TCF Reports Fourth Quarter 2020 Results
TCF Financial Corporation (NASDAQ: TCF) reported fourth quarter 2020 net income of $91.4 million, equating to $0.58 per diluted share, a 63.9% increase from Q3 2020. Adjusted diluted earnings per share rose 19.0% to $0.75. Loan and lease balances grew 1.2% (excluding PPP loans). Key metrics show net charge-offs at $11.6 million, down 83% from Q3, while the efficiency ratio improved to 74.53%. The company announced a merger with Huntington Bancshares, expected to close in Q2 2021.
- 63.9% increase in net income from Q3 2020
- Adjusted diluted earnings per share up 19.0% to $0.75
- Loan and lease balances, excluding PPP loans, grew 1.2%
- Net charge-offs decreased 83% from the previous quarter
- Efficiency ratio improved to 74.53%
- Nonaccrual loans and leases rose by 79.8% from September 30, 2020
- Net interest income declined 6.7% from Q4 2019
- Return on average assets (ROAA) decreased compared to Q4 2019
Insights
Analyzing...
TCF Financial Corporation (NASDAQ: TCF):
Fourth Quarter 2020 Highlights
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Quarterly net income of
$91.4 million , or$0.58 per diluted share, up63.9% from the third quarter of 2020 -
Adjusted diluted earnings per common share of
$0.75 (1), up19.0% from the third quarter of 2020. Adjusted diluted earnings per common share excludes$24.7 million , or$0.17 per share, after-tax impact of merger-related expenses and notable items -
Loan and lease balances grew
0.4% from September 30, 2020. Loan and lease balances, excluding PPP loans, grew1.2% from September 30, 2020 -
Net charge-offs of
$11.6 million , or0.14% of average loans and leases (annualized) -
Provision for credit losses of
$11.8 million , down83.0% from the third quarter of 2020 -
Allowance for credit losses, which includes the reserve for unfunded lending commitments, of
1.59% of total loans and leases, compared to1.60% at September 30, 2020 -
Nonaccrual loans and leases of
$677.3 million , up$300.6 million , or79.8% , from September 30, 2020 -
Efficiency ratio of
74.53% , improved 76 basis points from the third quarter of 2020. Adjusted efficiency ratio of64.80% (1), up 363 basis points from the third quarter of 2020 -
Common equity Tier 1 capital ratio of
11.45% , compared to11.45% at September 30, 2020 - On December 13, 2020, announced merger with Huntington Bancshares Incorporated ("Huntington"), which is expected to close in the second quarter of 2021
Merger-related Expenses and Notable items in the Fourth Quarter of 2020 and Third Quarter of 2020(1)
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Pre-tax merger-related expenses of
$31.5 million ,$24.4 million net of tax, or$0.17 per diluted common share for the fourth quarter of 2020, compared to pre-tax merger-related expenses of$54.0 million ,$42.8 million net of tax, or$0.28 per diluted common share for the third quarter of 2020 -
Pre-tax expenses of
$357 thousand ,$276 thousand net of tax, related to notable items for the fourth quarter of 2020, compared to pre-tax expenses of$154 thousand ,$122 thousand net of tax, related to notable items for the third 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. |
Summary of Financial Results |
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At or For the Quarter Ended |
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Change From |
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Dec. 31, |
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Sep. 30, |
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Jun. 30, |
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Mar. 31, |
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Dec. 31, |
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Sep. 30, |
Dec. 31, |
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(Dollars in thousands, except per share data) |
2020 |
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2020 |
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2020 |
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2020 |
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2019 |
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2020 |
2019 |
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Financial Results |
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Net income attributable to TCF |
$ |
91,358 |
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$ |
55,738 |
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$ |
23,764 |
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$ |
51,899 |
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$ |
112,399 |
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63.9 |
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% |
(18.7) |
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% |
Net interest income |
381,394 |
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377,167 |
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378,359 |
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401,481 |
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408,753 |
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1.1 |
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(6.7) |
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Basic earnings per common share |
$ |
0.58 |
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$ |
0.35 |
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$ |
0.14 |
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$ |
0.33 |
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$ |
0.72 |
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65.7 |
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(19.4) |
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Diluted earnings per common share |
0.58 |
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0.35 |
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0.14 |
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0.32 |
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0.72 |
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65.7 |
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(19.4) |
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Return on average assets ("ROAA")(1) |
0.78 |
% |
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0.46 |
% |
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0.21 |
% |
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0.46 |
% |
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0.99 |
% |
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32 |
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bps |
(21) |
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bps |
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ROACE(1) |
6.44 |
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3.87 |
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1.56 |
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3.64 |
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8.00 |
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257 |
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(156) |
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ROATCE (non-GAAP)(1)(2) |
9.18 |
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5.71 |
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2.57 |
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5.42 |
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11.35 |
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347 |
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(217) |
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Net interest margin |
3.53 |
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3.31 |
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3.33 |
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3.73 |
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3.86 |
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22 |
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(33) |
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Net interest margin (FTE)(1)(2) |
3.55 |
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3.34 |
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3.35 |
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3.76 |
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3.89 |
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21 |
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(34) |
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Net charge-offs as a percentage of average loans and leases(1) |
0.14 |
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0.28 |
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0.04 |
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0.06 |
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0.07 |
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(14) |
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7 |
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Nonperforming assets as a percentage of total loans and leases and other real estate owned(3) |
2.06 |
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1.20 |
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0.94 |
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0.80 |
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0.59 |
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86 |
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147 |
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Efficiency ratio |
74.53 |
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75.29 |
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78.26 |
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69.57 |
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73.49 |
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(76) |
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104 |
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Adjusted Financial Results (non-GAAP) |
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FAQWhat were TCF Financial's earnings for Q4 2020?
TCF Financial reported earnings of $91.4 million for Q4 2020, or $0.58 per diluted share.
How did TCF Financial perform compared to Q3 2020?
Net income increased by 63.9% from Q3 2020, with adjusted diluted earnings per share up 19.0%.
What is TCF Financial's net charge-off amount for Q4 2020?
TCF Financial reported net charge-offs of $11.6 million, representing 0.14% of average loans.
What is the expected timeline for TCF Financial's merger with Huntington Bancshares?
The merger with Huntington Bancshares is expected to close in the second quarter of 2021.
How did TCF Financial's efficiency ratio change in Q4 2020?
The efficiency ratio improved to 74.53% from 75.29% in Q3 2020.
TCF Financial Corp
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