TCF Financial Corp. (TCB) in Wayzata, Minn., met Wall Street's quarterly earnings estimates as lower charges related to bad assets made up for a decline in revenue.
The $18.4 billion-asset company earned $37.9 million in the third quarter, up from $9.3 million in the same period of 2012, it announced Friday. Earnings per share were 23 cents, matching the forecasts of analysts polled by Bloomberg.
TCF's total revenue slipped by 2%, to $305.8 million, as loan and fee revenue fell. Net interest income was down half a percentage point, to $199.6 million, as TCF's net interest margin tightened by 23 basis points, to 4.62%.
TCF's revenue from banking fees fell 2%, to $61.6 million. This decline was due to lower average transaction volume per customer, and was partially offset by growth in deposit customers, TCF said.
TCF's leasing and equipment-finance division showed strong growth, as revenue increased 42%, to $29.1 million. Gains from sales of auto and consumer loans both fell.
A decline in charges for soured loans more than made up for the slide in revenue. TCF's provision for loan losses fell 74%, to $24.6 million, and net chargeoffs were $27.6 million, more than $76 million lower.
"TCF's credit quality showed steady improvement for the fourth consecutive quarter," said William Cooper, TCF's chairman and chief executive, in the news release. "The third quarter was highlighted by meaningful reductions in provision, delinquencies, and commercial classified assets."
TCFs operating costs rose 8%, to $212.2 million, as compensation costs grew by 13%, to $110.8 million. The higher costs were due to growth of TCF's auto-finance staff, it said.