TCF Financial (TCB) in Wayzata, Minn., was buoyed by improved credit quality in the fourth quarter.

The company earned $35.1 million in the fourth quarter, up 49% from the same period in 2012. Earnings per share of 22 cents were 1 cent lower than the estimates of analysts polled by Bloomberg.

TCF's net interest income ticked up 0.4% from the fourth quarter of 2012, to $201.9 million. The increase was largely owed to higher average loan and lease balances in the automobile finance and inventory finances businesses. Its net interest margin fell 12 basis points, to 4.67%, as origination yields in the lending business dropped due to the low interest rate environment.

Noninterest income rose 3.7%, to $104.4 million. While fees and service charges fell because of lower transaction activity and higher account balances, TCF benefited from gains on the sale of customer real estate loans and other sources of income.

Noninterest expense ticked up 3%, rising to $220.5 million because of increases in compensation and employee benefits. Higher costs from occupancy and equipment expenses also contributed to the increase.

The $18.4 billion-asset TCF slashed its loan-loss provision by 53%, to $22.8 million, as home values improved and customer defaults declined. Net chargeoffs totaled $30.1 million, down 34% from the same period a year ago.

TCF's fourth quarter included a $5.6 million after-tax charge related to the company's plans to consolidate 46 branches in Illinois and Minnesota in the first quarter of 2014.

The company was released from an enforcement order that required it to improve compliance with the Bank Secrecy Act in December

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