TCF Financial Corp. said third-quarter net income grew 22 percent as auto loans and equipment financing rose strongly and borrowing costs fell.
The Wayzata bank company said Friday it earned $52.3 million in the July-to-September period, up from $42.8 million a year ago and just short of the record $53.1 million it earned from March to June this year.
But the profit of 29 cents a share was a penny short of expectations, and TCF shares tumbled 3.5 percent on a day of gains in the broad market and banking sector.
Revenue rose 4.7 percent and net interest income was up 2.3 percent. Net interest margin narrowed to 4.6 percent from 4.62 percent a year ago and 4.65 percent in the second quarter.
TCF, Minnesota's third-largest bank by deposits, two years ago shifted away from its concentration on consumer banking and more heavily into auto loans and other specialty financing. With other regional and midsize banks adopting the same approach, analysts asked TCF executives on Friday how they can protect its market position.
TCF Chairman William Cooper said larger banks pose the most difficult competition and the firm is already delivering solid results against them.
"We're doing well in that competitive market because we do a really good job of getting it done," Cooper said. "I don't really look at other midsize banks getting into the auto business or the equipment finance business changing the marketplace that much."
Evan Ramstad
