Howes: TCF Bank deal for Detroit HQ signals city's sustainability
A dozen years after Comerica Inc. decamped for Dallas, presaging Detroit’s slide into the global financial meltdown and its historic bankruptcy, a new bank is coming to town.
The merger announced Monday of Michigan-based Chemical Financial Corp.’s and TCF Financial Corp. of Wayzata, Minnesota, will headquarter the combined bank in downtown Detroit, an unambiguously positive statement by sharp financial minds assessing the breadth and durability of the city’s continuing reinvention.
“I remember the sting of Comerica leaving in 2007 — we all do,” said Chemical Chairman Gary Torgow, who will be executive chairman of the holding company that will control TCF Bank once the merger is completed late this year. “The times are such that we’ve made a commitment to Detroit, and we need to stick with it.”
Sticking with Detroit is a lot easier than it was a decade ago. Business investment is transforming downtown. Foundations and lenders like Chemical are targeting fresh capital on neighborhoods and the small business that drives them. Business and political leaders, often irrespective of political party, are coalescing around a virtuous circle of success — reasons why Torgow last week used an Economic Club meeting to call Detroit "the hottest town in America."
A Democrat with close ties to Gov. Gretchen Whitmer, Torgow credits such leaders as the governor, Mayor Mike Duggan, and Wayne County Executive Warren Evans for giving “us the confidence to do this. We’re making a statement that we believe” Detroit’s revival is “sustainable.”
He says Chemical's promise to bring 500 jobs to the city as part of its planned headquarters at Woodward and Elizabeth will add even more jobs as part of the merger; that the combined entity will employ 10,000 across more than 500 offices spanning nine states; that the deal signals a positive assessment of the Detroit and Michigan economies, as well as expectations of continuing loan and deposit growth.
Three of the top four jobs in the combined bank will be occupied by Chemical executives, a potent indicator that the smaller Chemical, its core leadership and its home state of Michigan are coming out on top. That's comparatively rare around here, where too often corporate mergers end up swallowing and sometimes erasing venerable corporate names like Kmart, Upjohn and National Bank of Detroit, to name just three.
This is huge — in fact and in symbolism. Not just because a new bank with $45 billion in total assets and a presence in four of the top 10 Midwest markets will build a new headquarters, fittingly, across Woodward from Comerica Park. It's what the move says about the maturation of Detroit’s reinvention, the vibrancy of its business climate and the growth potential of the regional economy.
"We are now headquarters to one of the 40 to 50 largest banks in America," Duggan said in an interview. "Obviously, there's going to be a lot more jobs and a lot more investment in the city of Detroit."
Even more, the deal feeds a narrative that Detroit's revival continues to gain both traction and believers. Stable leadership and demonstrated records of investment and redevelopment underscore the scale of opportunity in a city most of America gave up for dead. Except it isn't dead, offering instead untapped potential with a financial upside.
“Combining a big bank and headquartering in Detroit would be a red-letter accomplishment," Patrick Anderson, CEO of East Lansing-based Anderson Economic Group, wrote in an email. "It would signal that Detroit is now, finally, being recognized as a 21st-century business center worthy of the attention it garnered in the heyday of the auto industry.
"I recall the sad day Comerica left for Texas: Investors kept telling the bank the Detroit name was dragging them down. It’s a new day when financial investors desire putting their money in Detroit."
Yes, it is. This is a remarkable achievement for the trio that started Talmer Bank a decade ago. Originally worth about $10 million in assets, their comparatively tiny enterprise in Troy has grown through acquisition and organic growth into what Torgow calls "a Midwest powerhouse" with assets totaling $45 billion — and expectations to grow more.
Even as Torgow chairs the holding company's board, longtime Chemical colleague Dave Provost will chair the TCF Bank board and Tom Shafer, Chemical's CEO and president, will serve as TCF's president and chief operating officer. TCF's current CEO, the 67-year-old Craig Dahl, will be CEO of the combined bank.
If recent past is any indication, the new TCF is likely to emerge as a major player in Detroit's active community of corporate philanthropy and civic leadership. That could include vying for naming rights to Cobo Center, a process the convention center's management expects to conclude as early as March.
Torgow declined comment on Cobo. But in his remarks before the Detroit Economic Club, he said that "banks can do a lot. Without the neighborhoods coming back, Detroit will not have the kind of revitalization it wants. If the banks don't do it, nobody else is going to do it."
And on Monday he added: "We're looking at everything. Everything is open for opportunity now."
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, listen to his Saturday podcasts, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.