TCF Financial in Wayzata, Minn., reported lower quarterly profits after treading water on fee income and setting aside more money for problem loans.

The $21.9 billion-asset company earned $45.2 million, or 5% less than a year earlier. Earnings per share were 27 cents, missing an estimate of analysts polled by Bloomberg by 4 cents.

"Near-term headwinds" in the auto industry put a dent in TCF's fourth-quarter results, CEO Craig Dahl says.

Lackluster performance in fee-based lines of business weighed on the quarterly results. Noninterest income was flat at $115.7 million as sharp declines in gains on the sale of auto loans, as well as lower service-charge income, were partially offset by a higher servicing revenue and real estate loan sales.

In a press release, CEO Craig Dahl said that the company experienced “some near-term headwinds” in the auto industry but remains well positioned to weather volatility in the market.

Auto loans and leases were $2.7 billion, flat from a year earlier and down slightly from the previous quarter. Total loans grew 2% to $17.8 billion year over year thanks to increases in inventory finance.

The provision for loan losses rose 13% to $19.9 million; the company attributed the increase to overall loan growth. Net chargeoffs as a percentage of loans declined 2 basis points to 0.27%.

Net interest income grew 3% to $211.4 million. The net interest margin declined 5 basis points to 4.30%.

Noninterest expenses climbed 1% to $225.4 million, mostly from increases in compensation and benefits.

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