TCF Financial in Wayzata, Minn., reported lower profits because of a decline in fee income and flat performance in its loan book.

The $20 billion-asset company earned $34.9 million first quarter, down 12% from a year earlier. Earnings per share were 21 cents, falling 5 cents short of an estimate of analysts polled by Bloomberg.

Interest income remained unchanged, despite strong growth in auto loans and inventory financing. Net interest income edged up 1%, to $203.4 million, while total loans grew 4%, to $17.1 billion. The net interest margin shrank 16 basis points, to 4.5%, because of lower yields.

Credit quality improved, following the sale of financial crisis-era mortgages in the fourth quarter. The company's provision for problem loans declined 12%, to $12.8 million.

Fee income fell 3%, to $100.6 million. The company attributed the decline to "customer behavior changes," as well as higher average checking account balances.

Noninterest expenses increased 4%, to $226.8 million, from a combination of lease depreciation and advertising costs.

In the coming year, TCF is planning "significant" organizational changes, said William Cooper, the company's chairman and chief executive, during a conference call Tuesday morning.

The company last month named Craig Dahl as president. Dahl, who had been a vice chairman, is viewed as a possible successor to Cooper, who has said he plans to step down as CEO before the end of the year.

The planned changes are not part of a targeted cost-cutting effort, Cooper said. "I would say they are more organizational, in terms of Craig's perception of the way he'd like to see things organized," he said.

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