TCF Financial : Reports Quarterly Net Income of $90.4 Million, or $0.54 Per Share

July 25, 2019 at 08:06 am EDT

Adjusted diluted earnings per common share of $0.56,(1) excluding 2 cents per share after-tax impact of merger-related expenses

TCF Financial Corporation (NYSE: TCF):

Second Quarter Observations

Diluted earnings per common share of 54 cents, up 58.8% from the second quarter of 2018; adjusted diluted earnings per common share of 56 cents⁽¹⁾, up 14.3% from the second quarter of 2018
Efficiency ratio of 65.11%, down 944 basis points from the second quarter of 2018; adjusted efficiency ratio of 63.95%⁽¹⁾, down 183 basis points from the second quarter of 2018
Non-interest expense down 12.9% from the second quarter of 2018; adjusted non-interest expense⁽¹⁾ down 3.1% from the second quarter of 2018
Revenue of $363.8 million, consistent with the second quarter of 2018
Net interest income consistent with the second quarter of 2018
Average interest-earning asset growth of 4.9% from the second quarter of 2018
Period-end loans and leases up 3.1% from June 30, 2018; period-end loans and leases excluding auto finance up 10.7%⁽²⁾ from June 30, 2018
Net charge-off rate of 0.29%; net charge-off rate excluding auto finance net charge-offs of 0.19%⁽¹⁾
Return on average common equity ("ROACE") of 14.27%; return on average tangible common equity ("ROATCE") of 15.46%⁽¹⁾; adjusted ROATCE of 16.02%⁽¹⁾
Repurchased 1,324,920 shares of common stock at a cost of $26.5 million during the second quarter of 2019

Summary of Financial Results
	At or For the Quarter Ended															Change From
	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Jun. 30,
(Dollars in thousands, except per share data)	2019			2019			2018			2018			2018			2019			2018
Net income attributable to TCF	$	90,427		$	70,494		$	85,652		$	86,196		$	58,749		28.3		%	53.9		%
Net interest income		250,324			250,907			248,888			249,121			250,799		(0.2	)		(0.2	)
Basic earnings per common share		0.54			0.42			0.51			0.51			0.34		28.6			58.8
Diluted earnings per common share		0.54			0.42			0.51			0.51			0.34		28.6			58.8
Adjusted diluted earnings per common share⁽¹⁾		0.56			0.46			0.51			0.51			0.49		21.7			14.3

Financial Ratios
Return on average assets⁽³⁾		1.54	%		1.22	%		1.52	%		1.55	%		1.08	%	32		bps	46		bps
ROACE⁽³⁾		14.27			11.40			14.30			14.44			9.72		287			455
Adjusted ROACE⁽¹⁾⁽³⁾		14.79			12.61			14.30			14.44			14.11		218			68
ROATCE⁽¹⁾⁽³⁾		15.46			12.42			15.59			15.76			10.65		304			481
Adjusted ROATCE⁽¹⁾⁽³⁾		16.02			13.72			15.59			15.76			15.39		230			63
Net interest margin⁽³⁾		4.43			4.56			4.60			4.66			4.67		(13	)		(24	)
Net charge-offs as a percentage of average loans and leases⁽³⁾		0.29			0.39			0.46			0.15			0.27		(10	)		2
Non-performing assets as a percentage of total loans and leases and other real estate owned		0.62			0.63			0.65			0.59			0.54		(1	)		8
Efficiency ratio		65.11			70.70			66.30			67.41			74.55		(559	)		(944	)
Adjusted efficiency ratio⁽¹⁾		63.95			68.06			66.30			67.41			65.78		(411	)		(183	)
(1) See "Reconciliation of GAAP to Non-GAAP Financial Measures" tables. (2) Calculated by subtracting auto finance loans of $1.5 billion and $2.6 billion at June 30, 2019 and 2018, respectively, from total loans and leases of $19.2 billion and $18.6 billion at June 30, 2019 and 2018, respectively. (3) Annualized

TCF Financial Corporation ("TCF" or the "Company") (NYSE: TCF) today reported net income of $90.4 million for the second quarter of 2019, compared with $58.7 million for the second quarter of 2018 and $70.5 million for the first quarter of 2019. Diluted earnings per common share was 54 cents for the second quarter of 2019 (inclusive of a 2 cents per common share after-tax impact of merger-related expenses), compared with 34 cents for the second quarter of 2018 and 42 cents for the first quarter of 2019 (inclusive of a 4 cents per common share after-tax impact of merger-related expenses). Adjusted diluted earnings per common share was 56 cents for the second quarter of 2019, an increase of 14.3% from the second quarter of 2018 and an increase of 21.7% from the first quarter of 2019 (see "Reconciliation of GAAP to Non-GAAP Financial Measures" tables).

"We generated strong financial results in the second quarter as we look forward to closing our merger with Chemical Financial Corporation on August 1, 2019," said Craig R. Dahl, chairman and chief executive officer. "Our second quarter performance was highlighted by lower expenses, growth in both average loans and average deposits, stable credit quality and the continuation of our risk reduction strategy. As a result, we continued to demonstrate progress toward our two primary strategic objectives, improving return on capital and lowering the efficiency ratio. In addition, our integration planning activities remain on track to support the combination of Chemical and TCF, and we are excited about bringing together the best of both companies that we believe positions us to deliver value for our shareholders and communities upon completion of the merger."

Net Interest Income and Net Interest Margin
Net interest income was $250.3 million for the second quarter of 2019, consistent with both the second quarter of 2018 and first quarter of 2019. Net interest margin was 4.43% for the second quarter of 2019, down 24 basis points from the second quarter of 2018 and down 13 basis points from the first quarter of 2019. The decrease in net interest margin from the second quarter of 2018 was primarily due to higher average rates on deposits, partially offset by higher average yields on the variable- and adjustable-rate loan portfolios. The decrease in net interest margin from the first quarter of 2019 was primarily due to lower average loan and lease yields and higher average rates on deposits. The decreases were also impacted by the partial reinvestment of the auto finance portfolio run-off into the available for sale mortgage-backed debt securities portfolio.

Non-interest Income
Non-interest income was $113.5 million for the second quarter of 2019, a decrease of $0.7 million, or 0.6%, from the second quarter of 2018 and an increase of $6.4 million, or 6.0%, from the first quarter of 2019. The decrease from the second quarter of 2018 was primarily due to a decrease in servicing fee income driven by continued run-off in the auto finance serviced for others portfolio and a decrease in leasing and equipment finance non-interest income, partially offset by an increase in gains on sales of loans. The increase from the first quarter of 2019 was primarily due to increases in gains on sales of loans, card revenue and fees and service charges.

Non-interest Expense
Non-interest expense was $236.8 million for the second quarter of 2019, a decrease of $35.2 million, or 12.9%, from the second quarter of 2018 and a decrease of $16.2 million, or 6.4%, from the first quarter of 2019. The decrease in non-interest expense from the second quarter of 2018 was primarily due to the $32.0 million settlement with the Consumer Financial Protection Bureau (the "CFPB") and Office of the Comptroller of the Currency (the "OCC") in the second quarter of 2018 and a decrease in compensation and employee benefits expense, partially offset by merger-related expenses of $4.2 million. The decrease in non-interest expense from the first quarter of 2019 was primarily due to decreases in compensation and employee benefits expense and merger-related expenses. The decrease in compensation and employee benefits expense from the second quarter of 2018 was primarily due to lower commissions. The decrease in compensation and employee benefits expense from the first quarter of 2019 was primarily due to seasonality of payroll taxes. Adjusted non-interest expense was $232.6 million for the second quarter of 2019, a decrease of $7.4 million, or 3.1%, from the second quarter of 2018 and $11.0 million, or 4.5%, from the first quarter of 2019 (see "Reconciliation of GAAP to Non-GAAP Financial Measures" tables).

Income Tax Expense
The Company's effective income tax rate was 17.0% for the second quarter of 2019, compared with 20.9% for the second quarter of 2018 and 22.5% for the first quarter of 2019. The effective tax rate for the second quarter of 2019 was impacted by favorable state tax examination developments.

Credit Quality
Provision for credit losses The provision for credit losses was $13.6 million for the second quarter of 2019, a decrease of $0.7 million, or 4.7%, from the second quarter of 2018 and an increase of $3.4 million, or 34.1%, from the first quarter of 2019. The decrease from the second quarter of 2018 was primarily due to a decrease in the provision for credit losses attributable to the auto finance portfolio, partially offset by increases in the provision for credit losses attributable to the commercial and leasing and equipment finance portfolios. The increase from the first quarter of 2019 was primarily due to an increase in the provision for credit losses attributable to the commercial portfolio, partially offset by decreases in the provision for credit losses attributable to the inventory finance and auto finance portfolios.

Net charge-off rate The annualized net charge-off rate was 0.29% for the second quarter of 2019, up 2 basis points from the second quarter of 2018 and down 10 basis points from the first quarter of 2019. The increase from the second quarter of 2018 was primarily due to increased net charge-offs in the commercial portfolio, partially offset by decreased net charge-offs in the auto finance portfolio. The decrease from the first quarter of 2019 was primarily due to decreased net charge-offs in the auto finance portfolio. The annualized net charge-off rate excluding auto finance net charge-offs was 0.19% for the second quarter of 2019, up 9 basis points from the second quarter of 2018 and down 1 basis point from the first quarter of 2019 (see "Reconciliation of GAAP to Non-GAAP Financial Measures" tables).

Over 60-day delinquency rate The over 60-day delinquency rate, excluding non-accrual loans and leases, was 0.14% at June 30, 2019, up 3 basis points from the June 30, 2018 rate and up 2 basis points from the March 31, 2019 rate. The increases from both periods were primarily due to higher delinquencies in the leasing and equipment finance portfolio.

Non-performing assets Non-performing assets, consisting of non-accrual loans and leases and other real estate owned, were $120.0 million at June 30, 2019, an increase of $18.8 million, or 18.6%, from June 30, 2018 and a decrease of $1.7 million, or 1.4%, from March 31, 2019. The increase from June 30, 2018 was primarily due to an increase in consumer real estate non-accrual loans. The decrease from March 31, 2019 was primarily due to a decrease in other real estate owned, partially offset by increases in leasing and equipment finance non-accrual loans and leases and consumer real estate non-accrual loans.

Balance Sheet
Average debt securities held to maturity and debt securities available for sale The total average debt securities portfolio was $3.1 billion for the second quarter of 2019, an increase of $834.3 million, or 37.1%, from the second quarter of 2018 and an increase of $295.1 million, or 10.6%, from the first quarter of 2019. The increases from both periods were primarily due to purchases of available for sale mortgage-backed debt securities, partially offset by sales of available for sale obligations of states and political subdivisions debt securities.

Average loans and leases Average loans and leases were $19.2 billion for the second quarter of 2019, an increase of $145.6 million, or 0.8%, from the second quarter of 2018 and an increase of $52.9 million, or 0.3%, from the first quarter of 2019. The increase from the second quarter of 2018 was primarily due to increases in the consumer real estate, inventory finance and commercial loan portfolios, partially offset by run-off of the auto finance portfolio. The increase from the first quarter of 2019 was primarily due to increases in the commercial and inventory finance loan portfolios, partially offset by run-off of the auto finance portfolio. Average loans and leases excluding auto finance loans were $17.7 billion for the second quarter of 2019, an increase of $1.3 billion, or 7.7%, from the second quarter of 2018 and an increase of $318.3 million, or 1.8%, from the first quarter of 2019 (see "Reconciliation of GAAP to Non-GAAP Financial Measures" tables).

Average deposits Average deposits were $18.9 billion for the second quarter of 2019, an increase of $507.2 million, or 2.8%, from the second quarter of 2018 and an increase of $127.3 million, or 0.7%, from the first quarter of 2019. The increases from both periods were primarily due to increases in savings account balances, partially offset by decreases in certificates of deposit and money market account balances.

Capital TCF continues to maintain strong capital ratios, with a common equity Tier 1 capital ratio of 10.99%. TCF repurchased 1,324,920 shares of its common stock during the second quarter of 2019 and had the authority to repurchase an additional $51.6 million in aggregate value of shares at June 30, 2019, pursuant to its share repurchase program.

On June 27, 2019 TCF priced $150.0 million of 4.125% fixed-to-floating rate subordinated bank notes due 2029, which closed on July 2, 2019.

If the proposed merger with Chemical Financial Corporation closes as anticipated on August 1, 2019, the combined company Board of Directors intends to declare the third quarter 2019 common and preferred stock dividends on that date for the combined company. These dividends are expected to be payable in the third quarter of 2019.

TCF is a Wayzata, Minnesota-based national bank holding company. As of June 30, 2019, TCF had $24.6 billion in total assets and 312 bank 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 and equipment 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, 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, 2018 under the heading "Risk Factors" 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.

Use of Non-GAAP Financial Measures

Management uses the adjusted diluted earnings per common share, adjusted ROACE, ROATCE, adjusted ROATCE, adjusted efficiency ratio, net charge-off rate excluding auto finance net charge-offs, tangible book value per common share and tangible common equity to tangible assets internally to measure performance and believes that these financial measures not recognized under generally accepted accounting principles in the United States ("GAAP") (i.e. non-GAAP) provide meaningful information to investors that will permit them to assess the Company's capital and ability to withstand unexpected market or economic conditions and to assess the performance of the Company in relation to other banking institutions on the same basis as that applied by management, analysts and banking regulators. TCF adjusts certain results to exclude merger-related expenses and the settlement with the CFPB and the OCC, as management believes it is useful to investors in understanding TCF's business and operating results. In addition, TCF adjusts certain results to exclude auto finance because TCF no longer originates auto finance loans, and therefore management believes it is useful to investors in understanding TCF's business and operating results.

These non-GAAP financial measures are not defined by GAAP and other entities may calculate them differently than TCF does. Non-GAAP financial measures have inherent limitations and are not required to be uniformly applied. Although these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of results as reported under GAAP. In particular, a measure of earnings that excludes selected items does not represent the amount that effectively accrues directly to stockholders.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Financial Condition (Unaudited)
																Change From
(Dollars in thousands)	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31, 2019					Jun. 30, 2018
(Dollars in thousands)	2019			2019			2018			2018			2018			$			%		$			%
ASSETS:
Cash and due from banks	$	555,271		$	463,822		$	587,057		$	569,968		$	581,876		$	91,449		19.7	%	$	(26,605	)	(4.6	)%
Investments		105,659			103,644			91,654			80,672			95,661			2,015		1.9			9,998		10.5
Debt securities held to maturity		144,919			148,024			148,852			152,881			155,962			(3,105	)	(2.1	)		(11,043	)	(7.1	)
Debt securities available for sale		3,109,803			2,945,342			2,470,065			2,379,546			2,249,784			164,461		5.6			860,019		38.2
Loans and leases held for sale		74,410			64,468			90,664			114,198			291,871			9,942		15.4			(217,461	)	(74.5	)
Loans and leases:
Consumer real estate:
First mortgage lien		2,472,066			2,480,750			2,444,380			1,960,756			1,800,885			(8,684	)	(0.4	)		671,181		37.3
Junior lien		2,821,099			2,872,807			2,965,960			2,940,701			2,830,029			(51,708	)	(1.8	)		(8,930	)	(0.3	)
Total consumer real estate		5,293,165			5,353,557			5,410,340			4,901,457			4,630,914			(60,392	)	(1.1	)		662,251		14.3
Commercial		4,185,811			3,884,106			3,851,303			3,741,164			3,706,401			301,705		7.8			479,410		12.9
Leasing and equipment finance		4,826,785			4,674,309			4,699,740			4,601,887			4,648,049			152,476		3.3			178,736		3.8
Inventory finance		3,404,214			3,749,146			3,107,356			2,880,404			3,005,165			(344,932	)	(9.2	)		399,049		13.3
Auto finance		1,456,138			1,704,614			1,982,277			2,275,134			2,603,260			(248,476	)	(14.6	)		(1,147,122	)	(44.1	)
Other		18,341			17,943			21,295			21,107			20,957			398		2.2			(2,616	)	(12.5	)
Total loans and leases		19,184,454			19,383,675			19,072,311			18,421,153			18,614,746			(199,221	)	(1.0	)		569,708		3.1
Allowance for loan and lease losses		(146,503	)		(147,972	)		(157,446	)		(160,621	)		(165,619	)		1,469		1.0			19,116		11.5
Net loans and leases		19,037,951			19,235,703			18,914,865			18,260,532			18,449,127			(197,752	)	(1.0	)		588,824		3.2
Premises and equipment, net		432,751			429,711			427,534			429,648			430,956			3,040		0.7			1,795		0.4
Goodwill, net		154,757			154,757			154,757			154,757			154,757		—			—		—			—
Other assets		1,011,309			873,244			814,164			762,583			774,468			138,065		15.8			236,841		30.6
Total assets	$	24,626,830		$	24,418,715		$	23,699,612		$	22,904,785		$	23,184,462		$	208,115		0.9		$	1,442,368		6.2
LIABILITIES AND EQUITY:
Deposits:
Checking	$	6,544,470		$	6,621,261		$	6,381,327		$	6,382,667		$	6,408,174		$	(76,791	)	(1.2	)%	$	136,296		2.1	%
Savings		6,519,587			6,442,544			6,122,257			5,737,144			5,570,979			77,043		1.2			948,608		17.0
Money market		1,443,003			1,468,308			1,609,422			1,504,952			1,562,008			(25,305	)	(1.7	)		(119,005	)	(7.6	)
Certificates of deposit		4,605,327			4,491,998			4,790,680			4,871,748			4,822,112			113,329		2.5			(216,785	)	(4.5	)
Total deposits		19,112,387			19,024,111			18,903,686			18,496,511			18,363,273			88,276		0.5			749,114		4.1
Borrowings:
Short-term borrowings		350,764			355,992		—				2,324			761			(5,228	)	(1.5	)		350,003		N.M.
Long-term borrowings		1,617,531			1,411,426			1,449,472			1,171,541			1,554,569			206,105		14.6			62,962		4.1
Total borrowings		1,968,295			1,767,418			1,449,472			1,173,865			1,555,330			200,877		11.4			412,965		26.6
Accrued expenses and other liabilities		835,630			981,341			790,194			706,397			761,281			(145,711	)	(14.8	)		74,349		9.8
Total liabilities		21,916,312			21,772,870			21,143,352			20,376,773			20,679,884			143,442		0.7			1,236,428		6.0
Equity:
Preferred stock		169,302			169,302			169,302			169,302			169,302		—			—		—			—
Common stock		1,731			1,733			1,736			1,736			1,735			(2	)	(0.1	)		(4	)	(0.2	)
Additional paid-in capital		868,001			875,797			885,089			882,321			877,364			(7,796	)	(0.9	)		(9,363	)	(1.1	)
Retained earnings, subject to certain restrictions		1,874,308			1,810,701			1,766,994			1,708,410			1,649,449			63,607		3.5			224,859		13.6
Accumulated other comprehensive income (loss)		37,334			5,481			(33,138	)		(65,259	)		(52,811	)		31,853		N.M.			90,145		N.M.
Treasury stock at cost and other		(265,016	)		(246,621	)		(252,182	)		(189,652	)		(164,107	)		(18,395	)	(7.5	)		(100,909	)	(61.5	)
Total TCF Financial Corporation stockholders' equity		2,685,660			2,616,393			2,537,801			2,506,858			2,480,932			69,267		2.6			204,728		8.3
Non-controlling interest in subsidiaries		24,858			29,452			18,459			21,154			23,646			(4,594	)	(15.6	)		1,212		5.1
Total equity		2,710,518			2,645,845			2,556,260			2,528,012			2,504,578			64,673		2.4			205,940		8.2
Total liabilities and equity	$	24,626,830		$	24,418,715		$	23,699,612		$	22,904,785		$	23,184,462		$	208,115		0.9		$	1,442,368		6.2

N.M. Not Meaningful

TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)

	Quarter Ended										Change From
(Dollars in thousands)	Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31, 2019					Jun. 30, 2018
(Dollars in thousands)	2019		2019		2018		2018		2018		$			%		$			%
Interest income:
Loans and leases	$	279,447	$	279,594	$	270,804	$	264,678	$	269,280	$	(147	)	(0.1	)%	$	10,167		3.8	%
Debt securities available for sale		22,325		18,815		17,097		14,838		12,516		3,510		18.7			9,809		78.4
Debt securities held to maturity		924		535		965		988		998		389		72.7			(74	)	(7.4	)
Loans held for sale and other		4,247		4,301		4,631		6,678		3,529		(54	)	(1.3	)		718		20.3
Total interest income		306,943		303,245		293,497		287,182		286,323		3,698		1.2			20,620		7.2
Interest expense:
Deposits		40,542		37,480		33,315		27,335		23,953		3,062		8.2			16,589		69.3
Borrowings		16,077		14,858		11,294		10,726		11,571		1,219		8.2			4,506		38.9
Total interest expense		56,619		52,338		44,609		38,061		35,524		4,281		8.2			21,095		59.4
Net interest income		250,324		250,907		248,888		249,121		250,799		(583	)	(0.2	)		(475	)	(0.2	)
Provision for credit losses		13,569		10,122		18,894		2,270		14,236		3,447		34.1			(667	)	(4.7	)
Net interest income after provision for credit losses		236,755		240,785		229,994		246,851		236,563		(4,030	)	(1.7	)		192		0.1
Non-interest income:
Leasing and equipment finance		42,126		41,139		55,311		45,045		42,904		987		2.4			(778	)	(1.8	)
Fees and service charges		32,477		31,324		36,206		32,574		32,670		1,153		3.7			(193	)	(0.6	)
Card revenue		15,632		14,243		15,078		15,065		14,962		1,389		9.8			670		4.5
ATM revenue		4,863		4,440		5,054		5,053		4,933		423		9.5			(70	)	(1.4	)
Gains on sales of loans, net		10,828		7,972		8,419		8,764		7,192		2,856		35.8			3,636		50.6
Servicing fee income		4,523		5,110		5,523		6,032		7,484		(587	)	(11.5	)		(2,961	)	(39.6	)
Gains (losses) on debt securities, net		1,066		451		167		94		24		615		136.4			1,042		N.M.
Other		1,936		2,347		2,375		3,818		3,934		(411	)	(17.5	)		(1,998	)	(50.8	)
Total non-interest income		113,451		107,026		128,133		116,445		114,103		6,425		6.0			(652	)	(0.6	)
Non-interest expense:
Compensation and employee benefits		114,369		121,557		129,521		123,127		120,575		(7,188	)	(5.9	)		(6,206	)	(5.1	)
Occupancy and equipment		41,828		41,737		42,250		42,337		40,711		91		0.2			1,117		2.7
Lease financing equipment depreciation		19,133		19,256		19,085		19,525		17,945		(123	)	(0.6	)		1,188		6.6
Foreclosed real estate and repossessed assets, net		2,448		4,630		4,396		3,881		3,857		(2,182	)	(47.1	)		(1,409	)	(36.5	)
Merger-related expenses		4,226		9,458	—		—		—			(5,232	)	(55.3	)		4,226		N.M.
Other		54,845		56,437		54,706		57,553		88,951		(1,592	)	(2.8	)		(34,106	)	(38.3	)
Total non-interest expense		236,849		253,075		249,958		246,423		272,039		(16,226	)	(6.4	)		(35,190	)	(12.9	)
Income before income tax expense		113,357		94,736		108,169		116,873		78,627		18,621		19.7			34,730		44.2
Income tax expense		19,314		21,287		20,013		28,034		16,418		(1,973	)	(9.3	)		2,896		17.6
Income after income tax expense		94,043		73,449		88,156		88,839		62,209		20,594		28.0			31,834		51.2
Income attributable to non-controlling interest		3,616		2,955		2,504		2,643		3,460		661		22.4			156		4.5
Net income attributable to TCF Financial Corporation		90,427		70,494		85,652		86,196		58,749		19,933		28.3			31,678		53.9
Preferred stock dividends		2,494		2,493		2,494		2,494		2,494		1		—		—			—
Net income available to common stockholders	$	87,933	$	68,001	$	83,158	$	83,702	$	56,255	$	19,932		29.3		$	31,678		56.3

N.M. Not Meaningful

TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)

	Six Months Ended June 30,				Change
(Dollars in thousands, except per share data)	2019		2018		$			%
Interest income:
Loans and leases	$	559,041	$	529,655	$	29,386		5.5		%
Debt securities available for sale		41,140		22,639		18,501		81.7
Debt securities held to maturity		1,459		2,017		(558	)	(27.7	)
Loans held for sale and other		8,548		7,274		1,274		17.5
Total interest income		610,188		561,585		48,603		8.7
Interest expense:
Deposits		78,022		46,463		31,559		67.9
Borrowings		30,935		21,124		9,811		46.4
Total interest expense		108,957		67,587		41,370		61.2
Net interest income		501,231		493,998		7,233		1.5
Provision for credit losses		23,691		25,604		(1,913	)	(7.5	)
Net interest income after provision for credit losses		477,540		468,394		9,146		2.0
Non-interest income:
Leasing and equipment finance		83,265		84,751		(1,486	)	(1.8	)
Fees and service charges		63,801		63,421		380		0.6
Card revenue		29,875		28,721		1,154		4.0
ATM revenue		9,303		9,583		(280	)	(2.9	)
Gains on sales of loans, net		18,800		16,315		2,485		15.2
Servicing fee income		9,633		15,779		(6,146	)	(39.0	)
Gains (losses) on debt securities, net		1,517		87		1,430		N.M.
Other		4,283		7,650		(3,367	)	(44.0	)
Total non-interest income		220,477		226,307		(5,830	)	(2.6	)
Non-interest expense:
Compensation and employee benefits		235,926		244,415		(8,489	)	(3.5	)
Occupancy and equipment		83,565		81,225		2,340		2.9
Lease financing equipment depreciation		38,389		35,219		3,170		9.0
Foreclosed real estate and repossessed assets, net		7,078		8,773		(1,695	)	(19.3	)
Merger-related expenses		13,684	—			13,684		N.M.
Other		111,282		148,387		(37,105	)	(25.0	)
Total non-interest expense		489,924		518,019		(28,095	)	(5.4	)
Income before income tax expense		208,093		176,682		31,411		17.8
Income tax expense		40,601		38,049		2,552		6.7
Income after income tax expense		167,492		138,633		28,859		20.8
Income attributable to non-controlling interest		6,571		6,123		448		7.3
Net income attributable to TCF Financial Corporation		160,921		132,510		28,411		21.4
Preferred stock dividends		4,987		6,600		(1,613	)	(24.4	)
Impact of preferred stock redemption	—			3,481		(3,481	)	(100.0	)
Net income available to common stockholders	$	155,934	$	122,429	$	33,505		27.4

Earnings per common share:
Basic	$	0.96	$	0.73	$	0.23		31.5		%
Diluted		0.96		0.73		0.23		31.5

Dividends declared per common share	$	0.30	$	0.30	$	—		—		%

N.M. Not Meaningful

TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields and Rates (Unaudited)

	Quarter Ended June 30,
	2019						2018
	Average				Yields and		Average				Yields and
(Dollars in thousands)	Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾		Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾
ASSETS:
Investments and other	$	392,193	$	3,651	3.71	%	$	309,120	$	2,857	3.71	%
Debt securities held to maturity		146,296		924	2.53			155,779		998	2.56
Debt securities available for sale:
Taxable		2,711,984		21,117	3.11			1,262,642		8,163	2.59
Tax-exempt⁽³⁾		222,534		1,530	2.75			828,131		5,510	2.66
Loans and leases held for sale		40,835		596	5.86			45,525		672	5.93
Loans and leases:⁽⁴⁾
Consumer real estate:
Fixed-rate		2,349,154		29,159	4.97			1,715,289		23,612	5.52
Variable- and adjustable-rate		2,985,714		50,673	6.81			3,026,310		48,331	6.41
Total consumer real estate		5,334,868		79,832	6.00			4,741,599		71,943	6.09
Commercial:
Fixed-rate		817,744		9,013	4.42			900,462		10,087	4.49
Variable- and adjustable-rate		3,168,127		44,843	5.68			2,802,059		38,044	5.45
Total commercial		3,985,871		53,856	5.42			3,702,521		48,131	5.21
Leasing and equipment finance		4,743,747		60,554	5.11			4,639,703		57,236	4.93
Inventory finance		3,588,051		64,967	7.26			3,299,996		57,138	6.94
Auto finance		1,575,715		21,121	5.38			2,695,943		35,632	5.30
Other		10,918		131	4.78			13,845		143	4.10
Total loans and leases		19,239,170		280,461	5.84			19,093,607		270,223	5.67
Total interest-earning assets		22,753,012		308,279	5.43			21,694,804		288,423	5.33
Other assets		1,730,810						1,430,621
Total assets	$	24,483,822					$	23,125,425
LIABILITIES AND EQUITY:
Non-interest bearing deposits	$	3,980,811					$	3,879,048
Interest-bearing deposits:
Checking		2,479,814		440	0.07			2,460,709		119	0.02
Savings		6,452,510		12,314	0.77			5,542,565		3,736	0.27
Money market		1,430,556		4,588	1.29			1,572,560		2,620	0.67
Certificates of deposit		4,527,822		23,200	2.05			4,909,422		17,478	1.43
Total interest-bearing deposits		14,890,702		40,542	1.09			14,485,256		23,953	0.66
Total deposits		18,871,513		40,542	0.86			18,364,304		23,953	0.52
Borrowings:
Short-term borrowings		321,043		2,131	2.63			3,116		18	2.33
Long-term borrowings		1,657,527		13,946	3.34			1,531,389		11,553	3.02
Total borrowings		1,978,570		16,077	3.23			1,534,505		11,571	3.02
Total interest-bearing liabilities		16,869,272		56,619	1.34			16,019,761		35,524	0.89
Total deposits and borrowings		20,850,083		56,619	1.09			19,898,809		35,524	0.72
Accrued expenses and other liabilities		969,723						714,488
Total liabilities		21,819,806						20,613,297
Total TCF Financial Corporation stockholders' equity		2,634,386						2,483,474
Non-controlling interest in subsidiaries		29,630						28,654
Total equity		2,664,016						2,512,128
Total liabilities and equity	$	24,483,822					$	23,125,425
Net interest income and margin			$	251,660	4.43				$	252,899	4.67
(1) Interest and yields are presented on a fully tax-equivalent basis. (2) Annualized (3) The yield on tax-exempt debt securities available for sale is computed on a tax-equivalent basis using a statutory federal income tax rate of 21%. (4) Average balances of loans and leases include non-accrual loans and leases and are presented net of unearned income.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields and Rates (Unaudited)

	Six Months Ended June 30,
	2019						2018
	Average				Yields and		Average				Yields and
(Dollars in thousands)	Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾		Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾
ASSETS:
Investments and other	$	379,513	$	7,132	3.77	%	$	320,655	$	5,633	3.54	%
Debt securities held to maturity		146,922		1,459	1.99			157,450		2,017	2.56
Debt securities available for sale:
Taxable		2,418,221		37,248	3.08			1,123,017		13,976	2.49
Tax-exempt⁽³⁾		368,952		4,927	2.67			824,906		10,966	2.66
Loans and leases held for sale		47,980		1,416	5.94			54,261		1,641	6.09
Loans and leases:⁽⁴⁾
Consumer real estate:
Fixed-rate		2,350,946		59,046	5.05			1,750,765		48,225	5.55
Variable- and adjustable-rate		3,013,329		102,360	6.85			3,019,212		94,212	6.29
Total consumer real estate		5,364,275		161,406	6.06			4,769,977		142,437	6.02
Commercial:
Fixed-rate		817,498		18,077	4.46			915,784		20,684	4.55
Variable- and adjustable-rate		3,090,597		88,375	5.77			2,736,267		71,204	5.25
Total commercial		3,908,095		106,452	5.49			3,652,051		91,888	5.07
Leasing and equipment finance		4,699,969		119,775	5.10			4,665,144		113,643	4.87
Inventory finance		3,521,537		127,832	7.32			3,214,618		108,333	6.80
Auto finance		1,707,690		45,336	5.35			2,857,169		74,917	5.29
Other		11,298		264	4.69			14,145		290	4.13
Total loans and leases		19,212,864		561,065	5.88			19,173,104		531,508	5.58
Total interest-earning assets		22,574,452		613,247	5.46			21,653,393		565,741	5.26
Other assets		1,721,970						1,442,117
Total assets	$	24,296,422					$	23,095,510
LIABILITIES AND EQUITY:
Non-interest bearing deposits	$	3,950,447					$	3,812,765
Interest-bearing deposits:
Checking		2,468,852		827	0.07			2,461,126		232	0.02
Savings		6,353,800		22,984	0.73			5,469,523		6,901	0.25
Money market		1,460,427		9,041	1.25			1,634,965		5,029	0.62
Certificates of deposit		4,574,710		45,170	1.99			4,953,533		34,301	1.40
Total interest-bearing deposits		14,857,789		78,022	1.06			14,519,147		46,463	0.65
Total deposits		18,808,236		78,022	0.84			18,331,912		46,463	0.51
Borrowings:
Short-term borrowings		307,347		4,088	2.65			3,532		37	2.14
Long-term borrowings		1,579,613		26,847	3.39			1,477,531		21,087	2.87
Total borrowings		1,886,960		30,935	3.27			1,481,063		21,124	2.87
Total interest-bearing liabilities		16,744,749		108,957	1.31			16,000,210		67,587	0.85
Total deposits and borrowings		20,695,196		108,957	1.06			19,812,975		67,587	0.69
Accrued expenses and other liabilities		979,359						736,201
Total liabilities		21,674,555						20,549,176
Total TCF Financial Corporation stockholders' equity		2,594,778						2,520,396
Non-controlling interest in subsidiaries		27,089						25,938
Total equity		2,621,867						2,546,334
Total liabilities and equity	$	24,296,422					$	23,095,510
Net interest income and margin			$	504,290	4.49				$	498,154	4.63
(1) Interest and yields are presented on a fully tax-equivalent basis. (2) Annualized (3) The yield on tax-exempt debt securities available for sale is computed on a tax-equivalent basis using a statutory federal income tax rate of 21%. (4) Average balances of loans and leases include non-accrual loans and leases and are presented net of unearned income.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Quarterly Average Balance Sheets (Unaudited)

	Quarter Ended										Change From
	Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31, 2019					Jun. 30, 2018
(Dollars in thousands)	2019		2019		2018		2018		2018		$			%		$			%
ASSETS:
Investments and other	$	392,193	$	366,691	$	330,359	$	306,257	$	309,120	$	25,502		7.0	%	$	83,073		26.9	%
Debt securities held to maturity		146,296		147,556		150,016		153,652		155,779		(1,260	)	(0.9	)		(9,483	)	(6.1	)
Debt securities available for sale:
Taxable		2,711,984		2,121,196		1,779,654		1,525,665		1,262,642		590,788		27.9			1,449,342		114.8
Tax-exempt		222,534		516,995		788,806		823,854		828,131		(294,461	)	(57.0	)		(605,597	)	(73.1	)
Loans and leases held for sale		40,835		55,204		86,169		216,669		45,525		(14,369	)	(26.0	)		(4,690	)	(10.3	)
Loans and leases:⁽¹⁾
Consumer real estate:
Fixed-rate		2,349,154		2,352,758		1,962,804		1,694,661		1,715,289		(3,604	)	(0.2	)		633,865		37.0
Variable- and adjustable-rate		2,985,714		3,041,252		3,067,216		3,002,225		3,026,310		(55,538	)	(1.8	)		(40,596	)	(1.3	)
Total consumer real estate		5,334,868		5,394,010		5,030,020		4,696,886		4,741,599		(59,142	)	(1.1	)		593,269		12.5
Commercial:
Fixed-rate		817,744		817,250		815,626		856,324		900,462		494		0.1			(82,718	)	(9.2	)
Variable- and adjustable-rate		3,168,127		3,012,206		2,932,739		2,921,471		2,802,059		155,921		5.2			366,068		13.1
Total commercial		3,985,871		3,829,456		3,748,365		3,777,795		3,702,521		156,415		4.1			283,350		7.7
Leasing and equipment finance		4,743,747		4,655,705		4,616,715		4,624,968		4,639,703		88,042		1.9			104,044		2.2
Inventory finance		3,588,051		3,454,283		3,024,961		2,866,460		3,299,996		133,768		3.9			288,055		8.7
Auto finance		1,575,715		1,841,130		2,121,969		2,435,868		2,695,943		(265,415	)	(14.4	)		(1,120,228	)	(41.6	)
Other		10,918		11,682		12,599		13,547		13,845		(764	)	(6.5	)		(2,927	)	(21.1	)
Total loans and leases		19,239,170		19,186,266		18,554,629		18,415,524		19,093,607		52,904		0.3			145,563		0.8
Total interest-earning assets		22,753,012		22,393,908		21,689,633		21,441,621		21,694,804		359,104		1.6			1,058,208		4.9
Other assets		1,730,810		1,713,033		1,464,620		1,462,783		1,430,621		17,777		1.0			300,189		21.0
Total assets	$	24,483,822	$	24,106,941	$	23,154,253	$	22,904,404	$	23,125,425	$	376,881		1.6		$	1,358,397		5.9
LIABILITIES AND EQUITY:
Non-interest bearing deposits	$	3,980,811	$	3,919,746	$	3,873,023	$	3,874,421	$	3,879,048	$	61,065		1.6	%	$	101,763		2.6	%
Interest-bearing deposits:
Checking		2,479,814		2,457,767		2,403,370		2,427,288		2,460,709		22,047		0.9			19,105		0.8
Savings		6,452,510		6,253,992		5,922,724		5,620,161		5,542,565		198,518		3.2			909,945		16.4
Money market		1,430,556		1,490,631		1,449,531		1,496,223		1,572,560		(60,075	)	(4.0	)		(142,004	)	(9.0	)
Certificates of deposit		4,527,822		4,622,120		4,818,211		4,868,286		4,909,422		(94,298	)	(2.0	)		(381,600	)	(7.8	)
Total interest-bearing deposits		14,890,702		14,824,510		14,593,836		14,411,958		14,485,256		66,192		0.4			405,446		2.8
Total deposits		18,871,513		18,744,256		18,466,859		18,286,379		18,364,304		127,257		0.7			507,209		2.8
Borrowings:
Short-term borrowings		321,043		293,499		2,738		3,357		3,116		27,544		9.4			317,927		N.M.
Long-term borrowings		1,657,527		1,500,832		1,344,228		1,351,585		1,531,389		156,695		10.4			126,138		8.2
Total borrowings		1,978,570		1,794,331		1,346,966		1,354,942		1,534,505		184,239		10.3			444,065		28.9
Total interest-bearing liabilities		16,869,272		16,618,841		15,940,802		15,766,900		16,019,761		250,431		1.5			849,511		5.3
Total deposits and borrowings		20,850,083		20,538,587		19,813,825		19,641,321		19,898,809		311,496		1.5			951,274		4.8
Accrued expenses and other liabilities		969,723		989,104		822,558		751,100		714,488		(19,381	)	(2.0	)		255,235		35.7
Total liabilities		21,819,806		21,527,691		20,636,383		20,392,421		20,613,297		292,115		1.4			1,206,509		5.9
Total TCF Financial Corporation stockholders' equity		2,634,386		2,554,729		2,495,952		2,488,435		2,483,474		79,657		3.1			150,912		6.1
Non-controlling interest in subsidiaries		29,630		24,521		21,918		23,548		28,654		5,109		20.8			976		3.4
Total equity		2,664,016		2,579,250		2,517,870		2,511,983		2,512,128		84,766		3.3			151,888		6.0
Total liabilities and equity	$	24,483,822	$	24,106,941	$	23,154,253	$	22,904,404	$	23,125,425	$	376,881		1.6		$	1,358,397		5.9
N.M. Not Meaningful (1) Average balances of loans and leases include non-accrual loans and leases and are presented net of unearned income.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Quarterly Yields and Rates⁽¹⁾⁽²⁾ (Unaudited)

	Quarter Ended										Change From
	Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,			Jun. 30,
	2019		2019		2018		2018		2018		2019			2018
ASSETS:
Investments and other	3.71	%	3.82	%	3.90	%	4.01	%	3.71	%	(11	)	bps	—		bps
Debt securities held to maturity	2.53		1.45		2.58		2.57		2.56		108			(3	)
Debt securities available for sale:
Taxable	3.11		3.04		2.91		2.76		2.59		7			52
Tax-exempt⁽³⁾	2.75		2.63		2.66		2.66		2.66		12			9
Loans and leases held for sale	5.86		6.01		6.40		6.57		5.93		(15	)		(7	)
Loans and leases:
Consumer real estate:
Fixed-rate	4.97		5.12		5.33		5.46		5.52		(15	)		(55	)
Variable- and adjustable-rate	6.81		6.89		6.77		6.57		6.41		(8	)		40
Total consumer real estate	6.00		6.12		6.21		6.17		6.09		(12	)		(9	)
Commercial:
Fixed-rate	4.42		4.50		4.51		4.55		4.49		(8	)		(7	)
Variable- and adjustable-rate	5.68		5.86		5.65		5.45		5.45		(18	)		23
Total commercial	5.42		5.57		5.40		5.25		5.21		(15	)		21
Leasing and equipment finance	5.11		5.09		5.11		5.00		4.93		2			18
Inventory finance	7.26		7.38		7.11		7.16		6.94		(12	)		32
Auto finance	5.38		5.33		5.39		5.36		5.30		5			8
Other	4.78		4.61		4.55		4.25		4.10		17			68
Total loans and leases	5.84		5.91		5.82		5.73		5.67		(7	)		17

Total interest-earning assets	5.43		5.50		5.42		5.36		5.33		(7	)		10

LIABILITIES:
Interest-bearing deposits:
Checking	0.07		0.06		0.04		0.04		0.02		1			5
Savings	0.77		0.69		0.54		0.35		0.27		8			50
Money market	1.29		1.21		0.99		0.78		0.67		8			62
Certificates of deposit	2.05		1.93		1.76		1.56		1.43		12			62
Total interest-bearing deposits	1.09		1.02		0.91		0.75		0.66		7			43
Total deposits	0.86		0.81		0.72		0.59		0.52		5			34
Borrowings:
Short-term borrowings	2.63		2.67		2.76		2.46		2.33		(4	)		30
Long-term borrowings	3.34		3.44		3.34		3.15		3.02		(10	)		32
Total borrowings	3.23		3.31		3.34		3.15		3.02		(8	)		21

Total interest-bearing liabilities	1.34		1.27		1.11		0.96		0.89		7			45

Net interest margin	4.43		4.56		4.60		4.66		4.67		(13	)		(24	)
(1) Annualized (2) Yields are presented on a fully tax-equivalent basis. (3) The yield on tax-exempt debt securities available for sale is computed on a tax-equivalent basis using a statutory federal income tax rate of 21%.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Summary of Credit Quality Data (Unaudited)

Allowance for Loan and Lease Losses

	Jun. 30,				Mar. 31,				Dec. 31,				Sep. 30,				Jun. 30,
	2019				2019				2018				2018				2018
			% of				% of				% of				% of				% of
(Dollars in thousands)	Balance		Portfolio		Balance		Portfolio		Balance		Portfolio		Balance		Portfolio		Balance		Portfolio
Consumer real estate	$	43,980	0.83	%	$	43,820	0.82	%	$	44,866	0.83	%	$	45,258	0.92	%	$	43,954	0.95	%
Commercial	36,789		0.88		34,711		0.89		41,182		1.07		40,470		1.08		40,291		1.09
Leasing and equipment finance	26,270		0.54		24,832		0.53		23,791		0.51		22,926		0.50		22,247		0.48
Inventory finance	12,733		0.37		14,132		0.38		12,456		0.40		11,361		0.39		11,840		0.39
Auto finance	25,940		1.78		29,854		1.75		34,329		1.73		39,852		1.75		46,608		1.79
Other	791		4.31		623		3.47		822		3.86		754		3.57		679		3.24
Total	$	146,503	0.76		$	147,972	0.76		$	157,446	0.83		$	160,621	0.87		$	165,619	0.89

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,
(In thousands)	2019			2019			2018			2018			2018			2019			2018
Balance, beginning of period	$	147,972		$	157,446		$	160,621		$	165,619		$	167,703		$	(9,474	)	$	(19,731	)
Charge-offs		(21,066	)		(24,431	)		(27,227	)		(19,448	)		(18,188	)		3,365			(2,878	)
Recoveries		6,984			5,777			5,913			12,658			5,418			1,207			1,566
Net (charge-offs) recoveries		(14,082	)		(18,654	)		(21,314	)		(6,790	)		(12,770	)		4,572			(1,312	)
Provision for credit losses		13,569			10,122			18,894			2,270			14,236			3,447			(667	)
Other		(956	)		(942	)		(755	)		(478	)		(3,550	)		(14	)		2,594
Balance, end of period	$	146,503		$	147,972		$	157,446		$	160,621		$	165,619		$	(1,469	)	$	(19,116	)

Net Charge-offs

	Quarter Ended
	Jun. 30,				Mar. 31,					Dec. 31,					Sep. 30,					Jun. 30,
	2019				2019					2018					2018					2018
(Dollars in thousands)	Balance		Rate⁽¹⁾		Balance			Rate⁽¹⁾		Balance			Rate⁽¹⁾		Balance			Rate⁽¹⁾		Balance			Rate⁽¹⁾
Consumer real estate:
First mortgage lien	$	162	0.03	%	$	628		0.10	%	$	123		0.02	%	$	(3,721	)	(0.82	)%	$	714		0.16	%
Junior lien		152	0.02			(180	)	(0.02	)		(210	)	(0.03	)		(2,709	)	(0.37	)		64		0.01
Total consumer real estate		314	0.02			448		0.03			(87	)	(0.01	)		(6,430	)	(0.55	)		778		0.07
Commercial		3,445	0.35			2,088		0.22			3,406		0.36			(8	)	—			(27	)	—
Leasing and equipment finance		2,043	0.17			2,470		0.21			2,067		0.18			1,930		0.17			2,106		0.18
Inventory finance		1,289	0.14			2,087		0.24			4,629		0.61			637		0.09			517		0.06
Auto finance		5,903	1.50			10,182		2.21			9,887		1.86			9,485		1.56			8,516		1.26
Other		1,088	N.M.			1,379		N.M.			1,412		N.M.			1,176		N.M.			880		N.M.
Total	$	14,082	0.29		$	18,654		0.39		$	21,314		0.46		$	6,790		0.15		$	12,770		0.27
N.M. Not Meaningful (1) Annualized net charge-off rate based on average loans and leases

TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Summary of Credit Quality Data (Unaudited), Continued

Over 60-Day Delinquencies as a Percentage of Portfolio⁽¹⁾
											Change From
	Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,			Jun. 30,
	2019		2019		2018		2018		2018		2019			2018
Consumer real estate:
First mortgage lien	0.17	%	0.20	%	0.19	%	0.18	%	0.20	%	(3	)	bps	(3	)	bps
Junior lien	0.06		0.08		0.04		0.04		0.07		(2	)		(1	)
Total consumer real estate	0.11		0.14		0.11		0.10		0.12		(3	)		(1	)
Commercial	—		—		—		—		—		—			—
Leasing and equipment finance	0.25		0.20		0.23		0.15		0.11		5			14
Inventory finance	—		—		0.01		—		—		—			—
Auto finance	0.54		0.38		0.59		0.41		0.33		16			21
Other	0.15		0.11		0.14		0.30		0.16		4			(1	)
Subtotal	0.13		0.12		0.15		0.11		0.11		1			2
Portfolios acquired with deteriorated credit quality	19.87		6.75		4.65		16.70		13.48		1312			639
Total delinquencies	0.14		0.12		0.15		0.12		0.11		2			3
(1) Excludes non-accrual loans and leases

Non-performing Assets
						Change From
	Jun. 30,	Mar. 31,	Dec. 31,	Sep. 30,	Jun. 30,	Mar. 31,		Jun. 30,
(Dollars in thousands)	2019	2019	2018	2018	2018	2019		2018
Non-accrual loans and leases:
Consumer real estate	$67,446	$65,518	$58,765	$55,092	$49,155	$1,928		$18,291
Commercial	6,793	7,529	15,025	9,888	9,978	(736)		(3,185)
Leasing and equipment finance	22,708	20,235	15,264	16,061	16,300	2,473		6,408
Inventory finance	2,413	969	8,283	1,640	2,093	1,444		320
Auto finance	8,633	9,033	8,578	7,613	7,312	(400)		1,321
Other	—	1	3	2	21	(1)		(21)
Total non-accrual loans and leases	107,993	103,285	105,918	90,296	84,859	4,708		23,134
Other real estate owned	11,964	18,361	17,403	19,079	16,266	(6,397)		(4,302)
Total non-performing assets	$119,957	$121,646	$123,321	$109,375	$101,125	$(1,689)		$18,832

Non-accrual loans and leases as a percentage of total loans and leases	0.56%	0.53%	0.56%	0.49%	0.46%	3	bps	10	bps
Non-performing assets as a percentage of total loans and leases and other real estate owned	0.62	0.63	0.65	0.59	0.54	(1)		8
Allowance for loan and lease losses as a percentage of non-accrual loans and leases	135.66	143.27	148.65	177.88	195.17	(761)		(5,951)

TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Capital Information (Unaudited)

	At or For the Quarter Ended															Change From
(Dollars in thousands, except per share data)	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,		Jun. 30,
(Dollars in thousands, except per share data)	2019			2019			2018			2018			2018			2019		2018
Dividends declared per common share	$	0.15		$	0.15		$	0.15		$	0.15		$	0.15		—	%	—		%
Book value per common share		15.46			14.93			14.45			14.01			13.79		3.5		12.1
Tangible book value per common share⁽¹⁾		14.39			13.86			13.38			12.96			12.73		3.8		13.0
Common equity to assets		10.22	%		10.02	%		9.99	%		10.21	%		9.97	%	20	bps	25		bps
Tangible common equity to tangible assets⁽¹⁾		9.58			9.37			9.32			9.51			9.28		21		30

Regulatory Capital:⁽²⁾
Common equity Tier 1 capital	$	2,305,706		$	2,266,244		$	2,224,183		$	2,226,820		$	2,186,528		1.7	%	5.5		%
Tier 1 capital		2,495,178			2,459,132			2,408,393			2,412,869			2,375,210		1.5		5.1
Total capital		2,811,347			2,792,419			2,750,581			2,754,615			2,728,076		0.7		3.1

Common equity Tier 1 capital ratio		10.99	%		10.79	%		10.82	%		11.04	%		10.60	%	20	bps	39		bps
Tier 1 risk-based capital ratio		11.90			11.71			11.72			11.96			11.51		19		39
Total risk-based capital ratio		13.41			13.30			13.38			13.66			13.22		11		19
Tier 1 leverage ratio		10.27			10.26			10.44			10.58			10.31		1		(4	)
(1) See "Reconciliation of GAAP to Non-GAAP Financial Measures" tables (2) June 30, 2019 amounts are preliminary pending completion and filing of the Company's regulatory reports

TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)

Computation of adjusted diluted earnings per common share:

		Quarter Ended
		Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,
(Dollars in thousands, except per share data)		2019		2019		2018		2018		2018
Net income available to common stockholders		$	87,933	$	68,001	$	83,158	$	83,702	$	56,255
Less: Earnings allocated to participating securities			17		13		12		13		8
Earnings allocated to common stock	(a)		87,916		67,988		83,146		83,689		56,247
Plus: Merger-related expenses			4,226		9,458	—		—		—
Plus: CFPB/OCC settlement adjustment		—		—		—		—			32,000
Less: Related income tax expense			1,003		2,252	—		—			6,491
Adjusted earnings allocated to common stock	(b)	$	91,139	$	75,194	$	83,146	$	83,689	$	81,756

Weighted-average common shares outstanding used in diluted earnings per common share calculation	(c)		162,305,154		162,427,823		163,878,805		165,533,225		166,857,640

Diluted earnings per common share	(a) / (c)	$	0.54	$	0.42	$	0.51	$	0.51	$	0.34
Adjusted diluted earnings per common share	(b) / (c)		0.56		0.46		0.51		0.51		0.49

Computation of net charge-off rate excluding auto finance:

		Quarter Ended
		Jun. 30,			Mar. 31,			Jun. 30,
(Dollars in thousands)		2019			2019			2018
Net charge-offs	(a)	$	14,082		$	18,654		$	12,770
Less: Auto finance net charge-offs			5,903			10,182			8,516
Total net charge-offs excluding auto finance net charge-offs	(b)		8,179			8,472			4,254

Average total loans and leases	(c)	$	19,239,170		$	19,186,266		$	19,093,607
Less: Average auto finance loans			1,575,715			1,841,130			2,695,943
Average total loans and leases excluding auto finance loans	(d)	$	17,663,455		$	17,345,136		$	16,397,664

Net charge-off rate⁽¹⁾	(a) / (c)		0.29	%		0.39	%		0.27	%
Net charge-off rate excluding auto finance net charge-offs⁽¹⁾	(b) / (d)		0.19			0.20			0.10
(1) Annualized

TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited), Continued

Computation of adjusted return on average common equity, return on average tangible common equity and adjusted return on average tangible common equity:

		Quarter Ended
		Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,
(Dollars in thousands)		2019			2019			2018			2018			2018
Net income available to common stockholders	(a)	$	87,933		$	68,001		$	83,158		$	83,702		$	56,255
Plus: Other intangibles amortization⁽¹⁾			800			814			847			913			835
Less: Related income tax expense			190			194			198			220			201
Net income available to common stockholders used in ROATCE calculation	(b)	$	88,543		$	68,621		$	83,807		$	84,395		$	56,889

Adjusted net income available to common stockholders:
Net income available to common stockholders		$	87,933		$	68,001		$	83,158		$	83,702		$	56,255
Plus: Merger-related expenses			4,226			9,458		—			—			—
Plus: CFPB/OCC settlement adjustment		—			—			—			—				32,000
Less: Related income tax expense			1,003			2,252		—			—				6,491
Net income available to common stockholders used in adjusted ROACE calculation	(c)		91,156			75,207			83,158			83,702			81,764
Plus: Other intangibles amortization⁽¹⁾			800			814			847			913			835
Less: Related income tax expense			190			194			198			220			201
Net income available to common stockholders used in adjusted ROATCE calculation	(d)	$	91,766		$	75,827		$	83,807		$	84,395		$	82,398

Average balances:
Total equity		$	2,664,016		$	2,579,250		$	2,517,870		$	2,511,983		$	2,512,128
Less: Non-controlling interest in subsidiaries			29,630			24,521			21,918			23,548			28,654
Total TCF Financial Corporation stockholders' equity			2,634,386			2,554,729			2,495,952			2,488,435			2,483,474
Less: Preferred stock			169,302			169,302			169,302			169,302			169,302
Average total common stockholders' equity	(e)		2,465,084			2,385,427			2,326,650			2,319,133			2,314,172
Less: Goodwill, net			154,757			154,757			154,757			154,757			154,757
Less: Other intangibles, net⁽¹⁾			19,289			20,102			20,931			21,798			22,672
Average tangible common stockholders' equity used in ROATCE calculation	(f)	$	2,291,038		$	2,210,568		$	2,150,962		$	2,142,578		$	2,136,743

Adjusted average total common stockholders' equity:
Average total common stockholders' equity		$	2,465,084		$	2,385,427		$	2,326,650		$	2,319,133		$	2,314,172
Plus: CFPB/OCC settlement adjustment to average total common stockholders' equity		—			—			—			—				4,205
Average total common stockholders' equity used in adjusted ROACE calculation	(g)		2,465,084			2,385,427			2,326,650			2,319,133			2,318,377
Less: Goodwill, net			154,757			154,757			154,757			154,757			154,757
Less: Other intangibles, net⁽¹⁾			19,289			20,102			20,931			21,798			22,672
Average tangible common stockholders' equity used in adjusted ROATCE calculation	(h)	$	2,291,038		$	2,210,568		$	2,150,962		$	2,142,578		$	2,140,948

ROACE⁽²⁾	(a) / (e)		14.27	%		11.40	%		14.30	%		14.44	%		9.72	%
Adjusted ROACE⁽²⁾	(c) / (g)		14.79			12.61			14.30			14.44			14.11
ROATCE⁽²⁾	(b) / (f)		15.46			12.42			15.59			15.76			10.65
Adjusted ROATCE⁽²⁾	(d) / (h)		16.02			13.72			15.59			15.76			15.39
(1) Includes non-mortgage servicing assets (2) Annualized

TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited), Continued

Computation of adjusted efficiency ratio:

		Quarter Ended
		Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,
(Dollars in thousands)		2019			2019			2018			2018			2018
Non-interest expense	(a)	$	236,849		$	253,075		$	249,958		$	246,423		$	272,039
Less: Merger-related expenses			4,226			9,458		—			—			—
Less: CFPB/OCC settlement adjustment		—			—			—			—				32,000
Adjusted non-interest expense	(b)	$	232,623		$	243,617		$	249,958		$	246,423		$	240,039

Net interest income		$	250,324		$	250,907		$	248,888		$	249,121		$	250,799
Non-interest income			113,451			107,026			128,133			116,445			114,103
Total revenue	(c)	$	363,775		$	357,933		$	377,021		$	365,566		$	364,902

Efficiency ratio	(a) / (c)		65.11	%		70.70	%		66.30	%		67.41	%		74.55	%
Adjusted efficiency ratio	(b) / (c)		63.95			68.06			66.30			67.41			65.78

Computation of tangible common equity to tangible assets and tangible book value per common share:

		Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,
(Dollars in thousands, except per share data)		2019			2019			2018			2018			2018
Total equity		$	2,710,518		$	2,645,845		$	2,556,260		$	2,528,012		$	2,504,578
Less: Non-controlling interest in subsidiaries			24,858			29,452			18,459			21,154			23,646
Total TCF Financial Corporation stockholders' equity			2,685,660			2,616,393			2,537,801			2,506,858			2,480,932
Less: Preferred stock			169,302			169,302			169,302			169,302			169,302
Total common stockholders' equity	(a)		2,516,358			2,447,091			2,368,499			2,337,556			2,311,630
Less: Goodwill, net			154,757			154,757			154,757			154,757			154,757
Less: Other intangibles, net⁽¹⁾			18,904			19,704			20,518			21,364			22,247
Tangible common stockholders' equity	(b)	$	2,342,697		$	2,272,630		$	2,193,224		$	2,161,435		$	2,134,626

Total assets	(c)	$	24,626,830		$	24,418,715		$	23,699,612		$	22,904,785		$	23,184,462
Less: Goodwill, net			154,757			154,757			154,757			154,757			154,757
Less: Other intangibles, net⁽¹⁾			18,904			19,704			20,518			21,364			22,247
Tangible assets	(d)	$	24,453,169		$	24,244,254		$	23,524,337		$	22,728,664		$	23,007,458

Common stock shares outstanding	(e)		162,770,063			163,951,155			163,923,227			166,812,524			167,684,971

Common equity to assets	(a) / (c)		10.22	%		10.02	%		9.99	%		10.21	%		9.97	%
Tangible common equity to tangible assets	(b) / (d)		9.58			9.37			9.32			9.51			9.28

Book value per common share	(a) / (e)	$	15.46		$	14.93		$	14.45		$	14.01		$	13.79
Tangible book value per common share	(b) / (e)		14.39			13.86			13.38			12.96			12.73
(1) Includes non-mortgage servicing assets

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TCF Financial Corporation

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TCF Financial : Reports Quarterly Net Income of $90.4 Million, or $0.54 Per Share

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