FBR Capital Downgrades TCF Financial (TCB) to Market Perform

FBR Capital downgraded TCF Financial (NYSE: TCB) from Outperform to Market Perform with a price target of $14.00 (from $16.00).

Analyst Bob Ramsey commented, "We downgrade shares of TCF Financial to Market Perform from Outperform following 2Q16 results. Our prior thesis on TCB had been that (1) its wide NIM was a sustainable advantage, (2) strong originations would be reflected in building loan growth, and (3) its inefficient cost structure would be low-hanging fruit to boost profitability. The thesis has not played out: TCB now expects 4 bps to 5 bps of NIM pressure per quarter and no longer expects to achieve 6% loan growth this year, and there has been little progress on expenses. While TCB still trades at a discount to peers, we do not see that changing until there is greater clarity around overdraft fees, progress on improving efficiency, or rates begin to move higher. We reiterate our 2016 operating EPS estimate of $1.15, but lower our 2017 estimate to $1.20 (from $1.30) to reflect lower net interest income. We trim our price target to $14 (from $16), equal to 11.7x our 2017 EPS estimate and 1.25x 2Q16 TBV per share."

For an analyst ratings summary and ratings history on TCF Financial click here. For more ratings news on TCF Financial click here.

Shares of TCF Financial closed at $13.65 yesterday.

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