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
June 30, 2004

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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

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 July 16, 2004
Common Stock, $.01 par value		69,779,431 shares

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

INDEX

Part I. Financial Information			Pages

	Item 1. Financial Statements

	Consolidated Statements of Financial Condition at June 30, 2004 and December 31, 2003		3

	Consolidated Statements of Income for the Three and Six Months Ended June 30, 2004 and 2003		4

	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2004 and 2003		5

	Consolidated Statements of Stockholders’ Equity for the Six Months Ended June 30, 2004 and 2003		6

	Notes to Consolidated Financial Statements		7

	Item 2.	Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations for the Three and Six Months Ended June 30, 2004 and 2003	17

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39

	Item 4.	Controls and Procedures	43

	Supplementary Information		44

Part II. Other Information

	Items 1-6		46

Signatures			48

Index to Exhibits			49

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 June 30, 2004			At December 31, 2003
ASSETS

Cash and due from banks	$	357,227		$	370,054
Investments	94,567			75,223
Securities available for sale	1,588,372			1,533,288
Loans held for sale	359,387			335,372
Loans and leases:
Consumer	4,024,994			3,630,341
Commercial real estate	1,997,449			1,916,701
Commercial business	445,314			427,696
Leasing and equipment finance	1,309,164			1,160,397
Subtotal	7,776,921			7,135,135
Residential real estate	1,091,678			1,212,643
Total loans and leases	8,868,599			8,347,778
Allowance for loan and lease losses	(80,025		)	(76,619		)
Net loans and leases	8,788,574			8,271,159
Premises and equipment	305,052			282,193
Goodwill	152,599			145,462
Deposit base intangibles	5,076			5,907
Mortgage servicing rights	51,290			52,036
Other assets	240,719			248,321
	$	11,942,863		$	11,319,015

LIABILITIES AND STOCKHOLDERS’ EQUITY

Deposits:
Checking	$	3,607,692		$	3,248,412
Savings	1,945,675			1,905,923
Money market	768,394			845,291
Subtotal	6,321,761			5,999,626
Certificates of deposit	1,439,896			1,612,123
Total deposits	7,761,657			7,611,749
Short-term borrowings	869,576			878,412
Long-term borrowings	2,065,870			1,536,413
Total borrowings	2,935,446			2,414,825
Accrued expenses and other liabilities	306,608			371,583
Total liabilities	11,003,711			10,398,157
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; 92,495,974 and 92,513,355 shares issued	925			925
Additional paid-in capital	517,538			518,878
Retained earnings, subject to certain restrictions	1,308,265			1,234,804
Accumulated other comprehensive income (loss)	(14,663		)	5,652
Treasury stock at cost, 22,708,320 and 22,037,025 shares, and other	(872,913		)	(839,401		)
Total stockholders’ equity	939,152			920,858
	$	11,942,863		$	11,319,015

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
June 30,

Six Months Ended
June 30,

2004

2003

2004

2003

Interest income:

Loans and leases

128,141

129,554

253,414

261,275

Securities available for sale

20,413

27,483

40,745

61,247

Loans held for sale

3,340

5,788

6,181

11,014

Investments

895

1,179

1,668

2,582

Total interest income

152,789

164,004

302,008

336,118

Interest expense:

Deposits

9,474

15,512

20,013

33,989

Borrowings

20,896

28,728

41,083

59,953

Total interest expense

30,370

44,240

61,096

93,942

Net interest income

122,419

119,764

240,912

242,176

Provision for credit losses

3,070

3,127

4,230

5,837

Net interest income after provision for credit losses

119,349

116,637

236,682

236,339

Non-interest income:

Fees and service charges

73,116

62,799

132,775

117,213

Debit card revenue

16,024

14,766

29,515

27,999

ATM revenue

11,138

11,242

21,135

21,657

Investments and insurance commissions

3,430

3,760

6,892

7,280

Subtotal

103,708

92,567

190,317

174,149

Leasing and equipment finance

12,245

11,457

22,412

25,064

Mortgage banking

4,790

(4,728

)

8,245

(5,158

)

Other

1,844

1,707

4,072

3,783

Fees and other revenue

122,587

101,003

225,046

197,838

Gains on sales of securities available for sale

—

11,695

12,717

32,832

Gains (losses) on termination of debt

—

(6,576

)

Gain on sale of loan servicing

706

—

706

—

Other non-interest income

706

11,695

13,423

26,256

Total non-interest income

123,293

112,698

238,469

224,094

Non-interest expense:

Compensation and employee benefits

79,597

73,807

158,476

150,406

Occupancy and equipment

23,397

21,531

46,887

43,130

Advertising and promotions

6,498

6,443

12,408

12,796

Other

34,414

34,952

66,841

69,151

Total non-interest expense

143,906

136,733

284,612

275,483

Income before income tax expense

98,736

92,602

190,539

184,950

Income tax expense

33,518

32,311

64,660

64,532

Net income

65,218

60,291

125,879

120,418

Earnings per common share:

Basic

.95

.85

1.83

1.69

Diluted

.94

.85

1.82

1.68

Dividends declared per common share

.375

.325

.75

.65

See accompanying notes to consolidated financial statements.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

	Six Months Ended June 30,
	2004			2003
Cash flows from operating activities:
Net income	$	125,879		$	120,418
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	19,553			19,371
Mortgage servicing rights amortization and impairment	6,918			39,646
Provision for credit losses	4,230			5,837
Proceeds from sales of loans held for sale	563,229			1,522,939
Principal collected on loans held for sale	3,578			9,611
Originations and purchases of loans held for sale	(591,880		)	(1,633,106		)
Net increase in other assets and accrued expenses and other liabilities	(8,029		)	(37,527		)
Gains on sales of assets	(13,423		)	(32,832		)
Losses on termination of debt	—			6,576
Other, net	(2,845		)	(7,863		)

Total adjustments	(18,669		)	(107,348		)

Net cash provided by operating activities	107,210			13,070

Cash flows from investing activities:
Principal collected on loans and leases	1,878,237			2,165,082
Originations and purchases of loans	(2,040,610		)	(1,941,306		)
Purchases of equipment for lease financing	(332,837		)	(248,875		)
Proceeds from sales of securities available for sale	866,692			849,333
Proceeds from maturities of and principal collected on securities available for sale	221,334			426,197
Purchases of securities available for sale	(1,213,660		)	(818,263		)
Net (increase) decrease in Federal Home Loan Bank stock	(19,465		)	31,326
Purchases of premises and equipment	(38,212		)	(30,052		)
Other, net	18,813			1,366

Net cash provided (used) by investing activities	(659,708		)	434,808

Cash flows from financing activities:
Net increase in deposits	149,908			269,749
Net decrease in short-term borrowings	(19,689		)	(295,933		)
Proceeds from long-term borrowings	537,020			13,184
Payments on long-term borrowings	(40,621		)	(299,473		)
Purchases of common stock	(40,897		)	(92,314		)
Dividends on common stock	(52,418		)	(47,112		)
Other, net	6,368			6,852

Net cash provided (used) by financing activities	539,671			(445,047		)

Net increase (decrease) in cash and due from banks	(12,827		)	2,831
Cash and due from banks at beginning of period	370,054			416,397
Cash and due from banks at end of period	$	357,227		$	419,228

Supplemental disclosures of cash flow information:
Cash paid for:
Interest on deposits and borrowings	$	55,805		$	92,755
Income taxes	$	69,916		$	71,988
Transfer of loans and leases to other assets	$	10,746		$	15,632

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, 2002	92,638,937		$	926		$	518,813		$	1,111,955		$	46,102		$	(700,776	)	$	977,020
Comprehensive income (loss):
Net income	—		—			—			120,418			—			—			120,418
Other comprehensive income (loss)	—		—			—			—			(12,743		)	—			(12,743		)
Comprehensive income (loss)	—		—			—			120,418			(12,743		)	—			107,675
Dividends on common stock	—		—			—			(47,112		)	—			—			(47,112		)
Repurchase of 2,300,250 shares	—		—			—			—			—			(92,314		)	(92,314		)
Issuance of 90,590 shares	—		—			884			—			—			(884		)	—
Cancellation of shares	(102,120	)	(1		)	(2,655		)	—			—			1,775			(881		)
Amortization of stock compensation	—		—			—			—			—			4,792			4,792
Exercise of stock options, 49,779 shares	—		—			1,265			—			—			1,624			2,889
Change in shares held in trust for deferred compensation plans, at cost	—		—			(934		)	—			—			934			—
Balance, June 30, 2003	92,536,817		$	925		$	517,373		$	1,185,261		$	33,359		$	(784,849	)	$	952,069

Balance, December 31, 2003	92,513,355		$	925		$	518,878		$	1,234,804		$	5,652		$	(839,401	)	$	920,858
Comprehensive income (loss):
Net income	—		—			—			125,879			—			—			125,879
Other comprehensive income (loss)	—		—			—			—			(20,315		)	—			(20,315		)
Comprehensive income (loss)	—		—			—			125,879			(20,315		)	—			105,564
Dividends on common stock	—		—			—			(52,418		)	—			—			(52,418		)
Repurchase of 753,445 shares	—		—			—			—			—			(40,897		)	(40,897		)
Issuance of 32,800 shares	—		—			552			—			—			(552		)	—
Cancellation of shares	(17,381	)	—			(781		)	—			—			381			(400		)
Amortization of stock compensation	—		—			—			—			—			3,458			3,458
Exercise of stock options, 49,350 shares	—		—			1,303			—			—			1,684			2,987
Change in shares held in trust for deferred compensation plans, at cost	—		—			(2,414		)	—			—			2,414			—
Balance, June 30, 2004	92,495,974		$	925		$	517,538		$	1,308,265		$	(14,663	)	$	(872,913	)	$	939,152

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 information 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, 2003 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) Investments

The carrying values of investments, which approximate their fair values, consist of the following:

(In thousands)	At June 30, 2004		At December 31, 2003
Federal Home Loan Bank stock, at cost	$	69,953	$	50,411
Federal Reserve Bank stock, at cost	24,093		24,045
Interest-bearing deposits with banks	521		767
Total investments	$	94,567	$	75,223

(3) Securities Available for Sale

Securities available for sale consist of the following:

	At June 30, 2004										At December 31, 2003
(Dollars in thousands)	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses			Fair Value

Mortgage-backed securities:
Federal agencies	$	1,603,240		$	1,230	$	(23,906	)	$	1,580,564	$	1,514,400		$	13,744	$	(4,677	)	$	1,523,467
Other	7,293			—		(235		)	7,058		9,272			—		(201		)	9,071
Other securities	750			—		—			750		750			—		—			750
	$	1,611,283		$	1,230	$	(24,141	)	$	1,588,372	$	1,524,422		$	13,744	$	(4,878	)	$	1,533,288

Weighted-average yield	5.28		%								5.33		%

The following table shows the securities available for sale portfolio’s gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2004. TCF has reviewed these securities and has concluded that the unrealized losses are temporary and no permanent impairment has occurred at June 30, 2004.

	Less than 12 months					12 months or more					Total
(In thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses

Mortgage-backed securities:
Federal agencies	$	1,531,751	$	(23,889	)	$	2,854	$	(17	)	$	1,534,605	$	(23,906	)
Other	—		—			5,630		(235		)	5,630		(235		)
Total	$	1,531,751	$	(23,889	)	$	8,484	$	(252	)	$	1,540,235	$	(24,141	)

(4) Goodwill and Intangible Assets

Goodwill and intangible assets as of June 30, 2004 are summarized as follows:

	At June 30, 2004						At December 31, 2003
(In thousands)	Gross Amount		Accumulated Amortization		Net Amount		Gross Amount		Accumulated Amortization		Net Amount

Amortizable intangible assets:
Mortgage servicing rights, net	$	82,372	$	31,082	$	51,290	$	76,306	$	24,270	$	52,036
Deposit base intangibles	21,180		16,104		5,076		21,180		15,273		5,907
Total	$	103,552	$	47,186	$	56,366	$	97,486	$	39,543	$	57,943

Unamortizable intangible assets:
Goodwill included in Banking Segment	$	145,462			$	145,462	$	145,462			$	145,462
Goodwill included in Leasing Segment	7,137				7,137		—				—
Total	$	152,599			$	152,599	$	145,462			$	145,462

Amortization expense for intangible assets was $7.7 million and $17 million for the six months ended June 30, 2004 and 2003, respectively. The following table shows the estimated future amortization expense for amortizable intangible assets based on existing asset balances and the interest rate environment as of June 30, 2004. The Company’s actual amortization expense in any given period may be significantly different from the estimated amounts depending upon the addition of new intangible assets, changes in mortgage interest rates, prepayment rates or market conditions.

(In thousands)	Mortgage Servicing Rights		Deposit Base Intangibles		Total

Estimated Amortization Expense:
For the remaining six months ending December 31, 2004	$	5,485	$	831	$	6,316

For the year ended December 31, 2005	9,626		1,659		11,285
For the year ended December 31, 2006	8,246		1,630		9,876
For the year ended December 31, 2007	6,810		913		7,723
For the year ended December 31, 2008	5,613		17		5,630
For the year ended December 31, 2009	4,642		17		4,659

(5) Mortgage Banking

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

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2004			2003			2004			2003

Mortgage servicing rights at beginning of period	$	52,726		$	65,299		$	54,036		$	71,990
Wholesale originations	1,905			7,425			3,204			11,741
Retail originations	1,901			3,346			2,968			6,640
Amortization	(3,242		)	(8,345		)	(6,918		)	(16,146		)
Impairment write-down	—			(20,000		)	—			(26,500		)
Mortgage servicing rights at end of period	53,290			47,725			53,290			47,725
Valuation allowance at beginning of period	(2,000		)	(12,346		)	(2,000		)	(9,346		)
Provision for impairment	—			(14,000		)	—			(23,500		)
Impairment write-down	—			20,000			—			26,500
Valuation allowance at end of period	(2,000		)	(6,346		)	(2,000		)	(6,346		)
Mortgage servicing rights, net	$	51,290		$	41,379		$	51,290		$	41,379

The estimated fair value of mortgage servicing rights at June 30, 2004 was approximately $64.6 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.

The following table represents the components of mortgage banking revenue:

	Three Months Ended June 30,					Change					Six Months Ended June 30,					Change
(Dollars in thousands)	2004		2003			$			%		2004		2003			$			%

Servicing income	$	4,339	$	5,363		$	(1,024	)	(19.1	)%	$	8,964	$	10,796		$	(1,832	)	(17.0	)%
Less mortgage servicing:
Amortization	3,242		8,345			(5,103		)	(61.2	)	6,918		16,146			(9,228		)	(57.2	)
Impairment	—		14,000			(14,000		)	(100.0	)	—		23,500			(23,500		)	(100.0	)
Subtotal	3,242		22,345			(19,103		)	(85.5	)	6,918		39,646			(32,728		)	(82.6	)
Net servicing income (loss)	1,097		(16,982		)	18,079			N.M.		2,046		(28,850		)	30,896			N.M.
Gains on sales of loans	3,168		10,963			(7,795		)	(71.1	)	5,304		21,589			(16,285		)	(75.4	)
Other income	525		1,291			(766		)	(59.3	)	895		2,103			(1,208		)	(57.4	)
Total mortgage banking revenue	$	4,790	$	(4,728	)	$	9,518		N.M.		$	8,245	$	(5,158	)	$	13,403		N.M.

N.M. Not meaningful

Gains on sales of loans include the changes in fair value of residential mortgage loans held for sale, loan applications in process with locked rate commitments and related forward sales contracts. The net unrealized gains related to these items are summarized as follows:

	At June 30,			At December 31,			Change
(Dollars in thousands)	2004			2003			$			%
Unrealized Gains (Losses):
Residential loans held for sale	$	126		$	1,092		$	(966	)	(88.5	)%
Loan applications in process	(132		)	195			(327		)	N.M.
Subtotal	(6		)	1,287			(1,293		)	N.M.
Forward sales contracts	246			(1,105		)	1,351			N.M.
Net unrealized gains	$	240		$	182		$	58		31.9

N.M. not meaningful

At June 30, 2004 and 2003, TCF was servicing real estate loans for others with aggregate unpaid principal balances of approximately $4.8 billion and $5.3 billion, respectively. During the second quarter of 2004, TCF completed the sale of servicing rights on $126.6 million of its servicing portfolio and recorded a $706 thousand gain.

At June 30, 2004 and 2003, TCF had custodial funds of $116.4 million and $321.8 million, respectively, which are included in deposits in the Consolidated Statements of Financial Condition. These custodial deposits relate primarily to mortgage servicing operations and represent funds due to investors on mortgage loans serviced by TCF and customer funds held for real estate taxes and insurance.

(6) Long-term Borrowings

		At June 30, 2004				At December 31, 2003
(Dollars in thousands)	Year of Maturity	Amount		Weighted- Average Rate		Amount		Weighted- Average Rate

Federal Home Loan Bank (“FHLB”) advances and securities sold under repurchase agreements	2004	$	—	—	%	$	3,000	4.76	%
	2005	1,191,500		3.04		741,500		3.82
	2006	303,000		4.20		303,000		4.20
	2009	122,500		5.25		122,500		5.25
	2010	100,000		6.02		100,000		6.02
	2011	200,000		4.85		200,000		4.85
Total Federal Home Loan Bank advances and securities sold under repurchase agreements		1,917,000		3.71		1,470,000		4.31

Discounted lease rentals	2004	25,084		5.94		43,607		6.24
	2005	27,449		5.86		18,097		5.68
	2006	10,704		5.67		4,134		5.55
	2007	2,079		5.79		522		5.30
	2008	466		5.72		53		5.54
	2009	7		5.55		—		—
Total discounted lease rentals		65,789		5.86		66,413		6.04

Subordinated bank notes	2014	74,281		5.28		—		—

Other borrowings	2005	2,200		4.50		—		—
	2006	2,200		4.50		—		—
	2007	2,200		4.50		—		—
	2008	2,200		4.50		—		—
Total other borrowings		8,800		4.50		—		—

Total long-term borrowings		$	2,065,870	3.84		$	1,536,413	4.38

Included in long-term borrowings at June 30, 2004 were $767.5 million of fixed-rate FHLB advances and repurchase agreements with other institutions, 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 interest rates. The probability that these advances and repurchase agreements will be called depends primarily on the level of related interest rates during the call period. At June 30, 2004, the contract rate exceeded the market rate on all of the fixed-rate callable advances and repurchase agreements.

For certain equipment leases, TCF discounts its lease rentals at fixed rates on either a partial recourse or non-recourse basis with other financial institutions and uses the respective underlying equipment as collateral. In the event of default by the customer on these financings, the other financial institution has a first lien on the underlying leased equipment. In the case of non-recourse financings, the other financial institution has no further recourse against TCF.

On June 14, 2004, TCF National Bank (“TCF Bank”), a wholly-owned subsidiary of TCF issued $75 million of subordinated notes due 2014. The notes bear interest at a fixed rate of 5.00% for the first five years and will reprice quarterly thereafter at the three-month LIBOR rate plus 1.63%. The notes may be redeemed by TCF Bank at par after five years. These notes qualify as Tier 2 or supplemental capital for regulatory purposes, subject to certain limitations. TCF Bank paid the proceeds from the offering to TCF to be used for general corporate purposes, which may include repurchases in the open market of TCF common stock.

(7) Stockholders’ Equity

Treasury stock and other consists of the following:

(In thousands)	At June 30, 2004			At December 31, 2003

Treasury stock, at cost	$	(789,675	)	$	(751,586	)
Shares held in trust for deferred compensation plans, at cost	(68,689		)	(71,103		)
Unamortized stock compensation	(14,549		)	(16,712		)
	$	(872,913	)	$	(839,401	)

TCF purchased 753,445 shares of its common stock during the first six months of 2004, compared with 2.3 million shares for the same 2003 period. At June 30, 2004, TCF had 3 million shares remaining in its stock repurchase program authorized by the Board of Directors.

(8) Regulatory Capital Requirements

The following table sets forth TCF’s and TCF National 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 well-capitalized capital requirements:

	Actual				(Well-capitalized) Capital Requirement				Excess
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of June 30, 2004:
Tier 1 leverage capital
TCF Financial Corporation	N/A		—	%	N/A		—	%	N/A		—	%
TCF National Bank	$	741,921	6.29		$	589,937	5.00		$	151,984	1.29

Tier 1 risk-based capital
TCF Financial Corporation	797,291		9.57		499,787		6.00		297,504		3.57
TCF National Bank	741,921		8.92		498,779		6.00		243,142		2.92

Total risk-based capital
TCF Financial Corporation	951,626		11.42		832,978		10.00		118,648		1.42
TCF National Bank	896,256		10.78		831,298		10.00		64,958		0.78

As of December 31, 2003:
Tier 1 leverage capital
TCF Financial Corporation	N/A		—	%	N/A		—	%	N/A		—	%
TCF National Bank	$	754,599	6.83		$	552,748	5.00		$	201,851	1.83

Tier 1 risk-based capital
TCF Financial Corporation	765,271		9.75		470,737		6.00		294,534		3.75
TCF National Bank	754,599		9.64		469,715		6.00		284,884		3.64

Total risk-based capital
TCF Financial Corporation	841,982		10.73		784,562		10.00		57,420		0.73
TCF National Bank	831,310		10.62		782,858		10.00		48,452		0.62

At June 30, 2004, TCF and TCF National Bank (“TCF Bank”) 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.

(9) Employee Benefit Plans

The following table sets forth the net benefit cost included in compensation and employee benefits expense for TCF’s Pension Plan and Postretirement Plan for the three and six months ended June 30, 2004 and 2003:

	Pension Plan
	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2004			2003			2004			2003
Service cost	$	1,158		$	987		$	2,316		$	1,974
Interest cost	791			737			1,582			1,474
Expected return on plan assets	(1,489		)	(1,593		)	(2,978		)	(3,186		)
Amortization of transition obligation	—			—			—			—
Amortization of prior service cost	(58		)	(90		)	(116		)	(180		)
Recognized actuarial gain	—			—			—			—
Net periodic benefit cost	$	402		$	41		$	804		$	82

	Postretirement Plan
	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2004		2003		2004		2003
Service cost	$	13	$	15	$	27	$	30
Interest cost	164		185		343		370
Expected return on plan assets	—		—		—		—
Amortization of transition obligation	53		52		105		104
Amortization of prior service cost	—		—		—		—
Recognized actuarial gain	49		57		117		114
Net periodic benefit cost	$	279	$	309	$	592	$	618

TCF contributed $2.6 million to the Pension Plan during the second quarter of 2004, under the maximum contribution formula for 2003. TCF does not anticipate making any additional contribution in 2004 to the Pension Plan. During the first six months of 2004, TCF contributed $540 thousand to the Postretirement Plan.

TCF remeasured its postretirement benefit obligation as of December 31, 2003 to include the effects of the federal subsidy provided under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. As a result of this remeasurement, TCF’s postretirement benefit obligation decreased $989 thousand and the 2004 second quarter postretirement benefit cost decreased $34 thousand.

(10) Derivative Instruments and Hedging Activities

All derivative instruments, 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.

TCF’s pipeline of locked residential mortgage loan commitments, adjusted for loans not expected to close, and forward sales contracts are considered derivatives and are recorded at fair value, with the changes in fair value recognized in gains on sales of loans under mortgage banking revenue in the Consolidated Statements of Income. TCF utilizes forward sales contracts to hedge its risk of changes in the fair value, due to changes in interest rates, of both locked residential mortgage loan commitments and its residential loans held for sale. Residential mortgage loans held for sale are carried at the lower of cost or market as adjusted for the effects of fair value hedges using quoted market prices. 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 are not expected to be and were not material due to the nature of the hedging instruments and were recorded in gains on sales of loans. Forward mortgage loan sales commitments totaled $149.1 million at June 30, 2004 and December 31, 2003.

(11) 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 June 30, 2004

Revenues from external customers:
Interest income	$	128,410	$	22,610	$	1,568		$	201		$	—		$	152,789
Non-interest income	105,399		12,391		5,495			8			—			123,293
Total	$	233,809	$	35,001	$	7,063		$	209		$	—		$	276,082

Net interest income	$	105,194	$	14,209	$	2,899		$	(211	)	$	328		$	122,419
Provision for credit losses	544		2,526		—			—			—			3,070
Non-interest income	105,399		12,391		5,824			24,507			(24,828		)	123,293
Non-interest expense	125,855		11,106		7,556			23,889			(24,500		)	143,906
Income tax expense (benefit)	28,697		4,616		412			(207		)	—			33,518
Net income	$	55,497	$	8,352	$	755		$	614		$	—		$	65,218

Total assets	$	11,513,568	$	1,371,163	$	161,355		$	114,795		$	(1,218,018	)	$	11,942,863

At or For the Three Months Ended June 30, 2003

Revenues from external customers:
Interest income	$	139,563	$	20,386	$	4,053		$	2		$	—		$	164,004
Non-interest income	105,625		11,457		(4,694		)	310			—			112,698
Total	$	245,188	$	31,843	$	(641	)	$	312		$	—		$	276,702

Net interest income	$	102,573	$	11,139	$	6,448		$	(282	)	$	(114	)	$	119,764
Provision for credit losses	751		2,376		—			—			—			3,127
Non-interest income	105,625		11,457		(4,809		)	24,288			(23,863		)	112,698
Non-interest expense	122,952		9,335		7,069			21,354			(23,977		)	136,733
Income tax expense (benefit)	29,279		4,026		(1,919		)	925			—			32,311
Net income (loss)	$	55,216	$	6,859	$	(3,511	)	$	1,727		$	—		$	60,291

Total assets	$	11,385,445	$	1,127,015	$	421,573		$	99,095		$	(1,225,364	)	$	11,807,764

(In thousands)	Banking		Leasing and Equipment Finance		Mortgage Banking			Other			Eliminations and Reclassifications			Consolidated
At or For the Six Months Ended June 30, 2004

Revenues from external customers:
Interest income	$	255,438	$	43,478	$	2,688		$	404		$	—		$	302,008
Non-interest income	206,718		22,786		8,950			15			—			238,469
Total	$	462,156	$	66,264	$	11,638		$	419		$	—		$	540,477

Net interest income	$	208,956	$	26,668	$	5,068		$	(423	)	$	643		$	240,912
Provision for credit losses	1,320		2,910		—			—			—			4,230
Non-interest income	206,718		22,786		9,593			48,971			(49,599		)	238,469
Non-interest expense	251,644		20,486		14,165			47,273			(48,956		)	284,612
Income tax expense (benefit)	55,430		9,294		174			(238		)	—			64,660
Net income	$	107,280	$	16,764	$	322		$	1,513		$	—		$	125,879

At or For the Six Months Ended June 30, 2003

Revenues from external customers:
Interest income	$	287,899	$	40,665	$	7,553		$	1		$	—		$	336,118
Non-interest income	203,832		25,064		(5,124		)	322			—			224,094
Total	$	491,731	$	65,729	$	2,429		$	323		$	—		$	560,212

Net interest income	$	209,243	$	21,591	$	11,913		$	(560	)	$	(11	)	$	242,176
Provision for credit losses	1,735		4,102		—			—			—			5,837
Non-interest income	203,832		25,064		(5,136		)	47,627			(47,293		)	224,094
Non-interest expense	244,286		19,701		13,654			45,146			(47,304		)	275,483
Income tax expense (benefit)	57,937		8,470		(2,430		)	555			—			64,532
Net income (loss)	$	109,117	$	14,382	$	(4,447	)	$	1,366		$	—		$	120,418

(12) Earnings Per Common Share

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

	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in thousands, except per-share data)	2004			2003			2004			2003

Basic Earnings Per Common Share

Net income	$	65,218		$	60,291		$	125,879		$	120,418

Weighted average shares outstanding	70,275,061			72,296,586			70,388,080			72,912,263
Unvested restricted stock grants (1)	(1,523,345		)	(1,517,687		)	(1,516,750		)	(1,512,287		)
Weighted average common shares outstanding for basic earnings per common share	68,751,716			70,778,899			68,871,330			71,399,976

Basic earnings per common share	$	.95		$	.85		$	1.83		$	1.69

Diluted Earnings Per Common Share

Net income	$	65,218		$	60,291		$	125,879		$	120,418

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	68,751,716			70,778,899			68,871,330			71,399,976
Net dilutive effect of:
Stock option grants	91,395			77,775			90,970			87,258
Restricted stock grants (1)	220,637			152,993			208,081			161,435
	69,063,748			71,009,667			69,170,381			71,648,669

Diluted earnings per common share	$	.94		$	.85		$	1.82		$	1.68

(1) At June 30, 2004 and 2003, there were 1,071,123 shares 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.

(13) 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 June 30,						Six Months Ended June 30,
(In thousands)	2004			2003			2004			2003
Net income	$	65,218		$	60,291		$	125,879		$	120,418

Other comprehensive income (loss) before tax:
Unrealized holding gains (losses) arising during the period on securities available for sale	(42,953		)	14,672			(19,060		)	12,843

Reclassification adjustment for gains included in net income	—			(11,695		)	(12,717		)	(32,832		)

Income tax expense (benefit)	(15,463		)	1,080			(11,462		)	(7,246		)

Total other comprehensive income (loss), net of tax	(27,490		)	1,897			(20,315		)	(12,743		)

Comprehensive income	$	37,728		$	62,188		$	105,564		$	107,675

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Item 2. – Management’s Discussion and Analysis of Financial
Condition and Results of Operations

OVERVIEW

TCF is a national financial holding company located in Wayzata, Minnesota. Its principal subsidiary, TCF National Bank, is headquartered in Minnesota and had 411 banking offices in Minnesota, Illinois, Michigan, Wisconsin, Colorado and Indiana at June 30, 2004.

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 all 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 net interest income and fees and other revenue growth through business lines that emphasize higher yielding assets and lower or no interest-cost deposits. The Company’s growth strategies include new branch expansion and the development of new products and services. New products and services are designed to build on existing businesses and expand into complementary products and services through strategic initiatives.

TCF’s core businesses are comprised of traditional and supermarket bank branches, campus banking, EXPRESS TELLER^® ATMs, VISA^® debit cards, commercial banking, small business banking, consumer lending, mortgage banking, leasing and equipment finance and investment, brokerage and insurance services. 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.

At June 30, 2004, 237, or 58%, of TCF’s 411 branches were opened since January 1, 1998 and consist of 189 supermarket branches and 48 traditional branches. Opening new branches is an integral part of TCF’s growth strategy for generating new deposit accounts and the related revenue that is associated with the accounts and other products. New branches typically produce net losses during the first 24-36 months of operations before they become profitable, and therefore the level and timing of new branch expansion can have a significant impact on TCF’s profitability. TCF’s growth in checking accounts is primarily occurring in new branches with growth in older, mature branches being slower and more difficult to generate. The success of TCF’s branch expansion is dependent on the continued long-term success and viability of branch banking. Success in supermarket branches is also dependent on the success and viability of the supermarket branch locations. Economic slowdowns, financial or labor difficulties and competitive pressures may have an adverse impact on the supermarket industry and therefore reduce customer activity in TCF’s supermarket branches. TCF is subject to the risk, among others, that its license for supermarket branches will terminate in connection with the sale or closure of a store by a supermarket chain.

TCF’s lending strategy is to originate high credit quality, primarily secured, loans and leases. Commercial loans are generally made on local properties or to local customers. TCF’s largest core lending business is its consumer home equity loan operation, which offers fixed- and variable-rate loans and lines of credit secured by residential real estate properties. The leasing and equipment finance businesses consist of Winthrop Resources Corporation (“Winthrop”), a leasing company that leases technology and data processing equipment, TCF Leasing, Inc. (“TCF Leasing”), a general leasing and equipment finance business and VGM Leasing, Inc. (“VGM”), a wholly-owned subsidiary of TCF Leasing, acquired in March 2004, specializing in home medical equipment financing. TCF’s leasing and equipment finance businesses operate in all 50 states.

As a primarily secured lender, TCF emphasizes credit quality over asset growth. As a result, TCF’s credit losses are generally lower than those experienced by other banks. The allowance for loan and lease losses, while generally lower as a percent of loans and leases than the average in the banking industry, reflects the lower historical charge-offs and management’s expectation of the risk of loss inherent in the loan and lease portfolio. See “Consolidated Financial Condition Analysis-Allowance for Loan and Lease Losses.”

Net interest income, the difference between interest income earned on loans and leases and on investments and interest expense paid on deposits and short-term and long-term borrowings, represents 49.8% of TCF’s total revenue. Net interest income can change significantly from period to period based on general levels of interest rates, customer prepayment patterns, the mix of interest earning assets and the mix of interest bearing and non-interest bearing deposits and borrowings. TCF manages the risk of changes in interest rates on its net interest income through an Asset/Liability Committee and through related interest rate risk monitoring and management policies. TCF does not utilize any unconsolidated subsidiaries or special purpose entities to provide off-balance sheet borrowings. See “Interest – Rate Risk” for further discussion of TCF’s interest rate risk position.

The Company’s VISA^Ò debit card program has grown significantly since its inception in 1996. TCF is one of the largest issuers of VISA^Ò Classic debit cards in the United States. TCF earns interchange revenue from customer debit card transactions. During the second quarter of 2004, 88.6% of TCF’s debit card sales volume was generated from off-line (signature-based) transactions. The average interchange rate on these off-line transactions declined from 1.63% for the second quarter of 2003 to 1.44% for the second quarter of 2004. The decline in the average off-line interchange rate was the result of VISA^Ò USA lowering interchange rates for many merchants effective August 1, 2003, as part of the settlement of class action lawsuits brought by these merchants against VISA challenging rules imposed by VISA governing the acceptance of debit cards by merchants. Additionally, as part of the settlement, VISA established new interchange rates which took effect in February 2004, and these rates increased from the rates established August 1, 2003. In late 2003, TCF renegotiated its contract with VISA and agreed to an extension through 2013. The effect of this new contract lowers various costs that TCF pays for processing and marketing of the VISA debit cards. The continued success of TCF’s debit card program is dependent on the success and viability of VISA and the continued use by customers and acceptance by merchants of its debit cards.

TCF’s mortgage banking business originates residential mortgage loans and sells them to investors, primarily retaining the servicing rights and related servicing revenue. Generally accepted accounting principles require TCF to record the value of the servicing rights on the balance sheet at the time the loans are sold. Capitalized servicing rights are amortized based on the expected pattern and life of related servicing revenues and are also evaluated quarterly for impairment. As interest rates fall, there is a higher probability of prepayment as the customer can generally refinance the loan with relative ease. In addition, as property values increase, customers’ home equity increases, enabling customers to engage in “cash-out” refinance transactions where the customer refinances an existing mortgage into a higher balance loan in order to draw out the increased home equity. At June 30, 2004, 67% of TCF’s third party servicing portfolio consisted of loans with interest rates below 6%. If interest rates remain at current levels or increase in 2004, there should be reduced refinance activity and reduced related amortization and provision for impairment as compared with 2003. TCF does not utilize derivatives to manage the impairment risk in its capitalized mortgage servicing rights. Subsequent to June 30, 2004, TCF’s mortgage banking business stopped originating residential mortgage loans through its wholesale network. During the first six months of 2004, TCF’s mortgage banking business funded $233.1 million, or 39.7%, of its total residential mortgage loans through this wholesale network. TCF is evaluating other alternatives for its origination and servicing businesses.

The following portions of the Management’s Discussion and Analysis focus in more detail on the results of operations for the three and six months ended June 30, 2004 and 2003 and on information about TCF’s balance sheet, credit quality, liquidity and funding resources, capital and other matters.

RESULTS OF OPERATIONS

Performance Summary

TCF reported diluted earnings per common share of 94 cents and $1.82 for the second quarter and first six months of 2004, respectively, compared with 85 cents and $1.68 for the same periods of 2003. Net income was $65.2 million and $125.9 million for the second quarter and first six months of 2004, respectively, compared with $60.3 million and $120.4 for the same 2003 periods. For the second quarter and first six months of 2004, return on average assets were 2.20% and 2.15%, respectively, compared with 2.04% and 2.02% for the same 2003 periods and return on average common equity were 27.68% and 26.82%, respectively, up from 25.17% and 24.95% for the same 2003 periods.

Operating Segment Results

BANKING, comprised of deposits and investment products, commercial banking, small business banking, consumer lending, residential lending and treasury services, reported net income of $55.5 million and $107.3 million for the second quarter and first six months of 2004, respectively, compared with $55.2 million and $109.1 million for the same 2003 periods. Banking net interest income for the second quarter and first six months of 2004 was $105.2 million and $209 million, respectively, compared with $102.6 million and $209.2 million for the same 2003 periods. The provision for credit losses totaled $544 thousand and $1.3 million for the second quarter and first six months of 2004, respectively, down from $751 thousand and $1.7 million for the same 2003 periods. Non-interest income totaled $105.4 million and $206.7 million for the second quarter and first six months of 2004, respectively, compared with $105.6 million and $203.8 million for the same 2003 periods. During the second quarter of 2003, TCF sold mortgage-backed securities and realized gains of $11.7 million, compared with no sales or gains during the second quarter of 2004. Also in the first quarter of 2003, TCF prepaid $150 million of Federal Home Loan Bank (“FHLB”) advances and recorded losses on termination of debt of $6.6 million. There were no similar debt terminations during the first six months of 2004. See “Results of Operations – Consolidated Net Interest Income” for further discussion of the sales of mortgage-backed securities. In addition to the gains and losses discussed above, fees, service charges, debit card and other revenues were $103.7 million and $190.3 million for the second quarter and first six months of 2004, respectively, up from $92.6 million and $174.1 million for the same periods of 2003. These increases resulted from TCF’s expanding branch network and customer base, new products and services, and increased fees. Non-interest expense totaled $125.9 million and $251.6 million for the second quarter and first six months of 2004, respectively, compared with $123 million and $244.3 million for the same 2003 periods. The increases were primarily due to costs associated with new branch expansion.

TCF had 411 branches, including 241 full service branches in supermarkets at June 30, 2004. During the second quarter of 2004, TCF opened five new branches, including four traditional branches and one supermarket branch and has opened nine new branches, including six traditional branches, in the first six months of 2004. Since January 1, 1998, TCF has opened 237 new branches. TCF plans to open 24 more new branches in the remainder of 2004, consisting of 16 traditional branches and eight supermarket branches. See “Consolidated Financial Condition Analysis – New Branch Expansion” for further information.

LEASING AND EQUIPMENT FINANCE, an operating segment comprised of TCF’s wholly-owned subsidiaries Winthrop and TCF Leasing, which includes TCF Leasing’s newly acquired subsidiary VGM, provides a broad range of comprehensive lease and equipment finance products. During the first quarter of 2004, TCF Leasing acquired VGM, a company specializing in financing to dealers of home medical equipment. At June 30, 2004, VGM had approximately $128 million in leasing and equipment finance portfolio balance. This operating segment reported net income of $8.4 million and $16.8 million for the second quarter and first six months of 2004, respectively, up from $6.9 million and $14.4 million, for the same 2003 periods. Net interest income for the second quarter and first six months of 2004 was $14.2 million, and $26.7 million, respectively, up from $11.1 million and $21.6 million for the

same 2003 periods. The provision for credit losses for this operating segment totaled $2.5 million and $2.9 million the second quarter and first six months, respectively, compared with $2.4 million and $4.1 million for the same periods in 2003. Non-interest income totaled $12.4 million for the second quarter of 2004, up from $11.5 million for the second quarter of 2003. Non-interest income for the first six months of 2004 totaled $22.8 million, down from $25.1 million for the same 2003 period. This decline was primarily the result of a $3.9 million decline in lease revenues in Winthrop. Leasing and Equipment Finance revenues may fluctuate from quarter to quarter based on customer driven factors not entirely within the control of TCF. Non-interest expense totaled $11.1 million and $20.5 million for the second quarter and first six months of 2004, respectively, up from $9.3 million and $19.7 million for the same 2003 periods. Included in non-interest expenses for the second quarter and first six months of 2004, was an impairment charge of $1 million related to a reduction in the estimated residual value of a leveraged lease investment.

MORTGAGE BANKING activities include the origination of residential mortgage loans, generally for sale to third parties with servicing retained. This operating segment reported net income of $755 thousand and $322 thousand for the second quarter and first six months of 2004, respectively, compared with a net loss of $3.5 million and $4.4 million for the same 2003 periods. Non-interest income totaled $5.8 million and $9.6 million for the second quarter and first six months of 2004, respectively, up from a negative $4.8 million and a negative $5.1 million for the same 2003 periods. The increases in non-interest income were primarily due to declines in amortization and provision for impairment of mortgage servicing rights related to lower levels of prepayments partially offset by declines in gains on sales of loans. TCF’s mortgage banking operations funded $345.4 million and $587.2 million in loans during the second quarter and first six months of 2004, down 65.1% and 65.9%, respectively, from $990.4 million and $1.7 billion for the same 2003 periods. Mortgage applications in process (mortgage pipeline) decreased from June 30, 2003, to $308.4 million at June 30, 2004 as refinance activity has declined as a result of higher mortgage interest rates. See Note 5 of Notes to the Consolidated Financial Statements for further discussion. Mortgage Banking’s non-interest expense totaled $7.6 million and $14.2 million for the second quarter and first six months of 2004, respectively, compared with $7.1 million and $13.7 million for the same 2003 periods.

Consolidated Net Interest Income

Net interest income for the second quarter of 2004 was $122.4 million, up from $119.8 million for the second quarter of 2003 and $118.5 million for the 2004 first quarter. Net interest income for the first six months of 2004 was $240.9 million, down from $242.2 million for the same period in 2003. The net interest margin for the second quarter 2004 was 4.53%, compared with 4.45% for the same 2003 period and 4.52% for the first quarter of 2004. The increases in net interest income and net interest margin from the second quarter of 2003 primarily reflect the effects of the overall decline in rates on interest-earning assets being less than the decline in rates on interest-bearing liabilities partially driven by the long-term debt terminations in 2003. In addition, average consumer, commercial and leasing and equipment finance balances increased $1 billion over the second quarter of 2003, while residential real estate loans and mortgage-backed securities (“MBS’s”) declined $849.1 million during the same period. The decline in residential real estate loans and MBS’s reflects management’s decision to delay investing in long-term fixed-rate residential real estate loans and MBS’s during the very low interest rate environment. The increases in net interest income and net interest margin in the second quarter from the first quarter of 2004 were primarily driven by a $332.4 million, or 3%, increase in interest-earning assets.

The following table summarizes the average balances and the related yields and rates on interest-earning assets and deposits and borrowings for the three and six months ended June 30, 2004 and 2003:

	Three Months Ended June 30,
	2004				2003				Change
(Dollars in thousands)	Average Balance		Yields and Rates (1)		Average Balance		Yields and Rates (1)		Average Balance			Yields and Rates (bps)
Interest-earning Assets:
Investments	$	157,591	2.28	%	$	123,028	3.84	%	$	34,563		(156	)
Securities available for sale (2)	1,546,694		5.28		2,032,384		5.41		(485,690		)	(13	)
Loans held for sale	385,193		3.49		534,435		4.34		(149,242		)	(85	)
Loans and leases:
Consumer	3,904,194		6.02		3,203,226		6.66		700,968			(64	)
Commercial real estate	1,985,498		5.41		1,848,055		6.05		137,443			(64	)
Commercial business	428,602		4.09		467,368		4.36		(38,766		)	(27	)
Leasing and equipment finance	1,285,989		7.03		1,061,315		7.68		224,674			(65	)
Subtotal	7,604,283		5.92		6,579,964		6.49		1,024,319			(57	)
Residential real estate	1,123,062		5.73		1,486,518		6.19		(363,456		)	(46	)
Total loans and leases (3)	8,727,345		5.90		8,066,482		6.44		660,863			(54	)
Total interest-earning assets	10,816,823		5.67		10,756,329		6.11		60,494			(44	)
Deposits and Borrowings:
Deposits:
Checking	3,596,808		.08	%	3,041,711		.03	%	555,097			5
Savings	1,982,818		.32		2,154,317		.43		(171,499		)	(11	)
Money market	799,485		.37		897,154		.53		(97,669		)	(16	)
Subtotal	6,379,111		.19		6,093,182		.24		285,929			(5	)
Certificates	1,467,654		1.77		1,825,466		2.59		(357,812		)	(82	)
Total deposits	7,846,765		.49		7,918,648		.79		(71,883		)	(30	)
Borrowings:
Short-term borrowings	669,938		1.27		544,136		1.30		125,802			(3	)
Long-term borrowings	2,017,232		3.80		1,962,893		5.55		54,339			(175	)
Total borrowings	2,687,170		3.17		2,507,029		4.63		180,141			(146	)

Total deposits and borrowings	10,533,935		1.17		10,425,677		1.71		108,258			(54	)

Net interest-earning assets and net interest margin	$	282,888	4.53		$	330,652	4.45		$	(47,764	)	8

	Six Months Ended June 30,
	2004				2003				Change
(Dollars in thousands)	Average Balance		Yields and Rates (1)		Average Balance		Yields and Rates (1)		Average Balance			Yields and Rates (bps)
Interest-earning Assets:
Investments	$	149,681	2.24	%	$	120,939	4.30	%	$	28,742		(206	)
Securities available for sale (2)	1,533,034		5.32		2,185,840		5.60		(652,806		)	(28	)
Loans held for sale	372,215		3.34		511,400		4.34		(139,185		)	(100	)
Loans and leases:
Consumer	3,805,128		6.06		3,125,941		6.77		679,187			(71	)
Commercial real estate	1,963,996		5.45		1,848,090		6.10		115,906			(65	)
Commercial business	428,213		4.09		453,104		4.39		(24,891		)	(30	)
Leasing and equipment finance	1,240,112		7.01		1,050,325		7.74		189,787			(73	)
Subtotal	7,437,449		5.95		6,477,460		6.57		959,989			(62	)
Residential real estate	1,158,248		5.76		1,582,809		6.32		(424,561		)	(56	)
Total loans and leases (3)	8,595,697		5.92		8,060,269		6.52		535,428			(60	)
Total interest-earning assets	10,650,627		5.69		10,878,448		6.21		(227,821		)	(52	)
Deposits and Borrowings:
Deposits:
Checking	3,463,096		.06	%	2,950,419		.04	%	512,677			2
Savings	1,953,056		.34		2,106,197		.57		(153,141		)	(23	)
Money market	816,090		.37		891,882		.62		(75,792		)	(25	)
Subtotal	6,232,242		.19		5,948,498		.31		283,744			(12	)
Certificates	1,523,881		1.86		1,863,092		2.69		(339,211		)	(83	)
Total deposits	7,756,123		.52		7,811,590		.88		(55,467		)	(36	)
Borrowings:
Short-term borrowings	702,707		1.28		706,035		1.31		(3,328		)	(3	)
Long-term borrowings	1,914,870		3.90		2,021,478		5.56		(106,608		)	(166	)
Total borrowings	2,617,577		3.19		2,727,513		4.46		(109,936		)	(127	)

Total deposits and borrowings	10,373,700		1.19		10,539,103		1.80		(165,403		)	(61	)

Net interest-earning assets and net interest margin	$	276,927	4.52		$	339,345	4.45		$	(62,418	)	7

bps = basis points

(1) Annualized.

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

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

The following table presents the components of the changes in net interest income by volume and rate:

	Three Months Ended June 30, 2004 Versus Same Period in 2003									Six Months Ended June 30, 2004 Versus Same Period in 2003
	Increase (Decrease) Due to									Increase (Decrease) Due to
(In thousands)	Volume (1)			Rate (1)			Total			Volume (1)			Rate (1)			Total
Interest Income:
Investments	$	274		$	(558	)	$	(284	)	$	516		$	(1,430	)	$	(914	)
Securities available for sale	(6,424		)	(646		)	(7,070		)	(17,488		)	(3,014		)	(20,502		)
Loans held for sale	(1,435		)	(1,013		)	(2,448		)	(2,625		)	(2,208		)	(4,833		)
Loans and leases:
Consumer	10,733			(5,545		)	5,188			21,211			(11,370		)	9,841
Commercial real estate	1,945			(3,112		)	(1,167		)	3,370			(6,068		)	(2,698		)
Commercial business	(413		)	(310		)	(723		)	(525		)	(632		)	(1,157		)
Leasing and equipment finance	4,055			(1,831		)	2,224			6,892			(4,079		)	2,813
Residential real estate	(5,309		)	(1,626		)	(6,935		)	(12,515		)	(4,145		)	(16,660		)
Total interest income	890			(12,105		)	(11,215		)	(6,943		)	(27,167		)	(34,110		)
Interest expense:
Checking	47			438			485			106			484			590
Savings	(50		)	(680		)	(730		)	(118		)	(2,496		)	(2,614		)
Money market	(119		)	(343		)	(462		)	(216		)	(1,022		)	(1,238		)
Certificates of deposit	(2,040		)	(3,291		)	(5,331		)	(4,002		)	(6,712		)	(10,714		)
Short-term borrowings	393			(37		)	356			(22		)	(102		)	(124		)
Long-term borrowings	720			(8,908		)	(8,188		)	(2,826		)	(15,920		)	(18,746		)
Total interest expense	449			(14,319		)	(13,870		)	(1,463		)	(31,383		)	(32,846		)
Net interest income	677			1,978			2,655			(5,118		)	3,854			(1,264		)

(1) Changes attributable to the combined impact of volume and rate have been allocated proportionately to the change due to volume and the change due to rate.

Changes in net interest income are dependent upon the movement of interest rates, the volume and mix of interest-earning assets and deposits and borrowings and the level of non-performing assets. Achieving net interest margin growth over time is dependent on TCF’s ability to generate higher-yielding assets and lower-cost retail deposits. The net impact of the changes in interest-bearing assets and deposits and borrowings has positioned TCF to be more asset sensitive (i.e. more assets than liabilities will be maturing, repricing, or prepaying during the next twelve months). TCF has positioned its balance sheet to benefit from a rising interest rate environment. An increase in interest rates would affect TCF’s fixed-rate/variable-rate product origination mix and would extend the estimated life of its residential real estate loan and mortgage-backed securities portfolios. A change in origination mix and/or the extending of the estimated life of mortgage-related assets may have an adverse impact on future net interest income or net interest margin. Competition for checking, savings and money market deposits, important sources of lower-cost funds for TCF, is intense. A decline in these low-cost deposits may have an adverse impact on future net interest income or net interest margin as TCF would need to replace these funds with short- or long-term borrowings which may have a higher interest cost. See “Market Risk – Interest-Rate Risk” and “Consolidated Financial Condition Analysis – Deposits” for further discussion on TCF’s interest rate risk position.

Consolidated Provision for Credit Losses

TCF provided $3.1 million and $4.2 million for credit losses in the second quarter and first six months of 2004, respectively, compared with $3.1 million and $5.8 million for the same periods in 2003. Net loan and lease charge-offs were $2.1 million, or .10% (annualized), and $2.6 million, or .06% (annualized), of average loans and leases in the second quarter and first six months of 2004, respectively, down from $3.2 million, or .16% (annualized), and $5.1 million, or .13% (annualized), of average loans and leases for the same 2003 periods. Leasing and equipment finance had net charge-offs of $1.3 million during the first six months of 2004, compared with net charge-offs of $3 million for the same period in 2003. 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 estimate which involves a number of factors such as net charge-offs,

delinquencies in the loan and lease portfolio, value of collateral, general economic conditions and management’s assessment of credit risk in the current loan and lease portfolio. Also see “Consolidated Financial Condition Analysis – Allowance for Loan and Lease Losses.”

Consolidated Non-Interest Income

Non-interest income is a significant source of revenue for TCF and is 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. Total non-interest income was $123.3 million and $238.5 million for the second quarter and first six months of 2004, respectively, compared with $112.7 million and $224.1 million for the same periods in 2003. Significantly contributing to the increase in non-interest income during the second quarter and first six months of 2004 were increases in fees and service charges and improved mortgage banking revenues.

Fees and Service Charges

Fees and service charges increased $10.3 million, or 16.4%, to $73.1 million for the second quarter of 2004, compared with $62.8 million for the same period of 2003. Fees and service charges increased $15.6 million, or 13.3%, to $132.8 million for the first six months of 2004, compared with $117.2 million for the same period of 2003. This increase primarily reflects the impact of TCF’s expanding branch network and customer base, new products and services, and increased fees. TCF’s checking account customer base increased 30,241 accounts, or 8.2% (annualized), in the second quarter of 2004 to 1,502,856 accounts and was up 111,002 accounts, or 8.0%, from June 30, 2003.

Debit Card Revenue

For the second quarter of 2004, debit card revenue, primarily interchange fees, totaled $16 million, up $1.3 million, or 8.5%, from the second quarter of 2003. For the first six months of 2004, debit card revenue totaled $29.5 million, up $1.5 million, or 5.4%, from the first six months of 2003. Interchange fees have been adversely impacted as a result of the settlement of litigation against VISA^Ò USA in the second quarter of 2003. As part of the settlement, VISA lowered interchange rates for certain merchants from August 2003 through February 2004. Additionally, as part of the settlement, VISA established new interchange rates, which took effect in February 2004, and these rates increased from the rate established August 1, 2003. The increase in debit card revenue for the quarter and for the first six months of 2004, was aided by a 19% increase in off-line sales volumes for both the quarter and first six months, partially offset by declines in average off-line interchange rates during the same periods.

The following table sets forth information about TCF’s debit cards:

	At June 30,						Change
(Dollars in thousands)	2004			2003			Amount		%

Average number of checking accounts with debit cards	1,331,275			1,179,947			151,328		12.8	%

Number of checking accounts who were active users	710,688			645,364			65,324		10.1

Average number of transactions per month on active debit cards for the quarter ended	13.5			12.6			0.9		7.1

Sales volume for the quarter ended:
Off-line (Signature)	$	1,047,687		$	877,291		$	170,396	19.4
On-line (PIN)	134,505			83,595			50,910		60.9
Total	$	1,182,192		$	960,886		$	221,306	23.0
Off-line sales volume as a percentage of total	88.6		%	91.3		%			(270	)bps

Average off-line interchange rate for the quarter	1.44		%	1.63		%			(19	)

ATM Revenue

For the second quarter and first six months of 2004, ATM revenue was $11.1 million and $21.1 million, respectively, down slightly from $11.2 million and $21.7 million for the same periods of 2003. The decline in ATM revenue in the second quarter and first six months of 2004 was attributable to the continued decline in utilization of non-owned ATM machines by TCF customers and declines in utilization of TCF’s ATM machines by non-customers. At June 30, 2004, TCF had 1,121 EXPRESS TELLER^Ò ATM machines, compared with 1,160 machines at June 30, 2003.

Leasing and Equipment Finance Revenue

Leasing and equipment finance revenues totaled $12.2 million and $22.4 million for the second quarter and first six months of 2004, respectively, compared with $11.5 million and $25.1 million for the same 2003 periods. The decline in leasing and equipment finance revenues for the first six months of 2004 compared with 2003 is primarily the result of a $3.9 million decline in lease revenues in Winthrop. Leasing and equipment finance revenues may fluctuate from quarter to quarter based on customer-driven factors not entirely within the control of TCF.

Mortgage Banking Revenue

Mortgage banking revenue increased $9.5 million, to $4.8 million in the second quarter of 2004, compared with a negative $4.7 million for the same 2003 period. Mortgage banking revenue increased $13.4 million, to $8.2 million in the first six months of 2004, compared with a negative $5.2 million for the first six months of 2003. The increases in mortgage banking revenue were primarily due to declines in amortization and provision for impairment of mortgage servicing rights related to lower levels of prepayments partially offset by declines in gains on sales of loans.

The following table sets forth information about mortgage banking revenues:

	Three Months Ended June 30,					Change					Six Months Ended June 30,					Change
(Dollars in thousands)	2004		2003			$			%		2004		2003			$			%

Servicing income	$	4,339	$	5,363		$	(1,024	)	(19.1	)%	$	8,964	$	10,796		$	(1,832	)	(17.0	)%
Less mortgage servicing:
Amortization	3,242		8,345			(5,103		)	(61.2	)	6,918		16,146			(9,228		)	(57.2	)
Impairment	—		14,000			(14,000		)	(100.0	)	—		23,500			(23,500		)	(100.0	)
Subtotal	3,242		22,345			(19,103		)	(85.5	)	6,918		39,646			(32,728		)	(82.6	)
Net servicing income (loss)	1,097		(16,982		)	18,079			N.M.		2,046		(28,850		)	30,896			N.M.
Gains on sales of loans	3,168		10,963			(7,795		)	(71.1	)	5,304		21,589			(16,285		)	(75.4	)
Other income	525		1,291			(766		)	(59.3	)	895		2,103			(1,208		)	(57.4	)
Total mortgage banking revenue	$	4,790	$	(4,728	)	$	9,518		N.M.		$	8,245	$	(5,158	)	$	13,403		N.M.

N.M. Not meaningful

The following table sets forth further information about mortgage banking:

	At			At
	June 30,			December 31,			Change
(Dollars in thousands)	2004			2003			$			%

Third party servicing portfolio	$	4,767,810		$	5,122,741		$	(354,931	)	(6.9	)%
Weighted average note rate	5.83		%	5.97		%	(14		)bps	N.A.

Mortgage applications in process	$	308,377		$	241,126		$	67,251		27.9

Capitalized mortgage servicing rights, net	$	51,290		$	52,036		$	(746	)	(1.4	)

Mortgage servicing rights as a percentage of servicing portfolio	1.08		%	1.02		%	6		bps	N.A.

Average service fee (basis points)	31.3		bps	31.7		bps	(.4		)bps	N.A.

Mortgage servicing rights as a multiple of average service fee	3.5		X	3.2		X	0.3		X	N.A.

N.A. Not applicable.

Mortgage banking revenues can be significantly impacted by the amount of amortization and provision for impairment of mortgage servicing rights. The valuation of mortgage servicing rights is a critical accounting estimate for TCF. This estimate is based upon loan types, note rates and prepayment assumptions. 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 assumed underlying portfolio declines and also may result in impairment as the value of the mortgage servicing rights decline. TCF periodically evaluates its capitalized mortgage servicing rights for impairment. A key component in determining the fair value of mortgage servicing rights is the projected cash flows of the underlying loan portfolio. TCF uses projected cash flows and related prepayment assumptions based on management’s best estimates. The range in prepayment assumptions at June 30, 2004 and December 31, 2003 reflects management’s assumption of higher initial prepayments in early periods that decline over time and level off to a constant prepayment speed. See Note 5 of Notes to the Consolidated Financial Statements for additional information concerning TCF’s mortgage servicing rights.

The following tables summarize the servicing portfolio by interest rate tranche, the range of prepayment speed assumptions and the weighted average remaining life of the loans by interest tranche used in the determination of the valuation and amortization of mortgage servicing rights as of June 30, 2004 and December 31, 2003:

	June 30, 2004
(Dollars in thousands)			Prepayment Speed Assumption						Weighted
	Principal						Weighted		Average Life
Interest Rate Tranche	Balance		High		Low		Average		(in Years)
0 to 5.50%	$	1,755,330	15.9	%	10.6	%	11.2	%	7.8
5.51 to 6.00%	1,442,946		18.2		12.1		12.6		7.5
6.01 to 6.50%	729,313		24.9		16.6		17.6		5.4
6.51 to 7.00%	537,596		32.3		21.5		23.3		3.8
7.01% and higher	302,625		38.9		25.9		28.4		2.9
	$	4,767,810	20.0		13.3		14.0		6.6

	December 31, 2003
(Dollars in thousands)			Prepayment Speed Assumption						Weighted
	Principal						Weighted		Average Life
Interest Rate Tranche	Balance		High		Low		Average		(in Years)
0 to 5.50%	$	1,648,918	15.1	%	13.0	%	13.3	%	7.2
5.51 to 6.00%	1,407,315		20.5		17.7		17.9		5.6
6.01 to 6.50%	830,161		28.8		24.9		25.4		3.8
6.51 to 7.00%	740,675		35.9		31.0		31.8		2.7
7.01% and higher	495,672		39.8		34.4		35.5		2.3
	$	5,122,741	21.6		18.6		19.0		5.1

At June 30, 2004 and December 31, 2003, the sensitivity of the current fair value of mortgage servicing rights to a hypothetical immediate 10% and 25% adverse change in prepayment speed assumptions and discount rate are as follows:

(Dollars in millions)	At June 30, 2004			At December 31, 2003

Fair value of mortgage servicing rights	$	64.6		$	58.0
Weighted-average life (in years)	6.6			5.1
Weighted-average prepayment speed assumption (annual rate)	14.0		%	19.0		%
Weighted-average discount rate	7.5		%	7.5		%
Impact on fair value of 10% adverse change in prepayment speed assumptions	$	(3.1	)	$	(3.2	)
Impact on fair value of 25% adverse change in prepayment speed assumptions	$	(7.3	)	$	(7.4	)
Impact on fair value of 10% adverse change in discount rate	$	(1.5	)	$	(1.3	)
Impact on fair value of 25% adverse change in discount rate	$	(3.9	)	$	(3.3	)

These sensitivities are theoretical and should be used with caution. As the data indicates, 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. As reflected above, a significant increase in future prepayment speeds can have a significant impact on the impairment of the mortgage servicing rights. TCF does not use derivatives to hedge its mortgage servicing rights asset.

Other Non-Interest Income

In the second quarter of 2003, gains on sales of securities available for sale of $11.7 million were recognized, on sales of $289.2 million in mortgage-backed securities. There were no sales of mortgage-backed securities in the second quarter of 2004. Gains on sales of securities available for sale of $12.7 million were recognized on sales of $854 million in mortgage-backed securities in the first six months of 2004 compared to gains on sale of securities available for sale of $32.8 million on the sale of $816.5 million in mortgage-backed securities during the first six months of 2003. During the first six months of 2003, TCF prepaid $150 million of higher cost FHLB advances and recorded losses on termination of debt of $6.6 million. There were no similar prepayments of debt in 2004.

Additionally, during the second quarter of 2004, TCF completed the sale of servicing rights on $126.6 million of residential mortgages and recognized a $706 thousand gain on the sale of servicing. There were no similar sales of mortgage servicing rights during 2003.

Consolidated Non-Interest Expense

Non-interest expense totaled $143.9 million for the second quarter 2004, up 5.2%, from $136.7 million for the same 2003 period. For the first six months of 2004 non-interest expense totaled $284.6 million, up 3.3%, from $275.5 million for the same 2003 period. Compensation and employee benefits expense totaled $79.6 million and $158.5 million for the 2004 second quarter and first six months, respectively, up from $73.8 million, and $150.4 million for the comparable periods in 2003. The increase from the second quarter of 2003 was driven by a $1.6 million increase related to new branches opened in the past 12 months coupled with a $1.2 million increase in incentive compensation resulting from improved profitability. Contributing to the increase for the first six months of 2004, was a $5.8 million increase in retail banking operations driven by TCF’s continued new branch expansion. Occupancy and equipment expense totaled $23.4 million and $46.9 million for the second quarter and first six months 2004, respectively, up $1.9 million and $3.8 million from the same 2003 periods, primarily the result of costs associated with new branch expansion. Advertising and promotions totaled $6.5 million and $12.4 million for the second quarter and first six months of 2004, respectively, compared with $6.4 million and $12.8 million for the same 2003 periods. Other non-interest expense totaled $34.4 million and $66.8 million for the second quarter and first six months of 2004, respectively, reflecting a decrease of 1.5% from $35 million and 3.3% from $69.2 million for the same periods in 2003. The decreases in other non-interest expense were primarily due to reductions in real estate owned expenses of $1.5 million and $1.7 million for second quarter and first six months of 2004, respectively. Included in real estate owned expenses were net gains on sales and redemptions of properties of $2.1 million during the second quarter of 2004, compared with $92 thousand in 2003. Other non-interest expense also includes deposit account losses of $5.4 million and $9.5 million for the second quarter and first six months of 2004, respectively, compared with $4.2 million and $7.8 million for the same 2003 periods. As mentioned in Leasing and Equipment Finance operating segment results, TCF recorded a $1 million impairment charge related to a reduction in the estimated residual value of a leveraged lease investment during the second quarter of 2004.

Income Taxes

TCF recorded income tax expense of $33.5 million and $64.7 million for the second quarter and first six months of 2004, respectively, or 33.9% of income before income tax expense, compared with $32.3 million and $64.5 million, or 34.9% of income before income tax expense for the comparable 2003 periods. The lower effective tax rate in 2004 was primarily due to increased investments in affordable housing partnerships.

TCF has a Real Estate Investment Trust (“REIT”) 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 REIT must meet specific provisions of the Internal Revenue Code (“IRC”) to continue to qualify as a REIT. Two specific provisions applicable to the REIT are an income test and an asset test. At least 75% of the 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 the REIT’s assets must be represented by real estate assets. At June 30, 2004, TCF’s REIT met the applicable provisions of the IRC to qualify as a REIT. State laws may also impose limitations or restrictions on operations of the REIT and the related companies. These laws are subject to change and are currently under review in Minnesota and Illinois. If these companies fail to meet any of the required provisions of Federal and state tax laws or if the state tax laws change unfavorably, TCF’s tax expense could increase.

The determination of current and deferred income taxes is a critical accounting estimate which is based on complex analyses of many factors including interpretation of Federal and state income tax laws, the differences between the tax and financial reporting bases 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 Federal and state taxing authorities. Actual results could differ significantly from the estimates and tax law interpretations used in determining the current and deferred income tax liabilities. In addition, under generally accepted accounting principles, deferred income tax assets and liabilities are recorded at the current prevailing Federal and state income tax rates. If such rates change, deferred income tax assets and liabilities must be adjusted in the period of change through a charge or credit to the Consolidated Statements of Income.

CONSOLIDATED FINANCIAL CONDITION ANALYSIS

Investments

Total investments, which include interest-bearing deposits with banks, federal funds sold, FHLB stock, Federal Reserve Bank stock and other investments, were $94.6 million at June 30, 2004, up $19.3 million from December 31, 2003. The increase was primarily the result of a $19.5 million increase in FHLB stock. TCF is required to invest in FHLB stock in proportion to its level of mortgage assets and the level of borrowings from the FHLB.

Securities Available for Sale

The Company purchased $1.2 billion and $818.3 million of mortgage-backed securities during the first six months of 2004 and 2003, respectively, to replace the prepayments of residential real estate loans and mortgage-backed securities. TCF sold $854 million and $816.5 million of mortgage-backed securities during the first six months of 2004 and 2003, respectively. At June 30, 2004, the unrealized loss on TCF’s mortgage-backed securities available for sale portfolio was $22.9 million. TCF may, from time to time, sell additional mortgage-backed securities, capture the gains before these securities prepay and utilize the proceeds to either reduce borrowings or to fund growth in loans and leases.

Loans and Leases

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

	At June 30,			At December 31,			Change
(Dollars in thousands)	2004			2003			$			%
Consumer:
Home equity	$	3,985,448		$	3,588,027		$	397,421		11.1	%
Other secured	24,285			27,265			(2,980		)	(10.9	)
Unsecured	15,261			15,049			212			1.4
Total consumer	4,024,994			3,630,341			394,653			10.9
Commercial:
Commercial real estate:
Permanent	1,836,701			1,745,435			91,266			5.2
Construction and development	160,748			171,266			(10,518		)	(6.1	)
Total commercial real estate	1,997,449			1,916,701			80,748			4.2
Commercial business	445,314			427,696			17,618			4.1
Total commercial	2,442,763			2,344,397			98,366			4.2

Leasing and equipment finance:
Equipment finance loans	305,009			309,740			(4,731		)	(1.5	)
Lease financings:
Direct financing leases	1,025,266			853,395			171,871			20.1
Sales-type leases	29,831			33,073			(3,242		)	(9.8	)
Lease residuals, excluding leveraged leases	34,734			34,171			563			1.6
Unearned income and deferred lease costs	(104,462		)	(92,710		)	(11,752		)	12.7
Investment in leveraged leases	18,786			22,728			(3,942		)	(17.3	)
Total lease financings	1,004,155			850,657			153,498			18.0
Total leasing and equipment finance	1,309,164			1,160,397			148,767			12.8
Total consumer, commercial and leasing and equipment finance	7,776,921			7,135,135			641,786			9.0
Residential real estate	1,091,678			1,212,643			(120,965		)	(10.0	)
Total loans and leases	$	8,868,599		$	8,347,778		$	520,821		6.2

The following table sets forth information about loans and leases by state, excluding loans held for sale:

(Dollars in thousands)	At June 30, 2004
	Consumer		Commercial		Leasing and Equipment Finance		Residential Real Estate		Total
Minnesota	$	1,616,936	$	717,591	$	61,673	$	551,684	$	2,947,884
Michigan	709,144		722,343		88,099		280,411		1,799,997
Illinois	1,047,847		399,983		47,564		192,032		1,687,426
Wisconsin	404,623		340,811		33,351		31,235		810,020
Colorado	199,775		15,756		31,894		5,707		253,132
California	560		19,871		158,965		—		179,396
Florida	11,561		22,023		81,920		750		116,254
Texas	798		1,355		84,865		1,281		88,299
Ohio	5,673		23,317		48,676		6,888		84,554
Other	28,077		179,713		672,157		21,690		901,637
Total	$	4,024,994	$	2,442,763	$	1,309,164	$	1,091,678	$	8,868,599

At June 30, 2004, 56% of TCF’s consumer and commercial loans consist of variable-rate loans. The variable-rate consumer loans have their interest rates tied to the prime rate, while variable-rate commercial loans (consisting of commercial business and commercial real estate loans) may have their interest rates tied to either the prime rate or LIBOR. In addition, to the extent these loans have interest rate floors, a change in interest rates may not result in a change in the interest rate on the variable-rate loan. The following table provides additional information relating to TCF’s consumer and commercial loan balances at June 30, 2004:

(Dollars in millions)	At June 30, 2004
	Consumer				Commercial (1)				Total
	Amount		% of Total		Amount		% of Total		Amount		% of Total
Variable-rate loans:
Immediately reprice if rate index increases (2)	$	2,115	53	%	$	889	36	%	$	3,004	47	%
Other (3)	364		9		233		10		597		9

Total variable-rate loans	2,479		62		1,122		46		3,601		56

Fixed-rate loans	1,546		38		412		17		1,958		30
Adjustable-rate loans (4)	—		—		909		37		909		14

Total fixed- and adjustable-rate loans	1,546		38		1,321		54		2,867		44

Total consumer and commercial loans	$	4,025	100	%	$	2,443	100	%	$	6,468	100	%

(1) Includes commercial real estate and commercial business loans.

(2) Loans subject to an immediate increase in interest rate if there is an increase in the prime rate or LIBOR.

(3) The base rate or LIBOR would need to increase to the equivalent floor rate before the loan rate would change from the floor interest rate.

(4) These loans reprice at periodic intervals, generally 3-5 years, at which time the fixed rate adjusts to a new rate based on a specified spread to the applicable U.S. Treasury rate.

Approximately 68% of the home equity loan portfolio at June 30, 2004 consisted of closed-end loans, compared with 70% at December 31, 2003. In addition, 62% of this portfolio at June 30, 2004 carries a variable interest rate tied to the prime rate, compared with 60% at December 31, 2003. At June 30, 2004, the weighted average loan-to-value ratio for the home equity portfolio was 74%, unchanged from December 31, 2003.

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

(Dollars in thousands)	At June 30, 2004						At December 31, 2003
Loan-to-Value Ratios (1):	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
Over 100% (2)	$	34,715	.9	%	1.84	%	$	39,452	1.1	%	4.81	%
Over 90% to 100%	392,627		9.8		.54		361,374		10.1		.78
Over 80% to 90%	1,568,842		39.4		.29		1,370,523		38.2		.40
80% or less	1,989,264		49.9		.35		1,816,678		50.6		.39
Total	$	3,985,448	100.0	%	.36		$	3,588,027	100.0	%	.48

(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 liens, if any. Property values represent the most recent market 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 June 30, 2004						At December 31, 2003
(Dollars in thousands)	Permanent		Construction and Development		Total		Permanent		Construction and Development		Total
Apartments	$	483,415	$	9,896	$	493,311	$	519,622	$	28,983	$	548,605
Office buildings	401,440		25,259		426,699		399,112		33,262		432,374
Retail services	339,019		27,183		366,202		304,295		10,139		314,434
Warehouse/industrial buildings	254,915		4,324		259,239		189,635		1,253		190,888
Hotel and motels	127,399		19,160		146,559		131,367		19,270		150,637
Health care facilities	46,212		6,166		52,378		32,157		17,664		49,821
Other	184,301		68,760		253,061		169,247		60,695		229,942
Total	$	1,836,701	$	160,748	$	1,997,449	$	1,745,435	$	171,266	$	1,916,701

TCF continues to expand its commercial business and commercial real estate lending activity to borrowers located in its primary midwestern markets. With a focus on secured lending, at June 30, 2004, approximately 98% of TCF’s commercial real estate and commercial business loans were secured either by real estate properties or underlying business assets. At June 30, 2004, approximately 91% of TCF’s commercial real estate loans outstanding were secured by properties located in its primary markets. At June 30, 2004 and December 31, 2003, the construction and development portfolio had no loans over 30-days delinquent.

The following tables summarize TCF’s leasing and equipment finance portfolio by marketing segment and by equipment type:

(Dollars in thousands)	At June 30, 2004						At December 31, 2003
Marketing Segment	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
Middle market (1)	$	675,897	51.6	%	.44	%	$	595,812	51.3	%	.88	%
Small ticket (2)	237,653		18.2		.52		124,178		10.7		.56
Winthrop (3)	212,172		16.2		4.60		229,441		19.8		1.14
Wholesale (4)	128,364		9.8		.44		137,062		11.8		.29
Leveraged leases	18,786		1.4		—		22,728		2.0		—
Subtotal	1,272,872		97.2		1.14		1,109,221		95.6		.81
Truck and trailer (5)	36,292		2.8		4.13		51,176		4.4		3.66
Total	$	1,309,164	100.0	%	1.22		$	1,160,397	100.0	%	.93

(1) Middle market consists primarily of construction and manufacturing equipment and specialty vehicles.

(2) Small ticket includes lease financings to small- and mid-size companies through programs with vendors, manufacturers, distributors, buying groups, and franchise organizations, which as of June 30, 2004 includes the portfolio of VGM. Individual contracts generally range from $25 thousand to $250 thousand.

(3) Winthrop’s portfolio consists primarily of technology and data processing equipment.

(4) Wholesale includes the discounting and purchasing of lease receivables sourced by third party lessors.

(5) TCF discontinued originations in the truck and trailer marketing segment during 2001. TCF will continue to provide financing on trucks and trailers to customers in the middle market segment for use in their businesses which are unrelated to the over-the-road trucking industry. See the portfolio summary by equipment type below for TCF’s total financing of trucks and trailers.

(Dollars in thousands)	At June 30, 2004				At December 31, 2003
Equipment Type	Balance		Percent of Total		Balance		Percent of Total
Technology and data processing	$	231,921	17.7	%	$	249,515	21.5	%
Manufacturing	232,187		17.7		198,321		17.1
Specialty vehicles	223,399		17.1		225,073		19.4
Construction	157,718		12.0		133,104		11.5
Medical	145,155		11.1		33,462		2.9
Trucks and trailers	79,739		6.1		89,262		7.7
Furniture and fixtures	54,833		4.2		54,052		4.7
Printing	43,009		3.3		38,977		3.3
Material handling	28,166		2.2		27,111		2.3
Aircraft	22,741		1.7		23,965		2.1
Other	90,296		6.9		87,555		7.5
Total	$	1,309,164	100.0	%	$	1,160,397	100.0	%

The leasing and equipment finance portfolio increased $148.8 million from December 31, 2003. TCF Leasing’s acquisition of VGM, in March 2004, added $96.6 million of portfolio balances to the small ticket marketing segment and the medical equipment type.

The leasing and equipment finance portfolio tables above include lease residuals. Lease residuals represent the estimated fair value of the leased equipment at the expiration of the initial term of the transaction. Lease residual values are reviewed on an ongoing basis. Any downward revisions are recorded in the periods in which they become known. At June 30, 2004, lease residuals, excluding leveraged lease residuals, totaled $34.7 million, up from $34.2 million at December 31, 2003. Included in the investment in leveraged leases, at June 30, 2004 is a 100% equity interest in a Boeing 767-300 aircraft. The investment in leveraged leases represents net unpaid rentals and estimated unguaranteed residual values of the leased assets less related unearned income. TCF has no obligation for principal and interest on the notes representing the third-party participation related to this leveraged lease. Such notes, which totaled $19.2 million at June 30, 2004, down from $22.6 million at December 31, 2003, were recorded as an offset against the related rental receivable. During the second quarter of 2004, TCF completed its annual review of the lease residual value assumption for this aircraft and reduced the estimated residual value by $4.4 million. As required under Statement of Financial Accounting Standards (“SFAS”) No. 13, “Accounting for Leases”, TCF recognized an impairment charge of $1 million which was recorded in other non-interest expense. The remaining reduction will be amortized through reduced yield on the investment over the remaining 5 ½ years of the lease as prescribed by SFAS No. 13. Also during the quarter, TCF downgraded its credit rating on the aircraft leveraged lease and has classified its $18.8 million investment as substandard. The lessee is current on the lease payments and the lease expires in 2010. The lessee of this aircraft, a major U.S. carrier, recently reported net operating losses and their senior unsecured debt rating has been downgraded to below investment grade. The company has also announced that it is in the process of finalizing a strategic reassessment of its business. In the event that the lessee is unable to effectively restructure its business operations, they may seek bankruptcy protection or a similar remedy. If this occurs, there can be no assurances that TCF will be able to collect all lease payments due, or that the current estimated residual value of the aircraft would be realized. This lease represents TCF’s only material direct exposure to the commercial airline industry. An economic slowdown and other factors have adversely impacted the airline industry and could have an adverse impact on the lessee’s ability to meet its lease obligations and the residual value of the aircraft.

TCF’s net investment in leveraged leases is comprised of the following:

(In thousands)	At June 30, 2004			At December 31, 2003
Rental receivable (net of principal and interest on non-recourse debt)	$	10,064		$	12,758
Estimated residual value of leased assets	13,660			18,679
Less: Unearned income	(4,938		)	(8,709		)
Investment in leveraged leases	18,786			22,728
Less: Deferred taxes	(9,502		)	(11,813		)
Net investment in leveraged leases	$	9,284		$	10,915

Total loan and lease originations for TCF’s leasing businesses were $340.3 million for the first six months of 2004, compared with $269.4 million for the same 2003 period. The backlog of approved transactions increased to $202.2 million at June 30, 2004, from $155.2 million at December 31, 2003. TCF’s 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 may be a decline in the 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 a decline in equipment values for equipment previously placed in service.

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 procedures for the collection of problem loans and leases. The risk of loss is difficult to quantify and is subject to fluctuations in values, general economic conditions and other factors. The determination of the allowance for loan and lease losses is a critical accounting policy which involves management’s judgment on 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 Company considers the allowance for loan and lease losses of $80 million appropriate to cover losses inherent in the loan and lease portfolios as of June 30, 2004. However, no assurance can be given that TCF will not, in any particular period, sustain loan and lease losses that are sizable 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 changes 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.”

The next several pages include detail information regarding TCF’s allowance for loan and lease losses, net charge-offs, non-performing assets, past due loans and leases and potential problem loans and leases. Included in this data are numerous portfolio ratios that must be carefully reviewed and related to the nature of the underlying loans and lease portfolios before appropriate conclusions can be reached regarding TCF or for purposes of making comparisons to other companies. Most of TCF’s non-performing assets and past due loans and leases are secured by residential real estate. Given the nature of these assets and the related mortgage foreclosure, redemption or property sale and, if applicable, mortgage insurance claims processes, it can take 18 months or longer for a loan to migrate from initial delinquency to final disposition. This resolution process generally takes much longer for loans secured by real estate than for unsecured loans or loans secured by other property primarily due to state real estate foreclosure laws.

The key indicators of TCF’s credit quality and allowance coverage at June 30, 2004, include the ratio of annualized net charge-offs to average loans and leases, the allowance as a multiple of annualized net charge-offs, and income before income taxes and provision for loan losses as a multiple of annualized net charge-offs.

The following table sets forth information detailing the allowance for loan and lease losses and selected key indicators:

	At or For the Three Months Ended June 30,						At or For the Six Months Ended June 30,
(Dollars in thousands)	2004			2003			2004			2003
Balance at beginning of period	$	79,054		$	77,813		$	76,619		$	77,008
Charge-offs	(3,018		)	(4,018		)	(5,517		)	(6,750		)
Recoveries	919			774			2,902			1,601
Net charge-offs	(2,099		)	(3,244		)	(2,615		)	(5,149		)
Provision charged to operations	3,070			3,127			4,230			5,837
Acquired allowance	—			—			1,791			—
Balance at end of period	$	80,025		$	77,696		$	80,025		$	77,696
Key Indicators:
Annualized net charge-offs as a percentage of average loans and leases	.10		%	.16		%	.06		%	.13		%

Period end allowance as a multiple of annualized net charge-offs	9.5X			6.0X			15.3X			7.5X

Income before income taxes and provision for loan losses as a multiple of net charge-offs	48.5X			29.5X			74.5X			37.1X

The allocation of TCF’s allowance for loan and lease losses, including general and specific loss allocations, is as follows:

	At or For the Six Months Ended June 30, 2004						At or For the Year Ended December 31, 2003
(Dollars in thousands)	Allowance for Loan and Lease Losses		Total Loans and Leases		Allowance as a % of Balance		Allowance for Loan and Lease Losses		Total Loans and Leases		Allowance as a % of Balance
Consumer	$	9,153	$	4,024,994	.23	%	$	9,084	$	3,630,341	.25	%
Commercial real estate	25,682		1,997,449		1.29		25,142		1,916,701		1.31
Commercial business	11,276		445,314		2.53		11,797		427,696		2.76
Leasing and equipment finance	16,944		1,309,164		1.29		13,515		1,160,397		1.16
Unallocated	16,139		—		N.A.		16,139		—		N.A.
Subtotal	79,194		7,776,921		1.02		75,677		7,135,135		1.06
Residential real estate	831		1,091,678		.08		942		1,212,643		.08
Total	$	80,025	$	8,868,599	.90		$	76,619	$	8,347,778	.92

N.A. Not applicable.

The allocated allowance balances for TCF’s residential and consumer loan portfolios, at June 30, 2004, reflect the Company’s credit quality and related low level of net loan charge-offs for these portfolios. The allocated allowances for the loan and lease portfolios do not reflect any significant changes in estimation methods or assumptions.

Net loan and lease charge-offs were $2.1 million and $2.6 million, or ..10% (annualized) and .06% (annualized), of average loans and leases outstanding in the second quarter and first six months of 2004, respectively, down from $3.2 million and $5.1 million, or .16% (annualized) and .13% (annualized), of average loans and leases for the same periods of 2003.

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

	Three Months Ended										Six Months Ended
	June 30, 2004					June 30, 2003					June 30, 2004					June 30, 2003
(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	$	719		.07	%	$	457		.06	%	$	1,293		.07	%	$	1,502		.10	%
Commercial real estate	(15		)	—		(20		)	—		(48		)	—		(18		)	—
Commercial business	(16		)	(.01	)	781			.67		57			.03		697			.31
Leasing and equipment finance:
Middle market	300			.18		878			.81		724			.25		1,252			.66
Winthrop	(32		)	(.06	)	5			.01		(16		)	(.01	)	73			.06
Wholesale	(17		)	(.05	)	126			.31		(1,242		)	(1.90	)	313			.37
Small ticket	1,047			1.88		538			2.00		1,753			1.54		699			1.31
Leveraged leases	—			—		—			—		—			—		—			—
Subtotal	1,298			.42		1,547			.63		1,219			.20		2,337			.49
Truck and trailer	80			.80		477			2.28		53			.24		658			1.40
Total leasing and equipment finance	1,378			.43		2,024			.76		1,272			.21		2,995			.57
Subtotal	2,066			.11		3,242			.20		2,574			.07		5,176			.16
Residential real estate	33			.01		2			—		41			.01		(27		)	—
Total	$	2,099		.10		$	3,244		.16		$	2,615		.06		$	5,149		.13

(1) Annualized.

Non-Performing Assets

Non-performing assets consist of non-accrual loans and leases and other real estate owned. Approximately 75% of non-performing assets at June 30, 2004 consisted of, or were secured by, real estate. Non-performing assets are summarized in the following table:

(Dollars in thousands)	At June 30, 2004			At December 31, 2003			$ Change
Non-accrual loans and leases:
Consumer	$	11,718		$	12,052		$	(334	)
Commercial real estate	6,750			2,490			4,260
Commercial business	3,490			2,931			559
Leasing and equipment finance, net	10,398			13,241			(2,843		)
Residential real estate	3,886			3,993			(107		)
Total non-accrual loans and leases, net	36,242			34,707			1,535
Non-recourse discounted lease rentals	514			699			(185		)
Total non-accrual loans and leases, gross	36,756			35,406			1,350
Other real estate owned:
Residential	10,790			20,462			(9,672		)
Commercial	9,078			12,992			(3,914		)
Total other real estate owned	19,868			33,454			(13,586		)
Total non-performing assets, gross	$	56,624		$	68,860		$	(12,236	)
Total non-performing assets, net	$	56,110		$	68,161		$	(12,051	)

Gross non-performing assets as a percentage of:
net loans and leases	.64		%	.83		%
total assets	.47		%	.61		%

Included in non-performing assets are loans that are considered impaired. The recorded investment in impaired loans was $13.5 million at June 30, 2004, compared with $9.1 million at December 31, 2003. The related allowance for credit losses was $5 million at June 30, 2004 compared with $4.5 million at December 31, 2003. All of the impaired loans were on non-accrual status. There were no impaired loans at June 30, 2004 or December 31, 2003 which did not have a related allowance for loan losses. The average recorded investment in impaired loans during the three months ended June 30, 2004 was $11.8 million, compared with $10.3 million during the three months ended December 31, 2003.

Past Due Loans and Leases

The following table sets forth information regarding TCF’s delinquent loan and lease portfolio, excluding loans held for sale and non-accrual loans and leases. TCF’s delinquency rates are determined using the contractual method.

	At June 30, 2004				At December 31, 2003
(Dollars in thousands)	Principal Balances		Percentage of Loans and Leases		Principal Balances		Percentage of Loans and Leases
Accruing loans and leases delinquent for:
30-59 days	$	23,665	.27	%	$	24,187	.29	%
60-89 days	12,436		.14		8,953		.11
90 days or more	2,832		.03		5,604		.07
Total	$	38,933	.44	%	$	38,744	.47	%

The following table summarizes TCF’s over 30-day delinquent loan and lease portfolio by loan type:

	At June 30, 2004				At December 31, 2003
(Dollars in thousands)	Principal Balances		Percentage of Portfolio		Principal Balances		Percentage of Portfolio
Consumer	$	15,078	.38	%	$	17,673	.49	%
Commercial real estate	101		.01		58		—
Commercial business	383		.09		282		.07
Leasing and equipment finance	15,774		1.22		10,619		.93
Residential real estate	7,597		.70		10,112		.84
Total	$	38,933	.44		$	38,744	.47

Included in leasing and equipment finance delinquencies at June 30, 2004 was one account totaling $6.4 million which was paid current on July 2, 2004.

Potential Problem Loans and Leases

In addition to the non-performing assets, there were $75.8 million of loans and leases at June 30, 2004, for which management has concerns regarding the ability of the borrowers to meet existing repayment terms, compared with $48.1 million at December 31, 2003. These loans and leases are primarily classified for regulatory purposes as substandard and reflect the distinct possibility, but not probability, that the Company will not be able to collect all amounts due according to the contractual terms of the loan or lease agreement. Although these loans and leases have been identified as potential problem loans and leases, they may never become non-performing. Additionally, these loans and leases are generally secured by commercial real estate or assets, thus reducing the potential for loss should they become non-performing. Potential problem loans and leases are considered in the determination of the allowance for loan and lease losses.

Potential problem loans and leases are summarized as follows:

(Dollars in thousands)	At June 30, 2004		At December 31, 2003		Change
(Dollars in thousands)	At June 30, 2004		At December 31, 2003		$		%

Commercial real estate	$	28,052	$	20,279	$	7,773	38.3	%
Commercial business	14,999		12,721		2,278		17.9
Leasing and equipment finance	32,754		15,094		17,660		117.0
Total	$	75,805	$	48,094	$	27,711	57.6

Leasing and equipment finance potential problem loans and leases include $571 thousand and $1.1 million funded on a non-recourse basis at June 30, 2004 and December 31, 2003, respectively. Leasing and equipment finance also includes the previously discussed $18.8 million investment in an aircraft leveraged lease which was downgraded to substandard during the second quarter of 2004.

Deposits

Checking, savings and money market deposits are an important source of low cost funds and fee income for TCF. Deposits totaled $7.8 billion at June 30, 2004, up $149.9 million from December 31, 2003. Lower interest-cost checking, savings and money market deposits totaled $6.3 billion, up $322.1 million from December 31, 2003, and comprised 81.4% of total deposits at June 30, 2004, compared with 78.8% of total deposits at December 31, 2003. Higher interest-cost certificates of deposit decreased $172.2 million from December 31, 2003, as other lower-cost funding sources were available to TCF. TCF’s weighted-average rate for deposits, including non-interest-bearing deposits, was .49% at June 30, 2004, down from .58% at December 31, 2003.

New Branch Expansion

Key to TCF’s growth is its continued investment in new branch expansion. New branches are an important source of new customers in both deposit products and consumer lending products. While supermarket branches continue to play an important role in TCF’s expansion strategy, the opportunity to add new supermarket branches within TCF’s markets has slowed from prior years. Therefore, TCF has continued new branch expansion by opening more traditional branches. Although traditional branches require a higher initial investment than supermarket branches, they ultimately attract more customers and become more profitable. During the second quarter of 2004, TCF opened five new branches, including four traditional branches and one supermarket branch. TCF now has 237 new branches opened since January 1, 1998. TCF plans to open 24 new branches during the remainder of 2004, consisting of 16 traditional branches and eight supermarket branches. In 2005, TCF plans to open 31 new branches, consisting of 23 traditional branches and eight supermarket branches.

Additional information regarding the results of TCF’s new branches opened since January 1, 1998 is displayed in the table below:

(Dollars in thousands)	At or For the Six Months Ended June 30,						Increase (Decrease)			% Change
(Dollars in thousands)	2004			2003			Increase (Decrease)			% Change
Number of new branches*
Traditional	48			29			19			65.5	%
Supermarket	189			184			5			2.7
Total	237			213			24			11.3
Percentage of total branches	58		%	54		%

Number of checking accounts	539,193			450,646			88,547			19.6
Average deposits balances:
Checking	$	697,384		$	496,399		$	200,985		40.5
Savings	409,587			415,601			(6,014		)	(1.4	)
Money market	65,608			71,678			(6,070		)	(8.5	)
Subtotal	1,172,579			983,678			188,901			19.2
Certificates of deposits	146,736			156,077			(9,341		)	(6.0	)
Total	$	1,319,315		$	1,139,755		$	179,560		15.8

Total fees and other revenue	$	73,581		$	59,840		$	13,741		23.0

* New branches opened since January 1, 1998.

Borrowings

Borrowings totaled $2.9 billion at June 30, 2004, up $520.6 million from year-end 2003. Included in long-term borrowings at June 30, 2004, are $767.5 million of fixed-rate FHLB advances and repurchase agreements with other institutions, which are callable by the counterparty 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 and repurchase agreements, subject to standard terms and conditions. The weighted-average rate on borrowings decreased to 3.09% at June 30, 2004, from 3.24% at December 31, 2003. During the first quarter of 2004, TCF entered into $450 million of 18-month FHLB advances at a weighted average interest rate of 1.70%. TCF Financial Corporation has a $105 million bank line of credit agreement maturing in April 2005, which is unsecured and contains certain covenants common to such agreements. At June 30, 2004, TCF had no amounts outstanding on this bank line of credit. During the second quarter of 2004, TCF National Bank, a subsidiary of TCF Financial Corporation issued $75 million of subordinated notes due in 2014. See Note 6 of Notes to the Consolidated Financial Statement for further discussion.

Contractual Obligations And Commercial Commitments

TCF has certain obligations and commitments to make future payments under contracts. At June 30, 2004, the aggregate contractual obligations (excluding bank deposits) and commercial commitments are as follows:

(Dollars in thousands)	Payments Due by Period
Contractual Obligations	Total		Less than 1 year		1-3 Years		4-5 Years		After 5 Years
Total borrowings	$	2,935,446	$	1,310,905	$	1,117,871	$	132,390	$	374,280
Annual rental commitments under non-cancelable operating leases	157,485		22,638		39,320		31,837		63,690
Purchase obligations (construction contracts and land purchase commitments for future branch sites)	14,865		14,865		—		—		—
	$	3,107,796	$	1,348,408	$	1,157,191	$	164,227	$	437,970

	Amount of Commitment - Expiration by Period
Other Commercial Commitments	Total		Less than 1 year		1-3 Years		4-5 Years		After 5 Years
Commitments to lend:
Consumer	$	1,501,370	$	16,779	$	14,645	$	27,491	$	1,442,455
Commercial	651,023		470,905		148,210		18,091		13,817
Leasing and equipment finance	59,424		59,424		—		—		—
Other	12,601		12,601		—		—		—
Total commitments to lend	2,224,418		559,709		162,855		45,582		1,456,272
Loans serviced with recourse	105,844		2,659		5,688		4,797		92,700
Standby letters of credit and guarantees on industrial revenue bonds	43,180		23,378		19,642		160		—
	$	2,373,442	$	585,746	$	188,185	$	50,539	$	1,548,972

Commitments to lend are agreements to lend to a customer provided there is no violation of any condition in the contract. These commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since certain of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Collateral predominantly consists of residential and commercial real estate.

Loans serviced with recourse represent a contingent guarantee based upon the failure to perform by another party. These loans consist of $102.1 million of Veterans Administration (“VA”) loans and $3.7 million of loans sold with recourse to the Federal National Mortgage Association (“FNMA”). As is typical of a servicer of VA loans, TCF must cover any principal loss in excess of the VA’s guarantee if the VA elects its “no-bid” option upon the foreclosure of a loan. Since conditions under which TCF would be required either to cover any principal loss in excess of the VA’s guarantee or repurchase the loan sold to FNMA may not materialize, the actual cash requirements are expected to be less than the amount provided in the table above.

Standby letters of credit and guarantees on industrial revenue bonds are conditional commitments issued by TCF guaranteeing the performance of a customer to a third party. These conditional commitments expire in various years through the year 2009. Since the conditions under which TCF is required to fund these commitments may not materialize, the cash requirements are expected to be less than the total outstanding commitments. Collateral held on these commitments primarily consists of commercial real estate mortgages.

Stockholders’ Equity

Stockholders’ equity at June 30, 2004 was $939.2 million, or 7.9% of total assets, up from $920.9 million, or 8.1% of total assets, at December 31, 2003. TCF repurchased 753,445 shares of its common stock during the first six months of 2004 at an average cost of $54.28 per share. At June 30, 2004, TCF had 3 million shares remaining in its stock repurchase program authorized by its Board of Directors. Since January 1, 1998, the Company has repurchased 25.9 million shares of its common stock at an average cost of $33.94 per share. For the first six months of 2004, average total equity to average assets was 8.03% unchanged from 8.03% for the year ended December 31, 2003. On July 19, 2004, TCF declared a regular quarterly dividend of 37.5 cents per common share, payable on August 31, 2004, to shareholders of record as of August 6, 2004. TCF does not have any trust preferred securities or other quasi-equity instruments.

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, interest rate sensitivities and prepayment characteristics 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 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 the 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 the interest rate gap measurement has some limitations, which include no assumptions regarding future asset or liability production and the possibility of 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 has positioned its balance sheet to benefit from a rising interest rate environment. TCF’s one-year interest rate gap (the difference between interest-earning assets and interest-bearing liabilities repricing or maturing within the next twelve months), assuming no change in interest rates, was a positive $1 billion, or 9% of total assets, at June 30, 2004, compared with a positive $161.3 million, or 1% of total assets, at December 31, 2003. The one-year interest rate gap is subject to a number of assumptions and is only one of a number of interest rate risk measurements and is best used as a general measure of the effect on the net interest income of rising or falling interest rates.

The sensitivity of TCF’s one-year interest rate gap is summarized as follows:

	One-Year Interest Rate Gap
	At June 30, 2004				At December 31, 2003
(Dollars in millions)	$		% of Total Assets		$		% of Total Assets

Assumed Interest Rates
Increase 50 basis points *	$	1,030	8.6	%	$	811	7.2	%
Flat rates as of measurement date	1,015		8.5		161		1.4
Decrease 50 basis points *	119		1.0		259		2.3

* Assumes an immediate parallel change in interest rates as of the measurement date.

As stated above, TCF’s balance sheet is positioned to benefit from rising interest rates due to a positive interest rate gap position. TCF would also likely benefit from an increase in interest rates as this might signify that economic conditions are improving. See “Consolidated Financial Condition Analysis – Loans and Leases” for additional information regarding TCF’s consumer and commercial variable-rate loans. Increases in interest rates could have an adverse impact on TCF’s checking account balances, if customers transfer some of these funds to higher interest rate deposit products or other investments and would likely result in an increase in the cost of interest-bearing deposits. An increase in interest rates would affect TCF’s fixed-rate/variable-rate product origination mix and origination volumes and would likely slow loan prepayments.

While this positive interest rate gap may compress net interest income in the short-term, TCF believes this positive interest rate gap to be warranted because current rates are well below historical averages, and consequently, there is a greater possibility over time of higher interest rates versus lower interest rates. However, if interest rates remain at current levels or fall, TCF could experience an increase in prepayments of residential loans, mortgage-backed securities and fixed-rate consumer and commercial real estate loans and may experience compression of its net interest income.

The one-year interest rate gap 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 TCF’s counterparties will exercise their option to call certain of TCF’s longer-term callable borrowings. Decisions by management to purchase or sell assets or to retire debt could change the maturity/repricing and spread relationships. In addition, TCF’s interest-rate risk may increase during periods of rising interest rates due to slower prepayments on fixed-rate loans and mortgage-backed securities.

TCF estimates that an immediate 100 basis point increase in current mortgage loan interest rates would slow prepayments on the $2.7 billion of mortgage-backed securities and residential real estate loans at June 30, 2004 by approximately $160 million, or 43% in the first year. A slowing in prepayments would increase the estimated life of the mortgage-backed securities and residential real estate loan portfolios and may adversely impact net interest income or net interest margin in the future.

Recent Accounting Developments

On December 8, 2003, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (the “Act”) was signed into law. This Act includes a prescription drug benefit for enrollees and a federal subsidy for sponsors of retiree healthcare plans beginning in 2006. TCF offers a prescription drug benefit to retirees in its postretirement medical plan. In January 2004, the FASB issued Staff Position (“FSP”) 106-1 “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.” In May 2004, the FASB issued FSP 106-2, which superceded FSP 106-1. FSP 106-2 provides guidance regarding the effects of the Act on the estimated costs of providing this retirement benefit under SFAS No. 106, “Employers’ Accounting for Post-retirement Benefits Other Than Pensions.” Employers with post-retirement medical plans with prescription drug benefits that are considered “actuarially equivalent” to Medicare prescription drug benefits, must include the estimated effects of the federal subsidy in determining their benefit obligations if significant to their plans. This FSP is effective for interim or annual period beginning after June 15, 2004. TCF early adopted the provisions of this FSP in the second quarter of 2004. The adoption of this FSP did not have a significant effect on TCF’s 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 website at www.tcfexpress.com or by contacting TCF’s Corporate Communications Department at (952) 745-2760. The website also includes free access to company news releases, TCF’s annual report, quarterly reports, investor presentations and Securities and Exchange Commission (“SEC”) filings. Replays of prior quarterly conference calls webcasts discussing financial results may also be accessed at the investor relations section within TCF’s website.

Legislative, Legal and Regulatory Developments

Federal and state legislation imposes numerous legal and regulatory requirements on financial institutions. Future legislative or regulatory changes, 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 proposed new legislation that would reform the bank deposit insurance system. This reform could merge the Bank Insurance Fund (“BIF”) and Savings Association Insurance Fund (“SAIF”), 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 of 1.25% ($1.25 against $100 of insured deposits), and require certain changes in the calculation methodology. The ultimate impact of these proposals cannot be predicted at this time, but if adopted, they could result in the imposition of additional deposit insurance premium costs on TCF.

On July 30, 2002, the Sarbanes-Oxley Act of 2002 (“the Act”) was signed into law by the President of the United States. 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 in disclosure controls or internal controls over financial reporting during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect internal control over financial reporting. These certificates called for under Section 302 of the Act are filed as an exhibit to this document. 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.

On June 5, 2003, the SEC published its final rules on Section 404 of the Act, requiring public companies to complete an annual assessment of the effectiveness of internal control over financial reporting. The rules are effective in 2004 and a management report must be included in the 2004 Form 10-K describing management’s responsibility for establishing and maintaining adequate internal control over financial reporting and its assessment of the effectiveness of such controls as of year-end. The Company’s independent auditors will also be required to complete an attestation report on management’s assessment.

In September 2002, the SEC issued its final ruling covering the acceleration of periodic report filing dates. The rule applies to certain companies, including TCF, and will reduce the annual report filing deadline from 90 days after year-end to 60 days after year-end for TCF’s 2004 Annual Report. The quarterly report on Form 10-Q will also be accelerated from 45 days after quarter-end to 35 days after quarter-end for the quarterly Form 10-Q filings in 2005. TCF has taken steps to modify its financial reporting process to meet these accelerated filing deadlines.

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; ability to increase the number of checking accounts and the possibility that deposit account losses (fraudulent checks, etc.) may increase; 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 and guidelines, or monetary, fiscal or tax policies of the federal or state governments; changes in credit and other risks posed by TCF’s loan, lease and investment portfolios, including declines in commercial or residential real estate values; technological, computer-related or operational difficulties; adverse changes in securities markets; the risk that TCF could be unable to effectively manage the volatility of its mortgage banking business, which could adversely affect earnings; and results of litigation or other significant uncertainties. Investors should consult TCF’s Annual Report to Shareholders and reports on Forms 10-K, 10-Q and 8-K for additional important information about the Company.

CONTROLS AND PROCEDURES

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, the Company’s Chief Financial Officer and Treasurer (Principal Financial Officer) and its Controller and Assistant Treasurer (Principal Accounting Officer), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 (“Exchange Act”). Based upon that evaluation, the Company’s Chief Executive Officer, 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, as of June 30, 2004, in alerting them in a timely manner to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company’s periodic SEC filings. There were no significant changes in the Company’s disclosure controls or internal controls over financial reporting during the second quarter of 2004.

Disclosure controls and procedures are designed to ensure information required to be disclosed in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to the Company’s management, including the Chief Executive Officer, the Chief Financial Officer and Treasurer and the Controller and Assistant Treasurer, as appropriate, to allow timely decisions regarding required disclosure. Disclosure controls include internal controls that are designed to provide reasonable assurance that transactions are properly authorized, assets are safeguarded against unauthorized or improper use and that transactions are properly recorded and reported.

Any control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. The design of a control system inherently has limitations, and the benefits of controls must be weighed against their costs. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. Therefore, no evaluation of a cost-effective system of controls can provide absolute assurance that all control issues and instances of fraud, if any, will be detected.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Supplementary Information

SELECTED QUARTERLY FINANCIAL DATA (Unaudited)

(Dollars in thousands, except per-share data)	At June 30, 2004		At March 31, 2004		At Dec. 31, 2003		At Sept. 30, 2003		At June 30, 2003

SELECTED FINANCIAL CONDITION DATA:

Securities available for sale	$	1,588,372	$	1,269,293	$	1,533,288	$	1,604,282	$	1,980,830
Residential real estate loans	1,091,678		1,152,357		1,212,643		1,283,640		1,393,183
Subtotal	2,680,050		2,421,650		2,745,931		2,887,922		3,374,013
Loans and leases excluding residential real estate loans	7,776,921		7,470,428		7,135,135		6,863,683		6,705,169
Total assets	11,942,863		11,724,319		11,319,015		11,253,906		11,807,764
Deposits	7,761,657		7,869,128		7,611,749		7,712,603		7,979,737
Borrowings	2,935,446		2,507,087		2,414,825		2,243,725		2,506,039
Stockholders’ equity	939,152		965,950		920,858		931,968		952,069

	Three Months Ended
	June 30, 2004			March 31, 2004			Dec. 31, 2003			Sept. 30, 2003			June 30, 2003

SELECTED OPERATIONS DATA:
Interest income	$	152,789		$	149,219		$	148,919		$	156,482		$	164,004
Interest expense	30,370			30,726			29,827			36,605			44,240
Net interest income	122,419			118,493			119,092			119,877			119,764
Provision for credit losses	3,070			1,160			4,037			2,658			3,127
Net interest income after provision for credit losses	119,349			117,333			115,055			117,219			116,637
Non-interest income:
Fees and other revenues	122,587			102,459			114,865			118,089			101,003
Gains on sales of securities available for sale	—			12,717			—			—			11,695
Gains (losses) on termination of debt	—			—			—			(37,769		)	—
Gain on sale of loan servicing	706			—			—			—			—
Total non-interest income	123,293			115,176			114,865			80,320			112,698
Non-interest expense	143,906			140,706			142,244			142,382			136,733
Income before income tax expense	98,736			91,803			87,676			55,157			92,602
Income tax expense	33,518			31,142			28,180			19,193			32,311
Net income	$	65,218		$	60,661		$	59,496		$	35,964		$	60,291

Per common share:
Basic earnings	$	.95		$	.88		$	.86		$	.51		$	.85
Diluted earnings	$	.94		$	.88		$	.86		$	.51		$	.85
Dividends declared	$	.375		$	.375		$	.325		$	.325		$	.325

FINANCIAL RATIOS:
Return on average assets (1)	2.20		%	2.11		%	2.13		%	1.24		%	2.04		%
Return on average common equity (1)	27.68			25.90			26.18			15.77			25.17
Net interest margin (1)	4.53			4.52			4.68			4.57			4.45
Net charge-offs as a percentage of average loans and leases (1)	.10			.02			.30			.08			.16
Average total equity to average assets	7.95			8.13			8.13			7.89			8.11

(1) Annualized.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Supplementary Information (Continued)

Consolidated Average Balance Sheets, Interest and Dividends

Earned or Paid, and Related Interest Yields and Rates

	Six Months Ended June 30,
	2004						2003
(Dollars in thousands)	Average Balance		Interest (1)		Average Yields and Rates (2)		Average Balance		Interest (1)		Average Yields and Rates (2)
Assets:
Investments	$	149,681	$	1,668	2.24	%	$	120,939	$	2,582	4.30	%
Securities available for sale (3)	1,533,034		40,745		5.32		2,185,840		61,247		5.60
Loans held for sale	372,215		6,181		3.34		511,400		11,014		4.34
Loans and leases:
Consumer	3,805,128		114,715		6.06		3,125,941		104,874		6.77
Commercial real estate	1,963,996		53,221		5.45		1,848,090		55,919		6.10
Commercial business	428,213		8,699		4.09		453,104		9,856		4.39
Leasing and equipment finance	1,240,112		43,478		7.01		1,050,325		40,665		7.74
Subtotal	7,437,449		220,113		5.95		6,477,460		211,314		6.57
Residential real estate	1,158,248		33,301		5.76		1,582,809		49,961		6.32
Total loans and leases (4)	8,595,697		253,414		5.92		8,060,269		261,275		6.52
Total interest-earning assets	10,650,627		302,008		5.69		10,878,448		336,118		6.21
Other assets (5)	1,040,334						1,067,955
Total assets	$	11,690,961					$	11,946,403

Liabilities and Stockholders’ Equity:
Non-interest bearing deposits	$	2,334,830					$	2,170,132
Interest-bearing deposits:
Checking	1,257,645		1,107		.18		1,025,221		517		.10
Savings	1,823,677		3,313		.37		1,861,263		5,927		.64
Money market	816,090		1,495		.37		891,882		2,733		.62
Subtotal	3,897,412		5,915		.31		3,778,366		9,177		.49
Certificates of deposit	1,523,881		14,098		1.86		1,863,092		24,812		2.69
Total interest-bearing deposits	5,421,293		20,013		.74		5,641,458		33,989		1.21
Total deposits	7,756,123		20,013		.52		7,811,590		33,989		.88
Borrowings:
Short-term borrowings	702,707		4,465		1.28		706,035		4,589		1.31
Long-term borrowings	1,914,870		36,618		3.90		2,021,478		55,364		5.56
Total borrowings	2,617,577		41,083		3.19		2,727,513		59,953		4.46
Total interest-bearing liabilities	8,038,870		61,096		1.52		8,368,971		93,942		2.25
Total deposits and borrowings	10,373,700		61,096		1.19		10,539,103		93,942		1.80
Other liabilities (5)	378,465						442,070
Total liabilities	10,752,165						10,981,173
Stockholders’ equity (5)	938,796						965,230
Total liabilities and stockholders’ equity	$	11,690,961					$	11,946,403

Net interest income and margin			$	240,912	4.52	%			$	242,176	4.45	%

(1) Tax-exempt income was not significant and thus has not been presented on a tax equivalent basis. Tax-exempt income of $277,000 and $264,000 was recognized during the six months ended June 30, 2004 and 2003, 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 lending, leasing and deposit operations. 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, customers or others have also brought actions against TCF, in some cases claiming substantial amounts of damages. Financial services companies are frequently the subject of class action litigation involving a wide variety of causes of action, and TCF has had such actions brought against it from time to time. After review with its legal counsel, management believes that the ultimate disposition of existing litigation will not have a material effect on TCF’s financial condition, but litigation is often unpredictable and the actual results of litigation cannot be determined with certainty.

In April 2004, TCF was served with a complaint in the United States District Court, District of Minnesota, by John Matthew Saxe, individually and on behalf of other similarly situated employees. The plaintiff, a former consumer loan officer for TCF National Bank, alleges that he and other consumer lender employees were not paid overtime compensation in violation of the Federal Fair Labor Standards Act and the Minnesota Fair Labor Standards Act, and seeks as damages unpaid back wages, an additional amount equal to unpaid back wages as liquidated damages, costs and attorneys’ fees. TCF has filed an answer to the complaint denying that the plaintiff or any similarly situated employee is entitled to any relief or that the plaintiff is similarly situated to other employees. Discovery in this case is pending.

Item 2. Changes in Securities.

The following table summarizes share repurchase activity for the quarter ended June 30, 2004:

	Shares Repurchased			Share Repurchase Authorizations (1)
(Dollars in thousands)	Number	Average Price Per Share		October 22, 2001		July 21, 2003

Balance, March 31, 2004				130,426		3,574,984
April 2004	150,000	$	49.69	(130,426	)	(19,574	)
May 2004	—	—		—		—
June 2004	590,000	55.51		—		(590,000	)
Balance, June 30, 2004	740,000	$	54.33	—		2,965,410

(1) The current share repurchase authorizations were approved by Board of Directors on October 22, 2001 and July 21, 2003. Each authorization was for a repurchase of up to an additional 5% of TCF’s common stock outstanding at the time of the authorization, or 3.8 million shares and 3.6 million shares, respectively. These authorizations do not have expiration dates.

Item 3. Defaults Upon Senior Securities.

None.

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

On April 28, 2004, the Annual Meeting of the shareholders of TCF was held to obtain the approval of shareholders of record as of March 1, 2004 in connection with the matters indicated below. Following is a brief description of each matter voted on at the meeting, and the number of votes cast for, against or withheld, as well as the number of abstentions and broker nonvotes, as to each matter:

	Vote
	For	Against or Withheld	Abstain	Broker Nonvote

1. Election of four Directors:
Luella G. Goldberg	58,788,366	1,844,301	—	—
George G. Johnson	59,966,929	665,738	—	—
Lynn A. Nagorske	59,835,449	797,218	—	—
Ralph Strangis	59,722,393	910,274	—	—

2. Re-approve the TCF Performance-Based Compensation Policy for Covered Executive Officers	57,271,998	3,114,101	246,568	—

3. Renew the TCF Incentive Stock Program for an additional ten years	46,196,289	4,763,938	243,287	9,429,153

4. Re-approve the Performance-Based Goals and Limits of the TCF Incentive Stock Program	56,721,951	3,675,556	235,160	—

5. Advisory vote on the appointment of KPMG LLP as Public accountants for the fiscal year ending December 31, 2004	59,636,484	859,490	136,693	—

Item 5. Other Information.

None.

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

(a)	Exhibits.

	See Index to Exhibits on page 49 of this report.

(b)	Reports on Form 8-K.

	A Current Report of Form 8-K, dated April 15, 2004, was submitted furnishing a press release dated April 15, 2004 announcing results of operations for the quarter ended March 31, 2004, under Item 12, filed under Item 7 of Form 8-K.

	A Current Report on Form 8-K, dated April 28, 2004, was submitted furnishing certain investor presentation materials under Item 12, filed under Item 7 and 9 Form 8-K.

	A Current Report on Form 8-K, dated June 8, 2004, was submitted announcing issuance of $75 million of subordinated notes by TCF National Bank under Item 5, filed under Item 7 of Form 8-K.

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: July 29, 2004

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.

10(b)	TCF Financial 1995 Incentive Stock Program, as amended October 1, 1995 [incorporated by reference to Exhibit 10(b) to TCF Financial Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1995, No. 001-10253]; as amended October 22, 1996 [incorporated by reference to Exhibit 10(a) to TCF Financial Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1996, No. 001-10253]; as further amended on May 11, 1999 [incorporated by reference to Exhibit 10(b) to TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999, No. 001-10253]; as further amended on January 24, 2000 and approved by shareholders of TCF Financial Corporation at the Annual Meeting on May 10, 2000 [incorporated by reference from TCF Financial Corporation’s Proxy Statement filed March 31, 2000]; as further amended on January 22, 2001 [incorporated by reference to Exhibit 10(b) of TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, No. 001-10253]; as amended by amendment adopted October 22, 2001 [incorporated by reference to Exhibit 10(b) of TCF Financial Corporation’s Annual Report on Form 10-K for the year ended December 31, 2001, No.001-10253]; as amended and restated on March 5, 2004, and approved by Shareholders of TCF Financial Corporation at the Annual Meeting on April 28, 2004 [incorporated by reference to Appendix B to TCF Financial Corporation’s Definitive Proxy Statement filed with the SEC on March 17, 2004]

10(j)*		Supplemental Employee Retirement Plan, as amended and restated effective July 21, 1997 [incorporated by reference to Exhibit 10(m) to TCF Financial Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997, No. 001-10253]; as amended effective September 30, 1998 [incorporated by reference to Exhibit 10(m) to TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1998, No. 001-10253]; as further amended on May 11, 1999 [incorporated by reference to Exhibit 10(m) to TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999, No. 001-10253]; as further amended by amendment adopted January 24, 2000 [incorporated by reference to Exhibit 10(l) of TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2000, No. 001-10253]; as further amended by amendment adopted April 30, 2001 [incorporated by reference to Exhibit 10(j) of TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001, No. 001-10253]; as amended by amendment adopted October 22, 2001 [incorporated by reference to Exhibit 10(j) of TCF Financial Corporation’s Annual Report on Form 10-K for the year ended December 31, 2001, No.001-10253] ; and as amended by amendment effective as of January 20, 2003 [incorporated by reference to Exhibit 10(j) of TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003, No. 001-10253]; and as amended by amendment effective as of May 30, 2003 [incorporated by reference to Exhibit 10(j) of TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003, No. 001-10253]; and as amended by amendment effective as of July 1, 2004

10(p)		1996 Performance-Based Incentive Policy [incorporated by reference to Policy filed with registrant’s definitive proxy statement dated March 22, 1996, No. 001-10253]; Incentive Compensation 1997 Plan [incorporated by reference to Plan filed with registrant’s definitive proxy statement dated March 17, 1997, No. 001-10253]; 1999 Performance-Based Incentive Policy (approved by shareholders at the Annual Meeting on May 11, 1999) [incorporated by reference to Exhibit 10(s) to TCF Financial Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998, No. 001-10253]; and as amended by amendment adopted January 24, 2000 and approved by shareholders of TCF Financial Corporation at its Annual Meeting on May 10, 2000 [incorporated by reference from TCF Financial Corporation’s Proxy Statement filed March 31, 2000]; as amended and restated effective January 1, 2004, and approved by Shareholders of TCF Financial Corporation at the Annual Meeting on April 28, 2004 [incorporated by reference to Appendix A to TCF Financial Corporation’s Definitive Proxy Statement filed with the SEC on March 17, 2004]

31*		Rule 13a-14(a)/15d-14(a) Certifications (Section 302 Certifications)

32*		Statement Furnished Pursuant to Title 18 United States Code Section 1350 (Section 906 Certifications)

* Filed herein

WASHINGTON, D.C. 20549

FORM 10-Q

TCF FINANCIAL CORPORATION

Delaware

41-1591444

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

INDEX

Performance Summary

Operating Segment Results

Consolidated Provision for Credit Losses