tcfbankbh-3

TCF Financial’s 1st Quarter Results Top Wall Street Analyst Expectations

tcfbankbh-3

TCF Financial, which is poised to become Huntington Bank when merger proceedings are complete later this year, has released 1st quarter 2021 results this morning and they have beaten Wall Street expectations from analysts for both earnings per share and revenues at the bank.

TCF’s 1st quarter non-GAAP earnings per share of $0.84 beat the street by $0.12 per share, while GAAP EPS of $0.79 beat the street by $0.08. Meanwhile, the bank’s first quarter revenues of $513.89-million, down by some 4.6-percent year-over-year, beat analysts predictions by $7.42-million.

TCF Financial today reports net income of $123.3 million, or diluted earnings per common share of $0.79, for the first quarter of 2021, compared with $91.4 million, or diluted earnings per common share of $0.58, for the fourth quarter of 2020. Adjusted net income was $130.1 million, or $0.84 per diluted common share for the first quarter of 2021, compared with $116.1 million, or $0.75 per diluted common share, for the fourth quarter of 2020.

David T. Provost, Chief Executive Officer, says, “Our first quarter performance was highlighted by strong balance sheet growth as our teams remained focused on taking care of our customers, while we also continued preparing for the closing of our merger with Huntington.” Provost adds, “We were pleased by the overwhelming shareholder approval of the pending merger with Huntington. With the transaction on track to close later in the second quarter of 2021, we look forward to delivering enhanced shareholder value through our greater Midwest market share, increased scale, broader product set, and enhanced technology capabilities and investments.”

ADVERTISEMENT
Your content continues below

Thomas C. Shafer, Vice Chairman and Chief Executive Officer of TCF National Bank, says, “We continued to execute on our business strategy during the quarter as we generated strong loan and lease growth driven by our commercial portfolios,” while adding, “This growth included the acquisition of an equipment finance company in January, further bolstering our team of talented and experienced professionals, which we believe will continue to provide incremental growth opportunities going forward. In addition, we saw strong deposit growth driven by noninterest-bearing deposit inflows during the quarter, which helped to further reduce our overall cost of deposits. As we continue to operate our business and serve our customers today, we will be well positioned to transition our business into Huntington when the merger closes.”

Net interest income at TCF was $381.8 million for the first quarter of 2021, an increase of $0.4 million, or 0.1%, from the fourth quarter of 2020. Purchase accounting accretion and amortization related to the TCF/Chemical merger included in net interest income was $15.0 million for the first quarter of 2021, compared to $23.0 million for the fourth quarter of 2020. At March 31, 2021, the remaining fair value discount from purchase accounting on acquired loans totaled $91.1 million. Additionally, net interest income recorded for the first quarter of 2021 included $17.8 million of interest and fee income from PPP less funding costs, compared to $19.1 million for the fourth quarter of 2020. Adjusted net interest income (FTE), excluding purchase accounting accretion and amortization and the impact from PPP loans, a non-GAAP financial measure, was $351.8 million for the first quarter of 2021, compared to $342.5 million for the fourth quarter of 2020

First Quarter 2021 Highlights

  • Quarterly net income of $123.3 million, or $0.79 per diluted share, up 35.0-percent from the fourth quarter of 2020
  • Adjusted diluted earnings per common share of $0.84, up 12.0-percent from the fourth quarter of 2020. Adjusted diluted earnings per common share excludes $6.7 million, or $0.04 per share, after-tax impact of merger-related expenses and notable items
  • Loan and lease balances grew $1.8 billion, or 5.1-percent, from December 31, 2020. Loan and lease balances, excluding PPP loans, grew $1.4 billion, or 4.4-percent, from December 31, 2020
  • Deposit balances grew $930 million, or 2.4-percent, from December 31, 2020
  • Provision for credit losses of $20.6 million, up 73.9-percent from the fourth quarter of 2020, primarily reflects loan and lease growth
  • Allowance for credit losses, which includes the reserve for unfunded lending commitments, of 1.45-percent of total loans and leases, compared to 1.59-percent at December 31, 2020
  • Nonaccrual loans and leases of $677.9 million, relatively stable compared to December 31, 2020
  • Net charge-offs of $43.3 million, or 0.49-percent of average loans and leases (annualized)
  • Efficiency ratio of 67.85-percent, improved 668 basis points from the fourth quarter of 2020. Adjusted efficiency ratio of 62.69-percent, improved 211 basis points from the fourth quarter of 2020
  • Common equity Tier 1 capital ratio of 11.06-percent, compared to 11.45-percent at December 31, 2020
  • On January 29, 2021, TCF acquired BB&T Commercial Equipment Capital, Corp., which included a portfolio of $1.0 billion of equipment finance loans and leases
  • On March 25, 2021, TCF shareholders approved the announced merger with Huntington Bancshares Incorporated, which is expected to close in the second quarter of 2021, subject to regulatory approval.