TCF Financial Expected To Underperform, Says Sterne Agee

Sterne Agee has published a research report on TCF Financial Corporation TCB and believes the company is likely to underperform in the next several quarters. In the report, Sterne Agee writes "Given the drop in deposit fees, the relatively high NCO rate (by historical standards for TCB) of its residential portfolio, and the concentration of its footprint in markets that are likely to remain depressed through 2011, we believe that TCB's valuation will remain near ~1.5x-1.6x TBVPS and 11x- 12x our 2012E EPS, or $14-$15 per share. Our 2011E and 2012E EPS are below consensus expectations of $1.01 and $1.38, respectively. Our estimates do not include any effect from the Durbin amendment, as we do not believe the Federal Reserve's proposed rules on debit card interchange will be implemented." Sterne Agee maintains its Neutral rating on TCF Financial Corporation, which closed yesterday at $15.25.