Exhibit 99.1
NEWS RELEASE
| CONTACT: |
| Jason Korstange |
|
| (952) 745-2755 | |
|
|
| |
|
| Patricia Quaal | |
|
| (952) 745-2758 | |
FOR IMMEDIATE RELEASE
TCF FINANCIAL CORPORATION 200 Lake Street East, Wayzata, MN 55391-1693
TCF Reports Record First Quarter Earnings and EPS ($.83, up 11 percent)
FIRST QUARTER HIGHLIGHTS
• Record diluted earnings per share of 83 cents, up 11 percent
• Record net income of $60.1 million, up 7 percent
• Return on average assets of 1.99 percent
• Return on average common equity of 24.70 percent
• Average Power AssetsÒ increased $778.2 million, or 14 percent, from the first quarter of 2002
• Net loan and lease charge-offs were $1.9 million, or .09 percent (annualized) of average loans and leases
• Opened three new branches; plan to open 21 more new branches during the remainder of 2003
• Average low-cost checking, savings and money market deposits increased $974.4 million, or 20 percent, from the first quarter of 2002
• Increased checking accounts by 20,281 to 1,358,594 during the first quarter
EARNINGS SUMMARY
($ in thousands, except per-share data)
|
| Three Months |
|
|
| ||||
|
| 2003 |
| 2002 |
| Change |
| ||
Net income |
| $ | 60,127 |
| $ | 56,317 |
| 6.8 | % |
Diluted earnings per common share |
| 0.83 |
| 0.75 |
| 10.7 |
| ||
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|
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| ||
Financial Ratios |
|
|
|
|
|
|
| ||
Return on average assets |
| 1.99 | % | 2.01 | % |
|
| ||
Return on average common equity |
| 24.70 |
| 24.68 |
|
|
| ||
Net interest margin |
| 4.45 |
| 4.83 |
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| ||
WAYZATA, MN, April 16, 2003 – TCF Financial Corporation (TCF) (NYSE: TCB) today reported record diluted earnings per share of 83 cents for the 2003 first quarter, up 11 percent from 75 cents for the same period in 2002. Net income was a record $60.1 million for the first quarter of 2003, up 7 percent from the same period in 2002. For the first quarter of 2003, return on average assets was 1.99 percent and return on average common equity was 24.70 percent, essentially unchanged from the same period in 2002.
Chairman’s Statement
“In this time of economic uncertainty, TCF remains focused on its proven strategy of growing and cultivating our franchise,” said William A. Cooper, Chairman and CEO, “and we’ve delivered yet another solid quarter of results.”
Total Revenue
($ in thousands) |
| Three Months |
|
|
|
|
| |||||
|
| 2003 |
| 2002 |
| $ Change |
| % Change |
| |||
Net interest income |
| $ | 122,412 |
| $ | 124,524 |
| $ | (2,112 | ) | (1.7 | )% |
Fees and other revenue: |
|
|
|
|
|
|
|
|
| |||
Fees and service charges |
| 54,414 |
| 47,547 |
| 6,867 |
| 14.4 |
| |||
Debit card revenue |
| 12,914 |
| 10,092 |
| 2,822 |
| 28.0 |
| |||
ATM revenue |
| 10,415 |
| 10,813 |
| (398 | ) | (3.7 | ) | |||
Investments and insurance commissions |
| 3,520 |
| 3,232 |
| 288 |
| 8.9 |
| |||
Total banking fees and other revenue |
| 81,263 |
| 71,684 |
| 9,579 |
| 13.4 |
| |||
Leasing and equipment finance |
| 13,607 |
| 14,796 |
| (1,189 | ) | (8.0 | ) | |||
Mortgage banking |
| (430 | ) | 3,658 |
| (4,088 | ) | N.M. |
| |||
Other |
| 2,076 |
| 4,786 |
| (2,710 | ) | (56.6 | ) | |||
Total fees and other revenue |
| 96,516 |
| 94,924 |
| 1,592 |
| 1.7 |
| |||
Top-line revenue |
| 218,928 |
| 219,448 |
| (520 | ) | (0.2 | ) | |||
Gains on sales of securities available for sale |
| 21,137 |
| 6,044 |
| 15,093 |
| N.M. |
| |||
Gains (losses) on termination of debt |
| (6,576 | ) | — |
| (6,576 | ) | N.M. |
| |||
Gains on sales of branches |
| — |
| 1,962 |
| (1,962 | ) | N.M. |
| |||
Subtotal |
| 14,561 |
| 8,006 |
| 6,555 |
| 81.9 |
| |||
Total revenue |
| $ | 233,489 |
| $ | 227,454 |
| $ | 6,035 |
| 2.7 |
|
|
|
|
|
|
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|
|
|
| |||
Net interest margin |
| 4.45 | % | 4.83 | % |
|
|
|
| |||
Fees and other revenue as a % of top-line revenue |
| 44.09 |
| 43.26 |
|
|
|
|
| |||
Fees and other revenue as a % average assets |
| 3.20 |
| 3.39 |
|
|
|
|
| |||
N.M. Not meaningful.
Net Interest Income
TCF’s net interest income decreased $2.1 million, or 2 percent, to $122.4 million in the first quarter of 2003, compared with $124.5 million for the same 2002 period. Net interest margin in the first quarter was
2
4.45 percent, compared with 4.83 percent last year and 4.59 percent in the fourth quarter of 2002. The decline in both net interest income and net interest margin is primarily the result of continued low interest rates and the resulting prepayment and refinancing of higher yielding assets. “With interest rates at record low levels, our strategy is to sell higher coupon mortgage-backed securities, with higher prepayment rates, and realize the gains. We will wait for interest rates to rise before reinvesting in securities with long maturities. At current interest rate levels, we believe it is better to be a seller rather than a buyer of long-term fixed rate securities. While this strategy will negatively impact our net interest income in the short term, we believe it to be the best long-term strategy," said Cooper. During the 2003 first quarter, TCF realized gains of $21.1 million. At March 31, 2003, the unrealized gain on TCF’s mortgage-backed securities available for sale portfolio was $49.4 million.
Interest Rate Risk
TCF’s one-year interest rate gap (the difference between interest-earning assets and interest-bearing liabilities repricing or maturing within the next twelve months) was a positive $833.7 million, or 7 percent of total assets, at March 31, 2003, compared with a positive $1.1 billion, or 9 percent of total assets, at December 31, 2002. Although the one-year gap is subject to a number of assumptions and is only one of a number of interest rate risk measurements, TCF believes the interest-rate gap is an important indication of its exposure to interest-rate risk. The positive one-year gap is largely the result of the current low interest rate environment in which TCF and the banking industry as a whole are experiencing sharp increases in prepayments of higher-yielding mortgage-backed securities, residential real estate loans and fixed-rate consumer and commercial real estate loans. Also impacting the gap is significant customer demand for variable-rate consumer and commercial loan products, in addition to the growth in deposits, resulting in reduced variable-rate borrowings. If interest rates remain at current levels or fall further, the net interest margin will compress and net interest income may decline.
3
Non-interest Income
Total non-interest income was $111.1 million for the first quarter of 2003, up $8.1 million, or 8 percent, from the 2002 first quarter. Banking fees and other revenue increased $9.6 million, or 13 percent during the quarter as a result of TCF’s expanding branch network and customer base. Leasing and equipment finance revenue was $13.6 million for the first three months of 2003, down $1.2 million from the same period of 2002. The decline in leasing and equipment finance revenue was the result of fewer sales-type leasing transactions, which fluctuate from quarter to quarter based on customer driven factors not within the control of TCF. Mortgage banking revenue decreased $4.1 million and was a negative $430 thousand in the first quarter of 2003, compared with revenue of $3.7 million for the same 2002 period, resulting from a $13.4 million increase in amortization and impairment of mortgage servicing rights.
During the 2003 first quarter, TCF took advantage of market conditions and sold $532.2 million of mortgage-backed securities and realized gains of $21.1 million. In addition, and in connection with these securities sales, TCF prepaid $150 million of higher cost Federal Home Loan Bank (“FHLB”) advances and recorded losses on termination of debt of $6.6 million. The prepayment of higher cost FHLB advances reduces future interest expense. TCF may, from time to time, sell additional mortgage-backed securities at gains as market conditions warrant.
New Branch Expansion
TCF opened three new branches during the first quarter of 2003, one in a Jewel-Osco® store in Illinois and two in Cub Foods® stores in Minnesota. TCF has now opened 223 new branches since January 1998—these branches comprise 57 percent of all TCF branches. TCF currently has 392 branches, including 241 full service branches in supermarkets and has new branches under development in each of its markets. TCF plans to open 21 more new branches during the remainder of 2003, consisting of 18 traditional branches and three supermarket branches.
4
(# of branches) |
| At March 31, |
| At March 31, |
| At December 31, |
|
Minnesota |
| 96 |
| 90 |
| 75 |
|
Illinois |
| 188 |
| 179 |
| 47 |
|
Wisconsin |
| 35 |
| 33 |
| 28 |
|
Michigan |
| 53 |
| 56 |
| 60 |
|
Colorado |
| 15 |
| 13 |
| 7 |
|
Indiana |
| 5 |
| 5 |
| 0 |
|
|
| 392 |
| 376 |
| 217 |
|
Power Assets®
TCF’s Power Asset lending operations continue to generate strong growth. TCF’s consumer loan average balances increased $527.5 million, or 21 percent, and commercial real estate loan average balances have increased $165.3 million, or 10 percent, from the first quarter of 2002. “Our consumer home equity lending business had strong growth in the first quarter of 2003,” said Cooper, “and our commercial real estate and leasing and equipment finance businesses also grew despite the continued difficult business climate.”
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| Average Balances for the |
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| |||||
($ in thousands) |
| 2003 |
| 2002 |
| $ Change |
| % Change |
| |||
Loans and leases*: |
|
|
|
|
|
|
|
|
| |||
Consumer |
| $ | 3,047,799 |
| $ | 2,520,258 |
| $ | 527,541 |
| 20.9 | % |
Commercial real estate |
| 1,848,125 |
| 1,682,801 |
| 165,324 |
| 9.8 |
| |||
Commercial business |
| 438,681 |
| 431,542 |
| 7,139 |
| 1.7 |
| |||
Leasing and equipment finance |
| 1,039,213 |
| 961,006 |
| 78,207 |
| 8.1 |
| |||
Power Assets |
| $ | 6,373,818 |
| $ | 5,595,607 |
| $ | 778,211 |
| 13.9 |
|
*Excludes residential real estate loans and loans held for sale.
Power Liabilities®
“In this highly competitive environment, TCF continued to increase its checking account base in the first quarter of 2003 by 20,281 accounts to 1,358,594,” said Cooper. Average Power Liabilities totaled $7.7 billion for the first quarter of 2003 with an average rate paid on these deposits of .96 percent, down 43 basis points from the same period in 2002. Checking, savings and money market average balances increased $974.4 million, or 20 percent, from the first quarter of 2002; checking balances increased 15 percent, savings
5
balances increased 49 percent, and money market balances decreased 7 percent. In this low interest rate environment, TCF continued to experience a decline in certificates of deposit, as other lower-cost funding sources were available to TCF.
|
| Average Balances and Rates for the |
|
|
|
|
| ||||||
($ in thousands) |
| 2003 |
| 2002 |
| $ Change |
| % Change |
| ||||
Checking |
| $ | 2,858,113 |
| $ | 2,495,581 |
| $ | 362,532 |
| 14.5 | % | |
Savings |
| 2,057,542 |
| 1,381,574 |
| 675,968 |
| 48.9 |
| ||||
Money market |
| 886,552 |
| 950,603 |
| (64,051 | ) | (6.7 | ) | ||||
Subtotal |
| 5,802,207 |
| 4,827,758 |
| 974,449 |
| 20.2 |
| ||||
Certificates |
| 1,901,136 |
| 2,214,547 |
| (313,411 | ) | (14.2 | ) | ||||
Power Liabilities |
| $ | 7,703,343 |
| $ | 7,042,305 |
| $ | 661,038 |
| 9.4 |
| |
|
|
|
|
|
|
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|
|
| ||||
Number of checking accounts, period-end |
| 1,358,594 |
| 1,284,044 |
| 74,550 |
| 5.8 |
| ||||
Average rate on deposits |
| .96 | % | 1.39 | % | (43 | ) | bps | N/A |
| |||
N/A Not Applicable
Supermarket Banking
“Our position as the most convenient bank in our markets is enhanced by our supermarket branches. Open seven days a week with extended hours and 363 days a year, we offer our customers one-stop banking and shopping that fits their busy schedules,” said Cooper. TCF’s supermarket operation experienced a 23 percent increase in average deposits during the first quarter of 2003, compared with the first quarter of 2002, and a 16 percent gain in average consumer loans outstanding. Total supermarket banking fees and other revenue for the first quarter of 2003 were $38.4 million, an increase of $5.1 million, or 15 percent over the first quarter of 2002. TCF now has 241 full-service supermarket branches, and is the fourth largest supermarket banking branch system in the country.
In the 2003 first quarter, TCF closed five branches in Michigan when Kmart closed certain stores in that market and one other supermarket branch in Colorado. The accounts in these branches were transferred to other nearby TCF branches. In conjunction with these branch closures, TCF wrote off $711 thousand in leasehold improvements.
6
|
| At or For the Quarter Ended |
|
|
|
|
| ||||||
($ in thousands) |
| 2003 |
| 2002 |
| $ Change |
| % Change |
| ||||
Number of branches (period-end) |
| 241 |
| 236 |
| 5 |
| 2.1 | % | ||||
Number of deposit accounts (period-end) |
| 825,935 |
| 773,370 |
| 52,565 |
| 6.8 |
| ||||
Average Deposits: |
|
|
|
|
|
|
|
|
| ||||
Checking |
| $ | 718,736 |
| $ | 605,300 |
| $ | 113,436 |
| 18.7 |
| |
Savings |
| 496,801 |
| 274,692 |
| 222,109 |
| 80.9 |
| ||||
Money market |
| 107,556 |
| 127,606 |
| (20,050 | ) | (15.7 | ) | ||||
Subtotal |
| 1,323,093 |
| 1,007,598 |
| 315,495 |
| 31.3 |
| ||||
Certificates |
| 223,831 |
| 252,416 |
| (28,585 | ) | (11.3 | ) | ||||
Total Power Liabilities |
| $ | 1,546,924 |
| $ | 1,260,014 |
| $ | 286,910 |
| 22.8 |
| |
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Average rate on deposits |
| .73 | % | 1.11 | % | (38 | ) | bps | N/A |
| |||
Average consumer loans outstanding |
| $ | 362,428 |
| $ | 311,570 |
| $ | 50,858 |
| 16.3 |
| |
Total fees and other revenue |
| 38,423 |
| 33,316 |
| 5,107 |
| 15.3 |
| ||||
N/A Not Applicable
Non-interest Expense
Non-interest expense totaled $138.4 million for the 2003 first quarter, a 5 percent increase from the 2002 first quarter. The increase was primarily due to costs associated with de novo expansion, higher levels of mortgage banking production and prepayment activity, additional advertising and promotions expense focused on the expansion and retention of TCF’s deposit customer base, as well as the previously mentioned write-off of leasehold improvements related to closed supermarket branches.
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| Three Months Ended |
|
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($ in thousands) |
| 2003 |
| 2002 |
| $ Change |
| % Change |
| |||
Compensation and employee benefits |
| $ | 76,599 |
| $ | 72,292 |
| $ | 4,307 |
| 6.0 | % |
Occupancy and equipment |
| 21,599 |
| 20,262 |
| 1,337 |
| 6.6 |
| |||
Advertising and promotions |
| 6,353 |
| 5,330 |
| 1,023 |
| 19.2 |
| |||
Deposit account losses |
| 3,713 |
| 4,283 |
| (570 | ) | (13.3 | ) | |||
Other |
| 30,167 |
| 29,130 |
| 1,037 |
| 3.6 |
| |||
Total non-interest expense |
| $ | 138,431 |
| $ | 131,297 |
| $ | 7,134 |
| 5.4 |
|
Credit Quality
The provision for credit losses was $2.7 million for the first three months of 2003, down from $9.2 million in the same period in 2002, reflecting the decline in net charge-offs, non-accrual loans and leases and delinquencies. At March 31, 2003, TCF’s allowance for loan and lease losses totaled $77.8 million, or .97
7
percent of loans and leases, compared with $77 million, or .95 percent, at December 31, 2002. Net loan and lease charge-offs were $1.9 million, or .09 percent (annualized) of average loans and leases, in the 2003 first quarter, down from $8.7 million, or .43 percent (annualized), respectively in the first quarter of 2002. “TCF’s credit quality was excellent in the first quarter of 2003 and reflects our emphasis on secured lending,” said Cooper. Leasing and equipment finance net charge-offs were $971 thousand, or .37 percent (annualized) of related average loans and leases, during the 2003 first quarter down from $2.4 million, or .99 percent (annualized), for the 2002 first quarter. At March 31, 2003, TCF’s over-30-day delinquency rate was .49 percent, down from .57 percent at December 31, 2002, driven by a $6.3 million decline in commercial real estate delinquencies during the quarter. The over-30-day delinquency rate for the leasing and equipment finance portfolio was 1.01 percent at March 31, 2003, essentially unchanged from December 31, 2002. Non-accrual loans and leases were $41 million, or .51 percent of net loans and leases, at March 31, 2003, down from $43.6 million, or .54 percent, at December 31, 2002. Total non-performing assets were $67.5 million, or .56 percent of total assets, at March 31, 2003, down from $70.2 million, or .58 percent, at December 31, 2002.
|
| Three Months Ended |
| ||||
($ in thousands) |
| 2003 |
| 2002 |
| ||
Allowance for loan and lease losses: |
|
|
|
|
| ||
Balance at beginning of period |
| $ | 77,008 |
| $ | 75,028 |
|
Net (charge-offs) recoveries: |
|
|
|
|
| ||
Consumer |
| (1,045 | ) | (915 | ) | ||
Commercial real estate |
| (2 | ) | (439 | ) | ||
Commercial business |
| 84 |
| (4,996 | ) | ||
Leasing and equipment finance |
| (971 | ) | (2,378 | ) | ||
Residential real estate |
| 29 |
| 2 |
| ||
Total |
| (1,905 | ) | (8,726 | ) | ||
Provision for credit losses |
| 2,710 |
| 9,154 |
| ||
Balance at end of period |
| $ | 77,813 |
| $ | 75,456 |
|
|
|
|
|
|
| ||
Allowance for loan and lease losses as a percentage of total loans and leases |
| .97 | % | .93 | % | ||
|
|
|
|
|
| ||
Annualized net loan and lease charge-offs as a percentage of average total loans and leases |
| .09 | % | .43 | % | ||
8
Mortgage Banking
TCF’s mortgage banking operations funded $729.6 million in loans during the first quarter of 2003, up from $574.8 million in the first quarter of 2002, primarily reflecting continued record levels of refinance activity. Mortgage banking revenue decreased $4.1 million and was a negative $430 thousand in the first quarter of 2003, compared with revenue of $3.7 million for the same 2002 period. The decline in mortgage banking revenue resulted from an increase in amortization and impairment of mortgage servicing rights of $13.4 million, as TCF continued to experience strong refinance activity and high prepayments in the servicing portfolio. The increased amortization and impairment were partially offset by the increased loan production activity and the related increase in gains on sales of loans. TCF’s third party servicing portfolio was $5.4 billion at March 31, 2003, an increase of $479.8 million, or 10 percent, from March 31, 2002. The related capitalized mortgage servicing rights asset was $53 million at March 31, 2003, or .97 percent of the servicing portfolio.
|
| At March 31, |
|
|
|
|
| |||||
($ in thousands) |
| 2003 |
| 2002 |
| $ Change |
| % Change |
| |||
Third-party servicing portfolio |
| $ | 5,431,456 |
| $ | 4,951,672 |
| $ | 479,784 |
| 9.7 | % |
Weighted average note rate |
| 6.50 | % | 7.03 | % |
|
| (53 | )bps | |||
Mortgage applications in process |
| $ | 763,969 |
| $ | 444,189 |
| $ | 319,780 |
| 72.0 | % |
Mortgage servicing rights |
| $ | 52,953 |
| $ | 62,771 |
| $ | (9,818 | ) | (15.6 | ) |
- As a percentage of servicing portfolio |
| 0.97 | % | 1.27 | % |
|
| (30 | )bps | |||
- As a multiple of service fees |
| 3.0 | X | 3.9 | X |
|
|
|
| |||
|
| Three Months Ended |
|
|
|
|
| |||||
($ in thousands) |
| 2003 |
| 2002 |
| $ Change |
| % Change |
| |||
Servicing income |
| $ | 5,433 |
| $ | 4,646 |
| $ | 787 |
| 16.9 | % |
Less mortgage servicing: |
|
|
|
|
|
|
|
|
| |||
Amortization |
| 7,801 |
| 3,925 |
| 3,876 |
| 98.8 |
| |||
Impairment |
| 9,500 |
| — |
| 9,500 |
| N.M. |
| |||
Subtotal |
| 17,301 |
| 3,925 |
| 13,376 |
| N.M. |
| |||
Net servicing income (loss) |
| (11,868 | ) | 721 |
| (12,589 | ) | N.M. |
| |||
Gains on sales of loans |
| 10,626 |
| 2,144 |
| 8,482 |
| N.M. |
| |||
Other income |
| 812 |
| 793 |
| 19 |
| 2.4 |
| |||
Total mortgage banking |
| $ | (430 | ) | $ | 3,658 |
| $ | (4,088 | ) | N.M. |
|
N.M. Not meaningful.
9
Income Taxes
TCF’s income tax expense was $32.2 million for the first quarter of 2003, or 34.9% of income before income tax expense, compared with $30.7 million, or 35.3% of income before income tax expense, for the comparable 2002 period.
Capital
TCF repurchased 757,097 shares of its common stock during the 2003 first quarter at an average cost of $41.72 per share. TCF has 2.8 million shares remaining in its stock repurchase program authorized by its Board of Directors. Since 1997, TCF has repurchased 22.4 million shares of its stock, at an average cost of $32.05 per share.
($ in thousands, except per-share data) |
| At March 31, |
| At December 31, |
| ||||||
Stockholders’ equity |
| $ | 971,413 |
|
|
| $ | 977,020 |
|
|
|
Tangible equity |
| $ | 818,795 |
|
|
| $ | 823,985 |
|
|
|
Stockholders’ equity to total assets |
| 8.01 | % |
|
| 8.01 | % |
|
| ||
Tangible equity to total assets |
| 6.75 | % |
|
| 6.75 | % |
|
| ||
Book value per common share |
| $ | 13.29 |
|
|
| $ | 13.23 |
|
|
|
Tangible book value per common share |
| $ | 11.20 |
|
|
| $ | 11.16 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Total risk-based capital |
| $ | 864,199 |
| 11.09 | % | $ | 850,694 |
| 10.95 | % |
Total risk-based capital requirement |
| $ | 623,218 |
| 8.00 | % | $ | 621,657 |
| 8.00 | % |
Website Information
A live webcast of TCF’s conference call to discuss first quarter earnings will be hosted at TCF’s website, www.tcfexpress.com, on April 16, 2003 at 10:00 a.m., CDT. Additionally, the webcast is available for replay at TCF’s website after the conference call. The website also includes free access to company news releases, TCF’s annual report, quarterly reports, investor presentations and SEC filings.
10
TCF is a Wayzata, Minnesota-based national financial holding company with $12.1 billion in assets. TCF has more than 390 banking offices in Minnesota, Illinois, Michigan, Wisconsin, Colorado and Indiana. Other TCF affiliates provide leasing and equipment finance, mortgage banking, brokerage, and investments and insurance sales.
Forward-looking Information
This earnings release contains “forward-looking” statements that deal with future results, plans or performance. In addition, TCF’s management may make such statements orally to the media, or to securities analysts, investors or others. Forward-looking statements deal with matters that do not relate strictly to historical facts. TCF’s future results may differ materially from historical performance and forward-looking statements about TCF’s expected financial results or other plans are subject to a number of risks and uncertainties. These include but are not limited to possible legislative changes and adverse economic, business and competitive developments such as shrinking interest margins; deposit outflows; ability to increase the number of checking accounts and the possibility that deposit account losses (fraudulent checks, etc.) may increase; reduced demand for financial services and loan and lease products; adverse developments affecting TCF’s supermarket banking relationships or any of the supermarket chains in which TCF maintains supermarket branches; changes in accounting policies and guidelines, or monetary and fiscal policies of the federal government; changes in credit and other risks posed by TCF’s loan, lease and investment portfolios; technological, computer-related or operational difficulties; adverse changes in securities markets; the risk that TCF could be unable to effectively manage the volatility of its mortgage banking business, which could adversely affect earnings; results of litigation or other significant uncertainties. Investors should consult TCF’s Annual Report to Shareholders and periodic reports on Forms 10-Q, 10-K and 8-K for additional important information about the Company.
11
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per-share data)
(Unaudited)
|
| Three Months Ended |
|
|
|
|
| |||||
|
| 2003 |
| 2002 |
| $ Change |
| % Change |
| |||
Interest income: |
|
|
|
|
|
|
|
|
| |||
Loans and leases |
| $ | 131,721 |
| $ | 151,751 |
| $ | (20,030 | ) | (13.2 | )% |
Securities available for sale |
| 33,764 |
| 24,591 |
| 9,173 |
| 37.3 |
| |||
Loans held for sale |
| 5,226 |
| 6,320 |
| (1,094 | ) | (17.3 | ) | |||
Investments |
| 1,403 |
| 1,709 |
| (306 | ) | (17.9 | ) | |||
Total interest income |
| 172,114 |
| 184,371 |
| (12,257 | ) | (6.6 | ) | |||
Interest expense: |
|
|
|
|
|
|
|
|
| |||
Deposits |
| 18,477 |
| 24,500 |
| (6,023 | ) | (24.6 | ) | |||
Borrowings |
| 31,225 |
| 35,347 |
| (4,122 | ) | (11.7 | ) | |||
Total interest expense |
| 49,702 |
| 59,847 |
| (10,145 | ) | (17.0 | ) | |||
Net interest income |
| 122,412 |
| 124,524 |
| (2,112 | ) | (1.7 | ) | |||
Provision for credit losses |
| 2,710 |
| 9,154 |
| (6,444 | ) | (70.4 | ) | |||
Net interest income after provision for credit losses |
| 119,702 |
| 115,370 |
| 4,332 |
| 3.8 |
| |||
Non-interest income: |
|
|
|
|
|
|
|
|
| |||
Fees and service charges |
| 54,414 |
| 47,547 |
| 6,867 |
| 14.4 |
| |||
Debit card revenue |
| 12,914 |
| 10,092 |
| 2,822 |
| 28.0 |
| |||
ATM revenue |
| 10,415 |
| 10,813 |
| (398 | ) | (3.7 | ) | |||
Investments and insurance commissions |
| 3,520 |
| 3,232 |
| 288 |
| 8.9 |
| |||
Subtotal |
| 81,263 |
| 71,684 |
| 9,579 |
| 13.4 |
| |||
Leasing and equipment finance |
| 13,607 |
| 14,796 |
| (1,189 | ) | (8.0 | ) | |||
Mortgage banking |
| (430 | ) | 3,658 |
| (4,088 | ) | N.M. |
| |||
Other |
| 2,076 |
| 4,786 |
| (2,710 | ) | (56.6 | ) | |||
Fees and other revenue |
| 96,516 |
| 94,924 |
| 1,592 |
| 1.7 |
| |||
Gains on sales of securities available for sale |
| 21,137 |
| 6,044 |
| 15,093 |
| N.M. |
| |||
Gains (losses) on termination of debt |
| (6,576 | ) | — |
| (6,576 | ) | (100.0 | ) | |||
Gains on sales of branches |
| — |
| 1,962 |
| (1,962 | ) | (100.0 | ) | |||
Other non-interest income |
| 14,561 |
| 8,006 |
| 6,555 |
| 81.9 |
| |||
Total non-interest income |
| 111,077 |
| 102,930 |
| 8,147 |
| 7.9 |
| |||
Non-interest expense: |
|
|
|
|
|
|
|
|
| |||
Compensation and employee benefits |
| 76,599 |
| 72,292 |
| 4,307 |
| 6.0 |
| |||
Occupancy and equipment |
| 21,599 |
| 20,262 |
| 1,337 |
| 6.6 |
| |||
Advertising and promotions |
| 6,353 |
| 5,330 |
| 1,023 |
| 19.2 |
| |||
Other |
| 33,880 |
| 33,413 |
| 467 |
| 1.4 |
| |||
Total non-interest expense |
| 138,431 |
| 131,297 |
| 7,134 |
| 5.4 |
| |||
Income before income tax expense |
| 92,348 |
| 87,003 |
| 5,345 |
| 6.1 |
| |||
Income tax expense |
| 32,221 |
| 30,686 |
| 1,535 |
| 5.0 |
| |||
Net income |
| $ | 60,127 |
| $ | 56,317 |
| $ | 3,810 |
| 6.8 |
|
|
|
|
|
|
|
|
|
|
| |||
Net income per common share: |
|
|
|
|
|
|
|
|
| |||
Basic |
| $ | .83 |
| $ | .75 |
| $ | .08 |
| 10.7 |
|
Diluted |
| $ | .83 |
| $ | .75 |
| $ | .08 |
| 10.7 |
|
|
|
|
|
|
|
|
|
|
| |||
Dividends declared per common share |
| $ | .325 |
| $ | .2875 |
| $ | .0375 |
| 13.0 |
|
|
|
|
|
|
|
|
|
|
| |||
Average common and common equivalent shares outstanding: |
|
|
|
|
|
|
|
|
| |||
Basic |
| 72,021 |
| 74,953 |
| (2,932 | ) | (3.9 | ) | |||
Diluted |
| 72,288 |
| 75,314 |
| (3,026 | ) | (4.0 | ) | |||
N.M. Not meaningful.
12
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except per-share data)
(Unaudited)
|
| At |
| At |
| At |
| % Change from |
| |||||
|
|
|
|
| December 31, |
| March 31, |
| ||||||
|
|
|
|
|
|
| ||||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
| |||
Cash and due from banks |
| $ | 371,489 |
| $ | 416,397 |
| $ | 341,622 |
| (10.8 | )% | 8.7 | % |
Investments |
| 122,957 |
| 153,722 |
| 153,966 |
| (20.0 | ) | (20.1 | ) | |||
Securities available for sale |
| 2,442,724 |
| 2,426,794 |
| 1,556,798 |
| .7 |
| 56.9 |
| |||
Loans held for sale |
| 463,829 |
| 476,475 |
| 416,413 |
| (2.7 | ) | 11.4 |
| |||
Loans and leases: |
|
|
|
|
|
|
|
|
|
|
| |||
Consumer |
| 3,137,517 |
| 3,005,882 |
| 2,565,920 |
| 4.4 |
| 22.3 |
| |||
Commercial real estate |
| 1,858,070 |
| 1,835,788 |
| 1,721,038 |
| 1.2 |
| 8.0 |
| |||
Commercial business |
| 446,929 |
| 440,074 |
| 438,697 |
| 1.6 |
| 1.9 |
| |||
Leasing and equipment finance |
| 1,042,663 |
| 1,039,040 |
| 967,675 |
| .3 |
| 7.7 |
| |||
Subtotal |
| 6,485,179 |
| 6,320,784 |
| 5,693,330 |
| 2.6 |
| 13.9 |
| |||
Residential real estate |
| 1,568,430 |
| 1,800,344 |
| 2,458,431 |
| (12.9 | ) | (36.2 | ) | |||
Total loans and leases |
| 8,053,609 |
| 8,121,128 |
| 8,151,761 |
| (.8 | ) | (1.2 | ) | |||
Allowance for loan and lease losses |
| (77,813 | ) | (77,008 | ) | (75,456 | ) | 1.0 |
| 3.1 |
| |||
Net loans and leases |
| 7,975,796 |
| 8,044,120 |
| 8,076,305 |
| (.8 | ) | (1.2 | ) | |||
Premises and equipment |
| 248,697 |
| 243,452 |
| 224,159 |
| 2.2 |
| 10.9 |
| |||
Goodwill |
| 145,462 |
| 145,462 |
| 145,462 |
| — |
| — |
| |||
Deposit base intangibles |
| 7,156 |
| 7,573 |
| 8,826 |
| (5.5 | ) | (18.9 | ) | |||
Mortgage servicing rights |
| 52,953 |
| 62,644 |
| 62,771 |
| (15.5 | ) | (15.6 | ) | |||
Other assets |
| 296,209 |
| 225,430 |
| 184,261 |
| 31.4 |
| 60.8 |
| |||
|
| $ | 12,127,272 |
| $ | 12,202,069 |
| $ | 11,170,583 |
| (.6 | ) | 8.6 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
| |||
Deposits: |
|
|
|
|
|
|
|
|
|
|
| |||
Checking |
| $ | 3,070,512 |
| $ | 2,864,896 |
| $ | 2,675,060 |
| 7.2 |
| 14.8 |
|
Savings |
| 2,108,587 |
| 2,041,723 |
| 1,486,089 |
| 3.3 |
| 41.9 |
| |||
Money market |
| 888,996 |
| 884,614 |
| 947,345 |
| .5 |
| (6.2 | ) | |||
Subtotal |
| 6,068,095 |
| 5,791,233 |
| 5,108,494 |
| 4.8 |
| 18.8 |
| |||
Certificates |
| 1,897,243 |
| 1,918,755 |
| 2,185,478 |
| (1.1 | ) | (13.2 | ) | |||
Total deposits |
| 7,965,338 |
| 7,709,988 |
| 7,293,972 |
| 3.3 |
| 9.2 |
| |||
Short-term borrowings |
| 774,603 |
| 842,051 |
| 324,575 |
| (8.0 | ) | 138.7 |
| |||
Long-term borrowings |
| 1,993,287 |
| 2,268,244 |
| 2,286,137 |
| (12.1 | ) | (12.8 | ) | |||
Total borrowings |
| 2,767,890 |
| 3,110,295 |
| 2,610,712 |
| (11.0 | ) | 6.0 |
| |||
Accrued expenses and other liabilities |
| 422,631 |
| 404,766 |
| 344,052 |
| 4.4 |
| 22.8 |
| |||
Total liabilities |
| 11,155,859 |
| 11,225,049 |
| 10,248,736 |
| (.6 | ) | 8.9 |
| |||
Stockholders’ equity: |
|
|
|
|
|
|
|
|
|
|
| |||
Common stock, par value $.01 per share, 280,000,000 shares authorized; 92,539,643; 92,638,937 and 92,657,300 shares issued |
| 925 |
| 926 |
| 927 |
| (.1 | ) | (.2 | ) | |||
Additional paid-in capital |
| 516,159 |
| 518,813 |
| 520,199 |
| (.5 | ) | (.8 | ) | |||
Retained earnings, subject to certain restrictions |
| 1,148,361 |
| 1,111,955 |
| 999,980 |
| 3.3 |
| 14.8 |
| |||
Accumulated other comprehensive income (loss) |
| 31,462 |
| 46,102 |
| (1,871 | ) | (31.8 | ) | N.M. |
| |||
Treasury stock at cost, 19,420,229; 18,783,051 and 16,183,703 shares, and other |
| (725,494 | ) | (700,776 | ) | (597,388 | ) | 3.5 |
| 21.4 |
| |||
Total stockholders’ equity |
| 971,413 |
| 977,020 |
| 921,847 |
| (.6 | ) | 5.4 |
| |||
|
| $ | 12,127,272 |
| $ | 12,202,069 |
| $ | 11,170,583 |
| (.6 | ) | 8.6 |
|
N.M. Not meaningful.
13
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CREDIT QUALITY DATA
(Dollars in thousands)
(Unaudited)
Allowance for loan and lease losses:
|
| At or For the Three Months Ended March 31, 2003 |
| At or For the Year Ended December 31, 2002 |
| ||||||||||||||||
|
|
|
| Allowance |
|
|
|
|
|
|
| Allowance |
|
|
|
|
| ||||
|
|
|
|
| Net Charge-offs(1) |
|
|
|
| Net Charge-offs |
| ||||||||||
|
| Allowance |
|
| $ |
| % |
| Allowance |
|
| $ |
| % |
| ||||||
Consumer |
| $ | 8,505 |
| .27 | % | $ | 1,045 |
| .14 |
| $ | 8,532 |
| .28 | % | $ | 3,974 |
| .15 |
|
Commercial real estate |
| 24,388 |
| 1.31 |
| 2 |
| — |
| 22,176 |
| 1.21 |
| 2,138 |
| .12 |
| ||||
Commercial business |
| 13,868 |
| 3.10 |
| (84 | ) | (.08 | ) | 15,910 |
| 3.62 |
| 5,898 |
| 1.35 |
| ||||
Leasing and equipment finance |
| 13,637 |
| 1.31 |
| 971 |
| .37 |
| 12,881 |
| 1.24 |
| 7,966 |
| .80 |
| ||||
Unallocated |
| 16,139 |
| n/a |
| — |
| n/a |
| 16,139 |
| n/a |
| — |
| n/a |
| ||||
Subtotal |
| 76,537 |
| 1.18 |
| 1,934 |
| .12 |
| 75,638 |
| 1.20 |
| 19,976 |
| .34 |
| ||||
Residential real estate |
| 1,276 |
| .08 |
| (29 | ) | (.01 | ) | 1,370 |
| .08 |
| 50 |
| — |
| ||||
Total |
| $ | 77,813 |
| .97 |
| $ | 1,905 |
| .09 |
| $ | 77,008 |
| .95 |
| $ | 20,026 |
| .25 |
|
Non-performing assets:
|
| At |
| At |
| At |
| $ Change from |
| |||||||
|
|
|
|
| December 31, |
| March 31, |
| ||||||||
|
|
|
|
|
|
| ||||||||||
Non-accrual loans and leases: |
|
|
|
|
|
|
|
|
|
|
| |||||
Consumer |
| $ | 11,496 |
| $ | 11,163 |
| $ | 15,256 |
| $ | 333 |
| $ | (3,760 | ) |
Commercial real estate |
| 2,984 |
| 3,213 |
| 4,885 |
| (229 | ) | (1,901 | ) | |||||
Commercial business |
| 4,642 |
| 4,777 |
| 5,100 |
| (135 | ) | (458 | ) | |||||
Leasing and equipment finance, net |
| 15,664 |
| 17,127 |
| 17,022 |
| (1,463 | ) | (1,358 | ) | |||||
Residential real estate |
| 5,501 |
| 5,798 |
| 7,292 |
| (297 | ) | (1,791 | ) | |||||
Total non-accrual loans and leases, net |
| 40,287 |
| 42,078 |
| 49,555 |
| (1,791 | ) | (9,268 | ) | |||||
Non-recourse discounted lease rentals |
| 700 |
| 1,562 |
| 189 |
| (862 | ) | 511 |
| |||||
Total non-accrual loans and leases, gross |
| 40,987 |
| 43,640 |
| 49,744 |
| (2,653 | ) | (8,757 | ) | |||||
Other real estate owned: |
|
|
|
|
|
|
|
|
|
|
| |||||
Residential real estate |
| 17,458 |
| 16,479 |
| 12,983 |
| 979 |
| 4,475 |
| |||||
Commercial real estate |
| 9,042 |
| 10,093 |
| 7,779 |
| (1,051 | ) | 1,263 |
| |||||
Total other real estate owned |
| 26,500 |
| 26,572 |
| 20,762 |
| (72 | ) | 5,738 |
| |||||
Total non-performing assets, gross |
| $ | 67,487 |
| $ | 70,212 |
| $ | 70,506 |
| $ | (2,725 | ) | $ | (3,019 | ) |
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total non-performing assets, net |
| $ | 66,787 |
| $ | 68,650 |
| $ | 70,317 |
| $ | (1,863 | ) | $ | (3,530 | ) |
Delinquency data (2):
|
| At March 31, |
| At December 31, |
| At March 31, |
| |||||||||
|
| Principal |
| % of |
| Principal |
| % of |
| Principal |
| % of |
| |||
Consumer |
| $ | 18,255 |
| .58 | % | $ | 19,067 |
| .64 | % | $ | 16,718 |
| .66 | % |
Commercial real estate |
| 548 |
| .03 |
| 6,835 |
| .37 |
| 790 |
| .05 |
| |||
Commercial business |
| 611 |
| .14 |
| 555 |
| .13 |
| 868 |
| .20 |
| |||
Leasing and equipment finance |
| 10,416 |
| 1.01 |
| 10,159 |
| 1.00 |
| 13,819 |
| 1.45 |
| |||
Residential real estate |
| 9,503 |
| .61 |
| 9,708 |
| .54 |
| 12,112 |
| .49 |
| |||
Total |
| $ | 39,333 |
| .49 |
| $ | 46,324 |
| .57 |
| $ | 44,307 |
| .55 |
|
Potential Problem Loans (3):
|
| At |
| At |
| At |
| $ Change from |
| |||||||
(Dollars in thousands) |
|
|
|
| December 31, |
| March 31, |
| ||||||||
|
|
|
|
|
|
| ||||||||||
Consumer |
| $ | 4,500 |
| $ | 4,500 |
| $ | 715 |
| $ | — |
| $ | 3,785 |
|
Commercial real estate |
| 29,522 |
| 30,132 |
| 10,781 |
| (610 | ) | 18,741 |
| |||||
Commercial business |
| 27,092 |
| 33,408 |
| 38,293 |
| (6,316 | ) | (11,201 | ) | |||||
Leasing and equipment finance |
| 18,284 |
| 15,314 |
| 13,055 |
| 2,970 |
| 5,229 |
| |||||
|
| $ | 79,398 |
| $ | 83,354 |
| $ | 62,844 |
| $ | (3,956 | ) | $ | 16,554 |
|
(1) Annualized.
(2) Excludes non-accrual loans and leases.
(3) Consists of loans and leases classified for regulatory purposes as substandard and reflect the distinct possibility, but not probability, that they will become non-performing or that TCF will not be able to collect all amounts due according to the contractual terms of the loan or lease agreement.
14
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Dollars In Thousands)
(Unaudited)
|
| Three Months Ended March 31, |
| ||||||||||||||
|
| 2003 |
| 2002 |
| ||||||||||||
|
| Average |
| Interest |
| Yields and |
| Average |
| Interest |
| Yields and |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Investments |
| $ | 118,828 |
| $ | 1,403 |
| 4.72 | % | $ | 155,725 |
| $ | 1,709 |
| 4.39 | % |
Securities available for sale |
| 2,341,002 |
| 33,764 |
| 5.77 |
| 1,513,146 |
| 24,591 |
| 6.50 |
| ||||
Loans held for sale |
| 488,110 |
| 5,226 |
| 4.28 |
| 440,661 |
| 6,320 |
| 5.74 |
| ||||
Loans and leases: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Consumer |
| 3,047,799 |
| 51,653 |
| 6.78 |
| 2,520,258 |
| 50,691 |
| 8.05 |
| ||||
Commercial real estate |
| 1,848,125 |
| 28,054 |
| 6.07 |
| 1,682,801 |
| 28,837 |
| 6.85 |
| ||||
Commercial business |
| 438,681 |
| 4,775 |
| 4.35 |
| 431,542 |
| 5,736 |
| 5.32 |
| ||||
Leasing and equipment finance |
| 1,039,213 |
| 20,279 |
| 7.81 |
| 961,006 |
| 21,943 |
| 9.13 |
| ||||
Subtotal |
| 6,373,818 |
| 104,761 |
| 6.57 |
| 5,595,607 |
| 107,207 |
| 7.66 |
| ||||
Residential real estate |
| 1,680,170 |
| 26,960 |
| 6.42 |
| 2,599,509 |
| 44,544 |
| 6.85 |
| ||||
Total loans and leases |
| 8,053,988 |
| 131,721 |
| 6.54 |
| 8,195,116 |
| 151,751 |
| 7.41 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total interest-earning assets |
| 11,001,928 |
| 172,114 |
| 6.26 |
| 10,304,648 |
| 184,371 |
| 7.16 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Other assets |
| 1,075,990 |
|
|
|
|
| 901,718 |
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total assets |
| $ | 12,077,918 |
|
|
|
|
| $ | 11,206,366 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Non-interest bearing deposits |
| $ | 2,083,099 |
|
|
|
|
| $ | 1,760,182 |
|
|
|
|
| ||
Interest-bearing deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Checking |
| 990,411 |
| 304 |
| .12 |
| 873,251 |
| 370 |
| .17 |
| ||||
Savings |
| 1,842,145 |
| 3,618 |
| .79 |
| 1,243,722 |
| 2,418 |
| .78 |
| ||||
Money market |
| 886,552 |
| 1,544 |
| .70 |
| 950,603 |
| 2,660 |
| 1.12 |
| ||||
Subtotal |
| 3,719,108 |
| 5,466 |
| .59 |
| 3,067,576 |
| 5,448 |
| .71 |
| ||||
Certificates |
| 1,901,136 |
| 13,011 |
| 2.74 |
| 2,214,547 |
| 19,052 |
| 3.44 |
| ||||
Total interest-bearing deposits |
| 5,620,244 |
| 18,477 |
| 1.32 |
| 5,282,123 |
| 24,500 |
| 1.86 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total deposits |
| 7,703,343 |
| 18,477 |
| .96 |
| 7,042,305 |
| 24,500 |
| 1.39 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Borrowings: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Short-term borrowings |
| 869,735 |
| 2,830 |
| 1.30 |
| 622,003 |
| 2,753 |
| 1.77 |
| ||||
Long-term borrowings |
| 2,080,713 |
| 28,395 |
| 5.46 |
| 2,289,309 |
| 32,594 |
| 5.69 |
| ||||
Total borrowings |
| 2,950,448 |
| 31,225 |
| 4.23 |
| 2,911,312 |
| 35,347 |
| 4.86 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total deposits and borrowings |
| 10,653,791 |
| 49,702 |
| 1.87 |
| 9,953,617 |
| 59,847 |
| 2.41 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Other liabilities |
| 450,534 |
|
|
|
|
| 339,894 |
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total liabilities |
| 11,104,325 |
|
|
|
|
| 10,293,511 |
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Stockholders’ equity |
| 973,593 |
|
|
|
|
| 912,855 |
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total liabilities and stockholders’ equity |
| $ | 12,077,918 |
|
|
|
|
| $ | 11,206,366 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net interest income and margin |
|
|
| $ | 122,412 |
| 4.45 | % |
|
| $ | 124,524 |
| 4.83 | % | ||
(1) Annualized.
15
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME AND FINANCIAL RATIOS
(In thousands, except per-share data)
(Unaudited)
|
| Three Months Ended |
| |||||||||||||
|
| Mar. 31, |
| Dec. 31, |
| Sep. 30, |
| Jun. 30, |
| Mar. 31, |
| |||||
Interest income: |
|
|
|
|
|
|
|
|
|
|
| |||||
Loans and leases |
| $ | 131,721 |
| $ | 139,807 |
| $ | 145,424 |
| $ | 148,711 |
| $ | 151,751 |
|
Securities available for sale |
| 33,764 |
| 34,324 |
| 30,814 |
| 28,543 |
| 24,591 |
| |||||
Loans held for sale |
| 5,226 |
| 6,492 |
| 4,436 |
| 5,216 |
| 6,320 |
| |||||
Investments |
| 1,403 |
| 1,729 |
| 1,732 |
| 1,764 |
| 1,709 |
| |||||
Total interest income |
| 172,114 |
| 182,352 |
| 182,406 |
| 184,234 |
| 184,371 |
| |||||
Interest expense: |
|
|
|
|
|
|
|
|
|
|
| |||||
Deposits |
| 18,477 |
| 21,280 |
| 24,282 |
| 25,324 |
| 24,500 |
| |||||
Borrowings |
| 31,225 |
| 34,449 |
| 34,355 |
| 34,601 |
| 35,347 |
| |||||
Total interest expense |
| 49,702 |
| 55,729 |
| 58,637 |
| 59,925 |
| 59,847 |
| |||||
Net interest income |
| 122,412 |
| 126,623 |
| 123,769 |
| 124,309 |
| 124,524 |
| |||||
Provision for credit losses |
| 2,710 |
| 4,067 |
| 4,071 |
| 4,714 |
| 9,154 |
| |||||
Net interest income after provision for credit losses |
| 119,702 |
| 122,556 |
| 119,698 |
| 119,595 |
| 115,370 |
| |||||
Non-interest income: |
|
|
|
|
|
|
|
|
|
|
| |||||
Fees and service charges |
| 54,414 |
| 62,359 |
| 59,041 |
| 57,104 |
| 47,547 |
| |||||
Debit card revenue |
| 12,914 |
| 12,805 |
| 11,815 |
| 11,511 |
| 10,092 |
| |||||
ATM revenue |
| 10,415 |
| 10,734 |
| 12,036 |
| 11,760 |
| 10,813 |
| |||||
Investments and insurance commissions |
| 3,520 |
| 4,909 |
| 4,272 |
| 3,435 |
| 3,232 |
| |||||
Subtotal |
| 81,263 |
| 90,807 |
| 87,164 |
| 83,810 |
| 71,684 |
| |||||
Leasing and equipment finance |
| 13,607 |
| 11,857 |
| 13,136 |
| 11,839 |
| 14,796 |
| |||||
Mortgage banking |
| (430 | ) | 1,868 |
| (1,373 | ) | 2,826 |
| 3,658 |
| |||||
Other |
| 2,076 |
| 1,525 |
| 3,648 |
| 3,313 |
| 4,786 |
| |||||
Fees and other revenue |
| 96,516 |
| 106,057 |
| 102,575 |
| 101,788 |
| 94,924 |
| |||||
Gains on sales of securities available for sale |
| 21,137 |
| 2,830 |
| 2,662 |
| — |
| 6,044 |
| |||||
Gains (losses) on termination of debt |
| (6,576 | ) | — |
| — |
| — |
| — |
| |||||
Gains on sales of branches |
| — |
| — |
| — |
| — |
| 1,962 |
| |||||
Other non-interest income |
| 14,561 |
| 2,830 |
| 2,662 |
| — |
| 8,006 |
| |||||
Total non-interest income |
| 111,077 |
| 108,887 |
| 105,237 |
| 101,788 |
| 102,930 |
| |||||
Non-interest expense: |
|
|
|
|
|
|
|
|
|
|
| |||||
Compensation and employee benefits |
| 76,599 |
| 76,314 |
| 72,804 |
| 72,885 |
| 72,292 |
| |||||
Occupancy and equipment |
| 21,599 |
| 21,799 |
| 20,539 |
| 20,531 |
| 20,262 |
| |||||
Advertising and promotions |
| 6,353 |
| 5,121 |
| 5,640 |
| 5,803 |
| 5,330 |
| |||||
Other |
| 33,880 |
| 37,729 |
| 35,240 |
| 32,667 |
| 33,413 |
| |||||
Total non-interest expense |
| 138,431 |
| 140,963 |
| 134,223 |
| 131,886 |
| 131,297 |
| |||||
Income before income tax expense |
| 92,348 |
| 90,480 |
| 90,712 |
| 89,497 |
| 87,003 |
| |||||
Income tax expense |
| 32,221 |
| 30,704 |
| 31,845 |
| 31,526 |
| 30,686 |
| |||||
Net income |
| $ | 60,127 |
| $ | 59,776 |
| $ | 58,867 |
| $ | 57,971 |
| $ | 56,317 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net income per common share: |
|
|
|
|
|
|
|
|
|
|
| |||||
Basic |
| $ | .83 |
| $ | .83 |
| $ | .81 |
| $ | .78 |
| $ | .75 |
|
Diluted |
| $ | .83 |
| $ | .82 |
| $ | .80 |
| $ | .78 |
| $ | .75 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Dividends declared per common share |
| $ | .325 |
| $ | .2875 |
| $ | .2875 |
| $ | .2875 |
| $ | .2875 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Financial Ratios (1): |
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Return on average assets |
| 1.99 | % | 1.97 | % | 2.03 | % | 2.04 | % | 2.01 | % | |||||
Return on average common equity |
| 24.70 |
| 25.17 |
| 25.53 |
| 25.36 |
| 24.68 |
| |||||
Average total equity to average assets |
| 8.06 |
| 7.82 |
| 7.96 |
| 8.03 |
| 8.15 |
| |||||
Average tangible equity to average assets |
| 6.80 |
| 6.56 |
| 6.64 |
| 6.68 |
| 6.77 |
| |||||
Net interest margin |
| 4.45 |
| 4.59 |
| 4.68 |
| 4.76 |
| 4.83 |
| |||||
(1) Annualized.
16
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED QUARTERLY AVERAGE BALANCE SHEETS
(Dollars in thousands, except per-share data)
(Unaudited)
|
| Mar. 31, |
| Dec. 31, |
| Sept. 30, |
| Jun. 30, |
| Mar. 31, |
| |||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Cash and due from banks |
| $ | 332,705 |
| $ | 352,540 |
| $ | 330,864 |
| $ | 319,076 |
| $ | 340,522 |
|
Investments |
| 118,828 |
| 154,252 |
| 155,171 |
| 154,313 |
| 155,725 |
| |||||
Securities available for sale |
| 2,341,002 |
| 2,288,409 |
| 1,934,711 |
| 1,774,182 |
| 1,513,146 |
| |||||
Loans held for sale |
| 488,110 |
| 552,687 |
| 387,134 |
| 369,649 |
| 440,661 |
| |||||
Loans and leases: |
|
|
|
|
|
|
|
|
|
|
| |||||
Consumer |
| 3,047,799 |
| 2,933,094 |
| 2,765,167 |
| 2,627,616 |
| 2,520,258 |
| |||||
Commercial real estate |
| 1,848,125 |
| 1,800,915 |
| 1,769,144 |
| 1,730,419 |
| 1,682,801 |
| |||||
Commercial business |
| 438,681 |
| 428,466 |
| 438,350 |
| 443,596 |
| 431,542 |
| |||||
Leasing and equipment finance |
| 1,039,213 |
| 1,025,439 |
| 1,009,301 |
| 986,082 |
| 961,006 |
| |||||
Subtotal |
| 6,373,818 |
| 6,187,914 |
| 5,981,962 |
| 5,787,713 |
| 5,595,607 |
| |||||
Residential real estate |
| 1,680,170 |
| 1,844,653 |
| 2,125,902 |
| 2,349,500 |
| 2,599,509 |
| |||||
Total loans and leases |
| 8,053,988 |
| 8,032,567 |
| 8,107,864 |
| 8,137,213 |
| 8,195,116 |
| |||||
Allowance for loan and lease losses |
| (77,509 | ) | (76,280 | ) | (75,510 | ) | (73,721 | ) | (76,159 | ) | |||||
Net loans and leases |
| 7,976,479 |
| 7,956,287 |
| 8,032,354 |
| 8,063,492 |
| 8,118,957 |
| |||||
Premises and equipment |
| 247,453 |
| 239,226 |
| 230,392 |
| 226,697 |
| 221,153 |
| |||||
Goodwill |
| 145,462 |
| 145,462 |
| 145,462 |
| 145,462 |
| 145,462 |
| |||||
Deposit base intangibles |
| 7,362 |
| 7,778 |
| 8,197 |
| 8,617 |
| 9,035 |
| |||||
Mortgage servicing rights |
| 61,561 |
| 63,694 |
| 66,406 |
| 65,544 |
| 60,957 |
| |||||
Other assets |
| 358,956 |
| 383,817 |
| 294,646 |
| 255,727 |
| 200,748 |
| |||||
|
| $ | 12,077,918 |
| $ | 12,144,152 |
| $ | 11,585,337 |
| $ | 11,382,759 |
| $ | 11,206,366 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Deposits: |
|
|
|
|
|
|
|
|
|
|
| |||||
Checking |
| $ | 2,858,113 |
| $ | 2,774,972 |
| $ | 2,676,780 |
| $ | 2,651,200 |
| $ | 2,495,581 |
|
Savings |
| 2,057,542 |
| 2,019,908 |
| 1,855,037 |
| 1,613,791 |
| 1,381,574 |
| |||||
Money market |
| 886,552 |
| 885,493 |
| 911,317 |
| 930,961 |
| 950,603 |
| |||||
Subtotal |
| 5,802,207 |
| 5,680,373 |
| 5,443,134 |
| 5,195,952 |
| 4,827,758 |
| |||||
Certificates |
| 1,901,136 |
| 1,957,574 |
| 2,084,474 |
| 2,181,326 |
| 2,214,547 |
| |||||
Total deposits |
| 7,703,343 |
| 7,637,947 |
| 7,527,608 |
| 7,377,278 |
| 7,042,305 |
| |||||
Short-term borrowings |
| 869,735 |
| 827,590 |
| 444,717 |
| 400,590 |
| 622,003 |
| |||||
Long-term borrowings |
| 2,080,713 |
| 2,265,663 |
| 2,275,757 |
| 2,281,452 |
| 2,289,309 |
| |||||
Total borrowings |
| 2,950,448 |
| 3,093,253 |
| 2,720,474 |
| 2,682,042 |
| 2,911,312 |
| |||||
Accrued expenses and other liabilities |
| 450,534 |
| 462,862 |
| 414,820 |
| 409,246 |
| 339,894 |
| |||||
Total liabilities |
| 11,104,325 |
| 11,194,062 |
| 10,662,902 |
| 10,468,566 |
| 10,293,511 |
| |||||
Stockholders’ equity: |
|
|
|
|
|
|
|
|
|
|
| |||||
Common stock |
| 926 |
| 926 |
| 926 |
| 927 |
| 927 |
| |||||
Additional paid-in capital |
| 515,972 |
| 518,585 |
| 518,246 |
| 520,698 |
| 518,572 |
| |||||
Retained earnings |
| 1,125,330 |
| 1,087,530 |
| 1,050,085 |
| 1,014,865 |
| 977,886 |
| |||||
Accumulated other comprehensive income |
| 40,928 |
| 38,265 |
| 23,327 |
| 13,807 |
| 6,656 |
| |||||
Treasury stock at cost and other |
| (709,563 | ) | (695,216 | ) | (670,149 | ) | (636,104 | ) | (591,186 | ) | |||||
Total stockholders’ equity |
| 973,593 |
| 950,090 |
| 922,435 |
| 914,193 |
| 912,855 |
| |||||
|
| $ | 12,077,918 |
| $ | 12,144,152 |
| $ | 11,585,337 |
| $ | 11,382,759 |
| $ | 11,206,366 |
|
17