TCF Financial Corporation—Minnesota’s second-largest bank holding company and one of the 30 largest public companies in the state—is the regional lender most likely to be sold this year.
That’s according to an analyst report from Deutsche Bank, which focused largely on how much regional banks’ CEOs would stand to profit in the event of a sale. Deutsche Bank looked specifically at banks with assets under $100 billion. (Wayzata-based TCF’s assets totaled $18.3 billion as of December 31, according to data from the Federal Deposit Insurance Corporation.)
Deutsche Bank, which is based in Germany, said it believes TCF, Florida-based BankUnited, Texas-based Comerica Incorporated, California-based First Republic Bank, and Texas Capital Bancshares, Inc., “are the most likely potential sellers over time”—but TCF is “the most likely seller this year, in our view.”
The report noted that the payout for TCF CEO Bill Cooper could be about $9.6 million, or roughly 1.1 times his compensation, one of the lowest ratios among the banks cited by Deutsche Bank as possible sellers. (Cooper’s compensation for 2011, the latest available data, was $8.9 million.)
But the report said TCF is the most likely to be sold this year because of “uncertainty over CEO succession and a net interest margin that is likely to be more pressured than peers starting in one to two years.”
TCF’s stance regarding a sale, meanwhile, “is the same as it has been for the last 15 to 20 years,” spokesman Jason Korstange told Twin Cities Business on Tuesday.
Similar speculation about a possible TCF sale has surfaced in the past, and the bank’s response remains that it is its fiduciary duty to take any reasonable offer to the board and negotiate with a potential buyer, Korstange said. Cooper acknowledged during a recent quarterly earnings call that the bank would sell if the right deal came along—but “if” is the operative word, Korstange added.
Cooper’s current contract at TCF runs through the end of 2015, and the company has not released any formal succession plan, according to Korstange.
To read the full Deutsche Bank report, click here.
For the fourth quarter of 2012, TCF reported earnings of $23.6 million, up 44 percent from $16.4 million during the same period in 2011. For the full year, however, the company reported a net loss of $218.5 million, which included charges related to a financial restructuring.
In other TCF news, the bank on Monday opened a new branch at 1101 Wayzata Boulevard in Wayzata. The branch is TCF’s first full-service branch in the city, and Tim Doyle, TCF’s retail director of branch banking for Minnesota, said in a statement that the company has “been waiting for a long time for the right location to become available for us to place a branch in the hometown of our corporate headquarters.”
Cooper has been the subject of multiple Twin Cities Business stories, including a March 2012 cover story, which examines his life story that began as a working-class kid from Detroit. Cooper was also inducted into the Minnesota Business Hall of Fame in 2011.