TCF FINANCIAL CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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EX-99.2 - EXHIBIT 99.2 - TCF FINANCIAL CORP	a1q18earningsreleasepres.htm
8-K - 8-K - TCF FINANCIAL CORP	tcf33118form8-kearningsrel.htm

Exhibit 99.1

NEWS RELEASE

TCF Financial Corporation • 200 Lake Street East • Wayzata MN 55391

FOR IMMEDIATE RELEASE



Contact:
Mark Goldman	(952) 475-7050	news@tcfbank.com	(Media)
Jason Korstange	(952) 745-2755	investor@tcfbank.com	(Investors)

TCF REPORTS QUARTERLY NET INCOME OF $73.8 MILLION

AND DILUTED EARNINGS PER SHARE OF 39 CENTS

FIRST QUARTER OBSERVATIONS


–	Revenue of $355.4 million, up 9.1 percent from the first quarter of 2017


–	Net interest income of $243.2 million, up 9.5 percent from the first quarter of 2017


–	Net interest margin of 4.59 percent, up 13 basis points from the first quarter of 2017


–	Period-end loans and leases of $19.4 billion, up 7.8 percent from March 31, 2017


–	Net charge-offs as a percentage of average loans and leases of 0.29 percent, up 18 basis points from the first quarter of 2017


–	Non-accrual loans and leases of $126.4 million, down 9.0 percent from March 31, 2017


–	Average deposits of $18.3 billion, up 7.0 percent from the first quarter of 2017


–	Efficiency ratio of 69.21 percent, improved 572 basis points from the first quarter of 2017


–	Earnings per share of 39 cents, up 14 cents from the first quarter of 2017. Impact of 2 cents per share related to the redemption of the 6.45% Series B non-cumulative perpetual preferred stock.



Summary of Financial Results												Table 1
										Change
	1Q			4Q			1Q			1Q18 vs		1Q18 vs
(Dollars in thousands, except per-share data)	2018			2017			2017			4Q17		1Q17
Net income attributable to TCF	$	73,761		$	101,399		$	46,278		(27.3	)%	59.4	%
Net interest income	243,199			241,860			222,114			0.6		9.5
Diluted earnings per common share	0.39			0.57			0.25			(31.6	)	56.0

Financial Ratios⁽¹⁾
Return on average assets	1.33		%	1.82		%	0.90		%	(49	)bps	43	bps
Return on average common equity	11.23			16.95			7.64			(572	)	359
Return on average tangible common equity⁽²⁾	12.26			32.87			8.55			(2,061	)	371
Net interest margin	4.59			4.57			4.46			2		13
Net charge-offs as a percentage of average loans and leases	0.29			0.38			0.11			(9	)	18

(1) Annualized.
(2) See "Reconciliation of GAAP to Non-GAAP Financial Measures" table.

WAYZATA, Minn. (April 23, 2018) - TCF Financial Corporation ("TCF" or the "Company") (NYSE: TCF) today reported net income of $73.8 million for the first quarter of 2018, compared with $46.3 million for the first quarter of 2017 and $101.4 million for the fourth quarter of 2017. Diluted earnings per common share was 39 cents for the first quarter of 2018 (inclusive of a one-time reduction in net income available to common stockholders of 2 cents per common share related to the redemption of the 6.45% Series B non-cumulative perpetual preferred stock in the first quarter of 2018), compared with 25 cents for the first quarter of 2017 and 57 cents for the fourth quarter of 2017 (inclusive of a 29 cents per common share impact from the estimated net tax benefit related to tax reform, goodwill and other intangible assets impairment, severance, other asset impairments, lease termination write-offs associated with the discontinuation of auto finance loan originations and additional TCF Foundation contribution, one-time team member bonuses, planned closure of five branches and inventory finance program extension).

“We delivered a strong start to our year in the first quarter with a continued focus on our four strategic pillars, which drove profitable growth and improved financial performance,” said Craig R. Dahl, chairman and chief executive officer. “We are seeing the continued benefits of an asset sensitive balance sheet as our earning asset yields expanded in the quarter, especially in our variable- and adjustable-rate portfolios. Our efficiency ratio improved on a year-over-year basis and we project further improvement throughout 2018. In addition, the run-off of our auto finance portfolio progressed as expected in the first full quarter following our discontinuation of originations, while our overall credit quality remained strong. Finally, we successfully executed various capital initiatives including the redemption of our Series B preferred stock and additional share repurchases.

“As we look to build on our first quarter momentum for the balance of the year, we are focused on driving shareholder value through strong execution of our strategy. We are taking steps to reduce the risk profile of our balance sheet to further lower our credit, operational and liquidity risks. We also maintain a positive outlook for our diversified lending businesses, including consumer real estate, commercial, leasing and equipment finance and inventory finance businesses from a growth, profitability and credit quality perspective. As a result, I believe we are well-positioned to improve our return on average tangible common equity in 2018 while utilizing capital more efficiently and reducing our overall risk profile.”

Revenue



Total Revenue													Table 2
										Change
	1Q			4Q			1Q			1Q18 vs			1Q18 vs
(Dollars in thousands)	2018			2017			2017			4Q17			1Q17
Total interest income	$	275,262		$	270,628		$	242,307		1.7		%	13.6		%
Total interest expense	32,063			28,768			20,193			11.5			58.8
Net interest income	243,199			241,860			222,114			0.6			9.5
Non-interest income:
Fees and service charges	30,751			33,267			31,282			(7.6	)		(1.7	)
Card revenue	13,759			14,251			13,150			(3.5	)		4.6
ATM revenue	4,650			4,654			4,675			(0.1	)		(0.5	)
Subtotal	49,160			52,172			49,107			(5.8	)		0.1
Gains on sales of auto loans, net	—			2,216			2,864			(100.0	)		(100.0	)
Gains on sales of consumer real estate loans, net	9,123			11,407			8,891			(20.0	)		2.6
Servicing fee income	8,295			9,000			11,651			(7.8	)		(28.8	)
Subtotal	17,418			22,623			23,406			(23.0	)		(25.6	)
Leasing and equipment finance	41,847			42,831			28,298			(2.3	)		47.9
Other	3,716			3,218			2,703			15.5			37.5
Fees and other revenue	112,141			120,844			103,514			(7.2	)		8.3
Gains (losses) on securities, net	63			48			—			31.3			N.M.
Total non-interest income	112,204			120,892			103,514			(7.2	)		8.4
Total revenue	$	355,403		$	362,752		$	325,628		(2.0	)		9.1

Net interest margin⁽¹⁾	4.59		%	4.57		%	4.46		%	2		bps	13		bps
Total non-interest income as a percentage of total revenue	31.6			33.3			31.8			(170	)		(20	)

N.M. Not Meaningful.
(1) Annualized.

Net Interest Income

•

Net interest income for the first quarter of 2018 increased $21.1 million, or 9.5 percent, from the first quarter of 2017 and $1.3 million, or 0.6 percent, from the fourth quarter of 2017. The increase from the first quarter of 2017 was primarily due to increased interest income on loans and leases held for investment, partially offset by an increase in total interest expense and a decrease in interest income on loans held for sale. Total interest income increased $33.0 million, or 13.6 percent, from the first quarter of 2017 primarily due to higher average balances and increased average yields on inventory finance loans and leasing and equipment finance loans and leases, as well as increased average yields and higher average balances of commercial loans. Total interest expense increased $11.9 million, or 58.8 percent, from the first quarter of 2017 primarily due to increased average rates and higher average balances of certificates of deposit and increased average rates on long-term borrowings and savings accounts, partially offset by lower average balances of money market accounts.

•

The increase in net interest income from the fourth quarter of 2017 was primarily due to increased interest income on loans and leases held for investment, partially offset by an increase in total interest expense. Total interest income increased $4.6 million, or 1.7 percent, from the fourth quarter of 2017 primarily due to higher average balances and increased average yields on inventory finance loans, partially offset by lower average balances of auto finance and consumer real estate loans. Total interest expense increased $3.3 million, or 11.5 percent, from the fourth quarter of 2017 primarily due to increased average rates and higher average balances of long-term borrowings and increased average rates on certificates of deposit and savings accounts.

•

Net interest margin was 4.59 percent for the first quarter of 2018, up 13 basis points from the first quarter of 2017 and up 2 basis points from the fourth quarter of 2017. The increase from the first quarter of 2017 was primarily due to increased average yields on the variable- and adjustable-rate loan portfolios as a result of interest rate increases, partially offset by increased average rates and higher average balances of certificates of deposit and increased average rates on long-term borrowings and savings accounts. The increase from the fourth quarter of 2017 was primarily due to increased average yields on seasonally higher average balances of inventory finance loans, partially offset by lower average balances of auto finance loans, increased average rates on higher average balances of long-term borrowings and increased average rates on certificates of deposit and savings accounts.

Non-interest Income


•	TCF sold $266.3 million, $379.4 million and $359.7 million of consumer real estate loans during the first quarter of 2018 and 2017 and the fourth quarter of 2017, respectively, resulting in net gains in each respective period.

•

Servicing fee income was $8.3 million on $4.5 billion of average loans and leases serviced for others for the first quarter of 2018, compared with $11.7 million on $5.6 billion for the first quarter of 2017 and $9.0 million on $4.7 billion for the fourth quarter of 2017. The decreases from both periods were primarily due to run-off in the auto finance serviced for others portfolio. Servicing fee income on auto finance loans serviced for others comprised $6.4 million of total servicing fee income for the first quarter of 2018, compared with $9.8 million and $7.1 million for the first quarter of 2017 and the fourth quarter of 2017, respectively. Servicing fee income on consumer real estate loans serviced for others comprised $1.5 million of total servicing fee income for the first quarter of 2018 and 2017 and the fourth quarter of 2017.

•

Leasing and equipment finance non-interest income for the first quarter of 2018 increased $13.5 million, or 47.9 percent, from the first quarter of 2017 and was consistent with the fourth quarter of 2017. The increase from the first quarter of 2017 was primarily due to an increase in operating lease revenue, mainly driven by the acquisition of a leasing company in the second quarter of 2017 and an increase in sales-type lease revenue.

Loans and Leases



Period-End and Average Loans and Leases									Table 3
							Percent Change
	1Q		4Q		1Q		1Q18 vs		1Q18 vs
(Dollars in thousands)	2018		2017		2017		4Q17		1Q17
Period-End:
Consumer real estate:
First mortgage lien	$	1,878,441	$	1,959,387	$	2,166,691	(4.1	)%	(13.3	)%
Junior lien	2,843,221		2,860,309		2,494,696		(0.6	)	14.0
Total consumer real estate	4,721,662		4,819,696		4,661,387		(2.0	)	1.3
Commercial	3,678,181		3,561,193		3,376,050		3.3		8.9
Leasing and equipment finance	4,666,239		4,761,661		4,276,008		(2.0	)	9.1
Inventory finance	3,457,855		2,739,754		2,864,248		26.2		20.7
Auto finance	2,839,363		3,199,639		2,780,416		(11.3	)	2.1
Other	19,854		22,517		16,785		(11.8	)	18.3
Total	$	19,383,154	$	19,104,460	$	17,974,894	1.5		7.8

Average:
Consumer real estate:
First mortgage lien	$	1,918,677	$	1,959,067	$	2,237,801	(2.1	)%	(14.3	)%
Junior lien	2,879,995		3,013,356		2,791,200		(4.4	)	3.2
Total consumer real estate	4,798,672		4,972,423		5,029,001		(3.5	)	(4.6	)
Commercial	3,601,020		3,536,725		3,302,891		1.8		9.0
Leasing and equipment finance	4,690,868		4,713,015		4,285,944		(0.5	)	9.4
Inventory finance	3,128,290		2,688,387		2,696,787		16.4		16.0
Auto finance	3,020,187		3,267,855		2,714,862		(7.6	)	11.2
Other	14,446		13,007		9,740		11.1		48.3
Total	$	19,253,483	$	19,191,412	$	18,039,225	0.3		6.7


•	Period-end loans and leases were $19.4 billion at March 31, 2018, an increase of $1.4 billion, or 7.8 percent, from March 31, 2017 and $278.7 million, or 1.5 percent, from December 31, 2017. Average loans and leases were $19.3 billion for the first quarter of 2018, an increase of $1.2 billion, or 6.7 percent, from the first quarter of 2017 and consistent with the fourth quarter of 2017.

The increase from March 31, 2017 for period-end loans and leases was primarily due to increases in the inventory finance, leasing and equipment finance and commercial portfolios. The increase from the first quarter of 2017 for average loans and leases was primarily due to increases in the inventory finance, leasing and equipment finance, auto finance and commercial portfolios, partially offset by a decrease in the consumer real estate portfolio. The increases in the inventory finance portfolio were primarily due to strong originations and expansion of the number of active dealers. The increases in the leasing and equipment finance portfolio were primarily due to a loan and lease portfolio purchase of $445.5 million on September 29, 2017. The increase in the average auto finance portfolio was primarily attributable to the reclassification of loans from held for sale to held for investment during the second quarter of 2017, partially offset by the discontinuation of auto finance loan originations effective December 1, 2017. The increases in the commercial portfolio were primarily due to strong originations. The decrease in the average consumer real estate portfolio was primarily due to a decrease in the first mortgage lien portfolio due to run-off and lower originations.

The increase from December 31, 2017 for period-end loans and leases was primarily due to increases in the inventory finance and commercial portfolios, partially offset by decreases in the auto finance, consumer real estate and leasing and equipment finance portfolios. The increase in the inventory finance portfolio was primarily due to a seasonally higher balance in the lawn and garden marketing segment and strong originations. The increase in the commercial portfolio was primarily due to lower pay-offs. The decrease in the auto finance portfolio was primarily attributable to the discontinuation of auto finance loan originations and run-off in the portfolio. The decrease in the consumer real estate portfolio was primarily due to a decrease in the first mortgage lien portfolio due to run-off and lower originations. The decrease in the leasing and equipment finance portfolio was primarily due to lower originations.

•

Loan and lease originations were $3.8 billion for the first quarter of 2018, a decrease of $196.6 million, or 4.9 percent, from the first quarter of 2017 and $116.8 million, or 3.0 percent, from the fourth quarter of 2017. The decrease from the first quarter of 2017 was primarily due to discontinuing auto finance originations and decreased consumer real estate originations, partially offset by higher inventory finance and commercial originations. The decrease from the fourth quarter of 2017 was primarily due to discontinuing auto finance originations and decreased leasing and equipment finance, commercial and consumer real estate originations, partially offset by higher inventory finance originations.

Credit Quality



Credit Trends																			Table 4
																Change
	1Q			4Q			3Q			2Q			1Q			1Q18 vs			1Q18 vs
(Dollars in thousands)	2018			2017			2017			2017			2017			4Q17			1Q17
Over 60-day delinquencies as a percentage of period-end loans and leases⁽¹⁾	0.10		%	0.12		%	0.13		%	0.11		%	0.09		%	(2)		bps	1		bps
Net charge-offs as a percentage of average loans and leases^{(2), (3), (4)}	0.29			0.38			0.18			0.28			0.11			(9	)		18
Non-accrual loans and leases and other real estate owned	$	143,607		$	136,807		$	146,024		$	158,000		$	170,940		5.0		%	(16.0	)	%
Provision for credit losses	11,368			22,259			14,545			19,446			12,193			(48.9	)		(6.8	)

(1) Excludes non-accrual loans and leases.
(2) Annualized.
(3) Excluding the $4.6 million recovery from the consumer real estate non-accrual loan sale, net charge-offs as a percentage of average loans and leases was 0.28% for 3Q 2017.
(4) Excluding the $8.7 million recovery from the consumer real estate non-accrual loan sale, net charge-offs as a percentage of average loans and leases was 0.31% for 1Q 2017.

•

The over 60-day delinquency rate, excluding non-accrual loans and leases, was 0.10 percent at March 31, 2018, up 1 basis point from the March 31, 2017 rate and down 2 basis points from the December 31, 2017 rate. The increase from March 31, 2017 was primarily due to higher delinquencies in the auto finance portfolio, partially offset by improved delinquencies in the first mortgage lien consumer real estate portfolio. The decrease from December 31, 2017 was primarily due to improved delinquencies in the auto finance and leasing and equipment finance portfolios.

•

The net charge-off rate was 0.29 percent for the first quarter of 2018, up 18 basis points from the first quarter of 2017 and down 9 basis points from the fourth quarter of 2017. The increase from the first quarter of 2017 was primarily due to the recovery of $8.7 million in the first quarter of 2017 on previous charge-offs related to the consumer real estate non-accrual loans that were sold and increased net charge-offs in the auto finance portfolio, partially offset by decreased net charge-offs in the commercial portfolio. Excluding the $8.7 million recovery from the consumer real estate non-accrual loan sale, the net charge-off rate was 0.31 percent for the first quarter of 2017. The decrease from the fourth quarter of 2017 was primarily due to decreased net charge-offs in the leasing and equipment finance portfolio.

•

Non-accrual loans and leases and other real estate owned were $143.6 million at March 31, 2018, a decrease of $27.3 million, or 16.0 percent, from March 31, 2017 and an increase of $6.8 million, or 5.0 percent, from December 31, 2017. Non-accrual loans and leases were $126.4 million at March 31, 2018, a decrease of $12.6 million, or 9.0 percent, from March 31, 2017 and an increase of $7.8 million, or 6.6 percent, from December 31, 2017. The decrease from March 31, 2017 was primarily due to the $21.8 million consumer real estate non-accrual loan sale in the third quarter of 2017, partially offset by an increase in non-accrual loans and leases in the leasing and equipment finance portfolio. The increase from December 31, 2017 was primarily due to increases in non-accrual loans and leases in the commercial and leasing and equipment finance portfolios. Other real estate owned was $17.2 million at March 31, 2018, a decrease of $14.8 million, or 46.2 percent, from March 31, 2017 and $1.0 million, or 5.7 percent, from December 31, 2017. The decreases from both periods were primarily due to sales of consumer real estate properties outpacing additions. The decrease from March 31, 2017 was also due to sales of commercial real estate properties.

•

Provision for credit losses was $11.4 million for the first quarter of 2018, a decrease of $0.8 million, or 6.8 percent, from the first quarter of 2017 and $10.9 million, or 48.9 percent, from the fourth quarter of 2017. The decrease from the first quarter of 2017 was primarily due to run-off in the auto finance portfolio and decreased net charge-offs in the commercial portfolio, partially offset by increased net charge-offs in the consumer real estate portfolio mainly driven by the recovery of $8.7 million in the first quarter of 2017 on previous charge-offs related to the consumer real estate non-accrual loans that were sold. The decrease from the fourth quarter of 2017 was primarily due to run-off in the auto finance portfolio, decreased net charge-offs in the leasing and equipment finance portfolio and a decreased reserve rate for the inventory finance portfolio, partially offset by seasonal growth in the inventory finance portfolio.

Deposits



Average Deposits												Table 5
										Change
	1Q			4Q			1Q			1Q18 vs		1Q18 vs
(Dollars in thousands)	2018			2017			2017			4Q17		1Q17
Checking	$	6,192,310		$	6,098,522		$	5,914,203		1.5	%	4.7	%
Savings	5,410,652			5,154,216			4,773,788			5.0		13.3
Money market	1,698,064			1,854,442			2,385,353			(8.4	)	(28.8	)
Certificates of deposit	4,998,133			5,032,085			4,033,143			(0.7	)	23.9
Total average deposits	$	18,299,159		$	18,139,265		$	17,106,487		0.9		7.0

Average interest rate on deposits⁽¹⁾	0.50		%	0.46		%	0.33		%	4	bps	17	bps

(1) Annualized.

•

Total average deposits for the first quarter of 2018 increased $1.2 billion, or 7.0 percent, from the first quarter of 2017 and $159.9 million, or 0.9 percent, from the fourth quarter of 2017. The increase from the first quarter of 2017 was primarily due to higher average balances of certificates of deposit, savings accounts and checking accounts, partially offset by lower average balances of money market accounts. The increase from the fourth quarter of 2017 was primarily due to higher average balances of savings accounts and checking accounts, partially offset by lower average balances of money market accounts and certificates of deposit.


•	The average interest rate on deposits for the first quarter of 2018 was 0.50 percent, up 17 basis points from the first quarter of 2017 and 4 basis points from the fourth quarter of 2017. The increases from both periods were primarily due to increased average rates on certificates of deposit and savings accounts as a result of interest rate increases.

Non-interest Expense



Non-interest Expense												Table 6
										Change
	1Q			4Q			1Q			1Q18 vs		1Q18 vs
(Dollars in thousands)	2018			2017			2017			4Q17		1Q17
Compensation and employee benefits	$	123,840		$	127,630		$	124,298		(3.0	)%	(0.4	)%
Occupancy and equipment	40,514			39,578			39,600			2.4		2.3
Other	58,819			159,019			64,216			(63.0	)	(8.4	)
Subtotal	223,173			326,227			228,114			(31.6	)	(2.2	)
Operating lease depreciation	17,274			16,497			11,242			4.7		53.7
Foreclosed real estate and repossessed assets, net	4,916			4,739			4,549			3.7		8.1
Other credit costs, net	617			343			101			79.9		N.M.
Total non-interest expense	$	245,980		$	347,806		$	244,006		(29.3	)	0.8

Efficiency ratio	69.21		%	95.88		%	74.93		%	(2,667	)bps	(572	)bps

N.M. Not Meaningful.

•

Non-interest expense for the first quarter of 2018 increased $2.0 million, or 0.8 percent, from the first quarter of 2017 and decreased $101.8 million, or 29.3 percent, from the fourth quarter of 2017. The increase from the first quarter of 2017 was primarily due to an increase in operating lease depreciation, partially offset by a decrease in other non-interest expense. The decrease from the fourth quarter of 2017 was primarily due to decreases in other non-interest expense and compensation and employee benefits expense.


•	Compensation and employee benefits expense for the first quarter of 2018 was consistent with the first quarter of 2017 and decreased $3.8 million, or 3.0 percent, from the fourth quarter of 2017. The decrease from the fourth quarter of 2017 was primarily due to one-time team member bonuses recorded in the fourth quarter of 2017 and lower headcount in the auto finance business.

•

Other non-interest expense decreased $5.4 million, or 8.4 percent, from the first quarter of 2017 and $100.2 million, or 63.0 percent, from the fourth quarter of 2017. The decrease from the first quarter of 2017 was primarily due to decreases in severance expense, loan and lease processing expense and professional fees, partially offset by increases in advertising and marketing expense and outside processing expense. The decrease from the fourth quarter of 2017 was primarily due to fourth quarter 2017 charges related to the discontinuation of auto finance loan originations, including goodwill and other intangible assets impairment charges of $73.4 million and severance, asset impairment and lease termination write-offs of $14.8 million, as well as the donation to TCF Foundation of $5.0 million.


•	Operating lease depreciation increased $6.0 million, or 53.7 percent, from the first quarter of 2017 and was consistent with the fourth quarter of 2017. The increase from the first quarter of 2017 was primarily due to an increase in leasing and equipment finance operating lease revenue related to the acquisition of a leasing company in the second quarter of 2017.

Income Tax Expense


•	The Company's effective income tax rate was 22.1% for the first quarter of 2018, compared with 30.0% for the first quarter of 2017. The effective tax rates for the first quarter of 2018 and 2017 were impacted by $1.2 million and $2.0 million, respectively, of tax benefits related to stock compensation.

Capital



Capital Information				Table 7
	At Mar. 31,			At Dec. 31,
(Dollars in thousands, except per-share data)	2018			2017
Total equity	$	2,550,950		$	2,680,584
Book value per common share	13.89			13.96
Tangible book value per common share⁽¹⁾	12.84			12.92
Common equity to assets	10.06		%	10.42		%
Tangible common equity to tangible assets⁽¹⁾	9.37			9.72

	At Mar. 31,			At Dec. 31,
Regulatory Capital:	2018⁽²⁾			2017
Common equity Tier 1 capital	$	2,222,390		$	2,242,410
Tier 1 capital	2,414,838			2,522,178
Total capital	2,786,637			2,889,323

Regulatory Capital Ratios:
Common equity Tier 1 capital ratio	10.57		%	10.79		%
Tier 1 risk-based capital ratio	11.49			12.14
Total risk-based capital ratio	13.26			13.90
Tier 1 leverage ratio	10.52			11.12

(1) See "Reconciliation of GAAP to Non-GAAP Financial Measures" table.
(2) The regulatory capital ratios for 1Q 2018 are preliminary pending completion and filing of the Company's regulatory reports.


•	TCF continues to maintain strong capital ratios after the preferred stock redemption and common stock repurchases.


•	TCF repurchased 2,567,171 shares of its common stock during the first quarter of 2018 for approximately $57.6 million, at an average cost of $22.45 per share, under its share repurchase program. TCF has the authority to purchase an additional $83.2 million in aggregate value of shares of TCF's common stock pursuant to its stock repurchase program.


•	On March 1, 2018, TCF redeemed all outstanding shares of its 6.45% Series B non-cumulative perpetual preferred stock for $100.0 million.


•	On April 19, 2018, TCF's Board of Directors declared a regular quarterly cash dividend of 15 cents per common share payable on June 1, 2018, to stockholders of record at the close of business on May 15, 2018. TCF also declared dividends on the 5.70% Series C non-cumulative perpetual preferred stock, payable on June 1, 2018, to stockholders of record at the close of business on May 15, 2018.

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 23, 2018 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, 2018, TCF had $23.4 billion in total assets and 318 bank branches in Illinois, Minnesota, Michigan, Colorado, Wisconsin, Arizona and South Dakota providing retail and commercial banking services. TCF, through its subsidiaries, also conducts commercial leasing and equipment finance business in all 50 states and commercial inventory finance business in all 50 states and Canada. For more information about TCF, please visit http://ir.tcfbank.com.

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

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

Certain factors could cause the Company's future results to differ materially from those expressed or implied in any forward-looking statements contained herein. These factors include the factors discussed in Part I, Item 1A. of the Company's Annual Report on Form 10-K for the year ended December 31, 2017 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, debt securities held to maturity and debt securities available for sale portfolios, including declines in commercial or residential real estate values, changes in the allowance for loan and lease losses dictated by new market conditions or regulatory requirements, or the inability of home equity line borrowers to make increased payments caused by increased interest rates or amortization of principal; deviations from estimates of prepayment rates and fluctuations in interest rates that result in decreases in the value of assets such as interest-only strips that arise in connection with TCF's loan sales activity; interest rate risks resulting from fluctuations in prevailing interest rates or other factors that result in a mismatch between yields earned on TCF's interest-earning assets and the rates paid on its deposits and borrowings; foreign currency exchange risks; counterparty risk, including the risk of defaults by our counterparties or diminished availability of counterparties who satisfy our credit quality requirements; decreases in demand for the types of equipment that TCF leases or finances; the effect of any negative publicity; the effects of man-made and natural disasters, including fires, floods, tornadoes, hurricanes, acts of terrorism, civil disturbances and environmental damage, which may negatively affect our operations and/or our customers.

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

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

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

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

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

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



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per-share data)
(Unaudited)

	Quarter Ended March 31,				Change
	2018		2017		$			%
Interest income:
Loans and leases	$	260,375	$	219,548	$	40,827		18.6	%
Debt securities available for sale	10,123		7,980		2,143			26.9
Debt securities held to maturity	1,019		1,280		(261		)	(20.4	)
Loans held for sale and other	3,745		13,499		(9,754		)	(72.3	)
Total interest income	275,262		242,307		32,955			13.6
Interest expense:
Deposits	22,510		13,715		8,795			64.1
Borrowings	9,553		6,478		3,075			47.5
Total interest expense	32,063		20,193		11,870			58.8
Net interest income	243,199		222,114		21,085			9.5
Provision for credit losses	11,368		12,193		(825		)	(6.8	)
Net interest income after provision for credit losses	231,831		209,921		21,910			10.4
Non-interest income:
Fees and service charges	30,751		31,282		(531		)	(1.7	)
Card revenue	13,759		13,150		609			4.6
ATM revenue	4,650		4,675		(25		)	(0.5	)
Subtotal	49,160		49,107		53			0.1
Gains on sales of auto loans, net	—		2,864		(2,864		)	(100.0	)
Gains on sales of consumer real estate loans, net	9,123		8,891		232			2.6
Servicing fee income	8,295		11,651		(3,356		)	(28.8	)
Subtotal	17,418		23,406		(5,988		)	(25.6	)
Leasing and equipment finance	41,847		28,298		13,549			47.9
Other	3,716		2,703		1,013			37.5
Fees and other revenue	112,141		103,514		8,627			8.3
Gains (losses) on debt securities, net	63		—		63			N.M.
Total non-interest income	112,204		103,514		8,690			8.4
Non-interest expense:
Compensation and employee benefits	123,840		124,298		(458		)	(0.4	)
Occupancy and equipment	40,514		39,600		914			2.3
Other	58,819		64,216		(5,397		)	(8.4	)
Subtotal	223,173		228,114		(4,941		)	(2.2	)
Operating lease depreciation	17,274		11,242		6,032			53.7
Foreclosed real estate and repossessed assets, net	4,916		4,549		367			8.1
Other credit costs, net	617		101		516			N.M.
Total non-interest expense	245,980		244,006		1,974			0.8
Income before income tax expense	98,055		69,429		28,626			41.2
Income tax expense	21,631		20,843		788			3.8
Income after income tax expense	76,424		48,586		27,838			57.3
Income attributable to non-controlling interest	2,663		2,308		355			15.4
Net income attributable to TCF Financial Corporation	73,761		46,278		27,483			59.4
Preferred stock dividends	4,106		4,847		(741		)	(15.3	)
Impact of preferred stock redemption	3,481		—		3,481			N.M.
Net income available to common stockholders	$	66,174	$	41,431	$	24,743		59.7

Earnings per common share:
Basic	$	0.39	$	0.25	$	0.14		56.0	%
Diluted	0.39		0.25		0.14			56.0

Dividends declared per common share	$	0.15	$	0.075	$	0.075		100.0	%

Average common and common equivalent shares
outstanding (in thousands):
Basic	168,507		167,903		604			0.4	%
Diluted	169,997		168,530		1,467			0.9

N.M. Not Meaningful.



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
(Unaudited)

	Quarter Ended March 31,						Change
	2018			2017			$			%
Net income attributable to TCF Financial Corporation	$	73,761		$	46,278		$	27,483		59.4	%
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on debt securities available for sale and interest-only strips	(27,819		)	2,769			(30,588		)	N.M.
Net unrealized gains (losses) on net investment hedges	1,604			(313		)	1,917			N.M.
Foreign currency translation adjustment	(2,110		)	581			(2,691		)	N.M.
Recognized postretirement prior service cost	(9		)	(7		)	(2		)	(28.6	)
Total other comprehensive income (loss), net of tax	(28,334		)	3,030			(31,364		)	N.M.
Comprehensive income	$	45,427		$	49,308		$	(3,881	)	(7.9	)

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
	2018			2017			$			%
ASSETS:
Cash and due from banks	$	588,893		$	621,782		$	(32,889	)	(5.3	)%
Investments	91,661			82,644			9,017			10.9
Debt securities held to maturity	158,099			161,576			(3,477		)	(2.2	)
Debt securities available for sale	1,954,246			1,709,018			245,228			14.3
Loans and leases held for sale	50,706			134,862			(84,156		)	(62.4	)
Loans and leases:
Consumer real estate:
First mortgage lien	1,878,441			1,959,387			(80,946		)	(4.1	)
Junior lien	2,843,221			2,860,309			(17,088		)	(0.6	)
Total consumer real estate	4,721,662			4,819,696			(98,034		)	(2.0	)
Commercial	3,678,181			3,561,193			116,988			3.3
Leasing and equipment finance	4,666,239			4,761,661			(95,422		)	(2.0	)
Inventory finance	3,457,855			2,739,754			718,101			26.2
Auto finance	2,839,363			3,199,639			(360,276		)	(11.3	)
Other	19,854			22,517			(2,663		)	(11.8	)
Total loans and leases	19,383,154			19,104,460			278,694			1.5
Allowance for loan and lease losses	(167,703		)	(171,041		)	3,338			2.0
Net loans and leases	19,215,451			18,933,419			282,032			1.5
Premises and equipment, net	427,497			421,549			5,948			1.4
Goodwill, net	154,757			154,757			—			—
Other assets	743,742			782,552			(38,810		)	(5.0	)
Total assets	$	23,385,052		$	23,002,159		$	382,893		1.7

LIABILITIES AND EQUITY:
Deposits:
Checking	$	6,541,409		$	6,300,127		$	241,282		3.8	%
Savings	5,551,155			5,287,606			263,549			5.0
Money market	1,609,472			1,764,998			(155,526		)	(8.8	)
Certificates of deposit	4,995,636			4,982,271			13,365			0.3
Total deposits	18,697,672			18,335,002			362,670			2.0
Short-term borrowings	775			—			775			N.M.
Long-term borrowings	1,457,976			1,249,449			208,527			16.7
Total borrowings	1,458,751			1,249,449			209,302			16.8
Accrued expenses and other liabilities	677,679			737,124			(59,445		)	(8.1	)
Total liabilities	20,834,102			20,321,575			512,527			2.5
Equity:
Preferred stock, par value $0.01 per share, 30,000,000 shares authorized;
7,000 and 4,007,000 shares issued, respectively	169,302			265,821			(96,519		)	(36.3	)
Common stock, par value $0.01 per share, 280,000,000 shares authorized;
172,472,035 and 172,158,449 shares issued, respectively	1,725			1,722			3			0.2
Additional paid-in capital	878,096			877,217			879			0.1
Retained earnings, subject to certain restrictions	1,618,041			1,577,311			40,730			2.6
Accumulated other comprehensive income (loss)	(46,851		)	(18,517		)	(28,334		)	(153.0	)
Treasury stock at cost, 3,056,201 and 489,030 shares, respectively and other	(97,800		)	(40,797		)	(57,003		)	(139.7	)
Total TCF Financial Corporation stockholders' equity	2,522,513			2,662,757			(140,244		)	(5.3	)
Non-controlling interest in subsidiaries	28,437			17,827			10,610			59.5
Total equity	2,550,950			2,680,584			(129,634		)	(4.8	)
Total liabilities and equity	$	23,385,052		$	23,002,159		$	382,893		1.7

N.M. Not Meaningful.



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
SUMMARY OF CREDIT QUALITY DATA
(Dollars in thousands)
(Unaudited)

Over 60-Day Delinquencies as a Percentage of Portfolio⁽¹⁾
											Change from
	At Mar. 31,		At Dec. 31,		At Sep. 30,		At Jun. 30,		At Mar. 31,		Dec. 31,			Mar. 31,
	2018		2017		2017		2017		2017		2017			2017
Consumer real estate:
First mortgage lien	0.23	%	0.25	%	0.32	%	0.31	%	0.28	%	(2	)	bps	(5	)	bps
Junior lien	0.06		0.04		0.05		0.05		0.05		2			1
Total consumer real estate	0.13		0.13		0.15		0.16		0.15		—			(2	)
Commercial	—		—		—		—		—		—			—
Leasing and equipment finance	0.11		0.14		0.15		0.14		0.12		(3	)		(1	)
Inventory finance	—		0.01		0.01		0.01		—		(1	)		—
Auto finance	0.24		0.28		0.25		0.20		0.13		(4	)		11
Other	0.24		0.04		0.07		0.30		0.05		20			19
Subtotal	0.09		0.11		0.12		0.11		0.09		(2	)		—
Portfolios acquired with deteriorated credit quality	12.95		13.18		9.42		—		—		(23	)		1,295
Total delinquencies	0.10		0.12		0.13		0.11		0.09		(2	)		1


(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,
	2018		2017		2017		2017		2017		2017			2017
Consumer real estate:
First mortgage lien	0.16	%	0.18	%	(0.16	)%	0.15	%	(0.18	)%	(2	)	bps	34		bps
Junior lien	0.05		(0.03	)	(0.38	)	0.05		(0.89	)	8			94
Total consumer real estate	0.09		0.05		(0.29	)	0.09		(0.58	)	4			67
Commercial	—		(0.04	)	(0.02	)	0.29		0.32		4			(32	)
Leasing and equipment finance	0.11		0.41		0.10		0.14		0.13		(30	)		(2	)
Inventory finance	0.05		0.15		0.08		0.09		0.01		(10	)		4
Auto finance	1.41		1.36		1.13		0.83		1.12		5			29
Other	N.M.		N.M.		N.M.		N.M.		N.M.		N.M.			N.M.
Total	0.29		0.38		0.18		0.28		0.11		(9	)		18

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,
	2018			2017			2017			2017			2017			2017			2017
Balance, beginning of period	$	118,582		$	119,619		$	129,273		$	138,981		$	181,445		$	(1,037	)	$	(62,863	)
Additions	34,462			32,384			39,094			23,667			34,661			2,078			(199		)
Charge-offs	(3,891		)	(7,636		)	(3,916		)	(6,819		)	(6,412		)	3,745			2,521
Transfers to other assets	(8,457		)	(9,551		)	(7,308		)	(10,870		)	(8,786		)	1,094			329
Return to accrual status	(4,335		)	(2,187		)	(3,559		)	(3,077		)	(2,591		)	(2,148		)	(1,744		)
Payments received	(10,608		)	(14,412		)	(7,993		)	(11,647		)	(10,732		)	3,804			124
Sales	—			—			(25,924		)	(892		)	(49,916		)	—			49,916
Other, net	675			365			(48		)	(70		)	1,312			310			(637		)
Balance, end of period	$	126,428		$	118,582		$	119,619		$	129,273		$	138,981		$	7,846		$	(12,553	)



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,
	2018			2017			2017			2017			2017			2017			2017
Balance, beginning of period	$	18,225		$	26,405		$	28,727		$	31,959		$	46,797		$	(8,180	)	$	(28,572	)
Transferred in	5,196			5,638			5,685			8,638			7,212			(442		)	(2,016		)
Sales	(7,348		)	(13,395		)	(9,204		)	(11,243		)	(14,982		)	6,047			7,634
Writedowns	(1,063		)	(1,024		)	(1,345		)	(1,674		)	(1,538		)	(39		)	475
Other, net⁽¹⁾	2,169			601			2,542			1,047			(5,530		)	1,568			7,699
Balance, end of period	$	17,179		$	18,225		$	26,405		$	28,727		$	31,959		$	(1,046	)	$	(14,780	)


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



Allowance for Loan and Lease Losses

	At Mar. 31,					At Dec. 31,					At Sep. 30,					At Jun. 30,					At Mar. 31,
	2018					2017					2017					2017					2017
				% of					% of					% of					% of				% of
	Balance		Portfolio			Balance		Portfolio			Balance		Portfolio			Balance		Portfolio			Balance		Portfolio
Consumer real estate	$	47,685		1.01	%	$	47,168		0.98	%	$	47,838		0.97	%	$	52,408		1.10	%	$	53,851	1.16	%
Commercial	37,198			1.01		37,195			1.04		36,344			1.04		34,669			0.99		33,697		1.00
Leasing and equipment finance	23,182			0.50		22,528			0.47		22,771			0.48		21,922			0.51		21,257		0.50
Inventory finance	13,253			0.38		13,233			0.48		11,978			0.46		12,129			0.48		15,816		0.55
Auto finance	45,822			1.61		50,225			1.57		48,660			1.50		43,893			1.35		35,108		1.26
Other	563			2.84		692			3.07		653			3.19		599			3.08		437		2.60
Total	$	167,703		0.87		$	171,041		0.90		$	168,244		0.89		$	165,620		0.90		$	160,166	0.89



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,
	2018			2017			2017			2017			2017			2017			2017
Balance, beginning of period	$	171,041		$	168,244		$	165,620		$	160,166		$	160,269		$	2,797		$	10,772
Charge-offs	(19,865		)	(23,865		)	(17,999		)	(18,326		)	(18,902		)	4,000			(963		)
Recoveries	5,714			5,580			9,847			5,412			13,813			134			(8,099		)
Net (charge-offs) recoveries	(14,151		)	(18,285		)	(8,152		)	(12,914		)	(5,089		)	4,134			(9,062		)
Provision for credit losses	11,368			22,259			14,545			19,446			12,193			(10,891		)	(825		)
Other	(555		)	(1,177		)	(3,769		)	(1,078		)	(7,207		)	622			6,652
Balance, end of period	$	167,703		$	171,041		$	168,244		$	165,620		$	160,166		$	(3,338	)	$	7,537



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Dollars in thousands)
(Unaudited)

	Quarter Ended March 31,
	2018						2017
	Average				Yields and		Average				Yields and
	Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾		Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾
ASSETS:
Investments and other	$	332,319	$	2,776	3.38	%	$	286,519	$	2,747	3.88	%
Debt securities held to maturity	159,139		1,019		2.56		177,939		1,280		2.88
Debt securities available for sale:⁽³⁾
Taxable	981,843		5,813		2.37		815,867		4,654		2.28
Tax-exempt⁽⁴⁾	821,642		5,456		2.66		640,826		5,117		3.19
Loans and leases held for sale	63,095		969		6.22		464,301		10,752		9.39
Loans and leases:⁽⁵⁾
Consumer real estate:
Fixed-rate	1,786,636		24,613		5.58		2,083,472		29,287		5.70
Variable- and adjustable-rate	3,012,036		45,881		6.18		2,945,529		40,239		5.54
Total consumer real estate	4,798,672		70,494		5.96		5,029,001		69,526		5.60
Commercial:
Fixed-rate	931,275		10,597		4.61		1,000,316		11,713		4.75
Variable- and adjustable-rate	2,669,745		33,160		5.04		2,302,575		24,391		4.30
Total commercial	3,601,020		43,757		4.93		3,302,891		36,104		4.43
Leasing and equipment finance	4,690,868		56,407		4.81		4,285,944		47,976		4.48
Inventory finance	3,128,290		51,195		6.64		2,696,787		39,451		5.93
Auto finance	3,020,187		39,285		5.28		2,714,862		27,771		4.15
Other	14,446		147		4.16		9,740		131		5.44
Total loans and leases	19,253,483		261,285		5.49		18,039,225		220,959		4.95
Total interest-earning assets	21,611,521		277,318		5.19		20,424,677		245,509		4.86
Other assets⁽⁶⁾	1,453,742						1,263,678
Total assets	$	23,065,263					$	21,688,355
LIABILITIES AND EQUITY:
Non-interest bearing deposits:
Retail	$	2,182,780					$	1,880,298
Small business	928,057						894,845
Commercial and custodial	634,908						626,081
Total non-interest bearing deposits	3,745,745						3,401,224
Interest-bearing deposits:
Checking	2,461,548		113		0.02		2,530,281		83		0.01
Savings	5,395,669		3,165		0.24		4,756,486		501		0.04
Money market	1,698,064		2,409		0.58		2,385,353		2,938		0.50
Certificates of deposit	4,998,133		16,823		1.36		4,033,143		10,193		1.02
Total interest-bearing deposits	14,553,414		22,510		0.63		13,705,263		13,715		0.41
Total deposits	18,299,159		22,510		0.50		17,106,487		13,715		0.33
Borrowings:
Short-term borrowings	3,952		19		1.99		4,628		7		0.65
Long-term borrowings	1,423,075		9,534		2.70		1,459,053		6,471		1.78
Total borrowings	1,427,027		9,553		2.70		1,463,681		6,478		1.78
Total interest-bearing liabilities	15,980,441		32,063		0.81		15,168,944		20,193		0.54
Total deposits and borrowings	19,726,186		32,063		0.66		18,570,168		20,193		0.44
Accrued expenses and other liabilities	758,157						665,301
Total liabilities	20,484,343						19,235,469
Total TCF Financial Corp. stockholders' equity	2,557,729						2,431,755
Non-controlling interest in subsidiaries	23,191						21,131
Total equity	2,580,920						2,452,886
Total liabilities and equity	$	23,065,263					$	21,688,355
Net interest income and margin			$	245,255	4.59				$	225,316	4.46


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


(2)	Annualized.


(3)	Average balances and yields of debt securities available for sale are based upon historical amortized cost.


(4)	The yield on tax-exempt debt securities available for sale is computed on a tax-equivalent basis using a statutory federal income tax rate of 21% for the first quarter of 2018 and 35% for the same period in 2017.


(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 $281.9 million and $180.3 million for the first quarter of 2018 and 2017, respectively.



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per-share data)
(Unaudited)

	Quarter Ended
	Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,
	2018			2017			2017			2017			2017
Interest income:
Loans and leases	$	260,375		$	256,633		$	243,973		$	234,092		$	219,548
Debt securities available for sale	10,123			8,760			8,486			8,052			7,980
Debt securities held to maturity	1,019			1,048			1,073			1,035			1,280
Loans held for sale and other	3,745			4,187			4,073			5,338			13,499
Total interest income	275,262			270,628			257,605			248,517			242,307
Interest expense:
Deposits	22,510			20,846			17,015			14,436			13,715
Borrowings	9,553			7,922			6,487			6,920			6,478
Total interest expense	32,063			28,768			23,502			21,356			20,193
Net interest income	243,199			241,860			234,103			227,161			222,114
Provision for credit losses	11,368			22,259			14,545			19,446			12,193
Net interest income after provision for credit losses	231,831			219,601			219,558			207,715			209,921
Non-interest income:
Fees and service charges	30,751			33,267			34,605			32,733			31,282
Card revenue	13,759			14,251			14,177			14,154			13,150
ATM revenue	4,650			4,654			5,234			5,061			4,675
Subtotal	49,160			52,172			54,016			51,948			49,107
Gains on sales of auto loans, net	—			2,216			—			380			2,864
Gains on sales of consumer real estate loans, net	9,123			11,407			8,049			8,980			8,891
Servicing fee income	8,295			9,000			9,966			10,730			11,651
Subtotal	17,418			22,623			18,015			20,090			23,406
Leasing and equipment finance	41,847			42,831			34,080			39,830			28,298
Other	3,716			3,218			2,930			2,795			2,703
Fees and other revenue	112,141			120,844			109,041			114,663			103,514
Gains (losses) on debt securities, net	63			48			189			—			—
Total non-interest income	112,204			120,892			109,230			114,663			103,514
Non-interest expense:
Compensation and employee benefits	123,840			127,630			114,954			115,630			124,298
Occupancy and equipment	40,514			39,578			38,766			38,965			39,600
Other	58,819			159,019			61,581			61,363			64,216
Subtotal	223,173			326,227			215,301			215,958			228,114
Operating lease depreciation	17,274			16,497			15,696			12,466			11,242
Foreclosed real estate and repossessed assets, net	4,916			4,739			3,829			4,639			4,549
Other credit costs, net	617			343			209			24			101
Total non-interest expense	245,980			347,806			235,035			233,087			244,006
Income (loss) before income tax expense (benefit)	98,055			(7,313		)	93,753			89,291			69,429
Income tax expense (benefit)	21,631			(110,965		)	30,704			25,794			20,843
Income after income tax expense (benefit)	76,424			103,652			63,049			63,497			48,586
Income attributable to non-controlling interest	2,663			2,253			2,521			3,065			2,308
Net income attributable to TCF Financial Corporation	73,761			101,399			60,528			60,432			46,278
Preferred stock dividends	4,106			3,746			6,464			4,847			4,847
Impact of preferred stock redemption	3,481			—			5,779			—			—
Net income available to common stockholders	$	66,174		$	97,653		$	48,285		$	55,585		$	41,431

Earnings per common share:
Basic	$	0.39		$	0.58		$	0.29		$	0.33		$	0.25
Diluted	0.39			0.57			0.29			0.33			0.25

Dividends declared per common share	$	0.15		$	0.075		$	0.075		$	0.075		$	0.075

Financial highlights:⁽¹⁾
Return on average assets	1.33		%	1.82		%	1.15		%	1.17		%	0.90		%
Return on average common equity	11.23			16.95			8.44			9.96			7.64
Net interest margin	4.59			4.57			4.61			4.52			4.46


(1)	Annualized.



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

	Mar. 31, 2018		Dec. 31, 2017		Sep. 30, 2017		Jun. 30, 2017		Mar. 31, 2017
ASSETS:
Investments and other	$	332,319	$	303,958	$	279,839	$	259,548	$	286,519
Debt securities held to maturity	159,139		163,080		166,883		172,322		177,939
Debt securities available for sale:⁽¹⁾
Taxable	981,843		831,113		825,192		821,744		815,867
Tax-exempt	821,642		779,964		737,859		689,667		640,826
Loans and leases held for sale	63,095		113,501		96,143		165,859		464,301
Loans and leases:⁽²⁾
Consumer real estate:
Fixed-rate	1,786,636		1,821,240		1,872,607		1,963,822		2,083,472
Variable- and adjustable-rate	3,012,036		3,151,183		2,964,493		2,782,296		2,945,529
Total consumer real estate	4,798,672		4,972,423		4,837,100		4,746,118		5,029,001
Commercial:
Fixed-rate	931,275		963,703		980,262		966,884		1,000,316
Variable- and adjustable-rate	2,669,745		2,573,022		2,493,163		2,450,168		2,302,575
Total commercial	3,601,020		3,536,725		3,473,425		3,417,052		3,302,891
Leasing and equipment finance	4,690,868		4,713,015		4,316,434		4,277,376		4,285,944
Inventory finance	3,128,290		2,688,387		2,479,416		2,723,340		2,696,787
Auto finance	3,020,187		3,267,855		3,280,612		3,149,974		2,714,862
Other	14,446		13,007		11,567		10,235		9,740
Total loans and leases	19,253,483		19,191,412		18,398,554		18,324,095		18,039,225
Total interest-earning assets	21,611,521		21,383,028		20,504,470		20,433,235		20,424,677
Other assets⁽³⁾	1,453,742		1,437,126		1,434,957		1,315,495		1,263,678
Total assets	$	23,065,263	$	22,820,154	$	21,939,427	$	21,748,730	$	21,688,355

LIABILITIES AND EQUITY:
Non-interest-bearing deposits:
Retail	$	2,182,780	$	1,938,053	$	1,940,797	$	1,967,542	$	1,880,298
Small business	928,057		972,493		937,847		897,391		894,845
Commercial and custodial	634,908		660,300		642,400		608,706		626,081
Total non-interest bearing deposits	3,745,745		3,570,846		3,521,044		3,473,639		3,401,224
Interest-bearing deposits:
Checking	2,461,548		2,541,475		2,539,211		2,554,563		2,530,281
Savings	5,395,669		5,140,417		4,846,090		4,806,371		4,756,486
Money market	1,698,064		1,854,442		2,106,814		2,221,807		2,385,353
Certificates of deposit	4,998,133		5,032,085		4,636,007		4,266,488		4,033,143
Total interest-bearing deposits	14,553,414		14,568,419		14,128,122		13,849,229		13,705,263
Total deposits	18,299,159		18,139,265		17,649,166		17,322,868		17,106,487
Borrowings:
Short-term borrowings	3,952		3,759		6,448		6,230		4,628
Long-term borrowings	1,423,075		1,295,268		983,004		1,225,022		1,459,053
Total borrowings	1,427,027		1,299,027		989,452		1,231,252		1,463,681
Total interest-bearing liabilities	15,980,441		15,867,446		15,117,574		15,080,481		15,168,944
Total deposits and borrowings	19,726,186		19,438,292		18,638,618		18,554,120		18,570,168
Accrued expenses and other liabilities	758,157		790,850		723,792		673,740		665,301
Total liabilities	20,484,343		20,229,142		19,362,410		19,227,860		19,235,469
Total TCF Financial Corporation stockholders' equity	2,557,729		2,570,613		2,554,667		2,494,682		2,431,755
Non-controlling interest in subsidiaries	23,191		20,399		22,350		26,188		21,131
Total equity	2,580,920		2,591,012		2,577,017		2,520,870		2,452,886
Total liabilities and equity	$	23,065,263	$	22,820,154	$	21,939,427	$	21,748,730	$	21,688,355


(1)	Average balances of debt securities available for sale are based upon historical amortized cost.


(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 $281.9 million, $267.8 million, $249.0 million, $200.7 million and $180.3 million for the first quarter of 2018 and for the fourth, third, second and first quarter of 2017, respectively.



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED QUARTERLY YIELDS AND RATES⁽¹⁾⁽²⁾
(Unaudited)

	Mar. 31, 2018		Dec. 31, 2017		Sep. 30, 2017		Jun. 30, 2017		Mar. 31, 2017
ASSETS:
Investments and other	3.38	%	3.07	%	3.80	%	4.20	%	3.88	%
Debt securities held to maturity	2.56		2.57		2.57		2.40		2.88
Debt securities available for sale:⁽³⁾
Taxable	2.37		2.25		2.24		2.16		2.28
Tax-exempt⁽⁴⁾	2.66		3.22		3.22		3.23		3.19
Loans and leases held for sale	6.22		6.43		5.75		6.34		9.39
Loans and leases:
Consumer real estate:
Fixed-rate	5.58		5.61		5.61		5.65		5.70
Variable- and adjustable rate	6.18		5.95		5.91		5.76		5.54
Total consumer real estate	5.96		5.83		5.80		5.72		5.60
Commercial:
Fixed-rate	4.61		5.49		4.62		4.62		4.75
Variable- and adjustable-rate	5.04		4.68		4.76		4.45		4.30
Total commercial	4.93		4.90		4.72		4.50		4.43
Leasing and equipment finance	4.81		4.90		4.53		4.48		4.48
Inventory finance	6.64		6.01		6.71		6.22		5.93
Auto finance	5.28		5.23		5.17		5.01		4.15
Other	4.16		4.75		5.03		5.37		5.44
Total loans and leases	5.49		5.35		5.31		5.15		4.95

Total interest-earning assets	5.19		5.11		5.07		4.94		4.86

LIABILITIES:
Interest-bearing deposits:
Checking	0.02		0.02		0.02		0.01		0.01
Savings	0.24		0.18		0.08		0.04		0.04
Money market	0.58		0.48		0.47		0.45		0.50
Certificates of deposit	1.36		1.28		1.16		1.07		1.02
Total interest-bearing deposits	0.63		0.57		0.48		0.42		0.41
Total deposits	0.50		0.46		0.38		0.33		0.33
Borrowings:
Short-term borrowings	1.99		1.75		1.33		0.79		0.65
Long-term borrowings	2.70		2.43		2.62		2.26		1.78
Total borrowings	2.70		2.43		2.62		2.25		1.78

Total interest-bearing liabilities	0.81		0.72		0.62		0.57		0.54

Net interest margin	4.59		4.57		4.61		4.52		4.46


(1)	Annualized.


(2)	Yields are presented on a fully tax-equivalent basis.


(3)	Average yields of debt securities available for sale are based upon historical amortized cost.


(4)	The yield on tax-exempt debt securities available for sale is computed on a tax-equivalent basis using a statutory federal income tax rate of 21% for the first quarter of 2018 and 35% for the fourth, third, second and first quarter of 2017, respectively.



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES⁽¹⁾
(Dollars in thousands, except per-share data)
(Unaudited)
		At Mar. 31,			At Dec. 31,
		2018			2017
Computation of tangible common equity to tangible assets and tangible book value per common share:
Total equity		$	2,550,950		$	2,680,584
Less: Non-controlling interest in subsidiaries		28,437			17,827
Total TCF Financial Corporation stockholders' equity		2,522,513			2,662,757
Less: Preferred stock		169,302			265,821
Total common stockholders' equity	(a)	2,353,211			2,396,936
Less:
Goodwill, net		154,757			154,757
Other intangibles, net		23,112			23,687
Tangible common equity	(b)	$	2,175,342		$	2,218,492

Total assets	(c)	$	23,385,052		$	23,002,159
Less:
Goodwill, net		154,757			154,757
Other intangibles, net		23,112			23,687
Tangible assets	(d)	$	23,207,183		$	22,823,715

Common stock shares outstanding	(e)	169,415,834			171,669,419

Common equity to assets	(a) / (c)	10.06		%	10.42		%
Tangible common equity to tangible assets	(b) / (d)	9.37		%	9.72		%

Book value per common share	(a) / (e)	$	13.89		$	13.96
Tangible book value per common share	(b) / (e)	$	12.84		$	12.92



		Quarter Ended
		Mar. 31,			Dec. 31,			Mar. 31,
		2018			2017			2017
Computation of return on average tangible common equity:
Net income available to common stockholders	(f)	$	66,174		$	97,653		$	41,431
Plus: Goodwill impairment		—			73,041			—
Plus: Other intangibles amortization and impairment		831			1,187			123
Less: Income tax expense attributable to other intangibles amortization and impairment		199			530			42
Adjusted net income available to common stockholders	(g)	$	66,806		$	171,351		$	41,512

Average balances:
Total equity		$	2,580,920		$	2,591,012		$	2,452,886
Less: Non-controlling interest in subsidiaries		23,191			20,399			21,131
Total TCF Financial Corporation stockholders' equity		2,557,729			2,570,613			2,431,755
Less: Preferred stock		200,404			265,821			263,240
Average total common stockholders' equity	(h)	2,357,325			2,304,792			2,168,515
Less:
Goodwill, net		154,757			197,734			225,640
Other intangibles, net		23,274			21,901			1,675
Average tangible common equity	(i)	$	2,179,294		$	2,085,157		$	1,941,200

Return on average common equity⁽²⁾	(f) / (h)	11.23		%	16.95		%	7.64		%
Return on average tangible common equity⁽²⁾	(g) / (i)	12.26		%	32.87		%	8.55		%

(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.

###

TCF FINANCIAL CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - April 23, 2018

Attached files

TCF FINANCIAL CORP Reports