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

Attached files

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EX-99.2 - EXHIBIT 99.2 - TCF FINANCIAL CORP	a3q18earningsreleasepres.htm
8-K - 8-K - TCF FINANCIAL CORP	tcf93018form8-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 $86.2 MILLION

AND DILUTED EARNINGS PER COMMON SHARE OF 51 CENTS

Third Quarter Observations


•	Revenue of $365.6 million, up 6.5% from the third quarter of 2017


•	Provision for credit losses of $2.3 million, which was impacted by a $6.6 million recovery on previous charge-offs related to the sale of consumer real estate non-accrual loans


•	Net interest margin of 4.66%, down 1 basis point from the second quarter of 2018, up 5 basis points from the third quarter of 2017


•	Efficiency ratio of 67.41%, down 105 basis points from the third quarter of 2017


•	Average interest-earning asset growth of 4.6% from the third quarter of 2017


•	Period-end loans and leases of $18.4 billion, down 3.0% from September 30, 2017; period-end loans and leases, excluding auto finance, up 2.5%⁽¹⁾ from September 30, 2017


•	Auto finance portfolio run-off of $328.1 million in the third quarter of 2018 and $924.5 million year-to-date


•	Return on average common equity ("ROACE") of 14.44%


•	Return on average tangible common equity ("ROATCE") of 15.76%⁽²⁾


•	Repurchased 0.9 million shares of common stock at a cost of $24.0 million



Summary of Financial Results
	At or For the Quarter Ended															Change From
	Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Sep. 30,
(Dollars in thousands, except per share data)	2018			2018			2018			2017			2017			2018			2017
Net income attributable to TCF	$	86,196		$	58,749		$	73,761		$	101,399		$	60,528		46.7		%	42.4		%
Net interest income	249,121			250,799			243,199			241,860			234,103			(0.7	)		6.4
Basic earnings per common share	0.51			0.34			0.39			0.58			0.29			50.0			75.9
Diluted earnings per common share	0.51			0.34			0.39			0.57			0.29			50.0			75.9
Adjusted diluted earnings per common share⁽²⁾	0.51			0.49			0.39			0.57			0.29			4.1			75.9

Financial Ratios
Return on average assets⁽³⁾	1.55		%	1.08		%	1.33		%	1.82		%	1.15		%	47		bps	40		bps
ROACE⁽³⁾	14.44			9.72			11.23			16.95			8.44			472			600
Adjusted ROACE⁽²⁾⁽³⁾	14.44			14.11			11.23			16.95			8.44			33			600
ROATCE⁽²⁾⁽³⁾	15.76			10.65			12.26			32.87			9.57			511			619
Adjusted ROATCE⁽²⁾⁽³⁾	15.76			15.39			12.26			32.87			9.57			37			619
Net interest margin⁽³⁾	4.66			4.67			4.59			4.57			4.61			(1	)		5
Net charge-offs as a percentage of average loans and leases⁽³⁾	0.15			0.27			0.29			0.38			0.18			(12	)		(3	)
Non-performing assets as a percentage of total loans and leases and other real estate owned	0.59			0.54			0.74			0.72			0.77			5			(18	)
Efficiency ratio	67.41			74.55			69.21			95.88			68.46			(714	)		(105	)
Adjusted efficiency ratio⁽²⁾	67.41			65.78			69.21			95.88			68.46			163			(105	)

(1) Calculated by subtracting auto finance loans of $2.3 billion and $3.2 billion at September 30, 2018 and 2017, respectively, from total loans and leases of $18.4 billion and $19.0 billion at September 30, 2018 and 2017, respectively.

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

(3) Annualized

WAYZATA, Minn. (October 22, 2018) - TCF Financial Corporation ("TCF" or the "Company") (NYSE: TCF) today reported net income of $86.2 million for the third quarter of 2018, compared with $60.5 million for the third quarter of 2017 and $58.7 million for the second quarter of 2018. Diluted earnings per common share was 51 cents for the third quarter of 2018, compared with 29 cents for the third quarter of 2017 and 34 cents for the second quarter of 2018.

"Our strong third quarter financial results were highlighted by positive year-over-year operating leverage and improving returns on capital," said Craig R. Dahl, chairman and chief executive officer. "We produced strong revenue growth with disciplined expense management while continuing to lower the risk profile of the Company. Credit trends remained stable, the auto finance portfolio run-off performed as expected and our mix of interest-earning assets improved as we continued to shift toward increasingly more capital efficient assets. Our commitment to increasing return on capital has shown through in our results and we remain focused on delivering value for shareholders."

Net Interest Income and Net Interest Margin

Net interest income was $249.1 million for the third quarter of 2018, an increase of $15.0 million, or 6.4%, from the third quarter of 2017 and a decrease of $1.7 million, or 0.7%, from the second quarter of 2018. Net interest margin was 4.66% for the third quarter of 2018, up 5 basis points from the third quarter of 2017 and down 1 basis point from the second quarter of 2018. The increases in net interest income and net interest margin from the third quarter of 2017 were primarily due to increased average yields and higher average loan balances in the variable- and adjustable-rate loan portfolios, partially offset by increased cost of funds.

Non-interest Income

Non-interest income was $116.4 million for the third quarter of 2018, an increase of $7.2 million, or 6.6%, from the third quarter of 2017 and an increase of $2.3 million, or 2.1%, from the second quarter of 2018. The increases from both periods were primarily due to increased leasing and equipment finance non-interest income, partially offset by decreased servicing fee income due to the continued run-off in the auto finance serviced for others portfolio.

Non-interest Expense

Non-interest expense was $246.4 million for the third quarter of 2018, an increase of $11.4 million, or 4.8%, from the third quarter of 2017 and a decrease of $25.6 million, or 9.4%, from the second quarter of 2018. The increase from the third quarter of 2017 was primarily due to an increase in compensation and employee benefits expense. The second quarter of 2018 included $32.0 million of expenses related to the settlement with the Bureau of Consumer Financial Protection and the Office of the Comptroller of the Currency.

Income Tax Expense

The Company's effective income tax rate was 24.0% for the third quarter of 2018, compared with 32.7% for the third quarter of 2017 and 20.9% for the second quarter of 2018. The effective income tax rate was primarily impacted by the change in the corporate statutory tax rate as a result of the Tax Cuts and Jobs Act.

Credit Quality

Provision for credit losses The provision for credit losses was $2.3 million for the third quarter of 2018, a decrease of $12.3 million, or 84.4%, from the third quarter of 2017 and a decrease of $12.0 million, or 84.1%, from the second quarter of 2018. The decreases from both periods were primarily due to run-off in and maturation of the auto finance portfolio, as well as the recovery of $6.6 million on previous charge-offs related to the sale of consumer real estate non-accrual loans.

Net charge-off rate The annualized net charge-off rate was 0.15% for the third quarter of 2018, down 3 basis points from the third quarter of 2017 and down 12 basis points from the second quarter of 2018. The decreases from both periods were primarily due to the recovery of $6.6 million on previous charge-offs related to the sale of consumer real estate non-accrual loans, partially offset by the increased auto finance net charge-off rate resulting from a lower average loan balance due to the continued run-off of the portfolio. The annualized net charge-off rate excluding auto finance net charge-offs of $9.5 million and the recovery of $6.6 million on previous charge-offs related to the sale of consumer real estate non-accrual loans was 0.10%.

Over 60-day delinquency rate The over 60-day delinquency rate, excluding non-accrual loans and leases, was 0.12% at September 30, 2018, down 1 basis point from the September 30, 2017 rate and up 1 basis point from the June 30, 2018 rate.

Non-performing assets Non-performing assets, consisting of non-accrual loans and leases and other real estate owned, were $109.4 million at September 30, 2018, a decrease of $36.6 million, or 25.1%, from September 30, 2017 and an increase of $8.3 million, or 8.2%, from June 30, 2018. The decrease from September 30, 2017 was primarily due to the $34.7 million sale of consumer real estate non-accrual loans in the third quarter of 2018.

Balance Sheet

Average debt securities held to maturity and debt securities available for sale The total average debt securities portfolio was $2.5 billion for the third quarter of 2018, an increase of $773.2 million, or 44.7%, from the third quarter of 2017 and an increase of $256.6 million, or 11.4%, from the second quarter of 2018.

Average loans and leases Average loans and leases were $18.4 billion for the third quarter of 2018, an increase of $17.0 million, or 0.1%, from the third quarter of 2017 and a decrease of $678.1 million, or 3.6%, from the second quarter of 2018. The decrease from the second quarter of 2018 was primarily due to the seasonal decrease in the inventory finance portfolio and the continued run-off of the auto finance portfolio. Average loans and leases, excluding auto finance were $16.0 billion, an increase of $861.7 million, or 5.7%, from the third quarter of 2017 and a decrease of $418.0 million, or 2.5%, from the second quarter of 2018.

Average deposits Average deposits were $18.3 billion for the third quarter of 2018, an increase of $637.2 million, or 3.6%, from the third quarter of 2017 and a decrease of $77.9 million, or 0.4%, from the second quarter of 2018.

Capital TCF continues to maintain strong capital ratios, with a common equity Tier 1 capital ratio of 11.04%. TCF repurchased $24.0 million of common stock during the quarter and had the authority to repurchase an additional $141.0 million in aggregate value of shares as of September 30, 2018 pursuant to its share repurchase program.

Webcast Information

A live webcast of TCF's conference call to discuss the third quarter earnings will be hosted at TCF's website, http://ir.tcfbank.com, on October 22, 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 September 30, 2018, TCF had $22.9 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" 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.

Use of Non-GAAP Financial Measures

Management uses the adjusted diluted earnings per common share, adjusted ROACE, ROATCE, adjusted ROATCE, adjusted efficiency ratio, tangible common equity ratio and tangible book value per common share 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 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 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 Financial Condition (Unaudited)

																Change From
(Dollars in thousands)	Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30, 2018					Sep. 30, 2017
(Dollars in thousands)	2018			2018			2018			2017			2017			$			%		$			%
ASSETS:
Cash and due from banks	$	569,968		$	581,876		$	588,893		$	621,782		$	711,734		$	(11,908	)	(2.0	)%	$	(141,766	)	(19.9	)%
Investments	80,672			95,661			91,661			82,644			87,690			(14,989		)	(15.7	)	(7,018		)	(8.0	)
Debt securities held to maturity	152,881			155,962			158,099			161,576			165,315			(3,081		)	(2.0	)	(12,434		)	(7.5	)
Debt securities available for sale	2,379,546			2,249,784			1,954,246			1,709,018			1,598,163			129,762			5.8		781,383			48.9
Loans and leases held for sale	114,198			291,871			50,706			134,862			254,903			(177,673		)	(60.9	)	(140,705		)	(55.2	)
Loans and leases:
Consumer real estate:
First mortgage lien	1,960,756			1,800,885			1,878,441			1,959,387			1,953,199			159,871			8.9		7,557			0.4
Junior lien	2,940,701			2,830,029			2,843,221			2,860,309			2,977,613			110,672			3.9		(36,912		)	(1.2	)
Total consumer real estate	4,901,457			4,630,914			4,721,662			4,819,696			4,930,812			270,543			5.8		(29,355		)	(0.6	)
Commercial	3,741,164			3,706,401			3,678,181			3,561,193			3,489,680			34,763			0.9		251,484			7.2
Leasing and equipment finance	4,601,887			4,648,049			4,666,239			4,761,661			4,730,931			(46,162		)	(1.0	)	(129,044		)	(2.7	)
Inventory finance	2,880,404			3,005,165			3,457,855			2,739,754			2,576,077			(124,761		)	(4.2	)	304,327			11.8
Auto finance	2,275,134			2,603,260			2,839,363			3,199,639			3,240,413			(328,126		)	(12.6	)	(965,279		)	(29.8	)
Other	21,107			20,957			19,854			22,517			20,439			150			0.7		668			3.3
Total loans and leases	18,421,153			18,614,746			19,383,154			19,104,460			18,988,352			(193,593		)	(1.0	)	(567,199		)	(3.0	)
Allowance for loan and lease losses	(160,621		)	(165,619		)	(167,703		)	(171,041		)	(168,244		)	4,998			3.0		7,623			4.5
Net loans and leases	18,260,532			18,449,127			19,215,451			18,933,419			18,820,108			(188,595		)	(1.0	)	(559,576		)	(3.0	)
Premises and equipment, net	429,648			430,956			427,497			421,549			425,112			(1,308		)	(0.3	)	4,536			1.1
Goodwill, net	154,757			154,757			154,757			154,757			227,798			—			—		(73,041		)	(32.1	)
Other assets	762,583			774,468			743,742			782,552			714,215			(11,885		)	(1.5	)	48,368			6.8
Total assets	$	22,904,785		$	23,184,462		$	23,385,052		$	23,002,159		$	23,005,038		$	(279,677	)	(1.2	)	$	(100,253	)	(0.4	)
LIABILITIES AND EQUITY:
Deposits:
Checking	$	6,382,667		$	6,408,174		$	6,541,409		$	6,300,127		$	6,197,608		$	(25,507	)	(0.4	)%	$	185,059		3.0	%
Savings	5,737,144			5,570,979			5,551,155			5,287,606			4,972,529			166,165			3.0		764,615			15.4
Money market	1,504,952			1,562,008			1,609,472			1,764,998			1,965,291			(57,056		)	(3.7	)	(460,339		)	(23.4	)
Certificates of deposit	4,871,748			4,822,112			4,995,636			4,982,271			4,972,058			49,636			1.0		(100,310		)	(2.0	)
Total deposits	18,496,511			18,363,273			18,697,672			18,335,002			18,107,486			133,238			0.7		389,025			2.1
Short-term borrowings	2,324			761			775			—			—			1,563			N.M.		2,324			N.M.
Long-term borrowings	1,168,400			1,554,569			1,457,976			1,249,449			1,382,588			(386,169		)	(24.8	)	(214,188		)	(15.5	)
Total borrowings	1,170,724			1,555,330			1,458,751			1,249,449			1,382,588			(384,606		)	(24.7	)	(211,864		)	(15.3	)
Accrued expenses and other liabilities	709,538			761,281			677,679			737,124			918,450			(51,743		)	(6.8	)	(208,912		)	(22.7	)
Total liabilities	20,376,773			20,679,884			20,834,102			20,321,575			20,408,524			(303,111		)	(1.5	)	(31,751		)	(0.2	)
Equity:
Preferred stock	169,302			169,302			169,302			265,821			265,967			—			—		(96,665		)	(36.3	)
Common stock	1,736			1,735			1,725			1,722			1,719			1			0.1		17			1.0
Additional paid-in capital	882,321			877,364			878,096			877,217			864,632			4,957			0.6		17,689			2.0
Retained earnings, subject to certain restrictions	1,708,410			1,649,449			1,618,041			1,577,311			1,488,966			58,961			3.6		219,444			14.7
Accumulated other comprehensive income (loss)	(65,259		)	(52,811		)	(46,851		)	(18,517		)	(13,809		)	(12,448		)	(23.6	)	(51,450		)	N.M.
Treasury stock at cost and other	(189,652		)	(164,107		)	(97,800		)	(40,797		)	(30,867		)	(25,545		)	(15.6	)	(158,785		)	N.M.
Total TCF Financial Corporation stockholders' equity	2,506,858			2,480,932			2,522,513			2,662,757			2,576,608			25,926			1.0		(69,750		)	(2.7	)
Non-controlling interest in subsidiaries	21,154			23,646			28,437			17,827			19,906			(2,492		)	(10.5	)	1,248			6.3
Total equity	2,528,012			2,504,578			2,550,950			2,680,584			2,596,514			23,434			0.9		(68,502		)	(2.6	)
Total liabilities and equity	$	22,904,785		$	23,184,462		$	23,385,052		$	23,002,159		$	23,005,038		$	(279,677	)	(1.2	)	$	(100,253	)	(0.4	)

N.M. Not Meaningful



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)

	Quarter Ended													Change From
(Dollars in thousands)	Sep. 30,			Jun. 30,			Mar. 31,		Dec. 31,			Sep. 30,		Jun. 30, 2018					Sep. 30, 2017
(Dollars in thousands)	2018			2018			2018		2017			2017		$			%		$			%
Interest income:
Loans and leases	$	264,678		$	269,280		$	260,375	$	256,633		$	243,973	$	(4,602	)	(1.7	)%	$	20,705		8.5	%
Debt securities available for sale	14,838			12,516			10,123		8,760			8,486		2,322			18.6		6,352			74.9
Debt securities held to maturity	988			998			1,019		1,048			1,073		(10		)	(1.0	)	(85		)	(7.9	)
Loans held for sale and other	6,678			3,529			3,745		4,187			4,073		3,149			89.2		2,605			64.0
Total interest income	287,182			286,323			275,262		270,628			257,605		859			0.3		29,577			11.5
Interest expense:
Deposits	27,335			23,953			22,510		20,846			17,015		3,382			14.1		10,320			60.7
Borrowings	10,726			11,571			9,553		7,922			6,487		(845		)	(7.3	)	4,239			65.3
Total interest expense	38,061			35,524			32,063		28,768			23,502		2,537			7.1		14,559			61.9
Net interest income	249,121			250,799			243,199		241,860			234,103		(1,678		)	(0.7	)	15,018			6.4
Provision for credit losses	2,270			14,236			11,368		22,259			14,545		(11,966		)	(84.1	)	(12,275		)	(84.4	)
Net interest income after provision for credit losses	246,851			236,563			231,831		219,601			219,558		10,288			4.3		27,293			12.4
Non-interest income:
Fees and service charges	32,574			32,670			30,751		33,267			34,605		(96		)	(0.3	)	(2,031		)	(5.9	)
Card revenue	15,065			14,962			13,759		14,251			14,177		103			0.7		888			6.3
ATM revenue	5,053			4,933			4,650		4,654			5,234		120			2.4		(181		)	(3.5	)
Subtotal	52,692			52,565			49,160		52,172			54,016		127			0.2		(1,324		)	(2.5	)
Gains on sales of auto loans, net	—			—			—		2,216			—		—			—		—			—
Gains on sales of consumer real estate loans, net	8,764			7,192			9,123		11,407			8,049		1,572			21.9		715			8.9
Servicing fee income	6,032			7,484			8,295		9,000			9,966		(1,452		)	(19.4	)	(3,934		)	(39.5	)
Subtotal	14,796			14,676			17,418		22,623			18,015		120			0.8		(3,219		)	(17.9	)
Leasing and equipment finance	45,045			42,904			41,847		42,831			34,080		2,141			5.0		10,965			32.2
Other	3,818			3,934			3,716		3,218			2,930		(116		)	(2.9	)	888			30.3
Fees and other revenue	116,351			114,079			112,141		120,844			109,041		2,272			2.0		7,310			6.7
Gains (losses) on debt securities, net	94			24			63		48			189		70			N.M.		(95		)	(50.3	)
Total non-interest income	116,445			114,103			112,204		120,892			109,230		2,342			2.1		7,215			6.6
Non-interest expense:
Compensation and employee benefits	123,127			120,575			123,840		127,630			114,954		2,552			2.1		8,173			7.1
Occupancy and equipment	42,337			40,711			40,514		39,578			38,766		1,626			4.0		3,571			9.2
Other	57,989			89,084			58,819		159,019			61,581		(31,095		)	(34.9	)	(3,592		)	(5.8	)
Subtotal	223,453			250,370			223,173		326,227			215,301		(26,917		)	(10.8	)	8,152			3.8
Operating lease depreciation	19,525			17,945			17,274		16,497			15,696		1,580			8.8		3,829			24.4
Foreclosed real estate and repossessed assets, net	3,881			3,857			4,916		4,739			3,829		24			0.6		52			1.4
Other credit costs, net	(436		)	(133		)	617		343			209		(303		)	N.M.		(645		)	N.M.
Total non-interest expense	246,423			272,039			245,980		347,806			235,035		(25,616		)	(9.4	)	11,388			4.8
Income (loss) before income tax expense (benefit)	116,873			78,627			98,055		(7,313		)	93,753		38,246			48.6		23,120			24.7
Income tax expense (benefit)	28,034			16,418			21,631		(110,965		)	30,704		11,616			70.8		(2,670		)	(8.7	)
Income after income tax expense (benefit)	88,839			62,209			76,424		103,652			63,049		26,630			42.8		25,790			40.9
Income attributable to non-controlling interest	2,643			3,460			2,663		2,253			2,521		(817		)	(23.6	)	122			4.8
Net income attributable to TCF Financial Corporation	86,196			58,749			73,761		101,399			60,528		27,447			46.7		25,668			42.4
Preferred stock dividends	2,494			2,494			4,106		3,746			6,464		—			—		(3,970		)	(61.4	)
Impact of preferred stock redemption or notice to redeem preferred stock	—			—			3,481		—			5,779		—			—		(5,779		)	(100.0	)
Net income available to common stockholders	$	83,702		$	56,255		$	66,174	$	97,653		$	48,285	$	27,447		48.8		$	35,417		73.3

N.M. Not Meaningful



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)

	Nine Months Ended September 30,				Change
(Dollars in thousands, except per share data)	2018		2017		$			%
Interest income:
Loans and leases	$	794,333	$	697,613	$	96,720		13.9		%
Debt securities available for sale	37,477		24,518		12,959			52.9
Debt securities held to maturity	3,005		3,388		(383		)	(11.3	)
Loans held for sale and other	13,952		22,910		(8,958		)	(39.1	)
Total interest income	848,767		748,429		100,338			13.4
Interest expense:
Deposits	73,798		45,166		28,632			63.4
Borrowings	31,850		19,885		11,965			60.2
Total interest expense	105,648		65,051		40,597			62.4
Net interest income	743,119		683,378		59,741			8.7
Provision for credit losses	27,874		46,184		(18,310		)	(39.6	)
Net interest income after provision for credit losses	715,245		637,194		78,051			12.2
Non-interest income:
Fees and service charges	95,995		98,620		(2,625		)	(2.7	)
Card revenue	43,786		41,481		2,305			5.6
ATM revenue	14,636		14,970		(334		)	(2.2	)
Subtotal	154,417		155,071		(654		)	(0.4	)
Gains on sales of auto loans, net	—		3,244		(3,244		)	(100.0	)
Gains on sales of consumer real estate loans, net	25,079		25,920		(841		)	(3.2	)
Servicing fee income	21,811		32,347		(10,536		)	(32.6	)
Subtotal	46,890		61,511		(14,621		)	(23.8	)
Leasing and equipment finance	129,796		102,208		27,588			27.0
Other	11,468		8,428		3,040			36.1
Fees and other revenue	342,571		327,218		15,353			4.7
Gains (losses) on debt securities, net	181		189		(8		)	(4.2	)
Total non-interest income	342,752		327,407		15,345			4.7
Non-interest expense:
Compensation and employee benefits	367,542		354,882		12,660			3.6
Occupancy and equipment	123,562		117,331		6,231			5.3
Other	205,892		187,160		18,732			10.0
Subtotal	696,996		659,373		37,623			5.7
Operating lease depreciation	54,744		39,404		15,340			38.9
Foreclosed real estate and repossessed assets, net	12,654		13,017		(363		)	(2.8	)
Other credit costs, net	48		334		(286		)	(85.6	)
Total non-interest expense	764,442		712,128		52,314			7.3
Income before income tax expense	293,555		252,473		41,082			16.3
Income tax expense	66,083		77,341		(11,258		)	(14.6	)
Income after income tax expense	227,472		175,132		52,340			29.9
Income attributable to non-controlling interest	8,766		7,894		872			11.0
Net income attributable to TCF Financial Corporation	218,706		167,238		51,468			30.8
Preferred stock dividends	9,094		16,158		(7,064		)	(43.7	)
Impact of preferred stock redemption or notice to redeem preferred stock	3,481		5,779		(2,298		)	(39.8	)
Net income available to common stockholders	$	206,131	$	145,301	$	60,830		41.9

Earnings per common share:
Basic	$	1.24	$	0.86	$	0.38		44.2		%
Diluted	1.23		0.86		0.37			43.0

Dividends declared per common share	$	0.45	$	0.225	$	0.225		100.0		%



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields and Rates (Unaudited)

	Quarter Ended September 30,
	2018						2017
	Average				Yields and		Average				Yields and
(Dollars in thousands)	Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾		Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾
ASSETS:
Investments and other	$	306,257	$	3,089	4.01	%	$	279,839	$	2,679	3.80	%
Debt securities held to maturity	153,652		988		2.57		166,883		1,073		2.57
Debt securities available for sale:
Taxable	1,525,665		10,511		2.76		825,192		4,619		2.24
Tax-exempt⁽³⁾	823,854		5,478		2.66		737,859		5,949		3.22
Loans and leases held for sale	216,669		3,589		6.57		96,143		1,394		5.75
Loans and leases:⁽⁴⁾
Consumer real estate:
Fixed-rate	1,694,661		23,316		5.46		1,872,607		26,490		5.61
Variable- and adjustable-rate	3,002,225		49,719		6.57		2,964,493		44,160		5.91
Total consumer real estate	4,696,886		73,035		6.17		4,837,100		70,650		5.80
Commercial:
Fixed-rate	856,324		9,830		4.55		980,262		11,411		4.62
Variable- and adjustable-rate	2,921,471		40,134		5.45		2,493,163		29,915		4.76
Total commercial	3,777,795		49,964		5.25		3,473,425		41,326		4.72
Leasing and equipment finance	4,624,968		57,844		5.00		4,316,434		48,874		4.53
Inventory finance	2,866,460		51,714		7.16		2,479,416		41,922		6.71
Auto finance	2,435,868		32,940		5.36		3,280,612		42,785		5.17
Other	13,547		144		4.25		11,567		146		5.03
Total loans and leases	18,415,524		265,641		5.73		18,398,554		245,703		5.31
Total interest-earning assets	21,441,621		289,296		5.36		20,504,470		261,417		5.07
Other assets⁽⁵⁾	1,462,783						1,434,957
Total assets	$	22,904,404					$	21,939,427
LIABILITIES AND EQUITY:
Non-interest bearing deposits	$	3,874,421					$	3,521,044
Interest-bearing deposits:
Checking	2,427,288		234		0.04		2,539,211		99		0.02
Savings	5,620,161		4,994		0.35		4,846,090		932		0.08
Money market	1,496,223		2,941		0.78		2,106,814		2,478		0.47
Certificates of deposit	4,868,286		19,166		1.56		4,636,007		13,506		1.16
Total interest-bearing deposits	14,411,958		27,335		0.75		14,128,122		17,015		0.48
Total deposits	18,286,379		27,335		0.59		17,649,166		17,015		0.38
Borrowings:
Short-term borrowings	3,357		21		2.46		6,448		21		1.33
Long-term borrowings	1,351,585		10,705		3.15		983,004		6,466		2.62
Total borrowings	1,354,942		10,726		3.15		989,452		6,487		2.62
Total interest-bearing liabilities	15,766,900		38,061		0.96		15,117,574		23,502		0.62
Total deposits and borrowings	19,641,321		38,061		0.77		18,638,618		23,502		0.50
Accrued expenses and other liabilities	751,100						723,792
Total liabilities	20,392,421						19,362,410
Total TCF Financial Corp. stockholders' equity	2,488,435						2,554,667
Non-controlling interest in subsidiaries	23,548						22,350
Total equity	2,511,983						2,577,017
Total liabilities and equity	$	22,904,404					$	21,939,427
Net interest income and margin			$	251,235	4.66				$	237,915	4.61


(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 September 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 $290.9 million and $249.0 million for the quarters ended September 30, 2018 and 2017, respectively.



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields and Rates (Unaudited)

	Nine Months Ended September 30,
	2018						2017
	Average				Yields and		Average				Yields and
(Dollars in thousands)	Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾		Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾
ASSETS:
Investments and other	$	315,803	$	8,722	3.69	%	$	275,278	$	8,142	3.95	%
Debt securities held to maturity	156,170		3,005		2.57		172,341		3,388		2.62
Debt securities available for sale:
Taxable	1,258,708		24,487		2.59		820,968		13,707		2.23
Tax-exempt⁽³⁾	824,551		16,444		2.66		689,807		16,632		3.21
Loans and leases held for sale	108,992		5,230		6.41		240,753		14,768		8.20
Loans and leases:⁽⁴⁾
Consumer real estate:
Fixed-rate	1,731,858		71,541		5.52		1,972,528		83,456		5.66
Variable- and adjustable-rate	3,013,488		143,931		6.39		2,897,509		124,381		5.74
Total consumer real estate	4,745,346		215,472		6.07		4,870,037		207,837		5.71
Commercial:
Fixed-rate	895,746		30,514		4.55		982,414		34,250		4.66
Variable- and adjustable-rate	2,798,680		111,338		5.32		2,415,999		81,504		4.51
Total commercial	3,694,426		141,852		5.13		3,398,413		115,754		4.55
Leasing and equipment finance	4,651,605		171,487		4.92		4,293,364		144,786		4.50
Inventory finance	3,097,290		160,047		6.91		2,632,385		123,633		6.28
Auto finance	2,715,192		107,857		5.31		3,050,555		109,865		4.82
Other	13,943		434		4.17		10,520		414		5.27
Total loans and leases	18,917,802		797,149		5.63		18,255,274		702,289		5.14
Total interest-earning assets	21,582,026		855,037		5.29		20,454,421		758,926		4.96
Other assets⁽⁵⁾	1,449,082						1,338,670
Total assets	$	23,031,108					$	21,793,091
LIABILITIES AND EQUITY:
Non-interest bearing deposits	$	3,833,543					$	3,465,741
Interest-bearing deposits:
Checking	2,449,723		466		0.03		2,541,384		265		0.01
Savings	5,520,287		11,895		0.29		4,803,310		1,971		0.05
Money market	1,588,210		7,970		0.67		2,236,972		7,897		0.47
Certificates of deposit	4,924,804		53,467		1.45		4,314,088		35,033		1.09
Total interest-bearing deposits	14,483,024		73,798		0.68		13,895,754		45,166		0.43
Total deposits	18,316,567		73,798		0.54		17,361,495		45,166		0.35
Borrowings:
Short-term borrowings	3,473		58		2.24		5,776		41		0.95
Long-term borrowings	1,435,088		31,792		2.96		1,220,615		19,844		2.17
Total borrowings	1,438,561		31,850		2.96		1,226,391		19,885		2.16
Total interest-bearing liabilities	15,921,585		105,648		0.89		15,122,145		65,051		0.57
Total deposits and borrowings	19,755,128		105,648		0.71		18,587,886		65,051		0.47
Accrued expenses and other liabilities	741,222						687,826
Total liabilities	20,496,350						19,275,712
Total TCF Financial Corp. stockholders' equity	2,509,625						2,494,152
Non-controlling interest in subsidiaries	25,133						23,227
Total equity	2,534,758						2,517,379
Total liabilities and equity	$	23,031,108					$	21,793,091
Net interest income and margin			$	749,389	4.64				$	693,875	4.53


(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 nine month periods ended September 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 $287.1 million and $210.2 million for the nine month periods ended September 30, 2018 and 2017, respectively.



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Quarterly Average Balance Sheets (Unaudited)

	Quarter Ended										Change From
	Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30, 2018					Sep. 30, 2017
(Dollars in thousands)	2018		2018		2018		2017		2017		$			%		$			%
ASSETS:
Investments and other	$	306,257	$	309,120	$	332,319	$	303,958	$	279,839	$	(2,863	)	(0.9	)%	$	26,418		9.4	%
Debt securities held to maturity	153,652		155,779		159,139		163,080		166,883		(2,127		)	(1.4	)	(13,231		)	(7.9	)
Debt securities available for sale:
Taxable	1,525,665		1,262,642		981,843		831,113		825,192		263,023			20.8		700,473			84.9
Tax-exempt	823,854		828,131		821,642		779,964		737,859		(4,277		)	(0.5	)	85,995			11.7
Loans and leases held for sale	216,669		45,525		63,095		113,501		96,143		171,144			N.M.		120,526			125.4
Loans and leases:⁽¹⁾
Consumer real estate:
Fixed-rate	1,694,661		1,715,289		1,786,636		1,821,240		1,872,607		(20,628		)	(1.2	)	(177,946		)	(9.5	)
Variable- and adjustable-rate	3,002,225		3,026,310		3,012,036		3,151,183		2,964,493		(24,085		)	(0.8	)	37,732			1.3
Total consumer real estate	4,696,886		4,741,599		4,798,672		4,972,423		4,837,100		(44,713		)	(0.9	)	(140,214		)	(2.9	)
Commercial:
Fixed-rate	856,324		900,462		931,275		963,703		980,262		(44,138		)	(4.9	)	(123,938		)	(12.6	)
Variable- and adjustable-rate	2,921,471		2,802,059		2,669,745		2,573,022		2,493,163		119,412			4.3		428,308			17.2
Total commercial	3,777,795		3,702,521		3,601,020		3,536,725		3,473,425		75,274			2.0		304,370			8.8
Leasing and equipment finance	4,624,968		4,639,703		4,690,868		4,713,015		4,316,434		(14,735		)	(0.3	)	308,534			7.1
Inventory finance	2,866,460		3,299,996		3,128,290		2,688,387		2,479,416		(433,536		)	(13.1	)	387,044			15.6
Auto finance	2,435,868		2,695,943		3,020,187		3,267,855		3,280,612		(260,075		)	(9.6	)	(844,744		)	(25.7	)
Other	13,547		13,845		14,446		13,007		11,567		(298		)	(2.2	)	1,980			17.1
Total loans and leases	18,415,524		19,093,607		19,253,483		19,191,412		18,398,554		(678,083		)	(3.6	)	16,970			0.1
Total interest-earning assets	21,441,621		21,694,804		21,611,521		21,383,028		20,504,470		(253,183		)	(1.2	)	937,151			4.6
Other assets⁽²⁾	1,462,783		1,430,621		1,453,742		1,437,126		1,434,957		32,162			2.2		27,826			1.9
Total assets	$	22,904,404	$	23,125,425	$	23,065,263	$	22,820,154	$	21,939,427	$	(221,021	)	(1.0	)	$	964,977		4.4
LIABILITIES AND EQUITY:
Non-interest bearing deposits	$	3,874,421	$	3,879,048	$	3,745,745	$	3,570,846	$	3,521,044	$	(4,627	)	(0.1	)%	$	353,377		10.0	%
Interest-bearing deposits:
Checking	2,427,288		2,460,709		2,461,548		2,541,475		2,539,211		(33,421		)	(1.4	)	(111,923		)	(4.4	)
Savings	5,620,161		5,542,565		5,395,669		5,140,417		4,846,090		77,596			1.4		774,071			16.0
Money market	1,496,223		1,572,560		1,698,064		1,854,442		2,106,814		(76,337		)	(4.9	)	(610,591		)	(29.0	)
Certificates of deposit	4,868,286		4,909,422		4,998,133		5,032,085		4,636,007		(41,136		)	(0.8	)	232,279			5.0
Total interest-bearing deposits	14,411,958		14,485,256		14,553,414		14,568,419		14,128,122		(73,298		)	(0.5	)	283,836			2.0
Total deposits	18,286,379		18,364,304		18,299,159		18,139,265		17,649,166		(77,925		)	(0.4	)	637,213			3.6
Borrowings:
Short-term borrowings	3,357		3,116		3,952		3,759		6,448		241			7.7		(3,091		)	(47.9	)
Long-term borrowings	1,351,585		1,531,389		1,423,075		1,295,268		983,004		(179,804		)	(11.7	)	368,581			37.5
Total borrowings	1,354,942		1,534,505		1,427,027		1,299,027		989,452		(179,563		)	(11.7	)	365,490			36.9
Total interest-bearing liabilities	15,766,900		16,019,761		15,980,441		15,867,446		15,117,574		(252,861		)	(1.6	)	649,326			4.3
Total deposits and borrowings	19,641,321		19,898,809		19,726,186		19,438,292		18,638,618		(257,488		)	(1.3	)	1,002,703			5.4
Accrued expenses and other liabilities	751,100		714,488		758,157		790,850		723,792		36,612			5.1		27,308			3.8
Total liabilities	20,392,421		20,613,297		20,484,343		20,229,142		19,362,410		(220,876		)	(1.1	)	1,030,011			5.3
Total TCF Financial Corporation stockholders' equity	2,488,435		2,483,474		2,557,729		2,570,613		2,554,667		4,961			0.2		(66,232		)	(2.6	)
Non-controlling interest in subsidiaries	23,548		28,654		23,191		20,399		22,350		(5,106		)	(17.8	)	1,198			5.4
Total equity	2,511,983		2,512,128		2,580,920		2,591,012		2,577,017		(145		)	—		(65,034		)	(2.5	)
Total liabilities and equity	$	22,904,404	$	23,125,425	$	23,065,263	$	22,820,154	$	21,939,427	$	(221,021	)	(1.0	)	$	964,977		4.4

N.M. Not Meaningful


(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 $290.9 million, $288.4 million, $281.9 million, $267.8 million and $249.0 million for the third, second and first quarters of 2018 and the fourth and third quarters of 2017, respectively.



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Quarterly Yields and Rates⁽¹⁾⁽²⁾ (Unaudited)

	Quarter Ended										Change From
	Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,			Sep. 30,
	2018		2018		2018		2017		2017		2018			2017
ASSETS:
Investments and other	4.01	%	3.71	%	3.38	%	3.07	%	3.80	%	30		bps	21		bps
Debt securities held to maturity	2.57		2.56		2.56		2.57		2.57		1			—
Debt securities available for sale:
Taxable	2.76		2.59		2.37		2.25		2.24		17			52
Tax-exempt⁽³⁾	2.66		2.66		2.66		3.22		3.22		—			(56	)
Loans and leases held for sale	6.57		5.93		6.22		6.43		5.75		64			82
Loans and leases:
Consumer real estate:
Fixed-rate	5.46		5.52		5.58		5.61		5.61		(6	)		(15	)
Variable- and adjustable-rate	6.57		6.41		6.18		5.95		5.91		16			66
Total consumer real estate	6.17		6.09		5.96		5.83		5.80		8			37
Commercial:
Fixed-rate	4.55		4.49		4.61		5.49		4.62		6			(7	)
Variable- and adjustable-rate	5.45		5.45		5.04		4.68		4.76		—			69
Total commercial	5.25		5.21		4.93		4.90		4.72		4			53
Leasing and equipment finance	5.00		4.93		4.81		4.90		4.53		7			47
Inventory finance	7.16		6.94		6.64		6.01		6.71		22			45
Auto finance	5.36		5.30		5.28		5.23		5.17		6			19
Other	4.25		4.10		4.16		4.75		5.03		15			(78	)
Total loans and leases	5.73		5.67		5.49		5.35		5.31		6			42

Total interest-earning assets	5.36		5.33		5.19		5.11		5.07		3			29

LIABILITIES:
Interest-bearing deposits:
Checking	0.04		0.02		0.02		0.02		0.02		2			2
Savings	0.35		0.27		0.24		0.18		0.08		8			27
Money market	0.78		0.67		0.58		0.48		0.47		11			31
Certificates of deposit	1.56		1.43		1.36		1.28		1.16		13			40
Total interest-bearing deposits	0.75		0.66		0.63		0.57		0.48		9			27
Total deposits	0.59		0.52		0.50		0.46		0.38		7			21
Borrowings:
Short-term borrowings	2.46		2.33		1.99		1.75		1.33		13			113
Long-term borrowings	3.15		3.02		2.70		2.43		2.62		13			53
Total borrowings	3.15		3.02		2.70		2.43		2.62		13			53

Total interest-bearing liabilities	0.96		0.89		0.81		0.72		0.62		7			34

Net interest margin	4.66		4.67		4.59		4.57		4.61		(1	)		5


(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% beginning in the first quarter of 2018 and 35% for all prior periods.



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Summary of Credit Quality Data (Unaudited)


Allowance for Loan and Lease Losses

	At Sep. 30,					At Jun. 30,					At Mar. 31,					At Dec. 31,					At Sep. 30,
	2018					2018					2018					2017					2017
				% of					% of					% of					% of				% of
(Dollars in thousands)	Balance		Portfolio			Balance		Portfolio			Balance		Portfolio			Balance		Portfolio			Balance		Portfolio
Consumer real estate	$	45,258		0.92	%	$	43,954		0.95	%	$	47,685		1.01	%	$	47,168		0.98	%	$	47,838	0.97	%
Commercial	40,470			1.08		40,291			1.09		37,198			1.01		37,195			1.04		36,344		1.04
Leasing and equipment finance	22,926			0.50		22,247			0.48		23,182			0.50		22,528			0.47		22,771		0.48
Inventory finance	11,361			0.39		11,840			0.39		13,253			0.38		13,233			0.48		11,978		0.46
Auto finance	39,852			1.75		46,608			1.79		45,822			1.61		50,225			1.57		48,660		1.50
Other	754			3.57		679			3.24		563			2.84		692			3.07		653		3.19
Total	$	160,621		0.87		$	165,619		0.89		$	167,703		0.87		$	171,041		0.90		$	168,244	0.89



Changes in Allowance for Loan and Lease Losses

	Quarter Ended															Change From
	Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Sep. 30,
(In thousands)	2018			2018			2018			2017			2017			2018			2017
Balance, beginning of period	$	165,619		$	167,703		$	171,041		$	168,244		$	165,620		$	(2,084	)	$	(1	)
Charge-offs	(19,448		)	(18,188		)	(19,865		)	(23,865		)	(17,999		)	(1,260		)	(1,449		)
Recoveries	12,658			5,418			5,714			5,580			9,847			7,240			2,811
Net (charge-offs) recoveries	(6,790		)	(12,770		)	(14,151		)	(18,285		)	(8,152		)	5,980			1,362
Provision for credit losses	2,270			14,236			11,368			22,259			14,545			(11,966		)	(12,275		)
Other	(478		)	(3,550		)	(555		)	(1,177		)	(3,769		)	3,072			3,291
Balance, end of period	$	160,621		$	165,619		$	167,703		$	171,041		$	168,244		$	(4,998	)	$	(7,623	)



Net Charge-offs

	Quarter Ended
	Sep. 30,					Jun. 30,					Mar. 31,					Dec. 31,					Sep. 30,
	2018					2018					2018					2017					2017
(Dollars in thousands)	Balance			Rate⁽¹⁾		Balance			Rate⁽¹⁾		Balance			Rate⁽¹⁾		Balance			Rate⁽¹⁾		Balance			Rate⁽¹⁾
Consumer real estate:
First mortgage lien	$	(3,721	)	(0.82	)%	$	714		0.16	%	$	790		0.16	%	$	876		0.18	%	$	(801	)	(0.16	)%
Junior lien	(2,709		)	(0.37	)	64			0.01		327			0.05		(218		)	(0.03	)	(2,651		)	(0.38	)
Total consumer real estate	(6,430		)	(0.55	)	778			0.07		1,117			0.09		658			0.05		(3,452		)	(0.29	)
Commercial	(8		)	—		(27		)	—		(14		)	—		(378		)	(0.04	)	(196		)	(0.02	)
Leasing and equipment finance	1,930			0.17		2,106			0.18		1,340			0.11		4,775			0.41		1,046			0.10
Inventory finance	637			0.09		517			0.06		409			0.05		995			0.15		469			0.08
Auto finance	9,485			1.56		8,516			1.26		10,656			1.41		11,111			1.36		9,248			1.13
Other	1,176			N.M.		880			N.M.		643			N.M.		1,124			N.M.		1,037			N.M.
Total	$	6,790		0.15		$	12,770		0.27		$	14,151		0.29		$	18,285		0.38		$	8,152		0.18

N.M. Not Meaningful

(1) Annualized net charge-off rate based on average loans and leases



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Summary of Credit Quality Data (Unaudited), Continued


Over 60-Day Delinquencies as a Percentage of Portfolio⁽¹⁾
											Change From
	At Sep. 30,		At Jun. 30,		At Mar. 31,		At Dec. 31,		At Sep. 30,		Jun. 30,			Sep. 30,
	2018		2018		2018		2017		2017		2018			2017
Consumer real estate:
First mortgage lien	0.18	%	0.20	%	0.23	%	0.25	%	0.32	%	(2	)	bps	(14	)	bps
Junior lien	0.04		0.07		0.06		0.04		0.05		(3	)		(1	)
Total consumer real estate	0.10		0.12		0.13		0.13		0.15		(2	)		(5	)
Commercial	—		—		—		—		—		—			—
Leasing and equipment finance	0.15		0.11		0.11		0.14		0.15		4			—
Inventory finance	—		—		—		0.01		0.01		—			(1	)
Auto finance	0.41		0.33		0.24		0.28		0.25		8			16
Other	0.30		0.16		0.24		0.04		0.07		14			23
Subtotal	0.11		0.11		0.09		0.11		0.12		—			(1	)
Portfolios acquired with deteriorated credit quality	16.70		13.48		12.95		13.18		9.42		322			728
Total delinquencies	0.12		0.11		0.10		0.12		0.13		1			(1	)


(1)	Excludes non-accrual loans and leases



Non-performing Assets
																Change From
	At Sep. 30,			At Jun. 30,			At Mar. 31,			At Dec. 31,			At Sep. 30,			Jun. 30,				Sep. 30,
(Dollars in thousands)	2018			2018			2018			2017			2017			2018				2017
Non-accrual loans and leases:
Consumer real estate	$	55,092		$	49,155		$	84,237		$	83,224		$	80,731		$	5,937			$	(25,639	)
Commercial	9,888			9,978			11,401			6,785			10,337			(90		)		(449		)
Leasing and equipment finance	16,061			16,300			19,968			17,089			18,720			(239		)		(2,659		)
Inventory finance	1,640			2,093			3,621			4,116			3,178			(453		)		(1,538		)
Auto finance	7,613			7,312			7,199			7,366			6,653			301				960
Other	2			21			2			2			—			(19		)		2
Total non-accrual loans and leases	90,296			84,859			126,428			118,582			119,619			5,437				(29,323		)
Other real estate owned	19,079			16,266			17,179			18,225			26,405			2,813				(7,326		)
Total non-performing assets	$	109,375		$	101,125		$	143,607		$	136,807		$	146,024		$	8,250			$	(36,649	)

Non-accrual loans and leases as a percentage of total loans and leases	0.49		%	0.46		%	0.65		%	0.62		%	0.63		%	3			bps	(14		)	bps
Non-performing assets as a percentage of total loans and leases and other real estate owned	0.59			0.54			0.74			0.72			0.77			5				(18		)
Allowance for loan and lease losses as a percentage of non-accrual loans and leases	177.88			195.17			132.65			144.24			140.65			(1,729		)		3,723



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Capital Information (Unaudited)

	At or For the Quarter Ended															Change From
(Dollars in thousands, except per share data)	Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,		Sep. 30,
(Dollars in thousands, except per share data)	2018			2018			2018			2017			2017			2018		2017
Dividends declared per common share	$	0.15		$	0.15		$	0.15		$	0.075		$	0.075		—	%	100.0		%
Book value per common share	14.01			13.79			13.89			13.96			13.45			1.6		4.2
Tangible book value per common share⁽¹⁾	12.96			12.73			12.84			12.92			11.99			1.8		8.1
Common equity ratio	10.21		%	9.97		%	10.06		%	10.42		%	10.04		%	24	bps	17		bps
Tangible common equity ratio⁽¹⁾	9.51			9.28			9.37			9.72			9.06			23		45

Regulatory Capital:⁽²⁾
Common equity Tier 1 capital	$	2,226,820		$	2,186,528		$	2,222,390		$	2,242,410		$	2,080,729		1.8	%	7.0		%
Tier 1 capital	2,412,869			2,375,210			2,414,838			2,522,178			2,362,926			1.6		2.1
Total capital	2,754,615			2,728,076			2,786,637			2,889,323			2,734,260			1.0		0.7

Common equity Tier 1 capital ratio	11.04		%	10.60		%	10.57		%	10.79		%	10.05		%	44	bps	99		bps
Tier 1 risk-based capital ratio	11.96			11.51			11.49			12.14			11.41			45		55
Total risk-based capital ratio	13.66			13.22			13.26			13.90			13.21			44		45
Tier 1 leverage ratio	10.58			10.31			10.52			11.12			10.88			27		(30	)


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


(2)	September 30, 2018 amounts are preliminary pending completion and filing of the Company's regulatory reports



Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)

Computation of adjusted diluted earnings per common share:

		Quarter Ended
		Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,
(Dollars in thousands, except per share data)		2018		2018		2018		2017		2017
Net income available to common stockholders		$	83,702	$	56,255	$	66,174	$	97,653	$	48,285
Less: Earnings allocated to participating securities		13		8		9		17		8
Earnings allocated to common stock	(a)	83,689		56,247		66,165		97,636		48,277
Plus: BCFP/OCC settlement adjustment		—		32,000		—		—		—
Less: Income tax expense attributable to BCFP/OCC settlement adjustment		—		6,491		—		—		—
Adjusted earnings allocated to common stock	(b)	$	83,689	$	81,756	$	66,165	$	97,636	$	48,277

Weighted-average common shares outstanding for diluted earnings per common share	(c)	165,533,225		166,857,640		169,997,146		170,068,986		169,240,251

Diluted earnings per common share	(a) / (c)	$	0.51	$	0.34	$	0.39	$	0.57	$	0.29
Adjusted diluted earnings per common share	(b) / (c)	0.51		0.49		0.39		0.57		0.29



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited), Continued

Computation of adjusted return on average common equity, return on average tangible common equity and adjusted return on average tangible common equity:

		Quarter Ended
		Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,
(Dollars in thousands)		2018			2018			2018			2017			2017
Net income available to common stockholders	(a)	$	83,702		$	56,255		$	66,174		$	97,653		$	48,285
Plus: Goodwill impairment		—			—			—			73,041			—
Plus: Other intangibles amortization and impairment		913			835			831			1,187			806
Less: Income tax expense attributable to other intangibles amortization and impairment		220			201			199			530			277
Adjusted net income available to common stockholders	(b)	$	84,395		$	56,889		$	66,806		$	171,351		$	48,814

Net income available to common stockholders adjusted for BCFP/OCC settlement:
Net income available to common stockholders		$	83,702		$	56,255		$	66,174		$	97,653		$	48,285
Plus: BCFP/OCC settlement adjustment		—			32,000			—			—			—
Less: Income tax expense attributable to BCFP/OCC settlement adjustment		—			6,491			—			—			—
Net income available to common stockholders adjusted for BCFP/OCC settlement	(c)	83,702			81,764			66,174			97,653			48,285
Plus: Goodwill impairment		—			—			—			73,041			—
Plus: Other intangibles amortization and impairment		913			835			831			1,187			806
Less: Income tax expense attributable to other intangibles amortization and impairment		220			201			199			530			277
Adjusted net income available to common stockholders adjusted for BCFP/OCC settlement	(d)	$	84,395		$	82,398		$	66,806		$	171,351		$	48,814

Average balances:
Total equity		$	2,511,983		$	2,512,128		$	2,580,920		$	2,591,012		$	2,577,017
Less: Non-controlling interest in subsidiaries		23,548			28,654			23,191			20,399			22,350
Total TCF Financial Corporation stockholders' equity		2,488,435			2,483,474			2,557,729			2,570,613			2,554,667
Less: Preferred stock		169,302			169,302			200,404			265,821			265,556
Average total common stockholders' equity	(e)	2,319,133			2,314,172			2,357,325			2,304,792			2,289,111
Less:
Goodwill, net		154,757			154,757			154,757			197,734			227,539
Other intangibles, net		21,798			22,672			23,274			21,901			22,279
Average tangible common stockholders' equity	(f)	$	2,142,578		$	2,136,743		$	2,179,294		$	2,085,157		$	2,039,293

Average total common stockholders' equity adjusted for BCFP/OCC settlement:
Average total common stockholders' equity		$	2,319,133		$	2,314,172		$	2,357,325		$	2,304,792		$	2,289,111
Plus: BCFP/OCC settlement adjustment to average total common stockholders' equity		—			4,205			—			—			—
Average total common stockholders' equity adjusted for BCFP/OCC settlement	(g)	2,319,133			2,318,377			2,357,325			2,304,792			2,289,111
Less:
Goodwill, net		154,757			154,757			154,757			197,734			227,539
Other intangibles, net		21,798			22,672			23,274			21,901			22,279
Adjusted average tangible common stockholders' equity	(h)	$	2,142,578		$	2,140,948		$	2,179,294		$	2,085,157		$	2,039,293

ROACE⁽¹⁾	(a) / (e)	14.44		%	9.72		%	11.23		%	16.95		%	8.44		%
Adjusted ROACE⁽¹⁾	(c) / (g)	14.44			14.11			11.23			16.95			8.44
ROATCE⁽¹⁾	(b) / (f)	15.76			10.65			12.26			32.87			9.57
Adjusted ROATCE⁽¹⁾	(d) / (h)	15.76			15.39			12.26			32.87			9.57


(1)	Annualized



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited), Continued

Computation of adjusted efficiency ratio:

		Quarter Ended
		Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,
(Dollars in thousands)		2018			2018			2018			2017			2017
Total non-interest expense	(a)	$	246,423		$	272,039		$	245,980		$	347,806		$	235,035
Less: BCFP/OCC settlement adjustment		—			32,000			—			—			—
Adjusted non-interest expense	(b)	$	246,423		$	240,039		$	245,980		$	347,806		$	235,035

Revenue	(c)	$	365,566		$	364,902		$	355,403		$	362,752		$	343,333

Efficiency ratio	(a) / (c)	67.41		%	74.55		%	69.21		%	95.88		%	68.46		%
Adjusted efficiency ratio	(b) / (c)	67.41			65.78			69.21			95.88			68.46



Computation of tangible common equity ratio and tangible book value per common share:

		At Sep. 30,			At Jun. 30,			At Mar. 31,			At Dec. 31,			At Sep. 30,
(Dollars in thousands, except per share data)		2018			2018			2018			2017			2017
Total equity		$	2,528,012		$	2,504,578		$	2,550,950		$	2,680,584		$	2,596,514
Less: Non-controlling interest in subsidiaries		21,154			23,646			28,437			17,827			19,906
Total TCF Financial Corporation stockholders' equity		2,506,858			2,480,932			2,522,513			2,662,757			2,576,608
Less: Preferred stock		169,302			169,302			169,302			265,821			265,967
Total common stockholders' equity	(d)	2,337,556			2,311,630			2,353,211			2,396,936			2,310,641
Less:
Goodwill, net		154,757			154,757			154,757			154,757			227,798
Other intangibles, net		21,364			22,247			23,112			23,687			21,874
Tangible common stockholders' equity	(e)	$	2,161,435		$	2,134,626		$	2,175,342		$	2,218,492		$	2,060,969

Total assets	(f)	$	22,904,785		$	23,184,462		$	23,385,052		$	23,002,159		$	23,005,038
Less:
Goodwill, net		154,757			154,757			154,757			154,757			227,798
Other intangibles, net		21,364			22,247			23,112			23,687			21,874
Tangible assets	(g)	$	22,728,664		$	23,007,458		$	23,207,183		$	22,823,715		$	22,755,366

Common stock shares outstanding	(h)	166,812,524			167,684,971			169,415,834			171,669,419			171,833,926

Common equity ratio	(d) / (f)	10.21		%	9.97		%	10.06		%	10.42		%	10.04		%
Tangible common equity ratio	(e) / (g)	9.51			9.28			9.37			9.72			9.06

Book value per common share	(d) / (h)	$	14.01		$	13.79		$	13.89		$	13.96		$	13.45
Tangible book value per common share	(e) / (h)	12.96			12.73			12.84			12.92			11.99

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TCF FINANCIAL CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - October 22, 2018

Attached files

TCF FINANCIAL CORP Reports