UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

ý Quarterly Report Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934

For the quarterly period ended

September 30, 2002

o Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Commission File
No. 001-10253

TCF FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		41-1591444
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

200 Lake Street East, Mail Code EX0-03-A, Wayzata, Minnesota 55391-1693
(Address and Zip Code of principal executive offices)

Registrant’s telephone number, including area code: (612) 661-6500

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ý No o

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding at October 31, 2002
Common Stock, $.01 par value		74,115,730 shares

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

INDEX

Part I. Financial Information

	Item 1.		Financial Statements

		Consolidated Statements of Financial Condition at September 30, 2002 and December 31, 2001

		Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2002 and 2001

		Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2002 and 2001

		Consolidated Statements of Stockholders’ Equity for the Nine Months Ended September 30, 2002 and 2001

		Notes to Consolidated Financial Statements

	Item 2.		Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations for the Three and Nine Months Ended September 30, 2002 and 2001

	Item 3.		Quantitative and Qualitative Disclosures About Market Risk

	Item 4.		Controls and Procedures

	Supplementary Information

Part II. Other Information

	Items 1-6

Signatures

Certifications

Index to Exhibits

PART 1 - FINANCIAL STATEMENTS

ITEM 1. Financial Statements

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Financial Condition

(Dollars in thousands, except per-share data)

(Unaudited)

	At September 30, 2002			At December 31, 2001
ASSETS

Cash and due from banks	$	362,840		$	386,700
Investments	155,421			155,942
Securities available for sale	2,252,786			1,584,661
Loans held for sale	515,621			451,609
Loans and leases:
Consumer	2,872,528			2,509,333
Commercial real estate	1,781,827			1,622,461
Commercial business	436,314			422,381
Leasing and equipment finance	1,016,149			956,737
Subtotal	6,106,818			5,510,912
Residential real estate	1,975,481			2,733,290
Total loans and leases	8,082,299			8,244,202
Allowance for loan and lease losses	(76,157		)	(75,028		)
Net loans and leases	8,006,142			8,169,174
Premises and equipment, net	231,125			215,237
Goodwill	145,462			145,462
Deposit base intangibles	7,990			9,244
Mortgage servicing rights, net	62,437			58,261
Other assets	230,507			182,425
	$	11,970,331		$	11,358,715

LIABILITIES AND STOCKHOLDERS’ EQUITY

Deposits:
Checking	$	2,794,380		$	2,536,865
Savings	1,947,695			1,290,816
Money market	894,914			951,033
Subtotal	5,636,989			4,778,714
Certificates	2,023,508			2,320,244
Total deposits	7,660,497			7,098,958
Short-term borrowings	679,589			719,859
Long-term borrowings	2,275,706			2,303,166
Total borrowings	2,955,295			3,023,025
Accrued expenses and other liabilities	404,249			319,699
Total liabilities	11,020,041			10,441,682
Stockholders’ equity:
Preferred stock, par value $.01 per share, 30,000,000 shares authorized; none issued and outstanding	—			—
Common stock, par value $.01 per share, 280,000,000 shares authorized; 92,646,375 and 92,719,544 shares issued	926			927
Additional paid-in capital	518,641			520,940
Retained earnings, subject to certain restrictions	1,074,098			965,454
Accumulated other comprehensive income	40,207			6,229
Treasury stock at cost, 18,284,028 and 15,787,716 shares, and other	(683,582		)	(576,517		)
Total stockholders’ equity	950,290			917,033
	$	11,970,331		$	11,358,715

See accompanying notes to consolidated financial statements.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Income

(In thousands, except per-share data)

(Unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2002

2001

2002

2001

Interest income:

Loans and leases

145,424

168,128

445,886

520,424

Securities available for sale

30,814

29,226

83,948

85,194

Loans held for sale

4,436

5,997

15,972

18,234

Investments

1,732

2,194

5,205

6,980

Total interest income

182,406

205,545

551,011

630,832

Interest expense:

Deposits

24,282

38,049

74,106

132,698

Borrowings

34,355

45,089

104,303

142,658

Total interest expense

58,637

83,138

178,409

275,356

Net interest income

123,769

122,407

372,602

355,476

Provision for credit losses

4,071

6,076

17,939

13,923

Net interest income after provision for credit losses

119,698

116,331

354,663

341,553

Non-interest income:

Fees and service charges

59,041

49,055

163,692

142,628

Debit card and ATM revenues

23,851

23,079

68,027

64,143

Investments and insurance commissions

4,255

2,920

10,890

8,652

Subtotal

87,147

75,054

242,609

215,423

Leasing and equipment finance

13,136

11,720

39,771

32,950

Mortgage banking

(1,373

)

3,632

5,111

10,986

Other

3,665

4,889

11,796

12,327

Fees and other revenues

102,575

95,295

299,287

271,686

Gains on sales of branches

—

1,962

3,316

Gains on sales of securities available for sale

2,662

—

8,706

—

Other non-interest income

2,662

—

10,668

3,316

Total non-interest income

105,237

95,295

309,955

275,002

Non-interest expense:

Compensation and employee benefits

73,229

68,263

218,728

198,686

Occupancy and equipment

20,539

19,668

61,332

58,773

Advertising and promotions

5,640

5,495

16,773

16,410

Amortization of goodwill

—

1,944

—

5,833

Other

34,815

31,289

100,573

90,866

Total non-interest expense

134,223

126,659

397,406

370,568

Income before income tax expense

90,712

84,967

267,212

245,987

Income tax expense

31,845

32,077

94,057

92,860

Net income

58,867

52,890

173,155

153,127

Net income per common share:

Basic

.81

.70

2.34

2.01

Diluted

.80

.69

2.33

1.98

Dividends declared per common share

.2875

.25

.8625

.75

See accompanying notes to consolidated financial statements.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2002			2001
Cash flows from operating activities:
Net income	$	173,155		$	153,127
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	44,911			36,642
Provision for credit losses	17,939			13,923
Proceeds from sales of loans held for sale	1,762,138			1,424,430
Principal collected on loans held for sale	10,950			9,362
Originations and purchases of loans held for sale	(1,827,678		)	(1,605,602		)
Net decrease in other assets and accrued expenses and other liabilities	32,178			62,121
Gains on sales of assets	(11,070		)	(3,530		)
Other, net	(9,662		)	(5,684		)

Total adjustments	19,706			(68,338		)

Net cash provided by operating activities	192,861			84,789

Cash flows from investing activities:
Principal collected on loans and leases	2,398,111			2,318,226
Originations and purchases of loans	(2,016,014		)	(1,973,786		)
Purchases of equipment for lease financing	(336,568		)	(338,984		)
Proceeds from sales of securities available for sale	355,427			—
Proceeds from maturities of and principal collected on securities available for sale	406,387			243,666
Purchases of securities available for sale	(1,369,139		)	(582,533		)
Net (increase) decrease in Federal Home Loan Bank stock	3,126			(23,062		)
Purchases of premises and equipment	(40,452		)	(31,096		)
Sales of deposits, net of cash paid	(15,206		)	(26,958		)
Repayments of loans to deferred compensation plans	9,783			—
Other, net	2,027			(19,717		)

Net cash used by investing activities	(602,518		)	(434,244		)

Cash flows from financing activities:
Net increase in deposits	578,651			196,167
Net increase (decrease) in short-term borrowings	(40,270		)	286,400
Proceeds from long-term borrowings	39,664			550,211
Payments on long-term borrowings	(7,655		)	(497,346		)
Purchases of common stock	(127,647		)	(145,537		)
Dividends on common stock	(64,511		)	(58,468		)
Other, net	7,565			7,313

Net cash provided by financing activities	385,797			338,740

Net decrease in cash and due from banks	(23,860		)	(10,715		)
Cash and due from banks at beginning of period	386,700			392,007
Cash and due from banks at end of period	$	362,840		$	381,292

Supplemental disclosures of cash flow information:
Cash paid for:
Interest on deposits and borrowings	$	177,789		$	281,989
Income taxes	$	57,069		$	23,887
Transfer of loans and leases to other assets	$	42,236		$	22,440

See accompanying notes to consolidated financial statements.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity

(Dollars in thousands)

(Unaudited)

	Number of Common Shares Issued		Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock and Other			Total
Balance, December 31, 2000	92,755,659		$	928		$	508,682		$	835,605		$	(9,868	)	$	(425,127	)	$	910,220
Comprehensive income:
Net income	—		—			—			153,127			—			—			153,127
Other comprehensive income	—		—			—			—			32,936			—			32,936
Comprehensive income	—		—			—			153,127			32,936			—			186,063
Dividends on common stock	—		—			—			(58,468		)	—			—			(58,468		)
Repurchase of 3,610,237 shares	—		—			—			—			—			(145,537		)	(145,537		)
Issuance of 180,450 shares	—		—			2,167			—			—			(2,167		)	—
Cancellation of shares	(31,666	)	(1		)	(1,307		)	—			—			501			(807		)
Amortization of deferred compensation	—		—			—			—			—			8,207			8,207
Exercise of stock options, 84,514 shares	—		—			886			—			—			2,341			3,227
Change in shares held in trust for deferred compensation plans, at cost	—		—			8,719			—			—			(8,719		)	—
Purchase of TCF stock to fund the Employees Stock Purchase Plan, net	—		—			41			—			—			—			41
Loan to deferred compensation plans	—		—			—			—			—			(4,460		)	(4,460		)
Balance, September 30, 2001	92,723,993		$	927		$	519,188		$	930,264		$	23,068		$	(574,961	)	$	898,486

Balance, December 31, 2001	92,719,544		$	927		$	520,940		$	965,454		$	6,229		$	(576,517	)	$	917,033
Comprehensive income:
Net income	—		—			—			173,155			—			—			173,155
Other comprehensive income	—		—			—			—			33,978			—			33,978
Comprehensive income	—		—			—			173,155			33,978			—			207,133
Dividends on common stock	—		—			—			(64,511		)	—			—			(64,511		)
Repurchase of 2,603,558 shares	—		—			—			—			—			(127,647		)	(127,647		)
Issuance of 55,590 shares	—		—			1,079			—			—			(1,079		)	—
Cancellation of shares	(73,169	)	(1		)	(3,301		)	—			—			546			(2,756		)
Amortization of deferred compensation	—		—			28			—			—			8,164			8,192
Exercise of stock options, 51,656 shares	—		—			1,512			—			—			1,551			3,063
Change in shares held in trust for deferred compensation plans, at cost	—		—			(1,617		)	—			—			1,617			—
Repayment of loans to deferred compensation plans	—		—			—			—			—			9,783			9,783
Balance, September 30, 2002	92,646,375		$	926		$	518,641		$	1,074,098		$	40,207		$	(683,582	)	$	950,290

See accompanying notes to consolidated financial statements.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

(1) Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and notes necessary for complete financial statements in conformity with generally accepted accounting principles. The material in this Quarterly Report on Form 10-Q is written with the presumption that the users of the interim financial statements have read or have access to the most recent Annual Report on Form 10-K of TCF Financial Corporation (“TCF” or the “Company”), which contains the latest audited financial statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations as of December 31, 2001 and for the year then ended. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior period financial statements to conform to the current period presentation. For consolidated statements of cash flow purposes, cash and cash equivalents include cash and due from banks.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire year.

(2) Net Income and Goodwill Amortization

On January 1, 2002, TCF adopted Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets,” which requires that goodwill and other intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually. The following table reconciles prior period net income to an adjusted basis, which excludes goodwill amortization, for comparison purposes:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except per-share data)	2002		2001		2002		2001

Reported net income	$	58,867	$	52,890	$	173,155	$	153,127

Add back: Amortization of goodwill, net of applicable income taxes	—		1,900		—		5,701
Adjusted net income	$	58,867	$	54,790	$	173,155	$	158,828

Net income per common share:
Basic
Reported net income	$	.81	$	.70	$	2.34	$	2.01
Amortization of goodwill, net of applicable income taxes	—		.03		—		.07
Adjusted net income	$	.81	$	.73	$	2.34	$	2.08

Diluted
Reported net income	$	.80	$	.69	$	2.33	$	1.98
Amortization of goodwill, net of applicable income taxes	—		.03		—		.08
Adjusted net income	$	.80	$	.72	$	2.33	$	2.06

(3) Investments and Securities Available for Sale

Total investments and securities available for sale consist of the following:

	At September 30, 2002				At December 31, 2001
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Investments
Federal Home Loan Bank stock	$	128,855	$	128,855	$	131,181	$	131,181
Federal Reserve Bank stock	23,962		23,962		23,847		23,847
Interest-bearing deposits with banks	2,604		2,604		914		914
Total investments	155,421		155,421		155,942		155,942

Securities Available for Sale
Mortgage-backed securities:
Federal agencies	2,169,185		2,233,084		1,547,374		1,558,086
Private issuer and collateralized mortgage obligations	19,780		18,952		26,828		25,925
U.S. Government and other marketable securities	750		750		650		650
Total securities available for sale	2,189,715		2,252,786		1,574,852		1,584,661
Total investments and securities available for sale	$	2,345,136	$	2,408,207	$	1,730,794	$	1,740,603

(4) Intangible Assets and Goodwill

Intangible assets and goodwill as of September 30, 2002 are summarized as follows:

	As of September 30, 2002
(In thousands)	Gross Amount(1)		Accumulated Amortization			Net Amount(1)

Amortizable intangible assets:
Mortgage servicing rights	$	91,517	$	(29,080	)	$	62,437
Deposit base intangibles	21,180		(13,190		)	7,990
Total	$	112,697	$	(42,270	)	$	70,427

Unamortizable intangible assets:
Goodwill included in Banking Segment	$	145,462				$	145,462

(1) Net of valuation allowance for mortgage servicing rights.

Amortization expense for intangible assets was $16.3 million for the nine months ended September 30, 2002. The following table shows the estimated future amortization expense for amortized intangible assets based on existing asset balances and the interest rate environment as of September 30, 2002. The Company’s actual amortization expense in any given period may be significantly different from the estimated amounts depending upon changes in mortgage interest rates, prepayment rates and market conditions.

(In thousands)	Mortgage Servicing Rights		Deposit Base Intangibles		Total
Estimated Amortization Expense:

For the remaining three months ending December 31, 2002	$	7,077	$	418	$	7,495

For the year ended December 31, 2003	16,286		1,666		17,952
For the year ended December 31, 2004	13,029		1,662		14,691
For the year ended December 31, 2005	10,423		1,659		12,082
For the year ended December 31, 2006	8,339		1,630		9,969
For the year ended December 31, 2007	6,671		913		7,584

At January 1, 2002, management finalized its impairment testing as required under SFAS No. 142 and concluded that goodwill was not impaired. There have been no subsequent events that have occurred that would change the conclusion reached.

The activity in mortgage servicing rights and the related valuation allowance is summarized as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2002			2001			2002			2001

Gross balance at beginning of period	$	70,181		$	54,204		$	63,607		$	41,032
Purchases and originations	9,451			8,587			25,707			27,439
Amortization	(6,349		)	(4,473		)	(15,031		)	(10,153		)
Impairment write-down	—			—			(1,000		)	—
Gross balance at end of period	73,283			58,318			73,283			58,318
Allowance balance at beginning of period	4,346			1,846			5,346			946
Provision for impairment	6,500			500			6,500			1,400
Impairment write-down	—			—			(1,000		)	—
Allowance balance at end of period	10,846			2,346			10,846			2,346
Total mortgage servicing rights, net	$	62,437		$	55,972		$	62,437		$	55,972

The estimated fair value of mortgage servicing rights included in the Consolidated Statements of Financial Condition at September 30, 2002 was approximately $62.4 million. The estimated fair value of capitalized mortgage servicing rights is based on estimated cash flows discounted using rates management believes are commensurate with the risks involved. Assumptions regarding prepayments, defaults and interest rates are determined using available market information.

(5) Stockholders’ Equity

Treasury stock and other consists of the following:

(In thousands)	At September 30, 2002			At December 31, 2001

Treasury stock, at cost	$	(587,812	)	$	(463,394	)
Shares held in trust for deferred compensation plans, at cost	(70,035		)	(71,652		)
Unamortized deferred compensation	(25,735		)	(31,688		)
Loans to deferred compensation plans	—			(9,783		)
	$	(683,582	)	$	(576,517	)

TCF purchased 2.6 million shares of its common stock during the first nine months of 2002, compared with 3.6 million shares for the same 2001 period. At September 30, 2002, TCF had 4.1 million shares remaining in its stock repurchase programs authorized by the Board of Directors.

During the 2002 second quarter, TCF’s Board of Directors decided to eliminate the loan feature from its officers’ and directors’ deferred compensation plans and requested and received repayment in full of all outstanding loans totaling $9.8 million. The deferred compensation plans sold 166,665 shares of TCF common stock owned by plan participants to repay the outstanding loans to the plans.

The following tables set forth the Company’s and its subsidiary bank’s regulatory tier 1 leverage, tier 1 risk-based and total risk-based capital levels, and applicable percentages of adjusted assets, together with the excess over minimum capital requirements:

	Actual				Minimum Capital Requirement				Excess
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of September 30, 2002:
Tier 1 leverage capital
TCF Financial Corporation	$	752,488	6.54	%	$	344,936	3.00	%	$	407,552	3.54	%
TCF National Bank	750,333		6.53		344,546		3.00		405,787		3.53

Tier 1 risk-based capital
TCF Financial Corporation	752,488		9.78		307,681		4.00		444,807		5.78
TCF National Bank	750,333		9.77		307,186		4.00		443,147		5.77

Total risk-based capital
TCF Financial Corporation	828,737		10.77		615,362		8.00		213,375		2.77
TCF National Bank	826,582		10.76		614,373		8.00		212,209		2.76

	Actual				Minimum Capital Requirement				Excess
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2001:
Tier 1 leverage capital
TCF Financial Corporation	$	758,728	6.62	%	$	343,996	3.00	%	$	414,732	3.62	%
TCF National Bank	711,586		6.26		341,147		3.00		370,439		3.26

Tier 1 risk-based capital
TCF Financial Corporation	758,728		10.24		296,260		4.00		462,468		6.24
TCF National Bank	711,586		9.72		292,781		4.00		418,805		5.72

Total risk-based capital
TCF Financial Corporation	833,821		11.26		592,520		8.00		241,301		3.26
TCF National Bank	786,305		10.74		585,562		8.00		200,743		2.74

At September 30, 2002, TCF and its bank subsidiary exceeded their regulatory capital requirements and are considered “well-capitalized” under guidelines established by the Federal Reserve Board (“FRB”) and the Office of the Comptroller of the Currency (“OCC”) pursuant to the Federal Deposit Insurance Corporation Improvement Act of 1991.

(6) Derivative Instruments and Hedging Activities

All derivative instruments as defined, including derivatives embedded in other financial instruments or contracts, are recognized as either assets or liabilities in the consolidated statements of financial condition at fair value. Changes in the fair value of a derivative are recorded in the consolidated statements of income. A derivative may be designated as a hedge of an exposure to changes in fair value of an asset, liability or firm commitment or as a hedge of cash flows of forecasted transactions. The accounting for derivatives that are used as hedges is dependent on the type of hedge and requires that a hedge be highly effective in offsetting changes in the hedged risk.

TCF’s pipeline of locked residential mortgage loan commitments are considered derivatives and are recorded at fair value, with the changes in fair value recognized in gains on the sale of loans held for sale in the consolidated statements of income. TCF economically hedges its risk of changes in the fair value of locked residential mortgage loan commitments due to changes in interest rates through the use of forward sales contracts. Forward sales contracts require TCF to deliver qualifying residential mortgage loans or pools of loans at a specified future date at a specified price or yield. Such forward sales contracts hedging the pipeline of locked residential mortgage loan commitments are derivatives and are recorded at fair value, with changes in fair value recognized in gains on sales of loans held for sale. TCF also utilizes forward sales contracts to hedge its risk of changes in the fair value of its residential loans held for sale. The forward sales contracts hedging the residential loans held for sale are recorded at fair value, with changes in fair value recognized in gains on sales of loans held for sale as is the offsetting change in the fair value of hedged loans. Because the fair value of the residential loans held for sale is hedged with forward sales contracts of the same loan types, or substantially the same loan types, the hedges are highly effective at managing the risk of changing fair values of such loans. Any differences between the changes in fair value of the hedged residential loans held for sale and in the fair value of the forward sales contracts (defined as ineffectiveness under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”) are not expected to be material due to the nature of the hedging instruments and are required to be recorded in the consolidated statements of income. During the first nine months of 2002 and 2001, the ineffectiveness of the fair value hedges was recorded in gains on sales of loans and was not material. Forward mortgage loan sales commitments totaled $695.1 million at September 30, 2002 and $490.9 million at December 31, 2001.

(7) Business Segments

The following table sets forth certain information about the reported profit or loss and assets for each of TCF’s reportable segments, including a reconciliation of TCF’s consolidated totals.

(In thousands)	Banking		Leasing and Equipment Finance	Mortgage Banking		Other		Eliminations and Reclassifications		Consolidated
At or For the Three Months Ended September 30, 2002

Revenues from external customers:
Interest income	$	158,380	20,945	3,080		1		—		$	182,406
Non-interest income	93,467		13,136	(1,373	)	7		—		105,237
Total	$	251,847	34,081	1,707		8		—		$	287,643

Net interest income	$	108,750	10,011	4,585		(11	)	434		$	123,769
Provision for credit losses	2,288		1,783	—		—		—		4,071
Non-interest income	93,467		13,134	(940	)	23,754		(24,178	)	105,237
Non-interest expense	119,592		10,333	5,161		22,881		(23,744	)	134,223
Income tax expense (benefit)	28,479		3,951	(507	)	(78	)	—		31,845
Net income (loss)	$	51,858	7,078	(1,009	)	940		—		$	58,867

Total assets	$	11,551,138	1,057,917	396,041		79,128		(1,113,893	)	$	11,970,331

At or For the Three Months Ended September 30, 2001

Revenues from external customers:
Interest income	$	179,597	21,837	4,028		83		—		$	205,545
Non-interest income	79,926		11,720	3,632		17		—		95,295
Total	$	259,523	33,557	7,660		100		—		$	300,840

Net interest income	$	108,017	9,583	3,890		110		807		$	122,407
Provision for credit losses	1,631		4,445	—		—		—		6,076
Non-interest income	79,926		11,720	4,439		24,542		(25,332	)	95,295
Amortization of goodwill	1,838		106	—		—		—		1,944
Other non-interest expense	110,525		9,084	5,407		24,224		(24,525	)	124,715
Income tax expense	27,862		2,896	1,105		214		—		32,077
Net income	$	46,087	4,772	1,817		214		—		$	52,890

Total assets	$	11,353,242	967,154	308,703		75,281		(981,027	)	$	11,723,353

(In thousands)	Banking		Leasing and Equipment Finance	Mortgage Banking	Other		Eliminations and Reclassifications		Consolidated
At or For the Nine Months Ended September 30, 2002

Revenues from external customers:
Interest income	$	476,584	64,398	10,029	—		—		$	551,011
Non-interest income	263,828		39,771	5,111	1,245		—		309,955
Total	$	740,412	104,169	15,140	1,245		—		$	860,966

Net interest income	$	327,037	30,734	13,639	(28	)	1,220		$	372,602
Provision for credit losses	11,044		6,895	—	—		—		17,939
Non-interest income	263,828		39,950	6,331	71,452		(71,606	)	309,955
Non-interest expense	349,265		30,023	17,026	71,478		(70,386	)	397,406
Income tax expense (benefit)	81,625		12,278	1,060	(906	)	—		94,057
Net income	$	148,931	21,488	1,884	852		—		$	173,155

At or For the Nine Months Ended September 30, 2001

Revenues from external customers:
Interest income	$	552,553	67,822	10,204	253		—		$	630,832
Non-interest income	231,010		32,950	10,986	56		—		275,002
Total	$	783,563	100,772	21,190	309		—		$	905,834

Net interest income	$	312,565	30,079	9,571	444		2,817		$	355,476
Provision for credit losses	4,076		9,847	—	—		—		13,923
Non-interest income	231,010		32,950	13,801	71,247		(74,006	)	275,002
Amortization of goodwill	5,513		320	—	—		—		5,833
Other non-interest expense	318,528		28,257	15,301	73,838		(71,189	)	364,735
Income tax expense (benefit)	81,257		9,296	3,052	(745	)	—		92,860
Net income (loss)	$	134,201	15,309	5,019	(1,402	)	—		$	153,127

(8) Earnings Per Common Share

The computation of basic and diluted earnings per share is presented in the following table:

	Three Months Ended September 30,						Nine Months Ended September 30,
(Dollars in thousands, except per-share data)	2002			2001			2002			2001

Basic Earnings Per Common Share

Net income	$	58,867		$	52,890		$	173,155		$	153,127

Weighted average shares outstanding	74,706,152			77,847,635			75,639,151			78,675,256
Unvested restricted stock grants(1)	(1,644,604		)	(2,397,729		)	(1,645,514		)	(2,386,396		)
Weighted average common shares outstanding for basic earnings per common share	73,061,548			75,449,906			73,993,637			76,288,860

Basic earnings per common share	$	.81		$	.70		$	2.34		$	2.01

Diluted Earnings Per Common Share

Net income	$	58,867		$	52,890		$	173,155		$	153,127

Weighted average number of common shares outstanding adjusted for effect of dilutive securities:
Weighted average common shares outstanding used in basic earnings per common share calculation	73,061,548			75,449,906			73,993,637			76,288,860
Net dilutive effect of:
Stock option plans	118,063			159,083			132,267			151,264
Restricted stock plans(1)	222,436			869,151			217,941			839,537
	73,402,047			76,478,140			74,343,845			77,279,661

Diluted earnings per common share	$	.80		$	.69		$	2.33		$	1.98

(1) At September 30, 2002 and September 30, 2001, there were 1,145,000 shares and 1,135,000 shares, respectively, of performance-based restricted stock granted to certain executive officers which will vest only if certain earnings per share goals are achieved by 2008. Failure to achieve the goals will result in all or a portion of the shares being forfeited. In accordance with SFAS No. 128, “Earnings per Share,” these shares have been deducted from weighted average shares outstanding used for the computation of basic and diluted earnings per common share, as all necessary conditions for inclusion have not been satisfied. The remaining unvested restricted stock grants vest over specified time periods, and are included in the computation of diluted earnings per common share in accordance with the treasury stock method prescribed in SFAS No. 128.

(9) Comprehensive Income

Comprehensive income is the total of net income and other comprehensive income (loss), which for TCF is comprised entirely of unrealized gains and losses on investment securities available for sale. The following table summarizes the components of comprehensive income:

	Three Months Ended September 30,					Nine Months Ended September 30,
(In thousands)	2002			2001		2002			2001
Net income	$	58,867		$	52,890	$	173,155		$	153,127

Other comprehensive income before tax:
Unrealized holding gains arising during the period on securities available for sale	29,368			53,778		61,968			51,952

Reclassification adjustment for gains included in net income	(2,662		)	—		(8,706		)	—

Income tax expense	9,682			19,630		19,284			19,016

Total other comprehensive income, net of tax	17,024			34,148		33,978			32,936

Comprehensive income	$	75,891		$	87,038	$	207,133		$	186,063

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Item 2. – Management's Discussion and Analysis of Financial

Condition and Results of Operations

CORPORATE PROFILE

TCF is a national financial holding company of one federally chartered bank, TCF National Bank. After receiving regulatory approval, TCF merged its Colorado bank charter into TCF National Bank on July 26, 2002. The merger of the bank charters did not significantly change TCF’s operations. TCF National Bank, headquartered in Minnesota, had 384 banking offices in Minnesota, Illinois, Michigan, Wisconsin, Colorado and Indiana at September 30, 2002. Other affiliates provide leasing and equipment finance, mortgage banking, brokerage and investment and insurance sales.

TCF provides convenient financial services through multiple channels to customers located primarily in the Midwest. TCF has developed products and services designed to meet the needs of consumers. The Company focuses on attracting and retaining customers through service and convenience, including branches that are open seven days a week and on most holidays, extensive full-service supermarket branch and automated teller machine (“ATM”) networks, and telephone and Internet banking. TCF’s philosophy is to generate top-line revenue growth (net interest income and fees and other revenues) through business lines that emphasize higher yielding assets and lower interest-cost deposits. The Company’s growth strategies include new branch expansion and the development of new products and services designed to build on its core businesses and expand into complementary products and services through emerging businesses and strategic initiatives.

TCF’s core businesses are comprised of mature traditional bank branches, EXPRESS TELLER^® ATMs, and commercial, consumer and mortgage lending. TCF emphasizes the “Totally Free” checking account as its anchor account, which provides opportunities to cross sell other convenience products and services and generate additional fee income. TCF’s strategy is to originate high credit quality, primarily secured loans and earn profits through lower interest-cost deposits. Commercial loans are generally made on local properties or to local customers, and are virtually all secured. TCF’s largest core lending business is its consumer home equity loan operation, which offers fixed- and variable-rate closed-end loans and lines of credit.

TCF’s emerging businesses and products are comprised of supermarket bank branches, including supermarket consumer lending, leasing and equipment finance, VISA^® debit cards, and Internet and college campus banking. TCF’s most significant de novo strategy has been its supermarket branch expansion. The Company opened its first supermarket branch in 1988, and now has 241 supermarket branches, with $1.5 billion in deposits. TCF has the nation’s 4^th largest supermarket banking branch system. The success of TCF’s branch expansion is dependent on the continued long-term success of branch banking as well as the continued success and viability of TCF’s supermarket partners and TCF’s ability to maintain leases or license agreements for its supermarket branch locations. TCF is subject to the risk, among others, that its license for a location or locations will terminate upon the sale of that location or locations by its supermarket partner. See “Consolidated Financial Condition Analysis – Deposits.” TCF entered the leasing business through its 1997 acquisition of Winthrop Resources Corporation (“Winthrop”), a leasing company that leases computers and other business-essential equipment to companies nationwide. The Company expanded its leasing operations in September 1999 through TCF Leasing, Inc. (“TCF Leasing”), a de novo general equipment leasing business. See “Consolidated Financial Condition Analysis – Loans and Leases.” The Company’s VISA debit card program has also grown significantly since its inception in 1996. According to a June 30, 2002 statistical report issued by VISA, TCF, with approximately 1.4 million cards outstanding, was the 13^th largest VISA debit card issuer in the United States, based on the number of cards outstanding, and the 11^th largest based on sales volume of $725.9 million for the 2002 second quarter.

TCF’s strategic initiatives complement the Company’s core and emerging businesses. TCF’s new products have been significant contributors to the growth in fees and other revenues generated by checking accounts and loan products. Currently, TCF’s strategic initiatives include continued investment in new branch expansion and new loan and deposit products, including card products designed to provide additional convenience to deposit and loan customers, and pursuing business opportunities generated by its EXPRESS TELLER^® ATM network. In June 2001, the Company launched a securities brokerage operation, TCF Express Trade, Inc. The Company is also planning to launch additional insurance and investment products during the upcoming year.

TCF does not have any unconsolidated subsidiaries, partnerships, special purpose entities or other forms of off-balance-sheet borrowings. The Company does not use derivatives to manage interest rate risk. TCF has not issued trust preferred or other quasi-equity instruments. The Company does not report “pro forma earnings.” TCF does not have foreign loans or other foreign exposures and has not purchased any bank owned life insurance (BOLI). The Company adopted the fair value method of accounting for stock compensation pursuant to SFAS No. 123 “Accounting for Stock-Based Compensation” in 2000. TCF has used stock options as a form of employee compensation only to a limited extent, and the number of stock options outstanding as a percentage of total shares outstanding is less than .5%.

RESULTS OF OPERATIONS

TCF reported diluted earnings per common share of 80 cents and $2.33 for the third quarter and first nine months of 2002, respectively, compared with 69 cents and $1.98, for the same 2001 periods. Net income was $58.9 million and $173.2 million for the third quarter and first nine months of 2002, respectively, compared with $52.9 million and $153.1 million for the same 2001 periods. The first nine months of 2002 results included a $1.3 million after-tax gain on sale of a branch, or 2 cents per diluted common share, compared with a $2.1 million after-tax gain on sale of a branch, or 3 cents per common share for the same period in 2001. For the third quarter of 2002, return on average assets was 2.03%, compared with 1.81% for the same 2001 period and return on average realized common equity was 26.19%, compared with 23.68% for the same 2001 period. For the first nine months of 2002, return on average assets and return on average realized common equity were 2.03% and 25.66%, respectively, compared with 1.77% and 22.80% for the same 2001 period. In 2002, new accounting rules under generally accepted accounting principles (“GAAP”) eliminated the amortization of goodwill. Goodwill amortization reduced net income in the third quarter and first nine months of 2001 by $1.9 million or 3 cents per diluted common share and $5.7 million or 8 cents per diluted common share, respectively.

Operating Segment Results

BANKING, comprised of deposits and investment products, commercial banking, small business banking, private banking, consumer lending, residential lending and treasury services, reported net income of $51.9 million and $148.9 million for the third quarter and first nine months of 2002, up 12.5% and 11% from $46.1 million and $134.2 million for the same 2001 periods. Net interest income for the third quarter and first nine months of 2002 was $108.8 million and $327 million, respectively, up from $108 million and $312.6 million for the same 2001 periods. The provision for credit losses totaled $2.3 million and $11 million for the third quarter and first nine months of 2002, respectively, up from $1.6 million and $4.1 million for the same 2001 periods. The increase in provision for credit losses is primarily a result of increased net charge-offs and growth in the loan portfolio. Non-interest income (excluding gains on sales of branches and securities available for sale) totaled $90.8 million and $253.2 million for the third quarter and first nine months of 2002, respectively, up 13.6% and 11.2% from $79.9 million and $227.7 million for the same 2001 periods. This improvement was driven by increased fees, service charges and debit card and ATM revenues generated by TCF’s expanding branch network and customer base. Non-interest expense (excluding amortization of goodwill) totaled $119.6 million and $349.3 million for the third quarter and first nine months of 2002, respectively, up 8.2% and 9.6% from $110.5 million and $318.5 million for the same 2001 periods. The increases were primarily due to the costs associated with new branch expansion, and the addition of lenders and sales representatives in banking operations.

TCF has significantly expanded its retail banking franchise in recent periods and had 384 retail banking branches at September 30, 2002. Since January 1, 1998, TCF has opened 208 new branches, of which 187 were supermarket branches. See “Consolidated Financial Condition Analysis – Deposits.” During the third quarter of 2002, TCF continued expanding its retail banking franchise by opening seven new branches. During the fourth quarter of 2002, TCF anticipates opening nine more branches consisting of seven traditional branches and two supermarket branches. For 2003, TCF anticipates opening 25 new branches consisting of 19 new traditional branches and six new supermarket branches. On October 2, 2002, one Colorado supermarket branch was closed involuntarily when TCF’s supermarket partner in Colorado sold a store and discontinued TCF’s license agreement for this location.

LEASING AND EQUIPMENT FINANCE, an operating segment comprised of TCF’s wholly owned subsidiaries Winthrop and TCF Leasing, provides a broad range of comprehensive lease and equipment finance products. This operating segment reported net income of $7.1 million and $21.5 million for the third quarter and first nine months of 2002, respectively, up 48.3% and 40.4% from $4.8 million and $15.3 million, for the same 2001 periods. Net interest income for the third quarter and first nine months of 2002 was $10 million and $30.7 million, respectively, up 4.5% and 2.2% from $9.6 million and $30.1 million from the same 2001 periods. The provision for credit losses for this operating segment totaled $1.8 million and $6.9 million for the third quarter and first nine months of 2002, respectively, down from $4.4 million and $9.8 million for the same 2001 periods, primarily as a result of decreased delinquencies. Non-interest income totaled $13.1 million and $40 million for the third quarter and first nine months of 2002, respectively, up 12.1% and 21.2% from $11.7 million and $33 million for the same 2001 periods. The volume and type of these transactions and resulting revenues fluctuate from period to period based on customer driven factors not within the control of TCF. On a year-to-date basis, the increase in non-interest income is primarily due to higher levels of sales-type lease transactions. Non-interest expense (excluding amortization of goodwill) totaled $10.3 million and $30 million for the third quarter and first nine months of 2002, respectively, up 13.7% and 6.2% from $9.1 million and $28.3 million for the same 2001 periods. The year-to-date increase was primarily a result of the growth experienced in TCF Leasing.

MORTGAGE BANKING activities include the origination and purchase of residential mortgage loans, generally for sale to third parties with servicing retained. This operating segment reported a net loss of $1 million and net income of $1.9 million for the third quarter and first nine months of 2002, respectively, compared with net income of $1.8 million and $5 million for the same 2001 periods. Non-interest income was a negative $940,000 and a positive $6.3 million for the third quarter and first nine months of 2002, respectively, down from $4.4 million and $13.8 million for the same 2001 periods. TCF’s mortgage banking operations funded $749.4 million in loans during the third quarter of 2002, up from $701.9 million in the third quarter of 2001, primarily as a result of a resurgence in refinancing activity driven by lower mortgage interest rates. Mortgage applications in process (mortgage pipeline) increased $467.7 million from June 30, 2002 to $895.6 million at September 30, 2002. The increased refinance activity led to sharply higher prepayments and assumed future prepayments in TCF’s servicing portfolio and led to impairment and amortization expense on mortgage servicing rights of $12.8 million for the third quarter of 2002, up from $5 million during the third quarter of 2001. The increased amortization and impairment were partially offset by the increased loan production activity and related increase in gains on sales of loans. See Note 4 of Notes to the Consolidated Financial Statements for further discussion. Non-interest expense totaled $5.2 million and $17 million for the third quarter and first nine months of 2002, respectively, down 4.5% and up 11.3% from $5.4 million and $15.3 million for the same 2001 periods. Contributing to the year-to-date increase in non-interest expense were increased expenses resulting from the higher level of loan prepayments and increased compensation expense due to the addition of loan officers.

Consolidated Net Interest Income

Net interest income for the third quarter of 2002 was $123.8 million, compared with $122.4 million for the third quarter of 2001 and $124.3 million for the 2002 second quarter. The net interest margin for the third quarter 2002 was 4.68%, compared with 4.55% for the same 2001 period and 4.76% for the second quarter of 2002. TCF’s third quarter 2002 net interest income increased $1.4 million over the comparable 2001 period, $8.3 million due to volume changes, partially offset by a $6.9 million decrease due to rate changes. Net interest income for the first nine months of 2002 was $372.6 million, compared with $355.5 million for the same 2001 period. The net interest margin for the first nine months of 2002 was 4.76%, compared with 4.43% for the same period of 2001. Net interest income for the

first nine months of 2002 improved by $9.1 million due to volume changes and $8.0 million due to rate changes. The improvement in net interest income and net interest margin during the third quarter and first nine months of 2002 was primarily due to growth in average low-cost deposits (checking, savings and money market) up $1.1 billion, or 24.9%, during the third quarter of 2002 and $940.9 million, or 22.3%, during the first nine months of 2002 coupled with growth in average higher-yielding loans and leases (commercial, consumer and leasing and equipment finance) of $752.8 million, or 14.4%, during the third quarter and $711.6 million, or 14%, during the first nine months of 2002 and lower borrowing costs. These increases were partially offset by decreases of $901.5 million, or 18.2%, and $977.1 million, or 19.3%, for the third quarter and first nine months of 2002, respectively, in lower-yielding residential mortgages and mortgage-backed securities.

Changes in net interest income are dependent upon the movement of interest rates, the volume and mix of interest-earning assets and interest-bearing liabilities, and the level of non-performing assets. Achieving net interest margin growth is dependent on TCF’s ability to generate higher-yielding assets and lower-cost retail deposits. As a result of customer demand for variable-rate products, TCF’s variable-rate commercial and consumer loans (excluding loans at their floor rate) increased $745 million since December 31, 2001. The net impact of these changes in interest-bearing assets and liabilities has positioned TCF to be more asset sensitive (i.e. more assets than liabilities will be maturing or repricing during the next twelve months). Although this positive gap position will benefit TCF in a rising rate environment, if interest rates remain at current levels or fall further, net interest income may decline and the net interest margin may compress. Competition for checking, savings and money market deposits, important sources of lower-cost funds for TCF, is intense. TCF may also experience compression in its net interest margin if the rates paid on deposits increase or as a result of new pricing strategies and lower rates offered on loan products in order to respond to competitive conditions. See “Market Risk – Interest-Rate Risk” and “Consolidated Financial Condition Analysis – Deposits.”

The following rate/volume analysis details increases (decreases) in net interest income resulting from interest rate and volume changes during the third quarter and first nine months of 2002, as compared with the same periods last year. Changes attributable to changes in the mix of interest-bearing assets and of interest-bearing liabilities have been allocated proportionately to the change due to volume and the change due to rate.

	Three Months Ended September 30, 2002 Versus Same Period in 2001									Nine Months Ended September 30, 2002 Versus Same Period in 2001
	Increase (Decrease) Due to									Increase (Decrease) Due to
(In thousands)	Volume			Rate			Total			Volume			Rate			Total
Investments	$	(182	)	$	(280	)	$	(462	)	$	(427	)	$	(1,348	)	$	(1,775	)
Securities available for sale	2,495			(907		)	1,588			512			(1,758		)	(1,246		)
Loans held for sale	(101		)	(1,460		)	(1,561		)	787			(3,049		)	(2,262		)
Loans and leases:
Consumer	8,062			(9,243		)	(1,181		)	13,107			(21,429		)	(8,322		)
Commercial real estate	4,647			(3,845		)	802			10,396			(8,716		)	1,680
Commercial business	498			(1,919		)	(1,421		)	677			(6,931		)	(6,254		)
Leasing and equipment finance	1,698			(2,590		)	(892		)	3,086			(6,510		)	(3,424		)
Subtotal	14,905			(17,597		)	(2,692		)	27,266			(43,586		)	(16,320		)
Residential real estate	(18,016		)	(1,996		)	(20,012		)	(51,422		)	(6,796		)	(58,218		)
Total loans and leases	(3,111		)	(19,593		)	(22,704		)	(24,156		)	(50,382		)	(74,538		)
Total interest income	(899		)	(22,240		)	(23,139		)	(23,284		)	(56,537		)	(79,821		)
Deposits:
Checking	111			(615		)	(504		)	170			(2,028		)	(1,858		)
Savings	1,442			1,855			3,297			3,379			1,856			5,235
Money market	(40		)	(2,528		)	(2,568		)	294			(10,215		)	(9,921		)
Subtotal	1,513			(1,288		)	225			3,843			(10,387		)	(6,544		)
Certificates	(5,221		)	(8,771		)	(13,992		)	(17,636		)	(34,412		)	(52,048		)
Total deposits	(3,708		)	(10,059		)	(13,767		)	(13,793		)	(44,799		)	(58,592		)
Borrowings:
Short-term borrowings	(4,911		)	(4,003		)	(8,914		)	(15,251		)	(16,465		)	(31,716		)
Long-term borrowings	(544		)	(1,276		)	(1,820		)	(3,317		)	(3,322		)	(6,639		)
Total borrowings	(5,455		)	(5,279		)	(10,734		)	(18,568		)	(19,787		)	(38,355		)
Total interest expense	(9,163		)	(15,338		)	(24,501		)	(32,361		)	(64,586		)	(96,947		)
Net interest income	$	8,264		$	(6,902	)	$	1,362		$	9,077		$	8,049		$	17,126

Consolidated Provision for Credit Losses

TCF provided $4.1 million and $17.9 million for credit losses in the third quarter and first nine months of 2002, respectively, compared with $6.1 million and $13.9 million for the same periods in 2001. Net loan and lease charge-offs were $3.1 million and $16.8 million, or .15% (annualized) and .28% (annualized) of average loans and leases in the third quarter and the first nine months of 2002, respectively, compared with $2.1 million and $7 million, or .10% (annualized) and .11% (annualized) of average loans and leases for the same 2001 periods. The increase in the first nine months of 2002 in the provision and net loan and lease charge-offs from the comparable 2001 period, reflects the impact of the growth in the consumer, commercial business, commercial real estate and leasing and equipment finance portfolios, coupled with increased charge-offs in these portfolios. Commercial lending net charge-offs were $407,000 and $5.6 million during the third quarter and first nine months of 2002, respectively, compared with net charge-offs of $22,000 and $83,000 for the same periods in 2001. Included in the commercial lending charge-offs for the first nine months of 2002, was $4 million related to $7.4 million of loans to a banking customer who is dependent on the transportation industry, which has been severely impacted by the economic slowdown. Leasing and equipment finance net charge-offs were $1.6 million and $6.2 million during the third quarter and first nine months of 2002, respectively, compared with net charge-offs of $1.5 million and $5.2 million during the same periods in 2001. The provision for credit losses is calculated as part of the determination of the allowance for loan and lease losses. The determination of the allowance for loan and lease losses and the related provision for credit

losses is a critical accounting policy which involves a number of factors such as net charge-offs, delinquencies in the loan and lease portfolio, general economic conditions and management’s assessment of credit risk in the current loan and lease portfolio. The allowance for loan and lease losses totaled $76.2 million at September 30, 2002, compared with $75 million at December 31, 2001. See “Consolidated Financial Condition Analysis – Allowance for Loan and Lease Losses.”

Consolidated Non-Interest Income

Non-interest income is a significant source of revenues for TCF and an important factor in TCF’s results of operations. Providing a wide range of retail banking services is an integral component of TCF’s business philosophy and a major strategy for generating additional non-interest income. Excluding gains on sales of branches and securities available for sale, non-interest income increased $7.3 million, or 7.6%, to $102.6 million for the third quarter of 2002, compared with $95.3 million for the same period in 2001. This increase was driven by increased fees, service charges, debit card and ATM revenues and investment and insurance revenues generated by TCF’s expanding branch network and customer base. On the same basis, non-interest income increased $27.6 million, or 10.2%, to $299.3 million for the first nine months of 2002, compared with $271.7 million for the same period in 2001.

Fees and service charges increased $10 million, or 20.4%, to $59 million for the third quarter of 2002, compared with $49.1 million for the third quarter of 2001. On the same basis, fees and service charge revenues increased $21.1 million, or 14.8%, to $163.7 million for the first nine months of 2002, compared with $142.6 million for the same period in 2001. These increases reflect the impact of the investment in new branch expansion and the increase in the number of retail checking accounts. TCF added over 106,000 checking accounts during the past twelve months including 24,000 in the third quarter of 2002, and had 1,337,722 accounts at September 30, 2002.

Debit card and ATM revenues totaled $23.9 million and $68 million for the third quarter and first nine months of 2002, respectively, representing an increase of 3.3% and 6.1% from $23.1 million and $64.1 million for the same 2001 periods. These increases reflect TCF’s continuing efforts to provide banking services through its EXPRESS TELLER^® ATM network and TCF Express Debit Cards. Debit card revenues consist primarily of Express Card interchange fees received for handling off-line customer transactions (signature based) processed through the VISA^® association system. The ATM interchange fees received for handling on-line customer transactions (PIN based), which are processed through various regional ATM networks, are included in ATM revenues. Express Card interchange fees are higher than ATM interchange fees. TCF has begun to experience a shift in sales volumes from off-line transactions toward on-line transactions. TCF’s efforts to increase the number of cards outstanding and the number of customer transactions should lessen the impact on future debit card and ATM revenues of a continued change in mix of transactions. Included in debit card and ATM revenues are Express Card interchange fees of $11.8 million and $33.4 million, compared with $10.1 million and $27.5 million for the third quarter and first nine months ended September 30, 2002 and 2001, respectively. The significant increase in these fees reflects an increase in the distribution of Express Cards, and an increase in utilization which is promoted by TCF’s phone card program rewarding customers with long distance minutes based on usage. While TCF is not a party to the pending debit card class action litigation against VISA^®, USA and Mastercard, a ruling against VISA^® and Mastercard could also have an adverse impact on future debit card revenues for TCF.

The following table sets forth information about TCF’s ATM network and related cards:

	At September 30,						Change
(Dollars in thousands)	2002			2001			Amount			%

Express Debit Cards	1,358,000			1,179,000			179,000			15.2	%
Other ATM Cards	156,000			164,000			(8,000		)	(4.9	)
Total EXPRESS TELLER^® ATM cards outstanding	1,514,000			1,343,000			171,000			12.7

Number of EXPRESS TELLER^® ATM’s(1)	1,151			1,355			(204		)	(15.1	)

Percentage of customers with Express Cards who were active users	53.0		%	50.8		%	2.2		%

Average number of transactions per month on active Express Cards for:
the quarter ended	11.8			11.2			0.6			5.4
the nine months ended	11.6			10.7			0.9			8.4

TCF Express Card off-line sales volume for:
the quarter ended	$	749,461		$	618,323		$	131,138		21.2
the nine months ended	2,151,484			1,743,300			408,184			23.4

(1) During the first quarter of 2002, the contracts covering 256 EXPRESS TELLER^® ATM’s expired and were not renewed.

Also included in debit card and ATM revenues were ATM revenues of $12 million and $34.6 million for the third quarter and first nine months of 2002, respectively, compared with $12.2 million and $34.5 million for the same 2001 periods.

Leasing and equipment finance revenues totaled $13.1 million and $39.8 million for the third quarter and first nine months of 2002, respectively, compared with $11.7 million and $33 million for the same 2001 periods. The volume and type of these transactions and resulting revenues fluctuate from period to period based on customer-driven factors not within the control of TCF. The increase in leasing revenues for the third quarter and first nine months of 2002, respectively, was attributable to increases of $1.6 million and $7.7 million from sales-type lease revenues, partially offset by decreases of $336,000 and $1.2 million from operating lease revenues.

The following table sets forth information about mortgage banking revenues:

	Three Months Ended September 30,											Nine Months Ended September 30,
							Change										Change
(Dollars in thousands)	2002			2001			$			%		2002			2001		$			%

Servicing income	$	5,358		$	4,316		$	1,042		24.1	%	$	14,849		$	12,256	$	2,593		21.2	%
Less:
Mortgage servicing amortization	6,349			4,473			1,876			41.9		15,031			10,153		4,878			48.0
Mortgage servicing impairment	6,500			500			6,000			N.M	.	6,500			1,400		5,100			N.M	.
Net servicing income (loss)	(7,491		)	(657		)	(6,834		)	N.M	.	(6,682		)	703		(7,385		)	N.M	.
Gains on sales of loans	5,063			3,277			1,786			54.5		9,102			7,244		1,858			25.6
Other income	1,055			1,012			43			4.2		2,691			3,039		(348		)	(11.5	)
Total mortgage banking	$	(1,373	)	$	3,632		$	(5,005	)	N.M.		$	5,111		$	10,986	$	(5,875	)	(53.5	)

N.M. Not meaningful.

Mortgage banking revenue decreased $5 million and was a negative $1.4 million in the third quarter of 2002, compared with revenue of $3.6 million for the same 2001 period. For the first nine months of 2002, mortgage-banking revenue decreased $5.9 million, or 53.5%, and totaled $5.1 million, compared with $11 million for the same 2001 period.

The following table sets forth further information about mortgage banking:

(Dollars in thousands)	September 30, 2002			December 31, 2001			Change
(Dollars in thousands)	September 30, 2002			December 31, 2001			$			%

Third party servicing portfolio	$	5,235,636		$	4,679,355		$	556,281		11.9	%
Weighted average note rate	6.90		%	7.13		%	(.23		)%

Mortgage pipeline	$	895,592		$	606,676		$	288,916		47.6

Capitalized mortgage servicing rights, net	$	62,437		$	58,261		$	4,176		7.2
Mortgage servicing rights as a percentage of servicing portfolio	1.19		%	1.25		%	(.06		)%

Average service fee (basis points)	33.1		bps	32.6		bps	.5		bps

Mortgage servicing rights as a multiple of average service fee	3.6		X	3.8		X	(0.2		)X	(5.3	)

Mortgage banking revenues are impacted by the amount of amortization and impairment of mortgage servicing rights. The capitalization, amortization and impairment of mortgage servicing rights are critical accounting policies to TCF and are subject to significant estimates. These estimates are based upon loan types, note rates and prepayment assumptions for the overall portfolio. Changes in the mix of loans, interest rates, defaults or prepayment speeds may have a material effect on the amortization amount and possible impairment in valuation. In a declining interest rate environment, prepayment speed assumptions will increase and result in an acceleration in the amortization of the mortgage servicing rights as the underlying portfolio declines and also may result in impairment as the value of the mortgage servicing rights declines. TCF evaluates its capitalized mortgage servicing rights for impairment on a quarterly basis. TCF experienced increased refinance activity during the third quarter driven by lower mortgage interest rates, which led to higher prepayments and assumed prepayments in TCF’s servicing portfolio and increased amortization of mortgage servicing rights. Additionally, in light of increased anticipated prepayments, TCF recognized $6.5 million of impairment on the mortgage servicing rights asset for the third quarter and first nine months of 2002, compared with $500,000 for the third quarter and $1.4 million for the first nine months of 2001, respectively. However, increased mortgage loan production activity and the related increase in gains on sales of loans partially offset the impairment during the third quarter of 2002. See Note 4 of Notes to the Consolidated Financial Statements for further discussion.

The following table summarizes the prepayment speed assumptions used in the determination of the valuation and amortization of mortgage servicing rights as of September 30, 2002:

(Dollars in thousands)	Unpaid Balance		Prepayment Speed Assumption (annual rate)		Weighted Average Life (in years)
Interest Rate Tranche	Unpaid Balance		Prepayment Speed Assumption (annual rate)		Weighted Average Life (in years)
0 to 7.00%	$	3,487,831	19.6	%	5.3
7.01 to 8.00%	1,566,431		28.8		3.3
8.01 to 9.00%	163,493		33.2		2.6
9.01% to higher	17,881		29.5		2.8
	$	5,235,636	22.9		4.5

At September 30, 2002, the sensitivity of the current fair value of mortgage servicing rights to a hypothetical immediate 10% and 25% adverse change in prepayment speed assumptions is as follows:

(Dollars in millions)	At September 30, 2002

Fair value of mortgage servicing rights	$	62.4
Weighted-average life (in years)	4.5
Weighted-average prepayment speed assumption (annual rate)	22.9		%
Weighted-average discount rate	9.9		%
Impact on fair value of 10% adverse change in prepayment speed assumptions	$	(3.2	)
Impact on fair value of 25% adverse change in prepayment speed assumptions	$	(7.4	)

These sensitivities are theoretical and should be used with caution. As the figures indicate, changes in fair value based on a given variation in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in the above table, the effect of a variation in a particular assumption on the fair value of the mortgage servicing rights is calculated independently without changing any other assumptions. In reality, changes in one factor may result in changes in another (for example, changes in prepayment speed estimates could result in changes in discount rates or market interest rates), which might either magnify or counteract the sensitivities.

During the first quarter of 2002, TCF recognized a gain of $2 million on the sale of one Michigan branch with $17.1 million in deposits, compared with a gain of $3.3 million on the sale of one Michigan branch with $30 million in deposits for the same 2001 period. No additional branch sales are anticipated in 2002.

During the third quarter and first nine months of 2002, gains on sales of securities available for sale totaled $2.7 million and $8.7 million, respectively, on sales of $82.2 million and $346.7 million, respectively, of mortgage-backed securities. There were no sales of securities available for sale during the same periods of 2001.

Consolidated Non-Interest Expense

Non-interest expense totaled $134.2 million for the third quarter 2002, up 6% from $126.7 million for the same 2001 period. For the first nine months of 2002, non-interest expense totaled $397.4 million, up 7.2% from $370.6 million for the same 2001 period. Compensation and employee benefits expense totaled $73.2 million and $218.7 million for the 2002 third quarter and first nine months, respectively, compared with $68.3 million and $198.7 million for the comparable periods in 2001. The increases were primarily due to costs associated with new branch expansion.

Other non-interest expense totaled $34.8 million and $100.6 million for the third quarter and first nine months of 2002, respectively, reflecting increases of 11.3% and 10.7% from $31.3 million and $90.9 million for the same 2001 periods, primarily the result of increased expenses associated with expanded retail banking and leasing operations and the higher levels of loan prepayments and loan activity in the mortgage banking area.

Income Taxes

TCF recorded income tax expense of $31.8 million and $94.1 million for the third quarter and the first nine months of 2002, respectively, or 35.11% and 35.20%, respectively, of income before income tax expense, compared with $32.1 million and $92.9 million, or 37.75% of income before income tax expense, for the comparable 2001 periods. The lower effective tax rate in 2002 primarily reflects the effect of the change in accounting for goodwill, lower state income taxes, resolution of uncertainties during tax examinations, and the reduced effect of non-deductible expenses as a percentage of pre-tax net income.

TCF has Real Estate Investment Trusts (“REITs”) and related companies, that acquire, hold and manage mortgage assets and other authorized investments to generate income. These companies are consolidated with TCF National Bank and are therefore included in the consolidated financial statements of TCF Financial Corporation. The REITs must meet specific provisions of the Internal Revenue Code to continue to qualify as a REIT. Two specific provisions are an income test and an asset test. At least 75% of each REIT’s gross income, excluding gross income from prohibited transactions, for each taxable year must be derived directly or indirectly from investments relating to real property or mortgages on real property. Additionally, at least 75% of each REIT’s assets must be represented by real estate assets. At September 30, 2002, TCF’s REITs had qualifying income in each REIT of at least 97.40% and qualifying assets in each REIT of at least 80.17%. If these companies fail to meet any of the required provisions of state and Federal tax laws, the resulting tax consequences would increase TCF’s effective tax rate.

The determination of current and deferred income taxes is a critical accounting policy which is based on complex analyses of many factors including interpretation of Federal and state income tax laws, the differences between tax and financial reporting basis of assets and liabilities (temporary differences), estimates of amounts due or owed such as the timing of reversal of temporary differences and current financial accounting standards. Additionally, there can be no assurances that estimates and interpretations used in determining income tax liabilities may not be challenged by state and Federal taxing authorities. Actual results could differ significantly from the estimates and interpretations used in determining the current and deferred income tax liabilities. TCF does not participate in any tax shelters as currently defined under the Internal Revenue Code and related Regulations.

CONSOLIDATED FINANCIAL CONDITION ANALYSIS

Investments and Securities Available for Sale

During the first nine months of 2002, TCF took advantage of market conditions and sold $346.7 million of mortgage-backed securities and recognized gains of $8.7 million on the sales. There were no sales of securities available for sale during the same 2001 period. The Company purchased $1.4 billion and $550 million of mortgage-backed securities during the first nine months of 2002 and 2001, respectively, to replace the prepayments of residential real estate loans and mortgage-backed securities.

Loans and Leases

The following table sets forth information about loans and leases held in TCF’s portfolio, excluding loans held for sale:

(Dollars in thousands)	At September 30, 2002			At December 31, 2001			Change from December 31, 2001

Consumer:
Home equity	$	2,819,988		$	2,443,788		15.4	%
Other secured	34,690			43,433			(20.1	)
Unsecured	17,850			22,112			(19.3	)
	2,872,528			2,509,333			14.5

Commercial:
Commercial real estate:
Permanent	1,594,074			1,444,484			10.4
Construction and development	187,753			177,977			5.5
	1,781,827			1,622,461			9.8

Commercial business	436,314			422,381			3.3
	2,218,141			2,044,842			8.5

Leasing and equipment finance:
Equipment finance loans	284,898			271,398			5.0
Lease financings:
Direct financing leases	735,290			691,899			6.3
Sales-type leases	35,589			36,272			(1.9	)
Lease residuals	34,855			33,860			2.9
Unearned income and deferred lease costs	(95,674		)	(94,300		)	1.5
Investment in leveraged leases	21,191			17,608			20.3
	731,251			685,339			6.7
	1,016,149			956,737			6.2
Total consumer, commercial and leasing and equipment finance	6,106,818			5,510,912			10.8
Residential real estate	1,975,481			2,733,290			(27.7	)
	$	8,082,299		$	8,244,202		(2.0	)

Approximately 68% of the home equity loan portfolio at September 30, 2002 consisted of closed-end loans, compared with 70% at December 31, 2001. In addition, 61% of this portfolio carried a variable interest rate, at September 30, 2002, compared with 51% at December 31, 2001. At September 30, 2002, the weighted average loan-to-value ratio for the home equity loan portfolio was 72%, unchanged from December 31, 2001.

As of September 30, 2002, $807.1 million of the variable rate consumer loans were at their interest rate floors. These loans will remain at their interest rate floor until interest rates rise above the floor rate. An increase in the TCF base interest rate of 100 basis points would result in the repricing of $417.2 million of variable rate consumer loans currently at their floor rate. A 200 basis point increase in the TCF base rate would result in a total of $617.1 million of these loans repricing at interest rates above their current floor rate.

The following table sets forth additional information about the loan-to-value ratios for TCF’s home equity loan portfolio:

	At September 30, 2002						At December 31, 2001
(Dollars in thousands)	Balance		Percent of Total		Over 30-Day Delinquency as a Percentage of Balance		Balance		Percent of Total		Over 30-Day Delinquency as a Percentage of Balance
Loan-to-Value Ratios(1):
Over 105%(2)	$	7,132	.2	%	4.40	%	$	10,203	.4	%	2.69	%
Over 100% to 105%(2)	49,849		1.8		1.47		56,375		2.3		1.43
Over 90% to 100%	397,680		14.1		.65		396,333		16.2		.69
Over 80% to 90%	966,867		34.3		.67		802,094		32.8		.64
80% or less	1,398,460		49.6		.55		1,178,783		48.3		.69
Total	$	2,819,988	100.0	%	.63		$	2,443,788	100.0	%	.70

(1) Loan-to-value is based on the loan amount (current outstanding balance on closed-end loans and the total commitment on lines of credit) plus deferred loan origination costs net of fees and refundable insurance premiums, if any, plus the amount of senior lien loans, if any. Property values represent the most recent appraised value or property tax assessment value known to TCF.

(2) Amount reflects the total outstanding loan balance. The portion of the loan balance in excess of 100% of the property value is substantially less than the amount included above.

The following table summarizes TCF’s commercial real estate loan portfolio by property type:

	At September 30, 2002				At December 31, 2001
(Dollars in thousands)	Balance		Over 30-Day Delinquency as a Percentage of Balance		Balance		Over 30-Day Delinquency as a Percentage of Balance
Apartments	$	489,479	—	%	$	431,679	.03	%
Office buildings	382,573		.33		364,357		.08
Retail services	260,921		.06		217,408		—
Hotel and motels	139,146		—		144,424		—
Warehouse/industrial buildings	179,262		1.29		159,090		—
Health care facilities	41,724		—		24,698		—
Other	288,722		.06		280,805		.04
Total	$	1,781,827	.22		$	1,622,461	.03

TCF continues to expand its commercial business and commercial real estate lending activity to borrowers located in its primary midwestern markets. With a primary focus on secured lending, at September 30, 2002, approximately 99% of TCF’s commercial real estate and commercial business loans were secured either by properties or underlying business assets. At September 30, 2002 and December 31, 2001, the construction and development portfolio included hotel and motel loans of $38.3 million and $31.5 million, respectively, and apartment loans of $5.3 million and $2.5 million, respectively. At September 30, 2002, approximately 87% of TCF’s commercial real estate loans outstanding were secured by properties located in its primary markets.

The following table summarizes TCF’s leasing and equipment finance portfolio, which totaled $1 billion at September 30, 2002:

	At September 30, 2002						At December 31, 2001
(Dollars in thousands)	Balance		Percent of Total		Over 30-Day Delinquency as a Percentage of Balance		Balance		Percent of Total		Over 30-Day Delinquency as a Percentage of Balance
Winthrop(1)	$	279,406	27.5	%	.21	%	$	307,335	32.1	%	.24	%
Wholesale(2)	192,544		18.9		.08		204,792		21.4		.28
Middle market	289,232		28.5		1.78		181,826		19.0		2.14
Small ticket(3)	120,916		11.9		.62		100,691		10.5		1.17
Leveraged leases	21,191		2.1		—		17,608		1.9		—
Subtotal	903,289		88.9		.74		812,252		84.9		.79
Truck and trailer	112,860		11.1		5.92		144,485		15.1		7.59
Total	$	1,016,149	100.0	%	1.30		$	956,737	100.0	%	1.84

(1) Winthrop consists primarily of high-tech equipment, computers, telecommunications and point-of-sale equipment.

(2) Wholesale includes the discounting and purchase or origination of lease receivables sourced by third party lessors.

(3) Small ticket includes lease financings to small- and mid-size companies through programs with vendors, manufacturers, distributors and franchise organizations. Individual contracts generally range from $25,000 to $250,000.

Total loan and lease originations for TCF’s leasing businesses were $377.1 million for the first nine months of 2002, compared with $378.7 million for the same 2001 period. During the third quarter of 2002, TCF’s leasing businesses saw an increase in origination activity with originations totaling $124.8 million for the quarter, compared with $114.4 million in the third quarter of 2001. In addition, the backlog of approved transactions increased to $160.2 million at September 30, 2002, from $126.1 million at December 31, 2001. Included in the investment in leveraged leases, at September 30, 2002, is a 100% equity interest in a Boeing 767-300 aircraft on lease to Delta Airlines in the United States. The aircraft is in service, the lessee is current on the lease payments and the lease expires in 2010. This lease represents TCF’s only material direct exposure to the commercial airline industry. TCF’s expanded leasing activity is subject to risk of cyclical downturns and other adverse economic developments. TCF’s ability to increase its lease portfolio is dependent upon its ability to place new equipment in service. In an adverse economic environment, there is a lower demand for some types of equipment which TCF leases, resulting in a decline in the amount of new equipment being placed into service as well as the decline in equipment values for equipment previously placed in service. TCF Leasing has originated most of its portfolio during recent periods, and consequently the performance of this portfolio may not be reflective of future results and credit quality. During 2001, TCF discontinued originations in the truck and trailer segment and in the first quarter of 2002, completed the shutdown this segment.

Allowance for Loan and Lease Losses

Credit risk is the risk of loss from a customer default on a loan or lease. TCF has in place a process to identify and manage its credit risk. The process includes initial credit review and approval, periodic monitoring to measure compliance with credit agreements and internal credit policies, monitoring changes in the risk ratings of loans and leases, identification of problem loans and leases and special procedures for the collection of problem loans and leases. The risk of loss is difficult to quantify and is subject to fluctuations in values and general economic conditions and other factors. The determination of the allowance for loan and lease losses is a critical accounting policy which involves estimates and management’s judgment on a number of factors such as net charge-offs, delinquencies in the loan and lease portfolio and general economic conditions. The Company considers the allowance for loan and lease losses of $76.2 million adequate to cover losses inherent in the loan and lease portfolios as of September 30, 2002. However, no assurance can be given that TCF will not, in any particular period, sustain loan and lease losses that are sizeable in relation to the amount reserved, or that subsequent evaluations of the loan

and lease portfolio, in light of factors then prevailing, including economic conditions and TCF’s on-going credit review process, will not require significant increases in the allowance for loan and lease losses. Among other factors, a protracted economic slowdown and/or a decline in commercial or residential real estate values in TCF’s markets may have an adverse impact on the adequacy of the allowance for loan and lease losses by increasing credit risk and the risk of potential loss. See “Forward-Looking Information.”

A summary of the activity of the allowance for loan and lease losses and selected statistics follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
(Dollars in thousands)	2002			2001			2002			2001

Balance at beginning of period	$	75,182		$	69,667		$	75,028		$	66,669
Provision for credit losses	4,071			6,076			17,939			13,923
Charge-offs	(4,159		)	(3,285		)	(20,116		)	(10,570		)
Recoveries	1,063			1,178			3,306			3,614
Net charge-offs	(3,096		)	(2,107		)	(16,810		)	(6,956		)
Balance at end of period	$	76,157		$	73,636		$	76,157		$	73,636

Ratio of annualized net loan and lease charge-offs to average loans and leases outstanding	.15		%	.10		%	.28		%	.11		%

Allowance for loan and lease losses as a percentage of total loans and leases at period end	.94		%	.87		%	.94		%	.87		%

Allowance for loan and lease losses as a multiple of annualized net charge-offs	6.1		X	8.7		X	3.4		X	7.9		X

Additional information on the allowance for loan and lease losses follows:

	At or For the Nine Months Ended September 30, 2002						At or For the Year Ended December 31, 2001
(Dollars in thousands)	Allowance for Loan and Lease Losses		Total Loans and Leases		Allowance as a% of Portfolio		Allowance for Loan and Lease Losses		Total Loans and Leases		Allowance as a% of Portfolio
Consumer	$	7,886	$	2,872,528	.27	%	$	8,355	$	2,509,333	.33	%
Commercial real estate	24,106		1,781,827		1.35		24,459		1,622,461		1.51
Commercial business	14,140		436,314		3.24		12,117		422,381		2.87
Leasing and equipment finance	12,397		1,016,149		1.22		11,774		956,737		1.23
Unallocated	16,139		—		N.A	.	16,139		—		N.A	.
Subtotal	74,668		6,106,818		1.22		72,844		5,510,912		1.32
Residential real estate	1,489		1,975,481		.08		2,184		2,733,290		.08
Total	$	76,157	$	8,082,299	.94		$	75,028	$	8,244,202	.91

N.A. Not applicable.

The allocated allowance balances for TCF’s residential and consumer loan portfolios, at September 30, 2002, reflect the Company’s credit quality and related low level of net charge-offs for these portfolios. The increase in the allocated allowance for leasing and equipment finance losses reflects the continued growth in the portfolio and the

increase in charge-offs in the leasing and equipment finance portfolio. The allocated allowances for these portfolios do not reflect any significant changes in estimation methods or assumptions.

The increase in TCF’s allowance for loan and lease losses as a percentage of total loans and leases, at September 30, 2002, reflects the impact of the continued growth in the commercial loan and leasing and equipment finance portfolios coupled with increased charge-offs in these portfolios. Net loan and lease charge-offs were $3.1 million and $16.8 million, or .15% (annualized) and .28% (annualized) of average loans and leases outstanding in the third quarter and first nine months of 2002, respectively, compared with $2.1 million and $7 million or .10% (annualized) and .11% (annualized) of average loans and leases for the same periods of 2001 and $5 million and $13.7 million, or .25% (annualized) and .34% (annualized) of average loans and leases in the second quarter and first six months of 2002, respectively. Commercial real estate net charge-offs were $69,000 and $2.1 million during the third quarter and first nine months of 2002, respectively, compared with net recoveries of $42,000 and $9,000 for the same periods in 2001. Commercial real estate net charge-offs for the first nine months of 2002 included a $1.6 million charge-off on a commercial real estate property transferred to other real estate owned in the second quarter of 2002. Commercial business net charge-offs were $407,000 and $5.6 million during the third quarter and first nine months of 2002, respectively, compared with net charge-offs of $22,000 and $83,000 for the same periods in 2001. Commercial business charge-offs for the first nine months of 2002 included $4 million in charge-offs related to $7.4 million of loans to a banking customer who is dependent on the transportation industry, which has been severely impacted by the economic slowdown. Leasing and equipment finance net charge-offs were $1.6 million and $6.2 million during the third quarter and first nine months of 2002, respectively, compared with net charge-offs of $1.5 million and $5.2 million for the same periods of 2001.

The following table sets forth additional information regarding net charge-offs:

	Three Months Ended											Nine Months Ended
	September 30, 2002						September 30, 2001					September 30, 2002				September 30, 2001
(Dollars in thousands)	Net Charge-offs (Recoveries)				% of Average Loans and Leases(1)		Net Charge-offs (Recoveries)			% of Average Loans and Leases(1)		Net Charge-offs (Recoveries)		% of Average Loans and Leases(1)		Net Charge-offs (Recoveries)			% of Average Loans and Leases(1)

Consumer	$		1,023		.15	%	$	653		.11	%	$	2,876	.15	%	$	1,711		.10	%
Commercial real estate	69				.02		(42		)	(.01	)	2,138		.16		(9		)	—
Commercial business	407				.37		22			.02		5,598		1.70		83			.03
Leasing and equipment finance
Winthrop	48				.07		278			.34		110		.05		1,877			.72
Wholesale	1,036				2.16		92			.18		1,998		1.35		778			.57
Middle market	274				.40		54			.15		719		.43		298			.32
Small ticket	(21			)	(.07	)	22			.10		555		.61		653			.98
Leveraged leases	—				—		—			—		—		—		—			—
Subtotal	1,337				.60		446			.23		3,382		.52		3,606			.62
Truck and trailer	230				.78		1,027			2.76		2,792		2.91		1,564			1.38
Total leasing and equipment finance	1,567				.62		1,473			.63		6,174		.84		5,170			.76
Subtotal	3,066				.21		2,106			.16		16,786		.39		6,955			.18
Residential real estate	30				.01		1			—		24		—		1			—
Total	$	3,096			.15		$	2,107		.10		$	16,810	.28		$	6,956		.11

(1) Annualized.

Non-Performing Assets

Non-performing assets, consisting of non-accrual loans and leases and other real estate owned, totaled $72.2 million, or .90 % of net loans and leases at September 30, 2002, compared with $66.6 million, or .82% at December 31, 2001. Approximately 47% of non-performing assets at September 30, 2002 consisted of, or were secured by, residential real estate. Non-performing assets are summarized in the following table:

(Dollars in thousands)	At September 30, 2002			At December 31, 2001
Non-accrual loans and leases:
Consumer	$	12,213		$	16,473
Commercial real estate	2,881			11,135
Commercial business	5,456			3,550
Leasing and equipment finance, net	19,123			11,723
Residential real estate	5,340			6,959
Total non-accrual loans and leases, net	45,013			49,840
Non-recourse discounted lease rentals	820			2,134
Total non-accrual loans and leases, gross	45,833			51,974
Other real estate owned:
Commercial real estate	11,317			1,825
Residential real estate	15,084			12,830
Total other real estate owned	26,401			14,655
Total non-performing assets, gross	$	72,234		$	66,629
Total non-performing assets, net	$	71,414		$	64,495

Accruing loans and leases 90 days or more past due	$	6,924		$	5,129

Gross non-performing assets as a percentage of net loans and leases	.90		%	.82		%
Gross non-performing assets as a percentage of total assets	.60		%	.59		%

The over 30-day delinquency rate on TCF’s loans and leases (excluding loans held for sale and non-accrual loans and leases) was ..61% of loans and leases outstanding at September 30, 2002, compared with .57% at year-end 2001. TCF’s delinquency rates are determined using the contractual method. The following table sets forth information regarding TCF’s over 30-day delinquent loan and lease portfolio, excluding loans held for sale and non-accrual loans and leases:

	At September 30, 2002				At December 31, 2001
(Dollars in thousands)	Principal Balances		Percentage of Portfolio		Principal Balances		Percentage of Portfolio

Consumer	$	18,411	.64	%	$	17,939	.72	%
Commercial real estate	3,885		.22		538		.03
Commercial business	188		.04		526		.13
Leasing and equipment finance	12,954		1.30		17,393		1.84
Residential real estate	13,234		.67		10,377		.38
Total	$	48,672	.61		$	46,773	.57

TCF’s over 30-day delinquency on total leasing and equipment finance decreased to 1.30% at September 30, 2002 from 1.84% at December 31, 2001. The decline in delinquencies in the leasing and equipment finance portfolio during the first nine months of 2002 was primarily in the discontinued truck and trailer segment. Delinquencies in this segment of the leasing and equipment finance portfolio were $6.3 million, or 5.9% at September 30, 2002, compared with $11 million, or 7.6%, at December 31, 2001. Non-accrual loans and leases in the truck and trailer segment of the leasing and equipment finance portfolio decreased to $5.7 million at September 30, 2002, from $6.9 million at December 31, 2001.

In addition to the non-accrual loans and leases and accruing loans and leases 90 or more days past due, there were $102.3 million of loans and leases at September 30, 2002, for which management has concerns regarding the ability of the borrowers to meet existing repayment terms, compared with $71.9 million at December 31, 2001. These loans and leases were classified for regulatory purposes as substandard or doubtful, or were to customers that currently are experiencing financial difficulties or that management believes may experience financial difficulties in the future. Although these loans and leases are generally secured by commercial real estate or other corporate assets, they may be subject to future modifications of their terms or may become non-performing. Included in these amounts were loans to Michigan-based borrowers of $61.3 million at September 30, 2002, up from $24.7 million at December 31, 2001. The Michigan economy is relatively more volatile than other TCF markets and is significantly dependent on the automobile industry. TCF continues to closely monitor the economy in all of its markets and the potential effects, if any, on credit quality.

The recorded investment in loans that are considered to be impaired was $12.8 million at September 30, 2002, down from $18.8 million at December 31, 2001. The related allowance for credit losses was $5.5 million at September 30, 2002, compared with $5 million at December 31, 2001. All of the impaired loans were on non-accrual status. The average recorded investment in impaired loans during the three months ended September 30, 2002 was $13 million, compared with $13.3 million for the 2002 second quarter.

Deposits

Checking, savings and money market deposits are an important source of lower-cost funds and fee income for TCF. Deposits totaled $7.7 billion at September 30, 2002, up $561.5 million from December 31, 2001. The increase in deposits is net of the impact of the previously noted branch sale during the first quarter of 2002. Lower interest-cost checking, savings and money market deposits totaled $5.6 billion, up $858.3 million from December 31, 2001, and comprised 73.6% of total deposits at September 30, 2002, compared with 67.3% of total deposits at December 31, 2001. Average annualized fee revenue per retail checking account for the first nine months of 2002 was $214, compared with $208 for the comparable period ending September 30, 2001. Higher interest-cost certificates of deposit decreased $296.7 million from December 31, 2001 as a result of TCF’s disciplined pricing and the availability of other lower-cost funding sources. TCF’s weighted-average rate for deposits, including non-interest-bearing deposits, was 1.21% at September 30, 2002, down from 1.49% at December 31, 2001.

TCF continued to expand its supermarket banking franchise by opening three new branches during the 2002 third quarter. TCF now has 241 supermarket branches, up from 231 such branches a year ago. Supermarket banking continues to play an important role in TCF’s growth, as these branches have been consistent generators of account growth in both deposit and lending products. Additional information regarding TCF’s supermarket branches is as follows:

(Dollars in thousands)	At or For the Nine Months Ended September 30,						Increase (Decrease)			% Change
(Dollars in thousands)	2002			2001			Increase (Decrease)			% Change
Number of branches	241			231			10			4.3	%
Number of deposit accounts	804,656			724,598			80,058			11.0
Deposits:
Checking	$	686,378		$	572,568		$	113,810		19.9
Savings	487,758			168,978			318,780			188.7
Money market	109,922			130,577			(20,655		)	(15.8	)
Subtotal	1,284,058			872,123			411,935			47.2
Certificates	234,391			323,411			(89,020		)	(27.5	)
Total	$	1,518,449		$	1,195,534		$	322,915		27.0

Average rate on deposits	1.11		%	1.57		%	(.46		)%	N.A	.
Total fees and other revenues (quarter ended)	$	42,223		$	35,340		$	6,883		19.5
Total fees and other revenues (year-to-date)	$	116,797		$	100,050		$	16,747		16.7
Consumer loans outstanding	$	361,791		$	282,693		$	79,098		28.0

N.A. Not applicable.

Borrowings

Borrowings totaled $3 billion at September 30, 2002, down $67.7 million from year-end 2001. The decrease was primarily due to increased deposit funding, which reduces reliance on borrowings. Included in long-term borrowings at September 30, 2002, are $1.3 billion of fixed-rate FHLB advances and reverse repurchase agreements which are callable at par on certain anniversary dates and, for most, quarterly thereafter until maturity. If called, replacement funding will be provided by the counterparties at the then-prevailing market rate of interest for the remaining term-to-maturity of the advances, subject to standard terms and conditions. The weighted-average rate on borrowings decreased to 4.76% at September 30, 2002, from 4.85% at December 31, 2001. At September 30, 2002, borrowings with a maturity of one year or less totaled $814.6 million.

TCF has a $105 million bank line of credit agreement maturing in April 2003 which is unsecured and contains certain covenants common to such agreements. TCF is not in default with respect to any of its covenants under the credit agreement. At September 30, 2002, TCF had $20.5 million outstanding on this bank line of credit, which was included in short-term borrowings.

Stockholders’ Equity

Stockholders’ equity at September 30, 2002 was $950.3 million, or 7.9% of total assets, up from $917 million, or 8.1% of total assets, at December 31, 2001. The increase in stockholders’ equity was primarily due to net income of $173.2 million for the nine months ended September 30, 2002, a $34 million increase in accumulated other comprehensive income and the $9.8 million repayment of all outstanding loans to the officers’ and directors’ deferred compensation plans, partially offset by the repurchase of 2.6 million shares of TCF’s common stock at a cost of $127.6 million and the payment of $64.5 million in dividends on common stock. Since January 1, 1998, the Company has repurchased 21.2 million shares of TCF’s common stock at an average cost of $31.50 per share. For the first nine months of 2002, average total equity to average assets was 7.97% compared with 7.78% for the year ended December 31, 2001. On October 21, 2002, TCF declared a regular quarterly dividend of 28.75 cents per common share, payable on November 29, 2002 to shareholders of record as of November 1, 2002.

Employee Benefits Plans

TCF’s Cash Balance Pension Plan (“the Plan”) is a qualified defined benefits plan covering all “regular stated salary” employees and certain part-time employees who are at least 21 years old and have completed a year of eligibility with TCF. The plan had total assets with a fair value of $49.5 million at September 30, 2002 compared with $59.6 million at December 31, 2001. The plan updates its actuarial calculation of benefit obligation annually. The most recent actuarial calculation of the benefit obligation was $36.1 million as of December 31, 2001. At September 30, 2002, the Plan held 28,400 shares of TCF common stock, down from 246,000 shares at December 31, 2001.

MARKET RISK – INTEREST RATE RISK

TCF’s results of operations are dependent to a large degree on its net interest income and its ability to manage its interest rate risk. Although TCF manages other risks, such as credit and liquidity risk, in the normal course of its business, the Company considers interest rate risk to be its most significant market risk. Since TCF does not hold a trading portfolio, the Company is not exposed to market risk from trading activities. The mismatch between maturities and interest rate sensitivities of assets and liabilities results in interest rate risk. TCF, like most financial institutions, has material interest rate risk exposure to changes in both short-term and long-term interest rates as well as variable interest rate indices (e.g., prime).

TCF’s Asset/Liability Management Committee manages TCF’s interest rate risk based on interest rate expectations and other factors. The principal objective of TCF’s asset/liability management activities is to provide maximum levels of net interest income while maintaining acceptable levels of interest rate risk and liquidity risk and facilitating the funding needs of the Company.

Although the measure is subject to a number of assumptions and is only one of a number of measurements, management believes that interest rate gap (difference between interest-earning assets and interest-bearing liabilities repricing within a given period) is an important indication of TCF’s exposure to interest rate risk and the related volatility of net interest income in a changing interest rate environment. While gap has some limitations, which include no future asset or liability production and a static interest rate environment which can result in large quarterly changes due to changes of the above items, interest rate gap calculates the net asset or liability sensitivity at a point in time. In addition to the interest rate gap analysis, management also utilizes a simulation model to measure and manage TCF’s interest rate risk, relative to a base case scenario.

TCF’s one-year adjusted interest rate gap was a positive $1.3 billion, or 11% of total assets, at September 30, 2002, compared with a positive $241.8 million, or 2% of total assets at December 31, 2001. A positive interest rate gap position exists when the amount of interest-earning assets maturing or repricing, including assumed prepayments, within a particular time period exceeds the amount of interest-bearing liabilities maturing or repricing. TCF’s one-year interest rate gap has increased $1.1 billion since December 31, 2001. The increase in the one-year gap reflects the current low interest rate environment in which TCF and the banking industry as a whole are experiencing sharp increases in actual and forecasted prepayments of mortgage-backed securities, residential real estate loans, fixed-rate consumer and commercial real estate loans. Also impacting the gap is significant customer demand for variable-rate consumer and commercial loan products, in addition to the growth in deposits, resulting in reduced variable-rate borrowings. TCF has managed this change by repositioning the balance sheet for a rising short-term interest rate environment. If interest rates remain at current levels or fall further, net interest income may decline and the net interest margin may compress.

TCF’s consumer and commercial loans (excluding loans at their floor rate) tied to a floating interest rate (prime or LIBOR) have increased $745 million in the first nine months of 2002. This is primarily due to TCF meeting customer demand by offering variable-rate loans. TCF has experienced growth in non-rate sensitive checking accounts and has experienced a lengthening of the maturity of certificates of deposit.

TCF’s interest margin is positioned to benefit from rising short-term rates due to a positive gap position. TCF would also likely benefit from an increase in short-term interest rates as this might signify that economic conditions are improving. An increase in short-term interest rates would affect its fixed-rate/variable-rate product origination mix and origination volumes.

While this positive gap may compress net interest income in the short-term or if the current interest rate environment continues for an extended period of time, TCF believes this positive gap to be warranted because current rates are well below historical averages and the consequently greater possibility over time of higher rates versus lower rates. In addition, if long-term interest rates decrease, TCF could continue to experience an increase in prepayments of residential loans, mortgage-backed securities and mortgage servicing rights.

Management’s interest rate gap assumptions could be significantly affected by external factors such as prepayment rates other than those assumed, early withdrawals of deposits, changes in the correlation of various interest-bearing

instruments, competition, a general rise or decline in interest rates, and the possibility that the FHLB will exercise its option to call certain of TCF’s longer-term FHLB advances. Decisions by management to purchase or sell assets, or retire or restructure debt could change the maturity/repricing and spread relationships.

Recent Accounting Developments

In June 2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 143, “Accounting for Asset Retirement Obligations,” which addresses the recognition and measurement of obligations associated with the retirement of tangible long-lived assets. SFAS No. 143 is effective January 1, 2003, with early adoption permitted. The Company plans to adopt SFAS No. 143 effective January 1, 2003 and does not expect the adoption of the statement to have a material effect on the financial statements.

In June 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities,” which addresses financial accounting and reporting for costs associated with exit or disposal activities. Under SFAS No. 146, such costs will be recognized when the liability is incurred, rather than at the date of commitment to an exit plan. SFAS No. 146 is effective for exit or disposal activities that are initiated after December 31, 2002, with early application permitted. The Company does not expect the adoption of SFAS No. 146 to have a material effect on its financial statements.

In October 2002, the FASB issued SFAS No. 147, “Acquisitions of Certain Financial Institutions, an amendment of FASB Statements No. 72 and 144 and FASB Interpretation No. 9,” which addresses accounting for purchases of certain financial institutions. SFAS No. 147 is effective October 1, 2002, with early application permitted. The Company does not expect the adoption of SFAS No. 147 to have a material effect on its financial statements.

Earnings Teleconference and Website Information

TCF hosts quarterly conference calls to discuss its financial results. Additional information regarding TCF’s conference calls can be obtained from the investor relations section within TCF’s web site at www.tcfexpress.com or by contacting TCF’s Corporate Communications Department at (952) 745-2760. The website also includes access to company news releases, TCF’s annual report, quarterly reports, investor presentations and SEC filings.

Legislative, Legal and Regulatory Developments

Federal and state legislation imposes numerous legal and regulatory requirements on financial institutions. Future legislative or regulatory change, or changes in enforcement practices or court rulings, may have a dramatic and potentially adverse impact on TCF and its bank and other subsidiaries.

The Federal Deposit Insurance Corporation (“FDIC”) and members of the United States Congress have recently proposed new legislation that would reform the bank deposit insurance system. This reform could merge BIF and SAIF insurance funds, increase the deposit insurance coverage limits and index future coverage limitations, among other changes. Most significantly, reform proposals could allow the FDIC to raise or lower (within certain limits) the

currently mandated designated reserve ratio requiring the FDIC to maintain a 1.25% reserve ratio ($1.25 against $100 of insured deposits), and require certain changes in the calculation methodology. Although it is too early to predict the ultimate impact of such proposals, they could, if adopted, result in the imposition of additional deposit insurance premium costs on TCF.

In September 2002, the Securities and Exchange Commission (“SEC”) issued its final ruling covering the acceleration of periodic report filing dates. The rule applies to all companies, including TCF, that have a public float of at least $75 million that have been subject to the SEC’s reporting requirements for at least 12 calendar months and that have previously filed at least one annual report. For companies meeting the definition of accelerated filer as of the end of their first fiscal year ending on or after December 15, 2002, the annual report deadline will remain 90 days for year one and will then be reduced 15 days per year over two years to 60 days. The quarterly report on Form 10-Q will remain due 45 days after quarter end for year one and will then be reduced five days per year over two years to 35 days.

On July 1, 2002, TCF received the approval of the Office of the Comptroller of the Currency to merge TCF National Bank Colorado into TCF National Bank. The merger of these wholly-owned bank charters was completed in July 2002.

Sarbanes-Oxley Act of 2002

On July 30, 2002, the Sarbanes-Oxley Act of 2002 (“the Act”) was enacted by Congress. The Act provides for sweeping changes dealing with corporate governance, accounting practices and disclosure requirements for public companies, and also for their directors and officers. Section 302 of the Act, entitled “Corporate Responsibility for Financial Reports” required the SEC to adopt rules to implement certain requirements noted in the Act and it did so effective August 29, 2002. The new rules require a company’s chief executive and chief financial officers to certify the financial and other information included in the company’s quarterly and annual reports. The rules also require these officers to certify that they are responsible for establishing, maintaining and regularly evaluating the effectiveness of the company’s disclosure controls and procedures; that they have made certain disclosures to the auditors and to the audit committee of the board of directors about the company’s controls and procedures; and that they have included information in their quarterly and annual filings about their evaluation and whether there have been significant changes to the controls and procedures or other factors which would significantly impact these controls subsequent to their evaluation. See Certifications on pages 42 and 43 for such certifications of the financial statements and other information for this third quarter 2002 Form 10-Q. See “Controls and Procedures” for TCF’s evaluation of disclosure controls and procedures. TCF is also filing as an exhibit to this report certificates called for under Section 906 of the Act.

Forward-Looking Information

This report and other reports issued by the Company, including reports filed with the SEC, may contain “forward-looking” statements that deal with future results, plans or performance. In addition, TCF’s management may make such statements orally to the media, or to securities analysts, investors or others. Forward-looking statements deal with matters that do not relate strictly to historical facts. TCF’s future results may differ materially from historical performance and forward-looking statements about TCF’s expected financial results or other plans are subject to a number of risks and uncertainties. These include but are not limited to possible legislative changes and adverse economic, business and competitive developments such as shrinking interest margins; deposit outflows; reduced demand for financial services and loan and lease products; adverse developments affecting TCF’s supermarket banking relationships or any of the supermarket chains in which TCF maintains supermarket branches; changes in accounting policies or guidelines, or monetary and fiscal policies of the federal government; changes in credit and other risks posed by TCF’s loan, lease and investment portfolios; technological, computer-related or operational difficulties; adverse changes in securities markets; results of litigation or other significant uncertainties. The terrorist attacks on September 11, 2001 and related subsequent developments have had an adverse impact on the United States’ economy and could have a continuing adverse impact on the economy and the Company’s business, most likely by reducing capital and consumer spending. Such developments could result in decreased demand for TCF’s products and services, and increased credit losses. Several recent high-profile instances of financial reporting

irregularities, unrelated to the Company, have given rise to concerns about the accounting practices of public companies, and resulted in demands for additional regulatory requirements and improved controls over accounting practices. Adverse public reaction to such developments, including a loss of investor confidence and stock market declines, may contribute to economic malaise with a negative impact on the Company’s business. Also, additional regulatory and financial reporting requirements may impose added costs or other burdens on the Company. Investors should consult TCF’s Annual Report to Shareholders and periodic reports on Forms 10-Q, 10-K and 8-K for additional important information about the Company.

CONTROLS AND PROCEDURES

Within 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer along with the Company’s Chief Financial Officer and Treasurer and its Controller and Assistant Treasurer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the Company’s Chief Executive Officer along with the Company’s Chief Financial Officer and Treasurer and its Controller and Assistant Treasurer concluded that the Company’s disclosure controls and procedures are effective in alerting them to material information relating to the Company in a timely manner (including its consolidated subsidiaries) required to be included in the Company’s periodic SEC filings. There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls subsequent to the date the Company carried out its evaluation.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Supplementary Information

SELECTED QUARTERLY FINANCIAL DATA (Unaudited)

(Dollars in thousands, except per-share data)	At Sept. 30, 2002		At June 30, 2002		At March 31, 2002		At Dec. 31, 2001		At Sept. 30, 2001		At June 30, 2001		At March 31, 2001
SELECTED FINANCIAL CONDITION DATA:
Total assets	$	11,970,331	$	11,527,351	$	11,170,583	$	11,358,715	$	11,723,353	$	11,628,663	$	11,845,124
Securities available for sale	2,252,786		1,965,664		1,556,798		1,584,661		1,794,136		1,843,871		1,928,338
Residential real estate loans	1,975,481		2,249,365		2,458,431		2,733,290		3,122,970		3,251,813		3,450,311
Other loans and leases	6,106,818		5,879,607		5,693,330		5,510,912		5,334,359		5,181,260		5,010,256
Deposits	7,660,497		7,556,626		7,293,972		7,098,958		7,057,945		6,916,145		7,030,818
Borrowings	2,955,295		2,702,133		2,610,712		3,023,025		3,459,286		3,571,501		3,675,428
Stockholders’ equity	950,290		920,088		921,847		917,033		898,486		890,369		895,066

	Three Months Ended
	Sept. 30, 2002			June 30, 2002			March 31, 2002			Dec. 31, 2001			Sept. 30, 2001			June 30, 2001			March 31, 2001
SELECTED OPERATIONS DATA:
Interest income	$	182,406		$	184,234		$	184,371		$	195,777		$	205,545		$	212,726		$	212,561
Interest expense	58,637			59,925			59,847			70,031			83,138			93,448			98,770
Net interest income	123,769			124,309			124,524			125,746			122,407			119,278			113,791
Provision for credit losses	4,071			4,714			9,154			6,955			6,076			5,422			2,425
Net interest income after provision for credit losses	119,698			119,595			115,370			118,791			116,331			113,856			111,366
Non-interest income:
Fees and other revenues	102,575			101,788			94,924			95,621			95,295			95,650			80,741
Gains on sales of branches	—			—			1,962			—			—			—			3,316
Gains on sales of securities available for sale	2,662			—			6,044			863			—			—			—
Total	105,237			101,788			102,930			96,484			95,295			95,650			84,057
Non-interest expense:
Amortization of goodwill	—			—			—			1,944			1,944			1,945			1,944
Other non-interest expense	134,223			131,886			131,297			129,484			124,715			124,008			116,012
Total	134,223			131,886			131,297			131,428			126,659			125,953			117,956
Income before income tax expense	90,712			89,497			87,003			83,847			84,967			83,553			77,467
Income tax expense	31,845			31,526			30,686			29,652			32,077			31,539			29,244
Net income	$	58,867		$	57,971		$	56,317		$	54,195		$	52,890		$	52,014		$	48,223

Per common share:
Basic earnings	$	.81		$	.78		$	.75		$	.73		$	.70		$	.68		$	.62
Diluted earnings	$	.80		$	.78		$	.75		$	.72		$	.69		$	.67		$	.62
Dividends declared	$	.2875		$	.2875		$	.2875		$	.25		$	.25		$	.25		$	.25

FINANCIAL RATIOS:(1)
Return on average assets	2.03		%	2.04		%	2.01		%	1.88		%	1.81		%	1.78		%	1.71		%
Return on average realized common equity	26.19			25.75			24.86			24.44			23.68			23.22			21.47
Return on average common equity	25.53			25.36			24.68			23.92			23.48			23.37			21.54
Average total equity to average assets	7.96			8.03			8.15			7.85			7.72			7.61			7.93
Average tangible equity to average assets	6.64			6.68			6.77			6.50			6.36			6.23			6.48
Net interest margin	4.68			4.76			4.83			4.74			4.55			4.40			4.35

(1) Annualized.

Consolidated Average Balance Sheets, Interest and Dividends

Earned or Paid, and Related Interest Yields and Rates

	Nine Months Ended September 30,
	2002						2001
(Dollars in thousands)	Average Balance		Interest(1)		Yields and Rates(2)		Average Balance		Interest(1)		Yields and Rates(2)
Assets:
Investments	$	155,068	$	5,205	4.48	%	$	165,703	$	6,980	5.62	%
Securities available for sale(3)	1,742,224		83,948		6.42		1,722,785		85,194		6.59
Loans held for sale	398,952		15,972		5.34		365,928		18,234		6.64
Loans and leases:
Consumer	2,638,578		154,459		7.81		2,306,393		162,781		9.41
Commercial real estate	1,727,771		88,640		6.84		1,452,709		86,960		7.98
Commercial business	437,854		17,429		5.31		408,571		23,683		7.73
Leasing and equipment finance	985,640		64,398		8.71		910,581		67,822		9.93
Subtotal	5,789,843		324,926		7.48		5,078,254		341,246		8.96
Residential real estate	2,356,568		120,960		6.84		3,354,865		179,178		7.12
Total loans and leases(4)	8,146,411		445,886		7.30		8,433,119		520,424		8.23
Total interest-earning assets	10,442,655		551,011		7.04		10,687,535		630,832		7.87
Other assets(5)	953,213						871,868
Total assets	$	11,395,868					$	11,559,403

Liabilities and Stockholders’ Equity:
Non-interest bearing deposits	$	1,839,064					$	1,545,787
Interest-bearing deposits:
Checking	905,104		1,167		.17		776,726		3,025		.52
Savings	1,482,884		11,391		1.02		1,007,398		6,156		.81
Money market	930,817		7,785		1.12		887,025		17,706		2.66
Subtotal	3,318,805		20,343		.82		2,671,149		26,887		1.34
Certificates	2,159,639		53,763		3.32		2,669,061		105,811		5.29
Total interest-bearing deposits	5,478,444		74,106		1.80		5,340,210		132,698		3.31
Total deposits	7,317,508		74,106		1.35		6,885,997		132,698		2.57
Borrowings:
Short-term borrowings	488,454		6,625		1.81		1,112,591		38,341		4.59
Long-term borrowings	2,282,123		97,678		5.71		2,357,945		104,317		5.90
Total borrowings	2,770,577		104,303		5.02		3,470,536		142,658		5.48
Total interest-bearing liabilities	8,249,021		178,409		2.88		8,810,746		275,356		4.17
Total deposits and borrowings	10,088,085		178,409		2.36		10,356,533		275,356		3.55
Other liabilities(5)	399,955						306,807
Total liabilities	10,488,040						10,663,340
Stockholders’ equity(5)	907,828						896,063
Total liabilities and stockholders’ equity	$	11,395,868					$	11,559,403

Net interest income and margin			$	372,602	4.76	%			$	355,476	4.43	%

(1) Tax-exempt income was not significant and thus has not been presented on a tax equivalent basis. Tax-exempt income of $217,000 and $118,000 was recognized during the nine months ended September 30, 2002 and 2001, respectively.

(2) Annualized.

(3) Average balance and yield of securities available for sale are based upon the historical amortized cost.

(4) Average balance of loans and leases includes non-accrual loans and leases, and is presented net of unearned income.

(5) Average balance is based upon month-end balances.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, TCF is a party to legal proceedings arising out of its general lending, leasing and operating activities. TCF is and expects to become engaged in a number of foreclosure proceedings and other collection actions as part of its loan and leasing collection activities. From time to time, borrowers and other customers have also brought actions against TCF, in some cases claiming substantial amounts of damages. Financial services companies are subject to class actions, and TCF has had such actions brought against it from time to time. Management, after review with its legal counsel, believes that the ultimate disposition of its litigation will not have a material effect on TCF’s financial condition. Among other possible developments, adverse decisions in litigation dealing with ATM surcharges, or pending litigation against Visa and Mastercard affecting debit card fees could have an adverse impact on TCF.

In 1992 and 1995, TCF National Bank (or predecessor institutions) filed actions in the United States Court of Federal Claims seeking monetary damages against the United States based on the government’s breach of contracts in connection with the acquisition of certain savings associations prior to the enactment of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”). Because of the complexity of the issues involved in both the liability and damages phases of this litigation, and the usual risks associated with litigation, the Company cannot predict the outcome of these cases, and investors should not anticipate any recovery.

Item 2. Changes in Securities.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information.

None.

Item 6. Exhibits and Reports on Form 8-K.

(a) Exhibits.

See Index to Exhibits on page 44 of this report.

(b) Reports on Form 8-K.

A Current Report on Form 8-K, dated August 23, 2002, was submitted furnishing certain investor presentation materials under Item 9 of Form 8-K. Subsequently updated investor presentation materials can be found on TCF’s website at www.tcfexpress.com.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	TCF FINANCIAL CORPORATION


	/s/ William A. Cooper
	William A. Cooper, Chairman of the Board, Chief Executive Officer and Director


	/s/ Neil W. Brown
	Neil W. Brown, Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)


	/s/ David M. Stautz
	David M. Stautz, Senior Vice President, Controller and Assistant Treasurer (Principal Accounting Officer)

Dated: November 4, 2002

CERTIFICATIONS

I, William A. Cooper, certify that:

1. I have reviewed this quarterly report on Form 10-Q of TCF Financial Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 4, 2002

	/s/ William A. Cooper
	William A. Cooper, Chairman of the Board, Chief Executive Officer and Director

CERTIFICATIONS

I, Neil W. Brown, certify that:

1. I have reviewed this quarterly report on Form 10-Q of TCF Financial Corporation;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

Date: November 4, 2002

	/s/ Neil W. Brown
	Neil W. Brown, Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

INDEX TO EXHIBITS

FOR FORM 10-Q

Exhibit Number	Description	Sequentially Numbered Page

4(a)	Copies of instruments with respect to long-term debt will be furnished to the Securities and Exchange Commission upon request.	N/A

99	Statement Pursuant to Title 18 United States Code Section 1350