TCF Financial Corporation
TCF Financial Corporation was a bank holding company headquartered in Detroit, Michigan, that operated through its subsidiary TCF National Bank to provide consumer banking, commercial banking, trust and wealth management, and specialty leasing and lending services primarily in the Midwestern United States.[1][2] Originating from the Twin City Building and Loan Association founded in Minneapolis, Minnesota, in 1923, the institution evolved into a federal savings bank and expanded aggressively through acquisitions in states including Illinois, Wisconsin, and Michigan during the 1990s.[3][4] The company restructured via a merger of equals with Chemical Financial Corporation in 2019, relocating its headquarters to Detroit and enhancing its deposit market share, before announcing an all-stock merger with Huntington Bancshares Incorporated in December 2020 valued at approximately $22 billion.[1][5] The transaction, completed on June 9, 2021, integrated TCF's branches, ATMs, and operations into Huntington Bank, creating a top-10 U.S. regional bank with combined assets exceeding $168 billion, while requiring divestiture of 13 Michigan branches to address antitrust concerns.[6][7] TCF's growth model emphasized in-store banking branches, achieving over $1 billion in supermarket deposits by 2000 and ranking as one of the largest operators in that format.[8]
Overview
Founding and Headquarters
TCF Financial Corporation traces its origins to the Twin City Building and Loan Association, established on April 2, 1923, in downtown Minneapolis, Minnesota, by a life insurance executive seeking to provide home financing amid limited banking options.[8] The institution initially operated as a mutual savings and loan focused on residential mortgages for the Twin Cities area.[3] In 1936, following the passage of federal legislation enabling charters for such entities, it converted to a federal savings and loan and adopted the name Twin City Federal Savings and Loan Association, expanding its deposit-taking capabilities under federal oversight.[4] This restructuring allowed for broader operations while maintaining a conservative lending approach rooted in local real estate.[3] The modern TCF Financial Corporation, as a bank holding company, was headquartered in Wayzata, Minnesota, a suburb of Minneapolis, where it centralized executive functions and strategic decision-making for its regional banking network.[9] This location facilitated proximity to its core Minnesota market and supported growth into adjacent states.[10] Following the 2019 merger with Chemical Financial Corporation, the combined entity's headquarters shifted to Detroit, Michigan, reflecting the integration of the Michigan-based partner's operations.[1]Corporate Structure and Scale
TCF Financial Corporation functioned as a bank holding company, with its principal subsidiary being TCF Bank, a national bank providing consumer, commercial, and wholesale banking services across multiple states.[1][5] The holding company structure allowed oversight of banking operations while supporting non-banking affiliates involved in leasing, equipment finance, and related activities, such as TCF Leasing, Inc. and Winthrop Resources Corporation.[1] Incorporated in Michigan in 1973, TCF Financial maintained headquarters in Wayzata, Minnesota, prior to its relocation amid mergers.[1] In terms of scale, TCF Financial reported total assets of $47.8 billion as of December 31, 2020, positioning it as the 31st largest publicly traded bank holding company in the United States based on asset size.[11] Its market capitalization stood at approximately $5.3 billion in December 2020, reflecting its status as a mid-tier regional player before the announced merger with Huntington Bancshares.[12] TCF Bank operated around 475 branches, concentrated in the Midwest with primary footprints in Minnesota, Illinois, and Michigan, alongside presence in Colorado, Ohio, Wisconsin, and South Dakota.[13] The organization employed approximately 6,800 people, supporting its retail and commercial operations.[14]Business Philosophy
TCF Financial Corporation's business philosophy emphasized a customer-first approach, encapsulated in its "Customer First" initiative and trademarked slogan, which prioritized superior service standards across all interactions to foster loyalty and deposit growth. The company positioned itself as "The Leader in Convenience Banking," offering extended branch hours (seven days a week, 363 days a year), supermarket-embedded locations, and multichannel access via ATMs, phone cards, and digital platforms to deliver an "easy-to-bank-with" experience tailored to everyday customer needs.[15][1][16] This philosophy integrated retail banking as a foundational strategy, providing diverse products like free checking accounts, savings options, and credit services to generate low-cost core deposits and fee-based income while maintaining disciplined credit practices. TCF's mission focused on enhancing community quality of life through accessible financial solutions, supported by aggressive branch expansion—adding 27 locations in 2002 alone—and employee incentives aligned with service excellence. By December 31, 2002, this yielded $7.7 billion in total deposits, with lower-cost deposits rising $1 billion to $5.8 billion, reflecting effective customer retention amid regional growth in Minnesota, Illinois, Michigan, and Colorado.[15][17][1] The overarching vision aspired to build a sound, well-capitalized institution grounded in principled operations, emphasizing organic deposit gathering over high-risk lending and opportunistic capital deployment for sustained profitability. This customer-centric, convenience-driven model underpinned TCF's diversification into wholesale and leasing segments while keeping retail as the revenue core, enabling non-interest income growth of 10.9% in late 2002 through targeted advertising and product innovation.[15][17]Historical Development
Origins and Early Expansion (1923–1990)
TCF Financial Corporation originated on April 2, 1923, with the establishment of Twin City Building and Loan Association in downtown Minneapolis, Minnesota, aimed at facilitating home mortgages during the post-World War I housing surge.[3][8] Under the leadership of Roy W. Larsen, who served as president from inception through the 1960s, the institution focused on conservative lending practices, prioritizing depositor safety and steady asset accumulation amid the era's economic volatility.[3] A second branch opened in St. Paul in 1924, marking initial expansion beyond Minneapolis and doubling assets periodically in the ensuing years.[3] In 1936, the association received a federal charter and was renamed Twin City Federal Savings and Loan Association, with assets at $3.5 million that year, rising to $10 million by 1939 despite the Great Depression's challenges.[3] By 1943, it ranked as the seventh-largest savings and loan in the United States, holding $20 million in assets, bolstered by wartime savings inflows and prudent management that avoided the speculative risks plaguing peers.[3] Post-World War II growth accelerated, with assets reaching $50 million in 1946, $100 million in 1951, and $357 million by 1959, driven by suburbanization and federal housing programs in the Twin Cities region.[3] The institution sustained expansion through the 1960s and 1970s, achieving $1 billion in assets by 1972 via organic branch growth primarily in Minnesota.[3] Facing the savings and loan crisis of the 1980s, TCF adapted by converting to a federal stock savings bank in 1986, adopting the name TCF Banking and Savings, F.A., and launching innovations such as Totally Free Checking to attract depositors without fees.[3] That year marked a strategic pivot toward retail banking diversification, including the 1987 acquisition of $300 million in insured deposits from a failed Illinois savings and loan, representing its first significant out-of-state move.[3] In 1988, TCF pioneered supermarket-based branches with its first location in Eagan, Minnesota, enhancing accessibility and deposit growth in a deregulated environment.[3] By 1990, these efforts had solidified TCF's position as a regional thrift with a focus on consumer deposits and mortgage lending, setting the stage for broader national ambitions.[3]National Growth and Retail Focus (1990s–2010s)
During the 1990s, TCF Financial Corporation pursued aggressive regional expansion primarily through acquisitions and de novo supermarket branches, emphasizing retail banking to capture low-cost deposits from middle- and lower-income customers via convenient in-store locations. In 1993, the company acquired Republic Capital Group, Inc., in Milwaukee, Wisconsin, incorporating $960 million in assets, and purchased 15 branches from First Federal Savings and Loan Association in Michigan, adding $220 million in deposits.[3] By 1995, TCF further strengthened its Michigan footprint by acquiring Great Lakes Bancorp, which brought $2.4 billion in assets and 39 branches.[3] These moves boosted TCF's share of Minnesota's consumer banking market to 18 percent by 1993, up from 8 percent in 1986, driven by its "Totally Free Checking" product that waived fees for accounts meeting basic activity thresholds.[8] In 1997, TCF converted to a national bank charter, facilitating broader operations, and entered the Colorado market while acquiring Winthrop Resources Corporation for equipment leasing to diversify revenue beyond pure retail deposits.[3] The following year, it expanded into the Chicago area by purchasing Bank of Chicago and 76 supermarket branches from BankAmerica Corporation in Jewel-Osco stores, enhancing its in-store model that prioritized high-traffic, low-overhead locations.[3][18] Into the 2000s, TCF continued retail-oriented growth, leveraging supermarket partnerships for deposit accumulation and introducing debit products to drive transaction volume. By 2000, supermarket branch deposits exceeded $1 billion, with over 200 such locations making TCF the fourth-largest U.S. operator of in-store branches, a strategy that minimized real estate costs while maximizing customer acquisition through everyday shopping convenience.[3] That year, the acquisition of Standard Federal Bancorporation for $2.1 billion added 112 branches across Michigan, Ohio, and Indiana, significantly broadening its Midwest presence.[4] In 1996, TCF had launched Visa debit cards in Minnesota, reaching 1.1 million cards in circulation and ranking as the 16th-largest U.S. issuer, which supported its retail focus by encouraging fee-generating electronic transactions tied to checking accounts.[4] Expansions extended to Arizona in 2005 via Bank One branches and the opening of its first de novo branch there in 2006, though growth emphasized core retail services over aggressive national scaling.[4] By 2010, TCF operated 442 retail banking branches, underscoring sustained emphasis on physical accessibility for deposit gathering and basic consumer services amid industry shifts toward diversification.[19] TCF's retail strategy during this era prioritized stable, low-risk deposit funding over high-yield lending, with supermarket branches serving as core engines for account growth among transaction-oriented customers, though it faced challenges like branch closures in underperforming markets by the early 2010s. In 1999, TCF reached its one-millionth retail checking account, reflecting the efficacy of fee-light products in building volume, but it divested its auto loan portfolio to refocus on core banking.[3] This approach contrasted with broader industry trends in the 1990s toward revenue diversification, as TCF doubled down on branch networks post-deregulation to compete locally.[20] While expansions were regionally concentrated in the Midwest and select Sun Belt states rather than truly national, they supported consistent deposit growth, with retail services forming the foundation of operations through the 2010s.[19]Strategic Mergers Pre-Huntington (2019)
On January 27, 2019, TCF Financial Corporation and Chemical Financial Corporation announced an all-stock merger of equals valued at approximately $3.5 billion, aimed at creating a larger regional banking entity with enhanced scale in the Midwest.[21][22] The transaction was structured with TCF merging into Chemical, the surviving holding company, which would then rename itself TCF Financial Corporation, while the banking subsidiaries would consolidate under the TCF Bank brand.[23] This deal positioned the combined firm as Michigan's largest bank by deposits, with roughly 500 branches across eight states, $45 billion in assets, and a focus on commercial, consumer, and wholesale banking segments.[22][24] The merger's strategic rationale centered on achieving cost synergies estimated at $75 million annually through branch optimizations, technology integrations, and operational efficiencies, alongside revenue enhancements from cross-selling opportunities in complementary markets.[25] Executives highlighted the combination's potential for double-digit earnings per share accretion and improved return metrics, enabling sustainable growth amid competitive pressures in regional banking.[25][26] Chemical's strong deposit base in Michigan complemented TCF's urban retail footprint in Minnesota and Colorado, fostering a diversified Midwest presence without significant overlap in core markets.[27] Regulatory approvals followed, including clearance from the Federal Reserve on July 16, 2019, and the Office of the Comptroller of the Currency, confirming no adverse competitive effects and adequate fair lending programs post-merger.[27][23] The deal closed on August 1, 2019, with legacy TCF shares converting into Chemical common stock on a fixed exchange ratio, and leadership integrating under CEO Craig R. Dahl from TCF and Executive Chairman Gary Torgow from Chemical.[28][24] Integration proceeded through 2020, including branch rebranding and system conversions, yielding the anticipated synergies while maintaining a unified culture emphasized in joint statements.[28] This merger significantly bolstered TCF's pre-Huntington scale, facilitating its positioning as a top midcap bank ahead of subsequent consolidation.[25]Acquisition by Huntington Bancshares (2020–2021)
On December 13, 2020, Huntington Bancshares Incorporated announced an all-stock merger agreement to acquire TCF Financial Corporation, valuing the combined entity at approximately $22 billion and positioning it as a top 10 U.S. regional bank by assets.[5][29] Under the terms, each share of TCF common stock would convert into 3.0028 shares of Huntington common stock, implying a value of about $38.83 per TCF share and an 11% premium over TCF's closing price prior to the announcement.[30][31] The transaction aimed to expand Huntington's footprint across the Midwest and upper Midwest, leveraging TCF's retail banking presence while achieving cost synergies and an expected 18% accretion to Huntington's earnings per share in 2022.[5] The merger required approvals from multiple regulators, including the Federal Reserve, Office of the Comptroller of the Currency, and Department of Justice.[32] To address antitrust concerns in overlapping markets such as Gladwin-Midland, Michigan, the Department of Justice mandated the divestiture of 13 TCF branches in Michigan to an independent buyer, ensuring no substantial lessening of competition.[7][33] All necessary regulatory clearances were obtained by May 25, 2021, with the Federal Reserve approving the acquisition under the Bank Holding Company Act.[34][32] The transaction closed on June 9, 2021, with TCF merging into Huntington, the latter surviving as the parent company, and TCF Bank merging into Huntington National Bank.[6][35] Post-merger, Huntington's balance sheet reflected approximately $175 billion in assets, $142 billion in deposits, and $116 billion in loans, based on March 31, 2021, figures adjusted for the combination.[36] Huntington also integrated five TCF directors onto its board to support governance continuity.[6] The deal proceeded without significant delays, aligning with the initial second-quarter 2021 target despite the ongoing economic recovery from the COVID-19 pandemic.[13]Operations and Services
Core Banking Products
TCF Financial Corporation's core banking products, offered primarily through its subsidiary TCF National Bank, centered on deposit accounts and lending services for retail and commercial clients across its Midwest footprint. These products supported everyday banking needs, including transaction accounts, savings vehicles, and credit extensions for personal and business purposes.[1][32] Deposit products included checking accounts for daily transactions, savings accounts for interest-bearing accumulation, and certificates of deposit (CDs) with fixed terms. CDs required a minimum deposit of $100 and were available in maturities from three months to ten years, providing customers with predictable returns amid varying market rates.[1][37] Core deposits formed a stable funding base, emphasizing low-cost retail accounts over time deposits.[1] Lending products encompassed consumer and commercial categories, with residential mortgages, home equity lines, and installment loans such as auto and personal financing for individuals. The consumer portfolio featured $152.97 billion in residential mortgages and $142.27 million in installment loans as of December 31, 2019.[1] Commercial offerings included real estate loans, lines of credit, and equipment financing for small businesses, corporations, and governmental entities, totaling approximately $882 million in commercial real estate loans at year-end 2019.[1][1] These products prioritized relationship-based lending in urban markets like Minnesota, Michigan, and Illinois.[5]Digital and Retail Innovations
In 2011, TCF Bank introduced mobile banking capabilities, enabling customers to check balances, transfer funds, and locate ATMs and branches through text messaging, mobile browsers, and an iPhone application, offered as a free service to enhance accessibility.[38] This launch coincided with checking account enhancements, including the elimination of minimum balance requirements and provision of free online banking, account alerts, and secure e-statements, aimed at reducing fees and promoting seven-day access.[38] A major digital transformation began around 2015 under new leadership, partnering with D3 Banking Technologies to develop API-driven online and mobile platforms integrated with TCF's legacy core system, ensuring scalability across devices including potential voice commands.[39][40] The project migrated 1.2 million accounts over 15 months, completing by fall 2017, and introduced features such as remote deposit capture, biometric authentication via fingerprint and facial recognition, budget-planning tools, quick-glance balances, and responsive web design.[39][40] Early support for mobile payments included Apple Pay, Google Pay (via Android Pay integration), Samsung Pay, and NFC-enabled debit cards, alongside a new CRM for interaction tracking.[40] These innovations drove a 400% increase in concurrent digital users, with over 50% of customers adopting the mobile app, a 250% rise in existing-customer account openings, a 2.6% drop in checking attrition, and $1.3 million in first-year payment processing savings.[39][40] TCF further advanced its infrastructure using microservices and APIs in collaboration with Perficient, implementing a SaaS-based online banking platform and mobile app to modernize legacy systems, unlock mainframe data for insights, and meet evolving customer demands for seamless digital experiences.[41] Retail innovations complemented these efforts through customer retention strategies, such as low-cost promotional campaigns that doubled participation rates by simplifying opt-ins and leveraging data analytics for targeted messaging.[42] The bank planned expansions into person-to-person payments, AI-driven tools, voice recognition, and chatbot integrations to sustain momentum.[40]Branch Network and Market Footprint
TCF Financial Corporation's banking subsidiary, TCF Bank, maintained a branch network concentrated in the Midwest United States, with 478 branches as of December 31, 2020.[11] These locations were primarily situated in Michigan, Illinois, and Minnesota, reflecting the company's historical roots in Minnesota and expansions through acquisitions like the 2019 merger with Chemical Financial Corporation, which bolstered its Michigan presence.[11] [43] The network extended to additional states including Colorado, Ohio, Wisconsin, and South Dakota, enabling service to a broader regional footprint while emphasizing urban and suburban retail banking.[11] In Illinois, TCF operated approximately 120 branches, many embedded within Jewel-Osco grocery stores to enhance accessibility for everyday banking.[44] This in-store model contributed to a strong deposit base in metropolitan areas like Chicago, complementing traditional standalone branches in core markets.[44] TCF held a top-10 deposit market share in the Detroit metropolitan statistical area, underscoring its competitive positioning in key Midwest hubs such as Detroit, Minneapolis, and Chicago.[45] The company's footprint prioritized consumer-oriented retail banking, with branches designed for high-traffic convenience, though it divested non-core assets like seven Arizona branches in early 2020 to refocus on primary regions.[46] This strategic concentration supported efficient operations and localized customer engagement prior to the 2021 acquisition by Huntington Bancshares.[5]Financial Performance and Achievements
Revenue Streams and Profitability Metrics
TCF Financial Corporation generated revenue primarily through net interest income from its lending activities, including commercial real estate loans, equipment finance leases, consumer loans, and the interest spread on deposits, supplemented by noninterest income from fees and services. Net interest income represented 74.9% of total revenue in 2020, an increase from 73.5% in 2019 and 68.9% in 2018, reflecting a strategic emphasis on interest-bearing assets amid rising loan volumes post-mergers.[11] Noninterest income encompassed deposit service charges, card revenues, leasing-related earnings, and other fees from wealth management and fiduciary services. In 2018, this category totaled $470.9 million, or 32.2% of total revenue of $1.46 billion, with key components including:| Category | Amount ($ millions) | Share of Noninterest Income |
|---|---|---|
| Leasing and Equipment Finance | 185.1 | 39.3% |
| Fees and Service Charges | 132.2 | 28.1% |
| Card Revenue | 58.9 | 12.5% |
| Gains on Loan Sales | 33.5 | 7.1% |
| Servicing Fees | 27.3 | 5.8% |
| Other | 33.9 | 7.2% |