643,661 $ 18,746,614
 
Tangible realized common equity to tangible assets 7.55 % 8.42 %
 
At Sep. 30, At Dec. 31,
2012 2011
Computation of tier 1 risk-based capital ratio:
Total tier 1 capital $ 1,515,050 $ 1,706,926
Total risk-weighted assets 14,562,779 13,475,330
Total tier 1 risk-based capital ratio 10.40 % 12.67 %
 
Computation of tier 1 common capital ratio:
Total tier 1 capital $ 1,515,050 $ 1,706,926
Less:
Preferred stock 166,721 -
Qualifying non-controlling interest in subsidiaries 13,205 10,494
Qualifying trust preferred securities   -   115,000
Total tier 1 common capital $ 1,335,124 $ 1,581,432
 
Total tier 1 common capital ratio 9.17 % 11.74 %
 

(1) In contrast to GAAP-basis and regulatory capital-basis measures, tangible realized common equity excludes the effect of goodwill, other intangibles and accumulated other comprehensive income (loss) and the total tier 1 common capital ratio excludes the effect of preferred stock, qualifying trust preferred securities and qualifying non-controlling interest in subsidiaries. Management reviews these ratios as ongoing measures and has included this information because of current interest in the industry. The methodology for calculating these ratios may vary between companies.

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