TCF Financial, in and out of Wall Street's good graces for a decade, has regained widespread investor favor in recent months.
"It takes time for banks to remake themselves, but TCF is underway with what will be a multiyear process of becoming a more focused, higher quality bank focused on middle-market depositors and specialty lending," independent analyst Stephen Simpson wrote recently on investor website Seeking Alpha. "Although there will be some headwinds … TCF's above-average asset sensitivity will ease some of those challenges."
TCF's stock price has climbed from less than $15 within the last year to around $25 per share in recent weeks. In April, the Plymouth-based bank reported unexpectedly strong first-quarter earnings, a plan that seems to be working and a bright horizon.
TCF's first-quarter profits surged 59 percent to $73.7 million on a 9 percent boost in revenue to $355.4 million. Profitability bloomed from diversified businesses, bolstered by low-cost consumer deposits and a phone and online consumer strategy that is restraining noninterest expenses.
Thanks partly to higher profitability and the recent federal tax cuts, TCF has raised its shareholder dividend. It may buy back stock and will continue to invest in what's working, CEO Craig Dahl told analysts recently.
"As we look to build on our first-quarter momentum … we are focused on driving shareholder value through strong execution of our strategy," Dahl said. "We are [reducing] the risk profile of our balance sheet to further lower our credit, operational and liquidity risks. We also maintain a positive outlook for our diversified lending businesses, including consumer real estate, commercial, leasing and equipment finance and inventory finance business from a growth, profitability and credit-quality perspective."
Dahl, who replaced the late Bill Cooper as the boss in 2015, is receiving high marks since he announced last year that TCF was exiting a volatile, California-based auto-loan business and redeploying capital into proven, consistent growers: leasing, equipment finance and inventory-finance lending.
Part of TCF's secret sauce over the last few years has been fewer workers, a point little discussed publicly.