TCF Financial Corp.'s fourth-quarter net profit fell 4.6 percent, hurt in part by reduced profitability in auto loans.
In a statement Friday, Chief Executive Craig Dahl said TCF saw improvements in diversifying its loans, expanding its deposit base and generating operating leverage through the year. He said volatility in auto lending created some difficulty. TCF's gains on the sale of auto loans amounted to $1.2 million during the quarter, down from $3.1 million a year ago.
"It wasn't a result that we were happy with," Dahl said about the auto lending business on a conference call with analysts. "Our gain on our sales strategy has not produced a consistency we've been looking for."
The performance represented a sudden shift in momentum for a business that had been a strong performer at TCF.
For the full year, the company saw a 14 percent gain on sales of auto loans. He said executives would monitor the business over the next few quarters before deciding whether to change strategies.
TCF's shares fell 7.5 percent after the results were announced.
The Wayzata-based company, which runs one of the largest banks in Minnesota, said it earned $50.1 million, or 27 cents a diluted share, missing the consensus forecast of analysts of 30 cents a share. The company's shares closed down at $17.72.
TCF earned $52.5 million, or 29 cents a share, in the same period a year ago.
Revenue rose 1.8 percent to $327.1 million. Net interest income, about two-thirds of its overall revenue, rose about 2.8 percent.
Noninterest income was flat, after a drop of about 5 percent in fees, card and ATM revenue was offset by a securities-related gain. Noninterest expense rose 1.2 percent.
TCF said its net interest margin was 4.3 percent, down from 4.35 percent a year earlier.
Evan Ramstad • 612-673-4241
