William Cooper, chief executive officer of TCF Financial Corp., recently compared being the best savings and loan in the country to being the best dog in the pound.

Now Mr. Cooper can work on making his Minneapolis company one of the country's best banks.

The $7.1 billion-asset TCF will announce today that it has converted from a thrift to a bank holding company with charters in Minnesota, Colorado, Illinois, Michigan, Ohio, and Wisconsin.

Mr. Cooper said it became easier to convert after the federal "bad-debt recapture" law was enacted in August, eliminating severe tax penalties on thrifts that convert to banks. The conversion, a goal of Mr. Cooper since he took the TCF job 12 years ago, got final regulatory approval from the Federal Reserve Board March 26.

"We didn't want to be the last one to turn out the lights on the thrift industry," he said.

A former president of Huntington Bancshares, Mr. Cooper has long said he believes his company trades at a lower multiple to earnings because investors don't like thrifts. In addition to tarnish left over from the savings and loan crisis of the 1980s and early '90s, thrifts are viewed as being solely in the mortgage business.

"It's a commodity business, and therefore it gets commodity returns," Mr. Cooper said.

Fewer than half of TCF's loans are mortgages; the remainder are commercial and consumer loans, or what Mr. Cooper likes to call "power assets."

TCF's stock trades at about 11 times its estimated 1997 earnings, while bank stocks typically trade at about 13 times earnings, Mr. Cooper said. He said he believes analysts consider his stock overpriced for a thrift but may consider it underpriced for a bank.

Caren Mayer, an analyst at Montgomery Securities, said she doesn't expect much more from the charter change than a psychological boost for TCF in the short term. "I really do think it's a formality," she said. "He always wanted to be a bank, and he gets to leave all that thrift stigma behind."

Ms. Mayer said she doesn't expect a rush of other big thrifts to convert.

Mr. Cooper, who has sounded a bit like the Rodney Dangerfield of bankers, hopes he'll finally get respect. "We can eat lunch at the fancy places instead of the American Legion hall," he joked in a recent interview.

Moreover, Mr. Cooper said, he wants TCF, primarily a consumer bank that caters to working-class customers, to build a commercial loan business. "For a company doing business with a thrift, it's kind of like doing business with a finance company-it's kind of downscale," he said. "Our competitors use that against us."

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