Added expenses from restructurings and technology investments contributed to decreased first-quarter earnings at Wayzata-based TCF Financial.
The company earned $46.3 million, a 3.7 decrease from the first quarter of 2016. Earnings per share of 25 cents missed analysts' consensus estimate by a penny.
Total revenue increased 0.4 percent to $325.6 million, with net interest income contributing $221.1 million, a 4.9 percent increase from the same period a year earlier. The company's noninterest income for the quarter dropped 10.5 percent, due in part to lower overdraft fees.
"During the first quarter, we completed an auto finance strategic reassessment, which resulted in the implementation of changes to that business," said President and CEO Craig Dahl in a news release. "Changes to our auto finance strategy and continued strategic investments in technology capabilities resulted in increased expenses during the first quarter."
Dahl told analysts on the company's earnings conference call that the company was in the "seventh inning" of its planned restructuring of the auto finance business. In the first quarter, the company took a one-time pretax charge of $5.4 million for the restructuring and gave layoff notices to 200 people throughout the organization.
Auto finance makes up about 15 percent of TCF's overall business.
In March, TCF announced leadership changes at its auto finance subsidiary, Gateway One Lending and Finance, and indicated a strategic shift.
On the earnings call with analysts, the company said it will move from a model where it originates auto loans and then packages and sells those obligations to an "originate-to-hold" model. A company spokesman said the shift should produce better earnings predictability for the segment and generate higher loan yields for TCF.
The stock closed nearly unchanged at $17.03.