TCF Financial (TCB) in Wayzata, Minn., plans to raise $100 million by selling preferred equity at $25 a share.
The $17.9 billion-asset company announced the pricing late Wednesday, adding that it would grant its underwriters a 30-day option to buy an additional 600,000 shares to cover over-allotments. That would bring in an additional $15 million.
The new stock comes with a noncumulative dividend priced at 6.45%. The transaction is expected to close Dec. 19.
TCF said it would use the new equity for general corporate purposes, which could include using capital to support asset growth. At Sept. 30, TCF's total risk-based capital ratio was 12.96%.
In a research note Thursday, R. Scott Siefers, an analyst at Sandler O'Neill, singled out TCF's auto portfolio as the likely benefactor of the new capital. "We believe that the proceeds will be used to support strong anticipated balance sheet growth in coming periods, especially due to newer growth areas such as the company's auto portfolio," he wrote.
