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

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EX-99.2 - EXHIBIT 99.2 - TCF FINANCIAL CORP	a2q16earningspresentatio.htm
8-K - 8-K - TCF FINANCIAL CORP	tcf63016form8-kearningsrel.htm

Exhibit 99.1

NEWS RELEASE

TCF Financial Corporation • 200 Lake Street East • Wayzata MN 55391

FOR IMMEDIATE RELEASE

Contact:

Mark Goldman (952) 475-7050 news@tcfbank.com (Media)

Jason Korstange (952) 745-2755 investor@tcfbank.com (Investors)

TCF REPORTS QUARTERLY NET INCOME OF $57.7 MILLION, OR 31 CENTS PER SHARE

SECOND QUARTER HIGHLIGHTS

- Revenue of $330.9 million, up 3.6 percent from the second quarter of 2015

- Non-interest expense of $227.3 million, up 1.9 percent from the second quarter of 2015

- Efficiency ratio of 68.7 percent, down 115 basis points from the second quarter of 2015

- Period-end loans and leases of $17.5 billion, up 3.5 percent from June 30, 2015

- Loan and lease originations of $4.3 billion, up 8.4 percent from the second quarter of 2015

- Average deposits of $17.3 billion, up 9.0 percent from the second quarter of 2015

- Non-accrual loans and leases of $195.5 million, down 4.9 percent from June 30, 2015

- Net charge-offs as a percentage of average loans and leases of 0.23 percent, down 18 basis points from the second quarter of 2015

- Earnings per share of 31 cents, up 6.9 percent from the second quarter of 2015



Summary of Financial Results																				Table 1
										Percent Change
(Dollars in thousands, except per-share data)	2Q			1Q			2Q			2Q16 vs		2Q16 vs		YTD			YTD			Percent
	2016			2016			2015			1Q16		2Q15		2016			2015			Change
Net income attributable to TCF	$	57,694		$	48,046		$	52,255		20.1	%	10.4	%	$	105,740		$	92,056		14.9	%
Net interest income	212,984			211,658			206,029			0.6		3.4		424,642			409,449			3.7
Diluted earnings per common share	0.31			0.26			0.29			19.2		6.9		0.57			0.50			14.0

Financial Ratios⁽¹⁾
Pre-tax pre-provision return on average assets⁽²⁾	1.95		%	1.83		%	1.94		%					1.89		%	1.76		%
Return on average assets	1.14			0.96			1.11							1.05			0.98
Return on average common equity	10.09			8.45			9.93							9.28			8.71
Return on average tangible common equity⁽³⁾	11.38			9.57			11.34							10.49			9.98
Net interest margin	4.35			4.37			4.44							4.36			4.47
Net charge-offs as a percentage of average loans and leases	0.23			0.27			0.41							0.25			0.34

(1) Annualized.
(2) Pre-tax pre-provision profit is calculated as total revenues less non-interest expense.
(3) See "Reconciliation of GAAP to Non-GAAP Financial Measures" table.

WAYZATA, Minn. (July 22, 2016) - TCF Financial Corporation ("TCF" or the "Company") (NYSE: TCB) today reported net income of $57.7 million for the second quarter of 2016, compared with net income of $52.3 million for the second quarter of 2015, and net income of $48.0 million for the first quarter of 2016. Diluted earnings per common share was 31 cents for the second quarter of 2016, compared with 29 cents for the second quarter of 2015, and 26 cents for the first quarter of 2016.

TCF reported net income of $105.7 million for the first six months of 2016, compared with net income of $92.1 million for the same period in 2015. Diluted earnings per common share was 57 cents for the first six months of 2016, compared with 50 cents for the same period in 2015.

"TCF had a strong second quarter as year-over-year revenue growth continued to outpace expense growth," said Craig R. Dahl, president and chief executive officer. "Operating leverage, one of TCF’s four strategic pillars, remained in focus during the quarter as we generated strong non-interest income from our national lending businesses while continuing to manage our overall expense base. Despite the ongoing headwinds from the rate environment, we managed to sustain our loan yields and manage our deposit costs during the quarter. Our diversification strategy continues to drive good outcomes with strong loan and lease originations taking place while maintaining stable credit quality across all business units.

"Our business results indicate true progress against our four strategic pillars: diversification, profitable growth, operating leverage and core funding. As we move to the second half of 2016 and beyond, the team at TCF is focused on improving the experience of our customer and accelerating value creation for our shareholders."



Revenue

Total Revenue																				Table 2
										Percent Change
(Dollars in thousands)	2Q			1Q			2Q			2Q16 vs		2Q16 vs		YTD			YTD				Percent
	2016			2016			2015			1Q16		2Q15		2016			2015				Change
Net interest income	$	212,984		$	211,658		$	206,029		0.6	%	3.4	%	$	424,642		$	409,449			3.7	%
Non-interest income:
Fees and service charges	34,622			32,817			36,295			5.5		(4.6	)	67,439			70,267				(4.0	)
Card revenue	14,083			13,363			13,902			5.4		1.3		27,446			26,803				2.4
ATM revenue	5,288			5,021			5,540			5.3		(4.5	)	10,309			10,662				(3.3	)
Subtotal	53,993			51,201			55,737			5.5		(3.1	)	105,194			107,732				(2.4	)
Gains on sales of auto loans, net	10,143			11,920			10,756			(14.9	)	(5.7	)	22,063			17,021				29.6
Gains on sales of consumer real estate loans, net	10,839			9,384			11,954			15.5		(9.3	)	20,223			20,717				(2.4	)
Servicing fee income	9,502			8,883			7,216			7.0		31.7		18,385			14,558				26.3
Subtotal	30,484			30,187			29,926			1.0		1.9		60,671			52,296				16.0
Leasing and equipment finance	31,074			28,487			26,385			9.1		17.8		59,561			48,609				22.5
Other	2,405			2,843			1,460			(15.4	)	64.7		5,248			5,587				(6.1	)
Fees and other revenue	117,956			112,718			113,508			4.6		3.9		230,674			214,224				7.7
Gains (losses) on securities, net	—			(116		)	(59		)	(100.0	)	(100.0	)	(116		)	(137		)		15.3
Total non-interest income	117,956			112,602			113,449			4.8		4.0		230,558			214,087				7.7
Total revenue	$	330,940		$	324,260		$	319,478		2.1		3.6		$	655,200		$	623,536			5.1

Net interest margin⁽¹⁾	4.35		%	4.37		%	4.44		%					4.36		%	4.47		%
Total non-interest income as a percentage of total revenue	35.6			34.7			35.5							35.2			34.3

(1) Annualized.

Net Interest Income

•

Net interest income for the second quarter of 2016 increased $7.0 million, or 3.4 percent, compared with the second quarter of 2015. The increase was primarily due to higher average loan and lease balances in the auto finance and inventory finance portfolios and higher average balances of securities available for sale and loans and leases held for sale. The increase was partially offset by the run-off of consumer real estate first mortgage lien loan balances, overall net margin compression and higher promotional rates paid on certificates of deposit.

•

Net interest income for the second quarter of 2016 increased $1.3 million, or 0.6 percent, compared with the first quarter of 2016. The increase was primarily due to higher average loan balances in the inventory finance portfolio driven by peak seasonality balances during the first two months of the second quarter of 2016 and higher average balances of loans and leases held for sale, securities available for sale from growth of the municipal securities portfolio and loans in the auto finance portfolio due to maturation of the business model. The increase was partially offset by lower average consumer real estate loan balances due to the run-off of consumer real estate first mortgage lien loan balances and a net decrease in consumer real estate junior lien loan balances.

•

Net interest margin for the second quarter of 2016 was 4.35 percent, compared with 4.44 percent for the second quarter of 2015 and 4.37 percent for the first quarter of 2016. The decrease compared with the second quarter of 2015 was primarily due to higher rates paid on certificates of deposit and margin compression resulting from the impact of the ongoing low interest rate environment. The decrease compared with the first quarter of 2016 was primarily due to the run-off of consumer real estate first mortgage lien loan balances and higher rates paid on certificates of deposit.

Non-interest Income

•

Fees and service charges in the second quarter of 2016 were $34.6 million, down $1.7 million, or 4.6 percent, from the second quarter of 2015 and up $1.8 million, or 5.5 percent, from the first quarter of 2016. The decrease compared with the second quarter of 2015 was primarily due to ongoing consumer behavior changes, as well as higher average checking account balances per customer. The increase compared with the first quarter of 2016 was primarily due to seasonality resulting in an increase in transaction activity.


•	TCF sold $533.4 million, $436.4 million and $444.3 million of auto loans during the second quarters of 2016 and 2015, and the first quarter of 2016, respectively, resulting in net gains in each period.

•

TCF sold $344.6 million, $364.9 million and $321.4 million of consumer real estate loans during the second quarters of 2016 and 2015, and the first quarter of 2016, respectively, resulting in net gains in each period. TCF has two consumer real estate loan sale programs; one that sells nationally originated junior lien loans and the other that originates first mortgage lien loans in our primary banking markets and sells the loans through a correspondent relationship.

•

Servicing fee income was $9.5 million on $4.7 billion of average loans and leases serviced for others during the second quarter of 2016, compared with $7.2 million on $3.7 billion for the second quarter of 2015 and $8.9 million on $4.4 billion for the first quarter of 2016. The increases from both periods were primarily due to the cumulative effect of the increase in the portfolio of auto and consumer real estate loans sold with servicing retained by TCF.



Loans and Leases

Period-End and Average Loans and Leases															Table 3
							Percent Change
(Dollars in thousands)	2Q		1Q		2Q		2Q16 vs		2Q16 vs		YTD		YTD		Percent
	2016		2016		2015		1Q16		2Q15		2016		2015		Change
Period-End:
Consumer real estate:
First mortgage lien	$	2,409,320	$	2,521,492	$	2,865,911	(4.4	)%	(15.9	)%
Junior lien	2,677,522		2,729,075		2,678,118		(1.9	)	—
Total consumer real estate	5,086,842		5,250,567		5,544,029		(3.1	)	(8.2	)
Commercial	3,096,046		3,114,594		3,112,344		(0.6	)	(0.5	)
Leasing and equipment finance	4,120,359		4,005,934		3,791,215		2.9		8.7
Inventory finance	2,334,893		2,676,675		2,106,087		(12.8	)	10.9
Auto finance	2,812,807		2,786,731		2,301,714		0.9		22.2
Other	20,890		18,940		21,852		10.3		(4.4	)
Total	$	17,471,837	$	17,853,441	$	16,877,241	(2.1	)	3.5

Average:
Consumer real estate:
First mortgage lien	$	2,464,692	$	2,573,915	$	2,936,793	(4.2	)%	(16.1	)%	$	2,519,303	$	3,006,411	(16.2	)%
Junior lien	2,794,035		2,884,859		2,650,894		(3.1	)	5.4		2,839,448		2,632,816		7.8
Total consumer real estate	5,258,727		5,458,774		5,587,687		(3.7	)	(5.9	)	5,358,751		5,639,227		(5.0	)
Commercial	3,109,946		3,158,101		3,148,272		(1.5	)	(1.2	)	3,134,023		3,151,124		(0.5	)
Leasing and equipment finance	4,032,112		3,992,678		3,751,776		1.0		7.5		4,012,395		3,740,691		7.3
Inventory finance	2,564,648		2,433,534		2,292,481		5.4		11.9		2,499,091		2,201,183		13.5
Auto finance	2,751,679		2,703,880		2,211,014		1.8		24.5		2,727,779		2,116,604		28.9
Other	9,585		10,018		10,734		(4.3	)	(10.7	)	9,802		11,173		(12.3	)
Total	$	17,726,697	$	17,756,985	$	17,001,964	(0.2	)	4.3		$	17,741,841	$	16,860,002	5.2

•

Period-end loans and leases were $17.5 billion at June 30, 2016, an increase of $0.6 billion, or 3.5 percent, compared with June 30, 2015 and a decrease of $0.4 billion, or 2.1 percent, compared with March 31, 2016. Average loans and leases were $17.7 billion for the second quarter of 2016, an increase of $0.7 billion, or 4.3 percent, compared with the second quarter of 2015 and consistent with the first quarter of 2016.

The increases from June 30, 2015 were primarily due to the maturation of the business model in auto finance and an increase in the leasing and equipment finance portfolio due to strong originations, as well as expansion of the lawn and garden segment of inventory finance, partially offset by run-off in the consumer real estate first mortgage lien portfolio. The decrease from March 31, 2016 for period-end loans and leases was primarily due to seasonal decreases in the inventory finance portfolio and run-off in the consumer real estate first mortgage lien portfolio, partially offset by an increase in the leasing and equipment finance portfolio due to strong originations.

•

Loan and lease originations were $4.3 billion for the second quarter of 2016, an increase of $0.3 billion, or 8.4 percent, compared with the second quarter of 2015 and an increase of $0.2 billion, or 6.1 percent, compared with the first quarter of 2016. The increase from the second quarter of 2015 was primarily due to strong growth in the lawn and garden segment of inventory finance and increases in auto finance and leasing and equipment finance originations, partially offset by a decrease in consumer real estate originations. The increase from the first quarter of 2016 was primarily due to increases in consumer real estate and leasing and equipment finance originations, partially offset by a decrease in inventory finance originations.



Credit Quality

Credit Trends																		Table 4
																Change
(Dollars in thousands)	2Q			1Q			4Q			3Q			2Q			2Q16 vs		2Q16 vs
	2016			2016			2015			2015			2015			1Q16		2Q15
Over 60-day delinquencies as a percentage of period-end loans and leases⁽¹⁾	0.12		%	0.10		%	0.11		%	0.17		%	0.10		%	2 bps		2 bps
Net charge-offs as a percentage of average loans and leases⁽²⁾	0.23			0.27			0.29			0.23			0.41			(4	)	(18	)
Non-accrual loans and leases and other real estate owned	$	232,334		$	241,090		$	250,448		$	264,694		$	263,717		(3.6)%		(11.9)%
Provision for credit losses	13,250			18,842			17,607			10,018			12,528			(29.7	)	5.8

(1) Excludes acquired portfolios and non-accrual loans and leases.
(2) Annualized.


•	The over 60-day delinquency rate, excluding acquired portfolios and non-accrual loans and leases, was 0.12 percent at June 30, 2016, up from 0.10 percent at both June 30, 2015 and March 31, 2016. The increases from both periods were primarily driven by delinquencies in the commercial real estate portfolio.


•	The net charge-off rate was 0.23 percent for the second quarter of 2016, down from 0.41 percent for the second quarter of 2015, and down from 0.27 percent for the first quarter of 2016. The decreases from both periods were primarily due to improved credit quality in the consumer real estate portfolio.

•

Non-accrual loans and leases and other real estate owned was $232.3 million at June 30, 2016, a decrease of $31.4 million, or 11.9 percent, from June 30, 2015, and a decrease of $8.8 million, or 3.6 percent, from March 31, 2016. The decrease from June 30, 2015 was primarily due to sales of consumer real estate and commercial properties, improving credit quality trends and continued efforts to actively work out problem loans in the commercial real estate portfolio. The decrease from March 31, 2016 was primarily due to sales of consumer real estate properties outpacing additions and improving credit quality trends in the consumer real estate portfolio. Non-accrual loans and leases and other real estate owned at June 30, 2016 was the lowest balance since the third quarter of 2008.

•

Provision for credit losses was $13.3 million for the second quarter of 2016, an increase of $0.7 million, or 5.8 percent, from the second quarter of 2015, and a decrease of $5.6 million, or 29.7 percent, from the first quarter of 2016. The increase from the second quarter of 2015 was primarily due to increased reserve requirements related to growth in the auto finance, leasing and equipment finance and inventory finance portfolios as well as increased reserve requirements related to changes in economic outlook, partially offset by decreased net charge-offs and improved credit quality in the consumer real estate and commercial portfolios. The decrease from the first quarter of 2016 was primarily due to lower net charge-offs and reduced reserve requirements in the consumer real estate portfolio.



Deposits

Average Deposits																				Table 5
										Percent Change
(Dollars in thousands)	2Q			1Q			2Q			2Q16 vs		2Q16 vs		YTD			YTD			Percent
	2016			2016			2015			1Q16		2Q15		2016			2015			Change

Checking	$	5,727,147		$	5,593,300		$	5,428,419		2.4	%	5.5	%	$	5,660,223		$	5,364,911		5.5	%
Savings	4,690,376			4,713,765			5,048,053			(0.5	)	(7.1	)	4,702,072			5,104,561			(7.9	)
Money market	2,557,897			2,472,751			2,261,567			3.4		13.1		2,515,324			2,205,764			14.0
Certificates of deposit	4,308,367			4,104,951			3,116,718			5.0		38.2		4,206,659			3,079,461			36.6
Total average deposits	$	17,283,787		$	16,884,767		$	15,854,757		2.4		9.0		$	17,084,278		$	15,754,697		8.4

Average interest rate on deposits⁽¹⁾	0.37		%	0.36		%	0.28		%					0.36		%	0.28		%

(1) Annualized.


•	Total average deposits for the second quarter of 2016 increased $1.4 billion, or 9.0 percent, from the second quarter of 2015 and increased $0.4 billion, or 2.4 percent, from the first quarter of 2016. The increases from both periods were primarily due to special campaigns for certificates of deposit as well as growth in checking and money market balances.


•	The average interest rate on deposits for the second quarter of 2016 was 0.37 percent, up 9 basis points from the second quarter of 2015 and up 1 basis point from the first quarter of 2016. The increases from both periods were primarily due to increased average interest rates resulting from promotions for certificates of deposit.



Non-interest Expense

Non-interest Expense																				Table 6
										Change
(Dollars in thousands)	2Q			1Q			2Q			2Q16 vs		2Q16 vs		YTD			YTD			Percent
	2016			2016			2015			1Q16		2Q15		2016			2015			Change

Compensation and employee benefits	$	118,093		$	124,473		$	116,159		(5.1	)%	1.7	%	$	242,566		$	231,974		4.6	%
Occupancy and equipment	36,884			37,008			36,152			(0.3	)	2.0		73,892			72,979			1.3
FDIC insurance	3,751			4,113			4,864			(8.8	)	(22.9	)	7,864			10,257			(23.3	)
Advertising and marketing	5,678			5,887			5,150			(3.6	)	10.3		11,565			11,673			(0.9	)
Other	49,987			43,348			45,887			15.3		8.9		93,335			94,020			(0.7	)
Subtotal	214,393			214,829			208,212			(0.2	)	3.0		429,222			420,903			2.0
Operating lease depreciation	9,842			9,573			8,582			2.8		14.7		19,415			16,316			19.0
Foreclosed real estate and repossessed assets, net	3,135			3,920			6,377			(20.0	)	(50.8	)	7,055			12,573			(43.9	)
Other credit costs, net	(54		)	12			(62		)	N.M.		12.9		(42		)	84			N.M.
Total non-interest expense	$	227,316		$	228,334		$	223,109		(0.4	)	1.9		$	455,650		$	449,876		1.3

Efficiency ratio	68.69		%	70.42		%	69.84		%	(173) bps		(115) bps		69.54		%	72.15		%	(261) bps

N.M. Not Meaningful.


•	Compensation and employee benefits expense increased $1.9 million, or 1.7 percent, from the second quarter of 2015 and decreased $6.4 million, or 5.1 percent, from the first quarter of 2016. The increase from the second quarter of 2015 was primarily due to higher incentives based on production results. The decrease from the first quarter of 2016 was primarily due to seasonality of payroll taxes.


•	Branch realignment expense of $2.9 million during the second quarter of 2016 relating to the pending closure of two traditional branches was included within other non-interest expense. There was no branch realignment expense during 2015.


•	Operating lease depreciation is a transactional cost that is typically more than offset by increases in leasing and equipment finance non-interest income.

•

Foreclosed real estate and repossessed assets, net, decreased $3.2 million, or 50.8 percent from the second quarter of 2015 and decreased $0.8 million, or 20.0 percent, from the first quarter of 2016. The decrease from the second quarter of 2015 was primarily due to lower write-downs on existing foreclosed commercial properties and lower operating costs associated with maintaining fewer consumer and commercial properties, partially offset by higher repossessed asset expense. The decrease from the first quarter of 2016 was primarily due to lower write-downs on existing foreclosed consumer and commercial properties and lower operating costs associated with maintaining fewer consumer properties.



Capital

Capital Information				Table 7

(Dollars in thousands, except per-share data)	2Q 2016			4Q 2015
Total equity	$	2,419,758		$	2,306,917
Book value per common share	12.48			11.94
Tangible book value per common share⁽¹⁾	11.15			10.59
Common equity to assets	10.13		%	9.80		%
Tangible common equity to tangible assets⁽¹⁾	9.15			8.79
Capital accumulation rate⁽²⁾	8.98			10.44

Regulatory Capital:	2Q 2016⁽³⁾			4Q 2015
Common equity Tier 1 capital	$	1,895,936		$	1,814,442
Tier 1 capital	2,177,700			2,092,195
Total capital	2,563,277			2,487,060

Regulatory Capital Ratios:
Common equity Tier 1 capital ratio	10.16		%	10.00		%
Tier 1 risk-based capital ratio	11.67			11.54
Total risk-based capital ratio	13.73			13.71
Tier 1 leverage ratio	10.38			10.46

(1) See "Reconciliation of GAAP to Non-GAAP Financial Measures" table.
(2) Calculated as the change in annualized year-to-date common equity Tier 1 capital as a percentage of prior year end common equity Tier 1 capital.
(3) The regulatory capital ratios for 2Q 2016 are preliminary pending completion and filing of the Company's regulatory reports.


•	TCF maintained strong capital ratios as the Company accumulates capital through earnings. The decrease in the Tier 1 leverage ratio from the fourth quarter of 2015 was primarily the result of asset growth.

•

On July 20, 2016, TCF's Board of Directors declared a regular quarterly cash dividend of 7.5 cents per common share, payable on September 1, 2016, to stockholders of record at the close of business on August 15, 2016. TCF also declared dividends on the 7.50% Series A and 6.45% Series B Non-Cumulative Perpetual Preferred Stock, both payable on September 1, 2016, to stockholders of record at the close of business on August 15, 2016.

Webcast Information

A live webcast of TCF's conference call to discuss the second quarter earnings will be hosted at TCF's website, http://ir.tcfbank.com, on July 22, 2016 at 9:00 a.m. CDT. A slide presentation for the call will be available on the website prior to the call. Additionally, the webcast will be available for replay on TCF's website after the conference call. The website also includes free access to company news releases, TCF's annual report, investor presentations and SEC filings.

TCF is a Wayzata, Minnesota-based national bank holding company. As of June 30, 2016, TCF had $21.1 billion in total assets and 342 branches in Illinois, Minnesota, Michigan, Colorado, Wisconsin, Arizona and South Dakota providing retail and commercial banking services. TCF, through its subsidiaries, also conducts commercial leasing, equipment finance, and auto finance business in all 50 states and commercial inventory finance business in all 50 states and Canada. For more information about TCF, please visit http://ir.tcfbank.com.

Cautionary Statements for Purposes of the Safe Harbor Provisions of the Securities Litigation Reform Act

Any statements contained in this earnings release regarding the outlook for the Company's businesses and their respective markets, such as projections of future performance, guidance, statements of the Company's plans and objectives, forecasts of market trends and other matters, are forward-looking statements based on the Company's assumptions and beliefs. Such statements may be identified by such words or phrases as "will likely result," "are expected to," "will continue," "outlook," "will benefit," "is anticipated," "estimate," "project," "management believes" or similar expressions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those discussed in such statements and no assurance can be given that the results in any forward-looking statement will be achieved. For these statements, TCF claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Any forward-looking statement speaks only as of the date on which it is made, and we disclaim any obligation to subsequently revise any forward-looking statement to reflect events or circumstances after such date or to reflect the occurrence of anticipated or unanticipated events.

Certain factors could cause the Company's future results to differ materially from those expressed or implied in any forward-looking statements contained herein. These factors include the factors discussed in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2015 under the heading "Risk Factors", 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.

Adverse Economic or Business Conditions; Competitive Conditions; Credit and Other Risks. Deterioration in general economic and banking industry conditions, including those arising from government shutdowns, defaults, anticipated defaults or rating agency downgrades of sovereign debt (including debt of the U.S.), or increases in unemployment; adverse economic, business and competitive developments such as shrinking interest margins, reduced demand for financial services and loan and lease products, deposit outflows, increased deposit costs due to competition for deposit growth and evolving payment system developments, deposit account attrition or an inability to increase the number of deposit accounts; customers completing financial transactions without using a bank; adverse changes in credit quality and other risks posed by TCF's loan, lease, investment, securities held to maturity and securities available for sale portfolios, including declines in commercial or residential real estate values, changes in the allowance for loan and lease losses dictated by new market conditions or regulatory requirements, or the inability of home equity line borrowers to make increased payments caused by increased interest rates or amortization of principal; deviations from estimates of prepayment rates and fluctuations in interest rates that result in decreases in the value of assets such as interest-only strips that arise in connection with TCF's loan sales activity; 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; counterparty risk, including the risk of defaults by our counterparties or diminished availability of counterparties who satisfy our credit quality requirements; decreases in demand for the types of equipment that TCF leases or finances; the effect of any negative publicity.

Legislative and Regulatory Requirements. New consumer protection and supervisory requirements and regulations, including those resulting from action by the Consumer Financial Protection Bureau and changes in the scope of Federal preemption of state laws that could be applied to national banks and their subsidiaries; the imposition of requirements that adversely impact TCF's deposit, lending, loan collection and other business activities such as mortgage foreclosure moratorium laws, further regulation of financial institution campus banking programs, use by municipalities of eminent domain on property securing troubled residential mortgage loans, or imposition of underwriting or other limitations that impact the ability to offer certain variable-rate products; changes affecting customer account charges and fee income, including changes to interchange rates; regulatory actions or changes in customer opt-in preferences with respect to overdrafts, which may have an adverse impact on TCF; changes to bankruptcy laws which would result in the loss of all or part of TCF's security interest due to collateral value declines; deficiencies in TCF's compliance under the Bank Secrecy Act in past or future periods, which may result in regulatory enforcement action including monetary penalties; increased health care costs resulting from Federal health care reform; regulatory criticism and resulting enforcement actions or other adverse consequences such as increased capital requirements, higher deposit insurance assessments or monetary damages or penalties; heightened regulatory practices, requirements or expectations, including, but not limited to, requirements related to enterprise risk management, the Bank Secrecy Act and anti-money laundering compliance activity.

Earnings/Capital Risks and Constraints, Liquidity Risks. Limitations on TCF's ability to pay dividends or to increase dividends 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 impact on banks of regulatory reform, including 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 or 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; uncertainties relating to future retail deposit account changes, including limitations on TCF's ability to predict customer behavior and the impact on TCF's fee revenues.

Branching Risk; Growth Risks. Adverse developments affecting TCF's supermarket banking relationships or any of the supermarket chains in which TCF maintains supermarket branches; costs related to closing underperforming branches; inability to timely close underperforming branches due to long-term lease obligations; slower than anticipated growth in existing or acquired businesses; inability to successfully execute on TCF's growth strategy through acquisitions or cross-selling opportunities; failure to expand or diversify TCF's balance sheet through new or expanded programs or opportunities; failure to successfully attract and retain new customers, including the failure to attract and retain manufacturers and dealers to expand the inventory finance business; failure to effectuate, and risks of claims related to, sales and securitizations of loans; risks related to new product additions and addition of distribution channels (or entry into new markets) for existing products.

Technological and Operational Matters. Technological or operational difficulties, loss or theft of information, cyber-attacks and other security breaches, counterparty failures and the possibility that deposit account losses (fraudulent checks, etc.) may increase; failure to keep pace with technological change, including the failure to develop and maintain technology necessary to satisfy customer demands; ability to attract and retain employees given competitive conditions.

Litigation Risks. Results of litigation or government enforcement actions, including class action litigation or enforcement actions concerning TCF's lending or deposit activities, including account opening/origination, servicing practices, fees or charges, employment practices, or checking account overdraft program "opt in" requirements; and possible increases in indemnification obligations for certain litigation against Visa U.S.A.

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; ineffective internal controls; adverse federal, state or foreign tax assessments or findings in tax audits; lack of or inadequate insurance coverage for claims against TCF; potential for claims and legal action related to TCF's fiduciary responsibilities.



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per-share data)
(Unaudited)

	Three Months Ended June 30,						Change
	2016			2015			$			%
Interest income:
Loans and leases	$	214,128		$	207,164		$	6,964		3.4	%
Securities available for sale	6,396			3,543			2,853			80.5
Securities held to maturity	1,116			1,384			(268		)	(19.4	)
Investments and other	12,364			10,990			1,374			12.5
Total interest income	234,004			223,081			10,923			4.9
Interest expense:
Deposits	15,893			11,080			4,813			43.4
Borrowings	5,127			5,972			(845		)	(14.1	)
Total interest expense	21,020			17,052			3,968			23.3
Net interest income	212,984			206,029			6,955			3.4
Provision for credit losses	13,250			12,528			722			5.8
Net interest income after provision for credit losses	199,734			193,501			6,233			3.2
Non-interest income:
Fees and service charges	34,622			36,295			(1,673		)	(4.6	)
Card revenue	14,083			13,902			181			1.3
ATM revenue	5,288			5,540			(252		)	(4.5	)
Subtotal	53,993			55,737			(1,744		)	(3.1	)
Gains on sales of auto loans, net	10,143			10,756			(613		)	(5.7	)
Gains on sales of consumer real estate loans, net	10,839			11,954			(1,115		)	(9.3	)
Servicing fee income	9,502			7,216			2,286			31.7
Subtotal	30,484			29,926			558			1.9
Leasing and equipment finance	31,074			26,385			4,689			17.8
Other	2,405			1,460			945			64.7
Fees and other revenue	117,956			113,508			4,448			3.9
Gains (losses) on securities, net	—			(59		)	59			(100.0	)
Total non-interest income	117,956			113,449			4,507			4.0
Non-interest expense:
Compensation and employee benefits	118,093			116,159			1,934			1.7
Occupancy and equipment	36,884			36,152			732			2.0
FDIC insurance	3,751			4,864			(1,113		)	(22.9	)
Advertising and marketing	5,678			5,150			528			10.3
Other	49,987			45,887			4,100			8.9
Subtotal	214,393			208,212			6,181			3.0
Operating lease depreciation	9,842			8,582			1,260			14.7
Foreclosed real estate and repossessed assets, net	3,135			6,377			(3,242		)	(50.8	)
Other credit costs, net	(54		)	(62		)	8			12.9
Total non-interest expense	227,316			223,109			4,207			1.9
Income before income tax expense	90,374			83,841			6,533			7.8
Income tax expense	29,706			28,902			804			2.8
Income after income tax expense	60,668			54,939			5,729			10.4
Income attributable to non-controlling interest	2,974			2,684			290			10.8
Net income attributable to TCF Financial Corporation	57,694			52,255			5,439			10.4
Preferred stock dividends	4,847			4,847			—			—
Net income available to common stockholders	$	52,847		$	47,408		$	5,439		11.5

Net income per common share:
Basic	$	0.32		$	0.29		$	0.03		10.3	%
Diluted	0.31			0.29			0.02			6.9

Dividends declared per common share	$	0.075		$	0.05		$	0.025		50.0	%

Average common and common equivalent shares
outstanding (in thousands):
Basic	167,334			165,589			1,745			1.1	%
Diluted	167,849			166,118			1,731			1.0



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per-share data)
(Unaudited)

	Six Months Ended June 30,						Change
	2016			2015			$			%
Interest income:
Loans and leases	$	428,933		$	413,140		$	15,793		3.8	%
Securities available for sale	11,894			6,623			5,271			79.6
Securities held to maturity	2,435			2,789			(354		)	(12.7	)
Investments and other	23,084			20,323			2,761			13.6
Total interest income	466,346			442,875			23,471			5.3
Interest expense:
Deposits	30,884			22,152			8,732			39.4
Borrowings	10,820			11,274			(454		)	(4.0	)
Total interest expense	41,704			33,426			8,278			24.8
Net interest income	424,642			409,449			15,193			3.7
Provision for credit losses	32,092			25,319			6,773			26.8
Net interest income after provision for credit losses	392,550			384,130			8,420			2.2
Non-interest income:
Fees and service charges	67,439			70,267			(2,828		)	(4.0	)
Card revenue	27,446			26,803			643			2.4
ATM revenue	10,309			10,662			(353		)	(3.3	)
Subtotal	105,194			107,732			(2,538		)	(2.4	)
Gains on sales of auto loans, net	22,063			17,021			5,042			29.6
Gains on sales of consumer real estate loans, net	20,223			20,717			(494		)	(2.4	)
Servicing fee income	18,385			14,558			3,827			26.3
Subtotal	60,671			52,296			8,375			16.0
Leasing and equipment finance	59,561			48,609			10,952			22.5
Other	5,248			5,587			(339		)	(6.1	)
Fees and other revenue	230,674			214,224			16,450			7.7
Gains (losses) on securities, net	(116		)	(137		)	21			15.3
Total non-interest income	230,558			214,087			16,471			7.7
Non-interest expense:
Compensation and employee benefits	242,566			231,974			10,592			4.6
Occupancy and equipment	73,892			72,979			913			1.3
FDIC insurance	7,864			10,257			(2,393		)	(23.3	)
Advertising and marketing	11,565			11,673			(108		)	(0.9	)
Other	93,335			94,020			(685		)	(0.7	)
Subtotal	429,222			420,903			8,319			2.0
Operating lease depreciation	19,415			16,316			3,099			19.0
Foreclosed real estate and repossessed assets, net	7,055			12,573			(5,518		)	(43.9	)
Other credit costs, net	(42		)	84			(126		)	N.M.
Total non-interest expense	455,650			449,876			5,774			1.3
Income before income tax expense	167,458			148,341			19,117			12.9
Income tax expense	56,509			51,730			4,779			9.2
Income after income tax expense	110,949			96,611			14,338			14.8
Income attributable to non-controlling interest	5,209			4,555			654			14.4
Net income attributable to TCF Financial Corporation	105,740			92,056			13,684			14.9
Preferred stock dividends	9,694			9,694			—			—
Net income available to common stockholders	$	96,046		$	82,362		$	13,684		16.6

Net income per common share:
Basic	$	0.57		$	0.50		$	0.07		14.0	%
Diluted	0.57			0.50			0.07			14.0

Dividends declared per common share	$	0.15		$	0.10		$	0.05		50.0	%

Average common and common equivalent shares
outstanding (in thousands):
Basic	167,111			165,219			1,892			1.1	%
Diluted	167,638			165,744			1,894			1.1

N.M. Not Meaningful.



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
(Unaudited)

	Three Months Ended June 30,						Change
	2016			2015			$			%
Net income attributable to TCF Financial Corporation	$	57,694		$	52,255		$	5,439		10.4	%
Other comprehensive income (loss):
Securities available for sale:
Unrealized gains (losses) arising during the period	21,128			(11,140		)	32,268			N.M.
Reclassification of net (gains) losses to net income	749			286			463			161.9
Net investment hedges:
Unrealized gains (losses) arising during the period	(338		)	(674		)	336			49.9
Foreign currency translation adjustment:
Unrealized gains (losses) arising during the period	339			617			(278		)	(45.1	)
Recognized postretirement prior service cost:
Reclassification of net (gains) losses to net income	(11		)	(11		)	—			—
Income tax (expense) benefit	(8,177		)	4,358			(12,535		)	N.M.
Total other comprehensive income (loss)	13,690			(6,564		)	20,254			N.M.
Comprehensive income	$	71,384		$	45,691		$	25,693		56.2


	Six Months Ended June 30,						Change
	2016			2015			$			%
Net income attributable to TCF Financial Corporation	$	105,740		$	92,056		$	13,684		14.9	%
Other comprehensive income (loss):
Securities available for sale:
Unrealized gains (losses) arising during the period	40,263			(7,001		)	47,264			N.M.
Reclassification of net (gains) losses to net income	1,023			590			433			73.4
Net investment hedges:
Unrealized gains (losses) arising during the period	(3,595		)	2,914			(6,509		)	N.M.
Foreign currency translation adjustment:
Unrealized gains (losses) arising during the period	3,748			(3,269		)	7,017			N.M.
Recognized postretirement prior service cost:
Reclassification of net (gains) losses to net income	(23		)	(23		)	—			—
Income tax (expense) benefit	(14,307		)	1,329			(15,636		)	N.M.
Total other comprehensive income (loss)	27,109			(5,460		)	32,569			N.M.
Comprehensive income	$	132,849		$	86,596		$	46,253		53.4

N.M. Not Meaningful.



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except per-share data)
(Unaudited)

	At Jun. 30,			At Dec. 31,			Change
	2016			2015			$			%
ASSETS:
Cash and due from banks	$	667,994		$	889,337		$	(221,343	)	(24.9	)%
Investments	61,644			70,537			(8,893		)	(12.6	)
Securities held to maturity	192,662			201,920			(9,258		)	(4.6	)
Securities available for sale	1,338,638			888,885			449,753			50.6
Loans and leases held for sale	358,806			157,625			201,181			127.6
Loans and leases:
Consumer real estate:
First mortgage lien	2,409,320			2,624,956			(215,636		)	(8.2	)
Junior lien	2,677,522			2,839,316			(161,794		)	(5.7	)
Total consumer real estate	5,086,842			5,464,272			(377,430		)	(6.9	)
Commercial	3,096,046			3,145,832			(49,786		)	(1.6	)
Leasing and equipment finance	4,120,359			4,012,248			108,111			2.7
Inventory finance	2,334,893			2,146,754			188,139			8.8
Auto finance	2,812,807			2,647,596			165,211			6.2
Other	20,890			19,297			1,593			8.3
Total loans and leases	17,471,837			17,435,999			35,838			0.2
Allowance for loan and lease losses	(158,572		)	(156,054		)	(2,518		)	(1.6	)
Net loans and leases	17,313,265			17,279,945			33,320			0.2
Premises and equipment, net	428,490			445,934			(17,444		)	(3.9	)
Goodwill	225,640			225,640			—			—
Other assets	482,371			529,786			(47,415		)	(8.9	)
Total assets	$	21,069,510		$	20,689,609		$	379,901		1.8

LIABILITIES AND EQUITY:
Deposits:
Checking	$	5,644,518		$	5,690,559		$	(46,041	)	(0.8	)%
Savings	4,676,715			4,717,457			(40,742		)	(0.9	)
Money market	2,534,034			2,408,180			125,854			5.2
Certificates of deposit	4,337,094			3,903,793			433,301			11.1
Total deposits	17,192,361			16,719,989			472,372			2.8
Short-term borrowings	4,695			5,381			(686		)	(12.7	)
Long-term borrowings	743,733			1,034,557			(290,824		)	(28.1	)
Total borrowings	748,428			1,039,938			(291,510		)	(28.0	)
Accrued expenses and other liabilities	708,963			622,765			86,198			13.8
Total liabilities	18,649,752			18,382,692			267,060			1.5
Equity:
Preferred stock, par value $0.01 per share, 30,000,000 shares authorized;
4,006,900 shares issued	263,240			263,240			—			—
Common stock, par value $0.01 per share, 280,000,000 shares authorized;
171,048,518 and 169,887,030 shares issued, respectively	1,710			1,699			11			0.6
Additional paid-in capital	862,226			851,836			10,390			1.2
Retained earnings, subject to certain restrictions	1,311,325			1,240,347			70,978			5.7
Accumulated other comprehensive income (loss)	11,763			(15,346		)	27,109			N.M.
Treasury stock at cost, 42,566 shares, and other	(52,166		)	(50,860		)	(1,306		)	(2.6	)
Total TCF Financial Corporation stockholders' equity	2,398,098			2,290,916			107,182			4.7
Non-controlling interest in subsidiaries	21,660			16,001			5,659			35.4
Total equity	2,419,758			2,306,917			112,841			4.9
Total liabilities and equity	$	21,069,510		$	20,689,609		$	379,901		1.8

N.M. Not Meaningful.



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
SUMMARY OF CREDIT QUALITY DATA
(Dollars in thousands)
(Unaudited)

Over 60-Day Delinquencies as a Percentage of Portfolio⁽¹⁾

	At		At		At		At		At		Change from
	Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,			Jun. 30,
	2016		2016		2015		2015		2015		2016			2015
Consumer real estate:
First mortgage lien	0.34	%	0.38	%	0.46	%	0.36	%	0.38	%	(4	)	bps	(4	)	bps
Junior lien	0.03		0.05		0.05		0.08		0.08		(2	)		(5	)
Total consumer real estate	0.17		0.20		0.23		0.21		0.22		(3	)		(5	)
Commercial	0.11		—		—		0.25		—		11			11
Leasing and equipment finance	0.13		0.12		0.06		0.19		0.06		1			7
Inventory finance	—		—		0.01		0.01		—		—			—
Auto finance	0.13		0.09		0.14		0.11		0.11		4			2
Other	0.40		0.16		0.13		0.17		0.11		24			29
Subtotal	0.12		0.10		0.11		0.17		0.10		2			2
Acquired portfolios	0.41		0.41		0.41		0.37		0.28		—			13
Total delinquencies	0.12		0.10		0.11		0.17		0.10		2			2


(1)	Excludes non-accrual loans and leases.



Net Charge-Offs as a Percentage of Average Loans and Leases

	Quarter Ended⁽¹⁾										Change from
	Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,			Jun. 30,
	2016		2016		2015		2015		2015		2016			2015
Consumer real estate:
First mortgage lien	0.35	%	0.55	%	0.54	%	0.53	%	0.79	%	(20	)	bps	(44	)	bps
Junior lien	0.05		0.17		0.17		0.11		0.59		(12	)		(54	)
Total consumer real estate	0.19		0.35		0.34		0.32		0.69		(16	)		(50	)
Commercial	0.08		(0.02	)	0.05		—		0.21		10			(13	)
Leasing and equipment finance	0.11		0.13		0.16		0.09		0.16		(2	)		(5	)
Inventory finance	0.09		0.04		0.05		0.03		0.11		5			(2	)
Auto finance	0.69		0.81		0.75		0.62		0.66		(12	)		3
Other	N.M.		N.M.		N.M.		N.M.		N.M.		N.M.			N.M.
Total	0.23		0.27		0.29		0.23		0.41		(4	)		(18	)

N.M. Not Meaningful.


(1)	Annualized.



Non-Accrual Loans and Leases Rollforward

	Quarter Ended															Change from
	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Jun. 30,
	2016			2016			2015			2015			2015			2016			2015
Balance, beginning of period	$	198,649		$	200,466		$	206,110		$	205,710		$	222,143		$	(1,817	)	$	(23,494	)
Additions	35,280			38,029			44,387			48,505			40,846			(2,749		)	(5,566		)
Charge-offs	(5,475		)	(7,436		)	(9,002		)	(7,055		)	(14,050		)	1,961			8,575
Transfers to other assets	(10,310		)	(12,342		)	(13,612		)	(16,400		)	(17,738		)	2,032			7,428
Return to accrual status	(6,687		)	(7,698		)	(9,282		)	(10,190		)	(10,298		)	1,011			3,611
Payments received	(17,774		)	(15,551		)	(20,103		)	(14,721		)	(15,543		)	(2,223		)	(2,231		)
Sales	(900		)	—			(775		)	(705		)	(353		)	(900		)	(547		)
Other, net	2,759			3,181			2,743			966			703			(422		)	2,056
Balance, end of period	$	195,542		$	198,649		$	200,466		$	206,110		$	205,710		$	(3,107	)	$	(10,168	)



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
SUMMARY OF CREDIT QUALITY DATA, CONTINUED
(Dollars in thousands)
(Unaudited)

Other Real Estate Owned Rollforward

	Quarter Ended															Change from
	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Jun. 30,
	2016			2016			2015			2015			2015			2016			2015
Balance, beginning of period	$	42,441		$	49,982		$	58,584		$	58,007		$	62,398		$	(7,541	)	$	(19,957	)
Transferred in	9,661			10,575			12,626			15,087			15,359			(914		)	(5,698		)
Sales	(16,058		)	(18,885		)	(19,174		)	(13,442		)	(17,164		)	2,827			1,106
Writedowns	(2,027		)	(2,744		)	(2,130		)	(2,868		)	(4,003		)	717			1,976
Other, net	2,775			3,513			76			1,800			1,417			(738		)	1,358
Balance, end of period	$	36,792		$	42,441		$	49,982		$	58,584		$	58,007		$	(5,649	)	$	(21,215	)



Allowance for Loan and Lease Losses

	At					At					At					At					At
	Jun. 30,					Mar. 31,					Dec. 31,					Sep. 30,					Jun. 30,
	2016					2016					2015					2015					2015
				% of					% of					% of					% of				% of
	Balance		Portfolio			Balance		Portfolio			Balance		Portfolio			Balance		Portfolio			Balance		Portfolio
Consumer real estate	$	64,765		1.27	%	$	66,728		1.27	%	$	67,992		1.24	%	$	70,329		1.25	%	$	74,687	1.35	%
Commercial	31,161			1.01		31,547			1.01		30,185			0.96		30,006			0.96		30,205		0.97
Leasing and equipment finance	20,124			0.49		19,454			0.49		19,018			0.47		18,177			0.47		17,669		0.47
Inventory finance	12,084			0.52		13,306			0.50		11,128			0.52		11,121			0.52		10,879		0.52
Auto finance	29,772			1.06		28,535			1.02		26,486			1.00		23,722			0.98		22,061		0.96
Other	666			3.19		504			2.66		1,245			6.45		607			2.94		614		2.81
Total	$	158,572		0.91		$	160,074		0.90		$	156,054		0.90		$	153,962		0.90		$	156,115	0.93



Changes in Allowance for Loan and Lease Losses

	Quarter Ended															Change from
	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Jun. 30,
	2016			2016			2015			2015			2015			2016			2015
Balance, beginning of period	$	160,074		$	156,054		$	153,962		$	156,115		$	163,799		$	4,020		$	(3,725	)
Charge-offs	(14,723		)	(16,667		)	(18,101		)	(15,338		)	(22,984		)	1,944			8,261
Recoveries	4,592			4,761			5,523			5,397			5,506			(169		)	(914		)
Net (charge-offs) recoveries	(10,131		)	(11,906		)	(12,578		)	(9,941		)	(17,478		)	1,775			7,347
Provision for credit losses	13,250			18,842			17,607			10,018			12,528			(5,592		)	722
Other	(4,621		)	(2,916		)	(2,937		)	(2,230		)	(2,734		)	(1,705		)	(1,887		)
Balance, end of period	$	158,572		$	160,074		$	156,054		$	153,962		$	156,115		$	(1,502	)	$	2,457



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Dollars in thousands)
(Unaudited)

	Three Months Ended June 30,
	2016						2015
	Average				Yields and		Average				Yields and
	Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾		Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾
ASSETS:
Investments and other	$	322,477	$	2,396	2.99	%	$	551,630	$	3,216	2.34	%
Securities held to maturity	194,693		1,116		2.29		209,834		1,384		2.64
Securities available for sale⁽³⁾
Taxable	697,902		3,853		2.21		566,499		3,501		2.47
Tax-exempt⁽⁴⁾	481,246		3,912		3.25		7,420		65		3.50
Loans and leases held for sale	497,797		9,968		8.05		340,912		7,774		9.15
Loans and leases:⁽⁵⁾
Consumer real estate:
Fixed-rate	2,327,409		33,143		5.73		2,776,177		39,696		5.73
Variable-rate	2,931,318		38,773		5.32		2,811,510		35,973		5.13
Total consumer real estate	5,258,727		71,916		5.50		5,587,687		75,669		5.43
Commercial:
Fixed-rate	982,914		12,129		4.96		1,193,011		14,954		5.03
Variable- and adjustable-rate	2,127,032		21,143		4.00		1,955,261		18,765		3.85
Total commercial	3,109,946		33,272		4.30		3,148,272		33,719		4.30
Leasing and equipment finance	4,032,112		44,824		4.45		3,751,776		43,738		4.66
Inventory finance	2,564,648		36,598		5.74		2,292,481		32,064		5.61
Auto finance	2,751,679		28,660		4.19		2,211,014		22,633		4.11
Other	9,585		135		5.77		10,734		185		6.92
Total loans and leases	17,726,697		215,405		4.88		17,001,964		208,008		4.90
Total interest-earning assets	19,920,812		236,650		4.77		18,678,259		223,948		4.81
Other assets⁽⁶⁾	1,286,506						1,209,514
Total assets	$	21,207,318					$	19,887,773
LIABILITIES AND EQUITY:
Non-interest bearing deposits:
Retail	$	1,817,734					$	1,699,668
Small business	861,394						822,683
Commercial and custodial	582,041						497,883
Total non-interest bearing deposits	3,261,169						3,020,234
Interest-bearing deposits:
Checking	2,478,673		92		0.02		2,422,909		137		0.02
Savings	4,677,681		336		0.03		5,033,329		800		0.06
Money market	2,557,897		4,033		0.63		2,261,567		3,450		0.61
Certificates of deposit	4,308,367		11,432		1.07		3,116,718		6,693		0.86
Total interest-bearing deposits	14,022,618		15,893		0.46		12,834,523		11,080		0.35
Total deposits	17,283,787		15,893		0.37		15,854,757		11,080		0.28
Borrowings:
Short-term borrowings	9,100		16		0.71		8,246		12		0.63
Long-term borrowings	840,739		5,111		2.43		1,234,205		5,960		1.93
Total borrowings	849,839		5,127		2.42		1,242,451		5,972		1.92
Total interest-bearing liabilities	14,872,457		21,020		0.57		14,076,974		17,052		0.49
Total deposits and borrowings	18,133,626		21,020		0.47		17,097,208		17,052		0.40
Other liabilities	690,363						594,352
Total liabilities	18,823,989						17,691,560
Total TCF Financial Corp. stockholders' equity	2,357,509						2,173,699
Non-controlling interest in subsidiaries	25,820						22,514
Total equity	2,383,329						2,196,213
Total liabilities and equity	$	21,207,318					$	19,887,773
Net interest income and margin			$	215,630	4.35				$	206,896	4.44


(1)	Interest and yields are presented on a fully tax-equivalent basis.


(2)	Annualized.


(3)	Average balances and yields of securities available for sale are based upon historical amortized cost and exclude equity securities.


(4)	The yield on tax-exempt securities available for sale is computed on a tax-equivalent basis using a statutory federal income tax rate of 35% for all periods presented.


(5)	Average balances of loans and leases include non-accrual loans and leases and are presented net of unearned income.


(6)	Includes leased equipment and related initial direct costs under operating leases of $131.9 million and $96.0 million for the second quarter of 2016 and 2015, respectively.



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Dollars in thousands)
(Unaudited)

	Six Months Ended June 30,
	2016						2015
	Average				Yields and		Average				Yields and
	Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾		Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾
ASSETS:
Investments and other	$	335,778	$	4,612	2.76	%	$	608,303	$	6,713	2.22	%
Securities held to maturity	196,998		2,435		2.47		210,735		2,789		2.65
Securities available for sale⁽³⁾
Taxable	669,349		7,671		2.29		520,851		6,581		2.53
Tax-exempt⁽⁴⁾	400,337		6,496		3.25		3,731		65		3.48
Loans and leases held for sale	432,741		18,472		8.58		308,709		13,610		8.89
Loans and leases:⁽⁵⁾
Consumer real estate:
Fixed-rate	2,379,091		68,345		5.78		2,843,979		83,056		5.89
Variable-rate	2,979,660		78,829		5.32		2,795,248		71,189		5.14
Total consumer real estate	5,358,751		147,174		5.52		5,639,227		154,245		5.51
Commercial:
Fixed-rate	997,892		24,558		4.95		1,233,186		30,684		5.02
Variable- and adjustable-rate	2,136,131		42,480		4.00		1,917,938		37,014		3.89
Total commercial	3,134,023		67,038		4.30		3,151,124		67,698		4.33
Leasing and equipment finance	4,012,395		89,478		4.46		3,740,691		87,223		4.66
Inventory finance	2,499,091		70,968		5.71		2,201,183		61,756		5.66
Auto finance	2,727,779		56,497		4.17		2,116,604		43,484		4.14
Other	9,802		277		5.70		11,173		398		7.19
Total loans and leases	17,741,841		431,432		4.88		16,860,002		414,804		4.95
Total interest-earning assets	19,777,044		471,118		4.78		18,512,331		444,562		4.83
Other assets⁽⁶⁾	1,291,993						1,221,633
Total assets	$	21,069,037					$	19,733,964
LIABILITIES AND EQUITY:
Non-interest bearing deposits:
Retail	$	1,784,722					$	1,673,364
Small business	857,519						813,554
Commercial and custodial	571,513						493,590
Total non-interest bearing deposits	3,213,754						2,980,508
Interest-bearing deposits:
Checking	2,459,618		173		0.01		2,400,957		288		0.02
Savings	4,688,923		682		0.03		5,088,007		1,901		0.08
Money market	2,515,324		7,840		0.63		2,205,764		7,017		0.64
Certificates of deposit	4,206,659		22,189		1.06		3,079,461		12,946		0.85
Total interest-bearing deposits	13,870,524		30,884		0.45		12,774,189		22,152		0.35
Total deposits	17,084,278		30,884		0.36		15,754,697		22,152		0.28
Borrowings:
Short-term borrowings	7,331		23		0.64		8,124		30		0.75
Long-term borrowings	951,626		10,797		2.27		1,206,019		11,244		1.87
Total borrowings	958,957		10,820		2.26		1,214,143		11,274		1.86
Total interest-bearing liabilities	14,829,481		41,704		0.56		13,988,332		33,426		0.48
Total deposits and borrowings	18,043,235		41,704		0.46		16,968,840		33,426		0.40
Other liabilities	670,635						591,463
Total liabilities	18,713,870						17,560,303
Total TCF Financial Corp. stockholders' equity	2,332,645						2,153,851
Non-controlling interest in subsidiaries	22,522						19,810
Total equity	2,355,167						2,173,661
Total liabilities and equity	$	21,069,037					$	19,733,964
Net interest income and margin			$	429,414	4.36				$	411,136	4.47


(1)	Interest and yields are presented on a fully tax-equivalent basis.


(2)	Annualized.


(3)	Average balances and yields of securities available for sale are based upon historical amortized cost and exclude equity securities.


(4)	The yield on tax-exempt securities available for sale is computed on a tax-equivalent basis using a statutory federal income tax rate of 35% for all periods presented.


(5)	Average balances of loans and leases include non-accrual loans and leases and are presented net of unearned income.


(6)	Includes leased equipment and related initial direct costs under operating leases of $132.7 million and $92.4 million for the six months ended June 30, 2016 and 2015, respectively.



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per-share data)
(Unaudited)

	Three Months Ended
	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,
	2016			2016			2015			2015			2015
Interest income:
Loans and leases	$	214,128		$	214,805		$	212,346		$	207,250		$	207,164
Securities available for sale	6,396			5,498			4,864			4,161			3,543
Securities held to maturity	1,116			1,319			1,336			1,361			1,384
Investments and other	12,364			10,720			6,905			10,832			10,990
Total interest income	234,004			232,342			225,451			223,604			223,081
Interest expense:
Deposits	15,893			14,991			13,772			12,302			11,080
Borrowings	5,127			5,693			6,010			6,032			5,972
Total interest expense	21,020			20,684			19,782			18,334			17,052
Net interest income	212,984			211,658			205,669			205,270			206,029
Provision for credit losses	13,250			18,842			17,607			10,018			12,528
Net interest income after provision for credit losses	199,734			192,816			188,062			195,252			193,501
Non-interest income:
Fees and service charges	34,622			32,817			37,741			36,991			36,295
Card revenue	14,083			13,363			13,781			13,803			13,902
ATM revenue	5,288			5,021			5,143			5,739			5,540
Subtotal	53,993			51,201			56,665			56,533			55,737
Gains on sales of auto loans, net	10,143			11,920			3,136			10,423			10,756
Gains on sales of consumer real estate loans, net	10,839			9,384			13,104			7,143			11,954
Servicing fee income	9,502			8,883			8,622			8,049			7,216
Subtotal	30,484			30,187			24,862			25,615			29,926
Leasing and equipment finance	31,074			28,487			32,355			27,165			26,385
Other	2,405			2,843			1,806			3,070			1,460
Fees and other revenue	117,956			112,718			115,688			112,383			113,508
Gains (losses) on securities, net	—			(116		)	(29		)	(131		)	(59		)
Total non-interest income	117,956			112,602			115,659			112,252			113,449
Non-interest expense:
Compensation and employee benefits	118,093			124,473			109,061			116,708			116,159
Occupancy and equipment	36,884			37,008			37,824			34,159			36,152
FDIC insurance	3,751			4,113			5,173			4,832			4,864
Advertising and marketing	5,678			5,887			5,316			5,793			5,150
Other	49,987			43,348			46,441			45,750			45,887
Subtotal	214,393			214,829			203,815			207,242			208,212
Operating lease depreciation	9,842			9,573			13,608			9,485			8,582
Foreclosed real estate and repossessed assets, net	3,135			3,920			4,940			5,680			6,377
Other credit costs, net	(54		)	12			224			(123		)	(62		)
Total non-interest expense	227,316			228,334			222,587			222,284			223,109
Income before income tax expense	90,374			77,084			81,134			85,220			83,841
Income tax expense	29,706			26,803			26,614			30,528			28,902
Income after income tax expense	60,668			50,281			54,520			54,692			54,939
Income attributable to non-controlling interest	2,974			2,235			2,028			2,117			2,684
Net income attributable to TCF Financial Corporation	57,694			48,046			52,492			52,575			52,255
Preferred stock dividends	4,847			4,847			4,847			4,847			4,847
Net income available to common stockholders	$	52,847		$	43,199		$	47,645		$	47,728		$	47,408

Net income per common share:
Basic	$	0.32		$	0.26		$	0.29		$	0.29		$	0.29
Diluted	0.31			0.26			0.29			0.29			0.29

Dividends declared per common share	$	0.075		$	0.075		$	0.075		$	0.05		$	0.05

Financial highlights:
Pre-tax pre-provision profit⁽¹⁾	$	103,624		$	95,926		$	98,741		$	95,238		$	96,369
Return on average assets⁽²⁾	1.14		%	0.96		%	1.08		%	1.10		%	1.11		%
Return on average common equity⁽²⁾	10.09			8.45			9.53			9.76			9.93
Net interest margin⁽²⁾	4.35			4.37			4.35			4.40			4.44


(1)	Pre-tax pre-provision profit is calculated as total revenues less non-interest expense.


(2)	Annualized.



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED QUARTERLY AVERAGE BALANCE SHEETS
(In thousands)
(Unaudited)

	Jun. 30, 2016		Mar. 31, 2016		Dec. 31, 2015		Sep. 30, 2015		Jun. 30, 2015
ASSETS:
Investments and other	$	322,477	$	349,079	$	405,252	$	463,312	$	551,630
Securities held to maturity	194,693		199,303		201,944		205,264		209,834
Securities available for sale:⁽¹⁾
Taxable	697,902		640,796		611,816		601,889		566,499
Tax-exempt	481,246		319,427		221,113		92,484		7,420
Loans and leases held for sale	497,797		367,686		180,278		348,215		340,912
Loans and leases:⁽²⁾
Consumer real estate:
Fixed-rate	2,327,409		2,430,773		2,520,567		2,637,875		2,776,177
Variable-rate	2,931,318		3,028,001		3,083,957		2,968,507		2,811,510
Total consumer real estate	5,258,727		5,458,774		5,604,524		5,606,382		5,587,687
Commercial:
Fixed-rate	982,914		1,012,870		1,090,001		1,137,744		1,193,011
Variable- and adjustable-rate	2,127,032		2,145,231		2,027,982		1,980,280		1,955,261
Total commercial	3,109,946		3,158,101		3,117,983		3,118,024		3,148,272
Leasing and equipment finance	4,032,112		3,992,678		3,911,025		3,821,590		3,751,776
Inventory finance	2,564,648		2,433,534		2,180,534		2,036,054		2,292,481
Auto finance	2,751,679		2,703,880		2,514,923		2,361,057		2,211,014
Other	9,585		10,018		9,060		9,833		10,734
Total loans and leases	17,726,697		17,756,985		17,338,049		16,952,940		17,001,964
Total interest-earning assets	19,920,812		19,633,276		18,958,452		18,664,104		18,678,259
Other assets⁽³⁾	1,286,506		1,297,479		1,245,751		1,217,396		1,209,514
Total assets	$	21,207,318	$	20,930,755	$	20,204,203	$	19,881,500	$	19,887,773

LIABILITIES AND EQUITY:
Non-interest-bearing deposits:
Retail	$	1,817,734	$	1,751,710	$	1,639,550	$	1,649,995	$	1,699,668
Small business	861,394		853,645		874,892		852,211		822,683
Commercial and custodial	582,041		560,983		525,692		516,461		497,883
Total non-interest bearing deposits	3,261,169		3,166,338		3,040,134		3,018,667		3,020,234
Interest-bearing deposits:
Checking	2,478,673		2,440,563		2,384,452		2,399,119		2,422,909
Savings	4,677,681		4,700,164		4,721,571		4,860,509		5,033,329
Money market	2,557,897		2,472,751		2,349,127		2,297,893		2,261,567
Certificates of deposit	4,308,367		4,104,951		3,793,653		3,400,282		3,116,718
Total interest-bearing deposits	14,022,618		13,718,429		13,248,803		12,957,803		12,834,523
Total deposits	17,283,787		16,884,767		16,288,937		15,976,470		15,854,757
Borrowings:
Short-term borrowings	9,100		5,562		28,364		30,326		8,246
Long-term borrowings	840,739		1,062,513		1,009,591		1,057,903		1,234,205
Total borrowings	849,839		1,068,075		1,037,955		1,088,229		1,242,451
Total interest-bearing liabilities	14,872,457		14,786,504		14,286,758		14,046,032		14,076,974
Total deposits and borrowings	18,133,626		17,952,842		17,326,892		17,064,699		17,097,208
Other liabilities	690,363		650,908		595,317		578,718		594,352
Total liabilities	18,823,989		18,603,750		17,922,209		17,643,417		17,691,560
Total TCF Financial Corporation stockholders' equity	2,357,509		2,307,781		2,263,018		2,218,614		2,173,699
Non-controlling interest in subsidiaries	25,820		19,224		18,976		19,469		22,514
Total equity	2,383,329		2,327,005		2,281,994		2,238,083		2,196,213
Total liabilities and equity	$	21,207,318	$	20,930,755	$	20,204,203	$	19,881,500	$	19,887,773


(1)	Average balances of securities available for sale are based upon historical amortized cost and exclude equity securities.


(2)	Average balances of loans and leases include non-accrual loans and leases and are presented net of unearned income.


(3)	Includes leased equipment and related initial direct costs under operating leases of $131.9 million, $133.6 million, $123.8 million, $107.5 million and $96.0 million for the second quarter and first quarter of 2016, and for the fourth quarter, third quarter and second quarter of 2015, respectively.



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED QUARTERLY YIELDS AND RATES⁽¹⁾⁽²⁾
(Unaudited)

	Jun. 30, 2016		Mar. 31, 2016		Dec. 31, 2015		Sep. 30, 2015		Jun. 30, 2015
ASSETS:
Investments and other	2.99	%	2.55	%	2.59	%	2.52	%	2.34	%
Securities held to maturity	2.29		2.65		2.64		2.65		2.64
Securities available for sale:⁽³⁾
Taxable	2.21		2.38		2.41		2.43		2.47
Tax-exempt⁽⁴⁾	3.25		3.24		3.26		3.35		3.50
Loans and leases held for sale	8.05		9.30		9.38		9.00		9.15
Loans and leases:
Consumer real estate:
Fixed-rate	5.73		5.82		5.73		5.72		5.73
Variable-rate	5.32		5.32		5.18		5.12		5.13
Total consumer real estate	5.50		5.54		5.43		5.40		5.43
Commercial:
Fixed-rate	4.96		4.94		5.05		5.05		5.03
Variable- and adjustable-rate	4.00		4.00		4.05		3.80		3.85
Total commercial	4.30		4.30		4.40		4.26		4.30
Leasing and equipment finance	4.45		4.47		4.55		4.59		4.66
Inventory finance	5.74		5.68		5.66		5.83		5.61
Auto finance	4.19		4.14		4.17		4.13		4.11
Other	5.77		5.63		6.88		6.31		6.92
Total loans and leases	4.88		4.89		4.89		4.88		4.90

Total interest-earning assets	4.77		4.80		4.76		4.79		4.81

LIABILITIES:
Interest-bearing deposits:
Checking	0.02		0.01		0.02		0.02		0.02
Savings	0.03		0.03		0.04		0.05		0.06
Money market	0.63		0.62		0.62		0.62		0.61
Certificates of deposit	1.07		1.05		1.00		0.93		0.86
Total interest-bearing deposits	0.46		0.44		0.41		0.38		0.35
Total deposits	0.37		0.36		0.34		0.31		0.28
Borrowings:
Short-term borrowings	0.71		0.53		0.09		0.22		0.63
Long-term borrowings	2.43		2.14		2.37		2.27		1.93
Total borrowings	2.42		2.13		2.31		2.21		1.92

Total interest-bearing liabilities	0.57		0.56		0.55		0.52		0.49

Net interest margin	4.35		4.37		4.35		4.40		4.44


(1)	Annualized.


(2)	Yields are presented on a fully tax-equivalent basis.


(3)	Average yields of securities available for sale are based upon historical amortized cost and exclude equity securities.


(4)	The yield on tax-exempt securities available for sale is computed on a tax-equivalent basis using a statutory federal income tax rate of 35% for all periods presented.



TCF FINANCIAL CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES⁽¹⁾
(Dollars in thousands)
(Unaudited)
		At Jun. 30,			At Dec. 31,
		2016			2015
Computation of tangible common equity to tangible assets and tangible book value per common share:
Total equity		$	2,419,758		$	2,306,917
Less: Non-controlling interest in subsidiaries		21,660			16,001
Total TCF Financial Corporation stockholders' equity		2,398,098			2,290,916
Less: Preferred stock		263,240			263,240
Total common stockholders' equity	(a)	2,134,858			2,027,676
Less:
Goodwill		225,640			225,640
Other intangibles		2,394			3,126
Tangible common equity	(b)	$	1,906,824		$	1,798,910

Total assets	(c)	$	21,069,510		$	20,689,609
Less:
Goodwill		225,640			225,640
Other intangibles		2,394			3,126
Tangible assets	(d)	$	20,841,476		$	20,460,843

Common stock shares outstanding	(e)	171,005,952			169,844,464

Common equity to assets	(a) / (c)	10.13		%	9.80		%
Tangible common equity to tangible assets	(b) / (d)	9.15		%	8.79		%

Book value per common share	(a) / (e)	$	12.48		$	11.94
Tangible book value per common share	(b) / (e)	$	11.15		$	10.59



		Three Months Ended									Six Months Ended
		Jun. 30,			Mar. 31,			Jun. 30,			Jun. 30,			Jun. 30,
		2016			2016			2015			2016			2015
Computation of return on average tangible common equity:
Net income available to common stockholders	(f)	$	52,847		$	43,199		$	47,408		$	96,046		$	82,362
Plus: Other intangibles amortization		366			366			389			732			778
Less: Income tax expense attributable to other intangibles amortization		129			131			143			258			287
Adjusted net income available to common stockholders	(g)	$	53,084		$	43,434		$	47,654		$	96,520		$	82,853

Average balances:
Total equity		$	2,383,329		$	2,327,005		$	2,196,213		$	2,355,167		$	2,173,661
Less: Non-controlling interest in subsidiaries		25,820			19,224			22,514			22,522			19,810
Total TCF Financial Corporation stockholders' equity		2,357,509			2,307,781			2,173,699			2,332,645			2,153,851
Less: Preferred stock		263,240			263,240			263,240			263,240			263,240
Average total common stockholders' equity	(h)	2,094,269			2,044,541			1,910,459			2,069,405			1,890,611
Less:
Goodwill		225,640			225,640			225,640			225,640			225,640
Other intangibles		2,596			2,966			4,110			2,781			4,291
Average tangible common equity	(i)	$	1,866,033		$	1,815,935		$	1,680,709		$	1,840,984		$	1,660,680

Return on average common equity⁽²⁾	(f) / (h)	10.09		%	8.45		%	9.93		%	9.28		%	8.71		%
Return on average tangible common equity⁽²⁾	(g) / (i)	11.38		%	9.57		%	11.34		%	10.49		%	9.98		%

(1)

When evaluating capital adequacy and utilization, management considers financial measures such as tangible common equity to tangible assets, tangible book value per common share and return on average tangible common equity. These measures are non-GAAP financial measures and are viewed by management as useful indicators of capital levels available to withstand unexpected market or economic conditions and also provide investors, regulators and other users with information to be viewed in relation to other banking institutions.


(2)	Annualized.

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TCF FINANCIAL CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - July 22, 2016

Attached files

TCF FINANCIAL CORP Reports