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| 8-K - 8-K - TCF FINANCIAL CORP | tcffinancial123116form8-ki.htm |
2016 Fourth Quarter Investor Presentation
Exhibit 99.1
Cautionary Statements for Purposes of the Safe
Harbor Provisions of the Securities Litigation
Reform Act
Any statements contained in this presentation 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
(continued)
2
Cautionary Statements for Purposes of the Safe
Harbor Provisions of the Securities Litigation
Reform Act (cont)
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 programs, including under the Bank Secrecy
Act in past or future periods, which may result in regulatory enforcement action including monetary penalties; increased health care costs 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 either of the primary supermarket chains in
which TCF maintains supermarket branches; costs related to closing underperforming branches; inability to timely close underperforming branches due to
long-term lease obligations; slower than anticipated growth in existing or acquired businesses; inability to successfully execute on TCF's growth strategy
through acquisitions or expanding existing business relationships; failure to expand or diversify TCF's balance sheet through new or expanded programs
or opportunities; failure to 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.
3
Who We Are – A Unique Regional Bank
4
LENDING
• Well-diversified portfolio by asset class,
geography, industry, loan and lease size
and collateral type
• Expertise in diverse lending businesses
• Proven loan and lease origination
platform allows for optimization of growth
and revenue
FUNDING
• Loan and lease growth funded primarily
by low cost, core deposit base
• High concentration of retail deposits that
provide a competitive pricing advantage
in a rising rate environment
• Convenience banking model based on
branch locations, hours of operation,
ATMs and digital channels
PROFITABILITY
• Strong net interest margin due to high loan and lease yields and low cost funding
• Diverse lending businesses with attractive spreads
• Strong credit quality performance due to execution of our diversification philosophy and a
disciplined approach to pricing and underwriting
Diversification – Focus on national versus footprint lending
increases quality and diversification of portfolio
Profitable Growth – Strong origination and loan sale capabilities
drive loan growth and revenue diversification with a continued high
net interest margin
Operating Leverage – Focus on improving operating leverage
following recent build-out of key functions
Core Funding – Maintain sufficient funding sources to support loan
and lease growth
Strategic Pillars
5
1
2
3
4
Execution under a strong enterprise risk management
and credit culture
Consumer real
estate & other
(first mortgage
lien) 12%
Consumer real estate
(junior lien) 14%
Auto finance
13%
Leasing & equipment finance 22%
Commercial
17%
Inventory finance
12%
Securities & other
10%
Corporate Profile
Savings
27%
Money market
14%
Checking
35%
Certificates of
deposit 24%
• $21.4 billion national bank holding
company headquartered in Minnesota
• 47th largest publicly-traded U.S.
based bank holding company by
asset size1
• 339 bank branches in seven states
• Approximately 147,000 small business
banking relationships:
• 67,500 checking accounts
• 79,500 lending relationships
• Average loan and lease portfolio makes
up 83% of average total assets
• Common equity ratio of 10.09%
• Book value per common share of $12.66
• Return on average common equity of
9.13%2
6
($ millions)
1 Source: SNL Financial (September 30, 2016)
2 YTD
($ millions)
At December 31, 2016
4Q16 Yield
of 4.70%2
4Q16 Rate
of 0.35%2
$4,720
$6,009
$2,422
$4,092
$2,312
$3,286
$4,336
$2,648
$2,792
$2,470
$1,948
A WELL-DIVERSIFIED EARNING ASSET PORTFOLIO…
…FUNDED BY A LOW COST DEPOSIT BASE
Well Positioned vs. Peers
7
1 Annualized
2 All U.S. publicly-traded banks and thrifts, excluding TCF, with total assets between $10 and $50 billion (source: SNL Financial)
3 Excluding non-recurring items for revenue
4 Presented on a fully tax-equivalent basis
5 Peer Group yield includes loans and leases held for sale, while TCF yield excludes loans and leases held for sale
6 Estimated based on consolidated bank level deposit data
5
TCF
4Q161
Peer Group
3Q16
Average1,2,3 TCF BUSINESS MODEL ATTRIBUTES
Revenue as a % of
average assets 6.19% 4.38%
•
•
Exceptional revenue generation capabilities through diverse revenue
streams
Emphasis on generating profitable growth
Yield on loans and
leases4,5 4.82% 4.33%
• Combination of diversification and disciplined pricing has created
consistent yield performance despite low rate environment
Average loans and
leases as a % of
average assets
82.9% 67.2%
•
•
Unique mix of loan and lease businesses provide ample and flexible
origination capabilities
Organic loan and lease growth opportunities can be achieved while
maintaining discipline on price, structure and credit quality
Insured deposits as
a % of total
deposits6
93% 62%
•
•
Retail deposits provide a competitive pricing advantage in a rising
rate environment
Preferred deposit composition primarily made up of retail deposits
which have the highest liquidity value
Net charge-offs (%) 0.27% 0.23%
• Net charge-offs in line with peers
• Wholesale portfolio with strong credit quality, 6 bps of net charge-offs
in 4Q16, having a stronger influence on consolidated credit quality
Revenue up 1.8% YoY
Investments and other 1%
Consumer real estate & other
(first mortgage lien) 13%
Consumer
real estate
(junior lien)
17%
Auto
finance
12%Leasing &
equipment
finance 20%
Commercial
14%
Inventory
finance 15%
Loans and leases held for sale 4%
Securities 4%
350
300
250
200
150
100
50
0
5.25%
5.00%
4.75%
4.50%
4.25%
4.00%
4Q15 1Q16 2Q16 3Q16 4Q16
$116
$321
$113
$324
$118
$331
$120
$332
$116
$327
4.35% 4.37% 4.35% 4.34% 4.30%
Net Interest Margin1
1 Annualized
4Q16 vs. 4Q15 revenue and net interest
margin impacted by the following 4Q16 items:
• Higher average balances of loans and leases held for
sale, leasing and equipment finance loans and leases,
inventory finance loans and securities available for sale
• Lower average yield on the overall loan and lease
portfolio
• Increased gains on sales of consumer real estate loans
and servicing fee income
• Decreased fees and service charges and gains on
sales of auto loans
Fourth Quarter 2016
Highlights – Revenue
8
REVENUE DIVERSIFICATION
$232 million
Non-interest Income
Interest Income
($ millions)
$205 $211 $213 $212 $211
Non-interest Income
Net Interest Income
$116 million
Other 1%
Fees and
service
charges 30%
ATM
revenue
4%
Card
revenue
12%
Leasing &
equipment
finance 27%
Gains on sales of
consumer real estate
loans, net 15%
Gains on sales of
auto loans, net 1%
Servicing fee income 10%
Strategic Pillars
Diversification 1
Profitable Growth 2
• Leveraging of expense base
through continued growth of total
average assets and average
serviced for others portfolio
• Focus on lowering efficiency ratio
by growing revenue faster than
expenses
9
Expense as % of Total Avg
Assets & Avg Serviced for
Others Portfolio:2 3.65% 3.61% 3.51%
1 Includes Occupancy & Equipment, Other Non-interest Expense, Foreclosed Real Estate & Repossessed Assets, and Other Credit Costs
2 Annualized
Total Avg Assets & Avg
Serviced for Others
Portfolio: $24,371 $25,317 $25,892 $26,085
3.51%
$26,608
3.39%
Non-interest Expense
250
200
150
100
50
0
4Q15 1Q16 2Q16 3Q16 4Q16
$109 $124 $118 $117 $115
$100
$94 $99 $102 $99
$14
$223
$10
$228
$10
$227
$10
$229
$11
$225
Compensation & Employee Benefits
Foreclosed Real Estate and Other Credit Cost
Compensation & Employee Benefits
350
300
250
200
150
100
50
0
$
(M
ill
io
ns
)
6/14 9/14 12/14 3/15 6/15
($ millions)
Operating Lease Depreciation
Other 1
Compensation & Employee Benefits
Efficiency Ratio: 69.27% 70.42% 68.69% 69.00% 68.89%
Strategic Pillars
Profitable Growth 2
Operating Leverage 3
Non-interest expense
up 1.2% YoY
Achieving Higher Credit Quality
Loan Growth via National Lending
10
FOOTPRINT
LENDING
Loan growth
requires
originations up
and down the
entire credit box
with potential
concessions on
pricing and terms
NATIONAL LENDING
Ability to profitably grow loans through originations at
the top of the credit box across all geographies
Higher
Credit
Quality
Lower
Credit
Quality
Geographic Exposure
Origination
Opportunities
IL, MN, MI, CO,
WI, AZ, SD Other States and Canada
Strategic Pillars
Diversification 1
Profitable Growth 2
PROVISION FOR CREDIT LOSSES
250
200
150
100
50
0
2012 2013 2014 2015 2016
$247
$118
$96
$53 $66
1 Excludes portfolios acquired with deteriorated credit quality and non-accrual loans and leases
($ millions)
Credit Quality Trends
11
0.70%
0.60%
0.50%
0.40%
0.30%
0.20%
0.10%
0.00%
12/12 12/13 12/14 12/15 12/16
0.64%
0.20%
0.14% 0.11% 0.12%
500
400
300
200
100
0
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
12/12 12/13 12/14 12/15 12/16
$476
$346
$282 $250 $2283.07% 2.17% 1.71% 1.43% 1.28%
($ millions)
60+ DAY DELINQUENCIES1
NET CHARGE-OFFSNON-PERFORMING ASSETS
Other Real Estate Owned
Non-accrual Loans & Leases
NPAs/Loans & Leases and Other Real Estate Owned
Strategic Pillar
Diversification 1
250
200
150
100
50
0
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
2012 2013 2014 2015 2016
$234
$126
$79
$52 $45
1.54%
0.81% 0.49% 0.30% 0.26%
($ millions)
Net charge-offs
Net charge-offs ratio
1 Annualized
2 Includes Other
Net Charge-off Ratio
12
Quarter Ended1
Change from
Quarter Ended
Dec. 31, 2015 Mar. 31, 2016 Jun. 30, 2016 Sep. 30, 2016 Dec. 31, 2016 Dec. 31, 2015
Consumer:
Consumer Real Estate:
First Mortgage Lien 0.54% 0.55% 0.35% 0.34% 0.26% (28) bps
Junior Lien 0.17 0.17 0.05 0.04 0.08 (9)
Total Consumer Real Estate 0.34 0.35 0.19 0.17 0.17 (17)
Auto Finance 0.75 0.81 0.69 0.86 1.09 34
Consumer 2 0.51 0.52 0.39 0.47 0.53 2
Wholesale:
Commercial 0.05 (0.02) 0.08 (0.01) 0.01 (4)
Leasing & Equipment Finance 0.16 0.13 0.11 0.18 0.10 (6)
Inventory Finance 0.05 0.04 0.09 0.10 0.07 2
Wholesale 0.10 0.06 0.10 0.10 0.06 (4)
Total 2 0.29 0.27 0.23 0.26 0.27 (2)
Strategic Pillar
Diversification 1
• Net charge-off decline of two basis points year-over-year impacted by loan and lease
diversification philosophy
• Wholesale net charge-off rate of 0.06% in 4Q16
• Total levels of net charge-offs performing in low end of the expected range
12/12 12/13 12/14 12/15 12/16
$15,426 $15,846
$16,401
$17,436 $17,844
11%
19%
23%
12%
16%
19%
13
10%
20%
22%
8%
16%
24%
13%
18%
23%
15%
16%
15%
• 2016 loan and lease growth of
5.0%, excluding the Consumer
Real Estate First Mortgage
Lien portfolio
• Year-over-year loan and lease
growth in Inventory Finance of
15.1%, Leasing & Equipment
Finance of 8.1% and
Commercial of 4.5%
• Strong loan and lease
diversification by asset class,
geography, rate, average loan
and lease size, estimated
weighted average life and
collateral type
56%
Wholesale
44%
Consumer
Loan and Lease Portfolio
13
($ millions)
10%
22%
21%
4%
16%
27%
Inventory Finance
Leasing & Equipment Finance
Commercial
Auto Finance
Consumer Real Estate - Junior Lien
Consumer Real Estate & Other - First Mortgage Lien
$15,847 14%
18%
24%
15%
16%
13%
Strategic Pillar
Diversification 1
Loan and lease growth of
2.3% YoY
$17,43
$16,402
• Proven loan and lease
origination platform allows
for optimization of growth
and revenue
• Organic loan and lease
portfolio growth can be
achieved while maintaining
discipline on price, structure
and credit quality
• Growth in multiple asset
classes provides flexibility to
adjust asset composition to
react to changing
environment
Diverse Loan and Lease
Origination Capabilities
14
Strategic Pillars
Diversification 1
Profitable Growth 2
($ millions)
Inventory Finance1
Leasing & Equipment Finance2
Commercial
Auto Finance
Consumer Real Estate
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2012 2013 2014 2015 2016
$1,196 $1,676 $1,770 $2,437
$2,588$1,205
$1,947 $2,796
$3,155 $3,560
$1,696
$1,730
$1,874
$1,969
$2,137
$1,494
$1,558
$1,596
$1,875
$1,883
$5,161
$10,752
$5,114
$12,025
$5,454
$13,490
$5,816
$15,252
$6,660
$16,828
1 Origination levels are impacted by the velocity of fundings and repayments with dealers
2 Includes operating leases
Loan and lease originations
up 10.3% YoY
Other
Auto
Consumer Real Estate & Other Consumer
4,000
3,000
2,000
1,000
0
2012 2013 2014 2015 2016
$162
$763
$1,419 $1,264 $1,624$537
$795
$1,333 $1,348
$2,109
$804
$1,705
$2,821 $2,676
$3,790
($ millions)
• Provides flexibility to the
organization:
• Diversifies areas of product
and geographic
concentration
• Supports capital and
liquidity
• Provides additional revenue
source
Loan and Lease Sales
and Revenue
15
150
125
100
75
50
25
0
2012 2013 2014 2015 2016
$8 $13 $21
$31 $40$5
$22
$35
$41
$50
$22
$35
$30
$65 $44
$100
$31
$103 $35
$125
$1,706
LOAN AND LEASE SALES
IMPACT ON REVENUE
Servicing Fee Income
Gains on Sales of Auto Loans, Net
Gains on Sales of Consumer Real Estate Loans, Net
Strategic Pillars
Diversification 1
Profitable Growth 2
($ millions)
$803
1 Includes 4Q14 TDR portfolio loan sale of $405.9 million (servicing released)
1
40
32
24
16
8
0
2012 2013 2014 2015 2016
$8
$13
$21
$31
$40
24,000
20,000
16,000
12,000
8,000
4,000
0
2012 2013 2014 2015 2016
$15,259 $15,847 $16,627
$17,394 $18,205
$801
$16,060 $1,525
$17,372 $2,709
$19,336
$3,831
$21,225
$4,913
$23,118
Servicing Fee Income
Serviced for Others Portfolio
Portfolio Loans and Leases & Loans and Leases Held for Sale • Serviced for others portfolio
primarily includes auto
loans and consumer real
estate loans sold with
servicing rights retained
• Loan sale and servicing
strategy contributes to
revenue through gains on
sales of loans and ongoing
servicing fees:
• $125 million of revenue
through gains on sales of
loans and servicing fee
income in 2016
• Year-over-year servicing
fee income growth of 29%
1 Includes operating leases
Managed Portfolio
1
Average
Balances
($ millions)
16
Strategic Pillars
Profitable Growth 2
Operating Leverage 3
($ millions)
COMBINATION OF DIVERSIFICATION AND DISCIPLINED
PRICING HAS CREATED CONSISTENT YIELD
PERFORMANCE DESPITE LOW RATE ENVIRONMENT
17
1 Annualized and presented on a fully tax-equivalent basis
2 All U.S. publicly-traded banks and thrifts, excluding TCF, with total assets between $10 and $50 billion as of September 30, 2016 that have
reported loan and lease yields for the past four quarters, includes loans held for sale (source: SNL Financial)
N.A. Not available
4Q15 1Q16 2Q16 3Q16 4Q16
Consumer Real Estate:
First Mortgage Lien 5.31% 5.40% 5.34% 5.35% 5.22%
Junior Lien 5.54 5.67 5.64 5.60 5.64
Commercial 4.40 4.30 4.30 4.22 4.25
Leasing & Equipment Finance 4.55 4.47 4.45 4.48 4.43
Inventory Finance 5.66 5.68 5.74 6.07 5.80
Auto Finance 4.17 4.14 4.19 4.06 4.04
Total Loans and Leases 4.89 4.89 4.88 4.88 4.82
Peer Group2 Average 4.37 4.36 4.34 4.33 N.A.
Loan and Lease Yields1
Strategic Pillars
Diversification 1
Profitable Growth 2
6,000
4,000
2,000
0
12/12 12/13 12/14 12/15 12/16
$563 $1,319
$2,044 $2,794
$2,902
$720
$1,283 $1,104
$2,423 $1,785
$3,829 $2,187
$4,981
$3,079
$5,981
Auto Finance At December 31, 2016
18
• Originate and service used and new retail auto loans
acquired through franchised and independent dealers
across the country
• Experienced management team
• More than 11,400 active dealer relationships
• Sold $2.1 billion of auto loans in 2016 resulting in a gain
of $36.6 million
• Loan servicing fees of $33.1 million in 2016
Auto Finance
$2.6 billion
(15% of total loans
and leases)
• 4.04% quarterly average yield1
• Over 60-days delinquency rate of 0.23%2
• Net charge-off (%): 2014 2015 2016
0.66% 0.68% 0.86%
• Average held for investment portfolio FICO score of 733 at
origination
1 Annualized and presented on a fully tax-equivalent basis
2 Excludes portfolios acquired with deteriorated credit quality and non-accrual loans
($ millions)
Used Auto
77%
New Auto
23%
YTD Originations $1,205 $1,947 $2,796 $3,156 $3,560
# of employees 400 623 797 966 993
Serviced for Others Portfolio
Portfolio Loans and HFS
First
Mortgage
Liens 45%
Junior
Liens
55%
8,000
6,000
4,000
2,000
0
12/12 12/13 12/14 12/15 12/16
$4,240 $3,766 $3,143 $2,636 $2,299
$2,435 $2,573
$2,543 $2,839 $2,798
$6,700
$625
$6,964
$1,401
$7,087
$1,816
$7,291
$2,316
$7,413
19
1 Includes $25 million serviced for others portfolio
2 Annualized and presented on a fully tax-equivalent basis
3 Excludes portfolios acquired with deteriorated credit quality and non-accrual loans
4 YTD
• 42% fixed-rate, 58% variable/adjustable-rate
• Average FICO score of the consumer real estate
portfolio:
• At origination – 735; updated 4Q16 – 733
• Sold $1.6 billion of consumer real estate loans in 2016
resulting in a gain of $52.3 million
• Loan servicing fees of $5.4 million in 2016
• $525.4 million in junior lien HELOCs with interest-only
revolving draws and no defined amortization period,
18.1% mature prior to 2021
Consumer
Real Estate
$5.1 billion
(Junior liens and
First mortgage
liens are 16% and
13% of total loans
and leases,
respectively)
($ millions)
Consumer Real Estate At December 31, 2016
Total Portfolio
Loans and HFS $6,675 $6,339 $5,686 $5,475 $5,097
YTD Originations $1,196 $1,676 $1,770 $2,437 $2,588
First Mortgage Liens (Portfolio Loans and HFS)
Junior Liens (Portfolio Loans and HFS)
Serviced for Others Portfolio
• Quarterly average yields:2 5.57% fixed-rate, 5.36%
variable/adjustable-rate
• Variable/adjustable-rate yields up 18 bps from
4Q15
• Over 60-days delinquency rate of 0.21%3
• Net charge-off (%): 2014 2015 2016
First mortgage liens 1.18% 0.62% 0.38%
Junior liens 0.55% 0.30% 0.08%
• 62% of loan balances originated
since January 1, 2009 with 4Q16
net charge-offs of 0.01%4
1
Multi-Family
27%
Health
Care
Facilities
11%Office
Buildings
10%
Industrial
Buildings
11%
Business
20%
Other
21%
3,500
3,000
2,500
2,000
12/12 12/13 12/14 12/15 12/16
$3,412
$3,165 $3,205 $3,225
$3,398
20
($ millions)
• 31% fixed-rate, 69% variable/adjustable-rate
• CRE location mix: 77.8% located in TCF banking
markets, 22.2% outside (following strong, proven
sponsors)
• Addition of new commercial bankers in select
markets resulting in growth opportunities as
market conditions become more favorable
• 4.25% quarterly average yield1
• Over 60-days delinquency rate of 0.00%2
• Net charge-off (%): 2014 2015 2016
0.18% 0.05% 0.01%
• Loans with classified risk ratings decreased from
10.4% at 4Q12 to 1.0% at 4Q16
Commercial
$3.3 billion
(18% of total
loans and
leases)
1 Annualized and presented on a fully tax-equivalent basis
2 Excludes portfolios acquired with deteriorated credit quality and non-accrual loans
Commercial At December 31, 2016
YTD Originations $1,494 $1,558 $1,596 $1,875 $1,883
Portfolio Loans
Serviced for Others
$3,204
Leasing &
Equipment Finance
$4.3 billion
(24% of total loans
and leases)
Leasing & Equipment Finance At December 31, 2016
5,000
4,000
3,000
2,000
1,000
0
12/12 12/13 12/14 12/15 12/16
$3,484 $3,678
$3,994
$4,290
$4,636
Specialty
Vehicles
29%
Manufacturing
7%
Medical
8%
Construction
11%
Golf Cart & Turf
10%
Technology &
Data Processing
7%
Furniture &
Fixtures 9%
Other
19%
Portfolio Loans and Leases
($ millions)
1 Includes operating leases
2 Source: The Monitor, 2016 Monitor Bank 50
3 Source: The Monitor, 2016 Monitor 100
• 15th largest bank-affiliated leasing company2 and
30th largest equipment finance/leasing company3
in the U.S.
• Experienced management team
• Uninstalled backlog of $453.6 million, up from
$446.3 million at December 31, 2015
• Focus on financing business-essential equipment
• 4.43% quarterly average yield4
• Over 60-days delinquency rate of 0.10%5
• Net charge-off (%): 2014 2015 2016
0.10% 0.13% 0.13%
• 2016 fee revenue of $120.0 million, 25.7% of TCF
total fees and other revenue
4 Annualized and presented on a fully tax-equivalent basis
5 Excludes portfolios acquired with deteriorated credit quality and non-accrual loans and leases21
1
Serviced for Others
$3,679
YTD
Originations1 $1,696 $1,730 $1,874 $1,969 $2,137
22
($ millions)
1 Annualized and presented on a fully tax-equivalent basis
2 Excludes portfolios acquired with deteriorated credit quality and non-accrual loans
3,000
2,500
2,000
1,500
1,000
500
0
12/12 12/13 12/14 12/15 12/16
$1,617 $1,713
$1,922
$2,181
$2,513
Powersports
46%
Lawn &
Garden
23%
Other
31%
• Quarterly average yield of 5.80%1, up 14 bps from
4Q15
• Over 60-day delinquency rate of 0.00%2
• Net charge-off (%): 2014 2015 2016
0.04% 0.07% 0.07%
• Credit risk spread across more than 10,800 active
dealers
• Unique high yielding, high return business with a
high barrier to entry and strong credit
performance
• Experienced management team
• Operates in the U.S. and Canada
• 100% variable-rate receivables
• High loan yields driven by the high operating
costs of the business, not increased credit risk
Inventory
Finance
$2.5 billion
(14% of total
loans and
leases)
YTD Originations $5,161 $5,114 $5,454 $5,816 $6,660
Serviced for Others
Portfolio Loans
Inventory Finance At December 31, 2016
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
4Q15 1Q16 2Q16 3Q16 4Q16
$16,289
$16,885 $17,284 $17,148 $17,069
23
• Average deposit balances increased
4.8% year-over-year
• Average checking balances
increased 6.4% year-over-year
• 2016 average deposit growth
continued to exceed average loan
and lease growth
• Average interest rate on deposits
improved quarter-over-quarter
• 86% of period-end certificates of
deposit balances are less than
$250,000
0.34% 0.36% 0.37% 0.37% 0.35%
Average
interest cost:
Deposit Generation
Average Balances
($ millions)
Certificates of Deposit
Money Market
Savings
Checking
Strategic Pillars
Profitable Growth 2
Core Funding 4
23%
15%
29%
33%
24%
15%
28%
33%
25%
15%
27%
33%
25%
15%
27%
33%
25%
14%
27%
34%
24
2015 2016
Common equity Tier 1 capital ratio1 10.00% 10.24%
Tier 1 risk-based capital ratio1 11.54% 11.68%
Total risk-based capital ratio1 13.71% 13.69%
Tier 1 leverage ratio1 10.46% 10.73%
Common equity ratio 9.80% 10.09%
Tangible common equity ratio2 8.79% 9.13%
Book value per common share $ 11.94 $ 12.66
Tangible book value per common
share2 $ 10.59 $ 11.33
Return on average common equity 9.19% 9.13%
Return on average tangible common
equity3 10.48% 10.29%
• Maintained strong capital
ratios with earnings
accumulation
• Common stock dividend
of 7.5 cents per share
declared on January 25,
2017
• Potential capital allocation
strategies include:
• Dividend increase
• Stock buyback
• Organic growth
• Corporate development
opportunities
Capital and Return
1 The regulatory capital ratios for 4Q16 are preliminary pending completion and filing of the Company’s regulatory reports
2 See “Reconciliation of GAAP to Non-GAAP Financial Measures – Tangible Common Equity Ratio and Tangible Book Value Per Common Share” slide
3 See “Reconciliation of GAAP to Non-GAAP Financial Measures – Return on Average Tangible Common Equity” slide
43%
19%
38%
39%
42%
19%
Well Prepared for Rising
Interest Rates
25
QTD AVERAGE EARNING ASSETS
QTD AVERAGE DEPOSITS
• Growth of short-term and variable rate
loans positions TCF to benefit in a rising
rate environment
• 81% of assets are variable/adjustable rate
or short/medium duration fixed rate
• 59% of loan and lease balances are
expected to reprice, amortize or prepay in
the next 12 months
• 62% of deposits are low or no interest
cost with an average cost of one basis
point for 4Q16, which provides a
competitive pricing advantage in a rising
rate environment
Variable & Adjustable Rate
(Inventory Finance,
Commercial, Consumer
Real Estate, Investments)
Fixed Rate - Long Duration
(Securities, Consumer Real
Estate)
Fixed Rate - Short/Medium
Duration (Commercial,
Leasing, Auto Finance)
Low Interest Cost
No Interest Cost
Other
At December 31, 2016
Strategic Pillars
Diversification 1
Profitable Growth 2
$19.9 billion
$17.1 billion
STRATEGIC PILLARS 2016 PROGRESS
DIVERSIFICATION
•
•
Execution of diversification philosophy resulted in
strong credit quality performance
Origination growth in multiple asset classes provides
flexibility to adjust asset composition based on
market conditions
PROFITABLE GROWTH
•
•
Proven loan and lease origination platform allowed
for optimization of balance sheet and revenue
growth
Strong net interest income despite competitive low
interest rate environment
OPERATING LEVERAGE
• Year-over-year revenue growth of 4.1% outpaced
expense growth of 1.7%
• Identified and began implementing operating
efficiencies (e.g. branch rationalization)
CORE FUNDING
• Retail deposits provide a competitive pricing
advantage in a rising rate environment
• 2016 average deposit growth continued to exceed
average loan and lease growth
1
2
3
4
Execution under a strong enterprise risk management and credit culture
Strategic Pillar Recap
26
• Optimize diverse loan and lease origination platform to grow asset
classes that will drive profitability
• Leverage technology to create new product and service solutions that
meet the financial needs of our customers and drive operating
efficiencies
• Continued emphasis on talent management
• Benefit from a more favorable operating environment
2017 Outlook
27
Focus on continuing to create superior and
sustainable financial performance
Appendix
Loan and Lease Diversification
Business Unit Consumer Commercial
Leasing & Equipment
Finance Inventory Finance Auto Finance
Type /
Segment
Consumer real
estate
Multi-family housing
Business
Health care facilities
Industrial buildings
Office buildings
Specialty vehicles
Construction
Golf cart & Turf
Furniture & Fixtures
Medical
Technology & Data
processing
Manufacturing
Powersports
Lawn & Garden
Primarily used
autos
Geography Local1
National
Local1 National National
Canada
National
Rate Variable/
adjustable-rate
Fixed-rate
Variable/adjustable-
rate
Fixed-rate
Fixed-rate Variable-rate Fixed-rate
Average Loan &
Lease Size
First Mortgage
Liens:
$2.8 million $77,000 $227,000 $15,000$100,000
Junior Liens:
$47,000
Estimated
Weighted
Average Life2
53 months 23 months 20 months 5 months 19 months
Collateral Real estate Real estate
Other non-real estate
assets
Equipment Inventory Vehicle
29
TCF MAINTAINS A WELL-DIVERSIFIED LOAN AND LEASE PORTFOLIO
1 TCF’s branch footprint (IL, MN, MI, CO, WI, AZ, SD)
2 As of December 31, 2016; estimated weighted average life represents how many months it is expected to take to collect half of the outstanding principal
Loan and Lease
Geographic Diversification
At December 31, 2016
($ thousands)
Consumer Real
Estate Commercial
Leasing &
Equipment
Finance
Inventory
Finance Auto Finance Other Total
Minnesota $ 1,247,499 $ 730,183 $ 108,963 $ 81,739 $ 51,267 $ 5,723 $ 2,225,374
California 935,607 139,176 594,705 95,218 430,076 4 2,194,786
Illinois 1,154,721 421,081 169,240 67,928 102,043 4,108 1,919,121
Michigan 480,280 505,823 116,787 100,601 50,399 3,888 1,257,778
Texas — 72,726 416,109 154,098 228,468 8 871,409
Wisconsin 225,522 425,345 60,828 78,067 27,058 818 817,638
Florida 106,045 90,469 225,065 124,910 142,799 39 689,327
Colorado 248,863 251,983 76,536 29,756 50,256 3,762 661,156
New York 33,424 19,238 259,034 86,746 126,754 48 525,244
Canada — — 1,196 458,138 — — 459,334
Ohio 8,102 81,902 159,133 97,999 74,445 — 421,581
Pennsylvania 36,302 15,190 152,459 74,682 107,298 55 385,986
Georgia 50,499 49,003 112,304 58,767 90,032 — 360,605
Arizona 102,255 14,966 126,367 19,678 77,064 213 340,543
North Carolina 4,162 19,860 159,240 60,097 94,307 7 337,673
New Jersey 45,061 — 166,568 22,777 85,216 — 319,622
Indiana 19,423 68,119 82,116 56,266 37,440 4 263,368
Washington 108,478 10,065 69,882 33,011 36,418 3 257,857
Massachusetts 35,253 17,453 118,681 19,072 53,655 — 244,114
Tennessee 3,413 55,229 78,532 40,972 54,640 2 232,788
Virginia 23,720 4,633 87,000 36,706 70,068 10 222,137
Other 215,723 294,034 995,565 672,947 658,038 79 2,836,386
Total $ 5,084,352 $ 3,286,478 $ 4,336,310 $ 2,470,175 $ 2,647,741 $ 18,771 $ 17,843,827
30
Reconciliation of GAAP to Non-GAAP Financial
Measures – Tangible Common Equity Ratio and
Tangible Book Value Per Common Share1
At At
Dec. 31, 2015 Dec. 31, 2016
Total equity $ 2,306,917 $ 2,444,645
Less: Non-controlling interest in subsidiaries 16,001 17,162
Total TCF Financial Corporation stockholders' equity 2,290,916 2,427,483
Less: Preferred stock 263,240 263,240
Total common stockholders' equity (a) 2,027,676 2,164,243
Less:
Goodwill 225,640 225,640
Other intangibles 3,126 1,738
Tangible common equity (b) $ 1,798,910 $ 1,936,865
Total assets (c) $ 20,689,609 $ 21,441,326
Less:
Goodwill 225,640 225,640
Other intangibles 3,126 1,738
Tangible assets (d) $ 20,460,843 $ 21,213,948
Common stock shares outstanding (e) 169,844,464 170,991,940
Common equity ratio (a) / (c) 9.80% 10.09%
Tangible common equity ratio (b) / (d) 8.79% 9.13%
Book value per common share (a) / (e) $ 11.94 $ 12.66
Tangible book value per common share (b) / (e) $ 10.59 $ 11.33
1 When evaluating capital adequacy and utilization, management considers financial measures such as the tangible common equity ratio and tangible
book value per common share. 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.
($ thousands, except per share data)
31
Reconciliation of GAAP to Non-GAAP Financial
Measures – Return on Average Tangible Common
Equity1
YTD YTD
Dec. 31, 2015 Dec. 31, 2016
Net income available to common stockholders (a) $ 177,735 $ 192,736
Plus: Other intangibles amortization 1,562 1,388
Less: Income tax expense attributable to other intangibles amortization 562 493
Adjusted net income available to common stockholders (b) $ 178,735 $ 193,631
Average balances:
Total equity $ 2,217,204 $ 2,394,701
Less: Non-controlling interest in subsidiaries 19,514 21,525
Total TCF Financial Corporation stockholders' equity 2,197,690 2,373,176
Less: Preferred stock 263,240 263,240
Average total common stockholders' equity (c) 1,934,450 2,109,936
Less:
Goodwill 225,640 225,640
Other intangibles 3,913 2,414
Average tangible common equity (d) $ 1,704,897 $ 1,881,882
Return on average common equity (a) / (c) 9.19% 9.13%
Return on average tangible common equity (b) / (d) 10.48% 10.29%
($ thousands)
1 When evaluating capital adequacy and utilization, management considers financial measures such as return on average tangible common equity. This
measure is a non-GAAP financial measure and is viewed by management as a useful indicator 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.
32