TCF Financial in Wayzata, Minn., on Monday reported a decline in quarterly profits due to sharply lower gains on the sale of auto loans.
The $21.8 billion-asset company earned $41.4 million during the first quarter, or 4% less than a year earlier. Earnings per share were 25 cents, a penny short of the average estimate of analysts compiled by FactSet Research Systems. Revenue rose 7% to $2.2 billion.
A drop-off in fees weighed on the quarterly results. Noninterest income fell 8%, to $103.5 million, mostly from a 76% plunge in gains on auto-loan sales, but also from a more gradual decline in service charges and ATM fees.
CEO Craig Dahl said TCF is taking steps to boost profitability in its struggling auto finance unit. The company
As part of the shift in focus, TCF has also tightened its underwriting for auto loans,
“We are refocusing our auto strategy to ensure profitable growth and increase operating leverage in this business moving forward,” Dahl said in a news release.
Last month TCF announced a
Meanwhile, net interest income rose 5% to $222.1 million. Total loans grew 1%, to $17.9 billion. The net interest margin climbed 9 basis points to 4.46%.
Noninterest expenses rose 7% to $244 million on higher costs associated with occupancy, lease depreciation and foreclosure properties.