Attached files
| file | filename |
|---|---|
| 8-K - 8-K - TCF FINANCIAL CORP | a11-4403_18k.htm |
Exhibit 99.1
TCF Financial Corporation
2010 Fourth Quarter Investor Presentation
Built on convenience, stability and trust.
1.) Corporate Profile
At December 31, 2010
· $18.5 billion national bank holding company headquartered in Minnesota
· 35th largest publicly traded U.S. based bank by asset size
· 442 bank branches in eight states, 70 branches opened since January 1, 2005
· 24th largest U.S. branch network
· Seven campus alliances; 5th largest in campus card banking relationships
· 968 ATMs free to TCF customers; 486 off-site
· 11th largest issuer of Visa® Classic debit cards
· 12th largest issuer of Visa Commercial debit cards
· 13th largest bank-affiliated leasing company in the U.S.
· Total equity to total assets of 8.02%
· Tangible realized common equity of 7.37% 1
· 63rd consecutive quarter of profitability
Branch Summary
|
Minnesota |
|
111 |
|
|
Illinois |
|
201 |
|
|
Michigan |
|
55 |
|
|
Colorado |
|
36 |
|
|
Wisconsin |
|
26 |
|
|
Arizona |
|
7 |
|
|
Indiana |
|
5 |
|
|
South Dakota |
|
1 |
|
|
Total |
|
442 |
|
Well-Diversified Loan Portfolio
($ millions)
|
|
|
12/31/99 |
|
% of Total |
|
12/31/10 |
|
% of Total |
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
Consumer Lending |
|
$ |
5,978 |
|
76 |
% |
$ |
7,195 |
|
49 |
% |
|
|
|
Commercial Lending |
|
1,425 |
|
18 |
|
3,646 |
|
25 |
|
|
| ||
|
Leasing |
|
493 |
|
6 |
|
3,155 |
|
21 |
|
|
| ||
|
Inventory Finance |
|
— |
|
— |
|
792 |
|
5 |
|
|
| ||
|
Total |
|
$ |
7,896 |
|
100 |
% |
$ |
14,788 |
|
100 |
% |
|
|
1 See “Reconciliation of GAAP to Non-GAAP Measures - Tangible Realized Common Equity” slide
2.) What Makes TCF Different
At December 31, 2010
· Convenience
TCF banks a large and diverse customer base by offering a host of convenient banking services:
· Traditional, supermarket and campus branches open seven days a week
· Free debit cards, free coin counting and 968 free ATMs
· TCF Free Online Banking
· TCF Mobile Banking introduced on January 4, 2011
· Credit Quality
· TCF is primarily a secured portfolio lender, emphasizing credit quality over asset growth
· Low-cost core deposit funding for national diverse lending platform
· Grew core deposits by $2.9 billion since December 31, 2008. As of December 31, 2010, core deposits carried an average rate of .37%
· Increased nationally-oriented specialty finance businesses by $406.6 million or 11.5%, in 2010
3.) What Makes TCF Different
· No deficient foreclosure procedures
· No teaser rate or subprime lending programs
· No option ARM loans
· No mortgage repurchase risk
· No low-doc/no-doc loans
· No Freddie Mac or Fannie Mae preferred stock
· No non-agency mortgage-backed securities
· No off-balance-sheet funding or securitizations
· No bank-owned life insurance
· No mortgage servicing rights
4.) Diversified Revenue Base
At December 31, 2010
Good Revenue Growth +7%*
($ millions)
|
|
|
12/06 |
|
12/07 |
|
12/08 |
|
12/09 |
|
12/10 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net Interest Income |
|
$ |
538 |
|
$ |
550 |
|
$ |
594 |
|
$ |
633 |
|
$ |
699 |
|
|
Non-interest Income |
|
489 |
|
542 |
|
498 |
|
526 |
|
538 |
| |||||
|
Total |
|
$ |
1,027 |
|
$ |
1,092 |
|
$ |
1,092 |
|
$ |
1,159 |
|
$ |
1,237 |
|
Strong Net Interest Margin
(Percent)
|
|
|
2006 |
|
2007 |
|
2008 |
|
2009 |
|
2010 |
|
|
TCF, 4.04% |
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter |
|
4.25 |
% |
4.00 |
% |
3.84 |
% |
3.66 |
% |
4.20 |
% |
|
Second Quarter |
|
4.22 |
|
4.02 |
|
4.00 |
|
3.80 |
|
4.18 |
|
|
Third Quarter |
|
4.11 |
|
3.90 |
|
3.97 |
|
3.92 |
|
4.12 |
|
|
Fourth Quarter |
|
4.07 |
|
3.83 |
|
3.84 |
|
4.07 |
|
4.04 |
|
KBW Regional Banking
Index Median, 3.78% 1
|
First Quarter |
|
3.79 |
% |
3.66 |
% |
3.61 |
% |
3.49 |
% |
3.71 |
% |
|
Second Quarter |
|
3.84 |
|
3.69 |
|
3.64 |
|
3.57 |
|
3.73 |
|
|
Third Quarter |
|
3.81 |
|
3.68 |
|
3.64 |
|
3.64 |
|
3.78 |
|
|
Fourth Quarter |
|
3.70 |
|
3.69 |
|
3.65 |
|
3.68 |
|
|
|
Strong Mix of Fee Revenues
($ millions)
|
|
|
12/10 |
|
% of Total |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Banking Fees and Service Charges |
|
$ |
273 |
|
53 |
% |
|
|
|
|
|
|
|
Card Revenue |
|
111 |
|
22 |
|
|
|
|
|
|
| |
|
Specialty Finance |
|
93 |
|
18 |
|
|
|
|
|
|
| |
|
ATM Revenue and Other |
|
32 |
|
7 |
|
|
|
|
|
|
| |
|
Total |
|
$ |
509 |
|
100 |
% |
|
|
|
|
|
|
1-Year Interest Rate GAP
|
|
|
At 12/31/09 |
|
At 12/31/10 |
|
|
|
|
|
|
|
|
Asset (Liability) Sensitive |
|
(6.6 |
)% |
2.8 |
% |
|
|
|
|
|
|
* Annual growth rate (‘10 vs. ‘09)
1 QTD September 30, 2010
5.) Capital Ratios - Holding Company
($ millions)
|
|
|
12/06 |
|
12/07 |
|
12/08 |
|
12/09 |
|
12/10 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total Tier 1 Common Capital |
|
$ |
914 |
|
$ |
964 |
|
$ |
999 |
|
$ |
1,042 |
|
$ |
1,352 |
|
|
Total Tier 1 Common Capital Ratio 1 |
|
8.65 |
% |
8.28 |
% |
8.05 |
% |
7.65 |
% |
9.71 |
% | |||||
At December 31, 2010
· Other Capital Ratios
· Total equity to total assets — 8.02%
· Tangible realized common equity — 7.37% 2
· Total tier 1 risk-based capital — 10.59%
· Total risk-based capital — 12.98%
· Tangible realized common equity has increased seven consecutive quarters
1 See “Reconciliation of GAAP to Non-GAAP Measures - Total Tier 1 Common Capital Ratio” slide
2 See “Reconciliation of GAAP to Non-GAAP Measures - Tangible Realized Common Equity” slide
6.) Strong Deposit Franchise
Quarterly Average Balances
($ millions)
|
|
|
12/06 |
|
12/07 |
|
12/08 |
|
12/09 |
|
12/10 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Checking |
|
$ |
4,141 |
|
$ |
3,981 |
|
$ |
3,914 |
|
$ |
4,116 |
|
$ |
4,359 |
|
|
Savings |
|
2,321 |
|
2,596 |
|
2,861 |
|
5,231 |
|
5,412 |
| |||||
|
Money Market |
|
594 |
|
598 |
|
625 |
|
672 |
|
644 |
| |||||
|
Certificates of Deposit (CDs) |
|
2,471 |
|
2,307 |
|
2,449 |
|
1,367 |
|
1,040 |
| |||||
|
Total |
|
$ |
9,527 |
|
$ |
9,482 |
|
$ |
9,849 |
|
$ |
11,386 |
|
$ |
11,455 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Average Rate 1: |
|
2.33 |
% |
2.29 |
% |
1.51 |
% |
.74 |
% |
.46 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
CDs as a % of total deposits: |
|
25.9 |
% |
24.3 |
% |
24.9 |
% |
12.0 |
% |
9.1 |
% | |||||
1 Quarter-to-date (annualized)
7.) Significant Liquidity & Borrowing Capacity
At December 31, 2010
· Asset Liquidity
· Balance at the Federal Reserve - $371.3 million
· Unemcumbered securities - $136 million
· Borrowing Capacity
· Federal Home Loan Bank of Des Moines - $1.7 billion
· Federal Reserve Discount Window - $529 million
8.) Non-Interest Expense
($ millions)
|
|
|
|
|
|
|
Change |
|
|
| |||||
|
|
|
2010 |
|
2009 |
|
$ |
|
% |
|
|
| |||
|
Compensation and employee benefits |
|
$ |
352.9 |
|
$ |
357.0 |
|
$ |
(4.1 |
) |
(1.2 |
)% |
|
|
|
Occupancy and equipment |
|
126.5 |
|
126.3 |
|
.2 |
|
.2 |
|
|
| |||
|
FDIC insurance |
|
23.6 |
|
19.1 |
|
4.5 |
|
23.4 |
|
|
| |||
|
Advertising and marketing |
|
13.0 |
|
17.1 |
|
(4.1 |
) |
(23.8 |
) |
|
| |||
|
Deposit account premiums |
|
17.3 |
|
30.7 |
|
(13.4 |
) |
(43.6 |
) |
|
| |||
|
Other |
|
146.3 |
|
142.8 |
|
3.5 |
|
2.4 |
|
|
| |||
|
Core operating expenses |
|
679.6 |
|
693.0 |
|
(13.4 |
) |
(1.9 |
) |
|
| |||
|
Foreclosed real estate and repossessed assets, net |
|
40.4 |
|
31.9 |
|
8.5 |
|
26.7 |
|
|
| |||
|
Operating lease depreciation |
|
37.1 |
|
22.4 |
|
14.7 |
|
65.9 |
|
|
| |||
|
Other credit costs, net |
|
6.0 |
|
12.1 |
|
(6.1 |
) |
(50.4 |
) |
|
| |||
|
FDIC assessment |
|
— |
|
8.4 |
|
(8.4 |
) |
(100.0 |
) |
|
| |||
|
Total non-interest expense |
|
$ |
763.1 |
|
$ |
767.8 |
|
$ |
(4.7 |
) |
(.6 |
)% |
|
|
9.) Banking Fees & Other Revenue 1
($ millions)
|
|
|
2006 |
|
2007 |
|
2008 |
|
2009 |
|
2010 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
First Quarter |
|
$ |
92 |
|
$ |
94 |
|
$ |
96 |
|
$ |
90 |
|
$ |
100 |
|
|
Second Quarter |
|
104 |
|
106 |
|
103 |
|
112 |
|
115 |
| |||||
|
Third Quarter |
|
105 |
|
107 |
|
107 |
|
111 |
|
103 |
| |||||
|
Fourth Quarter |
|
99 |
|
106 |
|
100 |
|
109 |
|
96 |
| |||||
|
Total |
|
$ |
400 |
|
$ |
413 |
|
$ |
406 |
|
$ |
422 |
|
$ |
414 |
|
1 Consisting of fees and service charges, card revenue and ATM revenue
10.) Card Revenue +6%*
($ millions)
|
|
|
2006 |
|
2007 |
|
2008 |
|
2009 |
|
2010 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
First Quarter |
|
$ |
21 |
|
$ |
23 |
|
$ |
25 |
|
$ |
25 |
|
$ |
27 |
|
|
Second Quarter |
|
23 |
|
25 |
|
27 |
|
27 |
|
29 |
| |||||
|
Third Quarter |
|
24 |
|
26 |
|
26 |
|
26 |
|
27 |
| |||||
|
Fourth Quarter |
|
24 |
|
25 |
|
25 |
|
27 |
|
28 |
| |||||
|
Total |
|
$ |
92 |
|
$ |
99 |
|
$ |
103 |
|
$ |
105 |
|
$ |
111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Sales Volume: |
|
$ |
6,465 |
|
$ |
6,949 |
|
$ |
7,280 |
|
$ |
7,308 |
|
$ |
7,630 |
|
|
Average Interchange Rate: |
|
1.36 |
% |
1.35 |
% |
1.34 |
% |
1.34 |
% |
1.38 |
% | |||||
At December 31, 2010
· 27% of total banking fees
· 11th largest issuer of Visa Classic debit cards
· 12th largest issuer of Visa Commercial debit cards
· $7.6 billion in sales volume, up 4.4%
· 22.2 transactions per month on active cards, up 7.3%
· Interchange fees paid by merchants
* Annual growth rate (‘10 vs. ‘09)
11.) Durbin Amendment Lawsuit
· On October 12, 2010, TCF filed a lawsuit challenging the constitutionality of the debit card interchange fee limitations of the Dodd-Frank Act (the Durbin Amendment)
· Amendment orders Federal Reserve to enact regulations that strictly limit the amount of interchange fees banks can charge retailers on debit card transactions
· TCF average interchange rate of 1.38% at December 31, 2010
· Federal Reserve announced proposed rates of 7 to 12 cents per transaction based only on incremental processing fees while specifically excluding other costs such as network costs
· Challenge of constitutionality:
· Due Process - price cap prevents TCF from earning a fair rate of return on its invested capital
· Equal Protection - only applies to banks with $10 billion or more in total assets; 99% of all U.S. banks and 48% of U.S. branches are exempt as of September 30, 2010
· Takings Clause - taking of TCF property without just compensation
12.) Stable Loan Growth +7%*
($ millions)
|
|
|
Diverse Products and Geographies |
|
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
12/06 |
|
12/07 |
|
12/08 |
|
12/09 |
|
12/10 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Consumer Lending |
|
$ |
6,717 |
|
$ |
7,274 |
|
$ |
7,364 |
|
$ |
7,332 |
|
$ |
7,195 |
| |
|
Commercial Lending |
|
2,943 |
|
3,116 |
|
3,491 |
|
3,719 |
|
3,646 |
| ||||||
|
Leasing and Equipment Finance |
|
1,818 |
|
2,104 |
|
2,486 |
|
3,071 |
|
3,155 |
| ||||||
|
Inventory Finance |
|
— |
|
— |
|
5 |
|
469 |
|
792 |
| ||||||
|
Total |
|
$ |
11,478 |
|
$ |
12,494 |
|
$ |
13,346 |
|
$ |
14,591 |
|
$ |
14,788 |
| |
* Five-year compound annual growth rate
13.) Leasing & Equipment Finance 1
($ millions)
|
|
|
Growth Opportunities Still Exist |
|
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
12/06 |
|
12/07 |
|
12/08 |
|
12/09 |
|
12/10 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Leasing and Equipment Finance |
|
$ |
1,899 |
|
$ |
2,175 |
|
$ |
2,545 |
|
$ |
3,177 |
|
$ |
3,232 |
| |
At December 31, 2010
· 13th largest bank-affiliated leasing company and 29th largest equipment finance/leasing company in the U.S.
· Diverse equipment types
· 20% specialty vehicles, 18% manufacturing, 14% medical, 11% construction
· 6.43% average yield
· Government stimulus of 100% year-one depreciation creates volume and spread opportunities
· Over 60-day delinquency rate .19% 2
· Non-accrual loans and leases have decreased three consecutive quarters
|
· Net charge-offs: |
|
2010 |
|
2009 |
|
2008 |
|
|
|
|
1.00% |
|
.97% |
|
.50% |
|
· Uninstalled backlog of $402.6 million
· Unguaranteed residuals of only $109.6 million, or 4.9% of leases
1 Includes operating leases ($77.4 million at December 31, 2010)
2 Excludes non-accrual loans and leases and acquired portfolios
14.) TCF Inventory Finance
($ millions)
|
|
|
Experienced and Seasoned |
|
|
|
|
|
|
| |||||||
|
|
|
Management |
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
12/09 |
|
3/10 |
|
6/10 |
|
9/10 |
|
12/10 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Electronics & Appliances |
|
$ |
122.3 |
|
$ |
119.6 |
|
$ |
122.4 |
|
$ |
120.1 |
|
$ |
130.2 |
|
|
Lawn & Garden |
|
346.5 |
|
580.8 |
|
521.8 |
|
462.9 |
|
441.7 |
| |||||
|
Power Sports & Other |
|
— |
|
— |
|
— |
|
212.6 |
|
220.5 |
| |||||
|
Total |
|
$ |
468.8 |
|
$ |
700.4 |
|
$ |
644.2 |
|
$ |
795.6 |
|
$ |
792.4 |
|
At December 31, 2010
· Inventory floorplan finance business with a focus on lawn and garden products, consumer electronics, household appliances and power sports
· Operates in the U.S. and Canada
· 235 employees
· 100% variable rate receivables
· Average yield 7.37%
|
· Net charge-offs: |
|
2010 |
|
2009 |
|
|
|
|
.17% |
|
.10% |
|
· Credit support from equipment manufacturers
· Credit risk spread across 8,670 active dealers
15.) Commercial Lending
($ millions)
|
|
|
Secured Lending Philosophy |
|
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
12/06 |
|
12/07 |
|
12/08 |
|
12/09 |
|
12/10 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Commercial Real Estate |
|
$ |
2,391 |
|
$ |
2,558 |
|
$ |
2,984 |
|
$ |
3,269 |
|
$ |
3,328 |
| |
|
Commercial Business |
|
552 |
|
558 |
|
507 |
|
450 |
|
318 |
| ||||||
|
Total |
|
$ |
2,943 |
|
$ |
3,116 |
|
$ |
3,491 |
|
$ |
3,719 |
|
$ |
3,646 |
| |
At December 31, 2010
· Commercial real estate — $3.3 billion
· 26% retail services
· 23% apartment loans
· 18% office buildings
· 14% industrial buildings
· 7% hotels and motels
· Commercial business — $318 million
· Commercial highlights
· 5.57% average yield
· 86% fixed rate, 14% variable rate
· Over 60-day delinquency rate .26% 1
|
· Net charge-offs: |
|
2010 |
|
2009 |
|
2008 |
|
|
|
|
1.31% |
|
1.24% |
|
.54% |
|
· Non-accrual loans decreased $19.6 million during 4Q10
· Approximately 99% of all commercial loans secured
· CRE location mix: 92% TCF banking markets, 8% other
· Michigan exposure is $752 million, down 8.8% from December 31, 2009
1 Excludes non-accrual loans
16.) Wholesale Banking1 Credit Quality
($ millions)
|
|
|
12/09 |
|
9/10 |
|
12/10 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Performing loans and leases: |
|
|
|
|
|
|
| |||
|
Non-classified |
|
$ |
6,716 |
|
$ |
6,979 |
|
$ |
6,950 |
|
|
Classified 2 |
|
363 |
|
418 |
|
396 |
| |||
|
Subtotal performing |
|
$ |
7,079 |
|
$ |
7,397 |
|
$ |
7,346 |
|
|
60+ days delinquent and accruing 3 |
|
23 |
|
11 |
|
20 |
| |||
|
Accruing TDRs 4 |
|
— |
|
5 |
|
49 |
| |||
|
Non-accrual loans and leases |
|
157 |
|
203 |
|
178 |
| |||
|
Subtotal underperforming |
|
$ |
180 |
|
$ |
219 |
|
$ |
247 |
|
|
Total loans and leases |
|
$ |
7,259 |
|
$ |
7,616 |
|
$ |
7,593 |
|
1 Includes commercial banking and specialty finance
2 Excludes classified loans and leases that are 60+ days delinquent or accruing TDRs
3 Excludes accruing TDRs that are 60+ days delinquent
4 No over 60-day delinquencies as of December 31, 2010
17.) Classified Wholesale Loans & Leases 1
($ millions)
|
|
|
12/09 |
|
3/10 |
|
6/10 |
|
9/10 |
|
12/10 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Classified Wholesale Loans and Leases |
|
$ |
370 |
|
$ |
435 |
|
$ |
439 |
|
$ |
429 |
|
$ |
454 |
|
At December 31, 2010
· By type
· Commercial real estate — $386 million
· Up 33.6% from December 31, 2009
· Commercial business — $22.3 million
· Down 47.5% from December 31, 2009
· Leasing and equipment finance — $39.8 million
· Up 2% from December 31, 2009
· Inventory finance — $5.7 million
· Over 60-day delinquency rate of 2.05%2, up from 1.94%2 at December 31, 2009
1 See “Source References & Footnotes” slide for a detailed description of classified wholesale loans and leases
2 As a percent of classified wholesale loans and leases
18.) Consumer Real Estate
($ millions)
|
|
|
12/06 |
|
12/07 |
|
12/08 |
|
12/09 |
|
12/10 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
First Mortgages |
|
$ |
4,409 |
|
$ |
4,707 |
|
$ |
4,882 |
|
$ |
4,962 |
|
$ |
4,894 |
|
|
Junior Liens |
|
2,101 |
|
2,344 |
|
2,420 |
|
2,319 |
|
2,262 |
| |||||
|
Total |
|
$ |
6,510 |
|
$ |
7,051 |
|
$ |
7,302 |
|
$ |
7,281 |
|
$ |
7,156 |
|
At December 31, 2010
· 74% first mortgage lien positions, average loan amount of $122,926
· 26% junior lien positions, average loan amount of $40,960
· 67% fixed-rate, 33% variable-rate
· Average home value of $255,296 1
· 5.95% average yield
· Over 60-day delinquency rate of 1.35% 2; down in consecutive quarters
|
· Net charge-offs: |
|
2010 |
|
2009 |
|
2008 |
|
|
|
|
1.80% |
|
1.46% |
|
.86% |
|
· Average FICO score of the retail lending operation:
At origination — 726
Updated 4Q10 — 725
· Michigan exposure is $1 billion
· $2 billion of loans originated since January 1, 2009 with 2010 net charge-offs of .03%
1 Based on value at origination
2 Excludes non-accrual loans
19.) Consumer Credit Quality
($ millions)
|
|
|
12/09 |
|
9/10 |
|
12/10 |
| |||
|
Performing loans |
|
$ |
6,863 |
|
$ |
6,713 |
|
$ |
6,613 |
|
|
60+ days delinquent and accruing 1 |
|
77 |
|
84 |
|
77 |
| |||
|
Accruing TDRs |
|
253 |
|
316 |
|
337 |
| |||
|
Non-accrual loans |
|
139 |
|
167 |
|
168 |
| |||
|
Subtotal underperforming |
|
469 |
|
567 |
|
582 |
| |||
|
Total loans |
|
$ |
7,332 |
|
$ |
7,280 |
|
$ |
7,195 |
|
|
% of total past due with a recent payment 2 |
|
14.5 |
% |
28.0 |
% |
28.0 |
% | |||
1 Excludes accruing TDRs that are 60+ days delinquent
2 Retail lending accruing loans over 30-days delinquent that made a payment during the last month of the period
20.) Consumer Real Estate TDRs
· Loans modified to assist customers with their financial hardship by lowering their monthly loan payments for up to 18 months
· At December 31, 2010, TCF held $337.4 million of modified consumer real estate loans that are considered TDRs and continue to accrue interest
· Reserved for based on present value of expected cash flows - $36.8 million, or 10.9% at December 31, 2010
· The over 60-day delinquency rate was 5.3% at December 31, 2010, down from 5.5% at September 30, 2010
· TCF’s current modification program started in August 2009 and represents 80.1% of the December 31, 2010 balance of accruing TDRs
21.) Loan & Lease Geographic Diversification
($000s)
|
|
|
|
|
Commercial |
|
|
|
|
|
|
| |||||
|
|
|
Consumer |
|
Real Estate |
|
Leasing and |
|
|
|
|
| |||||
|
|
|
Real Estate |
|
and Commercial |
|
Equipment |
|
Inventory |
|
|
| |||||
|
At December 31, 2010: |
|
and Other |
|
Business |
|
Finance |
|
Finance |
|
Total |
| |||||
|
Minnesota |
|
$ |
2,816,387 |
|
$ |
882,343 |
|
$ |
84,346 |
|
$ |
15,848 |
|
$ |
3,798,924 |
|
|
Illinois |
|
2,180,769 |
|
891,780 |
|
105,479 |
|
22,527 |
|
3,200,555 |
| |||||
|
Michigan |
|
1,038,430 |
|
752,337 |
|
114,830 |
|
24,026 |
|
1,929,623 |
| |||||
|
Wisconsin |
|
476,683 |
|
551,937 |
|
54,964 |
|
20,768 |
|
1,104,352 |
| |||||
|
Colorado |
|
571,446 |
|
139,552 |
|
44,985 |
|
6,701 |
|
762,684 |
| |||||
|
California |
|
2,651 |
|
18,102 |
|
400,813 |
|
17,274 |
|
438,840 |
| |||||
|
Texas |
|
1,795 |
|
2,765 |
|
251,376 |
|
43,782 |
|
299,718 |
| |||||
|
Florida |
|
3,682 |
|
62,729 |
|
181,229 |
|
34,994 |
|
282,634 |
| |||||
|
Ohio |
|
3,342 |
|
53,373 |
|
132,975 |
|
33,580 |
|
223,270 |
| |||||
|
Indiana |
|
24,089 |
|
104,682 |
|
62,310 |
|
21,302 |
|
212,383 |
| |||||
|
New York |
|
3,537 |
|
3,400 |
|
175,109 |
|
28,332 |
|
210,378 |
| |||||
|
Canada |
|
— |
|
— |
|
4,275 |
|
189,949 |
|
194,224 |
| |||||
|
Arizona |
|
54,115 |
|
35,770 |
|
68,634 |
|
7,616 |
|
166,135 |
| |||||
|
Other |
|
18,343 |
|
147,433 |
|
1,473,153 |
|
325,655 |
|
1,964,584 |
| |||||
|
Total |
|
$ |
7,195,269 |
|
$ |
3,646,203 |
|
$ |
3,154,478 |
|
$ |
792,354 |
|
$ |
14,788,304 |
|
22.) Allowance for Loan & Lease Losses
($ millions)
|
|
|
12/06 |
|
12/07 |
|
12/08 |
|
12/09 |
|
12/10 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Allowance for Loan & Lease Losses |
|
$ |
58.5 |
|
$ |
80.9 |
|
$ |
172.4 |
|
$ |
244.5 |
|
$ |
265.8 |
|
|
Net Charge-offs |
|
.16 |
% |
.29 |
% |
.78 |
% |
1.34 |
% |
1.47 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Allowance as a % of |
|
.51 |
% |
.65 |
% |
1.29 |
% |
1.68 |
% |
1.80 |
% | |||||
|
Ratio of allowance to net charge-offs: |
|
3.3 |
X |
2.3 |
X |
1.7 |
X |
1.3 |
X |
1.2 |
X | |||||
23.) Credit Trends
(Percent)
|
|
|
3/09 |
|
6/09 |
|
9/09 |
|
12/09 |
|
3/10 |
|
6/10 |
|
9/10 |
|
12/10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Accrual Loans and Leases |
|
1.49 |
% |
1.72 |
% |
1.88 |
% |
2.03 |
% |
2.08 |
% |
2.26 |
% |
2.48 |
% |
2.33 |
% |
|
Net Charge-offs 1 |
|
1.04 |
% |
1.43 |
% |
1.52 |
% |
1.35 |
% |
1.22 |
% |
1.30 |
% |
1.58 |
% |
1.75 |
% |
|
Over 60-day Delinquencies 2 |
|
.60 |
% |
.72 |
% |
.81 |
% |
.69 |
% |
.82 |
% |
.87 |
% |
.78 |
% |
.79 |
% |
1 Annualized
2 Excludes acquired portfolios
24.) Other Real Estate Owned
($ millions)
|
|
|
12/09 |
|
3/10 |
|
6/10 |
|
9/10 |
|
12/10 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Properties in Foreclosure |
|
$ |
20.6 |
|
$ |
20.7 |
|
$ |
28.4 |
|
$ |
28.1 |
|
$ |
27.2 |
| |
|
Properties Owned |
|
85.2 |
|
80.7 |
|
89.5 |
|
108.0 |
|
113.9 |
| ||||||
|
Total |
|
$ |
105.8 |
|
$ |
101.4 |
|
$ |
117.9 |
|
$ |
136.1 |
|
$ |
141.1 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Residential properties owned |
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Number: |
|
298 |
|
350 |
|
410 |
|
480 |
|
520 |
| ||||||
|
$ |
(millions) |
|
$ |
46.3 |
|
$ |
44.5 |
|
$ |
53.5 |
|
$ |
60.2 |
|
$ |
62.9 |
|
25). Net Charge-offs 1 vs. Other Banks
(Percent)
|
|
|
2006 |
|
2007 |
|
2008 |
|
2009 |
|
2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TCF |
|
.16 |
% |
.29 |
% |
.78 |
% |
1.34 |
% |
1.47 |
% |
|
Bank of America |
|
.68 |
|
.81 |
|
1.72 |
|
3.42 |
|
3.44 |
|
|
US Bancorp |
|
.38 |
|
.52 |
|
1.10 |
|
2.16 |
|
2.34 |
|
|
Wells Fargo |
|
.64 |
|
.93 |
|
1.84 |
|
2.10 |
|
2.19 |
|
|
JPMorgan Chase |
|
.67 |
|
.95 |
|
1.67 |
|
3.36 |
|
3.36 |
|
|
Fifth Third |
|
.43 |
|
.59 |
|
3.16 |
|
3.10 |
|
2.94 |
|
|
PNC |
|
.27 |
|
.31 |
|
.72 |
|
1.60 |
|
1.87 |
|
1 As a percent of average loans & leases
26.) Non-Accrual Loans & Leases
($ millions)
|
|
|
|
|
|
|
Leasing and |
|
|
|
|
| |||||
|
|
|
|
|
|
|
Equipment |
|
Inventory |
|
|
| |||||
|
|
|
Consumer |
|
Commercial |
|
Finance |
|
Finance |
|
Total |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Balance at December 31, 2009 |
|
$ |
139.3 |
|
$ |
106.2 |
|
$ |
50.0 |
|
$ |
.8 |
|
$ |
296.3 |
|
|
Additions |
|
245.7 |
|
137.6 |
|
56.0 |
|
6.3 |
|
445.6 |
1 | |||||
|
Charge-offs |
|
(57.2 |
) |
(45.8 |
) |
(27.9 |
) |
(.1 |
) |
(131.0 |
) | |||||
|
Transfers to other assets |
|
(98.5 |
) |
(33.1 |
) |
(15.3 |
) |
(.3 |
) |
(147.2 |
) | |||||
|
Return to accrual status |
|
(49.0 |
) |
— |
|
(4.4 |
) |
(4.1 |
) |
(57.5 |
) | |||||
|
Payments received |
|
(8.6 |
) |
(26.5 |
) |
(24.0 |
) |
(1.6 |
) |
(60.7 |
) | |||||
|
Other, net |
|
(4.2 |
) |
3.9 |
|
— |
|
.1 |
|
(.2 |
) | |||||
|
Balance at December 31, 2010 |
|
$ |
167.5 |
|
$ |
142.3 |
|
$ |
34.4 |
|
$ |
1.1 |
|
$ |
345.3 |
|
|
Net change |
|
$ |
28.2 |
|
$ |
36.1 |
|
$ |
(15.6 |
) |
$ |
.3 |
|
$ |
49.0 |
|
1 4Q10 additions of $92.2 million are down 36% from 3Q10 additions of $143.9 million
27.) Summary of Non-Accrual Loans
($ millions)
|
|
|
|
|
Charge-offs and |
|
|
|
|
| |||
|
|
|
Contractual |
|
Allowance |
|
Net |
|
|
| |||
|
At Dec. 31, 2010: |
|
Balance |
|
Recorded |
|
Exposure |
|
Impairment1 |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Consumer |
|
$ |
212.8 |
|
$ |
46.8 |
|
$ |
166.0 |
|
22.0% |
|
|
Commercial |
|
200.6 |
|
86.4 |
|
114.2 |
|
43.1 |
| |||
|
Leasing and equipment finance |
|
34.5 |
|
8.4 |
|
26.1 |
|
24.3 |
| |||
|
Inventory finance |
|
1.0 |
|
.2 |
|
.8 |
|
17.5 |
| |||
|
Total |
|
$ |
448.9 |
|
$ |
141.8 |
|
$ |
307.1 |
|
31.6 |
|
1 Represents the ratio of charge-offs and allowance recorded to the contractual loan balances prior to non-accrual status
28.) Summary of Real Estate Owned
($ millions)
|
|
|
Contractual Loan |
|
|
|
|
|
|
| |||
|
|
|
Balance Prior to |
|
Charge-offs and |
|
|
|
|
| |||
|
|
|
Non-performing |
|
Writedowns |
|
Other Real Estate |
|
|
| |||
|
At Dec. 31, 2010: |
|
Status |
|
Recorded |
|
Owned Balance |
|
Impairment1 |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Consumer |
|
$ |
134.5 |
|
$ |
44.4 |
|
$ |
90.1 |
|
33.0% |
|
|
Commercial |
|
69.5 |
|
18.5 |
|
51.0 |
|
26.6 |
| |||
|
Total |
|
$ |
204.0 |
|
$ |
62.9 |
|
$ |
141.1 |
|
30.8 |
|
1 Represents the ratio of charge-offs and writedowns recorded to the contractual loan balances prior to non-performing status
29.) Real Estate Owned
($ millions)
|
|
|
Consumer |
|
Commercial |
|
Total |
| |||
|
|
|
|
|
|
|
|
| |||
|
Balance at December 31, 2009 |
|
$ |
67.0 |
|
$ |
38.8 |
|
$ |
105.8 |
|
|
Transferred in |
|
121.6 |
|
29.5 |
|
151.1 |
| |||
|
Sales |
|
(88.4 |
) |
(10.6 |
) |
(99.0 |
) | |||
|
Writedowns |
|
(12.6 |
) |
(4.0 |
) |
(16.6 |
) | |||
|
Other, net |
|
2.5 |
|
(2.7 |
) |
(.2 |
) | |||
|
Balance at December 31, 2010 |
|
$ |
90.1 |
|
$ |
51.0 |
|
$ |
141.1 |
|
|
Net change |
|
$ |
23.1 |
|
$ |
12.2 |
|
$ |
35.3 |
|
30.) Well-Positioned for Future Success
· Experienced and tenured management team in all TCF markets to take advantage of the marketplace opportunities created by increased M&A activity
· “New” industry approach of portfolio lending funded with retail deposits has been a part of TCF’s business philosophy for many years
· Current management structure (Wholesale, Retail and Treasury & Support Services) improves execution, reduces overhead and increases our ability to quickly react to changes and new opportunities
· Strong wholesale banking management team positions us for profitable growth
· Core profitability is still very high when credit costs normalize
31.) Cautionary Statement
This presentation and other reports issued by the Company, including reports filed with the SEC, may contain “forward-looking” statements that deal with future results, plans or performance. In addition, TCF’s management may make such statements orally to the media, or to securities analysts, investors or others. Forward-looking statements deal with matters that do not relate strictly to historical facts. TCF’s future results may differ materially from historical performance and forward-looking statements about TCF’s expected financial results or other plans and are subject to a number of risks and uncertainties. These include, but are not limited to the following:
* Adverse Economic or Business Conditions, Credit and Other Risks. Continued or deepening deterioration in general economic and banking industry conditions, or continued increases in unemployment in TCF’s primary banking markets; adverse economic, business and competitive developments such as shrinking interest margins, deposit outflows, deposit account attrition, or an inability to increase the number of deposit accounts; adverse changes in credit and other risks posed by TCF’s loan, lease, investment, and securities available for sale portfolios, including continuing declines in commercial or residential real estate values or changes in the allowance for loan and lease losses dictated by new market conditions or regulatory requirements; interest rate risks resulting from fluctuations in prevailing interest rates or other factors that result in a mismatch between yields earned on TCF’s interest-earning assets and the rates paid on its deposits and borrowings; foreign currency exchange risks.
* Earnings/Capital Constraints, Liquidity Risks. Limitations on TCF’s ability to pay dividends or to increase dividends in the future because of financial performance deterioration, regulatory restrictions or limitations; increased deposit insurance premiums, special assessments or other costs related to adverse conditions in the banking industry, the economic impact on banks of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Act”) and Emergency Economic Stabilization Act of 2008, as amended (“EESA”), and other regulatory reform legislation; the impact of financial regulatory reform, including the phase out of trust preferred securities in tier 1 capital called for by the Act, or additional capital, leverage, liquidity and risk management requirements or changes in the composition of qualifying regulatory capital; adverse changes in securities markets directly or indirectly affecting TCF’s ability to sell assets or to fund its operations; diminished unsecured borrowing capacity resulting from TCF credit rating downgrades and unfavorable conditions in the credit markets that restrict or limit various funding sources; costs associated with new regulatory requirements or interpretive guidance relating to liquidity.
* Legislative and Regulatory Requirements. New consumer protection and supervisory requirements, including the Act’s creation of a new consumer protection bureau and limits on Federal preemption for state laws that could be applied to national banks; the imposition of requirements with an adverse impact relating to TCF’s lending, loan collection and other business activities as a result of the EESA and the Act, or other legislative or regulatory developments such as mortgage foreclosure moratorium laws or imposition of underwriting or other limitations that impact the ability to use certain variable-rate products; reduction of interchange revenue from debit card transactions resulting from the so-called Durbin Amendment to the Act, which limits debit card interchange fees to amounts that will only allow issuers to recover incremental costs of authorization, clearance and settlement of debit card transactions, (continued)
32.) Cautionary Statement (continued)
plus possibly some costs relating to fraud prevention; impact of legislative, regulatory or other changes affecting customer account charges and fee income; changes to bankruptcy laws which would result in the loss of all or part of TCF’s security interest due to collateral value declines (so-called “cramdown” provisions); any material failure of TCF to comply with the terms of its consent order with the Office of the Comptroller of the Currency relating to TCF’s Bank Secrecy Act compliance, which may result in regulatory enforcement action including monetary penalties; increased health care costs resulting from recently enacted Federal health care reform legislation; adverse regulatory examinations and resulting enforcement actions or other adverse consequences such as increased capital requirements or higher deposit insurance assessments; heightened regulatory practices, requirements or expectations, including, but not limited to, requirements related to the Bank Secrecy Act and anti-money laundering compliance activity.
* Risks Relating to New Product Introduction. TCF has introduced a new anchor retail deposit account product that replaces TCF Totally Free Checking, and that calls for a monthly maintenance fee on accounts not meeting certain specific requirements. TCF has also implemented new regulatory requirements that prohibit financial institutions from charging NSF fees on point-of-sale and ATM transactions unless customers opt-in. Customer acceptance of the new product changes and regulatory requirements cannot be predicted with certainty, and these changes may have an adverse impact on TCF’s ability to generate and retain accounts and on its fee revenue.
* Litigation Risks. Results of litigation, including class action litigation concerning TCF’s lending or deposit activities including account servicing processes or fees or charges, or employment practices, and possible increases in indemnification obligations for certain litigation against Visa U.S.A. (“covered litigation”) and potential reductions in card revenues resulting from covered litigation or other litigation against Visa.
* Competitive Conditions; Supermarket Branching Risk. Reduced demand for financial services and loan and lease products; adverse developments affecting TCF’s supermarket banking relationships or any of the supermarket chains in which TCF maintains supermarket branches.
* Accounting, Audit, Tax and Insurance Matters. Changes in accounting standards or interpretations of existing standards; federal or state monetary, fiscal or tax policies, including adoption of state legislation that would increase state taxes; adverse state or Federal tax assessments or findings in tax audits; lack of or inadequate insurance coverage for claims against TCF.
* Technological and Operational Matters. Technological, computer-related or operational difficulties or loss or theft of information and the possibility that deposit account losses (fraudulent checks, etc.) may increase.
Investors should consult TCF’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K for additional important information about the Company.
33.) Reconciliation of GAAP to Non-GAAP Measures - Tangible Realized Common Equity1
($000s)
|
|
|
December 31, 2010 | ||
|
Computation of total equity to total assets: |
|
|
| |
|
Total equity |
|
$ |
1,480,163 |
|
|
Total assets |
|
$ |
18,465,025 |
|
|
Total equity to total assets |
|
8.02 |
% | |
|
|
|
|
| |
|
Computation of tangible realized common equity to tangible assets: |
|
|
| |
|
Total equity |
|
$ |
1,480,163 |
|
|
Less: Non-controlling interest in subsidiaries |
|
8,500 |
| |
|
Total TCF stockholders’ equity |
|
1,471,663 |
| |
|
Less: |
|
|
| |
|
Goodwill |
|
152,599 |
| |
|
Other intangibles |
|
1,232 |
| |
|
Add: |
|
|
| |
|
Accumulated other comprehensive income |
|
31,514 |
| |
|
Tangible realized common equity |
|
$ |
1,349,346 |
|
|
|
|
|
| |
|
Total assets |
|
$ |
18,465,025 |
|
|
Less: |
|
|
| |
|
Goodwill |
|
152,599 |
| |
|
Other intangibles |
|
1,232 |
| |
|
Tangible assets |
|
$ |
18,311,194 |
|
|
|
|
|
| |
|
Tangible realized common equity to tangible assets |
|
7.37 |
% | |
1 In contrast to GAAP-basis measures, tangible realized common equity excludes the effect of goodwill, other intangibles and accumulated other comprehensive income (loss). Management reviews tangible realized common equity as an ongoing measure and has included this information because of current interest in the industry. The methodology for calculating tangible realized common equity may vary between companies.
34.) Reconciliation of GAAP to Non-GAAP Measures - Total Tier 1 Common Capital Ratio1
($000s)
|
|
|
Dec. 31, 2006 |
|
Dec. 31, 2007 |
|
Dec. 31, 2008 |
|
Dec. 31, 2009 |
|
Dec. 31, 2010 |
| ||||||||||
|
Total Tier 1 risk-based capital ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total tier 1 capital |
|
$ |
914,128 |
|
|
$ |
964,467 |
|
|
$ |
1,461,973 |
|
|
$ |
1,161,750 |
|
|
$ |
1,475,525 |
|
|
|
Total risk-weighted assets |
|
$ |
10,566,936 |
|
|
$ |
11,648,286 |
|
|
$ |
12,401,467 |
|
|
$ |
13,627,871 |
|
|
$ |
13,929,097 |
|
|
|
Total tier 1 risk-based capital ratio |
|
8.65 |
% |
|
8.28 |
% |
|
11.79 |
% |
|
8.52 |
% |
|
10.59 |
% |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Computation of tier 1 common capital ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total tier 1 capital |
|
$ |
914,128 |
|
|
$ |
964,467 |
|
|
$ |
1,461,973 |
|
|
$ |
1,161,750 |
|
|
$ |
1,475,525 |
|
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Qualifying trust preferred securities |
|
— |
|
|
— |
|
|
115,000 |
|
|
115,000 |
|
|
115,000 |
|
| |||||
|
Qualifying non-controlling interest in subsidiaries |
|
— |
|
|
— |
|
|
— |
|
|
4,393 |
|
|
8,500 |
|
| |||||
|
Preferred stock |
|
— |
|
|
— |
|
|
348,437 |
|
|
— |
|
|
— |
|
| |||||
|
Total tier 1 common capital |
|
$ |
914,128 |
|
|
$ |
964,467 |
|
|
$ |
998,536 |
|
|
$ |
1,042,357 |
|
|
$ |
1,352,025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total risk-weighted assets |
|
$ |
10,566,936 |
|
|
$ |
11,648,286 |
|
|
$ |
12,401,467 |
|
|
$ |
13,627,871 |
|
|
$ |
13,929,097 |
|
|
|
Total tier 1 common capital ratio |
|
8.65 |
% |
|
8.28 |
% |
|
8.05 |
% |
|
7.65 |
% |
|
9.71 |
% |
| |||||
1 In contrast to GAAP-basis measures, the total tier 1 common capital ratio excludes the effect of qualifying trust preferred securities and qualifying non-controlling interest in subsidiaries. Management reviews the total tier 1 common capital ratio as an ongoing measure and has included this information because of current interest in the industry. The methodology for calculating total tier 1 common capital may vary between companies.
35.) Source References & Footnotes
Slide: Corporate Profile
35th largest U.S. bank - SNL; 9/30/10
24th largest branch network - SNL Financial, LC; 4Q10
5th largest in campus card relationships - CR80News; Spring 2010
11th largest issuer of Visa Classic - Visa; 3Q10; ranked by sales volume
12th largest issuer of Visa Commercial - Visa; 3Q10; ranked by sales volume
13th largest bank affiliated leasing company - The Monitor; 2010 Monitor 100
Slide: Diversified Revenue Base
KBW Regional Banking Index net interest margin data - KBW & SNL Financial LC; 9/30/10
Slide: Card Revenue
11th largest issuer of Visa Classic - Visa; 3Q10; ranked by sales volume
12th largest issuer of Visa Commercial - Visa; 3Q10; ranked by sales volume
Slide: Durbin Amendment Lawsuit
99% of all banks and 48% of branches are exempt - SNL Financial, LC; 9/30/2010
Slide: Leasing and Equipment Finance
13th largest bank-affiliated leasing company - The Monitor; 2010 Monitor Bank 40
29th largest equipment finance/leasing company - The Monitor; 2010 Monitor 100
Slide: Classified Wholesale Loans & Leases
Classified wholesale loans and leases excludes non-accrual loans and leases, over 90-day delinquent loans and leases, real estate owned, and repossessed assets and includes commercial loans and leases primarily classified for regulatory purposes as substandard and reflect the distinct possibility, but not probability, that they will become non-performing or that TCF will not be able to collect all amounts due according to the contractual terms of the loan or lease agreement
Slide: Net Charge-offs vs. Other Banks
Net charge-off data - SNL Financial LC; 12/31/10