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Press Release

TCF Reports Quarterly Net Income of $25.5 Million, or 16 Cents Per Share

Company Release - 4/19/2013 8:00 AM ET

WAYZATA, Minn.--(BUSINESS WIRE)-- TCF Financial Corporation (NYSE: TCB):

FIRST QUARTER HIGHLIGHTS

- Net interest margin of 4.72 percent, up 58 basis points from the first quarter of 2012

- Pre-tax pre-provision profit of $87.7 million, up 24.3 percent from the first quarter of 2012

- Provision for credit losses of $38.4 million, down 20.9 percent from the first quarter of 2012

- Average deposits increased $1.8 billion, or 14.4 percent, from the first quarter of 2012

- Non-accrual loans and leases and other real estate owned decreased $61.3 million, or 12.9 percent, from the fourth quarter of 2012

- Over 60-day accruing delinquent loans decreased by $15.5 million, or 16.3 percent, from the fourth quarter of 2012

- Announced common and preferred stock dividend payments payable May 31, 2013 and June 3, 2013, respectively

                                   
Summary of Financial Results                               Table 1
($ in thousands, except per-share data)         Percent Change
1Q 4Q 1Q

 

1Q13 vs

  1Q13 vs
2013     2012    

2012 (3)

    4Q12     1Q12  
Net income (loss) $ 25,450 $ 23,551 $ (282,894 ) 8.1 % N.M. %
Net interest income 199,091 201,063 180,173 (1.0 ) 10.5
Pre-tax pre-provision profit(1) 87,742 87,151 70,578 .7 24.3
Diluted earnings (loss) per common share .16 .15 (1.78 ) 6.7 N.M.
 

Financial Ratios(2)

Return on average assets .70 % .63 % (5.96 ) %
Return on average common equity 6.36 5.93 (63.38 )
Net interest margin 4.72 4.79 4.14

Net charge-offs as a percentage of average loans and leases

1.06 1.18 1.06
 
(1) Pre-tax pre-provision profit (''PTPP'') is calculated as total revenues less non-interest expense. First quarter 2012 PTPP excludes the non-recurring net loss of $473.8 million related to the balance sheet repositioning completed in the first quarter of 2012.
(2) Annualized.
(3) Includes a net, after-tax charge of $295.8 million, or $1.87 per share, related to the balance sheet repositioning.
N.M. Not meaningful.
 

TCF Financial Corporation (“TCF”) (NYSE: TCB) today reported net income for the first quarter of 2013 of $25.5 million, compared with a net loss of $282.9 million for the first quarter of 2012 (inclusive of a net after-tax charge of $295.8 million, or $1.87 per common share, related to a balance sheet repositioning involving certain investments and borrowings in that period) and net income of $23.6 million for the fourth quarter of 2012. Diluted earnings per common share was 16 cents for the first quarter of 2013, compared with a loss per common share of $1.78 for the first quarter of 2012 (earnings per common share of 8 cents before the balance sheet repositioning charge) and diluted earnings per common share of 15 cents for the fourth quarter of 2012.

Chairman’s Statement
“TCF’s first quarter results were highlighted by strong credit quality improvements as well as additional core revenue generation,” said William A. Cooper, Chairman and Chief Executive Officer. “Our encouraging credit trends, which began in late 2012 and have continued into 2013, include decreases in non-accrual loans and leases, other real estate owned and net charge-offs. Revenue increased during the quarter due to the impact of continued core auto loan sales and expanded core consumer real estate loan sales.

“TCF’s focus throughout 2013 is to generate results based on the momentum created through our building and investing strategies in 2012. We executed on this initiative in the first quarter as net interest margin remained strong and loan and lease balances continued to grow. I am encouraged by our progress so far and am confident that we are in position to drive results moving forward.”

Revenue  
                                             
Total Revenue                                   Table 2
          Percent Change    
1Q 4Q 1Q 1Q13 vs   1Q13 vs
($ in thousands)     2013       2012       2012     4Q12     1Q12  
Net interest income $ 199,091     $ 201,063       $ 180,173 (1.0 ) % 10.5 %
Fees and other revenue:
Fees and service charges 39,323 44,262 41,856 (11.2 ) (6.1 )
Card revenue 12,417 12,974 13,207 (4.3 ) (6.0 )
ATM revenue   5,505       5,584         6,199 (1.4 ) (11.2 )
Total banking fees 57,245 62,820 61,262 (8.9 ) (6.6 )
Leasing and equipment finance 16,460 26,149 22,867 (37.1 ) (28.0 )
Gains on sales of consumer real estate loans 8,126 854 - N.M. N.M.
Gains on sales of auto loans 7,146 6,869 2,250 4.0 N.M.
Other   3,726       3,973         2,355 (6.2 ) 58.2
Total fees and other revenue   92,703       100,665         88,734 (7.9 ) 4.5
Subtotal 291,794 301,728 268,907 (3.3 ) 8.5
(Losses) gains on securities, net   -       (528 )       76,611 (100.0 ) (100.0 )
Total revenue $ 291,794     $ 301,200       $ 345,518 (3.1 ) (15.5 )
 
Net interest margin (1) 4.72 % 4.79 % 4.14 %

Fees and other revenue as a % of total revenue

31.77 33.42 25.68
 
N.M. = Not meaningful.
(1) Annualized.                                        
 

Net Interest Income

  • Net interest income for the first quarter of 2013 increased $18.9 million, or 10.5 percent, compared with the first quarter of 2012, and decreased slightly from the fourth quarter of 2012. The increase from the first quarter of 2012 was primarily due to the balance sheet repositioning completed in that quarter, which resulted in a $28.6 million reduction to the cost of borrowings, partially offset by a $14.3 million reduction of interest income on lower levels of mortgage-backed securities for the first quarter of 2013, as well as higher average loan balances primarily from the inventory finance and auto finance portfolios. These increases were partially offset by reduced interest income due to lower average balances of consumer real estate loans as a result of loan sales in the third and fourth quarters of 2012 and first quarter of 2013, as well as lower yields as new originations in our lending businesses continued to be impacted by the low interest rate environment.
  • Net interest margin in the first quarter of 2013 was 4.72 percent, compared with 4.14 percent in the first quarter of 2012 and 4.79 percent in the fourth quarter of 2012. The increase from the first quarter of 2012 was primarily due to a lower average cost of borrowings as a result of the balance sheet repositioning. The decrease from the fourth quarter of 2012 was primarily due to lower yields in the commercial portfolio and the Company’s increased liquidity position driven by the increased loan sale activity late in the quarter.

Non-interest Income

  • Fees and service charges in the first quarter of 2013 were $39.3 million, down $2.5 million, or 6.1 percent, from the first quarter of 2012 and down $4.9 million, or 11.2 percent, from the fourth quarter of 2012. The decrease from the first quarter of 2012 was due to the elimination of the monthly maintenance fee on deposit products through the reintroduction of free checking. The decrease from the fourth quarter of 2012 was primarily due to lower transaction activity and higher average balances per customer during the first quarter of 2013, partially offset by growth in the account base for the third consecutive quarter driven by the reintroduction of free checking.
  • Leasing and equipment finance revenue was $16.5 million during first quarter of 2013, down $6.4 million, or 28 percent, from the first quarter of 2012 and down $9.7 million, or 37.1 percent, from the fourth quarter of 2012. The decreases were primarily due to lower operating lease and sales-type lease revenue growth in the leasing and equipment finance portfolio as a result of customer driven events.
  • In the first quarter of 2013 and the fourth quarter of 2012, respectively, TCF sold $279.2 million and $25.7 million of consumer real estate loans, recognizing gains in the same respective periods.
  • TCF sold $179.8 million, $72 million and $159.6 million of auto loans during the first quarters of 2013 and 2012, and the fourth quarter of 2012, respectively, resulting in gains in the same respective periods.
Loans and Leases          
                                   
Period-End and Average Loans and Leases                   Table 3
  Percent Change
($ in thousands) 1Q 4Q 1Q 1Q13 vs 1Q13 vs
2013   2012   2012   4Q12     1Q12  
Period-End:
Consumer real estate $ 6,418,666 $ 6,674,501 $ 6,815,909 (3.8 ) % (5.8 ) %
Commercial 3,334,716 3,405,235 3,467,089 (2.1 ) (3.8 )
Leasing and equipment finance 3,185,234 3,198,017 3,118,755 (.4 ) 2.1
Inventory finance 1,931,363 1,567,214 1,637,958 23.2 17.9
Auto finance 719,666 552,833 139,047 30.2 N.M.
Other   23,701     27,924     29,178 (15.1 ) (18.8 )
Total $ 15,613,346   $ 15,425,724   $ 15,207,936 1.2 2.7
 
Average:
Consumer real estate $ 6,556,426 $ 6,663,660 $ 6,845,063 (1.6 ) (4.2 )
Commercial 3,345,780 3,452,768 3,457,720 (3.1 ) (3.2 )
Leasing and equipment finance 3,199,499 3,184,540 3,128,329 .5 2.3
Inventory finance 1,686,364 1,570,829 1,145,183 7.4 47.3
Auto finance 670,096 504,565 85,562 32.8 N.M.
Other   13,641     14,704     17,582 (7.2 ) (22.4 )
Total $ 15,471,806   $ 15,391,066   $ 14,679,439 .5 5.4
 
N.M. = Not meaningful.                                
 
  • Loans and leases were $15.6 billion at March 31, 2013, an increase of $405.4 million, or 2.7 percent, compared with March 31, 2012 and an increase of $187.6 million, or 1.2 percent, compared with December 31, 2012. Quarterly average loans and leases were $15.5 billion for the first quarter of 2013, an increase of $792.4 million, or 5.4 percent, compared with the first quarter of 2012 and an increase of $80.7 million, or .5 percent, compared with the fourth quarter of 2012. The increases in period-end and average loans and leases from both periods were primarily due to growth in inventory finance as a result of the Bombardier Recreational Products, Inc. (“BRP”) program, as well as the continued growth of auto finance, as we continue to expand the business. These increases were partially offset by decreases in consumer real estate loans driven by sales in the third and fourth quarters of 2012 and the first quarter of 2013, as well as decreases in commercial loans due to payoffs in the low rate environment exceeding new originations.

Credit Quality

(Table 4 - Credit Trends: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50612238&lang=en)

  • Over 60-day delinquencies improved for the fifth consecutive quarter. The over 60-day delinquency rate excluding acquired portfolios and non-accrual loans and leases at March 31, 2013 was .53 percent, down from .64 percent at December 31, 2012 and .77 percent at March 31, 2012. The decreases from both periods were primarily a result of reduced delinquencies in the consumer real estate portfolio.
  • Net charge-offs decreased $4.5 million from the fourth quarter of 2012, primarily due to improved credit quality in the consumer real estate portfolio.
  • Non-accrual loans and leases were $343.4 million at March 31, 2013, a decrease of $36.1 million, or 9.5 percent, from December 31, 2012 and an increase of $34.4 million, or 11.1 percent, from March 31, 2012. The decrease from December 31, 2012 was primarily due to improved credit quality in the commercial and consumer real estate portfolios resulting in fewer loans entering non-accrual status. The increase from March 31, 2012 was primarily due to the implementation of clarifying bankruptcy-related regulatory guidance in the third quarter of 2012. At March 31, 2013, $122.1 million of non-accrual assets were associated with the clarifying bankruptcy-related guidance of which 84 percent were less than 60 days past due.
  • Other real estate owned was $71.8 million at March 31, 2013, a decrease of $25.2 million from December 31, 2012, and a decrease of $55.5 million from March 31, 2012. The decrease in both periods was primarily due to a portfolio sale of 184 consumer properties during the first quarter of 2013, as well as a decrease in the number of consumer real estate loans transferred from non-accrual status.
  • Provision for credit losses was $38.4 million, a decrease of $10.1 million from the fourth quarter of 2012 and a decrease of $10.2 million from the first quarter of 2012. The decrease from the fourth quarter of 2012 was primarily due to decreased charge-offs in the consumer real estate portfolio and lower reserve balances on the leasing and equipment finance portfolio as a result of reduced loss experience. The decrease in provision from the first quarter of 2012 was primarily due to a reduction in the reserve rate for the commercial, leasing and equipment finance and inventory finance portfolios as a result of improved credit quality.
Deposits          
                               
Average Deposits                         Table 5
Percent Change
($ in thousands) 1Q 4Q 1Q 1Q13 vs 1Q13 vs
2013   2012   2012   4Q12   1Q12
 
Checking $ 4,784,945 $ 4,627,627 $ 4,565,065 3.4 % 4.8 %
Savings 6,114,219 6,103,302 5,905,118 .2 3.5
Money market   815,374       819,596       662,493   (.5 ) 23.1
Subtotal 11,714,538 11,550,525 11,132,676 1.4 5.2
Certificates   2,323,267       2,206,173       1,135,673   5.3 104.6
Total average deposits $ 14,037,805     $ 13,756,698     $ 12,268,349   2.0 14.4
 
Average interest rate on deposits (1) .28 % .32 % .30 %
 
(1) Annualized.                              
 
  • Total average deposits for the first quarter of 2013 increased $1.8 billion, or 14.4 percent, from the first quarter of 2012, primarily due to special programs for certificates of deposits, the assumption of $778 million of deposits from Prudential Bank & Trust, FSB in June 2012 and the reintroduction of free checking. The average interest rate on deposits in the first quarter of 2013 was .28 percent, down four basis points from the fourth quarter of 2012 and down two basis points from the first quarter of 2012.
Non-interest Expense          
                                   
Non-interest Expense                             Table 6
  Percent Change
($ in thousands) 1Q 4Q 1Q 1Q13 vs 1Q13 vs
  2013     2012     2012   4Q12   1Q12

Compensation and employee benefits

$ 104,229 $ 101,678 $ 95,967 2.5 % 8.6 %
Occupancy and equipment 32,875 32,809 32,246 .2 2.0
FDIC insurance 7,710 8,671 6,386 (11.1 ) 20.7
Advertising and marketing 5,732 4,303 2,617 33.2 119.0
Operating lease depreciation 5,635 5,905 6,731 (4.6 ) (16.3 )
Deposit account premiums 602 523 5,971 15.1 (89.9 )
Other   37,939       53,472       37,296   (29.0 ) 1.7
Core operating expenses 194,722 207,361 187,214 (6.1 ) 4.0
Loss on termination of debt - - 550,735 N.M. (100.0 )

Foreclosed real estate and repossessed assets, net

10,167 7,582 11,047 34.1 (8.0 )
Other credit costs, net   (837 )     (894 )     (288 ) 6.4 (190.6 )
Total non-interest expense $ 204,052     $ 214,049     $ 748,708   (4.7 ) (72.7 )
 
N.M. = Not meaningful.                                
 
  • Compensation and employee benefits expense for the first quarter of 2013 increased $8.3 million, or 8.6 percent, from the first quarter of 2012. The increase was primarily due to increased staff levels to support the growth of auto finance and to support the assets of the BRP program in inventory finance.
  • The combined expense associated with advertising, marketing and deposit account premiums decreased $2.3 million from the first quarter of 2012. The decrease from the first quarter of 2012 is attributable to TCF’s change in strategy for acquiring high quality accounts through the reintroduction of free checking, versus the utilization of high dollar deposit account premiums.
  • The increase in foreclosed real estate and repossessed assets expense from the fourth quarter of 2012 is driven by the acceleration of expenses related to a portfolio sale of consumer properties during the first quarter of 2013.
Capital        
                             
Capital Information                         Table 7  
At period end
($ in thousands, except per-share data) 1Q 4Q
2013 2012
Total equity $ 1,900,159 $ 1,876,643
Book value per common share $ 9.86 $ 9.79
Tangible realized common equity to tangible assets (1) 7.55 % 7.52 %
 
Risk-based capital (2)
Tier 1 $ 1,666,630 11.14 % $ 1,633,336 11.09 %
Total 2,019,082 13.49 2,007,835 13.63
 
Tier 1 leverage capital $ 1,666,630 9.23 % $ 1,633,336 9.21 %
 
Tier 1 common capital (3) $ 1,382,457 9.24 % $ 1,356,826 9.21 %
 
(1) Excludes the impact of goodwill, other intangibles and accumulated other comprehensive income (loss) (see “Reconciliation of GAAP to Non-GAAP Financial Measures” table).
(2) The Company's capital ratios continue to be in excess of "well-capitalized" regulatory benchmarks.
(3) Excludes the effect of preferred shares, qualifying trust preferred securities and qualifying non-controlling interest in subsidiaries (see “Reconciliation of GAAP to Non-GAAP Financial Measures” table).
 
 
  • On April 17, 2013, the Board of Directors of TCF declared a regular quarterly cash dividend of 5 cents per common share payable on May 31, 2013, to stockholders of record at the close of business on May 15, 2013. TCF also declared a dividend on the 7.50% Series A and 6.45% Series B Non-Cumulative Perpetual Preferred Stock, both payable on June 3, 2013, to stockholders of record at the close of business on May 15, 2013.

Webcast Information
A live webcast of TCF’s conference call to discuss the first quarter earnings will be hosted at TCF’s website, http://ir.tcfbank.com, on April 19, 2013 at 8:00 a.m. CT. A slide presentation for the call will be available on the website prior to the call. Additionally, the webcast will be available for replay at TCF’s website after the conference call. The website also includes free access to company news releases, TCF’s annual report, investor presentations and SEC filings.

 

TCF is a Wayzata, Minnesota-based national bank holding company with $18.5 billion in total assets at March 31, 2013. TCF has nearly 430 branches in Minnesota, Illinois, Michigan, Colorado, Wisconsin, Indiana, Arizona and South Dakota, providing retail and commercial banking services. TCF, through its subsidiaries, also conducts commercial leasing and equipment finance business in all 50 states, commercial inventory finance business in the U.S. and Canada, and indirect auto finance business in over 40 states. For more information about TCF, please visit http://ir.tcfbank.com.

 

Cautionary Statements for Purposes of the Safe Harbor Provisions of the Securities Litigation Reform Act

Any statements contained in this earnings release regarding the outlook for the Company’s businesses and their respective markets, such as projections of future performance, guidance, statements of the Company’s plans and objectives, forecasts of market trends and other matters, are forward-looking statements based on the Company’s assumptions and beliefs. Such statements may be identified by such words or phrases as “will likely result,” “are expected to,” “will continue,” “outlook,” “will benefit,” “is anticipated,” “estimate,” “project,” “management believes” or similar expressions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those discussed in such statements and no assurance can be given that the results in any forward-looking statement will be achieved. For these statements, TCF claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Any forward-looking statement speaks only as of the date on which it is made, and we disclaim any obligation to subsequently revise any forward-looking statement to reflect events or circumstances after such date or to reflect the occurrence of anticipated or unanticipated events.

Certain factors could cause the Company’s future results to differ materially from those expressed or implied in any forward-looking statements contained in this earnings release. These factors include the factors discussed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 under the heading “Risk Factors,” the factors discussed below and any other cautionary statements, written or oral, which may be made or referred to in connection with any such forward-looking statements. Since it is not possible to foresee all such factors, these factors should not be considered as complete or exhaustive.

Adverse Economic or Business Conditions; Competitive Conditions; Credit and Other Risks. Deterioration in general economic and banking industry conditions, including defaults, anticipated defaults or rating agency downgrades of sovereign debt (including debt of the U.S.), or continued high rates of or increases in unemployment in TCF’s primary banking markets; adverse economic, business and competitive developments such as shrinking interest margins, reduced demand for financial services and loan and lease products, deposit outflows, deposit account attrition or an inability to increase the number of deposit accounts; customers completing financial transactions without using a bank; adverse changes in credit quality and other risks posed by TCF’s loan, lease, investment and securities available for sale portfolios, including declines in commercial or residential real estate values or changes in the allowance for loan and lease losses dictated by new market conditions or regulatory requirements; interest rate risks resulting from fluctuations in prevailing interest rates or other factors that result in a mismatch between yields earned on TCF’s interest-earning assets and the rates paid on its deposits and borrowings; foreign currency exchange risks; counterparty risk, including the risk of defaults by our counterparties or diminished availability of counterparties who satisfy our credit quality requirements; decreases in demand for the types of equipment that TCF leases or finances; the effect of any negative publicity.

Legislative and Regulatory Requirements. New consumer protection and supervisory requirements and regulations, including those resulting from action by the Consumer Financial Protection Bureau and changes in the scope of Federal preemption of state laws that could be applied to national banks; the imposition of requirements with an adverse impact relating to TCF’s lending, loan collection and other business activities as a result of the Dodd-Frank Act, or other legislative or regulatory developments such as mortgage foreclosure moratorium laws or imposition of underwriting or other limitations that impact the ability to use certain variable-rate products; impact of legislative, regulatory or other changes affecting customer account charges and fee income; changes to bankruptcy laws which would result in the loss of all or part of TCF’s security interest due to collateral value declines; deficiencies in TCF’s compliance under the Bank Secrecy Act in past or future periods, which may result in regulatory enforcement action including monetary penalties; increased health care costs resulting from Federal health care reform legislation; adverse regulatory examinations and resulting enforcement actions or other adverse consequences such as increased capital requirements or higher deposit insurance assessments; heightened regulatory practices, requirements or expectations, including, but not limited to, requirements related to the Bank Secrecy Act and anti-money laundering compliance activity.

Earnings/Capital Risks and Constraints, Liquidity Risks. Limitations on TCF’s ability to pay dividends or to increase dividends because of financial performance deterioration, regulatory restrictions or limitations; increased deposit insurance premiums, special assessments or other costs related to adverse conditions in the banking industry, the economic impact on banks of the Dodd-Frank Act and other regulatory reform legislation; the impact of financial regulatory reform, including additional capital, leverage, liquidity and risk management requirements or changes in the composition of qualifying regulatory capital (including those resulting from U.S. implementation of Basel III requirements); adverse changes in securities markets directly or indirectly affecting TCF’s ability to sell assets or to fund its operations; diminished unsecured borrowing capacity resulting from TCF credit rating downgrades and unfavorable conditions in the credit markets that restrict or limit various funding sources; costs associated with new regulatory requirements or interpretive guidance relating to liquidity; uncertainties relating to customer opt-in preferences with respect to overdraft fees on point of sale and ATM transactions or the success of TCF’s reintroduction of free checking, which may have an adverse impact on TCF’s fee revenue; uncertainties relating to future retail deposit account changes, including limitations on TCF’s ability to predict customer behavior and the impact on TCF’s fee revenues.

Supermarket Branching Risk; Growth Risks. Adverse developments affecting TCF’s supermarket banking relationships or any of the supermarket chains in which TCF maintains supermarket branches, including SUPERVALU’s sale of several of its supermarket chains, including Jewel-Osco®, in which TCF has 156 branches; slower than anticipated growth in existing or acquired businesses; inability to successfully execute on TCF’s growth strategy through acquisitions or cross-selling opportunities; failure to expand or diversify TCF’s balance sheet through programs or new opportunities; failure to successfully attract and retain new customers, including the failure to attract and retain manufacturers and dealers to expand the inventory finance business; risks related to new product additions and addition of distribution channels (or entry into new markets) for existing products.

Technological and Operational Matters. Technological or operational difficulties, loss or theft of information, cyber-attacks and other security breaches, counterparty failures and the possibility that deposit account losses (fraudulent checks, etc.) may increase; failure to keep pace with technological change.

Litigation Risks. Results of litigation, including class action litigation concerning TCF’s lending or deposit activities including account servicing processes or fees or charges, or employment practices, and possible increases in indemnification obligations for certain litigation against Visa U.S.A. and potential reductions in card revenues resulting from such litigation or other litigation against Visa.

Accounting, Audit, Tax and Insurance Matters. Changes in accounting standards or interpretations of existing standards; federal or state monetary, fiscal or tax policies, including adoption of state legislation that would increase state taxes; ineffective internal controls; adverse state or Federal tax assessments or findings in tax audits; lack of or inadequate insurance coverage for claims against TCF; potential for claims and legal action related to TCF’s fiduciary responsibilities.

 
TCF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per-share data)
(Unaudited)
             
Three Months Ended March 31, Change
2013 2012 $ %
Interest income:
Loans and leases $ 204,905 $ 205,984 $ (1,079 ) (.5 ) %
Securities available for sale 4,795 19,112 (14,317 ) (74.9 )
Investments and other 5,850   2,433   3,417   140.4
Total interest income 215,550   227,529   (11,979 ) (5.3 )
Interest expense:
Deposits 9,681 9,061 620 6.8
Borrowings 6,778   38,295   (31,517 ) (82.3 )
Total interest expense 16,459   47,356   (30,897 ) (65.2 )
Net interest income 199,091 180,173 18,918 10.5
Provision for credit losses 38,383   48,542   (10,159 ) (20.9 )

Net interest income after provision for credit losses

160,708   131,631   29,077   22.1
Non-interest income:
Fees and service charges 39,323 41,856 (2,533 ) (6.1 )
Card revenue 12,417 13,207 (790 ) (6.0 )
ATM revenue 5,505   6,199   (694 ) (11.2 )
Subtotal 57,245 61,262 (4,017 ) (6.6 )
Leasing and equipment finance 16,460 22,867 (6,407 ) (28.0 )
Gain on sale of consumer real estate loans 8,126 - 8,126 N.M.
Gain on sales of auto loans 7,146 2,250 4,896 N.M.
Other 3,726   2,355   1,371   58.2
Fees and other revenue 92,703 88,734 3,969 4.5
Gains on securities, net -   76,611   (76,611 ) (100.0 )
Total non-interest income 92,703   165,345   (72,642 ) (43.9 )
Non-interest expense:
Compensation and employee benefits 104,229 95,967 8,262 8.6
Occupancy and equipment 32,875 32,246 629 2.0
FDIC insurance 7,710 6,386 1,324 20.7
Advertising and marketing 5,732 2,617 3,115 119.0
Operating lease depreciation 5,635 6,731 (1,096 ) (16.3 )
Deposit account premiums 602 5,971 (5,369 ) (89.9 )
Other 37,939</