<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): January 20, 1998
--------------------------
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 January 20, 1998, TCF Financial Corporation (the "Company") authorized the
repurchase of up to five percent of the Company's outstanding shares through
open market or privately negotiated transactions. The repurchased shares
will become treasury shares. Attached hereto as Exhibit 99.1 and incorporated
herein by reference is the Company's press release dated January 20, 1998.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Press Release dated January 20, 1998.
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: January 23, 1998
TCF FINANCIAL CORPORATION
By /s/ RONALD J. PALMER
----------------------------------------
Ronald J. Palmer
Its Treasurer and Chief Financial Officer
<PAGE>
Cynthia W. Lee
(612) 475-7936
Ann Storberg
(612) 475-7940
FOR IMMEDIATE RELEASE
TCF REPORTS RECORD 1997 EARNINGS
AND ANNOUNCES STOCK REPURCHASE PROGRAM
<TABLE>
<CAPTION>
EARNINGS SUMMARY Three Months Year
($ in thousands, except per-share data) Ended Dec. 31, Ended Dec. 31,
------------------- ----------------------
1997 1996 1997 1996
-------- -------- ---------- ---------
<S> <C> <C> <C> <C>
Before FDIC special assessment, net of tax:
Income $39,889 $31,896 $145,061 $122,119
Basic earnings per common share .44 .39 1.72 1.49
Diluted earnings per common share .43 .38 1.69 1.46
Basic cash earnings per common share .47 .40 1.85 1.52
Net income 39,889 31,896 145,061 100,377
Basic earnings per common share .44 .39 1.72 1.23
Diluted earnings per common share .43 .38 1.69 1.20
Basic cash earnings per common share .47 .40 1.85 1.26
Dividends declared per common share .125 .09375 .46875 .359375
Net interest margin 4.93% 5.37% 5.20% 5.27%
Return on average assets 1.63 1.81 1.77 1.70(1)
Return on average realized common equity 17.28 20.81 19.57 20.40(1)
Return on average common equity 17.10 20.78 19.45 20.40(1)
(1) Before FDIC special assessment
</TABLE>
MINNEAPOLIS, Jan. 20, 1998 -- TCF Financial Corporation (TCF) (NYSE:TCB)
today reported record net income of $39.9 million for the 1997 fourth
quarter, up 25 percent from $31.9 million for the 1996 fourth quarter.
Earnings per common share were 44 cents for the 1997 fourth quarter, up 13
percent from 39 cents for the same period in 1996. Cash earnings per common
share, which exclude amortization of goodwill and deposit base intangibles,
were 47 cents for the 1997 fourth quarter, up 18 percent from 40 cents for
the same period in 1996. Return on average assets was 1.63 percent for the
1997 fourth quarter, compared with 1.81 percent for the 1996 fourth quarter.
Return on average realized common equity was 17.28
<PAGE>
percent for the 1997 fourth quarter, compared with 20.81 percent for the 1996
fourth quarter.
Earnings for 1997 totaled a record $145.1 million, up 19 percent from
$122.1 million for 1996 excluding a one-time special assessment from the
Federal Deposit Insurance Corporation to recapitalize the Savings Association
Insurance Fund. Earnings per common share were a record $1.72 for 1997,
compared with $1.49 for 1996 before the special assessment. Cash earnings
per common share were $1.85 for 1997, compared with $1.52 for 1996 before the
special assessment. Return on average assets was 1.77 percent and return on
average realized common equity was 19.57 percent for 1997, compared with 1.70
percent and 20.40 percent, respectively, for 1996 before the special
assessment. TCF's results have been restated to reflect the Nov. 28, 1997
two-for-one stock split, and the June 24, 1997 merger with Winthrop Resources
Corporation on a pooling-of-interests basis. In addition, TCF's 1997
performance includes the results of BOC Financial Corporation and Standard
Financial, Inc. (Standard), both located in Chicago, following their
acquisition by TCF on Jan. 16, 1997 and Sept. 4, 1997, respectively, in
purchase transactions.
TCF also announced today that its board of directors has authorized the
repurchase of up to 5 percent of TCF common stock, or approximately 4.6
million shares. The shares will be repurchased from time to time, depending
upon market conditions, through open market or privately negotiated
transactions. The repurchased shares will become treasury shares.
"We significantly expanded our operations in 1997 through acquisitions
and de novo growth," said TCF Chairman and Chief Executive Officer William A.
Cooper. Topping the list, according to Cooper, were the acquisition of
Winthrop Resources Corporation, a highly profitable business-equipment
leasing company; chartering a Colorado bank; building TCF National Bank
Illinois into the fourth-largest Chicago retail bank; and converting to
national bank charters. "Our continued expansion in 1998 presents key
challenges. We are opening 76 bank branches in Jewel-Osco stores in the
Chicago area this month, followed by an additional 11 branches later this
year. We anticipate that the cost of this expansion will be weighted more
heavily in the initial quarters." He added that TCF's core strategy will
remain focused on the growth of higher-yielding consumer and commercial loans
and leases, and lower interest-cost retail deposits.
Net interest income was a record $111 million for the 1997 fourth
quarter, up 26 percent from $88.2 million for the 1996 fourth quarter. TCF's
net interest margin was 4.93 percent for the 1997 fourth quarter, compared
with 5.37 percent for the 1996 fourth quarter. Net interest income and net
interest margin for 1997 were $393.6 million and 5.20 percent, respectively,
<PAGE>
compared with $354.6 million and 5.27 percent for 1996. The increases in net
interest income were primarily due to the acquisition of Standard, the growth
of higher-yielding consumer and commercial loans and leases, and lower
interest-cost retail deposits. TCF's 1997 net interest margin was negatively
impacted by Standard.
Non-interest income (excluding gains on sales of loans and branches)
totaled $58.7 million for the 1997 fourth quarter, up 27 percent from $46.3
million for the 1996 fourth quarter. On the same basis, non-interest income
totaled $212.3 million for 1997, up 22 percent from $173.4 million for 1996.
The improvement was largely due to increased deposit, ATM and leasing
revenues, and gains on sales of securities available for sale.
Non-interest expense (excluding the amortization of goodwill and deposit
base intangibles) totaled $95.1 million for the 1997 fourth quarter, up 18
percent from $80.6 million for the 1996 fourth quarter. Non-interest expense
(excluding the amortization of goodwill and deposit base intangibles, and the
1996 special assessment) totaled $345.8 million for 1997, up 10 percent from
$315.2 million for 1996. The increases from a year ago were primarily due to
the costs associated with expanded retail banking operations, including the
acquisition of Standard.
Non-performing assets (principally non-accrual loans and leases, and
real estate acquired through foreclosure) were $58.7 million at Dec. 31,
1997, compared with $46.3 million at Dec. 31, 1996. The over-30-day
delinquency rate on consumer loans was 1.91 percent at Dec. 31, 1997,
compared with 1.62 percent at Dec. 31, 1996.
TCF provided $5.9 million for credit losses in the 1997 fourth quarter,
compared with $4 million in the 1996 fourth quarter. Net loan and lease
charge-offs were $5.4 million, or 0.30 percent of average loans and leases
outstanding, in the 1997 fourth quarter, up from $5 million, or 0.38 percent
of average loans and leases, for the same 1996 period. At Dec. 31, 1997,
TCF's allowance for loan and lease losses totaled $82.6 million, up from
$71.9 million at year-end 1996, and was 224 percent of non-accrual loans and
leases.
Total loans and leases were $7.1 billion at Dec. 31, 1997, up $1.8
billion from year-end 1996 due principally to the acquisition of Standard.
Higher-yielding consumer and commercial loans and leases totaled $3.6
billion, up from $3.2 billion at year-end 1996. At Dec. 31, 1997, TCF's home
equity loan portfolio totaled $1.5 billion of loans outstanding, an increase
of $225.8 million from year-end 1996. TCF's consumer finance portfolio
totaled $521.5 million (principally home equity and auto loans) at Dec. 31,
1997, compared with $496.3 million at
<PAGE>
year-end 1996.
Deposits totaled $6.9 billion at Dec. 31, 1997, up $1.9 billion from
year-end 1996 due principally to the acquisition of Standard. Lower
interest-cost checking, savings, and money market deposits totaled $3.3
billion, up from $2.6 billion at year-end 1996. TCF had 772,000 checking
accounts at Dec. 31, 1997, up 15 percent from 669,000 at year-end 1996.
At Dec. 31, 1997, book value per common share was $10.27 based on
92,821,529 common shares outstanding. TCF's market capitalization (the
number of common shares outstanding multiplied by the stock price) totaled
$3.2 billion at Dec. 31, 1997.
On Nov. 10, 1997, TCF and American Stores Company, parent company of
Jewel-Osco, announced an agreement for TCF National Bank Illinois to acquire
and operate 76 branches and 178 ATMs in Jewel-Osco stores in the Chicago area
presently operated by Bank of America. TCF National Bank Illinois plans to
begin operation on Jan. 31. TCF National Bank Illinois has also agreed to
open 11 more branches in Jewel-Osco stores during 1998, and at least 25
additional facilities in subsequent years.
TCF is a $9.7 billion national bank holding company based in
Minneapolis. TCF's banks operate in Minnesota, Illinois, Wisconsin, and
Colorado as TCF National Bank, and in Michigan as Great Lakes National Bank.
Other TCF affiliates include business-equipment leasing, consumer finance,
mortgage banking, title insurance, annuity and mutual fund sales companies.
THERE ARE A NUMBER OF IMPORTANT FACTORS WHICH COULD CAUSE FUTURE RESULTS
TO DIFFER MATERIALLY FROM HISTORICAL PERFORMANCE. THESE INCLUDE BUT ARE NOT
LIMITED TO POSSIBLE LEGISLATIVE CHANGES; THE POSSIBILITY OF ADVERSE ECONOMIC
DEVELOPMENTS WHICH MAY INCREASE DEFAULT AND DELINQUENCY RISKS IN TCF'S LOAN
PORTFOLIOS; SHIFTS IN INTEREST RATES WHICH MAY RESULT IN SHRINKING INTEREST
MARGINS; DEPOSIT OUTFLOWS; INTEREST RATES ON COMPETING INVESTMENTS; DEMAND
FOR FINANCIAL SERVICES AND LOAN PRODUCTS; INCREASES GENERALLY IN COMPETITIVE
PRESSURE IN THE BANKING AND FINANCIAL SERVICES INDUSTRY; CHANGES IN
ACCOUNTING POLICIES OR GUIDELINES, OR MONETARY AND FISCAL POLICIES OF THE
FEDERAL GOVERNMENT; CHANGES IN THE QUALITY OR COMPOSITION OF TCF'S LOAN AND
INVESTMENT PORTFOLIOS; OR OTHER SIGNIFICANT UNCERTAINTIES. TCF'S RECENTLY
COMPLETED ACQUISITIONS OF WINTHROP RESOURCES CORPORATION AND STANDARD
FINANCIAL, INC., AND ITS PENDING ACQUISITION OF JEWEL-OSCO BRANCHES, ARE
SUBJECT TO ADDITIONAL UNCERTAINTIES, INCLUDING THE POSSIBLE FAILURE TO FULLY
REALIZE OR REALIZE WITHIN THE EXPECTED TIME FRAME EXPECTED COST SAVINGS OR
COST CONTROLS FROM THE TRANSACTIONS; LOWER THAN EXPECTED INCOME OR REVENUES
FOLLOWING THE TRANSACTIONS, OR HIGHER THAN EXPECTED OPERATING COSTS; BUSINESS
DISRUPTION RELATING TO THE TRANSACTIONS; GREATER THAN EXPECTED COSTS OR
DIFFICULTIES RELATED TO THE INTEGRATION OF EMPLOYEES OR MANAGEMENT OF THE
ACQUIRED BUSINESS OPERATIONS WITH THOSE OF TCF; LITIGATION COSTS AND DELAYS
CAUSED BY LITIGATION; AND OTHER UNANTICIPATED OCCURRENCES WHICH MAY INCREASE
THE COSTS RELATED TO THE TRANSACTIONS OR DECREASE THE EXPECTED FINANCIAL
BENEFITS OF THE TRANSACTIONS.
<PAGE>
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(DOLLARS IN THOUSANDS, EXCEPT PER-SHARE DATA)
(Unaudited)
<TABLE>
<CAPTION>
At December 31,
-----------------------------
1997 1996
-------------- -------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 297,010 $ 236,446
Interest-bearing deposits with banks 20,572 386,224
Federal funds sold - -
U.S. Government and other marketable securities
held to maturity (fair value of $4,061 and $3,910) 4,061 3,910
Federal Home Loan Bank stock, at cost 82,002 66,061
Federal Reserve Bank stock, at cost 22,977 -
Securities available for sale (amortized cost of
$1,411,979 and $995,384) 1,426,131 999,586
Loans held for sale 244,612 203,869
Loans and leases:
Residential real estate 3,619,527 2,261,237
Commercial real estate 862,164 861,056
Commercial business 239,728 156,712
Consumer 2,039,221 1,801,066
Lease financing 414,270 341,721
Unearned discounts and deferred fees (105,722) (128,872)
-------------- -------------
Total loans and leases 7,069,188 5,292,920
Allowance for loan and lease losses (82,583) (71,865)
-------------- -------------
Net loans and leases 6,986,605 5,221,055
Premises and equipment 165,790 129,785
Other real estate owned 18,353 15,771
Accrued interest receivable 54,336 42,173
Due from brokers 126,662 -
Goodwill 177,700 15,431
Deposit base intangibles 19,821 10,843
Mortgage servicing rights 19,512 17,360
Other assets 78,516 81,973
-------------- -------------
$9,744,660 $7,430,487
-------------- -------------
-------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Checking $1,468,657 $1,212,771
Passbook and statement 1,134,678 783,026
Money market 698,312 631,922
Certificates 3,605,663 2,349,911
-------------- -------------
Total deposits 6,907,310 4,977,630
-------------- -------------
Securities sold under repurchase agreements and
federal funds purchased 112,444 293,732
Federal Home Loan Bank advances 1,339,578 1,141,040
Discounted lease rentals 228,596 185,604
Subordinated debt 34,998 42,147
Collateralized obligations 2,539 40,505
Other borrowings 8,997 5,144
-------------- -------------
Total borrowings 1,727,152 1,708,172
Accrued interest payable 23,510 20,666
Accrued expenses and other liabilities 133,008 93,332
-------------- -------------
Total liabilities 8,790,980 6,799,800
-------------- -------------
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, 140,000,000
shares authorized; 92,821,529 and 85,242,232
shares issued 928 852
Additional paid-in capital 460,684 274,320
Unamortized deferred compensation (25,457) (7,693)
Retained earnings, subject to certain restrictions 508,969 402,109
Loan to Executive Deferred Compensation Plan - (68)
Unrealized gain on securities available for sale, net 8,556 2,376
Treasury stock, at cost, 2,370,036 shares in 1996 - (41,209)
-------------- -------------
Total stockholders' equity 953,680 630,687
-------------- -------------
$9,744,660 $7,430,487
-------------- -------------
-------------- -------------
</TABLE>
<PAGE>
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(DOLLARS IN THOUSANDS, EXCEPT PER-SHARE DATA)
(Unaudited)
<TABLE>
<CAPTION>
At December 31,
----------------------------
1997 1996
----------- --------------
<S> <C> <C>
OTHER FINANCIAL CONDITION DATA:
Tangible net worth $756,159 $604,413
Stockholders' equity to total assets 9.79% 8.49%
Book value per common share $ 10.27 $ 7.61
Tangible book value per common share 8.15 7.29
Non-performing assets:
Non-accrual loans and leases $ 36,793 $ 26,397
Real estate and other assets 21,953 19,937
----------- --------------
Total non-performing assets $ 58,746 $ 46,334
----------- --------------
----------- --------------
Troubled debt restructured loans $ 1,335 $ 3,028
Accruing loans and leases 90 days or more past due - -
Allowance for loan and lease losses as a
percentage of gross loans and leases 1.15% 1.33%
</TABLE>
<PAGE>
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)
<TABLE>
<CAPTION>
Three Months Ended December 31,
-----------------------------------------------------------------
1997 1996
-------------------------------- ------------------------------
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 $ 137,752 $ 3,057 8.88% $ 70,326 $ 1,148 6.53%
Securities available for
sale 1,578,769 28,139 7.13 982,953 17,553 7.14
Loans held for sale 235,789 4,417 7.49 197,914 3,619 7.31
Loans and leases 7,049,384 163,126 9.26 5,310,152 128,132 9.65
Total interest- ---------- ------- ---------- --------
earning assets 9,001,694 198,739 8.83 6,561,345 150,452 9.17
------- ------ -------- -------
Other assets 790,296 473,184
---------- ----------
Total assets $9,791,990 $7,034,529
---------- ----------
---------- ----------
Liabilities and
Stockholders' Equity:
Non-interest bearing
deposits $ 830,050 $ 657,056
---------- ----------
Interest-bearing
deposits 6,051,311 59,633 3.94 4,270,044 41,615 3.90
Borrowings 1,751,949 28,092 6.41 1,328,824 20,673 6.22
---------- ------ ---------- --------
Total interest-
bearing liabilities 7,803,260 87,725 4.50 5,598,868 62,288 4.45
------ ----- -------- -------
Other liabilities 225,467 164,488
---------- ----------
Total liabilities 8,858,777 6,420,412
---------- ----------
Stockholders' equity:
Preferred equity - -
Common equity 933,213 614,117
---------- ----------
933,213 614,117
---------- ----------
Total liabilities
and stockholders'
equity $9,791,990 $7,034,529
---------- ----------
---------- ----------
Net interest income $111,014 $ 88,164
-------- --------
-------- --------
Net interest rate spread 4.33% 4.72%
----- -------
----- -------
Net interest margin 4.93% 5.37%
----- -------
----- -------
(1) Annualized.
</TABLE>
<PAGE>
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)
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------
1997 1996
-------------------------------- ------------------------------
Interest Interest
Average Yields and Average Yields and
Balance Interest Rates Balance Interest Rates
---------- -------- ---------- ----------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments $ 96,146 $ 7,192 7.48% $ 65,853 $ 4,447 6.75%
Securities available for
sale 1,338,295 95,701 7.15 1,054,434 75,303 7.14
Loans held for sale 211,192 15,755 7.46 227,226 17,080 7.52
Loans and leases 5,928,054 563,966 9.51 5,386,261 516,054 9.58
Total interest- ---------- -------- --------- -------
earning assets 7,573,687 682,614 9.01 6,733,774 612,884 9.10
-------- ----- ------- ----
Other assets 600,083 467,328
---------- ----------
Total assets $8,173,770 $7,201,102
---------- ----------
---------- ----------
Liabilities and
Stockholders' Equity:
Non-interest bearing
deposits $ 782,836 $ 608,213
---------- ----------
Interest-bearing
deposits 4,980,804 195,182 3.92 4,393,627 171,375 3.90
Borrowings 1,483,908 93,836 6.32 1,447,158 86,941 6.01
---------- ------- ---------- -------
Total interest-
bearing liabilities 6,464,712 289,018 4.47 5,840,785 258,316 4.42
------- ----- ------- ----
Other liabilities 180,585 153,373
---------- ----------
Total liabilities 7,428,133 6,602,371
---------- ----------
Stockholders' equity:
Preferred equity - -
Common equity 745,637 598,731
---------- ----------
745,637 598,731
---------- ----------
Total liabilities
and stockholders' $8,173,770 $7,201,102
equity ---------- ----------
---------- ----------
Net interest income $393,596 $354,568
-------- --------
-------- --------
Net interest rate spread 4.54% 4.68%
----- -----
----- -----
Net interest margin 5.20% 5.27%
----- -----
----- -----
</TABLE>
