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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

 FORM 8-K
 
 CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported):
April 27, 2020
  TCF033119FORM8KEARNINIMAGE.JPG
 
TCF FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Michigan
000-08185
38-2022454
(State or other jurisdiction of
incorporation)
(Commission File Number)
(IRS Employer Identification No.)
 
333 W. Fort Street, Suite 1800, Detroit, Michigan 48226
(Address of principal executive offices, including Zip Code)
 
(800) 867-9757
(Registrant’s telephone number, including area code)
  
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
(Title of each class)
(Trading Symbol(s))
(Name of exchange on which registered)
Common Stock (par value $1 per share)
TCF
The NASDAQ Stock Market
Depositary shares, each representing a 1/1000th interest in a share of the 5.70% Series C Non-Cumulative Perpetual Preferred Stock
TCFCP
The NASDAQ Stock Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐




Item 2.02 Results of Operations and Financial Condition.
 
TCF Financial Corporation (the "Corporation") issued an earnings press release dated April 27, 2020, attached to this Form 8-K as Exhibit 99.1, announcing its results of operations for the quarter ended March 31, 2020.

In addition, the Corporation is providing additional information in a slide presentation prepared for use with the earnings press release. This information includes selected financial and operational information through the first quarter of 2020 and does not represent a complete set of financial statements and related notes prepared in conformity with generally accepted accounting principles ("GAAP"). Most, but not all, of the selected financial information filed herein is derived from the Corporation’s consolidated financial statements and related notes prepared in accordance with GAAP and management’s discussion and analysis of financial condition and results of operations included in the Corporation’s reports on Forms 10-K and 10-Q. The Corporation’s annual financial statements are subject to independent audit. These materials are dated April 27, 2020 and TCF does not undertake to update the materials after that date.

Exhibits 99.1 and 99.2 provided with this Form 8-K shall each be deemed to be “filed” for purposes of the Securities Exchange Act of 1934, and are also available on the Investor Relations section of the Corporation’s website at http://ir.tcfbank.com. The Corporation’s Annual Report to Shareholders and its reports on Forms 10-K, 10-Q and 8-K and other publicly available information should be consulted for other important information about the Corporation.


Item 8.01 Other Events.

The following risk factor supplements the "Risk Factors" section in our 2019 Annual Report and item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019.

We face risks and uncertainties related to the outbreak of COVID-19

In March 2020, the outbreak of COVID-19 caused by a novel strain of the coronavirus was recognized as a pandemic by the World Health Organization. Shortly thereafter, the President of the United States declared a National Emergency throughout the United States attributable to such outbreak. The outbreak has become increasingly widespread in the United States, including in the markets in which we operate. We are currently taking steps to assess the effects, and mitigate the adverse consequences to our businesses, of the outbreak; though the magnitude of the impact remains to be seen, our businesses will be adversely impacted by the outbreak of COVID-19.

As previously disclosed in Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019, our operations and profitability are impacted by business and economic conditions generally, as well as those in the primary banking markets in which we operate. The COVID-19 pandemic has resulted in historic job losses and decreases in economic activity. While the duration and full extent of job losses and magnitude of economic dislocation are not yet known, it is clear that they may impact the ability of individuals and small businesses to make payments, value of underlying collateral and the ability of guarantors to make payments in the case of default, which may decrease consumer demand for our products and services, reduce our ability to access capital, and otherwise adversely impact the financial condition, results of operations, prospects of our businesses and our credit ratings. While the United States and various state and local governments have implemented various programs designed to aid individuals and businesses, the impact of, and extent to which, these efforts will be successful cannot be determined at this time.  

Specifically, many of our customers and counterparties have been and may continue to be adversely impacted by the COVID-19 pandemic and resulting economic downturn. As a result, we have faced and may continue to face a decrease in demand for certain products, reduced access to our branches by our customers, and disruptions in the operations of our vendors. The pandemic could also result in recognition of additional credit losses in our loan and lease portfolios and increase our allowance for credit losses as both businesses and consumers are negatively impacted by the economic downturn. Additionally, customers that are increasingly forced to work remotely and may not have appropriately secured remote networks may be more vulnerable to cyber-attacks or phishing schemes. Any of these occurrences could have a material adverse effect on our financial condition, results of operations and prospects. The extent to which the pandemic impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning its severity and the actions necessary to contain it or address its impact, among others. The duration of these impacts resulting from the COVID-19 is unknown, and the resulting customer behavioral changes are not fully known and may not be temporary.





In addition, the COVID-19 outbreak has caused, and will continue to cause, substantial disruption to our employees as a result of illness, increased family responsibilities, self-isolation, travel limitations, and otherwise. Most areas within the United States have imposed mandatory closures for businesses not deemed to be essential, and it is currently unclear for how long such closures will last. Although nearly all of our corporate employees are able to work remotely, closures have nevertheless caused us to reduce access to our branches, and affected many of our customers and many businesses through which we sell our products and services. In addition, the increased reliance on remote work may result in increased vulnerabilities through heavy dependence on remote networks.

Any of the foregoing factors, or other cascading effects of the COVID-19 pandemic that are not currently known, could materially impact our team members and decrease our ability to serve customers, increase our costs, negatively impact our sales and damage our results of operations and our liquidity position, possibly to a significant degree. The duration of any such impacts cannot be predicted.

Item 9.01 Financial Statements and Exhibits.
 
(d)         Exhibits.





SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
TCF FINANCIAL CORPORATION
 
 
 
 
 
/s/ Craig R. Dahl
 
Craig R. Dahl, 
Chief Executive Officer and President  
(Principal Executive Officer)
 
 
 
 
 
/s/ Dennis L. Klaeser
 
Dennis L. Klaeser, 
Executive Vice President and Chief Financial Officer 
(Principal Financial Officer)
 
 
 
 
 
/s/ Kathleen S. Wendt
 
Kathleen S. Wendt, 
Executive Vice President and Chief Accounting Officer 
(Principal Accounting Officer)
 
Dated:  April 27, 2020





Exhibit 99.1
TCF033120FORM8KIMAGE.JPG
NEWS RELEASE
 
TCF Financial Corporation • 333 West Fort Street, Suite 1800 • Detroit, MI 48226
 
FOR IMMEDIATE RELEASE
Contact:
 
 
 
 
  Tom Wennerberg
(248) 498-2872
news@tcfbank.com
(Media)
 
 Timothy Sedabres
(952) 745-2766
investor@tcfbank.com
(Investors)
 
 
 
 
 
 
TCF REPORTS FIRST QUARTER 2020 RESULTS
TCF also announces quarterly cash dividends on common and preferred stock

First Quarter 2020 Highlights
•
Quarterly net income of $51.9 million, or $0.32 per diluted share, down 53.8% from the fourth quarter of 2019
•
Adjusted diluted earnings per common share of $0.57(1), down 45.2% from the fourth quarter of 2019. Adjusted diluted earnings per common share excludes $38.0 million, or $0.25 per share, after-tax impact of merger-related expenses and notable items
•
Loan and lease growth of 4.1% compared to December 31, 2019, driven by $1.2 billion of commercial loan and lease portfolio growth
•
Deposit growth of 3.9% compared to December 31, 2019
•
Net charge-offs of $5.5 million, or 0.06% of average loans and leases (annualized)
•
Provision for credit losses of $96.9 million, including $74.1 million related to COVID-19, a $0.38 detriment to earnings per diluted common share
•
Assisted consumers via approximately 7,300 COVID-19-related loan modification requests for $825 million as of April 23, 2020
•
Assisted business and commercial customers via $1.2 billion of approved loans through the Payment Protection Program as of April 23, 2020
•
Efficiency ratio of 69.57%, improved 392 basis points from the fourth quarter of 2019. Adjusted efficiency ratio of 58.24%(1), improved 27 basis points from the fourth quarter of 2019
•
Common equity Tier 1 capital ratio of 10.44%
•
Repurchased 873 thousand common shares at a cost of $33.1 million in the first quarter of 2020; in response to the COVID-19 pandemic, TCF temporarily suspended buybacks under its share repurchase program, but retains the ability to reinstate as circumstances warrant
•
Declared quarterly cash dividends on common stock of $0.35 per share payable on June 1, 2020

Merger-related Expenses and Notable items in the First Quarter of 2020 and Fourth Quarter of 2019(1) 
•
Pre-tax merger-related expenses of $36.7 million, $29.0 million net of tax, or $0.19 per diluted common share for the first quarter of 2020, compared to pre-tax merger-related expenses of $47.0 million, $36.1 million net of tax, or $0.24 per diluted common share for the fourth quarter of 2019
•
Pre-tax expenses of $11.3 million, $8.9 million net of tax, or $0.06 per diluted common share related to notable items for the first quarter of 2020, compared to pre-tax net expenses of $22.1 million, $13.1 million net of tax, or $0.08 per diluted common share related to notable items for the fourth quarter of 2019, see summary of notable items adjustments below

(1)
Denotes a non-GAAP financial measure. See "Reconciliation of GAAP to Non-GAAP Financial Measures" tables and the following table detailing merger-related expenses and notable items.


1


Note: TCF’s financial results for periods ended prior to August 1, 2019 reflect Legacy TCF financial results only on a standalone basis. In addition, TCF’s reported financial results for the first, second and third quarter of 2019 reflect Legacy TCF financial results for the period before August 1, 2019 and the post-merger combined TCF financial results on and after August 1, 2019, with the fourth quarter of 2019 and first quarter of 2020 financial results being solely of the post-merger combined TCF. The number of shares issued and outstanding, earnings per share, additional paid-in-capital, dividends paid and all references to share quantities of TCF have been retrospectively restated to reflect the equivalent number of shares issued in the Merger as the Merger was treated as a reverse merger.
Summary of Financial Results(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
At or For the Quarter Ended
 
Change From
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
 
Dec. 31,
Mar. 31,
(Dollars in thousands, except per share data)
2020
 
2019
 
2019
 
2019
 
2019
 
2019
2019
Financial Results
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to TCF
$
51,899

 
$
112,399

 
$
22,148

 
$
90,427

 
$
70,494

 
(53.8
)
%
(26.4
)
%
Net interest income
401,481

 
408,753

 
371,793

 
254,057

 
254,429

 
(1.8
)
 
57.8

 
Basic earnings per common share
$
0.33

 
$
0.72

 
$
0.15

 
$
1.07

 
$
0.83

 
(54.2
)
 
(60.2
)
 
Diluted earnings per common share
0.32

 
0.72

 
0.15

 
1.07

 
0.83

 
(55.6
)
 
(61.4
)
 
Return on average assets ("ROAA")(3)
0.46
%
 
0.99
%
 
0.26
%
 
1.54
%
 
1.22
%
 
(53
)
bps
(76
)
bps
ROACE(3)
3.64

 
8.00

 
1.75

 
14.27

 
11.40

 
(436
)
 
(776
)
 
ROATCE (non-GAAP)(2)(3)
5.42

 
11.35

 
2.68

 
15.46

 
12.42

 
(593
)
 
(700
)
 
Net interest margin
3.73

 
3.86

 
4.12

 
4.46

 
4.58

 
(13
)
 
(85
)
 
Net interest margin (FTE)(2)(3)
3.76

 
3.89

 
4.14

 
4.49

 
4.61

 
(13
)
 
(85
)
 
Net charge-offs as a percentage of average loans and leases(3)
0.06

 
0.07

 
0.39

 
0.29

 
0.39

 
(1
)
 
(33
)
 
Nonperforming assets as a percentage of total loans and leases and other real estate owned(4)
0.80

 
0.59

 
0.62

 
0.62

 
0.63

 
21

 
17

 
Efficiency ratio
69.57

 
73.49

 
91.32

 
65.11

 
70.70

 
(392
)
 
(113
)
 
Adjusted Financial Results (non-GAAP)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted net income attributable to TCF(2)
$
89,855

 
$
161,581

 
$
128,301

 
$
93,650

 
$
77,700

 
(44.4
)
%
15.6

%
Adjusted diluted earnings per common
share(2)
$
0.57

 
$
1.04

 
$
0.98

 
$
1.11

 
$
0.91

 
(45.2
)
 
(37.4
)
 
Adjusted ROAA(2)(3)
0.78
%
 
1.42
%
 
1.34
%
 
1.59
%
 
1.34
%
 
(64
)
bps
(56
)
bps
Adjusted ROACE(2)(3)
6.43

 
11.57

 
11.21

 
14.79

 
12.61

 
(514
)
 
(618
)
 
Adjusted ROATCE(2)(3)
9.24

 
16.25

 
14.96

 
16.02

 
13.72

 
(701
)
 
(448
)
 
Adjusted efficiency ratio(2)
58.24

 
58.51

 
58.74

 
61.48

 
65.67

 
(27
)
 
(743
)
 
N.M. Not meaningful
(1)
Financial results for any periods ended prior to August 1, 2019 reflect Legacy TCF financials on a standalone basis. Certain reclassifications have been made to prior period financial information to conform to the current period presentation.
(2)
Denotes a non-GAAP financial measure. See "Reconciliation of GAAP to Non-GAAP Financial Measures" tables.
(3)
Annualized.
(4)
Prior to the adoption of CECL as of January 1, 2020, purchased credit impaired loans were not classified as nonaccrual loans because they were recorded at their net realizable value based on the principal and interest expected to be collected on the loans. At January 1, 2020, $73.4 million of previous purchased credit impaired loans were reclassified to nonaccrual loans as a result of the adoption of CECL.


2


The following table includes merger-related expenses and notable items used to arrive at adjusted net income in the Adjusted Financial Results (non-GAAP) (see Reconciliation of Non-GAAP Financial Measures).
 
For the Quarter Ended March 31, 2020
 
For the Quarter Ended December 31, 2019
(Dollars in thousands, except per share data)
Pre-tax income (loss)
 
After-tax benefit (loss)(1)
 
Per Share
 
Pre-tax income (loss)
 
After-tax benefit (loss)(1)
 
Per Share
Merger-related expenses
$
(36,728
)
 
$
(29,026
)
 
$
(0.19
)
 
$
(47,025
)
 
(36,059
)
 
$
(0.24
)
Notable items:
 
 
 
 
 
 
 
 
 
 
 
Sale of Legacy TCF auto finance portfolio and related expenses(2)
(3,063
)
 
(2,421
)
 
(0.02
)
 
(12,864
)
 
(9,865
)
 
(0.06
)
Branch exit costs(3)
—

 
—

 
—

 
(3,494
)
 
(2,679
)
 
(0.02
)
Loan servicing rights (impairment) recovery(4)
(8,236
)
 
(6,509
)
 
(0.04
)
 
638

 
490

 
—

Pension fair valuation adjustment(4)
—

 
—

 
—

 
(6,341
)
 
(4,862
)
 
(0.03
)
Tax basis adjustment benefit(5)
—

 
—

 
—

 
—

 
3,793

 
0.03

Total notable items
(11,299
)
 
(8,930
)
 
(0.06
)
 
(22,061
)
 
(13,123
)
 
(0.08
)
Total merger-related and notable items
$
(48,027
)
 
$
(37,956
)
 
$
(0.25
)
 
$
(69,086
)
 
$
(49,182
)
 
$
(0.32
)
(1)
Net of tax benefit at our normal tax rate and other tax benefits.
(2)
First quarter of 2020 included within occupancy and equipment ($1.6 million), compensation and employee benefits ($0.9 million) and other noninterest expense ($0.6 million). Fourth quarter of 2019 included within net (loss) gain on sales of loans and leases ($8.2 million), other noninterest expense ($2.2 million), occupancy and equipment ($1.5 million) and compensation and employee benefits ($0.9 million).
(3)
Included within Other noninterest expense.
(4)
Included within Other noninterest income.
(5)
Included within Income tax expense.

DETROIT (April 27, 2020) - TCF Financial Corporation ("TCF" or the "Corporation") (NASDAQ: TCF) today reported net income of $51.9 million, or diluted earnings per common share of $0.32, for the first quarter of 2020, compared with $112.4 million, or diluted earnings per common share of $0.72, for the fourth quarter of 2019. Adjusted net income was $89.9 million, or $0.57 per diluted common share for the first quarter of 2020, compared with $161.6 million, or $1.04 per diluted common share, for the fourth quarter of 2019. (see "Reconciliation of GAAP to Non-GAAP Financial Measures" tables).

"As we work through the impacts related to COVID-19, I am continually impressed with the dedication of our teams and how our team members have rallied to support our customers as well as each other during these unprecedented times," said Craig R. Dahl, president and chief executive officer. “Our top priorities continue to be on ensuring the health and well-being of our team members, the financial stability of our customers, and the overall wellness of the communities where we live and operate.

“We entered the year with momentum across the company and in January and February, we saw strong business performance that reflected the opportunity we see in our markets as a result of our merger of equals, including robust loan and deposit growth, stable credit quality and on-time execution of our integration initiatives. With the arrival of COVID-19, we quickly took numerous actions to prioritize the well-being of those we work with, both from a health and economic perspective. This included transitioning our branch services to drive-up only where possible, closing select other nearby branches, and implementing a work-from-home approach for many of our team members, all of which were designed to protect the health and safety of our employees. In addition, we are offering relief programs for impacted customers and we have deployed substantial resources to support applications for the Paycheck Protection Program.


3


“As we look ahead, our focus will remain on managing the impact of COVID-19 across the organization, completing our integration activities and capturing the related cost synergies, and continuing to actively manage the business in this volatile and fluid environment. We are operating with robust capital and liquidity levels, strong diversification across our portfolios as a result of the merger of equals, and an experienced management team that is providing strong leadership as we support our customers and employees in these difficult times.”

Net Interest Income and Net Interest Margin
Net interest income was $401.5 million for the first quarter of 2020, a decrease of $7.3 million, or 1.8%, from the fourth quarter of 2019. Purchase accounting accretion and amortization included in net interest income was $25.3 million for the first quarter of 2020, compared to $30.5 million for the fourth quarter of 2019. Net interest income, excluding purchase accounting accretion and amortization, was $376.2 million for the first quarter of 2020, compared to $378.2 million for the fourth quarter of 2019. Net interest margin was 3.73% for the first quarter of 2020, compared to 3.86% in the fourth quarter of 2019, while net interest margin on a fully tax-equivalent basis (FTE) was 3.76%, down 13 basis points from the fourth quarter of 2019. The decrease in net interest margin from the fourth quarter of 2019 was driven primarily by the Federal Reserve's rate cuts in addition to a decrease in the benefit provided by purchase accounting accretion and amortization. Net interest margin FTE, excluding purchase accounting accretion and amortization, was 3.53% in the first quarter of 2020, compared to 3.60% in the fourth quarter of 2019 (see "Reconciliation of GAAP to Non-GAAP Financial Measures" tables).

Noninterest Income
Noninterest income was $137.0 million for the first quarter of 2020, a decrease of $21.1 million, or 13.3%, from the fourth quarter of 2019. Noninterest income for the first quarter of 2020 included an $8.2 million loan servicing rights impairment, included in other noninterest income, a notable item. Noninterest income for the fourth quarter of 2019 included the following notable items: an $8.2 million loss related to the sale of the Legacy TCF auto finance portfolio, included in net gains (losses) on sales of loans and leases, and a $0.6 million recovery of prior loan servicing rights impairment, included in other noninterest income. Adjusted noninterest income for the first quarter of 2020 was $145.2 million, compared to $165.6 million in the fourth quarter of 2019 (see "Reconciliation of GAAP to Non-GAAP Financial Measures" tables). The first quarter of 2020 also included a $6.0 million favorable interest rate swap mark-to-market adjustment resulting from changes in the interest rate environment, included in other noninterest income, a $7.7 million increase in net gains on sales of loans and leases, and decreases of $13.1 million in leasing revenue, primarily due to a seasonal decline in sales-type leasing revenue, and of $4.8 million and $3.1 million in service charges on deposit accounts and card and ATM revenue, respectively. The fourth quarter of 2019 included a $3.7 million gain on sale of loans and leases related to a nonaccrual and TDR loan sale, included in net gains (losses) on sales of loans and leases and a $2.4 million favorable interest rate swap mark-to-market adjustment resulting from changes in the interest rate environment, included in other noninterest income.


4


Noninterest Expense
Noninterest expense was $374.6 million for the first quarter of 2020, a decrease of $42.0 million, or 10.1%, from the fourth quarter of 2019. The first quarter of 2020 included $36.7 million of merger-related expenses, compared to $47.0 million for the fourth quarter of 2019. Noninterest expense also included $3.1 million of expense related to the sale of the Legacy TCF auto finance portfolio ($1.6 million in occupancy and equipment expense, $0.9 million in compensation and employee benefits and $0.6 million in other noninterest expense) considered a notable item for the first quarter of 2020. Noninterest expense for the fourth quarter of 2019 included the following notable items: $6.3 million of expense related to pension fair valuation adjustment on plans with previously announced terminations, included in other noninterest expense, $4.6 million of expense related to the sale of the Legacy TCF auto finance portfolio ($2.2 million in other noninterest expense, $1.5 million in occupancy and equipment expense and $0.9 million in compensation and employee benefits) and $3.5 million of expense related to branch exit costs, included in other noninterest expense. Excluding merger-related expenses and notable items, adjusted noninterest expense was $334.8 million for the first quarter of 2020, compared to $355.0 million for the fourth quarter of 2019 (see "Reconciliation of GAAP to Non-GAAP Financial Measures" tables). The first quarter of 2020 also included $1.5 million of impairment related to federal historic tax credits placed into service, included in other noninterest expense. The fourth quarter of 2019 also included $4.0 million of impairment related to federal historic tax credits placed into service, included in other noninterest expense, and a $1.3 million impairment charge recognized on a branch we intend to sell in the future, included within occupancy and equipment expense.

Income Tax Expense
Income tax expense for the first quarter of 2020 was $13.1 million, a decrease of $8.3 million, or 38.8%, from the fourth quarter of 2019. The fourth quarter of 2019 included a $3.6 million federal historic tax credit benefit and a $3.8 million tax basis adjustment benefit.

Credit Quality
Provision for credit losses Provision for credit losses was $96.9 million for the first quarter of 2020, an increase of $82.5 million, from the fourth quarter of 2019. The increase from the fourth quarter of 2019 was primarily due to the recognition of an economic downturn related to COVID-19 (increased provision for credit losses on loans and leases by $74.1 million, $70.5 million related to the provision for credit losses on loans and leases and $3.6 million related to the provision for unfunded commitments) and the adoption of a new accounting standard, often referred to as Current Expected Credit Losses ("CECL"). This framework requires that management estimate credit losses over the full remaining expected life and consider expected future changes in macroeconomic conditions. As a result of the adoption of CECL, the provision for credit losses now includes the provision for unfunded commitment that was previously included within other noninterest expense. The first quarter of 2020 provision for unfunded commitments was $4.0 million. Provision for credit losses for the fourth quarter of 2019 was reduced by $4.7 million of recoveries of previous charge-offs related to the sale of consumer nonaccrual and TDR loans.


5


Net charge-off rate The annualized net charge-offs as a percentage of average loans and leases was 0.06% for the first quarter of 2020, down 1 basis point from the fourth quarter of 2019. Net charge-offs for the fourth quarter of 2019 were reduced by $4.7 million of recoveries of previous charge-offs related to the sale of consumer nonaccrual and TDR loans.

Allowance for Credit Losses Allowance for credit losses was $406.4 million, or 1.13% of total loans and leases, at March 31, 2020, up from $113.1 million, or 0.33%, at December 31, 2019. The increase from December 31, 2019 was primarily due to the adoption of CECL and the impact of COVID-19 (increased the allowance for credit losses by $70.5 million) and the adoption of CECL as of January 1, 2020. Upon adoption of CECL, $206.0 million was recorded as an increase in the allowance for credit losses. Prior to the adoption of CECL, the allowance for credit losses was calculated under an incurred loss model which delayed recognition of loss until it was probable the loss had been incurred in comparison to the accounting under CECL which considers current credit losses expected to be incurred in the loan and lease portfolios over the life of each financial asset.

Nonaccrual loans and leases Nonaccrual loans and leases were $250.5 million at March 31, 2020 and represented 0.70% of total loans and leases, compared to $169.7 million, or 0.49% of total loans and leases, at December 31, 2019. The $80.8 million increase in nonaccrual loans and leases from December 31, 2019 was substantially driven by the adoption of CECL ($73.4 million of loans previously accounted for as purchased credit impaired were reclassified to nonaccrual loans as of January 1, 2020 due to the adoption of CECL).

Balance Sheet
Loans and leases Loans and leases were $35.9 billion at March 31, 2020, an increase of $1.4 billion, or 4.1%, compared to $34.5 billion at December 31, 2019. The increase from December 31, 2019 was primarily due to growth in the commercial and industrial, commercial real estate and residential mortgage portfolios.

Investment securities The investment securities portfolio was $7.2 billion at March 31, 2020, an increase of $301.4 million, or 4.4%, compared to $6.9 billion at December 31, 2019. The increase from December 31, 2019 was primarily due to purchases of residential agency mortgage-backed securities.

Deposits Deposits were $35.8 billion at March 31, 2020, an increase of $1.3 billion, or 3.9%, compared to $34.5 billion at December 31, 2019. The increase from December 31, 2019 was primarily due to increases in money market deposits of $535.2 million, checking deposit account balances of $322.9 million and savings account balances of $197.8 million, reflecting seasonal increases in addition to lower consumer spending.

Capital The common equity Tier 1 capital ratio was 10.44% at March 31, 2020, compared to 10.99% at December 31, 2019. Our capital ratios as of March 31, 2020 reflect our election of the five-year CECL transition for regulatory capital purposes.


6


In response to the COVID-19 pandemic, TCF temporarily suspended buybacks under its share repurchase program, but retains the ability to reinstate as circumstances warrant. TCF is well positioned with strong capital and liquidity and is committed to supporting our customers, team members and communities.

TCF's board of directors also declared a regular quarterly cash dividend of $0.35 per common share payable on June 1, 2020 to shareholders of record at the close of business on May 15, 2020. In addition, the board of directors declared a quarterly cash dividend of $0.35625 per depositary share payable on June 1, 2020 to shareholders of record of the depositary shares, representing a 1/1,000th interest in a share of the 5.70% Series C Non-Cumulative Perpetual Preferred Stock, at the close of business on May 15, 2020.

Conference Call Details TCF will host a conference call to discuss first quarter 2020 results on Tuesday, April 28, 2020 at 10:00 a.m. Eastern Time. The conference call will be available via a live webcast on the Investor Relations section of TCF's website, ir.tcfbank.com, and archived for replay. The conference call can also be accessed by dialing (844) 512-2926 and entering access code 6598992. To listen to the replay via phone, please dial (877) 344-7529 and enter access code 10141568. The replay begins approximately one hour after the call is completed on Tuesday, April 28, 2020 and will be available through Tuesday, May 5, 2020.

 
 
 
 
 
TCF Financial Corporation (NASDAQ: TCF) is a Detroit, Michigan-based financial holding company with $49 billion in total assets at March 31, 2020 and a top 10 deposit market share in the Midwest. TCF’s primary banking subsidiary, TCF National Bank, is a premier Midwest bank offering consumer and commercial banking, trust and wealth management, and specialty leasing and lending products and services to consumers, small businesses and commercial clients. TCF has approximately 500 branches primarily located in Michigan, Illinois and Minnesota with additional locations in Arizona, Colorado, Ohio, South Dakota and Wisconsin. TCF also conducts business across all 50 states and Canada through its specialty lending and leasing businesses. To learn more about TCF, visit 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 Corporation's businesses and their respective markets, such as projections of future performance, targets, guidance, statements of the Corporation's plans and objectives, forecasts of market trends and other matters are forward-looking statements based on the Corporation'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.

7



Certain factors could cause the Corporation'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 Corporation's Annual Report on Form 10-K for the year ended December 31, 2019 under the heading "Risk Factors" or otherwise disclosed in documents filed or furnished by the Corporation with or to the SEC after the filing of such Annual Report on Form 10-K, 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.

This release also contains forward-looking statements regarding TCF’s outlook or expectations with respect to the merger. Examples of forward-looking statements include, but are not limited to, statements regarding outlook and expectations with respect to the strategic and financial benefits of the merger, including the expected impact of the transaction on TCF’s future financial performance (including anticipated accretion to earnings per share, the tangible book value earn-back period and other operating and return metrics), the expected costs to be incurred in connection with the merger, and operational aspects of post-merger integration.

Use of Non-GAAP Financial Measures
Management uses the adjusted net income, adjusted diluted earnings per common share, adjusted ROAA, adjusted ROACE, ROATCE, adjusted ROATCE, adjusted efficiency ratio, adjusted net interest income, net interest margin (FTE), adjusted net interest margin (FTE), adjusted noninterest income, adjusted noninterest expense, tangible book value per common share and tangible common equity to tangible assets 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 Corporation's capital and ability to withstand unexpected market or economic conditions and to assess the performance of the Corporation in relation to other banking institutions on the same basis as that applied by management, analysts and banking regulators. TCF adjusts certain results to exclude merger-related expenses and notable items in addition to presenting net interest income and net interest margin (FTE) excluding purchase accounting accretion and amortization. Management believes these measures are useful to investors in understanding TCF's business and operating results.
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 corporation, 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 shareholders. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measure may be found in the reconciliation tables included in this press release.


8


TCF FINANCIAL CORPORATION AND SUBSIDIARIES
 
 
 
 
 
Consolidated Statements of Financial Condition (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Change From
(Dollars in thousands)
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
 
Dec. 31, 2019
Mar. 31, 2019
2020
 
2019
 
2019
 
2019
 
2019
 
$
%
$
%
ASSETS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents:
 
 
 
 
 
 
 
 
 
 

 
 
 
Cash and due from banks
$
713,413

 
$
491,787

 
$
586,060

 
$
294,566

 
$
283,659

 
$
221,626

45.1
 %
$
429,754

151.5%
Interest-bearing deposits with other banks
565,458

 
736,584

 
736,954

 
260,705

 
180,163

 
(171,126
)
(23.2
)
385,295

N.M.
Total cash and cash equivalents
1,278,871

 
1,228,371

 
1,323,014

 
555,271

 
463,822

 
50,500

4.1

815,049

175.7
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost
484,461

 
442,440

 
290,238

 
105,659

 
103,644

 
42,021

9.5

380,817

N.M.
Investment securities:
 
 
 
 
 
 
 
 
 
 







Available-for-sale, at fair value
7,025,224

 
6,720,001

 
5,579,835

 
3,109,803

 
2,945,342

 
305,223

4.5

4,079,882

138.5
Held-to-maturity, at amortized cost
135,619

 
139,445

 
144,000

 
144,919

 
148,024

 
(3,826
)
(2.7
)
(12,405
)
(8.4)
Total investment securities
7,160,843

 
6,859,446

 
5,723,835

 
3,254,722

 
3,093,366

 
301,397

4.4

4,067,477

131.5
Loans and leases held-for-sale
287,177

 
199,786

 
1,436,069

 
74,410

 
64,468

 
87,391

43.7
222,709

N.M.
Loans and leases
35,921,614

 
34,497,464

 
33,510,752

 
19,185,137

 
19,384,210

 
1,424,150

4.1

16,537,404

85.3
Allowance for credit losses
(406,383
)
 
(113,052
)
 
(121,218
)
 
(146,503
)
 
(147,972
)
 
(293,331
)
N.M.

(258,411
)
(174.6)
Loans and leases, net
35,515,231

 
34,384,412

 
33,389,534

 
19,038,634

 
19,236,238

 
1,130,819

3.3

16,278,993

84.6
Premises and equipment, net
516,454

 
533,138

 
554,194

 
432,751

 
429,711

 
(16,684
)
(3.1
)
86,743

20.2
Goodwill
1,313,046

 
1,299,878

 
1,265,111

 
154,757

 
154,757

 
13,168

1.0

1,158,289

N.M.
Other intangible assets, net
162,887

 
168,368

 
215,910

 
18,885

 
19,684

 
(5,481
)
(3.3)
143,203

N.M.
Loan servicing rights
47,283

 
56,313

 
55,301

 
19

 
20

 
(9,030
)
(16.0
)
47,263

N.M.
Other assets
1,828,130

 
1,479,401

 
1,439,305

 
991,722

 
853,005

 
348,729

23.6

975,125

114.3
Total assets
$
48,594,383

 
$
46,651,553

 
$
45,692,511

 
$
24,626,830

 
$
24,418,715

 
$
1,942,830

4.2

$
24,175,668

99.0
LIABILITIES AND EQUITY:
 
 
 
 
 
 
 
 
 






Deposits:
 
 
 
 
 
 
 
 
 
 






Noninterest-bearing
$
8,237,916

 
$
7,970,590

 
$
7,979,900

 
$
4,062,912

 
$
4,104,652

 
$
267,326

3.4%
$
4,133,264

100.7%
Interest-bearing
27,561,387

 
26,497,873

 
27,306,174

 
15,049,475

 
14,919,459

 
1,063,514

4.0
12,641,928

84.7
Total deposits
35,799,303

 
34,468,463

 
35,286,074

 
19,112,387

 
19,024,111

 
1,330,840

3.9
16,775,192

88.2
Short-term borrowings
3,482,535

 
2,669,145

 
2,607,300

 
350,764

 
355,992

 
813,390

30.5
3,126,543

N.M.
Long-term borrowings
2,600,594

 
2,354,448

 
860,482

 
1,617,531

 
1,411,426

 
246,146

10.5
1,189,168

84.3
Other liabilities
1,056,118

 
1,432,256

 
1,245,238

 
835,630

 
981,341

 
(376,138
)
(26.3)
74,777

7.6
Total liabilities
42,938,550

 
40,924,312

 
39,999,094

 
21,916,312

 
21,772,870

 
2,014,238

4.9
21,165,680

97.2
Equity:
 
 
 
 
 
 
 
 
 
 






Preferred stock
169,302

 
169,302

 
169,302

 
169,302

 
169,302

 
—

—
—

—
Common stock
152,186

 
152,966

 
153,571

 
87,944

 
88,063

 
(780
)
(0.5)
64,123

72.8
Additional paid-in capital
3,433,234

 
3,462,080

 
3,478,159

 
781,788

 
789,467

 
(28,846
)
(0.8)
2,643,767

N.M.
Retained earnings
1,732,932

 
1,896,427

 
1,840,214

 
1,874,308

 
1,810,701

 
(163,495
)
(8.6)
(77,769)
(4.3)
Accumulated other comprehensive income
166,170

 
54,277

 
56,228

 
37,334

 
5,481

 
111,893

N.M.
160,689

N.M.
Treasury stock at cost and other
(28,140
)
 
(28,037
)
 
(27,370
)
 
(265,016
)
 
(246,621
)
 
(103
)
(0.4)
218,481

88.6
Total TCF Financial Corporation shareholders' equity
5,625,684

 
5,707,015

 
5,670,104

 
2,685,660

 
2,616,393

 
(81,331
)
(1.4)
3,009,291

115.0
Non-controlling interest
30,149

 
20,226

 
23,313

 
24,858

 
29,452

 
9,923

49.1
697

2.4
Total equity
5,655,833

 
5,727,241

 
5,693,417

 
2,710,518

 
2,645,845

 
(71,408
)
(1.2)
3,009,988

113.8
Total liabilities and equity
$
48,594,383

 
$
46,651,553

 
$
45,692,511

 
$
24,626,830

 
$
24,418,715

 
$
1,942,830

4.2
$
24,175,668

99.0
N.M. Not Meaningful

9


TCF FINANCIAL CORPORATION AND SUBSIDIARIES
 
 
 
 
 
 
 
 
Consolidated Statements of Income (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Change From
(Dollars in thousands)
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
 
Dec. 31, 2019
 
Mar. 31, 2019
2020
 
2019
 
2019
 
2019
 
2019
 
$
 
%
 
$
 
%
Interest income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans and leases
$
443,096

 
$
446,738

 
$
417,370

 
$
283,282

 
$
283,238

 
$
(3,642
)
 
(0.8
)%
 
$
159,858

 
56.4
 %
Interest on investment securities:
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 
Taxable
40,920

 
36,282

 
31,038

 
22,041

 
16,666

 
4,638

 
12.8

 
24,254

 
145.5

Tax-exempt
4,349

 
4,374

 
3,385

 
1,208

 
2,684

 
(25
)
 
(0.6
)
 
1,665

 
62.0

Interest on loans held-for-sale
1,561

 
15,767

 
1,408

 
599

 
825

 
(14,206
)
 
(90.1
)
 
736

 
89.2

Interest on other earning assets
5,466

 
6,617

 
6,607

 
3,651

 
3,481

 
(1,151
)
 
(17.4
)
 
1,985

 
57.0

Total interest income
495,392

 
509,778

 
459,808

 
310,781

 
306,894

 
(14,386
)
 
(2.8
)
 
188,498

 
61.4

Interest expense:
 
 
 
 
 
 
 
 
 
 


 


 


 


Interest on deposits
67,419

 
77,003

 
70,900

 
40,646

 
37,608

 
(9,584
)
 
(12.4
)
 
29,811

 
79.3

Interest on borrowings
26,492

 
24,022

 
17,115

 
16,078

 
14,857

 
2,470

 
10.3

 
11,635

 
78.3

Total interest expense
93,911

 
101,025

 
88,015

 
56,724

 
52,465

 
(7,114
)
 
(7.0
)
 
41,446

 
79.0

Net interest income
401,481

 
408,753

 
371,793

 
254,057

 
254,429

 
(7,272
)
 
(1.8
)
 
147,052

 
57.8

Provision for credit losses
96,943

 
14,403

 
27,188

 
13,569

 
10,122

 
82,540

 
N.M.

 
86,821

 
N.M.

Net interest income after provision for credit losses
304,538

 
394,350

 
344,605

 
240,488

 
244,307

 
(89,812
)
 
(22.8
)
 
60,231

 
24.7

Noninterest income:
 
 
 
 
 
 
 
 
 
 


 


 


 


Fees and service charges on deposit accounts
34,597

 
39,356

 
34,384

 
27,842

 
26,278

 
(4,759
)
 
(12.1
)
 
8,319

 
31.7

Leasing revenue
33,565

 
46,686

 
39,590

 
39,277

 
38,165

 
(13,121
)
 
(28.1
)
 
(4,600
)
 
(12.1
)
Card and ATM revenue
21,685

 
24,751

 
23,315

 
20,496

 
18,659

 
(3,066
)
 
(12.4
)
 
3,026

 
16.2

Net gains (losses) on sales of loans and leases
20,590

 
12,934

 
(5,984
)
 
11,141

 
8,217

 
7,656

 
59.2

 
12,373

 
150.6

Servicing fee revenue
6,792

 
6,022

 
5,121

 
4,523

 
5,110

 
770

 
12.8

 
1,682

 
32.9

Wealth management revenue
6,151

 
6,172

 
4,241

 
—

 
—

 
(21
)
 
(0.3
)
 
6,151

 
N.M.

Net gains on investment securities
—

 
8

 
5,900

 
1,066

 
451

 
(8
)
 
(100.0
)
 
(451
)
 
(100.0
)
Other
13,583

 
22,123

 
(12,309
)
 
5,373

 
6,624

 
(8,540
)
 
(38.6
)
 
6,959

 
105.1

Total noninterest income
136,963

 
158,052

 
94,258

 
109,718

 
103,504

 
(21,089
)
 
(13.3
)
 
33,459

 
32.3

Noninterest expense:
 
 
 
 
 
 
 
 
 
 


 


 


 


Compensation and employee benefits
171,528

 
180,969

 
155,745

 
116,266

 
123,942

 
(9,441
)
 
(5.2
)
 
47,586

 
38.4

Occupancy and equipment
57,288

 
56,771

 
49,229

 
41,850

 
41,710

 
517

 
0.9

 
15,578

 
37.3

Lease financing equipment depreciation
18,450

 
18,629

 
19,408

 
19,133

 
19,256

 
(179
)
 
(1.0
)
 
(806
)
 
(4.2
)
Net foreclosed real estate and repossessed assets
1,859

 
4,242

 
2,203

 
2,448

 
4,630

 
(2,383
)
 
(56.2
)
 
(2,771
)
 
(59.8
)
Merger-related expenses
36,728

 
47,025

 
111,259

 
4,226

 
9,458

 
(10,297
)
 
(21.9
)
 
27,270

 
N.M.

Other
88,746

 
108,935

 
87,776

 
52,926

 
54,079

 
(20,189
)
 
(18.5
)
 
34,667

 
64.1

Total noninterest expense
374,599

 
416,571

 
425,620

 
236,849

 
253,075

 
(41,972
)
 
(10.1
)
 
121,524

 
48.0

Income before income tax expense
66,902

 
135,831

 
13,243

 
113,357

 
94,736

 
(68,929
)
 
(50.7
)
 
(27,834
)
 
(29.4
)
Income tax expense (benefit)
13,086

 
21,375

 
(11,735
)
 
19,314

 
21,287

 
(8,289
)
 
(38.8
)
 
(8,201
)
 
(38.5
)
Income after income tax expense
53,816

 
114,456

 
24,978

 
94,043

 
73,449

 
(60,640
)
 
(53.0
)
 
(19,633
)
 
(26.7
)
Income attributable to non-controlling interest
1,917

 
2,057

 
2,830

 
3,616

 
2,955

 
(140
)
 
(6.8
)
 
(1,038
)
 
(35.1
)
Net income attributable to TCF Financial Corporation
51,899

 
112,399

 
22,148

 
90,427

 
70,494

 
(60,500
)
 
(53.8
)
 
(18,595
)
 
(26.4
)
Preferred stock dividends
2,493

 
2,494

 
2,494

 
2,494

 
2,493

 
(1
)
 
—

 
—

 
—

Net income available to common shareholders
$
49,406

 
$
109,905

 
$
19,654

 
$
87,933

 
$
68,001

 
$
(60,499
)
 
(55.0
)
 
$
(18,595
)
 
(27.3
)
N.M. Not Meaningful

10


TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields and Rates (Unaudited)
 
Quarter Ended
 
Mar. 31, 2020
 
Dec. 31, 2019
 
Mar. 31, 2019
 
Average
 
Yields &
 
Average
 
Yields &
 
Average
 
Yields &
(Dollars in thousands)
Balance
Interest(1)
Rates(1)(2)
 
Balance
Interest(1)
Rates(1)(2)
 
Balance
Interest(1)
Rates(1)(2)
ASSETS:
 
 
 
 
 
 
 
 
 
 
 
Federal Home Loan Bank and Federal Reserve Bank stocks
$
454,675

$
3,152

2.79%
 
$
388,640

$
3,170

3.24%
 
$
105,135

$
961

3.70%
Investment securities held-to-maturity
136,277

560

1.64
 
140,434

889

2.53
 
147,556

535

1.45
Investment securities available-for-sale:
 
 
 
 
 
 
 
 
 
 
Taxable
5,892,006

40,360

2.74
 
4,960,520

35,393

2.85
 
2,121,196

16,131

3.04
Tax-exempt(3)
773,468

5,503

2.85
 
778,994

5,536

2.84
 
516,995

3,397

2.63
Loans and leases held-for-sale
138,058

1,561

4.53
 
1,121,326

15,767

5.58
 
55,204

825

6.05
Loans and leases(3)(4)
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
11,827,315

160,802

5.42
 
10,955,937

156,246

5.63
 
6,495,163

106,716

6.63
Commercial real estate
9,291,540

117,743

5.01
 
9,057,834

124,431

5.38
 
2,917,631

37,737

5.17
Lease financing
2,682,323

34,156

5.09
 
2,616,360

33,431

5.11
 
2,527,346

32,384

5.13
Residential mortgage
6,113,279

61,379

4.02
 
6,023,647

61,072

4.05
 
2,345,881

29,458

5.07
Consumer installment
1,517,412

19,742

5.23
 
1,546,952

19,382

4.97
 
1,852,813

25,500

5.58
Home equity
3,514,278

51,103

5.85
 
3,604,153

53,910

5.93
 
3,048,128

52,452

6.98
Total loans and leases(3)(4)
34,946,147

444,925

5.08
 
33,804,883

448,472

5.24
 
19,186,962

284,247

5.97
Interest-bearing deposits with banks and other
538,971

2,314

1.72
 
656,555

3,448

2.07
 
261,556

2,520

3.87
Total interest-earning assets
42,879,602

498,375

4.64
 
41,851,352

512,675

4.85
 
22,394,604

308,616

5.55
Other assets
4,105,824

 
 
 
4,268,162

 
 
 
1,712,337

 
 
Total assets
$
46,985,426

 
 
 
$
46,119,514

 
 
 
$
24,106,941

 
 
LIABILITIES AND EQUITY:
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing deposits
$
7,929,933

 
 
 
$
7,968,769

 
 
 
$
3,919,746

 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
Checking
5,990,309

5,830

0.39%
 
5,891,566

7,614

0.51%
 
2,457,767

387

0.06%
Savings
8,589,815

13,669

0.64
 
8,404,460

14,993

0.71
 
6,253,992

10,670

0.69
Money market
4,792,248

14,855

1.25
 
4,463,476

15,537

1.38
 
1,490,631

4,453

1.21
Certificates of deposit
7,329,632

33,065

1.81
 
7,825,573

38,859

1.97
 
4,622,120

22,098

1.94
Total interest-bearing deposits
26,702,004

67,419

1.02
 
26,585,075

77,003

1.15
 
14,824,510

37,608

1.03
Total deposits
34,631,937

67,419

0.78
 
34,553,844

77,003

0.88
 
18,744,256

37,608

0.81
Borrowings:
 
 
 
 
 
 
 
 
 
 
 
Short-term borrowings
2,689,262

10,582

1.56
 
2,585,682

11,403

1.73
 
293,499

1,957

2.67
Long-term borrowings
2,608,204

15,910

2.42
 
1,739,852

12,620

2.87
 
1,500,832

12,900

3.44
Total borrowings
5,297,466

26,492

1.98
 
4,325,534

24,023

2.19
 
1,794,331

14,857

3.31
Total interest-bearing liabilities
31,999,470

93,911

1.18
 
30,910,609

101,026

1.29
 
16,618,841

52,465

1.28
Total deposits and borrowings
39,929,403

93,911

0.94
 
38,879,378

101,026

1.03
 
20,538,587

52,465

1.03
Accrued expenses and other liabilities
1,425,536

 
 
 
1,549,017

 
 
 
989,104

 
 
Total liabilities
41,354,939

 
 
 
40,428,395

 
 
 
21,527,691

 
 
Total TCF Financial Corporation shareholders' equity
5,605,159

 
 
 
5,667,436

 
 
 
2,554,729

 
 
Non-controlling interest in subsidiaries
25,328

 
 
 
23,683

 
 
 
24,521

 
 
Total equity
5,630,487

 
 
 
5,691,119

 
 
 
2,579,250

 
 
Total liabilities and equity
$
46,985,426

 
 
 
$
46,119,514

 
 
 
$
24,106,941

 
 
Net interest spread (FTE)
 
 
3.70%
 
 
 
3.82%
 
 
 
4.52%
Net interest income(FTE) and net interest margin(FTE)
 
$
404,464

3.76%
 
 
$
411,649

3.89%
 
 
$
256,151

4.61%
Reconciliation to Reported Net Interest Income
 
 
 
 
 
 
 
 
 
Net interest income (FTE)
 
$
404,464

 
 
 
$
411,649

 
 
 
$
256,151

 
Adjustments for taxable equivalent
interest(1)(3)
 
 
 
 
 
 
 
 
 
 
 
Loans and leases
 
(1,829
)
 
 
 
(1,734
)
 
 
 
(1,009
)
 
Tax-exempt investment securities
 
(1,154
)
 
 
 
(1,162
)
 
 
 
(713
)
 
Total FTE adjustments
 
(2,983
)
 
 
 
(2,896
)
 
 
 
(1,722
)
 
Net interest income (GAAP)
 
$
401,481

 
 
 
$
408,753

 
 
 
$
254,429

 
Net interest margin (GAAP)
 
3.73
%
 
 
 
3.86
%
 
 
 
4.58
%
 
(1)
Interest and yields are presented on a fully tax-equivalent basis.
(2)
Annualized.
(3)
The yield on tax-exempt loans and investment securities available-for-sale is computed on a tax-equivalent basis using a statutory federal income tax rate of 21%.
(4)
Average balances of loans and leases include nonaccrual loans and leases and are presented net of unearned income.

11


TCF FINANCIAL CORPORATION AND SUBSIDIARIES
 
 
 
 
 
 
 
 
Consolidated Quarterly Average Balance Sheets (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Change From
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
 
Dec. 31, 2019
 
Mar. 31, 2019
(Dollars in thousands)
2020
 
2019
 
2019
 
2019
 
2019
 
$
 
%
 
$
 
%
ASSETS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal Home Loan Bank and Federal Reserve Bank stocks
$
454,675

 
$
388,640

 
$
230,767

 
$
112,118

 
$
105,135

 
$
66,035

 
17.0
 %
 
$
349,540

 
N.M.

Investment securities held-to-maturity
136,277

 
140,434

 
143,078

 
146,296

 
147,556

 
(4,157
)
 
(3.0
)
 
(11,279
)
 
(7.6
)%
Investment securities available-for-sale:
 
 
 
 
 
 
 
 
 
 


 


 


 


Taxable
5,892,006

 
4,960,520

 
4,232,878

 
2,711,984

 
2,121,196

 
931,486

 
18.8

 
3,770,810

 
177.8

Tax-exempt
773,468

 
778,994

 
643,576

 
222,534

 
516,995

 
(5,526
)
 
(0.7
)
 
256,473

 
49.6

Loans and leases held-for-sale
138,058

 
1,121,326

 
118,482

 
40,835

 
55,204

 
(983,268
)
 
(87.7
)
 
82,854

 
150.1

Loans and leases(1) :
 
 
 
 
 
 
 
 
 
 


 


 


 


Commercial and industrial
11,827,315

 
10,955,937

 
9,290,978

 
6,683,060

 
6,495,163

 
871,378

 
8.0

 
5,332,152

 
82.1

Commercial real estate
9,291,540

 
9,057,834

 
6,964,643

 
3,069,969

 
2,917,631

 
233,706

 
2.6

 
6,373,909

 
N.M.

Lease financing
2,682,323

 
2,616,360

 
2,570,567

 
2,565,175

 
2,527,346

 
65,963

 
2.5

 
154,977

 
6.1

Residential mortgage
6,113,279

 
6,023,647

 
4,853,627

 
2,337,818

 
2,345,881

 
89,632

 
1.5

 
3,767,398

 
160.6

Consumer installment
1,517,412

 
1,546,952

 
2,389,830

 
1,586,633

 
1,852,813

 
(29,540
)
 
(1.9
)
 
(335,401
)
 
(18.1
)
Home equity
3,514,278

 
3,604,153

 
3,433,830

 
2,997,050

 
3,048,128

 
(89,875
)
 
(2.5
)
 
466,150

 
15.3

Total loans and
leases(1)
34,946,147

 
33,804,883

 
29,503,475

 
19,239,705

 
19,186,962

 
1,141,264

 
3.4

 
15,759,185

 
82.1

Interest-bearing deposits with banks and other
538,971

 
656,555

 
933,014

 
280,075

 
261,556

 
(117,584
)
 
(17.9
)
 
277,415

 
106.1

Total interest-earning assets
42,879,602

 
41,851,352

 
35,805,270

 
22,753,547

 
22,394,604

 
1,028,250

 
2.5

 
20,484,998

 
91.5

Other assets
4,105,824

 
4,268,162

 
3,289,096

 
1,730,275

 
1,712,337

 
(162,338
)
 
(3.8
)
 
2,393,487

 
139.8

Total assets
$
46,985,426

 
$
46,119,514

 
$
39,094,366

 
$
24,483,822

 
$
24,106,941

 
$
865,912

 
1.9

 
$
22,878,485

 
94.9

LIABILITIES AND EQUITY:
 
 
 
 
 
 
 
 
 


 


 


 


Noninterest-bearing deposits
$
7,929,933

 
$
7,968,769

 
$
6,564,195

 
$
3,980,811

 
$
3,919,746

 
$
(38,836
)
 
(0.5
)
 
$
4,010,187

 
102.3
 %
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 


 


 


 


Checking
5,990,309

 
5,891,566

 
4,805,843

 
2,479,814

 
2,457,767

 
98,743

 
1.7

 
3,532,542

 
143.7

Savings
8,589,815

 
8,404,460

 
7,676,165

 
6,452,510

 
6,253,992

 
185,355

 
2.2

 
2,335,823

 
37.3

Money market
4,792,248

 
4,463,476

 
3,490,922

 
1,430,556

 
1,490,631

 
328,772

 
7.4

 
3,301,617

 
N.M.

Certificates of deposit
7,329,632

 
7,825,573

 
7,320,720

 
4,527,822

 
4,622,120

 
(495,941
)
 
(6.3
)
 
2,707,512

 
58.6

Total interest-bearing deposits
26,702,004

 
26,585,075

 
23,293,650

 
14,890,702

 
14,824,510

 
116,929

 
0.4

 
11,877,494

 
80.1

Total deposits
34,631,937

 
34,553,844

 
29,857,845

 
18,871,513

 
18,744,256

 
78,093

 
0.2

 
15,887,681

 
84.8

Borrowings:
 
 
 
 
 
 
 
 
 
 


 


 


 


Short-term borrowings
2,689,262

 
2,585,682

 
1,884,228

 
321,043

 
293,499

 
103,580

 
4.0

 
2,395,763

 
N.M.

Long-term borrowings
2,608,204

 
1,739,852

 
1,472,150

 
1,657,527

 
1,500,832

 
868,352

 
49.9

 
1,107,372

 
73.8

Total borrowings
5,297,466

 
4,325,534

 
3,356,378

 
1,978,570

 
1,794,331

 
971,932

 
22.5

 
3,503,135

 
195.2

Total interest-bearing liabilities
31,999,470

 
30,910,609

 
26,650,028

 
16,869,272

 
16,618,841

 
1,088,861

 
3.5

 
15,380,629

 
92.5

Total deposits and borrowings
39,929,403

 
38,879,378

 
33,214,223

 
20,850,083

 
20,538,587

 
1,050,025

 
2.7

 
19,390,816

 
94.4

Accrued expenses and other liabilities
1,425,536

 
1,549,017

 
1,197,014

 
969,723

 
989,104

 
(123,481
)
 
(8.0
)
 
436,432

 
44.1

Total liabilities
41,354,939

 
40,428,395

 
34,411,237

 
21,819,806

 
21,527,691

 
926,544

 
2.3

 
19,827,248

 
92.1

Total TCF Financial Corporation shareholders' equity
5,605,159

 
5,667,436

 
4,657,613

 
2,634,386

 
2,554,729

 
(62,277
)
 
(1.1
)
 
3,050,430

 
119.4

Non-controlling interest in subsidiaries
25,328

 
23,683

 
25,516

 
29,630

 
24,521

 
1,645

 
6.9

 
807

 
3.3

Total equity
5,630,487

 
5,691,119

 
4,683,129

 
2,664,016

 
2,579,250

 
(60,632
)
 
(1.1
)
 
3,051,237

 
118.3

Total liabilities and equity
$
46,985,426

 
$
46,119,514

 
$
39,094,366

 
$
24,483,822

 
$
24,106,941

 
$
865,912

 
1.9

 
$
22,878,485

 
94.9

N.M. Not Meaningful
(1)
Average balances of loans and leases include nonaccrual loans and leases and are presented net of unearned income.


12


TCF FINANCIAL CORPORATION AND SUBSIDIARIES
 
 
 
 
 
Consolidated Quarterly Yields and Rates(1)(2) (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Change From
 
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
 
Dec. 31,
Mar. 31,
 
2020
 
2019
 
2019
 
2019
 
2019
 
2019
2019
ASSETS:
 
 
 
 
 
 
 
 
 
 
 
 
Federal Home Loan Bank and Federal Reserve Bank stocks
2.79
%
 
3.24
%
 
1.39
%
 
3.91
%
 
3.70
%
 
(45)
bps
(91)
bps
Investment securities held-to-maturity
1.64

 
2.53

 
1.68

 
2.53

 
1.45

 
(89)
 
19
 
Investment securities available-for-sale:
 
 
 
 
 
 
 
 
 
 

 

 
Taxable
2.74

 
2.85

 
2.88

 
3.11

 
3.04

 
(11)
 
(30)
 
Tax-exempt(3)
2.85

 
2.84

 
2.66

 
2.75

 
2.63

 
1
 
22
 
Loans and leases held-for-sale
4.53

 
5.58

 
4.74

 
5.88

 
6.05

 
(105)
 
(152)
 
Loans and leases(3)
 
 
 
 
 
 
 
 
 
 

 

 
Commercial and industrial
5.42

 
5.63

 
6.25

 
6.56

 
6.63

 
(21)
 
(121)
 
Commercial real estate
5.01

 
5.38

 
5.45

 
5.05

 
5.17

 
(37)
 
(16)
 
Lease financing
5.09

 
5.11

 
5.11

 
5.13

 
5.13

 
(2)
 
(4)
 
Residential mortgage
4.02

 
4.05

 
4.23

 
4.91

 
5.07

 
(3)
 
(105)
 
Consumer installment
5.23

 
4.97

 
5.73

 
5.63

 
5.58

 
26
 
(35)
 
Home equity
5.85

 
5.93

 
6.49

 
6.90

 
6.98

 
(8)
 
(113)
 
Total loans and leases(3)
5.08

 
5.24

 
5.62

 
5.91

 
5.97

 
(16)
 
(89)
 
Interest-bearing deposits with banks and other
1.72

 
2.07

 
2.44

 
3.64

 
3.87

 
(35)
 
(215)
 
 
 
 
 
 
 
 
 
 
 
 

 

 
Total interest-earning assets
4.64

 
4.85

 
5.11

 
5.48

 
5.55

 
(21)
 
(91)
 
 
 
 
 
 
 
 
 
 
 
 

 

 
LIABILITIES:
 
 
 
 
 
 
 
 
 
 

 

 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 

 

 
Checking
0.39

 
0.51

 
0.46

 
0.07

 
0.06

 
(12)
 
33
 
Savings
0.64

 
0.71

 
0.73

 
0.77

 
0.69

 
(7)
 
(5)
 
Money market
1.25

 
1.38

 
1.48

 
1.29

 
1.21

 
(13)
 
4
 
Certificates of deposit
1.81

 
1.97

 
2.07

 
2.06

 
1.94

 
(16)
 
(13)
 
Total interest-bearing deposits
1.02

 
1.15

 
1.21

 
1.09

 
1.03

 
(13)
 
(1)
 
Total deposits
0.78

 
0.88

 
0.94

 
0.86

 
0.81

 
(10)
 
(3)
 
Borrowings:
 
 
 
 
 
 
 
 
 
 

 

 
Short-term borrowings
1.56

 
1.73

 
1.11

 
2.63

 
2.67

 
(17)
 
(111)
 
Long-term borrowings
2.42

 
2.87

 
3.17

 
3.34

 
3.44

 
(45)
 
(102)
 
Total borrowings
1.98

 
2.19

 
2.01

 
3.23

 
3.31

 
(21)
 
(133)
 
 
 
 
 
 
 
 
 
 
 
 

 

 
Total interest-bearing liabilities
1.18

 
1.29

 
1.31

 
1.34

 
1.28

 
(11)
 
(10)
 
 
 
 
 
 
 
 
 
 
 
 

 

 
Net interest margin (FTE)
3.76

 
3.89

 
4.14

 
4.49

 
4.61

 
(13)
 
(85)
 
(1)
Annualized.
(2)
Yields are presented on a fully tax-equivalent basis.
(3)
The yield on tax-exempt loans and investment securities available-for-sale is computed on a tax-equivalent basis using a statutory federal income tax rate of 21%.




13


TCF FINANCIAL CORPORATION AND SUBSIDIARIES
 
 
 
 
Composition of Loans (Unaudited)
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Change From
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
 
Dec. 31, 2019
Mar. 31, 2019
(Dollars in thousands)
2020
 
2019
 
2019
 
2019
 
2019
 
$
%
$
Commercial and industrial
$
12,326,943

 
$
11,439,602

 
$
10,913,343

 
$
6,666,106

 
$
6,852,373

 
$
887,341

7.8%
$
5,474,570

Commercial real estate
9,486,904

 
9,136,870

 
8,773,970

 
3,168,774

 
2,904,379

 
350,034

3.8
6,582,525

Lease financing
2,708,998

 
2,699,869

 
2,594,373

 
2,582,613

 
2,551,344

 
9,129

0.3
157,654

Total commercial loan and lease portfolio
24,522,845

 
23,276,341

 
22,281,686

 
12,417,493

 
12,308,096

 
1,246,504

5.4
12,214,749

Residential mortgage
6,435,314

 
6,179,805

 
6,057,404

 
2,368,411

 
2,376,878

 
255,509

4.1
4,058,436

Consumer installment
1,509,953

 
1,542,411

 
1,562,252

 
1,474,480

 
1,722,557

 
(32,458
)
(2.1)
(212,604
)
Home equity
3,453,502

 
3,498,907

 
3,609,410

 
2,924,753

 
2,976,679

 
(45,405
)
(1.3)
476,823

Total consumer loan portfolio
11,398,769

 
11,221,123

 
11,229,066

 
6,767,644

 
7,076,114

 
177,646

1.6
4,322,655

Total
$
35,921,614

 
$
34,497,464

 
$
33,510,752

 
$
19,185,137

 
$
19,384,210

 
$
1,424,150

4.1
$
16,537,404


Composition of Deposits (Unaudited)
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Change From
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
 
Dec. 31, 2019
Mar. 31, 2019
(Dollars in thousands)
2020
 
2019
 
2019
 
2019
 
2019
 
$
%
$
Noninterest-bearing deposits
$
8,237,916

 
$
7,970,590

 
$
7,979,900

 
$
4,062,912

 
$
4,104,652

 
$
267,326

3.4%
$
4,133,264

Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 



Checking
6,289,046

 
5,966,178

 
6,266,740

 
2,498,042

 
2,532,688

 
322,868

5.4
3,756,358

Savings
8,703,864

 
8,506,058

 
8,347,541

 
6,503,102

 
6,426,465

 
197,806

2.3
2,277,399

Money market
5,105,285

 
4,570,081

 
4,305,921

 
1,443,004

 
1,468,308

 
535,204

11.7
3,636,977

Certificates of deposit
7,463,192

 
7,455,556

 
8,385,972

 
4,605,327

 
4,491,998

 
7,636

0.1
2,971,194

Total interest-bearing deposits
27,561,387

 
26,497,873

 
27,306,174

 
15,049,475

 
14,919,459

 
1,063,514

4.0
12,641,928

Total deposits
$
35,799,303

 
$
34,468,463

 
$
35,286,074

 
$
19,112,387

 
$
19,024,111

 
$
1,330,840

3.9
$
16,775,192


Summary of Credit Quality Data
 
Allowance for Credit Losses (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mar. 31,
 
Jan. 1,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
 
2020
 
2020
 
2019
 
2019
 
2019
 
2019
(Dollars in thousands)
Balance
% of Portfolio
Adjusted for adoption of CECL
 
Balance
% of Portfolio
Balance
% of Portfolio
Balance
% of Portfolio
Balance
% of Portfolio
Commercial and industrial
$
117,507

 
0.95%
 
$
93,884

 
$
42,430

 
0.38%
 
$
39,974

 
0.37%
 
$
38,605

 
0.59%
 
$
38,639

 
0.57%
Commercial real estate
86,209

 
0.91
 
67,620

 
27,308

 
0.29
 
24,090

 
0.27
 
22,747

 
0.70
 
20,659

 
0.70
Lease financing
27,610

 
1.02
 
21,631

 
14,742

 
0.55
 
14,367

 
0.55
 
14,440

 
0.56
 
14,377

 
0.56
Residential mortgage
97,185

 
1.51
 
72,939

 
8,099

 
0.13
 
19,816

 
0.33
 
21,102

 
0.89
 
20,281

 
0.85
Consumer installment
20,178

 
1.34
 
15,967

 
2,678

 
0.17
 
1,859

 
0.12
 
26,731

 
1.81
 
30,477

 
1.77
Home equity
57,694

 
1.67
 
47,003

 
17,795

 
0.51
 
21,112

 
0.58
 
22,878

 
0.78
 
23,539

 
0.79
Total
$
406,383

 
1.13%
 
$
319,044

 
$
113,052

 
0.33%
 
$
121,218

 
0.36%
 
$
146,503

 
0.76%
 
$
147,972

 
0.76%


14


TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Summary of Credit Quality Data (Unaudited), Continued
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Changes in Allowance for Credit Losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Change From
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
 
Dec. 31,
 
Mar. 31,
(Dollars in thousands)
2020
 
2019
 
2019
 
2019
 
2019
 
2019
 
2019
Balance, beginning of period
$
113,052

 
$
121,218

 
$
146,503

 
$
147,972

 
$
157,446

 
$
(8,166
)
 
$
(44,394
)
Impact of CECL adoption
205,992

 
—

 
—

 
—

 
—

 
205,992

 
205,992

Adjusted balance, beginning of period
319,044

 
121,218

 
146,503

 
147,972

 
157,446


197,826

 
161,598

Charge-offs
(15,649
)
 
(16,891
)
 
(35,547
)
 
(21,066
)
 
(24,431
)
 
1,242

 
8,782

Recoveries
10,172

 
10,654

 
6,969

 
6,984

 
5,777

 
(482
)
 
4,395

Net (charge-offs) recoveries
(5,477
)
 
(6,237
)
 
(28,578
)
 
(14,082
)
 
(18,654
)
 
760

 
13,177

Provision for credit losses related to loans and leases(1)
92,990

 
14,403

 
27,188

 
13,569

 
10,122

 
78,587

 
82,868

Other(2)
(174
)
 
(16,332
)
 
(23,895
)
 
(956
)
 
(942
)
 
16,158

 
768

Balance, end of period
$
406,383

 
$
113,052

 
$
121,218

 
$
146,503

 
$
147,972

 
$
293,331

 
$
258,411

(1)
Provision for credit losses related to loans and leases excludes the provision related to the unfunded commitment liability of $4.0 million and other assets from the total provision for credit losses for the three months ended March 31, 2020.
(2)
Primarily includes the transfer of the allowance for credit losses to loans and leases held-for-sale.

Net Charge-offs
 
 
 
 
 
Quarter Ended
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
 
2020
 
2019
 
2019
 
2019
 
2019
(Dollars in thousands)
Balance
 
Rate(1)
 
Balance
 
Rate(1)
 
Balance
 
Rate(1)
 
Balance
 
Rate(1)
 
Balance
 
Rate(1)
Commercial and industrial
$
(4,022
)
 
0.14
 %
 
$
(5,736
)
 
0.21
 %
 
$
(17,631
)
 
0.76
 %
 
$
(5,820
)
 
0.35
%
 
$
(5,259
)
 
0.32
%
Commercial real estate
563

 
(0.02
)
 
(7
)
 
—

 
13

 
—

 
9

 
—

 
5

 
—

Lease financing
(878
)
 
0.13

 
(1,749
)
 
0.27

 
(2,192
)
 
0.34

 
(966
)
 
0.15

 
(1,391
)
 
0.22

Residential mortgage
355

 
(0.02
)
 
1,552

 
(0.10
)
 
(189
)
 
0.02

 
(80
)
 
0.01

 
(468
)
 
0.08

Consumer installment
(1,249
)
 
0.33

 
(2,577
)
 
0.67

 
(8,984
)
 
1.50

 
(6,990
)
 
1.76

 
(11,561
)
 
2.50

Home equity
(246
)
 
0.03

 
2,280

 
(0.25
)
 
405

 
(0.05
)
 
(235
)
 
0.03

 
20

 
—

Total
$
(5,477
)
 
0.06
 %
 
$
(6,237
)
 
0.07
 %
 
$
(28,578
)
 
0.39
 %
 
$
(14,082
)
 
0.29
%
 
$
(18,654
)
 
0.39
%
(1) Annualized net charge-off rate based on average loans and leases.

Over 90-Day Delinquencies as a Percentage of Portfolio(1)
 
 
 
 
 
 
 
 
 
 
 
Change From
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
 
Dec. 31,
Mar. 31,
 
2020
 
2019
 
2019
 
2019
 
2019
 
2019
2019
Commercial and industrial
—
%
 
—
%
 
0.02
%
 
—
%
 
—
%
 
—

bps
—

bps
Commercial real estate
0.02

 
0.02

 
0.09

 
—

 
—

 
—

 
2

 
Lease financing
0.11

 
0.07

 
0.09

 
0.12

 
0.10

 
4

 
1

 
Residential mortgage
0.01

 
0.01

 
0.01

 
0.05

 
0.07

 
—

 
(6
)
 
Consumer installment
—

 
0.01

 
—

 
0.14

 
0.14

 
(1
)
 
(14
)
 
Home equity
0.01

 
—

 
—

 
—

 
—

 
1

 
1

 
Subtotal
0.02

 
0.01

 
0.04

 
0.03

 
0.04

 
1

 
(2
)
 
Portfolios acquired with deteriorated credit quality(2)
N/A

 
10.43

 
5.47

 
18.92

 
6.75

 
N/A

 
N/A

 
Total delinquencies
0.02
%
 
0.09
%
 
0.09
%
 
0.04
%
 
0.04
%
 
(7
)
 
(2
)
 
(1)
Excludes nonaccrual loans and leases.
(2)
Prior to the adoption of CECL as of January 1, 2020, purchased credit impaired loans were not classified as nonaccrual loans because they were recorded at their net realizable value based on the principal and interest expected to be collected on the loans.
 

15


TCF FINANCIAL CORPORATION AND SUBSIDIARIES
 
Summary of Credit Quality Data (Unaudited), Continued
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonperforming Assets
 
 
 
 
 
 
 
 
 
 
 
 
Change From
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
 
Dec. 31,
Mar. 31,
(Dollars in thousands)
2020
 
2019
 
2019
 
2019
 
2019
 
2019
2019
Nonaccrual loans and leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
84,157

 
$
53,812

 
$
55,039

 
$
18,483

 
$
17,150

 
$
30,345

 
$
67,007

 
Commercial real estate
47,032

 
29,735

 
26,518

 
545

 
607

 
17,297

 
46,425

 
Lease financing
13,170

 
10,957

 
11,503

 
12,886

 
10,976

 
2,213

 
2,194

 
Residential mortgage
61,980

 
38,577

 
48,816

 
34,760

 
35,227

 
23,403

 
26,753

 
Consumer installment
989

 
714

 
636

 
8,633

 
9,034

 
275

 
(8,045
)
 
Home equity
43,147

 
35,863

 
39,296

 
32,686

 
30,291

 
7,284

 
12,856

 
Total nonaccrual loans and leases(1)
$
250,475

 
$
169,658

 
$
181,808

 
$
107,993

 
$
103,285

 
$
80,817

 
$
147,190

 
Other real estate owned
38,914

 
34,256

 
27,638

 
11,964

 
18,361

 
4,658

 
20,553

 
Total nonperforming assets
289,389

 
203,914

 
209,446

 
119,957

 
121,646

 
85,475

 
167,743

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonaccrual loans and leases as a percentage of total loans and leases(1)
0.70
%
 
0.49
%
 
0.54
%
 
0.56
%
 
0.53
%
 
21

bps
17

bps
Allowance for credit losses as a percentage of nonaccrual loans and leases(1)
162.24

 
66.64

 
66.67

 
135.66

 
143.27

 
9,560

 
1,897

 
Nonperforming assets as a percentage of total loans and leases and other real estate owned(1)
0.80

 
0.59

 
0.62

 
0.62

 
0.63

 
21

 
17

 
(1)
Prior to the adoption of CECL as of January 1, 2020, purchased credit impaired loans were not classified as nonaccrual loans because they were recorded at their net realizable value based on the principal and interest expected to be collected on the loans. At January 1, 2020, $73.4 million of previous purchased credit impaired loans were reclassified to nonaccrual loans as a result of the adoption of CECL.



Consolidated Capital Information (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Change From
(Dollars in thousands, except per share data)
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
 
Dec. 31,
Mar. 31,
2020
 
2019
 
2019
 
2019
 
2019
 
2019
2019
Dividends declared per common share
$
0.35

 
$
0.35

 
$
0.35

 
$
0.30

 
$
0.30

 
0.0
%
16.7

%
Book value per common share
35.85

 
36.20

 
35.82

 
30.43

 
29.38

 
(1.0)
 
22.0

 
Tangible book value per common share(1)
26.16

 
26.60

 
26.18

 
28.33

 
27.28

 
(1.7)
 
(4.1)
 
Common equity to assets
11.23
%
 
11.87
%
 
12.04
%
 
10.22
%
 
10.02
%
 
(64)
bps
121

bps
Tangible common equity to tangible assets(1)
8.45

 
9.01

 
9.09

 
9.58

 
9.37

 
(56)
 
(92)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Regulatory Capital:(2)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common equity Tier 1 capital
$
4,026,304

 
$
4,050,826

 
$
4,009,214

 
$
2,305,706

 
$
2,266,244

 
(0.6)
%
77.7

%
Tier 1 capital
4,225,755

 
4,236,648

 
4,197,706

 
2,495,178

 
2,459,132

 
(0.3)
 
71.8

 
Total capital
4,744,899

 
4,681,630

 
4,652,708

 
2,811,347

 
2,792,419

 
1.4
 
69.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common equity Tier 1 capital ratio
10.44
%
 
10.99
%
 
10.88
%
 
10.99
%
 
10.79
%
 
(55)
bps
(35)

bps
Tier 1 risk-based capital ratio
10.96

 
11.49

 
11.40

 
11.90

 
11.71

 
(53)
 
(75)

 
Total risk-based capital ratio
12.31

 
12.70

 
12.63

 
13.40

 
13.30

 
(39)
 
(99)

 
Tier 1 leverage ratio
9.27

 
9.49

 
11.16

 
10.26

 
10.26

 
(22)
 
(99)

 
(1)
See "Reconciliation of GAAP to Non-GAAP Financial Measures" tables.
(2)
March 31, 2020 amounts are preliminary pending completion and filing of the Corporation's regulatory reports and reflect our election of the five-year CECL transition for regulatory capital purposes.



16


TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Computation of adjusted diluted earnings per common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
(Dollars in thousands, except per share data)
 
2020
 
2019
 
2019
 
2019
 
2019
Net income available to common shareholders
 
$
49,406

 
$
109,905

 
$
19,654

 
$
87,933

 
$
68,001

Earnings allocated to participating securities
 
—

 
—

 
—

 
(17
)
 
(13
)
Earnings allocated to common stock
(a)
49,406

 
109,905

 
19,654

 
87,916

 
67,988

Merger-related expenses
 
36,728

 
47,025

 
111,259

 
4,226

 
9,458

Notable items:
 
 
 
 
 
 
 
 
 
 
Sale of legacy TCF auto finance portfolio and related expenses(1)
 
3,063

 
12,864

 
19,264

 
—

 
—

Termination of interest rate swaps(2)
 
—

 
—

 
17,302

 
—

 
—

Gain on sale of certain investment securities(3)
 
—

 
—

 
(5,869
)
 
—

 
—

Write-down of company-owned vacant land parcels and branch exit costs(4)
 
—

 
3,494

 
5,890

 
—

 
—

Pension fair valuation adjustment(4)
 
—

 
6,341

 
—

 
—

 
—

Loan servicing rights (recovery) impairment(2)
 
8,236

 
(638
)
 
4,520

 
—

 
—

Total notable items
 
11,299

 
22,061

 
41,107

 
—

 
—

Related income tax expense, net of benefits(5)
 
(10,071
)
 
(19,904
)
 
(46,213
)
 
(1,003
)
 
(2,252
)
Total adjustments, net of tax
 
37,956

 
49,182

 
106,153

 
3,223

 
7,206

Adjusted earnings allocated to common stock
(b)
$
87,362

 
$
159,087

 
$
125,807

 
$
91,139

 
$
75,194

 
 
 
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding used in diluted earnings per common share calculation(6)
(c)
152,114,017

 
152,658,766

 
128,754,588

 
82,298,920

 
82,245,577

 
 
 
 
 
 
 
 
 
 
 
Diluted earnings per common share
(a)/(c)
$
0.32

 
$
0.72

 
$
0.15

 
$
1.07

 
$
0.83

Adjusted diluted earnings per common share
(b)/(c)
0.57

 
1.04

 
0.98

 
1.11

 
0.91

 
 
 
 
 
 
 
 
 
 
 
Net income attributable to TCF
 
$
51,899

 
$
112,399

 
$
22,148

 
$
90,427

 
$
70,494

Total adjustments, net of tax
 
37,956

 
49,182

 
106,153

 
3,223

 
7,206

Adjusted net income attributable to TCF
 
$
89,855

 
$
161,581

 
$
128,301

 
$
93,650

 
$
77,700

(1)
First quarter 2020 amount included within occupancy and equipment ($1.6 million), compensation and employee benefits ($0.9 million) and other noninterest expense ($0.6 million).Fourth quarter 2019 amount included within net gains (losses) on sales of loans and leases ($8.2 million), other noninterest expense ($2.2 million), occupancy and equipment ($1.5 million) and compensation and employee benefits ($0.9 million). Third quarter 2019 amount included within net gains (losses) on sales of loans and leases.
(2)
Included within Other noninterest income.
(3)
Included within Net gains on investment securities.
(4)
Included within Other noninterest expense.
(5)
Included within Income tax expense (benefit).
(6)
Assumes conversion of common shares, as applicable.

Computation of adjusted net interest income and margin:
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
(Dollars in thousands)
2020
 
2019
 
2019
 
2019
 
2019
Net Interest Income
$
401,481

 
$
408,753

 
$
371,793

 
$
254,057

 
$
254,429

Purchase accounting accretion and amortization
(25,258
)
 
(30,523
)
 
(28,411
)
 
—

 
—

Adjusted net interest income, excluding purchase accounting accretion and amortization
$
376,223

 
$
378,230

 
$
343,382

 
$
254,057

 
$
254,429

Net interest margin (FTE)
3.76
 %
 
3.89
 %
 
4.14
 %
 
4.49
%
 
4.61
%
Purchase accounting accretion and amortization impact
(0.23
)
 
(0.29
)
 
(0.31
)
 
—

 
—

Adjusted net interest margin, excluding purchase accounting accretion and amortization (FTE)
3.53
 %
 
3.60
 %
 
3.83
 %
 
4.49
%
 
4.61
%


17


TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited), Continued
 
 
 
 
 
 
 
 
 
 
 
Computation of adjusted return on average assets, common equity, average tangible common equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
(Dollars in thousands)
 
2020
 
2019
 
2019
 
2019
 
2019
Adjusted net income after tax expense:
 
 
 
 
 
 
 
 
 
 
Income after tax expense
(a)
$
53,816

 
$
114,456

 
$
24,978

 
$
94,043

 
$
73,449

Merger-related expenses
 
36,728

 
47,025

 
111,259

 
4,226

 
9,458

Notable items
 
11,299

 
22,061

 
41,107

 
—

 
—

Related income tax expense, net of tax benefits
 
(10,071
)
 
(19,904
)
 
(46,213
)
 
(1,003
)
 
(2,252
)
Adjusted net income after tax expense for ROAA calculation
(b)
91,772

 
163,638

 
131,131

 
97,266

 
80,655

Net income available to common shareholders
(c)
49,406

 
109,905

 
19,654

 
87,933

 
68,001

Other intangibles amortization
 
5,480

 
5,505

 
4,544

 
798

 
812

Related income tax expense
 
(1,149
)
 
(1,284
)
 
(1,085
)
 
(189
)
 
(193
)
Net income available to common shareholders used in ROATCE calculation
(d)
53,737

 
114,126

 
23,113

 
88,542

 
68,620

 
 
 
 
 
 
 
 
 
 
 
Adjusted net income available to common shareholders:
 
 
 
 
 
 
 
 
 
 
Net income available to common shareholders
 
49,406

 
109,905

 
19,654

 
87,933

 
68,001

Notable items
 
11,299

 
22,061

 
41,107

 
—

 
—

Merger-related expenses
 
36,728

 
47,025

 
111,259

 
4,226

 
9,458

Related income tax expense, net of tax benefits
 
(10,071
)
 
(19,904
)
 
(46,213
)
 
(1,003
)
 
(2,252
)
Net income available to common shareholders used in adjusted ROACE calculation
(e)
87,362

 
159,087

 
125,807

 
91,156

 
75,207

Other intangibles amortization
 
5,480

 
5,505

 
4,544

 
798

 
812

Related income tax expense
 
(1,149
)
 
(1,284
)
 
(1,085
)
 
(189
)
 
(193
)
Net income available to common shareholders used in adjusted ROATCE calculation
(f)
91,693

 
163,308

 
129,266

 
91,765

 
75,826

Average balances:
 
 
 
 
 
 
 
 
 
 
Average assets
(g)
46,985,426

 
46,119,514

 
39,094,366

 
24,483,822

 
24,106,941

Total equity
 
5,630,487

 
5,691,119

 
4,683,129

 
2,664,016

 
2,579,250

Non-controlling interest in subsidiaries
 
(25,328
)
 
(23,683
)
 
(25,516
)
 
(29,630
)
 
(24,521
)
Total TCF Financial Corporation shareholders' equity
 
5,605,159

 
5,667,436

 
4,657,613

 
2,634,386

 
2,554,729

Preferred stock
 
(169,302
)
 
(169,302
)
 
(169,302
)
 
(169,302
)
 
(169,302
)
Average total common shareholders' equity used in ROACE calculation
(h)
5,435,857

 
5,498,134

 
4,488,311

 
2,465,084

 
2,385,427

Goodwill, net
 
(1,301,080
)
 
(1,266,166
)
 
(890,155
)
 
(154,757
)
 
(154,757
)
Other intangibles, net
 
(166,298
)
 
(211,294
)
 
(142,925
)
 
(19,270
)
 
(20,080
)
Average tangible common shareholders' equity used in ROATCE calculation
(i)
$
3,968,479

 
$
4,020,674

 
$
3,455,231

 
$
2,291,057

 
$
2,210,590

 
 
 
 
 
 
 
 
 
 
 
ROAA(1)
(a)/(g)
0.46
%
 
0.99
%
 
0.26
%
 
1.54
%
 
1.22
%
Adjusted ROAA(1)
(b)/(g)
0.78

 
1.42

 
1.34

 
1.59

 
1.34

ROACE(1)
(c)/(h)
3.64

 
8.00

 
1.75

 
14.27

 
11.40

Adjusted ROACE(1)
(e)/(h)
6.43

 
11.57

 
11.21

 
14.79

 
12.61

ROATCE(1)
(d)/(i)
5.42

 
11.35

 
2.68

 
15.46

 
12.42

Adjusted ROATCE(1)
(f)/(i)
9.24

 
16.25

 
14.96

 
16.02

 
13.72

(1)
Annualized.



18


TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited), Continued
 
 
 
 
 
 
 
 
 
 
 
Computation of adjusted efficiency ratio, noninterest income and noninterest expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
(Dollars in thousands)
 
2020
 
2019
 
2019
 
2019
 
2019
Noninterest expense
(a)
$
374,599

 
$
416,571

 
$
425,620

 
$
236,849

 
$
253,075

Merger-related expenses
 
(36,728
)
 
(47,025
)
 
(111,259
)
 
(4,226
)
 
(9,458
)
Write-down of company-owned vacant land parcels and branch exit costs
 
—

 
(3,494
)
 
(5,890
)
 
—

 
—

Expenses related to the sale of Legacy TCF auto finance portfolio
 
(3,063
)
 
(4,670
)
 
—

 
—

 
—

Pension fair valuation adjustment
 
—

 
(6,341
)
 
—

 
—

 
—

Adjusted noninterest expense
 
334,808

 
355,041

 
308,471

 
232,623

 
243,617

Lease financing equipment depreciation
 
(18,450
)
 
(18,629
)
 
(19,408
)
 
(19,133
)
 
(19,256
)
Amortization of intangibles
 
(5,480
)
 
(5,505
)
 
(4,544
)
 
(798
)
 
(812
)
Impairment of federal historic tax credits
 
(1,521
)
 
(4,030
)
 
—

 
—

 
—

Adjusted noninterest expense, efficiency ratio
(b)
309,357

 
326,877

 
284,519

 
212,692

 
223,549

 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
401,481

 
408,753

 
371,793

 
254,057

 
254,429

Noninterest income
 
136,963

 
158,052

 
94,258

 
109,718

 
103,504

Total revenue
(c)
538,444

 
566,805

 
466,051

 
363,775

 
357,933

 
 
 
 
 
 
 
 
 
 
 
Noninterest income
 
136,963

 
158,052

 
94,258

 
109,718

 
103,504

Sale of Legacy TCF auto finance portfolio
 
—

 
8,194

 
19,264

 
—

 
—

Termination of interest rate swaps
 
—

 
—

 
17,302

 
—

 
—

Gain on sales of certain investment securities
 
—

 
—

 
(5,869
)
 
—

 
—

Loan servicing rights impairment (recovery)
 
8,236

 
(638
)
 
4,520

 
—

 
—

Adjusted noninterest income
 
145,199

 
165,608

 
129,475

 
109,718

 
103,504

Net interest income
 
401,481

 
408,753

 
371,793

 
254,057

 
254,429

Net interest income FTE adjustment
 
2,983

 
2,896

 
2,488

 
1,337

 
1,722

Adjusted net interest income
 
404,464

 
411,649

 
374,281

 
255,394

 
256,151

Lease financing equipment depreciation
 
(18,450
)
 
(18,629
)
 
(19,408
)
 
(19,133
)
 
(19,256
)
Adjusted total revenue, efficiency ratio
(d)
$
531,213

 
$
558,628

 
$
484,348

 
$
345,979

 
$
340,399

 
 
 
 
 
 
 
 
 
 
 
Efficiency ratio
(a)/(c)
69.57
%
 
73.49
%
 
91.32
%
 
65.11
%
 
70.70
%
Adjusted efficiency ratio
(b)/(d)
58.24

 
58.51

 
58.74

 
61.48

 
65.67




19


TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited), Continued
 
 
 
 
 
 
 
 
 
 
 
Computation of tangible common equity to tangible assets and tangible book value per common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
 
Mar. 31,
(Dollars in thousands, except per share data)
 
2020
 
2019
 
2019
 
2019
 
2019
Total equity
 
$
5,655,833

 
$
5,727,241

 
$
5,693,417

 
$
2,710,518

 
$
2,645,845

Non-controlling interest in subsidiaries
 
(30,149
)
 
(20,226
)
 
(23,313
)
 
(24,858
)
 
(29,452
)
Total TCF Financial Corporation shareholders' equity
 
5,625,684

 
5,707,015

 
5,670,104

 
2,685,660

 
2,616,393

Preferred stock
 
(169,302
)
 
(169,302
)
 
(169,302
)
 
(169,302
)
 
(169,302
)
Total common stockholders' equity
(a)
5,456,382

 
5,537,713

 
5,500,802

 
2,516,358

 
2,447,091

Goodwill, net
 
(1,313,046
)
 
(1,299,878
)
 
(1,265,111
)
 
(154,757
)
 
(154,757
)
Other intangibles, net
 
(162,887
)
 
(168,368
)
 
(215,910
)
 
(18,885
)
 
(19,684
)
Tangible common shareholders' equity
(b)
$
3,980,449

 
$
4,069,467

 
$
4,019,781

 
$
2,342,716

 
$
2,272,650

 
 
 
 
 
 
 
 
 
 
 
Total assets
(c)
$
48,594,383

 
$
46,651,553

 
$
45,692,511

 
$
24,626,830

 
$
24,418,715

Goodwill, net
 
(1,313,046
)
 
(1,299,878
)
 
(1,265,111
)
 
(154,757
)
 
(154,757
)
Other intangibles, net
 
(162,887
)
 
(168,368
)
 
(215,910
)
 
(18,885
)
 
(19,684
)
Tangible assets
(d)
$
47,118,450

 
$
45,183,307

 
$
44,211,490

 
$
24,453,188

 
$
24,244,274

 
 
 
 
 
 
 
 
 
 
 
Common stock shares outstanding
(e)
152,185,984

 
152,965,571

 
153,571,381

 
82,703,469

 
83,303,581

 
 
 
 
 
 
 
 
 
 
 
Common equity to assets
(a) / (c)
11.23
%
 
11.87
%
 
12.04
%
 
10.22
%
 
10.02
%
Tangible common equity to tangible assets
(b) / (d)
8.45

 
9.01

 
9.09

 
9.58

 
9.37

 
 
 
 
 
 
 
 
 
 
 
Book value per common share
(a) / (e)
$
35.85

 
$
36.20

 
$
35.82

 
$
30.43

 
$
29.38

Tangible book value per common share
(b) / (e)
26.16

 
26.60

 
26.18

 
28.33

 
27.28


20
April 27, 2020 TCF Financial Corporation 1Q20 Earnings Presentation

 
Cautionary Statements for the Purposes of Safe Harbor Provisions of the Securities Litigation Reform Act Any statements contained in this presentation regarding the outlook for the Corporation's businesses and their respective markets, such as projections of future performance, targets, guidance, statements of the Corporation's plans and objectives, forecasts of market trends and other matters are forward-looking statements based on the Corporation'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. This presentation also contains forward-looking statements regarding TCF’s (formerly Chemical Financial Corporation) outlook or expectations with respect to the merger and integration with legacy TCF Financial Corporation. Examples of forward-looking statements include, but are not limited to, statements regarding outlook and expectations with respect to strategic and financial benefits of the merger, including the expected impact of the transaction on TCF’s future financial performance (including anticipated accretion to earnings per share, the tangible book value earn-back period and other operating and return metrics), the expected costs to be incurred in connection with the merger, and operational aspects of post-merger integration. Certain factors could cause the Corporation'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 this Annual Report on Form 10-K under the heading "Risk Factors" or otherwise disclosed in documents filed or furnished by the Corporation with or to the SEC after the filing of this Annual Report on Form 10-K, the factors discussed below, and any other cautionary statements, written or oral, which may be made or referred to in connection with any such forward- looking statements. Since it is not possible to foresee all such factors, these factors should not be considered as complete or exhaustive: macroeconomic and other challenges and uncertainties resulting from the COVID-19 pandemic, such as the extent and duration of the impact on public health, the U.S. and global economies, financial markets and consumer and corporate customers and clients, including economic activity, employment levels and market liquidity, as well as the various actions taken in response to the challenges and uncertainties by governments, central banks and others, including TCF; a failure to manage credit risk; cyber-security breaches involving us or third parties, hacking, denial of service, loss or theft of information, or other cyber-attacks that disrupt TCF's business operations or damage its reputation; adverse developments affecting TCF's branches, including supermarket branches; inability to successfully execute on TCF's growth strategy through acquisitions or expanding existing business relationships; adverse effects related to competition from traditional competitors, non-bank providers of financial services and new technologies; failure to keep pace with technological change, including with respect to customer demands or system upgrades; risks related to developing new products, markets or lines of business; risks related to TCF's loan origination and sales activity; lack of access to liquidity or raise capital that isn’t dilutive; adverse changes in monetary, fiscal or tax policies; litigation or government enforcement actions; heightened consumer protection, supervisory or regulatory practices or requirements; deficiencies in TCF's compliance programs or risk mitigation frameworks; dependence on accurate and complete information from customers and counterparties; the failure to attract and retain key employees; ineffective internal controls; soundness of other financial institutions and other counterparty risk, including the risk of default, operational disruptions, or diminished availability of counterparties who satisfy our credit quality requirements; inability to grow deposits, increase earnings and revenue, manage operating expenses, or pay and receive dividends; interruptions, systems failures information technology and telecommunications systems failures of third-party services; deficiencies in TCF's quantitative models; the effect of any negative publicity or reputational damage; technological or operational difficulties; changes in accounting standards or interpretations of existing standards; adverse federal, state or foreign tax assessments; and the effects of man-made and natural disasters, any of which may negatively affect our operations and/or our customers. Use of Non-GAAP Financial Measures Management uses the adjusted net income, adjusted diluted earnings per common share, adjusted ROAA, adjusted ROACE, ROATCE, adjusted ROATCE, adjusted efficiency ratio, adjusted net interest income, net interest margin (FTE), net interest margin (FTE), adjusted net interest margin (FTE), adjusted noninterest income, adjusted noninterest expense, tangible book value per common share and tangible common equity to tangible assets 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 Corporation's capital and ability to withstand unexpected market or economic conditions and to assess the performance of the Corporation in relation to other banking institutions on the same basis as that applied by management, analysts and banking regulators. TCF adjusts certain results to exclude merger-related expenses and notable items in addition to presenting net interest income and net interest margin (FTE) excluding purchase accounting accretion and amortization. Management believes these measures are useful to investors in understanding TCF's business and operating results. 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. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measure may be found in the reconciliation tables included in this press release. 2

 
First Quarter Results Driven by MOE Integration and Impact of COVID-19 Diluted Efficiency ROACE ROATCE1 EPS Ratio $0.32 69.6% 3.6% 5.4% Reported Reported Reported Reported $0.57 58.2% 6.4% 9.2% Adjusted1 Adjusted1 Adjusted1 Adjusted1 • Published new Purpose and Beliefs statement in February MOE Integration <$321M • Expanded enhanced CRM capabilities across the footprint in March on Track On track to achieve 4Q20 NIE target • Remain on track to complete final core system conversion in 3Q20 Continued Loan and 4.1% 12.4% 3.9% Loan and lease Commercial growth Deposit growth Deposit Growth 2 growth QoQ YoY QoQ $97M 1.13% $167M 6 bps Add'l total fair value Credit Performance Provision for credit losses ALLL / Loans and Leases Net charge-off ratio discount on acquired (incl. $74M COVID-related) (inclusive of CECL Day 1) loans as of 3/31/20 3 7,300 $825M $1.2B COVID-19 Update loans balances Approved through Paycheck Consumer loan modification requests Protection Program (PPP) Strong Capital and 10.4% 17.4% 74% Liquidity Positions CET1 Ratio Cash and securities / Retail deposits as a % of assets total deposits 1 Denotes a non-GAAP financial measure; see Appendix for "Non-GAAP Reconciliation" slides 2 Based on combined historical TCF and Chemical reported financials 3 3 As of April 23, 2020

 
A Proactive Response to COVID-19 to Support Team Members and Customers “Caring like a neighbor” is one of our core beliefs – we are taking the necessary actions to reduce the health risk of COVID-19 to our team members and alleviate the financial impact on our customers Team Members Customers Communities • Work From Home – nearly all of • Small Business and Commercial • Financial Support for our Communities – middle and back office employees Borrower Relief – offering loan committed $100K incentives toward both working from home with minimal modifications for impacted customers and the Henry Ford Health System and impact on productivity (>4,000 team participating in the Paycheck Protection University of Minnesota emergency funds members) Program and Economic Injury Disaster for COVID-19 response, along with • Temporary Emergency Company Program to provide loan relief to businesses additional financial support to organizations Paid Time Policy – providing ◦ 8,500 commercial customer loan including Forgotten Harvest, Minnesota company-paid time off for team modification requests1 Disaster Recovery Funds and the City of members not able to work for reasons • Mortgage and Home Equity Payment Detroit related to COVID-19 Deferrals – payment deferrals for up to 90 • Small Business Loan Fund in Wayne • Premium Pay – enhanced days with no credit bureau impact and no County (Detroit) – $10M partnership to compensation for team members late fees provide fast relief through low-interest loans required to work in the office ◦ 7,300 consumer loan modification to help small businesses in Wayne County, (+$3/hr beginning April 1, 2020) requests for $825M2 Michigan • Suspension of Foreclosure Program – • Additional Community Support – donated suspended new residential property essential supplies to TCF Center temporary foreclosures hospital, Cleveland Clinic and Beaumont Hospital while also utilizing 3D printers to • Modified Branch Services – all branches make face shields for local health systems transitioned to drive-up only with lobby servicing by appointment - closed in-store branches near drive-thrus Management Approach • Implemented an internal COVID-19 Task Force • Senior Leadership Team meeting weekly • Executive Leadership Team meeting daily • Enhanced portfolio management and credit committee reporting 4 1 As of April 23, 2020, includes 5,800 requests from Capital Solutions with the remainder from traditional C&I and CRE 2 As of April 23, 2020

 
MOE Integration Remains on Track Despite challenges related to COVID-19 and our work- Purpose from-home approach, we remain on track to complete our integration activities on time We are a champion for our customers, Recent MOE Actions passionate about • Published new Purpose and Beliefs statement in February building stronger individuals, • Expanded CRM capabilities to branches and bankers businesses, and • Began piloting digital banking upgrades for legacy Chemical communities. • Launched consolidated commercial loan pricing model • 66% of vendor contracts have been renegotiated Beliefs • Migrated integration activities to work-from-home Take Upcoming Priorities Care like a initiative neighbor on all • Complete transition of Legacy Chemical customers onto TCF fronts digital banking platform (2Q20) • Complete Human Capital Management (HCM) system conversion (2Q/3Q20) • Core conversion to FIS IBS (3Q20) Strive for Win as a excellence team • Execution of cost synergy initiatives • Execution of business synergy initiatives 5

 
Balance Sheet Today Reflects Lower Risk Profile Due to Actions Completed and MOE Additional Credit Support Sale of Legacy TCF Auto Repositioned Securities Provided by Purchase Finance Portfolio & Portfolio Upon Closing of Accounting Mark Through Nonaccrual and TDR Sales MOE MOE $1.1B 96% $167M Legacy TCF auto finance Investment securities Total fair value discount on loans sold (4Q19) rated AA or AAA acquired loans as of 3/31/20 • Completed sale of $1.1B • Sold $1.6B of certain • Both TCF and Chemical Legacy TCF auto finance investment securities in completed comprehensive portfolio in 4Q19 3Q19, reducing interest rate credit due diligence during risk and enhancing capital 2H18 on each other's • Sold $80.5M of consumer efficiency and liquidity respective portfolios over the nonaccrual and TDR loans in course of approximately 6 4Q19 • Terminated $1.1B of interest months rate swaps in 3Q19, reducing asset sensitivity • Acquired loan balances from the MOE contain a total fair value discount of approximately $167M which is in addition to CECL on balance sheet reserves 6

 
Loan Growth Driven by Commercial Portfolio HFI Loans and Leases ($ billions) HFI Loan and Lease Growth Drivers ($ billions) Legacy TCF auto Loans and leases (ex. legacy TCF auto) $0.2 $35.9 $0.4 $— 8.8% YoY growth, excluding Legacy TCF Auto1 $0.8 $34.7 $33.5 $34.5 $35.9 $34.5 $1.7 $1.2B of commercial loan and lease growth $33.0 in 1Q20 1Q19 3Q19 4Q19 1Q20 4Q19 C&I CRE Lease Consumer 1Q20 financing TCF/Chemical Combined 2 YoY Change2 Mar. 31, 1Q20 Loan and Lease Highlights (Dollars in billions) 2020 $ % Commercial and industrial $ 12.3 $ 1.4 13.0% • $887M of C&I growth QoQ Commercial real estate 9.5 1.1 13.5 Lease financing 2.7 0.2 6.2 ◦ Inventory Finance +$578M / Traditional C&I + Total commercial 24.5 2.7 12.4 $242M / Capital Solutions +$67M Residential mortgage 6.4 0.5 8.6 Home equity 3.5 (0.3) (7.5) ◦ Seasonal peak of inventory finance in 1Q Consumer installment 1.5 — (0.8) • Revolving line draws not a material factor in loan and Legacy TCF auto finance — (1.7) (100) Total consumer 11.4 (1.5) (11.6) lease growth HFI loans and leases $ 35.9 $ 1.2 3.5 HFI loans and leases, ex. TCF auto finance3 $ 35.9 $ 2.9 8.8% 1 Total period-end loans and leases of $35.9B, up $1.2B or 3.5% YoY 2 Combined TCF and Chemical reported financials 7 3 Excludes the Legacy TCF auto finance portfolio at Mar. 31, 2019, which had a balance of $1.7B

 
Disciplined Deposit Pricing with Improved Mix 3 Deposit Growth ($ billions) Cost of Deposits Down 10 bps from 4Q19 YoY non-CD growth of 7.9%1 0.95% 0.94% $35.1 $35.3 $34.5 $35.8 0.90% 0.88% $8.8 $8.4 $7.5 $7.5 CDs Deposits (ex. CDs) 0.78% $26.3 $26.9 $27.0 $28.3 1Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 TCF/Chemical TCF/Chemical Stub 4 Combined2 Combined2 Period 1Q20 Deposit Highlights 1Q20 Deposit Highlights • Total deposit growth of $1.3B QoQ, driven by non-CD • Cost of CDs of 1.81%, down 16 bps from 4Q19 balances • Cost of deposits (ex. CDs) of 0.50%, down 7 bps from ◦ Non-CD balances up $1.3B, or 4.9% 4Q19 ◦ CD balances relatively flat • Short duration CD portfolio with 57% maturing over the next six months with an average rate of 1.84% 1 Total period-end deposits of $35.8B, up $713M or 2.0% YoY 2 Combined TCF and Chemical reported financials 3 Annualized 8 4 Stub period reflects Legacy TCF July 2019 plus New TCF August/September 2019

 
Net Interest Income and Net Interest Margin Impacted by Purchase Accounting Accretion 2 Net Interest Income ($ millions) Net Interest Margin Purchase accounting accretion (PAA) Purchase accounting accretion (PAA) Net interest income excluding PAA Net interest margin excluding PAA $409 $401 $371 4.14% $31 $25 3.89% $28 0.31% 3.76% 0.29% 0.23% $378 $376 3 3 3 $343 3.83% 3.60% 3.53% 3Q19 4Q19 1Q20 3Q19 4Q19 1Q20 1 Stub Period Stub Period1 1Q20 Net Interest Income and Net Interest Margin Highlights • Period-end earning assets of $44.4B, up 3.9% from December 31, 2019, provide a strong starting point going into 2Q20 • 4.64% earning asset yield, down 21 bps in 1Q20 from prior quarter • 0.94% cost of funds, down 9 bps in 1Q20 from prior quarter 1 Stub period reflects Legacy TCF July 2019 net interest income plus New TCF August/September 2019 net interest income 2 Annualized and presented on a fully tax-equivalent basis; see Appendix for "Non-GAAP Reconciliation" slides 9 3 Denotes a non-GAAP financial measure; see Appendix for "Non-GAAP Reconciliation" slides

 
Noninterest Income Seasonality Noninterest Income ($ millions) Noninterest Income Mix ($ millions) (1Q20) Notable items 4Q19 1Q20 Noninterest income $166 1 2 1 $148 $8 $145 $47 1 $129 $129 $8 2 $39 2 $34 $34 $35 $25 $158 $22 $21 $22 $137 $13 $13 $94 $6 $7 $6 $6 1Q19 2Q19 3Q19 4Q19 1Q20 Fees and Leasing Card and Net Gains Servicing Wealth Other Service ATM on Sales of Fees Management TCF/Chemical Stub Charges on Loans and Combined3 Period4 Deposits Leases Accounts 1Q20 Noninterest Income Highlights • 1Q20 notable items include an $8.2M loan servicing rights impairment (within other noninterest income) • 1Q20 also includes a $6.0M favorable interest rate swap mark-to-market adjustment (within other noninterest income) • 1Q20 is a seasonally low quarter for leasing fees, down $13.1M, or 28%, from 4Q19 due to elevated demand in 4Q • 1Q20 net gains on sales included net gains on sales of mortgage banking loans of $13.9M, compared to $9.8M in 4Q19 1 Denotes a non-GAAP financial measure; see Appendix for "Non-GAAP Reconciliation" slides 2 Noninterest income notable items reflected a loss of $7.6M and $8.2M in 4Q19 and 1Q20, respectively 10 3 Combined TCF and Chemical reported financials 4 Stub period reflects Legacy TCF July 2019 noninterest income plus NewTCF August/September 2019 noninterest income

 
Focus on Delivering on Cost Synergy Commitment Noninterest Expense ($ millions) Driving Toward Below Peer Median Efficiency Notable items Post-Cost Savings Merger-related expenses Adjusted Efficiency Ratio Target4: 2 Adjusted noninterest expense Below Peer Median in Normalized Operating Environment $417 $15 69.6% $375 $362 $47 $3 $15 $37 <$321 58.2% 56.5% 2 1Q20 1Q20 4Q19 Peer 2 2 $347 $355 $335 Adjusted 2 Median 3 1Q20 Noninterest Expense Highlights • 1Q20 includes $36.7M of merger-related expenses and a $3.1M notable item related to the impact of the sale of 1Q19 4Q19 1Q20 4Q20 Legacy TCF auto finance portfolio in 4Q19 TCF/Chemical NIE Target • 1Q20 also included a $1.5M impairment of federal historic Combined1 tax credits 1 Combined TCF and Chemical reported financials 2 Denotes a non-GAAP financial measure; see Appendix for "Non-GAAP Reconciliation" slides 3 Source: S&P Global Market Intelligence (peer data as of 4Q19; TCF data as of 1Q20) 4 Financial targets compared to TCF Peer Group which includes KEY, RF, MTB, FRC, HBAN, CMA, ZION, PBCT, CIT, SNV, EWBC, FHN, FCNC.A, FNB, ASB, BKU, VLY and IBKC. ROATCE and 11 adjusted efficiency ratio are non-GAAP financial measures. A reconciliation of the ROATCE and adjusted efficiency ratio targets to the most directly comparable GAAP measure is not provided because the Corporation is unable to provide such reconciliation without unreasonable effort, however, it is expected to be consistent with historical non-GAAP reconciliation included in the appendix.

 
Strong Capital Position in an Adverse Economic Environment Common Equity Tier 1 Ratio Capital Priorities 1 Maintain strong capital levels 10.8% 10.6% 10.4% 10.0% 10.1% 2 Support commercial and consumer clients 3 Pay a competitive dividend 1Q16 1 1Q17 1 1Q181 1Q19 1 1Q20 2 3 Be positioned to take advantage Tangible Book Value Per Common Share 4 of platform / portfolio opportunities Book value per common share Tangible book value per common share when environment improves $35.82 $36.20 $35.85 In response to the COVID-19 pandemic, TCF temporarily $26.18 $26.60 $26.16 suspended buybacks under its share repurchase program, but retains the ability to reinstate as circumstances warrant. TCF is well positioned with strong capital and liquidity and is committed to supporting our team members, customers, and communities. 1Q20 Share repurchased: 873K 1Q20 Repurchase cost: $33.1M 3Q19 4Q19 1Q20 1 Reflects Legacy TCF Common Equity Tier 1 Ratio 12 2 March 31, 2020 capital ratios reflect our election of the five-year CECL transition for regulatory capital purposes 3 Denotes a non-GAAP financial measure; see Appendix for "Non-GAAP Reconciliation" slides

 
Credit Performance Summary Net Charge-offs ($ millions) Nonaccrual Loans and Leases ($ millions) Net charge-offs Net charge-offs / average loans and leases1 Nonaccrual Loans / Loans $7 $250 $29 $73 $170 $16 0.39% 0.70% 0.18% $6 0.49% 2 $5 0.07% 0.06% 2Q19 3Q19 4Q19 1Q20 4Q19 CECL Other 1Q20 TCF/Chemical Adoption Nonaccrual 3 Combined Impact Change Over 90-Day Delinquencies4 0.09% 0.09% $73M of loans previously accounted for as purchased credit impaired (PCI) at 0.02% December 31, 2019 were reclassified to nonaccrual loans as of January 1, 2020 due to the adoption of CECL 3Q19 4Q19 1Q20 1 Annualized 2 Includes $4.7M recovery from consumer nonaccrual/TDR loan sale. Excluding the recovery, 4Q19 net charge-offs were $10.9M, NCO ratio was 0.13% and provision for credit losses was $19.1M (see Appendix for "Non-GAAP Reconciliation" slides) 3 Combined TCF and Chemical reported financials 13 4 Excludes nonaccrual loans and leases. Prior to the adoption of CECL as of January 1, 2020, purchased credit impaired loans were not classified as nonaccrual loans because they were recorded at their net realizable value based on the principal and interest expected to be collected on the loans.

 
ACL Driven by CECL and COVID-19 Impacts 1Q20 Allowance for Credit Loss Drivers ($ millions) $93 $406 ACL / Loans $206 $319 $(1) $(5) +$167M $71M of LLP Additional total fair value related to 1.13% COVID-19 2 discount from purchase $113 0.92% accounting on acquired loans at 1Q20 0.33% 1 2 4Q19 CECL Day 1 01/01/20 NCOs Provision Other 1Q20 Provision for Credit Losses ($ millions) 1Q20 Provision Drivers ($ millions) $974 $74M of Factor Amount provision $74 5 related to COVID-19 $ 74.1 5 $21 $27 COVID-19 Net charge-offs 5.5 $14 6 $23 Portfolio changes, net 17.3 Total $ 96.9 2Q19 3Q19 4Q19 1Q20 TCF/Chemical Combined 3 1 Assumes Day 1 CECL reserve applied to ACL and loan and lease balances as of December 31, 2019 2 Provision for credit losses related to loans and leases excludes the provision related to the unfunded commitment liability of $4M and other assets from the total provision for credit losses for the three months ended March 31, 2020. 3 Combined TCF and Chemical reported financials 4 As a result of the adoption of CECL, provision for credit losses also includes a provision for unfunded commitments of $4M 14 5 Includes $71M of impact to the provision for credit losses for loans and leases and $4M of impact to the provision for unfunded commitments 6 Includes loan growth, rate and mix changes

 
Well-diversified Loan and Lease Portfolio Selected Portfolio Areas of Focus Commercial & • $764M of hotel exposure (2.1% of portfolio) Consumer Industrial 32% 34% • No material oil and gas exposure (~0.25% of portfolio) • No aviation exposure to commercial airlines or cargo operators $36B • No rail exposure • No consumer credit card exposure Lease Financing CRE 8% 26% Commercial Real Estate Loan Mix Total CRE % of Total $M TCF Loans Multifamily 1,893 5.3 Office 1,356 3.8 Retail 1,260 3.5 $9B Warehouse 985 2.7 Hotel 764 2.1 Senior Housing 672 1.9 Mixed Use 484 1.3 Self Storage 480 1.3 Other 1,593 4.5 TOTAL 9,487 26.4% 15

 
C&I and Lease Financing Diversification C&I and Lease Financing by NAICS Code Inventory Finance (excluding Inventory Finance) by Sector Traditional C&I and Capital Solutions Traditional C&I Capital Solutions % of % of % of % of Trad. Total % of Total Total C&I and TCF Trad. TCF % of TCF $M Cap. Sol. Loans $M C&I Loans $M Cap. Sol. Loans Manufacturing $ 1,725 16% 4.8% $ 1,042 22% 2.9% $ 684 12% 1.9% Transportation and Warehouse 1,688 15% 4.7% 132 3% 0.4% 1,556 25% 4.3% $4B Real Estate Rental and Leasing 1,005 9% 2.8% 712 14% 2.0% 293 5% 0.8% Health Care and Social 977 9% 2.7% 305 6% 0.8% 672 11% 1.9% Assistance Construction 802 7% 2.2% 327 6% 0.9% 476 8% 1.3% Arts, Entertainment, and 701 6% 2.0% 121 2% 0.3% 580 10% 1.6% Recreation Wholesale Trade 647 6% 1.8% 511 10% 1.4% 136 2% 0.4% • Percent of Total TCF Loans: Finance and Insurance 540 5% 1.5% 478 9% 1.3% 62 1% 0.2% ◦ Powersports - 4.5% Other Services (excl. Public Administration) 509 5% 1.4% 105 2% 0.3% 404 7% 1.1% ◦ Lawn and Garden - 3.0% ◦ Marine - 1.6% Admin and Support and Waste 495 4% 1.4% 261 5% 0.7% 234 4% 0.7% Management and Remediation ◦ Spec. Vehicles - 1.0% Retail Trade 414 4% 1.2% 226 4% 0.6% 187 3% 0.5% ◦ RV - 0.9% Accommodation and Food Services 289 3% 0.8% 102 2% 0.3% 188 3% 0.5% • 84% of portfolio tied to exclusive manufacturer programs with All Other 1,269 11% 3.5% 725 15% 2.0% 542 9% 1.5% repurchase agreements TOTAL $ 11,061 100% 30.8% $ 5,047 100% 13.9% $ 6,014 100% 16.7% • Loans asset-secured and financed at wholesale cost vs. retail price • Averaged 12 bps of annual net charge-offs since 2009 16

 
Strategic Priorities Take Care of our Team Members Continue to prioritize the health and safety of our team members throughout the COVID-19 issue by supporting work-from-home opportunities and providing premium pay for those working in the office Serve our Customers Leverage our enhanced digital banking platform to provide a positive customer experience while also remaining flexible with our customers through various loan modification and SBA programs Execute & Complete Integration Program Integrate systems, branding and culture as One TCF and provide a consistent customer experience by the fourth quarter of 2020 Manage our Credit Risk Profile Leverage our scalable risk management framework to actively monitor and manage credit risk across the organization 1 1 Financial Targets Adj. ROATCE Adj. Efficiency Ratio (Post-Cost Savings in a Normalized Top Quartile Below Operating Environment) Compared to Peers Peer Median 1 Financial targets compared to TCF Peer Group which includes KEY, RF, MTB, FRC, HBAN, CMA, ZION, PBCT, CIT, SNV, EWBC, FHN, FCNC.A, FNB, ASB, BKU, VLY and IBKC. ROATCE and 17 adjusted efficiency ratio are non-GAAP financial measures. A reconciliation of the ROATCE and adjusted efficiency ratio targets to the most directly comparable GAAP measure is not provided because the Company is unable to provide such reconciliation without unreasonable effort, however, it is expected to be consistent with historical non-GAAP reconciliation included in the appendix.

 
Appendix

 
Completed Repositioning of Investment Securities Portfolio Investment Securities Balances ($ billions) Investment Securities Mix (1Q20) Yield2 Other $7.2 $6.9 $7.2 $0.6B $5.7 Obligations of states and political 8% subdivisions 12% 2.84% $0.9B 2.81% 2.73% 9% Agency $7B CMBS Agency $0.7B 71% MBS 2Q19 3Q19 4Q19 1Q20 $5.0B 15.3% 12.5% 14.7% 14.7% of total assets of total assets of total assets of total assets TCF/Chemical Combined1 1Q20 Investment Securities Highlights Investment Securities Portfolio Attributes (1Q20) • Completed reinvestment of $1.6B of investments securities sold in 3Q19 3.25 Years 96% • Purchased investment securities in 1Q20 with an average duration at AA and AAA rated tax-equivalent yield of 2.62%2, compared to the 4Q19 March 31, 2020 purchase yield of 2.71%2 and the weighted average yield of securities sold in 3Q19 of 2.43% 1 Combined TCF and Chemical reported financials 19 2 Annualized and presented on a fully tax-equivalent basis

 
Impact of 1Q20 Merger-related Expenses and Notable Items Merger- 1Q20 related 1Q20 1 (Dollars in thousands, except per share data) Reported Items Notable Items Adjusted Net interest income $ 401,481 $ — $ — $ 401,481 Provision for credit losses 96,943 — — 96,943 Noninterest income: — Other noninterest income 13,583 — (8,236) 2 21,819 All other noninterest income line items 123,380 — — 123,380 Total noninterest income 136,963 — (8,236) 145,199 Noninterest expense: Compensation and employee benefits 171,528 — (864) 3 170,664 Occupancy and equipment 57,288 — (1,629) 3 55,659 Merger-related expenses 36,728 (36,728) — — Other noninterest expense 88,746 — (570) 3 88,176 All other noninterest expense line items 20,309 — — 20,309 Total noninterest expense 374,599 (36,728) (3,063) 334,808 Income before income tax expense 66,902 (36,728) (11,299) 114,929 Income tax expense (benefit) 13,086 (7,702) (2,369) 4 23,157 Income after income tax expense 53,816 (29,026) (8,930) 91,772 Income attributable to non-controlling interest 1,917 — — 1,917 Net income attributable to TCF 51,899 (29,026) (8,930) 89,855 Preferred stock dividends 2,493 — — 2,493 Net income available to common shareholders $ 49,406 $ (29,026) $ (8,930) $ 87,362 Diluted earnings per share $ 0.32 $ (0.19) $ (0.06) $ 0.57 Average diluted common shares outstanding 152,114,017 — — 152,114,017 Return on average assets 0.46% 0.78% Return on average common equity 3.64% 6.43% Return on average tangible common equity1 5.42% 9.24% Efficiency ratio5 69.57% 58.24% 1 Denotes a non-GAAP financial measure; see Appendix for "Reconciliation of GAAP to Non-GAAP Financial Measures" slides 2 Includes loan servicing rights impairment 3 Includes expenses related to the Q4 2019 Legacy TCF auto finance portfolio sale 20 4 Includes income tax benefit based on TCF's normal tax rate on pretax notable items 5 Adjusted efficiency ratio also excludes lease financing equipment depreciation, other intangible amortization, impairment of federal historic tax credits and net interest income FTE adjustment.

 
Non-GAAP Reconciliation Computation of adjusted diluted earnings per common share: Quarter Ended Mar. 31, (Dollars in thousands, except per share data) 2020 Earnings allocated to common stock (a) $ 49,406 Merger-related expenses 36,728 Notable items: Sale of legacy TCF auto finance portfolio and related expenses1 3,063 Write-down of company-owned vacant land parcels and branch exit costs2 — Pension fair valuation adjustment2 — Loan servicing rights (recovery) impairment3 8,236 Total notable items 11,299 Related income tax expense, net of benefits4 (10,071) Total adjustments, net of tax 37,956 Adjusted earnings allocated to common stock (b) $ 87,362 Weighted-average common shares outstanding used in diluted earnings per common share calculation (c) 152,114,017 Diluted earnings per common share (a) / (c) $ 0.32 Adjusted diluted earnings per common share (b) / (c) 0.57 1 First quarter 2020 amount included within occupancy and equipment ($1.6 million), compensation and employee benefits ($0.9 million) and other noninterest expense ($0.6 million). 2 Included within Other noninterest expense 3 Included in Other noninterest income 4 Included within Income tax expense (benefit) 21

 
Non-GAAP Reconciliation Computation of FTE and adjusted net interest income and margin: Quarter Ended Mar. 31, Dec. 31, Sep. 30, (Dollars in thousands, except per share data) 2020 2019 2019 Net interest income $ 401,481 $ 408,753 $ 371,793 Adjustment for taxable equivalent interest1 2,983 2,896 2,488 Net interest income (FTE) 404,464 411,649 374,281 Purchase accounting accretion and amortization (25,258) (30,523) (28,411) Adjusted net interest income (FTE), excluding purchase accounting accretion and amortization $ 376,223 $ 378,230 $ 343,382 Net interest margin 3.73% 3.86% 4.12% Net interest margin (FTE) 3.76 3.89 4.14 Purchase accounting accretion and amortization (0.23) (0.29) (0.31) Adjusted net interest margin, excluding purchase accounting accretion and amortization (FTE) 3.53% 3.60% 3.83% 1 The yield on tax-exempt loans and investment securities available-for-sale is computed on a tax-equivalent basis using a statutory federal income tax rate of 21%. 22

 
Non-GAAP Reconciliation Computation of adjusted provision and net charge-offs: Quarter Ended Dec. 31, (Dollars in thousands) 2019 Provision $ 14,403 Provision benefit due to the consumer nonaccrual and TDR loan sale 4,694 Adjusted provision, excluding consumer nonaccrual and TDR loan sale $ 19,097 Net charge-offs (a) $ (6,237) Recovery related to the consumer nonaccrual and TDR loan sale (b) (4,694) Adjusted net charge-offs, excluding consumer nonaccrual and TDR loan sale (c) $ (10,931) Average loans and leases (d) $ 33,804,883 Net charge-off rate as a percentage of average loans and leases1 (a)/(d) 0.07% Impact of recovery to net charge-off ratio related to the consumer nonaccrual and TDR loan sale1 (b)/(d) 0.06 Adjusted net charge-off ratio, excluding consumer nonaccrual and TDR loan sale1 (c)/(d) 0.13% 23 1 Annualized

 
Non-GAAP Reconciliation Computation of adjusted return on average assets, common equity, average tangible common equity and average tangible common equity: Quarter Ended Mar. 31, (Dollars in thousands) 2020 Adjusted net income after tax expense: Income after tax expense (a) $ 53,816 Merger-related expenses 36,728 Notable items 11,299 Related income tax expense, net of tax benefits (10,071) Adjusted net income after tax expense for ROAA calculation (b) 91,772 Net income available to common shareholders (c) 49,406 Other intangibles amortization 5,480 Related income tax expense (1,149) Net income available to common shareholders used in ROATCE calculation (d) 53,737 Adjusted net income available to common shareholders: Net income available to common shareholders 49,406 Notable items 11,299 Merger-related expenses 36,728 Related income tax expense, net of tax benefits (10,071) Net income available to common shareholders used in adjusted ROAA and ROACE calculation (e) 87,362 Other intangibles amortization 5,480 Related income tax expense (1,149) Net income available to common shareholders used in adjusted ROATCE calculation (f) 91,693 Average balances: Average assets (g) 46,985,426 Total equity 5,630,487 Non-controlling interest in subsidiaries (25,328) Total TCF Financial Corporation shareholders' equity 5,605,159 Preferred stock (169,302) Average total common shareholders' equity used in ROACE calculation (h) 5,435,857 Goodwill, net (1,301,080) Other intangibles, net (166,298) Average tangible common shareholders' equity used in ROATCE calculation (i) $ 3,968,479 ROAA1 (a) / (g) 0.46% Adjusted ROAA1 (b) / (g) 0.78 ROACE1 (c) / (h) 3.64 Adjusted ROACE1 (e) / (h) 6.43 ROATCE1 (d) / (i) 5.42 Adjusted ROATCE1 (f) / (i) 9.24 24 1 Annualized.

 
Non-GAAP Reconciliation Computation of adjusted efficiency ratio, noninterest income and noninterest expense: Quarter Ended Mar. 31, Dec. 31, Sep. 30, (Dollars in thousands) 2020 2019 2019 Noninterest expense (a) $ 374,599 $ 416,571 $ 425,620 Merger-related expenses (36,728) (47,025) (111,259) Write-down of company-owned vacant land parcels and branch — (3,494) (5,890) exit costs Sale of Legacy TCF auto finance portfolio (3,063) (4,670) — Pension fair valuation adjustment — (6,341) — Adjusted noninterest expense 334,808 355,041 308,471 Lease financing equipment depreciation (18,450) (18,629) (19,408) Amortization of intangibles (5,480) (5,505) (4,544) Impairment of federal historic tax credits (1,521) (4,030) — Adjusted noninterest expense, efficiency ratio (b) 309,357 326,877 284,519 Net interest income $ 401,481 $ 408,753 $ 371,793 Noninterest income 136,963 158,052 94,258 Total revenue (c) $ 538,444 $ 566,805 $ 466,051 Noninterest income $ 136,963 $ 158,052 $ 94,258 Sale of Legacy TCF auto finance portfolio — 8,194 19,264 Termination of interest rate swaps — — 17,302 Gain on sales of certain investment securities — — (5,869) Loan servicing rights (recovery) impairment 8,236 (638) 4,520 Adjusted noninterest income 145,199 165,608 129,475 Net interest income 401,481 408,753 371,793 Net interest income FTE adjustment 2,983 2,896 2,488 Adjusted net interest income 404,464 411,649 374,281 Lease financing equipment depreciation (18,450) (18,629) (19,408) Adjusted total revenue, efficiency ratio (d) $ 531,213 $ 558,628 $ 484,348 Efficiency ratio (a) / (c) 69.57% 73.49% 91.32% Adjusted efficiency ratio (b) / (d) 58.24% 58.51% 58.74% 25

 
Non-GAAP Reconciliation Computation of tangible common equity to tangible assets and tangible book value per common share: Quarter Ended Mar. 31, Dec. 31, Sep. 30, (Dollars in thousands, except per share data) 2020 2019 2019 Total equity $ 5,655,833 $ 5,727,241 $ 5,693,417 Non-controlling interest in subsidiaries (30,149) (20,226) (23,313) Total TCF Financial Corporation shareholders' equity 5,625,684 5,707,015 5,670,104 Preferred stock (169,302) (169,302) (169,302) Total common shareholders' equity (a) 5,456,382 5,537,713 5,500,802 Goodwill, net (1,313,046) (1,299,878) (1,265,111) Other intangibles, net (162,887) (168,368) (215,910) Tangible common shareholders' equity (b) $ 3,980,449 $ 4,069,467 $ 4,019,781 Total assets (c) $ 48,594,383 $ 46,651,553 $ 45,692,511 Goodwill, net (1,313,046) (1,299,878) (1,265,111) Other intangibles, net (162,887) (168,368) (215,910) Tangible assets (d) $ 47,118,450 $ 45,183,307 $ 44,211,490 Common stock shares outstanding (e) 152,185,984 152,965,571 153,571,381 Common equity to assets (a) / (c) 11.23% 11.87% 12.04% Tangible common equity to tangible assets (b) / (d) 8.45 9.01 9.09 Book value per common share (a) / (e) $ 35.85 $ 36.20 $ 35.82 Tangible book value per common share (b) / (e) 26.16 26.60 26.18 26