CORRECTING and REPLACING TCF Reports Third Quarter 2020 Results

Oct 27, 2020 05:46 pm

DETROIT --

In the “Balance Sheet” section, sixth paragraph, the record date for the common stock and 5.70% Series C Non-Cumulative Perpetual Preferred Stock dividends should be November 13, 2020 (instead of November 16, 2020).

The updated release reads:

TCF REPORTS THIRD QUARTER 2020 RESULTS

TCF also announces quarterly cash dividends on common and preferred stock

TCF Financial Corporation (NASDAQ: TCF):

Third Quarter 2020 Highlights

Quarterly net income of $55.7 million, or $0.35 per diluted share, up 134.5% from the second quarter of 2020
Adjusted diluted earnings per common share of $0.63⁽¹⁾, up 16.7% from the second quarter of 2020. Adjusted diluted earnings per common share excludes $43.0 million, or $0.28 per share, after-tax impact of merger-related expenses and notable items
Successful on-time completion of merger-of-equals integration activities
Loan and lease balances on deferral status down to $403.6 million as of September 30, 2020 ($289.5 million of commercial balances and $114.1 million of consumer balances)
Loan and lease balances declined 3.4% from June 30, 2020, primarily due to declines in the commercial and industrial and consumer portfolios
Net charge-offs of $24.6 million, or 0.28% of average loans and leases (annualized)
Provision for credit losses of $69.7 million, down 11.5% from the second quarter of 2020
Allowance for credit losses, which includes the reserve for unfunded lending commitments, of 1.60% of total loans and leases, up from 1.42% at June 30, 2020
Efficiency ratio of 75.29%, improved 297 basis points from the second quarter of 2020. Adjusted efficiency ratio of 61.17%⁽¹⁾, up 137 basis pointsfrom the second quarter of 2020
Common equity Tier 1 capital ratio of 11.45%, compared to 11.06% at June 30, 2020
Declared quarterly cash dividends on common stock of $0.35 per share payable on December 1, 2020

Merger-related Expenses and Notable items in the Third Quarter of 2020 and Second Quarter of 2020⁽

Pre-tax merger-related expenses of $54.0 million, $42.8 million net of tax, or $0.28 per diluted common share for the third quarter of 2020, compared to pre-tax merger-related expenses of $81.6 million, $64.6 million net of tax, or $0.42 per diluted common share for the second quarter of 2020
Pre-tax expenses, of $154 thousand, $122 thousand net of tax, or $0.00 per diluted common share related to notable items for the third quarter of 2020, compared to pre-tax income, net expenses of $4.4 million, $3.5 million net of tax, or $0.02 per diluted common share related to notable items for the second quarter of 2020, see summary of notable items adjustments below

(1)

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

Note: For the third quarter 2019, TCF’s reported financial results reflect Legacy TCF financial results for the period before August 1, 2019 and the post-merger combined TCF financial results on and after August 1, 2019. The number of shares issued and outstanding, earnings per share, additional paid-in-capital, dividends paid and all references to share quantities of TCF have been retrospectively restated to reflect the equivalent number of shares issued in the Merger as the Merger was treated as a reverse merger.

Summary of Financial Results⁽¹⁾
	At or For the Quarter Ended															Change From
	Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Sep. 30,
(Dollars in thousands, except per share data)	2020			2020			2020			2019			2019			2020			2019
Financial Results
Net income attributable to TCF	$	55,738		$	23,764		$	51,899		$112,399			$	22,148		134.5		%	151.7		%
Net interest income	377,167			378,359			401,481			408,753			371,793			(0.3	)		1.4
Basic earnings per common share	$	0.35		$	0.14		$	0.33		$	0.72		$	0.15		150.0			133.3
Diluted earnings per common share	0.35			0.14			0.32			0.72			0.15			150.0			133.3
Return on average assets ("ROAA")⁽²⁾	0.46		%	0.21		%	0.46		%	0.99		%	0.26		%	25		bps	20		bps
ROACE⁽²⁾	3.87			1.56			3.64			8.00			1.75			231			212
ROATCE (non-GAAP)⁽²⁾⁽³⁾	5.71			2.57			5.42			11.35			2.68			314			303
Net interest margin	3.31			3.33			3.73			3.86			4.12			(2	)		(81	)
Net interest margin (FTE)⁽²⁾⁽³⁾	3.34			3.35			3.76			3.89			4.14			(1	)		(80	)
Net charge-offs as a percentage of average loans and leases⁽²⁾	0.28			0.04			0.06			0.07			0.39			24			(11	)
Nonperforming assets as a percentage of total loans and leases and other real estate owned⁽⁴⁾	1.20			0.94			0.80			0.59			0.62			26			58
Efficiency ratio	75.29			78.26			69.57			73.49			91.32			(297	)		(1,603	)
Adjusted Financial Results (non-GAAP)
Adjusted net income attributable to TCF⁽²⁾	$	98,696		$	84,862		$	89,855		$161,581			$128,301			16.3		%	(23.1	)	%
Adjusted diluted earnings per common share⁽³⁾	$	0.63		$	0.54		$	0.57		$	1.04		$	0.98		16.7			(35.7	)
Adjusted ROAA⁽²⁾⁽³⁾	0.81		%	0.70		%	0.78		%	1.42		%	1.34		%	11		bps	(53	)	bps
Adjusted ROACE⁽²⁾⁽³⁾	6.99			6.03			6.43			11.57			11.21			96			(422	)
Adjusted ROATCE⁽²⁾⁽³⁾	9.96			8.70			9.24			16.25			14.96			126			(500	)
Adjusted efficiency ratio⁽³⁾	61.17			59.80			58.24			58.51			58.74			137			243

(1)		For the third quarter 2019, TCF’s reported financial results reflect Legacy TCF financial results for the period before August 1, 2019 and the post-merger combined TCF financial results on and after August 1, 2019.
(2)		Annualized.
(3)		Denotes a non-GAAP financial measure. See "Reconciliation of GAAP to Non-GAAP Financial Measures" tables.
(4)		Prior to the adoption of CECL as of January 1, 2020, purchased credit impaired loans were not classified as nonaccrual loans because they were recorded at their net realizable value based on the principal and interest expected to be collected on the loans. At January 1, 2020, $73.4 million of previous purchased credit impaired loans were reclassified to nonaccrual loans as a result of the adoption of CECL.

The following table includes merger-related expenses and notable items used to arrive at adjusted net income in the Adjusted Financial Results (non-GAAP) (see "Reconciliation of Non-GAAP Financial Measures" tables).

	For the Quarter Ended September 30, 2020									For the Quarter Ended June 30, 2020
(Dollars in thousands, except per share data)	Pre-tax income (loss)			After-tax benefit (loss)⁽¹⁾			Per Share			Pre-tax income (loss)			After-tax benefit (loss)⁽¹⁾			Per Share
Merger-related expenses	$	(54,011	)	$	(42,836	)	$	(0.28	)	$	(81,619	)	(64,585		)	$	(0.42	)
Notable items:
Expenses related to the sale of Legacy TCF auto finance portfolio⁽²⁾	—			—			—			(901		)	(713		)	—
Branch sales and exit costs, net⁽³⁾	—			—			—			14,166			11,210			0.07
Loan servicing rights impairment⁽⁴⁾	(154		)	(122		)	—			(8,858		)	(7,009		)	(0.05		)
Total notable items	(154		)	(122		)	—			4,407			3,488			0.02
Total merger-related and notable items	$	(54,165	)	$	(42,958	)	$	(0.28	)	$	(77,212	)	$	(61,097	)	$	(0.40	)

(1)		Net of tax benefit at our normal tax rate and other tax benefits.
(2)		Second quarter of 2020 included within other noninterest expense ($0.8 million) and compensation and employee benefits ($0.1 million).
(3)		Second quarter of 2020 included within other noninterest income ($14.7 million net gain) and other noninterest expense ($0.6 million).
(4)		Included within other noninterest income.

TCF Financial Corporation ("TCF" or the "Corporation") (NASDAQ: TCF) today reported net income of $55.7 million, or diluted earnings per common share of $0.35, for the third quarter of 2020, compared with $23.8 million, or diluted earnings per common share of $0.14, for the second quarter of 2020. Adjusted net income was $98.7 million, or $0.63 per diluted common share for the third quarter of 2020, compared with $84.9 million, or $0.54 per diluted common share, for the second quarter of 2020 (see "Reconciliation of GAAP to Non-GAAP Financial Measures" tables).

“The highlight of the third quarter was the successful completion of integration activities related to our merger of equals, with our business now aligned under a single brand and going to market as One TCF across the broader footprint,” said Craig R. Dahl, president and chief executive officer. “We were able to complete these efforts on time, despite the challenges related to COVID-19 and our work-from-home approach. This success was driven by the hard work and dedication of our team members across the bank who continued to focus on serving our customers. As a result, we remain on track to achieve our expense target for the fourth quarter. Now fully integrated, we can bring the full breadth and depth of our services - and our team members’ expertise - to enhance our ability to support our customers and communities.

“Financial results for the third quarter included a stable net interest margin, significant declines in loan deferrals, and continued strong capital ratios and liquidity. While loan demand remained at relatively low levels due to economic uncertainty, we have begun to see trends gradually improve over the past couple of months as commercial loan pipelines have been building, including in CRE and certain C&I sectors such as manufacturing. In addition, we are continuing to monitor credit quality trends as we further isolate the portions of certain portfolios that are more heavily impacted by COVID.

“As we look ahead, we expect to benefit from the outcomes of our merger-of-equals, including our expanded product set that is allowing us to better meet the needs of our commercial and consumer customers. This has also resulted in various merger-related revenue synergy initiatives that are still in front of us and provide opportunities to drive incremental organic growth.”

Net Interest Income and Net Interest Margin

Net interest income was $377.2 million for the third quarter of 2020, a decrease of $1.2 million, or 0.3%, from the second quarter of 2020. Purchase accounting accretion and amortization included in net interest income was $17.7 million for the third quarter of 2020, compared to $18.2 million for the second quarter of 2020. Additionally, third quarter of 2020 net interest income recorded included $14.7 million of interest and fee income from PPP less funding costs, compared to $9.6 million for the second quarter of 2020. Adjusted net interest income, excluding purchase accounting accretion and amortization and the impact from PPP loans, a non-GAAP financial measure, was $344.7 million for the third quarter of 2020, compared to $350.6 million for the second quarter of 2020. Net interest margin was 3.31% for the third quarter of 2020, compared to 3.33% in the second quarter of 2020, while net interest margin on a fully tax-equivalent basis (FTE), a non-GAAP financial measure, was 3.34%, down one basis point from the second quarter of 2020. The decrease in net interest margin from the second quarter of 2020 was driven by higher average cash balances and lower yields on loans, leases and securities, partially offset by lower cost of funds. Adjusted net interest margin FTE, excluding purchase accounting accretion and amortization and the impact of PPP loans, a non-GAAP financial measure, was 3.19% for the third quarter of 2020, down one basis point from the second quarter of 2020. See the "Reconciliation of GAAP to Non-GAAP Financial Measures" tables for reconciliations of our noted non-GAAP measures.

Noninterest Income

Noninterest income was $118.8 million for the third quarter of 2020, a decrease of $14.2 million, or 10.7%, from the second quarter of 2020. Noninterest income for the third quarter of 2020 included a notable item of an $154 thousand loan servicing rights impairment, included in other noninterest income. Noninterest income for the second quarter of 2020 included notable items of a $14.7 million gain on the sale of our Arizona branches and an $8.9 million loan servicing rights impairment, both included in other noninterest income. Adjusted noninterest income, a non-GAAP financial measure, for the third quarter of 2020 was $119.0 million, compared to $127.2 million in the second quarter of 2020. The third quarter of 2020 noninterest income, compared to the second quarter of 2020, also included decreases of $5.5 million in net gains on sales of loans and leases, $5.3 million in leasing revenue due to a decrease in sales-type lease revenue through our equipment financing activity, and $2.7 million in servicing fee revenue due to accelerated loan servicing rights amortization related to faster prepayment speeds, partially offset by increases of $2.7 million in card and ATM revenue, $2.6 million in fees and service charges on deposit accounts, and $2.3 million in net gains on investment securities. The third quarter of 2020 also included a $2.6 million unfavorable interest rate swap mark-to-market adjustment resulting from changes in the interest rate environment, included in other noninterest income, compared to an unfavorable interest rate swap mark-to-market adjustment of $428 thousand in the second quarter of 2020.

Noninterest Expense

Noninterest expense was $373.4 million for the third quarter of 2020, a decrease of $26.8 million, or 6.7%, from the second quarter of 2020. The decrease in the third quarter of 2020 reflected decreases in merger-related expenses, occupancy and equipment expense and compensation and benefits expense, partially offset by an increase in other noninterest expense. The third quarter of 2020 included $54.0 million of merger-related expenses, compared to $81.6 million for the second quarter of 2020. Noninterest expense for the second quarter of 2020 also included $0.9 million of expense related to the sale of the Legacy TCF auto finance portfolio ($0.8 million in other noninterest expense and $0.1 million in compensation and employee benefits) and $0.6 million of expense related to branch exit costs, included in other noninterest expense considered notable items. Excluding merger-related expenses and notable items, adjusted noninterest expense, a non-GAAP financial measure, was $319.4 million for the third quarter of 2020, compared to $317.2 million for the second quarter of 2020 (see "Reconciliation of GAAP to Non-GAAP Financial Measures" tables). The third quarter of 2020 also included $1.8 million of federal historic tax credit amortization, included in other noninterest expense, compared to $0.2 million in the second quarter of 2020.

Income Tax Expense

Income tax benefit for the third quarter of 2020 was $4.4 million, compared to income tax expense of $6.2 million, an effective tax rate of 19.1% for the second quarter of 2020. Income tax for the third quarter of 2020 included a benefit of $16.0 million attributable to tax net operating loss carryback benefits associated with the CARES Act. Excluding the benefit provided by the CARES Act, our effective tax rate for the third quarter of 2020 was 21.9%.

Credit Quality

Provision for credit losses Provision for credit losses was $69.7 million for the third quarter of 2020, a decrease of $9.1 million, from the second quarter of 2020. The provision for credit losses in the third quarter of 2020 reflects a build to the allowance for credit losses primarily due to commercial portfolio credit risk management activities, driven by Capital Solutions loans and leases, as well as the impact of net charge offs. Third quarter 2020 net charge offs were $24.6 million compared to $3.4 million in the second quarter of 2020.

Net charge-off rate The annualized net charge-offs as a percentage of average loans and leases were 0.28% for the third quarter of 2020, up 24 basis points from the second quarter of 2020. The increase from the second quarter of 2020 was due to an increase in net charge-offs in the commercial and industrial portfolio, primarily driven by two loans totaling $16.1 million of charge-offs. Subsequent to September 30, 2020, we received a $9.1 million full repayment related to one of these loans which was fully charged off at quarter-end.

Allowance for Credit Losses Allowance for credit losses ("ACL") includes both the allowance for loan and lease losses, which is presented separately on the Consolidated Statements of Financial Condition, and the reserve for unfunded lending commitments, which is included in other liabilities on the Consolidated Statements of Financial Condition. The ACL was $549.4 million, or 1.60% of total loans and leases, at September 30, 2020, up from $503.9 million, or 1.42%, at June 30, 2020. The ACL as a percentage of total loans and leases, excluding PPP loans, a non-GAAP financial measure, was 1.69% at September 30, 2020, an increase from 1.49% at June 30, 2020 (see "Reconciliation of GAAP to Non-GAAP Financial Measures" tables). The PPP loans are individually guaranteed by the Small Business Administration and therefore the accounting under CECL does not require reserves to be recorded on such loans. The increase in the ACL and the ACL as a percentage of total loans and leases from June 30, 2020 was primarily due to commercial portfolio credit risk management activities, driven by Capital Solutions loans and leases, partially offset by a decrease in reserve for unfunded lending commitments.

Nonaccrual loans and leases Nonaccrual loans and leases were $376.7 million at September 30, 2020 and represented 1.10% of total loans and leases, compared to $291.5 million, or 0.82% of total loans and leases, at June 30, 2020. The $85.3 million increase in nonaccrual loans and leases from June 30, 2020 was impacted by $46.6 million of motor coach and shuttle bus balances, within our commercial and industrial portfolio, that moved to nonaccrual.

Balance Sheet

Loans and leases Loans and leases were $34.3 billion at September 30, 2020, a decrease of $1.2 billion, or 3.4%, compared to $35.5 billion at June 30, 2020. The decrease was primarily due to a decline in inventory finance loans in the commercial and industrial portfolio related to continued strong dealer activity and the lack of backfill from manufacturers as a result of the previous economic shutdown and slow reopening, in addition to a decline in the consumer loan portfolio. At both September 30, 2020 and June 30, 2020, we had $1.8 billion of PPP loans outstanding, all included in our commercial and industrial loan portfolio.

Investment securities The investment securities portfolio was $7.6 billion at September 30, 2020, an increase of $267.0 million, or 3.6%, compared to $7.3 billion at June 30, 2020. The increase from June 30, 2020 was primarily due to purchases of residential and commercial mortgage-backed securities and municipal securities.

Deposits Deposits were $39.2 billion at both September 30, 2020 and June 30, 2020, despite the continued run-off of higher cost certificates of deposit. Increases in checking deposit account balances of $760.4 million and noninterest bearing deposits of $210.8 million were offset by decreases in certificates of deposits of $808.2 million, money market accounts of $186.9 million and savings account balances of $14.9 million as of September 30, 2020 compared to June 30, 2020.

Capital The common equity Tier 1 capital ratio was 11.45% at September 30, 2020, compared to 11.06% at June 30, 2020. Our capital ratios reflect our election of the five-year CECL transition for regulatory capital purposes.

In response to the COVID-19 pandemic, TCF temporarily suspended buybacks under its share repurchase program, but retains the ability to resume as circumstances warrant. TCF is well positioned with strong capital and liquidity and is committed to supporting our customers, team members and communities.

TCF's board of directors also declared a regular quarterly cash dividend of $0.35 per common share payable on December 1, 2020 to shareholders of record at the close of business on November 13, 2020. In addition, the board of directors declared a quarterly cash dividend of $0.35625 per depositary share payable on December 1, 2020 to shareholders of record of the depositary shares, representing a 1/1,000th interest in a share of the 5.70% Series C Non-Cumulative Perpetual Preferred Stock, at the close of business on November 13, 2020.

Conference Call Details TCF will host a conference call to discuss third quarter 2020 results on Tuesday, October 27, 2020 at 10:00 a.m. Eastern Time. The conference call will be available via a live webcast on the Investor Relations section of TCF's website, ir.tcfbank.com, and archived for replay. The conference call can also be accessed by dialing (844) 512-2926 and entering access code 8567352. To listen to the replay via phone, please dial (877) 344-7529 and enter access code 10148473. The replay begins approximately one hour after the call is completed on Tuesday, October 27, 2020 and will be available through Tuesday, November 3, 2020.

TCF Financial Corporation (NASDAQ: TCF) is a Detroit, Michigan-based financial holding company with $48 billion in total assets at September 30, 2020 and a top 10 deposit market share in the Midwest. TCF’s primary banking subsidiary, TCF National Bank, is a premier Midwest bank offering consumer and commercial banking, trust and wealth management, and specialty leasing and lending products and services to consumers, small businesses and commercial clients. TCF has approximately 475 banking centers primarily located in Michigan, Illinois and Minnesota with additional locations in Colorado, Ohio, South Dakota and Wisconsin. TCF also conducts business across all 50 states and Canada through its specialty lending and leasing businesses. To learn more about TCF, visit 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 Corporation's businesses and their respective markets, such as projections of future performance, targets, guidance, statements of the Corporation's plans and objectives, forecasts of market trends and other matters are forward-looking statements based on the Corporation'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 Corporation'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 Corporation's Annual Report on Form 10-K for the year ended December 31, 2019 under the heading "Risk Factors" or otherwise disclosed in documents filed or furnished by the Corporation with or to the SEC after the filing of such Annual Report on Form 10-K, 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.

This release also contains forward-looking statements regarding TCF’s outlook or expectations with respect to post-merger integration. Examples of forward-looking statements include, but are not limited to, statements regarding outlook and expectations with respect to the strategic and financial benefits of the merger, including the expected impact on TCF’s future financial performance (including operating and return metrics and operational aspects of post-merger integration).

Use of Non-GAAP Financial Measures

Management uses the adjusted net income, adjusted diluted earnings per common share, adjusted ROAA, adjusted ROACE, ROATCE, adjusted ROATCE, adjusted efficiency ratio, adjusted net interest income, net interest margin (FTE), adjusted net interest margin (FTE), adjusted noninterest income, adjusted noninterest expense, tangible book value per common share, tangible common equity to tangible assets and the allowance for credit losses as percentage of total loans and leases, excluding PPP loans, 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 Corporation's capital and ability to withstand unexpected market or economic conditions and to assess the performance of the Corporation 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 notable items in addition to presenting net interest income and net interest margin (FTE) excluding purchase accounting accretion and amortization and the impact of PPP loans. Management believes these measures are 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 corporation, 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 shareholders. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measure may be found in the reconciliation tables included in this press release.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Financial Condition (Unaudited)
																Change From
(Dollars in thousands)	Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30, 2020				Sep 30, 2019
(Dollars in thousands)	2020			2020			2020			2019			2019			$			%	$			%
ASSETS:
Cash and cash equivalents:
Cash and due from banks	$	538,481		$	535,507		$	713,413		$	491,787		$	586,060		$	2,974		0.6%	$	(47,579	)	(8.1)%
Interest-bearing deposits with other banks	1,232,773			2,545,170			565,458			736,584			736,954			(1,312,397		)	(51.6)	495,819			67.3
Total cash and cash equivalents	1,771,254			3,080,677			1,278,871			1,228,371			1,323,014			(1,309,423		)	(42.5)	448,240			33.9
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost	300,444			386,483			484,461			442,440			290,238			(86,039		)	(22.3)	10,206			3.5
Investment securities:
Available-for-sale, at fair value	7,446,163			7,219,373			7,025,224			6,720,001			5,579,835			226,790			3.1	1,866,328			33.4
Held-to-maturity, at amortized cost	170,309			130,101			135,619			139,445			144,000			40,208			30.9	26,309			18.3
Total investment securities	7,616,472			7,349,474			7,160,843			6,859,446			5,723,835			266,998			3.6	1,892,637			33.1
Loans and leases held-for-sale	460,427			532,799			287,177			199,786			1,436,069			(72,372		)	(13.6)	(975,642		)	(67.9)
Loans and leases	34,343,691			35,535,824			35,921,614			34,497,464			33,510,752			(1,192,133		)	(3.4)	832,939			2.5
Allowance for loan and lease losses	(515,229		)	(461,114		)	(406,383		)	(113,052		)	(121,218		)	(54,115		)	(11.7)	(394,011		)	N.M.
Loans and leases, net	33,828,462			35,074,710			35,515,231			34,384,412			33,389,534			(1,246,248		)	(3.6)	438,928			1.3
Premises and equipment, net	469,699			472,240			516,454			533,138			554,194			(2,541		)	(0.5)	(84,495		)	(15.2)
Goodwill	1,313,046			1,313,046			1,313,046			1,299,878			1,265,111			0			0.0	47,935			3.8
Other intangible assets, net	151,875			157,373			162,887			168,368			215,910			(5,498		)	(3.5)	(64,035		)	(29.7)
Loan servicing rights	38,253			38,816			47,283			56,313			55,301			(563		)	(1.5)	(17,048		)	(30.8)
Other assets	1,615,857			1,656,842			1,828,130			1,479,401			1,439,305			(40,985		)	(2.5)	176,552			12.3
Total assets	$	47,565,789		$	50,062,460		$	48,594,383		$	46,651,553		$	45,692,511		$	(2,496,671	)	(5.0)%	$	1,873,278		4.1%
LIABILITIES AND EQUITY:
Deposits:
Noninterest-bearing	$	10,691,041		$	10,480,245		$	8,237,916		$	7,970,590		$	7,979,900		$	210,796		2.0%	$	2,711,141		34.0%
Interest-bearing	28,481,056			28,730,627			27,561,387			26,497,873			27,306,174			(249,571		)	(0.9)	1,174,882			4.3
Total deposits	39,172,097			39,210,872			35,799,303			34,468,463			35,286,074			(38,775		)	(0.1)	3,886,023			11.0
Short-term borrowings	655,461			2,772,998			3,482,535			2,669,145			2,607,300			(2,117,537		)	(76.4)	(1,951,839		)	(74.9)
Long-term borrowings	871,845			936,908			2,600,594			2,354,448			860,482			(65,063		)	(6.9)	11,363			1.3
Other liabilities	1,207,966			1,483,127			1,056,118			1,432,256			1,245,238			(275,161		)	(18.6)	(37,272		)	(3.0)
Total liabilities	41,907,369			44,403,905			42,938,550			40,924,312			39,999,094			(2,496,536		)	(5.6)	1,908,275			4.8
Equity:
Preferred stock	169,302			169,302			169,302			169,302			169,302			—			—	—			—
Common stock	152,380			152,233			152,186			152,966			153,571			147			0.1	(1,191		)	(0.8)
Additional paid-in capital	3,450,669			3,441,925			3,433,234			3,462,080			3,478,159			8,744			0.3	(27,490		)	(0.8)
Retained earnings	1,700,044			1,700,480			1,732,932			1,896,427			1,840,214			(436		)	0.0	(140,170		)	(7.6)
Accumulated other comprehensive income	191,771			198,408			166,170			54,277			56,228			(6,637		)	(3.3)	135,543			N.M.
Other	(27,122		)	(27,093		)	(28,140		)	(28,037		)	(27,370		)	(29		)	(0.1)	248			0.9
Total TCF Financial Corporation shareholders' equity	5,637,044			5,635,255			5,625,684			5,707,015			5,670,104			1,789			0.0	(33,060		)	(0.6)
Non-controlling interest	21,376			23,300			30,149			20,226			23,313			(1,924		)	(8.3)	(1,937		)	(8.3)
Total equity	5,658,420			5,658,555			5,655,833			5,727,241			5,693,417			(135		)	0.0	(34,997		)	(0.6)
Total liabilities and equity	$	47,565,789		$	50,062,460		$	48,594,383		$	46,651,553		$	45,692,511		$	(2,496,671	)	(5.0)%	$	1,873,278		4.1%

N.M. Not Meaningful

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

	Quarter Ended												Change From
(Dollars in thousands)	Sep. 30,			Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,			Jun. 30, 2020				Sep. 30, 2019
(Dollars in thousands)	2020			2020		2020		2019		2019			$			%	$			%
Interest income:
Interest and fees on loans and leases	$	373,112		$	392,826	$	443,096	$	446,738	$	417,370		$	(19,714	)	(5.0)%	$	(44,258	)	(10.6)%
Interest on investment securities:
Taxable	35,648			32,505		40,920		36,282		31,038			3,143			9.7	4,610			14.9
Tax-exempt	3,892			4,155		4,349		4,374		3,385			(263		)	(6.3)	507			15.0
Interest on loans held-for-sale	3,829			3,322		1,561		15,767		1,408			507			15.3	2,421			171.9
Interest on other earning assets	3,967			5,562		5,466		6,617		6,607			(1,595		)	(28.7)	(2,640		)	(40.0)
Total interest income	420,448			438,370		495,392		509,778		459,808			(17,922		)	(4.1)	(39,360		)	(8.6)
Interest expense:
Interest on deposits	31,852			46,785		67,419		77,003		70,900			(14,933		)	(31.9)	(39,048		)	(55.1)
Interest on borrowings	11,429			13,226		26,492		24,022		17,115			(1,797		)	(13.6)	(5,686		)	(33.2)
Total interest expense	43,281			60,011		93,911		101,025		88,015			(16,730		)	(27.9)	(44,734		)	(50.8)
Net interest income	377,167			378,359		401,481		408,753		371,793			(1,192		)	(0.3)	5,374			1.4
Provision for credit losses	69,664			78,726		96,943		14,403		27,188			(9,062		)	(11.5)	42,476			156.2
Net interest income after provision for credit losses	307,503			299,633		304,538		394,350		344,605			7,870			2.6	(37,102		)	(10.8)
Noninterest income:
Leasing revenue	31,905			37,172		33,565		46,686		39,590			(5,267		)	(14.2)	(7,685		)	(19.4)
Fees and service charges on deposit accounts	25,470			22,832		34,597		39,356		34,384			2,638			11.6	(8,914		)	(25.9)
Net gains (losses) on sales of loans and leases	23,490			29,034		20,590		12,934		(5,984		)	(5,544		)	(19.1)	29,474			N.M.
Card and ATM revenue	23,383			20,636		21,685		24,751		23,315			2,747			13.3	68			0.3
Wealth management revenue	6,506			6,206		6,151		6,172		4,241			300			4.8	2,265			53.4
Servicing fee revenue	321			3,041		6,792		6,022		5,121			(2,720		)	(89.4)	(4,800		)	(93.7)
Net gains on investment securities	2,324			8		0		8		5,900			2,316			N.M.	(3,576		)	(60.6)
Other	5,411			14,125		13,583		22,123		(12,309		)	(8,714		)	(61.7)	17,720			N.M.
Total noninterest income	118,810			133,054		136,963		158,052		94,258			(14,244		)	(10.7)	24,552			26.0
Noninterest expense:
Compensation and employee benefits	168,323			171,799		171,528		180,969		155,745			(3,476		)	(2.0)	12,578			8.1
Occupancy and equipment	48,233			54,107		57,288		56,771		49,229			(5,874		)	(10.9)	(996		)	(2.0)
Lease financing equipment depreciation	17,932			18,212		18,450		18,629		19,408			(280		)	(1.5)	(1,476		)	(7.6)
Net foreclosed real estate and repossessed assets	1,518			998		1,859		4,242		2,203			520			52.1	(685		)	(31.1)
Merger-related expenses	54,011			81,619		36,728		47,025		111,259			(27,608		)	(33.8)	(57,248		)	(51.5)
Other	83,423			73,506		88,746		108,935		87,776			9,917			13.5	(4,353		)	(5.0)
Total noninterest expense	373,440			400,241		374,599		416,571		425,620			(26,801		)	(6.7)	(52,180		)	(12.3)
Income before income tax expense (benefit)	52,873			32,446		66,902		135,831		13,243			20,427			63.0	39,630			N.M.
Income tax expense (benefit)	(4,429		)	6,213		13,086		21,375		(11,735		)	(10,642		)	N.M.	7,306			62.3
Income after income tax expense (benefit)	57,302			26,233		53,816		114,456		24,978			31,069			118.4	32,324			129.4
Income attributable to non-controlling interest	1,564			2,469		1,917		2,057		2,830			(905		)	(36.7)	(1,266		)	(44.7)
Net income attributable to TCF Financial Corporation	55,738			23,764		51,899		112,399		22,148			31,974			134.5	33,590			151.7
Preferred stock dividends	2,494			2,494		2,493		2,494		2,494			—			—	—			—
Net income available to common shareholders	$	53,244		$	21,270	$	49,406	$	109,905	$	19,654		$	31,974		150.3%	$	33,590		170.9%

N.M. Not Meaningful

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

	Nine Months Ended September 30,					Change
(Dollars in thousands, except per share data)	2020		2019			$			%
Interest income:
Interest and fees on loans and leases	$	1,209,034	$	983,890		$	225,144		22.9%
Interest on investment securities:
Taxable	109,073		69,745			39,328			56.4
Tax-exempt	12,396		7,277			5,119			70.3
Interest on loans held-for-sale	8,712		2,832			5,880			N.M.
Interest on other earning assets	14,995		13,739			1,256			9.1
Total interest income	1,354,210		1,077,483			276,727			25.7
Interest expense:
Interest on deposits	146,056		149,154			(3,098		)	(2.1)
Interest on borrowings	51,147		48,050			3,097			6.4
Total interest expense	197,203		197,204			(1		)	0.0
Net interest income	1,157,007		880,279			276,728			31.4
Provision for credit losses	245,333		50,879			194,454			N.M.
Net interest income after provision for credit losses	911,674		829,400			82,274			9.9
Noninterest income:
Leasing revenue	102,642		117,032			(14,390		)	(12.3)
Fees and service charges on deposit accounts	82,899		88,504			(5,605		)	(6.3)
Net gains on sales of loans and leases	73,114		13,374			59,740			N.M.
Card and ATM revenue	65,704		62,470			3,234			5.2
Wealth management revenue	18,863		4,241			14,622			N.M.
Servicing fee revenue	10,154		14,754			(4,600		)	(31.2)
Net gains on investment securities	2,332		7,417			(5,085		)	(68.6)
Other	33,119		(312		)	33,431			N.M.
Total noninterest income	388,827		307,480			81,347			26.5
Noninterest expense:
Compensation and employee benefits	511,650		395,953			115,697			29.2
Occupancy and equipment	159,628		132,789			26,839			20.2
Lease financing equipment depreciation	54,594		57,797			(3,203		)	(5.5)
Net foreclosed real estate and repossessed assets	4,375		9,281			(4,906		)	(52.9)
Merger-related expenses	172,358		124,943			47,415			37.9
Other	245,675		194,781			50,894			26.1
Total noninterest expense	1,148,280		915,544			232,736			25.4
Income before income tax expense	152,221		221,336			(69,115		)	(31.2)
Income tax expense	14,870		28,866			(13,996		)	(48.5)
Income after income tax expense	137,351		192,470			(55,119		)	(28.6)
Income attributable to non-controlling interest	5,950		9,401			(3,451		)	(36.7)
Net income attributable to TCF Financial Corporation	131,401		183,069			(51,668		)	(28.2)
Preferred stock dividends	7,481		7,481			—			—
Net income available to common shareholders	$	123,920	$	175,588		$	(51,668	)	(29.4)%

N.M. Not Meaningful

TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields and Rates (Unaudited)
	Quarter Ended
	Sep. 30, 2020					Jun. 30, 2020					Sep. 30, 2019
	Average				Yields &	Average				Yields &	Average				Yields &
(Dollars in thousands)	Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾	Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾	Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾
ASSETS:
Federal Home Loan Bank and Federal Reserve Bank stocks	$	361,320	$	2,973	3.27%	$	401,532	$	4,376	4.38%	$	230,767	$	806	1.39%
Investment securities held-to-maturity	135,332		573		1.69	132,054		71		0.21	143,078		602		1.68
Investment securities available-for-sale:
Taxable	6,021,643		35,076		2.33	5,730,762		32,434		2.26	4,232,878		30,436		2.88
Tax-exempt⁽³⁾	685,652		4,971		2.90	743,744		5,221		2.81	643,576		4,283		2.66
Loans and leases held-for-sale	490,886		3,829		3.13	356,671		3,322		3.73	118,482		1,408		4.74
Loans and leases⁽³⁾⁽⁴⁾
Commercial and industrial	11,740,727		127,751		4.30	12,713,714		140,576		4.41	9,290,978		146,865		6.25
Commercial real estate	9,616,301		95,779		3.90	9,658,124		95,373		3.91	6,964,643		97,042		5.45
Lease financing	2,679,142		32,696		4.88	2,712,291		33,803		4.99	2,570,567		32,833		5.11
Residential mortgage	5,987,754		57,609		3.86	6,326,227		62,023		3.93	4,853,627		51,511		4.23
Home equity	3,399,468		43,489		5.09	3,509,107		45,314		5.19	3,433,830		56,166		6.49
Consumer installment	1,386,448		17,551		5.04	1,459,446		17,703		4.88	2,389,830		34,543		5.73
Total loans and leases⁽³⁾⁽⁴⁾	34,809,840		374,875		4.26	36,378,909		394,792		4.33	29,503,475		418,960		5.62
Interest-bearing deposits with banks and other	2,572,254		994		0.16	1,587,665		1,186		0.30	933,014		5,800		2.44
Total interest-earning assets	45,076,927		423,291		3.72	45,331,337		441,402		3.88	35,805,270		462,295		5.11
Other assets	4,462,673					4,384,779					3,289,096
Total assets	$	49,539,600				$	49,716,116				$	39,094,366
LIABILITIES AND EQUITY:
Noninterest-bearing deposits	$	10,654,288				$	9,830,687				$	6,564,195
Interest-bearing deposits:
Savings	9,301,198		4,050		0.17	9,082,184		8,930		0.40	7,676,165		14,110		0.73
Certificates of deposit	6,657,697		18,446		1.10	7,491,502		26,744		1.44	7,320,720		38,233		2.07
Checking	7,029,914		2,025		0.11	6,649,288		2,329		0.14	4,805,843		5,520		0.46
Money market	5,501,747		7,331		0.53	5,380,547		8,782		0.66	3,490,922		13,037		1.48
Total interest-bearing deposits	28,490,556		31,852		0.44	28,603,521		46,785		0.66	23,293,650		70,900		1.21
Total deposits	39,144,844		31,852		0.32	38,434,208		46,785		0.49	29,857,845		70,900		0.94
Borrowings:
Short-term borrowings	2,153,030		2,511		0.46	3,016,490		4,085		0.54	1,884,228		5,345		1.11
Long-term borrowings	910,149		8,917		3.91	1,072,394		9,141		3.40	1,472,150		11,769		3.17
Total borrowings	3,063,179		11,428		1.48	4,088,884		13,226		1.29	3,356,378		17,114		2.01
Total interest-bearing liabilities	31,553,735		43,280		0.55	32,692,405		60,011		0.74	26,650,028		88,014		1.31
Total deposits and borrowings	42,208,023		43,280		0.41	42,523,092		60,011		0.57	33,214,223		88,014		1.05
Accrued expenses and other liabilities	1,633,850					1,534,769					1,197,014
Total liabilities	43,841,873					44,057,861					34,411,237
Total TCF Financial Corporation shareholders' equity	5,675,089					5,630,133					4,657,613
Non-controlling interest in subsidiaries	22,638					28,122					25,516
Total equity	5,697,727					5,658,255					4,683,129
Total liabilities and equity	$	49,539,600				$	49,716,116				$	39,094,366
Net interest spread (FTE)					3.31%					3.31%					4.06%
Net interest income (FTE) and net interest margin (FTE)			$	380,011	3.34%			$	381,391	3.35%			$	374,281	4.14%
Reconciliation to Reported Net Interest Income
Net interest income and net interest margin (GAAP)			$377,167		3.31%			$378,359		3.33%			$371,793		4.12%
Adjustments for taxable equivalent interest⁽¹⁾⁽³⁾
Loans and leases			1,763					1,966					1,590
Tax-exempt investment securities			1,079					1,066					898
Total FTE adjustments			2,842					3,032					2,488
Net interest income and net interest margin (FTE)			$380,009		3.34%			$381,391		3.35%			$374,281		4.14%

(1)		Interest and yields are presented on a fully tax-equivalent basis.
(2)		Annualized.
(3)		The yield on tax-exempt loans and investment 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 nonaccrual loans and leases and are presented net of unearned income.

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

	Nine Months Ended
	9/30/2020					9/30/2019
	Average				Yields &	Average				Yields &
(Dollars in thousands)	Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾	Balance		Interest⁽¹⁾		Rates⁽¹⁾⁽²⁾
ASSETS:
Federal Home Loan Bank and Federal Reserve Bank stocks	$	405,680	$	10,501	3.46%	$	149,801	$	2,860	2.55%
Investment securities held-to-maturity	134,557		1,204		1.19	145,627		2,061		1.89
Investment securities available-for-sale:
Taxable	5,881,983		107,870		2.45	3,029,754		67,684		2.98
Tax-exempt⁽³⁾	734,110		15,695		2.85	461,499		9,210		2.66
Loans and leases held-for-sale	329,131		8,712		3.53	71,739		2,832		5.27
Loans and leases⁽³⁾⁽⁴⁾
Commercial and industrial	12,092,629		429,129		4.70	7,499,975		363,260		6.45
Commercial real estate	9,522,333		308,895		4.26	4,332,238		173,983		5.30
Lease financing	2,691,208		100,655		4.99	2,554,521		98,116		5.12
Residential mortgage	6,141,855		181,011		3.93	3,188,294		109,634		4.59
Home equity	3,474,012		139,906		5.38	3,161,083		160,206		6.78
Consumer installment	1,454,187		54,996		5.05	1,945,059		82,305		5.66
Total loans and leases⁽³⁾⁽⁴⁾	35,376,224		1,214,592		4.55	22,681,170		987,504		5.80
Interest-bearing deposits with banks and other	1,569,968		4,494		0.38	494,007		10,878		2.92
Total interest-earning assets	44,431,653		1,363,068		4.07	27,033,597		1,083,029		5.33
Other assets	4,318,287					2,249,678
Total assets	$	48,749,940				$	29,283,275
LIABILITIES AND EQUITY:
Noninterest-bearing deposits	$	9,475,952				$	4,831,271
Interest-bearing deposits:
Savings	8,992,197		26,649		0.40	6,799,432		37,094		0.73
Certificates of deposit	7,157,779		78,255		1.46	5,500,105		83,635		2.03
Checking	6,558,232		10,184		0.21	3,256,409		6,347		0.26
Money market	5,225,858		30,968		0.79	2,144,697		22,078		1.38
Total interest-bearing deposits	27,934,066		146,056		0.70	17,700,643		149,154		1.13
Total deposits	37,410,018		146,056		0.52	22,531,914		149,154		0.88
Borrowings:
Short-term borrowings	2,617,891		17,178		0.86	838,750		9,433		1.48
Long-term borrowings	1,527,986		33,968		2.95	1,543,398		38,616		3.32
Total borrowings	4,145,877		51,146		1.63	2,382,148		48,049		2.67
Total interest-bearing liabilities	32,079,943		197,202		0.82	20,082,791		197,203		1.31
Total deposits and borrowings	41,555,895		197,202		0.63	24,914,062		197,203		1.06
Accrued expenses and other liabilities	1,531,759					1,052,709
Total liabilities	43,087,654					25,966,771
Total TCF Financial Corporation shareholders' equity	5,636,933					3,289,946
Non-controlling interest in subsidiaries	25,353					26,558
Total equity	5,662,286					3,316,504
Total liabilities and equity	$	48,749,940				$	29,283,275
Net interest spread (FTE)					3.44%					4.27%
Net interest income (FTE) and net interest margin (FTE)			$	1,165,866	3.48%			$	885,826	4.36%
Reconciliation to Reported Net Interest Income
Net interest income and net interest margin (GAAP)			$	1,157,007	3.45%			$	880,279	4.35%
Adjustments for taxable equivalent interest⁽¹⁾⁽³⁾
Loans			5,558					3,614
Tax-exempt investment securities			3,299					1,933
Total FTE adjustments			8,857					5,547
Net interest income and net interest margin (FTE)			$	1,165,864	3.48%			$	885,826	4.36%

(1)		Interest and yields are presented on a fully tax-equivalent basis.
(2)		Annualized.
(3)		The yield on tax-exempt loans and investment 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 nonaccrual 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
	Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30, 2020					Sep. 30, 2019
(Dollars in thousands)	2020		2020		2020		2019		2019		$			%		$			%
ASSETS:
Federal Home Loan Bank and Federal Reserve Bank stocks	$	361,320	$	401,532	$	454,675	$	388,640	$	230,767	$	(40,212	)	(10.0)%		$	130,553		56.6%
Investment securities held-to-maturity	135,332		132,054		136,277		140,434		143,078		3,278			2.5		(7,746		)	(5.4	)
Investment securities available-for-sale:
Taxable	6,021,643		5,730,762		5,892,006		4,960,520		4,232,878		290,881			5.1		1,788,765			42.3
Tax-exempt	685,652		743,744		773,468		778,994		643,576		(58,092		)	(7.8	)	42,076			6.5
Loans and leases held-for-sale	490,886		356,671		138,058		1,121,326		118,482		134,215			37.6		372,404			N.M.
Loans and leases⁽¹⁾ :
Commercial and industrial	11,740,727		12,713,714		11,827,315		10,955,937		9,290,978		(972,987		)	(7.7	)	2,449,749			26.4
Commercial real estate	9,616,301		9,658,124		9,291,540		9,057,834		6,964,643		(41,823		)	(0.4	)	2,651,658			38.1
Lease financing	2,679,142		2,712,291		2,682,323		2,616,360		2,570,567		(33,149		)	(1.2	)	108,575			4.2
Residential mortgage	5,987,754		6,326,227		6,113,279		6,023,647		4,853,627		(338,473		)	(5.4	)	1,134,127			23.4
Home equity	3,399,468		3,509,107		3,514,278		3,604,153		3,433,830		(109,639		)	(3.1	)	(34,362		)	(1.0	)
Consumer installment	1,386,448		1,459,446		1,517,412		1,546,952		2,389,830		(72,998		)	(5.0	)	(1,003,382		)	(42.0	)
Total loans and leases⁽¹⁾	34,809,840		36,378,909		34,946,147		33,804,883		29,503,475		(1,569,069		)	(4.3	)	5,306,365			18.0
Interest-bearing deposits with banks and other	2,572,254		1,587,665		538,971		656,555		933,014		984,589			62.0		1,639,240			175.7
Total interest-earning assets	45,076,927		45,331,337		42,879,602		41,851,352		35,805,270		(254,410		)	(0.6	)	9,271,657			25.9
Other assets	4,462,673		4,384,779		4,105,824		4,268,162		3,289,096		77,894			1.8		1,173,577			35.7
Total assets	$	49,539,600	$	49,716,116	$	46,985,426	$	46,119,514	$	39,094,366	$	(176,516	)	(0.4)%		$	10,445,234		26.7%
LIABILITIES AND EQUITY:
Noninterest-bearing deposits	$	10,654,288	$	9,830,687	$	7,929,933	$	7,968,769	$	6,564,195	$	823,601		8.4%		$	4,090,093		62.3	%
Interest-bearing deposits:
Savings	9,301,198		9,082,184		8,589,815		8,404,460		7,676,165		219,014			2.4		1,625,033			21.2
Certificates of deposit	6,657,697		7,491,502		7,329,632		7,825,573		7,320,720		(833,805		)	(11.1	)	(663,023		)	(9.1	)
Checking	7,029,914		6,649,288		5,990,309		5,891,566		4,805,843		380,626			5.7		2,224,071			46.3
Money market	5,501,747		5,380,547		4,792,248		4,463,476		3,490,922		121,200			2.3		2,010,825			57.6
Total interest-bearing deposits	28,490,556		28,603,521		26,702,004		26,585,075		23,293,650		(112,965		)	(0.4	)	5,196,906			22.3
Total deposits	39,144,844		38,434,208		34,631,937		34,553,844		29,857,845		710,636			1.8		9,286,999			31.1
Borrowings:
Short-term borrowings	2,153,030		3,016,490		2,689,262		2,585,682		1,884,228		(863,460		)	(28.6	)	268,802			14.3
Long-term borrowings	910,149		1,072,394		2,608,204		1,739,852		1,472,150		(162,245		)	(15.1	)	(562,001		)	(38.2	)
Total borrowings	3,063,179		4,088,884		5,297,466		4,325,534		3,356,378		(1,025,705		)	(25.1	)	(293,199		)	(8.7	)
Total interest-bearing liabilities	31,553,735		32,692,405		31,999,470		30,910,609		26,650,028		(1,138,670		)	(3.5	)	4,903,707			18.4
Total deposits and borrowings	42,208,023		42,523,092		39,929,403		38,879,378		33,214,223		(315,069		)	(0.7	)	8,993,800			27.1
Accrued expenses and other liabilities	1,633,850		1,534,769		1,425,536		1,549,017		1,197,014		99,081			6.5		436,836			36.5
Total liabilities	43,841,873		44,057,861		41,354,939		40,428,395		34,411,237		(215,988		)	(0.5	)	9,430,636			27.4
Total TCF Financial Corporation shareholders' equity	5,675,089		5,630,133		5,605,159		5,667,436		4,657,613		44,956			0.8		1,017,476			21.8
Non-controlling interest in subsidiaries	22,638		28,122		25,328		23,683		25,516		(5,484		)	(19.5	)	(2,878		)	(11.3	)
Total equity	5,697,727		5,658,255		5,630,487		5,691,119		4,683,129		39,472			0.7		1,014,598			21.7
Total liabilities and equity	$	49,539,600	$	49,716,116	$	46,985,426	$	46,119,514	$	39,094,366	$	(176,516	)	(0.4)%		$	10,445,234		26.7	%

N.M. Not Meaningful

(1)		Average balances of loans and leases include nonaccrual 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
	Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Sep. 30,
	2020		2020		2020		2019		2019		2020		2019
ASSETS:
Federal Home Loan Bank and Federal Reserve Bank stocks	3.27	%	4.38	%	2.79	%	3.24	%	1.39	%	(111)	bps	188	bps
Investment securities held-to-maturity	1.69		0.21		1.64		2.53		1.68		148		1
Investment securities available-for-sale:
Taxable	2.33		2.26		2.74		2.85		2.88		7		(55)
Tax-exempt⁽³⁾	2.90		2.81		2.85		2.84		2.66		9		24
Loans and leases held-for-sale	3.13		3.73		4.53		5.58		4.74		(60)		(161)
Loans and leases⁽³⁾
Commercial and industrial	4.30		4.41		5.42		5.63		6.25		(11)		(195)
Commercial real estate	3.90		3.91		5.01		5.38		5.45		(1)		(155)
Lease financing	4.88		4.99		5.09		5.11		5.11		(11)		(23)
Residential mortgage	3.86		3.93		4.02		4.05		4.23		(7)		(37)
Home equity	5.09		5.19		5.85		5.93		6.49		(10)		(140)
Consumer installment	5.04		4.88		5.23		4.97		5.73		16		(69)
Total loans and leases⁽³⁾	4.26		4.33		5.08		5.24		5.62		(7)		(136)
Interest-bearing deposits with banks and other	0.16		0.30		1.72		2.07		2.44		(14)		(228)

Total interest-earning assets	3.72		3.88		4.64		4.85		5.11		(16)		(139)

LIABILITIES:
Interest-bearing deposits:

Savings	0.17		0.40		0.64		0.71		0.73		(23)		(56)
Certificates of deposit	1.10		1.44		1.81		1.97		2.07		(34)		(97)
Checking	0.11		0.14		0.39		0.51		0.46		(3)		(35)
Money market	0.53		0.66		1.25		1.38		1.48		(13)		(95)
Total interest-bearing deposits	0.44		0.66		1.02		1.15		1.21		(22)		(77)
Total deposits	0.32		0.49		0.78		0.88		0.94		(17)		(62)
Borrowings:
Short-term borrowings	0.46		0.54		1.56		1.73		1.11		(8)		(65)
Long-term borrowings	3.91		3.40		2.42		2.87		3.17		51		74
Total borrowings	1.48		1.29		1.98		2.19		2.01		19		(53)

Total interest-bearing liabilities	0.55		0.74		1.18		1.29		1.31		(19)		(76)
Total deposits and borrowings	0.41		0.57		0.94		1.03		1.05		(16)		(64)

Net interest margin (GAAP)	3.31		3.33		3.73		3.86		4.12		(2)		(81)
Net interest margin (FTE)	3.34		3.35		3.76		3.89		4.14		(1)		(80)

(1)		Annualized.
(2)		Yields are presented on a fully tax-equivalent basis.
(3)		The yield on tax-exempt loans and investment 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*
Composition of Loans (Unaudited)

	Quarter Ended										Change From
	Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30, 2020				Sep 30, 2019
(Dollars in thousands)	2020		2020		2020		2019		2019		$			%	$			%
Commercial and industrial	$	11,557,237	$	12,200,721	$	12,326,943	$	11,439,602	$	10,913,343	$	(643,484	)	(5.3)%	$	643,894		5.9%
Commercial real estate	9,627,330		9,628,344		9,486,904		9,136,870		8,773,970		(1,014		)	0.0	853,360			9.7
Lease financing	2,724,686		2,707,402		2,708,998		2,699,869		2,594,373		17,284			0.6	130,313			5.0
Total commercial loan and lease portfolio	23,909,253		24,536,467		24,522,845		23,276,341		22,281,686		(627,214		)	(2.6)	1,627,567			7.3
Residential mortgage	5,790,251		6,123,118		6,435,314		6,179,805		6,057,404		(332,867		)	(5.4)	(267,153		)	(4.4)
Home equity	3,302,983		3,445,584		3,453,502		3,498,907		3,609,410		(142,601		)	(4.1)	(306,427		)	(8.5)
Consumer installment	1,341,204		1,430,655		1,509,953		1,542,411		1,562,252		(89,451		)	(6.3)	(221,048		)	(14.1)
Total consumer loan portfolio	10,434,438		10,999,357		11,398,769		11,221,123		11,229,066		(564,919		)	(5.1)	(794,628		)	(7.1)
Total	$	34,343,691	$	35,535,824	$	35,921,614	$	34,497,464	$	33,510,752	$	(1,192,133	)	(3.4)%	$	832,939		2.5%

Composition of Deposits (Unaudited)

	Quarter Ended										Change From
	Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30, 2020				Sep 30, 2019
(Dollars in thousands)	2020		2020		2020		2019		2019		$			%	$			%
Noninterest-bearing deposits	$	10,691,041	$	10,480,245	$	8,237,916	$	7,970,590	$	7,979,900	$	210,796		2.0%	$	2,711,141		34.0	%
Interest-bearing deposits:
Savings	9,295,467		9,310,362		8,703,864		8,506,058		8,347,541		(14,895		)	(0.2)	947,926			11.4
Certificates of deposit	6,334,760		7,142,996		7,463,192		7,455,556		8,385,972		(808,236		)	(11.3)	(2,051,212		)	(24.5	)
Checking	7,453,504		6,693,092		6,289,046		5,966,178		6,266,740		760,412			11.4	1,186,764			18.9
Money market	5,397,325		5,584,177		5,105,285		4,570,081		4,305,921		(186,852		)	(3.3)	1,091,404			25.3
Total interest-bearing deposits	28,481,056		28,730,627		27,561,387		26,497,873		27,306,174		(249,571		)	(0.9)	1,174,882			4.3
Total deposits	$	39,172,097	$	39,210,872	$	35,799,303	$	34,468,463	$	35,286,074	$	(38,775	)	(0.1)%	$	3,886,023		11.0	%

TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Summary of Credit Quality Data

Allowance for Credit Losses (Unaudited)

	Sep. 30,				Jun. 30,				Mar. 31,				Jan. 1,		Dec. 31,				Sep. 30,
	2020				2020				2020				2020		2019				2019
(Dollars in thousands)	Balance		Reserve Rate		Balance		Reserve Rate		Balance		Reserve Rate		Adjusted for adoption of CECL		Balance		Reserve Rate		Balance		Reserve Rate
Allowance for loan and lease losses
Commercial and industrial	$	145,814		1.26%	$	122,024		1.00%	$	117,507		0.95%	$	93,884	$	42,430		0.38%	$	39,974		0.37%
Commercial real estate	197,892			2.06	162,364			1.69	86,209			0.91	67,620		27,308			0.29	24,090			0.27
Lease financing	36,386			1.34	19,041			0.70	27,610			1.02	21,631		14,742			0.55	14,367			0.55
Residential mortgage	62,006			1.07	79,479			1.30	97,185			1.51	72,939		8,099			0.13	19,816			0.33
Home equity	49,003			1.48	56,824			1.65	57,694			1.67	47,003		17,795			0.51	21,112			0.58
Consumer installment	24,128			1.80	21,382			1.49	20,178			1.34	15,967		2,678			0.17	1,859			0.12
Total allowance for loan and lease losses	515,229			1.50	461,114			1.30	406,383			1.13	319,044		113,052			0.33	121,218			0.36
Reserve for unfunded lending commitments	34,129				42,788				22,188				18,235		3,528				3,461
Total allowance for credit losses	$	549,358		1.60%	$	503,902		1.42%	$	428,571		1.19%	$	337,279	$	116,580		0.34%	$	124,679		0.37%

Changes in Allowance for Credit Losses

	Quarter Ended															Change From
	Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Sep. 30,
(Dollars in thousands)	2020			2020			2020			2019			2019			2020			2019
Allowance for loan and lease losses
Balance, beginning of period	$	461,114		$	406,383		$	113,052		$	121,218		$	146,503		$	54,731		$	314,611
Impact of CECL adoption	—			—			205,992			—			—			—			—
Adjusted balance, beginning of period	461,114			406,383			319,044			121,218			146,503			54,731			314,611
Charge-offs	(32,235		)	(9,958		)	(14,729		)	(16,891		)	(35,547		)	(22,277		)	3,312
Recoveries	7,659			6,563			9,252			10,654			6,969			1,096			690
Net (charge-offs) recoveries	(24,576		)	(3,395		)	(5,477		)	(6,237		)	(28,578		)	(21,181		)	4,002
Provision for credit losses related to loans and leases⁽¹⁾	78,323			58,126			92,990			14,403			27,188			20,197			51,135
Other⁽²⁾	368			—			(174		)	(16,332		)	(23,895		)	368			24,263
Balance, end of period	515,229			461,114			406,383			113,052			121,218			54,115			394,011
Reserve for unfunded lending commitments
Balance, beginning of period	42,788			22,188			3,528			3,461			1,936			20,600			40,852
Impact of CECL adoption	—			—			14,707			—			—			—			—
Adjusted balance, beginning of period	42,788			22,188			18,235			3,461			1,936			20,600			40,852
Provision (benefit) for credit losses related to unfunded lending commitments⁽¹⁾	(8,659		)	20,600			3,953			67			(342		)	(29,259		)	(8,317		)
Addition due to merger	—			—			—			—			1,867			—			(1,867		)
Balance, end of period	34,129			42,788			22,188			3,528			3,461			(8,659		)	30,668
Total allowance for credit losses	$	549,358		$	503,902		$	428,571		$	116,580		$	124,679		$	45,456		$	424,679

(1)		Provision for credit losses related to loans and leases and the provision (benefit) for credit losses related to unfunded lending commitments are included within provision for credit losses in the Consolidated Statements of Income beginning January 1, 2020 as a result of the adoption of CECL.
(2)		Primarily includes the transfer of the allowance for credit losses to loans and leases held-for-sale.

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

Net (Charge-offs) Recoveries

	Quarter Ended
	Sep. 30,					Jun. 30,					Mar. 31,					Dec. 31,					Sep. 30,
	2020					2020					2020					2019					2019
(Dollars in thousands)	Balance			Rate⁽¹⁾		Balance			Rate⁽¹⁾		Balance			Rate⁽¹⁾		Balance			Rate⁽¹⁾		Balance			Rate⁽¹⁾
Commercial and industrial	$	(22,201	)	0.76	%	$	9		—	%	$	(4,022	)	0.14	%	$	(5,736	)	0.21	%	$	(17,631	)	0.76	%
Commercial real estate	(144		)	0.01		(644		)	0.03		563			(0.02	)	(7		)	—		13			—
Lease financing	(161		)	0.02		(1,392		)	0.21		(878		)	0.13		(1,749		)	0.27		(2,192		)	0.34
Residential mortgage	803			(0.05	)	(871		)	0.06		355			(0.02	)	1,552			(0.10	)	(189		)	0.02
Home equity	(237		)	0.03		(335		)	0.04		(246		)	0.03		2,280			(0.25	)	405			(0.05	)
Consumer installment	(2,636		)	0.76		(162		)	0.04		(1,249		)	0.33		(2,577		)	0.67		(8,984		)	1.50
Total net (charge-offs) recoveries	$	(24,576	)	0.28	%	$	(3,395	)	0.04	%	$	(5,477	)	0.06	%	$	(6,237	)	0.07	%	$	(28,578	)	0.39	%

(1)

Annualized net charge-off rate based on average loans and leases.

Over 90-Day Delinquencies as a Percentage of Portfolio⁽¹⁾
											Change From
	Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,			Sep. 30,
	2020		2020		2020		2019		2019		2020			2019
Commercial and industrial	0.03	%	0.02	%	—	%	—	%	0.02	%	1		bps	1		bps
Commercial real estate	—		—		0.02		0.02		0.09		—			(9	)
Lease financing	0.13		0.18		0.11		0.07		0.09		(5	)		4
Residential mortgage	0.02		0.01		0.01		0.01		0.01		1			1
Home equity	—		—		0.01		—		—		—			—
Consumer installment	—		—		—		0.01		—		—			—
Subtotal	0.02		0.02		0.02		0.01		0.04		—			(2	)
Portfolios acquired with deteriorated credit quality⁽²⁾	N/A		N/A		N/A		10.43		5.47		N/A			N/A
Total delinquencies	0.02	%	0.02	%	0.02	%	0.09	%	0.09	%	—			(7	)

(1)		Excludes nonaccrual loans and leases.
(2)		Prior to the adoption of CECL as of January 1, 2020, purchased credit impaired loans were not classified as nonaccrual loans because they were recorded at their net realizable value based on the principal and interest expected to be collected on the loans.

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

Nonperforming Assets
																Change From
	Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,				Sep. 30,
(Dollars in thousands)	2020			2020			2020			2019			2019			2020				2019
Nonaccrual loans and leases:
Commercial and industrial	$	140,492		$	98,184		$	84,157		$	53,812		$	55,039		$	42,308			$	85,453
Commercial real estate	70,252			57,521			47,032			29,735			26,518			12,731				43,734
Lease financing	42,023			18,756			13,170			10,957			11,503			23,267				30,520
Residential mortgage	65,235			67,762			61,980			38,577			48,816			(2,527		)		16,419
Home equity	52,184			47,560			43,147			35,863			39,296			4,624				12,888
Consumer installment	6,535			1,668			989			714			636			4,867				5,899
Total nonaccrual loans and leases⁽¹⁾	376,721			291,451			250,475			169,658			181,808			85,270				194,913
Other real estate owned	35,554			42,744			38,914			34,256			27,638			(7,190		)		7,916
Total nonperforming assets	$	412,275		$	334,195		$	289,389		$	203,914		$	209,446		$	78,080			$	202,829

Nonaccrual loans and leases as a percentage of total loans and leases⁽¹⁾	1.10		%	0.82		%	0.70		%	0.49		%	0.54		%	28			bps	56		bps
Allowance for loan and lease losses as a percentage of nonaccrual loans and leases⁽¹⁾	136.77			158.21			162.24			66.64			66.67			(2,144		)		7,010
Allowance for credit losses as a percentage of nonaccrual loans and leases⁽¹⁾	145.83			172.89			171.10			68.71			68.58			(2,706		)		7,725
Nonperforming assets as a percentage of total loans and leases and other real estate owned⁽¹⁾	1.20			0.94			0.80			0.59			0.62			26				58

(1)

Prior to the adoption of CECL as of January 1, 2020, purchased credit impaired loans were not classified as nonaccrual loans because they were recorded at their net realizable value based on the principal and interest expected to be collected on the loans. At January 1, 2020, $73.4 million of previous purchased credit impaired loans were reclassified to nonaccrual loans as a result of the adoption of CECL.

Consolidated Capital Information (Unaudited)
																Change From
(Dollars in thousands, except per share data)	Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,		Sep. 30,
(Dollars in thousands, except per share data)	2020			2020			2020			2019			2019			2020		2019
Dividends declared per common share	$	0.35		$	0.35		$	0.35		$	0.35		$	0.35		0.0	%	0.0	%
Book value per common share	35.88			35.91			35.85			36.20			35.82			(0.1)		0.2
Tangible book value per common share⁽¹⁾	26.27			26.25			26.16			26.60			26.18			0.1		0.3
Common equity to assets	11.50		%	10.92		%	11.23		%	11.87		%	12.04		%	58	bps	(54)	bps
Tangible common equity to tangible assets⁽¹⁾	8.68			8.22			8.45			9.01			9.09			46		(41)

Regulatory Capital:⁽²⁾
Common equity Tier 1 capital	$	4,053,931		$	4,028,681		$	4,026,304		$	4,050,826		$	4,009,214		0.6	%	1.1	%
Tier 1 capital	4,244,609			4,221,283			4,225,755			4,236,648			4,197,706			0.6		1.1
Total capital	4,972,715			4,907,760			4,744,899			4,681,630			4,652,708			1.3		6.9

Common equity Tier 1 capital ratio	11.45		%	11.06		%	10.44		%	10.99		%	10.88		%	39	bps	57	bps
Tier 1 risk-based capital ratio	11.98			11.59			10.96			11.49			11.40			39		58
Total risk-based capital ratio	14.04			13.47			12.31			12.70			12.63			57		141
Tier 1 leverage ratio	8.83			8.75			9.27			9.49			11.16			8		(233)

(1)		See "Reconciliation of GAAP to Non-GAAP Financial Measures" tables.
(2)		September 30, 2020 amounts are preliminary pending completion and filing of the Corporation's regulatory reports. Regulatory capital ratios presented for periods in 2020 reflect our election of the five-year CECL transition for regulatory capital purposes.

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

Computation of adjusted diluted earnings per common share and adjusted net income:

		Quarter Ended
		Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,
(Dollars in thousands, except per share data)		2020			2020			2020			2019			2019
Net income available to common shareholders	(a)	$	53,244		$	21,270		$	49,406		$	109,905		$	19,654
Merger-related expenses		54,011			81,619			36,728			47,025			111,259
Notable items:
Sale of legacy TCF auto finance portfolio and related expenses⁽¹⁾		—			901			3,063			12,864			19,264
Termination of interest rate swaps⁽²⁾		—			—			—			—			17,302
Gain on sale of certain investment securities⁽³⁾		—			—			—			—			(5,869		)
Gains on sales of branches, write-down of company-owned vacant land parcels and branch exit costs, net⁽⁴⁾		—			(14,166		)	—			3,494			5,890
Pension fair valuation adjustment⁽⁵⁾		—			—			—			6,341			—
Loan servicing rights (recovery) impairment⁽²⁾		154			8,858			8,236			(638		)	4,520
Total notable items		154			(4,407		)	11,299			22,061			41,107
Total merger-related and notable items		54,165			77,212			48,027			69,086			152,366
Related income tax expense, net of benefits⁽⁶⁾		(11,207		)	(16,114		)	(10,071		)	(19,904		)	(46,213		)
Total adjustments, net of tax		42,958			61,098			37,956			49,182			106,153
Adjusted earnings allocated to common stock	(b)	$	96,202		$	82,368		$	87,362		$	159,087		$	125,807

Weighted-average common shares outstanding used in diluted earnings per common share calculation⁽⁷⁾	(c)	151,821,592			151,660,139			152,114,017			152,658,766			128,754,588

Diluted earnings per common share	(a)/(c)	$	0.35		$	0.14		$	0.32		$	0.72		$	0.15
Adjusted diluted earnings per common share	(b)/(c)	0.63			0.54			0.57			1.04			0.98

Net income attributable to TCF		$	55,738		$	23,764		$	51,899		$	112,399		$	22,148
Total adjustments, net of tax		42,958			61,098			37,956			49,182			106,153
Adjusted net income attributable to TCF		$	98,696		$	84,862		$	89,855		$	161,581		$	128,301

(1)		Second quarter 2020 amount included within other noninterest expense ($0.8 million) and compensation and employee benefits ($0.1 million). First quarter 2020 amount included within occupancy and equipment ($1.6 million), compensation and employee benefits ($0.9 million) and other noninterest expense ($0.6 million). Fourth quarter 2019 amount included within net gains (losses) on sales of loans and leases ($8.2 million), other noninterest expense ($2.2 million), occupancy and equipment ($1.5 million) and compensation and employee benefits ($0.9 million). Third quarter 2019 amount included within net gains (losses) on sales of loans and leases.
(2)		Included within other noninterest income.
(3)		Included within net gains on investment securities.
(4)		Second quarter 2020 amount included within other noninterest income ($14.7 million net gain) and other noninterest expense ($0.6 million). Fourth quarter of 2019 and third quarter of 2019 included within other noninterest expense.
(5)		Included within other noninterest expense.
(6)		Included within income tax expense (benefit).
(7)		Assumes conversion of common shares, as applicable.

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

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

		Quarter Ended
		Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,
(Dollars in thousands)		2020			2020			2020			2019			2019
Adjusted net income after tax expense:
Income after tax expense	(a)	$	57,302		$	26,233		$	53,816		$	114,456		$	24,978
Merger-related expenses		54,011			81,619			36,728			47,025			111,259
Notable items		154			(4,407		)	11,299			22,061			41,107
Related income tax expense, net of tax benefits		(11,207		)	(16,114		)	(10,071		)	(19,904		)	(46,213		)
Adjusted net income after tax expense for ROAA calculation	(b)	100,260			87,331			91,772			163,638			131,131
Net income available to common shareholders	(c)	53,244			21,270			49,406			109,905			19,654
Other intangibles amortization		5,498			5,516			5,480			5,505			4,544
Related income tax expense		(1,137		)	(1,151		)	(1,149		)	(1,284		)	(1,085		)
Net income available to common shareholders used in ROATCE calculation	(d)	57,605			25,635			53,737			114,126			23,113

Adjusted net income available to common shareholders:
Net income available to common shareholders		53,244			21,270			49,406			109,905			19,654
Notable items		154			(4,407		)	11,299			22,061			41,107
Merger-related expenses		54,011			81,619			36,728			47,025			111,259
Related income tax expense, net of tax benefits		(11,207		)	(16,114		)	(10,071		)	(19,904		)	(46,213		)
Net income available to common shareholders used in adjusted ROACE calculation	(e)	96,202			82,368			87,362			159,087			125,807
Other intangibles amortization		5,498			5,516			5,480			5,505			4,544
Related income tax expense		(1,137		)	(1,151		)	(1,149		)	(1,284		)	(1,085		)
Net income available to common shareholders used in adjusted ROATCE calculation	(f)	100,563			86,733			91,693			163,308			129,266
Average balances:
Average assets	(g)	49,539,600			49,716,116			46,985,426			46,119,514			39,094,366
Total equity		5,697,727			5,658,255			5,630,487			5,691,119			4,683,129
Non-controlling interest in subsidiaries		(22,638		)	(28,122		)	(25,328		)	(23,683		)	(25,516		)
Total TCF Financial Corporation shareholders' equity		5,675,089			5,630,133			5,605,159			5,667,436			4,657,613
Preferred stock		(169,302		)	(169,302		)	(169,302		)	(169,302		)	(169,302		)
Average total common shareholders' equity used in ROACE calculation	(h)	5,505,787			5,460,831			5,435,857			5,498,134			4,488,311
Goodwill, net		(1,313,046		)	(1,313,046		)	(1,301,080		)	(1,266,166		)	(890,155		)
Other intangibles, net		(155,142		)	(160,841		)	(166,298		)	(211,294		)	(142,925		)
Average tangible common shareholders' equity used in ROATCE calculation	(i)	$	4,037,599		$	3,986,944		$	3,968,479		$	4,020,674		$	3,455,231

ROAA⁽¹⁾	(a)/(g)	0.46		%	0.21		%	0.46		%	0.99		%	0.26		%
Adjusted ROAA⁽¹⁾	(b)/(g)	0.81			0.70			0.78			1.42			1.34
ROACE⁽¹⁾	(c)/(h)	3.87			1.56			3.64			8.00			1.75
Adjusted ROACE⁽¹⁾	(e)/(h)	6.99			6.03			6.43			11.57			11.21
ROATCE⁽¹⁾	(d)/(i)	5.71			2.57			5.42			11.35			2.68
Adjusted ROATCE⁽¹⁾	(f)/(i)	9.96			8.70			9.24			16.25			14.96

(1)

Annualized.

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

Computation of adjusted efficiency ratio, noninterest income and noninterest expense:

		Quarter Ended
		Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,
(Dollars in thousands)		2020			2020			2020			2019			2019
Noninterest expense	(a)	$	373,440		$	400,241		$	374,599		$	416,571		$	425,620
Merger-related expenses		(54,011		)	(81,619		)	(36,728		)	(47,025		)	(111,259		)
Write-down of company-owned vacant land parcels and branch exit costs		—			(551		)	—			(3,494		)	(5,890		)
Expenses related to the sale of Legacy TCF auto finance portfolio		—			(901		)	(3,063		)	(4,670		)	—
Pension fair valuation adjustment		—			—			—			(6,341		)	—
Adjusted noninterest expense		319,429			317,170			334,808			355,041			308,471
Lease financing equipment depreciation		(17,932		)	(18,212		)	(18,450		)	(18,629		)	(19,408		)
Amortization of intangibles		(5,498		)	(5,516		)	(5,480		)	(5,505		)	(4,544		)
Federal historic tax credit amortization		(1,758		)	(179		)	(1,521		)	(4,030		)	—
Adjusted noninterest expense, efficiency ratio	(b)	294,241			293,263			309,357			326,877			284,519

Net interest income		377,167			378,359			401,481			408,753			371,793
Noninterest income		118,810			133,054			136,963			158,052			94,258
Total revenue	(c)	495,977			511,413			538,444			566,805			466,051

Noninterest income		118,810			133,054			136,963			158,052			94,258
Gain on sales of branches		—			(14,717		)	—			—			—
Sale of Legacy TCF auto finance portfolio		—			—			—			8,194			19,264
Termination of interest rate swaps		—			—			—			—			17,302
Gain on sales of certain investment securities		—			—			—			—			(5,869		)
Loan servicing rights impairment (recovery)		154			8,858			8,236			(638		)	4,520
Adjusted noninterest income		118,964			127,195			145,199			165,608			129,475
Net interest income		377,167			378,359			401,481			408,753			371,793
Net interest income FTE adjustment		2,842			3,032			2,983			2,896			2,488
Adjusted net interest income (FTE)		380,009			381,391			404,464			411,649			374,281
Lease financing equipment depreciation		(17,932		)	(18,212		)	(18,450		)	(18,629		)	(19,408		)
Adjusted total revenue, efficiency ratio	(d)	$	481,041		$	490,374		$	531,213		$	558,628		$	484,348

Efficiency ratio	(a)/(c)	75.29		%	78.26		%	69.57		%	73.49		%	91.32		%
Adjusted efficiency ratio	(b)/(d)	61.17			59.80			58.24			58.51			58.74

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

Computation of adjusted net interest income and margin:

	Quarter Ended
	Sep. 30,			Jun. 30,
(Dollars in thousands)	2020			2020
Net Interest Income	$	377,167		$	378,359
Purchase accounting accretion and amortization	(17,710		)	(18,209		)
Adjusted net interest income, excluding purchase accounting accretion and amortization	$	359,457		$	360,150
Net fees recognized on PPP loans	(11,886		)	(7,805		)
Interest recognition on PPP loans⁽¹⁾	(2,824		)	(1,759		)
Total PPP loans impact	(14,710		)	(9,564		)
Adjusted net interest income, excluding purchase accounting accretion and amortization and PPP impact	$	344,747		$	350,586
Net interest margin (FTE)	3.34		%	3.35		%
Purchase accounting accretion and amortization impact	(0.16		)	(0.16		)
Adjusted net interest margin, excluding purchase accounting accretion and amortization (FTE)	3.18			3.19
PPP loans impact⁽²⁾	0.01			0.01
Adjusted net interest margin, excluding purchase accounting accretion and amortization and PPP loans impact (FTE)	3.19		%	3.20		%

(1)		Interest income recorded on PPP loans less funding costs.
(2)		The exclusion of PPP loans additionally reduces average earning assets by $1.8 billion and $1.2 billion in the third and second quarters of 2020, respectively.

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

		Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,
(Dollars in thousands, except per share data)		2020			2020			2020			2019			2019
Total equity		$	5,658,420		$	5,658,555		$	5,655,833		$	5,727,241		$	5,693,417
Non-controlling interest in subsidiaries		(21,376		)	(23,300		)	(30,149		)	(20,226		)	(23,313		)
Total TCF Financial Corporation shareholders' equity		5,637,044			5,635,255			5,625,684			5,707,015			5,670,104
Preferred stock		(169,302		)	(169,302		)	(169,302		)	(169,302		)	(169,302		)
Total common stockholders' equity	(a)	5,467,742			5,465,953			5,456,382			5,537,713			5,500,802
Goodwill, net		(1,313,046		)	(1,313,046		)	(1,313,046		)	(1,299,878		)	(1,265,111		)
Other intangibles, net		(151,875		)	(157,373		)	(162,887		)	(168,368		)	(215,910		)
Tangible common shareholders' equity	(b)	4,002,821			3,995,534			3,980,449			4,069,467			4,019,781

Total assets	(c)	47,565,789			50,062,460			48,594,383			46,651,553			45,692,511
Goodwill, net		(1,313,046		)	(1,313,046		)	(1,313,046		)	(1,299,878		)	(1,265,111		)
Other intangibles, net		(151,875		)	(157,373		)	(162,887		)	(168,368		)	(215,910		)
Tangible assets	(d)	$	46,100,868		$	48,592,041		$	47,118,450		$	45,183,307		$	44,211,490

Common stock shares outstanding	(e)	152,379,722			152,233,106			152,185,984			152,965,571			153,571,381

Common equity to assets	(a) / (c)	11.50		%	10.92		%	11.23		%	11.87		%	12.04		%
Tangible common equity to tangible assets	(b) / (d)	8.68			8.22			8.45			9.01			9.09

Book value per common share	(a) / (e)	$	35.88		$	35.91		$	35.85		$	36.20		$	35.82
Tangible book value per common share	(b) / (e)	26.27			26.25			26.16			26.60			26.18

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

Composition of Loans and Allowance for Credit Losses excluding PPP

	Quarter Ended						Change From
	Sep. 30,			Jun. 30,			Jun. 30, 2020
(Dollars in thousands)	2020			2020			$			%
Commercial and industrial	$11,557,237			$12,200,721			$	(643,484	)	(5.3)%
Commercial real estate	9,627,330			9,628,344			(1,014		)	0.0
Lease financing	2,724,686			2,707,402			17,284			0.6
Total commercial loan and lease portfolio	23,909,253			24,536,467			(627,214		)	(2.6)
Residential mortgage	5,790,251			6,123,118			(332,867		)	(5.4)
Home equity	3,302,983			3,445,584			(142,601		)	(4.1)
Consumer installment	1,341,204			1,430,655			(89,451		)	(6.3)
Total consumer loan portfolio	10,434,438			10,999,357			(564,919		)	(5.1)
Total loans and leases	34,343,691			35,535,824			(1,192,133		)	(3.4)
PPP (Commercial and industrial)	1,836,850			1,819,469			17,381			1.0
Loans and leases excluding PPP loans
Commercial and industrial	9,720,387			10,381,252			(660,865		)	(6.4)
Commercial real estate	9,627,330			9,628,344			(1,014		)	0.0
Lease financing	2,724,686			2,707,402			17,284			0.6
Total commercial loan and lease portfolio	22,072,403			22,716,998			(644,595		)	(2.8)
Residential mortgage	5,790,251			6,123,118			(332,867		)	(5.4)
Home equity	3,302,983			3,445,584			(142,601		)	(4.1)
Consumer installment	1,341,204			1,430,655			(89,451		)	(6.3)
Total consumer loan portfolio	10,434,438			10,999,357			(564,919		)	(5.1)
Total loans and leases, excluding PPP loans	$32,506,841			$33,716,355			$	(1,209,514	)	(3.6)%
Allowance for credit losses	$	549,358		$	503,902		$	45,456		9.0%
Allowance for credit losses as a % of total loans and leases	1.60		%	1.42		%	18			bp
Allowance for credit losses as a % of loans and leases, excluding PPP loans	1.69			1.49			20

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Source: TCF Financial Corporation

View source version on businesswire.com: https://www.businesswire.com/news/home/20201026005841/en/

Randi Berris (248) 608-5239 [email protected] (Media)
Timothy Sedabres (952) 745-2766 [email protected] (Investors)

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CORRECTING and REPLACING TCF Reports Third Quarter 2020 Results