Fair Values Measurements (Tables)

9 Months Ended

Sep. 30, 2019

Balances of Assets and Liabilities Measured at Fair Value on a Recurring and Non-recurring Basis

The balances of assets measured at fair value on a non-recurring basis were as follows. There were no liabilities measured at fair value on a non-recurring basis at September 30, 2019 and December 31, 2018.



(In thousands)	Level 1		Level 2		Level 3		Total
At September 30, 2019
Loans held-for-sale	$	—	$	136	$	1,220,621	$	1,220,757
Loans and leases	—		—		130,991		130,991
Other real estate owned	—		—		17,924		17,924
Repossessed and returned assets	—		6,841		5,762		12,603
Total non-recurring fair value measurements	$	—	$	6,977	$	1,375,298	$	1,382,275
At December 31, 2018
Loans	$	—	$	—	$	57,663	$	57,663
Other real estate owned	—		—		9,397		9,397
Repossessed and returned assets	—		4,358		5,165		9,523
Total non-recurring fair value measurements	$	—	$	4,358	$	72,225	$	76,583

The balances of assets and liabilities measured at fair value on a recurring basis were as follows:



	September 30, 2019
(In thousands)	Level 1		Level 2		Level 3		Total
Assets
Investment securities carried at fair value	$	—	$	5,579,407	$	428	$	5,579,835
Loans held-for-sale	—		114,831		—		114,831
Interest-only strips	—		—		14,078		14,078
Derivative assets:⁽¹⁾
Interest rate contracts	—		130,391		—		130,391
Forward foreign exchange contracts	—		1,666		—		1,666
Interest rate lock commitments	—		4,554		—		4,554
Forward loan sales commitments	—		166		—		166
Power Equity CDs	—		617		—		617
Total derivative assets	—		137,394		—		137,394
Forward loan sales commitments	—		404		—		404
Assets held in trust for deferred compensation plans	40,784		—		—		40,784
Total assets at fair value	$	40,784	$	5,832,036	$	14,506	$	5,887,326
Liabilities
Derivative liabilities:⁽¹⁾
Interest rate contracts	$	—	$	101,910	$	—	$	101,910
Forward foreign exchange contracts	—		315		—		315
Interest rate lock commitments	—		113		—		113
Forward loan sales commitments	—		253		—		253
Power Equity CDs	—		617		—		617
Swap agreement	—		—		356		356
Total derivative liabilities	—		103,208		356		103,564
Forward loan sales commitments	—		284		—		284
Liabilities held in trust for deferred compensation plans	40,784		—		—		40,784
Total liabilities at fair value	$	40,784	$	103,492	$	356	$	144,632


(1)	As permitted under GAAP, TCF has elected to net derivative assets and derivative liabilities when a legally enforceable master netting agreement exists as well as the related cash collateral received and paid. For purposes of this table, the derivative assets and derivative liabilities are presented gross of this netting adjustment.



	December 31, 2018
(In thousands)	Level 1		Level 2		Level 3		Total
Assets
Investment securities carried at fair value	$	—	$	2,470,061	$	4	$	2,470,065
Loans held-for-sale	—		—		18,070		18,070
Interest-only strips	—		—		16,835		16,835
Derivative assets:⁽¹⁾
Interest rate contracts	—		7,909		—		7,909
Forward foreign exchange contracts	—		6,689		—		6,689
Interest rate lock commitments	—		—		652		652
Total derivative assets	—		14,598		652		15,250
Forward loan sales commitments	—		—		152		152
Assets held in trust for deferred compensation plans	33,217		—		—		33,217
Total assets at fair value	$	33,217	$	2,484,659	$	35,713	$	2,553,589
Liabilities
Derivative liabilities:⁽¹⁾
Interest rate contracts	$	—	$	3,732	$	—	$	3,732
Forward foreign exchange contracts	—		13		—		13
Interest rate lock commitments	—		—		28		28
Swap agreement	—		—		583		583
Total derivative liabilities	—		3,745		611		4,356
Forward loan sales commitments	—		—		178		178
Liabilities held in trust for deferred compensation plans	33,217		—		—		33,217
Total liabilities at fair value	$	33,217	$	3,745	$	789	$	37,751


(1)	As permitted under GAAP, TCF has elected to net derivative assets and derivative liabilities when a legally enforceable master netting agreement exists as well as the related cash collateral received and paid. For purposes of this table, the derivative assets and derivative liabilities are presented gross of this netting adjustment.

Schedule of Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis were as follows:



(In thousands)	Investment securities carried at fair value			Loans held-for-sale			Interest-only strips			Interest rate lock commitments			Other derivative contracts			Forward loan sales commitments
At or For the Three Months Ended September 30, 2019
Asset (liability) balance, beginning of period	$	3		$	29,211		$	15,236		$	1,402		$	(435	)	$	(145	)
Transfers out of Level 3⁽¹⁾	—			(29,211		)	—			(1,402		)	—			145
Acquired through the Merger	450			—			—			—			—			—
Total net gains (losses) included in:
Net income	—			—			611			—			—			—
Other comprehensive income (loss)	(25		)	—			(65		)	—			—			—
Acquired	—			—			—			—			—			—
Originations	—			—			628			—			—			—
Principal paydowns / settlements	—			—			(2,332		)	—			79			—
Asset (liability) balance, end of period	$	428		$	—		$	14,078		$	—		$	(356	)	$	—
At or For the Three Months Ended September 30, 2018
Asset (liability) balance, beginning of period	$	4		$	18,554		$	19,887		$	858		$	(441	)	$	110
Total net gains (losses) included in:
Net income	—			(184		)	732			(242		)	(292		)	359
Other comprehensive income (loss)	—			—			246			—			—			—
Sales	—			(97,866		)	—			—			—			—
Originations	—			98,018			—			—			—			—
Principal paydowns / settlements	—			(3		)	(3,153		)	—			75			—
Asset (liability) balance, end of period	$	4		$	18,519		$	17,712		$	616		$	(658	)	$	469
At or For the Nine Months Ended September 30, 2019
Asset (liability) balance, beginning of period	$	4		$	18,070		$	16,835		$	624		$	(583	)	$	(26	)
Total net gains (losses) included in:
Acquired through the Merger	450			—			—			—			—			—
Net income	—			534			1,976			778			—			(119		)
Other comprehensive income (loss)	(25		)	—			246			—			—			—
Sales	—			(164,693		)	—			—			—			—
Originations	—			175,304			2,180			—			—			—
Principal paydowns / settlements	(1		)	(4		)	(7,159		)	—			227			—
Transfers out of Level 3⁽¹⁾	—			(29,211		)	—			(1,402		)	—			145
Asset (liability) balance, end of period	$	428		$	—		$	14,078		$	—		$	(356	)	$	—
At or For the Nine Months Ended September 30, 2018
Asset (liability) balance, beginning of period	$	6		$	3,356		$	21,386		$	223		$	(615	)	$	63
Total net gains (losses) included in:
Net income	—			254			1,913			393			(274		)	406
Other comprehensive income (loss)	—			—			1,015			—			—			—
Sales	—			(232,747		)	—			—			—			—
Originations	—			247,667			3,849			—			—			—
Principal paydowns / settlements	(2		)	(11		)	(10,451		)	—			231			—
Asset (liability) balance, end of period	$	4		$	18,519		$	17,712		$	616		$	(658	)	$	469

(1)

Certain assets (liabilities) previously classified as Level 3 were transferred to Level 2 because current period prices are derived from Level 2 observable market data.

Schedule of Differences Between the Aggregate Fair Value and Aggregate Unpaid Principal Balance on Loans Held for Sale

The difference between the aggregate fair value and aggregate unpaid principal balance of these loans held-for-sale was as follows:



(In thousands)	September 30, 2019		December 31, 2018
Fair value carrying amount	$	114,831	$	18,070
Aggregate unpaid principal amount	111,540		17,517
Fair value carrying amount less aggregate unpaid principal	$	3,291	$	553

Fair Value of Assets and Liabilities, Including Hierarchy Level

The carrying amounts and estimated fair values of TCF's financial instruments, excluding short-term financial assets and liabilities as their carrying amounts approximate fair value and excluding financial instruments recorded at fair value on a recurring basis, were as follows. This information represents only a portion of TCF's Consolidated Statements of Financial Condition not recorded in their entirety on a recurring basis and not the estimated value of TCF as a whole. Non-financial instruments such as the intangible value of TCF's branches and core deposits, leasing operations, goodwill, premises and equipment and the future revenues from TCF's customers are not reflected in this disclosure. Therefore, this information is of limited use in assessing the value of TCF.



	At September 30, 2019
	Carrying		Estimated Fair Value
(In thousands)	Amount		Level 1		Level 2		Level 3		Total
Financial instrument assets
FHLB and FRB stocks	$	290,238	$	—	$	290,238	$	—	$	290,238
Investment securities held-to-maturity	144,000		—		146,252		3,676		149,928
Loans and leases held-for-sale	100,216		—		84,959		18,331		103,290
Net loans⁽¹⁾	30,916,379		—		—		30,897,046		30,897,046
Loan servicing rights	55,301		—		—		55,301		55,301
Securitization receivable⁽²⁾	19,624		—		—		19,355		19,355
Deferred fees on commitments to extend credit	18,485		—		18,485		—		18,485
Total financial instrument assets	$	31,544,243	$	—	$	539,934	$	30,993,709	$	31,533,643
Financial instrument liabilities
Certificates of deposits	$	8,385,972	$	—	$	8,385,496	$	—	$	8,385,496
Long-term borrowings	860,482		—		875,864		—		875,864
Deferred fees on standby letters of credit	38		—		38		—		38
Total financial instrument liabilities	$	9,246,492	$	—	$	9,261,398	$	—	$	9,261,398



	At December 31, 2018
	Carrying		Estimated Fair Value
(In thousands)	Amount		Level 1		Level 2		Level 3		Total
Financial instrument assets
FHLB and FRB stocks	$	91,654	$	—	$	91,654	$	—	$	91,654
Investment securities held-to-maturity	148,852		—		146,467		2,800		149,267
Loans held-for-sale	72,594		—		—		74,078		74,078
Net loans⁽¹⁾	16,384,702		—		—		16,399,551		16,399,551
Securitization receivable⁽²⁾	19,432		—		—		19,025		19,025
Deferred fees on commitments to extend credit	18,555		—		18,555		—		18,555
Total financial instrument assets	$	16,735,789	$	—	$	256,676	$	16,495,454	$	16,752,130
Financial instrument liabilities
Certificates of deposits	$	4,790,680	$	—	$	4,820,442	$	—	$	4,820,442
Long-term borrowings	1,449,472		—		1,451,550		—		1,451,550
Deferred fees on standby letters of credit	77		—		77		—		77
Total financial instrument liabilities	$	6,240,229	$	—	$	6,272,069	$	—	$	6,272,069


(1)	Expected credit losses are included in the estimated fair values.

(2)

Carrying amounts are included in other assets.

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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