Oppenheimer Maintains Perform Rating On TCB

Oppenheimer is maintaining its Perform rating on shares of TCF Financial Corporation (NYSE: TCB).

“News flow related to the Durbin Amendment has contributed to the volatility of TCB with the stock outperforming year-to-date,” Oppenheimer writes. “We are turning more cautious on TCB ahead of 1Q11 earnings based on the potential for elevated losses in the consumer RE portfolio.

“Home prices in TCF's markets continue to decline (Minneapolis down 3.5% M/M in Jan '11). With the stock trading at 12-15x our '12E EPS range (see page 5), we see potential downside in the stock as investor focus temporarily moves away from Durbin and back to the company's fundamentals.

“The likelihood for more M&A activity in the banking sector, something that pushed up TCB earlier in 1Q11, is why we are keeping our Perform rating on the stock.”

TCF Financial closed Wednesday at $15.88.