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

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

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

0.34

28.6

58.8

Diluted earnings per common share

0.54

0.42

0.51

0.34

28.6

58.8

Adjusted diluted earnings per common share(1)

0.56

0.46

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

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

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

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

)

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

)

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

2019

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

—

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

—

Common stock

1,731

1,733

1,736

1,735

)

(0.1

)

(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

2019

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

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

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

—

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

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

—

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

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

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

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

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

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

)

Debt securities available for sale:

Taxable

3.11

3.04

2.91

2.76

2.59

Tax-exempt(3)

2.75

2.63

2.66

Loans and leases held for sale

5.86

6.01

6.40

6.57

5.93

(15

)

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

)

Total consumer real estate

6.00

6.12

6.21

6.17

6.09

(12

)

Commercial:

Fixed-rate

4.42

4.50

4.51

4.55

4.49

)

Variable- and adjustable-rate

5.68

5.86

5.65

5.45

(18

)

Total commercial

5.42

5.57

5.40

5.25

5.21

(15

)

Leasing and equipment finance

5.11

5.09

5.11

5.00

4.93

Inventory finance

7.26

7.38

7.11

7.16

6.94

(12

)

Auto finance

5.38

5.33

5.39

5.36

5.30

Other

4.78

4.61

4.55

4.25

4.10

Total loans and leases

5.84

5.91

5.82

5.73

5.67

)

Total interest-earning assets

5.43

5.50

5.42

5.36

5.33

)

LIABILITIES:

Interest-bearing deposits:

Checking

0.07

0.06

0.04

0.02

Savings

0.77

0.69

0.54

0.35

0.27

Money market

1.29

1.21

0.99

0.78

0.67

Certificates of deposit

2.05

1.93

1.76

1.56

1.43

Total interest-bearing deposits

1.09

1.02

0.91

0.75

0.66

Total deposits

0.86

0.81

0.72

0.59

0.52

Borrowings:

Short-term borrowings

2.63

2.67

2.76

2.46

2.33

)

Long-term borrowings

3.34

3.44

3.34

3.15

3.02

(10

)

Total borrowings

3.23

3.31

3.34

3.15

3.02

)

Total interest-bearing liabilities

1.34

1.27

1.11

0.96

0.89

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

2018

% 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

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

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

)

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

)

—

(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

2018

2019

2018

Consumer real estate:

First mortgage lien

0.17

0.20

0.19

0.18

0.20

)

bps

)

bps

Junior lien

0.06

0.08

0.04

0.07

)

Total consumer real estate

0.11

0.14

0.11

0.10

0.12

)

Commercial

—

Leasing and equipment finance

0.25

0.20

0.23

0.15

0.11

Inventory finance

—

0.01

—

Auto finance

0.54

0.38

0.59

0.41

0.33

Other

0.15

0.11

0.14

0.30

0.16

)

Subtotal

0.13

0.12

0.15

0.11

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

(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

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)

(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%

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)

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,

2019

2018

2019

2018

Dividends declared per common share

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

bps

Tangible common equity to tangible assets(1)

9.58

9.37

9.32

9.51

9.28

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

bps

Tier 1 risk-based capital ratio

11.90

11.71

11.72

11.96

11.51

Total risk-based capital ratio

13.41

13.30

13.38

13.66

13.22

Tier 1 leverage ratio

10.27

10.26

10.44

10.58

10.31

)

(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

2018

Net income available to common stockholders

87,933

68,001

83,158

83,702

56,255

Less: Earnings allocated to participating securities

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

0.34

Adjusted diluted earnings per common share

(b) / (c)

0.56

0.46

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

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

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

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

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

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)

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

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

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

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

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

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

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