TCF Reports Record Earnings and EPS ($1.86, up 22 percent) and
Announces Quarterly Dividend Increase of 13 percent
2004 YEAR-END HIGHLIGHTS - Record diluted earnings per share of $1.86, up 22
percent
WAYZATA, Minn., Jan. 13 /PRNewswire-FirstCall/ -- TCF Financial Corporation
(TCF) (NYSE:TCB) today reported record results for 2004. Diluted earnings per
share was a record $1.86 for 2004, compared with $1.53 for 2003. Net income for
2004 was a record $255 million, up $39.1 million from 2003. Net income for 2003
included $29.2 million, after-tax, of losses on termination of debt which
reduced 2003 diluted earnings per share by 21 cents. There were no debt
terminations in 2004. For 2004, return on average assets ("ROA") was a record
2.15 percent and return on average common equity ("ROE") was a record 27.02
percent, up from 1.85 percent and 23.05 percent, respectively, for 2003.
Diluted earnings per share was a record 50 cents for the 2004 fourth quarter,
up from 43 cents for the same period in 2003. Net income was a record $67.4
million for the fourth quarter of 2004, up from $59.5 million for the same
period in 2003.
Dividend Increase TCF's board of directors is pleased to announce, for the fourteenth consecutive
year, an increase in the regular quarterly dividend to 21.25 cents per common
share, effective first quarter 2005. This represents a 13 percent increase
over the 2004 quarterly dividend of 18.75 cents per common share. The dividend
is payable on February 28, 2005 to common shareholders of record at the close
of business on February 4, 2005. As of December 31, 2004, TCF had a 10-year
compounded dividend growth rate of 19.6 percent, the fifth highest dividend
growth rate among the 50 largest banks in the country.
Chairman's Statement "TCF's disciplined focus on long-term strategies for growth has produced record
results in 2004 and some of the best performance ratios in the banking
industry," said William A. Cooper, Chairman and CEO. "In 2004, our ROA of 2.15
percent, ROE of 27.02 percent and net charge-offs ratio, which remained at a
low 11 basis points, is evidence that TCF is truly a high performance bank." Total Revenue
Three Months
($ in thousands) Ended December 31, 2004 2003 $ Change % Change Net interest income $126,489 $119,092 $7,397 6.2%
Fees and other revenue:
Fees and service charges 67,536 64,486 3,050 4.7
Card revenue 17,458 12,069 5,389 44.7
ATM revenue 10,326 10,400 (74) (.7)
Investments and insurance
commissions 2,609 3,037 (428) (14.1)
Total banking fees and other
revenue 97,929 89,992 7,937 8.8
Leasing and equipment finance 21,047 15,372 5,675 36.9
Mortgage banking, net (a) (122) 6,573 (6,695) N.M. Other 7,457 2,928 4,529 154.7
Total fees and other revenue 126,311 114,865 11,446 10.0
Gains on sales of securities
available for sale 6,204 - 6,204 100.0
Gains (losses) on termination of
debt - - - -
Total non-interest income 132,515 114,865 17,650 15.4
Total revenue $259,004 $233,957 $25,047 10.7 Net interest margin 4.56% 4.68%
Fees and other revenue as a % of
total revenue 48.77 49.10
Fees and other revenue as a % of
average assets 4.15 4.11 N.M. Not meaningful. (a) See "Mortgage Banking" section below for further discussion of
mortgage banking revenue.
Year Ended
($ in thousands) Ended December 31, 2004 2003 $ Change % Change Net interest income $491,891 $481,145 $10,746 2.2%
Fees and other revenue:
Fees and service charges 271,664 247,456 24,208 9.8
Card revenue 63,312 52,991 10,321 19.5
ATM revenue 42,935 43,623 (688) (1.6)
Investments and insurance
commissions 12,558 13,901 (1,343) (9.7)
Total banking fees and other
revenue 390,469 357,971 32,498 9.1
Leasing and equipment finance 50,323 51,088 (765) (1.5)
Mortgage banking, net (a) 12,960 12,719 241 1.9
Other 14,114 9,014 5,100 56.6
Total fees and other revenue 467,866 430,792 37,074 8.6
Gains on sales of securities
available for sale 22,600 32,832 (10,232) (31.2)
Gains (losses) on termination of
debt - (44,345) 44,345 100.0
Total non-interest income 490,466 419,279 71,187 17.0
Total revenue $982,357 $900,424 $81,933 9.1 Net interest margin 4.54% 4.54%
Fees and other revenue as a % of
total revenue 47.63 47.84
Fees and other revenue as a % of
average assets 3.93 3.70 N.M. Not meaningful. (a) See "Mortgage Banking" section below for further discussion of
mortgage banking revenue.
Net Interest Income
TCF's net interest income in 2004 was $491.9 million, up $10.7 million, or 2
percent, from 2003. Net interest margin in 2004 was 4.54 percent, unchanged
from 2003. The increase in net interest income in 2004 is primarily
attributable to the solid growth in average Power Assets, partially offset by
the reductions in residential real estate loans and mortgage-backed securities
("treasury assets") and mortgage loans held for sale. Average Power Assets
increased $1 billion over 2003, while treasury assets declined $690.3 million
during the same period.
TCF's net interest income in the fourth quarter of 2004 was $126.5 million, up
$7.4 million, or 6 percent, from fourth quarter of 2003 and was up $2 million,
or 2 percent, from the third quarter of 2004. Net interest margin in the
fourth quarter of 2004 was 4.56 percent, compared with 4.68 percent last year
and 4.56 percent in the third quarter of 2004. The increase in net interest
income in the fourth quarter from the fourth quarter of 2003 and the third
quarter of 2004 was primarily driven by increases in average Power Assets
coupled with the favorable impact of the increases in short-term interest rates
partially offset by the reductions in treasury assets and mortgage loans held
for sale.
Interest Rate Risk TCF has positioned its balance sheet to benefit from a rising interest rate
environment. TCF's one-year interest rate gap (the difference between
interest-earning assets and interest-bearing liabilities repricing or maturing
within the next twelve months), assuming no change in interest rates, was a
positive $585 million, or 5 percent of total assets, at December 31, 2004,
compared with a positive $161.3 million, or 1 percent of total assets at
December 31, 2003 and a positive $1.1 billion, or 9 percent of total assets, at
September 30, 2004. The decrease in the one-year interest rate gap during the
fourth quarter of 2004 was primarily due to an increase in treasury assets and
the movement of certain long-term fixed-rate borrowings into the one-year
interest rate gap. The one-year interest rate gap is subject to a number of
assumptions and is only one of a number of interest rate risk measurements and
is best used as a general measure of the effect on net interest income of
rising or falling interest rates.
Non-interest Income Total non-interest income was $490.5 million for 2004, up $71.2 million, or 17
percent, from 2003. Included in non-interest income for 2003 were losses of
$44.3 million on the termination of debt. There were no debt terminations in
2004. Banking fees and other revenue increased $32.5 million, or 9 percent,
during the year as a result of TCF's expanding branch network and customer
base, new products and services, and increased fees. Included in banking fees
and other revenue are card revenues of $63.3 million, up $10.3 million, or 19
percent, from 2003 primarily reflecting an 18 percent increase in off-line
sales volume.
During 2004, TCF sold $1.4 billion of mortgage-backed securities and realized
gains of $22.6 million compared with sales of $816.5 million of mortgage-backed
securities and realized gains of $32.8 million in 2003. Other revenue was
$14.1 million for 2004, up $5.1 million from 2003. The increase was primarily
due to gains on sales of student loans of $7.8 million in 2004 compared with
gains of $3.1 million in 2003.
For the fourth quarter of 2004, total non-interest income was up 15 percent to
$132.5 million. Banking fees and other revenue increased $7.9 million, or 9
percent, over the fourth quarter of 2003. Card revenues, included in banking
fees and other revenue, totaled $17.5 million for the fourth quarter of 2004,
up $5.4 million, or 45 percent, over the same period in 2003. The increase was
attributable to a 21 percent increase in off-line sales volume coupled with an
18 basis point increase in the average off-line interchange rate.
Leasing and equipment finance revenues were $21 million for the fourth quarter
of 2004, up $5.7 million, or 37 percent, from the 2003 fourth quarter. The
increase is primarily the result of a $5.4 million increase in sales-type lease
revenues. Leasing and equipment finance revenues may fluctuate from quarter to
quarter based on customer driven factors not within the control of TCF.
During the 2004 fourth quarter, TCF took advantage of market conditions and
sold $346.3 million of mortgage-backed securities and realized gains of $6.2
million. There were no sales of securities during the fourth quarter of 2003.
For the fourth quarter of 2004, other revenue totaled $7.5 million, up $4.5
million, from the fourth quarter of 2003. The increase was primarily due to
gains on sales of student loans of $5.3 million during the 2004 fourth quarter
compared with $941 thousand for the same 2003 period.
New Branch Expansion TCF opened 30 new branches during 2004, including 19 new traditional branches
and 11 new supermarket branches, and has now opened 258 new branches since
January 1998 representing 60 percent of TCF's 430 total branches. During the
fourth quarter of 2004, TCF opened 12 new branches consisting of eight
traditional branches and four supermarket branches. "TCF remains focused on
its long-term strategy of expanding its franchise with the planned opening of
29 new branches in 2005, consisting of 24 new traditional branches and five new
supermarket branches," said Cooper.
December December December
(# of branches) 31, 2004 31, 2003 31, 1997 Total Branches
Minnesota 101 98 75
Illinois 197 191 47
Wisconsin 34 34 28
Michigan 60 55 60
Colorado 32 18 7
Indiana 6 5 -
430 401 217
New Branches*
Traditional 61 42
Supermarket 197 186
Total 258 228
% of Total Branches 60% 57%
* New branches opened since January 1, 1998.
Additional information regarding the results of TCF's new branches opened since
January 1, 1998 is summarized as follows: At or For the Year Ended
December 31,
($ in thousands) 2004 2003 Change % Change Number of checking accounts 575,537 495,211 80,326 16.2%
Deposits:
Checking $868,164 $616,539 $251,625 40.8
Savings 423,165 390,253 32,912 8.4
Money market 54,542 66,604 (12,062) (18.1)
Subtotal 1,345,871 1,073,396 272,475 25.4
Certificates of deposit 156,958 152,050 4,908 3.2
Total deposits $1,502,829 $1,225,446 $277,383 22.6 Total fees and other revenue
(quarter ended) $39,329 $32,766 $6,563 20.0
Total fees and other revenue
(year ended) $153,788 $126,123 $27,665 21.9 Power Assets(R)
"TCF's Power Asset lending operations continue to generate strong growth,
resulting in a $1 billion increase in Power Assets over 2003," said Cooper. TCF's consumer loan average balances increased $717.5 million, or 22 percent,
and leasing and equipment finance average balances increased $191.4 million, or
18 percent, from 2003. The growth in leasing and equipment finance was also
aided by the March 2004 acquisition of VGM Leasing Inc., a company specializing
in home medical equipment financing, which had $103 million of average leasing
and equipment finance balances for 2004.
Average Balances for the
Year Ended December 31,
($ in thousands) 2004 2003 Change % Change
Loans and leases*:
Consumer $4,005,558 $3,288,040 $717,518 21.8%
Commercial real estate 2,008,943 1,854,452 154,491 8.3
Commercial business 431,793 445,634 (13,841) (3.1)
Leasing and equipment
finance 1,285,925 1,094,532 191,393 17.5
Power Assets $7,732,219 $6,682,658 $1,049,561 15.7 *Excludes residential real estate loans and loans held for sale.
Power Liabilities(R)
"Our continued focus on growing our customer base resulted in an increase of
91,331 checking accounts, or 6 percent, in 2004 to 1,535,152 accounts despite
increased competition in all our markets," said Cooper. "Growing checking
accounts is an important part of our long-term strategies." Average Power
Liabilities totaled $7.8 billion for 2004, with an average interest rate of .55
percent, down 18 basis points from 2003. Average checking, savings and money
market balances increased $249.4 million from 2003 despite a $125.5 million
reduction in average custodial account balances related to the significant
decrease in mortgage banking activity. Certificates of deposit declined from
2003, as other lower-cost funding sources were available to TCF.
Average Balances and Rates for the
Year Ended December 31,
($ in thousands) 2004 2003 Change % Change
Checking $3,581,931 $3,073,490 $508,441 16.5 %
Savings 1,935,814 2,071,548 (135,734) (6.6)
Money market 763,925 887,273 (123,348) (13.9)
Subtotal 6,281,670 6,032,311 249,359 4.1
Certificates of deposit 1,493,938 1,743,533 (249,595) (14.3)
Power Liabilities $7,775,608 $7,775,844 $(236) - Number of checking
accounts, period-end 1,535,152 1,443,821 91,331 6.3
Average rate on deposits .55% .73% (18)bps N/A Residential Real Estate Loans and Securities Available for Sale
Average balances of residential real estate loans and securities available for
sale (consisting primarily of mortgage-backed securities) totaled $2.6 billion
for 2004, a decrease of $690 million from 2003. This decline in average
balances primarily reflects the significant decline in balances which occurred
during 2003 as a result of the high level of prepayments. These assets
remained relatively flat throughout 2004 at approximately $2.6 billion. During
the fourth quarter of 2004, TCF stopped originating loans for its residential
real estate portfolio. Future consumer loan origination activity will be
dedicated to the consumer home equity loan portfolio. At December 31, 2004,
the unrealized pre-tax loss on TCF's securities available for sale portfolio
was $2.2 million.
Average Balances and Yields for the
Year Ended December 31, Change
($ in thousands) 2004 2003 $ %
Residential real estate
loans $1,104,814 $1,440,688 $(335,874) (23.3)%
Securities available for
sale 1,536,673 1,891,062 (354,389) (18.7)
Total $2,641,487 $3,331,750 $(690,263) (20.7) Yield 5.45% 5.77% Non-interest Expense
Non-interest expense totaled $586.9 million for 2004, a 5 percent increase from
2003. The increase was primarily due to costs associated with new branch
expansion, additional advertising and promotions expense focused on producing
and retaining TCF's deposit customer base, increased incentive compensation
resulting from improved performance and increased deposit account losses
resulting from increased customer transaction activity. Other expenses totaled
$119.5 million for 2004, down $5 million, from 2003. Contributing to the
decline in other expenses was a reduction in real estate owned expense of $3.1
million coupled with a reduction in mortgage banking expenses of $2 million.
Non-interest expense totaled $154.4 million for the 2004 fourth quarter, up
$12.2 million, or 9 percent, from $142.2 million for the 2003 fourth quarter.
Compensation and employee benefits increased $9.6 million, or 13 percent, from
the fourth quarter of 2003, primarily driven by a $4.2 million increase in
incentive compensation resulting from improved performance in 2004 and a $1.9
million increase related to new branches opened during the past 12 months.
Occupancy and equipment expenses increased $2.1 million, or 9 percent, from the
fourth quarter of 2003, with $1.4 million relating to costs associated with new
branch expansion.
Three Months Ended
December 31, Change
($ in thousands) 2004 2003 $ % Compensation and employee benefits $86,338 $76,752 $9,586 12.5%
Occupancy and equipment 25,057 22,984 2,073 9.0
Advertising and promotions 6,568 6,204 364 5.9
Deposit account losses 5,675 5,448 227 4.2
Other 30,758 30,856 (98) (0.3)
Total non-interest expense $154,396 $142,244 $12,152 8.5 Year Ended
December 31, Change
($ in thousands) 2004 2003 $ % Compensation and employee benefits $322,824 $302,804 $20,020 6.6%
Occupancy and equipment 95,617 88,423 7,194 8.1
Advertising and promotions 26,353 25,536 817 3.2
Deposit account losses 22,624 18,820 3,804 20.2
Other 119,516 124,526 (5,010) (4.0)
Total non-interest expense $586,934 $560,109 $26,825 4.8 Credit Quality
At December 31, 2004, TCF's allowance for loan and lease losses totaled $79.9
million, or .85 percent of loans and leases, compared with $76.6 million, or
.92 percent, at December 31, 2003. The provision for credit losses for 2004
was $10.9 million, down from $12.5 million for 2003. Net loan and lease
charge-offs in 2004 were $9.5 million, or .11 percent of average loans and
leases, down from $12.9 million, or .16 percent in 2003. At December 31, 2004,
TCF's over-30-day delinquency rate was .37 percent, down from .47 percent at
December 31, 2003. Total non-performing assets were $64.1 million, or .52
percent of total assets, at December 31, 2004, down from $68.9 million, or .61
percent, at December 31, 2003, primarily reflecting a net decrease in other
real estate owned of $16.3 million partially offset by a net increase in
non-accrual loans and leases as a result of the $18.8 million investment in a
leveraged airplane lease moving to non-accrual status, during the third quarter
of 2004.
Three Months Ended Year Ended
December 31, December 31,
($ in thousands) 2004 2003 2004 2003
Allowance for loan and lease
losses:
Balance at beginning of
period $78,976 $78,666 $76,619 $77,008
Net (charge-offs)
recoveries:
Consumer (806) (1,002) (3,232) (3,189)
Commercial real estate 2 (1,294) (476) (1,336)
Commercial business (67) (47) (153) (782)
Leasing and equipment
finance (2,273) (3,708) (5,545) (7,537)
Residential real estate (27) (33) (73) (77)
Total (3,171) (6,084) (9,479) (12,921)
Provision for credit losses 4,073 4,037 10,947 12,532
Acquired allowance - - 1,791 -
Balance at end of period $79,878 $76,619 $79,878 $76,619
Key Indicators:
Allowance for loans and
leases as a percentage of
total loans and leases .85% .92% .85% .92%
Annualized net charge-offs as
a percentage of average
loans and leases .14% .30% .11% .16%
Period-end allowance as a
multiple of annualized net
charge-offs 6.3 X 3.1 X 8.4 X 5.9 X
Income before income taxes
and provision for loan
losses as a multiple of net
charge-offs 33.0 X 15.1 X 41.7 X 26.3 X Mortgage Banking
During 2004, TCF restructured its mortgage banking business by eliminating the
wholesale loan origination activities and downsizing and integrating its retail
loan origination function with its consumer lending business. TCF's mortgage
banking business no longer originates any new loans and continues to service
the remaining $4.5 billion portfolio of mortgage loans for third party
investors. During the fourth quarter of 2004, TCF increased its mortgage
servicing rights valuation allowance by $2.5 million and at December 31, 2004,
the mortgage servicing rights asset totaled $46.4 million, 1.03% of the related
servicing portfolio. The following table summarizes the components of mortgage
banking revenues.
Three Months Ended
December 31, Change
($ in thousands) 2004 2003 $ % Servicing income $4,170 $4,791 $(621) (13.0)%
Less mortgage servicing rights:
Amortization 3,366 3,387 (21) (0.6)
Impairment 2,500 (2,347) 4,847 N.M. Subtotal 5,866 1,040 4,826 N.M. Net servicing income (loss) (1,696) 3,751 (5,447) N.M. Gains on sales of loans 1,361 2,392 (1,031) (43.1)
Other income 213 430 (217) (50.5)
Total mortgage banking $(122) $6,573 $(6,695) N.M.
N.M. Not meaningful. Year Ended
December 31, Change
($ in thousands) 2004 2003 $ % Servicing income $17,349 $20,533 $(3,184) (15.5)%
Less mortgage servicing rights:
Amortization 13,091 23,680 (10,589) (44.7)
Impairment 1,500 21,153 (19,653) (92.9)
Subtotal 14,591 44,833 (30,242) (67.5)
Net servicing income (loss) 2,758 (24,300) 27,058 N.M. Gains on sales of loans 8,107 33,505 (25,398) (75.8)
Other income 2,095 3,514 (1,419) (40.4)
Total mortgage banking $12,960 $12,719 $241 1.9 N.M. Not meaningful.
Income Taxes
TCF's income tax expense was $129.5 million for 2004, or 33.68 percent of
income before income tax expense, compared with $111.9 million, or 34.14
percent, for the same 2003 period. The lower effective income tax rate in 2004
was primarily due to increased investments in affordable housing limited
partnerships and lower state and local income taxes. TCF's income tax expense
was $33.1 million for the fourth quarter of 2004, or 32.96 percent of income
before income tax expense, compared with $28.2 million, or 32.14 percent, for
the comparable 2003 period.
Capital TCF repurchased 3,984,890 shares of its common stock during 2004 at an average
cost of $29.14 per share, including 1,570,000 shares at an average cost of
$30.72 during the fourth quarter. TCF has 3.5 million shares remaining in its
stock repurchase program authorized by its Board of Directors. Since 1997, TCF
has repurchased 54.2 million shares of its stock, at an average cost of $17.58
per share.
At December 31, At December 31,
($ in thousands, except per-share 2004 2003
data) Stockholders' equity $958,418 $920,858
Stockholders' equity to total
assets 7.77% 8.14%
Book value per common share $6.99 $6.53 Total risk-based capital $958,900 10.88% $841,982 10.73%
Total risk-based capital "well-
capitalized" requirement $881,481 10.00% $784,562 10.00%
Excess risk-based capital over
"well-capitalized" requirement $77,419 .88% $57,420 .73% Website Information
A live webcast of TCF's conference call to discuss 2004 and fourth quarter
earnings will be hosted at TCF's website, http://www.tcfexpress.com/ , on
January 13, 2004 at 10:00 a.m., CT. Additionally, the webcast is available for
replay at TCF's website after the conference call. The website also includes
free access to company news releases, TCF's annual report, quarterly reports,
investor presentations and SEC filings.
TCF is a Wayzata, Minnesota-based national financial holding company with $12.3
billion in assets. TCF has 430 banking offices in Minnesota, Illinois,
Michigan, Wisconsin, Colorado and Indiana. Other TCF affiliates provide
leasing and equipment finance, mortgage banking, securities brokerage, and
investments and insurance sales.
Forward-looking Information This earnings release and other reports issued by the Company, including
reports filed with the SEC, may contain "forward-looking" statements that deal
with future results, plans or performance. In addition, TCF's management may
make such statements orally to the media, or to securities analysts, investors
or others. Forward-looking statements deal with matters that do not relate
strictly to historical facts. TCF's future results may differ materially from
historical performance and forward-looking statements about TCF's expected
financial results or other plans are subject to a number of risks and
uncertainties. These include but are not limited to possible legislative
changes and adverse economic, business and competitive developments such as
shrinking interest margins; deposit outflows; ability to increase the number of
checking accounts and the possibility that deposit account losses (fraudulent
checks, etc.) may increase; reduced demand for financial services and loan and
lease products; adverse developments affecting TCF's supermarket banking
relationships or any of the supermarket chains in which TCF maintains
supermarket branches; changes in accounting policies and guidelines, or
monetary, fiscal or tax policies of the federal or state governments; changes
in credit and other risks posed by TCF's loan, lease and investment portfolios,
including declines in commercial or residential real estate values or a
bankruptcy filing by Delta Airlines, the lessee under a leveraged lease in
which TCF holds an equity interest; technological, computer-related or
operational difficulties; adverse changes in securities markets; the risk that
TCF could be unable to effectively manage the volatility of its mortgage
servicing portfolio, which could adversely affect earnings; and results of
litigation or other significant uncertainties. Investors should consult TCF's
Annual Report to Shareholders and reports on Forms 10-K, 10-Q and 8-K for
additional important information about the Company.
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per-share data)
(Unaudited)
Three Months Ended
December 31,
2004 2003 $ Change % Change
Interest income:
Loans and leases $140,469 $125,042 $15,427 12.3%
Securities available for sale 19,484 19,995 (511) (2.6)
Loans held for sale 2,421 3,097 (676) (21.8)
Investments 1,014 785 229 29.2
Total interest income 163,388 148,919 14,469 9.7
Interest expense:
Deposits 12,250 10,990 1,260 11.5
Borrowings 24,649 18,837 5,812 30.9
Total interest expense 36,899 29,827 7,072 23.7
Net interest income 126,489 119,092 7,397 6.2
Provision for credit losses 4,073 4,037 36 .9
Net interest income after
provision for credit losses 122,416 115,055 7,361 6.4
Non-interest income:
Fees and service charges 67,536 64,486 3,050 4.7
Card revenue 17,458 12,069 5,389 44.7
ATM revenue 10,326 10,400 (74) (.7)
Investments and insurance revenue 2,609 3,037 (428) (14.1)
Subtotal 97,929 89,992 7,937 8.8
Leasing and equipment finance 21,047 15,372 5,675 36.9
Mortgage banking (122) 6,573 (6,695) N.M. Other 7,457 2,928 4,529 154.7
Fees and other revenue 126,311 114,865 11,446 10.0
Gains on sales of securities
available for sale 6,204 - 6,204 100.0
Total non-interest income 132,515 114,865 17,650 15.4
Non-interest expense:
Compensation and employee benefits 86,338 76,752 9,586 12.5
Occupancy and equipment 25,057 22,984 2,073 9.0
Advertising and promotions 6,568 6,204 364 5.9
Other 36,433 36,304 129 .4
Total non-interest expense 154,396 142,244 12,152 8.5
Income before income tax
expense 100,535 87,676 12,859 14.7
Income tax expense 33,133 28,180 4,953 17.6
Net income $67,402 $59,496 $7,906 13.3 Net income per common share:
Basic $.50 $.43 $.07 16.3
Diluted $.50 $.43 $.07 16.3 Dividends declared per common share $.1875 $.1625 $.025 15.4 Average common and common equivalent
shares outstanding (in thousands):
Basic 134,760 138,450 (3,690) (2.7)
Diluted 135,610 139,118 (3,508) (2.5) N.M. Not meaningful.
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per-share data)
(Unaudited) Year Ended
December 31,
2004 2003 $ Change % Change
Interest income:
Loans and leases $527,178 $513,171 $14,007 2.7%
Securities available for sale 80,643 103,821 (23,178) (22.3)
Loans held for sale 11,533 20,016 (8,483) (42.4)
Investments 3,455 4,511 (1,056) (23.4)
Total interest income 622,809 641,519 (18,710) (2.9)
Interest expense:
Deposits 42,581 56,795 (14,214) (25.0)
Borrowings 88,337 103,579 (15,242) (14.7)
Total interest expense 130,918 160,374 (29,456) (18.4)
Net interest income 491,891 481,145 10,746 2.2
Provision for credit losses 10,947 12,532 (1,585) (12.6)
Net interest income after
provision for credit losses 480,944 468,613 12,331 2.6
Non-interest income:
Fees and service charges 271,664 247,456 24,208 9.8
Card revenue 63,312 52,991 10,321 19.5
ATM revenue 42,935 43,623 (688) (1.6)
Investments and insurance revenue 12,558 13,901 (1,343) (9.7)
Subtotal 390,469 357,971 32,498 9.1
Leasing and equipment finance 50,323 51,088 (765) (1.5)
Mortgage banking 12,960 12,719 241 1.9
Other 14,114 9,014 5,100 56.6
Fees and other revenue 467,866 430,792 37,074 8.6
Gains on sales of securities
available for sale 22,600 32,832 (10,232) (31.2)
Gains (losses) on termination of
debt - (44,345) 44,345 100.0
Other non-interest income 22,600 (11,513) 34,113 N.M. Total non-interest income 490,466 419,279 71,187 17.0
Non-interest expense:
Compensation and employee benefits 322,824 302,804 20,020 6.6
Occupancy and equipment 95,617 88,423 7,194 8.1
Advertising and promotions 26,353 25,536 817 3.2
Other 142,140 143,346 (1,206) (.8)
Total non-interest expense 586,934 560,109 26,825 4.8
Income before income tax
expense 384,476 327,783 56,693 17.3
Income tax expense 129,483 111,905 17,578 15.7
Net income $254,993 $215,878 $39,115 18.1 Net income per common share:
Basic $1.87 $1.53 $.34 22.2
Diluted $1.86 $1.53 $.33 21.6 Dividends declared per common share $.75 $.65 $.10 15.4 Average common and common equivalent
shares outstanding (in thousands):
Basic 136,616 140,987 (4,371) (3.1)
Diluted 137,175 141,541 (4,366) (3.1) N.M. Not meaningful.
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except per-share data)
(Unaudited) At At
December 31, December 31, Change
2004 2003 $ % ASSETS Cash and due from banks $359,798 $370,054 $(10,256) (2.8)%
Investments 103,226 75,223 28,003 37.2
Securities available
for sale 1,619,941 1,533,288 86,653 5.7
Loans held for sale 154,279 335,372 (181,093) (54.0)
Loans and leases:
Consumer 4,418,588 3,630,341 788,247 21.7
Commercial real
estate 2,154,396 1,916,701 237,695 12.4
Commercial business 424,135 427,696 (3,561) (.8)
Leasing and
equipment finance 1,375,372 1,160,397 214,975 18.5
Subtotal 8,372,491 7,135,135 1,237,356 17.3
Residential real
estate 1,014,166 1,212,643 (198,477) (16.4)
Total loans and
leases 9,386,657 8,347,778 1,038,879 12.4
Allowance for loan
and lease losses (79,878) (76,619) (3,259) (4.3)
Net loans and
leases 9,306,779 8,271,159 1,035,620 12.5
Premises and equipment 326,667 282,193 44,474 15.8
Goodwill 152,599 145,462 7,137 4.9
Deposit base intangibles 4,245 5,907 (1,662) (28.1)
Mortgage servicing rights 46,442 52,036 (5,594) (10.8)
Other assets 266,591 248,321 18,270 7.4
$12,340,567 $11,319,015 $1,021,552 9.0 LIABILITIES AND
STOCKHOLDERS'
EQUITY Deposits:
Checking $3,905,987 $3,248,412 $657,575 20.2
Savings 1,927,872 1,905,923 21,949 1.2
Money market 659,686 845,291 (185,605) (22.0)
Subtotal 6,493,545 5,999,626 493,919 8.2
Certificates of
deposit 1,468,650 1,612,123 (143,473) (8.9)
Total deposits 7,962,195 7,611,749 350,446 4.6
Short-term borrowings 1,056,111 878,412 177,699 20.2
Long-term borrowings 2,048,492 1,536,413 512,079 33.3
Total borrowings 3,104,603 2,414,825 689,778 28.6
Accrued expenses and
other liabilities 315,351 371,583 (56,232) (15.1)
Total liabilities 11,382,149 10,398,157 983,992 9.5
Stockholders' equity:
Preferred stock,
par value $.01
per share,
30,000,000 shares
authorized; none
issued or outstanding - - - -
Common stock, par
value $.01 per
share, 280,000,000
shares authorized;
184,939,094 and
185,026,710
shares issued 1,849 925 924 99.9
Additional paid-in
capital 518,741 518,878 (137) -
Retained earnings,
subject to
certain
restrictions 1,385,760 1,234,804 150,956 12.2
Accumulated other
comprehensive
(loss) income (1,415) 5,652 (7,067) N.M. Treasury stock at
cost, 47,752,934
and 44,074,050
shares, and other (946,517) (839,401) (107,116) (12.8)
Total
stockholders'
equity 958,418 920,858 37,560 4.1
$12,340,567 $11,319,015 $1,021,552 9.0 N.M. Not meaningful.
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CREDIT QUALITY DATA
(Dollars in thousands)
(Unaudited) Allowance for loan and lease losses:
At or For the Year Ended At or For the Year Ended
December 31, 2004 December 31, 2003
Allow- Allow-
ance ance
as a as a
% of Net % of Net
Allow- Port- Charge-offs Allow- Port- Charge-offs
ance folio $ % ance folio $ %
Consumer $9,939 .22% $3,232 .08% $9,084 .25% $3,189 .10%
Commercial
real
estate 20,742 .96 476 .02 25,142 1.31 1,336 .07
Commercial
business 7,696 1.81 153 .04 11,797 2.76 782 .18
Leasing and
equipment
finance 24,566 1.79 5,545 .43 13,515 1.16 7,537 .69
Unallocated 16,139 n/a - n/a 16,139 n/a - n/a
Subtotal 79,082 .94 9,406 .12 75,677 1.06 12,844 .19
Residential
real estate 796 .08 73 .01 942 .08 77 .01
Total $79,878 .85 $9,479 .11 $76,619 .92 $12,921 .16
Non-performing assets:
At At At Change from
December September December September December
31, 30, 31, 30, 31,
2004 2004 2003 2004 2003
Non-accrual
loans and
leases:
Consumer $12,187 $11,959 $12,052 $228 $135
Commercial
real estate 1,093 1,026 2,490 67 (1,397)
Commercial
business 4,533 2,861 2,931 1,672 1,602
Leasing and
equipment
finance 25,678 28,114 13,940 (2,436) 11,738
Residential
real estate 3,387 2,763 3,993 624 (606)
Total
non-accrual
loans and
leases 46,878 46,723 35,406 155 11,472
Other real
estate owned:
Residential
real estate 11,726 12,028 20,462 (302) (8,736)
Commercial
real estate 5,465 10,717 12,992 (5,252) (7,527)
Total other
real estate
owned 17,191 22,745 33,454 (5,554) (16,263)
Total
non-
performing
assets $64,069 $69,468 $68,860 $(5,399) $(4,791)
Over 30-day
delinquency
data (a): At December 31, At September 30, At December 31,
2004 2004 2003
Principal % of Principal % of Principal % of
Balances Portfolio Balances Portfolio Balances Portfolio
Consumer $15,436 .35% $15,256 .36% $17,673 .49%
Commercial
real estate 32 - 1,958 .10 58 -
Commercial business 404 .10 1,282 .29 282 .07
Leasing and
equipment
finance 8,997 .67 7,064 .54 10,619 .93
Residential
real estate 9,516 .94 9,776 .94 10,112 .84
Total $34,385 .37 $35,336 .39 $38,744 .47
Potential Problem
Loans and
Leases (b):
At At At Change from
December September December September December
31, 30, 31, 30, 31
2004 2004 2003 2004 2003
Commercial
real estate $34,138 $31,397 $20,279 $2,741 $13,859
Commercial
business 18,112 21,607 12,721 (3,495) 5,391
Leasing and
equipment
finance 18,816 17,669 15,094 1,147 3,722
$71,066 $70,673 $48,094 $393 $22,972 (a) Excludes non-accrual loans and leases. (b) Consists of loans and leases primarily classified for regulatory
purposes as substandard and reflect the distinct possibility, but not
probability, that they will become non-performing or that TCF will
not be able to collect all amounts due according to the contractual
terms of the loan or lease agreement.
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Dollars in thousands)
(Unaudited) Three Months Ended December 31,
2004 2003
Yields Yields
Average and Average and
Balance Interest Rates Balance Interest Rates
(a) (a)
ASSETS Investments $105,603 $1,014 3.83% $75,397 $785 4.15%
Securities
available for
sale 1,534,776 19,484 5.08 1,505,379 19,995 5.31
Loans held for
sale 254,617 2,421 3.78 359,650 3,097 3.42
Loans and
leases:
Consumer 4,308,053 68,230 6.30 3,529,177 55,657 6.26
Commercial real
estate 2,094,012 29,474 5.60 1,875,215 26,290 5.56
Commercial
business 430,658 5,097 4.71 424,310 4,438 4.15
Leasing and
equipment
finance 1,341,985 23,031 6.86 1,152,753 20,318 7.05
Subtotal 8,174,708 125,832 6.13 6,981,455 106,703 6.07
Residential
real estate 1,027,302 14,637 5.69 1,256,847 18,339 5.83
Total loans
and leases 9,202,010 140,469 6.08 8,238,302 125,042 6.04 Total
interest-
earning
assets 11,097,006 163,388 5.87 10,178,728 148,919 5.82 Other assets 1,072,330 1,002,824 Total assets $12,169,336 $11,181,552
LIABILITIES AND STOCKHOLDERS' EQUITY Non-interest
bearing
deposits $2,382,674 $2,199,983
Interest-
bearing
deposits:
Checking 1,450,200 1,700 .47 1,110,296 213 .08
Savings 1,820,580 2,338 .51 1,816,220 1,782 .39
Money market 685,885 793 .46 866,408 823 .38
Subtotal 3,956,665 4,831 .49 3,792,924 2,818 .29
Certificates
of deposit 1,469,735 7,419 2.01 1,607,495 8,172 2.02
Total
interest-
bearing
deposits 5,426,400 12,250 .90 5,400,419 10,990 .81 Total
deposits 7,809,074 12,250 .62 7,600,402 10,990 .57 Borrowings:
Short-term
borrowings 1,003,746 5,142 2.04 941,460 2,931 1.24
Long-term
borrowings 2,045,505 19,507 3.80 1,358,496 15,906 4.65
Total
borrowings 3,049,251 24,649 3.22 2,299,956 18,837 3.25 Total deposits
and
borrowings 10,858,325 36,899 1.35 9,900,358 29,827 1.20 Other liabilities 360,004 372,034 Total
liabilities 11,218,329 10,272,392 Stockholders'
equity 951,007 909,160 Total
liabilities
and
stockholders'
equity $12,169,336 $11,181,552 Net interest
income and
margin $126,489 4.56% $119,092 4.68% (a) Annualized.
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Dollars in thousands)
(Unaudited)
Year Ended December 31,
2004 2003
Yields Yields
Average and Average and
Balance Interest Rates Balance Interest Rates
ASSETS
Investments $124,833 $3,455 2.77% $101,455 $4,511 4.45%
Securities
available for
sale 1,536,673 80,643 5.25 1,891,062 103,821 5.49
Loans held for
sale 331,529 11,533 3.48 488,634 20,016 4.10
Loans and leases:
Consumer 4,005,558 245,439 6.13 3,288,040 214,971 6.54
Commercial real
estate 2,008,943 110,446 5.50 1,854,452 108,867 5.87
Commercial
business 431,793 18,569 4.30 445,634 19,020 4.27
Leasing and
equipment
finance 1,285,925 89,364 6.95 1,094,532 81,912 7.48
Subtotal 7,732,219 463,818 6.00 6,682,658 424,770 6.36
Residential
real estate 1,104,814 63,360 5.73 1,440,688 88,401 6.14
Total loans
and leases 8,837,033 527,178 5.97 8,123,346 513,171 6.32 Total
interest-
earning
assets 10,830,068 622,809 5.75 10,604,497 641,519 6.05 Other assets 1,052,679 1,053,073 Total assets $11,882,747 $11,657,570
LIABILITIES AND STOCKHOLDERS' EQUITY Non-interest
bearing
deposits $2,355,000 $2,232,883
Interest-
bearing
deposits:
Checking 1,338,893 3,820 .29 1,064,380 948 .09
Savings 1,823,852 7,490 .41 1,847,775 9,298 .50
Money market 763,925 2,992 .39 887,273 4,447 .50
Subtotal 3,926,670 14,302 .36 3,799,428 14,693 .39
Certificates
of deposit 1,493,938 28,279 1.89 1,743,533 42,102 2.41
Total
interest-
bearing
deposits 5,420,608 42,581 .79 5,542,961 56,795 1.02 Total
deposits 7,775,608 42,581 .55 7,775,844 56,795 .73 Borrowings:
Short-term
borrowings 809,106 12,664 1.57 757,128 9,451 1.25
Long-term
borrowings 1,984,069 75,673 3.81 1,778,671 94,128 5.29
Total
borrowings 2,793,175 88,337 3.16 2,535,799 103,579 4.08 Total deposits
and
borrowings 10,568,783 130,918 1.24 10,311,643 160,374 1.56 Other
liabilities 370,184 409,539 Total
liabilities 10,938,967 10,721,182 Stockholders'
equity 943,780 936,388 Total
liabilities
and
stockholders'
equity $11,882,747 $11,657,570 Net interest
income and
margin $491,891 4.54% $481,145 4.54% TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME AND FINANCIAL RATIOS
(Dollars in thousands, except per-share data)
(Unaudited) Three Months Ended
Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,
2004 2004 2004 2004 2003
Interest income:
Loans and
leases $140,469 $133,295 $128,141 $125,273 $125,042
Securities
available
for sale 19,484 20,414 20,413 20,332 19,995
Loans held
for sale 2,421 2,931 3,340 2,841 3,097
Investments 1,014 773 895 773 785
Total
interest
income 163,388 157,413 152,789 149,219 148,919
Interest
expense:
Deposits 12,250 10,318 9,474 10,539 10,990
Borrowings 24,649 22,605 20,896 20,187 18,837
Total
interest
expense 36,899 32,923 30,370 30,726 29,827
Net
interest
income 126,489 124,490 122,419 118,493 119,092
Provision for
credit losses 4,073 2,644 3,070 1,160 4,037
Net interest
income after
provision
for credit
losses 122,416 121,846 119,349 117,333 115,055
Non-interest
income:
Fees and
service
charges 67,536 71,353 73,116 59,659 64,486
Card
revenue 17,458 16,339 16,024 13,491 12,069
ATM revenue 10,326 11,474 11,138 9,997 10,400
Investments
and insurance
revenue 2,609 3,057 3,430 3,462 3,037
Subtotal 97,929 102,223 103,708 86,609 89,992
Leasing and
equipment
finance 21,047 6,864 12,245 10,167 15,372
Mortgage
banking (122) 4,131 5,496 3,455 6,573
Other 7,457 2,585 1,844 2,228 2,928
Fees and
other
revenue 126,311 115,803 123,293 102,459 114,865
Gains on
sales of
securities
available
for sale 6,204 3,679 - 12,717 -
Total
non-
interest
income 132,515 119,482 123,293 115,176 114,865
Non-interest
expense:
Compensation
and employee
benefits 86,338 78,010 79,597 78,879 76,752
Occupancy and
equipment 25,057 23,673 23,397 23,490 22,984
Advertising and
promotions 6,568 7,377 6,498 5,910 6,204
Other 36,433 38,866 34,414 32,427 36,304
Total non-
interest
expense 154,396 147,926 143,906 140,706 142,244
Income
before
income
tax
exp-
ense 100,535 93,402 98,736 91,803 87,676
Income tax
expense 33,133 31,690 33,518 31,142 28,180
Net
income $67,402 $61,712 $65,218 $60,661 $59,496 Net income per
common share:
Basic $.50 $.45 $.47 $.44 $.43
Diluted $.50 $.45 $.47 $.44 $.43 Dividends
declared
per common
share $.1875 $.1875 $.1875 $.1875 $.1625 Financial Ratios: Return on average
assets(a) 2.22% 2.06% 2.20% 2.11% 2.13%
Return on average
common
equity(a) 28.35 25.96 27.68 25.90 26.18
Net interest
margin(a) 4.56 4.56 4.53 4.52 4.68
Net charge-offs
as a percentage
of average loans
and leases(a) .14 .17 .10 .02 .30
Average total
equity to average
assets 7.81 7.94 7.95 8.13 8.13 (a) Annualized.
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED QUARTERLY AVERAGE BALANCE SHEETS AND SUPPLEMENTAL INFORMATION
(In thousands)
(Unaudited) Dec. 31, Sept. 30, Jun. 30, Mar. 31, Dec. 31,
2004 2004 2004 2004 2003
ASSETS Cash and due
from banks $350,497 $351,383 $347,551 $326,731 $339,531
Investments 105,603 94,910 157,591 141,770 75,397
Securities
available
for sale 1,534,776 1,545,768 1,546,694 1,519,374 1,505,379
Loans held
for sale 254,617 327,953 385,193 359,238 359,650
Loans and
leases:
Consumer 4,308,053 4,099,569 3,904,194 3,706,061 3,529,177
Commercial
real
estate 2,094,012 2,012,790 1,985,498 1,942,494 1,875,215
Commercial
business 430,658 440,010 428,602 427,824 424,310
Leasing and
equipment
finance 1,341,985 1,320,495 1,285,989 1,194,235 1,152,753
Sub-
total 8,174,708 7,872,864 7,604,283 7,270,614 6,981,455
Residential
real
estate 1,027,302 1,076,619 1,123,062 1,193,435 1,256,847
Total
loans
and
leases 9,202,010 8,949,483 8,727,345 8,464,049 8,238,302
Allowance
for loan
and lease
losses (79,502) (80,077) (79,169) (77,655) (78,655)
Net loans
and
leases 9,122,508 8,869,406 8,648,176 8,386,394 8,159,647
Premises and
equipment 322,492 313,068 297,492 287,322 276,541
Goodwill 152,599 152,599 152,599 146,678 145,462
Deposit base
intangibles 4,448 4,865 5,280 5,695 6,111
Mortgage
servicing
rights 49,746 51,380 50,876 51,432 49,955
Other
assets 272,050 264,226 264,826 301,010 263,879
$12,169,336 $11,975,558 $11,856,278 $11,525,644 $11,181,552 LIABILITIES AND STOCKHOLDERS' EQUITY Deposits:
Checking $3,741,608 $3,657,340 $3,596,808 $3,329,383 $3,194,672
Savings 1,911,846 1,925,674 1,982,818 1,923,295 1,931,827
Money
market 685,885 738,769 799,485 832,695 866,408
Sub-
total 6,339,339 6,321,783 6,379,111 6,085,373 5,992,907
Certificates
of
deposit 1,469,735 1,458,905 1,467,654 1,580,107 1,607,495
Total
dep-
osits 7,809,074 7,780,688 7,846,765 7,665,480 7,600,402
Short-term
borrowings 1,003,746 824,955 669,938 735,475 941,460
Long-term
borrowings 2,045,505 2,059,525 2,017,232 1,812,508 1,358,496
Total
borrow-
ings 3,049,251 2,884,480 2,687,170 2,547,983 2,299,956
Accrued
expenses and
other
liabilities 360,004 359,488 379,965 375,192 372,034
Total
liabil-
ities 11,218,329 11,024,656 10,913,900 10,588,655 10,272,392
Stockholders'
equity:
Common stock 1,850 1,206 925 925 925
Additional
paid-in
capital 518,012 517,020 516,990 517,203 517,657
Retained
earnings 1,360,169 1,318,461 1,282,080 1,243,968 1,209,630
Accumulated
other
comprehensive
income
(loss) (527) (2,781) (11,666) 11,784 4,332
Treasury
stock at
cost and
other (928,497) (883,004) (845,951) (836,891) (823,384)
951,007 950,902 942,378 936,989 909,160
$12,169,336 $11,975,558 $11,856,278 $11,525,644 $11,181,552 Supplemental
Information:
Residential
real estate
loans $1,027,302 $1,076,619 $1,123,062 $1,193,435 $1,256,847
Securities
available
for sale 1,534,776 1,545,768 1,546,694 1,519,374 1,505,379
Total
residential
real estate
loans and
securities
available
for
sale $2,562,078 $2,622,387 $2,669,756 $2,712,809 $2,762,226
DATASOURCE: TCF Financial Corporation CONTACT: Jason Korstange of TCF Financial Corporation, +1-952-745-2755 Web site: http://www.tcfexpress.com/ Company News On-Call: http://www.prnewswire.com/comp/840750.html
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