<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 14, 1996
----------------
TCF Financial Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation)
0-16431 41-1591444
- ------------------------ ---------------------------------
Commission File Number (IRS Employer Identification No.)
801 Marquette Avenue, Suite 302, Minneapolis, Minnesota 55402
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(612) 661-6500
- -------------------------------------
Registrant's Telephone Number
<PAGE>
Item 5. OTHER EVENTS
On October 14, 1996, TCF Financial Corporation (the "Company") announced its
results for the third quarter of 1996. In its announcement, the Company
reported on the impact of a one-time special assessment from the Federal Deposit
Insurance Corporation ("FDIC") to recapitalize the Savings Association Insurance
Fund ("SAIF"). In the third quarter, the Company recognized a $34.8 million
pretax charge resulting from the special assessment. Under federal legislation
relating to the special assessment enacted September 30, the Company also
expects a reduction in deposit insurance premiums in future periods. Attached
hereto as Exhibit 99.1 and incorporated herein by reference is the Company's
press release dated October 14, 1996.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Press Release dated October 14, 1996
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: October 14, 1996
TCF FINANCIAL CORPORATION
By /s/Lynn A. Nagorske
----------------------------------------
Lynn A. Nagorske
Its President and Chief Operating Officer
<PAGE>
NEWS RELEASE CONTACT: Cynthia W. Lee (Investors)
(612) 661-8859
Elizabeth Anders (Media)
(612) 661-8853
TCF-Registration Mark- FOR IMMEDIATE RELEASE
TCF FINANCIAL CORPORATION 801 Marquette Avenue, Minneapolis, Minnesota
55402-3475
TCF REPORTS THIRD-QUARTER EARNINGS
QUARTERLY HIGHLIGHTS
- -- Record net interest margin
- -- Income before special assessment rose 11 percent
- -- Earnings per common share before special assessment rose 13 percent
- -- Return on average assets increased to 1.58 percent before special assessment
- -- Non-performing assets 0.72 percent of total assets
<TABLE>
<CAPTION>
EARNINGS SUMMARY Three Months Nine Months
($ in thousands, except Ended Sept. 30, Ended Sept. 30,
per-share data) --------------------- --------------------
1996 1995 1996 1995
-------- ---------- -------- ---------
<S> <C> <C> <C> <C>
Before FDIC special assessment and
merger-related charges, net of tax:
Income $27,038 $24,413 $79,976 $68,047
Earnings per common share .77 .68 2.25 1.89
Net income 5,296 24,413 58,234 35,205
Earnings per common share .15 .68 1.64 .97
Dividends declared per common share .1875 .15625 .53125 .4375
Net interest margin 5.36% 4.71% 5.23% 4.53%
Return on average assets 1.58(1) 1.32 1.53(1) 1.22(2)
Return on average realized common equity 20.29(1) 20.38 20.14(1) 19.46(2)
Return on average common equity 20.56(1) 20.44 20.17(1) 19.52(2)
</TABLE>
(1) Before FDIC special assessment
(2) Before merger-related charges
MINNEAPOLIS, Oct. 14, 1996 -- TCF Financial Corporation (TCF) (NYSE:TCB)
today reported record income of $27 million for the 1996 third quarter,
excluding a one-time special assessment from the Federal Deposit Insurance
Corporation (FDIC) to recapitalize the Savings Association Insurance Fund
(SAIF), up 11 percent from $24.4 million for the 1995 third quarter. On a per-
common-share basis before the special assessment, TCF
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<PAGE>
2
earned 77 cents for the 1996 third quarter, up 13 percent from 68 cents for the
same period in 1995. Before the special assessment, return on average assets
was a record 1.58 percent and return on average realized common equity was 20.29
percent for the 1996 third quarter, compared with 1.32 percent and 20.38
percent, respectively, for the 1995 third quarter.
In the 1996 third quarter, TCF recognized a $34.8 million pretax charge
resulting from a one-time special assessment by the FDIC to recapitalize the
SAIF under federal legislation enacted Sept. 30. The legislation also provides
for a reduction in deposit insurance premiums in subsequent periods. On an
after-tax basis, the charge was $21.7 million, or 62 cents per common share,
bringing TCF's net income for the 1996 third quarter to $5.3 million, or 15
cents per common share.
"Our third-quarter results were highlighted by a record net interest margin
of 5.36 percent and an 11 percent increase in fee income over last year," said
TCF Chairman and Chief Executive Officer William A. Cooper. "We're also
encouraged by the legislation to recapitalize the deposit insurance fund, which
for TCF is expected to result in an $8.2 million annual savings in deposit
insurance premiums."
Before the special assessment and merger-related charges, earnings for the
first nine months of 1996 totaled $80 million, up 18 percent from $68 million
for the 1995 first nine months. On the same basis, year-to-date 1996 earnings
per common share totaled $2.25, up 19 percent from $1.89 for year-to-date 1995.
Return on average assets was 1.53 percent and return on average realized common
equity was 20.14 percent for the first nine months before the special
assessment, compared with 1.22 percent and 19.46 percent, respectively, before
merger-related charges for the prior-year period. During the 1995 first
quarter, TCF acquired Great Lakes Bancorp, Ann Arbor, Mich., and recorded $32.8
million in after-tax merger-related charges. Net income for the 1996 first nine
months totaled $58.2 million, or $1.64 per common share, compared with $35.2
million, or 97 cents per common share, for the 1995 first nine months.
Net interest income was $85.8 million for the 1996 third quarter, up 5
percent from $81.5 million for the 1995 third quarter. TCF's net interest
margin was a record 5.36 percent for the 1996 third quarter, up from 4.71
percent for the 1995 third quarter and 5.27 percent
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<PAGE>
3
for the 1996 second quarter. For the first nine months of 1996, net interest
income and net interest margin were $256.1 million and 5.23 percent,
respectively, compared with $236.4 million and 4.53 percent for the same 1995
period. The increases were primarily due to increased yields and growth of
consumer loans, the favorable impact of the 1995 merger-related restructuring
activities, the 1995 redemption of $34.5 million of 10 percent subordinated
capital notes, and increased capital.
Non-interest income (excluding a $4.6 million gain on the sale of $37.8
million of credit card receivables) totaled $38.1 million for the 1996 third
quarter, up 11 percent from $34.2 million for the 1995 third quarter. Year-to-
date non-interest income for 1996 (excluding gain on sale of credit card
receivables, branch-sale gains and 1995 merger-related asset-sale losses)
totaled $109.8 million, up 13 percent from $97.4 million for the same 1995
period. The improvement was largely due to increased deposit, title insurance,
annuity and mutual fund revenues.
Operating expenses (non-interest expense excluding the special assessment,
provision for real estate losses and 1995 merger-related charges) totaled $78.8
million for the 1996 third quarter, up 9 percent from $72.3 million for the 1995
third quarter, and included $2.4 million for the relocation and consolidation of
holding company and bank back-office operations. Operating expenses were $227.6
million for the first nine months of 1996, up 6 percent from $214.4 million for
the same 1995 period. The increases from a year ago were primarily due to costs
associated with expanded consumer lending and consumer finance operations, back-
office relocation and consolidation, and other retail banking activities.
Non-performing assets (principally real estate acquired through foreclosure
and non-accrual loans) were $50.9 million at Sept. 30, down from $55.9 million
at June 30 and $70.7 million at the end of 1995. The over-30-day delinquency
rate on consumer loans was 1.63 percent at Sept. 30, compared with 1.64 percent
at June 30 and 1.72 percent at year-end 1995.
TCF provided $6.7 million for credit and real estate losses in the 1996
third quarter, compared with $3.1 million for the 1995 third quarter. Net loan
charge-offs were $4.2
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<PAGE>
4
million, or 0.33 percent of average loans outstanding, in the 1996 third
quarter, compared with $2 million, or 0.15 percent of average loans outstanding,
in the prior-year period. At Sept. 30, TCF's allowance for loan losses totaled
$71.6 million, up from $69.2 million at June 30 and $65.7 million at year-end
1995, and was 218 percent of non-accrual loans.
Total loans were $5 billion at Sept. 30, down $227.6 million from year-end
1995. Declines of $305.7 million in residential real estate loans and $82.4
million in commercial loans were partially offset by an increase of $174.8
million in consumer loans. At Sept. 30, TCF's home equity loan portfolio
totaled $1.3 billion of loans outstanding, an increase of $138.9 million from
year-end 1995. TCF's consumer finance operation grew to $486.3 million in loans
outstanding (principally auto and home equity loans) and 74 offices at Sept. 30,
compared with $374.4 million and 70 offices at year-end 1995.
Deposits totaled $5 billion at September 30, down $172.9 million from year-
end 1995. Lower interest-cost checking, savings, and money market deposits
totaled $2.6 billion and comprised 52 percent of total deposits. TCF had
666,000 checking accounts at September 30, up from 641,000 at June 30 and
622,000 at year-end 1995. The weighted average rate on total deposits at Sept.
30 was 3.33 percent, down from 3.60 percent at year-end 1995.
At Sept. 30, book value per common share was $14.98 based on 34,870,195
common shares outstanding. TCF's market capitalization (the number of common
shares outstanding multiplied by the stock price) totaled $1.3 billion at Sept.
30. TCF purchased 108,700 shares of its common stock during the third quarter
and 1.1 million shares year-to-date under a stock repurchase program.
TCF is a $7.1 billion stock savings bank holding company based in
Minneapolis. Its bank subsidiaries operate in Minnesota, Illinois, and
Wisconsin as TCF Bank, and in Michigan and Ohio as Great Lakes Bancorp. Other
TCF affiliates include consumer finance, mortgage banking, title insurance,
annuity and mutual fund sales companies.
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<PAGE>
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER-SHARE DATA)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- -----------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest income:
Interest on loans $121,760 $125,066 $366,245 $362,324
Interest on loans held for sale 4,351 5,252 13,461 13,825
Interest on securities available for sale 18,228 595 57,750 3,497
Interest on investments 1,041 1,334 3,211 4,606
Interest on mortgage-backed securities held to maturity - 21,789 - 70,216
--------- -------- --------- ---------
Total interest income 145,380 154,036 440,667 454,468
--------- -------- --------- ---------
Interest expense:
Interest on deposits 42,090 48,060 129,760 145,446
Interest on borrowings 17,496 24,489 54,783 72,595
--------- -------- --------- ---------
Total interest expense 59,586 72,549 184,543 218,041
--------- -------- --------- ---------
Net interest income 85,794 81,487 256,124 236,427
Provision for credit losses 6,564 2,951 16,189 12,563(1)
--------- -------- --------- ---------
Net interest income after provision for credit losses 79,230 78,536 239,935 223,864
--------- -------- --------- ---------
Non-interest income:
Fee and service charge revenues 26,130 22,680 73,741 65,975
ATM network revenues 2,799 2,875 7,945 7,939
Title insurance revenues 3,294 3,417 10,485 8,557
Commissions on sales of annuities 2,454 1,846 6,989 6,774
Gain on sale of loans held for sale 1,345 1,646 3,422 2,018
Gain (loss) on sale of securities available for sale - - 85 (190)
Gain on sale of loans 4,633 - 4,633 -
Loss on sale of mortgage-backed securities - - - (21,037)
Gain on sale of loan servicing - 3 - 1,532
Gain on sale of branches - - 1,725 1,103
Other 2,028 1,700 7,119 4,482
--------- -------- --------- ---------
Total non-interest income 42,683 34,167 116,144 77,153
--------- -------- --------- ---------
Non-interest expense:
Compensation and employee benefits 38,893 34,662 111,319 104,548
Occupancy and equipment 12,589 12,544 37,902 37,556
Advertising and promotions 3,976 3,916 13,329 12,643
Federal deposit insurance premiums and assessments 3,172 3,449 9,535 10,372
Amortization of goodwill and other intangibles 795 791 2,384 2,372
Provision for real estate losses 121 195 418 736
FDIC special assessment 34,803 - 34,803 -
Merger-related expenses - - - 21,733
Cancellation cost on early termination of interest-rate
exchange contracts - - - 4,423
Other 19,390 16,983 53,168 46,951
--------- -------- --------- ---------
Total non-interest expense 113,739 72,540 262,858 241,334
--------- -------- --------- ---------
Income before income tax expense and
extraordinary item 8,174 40,163 93,221 59,683
Income tax expense 2,878 15,750 34,987 23,515
--------- -------- --------- ---------
Income before extraordinary item 5,296 24,413 58,234 36,168
Extraordinary item:
Penalties on early repayment of FHLB advances, net
of tax benefit of $578 - - - (963)
--------- -------- --------- ---------
Net income 5,296 24,413 58,234 35,205
Dividends on preferred stock - - - 678
--------- -------- --------- ---------
Net income available to common shareholders $ 5,296 $ 24,413 $ 58,234 $ 34,527
--------- -------- --------- ---------
--------- -------- --------- ---------
Per common share:
Income before extraordinary item $ .15 $ .68 $ 1.64 $ 1.00
Extraordinary item - - - (.03)
--------- -------- --------- ---------
Net income $ .15 $ .68 $ 1.64 $ .97
--------- -------- --------- ---------
--------- -------- --------- ---------
Dividends declared $ .1875 $ .15625 $ .53125 $ .4375
--------- -------- --------- ---------
--------- -------- --------- ---------
- --------------------------------------
(1) Includes $5,000 in merger-related provisions.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(DOLLARS IN THOUSANDS, EXCEPT PER-SHARE DATA)
(Unaudited)
At At
September 30, December 31,
1996 1995
------------ -----------
<S> <C> <C>
ASSETS
Cash and due from banks $ 205,741 $ 233,619
Interest-bearing deposits with banks 333,132 533
Federal funds sold 5,000 -
U.S. Government and other marketable securities
held to maturity (fair value of $3,856 and $3,716) 3,856 3,716
Federal Home Loan Bank stock, at cost 58,811 60,096
Securities available for sale (amortized cost of
$1,005,515 and $1,182,240) 997,964 1,201,490
Loans held for sale 223,327 242,413
Loans:
Residential real estate 2,312,977 2,618,725
Commercial real estate 901,838 970,763
Commercial business 154,195 167,663
Consumer 1,768,275 1,593,439
Unearned discounts and deferred fees (87,777) (73,489)
------------ -----------
Total loans 5,049,508 5,277,101
Allowance for loan losses (71,581) (65,695)
------------ -----------
Net loans 4,977,927 5,211,406
Premises and equipment 126,424 120,763
Real estate:
Total real estate 15,985 24,466
Allowance for real estate losses (1,157) (1,526)
------------ -----------
Net real estate 14,828 22,940
Accrued interest receivable 42,931 49,120
Goodwill 10,675 11,503
Deposit base intangibles 11,362 12,918
Mortgage servicing rights 17,239 16,286
Other assets 85,249 53,108
------------ -----------
$7,114,466 $7,239,911
------------ -----------
------------ -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Checking $1,184,047 $1,103,272
Passbook and statement 806,209 841,115
Money market 628,932 616,667
Certificates 2,399,484 2,630,498
------------ -----------
Total deposits 5,018,672 5,191,552
------------ -----------
Securities sold under repurchase agreements 481,533 438,426
Federal Home Loan Bank advances 919,542 893,587
Subordinated debt 13,397 13,520
Collateralized obligations 40,727 41,391
Other borrowings 13,515 54,520
------------ -----------
Total borrowings 1,468,714 1,441,444
Accrued interest payable 18,446 14,905
Accrued expenses and other liabilities 86,119 64,335
------------ -----------
Total liabilities 6,591,951 6,712,236
------------ -----------
Stockholders' equity:
Preferred stock, par value $.01 per share, 30,000,000
shares authorized; none issued and outstanding - -
Common stock, par value $.01 per share, 70,000,000
shares authorized; 35,939,713 and 35,604,531
shares issued 359 356
Additional paid-in capital 249,349 243,122
Unamortized deferred compensation (8,642) (11,195)
Retained earnings, subject to certain restrictions 323,293 283,821
Loan to Executive Deferred Compensation Plan (85) (131)
Unrealized gain (loss) on securities available for
sale, net (4,993) 11,702
Treasury stock, at cost, 1,069,518 shares in 1996 (36,766) -
------------ -----------
Total stockholders' equity 522,515 527,675
------------ -----------
$7,114,466 $7,239,911
------------ -----------
------------ -----------
</TABLE>
<PAGE>
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(DOLLARS IN THOUSANDS, EXCEPT PER-SHARE DATA)
(Unaudited)
<TABLE>
<CAPTION>
At At
September 30, December 31,
1996 1995
---------------- ---------------
<S> <C> <C>
OTHER FINANCIAL CONDITION DATA:
Tangible net worth $ 511,840 $ 516,172
Stockholders' equity to total assets 7.34% 7.29%
Book value per common share $ 14.98 $ 14.82
Tangible book value per common share 14.68 14.50
Non-performing assets:
Non-accrual loans $ 32,830 $ 44,328
Real estate and other assets 18,074 26,402
---------- ----------
Total non-performing assets $ 50,904 $ 70,730
---------- ----------
---------- ----------
Troubled debt restructured loans $ 3,042 $ 1,612
Accruing loans 90 days or more past due 90 761
Allowance for loan losses as a percentage
of gross loans 1.39% 1.23%
Residential mortgage servicing portfolio:
Loans and mortgage-backed securities serviced
for TCF Financial Corporation and Subsidiaries $2,508,991 $2,838,686
Loans serviced for third-parties 4,505,901 4,476,214
---------- ----------
Total residential mortgage servicing portfolio $7,014,892 $7,314,900
---------- ----------
---------- ----------
TCF Bank Minnesota fsb regulatory capital ratios:
Tangible capital 6.64% 7.03%
Core capital 6.66 7.06
Risk-based capital 11.89 12.78
Great Lakes Bancorp regulatory capital ratios:
Tangible capital 7.60 6.81
Core capital 8.01 7.23
Risk-based capital 15.24 13.63
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, INTEREST AND DIVIDENDS
EARNED OR PAID, AND RELATED INTEREST YIELDS AND RATES
(DOLLARS IN THOUSANDS)
(UNAUDITED)
Three Months Ended September 30,
-------------------------------------------------------------------------------------
1996 1995
-------------------------------------------- ---------------------------------------
Interest Interest
Average Yields and Average Yields and
Balance Interest Rates (1) Balance Interest Rates (1)
------- -------- ---------- ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments $ 57,811 $ 1,041 7.20% $ 74,643 $ 1,334 7.15%
Securities available
for sale 1,020,196 18,228 7.15 36,693 595 6.49
Loans held for sale 225,550 4,351 7.72 262,617 5,252 8.00
Mortgage-backed
securities
held to maturity - - - 1,214,772 21,789 7.17
Loans 5,101,738 121,760 9.55 5,330,230 125,066 9.39
--------- ------- ---- ---------- --------
Total interest-
earning assets 6,405,295 145,380 9.08 6,918,955 154,036 8.91
-------- ----- -------- -----
Other assets 426,866 462,370
---------- ----------
Total assets $6,832,161 $7,381,325
---------- ----------
---------- ----------
Liabilities and
Stockholders' Equity:
Non-interest bearing
deposits $ 615,556 $ 533,443
---------- ----------
Interest-bearing
deposits 4,346,137 42,090 3.87 4,610,848 48,060 4.17
Borrowings 1,232,161 17,496 5.68 1,620,615 24,489 6.04
---------- -------- ---------- -------
Total interest-
bearing liabilities 5,578,298 59,586 4.27 6,231,463 72,549 4.66
-------- ----- -------- -----
Other liabilities 112,345 132,487
---------- ----------
Total liabilities 6,306,199 6,897,393
Stockholders' equity:
Preferred equity - 6,255
Common equity 525,962 477,677
---------- ----------
525,962 483,932
---------- ----------
Total liabilities
and stockholders'
equity $6,832,161 $7,381,325
---------- ----------
---------- ----------
Net interest income $ 85,794 $ 81,487
-------- --------
-------- --------
Net interest rate spread 4.81% 4.25%
----- -----
----- -----
Net interest margin 5.36% 4.71%
----- -----
----- -----
(1) Annualized.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, INTEREST AND DIVIDENDS
EARNED OR PAID, AND RELATED INTEREST YIELDS AND RATES
(DOLLARS IN THOUSANDS)
(UNAUDITED)
Nine Months Ended September 30,
----------------------------------------------------------------------------
1996 1995
--------------------------------------- ------------------------------------
Interest Interest
Average Yields and Average Yields and
Balance Interest Rates (1) Balance Interest Rates (1)
------- -------- ---------- ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments $ 61,004 $ 3,211 7.02% $ 88,122 $ 4,606 6.97%
Securities available
for sale 1,078,355 57,750 7.14 64,746 3,497 7.20
Loans held for sale 237,068 13,461 7.57 226,657 13,825 8.13
Mortgage-backed
securities
held to maturity - - - 1,312,909 70,216 7.13
Loans 5,155,855 366,245 9.47 5,261,102 362,324 9.18
---------- -------- ---------- --------
Total interest-
earning assets 6,532,282 440,667 8.99 6,953,536 454,468 8.71
-------- ----- -------- -----
Other assets 431,635 453,721
---------- ----------
Total assets $6,963,917 $7,407,257
---------- ----------
---------- ----------
Liabilities and
Stockholders' Equity:
Non-interest bearing
deposits $ 591,813 $ 494,681
---------- ----------
Interest-bearing
deposits 4,435,122 129,760 3.90 4,736,406 145,446 4.09
Borrowings 1,294,307 54,783 5.64 1,568,617 72,595 6.17
---------- -------- ---------- --------
Total interest-
bearing liabilities 5,729,429 184,543 4.29 6,305,023 218,041 4.61
-------- ----- -------- -----
Other liabilities 113,985 128,753
---------- ----------
Total liabilities 6,435,227 6,928,457
Stockholders' equity:
Preferred equity - 17,514
Common equity 528,690 461,286
---------- ----------
528,690 478,800
---------- ----------
Total liabilities
and stockholders'
equity $6,963,917 $7,407,257
---------- ----------
---------- ----------
Net interest income $256,124 $236,427
-------- --------
-------- --------
Net interest rate spread 4.70% 4.10%
----- -----
----- -----
Net interest margin 5.23% 4.53%
----- -----
----- -----
(1) Annualized.
</TABLE>
