UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended
September 30, 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 October 15, 2004
Common Stock, $.01 par value		138,759,148 shares

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

INDEX

Part I. Financial Information				Pages


	Item 1.		Financial Statements


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

		Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2004 and 2003		4

		Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2004 and 2003		5

		Consolidated Statements of Stockholders’ Equity for the Nine Months Ended September 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 Nine Months Ended September 30, 2004 and 2003	20


	Item 3.		Quantitative and Qualitative Disclosures About Market Risk	45


	Item 4.		Controls and Procedures	49


	Supplementary Information			50


Part II. Other Information


	Items 1-6			52


Signatures				54


Index to Exhibits				55

PART 1 - FINANCIAL STATEMENTS

ITEM 1. Financial Statements

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Financial Condition

(Dollars in thousands, except per-share data)

(Unaudited)

	At September 30, 2004			At December 31, 2003
ASSETS

Cash and due from banks	$	354,651		$		370,054
Investments	92,177			75,223
Securities available for sale	1,330,708			1,533,288
Loans held for sale	330,647			335,372
Loans and leases:
Consumer	4,222,025			3,630,341
Commercial real estate	2,031,031			1,916,701
Commercial business	444,632			427,696
Leasing and equipment finance	1,328,116			1,160,397
Subtotal	8,025,804			7,135,135
Residential real estate	1,047,079			1,212,643
Total loans and leases	9,072,883			8,347,778
Allowance for loan and lease losses	(78,976		)	(76,619			)
Net loans and leases	8,993,907			8,271,159
Premises and equipment	316,833			282,193
Goodwill	152,599			145,462
Deposit base intangibles	4,660			5,907
Mortgage servicing rights	51,474			52,036
Other assets	370,293			248,321
	$	11,997,949		$	11,319,015

LIABILITIES AND STOCKHOLDERS’ EQUITY

Deposits:
Checking	$	3,692,132		$	3,248,412
Savings	1,924,481			1,905,923
Money market	707,046			845,291
Subtotal	6,323,659			5,999,626
Certificates of deposit	1,471,164			1,612,123
Total deposits	7,794,823			7,611,749
Short-term borrowings	845,499			878,412
Long-term borrowings	2,057,608			1,536,413
Total borrowings	2,903,107			2,414,825
Accrued expenses and other liabilities	334,753			371,583
Total liabilities	11,032,683			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, 560,000,000 shares authorized; 184,964,602 and 185,026,710 shares issued	1,850			925
Additional paid-in capital	517,537			518,878
Retained earnings, subject to certain restrictions	1,344,036			1,234,804
Accumulated other comprehensive income	1,471			5,652
Treasury stock at cost, 46,200,454 and 44,074,050 shares, and other	(899,628		)	(839,401			)
Total stockholders’ equity	965,266			920,858
	$	11,997,949		$	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
September 30,

Nine Months Ended
September 30,

2004

2003

2004

2003

Interest income:

Loans and leases

133,295

126,854

386,709

388,129

Securities available for sale

20,414

22,579

61,159

83,826

Loans held for sale

2,931

5,905

9,112

16,919

Investments

773

1,144

2,441

3,726

Total interest income

157,413

156,482

459,421

492,600

Interest expense:

Deposits

10,318

11,816

30,331

45,805

Borrowings

22,605

24,789

63,688

84,742

Total interest expense

32,923

36,605

94,019

130,547

Net interest income

124,490

119,877

365,402

362,053

Provision for credit losses

2,644

2,658

6,874

8,495

Net interest income after provision for credit losses

121,846

117,219

358,528

353,558

Non-interest income:

Fees and service charges

71,353

65,757

204,128

182,970

Card revenue

16,339

12,923

45,854

40,922

ATM revenue

11,474

11,566

32,609

33,223

Investments and insurance commissions

3,057

3,584

9,949

10,864

Subtotal

102,223

93,830

292,540

267,979

Leasing and equipment finance

6,864

10,652

29,276

35,716

Mortgage banking

4,131

11,304

12,376

6,146

Other

2,585

2,303

6,657

6,086

Fees and other revenue

115,803

118,089

340,849

315,927

Gains on sales of securities available for sale

3,679

—

16,396

32,832

Gains (losses) on termination of debt

—

(37,769

)

—

(44,345

)

Gain on sale of loan servicing

—

706

—

Other non-interest income

3,679

(37,769

)

17,102

(11,513

)

Total non-interest income

119,482

80,320

357,951

304,414

Non-interest expense:

Compensation and employee benefits

78,010

75,646

236,486

226,052

Occupancy and equipment

23,673

22,309

70,560

65,439

Advertising and promotions

7,377

6,536

19,785

19,332

Other

38,866

37,891

105,707

107,042

Total non-interest expense

147,926

142,382

432,538

417,865

Income before income tax expense

93,402

55,157

283,941

240,107

Income tax expense

31,690

19,193

96,350

83,725

Net income

61,712

35,964

187,591

156,382

Earnings per common share:

Basic

.45

.26

1.37

1.10

Diluted

.45

.26

1.36

1.10

Dividends declared per common share

.1875

.1625

.5625

.4875

See accompanying notes to consolidated financial statements.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2004				2003
Cash flows from operating activities:
Net income	$	187,591			$	156,382
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	28,294				29,214
Mortgage servicing rights amortization and impairment	8,725				43,793
Provision for credit losses	6,874				8,495
Proceeds from sales of loans held for sale	812,638				2,558,450
Principal collected on loans held for sale	7,071				7,118
Originations and purchases of loans held for sale	(815,659			)	(2,523,143		)
Net increase in other assets and accrued expenses and other liabilities	(1,133			)	(12,752		)
Gains on sales of assets	(17,102			)	(32,832		)
Losses on termination of debt	—				44,345
Other, net	(4,006			)	(8,254		)

Total adjustments	25,702				114,434

Net cash provided by operating activities	213,293				270,816

Cash flows from investing activities:
Principal collected on loans and leases	2,823,395				3,391,172
Originations and purchases of loans	(3,055,828			)	(3,060,312		)
Purchase of lease financing receivables	—				(58,706		)
Purchases of equipment for lease financing	(492,742			)	(367,132		)
Proceeds from sales of securities available for sale	970,249				849,333
Proceeds from maturities of and principal collected on securities available for sale	287,662				772,697
Purchases of securities available for sale	(1,213,660			)	(820,456		)
Net (increase) decrease in Federal Home Loan Bank stock	(19,254			)	79,029
Proceeds from sales of real estate owned	30,660				18,755
Acquisitions, net of cash acquired	(4,326			)	—
Purchases of premises and equipment	(57,801			)	(46,261		)
Other, net	173				(17,314		)

Net cash (used) provided by investing activities	(731,472			)	740,805

Cash flows from financing activities:
Net increase in deposits	183,074				2,615
Net (decrease) increase in short-term borrowings	(43,765			)	58,784
Proceeds from long-term borrowings	542,768				17,482
Payments on long-term borrowings	(41,664			)	(944,764		)
Purchases of common stock	(67,900			)	(107,905		)
Dividends on common stock	(78,359			)	(70,173		)
Other, net	8,622				5,180

Net cash provided (used) by financing activities	502,776				(1,038,781		)

Net decrease in cash and due from banks	(15,403			)	(27,160		)
Cash and due from banks at beginning of period	370,054				416,397
Cash and due from banks at end of period	$		354,651		$	389,237

Supplemental disclosures of cash flow information:
Cash paid for:
Interest on deposits and borrowings	$		90,359		$	130,335
Income taxes	$		98,341		$	93,922
Transfer of loans and leases to other assets	$		20,103		$	21,779

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	185,277,874		$	926		$	518,813		$	1,111,955		$	46,102		$	(700,776	)	$	977,020
Comprehensive income (loss):
Net income	—		—			—			156,382			—			—			156,382
Other comprehensive loss	—		—			—			—			(32,717		)	—			(32,717		)
Comprehensive income (loss)	—		—			—			156,382			(32,717		)	—			123,665
Dividends on common stock	—		—			—			(70,173		)	—			—			(70,173		)
Repurchase of 5,287,102 shares	—		—			—			—			—			(107,905		)	(107,905		)
Issuance of 198,314 shares	—		—			977			—			—			(977		)	—
Cancellation of shares	(228,600	)	(1		)	(3,144		)	—			—			2,075			(1,070		)
Amortization of stock compensation	—		—			—			—			—			7,201			7,201
Exercise of stock options, 120,558 shares	—		—			1,257			—			—			1,973			3,230
Change in shares held in trust for deferred compensation plans, at cost	—		—			(298		)	—			—			298			—
Balance, September 30, 2003	185,049,274		$	925		$	517,605		$	1,198,164		$	13,385		$	(798,111	)	$	931,968

Balance, December 31, 2003	185,026,710		$	925		$	518,878		$	1,234,804		$	5,652		$	(839,401	)	$	920,858
Comprehensive income (loss):
Net income	—		—			—			187,591			—			—			187,591
Other comprehensive loss	—		—			—			—			(4,181		)	—			(4,181		)
Comprehensive income (loss)	—		—			—			187,591			(4,181		)	—			183,410
Dividends on common stock	—		—			—			(78,359		)	—			—			(78,359		)
Stock split	—		925			(925		)	—			—			—			—
Repurchase of 2,414,890 shares	—		—			—			—			—			(67,900		)	(67,900		)
Issuance of 132,654 shares	—		—			1,400			—			—			(1,400		)	—
Cancellation of shares	(62,108	)	—			(1,504		)	—			—			544			(960		)
Amortization of stock compensation	—		—			—			—			—			3,999			3,999
Exercise of stock options, 155,832 shares	—		—			1,533			—			—			2,685			4,218
Change in shares held in trust for deferred compensation plans, at cost	—		—			(1,845		)	—			—			1,845			—
Balance, September 30, 2004	184,964,602		$	1,850		$	517,537		$	1,344,036		$	1,471		$	(899,628	)	$	965,266

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 September 30, 2004		At December 31, 2003
Federal Home Loan Bank stock, at cost	$	69,812	$	50,411
Federal Reserve Bank stock, at cost	21,845		24,045
Interest-bearing deposits with banks	520		767
Total investments	$	92,177	$	75,223

(3) Securities Available for Sale

Securities available for sale consist of the following:

	At September 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	$	1,320,736		$	6,164	$	(3,637	)	$	1,323,263	$	1,514,400		$	13,744	$	(4,677	)	$	1,523,467
Other	6,923			—		(228		)	6,695		9,272			—		(201		)	9,071
Other securities	750			—		—			750		750			—		—			750
	$	1,328,409		$	6,164	$	(3,865	)	$	1,330,708	$	1,524,422		$	13,744	$	(4,878	)	$	1,533,288

Weighted-average yield	5.23		%								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 September 30, 2004. TCF has reviewed these securities and has concluded that the unrealized losses are temporary and no impairment has occurred at September 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	$	367,597	$	(2,070	)	$	83,431	$	(1,567	)	$	451,028	$	(3,637	)
Other	—		—			5,477		(228		)	5,477		(228		)
Total	$	367,597	$	(2,070	)	$	88,908	$	(1,795	)	$	456,505	$	(3,865	)

(4) Goodwill and Intangible Assets

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

	At September 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	$	85,356	$	33,882	$	51,474	$	76,306	$	24,270	$	52,036
Deposit base intangibles	21,180		16,520		4,660		21,180		15,273		5,907
Total	$	106,536	$	50,402	$	56,134	$	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 $11 million and $21.5 million for the nine months ended September 30, 2004 and 2003, respectively. The following table shows the estimated future amortization expense for amortized intangible assets based on existing asset balances and the interest rate environment as of September 30, 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 and market conditions.

(In thousands)	Mortgage Servicing Rights		Deposit Base Intangibles		Total

Estimated Amortization Expense:
For the remaining three months ending December 31, 2004	$	3,078	$	416	$	3,494

For the year ended December 31, 2005	10,828		1,659		12,487
For the year ended December 31, 2006	9,024		1,630		10,654
For the year ended December 31, 2007	7,201		955		8,156
For the year ended December 31, 2008	5,725		—		5,725
For the year ended December 31, 2009	4,569		—		4,569

(5) Mortgage Banking

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

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2004			2003			2004			2003

Mortgage servicing rights at beginning of period	$	53,290		$	47,725		$	54,036		$	71,990
Wholesale originations	818			7,300			4,021			19,041
Retail originations	1,174			4,587			4,142			11,227
Amortization	(2,808		)	(4,147		)	(9,725		)	(20,293		)
Impairment write-down	—			—			—			(26,500		)
Mortgage servicing rights at end of period	52,474			55,465			52,474			55,465
Valuation allowance at beginning of period	(2,000		)	(6,346		)	(2,000		)	(9,346		)
Provision for (impairment) recovery	1,000			—			1,000			(23,500		)
Impairment write-down	—			—			—			26,500
Valuation allowance at end of period	(1,000		)	(6,346		)	(1,000		)	(6,346		)
Mortgage servicing rights, net	$	51,474		$	49,119		$	51,474		$	49,119

The estimated fair value of mortgage servicing rights included at September 30, 2004 was approximately $57.8 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 September 30,					Change					Nine Months Ended September 30,						Change
(Dollars in thousands)	2004			2003		$			%		2004			2003			$			%

Servicing income	$	4,215		$	4,946	$	(731	)	(14.8	)%	$	13,179		$	15,742		$	(2,563	)	(16.3	)%
Less mortgage servicing:
Amortization	2,807			4,147		(1,340		)	(32.3	)	9,725			20,293			(10,568		)	(52.1	)
Impairment (recovery)	(1,000		)	—		(1,000		)	N.M.		(1,000		)	23,500			(24,500		)	N.M.
Subtotal	1,807			4,147		(2,340		)	(56.4	)	8,725			43,793			(35,068		)	(80.1	)
Net servicing income (loss)	2,408			799		1,609			N.M.		4,454			(28,051		)	32,505			N.M.
Gains on sales of loans	1,442			9,524		(8,082		)	(84.9	)	6,746			31,113			(24,367		)	(78.3	)
Other income	281			981		(700		)	(71.4	)	1,176			3,084			(1,908		)	(61.9	)
Total mortgage banking revenue	$	4,131		$	11,304	$	(7,173	)	(63.5	)	$	12,376		$	6,146		$	6,230		101.4

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			At
	September 30,			December 31,			Change
(Dollars in thousands)	2004			2003			$			%
Unrealized Gains (Losses):
Residential loans held for sale	$	575		$	1,092		$	(517	)	(47.3	)%
Loan applications in process	40			195			(155		)	(79.5	)
Subtotal	615			1,287			(672		)	(52.2	)
Forward sales contracts	(708		)	(1,105		)	397			35.9
Net unrealized (losses) gains	$	(93	)	$	182		$	(275	)	N.M.

N.M. Not meaningful

At September 30, 2004 and 2003, TCF was servicing real estate loans for others with aggregate unpaid principal balances of approximately $4.7 billion and $5.2 billion, respectively. At September 30, 2004 and 2003, TCF had custodial funds of $116.2 million and $201.9 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. The decline in custodial balances is the result of a decline in refinance activity during the past twelve months.

(6) Long-term Borrowings

		At September 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		4.45		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		3.75		1,470,000		4.31

Discounted lease rentals	2004	11,952		5.82		43,607		6.24
	2005	29,410		5.67		18,097		5.68
	2006	12,857		5.70		4,134		5.55
	2007	2,822		5.89		522		5.30
	2008	546		5.99		53		5.54
	2009	51		6.45		—		—
Total discounted lease rentals		57,638		5.72		66,413		6.04

Subordinated bank notes	2014	74,170		5.27		—		—

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		$	2,057,608	3.86		$	1,536,413	4.38

Included in long-term borrowings at September 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 September 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.

During the second quarter of 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

During the third quarter of 2004, TCF announced and completed a two-for-one stock split of its common stock in the form of a 100% stock dividend. The stock split resulted in an increase in issued common stock of 92,485,601 shares and was accounted for by a transfer of $925 thousand to common stock from additional paid-in capital. All prior period common shares and per share disclosures have been restated to reflect the split.

Treasury stock and other consists of the following:

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

Treasury stock, at cost	$	(814,504		)	$	(751,586	)
Shares held in trust for deferred compensation plans, at cost	(69,258			)	(71,103		)
Unamortized stock compensation	(15,866			)	(16,712		)
	$		(899,628	)	$	(839,401	)

TCF purchased 2.4 million shares of its common stock during the first nine months of 2004, compared with 5.3 million shares for the same 2003 period. At September 30, 2004, TCF had 5 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 minimum capital requirements:

	Actual				Well-capitalized Capital Requirement				Excess
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of September 30, 2004:
Tier 1 leverage capital
TCF Financial Corporation	N/A		—	%	N/A		—	%	N/A		—	%
TCF National Bank	$	769,816	6.46		$	595,546	5.00		$	174,270	1.46

Tier 1 risk-based capital
TCF Financial Corporation	807,549		9.43		513,850		6.00		293,699		3.43
TCF National Bank	769,816		9.01		512,774		6.00		257,042		3.01

Total risk-based capital
TCF Financial Corporation	961,539		11.23		856,416		10.00		105,123		1.23
TCF National Bank	923,806		10.81		854,623		10.00		69,183		0.81

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 September 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 nine months ended September 30, 2004 and 2003:

	Pension Plan
	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2004			2003			2004			2003
Service cost	$	1,158		$	987		$	3,474		$	2,961
Interest cost	791			737			2,373			2,211
Expected return on plan assets	(1,489		)	(1,593		)	(4,467		)	(4,779		)
Amortization of prior service cost	(58		)	(90		)	(174		)	(270		)
Net periodic benefit cost	$	402		$	41		$	1,206		$	123

	Postretirement Plan
	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2004		2003		2004		2003
Service cost	$	13	$	15	$	40	$	45
Interest cost	164		185		507		555
Amortization of transition obligation	53		52		158		156
Recognized actuarial loss	49		57		166		171
Net periodic benefit cost	$	279	$	309	$	871	$	927

During the second quarter of 2004, TCF contributed $2.6 million to the Pension Plan under the maximum contribution formula for 2003. TCF does not anticipate making any additional contributions in 2004 to the Pension Plan. During the third quarter and first nine months of 2004, TCF paid $250 thousand and $790 thousand, respectively, to the Postretirement Plan.

In the second quarter of 2004, TCF re-measured 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 postretirement benefit cost decreased $34 thousand and $69 thousand for the third quarter and first nine months of 2004, respectively.

(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 $62 million at September 30, 2004 and $149.1 million at 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 September 30, 2004

Revenues from external customers:
Interest income	$	133,537	$	22,855	$	1,021		$	—		$	—		$	157,413
Non-interest income	108,482		6,863		4,132			5			—			119,482
Total	$	242,019	$	29,718	$	5,153		$	5		$	—		$	276,895

Net interest income	$	108,130	$	14,387	$	1,813		$	(202	)	$	362		$	124,490
Provision for credit losses	747		1,897		—			—			—			2,644
Non-interest income	108,482		6,863		4,494			23,257			(23,614		)	119,482
Non-interest expense	132,613		10,253		7,649			20,663			(23,252		)	147,926
Income tax expense (benefit)	28,435		3,050		(474		)	679			—			31,690
Net income (loss)	$	54,817	$	6,050	$	(868	)	$	1,713		$	—		$	61,712

Total assets	$	11,552,874	$	1,395,196	$	122,764		$	117,601		$	(1,190,486	)	$	11,997,949

At or For the Three Months Ended September 30, 2003

Revenues from external customers:
Interest income	$	130,955	$	20,929	$	4,598		$	—		$	—		$	156,482
Non-interest income	58,347		10,652		11,312			9			—			80,320
Total	$	189,302	$	31,581	$	15,910		$	9		$	—		$	236,802

Net interest income	$	101,176	$	11,966	$	6,859		$	(250	)	$	126		$	119,877
Provision for credit losses	501		2,157		—			—			—			2,658
Non-interest income	58,347		10,652		11,439			20,516			(20,634		)	80,320
Non-interest expense	122,640		10,690		9,328			20,232			(20,508		)	142,382
Income tax expense (benefit)	12,660		3,556		3,171			(194		)	—			19,193
Net income	$	23,722	$	6,215	$	5,799		$	228		$	—		$	35,964

Total assets	$	10,833,360	$	1,187,759	$	257,770		$	106,125		$	(1,131,108	)	$	11,253,906

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

Revenues from external customers:
Interest income	$	389,379	$	66,333	$	3,709		$	—		$	—		$	459,421
Non-interest income	315,200		29,649		13,082			20			—			357,951
Total	$	704,579	$	95,982	$	16,791		$	20		$	—		$	817,372

Net interest income	$	317,086	$	41,055	$	6,881		$	(625	)	$	1,005		$	365,402
Provision for credit losses	2,067		4,807		—			—			—			6,874
Non-interest income	315,200		29,649		14,087			72,228			(73,213		)	357,951
Non-interest expense	384,257		30,739		21,814			67,936			(72,208		)	432,538
Income tax expense (benefit)	83,865		12,344		(300		)	441			—			96,350
Net income (loss)	$	162,097	$	22,814	$	(546	)	$	3,226		$	—		$	187,591

At or For the Nine Months Ended September 30, 2003

Revenues from external customers:
Interest income	$	418,855	$	61,594	$	12,151		$	—		$	—		$	492,600
Non-interest income	262,179		35,716		6,188			331			—			304,414
Total	$	681,034	$	97,310	$	18,339		$	331		$	—		$	797,014

Net interest income	$	310,419	$	33,557	$	18,772		$	(810	)	$	115		$	362,053
Provision for credit losses	2,236		6,259		—			—			—			8,495
Non-interest income	262,179		35,716		6,303			68,143			(67,927		)	304,414
Non-interest expense	366,926		30,391		22,982			65,378			(67,812		)	417,865
Income tax expense	70,597		12,026		741			361			—			83,725
Net income	$	132,839	$	20,597	$	1,352		$	1,594		$	—		$	156,382

(12) Earnings Per Common Share

During the third quarter of 2004, TCF announced and completed a two-for-one stock split of its common stock in the form of a 100% stock dividend. As a result of the two-for-one stock split, all prior period share and per share data have been restated.

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

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

Basic Earnings Per Common Share

Net income	$	61,712			$	35,964			$	187,591			$	156,382

Weighted average shares outstanding	139,245,241				142,922,156				140,265,853				144,857,068
Unvested restricted stock grants (1)	(3,060,964			)	(3,026,208			)	(3,042,655			)	(3,025,118		)
Weighted average common shares outstanding for basic earnings per common share	136,184,277				139,895,948				137,223,198				141,831,950

Basic earnings per common share	$		.45		$		.26		$		1.37		$	1.10

Diluted Earnings Per Common Share

Net income	$		61,712		$		35,964		$		187,591		$	156,382

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	136,184,277				139,895,948				137,223,198				141,831,950
Net dilutive effect of:
Stock option grants	186,342				188,734				183,407				179,256
Restricted stock grants (1)	473,056				365,560				435,127				337,100
	136,843,675				140,450,242				137,841,732				142,348,306

Diluted earnings per common share	$		.45		$		.26		$		1.36		$	1.10

(1) At September 30, 2004 and 2003, there were 2,142,246 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 September 30,						Nine Months Ended September 30,
(In thousands)	2004			2003			2004			2003
Net income	$	61,712		$	35,964		$	187,591		$	156,382

Other comprehensive income (loss) before tax:
Unrealized holding gains (losses) arising during the period on securities available for sale	28,889			(31,331		)	9,829			(18,488		)

Reclassification adjustment for gains included in net income	(3,679		)	—			(16,396		)	(32,832		)

Income tax expense (benefit)	9,076			(11,357		)	(2,386		)	(18,603		)

Total other comprehensive income (loss), net of tax	16,134			(19,974		)	(4,181		)	(32,717		)

Comprehensive income	$	77,846		$	15,990		$	183,410		$	123,665

(14) Other Expense

Other expense consists of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2004		2003		2004		2003
Deposit account losses	$	7,465	$	5,593	$	16,993	$	13,374
Postage and courier	3,522		3,622		10,640		10,865
Telecommunications	3,095		2,987		9,292		9,478
Card processing	2,895		2,950		8,112		8,405
ATM processing	2,471		2,519		6,950		7,225
Office supplies	2,382		2,123		7,176		6,879
Federal deposit insurance and OCC assessments	679		697		2,010		2,113
Deposit based intangible amortization	416		417		1,247		1,250
Mortgage servicing liquidation expense	282		1,549		1,164		3,827
Other	15,659		15,434		42,123		43,626

Total other expense	$	38,866	$	37,891	$	105,707	$	107,042

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 419 banking offices in Minnesota, Illinois, Michigan, Wisconsin, Colorado and Indiana at September 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 September 30, 2004, 246, or 58.7%, of TCF’s 419 branches were opened since January 1, 1998 and consist of 193 supermarket branches and 53 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. 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 primarily 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 50.5% 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. See “Market Risk – 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 Classic debit cards in the United States. TCF earns interchange revenue from customer debit card transactions. During the third quarter of 2004, 87.8% of TCF’s debit card sales volume was generated from off-line (signature-based) transactions. The average interchange rate on these off-line transactions increased from 1.35% for the third quarter of 2003 to 1.45% for the third quarter of 2004. The increase in the average off-line interchange rate was the result of VISA USA establishing new interchange rates which took effect in February 2004, and these rates were higher than the rates which were established by VISA in August of 2003, as part of the settlement of class action lawsuits. Class action litigation brought by certain merchants who chose not to participate in this settlement remains pending. In October 2004, the United States Supreme Court decided not to hear an appeal of a ruling that VISA and MasterCard may not bar member banks from issuing cards on rival networks. Rival card networks, such as Discover and American Express, have brought or are considering bringing private legal action against VISA and MasterCard. VISA is a defendant in several other legal actions. The ultimate impact of any such litigation cannot be predicted at this time. 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. During the third quarter of 2004, TCF announced a restructuring of its mortgage origination businesses and ceased wholesale originations. The retail origination function will be downsized and integrated with TCF’s consumer lending business by year-end. In late 2004, TCF will cease selling new originations to investors and will retain all new loans. TCF continues to service mortgage loans for investors. TCF does not utilize derivatives to manage the impairment risk in its capitalized mortgage servicing rights.

The following portions of the Management’s Discussion and Analysis focus in more detail on the results of operations for the three and nine months ended September 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 45 cents and $1.36 for the third quarter and first nine months of 2004, respectively, compared with 26 cents and $1.10 for the same periods of 2003. Net income was $61.7 million and $187.6 million for the third quarter and first nine months of 2004, respectively, compared with $36 million and $156.4 million for the same 2003 periods. Net income for the third quarter and first nine months of 2003, included $24.6 million after-tax, and $28.9 million after-tax, respectively, of losses on termination of debt. There were no debt terminations in 2004. For the third quarter and first nine months of 2004, returns on average assets were 2.06% and 2.12%, respectively, compared with 1.24% and 1.76% for the same 2003 periods, and returns on average common equity were 25.96% and 26.56%, respectively, up from 15.77% and 22.04% 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 $54.8 million and $162.1 million for the third quarter and first nine months of 2004, respectively, compared with $23.7 million and $132.8 million for the same 2003 periods. Banking net interest income for the third quarter and first nine months of 2004 was $108.1 million and $317.1 million, respectively, compared with $101.2 million and $310.4 million for the same 2003 periods. The provision for credit losses totaled $747 thousand and $2.1 million for the third quarter and first nine months of 2004, respectively, compared with $501 thousand and $2.2 million for the same 2003 periods. Non-interest income totaled $108.5 million and $315.2 million for the third quarter and first nine months of 2004, respectively, compared with $58.3 million and $262.2 million for the same 2003 periods. During the third quarter of 2004, TCF sold mortgage-backed securities and realized gains of $3.7 million, compared with no sales or gains during the third quarter of 2003. During the first nine months of 2004, TCF sold mortgage-backed securities and realized gains of $16.4 million, compared with $32.8 million for the same period of 2003. During the third quarter and first nine months of 2003, TCF prepaid $804 million and $954 million, respectively, of Federal Home Loan Bank (“FHLB”) advances and recorded losses on termination of debt of $37.8 million and $44.3 million, respectively. There were no debt terminations during 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, card and other revenues were $104.8 million and $298.8 million for the third quarter and first nine months of 2004, respectively, up from $96.1 million and $273.7 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. Banking non-interest expense was $132.6 million and $384.3 million for the third quarter and first nine months of 2004, respectively, compared with $122.6 million and $366.9 million for the same 2003 periods. The increases were primarily due to costs associated with new branch expansion.

TCF had 419 branches, including 244 full service branches in supermarkets at September 30, 2004. During the third quarter of 2004, TCF opened nine new branches, including five traditional branches and four supermarket branches and has opened 18 new branches, including 11 traditional branches, in the first nine months of 2004. Since January 1, 1998, TCF has opened 246 new branches. TCF plans to open 14 more new branches in the remainder of 2004, consisting of ten traditional branches and four supermarket branches. In 2005, TCF plans to open 31 new branches, consisting of 24 traditional branches and seven 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 of home medical equipment to dealers. At September 30, 2004, VGM had $128.1 million in leasing and equipment finance portfolio balance. Leasing and Equipment Finance reported net income of $6.1 million for the third quarter, down from $6.2 million for the same 2003 period. For the first nine months of 2004, Leasing and Equipment Finance net income was $22.8 million, up from $20.6 million for the first nine months of 2003. Net interest income for the third quarter and first nine months of 2004 was $14.4 million and $41.1 million, respectively, up from $12 million and $33.6 million for the same 2003 periods. The provision for credit losses for this operating segment totaled $1.9 million and $4.8 million for the third quarter and first nine months of 2004, respectively, compared with $2.2 million and $6.3 million for the same periods in 2003. Non-interest income totaled $6.9 million for the third quarter of 2004, compared with $10.7 million for the third quarter of 2003. Non-interest income for the first nine months of 2004 totaled $29.6 million, down from $35.7 million for the same 2003 period. These declines were primarily the result of declines in sales-type and operating 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 $10.3 million for the third quarter of 2004, down from $10.7 million for the same 2003 period. Non-interest expense for the first nine months of 2004 was $30.7 million, up from $30.4 million for the first nine months of 2003. Included in non-interest expenses for the first nine months of 2004 was an impairment charge of $1.6 million related to a reduction in the estimated residual value of an aircraft 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 a net loss of $868 thousand and $546 thousand for the third quarter and first nine months of 2004, respectively, compared with net income of $5.8 million and $1.4 million for the same 2003 periods. Non-interest income totaled $4.5 million for the third quarter of 2004, down from $11.4 million for the same 2003 period. The decrease in non-interest income in the third quarter of 2004 was primarily due to an $8.1 million decrease in gains on sales of loans as a result of the significant decrease in mortgage refinance activity as well as the above-mentioned restructuring of the mortgage banking operations in the third quarter of 2004. Non-interest income for the first nine months of 2004 was $14.1 million, up from $6.3 million for the first nine months of 2003. The increase in non-interest income for the first nine months of 2004 was primarily due to a decline 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 $193.1 million and $780.3 million in loans during the third quarter and first nine months of 2004, respectively, down 80.6% and 71.3% from the same 2003 periods. Mortgage applications in process (mortgage pipeline) decreased from $354.6 million at September 30, 2003 to $168.3 million at September 30, 2004. The declines in both mortgage operation’s fundings and applications in process are the result of a decline in refinance activity coupled with the cessation of wholesale originations. See Note 5 of Notes to the Consolidated Financial Statements for further discussion. Mortgage Banking’s non-interest expense totaled $7.6 million and $21.8 million for the third quarter and first nine months of 2004, respectively, compared with $9.3 million and $23 million for the same 2003 periods. During the third quarter of 2004, the Mortgage Banking operations recorded $1.1 million of expense related to the restructuring of its operations.

Consolidated Net Interest Income

Net interest income for the third quarter of 2004 was $124.5 million, up from $119.9 million for the third quarter of 2003 and $122.4 million for the 2004 second quarter. Net interest income for the first nine months of 2004 was $365.4 million, up from $362.1 million for the same period in 2003. The net interest margin for the third quarter of 2004 was 4.56%, compared with 4.57% for the same 2003 period and 4.53% for the second quarter of 2004. The increase in net interest income from the third quarter of 2003 primarily reflects the growth in average consumer, commercial and leasing and equipment finance balances, up $1.1 billion over the third quarter of 2003, partially offset by the reductions in residential real estate loans and mortgage-backed securities (“MBS’s”), down $419.3 million from the 2003 third quarter, and mortgage loans held for sale down $244.9 million during the same period. The decrease in average 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 to replace prepayments and sales of such assets during the very low interest rate environment. The increase in net interest income and net interest margin in the third quarter from the second quarter of 2004 was primarily driven by a $268.6 million increase in average consumer, commercial and leasing and equipment finance balances coupled with the favorable impact of the increases in short-term interest rates partially offset by the reductions in residential real estate loans and MBS’s and mortgage loans held for sale, the issuance of $75 million of subordinated debt and the impact of placing an aircraft leveraged lease on non-accrual.

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 nine months ended September 30, 2004 and 2003:

	Three Months Ended September 30,
	2004					2003					Change
	Average			Yields and		Average			Yields and		Average				Yields and
(Dollars in thousands)	Balance			Rates (1)		Balance			Rates (1)		Balance				Rates (bps)
Interest-earning Assets:
Investments	$		94,910	3.25	%	$	89,182		5.10	%	$		5,728		(185	)
Securities available for sale (2)	1,545,768			5.28		1,696,800			5.32		(151,032			)	(4	)
Loans held for sale	327,953			3.56		572,827			4.09		(244,874			)	(53	)
Loans and leases:
Consumer	4,099,569			6.06		3,365,816			6.42		733,753				(36	)
Commercial real estate	2,012,790			5.49		1,846,204			5.73		166,586				(24	)
Commercial business	440,010			4.32		452,260			4.15		(12,250			)	17
Leasing and equipment finance	1,320,495			6.92		1,123,284			7.45		197,211				(53	)
Subtotal	7,872,864			5.96		6,787,564			6.25		1,085,300				(29	)
Residential real estate	1,076,619			5.72		1,344,921			5.97		(268,302			)	(25	)
Total loans and leases (3)	8,949,483			5.93		8,132,485			6.20		816,998				(27	)
Total interest-earning assets	10,918,114			5.75		10,491,294			5.94		426,820				(19	)
Deposits and Borrowings:
Deposits:
Checking	3,657,340			.11	%	3,194,438			.03	%	462,902				8
Savings	1,925,674			.38		2,143,100			.29		(217,426			)	9
Money market	738,769			.38		899,071			.39		(160,302			)	(1	)
Subtotal	6,321,783			.22		6,236,609			.17		85,174				5
Certificates of deposit	1,458,905			1.84		1,644,351			2.20		(185,446			)	(36	)
Total deposits	7,780,688			.53		7,880,960			.59		(100,272			)	(6	)
Borrowings:
Short-term borrowings	824,955			1.47		673,312			1.14		151,643				33
Long-term borrowings	2,059,525			3.84		1,721,151			5.34		338,374				(150	)
Total borrowings	2,884,480			3.17		2,394,463			4.16		490,017				(99	)

Total deposits and borrowings	10,665,168			1.24		10,275,423			1.42		389,745				(18	)

Net interest-earning assets and net interest margin	$	252,946		4.56		$		215,871	4.57		$	37,075			(1	)

	Nine Months Ended September 30,
	2004				2003				Change
	Average		Yields and		Average		Yields and		Average			Yields and
(Dollars in thousands)	Balance		Rates (1)		Balance		Rates (1)		Balance			Rates (bps)
Interest-earning Assets:
Investments	$	131,290	2.48	%	$	110,237	4.52	%	$	21,053		(204	)
Securities available for sale (2)	1,537,310		5.30		2,021,036		5.53		(483,726		)	(23	)
Loans held for sale	357,354		3.41		532,101		4.25		(174,747		)	(84	)
Loans and leases:
Consumer	3,903,990		6.06		3,206,777		6.64		697,213			(58	)
Commercial real estate	1,980,380		5.46		1,847,455		5.98		132,925			(52	)
Commercial business	432,174		4.16		452,820		4.31		(20,646		)	(15	)
Leasing and equipment finance	1,267,102		6.98		1,074,912		7.64		192,190			(66	)
Subtotal	7,583,646		5.95		6,581,964		6.46		1,001,682			(51	)
Residential real estate	1,130,840		5.75		1,502,642		6.22		(371,802		)	(47	)
Total loans and leases (3)	8,714,486		5.92		8,084,606		6.41		629,880			(49	)
Total interest-earning assets	10,740,440		5.71		10,747,980		6.12		(7,540		)	(41	)
Deposits and Borrowings:
Deposits:
Checking	3,528,317		.08	%	3,032,653		.03	%	495,664			5
Savings	1,943,862		.35		2,118,633		.47		(174,771		)	(12	)
Money market	790,128		.37		894,305		.54		(104,177		)	(17	)
Subtotal	6,262,307		.20		6,045,591		.26		216,716			(6	)
Certificates of deposit	1,502,064		1.86		1,789,377		2.54		(287,313		)	(68	)
Total deposits	7,764,371		.52		7,834,968		.78		(70,597		)	(26	)
Borrowings:
Short-term borrowings	743,754		1.35		695,008		1.25		48,746			10
Long-term borrowings	1,963,440		3.88		1,920,269		5.49		43,171			(161	)
Total borrowings	2,707,194		3.18		2,615,277		4.36		91,917			(118	)

Total deposits and borrowings	10,471,565		1.21		10,450,245		1.68		21,320			(47	)

Net interest-earning assets and net interest margin	$	268,875	4.54		$	297,735	4.49		$	(28,860	)	5

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									Nine Months Ended
	September 30, 2004									September 30, 2004
	Versus Same Period in 2003									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	$	69		$	(440	)	$	(371	)	$	616		$	(1,901	)	$	(1,285	)
Securities available for sale	(1,995		)	(170		)	(2,165		)	(19,363		)	(3,304		)	(22,667		)
Loans held for sale	(2,278		)	(696		)	(2,974		)	(4,870		)	(2,937		)	(7,807		)
Loans and leases:
Consumer	11,197			(3,143		)	8,054			32,496			(14,601		)	17,895
Commercial real estate	2,280			(1,187		)	1,093			5,709			(7,314		)	(1,605		)
Commercial business	(135		)	182			47			(653		)	(457		)	(1,110		)
Leasing and equipment finance	3,488			(1,562		)	1,926			10,371			(5,632		)	4,739
Residential real estate	(3,876		)	(803		)	(4,679		)	(16,333		)	(5,006		)	(21,339		)
Total interest income	6,124			(5,193		)	931			(345		)	(32,834		)	(33,179		)
Interest expense:
Checking	39			756			795			145			1,240			1,385
Savings	(23		)	273			250			(133		)	(2,231		)	(2,364		)
Money market	(156		)	(31		)	(187		)	(386		)	(1,039		)	(1,425		)
Certificates of deposit	(968		)	(1,388		)	(2,356		)	(4,901		)	(8,169		)	(13,070		)
Short-term borrowings	487			639			1,126			474			528			1,002
Long-term borrowings	3,962			(7,272		)	(3,310		)	1,723			(23,779		)	(22,056		)
Total interest expense	1,318			(5,000		)	(3,682		)	266			(36,794		)	(36,528		)
Net interest income	4,866			(253		)	4,613			(255		)	3,604			3,349

(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 $2.6 million and $6.9 million for credit losses in the third quarter and first nine months of 2004, respectively, compared with $2.7 million and $8.5 million for the same periods in 2003. Net loan and lease charge-offs were $3.7 million, or .17% (annualized) and $6.3 million, or ..10% (annualized) of average loans and leases, in the third quarter and first nine months of 2004, respectively, compared with $1.7 million, or .08% (annualized) and $6.8 million, or .11% (annualized) of average loans and leases for the same 2003 periods. Leasing and equipment finance had net charge-offs of $2 million during the third quarter of 2004 compared with net charge-offs of $834 thousand 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 $119.5 million and $358 million for the third quarter and first nine months of 2004, respectively, compared with $80.3 million and $304.4 million for the same period in 2003. Significantly impacting consolidated non-interest income during the third quarter and first nine months of 2003, were losses of $37.8 million and $44.3 million, respectively, on the termination of debt. There were no debt terminations in 2004.

Fees and Service Charges

Fees and service charges increased $5.6 million, or 8.5%, to $71.4 million for the third quarter of 2004, compared with $65.8 million for the same period of 2003. Fees and service charges increased $21.2 million, or 11.6%, to $204.1 million for the first nine months of 2004, compared with $183 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 24,096 accounts, or 6.4% (annualized), in the third quarter of 2004 to 1,526,952 accounts and was up 103,250 accounts, or 7.3%, from September 30, 2003.

Card Revenue

For the third quarter of 2004, card revenue, primarily interchange fees, totaled $16.3 million, up $3.4 million, or 26.4%, from the third quarter of 2003. For the first nine months of 2004, card revenue totaled $45.9 million, up $4.9 million, or 12.1%, from the first nine 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 on debit cards for certain merchants from August 2003 through February 2004. Additionally, as part of the settlement, VISA established new interchange rates for debit cards, which took effect in February 2004, and these rates increased from the rate established August 1, 2003. The increase in card revenue for the third quarter of 2004, was aided by a 16% increase in off-line sales volumes coupled with a 10 basis point increase in the average off-line interchange rates during the periods. The increase in card revenue for the first nine months of 2004 was primarily attributed to an 18% increase in off-line sales volumes partially offset by an 11 basis point decline in average off-line interchange rates from the first nine months of 2003.

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

	At September 30,						Change
(Dollars in thousands)	2004			2003			Amount		%
Average number of checking accounts with debit cards	1,347,181			1,211,306			135,875		11.2	%

Number of checking accounts who were active users	718,880			657,637			61,243		9.3

Average number of transactions per month on active debit cards for the quarter ended	13.6			12.7			0.9		7.1

Sales volume for the quarter ended:
Off-line (Signature)	$	1,051,884		$	907,738		$	144,146	15.9
On-line (PIN)	145,600			90,970			54,630		60.1
Total	$	1,197,484		$	998,708		$	198,776	19.9
Off-line sales volume as a percentage of total	87.8		%	90.9		%			(310	) bps

Average off-line interchange rate for the quarter	1.45		%	1.35		%			10

ATM Revenue

For the third quarter and first nine months of 2004, ATM revenue was $11.5 million and $32.6 million, respectively, down slightly from $11.6 million and $33.2 million for the same periods of 2003. The decline in ATM revenue in the third quarter and first nine 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 September 30, 2004, TCF had 1,171 EXPRESS TELLER^Ò ATM machines, compared with 1,186 machines at September 30, 2003.

Leasing and Equipment Finance Revenue

Leasing and equipment finance revenues totaled $6.9 million and $29.3 million for the third quarter and first nine months of 2004, respectively, compared with $10.7 million and $35.7 million for the same 2003 periods. The declines in leasing and equipment finance revenues for the third quarter and first nine months of 2004 compared with 2003 is primarily the result of declines in sales-type and operating 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

During the third quarter of 2004, TCF announced a restructuring of its mortgage origination businesses and ceased wholesale originations. The retail loan origination function will be downsized and integrated with TCF’s consumer lending business by year-end. TCF continues to service mortgage loans for investors. In late 2004, TCF will cease selling new loan originations to investors and will retain all new mortgage loans. As a result, gains on sales of loans will continue to decline in the fourth quarter of 2004, and there will be no gains on sales of loans in 2005.

Mortgage banking revenue decreased $7.2 million and was $4.1 million in the third quarter of 2004, compared with $11.3 million for the same 2003 period. The decrease in mortgage banking revenue was primarily due to an $8.1 million decrease in gains on sales of loans as a result of the significant decrease in mortgage refinance activity as well as the above-mentioned restructuring of TCF’s mortgage banking operations. For the first nine months of 2004, mortgage banking revenues were $12.4 million, up from $6.1 million for the same period of 2003 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 September 30,					Change					Nine Months Ended September 30,						Change
(Dollars in thousands)	2004			2003		$			%		2004			2003			$			%
Servicing income	$	4,215		$	4,946	$	(731	)	(14.8	)%	$	13,179		$	15,742		$	(2,563	)	(16.3	)%
Less mortgage servicing:
Amortization	2,807			4,147		(1,340		)	(32.3	)	9,725			20,293			(10,568		)	(52.1	)
Impairment (recovery)	(1,000		)	—		(1,000		)	N.M.		(1,000		)	23,500			(24,500		)	N.M.
Subtotal	1,807			4,147		(2,340		)	(56.4	)	8,725			43,793			(35,068		)	(80.1	)
Net servicing income (loss)	2,408			799		1,609			N.M.		4,454			(28,051		)	32,505			N.M.
Gains on sales of loans	1,442			9,524		(8,082		)	(84.9	)	6,746			31,113			(24,367		)	(78.3	)
Other income	281			981		(700		)	(71.4	)	1,176			3,084			(1,908		)	(61.9	)
Total mortgage banking revenue	$	4,131		$	11,304	$	(7,173	)	(63.5	)	$	12,376		$	6,146		$	6,230		101.4

N.M. Not meaningful

The following table sets forth further information about mortgage banking:

	At September 30,				At December 31,			Change
(Dollars in thousands)	2004				2003			$			%
Third party servicing portfolio	$		4,694,843		$	5,122,741		$	(427,898	)	(8.4	)%
Weighted average note rate	5.81			%	5.97		%	(16		) bps	N.A.

Mortgage applications in process	$		168,254		$	241,126		$	(72,872	)	(30.2	)

Capitalized mortgage servicing rights, net	$	51,474			$	52,036		$	(562	)	(1.1	)

Mortgage servicing rights as a percentage of servicing portfolio	1.10			%	1.02		%	8		bps	N.A.

Average service fee (basis points)	31.2			bps	31.7		bps	(.5		) 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. At September 30, 2004, 67.8% of TCF’s third party servicing portfolio consisted of loans with interest rates of 6% or lower. 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 September 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 September 30, 2004 and December 31, 2003:

	September 30, 2004
(Dollars in thousands)			Prepayment Speed Assumption						Weighted
							Weighted		Average Life
Interest Rate Tranche	Unpaid Balance		High		Low		Average		(in Years)
0 to 5.50%	$	1,738,992	13.5	%	12.2	%	12.2	%	7.3
5.51 to 6.00%	1,446,214		17.7		15.9		16.0		5.9
6.01 to 6.50%	737,174		26.6		23.9		24.2		3.8
6.51 to 7.00%	500,288		30.7		27.6		27.8		3.1
7.01% and higher	272,175		32.5		29.3		29.5		2.8
	$	4,694,843	18.2		16.4		16.6		5.6

	December 31, 2003
(Dollars in thousands)			Prepayment Speed Assumption						Weighted
							Weighted		Average Life
Interest Rate Tranche	Unpaid 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 September 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:

	At			At
	September 30,			December 31,
(Dollars in millions)	2004			2003
Fair value of mortgage servicing rights	$	57.8		$	58.0
Weighted-average life (in years)	5.6			5.1
Weighted-average prepayment speed assumption (annual rate)	16.6		%	19.0		%
Weighted-average discount rate	7.5		%	7.5		%
Impact on fair value of 10% adverse change in prepayment speed assumptions	$	(3.3	)	$	(3.2	)
Impact on fair value of 25% adverse change in prepayment speed assumptions	$	(7.4	)	$	(7.4	)
Impact on fair value of 10% adverse change in discount rate	$	(1.6	)	$	(1.3	)
Impact on fair value of 25% adverse change in discount rate	$	(3.6	)	$	(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 third quarter of 2004, gains on sales of securities available for sale of $3.7 million were recognized on sales of $216.3 million in mortgage-backed securities. There were no sales of mortgage-backed securities in the third quarter of 2003. Gains on sales of securities available for sale of $16.4 million were recognized on sales of $1.1 billion in mortgage-backed securities in the first nine 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 nine months of 2003. During the third quarter and the first nine months of 2003, TCF prepaid $804 million and $954 million respectively, of higher cost FHLB advances and recorded losses on termination of debt of $37.8 million and $44.3 million in the third quarter and first nine months of 2003, respectively. There were no debt terminations in 2004.

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

Consolidated Non-Interest Expense

Non-interest expense totaled $147.9 million for the third quarter of 2004, up 3.9%, from $142.4 million for the same 2003 period. For the first nine months of 2004, non-interest expense totaled $432.5 million, up 3.5% from $417.9 million for the same 2003 period. Compensation and employee benefits expense totaled $78 million and $236.5 million for the third quarter and first nine months of 2004, respectively, up from $75.6 million and $226.1 million for the comparable periods in 2003. The increase from the third quarter of 2003 was driven by a $1.8 million increase related to new branches opened in the past 12 months and $396 thousand related to the acquisition of VGM. Contributing to the increase for the first nine months of 2004 was a $4.7 million increase in retail banking operations driven by TCF’s continued new branch expansion. Occupancy and equipment expense totaled $23.7 million and $70.6 million for the third quarter and first nine months of 2004, respectively, up $1.4 million and $5.1 million from the same 2003 periods, primarily the result of costs associated with new branch expansion. Advertising and promotions totaled $7.4 million and $19.8 million for the third quarter and first nine months of 2004, respectively, compared with $6.5 million and $19.3 million for the same 2003 periods. Other non-interest expense totaled $38.9 million and $105.7 million for the third quarter and first nine months of 2004, respectively, reflecting an increase of 2.6% from $37.9 million and a decrease of 1.2% from $107 million for the same periods in 2003. The increase in other non-interest expense for the third quarter of 2004 is primarily related to a $1.9 million increase in deposit account losses, which can be attributed to the growth in the number of checking accounts and related transaction activity. Partially offsetting this increase in deposit account losses was a reduction in mortgage banking expenses of $1 million as a result of a decline in mortgage operations. For the first nine months of 2004, the decrease in non-interest expense was primarily due to a decline in other expenses in the mortgage banking operations of $2 million due to the decline in refinance activity, a $1.8 million decline in real estate owned expenses driven by $2.4 million of net gains on sales and redemptions of properties, and a $1.2 million decline in operating lease expenses in the leasing and equipment operations resulting from fewer operating leases. Partially offset these declines was an increase in deposit account losses which totaled $17 million for the first nine months of 2004, up $3.6 million from $13.4 million for the same 2003 period.

Income Taxes

TCF recorded income tax expense of $31.7 million and $96.4 million for the third quarter and first nine months of 2004, respectively, or 33.9% of income before income tax expense, compared with $19.2 million and $83.7 million, or 34.8% and 34.9% of income before income tax expense, respectively, 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 and related companies must meet specific provisions of the Internal Revenue Code (“IRC”) and state tax laws. 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. 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 $92.2 million at September 30, 2004, up $17 million from December 31, 2003. The increase was primarily the result of a $19.4 million increase in FHLB stock. TCF is required to invest in FHLB stock in proportion to its level of borrowings from the FHLB.

Securities Available for Sale

The Company purchased $1.2 billion and $820.5 million of mortgage-backed securities during the first nine months of 2004 and 2003, respectively, to replace the prepayments of residential real estate loans and mortgage-backed securities. TCF sold $1.1 billion and $816.5 million of mortgage-backed securities during the first nine months of 2004 and 2003, respectively. At September 30, 2004, the unrealized gain on TCF’s mortgage-backed securities available for sale portfolio was $2.3 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			At
	September 30,			December 31,			Change
(Dollars in thousands)	2004			2003			$			%
Consumer:
Home equity	$	4,184,529		$	3,588,027		$	596,502		16.6	%
Other secured	23,292			27,265			(3,973		)	(14.6	)
Unsecured	14,204			15,049			(845		)	(5.6	)
Total consumer	4,222,025			3,630,341			591,684			16.3
Commercial:
Commercial real estate:
Permanent	1,860,622			1,745,435			115,187			6.6
Construction and development	170,409			171,266			(857		)	(0.5	)
Total commercial real estate	2,031,031			1,916,701			114,330			6.0
Commercial business	444,632			427,696			16,936			4.0
Total commercial	2,475,663			2,344,397			131,266			5.6

Leasing and equipment finance:
Equipment finance loans	313,935			309,740			4,195			1.4
Lease financings:
Direct financing leases	1,035,181			853,395			181,786			21.3
Sales-type leases	27,480			33,073			(5,593		)	(16.9	)
Lease residuals, excluding leveraged leases	35,320			34,171			1,149			3.4
Unearned income and deferred lease costs	(102,586		)	(92,710		)	(9,876		)	10.7
Investment in leveraged leases	18,786			22,728			(3,942		)	(17.3	)
Total lease financings	1,014,181			850,657			163,524			19.2
Total leasing and equipment finance	1,328,116			1,160,397			167,719			14.5
Total consumer, commercial and leasing and equipment finance	8,025,804			7,135,135			890,669			12.5
Residential real estate	1,047,079			1,212,643			(165,564		)	(13.7	)
Total loans and leases	$	9,072,883		$	8,347,778		$	725,105		8.7

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

(Dollars in thousands)	At September 30, 2004
					Leasing and
					Equipment		Residential
	Consumer		Commercial		Finance		Real Estate		Total
Minnesota	$	1,691,798	$	709,017	$	61,562	$	536,017	$	2,998,394
Michigan	739,920		732,584		87,246		267,963		1,827,713
Illinois	1,099,339		413,004		48,251		177,326		1,737,920
Wisconsin	414,774		354,452		33,616		29,135		831,977
Colorado	217,781		18,450		31,514		6,331		274,076
California	711		21,475		166,364		—		188,550
Florida	10,121		23,282		85,588		747		119,738
Texas	529		1,347		85,350		1,234		88,460
Ohio	5,253		23,215		48,136		6,465		83,069
Other	41,799		178,837		680,489		21,861		922,986
Total	$	4,222,025	$	2,475,663	$	1,328,116	$	1,047,079	$	9,072,883

At September 30, 2004, 57% 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 September 30, 2004:

(Dollars in millions)	At September 30, 2004
	Consumer				Commercial (1)				Total
			% of				% of				% of
	Amount		Total		Amount		Total		Amount		Total
Variable-rate loans	$	2,660	63	%	$	1,156	47	%	$	3,816	57	%
Fixed-rate loans	1,562		37		403		16		1,965		29
Adjustable-rate loans (2)	—		—		917		37		917		14

Total consumer and commercial loans	$	4,222	100	%	$	2,476	100	%	$	6,698	100	%

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

(2) 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 67% of the home equity loan portfolio at September 30, 2004 consisted of closed-end loans, compared with 70% at December 31, 2003. In addition, 63% of this portfolio at September 30, 2004 carries a variable interest rate tied to the prime rate, compared with 60% at December 31, 2003. At September 30, 2004, the weighted average loan-to-value ratio for the home equity portfolio was 73%, compared with 74% at 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 September 30, 2004						At December 31, 2003
					Over 30-Day						Over 30-Day
					Delinquency as						Delinquency as
Loan-to-Value Ratios (1):			Percent		a Percentage				Percent		a Percentage
Loan-to-Value Ratios (1):	Balance		of Total		of Balance		Balance		of Total		of Balance
Over 100% (2)	$	35,515	.8	%	2.12	%	$	39,452	1.1	%	4.81	%
Over 90% to 100%	423,979		10.1		.60		361,374		10.1		.78
Over 80% to 90%	1,656,912		39.6		.28		1,370,523		38.2		.40
80% or less	2,068,123		49.5		.34		1,816,678		50.6		.39
Total	$	4,184,529	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 tables summarize TCF’s commercial real estate loan portfolio by property type:

	At September 30, 2004						At December 31, 2003
			Construction						Construction
			and						and
(Dollars in thousands)	Permanent		Development		Total		Permanent		Development		Total
Apartments	$	483,489	$	7,546	$	491,035	$	519,622	$	28,983	$	548,605
Office buildings	415,087		34,271		449,358		399,112		33,262		432,374
Retail services	341,842		26,235		368,077		304,295		10,139		314,434
Warehouse/industrial buildings	243,265		1,829		245,094		189,635		1,253		190,888
Hotel and motels	129,708		19,100		148,808		131,367		19,270		150,637
Health care facilities	46,254		7,264		53,518		32,157		17,664		49,821
Other	200,977		74,164		275,141		169,247		60,695		229,942
Total	$	1,860,622	$	170,409	$	2,031,031	$	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 September 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 September 30, 2004, approximately 91% of TCF’s commercial real estate loans outstanding were secured by properties located in its primary markets. At September 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 September 30, 2004						At December 31, 2003
					Over 30-Day						Over 30-Day
					Delinquency as						Delinquency as
			Percent		a Percentage				Percent		a Percentage
Marketing Segment	Balance		of Total		of Balance		Balance		of Total		of Balance
Middle market (1)	$	701,190	52.8	%	.49	%	$	595,812	51.3	%	.88	%
Small ticket (2)	242,712		18.3		.87		124,178		10.7		.56
Winthrop (3)	207,108		15.6		.03		229,441		19.8		1.14
Wholesale (4)	127,977		9.6		.07		137,062		11.8		.29
Leveraged leases	18,786		1.4		—		22,728		2.0		—
Subtotal	1,297,773		97.7		.44		1,109,221		95.6		.81
Truck and trailer (5)	30,343		2.3		5.04		51,176		4.4		3.66
Total	$	1,328,116	100.0	%	.54		$	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 September 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 September 30, 2004				At December 31, 2003
			Percent				Percent
Equipment Type	Balance		of Total		Balance		of Total
Manufacturing	$	237,954	17.9	%	$	198,321	17.1	%
Technology and data processing	231,245		17.5		249,515		21.5
Specialty vehicles	224,770		16.9		225,073		19.4
Construction	168,686		12.7		133,104		11.5
Medical	147,744		11.1		33,462		2.9
Trucks and trailers	76,027		5.7		89,262		7.7
Furniture and fixtures	55,916		4.2		54,052		4.7
Printing	42,027		3.2		38,977		3.3
Material handling	30,979		2.3		27,111		2.3
Aircraft	22,649		1.7		23,965		2.1
Other	90,119		6.8		87,555		7.5
Total	$	1,328,116	100.0	%	$	1,160,397	100.0	%

The leasing and equipment finance portfolio increased $167.7 million from December 31, 2003. TCF Leasing’s acquisition of VGM has added $99.6 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 September 30, 2004, lease residuals, excluding leveraged lease residuals, totaled $35.3 million, up from $34.2 million at December 31, 2003. Included in the investment in leveraged leases, at September 30, 2004 is a 100% equity interest in a Boeing 767-300 aircraft leased to Delta Airlines, Inc. (“Delta”). 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. However, these noteholders have a security interest in the aircraft which is superior to TCF’s equity interest. Such notes, which totaled $19.2 million at September 30, 2004, down from $22.6 million at December 31, 2003, are 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 $1.6 million which was recorded in other non-interest expense. The remaining reduction will be amortized through reduced yield on the investment over the remaining years of the lease as prescribed by SFAS No. 13. Also during the second quarter, TCF downgraded its credit rating on the aircraft leveraged lease and classified its investment as substandard. Delta indicated in its Quarterly Report on Form 10-Q for the quarter ending June 30, 2004, that if it is unable to make substantial progress in the near term toward achieving a competitive cost structure that will permit it to regain sustained profitability and access to capital markets on acceptable terms, it will need to seek to restructure its costs under Chapter 11 of the Bankruptcy Code. In September 2004, as part of a possible consensual out-of-court restructuring, Delta requested that certain lessors, including TCF, agree to a restructuring of its airplane leases, which would result in a reduction in TCF’s investment. As a result of these events, TCF placed the investment on a non-accrual status during the third quarter of 2004. Although Delta is current on its payments to TCF, if Delta declares bankruptcy, it would likely result in the write-off of TCF’s $18.8 million investment in the leveraged lease and the current payment of previously deferred income tax obligations. 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:

	At			At
	September 30,			December 31,
(In thousands)	2004			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 income taxes	(9,274		)	(11,813		)
Net investment in leveraged leases	$	9,512		$	10,915

Total loan and lease originations for TCF’s leasing businesses were $498.9 million for the first nine months of 2004, compared with $387.6 million for the same 2003 period. The backlog of approved transactions increased to $206.6 million at September 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 $79 million appropriate to cover losses inherent in the loan and lease portfolios as of September 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 September 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							At or For the Nine
	Months Ended September 30,							Months Ended September 30,
(Dollars in thousands)	2004				2003			2004			2003
Balance at beginning of period	$	80,025			$	77,696		$	76,619		$		77,008
Charge-offs	(4,662			)	(2,507		)	(10,179		)	(9,257			)
Recoveries	969				819			3,871			2,420
Net charge-offs	(3,693			)	(1,688		)	(6,308		)	(6,837			)
Provision charged to operations	2,644				2,658			6,874			8,495
Aquired allowance	—				—			1,791			—
Balance at end of period	$		78,976		$	78,666		$	78,976		$	78,666
Key Indicators:
Annualized net charge-offs as a percentage of average loans and leases	.17			%	.08		%	.10		%	.11			%

Period end allowance as a multiple of annualized net charge-offs	5.3			X	11.7		X	9.4		X	8.6			X

Income before income taxes and provision for loan losses as a multiple of net charge-offs	26.0			X	34.3		X	46.1		X	36.4			X

N.A. Not applicable

The allocation of TCF’s allowance for loan and lease losses is as follows:

	At or For the Nine Months						At or For the Year
	Ended September 30, 2004						Ended December 31, 2003
	Allowance for				Allowance		Allowance for				Allowance
	Loan and		Total Loans		as a % of		Loan and		Total Loans		as a % of
(Dollars in thousands)	Lease Losses		and Leases		Balance		Lease Losses		and Leases		Balance
Consumer	$	9,348	$	4,222,025	.22	%	$	9,084	$	3,630,341	.25	%
Commercial real estate	24,961		2,031,031		1.23		25,142		1,916,701		1.31
Commercial business	10,923		444,632		2.46		11,797		427,696		2.76
Leasing and equipment finance	16,841		1,328,116		1.27		13,515		1,160,397		1.16
Unallocated	16,139		—		N.A.		16,139		—		N.A.
Subtotal	78,212		8,025,804		.97		75,677		7,135,135		1.06
Residential real estate	764		1,047,079		.07		942		1,212,643		.08
Total	$	78,976	$	9,072,883	.87		$	76,619	$	8,347,778	.92

N.A. Not applicable

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

	Three Months Ended									Nine Months Ended
	September 30, 2004				September 30, 2003					September 30, 2004					September 30, 2003
	Net		% of Average		Net			% of Average		Net			% of Average		Net		% of Average
	Charge-offs		Loans and		Charge-offs			Loans and		Charge-offs			Loans and		Charge-offs		Loans and
(Dollars in thousands)	(Recoveries)		Leases (1)		(Recoveries)			Leases (1)		(Recoveries)			Leases (1)		(Recoveries)		Leases (1)
Consumer	$	1,133	.11	%	$	685		.08	%	$	2,426		.08	%	$	2,187	.09	%
Commercial real estate	526		.10		60			.01		478			.03		42		—
Commercial business	30		.03		38			.03		87			.03		735		.22
Leasing and equipment finance:
Middle market	1,107		.64		336			.26		1,831			.40		1,588		.48
Winthrop	407		.76		(9		)	(.01	)	391			.23		64		.03
Wholesale	231		.72		27			.07		(1,011		)	(1.04	)	340		.28
Small ticket	196		.33		468			1.63		1,949			1.07		1,167		1.43
Leveraged leases	—		—		—			—		—			—		—		—
Subtotal	1,941		.60		822			.31		3,160			.34		3,159		.43
Truck and trailer	58		.71		12			.07		111			.36		670		1.06
Total leasing and equipment finance	1,999		.61		834			.30		3,271			.34		3,829		.47
Subtotal	3,688		.19		1,617			.10		6,262			.11		6,793		.14
Residential real estate	5		—		71			.02		46			.01		44		—
Total	$	3,693	.17		$	1,688		.08		$	6,308		.10		$	6,837	.11

(1) Annualized.

Non-Performing Assets

Non-performing assets consist of non-accrual loans and leases and other real estate owned. Approximately 55% of non-performing assets at September 30, 2004 consisted of, or were secured by, real estate. Non-performing assets are summarized in the following table:

	At			At
	September 30,			December 31,
(Dollars in thousands)	2004			2003			$ Change
Non-accrual loans and leases:
Consumer	$	11,959		$	12,052		$	(93	)
Commercial real estate	1,026			2,490			(1,464		)
Commercial business	2,861			2,931			(70		)
Leasing and equipment finance, net	27,844			13,241			14,603
Residential real estate	2,763			3,993			(1,230		)
Total non-accrual loans and leases, net	46,453			34,707			11,746
Non-recourse discounted lease rentals	270			699			(429		)
Total non-accrual loans and leases, gross	46,723			35,406			11,317
Other real estate owned:
Residential	12,028			20,462			(8,434		)
Commercial	10,717			12,992			(2,275		)
Total other real estate owned	22,745			33,454			(10,709		)
Total non-performing assets, gross	$	69,468		$	68,860		$	608
Total non-performing assets, net	$	69,198		$	68,161		$	1,037

Gross non-performing assets as a percentage of:
net loans and leases	.77		%	.83		%
total assets	.58		%	.61		%

Leasing and equipment finance non-accrual leases at September 30, 2004, included the previously discussed $18.8 million investment in an aircraft leveraged lease to Delta which was placed on non-accrual during the third quarter of 2004. Included in non-performing assets are loans that are considered impaired. Impaired loans totaled $7.3 million at September 30, 2004, compared with $9.1 million at December 31, 2003. The related allowance for credit losses was $3.6 million at September 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 September 30, 2004 or December 31, 2003 which did not have a related allowance for loan losses. Average impaired loans during the three months ended September 30, 2004 was $10.2 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 September 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	$	21,903	.24	%	$	24,187	.29	%
60-89 days	8,306		.09		8,953		.11
90 days or more	5,127		.06		5,604		.07
Total	$	35,336	.39	%	$	38,744	.47	%

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

	At September 30, 2004				At December 31, 2003
(Dollars in thousands)	Principal Balances		Percentage of Portfolio		Principal Balances		Percentage of Portfolio
Consumer	$	15,256	.36	%	$	17,673	.49	%
Commercial real estate	1,958		.10		58		—
Commercial business	1,282		.29		282		.07
Leasing and equipment finance	7,064		.54		10,619		.93
Residential real estate	9,776		.94		10,112		.84
Total	$	35,336	.39		$	38,744	.47

Potential Problem Loans and Leases

In addition to the non-performing assets, there were $70.7 million of loans and leases at September 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 September 30, 2004		At December 31, 2003		Change
(Dollars in thousands)	At September 30, 2004		At December 31, 2003		$		%

Commercial real estate	$	31,397	$	20,279	$	11,118	54.8	%
Commercial business	21,607		12,721		8,886		69.9
Leasing and equipment finance	17,669		15,094		2,575		17.1
Total	$	70,673	$	48,094	$	22,579	46.9

Leasing and equipment finance potential problem loans and leases include $513 thousand and $1.1 million funded on a non-recourse basis at September 30, 2004 and December 31, 2003, respectively.

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 September 30, 2004, up $183.1 million from December 31, 2003. Lower interest-cost checking, savings and money market deposits totaled $6.3 billion, up $324 million from December 31, 2003, and comprised 81.1% of total deposits at September 30, 2004, compared with 78.8% of total deposits at December 31, 2003. Certificates of deposit decreased $141 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 .57% at September 30, 2004, down slightly 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 third quarter of 2004, TCF opened nine new branches, including five traditional branches and four supermarket branches. TCF now has 246 new branches opened since January 1, 1998. TCF plans to open 14 more new branches during the remainder of 2004, consisting of ten traditional branches and four supermarket branches. In 2005, TCF plans to open 31 new branches, consisting of 24 traditional branches and seven 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 September 30,						Increase (Decrease)			% Change
(Dollars in thousands)	2004			2003			Increase (Decrease)			% Change
Number of new branches*
Traditional	53			34			19			55.9	%
Supermarket	193			184			9			4.9
Total	246			218			28			12.8
Percentage of total branches	59		%	55		%

Number of checking accounts	562,496			473,974			88,522			18.7
Deposits:
Checking	$	801,571		$	589,035		212,536			36.1
Savings	415,643			395,134			20,509			5.2
Money market	58,432			69,783			(11,351		)	(16.3	)
Subtotal	1,275,646			1,053,952			221,694			21.0
Certificates of deposits	140,203			127,478			12,725			10.0
Total deposits	$	1,415,849		$	1,181,430		$	234,419		19.8

Total fees and other revenue (year-to-date)	$	114,458		$	93,357		21,101			22.6

* New branches opened since January 1, 1998.

Borrowings

Borrowings totaled $2.9 billion at September 30, 2004, up $488.3 million from December 31, 2003. Included in long-term borrowings at September 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 increased to 3.28% at September 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%. During the second quarter of 2004, TCF National Bank, a subsidiary of TCF Financial Corporation, issued $75 million of subordinated notes due in 2014. 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 September 30, 2004, TCF had no amounts outstanding on this bank line of credit. 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 September 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	$	2,903,107	$	1,930,976	$	465,754	$	132,207	$	374,170
Annual rental commitments under non-cancelable operating leases	153,134		22,566		39,222		32,107		59,239
Purchase obligations (construction contracts and land purchase commitments for future branch sites)	17,621		17,621		—		—		—
	$	3,073,862	$	1,971,163	$	504,976	$	164,314	$	433,409

	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	$	1,538,306	$	9,938	$	13,498	$	29,849	$	1,485,021
Commercial	714,376		526,267		158,223		21,667		8,219
Leasing and equipment finance	71,365		71,365		—		—		—
Other	48,873		48,873		—		—		—
Total commitments to lend	2,372,920		656,443		171,721		51,516		1,493,240
Loans serviced with recourse	104,031		2,275		5,093		5,070		91,593
Standby letters of credit and guarantees on industrial revenue bonds	42,631		26,271		15,750		160		450
	$	2,519,582	$	684,989	$	192,564	$	56,746	$	1,585,283

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 $100.8 million of Veterans Administration (“VA”) loans and $3.2 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 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 September 30, 2004 was $965.3 million, or 8% of total assets compared with $920.9 million, or 8.1% of total assets at December 31, 2003. During the third quarter of 2004, TCF completed a two-for-one stock split of its common stock in the form of a 100% stock dividend. All prior period common share and per share disclosures have been restated to reflect the split. TCF repurchased 2.4 million shares of its common stock during the first nine months of 2004 at an average cost of $28.12 per share. At September 30, 2004, TCF had 5 million shares remaining in its stock repurchase program authorized by its Board of Directors. Since January 1, 1998, the Company has repurchased 52.7 million shares of its common stock at an average cost of $17.19 per share. For the first nine months of 2004, average total equity to average assets was 7.99% compared with 8.03% for the year ended December 31, 2003. On October 18, 2004, TCF declared a regular quarterly dividend of 18.75 cents per common share, payable on November 30, 2004, to shareholders of record as of November 5, 2004.

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 $1.1 billion, or 9% of total assets at September 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 September 30, 2004				At December 31, 2003
(Dollars in millions)	$		% of Total Assets		$		% of Total Assets

Assumed Interest Rates
Increase 50 basis points *	$	978	8.2	%	$	811	7.2	%
Flat rate as of measurement date	1,135		9.5		161		1.4
Decrease 50 basis points *	966		8.1		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 continue to 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 $2.4 billion of mortgage-backed securities and residential real estate loans at September 30, 2004 by approximately $245 million, or 47% 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 as funding costs of these long-term fixed-rate assets would increase.

Recent Accounting Developments

None.

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 change, or changes in enforcement practices or court rulings, may have a dramatic and potentially adverse impact on TCF and its bank and other subsidiaries.

The Federal Deposit Insurance Corporation (“FDIC”) and members of the United States Congress have 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. In August 2004, the SEC proposed postponing the final phase-in period for acceleration of the due dates of quarterly reports on Form 10-Q and annual reports on Form 10-K. The SEC has not yet taken action on this proposal.

Forward-Looking Information

This earnings release 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 or a bankruptcy filing by Delta Airlines, the lessee under a leveraged lease in which TCF holds an equity interest; 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 September 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 third 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 Sept. 30, 2004		At June 30, 2004		At March 31, 2004		At Dec. 31, 2003		At Sept. 30, 2003

SELECTED FINANCIAL CONDITION DATA:

Securities available for sale	$	1,330,708	$	1,588,372	$	1,269,293	$	1,533,288	$	1,604,282
Residential real estate loans	1,047,079		1,091,678		1,152,357		1,212,643		1,283,640
Subtotal	2,377,787		2,680,050		2,421,650		2,745,931		2,887,922
Loans and leases excluding residential real estate loans	8,025,804		7,776,921		7,470,428		7,135,135		6,863,683
Total assets	11,997,949		11,942,863		11,724,319		11,319,015		11,253,906
Deposits	7,794,823		7,761,657		7,869,128		7,611,749		7,712,603
Borrowings	2,903,107		2,935,446		2,507,087		2,414,825		2,243,725
Stockholders’ equity	965,266		939,152		965,950		920,858		931,968

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

SELECTED OPERATIONS DATA:
Interest income	$	157,413		$	152,789		$	149,219		$	148,919		$	156,482
Interest expense	32,923			30,370			30,726			29,827			36,605
Net interest income	124,490			122,419			118,493			119,092			119,877
Provision for credit losses	2,644			3,070			1,160			4,037			2,658
Net interest income after provision for credit losses	121,846			119,349			117,333			115,055			117,219
Non-interest income:
Fees and other revenues	115,803			122,587			102,459			114,865			118,089
Gains on sales of securities available for sale	3,679			—			12,717			—			—
Gains (losses) on termination of debt	—			—			—			—			(37,769		)
Gain on sale of loan servicing	—			706			—			—			—
Total non-interest income	119,482			123,293			115,176			114,865			80,320
Non-interest expense	147,926			143,906			140,706			142,244			142,382
Income before income tax expense	93,402			98,736			91,803			87,676			55,157
Income tax expense	31,690			33,518			31,142			28,180			19,193
Net income	$	61,712		$	65,218		$	60,661		$	59,496		$	35,964

Per common share:
Basic earnings	$	.45		$	.47		$	.44		$	.43		$	.26
Diluted earnings	$	.45		$	.47		$	.44		$	.43		$	.26
Dividends declared	$	.1875		$	.1875		$	.1875		$	.1625		$	.1625

FINANCIAL RATIOS:
Return on average assets (1)	2.06		%	2.20		%	2.11		%	2.13		%	1.24		%
Return on average common equity (1)	25.96			27.68			25.90			26.18			15.77
Net interest margin (1)	4.56			4.53			4.52			4.68			4.57
Net charge-offs as a percentage of average loans and leases (1)	.17			.10			.02			.30			.08
Average total equity to average assets	7.94			7.95			8.13			8.13			7.89

(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

	Nine Months Ended September 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	$	131,290	$	2,441	2.48	%	$	110,237	$	3,726	4.52	%
Securities available for sale (3)	1,537,310		61,159		5.30		2,021,036		83,826		5.53
Loans held for sale	357,354		9,112		3.41		532,101		16,919		4.25
Loans and leases:
Consumer	3,903,990		177,209		6.06		3,206,777		159,314		6.64
Commercial real estate	1,980,380		80,972		5.46		1,847,455		82,577		5.98
Commercial business	432,174		13,472		4.16		452,820		14,582		4.31
Leasing and equipment finance	1,267,102		66,333		6.98		1,074,912		61,594		7.64
Subtotal	7,583,646		337,986		5.95		6,581,964		318,067		6.46
Residential real estate	1,130,840		48,723		5.75		1,502,642		70,062		6.22
Total loans and leases (4)	8,714,486		386,709		5.92		8,084,606		388,129		6.41
Total interest-earning assets	10,740,440		459,421		5.71		10,747,980		492,600		6.12
Other assets (5)	1,046,080						1,070,006
Total assets	$	11,786,520					$	11,817,986

Liabilities and Stockholders’ Equity:
Non-interest bearing deposits	$	2,345,709					$	2,243,970
Interest-bearing deposits:
Checking	1,301,520		2,120		.22		1,048,907		735		.09
Savings	1,824,950		5,152		.38		1,858,409		7,516		.54
Money market	790,128		2,199		.37		894,305		3,624		.54
Subtotal	3,916,598		9,471		.32		3,801,621		11,875		.42
Certificates of deposit	1,502,064		20,860		1.86		1,789,377		33,930		2.54
Total interest-bearing deposits	5,418,662		30,331		.75		5,590,998		45,805		1.10
Total deposits	7,764,371		30,331		.52		7,834,968		45,805		.78
Borrowings:
Short-term borrowings	743,754		7,522		1.35		695,008		6,520		1.25
Long-term borrowings	1,963,440		56,166		3.88		1,920,269		78,222		5.49
Total borrowings	2,707,194		63,688		3.18		2,615,277		84,742		4.36
Total interest-bearing liabilities	8,125,856		94,019		1.55		8,206,275		130,547		2.13
Total deposits and borrowings	10,471,565		94,019		1.21		10,450,245		130,547		1.69
Other liabilities (5)	373,089						421,862
Total liabilities	10,844,654						10,872,107
Stockholders’ equity (5)	941,866						945,879
Total liabilities and stockholders’ equity	$	11,786,520					$	11,817,986

Net interest income and margin			$	365,402	4.54	%			$	362,053	4.49	%

(1) Tax-exempt income was not significant and thus yields on interest-earning assets and net interest margin have not been presented on a tax equivalent basis. Tax-exempt income of $455,000 and $392,000 was recognized during the nine months ended September 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 September 30, 2004:

	Shares Repurchased			Share Repurchase Authorization (1)
(Dollars in thousands)	Number	Average Price Per Share		Number

Balance, June 30, 2004				5,930,820
July 2004	10,000	$	30.01	(10,000	)
August 2004	550,000	29.63		(550,000	)
September 2004	348,000	29.90		(348,000	)
Balance, September 30, 2004	908,000	$	29.74	5,022,820

(1) The current share repurchase authorization was approved by the Board of Directors on July 21, 2003. The authorization was for a repurchase of up to an additional 5% of TCF’s common stock outstanding at the time of the authorization, 7.1 million shares. This authorization does not have an expiration date.

Item 3. Defaults Upon Senior Securities.

None.

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

None.

Item 5. Other Information.

None.

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

(a) Exhibits.

See Index to Exhibits on page 55 of this report.

(b) Reports on Form 8-K.

A Current Report of Form 8-K, dated July 15, 2004, was submitted furnishing a press release dated July 15, 2004 announcing results of operations for the quarter ended June 30, 2004, under Item 12, filed under Item 7 of Form 8-K.

A Current Report on Form 8-K, dated July 26, 2004, was submitted furnishing certain investor presentation materials under Item 12, filed under Item 7 and 9 of Form 8-K.

A Current Report on Form 8-K, dated August 3, 2004, was submitted announcing the declaration by the board of directors of TCF Financial Corporation of a two–for–one stock split in the form of a 100 percent stock dividend under Item 5, filed under Item 7 of Form 8-K.

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

A Current Report on Form 8-K, dated September 8, 2004, was submitted announcing plans to merge the residential mortgage loan origination activities of its wholly–owned subsidiary TCF Mortgage Corporation (TCFMC) into TCF National Bank under Item 8.01, filed under Item 9.01 of Form 8-K.

A Current Report on Form 8-K, dated September 28, 2004, was submitted providing updated information related to an $18.8 million equity interest in a leveraged lease covering a Boeing 767-300 aircraft leased to Delta Airlines, Inc. , filed under Item 8.01 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: November 1, 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(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 effective July 20, 2004 to separate the Plan into the Supplemental Employee Retirement Plan for TCF Cash Balance Pension Plan (Exhibit 10(u)) and the Supplemental Employee Retirement Plan-ESPP Plan

10(n)*	Directors Stock Program [incorporated by reference to Program filed with registrants definitive proxy statement dated March 22, 1996, No. 001-10253]; amendment adopted June 20, 1998 [incorporated by reference to Exhibit 10(q) to TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1998, No. 001-01253]; amendment adopted July 19, 2004

10(u)*	Supplemental Employee Retirement Plan for TCF Cash Balance Pension Plan, as adopted effective July 20, 2004 (previously part of the Supplemental Employee Retirement Plan at Exhibit 10(j))

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