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TCF Financial Reports First Quarterly Loss in 17 Years

April 19, 2012, 07:45 AM
Filed Under: Corporate Earnings

TCF Financial Corporation reported a net loss for the first quarter of 2012 of $282.9 million inclusive of a net  after-tax charge of $295.8 million related to repositioning certain investments and borrowings of TCF’s balance sheet. TCF reported net income of $30.3 million in the first quarter of 2011 and $16.4 million in the fourth quarter of 2011.
Leasing and equipment finance revenues were $22.9 million in the first quarter of 2012, down $3.9 million, or 14.5 percent, from the first quarter of 2011 and up $4.4 million, or 23.7 percent, from the fourth quarter of 2011. The changes from the prior periods were attributable to differing levels of customer-initiated lease activity.

Period ending March 31, 2012 average Leasing and Equipment Finance balances declined slightly (0.7%) to $3.12 billion from $3.14 billion on December 31, 2011, and reflected an increase of 1.3% from March 31, 2011 results.

“TCF’s first quarter results were highlighted by significant loan and lease growth from our specialty finance businesses, along with the successful completion of the repositioning of our balance sheet,” said William A. Cooper, Chairman and Chief Executive Officer. “While the balance sheet repositioning resulted in TCF’s first quarterly loss in 17 years, it was absolutely the right thing to do. Through the elimination of much of the high-cost, long-term debt and the sale of lower yielding, long-term mortgage-backed securities that were significantly limiting our net interest margin, we increased the transparency for the market to see the true franchise value of TCF in future periods."

“The growth in loans and leases during the quarter was primarily in inventory finance and auto finance. We are very excited about the growth potential of these businesses, especially in a time where many banks are struggling to find disciplined loan growth opportunities. TCF’s emphasis over the past several years on diversification into additional secured lending-oriented national specialty finance platforms has become a major contributor to TCF’s value proposition."

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