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8-K - 8-K - TCF FINANCIAL CORP | tcffinancial63017form8-kin.htm |
2017 Second Quarter Investor Presentation
Exhibit 99.1
Cautionary Statements for Purposes of the Safe
Harbor Provisions of the Securities Litigation
Reform Act
Any statements contained in this presentation regarding the outlook for the Company's businesses and their respective markets, such as projections of
future performance, targets, 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,
2016 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 ("CFPB") 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, or new restrictions on loan and lease
products; changes affecting customer account charges and fee income, including changes to interchange rates; (continued)
2
Cautionary Statements for Purposes of the Safe
Harbor Provisions of the Securities Litigation
Reform Act (cont.)
regulatory actions or changes in customer opt-in preferences with respect to overdrafts, which may have an adverse impact on TCF; governmental regulations
or judicial actions affecting the security interests of creditors; deficiencies in TCF's compliance programs, including under the Bank Secrecy Act in past or
future periods, which may result in regulatory enforcement action including monetary penalties; increased health care costs including those resulting from
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 including those 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 either of the primary 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 expanding existing business relationships; failure to expand or diversify TCF's balance sheet through new or expanded programs
or opportunities; 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,
such as by failing to develop and maintain technology necessary to satisfy customer demands, costs and possible disruptions related to upgrading systems;
the failure to attract and retain key employees.
Litigation Risks. Results of litigation or government enforcement actions such as TCF's pending litigation with the CFPB and related matters, 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; 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.
3
Who We Are – A Unique Regional Bank
LENDING
• Well-diversified portfolio by asset class,
geography, industry, loan and lease size
and collateral type
• Expertise in diverse lending businesses
• Proven loan and lease origination
platform allows for optimization of growth
and revenue
FUNDING
• Loan and lease growth funded primarily
by low cost, core deposit base
• High concentration of retail deposits that
provide a competitive pricing advantage
as rates have increased
• Convenience banking model based on
branch locations, hours of operation,
ATMs and digital channels
4
PROFITABILITY
• Strong growth in net interest income and net interest margin primarily due to our asset
sensitive balance sheet and continued pricing discipline as interest rates have increased
• Earnings predictability with reduced gains on sales revenue replaced with more
consistent interest income
• Stable credit quality performance due to execution of our diversification philosophy
Diversification – Focus on national versus footprint lending
increases quality and diversification of portfolio
Profitable Growth – Strong origination and loan sale capabilities
drive loan growth and revenue diversification with a continued high
net interest margin
Operating Leverage – Focus on improving operating leverage
following recent build-out of key functions
Core Funding – Maintain sufficient funding sources to support loan
and lease growth
Strategic Pillars
1
2
3
4
Execution under a strong enterprise risk management
and credit culture
5
Consumer real estate &
other (first mortgage lien)
Consumer real
estate (junior lien)
Auto finance
Leasing & equipment finance
Commercial
Inventory finance
Securities & other
Corporate Profile
Savings
28%
Money market
12%
Checking
35%
Certificates of
deposit 25%
• $22.1 billion national bank holding
company headquartered in Minnesota
• 46th largest publicly-traded U.S.
based bank holding company by
asset size1
• 321 bank branches in seven states
• Approximately 143,400 small business
banking relationships:
• 66,200 checking accounts
• 77,200 lending relationships
• Average loan and lease portfolio makes
up 84% of average total assets
• Common equity ratio of 10.26%
• Book value per common share of $13.20
• Return on average common equity of
8.82%2
($ millions)
1 Source: SNL Financial (March 31, 2017)
2 YTD annualized
3 Annualized and presented on a fully tax equivalent basis
($ millions)
At June 30, 2017
2Q17 Yield
of 4.94%3
2Q17 Rate
of 0.33%3
$4,824
$6,147
$2,129
$4,419
$2,089
$3,489
$4,334
$3,243
$2,702 $2,509
$1,982
A WELL-DIVERSIFIED EARNING ASSET PORTFOLIO…
…FUNDED BY A LOW COST DEPOSIT BASE
10% 10%
13%
16%
21%
17%
13%
6
Well Positioned vs. Peers
1 Annualized
2 All U.S. publicly-traded banks and thrifts, excluding TCF, with total assets between $10 and $50 billion (source: SNL Financial)
3 Excluding non-recurring items for revenue
4 Presented on a fully tax-equivalent basis
5 Peer Group yield includes loans and leases held for sale, while TCF yield excludes loans and leases held for sale
6 Estimated based on consolidated bank level deposit data
5
TCF
2Q171
Peer Group
1Q17
Average1,2,3 TCF BUSINESS MODEL ATTRIBUTES
Revenue as a % of
average assets 6.29% 4.17%
• Exceptional revenue generation capabilities through diverse revenue
streams
• Emphasis on generating profitable growth
Yield on loans and
leases4,5 5.15% 4.40%
• Asset sensitivity and continued pricing discipline resulting in strong
yield performance
Average loans and
leases as a % of
average assets
84% 68%
• Unique mix of loan and lease businesses provides ample and flexible
origination capabilities
• Organic loan and lease growth opportunities can be achieved while
maintaining discipline on price, structure and credit quality
Insured deposits as
a % of total
deposits6
93% 62%
• Relative value of retail deposits increasing as short-term rates rise
• Preferred deposit composition primarily made up of retail deposits
which have the highest liquidity value
Net charge-offs (%) 0.28% 0.18%
• Total levels of net charge-offs remain in the low end of the expected
range
• Stable credit quality driven by execution of diversification model
7
Investments and other 1%
Consumer real estate &
other (first mortgage lien)
11%
Consumer
real estate
(junior lien)
16%
Auto
finance
16%Leasing &equipment
finance 19%
Commercial
15%
Inventory
finance 17%
Loans and leases held for sale 1%
Securities 4%
Other 3%
Fees and
service
charges 29%
ATM
revenue
4%
Card
revenue
12%
Leasing &
equipment
finance 35%
Gains on sales of loans, net 8%
Servicing fee income 9%
NIM up 17 bps YoY
350
300
250
200
150
100
50
0
5.25%
5.00%
4.75%
4.50%
4.25%
4.00%
2Q16 3Q16 4Q16 1Q17 2Q17
$118
$331
$120
$332
$116
$327
$104
$326
$115
$342
4.35% 4.34% 4.30%
4.46% 4.52%
Net Interest Margin1
2Q17 vs. 2Q16 revenue and net interest margin
impacted by the following 2Q17 items:
• Higher net interest income driven by the non-
auto finance portfolios through a combination
of higher variable- and adjustable-rate yields
and loan and lease growth
• Reduction in gains on sales of auto finance
loans largely offset by higher levels of leasing
and equipment finance non-interest income
1 Annualized
2 Includes gains on sales of consumer real estate loans and auto finance loans. Gains on sales of auto finance loans, net, was less than 1% of non-interest income.
Revenue Summary
REVENUE DIVERSIFICATION
$249 million
Non-interest Income
Interest Income
($ millions)
$213 $212 $211 $222 $227
Non-interest Income
Net Interest Income
$115 million
Strategic Pillars
Diversification 1
Profitable Growth 2
8
2
3,000
2,250
1,500
750
0
6/16 9/16 12/16 3/17 6/17
$2,813 $2,732 $2,648 $2,780
$3,243
$151
$2,964
$154
$2,886
$254
$2,902 $372
$3,152 $3,265
Loans Held for Sale
Loans Held for Investment8.00%
6.00%
4.00%
2.00%
4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
4.17% 4.14% 4.19% 4.06% 4.04% 4.15% 5.01%
NET CHARGE-OFF RATIO2
1 Annualized and presented on a fully tax-equivalent basis
2 Annualized
3 Excludes non-accrual loans
4 Includes loans held for sale of $22 million
($ millions)
Auto Finance Strategy
Progressing as Planned
0.30%
0.20%
0.10%
0.00%
4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
0.14% 0.09% 0.13%
0.20% 0.23%
0.13%
0.20%
1.20%
0.80%
0.40%
0.00%
4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
0.75% 0.81% 0.69%
0.86%
1.09% 1.12%
0.83%
9
60+ DAY DELINQUENCIES3
Originations $904 $881 $860 $863 $525
HELD FOR INVESTMENT LOAN YIELD1 AUTO FINANCE BALANCES
• Reclassified approximately $345 million of auto
loans from held for sale to held for investment
in the second quarter
• Year-over-year auto finance originations down
$379 million, or 42.0%
4
• Compensation and employee
benefits expense decreased
year-over-year primarily due to
reduced headcount in auto
finance
• Other non-interest expense
increased year-over-year
primarily due to higher
professional fees related to
strategic investments in
technology capabilities, as well
as advertising and marketing
expenses
• Efficiency ratio down 50 bps
year-over-year
1 Includes Occupancy & Equipment, Other Non-interest Expense, Foreclosed Real Estate & Repossessed Assets and Other Credit Costs
Non-interest Expense
250
200
150
100
50
0
2Q16 3Q16 4Q16 1Q17 2Q17
$118 $117 $115 $124 $116
$99 $102 $99
$109
$105
$10
$227
$10
$229
$11
$225 $11
$244
$12
$233
Compensation & Employee Benefits
Foreclosed Real Estate and Other Credit Cost
Compensation & Employee Benefits
350
300
250
200
150
100
50
0
$
(M
ill
io
ns
)
6/14 9/14 12/14 3/15 6/15
($ millions)
Operating Lease Depreciation
Other 1
Compensation & Employee Benefits
Efficiency
Ratio: 68.69% 69.00% 68.89% 74.93% 68.19%
Strategic Pillars
Profitable Growth 2
Operating Leverage 3
10
43%
20%
37%
2Q17 AVERAGE EARNING ASSETS 2Q17 AVERAGE DEPOSITS
$17.3 billion
2017
2016
4.60%
4.55%
4.50%
4.45%
4.40%
4.35%
4.30%
4.25%
1Q 2Q 3Q 4Q
4.46%
4.52%
4.37% 4.35% 4.34%
4.30%
40%
42%
18%
Positive Impact of Rising
Interest Rates
• 82% of assets are variable-
and adjustable-rate or short/
medium duration fixed-rate
• 63% of deposits are low or
no interest cost with an
average cost of one basis
point for 2Q17
• Net interest margin increase
of 17 basis points year-over-
year impacted by balance
sheet asset sensitivity
Variable- and Adjustable-rate1
Fixed-rate - Short/Medium Duration2
Fixed-rate - Long Duration3
Low Interest Cost
No Interest Cost
Other
Strategic Pillars
Diversification 1
Profitable Growth 2
$20.4 billion
1 Includes Inventory Finance, Commercial, Consumer Real Estate and Investments
2 Includes Commercial, Leasing and Auto Finance
3 Includes Securities and Consumer Real Estate
NET INTEREST MARGIN
FY16: 4.34%
YTD 2Q17: 4.49%
11
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2Q16 3Q16 4Q16 1Q17 2Q17
$17,284 $17,148 $17,069 $17,106 $17,323 • Relative value of retail deposits
increasing as short-term interest
rates rise
• 90% of average deposit balances
are consumer
• Average checking balances
increased 5.0% year-over-year
• Average interest rate on deposits
decreased year-over-year
• 86% of period-end certificates of
deposit are less than $250,000
0.37% 0.37% 0.35% 0.33% 0.33%
Average
interest cost:
Deposit Generation
Average Balances
($ millions)
Certificates of Deposit
Money Market
Savings
Checking
Strategic Pillars
Profitable Growth 2
Core Funding 4
25%
15%
27%
33%
25%
15%
27%
33%
25%
14%
27%
34%
24%
14%
28%
34%
24%
13%
28%
35%
12
PROVISION FOR CREDIT LOSSES
30
20
10
0
2Q16 3Q16 4Q16 1Q17 2Q17
$13 $14
$20
$12
$19
1 Excludes non-accrual loans and leases
2 Annualized
3 Excluding the $8.7 million recovery from the consumer real estate non-accrual loan sale, net charge-offs were $14 million and the net charge-off ratio was 0.31%
($ millions)
Credit Quality Trends
0.15%
0.12%
0.09%
0.06%
0.03%
0.00%
6/16 9/16 12/16 3/17 6/17
0.12% 0.12% 0.12%
0.09%
0.11%
400
300
200
100
0
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
6/16 9/16 12/16 3/17 6/17
$232 $228
$171 $158
1.33% 1.28% 1.28% 0.95% 0.86%
($ millions)
60+ DAY DELINQUENCIES1
NET CHARGE-OFFSNON-PERFORMING ASSETS
Other Real Estate Owned
Non-accrual Loans & Leases
NPAs/Loans & Leases and Other Real Estate Owned
Strategic Pillar
Diversification 1
$224
15
12
9
6
3
0
1.50%
1.20%
0.90%
0.60%
0.30%
0.00%
2Q16 3Q16 4Q16 1Q17 2Q17
$10 $11
$12
$5
$13
0.23% 0.26% 0.27%
0.11%
0.28%
3
Net Charge-offs
Net Charge-off Ratio2
13
($ millions)
Quarter Ended1
Change from
Quarter Ended
Jun. 30, 2016 Sep. 30, 2016 Dec. 31, 2016 Mar. 31, 2017 Jun. 30, 2017 Jun. 30, 2016
Consumer:
Consumer Real Estate:
First Mortgage Lien 0.35% 0.34% 0.26% (0.18)% 0.15% (20) bps
Junior Lien 0.05 0.04 0.08 (0.89) 0.05 —
Total Consumer Real Estate 0.19 0.17 0.17 (0.58) 0.09 (10)
Auto Finance 0.69 0.86 1.09 1.12 0.83 14
Consumer 3 0.39 0.47 0.53 0.05 0.42 3
Wholesale:
Commercial 0.08 (0.01) 0.01 0.32 0.29 21
Leasing & Equipment Finance 0.11 0.18 0.10 0.13 0.14 3
Inventory Finance 0.09 0.10 0.07 0.01 0.09 —
Wholesale 0.10 0.10 0.06 0.16 0.18 8
Total 3 0.23 0.26 0.27 0.11 0.28 5
1 Annualized
2 Excluding the $8.7 million recovery from the consumer real estate non-accrual loan sale, consumer net charge-off ratio was 0.49% and total
net charge-off ratio was 0.31%
3 Includes Other
Net Charge-off Ratio
Strategic Pillar
Diversification 1
14
2
Total levels of net charge-offs remain in the low end of the expected range
6/16 9/16 12/16 3/17 6/17
$17,472 $17,384 $17,844
$17,975 $18,367
14%
18%
24%
15%
16%
13%
13%
18%
24%
16%
15%
14%
16%
19%
24%
15%
14%
12%
• Year-over-year loan and lease
growth in wholesale businesses:
• Commercial up 12.7%
• Inventory Finance up 7.5%
• Leasing & Equipment Finance
up 5.2%
• Auto Finance up approximately
4% year-over-year, excluding the
reclassification of loans from held
for sale to held for investment in
the second quarter of
approximately $345 million
• Strong loan and lease
diversification by asset class,
geography, rate, average loan and
lease size, estimated weighted
average life and collateral type
• Proven loan and lease origination
platform allows for optimization of
growth and revenue
56%
Wholesale
44%
Consumer
Loan and Lease Portfolio
($ millions)
13%
18%
24%
16%
15%
14%
Inventory Finance
Leasing & Equipment Finance
Commercial
Auto Finance
Consumer Real Estate - Junior Lien
Consumer Real Estate & Other - First Mortgage Lien
$17,385
14%
19%
23%
18%
15%
11%
Strategic Pillar
Diversification 1
Loan and lease growth of
5.1% YoY
15
2Q16 3Q16 4Q16 1Q17 2Q17
Consumer Real Estate:
First Mortgage Lien 5.34% 5.35% 5.22% 5.33% 5.35%
Junior Lien 5.64 5.60 5.64 5.82 6.01
Commercial 4.30 4.22 4.25 4.43 4.50
Leasing & Equipment Finance 4.45 4.48 4.43 4.48 4.48
Inventory Finance 5.74 6.07 5.80 5.93 6.22
Auto Finance 4.19 4.06 4.04 4.15 5.01
Total Loans and Leases 4.88 4.88 4.82 4.95 5.15
Peer Group2 Average 4.40 4.38 4.40 4.40 N.A.
BALANCE SHEET ASSET SENSITIVITY, CONTINUED PRICING
DISCIPLINE AND AUTO FINANCE SHIFT RESULTING IN STRONG
YIELD PERFORMANCE
1 Annualized and presented on a fully tax-equivalent basis
2 All U.S. publicly-traded banks and thrifts, excluding TCF, with total assets between $10 and $50 billion as of March 31, 2017 that have
reported loan and lease yields for the past four quarters, includes loans held for sale (source: SNL Financial)
N.A. Not Available
Loan and Lease Yields1
Strategic Pillars
Diversification 1
Profitable Growth 2
16
6,000
4,000
2,000
0
12/13 12/14 12/15 12/16 6/17
$1,319 $2,044
$2,794 $2,902 $3,265
$1,104
$2,423 $1,785
$3,829 $2,187
$4,981
$3,079
$5,981
$2,459
$5,724
Auto Finance At June 30, 2017
• Transitioned from business with a reliance on gains on
sales revenue to an 'originate-to-hold' model
• Reclassified approximately $345 million of auto finance
loans from held for sale to held for investment
• More than 6,500 active dealer relationships
• Experienced management team
Auto Finance
$3.2 billion
(18% of total loans
and leases)
• 5.01% quarterly average yield1
• Over 60-days delinquency rate of 0.20%2
• Net charge-off (%): 2015 2016 YTD 2Q173
0.68% 0.86% 0.96%
• Average held for investment portfolio FICO score of 716 at
origination
($ millions)
Used Auto
79%
New Auto
21%
YTD Originations $1,947 $2,796 $3,156 $3,560 $1,388
# of employees 623 797 966 993 769
Serviced for Others Portfolio
Portfolio Loans and HFS
1 Annualized and presented on a fully tax-equivalent basis
2 Excludes non-accrual loans
3 YTD Annualized
17
First
Mortgage
Liens 43%
Junior
Liens
57%
8,000
6,000
4,000
2,000
0
12/13 12/14 12/15 12/16 6/17
$3,766 $3,143 $2,636 $2,299 $2,076
$2,573
$2,543 $2,839 $2,798 $2,846
$625
$6,964
$1,401
$7,087
$1,816
$7,291
$2,316
$7,413
$2,455
$7,377
• 40% fixed-rate, 60% variable- and adjustable-rate
• Average FICO score of the consumer real estate
portfolio: at origination – 736; updated 2Q17 – 735
• Sold $273.4 million of consumer real estate loans in
2Q17 resulting in a gain of $8.9 million1
• Loan servicing fees of $1.7 million in 2Q17
• $455.3 million in junior lien HELOCs with interest-only
revolving draws and no defined amortization period,
17% mature prior to 2021
Consumer
Real Estate
$4.8 billion
(Junior liens and
First mortgage
liens are 15% and
11% of total loans
and leases,
respectively)
($ millions)
Consumer Real Estate At June 30, 2017
Total Portfolio
Loans and HFS $6,339 $5,686 $5,475 $5,097 $4,922
YTD Originations $1,676 $1,770 $2,437 $2,588 $1,137
First Mortgage Liens (Portfolio Loans and HFS)
Junior Liens (Portfolio Loans and HFS)
Serviced for Others Portfolio
• Quarterly average yields:2 5.65% fixed-rate, 5.76%
variable- and adjustable-rate
• Variable- and adjustable-rate yields up 44 bps
from 2Q16
• Over 60-days delinquency rate of 0.16%3
• Net charge-off (%): 2015 2016 YTD 2Q174, 5
0.47% 0.22% (0.25)%
1 Excludes subsequent adjustments and valuation adjustments while held for sale
2 Annualized and presented on a fully tax-equivalent basis
3 Excludes non-accrual loans
4 YTD annualized
5 Excluding the $8.7 million recovery from the consumer real estate
non-accrual loan sale in the first quarter of 2017, the net charge-off
ratio was 0.10%. 18
Multi-Family
Housing 26%
Health Care
Facilities
10%
Office
Buildings
10%
Industrial
Buildings
11%
Business
22%
Other
21%
3,500
3,000
2,500
2,000
12/13 12/14 12/15 12/16 6/17
$3,165 $3,205 $3,225
$3,398
($ millions)
• 28% fixed-rate, 72% variable- and adjustable-
rate
• CRE location mix: 75% located in TCF banking
markets, 25% outside (following strong, proven
sponsors)
• Continue to look for strategic expansion
opportunities that fit TCF's profile
Commercial
$3.5 billion
(19% of total
loans and
leases)
Commercial At June 30, 2017
YTD Originations $1,558 $1,596 $1,875 $1,883 $882
Portfolio Loans
Serviced for Others
$3,204
$3,607
1 Annualized and presented on a fully tax-equivalent basis
2 Excludes non-accrual loans
3 YTD Annualized
• Quarterly average yields:1 4.62% fixed rate, 4.45%
variable- and adjustable-rate
• Variable- and adjustable-rate yields up 45 bps
from 2Q16
• No loans over 60 days delinquent2
• Net charge-off (%): 2015 2016 YTD 2Q173
0.05% 0.01% 0.31%
• Loans with classified risk ratings have remained low
at 1.5% in 2Q17
19
Leasing &
Equipment Finance
$4.3 billion
(23% of total loans
and leases)
Leasing & Equipment Finance At June 30, 2017
5,000
4,000
3,000
2,000
1,000
0
12/13 12/14 12/15 12/16 6/17
$3,678
$3,994
$4,290
$4,636 $4,739
Specialty
Vehicles
30%
Manufacturing
7%
Medical
8%
Construction
11%
Golf Cart & Turf
10%
Technology &
Data Processing
7%
Furniture &
Fixtures 9%
Other
18%
Portfolio Loans and Leases
($ millions)
1 Includes operating leases
2 Source: The Monitor, 2016 Monitor Bank 50
3 Source: The Monitor, 2016 Monitor 100
• 15th largest bank-affiliated leasing company2 and
30th largest equipment finance/leasing company3
in the U.S.
• Uninstalled backlog of $508.8 million, up from
$453.6 million at December 31, 2016
• Focus on financing business-essential equipment
• Experienced management team
• 4.48% quarterly average yield4
• Over 60-days delinquency rate of 0.14%5
• Net charge-off (%): 2015 2016 YTD 2Q176
0.13% 0.13% 0.14%
• 2Q17 fee revenue of $40.0 million, 35% of TCF total
fees and other revenue
4 Annualized and presented on a fully tax-equivalent basis
5 Excludes non-accrual loans and leases
6 YTD Annualized
1
Serviced for Others
YTD
Originations1 $1,730 $1,874 $1,969 $2,137 $943
$3,679
20
($ millions)
1 Annualized and presented on a fully tax-equivalent basis
2 Excludes non-accrual loans
3 YTD Annualized
3,000
2,500
2,000
1,500
1,000
500
0
6/13 6/14 6/15 6/16 6/17
$1,764
$1,927
$2,149
$2,370
$2,542
Powersports
41%
Lawn &
Garden
28%
Other
31%
• Quarterly average yield of 6.22%1, up 48 bps from
2Q16
• Over 60-day delinquency rate of 0.01% 2
• Net charge-off (%): 2015 2016 YTD 2Q173
0.07% 0.07% 0.05%
• Credit risk spread across more than 10,700 active
dealers
• High yielding, high return business with a high
barrier to entry and strong credit performance
• Operates in the U.S. and Canada
• 100% variable-rate receivables
• High loan yields driven by the high operating
costs of the business, not increased credit risk
• Experienced management team
Inventory
Finance
$2.5 billion
(14% of total
loans and
leases)
YTD Originations $2,702 $2,845 $3,023 $3,464 $3,711
Serviced for Others
Portfolio Loans
Inventory Finance At June 30, 2017
21
4Q16 2Q17
Common equity Tier 1 capital ratio1 10.24% 10.24%
Tier 1 risk-based capital ratio1 11.68% 11.66%
Total risk-based capital ratio1 13.69% 13.49%
Tier 1 leverage ratio1 10.73% 10.76%
Common equity ratio 10.09% 10.26%
Tangible common equity ratio2 9.13% 9.24%
Book value per common share $ 12.66 $ 13.20
Tangible book value per common
share2 $ 11.33 $ 11.74
Return on average common equity3 8.40% 9.96%
Return on average tangible common
equity3, 4 9.43% 11.15%
• Maintained strong capital
ratios with earnings
accumulation
• Common stock dividend
of 7.5 cents per share
declared on July 19, 2017
• Generating profitable
growth is a capital priority
Capital and Return
1 The regulatory capital ratios for 2Q17 are preliminary pending completion and filing of the Company’s regulatory reports
2 See “Reconciliation of GAAP to Non-GAAP Financial Measures – Tangible Common Equity Ratio and Tangible Book Value Per Common Share” slide
3 Annualized
4 See “Reconciliation of GAAP to Non-GAAP Financial Measures – Return on Average Tangible Common Equity” slide
22
Strategic Pillar Summary
STRATEGIC PILLARS 2017 OUTLOOK
DIVERSIFICATION
• Continue stable credit quality driven by diversification
philosophy
• Origination opportunities in multiple asset classes
provide flexibility to adjust asset composition based
on market conditions
PROFITABLE GROWTH
• Increase earnings predictability with reduction in
gains on sales replaced with more consistent interest
income driven by continued pricing discipline
• Balance sheet composition provides a competitive
advantage in the current rising rate environment
OPERATING LEVERAGE
• Expense growth related to strategic investments in
technology capabilities, including enhancing digital
channels and other efficiency initiatives
• Remain focused on revenue growth exceeding
expense growth
CORE FUNDING
• Retail deposits provide a competitive pricing
advantage in a rising rate environment
• Investments in the retail bank help drive core deposit
growth
1
2
3
4
23
Appendix
TCF MAINTAINS A WELL-DIVERSIFIED LOAN AND LEASE PORTFOLIO
Business Unit Consumer Commercial
Leasing & Equipment
Finance Inventory Finance Auto Finance
Type /
Segment
Consumer real
estate
Multi-family housing
Business
Specialty vehicles
Construction
Powersports
Lawn & Garden
On balance sheet
portfolio:
Health care facilities Golf cart & Turf Other 79% used
Industrial buildings Furniture & Fixtures 21% new
Office buildings Medical
Other Technology & Data
processing
Manufacturing
Other
Geography Local1
National
Local1 National National
Canada
National
Rate Variable- and
adjustable-rate
Fixed-rate
Variable- and
adjustable-rate
Fixed-rate
Fixed-rate Variable-rate Fixed-rate
Average Loan &
Lease Size
First Mortgage
Liens:
$3.2 million $75,000 $233,000 $15,000$99,000
Junior Liens:
$47,000
Estimated
Weighted
Average Life2 52 months 23 months 21 months 4 months 20 months
Collateral Real estate Real estate
Other non-real estate
assets
Equipment Inventory Vehicle
Loan and Lease Diversification
1 TCF’s branch footprint (IL, MN, MI, CO, WI, AZ, SD)
2 As of June 30, 2017; estimated weighted average life represents how many months it is expected to take to collect half of the outstanding principal
25
Loan and Lease
Geographic Diversification
At June 30, 2017
($ thousands)
Consumer Real
Estate Commercial
Leasing &
Equipment
Finance
Inventory
Finance Auto Finance Other Total
California $ 891,369 $ 171,486 $ 597,320 $ 108,767 $ 509,781 $ 4 $ 2,278,727
Minnesota 1,096,594 723,266 107,770 84,241 52,921 5,598 2,070,390
Illinois 1,063,123 433,804 181,761 68,122 119,732 4,614 1,871,156
Michigan 439,978 520,841 128,755 104,142 56,352 4,103 1,254,171
Texas — 81,052 394,687 165,844 296,918 6 938,507
Florida 131,758 140,428 227,104 132,940 183,332 37 815,599
Wisconsin 204,207 408,953 61,946 85,166 29,088 801 790,161
Colorado 222,170 268,044 80,885 31,589 52,267 3,742 658,697
New York 34,190 25,464 250,026 91,732 172,319 52 573,783
Ohio 7,676 79,701 153,467 100,730 99,741 — 441,315
Pennsylvania 38,428 23,373 152,014 76,455 120,005 69 410,344
Georgia 54,641 56,941 116,630 60,641 113,067 1 401,921
Canada — — 1,225 383,318 — — 384,543
North Carolina 7,270 9,782 160,211 78,083 119,503 2 374,851
Arizona 99,310 24,540 132,634 20,416 94,225 317 371,442
New Jersey 45,570 11,371 160,251 27,471 101,522 2 346,187
Washington 111,584 9,887 68,705 38,707 36,333 7 265,223
Indiana 18,017 56,256 83,293 58,999 44,687 3 261,255
Massachusetts 39,243 17,995 116,484 17,651 69,113 — 260,486
Tennessee 3,945 56,458 76,759 50,706 68,675 — 256,543
Virginia 22,282 2,288 90,983 39,421 88,132 9 243,115
Oregon 79,482 52,134 45,197 35,265 24,895 2 236,975
Other 161,140 314,661 945,628 649,079 790,536 90 2,861,134
Total $ 4,771,977 $ 3,488,725 $ 4,333,735 $ 2,509,485 $ 3,243,144 $ 19,459 $ 18,366,525
26
Reconciliation of GAAP to Non-GAAP Financial
Measures – Tangible Common Equity Ratio and
Tangible Book Value Per Common Share1
At At
Dec. 31, 2016 Jun. 30, 2017
Total equity $ 2,444,645 $ 2,549,831
Less: Non-controlling interest in subsidiaries 17,162 22,766
Total TCF Financial Corporation stockholders' equity 2,427,483 2,527,065
Less: Preferred stock 263,240 263,240
Total common stockholders' equity (a) 2,164,243 2,263,825
Less:
Goodwill 225,640 227,072
Other intangibles 1,738 22,682
Tangible common equity (b) $ 1,936,865 $ 2,014,071
Total assets (c) $ 21,441,326 $ 22,054,651
Less:
Goodwill 225,640 227,072
Other intangibles 1,738 22,682
Tangible assets (d) $ 21,213,948 $ 21,804,897
Common stock shares outstanding (e) 170,991,940 171,489,921
Common equity ratio (a) / (c) 10.09% 10.26%
Tangible common equity ratio (b) / (d) 9.13% 9.24%
Book value per common share (a) / (e) $ 12.66 $ 13.20
Tangible book value per common share (b) / (e) $ 11.33 $ 11.74
1 When evaluating capital adequacy and utilization, management considers financial measures such as the tangible common equity ratio and tangible
book value per common share. 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.
($ thousands, except per share data)
27
Reconciliation of GAAP to Non-GAAP Financial
Measures – Return on Average Tangible Common
Equity1
QTD QTD
Dec. 31, 2016 Jun. 30, 2017
Net income available to common stockholders (a) $ 45,245 $ 55,585
Plus: Other intangibles amortization 290 238
Less: Income tax expense attributable to other intangibles amortization 103 83
Adjusted net income available to common stockholders (b) $ 45,432 $ 55,740
Average balances:
Total equity $ 2,436,136 $ 2,520,870
Less: Non-controlling interest in subsidiaries 18,914 26,188
Total TCF Financial Corporation stockholders' equity 2,417,222 2,494,682
Less: Preferred stock 263,240 263,240
Average total common stockholders' equity (c) 2,153,982 2,231,442
Less:
Goodwill 225,640 225,876
Other intangibles 1,872 5,045
Average tangible common equity (d) $ 1,926,470 $ 2,000,521
Return on average common equity2 (a) / (c) 8.40% 9.96%
Return on average tangible common equity2 (b) / (d) 9.43% 11.15%
($ thousands)
1 When evaluating capital adequacy and utilization, management considers financial measures such as return on average tangible common equity. This
measure is a non-GAAP financial measure and is viewed by management as a useful indicator 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
28