TCF Reports Quarterly Net Income of $23.6 Million, or 15 Cents Per Share

TCF Reports Quarterly Net Income of $23.6 Million, or 15 Cents Per Share

WAYZATA, Minn.--(BUSINESS WIRE)-- TCF Financial Corporation (NYS: TCB) :

2012 HIGHLIGHTS


-Net interest margin of 4.65 percent, up 66 basis points from 2011

-Total loans and leases of $15.4 billion, up 9 percent from 2011

-Average deposits increased $1.2 billion, or 10.1 percent from 2011

FOURTH QUARTER HIGHLIGHTS

-Net interest margin of 4.79 percent, up 87 basis points from the fourth quarter of 2011

-Pre-tax pre-provision profit of $87.2 million, up 3.5 percent from the fourth quarter of 2011

-Average deposits increased $1.7 billion, or 13.7 percent from the fourth quarter of 2011

-Non-performing assets decreased $65.8 million, or 12.1 percent from the third quarter of 2012

-Over 60-day accruing delinquent loans improved by $3.2 million, or 3.2 percent from the third quarter of 2012

-Announced common and preferred stock dividend payments, payable February 28, 2013 and March 1, 2013, respectively

Summary of Financial Results

Table 1

($ in thousands, except per-share data)

Percent Change

4Q

3Q

4Q

4Q12 vs

4Q12 vs

YTD

YTD

Percent

2012

2012

2011

3Q12

4Q11

2012(3)

2011

Change

Net income (loss)

$

23,551

$

9,322

$

16,443

152.6

%

43.2

%

$

(218,490

)

$

109,394

N.M.

Net interest income

201,063

200,559

173,434

.3

15.9

780,019

699,688

11.5

%

Pre-tax pre-provision profit(1)

87,151

115,809

84,191

(24.7

)

3.5

381,656

379,671

.5

Diluted earnings (loss) per common share

.15

.06

.10

150.0

50.0

(1.37

)

.71

N.M.

Financial Ratios(2)

Return on average assets

.63

%

.30

%

.37

%

(1.14

)

%

.61

%

Return on average common equity

5.93

2.36

3.55

(13.33

)

6.32

Net interest margin

4.79

4.85

3.92

4.65

3.99

Net charge-offs as a percentage of average loans and leases

1.18

2.74

1.63

1.54

1.45

N.M. = Not meaningful.

(1) Pre-tax pre-provision profit (''PTPP'') is calculated as total revenues less non-interest expense. 2012 PTPP excludes the non-recurring net loss of $473.8 million related to the balance sheet repositioning completed in the first quarter of 2012.

(2) Annualized.

(3) Includes a net, after-tax charge of $295.8 million, or $1.87 per share, related to the balance sheet repositioning.

TCF Financial Corporation ("TCF") (NYS: TCB) today reported net income for the fourth quarter of 2012 of $23.6 million, compared with net income of $16.4 million in the fourth quarter of 2011 and net income of $9.3 million for the third quarter of 2012. Diluted earnings per common share was 15 cents for the fourth quarter of 2012, compared with 10 cents in the fourth quarter of 2011 and 6 cents in the third quarter of 2012.

TCF reported a net loss of $218.5 million for the year ended December 31, 2012, compared with net income of $109.4 million for the same period in 2011. The net loss for the year ended December 31, 2012 included (i) a net after-tax charge of $295.8 million, or $1.87 per common share, related to a balance sheet repositioning involving certain investments and borrowings and (ii) a net after-tax charge of $20.6 million, or 13 cents per common share, related to the implementation of clarifying bankruptcy-related regulatory guidance adopted in the third quarter, which requires loans subject to a borrower's discharge from personal liability where the borrower has not reaffirmed the debt following Chapter 7 bankruptcy to be reported as non-accrual loans, and written down to the estimated collateral value, regardless of delinquency status. Diluted loss per common share for 2012 was $1.37, compared with diluted earnings per common share of 71 cents in 2011.

Chairman's Statement

"TCF's building and investing year was highlighted by several key actions, including the balance sheet repositioning, growth of our national lending businesses and a return to TCF Free Checking," said William A. Cooper, Chairman and Chief Executive Officer. "I am pleased by the progress TCF made throughout 2012. In the fourth quarter we completed our second preferred stock issuance in 2012, saw continued checking account growth, reduced charge-offs and provision and an overall improvement in credit quality.

"The asset growth in our national platforms, the encouraging signs we are seeing in credit quality, and the execution on TCF Free Checking have provided significant momentum. I am confident that we will be able to continue to execute on the strategies we have put in place and deliver results to our stockholders."

Revenue

Total Revenue

Table 2

Percent Change

4Q

3Q

4Q

4Q12 vs

4Q12 vs

YTD

YTD

Percent

($ in thousands)

2012

2012

2011

3Q12

4Q11

2012

2011

Change

Net interest income

$

201,063

$

200,559

$

173,434

.3

%

15.9

%

$

780,019

$

699,688

11.5

%

Fees and other revenue:

Fees and service charges

44,262

43,745

51,002

1.2

(13.2

)

177,953

219,363

(18.9

)

Card revenue

12,974

12,927

13,643

.4

(4.9

)

52,638

96,147

(45.3

)

ATM revenue

5,584

6,122

6,608

(8.8

)

(15.5

)

24,181

27,927

(13.4

)

Total banking fees

62,820

62,794

71,253

N.M.

(11.8

)

254,772

343,437

(25.8

)

Leasing and equipment finance

26,149

20,498

18,492

27.6

41.4

92,721

89,167

4.0

Gains on sales of auto loans

6,869

7,486

1,133

(8.2

)

N.M.

22,101

1,133

N.M.

Gains on sales of consumer real estate loans

854

4,559

-

(81.3

)

N.M.

5,413

-

N.M.

Other

3,973

3,688

1,570

7.7

153.1

13,184

3,434

N.M.

Total fees and other revenue

100,665

99,025

92,448

1.7

8.9

388,191

437,171

(11.2

)

Subtotal

301,728

299,584

265,882

.7

13.5

1,168,210

1,136,859

2.8

(Losses) gains on securities, net

(528

)

13,033

5,842

(104.1

)

(109.0

)

102,232

7,263

N.M.

Total revenue

$

301,200

$

312,617

$

271,724

(3.7

)

10.8

$

1,270,442

$

1,144,122

11.0

Net interest margin(1)

4.79

%

4.85

%

3.92

%

4.65

%

3.99

%

Fees and other revenue as a % of total revenue

33.42

31.68

34.02

30.56

38.21

N.M. = Not meaningful.

(1) Annualized.

Net Interest Income

  • Net interest income for the fourth quarter of 2012 increased $27.6 million, or 15.9 percent, compared with the fourth quarter of 2011. The increase was due to the balance sheet repositioning completed in the first quarter of 2012, which resulted in a $37.3 million reduction to the cost of borrowings, partially offset by a $17.1 million reduction of interest income on lower levels of mortgage-backed securities. Additionally, net interest income increased due to higher average loan balances in our national lending businesses, which includes leasing and equipment finance, inventory finance and auto finance businesses. These increases were offset by reduced interest income due to both lower yields and lower average balances of consumer real estate and commercial loans.

  • Net interest margin in the fourth quarter of 2012 was 4.79 percent, compared with 3.92 percent in the fourth quarter of 2011 and 4.85 percent in the third quarter of 2012. The increase from the fourth quarter of 2011 was primarily due to lower average costs of borrowings as a result of the balance sheet repositioning. The decrease from the third quarter of 2012 was due to lower yields on new originations in the national lending portfolio in the current low rate environment.

Non-inte