TCF Financial Corporation (TCB): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
TCF Financial's second-quarter 2014 earnings surpassed the Zacks Consensus Estimate and were well above the prior-year quarter figure. Results gained from revenue growth, partially offset by elevated non-interest expenses. Moreover, credit quality showed improvement. The company is better positioned in the market given its positive approach to market conditions and consistent top-line growth. Moreover, the company's strong capital deployment activities triggered by a healthy capital position reflect its robust footing. Also, continuous development in the consumer and commercial loan portfolio has led to enhanced performance of the company in spite of the sluggish economic recovery. However, persistent regulatory pressure and continuous rise in expenses continue to weigh on the financials.

Overview:

TCF Financial Corporation is a Wayzata, MN-based national financial holding company with $18.8 billion in assets. The company has 380 banking offices in Minnesota, Illinois, Michigan, Wisconsin, Colorado, Indiana, Arizona and South Dakota, providing retail and commercial banking services. TCB Bank remains open 7 days a week, offering convenient deposit products, lending and business banking services in more than 400 traditional grocery stores and campus locations.

TCF Financial operates as a holding company for TCF National Bank and TCF National Bank Arizona that offer various retail and commercial banking services in the United States and Canada. TCF Financial's core businesses include Lending and Funding. Lending includes retail lending, commercial banking, leasing and equipment finance, inventory finance and auto finance. Funding includes branch banking and treasury services.

TCF Financial has a joint venture with The Toro Company called Red Iron Acceptance, LLC. TCF Financial and Toro maintain ownership interests of 55% and 45%, respectively, in Red Iron. As TCF Financial has a controlling financial interest in Red Iron, its financial results are consolidated in TCF's financial statements. Moreover, Toro's interest is reported as a non-controlling interest within equity and qualifies as Tier 1 regulatory capital.

In Nov 2011, TCF National Bank, a wholly-owned subsidiary of TCF Financial acquired Gateway One Lending & Finance, LLC, a privately-held lending company that indirectly originates loans on new and used autos to consumers through established dealer relationships. Therefore, TCF Financial entered into the auto finance business with this acquisition, further diversifying its lending business in addition to providing growth opportunities within the U.S. auto lending marketplace.

TCF Financial's reportable segments comprised Lending, Funding and Support Services. In 2012, TCF Financial changed the managerial structure and therefore its segments. Prior periods' segment information has been restated to reflect the current structure.

Lending includes retail lending, commercial banking and the national lending businesses.

Funding includes branch banking and treasury services. Treasury services include the company's investment and borrowing portfolios and management of capital, debt and market risks, including interest rate and liquidity risks.

Support Services includes holding company and corporate functions that provide data processing, bank operations and other professional services to the operating segments.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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Referenced Stocks: TCB

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