A year into TCF Financial Corp.'s restructuring, it has become more diverse and less concentrated on residential property.

It's also a bit less predictable, analysts are finding.

A drop-off in fee income caused the Wayzata-based lender to miss on first-quarter earnings Friday, although it cranked out stronger-than-expected growth in revenue.

The culprit wasn't the fading mortgage refinance party that has zapped some of the country's biggest banks, including TCF's larger crosstown rivals. Slower activity in the bank's less predictable, or lumpy, leasing and equipment finance business, as well as lower fees from reintroducing free checking last year, chopped its fee income.

The bank, the state's third largest by deposits, said the leasing and equipment finance business tends to be lumpy quarter to quarter. It blamed other parts of the drop-off on the same downshift in consumer sentiment that other bankers have noted.

"People appear to have cut back on their spending," TCF Chairman and CEO Bill Cooper told analysts. "We're not really sure what's caused it. There's something going on there in the first quarter."

Bill Cooper, CEO of TCF Financial

Overall, TCF reported first-quarter profits of $25.5 million, or 16 cents per share, up 8 percent from the previous quarter. A year ago the bank lost nearly $300 million as it overhauled its balance sheet and embarked on a transformation to focus more on specialty short-term lending, such as auto and inventory financing. Cooper likes to say it's the third time he's had to re-invent the bank.

That overhaul appears largely on track.

While the bank's net interest income from loans rose 10.5 percent, its noninterest income from various fees and service charges fell 44 percent. As a result, total revenue dropped 15.5 percent from a year ago to about $292 million.

TCF shares closed Friday at $13.86, down almost 3 percent.

Cooper noted that improved property values have made it easier for the bank to sell off loans. Its stable of repossessed properties dropped significantly after it sold a portfolio of 184 consumer properties in the first quarter.

"The market for that kind of activity has improved considerably," Cooper said.

As for the persistent speculation that TCF, with $18.5 billion in assets, is a ripe acquisition target, Cooper insisted there's nothing new on the sale front. It will entertain any good offers.

"Our position on selling the bank has not changed in 30 years," he said.

"There's no book out on the bank. It's not for sale in that fashion. We always keep an open mind."

Jennifer Bjorhus • 612-673-4683