The Corporation uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Fair values are based on the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Investment securities available-for-sale, certain loans held for sale, interest-only strips, derivative instruments, forward loan sales commitments and assets and liabilities held in trust for deferred compensation plans are recorded at fair value on a recurring basis. From time to time the Corporation may be required to record at fair value other assets on a non-recurring basis, such as certain investment securities held-to-maturity, loans and leases, goodwill, loan servicing rights, other intangible assets, other real estate owned, repossessed and returned assets or securitization receivables. These non-recurring fair value adjustments typically involve application of lower of cost or fair value accounting or write-downs of individual assets.

The Corporation groups its assets and liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the degree and reliability of estimates and assumptions used to determine fair value. The levels are as follows:

Investment Securities Available-for-Sale: The fair value of investment securities available-for-sale, categorized primarily as Level 2, is recorded using prices obtained from independent asset pricing services that are based on observable transactions, but not quoted markets. Management reviews the prices obtained from independent asset pricing services for unusual fluctuations and comparisons to current market trading activity.

Loans Held-for-Sale: The Corporation has elected the fair value option for residential mortgage loans held-for-sale. Accordingly, the fair values of residential mortgage loans held-for-sale are based on valuation models that use the market price for similar loans sold in the secondary market. As these prices are derived from market observable inputs, they are categorized as Level 2.

Interest-only Strips: The fair value of interest-only strips, categorized as Level 3, represents the present value of future cash flows expected to be received by the Corporation on certain assets. The Corporation uses available market data, along with its own empirical data and discounted cash flow models, to arrive at the fair value of its interest-only strips. The present value of the estimated expected future cash flows to be received is determined by using discount, loss and prepayment rates that the Corporation believes are commensurate with the risks associated with the cash flows and what a market participant would use. These assumptions are inherently subject to volatility and uncertainty and, as a result, the fair value of the interest-only strips may fluctuate significantly from period to period. Unobservable inputs used to value the interest-only strips include a discount rate of 14% (weighted average) and prepayment rates of 4% (weighted average).

Interest Rate Contracts: The Corporation executes interest rate contracts as described in "Note 15. Derivative Instruments." The fair value of these interest rate contracts, categorized as Level 2, is determined using a cash flow model which may consider the forward curve, the discount curve, option volatilities and credit valuation adjustments related to counterparty and/or borrower non-performance risk.

Risk Participation Agreements: The fair value of risk participation agreements, categorized as Level 2, is determined using a cash flow model which may consider the forward curve, the discount curve, option volatilities and credit valuation adjustments related to counterparty and/or borrower nonperformance risk.

Forward Foreign Exchange Contracts: The Corporation's forward foreign exchange contracts are recorded at fair value using a cash flow model that includes key inputs such as foreign exchange rates and an assessment of the risk of counterparty non-performance. The risk of counterparty non-performance is based on external assessments of credit risk. The fair value of these contracts, categorized as Level 2, is based on observable transactions, but not quoted markets.

Interest Rate Lock Commitments: The Corporation's interest rate lock commitments are derivative instruments that are recorded at fair value based on valuation models that use the market price for similar loans sold in the secondary market. The interest rate lock commitments are adjusted for expectations of exercise and funding. As the prices are derived from market observable inputs, the Corporation categorized these instruments as Level 2.

Swap Agreement: The Corporation's swap agreement related to the sale of Legacy TCF's Visa Class B stock is categorized as Level 3. The fair value of the swap agreement is based on the Corporation's estimated exposure related to the Visa covered litigation through a probability analysis of the funding and estimated settlement amounts.

Forward Loan Sales Commitments: The Corporation enters into forward loan sales commitments to sell certain mortgage loans which are recorded at fair value based on valuation models. The Corporation’s expectation of the amount of its interest rate lock commitments that will ultimately close is a factor in determining the position. The valuation models utilize the fair value of related mortgage loans determined using observable market data and therefore the commitments are categorized as Level 2.

Assets and Liabilities Held in Trust for Deferred Compensation Plans: Assets held in trust for deferred compensation plans include investments in publicly traded securities, excluding TCF Financial common stock reported in other equity, and U.S. Treasury notes. The fair value of these assets, categorized as Level 1, is based on prices obtained from independent asset pricing services based on active markets. The fair value of the liabilities equals the fair value of the assets.


	March 31, 2021
(In thousands)	Level 1		Level 2		Level 3		Total
Assets
Investment securities available-for-sale	$	—	$	8,403,321	$	467	$	8,403,788
Loans held-for-sale	—		107,417		—		107,417
Interest-only strips	—		—		6,737		6,737
Derivative assets:(1)
Interest rate contracts	—		164,438		—		164,438
Risk participation agreements	—		27		—		27
Forward foreign exchange contracts	—		1,193		—		1,193
Interest rate lock commitments	—		7,073		—		7,073
Forward loan sales commitments	—		5,560		—		5,560
Power Equity CDs	—		300		—		300

Total derivative assets	—		178,591		—		178,591

Assets held in trust for deferred compensation plans	49,669		—		—		49,669
Total assets at fair value	$	49,669	$	8,689,329	$	7,204	$	8,746,202
Liabilities
Derivative liabilities:(1)
Interest rate contracts	$	—	$	21,945	$	—	$	21,945
Risk participation agreements	—		63		—		63
Forward foreign exchange contracts	—		1,505		—		1,505
Interest rate lock commitments	—		166		—		166
Forward loan sales commitments	—		45		—		45
Power Equity CDs	—		300		—		300
Swap agreement	—		—		286		286
Total derivative liabilities	—		24,024		286		24,310

Liabilities held in trust for deferred compensation plans	49,669		—		—		49,669
Total liabilities at fair value	$	49,669	$	24,024	$	286	$	73,979

(1)As permitted under GAAP, the Corporation 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, 2020
(In thousands)	Level 1		Level 2		Level 3		Total
Assets
Investment securities available-for-sale	$	—	$	8,284,219	$	504	$	8,284,723
Loans held-for-sale	—		221,784		—		221,784
Interest-only strips	—		—		7,823		7,823
Derivative assets:(1)
Interest rate contracts	—		248,267		—		248,267
Risk participation agreements	—		62		—		62
Forward foreign exchange contracts	—		11		—		11
Interest rate lock commitments	—		14,565		—		14,565
Forward loan sales commitments	—		37		—		37
Power Equity CDs	—		459		—		459

Total derivative assets	—		263,401		—		263,401

Assets held in trust for deferred compensation plans	48,659		—		—		48,659
Total assets at fair value	$	48,659	$	8,769,404	$	8,327	$	8,826,390
Liabilities
Derivative liabilities:(1)
Interest rate contracts	$	—	$	14,681	$	—	$	14,681
Risk participation agreements	—		125		—		125
Forward foreign exchange contracts	—		2,386		—		2,386
Interest rate lock commitments	—		4		—		4
Forward loan sales commitments	—		3,411		—		3,411
Power Equity CDs	—		459		—		459
Swap agreement	—		—		66		66
Total derivative liabilities	—		21,066		66		21,132

Liabilities held in trust for deferred compensation plans	48,659		—		—		48,659
Total liabilities at fair value	$	48,659	$	21,066	$	66	$	69,791

Management assesses the appropriate classification of financial assets and liabilities within the fair value hierarchy by monitoring the level of available observable market information. Changes in markets or economic conditions, as well as changes to the valuation models, may require the transfer of financial instruments from one fair value level to another. Such transfers, if any, are recorded at the fair values as of the beginning of the quarter in which the transfers occurred.

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


(In thousands)	Investment securities available-for-sale		Interest-only strips		Swap agreement











At or For the Three Months Ended March 31, 2021
Asset (liability) balance, beginning of period	$	504	$	7,823	$	(66)
Total net gains (losses) included in:
Net income	—		144		—
Other comprehensive income (loss)	(37)		(181)		—


Originations	—		—		(288)
Principal paydowns / settlements	—		(1,049)		68
Asset (liability) balance, end of period	$	467	$	6,737	$	(286)













Unrealized gains (losses) included in other comprehensive income for assets held at the end of the period	$	(37)	$	(181)	$	—











At or For the Three Months Ended March 31, 2020
Asset (liability) balance, beginning of period	$	433	$	12,813	$	(356)

Total net gains (losses) included in:
Net income	1		159		(1)
Other comprehensive income (loss)	(31)		(348)		—



Principal paydowns / settlements	—		(1,673)		71
Asset (liability) balance, end of period	$	403	$	10,951	$	(286)












Unrealized gains (losses) included in other comprehensive income for assets held at the end of the period	$	(31)	$	(348)	$	—

Loans and Leases: Loans and leases for which repayment is expected to be provided solely by the value of the underlying collateral, categorized as Level 3 and recorded at fair value on a non-recurring basis, are valued based on the fair value of that collateral less estimated selling costs. The fair value of the collateral is determined based on internal estimates and/or assessments provided by third-party appraisers and the valuation relies on discount rates of 10%.

Loan servicing rights: The fair value of loan servicing rights, categorized as Level 3, is based on a third party valuation model utilizing a discounted cash flow analysis using interest rates and prepayment speed assumptions currently quoted for comparable instruments and a discount rate determined by management. The valuation relies on discount rates ranging from 10% to 15% and prepayment speeds ranging from 8% to 43%. Loan servicing rights are recorded at the lower of cost or fair value.

Other Real Estate Owned: The fair value of other real estate owned, categorized as Level 3, is based on independent appraisals, real estate brokers' price opinions or automated valuation methods, less estimated selling costs. Certain properties require assumptions that are not observable in an active market in the determination of fair value and include a discount rate of 10%. Assets acquired through foreclosure are initially recorded at the lower of the loan or lease carrying amount or fair value less estimated selling costs at the time of transfer to other real estate owned.

Repossessed and Returned Assets: The fair value of repossessed and returned assets, categorized as Level 2 or Level 3 depending on the underlying asset type, are based on available pricing guides, auction results or price opinions, less estimated selling costs. Assets acquired through repossession or returned to TCF are initially recorded at the lower of the loan or lease carrying amount or fair value less estimated selling costs at the time of transfer to repossessed and returned assets.


(In thousands)	Level 1		Level 2		Level 3		Total
At March 31, 2021

Loans and leases	$	—	$	—	$	602,723	$	602,723
Loan servicing rights	—		—		44,151		44,151
Other real estate owned	—		—		14,072		14,072
Repossessed and returned assets	—		6,348		—		6,348
Total non-recurring fair value measurements	$	—	$	6,348	$	660,946	$	667,294
At December 31, 2020
Loans and leases	$	—	$	—	$	592,133	$	592,133
Loan servicing rights	—		—		38,303		38,303
Other real estate owned	—		—		14,575		14,575
Repossessed and returned assets	—		7,332		—		7,332
Total non-recurring fair value measurements	$	—	$	7,332	$	645,011	$	652,343

The Corporation has elected the fair value option for residential mortgage loans held-for-sale. This election facilitates the offsetting of changes in fair value of the loans held-for-sale and the derivative financial instruments used to economically hedge them. The difference between the aggregate fair value and aggregate unpaid principal balance of these loans held-for-sale was as follows:

Differences between the fair value carrying amount and the aggregate unpaid principal balance include changes in fair value recorded at and subsequent to funding and gains and losses on the related loan commitment prior to funding. No loans recorded under the fair value option were delinquent or on nonaccrual status at March 31, 2021 and December 31, 2020. The net gain from initial measurement of the loans held-for-sale, any subsequent changes in fair value while the loans are outstanding and any actual adjustment to the gains realized upon sales of the loans totaled $9.5 million for the three months ended March 31, 2021 and $15.2 million for the same period in 2020, and are included in mortgage banking income. These amounts exclude the impacts from the interest rate lock commitments and forward loan sales commitments which are also included in mortgage banking income.

Management discloses the estimated fair value of financial instruments, including assets and liabilities on and off the Consolidated Statements of Financial Condition, for which it is practicable to estimate fair value. These fair value estimates were made at March 31, 2021 and December 31, 2020 based on relevant market information and information about the financial instruments. Fair value estimates are intended to represent the price at which an asset could be sold or a liability could be settled. However, given there is no active market or observable market transactions for many of TCF's financial instruments, the estimates of fair value are subjective in nature, involve uncertainties and include matters of significant judgment. Changes in assumptions could significantly affect the estimated values.

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


	At March 31, 2021
	Carrying		Estimated Fair Value
(In thousands)	Amount		Level 1		Level 2		Level 3		Total
Financial instrument assets
FHLB and FRB stocks	$	358,414	$	—	$	358,414	$	—	$	358,414
Investment securities held-to-maturity	209,778		—		208,784		3,627		212,411
Loans and leases held-for-sale	232		—		—		233		233
Net loans(1)	32,806,406		—		—		32,983,379		32,983,379

Securitization receivable(2)	19,992		—		—		19,992		19,992
Deferred fees on commitments to extend credit(2)	18,477		—		18,477		—		18,477
Total financial instrument assets	$	33,413,299	$	—	$	585,675	$	33,007,231	$	33,592,906
Financial instrument liabilities
Certificates of deposits	$	4,665,211	$	—	$	4,670,257	$	—	$	4,670,257
Long-term borrowings	1,518,816		—		1,562,225		—		1,562,225

Total financial instrument liabilities	$	6,184,027	$	—	$	6,232,482	$	—	$	6,232,482


	At December 31, 2020
	Carrying		Estimated Fair Value
(In thousands)	Amount		Level 1		Level 2		Level 3		Total
Financial instrument assets
FHLB and FRB stocks	$	320,436	$	—	$	320,436	$	—	$	320,436
Investment securities held-to-maturity	184,359		—		190,141		3,413		193,554
Loans held-for-sale	244		—		—		248		248
Net loans(1)	31,164,287		—		—		31,434,749		31,434,749
Securitization receivable(2)	19,949		—		—		19,916		19,916
Deferred fees on commitments to extend credit(2)	20,002		—		20,002		—		20,002
Total financial instrument assets	$	31,709,277	$	—	$	530,579	$	31,458,326	$	31,988,905
Financial instrument liabilities
Certificates of deposits	$	5,524,381	$	—	$	5,534,751	$	—	$	5,534,751
Long-term borrowings	1,374,732		—		1,416,355		—		1,416,355

Total financial instrument liabilities	$	6,899,113	$	—	$	6,951,106	$	—	$	6,951,106