TCF Financial : Reports Second Quarter 2020 Results

July 27, 2020 at 04:12 pm EDT

TCF also announces quarterly cash dividends on common and preferred stock

TCF Financial Corporation (NASDAQ: TCF):

Second Quarter 2020 Highlights

Quarterly net income of $23.8 million, or $0.14 per diluted share, down 54.2% from the first quarter of 2020
Adjusted diluted earnings per common share of $0.54⁽¹⁾, down 5.3% from the first quarter of 2020. Adjusted diluted earnings per common share excludes $61.1 million, or $0.40 per share, after-tax impact of merger-related expenses and notable items
Assisted customers via COVID-19-related loan and lease deferrals with $1.8 billion of balances on deferral status as of June 30, 2020 ($1.5 billion of commercial balances and $327.1 million of consumer balances)
Assisted business and commercial customers via $1.9 billion of total loans funded through the Paycheck Protection Program ("PPP")
Completed the sale of seven Arizona branches resulting in a gain on sale of $14.7 million
Loan and lease balances declined 1.1% from March 31, 2020, primarily due to declines in the commercial and industrial and residential mortgage portfolios, partially offset by the addition of $1.8 billion of Paycheck Protection Program ("PPP") loans
Deposit growth of 9.5% compared to March 31, 2020
Net charge-offs of $3.4 million, or 0.04% of average loans and leases (annualized)
Provision for credit losses of $78.7 million, down 18.8% from the first quarter of 2020
Efficiency ratio of 78.26%, up 869 basis points from the first quarter of 2020. Adjusted efficiency ratio of 59.80%⁽¹⁾, up 156 basis points from the first quarter of 2020
Common equity Tier 1 capital ratio of 11.09%, compared to 10.44% at March 31, 2020
Declared quarterly cash dividends on common stock of $0.35 per share payable on September 1, 2020

Merger-related Expenses and Notable items in the Second Quarter of 2020 and First Quarter of 2020⁽¹⁾

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, compared to pre-tax merger-related expenses of $36.7 million, $29.0 million net of tax, or $0.19 per diluted common share for the first quarter of 2020
Pre-tax income, net of 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, compared to pre-tax net expenses of $11.3 million, $8.9 million net of tax, or $0.06 per diluted common share related to notable items for the first 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: TCF’s financial results for periods ended prior to August 1, 2019 reflect Legacy TCF financial results only on a standalone basis. 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
	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Jun. 30,
(Dollars in thousands, except per share data)	2020			2020			2019			2019			2019			2020			2019
Financial Results
Net income attributable to TCF	$	23,764		$	51,899		$112,399			$	22,148		$	90,427		(54.2	)	%	(73.7	)	%
Net interest income	378,359			401,481			408,753			371,793			254,057			(5.8	)		48.9
Basic earnings per common share	$	0.14		$	0.33		$	0.72		$	0.15		$	1.07		(57.6	)		(86.9	)
Diluted earnings per common share	0.14			0.32			0.72			0.15			1.07			(56.3	)		(86.9	)
Return on average assets ("ROAA")⁽³⁾	0.21		%	0.46		%	0.99		%	0.26		%	1.54		%	(25	)	bps	(133	)	bps
ROACE⁽³⁾	1.56			3.64			8.00			1.75			14.27			(208	)		(1,271	)
ROATCE (non-GAAP)⁽²⁾⁽³⁾	2.57			5.42			11.35			2.68			15.46			(285	)		(1,289	)
Net interest margin	3.33			3.73			3.86			4.12			4.46			(40	)		(113	)
Net interest margin (FTE)⁽²⁾⁽³⁾	3.35			3.76			3.89			4.14			4.49			(41	)		(114	)
Net charge-offs as a percentage of average loans and leases⁽³⁾	0.04			0.06			0.07			0.39			0.29			(2	)		(25	)
Nonperforming assets as a percentage of total loans and leases and other real estate owned⁽⁴⁾	0.94			0.80			0.59			0.62			0.62			14			32
Efficiency ratio	78.26			69.57			73.49			91.32			65.11			869			1,315
Adjusted Financial Results (non-GAAP)
Adjusted net income attributable to TCF⁽²⁾	$	84,862		$	89,855		$161,581			$128,301			$	93,650		(5.6	)	%	(9.4	)	%
Adjusted diluted earnings per common share⁽²⁾	$	0.54		$	0.57		$	1.04		$	0.98		$	1.11		(5.3	)		(51.4	)
Adjusted ROAA⁽²⁾⁽³⁾	0.70		%	0.78		%	1.42		%	1.34		%	1.59		%	(8	)	bps	(89	)	bps
Adjusted ROACE⁽²⁾⁽³⁾	6.03			6.43			11.57			11.21			14.79			(40	)		(876	)
Adjusted ROATCE⁽²⁾⁽³⁾	8.70			9.24			16.25			14.96			16.02			(54	)		(732	)
Adjusted efficiency ratio⁽²⁾	59.80			58.24			58.51			58.74			61.48			156			(168	)
N.M. Not meaningful

(1)		Financial results for any periods ended prior to August 1, 2019 reflect Legacy TCF financials on a standalone basis. Certain reclassifications have been made to prior period financial information to conform to the current period presentation.
(2)		Denotes a non-GAAP financial measure. See "Reconciliation of GAAP to Non-GAAP Financial Measures" tables.
(3)		Annualized.
(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).

	For the Quarter Ended June 30, 2020									For the Quarter Ended March 31, 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	$	(81,619	)	$	(64,585	)	$	(0.42	)	$	(36,728	)	(29,026		)	$	(0.19	)
Notable items:
Expenses related to the sale of Legacy TCF auto finance portfolio⁽²⁾	(901		)	(713		)	—			(3,063		)	(2,421		)	(0.02		)
Branch sales and exit costs, net⁽³⁾	14,166			11,210			0.07			—			—			—
Loan servicing rights impairment⁽⁴⁾	(8,858		)	(7,009		)	(0.05		)	(8,236		)	(6,509		)	(0.04		)
Total notable items	4,407			3,488			0.02			(11,299		)	(8,930		)	(0.06		)
Total merger-related and notable items	$	(77,212	)	$	(61,097	)	$	(0.40	)	$	(48,027	)	$	(37,956	)	$	(0.25	)

(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). First quarter of 2020 included within occupancy and equipment ($1.6 million), compensation and employee benefits ($0.9 million) and other noninterest expense ($0.6 million).
(3)		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 $23.8 million, or diluted earnings per common share of $0.14, for the second quarter of 2020, compared with $51.9 million, or diluted earnings per common share of $0.32, for the first quarter of 2020. Adjusted net income was $84.9 million, or $0.54 per diluted common share for the second quarter of 2020, compared with $89.9 million, or $0.57 per diluted common share, for the first quarter of 2020 (see "Reconciliation of GAAP to Non-GAAP Financial Measures" tables).

"During the second quarter, we continued to demonstrate the resiliency and strength of TCF during this period of economic uncertainty, low interest rates, and global pandemic,” said Craig R. Dahl, president and chief executive officer. “Our focus remains on ensuring the safety and well-being of our team members, and the financial well-being of our customers and our communities. We continued to forge ahead with our integration activities during the quarter and we remain on track for the on-time completion of our integration program during the third quarter. We remain confident in our ability to deliver on the cost synergies we committed to for the fourth quarter of this year.

“We have been active in supporting small businesses in our communities by funding $1.9 billion of loans through the PPP. We have also extended loan and lease deferrals to provide financial relief to our commercial and consumer customers, while continuing to support the broader financial needs of our customers.

“We believe TCF is well positioned with strong capital levels and substantial liquidity as we face a low interest rate environment and uncertain economic outlook. Our lending portfolios also benefit from diversification across both geographies and asset classes.

“Our team members are working extremely hard to ensure we support our customers in this current economic environment, while delivering on our commitment to being a premier Midwest bank with the size and scale to compete and win in our markets.”

Net Interest Income and Net Interest Margin

Net interest income was $378.4 million for the second quarter of 2020, a decrease of $23.1 million, or 5.8%, from the first quarter of 2020. Purchase accounting accretion and amortization included in net interest income was $18.2 million for the second quarter of 2020, compared to $25.3 million for the first quarter of 2020. Adjusted net interest income, excluding purchase accounting accretion and amortization, was $360.2 million for the second quarter of 2020, compared to $376.2 million for the first quarter of 2020, a non-GAAP financial measure. Additionally, second quarter 2020 net interest income recorded included $9.6 million of interest income from PPP less funding costs. Adjusted net interest income, excluding purchase accounting accretion and amortization and the impact from PPP loans, was $350.6 million for the second quarter of 2020, a non-GAAP financial measure. Net interest margin was 3.33% for the second quarter of 2020, compared to 3.73% in the first quarter of 2020, while net interest margin on a fully tax-equivalent basis (FTE) was 3.35%, down 41 basis points from the first quarter of 2020. The decrease in net interest margin from the first quarter of 2020 was additionally driven by the full quarter impact of the Federal Reserve's rate cuts, a decrease in the benefit provided by purchase accounting accretion and amortization and higher average cash balances, partially offset by lower cost of funds. Adjusted net interest margin FTE, excluding purchase accounting accretion and amortization and the impact of PPP loans, was 3.20% in the second quarter of 2020, compared to 3.53% in the first quarter of 2020, a non-GAAP financial measure. See the "Reconciliation of GAAP to Non-GAAP Financial Measures" tables for reconciliations of our noted non-GAAP measures.

Noninterest Income

Noninterest income was $133.1 million for the second quarter of 2020, a decrease of $3.9 million, or 2.9%, from the first quarter of 2020. 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. Noninterest income for the first quarter of 2020 included an $8.2 million loan servicing rights impairment, a notable item, included in other noninterest income. Adjusted noninterest income for the second quarter of 2020 was $127.2 million, compared to $145.2 million in the first quarter of 2020 (see "Reconciliation of GAAP to Non-GAAP Financial Measures" tables). The second quarter of 2020, compared to the first quarter of 2020, also included increases of $8.4 million in net gains on sales of loans and leases and $3.6 million in leasing revenue, which were offset by decreases of $11.8 million and $1.0 million in fee and service charges on deposit accounts and card and ATM revenue, respectively, and a decrease of $0.4 million of favorable interest rate swap mark-to-market adjustment resulting from changes in the interest rate environment, included in other noninterest income.

Noninterest Expense

Noninterest expense was $400.2 million for the second quarter of 2020, an increase of $25.6 million, or 6.8%, from the first quarter of 2020. The second quarter of 2020 included $81.6 million of merger-related expenses, compared to $36.7 million for the first 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. Noninterest expense for the first quarter of 2020 also included $3.1 million of expense related to the sale of the Legacy TCF auto finance portfolio ($1.6 million in occupancy and equipment expense, $0.9 million in compensation and employee benefits and $0.6 million in other noninterest expense) considered a notable item. Excluding merger-related expenses and notable items, adjusted noninterest expense was $317.2 million for the second quarter of 2020, compared to $334.8 million for the first quarter of 2020 (see "Reconciliation of GAAP to Non-GAAP Financial Measures" tables). The second quarter of 2020 also included $0.2 million of federal historic tax credit amortization, included in other noninterest expense, compared to $1.5 million in the first quarter of 2020.

Income Tax Expense

Income tax expense for the second quarter of 2020 was $6.2 million, an effective tax rate of 19.1%, compared to $13.1 million, an effective tax rate of 19.6% for the first quarter of 2020. The $6.9 million, or 52.5%, decrease in income tax expense was primarily driven by lower pre-tax income.

Credit Quality

Provision for credit losses Provision for credit losses was $78.7 million for the second quarter of 2020, a decrease of $18.2 million, from the first quarter of 2020. The provision for credit losses is comprised of $58.1 million for the provision for credit losses related to loans and leases and $20.6 million for the provision for credit losses related to unfunded lending commitments in the second quarter of 2020, compared to $93.0 million for the provision for credit losses related to loans and leases and $4.0 million for the provision for credit losses related to unfunded lending commitments in the first quarter of 2020. The decrease in provision for credit losses related to loans and leases from the first quarter of 2020 was primarily due to a decrease in loan originations, excluding PPP loans which are individually guaranteed by the Small Business Administration and therefore the accounting under CECL does not require reserves to be recorded on such loans, partially offset by the economic downturn related to COVID-19. The increase in provision for credit losses related to unfunded lending commitments from the first quarter of 2020 was primarily due to the economic downturn related to COVID-19 and a decrease in line utilization.

Net charge-off rate The annualized net charge-offs as a percentage of average loans and leases was 0.04% for the second quarter of 2020, down 2 basis points from the first quarter of 2020.

Allowance for Credit Losses Allowance for credit losses 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. Allowance for credit losses was $503.9 million, or 1.42% of total loans and leases, at June 30, 2020, up from $428.6 million, or 1.19%, at March 31, 2020. The allowance for credit losses as a percentage of total loans and leases, excluding PPP loans was 1.49% (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 from March 31, 2020 was primarily due to further deterioration in economic outlook as a result of the impact of COVID-19.

Nonaccrual loans and leases Nonaccrual loans and leases were $291.5 million at June 30, 2020 and represented 0.82% of total loans and leases, compared to $250.5 million, or 0.70% of total loans and leases, at March 31, 2020. The $41.0 million increase in nonaccrual loans and leases from March 31, 2020 included increases within each of our loan and lease portfolios.

Balance Sheet

Loans and leases Loans and leases were $35.5 billion at June 30, 2020, a decrease of $0.4 billion, or 1.1%, compared to $35.9 billion at March 31, 2020. The decrease was primarily due to a decline in the commercial and industrial portfolio, primarily inventory finance related to seasonality, strong dealer activity and the lack of backfill from manufacturers as a result of the economic shutdown, in addition to a decline in the residential mortgage portfolio, partially offset by the addition of PPP loans. As of June 30, 2020 we had $1.8 billion of PPP loans outstanding, all included in our commercial and industrial loans.

Investment securities The investment securities portfolio was $7.3 billion at June 30, 2020, an increase of $188.6 million, or 2.6%, compared to $7.2 billion at March 31, 2020. The increase from March 31, 2020 was primarily due to purchases of residential agency mortgage-backed securities.

Deposits Deposits were $39.2 billion at June 30, 2020, an increase of $3.4 billion, or 9.5%, compared to $35.8 billion at March 31, 2020. The increase from March 31, 2020 was primarily due to increases in noninterest-bearing deposits of $2.2 billion, savings account balances of $606.5 million, money market deposits of $478.9 million and checking deposit account balances of $404.0 million, reflecting lower consumer spending.

Capital The common equity Tier 1 capital ratio was 11.09% at June 30, 2020, compared to 10.44% at March 31, 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 September 1, 2020 to shareholders of record at the close of business on August 14, 2020. In addition, the board of directors declared a quarterly cash dividend of $0.35625 per depositary share payable on September 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 August 14, 2020.

Conference Call Details TCF will host a conference call to discuss second quarter 2020 results on Tuesday, July 28, 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 2542421. To listen to the replay via phone, please dial (877) 344-7529 and enter access code 10145803. The replay begins approximately one hour after the call is completed on Tuesday, July 28, 2020 and will be available through Tuesday, August 4, 2020.

TCF Financial Corporation (NASDAQ: TCF) is a Detroit, Michigan-based financial holding company with $50 billion in total assets at June 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 500 branches 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 the merger. 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 of the transaction on TCF’s future financial performance (including anticipated accretion to earnings per share, the tangible book value earn-back period and other operating and return metrics), the expected costs to be incurred in connection with the merger, 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)	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31, 2020					Jun 30, 2019
	2020			2020			2019			2019			2019			$			%		$				%
ASSETS:
Cash and cash equivalents:
Cash and due from banks	$	535,507		$	713,413		$	491,787		$	586,060		$	294,566		$	(177,906	)	(24.9	)%	$	240,941			81.8	%
Interest-bearing deposits with other banks	2,545,170			565,458			736,584			736,954			260,705			1,979,712			N.M.		2,284,465				N.M.
Total cash and cash equivalents	3,080,677			1,278,871			1,228,371			1,323,014			555,271			1,801,806			140.9		2,525,406				N.M.
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost	386,483			484,461			442,440			290,238			105,659			(97,978		)	(20.2	)	280,824				N.M.
Investment securities:
Available-for-sale, at fair value	7,219,373			7,025,224			6,720,001			5,579,835			3,109,803			194,149			2.8		4,109,570				132.1
Held-to-maturity, at amortized cost	130,101			135,619			139,445			144,000			144,919			(5,518		)	(4.1	)	(14,818		)		(10.2	)
Total investment securities	7,349,474			7,160,843			6,859,446			5,723,835			3,254,722			188,631			2.6		4,094,752				125.8
Loans and leases held-for-sale	532,799			287,177			199,786			1,436,069			74,410			245,622			85.5		458,389				N.M.
Loans and leases	35,535,824			35,921,614			34,497,464			33,510,752			19,185,137			(385,790		)	(1.1	)	16,350,687				85.2
Allowance for loan and lease losses	(461,114		)	(406,383		)	(113,052		)	(121,218		)	(146,503		)	(54,731		)	(13.5	)	(314,611		)		N.M.
Loans and leases, net	35,074,710			35,515,231			34,384,412			33,389,534			19,038,634			(440,521		)	(1.2	)	16,036,076				84.2
Premises and equipment, net	472,240			516,454			533,138			554,194			432,751			(44,214		)	(8.6	)	39,489				9.1
Goodwill	1,313,046			1,313,046			1,299,878			1,265,111			154,757			0			0.0		1,158,289				N.M.
Other intangible assets, net	157,373			162,887			168,368			215,910			18,885			(5,514		)	(3.4	)	138,488				N.M.
Loan servicing rights	38,816			47,283			56,313			55,301			19			(8,467		)	(17.9	)	38,797				N.M.
Other assets	1,656,842			1,828,130			1,479,401			1,439,305			991,722			(171,288		)	(9.4	)	665,120				67.1
Total assets	$	50,062,460		$	48,594,383		$	46,651,553		$	45,692,511		$	24,626,830		$	1,468,077		3.0		$	25,435,630			103.3	%
LIABILITIES AND EQUITY:
Deposits:
Noninterest-bearing	$	10,480,245		$	8,237,916		$	7,970,590		$	7,979,900		$	4,062,912		$	2,242,329		27.2	%	$	6,417,333			157.9	%
Interest-bearing	28,730,627			27,561,387			26,497,873			27,306,174			15,049,475			1,169,240			4.2		13,681,152				90.9
Total deposits	39,210,872			35,799,303			34,468,463			35,286,074			19,112,387			3,411,569			9.5		20,098,485				105.2
Short-term borrowings	2,772,998			3,482,535			2,669,145			2,607,300			350,764			(709,537		)	(20.4	)	2,422,234				N.M.
Long-term borrowings	936,908			2,600,594			2,354,448			860,482			1,617,531			(1,663,686		)	(64.0	)	(680,623			)	(42.1	)
Other liabilities	1,483,127			1,056,118			1,432,256			1,245,238			835,630			427,009			40.4		647,497				77.5
Total liabilities	44,403,905			42,938,550			40,924,312			39,999,094			21,916,312			1,465,355			3.4		22,487,593				102.6
Equity:
Preferred stock	169,302			169,302			169,302			169,302			169,302			—			—		—				—
Common stock	152,233			152,186			152,966			153,571			87,944			47			0.0		64,289				73.1
Additional paid-in capital	3,441,925			3,433,234			3,462,080			3,478,159			781,788			8,691			0.3		2,660,137				N.M.
Retained earnings	1,700,480			1,732,932			1,896,427			1,840,214			1,874,308			(32,452		)	(1.9	)	(173,828			)	(9.3	)
Accumulated other comprehensive income	198,408			166,170			54,277			56,228			37,334			32,238			19.4		161,074				N.M.
Treasury stock at cost and other	(27,093		)	(28,140		)	(28,037		)	(27,370		)	(265,017		)	1,047			3.7		237,924				89.8
Total TCF Financial Corporation shareholders' equity	5,635,255			5,625,684			5,707,015			5,670,104			2,685,659			9,571			0.2		2,949,596				109.8
Non-controlling interest	23,300			30,149			20,226			23,313			24,858			(6,849		)	(22.7	)	(1,558			)	(6.3	)
Total equity	5,658,555			5,655,833			5,727,241			5,693,417			2,710,517			2,722			0.0		2,948,038				108.8
Total liabilities and equity	$	50,062,460		$	48,594,383		$	46,651,553		$	45,692,511		$	24,626,829		$	1,468,077		3.0		$	25,435,631			103.3	%
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, 2020					Jun. 30, 2019
(Dollars in thousands)	2020		2020		2019		2019			2019		$			%		$			%
Interest income:
Interest and fees on loans and leases	$	392,826	$	443,096	$	446,738	$	417,370		$	283,282	$	(50,270	)	(11.3	)%	$	109,544		38.7	%
Interest on investment securities:
Taxable	32,505		40,920		36,282		31,038			22,041		(8,415		)	(20.6	)	10,464			47.5
Tax-exempt	4,155		4,349		4,374		3,385			1,208		(194		)	(4.5	)	2,947			N.M.
Interest on loans held-for-sale	3,322		1,561		15,767		1,408			599		1,761			112.8		2,723			N.M.
Interest on other earning assets	5,562		5,466		6,617		6,607			3,651		96			1.8		1,911			52.3
Total interest income	438,370		495,392		509,778		459,808			310,781		(57,022		)	(11.5	)	127,589			41.1
Interest expense:
Interest on deposits	46,785		67,419		77,003		70,900			40,646		(20,634		)	(30.6	)	6,139			15.1
Interest on borrowings	13,226		26,492		24,022		17,115			16,078		(13,266		)	(50.1	)	(2,852		)	(17.7	)
Total interest expense	60,011		93,911		101,025		88,015			56,724		(33,900		)	(36.1	)	3,287			5.8
Net interest income	378,359		401,481		408,753		371,793			254,057		(23,122		)	(5.8	)	124,302			48.9
Provision for credit losses	78,726		96,943		14,403		27,188			13,569		(18,217		)	(18.8	)	65,157			N.M.
Net interest income after provision for credit losses	299,633		304,538		394,350		344,605			240,488		(4,905		)	(1.6	)	59,145			24.6
Noninterest income:
Leasing revenue	37,172		33,565		46,686		39,590			39,277		3,607			10.7		(2,105		)	(5.4	)
Fees and service charges on deposit accounts	22,832		34,597		39,356		34,384			27,842		(11,765		)	(34.0	)	(5,010		)	(18.0	)
Net gains (losses) on sales of loans and leases	29,034		20,590		12,934		(5,984		)	11,141		8,444			41.0		17,893			160.6
Card and ATM revenue	20,636		21,685		24,751		23,315			20,496		(1,049		)	(4.8	)	140			0.7
Wealth management revenue	6,206		6,151		6,172		4,241			—		55			0.9		6,206			N.M.
Servicing fee revenue	3,041		6,792		6,022		5,121			4,523		(3,751		)	(55.2	)	(1,482		)	(32.8	)
Net gains on investment securities	8		—		8		5,900			1,066		8			N.M.		(1,058		)	(99.2	)
Other	14,125		13,583		22,123		(12,309		)	5,373		542			4.0		8,752			162.9
Total noninterest income	133,054		136,963		158,052		94,258			109,718		(3,909		)	(2.9	)	23,336			21.3
Noninterest expense:
Compensation and employee benefits	171,799		171,528		180,969		155,745			116,266		271			0.2		55,533			47.8
Occupancy and equipment	54,107		57,288		56,771		49,229			41,850		(3,181		)	(5.6	)	12,257			29.3
Lease financing equipment depreciation	18,212		18,450		18,629		19,408			19,133		(238		)	(1.3	)	(921		)	(4.8	)
Net foreclosed real estate and repossessed assets	998		1,859		4,242		2,203			2,448		(861		)	(46.3	)	(1,450		)	(59.2	)
Merger-related expenses	81,619		36,728		47,025		111,259			4,226		44,891			122.2		77,393			N.M.
Other	73,506		88,746		108,935		87,776			52,926		(15,240		)	(17.2	)	20,580			38.9
Total noninterest expense	400,241		374,599		416,571		425,620			236,849		25,642			6.8		163,392			69.0
Income before income tax expense (benefit)	32,446		66,902		135,831		13,243			113,357		(34,456		)	(51.5	)	(80,911		)	(71.4	)
Income tax expense (benefit)	6,213		13,086		21,375		(11,735		)	19,314		(6,873		)	(52.5	)	(13,101		)	(67.8	)
Income after income tax expense (benefit)	26,233		53,816		114,456		24,978			94,043		(27,583		)	(51.3	)	(67,810		)	(72.1	)
Income attributable to non-controlling interest	2,469		1,917		2,057		2,830			3,616		552			28.8		(1,147		)	(31.7	)
Net income attributable to TCF Financial Corporation	23,764		51,899		112,399		22,148			90,427		(28,135		)	(54.2	)	(66,663		)	(73.7	)
Preferred stock dividends	2,494		2,493		2,494		2,494			2,494		1			—		—			—
Net income available to common shareholders	$	21,270	$	49,406	$	109,905	$	19,654		$	87,933	$	(28,136	)	(56.9	)	$	(66,663	)	(75.8	)
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)	2020		2019		$			%
Interest income:
Interest and fees on loans and leases	$	835,922	$	566,520	$	269,402		47.6	%
Interest on investment securities:
Taxable	73,425		38,707		34,718			89.7
Tax-exempt	8,504		3,892		4,612			118.5
Interest on loans held-for-sale	4,883		1,424		3,459			N.M.
Interest on other earning assets	11,028		7,132		3,896			54.6
Total interest income	933,762		617,675		316,087			51.2
Interest expense:
Interest on deposits	114,204		78,254		35,950			45.9
Interest on borrowings	39,718		30,935		8,783			28.4
Total interest expense	153,922		109,189		44,733			41.0
Net interest income	779,840		508,486		271,354			53.4
Provision for credit losses	175,669		23,691		151,978			N.M.
Net interest income after provision for credit losses	604,171		484,795		119,376			24.6
Noninterest income:
Leasing revenue	70,737		77,442		(6,705		)	(8.7	)
Fees and service charges on deposit accounts	57,429		54,120		3,309			6.1
Net gains on sales of loans and leases	49,624		19,358		30,266			156.3
Card and ATM revenue	42,321		39,155		3,166			8.1
Wealth management revenue	12,357		—		12,357			N.M.
Servicing fee revenue	9,833		9,633		200			2.1
Net gains on investment securities	8		1,517		(1,509		)	(99.5	)
Other	27,708		11,997		15,711			131.0
Total noninterest income	270,017		213,222		56,795			26.6
Noninterest expense:
Compensation and employee benefits	343,327		240,208		103,119			42.9
Occupancy and equipment	111,395		83,560		27,835			33.3
Lease financing equipment depreciation	36,662		38,389		(1,727		)	(4.5	)
Net foreclosed real estate and repossessed assets	2,857		7,078		(4,221		)	(59.6	)
Merger-related expenses	118,347		13,684		104,663			N.M.
Other	162,252		107,005		55,247			51.6
Total noninterest expense	774,840		489,924		284,916			58.2
Income before income tax expense	99,348		208,093		(108,745		)	(52.3	)
Income tax expense	19,299		40,601		(21,302		)	(52.5	)
Income after income tax expense	80,049		167,492		(87,443		)	(52.2	)
Income attributable to non-controlling interest	4,386		6,571		(2,185		)	(33.3	)
Net income attributable to TCF Financial Corporation	75,663		160,921		(85,258		)	(53.0	)
Preferred stock dividends	4,987		4,987		—			—
Net income available to common shareholders	$	70,676	$	155,934	$	(85,258	)	(54.7	)
N.M. Not Meaningful

TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields and Rates (Unaudited)
	Quarter Ended
	Jun. 30, 2020						Mar. 31, 2020						Jun. 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	$	401,532	$	4,376		4.38%	$	454,675	$	3,152		2.79%	$	112,118	$	1,093		3.91%
Investment securities held-to-maturity	132,054		71			0.21	136,277		560			1.64	146,296		924			2.53
Investment securities available-for-sale:
Taxable	5,730,762		32,434			2.26	5,892,006		40,360			2.74	2,711,984		21,117			3.11
Tax-exempt⁽³⁾	743,744		5,221			2.81	773,468		5,503			2.85	222,534		1,530			2.75
Loans and leases held-for-sale	356,671		3,322			3.73	138,058		1,561			4.53	40,835		599			5.88
Loans and leases⁽³⁾⁽⁴⁾
Commercial and industrial	12,713,714		140,576			4.41	11,827,315		160,802			5.42	6,683,060		109,679			6.56
Commercial real estate	9,658,124		95,373			3.91	9,291,540		117,743			5.01	3,069,969		39,204			5.05
Lease financing	2,712,291		33,803			4.99	2,682,323		34,156			5.09	2,565,175		32,899			5.13
Residential mortgage	6,326,227		62,023			3.93	6,113,279		61,379			4.02	2,337,818		28,665			4.91
Home equity	3,509,107		45,314			5.19	3,514,278		51,103			5.85	2,997,050		51,588			6.90
Consumer installment	1,459,446		17,703			4.88	1,517,412		19,742			5.23	1,586,633		22,262			5.63
Total loans and leases⁽³⁾⁽⁴⁾	36,378,909		394,792			4.33	34,946,147		444,925			5.08	19,239,705		284,297			5.91
Interest-bearing deposits with banks and other	1,587,665		1,186			0.30	538,971		2,314			1.72	280,075		2,557			3.64
Total interest-earning assets	45,331,337		441,402			3.88	42,879,602		498,375			4.64	22,753,547		312,117			5.48
Other assets	4,384,779						4,105,824						1,730,275
Total assets	$	49,716,116					$	46,985,426					$	24,483,822
LIABILITIES AND EQUITY:
Noninterest-bearing deposits	$	9,830,687					$	7,929,933					$	3,980,811
Interest-bearing deposits:
Savings	9,082,184		8,930			0.40	8,589,815		13,669			0.64	6,452,510		12,314			0.77
Certificates of deposit	7,491,502		26,744			1.44	7,329,632		33,065			1.81	4,527,822		23,304			2.06
Checking	6,649,288		2,329			0.14%	5,990,309		5,830			0.39%	2,479,814		440			0.07%
Money market	5,380,547		8,782			0.66	4,792,248		14,855			1.25	1,430,556		4,588			1.29
Total interest-bearing deposits	28,603,521		46,785			0.66	26,702,004		67,419			1.02	14,890,702		40,646			1.09
Total deposits	38,434,208		46,785			0.49	34,631,937		67,419			0.78	18,871,513		40,646			0.86
Borrowings:
Short-term borrowings	3,016,490		4,085			0.54	2,689,262		10,582			1.56	321,043		2,131			2.63
Long-term borrowings	1,072,394		9,141			3.40	2,608,204		15,910			2.42	1,657,527		13,946			3.34
Total borrowings	4,088,884		13,226			1.29	5,297,466		26,492			1.98	1,978,570		16,077			3.23
Total interest-bearing liabilities	32,692,405		60,011			0.74	31,999,470		93,911			1.18	16,869,272		56,723			1.34
Total deposits and borrowings	42,523,092		60,011			0.57	39,929,403		93,911			0.94	20,850,083		56,723			1.09
Accrued expenses and other liabilities	1,534,769						1,425,536						969,723
Total liabilities	44,057,861						41,354,939						21,819,806
Total TCF Financial Corporation shareholders' equity	5,630,133						5,605,159						2,634,386
Non-controlling interest in subsidiaries	28,122						25,328						29,630
Total equity	5,658,255						5,630,487						2,664,016
Total liabilities and equity	$	49,716,116					$	46,985,426					$	24,483,822
Net interest spread (FTE)						3.31%						3.70%						4.39%
Net interest income(FTE) and net interest margin(FTE)			$	381,391		3.35%			$	404,464		3.76%			$	255,394		4.49%
Reconciliation to Reported Net Interest Income
Net interest income (FTE)			$381,391						$404,464						$255,394
Adjustments for taxable equivalent interest⁽¹⁾⁽³⁾
Loans and leases			(1,966		)				(1,829		)				(1,015		)
Tax-exempt investment securities			(1,066		)				(1,154		)				(322		)
Total FTE adjustments			(3,032		)				(2,983		)				(1,337		)
Net interest income (GAAP)			$378,359						$401,481						$254,057
Net interest margin (GAAP)			3.33		%				3.73		%				4.46		%

(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)

	Six Months Ended June 30,
	2020						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	$	428,103	$	7,528		3.54%	$	108,646	$	2,054		3.81%
Investment securities held-to-maturity	134,166		631			0.94	146,922		1,459			1.99
Investment securities available-for-sale:
Taxable	5,811,384		72,794			2.51	2,418,222		37,248			3.08
Tax-exempt⁽³⁾	758,606		10,724			2.83	368,951		4,927			2.67
Loans and leases held-for-sale	247,364		4,883			3.95	47,980		1,424			5.97
Loans and leases⁽³⁾⁽⁴⁾
Commercial and industrial	12,270,514		301,378			4.90	6,589,631		216,395			6.59
Commercial real estate	9,474,832		213,116			4.45	2,994,221		76,941			5.11
Lease financing	2,697,307		67,959			5.04	2,546,364		65,283			5.13
Residential mortgage	6,219,753		123,402			3.97	2,341,827		58,123			4.99
Consumer installment	1,488,429		37,445			5.06	1,718,987		47,762			5.60
Home equity	3,511,693		96,417			5.52	3,022,449		104,040			6.94
Total loans and leases⁽³⁾⁽⁴⁾	35,662,528		839,717			4.70	19,213,479		568,544			5.94
Interest-bearing deposits with banks and other	1,063,319		3,500			0.66	270,867		5,078			3.75
Total interest-earning assets	44,105,470		939,777			4.25	22,575,067		620,734			5.52
Other assets	4,245,301						1,721,355
Total assets	$	48,350,771					$	24,296,422
LIABILITIES AND EQUITY:
Noninterest-bearing deposits	$	8,880,310					$	3,950,447
Interest-bearing deposits:
Checking	6,319,799		8,159			0.26	2,468,852		827			0.07
Savings	8,836,000		22,599			0.51	6,353,800		22,984			0.73
Money market	5,086,397		23,637			0.93	1,460,427		9,041			1.25
Certificates of deposit	7,410,567		59,809			1.62	4,574,710		45,402			2.00
Total interest-bearing deposits	27,652,763		114,204			0.83	14,857,789		78,254			1.06
Total deposits	36,533,073		114,204			0.63	18,808,236		78,254			0.84
Borrowings:
Short-term borrowings	2,852,876		14,667			1.02	307,347		4,088			2.65
Long-term borrowings	1,840,299		25,051			2.71	1,579,613		26,847			3.39
Total borrowings	4,693,175		39,718			1.68	1,886,960		30,935			3.27
Total interest-bearing liabilities	32,345,938		153,922			0.95	16,744,749		109,189			1.31
Total deposits and borrowings	41,226,248		153,922			0.75	20,695,196		109,189			1.06
Accrued expenses and other liabilities	1,480,152						979,359
Total liabilities	42,706,400						21,674,555
Total TCF Financial Corporation shareholders' equity	5,617,646						2,594,778
Non-controlling interest in subsidiaries	26,725						27,089
Total equity	5,644,371						2,621,867
Total liabilities and equity	$	48,350,771					$	24,296,422
Net interest spread (FTE)						3.50%						4.46%
Net interest income (FTE) and net interest margin (FTE)			$	785,855		3.55%			$	511,545		4.55%
Reconciliation to Reported Net Interest Income
Net interest income (FTE)			$	785,855					$	511,545
Adjustments for taxable equivalent interest⁽¹⁾⁽³⁾
Loans			(3,795		)				(2,024		)
Tax-exempt investment securities			(2,220		)				(1,035		)
Total FTE adjustments			(6,015		)				(3,059		)
Net interest income (GAAP)			$	779,840					$	508,486
Net interest margin (GAAP)			3.52		%				4.52		%

(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
	Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31, 2020					Jun. 30, 2019
(Dollars in thousands)	2020		2020		2019		2019		2019		$			%		$			%
ASSETS:
Federal Home Loan Bank and Federal Reserve Bank stocks	$	401,532	$	454,675	$	388,640	$	230,767	$	112,118	$	(53,143	)	(11.7	)%	$	289,414		N.M.
Investment securities held-to-maturity	132,054		136,277		140,434		143,078		146,296		(4,223		)	(3.1	)	(14,242		)	(9.7	)%
Investment securities available-for-sale:
Taxable	5,730,762		5,892,006		4,960,520		4,232,878		2,711,984		(161,244		)	(2.7	)	3,018,778			111.3
Tax-exempt	743,744		773,468		778,994		643,576		222,534		(29,724		)	(3.8	)	521,210			N.M.
Loans and leases held-for-sale	356,671		138,058		1,121,326		118,482		40,835		218,613			158.3		315,836			N.M.
Loans and leases⁽¹⁾ :
Commercial and industrial	12,713,714		11,827,315		10,955,937		9,290,978		6,683,060		886,399			7.5		6,030,654			90.2
Commercial real estate	9,658,124		9,291,540		9,057,834		6,964,643		3,069,969		366,584			3.9		6,588,155			N.M.
Lease financing	2,712,291		2,682,323		2,616,360		2,570,567		2,565,175		29,968			1.1		147,116			5.7
Residential mortgage	6,326,227		6,113,279		6,023,647		4,853,627		2,337,818		212,948			3.5		3,988,409			170.6
Consumer installment	1,459,446		1,517,412		1,546,952		2,389,830		1,586,633		(57,966		)	(3.8	)	(127,187		)	(8.0	)
Home equity	3,509,107		3,514,278		3,604,153		3,433,830		2,997,050		(5,171		)	(0.1	)	512,057			17.1
Total loans and leases⁽¹⁾	36,378,909		34,946,147		33,804,883		29,503,475		19,239,705		1,432,762			4.1		17,139,204			89.1
Interest-bearing deposits with banks and other	1,587,665		538,971		656,555		933,014		280,075		1,048,694			194.6		1,307,590			N.M.
Total interest-earning assets	45,331,337		42,879,602		41,851,352		35,805,270		22,753,547		2,451,735			5.7		22,577,790			99.2
Other assets	4,384,779		4,105,824		4,268,162		3,289,096		1,730,275		278,955			6.8		2,654,504			153.4
Total assets	$	49,716,116	$	46,985,426	$	46,119,514	$	39,094,366	$	24,483,822	$	2,730,690		5.8		$	25,232,294		103.1
LIABILITIES AND EQUITY:
Noninterest-bearing deposits	$	9,830,687	$	7,929,933	$	7,968,769	$	6,564,195	$	3,980,811	$	1,900,754		24.0		$	5,849,876		147.0	%
Interest-bearing deposits:
Checking	6,649,288		5,990,309		5,891,566		4,805,843		2,479,814		658,979			11.0		4,169,474			168.1
Savings	9,082,184		8,589,815		8,404,460		7,676,165		6,452,510		492,369			5.7		2,629,674			40.8
Money market	5,380,547		4,792,248		4,463,476		3,490,922		1,430,556		588,299			12.3		3,949,991			N.M.
Certificates of deposit	7,491,502		7,329,632		7,825,573		7,320,720		4,527,822		161,870			2.2		2,963,680			65.5
Total interest-bearing deposits	28,603,521		26,702,004		26,585,075		23,293,650		14,890,702		1,901,517			7.1		13,712,819			92.1
Total deposits	38,434,208		34,631,937		34,553,844		29,857,845		18,871,513		3,802,271			11.0		19,562,695			103.7
Borrowings:
Short-term borrowings	3,016,490		2,689,262		2,585,682		1,884,228		321,043		327,228			12.2		2,695,447			N.M.
Long-term borrowings	1,072,394		2,608,204		1,739,852		1,472,150		1,657,527		(1,535,810		)	(58.9	)	(585,133		)	(35.3	)
Total borrowings	4,088,884		5,297,466		4,325,534		3,356,378		1,978,570		(1,208,582		)	(22.8	)	2,110,314			106.7
Total interest-bearing liabilities	32,692,405		31,999,470		30,910,609		26,650,028		16,869,272		692,935			2.2		15,823,133			93.8
Total deposits and borrowings	42,523,092		39,929,403		38,879,378		33,214,223		20,850,083		2,593,689			6.5		21,673,009			103.9
Accrued expenses and other liabilities	1,534,769		1,425,536		1,549,017		1,197,014		969,723		109,233			7.7		565,046			58.3
Total liabilities	44,057,861		41,354,939		40,428,395		34,411,237		21,819,806		2,702,922			6.5		22,238,055			101.9
Total TCF Financial Corporation shareholders' equity	5,630,133		5,605,159		5,667,436		4,657,613		2,634,386		24,974			0.4		2,995,747			113.7
Non-controlling interest in subsidiaries	28,122		25,328		23,683		25,516		29,630		2,794			11.0		(1,508		)	(5.1	)
Total equity	5,658,255		5,630,487		5,691,119		4,683,129		2,664,016		27,768			0.5		2,994,239			112.4
Total liabilities and equity	$	49,716,116	$	46,985,426	$	46,119,514	$	39,094,366	$	24,483,822	$	2,730,690		5.8		$	25,232,294		103.1
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
	Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,		Jun. 30,
	2020		2020		2019		2019		2019		2020		2019
ASSETS:
Federal Home Loan Bank and Federal Reserve Bank stocks	4.38	%	2.79	%	3.24	%	1.39	%	3.91	%	159	bps	47	bps
Investment securities held-to-maturity	0.21		1.64		2.53		1.68		2.53		(143)		(232)
Investment securities available-for-sale:
Taxable	2.26		2.74		2.85		2.88		3.11		(48)		(85)
Tax-exempt⁽³⁾	2.81		2.85		2.84		2.66		2.75		(4)		6
Loans and leases held-for-sale	3.73		4.53		5.58		4.74		5.88		(80)		(215)
Loans and leases⁽³⁾
Commercial and industrial	4.41		5.42		5.63		6.25		6.56		(101)		(215)
Commercial real estate	3.91		5.01		5.38		5.45		5.05		(110)		(114)
Lease financing	4.99		5.09		5.11		5.11		5.13		(10)		(14)
Residential mortgage	3.93		4.02		4.05		4.23		4.91		(9)		(98)
Consumer installment	4.88		5.23		4.97		5.73		5.63		(35)		(75)
Home equity	5.19		5.85		5.93		6.49		6.90		(66)		(171)
Total loans and leases⁽³⁾	4.33		5.08		5.24		5.62		5.91		(75)		(158)
Interest-bearing deposits with banks and other	0.30		1.72		2.07		2.44		3.64		(142)		(334)

Total interest-earning assets	3.88		4.64		4.85		5.11		5.48		(76)		(160)

LIABILITIES:
Interest-bearing deposits:
Checking	0.14		0.39		0.51		0.46		0.07		(25)		7
Savings	0.40		0.64		0.71		0.73		0.77		(24)		(37)
Money market	0.66		1.25		1.38		1.48		1.29		(59)		(63)
Certificates of deposit	1.44		1.81		1.97		2.07		2.06		(37)		(62)
Total interest-bearing deposits	0.66		1.02		1.15		1.21		1.09		(36)		(43)
Total deposits	0.49		0.78		0.88		0.94		0.86		(29)		(37)
Borrowings:
Short-term borrowings	0.54		1.56		1.73		1.11		2.63		(102)		(209)
Long-term borrowings	3.40		2.42		2.87		3.17		3.34		98		6
Total borrowings	1.29		1.98		2.19		2.01		3.23		(69)		(194)

Total interest-bearing liabilities	0.74		1.18		1.29		1.31		1.34		(44)		(60)
Total deposits and borrowings	0.57		0.94		1.03		1.05		1.09		(37)		(52)

Net interest margin (FTE)	3.35		3.76		3.89		4.14		4.49		(41)		(114)

(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
	Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31, 2020				Jun 30, 2019
(Dollars in thousands)	2020		2020		2019		2019		2019		$			%	$
Commercial and industrial	$	12,200,721	$	12,326,943	$	11,439,602	$	10,913,343	$	6,666,106	$	(126,222	)	(1.0)%	$	5,534,615
Commercial real estate	9,628,344		9,486,904		9,136,870		8,773,970		3,168,774		141,440			1.5	6,459,570
Lease financing	2,707,402		2,708,998		2,699,869		2,594,373		2,582,613		(1,596		)	(0.1)	124,789
Total commercial loan and lease portfolio	24,536,467		24,522,845		23,276,341		22,281,686		12,417,493		13,622			0.1	12,118,974
Residential mortgage	6,123,118		6,435,314		6,179,805		6,057,404		2,368,411		(312,196		)	(4.9)	3,754,707
Home equity	3,445,584		3,453,502		3,498,907		3,609,410		2,924,753		(7,918		)	(0.2)	520,831
Consumer installment	1,430,655		1,509,953		1,542,411		1,562,252		1,474,480		(79,298		)	(5.3)	(43,825		)
Total consumer loan portfolio	10,999,357		11,398,769		11,221,123		11,229,066		6,767,644		(399,412		)	(3.5)	4,231,713
Total	$	35,535,824	$	35,921,614	$	34,497,464	$	33,510,752	$	19,185,137	$	(385,790	)	(1.1)	$	16,350,687

Composition of Deposits (Unaudited)

	Quarter Ended										Change From
	Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31, 2020				Jun 30, 2019
(Dollars in thousands)	2020		2020		2019		2019		2019		$			%	$
Noninterest-bearing deposits	$	10,480,245	$	8,237,916	$	7,970,590	$	7,979,900	$	4,062,912	$	2,242,329		27.2%	$	6,417,333
Interest-bearing deposits:
Savings	9,310,362		8,703,864		8,506,058		8,347,541		6,503,102		606,498			7.0	2,807,260
Certificates of deposit	7,142,996		7,463,192		7,455,556		8,385,972		4,605,327		(320,196		)	(4.3)	2,537,669
Checking	6,693,092		6,289,046		5,966,178		6,266,740		2,498,042		404,046			6.4	4,195,050
Money market	5,584,177		5,105,285		4,570,081		4,305,921		1,443,004		478,892			9.4	4,141,173
Total interest-bearing deposits	28,730,627		27,561,387		26,497,873		27,306,174		15,049,475		1,169,240			4.2	13,681,152
Total deposits	$	39,210,872	$	35,799,303	$	34,468,463	$	35,286,074	$	19,112,387	$	3,411,569		9.5	$	20,098,485

TCF FINANCIAL CORPORATION AND SUBSIDIARIES
Summary of Credit Quality Data

Allowance for Credit Losses (Unaudited)

	Jun. 30,				Mar. 31,				Jan. 1,		Dec. 31,				Sep. 30,				Jun. 30,
	2020				2020				2020		2019				2019				2019
(Dollars in thousands)	Balance		% of Loan and Lease Portfolio		Balance		% of Loan and Lease Portfolio		Adjusted for adoption of CECL		Balance		% of Loan and Lease Portfolio		Balance		% of Loan and Lease Portfolio		Balance		% of Loan and Lease Portfolio
Allowance for loan and lease losses
Commercial and industrial	$	122,024		1.00%	$	117,507		0.95%	$	93,884	$	42,430		0.38%	$	39,974		0.37%	$	38,605		0.59%
Commercial real estate	162,364			1.69	86,209			0.91	67,620		27,308			0.29	24,090			0.27	22,747			0.70
Lease financing	19,041			0.70	27,610			1.02	21,631		14,742			0.55	14,367			0.55	14,440			0.56
Residential mortgage	79,479			1.30	97,185			1.51	72,939		8,099			0.13	19,816			0.33	21,102			0.89
Consumer installment	21,382			1.49	20,178			1.34	15,967		2,678			0.17	1,859			0.12	26,731			1.81
Home equity	56,824			1.65	57,694			1.67	47,003		17,795			0.51	21,112			0.58	22,878			0.78
Total allowance for loan and lease losses	$	461,114		1.30%	$	406,383		1.13%	$	319,044	$	113,052		0.33%	$	121,218		0.36%	$	146,503		0.76%
Reserve for unfunded lending commitments	42,788				22,188						3,528				3,461				1,936
Total allowance for credit losses	$	503,902		1.42%	$	428,571		1.19%			$	116,580		0.34%	$	124,679		0.37%	$	148,439		0.77%

Changes in Allowance for Credit Losses

	Quarter Ended															Change From
	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Jun. 30,
(Dollars in thousands)	2020			2020			2019			2019			2019			2020			2019
Allowance for loan and lease losses
Balance, beginning of period	$	406,383		$	113,052		$	121,218		$	146,503		$	147,972		$	293,331		$	258,411
Impact of CECL adoption	—			205,992			—			—			—			(205,992		)	—
Adjusted balance, beginning of period	406,383			319,044			121,218			146,503			147,972			87,339			258,411
Charge-offs	(9,958		)	(14,729		)	(16,891		)	(35,547		)	(21,066		)	4,771			11,108
Recoveries	6,563			9,252			10,654			6,969			6,984			(2,689		)	(421		)
Net (charge-offs) recoveries	(3,395		)	(5,477		)	(6,237		)	(28,578		)	(14,082		)	2,082			10,687
Provision for credit losses related to loans and leases⁽¹⁾	58,126			92,990			14,403			27,188			13,569			(34,864		)	44,557
Other⁽²⁾	—			(174		)	(16,332		)	(23,895		)	(956		)	174			956
Balance, end of period	461,114			406,383			113,052			121,218			146,503			54,731			314,611
Reserve for unfunded lending commitments
Balance, beginning of period	22,188			3,528			3,461			1,936			1,941			18,660			20,247
Impact of CECL adoption	—			14,707			—			—			—			(14,707		)	—
Adjusted balance, beginning of period	22,188			18,235			3,461			1,936			1,941			3,953			20,247
Provision (benefit) for credit losses related to unfunded lending commitments⁽¹⁾	20,600			3,953			67			(342		)	(5		)	16,647			20,605
Addition due to merger	—			—			—			1,867			—			—			—
Balance, end of period	42,788			22,188			3,528			3,461			1,936			20,600			40,852
Total allowance for credit losses	$	503,902		$	428,571		$	116,580		$	124,679		$	148,439		$	75,331		$	355,463

(1)		Provision for credit losses related to loans and leases and the provision for credit losses related to unfunded lending commitments are included within Provision for Credit Losses in the Consolidated Statements of Income.
(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
	Jun. 30,					Mar. 31,					Dec. 31,					Sep. 30,					Jun. 30,
	2020					2020					2019					2019					2019
(Dollars in thousands)	Balance			Rate⁽¹⁾		Balance			Rate⁽¹⁾		Balance			Rate⁽¹⁾		Balance			Rate⁽¹⁾		Balance			Rate⁽¹⁾
Commercial and industrial	$	9		—	%	$	(4,022	)	0.14	%	$	(5,736	)	0.21	%	$	(17,631	)	0.76	%	$	(5,820	)	0.35	%
Commercial real estate	(644		)	0.03		563			(0.02	)	(7		)	—		13			—		9			—
Lease financing	(1,392		)	0.21		(878		)	0.13		(1,749		)	0.27		(2,192		)	0.34		(966		)	0.15
Residential mortgage	(871		)	0.06		355			(0.02	)	1,552			(0.10	)	(189		)	0.02		(80		)	0.01
Consumer installment	(162		)	0.04		(1,249		)	0.33		(2,577		)	0.67		(8,984		)	1.50		(6,990		)	1.76
Home equity	(335		)	0.04		(246		)	0.03		2,280			(0.25	)	405			(0.05	)	(235		)	0.03
Total net (charge-offs) recoveries	$	(3,395	)	0.04	%	$	(5,477	)	0.06	%	$	(6,237	)	0.07	%	$	(28,578	)	0.39	%	$	(14,082	)	0.29	%

(1)

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

Over 90-Day Delinquencies as a Percentage of Portfolio⁽¹⁾
											Change From
	Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,			Jun. 30,
	2020		2020		2019		2019		2019		2020			2019
Commercial and industrial	0.02	%	—	%	—	%	0.02	%	—	%	2		bps	2		bps
Commercial real estate	—		0.02		0.02		0.09		—		(2	)		—
Lease financing	0.18		0.11		0.07		0.09		0.12		7			6
Residential mortgage	0.01		0.01		0.01		0.01		0.05		—			(4	)
Consumer installment	—		—		0.01		—		0.14		—			(14	)
Home equity	—		0.01		—		—		—		(1	)		—
Subtotal	0.02		0.02		0.01		0.04		0.03		—			(1	)
Portfolios acquired with deteriorated credit quality⁽²⁾	N/A		N/A		10.43		5.47		18.92		N/A			N/A
Total delinquencies	0.02	%	0.02	%	0.09	%	0.09	%	0.04	%	—			(2	)

(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
	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,				Jun. 30,
(Dollars in thousands)	2020			2020			2019			2019			2019			2020				2019
Nonaccrual loans and leases:
Commercial and industrial	$	98,184		$	84,157		$	53,812		$	55,039		$	18,483		$	14,027			$	79,701
Commercial real estate	57,521			47,032			29,735			26,518			545			10,489				56,976
Lease financing	18,756			13,170			10,957			11,503			12,886			5,586				5,870
Residential mortgage	67,762			61,980			38,577			48,816			34,760			5,782				33,002
Consumer installment	1,668			989			714			636			8,633			679				(6,965		)
Home equity	47,560			43,147			35,863			39,296			32,686			4,413				14,874
Total nonaccrual loans and leases⁽¹⁾	291,451			250,475			169,658			181,808			107,993			40,976				183,458
Other real estate owned	42,744			38,914			34,256			27,638			11,964			3,830				30,780
Total nonperforming assets	$	334,195		$	289,389		$	203,914		$	209,446		$	119,957		$	44,806			$	214,238

Nonaccrual loans and leases as a percentage of total loans and leases⁽¹⁾	0.82		%	0.70		%	0.49		%	0.54		%	0.56		%	12			bps	26			bps
Allowance for loan and lease losses as a percentage of nonaccrual loans and leases⁽¹⁾	158.21			162.24			66.64			66.67			135.66			(403		)		2,255
Allowance for credit losses as a percentage of nonaccrual loans and leases⁽¹⁾	172.89			171.10			68.71			68.58			137.45			179				3,544
Nonperforming assets as a percentage of total loans and leases and other real estate owned⁽¹⁾	0.94			0.80			0.59			0.62			0.62			14				32

(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)	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,		Jun. 30,
(Dollars in thousands, except per share data)	2020			2020			2019			2019			2019			2020		2019
Dividends declared per common share	$	0.35		$	0.35		$	0.35		$	0.35		$	0.30		0.0	%	16.7	%
Book value per common share	35.91			35.85			36.20			35.82			30.43			0.2		18.0
Tangible book value per common share⁽¹⁾	26.25			26.16			26.60			26.18			28.33			0.3		(7.3)
Common equity to assets	10.92		%	11.23		%	11.87		%	12.04		%	10.22		%	(31)	bps	70	bps
Tangible common equity to tangible assets⁽¹⁾	8.22			8.45			9.01			9.09			9.58			(23)		(136)

Regulatory Capital:⁽²⁾
Common equity Tier 1 capital	$	4,028,681		$	4,026,304		$	4,050,826		$	4,009,214		$	2,305,706		0.1	%	74.7	%
Tier 1 capital	4,221,283			4,225,755			4,236,648			4,197,706			2,495,178			(0.1)		69.2
Total capital	4,907,760			4,744,899			4,681,630			4,652,708			2,811,347			3.4		74.6

Common equity Tier 1 capital ratio	11.09		%	10.44		%	10.99		%	10.88		%	10.99		%	65	bps	10	bps
Tier 1 risk-based capital ratio	11.62			10.96			11.49			11.40			11.90			66		(28)
Total risk-based capital ratio	13.51			12.31			12.70			12.63			13.40			120		11
Tier 1 leverage ratio	8.75			9.27			9.49			11.16			10.26			(52)		(151)

(1)		See "Reconciliation of GAAP to Non-GAAP Financial Measures" tables.
(2)		June 30, 2020 amounts are preliminary pending completion and filing of the Corporation's regulatory reports. June 30, 2020 and March 31, 2020 regulatory capital ratios 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
		Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,
(Dollars in thousands, except per share data)		2020			2020			2019			2019			2019
Net income available to common shareholders		$	21,270		$	49,406		$	109,905		$	19,654		$	87,933
Earnings allocated to participating securities		—			—			—			—			(17		)
Earnings allocated to common stock	(a)	21,270			49,406			109,905			19,654			87,916
Merger-related expenses		81,619			36,728			47,025			111,259			4,226
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⁾		8,858			8,236			(638		)	4,520			—
Total notable items		(4,407		)	11,299			22,061			41,107			—
Related income tax expense, net of benefits⁽⁶⁾		(16,114		)	(10,071		)	(19,904		)	(46,213		)	(1,003		)
Total adjustments, net of tax		61,098			37,956			49,182			106,153			3,223
Adjusted earnings allocated to common stock	(b)	$	82,368		$	87,362		$	159,087		$	125,807		$	91,139

Weighted-average common shares outstanding used in diluted earnings per common share calculation⁽⁷⁾	(c)	151,660,139			152,114,017			152,658,766			128,754,588			82,298,920

Diluted earnings per common share	(a)/(c)	$	0.14		$	0.32		$	0.72		$	0.15		$	1.07
Adjusted diluted earnings per common share	(b)/(c)	0.54			0.57			1.04			0.98			1.11

Net income attributable to TCF		$	23,764		$	51,899		$	112,399		$	22,148		$	90,427
Total adjustments, net of tax		61,098			37,956			49,182			106,153			3,223
Adjusted net income attributable to TCF		$	84,862		$	89,855		$	161,581		$	128,301		$	93,650

(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.

Computation of adjusted net interest income and margin:

	Quarter Ended
	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,
(Dollars in thousands)	2020			2020			2019			2019			2019
Net Interest Income	$	378,359		$	401,481		$	408,753		$	371,793		$	254,057
Purchase accounting accretion and amortization	(18,209		)	(25,258		)	(30,523		)	(28,411		)	—
Adjusted net interest income, excluding purchase accounting accretion and amortization	$	360,150		$	376,223		$	378,230		$	343,382		$	254,057
Net fees recognized on PPP loans	(7,805		)	—			—			—			—
Interest recognition on PPP loans⁽¹⁾	(1,759		)	—			—			—			—
Total PPP loans impact	(9,564		)	—			—			—			—
Adjusted net interest income, excluding purchase accounting accretion and amortization and PPP impact	$	350,586		$	376,223		$	378,230		$	343,382		$	254,057
Net interest margin (FTE)	3.35		%	3.76		%	3.89		%	4.14		%	4.49		%
Purchase accounting accretion and amortization impact	(0.16		)	(0.23		)	(0.29		)	(0.31		)	—
Adjusted net interest margin, excluding purchase accounting accretion and amortization (FTE)	3.19			3.53			3.60			3.83			4.49
PPP loans impact⁽²⁾	0.01			—			—			—			—
Adjusted net interest margin, excluding purchase accounting accretion and amortization and PPP loans impact (FTE)	3.20		%	3.53		%	3.60		%	3.83		%	4.49		%

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

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

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

		Quarter Ended
		Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,
(Dollars in thousands)		2020			2020			2019			2019			2019
Adjusted net income after tax expense:
Income after tax expense	(a)	$	26,233		$	53,816		$	114,456		$	24,978		$	94,043
Merger-related expenses		81,619			36,728			47,025			111,259			4,226
Notable items		(4,407		)	11,299			22,061			41,107			—
Related income tax expense, net of tax benefits		(16,114		)	(10,071		)	(19,904		)	(46,213		)	(1,003		)
Adjusted net income after tax expense for ROAA calculation	(b)	87,331			91,772			163,638			131,131			97,266
Net income available to common shareholders	(c)	21,270			49,406			109,905			19,654			87,933
Other intangibles amortization		5,516			5,480			5,505			4,544			798
Related income tax expense		(1,151		)	(1,149		)	(1,284		)	(1,085		)	(189		)
Net income available to common shareholders used in ROATCE calculation	(d)	25,635			53,737			114,126			23,113			88,542

Adjusted net income available to common shareholders:
Net income available to common shareholders		21,270			49,406			109,905			19,654			87,933
Notable items		(4,407		)	11,299			22,061			41,107			—
Merger-related expenses		81,619			36,728			47,025			111,259			4,226
Related income tax expense, net of tax benefits		(16,114		)	(10,071		)	(19,904		)	(46,213		)	(1,003		)
Net income available to common shareholders used in adjusted ROACE calculation	(e)	82,368			87,362			159,087			125,807			91,156
Other intangibles amortization		5,516			5,480			5,505			4,544			798
Related income tax expense		(1,151		)	(1,149		)	(1,284		)	(1,085		)	(189		)
Net income available to common shareholders used in adjusted ROATCE calculation	(f)	86,733			91,693			163,308			129,266			91,765
Average balances:
Average assets	(g)	49,716,116			46,985,426			46,119,514			39,094,366			24,483,822
Total equity		5,658,255			5,630,487			5,691,119			4,683,129			2,664,016
Non-controlling interest in subsidiaries		(28,122		)	(25,328		)	(23,683		)	(25,516		)	(29,630		)
Total TCF Financial Corporation shareholders' equity		5,630,133			5,605,159			5,667,436			4,657,613			2,634,386
Preferred stock		(169,302		)	(169,302		)	(169,302		)	(169,302		)	(169,302		)
Average total common shareholders' equity used in ROACE calculation	(h)	5,460,831			5,435,857			5,498,134			4,488,311			2,465,084
Goodwill, net		(1,313,046		)	(1,301,080		)	(1,266,166		)	(890,155		)	(154,757		)
Other intangibles, net		(160,841		)	(166,298		)	(211,294		)	(142,925		)	(19,270		)
Average tangible common shareholders' equity used in ROATCE calculation	(i)	$	3,986,944		$	3,968,479		$	4,020,674		$	3,455,231		$	2,291,057

ROAA⁽¹⁾	(a)/(g)	0.21		%	0.46		%	0.99		%	0.26		%	1.54		%
Adjusted ROAA⁽¹⁾	(b)/(g)	0.70			0.78			1.42			1.34			1.59
ROACE⁽¹⁾	(c)/(h)	1.56			3.64			8.00			1.75			14.27
Adjusted ROACE⁽¹⁾	(e)/(h)	6.03			6.43			11.57			11.21			14.79
ROATCE⁽¹⁾	(d)/(i)	2.57			5.42			11.35			2.68			15.46
Adjusted ROATCE⁽¹⁾	(f)/(i)	8.70			9.24			16.25			14.96			16.02

(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
		Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,
(Dollars in thousands)		2020			2020			2019			2019			2019
Noninterest expense	(a)	$	400,241		$	374,599		$	416,571		$	425,620		$	236,849
Merger-related expenses		(81,619		)	(36,728		)	(47,025		)	(111,259		)	(4,226		)
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		317,170			334,808			355,041			308,471			232,623
Lease financing equipment depreciation		(18,212		)	(18,450		)	(18,629		)	(19,408		)	(19,133		)
Amortization of intangibles		(5,516		)	(5,480		)	(5,505		)	(4,544		)	(798		)
Federal historic tax credit amortization		(179		)	(1,521		)	(4,030		)	—			—
Adjusted noninterest expense, efficiency ratio	(b)	293,263			309,357			326,877			284,519			212,692

Net interest income		378,359			401,481			408,753			371,793			254,057
Noninterest income		133,054			136,963			158,052			94,258			109,718
Total revenue	(c)	511,413			538,444			566,805			466,051			363,775

Noninterest income		133,054			136,963			158,052			94,258			109,718
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)		8,858			8,236			(638		)	4,520			—
Adjusted noninterest income		127,195			145,199			165,608			129,475			109,718
Net interest income		378,359			401,481			408,753			371,793			254,057
Net interest income FTE adjustment		3,032			2,983			2,896			2,488			1,337
Adjusted net interest income		381,391			404,464			411,649			374,281			255,394
Lease financing equipment depreciation		(18,212		)	(18,450		)	(18,629		)	(19,408		)	(19,133		)
Adjusted total revenue, efficiency ratio	(d)	$	490,374		$	531,213		$	558,628		$	484,348		$	345,979

Efficiency ratio	(a)/(c)	78.26		%	69.57		%	73.49		%	91.32		%	65.11		%
Adjusted efficiency ratio	(b)/(d)	59.80			58.24			58.51			58.74			61.48

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

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)		2020			2020			2019			2019			2019
Total equity		$	5,658,555		$	5,655,833		$	5,727,241		$	5,693,417		$	2,710,517
Non-controlling interest in subsidiaries		(23,300		)	(30,149		)	(20,226		)	(23,313		)	(24,858		)
Total TCF Financial Corporation shareholders' equity		5,635,255			5,625,684			5,707,015			5,670,104			2,685,659
Preferred stock		(169,302		)	(169,302		)	(169,302		)	(169,302		)	(169,302		)
Total common stockholders' equity	(a)	5,465,953			5,456,382			5,537,713			5,500,802			2,516,357
Goodwill, net		(1,313,046		)	(1,313,046		)	(1,299,878		)	(1,265,111		)	(154,757		)
Other intangibles, net		(157,373		)	(162,887		)	(168,368		)	(215,910		)	(18,885		)
Tangible common shareholders' equity	(b)	3,995,534			3,980,449			4,069,467			4,019,781			2,342,715

Total assets	(c)	50,062,460			48,594,383			46,651,553			45,692,511			24,626,830
Goodwill, net		(1,313,046		)	(1,313,046		)	(1,299,878		)	(1,265,111		)	(154,757		)
Other intangibles, net		(157,373		)	(162,887		)	(168,368		)	(215,910		)	(18,885		)
Tangible assets	(d)	$	48,592,041		$	47,118,450		$	45,183,307		$	44,211,490		$	24,453,188

Common stock shares outstanding	(e)	152,233,106			152,185,984			152,965,571			153,571,381			82,703,469

Common equity to assets	(a) / (c)	10.92		%	11.23		%	11.87		%	12.04		%	10.22		%
Tangible common equity to tangible assets	(b) / (d)	8.22			8.45			9.01			9.09			9.58

Book value per common share	(a) / (e)	$	35.91		$	35.85		$	36.20		$	35.82		$	30.43
Tangible book value per common share	(b) / (e)	26.25			26.16			26.60			26.18			28.33

*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
	Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31, 2020				Jun 30, 2019
(Dollars in thousands)	2020		2020		2019		2019		2019		$			%	$
Commercial and industrial	$12,200,721		$12,326,943		$11,439,602		$10,913,343		$6,666,106		$	(126,222	)	(1.0)%	$	5,534,615
Commercial real estate	9,628,344		9,486,904		9,136,870		8,773,970		3,168,774		141,440			1.5	6,459,570
Lease financing	2,707,402		2,708,998		2,699,869		2,594,373		2,582,613		(1,596		)	(0.1)	124,789
Total commercial loan and lease portfolio	24,536,467		24,522,845		23,276,341		22,281,686		12,417,493		13,622			0.1	12,118,974
Residential mortgage	6,123,118		6,435,314		6,179,805		6,057,404		2,368,411		(312,196		)	(4.9)	3,754,707
Consumer installment	1,430,655		1,509,953		1,542,411		1,562,252		1,474,480		(79,298		)	(5.3)	(43,825		)
Home equity	3,445,584		3,453,502		3,498,907		3,609,410		2,924,753		(7,918		)	(0.2)	520,831
Total consumer loan portfolio	10,999,357		11,398,769		11,221,123		11,229,066		6,767,644		(399,412		)	(3.5)	4,231,713
Total loans and leases	35,535,824		35,921,614		34,497,464		33,510,752		19,185,137		(385,790		)	(1.1)	16,350,687
PPP (Commercial and industrial)	1,819,469		—		—		—		—		$	1,819,469		N.M.	1,819,469
Loans and leases excluding PPP loans
Commercial and industrial	10,381,252		12,326,943		11,439,602		10,913,343		6,666,106		(1,945,691		)	(15.8)	3,715,146
Commercial real estate	9,628,344		9,486,904		9,136,870		8,773,970		3,168,774		141,440			1.5	6,459,570
Lease financing	2,707,402		2,708,998		2,699,869		2,594,373		2,582,613		(1,596		)	(0.1)	124,789
Total commercial loan and lease portfolio	22,716,998		24,522,845		23,276,341		22,281,686		12,417,493		(1,805,847		)	(7.4)	10,299,505
Residential mortgage	6,123,118		6,435,314		6,179,805		6,057,404		2,368,411		(312,196		)	(4.9)	3,754,707
Consumer installment	1,430,655		1,509,953		1,542,411		1,562,252		1,474,480		(79,298		)	(5.3)	(43,825		)
Home equity	3,445,584		3,453,502		3,498,907		3,609,410		2,924,753		(7,918		)	(0.2)	520,831
Total consumer loan portfolio	10,999,357		11,398,769		11,221,123		11,229,066		6,767,644		(399,412		)	(3.5)	4,231,713
Total loans and leases, excluding PPP loans	$33,716,355		$35,921,614		$34,497,464		$33,510,752		$19,185,137		$	(2,205,259	)	(6.1)%	$	14,531,218
Allowance for credit losses	$	503,902	$	428,571	$	116,580	$	124,679	$	148,439	$	75,331		17.6%	$	355,463
Allowance for credit losses as a % of total loans and leases	1.42%		1.19%		0.34%		0.37%		0.77%		23			bp	65
Allowance for credit losses as a % of loans and leases, excluding PPP loans	1.49		1.19		0.34		0.37		0.77		30				72

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TCF Financial Corporation Announces Management Changes	21-06-09	CI
TCF Financial Corporation(NasdaqGS:TCF) dropped from NASDAQ Composite Index	21-06-09	CI
TCF Financial Corporation(NasdaqGS:TCF) dropped from S&P 400	21-06-09	CI
TCF Financial Corporation(NasdaqGS:TCF) dropped from S&P Composite 1500	21-06-09	CI
TCF Financial Corporation(NasdaqGS:TCF) dropped from S&P 400 Financials	21-06-09	CI
TCF Financial Corporation(NasdaqGS:TCF) dropped from S&P 1000	21-06-09	CI
TCF Financial Corporation(NasdaqGS:TCF) dropped from S&P TMI Index	21-06-09	CI
TCF Financial Corporation(NasdaqGS:TCF) dropped from S&P Banks Select Industry Index	21-06-09	CI
TCF Financial Corporation(NasdaqGS:TCF) dropped from S&P Regional Banks Select Industry Index	21-06-09	CI
TCF Financial Corporation(NasdaqGS:TCF) dropped from S&P Global BMI Index	21-06-09	CI
TCF Financial Corporation's Equity Buyback announced on October 28, 2019, has expired.	21-06-08	CI
Huntington Bancshares Incorporated completed the acquisition of TCF Financial Corporation.	21-06-08	CI
Sector Update: Financial Stocks Receive Late Bounce, Ending Slightly Higher	21-06-04	MT
Sector Update: Financial Stocks Weakening This Afternoon	21-06-04	MT
Targa Resources : , Envestnet to Join S&P MidCap 400; Both Stocks Rally After Hours	21-06-03	MT
Huntington Bancshares Incorporated : Federal Reserve approves acquisition of TCF Financial by Huntington Bancshares	21-05-25	RE
Insider Trends: Insider Sale at TCF Financial Interrupting 90-Days of Buying	21-05-17	MT
Insider Trends: Insider Sale at TCF Financial Easing 90-Days of Buying	21-05-17	MT
Insider Trends: Insider at TCF Financial Sells Stock for Taxes Interrupting 90-Day Buy Trend	21-05-10	MT
Insider Trends: Insider at TCF Financial Makes Shares Sale for Tax Slowing 90-Day Buy Trend	21-05-10	MT
Tranche Update on TCF Financial Corporation's Equity Buyback Plan announced on October 28, 2019.	21-05-07	CI
TCF Financial Corp. Appoints Darrel German as Regional President of its Minnesota Region	21-04-26	CI
TCF FINANCIAL : Wedbush Adjusts TCF Financial's Price Target to $54 From $57, Keeps Outperform Rating	21-04-26	MT
TCF Financial : Posts Increase in Q1 Adjusted Profit, Revenue Declines	21-04-22	MT
TCF Financial : Earnings Flash (TCF) TCF FINANCIAL CORPORATION Reports Q1 Revenue $513.9M	21-04-22	MT

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TCF Financial : Reports Second Quarter 2020 Results

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