Global News

Friday July 16, 2010

TCF Financial Corp. reported its 61st consecutive profitable quarter Thursday on higher revenue and cost cuts, but the market punished the bank for a 10 percent rise in bad loans since the end of March. Net income at the Wayzata-based regional bank jumped 91 percent from a year earlier to $45.0 million. Revenue was up 5 percent to $312.4 million, while core operating expenses fell 4 percent to $167.8 million. The bank earned 32 cents per share in the quarter. Bill Cooper, TCF's chairman and CEO, said in a statement that he was pleased by the company's performance. "While the economy remains battered by slow growth and high unemployment, TCF's credit quality remains both stable and better than most of our competitors," he said. The market took a different view, driving the bank's stock down 5.4 percent to $16.58. Several observers attributed the plunge to an increase in non-accruing assets since the first quarter, rising to $448.1 million from $406.8 million. Such loans are more than 60 days past due. Cooper told analysts in a conference call, however, that most of the increase related to four commercial loans amounting to $33 million. He said $8.7 million of that is current, and the change in status of those loans to non-accrual doesn't necessarily portend future charge-offs. "There's nothing new or exciting in there," Cooper said. "We've already reserved these up pretty well." The bank has posted a $4.5 million reserve on the loans, he explained, adding that most of the debt has a high loan-to-value ratio. Harrison Grodnick, principal and senior portfolio manager for Minneapolis Portfolio Management Group, which owns 1.9 million shares of TCF, scratched his head at the drop in the bank's stock price Thursday. "To be honest with you, I didn't think the report was that bad," Grodnick said. He said TCF management has proven to be nimble, and that the bank seems better poised than its peers to respond to the pending changes in financial regulations. Source TCF profits: 61 quarters and counting is a post from: Latest US Hot News