This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

10 Midwest Bank Stocks Finally Paying Off


10. TCF Financial

Shares of TCF Financial (TCB) of Wayzata, Minn., closed at $12.15 Friday, returning 19% year-to-date, after falling 29% during 2011.

Based on a five-cent quarterly payout, the shares have a dividend yield of 1.63%.

TCF on March 13 announced it would prepay $3.6 billion in wholesale borrowings and sell $1.9 billion in mortgage-backed securities, as part of its strategy of moving away from longer-term residential and commercial real estate loans and MBS investments, to a focus on "originating high-yielding, low-risk, secured loans and leases funded by a low-cost, core deposit base," according to CEO William Cooper.

The company said it would recognize "a one-time, net after-tax charge of $293 million, or a loss of $1.85 per common share, recorded in the first quarter of 2012."

The good news for TCF's net interest margin, is that the company has "replaced $2.1 billion of 4 percent weighted average fixed-rate, Federal Home Loan Bank advances with a mix of floating and fixed-rate borrowings with a current rate of .5 percent," while terminating "$1.5 billion of 4 percent weighted average fixed-rate repurchase agreement borrowings." The company expects its net interest income to improve by $74 million, annualized, and for its net interest margin to increase by 96 basis points.

TCF earned $109.4 million, or 71 cents a share, during 2011, declining from $151 million, or $1.08 a share, during 2010, as the company saw a major decline in account fees and service charges from the debit card overdraft "opt-in" rule that the Federal Reserve implemented during the third quarter of 2010. TCF also saw its card revenue decline during the fourth quarter of 2011, as the Federal Reserve implemented the cap on debit card interchange fees charged to merchants, as required by the Durbin Amendment of the Dodd-Frank bank reform legislation.

KBW analyst Christopher McGratty was impressed with TCF's balance sheet restructuring, saying on Friday that the company's strong capital levels enabled "them to be aggressive and still maintain ample capital for future growth," and that the "projected earnings pick-up is also meaningful at about $0.27/share annually."

Despite what McGratty called "a 20% hit" to tangible book value, investors reacted positively, sending TCF's shares up 6.5% on the day of the restructuring announcement.

The shares trade for 1.2 times tangible book value, according to HighlineFI. The consensus among analysts polled by Thomson Reuters is for TCF Financial to post a full-year net loss of $1.19 a share for 2012, followed by earnings of $1.15 a share in 2013.

McGratty has a "Market Perform" rating on TCF, with a $12 price target, but said "TCB pulled the earnings power forward in what remains an uncertain environment, ultimately positioning it for a sale down the road (banks get sold on earnings power)."

Interested in more on TCF Financial? See TheStreet Ratings' report card for this stock.

2 of 11

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs