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TCF Reports Fourth Quarter 2020 Results

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TCF Financial Corporation (NASDAQ: TCF):

Fourth Quarter 2020 Highlights

  • Quarterly net income of $91.4 million, or $0.58 per diluted share, up 63.9% from the third quarter of 2020
  • Adjusted diluted earnings per common share of $0.75(1), up 19.0% from the third quarter of 2020. Adjusted diluted earnings per common share excludes $24.7 million, or $0.17 per share, after-tax impact of merger-related expenses and notable items
  • Loan and lease balances grew 0.4% from September 30, 2020. Loan and lease balances, excluding PPP loans, grew 1.2% from September 30, 2020
  • Net charge-offs of $11.6 million, or 0.14% of average loans and leases (annualized)
  • Provision for credit losses of $11.8 million, down 83.0% from the third quarter of 2020
  • Allowance for credit losses, which includes the reserve for unfunded lending commitments, of 1.59% of total loans and leases, compared to 1.60% at September 30, 2020
  • Nonaccrual loans and leases of $677.3 million, up $300.6 million, or 79.8%, from September 30, 2020
  • Efficiency ratio of 74.53%, improved 76 basis points from the third quarter of 2020. Adjusted efficiency ratio of 64.80%(1), up 363 basis points from the third quarter of 2020
  • Common equity Tier 1 capital ratio of 11.45%, compared to 11.45% at September 30, 2020
  • On December 13, 2020, announced merger with Huntington Bancshares Incorporated ("Huntington"), which is expected to close in the second quarter of 2021

Merger-related Expenses and Notable items in the Fourth Quarter of 2020 and Third Quarter of 2020(1)

  • Pre-tax merger-related expenses of $31.5 million, $24.4 million net of tax, or $0.17 per diluted common share for the fourth quarter of 2020, compared to pre-tax merger-related expenses of $54.0 million, $42.8 million net of tax, or $0.28 per diluted common share for the third quarter of 2020
  • Pre-tax expenses of $357 thousand, $276 thousand net of tax, related to notable items for the fourth quarter of 2020, compared to pre-tax expenses of $154 thousand, $122 thousand net of tax, related to notable items for the third quarter of 2020, see summary of notable items adjustments below

(1)

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

Summary of Financial Results

 

 

 

 

 

 

 

 

 

 

 

 

 

At or For the Quarter Ended

 

Change From

 

Dec. 31,

 

Sep. 30,

 

Jun. 30,

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

Dec. 31,

(Dollars in thousands, except per share data)

2020

 

2020

 

2020

 

2020

 

2019

 

2020

2019

Financial Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to TCF

$

91,358

 

 

$

55,738

 

 

$

23,764

 

 

$

51,899

 

 

$

112,399

 

 

63.9

 

%

(18.7)

 

%

Net interest income

381,394

 

 

377,167

 

 

378,359

 

 

401,481

 

 

408,753

 

 

1.1

 

 

(6.7)

 

 

Basic earnings per common share

$

0.58

 

 

$

0.35

 

 

$

0.14

 

 

$

0.33

 

 

$

0.72

 

 

65.7

 

 

(19.4)

 

 

Diluted earnings per common share

0.58

 

 

0.35

 

 

0.14

 

 

0.32

 

 

0.72

 

 

65.7

 

 

(19.4)

 

 

Return on average assets ("ROAA")(1)

0.78

%

 

0.46

%

 

0.21

%

 

0.46

%

 

0.99

%

 

32

 

bps

(21)

 

bps

ROACE(1)

6.44

 

 

3.87

 

 

1.56

 

 

3.64

 

 

8.00

 

 

257

 

 

(156)

 

 

ROATCE (non-GAAP)(1)(2)

9.18

 

 

5.71

 

 

2.57

 

 

5.42

 

 

11.35

 

 

347

 

 

(217)

 

 

Net interest margin

3.53

 

 

3.31

 

 

3.33

 

 

3.73

 

 

3.86

 

 

22

 

 

(33)

 

 

Net interest margin (FTE)(1)(2)

3.55

 

 

3.34

 

 

3.35

 

 

3.76

 

 

3.89

 

 

21

 

 

(34)

 

 

Net charge-offs as a percentage of average loans and leases(1)

0.14

 

 

0.28

 

 

0.04

 

 

0.06

 

 

0.07

 

 

(14)

 

 

7

 

 

Nonperforming assets as a percentage of total loans and leases and other real estate owned(3)

2.06

 

 

1.20

 

 

0.94

 

 

0.80

 

 

0.59

 

 

86

 

 

147

 

 

Efficiency ratio

74.53

 

 

75.29

 

 

78.26

 

 

69.57

 

 

73.49

 

 

(76)

 

 

104

 

 

Adjusted Financial Results (non-GAAP)

 

 

 

 

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About TCF

TCF Financial Corporation is a Detroit, Michigan-based financial holding company with $48 billionin total assets at Sept. 30, 2020 and a top 10 deposit market share in the Midwest. TCF's primary banking subsidiary, TCF National Bank, is a premier Midwest bank offering consumer and commercial banking, trust and wealth management, and specialty leasing and lending products and services to consumers, small businesses and commercial clients. TCF has approximately 475 branches primarily located in Michigan, Illinoisand Minnesotawith additional locations in Colorado, Ohio, South Dakotaand Wisconsin. TCF also conducts business across all 50 states and Canadathrough its specialty lending and leasing businesses.