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Tcf Financial Corporation has a market cap of $1.85 billion; its shares were traded at around $11.33 with and P/S ratio of 1.3. The dividend yield of Tcf Financial Corporation stocks is 1.8%.
Highlight of Business Operations:Gains on securities available for sale of $90.2 million were recognized during the first nine months of 2012, resulting from sales of mortgage-backed securities. Impairment charges of $269 thousand and $480 thousand were recognized on other securities during the third quarter and first nine months of 2011, respectively. Impairment charges of $206 thousand were recognized during both the third quarter and first nine months of 2012.
From time to time, TCF sells minimum lease payments to third-party financial institutions at fixed rates. For those transactions which achieve sale treatment, the related lease cash flow stream is not recognized on TCF’s Consolidated Statements of Financial Condition. During the three months ended September 30, 2012 and 2011, TCF sold $16.8 million and $36.3 million, respectively, of minimum lease payment receivables, received cash of $18.4 million and $36.4 million, respectively, and recognized a net gain of $1.6 million and $159 thousand, respectively. During the nine months ended September 30, 2012 and 2011, TCF sold $73.5 million and $81.1 million, respectively, of minimum lease payment receivables, received cash of $75.6 million and $87.4 million, respectively, and recognized a net gain of $2.1 million and $6.3 million, respectively. At September 30, 2012 and December 31, 2011, TCF’s lease residuals reported within the table above include $12.8 million and $9.1 million, respectively, related to all historical sales of minimum lease payment receivables.
During the three months ended September 30, 2012, TCF sold $161.1 million of consumer auto loans with servicing retained and received cash of $157.6 million, resulting in gains of $7.5 million. Related to these sales, TCF retained an interest-only strip of $12.6 million. During the nine months ended September 30, 2012, TCF sold $377.1 million of consumer auto loans with servicing retained and received cash of $368.9 million, resulting in gains of $15.2 million. Related to these sales, TCF retained an interest-only strip of $27.3 million. At September 30, 2012, interest-only strips and contractual recourse liabilities totaled $39.3 million and $4.1 million, respectively. At December 31, 2011, interest-only strips and contractual recourse liabilities totaled $22.4 million and $6 million, respectively. No servicing assets or liabilities related to consumer auto loans were recorded within TCF’s Consolidated Statements of Financial Condition, as the contractual servicing fees are adequate to compensate TCF for its servicing responsibilities. Gateway’s managed portfolio, which includes portfolio loans, loans held for sale, and loans sold and services for others, totaled $1 billion and $399.7 million at September 30, 2012 and December 31, 2011, respectively. Excluding loans in bankruptcy and loans in
Cash Flow Hedges Foreign exchange contracts, which include forward contracts, were used to manage the foreign exchange risk associated with certain minimum lease payment streams. At September 30, 2012 and December 31, 2011 TCF had $4 thousand and less than $1 thousand, respectively, of unrealized gains on derivatives classified as cash flow hedges recorded in other comprehensive income (loss). The estimated amount to be reclassified from other comprehensive income (loss) into earnings during the next 12 months is a loss of $4 thousand.
Net interest income, the difference between interest income earned on loans and leases, securities available for sale, investments and other interest-earning assets and interest paid on deposits and borrowings, represented 66.8% of TCF’s total revenue, excluding gains on securities, for the nine months ended September 30, 2012. Net interest income can change significantly from period to period based on general levels of interest rates, customer prepayment patterns, the mix of interest-earning assets and the mix of interest-bearing and non-interest bearing deposits and borrowings. TCF manages the risk of changes in interest rates on its net interest income through an Asset/Liability Management Committee and through related interest-rate risk monitoring and management policies. See Part I, Item 3.
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