WAYZATA, Minn.--(BUSINESS WIRE)--TCF Financial Corporation (NYSE:TCB):
Summary of Financial Results | Table 1 | |||||||||||||||||
Percent Change | ||||||||||||||||||
(Dollars in thousands, except per-share data) | 1Q | 4Q | 1Q | 1Q16 vs | 1Q16 vs | |||||||||||||
2016 | 2015 | 2015 | 4Q15 | 1Q15 | ||||||||||||||
Net income attributable to TCF | $ | 48,046 | $ | 52,492 | $ | 39,801 | (8.5 | )% | 20.7 | % | ||||||||
Net interest income | 211,658 | 205,669 | 203,420 | 2.9 | 4.0 | |||||||||||||
Diluted earnings per common share | 0.26 | 0.29 | 0.21 | (10.3 | ) | 23.8 | ||||||||||||
Financial Ratios(1) |
||||||||||||||||||
Pre-tax pre-provision return on average assets(2) | 1.83 | % | 1.95 | % | 1.58 | % | ||||||||||||
Return on average assets | 0.96 | 1.08 | 0.85 | |||||||||||||||
Return on average common equity | 8.45 | 9.53 | 7.47 | |||||||||||||||
Return on average tangible common equity(3) | 9.57 | 10.82 | 8.58 | |||||||||||||||
Net interest margin | 4.37 | 4.35 | 4.50 | |||||||||||||||
Net charge-offs as a percentage of average loans and leases | 0.27 | 0.29 | 0.28 | |||||||||||||||
(1) Annualized. | ||||||||||||||||||
(2) Pre-tax pre-provision profit is calculated as total revenues less non-interest expense. | ||||||||||||||||||
(3) See "Reconciliation of GAAP to Non-GAAP Financial Measures" table. | ||||||||||||||||||
TCF Financial Corporation ("TCF" or the "Company") (NYSE:TCB) today reported net income of $48.0 million for the first quarter of 2016, compared with net income of $39.8 million for the first quarter of 2015, and net income of $52.5 million for the fourth quarter of 2015. Diluted earnings per common share was 26 cents for the first quarter of 2016, compared with 21 cents for the first quarter of 2015, and 29 cents for the fourth quarter of 2015.
"TCF reported strong first quarter results as we continued to emphasize our four strategic pillars of diversification, profitable growth, operating leverage and core funding, in all areas of the organization," said Craig R. Dahl, president and chief executive officer. "Our consistent and sustainable loan and lease origination capabilities, funded by a growing deposit base, continued to drive revenue growth and diversification. Meanwhile, credit quality showed additional improvement as net charge-offs, delinquencies as a percentage of portfolio and non-performing assets all decreased during the quarter. Finally, we took another step toward improving our operating efficiencies by announcing, as part of extending our retail banking relationship with Jewel-Osco, plans to close 33 in-store branches in Chicago, replacing them with full function, image-enabled ATMs.
"Based on these results, I am more encouraged than ever by the strategies and teams we have in place. We will continue to execute on our strategic pillars with the ultimate goal of accelerating value creation for our shareholders."
Revenue | ||||||||||||||||||
Total Revenue | Table 2 | |||||||||||||||||
Percent Change | ||||||||||||||||||
(Dollars in thousands) | 1Q | 4Q | 1Q | 1Q16 vs | 1Q16 vs | |||||||||||||
2016 | 2015 | 2015 | 4Q15 | 1Q15 | ||||||||||||||
Net interest income | $ | 211,658 | $ | 205,669 | $ | 203,420 | 2.9 | % | 4.0 | % | ||||||||
Non-interest income: | ||||||||||||||||||
Fees and service charges | 32,817 | 37,741 | 33,972 | (13.0 | ) | (3.4 | ) | |||||||||||
Card revenue | 13,363 | 13,781 | 12,901 | (3.0 | ) | 3.6 | ||||||||||||
ATM revenue | 5,021 | 5,143 | 5,122 | (2.4 | ) | (2.0 | ) | |||||||||||
Subtotal | 51,201 | 56,665 | 51,995 | (9.6 | ) | (1.5 | ) | |||||||||||
Gains on sales of auto loans, net | 11,920 | 3,136 | 6,265 | N.M. | 90.3 | |||||||||||||
Gains on sales of consumer real estate loans, net | 9,384 | 13,104 | 8,763 | (28.4 | ) | 7.1 | ||||||||||||
Servicing fee income | 8,883 | 8,622 | 7,342 | 3.0 | 21.0 | |||||||||||||
Subtotal | 30,187 | 24,862 | 22,370 | 21.4 | 34.9 | |||||||||||||
Leasing and equipment finance | 28,487 | 32,355 | 22,224 | (12.0 | ) | 28.2 | ||||||||||||
Other | 2,843 | 1,806 | 4,127 | 57.4 | (31.1 | ) | ||||||||||||
Fees and other revenue | 112,718 | 115,688 | 100,716 | (2.6 | ) | 11.9 | ||||||||||||
Gains (losses) on securities, net | (116 | ) | (29 | ) | (78 | ) | N.M. | (48.7 | ) | |||||||||
Total non-interest income | 112,602 | 115,659 | 100,638 | (2.6 | ) | 11.9 | ||||||||||||
Total revenue | $ | 324,260 | $ | 321,328 | $ | 304,058 | 0.9 | 6.6 | ||||||||||
Net interest margin(1) | 4.37 | % | 4.35 | % | 4.50 | % | ||||||||||||
Total non-interest income as a percentage of total revenue | 34.7 | 36.0 | 33.1 | |||||||||||||||
N.M. Not Meaningful. | ||||||||||||||||||
(1) Annualized. | ||||||||||||||||||
Net Interest Income
- Net interest income for the first quarter of 2016 increased $8.2 million, or 4.0 percent, compared with the first quarter of 2015. The increase was primarily due to higher average loan and lease balances in the auto finance, inventory finance and leasing and equipment finance portfolios, partially offset by the run-off of consumer real estate first mortgage lien balances, overall net margin compression and higher promotional rates paid on certificates of deposit.
- Net interest income for the first quarter of 2016 increased $6.0 million, or 2.9 percent, compared with the fourth quarter of 2015. The increase was primarily due to higher than expected seasonality in average loan balances in the inventory finance portfolio and higher average loan balances in the auto finance portfolio due to maturation of the business model, partially offset by higher promotional rates paid on certificates of deposit.
- Net interest margin for the first quarter of 2016 was 4.37 percent, compared with 4.50 percent for the first quarter of 2015 and 4.35 percent for the fourth quarter of 2015. The decrease compared with the first quarter of 2015 was primarily due to margin compression resulting from the impact of the competitive low interest rate environment and higher rates paid on certificates of deposit. The increase compared with the fourth quarter of 2015 was primarily due to higher average loan balances in the inventory finance portfolio, partially offset by higher rates paid on certificates of deposit.
Non-interest Income
- Fees and service charges in the first quarter of 2016 were $32.8 million, down $1.2 million, or 3.4 percent, from the first quarter of 2015 and down $4.9 million, or 13.0 percent, from the fourth quarter of 2015. The decrease compared with the first quarter of 2015 was primarily due to ongoing consumer behavior changes, as well as higher average checking account balances per customer. The decrease compared with the fourth quarter of 2015 was primarily due to seasonality, as well as higher average checking account balances per customer.
- TCF sold $444.3 million, $203.5 million and $271.1 million of auto loans during the first quarters of 2016 and 2015, and the fourth quarter of 2015, respectively, resulting in net gains in each respective period.
- TCF sold $321.4 million, $264.3 million and $389.1 million of consumer real estate loans during the first quarters of 2016 and 2015, and the fourth quarter of 2015, respectively, resulting in net gains in each respective period. TCF has two consumer real estate loan sale programs; one that sells nationally originated junior lien loans and the other that originates first mortgage lien loans in our primary banking markets and sells the loans through a correspondent relationship.
- Servicing fee income was $8.9 million on $4.4 billion of average loans and leases serviced for others during the first quarter of 2016, compared with $7.3 million on $3.5 billion for the first quarter of 2015 and $8.6 million on $4.2 billion for the fourth quarter of 2015. The increases from both periods were primarily due to the cumulative effect of the increase in the portfolio of auto and consumer real estate loans sold with servicing retained by TCF.
Loans and Leases | ||||||||||||||||||
Period-End and Average Loans and Leases | Table 3 | |||||||||||||||||
Percent Change | ||||||||||||||||||
(Dollars in thousands) | 1Q | 4Q | 1Q | 1Q16 vs | 1Q16 vs | |||||||||||||
2016 | 2015 | 2015 | 4Q15 | 1Q15 | ||||||||||||||
Period-End: | ||||||||||||||||||
Consumer real estate: | ||||||||||||||||||
First mortgage lien | $ | 2,521,492 | $ | 2,624,956 | $ | 3,011,166 |
(3.9 |
)% |
(16.3 |
)% |
||||||||
Junior lien | 2,729,075 | 2,839,316 | 2,597,895 | (3.9 | ) | 5.0 | ||||||||||||
Total consumer real estate | 5,250,567 | 5,464,272 | 5,609,061 | (3.9 | ) | (6.4 | ) | |||||||||||
Commercial | 3,114,594 | 3,145,832 | 3,205,599 | (1.0 | ) | (2.8 | ) | |||||||||||
Leasing and equipment finance | 4,005,934 | 4,012,248 | 3,729,386 | (0.2 | ) | 7.4 | ||||||||||||
Inventory finance | 2,676,675 | 2,146,754 | 2,336,518 | 24.7 | 14.6 | |||||||||||||
Auto finance | 2,786,731 | 2,647,596 | 2,156,139 | 5.3 | 29.2 | |||||||||||||
Other | 18,940 | 19,297 | 20,448 | (1.9 | ) | (7.4 | ) | |||||||||||
Total | $ | 17,853,441 | $ | 17,435,999 | $ | 17,057,151 | 2.4 | 4.7 | ||||||||||
Average: | ||||||||||||||||||
Consumer real estate: | ||||||||||||||||||
First mortgage lien | $ | 2,573,915 | $ | 2,670,355 | $ | 3,076,802 | (3.6 | )% | (16.3 | )% | ||||||||
Junior lien | 2,884,859 | 2,934,169 | 2,614,538 | (1.7 | ) | 10.3 | ||||||||||||
Total consumer real estate | 5,458,774 | 5,604,524 | 5,691,340 | (2.6 | ) | (4.1 | ) | |||||||||||
Commercial | 3,158,101 | 3,117,983 | 3,154,008 | 1.3 | 0.1 | |||||||||||||
Leasing and equipment finance | 3,992,678 | 3,911,025 | 3,729,481 | 2.1 | 7.1 | |||||||||||||
Inventory finance | 2,433,534 | 2,180,534 | 2,108,871 | 11.6 | 15.4 | |||||||||||||
Auto finance | 2,703,880 | 2,514,923 | 2,021,144 | 7.5 | 33.8 | |||||||||||||
Other | 10,018 | 9,060 | 11,616 | 10.6 | (13.8 | ) | ||||||||||||
Total | $ | 17,756,985 | $ | 17,338,049 | $ | 16,716,460 | 2.4 | 6.2 | ||||||||||
-
Period-end loans and leases were $17.9 billion at March 31, 2016, an
increase of $0.8 billion, or 4.7 percent, compared with March 31, 2015
and an increase of $0.4 billion, or 2.4 percent, compared with
December 31, 2015. Average loans and leases were $17.8 billion for the
first quarter of 2016, an increase of $1.0 billion, or 6.2 percent,
compared with the first quarter of 2015 and an increase of
$0.4 billion, or 2.4 percent, compared with the fourth quarter of 2015.
The increases from the first quarter of 2015 were primarily due to the maturation of the business model in auto finance and increased seasonality in the early shipment of spring product and expansion of the number of active dealers in inventory finance, as well as an increase in the leasing and equipment finance portfolio due to strong fourth quarter originations, partially offset by run-off in the consumer real estate first mortgage lien portfolio. The increases from the fourth quarter of 2015 were primarily due to seasonally higher balances in the inventory finance portfolio and continued growth in the auto finance portfolio, partially offset by a decrease in the total consumer real estate portfolio. - Loan and lease originations were $4.0 billion for the first quarter of 2016, an increase of $0.5 billion, or 13.1 percent, compared with the first quarter of 2015 and an increase of $0.2 billion, or 4.8 percent, compared with the fourth quarter of 2015. The increase from the first quarter of 2015 was primarily due to strong growth in the lawn and garden segment of inventory finance and increases in auto finance and leasing and equipment finance originations, partially offset by decreases in commercial and consumer real estate originations. The increase from the fourth quarter of 2015 was primarily due to seasonally higher inventory finance originations and the continued growth in auto finance, partially offset by decreases in leasing and equipment finance, commercial and consumer real estate originations.
Credit Quality | ||||||||||||||||||||||||||
Credit Trends | Table 4 | |||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||
(Dollars in thousands) | 1Q | 4Q | 3Q | 2Q | 1Q | 1Q16 vs | 1Q16 vs | |||||||||||||||||||
2016 | 2015 | 2015 | 2015 | 2015 | 4Q15 | 1Q15 | ||||||||||||||||||||
Over 60-day delinquencies as a percentage of period-end loans and leases(1) | 0.10 | % | 0.11 | % | 0.17 | % | 0.10 | % | 0.14 | % | (1 |
) bps |
(4 | ) bps | ||||||||||||
Net charge-offs as a percentage of average loans and leases(2) | 0.27 | 0.29 | 0.23 | 0.41 | 0.28 | (2 | ) | (1 | ) | |||||||||||||||||
Non-accrual loans and leases and other real estate owned | $ | 241,090 | $ | 250,448 | $ | 264,694 | $ | 263,717 | $ | 284,541 | (3.7 | )% | (15.3 | )% | ||||||||||||
Provision for credit losses | 18,842 | 17,607 | 10,018 | 12,528 | 12,791 | 7.0 | 47.3 | |||||||||||||||||||
(1) Excludes acquired portfolios and non-accrual loans and leases. | ||||||||||||||||||||||||||
(2) Annualized. | ||||||||||||||||||||||||||
- The over 60-day delinquency rate, excluding acquired portfolios and non-accrual loans and leases, was 0.10 percent at March 31, 2016, down from 0.14 percent at March 31, 2015, and down from 0.11 percent at December 31, 2015. The decreases from both periods were primarily due to the stabilization of the consumer real estate portfolio as economic conditions improved in our markets.
- The net charge-off rate was 0.27 percent for the first quarter of 2016, down from 0.28 percent for the first quarter of 2015, and down from 0.29 percent for the fourth quarter of 2015. The decrease from the first quarter of 2015 was primarily due to improved credit quality in the consumer real estate portfolio, partially offset by increased net charge-offs in the auto finance portfolio. The decrease from the fourth quarter of 2015 was due to net recoveries in the commercial portfolio and decreased net charge-offs in the leasing and equipment finance portfolio.
- Non-accrual loans and leases and other real estate owned was $241.1 million at March 31, 2016, a decrease of $43.5 million, or 15.3 percent, from March 31, 2015, and a decrease of $9.4 million, or 3.7 percent, from December 31, 2015. The decreases from both periods were primarily due to increased sales of consumer real estate properties, improving credit quality trends and continued efforts to actively work out problem loans in the commercial portfolio.
- Provision for credit losses was $18.8 million for the first quarter of 2016, an increase of $6.1 million, or 47.3 percent, from the first quarter of 2015, and an increase of $1.2 million, or 7.0 percent, from the fourth quarter of 2015. The increase from the first quarter of 2015 was primarily due to increased reserve requirements related to changes in economic outlook, growth in the auto finance, inventory finance, and leasing and equipment finance portfolios and increased net charge-offs in the auto finance portfolio due primarily to maturation of the portfolio. The increase from the fourth quarter of 2015 was primarily due to increased reserve requirements related to changes in economic outlook and growth in the inventory finance portfolio.
Deposits | ||||||||||||||||||
Average Deposits | Table 5 | |||||||||||||||||
Percent Change | ||||||||||||||||||
(Dollars in thousands) | 1Q | 4Q | 1Q | 1Q16 vs | 1Q16 vs | |||||||||||||
2016 | 2015 | 2015 | 4Q15 | 1Q15 | ||||||||||||||
Checking | $ | 5,593,300 | $ | 5,412,454 | $ | 5,300,699 | 3.3 | % | 5.5 | % | ||||||||
Savings | 4,713,765 | 4,733,703 | 5,161,697 | (0.4 | ) | (8.7 | ) | |||||||||||
Money market | 2,472,751 | 2,349,127 | 2,149,340 | 5.3 | 15.0 | |||||||||||||
Certificates of deposit | 4,104,951 | 3,793,653 | 3,041,790 | 8.2 | 35.0 | |||||||||||||
Total average deposits | $ | 16,884,767 | $ | 16,288,937 | $ | 15,653,526 | 3.7 | 7.9 | ||||||||||
Average interest rate on deposits(1) | 0.36 | % | 0.34 | % | 0.29 | % | ||||||||||||
(1) Annualized. | ||||||||||||||||||
- Total average deposits for the first quarter of 2016 increased $1.2 billion, or 7.9 percent, from the first quarter of 2015 and increased $0.6 billion, or 3.7 percent, from the fourth quarter of 2015. The increases from both periods were primarily due to special campaigns for certificates of deposit and money market accounts.
- The average interest rate on deposits for the first quarter of 2016 was 0.36 percent, up 7 basis points from the first quarter of 2015 and up 2 basis points from the fourth quarter of 2015. The increases from both periods were primarily due to increased average interest rates resulting from promotions for certificates of deposit.
Non-interest Expense | ||||||||||||||||||
Non-interest Expense | Table 6 | |||||||||||||||||
Change | ||||||||||||||||||
(Dollars in thousands) | 1Q | 4Q | 1Q | 1Q16 vs | 1Q16 vs | |||||||||||||
2016 | 2015 | 2015 | 4Q15 | 1Q15 | ||||||||||||||
Compensation and employee benefits | $ | 124,473 | $ | 109,061 | $ | 115,815 | 14.1 | % | 7.5 | % | ||||||||
Occupancy and equipment | 37,008 | 37,824 | 36,827 | (2.2 | ) | 0.5 | ||||||||||||
FDIC insurance | 4,113 | 5,173 | 5,393 | (20.5 | ) | (23.7 | ) | |||||||||||
Advertising and marketing | 5,887 | 5,316 | 6,523 | 10.7 | (9.8 | ) | ||||||||||||
Other | 43,348 | 46,441 | 48,133 | (6.7 | ) | (9.9 | ) | |||||||||||
Subtotal | 214,829 | 203,815 | 212,691 | 5.4 | 1.0 | |||||||||||||
Operating lease depreciation | 9,573 | 13,608 | 7,734 | (29.7 | ) | 23.8 | ||||||||||||
Foreclosed real estate and repossessed assets, net | 3,920 | 4,940 | 6,196 | (20.6 | ) | (36.7 | ) | |||||||||||
Other credit costs, net | 12 | 224 | 146 | (94.6 | ) | (91.8 | ) | |||||||||||
Total non-interest expense | $ | 228,334 | $ | 222,587 | $ | 226,767 | 2.6 | 0.7 | ||||||||||
Efficiency ratio | 70.42 | % | 69.27 | % | 74.58 | % | 115 | bps | (416 |
)bps |
||||||||
- Compensation and employee benefits expense increased $8.7 million, or 7.5 percent, from the first quarter of 2015 and increased $15.4 million, or 14.1 percent, from the fourth quarter of 2015. The increase from the first quarter of 2015 was primarily due to increased staff levels to support the continued growth of auto finance and higher incentives based on production results. The increase from the fourth quarter of 2015 was primarily due to seasonality of payroll taxes, higher incentives based on production results and non-recurring items in the fourth quarter of 2015, including the annual pension plan valuation adjustment resulting from an increase to the discount rate.
- Operating lease depreciation is a transactional cost that is typically more than offset by increases in leasing and equipment finance non-interest income.
Capital | ||||||||
Capital Information | Table 7 | |||||||
(Dollars in thousands, except per-share data) | 1Q 2016 | 4Q 2015 | ||||||
Total equity | $ | 2,368,841 | $ | 2,306,917 | ||||
Book value per common share | 12.19 | 11.94 | ||||||
Tangible book value per common share(1) | 10.85 | 10.59 | ||||||
Tangible common equity to tangible assets(1) | 8.78 | % | 8.79 | % | ||||
Capital accumulation rate(2) | 8.73 | 10.44 | ||||||
Regulatory Capital: | 1Q 2016(3) | 4Q 2015 | ||||||
Common equity Tier 1 capital | $ | 1,854,048 | $ | 1,814,442 | ||||
Tier 1 capital | 2,139,609 | 2,092,195 | ||||||
Total capital | 2,527,888 | 2,487,060 | ||||||
Regulatory Capital Ratios: | ||||||||
Common equity Tier 1 capital ratio | 9.98 | % | 10.00 | % | ||||
Tier 1 risk-based capital ratio | 11.51 | 11.54 | ||||||
Total risk-based capital ratio | 13.60 | 13.71 | ||||||
Tier 1 leverage ratio | 10.33 | 10.46 | ||||||
(1) See "Reconciliation of GAAP to Non-GAAP Financial Measures" table. | ||||||||
(2) Calculated as the change in annualized year-to-date common equity Tier 1 capital as a percentage of prior year end common equity Tier 1 capital. | ||||||||
(3) The regulatory capital ratios for 1Q 2016 are preliminary pending completion and filing of the Company's regulatory reports. | ||||||||
- TCF maintained strong capital ratios as the Company accumulates capital through earnings. The decreases in the regulatory capital ratios from the fourth quarter of 2015 were primarily the result of asset growth.
- On April 20, 2016, TCF's Board of Directors declared a regular quarterly cash dividend of 7.5 cents per common share, payable on June 1, 2016, to stockholders of record at the close of business on May 13, 2016. TCF also declared dividends on the 7.50% Series A and 6.45% Series B Non-Cumulative Perpetual Preferred Stock, both payable on June 1, 2016, to stockholders of record at the close of business on May 13, 2016.
Webcast Information
A live webcast of TCF's conference call to discuss the first quarter earnings will be hosted at TCF's website, http://ir.tcfbank.com, on April 21, 2016 at 9:00 a.m. CDT. A slide presentation for the call will be available on the website prior to the call. Additionally, the webcast will be available for replay on TCF's website after the conference call. The website also includes free access to company news releases, TCF's annual report, investor presentations and SEC filings.
TCF is a Wayzata, Minnesota-based national bank holding company. As of March 31, 2016, TCF had $21.3 billion in total assets and 376 branches in Illinois, Minnesota, Michigan, Colorado, Wisconsin, Arizona, South Dakota and Indiana, providing retail and commercial banking services. TCF, through its subsidiaries, also conducts commercial leasing, equipment finance, and auto finance business in all 50 states and commercial inventory finance business in all 50 states and Canada. For more information about TCF, please visit http://ir.tcfbank.com.
Cautionary Statements for Purposes of the Safe Harbor Provisions of the Securities Litigation Reform Act
Any statements contained in this earnings release regarding the outlook for the Company's businesses and their respective markets, such as projections of future performance, guidance, statements of the Company's plans and objectives, forecasts of market trends and other matters, are forward-looking statements based on the Company's assumptions and beliefs. Such statements may be identified by such words or phrases as "will likely result," "are expected to," "will continue," "outlook," "will benefit," "is anticipated," "estimate," "project," "management believes" or similar expressions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those discussed in such statements and no assurance can be given that the results in any forward-looking statement will be achieved. For these statements, TCF claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Any forward-looking statement speaks only as of the date on which it is made, and we disclaim any obligation to subsequently revise any forward-looking statement to reflect events or circumstances after such date or to reflect the occurrence of anticipated or unanticipated events.
Certain factors could cause the Company's future results to differ materially from those expressed or implied in any forward-looking statements contained herein. These factors include the factors discussed in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2015 under the heading "Risk Factors", the factors discussed below and any other cautionary statements, written or oral, which may be made or referred to in connection with any such forward-looking statements. Since it is not possible to foresee all such factors, these factors should not be considered as complete or exhaustive.
Adverse Economic or Business Conditions; Competitive Conditions; Credit and Other Risks. Deterioration in general economic and banking industry conditions, including those arising from government shutdowns, defaults, anticipated defaults or rating agency downgrades of sovereign debt (including debt of the U.S.), or increases in unemployment; adverse economic, business and competitive developments such as shrinking interest margins, reduced demand for financial services and loan and lease products, deposit outflows, increased deposit costs due to competition for deposit growth and evolving payment system developments, deposit account attrition or an inability to increase the number of deposit accounts; customers completing financial transactions without using a bank; adverse changes in credit quality and other risks posed by TCF's loan, lease, investment, securities held to maturity and securities available for sale portfolios, including declines in commercial or residential real estate values, changes in the allowance for loan and lease losses dictated by new market conditions or regulatory requirements, or the inability of home equity line borrowers to make increased payments caused by increased interest rates or amortization of principal; deviations from estimates of prepayment rates and fluctuations in interest rates that result in decreases in the value of assets such as interest-only strips that arise in connection with TCF's loan sales activity; interest rate risks resulting from fluctuations in prevailing interest rates or other factors that result in a mismatch between yields earned on TCF's interest-earning assets and the rates paid on its deposits and borrowings; foreign currency exchange risks; counterparty risk, including the risk of defaults by our counterparties or diminished availability of counterparties who satisfy our credit quality requirements; decreases in demand for the types of equipment that TCF leases or finances; the effect of any negative publicity.
Legislative and Regulatory Requirements. New consumer protection and supervisory requirements and regulations, including those resulting from action by the Consumer Financial Protection Bureau and changes in the scope of Federal preemption of state laws that could be applied to national banks and their subsidiaries; the imposition of requirements that adversely impact TCF's deposit, lending, loan collection and other business activities such as mortgage foreclosure moratorium laws, further regulation of financial institution campus banking programs, use by municipalities of eminent domain on property securing troubled residential mortgage loans, or imposition of underwriting or other limitations that impact the ability to offer certain variable-rate products; changes affecting customer account charges and fee income, including changes to interchange rates; regulatory actions or changes in customer opt-in preferences with respect to overdrafts, which may have an adverse impact on TCF; 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; regulatory criticism and resulting enforcement actions or other adverse consequences such as increased capital requirements, higher deposit insurance assessments or monetary damages or penalties; heightened regulatory practices, requirements or expectations, including, but not limited to, requirements related to enterprise risk management, the Bank Secrecy Act and anti-money laundering compliance activity.
Earnings/Capital Risks and Constraints, Liquidity Risks. Limitations on TCF's ability to 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 impact on banks of regulatory reform, including additional capital, leverage, liquidity and risk management requirements or changes in the composition of qualifying regulatory capital; adverse changes in securities markets directly or indirectly affecting TCF's ability to sell assets or to fund its operations; diminished unsecured borrowing capacity resulting from TCF credit rating downgrades or unfavorable conditions in the credit markets that restrict or limit various funding sources; costs associated with new regulatory requirements or interpretive guidance relating to liquidity; uncertainties relating to future retail deposit account changes, including limitations on TCF's ability to predict customer behavior and the impact on TCF's fee revenues.
Branching Risk; Growth Risks. Adverse developments affecting TCF's supermarket banking relationships or any of the supermarket chains in which TCF maintains supermarket branches; costs related to closing underperforming branches; inability to timely close underperforming branches due to long-term lease obligations; slower than anticipated growth in existing or acquired businesses; inability to successfully execute on TCF's growth strategy through acquisitions or cross-selling opportunities; failure to expand or diversify TCF's balance sheet through new or expanded programs or opportunities; failure to successfully attract and retain new customers, including the failure to attract and retain manufacturers and dealers to expand the inventory finance business; failure to effectuate, and risks of claims related to, sales and securitizations of loans; risks related to new product additions and addition of distribution channels (or entry into new markets) for existing products.
Technological and Operational Matters. Technological or operational difficulties, loss or theft of information, cyber-attacks and other security breaches, counterparty failures and the possibility that deposit account losses (fraudulent checks, etc.) may increase; failure to keep pace with technological change, including the failure to develop and maintain technology necessary to satisfy customer demands; ability to attract and retain employees given competitive conditions.
Litigation Risks. Results of litigation or government enforcement actions, including class action litigation or enforcement actions concerning TCF's lending or deposit activities, including account opening/origination, servicing practices, fees or charges, employment practices, or checking account overdraft program "opt in" requirements; and possible increases in indemnification obligations for certain litigation against Visa U.S.A.
Accounting, Audit, Tax and Insurance Matters. Changes in accounting standards or interpretations of existing standards; federal or state monetary, fiscal or tax policies, including adoption of state legislation that would increase state taxes; ineffective internal controls; adverse federal, state or foreign tax assessments or findings in tax audits; lack of or inadequate insurance coverage for claims against TCF; potential for claims and legal action related to TCF's fiduciary responsibilities.
TCF FINANCIAL CORPORATION AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
(Dollars in thousands, except per-share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended March 31, | Change | ||||||||||||||
2016 | 2015 | $ | % | ||||||||||||
Interest income: | |||||||||||||||
Loans and leases | $ | 214,805 | $ | 205,976 | $ | 8,829 | 4.3 | % | |||||||
Securities available for sale | 5,498 | 3,080 | 2,418 | 78.5 | |||||||||||
Securities held to maturity | 1,319 | 1,405 | (86 | ) | (6.1 | ) | |||||||||
Investments and other | 10,720 | 9,333 | 1,387 | 14.9 | |||||||||||
Total interest income | 232,342 | 219,794 | 12,548 | 5.7 | |||||||||||
Interest expense: | |||||||||||||||
Deposits | 14,991 | 11,072 | 3,919 | 35.4 | |||||||||||
Borrowings | 5,693 | 5,302 | 391 | 7.4 | |||||||||||
Total interest expense | 20,684 | 16,374 | 4,310 | 26.3 | |||||||||||
Net interest income | 211,658 | 203,420 | 8,238 | 4.0 | |||||||||||
Provision for credit losses | 18,842 | 12,791 | 6,051 | 47.3 | |||||||||||
Net interest income after provision for credit losses | 192,816 | 190,629 | 2,187 | 1.1 | |||||||||||
Non-interest income: | |||||||||||||||
Fees and service charges | 32,817 | 33,972 | (1,155 | ) | (3.4 | ) | |||||||||
Card revenue | 13,363 | 12,901 | 462 | 3.6 | |||||||||||
ATM revenue | 5,021 | 5,122 | (101 | ) | (2.0 | ) | |||||||||
Subtotal | 51,201 | 51,995 | (794 | ) | (1.5 | ) | |||||||||
Gains on sales of auto loans, net | 11,920 | 6,265 | 5,655 | 90.3 | |||||||||||
Gains on sales of consumer real estate loans, net | 9,384 | 8,763 | 621 | 7.1 | |||||||||||
Servicing fee income | 8,883 | 7,342 | 1,541 | 21.0 | |||||||||||
Subtotal | 30,187 | 22,370 | 7,817 | 34.9 | |||||||||||
Leasing and equipment finance | 28,487 | 22,224 | 6,263 | 28.2 | |||||||||||
Other | 2,843 | 4,127 | (1,284 | ) | (31.1 | ) | |||||||||
Fees and other revenue | 112,718 | 100,716 | 12,002 | 11.9 | |||||||||||
Gains (losses) on securities, net | (116 | ) | (78 | ) | (38 | ) | (48.7 | ) | |||||||
Total non-interest income | 112,602 | 100,638 | 11,964 | 11.9 | |||||||||||
Non-interest expense: | |||||||||||||||
Compensation and employee benefits | 124,473 | 115,815 | 8,658 | 7.5 | |||||||||||
Occupancy and equipment | 37,008 | 36,827 | 181 | 0.5 | |||||||||||
FDIC insurance | 4,113 | 5,393 | (1,280 | ) | (23.7 | ) | |||||||||
Advertising and marketing | 5,887 | 6,523 | (636 | ) | (9.8 | ) | |||||||||
Other | 43,348 | 48,133 | (4,785 | ) | (9.9 | ) | |||||||||
Subtotal | 214,829 | 212,691 | 2,138 | 1.0 | |||||||||||
Operating lease depreciation | 9,573 | 7,734 | 1,839 | 23.8 | |||||||||||
Foreclosed real estate and repossessed assets, net | 3,920 | 6,196 | (2,276 | ) | (36.7 | ) | |||||||||
Other credit costs, net | 12 | 146 | (134 | ) | (91.8 | ) | |||||||||
Total non-interest expense | 228,334 | 226,767 | 1,567 | 0.7 | |||||||||||
Income before income tax expense | 77,084 | 64,500 | 12,584 | 19.5 | |||||||||||
Income tax expense | 26,803 | 22,828 | 3,975 | 17.4 | |||||||||||
Income after income tax expense | 50,281 | 41,672 | 8,609 | 20.7 | |||||||||||
Income attributable to non-controlling interest | 2,235 | 1,871 | 364 | 19.5 | |||||||||||
Net income attributable to TCF Financial Corporation | 48,046 | 39,801 | 8,245 | 20.7 | |||||||||||
Preferred stock dividends | 4,847 | 4,847 | — | — | |||||||||||
Net income available to common stockholders | $ | 43,199 | $ | 34,954 | $ | 8,245 | 23.6 | ||||||||
Net income per common share: | |||||||||||||||
Basic | $ | 0.26 | $ | 0.21 | $ | 0.05 | 23.8 | % | |||||||
Diluted | 0.26 | 0.21 | 0.05 | 23.8 | |||||||||||
Dividends declared per common share | $ | 0.075 | $ | 0.05 | $ | 0.025 | 50.0 | % | |||||||
Average common and common equivalent shares | |||||||||||||||
outstanding (in thousands): | |||||||||||||||
Basic | 166,887 | 164,845 | 2,042 | 1.2 | % | ||||||||||
Diluted | 167,435 | 165,366 | 2,069 | 1.3 |
TCF FINANCIAL CORPORATION AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended March 31, | Change | ||||||||||||||
2016 | 2015 | $ | % | ||||||||||||
Net income attributable to TCF Financial Corporation | $ | 48,046 | $ | 39,801 | $ | 8,245 | 20.7 | % | |||||||
Other comprehensive income (loss): | |||||||||||||||
Securities available for sale: | |||||||||||||||
Unrealized gains (losses) arising during the period | 19,135 | 4,139 | 14,996 | N.M. | |||||||||||
Reclassification of net (gains) losses to net income | 274 | 304 | (30 | ) | (9.9 | ) | |||||||||
Net investment hedges: | |||||||||||||||
Unrealized gains (losses) arising during the period | (3,257 | ) | 3,588 | (6,845 | ) | N.M. | |||||||||
Foreign currency translation adjustment: | |||||||||||||||
Unrealized gains (losses) arising during the period | 3,409 | (3,886 | ) | 7,295 | N.M. | ||||||||||
Recognized postretirement prior service cost: | |||||||||||||||
Reclassification of net (gains) losses to net income | (12 | ) | (12 | ) | — | — | |||||||||
Income tax (expense) benefit | (6,130 | ) | (3,029 | ) | (3,101 | ) | (102.4 | ) | |||||||
Total other comprehensive income (loss) | 13,419 | 1,104 | 12,315 | N.M. | |||||||||||
Comprehensive income | $ | 61,465 | $ | 40,905 | $ | 20,560 | 50.3 | ||||||||
N.M. Not Meaningful. |
TCF FINANCIAL CORPORATION AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | |||||||||||||||
(Dollars in thousands, except per-share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
At Mar. 31, | At Dec. 31, | Change | |||||||||||||
2016 | 2015 | $ | % | ||||||||||||
ASSETS: | |||||||||||||||
Cash and due from banks | $ | 870,153 | $ | 889,337 | $ | (19,184 | ) | (2.2 | )% | ||||||
Investments | 71,586 | 70,537 | 1,049 | 1.5 | |||||||||||
Securities held to maturity | 198,178 | 201,920 | (3,742 | ) | (1.9 | ) | |||||||||
Securities available for sale | 1,135,890 | 888,885 | 247,005 | 27.8 | |||||||||||
Loans and leases held for sale | 211,151 | 157,625 | 53,526 | 34.0 | |||||||||||
Loans and leases: | |||||||||||||||
Consumer real estate: | |||||||||||||||
First mortgage lien | 2,521,492 | 2,624,956 | (103,464 | ) | (3.9 | ) | |||||||||
Junior lien | 2,729,075 | 2,839,316 | (110,241 | ) | (3.9 | ) | |||||||||
Total consumer real estate | 5,250,567 | 5,464,272 | (213,705 | ) | (3.9 | ) | |||||||||
Commercial | 3,114,594 | 3,145,832 | (31,238 | ) | (1.0 | ) | |||||||||
Leasing and equipment finance | 4,005,934 | 4,012,248 | (6,314 | ) | (0.2 | ) | |||||||||
Inventory finance | 2,676,675 | 2,146,754 | 529,921 | 24.7 | |||||||||||
Auto finance | 2,786,731 | 2,647,596 | 139,135 | 5.3 | |||||||||||
Other | 18,940 | 19,297 | (357 | ) | (1.9 | ) | |||||||||
Total loans and leases | 17,853,441 | 17,435,999 | 417,442 | 2.4 | |||||||||||
Allowance for loan and lease losses | (160,074 | ) | (156,054 | ) | (4,020 | ) | (2.6 | ) | |||||||
Net loans and leases | 17,693,367 | 17,279,945 | 413,422 | 2.4 | |||||||||||
Premises and equipment, net | 439,507 | 445,934 | (6,427 | ) | (1.4 | ) | |||||||||
Goodwill | 225,640 | 225,640 | — | — | |||||||||||
Other assets | 475,630 | 529,786 | (54,156 | ) | (10.2 | ) | |||||||||
Total assets | $ | 21,321,102 | $ | 20,689,609 | $ | 631,493 | 3.1 | ||||||||
LIABILITIES AND EQUITY: | |||||||||||||||
Deposits: | |||||||||||||||
Checking | $ | 5,764,392 | $ | 5,690,559 | $ | 73,833 | 1.3 | % | |||||||
Savings | 4,741,850 | 4,717,457 | 24,393 | 0.5 | |||||||||||
Money market | 2,539,124 | 2,408,180 | 130,944 | 5.4 | |||||||||||
Certificates of deposit | 4,267,003 | 3,903,793 | 363,210 | 9.3 | |||||||||||
Total deposits | 17,312,369 | 16,719,989 | 592,380 | 3.5 | |||||||||||
Short-term borrowings | 2,426 | 5,381 | (2,955 | ) | (54.9 | ) | |||||||||
Long-term borrowings | 1,003,168 | 1,034,557 | (31,389 | ) | (3.0 | ) | |||||||||
Total borrowings | 1,005,594 | 1,039,938 | (34,344 | ) | (3.3 | ) | |||||||||
Accrued expenses and other liabilities | 634,298 | 622,765 | 11,533 | 1.9 | |||||||||||
Total liabilities | 18,952,261 | 18,382,692 | 569,569 | 3.1 | |||||||||||
Equity: | |||||||||||||||
Preferred stock, par value $0.01 per share, 30,000,000 shares authorized; 4,006,900 shares issued |
263,240 | 263,240 | — | — | |||||||||||
Common stock, par value $0.01 per share, 280,000,000 shares authorized; 170,647,255 and 169,887,030 shares issued, respectively |
1,707 | 1,699 | 8 | 0.5 | |||||||||||
Additional paid-in capital | 860,307 | 851,836 | 8,471 | 1.0 | |||||||||||
Retained earnings, subject to certain restrictions | 1,271,031 | 1,240,347 | 30,684 | 2.5 | |||||||||||
Accumulated other comprehensive income (loss) | (1,927 | ) | (15,346 | ) | 13,419 | 87.4 | |||||||||
Treasury stock at cost, 42,566 shares, and other | (51,445 | ) | (50,860 | ) | (585 | ) | (1.2 | ) | |||||||
Total TCF Financial Corporation stockholders' equity | 2,342,913 | 2,290,916 | 51,997 | 2.3 | |||||||||||
Non-controlling interest in subsidiaries | 25,928 | 16,001 | 9,927 | 62.0 | |||||||||||
Total equity | 2,368,841 | 2,306,917 | 61,924 | 2.7 | |||||||||||
Total liabilities and equity | $ | 21,321,102 | $ | 20,689,609 | $ | 631,493 | 3.1 |
TCF FINANCIAL CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||
SUMMARY OF CREDIT QUALITY DATA | |||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
Over 60-Day Delinquencies as a Percentage of Portfolio(1) |
|||||||||||||||||||||||
At | At | At | At | At | Change from | ||||||||||||||||||
Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Mar. 31, | |||||||||||||||||
2016 | 2015 | 2015 | 2015 | 2015 | 2015 | 2015 | |||||||||||||||||
Consumer real estate: | |||||||||||||||||||||||
First mortgage lien | 0.38 | % | 0.46 | % | 0.36 | % | 0.38 | % | 0.53 | % | (8 | ) | bps | (15 | ) | bps | |||||||
Junior lien | 0.05 | 0.05 | 0.08 | 0.08 | 0.11 | — | (6 | ) | |||||||||||||||
Total consumer real estate | 0.20 | 0.23 | 0.21 | 0.22 | 0.32 | (3 | ) | (12 | ) | ||||||||||||||
Commercial | — | — | 0.25 | — | — | — | — | ||||||||||||||||
Leasing and equipment finance | 0.12 | 0.06 | 0.19 | 0.06 | 0.09 | 6 | 3 | ||||||||||||||||
Inventory finance | — | 0.01 | 0.01 | — | — | (1 | ) | — | |||||||||||||||
Auto finance | 0.09 | 0.14 | 0.11 | 0.11 | 0.16 | (5 | ) | (7 | ) | ||||||||||||||
Other | 0.16 | 0.13 | 0.17 | 0.11 | 0.02 | 3 | 14 | ||||||||||||||||
Subtotal | 0.10 | 0.11 | 0.17 | 0.10 | 0.14 | (1 | ) | (4 | ) | ||||||||||||||
Acquired portfolios | 0.41 | 0.41 | 0.37 | 0.28 | 0.21 | — | 20 | ||||||||||||||||
Total delinquencies | 0.10 | 0.11 | 0.17 | 0.10 | 0.14 | (1 | ) | (4 | ) | ||||||||||||||
(1) Excludes non-accrual loans and leases. |
Net Charge-Offs as a Percentage of Average Loans and Leases |
|||||||||||||||||||||||
Quarter Ended(1) | Change from | ||||||||||||||||||||||
Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Mar. 31, | |||||||||||||||||
2016 | 2015 | 2015 | 2015 | 2015 | 2015 | 2015 | |||||||||||||||||
Consumer real estate: | |||||||||||||||||||||||
First mortgage lien | 0.55 | % | 0.54 | % | 0.53 | % | 0.79 | % | 0.62 | % | 1 | bps | (7 | ) | bps | ||||||||
Junior lien | 0.17 | 0.17 | 0.11 | 0.59 | 0.38 | — | (21 | ) | |||||||||||||||
Total consumer real estate | 0.35 | 0.34 | 0.32 | 0.69 | 0.51 | 1 | (16 | ) | |||||||||||||||
Commercial | (0.02 | ) | 0.05 | — | 0.21 | (0.07 | ) | (7 | ) | 5 | |||||||||||||
Leasing and equipment finance | 0.13 | 0.16 | 0.09 | 0.16 | 0.10 | (3 | ) | 3 | |||||||||||||||
Inventory finance | 0.04 | 0.05 | 0.03 | 0.11 | 0.08 | (1 | ) | (4 | ) | ||||||||||||||
Auto finance | 0.81 | 0.75 | 0.62 | 0.66 | 0.66 | 6 | 15 | ||||||||||||||||
Other | N.M. | N.M. | N.M. | N.M. | N.M. | N.M. | N.M. | ||||||||||||||||
Total | 0.27 | 0.29 | 0.23 | 0.41 | 0.28 | (2 | ) | (1 | ) | ||||||||||||||
N.M. Not Meaningful. | |||||||||||||||||||||||
(1) Annualized. |
Non-Accrual Loans and Leases Rollforward |
||||||||||||||||||||||||||||
Quarter Ended | Change from | |||||||||||||||||||||||||||
Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Mar. 31, | ||||||||||||||||||||||
2016 | 2015 | 2015 | 2015 | 2015 | 2015 | 2015 | ||||||||||||||||||||||
Balance, beginning of period | $ | 200,466 | $ | 206,110 | $ | 205,710 | $ | 222,143 | $ | 216,734 | $ | (5,644 | ) | $ | (16,268 | ) | ||||||||||||
Additions | 38,029 | 44,387 | 48,505 | 40,846 | 51,647 | (6,358 | ) | (13,618 | ) | |||||||||||||||||||
Charge-offs | (7,436 | ) | (9,002 | ) | (7,055 | ) | (14,050 | ) | (8,921 | ) | 1,566 | 1,485 | ||||||||||||||||
Transfers to other assets | (12,342 | ) | (13,612 | ) | (16,400 | ) | (17,738 | ) | (16,781 | ) | 1,270 | 4,439 | ||||||||||||||||
Return to accrual status | (7,698 | ) | (9,282 | ) | (10,190 | ) | (10,298 | ) | (7,668 | ) | 1,584 | (30 | ) | |||||||||||||||
Payments received | (15,551 | ) | (20,103 | ) | (14,721 | ) | (15,543 | ) | (10,974 | ) | 4,552 | (4,577 | ) | |||||||||||||||
Sales | — | (775 | ) | (705 | ) | (353 | ) | (2,250 | ) | 775 | 2,250 | |||||||||||||||||
Other, net | 3,181 | 2,743 | 966 | 703 | 356 | 438 | 2,825 | |||||||||||||||||||||
Balance, end of period | $ | 198,649 | $ | 200,466 | $ | 206,110 | $ | 205,710 | $ | 222,143 | $ | (1,817 | ) | $ | (23,494 | ) |
TCF FINANCIAL CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||||||
SUMMARY OF CREDIT QUALITY DATA, CONTINUED | ||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
Other Real Estate Owned Rollforward |
||||||||||||||||||||||||||||
Quarter Ended | Change from | |||||||||||||||||||||||||||
Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Mar. 31, | ||||||||||||||||||||||
2016 | 2015 | 2015 | 2015 | 2015 | 2015 | 2015 | ||||||||||||||||||||||
Balance, beginning of period | $ | 49,982 | $ | 58,584 | $ | 58,007 | $ | 62,398 | $ | 65,650 | $ | (8,602 | ) | $ | (15,668 | ) | ||||||||||||
Transferred in | 10,575 | 12,626 | 15,087 | 15,359 | 15,513 | (2,051 | ) | (4,938 | ) | |||||||||||||||||||
Sales |
(18,885 |
) | (19,174 | ) | (13,442 | ) | (17,164 | ) | (15,399 | ) |
289 |
(3,486 |
) | |||||||||||||||
Writedowns | (2,744 | ) | (2,130 | ) | (2,868 | ) | (4,003 | ) | (3,424 | ) | (614 | ) | 680 | |||||||||||||||
Other, net |
3,513 |
76 | 1,800 | 1,417 | 58 |
3,437 |
3,455 |
|||||||||||||||||||||
Balance, end of period | $ | 42,441 | $ | 49,982 | $ | 58,584 | $ | 58,007 | $ | 62,398 | $ | (7,541 | ) | $ | (19,957 | ) |
Allowance for Loan and Lease Losses |
|||||||||||||||||||||||||||||||||||||||||
At | At | At | At | At | |||||||||||||||||||||||||||||||||||||
Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | |||||||||||||||||||||||||||||||||||||
2016 | 2015 | 2015 | 2015 | 2015 | |||||||||||||||||||||||||||||||||||||
% of | % of | % of | % of | % of | |||||||||||||||||||||||||||||||||||||
Balance | Portfolio | Balance | Portfolio | Balance | Portfolio | Balance | Portfolio | Balance | Portfolio | ||||||||||||||||||||||||||||||||
Consumer real estate | $ | 66,728 | 1.27 | % | $ | 67,992 | 1.24 | % | $ | 70,329 | 1.25 | % | $ | 74,687 | 1.35 | % | $ | 80,292 | 1.43 | % | |||||||||||||||||||||
Commercial | 31,547 | 1.01 | 30,185 | 0.96 | 30,006 | 0.96 | 30,205 | 0.97 | 32,121 | 1.00 | |||||||||||||||||||||||||||||||
Leasing and equipment finance | 19,454 | 0.49 | 19,018 | 0.47 | 18,177 | 0.47 | 17,669 | 0.47 | 17,921 | 0.48 | |||||||||||||||||||||||||||||||
Inventory finance | 13,306 | 0.50 | 11,128 | 0.52 | 11,121 | 0.52 | 10,879 | 0.52 | 12,409 | 0.53 | |||||||||||||||||||||||||||||||
Auto finance | 28,535 | 1.02 | 26,486 | 1.00 | 23,722 | 0.98 | 22,061 | 0.96 | 20,426 | 0.95 | |||||||||||||||||||||||||||||||
Other | 504 | 2.66 | 1,245 | 6.45 | 607 | 2.94 | 614 | 2.81 | 630 | 3.08 | |||||||||||||||||||||||||||||||
Total | $ | 160,074 | 0.90 | $ | 156,054 | 0.90 | $ | 153,962 | 0.90 | $ | 156,115 | 0.93 | $ | 163,799 | 0.96 |
Changes in Allowance for Loan and Lease Losses |
||||||||||||||||||||||||||||
Quarter Ended | Change from | |||||||||||||||||||||||||||
Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Mar. 31, | ||||||||||||||||||||||
2016 | 2015 | 2015 | 2015 | 2015 | 2015 | 2015 | ||||||||||||||||||||||
Balance, beginning of period | $ | 156,054 | $ | 153,962 | $ | 156,115 | $ | 163,799 | $ | 164,169 | $ | 2,092 | $ | (8,115 | ) | |||||||||||||
Charge-offs | (16,667 | ) | (18,101 | ) | (15,338 | ) | (22,984 | ) | (18,124 | ) | 1,434 | 1,457 | ||||||||||||||||
Recoveries | 4,761 | 5,523 | 5,397 | 5,506 | 6,587 | (762 | ) | (1,826 | ) | |||||||||||||||||||
Net (charge-offs) recoveries | (11,906 | ) | (12,578 | ) | (9,941 | ) | (17,478 | ) | (11,537 | ) | 672 | (369 | ) | |||||||||||||||
Provision for credit losses | 18,842 | 17,607 | 10,018 | 12,528 | 12,791 | 1,235 | 6,051 | |||||||||||||||||||||
Other | (2,916 | ) | (2,937 | ) | (2,230 | ) | (2,734 | ) | (1,624 | ) | 21 | (1,292 | ) | |||||||||||||||
Balance, end of period | $ | 160,074 | $ | 156,054 | $ | 153,962 | $ | 156,115 | $ | 163,799 | $ | 4,020 | $ | (3,725 | ) |
TCF FINANCIAL CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||||||||
2016 | 2015 | |||||||||||||||||||||
Average | Yields and | Average | Yields and | |||||||||||||||||||
Balance | Interest(1) | Rates(1)(2) | Balance | Interest(1) | Rates(1)(2) | |||||||||||||||||
ASSETS: | ||||||||||||||||||||||
Investments and other | $ | 349,079 | $ | 2,216 | 2.55 | % | $ | 665,606 | $ | 3,497 | 2.13 | % | ||||||||||
Securities held to maturity | 199,303 | 1,319 | 2.65 | 211,646 | 1,405 | 2.66 | ||||||||||||||||
Securities available for sale(3) | ||||||||||||||||||||||
Taxable | 640,796 | 3,818 | 2.38 | 474,697 | 3,080 | 2.60 | ||||||||||||||||
Tax-exempt(4) | 319,427 | 2,584 | 3.24 | — | — | — | ||||||||||||||||
Loans and leases held for sale | 367,686 | 8,504 | 9.30 | 276,149 | 5,836 | 8.57 | ||||||||||||||||
Loans and leases:(5) | ||||||||||||||||||||||
Consumer real estate: | ||||||||||||||||||||||
Fixed-rate | 2,430,773 | 35,202 | 5.82 | 2,912,535 | 43,360 | 6.03 | ||||||||||||||||
Variable-rate | 3,028,001 | 40,056 | 5.32 | 2,778,805 | 35,216 | 5.14 | ||||||||||||||||
Total consumer real estate | 5,458,774 | 75,258 | 5.54 | 5,691,340 | 78,576 | 5.60 | ||||||||||||||||
Commercial: | ||||||||||||||||||||||
Fixed-rate | 1,012,870 | 12,429 | 4.94 | 1,273,806 | 15,730 | 5.01 | ||||||||||||||||
Variable- and adjustable-rate | 2,145,231 | 21,337 | 4.00 | 1,880,202 | 18,249 | 3.94 | ||||||||||||||||
Total commercial | 3,158,101 | 33,766 | 4.30 | 3,154,008 | 33,979 | 4.37 | ||||||||||||||||
Leasing and equipment finance | 3,992,678 | 44,654 | 4.47 | 3,729,481 | 43,485 | 4.66 | ||||||||||||||||
Inventory finance | 2,433,534 | 34,370 | 5.68 | 2,108,871 | 29,692 | 5.71 | ||||||||||||||||
Auto finance | 2,703,880 | 27,837 | 4.14 | 2,021,144 | 20,851 | 4.18 | ||||||||||||||||
Other | 10,018 | 142 | 5.63 | 11,616 | 213 | 7.44 | ||||||||||||||||
Total loans and leases | 17,756,985 | 216,027 | 4.89 | 16,716,460 | 206,796 | 5.00 | ||||||||||||||||
Total interest-earning assets | 19,633,276 | 234,468 | 4.80 | 18,344,558 | 220,614 | 4.86 | ||||||||||||||||
Other assets(6) | 1,297,479 | 1,233,887 | ||||||||||||||||||||
Total assets | $ | 20,930,755 | $ | 19,578,445 | ||||||||||||||||||
LIABILITIES AND EQUITY: | ||||||||||||||||||||||
Non-interest bearing deposits: | ||||||||||||||||||||||
Retail | $ | 1,751,710 | $ | 1,646,769 | ||||||||||||||||||
Small business | 853,645 | 804,323 | ||||||||||||||||||||
Commercial and custodial | 560,983 | 489,248 | ||||||||||||||||||||
Total non-interest bearing deposits | 3,166,338 | 2,940,340 | ||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||
Checking | 2,440,563 | 81 | 0.01 | 2,378,761 | 151 | 0.03 | ||||||||||||||||
Savings | 4,700,164 | 346 | 0.03 | 5,143,295 | 1,101 | 0.09 | ||||||||||||||||
Money market | 2,472,751 | 3,807 | 0.62 | 2,149,340 | 3,567 | 0.67 | ||||||||||||||||
Certificates of deposit | 4,104,951 | 10,757 | 1.05 | 3,041,790 | 6,253 | 0.83 | ||||||||||||||||
Total interest-bearing deposits | 13,718,429 | 14,991 | 0.44 | 12,713,186 | 11,072 | 0.35 | ||||||||||||||||
Total deposits | 16,884,767 | 14,991 | 0.36 | 15,653,526 | 11,072 | 0.29 | ||||||||||||||||
Borrowings: | ||||||||||||||||||||||
Short-term borrowings | 5,562 | 7 | 0.53 | 7,999 | 18 | 0.89 | ||||||||||||||||
Long-term borrowings | 1,062,513 | 5,686 | 2.14 | 1,177,521 | 5,284 | 1.80 | ||||||||||||||||
Total borrowings | 1,068,075 | 5,693 | 2.13 | 1,185,520 | 5,302 | 1.79 | ||||||||||||||||
Total interest-bearing liabilities | 14,786,504 | 20,684 | 0.56 | 13,898,706 | 16,374 | 0.48 | ||||||||||||||||
Total deposits and borrowings | 17,952,842 | 20,684 | 0.46 | 16,839,046 | 16,374 | 0.39 | ||||||||||||||||
Other liabilities | 650,908 | 588,541 | ||||||||||||||||||||
Total liabilities | 18,603,750 | 17,427,587 | ||||||||||||||||||||
Total TCF Financial Corp. stockholders' equity | 2,307,781 | 2,133,781 | ||||||||||||||||||||
Non-controlling interest in subsidiaries | 19,224 | 17,077 | ||||||||||||||||||||
Total equity | 2,327,005 | 2,150,858 | ||||||||||||||||||||
Total liabilities and equity | $ | 20,930,755 | $ | 19,578,445 | ||||||||||||||||||
Net interest income and margin | $ | 213,784 | 4.37 | $ | 204,240 | 4.50 | ||||||||||||||||
(1) Interest and yields are presented on a fully tax-equivalent basis. | ||||||||||||||||||||||
(2) Annualized. | ||||||||||||||||||||||
(3) Average balances and yields of securities available for sale are based upon historical amortized cost and exclude equity securities. |
||||||||||||||||||||||
(4) The yield on tax-exempt securities available for sale is computed on a tax-equivalent basis using a statutory federal income tax rate of 35% for all periods presented. |
||||||||||||||||||||||
(5) Average balances of loans and leases include non-accrual loans and leases and are presented net of unearned income. |
||||||||||||||||||||||
(6) Includes leased equipment and related initial direct costs under operating leases of $133.6 million and $88.8 million for the first quarter of 2016 and 2015, respectively. |
TCF FINANCIAL CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME AND FINANCIAL HIGHLIGHTS | ||||||||||||||||||||
(Dollars in thousands, except per-share data) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | ||||||||||||||||
2016 | 2015 | 2015 | 2015 | 2015 | ||||||||||||||||
Interest income: | ||||||||||||||||||||
Loans and leases | $ | 214,805 | $ | 212,346 | $ | 207,250 | $ | 207,164 | $ | 205,976 | ||||||||||
Securities available for sale | 5,498 | 4,864 | 4,161 | 3,543 | 3,080 | |||||||||||||||
Securities held to maturity | 1,319 | 1,336 | 1,361 | 1,384 | 1,405 | |||||||||||||||
Investments and other | 10,720 | 6,905 | 10,832 | 10,990 | 9,333 | |||||||||||||||
Total interest income | 232,342 | 225,451 | 223,604 | 223,081 | 219,794 | |||||||||||||||
Interest expense: | ||||||||||||||||||||
Deposits | 14,991 | 13,772 | 12,302 | 11,080 | 11,072 | |||||||||||||||
Borrowings | 5,693 | 6,010 | 6,032 | 5,972 | 5,302 | |||||||||||||||
Total interest expense | 20,684 | 19,782 | 18,334 | 17,052 | 16,374 | |||||||||||||||
Net interest income | 211,658 | 205,669 | 205,270 | 206,029 | 203,420 | |||||||||||||||
Provision for credit losses | 18,842 | 17,607 | 10,018 | 12,528 | 12,791 | |||||||||||||||
Net interest income after provision for credit losses | 192,816 | 188,062 | 195,252 | 193,501 | 190,629 | |||||||||||||||
Non-interest income: | ||||||||||||||||||||
Fees and service charges | 32,817 | 37,741 | 36,991 | 36,295 | 33,972 | |||||||||||||||
Card revenue | 13,363 | 13,781 | 13,803 | 13,902 | 12,901 | |||||||||||||||
ATM revenue | 5,021 | 5,143 | 5,739 | 5,540 | 5,122 | |||||||||||||||
Subtotal | 51,201 | 56,665 | 56,533 | 55,737 | 51,995 | |||||||||||||||
Gains on sales of auto loans, net | 11,920 | 3,136 | 10,423 | 10,756 | 6,265 | |||||||||||||||
Gains on sales of consumer real estate loans, net | 9,384 | 13,104 | 7,143 | 11,954 | 8,763 | |||||||||||||||
Servicing fee income | 8,883 | 8,622 | 8,049 | 7,216 | 7,342 | |||||||||||||||
Subtotal | 30,187 | 24,862 | 25,615 | 29,926 | 22,370 | |||||||||||||||
Leasing and equipment finance | 28,487 | 32,355 | 27,165 | 26,385 | 22,224 | |||||||||||||||
Other | 2,843 | 1,806 | 3,070 | 1,460 | 4,127 | |||||||||||||||
Fees and other revenue | 112,718 | 115,688 | 112,383 | 113,508 | 100,716 | |||||||||||||||
Gains (losses) on securities, net | (116 | ) | (29 | ) | (131 | ) | (59 | ) | (78 | ) | ||||||||||
Total non-interest income | 112,602 | 115,659 | 112,252 | 113,449 | 100,638 | |||||||||||||||
Non-interest expense: | ||||||||||||||||||||
Compensation and employee benefits | 124,473 | 109,061 | 116,708 | 116,159 | 115,815 | |||||||||||||||
Occupancy and equipment | 37,008 | 37,824 | 34,159 | 36,152 | 36,827 | |||||||||||||||
FDIC insurance | 4,113 | 5,173 | 4,832 | 4,864 | 5,393 | |||||||||||||||
Advertising and marketing | 5,887 | 5,316 | 5,793 | 5,150 | 6,523 | |||||||||||||||
Other | 43,348 | 46,441 | 45,750 | 45,887 | 48,133 | |||||||||||||||
Subtotal | 214,829 | 203,815 | 207,242 | 208,212 | 212,691 | |||||||||||||||
Operating lease depreciation | 9,573 | 13,608 | 9,485 | 8,582 | 7,734 | |||||||||||||||
Foreclosed real estate and repossessed assets, net | 3,920 | 4,940 | 5,680 | 6,377 | 6,196 | |||||||||||||||
Other credit costs, net | 12 | 224 | (123 | ) | (62 | ) | 146 | |||||||||||||
Total non-interest expense | 228,334 | 222,587 | 222,284 | 223,109 | 226,767 | |||||||||||||||
Income before income tax expense | 77,084 | 81,134 | 85,220 | 83,841 | 64,500 | |||||||||||||||
Income tax expense | 26,803 | 26,614 | 30,528 | 28,902 | 22,828 | |||||||||||||||
Income after income tax expense | 50,281 | 54,520 | 54,692 | 54,939 | 41,672 | |||||||||||||||
Income attributable to non-controlling interest | 2,235 | 2,028 | 2,117 | 2,684 | 1,871 | |||||||||||||||
Net income attributable to TCF Financial Corporation | 48,046 | 52,492 | 52,575 | 52,255 | 39,801 | |||||||||||||||
Preferred stock dividends | 4,847 | 4,847 | 4,847 | 4,847 | 4,847 | |||||||||||||||
Net income available to common stockholders | $ | 43,199 | $ | 47,645 | $ | 47,728 | $ | 47,408 | $ | 34,954 | ||||||||||
Net income per common share: | ||||||||||||||||||||
Basic | $ | 0.26 | $ | 0.29 | $ | 0.29 | $ | 0.29 | $ | 0.21 | ||||||||||
Diluted | 0.26 | 0.29 | 0.29 | 0.29 | 0.21 | |||||||||||||||
Dividends declared per common share | $ | 0.075 | $ | 0.075 | $ | 0.05 | $ | 0.05 | $ | 0.05 | ||||||||||
Financial highlights: | ||||||||||||||||||||
Pre-tax pre-provision profit(1) | $ | 95,926 | $ | 98,741 | $ | 95,238 | $ | 96,369 | $ | 77,291 | ||||||||||
Return on average assets(2) | 0.96 | % | 1.08 | % | 1.10 | % | 1.11 | % | 0.85 | % | ||||||||||
Return on average common equity(2) | 8.45 | 9.53 | 9.76 | 9.93 | 7.47 | |||||||||||||||
Net interest margin(2) | 4.37 | 4.35 | 4.40 | 4.44 | 4.50 | |||||||||||||||
(1) Pre-tax pre-provision profit is calculated as total revenues less non-interest expense. | ||||||||||||||||||||
(2) Annualized. |
TCF FINANCIAL CORPORATION AND SUBSIDIARIES | |||||||||||||||||||
CONSOLIDATED QUARTERLY AVERAGE BALANCE SHEETS | |||||||||||||||||||
(In thousands) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Mar. 31, |
Dec. 31, |
Sep. 30, |
Jun. 30, |
Mar. 31, |
|||||||||||||||
ASSETS: | |||||||||||||||||||
Investments and other | $ | 349,079 | $ | 405,252 | $ | 463,312 | $ | 551,630 | $ | 665,606 | |||||||||
Securities held to maturity | 199,303 | 201,944 | 205,264 | 209,834 | 211,646 | ||||||||||||||
Securities available for sale:(1) | |||||||||||||||||||
Taxable | 640,796 | 611,816 | 601,889 | 566,499 | 474,697 | ||||||||||||||
Tax-exempt | 319,427 | 221,113 | 92,484 | 7,420 | — | ||||||||||||||
Loans and leases held for sale | 367,686 | 180,278 | 348,215 | 340,912 | 276,149 | ||||||||||||||
Loans and leases:(2) | |||||||||||||||||||
Consumer real estate: | |||||||||||||||||||
Fixed-rate | 2,430,773 | 2,520,567 | 2,637,875 | 2,776,177 | 2,912,535 | ||||||||||||||
Variable-rate | 3,028,001 | 3,083,957 | 2,968,507 | 2,811,510 | 2,778,805 | ||||||||||||||
Total consumer real estate | 5,458,774 | 5,604,524 | 5,606,382 | 5,587,687 | 5,691,340 | ||||||||||||||
Commercial: | |||||||||||||||||||
Fixed-rate | 1,012,870 | 1,090,001 | 1,137,744 | 1,193,011 | 1,273,806 | ||||||||||||||
Variable- and adjustable-rate | 2,145,231 | 2,027,982 | 1,980,280 | 1,955,261 | 1,880,202 | ||||||||||||||
Total commercial | 3,158,101 | 3,117,983 | 3,118,024 | 3,148,272 | 3,154,008 | ||||||||||||||
Leasing and equipment finance | 3,992,678 | 3,911,025 | 3,821,590 | 3,751,776 | 3,729,481 | ||||||||||||||
Inventory finance | 2,433,534 | 2,180,534 | 2,036,054 | 2,292,481 | 2,108,871 | ||||||||||||||
Auto finance | 2,703,880 | 2,514,923 | 2,361,057 | 2,211,014 | 2,021,144 | ||||||||||||||
Other | 10,018 | 9,060 | 9,833 | 10,734 | 11,616 | ||||||||||||||
Total loans and leases | 17,756,985 | 17,338,049 | 16,952,940 | 17,001,964 | 16,716,460 | ||||||||||||||
Total interest-earning assets | 19,633,276 | 18,958,452 | 18,664,104 | 18,678,259 | 18,344,558 | ||||||||||||||
Other assets(3) | 1,297,479 | 1,245,751 | 1,217,396 | 1,209,514 | 1,233,887 | ||||||||||||||
Total assets | $ | 20,930,755 | $ | 20,204,203 | $ | 19,881,500 | $ | 19,887,773 | $ | 19,578,445 | |||||||||
LIABILITIES AND EQUITY: | |||||||||||||||||||
Non-interest-bearing deposits: | |||||||||||||||||||
Retail | $ | 1,751,710 | $ | 1,639,550 | $ | 1,649,995 | $ | 1,699,668 | $ | 1,646,769 | |||||||||
Small business | 853,645 | 874,892 | 852,211 | 822,683 | 804,323 | ||||||||||||||
Commercial and custodial | 560,983 | 525,692 | 516,461 | 497,883 | 489,248 | ||||||||||||||
Total non-interest bearing deposits | 3,166,338 | 3,040,134 | 3,018,667 | 3,020,234 | 2,940,340 | ||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||
Checking | 2,440,563 | 2,384,452 | 2,399,119 | 2,422,909 | 2,378,761 | ||||||||||||||
Savings | 4,700,164 | 4,721,571 | 4,860,509 | 5,033,329 | 5,143,295 | ||||||||||||||
Money market | 2,472,751 | 2,349,127 | 2,297,893 | 2,261,567 | 2,149,340 | ||||||||||||||
Certificates of deposit | 4,104,951 | 3,793,653 | 3,400,282 | 3,116,718 | 3,041,790 | ||||||||||||||
Total interest-bearing deposits | 13,718,429 | 13,248,803 | 12,957,803 | 12,834,523 | 12,713,186 | ||||||||||||||
Total deposits | 16,884,767 | 16,288,937 | 15,976,470 | 15,854,757 | 15,653,526 | ||||||||||||||
Borrowings: | |||||||||||||||||||
Short-term borrowings | 5,562 | 28,364 | 30,326 | 8,246 | 7,999 | ||||||||||||||
Long-term borrowings | 1,062,513 | 1,009,591 | 1,057,903 | 1,234,205 | 1,177,521 | ||||||||||||||
Total borrowings | 1,068,075 | 1,037,955 | 1,088,229 | 1,242,451 | 1,185,520 | ||||||||||||||
Total interest-bearing liabilities | 14,786,504 | 14,286,758 | 14,046,032 | 14,076,974 | 13,898,706 | ||||||||||||||
Total deposits and borrowings | 17,952,842 | 17,326,892 | 17,064,699 | 17,097,208 | 16,839,046 | ||||||||||||||
Other liabilities | 650,908 | 595,317 | 578,718 | 594,352 | 588,541 | ||||||||||||||
Total liabilities | 18,603,750 | 17,922,209 | 17,643,417 | 17,691,560 | 17,427,587 | ||||||||||||||
Total TCF Financial Corporation stockholders' equity | 2,307,781 | 2,263,018 | 2,218,614 | 2,173,699 | 2,133,781 | ||||||||||||||
Non-controlling interest in subsidiaries | 19,224 | 18,976 | 19,469 | 22,514 | 17,077 | ||||||||||||||
Total equity | 2,327,005 | 2,281,994 | 2,238,083 | 2,196,213 | 2,150,858 | ||||||||||||||
Total liabilities and equity | $ | 20,930,755 | $ | 20,204,203 | $ | 19,881,500 | $ | 19,887,773 | $ | 19,578,445 | |||||||||
(1) Average balances of securities available for sale are based upon historical amortized cost and exclude equity securities. |
|||||||||||||||||||
(2) Average balances of loans and leases include non-accrual loans and leases and are presented net of unearned income. |
|||||||||||||||||||
(3) Includes leased equipment and related initial direct costs under operating leases of $133.6 million, $123.8 million, $107.5 million, $96.0 million and $88.8 million for the first quarter of 2016 and for the fourth quarter, third quarter, second quarter and first quarter of 2015, respectively. |
TCF FINANCIAL CORPORATION AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED QUARTERLY YIELDS AND RATES(1)(2) | |||||||||||||||
(Unaudited) | |||||||||||||||
Mar. 31, |
Dec. 31, |
Sep. 30, |
Jun. 30, |
Mar. 31, |
|||||||||||
ASSETS: | |||||||||||||||
Investments and other | 2.55 | % | 2.59 | % | 2.52 | % | 2.34 | % | 2.13 | % | |||||
Securities held to maturity | 2.65 | 2.64 | 2.65 | 2.64 | 2.66 | ||||||||||
Securities available for sale:(3) | |||||||||||||||
Taxable | 2.38 | 2.41 | 2.43 | 2.47 | 2.60 | ||||||||||
Tax-exempt(4) | 3.24 | 3.26 | 3.35 | 3.50 | — | ||||||||||
Loans and leases held for sale | 9.30 | 9.38 | 9.00 | 9.15 | 8.57 | ||||||||||
Loans and leases: | |||||||||||||||
Consumer real estate: | |||||||||||||||
Fixed-rate | 5.82 | 5.73 | 5.72 | 5.73 | 6.03 | ||||||||||
Variable-rate | 5.32 | 5.18 | 5.12 | 5.13 | 5.14 | ||||||||||
Total consumer real estate | 5.54 | 5.43 | 5.40 | 5.43 | 5.60 | ||||||||||
Commercial: | |||||||||||||||
Fixed-rate | 4.94 | 5.05 | 5.05 | 5.03 | 5.01 | ||||||||||
Variable- and adjustable-rate | 4.00 | 4.05 | 3.80 | 3.85 | 3.94 | ||||||||||
Total commercial | 4.30 | 4.40 | 4.26 | 4.30 | 4.37 | ||||||||||
Leasing and equipment finance | 4.47 | 4.55 | 4.59 | 4.66 | 4.66 | ||||||||||
Inventory finance | 5.68 | 5.66 | 5.83 | 5.61 | 5.71 | ||||||||||
Auto finance | 4.14 | 4.17 | 4.13 | 4.11 | 4.18 | ||||||||||
Other | 5.63 | 6.88 | 6.31 | 6.92 | 7.44 | ||||||||||
Total loans and leases | 4.89 | 4.89 | 4.88 | 4.90 | 5.00 | ||||||||||
Total interest-earning assets | 4.80 | 4.76 | 4.79 | 4.81 | 4.86 | ||||||||||
LIABILITIES: | |||||||||||||||
Interest-bearing deposits: | |||||||||||||||
Checking | 0.01 | 0.02 | 0.02 | 0.02 | 0.03 | ||||||||||
Savings | 0.03 | 0.04 | 0.05 | 0.06 | 0.09 | ||||||||||
Money market | 0.62 | 0.62 | 0.62 | 0.61 | 0.67 | ||||||||||
Certificates of deposit | 1.05 | 1.00 | 0.93 | 0.86 | 0.83 | ||||||||||
Total interest-bearing deposits | 0.44 | 0.41 | 0.38 | 0.35 | 0.35 | ||||||||||
Total deposits | 0.36 | 0.34 | 0.31 | 0.28 | 0.29 | ||||||||||
Borrowings: | |||||||||||||||
Short-term borrowings | 0.53 | 0.09 | 0.22 | 0.63 | 0.89 | ||||||||||
Long-term borrowings | 2.14 | 2.37 | 2.27 | 1.93 | 1.80 | ||||||||||
Total borrowings | 2.13 | 2.31 | 2.21 | 1.92 | 1.79 | ||||||||||
Total interest-bearing liabilities | 0.56 | 0.55 | 0.52 | 0.49 | 0.48 | ||||||||||
Net interest margin | 4.37 | 4.35 | 4.40 | 4.44 | 4.50 | ||||||||||
(1) Annualized. | |||||||||||||||
(2) Yields are presented on a fully tax-equivalent basis. | |||||||||||||||
(3) Average yields of securities available for sale are based upon historical amortized cost and exclude equity securities. |
|||||||||||||||
(4) The yield on tax-exempt securities available for sale is computed on a tax-equivalent basis using a statutory federal income tax rate of 35% for all periods presented. |
TCF FINANCIAL CORPORATION AND SUBSIDIARIES | ||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(1) | ||||||||
(Dollars in thousands) | ||||||||
(Unaudited) | ||||||||
At Mar. 31, | At Dec. 31, | |||||||
2016 | 2015 | |||||||
Computation of tangible common equity to tangible assets: |
||||||||
Total equity | $ | 2,368,841 | $ | 2,306,917 | ||||
Less: Non-controlling interest in subsidiaries | 25,928 | 16,001 | ||||||
Total TCF Financial Corporation stockholders' equity | 2,342,913 | 2,290,916 | ||||||
Less: | ||||||||
Preferred stock | 263,240 | 263,240 | ||||||
Goodwill | 225,640 | 225,640 | ||||||
Other intangibles | 2,760 | 3,126 | ||||||
Tangible common equity | $ | 1,851,273 | $ | 1,798,910 | ||||
Total assets | $ | 21,321,102 | $ | 20,689,609 | ||||
Less: | ||||||||
Goodwill | 225,640 | 225,640 | ||||||
Other intangibles | 2,760 | 3,126 | ||||||
Tangible assets | $ | 21,092,702 | $ | 20,460,843 | ||||
Tangible common equity to tangible assets | 8.78 | % | 8.79 | % | ||||
At Mar. 31, | At Dec. 31, | |||||||
2016 | 2015 | |||||||
Computation of tangible book value per common share: |
||||||||
Tangible common equity | $ | 1,851,273 | $ | 1,798,910 | ||||
Common stock shares outstanding | 170,604,689 | 169,844,464 | ||||||
Tangible book value per common share | $ | 10.85 | $ | 10.59 |
Three Months Ended | ||||||||||||
Mar. 31, | Dec. 31, | Mar. 31, | ||||||||||
2016 | 2015 | 2015 | ||||||||||
Computation of return on average tangible common equity: |
||||||||||||
Net income available to common stockholders | $ | 43,199 | $ | 47,645 | $ | 34,954 | ||||||
Other intangibles amortization, net of tax | 235 | 251 | 245 | |||||||||
Adjusted net income available to common stockholders | $ | 43,434 | $ | 47,896 | $ | 35,199 | ||||||
Average balances: | ||||||||||||
Total equity | $ | 2,327,005 | $ | 2,281,994 | $ | 2,150,858 | ||||||
Less: Non-controlling interest in subsidiaries | 19,224 | 18,976 | 17,077 | |||||||||
Total TCF Financial Corporation stockholders' equity | 2,307,781 | 2,263,018 | 2,133,781 | |||||||||
Less: | ||||||||||||
Preferred stock | 263,240 | 263,240 | 263,240 | |||||||||
Goodwill | 225,640 | 225,640 | 225,640 | |||||||||
Other intangibles | 2,966 | 3,342 | 4,474 | |||||||||
Average tangible common equity | $ | 1,815,935 | $ | 1,770,796 | $ | 1,640,427 | ||||||
Return on average tangible common equity(2) | 9.57 | % | 10.82 | % | 8.58 | % |
(1) When evaluating capital adequacy and utilization, management considers financial measures such as tangible common equity to tangible assets, tangible book value per common share and return on average tangible common equity. These measures are non-GAAP financial measures and are viewed by management as useful indicators of capital levels available to withstand unexpected market or economic conditions and also provide investors, regulators and other users with information to be viewed in relation to other banking institutions. |
(2) Annualized. |