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	a2q18earningsreleasepres.htm
8-K - 8-K - TCF FINANCIAL CORP	tcf63018form8-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)
Timothy Sedabres	(952) 745-2766	investor@tcfbank.com	(Investors)

TCF REPORTS QUARTERLY NET INCOME OF $58.7 MILLION

AND DILUTED EARNINGS PER COMMON SHARE OF 34 CENTS

Adjusted diluted earnings per common share of 49 cents,⁽¹⁾

excluding 15 cent per share after-tax impact related to BCFP/OCC settlement

SECOND QUARTER OBSERVATIONS


–	Revenue of $364.9 million, up 6.8 percent from the second quarter of 2017


–	Net interest income of $250.8 million, up 10.4 percent from the second quarter of 2017


–	Net interest margin of 4.67 percent, up 15 basis points from the second quarter of 2017


–	Reported efficiency ratio of 74.55 percent, up 636 basis points from the second quarter of 2017;

adjusted efficiency ratio of 65.78 percent,⁽¹⁾ down 241 basis points from the second quarter of 2017


–	Auto finance portfolio run-off of $596.4 million year-to-date


–	Non-performing assets down 36.0 percent from June 30, 2017


–	Settlement with the Bureau of Consumer Financial Protection ("BCFP") and the Office of the Comptroller of the Currency ("OCC") resulting in a pre-tax charge, including related expenses, of $32.0 million, or 15 cents per share after-tax


–	Reported return on average common equity ("ROACE") of 9.72 percent; adjusted ROACE of 14.11 percent⁽¹⁾


–	Reported return on average tangible common equity ("ROATCE") of 10.65 percent;⁽¹⁾ adjusted ROATCE of 15.39 percent⁽¹⁾


–	Repurchased 2.8 million common shares at a cost of $68.2 million in the second quarter of 2018; repurchased $135.0 million of $150.0 million authorization through June 30, 2018


–	Additional $150.0 million share repurchase authorization approved by TCF's Board of Directors on July 25, 2018



Summary of Financial Results																						Table 1
										Change
(Dollars in thousands, except per-share data)	2Q			1Q			2Q			2Q18 vs			2Q18 vs			YTD			YTD
(Dollars in thousands, except per-share data)	2018			2018			2017			1Q18			2Q17			2018			2017			Change
Net income attributable to TCF	$	58,749		$	73,761		$	60,432		(20.4	)	%	(2.8	)	%	$	132,510		$	106,710		24.2	%
Net interest income	250,799			243,199			227,161			3.1			10.4			493,998			449,275			10.0
Diluted earnings per common share	0.34			0.39			0.33			(12.8	)		3.0			0.73			0.58			25.9
Adjusted diluted earnings per common share⁽¹⁾	0.49			0.39			0.33			25.6			48.5			0.88			0.58			51.7

Financial Ratios⁽²⁾
Return on average assets	1.08		%	1.33		%	1.17		%	(25	)	bps	(9	)	bps	1.20		%	1.03		%	17	bps
ROACE	9.72			11.23			9.96			(151	)		(24	)		10.48			8.82			166
Adjusted ROACE⁽¹⁾	14.11			11.23			9.96			288			415			12.66			8.82			384
ROATCE⁽¹⁾	10.65			12.26			11.15			(161	)		(50	)		11.46			9.87			159
Adjusted ROATCE⁽¹⁾	15.39			12.26			11.15			313			424			13.81			9.87			394
Net interest margin	4.67			4.59			4.52			8			15			4.63			4.49			14
Net charge-offs as a percentage of average loans and leases	0.27			0.29			0.28			(2	)		(1	)		0.28			0.20			8

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

WAYZATA, Minn. (July 27, 2018) - TCF Financial Corporation ("TCF" or the "Company") (NYSE: TCF) today reported net income of $58.7 million for the second quarter of 2018, compared with $60.4 million for the second quarter of 2017 and $73.8 million for the first quarter of 2018. Diluted earnings per common share was 34 cents for the second quarter of 2018 (inclusive of a charge of 15 cents per common share after-tax related to the settlement with the BCFP and OCC), compared with 33 cents for the second quarter of 2017 and 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).

"Our performance in the second quarter was highlighted by strong revenue growth driven by net interest margin expansion, as well as enhanced capital efficiency and the continued reduction of the risk profile of the Company," said Craig R. Dahl, chairman and chief executive officer. "With strong revenue growth and well-controlled core expense growth, we delivered improved core operating leverage while making investments in people and technology that support our strategic initiatives. We benefited from our asset sensitivity again this quarter as higher earning asset yields exceeded increases to our cost of deposits – demonstrating the true value of our core retail deposit franchise as interest rates continue to rise. We continued to run-off our auto finance portfolio as planned, while overall credit metrics improved with lower non-performing asset levels. We also remain focused on driving improved returns on capital and maintaining a disciplined capital management strategy, including our announcement of an additional $150 million share repurchase program. Finally, the resolution of our outstanding litigation with the BCFP removes legacy risk and uncertainty and allows us to remain fully focused on executing our strategy and pursuing business growth opportunities."

Revenue



Total Revenue																						Table 2
										Change
	2Q			1Q			2Q			2Q18 vs			2Q18 vs			YTD			YTD
(Dollars in thousands)	2018			2018			2017			1Q18			2Q17			2018			2017			Change
Total interest income	$	286,323		$	275,262		$	248,517		4.0		%	15.2		%	$	561,585		$	490,824		14.4		%
Total interest expense	35,524			32,063			21,356			10.8			66.3			67,587			41,549			62.7
Net interest income	250,799			243,199			227,161			3.1			10.4			493,998			449,275			10.0
Non-interest income:
Fees and service charges	32,670			30,751			32,733			6.2			(0.2	)		63,421			64,015			(0.9	)
Card revenue	14,962			13,759			14,154			8.7			5.7			28,721			27,304			5.2
ATM revenue	4,933			4,650			5,061			6.1			(2.5	)		9,583			9,736			(1.6	)
Subtotal	52,565			49,160			51,948			6.9			1.2			101,725			101,055			0.7
Gains on sales of auto loans, net	—			—			380			—			(100.0	)		—			3,244			(100.0	)
Gains on sales of consumer real estate loans, net	7,192			9,123			8,980			(21.2	)		(19.9	)		16,315			17,871			(8.7	)
Servicing fee income	7,484			8,295			10,730			(9.8	)		(30.3	)		15,779			22,381			(29.5	)
Subtotal	14,676			17,418			20,090			(15.7	)		(26.9	)		32,094			43,496			(26.2	)
Leasing and equipment finance	42,904			41,847			39,830			2.5			7.7			84,751			68,128			24.4
Other	3,934			3,716			2,795			5.9			40.8			7,650			5,498			39.1
Fees and other revenue	114,079			112,141			114,663			1.7			(0.5	)		226,220			218,177			3.7
Gains (losses) on debt securities, net	24			63			—			(61.9	)		N.M.			87			—			N.M.
Total non-interest income	114,103			112,204			114,663			1.7			(0.5	)		226,307			218,177			3.7
Total revenue	$	364,902		$	355,403		$	341,824		2.7			6.8			$	720,305		$	667,452		7.9

Net interest margin⁽¹⁾	4.67		%	4.59		%	4.52		%	8		bps	15		bps	4.63		%	4.49		%	14		bps
Total non-interest income as a percentage of total revenue	31.3			31.6			33.5			(30	)		(220	)		31.4			32.7			(130	)

N.M. Not Meaningful
(1) Annualized

Total Revenue


•	Total revenue for the second quarter of 2018 increased $23.1 million, or 6.8 percent, from the second quarter of 2017 and $9.5 million, or 2.7 percent, from the first quarter of 2018. The increases from both periods were primarily due to increased net interest income.

Net Interest Income

•

Net interest income for the second quarter of 2018 increased $23.6 million, or 10.4 percent, from the second quarter of 2017 and $7.6 million, or 3.1 percent, from the first quarter of 2018. The increases from both periods were primarily due to increased interest income on loans and leases held for investment and debt securities available for sale, partially offset by an increase in total interest expense.

Total interest income increased $37.8 million, or 15.2 percent, from the second quarter of 2017 primarily due to higher average balances and increased average yields on the variable- and adjustable-rate loan portfolios, as well as increased average yields and higher average balances of leasing and equipment finance loans and leases and higher average balances of debt securities available for sale. These increases were partially offset by lower average balances of auto finance and fixed-rate consumer real estate loans.

Total interest expense increased $14.2 million, or 66.3 percent, from the second quarter of 2017 primarily due to increased average rates and higher average balances of certificates of deposit and long-term borrowings, as well as increased average rates on savings accounts.

Total interest income increased $11.1 million, or 4.0 percent, from the first quarter of 2018 primarily due to increased average yields and higher average balances of the variable- and adjustable-rate loan portfolios, as well as higher average balances of debt securities available for sale. These increases were partially offset by lower average balances of auto finance loans.

Total interest expense increased $3.5 million, or 10.8 percent, from the first quarter of 2018 primarily due to increased average rates and higher average balances of long-term borrowings, as well as increased average rates on deposits.


•	Net interest margin was 4.67 percent for the second quarter of 2018, up 15 basis points from the second quarter of 2017 and 8 basis points from the first quarter of 2018. The increases from both periods were 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 cost of funds.

Non-interest Income

•

Non-interest income for the second quarter of 2018 was consistent with the second quarter of 2017 and increased $1.9 million, or 1.7 percent, from the first quarter of 2018. Non-interest income for the second quarter of 2018 was consistent with the second quarter of 2017 primarily due to decreases in servicing fee income and gains on sales of consumer real estate loans, mostly offset by increases in leasing and equipment finance non-interest income, other non-interest income and card revenue. The increase from the first quarter of 2018 was primarily due to increases in fees and service charges, card revenue and leasing and equipment finance non-interest income, partially offset by decreases in gains on sales of consumer real estate loans and servicing fee income.


•	TCF sold $181.7 million, $273.4 million and $266.3 million of consumer real estate loans during the second quarters of 2018 and 2017 and the first quarter of 2018, respectively, resulting in net gains of $7.2 million, $9.0 million and $9.1 million, respectively.

•

Servicing fee income was $7.5 million on $4.1 billion of average loans and leases serviced for others for the second quarter of 2018, compared with $10.7 million on $5.3 billion for the second quarter of 2017 and $8.3 million on $4.5 billion for the first quarter of 2018. 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 $5.6 million of total servicing fee income for the second quarter of 2018, compared with $8.7 million and $6.4 million for the second quarter of 2017 and the first quarter of 2018, respectively. Servicing fee income on consumer real estate loans serviced for others comprised $1.5 million of total servicing fee income for the second quarter of 2018, compared with $1.7 million and $1.5 million for the second quarter of 2017 and the first quarter of 2018, respectively.

•

Leasing and equipment finance non-interest income for the second quarter of 2018 increased $3.1 million, or 7.7 percent, from the second quarter of 2017 and $1.1 million, or 2.5 percent, from the first quarter of 2018. The increases from both periods were primarily due to an increase in operating lease revenue, partially offset by a decrease in sales-type lease revenue due to customer-driven events.

Loans and Leases



Period-End and Average Loans and Leases																	Table 3
							Change
	2Q		1Q		2Q		2Q18 vs			2Q18 vs			YTD		YTD
(Dollars in thousands)	2018		2018		2017		1Q18			2Q17			2018		2017		Change
Period-End:
Consumer real estate:
First mortgage lien	$	1,800,885	$	1,878,441	$	2,070,385	(4.1	)	%	(13.0	)	%
Junior lien	2,830,029		2,843,221		2,701,592		(0.5	)		4.8
Total consumer real estate	4,630,914		4,721,662		4,771,977		(1.9	)		(3.0	)
Commercial	3,706,401		3,678,181		3,488,725		0.8			6.2
Leasing and equipment finance	4,648,049		4,666,239		4,333,735		(0.4	)		7.3
Inventory finance	3,005,165		3,457,855		2,509,485		(13.1	)		19.8
Auto finance	2,603,260		2,839,363		3,243,144		(8.3	)		(19.7	)
Other	20,957		19,854		19,459		5.6			7.7
Total	$	18,614,746	$	19,383,154	$	18,366,525	(4.0	)		1.4

Average:
Consumer real estate:
First mortgage lien	$	1,836,600	$	1,918,677	$	2,117,138	(4.3	)	%	(13.3	)	%	$	1,877,412	$	2,177,136	(13.8	)	%
Junior lien	2,904,999		2,879,995		2,628,980		0.9			10.5			2,892,565		2,709,642		6.8
Total consumer real estate	4,741,599		4,798,672		4,746,118		(1.2	)		(0.1	)		4,769,977		4,886,778		(2.4	)
Commercial	3,702,521		3,601,020		3,417,052		2.8			8.4			3,652,051		3,360,287		8.7
Leasing and equipment finance	4,639,703		4,690,868		4,277,376		(1.1	)		8.5			4,665,144		4,281,636		9.0
Inventory finance	3,299,996		3,128,290		2,723,340		5.5			21.2			3,214,618		2,710,137		18.6
Auto finance	2,695,943		3,020,187		3,149,974		(10.7	)		(14.4	)		2,857,169		2,933,620		(2.6	)
Other	13,845		14,446		10,235		(4.2	)		35.3			14,145		9,989		41.6
Total	$	19,093,607	$	19,253,483	$	18,324,095	(0.8	)		4.2			$	19,173,104	$	18,182,447	5.4

•

Period-end loans and leases were $18.6 billion at June 30, 2018, an increase of $248.2 million, or 1.4 percent, from June 30, 2017 and a decrease of $768.4 million, or 4.0 percent, from March 31, 2018. Average loans and leases were $19.1 billion for the second quarter of 2018, an increase of $769.5 million, or 4.2 percent, from the second quarter of 2017 and a decrease of $159.9 million, or 0.8 percent, from the first quarter of 2018.

The increases in period-end loans and leases from June 30, 2017 and average loans and leases from the second quarter of 2017 were primarily due to increases in the inventory finance, leasing and equipment finance, and commercial portfolios, partially offset by a decrease in the auto finance portfolio. The increases in the inventory finance portfolio were primarily due to growth with existing customers through new manufacturer products, additional dealers and increased customer sales, as well as the addition of new exclusive programs. 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 increases in the commercial portfolio were primarily due to strong originations. The decreases in the auto finance portfolio were primarily attributable to the discontinuation of auto finance loan originations and run-off in the portfolio.

The decrease from March 31, 2018 for period-end loans and leases was primarily due to a seasonal decrease in the inventory finance portfolio and decreases in the auto finance and consumer real estate portfolios. The decrease in the auto finance portfolio was primarily due to run-off. The decrease in the consumer real estate portfolio was primarily due to the transfer of consumer real estate loans to held for sale and run-off in the first mortgage lien portfolio. The decrease from the first quarter of 2018 for average loans and leases was primarily due to run-off in the auto finance and consumer real estate first mortgage lien portfolios, partially offset by increases in the inventory finance and commercial portfolios. The increase in the inventory finance portfolio was primarily due to seasonally higher balances and the increase in the commercial portfolio was primarily due to strong originations.

•

Loan and lease originations were $4.0 billion for the second quarter of 2018, a decrease of $35.2 million, or 0.9 percent, from the second quarter of 2017 and an increase of $242.4 million, or 6.4 percent, from the first quarter of 2018. The decrease from the second quarter of 2017 was primarily due to the discontinuation of auto finance originations and decreased consumer real estate originations, partially offset by higher inventory finance and commercial originations. The increase from the first quarter of 2018 was primarily due to higher consumer real estate, leasing and equipment finance and commercial originations.

Credit Quality



Credit Trends																			Table 4
																Change
	2Q			1Q			4Q			3Q			2Q			2Q18 vs			2Q18 vs
(Dollars in thousands)	2018			2018			2017			2017			2017			1Q18			2Q17
Over 60-day delinquencies as a percentage of period-end loans and leases⁽¹⁾	0.11		%	0.10		%	0.12		%	0.13		%	0.11		%	1		bps	—		bps
Net charge-offs as a percentage of average loans and leases^{(2), (3)}	0.27			0.29			0.38			0.18			0.28			(2	)		(1	)
Non-accrual loans and leases and other real estate owned	$	101,125		$	143,607		$	136,807		$	146,024		$	158,000		(29.6	)	%	(36.0	)	%
Provision for credit losses	14,236			11,368			22,259			14,545			19,446			25.2			(26.8	)

(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.

•

The over 60-day delinquency rate, excluding non-accrual loans and leases, was 0.11 percent at June 30, 2018, consistent with the June 30, 2017 rate and up 1 basis point from the March 31, 2018 rate. The over 60-day delinquency rate, excluding non-accrual loans and leases, at June 30, 2018 was consistent with the June 30, 2017 rate primarily due to higher delinquencies in the auto finance portfolio, mostly offset by lower delinquencies in the first mortgage lien consumer real estate portfolio. The increase from March 31, 2018 was primarily due to higher delinquencies in the auto finance portfolio.

•

The net charge-off rate was 0.27 percent for the second quarter of 2018, down 1 basis point from the second quarter of 2017 and 2 basis points from the first quarter of 2018. The decrease from the second quarter of 2017 was primarily due to decreased net charge-offs in the commercial portfolio, offset by increased net charge-offs in the auto finance and leasing and equipment finance portfolios. The decrease from the first quarter of 2018 was primarily due to decreased net charge-offs in the auto finance portfolio, partially offset by increased net charge-offs in the leasing and equipment finance portfolio.

•

Non-accrual loans and leases and other real estate owned were $101.1 million at June 30, 2018, a decrease of $56.9 million, or 36.0 percent, from June 30, 2017 and $42.5 million, or 29.6 percent, from March 31, 2018. Non-accrual loans and leases were $84.9 million at June 30, 2018, a decrease of $44.4 million, or 34.4 percent, from June 30, 2017 and $41.6 million, or 32.9 percent, from March 31, 2018. The decrease from June 30, 2017 was primarily due to the transfer of $36.7 million of consumer real estate non-accrual loans to held for sale in the second quarter of 2018 and 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 and commercial portfolios. The decrease from March 31, 2018 was primarily due to the transfer of consumer real estate non-accrual loans to held for sale, as well as a decrease in non-accrual loans and leases in the leasing and equipment finance portfolio. Other real estate owned was $16.3 million at June 30, 2018, a decrease of $12.5 million, or 43.4 percent, from June 30, 2017 and $0.9 million, or 5.3 percent, from March 31, 2018. The decreases from both periods were primarily due to sales of consumer real estate properties outpacing additions, with the decrease from June 30, 2017 also due to sales of commercial real estate properties.

•

Provision for credit losses was $14.2 million for the second quarter of 2018, a decrease of $5.2 million, or 26.8 percent, from the second quarter of 2017 and an increase of $2.9 million, or 25.2 percent, from the first quarter of 2018. The decrease from the second quarter of 2017 was primarily due to run-off in the auto finance portfolio, partially offset by an increase in the provision for credit losses attributable to the inventory finance portfolio. The increase from the first quarter of 2018 was primarily due to increased reserve requirements in the commercial and auto finance portfolios, partially offset by a decrease in consumer real estate due to decreased reserve requirements, as well as seasonal decreases in the inventory finance portfolio.

Deposits



Average Deposits																						Table 5
										Change
	2Q			1Q			2Q			2Q18 vs			2Q18 vs			YTD			YTD
(Dollars in thousands)	2018			2018			2017			1Q18			2Q17			2018			2017			Change
Checking	$	6,325,042		$	6,192,310		$	6,012,235		2.1		%	5.2		%	$	6,259,043		$	5,963,488		5.0		%
Savings	5,557,280			5,410,652			4,822,338			2.7			15.2			5,484,371			4,798,198			14.3
Money market	1,572,560			1,698,064			2,221,807			(7.4	)		(29.2	)		1,634,965			2,303,129			(29.0	)
Certificates of deposit	4,909,422			4,998,133			4,266,488			(1.8	)		15.1			4,953,533			4,150,460			19.3
Total average deposits	$	18,364,304		$	18,299,159		$	17,322,868		0.4			6.0			$	18,331,912		$	17,215,275		6.5

Average interest rate on deposits⁽¹⁾	0.52		%	0.50		%	0.33		%	2		bps	19		bps	0.51		%	0.33		%	18		bps

(1) Annualized

•

Total average deposits for the second quarter of 2018 increased $1.0 billion, or 6.0 percent, from the second quarter of 2017 and $65.1 million, or 0.4 percent, from the first quarter of 2018. The increase from the second quarter of 2017 was primarily due to higher average balances of savings accounts, certificates of deposit and checking accounts, partially offset by lower average balances of money market accounts. The increase from the first quarter of 2018 was primarily due to higher average balances of savings 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 second quarter of 2018 was 0.52 percent, up 19 basis points from the second quarter of 2017 and 2 basis points from the first quarter of 2018. The increase from the second quarter of 2017 was primarily due to increased average rates on certificates of deposit, savings accounts and money market accounts as a result of interest rate increases. The increase from the first quarter of 2018 was primarily due to increased average rates on money market accounts and certificates of deposit.

Non-interest Expense



Non-interest Expense																						Table 6
										Change
	2Q			1Q			2Q			2Q18 vs			2Q18 vs			YTD			YTD
(Dollars in thousands)	2018			2018			2017			1Q18			2Q17			2018			2017			Change
Compensation and employee benefits	$	120,575		$	123,840		$	115,630		(2.6	)	%	4.3		%	$	244,415		$	239,928		1.9		%
Occupancy and equipment	40,711			40,514			38,965			0.5			4.5			81,225			78,565			3.4
Other	89,084			58,819			61,363			51.5			45.2			147,903			125,579			17.8
Subtotal	250,370			223,173			215,958			12.2			15.9			473,543			444,072			6.6
Operating lease depreciation	17,945			17,274			12,466			3.9			44.0			35,219			23,708			48.6
Foreclosed real estate and repossessed assets, net	3,857			4,916			4,639			(21.5	)		(16.9	)		8,773			9,188			(4.5	)
Other credit costs, net	(133		)	617			24			N.M.			N.M.			484			125			N.M.
Total non-interest expense	$	272,039		$	245,980		$	233,087		10.6			16.7			$	518,019		$	477,093		8.6

Efficiency ratio	74.55		%	69.21		%	68.19		%	534		bps	636		bps	71.92		%	71.48		%	44		bps
Adjusted efficiency ratio⁽¹⁾	65.78			69.21			68.19			(343	)		(241	)		67.47			71.48			(401	)

N.M. Not Meaningful
(1) See "Reconciliation of GAAP to Non-GAAP Financial Measures" tables

•

Non-interest expense for the second quarter of 2018 increased $39.0 million, or 16.7 percent, from the second quarter of 2017 and $26.1 million, or 10.6 percent, from the first quarter of 2018. The increase from the second quarter of 2017 was primarily due to increases in other non-interest expense, operating lease depreciation and compensation and employee benefits expense. The increase from the first quarter of 2018 was primarily due to an increase in other non-interest expense, partially offset by a decrease in compensation and employee benefits expense.

•

Compensation and employee benefits expense for the second quarter of 2018 increased $4.9 million, or 4.3 percent, from the second quarter of 2017 and decreased $3.3 million, or 2.6 percent, from the first quarter of 2018. The increase from the second quarter of 2017 was primarily due to higher salaries, commissions and incentive compensation, as well as higher medical claims expense, partially offset by lower headcount in the auto finance business. The decrease from the first quarter of 2018 was primarily due to seasonality of payroll taxes, partially offset by higher commissions expense.

•

Other non-interest expense for the second quarter of 2018 increased $27.7 million, or 45.2 percent, from the second quarter of 2017 and $30.3 million, or 51.5 percent, from the first quarter of 2018. The increase from the second quarter of 2017 was primarily due to the settlement with the BCFP/OCC of $32.0 million, comprised of $25.0 million of restitution, $5.0 million in penalties and $2.0 million of related expenses, partially offset by decreases in professional fees and loan and lease processing expense. The increase from the first quarter of 2018 was primarily due to the settlement with the BCFP/OCC, partially offset by decreases in severance expense and professional fees.


•	Operating lease depreciation for the second quarter of 2018 increased $5.5 million, or 44.0 percent, from the second quarter of 2017 and was consistent with the first quarter of 2018. The increase from the second quarter of 2017 was primarily due to an increase in 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 20.9 percent for the second quarter of 2018, compared with 28.9 percent for the second quarter of 2017 and 22.1 percent for the first quarter of 2018. The lower effective tax rate from the second quarter of 2017 was primarily due to changes in the corporate statutory tax rate as a result of the Tax Cuts and Jobs Act ("Tax Reform"). The effective income tax rate for the second quarter of 2018 included a net discrete income tax benefit of $1.8 million primarily related to the one-time finalization of the provisional amounts recorded for the year ended December 31, 2017 related to Tax Reform and excess tax benefits related to vesting of stock based compensation. Tax benefits related to stock compensation will fluctuate throughout the year based on the Company's stock price and the vesting of stock based compensation.

Capital



Capital Information				Table 7
	At Jun. 30,			At Jun. 30,
(Dollars in thousands, except per-share data)	2018			2017
Total equity	$	2,504,578		$	2,549,831
Book value per common share	13.79			13.20
Tangible book value per common share⁽¹⁾	12.73			11.74
Common equity ratio	9.97		%	10.26		%
Tangible common equity ratio⁽¹⁾	9.28			9.24

Regulatory Capital:⁽²⁾
Common equity Tier 1 capital	$	2,186,528		$	2,036,369
Tier 1 capital	2,375,210			2,317,915
Total capital	2,728,076			2,683,319

Regulatory Capital Ratios:⁽²⁾
Common equity Tier 1 capital ratio	10.60		%	10.24		%
Tier 1 risk-based capital ratio	11.51			11.66
Total risk-based capital ratio	13.22			13.49
Tier 1 leverage ratio	10.31			10.76

(1) See "Reconciliation of GAAP to Non-GAAP Financial Measures" tables
(2) The regulatory capital and regulatory capital ratios at June 30, 2018 are preliminary pending completion and filing of the Company's regulatory reports.


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

•

TCF repurchased $68.2 million of its common stock during the second quarter of 2018 pursuant to its share repurchase program. At June 30, 2018, TCF had the authority to repurchase an additional $15.0 million in aggregate value of shares pursuant to its existing share repurchase program. On July 25, 2018, TCF's Board of Directors approved a new authorization to repurchase up to an additional $150.0 million of TCF common stock.

•

On July 25, 2018, TCF's Board of Directors declared a regular quarterly cash dividend of 15 cents per common share payable on September 4, 2018, to stockholders of record at the close of business on August 15, 2018. TCF also declared dividends on the 5.70% Series C non-cumulative perpetual preferred stock, payable on September 4, 2018, to stockholders of record at the close of business on August 15, 2018.

Webcast Information

A live webcast of TCF's conference call to discuss the second quarter earnings will be hosted at TCF's website, http://ir.tcfbank.com, on July 27, 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 June 30, 2018, TCF had $23.2 billion in total assets and 315 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 BCFP 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 Risks. 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. 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; 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.

Use of Non-GAAP Financial Measures

Management uses the adjusted diluted earnings per common share and adjusted efficiency ratio internally to measure performance and believes that these financial measures not recognized under generally accepted accounting principles in the United States ("GAAP") (i.e. non-GAAP) provide meaningful information to investors that will permit them to assess the performance of the Company on the same basis as that applied by management and analysts. Adjusted diluted earnings per common share is calculated by excluding the amounts related to the settlement with the BCFP/OCC from earnings allocated to common stock used to calculate diluted earnings per common share. The adjusted efficiency ratio is calculated by also excluding the amount related to the settlement with the BCFP/OCC from total non-interest expense used to calculate the efficiency ratio. TCF believes that the exclusion of this adjustment provides a meaningful base for period-to-period comparisons, which management believes will assist investors in analyzing the operating results of the Company and predicting future performance because management does not believe that activities related to the adjustment will recur.

Management utilizes the tangible common equity ratio, tangible book value per common share, adjusted ROACE ratio, ROATCE ratio and adjusted ROATCE ratio internally to measure performance and believes that these non-GAAP financial measures provide meaningful information to investors that will permit them to assess the Company's capital and ability to withstand unexpected market or economic conditions and to assess the performance of the Company in relation to other banking institutions on the same basis as that applied by management, analysts and banking regulators. These measures exclude equity attributable to non-controlling interests, preferred stock, intangible assets, amortization of other intangibles, where applicable, and in the adjusted ROACE and adjusted ROATCE ratios, the settlement with the BCFP/OCC.

These non-GAAP financial measures are not defined by GAAP and other entities may calculate them differently than TCF does. Non-GAAP financial measures have inherent limitations and are not required to be uniformly applied. Although these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of results as reported under GAAP. In particular, a measure of earnings that excludes selected items does not represent the amount that effectively accrues directly to stockholders.



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

	Quarter Ended June 30,					Change
	2018			2017		$			%
Interest income:
Loans and leases	$	269,280		$	234,092	$	35,188		15.0		%
Debt securities available for sale	12,516			8,052		4,464			55.4
Debt securities held to maturity	998			1,035		(37		)	(3.6	)
Loans held for sale and other	3,529			5,338		(1,809		)	(33.9	)
Total interest income	286,323			248,517		37,806			15.2
Interest expense:
Deposits	23,953			14,436		9,517			65.9
Borrowings	11,571			6,920		4,651			67.2
Total interest expense	35,524			21,356		14,168			66.3
Net interest income	250,799			227,161		23,638			10.4
Provision for credit losses	14,236			19,446		(5,210		)	(26.8	)
Net interest income after provision for credit losses	236,563			207,715		28,848			13.9
Non-interest income:
Fees and service charges	32,670			32,733		(63		)	(0.2	)
Card revenue	14,962			14,154		808			5.7
ATM revenue	4,933			5,061		(128		)	(2.5	)
Subtotal	52,565			51,948		617			1.2
Gains on sales of auto loans, net	—			380		(380		)	(100.0	)
Gains on sales of consumer real estate loans, net	7,192			8,980		(1,788		)	(19.9	)
Servicing fee income	7,484			10,730		(3,246		)	(30.3	)
Subtotal	14,676			20,090		(5,414		)	(26.9	)
Leasing and equipment finance	42,904			39,830		3,074			7.7
Other	3,934			2,795		1,139			40.8
Fees and other revenue	114,079			114,663		(584		)	(0.5	)
Gains (losses) on debt securities, net	24			—		24			N.M.
Total non-interest income	114,103			114,663		(560		)	(0.5	)
Non-interest expense:
Compensation and employee benefits	120,575			115,630		4,945			4.3
Occupancy and equipment	40,711			38,965		1,746			4.5
Other	89,084			61,363		27,721			45.2
Subtotal	250,370			215,958		34,412			15.9
Operating lease depreciation	17,945			12,466		5,479			44.0
Foreclosed real estate and repossessed assets, net	3,857			4,639		(782		)	(16.9	)
Other credit costs, net	(133		)	24		(157		)	N.M.
Total non-interest expense	272,039			233,087		38,952			16.7
Income before income tax expense	78,627			89,291		(10,664		)	(11.9	)
Income tax expense	16,418			25,794		(9,376		)	(36.3	)
Income after income tax expense	62,209			63,497		(1,288		)	(2.0	)
Income attributable to non-controlling interest	3,460			3,065		395			12.9
Net income attributable to TCF Financial Corporation	58,749			60,432		(1,683		)	(2.8	)
Preferred stock dividends	2,494			4,847		(2,353		)	(48.5	)
Net income available to common stockholders	$	56,255		$	55,585	$	670		1.2

Earnings per common share:
Basic	$	0.34		$	0.33	$	0.01		3.0		%
Diluted	0.34			0.33		0.01			3.0

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

Average common and common equivalent shares
outstanding (in thousands):
Basic	165,729			168,594		(2,865		)	(1.7	)	%
Diluted	166,858			168,857		(1,999		)	(1.2	)

N.M. Not Meaningful



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

	Six Months Ended June 30,				Change
	2018		2017		$			%
Interest income:
Loans and leases	$	529,655	$	453,640	$	76,015		16.8		%
Debt securities available for sale	22,639		16,032		6,607			41.2
Debt securities held to maturity	2,017		2,315		(298		)	(12.9	)
Loans held for sale and other	7,274		18,837		(11,563		)	(61.4	)
Total interest income	561,585		490,824		70,761			14.4
Interest expense:
Deposits	46,463		28,151		18,312			65.0
Borrowings	21,124		13,398		7,726			57.7
Total interest expense	67,587		41,549		26,038			62.7
Net interest income	493,998		449,275		44,723			10.0
Provision for credit losses	25,604		31,639		(6,035		)	(19.1	)
Net interest income after provision for credit losses	468,394		417,636		50,758			12.2
Non-interest income:
Fees and service charges	63,421		64,015		(594		)	(0.9	)
Card revenue	28,721		27,304		1,417			5.2
ATM revenue	9,583		9,736		(153		)	(1.6	)
Subtotal	101,725		101,055		670			0.7
Gains on sales of auto loans, net	—		3,244		(3,244		)	(100.0	)
Gains on sales of consumer real estate loans, net	16,315		17,871		(1,556		)	(8.7	)
Servicing fee income	15,779		22,381		(6,602		)	(29.5	)
Subtotal	32,094		43,496		(11,402		)	(26.2	)
Leasing and equipment finance	84,751		68,128		16,623			24.4
Other	7,650		5,498		2,152			39.1
Fees and other revenue	226,220		218,177		8,043			3.7
Gains (losses) on debt securities, net	87		—		87			N.M.
Total non-interest income	226,307		218,177		8,130			3.7
Non-interest expense:
Compensation and employee benefits	244,415		239,928		4,487			1.9
Occupancy and equipment	81,225		78,565		2,660			3.4
Other	147,903		125,579		22,324			17.8
Subtotal	473,543		444,072		29,471			6.6
Operating lease depreciation	35,219		23,708		11,511			48.6
Foreclosed real estate and repossessed assets, net	8,773		9,188		(415		)	(4.5	)
Other credit costs, net	484		125		359			N.M.
Total non-interest expense	518,019		477,093		40,926			8.6
Income before income tax expense	176,682		158,720		17,962			11.3
Income tax expense	38,049		46,637		(8,588		)	(18.4	)
Income after income tax expense	138,633		112,083		26,550			23.7
Income attributable to non-controlling interest	6,123		5,373		750			14.0
Net income attributable to TCF Financial Corporation	132,510		106,710		25,800			24.2
Preferred stock dividends	6,600		9,694		(3,094		)	(31.9	)
Impact of preferred stock redemption	3,481		—		3,481			N.M.
Net income available to common stockholders	$	122,429	$	97,016	$	25,413		26.2

Earnings per common share:
Basic	$	0.73	$	0.58	$	0.15		25.9		%
Diluted	0.73		0.58		0.15			25.9

Dividends declared per common share	$	0.30	$	0.15	$	0.15		100.0		%

Average common and common equivalent shares
outstanding (in thousands):
Basic	167,110		168,250		(1,140		)	(0.7	)	%
Diluted	168,465		168,615		(150		)	(0.1	)

N.M. Not Meaningful



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

	Quarter Ended June 30,						Change
	2018			2017			$			%
Net income attributable to TCF Financial Corporation	$	58,749		$	60,432		$	(1,683	)	(2.8	)	%
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on debt securities available for sale and interest-only strips	(4,806		)	12,341			(17,147		)	N.M.
Net unrealized gains (losses) on net investment hedges	3,779			(1,149		)	4,928			N.M.
Foreign currency translation adjustment	(4,925		)	2,007			(6,932		)	N.M.
Recognized postretirement prior service cost	(8		)	(7		)	(1		)	(14.3	)
Total other comprehensive income (loss), net of tax	(5,960		)	13,192			(19,152		)	N.M.
Comprehensive income	$	52,789		$	73,624		$	(20,835	)	(28.3	)

	Six Months Ended June 30,						Change
	2018			2017			$			%
Net income attributable to TCF Financial Corporation	$	132,510		$	106,710		$	25,800		24.2		%
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on debt securities available for sale and interest-only strips	(32,625		)	15,110			(47,735		)	N.M.
Net unrealized gains (losses) on net investment hedges	5,383			(1,462		)	6,845			N.M.
Foreign currency translation adjustment	(7,035		)	2,588			(9,623		)	N.M.
Recognized postretirement prior service cost	(17		)	(14		)	(3		)	(21.4	)
Total other comprehensive income (loss), net of tax	(34,294		)	16,222			(50,516		)	N.M.
Comprehensive income	$	98,216		$	122,932		$	(24,716	)	(20.1	)
N.M. Not Meaningful



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

	At Jun. 30,			At Dec. 31,			Change
	2018			2017			$			%
ASSETS:
Cash and due from banks	$	581,876		$	621,782		$	(39,906	)	(6.4	)	%
Investments	95,661			82,644			13,017			15.8
Debt securities held to maturity	155,962			161,576			(5,614		)	(3.5	)
Debt securities available for sale	2,249,784			1,709,018			540,766			31.6
Loans and leases held for sale	291,871			134,862			157,009			116.4
Loans and leases:
Consumer real estate:
First mortgage lien	1,800,885			1,959,387			(158,502		)	(8.1	)
Junior lien	2,830,029			2,860,309			(30,280		)	(1.1	)
Total consumer real estate	4,630,914			4,819,696			(188,782		)	(3.9	)
Commercial	3,706,401			3,561,193			145,208			4.1
Leasing and equipment finance	4,648,049			4,761,661			(113,612		)	(2.4	)
Inventory finance	3,005,165			2,739,754			265,411			9.7
Auto finance	2,603,260			3,199,639			(596,379		)	(18.6	)
Other	20,957			22,517			(1,560		)	(6.9	)
Total loans and leases	18,614,746			19,104,460			(489,714		)	(2.6	)
Allowance for loan and lease losses	(165,619		)	(171,041		)	5,422			3.2
Net loans and leases	18,449,127			18,933,419			(484,292		)	(2.6	)
Premises and equipment, net	430,956			421,549			9,407			2.2
Goodwill, net	154,757			154,757			—			—
Other assets	774,468			782,552			(8,084		)	(1.0	)
Total assets	$	23,184,462		$	23,002,159		$	182,303		0.8
LIABILITIES AND EQUITY:
Deposits:
Checking	$	6,408,174		$	6,300,127		$	108,047		1.7		%
Savings	5,570,979			5,287,606			283,373			5.4
Money market	1,562,008			1,764,998			(202,990		)	(11.5	)
Certificates of deposit	4,822,112			4,982,271			(160,159		)	(3.2	)
Total deposits	18,363,273			18,335,002			28,271			0.2
Short-term borrowings	761			—			761			N.M.
Long-term borrowings	1,554,569			1,249,449			305,120			24.4
Total borrowings	1,555,330			1,249,449			305,881			24.5
Accrued expenses and other liabilities	761,281			737,124			24,157			3.3
Total liabilities	20,679,884			20,321,575			358,309			1.8
Equity:
Preferred stock, par value $0.01 per share, 30,000,000 shares authorized;
7,000 and 4,007,000 shares issued	169,302			265,821			(96,519		)	(36.3	)
Common stock, par value $0.01 per share, 280,000,000 shares authorized;
173,522,007 and 172,158,449 shares issued	1,735			1,722			13			0.8
Additional paid-in capital	877,364			877,217			147			—
Retained earnings, subject to certain restrictions	1,649,449			1,577,311			72,138			4.6
Accumulated other comprehensive income (loss)	(52,811		)	(18,517		)	(34,294		)	(185.2	)
Treasury stock at cost, 5,837,036 and 489,030 shares and other	(164,107		)	(40,797		)	(123,310		)	N.M.
Total TCF Financial Corporation stockholders' equity	2,480,932			2,662,757			(181,825		)	(6.8	)
Non-controlling interest in subsidiaries	23,646			17,827			5,819			32.6
Total equity	2,504,578			2,680,584			(176,006		)	(6.6	)
Total liabilities and equity	$	23,184,462		$	23,002,159		$	182,303		0.8

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 Jun. 30,		At Mar. 31,		At Dec. 31,		At Sep. 30,		At Jun. 30,		Mar. 31,			Jun. 30,
	2018		2018		2017		2017		2017		2018			2017
Consumer real estate:
First mortgage lien	0.20	%	0.23	%	0.25	%	0.32	%	0.31	%	(3	)	bps	(11	)	bps
Junior lien	0.07		0.06		0.04		0.05		0.05		1			2
Total consumer real estate	0.12		0.13		0.13		0.15		0.16		(1	)		(4	)
Commercial	—		—		—		—		—		—			—
Leasing and equipment finance	0.11		0.11		0.14		0.15		0.14		—			(3	)
Inventory finance	—		—		0.01		0.01		0.01		—			(1	)
Auto finance	0.33		0.24		0.28		0.25		0.20		9			13
Other	0.16		0.24		0.04		0.07		0.30		(8	)		(14	)
Subtotal	0.11		0.09		0.11		0.12		0.11		2			—
Portfolios acquired with deteriorated credit quality	13.48		12.95		13.18		9.42		—		53			1,348
Total delinquencies	0.11		0.10		0.12		0.13		0.11		1			—


(1)	Excludes non-accrual loans and leases



Net Charge-Offs as a Percentage of Average Loans and Leases

	Quarter Ended⁽¹⁾										Change from
	Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,			Jun. 30,
	2018		2018		2017		2017		2017		2018			2017
Consumer real estate:
First mortgage lien	0.16	%	0.16	%	0.18	%	(0.16	)%	0.15	%	—		bps	1		bps
Junior lien	0.01		0.05		(0.03	)	(0.38	)	0.05		(4	)		(4	)
Total consumer real estate	0.07		0.09		0.05		(0.29	)	0.09		(2	)		(2	)
Commercial	—		—		(0.04	)	(0.02	)	0.29		—			(29	)
Leasing and equipment finance	0.18		0.11		0.41		0.10		0.14		7			4
Inventory finance	0.06		0.05		0.15		0.08		0.09		1			(3	)
Auto finance	1.26		1.41		1.36		1.13		0.83		(15	)		43
Other	N.M.		N.M.		N.M.		N.M.		N.M.		N.M.			N.M.
Total	0.27		0.29		0.38		0.18		0.28		(2	)		(1	)

N.M. Not Meaningful


(1)	Annualized



Non-Accrual Loans and Leases Rollforward

	Quarter Ended															Change from
	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Jun. 30,
	2018			2018			2017			2017			2017			2018			2017
Balance, beginning of period	$	126,428		$	118,582		$	119,619		$	129,273		$	138,981		$	7,846		$	(12,553	)
Additions	23,101			34,462			32,384			39,094			23,667			(11,361		)	(566		)
Charge-offs	(4,520		)	(3,891		)	(7,636		)	(3,916		)	(6,819		)	(629		)	2,299
Transfers to other assets	(7,686		)	(8,457		)	(9,551		)	(7,308		)	(10,870		)	771			3,184
Transfers to loans and leases held for sale	(36,720		)	—			—			—			—			(36,720		)	(36,720		)
Return to accrual status	(2,982		)	(4,335		)	(2,187		)	(3,559		)	(3,077		)	1,353			95
Payments received	(12,727		)	(10,608		)	(14,412		)	(7,993		)	(11,647		)	(2,119		)	(1,080		)
Sales	—			—			—			(25,924		)	(892		)	—			892
Other, net	(35		)	675			365			(48		)	(70		)	(710		)	35
Balance, end of period	$	84,859		$	126,428		$	118,582		$	119,619		$	129,273		$	(41,569	)	$	(44,414	)



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

Other Real Estate Owned Rollforward

	Quarter Ended															Change from
	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Jun. 30,
	2018			2018			2017			2017			2017			2018			2017
Balance, beginning of period	$	17,179		$	18,225		$	26,405		$	28,727		$	31,959		$	(1,046	)	$	(14,780	)
Transferred in	4,476			5,196			5,638			5,685			8,638			(720		)	(4,162		)
Sales	(6,239		)	(7,348		)	(13,395		)	(9,204		)	(11,243		)	1,109			5,004
Writedowns	(638		)	(1,063		)	(1,024		)	(1,345		)	(1,674		)	425			1,036
Other, net⁽¹⁾	1,488			2,169			601			2,542			1,047			(681		)	441
Balance, end of period	$	16,266		$	17,179		$	18,225		$	26,405		$	28,727		$	(913	)	$	(12,461	)


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



Allowance for Loan and Lease Losses

	At Jun. 30,					At Mar. 31,					At Dec. 31,					At Sep. 30,					At Jun. 30,
	2018					2018					2017					2017					2017
				% of					% of					% of					% of				% of
	Balance		Portfolio			Balance		Portfolio			Balance		Portfolio			Balance		Portfolio			Balance		Portfolio
Consumer real estate	$	43,954		0.95	%	$	47,685		1.01	%	$	47,168		0.98	%	$	47,838		0.97	%	$	52,408	1.10	%
Commercial	40,291			1.09		37,198			1.01		37,195			1.04		36,344			1.04		34,669		0.99
Leasing and equipment finance	22,247			0.48		23,182			0.50		22,528			0.47		22,771			0.48		21,922		0.51
Inventory finance	11,840			0.39		13,253			0.38		13,233			0.48		11,978			0.46		12,129		0.48
Auto finance	46,608			1.79		45,822			1.61		50,225			1.57		48,660			1.50		43,893		1.35
Other	679			3.24		563			2.84		692			3.07		653			3.19		599		3.08
Total	$	165,619		0.89		$	167,703		0.87		$	171,041		0.90		$	168,244		0.89		$	165,620	0.90



Changes in Allowance for Loan and Lease Losses

	Quarter Ended															Change from
	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Jun. 30,
	2018			2018			2017			2017			2017			2018			2017
Balance, beginning of period	$	167,703		$	171,041		$	168,244		$	165,620		$	160,166		$	(3,338	)	$	7,537
Charge-offs	(18,188		)	(19,865		)	(23,865		)	(17,999		)	(18,326		)	1,677			138
Recoveries	5,418			5,714			5,580			9,847			5,412			(296		)	6
Net (charge-offs) recoveries	(12,770		)	(14,151		)	(18,285		)	(8,152		)	(12,914		)	1,381			144
Provision for credit losses	14,236			11,368			22,259			14,545			19,446			2,868			(5,210		)
Other	(3,550		)	(555		)	(1,177		)	(3,769		)	(1,078		)	(2,995		)	(2,472		)
Balance, end of period	$	165,619		$	167,703		$	171,041		$	168,244		$	165,620		$	(2,084	)	$	(1	)



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

	Quarter Ended June 30,
	2018						2017
	Average				Yields and		Average				Yields and
	Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾		Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾
ASSETS:
Investments and other	$	309,120	$	2,857	3.71	%	$	259,548	$	2,716	4.20	%
Debt securities held to maturity	155,779		998		2.56		172,322		1,035		2.40
Debt securities available for sale:
Taxable	1,262,642		8,163		2.59		821,744		4,434		2.16
Tax-exempt⁽³⁾	828,131		5,510		2.66		689,667		5,566		3.23
Loans and leases held for sale	45,525		672		5.93		165,859		2,622		6.34
Loans and leases:⁽⁴⁾
Consumer real estate:
Fixed-rate	1,715,289		23,612		5.52		1,963,822		27,679		5.65
Variable- and adjustable-rate	3,026,310		48,331		6.41		2,782,296		39,982		5.76
Total consumer real estate	4,741,599		71,943		6.09		4,746,118		67,661		5.72
Commercial:
Fixed-rate	900,462		10,087		4.49		966,884		11,126		4.62
Variable- and adjustable-rate	2,802,059		38,044		5.45		2,450,168		27,198		4.45
Total commercial	3,702,521		48,131		5.21		3,417,052		38,324		4.50
Leasing and equipment finance	4,639,703		57,236		4.93		4,277,376		47,936		4.48
Inventory finance	3,299,996		57,138		6.94		2,723,340		42,260		6.22
Auto finance	2,695,943		35,632		5.30		3,149,974		39,309		5.01
Other	13,845		143		4.10		10,235		137		5.37
Total loans and leases	19,093,607		270,223		5.67		18,324,095		235,627		5.15
Total interest-earning assets	21,694,804		288,423		5.33		20,433,235		252,000		4.94
Other assets⁽⁵⁾	1,430,621						1,315,495
Total assets	$	23,125,425					$	21,748,730
LIABILITIES AND EQUITY:
Non-interest bearing deposits	$	3,879,048					$	3,473,639
Interest-bearing deposits:
Checking	2,460,709		119		0.02		2,554,563		83		0.01
Savings	5,542,565		3,736		0.27		4,806,371		538		0.04
Money market	1,572,560		2,620		0.67		2,221,807		2,481		0.45
Certificates of deposit	4,909,422		17,478		1.43		4,266,488		11,334		1.07
Total interest-bearing deposits	14,485,256		23,953		0.66		13,849,229		14,436		0.42
Total deposits	18,364,304		23,953		0.52		17,322,868		14,436		0.33
Borrowings:
Short-term borrowings	3,116		18		2.33		6,230		13		0.79
Long-term borrowings	1,531,389		11,553		3.02		1,225,022		6,907		2.26
Total borrowings	1,534,505		11,571		3.02		1,231,252		6,920		2.25
Total interest-bearing liabilities	16,019,761		35,524		0.89		15,080,481		21,356		0.57
Total deposits and borrowings	19,898,809		35,524		0.72		18,554,120		21,356		0.46
Accrued expenses and other liabilities	714,488						673,740
Total liabilities	20,613,297						19,227,860
Total TCF Financial Corp. stockholders' equity	2,483,474						2,494,682
Non-controlling interest in subsidiaries	28,654						26,188
Total equity	2,512,128						2,520,870
Total liabilities and equity	$	23,125,425					$	21,748,730
Net interest income and margin			$	252,899	4.67				$	230,644	4.52


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


(2)	Annualized


(3)	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% and 35% for the quarters ended June 30, 2018 and 2017, respectively.


(4)	Average balances of loans and leases include non-accrual loans and leases and are presented net of unearned income.


(5)	Includes leased equipment and related initial direct costs under operating leases of $288.4 million and $200.7 million for the quarters ended June 30, 2018 and 2017, respectively.



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

	Six Months Ended June 30,
	2018						2017
	Average				Yields and		Average				Yields and
	Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾		Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾
ASSETS:
Investments and other	$	320,655	$	5,633	3.54	%	$	272,959	$	5,463	4.03	%
Debt securities held to maturity	157,450		2,017		2.56		175,115		2,315		2.64
Debt securities available for sale:
Taxable	1,123,017		13,976		2.49		818,821		9,088		2.22
Tax-exempt⁽³⁾	824,906		10,966		2.66		665,382		10,683		3.21
Loans and leases held for sale	54,261		1,641		6.09		314,256		13,374		8.58
Loans and leases:⁽⁴⁾
Consumer real estate:
Fixed-rate	1,750,765		48,225		5.55		2,023,317		56,966		5.67
Variable- and adjustable-rate	3,019,212		94,212		6.29		2,863,461		80,221		5.65
Total consumer real estate	4,769,977		142,437		6.02		4,886,778		137,187		5.66
Commercial:
Fixed-rate	915,784		20,684		4.55		983,508		22,839		4.68
Variable- and adjustable-rate	2,736,267		71,204		5.25		2,376,779		51,589		4.38
Total commercial	3,652,051		91,888		5.07		3,360,287		74,428		4.47
Leasing and equipment finance	4,665,144		113,643		4.87		4,281,636		95,912		4.48
Inventory finance	3,214,618		108,333		6.80		2,710,137		81,711		6.08
Auto finance	2,857,169		74,917		5.29		2,933,620		67,080		4.61
Other	14,145		290		4.13		9,989		268		5.40
Total loans and leases	19,173,104		531,508		5.58		18,182,447		456,586		5.05
Total interest-earning assets	21,653,393		565,741		5.26		20,428,980		497,509		4.90
Other assets⁽⁵⁾	1,442,117						1,289,730
Total assets	$	23,095,510					$	21,718,710
LIABILITIES AND EQUITY:
Non-interest bearing deposits	$	3,812,765					$	3,437,631
Interest-bearing deposits:
Checking	2,461,126		232		0.02		2,542,489		166		0.01
Savings	5,469,523		6,901		0.25		4,781,566		1,039		0.04
Money market	1,634,965		5,029		0.62		2,303,129		5,419		0.47
Certificates of deposit	4,953,533		34,301		1.40		4,150,460		21,527		1.05
Total interest-bearing deposits	14,519,147		46,463		0.65		13,777,644		28,151		0.41
Total deposits	18,331,912		46,463		0.51		17,215,275		28,151		0.33
Borrowings:
Short-term borrowings	3,532		37		2.14		5,434		20		0.73
Long-term borrowings	1,477,531		21,087		2.87		1,341,391		13,378		2.00
Total borrowings	1,481,063		21,124		2.87		1,346,825		13,398		2.00
Total interest-bearing liabilities	16,000,210		67,587		0.85		15,124,469		41,549		0.55
Total deposits and borrowings	19,812,975		67,587		0.69		18,562,100		41,549		0.45
Accrued expenses and other liabilities	736,201						669,544
Total liabilities	20,549,176						19,231,644
Total TCF Financial Corp. stockholders' equity	2,520,396						2,463,393
Non-controlling interest in subsidiaries	25,938						23,673
Total equity	2,546,334						2,487,066
Total liabilities and equity	$	23,095,510					$	21,718,710
Net interest income and margin			$	498,154	4.63				$	455,960	4.49


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


(2)	Annualized


(3)	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% and 35% for the six months ended June 30, 2018 and 2017, respectively.


(4)	Average balances of loans and leases include non-accrual loans and leases and are presented net of unearned income.


(5)	Includes leased equipment and related initial direct costs under operating leases of $285.2 million and $190.5 million for the six months ended June 30, 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
	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,
	2018			2018			2017			2017			2017
Interest income:
Loans and leases	$	269,280		$	260,375		$	256,633		$	243,973		$	234,092
Debt securities available for sale	12,516			10,123			8,760			8,486			8,052
Debt securities held to maturity	998			1,019			1,048			1,073			1,035
Loans held for sale and other	3,529			3,745			4,187			4,073			5,338
Total interest income	286,323			275,262			270,628			257,605			248,517
Interest expense:
Deposits	23,953			22,510			20,846			17,015			14,436
Borrowings	11,571			9,553			7,922			6,487			6,920
Total interest expense	35,524			32,063			28,768			23,502			21,356
Net interest income	250,799			243,199			241,860			234,103			227,161
Provision for credit losses	14,236			11,368			22,259			14,545			19,446
Net interest income after provision for credit losses	236,563			231,831			219,601			219,558			207,715
Non-interest income:
Fees and service charges	32,670			30,751			33,267			34,605			32,733
Card revenue	14,962			13,759			14,251			14,177			14,154
ATM revenue	4,933			4,650			4,654			5,234			5,061
Subtotal	52,565			49,160			52,172			54,016			51,948
Gains on sales of auto loans, net	—			—			2,216			—			380
Gains on sales of consumer real estate loans, net	7,192			9,123			11,407			8,049			8,980
Servicing fee income	7,484			8,295			9,000			9,966			10,730
Subtotal	14,676			17,418			22,623			18,015			20,090
Leasing and equipment finance	42,904			41,847			42,831			34,080			39,830
Other	3,934			3,716			3,218			2,930			2,795
Fees and other revenue	114,079			112,141			120,844			109,041			114,663
Gains (losses) on debt securities, net	24			63			48			189			—
Total non-interest income	114,103			112,204			120,892			109,230			114,663
Non-interest expense:
Compensation and employee benefits	120,575			123,840			127,630			114,954			115,630
Occupancy and equipment	40,711			40,514			39,578			38,766			38,965
Other	89,084			58,819			159,019			61,581			61,363
Subtotal	250,370			223,173			326,227			215,301			215,958
Operating lease depreciation	17,945			17,274			16,497			15,696			12,466
Foreclosed real estate and repossessed assets, net	3,857			4,916			4,739			3,829			4,639
Other credit costs, net	(133		)	617			343			209			24
Total non-interest expense	272,039			245,980			347,806			235,035			233,087
Income (loss) before income tax expense (benefit)	78,627			98,055			(7,313		)	93,753			89,291
Income tax expense (benefit)	16,418			21,631			(110,965		)	30,704			25,794
Income after income tax expense (benefit)	62,209			76,424			103,652			63,049			63,497
Income attributable to non-controlling interest	3,460			2,663			2,253			2,521			3,065
Net income attributable to TCF Financial Corporation	58,749			73,761			101,399			60,528			60,432
Preferred stock dividends	2,494			4,106			3,746			6,464			4,847
Impact of preferred stock redemption	—			3,481			—			5,779			—
Net income available to common stockholders	$	56,255		$	66,174		$	97,653		$	48,285		$	55,585

Earnings per common share:
Basic	$	0.34		$	0.39		$	0.58		$	0.29		$	0.33
Diluted	0.34			0.39			0.57			0.29			0.33

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

Financial highlights:⁽¹⁾
Return on average assets	1.08		%	1.33		%	1.82		%	1.15		%	1.17		%
Return on average common equity	9.72			11.23			16.95			8.44			9.96
Net interest margin	4.67			4.59			4.57			4.61			4.52


(1)	Annualized



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED QUARTERLY AVERAGE BALANCE SHEETS
(In thousands)
(Unaudited)
	Quarter Ended
	Jun. 30, 2018		Mar. 31, 2018		Dec. 31, 2017		Sep. 30, 2017		Jun. 30, 2017
ASSETS:
Investments and other	$	309,120	$	332,319	$	303,958	$	279,839	$	259,548
Debt securities held to maturity	155,779		159,139		163,080		166,883		172,322
Debt securities available for sale:
Taxable	1,262,642		981,843		831,113		825,192		821,744
Tax-exempt	828,131		821,642		779,964		737,859		689,667
Loans and leases held for sale	45,525		63,095		113,501		96,143		165,859
Loans and leases:⁽¹⁾
Consumer real estate:
Fixed-rate	1,715,289		1,786,636		1,821,240		1,872,607		1,963,822
Variable- and adjustable-rate	3,026,310		3,012,036		3,151,183		2,964,493		2,782,296
Total consumer real estate	4,741,599		4,798,672		4,972,423		4,837,100		4,746,118
Commercial:
Fixed-rate	900,462		931,275		963,703		980,262		966,884
Variable- and adjustable-rate	2,802,059		2,669,745		2,573,022		2,493,163		2,450,168
Total commercial	3,702,521		3,601,020		3,536,725		3,473,425		3,417,052
Leasing and equipment finance	4,639,703		4,690,868		4,713,015		4,316,434		4,277,376
Inventory finance	3,299,996		3,128,290		2,688,387		2,479,416		2,723,340
Auto finance	2,695,943		3,020,187		3,267,855		3,280,612		3,149,974
Other	13,845		14,446		13,007		11,567		10,235
Total loans and leases	19,093,607		19,253,483		19,191,412		18,398,554		18,324,095
Total interest-earning assets	21,694,804		21,611,521		21,383,028		20,504,470		20,433,235
Other assets⁽²⁾	1,430,621		1,453,742		1,437,126		1,434,957		1,315,495
Total assets	$	23,125,425	$	23,065,263	$	22,820,154	$	21,939,427	$	21,748,730
LIABILITIES AND EQUITY:
Non-interest bearing deposits	$	3,879,048	$	3,745,745	$	3,570,846	$	3,521,044	$	3,473,639
Interest-bearing deposits:
Checking	2,460,709		2,461,548		2,541,475		2,539,211		2,554,563
Savings	5,542,565		5,395,669		5,140,417		4,846,090		4,806,371
Money market	1,572,560		1,698,064		1,854,442		2,106,814		2,221,807
Certificates of deposit	4,909,422		4,998,133		5,032,085		4,636,007		4,266,488
Total interest-bearing deposits	14,485,256		14,553,414		14,568,419		14,128,122		13,849,229
Total deposits	18,364,304		18,299,159		18,139,265		17,649,166		17,322,868
Borrowings:
Short-term borrowings	3,116		3,952		3,759		6,448		6,230
Long-term borrowings	1,531,389		1,423,075		1,295,268		983,004		1,225,022
Total borrowings	1,534,505		1,427,027		1,299,027		989,452		1,231,252
Total interest-bearing liabilities	16,019,761		15,980,441		15,867,446		15,117,574		15,080,481
Total deposits and borrowings	19,898,809		19,726,186		19,438,292		18,638,618		18,554,120
Accrued expenses and other liabilities	714,488		758,157		790,850		723,792		673,740
Total liabilities	20,613,297		20,484,343		20,229,142		19,362,410		19,227,860
Total TCF Financial Corporation stockholders' equity	2,483,474		2,557,729		2,570,613		2,554,667		2,494,682
Non-controlling interest in subsidiaries	28,654		23,191		20,399		22,350		26,188
Total equity	2,512,128		2,580,920		2,591,012		2,577,017		2,520,870
Total liabilities and equity	$	23,125,425	$	23,065,263	$	22,820,154	$	21,939,427	$	21,748,730


(1)	Average balances of loans and leases include non-accrual loans and leases and are presented net of unearned income.


(2)	Includes leased equipment and related initial direct costs under operating leases of $288.4 million, $281.9 million, $267.8 million, $249.0 million and $200.7 million for the second and first quarters of 2018 and for the fourth, third and second quarters of 2017, respectively.



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED QUARTERLY YIELDS AND RATES⁽¹⁾⁽²⁾
(Unaudited)
	Quarter Ended
	Jun. 30, 2018		Mar. 31, 2018		Dec. 31, 2017		Sep. 30, 2017		Jun. 30, 2017
ASSETS:
Investments and other	3.71	%	3.38	%	3.07	%	3.80	%	4.20	%
Debt securities held to maturity	2.56		2.56		2.57		2.57		2.40
Debt securities available for sale:
Taxable	2.59		2.37		2.25		2.24		2.16
Tax-exempt⁽³⁾	2.66		2.66		3.22		3.22		3.23
Loans and leases held for sale	5.93		6.22		6.43		5.75		6.34
Loans and leases:
Consumer real estate:
Fixed-rate	5.52		5.58		5.61		5.61		5.65
Variable- and adjustable rate	6.41		6.18		5.95		5.91		5.76
Total consumer real estate	6.09		5.96		5.83		5.80		5.72
Commercial:
Fixed-rate	4.49		4.61		5.49		4.62		4.62
Variable- and adjustable-rate	5.45		5.04		4.68		4.76		4.45
Total commercial	5.21		4.93		4.90		4.72		4.50
Leasing and equipment finance	4.93		4.81		4.90		4.53		4.48
Inventory finance	6.94		6.64		6.01		6.71		6.22
Auto finance	5.30		5.28		5.23		5.17		5.01
Other	4.10		4.16		4.75		5.03		5.37
Total loans and leases	5.67		5.49		5.35		5.31		5.15

Total interest-earning assets	5.33		5.19		5.11		5.07		4.94

LIABILITIES:
Interest-bearing deposits:
Checking	0.02		0.02		0.02		0.02		0.01
Savings	0.27		0.24		0.18		0.08		0.04
Money market	0.67		0.58		0.48		0.47		0.45
Certificates of deposit	1.43		1.36		1.28		1.16		1.07
Total interest-bearing deposits	0.66		0.63		0.57		0.48		0.42
Total deposits	0.52		0.50		0.46		0.38		0.33
Borrowings:
Short-term borrowings	2.33		1.99		1.75		1.33		0.79
Long-term borrowings	3.02		2.70		2.43		2.62		2.26
Total borrowings	3.02		2.70		2.43		2.62		2.25

Total interest-bearing liabilities	0.89		0.81		0.72		0.62		0.57

Net interest margin	4.67		4.59		4.57		4.61		4.52


(1)	Annualized


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


(3)	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 second and first quarters of 2018 and 35% for the fourth, third and second quarters of 2017, respectively.



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Dollars in thousands, except per share data)
(Unaudited)
		Quarter Ended									Six Months Ended
		Jun. 30,			Mar. 31,			Jun. 30,			Jun. 30,			Jun. 30,
		2018			2018			2017			2018			2017
Computation of adjusted diluted earnings per common share:
Net income available to common stockholders		$	56,255		$	66,174		$	55,585		$	122,429		$	97,016
Less: Earnings allocated to participating securities		8			9			9			17			17
Earnings allocated to common stock	(a)	56,247			66,165			55,576			122,412			96,999
Plus: BCFP/OCC settlement adjustment		32,000			—			—			32,000			—
Less: Income tax expense attributable to BCFP/OCC settlement adjustment		6,491			—			—			6,491			—
Adjusted earnings allocated to common stock	(b)	$	81,756		$	66,165		$	55,576		$	147,921		$	96,999

Weighted-average common shares outstanding for diluted earnings per common share	(c)	166,857,640			169,997,146			168,857,218			168,464,546			168,615,437

Diluted earnings per common share	(a) / (c)	$	0.34		$	0.39		$	0.33		$	0.73		$	0.58
Adjusted diluted earnings per common share	(b) / (c)	$	0.49		$	0.39		$	0.33		$	0.88		$	0.58

		Quarter Ended									Six Months Ended
		Jun. 30,			Mar. 31,			Jun. 30,			Jun. 30,			Jun. 30,
		2018			2018			2017			2018			2017
Computation of adjusted efficiency ratio:
Total non-interest expense	(d)	$	272,039		$	245,980		$	233,087		$	518,019		$	477,093
Less: BCFP/OCC settlement adjustment		32,000			—			—			32,000			—
Adjusted non-interest expense	(e)	$	240,039		$	245,980		$	233,087		$	486,019		$	477,093

Revenue	(f)	$	364,902		$	355,403		$	341,824		$	720,305		$	667,452

Efficiency ratio	(d) / (f)	74.55		%	69.21		%	68.19		%	71.92		%	71.48		%
Adjusted efficiency ratio	(e) / (f)	65.78		%	69.21		%	68.19		%	67.47		%	71.48		%

											At Jun. 30,			At Jun. 30,
											2018			2017
Computation of tangible common equity ratio and tangible book value per common share:
Total equity											$	2,504,578		$	2,549,831
Less: Non-controlling interest in subsidiaries											23,646			22,766
Total TCF Financial Corporation stockholders' equity											2,480,932			2,527,065
Less: Preferred stock											169,302			263,240
Total common stockholders' equity	(g)										2,311,630			2,263,825
Less:
Goodwill, net											154,757			227,072
Other intangibles, net											22,247			22,682
Tangible common stockholders' equity	(h)										$	2,134,626		$	2,014,071

Total assets	(i)										$	23,184,462		$	22,054,651
Less:
Goodwill, net											154,757			227,072
Other intangibles, net											22,247			22,682
Tangible assets	(j)										$	23,007,458		$	21,804,897

Common stock shares outstanding	(k)										167,684,971			171,489,921

Common equity ratio	(g) / (i)										9.97		%	10.26		%
Tangible common equity ratio	(h) / (j)										9.28		%	9.24		%

Book value per common share	(g) / (k)										$	13.79		$	13.20
Tangible book value per common share	(h) / (k)										$	12.73		$	11.74



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES, CONTINUED
(Dollars in thousands)
(Unaudited)
		Quarter Ended									Six Months Ended
		Jun. 30,			Mar. 31,			Jun. 30,			Jun. 30,			Jun. 30,
		2018			2018			2017			2018			2017
Computation of adjusted return on average tangible common equity, return on average tangible common equity and adjusted return on average common equity:
Net income available to common stockholders	(a)	$	56,255		$	66,174		$	55,585		$	122,429		$	97,016
Plus: Other intangibles amortization		835			831			238			1,666			361
Less: Income tax expense attributable to other intangibles amortization		201			199			83			401			125
Adjusted net income available to common stockholders	(b)	$	56,889		$	66,806		$	55,740		$	123,694		$	97,252

Net income available to common stockholders adjusted for BCFP/OCC settlement:
Net income available to common stockholders		$	56,255		$	66,174		$	55,585		$	122,429		$	97,016
Plus: BCFP/OCC settlement adjustment		32,000			—			—			32,000			—
Less: Income tax expense attributable to BCFP/OCC settlement adjustment		6,491			—			—			6,491			—
Net income available to common stockholders adjusted for BCFP/OCC settlement	(c)	81,764			66,174			55,585			147,938			97,016
Plus: Other intangibles amortization		835			831			238			1,666			361
Less: Income tax expense attributable to other intangibles amortization		201			199			83			401			125
Adjusted net income available to common stockholders adjusted for BCFP/OCC settlement	(d)	$	82,398		$	66,806		$	55,740		$	149,203		$	97,252

Average balances:
Total equity		$	2,512,128		$	2,580,920		$	2,520,870		$	2,546,334		$	2,487,066
Less: Non-controlling interest in subsidiaries		28,654			23,191			26,188			25,938			23,673
Total TCF Financial Corporation stockholders' equity		2,483,474			2,557,729			2,494,682			2,520,396			2,463,393
Less: Preferred stock		169,302			200,404			263,240			184,767			263,240
Average total common stockholders' equity	(e)	2,314,172			2,357,325			2,231,442			2,335,629			2,200,153
Less:
Goodwill, net		154,757			154,757			225,876			154,757			225,759
Other intangibles, net		22,672			23,274			5,045			22,971			3,369
Average tangible common stockholders' equity	(f)	$	2,136,743		$	2,179,294		$	2,000,521		$	2,157,901		$	1,971,025

Average total common stockholders' equity adjusted for BCFP/OCC settlement:
Average total common stockholders' equity		$	2,314,172		$	2,357,325		$	2,231,442		$	2,335,629		$	2,200,153
Plus: BCFP/OCC settlement adjustment to average total common stockholders' equity		4,205			—			—			2,114			—
Average total common stockholders' equity adjusted for BCFP/OCC settlement	(g)	2,318,377			2,357,325			2,231,442			2,337,743			2,200,153
Less:
Goodwill, net		154,757			154,757			225,876			154,757			225,759
Other intangibles, net		22,672			23,274			5,045			22,971			3,369
Adjusted average tangible common stockholders' equity	(h)	$	2,140,948		$	2,179,294		$	2,000,521		$	2,160,015		$	1,971,025

ROACE⁽¹⁾	(a) / (e)	9.72		%	11.23		%	9.96		%	10.48		%	8.82		%
Adjusted ROACE⁽¹⁾	(c) / (g)	14.11		%	11.23		%	9.96		%	12.66		%	8.82		%
ROATCE⁽¹⁾	(b) / (f)	10.65		%	12.26		%	11.15		%	11.46		%	9.87		%
Adjusted ROATCE⁽¹⁾	(d) / (h)	15.39		%	12.26		%	11.15		%	13.81		%	9.87		%
(1) Annualized

###

TCF FINANCIAL CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - July 27, 2018

Attached files

TCF FINANCIAL CORP Reports