TCF Financial in Wayzata, Minn., reported higher third-quarter earnings, due to strong performance in the bank's auto lending portfolio.
The $19 billion-asset bank earned $52.3 million in the quarter, or 22% more than in the same period last year. Its earnings per share of 29 cents were in line with estimates of analysts polled by Bloomberg.
Rapid expansion in auto financing drove loan growth. Total loans expanded 4.6% from last year, to $16.4 billion. Auto loans grew 64% over the same period, to $1.7 billion.
Asset quality improved. The bank's set-aside for credit losses dropped 36%, to $15.7 million.
Gains from the sale of auto loans and mortgages drove a rise in fee-based revenue. Noninterest income climbed 9% from last year, to $116.1 million.
Interest income also boosted profits. Net interest income climbed 2%, to $204.2 million, as higher returns from auto and inventory finance helped offset lower yields from fixed-rate mortgages. The net interest margin fell two basis points, to 4.6%.
Operating expenses increased slightly, climbing 4%, to $220 million.
TCF's shares were trading at $14.62 midday Friday, down 3.9% from Thursday's close.