TCF Financial Corporation (TCF) Misses Q3 EPS by 1c

TCF Financial Corporation (NASDAQ: TCF) reported Q3 EPS of $0.63, $0.01 worse than the analyst estimate of $0.64.

Third Quarter 2020 Highlights

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

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

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

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

For earnings history and earnings-related data on TCF Financial Corporation (TCF) click here.

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