TCF Reports 65^th Consecutive Quarter of Net Income – Earns $29.8 Million

SECOND QUARTER HIGHLIGHTS

Diluted earnings per common share of 19 cents
Net income of $29.8 million
Net interest margin of 4.02 percent
Average deposits increased $227.7 million, or 1.9 percent, from the first quarter of 2011
Announced quarterly cash dividend of 5 cents per common share, payable August 31, 2011

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Table 4 - Credit Trends (Graphic: Business Wire)

Table 4 - Credit Trends (Graphic: Business Wire)
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July 21, 2011 08:00 AM Eastern Daylight Time

WAYZATA, Minn.--(BUSINESS WIRE)--TCF Financial Corporation (NYSE:TCB):

Earnings Summary																					Table 1
($ in thousands, except per-share data)										Percent Change
	2Q			1Q			2Q			2Q11 vs		2Q11 vs			YTD			YTD			Percent
	2011			2011			2010			1Q11		2Q10			2011			2010			Change
Net income	$	29,837		$	29,686		$	45,025		.5	%	(33.7	)	%	$	59,523		$	78,946		(24.6	)	%
Diluted earnings per common share		.19			.20			.32		(5.0	)	(40.6	)			.39			.58		(32.8	)

Financial Ratios ⁽¹⁾
Return on average assets		.67	%		.66	%		1.02	%							.67	%		.89	%
Return on average common equity		6.86			7.84			12.71								7.32			11.75
Net interest margin		4.02			4.06			4.19								4.04			4.20
Net charge-offs as a percentage of average loans and leases		1.19			1.51			1.30								1.35			1.26

(1) Annualized.

TCF Financial Corporation (“TCF”) (NYSE:TCB) today reported net income for the second quarter of 2011 of $29.8 million, compared with $45 million in the second quarter of 2010 and $29.7 million in the first quarter of 2011. Diluted earnings per common share was 19 cents for the second quarter of 2011, compared with 32 cents in the second quarter of 2010 and 20 cents in the first quarter of 2011.

Net income for the first six months of 2011 was $59.5 million, compared with $78.9 million for the same 2010 period. Diluted earnings per common share for the first six months of 2011 was 39 cents, compared with 58 cents for the same 2010 period.

TCF declared a quarterly cash dividend of five cents per common share payable on August 31, 2011 to stockholders of record at the close of business on July 29, 2011.

Chairman’s Statement

“TCF’s 65^th consecutive quarter of profitability saw many encouraging developments including favorable overall credit trends and strong new checking account production,” said William A. Cooper, TCF Chairman and Chief Executive Officer. “Much of the uncertainty surrounding the Durbin Amendment was also eliminated during the quarter following the Federal Reserve Board’s issuance of their final rule on debit card interchange and our decision to dismiss our lawsuit challenging the constitutionality of the Durbin Amendment. We feel our lawsuit served its purpose in reducing the final impact of the Durbin Amendment and are encouraged that the Federal Reserve Board’s final rule took into consideration many of the points we made in our case.

“Our focus remains on positioning TCF for future growth and success. This includes analyzing various opportunities to grow the balance sheet and working toward continuing our favorable overall credit quality trends. Certainly, we have continued to evaluate potential strategies to mitigate the lost debit card interchange revenue. We believe the industry will be making changes to products and fees in the fourth quarter and TCF expects to be implementing its new product and fee structures in the fourth quarter. I am confident that as the market continues to adjust to the new regulatory environment, we will find the appropriate solutions for the benefit of our shareholders and customers.”


Total Revenue										Table 2
										Percent Change
($ in thousands)	2Q 2011			1Q 2011			2Q 2010			2Q11 vs 1Q11		2Q11 vs 2Q10		YTD 2011			YTD 2010			Percent Change
Net interest income	$	176,150		$	174,040		$	176,499		1.2	%	(.2	)%	$	350,190		$	351,161		(.3	)%
Fees and other revenue:
Fees and service charges		56,396			53,513			77,845		5.4		(27.6	)		109,909			144,017		(23.7	)
Card revenue		28,219			26,584			28,591		6.2		(1.3	)		54,803			55,663		(1.5	)
ATM revenue		7,091			6,705			7,844		5.8		(9.6	)		13,796			14,866		(7.2	)
Total banking fees		91,706			86,802			114,280		5.6		(19.8	)		178,508			214,546		(16.8	)
Leasing and equipment finance		22,279			26,750			20,528		(16.7	)	8.5			49,029			40,880		19.9
Other		384			694			1,235		(44.7	)	(68.9	)		1,078			3,690		(70.8	)
Total fees and other revenue		114,369			114,246			136,043		.1		(15.9	)		228,615			259,116		(11.8	)
Subtotal		290,519			288,286			312,542		.8		(7.0	)		578,805			610,277		(5.2	)
Losses on securities		(227	)		-			(137	)	N.M.		(65.7	)		(227	)		(567	)	60.0
Total revenue	$	290,292		$	288,286		$	312,405		.7		(7.1	)	$	578,578		$	609,710		(5.1	)

Net interest margin⁽¹⁾		4.02	%		4.06	%		4.19	%						4.04	%		4.20	%
Fees and other revenue as a % of total revenue		39.40			39.63			43.55							39.51			42.50

N.M. = Not meaningful.
(1) Annualized.

Net Interest Income

Net interest income increased $2.1 million, or 1.2 percent, from the first quarter of 2011 and was relatively flat with the second quarter of 2010. The increase in net interest income from the first quarter of 2011 was primarily due to growth in the higher-yielding inventory finance portfolio, decreased rates paid on deposits and a decrease in interest expense on borrowings. These changes were partially offset by the impact of operating in a lower interest rate environment and growth in lower yielding variable-rate consumer real estate and commercial loans.
Net interest margin in the second quarter of 2011 was 4.02 percent, compared with 4.19 percent in the second quarter of 2010 and 4.06 percent in the first quarter of 2011. The decrease in net interest margin from both periods was primarily due to increased asset liquidity and growth in variable-rate loans and leases at lower yields as a result of the lower interest rate environment. These changes were partially offset by the lower average cost of deposits and borrowings.
As a result of higher regulatory liquidity expectations across the industry, TCF increased its asset liquidity during the second quarter of 2011. Interest-bearing deposits held at the Federal Reserve and unencumbered securities were $859 million at June 30, 2011, an increase of $616 million from the second quarter of 2010 and $23 million from the first quarter of 2011. The increased asset liquidity position, which includes maintaining $115 million of securities in anticipation of the future redemption of the trust preferred securities, negatively impacted net interest margin for the second quarter of 2011 by 8 basis points compared to the second quarter of 2010 and by 3 basis points from the first quarter of 2011.
TCF has been repositioning its balance sheet for an eventual increase in interest rates. While this has negatively impacted the net interest margin rate in the short term, TCF’s balance sheet is in an asset sensitive position, based on TCF’s one-year interest rate gap assumptions, of 6.1 percent of total assets as of June 30, 2011, up from an asset sensitive position of 5.4 percent of total assets as of March 31, 2011. Variable-rate interest-earning assets comprised 16.4 percent of total interest earning assets at June 30, 2011, up from 12.8 percent at June 30, 2010 and down slightly from 16.6 percent at March 31, 2011.

Non-interest Income

Banking fees and service charges in the second quarter of 2011 were $56.4 million, down $21.4 million, or 27.6 percent, from the second quarter of 2010 and up $2.9 million, or 5.4 percent, from the first quarter of 2011. The decrease in banking fees and services charges from the second quarter of 2010 was primarily due to decreased activity-based fee revenue as a result of a change in overdraft fee regulations in the third quarter of 2010, changes in customer banking and spending behavior and lower monthly maintenance fees as more customers qualified for fee waivers. The increase in banking fees and service charges from the first quarter of 2011 was primarily due to higher seasonal transaction activity.
Card revenues were $28.2 million in the second quarter of 2011, down $372 thousand, or 1.3 percent, from the second quarter of 2010 and up $1.6 million, or 6.2 percent, from the first quarter of 2011. The decrease in card revenue from the second quarter of 2010 was primarily due to a decrease in the average interchange rate. The increase in card revenue from the first quarter of 2011 was primarily due to seasonal transaction volume.
On June 29, 2011, the Federal Reserve issued its final debit card interchange rules, establishing a debit card interchange fee cap. These rules are effective October 1, 2011 and apply to issuers that, together with their affiliates, have assets of $10 billion or more. These regulations are estimated to reduce TCF’s card interchange revenue by approximately 50 percent ($50-$60 million annually).
Leasing and equipment finance revenues were $22.3 million in the second quarter of 2011, up $1.8 million, or 8.5 percent, from the second quarter of 2010 and down $4.5 million, or 16.7 percent, from the first quarter of 2011. The increase from the second quarter of 2010 was due to increased sales-type lease revenues. The decrease from the first quarter of 2011 was due to a higher level of customer initiated lease activity during the first quarter of 2011.

Loans and Leases


Average Loans and Leases							Table 3
							Percent Change
($ in thousands)	2Q 2011		1Q 2011		2Q 2010		2Q11 vs 1Q11		2Q11 vs 2Q10		YTD 2011		YTD 2010		Percent Change
Consumer real estate
First mortgage lien	$	4,838,896	$	4,863,679	$	4,930,801	(.5	) %	(1.9	) %	$	4,851,219	$	4,938,594	(1.8	) %
Junior lien		2,195,552		2,238,280		2,303,400	(1.9	)	(4.7	)		2,216,799		2,307,841	(3.9	)
Total		7,034,448		7,101,959		7,234,201	(1.0	)	(2.8	)		7,068,018		7,246,435	(2.5	)
Consumer other		19,463		21,757		27,584	(10.5	)	(29.4	)		20,603		28,988	(28.9	)
Total consumer		7,053,911		7,123,716		7,261,785	(1.0	)	(2.9	)		7,088,621		7,275,423	(2.6	)
Commercial		3,597,644		3,623,463		3,721,815	(.7	)	(3.3	)		3,610,481		3,712,079	(2.7	)
Leasing and equipment finance		3,068,550		3,119,669		3,021,532	(1.6	)	1.6			3,093,969		3,032,537	2.0
Inventory finance		978,505		872,785		692,816	12.1		41.2			925,913		623,283	48.6
Total	$	14,698,610	$	14,739,633	$	14,697,948	(.3	)	-		$	14,718,984	$	14,643,322	.5

Average consumer real estate loan balances decreased $199.8 million, or 2.8 percent, from the second quarter of 2010 and decreased $67.5 million, or 1 percent, from the first quarter of 2011. Decreases from both periods reflect a decline in production of new loans along with a more competitive environment for those borrowers who meet TCF’s underwriting criteria.
Variable-rate consumer real estate loans increased $298 million from June 30, 2010 and $11.9 million from March 31, 2011, while fixed-rate consumer real estate loans decreased $497.8 million from June 30, 2010 and $79.4 million from March 31, 2011. Variable-rate loans comprised 34.1 percent of total consumer real estate loans at June 30, 2011, up from 29.8 percent at June 30, 2010 and 33.6 percent at March 31, 2011.
Average commercial loan balances in the second quarter of 2011 decreased $124.2 million, or 3.3 percent, from the second quarter of 2010 and decreased $25.8 million, or .7 percent, from the first quarter of 2011. The decreases for both periods were primarily due to higher levels of repayments, partially offset by an increase in loan originations and renewals. Commercial loan originations and renewals of $307.7 million during the first six months of 2011 represent an increase of $25.9 million, or 9.2 percent, compared to the first six months of 2010.
Average leasing and equipment finance loan and lease balances in the second quarter of 2011 increased $47 million, or 1.6 percent, from the second quarter of 2010 and decreased $51.1 million, or 1.6 percent, from the first quarter of 2011. The increase from the second quarter of 2010 was primarily due to a portfolio acquisition completed in the third quarter of 2010. The decrease from the first quarter of 2011 was primarily due to runoff of acquired portfolios, partially offset by increased originations. Leasing and equipment finance originations of $654.9 million during the first six months of 2011 represent an increase of $74.9 million, or 12.9 percent, compared to the first six months of 2010.
Average inventory finance loans were $978.5 million in the second quarter of 2011, an increase of $285.7 million, or 41.2 percent, from the second quarter of 2010. Average inventory finance loans increased $105.7 million, or 12.1 percent, from the first quarter of 2011. The increase from the second quarter of 2010 was primarily due to TCF’s entrance into the power sports industry in the third quarter of 2010. The increase from the first quarter of 2011 was primarily due to seasonal growth in receivables from lawn and garden programs.

Credit Quality

(Table 4 - Credit Trends: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=6799775&lang=en)

Overall favorable trends in credit quality are continuing as the level of non-performing assets, net charge-offs and over 60-day delinquencies have remained below the peak levels in 2010.


Credit Quality Summary of Performing and Underperforming Loans and Leases																			Table 5
($ in thousands)	Performing Loans and Leases									60+ Days Delinquent and			Accruing			Non-accrual			Total Loans
June 30, 2011:	Non-classified			Classified⁽¹⁾			Total			Accruing⁽²⁾			TDRs			Loans and Leases			and Leases
Consumer real estate and other	$	6,492,656		$	-		$	6,492,656		$	68,546		$	343,610		$	150,938		$	7,055,750
Commercial		3,070,765			375,210			3,445,975			899			27,114			140,407			3,614,395
Leasing and equipment finance		2,987,135			33,625			3,020,760			5,436			-			29,682			3,055,878
Inventory finance		900,630			4,509			905,139			149			-			634			905,922
Total loans and leases	$	13,451,186		$	413,344		$	13,864,530		$	75,030		$	370,724		$	321,661		$	14,631,945
Percent of total loans and leases		92.0	%		2.8	%		94.8	%		.5	%		2.5	%		2.2	%		100.0	%

	Performing Loans and Leases									60+ Days Delinquent and			Accruing			Non-accrual			Total Loans
March 31, 2011:	Non-classified			Classified⁽¹⁾			Total			Accruing⁽²⁾			TDRs			Loans and Leases			and Leases
Consumer real estate and other	$	6,532,544		$	-		$	6,532,544		$	67,409		$	341,989		$	155,233		$	7,097,175
Commercial		3,053,296			407,978			3,461,274			1,864			17,473			127,745			3,608,356
Leasing and equipment finance		3,001,249			34,443			3,035,692			9,640			-			34,634			3,079,966
Inventory finance		1,005,837			3,496			1,009,333			274			-			1,437			1,011,044
Total loans and leases	$	13,592,926		$	445,917		$	14,038,843		$	79,187		$	359,462		$	319,049		$	14,796,541
Percent of total loans and leases		91.9	%		3.0	%		94.9	%		.5	%		2.4	%		2.2	%		100.0	%

(1) Excludes classified loans and leases that are 60+ days delinquent and accruing or accruing TDRs.
(2) Excludes accruing TDRs that are 60+ days delinquent.

At June 30, 2011:

The combined balance of performing classified loans and leases, over 60-day delinquent and accruing loans and leases, accruing TDRs and non-accrual loans and leases decreased $22.9 million, or 1.9 percent from the first quarter of 2011. This was primarily due to an increase in the amount of performing classified commercial loans migrating to non-classified status.
Over 60-day delinquency rate was .73 percent, down from .87 percent at June 30, 2010 and up from .69 percent at March 31, 2011. The decrease from the second quarter of 2010 was primarily due to decreases in consumer real estate and leasing and equipment finance delinquencies. The increase from the first quarter of 2011 was primarily due to a small number of new commercial delinquencies, partially offset by decreases in leasing and equipment finance delinquencies.
Total non-accrual loans and leases and other real estate owned (non-performing assets) were $458.2 million at June 30, 2011, an increase of $10 million, or 2.2 percent, from June 30, 2010 and a decrease of $3 million, or .7 percent, from March 31, 2011. Non-accrual loans and leases decreased $8.5 million, or 2.6 percent, from June 30, 2010 as a $19.1 million decrease in leasing and equipment finance loans and leases was partially offset by one $15.9 million commercial credit that was placed on non-accrual in the most recent quarter and had previously been reserved for. Excluding this one credit, the new inflows to non-accrual status fell for the third consecutive quarter.

Other real estate owned was $136.5 million at June 30, 2011, a decrease of $5.7 million from March 31, 2011, primarily due to sales of consumer real estate properties exceeding additions during the quarter.

Allowance for Loan and Lease Losses


Credit Quality Summary																											Table 6
													Percent Change
($ in thousands)	2Q				1Q				2Q				2Q11 vs			2Q11 vs			YTD				YTD				Percent
	2011				2011				2010				1Q11			2Q10			2011				2010				Change
Allowance for Loan and Lease Losses
Balance at beginning of period	$	255,308			$	265,819			$	250,430			(4.0	)	%	1.9		%	$	265,819			$	244,471			8.7		%
Charge-offs		(48,457	)			(61,104	)			(53,654	)		(20.7	)		(9.7	)			(109,561	)			(104,205	)		5.1
Recoveries		4,612				5,292				5,854			(12.8	)		(21.2	)			9,904				11,873			(16.6	)
Net charge-offs		(43,845	)			(55,812	)			(47,800	)		(21.4	)		(8.3	)			(99,657	)			(92,332	)		7.9
Provision for credit losses		44,005				45,274				49,013			(2.8	)		(10.2	)			89,279				99,504			(10.3	)
Other		4				27				-			(85.2	)		N.M.				31				-			N.M.
Balance at end of period	$	255,472			$	255,308			$	251,643			.1			1.5			$	255,472			$	251,643			1.5

Net charge-offs as a percentage of average loans and leases⁽¹⁾
Consumer real estate and other:
First mortgage lien		1.78		%		1.81		%		1.36		%	(3	)	bps	42		bps		1.80		%		1.34		%	46		bps
Junior lien		2.75				2.39				2.20			36			55				2.56				2.22			34
Total consumer real estate		2.09				1.99				1.63			10			46				2.04				1.62			42
Total consumer real estate and other		2.12				1.97				1.71			15			41				2.04				1.67			37
Commercial		.30				1.96				.98			(166	)		(68	)			1.13				.91			22
Leasing and equipment finance		.45				.36				.99			9			(54	)			.41				.93			(52	)
Inventory finance		.13				.10				.04			3			9				.12				.16			(4	)
Total		1.19				1.51				1.30			(32	)		(11	)			1.35				1.26			9

Allowance as a percentage of period end loans and leases		1.75		%		1.73		%		1.72		%
Ratio of allowance to net charge-offs⁽¹⁾		1.5		X		1.1		X		1.3		X

N.M. = Not meaningful.
(1) Annualized.

At June 30, 2011:

Allowance for loan and lease losses was $255.5 million, or 1.75 percent of loans and leases, compared with $251.6 million, or 1.72 percent, at June 30, 2010 and $255.3 million, or 1.73 percent, at March 31, 2011.

For the quarter ended June 30, 2011:

Provision for credit losses was $44 million, down from $49 million in the second quarter of 2010 and down from $45.3 million recorded in the first quarter of 2011. The decrease from the second quarter of 2010 was primarily due to decreased net charge-offs and reserves in the commercial and leasing and equipment finance portfolios as customer performance improved. The decrease from the first quarter of 2011 was primarily due to decreased commercial and leasing and equipment finance net charge-offs, partially offset by increased consumer real estate net charge-offs.
Net loan and lease charge-offs were $43.8 million, or 1.19 percent, annualized, of average loans and leases, down from $47.8 million, or 1.30 percent, annualized, in the second quarter of 2010 and down from $55.8 million, or 1.51 percent, annualized, in the first quarter of 2011. The decrease from the second quarter of 2010 was primarily due to decreases in commercial and leasing and equipment finance, partially offset by increases in consumer real estate, primarily in Illinois. The decrease from the first quarter of 2011 was due primarily to decreases in commercial net charge-offs.

Deposits


Average Deposits							Table 7
										Percent Change
($ in thousands)	2Q 2011			1Q 2011			2Q 2010			2Q11 vs 1Q11		2Q11 vs 2Q10		YTD 2011			YTD 2010			Percent Change

Checking	$	4,570,543		$	4,501,931		$	4,529,356		1.5	%	.9	%	$	4,536,427		$	4,468,434		1.5	%
Savings		5,628,249			5,444,381			5,494,723		3.4		2.4			5,536,823			5,429,359		2.0
Money market		648,862			673,503			660,654		(3.7	)	(1.8	)		661,114			664,595		(.5	)
Subtotal		10,847,654			10,619,815			10,684,733		2.1		1.5			10,734,364			10,562,388		1.6
Certificates		1,092,368			1,092,537			1,044,008		-		4.6			1,092,452			1,085,349		.7
Total deposits	$	11,940,022		$	11,712,352		$	11,728,741		1.9		1.8		$	11,826,816		$	11,647,737		1.5

Total new checking accounts		120,281			97,459			114,654		23.4	%	4.9	%		217,740			247,079		(11.9	)%
Average interest rate on deposits		.38	%		.42	%		.56	%						.40	%		.59	%

Total average deposits increased $211.3 million, or 1.8 percent, from the second quarter of 2010 primarily due to various targeted marketing campaigns as well as increases in checking account production and savings account balances. Average savings balances increased $133.5 million, or 2.4 percent, from the second quarter of 2010. Total new checking accounts increased 4.9 percent from the second quarter of 2010. Total average deposits increased $227.7 million, or 1.9 percent from the first quarter of 2011, primarily due to increases in the number of savings accounts.
The average interest cost of deposits in the second quarter of 2011 was .38 percent, down 18 basis points from the second quarter of 2010 and down 4 basis points from the first quarter of 2011. Declines in the average interest cost of deposits were primarily due to pricing strategies on certain deposit products, mix changes and lower market interest rates. The weighted average interest rate on deposits was .40 percent at June 30, 2011.

Non-interest Expense


Non-interest Expense							Table 8
							Percent Change
($ in thousands)	2Q 2011		1Q 2011		2Q 2010		2Q11 vs 1Q11		2Q11 vs 2Q10		YTD 2011		YTD 2010		Percent Change
Compensation and employee benefits	$	89,997	$	90,273	$	86,983	(.3	)%	3.5	%	$	180,270	$	175,208	2.9	%
Occupancy and equipment		30,783		32,159		31,311	(4.3	)	(1.7	)		62,942		63,492	(.9	)
FDIC insurance		7,542		7,195		5,219	4.8		44.5			14,737		10,700	37.7
Deposit account premiums		6,166		3,198		5,478	92.8		12.6			9,364		12,276	(23.7	)
Advertising and marketing		3,479		3,160		3,734	10.1		(6.8	)		6,639		6,554	1.3
Other		37,067		34,566		35,053	7.2		5.7			71,633		69,463	3.1
Core operating expenses		175,034		170,551		167,778	2.6		4.3			345,585		337,693	2.3
Foreclosed real estate and repossessed assets, net		12,617		12,868		8,756	(2.0	)	44.1			25,485		18,016	41.5
Operating lease depreciation		7,859		7,928		9,812	(.9	)	(19.9	)		15,787		19,852	(20.5	)
Other credit costs, net		496		2,548		2,723	(80.5	)	(81.8	)		3,044		5,310	(42.7	)
Total non-interest expense	$	196,006	$	193,895	$	189,069	1.1		3.7		$	389,901	$	380,871	2.4

Compensation and employee benefits expense in the second quarter of 2011 increased $3 million, or 3.5 percent, from the second quarter of 2010 and was relatively flat with the first quarter of 2011. The increase from the second quarter of 2010 was primarily due to production related compensation as a result of growth in the specialty finance business.
FDIC insurance expense increased $2.3 million, or 44.5 percent, from the second quarter of 2010 and increased $347 thousand, or 4.8 percent, from the first quarter of 2011. The increases were primarily the result of changes in the FDIC insurance rate calculations for banks over $10 billion in total assets, which were implemented on April 1, 2011. As a result of the FDIC’s clarification of certain items in the new rate calculations, TCF now expects 2011 expense to be approximately $7 million higher than 2010.
Deposit account premiums increased $688 thousand, or 12.6 percent, from the second quarter of 2010 and increased $3 million, or 92.8 percent, from the first quarter of 2011. The increase from the second quarter of 2010 was primarily due to changes in the account premium programs beginning in April 2011, which increased the premiums paid for each qualified account. The increase from the first quarter of 2011 was primarily due to increased production of checking accounts that qualified for premiums.
Foreclosed real estate and repossessed asset expense increased $3.9 million, or 44.1 percent, from the second quarter of 2010 and decreased $251 thousand, or 2 percent, from the first quarter of 2011. The increase from the second quarter of 2010 was primarily due to an increase in the number of consumer real estate properties owned and the related expenses, continued valuation writedowns on both consumer and commercial real estate properties and increased property tax expenses. The decrease from the first quarter of 2011 was primarily due to a decrease in the number of consumer real estate properties owned and the associated expenses.

Capital and Borrowing Capacity


Capital Information									Table 9
At period end
($ in thousands, except per-share data)	2Q 2011					4Q 2010
Total equity	$	1,769,645				$	1,480,163
Total equity to total assets		9.40	%				8.02	%
Book value per common share	$	11.00				$	10.30
Tangible realized common equity to tangible assets⁽¹⁾		8.71	%				7.37	%


Risk-based capital
Tier 1	$	1,757,410		12.72	%	$	1,475,525		10.59	%
Total		2,049,616		14.83			1,808,412		12.98
Excess over stated “10% well-capitalized” requirement		667,622		4.83			415,502		2.98

Tier 1 common capital⁽²⁾	$	1,629,030		11.79	%	$	1,352,025		9.71	%

(1) Excludes the impact of goodwill, other intangibles and accumulated other comprehensive income (loss) (see “Reconciliation of GAAP to Non-GAAP Measures” table).
(2) Excludes the effect of qualifying trust preferred securities and qualifying non-controlling interest in subsidiaries (see “Reconciliation of GAAP to Non-GAAP Measures” table).

Total risk-based capital at June 30, 2011 of $2 billion, or 14.83 percent of risk-weighted assets, was $667.6 million in excess of the stated “10 percent well-capitalized” requirement.
On July 18, 2011, the Board of Directors of TCF declared a regular quarterly cash dividend of five cents per common share payable on August 31, 2011 to stockholders of record at the close of business on July 29, 2011.
At June 30, 2011, TCF had $1.8 billion in unused, secured borrowing capacity at the FHLB of Des Moines and $518 million in unused, secured borrowing capacity at the Federal Reserve Discount Window.

Website Information

A live webcast of TCF’s conference call to discuss second quarter earnings will be hosted at TCF’s website, http://ir.tcfbank.com, on July 21, 2011 at 10:00 a.m. CT. Additionally, the webcast is available for replay at TCF’s website after the conference call. The website also includes free access to company news releases, TCF’s annual report, quarterly reports, investor presentations and SEC filings.

TCF is a Wayzata, Minnesota-based national bank holding company with $18.8 billion in total assets. TCF has 439 branches in Minnesota, Illinois, Michigan, Colorado, Wisconsin, Indiana, Arizona and South Dakota, providing retail and commercial banking services. TCF also conducts commercial leasing and equipment finance business in all 50 states and commercial inventory finance business in the U.S. and Canada. For more information about TCF, please visit www.tcfbank.com.

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 and are subject to a number of risks and uncertainties. These include, but are not limited to the following:

Adverse Economic or Business Conditions, Credit and Other Risks. Deterioration in general economic and banking industry conditions, including defaults, anticipated defaults or rating agency downgrades of sovereign debt (including debt of the United States), or continued high rates of or increases in unemployment in TCF’s primary banking markets; adverse economic, business and competitive developments such as shrinking interest margins, deposit outflows, deposit account attrition, or an inability to increase the number of deposit accounts; adverse changes in credit and other risks posed by TCF’s loan, lease, investment, and securities available for sale portfolios, including declines in commercial or residential real estate values or changes in the allowance for loan and lease losses dictated by new market conditions or regulatory requirements; interest rate risks resulting from fluctuations in prevailing interest rates or other factors that result in a mismatch between yields earned on TCF’s interest-earning assets and the rates paid on its deposits and borrowings; and foreign currency exchange risks.

Earnings/Capital Constraints, Liquidity Risks. Limitations on TCF’s ability to pay dividends or to increase dividends in the future because of financial performance deterioration, regulatory restrictions or limitations; increased deposit insurance premiums, special assessments or other costs related to adverse conditions in the banking industry, the economic impact on banks of the Dodd-Frank Act and other regulatory reform legislation; the impact of financial regulatory reform, including the phase out of trust preferred securities in tier 1 capital called for by the Dodd-Frank Act, or additional capital, leverage, liquidity and risk management requirements or changes in the composition of qualifying regulatory capital; adverse changes in securities markets directly or indirectly affecting TCF’s ability to sell assets or to fund its operations; diminished unsecured borrowing capacity resulting from TCF credit rating downgrades and unfavorable conditions in the credit markets that restrict or limit various funding sources; possible regulatory and other changes to the Federal Home Loan Bank System that may affect TCF’s borrowing capacity; costs associated with new regulatory requirements or interpretive guidance relating to liquidity.

Legislative and Regulatory Requirements. New consumer protection and supervisory requirements, including the Dodd-Frank Act’s creation of a new Bureau of Consumer Financial Protection and limits on Federal preemption for state laws that could be applied to national banks; the imposition of requirements with an adverse impact relating to TCF’s lending, loan collection and other business activities as a result of the Dodd-Frank Act, or other legislative or regulatory developments such as mortgage foreclosure moratorium laws or imposition of underwriting or other limitations that impact the ability to use certain variable-rate products; reduction of interchange revenue from debit card transactions resulting from the so-called Durbin Amendment to the Dodd-Frank Act, which limits debit card interchange fees; impact of legislative, regulatory or other changes affecting customer account charges and fee income; changes to bankruptcy laws which would result in the loss of all or part of TCF’s security interest due to collateral value declines (so-called “cramdown” provisions); deficiencies in TCF’s compliance under the Bank Secrecy Act in past or future periods, which may result in regulatory enforcement action including monetary penalties; increased health care costs resulting from Federal health care reform legislation; adverse regulatory examinations and resulting enforcement actions or other adverse consequences such as increased capital requirements or higher deposit insurance assessments; heightened regulatory practices, requirements or expectations, including, but not limited to, requirements related to the Bank Secrecy Act and anti-money laundering compliance activity.

Other Risks Relating to Fee Income. Future effects on fee income following TCF’s implementation of regulatory requirements that prohibit financial institutions from charging overdraft fees on point-of-sale and ATM transactions unless customers opt-in, including customer opt-in preferences which may have an adverse impact on TCF’s fee revenue; and uncertainties relating to future retail deposit account changes such as charging a daily negative balance fee in lieu of per item overdraft fees or other significant changes, including limitations on TCF’s ability to predict customer behavior and the impact on TCF’s fee revenues.

Litigation Risks. Results of litigation, including class action litigation concerning TCF’s lending or deposit activities including account servicing processes or fees or charges, or employment practices, and possible increases in indemnification obligations for certain litigation against Visa U.S.A. (“covered litigation”) and potential reductions in card revenues resulting from covered litigation or other litigation against Visa.

Competitive Conditions; Supermarket Branching Risk. 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.

Accounting, Audit, Tax and Insurance Matters. Changes in accounting standards or interpretations of existing standards; federal or state monetary, fiscal or tax policies, including adoption of state legislation that would increase state taxes; adverse state or Federal tax assessments or findings in tax audits; lack of or inadequate insurance coverage for claims against TCF.

Technological and Operational Matters. Technological, computer-related or operational difficulties or loss or theft of information and the possibility that deposit account losses (fraudulent checks, etc.) may increase.

Investors should consult TCF’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K for additional important information about the Company. TCF assumes no obligation to update forward-looking information contained in this release as a result of new information or future events or developments.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per-share data)

(Unaudited)

Three Months Ended

June 30,

Change

2011

2010

Interest income:

Loans and leases

213,823

221,913

(8,090

)

(3.6

)

Securities available for sale

20,639

21,065

(426

)

(2.0

)

Investments and other

1,836

1,236

600

48.5

Total interest income

236,298

244,214

(7,916

)

(3.2

)

Interest expense:

Deposits

11,430

16,281

(4,851

)

(29.8

)

Borrowings

48,718

51,434

(2,716

)

(5.3

)

Total interest expense

60,148

67,715

(7,567

)

(11.2

)

Net interest income

176,150

176,499

(349

)

(.2

)

Provision for credit losses

44,005

49,013

(5,008

)

(10.2

)

Net interest income after provision for credit losses

132,145

127,486

4,659

3.7

Non-interest income:

Fees and service charges

56,396

77,845

(21,449

)

(27.6

)

Card revenue

28,219

28,591

(372

)

(1.3

)

ATM revenue

7,091

7,844

(753

)

(9.6

)

Subtotal

91,706

114,280

(22,574

)

(19.8

)

Leasing and equipment finance

22,279

20,528

1,751

8.5

Other

384

1,235

(851

)

(68.9

)

Fees and other revenue

114,369

136,043

(21,674

)

(15.9

)

Losses on securities

(227

)

(137

)

(90

)

65.7

Total non-interest income

114,142

135,906

(21,764

)

(16.0

)

Non-interest expense:

Compensation and employee benefits

89,997

86,983

3,014

3.5

Occupancy and equipment

30,783

31,311

(528

)

(1.7

)

FDIC insurance

7,542

5,219

2,323

44.5

Deposit account premiums

6,166

5,478

688

12.6

Advertising and marketing

3,479

3,734

(255

)

(6.8

)

Other

37,067

35,053

2,014

5.7

Subtotal

175,034

167,778

7,256

4.3

Foreclosed real estate and repossessed assets, net

12,617

8,756

3,861

44.1

Operating lease depreciation

7,859

9,812

(1,953

)

(19.9

)

Other credit costs, net

496

2,723

(2,227

)

(81.8

)

Total non-interest expense

196,006

189,069

6,937

3.7

Income before income tax expense

50,281

74,323

(24,042

)

(32.3

)

Income tax expense

18,758

28,112

(9,354

)

(33.3

)

Income after income tax expense

31,523

46,211

(14,688

)

(31.8

)

Income attributable to non-controlling interest

1,686

1,186

500

42.2

Net income available to common stockholders

29,837

45,025

(15,188

)

(33.7

)

Net income per common share:

Basic

.19

.32

(.13

)

(40.6

)

Diluted

.19

.32

(.13

)

(40.6

)

Dividends declared per common share

.05

Average common and common equivalent shares outstanding (in thousands):

Basic

157,064

140,352

16,712

11.9

Diluted

157,463

140,633

16,830

12.0

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per-share data)

(Unaudited)

Six Months Ended

June 30,

Change

2011

2010

Interest income:

Loans and leases

428,496

443,177

(14,681

)

(3.3

)

Securities available for sale

40,068

42,472

(2,404

)

(5.7

)

Investments and other

3,637

2,377

1,260

53.0

Total interest income

472,201

488,026

(15,825

)

(3.2

)

Interest expense:

Deposits

23,434

33,885

(10,451

)

(30.8

)

Borrowings

98,577

102,980

(4,403

)

(4.3

)

Total interest expense

122,011

136,865

(14,854

)

(10.9

)

Net interest income

350,190

351,161

(971

)

(.3

)

Provision for credit losses

89,279

99,504

(10,225

)

(10.3

)

Net interest income after provision for credit losses

260,911

251,657

9,254

3.7

Non-interest income:

Fees and service charges

109,909

144,017

(34,108

)

(23.7

)

Card revenue

54,803

55,663

(860

)

(1.5

)

ATM revenue

13,796

14,866

(1,070

)

(7.2

)

Subtotal

178,508

214,546

(36,038

)

(16.8

)

Leasing and equipment finance

49,029

40,880

8,149

19.9

Other

1,078

3,690

(2,612

)

(70.8

)

Fees and other revenue

228,615

259,116

(30,501

)

(11.8

)

Losses on securities

(227

)

(567

)

340

(60.0

)

Total non-interest income

228,388

258,549

(30,161

)

(11.7

)

Non-interest expense:

Compensation and employee benefits

180,270

175,208

5,062

2.9

Occupancy and equipment

62,942

63,492

(550

)

(.9

)

FDIC insurance

14,737

10,700

4,037

37.7

Deposit account premiums

9,364

12,276

(2,912

)

(23.7

)

Advertising and marketing

6,639

6,554

1.3

Other

71,633

69,463

2,170

3.1

Subtotal

345,585

337,693

7,892

2.3

Foreclosed real estate and repossessed assets, net

25,485

18,016

7,469

41.5

Operating lease depreciation

15,787

19,852

(4,065

)

(20.5

)

Other credit costs, net

3,044

5,310

(2,266

)

(42.7

)

Total non-interest expense

389,901

380,871

9,030

2.4

Income before income tax expense

99,398

129,335

(29,937

)

(23.1

)

Income tax expense

37,200

48,902

(11,702

)

(23.9

)

Income after income tax expense

62,198

80,433

(18,235

)

(22.7

)

Income attributable to non-controlling interest

2,675

1,487

1,188

79.9

Net income available to common stockholders

59,523

78,946

(19,423

)

(24.6

)

Net income per common share:

Basic

.39

.58

(.19

)

(32.8

)

Diluted

.39

.58

(.19

)

(32.8

)

Dividends declared per common share

.10

Average common and common equivalent shares outstanding (in thousands):

Basic

150,765

136,370

14,395

10.6

Diluted

151,136

136,524

14,612

10.7

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollars in thousands, except per-share data)

(Unaudited)

% Change From

June 30,

December 31,

June 30,

December 31,

June 30,

2011

2010

ASSETS

Cash and due from banks

752,504

663,901

387,675

13.3

94.1

Investments

161,830

179,768

159,576

(10.0

)

1.4

Securities available for sale

2,463,367

1,931,174

1,940,331

27.6

27.0

Loans and leases:

Consumer real estate and other

7,055,750

7,195,269

7,289,499

(1.9

)

(3.2

)

Commercial

3,614,395

3,646,203

3,705,916

(.9

)

(2.5

)

Leasing and equipment finance

3,055,878

3,154,478

3,000,239

(3.1

)

1.9

Inventory finance

905,922

792,354

644,239

14.3

40.6

Total loans and leases

14,631,945

14,788,304

14,639,893

(1.1

)

(.1

)

Allowance for loan and lease losses

(255,472

)

(265,819

)

(251,643

)

3.9

(1.5

)

Net loans and leases

14,376,473

14,522,485

14,388,250

(1.0

)

(.1

)

Premises and equipment, net

439,884

443,768

447,266

(.9

)

(1.7

)

Goodwill

152,599

Other assets

487,786

571,330

554,348

(14.6

)

(12.0

)

Total assets

18,834,443

18,465,025

18,030,045

2.0

4.5

LIABILITIES AND EQUITY

Deposits:

Checking

4,496,756

4,530,064

4,406,752

(.7

)

2.0

Savings

5,715,126

5,390,802

5,498,535

6.0

3.9

Money market

643,706

635,922

633,255

1.2

1.7

Subtotal

10,855,588

10,556,788

10,538,542

2.8

3.0

Certificates of deposit

1,083,888

1,028,327

984,501

5.4

10.1

Total deposits

11,939,476

11,585,115

11,523,043

3.1

3.6

Short-term borrowings

9,514

126,790

14,805

(92.5

)

(35.7

)

Long-term borrowings

4,415,362

4,858,821

4,600,820

(9.1

)

(4.0

)

Total borrowings

4,424,876

4,985,611

4,615,625

(11.2

)

(4.1

)

Accrued expenses and other liabilities

700,446

414,136

416,841

69.1

68.0

Total liabilities

17,064,798

16,984,862

16,555,509

3.1

Equity:

Preferred stock, par value $.01 per share, 30,000,000 authorized; 0 shares issued

Common stock, par value $.01 per share, 280,000,000 shares authorized; 159,664,604,
142,965,012 and 142,547,564 shares issued

1,597

1,430

1,425

11.7

12.1

Additional paid-in capital

702,192

459,884

451,440

52.7

55.5

Retained earnings, subject to certain restrictions

1,109,541

1,064,978

1,011,497

4.2

9.7

Accumulated other comprehensive income (loss)

(23,823

)

(31,514

)

25,046

24.4

(195.1

)

Treasury stock at cost, 45,504, 51,160 and 186,504 shares, and other

(33,242

)

(23,115

)

(26,475

)

(43.8

)

(25.6

)

Total TCF Financial Corp. stockholders' equity

1,756,265

1,471,663

1,462,933

19.3

20.1

Non-controlling interest in subsidiaries

13,380

8,500

11,603

57.4

15.3

Total equity

1,769,645

1,480,163

1,474,536

19.6

20.0

Total liabilities and equity

18,834,443

18,465,025

18,030,045

2.0

4.5

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

SUMMARY OF CREDIT QUALITY DATA

(Dollars in thousands)

(Unaudited)

Change from

Jun. 30,

Mar. 31,

Dec. 31,

Sep. 30,

Jun. 30,

Mar. 31,

Jun. 30,

2011

2010

2011

2010

Delinquency Data - Principal Balances ⁽¹⁾

60 days or more:

Consumer real estate

First mortgage lien

74,090

70,024

73,848

80,795

85,581

4,066

(11,491

)

Junior lien

17,780

19,528

20,763

20,387

21,152

(1,748

)

(3,372

)

Total consumer real estate

91,870

89,552

94,611

101,182

106,733

2,318

(14,863

)

Consumer other

171

131

Total consumer real estate and other

92,041

89,630

94,650

101,243

106,864

2,411

(14,823

)

Commercial

6,238

1,864

9,021

1,260

7,872

4,374

(1,634

)

Leasing and equipment finance

2,447

5,274

5,054

4,346

5,817

(2,827

)

(3,370

)

Inventory finance

145

240

318

255

178

(95

)

(33

)

Subtotal

100,871

97,008

109,043

107,104

120,731

3,863

(19,860

)

Acquired portfolios

2,993

4,399

6,000

5,618

8,078

(1,406

)

(5,085

)

Total delinquencies

103,864

101,407

115,043

112,722

128,809

2,457

(24,945

)

Delinquency Data - % of Portfolio

60 days or more:

Consumer real estate

First mortgage lien

1.58

1.48

1.55

1.68

1.78

bps

(20

)

bps

Junior lien

.82

.89

.93

.90

.93

)

(11

)

Total consumer real estate

1.34

1.30

1.35

1.43

1.51

(17

)

Consumer other

.46

.22

.10

.14

.27

Total consumer real estate and other

1.33

1.29

1.35

1.42

1.50

(17

)

Commercial

.18

.05

.26

.04

.22

)

Leasing and equipment finance

.09

.20

.19

.17

.23

(11

)

(14

)

Inventory finance

.02

.03

.05

.04

.03

)

Subtotal

.73

.69

.79

.78

.87

(14

)

Acquired portfolios

.70

.89

1.00

.79

1.92

(19

)

(122

)

Total delinquencies

.73

.70

.80

.78

.90

(17

)

(1) Excludes non-accrual loans and leases.

Change from

Jun. 30,

Mar. 31,

Dec. 31,

Sep. 30,

Jun. 30,

Mar. 31,

Jun. 30,

2011

2010

2011

2010

Non-Accrual Loans and Leases

Non-accrual loans and leases:

Consumer real estate

First mortgage lien

129,837

133,865

140,871

140,315

127,966

(4,028

)

1,871

Junior lien

21,069

21,325

26,626

26,225

23,065

(256

)

(1,996

)

Total consumer real estate

150,906

155,190

167,497

166,540

151,031

(4,284

)

(125

)

Consumer other

(11

)

(41

)

Total consumer real estate and other

150,938

155,233

167,547

166,597

151,104

(4,295

)

(166

)

Commercial

140,407

127,745

142,248

161,889

129,266

12,662

11,141

Leasing and equipment finance

29,682

34,634

34,407

40,455

48,777

(4,952

)

(19,095

)

Inventory finance

634

1,437

1,055

871

1,035

(803

)

(401

)

Total non-accrual loans and leases

321,661

319,049

345,257

369,812

330,182

2,612

(8,521

)

Non-accrual loans and leases - rollforward

Balance, beginning of period

319,049

345,257

369,812

330,182

305,401

(26,208

)

13,648

Additions

86,996

80,596

92,180

143,929

125,270

6,400

(38,274

)

Charge-offs

(22,401

)

(37,417

)

(43,092

)

(36,371

)

(28,042

)

15,016

5,641

Transfers to other assets

(27,078

)

(33,541

)

(41,659

)

(39,072

)

(36,820

)

6,463

9,742

Return to accrual status

(21,985

)

(24,634

)

(17,989

)

(15,785

)

(12,593

)

2,649

(9,392

)

Payments received

(14,383

)

(12,881

)

(15,036

)

(15,653

)

(17,012

)

(1,502

)

2,629

Other, net

1,463

1,669

1,041

2,582

(6,022

)

(206

)

7,485

Balance, end of period

321,661

319,049

345,257

369,812

330,182

2,612

(8,521

)

Charge-offs and allowance recorded on non-accrual loans and leases as a percentage of contractual balance

Consumer real estate

26.6

24.5

22.0

20.7

21.8

210

bps

480

bps

Commercial

37.9

40.5

43.1

28.1

26.8

(260

)

1,110

Leasing and equipment finance

20.5

23.6

24.3

28.6

32.0

(310

)

(1,150

)

Inventory finance

11.8

7.1

17.5

19.5

19.6

470

(780

)

Total

31.4

31.6

24.7

25.0

640

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

SUMMARY OF CREDIT QUALITY DATA, CONTINUED

(Dollars in thousands)

(Unaudited)

Change from

Jun. 30,

Mar. 31,

Dec. 31,

Sep. 30,

Jun. 30,

Mar. 31,

Jun. 30,

2011

2010

2011

2010

Other Real Estate Owned

Other real estate owned:

Consumer real estate

94,311

97,976

90,115

88,303

81,895

(3,665

)

12,416

Commercial real estate

42,188

44,178

50,950

47,841

36,036

(1,990

)

6,152

Total other real estate owned

136,499

142,154

141,065

136,144

117,931

(5,655

)

18,568

Ending number of properties owned

Consumer real estate

801

812

813

740

657

(11

)

144

Commercial real estate

(12

)

Total

830

841

844

773

698

(11

)

132

Other real estate owned - rollforward

Balance, beginning of period

142,154

141,065

136,144

117,931

101,436

1,089

40,718

Transferred in

27,649

35,480

44,513

41,121

37,253

(7,831

)

(9,604

)

Sales

(28,759

)

(31,328

)

(34,666

)

(18,674

)

(20,464

)

2,569

(8,295

)

Writedowns

(6,741

)

(6,266

)

(6,220

)

(3,394

)

(2,998

)

(475

)

(3,743

)

Other, net

2,196

3,203

1,294

(840

)

2,704

(1,007

)

(508

)

Balance, end of period

136,499

142,154

141,065

136,144

117,931

(5,655

)

18,568

Charge-offs and writedowns recorded on other real estate owned as a percentage of contractual loan balance prior to non-performing status

Consumer

33.1

32.2

33.0

30.9

27.3

bps

580

bps

Commercial

33.2

24.5

26.6

30.9

34.6

870

(140

)

Total

33.1

30.0

30.8

30.9

29.7

310

340

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

SUMMARY OF CREDIT QUALITY DATA, CONTINUED

(Dollars in thousands)

(Unaudited)

Allowance for Loan and Lease Losses

At June 30, 2011

At March 31, 2011

At June 30, 2010

Change from

Mar. 31,

Jun. 30,

Balance

% of Portfolio

Balance

% of Portfolio

Balance

% of Portfolio

2011

2010

Consumer real estate

175,716

2.50

174,097

2.47

168,835

2.33

bps

Consumer other

1,421

3.79

1,476

4.20

2,545

5.14

(41

)

(135

)

Total consumer real estate and other

177,137

2.51

175,573

2.47

171,380

2.35

Commercial

50,783

1.41

50,119

1.39

45,255

1.22

Leasing and equipment finance

24,611

.81

26,272

.85

32,443

1.08

)

(27

)

Inventory finance

2,941

.32

3,344

.33

2,565

.40

)

Total

255,472

1.75

255,308

1.73

251,643

1.72

Credit Loss Reserves

At June 30, 2011

At March 31, 2011

At June 30, 2010

Change from

Mar. 31,

Jun. 30,

Balance

% of Portfolio

Balance

% of Portfolio

Balance

% of Portfolio

2011

2010

Allowance for loan and lease losses

255,472

1.75

255,308

1.73

251,643

1.72

bps

Reserves for unfunded commitments

2,223

N.M.

2,298

N.M.

4,581

N.M.

Total

257,695

1.76

257,606

1.74

256,224

1.75

Net Charge-Offs (Recoveries)

Change from

Quarter Ended

Jun. 30,

Mar. 31,

Dec. 31,

Sep. 30,

Jun. 30,

Mar. 31,

Jun. 30,

2011

2010

2011

2010

Consumer real estate

First mortgage lien

$21,593

21,950

$23,206

20,119

$16,775

(357

)

4,818

Junior lien

15,078

13,353

13,450

14,374

12,672

1,725

2,406

Total consumer real estate

36,671

35,303

36,656

34,493

29,447

1,368

7,224

Consumer other

684

(266

)

1,316

1,737

1,622

950

(938

)

Total consumer real estate and other

37,355

35,037

37,972

36,230

31,069

2,318

6,286

Commercial

2,684

17,778

18,596

12,826

9,143

(15,094

)

(6,459

)

Leasing and equipment finance

3,478

2,789

7,814

8,674

7,514

689

(4,036

)

Inventory finance

328

208

565

120

254

Total

$43,845

55,812

$64,947

57,810

$47,800

(11,967

)

(3,955

)

Net Charge-Offs as a Percentage of Average Loans and Leases

Change from

Quarter Ended ⁽¹⁾

Quarter Ended

Jun. 30,

Mar. 31,

Dec. 31,

Sep. 30,

Jun. 30,

Mar. 31,

Jun. 30,

2011

2010

2011

2010

Consumer real estate

First mortgage lien

1.78

1.81

1.88

1.63

1.36

)

bps

Junior lien

2.75

2.39

2.37

2.50

2.20

Total consumer real estate

2.09

1.99

2.04

1.91

1.63

Total consumer real estate and other

2.12

1.97

2.10

2.00

1.71

Commercial

.30

1.96

2.04

1.40

.98

(166

)

(68

)

Leasing and equipment finance

.45

.36

.99

1.16

.99

(54

)

Inventory finance

.13

.10

.28

.05

.04

Total

1.19

1.51

1.75

1.58

1.30

(32

)

(11

)

(1) Annualized.

N.M. Not meaningful.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES

(Dollars in thousands)

(Unaudited)

Three Months Ended June 30,

2011

2010

Average

Yields and

Average

Yields and

Balance

Interest

Rates ⁽¹⁾

Balance

Interest

Rates ⁽¹⁾

ASSETS:

Investments and other

693,678

1,836

1.06

352,667

1,236

1.40

U.S. Government sponsored entities:

Mortgage-backed securities

2,104,294

20,614

3.92

1,860,233

21,053

4.53

U.S. Treasury Bills

135,613

.06

14,167

.21

Other securities

353

5.68

457

4.39

Total securities available for sale⁽²⁾

2,240,260

20,639

3.69

1,874,857

21,065

4.49

Loans and leases:

Consumer real estate:

Fixed-rate

4,655,198

70,615

6.08

5,152,954

79,182

6.16

Variable-rate

2,379,250

30,566

5.15

2,081,247

28,473

5.49

Consumer - other

19,463

437

9.01

27,584

566

8.23

Total consumer real estate and other

7,053,911

101,618

5.78

7,261,785

108,221

5.98

Commercial:

Fixed- and adjustable-rate

2,877,903

41,442

5.78

2,976,721

44,271

5.97

Variable-rate

719,741

7,757

4.32

745,094

7,824

4.21

Total commercial

3,597,644

49,199

5.49

3,721,815

52,095

5.61

Leasing and equipment finance

3,068,550

46,184

6.02

3,021,532

49,230

6.52

Inventory finance

978,505

17,340

7.11

692,816

12,675

7.34

Total loans and leases

14,698,610

214,341

5.85

14,697,948

222,221

6.06

Total interest-earning assets

17,632,548

236,816

5.38

16,925,472

244,522

5.79

Other assets

1,163,803

1,208,867

Total assets

18,796,351

18,134,339

LIABILITIES AND EQUITY:

Non-interest bearing deposits:

Retail

1,475,191

1,480,896

Small business

683,323

631,495

Commercial and custodial

278,808

289,384

Total non-interest bearing deposits

2,437,322

2,401,775

Interest-bearing deposits:

Checking

2,152,646

1,221

.23

2,145,260

1,731

.32

Savings

5,608,824

7,279

.52

5,477,044

10,805

.79

Money market

648,862

731

.45

660,654

1,165

.71

Subtotal

8,410,332

9,231

.44

8,282,958

13,701

.66

Certificates of deposit

1,092,368

2,199

.81

1,044,008

2,580

.99

Total interest-bearing deposits

9,502,700

11,430

.48

9,326,966

16,281

.70

Total deposits

11,940,022

11,430

.38

11,728,741

16,281

.56

Borrowings:

Short-term borrowings

35,227

.24

26,665

1.19

Long-term borrowings

4,513,301

48,697

4.33

4,485,283

51,355

4.59

Total borrowings

4,548,528

48,718

4.29

4,511,948

51,434

4.57

Total interest-bearing liabilities

14,051,228

60,148

1.72

13,838,914

67,715

1.96

Total deposits and borrowings

16,488,550

60,148

1.46

16,240,689

67,715

1.67

Other liabilities

556,641

464,276

Total liabilities

17,045,191

16,704,965

Total TCF Financial Corp. stockholders' equity

1,739,543

1,417,020

Non-controlling interest in subsidiaries

11,617

12,354

Total equity

1,751,160

1,429,374

Total liabilities and equity

18,796,351

18,134,339

Net interest income and margin

176,668

4.02

176,807

4.19

(1) Annualized.

(2) Average balances and yields of securities available for sale are based upon the historical amortized cost and excludes equity securities.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES

(Dollars in thousands)

(Unaudited)

Six Months Ended June 30,

2011

2010

Average

Yields and

Average

Yields and

Balance

Interest

Rates ⁽¹⁾

Balance

Interest

Rates ⁽¹⁾

ASSETS:

Investments and other

636,190

3,637

1.15

316,532

2,377

1.51

U.S. Government sponsored entities:

Mortgage-backed securities

2,033,159

40,025

3.94

1,872,587

42,454

4.53

U.S. Treasury Bills

91,685

.07

7,122

.21

Other securities

370

5.44

467

4.75

Total securities available for sale⁽²⁾

2,125,214

40,068

3.77

1,880,176

42,472

4.52

Loans and leases:

Consumer real estate:

Fixed-rate

4,694,690

142,421

6.12

5,219,935

160,678

6.20

Variable-rate

2,373,328

60,846

5.17

2,026,500

55,808

5.55

Consumer - other

20,603

913

8.94

28,988

1,201

8.35

Total consumer real estate and other

7,088,621

204,180

5.81

7,275,423

217,687

6.03

Commercial:

Fixed- and adjustable-rate

2,895,151

83,484

5.81

2,961,937

88,300

6.01

Variable-rate

715,330

15,414

4.35

750,142

15,690

4.22

Total commercial

3,610,481

98,898

5.52

3,712,079

103,990

5.65

Leasing and equipment finance

3,093,969

93,741

6.06

3,032,537

99,255

6.55

Inventory finance

925,913

32,665

7.11

623,283

22,813

7.38

Total loans and leases

14,718,984

429,484

5.87

14,643,322

443,745

6.10

Total interest-earning assets

17,480,388

473,189

5.45

16,840,030

488,594

5.84

Other assets

1,158,899

1,218,117

Total assets

18,639,287

18,058,147

LIABILITIES AND EQUITY:

Non-interest bearing deposits:

Retail

1,466,507

1,471,980

Small business

675,861

614,467

Commercial and custodial

285,125

284,148

Total non-interest bearing deposits

2,427,493

2,370,595

Interest-bearing deposits:

Checking

2,128,673

2,577

.24

2,115,384

3,537

.34

Savings

5,517,084

14,776

.54

5,411,814

22,336

.83

Money market

661,114

1,639

.50

664,595

2,415

.73

Subtotal

8,306,871

18,992

.46

8,191,793

28,288

.70

Certificates of deposit

1,092,452

4,443

.82

1,085,349

5,597

1.04

Total interest-bearing deposits

9,399,323

23,435

.50

9,277,142

33,885

.74

Total deposits

11,826,816

23,435

.40

11,647,737

33,885

.59

Borrowings:

Short-term borrowings

59,000

113

.39

111,521

181

.33

Long-term borrowings

4,607,492

98,463

4.30

4,492,742

102,799

4.61

Total borrowings

4,666,492

98,576

4.25

4,604,263

102,980

4.50

Total interest-bearing liabilities

14,065,815

122,011

1.75

13,881,405

136,865

1.99

Total deposits and borrowings

16,493,308

122,011

1.49

16,252,000

136,865

1.70

Other liabilities

508,983

452,631

Total liabilities

17,002,291

16,704,631

Total TCF Financial Corp. stockholders' equity

1,627,251

1,343,897

Non-controlling interest in subsidiaries

9,745

9,619

Total equity

1,636,996

1,353,516

Total liabilities and equity

18,639,287

18,058,147

Net interest income and margin

351,178

4.04

351,729

4.20

(1) Annualized.

(2) Average balances and yields of securities available for sale are based upon the historical amortized cost and excludes equity securities.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED QUARTERLY STATEMENTS OF INCOME AND FINANCIAL RATIOS

(Dollars in thousands, except per-share data)

(Unaudited)

At or For the Three Months Ended

Jun. 30,

Mar. 31,

Dec. 31,

Sep. 30,

Jun. 30,

2011

2010

Interest income:

Loans and leases

213,823

214,673

220,772

219,974

221,913

Securities available for sale

20,639

19,429

18,072

19,901

21,065

Investments and other

1,836

1,801

1,900

1,232

1,236

Total interest income

236,298

235,903

240,744

241,107

244,214

Interest expense:

Deposits

11,430

12,004

13,370

13,974

16,281

Borrowings

48,718

49,859

53,088

53,378

51,434

Total interest expense

60,148

61,863

66,458

67,352

67,715

Net interest income

176,150

174,040

174,286

173,755

176,499

Provision for credit losses

44,005

45,274

77,646

59,287

49,013

Net interest income after provision for credit losses

132,145

128,766

96,640

114,468

127,486

Non-interest income:

Fees and service charges

56,396

53,513

61,480

67,684

77,845

Card revenue

28,219

26,584

27,625

27,779

28,591

ATM revenue

7,091

6,705

6,985

7,985

7,844

Subtotal

91,706

86,802

96,090

103,448

114,280

Leasing and equipment finance

22,279

26,750

23,402

24,912

20,528

Other

384

694

817

1,077

1,235

Fees and other revenue

114,369

114,246

120,309

129,437

136,043

Gains (losses) on securities, net

(227

)

21,185

8,505

(137

)

Total non-interest income

114,142

114,246

141,494

137,942

135,906

Non-interest expense:

Compensation and employee benefits

89,997

90,273

87,371

90,282

86,983

Occupancy and equipment

30,783

32,159

30,968

32,091

31,311

FDIC insurance

7,542

7,195

7,398

5,486

5,219

Deposit account premiums

6,166

3,198

1,688

3,340

5,478

Advertising and marketing

3,479

3,160

3,154

3,354

3,734

Other

37,067

34,566

37,309

39,481

35,053

Subtotal

175,034

170,551

167,888

174,034

167,778

Foreclosed real estate and repossessed assets, net

12,617

12,868

12,781

9,588

8,756

Operating lease depreciation

7,859

7,928

8,289

8,965

9,812

Other credit costs, net

496

2,548

1,542

(834

)

2,723

Total non-interest expense

196,006

193,895

190,500

191,753

189,069

Income before income tax expense

50,281

49,117

47,634

60,657

74,323

Income tax expense

18,758

18,442

16,011

22,852

28,112

Income after income tax expense

31,523

30,675

31,623

37,805

46,211

Income attributable to non-controlling interest

1,686

989

898

912

1,186

Net income available to common stockholders

29,837

29,686

30,725

36,893

45,025

Net income per common share:

Basic

.19

.20

.22

.26

.32

Diluted

.19

.20

.22

.26

.32

Dividends declared per common share

.05

Financial Ratios: ⁽¹⁾

Return on average assets

.67

.66

.68

.84

1.02

Return on average common equity

6.86

7.84

8.25

9.95

12.71

Net interest margin

4.02

4.06

4.05

4.14

4.19

(1) Annualized.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED QUARTERLY AVERAGE BALANCE SHEETS

(In thousands)

(Unaudited)

Jun. 30,

Mar. 31,

Dec. 31,

Sep. 30,

Jun. 30,

2011

2010

ASSETS

Cash and due from banks

802,812

677,695

506,244

420,674

458,598

Investments

166,039

172,309

176,795

162,034

158,956

U.S. Government sponsored entities:

Mortgage-backed securities

2,153,016

1,979,648

1,907,958

1,767,410

1,860,233

U.S. Treasury Bills

135,613

47,269

199,330

69,705

14,167

Other securities

2,360

2,578

2,945

3,473

4,358

Total securities available for sale

2,290,989

2,029,495

2,110,233

1,840,588

1,878,758

Loans and leases:

Consumer real estate:

Fixed-rate

4,655,198

4,734,618

4,874,633

5,019,925

5,152,954

Variable-rate

2,379,250

2,367,341

2,322,623

2,213,091

2,081,247

Consumer - other

19,463

21,757

23,283

25,130

27,584

Total consumer real estate and other

7,053,911

7,123,716

7,220,539

7,258,146

7,261,785

Commercial:

Fixed- and adjustable-rate

2,877,903

2,912,593

2,947,137

2,955,954

2,976,721

Variable-rate

719,741

710,870

703,769

717,894

745,094

Total commercial

3,597,644

3,623,463

3,650,906

3,673,848

3,721,815

Leasing and equipment finance

3,068,550

3,119,669

3,155,472

3,002,714

3,021,532

Inventory finance

978,505

872,785

803,157

655,485

692,816

Total loans and leases

14,698,610

14,739,633

14,830,074

14,590,193

14,697,948

Allowance for loan and lease losses

(255,441

)

(263,014

)

(251,904

)

(251,603

)

(249,553

)

Net loans and leases

14,443,169

14,476,619

14,578,170

14,338,590

14,448,395

Premises and equipment, net

442,529

445,093

446,527

447,364

444,652

Goodwill

152,599

Other assets

498,214

527,217

638,987

672,573

592,381

Total assets

18,796,351

18,481,027

18,609,555

18,034,422

18,134,339

LIABILITIES AND EQUITY

Non-interest-bearing deposits:

Retail

1,475,191

1,457,723

1,366,190

1,408,984

1,480,896

Small business

683,323

668,316

676,670

659,165

631,495

Commercial and custodial

278,808

291,513

291,295

279,475

289,384

Total non-interest bearing deposits

2,437,322

2,417,552

2,334,155

2,347,624

2,401,775

Interest-bearing deposits:

Checking

2,152,646

2,104,433

2,044,060

2,014,550

2,145,260

Savings

5,608,824

5,424,327

5,392,650

5,426,481

5,477,044

Money market

648,862

673,503

643,801

654,030

660,654

Subtotal

8,410,332

8,202,263

8,080,511

8,095,061

8,282,958

Certificates of deposit

1,092,368

1,092,537

1,040,348

1,006,685

1,044,008

Total interest-bearing deposits

9,502,700

9,294,800

9,120,859

9,101,746

9,326,966

Total deposits

11,940,022

11,712,352

11,455,014

11,449,370

11,728,741

Borrowings:

Short-term borrowings

35,227

83,038

235,219

40,646

26,665

Long-term borrowings

4,513,301

4,702,729

4,746,823

4,587,964

4,485,283

Total borrowings

4,548,528

4,785,767

4,982,042

4,628,610

4,511,948

Accrued expenses and other liabilities

556,641

460,434

674,827

463,492

464,276

Total liabilities

17,045,191

16,958,553

17,111,883

16,541,472

16,704,965

Equity:

Preferred stock

Common stock

1,594

1,463

1,428

1,426

1,425

Additional paid-in capital

698,683

503,852

456,760

451,570

451,942

Retained earnings, subject to certain restrictions

1,096,044

1,073,924

1,052,092

1,025,631

990,018

Accumulated other comprehensive income (loss)

(23,742

)

(41,699

)

3,089

28,861

3,854

Treasury stock at cost and other

(33,036

)

(22,961

)

(23,027

)

(23,923

)

(30,219

)

Total TCF Financial Corp. stockholders equity

1,739,543

1,514,579

1,490,342

1,483,565

1,417,020

Non-controlling interest in subsidiaries

11,617

7,895

7,330

9,385

12,354

Total equity

1,751,160

1,522,474

1,497,672

1,492,950

1,429,374

Total liabilities and equity

18,796,351

18,481,027

18,609,555

18,034,422

18,134,339

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED QUARTERLY YIELDS AND RATES ⁽¹⁾

(Unaudited)

Jun. 30,

Mar. 31,

Dec. 31,

Sep. 30,

Jun. 30,

2011

2010

ASSETS

Investments and other

1.06

1.26

1.86

1.59

1.40

U.S. Government sponsored entities:

Mortgage-backed securities

3.92

3.96

4.16

4.43

4.53

U.S. Treasury Bills

.06

.11

.13

.21

Other securities

5.68

5.21

3.69

4.40

4.39

Total securities available for sale⁽²⁾

3.69

3.87

3.75

4.26

4.49

Loans and leases:

Consumer real estate:

Fixed-rate

6.08

6.15

6.10

6.16

Variable-rate

5.15

5.19

5.25

5.36

5.49

Consumer - other

9.01

8.87

9.15

8.92

8.23

Total consumer real estate and other

5.78

5.84

5.93

5.98

Commercial:

Fixed- and adjustable-rate

5.78

5.85

5.90

5.89

5.97

Variable-rate

4.32

4.37

4.16

4.17

4.21

Total commercial

5.49

5.56

5.57

5.55

5.61

Leasing and equipment finance

6.02

6.10

6.24

6.41

6.52

Inventory finance

7.11

7.12

7.19

7.57

7.34

Total loans and leases

5.85

5.90

5.93

6.01

6.06

Total interest-earning assets

5.38

5.51

5.59

5.73

5.79

LIABILITIES

Interest-bearing deposits:

Checking

.23

.26

.29

.32

Savings

.52

.56

.63

.66

.79

Money market

.45

.55

.64

.65

.71

Subtotal

.44

.48

.55

.57

.66

Certificates of deposit

.81

.83

.86

.93

.99

Total interest-bearing deposits

.48

.52

.58

.61

.70

Total deposits

.38

.42

.46

.48

.56

Borrowings:

Short-term borrowings

.24

.45

.35

.82

1.19

Long-term borrowings

4.33

4.28

4.42

4.61

4.59

Total borrowings

4.29

4.22

4.23

4.58

4.57

Total interest-bearing liabilities

1.72

1.78

1.87

1.95

1.96

Net interest margin

4.02

4.06

4.05

4.14

4.19

(1) Annualized.

(2) Average yields of securities available for sale are based upon the historical amortized cost and excludes equity securities.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES ⁽¹⁾
(Dollars in thousands)
(Unaudited)

	At Jun. 30,			At Dec. 31,
	2011			2010
Computation of total equity to total assets:
Total equity	$	1,769,645		$	1,480,163
Total assets	$	18,834,443		$	18,465,025
Total equity to total assets		9.40	%		8.02	%

Computation of tangible realized common equity to tangible assets:
Total equity	$	1,769,645		$	1,480,163
Less: Non-controlling interest in subsidiaries		13,380			8,500
Total TCF Financial Corp. stockholders’ equity		1,756,265			1,471,663
Less:
Goodwill		152,599			152,599
Other intangibles		1,146			1,232
Add:
Accumulated other comprehensive loss		23,823			31,514
Tangible realized common equity	$	1,626,343		$	1,349,346

Total assets	$	18,834,443		$	18,465,025
Less:
Goodwill		152,599			152,599
Other intangibles		1,146			1,232
Tangible assets	$	18,680,698		$	18,311,194

Tangible realized common equity to tangible assets		8.71	%		7.37	%


	At Jun. 30,			At Dec. 31,
	2011			2010
Computation of tier 1 risk-based capital ratio:
Total tier 1 capital	$	1,757,410		$	1,475,525
Total risk-weighted assets	$	13,819,938		$	13,929,097
Total tier 1 risk-based capital ratio		12.72	%		10.59	%

Computation of tier 1 common capital ratio:
Total tier 1 capital	$	1,757,410		$	1,475,525
Less:
Qualifying trust preferred securities		115,000			115,000
Qualifying non-controlling interest in subsidiaries		13,380			8,500
Total tier 1 common capital	$	1,629,030		$	1,352,025

Total tier 1 common capital ratio		11.79	%		9.71	%

(1) In contrast to GAAP-basis and regulatory capital-basis measures, tangible realized common equity excludes the effect of goodwill, other intangibles and accumulated other comprehensive income (loss) and the total tier 1 common capital ratio excludes the effect of qualifying trust preferred securities and qualifying non-controlling interest in subsidiaries. Management reviews these ratios as ongoing measures and has included this information because of current interest in the industry. The methodology for calculating these ratios may vary between companies.

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Contacts

TCF Financial Corporation, Wayzata
Jason Korstange, 952-745-2755
www.tcfbank.com

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