TCF Financial Corporation Annual Report 2006

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FY2006 Annual Report · TCF Financial Corporation

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TCF Financial Corporation 2006 Annual ReportTCFThe Convenience Franchise

At or For the Year Ended December 31,
2005

% Change

2006

$537,530
20,689
516,841

489,464
–
489,464
649,197
357,108
112,165
$244,943

1.90
1.90
.92

28.41
24.23
27.42
7.92
3.46 X

1.74%
24.37
4.16
.17
7.04

$517,690
8,586
509,104

467,571
10,671
478,242
606,936
380,410
115,278
$265,132

2.00
2.00
.85

32.03
24.55
27.14
7.46
3.64 X

2.08%
28.03
4.46
.29
7.46

3.8%
141.0
1.5

4.7
(100.0)
2.3
7.0
(6.1)
(2.7)
(7.6)

(5.0)%
(5.0)
8.2

1.0
6.2
(4.9)

(16.3)
(13.1)
(6.7)
(41.4)
(5.6)

Financial Highlights

(Dollars in thousands, except per-share data)

Operating Results:
Net interest income
Provision for credit losses

Net interest income after provision for credit losses

Non-interest income:

Fees and other revenue
Gains on sales of securities available for sale

Total non-interest income

Non-interest expense

Income before income tax expense

Income tax expense
Net income

Per Common Share Information:
Basic earnings
Diluted earnings
Dividends declared
Stock price:
High
Low
Close
Book value
Price to book value

Financial Ratios:
Return on average assets
Return on average common equity
Net interest margin
Net charge-offs as a percentage of average loans and leases
Total equity to total assets at year end

Table of Contents

Letter to Our Stockholders
Business Highlights

Annual Report on Form 10-K

Business
Selected Financial Data
Management’s Discussion and Analysis
Consolidated Financial Statements
Notes to Consolidated Financial Statements
Other Financial Data

Corporate Information
Stockholder Information
Corporate Philosophy

TCF Financial Corporation and Subsidiaries

1
10

1
16
17
44
48
75

87
89
91

Lynn A. Nagorske, Chief Executive Officer

Dear Stockholders:

While 2006 was TCF’s second best year in its history,

• TCF’s return on average assets (ROA) was 1.74 per-

we did not achieve our ﬁnancial goals. It was a difﬁcult

cent and return on average equity (ROE) was 24.37

year for TCF given the interest rate environment. In

percent. TCF continues to be a high performing

July 2006, the yield curve inverted (short-term rates

ﬁnancial institution.

exceed long-term rates). This is the most difﬁcult interest

rate operating environment for TCF.

Highlights:

• TCF’s stock price closed at $27.42 on December 31,

2006, up one percent from $27.14 per share on

December 31, 2005.

• TCF earned $244.9 million in 2006, down 7.6

• TCF recently increased its annual dividend to

percent from the previous year. Earnings per share

$.97 per share in 2007, a 5.4 percent increase.

(EPS) were $1.90, down ﬁve percent from the

This is the 16th consecutive year we have increased

previous year.

the dividend.

2006 Annual Report

$9.4

$8.4

$10.7

$6.3

$7.2

Power Asset® Growth
Billions of Dollars

The major factors affecting our performance in 2006

premier products and certiﬁcates of deposit versus Totally

were as follows:

1. Interest Rates

The year began with a ﬂat yield curve, where short-

Free Checking (zero interest) deposits. Accordingly,

most of our deposit growth occurred in these higher

interest cost categories.

term and long-term rates were approximately the same.

Both of these mix changes impacted production vol-

After 17 increases in short-term rates from mid 2004

umes and compressed TCF’s net interest margin. In

through June of 2006, the Federal Reserve Board opted

2006, TCF’s interest-earning assets grew $1.3 billion,

to keep short-term rates unchanged due to slowing

or 11 percent. However, TCF’s 2006 net interest margin

economic activity. Longer-term yields then fell, resulting

declined 30 basis points or 6.7 percent to 4.16 percent

in an inverted yield curve where short-term rates were

and as a result, net interest income in 2006 grew only

higher than long-term rates. At December 31, 2006,

$19.8 million, or 3.8 percent. While TCF’s net interest

one month LIBOR was 5.32 percent or 61 basis points

margin declined in 2006, it remains approximately

higher than longer-term ten-year Treasury yields.

70 basis points higher than the average of the Top 50

This interest rate environment produced an unfavor-

Banks in the United States.

able mix shift on both sides of the balance sheet. On

2. Credit Quality

the asset side, higher yielding variable-rate home equity

TCF’s credit quality remains very good. TCF’s net

and commercial loans prepaid or reﬁnanced into lower

charge-offs for 2006 were .17 percent – a very low

yielding ﬁxed-rate loans.

level. The allowance for loan and lease losses at

At the same time, depositors took notice of short-term

interest rates in excess of ﬁve percent and began chang-

ing their behavior. This resulted in growth of higher

interest cost, market-sensitive deposits such as TCF’s

December 31, 2006 was $58.5 million or .52 percent

of loans and leases outstanding. At December 31, 2006,

non-performing assets totaled $65.6 million, up $18.3

million from the previous year end. Approximately

60 percent of non-performing assets are secured by

TCF Financial Corporation and Subsidiaries

2,067

2,150

2,216

2,296

2,427

$92.1

$79.8

$47.2

$53.0

$63.5

Total Deposit Accounts
In Thousands

Card Revenue
Millions of Dollars

■ Certificates of Deposit

■ Savings & Money Market

■ Checking

residential real estate. TCF’s secured lending strategy

of 2006. It appeared this decrease was due to a more

reduces losses by providing a secondary source of repay-

conservative customer behavior, perhaps related to

ment in the event of a customer default. During 2006,

uncertain economic conditions.

we saw the housing market soften and the Michigan

economy slow considerably. In the fourth quarter, TCF

experienced a moderate deterioration in credit quality,

especially in our Michigan consumer and commercial

loan portfolios. Overall, delinquencies remained at

acceptable levels, although they have increased from

prior periods.

3. Fee Income and Deposit Accounts

Although deposit service charges remained a challenging

area for TCF in 2006, progress was made. Fees and

service charges increased 2.9 percent in 2006 compared

to a 4.5 percent decline in 2005. Checking account

Debit card revenues continued their substantial growth

and increased 15.4 percent to $92.1 million in 2006.

TCF is currently the 13th largest Visa® Classic debit card

issuer in the United States. Debit card revenue growth

has slowed somewhat as this business is maturing and

our checking account growth has slowed over the past

few years.

Leasing revenues totaled $53 million, up 11.9 percent

from the prior year. Customer-driven sales-type lease

revenues declined while operating lease revenues

increased.

customers continued to change their banking behavior

4. Power Assets ® and Power Liabilities ®

by writing fewer checks, using their debit card more

TCF’s Power Asset lending operations continued to

frequently to replace check and cash transactions, and

generate strong growth. Power Assets totaled $10.7

doing more ACH transactions.

billion at the end of 2006 and increased 13.4 percent

Deposit account growth was approximately 130,000

over the prior year.

accounts, up 5.7 percent in 2006. We now have over

Consumer home equity loans grew 14.3 percent and

2.4 million deposit accounts. We also saw a decrease

totaled $5.9 billion at year-end. Due to the ﬂat or

in the frequency of NSF incidents in the second half

inverted yield curve, the mix change from variable rate

2006 Annual Report

TCF’s Power Asset lending operations
continued to generate strong growth
and increased 13.4 percent in 2006.

to ﬁxed rate continued in 2006. Lower yielding ﬁxed-

Power Liabilities totaled a record $9.8 billion at

rate loans increased $1.2 billion and higher yielding

December 31, 2006 and grew seven percent in 2006.

variable-rate loans decreased $498 million.

TCF’s premier products totaled $2.1 billion at year-end

Commercial loans increased 7.7 percent in 2006. We

maintained our credit underwriting discipline in grow-

ing this portfolio. This $2.9 billion portfolio is generally

secured by real estate and other assets, and 98 percent

of the portfolio is located in TCF’s banking markets.

and increased $516 million in 2006. During 2006,

TCF’s non-interest bearing average deposits declined

by $89.6 million. The decline resulted from customers

maintaining slightly lower balances in their accounts,

as well as the sale of TCF’s mortgage servicing portfolio

and the related transfer of custodial escrow accounts.

TCF’s leasing and equipment ﬁnance business produced

TCF’s large deposit account base and lower-cost

strong performance in 2006. Our leasing and equipment

deposits remain a very valuable part of our franchise.

ﬁnance operation is now the 37th largest in the U.S.

and the 18th largest bank-owned equipment ﬁnance/

leasing company in the U.S. TCF Equipment Finance

grew 22.1 percent in 2006, including operating leases.

This $1.6 billion portfolio is well diversiﬁed by equip-

ment-type and geography, and grew across all active

marketing segments. Winthrop Resources Corporation’s

portfolio grew $41.4 million, up 19.2 percent, in

2006 – a positive trend which should favorably impact

future periods.

5. Asset Sale Gains

TCF recognized $5.8 million in asset sale gains in 2006

compared to $24.3 million in 2005. The 2006 gains

included the sale of third-party mortgage servicing rights

and real estate. The servicing sale completed TCF’s exit

from the mortgage banking business and reduced future

prepayment risk. The sales of real estate generally

resulted from relocating certain of our mature branches

to improved facilities in order to enhance our deposit

and loan growth prospects. The 2005 amount included

$10.7 million in gains on sales of securities, which did

not recur in 2006 due to the ﬂat or inverted yield curve.

TCF Financial Corporation and Subsidiaries

$1,899

$1,560

$1,389

$1,047

$1,162

12/02

12/03

12/04

12/05

12/06

Leasing & Equipment Finance Portfolio1
Millions of Dollars

1Includes operating leases

6. Branches

We are increasing our relocation of traditional branch

In 2006, we completed a review of TCF’s branch

facilities to seven branches in 2007 versus two in 2006.

network. As a result of this review, we took the

We also expect to remodel a signiﬁcant number of

following actions:

our supermarket branches in conjunction with

TCF signed a purchase agreement to sell ten of its

remaining out-state Michigan branches and approx-

imately $235 million in deposits for an 11.5 percent

premium, plus a related gain on the sale of branch

real estate totaling approximately $29 million. This

sale is scheduled to close in 2007 and recognizes that

TCF’s convenience banking strategy performs better

in densely populated urban areas and that we have

other more attractive growth opportunities.

SUPERVALU® store remodelings. These improved

facilities will boost TCF’s capabilities to grow deposit

accounts, deposits and consumer loans. Increased

incremental operating costs (largely increased

occupancy costs) are usually quickly repaid through

increased revenues resulting from improved customer

growth. These capital expenditures produce a high

internal rate of return. The sale of real estate from

branches being relocated, as well as the sale of other real

estate that is no longer needed, should produce signiﬁ-

We closed 15 supermarket branches in 2006 and will

cant gains on sales in 2007 and will more than offset

close three more branches in 2007. For the most part,

the increased operating costs.

these closures were precipitated by changes in the own-

ership of these supermarkets. We elected to close these

branches since we have other supermarket and traditional

branches in close proximity, and we did not wish to deal

with multiple supermarket partners in the same market.

These closures will improve TCF’s efﬁciency in 2007.

We have slowed TCF’s future new branch expansion

in traditional branches. We intend to open 11 new tra-

ditional branches in 2007 versus ten branches opened

in 2006. It should be noted that six of the new 2007

traditional branches are carry-over branches in the

process of completion and were originally planned in

2006 Annual Report

$1,718

$1,857

$1,468

$1,965

$2,057

12/31/05

3/31/06

6/30/06

9/30/06

12/31/06

Premier Checking & Savings Deposits
Thousands of Dollars

■ Premier Savings

■ Premier Checking

2006. These branches should really be considered 2006

• Rightsizing of TCF’s consumer lending operations to

expansion branches because they were delayed as a result

reﬂect current slower origination activity and improve

of municipal approval issues and developer problems

productivity in 2007.

mostly outside of TCF’s control. Of the remaining ﬁve

new traditional branches planned, three are scheduled

to open in our new separately chartered Arizona Bank.

While increased competition and higher land and

building construction costs have lowered TCF’s inter-

• Outsourcing of TCF’s investment and insurance

backroom operations.

• Review and consolidation of TCF’s retail branch

backroom operations in early 2007.

nal rate of return on new traditional branches, they

• Sale of TCF Mortgage Corporation’s third-party

still represent an attractive way to grow our future earn-

servicing rights and outsourcing of remaining

ings and franchise. However, in this very difﬁcult oper-

residential portfolio mortgage servicing functions

ating environment, we have decided to slow the pace

in 2006.

of our 2007 traditional branch expansion.

Expense Control Initiatives

• Review and re-negotiation of major vendor contracts

to reduce TCF’s costs.

In this difﬁcult operating environment, it is important

Expense control will be an ongoing emphasis in 2007.

to focus on expense control. A summary of actions we

have taken is as follows:

Income Taxes

• Previously noted sale and closure of 26 branches, and

a slowdown of our new traditional branch expansion

in 2007.

The 2006 effective income tax rate was higher as a result

of smaller amounts of favorable tax developments

compared with 2005. These include the closing of

certain previous years’ tax returns, clariﬁcation of exist-

ing state tax legislation and favorable developments in

income tax audits.

TCF Financial Corporation and Subsidiaries

148

129

101

12/01

12/02

12/03

12/04

12/05

12/06

Total New Branches1
Number of Branches

■ Supermarket Branches

■ Traditional and Campus Branches

1Branches opened since January 1, 2001.

2007 Focus Areas and Concerns
Retail Banking

We plan to open four branches in 2007 and will slow

down the rate of branch openings in 2008 and beyond.

The key driver of our retail banking growth (accounts,

Our focus in Colorado is shifting from expansion to

balances, interest margin and fees) is our new branch

proﬁts. With our unique portfolio of all new branches

expansion strategy. In addition to the 20 branches we

located in premier sites, we are very well positioned for

plan to open in 2007, 27 percent of TCF’s branches

customer and proﬁt growth. We have also assembled a

were opened since 2002 and 50 percent of branches were

very strong team of commercial bankers in Colorado.

opened from 1996 to 2001. These newer branches

continue to grow at accelerated rates and we continue

to work to improve the growth rates in our mature

branches.

Arizona

With the opening of our ﬁrst branch in Phoenix in

December 2006, we now have the charter, systems and

management team in place for future expansion. We

Leasing and Equipment Finance

have regulatory approval and plan to open three more

We plan for continued signiﬁcant growth in TCF’s

branches in 2007 and 2008. Phoenix is one of the fastest

leasing and equipment ﬁnance business segment.

growing and most under-banked markets in the country.

With a new lease origination and processing system

in place, our team has the tools required to support

this fast-growing business. We need to continue to

execute on our unique marketing and sales strategies

to achieve our goals.

Colorado

Our rapid expansion in Colorado will slow down by

design. We currently have 44 branches in Colorado.

Campus Banking

Collectively, our campus banking network includes

over 250,000 students plus faculty and staff. With our

recent school additions, target list and pipeline of new

students, we have a great opportunity for new business

in our campus banking division.

2006 Annual Report

■ Total Deposits2
■ Fees & Other Revenue3

$1,319

$980

$442

$238

$142

$24

12/01

12/02

12/03

12/04

12/05

12/06

$125

$100

$75

$50

$25

New Branch1 Deposits & Fees
Millions of Dollars

1Branches opened since January 1, 2001.
235% annual growth rate (’06 vs. ’05).
330% annual growth rate (’06 vs. ’05).

The Yield Curve

Income Taxes

We anticipate the strong headwinds from the inverted

Legislative changes in current state and federal tax laws

yield curve to continue. We will still have risk in this

could negatively impact TCF in the future.

area in 2007.

New Products

Increased Competition

We intend to introduce several new products in 2007.

For a long time, TCF faced limited competition and

The TCF Power CheckingSM product will give consumers

owned the “free checking” market. This is no longer

a new and signiﬁcantly improved interest-bearing

the case as our strategy has been widely copied and

product in between Totally Free Checking (zero interest)

we face intense competition in all aspects of our retail

and TCF® Premier Checking (high rate). We believe

banking model.

Credit Quality

Economic conditions are always a major risk for all

banks, including TCF. A weaker than anticipated

economy could adversely impact our results through

increased loan and lease charge-offs and higher loss

we can increase TCF’s market share and grow balances

in this category. We are also working to launch a new

merchant rewards loyalty program mid year. This will

help differentiate TCF’s checking products from the

competition. There are several other new products on

the drawing board.

provisions. Our risk has increased somewhat in this

Regulatory Burden

area due to the soft Michigan economy and a slowing

Changes in industry regulations and the related com-

housing market.

Expense Control

As discussed previously, this remains a focus for 2007.

We intend to continue our efforts in this area.

pliance burden continue to increase. The Bank Secrecy

Act is a good example of this burden. These burdens

increased in 2006 and will continue to grow in 2007.

We must comply with these regulations in a cost-

effective manner.

TCF Financial Corporation and Subsidiaries

$5,883

$5,149

$4,382

$3,588

$2,955

12/02

12/03

12/04

12/05

12/06

Consumer Home Equity Lending
Millions of Dollars

In Closing

Once again I would like to thank our dedicated Board

A careful reading of this annual report will tell

of Directors. Our Board of Directors is wise, strong

you almost everything about our company. We try

and hard-working. We appreciate their counsel and

to keep our ﬁnancial reporting simple and our

advice. We would like to recognize the distinguished

disclosures complete.

service of Bob Evans and John Eggemeyer, who retired

We continue to have a mutuality of interest with our

stockholders and will always evaluate opportunities to

deliver stockholder value. Our senior management and

board of directors own approximately 11 million

shares, or 8.1 percent of TCF stock. Eighty-four percent

of our match-eligible employees participate in TCF’s

from our Board of Directors in 2006. Bob Evans,

TCF’s retired Vice Chairman and Director of Marketing,

will long be remembered for his genius and innovative

contributions to TCF’s retail banking activities. John

Eggemeyer’s vast industry experience always provided

valuable insights to our Board.

Employees Stock Purchase Plan, which at year-end

I would also like to recognize and thank TCF’s out-

held over 7.5 million shares. Our stock plans for senior

standing employees for their contributions and hard

management continue to be performance-based, empha-

work. We hire people who love to compete and win.

sizing long-term growth in earnings per share. These

Their exceptional abilities, commitment and energy

stock grants are expensed in the income statement just

make everything happen. We are proud of the TCF

like all the rest of TCF’s expenses. TCF did not

Team and its accomplishments.

achieve its ﬁnancial plan in 2006 and, as a result,

most of TCF’s senior management will not receive a

bonus. As I have stated in the past, TCF’s management

shares in the upside and downside of our decisions.

Thank you for your continued support and investment

in TCF.

Lynn A. Nagorske

Chief Executive Ofﬁcer

2006 Annual Report

TCF Business Highlights

The Convenience Franchise
The Convenience Franchise

Our Success
Our Success

A key strategic driving force behind

Initiatives like these will continue in

Successful franchises are those that

TCF’s success has been convenience in

the future.

have a carefully planned and consis-

banking. TCF revolves around the idea

tently executed business strategy. At

of convenient banking for our cus-

TCF that strategy begins with the belief

tomers. We are open seven days a week

that every customer is valuable.

and most holidays with extended

Campus banking at TCF has become a

convenient service for the University

of Minnesota, the University of Michigan

and 12 other colleges and universities

in the Midwest. The campus card,

offered to students, faculty and staff,

is a multi-purpose convenience card

that serves as a school identification

card, ATM card, library card, security

card, phone card, and stored value

card for vending machines and other

local merchants. TCF has over 110,000

campus deposit accounts and looks

forward to adding to its impressive

network of schools in 2007.

hours in our traditional, supermarket

and campus branches to ensure our

customers can bank when it is conven-

ient for them. We continue to open new

branches including our first branch in

the Arizona market in 2006. We are now

located in seven states with a total of

453 branches. We plan to continue our

new branch expansion in 2007 with the

opening of more traditional, super-

market and campus branches. Since

2004, TCF has been consolidating,

remodeling and relocating some of

Another key element of TCF’s conven-

its existing branches to improve the

ience strategy is the evolution of our

customer experience and we have seen

convenient products and services.

profitable results from these changes.

Our customers’ needs for products

With over 2.4 million deposit accounts,

we bank a large and economically

diverse customer base with different

needs for products and services.

From our introduction of Totally Free

Checking in 1986 to the successful

premier accounts we began offering

to customers in 2004, we have always

attempted to match our products to

the needs of our clients. By listening

to our customers we develop unique

strategies for growth. These strategies

have served, and will continue to serve,

our customers and stockholders well.

TCF Financial Corporation and Subsidiaries

and services change each year.

checks, a continuing trend. We also

products and services help small busi-

New products not only attract new

offer customers free TCF® Visa® gift

ness owners manage their businesses.

customers, they allow us to develop

cards, and in late 2005 introduced

In 2006, TCF introduced Express Check

deeper relationships with our existing

free merchant gift cards. TCF now

Conversion and Express Remote Deposit

customers. TCF has a culture that seeks

offers a growing selection of merchant

to enhance the efficiency of our com-

out and initiates innovative products

gift cards for purchase within the

mercial account customers.

and services. This culture is encouraged

branches or conveniently online.

annually with a strategic initiative

meeting bringing forth new ideas. An

excellent example of one such strate-

gic initiative was the introduction of

TCF’s debit card and subsequent

enhancements of our card strategies

and products.

TCF’s strategy for convenience banking

TCF also provides a host of products

is the cornerstone of our success. We

and services for customers who prefer

have a large and valuable branch net-

the convenience of electronic banking.

work, which offers extended branch

These include an automated phone

banking hours, diverse products and

system, an extensive network of TCF®

services, and convenience technology.

Express Teller® ATMs and online bank-

ing products such as TCF® Totally Free

The Foundation of Our Success
The Foundation of Our Success

TCF’s debit cards have evolved over

Online, TCF® Preferred Online and TCF®

A strong management team is needed

time, becoming our customers’ most

Online Bill Pay. TCF’s 130,000 small

to truly operate as a retail business

popular convenience service tied to

business customers can also take

offering convenient services, innova-

the checking account. Due to its ease

advantage of TCF’s Internet banking

tive products and good service. One

of use, TCF customers have shown a

services, which provide expanded

of TCF’s most important assets is its

significant preference for card use

account histories and the ability to

management bench strength and

over writing checks. We now process

download transaction detail into

depth. Each of the bank presidents is

more debit card transactions than

financial software applications. TCF’s

responsible for the financial goals of

2006 Annual Report

Long-term success in banking is often
Long-term success in banking is often
based on conservative strategies that
based on conservative strategies that
are efficiently and effectively executed.
are efficiently and effectively executed.

their region. We believe strongly that

several areas. First, we enjoy informed

company. TCF Equipment Finance

local management teams make the

timely local decision-making that

generates new business through a

best decisions regarding local issues.

allows us to compete effectively in local

diverse group of marketing segments.

Our management teams are responsible

markets on a daily basis. Second, cen-

It provides financing solutions for

for business development, customer

tralized strategic committees develop

small and mid-size companies

relations and community involvement

products and services, test and selec-

through vendor programs, manufac-

within their bank.

tively pilot these programs to develop

turers, distributors, and franchise

TCF also believes functional product line

management benefits from a central-

ized approach. Centralized functional

management, with support and direc-

efficiencies and then quickly implement

organizations. Winthrop Resources

them bank-wide. In the process, TCF

Corporation focuses on providing

develops an exceptional team of

customized, high technology lease

managers and strategists.

financing to meet the special needs

tion from specific bank presidents,

TCF is now providing full-service bank-

facilitates efficient product develop-

ing in seven states. These branches are

ment, effective communication,

available to approximately a tenth of

consistent implementation and close

the U.S. population located in six major

monitoring of our strategic initiatives,

metropolitan areas: Minneapolis-

of its customers. Both companies are

national in scope, collectively financ-

ing a broad range of equipment types

in all 50 states and to a limited extent

in foreign countries.

as well as central accountability for

St. Paul, Chicago, Detroit, Milwaukee

TCF’s holding company and corporate

the success of our major product areas.

and the fast-growing areas of Denver

functions allocate capital and provide

Organizing management to more effi-

and Phoenix.

centralized management services such

as data processing, bank operations,

product development, marketing,

finance, treasury services, employee

ciently and effectively manage our

In addition to our banking franchise,

local banks and implement our strate-

we have a separate and profitable

gic products and services helps TCF in

leasing and equipment finance

TCF Financial Corporation and Subsidiaries

benefits, legal services, compliance,

TCF’s core business success has been

and its hard working, well-trained and

human resources, credit review and

its ability to gather low interest cost

properly compensated staff. In 2006,

internal audit. This structure gives

retail deposits. We focus on growing

TCF increased its loans outstanding in

locally managed banks the flexibility

and retaining a large number of these

Power Assets by $1.3 billion. The abil-

to share, compare and refine new

accounts through convenient services

ity to grow these assets continues to

products and services while enjoying

and products targeted to a broad

be a cornerstone of TCF’s success. For

the intellectual and operational

range of customers. TCF was one of

the fifth straight year, the consumer

benefits of a larger organization.

the first banks in the country to

home equity portfolio increased over

Conservative Strategies
Conservative Strategies
of Success
of Success

introduce Totally Free Checking to its

14 percent, or nearly $734 million in

customers. In 2004, we introduced

loans. Commercial lending increased

TCF® Premier Checking and TCF® Premier

loans outstanding by $210 million

TCF believes that long-term success

Savings to our customers in response to

during 2006, despite intense competi-

in banking is based on conservative

a changing interest rate environment.

tion and a continued high volume of

strategies that are efficiently and

In the past two years, we have raised

prepayments. At TCF, we have dedi-

effectively executed. At TCF, we believe

over $2.1 billion in deposits and have

cated, experienced and knowledgeable

we have taken a conservative business

been able to use this unique product

lending staff supported by effectively

operating approach to banking for

as a good funding source alternative to

managed backroom functions. Coupled

many years. We believe that interest-

the higher costs of borrowing.

with a conservative, consistent lend-

rate risk should be minimized and

that interest-rate speculation does

not generate consistent profits and is

high risk.

TCF believes its success on the lending

side has been primarily attributable to

its emphasis on being a secured lender

ing philosophy, we have experienced

steady growth and good credit quality

over the years.

2006 Annual Report

We are
a week
We are Open 7 DaysSM a week
to ensure our customers can bank
to ensure our customers can bank
when it is convenient for them.
when it is convenient for them.

Both TCF Equipment Finance and

excess capital. We feel the best use of

and risk-based capital. TCF is consid-

Winthrop Resources Corporation had

this capital is to return it to our stock-

ered “well-capitalized” by both the

an exceptional year in loan and lease

holders in the form of either dividends

Office of the Comptroller of the Currency

originations and growth. The leasing

or stock repurchases. TCF has been

(OCC) and the Federal Reserve Board,

and equipment finance portfolio

able to increase its dividends for the

and has stable or above ratings from

increased $339 million, or 22 percent,

past sixteen consecutive years. In

Moody’s®, Fitch® and Standard & Poor’s®.

during 2006. In fact, several market-

fact, our dividend policy has been

ing segments within the portfolio

recognized by Standard & Poor’s® and

Our Value to Stockholders
Our Value to Stockholders

increased over 30 percent from

was added to the Dow Jones U.S. Select

TCF strives to place The Customer First.

December 31, 2005. Both companies

Dividend IndexSM. TCF’s stock repurchase

We believe in providing quality prod-

continue to find growth opportunities

program has been active since 1998

ucts and innovative service to our cus-

in markets where they can be effective

and 61.6 million shares have been

tomers, which creates loyalty to TCF

and have a competitive presence. We

repurchased at an average cost of

and value for our stockholders. Our

are pleased TCF’s leasing and equip-

$18.64 per share. Stock repurchase may

goal is to earn customers’ trust by

ment finance business has been

slow in the coming years as TCF may

satisfying their financial needs, giving

recognized as the 18th largest bank-

have to retain more capital to support

them great service and helping them

owned equipment finance/leasing

its asset growth. Overall, TCF has

achieve their financial goals.

company in the U.S. and we expect

returned 93 percent of its net income

continued growth from this business

to stockholders in dividends and stock

in 2007 and beyond.

repurchases over the last five years.

Simple, straightforward and enduring

strategies, which are based on a

well-grounded philosophy coupled with

TCF has earned high profits for many

TCF consistently exceeds its regulatory

successful execution and solid man-

years and as a result has generated

capital requirements in Tier 1, leverage

agement, have made TCF one of the

banking industry’s performance leaders.

TCF Financial Corporation and Subsidiaries

TCF Branch Locations

111

107107107

444444

363636

646464

195195195

666

TCF’s banking franchise began with one branch in 1923 and is now providing full-service banking in 453 branches conveniently

located in seven states, including our first Arizona branch which opened in December 2006.

Branches:

Traditional

Supermarket

Campus

Total

12/31/06

1/1/01

12/31/06

196

244

453

132

213

352

Illinois

Minnesota

Michigan

Colorado

Wisconsin

Indiana

Arizona

Total

195

107

453

1/1/01

167

352

2006 Annual Report

TCF Community Relations

Building strong communities
Building strong communities

We believe TCF has a special obligation
to its communities. This commitment
is demonstrated by supporting a vari-
ety of nonprofit organizations through
volunteer time, counsel, board repre-
sentation and financial contributions
for key projects or operations.

The TCF Foundation supports the idea
that all children have the right to a
good education. Since 1987, TCF has
worked with select inner-city schools
with much success. High school enroll-
ment and attendance has improved
and we have seen the test scores of
the elementary schools go up to the
point of being equal to those of the
suburban located schools.

TCF also focuses on the higher educa-
tion scholarship needs of our commu-
nities and employees. Last year, TCF
granted more than $300,000 to local
colleges and universities to directly
assist in tuition cost of their students.
In a move to bring Gopher football
back to the University of Minnesota’s
campus, TCF announced a $35 million
multiyear corporate sponsorship for

a new stadium. “TCF Bank Stadium™”
adds to a long-running relationship
between TCF and the University of
Minnesota. Since 1995, TCF has been
the exclusive provider of banking serv-
ices tied to a campus card – called the
U Card – at the University’s Twin Cities
and Duluth campuses. TCF is also the
official financial service provider to
the campus card program (the Mcard)
at the University of Michigan.

During 2006, TCF contributed $3 mil-
lion to charitable organizations in
education, human services, community
development, and the arts. In addition,
numerous TCF employees generously
gave their time by volunteering and/or
providing leadership to local nonprofit
organizations. TCF continues to make
a difference for people in need, and
over the past ten years, has contributed
more than $24 million in grants to
deserving organizations.

There are a variety of ways local non-
profit organizations receive financial
support from the TCF Foundation,
TCF Bank® and its employees:

• Branch Funds – Contributions or
grants are awarded to organizations
located near TCF branches.

• Employee Matching Gifts – Donations
contributed by employees to nonprofit
organizations of their choice are
matched dollar-for-dollar by TCF.

• Employee’s Fund – Funds contributed
by employees through payroll deduc-
tion; contributions are matched 100
percent by the TCF Foundation.

• TCF Foundation and Corporate Giving –
Larger grants and multiyear commit-
ments awarded to local and some
national organizations.

Each year, TCF employees create and
organize an internal March of Dimes®
campaign, raising money to prevent
birth defects and infant mortality. In
2006, TCF employees raised $430,000,
supporting the mission of the March
of Dimes.

TCF would like to take this opportunity
to give a special thank you to all our
employees who are serving, or who have
recently served, in the armed forces.

TCF Financial Corporation and Subsidiaries

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2006
or
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from _____________ to ____________

Commission File No. 001-10253
TCF Financial Corporation
(Exact name of registrant as specified in its charter)

DELAWARE
(State or other jurisdiction of
incorporation or organization)

41-1591444
(I.R.S. Employer Identification No.)

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

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

Securities registered pursuant to Section 12(b) of the Act:
Common Stock (par value $.01 per share)
Preferred Share Purchase Rights (Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange
Act from their obligation under those Sections.
x
Yes

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 and 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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of the chapter)
is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.
See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

Accelerated filer

Non-accelerated filer

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes

As of June 30, 2006, the aggregate market value of the voting and non-voting common equity held by non-affiliates computed
by reference to the price at which the common equity was last sold, or the average bid and ask price of such common equity,
as of the last business day of the registrant’s most recently completed second fiscal quarter as reported by the New York Stock
Exchange, was $2,989,446,440.

As of January 31, 2007, there were 130,443,404 shares outstanding of the registrant’s common stock, par value $.01 per share,
its only outstanding class of common stock.

Specific portions of the Registrant’s definitive Proxy Statement dated March 7, 2007 are incorporated by reference into
Part III hereof.

DOCUMENTS INCORPORATED BY REFERENCE

Table of Contents

Description

Part I
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.

Part II
Item 5.

Item 6.
Item 7.
Item 7A.
Item 8.

Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Submission of Matters to a Vote of Security Holders

Market for Registrant’s Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
Selected Financial Data
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm
Consolidated Financial Statements
Notes to Consolidated Financial Statements
Other Financial Data

Item 9.
Item 9A.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures

Management’s Report on Internal Control over Financial Reporting
Report of Independent Registered Public Accounting Firm

Item 9B.

Other Information

Part III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.

Part IV
Item 15.
Signatures
Index to Exhibits

Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services

Exhibits and Financial Statement Schedules

Page

1
8
13
13
13
13

14
16
17
41
43
43
44
48
75
76
76
76
77
77

78
78
79
79
79

80
81
82

Part I

Item 1. Business

General
TCF Financial Corporation (“TCF” or the “Company”), a
Delaware Corporation, is a financial holding company
based in Wayzata, Minnesota. Its principal subsidiaries, TCF
National Bank and TCF National Bank Arizona, collectively,
(“TCF Bank”), are headquartered in Minnesota and Arizona
and operate bank branches in Minnesota, Illinois, Michigan,
Colorado, Wisconsin, Indiana and Arizona.

At December 31, 2006, TCF had total assets of $14.7
billion and was the 43rd largest publicly traded bank holding
company in the United States based on total assets as of
September 30, 2006. Unless otherwise indicated, references
herein to “TCF” include its direct and indirect subsidiaries.
References herein to the “Holding Company” or “TCF
Financial” refer to TCF Financial Corporation on an uncon-
solidated basis.

TCF’s core businesses include retail banking; commercial
banking; small business banking; consumer lending; leasing
and equipment finance and investments and insurance serv-
ices. The retail banking business includes traditional and
supermarket branches, campus banking, EXPRESS TELLER®
ATMs and Visa U.S.A. Inc. (“Visa”) cards. See “Management’s
Discussion and Analysis of Financial Condition and Results
of Operations – Consolidated Financial Condition Analysis –
Operating Segment Results” and Note 22 of Notes to
Consolidated Financial Statements for information regard-
ing TCF’s reportable operating segments.

Retail Banking
TCF’s primary focus is on the delivery of retail and commercial
banking products in markets served by TCF Bank. Some of its
products, such as its commercial equipment loans and leases,
are offered in markets outside areas served by TCF Bank.
At December 31, 2006, TCF had 453 retail banking

branches, consisting of 196 traditional branches, 244 super-
market branches and 13 campus branches. TCF operated 107
branches in Minnesota, 195 in Illinois, 64 in Michigan, 44 in
Colorado, 36 in Wisconsin, six in Indiana and one in Arizona.

Targeted new branch expansion is a key strategy for TCF.

TCF has significantly expanded its banking franchise in
recent years. 148 new branches have been opened since
January 1, 2001. During 2006, TCF opened 19 new branches,
consisting of 10 new traditional branches, five new super-
market branches and four new campus branches. TCF antic-
ipates opening 20 new branches in 2007, consisting of 11
new traditional branches, six new supermarket branches
and three campus branches. During the fourth quarter of
2006, TCF opened its first branch in Arizona. TCF’s expansion
is largely dependent on the continued long-term success of
branch banking.

Campus banking represents an important part of TCF’s
retail banking business. TCF has alliances with the University
of Minnesota, the University of Michigan plus twelve other
colleges, including DePaul University in Chicago, Milwaukee
Area Technical College, Northern Michigan University and
Eastern Michigan University. These alliances include exclu-
sive marketing and naming rights agreements. Branches
have been opened on many of these college campuses. TCF
provides multi-purpose campus cards for many of these
colleges. These cards serve as a school identification card,
ATM card, library card, security card, health card, phone
card and stored value card for vending machines or similar
uses. TCF is ranked 6th largest in number of campus card
banking relationships in the U.S. At December 31, 2006,
there were 110,309 total campus deposit accounts and
$187.7 million in campus deposits. In 2005, TCF entered
into a $35 million 25-year naming rights agreement for
sponsorship of a new University of Minnesota football
stadium to be called “TCF Bank Stadium™”. Construction
of this stadium began in September 2006.

Non-interest income is a significant source of revenue
for TCF and an important factor in TCF’s results of operations.
A key driver of non-interest income is in checking accounts
and their related activities. Increasing fee and service
charge revenue has been challenging as a result of slower
growth in checking accounts and changing customer behav-
ior. Providing a wide range of retail banking services is an
integral component of TCF’s business philosophy and a major

2006 Form 10-K

strategy for generating additional non-interest income.
See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations – Consolidated Income
Statement and Analysis – Non-Interest Income” and
“Management’s Discussion and Analysis of Financial
Condition and Results of Operations – Forward-Looking
Information” for additional information.

Lending Activities
General TCF’s lending activities reflect its community
banking philosophy, emphasizing secured loans to individu-
als and businesses in its primary market areas in Minnesota,
Illinois, Michigan, Colorado, Wisconsin, Indiana and Arizona.
TCF is also engaged in leasing and equipment finance
activities nationwide. See “Management’s Discussion and
Analysis of Financial Condition and Results of Operations –
Consolidated Financial Condition Analysis – Loans and
Leases” and Note 5 of Notes to Consolidated Financial
Statements for additional information regarding TCF’s loan
and lease portfolios.

Consumer Lending TCF makes consumer loans for personal,
family or household purposes, such as home purchases,
debt consolidation, financing of home improvements,
automobiles, vacations and education. Consumer loans
totaled $5.9 billion at December 31, 2006, with $4.4 billion,
or 75%, having fixed interest rates and $1.5 billion, or 25%,
having variable interest rates tied to the prime rate.

TCF’s consumer lending activities are primarily home
equity real estate secured loans. They also include loans
secured by personal property and to a limited extent, unse-
cured personal loans. Consumer loans may be made on a
revolving line of credit or fixed-term basis.

Education Lending TCF originates education loans for
resale. TCF had $144.6 million of education loans held for sale
at December 31, 2006, compared with $229.8 million at
December 31, 2005. Due to legislative changes to student
loan programs in 2006, TCF accelerated the timing of certain
education loan sales. In the past, TCF generally sold the
education loans it originated just before the loans entered
repayment status. Beginning in the third quarter of 2006,
TCF began selling certain education loans once they were
fully disbursed. These loans are originated in accordance
with designated guarantor and U.S. Department of Education

guidelines and do not involve any independent credit
underwriting by TCF.

Commercial Real Estate Lending Commercial real
estate loans are loans originated by TCF that are secured
by commercial real estate including, to a lesser extent,
commercial real estate construction loans, generally to
borrowers based in its primary markets. At December 31,
2006, commercial real estate loans totaled $2.4 billion.
At December 31, 2006, variable- and adjustable-rate loans
represented 72% of commercial real estate loans outstand-
ing. At December 31, 2006, TCF’s commercial construction
and development loan portfolio totaled $188.7 million.

Commercial Business Lending Commercial business
loans are loans originated by TCF that are generally secured
by various types of business assets including inventory,
receivables, equipment, financial instruments and commer-
cial real estate. In limited cases, loans may be made on an
unsecured basis. Commercial business loans are used for a
variety of purposes including working capital and financing
the purchase of equipment.

TCF concentrates on originating commercial business
loans to middle-market companies with borrowing require-
ments of less than $25 million based in its primary markets.
Substantially all of TCF’s commercial business loans out-
standing at December 31, 2006, were to borrowers based in
its primary markets.

Leasing and Equipment Finance TCF provides a broad
range of comprehensive lease and equipment finance
products addressing the financing needs of diverse types
of small to large companies. At December 31, 2006, TCF’s
leasing and equipment finance portfolio (including operat-
ing leases) was $1.9 billion, consisting of $492.1 million of
loans and $1.4 billion of leases. TCF’s leasing and equipment
finance businesses, TCF Equipment Finance, Inc. (“TCF
Equipment Finance”) and Winthrop Resources Corporation
(“Winthrop Resources”), operate in all 50 states and have
equipment installations domestically and to a limited
extent in foreign countries. TCF Equipment Finance delivers
equipment finance solutions to small and mid-size compa-
nies in various industries. Winthrop Resources primarily
leases technology and data processing equipment to com-
panies nationwide.

TCF Financial Corporation and Subsidiaries

TCF funds most of its leases internally, and consequently

retains the credit risk on such leases. TCF may arrange
financing of certain leases through non-recourse discount-
ing of lease rentals with various other financial institutions
at fixed interest rates. At December 31, 2006, $53.7 million,
or 3.7%, of TCF’s lease portfolio, including operating leases,
was discounted on a non-recourse basis with other financial
institutions.

TCF’s leasing and equipment finance businesses also
invests in limited partnerships that are formed to invest
in qualified affordable housing projects. Leasing and equip-
ment finance had $39.7 million and $43.7 million invested
in affordable housing limited partnerships at December 31,
2006 and 2005, respectively. For more information on
investments in affordable housing limited partnerships, see
Note 1 of the Notes to Consolidated Financial Statements.

Investment Activities
TCF Bank has authority to invest in various types of liquid
assets, including United States Treasury obligations and
securities of various federal agencies and U.S. Government
sponsored enterprises, deposits of insured banks, bankers’
acceptances and federal funds. Liquidity may increase
or decrease depending upon the availability of funds and
comparative yields on investments in relation to the returns
on loans and leases. TCF Bank must also meet reserve
requirements of the Federal Reserve Board, which are
imposed based on amounts on deposit in various deposit
categories.

Sources of Funds
Deposits Deposits are the primary source of TCF’s funds
for use in lending and for other general business purposes.
Deposit inflows and outflows are significantly influenced
by economic and competitive conditions, interest rates,
money market conditions and other factors. Consumer,
small business and commercial deposits are attracted prin-
cipally from within TCF’s primary market areas through the
offering of a broad selection of deposit instruments including
consumer, small business and commercial demand deposit
accounts, interest-bearing checking accounts, money
market accounts, regular savings accounts, certificates of
deposit and retirement savings plans.

TCF’s marketing strategy emphasizes attracting core
deposits held in checking, savings, money market and cer-
tificate of deposit accounts. These accounts are a source of
low-interest cost funds and provide significant fee income.
The composition of TCF’s deposits has a significant impact
on the overall cost of funds. At December 31, 2006, interest-
bearing deposits comprised 75% of total deposits, as com-
pared with 73% at December 31, 2005.

Information concerning TCF’s deposits is set forth
in “Management’s Discussion and Analysis of Financial
Condition and Results of Operations – Consolidated
Financial Condition Analysis – Deposits” and in Note 9
of Notes to Consolidated Financial Statements.

Borrowings Borrowings may be used to compensate for
reductions in deposit inflows or net deposit outflows, or
to support expanded lending activities. These borrowings
include Federal Home Loan Bank (“FHLB”) advances, repur-
chase agreements, federal funds and other borrowings.

TCF Bank, as a member of the FHLB system, is required to
own a minimum level of FHLB stock and is authorized to apply
for advances on the security of such stock, mortgage-
backed securities, loans secured by real estate and other
assets (principally securities which are obligations of, or
guaranteed by, the United States Government), provided
certain standards related to creditworthiness have been
met. TCF’s FHLB advances totaled $1.5 billion at December
31, 2006, compared with $1.1 billion at December 31, 2005.
FHLB advances are made pursuant to several different
credit programs. Each credit program has its own interest
rates and range of maturities. The FHLB prescribes the
acceptable uses to which the advances pursuant to each
program may be made as well as limitations on the size
of advances. In addition to the program limitations, the
amounts of advances for which an institution may be eligi-
ble are generally based on the FHLB’s assessment of the
institution’s creditworthiness.

As an additional source of funds, TCF may sell securities

subject to its obligation to repurchase these securities
(repurchase agreements) with major investment banks or
the FHLB utilizing government securities or mortgage-
backed securities as collateral. Repurchase agreements
totaled $1.6 billion at December 31, 2006, compared with
$1.4 billion at December 31, 2005. Generally, securities with

2006 Form 10-K

a value in excess of the amount borrowed are required to be
deposited as collateral with the counterparty to a repurchase
agreement. The creditworthiness of the counterparty is
important in establishing that the overcollateralized amount
of securities delivered by TCF is protected. TCF only enters
into repurchase agreements with institutions with a satis-
factory credit history.

Information concerning TCF’s FHLB advances, repurchase

agreements, subordinated notes and other borrowings is
set forth in “Management’s Discussion and Analysis of
Financial Condition and Results of Operations – Consolidated
Financial Condition Analysis – Borrowings” and in Notes 10
and 11 of Notes to Consolidated Financial Statements.

Other Information
Activities of Subsidiaries of TCF Financial
Corporation TCF’s business operations include those con-
ducted by direct and indirect subsidiaries of TCF Financial,
all of which are consolidated for purposes of preparing TCF’s
consolidated financial statements. TCF does not utilize
unconsolidated subsidiaries or special purpose entities to
provide off-balance sheet borrowings. TCF’s primary direct
subsidiaries are TCF National Bank and TCF National Bank
Arizona, collectively,(“TCF Bank”). Subsidiaries of TCF Bank
are principally engaged in the following activities.

Leasing and Equipment Finance See “Item 1.
Business-Lending Activities” for information on TCF’s
leasing and equipment finance businesses.

Insurance and Investment Services TCF Investments
sell a variety of investment products to its retail banking
clients. These products include fixed and variable rate,
single premium tax-deferred annuities, mutual funds, life
insurance and broker-assisted securities.

Real Estate Investment Trust TCF has a Real Estate
Investment Trust (“REIT”) and a related foreign operating
company (“FOC”) that acquire, hold and manage real estate
loans and other assets. These companies are consolidated
with TCF Bank and are included in the consolidated financial
statements of TCF Financial Corporation. TCF’s FOC operates
under laws in certain states (including Minnesota and
Illinois) that allow FOCs. It is possible that state legislatures
may revise their tax laws applicable to REITs or FOCs and
such changes could increase TCF’s tax expense.

Competition TCF competes with a number of depository
institutions and financial service providers in its market
areas, and experiences significant competition in attract-
ing and retaining deposits and in lending funds. Direct
competition for deposits comes primarily from retail banks,
commercial banks, investment banks, credit unions and
savings institutions. Additional significant competition
for deposits comes from institutions selling money market
mutual funds and corporate and government securities.
TCF competes for the origination of loans with commercial
banks, mortgage bankers, mortgage brokers, consumer and
commercial finance companies, credit unions, insurance
companies and savings institutions. TCF also competes
nationwide with other leasing and equipment finance
companies and commercial banks in the financing of equip-
ment. Expanded use of the Internet has increased competi-
tion affecting TCF and its loan, lease and deposit products.

Employees As of December 31, 2006, TCF had 8,547 employ-
ees, including 2,902 part-time employees. TCF provides its
employees with a comprehensive program of benefits, some
of which are provided on a contributory basis, including
comprehensive medical and dental plans, a 401(k) savings
plan with a company matching contribution, life insurance
and short- and long-term disability coverage.

Regulation
The banking industry is generally subject to extensive regu-
latory oversight. TCF Financial, as a publicly held financial
holding company, and TCF Bank, as a national bank with
deposits insured by the Federal Deposit Insurance Corporation
(“FDIC”), are subject to a number of laws and regulations.
Many of these laws and regulations have undergone signifi-
cant change in recent years. These laws and regulations
impose restrictions on activities, minimum capital require-
ments, lending and deposit restrictions and numerous other
requirements. Future changes to these laws and regulations,
and other new financial services laws and regulations, are
likely and cannot be predicted with certainty. TCF Financial’s
primary regulator is the Federal Reserve Bank (“FRB”) and
TCF Bank’s primary regulator is the Office of the Comptroller
of the Currency (“OCC”).

TCF Financial Corporation and Subsidiaries

Regulatory Capital Requirements TCF Financial and
TCF Bank are subject to regulatory capital requirements of
the FRB and the OCC, respectively, as described below. In
addition, these regulatory agencies are required by law to
take prompt action when institutions do not meet certain
minimum capital standards. The Federal Deposit Insurance
Corporation Improvement Act of 1991 (“FDICIA”) defines
five levels of capital condition, the highest of which is
“well-capitalized.” It requires that regulatory authorities
subject undercapitalized institutions to various restrictions
such as limitations on dividends or other capital distribu-
tions, limitations on growth or restrictions on an activity.
Undercapitalized banks must develop a capital restoration
plan and the parent financial holding company is required
to guarantee compliance with the plan. TCF Financial and
TCF Bank are “well-capitalized” under the FDICIA capital
standards.

The FRB and the OCC also have adopted rules that could
permit them to quantify and account for interest-rate risk
exposure and market risk from trading activity and reflect
these risks in higher capital requirements. New legislation,
additional rulemaking, or changes in regulatory policies
may affect future regulatory capital requirements applicable
to TCF Financial and TCF Bank. The ability of TCF Financial
and TCF Bank to comply with regulatory capital requirements
may be adversely affected by legislative changes, future
rulemaking or policies of regulatory authorities, by unan-
ticipated losses or lower levels of earnings.

Restrictions on Distributions Dividends or other capital
distributions from TCF Bank to TCF Financial are an important
source of funds to enable TCF Financial to pay dividends on
its common stock, to make payments on TCF Financial’s
borrowings, or for its other cash needs. TCF Bank’s ability to
pay dividends is dependent on regulatory policies and regu-
latory capital requirements. The ability to pay such dividends
in the future may be adversely affected by new legislation or
regulations, or by changes in regulatory policies. In general,
TCF Bank may not declare or pay a dividend to TCF Financial
in excess of 100% of its net profits during a year, combined
with its retained net profits for the preceding two years,
without prior approval of the OCC. TCF Bank’s ability to make
capital distributions in the future may require regulatory

approval and may be restricted by its regulatory authorities.
TCF Bank’s ability to make any such distributions may also
depend on its earnings and ability to meet minimum regu-
latory capital requirements in effect during future periods.
These capital adequacy standards may be higher in the
future than existing minimum capital requirements. The
OCC also has the authority to prohibit the payment of divi-
dends by a national bank when it determines such payments
would constitute an unsafe and unsound banking practice.
In addition, income tax considerations may limit the ability
of TCF Bank to make dividend payments in excess of its cur-
rent and accumulated tax “earnings and profits” (“E&P”).
Annual dividend distributions in excess of E&P could result
in a tax liability based on the amount of excess earnings
distributed and current tax rates. See “Management’s
Discussion and Analysis of Financial Condition and Results
of Operations – Consolidated Financial Condition Analysis –
Liquidity Management” and Note 13 and Note 14 of Notes to
Consolidated Financial Statements.

Regulation of TCF and Affiliates and Insider
Transactions TCF Financial is subject to FRB regulations,
examinations and reporting requirements relating to bank or
financial holding companies. As subsidiaries of a financial
holding company, TCF Bank is subject to certain restrictions
in its dealings with TCF Financial and with companies affili-
ated with TCF.

A holding company must serve as a source of strength
for its subsidiary banks, and the FRB may require a holding
company to contribute additional capital to an undercapi-
talized subsidiary bank. In addition, Section 55 of the
National Bank Act may permit the OCC to order the pro rata
assessment of shareholders of a national bank where the
capital of the bank has become impaired. If a shareholder
fails to pay such an assessment within three months, the
OCC may order the sale of the shareholder’s stock to cover
a deficiency in the capital of a subsidiary bank. In the event
of a holding company’s bankruptcy, any commitment by the
holding company to a federal bank regulatory agency to
maintain the capital of a subsidiary bank would be assumed
by the bankruptcy trustee and may be entitled to priority
over other creditors.

2006 Form 10-K

Under the Bank Holding Company Act (“BHCA”), a bank
holding company must obtain FRB approval before acquir-
ing more than 5% control, or substantially all of the assets,
of another bank, or bank or financial holding company,
or merging or consolidating with such a bank or holding
company. The BHCA also generally prohibits a bank holding
company, with certain exceptions, from acquiring direct or
indirect ownership or control of more than 5% of the voting
shares of any company which is not a bank or bank holding
company, or from engaging directly or indirectly in activi-
ties other than those of banking, managing or controlling
banks, providing services for its subsidiaries, or conducting
activities permitted by the FRB as being closely related to
the business of banking.

Restrictions on Change in Control Federal and state
laws and regulations contain a number of provisions which
impose restrictions on changes in control of financial insti-
tutions such as TCF Bank, and which require regulatory
approval prior to any such changes in control. The Restated
Certificate of Incorporation of TCF Financial and a Share-
holder Rights Plan adopted by TCF Financial contain, among
other items, features which may inhibit a change in control
of TCF Financial.

Acquisitions and Interstate Operations Under federal
law, interstate merger transactions may be approved by
federal bank regulators without regard to whether such
transactions are prohibited by the law of any state, unless
the home state of one of the banks opted out of the Riegle-
Neal Interstate Banking and Branching Act of 1994 by
adopting a law after the date of enactment of such act, and
prior to June 1, 1997, which applies equally to all out-of-
state banks and expressly prohibits merger transactions
involving out-of-state banks. Interstate acquisitions of
branches by banks are permitted only if the law of the state
in which the branches are located permits such acquisitions.
Interstate mergers and branch acquisitions may also be
subject to certain nationwide and statewide insured deposit
maximum concentration levels or other limitations.

Insurance of Accounts; Depositor Preference In
February 2006, the Federal Deposit Insurance Act of 2005
(“FDIC Act”) was enacted into law reforming the bank

deposit insurance system. The FDIC has finalized regulations
or has drafted proposed regulations to implement many of
the FDIC Act provisions.

The deposits of TCF Bank are insured by the FDIC up to
$100,000 per insured depositor, except certain types of
retirement accounts, which are insured up to $250,000 per
insured depositor. During 2006, FDIC regulations merged
the former Saving Association Insurance Fund (“SAIF”) and
Bank Insurance Fund (“BIF”) into the Deposit Insurance
Fund (“DIF”).

The FDIC has set a designated reserve ratio of 1.25%
($1.25 against $100 of insured deposits) for the DIF. The
FDIC Act provides the FDIC Board of Directors the authority
to set the designated reserve ratio between 1.15% and 1.50%.
The FDIC must adopt a restoration plan when the reserve ratio
falls below 1.15% and begin paying dividends when the
reserve ratio exceeds 1.35%. There is no requirement to
achieve a specific ratio within a given time frame. The FDIC
Board of Directors has not declared any dividends as of
December 31, 2006. The DIF reserve ratio calculated by the
FDIC that was in effect at December 31, 2006 was 1.22%.

In 2006, the annual insurance premiums on bank deposits

insured by the DIF varied between $0 per $100 of deposits
for banks classified in the highest capital and supervisory
evaluation categories to $.27 per $100 of deposits for banks
classified in the lowest capital and supervisory evaluation
categories. Annual insurance premiums have not been
required for TCF Bank for 2006, 2005, and 2004.

In 2006, FDIC regulations established a new risk-based
assessment system under which deposit insurance assess-
ments are based upon supervisory ratings for all insured
institutions, financial ratios for most institutions, and long-
term debt issuer ratings for large institutions that have
them. Starting in the second quarter of 2007, under new FDIC
regulations, annual insurance premiums on bank deposits
insured by the DIF may vary between $.05 per $100 of deposits
for banks assigned in the lowest risk category to $.43 per
$100 of deposits for banks assigned in the highest risk
category. As of December 31, 2006, TCF Bank has not been
assigned to a new risk category by the FDIC.

The FDIC Act required the FDIC to establish a one-time
historical assessment credit that provides banks a credit
that can be used to offset insurance assessments starting

TCF Financial Corporation and Subsidiaries

in 2007. This one-time historical assessment credit was
established to benefit banks that had funded the deposit
insurance funds prior to December 31, 1996. This one-time
historical assessment credit is based upon TCF Bank’s insured
deposits as of December 31, 1996. The FDIC has estimated
TCF Bank’s one-time historical assessment credit at $9.6 mil-
lion, which can be used to offset future FDIC insurance pre-
miums. This one-time historical assessment credit may be
transferred to another insured institution with FDIC approval.
In addition to risk-based deposit insurance assessments,

additional assessments may be imposed by Financing
Corporation,a separate U.S. government agency affiliated
with the FDIC, on insured deposits to pay for the interest
cost of Financing Corporation bonds. Financing Corporation
assessment rates for 2006 ranged from $.0124 to $.0132
per $100 of deposits. Financing Corporation assessments
of $1.1 million each year for 2006, 2005 and 2004 were
paid by TCF Bank and are included in other expense. Financing
Corporation assessments and collections were largely
unaffected by the FDIC Act.

In addition, the FDIC is authorized to terminate a
depository institution’s deposit insurance if it finds that
the institution is being operated in an unsafe and unsound
manner or has violated any rule, regulation, order or condi-
tion administered by the institution’s regulatory authorities.
Any such termination of deposit insurance would likely
have a material adverse effect on TCF, the severity of which
would depend on the amount of deposits affected by such
a termination.

Under federal law, deposits and certain claims for admin-

istrative expenses and employee compensation against an
insured depository institution are afforded a priority over
other general unsecured claims against such an institution,
including federal funds and letters of credit, in the liquida-
tion or other resolution of such an institution by any receiver
appointed by regulatory authorities. Such priority creditors
would include the FDIC.

Examinations and Regulatory Sanctions TCF is sub-
ject to periodic examination by the FRB, OCC and the FDIC.
Bank regulatory authorities may impose a number of
restrictions or new requirements on institutions found to
be operating in an unsafe or unsound manner, including

but not limited to growth limitations, dividend restrictions,
individual increased regulatory capital requirements,
increased loan, lease and real estate loss reserve require-
ments, increased supervisory assessments, activity limita-
tions or other restrictions that could have an adverse effect
on such institutions, their holding companies or holders
of their debt and equity securities. Various enforcement
remedies, including civil money penalties, may be assessed
against an institution or an institution’s directors, officers,
employees, agents or independent contractors.

To the extent not subject to preemption by the OCC,
subsidiaries of TCF may also be subject to state and/or
self-regulatory organization licensing, regulation and
examination requirements in connection with certain insur-
ance and securities brokerage activities.

National Bank Investment Limitations Permissible
investments by national banks are limited by the National
Bank Act, as amended, and by rules of the OCC. Non-tradi-
tional bank activities permitted by the Gramm-Leach-Bliley
Act will subject a bank to additional regulatory limitations
or requirements, including a required regulatory capital
deduction and application of transactions with affiliates
limitations in connection with such activities.

Laws and Regulations TCF is subject to a wide array of
other laws and regulations, including, but not limited to,
usury laws, USA Patriot and Bank Secrecy Acts, the CRA and
related regulations, the Equal Credit Opportunity Act and
Regulation B, Regulation D reserve requirements, Electronic
Funds Transfer Act and Regulation E, the Truth-in-Lending
Act and Regulation Z, the Real Estate Settlement Procedures
Act and Regulation X, the Expedited Funds Availability
Act and Regulation CC, and the Truth-in-Savings Act and
Regulation DD. TCF is also subject to laws and regulations
that may impose liability on lenders and owners for clean-
up costs and other costs stemming from hazardous waste
located on property securing real estate loans.

Taxation
Federal Taxation The statute of limitations on TCF’s
consolidated Federal income tax return is closed through
2002.

2006 Form 10-K

State Taxation TCF and/or its subsidiaries currently file
tax returns in all states which impose corporate income and
franchise taxes and local tax returns in certain cities and
other taxing jurisdictions. TCF’s primary banking activities
are in the states of Minnesota, Illinois, Michigan, Colorado,
Wisconsin and Arizona. The methods of filing, and the meth-
ods for calculating taxable and apportionable income, vary
depending upon the laws of the taxing jurisdiction. See
“Risk Factors.”

See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations – Consolidated Income
Statement Analysis – Income Taxes” and Notes 1 and 12 of
Notes to Consolidated Financial Statements for additional
information regarding TCF’s income taxes.

Available Information
TCF’s website, www.tcfbank.com, includes free access to
Company news releases, investor presentations, conference
calls to discuss published financial results, TCF’s Annual
Report and periodic filings required by the Securities and
Exchange Commission (“SEC”), including annual reports on
Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K and amendments to those reports.

TCF’s Compensation/Nominating/Corporate Governance

Committee and Audit Committee charters, Corporate
Governance Guidelines, Codes of Ethics and changes to
Codes of Ethics are also available on this website.
Shareholders may request these documents in print by
contacting the Corporate Secretary at TCF Financial
Corporation, 200 Lake Street East, Mail Code EX0-03-A,
Wayzata, MN 55391-1693.

Item 1A. Risk Factors

Enterprise Risk Management
In the normal course of business, TCF is exposed to various
risks. Management balances the Company’s strategic goals,
including revenue and profitability objectives, with their
associated risks.

In defining the Company’s risk profile, management
organizes risks into three main categories: Credit Risk,
Market Risk (which includes interest-rate risk, liquidity
risk, and price risk) and Operational Risk (which includes

transaction risk and compliance risk). Policies, systems and
procedures have been adopted which are intended to iden-
tify, assess, control, monitor, and manage risk in each of
these areas.

Primary responsibility for risk management lies with the

heads of various business lines within the Company. Each
business line within the Company maintains policies, systems
and procedures which are intended to identify, assess, con-
trol, monitor, and manage risk within their respective areas.
Management continually reviews the adequacy and effec-
tiveness of these policies, systems and procedures.

As an integral part of the risk management process,
management has established various committees consist-
ing of senior executives and others within the Company.
The purpose of these committees is to closely monitor risks
and ensure that adequate risk management practices exist
within their respective areas of authority. Some of the princi-
pal committees include the Credit Policy Committee, Asset/
Liability Management Committee (“ALCO”), Investment
Committee, Capital Planning Committee and various financial
reporting and compliance-related committees. Overlapping
membership of these committees by senior executives and
others helps provide a unified view of risk on an enterprise-
wide basis.

To provide an enterprise-wide view of the Company’s
risk profile, an enterprise risk management governance
process has been established. This includes appointment
of an Enterprise Risk Management Officer, who oversees
the process and reports on the Company’s risk profile.
Additionally, risk officers are assigned to each significant
line of business and corporate function. The risk officers,
while reporting directly to their respective line or function,
facilitate implementation of the enterprise risk management
and governance process. An Enterprise Risk Management
Committee has been established consisting of senior execu-
tives and others within the Company, which oversees and
supports the Enterprise Risk Management Officer.

The enterprise risk management governance process
includes a process for providing an enterprise-wide view of
the identification, assessment, measurement, monitoring,
and reporting of significant risk-related events. The Board
of Directors, through its Audit Committee, has overall
responsibility for oversight of the Company’s enterprise risk
management governance process.

TCF Financial Corporation and Subsidiaries

Credit Risk Management Credit risk is defined as the
risk to earnings or capital of an obligor’s failure to meet the
terms of any contract with the Company or otherwise fails
to perform as agreed. This includes failure of customers to
meet their contractual obligations, and contingent exposures
from unfunded loan commitments and letters of credit.
Credit risk also includes failure of a counterparty to settle
a securities transaction on agreed-upon terms (such as the
counterparty in a repurchase transaction), or failure of an
issuer in connection with mortgage-backed securities held
in the Company’s investment portfolio.

To manage credit risk arising from lending and leasing
activities, management has adopted and maintains what
it believes are sound underwriting policies and procedures,
and periodically reviews the appropriateness of these poli-
cies and procedures. Customers are evaluated as part of the
initial underwriting processes and through periodic reviews.
For consumer loans and small business banking loans, credit
scoring models are used to help determine eligibility for
credit and terms of credit. These models are periodically
reviewed to verify they are predictive of borrower perform-
ance. Limits are established on the exposure to a single
customer (including their affiliates) and on concentrations
for certain categories of customers. Loan and lease credit
approval levels are established so that larger credit exposures
receive managerial review at the appropriate level through
various credit approval committees.

Management continuously monitors asset quality in
order to manage the Company’s credit risk and determine
the appropriateness of valuation allowances. This includes,
in the case of commercial loans and leases, a risk rating
methodology under which a rating (1 through 9) is assigned
to every loan and lease. The rating reflects management’s
assessment of the level of the customer’s financial stress
which may impact repayment. Asset quality is monitored
separately based on the type or category of loan or lease.
This allows management to better define the Company’s
loan and lease portfolio risk profile. Management also uses
various risk models – called stress tests – to estimate
probable impact on payment performance under various
expected or unexpected scenarios.

Market Risk Management (Including Interest-Rate
Risk and Liquidity Risk) Market risk is defined as the
potential for losses arising from changes in interest rates,

equity prices, and other relevant market rates or prices,
and includes interest-rate risk, liquidity risk and price risk.
Interest-rate risk and associated liquidity risk are the
Company’s primary market risks.

Interest-Rate Risk Interest-rate risk is defined as the
exposure of net interest income and fair value of financial
instruments to adverse movements in interest rates.
Interest-rate risk arises mainly from the structure of the
balance sheet. The primary goal of interest-rate risk man-
agement is to control exposure to interest-rate risk within
acceptable tolerances established by ALCO and the Board
of Directors.

The major sources of the Company’s interest-rate risk are
timing differences in the maturity and repricing characteris-
tics of assets and liabilities, changes in relationships between
rate indices (basis risk), changes in customer behavior and
changes in the shape of the yield curve. Management meas-
ures these risks and their impact in various ways, including
use of simulation analysis and valuation analysis.

Simulation analysis is used to model net interest income
from asset and liability positions over a specified time period
(generally one year), and the sensitivity of net interest
income, under various interest rate scenarios. The interest
rate scenarios may include gradual or rapid changes in inter-
est rates, rate shocks, spread narrowing and widening, yield
curve twists, and changes in assumptions about customer
behavior in various interest rate scenarios. The simulation
analysis is based on various key assumptions which relate to
the behavior of interest rates and spreads, changes in prod-
uct balances, the repricing characteristics of products, and
the behavior of loan and deposit customers in different rate
environments. The simulation analysis does not necessarily
take into account actions management may undertake in
response to anticipated changes in interest rates.

In addition to the valuation analysis, management uti-

lizes an interest rate gap measure (difference between
interest-earning assets and interest-bearing liabilities
repricing within a given period). While the interest rate gap
measurement has some limitations, including no assumptions
regarding future asset or liability production and a static
interest rate assumption (large changes may occur related
to those items), the interest rate gap represents the net
asset or liability sensitivity at a point in time. An interest
rate gap measure could be significantly affected by external

2006 Form 10-K

factors such as loan prepayments, early withdrawals of
deposits, changes in the correlation of various interest-
bearing instruments, competition or a rise or decline in
interest rates. See “Item 7A. Quantitative and Qualitative
Disclosures About Market Risk” for further information about
TCF’s interest-rate risk, gap analysis and simulation analysis.
Management also uses valuation analysis to measure

risk in the balance sheet that might not be taken into
account in the net interest income simulation analysis.
Whereas net interest income simulation highlights exposure
over a relatively short time period (12 months), valuation
analysis incorporates all cash flows over the estimated
remaining life of all balance sheet positions. The valuation
of the balance sheet, at a point in time, is defined as the
discounted present value of asset cash flows minus the
discounted value of liability cash flows. Valuation analysis
addresses only the current balance sheet and does not
incorporate the growth assumptions that are used in the
net interest income simulation model. As with the net inter-
est income simulation model, valuation analysis is based
on key assumptions about the timing and variability of
balance sheet cash flows. It also does not take into account
actions management may undertake in response to antici-
pated changes in interest rates.

ALCO meets regularly and is responsible for reviewing the
Company’s interest rate sensitivity position and establishing
policies to monitor and limit exposure to interest-rate risk.

Liquidity Risk Liquidity risk is defined as the risk to earn-
ings or capital arising from the Company’s inability to meet its
obligations when they come due without incurring unaccept-
able losses. The primary goal of liquidity risk management
is to ensure that the Company’s entire funding needs are
met promptly, in a cost-efficient and reliable manner.
ALCO and the Board of Directors have adopted a

Liquidity Management Policy to direct management of the
Company’s liquidity risk. Under the Liquidity Management
Policy, the Treasurer reviews current and forecasted funding
needs for the Company and periodically reviews market
conditions for issuing debt securities to wholesale investors.
Key liquidity ratios and the amount available from alterna-
tive funding sources are reported to ALCO on a monthly basis.
The Treasurer maintains diverse and reliable sources
of funding. This includes federal funds lines totaling at
least $500 million, repurchase agreement lines totaling at
least 150% of the amount of the Company’s financeable

collateral (defined as any piece or pool of collateral that
is greater than $5 million in current par), access to Federal
Home Loan Bank (“FHLB”) advances and the Federal Reserve
Bank discount window, “treasury, tax and loan notes,”
commercial repurchase sweeps, and wholesale deposits.

The Treasurer ensures that liability maturities are stag-

gered to limit forecasted daily funding needs. The daily
funding guideline is $500 million, which may be met with a
mix of approved borrowing types. Cash flow variances may
cause minor day-to-day excesses over this guideline. A
contingency funding plan is in place should certain liquidity
triggers occur.

Other Market Risks Another source of market risk is
the Company’s investment in FHLB stock. The investments
in FHLB stock are required investments related to TCF’s bor-
rowings from these banks. All new FHLB borrowing activity
since 2000 is done with the FHLB of Des Moines. FHLBs
obtain their funding primarily through issuance of consoli-
dated obligations of the Federal Home Loan Bank System.
The U.S. Government does not guarantee these obligations,
and each of the 12 FHLBs are generally jointly and severally
liable for repayment of each other’s debt. Therefore, TCF’s
investments in these banks could be adversely impacted by
the operations of the other FHLBs.

Operational Risk Management Operational risk is
defined as the risk of loss resulting from inadequate or failed
internal processes, people, and systems, or external events.
This definition includes transaction risk, which includes
losses from fraud, error, the inability to deliver products or
services, and loss or theft of information. Transaction risk
encompasses product development and delivery, transaction
processing, information technology systems, and the inter-
nal control environment. The definition of operational risk
also includes compliance risk, which is the risk of loss from
violations of, or nonconformance with laws, rules, regula-
tions, prescribed practices, or ethical standards.

The Company’s Internal Audit Department periodically
assesses the adequacy and effectiveness of the Company’s
processes for controlling and managing risks in all the core
areas of operations. This includes determining whether
internal controls and information systems are properly
designed and adequately tested and reviewed. This also
includes determining whether the system of internal controls
over financial reporting is appropriate for the type and level

TCF Financial Corporation and Subsidiaries

of risks posed by the nature and scope of the company’s
activities. Audit plans are prepared using a risk-based
methodology as well as any concerns identified by manage-
ment, the Audit Committee, regulators or the Company’s
independent registered public accounting firm. Significant
issues related to the adequacy of controls, together with
recommendations for improvements to those controls, are
reported to management and the Audit Committee.

The Company’s Compliance Department and others
charged with compliance responsibilities periodically
assess the adequacy and effectiveness of the Company’s
processes for controlling and managing its principal com-
pliance risks. Compliance Department audit plans are
prepared using a risk-based methodology as well as any
concerns identified by management, the Audit Committee,
or regulators. Significant issues related to the adequacy of
controls, together with recommendations for improvements
to those controls, are reported to management and the
Audit Committee.

Other Risks
Customer Behavior Changes in customers’ behavior
regarding use of deposit accounts could result in lower fee
revenue, higher borrowing costs, and higher operational
costs for TCF. TCF obtains a large portion of its revenue from
its deposit accounts and depends on low-cost deposits as a
significant source of funds.

In addition, competition from other financial institutions

could result in higher numbers of closed accounts and
increased account acquisition costs. TCF actively monitors
customer behavior and adjusts policies and marketing efforts
accordingly to attract new and retain existing checking
account customers.

New Branch Expansion Opening new branches is an
integral part of TCF’s growth strategy for generating new
customers, deposit accounts and loans and the related rev-
enue. The success of TCF’s branch expansion is dependent on
the continued success of branch banking in attracting new
customers and business. Many other financial institutions
are also opening new branches, and the competition from
them and other retailers for new branch sites is significant.
New branches typically produce net losses during the
first two to three years 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.

Supermarket Branches The success of TCF’s supermarket
branch expansion is dependent on the continued long-term
success and viability of TCF’s supermarket partners and TCF’s
ability to maintain licenses or lease agreements for its
supermarket locations. At December 31, 2006, TCF had
244 supermarket branches, representing 54% of all retail
branches. Supermarket banking continues to play an
important role in TCF’s growth, as these branches have been
consistent generators of account growth and deposits. TCF
is subject to the risk, among others, that its license or lease
for a location or locations will terminate upon the sale or
closure of that location or locations by the supermarket
partner. Also, an economic slowdown, financial or labor
difficulties in the supermarket industry may reduce activity
in TCF’s supermarket branches.

Card Revenue Future card revenues may be impacted by
class action litigation against Visa U.S.A. Inc. (“Visa”) and
MasterCard®. Visa is a defendant in many other legal actions,
including litigation brought by merchants and merchant
organizations against Visa concerning its card interchange
fees challenging the level of interchange fees and prohibi-
tions on merchants imposing surcharges on customers using
cards to purchase goods and services. The ultimate impact
of any such litigation cannot be predicted at this time.

Merchants are also seeking to develop independent card
products or payment systems that would serve as alterna-
tives to TCF Visa card products. The continued success of
TCF’s various card programs is dependent on the success
and viability of Visa and the continued use by customers
and acceptance by merchants of its cards.

Declines in Home Values Declines in home values in
TCF’s markets could adversely impact results from operations.
Like all banks, TCF is subject to the effects of any economic
downturn, and in particular, a significant decline in home
values in TCF’s markets could have a negative effect on
results of operations. At December 31, 2006, TCF had $6.5
billion of consumer home equity and residential real estate
loans with a weighted-average loan-to-value ratio for the
portfolio of 78%. A significant decline in home values would
likely lead to a decrease in new home equity loan origina-
tions and increased delinquencies and defaults in both the
consumer home equity loan and residential real estate loan
portfolios and result in increased losses in these portfolios.

2006 Form 10-K

Leasing and Equipment Finance Activities TCF’s
leasing and equipment finance activity is subject to risk of
cyclical downturns and other adverse economic develop-
ments. In an adverse economic environment, there may be
a decline in the demand for some types of equipment which
TCF leases and/or finances, resulting in a decline in the
amount of new equipment being placed in service as well
as the decline in equipment values for equipment previously
placed in service. TCF, like all owners and lessors of commer-
cial equipment, may be exposed to liability claims resulting
from injuries or accidents involving that equipment. Such
liability has been most acute in states that have adopted
laws imposing statutory vicarious liability on leasing com-
panies for any injuries or property damage caused by motor
vehicles they owned and leased. In 2005, a federal statute
was enacted that significantly reduced a leasing company’s
exposure to that risk. TCF seeks to mitigate its overall expo-
sure to lessor’s liability risk by requiring all lessees to fur-
nish evidence of liability insurance prior to lease inception
and to maintain that insurance throughout the term of the
lease, and through its own insurance programs.

Income Taxes TCF is subject to federal and state income
tax regulations. Income tax regulations are often complex
and require interpretation. Changes in income tax regula-
tions could negatively impact TCF’s results of operations.
If TCF’s REIT affiliate fails to qualify as a REIT, or should
states enact legislation taxing these or related entities, TCF
will be subject to a higher consolidated effective tax rate.
The REIT and related companies must meet specific provi-
sions of the Internal Revenue Code (“IRC”) and state tax
laws. If these companies fail to meet any of the required
provisions of federal and state tax laws, TCF’s tax expense
could increase. Use of REITs is and has been the subject of
federal and state audits and tax policy debates by various
state legislatures. See “Management’s Discussion and
Analysis of Financial Condition and Results of Operations –
Consolidated Income Statement Analysis – Income Taxes”
for additional information.

Rules and Regulations New or revised tax, accounting,
and other laws, regulations, rules and standards could sig-
nificantly impact strategic initiatives, results of operations,
and financial condition. The financial services industry is
extensively regulated. Federal and state laws and regulations
are designed primarily to protect the deposit insurance funds
and consumers, and not necessarily to benefit a financial

company’s shareholders. These laws and regulations may
sometimes impose significant limitations on operations.
These limitations, and sources of potential liability for the
violation of such laws and regulations, are described in
“Regulation.” These regulations, along with the currently
existing tax and accounting laws, regulations, rules, and
standards, control the methods by which financial institu-
tions conduct business; implement strategic initiatives, as
well as past, present, and contemplated tax planning; and
govern financial disclosures. These laws, regulations, rules,
and standards are constantly evolving and may change
significantly over time. Current events that may not have
a direct impact on TCF, such as accounting improprieties,
may result in the adoption of substantive revisions to laws,
regulations, rules, and standards. The nature, extent, and
timing of the adoption of significant new laws, changes in
existing laws, or repeal of existing laws may have a material
impact on TCF’s business, results of operations, and finan-
cial condition, the effect of which is impossible to predict
at this time.

Future Legislative and Regulatory Change;
Litigation and Enforcement Activity There are a
number of respects in which future legislative or regulatory
change, or changes in enforcement practices or court rulings,
could adversely affect TCF, and it is generally not possible
to predict when or if such changes may have an impact on
TCF. TCF’s income in future periods may be negatively
impacted by pending state and federal legislative propos-
als which, if enacted, could limit interest rates or loan,
deposit or other fees and service charges. For example,
recently proposed federal legislation could reduce interest
subsidies and other benefits available to financial institu-
tions that make education loans. Financial institutions
have increasingly been the subject of class action lawsuits
or in some cases regulatory actions challenging a variety of
practices involving consumer lending and retail deposit-
taking activity.

The Community Reinvestment Act (“CRA”) and fair lend-
ing laws and regulations impose nondiscriminatory lending
requirements on financial institutions. The Department of
Justice (“DOJ”) and other federal agencies are responsible
for enforcing these laws and regulations. A successful chal-
lenge to an institution’s performance under the CRA or fair
lending laws and regulations could result in a wide variety
of sanctions, including the required payment of damages

TCF Financial Corporation and Subsidiaries

and civil money penalties, injunctive relief, imposition of
restrictions on mergers and acquisitions activity, and
restrictions on expansion activity. Private parties may also
have the ability to challenge an institution’s performance
under fair lending laws in private class action litigation.

USA Patriot and Bank Secrecy Acts The USA Patriot
and Bank Secrecy Acts require financial institutions to
develop programs to prevent financial institutions from
being used for money laundering and terrorist activities.
If such activities are detected, financial institutions are
obligated to file suspicious activity reports with the U.S.
Treasury Department’s Office of Financial Crimes Enforcement
Network. These rules require financial institutions to estab-
lish procedures for identifying and verifying the identity of
customers seeking to open new financial accounts. Failure
to comply with these regulations could result in fines or
sanctions. In recent years, several banking institutions
have received large fines for non-compliance with these
laws and regulations. TCF has developed policies and pro-
cedures designed to ensure compliance.

Disruption to Infrastructure The extended disruption
of vital infrastructure could negatively impact TCF’s business,
results of operations, and financial condition. TCF’s opera-
tions depend upon, among other things, its technological
and physical infrastructure, including its equipment and
facilities. Extended disruption of its vital infrastructure
by fire, power loss, natural disaster, telecommunications
failure, computer hacking and viruses, terrorist activity or
the domestic and foreign response to such activity, or other
events outside of TCF’s control, could have a material
adverse impact either on the financial services industry as
a whole, or on TCF’s business, results of operations, and
financial condition.

Estimates and Assumptions TCF’s consolidated finan-
cial statements conform with generally accepted accounting
principles, which require management to make estimates
and assumptions that affect amounts reported in the con-
solidated financial statements. These estimates are based
on information available to management at the time the
estimates are made. Actual results could differ from those
estimates. For further information relating to critical
accounting estimates, see “Management’s Discussion and
Analysis of Financial Condition and Results of Operations –
Summary of Critical Accounting Estimates.”

Item 1B. Unresolved
Staff Comments
None.

Item 2. Properties
Offices At December 31, 2006, TCF owned the buildings
and land for 139 of its bank branch offices, owned the
buildings but leased the land for 14 of its bank branch
offices and leased or licensed the remaining 300 bank
branch offices, all of which are well maintained. The prop-
erties related to the bank branch offices owned by TCF
had a depreciated cost of approximately $230.8 million at
December 31, 2006. At December 31, 2006, the aggregate
net book value of leasehold improvements associated
with leased bank branch office facilities was $29.4 million.
In addition to the above-referenced branch offices, TCF
owned and leased other facilities with an aggregate net
book value of $41.2 million at December 31, 2006. For more
information on premises and equipment, see Note 7 of
Notes to Consolidated Financial Statements.

Item 3. 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 pro-
ceedings and other collection actions as part of its lending
and leasing collection activities. From time to time, borrow-
ers and other customers, or employees or former employees
have also brought actions against TCF, in some cases claim-
ing substantial amounts of damages. Financial services
companies are subject to the risk of class action litigation,
and TCF has had such actions brought against it from time
to time. Litigation is often unpredictable and the actual
results of litigation cannot be determined with certainty.

Item 4. Submission of Matters
to a Vote of Security Holders
None.

2006 Form 10-K

Part II

Item 5. Market for Registrant’s
Common Equity, Related
Stockholder Matters and Issuer
Purchases of Equity Securities
TCF’s common stock trades on the New York Stock Exchange
under the symbol “TCB.” The following table sets forth the
high and low prices and dividends declared for TCF’s common
stock. The stock prices represent the high and low sale prices
for the common stock on the New York Stock Exchange
Composite Tape, as reported by Bloomberg.

2006
First Quarter
Second Quarter
Third Quarter
Fourth Quarter

2005
First Quarter
Second Quarter
Third Quarter
Fourth Quarter

High

Low

Dividends
Declared

$28.41
27.70
28.10
27.89

$32.03
28.56
28.82
28.78

$24.23
24.91
24.94
25.16

$26.42
24.55
25.81
25.02

.23
.23
.23
.23

$.2125
.2125
.2125
.2125

As of January 31, 2007, there were 8,451 record holders

of TCF’s common stock.

The Board of Directors of TCF Financial has not adopted
a formal dividend policy. The Board of Directors intends to
continue its practice of paying quarterly cash dividends on
TCF’s common stock as justified by the financial condition
of TCF. The declaration and amount of future dividends will
depend on circumstances existing at the time, including
TCF’s earnings, financial condition and capital requirements,
the cash available to pay such dividends (derived mainly
from dividends and distributions from TCF Bank), as well
as regulatory and contractual limitations and such other
factors as the Board of Directors may deem relevant. In
general, TCF Bank may not declare or pay a dividend to TCF
in excess of 100% of its net profits for that year combined
with its retained net profits for the preceding two calendar
years, without prior approval of the OCC. Restrictions on the
ability of TCF Bank to pay cash dividends or possible dimin-
ished earnings of the indirect subsidiaries of TCF may limit
the ability of TCF to pay dividends in the future to holders of
its common stock. See “Regulation – Regulatory Capital
Requirements,” “Regulation – Restrictions on
Distributions” and Note 14 of Notes to Consolidated
Financial Statements.

TCF Financial Corporation and Subsidiaries

The following graph compares the cumulative total stockholder return on TCF Stock over the last five fiscal years with the

cumulative total return of the Standard and Poor’s 500 Stock Index, the SNL All Bank and Thrift Index, and a TCF Financial-
selected group of peer institutions over the same period (assuming the investment of $100 in each index on December 31, 2000
and reinvestment of all dividends).

TCF Stock Performance Chart

TCF Financial Corporation
S&P 500*
SNL All Bank & Thrift Index (1)
2006 TCF Peer Group (2)

e
u
l
a
V
x
e
d
n
I

$300

$250

$200

$150

$100

$50

12/31/01

12/31/02

12/31/03

12/31/04

12/31/05

12/31/06

Period Ending

Index
TCF Financial Corporation
S&P 500*
SNL All Bank & Thrift Index (1)
2006 TCF Peer Group (2)

12/31/01
100.00
100.00
100.00
100.00

12/31/02
93.29
77.90
93.96
103.58

12/31/03
112.86
100.25
127.39
143.52

12/31/04
145.13
111.15
142.66
172.55

12/31/05
126.44
116.61
144.89
173.01

12/31/06
132.34
135.03
169.30
191.36

(1) Includes every bank and thrift institution in the U.S. traded on a major public exchange, a total of 624 companies as of December 31, 2006.

(2) Consists of 30 publicly traded banks and thrifts, 15 of which are immediately larger than and 15 of which are immediately smaller than TCF Financial in total assets

as of September 30, 2006, as follows: IndyMac Bancorp Inc.; Colonial BancGroup; Astoria Financial Corporation; Associated Banc-Corp; Webster Financial Corporation;
Mercantile Bankshares Corporation; BOK Financial Corporation; Downey Financial Corp.; W Holding Company Inc.; Sky Financial Group, Inc.; First Citizens BancShares, Inc.;
Commerce Bancshares, Inc.; Flagstar Bancorp, Inc.; Fulton Financial Corporation; City National Corporation; South Financial Group, Inc.; BankUnited Financial Corporation;
Fremount General Corporation; Valley National Bankcorp; BancorpSouth, Inc.; Cullen/Frost Bankers, Inc.; Investors Financial Services Corp.; MAF Bancorp, Inc.; East West
Bancorp. Inc.; First Republic Bank; Wilmington Trust Corporation; International Bancshares Corporation; People’s Bank (MHC); Bank of Hawaii Corporation; FirstMerit
Corporation. Five of the companies, which were in the 2005 TCF Peer Group are not in the 2006 TCF Peer Group due to merger and acquisition activity or changes in asset
size. Those five companies are: Independence Community Bank Corp.; Westcorp; FirstFed Financial Corp.; Whitney Holding Corporation; Hudson United Bancorp.

The following table summarizes share repurchase activity for the quarter ended December 31, 2006.

Balance, September 30, 2006

October 1-31, 2006
November 1-30, 2006
December 1-31, 2006
Balance, December 31, 2006

Shares
Repurchased

Number

–
–
500,000
500,000

Average Price
Per Share

–
–
27.26
$27.26

Remaining
Share Repurchase
Authorization (1)
May 21,2005
3,328,307
3,328,307
3,328,307
2,828,307
2,828,307

(1) The current share repurchase authorization was approved by the Board of Directors on May 21, 2005. The authorization was for a repurchase of up to an additional 5%

of TCF's common stock outstanding at the time of the authorization, or 6.7 million shares. This authorization does not have an expiration date.

2006 Form 10-K

Item 6. Selected Financial Data
The selected five-year financial summary presented below should be read in conjunction with the Consolidated Financial
Statements and related notes.

Five-Year Financial Summary

Consolidated Income:

(Dollars in thousands, except per-share data)
Total revenue
Net interest income
Provision for credit losses
Fees and other revenue
Gains on sales of securities

available for sale and other

Non-interest expense

Income before income tax expense

Income tax expense
Net income
Per common share:
Basic earnings
Diluted earnings
Dividends declared

Consolidated Financial Condition:

$
$
$

Year Ended December 31,

2005
995,932 $
517,690 $
8,586
467,571

10,671
606,936
380,410
115,278
265,132 $

2004
981,777 $
491,891 $
18,627
467,286

22,600
578,674
384,476
129,483
254,993 $

2003
900,256 $
481,145 $
19,048
430,624

(11,513)
553,425
327,783
111,905
215,878 $

2002
918,987
499,225
28,318
408,226

11,536
532,976
357,693
124,762
232,931

2006

$ 1,026,994 $
537,530 $
$
20,689
489,464

–
649,197
357,108
112,165
244,943 $

1.90 $
1.90 $
.92 $

2.00
2.00
.85

$
$
$

1.87 $
1.86 $
.75 $

1.53 $
1.53 $
.65 $

1.58
1.58
.575

(Dollars in thousands, except per share data)
Loans and leases excluding

2006

2005

2004

2003

2002

At December 31,

Compound Annual
Growth Rate

1-Year
2006/2005

5-Year
2006/2001

3.1%
3.8
141.0
4.7

(100.0)
7.0
(6.1)
(2.7)
(7.6)

(5.0)
(5.0)
8.2

3.8%
2.2
(.2)
5.7

(100.0)
5.3
1.6
(1.7)
3.4

6.8
7.1
13.0

Compound Annual
Growth Rate

1-Year
2006/2005

5-Year
2006/2001

residential real estate loans

$10,705,890 $ 9,442,772 $ 8,404,404 $ 7,156,697 $ 6,340,482

13.4%

14.2%

Securities available for sale
Residential real estate loans

Subtotal
Total assets
Checking, savings and money

market deposits
Certificates of deposit
Total deposits

Borrowings
Stockholders’ equity
Book value per common share

Key Ratios and Other Data:

1,816,126
627,790
2,443,916
14,669,734

1,648,615
770,441
2,419,056
13,388,594

1,619,941
1,014,166
2,634,107
12,376,965

1,533,288
1,212,643
2,745,931
11,344,737

2,426,794
1,800,344
4,227,138
12,225,758

7,285,615
2,483,635
9,769,250
3,588,540
1,033,374

7,213,735
1,915,620
9,129,355
2,983,136
998,472

6,525,458
1,468,650
7,994,108
3,104,603
958,418

6,021,189
1,612,123
7,633,312
2,414,825
920,858

7.92 $

7.46 $

6.99 $

6.53 $

5,810,930
1,918,755
7,729,685
3,110,295
977,020
6.61

10.2
(18.5)
1.0
9.6

1.0
29.7
7.0
20.3
3.5
6.2

Return on average assets
Return on average equity
Average total equity to average assets
Net interest margin (1)
Net charge-offs as a percentage of average loans and leases:
Common dividend payout ratio
Number of:

Banking locations
Deposit accounts (in thousands)

(1) Net interest income divided by average interest-earning assets.

TCF Financial Corporation and Subsidiaries

2006
1.74%
24.37
7.15
4.16
.17
48.42%

453
2,427

At or For the Year Ended December 31,
2004
2005
2.15%
2.08%
27.02
28.03
7.94
7.43
4.54
4.46
.20
.29
40.32%
42.50%

2003
1.85%
23.05
8.03
4.54
.24
42.48%

453
2,296

430
2,216

401
2,150

2.8
(25.5)
(10.8)
5.2

8.8
1.4
6.6
3.5
2.4
5.9

2002
2.01%
25.38
7.91
4.71
.32
36.39%

395
2,067

Item 7. Management’s Discussion
and Analysis of Financial Condition
and Results of Operations

Table of Contents

Overview
Results of Operations

Performance Summary
Operating Segment Results

Consolidated Income Statement Analysis

Net Interest Income
Provision for Credit Losses
Non-Interest Income
Non-Interest Expense
Income Taxes

Consolidated Financial Condition Analysis

Securities Available for Sale
Loans and Leases
Allowance for Loan and Lease Losses
Non-Performing Assets
Past Due Loans and Leases
Potential Problem Loans and Leases
Liquidity Management
Deposits
Branches
Borrowings
Contractual Obligations and Commitments
Stockholders’ Equity

Summary of Critical Accounting Estimates
Recent Accounting Developments
Fourth Quarter Summary
Legislative, Legal and Regulatory Developments
Forward-Looking Information

Page
17
18
18
19
19
19
23
23
26
27
27
27
28
31
34
35
35
36
36
37
37
38
39
39
39
39
40
40

Management’s discussion and analysis of the consolidated
financial condition and results of operations of TCF Financial
Corporation (“TCF” or the “Company”) should be read in
conjunction with the consolidated financial statements in
Item 8 and selected financial data in Item 6.

Overview
TCF, a Delaware corporation, is a financial holding company
based in Wayzata, Minnesota. Its principal subsidiaries, TCF
National Bank and TCF National Bank Arizona, collectively “TCF
Bank,” are headquartered in Minnesota and Arizona and had
453 banking offices in Minnesota, Illinois, Michigan, Colorado,
Wisconsin, Indiana and Arizona at December 31, 2006.

TCF provides convenient financial services through
multiple channels in its primary banking markets. 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 branches,
automated teller machine (“ATM”) networks and telephone
and internet banking. TCF’s philosophy is to generate inter-
est income, fees and other revenue growth through business
lines that emphasize higher yielding assets and low 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 include retail banking; commercial
banking; small business banking; consumer lending; leasing
and equipment finance; and investments and insurance serv-
ices. The retail banking business includes traditional and
supermarket branches, campus banking, EXPRESS TELLER
ATMs and Visa U.S.A. Inc. (“Visa”) cards.

TCF emphasizes the checking account as its anchor
account, which provides opportunities to cross-sell other
convenient products and services and generate additional
fee income. The continued growth of deposit accounts is
a significant part of TCF’s growth strategy. Total deposit
accounts were 2,426,616, 2,296,199 and 2,216,013 at
December 31, 2006, December 31, 2005 and December 31,
2004, respectively.

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 two to three years of operations before they become
profitable, and therefore the level and timing of new branch
expansion can have a significant impact on TCF’s profitabil-
ity. TCF’s growth in checking accounts is primarily occurring
in new branches with growth in mature branches being slower.
TCF’s expansion is dependent on the continued long-term
success and viability of branch banking.

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

2006 Form 10-K

and lines of credit secured by residential real estate proper-
ties. The leasing and equipment finance businesses consist
of TCF Equipment Finance, Inc. (“TCF Equipment Finance”),
a company that delivers equipment finance solutions to
businesses in select markets, and Winthrop Resources
Corporation (“Winthrop Resources”), a leasing company
that primarily leases technology and data processing
equipment. TCF’s leasing and equipment finance businesses
operate in all 50 states and have equipment installations
domestically and, to a limited extent, in foreign countries.
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, which is 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, securities available for
sale, investments and other interest-earning assets and
interest paid on deposits and borrowings, represented 52.3%
of TCF’s total revenue in 2006. 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.

During 2006, TCF’s net interest margin declined to 4.16%
from 4.46% in 2005 and 4.54% in 2004. The declines in 2006
and 2005 were primarily due to customer preference for
lower-yielding fixed-rate loans and higher-cost market-rate
deposits largely due to a flat or inverted yield curve and
higher borrowing costs. In addition, intense price competition
on loans and deposits has contributed to the compression of
the net interest margin in 2006 and 2005. See “Quantitative
and Qualitative Disclosures About Market Risk” for further
discussion on TCF’s interest-rate risk position.

Non-interest income is a significant source of revenue
for TCF and an important factor in TCF’s results of operations.
A key driver of non-interest income is its number of checking
accounts and the related transaction activity. Increasing
fee and service charge revenues has been challenging as a
result of slower growth in deposit accounts and changing
customer behaviors. TCF is focusing on deposit account
growth to increase future fee revenue. See “Management’s
Discussion and Analysis of Financial Condition and Results
of Operations – Consolidated Income Statement Analysis –
Non-Interest Income” for additional information.

The Company’s Visa debit card program has grown signifi-

cantly since its inception in 1996. TCF is the 13 th largest
issuer of Visa Classic debit cards in the United States, based
on sales volume for the three months ended September 30,
2006 as published by Visa. TCF earns interchange revenue
from customer debit card transactions.

The following portions of the Management’s Discussion
and Analysis of Financial Condition and Results of Operations
focus in more detail on the results of operations for 2006,
2005 and 2004 and on information about TCF’s balance
sheet, credit quality, liquidity funding resources, capital
and other matters.

Results of Operations
Performance Summary TCF reported diluted earnings
per common share of $1.90 for 2006, compared with $2.00
for 2005 and $1.86 for 2004. Net income was $244.9 million
for 2006, compared with $265.1 million for 2005 and $255
million for 2004. For 2006, net income included $5.8 million
in pre-tax gains on sales of buildings and mortgage servicing
rights and $6.1 million of reductions of income tax expense
for a combined after-tax impact of eight cents per diluted
share. For 2005, net income included $24.3 million in pre-tax
gains on sales of buildings and mortgage-backed securities,
a $3.3 million pre-tax commercial loan recovery and $14 mil-
lion of reductions in income tax expense for a combined
after-tax impact of 25 cents per diluted share. Return on
average assets was 1.74% in 2006, compared with 2.08% in
2005 and 2.15% in 2004. Return on average common equity
was 24.37% in 2006, compared with 28.03% in 2005 and
27.02% in 2004. The effective income tax rate for 2006 was
31.41%, compared with 30.30% in 2005 and 33.68% in 2004.

TCF Financial Corporation and Subsidiaries

Operating Segment Results BANKING, consisting of
deposits and investment products, commercial banking,
small business banking, consumer lending and treasury
services, reported net income of $208.4 million for 2006,
down 9.3% from $229.9 million in 2005. Banking net interest
income for 2006 was $477.5 million, up 4.8% from $455.5
million for 2005. The provision for credit losses totaled $18.1
million in 2006, up from $4.6 million in 2005. This increase
was primarily due to a $3.3 million recovery in 2005 and
higher levels of consumer lending net charge-offs in 2006.
Non-interest income totaled $428.4 million in 2006, up

from $425 million in 2005. Fees and service charges were
$270.2 million for 2006, up 2.9% from $262.6 million in
2005, primarily due to the growth in deposit accounts, par-
tially offset by lower customer check volumes. Card
revenues, primarily interchange fees, increased 15.4% in
2006 and 25.7% in 2005, which was primarily attributable
to an increase in active accounts and customer transaction
volumes. During 2006, TCF sold two branch buildings and
one land parcel and recognized gains of $4.2 million. During
2005, TCF sold several buildings and one branch including
its deposits resulting in total gains of $13.6 million. During
2005, TCF sold mortgage-backed securities and realized
gains of $10.7 million. There were no such sales in 2006. See
“Consolidated Income Statement Analysis – Non-Interest
Income” for further discussion on the sales of mortgage-
backed securities.

Non-interest expense totaled $585.5 million in 2006,
up 6.5% from $549.6 million in 2005. The increase was
primarily due to compensation and benefits and occupancy
costs associated with branch expansion and increases in
card processing and issuance expenses related to the over-
all increase in card volumes. Also contributing to the increase
was an increase in net real estate expense due to increased
losses on foreclosed properties.

LEASING AND EQUIPMENT FINANCE, an operating segment
composed of TCF’s wholly-owned subsidiaries TCF Equipment
Finance and Winthrop Resources, provides a broad range

of comprehensive lease and equipment finance products.
Leasing and Equipment Finance reported net income of
$33.4 million for 2006, unchanged from 2005. Net interest
income for 2006 was $58.7 million, up 2.9% from $57 million
in 2005. The provision for credit losses for this operating
segment totaled $2.6 million in 2006, down from $4 million in
2005 and $6.8 million in 2004. The decrease in the provision
for credit losses from 2005 to 2006 was primarily related to
lower levels of net charge-offs, lower trends in historical
net charge-offs as well as lower specific reserves for
individual credits in certain marketing segments being
reflected in the estimate of inherent losses in the portfolio.
Non-interest income, primarily leasing revenues, totaled
$53 million in 2006, up $5.5 million from $47.5 million in
2005. The increase in leasing and equipment finance rev-
enues for 2006, compared with 2005, was primarily due to
higher operating lease revenues, partially offset by lower
sales-type lease revenues. Leasing and equipment finance
revenues may fluctuate from period to period based on
customer-driven factors not entirely within the control of
TCF. Non-interest expense totaled $56.9 million in 2006,
up $8.3 million from $48.6 million in 2005 primarily related
to an increase in operating lease depreciation from 2005.

Consolidated Income Statement Analysis
Net Interest Income Net interest income, the difference
between interest earned on loans and leases, securities
available for sale, investments and other interest-earning
assets (interest income), and interest paid on deposits and
borrowings (interest expense), represented 52.3% of TCF’s
total revenue in 2006, 52% in 2005 and 50.1% in 2004. Net
interest income divided by average interest-earning assets
is referred to as the net interest margin, expressed as a
percentage. Net interest income and net interest margin
are affected by changes in interest rates, loan and deposit
pricing strategies and competitive conditions, the volume
and the mix of interest-earning assets and interest-bearing
liabilities, and the level of non-performing assets.

2006 Form 10-K

The following tables summarize TCF’s average balances, interest, dividends and yields and rates on major categories of

TCF’s interest-earning assets and interest-bearing liabilities.

Year Ended
December 31, 2006

Year Ended
December 31, 2005

Average
Yields
and
Interest(1) Rates

Average
Balance

Average
Yields
and
Interest(1) Rates

Average
Balance

Change

Average
Yields
and
Rates
Interest(1) (bps)

78,511
1,833,359
210,992

$ 3,504
98,035
15,009

4.46%
5.35
7.11

95,349
1,569,808
214,588

$ 3,450
81,479
10,921

3.62%
5.19
5.09

(16,838)
263,551
(3,596)

54
16,556
4,088

84
16
202

263,157
143,576
3,717
410,450

105,089
55,239
160,328

8,471
27,619
36,090
122,292
729,160
40,430
769,590
886,138

6.83
8.65
10.13
7.40

6.31
7.65
6.72

6.30
7.39
7.10
7.37
7.22
5.81
7.13
6.86

31,539
2,017
33,556
37,275
12,797
50,072
15,216
98,844
96,480
195,324
195,324

30,041
123,243
153,284
348,608
348,608

3.15
.23
1.80
4.15
.93
2.20
2.45
2.08
4.21
2.77
2.08

5.03
4.48
4.58
3.35
2.73

3,851,117
1,659,544
36,711
5,547,372

1,665,531
721,871
2,387,402

134,560
373,690
508,250
1,659,807
10,102,831
696,086
10,798,917
12,921,779
1,141,934
$14,063,713

$ 1,513,121
609,907
232,725
2,355,753

1,001,024
864,316
1,865,340
899,067
1,376,182
2,275,249
620,844
4,761,433
2,291,002
7,052,435
9,408,188

596,852
2,752,847
3,349,699
10,402,134
12,757,887
300,930
13,058,817
1,004,896

2,304,340
2,450,634
34,763
4,789,737

1,385,905
826,934
2,212,839

85,390
340,314
425,704
1,423,264
8,851,544
885,735
9,737,279
11,617,024
1,113,850
$12,730,874

$ 1,548,027
585,860
311,497
2,445,384

641,672
1,026,017
1,667,689
427,070
1,558,423
1,985,493
640,576
4,293,758
1,740,440
6,034,198
8,479,582

917,665
2,038,561
2,956,226
8,990,424
11,435,808
349,216
11,785,024
945,850

154,241
171,133
3,213
328,587

85,214
49,561
134,775

4,959
19,575
24,534
97,596
585,492
50,680
636,172
732,022

15,910
2,067
17,977
13,246
9,419
22,665
7,640
48,282
49,124
97,406
97,406

29,830
87,096
116,926
214,332
214,332

6.69
6.98
9.24
6.86

6.15
5.99
6.09

5.81
5.75
5.76
6.86
6.61
5.72
6.53
6.30

2.48
.20
1.08
3.10
.60
1.14
1.19
1.12
2.82
1.61
1.15

3.25
4.27
3.96
2.38
1.87

1,546,777
(791,090)
1,948
757,635

279,626
(105,063)
174,563

49,170
33,376
82,546
236,543
1,251,287
(189,649)
1,061,638
1,304,755
28,084
$1,332,839

(34,906)
24,047
(78,772)
(89,631)

359,352
(161,701)
197,651
471,997
(182,241)
289,756
(19,732)
467,675
550,562
1,018,237
928,606

(320,813)
714,286
393,473
1,411,710
1,322,079
(48,286)
1,273,793
59,046

108,916
(27,557)
504
81,863

19,875
5,678
25,553

3,512
8,044
11,556
24,696
143,668
(10,250)
133,418
154,116

15,629
(50)
15,579
24,029
3,378
27,407
7,576
50,562
47,356
97,918
97,918

211
36,147
36,358
134,276
134,276

14
167
89
54

16
166
63

49
164
134
51
61
9
60
56

67
3
72
105
33
106
126
96
139
116
93

178
21
62
97
86

(Dollars in thousands)
Assets:
Investments
Securities available for sale (2)
Education loans held for sale
Loans and leases:

Consumer home equity:

Fixed-rate
Variable-rate
Consumer – other

Total consumer home equity and other

Commercial real estate:

Fixed- and adjustable-rate
Variable-rate
Total commercial real estate

Commercial business:

Fixed- and adjustable-rate
Variable-rate
Total commercial business
Leasing and equipment finance

Subtotal

Residential real estate

Total loans and leases(3)

Total interest-earning assets

Other assets (4) (5)

Total assets

Liabilities and Stockholders’ Equity:
Non-interest bearing deposits:

Retail
Small business
Commercial and custodial

Total non-interest bearing deposits

Interest-bearing deposits:
Premier checking
Other checking
Subtotal
Premier savings
Other savings
Subtotal
Money market
Subtotal

Certificates of deposit

Total interest-bearing deposits

Total deposits

Borrowings:

Short-term borrowings
Long-term borrowings
Total borrowings

Total interest-bearing liabilities

Total deposits and borrowings

Other liabilities(5)

Total liabilities
Stockholders’ equity(5)

Total liabilities and stockholders’

equity
Net interest income and margin
bps = basis points.
(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

$14,063,713

$12,730,874

$1,332,839

$ 19,840

$537,530

$517,690

4.16%

4.46%

(30)

income of $1,209,000 and $954,000 was recognized during the years ended December 31, 2006 and 2005, respectively.

(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.
(4) Includes operating leases.
(5) Average balance is a simple average of month-end balances.

TCF Financial Corporation and Subsidiaries

Year Ended
December 31, 2005

Year Ended
December 31, 2004

Average
Yields
and
Interest (1) Rates

Average
Balance

Average
Yields
and
Interest (1) Rates

Average
Balance

Change

Average
Yields
and
Rates
Interest(1) (bps)

95,349
1,569,808
214,588

$ 3,450
81,479
10,921

3.62%
5.19
5.09

124,833
1,536,673
331,529

3,455
80,643
11,533

2.77%
5.25
3.48

$ (29,484)
33,135
(116,941)

(5)
836
(612)

154,241
171,133
3,213
328,587

85,214
49,561
134,775

4,959
19,575
24,534
97,596
585,492
50,680
636,172
732,022

15,910
2,067
17,977
13,246
9,419
22,665
7,640
48,282
49,124
97,406
97,406

29,830
87,096
116,926
214,332
214,332

6.69
6.98
9.24
6.86

6.15
5.99
6.09

5.81
5.75
5.76
6.86
6.61
5.72
6.53
6.30

2.48
.20
1.08
3.10
.60
1.14
1.19
1.12
2.82
1.61
1.15

3.25
4.27
3.96
2.38
1.87

2,304,340
2,450,634
34,763
4,789,737

1,385,905
826,934
2,212,839

85,390
340,314
425,704
1,423,264
8,851,544
885,735
9,737,279
11,617,024
1,113,850
$12,730,874

$ 1,548,027
585,860
311,497
2,445,384

641,672
1,026,017
1,667,689
427,070
1,558,423
1,985,493
640,576
4,293,758
1,740,440
6,034,198
8,479,582

917,665
2,038,561
2,956,226
8,990,424
11,435,808
349,216
11,785,024
945,850

104,494
137,735
3,210
245,439

77,187
33,259
110,446

4,754
13,815
18,569
89,364
463,818
63,360
527,178
622,809

2,892
928
3,820
1,705
5,785
7,490
2,992
14,302
28,279
42,581
42,581

12,664
75,673
88,337
130,918
130,918

6.92
5.61
8.20
6.13

6.24
4.31
5.50

5.57
3.99
4.30
6.95
6.00
5.73
5.97
5.75

1.46
.08
.29
1.99
.33
.41
.39
.36
1.89
.79
.55

1.57
3.81
3.16
1.59
1.24

1,509,055
2,457,343
39,161
4,005,559

1,237,634
771,309
2,008,943

85,382
346,411
431,793
1,285,925
7,732,220
1,104,814
8,837,034
10,830,069
1,056,903
$11,886,972

$ 1,504,392
508,162
342,446
2,355,000

198,651
1,140,242
1,338,893
85,478
1,738,374
1,823,852
763,925
3,926,670
1,493,938
5,420,608
7,775,608

809,106
1,984,069
2,793,175
8,213,783
10,568,783
374,409
10,943,192
943,780

49,747
33,398
3
83,148

8,027
16,302
24,329

205
5,760
5,965
8,232
121,674
(12,680)
108,994
109,213

13,018
1,139
14,157
11,541
3,634
15,175
4,648
33,980
20,845
54,825
54,825

17,166
11,423
28,589
83,414
83,414

795,285
(6,709)
(4,398)
784,178

148,271
55,625
203,896

8
(6,097)
(6,089)
137,339
1,119,324
(219,079)
900,245
786,955
56,947
$ 843,902

43,635
77,698
(30,949)
90,384

443,021
(114,225)
328,796
341,592
(179,951)
161,641
(123,349)
367,088
246,502
613,590
703,974

108,559
54,492
163,051
776,641
867,025
(25,193)
841,832
2,070

85
(6)
161

(23)
137
104
73

(9)
168
59

24
176
146
(9)
61
(1)
56
55

102
12
79
111
27
73
80
76
93
82
60

168
46
80
79
63

(Dollars in thousands)

Assets:
Investments
Securities available for sale (2)
Education loans held for sale
Loans and leases:

Consumer home equity:

Fixed-rate
Variable-rate
Consumer – other

Total consumer home equity and other

Commercial real estate:

Fixed- and adjustable-rate
Variable-rate
Total commercial real estate

Commercial business:

Fixed- and adjustable-rate
Variable-rate
Total commercial business
Leasing and equipment finance

Subtotal

Residential real estate

Total loans and leases (3)

Total interest-earning assets

Other assets(4) (5)

Total assets

Liabilities and Stockholders’ Equity:
Non-interest bearing deposits:

Retail
Small business
Commercial and custodial

Total non-interest bearing deposits

Interest-bearing deposits:
Premier checking
Other checking
Subtotal
Premier savings
Other savings
Subtotal
Money market
Subtotal

Certificates of deposit

Total interest-bearing deposits

Total deposits

Borrowings:

Short-term borrowings
Long-term borrowings
Total borrowings

Total interest-bearing liabilities

Total deposits and borrowings

Other liabilities (5)

Total liabilities
Stockholders’ equity (5)

Total liabilities and stockholders’

$11,886,972

$12,730,874

$ 843,902

$517,690

$ 25,799

$491,891

4.54%

4.46%

(8)

income of $954,000 and $638,000 was recognized during the years ended December 31, 2005 and 2004, respectively.

2006 Form 10-K

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

Year Ended
December 31, 2006
Versus Same Period in 2005
Increase (Decrease) Due to

Year Ended
December 31, 2005
Versus Same Period in 2004
Increase (Decrease) Due to

(In thousands)
Interest income:
Investments
Securities available for sale
Education loans held for sale
Loans and leases:

Consumer home equity:

Fixed-rate
Variable-rate
Consumer – other
Commercial real estate:

Fixed- and adjustable-rate
Variable-rate
Commercial business:

Fixed- and adjustable-rate
Variable-rate

Leasing and equipment finance
Residential real estate

Total loans and leases

Total interest income
Interest expense:

Premier checking
Other checking
Premier savings
Other savings
Money market
Certificates of deposit
Borrowings:

Short-term borrowings
Long-term borrowings
Total borrowings

Total interest expense
Net interest income

Volume (1)

Rate (1)

Total

Volume (1)

Rate (1)

(670)
14,030
(186)

724
2,526
4,274

54
16,556
4,088

(925)
1,726
(4,882)

920
(890)
4,270

105,630
(62,828)
186

17,592
(6,845)

3,065
2,060
17,054
(11,004)
72,801
86,280

10,536
(351)
18,418
(1,207)
(242)
18,551

(12,654)
31,802
16,684
27,080
55,662

3,286
35,271
318

2,283
12,523

447
5,984
7,642
754
60,617
67,836

5,093
301
5,611
4,585
7,818
28,805

12,865
4,345
19,674
107,196
(35,822)

108,916
(27,557)
504

19,875
5,678

3,512
8,044
24,696
(10,250)
133,418
154,116

15,629
(50)
24,029
3,378
7,576
47,356

211
36,147
36,358
134,276
19,840

53,341
(377)
(382)

9,321
2,545

–
(247)
9,432
(12,535)
57,215
47,125

9,898
(102)
10,134
(654)
(555)
5,250

1,902
2,124
5,401
11,503
35,183

(3,594)
33,775
385

(1,294)
13,757

205
6,007
(1,200)
(145)
51,779
62,088

3,120
1,241
1,407
4,288
5,203
15,595

15,264
9,299
23,188
71,911
(9,384)

Total

(5)
836
(612)

49,747
33,398
3

8,027
16,302

205
5,760
8,232
(12,680)
108,994
109,213

13,018
1,139
11,541
3,634
4,648
20,845

17,166
11,423
28,589
83,414
25,799

(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

due to volume and rate are calculated independently for each line item presented.

Achieving net interest income growth over time is prima-

rily dependent on TCF’s ability to generate higher-yielding
assets and lower-cost deposits. While interest rates and
customer preferences continue to change over time, TCF
is relatively balanced from an interest rate gap measure

(difference between interest-earning assets and interest-
bearing liabilities maturing, repricing, or prepaying during
the next twelve months). If interest rates remain at current
levels, TCF could experience continued compression of its
net interest margin primarily due to the ongoing shift of

TCF Financial Corporation and Subsidiaries
TCF Financial Corporation and Subsidiaries

higher yielding variable-rate loans to lower yielding fixed-
rate loans due largely to the flat or inverted yield curve
and due to competitive pressures on deposit product pricing.
See “Consolidated Financial Condition Analysis – Deposits”
and “Quantitative and Qualitative Disclosures about
Market Risk” for further discussion on TCF’s interest-rate
risk position.

Net interest income was $537.5 million for 2006, up 3.8%

from $517.7 million in 2005. The increase in net interest
income in 2006 primarily reflects the growth in average
interest-earning assets, up $1.3 billion over 2005, partially
offset by the 30 basis point reduction in net interest mar-
gin. The decrease in the net interest margin, from 4.46% in
2005 to 4.16% in 2006, is primarily due to customer prefer-
ence for lower-yielding fixed-rate loans and higher-cost
market-rate deposits largely due to the flat or inverted
yield curve and higher borrowing costs. In addition, intense
price competition on loans and deposits has contributed to
the compression of the net interest margin in 2006 and 2005.
Net interest income was $517.7 million in 2005, up from
$491.9 million in 2004. The increase in net interest income
primarily reflected the growth in average consumer, com-
mercial and leasing and equipment finance balances, up
$1.1 billion over 2004, partially offset by higher funding
costs. The decrease in the net interest margin, is primarily
due to the rates on interest-bearing liabilities increasing
more than the yields on interest-earning assets as a result
of increased deposits with higher rates and increased
fixed-rate consumer loans with yields lower than variable-
rate loans. TCF’s benefit from the rising short-term interest
rates, and the related increase in yields on variable-rate
loans, was more than offset by the impact of a flattening
yield curve, making fixed-rate loans more attractive to
customers, and changes in the funding mix as the majority of
deposit growth in 2005 was in higher interest cost products.

Provision for Credit Losses TCF provided $20.7 million
for credit losses in 2006, compared with $8.6 million in 2005
and $18.6 million in 2004. The increase in provision from
2005 was primarily due to a $3.3 million commercial business

loan recovery in 2005, increased losses in the consumer
lending portfolio in 2006, and a $1.1 billion increase in total
loans and leases partially offset by overall improved credit
quality in the leasing portfolio. The decrease in the provision
for 2005, compared with 2004 was primarily due to improved
credit quality and a $3.3 million commercial business loan
recovery in 2005.

Net loan and lease charge-offs were $18 million, or
.17% of average loans and leases in 2006, down from $28.2
million, or .29% of average loans and leases in 2005 and
$17.5 million, or .20% of average loans and leases in 2004.
Excluding the charge-off of an $18.8 million investment in
a leveraged lease, 2005 net charge-offs were $9.4 million
or .10% of average loans and leases.

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 historical trends in net charge-offs, delin-
quencies 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.”

Non-Interest Income Non-interest income is a signifi-
cant source of revenue for TCF, representing 47.7% of total
revenues in 2006, 48% in 2005 and 49.9% in 2004, 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 gen-
erating additional non-interest income. Total non-interest
income was $489.5 million for 2006, up from $478.2 million
in 2005 and down slightly from $489.9 million in 2004. The
number of deposit accounts totaled 2,426,616 accounts
at December 31, 2006, up 5.7% from 2,296,199 accounts
at December 31, 2005 which were up 3.6% from 2,216,013
accounts at December 31, 2004.

2006 Form 10-K

The following table presents the components of non-interest income.

(Dollars in thousands)
Fees and service charges
Card revenue
ATM revenue
Investments and insurance revenue

Subtotal

Leasing and equipment finance
Other

Fees and other revenue

Gains on sales of securities

available for sale

Losses on termination of debt

Total non-interest income

Fees and other revenue
as a percentage of:
Total revenue
Average assets

Year Ended December 31,

2006
$270,166
92,084
37,760
10,695
410,705
53,004
25,755
489,464

–
–
$489,464

2005
$262,636
79,803
40,730
10,665
393,834
47,387
26,350
467,571

10,671
–
$478,242

2004
$275,120
63,463
42,935
12,558
394,076
50,323
22,887
467,286

22,600
–
$489,886

2003
$249,339
52,991
43,623
13,901
359,854
51,088
19,682
430,624

32,832
(44,345)
$419,111

2002
$228,121
47,190
45,296
15,848
336,455
51,628
20,143
408,226

11,536
–
$419,762

Compound Annual
Growth Rate

1-Year
2006/2005

5-Year
2006/2001

2.9%
15.4
(7.3)
.3
4.3
11.9
(2.3)
4.7

6.3%
17.8
(3.8)
(1.5)
6.7
3.0
(1.9)
5.7

(100.0)
–
2.3

(100.0)
–
5.7

47.66%
3.48

46.95%
3.67

47.60%
3.93

47.83%
3.69

44.42%
3.51

Fees and Service Charges Fees and service charges
increased $7.5 million, or 2.9%, to $270.2 million for 2006,
compared with $262.6 million for 2005. The increase is prima-
rily due to growth in deposit accounts. During 2005, fees
and service charges decreased $12.5 million, or 4.5% to
$262.6 million, compared with $275.1 million for 2004. This
decrease primarily reflects a decrease in deposit account
service fees, attributable to changing customer behavior
and payment trends.

Card Revenue During 2006, card revenue, primarily inter-
change fees, totaled $92.1 million, up from $79.8 million in
2005 and $63.5 million in 2004. The increases in card revenue
in 2006 and 2005 were primarily attributable to increases in

active accounts and customer transaction volumes. The con-
tinued success of TCF’s debit card program is highly depend-
ent on the success and viability of Visa and the continued
use by customers and acceptance by merchants of its debit
and credit cards. See “Item 1A. Risk Factors – Operational
Risk Management” for further discussion of Visa litigation.

ATM Revenue ATM revenue totaled $37.8 million for 2006,
down from $40.7 million in 2005 and $42.9 million in 2004.
The declines in ATM revenue were primarily attributable to
the continued declines in fees charged to TCF customers for
use of non-TCF ATM machines due to expansion of TCF’s ATM
network and growth in TCF’s fee free checking products, par-
tially offset by the increased number of TCF customers.

The following table sets forth information about TCF’s card business.

(Dollars in thousands)
Average number of checking accounts with a TCF card
Active card users
Average number of transactions per month
Sales volume for the year ended:

Off-line (Signature)
On-line (PIN)
Total

Percentage off-line

Average off-line interchange rate

At or For the Year Ended December 31,

Percentage Increase (Decrease)

2006
1,463,456
804,194
16.4

2005
1,406,728
763,157
15.2

2004
1,323,877
710,893
13.5

$5,711,751
752,770
$6,464,521
88.36%
1.45%

$5,030,619
642,446
$5,673,065

$4,197,678
537,124
$4,734,802

88.68%
1.43%

88.66%
1.40%

2006/2005

2005/2004

4.0%
5.4
7.9

13.5
17.2
14.0
(.4)
1.4

6.3%
7.4
12.6

19.8
19.6
19.8
–
2.1

TCF Financial Corporation and Subsidiaries

Investments and Insurance Revenue Investments
and insurance revenue, consisting principally of commissions
on sales of annuities and mutual funds, increased $30
thousand in 2006. Annuity and mutual fund sales volumes
totaled $203.7 million for the year ended December 31, 2006,
compared with $188.2 million during 2005. The average com-
mission percentage earned on sales of annuities and mutual
funds declined in 2006 as compared to 2005 and 2004 as a
result of a higher sales of mutual funds, that generally carry a
lower commission rate than annuities, and due to a reduction
in the market commission rates paid on sales of annuities.
Investments and insurance revenue decreased $1.9 million
in 2005 from 2004. Annuity and mutual fund sales volumes
totaled $188.2 million for the year ended December 31, 2005
compared with $212.2 million during 2004. The increased
sales volumes during 2006 were the result of increased sales
of mutual funds resulting from additional marketing focus
and market conditions. Sales of fixed annuity products also
increased slightly as market conditions were favorable for
a portion of the year. Increases in sales were partially offset
by lower commission rates paid by carriers. Sales of insur-
ance and investment products may fluctuate from period
to period, and future sales levels will depend upon general
economic conditions and investor preferences. Sales of
annuities will also depend upon their continued tax advan-
tage and may be impacted by the level of interest rates and
alternative investment products.

Leasing and Equipment Finance Revenue Leasing
and equipment finance revenues in 2006 increased $5.6
million, or 11.9%, from 2005. The increase in leasing and
equipment finance revenues for 2006 was primarily driven
by a $8.5 million increase in operating lease revenues,
partially offset by a decrease of $3.7 million in sales-type
lease revenues. The increase in operating lease revenues

was primarily driven by a $39.7 million increase in average
operating lease balances. Leasing and equipment finance
revenues decreased $2.9 million, or 5.8%, in 2005 compared
to 2004, primarily due to a decline in sales-type lease
revenues of $10 million, partially offset by a $6.5 million
increase in operating lease revenues. Sales-type lease rev-
enues generally occur at or near the end of the lease term
as customers extend the lease or purchase the underlying
equipment. Leasing and equipment finance revenues may
fluctuate from period to period based on customer-driven
factors not within the control of TCF.

Other Non-Interest Income Other non-interest income
primarily consists of gains on sales of buildings and branches,
mortgage banking revenue, gains on sales of education
loans, and other miscellaneous income. Total other non-
interest income in 2006 decreased $595 thousand from
2005 compared with an increase of $3.5 million in 2005 over
2004. The decrease in 2006 was due to a decrease in the
gains on sales of buildings and branches. In 2005, TCF sold
several buildings and one branch including deposits, com-
pared with two buildings and one land parcel sold in 2006.
Also contributing to the decrease in 2006 was a decline in
mortgage servicing revenue compared with 2005 due to the
sale of mortgage servicing rights in the first quarter of 2006.
These decreases were offset by the increases in gains on
sales of education loans, in 2006. The 2006 increase in gains
on sales of education loans was due to the acceleration of
the timing of certain education loan sales due to legislative
changes to student loan programs. The 2005 increase in non-
interest income over 2004 was due to the sale of several
buildings and one branch sale including deposits compared
with no such sales in 2004. This increase for 2005 was offset
by a decrease in mortgage servicing revenue and in gains on
sales of education loans compared with 2004.

The following table presents the components of other non-interest income.

Year Ended December 31,

2006
$ 4,188

4,734
7,224
9,609
$25,755

2005
$13,606

5,578
2,078
5,088
$26,350

2004
$ (181)

12,960
7,789
2,319
$22,887

2003
663

12,719
3,092
3,208
$19,682

2002
$ 3,448

6,979
2,693
7,023
$20,143

Compound Annual
Growth Rate

1-Year
2006/2005

5-Year
2006/2001

(69.2)%

46.0%

(15.1)
N.M.
88.9
(2.3)

(17.0)
21.6
(5.7)
(1.9)

(Dollars in thousands)
Gains (losses) on sales of
buildings and branches

Mortgage banking
Gains on sales of education loans
Other

Total other non-interest income

N.M. Not Meaningful.

2006 Form 10-K

Gains on Sales of Securities Available for Sale Gains on securities available for sale of $10.7 million and $22.6 mil-
lion were recognized on the sales of $1 billion and $1.4 billion in mortgage-backed securities in 2005 and 2004, respectively.
There were no sales of securities available for sale in 2006.

Non-Interest Expense Non-interest expense increased $42.3 million, or 7%, in 2006, and $28.3 million, or 4.9%, in 2005.
The following table presents the components of non-interest expense.

Year Ended December 31,

(Dollars in thousands)
Compensation
Employee benefits and payroll taxes

Total compensation and
employee benefits
Occupancy and equipment
Advertising and promotions
Operating lease depreciation
Other

Total non-interest expense

2006
$286,722
55,135

341,857
114,618
26,926
14,347
151,449
$649,197

2005
$274,523
52,003

326,526
103,900
25,691
7,335
143,484
$606,936

2004
$273,083
49,741

322,824
95,617
26,353
1,843
132,037
$578,674

2003
$256,447
46,357

302,804
88,423
25,536
3,320
133,342
$553,425

2002
$254,341
39,954

294,295
83,131
21,894
3,241
130,415
$532,976

Compound Annual
Growth Rate

1-Year
2006/2005

5-Year
2006/2001

4.4%
6.0

4.7
10.3
4.8
95.6
5.6
7.0

4.1%
11.0

5.1
7.8
5.2
27.3
2.9
5.3

Compensation and Employee Benefits Compensation
and employee benefits, representing 52.7%, 53.8% and 55.8%
of total non-interest expense in 2006, 2005 and 2004, respec-
tively, increased $15.3 million, or 4.7%, in 2006, and $3.7
million, or 1.1%, in 2005. The $12.2 million increase in com-
pensation expense from 2005 was primarily due to a $11.5
million increase in the banking segment of which $6.6 million
was attributable to branch expansion. The 2005 increase in
compensation expense of $1.4 million was primarily due to
continued branch expansion, partially offset by decreases
in mortgage banking and commissions and incentives.

Employee benefits and payroll taxes totaled $55.1 mil-

lion in 2006, up $3.1 million from 2005, primarily due to
an increase of $1.4 million in health care plan expense,
an increase of $849 thousand in payroll tax expense and a
$552 thousand increase in retirement plan expenses. In
2005, employee benefits and payroll expense increased
$2.3 million, primarily due to an increase in retirement ben-
efits expense of $1.9 million and an increase in payroll taxes
of $1.5 million, partially offset by a decrease of $1.8 million
in healthcare plan expenses. See Note 16 of Notes to
Consolidated Financial Statements for further information
on postretirement plans.

Occupancy and Equipment Occupancy and equipment
expenses increased $10.7 million in 2006 and $8.3 million in
2005. These increases were primarily due to costs associated
with branch expansion.

Advertising and Promotions Advertising and promo-
tions expense increased $1.2 million in 2006 following a
decrease of $662 thousand in 2005. The increase in 2006
was primarily due to a $1.4 million increase in promotional
expenses for new customers, partially offset by a $827
thousand decrease in advertising. The decrease in 2005 was
primarily due to a $3.7 million decrease in marketing and
promotions, partially offset by an increase of $2.1 million
in loyalty program expenses.

Operating Lease Depreciation Operating lease
depreciation totaled $14.3 million for 2006, up from $7.3
million and $1.8 million for 2005 and 2004, respectively.
The increase in depreciation was primarily driven by growth
in average operating lease balances.

Other Non-Interest Expense Other non-interest
expense increased $8 million, or 5.6%, in 2006, primarily
driven by a $2.3 million increase in card and internet
processing expenses related to transaction increases and

TCF Financial Corporation and Subsidiaries

a $1.4 million increase in foreclosed real estate expense
primarily due to net losses on sales in 2006 versus net
recoveries in 2005. In 2005, other non-interest expense
increased $11.4 million, or 8.7%, primarily due to increases
in card processing and issuance expenses related to the
overall increase in card volumes and increases in net real
estate expense as a result of net recoveries on sales of fore-
closed properties in 2004.

Income Taxes Income tax expense represented 31.41% of
income before income tax expense during 2006, compared
with 30.30% and 33.68% in 2005 and 2004, respectively.
The 2006 effective income tax rate increased over the 2005
rate primarily due to $6.1 million of reductions in income tax
expense in 2006 for favorable developments involving uncer-
tain tax positions, compared with $14 million of reductions
in income tax expense of 2005. Favorable developments
included the closing of certain previous years’ tax returns,
clarification of existing state tax legislation and favorable
developments in income tax audits. The lower effective
income tax rate in 2005, compared with 2004, was the result
of reductions of income tax expense of $14 million related
to favorable developments involving uncertain tax positions
including the closing of certain previous years’ tax returns,
clarification of existing state legislation and favorable
developments in income tax audits.

TCF has a Real Estate Investment Trust (“REIT”) and a
related foreign operating company (“FOC”) that acquire,
hold and manage real estate loans and other assets. These
companies are consolidated with TCF Bank and are included
in the consolidated financial statements of TCF Financial
Corporation. The REIT and related companies must meet
specific provisions of the Internal Revenue Code and state
tax laws. If these companies fail to meet any of the required
provisions of federal and state tax laws, TCF’s tax expense
could increase. TCF’s FOC operates under laws in certain
states (including Minnesota and Illinois) that allow FOCs.
Use of REITs and FOCs is and has been the subject of federal
and state audits and tax policy debates by various state
legislatures.

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 (tem-
porary 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 assurance 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 interpre-
tations used in determining the current and deferred income
tax liabilities.

In addition, under generally accepted accounting princi-
ples, deferred income tax assets and liabilities are recorded
at the federal and state income tax rates expected to apply
to taxable income in the periods in which the deferred
income tax assets or liabilities are expected to be realized.
If such rates change, deferred income tax assets and liabili-
ties must be adjusted in the period of change through a
charge or credit to income tax expense. Further detail on
income taxes is provided in Note 12 of Notes to Consolidated
Financial Statements.

Consolidated Financial Condition Analysis
Securities Available for Sale Securities available for
sale increased $167.5 million to $1.8 billion at December
31, 2006. This increase reflects purchases of $397.5 million
of mortgage-backed securities, and normal payment and
prepayment activity. At December 31, 2006, the increase
in mortgage-backed securities partially offsets the declines
in residential loans in the treasury services portfolio. TCF’s
securities available for sale portfolio primarily included
fixed-rate mortgage-backed securities. Net unrealized pre-
tax losses on securities available for sale totaled $33.3 mil-
lion at December 31, 2006, compared with net unrealized
pre-tax losses of $33.2 million at December 31, 2005. TCF
may, from time to time, sell mortgage-backed securities
and utilize the proceeds to reduce borrowings, fund growth
in loans and leases and for other corporate purposes.

2006 Form 10-K

Loans and Leases The following tables set forth information about loans and leases held in TCF’s portfolio, excluding loans
held for sale.

(Dollars in thousands)

At December 31,

2006

2005

2004

2003

2002

$ 1,232,315 $ 1,389,741
3,758,947

4,650,353

$1,472,165
2,909,592

$1,093,945
2,493,715

$ 923,773
2,031,531

(11.3)%
23.7

Portfolio Distribution:
Consumer home equity and other:

Home equity:

Lines of credit (1)
Closed-end loans

Total consumer home

equity

5,882,668

5,148,688

4,381,757

3,587,660

2,955,304

Other

62,409

57,587

56,183

62,538

67,996

Total consumer home equity

and other

5,945,077

5,206,275

4,437,940

3,650,198

3,023,300

Commercial real estate
Commercial business

Total commercial

2,390,653
551,995
2,942,648

2,297,500
435,203
2,732,703

Leasing and equipment finance (2)
Residential real estate

Total loans and leases

1,818,165
627,790

1,503,794
770,441
$11,333,680 $10,213,213

2,154,396
436,696
2,591,092

1,375,372
1,014,166
$9,418,570

1,916,701
429,401
2,346,102

1,160,397
1,212,643
$8,369,340

1,835,788
442,354
2,278,142

1,039,040
1,800,344
$8,140,826

(1) Excludes fixed-term amounts under lines of credit which are included in closed-end loans.

(2) Excludes operating leases included in other assets.

(In thousands)

At December 31, 2006

Compound Annual
Growth Rate

1-Year
2006/2005

5-Year
2006/2001

10.6%
22.3

19.2

(1.1)

18.8

8.1
5.5
7.6

13.7
(25.5)
6.6

14.3

8.4

14.2

4.1
26.8
7.7

20.9
(18.5)
11.0

Geographic Distribution:
Minnesota
Illinois
Michigan
Wisconsin
Colorado
California
Florida
Texas
New York
Arizona
Ohio
Indiana
Other

Total

Consumer
Home Equity
and Other
$2,314,953
1,758,734
1,040,758
496,932
271,471
1,954
6,945
530
2,292
8,309
4,272
17,345
20,582
$5,945,077

Commercial
Real Estate
and
Commercial
Business
$ 910,149
613,038
834,758
477,838
15,965
7,107
–
–
10,800
6,238
4,118
8,424
54,213
$2,942,648

Leasing and
Equipment
Finance
70,629
65,023
84,254
38,306
37,159
234,842
142,864
104,689
86,193
74,333
75,008
32,781
772,084
$1,818,165

Residential
Real Estate
$338,803
88,864
165,350
18,987
2,000
–
725
759
69
42
3,094
903
8,194
$627,790

Total
$ 3,634,534
2,525,659
2,125,120
1,032,063
326,595
243,903
150,534
105,978
99,354
88,922
86,492
59,453
855,073
$11,333,680

TCF Financial Corporation and Subsidiaries

Loan and leases outstanding at December 31, 2006 are shown by contractual maturity in the following table.

(In thousands)
Amounts due:

Within 1 year
After 1 year:

1 to 2 years
2 to 3 years
3 to 5 years
5 to 10 years
10 to 15 years
Over 15 years

Total after 1 year

Total

Consumer
Home Equity
and Other

Commercial
Real Estate

At December 31, 2006 (1)
Leasing and
Equipment
Finance

Commercial
Business

Residential
Real Estate

Total Loans
and Leases

$ 333,182

$ 409,263

$245,012

$ 663,224

$ 38,129

$ 1,688,810

319,769
347,068
604,326
1,407,094
850,042
2,083,596
5,611,895
$5,945,077

251,409
233,038
480,368
832,646
173,136
10,793
1,981,390
$2,390,653

98,991
103,642
83,289
16,511
4,550
–
306,983
$551,995

$106,977
200,006
$306,983

437,866
317,768
346,024
53,283
–
–
1,154,941
$1,818,165

$1,154,941
–
$1,154,941

30,423
27,858
57,459
130,703
106,955
236,263
589,661
$627,790

1,138,458
1,029,374
1,571,466
2,440,237
1,134,683
2,330,652
9,644,870
$11,333,680

$489,196
100,465
$589,661

$ 6,632,689
3,012,181
$ 9,644,870

Amounts due after 1 year on:

Fixed-rate loans and leases
Variable- and adjustable-rate loans

Total after 1 year

$4,291,238
1,320,657
$5,611,895

$ 590,337
1,391,053
$1,981,390

(1) Gross of deferred fees and costs. This table does not include the effect of prepayments, which is an important consideration in management’s interest-rate risk analysis.

Company experience indicates that loans and leases remain outstanding for significantly shorter periods than their contractual terms.

Consumer Lending Consumer loans increased $738.8
million from December 31, 2005 to $5.9 billion at December
31, 2006, driven by an increase of $734 million in home equity
loans. TCF’s home equity lines of credit require regular
payments of interest and do not require regular payments of
principal. TCF’s “closed-end” home equity loans require pay-
ments of principal and interest over a fixed term. TCF’s home
equity portfolio does not contain loans with multiple payment
options or loans with “teaser” rates. At December 31, 2006,
25.1% of the home equity portfolio carries a variable interest
rate tied to the prime rate, compared with 38.3% at
December 31, 2005. This decrease is related to a shift in cus-
tomer preferences for fixed-rate loans with lower yields
than current variable-rate loans. Outstanding balances on
home equity credit arrangements were 49.8% of total lines
of credit at December 31, 2006, compared with 51.8% at
December 31, 2005.

At December 31, 2006, the weighted-average loan-to-

value ratio for the home equity line and residential real
estate loan portfolios was 78%, compared with 73% at
December 31, 2005. TCF engages in high loan-to-value lend-
ing (loans with a loan-to-value of 90% or more). TCF’s credit
standards restrict higher loan-to-value ratio loans to only
very creditworthy customers, generally based on credit
scoring models. At December 31, 2006, the amount of

loans with a loan-to-value ratio of 90% or more was
$1.7 billion. However, the amount of these loans that was
secured by the portion of the property value of 90% or
more was $227 million. TCF purchases mortgage insurance
to reduce its risk in high loan-to-value lending. Loans with
over 100% loan-to-value ratios are immaterial and do
not represent a concentration of risk. The average FICO
(Fair Isaac Company) credit score for the home equity
portfolio was 721 and 720 at December 31, 2006 and 2005,
respectively.

Commercial Lending Commercial real estate loans
increased $93.2 million from December 31, 2005 to $2.4 bil-
lion at December 31, 2006. Commercial business loans
increased $116.8 million in 2006 to $552 million at December
31, 2006. TCF continues to expand its commercial business
and commercial real estate lending activity generally to bor-
rowers located in its primary markets. With a focus on secured
lending, approximately 98% of TCF’s commercial real estate
and commercial business loans were secured either by prop-
erties or other business assets at December 31, 2006. At
December 31, 2006 and 2005, the construction and develop-
ment portfolio had no loans over 30-days delinquent.

At December 31, 2006, approximately 98% of TCF’s
commercial real estate loans outstanding were secured by
properties located in its primary markets.

2006 Form 10-K

The following tables summarize TCF’s commercial real estate loan portfolio by property type.

(In thousands)
Retail services
Apartments
Office buildings
Warehouse/industrial buildings
Hotels and motels
Health care facilities
Other

Total

Permanent
$ 537,123
466,397
395,181
297,348
105,737
54,063
346,147
$2,201,996

(Dollars in thousands)
Retail services
Apartments
Office buildings
Warehouse/industrial buildings
Hotels and motels
Health care facilities
Other

Total

Balance
$ 574,691
516,970
405,843
307,723
108,003
54,063
423,360
$2,390,653

At December 31,

2006

Construction
and
Development
$ 37,568
50,573
10,662
10,375
2,266
–
77,213
$188,657

Total
$ 574,691
516,970
405,843
307,723
108,003
54,063
423,360
$2,390,653

2005

Construction
and
Development
$ 33,591
10,065
3,665
2,635
14,840
–
114,751
$179,547

Permanent
$ 490,100
517,989
405,574
268,562
110,975
53,650
271,103
$2,117,953

At December 31,

2006

Number
of Loans
437
651
271
274
39
16
289
1,977

Over 30-Day
Delinquency
Rate as a
Percentage of
Balance

.03%
.02
–
–
–
–
4.23
.76%

Balance
$ 523,691
528,054
409,239
271,197
125,815
53,650
385,854
$2,297,500

2005

Number
of Loans
426
636
253
259
35
17
307
1,933

Total
$ 523,691
528,054
409,239
271,197
125,815
53,650
385,854
$2,297,500

Over 30-Day
Delinquency
Rate as a
Percentage of
Balance

–%

1.32
.68
–
–
–
.07
.44%

Leasing and Equipment Finance The following tables summarize TCF’s leasing and equipment finance portfolio by marketing
segment and by equipment type.

(Dollars in thousands)

Marketing Segment
Middle market (1)
Small ticket (2)
Winthrop (3)
Wholesale (4)
Other

Total

At December 31,

2006

Percent
of Total

Over 30-Day
Delinquency as
a Percentage
of Balance

59.6%
20.4
13.9
5.2
0.9
100.0%

.48%
.59
.28
.33
1.03
.47%

Balance
$ 878,414
303,778
211,741
78,338
31,523
$1,503,794

2005

Percent
of Total

Over 30-Day
Delinquency as
a Percentage
of Balance

58.4%
20.2
14.1
5.2
2.1
100.0%

.26%
.53
.98
–
.60
.41%

Balance
$1,084,549
370,649
253,125
93,807
16,035
$1,818,165

(1) Middle market consists primarily of loan and lease financing of construction and manufacturing equipment and specialty vehicles.
(2) Small ticket includes loan and lease financings to small- and mid-size companies through programs with vendors, manufacturers, distributors, buying groups, and franchise

organizations.

(3) Winthrop’s portfolio consists primarily of technology and data processing equipment.
(4) Wholesale includes the discounting of lease receivables originated by third party lessors.

TCF Financial Corporation and Subsidiaries

(Dollars in thousands)

Equipment Type
Specialty vehicles
Manufacturing
Construction
Technology and data processing
Medical
Furniture and fixtures
Printing
Trucks and trailers
Material handling
Other

Total

The leasing and equipment finance portfolio increased

$314.4 million from December 31, 2005 to $1.8 billion at
December 31, 2006. Total loan and lease originations and
purchases for TCF Equipment Finance and Winthrop Resources
were $1.1 billion for 2006, compared with $845.8 million
for 2005. The backlog of approved transactions increased
slightly to $249.7 million at December 31, 2006, from $249.2
million at December 31, 2005. TCF’s leasing activity is subject
to risk of cyclical downturns and other adverse economic
developments. In an adverse economic environment, there
may be a decline in the demand for some types of equipment,
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. Declines in value
of equipment under lease increase the potential for impair-
ment losses and credit losses, due to diminished collateral
value, and may result in lower sales-type revenue at the end
of the contractual lease term. See Note 1 to Consolidated
Financial Statements-Policies Related to Critical Accounting
Estimates for information on lease accounting.

At December 31, 2006 and 2005, $53.7 million, and
$55.2 million, respectively, of TCF’s lease portfolio, were
discounted on a non-recourse basis with third-party financial
institutions and consequently TCF retains no credit risk on
such amounts. 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 and

At December 31,

2006

Balance
$ 344,855
327,057
310,323
260,146
230,153
66,999
65,545
55,241
49,722
108,124
$1,818,165

Percent
of Total

19.0%
18.0
17.1
14.3
12.7
3.7
3.6
3.0
2.7
5.9
100.0%

Balance
$ 257,497
277,895
236,939
222,623
199,729
60,278
58,600
56,824
39,814
93,595
$1,503,794

2005

Percent
of Total

17.1%
18.5
15.8
14.8
13.3
4.0
3.9
3.8
2.6
6.2
100.0%

are reviewed on an ongoing basis. Any downward revisions
are recorded in the periods in which they become known.
At December 31, 2006, lease residuals totaled $34.7 million,
compared with $32.9 million at December 31, 2005.

Residential Real Estate Residential real estate loans
were $627.8 million at December 31, 2006, down $142.7 mil-
lion from December 31, 2005.

The decline in residential real estate loans during 2006
was due to normal amortization of loan balances and loan
prepayments. Management expects that the residential
loan portfolio will continue to decline, which will provide
funding for anticipated growth in other loan, lease or invest-
ment categories. At December 31, 2006, TCF’s residential real
estate loan portfolio was $522.1 million in fixed-rate loans
and $105.7 million in adjustable-rate loans.

Allowance for Loan and Lease Losses The determina-
tion of the allowance for loan and lease losses is a critical
accounting estimate. TCF’s methodologies for determining
and allocating the allowance for loan and lease losses
focus on ongoing reviews of larger individual loans and
leases, historical net charge-offs, delinquencies in the loan
and lease portfolio, the level of impaired and non-perform-
ing assets, values of underlying loan and lease collateral,
the overall risk characteristics of the portfolios, changes
in character or size of the portfolios, geographic location,
prevailing economic conditions and other relevant factors.
The various factors used in the methodologies are reviewed
on a periodic basis.

2006 Form 10-K

The Company considers the allowance for loan and lease
losses of $58.5 million appropriate to cover losses inherent
in the loan and lease portfolios as of December 31, 2006.
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,TCF’s ongoing
credit review process or regulatory examinations, 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.

The total allowance for loan and lease losses is generally
available to absorb losses from any segment of the portfo-
lio. The allocation of TCF’s allowance for loan and lease
losses disclosed in the following table is subject to change
based on the changes in criteria used to evaluate the
allowance and is not necessarily indicative of the trend of
future losses in any particular portfolio.

In 2005, TCF refined its allowance for loan and lease
losses allocation methodology resulting in an allocation
of the entire allowance for loan and lease losses to the
individual loan and lease portfolios. This change resulted
in the allocation of the previously unallocated portion of
the allowance for loan and lease losses.

The Office of the Comptroller of the Currency, in conjunc-

tion with other financial institution regulators, issued new
guidance for the allowance for loan and lease losses to
ensure consistency with generally accepted accounting
principles (GAAP) and more recent supervisory guidance.
The Interagency policy statement on the allowance for loan

and lease losses, issued December 13, 2006, replaces the
1993 policy statement but reiterates key concepts and
requirements applicable to existing supervisory guidance
and GAAP. Although TCF considers its allowance to be ade-
quate, and does not believe the revised policy statement
calls for any change to its loan and lease loss reserves,
there can be no assurance that regulators may not require
some modification to its allowance methodology, support-
ing documentation requirements or require an increase to
its reserves. See “Management’s Discussion and Analysis of
Financial Condition and Results of Operations – ‘Forward-
Looking Information.’” For additional information concerning
TCF’s allowance for loan and lease losses, see “Management’s
Discussion and Analysis of Financial Condition and Results
of Operations – ‘Forward-Looking Information’” and Notes
1 and 6 of Notes to Consolidated Financial Statements.
The next several pages include detailed 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 care-
fully reviewed and related to the nature of the underlying
loan and lease portfolios before appropriate conclusions
can be reached regarding TCF or for purposes of making
comparisons to other banks. Most of TCF’s non-performing
assets and past due loans and leases are secured by real
estate. Given the nature of these assets and the related
mortgage foreclosure, 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 unse-
cured loans or loans secured by other property primarily
due to state real estate foreclosure laws.

TCF Financial Corporation and Subsidiaries

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

(Dollars in thousands)
Consumer home equity
Consumer other

Total consumer
Commercial real estate
Commercial business
Leasing and equipment finance
Residential real estate
Unallocated

Total allowance balance

N.A. Not Applicable.

At December 31,
2004

2003

2005

2006

2002
$12,615 $10,017 $ 9,213 $ 8,177 $ 7,471
1,932
1,694
9,403
10,907
22,176
20,742
15,910
7,696
12,881
24,566
1,370
796
11,276
10,686
$58,543 $55,823 $75,393 $72,460 $73,016

2,211
14,826
22,662
7,503
12,990
562
–

1,900
10,077
25,142
11,797
13,515
942
10,987

2,053
12,070
21,222
6,602
15,313
616
–

Allocations as a Percentage of Total
Loans and Leases Outstanding by Type
At December 31,

2006

2005

.21%
3.54
.25
.95
1.36
.71
.09
N.A.
.52

.19%
3.57
.23
.92
1.52
1.02
.08
N.A.
.55

2004
.21 %
3.02
.25
.96
1.76
1.79
.08
N.A.
.80

2003

2002

.23%
3.04
.28
1.31
2.75
1.16
.08
N.A.
.87

.25%
2.84
.31
1.21
3.60
1.24
.08
N.A.
.90

The allocated allowance balances for TCF’s residential, consumer and leasing and equipment finance portfolios, at
December 31, 2006 reflect the Company’s credit quality and related low level of historical net charge-offs for these portfolios.
The decrease in the allocated allowance for leasing and equipment finance in 2005 was primarily related to the charge-off
of the investment in a leveraged lease. TCF has no other leveraged leases or exposure to the airline industry.

The following table sets forth information detailing the allowance for loan and lease losses.

(In thousands)
Balance at beginning of year
Change in accounting principle (1)
Adjusted balance at beginning of year
Charge-offs:

Consumer home equity
Consumer other

Total consumer
Commercial real estate
Commercial business
Leasing and equipment finance
Residential real estate
Total charge-offs

Recoveries:

Consumer home equity
Consumer other

Total consumer
Commercial real estate
Commercial business
Leasing and equipment finance
Residential real estate
Total Recoveries

Net charge-offs

Provision charged to operations
Acquired allowance
Balance at end of year

2006
$ 55,823
–
55,823

(7,621)
(18,423)
(26,044)
(228)
(555)
(6,117)
(277)
(33,221)

275
13,621
13,896
39
86
1,225
6
15,252
(17,969)
20,689
–
$ 58,543

Year Ended December 31,
2004
$ 72,460
–
72,460

2003
$ 73,016
–
73,016

2005
$ 75,393
–
75,393

(5,204)
(18,675)
(23,879)
(74)
(454)
(23,387)
(110)
(47,904)

312
14,705
15,017
82
2,627
2,003
19
19,748
(28,156)
8,586
–
$ 55,823

(3,970)
(21,199)
(25,169)
(602)
(235)
(8,508)
(81)
(34,595)

308
13,623
13,931
126
82
2,963
8
17,110
(17,485)
18,627
1,791
$ 75,393

(3,846)
(17,103)
(20,949)
(1,381)
(920)
(8,620)
(86)
(31,956)

391
10,686
11,077
45
138
1,083
9
12,352
(19,604)
19,048
–
$ 72,460

2002
$ 75,028
(3,991)
71,037

(5,138)
(16,555)
(21,693)
(2,181)
(5,952)
(9,230)
(59)
(39,115)

403
11,003
11,406
43
54
1,264
9
12,776
(26,339)
28,318
–
$ 73,016

(1) See Note 25. Accounting for Deposit Account Overdrafts for discussion of this change.

2006 Form 10-K

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

(Dollars in thousands)
Consumer home equity
Consumer other

Total consumer
Commercial real estate
Commercial business
Leasing and equipment finance (1)
Residential real estate

Total

Year Ended December 31,

2006

2005

Net
Charge-offs
(Recoveries)
$ 7,346
4,802
12,148
189
469
4,892
271
$17,969

% of
Average
Loans and
Leases

.13%
N.M.
.22
.01
.09
.29
.04
.17

Net
Charge-offs
(Recoveries)
$ 4,892
3,970
8,862
(8)
(2,173)
21,384
91
$28,156

% of
Average
Loans and
Leases

.10%
N.M.
.19
–
(.51)
1.50
.01
.29

(1) For the year ended December 31, 2005, net charge-offs excluding the leveraged lease were $2.6 million or .18% of average loans and leases.

N.M. Not Meaningful.

Non-Performing Assets Non-performing assets consist
of non-accrual loans and leases and other real estate owned.
The increase in total non-performing assets from 2005 to
2006 was primarily due to an increase of $4.7 million of other
real estate owned properties resulting from an increase in
the number of residential properties and longer average
marketing time to sell residential properties and a $12.7
million increase in commercial real estate non-accrual
loans primarily related to three Michigan commercial real
estate properties.

Approximately 60% of non-performing assets at December
31, 2006 and 75% of non-performing assets at December 31,
2005 consisted of, or were secured by, residential real estate.
The accrual of interest income is generally discontinued
when loans and leases become 90 days or more past due with
respect to either principal or interest (150 days or six pay-
ments past due for loans secured by residential real estate)
unless such loans and leases are well secured and in the
process of collection.

Non-performing assets are summarized in the following table.

(Dollars in thousands)
Non-accrual loans and leases:

Consumer home equity and other
Commercial real estate
Commercial business
Leasing and equipment finance
Residential real estate

Total non-accrual loans and leases

Other real estate owned:

Residential
Commercial

Total other real estate owned

Total non-performing assets

Non-performing assets as a percentage of:

Net loans and leases
Total assets

2006

2005

At December 31,
2004

2003

2002

$16,520
12,849
3,421
7,596
2,799
43,185

19,899
2,554
22,453
$65,638

$18,410
188
2,207
6,434
2,409
29,648

14,877
2,834
17,711
$47,359

$12,187
1,093
4,533
25,678
3,387
46,878

11,726
5,465
17,191
$64,069

$12,052
2,490
2,931
13,940
3,993
35,406

20,462
12,992
33,454
$68,860

$11,163
3,213
4,777
18,689
5,798
43,640

16,479
10,093
26,572
$70,212

.58%
.45

.47%
.35

.69%
.52

.83%
.61

.87%
.58

TCF Financial Corporation and Subsidiaries

Included in non-performing assets are loans and leases

that are considered impaired. Impaired loans and leases
totaled $17.5 million and $3.8 million at December 31, 2006
and December 31, 2005, respectively. The related allowance
for credit losses on impaired loans and leases was $2.5 mil-
lion at December 31, 2006, compared with $1.6 million
at December 31, 2005. All of the impaired loans and leases
were on non-accrual status. There were no impaired loans
and leases at December 31, 2006 and 2005 which did not
have a related allowance for loan and leases losses. The

average balance of impaired loans and leases was $8.2
million for 2006, compared with $5.3 million for 2005. The
decrease in non-accrual consumer loans in 2006 is primarily
due to unusually high non-accrual balances in the fourth
quarter of 2005 as a result of changes in consumer bank-
ruptcy laws, partially offset by an increase in commercial
real estate loans. The overall increase in non-accrual loans
in 2006 was primarily due to several Michigan commercial
real estate loans.

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 based on the contrac-
tual terms of the loan or lease.

(Dollars in thousands)
Accruing loans and leases delinquent for:

30-59 days
60-89 days
90 days or more

Total

At December 31,

2006
Percentage of
Loans and
Leases

.30%
.22
.11
.63%

Principal
Balances

$34,607
24,872
12,214
$71,693

2005
Percentage of
Loans and
Leases

.26%
.11
.06
.43%

Principal
Balances

$26,383
10,746
6,475
$43,604

The following table summarizes TCF’s over 30-day delinquent loan and lease portfolio by loan type, excluding loans held for

sale and non-accrual loans and leases.

(Dollars in thousands)
Consumer home equity and other
Commercial real estate
Commercial business
Leasing and equipment finance
Residential real estate

Total

At December 31,

2006
Percentage of
Portfolio

.58%
.76
.14
.47
1.61
.63%

Principal
Balances
$34,313
18,072
762
8,499
10,047
$71,693

Principal
Balances
$18,556
10,038
819
6,182
8,009
$43,604

2005
Percentage of
Portfolio

.36%
.44
.19
.41
1.04
.43%

Potential Problem Loans and Leases In addition to
non-performing assets, there were $66.1 million of loans
and leases at December 31, 2006, for which management
has concerns regarding the ability of the borrowers to meet
existing repayment terms, compared with $54.8 million at

December 31, 2005. The increase in potential problem loans
and leases was primarily due to a $13.8 million Minnesota
commercial real estate loan that is well-secured, but
delinquent. These loans and leases are primarily classified
as substandard for regulatory purposes and reflect the

2006 Form 10-K

distinct possibility, but not the 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 delinquent, non-performing or impaired.
Additionally, these loans and leases are generally secured

by commercial real estate or other assets, thus reducing
the potential for loss should they become non-performing.
Potential problem loans and leases are considered in the
determination of the adequacy of the allowance for loan
and lease losses. None of the leasing and equipment finance
potential problem loans at December 31, 2006 and 2005,
respectively, were funded on a non-recourse basis.

Potential problem loans and leases are summarized as follows.

(Dollars in thousands)
Commercial real estate
Commercial business
Leasing and equipment finance

Total

Liquidity Management TCF manages its liquidity
position to ensure that the funding needs of depositors and
borrowers are met promptly and in a cost-effective manner.
Asset liquidity arises from the ability to convert assets to
cash as well as from the maturity of assets. Liability liquid-
ity results from the ability of TCF to attract a diversity of
funding sources to promptly meet funding requirements.
Deposits are the primary source of TCF’s funds for use
in lending and for other general business purposes. In addi-
tion to deposits, TCF derives funds from loan and lease
repayments and borrowings. Deposit inflows and outflows
are significantly influenced by general interest rates, money
market conditions, competition for funds, customer service
and other factors. TCF’s deposit inflows and outflows have
been and will continue to be affected by these factors.
Borrowings may be used to compensate for reductions in
normal sources of funds, such as deposit inflows at less
than projected levels, net deposit outflows or to support
expanded activities. Historically, TCF has borrowed prima-
rily from the FHLB, from institutional sources under repur-
chase agreements and from other sources. At December 31,
2006, TCF had over $3.0 billion in unused capacity under
these funding sources, which could be used to meet future
liquidity needs. See “Borrowings.”

Potential sources of liquidity for TCF Financial Corporation

(parent company only) include cash dividends from TCF

At December 31,

2006
Percentage of
Portfolio

1.81%
2.11
.62
.58

Principal
Balances
$43,216
11,664
11,265
$66,145

Principal
Balances
$35,341
11,793
7,648
$54,782

2005
Percentage of
Portfolio

1.54%
2.71
.51
.54

Bank, issuance of debt and equity securities and borrowings
under a $105 million line of credit. TCF Bank’s ability to pay
dividends or make other capital distributions to TCF is
restricted by regulation and may require regulatory approval.

Deposits Deposits totaled $9.8 billion at December 31,
2006, up $639.9 million from December 31, 2005. Checking,
savings and money market deposits are an important
source of low-cost funds and fee income for TCF. Checking,
savings and money market deposits totaled $7.3 billion, up
$72 million from December 31, 2005, and comprised 75% of
total deposits at December 31, 2006, compared with 79%
of total deposits at December 31, 2005. The average balance
of these deposits for 2006 was $7.1 billion, an increase of
$378 million over the $6.7 billion average balance for 2005.
Certificates of deposit totaled $2.5 billion at December 31,
2006, up $568 million from December 31,2005. TCF had
no brokered deposits at December 31, 2006 or 2005. Non-
interest bearing deposits represented 25% and 27% of total
deposits as of December 31, 2006 and 2005, respectively.
TCF’s weighted-average cost for deposits, including non-
interest bearing deposits, was 2.33% at December 31, 2006,
up from 1.64% at December 31, 2005, primarily reflecting
increases in Premier checking, Premier savings and certifi-
cates of deposit average balances and overall increases in
interest rates.

TCF Financial Corporation and Subsidiaries

Branches 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 strat-
egy, the opportunity to add new supermarket branches
within TCF’s markets has slowed. Therefore, TCF will continue
new branch expansion by opening more traditional branches.
Although traditional branches require a higher initial invest-
ment than supermarket branches, they ultimately attract
more customers and become larger and potentially more
profitable. During 2006, TCF opened 19 new branches. The
focus on opening new branches will continue in 2007 with
the planned opening of 20 branches, including 11 new tra-
ditional branches, six new supermarket branches and three
campus branches. TCF opened its first branch in the Phoenix,
Arizona metropolitan area in December 2006. TCF closed 19

branches in 2006 primarily due to the sale of supermarket
stores and consolidation of branches.

In order to improve the customer experience and enhance

deposit and loan growth, TCF also plans to relocate nine
branches, including seven traditional branches and two
supermarket branches to improved locations and new facil-
ities, and to remodel 15 existing supermarket branches in
2007. In connection with the traditional branch relocation
activities, the sale of existing real estate will produce signif-
icant gains in 2007, which will more than offset the increased
operating costs of the new branches.

In November 2006, TCF entered into a definitive agreement

to sell 10 outstate Michigan branches with approximately
$235 million of deposits. TCF expects to record a pre-tax gain
of the sale of these branches of approximately $29 million,
or 15 cents per diluted share after-tax in 2007. The sale of
these branches is subject to regulatory approval.

At December 31, 2006, 148, or 33%, of TCF’s 453 branches were opened since January 1, 2001. Additional information

regarding TCF’s branches opened since January 1, 2001 is displayed in the table below.

(Dollars in thousands)
Number of new branches opened during the year:

Traditional
Supermarket
Campus
Total

Number of new branches at year end:

Traditional
Supermarket
Campus
Total

Percent of total branches

Number of deposit accounts
Deposits:

Checking
Savings
Money market
Subtotal

Certificates of deposit
Total deposits

Total fees and other revenue for the year

N.M. Not Meaningful.

At or For the Year Ended December 31,

2006

2005

2004

2003

2002

Percentage
Increase
2006/2005

10
5
4
19

78
63
7
148
32.7%

18
7
3
28

68
58
3
129
28.1%

19
11
–
30

50
51
–
101
22.2%

14
5
–
19

31
40
–
71
15.7%

12
15
–
27

17
35
–
52
11.5%

389,236

287,474

202,692

128,897

79,600

$ 451,926
356,760
42,461
851,147
467,568
$1,318,715
71,587
$

$364,494
274,623
24,993
664,110
316,235
$980,345
$ 55,028

$251,365
120,647
14,388
386,400
56,033
$442,433
$ 38,016

$119,379
71,746
13,311
204,436
33,584
$238,020
$ 17,680

$ 52,593
56,583
7,709
116,885
25,181
$142,066
$ 7,756

N.M.
N.M.
N.M.
N.M.

N.M.
N.M.
N.M.
N.M.
N.M.
35.4%

24.0
29.9
69.9
28.2
47.9
34.5
30.1

Borrowings Borrowings totaled $3.6 billion at December
31, 2006, up $605.4 million from December 31, 2005. The
increase was primarily due to the growth in assets exceed-
ing the growth in deposits by $641 million. In February 2006,
TCF Bank issued $75 million of subordinated notes due in

2016 with a fixed-rate coupon of 5.5%. These notes qualify
as Tier 2 or supplemental capital for regulatory purposes,
subject to certain limitations. TCF National Bank paid the
proceeds from the offering to TCF as a permanent capital
distribution.

2006 Form 10-K

See Notes 10 and 11 of Notes to Consolidated Financial
Statements for detailed information on TCF’s borrowings.
The weighted-average rate on borrowings increased to
4.53% at December 31, 2006, from 4.49% at December 31,
2005 primarily due to the impact of rising short-term inter-
est rates. In January 2007, TCF lengthened the maturities
of an additional $300 million of borrowings at a weighted
average fixed rate of 4.48 percent. TCF does not utilize
unconsolidated subsidiaries or special purpose entities to
provide off-balance sheet borrowings. See Note 17 of Notes
to Consolidated Financial Statements for further information
relating to off-balance sheet instruments.

TCF Financial (parent company) has a $105 million unse-
cured line of credit that matures in April 2007, and contains
certain covenants common to such agreements. As of
December 31, 2006, TCF is not in default with respect to any
of its covenants under the credit agreement. The interest
rate on the line of credit is based on either the prime rate
or LIBOR. TCF has the option to select the interest rate index
and term for advances on the line of credit. The line of
credit may be used for appropriate corporate purposes. At
December 31, 2006, TCF had no outstanding balance on this
line of credit, compared with $16.5 million outstanding at
December 31, 2005.

Contractual Obligations and Commitments As disclosed in the Notes to Consolidated Financial Statements, TCF has
certain obligations and commitments to make future payments under contracts. At December 31, 2006, the aggregate
contractual obligations (excluding bank deposits) and commitments are as follows.

(In thousands)

Contractual Obligations
Total borrowings
Annual rental commitments under non-cancelable

operating leases

Campus marketing agreements
Construction contracts and land purchase
commitments for future branch sites

Payments Due by Period

Less than
1 Year
$443,900

27,200
2,621

1-3
Years
$143,582

45,946
4,366

4-5
Years
$302,718

After 5
Years
$2,698,340

37,944
5,163

96,653
39,033

Total
$3,588,540

207,743
51,183

29,899
$3,877,365

29,899
$503,620

–
$193,894

–
$345,825

–
$2,834,026

(In thousands)

Commitments
Commitments to lend:

Consumer home equity and other
Commercial
Leasing and equipment finance
Other

Total commitments to lend
Standby letters of credit and guarantees

on industrial revenue bonds

Total

$1,889,100
618,055
91,271
79,444
2,677,870

96,285
$2,774,155

Amount of Commitment – Expiration by Period
Less than
1 Year

1-3
Years

4-5
Years

$ 11,027
350,902
77,118
79,444
518,491

61,050
$579,541

$ 26,455
223,536
–
–
249,991

25,995
$275,986

After 5
Years

$1,797,420
18,734
4,153
–
1,820,307

$ 54,198
24,883
10,000
–
89,081

8,626
$ 97,707

614
$1,820,921

Commitments to lend are agreements to lend to a cus-
tomer provided there is no violation of any condition in the
contract. These commitments generally have fixed expira-
tion dates or 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 require-
ments. Collateral predominantly consists of residential and
commercial real estate.

Campus marketing agreements consist of fixed or mini-
mum obligations for exclusive marketing and naming rights
with 13 campuses. TCF is obligated to make various annual
payments for these rights in the form of royalties and schol-
arships through 2029. TCF also has various renewal options,
which may extend the terms of these agreements. Campus
marketing agreements are an important element of TCF’s
campus banking strategy.

TCF Financial Corporation and Subsidiaries

See Note 17 of Notes to Consolidated Financial Statements
for information on standby letters of credit and guarantees
on industrial revenue bonds.

Stockholders’ Equity Stockholders’ equity at December
31, 2006 was $1 billion, or 7% of total assets, up from
$998.5 million, or 7.5% of total assets, at December 31, 2005.
The increase in stockholders’ equity was primarily due to net
income of $244.9 million, partially offset by the repurchase
of 3.9 million shares of TCF’s common stock at a cost of
$101 million, the payment of $121.4 million in dividends on
common stock and a $13.3 million increase in accumulated
comprehensive loss for pension and postretirement obliga-
tions (due to the adoption of SFAS 158 on December 31,
2006) for the year ended December 31, 2006. At December
31, 2006, TCF had 2.8 million shares remaining in its stock
repurchase programs authorized by its Board of Directors. In
November 2006, TCF retired 52.5 million shares of treasury
stock, which reduced additional paid-in capital and retained
earnings by $126.8 million and $876.7 million, respectively,
with an equal offset in treasury stock. For the year ended
December 31, 2006, average total equity to average assets
was 7.15%, compared with 7.43% for the year ended
December 31, 2005. Dividends to common shareholders on
a per share basis totaled 92 cents in 2006, an increase of
8.2% from 85 cents in 2005. TCF’s dividend payout ratio was
48.4% in 2006 and 42.5% in 2005. The Company’s primary
funding sources for common dividends are dividends received
from TCF Bank. At December 31, 2006, TCF Financial and TCF
Bank exceeded their regulatory capital requirements and
are considered “well-capitalized” under guidelines estab-
lished by the Federal Reserve Board and the Office of the
Comptroller of the Currency. See Notes 13 and 14 of Notes
to Consolidated Financial Statements. TCF has to a limited
extent used stock options as a form of employee compen-
sation in prior years. At December 31, 2006, the number of
incentive stock options (fully vested) outstanding was
231,133, or .18%, of total shares outstanding.

Summary of Critical Accounting Estimates Critical
accounting estimates occur in certain accounting policies
and procedures and are particularly susceptible to signifi-
cant change. Policies that contain critical accounting
estimates include the determination of the allowance for
loan and lease losses, lease financings and income taxes.
See Note 1 of Notes to Consolidated Financial Statements
for further discussion of critical accounting estimates.

Recent Accounting Developments In June 2006, the
Financial Accounting Standards Board issued Interpretation
No. 48, Accounting for Uncertainty in Income Taxes, an
interpretation of FASB Statement No. 109 (the Interpretation).
This Interpretation is effective beginning in 2007. It provides
guidance on financial statement recognition and measure-
ment of tax positions taken, or expected to be taken, in tax
returns and requires new disclosures. TCF does not expect
any material changes as a result of the Interpretation.

Fourth Quarter Summary In the fourth quarter of 2006,
TCF reported net income of $53.7 million, compared with
$65.5 million in the fourth quarter of 2005. The fourth quarter
of 2006 net income included an $851 thousand, or one cent
per diluted share, reduction in income tax expense. Net
income for the fourth quarter of 2005 included $3.5 million
in pre-tax gains on sales of buildings and branches and an
$8.8 million reduction in income tax expense for a combined
after-tax impact of nine cents per diluted share. Diluted
earnings per common share was 42 cents for the fourth
quarter of 2006, compared with 50 cents for the same 2005
period. TCF opened seven new branches in the fourth quarter
of 2006, consisting of six traditional branches and one
campus branch.

Net interest income was $135.9 million for the quarter
ended December 31, 2006, up $6.6 million, or 5.1% from the
quarter ended December 31, 2005. Of this increase in net
interest income, $14 million was due to an increase in average
loan balances, partially offset by a decrease of $7.4 million
due to interest rate increases on deposits and borrowings
exceeding interest rate increases in loans. The net interest
margin was 4.07% and 4.31% for the fourth quarter of 2006
and 2005, respectively. The decrease in net interest margin
from the fourth quarter of 2005 was primarily due to the con-
tinued customer preference for lower-yielding fixed-rate
loans and higher-cost market rate deposits, largely due to
the flat or inverted yield curve which persisted throughout
2006, and the growth of higher interest-cost borrowings.

TCF provided $10.1 million for credit losses in the fourth

quarter of 2006, compared with $5.4 million in the fourth
quarter of 2005, primarily due to higher consumer and leasing
and equipment finance net charge-offs and provisions
related to increases in commercial real estate non-accrual
loans. For the fourth quarter of 2006, net loan and lease
charge-offs were $6.6 million, or .24% of average loans
and leases outstanding, compared with $4.1 million, or
.16% of average loans and leases outstanding during the
same 2005 period.

2006 Form 10-K

Total non-interest income in the fourth quarter of 2006
was $118.8 million, down $6.1 million, or 4.9 percent, from
the fourth quarter of 2005, primarily due to declines in
other revenues, fees and service charges, partially offset by
increased card revenue. Card revenues totaled $23.5 million
for the fourth quarter of 2006, up 9.6 percent over the same
period. Leasing and equipment finance revenues were $15.2
million for the fourth quarter of 2006, down $240 thousand
from the fourth quarter of 2005 primarily due to lower sales-
type lease revenues, partially offset by higher operating
lease revenues. Other revenues were $2.3 million for the fourth
quarter of 2006, down $6.3 million from the same period of
2005. This decrease was primarily due to a $3.1 million
decrease in mortgage banking revenue relating to the exit
from this business in the first quarter of 2006 and a $3.5
million decrease in gains of sales of buildings and branches.
Non-interest expense totaled $165.6 million for the 2006
fourth quarter, up $8.9 million, or 5.7 percent, from $156.6
million for the 2005 fourth quarter. Compensation and
employee benefits increased $3.1 million, or 3.8 percent,
from the fourth quarter of 2005, primarily due to branch
expansion totaling $1.8 million. Occupancy and equipment
expenses increased $2.1 million, or 7.5 percent, from the
fourth quarter of 2005, primarily due to $1.1 million associ-
ated with branch expansion. Operating lease depreciation
increased $1.8 million from the fourth quarter of 2005,
primarily driven by a $36.1 million increase in average oper-
ating lease balances in TCF’s leasing and equipment finance
subsidiaries. Other expenses increased $1.8 million, or
4.6 percent, from the fourth quarter of 2005, primarily driven
by new branch expansion totaling $1.3 million and a $671
thousand increase in net real estate expense primarily due
to the sale of real estate owned.

In the fourth quarter of 2006, the effective income tax rate
was 32.05% of income before tax expense up from 28.91% for
the fourth quarter of 2005. The higher effective tax rate for
the fourth quarter of 2006, compared with the fourth quarter
of 2005, was primarily due to $851 thousand of adjustments
in the fourth quarter of 2006 for favorable developments
involving uncertain tax positions compared with $8.8 million
of adjustments involving uncertain tax positions in the
fourth quarter of 2005.

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 poten-
tially adverse impact on TCF and its bank and other
subsidiaries.

TCF has filed Chief Executive Officer and Chief Financial
Officer certifications as Exhibits 31.1 and 31.2 to its Form
10-K pursuant to Section 302 of the Sarbanes-Oxley Act of
2002. TCF has also filed, as Exhibits 32.1 and 32.2 to Form
10-K, certificates called for under Section 906 of the Act.
Pursuant to Section 303A.12 of the New York Stock
Exchange (“NYSE”) Listed Company Manual, TCF’s Chief
Executive Officer submitted a certification to the NYSE on May
24, 2006 indicating that he was not aware of any violation
by TCF of the NYSE’s Corporate Governance listing standards.

Forward-Looking Information
This annual report on Form 10-K 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 possible legislative changes
and adverse economic, business and competitive develop-
ments such as shrinking interest margins; deposit outflows;
an inability to increase the number of checking accounts
and the possibility that deposit account losses (fraudulent
checks, etc.) may increase; impact of legal, legislative or
other changes affecting customer account charges and
fee income; 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 standards or interpretations of existing stan-
dards; monetary, fiscal or tax policies of the federal or state
governments; adoption of proposed federal legislation

TCF Financial Corporation and Subsidiaries

reducing interest subsidies and other benefits available to
TCF in its education lending programs; adverse findings in
tax audits or regulatory examinations; 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 changes in allowance for loan and
lease losses methodology dictated by new regulatory
requirements; imposition of vicarious liability on TCF as
lessor in its leasing operations; denial of insurance coverage
for claims made by TCF; technological, computer-related or
operational difficulties or loss or theft of information;
adverse changes in securities markets; and results of liti-
gation, including reductions in card revenues resulting from
litigation brought by various merchants or merchant organi-
zations against Visa; or other significant uncertainties.
Investors should consult TCF’s Annual Report on Form 10-K,
and Forms 10-Q and 8-K for additional important informa-
tion about the Company.

Item 7A. Quantitative and
Qualitative Disclosures
About Market Risk
TCF’s results of operations are dependent to a large degree
on its net interest income and its ability to manage interest-
rate risk. Although TCF manages other risks, such as credit
risk, liquidity risk, operational and other risks, in the normal
course of its business, the Company considers interest-rate
risk to be its most significant market risk. See “Item 1A.
Risk Factors – Operational Risk Management” for further
discussion. Since TCF does not hold a trading portfolio,
the Company is not exposed to market risk from trading
activities. A mismatch between maturities, interest rate
sensitivities and prepayment characteristics of assets and
liabilities results in interest-rate risk. TCF, like most finan-
cial 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., the prime rate).
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.

TCF utilizes net interest income simulation models to esti-
mate the near-term effects (next twelve months) of changing
interest rates on its net interest income. Net interest income
simulation involves forecasting net interest income under
a variety of scenarios, including the level of interest rates,
the shape of the yield curve, and spreads between market
interest rates. At December 31, 2006, net interest income is
estimated to decrease by .8%, compared with the base case
scenario, over the next twelve months if short- and long-
term interest rates were to sustain an immediate increase
of 100 basis points. In the event short- and long-term inter-
est rates were to decline by 100 basis points, net interest
income is estimated to increase by .4%, compared with the
base case scenario, over the next twelve months.

Management exercises its best judgment in making

assumptions regarding loan prepayments, deposit
withdrawals, calls on wholesale borrowings and other non-
controllable events in estimating TCF’s exposure to changes
in interest rates. These assumptions are inherently uncertain
and, as a result, the simulation models cannot precisely
predict net interest income or precisely predict the impact
of a change in interest rates on net interest income. Actual
results will differ from simulated results due to the timing,
magnitude and frequency of interest rate changes and
changes in market conditions and management strategies,
among other factors.

In addition to the net interest income simulation model,
management utilizes an interest rate gap measure (differ-
ence between interest-earning assets and interest-bearing
liabilities re-pricing within a given period). While the interest
rate gap measurement has some limitations, including no
assumptions regarding future asset or liability production
and a static interest rate assumption (large quarterly
changes may occur related to these items), the interest rate
gap represents the net asset or liability sensitivity at a
point in time. An interest rate gap measure could be signifi-
cantly affected by external factors such as loan prepayments,
early withdrawals of deposits, changes in the correlation of
various interest-bearing instruments, competition, or a rise
or decline in interest rates.

TCF’s one-year interest rate gap was a negative $630
million, or 4.3% of total assets at December 31, 2006, com-
pared with a positive $318.4 million, or 2.4% of total assets
at December 31, 2005. A negative interest rate gap position
exists when the amount of interest-bearing liabilities maturing
or re-pricing exceeds the amount of interest-earning assets

2006 Form 10-K

maturing or re-pricing, including assumed prepayments,
within a particular time period. The decline in the gap position
to a negative at December 31, 2006 compared with a positive
at December 31, 2005 was primarily due to a decrease in
variable-rate loans, a decrease in assumed prepayments on
fixed- and adjustable-rate loans and investments, and an
increase in rate-sensitive deposits, partially offset by the
extensions of long-term borrowings.

TCF estimates that an immediate 100 basis point decrease

in current mortgage loan interest rates would increase
prepayments on the $6.7 billion of fixed-rate mortgage-
backed securities, residential real estate loans and consumer
loans at December 31, 2006, by approximately $732 million,

or 76.2%, in the first year. An increase in prepayments
would decrease the estimated life of the portfolios and may
adversely impact net interest income or net interest margin
in the future. Although prepayments on fixed-rate portfolios
are currently at a relatively low level, TCF estimates that an
immediate 100 basis point increase in current mortgage
loan interest rates would reduce prepayments on the fixed-
rate mortgage-backed securities, residential real estate
loans and consumer loans at December 31, 2006, by approx-
imately $272 million, or 28.3%, in the first year. A slowing in
prepayments would increase the estimated life of the port-
folios and may favorably impact net interest income or net
interest margin in the future.

The following table summarizes TCF’s interest-rate gap position at December 31, 2006.

(Dollars in thousands)
Interest-earning assets:
Loans held for sale
Securities available for sale (1)
Real estate loans (1)
Leasing and equipment finance (1)
Commercial loans (1)
Consumer loans (1)
Investments
Total

Interest-bearing liabilities:
Checking deposits (2)
Savings deposits (2)
Money market deposits (2)
Certificates of deposit
Short-term borrowings
Long-term borrowings (3)

Total

Deposits held for sale

Interest-earning assets over (under)

interest-bearing liabilities

Cumulative gap
Cumulative gap as a percentage

of total assets:

At December 31, 2006

At December 31, 2005

Within
30 Days

30 Days to
6 Months

6 Months to
1 Year

1 to 3 Years

3+ Years

Total

Maturity/Rate Sensitivity

$ 142,755
18,284
12,481
143,132
1,102,966
1,561,033
71,021
3,051,672

826,711
1,035,000
231,423
317,760
214,112
3,054
2,628,060
–

–
109,716
66,270
294,185
146,699
317,320
78,247
1,012,437

244,002
142,302
73,053
1,308,599
–
216,101
1,984,057
131,912

–
140,985
84,978
298,093
194,836
377,554
–
1,096,446

253,425
144,768
67,940
608,993
–
13,134
1,088,260
(41,659)

–
429,442
154,231
752,764
816,854
1,174,206
–
3,327,497

806,820
433,783
159,181
215,643
–
2,214,252
3,829,679
(42,813)

1,819
$
1,117,699
309,830
329,991
681,293
2,514,964
20,861
4,976,457

2,217,298
595,727
54,182
32,640
–
927,887
3,827,734
(47,440)

144,574
1,816,126
627,790
1,818,165
2,942,648
5,945,077
170,129
13,464,509

4,348,256
2,351,580
585,779
2,483,635
214,112
3,374,428
13,357,790
–

423,612
$ 423,612

(1,103,532)
$ (679,920)

49,845
$ (630,075)

(459,369)
$(1,089,444)

1,196,163
$ 106,719

106,719
106,719

2.9%

6.4%

(4.6)%

3.6%

(4.3)%

2.4%

(7.4)%

8.6%

0.7%

0.4%

0.7%

0.9%

(1) Based upon contractual maturity, repricing date, if applicable, scheduled repayments of principal and projected prepayments of principal based upon experience and

third-party projections.

(2) Includes non-interest bearing deposits. At December 31, 2006, 30% of checking deposits, 56% of savings deposits, and 64% of money market deposits are included in

amounts repricing within one year. At December 31, 2005, 27% of checking deposits, 46% of savings deposits, and 58% of money market deposits are included in amounts
repricing within one year.

(3) Includes $3.0 billion of callable borrowings. Based on December 31, 2006 interest rates, the 1-3 year category includes the projected call of $2.1 billion of callable

borrowings, with the remaining $0.9 billion in the over 3 year category.

TCF Financial Corporation and Subsidiaries

Item 8. Financial Statements and Supplementary Data

Report of Independent Registered
Public Accounting Firm
The Board of Directors and Stockholders
TCF Financial Corporation:

We have audited the accompanying consolidated statements
of financial condition of TCF Financial Corporation and sub-
sidiaries (the Company) as of December 31, 2006 and 2005,
and the related consolidated statements of income, stock-
holders’ equity, and cash flows for each of the years in the
three-year period ended December 31, 2006. These consoli-
dated financial statements are the responsibility of the
Company’s management. Our responsibility is to express an
opinion on these consolidated financial statements based
on our audits.

We conducted our audits in accordance with the standards
of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by manage-
ment, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reason-
able basis for our opinion.

In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects,
the financial position of TCF Financial Corporation and sub-
sidiaries as of December 31, 2006 and 2005, and the results
of their operations and their cash flows for each of the years
in the three-year period ended December 31, 2006, in con-
formity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards
of the Public Company Accounting Oversight Board (United
States), the effectiveness of TCF Financial Corporation’s
internal control over financial reporting as of December 31,
2006, based on criteria established in Internal Control –
Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO), and our
report dated February 15, 2007 expressed an unqualified
opinion on management’s assessment of, and the effective
operation of, internal control over financial reporting.

Minneapolis, Minnesota
February 15, 2007

2006 Form 10-K

Consolidated Statements of Financial Condition

At December 31,

2006

2005

348,980
170,129
1,816,126
144,574

5,945,077
2,390,653
551,995
1,818,165
10,705,890
627,790
11,333,680
(58,543)
11,275,137
406,087
152,599
356,102
$14,669,734

$ 4,348,256
2,351,580
585,779
2,483,635
9,769,250
214,112
3,374,428
3,588,540
278,570
13,636,360

374,701
79,943
1,648,615
229,820

5,206,275
2,297,500
435,203
1,503,794
9,442,772
770,441
10,213,213
(55,823)
10,157,390
365,146
152,599
380,380
$13,388,594

$ 4,298,145
2,238,562
677,028
1,915,620
9,129,355
472,126
2,511,010
2,983,136
277,631
12,390,122

–

1,317
343,744
784,011
(34,926)
(60,772)
1,033,374
$14,669,734

1,844
476,884
1,536,611
(21,215)
(995,652)
998,472
$13,388,594

(Dollars in thousands, except per-share data)

Assets
Cash and due from banks
Investments
Securities available for sale
Education loans held for sale
Loans and leases:

Consumer home equity and other
Commercial real estate
Commercial business
Leasing and equipment finance

Subtotal

Residential real estate

Total loans and leases

Allowance for loan and lease losses

Net loans and leases

Premises and equipment
Goodwill
Other assets

Total assets

Liabilities and Stockholders’ Equity
Deposits:

Checking
Savings
Money market
Certificates of deposit
Total deposits

Short-term borrowings
Long-term borrowings
Total borrowings

Accrued expenses and other liabilities

Total liabilities
Stockholders’ equity:

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

none issued and outstanding

Common stock, par value $.01 per share, 280,000,000 shares authorized;

131,660,749 and 184,386,193 shares issued

Additional paid-in capital
Retained earnings, subject to certain restrictions
Accumulated other comprehensive loss
Treasury stock at cost, 1,242,413 and 50,609,970 shares, and other

Total stockholders’ equity
Total liabilities and stockholders’ equity

See accompanying notes to consolidated financial statements.

TCF Financial Corporation and Subsidiaries

Consolidated Statements of Income

(In thousands, except per-share data)

Interest income:
Loans and leases
Securities available for sale
Loans held for sale
Investments

Total interest income

Interest expense:

Deposits
Borrowings

Total interest expense
Net interest income

Provision for credit losses

Net interest income after provision for credit losses

Non-interest income:

Fees and service charges
Card revenue
ATM revenue
Investments and insurance revenue

Subtotal

Leasing and equipment finance
Other

Fees and other revenue

Gains on sales of securities available for sale

Total non-interest income

Non-interest expense:

Compensation and employee benefits
Occupancy and equipment
Advertising and promotions
Operating lease depreciation
Other

Total non-interest expense

Income before income tax expense

Income tax expense

Net income

Net income per common share:

Basic
Diluted

Dividends declared per common share

See accompanying notes to consolidated financial statements.

Year Ended December 31,

2006

2005

2004

$769,590
98,035
15,009
3,504
886,138

195,324
153,284
348,608
537,530
20,689
516,841

270,166
92,084
37,760
10,695
410,705
53,004
25,755
489,464
–
489,464

341,857
114,618
26,926
14,347
151,449
649,197
357,108
112,165
$244,943

$
$
$

1.90
1.90
.92

$636,172
81,479
10,921
3,450
732,022

97,406
116,926
214,332
517,690
8,586
509,104

262,636
79,803
40,730
10,665
393,834
47,387
26,350
467,571
10,671
478,242

326,526
103,900
25,691
7,335
143,484
606,936
380,410
115,278
$265,132

$
$
$

2.00
2.00
.85

$527,178
80,643
11,533
3,455
622,809

42,581
88,337
130,918
491,891
18,627
473,264

275,120
63,463
42,935
12,558
394,076
50,323
22,887
467,286
22,600
489,886

322,824
95,617
26,353
1,843
132,037
578,674
384,476
129,483
$254,993

$
$
$

1.87
1.86
.75

2006 Form 10-K

Consolidated Statements of Stockholders’ Equity

(Dollars in thousands)

Balance, December 31, 2003
Comprehensive income (loss):

Net income
Other comprehensive loss

Comprehensive income (loss)

Dividends on common stock
Repurchase of 3,984,890 shares
Issuance of 150,174 shares
Cancellation of shares
Cancellation of shares for tax withholding
Amortization of stock compensation
Exercise of stock options, 155,832 shares
Stock compensation tax benefits
Allocation of TCF Stock for employer

match to the 401k plan

Change in shares held in trust for deferred

compensation plans, at cost

Balance, December 31, 2004
Comprehensive income (loss):

Net income
Other comprehensive loss
Comprehensive income (loss)

Dividends on common stock
Repurchase of 3,450,000 shares
Issuance of 526,900 shares
Cancellation of shares
Cancellation of shares for tax withholding
Amortization of stock compensation
Exercise of stock options, 66,064 shares
Stock compensation tax benefits
Change in shares held in trust for deferred

compensation plans, at cost

Balance, December 31, 2005
Comprehensive income (loss):

Net income
Other comprehensive loss
Comprehensive income (loss)
Adjustment to initially apply SFAS

No. 158, net of tax
Dividends on common stock
Repurchase of 3,900,000 shares
Issuance of 738,890 shares
Retirement of treasury stock
Cancellation of shares
Cancellation of shares for tax withholding
Amortization of stock compensation
Exercise of stock options, 28,667 shares
Stock compensation tax benefits
Change in shares held in trust for

deferred compensation plans, at cost

Balance, December 31, 2006

Number of
Common
Shares
Issued

Common
Stock

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
(Loss)/
Income

Treasury
Stock
and Other

Total

185,026,710

$ 925

$ 502,166 $1,234,804

$ 5,652 $ (822,689) $ 920,858

–
–
–
–
–
–
(62,980)
(24,636)
–
–
–

–

–
–
–
925
–
–
(1)
–
–
–
–

–

–
–
–
(925)
–
(2,609)
(1,220)
–
6,905
(689)
2,242

–

(328)

254,993
–
254,993
(104,037)
–
–
–
–
–
–
–

–

–
(7,067)
(7,067)
–
–
–
–
–
–
–
–

–

–
–
–
–
(116,134)
2,609
–
–
–
2,685
–

(117)

328

254,993
(7,067)
247,926
(104,037)
(116,134)
–
(1,221)
–
6,905
1,996
2,242

(117)

–

184,939,094

$1,849

$ 505,542 $1,385,760

$ (1,415) $ (933,318) $ 958,418

–
–
–
–
–
–
(114,004)
(438,897)
–
–
–

–

–
–
–
–
–
–
(1)
(4)
–
–
–

–

–
–
–
–
–
(9,658)
(14,616)
–
5,830
(648)
10,716

(20,282)

265,132
–
265,132
(114,543)
–
–
262
–
–
–
–

–
(19,800)
(19,800)
–
–
–
–
–
–
–
–

–
–
–
–
(93,499)
9,658
–
–
–
1,225
–

265,132
(19,800)
245,332
(114,543)
(93,499)
–
(14,355)
(4)
5,830
577
10,716

–

20,282

–

184,386,193

$1,844

$ 476,884 $1,536,611

$(21,215) $ (995,652) $ 998,472

–
–
–

–
–
–
–
(52,500,000)
(134,635)
(90,809)
–
–
–

–
–
–

–
–
–
–
(525)
(1)
(1)
–
–
–

–
–
–

–
–
–
(13,874)
(126,765)
(490)
(2,451)
7,499
(192)
20,681

244,943
–
244,943

–
(121,405)
–
–
(876,667)
529
–
–
–
–

–
(374)
(374)

(13,337)
–
–
–
–
–
–
–
–
–

–
–
–

–
–
(101,045)
13,874
1,003,957
–
–
–
546
–

244,943
(374)
244,569

(13,337)
(121,405)
(101,045)
–
–
38
(2,452)
7,499
354
20,681

–
131,660,749

–
$1,317

(17,548)

–
$ 343,744 $ 784,011

–

–
17,548
$(34,926) $ (60,772) $1,033,374

See accompanying notes to consolidated financial statements.

TCF Financial Corporation and Subsidiaries

Consolidated Statements of Cash Flows

Year Ended December 31,

2006

2005

2004

244,943

265,132

254,993

(In thousands)

Cash flows from operating activities:

Net income
Adjustments to reconcile net income to net cash

provided by operating activities:

Depreciation and amortization
Provision for credit losses
Proceeds from sales of loans held for sale
Principal collected on loans held for sale
Originations and purchases of loans held for sale
Net increase in other assets and accrued expenses

and other liabilities
Gains on sales of assets
Other, net

Total adjustments

Net cash provided by operating activities

Cash flows from investing activities:
Principal collected on loans and leases
Originations and purchases of loans
Purchases of equipment for lease financing
Proceeds from sales of securities available for sale
Proceeds from maturities and principal collected on

securities available for sale

Purchases of securities available for sale
Purchases of federal funds sold
Proceeds of federal funds sold
Purchases of Federal Home Loan Bank stock
Proceeds from redemptions of Federal Home Loan Bank stock
Proceeds from sales of real estate owned
Acquisitions, net of cash acquired
Purchases of premises and equipment
Proceeds from sales of premises and equipment
Sales of deposits, net of cash paid
Proceeds from sale of mortgage servicing rights
Other, net

Net cash used by investing activities

Cash flows from financing activities:

Net increase in deposits
Net decrease in short-term borrowings
Proceeds from long-term borrowings
Payments on long-term borrowings
Purchases of common stock
Dividends paid on common stock
Stock compensation tax benefits
Other, net

Net cash provided by financing activities
Net (decrease) increase in cash and due from banks
Cash and due from banks at beginning of year
Cash and due from banks at end of year

Supplemental disclosures of cash flow information:

Cash paid for:

Interest on deposits and borrowings
Income taxes

Transfer of loans and leases to other assets

See accompanying notes to consolidated financial statements.

47,039
8,586
102,491
13,152
(191,061)

(103,721)
(24,277)
11,115
(136,676)
128,456

4,438,169
(4,519,419)
(828,304)
1,017,711

247,152
(1,314,638)
(11,000)
11,000
(53,876)
75,952
22,496
–
(86,900)
28,250
(16,542)
–
19,160
(970,789)

1,153,127
(583,985)
1,687,308
(1,203,086)
(93,499)
(114,543)
10,716
1,198
857,236
14,903
359,798
374,701

39,996
18,627
1,051,276
8,090
(879,450)

(53,529)
(23,306)
11,292
172,996
427,989

3,833,653
(4,193,962)
(703,712)
1,437,066

347,304
(1,911,905)
(7,505,000)
7,505,000
(53,344)
23,202
40,654
(4,326)
(77,788)
1,915
–
781
11,924
(1,248,538)

360,796
(629,510)
2,800,614
(1,505,847)
(116,134)
(104,037)
2,242
2,168
810,292
(10,256)
370,054
359,798

59,807
20,689
284,455
17,235
(216,468)

(41,884)
(5,790)
(1,407)
116,637
361,580

3,904,907
(4,065,389)
(1,050,530)
–

229,014
(397,504)
(448,000)
377,000
(68,948)
49,466
32,417
–
(79,614)
7,714
–
41,160
15,308
(1,452,999)

639,895
(258,014)
1,206,403
(321,830)
(101,045)
(121,405)
20,681
1,013
1,065,698
(25,721)
374,701
348,980

$
$
$

331,345
96,324
41,088

$
$
$

200,246
151,161
26,574

$
$
$

126,228
145,716
23,963

2006 Form 10-K

Notes to Consolidated Financial Statements

Note 1. Summary of Signiﬁcant
Accounting Policies

Basis of Presentation The consolidated financial state-
ments include the accounts of TCF Financial Corporation
and its wholly owned subsidiaries. TCF Financial Corporation
(“TCF” or the “Company”) a Delaware corporation, is a
financial holding company engaged primarily in community
banking and leasing and equipment finance through its pri-
mary subsidiaries, TCF National Bank and TCF National Bank
Arizona, collectively (“TCF Bank”). TCF Bank owns leasing
and equipment finance, investment and insurance sales
and Real Estate Investment Trust (“REIT”) subsidiaries.
These subsidiaries are consolidated with TCF Bank and are
included in the consolidated financial statements of TCF
Financial Corporation. All significant intercompany accounts
and transactions have been eliminated in consolidation.

Certain reclassifications have been made to prior years’
financial statements to conform to the current year presen-
tation. For Consolidated Statements of Cash Flows purposes,
cash and cash equivalents include cash and due from banks.
The preparation of financial statements in conformity
with generally accepted accounting principles requires man-
agement to make estimates and assumptions that affect
the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amount of revenues and
expenses during the reporting period. These estimates are
based on information available to management at the time
the estimates are made. Actual results could differ from
those estimates.

Policies Related to Critical Accounting Estimates
Summary of Critical Accounting Estimates Critical
accounting estimates occur in certain accounting policies
and procedures and are particularly susceptible to signifi-
cant change. Policies that contain critical accounting esti-
mates include the determination of the allowance for loan
and lease losses, lease financings and income taxes. Critical
accounting policies are discussed with and reviewed by
TCF’s Audit Committee.

Allowance for Loan and Lease Losses The allowance
for loan and lease losses is maintained at a level believed
by management to be appropriate to provide for probable

loan and lease losses inherent in the portfolio as of the
balance sheet date, including known or anticipated prob-
lem loans and leases, as well as for loans and leases which
are not currently known to require specific allowances.
Management’s judgement as to the amount of the allowance
is a result of ongoing review of larger individual loans and
leases, the overall risk characteristics of the portfolios,
changes in the character or size of the portfolios, geographic
location and prevailing economic conditions. Additionally,
the level of impaired and non-performing assets, historical
net charge-off amounts, delinquencies in the loan and lease
portfolios, values of underlying loan and lease collateral
and other relevant factors are reviewed to determine the
amount of the allowance. In 2005, TCF refined its allowance
for loan and lease losses allocation methodology resulting
in an allocation of the entire allowance for loan and lease
losses to the individual loan and lease portfolios. This
change resulted in the allocation of the previous unallocated
portion of the allowance for loan and lease losses. Impaired
loans include all non-accrual and restructured commercial
real estate and commercial business loans and equipment
finance loans. Consumer loans, residential real estate loans
and leases are excluded from the definition of an impaired
loan. Loan impairment is measured as the present value of
the expected future cash flows discounted at the loan’s ini-
tial effective interest rate or the fair value of the collateral
for collateral-dependent loans. Consumer loans, residential
loans, smaller-balance commercial loans and leases and
equipment finance loans are segregated by loan type and
sub-type, and are evaluated on a pool basis. Loans and
leases are charged off to the extent they are deemed to
be uncollectible. The amount of the allowance for loan
and lease losses is highly dependent upon management’s
estimates of variables affecting valuation, appraisals of
collateral, evaluations of performance and status, and
the amounts and timing of future cash flows expected to
be received on impaired loans. Such estimates, appraisals,
evaluations and cash flows may be subject to frequent
adjustments due to changing economic prospects of bor-
rowers, lessees or properties. These estimates are reviewed
periodically and adjustments, if necessary, are recorded in
the provision for credit losses in the periods in which they
become known.

TCF Financial Corporation and Subsidiaries

Lease Financing TCF provides various types of lease
financing that are classified for accounting purposes as
direct financing, sales-type or operating leases. Leases
that transfer substantially all of the benefits and risks of
equipment ownership to the lessee are classified as direct
financing or sales-type leases and are included in loans and
leases. Direct financing and sales-type leases are carried
at the combined present value of the future minimum lease
payments and the lease residual value. The determination
of the lease classification requires various judgments and
estimates by management including the fair value of the
equipment at lease inception, useful life of the equipment
under lease, estimate of the lease residual value and
collectibility of minimum lease payments.

Sales-type leases generate dealer profit which is recog-

nized at lease inception by recording lease revenue net of
the lease cost. Lease revenue consists of the present value
of the future minimum lease payments. Lease cost consists
of the leased equipment’s book value, less the present
value of its residual. The revenues associated with other
types of leases are recognized over the term of the underly-
ing leases. Interest income on direct financing and sales-
type leases is recognized using methods which approximate
a level yield over the fixed, non-cancelable term of the
leases. TCF receives pro-rata rent payments for the interim
period until the lease contract commences and the fixed,
non-cancelable, lease term begins. TCF recognizes these
interim payments in the month they are earned and records
the income in interest income on direct finance leases.
Management has policies and procedures in place for the
determination of lease classification and review of the
related judgments and estimates for all lease financings.
Some lease financings include a residual value compo-

nent, which represents the estimated fair value of the
leased equipment at the expiration of the initial term of
the transaction. The estimation of residual values involves
judgments regarding product and technology changes,
customer behavior, shifts in supply and demand and other
economic assumptions. These estimates are reviewed at
least annually and downward adjustments, if necessary,
are charged to non-interest expense in the periods in which
they become known.

Leases which do not transfer substantially all benefits
and risks of ownership to the lessee are classified as oper-
ating leases. Operating leases represent a rental agreement
where ownership of the underlying equipment resides with
the lessor. Such leased equipment and related initial
direct costs are included in other assets on the balance sheet

and are depreciated on a straight-line basis over the term
of the lease to its estimated salvage value. Depreciation
expense is recorded as operating lease expense and included
in non-interest expense. Operating lease rental income is
recognized when it is due according to the provisions of
the lease and is reflected as a component of non-interest
income. An allowance for lease losses is not provided on
operating leases.

Income Taxes Income taxes are accounted for using the
asset and liability method. Under this method, deferred tax
assets and liabilities are recognized for the future tax con-
sequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities
and their respective tax-basis carrying amount. Deferred tax
assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that
includes the enactment date.

The determination of current and deferred income taxes

is based on complex analyses of many factors including
interpretation of federal and state income tax laws, the
difference between the tax reporting basis and the financial
reporting basis of assets and liabilities, estimates of amounts
due or owed, the timing of reversals of temporary differences
and current financial accounting standards. Actual results
could differ significantly from the estimates and tax law
interpretations used in determining the current and deferred
income tax liabilities. Additionally, there can be no assur-
ances that estimates and interpretations used in determin-
ing income tax liabilities may not be challenged by federal
and state taxing authorities.

In the preparation of income tax returns, tax positions

are taken based on interpretation of federal and state
income tax laws for which the outcome is uncertain.
Management periodically reviews and evaluates the status
of uncertain tax positions and makes estimates of amounts
ultimately due or owed. The benefit of tax positions are
recorded in income tax expense in the consolidated finan-
cial statements net of the estimates of ultimate amounts
due or owed including any applicable interest and penalties.
Changes in the estimated amounts due or owed may result
from closing of the statute of limitations on tax returns,
new legislation, clarification of existing legislation,
through government pronouncements, the courts, and
through the examination process.

2006 Form 10-K

Other Signiﬁcant Accounting Policies
Investments Investments are carried at cost, adjusted
for amortization of premiums or accretion of discounts,
using methods which approximate a level yield. TCF periodi-
cally evaluates investments for “other than temporary”
impairment.

Securities Available for Sale Securities available for
sale are carried at fair value with the unrealized holding
gains or losses, net of related deferred income taxes,
reported as accumulated other comprehensive income
(loss), a separate component of stockholders’ equity. The
cost of securities sold is determined on a specific identifica-
tion basis and gains or losses on sales of securities available
for sale are recognized on trade dates. Declines in the value
of securities available for sale that are considered other
than temporary are recorded in non-interest income as a
loss on securities available for sale. TCF periodically evalu-
ates securities available for sale for “other than temporary”
impairment. Discounts and premiums on securities available
for sale are amortized using methods which approximate a
level yield over the life of the security.

Education Loans Held for Sale Education loans held
for sale are carried at the lower of cost or market value.
Net fees and costs associated with originating and acquir-
ing loans held for sale are deferred and are included in the
basis for determining the gain or loss on sales of loans held
for sale. Gains on sales are recorded at the settlement date
and cost is determined on a specific identification basis.

Loans and Leases Net direct fees and costs associated
with originating and acquiring loans and leases are deferred
and amortized over the lives of the loan or lease. The net
direct fees and costs for sales-type leases are offset against
revenues recorded at the commencement of sales-type
leases. Discounts and premiums on loans purchased, net
direct fees and costs, unearned discounts and finance
charges, and unearned lease income are amortized using
methods which approximate a level yield over the estimated
remaining lives of the loans and leases.

Loans and leases, including loans or leases that are
considered to be impaired, are reviewed regularly by man-
agement and are placed on non-accrual status when the
collection of interest or principal is 90 days or more past
due (150 days or six payments past due for loans secured

by residential real estate), unless the loan or lease is
adequately secured and in the process of collection. Loans
secured by residential real estate are placed on non-accrual
status upon notification of bankruptcy if they are delinquent.
If they are current at notification they are placed on non-
accrual status at 90 days or four payments or more past
due or after a partial charge-off. When a loan or lease is
placed on non-accrual status, uncollected interest accrued
in prior years is charged off against the allowance for loan
and lease losses and interest accrued in the current year is
reversed. For non-accrual leases that have been funded on
a non-recourse basis by third-party financial institutions,
the related debt is also placed on non-accrual status.
Interest payments received on loans and leases in non-
accrual status are generally applied to principal unless the
remaining principal balance has been determined to be
fully collectible.

Premises and Equipment Premises and equipment,
including leasehold improvements, are carried at cost and
are depreciated or amortized on a straight-line basis over
estimated useful lives of owned assets and for leasehold
improvements over the estimated useful life of the related
asset or the lease term, whichever is shorter. Maintenance
and repairs are charged to expense as incurred. Rent expense
for leased land with facilities is recognized in occupancy
and equipment expense. Rent expense for leases with free
rent periods or scheduled rent increases is recognized on a
straight-line basis over the lease term.

Other Real Estate Owned Other real estate owned is
recorded at the lower of cost or fair value less estimated
costs to sell the property at the date of transfer to other
real estate owned. The fair value of other real estate is
determined through independent third-party appraisals,
automated valuation methods or broker opinions. At the
time a loan is transferred to other real estate owned, any
carrying amount in excess of the fair value less estimated
costs to sell the property is charged off to the allowance for
loan and lease losses. Subsequently, should the fair value of
an asset, less the estimated costs to sell, decline to less than
the carrying amount of the asset, the deficiency is recognized
in the period in which it becomes known and is included in
other non-interest expense. Net operating expenses of
properties and recoveries on sales of other real estate
owned are also recorded in other non-interest expense.

TCF Financial Corporation and Subsidiaries

Investments in Affordable Housing Limited
Partnerships Investments in affordable housing consist
of investments in limited partnerships that operate qualified
affordable housing projects or that invest in other limited
partnerships formed to operate affordable housing projects.
TCF generally utilizes the effective yield method to account
for these investments with the tax credits net of the amor-
tization of the investment reflected in the Consolidated
Statements of Income as a reduction of income tax expense.
However, depending on circumstances, the equity or cost
methods may be utilized. The amount of the investment
along with any unfunded equity contributions which are
unconditional and legally binding are recorded in other
assets. A liability for the unfunded equity contributions is
recorded in other liabilities. At December 31, 2006, TCF’s
investments in affordable housing limited partnerships
were $43 million, compared with $47 million at December 31,
2005 and were recorded in other assets.

Four of these investments in affordable housing limited
partnerships are considered variable interest entities. These
partnerships are not consolidated with TCF. As of December
31, 2006 and 2005, the carrying amount of these four invest-
ments was $39.7 million and $43.7 million, respectively.
These amounts included $1.8 million and $2.3 million of
unconditional unfunded equity contributions as of December
31, 2006 and 2005, respectively, which are recorded in other
liabilities. Thus, the maximum exposure to loss on these
four investments was $39.7 million at December 31, 2006;
however, the general partner of these partnerships provides
various guarantees to TCF including guaranteed minimum
returns. These guarantees are backed by a AA credit-rated
company and significantly limit any risk of loss.

Intangible Assets Goodwill is tested for impairment
annually. Deposit base intangibles are amortized over 10
years on an accelerated basis. The Company reviews the
recoverability of the carrying values of these assets at least
annually or earlier whenever an event occurs indicating that
they may be impaired.

Stock-Based Compensation The fair value of restricted
stock is amortized to compensation expense, with a corre-
sponding increase in additional paid-in capital, over the
longer of the service period or performance period, but in no
event beyond an employee’s retirement date. For perform-
ance-based restricted stock, TCF estimates the degree to
which performance conditions will be met to determine the
number of shares which will vest and the related compensa-
tion expense prior to the vesting date. Compensation expense

is adjusted in the period such estimates change. Non-
forfeitable dividends are recorded to retained earnings for
shares of restricted stock which are expected to vest and to
compensation expense for shares of restricted stock which
are not expected to vest.

Income tax benefits related to stock compensation in
excess of grant date fair value are recognized as an increase
to additional paid-in capital upon vesting and delivery of
the stock. Any income tax benefits that are less than grant
date fair value would be recognized as a reduction of addi-
tional paid in capital to the extent of previously recognized
income tax benefits and then as compensation expense for
the remaining amount. See Note 15 for additional informa-
tion concerning stock-based compensation.

Deposit Account Overdrafts Deposit account overdrafts
are reported in consumer or commercial loans. Net losses on
uncollectible overdrafts are reported as net charge-offs in
the allowance for loan and lease losses within 60 days from
the date of overdraft. Uncollectible deposit fees are reversed
against fees and service charges and a related reserve for
uncollectible deposit fees is maintained in other liabilities.
Other deposit account losses are reported in other non-
interest expense. See Note 25 for additional information
concerning deposit account overdrafts.

Note 2. Cash and Due from Banks

At December 31, 2006, TCF was required by Federal Reserve
Board regulations to maintain reserve balances of $84.4
million in cash on hand or at the Federal Reserve Bank.

Note 3. Investments

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

(In thousands)
Federal Home Loan Bank stock, at cost:

Des Moines
Chicago and Topeka

Subtotal

Federal Reserve Bank stock, at cost
Interest-bearing deposits with banks
Federal funds sold

Total investments

At December 31,
2005
2006

$ 73,630
4,617
78,247
20,023
859
71,000
$170,129

$53,970
4,795
58,765
20,646
532
–
$79,943

2006 Form 10-K

The investments in FHLB stock are required investments
related to TCF’s borrowings from these banks. All new FHLB
borrowing activity since 2000 is done with the FHLB of Des
Moines. FHLBs obtain their funding primarily through
issuance of consolidated obligations of the Federal Home
Loan Bank System. The U.S. Government does not guarantee
these obligations, and each of the 12 FHLBs are generally
jointly and severally liable for repayment of each other’s
debt. Therefore, TCF’s investments in these banks could be
adversely impacted by the operations of the other FHLBs.

The carrying values and yields on investments at December

31, 2006, by contractual maturity, are shown below.

(Dollars in thousands)
Due in one year or less
No stated maturity (1)

Total

Carrying
Value
$ 71,859
98,270
$170,129

Yield
5.21%
4.55
4.83

(1) Balance represents Federal Reserve Bank and Federal Home Loan Bank stock,

required regulatory investments.

Note 4. Securities Available for Sale

Securities available for sale consist of the following.

2006

2005

At December 31,

(Dollars in thousands)
Mortgage-backed securities:

Federal agencies
Other

Other securities

Total

Weighted-average yield

Gross
Amortized Unrealized Unrealized
Losses

Gains

Gross

Cost

Fair
Value

Gross
Amortized Unrealized Unrealized
Losses

Gains

Gross

Cost

Fair
Value

$1,843,744
4,719
1,000
$1,849,463
5.37%

$880
–
–
$880

$(34,046) $1,810,578
4,548
1,000
$(34,217) $1,816,126

(171)
–

$1,675,203
5,655
1,000
$1,681,858
5.26%

$874
–
–
$874

$(33,921) $1,642,156
5,459
1,000
$(34,117) $1,648,615

(196)
–

Gross gains of $10.7 million and $22.6 million were recognized on sales of securities available for sale during 2005 and
2004, respectively. There were no sales of securities available for sale during 2006. Mortgage-backed securities aggregating
$1.7 billion and $1.5 billion were pledged as collateral to secure certain deposits and borrowings at December 31, 2006 and
2005, respectively (see Notes 10 and 11 for additional information).

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
December 31, 2006. Unrealized losses on securities available for sale are due to changes in interest rates and not due to credit
quality issues. TCF has the ability and intent to hold these investments until a recovery of fair value. Accordingly, TCF has con-
cluded that the unrealized losses are temporary, and no other than temporary impairment has occurred at December 31, 2006.

Less than 12 months

At December 31, 2006
12 months or more

Total

(In thousands)
Mortgage-backed securities:

Federal agencies
Other

Total

Fair Value

$270,636
–
$270,636

Unrealized
Losses

Fair Value

Unrealized
Losses

Fair Value

Unrealized
Losses

$(570)
–
$(570)

$1,271,984
4,101
$1,276,085

$(33,476)
(171)
$(33,647)

$1,542,620
4,101
$1,546,721

$(34,046)
(171)
$(34,217)

TCF Financial Corporation and Subsidiaries

(In thousands)
Mortgage-backed securities:

Federal agencies
Other

Total

Less than 12 months

Fair Value

$1,375,282
–
$1,375,282

Unrealized
Losses

$(31,250)
–
$(31,250)

At December 31, 2005
12 months or more

Total

Fair Value

$64,769
4,712
$69,481

Unrealized
Losses

Fair Value

Unrealized
Losses

$(2,671)
(196)
$(2,867)

$1,440,051
4,712
$1,444,763

$(33,921)
(196)
$(34,117)

Note 5. Loans and Leases

The following table sets forth information about loans and leases, excluding loans held for sale.

(Dollars in thousands)
Consumer home equity and other:

Home equity:

First mortgage lien
Junior lien

Total consumer home equity

Other

Total consumer home equity and other

Commercial:

Commercial real estate:

Permanent
Construction and development
Total commercial real estate

Commercial business

Total commercial

Leasing and equipment finance:(1)
Equipment finance loans
Lease financings:

Direct financing leases
Sales-type leases
Lease residuals
Unearned income and deferred lease costs

Total lease financings

Total leasing and equipment finance

Total consumer, commercial and leasing and equipment finance

Residential real estate

Total loans and leases

At December 31,
2006

2005

Percentage
Change

$ 3,781,458
2,101,210
5,882,668
62,409
5,945,077

$ 3,375,380
1,773,308
5,148,688
57,587
5,206,275

2,201,996
188,657
2,390,653
551,995
2,942,648

2,117,953
179,547
2,297,500
435,203
2,732,703

492,062

387,171

1,423,226
22,694
34,671
(154,488)
1,326,103
1,818,165
10,705,890
627,790
$11,333,680

1,180,370
18,495
32,882
(115,124)
1,116,623
1,503,794
9,442,772
770,441
$10,213,213

12.0%
18.5
14.3
8.4
14.2

4.0
5.1
4.1
26.8
7.7

27.1

20.6
22.7
5.4
(34.2)
18.8
20.9
13.4
(18.5)
11.0

(1) Operating leases of $80.4 million and $56.7 million at December 31, 2006 and 2005, respectively, are included in Other Assets on the Consolidated Statements of

Financial Condition.

The aggregate amount of loans to non-management
directors of TCF and their related interests was $44.1 million
and $55.5 million at December 31, 2006 and 2005, respec-
tively. During 2006, $105 thousand of new loans were made,
$5.2 million of loans were repaid and $6.3 million of loans

were removed due to the composition of outside directors
and their related interests. All loans to outside directors
and their related interests were made in the ordinary course
of business on normal credit terms, including interest rates
and collateral, as those prevailing at the time for comparable

2006 Form 10-K

transactions with unrelated persons. The aggregate amount
of loans to executive officers of TCF was $30 thousand and
$115 thousand at December 31, 2006 and 2005, respectively.
In the opinion of management, the above mentioned
loans to outside directors and their related interests and
executive officers do not represent more than a normal
risk of collection.

Future minimum lease payments for direct financing and

sales-type leases as of December 31, 2006 are as follows.

(In thousands)
2007
2008
2009
2010
2011
Thereafter
Total

Total
$ 516,704
364,753
245,090
150,641
75,466
22,189
$1,374,843

Note 6. Allowance for Loan and Lease Losses

Following is a summary of the allowance for loan and lease losses and selected statistics.

(Dollars in thousands)
Balance at beginning of year
Change in accounting principle (1)
Adjusted balance at beginning of year

Provision for credit losses
Charge-offs
Recoveries

Net charge-offs

Acquired allowance
Balance at end of year
Net charge-offs as a percentage of average loans and leases
Allowance for loan and lease losses as a percentage of total loans and leases at year end

(1) See Note 25: Accounting for Deposit Account Overdrafts.

Year Ended December 31,
2005
$ 75,393
–
75,393
8,586
(47,904)
19,748
(28,156)
–
$ 55,823

2004
$ 76,619
(4,159)
72,460
18,627
(34,595)
17,110
(17,485)
1,791
$ 75,393

2006
$ 55,823
–
55,823
20,689
(33,221)
15,252
(17,969)
–
$ 58,543

.17%
.52

.29%
.55

.20%
.80

Information relating to impaired loans and non-accrual loans and leases is as follows.

(In thousands)
Impaired loans and leases:
Balance, at year-end
Related allowance for loan and lease losses, at year-end (1)
Average impaired loans and leases
Interest income recognized on impaired loans and leases (cash basis)

Other non-accrual loans and leases:

Balance, at year-end
Interest income recognized on non-accrual loans and leases (cash basis)

Contractual interest on non-accrual loans and leases (2)

At or For the Year Ended December 31,
2004
2005
2006

$17,512
2,470
8,169
603

25,673
978
3,557

$ 3,791
1,642
5,345
76

25,857
960
2,900

$ 8,092
3,668
9,840
108

38,786
1,409
3,881

(1) There were no impaired loans and leases at December 31, 2006, 2005 and 2004 which did not have a related allowance for loan and lease losses.
(2) Represents interest which would have been recorded had the loans and leases performed in accordance with their contractual terms.

At December 31, 2006, 2005 and 2004, TCF had no material loans or leases outstanding with terms that had been modified

in troubled debt restructurings. There were no material commitments to lend additional funds to customers whose loans or
leases were classified as non-accrual at December 31, 2006. At December 31, 2006, accruing loans and leases delinquent for
90 days or more was $12.2 million, compared with $6.5 million at December 31, 2005.

TCF Financial Corporation and Subsidiaries

Note 7. Premises and Equipment

Premises and equipment are summarized as follows.

(In thousands)
Land
Office buildings
Leasehold improvements
Furniture and equipment

Subtotal

Less accumulated depreciation

and amortization
Total

At December 31,
2005
2006
$100,605
$118,656
194,078
218,171
50,537
54,474
254,450
273,412
599,670
664,713

258,626
$406,087

234,524
$365,146

TCF leases certain premises and equipment under oper-
ating leases. Net lease expense including utilities and other
operating expenses was $32.9 million, $30.2 million and
$25.4 million in 2006, 2005 and 2004, respectively.

At December 31, 2006, the total minimum rental payments

for operating leases were as follows.

(In thousands)
2007
2008
2009
2010
2011
Thereafter
Total

$ 27,200
24,090
21,856
20,345
17,599
96,653
$207,743

Note 8. Goodwill and Other Intangible Assets

Goodwill and other intangible assets are summarized as follows.

(In thousands)
Amortizable intangible assets:
Deposit base intangibles
Mortgage servicing rights

Total

Unamortizable intangible assets:

Goodwill related to the
banking segment
Goodwill related to the
leasing segment
Total

At December 31,

2006

Gross
Amount

Accumulated
Amortization

$20,224
–
$20,224

$ 21,180
–
$ 21,180

$141,245

11,354
$152,599

Net
Amount

956
–
956

$141,245

11,354
$152,599

2005

Gross
Amount

Accumulated
Amortization

Net
Amount

$ 21,180
82,389
$103,569

$141,245

11,354
$152,599

$18,594
45,055
$63,649

$ 2,586
37,334
$ 39,920

$141,245

11,354
$152,599

Amortization expense for intangible assets was $2.9 million, $11.8 million and $14.8 million for the years ended December 31,
2006, 2005 and 2004, respectively. The existing balance of deposit base intangibles will be fully amortized by the end of 2007.

2006 Form 10-K

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

(In thousands)
Mortgage servicing rights at beginning of year

Amortization
Impairment write-down
Loan originations

Sale of mortgage servicing rights

Mortgage servicing rights at end of year

Valuation allowance at beginning of year

Recovery (impairment)
Impairment write-down

Valuation allowance at end of year
Mortgage servicing rights, net

Mortgage servicing rights are included in other assets in the Consolidated Statements of Financial Condition.

Year Ended December 31,
2005
$ 49,942
(10,108)
(1,500)
–
–
38,334
(3,500)
1,000
1,500
(1,000)
$ 37,334

2004
$ 54,036
(13,091)
–
8,997
–
49,942
(2,000)
(1,500)
–
(3,500)
$ 46,442

2006
$ 38,334
(1,285)
–
–
(37,049)
–
(1,000)
1,000
–
–
–

Note 9. Deposits

Deposits are summarized as follows.

(Dollars in thousands)
Checking:

Non-interest bearing
Interest bearing

Total checking

Savings
Money market

Total checking, savings,
and money market

Certificates of deposit

Total deposits

Rate at
Year End

–%
1.86
.82
2.54
2.76

1.53
4.66
2.33

2006

Amount

$2,428,223
1,920,033
4,348,256
2,351,580
585,779

7,285,615
2,483,635
$9,769,250

At December 31,

% of
Total

24.9%
19.6
44.5
24.1
6.0

74.6
25.4
100.0%

Rate at
Year End

–%
1.60
.69
1.77
1.97

1.14
3.51
1.64

2005

Amount

$2,463,703
1,834,442
4,298,145
2,238,562
677,028

7,213,735
1,915,620
$9,129,355

% of
Total

27.0%
20.1
47.1
24.5
7.4

79.0
21.0
100.0%

At December 31, 2006, TCF had approximately $235 million of deposits held for sale related to the pending sale of 10

outstate Michigan branches.

Certificates of deposit had the following remaining maturities at December 31, 2006.

(In thousands)
Maturity
0-3 months
4-6 months
7-12 months
13-24 months
25-36 months
37-48 months
49-60 months
Over 60 months

Total

TCF Financial Corporation and Subsidiaries

$100,000
Minimum
$274,009
210,417
134,066
27,469
8,774
2,666
2,227
786
$660,414

Other
$ 527,419
614,209
475,234
144,464
35,045
12,367
10,893
3,590
$1,823,221

Total
$ 801,428
824,626
609,300
171,933
43,819
15,033
13,120
4,376
$2,483,635

Note 10. Short-term Borrowings

The following table sets forth selected information for short-term borrowings (borrowings with an original maturity of less
than one year) for each of the years in the three year period ended December 31, 2006.

(Dollars in thousands)
At December 31,

Federal funds purchased
Securities sold under

repurchase agreements

Federal Home Loan Bank advances
Line of credit
U.S. Treasury, tax and
loan borrowings
Total

Year ended December 31,
Average daily balance

Federal funds purchased
Securities sold under

repurchase agreements

Federal Home Loan Bank advances
Line of credit
U.S. Treasury, tax and
loan borrowings
Total

Maximum month-end balance
Federal funds purchased
Securities sold under

repurchase agreements

Federal Home Loan Bank advances
Line of credit
U.S. Treasury, tax and
loan borrowings

N.A. Not Applicable.

2006

2005

2004

Amount

Rate

Amount

Rate

Amount

$125,000

5.39%

$270,000

4.30%

$ 219,000

86,788
–
–

2,324
$214,112

4.95
–
–

4.99
5.20

29,101
150,000
16,500

6,525
$472,126

3.86
4.03
5.15

3.89
4.21

568,319
250,000
14,000

4,792
$1,056,111

Rate

2.29%

2.38
2.41
3.18

1.92
2.37

$502,200

5.06%

$308,062

3.46%

$ 203,216

1.45%

53,087
24,657
1,893

15,015
$596,852

$645,000

188,162
200,000
27,000

145,493

4.63
4.57
5.38

5.31
5.03

N.A.

N.A.
N.A.
N.A.

N.A.

518,953
68,630
18,075

3,945
$917,665

3.13
2.84
4.52

3.06
3.25

528,942
57,513
15,316

4,119
$ 809,106

$583,000

N.A.

$ 336,000

828,378
350,000
56,000

10,949

N.A.
N.A.
N.A.

N.A.

614,641
300,000
43,000

30,438

1.53
2.02
2.78

1.02
1.57

N.A.

N.A.
N.A.
N.A.

N.A.

The securities underlying the repurchase agreements
are book entry securities. During the borrowing period,
book entry securities were delivered by entry into the
counterparties’ accounts through the Federal Reserve
System. The dealers may sell, loan or otherwise dispose of
such securities to other parties in the normal course of their
operations, but have agreed to resell to TCF identical or sub-
stantially the same securities upon the maturities of the
agreements. At December 31, 2006, all of the securities sold
under repurchase agreements provided for the repurchase
of identical securities and were collateralized by mortgage-
backed securities having a fair value of $98.7 million.

TCF Financial Corporation (parent company only) has a
$105 million line of credit maturing in April 2007, which is
unsecured and contains certain covenants common to such
agreements. TCF is not in default with respect to any of
its covenants under the credit agreement at December 31,
2006. The interest rate on the line of credit is based on
either the prime rate or LIBOR. TCF has the option to select
the interest rate index and term for advances on the line of
credit. There was no balance outstanding under the line of
credit at December 31, 2006.

2006 Form 10-K

Note 11. Long-term Borrowings

Long-term borrowings consist of the following.

(Dollars in thousands)
Federal Home Loan Bank advances and securities

sold under repurchase agreements

Subtotal

Subordinated bank notes

Subtotal

Discounted lease rentals

Subtotal
Other borrowings

Subtotal

Total long-term borrowings

At December 31,

2006

Weighted-
Average
Rate

–%
3.65
5.26
6.02
4.85
4.16
4.49
4.58
5.27
5.37
5.63
5.43
–
7.13
7.30
7.27
7.16
7.25
7.20
–
4.50
4.51
5.00
4.59
4.49

2005

Weighted-
Average
Rate

5.22%
3.65
5.25
6.02
4.85
4.16
–
4.45
5.27
5.37
–
5.31
6.49
6.79
7.03
7.02
7.18
–
6.68
4.50
4.50
4.50
–
4.50
4.54

Amount

$ 303,000
200,000
122,500
100,000
200,000
1,400,000
–
2,325,500
74,373
49,305
–
123,678
28,193
18,323
6,569
1,811
336
–
55,232
2,200
2,200
2,200
–
6,600
$2,511,010

Year of
Maturity

2006
2007
2009
2010
2011
2015
2016

2014
2015
2016

2006
2007
2008
2009
2010
2011

2006
2007
2008
2009

Amount

–
200,000
117,000
100,000
200,000
1,400,000
1,100,000
3,117,000
74,545
49,458
74,337
198,340
–
27,566
16,000
7,390
2,287
431
53,674
–
2,222
2,226
966
5,414
$3,374,428

The next call year and stated maturity year for the callable

FHLB advances and repurchase agreements outstanding at
December 31, 2006 were as follows.

(Dollars in thousands)

Next
Call
Date
$ 417,000
1,100,000
1,000,000
300,000
100,000
–
–
$2,917,000

Weighted-
Average
Rate
5.24%
4.11
4.45
4.33
4.82
–
–
4.44

Stated Weighted-
Average
Rate
–
–
5.26%
6.02
4.85
4.16
4.49
4.44

Maturity
Date
–
–
$ 117,000
100,000
200,000
1,400,000
1,100,000
$2,917,000

Year
2007
2008
2009
2010
2011
2015
2016

Total

At December 31, 2006, TCF has pledged residential real
estate loans, consumer loans, commercial real estate loans
and FHLB stock with an aggregate carrying value of $3.8
billion as collateral for FHLB advances. Included in FHLB
advances and repurchase agreements at December 31, 2006
are $417 million of fixed-rate FHLB advances, which are
callable quarterly by our counterparties at par until maturity.
In addition, TCF has $1.6 billion of repurchase agreements
and $900 million of FHLB advances which are callable dur-
ing various years from 2008 through 2011. If $325 million of
FHLB Des Moines advances are called, replacement funding
will be provided by the FHLB Des Moines at the then-
prevailing market rate of interest for the remaining term-
to-maturity, subject to standard terms and conditions.
The probability that these advances and repurchase agree-
ments will be called depends primarily on the level of related
interest rates during the call period.

TCF Financial Corporation and Subsidiaries

The $75 million of subordinated notes due 2014 have a

The effective income tax rate differs from the federal

income tax rate of 35% as a result of the following.

fixed-rate coupon of 5% through June 14, 2009, and will
reprice quarterly thereafter at the three-month LIBOR rate
plus 1.63%. The $50 million of subordinated notes due 2015
have a fixed-rate coupon of 5% through March 14, 2010,
and will reprice quarterly thereafter at the three-month
LIBOR rate plus 1.56%. These subordinated notes may be
redeemed by TCF Bank at par after June 14, 2009, and March
14, 2010, respectively. The $75 million of subordinated notes
due 2016 have a fixed-rate coupon of 5.5%. These subordi-
nated notes qualify as Tier 2 or supplementary capital for
regulatory purposes, subject to certain limitations.

For certain equipment leases, TCF utilizes its lease rentals
and underlying equipment as collateral to borrow from other
financial institutions at fixed rates on a non-recourse basis.
In the event of a default by the customer on these financings,
the other financial institution has a first lien on the under-
lying leased equipment and TCF is only entitled to residual
proceeds in excess of the outstanding borrowing balance.
Additionally, in the case of non-recourse financings, the other
financial institution has no further recourse against TCF.

Note 12. Income Taxes

(In thousands)
Year ended December 31, 2006:

Federal
State

Total

$112,465
1,830
$114,295

(439)
(1,691)
$ (2,130)

$112,026
139
$112,165

Year ended December 31, 2005:

Federal
State

Total

$ 120,793
1,788
$ 122,581

$ (7,241)
(62)
$ (7,303)

$113,552
1,726
$115,278

Year ended December 31, 2004:

Federal
State

Total

$ 148,043
3,918
$ 151,961

$(21,765)
(713)
$(22,478)

$126,278
3,205
$129,483

Current

Deferred

Total

Total deferred tax assets

Year Ended December 31,
2004
2005
35.00%
35.00%

2006
35.00%

Federal income tax rate
Increase (decrease) in income
tax expense resulting from:
State income tax, net
of federal income
tax benefit

.03
Deductible stock dividends (1.14)
Investments in affordable

.29
(1.17)

.80
(1.01)

housing limited
partnerships
Changes in uncertain
tax positions

Other, net
Effective income tax rate

(.60)

(.64)

(.65)

(1.72)
(.16)
31.41%

(3.67)
.49
30.30%

(.68)
.22
33.68%

The significant components of the Company’s deferred

tax assets and deferred tax liabilities are as follows.

(In thousands)
Deferred tax assets:

Restricted stock and deferred

compensation plans

Allowance for loan and lease losses
Securities available for sale
Other

Deferred tax liabilities:
Lease financing
Loan fees and discounts
Premises and equipment
Investments in affordable housing
Investments in FHLB Stock
Pension and postretirement benefits
Mortgage servicing rights
Other

Total deferred tax liabilities

Net deferred tax liabilities

At December 31,
2006

2005

$ 30,817
21,531
11,748
6,947
71,043

94,928
24,000
9,220
3,244
3,112
1,241
–
8,870
144,615
$ 73,572

$ 33,225
20,780
12,028
6,760
72,793

95,541
22,466
6,007
3,021
3,116
8,110
10,996
6,205
155,462
$ 82,669

The Company has determined that a valuation allowance

for deferred tax assets is not necessary.

2006 Form 10-K

Note 13. Stockholders’ Equity

Restricted Retained Earnings Retained earnings at
December 31, 2006 includes approximately $134.4 million
for which no provision for federal income taxes has been
made. This amount represents earnings legally appropriated
to bad debt reserves and deducted for federal income tax
purposes and is generally not available for payment of cash
dividends or other distributions to shareholders. Future
payments or distributions of these appropriated earnings
could invoke a tax liability for TCF based on the amount of
the distributions and the tax rates in effect at that time.

Shareholder Rights Plan Each share of TCF common
stock outstanding includes one preferred share purchase
right. TCF’s preferred share purchase rights will become
exercisable only if a person or group acquires or announces
an offer to acquire 15% or more of TCF’s common stock.
When exercisable, each right will entitle the holder to buy
one one-hundredth of a share of a new series of junior par-
ticipating preferred stock at a price of $200. In addition,
upon the occurrence of certain events, holders of the rights
will be entitled to purchase either TCF’s common stock or
shares in an “acquiring entity” at half of the market value.
TCF’s Board of Directors is generally entitled to redeem the
rights at $.001 per right at any time before they become
exercisable. The rights will expire on June 9, 2009, if not
previously redeemed or exercised.

Treasury Stock and Other Treasury stock and other
consists of the following.

(In thousands)
Treasury stock, at cost
Shares held in trust for deferred
compensation plans, at cost
Total

At December 31,
2006

2005
$(27,827) $(945,159)

(50,493)
(32,945)
$(60,772) $(995,652)

TCF purchased 3.9 million, 3.5 million and 4 million shares
of its common stock during the years ended December 31,
2006, 2005 and 2004, respectively. At December 31, 2006,

TCF had 2.8 million shares remaining in its stock repurchase
programs authorized by the Board. In November 2006, TCF
retired 52.5 million shares of treasury stock which reduced
additional paid-in capital and retained earnings by $126.8
million and $876.7 million, respectively.

Shares Held in Trust for Deferred Compensation
Plans TCF has deferred compensation plans that
previously allowed eligible executives, senior officers and
certain other employees to defer payment of up to 100% of
their base salary and bonus as well as grants of restricted
stocks. There were no company contributions to these plans,
other than payment of administrative expenses. The amounts
deferred are invested in TCF stock or other publicly traded
stocks, bonds or mutual funds. Directors were and still are
allowed to defer up to 100% of their fees and restricted stock
awards. At December 31, 2006, the fair value of the assets
in the plans totaled $140 million and included $117.9 mil-
lion invested in TCF common stock. The cost of TCF common
stock held by TCF’s deferred compensation plans is reported
separately in a manner similar to treasury stock (that is,
changes in fair value are not recognized) with a correspon-
ding deferred compensation obligation reflected in
additional paid-in capital.

Note 14. Regulatory Capital Requirements

TCF is subject to various regulatory capital requirements
administered by the federal banking agencies. Failure to
meet minimum capital requirements can initiate certain
mandatory, and possible additional discretionary, actions
by the federal banking agencies that could have a direct
material effect on TCF’s financial statements. Also, in
general, TCF Bank may not declare or pay a dividend to TCF
in excess of 100% of its net profits for the current year
combined with its retained net profits for the preceding
two calendar years without prior approval of the Office of
the Comptroller of the Currency.

TCF Financial Corporation and Subsidiaries

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 minimum and well-capitalized
capital requirements.

(Dollars in thousands)
December 31, 2006:
Tier 1 leverage capital

TCF
TCF National Bank
Tier 1 risk-based capital

TCF
TCF National Bank
Total risk-based capital

TCF
TCF National Bank

As of December 31, 2005:
Tier 1 leverage capital

TCF
TCF National Bank
Tier 1 risk-based capital

TCF
TCF National Bank
Total risk-based capital

TCF
TCF National Bank

N.A. Not Applicable.

Actual

Minimum
Capital Requirement

Well-Capitalized
Capital Requirement

Amount

Ratio

Amount

Ratio

Amount

Ratio

$ 914,128
821,273

914,128
821,273

1,173,073
1,080,218

863,955
835,121

1,049,615
1,020,781

6.33%
5.70

8.65
7.79

11.10
10.24

$432,993
432,374

422,678
421,941

845,355
843,881

3.00%
3.00

N.A.
$ 720,623

4.00
4.00

8.00
8.00

634,016
632,911

1,056,694
1,054,851

6.61%
6.39

$392,306
392,000

3.00%
3.00

N.A.
653,333

8.79
8.52

10.68
10.41

393,128
392,275

786,257
784,551

4.00
4.00

8.00
8.00

589,693
588,413

982,821
980,688

N.A.
5.00%

6.00
6.00

10.00
10.00

N.A.
5.00%

6.00
6.00

10.00
10.00

At December 31, 2006, TCF, TCF National Bank and TCF
National Bank Arizona exceeded their regulatory capital
requirements and are considered “well-capitalized” under
guidelines established by the FRB and the OCC pursuant to
the Federal Deposit Insurance Corporation Improvement
Act of 1991.

Note 15. Stock Compensation

Effective January 1, 2006, TCF adopted Statement of Financial
Accounting Standards No. 123R, Share-Based Payment, for
the accounting for stock compensation. The adoption of this
Statement had no material impact on TCF’s financial state-
ments as TCF was previously accounting for stock compensa-
tion under Statement of Financial Accounting Standards No.
123. Both Statements utilize the fair value method at grant
date (“Grant Date Fair Value”) for stock compensation and
expense such cost. With the adoption of SFAS 123R, TCF elim-
inated its unamortized stock compensation from Treasury

Stock and Other against Additional Paid-in Capital in its
Consolidated Statements of Financial Condition. Also, TCF
now reports cash retained from excess tax benefits on stock
compensation (“stock compensation tax benefits”) as cash
flows from financing activities in its Consolidated Statements
of Cash Flows. Unamortized stock compensation and stock
compensation tax benefits were reclassified in prior periods
to conform to the current period presentation.

The fair value of restricted stock is determined on the

date of grant and amortized to compensation expense
over the longer of the service period or performance period,
but in no event beyond an employee’s retirement date. For
performance-based restricted stock, TCF estimates the
degree to which performance conditions will be met to
determine the number of shares which will vest and the
related compensation expense prior to the vesting date.
Compensation expense is adjusted in the period such esti-
mates change. Non-forfeitable dividends are recorded to
retained earnings for shares of restricted stock which are
expected to vest and to compensation expense for shares
of restricted stock which are not expected to vest.

2006 Form 10-K

Income tax benefits related to stock compensation in
excess of grant date fair value are recognized as an increase
to additional paid-in capital upon vesting and delivery of
the stock. Any income tax benefits that are less than grant
date fair value would be recognized as a reduction of addi-
tional paid-in capital to the extent of excess income tax
benefits previously added to additional paid-in capital and
then as compensation expense for the remaining amount.

The TCF Financial Incentive Stock Program (the “Program”)
was adopted to enable TCF to attract and retain key person-
nel. Under the Program, no more than 5% of the shares of
TCF common stock outstanding on the date of initial share-
holder approval may be awarded. At December 31, 2006,
there were 4,082,971 shares reserved for issuance under the
Program, including 231,133 shares related to outstanding
stock options that are fully vested.

At December 31, 2006, there were 1,500,541 shares of
performance-based restricted stock that will vest only if
certain earnings per share goals and service conditions are
achieved. Failure to achieve the goals and service conditions
will result in all or a portion of the shares being forfeited.
Other restricted stock grants vest over periods from three
to seven years. The weighted-average grant date fair value
of restricted stock was $25.31, $27.78 and $28.14 for

shares granted in 2006, 2005 and 2004, respectively.
Compensation expense for restricted stock totaled $7.0
million, $4.7 million and $6.4 million in 2006, 2005 and 2004,
respectively. The recognized tax benefit for stock compen-
sation expense was $2.3 million, $1.6 million and $2.2 mil-
lion in 2006, 2005 and 2004, respectively. Unrecognized
stock compensation for restricted stock awards was $19.6
million with a weighted-average remaining amortization
period of 2 years at December 31, 2006, compared with
$20.4 million with a weighted-average remaining amortiza-
tion period of 1.8 years at December 31, 2005 and $13.2
million with a weighted-average remaining amortization
period of 1.4 years at December 31, 2004.

TCF has also issued stock options under the Program that

generally become exercisable over a period of one to 10
years from the date of the grant and expire after 10 years.
All outstanding options have a fixed exercise price equal to
the market price of TCF common stock on the date of grant.
As of December 31, 2006 and 2005, all outstanding stock
options are vested. Stock options outstanding and exercis-
able at December 31, 2006 had exercise prices ranging from
$11.78 to $16.64, a weighted-average exercise price of
$13.93 and a weighted-average contractual life of two years.

The following table reflects TCF’s stock option and restricted stock transactions under the Program since December 31, 2003.

Restricted Stock

Stock Options

Exercise Price

Shares
3,061,154
149,120
–
(62,980)
(115,068)
3,032,226
526,400
–
(111,185)
(1,138,165)
2,309,276
713,900
–
(133,535)
(270,300)
2,619,341
N.A.

Price Range
$ 9.87-$20.38
24.33- 30.28
–
11.05- 30.13
11.05- 24.10
9.87- 30.28
25.97- 28.71
–
11.05- 30.28
9.87- 21.85
9.87- 30.28
25.18- 26.69
–
9.87- 30.28
18.03- 24.10
9.87- 30.28
N.A.

Shares
481,696
–
(155,832)
–
–
325,864
–
(66,064)
–
–
259,800
–
(28,667)
–
–
231,133
231,133

Range
$ 3.44-$16.64
–
3.44- 16.64
–
–
5.71- 16.64
–
5.71- 16.64
–
–
11.78- 16.64
–
11.78- 16.09
–
–
11.78- 16.64
11.78- 16.64

Weighted-
Average
$12.88
–
12.81
–
–
12.91
–
9.60
–
–
13.76
–
12.33
–
–
13.93
13.93

Outstanding at December 31, 2003

Granted
Exercised
Forfeited
Vested

Outstanding at December 31, 2004

Granted
Exercised
Forfeited
Vested

Outstanding at December 31, 2005

Granted
Exercised
Forfeited
Vested

Outstanding at December 31, 2006
Exercisable at December 31, 2006

N.A. Not Applicable.

TCF Financial Corporation and Subsidiaries

Note 16. Employee Beneﬁt Plans

Employee Stock Purchase Plan The TCF Employees
Stock Purchase Plan generally allows participants to make
contributions of up to 50% of their salary and bonus on a
tax-deferred basis. TCF matches the contributions of all
participants with TCF common stock at the rate of 50 cents
per dollar, with a maximum company contribution of 3% of
the employee’s salary. Effective April 1, 2006, TCF amended
the TCF Employees Stock Purchase Plan to increase the
employer match to 75 cents per dollar for employees with
five through nine years of service, up to a maximum company
contribution of 4.5% of the employee’s salary and bonus,
and to $1 per dollar for employees with ten or more years of
service, up to a maximum company contribution of 6% of
the employee’s salary and bonus. Employee contributions
vest immediately while the Company’s matching contribu-
tions are subject to a graduated vesting schedule based on
an employee’s years of vesting service with full vesting after
five years. Employees have the opportunity to diversify and
invest their vested account balance in various mutual funds
or TCF common stock. At December 31, 2006, the fair value
of the assets in the plan totaled $227.6 million and included
$207.8 million invested in TCF common stock. The Company’s
matching contributions are expensed when made. TCF’s
contributions to the plan were $5.1 million, $4.3 million and
$4 million in 2006, 2005 and 2004, respectively.

Pension Plan The TCF Cash Balance Pension Plan (the
“Pension Plan”) is a qualified defined benefit plan covering
eligible employees who are at least 21 years old and have
completed a year of eligibility service with TCF. Employees
hired after June 30, 2004 are not eligible to participate in
the Pension Plan. TCF previously made a monthly allocation
to the participant’s account based on a percentage of the
participant’s compensation. The percentage was based on
the sum of the participant’s age and years of employment
with TCF and includes interest on the account balance based
on the five-year Treasury rate plus 25 basis points for 2006
and 2005. TCF amended the Pension Plan to discontinue com-
pensation credits for all participants effective March 31, 2006.

Interest credits will continue to be paid until participants’
accounts are distributed from the Pension Plan. All unvested
participant accounts were vested on March 31, 2006.

TCF accounts for the Pension Plan in accordance with

Statement of Financial Accounting Standard (“SFAS”)
No. 87 “Employers’ Accounting for Pensions,” as amended
by SFAS No.158 “Employers’ Accounting for Defined Benefit
Pension and Other Postretirement Plans”. The Company does
not consolidate the assets and liabilities associated with
the Pension Plan.

The measurement of the projected benefit obligation,
prepaid pension asset, pension liability and annual pension
expense involves complex actuarial valuation methods and
the use of actuarial and economic assumptions. Due to the
long-term nature of the pension plan obligation, actual
results may differ significantly from the actuarial-based
estimates. Differences between estimates and actual
experience are required to be deferred and under certain
circumstances amortized over the future expected working
lifetime of plan participants. As a result, these differences
are not recognized when they occur. TCF closely monitors all
assumptions and updates them annually.

Postretirement Plan TCF provides health care benefits
for eligible retired employees (the “Postretirement Plan”).
Effective January 1, 2000, TCF modified the Postretirement
Plan for employees not yet eligible for benefits under the
Postretirement Plan by eliminating the Company subsidy.
The plan provisions for full-time and retired employees
then eligible for these benefits were not changed. The
Postretirement Plan is not funded.

In 2006, the Financial Accounting Standards Board,
(“FASB”), issued SFAS 158. For fiscal years ending after
December 15, 2006, it requires companies to reflect each
defined benefit and other postretirement benefits plan’s
funded status on the company’s balance sheet. TCF has
implemented these provisions for the year ended December
31, 2006. SFAS 158 also requires TCF to change its measure-
ment date from September 30 to December 31 on or before
December 31, 2008.

The impact of initial application of SFAS 158 on individual items of TCF's Consolidated Statements of Financial Condition at

December 31, 2006 is as follows.

(In thousands)
Prepaid pension cost (included in other assets)
Accrued postretirement plan obligation (included in other liabilities)
Net deferred tax liability
Accumulated other comprehensive loss

Balance Before
Application of
SFAS 158
$ 23,922
5,239
80,816
(21,589)

Balance After
Application of
SFAS 158
$ 7,512
9,410
73,572
(34,926)

Adjustment
$(16,410)
4,171
(7,244)
(13,337)

2006 Form 10-K

The amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic

benefit cost during 2007 are as follows.

(In thousands)
Transition obligation
Net loss

Pension Plan
$
–
3,397

Postretirement
Plan
$101
223

Total
$ 101
3,620

The following table sets forth the status of the Pension Plan and the Postretirement Plan at the dates indicated.

(In thousands)
Benefit obligation:

Accrued participant balance – vested
Accrued participant balance – unvested

Subtotal

Present value of future service and benefits

Total projected benefit obligation

Accumulated benefit obligation

Change in benefit obligation:

Benefit obligation at beginning of year
Service cost – benefits earned during the year
Interest cost on projected benefit obligation
Plan amendments
Actuarial loss (gain)
Benefits paid

Projected benefit obligation at end of year

Change in fair value of plan assets:

Fair value of plan assets at beginning of year
Actual return on plan assets
Benefits paid
TCF contributions

Fair value of plan assets at end of year

Funded status of plans:

Funded status at end of year
Unamortized transition obligation
Unamortized prior service cost
Actuarial net loss

Prepaid (accrued) benefit cost at end of year

(before application of SFAS 158)

Amounts recognized in Statement of Financial Condition

after the application of SFAS 158:
Prepaid (accrued) benefit cost at end of year

Amounts not yet recognized in net periodic benefit cost and

included in accumulated other comprehensive loss, before tax:

Transition obligation
Accumulated actuarial net loss
Accumulated other comprehensive loss (AOCL), before tax

Total prepaid (accrued) benefit cost and AOCL

N.A. Not Applicable.

Pension Plan
Year Ended December 31,
2005

2006

Postretirement Plan
Year Ended December 31,
2005

2006

$58,718
–
58,718
(1,953)
$56,765
$56,765

$62,076
1,421
3,109
(6,479)
3,370
(6,732)
56,765

61,950
5,059
(6,732)
4,000
64,277

7,512
–
–
16,410

$56,436
3,038
59,474
2,602
$62,076
$55,611

$55,214
5,303
3,428
–
1,678
(3,547)
62,076

58,561
6,936
(3,547)
–
61,950

(126)
–
(421)
23,626

N.A.
N.A.
N.A.
N.A.
N.A.
N.A.

$ 8,656
26
433
–
1,341
(1,046)
9,410

–
–
(1,046)
1,046
–

(9,410)
605
–
3,566

N.A.
N.A.
N.A.
N.A.
N.A.
N.A.

$ 9,675
35
552
(207)
(249)
(1,150)
8,656

–
–
(1,150)
1,150
–

(8,656)
706
–
2,344

$23,922

$23,079

$(5,239)

$(5,606)

$ 7,512

$23,079

$(9,410)

$(5,606)

–
16,410
16,410
$23,922

–
–
–
$23,079

605
3,566
4,171
$(5,239)

–
–
–
$(5,606)

TCF Financial Corporation and Subsidiaries

The measurement dates used for determining the Pension Plan and the Postretirement Plan projected and accumulated
benefit obligations and the date used to value plan assets were September 30, 2006 and 2005. The discount rate and rate of
increase in future compensation used to measure the benefit obligation were as follows.

Assumptions used to determine benefit obligations
Discount rate
Rate of compensation increase

N.A. Not Applicable.

Pension Plan
Year Ended December 31,
2006

Postretirement Plan
Year Ended December 31,
2006

5.5%
N.A.

2005
5.25%
4.0

5.5%
N.A.

2005
5.25%
N.A.

Net periodic benefit cost included in compensation and employee benefits expense consists of the following.

(In thousands)
Service cost
Interest cost
Expected return on plan assets
Amortization of transition obligation
Amortization of prior service cost
Recognized actuarial loss
Plan amendment/curtailment gain
Net periodic benefit cost

Pension Plan
Year Ended December 31,

2006
$ 1,421
3,109
(5,023)
–
(21)
4,072
(400)
$ 3,158

2005
$ 5,303
3,428
(5,727)
–
(249)
1,050
–
$ 3,805

2004
$ 4,632
3,164
(5,955)
–
(233)
–
–
$ 1,608

Postretirement Plan
Year Ended December 31,
2005
$ 35
552
–
131
–
139
–
$857

2004
53
672
–
210
–
215
–
$1,150

2006
$ 26
433
–
101
–
119
–
$679

The discount rate, the expected long-term rate of return on plan assets and the rate of increase in future compensation used

to determine the net benefit cost were as follows.

Assumptions used to
determine net benefit cost
Discount rate
Expected long-term rate of return

on plan assets

Rate of compensation increase

Pension Plan
Year Ended December 31,
2005

2006
5.25/5.5% (1)

8.75
4.0

6.0%

8.75
4.0

2004

6.0%

8.5
4.5

2006
5.25%

N.A.
N.A.

Postretirement Plan
Year Ended December 31,
2005

6.0%

N.A.
N.A.

2004

6.0%

N.A.
N.A.

(1) Due to a curtailment and liability remeasurement as of February 1, 2006 for the Pension Plan, the discount rate used to determine net benefit cost was increased from 5.25%

for the period ending February 1, 2006 to 5.5% for the period ended December 31, 2006.

N.A. Not Applicable.

TCF’s Pension Plan assets are invested in index mutual
funds that are designed to mirror the performance of the
Standard and Poor’s 500 and the Morgan Stanley Capital
International U.S. Mid-Cap 450 indexes, at targeted weight-
ings of 75% and 25%, respectively. Prior to December 2004,
the assets were managed by external investment managers
on a discretionary basis subject to certain restrictions and
limitations.

The actuarial assumptions used in the Pension Plan
valuation are reviewed annually. The expected long-term
rate of return on plan assets is determined by reference

to historical market returns and future expectations. The
10-year weighted-average return of the indexes consistent
with the Plan’s current investment strategy was 9.6%, net
of administrative expenses. Although past performance is
no guarantee of the future results, TCF is not aware of any
reasons why it should not be able to achieve the assumed
future (beginning 2007) average long term annual returns
of 8.5%, net of administrative expenses, on plan assets over
complete market cycles. A 1% difference in the expected
return on plan assets would result in a $581 thousand change
in net periodic pension expense.

2006 Form 10-K

The discount rate used to determine TCF’s pension and

The following table presents assumed health care cost

trend rates for the Postretirement Plan at December 31,
2006 and 2005.

Health care cost trend rate assumed

for next year

Final health care cost trend rate
Year that final health care trend

rate is reached

2006

2005

7.4%
5%

8.6%
5%

2009

Assumed health care cost trend rates have an effect on
the amounts reported for the Postretirement Plan. A one-
percentage-point change in assumed health care cost trend
rates would have the following effects:

(In thousands)
Effect on total of service and
interest cost components

Effect on postretirement
benefits obligations

1-Percentage-Point
Decrease

Increase

$ 19

$ (16)

379

(342)

Note 17. Financial Instruments
with Off-Balance Sheet Risk

TCF is a party to financial instruments with off-balance
sheet risk, primarily to meet the financing needs of its cus-
tomers. These financial instruments, which are issued or
held for purposes other than trading, involve elements of
credit and interest-rate risk in excess of the amount recog-
nized in the Consolidated Statements of Financial Condition.

TCF’s exposure to credit loss, in the event of non-

performance by the counterparty to the financial instrument,
for commitments to extend credit and standby letters of
credit is represented by the contractual amount of the
commitments. TCF uses the same credit policies in making
these commitments as it does for making direct loans. TCF
evaluates each customer’s creditworthiness on a case-by-
case basis. The amount of collateral obtained is based on
management’s credit evaluation of the customer.

postretirement benefit obligations as of December 31,
2006 and December 31, 2005 was determined by matching
estimated benefit cash flows to a yield curve derived from
corporate bonds rated AA by Moody’s. Bonds containing
call or put provisions were excluded. The average estimated
duration of TCF’s Pension and Postretirement Plans varied
between seven and eight years. In prior years, the discount
rate was determined based on the Moody’s AA and Citigroup
Pension Liability long-term bond indexes.

The actual return on plan assets, net of administrative
expenses was 8.5% for 2006 and 11.5% for 2005. In 2005,
the actuarial loss decreased by $1.7 million due to the
11.5% rate of return on plan assets. In 2006, the amendment
to discontinue compensation credits effective April 1, 2006
decreased the actuarial loss by $6.5 million, net of an
increase due to the vesting of all participants. The increase
in the discount rate from 5.25% at December 31, 2005 to 5.5%
at December 31, 2006 decreased the actuarial loss by $926
thousand. The increase in the interest crediting rate from
4.75% at December 31, 2005 to 5.0% at December 31, 2006
increased the actuarial loss by $657 thousand. Various plan
participant census changes increased the actuarial loss by
$3.6 million in 2006. The decrease in the actuarial loss in
2005 was primarily due to the actual return on plan assets
and various plan participant census changes, partially offset
by an increase due to the change in the discount rate
assumption from 6.0% to 5.25%.

For 2006, TCF is eligible to contribute an additional $4.5

million to the Pension Plan until the 2006 federal income
tax return has been filed under various IRS funding methods,
but is not required to make any contributions. TCF currently
has no plans to contribute to the Pension Plan in 2007. TCF
expects to contribute $1 million to the Postretirement Plan
in 2007. TCF contributed $1 million to the Postretirement
Plan in 2006. TCF currently has no plans to pre-fund the
Postretirement Plan in 2007.

The following are expected future benefit payments used

to determine projected benefit obligations.

(In thousands)
2007
2008
2009
2010
2011
2012-2016

Pension
Plan
$ 6,994
5,234
4,836
4,795
4,463
19,724

Postretirement
Plan
$ 987
980
964
925
893
4,020

TCF Financial Corporation and Subsidiaries

Financial instruments with off-balance sheet risk are

summarized as follows.

Note 18. Fair Values
of Financial Instruments

(In thousands)
Commitments to extend credit:

At December 31,
2006

2005

Consumer home equity and other
Commercial
Leasing and equipment finance
Other

$1,889,100
618,055
91,271
79,444

$1,750,738
811,652
87,909
77,766

Total commitments to
extend credit

Loans serviced with recourse
Standby letters of credit and
guarantees on industrial
revenue bonds
Total

2,677,870
–

2,728,065
71,332

96,285
$2,774,155

100,892
$2,900,289

Commitments to Extend Credit Commitments to
extend credit are agreements to lend provided there is no
violation of any condition in the contract. These commit-
ments generally have fixed expiration dates or 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 neces-
sarily represent future cash requirements. Collateral to
secure these commitments predominantly consists of
residential and commercial real estate.

Standby Letters of Credit and Guarantees on
Industrial Revenue Bonds 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 commit-
ments expire in various years through the year 2018. Collateral
held primarily consists of commercial real estate mortgages.
Since the conditions under which TCF is required to fund
these commitments may not materialize, the cash require-
ments are expected to be less than the total outstanding
commitments.

TCF is required to disclose the estimated fair value of finan-
cial instruments, both assets and liabilities on and off the
balance sheet, for which it is practicable to estimate fair
value. Fair value estimates are made at a specific point in
time, based on relevant market information and information
about the financial instruments. Fair value estimates are
subjective in nature, involving uncertainties and matters of
significant judgment, and therefore cannot be determined
with precision. Changes in assumptions could significantly
affect the estimated values.

The carrying amounts of cash and due from banks,
investments and accrued interest payable and receivable
approximate their fair values due to the short period of
time until their expected realization. Securities available
for sale are carried at fair value, which is based on quoted
market prices. Certain financial instruments, including
lease financings, discounted lease rentals and all non-
financial instruments are excluded from fair value of
financial instrument disclosure requirements.

The following methods and assumptions are used by the
Company in estimating fair value for its remaining financial
instruments, all of which are issued or held for purposes
other than trading.

Loans The fair value of residential loans is estimated based
on quoted market prices of loans with similar characteristics.
For certain variable-rate loans that reprice frequently and
that have experienced no significant change in credit risk, fair
values are based on carrying values. The fair values of other
loans are estimated by discounting contractual cash flows,
adjusted for prepayment estimates, using interest rates
currently being offered for loans with similar terms to bor-
rowers with similar credit risk characteristics.

Deposits The fair value of checking, savings and money
market deposits is deemed equal to the amount payable on
demand. The fair value of certificates of deposit is estimated
based on discounted cash flow analyses using actual rates
offered for FHLB advances, which represents TCF’s primary
alternative source of funds. The intangible value of long-
term relationships with depositors is not taken into account
in the fair values disclosed.

2006 Form 10-K

Borrowings The carrying amounts of short-term borrow-
ings approximate their fair values. The fair values of TCF’s
long-term borrowings are estimated based on quoted market
prices or discounted cash flow analyses using interest rates
for borrowings of similar remaining maturities.

Financial Instruments with Off-Balance Sheet Risk
The fair values of TCF’s commitments to extend credit and
standby letters of credit are estimated using fees currently
charged to enter into similar agreements. For fixed-rate
loan commitments and standby letters of credit issued in
conjunction with fixed-rate loan agreements, fair value
also considers the difference between current levels of
interest rates and the committed rates.

The carrying amounts of certain of the Company’s financial instruments approximate their fair value. The carrying amounts

and fair values of the Company’s remaining financial instruments are set forth in the following table.

At December 31,

2006

2005

Carrying
Amount

Estimated
Fair Value

Carrying
Amount

Estimated
Fair Value

144,574

145,464

229,820

233,192

1,232,315
4,712,762
5,945,077
2,390,653
551,995
492,062
627,790
(48,480)
$10,103,671

$7,285,615
2,483,635
214,112
3,374,428
$13,357,790

1,232,315
4,597,165
5,829,480
2,377,243
551,319
489,105
615,373
–
$10,007,984

$ 7,285,615
2,471,847
214,112
3,359,300
$13,330,874

1,389,741
3,816,534
5,206,275
2,297,500
435,203
387,171
770,441
(43,856)
$ 9,282,554

$ 7,213,735
1,915,620
472,126
2,511,010
$12,112,491

1,389,741
3,768,008
5,157,749
2,296,035
432,925
381,668
760,545
–
$ 9,262,114

$ 7,213,735
1,899,994
472,126
2,525,867
$12,111,722

35,254
(200)
–
35,054

33,274
(126)
(75)
33,073

(In thousands)
Financial instrument assets:

Education loans held for sale
Loans:

Consumer home equity and other:
Home equity lines of credit (1)
Closed-end loans and other

Total consumer home equity and other

Commercial real estate
Commercial business
Equipment finance loans
Residential real estate

Allowance for loan losses (2)

Total financial instrument assets

Financial instrument liabilities:

Checking, savings and money market deposits
Certificates of deposit
Short-term borrowings
Long-term borrowings

Total financial instrument liabilities

Financial instruments with off-balance-sheet risk:(3)

Commitments to extend credit (4)
Standby letters of credit (5)
Loans serviced with recourse (5)

Total financial instruments with off-balance-sheet risk

(1) Excludes fixed-term amounts under lines of credit included in closed-end loans.
(2) Excludes the allowance for lease losses.
(3) Positive amounts represent assets, negative amounts represent liabilities.
(4) Carrying amounts are included in other assets.
(5) Carrying amounts are included in accrued expenses and other liabilities.

TCF Financial Corporation and Subsidiaries

Note 19. Earnings Per Common Share

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

(Dollars in thousands, except per-share data)
Basic Earnings Per Common Share
Net income
Weighted-average shares outstanding
Restricted stock

Weighted-average common shares outstanding for basic earnings

per common share
Basic earnings per common share

Diluted Earnings Per Common Share
Net income
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

Net dilutive effect of:
Restricted stock
Stock options

Weighted-average common shares outstanding for diluted earnings

per common share

Diluted earnings per common share

Year Ended December 31,

2006

2005

2004

244,943
$
131,614,386
(2,604,836)

265,132
$
134,652,568
(2,274,032)

254,993
$
139,656,829
(3,040,397)

129,009,550
1.90
$

132,378,536
2.00
$

136,616,432
1.87
$

244,943

265,132

254,993

129,009,550

132,378,536

136,616,432

110,455
105,480

226,179
137,144

375,631
182,577

129,225,485
1.90
$

132,741,859
2.00
$

137,174,640
1.86
$

All shares of restricted stock are deducted from weighted-average shares outstanding for the computation of basic earnings
per common share. Shares of performance-based restricted stock are included in the calculation of diluted earnings per common
share, using the treasury stock method, at the beginning of the quarter in which the performance goals have been achieved.
All other shares of restricted stock, which vest over specified time periods, and stock options are included in the calculation
of diluted earnings per common share, using the treasury stock method.

Note 20. Comprehensive Income

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

(In thousands)
Net income
Other comprehensive loss:

Unrealized holding (losses) gains arising during the period

on securities available for sale

Reclassification adjustment for gains included in net income
Income tax (expense) benefit

Total other comprehensive loss

Comprehensive income

Year Ended December 31,

2006
$244,943

2005
$265,132

2004
$254,993

(94)
–
(280)
(374)
$244,569

(20,360)
(10,671)
11,231
(19,800)
$245,332

11,522
(22,600)
4,011
(7,067)
$247,926

2006 Form 10-K

Note 21. Other Expense

Other expense consists of the following.

(In thousands)
Other deposit account losses
Card processing and issuance
Postage and courier
Telecommunications
Office supplies
ATM processing
Foreclosed real estate, net
Federal deposit insurance and OCC assessments
Deposit base intangible amortization
Other

Total other expense

2006
$ 17,455
16,986
14,532
12,702
10,255
8,956
3,684
3,033
1,629
62,217
$151,449

Year Ended December 31,

2005
$ 16,821
15,588
14,303
12,305
10,009
8,935
2,253
2,777
1,659
58,834
$143,484

2004
$ 14,365
12,446
14,002
12,459
9,891
9,171
(174)
2,682
1,662
55,533
$132,037

Note 22. Business Segments

Banking and leasing and equipment finance have been
identified as reportable operating segments. Banking
includes the following operating units that provide finan-
cial services to customers: deposits and investments prod-
ucts, commercial banking, consumer lending and treasury
services. Management of TCF’s banking operations are
organized by state. The separate state operations have
been aggregated for purposes of segment disclosures.
Leasing and equipment finance provides a broad range of
comprehensive leasing and equipment finance products

addressing the financing needs of diverse businesses. In
addition, TCF’s bank holding company (“Parent Company”)
and corporate functions provide data processing, bank
operations and other professional services to the operating
segments.

TCF evaluates performance and allocates resources
based on the segments’ net income. The business segments
follow generally accepted accounting principles as described
in the Summary of Significant Accounting Policies. TCF gener-
ally accounts for inter-segment sales and transfers at cost.

TCF Financial Corporation and Subsidiaries

The following table sets forth certain information of each of TCF’s reportable segments, including a reconciliation of
TCF’s consolidated totals. The “other” category in the table below includes TCF’s parent company, corporate functions and
mortgage banking.

(In thousands)
At or For the Year Ended
December 31, 2006:

Revenues from external customers:

Interest income
Non-interest income

Total
Net interest income
Provision for credit losses
Non-interest income
Non-interest expense
Income tax expense (benefit)

Net income

Total assets

At or For the Year Ended
December 31, 2005:

Revenues from external customers:

Interest income
Non-interest income

Total
Net interest income
Provision for credit losses
Non-interest income
Non-interest expense
Income tax expense
Net income

Total assets

At or For the Year Ended
December 31, 2004:

Revenues from external customers:

Interest income
Non-interest income

Total
Net interest income
Provision for credit losses
Non-interest income
Non-interest expense
Income tax expense (benefit)

Net income (loss)

Total assets

Leasing and
Equipment
Finance

Eliminations
and
Reclassifications

Other

Banking

Consolidated

763,846
428,413
$ 1,192,259
477,453
$
18,121
428,413
585,512
93,786
$
208,447
$14,256,595

634,312
425,017
$ 1,059,329
455,549
$
4,593
425,017
549,586
96,505
229,882
$
$ 12,931,312

$ 122,292
53,004
$ 175,296
58,659
$
2,568
53,004
56,932
18,773
$
33,390
$1,989,230

$
$

97,596
47,465
145,061
57,014
3,993
47,465
48,596
18,493
33,397
$
$ 1,635,528

$
$

529,281
426,255
955,536
427,521
11,821
426,255
508,421
113,628
$
219,906
$ 11,927,658

$
$

89,364
50,697
140,061
55,699
6,806
50,697
43,718
20,000
$
35,872
$ 1,460,778

–
8,047
$ 8,047
445
$
–
134,645
132,378
(394)
$ 3,106
$131,509

114
5,760
$ 5,874
$ 2,780
–
125,337
125,984
280
$ 1,853
$ 195,355

$ 4,164
12,934
$ 17,098
$ 7,336
–
109,996
122,262
(4,145)
$
(785)
$ 212,701

$
$

–
–
–
973
–
(126,598)
(125,625)
–
$
–
$(1,707,600)

$
$

–
–
–
2,347
–
(119,577)
(117,230)
–
–
$
$ (1,373,601)

$
$

–
–
–
1,335
–
(97,062)
(95,727)
–
$
–
$ (1,224,172)

886,138
489,464
$ 1,375,602
537,530
$
20,689
489,464
649,197
112,165
$
244,943
$14,669,734

732,022
478,242
$ 1,210,264
517,690
$
8,586
478,242
606,936
115,278
265,132
$
$ 13,388,594

622,809
489,886
$ 1,112,695
491,891
$
18,627
489,886
578,674
129,483
$
254,993
$ 12,376,965

2006 Form 10-K

Note 23. Parent Company Financial Information

TCF Financial Corporation’s (parent company only) condensed statements of financial condition as of December 31, 2006
and 2005, and the condensed statements of income and cash flows for the years ended December 31, 2006, 2005 and 2004
are as follows.

At December 31,

2006

2005

17,652
975,466
4,691
22,237
21,994
$1,042,040

–
8,666
8,666
1,033,374
$1,042,040

2,670
969,638
12,000
20,152
22,026
$1,026,486

16,500
11,514
28,014
998,472
$1,026,486

Year Ended December 31,
2005
38
818
(780)
165,025

2004
87
426
(339)
154,146

10,067
746
10,813

8,618
403
2,386
11,407
163,651
1,342
164,993
100,139
$265,132

11,859
69
11,928

10,742
1,137
1,578
13,457
152,278
3,382
155,660
99,333
$254,993

Condensed Statements of Financial Condition

(In thousands)
Assets:
Cash
Investment in bank subsidiaries
Dividends receivable from bank subsidiaries
Accounts receivable from affiliates
Other assets

Total assets

Liabilities and Stockholders’ Equity:

Short-term borrowings
Other liabilities

Total liabilities
Stockholders’ equity

Total liabilities and stockholders’ equity

Condensed Statements of Income

(In thousands)
Interest income
Interest expense

Net interest expense

Dividends from TCF National Bank
Other non-interest income:
Affiliate service fees
Other

Total other non-interest income

Non-interest expense:

Compensation and employee benefits
Occupancy and equipment
Other

Total non-interest expense

Income before income tax benefit and equity in undistributed earnings of subsidiaries
Income tax benefit

Income before equity in undistributed earnings of subsidiaries

Equity in undistributed earnings of bank subsidiaries
Net income

2006
–
232
(232)
203,908

7,921
1,901
9,822

7,255
414
2,982
10,651
202,847
1,558
204,405
40,538
$244,943

TCF Financial Corporation and Subsidiaries

In December 2006, TCF contributed $35 million in initial capital to TCF National Bank Arizona to meet regulatory

requirements and to fund its operations.

Condensed Statements of Cash Flows

(In thousands)
Cash flows from operating activities:

Year Ended December 31,

2006

2005

2004

Net income
Adjustments to reconcile net income to net cash provided by operating activities:

$ 244,943

$ 265,132

$ 254,993

Equity in undistributed earnings of bank subsidiaries
Other, net

Total adjustments

Net cash provided by operating activities

Cash flows from investing activities:

Capital distribution from TCF National Bank
Investment in TCF National Bank Arizona
Purchases of premises and equipment, net

Net cash provided by investing activities

Cash flows from financing activities:
Dividends paid on common stock
Purchases of common stock
Net increase (decrease) in short-term borrowings
Stock compensation tax benefits
Other, net

Net cash used by financing activities

Net increase (decrease) in cash
Cash at beginning of year
Cash at end of year

(33,229)
(18,713)
(51,942)
193,001

75,000
(35,000)
(104)
39,896

(121,405)
(101,045)
(16,500)
20,681
354
(217,915)
14,982
2,670
$ 17,652

(107,548)
(13,594)
(121,142)
143,990

50,000
–
(28)
49,972

(114,543)
(93,499)
2,500
10,716
577
(194,249)
(287)
2,957
2,670

(92,524)
1,722
(90,802)
164,191

75,000
–
(155)
74,845

(104,037)
(116,134)
(23,000)
2,242
1,996
(238,933)
103
2,854
2,957

Note 24. Litigation and
Contingent Liabilities

Note 25. Accounting for
Deposit Account Overdrafts

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 pro-
ceedings and other collection actions as part of its lending
and leasing collection activities. From time to time, borrowers
and other customers, or employees or former employees,
have also brought actions against TCF, in some cases claim-
ing substantial amounts of damages. Financial services
companies are subject to the risk of class action litigation,
and TCF has had such actions brought against it from time
to time. Litigation is often unpredictable and the actual
results of litigation cannot be determined with certainty.

During the fourth quarter of 2006, TCF changed its account-
ing policy for deposit account overdrafts to a more preferred
method under generally accepted accounting principles and
regulatory guidance. Previously, certain deposit account
overdraft balances were presented net in deposits and net
losses on uncollectible overdrafts were reported in deposit
account losses in non-interest expense. TCF now reports all
overdraft balances in either consumer or commercial loans.
Net losses on uncollectible overdrafts are reported as net
charge-offs in the allowance for loan and lease losses. In
addition, the portion of the allowance for loan and lease
losses related to uncollectible deposit fees was transferred
to other liabilities.

All prior period amounts have been reclassified to con-
form to the new accounting policy. This accounting change
had no impact on net income for any period presented.
The following schedules illustrate the changes for all
periods presented.

2006 Form 10-K

Retrospective Effect of Change in Accounting Principle

(In thousands)
Statements of Financial Condition

Loans and leases
Allowance for loan and lease losses
Deposits
Accrued expenses and other liabilities

Statements of Income

Provision for credit losses
Fees and service charges
Other non-interest expense

Statements of Cash Flow

Provision for credit losses
Net increase in other assets and

accrued expenses and other liabilities

Originations and purchases of loans
Other, net (Investing)
Net increase in deposits

Other Financial Information

Charge-offs
Less recoveries
Net charge-offs

Increase/(Decrease)
2004
2005

$ 18,661
(4,573)
18,661
4,573

$ 31,913
(4,485)
31,913
4,485

3,565
(88)
(3,653)

7,680
(325)
(8,005)

3,565

7,680

(17,433)
13,252
13,868
(13,252)

(20,021)
(10,350)
12,342
10,350

17,521
13,868
$ 3,653

20,347
12,342
$ 8,005

TCF Financial Corporation and Subsidiaries

Other Financial Data
The selected quarterly financial data presented below should be read in conjunction with the Consolidated Financial
Statements and related notes.

Selected Quarterly Financial Data (Unaudited)

(Dollars in thousands,
except per-share data)

Selected Financial Condition Data:
Loans and leases excluding education
and residential real estate loans

Securities available for sale

Residential real estate loans

Subtotal

Goodwill

Total assets

Checking, savings and money

market deposits

Certificates of deposit

Total deposits

Short-term borrowings

Long-term borrowings

Stockholders’ equity

Selected Operations Data:
Net interest income

Provision for credit losses

Net interest income after

provision for credit losses

Non-interest income:

Fees and other revenues

Gains on sales of securities
available for sale

Total non-interest income

Non-interest expense

Income before income tax expense

Income tax expense

Net income
Per common share:
Basic earnings
Diluted earnings
Dividends declared

Financial Ratios:
Return on average assets (1)
Return on average common equity (1)
Net interest margin (1)
Net charge-offs (recoveries) as a
percentage of average loans
and leases (1) (2)

Average total equity to average assets

(1) Annualized.

Dec. 31,
2006

Sept. 30,
2006

June 30,
2006

March 31,
2006

Dec. 31,
2005

Sept. 30,
2005

June 30,
2005

March 31,
2005

$10,705,890

$10,496,031

$10,231,268

$ 9,824,661

$ 9,442,772

$ 9,159,271

$ 8,904,496

$ 8,619,770

1,816,126

1,770,427

1,781,995

1,816,135

1,648,615

1,318,787

1,406,575

1,785,520

627,790

659,477

695,214

732,912

770,441

815,893

884,141

950,469

2,443,916

2,429,904

2,477,209

2,549,047

2,419,056

2,134,680

2,290,716

2,735,989

152,599

14,669,734

14,319,387

14,222,561

13,851,936

13,388,594

12,761,770

12,637,616

12,755,354

7,285,615

2,483,635
9,769,250

214,112

3,374,428

1,033,374

7,224,223

2,454,469

9,678,692

376,397

2,976,133

1,031,189

7,261,327

2,382,273

9,643,600

561,374

7,461,186

2,128,723

9,589,909

346,528

7,213,735

1,915,620

9,129,355

472,126

2,778,277

2,688,131

2,511,010

977,385

968,300

998,472

7,012,038

1,866,425

8,878,463

1,084,933

1,547,690

967,069

6,721,399

1,728,842

8,450,241

1,045,582

1,899,047

954,557

6,727,189

1,685,486

8,412,675

878,390

2,098,878

926,343

Dec. 31,
2006

Sept. 30,
2006

June 30,
2006

March 31,
2006

Dec. 31,
2005

Sept. 30,
2005

June 30,
2005

March 31,
2005

Three Months Ended

135,887

135,033

135,442

131,168

129,282

128,070

131,285

129,053

10,073

5,288

4,177

1,151

5,396

5,445

1,417

(3,672)

125,814

129,745

131,265

130,017

123,886

122,625

129,868

132,725

118,831

129,512

123,622

117,499

124,938

122,617

113,201

106,815

–

118,831

165,562

79,083

25,350

53,733

.42

.23

1.49%

20.68

4.07

$
$
$

–

129,512

162,389

96,868

30,941

65,927

.51
.51
.23

1.86%
26.44
4.11

$
$
$

–

123,622

160,966

93,921

26,860

67,061

.52
.52
.23

1.92%
27.75
4.22

$
$
$

–

117,499

160,280

87,236

29,014

58,222

.45
.45
.23

1.71%
23.82
4.25

$
$
$

–

124,938

156,631

92,193

26,653

65,540

.50
.50
.2125

2.01%
27.09
4.31

$
$
$

995

123,612

151,862

94,375

28,889

65,486

.50
.50
.2125

2.07%
27.41
4.43

$
$
$

4,437

117,638

150,190

97,316

26,675

70,641

.53
.53
.2125

2.22%
30.23
4.53

$
$
$

.24

7.20

.18
7.02

.16
6.92

.08
7.18

.16
7.40

.93
7.56

.08
7.36

5,239

112,054

148,253

96,526

33,061

63,465

.47
.47
.2125

2.03%
27.18
4.56

(.03)
7.48

(2) For the three months ended September 30, 2005, net charge-offs excluding the leveraged lease as a percentage of average loans and leases were .08% (annualized).

2006 Form 10-K

Item 9. Changes in
and Disagreements with
Accountants on Accounting
and Financial Disclosure
None.

Item 9A. 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 (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 proce-
dures pursuant to Exchange Act Rule 13a-15 under the
Securities Exchange Act of 1934 (“Exchange Act”). Based
upon that evaluation, management concluded that the
Company’s disclosure controls and procedures are effective,
as of December 31, 2006. Also, there were no changes in
the Company’s disclosure controls or internal controls over
financial reporting during the fourth quarter of 2006 that
have materially affected or are reasonably likely to materi-
ally affect TCF’s internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintain-
ing adequate internal control over financial reporting for
TCF Financial Corporation (the Company). Internal control
over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for
external purposes in accordance with generally accepted
accounting principles.

Internal control over financial reporting includes those
policies and procedures that pertain to the maintenance
of records that in reasonable detail accurately and fairly
reflect the transactions and dispositions of the assets of
the Company; provide reasonable assurance that transac-
tions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures
of the Company are only being made in accordance with
authorizations of management and directors of the Company;
and provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or dispo-
sition of the Company’s assets that could have a material
effect on the financial statements.

Management completed an assessment of TCF’s internal

control over financial reporting as of December 31, 2006.
This assessment was based on criteria for evaluating internal
control over financial reporting established in Internal
Control – Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission.
Based on this assessment, management concluded that TCF’s
internal control over financial reporting was effective as of
December 31, 2006.

KPMG LLP, TCF’s registered public accounting firm that
audited the consolidated financial statements included
in this annual report, has issued an unqualified attestation
report on management’s assessment of the Company’s inter-
nal control over financial reporting as of December 31, 2006.
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 limita-
tions, 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 control.
Therefore, no assessment of a cost-effective system of
internal controls can provide absolute assurance that all
control issues and instances of fraud, if any, will be detected.

/s/ Lynn A. Nagorske
Lynn A. Nagorske
Chief Executive Officer and Director

/s/ Thomas F. Jasper
Thomas F. Jasper
Executive Vice President and Chief Financial Officer

/s/ David M. Stautz
David M. Stautz
Senior Vice President, Controller and Assistant
Treasurer

February 15, 2007

TCF Financial Corporation and Subsidiaries

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
TCF Financial Corporation:

We have audited management’s assessment, included in
the accompanying Management Report, that TCF Financial
Corporation (the Company) maintained effective internal
control over financial reporting as of December 31, 2006,
based on criteria established in Internal Control –
Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission
(COSO). TCF Financial Corporation’s management is respon-
sible for maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of
internal control over financial reporting. Our responsibility
is to express an opinion on management’s assessment and
an opinion on the effectiveness of the Company’s internal
control over financial reporting based on our audit.

We conducted our audit in accordance with the standards
of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether
effective internal control over financial reporting was main-
tained in all material respects. Our audit included obtaining
an understanding of internal control over financial reporting,
evaluating management’s assessment, testing and evaluat-
ing the design and operating effectiveness of internal control,
and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a
process designed to provide reasonable assurance regard-
ing the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance
with generally accepted accounting principles. A company’s
internal control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of
the company; (2) provide reasonable assurance that trans-
actions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures
of the company are being made only in accordance with
authorizations of management and directors of the

company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition,
use, or disposition of the company’s assets that could have
a material effect on the financial statements.

Because of its inherent limitations, internal control

over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in
conditions, or that the degree of compliance with the poli-
cies or procedures may deteriorate.

In our opinion, management’s assessment that TCF
Financial Corporation maintained effective internal control
over financial reporting as of December 31, 2006, is fairly
stated, in all material respects, based on criteria established
in Internal Control – Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway
Commission (COSO). Also, in our opinion, TCF Financial
Corporation maintained, in all material respects, effective
internal control over financial reporting as of December 31,
2006, based on criteria established in Internal Control –
Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).

We also have audited, in accordance with the standards
of the Public Company Accounting Oversight Board (United
States), the consolidated statements of financial condition
of TCF Financial Corporation and subsidiaries as of December
31, 2006 and 2005, and the related consolidated statements
of income, stockholders’ equity, and cash flows for each of
the years in the three-year period ended December 31, 2006,
and our report dated February 15, 2007 expressed an unqual-
ified opinion on those consolidated financial statements.

Minneapolis, Minnesota
February 15, 2007

Item 9B. Other Information
None.

2006 Form 10-K

Part III

Item 10. Directors, Executive
Ofﬁcers and Corporate Governance
Information regarding directors and executive officers of
TCF is set forth in the following sections of TCF’s definitive
Proxy Statement dated March 7, 2007 and incorporated
herein by reference: Election of Directors: Background of
the Nominees and Other Directors; Were All Stock Ownership
Reports Timely Filed by TCF Financial Insiders? and Background
of Executives Who are Not Directors.

Information regarding procedures for nominations of

Directors is set forth in the section entitled About the
Meeting: What is TCF’s Policy on Stockholder Nominations?
in TCF’s definitive proxy statement dated March 7, 2007,
incorporated herein by reference.

Audit Committee and Financial Expert
Information regarding TCF’s separate standing Audit
Committee, its members and financial experts is set forth in
the section of TCF’s definitive proxy statement for the 2007
Annual Meeting entitled Election of Directors: Committee
Membership, incorporated herein by reference.

TCF’s Board of Directors is required to determine whether
it has at least one audit committee financial expert and that
the expert is independent. An audit committee financial
expert is a committee member who has an understanding of
generally accepted accounting principles and financial state-
ments and has the ability to assess the general application of
these principles in connection with the accounting for esti-
mates, accruals and reserves. Additionally, this individual
should have experience preparing, auditing, analyzing or
evaluating financial statements that present the breadth
and level of complexity of accounting issues present in TCF’s
financial statements. The member should also have an
understanding of internal control over financial reporting
as well as an understanding of audit committee functions.

The Board has determined that Gerald A. Schwalbach,

the Audit Committee Chairman, George G. Johnson and
Douglas A. Scovanner meet the requirements of an audit
committee financial expert. The Board has also determined
that Mr. Schwalbach, Mr. Johnson and Mr. Scovanner are inde-
pendent. Additional information regarding Mr. Schwalbach,
Mr. Johnson, Mr. Scovanner and other directors is set forth in
the section Background of the Nominees and Other Directors
of TCF’s definitive Proxy Statement dated March 7, 2007 and
incorporated herein by reference.

Code of Ethics for Senior Financial Management
TCF adopted a code of ethics for senior financial management
in March 2003. This code of ethics is available for review at
the Company’s website at www.tcfbank.com under the
“Corporate Governance” section. Any changes to or waivers
of violations of the code of ethics for senior financial
management will be posted to the Company’s website.
Information regarding the Code of Ethics is set forth in the
section of TCF’s definitive proxy statement dated March 7,
2007 entitled Election of Directors: Corporate Governance:
Code of Ethics, incorporated herein by reference.

Item 11. Executive Compensation
Information regarding compensation of directors and
executive officers of TCF is set forth in the following
sections of TCF’s definitive Proxy Statement dated March 7,
2007 and incorporated herein by reference: Compensation
of Directors, Compensation Discussion and Analysis, Com-
pensation Committee Report, Summary Compensation Table,
Grants of Plan Based Awards, Outstanding Equity Awards at
Fiscal Year End; Option Exercises and Stock Vested; Pension
Benefits; Nonqualified Deferred Compensation and Potential
Payments Upon Termination or Change in Control.

TCF Financial Corporation and Subsidiaries

Item 14. Principal Accountant
Fees and Services
Information regarding principal accounting fees and serv-
ices and the audit committee’s pre-approval policies and
procedures relating to audit and non-audit services provided
by the Company’s independent registered public accounting
firm is set forth in the section entitled Audit Committee
Report of TCF’s definitive Proxy Statement dated March 7,
2007 and is incorporated herein by reference.

Item 12. Security Ownership
of Certain Beneﬁcial Owners
and Management and Related
Stockholder Matters
Information regarding ownership of TCF’s common stock by
TCF’s directors, executive officers, and certain other share-
holders and shares authorized under plans is set forth in the
sections entitled TCF Stock Ownership of Directors, Officers
and 5% Owners and Equity Compensation Plans Approved
by Shareholders of TCF’s definitive Proxy Statement dated
March 7, 2007 and incorporated herein by reference.

Item 13. Certain Relationships
and Related Transactions, and
Director Independence
Information regarding certain relationships and transactions
between TCF and management is set forth in the section
entitled Election of Directors: Director Independence of
TCF’s definitive Proxy Statement dated March 7, 2007 and
is incorporated herein by reference.

2006 Form 10-K

Part IV

Item 15. Exhibits and Financial Statement Schedules

(a) Financial Statements, Financial Statement Schedules and Exhibits

1. Financial Statements

The following consolidated financial statements of TCF and its subsidiaries, are filed as part of this report:

Description

Selected Financial Data

Consolidated Statements of Financial Condition

at December 31, 2006 and 2005

Consolidated Statements of Income for each of

the years in the three-year period ended December 31, 2006

Consolidated Statements of Stockholders’ Equity

for each of the years in the three-year period ended December 31, 2006

Consolidated Statements of Cash Flows

for each of the years in the three-year period ended December 31, 2006

Notes to Consolidated Financial Statements

Other Financial Data

Management’s Report on Internal Control Over Financial Reporting

Page

Reports of Independent Registered Public Accounting Firm

43, 77

2. Financial Statement Schedules

All schedules to the Consolidated Financial Statements normally required by the applicable accounting
regulations are included in the Consolidated Financial Statements or the Notes thereto.

3. Exhibits

See Index to Exhibits on page 82 of this report.

TCF Financial Corporation and Subsidiaries

Signatures

Pursuant to the requirements of Section 13 or Section 15(d) 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
Registrant

By /s/ Lynn A. Nagorske
Lynn A. Nagorske
Chief Executive Officer and Director

Dated: February 15, 2007

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following

persons on behalf of the registrant and in the capacities and on the dates indicated.

Name

Title

Date

/s/ William A. Cooper
William A. Cooper

/s/ Lynn A. Nagorske
Lynn A. Nagorske

/s/ Thomas F. Jasper
Thomas F. Jasper

/s/ David M. Stautz
David M. Stautz

/s/ Gregory J. Pulles
Gregory J. Pulles

/s/ William F. Bieber
William F. Bieber

/s/ Rodney P. Burwell
Rodney P. Burwell

/s/ Thomas A. Cusick
Thomas A. Cusick

/s/ Luella G. Goldberg
Luella G. Goldberg

/s/ George G. Johnson
George G. Johnson

/s/ Peter L. Scherer
Peter L. Scherer

/s/ Gerald A. Schwalbach
Gerald A. Schwalbach

/s/ Douglas A. Scovanner
Douglas A. Scovanner

/s/ Ralph Strangis
Ralph Strangis

Chairman of the Board and Director

February 15, 2007

Chief Executive Officer and Director
(Principal Executive Officer)

February 15, 2007

Executive Vice President and
Chief Financial Officer (Principal Financial Officer)

February 15, 2007

Senior Vice President, Controller
and Assistant Treasurer (Principal Accounting Officer)

February 15, 2007

Vice Chairman, General Counsel,
Secretary and Director

Director

February 15, 2007

2006 Form 10-K

Index to Exhibits

Exhibit
No.

3(a)

3(b)

4(a)

4(b)

10(a)

10(b)

Description

Restated Certificate of Incorporation of TCF Financial Corporation, as amended and restated through
April 29, 1998 [incorporated by reference to Exhibit 3(a) to TCF Financial Corporation’s Annual Report
on Form 10-K for the fiscal year ended December 31, 1999, No. 001-10253]

Restated Bylaws of TCF Financial Corporation, as amended and restated through October 25, 1999; and as
amended by amendment adopted April 28, 2000 [incorporated by reference to Exhibit 3(b) to TCF Financial
Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2000, No. 001-10253]; and as
amended by amendment adopted January 22, 2001 [incorporated by reference to Exhibit 3(b) to TCF Financial
Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001, No. 001-10253]; and as
amended through May 21, 2005 [incorporated by reference to Exhibit 3(b)(1) to TCF Financial Corporation’s
Current Report on Form 8-K filed May 26, 2005]

Rights Agreement, dated as of May 12, 1999, between TCF Financial Corporation and BankBoston, N.A.
[incorporated by reference to Exhibit 1 to TCF Financial Corporation’s Registration Statement on Form 8-A,
No. 001-10253 (filed May 24, 1999)] and as amended January 24, 2005 [incorporated by reference to
Exhibit 4(a) to TCF Financial Corporation’s Current Report on Form 8-K (filed January 27, 2005)]

Copies of instruments with respect to long-term debt will be furnished to the Securities and Exchange
Commission upon request.

Stock Option and Incentive Plan of TCF Financial Corporation, as amended [incorporated by reference to
Exhibit 10.1 to TCF Financial Corporation’s Registration Statement on Form S-4, No. 33-14203 (filed May 12,
1987)]; Second Amendment, Third Amendment and Fourth Amendment to the Plan [incorporated by refer-
ence to Exhibit 10(a) to TCF Financial Corporation’s Annual Report on Form 10-K for the fiscal year ended
December 31, 1987, No. 0-16431]; Fifth Amendment to the Plan [incorporated by reference to Exhibit 10(a)
to TCF Financial Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1989,
No. 001-10253]; amendment dated January 21, 1991 [incorporated by reference to Exhibit 10(a) to
TCF Financial Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1990,
No. 001-10253]; and as further amended by amendment dated January 28, 1992 and amendment dated
March 23, 1992 (effective April 15, 1992) [incorporated by reference to Exhibit 10(a) to TCF Financial
Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1991, No. 001-10253]

TCF Financial Incentive Stock Program as amended and restated on March 5, 2004, and approved by
Shareholders of TCF Financial Corporation at the Annual Meeting on April 28, 2004 [incorporated by refer-
ence to Appendix B to TCF Financial Corporation’s Definitive Proxy Statement filed with the SEC on March 17,
2004]; and as amended by amendment adopted October 16, 2006 [incorporated by reference to Exhibit 10(b)
to TCF Financial Corporation’s Current Report on Form 8-K filed October 20, 2006]

10(b)-1*

Form of TCF Financial Corporation Incentive Stock Program Performance-Based Restricted Stock Agreement
[incorporated by reference to Exhibit 10(b)-1 of TCF Financial Corporation’s Current Report on Form 8-K
filed April 29, 2005]

TCF Financial Corporation and Subsidiaries

Exhibit
No.

10(b)-2

10(b)-3

10(b)-4*

10(c)

10(d)

10(e)*

10(e)-1*

10(e)-2*

10(e)-3*

Description

Form of TCF Financial Corporation Restricted Stock Agreement and Non-solicitation/Confidentiality
Agreement

Summary of Stock Award Program for Consumer Lending and Business Banker Divisions

Form of Year 2006 Executive Stock Grant Award Agreement dated January 23, 2006 [incorporated by refer-
ence to Exhibit 10(b)-4 to TCF Financial Corporation’s Current Report on Form 8-K filed January 25, 2006
No. 001-10253]

TCF Financial Corporation Executive Deferred Compensation Plan as amended and restated through
January 24, 2005 [incorporated by reference to Exhibit 10(a) to TCF Financial Corporation’s Current Report
on Form 8-K (filed January 27, 2005)]

Amended and Restated Trust Agreement for TCF Financial Corporation Executive Deferred Compensation
Plan effective September 1, 1998; amendment adopted effective November 1, 1998 [incorporated by refer-
ence to Exhibit 10(d) to TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998, No. 001-10253]; Restated Trust Agreement as executed with First National Bank
in Sioux Falls as trustee effective as of October 1, 2000 [incorporated by reference to Exhibit 10(d) of
TCF Financial Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000,
No. 001-10253]; as amended by amendment adopted April 30, 2001 [incorporated by reference to Exhibit
10(d) of TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001,
No. 001-10253]; and as amended by amendments adopted May 3, 2002 [incorporated by reference to
Exhibit 10(d) of TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30,
2002, No. 001-10253]; and as amended by amendments effective as of June 30, 2003 [incorporated by
reference to Exhibit 10(d) of TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter
ended June 30, 2003, No. 001-10253]

Employment Agreement of William A. Cooper, dated July 1, 1996 [incorporated by reference to Exhibit 10(a)
to TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1996, No. 001-
10253]; as amended March 1, 1997 [incorporated by reference to Exhibit 10(e) to TCF Financial Corporation’s
Annual Report on Form 10-K for the fiscal year ended December 31, 1996, No. 001-10253]

Agreement between William A. Cooper and TCF Financial Corporation and TCF National Bank dated January
25, 2005 [incorporated by reference to Exhibit 10(e)-1 to TCF Financial Corporation’s Current Report on
Form 8-K (filed January 27, 2005)]; as amended December 15, 2005 [incorporated by reference to Exhibit
10(e)-2 to TCF Financial Corporation’s Report on Form 8-K filed December 19, 2005]

Restricted Stock Agreement between William A. Cooper and TCF Financial Corporation dated January 25, 2005
[incorporated by reference to Exhibit 10(e)-1 to TCF Financial Corporation’s Current Report on Form 8-K
(filed January 27, 2005)]

Employment Agreement between Lynn A. Nagorske and TCF Financial Corporation dated December 15, 2005
[incorporated by reference to Exhibit 10 (e)-2 of TCF Financial Corporation’s Current Report on Form 8-K
filed December 19, 2005]

2006 Form 10-K

Exhibit
No.

10(e)-4*

10(e)-5*

10(g)*

10(g)-1*

10(g)-2*

10(g)-3*

10(j)-1

10(j)-2

10(k)

Description

Employment Agreement between Neil W. Brown and TCF Financial Corporation dated December 15, 2005
[incorporated by reference to Exhibit 10(i)-1 of TCF Financial Corporation’s Report on Form 8-K filed
December 19, 2005]

Form of Employment Agreement as executed by certain executives dated December 15, 2005 [incorporated by
reference to Exhibit 10(i)-2 of TCF Financial Corporation’s Current Report on Form 8-K filed December 19, 2005]

Change in Control Agreement of Lynn A. Nagorske, dated December 15, 2005 [incorporated by reference
to Exhibit 10(f) to TCF Financial Corporation’s Report on Form 8-K filed December 19, 2005]

Change in Control Agreement of Neil W. Brown dated December 15, 2005 [incorporated by reference to
Exhibit 10(g)-1 of TCF Financial Corporation’s Report Form 8-K filed December 19, 2005]

Form of Change in Control Agreement as executed by certain executives and dated December 15, 2005
[incorporated by reference to Exhibit 10(g)-2 of TCF Financial Corporation’s Report Form 8-K filed
December 19, 2005]

Form of Non-solicitation Agreement and Change in Control Contract as executed by certain Senior Officers
dated December 15, 2005 [incorporated by reference to Exhibit 10(i)-3 of TCF Financial Corporation’s
Report 8-K filed December 19, 2005]

Supplemental Employee Retirement Plan – ESPP Plan as amended and restated through January 24, 2005
[incorporated by reference to Exhibit 10(j) of TCF Financial Corporation’s Current Report on Form 8-K
(filed January 27, 2005)]

2005 ESPP SERP (a/k/a TCF Employees Stock Purchase Plan-Supplemental Plan) as amended and restated
as effective April 1, 2006 [incorporated by reference to Exhibit 10(j)-2 of TCF Financial Corporation’s
Current Report on Form 8-K filed February 9, 2006]; and as amended by amendment adopted April 8, 2006
[incorporated by Exhibit 10(j)-2 to TCF Financial Corporation’s Current Report on Form 8-K filed April 13, 2006]

Trust Agreement for TCF Financial Corporation Supplemental Employee Retirement Plan, dated August 21, 1991
[incorporated by reference to Exhibit 10.16 to TCF Financial Corporation’s Registration Statement on Form S-2,
filed November 15, 1991, No. 33-43988]; as amended on October 20, 1997 [incorporated by reference to
Exhibit 10(n) to TCF Financial Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31,
1997, No. 001-10253]; as amended by amendment adopted April 30, 2001 [incorporated by reference to
Exhibit 10(k) of TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001,
No. 001-10253]

10(l)

TCF Financial Corporation Senior Officer Deferred Compensation Plan as amended and restated through
January 24, 2005 [incorporated by reference to Exhibit 10(l) to TCF Financial Corporation’s Current Report
on Form 8-K (filed January 27, 2005)]

TCF Financial Corporation and Subsidiaries

Exhibit
No.

10(m)

10(n)

10(o)

10(p)

10(r)

10(r)-1

Description

Amended and Restated Trust Agreement for TCF Financial Corporation Senior Officer Deferred Compensation
Plan effective September 1, 1998; amendment adopted effective November 1, 1998 [incorporated by
reference to Exhibit 10(p) to TCF Financial Corporation’s Quarterly Report on Form 10 Q for the quarter
ended September 30, 1998, No. 00110253]; Restated Trust Agreement as executed with First National Bank
in Sioux Falls as trustee effective as of October 1, 2000 [incorporated by reference to Exhibit 10(m) of
TCF Financial Corporation’s Annual Report on Form 10 K for the fiscal year ended December 31] 2000,
No. 001-10253]; as amended by amendment adopted April 30, 2001 [incorporated by reference to Exhibit
10(m) of TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001,
No. 001-10253]; and as amended by amendments effective as of June 30, 2003 [incorporated by reference
to Exhibit 10(m) of TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30,
2003, No. 001-10253] and 2006 Management Incentive Plan- Executive Agreement [incorporated by refer-
ence to TCF Financial Corporation’s Current Report on Form 8-K (filed January 23, 2006)]

Directors Stock Program [incorporated by reference to Program filed as Appendix A with TCF Financial
Corporation’s Definitive 14A filing of its proxy statement on March 16, 2005, No. 001-10253 and as filed as
Exhibit 10(n) of TCF Financial Corporation’s Current Report on Form 8-K filed April 29, 2005]

2003 Management Incentive Plan-Executive [incorporated by reference from TCF Financial Corporation’s
Report on Form 10-Q for the quarter ended March 31, 2003, No. 001-10253];and 2004 Management
Incentive Plan – Executive [incorporated by reference from TCF Financial Corporation’s Report on Form 10-Q
for the quarter ended March 31, 2004, No. 001-10253] and 2005 Management Incentive Plan – Executive
[incorporated by reference to TCF Financial Corporation’s Current Report on Form 8-K (filed January 27, 2005)];
and 2006 Management Incentive Plan – Executive [incorporated by reference to TCF Financial Corporation’s
Current Report on Form 8-K (filed January 25, 2006)]

TCF Performance-Based Compensation Policy for Covered Executive Officers as amended and restated
effective January 1, 2004, and approved by Shareholders of TCF Financial Corporation at the Annual Meeting
on April 28, 2004 [incorporated by reference to Appendix A to TCF Financial Corporation’s Definitive 14A fil-
ing of its Proxy Statement (filed March 17, 2004)]

TCF Financial Corporation 2005 Directors Deferred Compensation Plan as amended and restated through
January 24, 2005 [incorporated by reference to Exhibit 10(r) of TCF Financial Corporation’s Current Report
on Form 8-K (filed January 27, 2005)]

TCF Directors 2005 Deferred Compensation Plan, adopted effective as of January 6, 2005, as amended and
restated through January 24, 2005 [incorporated by reference to Exhibit 10(r)-1 of TCF Financial
Corporation’s Current Report on Form 8-K (filed January 27, 2005)]

2006 Form 10-K

Description

Trust Agreement for TCF Directors Deferred Compensation Plan; as amended by amendment adopted April
30, 2001 [incorporated by reference to Exhibit 10(s) 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 10,
2001 [incorporated by reference to Exhibit 10(s) 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 amendments adopted May 3,
2002 [incorporated by reference to Exhibit 10(s) of TCF Financial Corporation’s Quarterly Report on Form
10-Q for the quarter ended June 30, 2002, No. 001-10253] ;and as amended by amendments effective as of
June 30, 2003 [incorporated by reference to Exhibit 10(s) of TCF Financial Corporation’s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2003, No. 001-10253]

TCF Directors Retirement Plan dated October 24, 1995 [incorporated by reference to Exhibit 10(y) to
TCF Financial Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1995,
No. 001-10253]

Supplemental Employee Retirement Plan for TCF Cash Balance Pension Plan, as amended and restated
through January 24, 2005 [incorporated by reference to Exhibit 10(u) of TCF Financial Corporation’s Current
Report on Form 8-K (filed January 27, 2005)]

TCF Financial Corporation 2005 Cash Balance Pension Plan SERP, adopted effective January 1, 2005, as
amended and restated through January 27, 2005 [incorporated by reference to Exhibit 10(u)-1 of TCF
Financial Corporation’s Current Report on Form 8-K (filed January 27, 2005)]; as amended effective April 1,
2006 [incorporated by reference to Exhibit 10(u-1) of TCF Financial Corporation’s Current Report on
Form 8-K filed February 9, 2006]

Subsidiaries of TCF Financial Corporation (as of December 31, 2006)

Consent of KPMG LLP dated February 27, 2007

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

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

Exhibit
No.

10(s)

10(t)

10(u)

10(u)-1

21#

23#

31#

32#

*Executive Contract

# Filed herein

TCF Financial Corporation and Subsidiaries

Senior Ofﬁcers

TCF Financial Corporation

Chairman of the Board
William A. Cooper

Chief Executive Officer
Lynn A. Nagorske

President and
Chief Operating Officer
Neil W. Brown

Vice Chairman, General Counsel
and Secretary
Gregory J. Pulles

Executive Vice President and
Chief Financial Officer
Thomas F. Jasper

Executive Vice President and
Chief Information Officer
Earl D. Stratton

Executive Vice President and
Chief Marketing Officer
Candace H. Lex

Executive Vice President
Craig R. Dahl

Senior Vice Presidents
James S. Broucek
Timothy G. Doyle
David R. Hinkemeyer
Jason E. Korstange
Thomas E. Murphy, Jr.
Barbara E. Shaw
David M. Stautz
Diane O. Stockman

TCF Bank Corporate

President and
Chief Executive Officer
Timothy P. Bailey

Executive Vice Presidents
Paul B. Brawner
James T. Dowiak
Gregg R. Goudy
Brian J. Hurd
James L. Koon
James C. LaPlante

Senior Vice Presidents
Ronald L. Britz
Scott D. Campbell
Beverly M. Craig
Daniel R. Edward
Brian P. Engels

Linda J. Firth
Shelley A. Fitzmaurice
Mark W. Gault
Thomas R. Goins
Joseph T. Green
Kenneth W. Grenier
Douglass B. Hiatt
Charles P. Hoffman, Jr.
Katherine D. Johnson
Scott W. Johnson
Gloria J. Karsky
David B. McCullough
James M. Matheis
Anton J. Negrini
Carol B. Schirmers
Roger W. Starr
Leonard D. Steele
R. Elizabeth Topoluk

TCF Bank Minnesota

President
Mark L. Jeter

Executive Vice Presidents
Douglas W. Benner
Sara L. Evers
Claire M. Graupmann
John F. Schroeder

Senior Vice Presidents
Jeffrey R. Arnold
Michael A. Dill
Scott A. Fedie
Matthew J. Helling
Viane R. Hoefs
Kevin V. Kuntz
Katherine L. Landon
Robert A. Larkin
Joseph C. Miller
Michael J. Olson
Daniel M. Reyelts
Steven E. Rykkeli
Steven D. Steen

TCF Bank
Illinois/Wisconsin/Indiana

President
Mark W. Rohde

Executive Vice Presidents
Luis J. Campos
Mark B. Dillon
Michael R. Klemz
David J. Veurink

Senior Vice Presidents
Robert J. Brueggeman
Jennifer A. Daugherty
Peter R. Daugherty
Jeffrey T. Doering
Edward J. Gallagher
James D. Hughes
Eileen P. Kowalski
William A. Lockett
Dennis McClelland
Russell P. McMinn
Luke K. Oosterouse
Douglas A. Ortyn
Todd A. Palmer
Mary Potter
Michael Roidt
Wendy D. Ryce-Smith
Mark C. Stetson
Thomas K. Torossian
Kristin E. Utzinger
Dennis J. Vena
Kathleen M. Wacker
Matthew R. Wiley

TCF Bank Michigan

President
Robert H. Scott

Executive Vice Presidents
Robert C. Borgstrom
Joseph W. Doyle
Robert F. Grant
Thomas J. Wagner

Senior Vice Presidents
Jerry E. Coviak
Larry M. Czekaj
Gary L. Fineman
Dennis J. Gistinger
Natalie A. Glass
Donald J. Hawkins
Terrence B. Pryor
Guy J. Rau
Paul R. Tokarczyk
Erskine J. Underwood
David F. Wible
Brian D. Wilson

TCF Bank Colorado

President
Wayne A. Marty

Executive Vice President
Mathew G. Lamb

Senior Vice Presidents
Timothy J. Bosiacki

James W. Hagen
David L. Norwood
Bernadette D. Slowey
Stephanie R. Zelenak

TCF Bank Arizona

President
Timothy B. Meyer

Senior Vice Presidents
Delia M. Conrad
Scott A. Hicks

TCF Equipment Finance, Inc.

President and
Chief Executive Officer
Craig R. Dahl

Executive Vice Presidents
William S. Henak
Mark D. Nyquist

Senior Vice Presidents
Peter C. Darin
Walter E. Dzielsky
Bradley C. Gunstad
Jodie L. Palmer
James L. Phillips
Charles A. Sell, Jr.
Robert J. Stark
Mark H. Valentine

Winthrop Resources
Corporation

Chairman and
Chief Executive Officer
Craig R. Dahl

Executive Vice President
Richard J. Pieper

Senior Vice Presidents
Gary W. Anderson
Paul L. Gendler
John G. McManigal
Dean J. Stinchfield

TCF Investments
and Insurance

President and
Chief Executive Officer
Peter O. Torvik

Senior Vice President
James R. Scattergood

2006 Annual Report

Board of Directors

William A. Cooper
Chairman of the Board

Lynn A. Nagorske 5
Chief Executive Officer

William F. Bieber 2,3,4
Chairman,
Acrometal Companies, Inc.

Rodney P. Burwell 2,3,4
Chairman,
Xerxes Corporation

Thomas A. Cusick 4
Retired Vice Chairman

Luella G. Goldberg 2,3,4,5
Past Chair,
University of Minnesota
Foundation,
Former Acting President,
Wellesley College

George G. Johnson 1
CPA/Managing Director,
George Johnson & Company

Gregory J. Pulles
Vice Chairman, General Counsel
and Secretary

Peter L. Scherer 1,4
President and
Chief Executive Officer,
Scherer Bros. Lumber Co.

Gerald A. Schwalbach 1,2,3,4
Chairman,
Spensa Development Group, LLC

Douglas A. Scovanner 1,4
Executive Vice President
and Chief Financial Officer
Target Corporation

Ralph Strangis 2,3,4,5
Senior Partner,
Kaplan, Strangis and Kaplan,
P.A.

1 Audit Committee

2 Compensation/Nominating/
Corporate Governance Committee

3 Advisory Committee –
TCF Employees Stock Purchase Plan

4 Shareholder Relations/
De Novo Banking Committee

5 Executive Committee

Ofﬁces

Executive Offices

TCF Financial Corporation
200 Lake Street East
Mail Code EX0-03-A
Wayzata, MN 55391-1693
(612) 661-6500

Minnesota

Headquarters
801 Marquette Avenue
Mail Code 001-03-P
Minneapolis, MN 55402
(612) 661-6500

Traditional Branches
Minneapolis/
St. Paul Area (45)
Greater Minnesota (2)

Supermarket Branches
Minneapolis/
St. Paul Area (51)
Greater Minnesota (4)

Campus Branches
Minneapolis/St. Paul Area (2)
Greater Minnesota (3)

Illinois/Wisconsin/Indiana

Headquarters
800 Burr Ridge Parkway
Burr Ridge, IL 60527
(630) 986-4900

Traditional Branches
Chicagoland (43)
Milwaukee Area (12)
Kenosha/Racine Area (7)

Supermarket Branches
Chicagoland (148)
Milwaukee Area (14)
Kenosha/Racine Area (2)
Indiana (6)

Campus Branches
Chicagoland (4)
Milwaukee Area (1)

Michigan

Headquarters
17440 College Parkway
Livonia, MI 48152
(734) 542-2900

Traditional Branches
Metro Detroit Area (49)
Greater Michigan (8)

Supermarket Branches
Metro Detroit Area (1)
Greater Michigan (2)

Campus Branches
Metro Detroit Area (2)
Greater Michigan (2)

Colorado

Headquarters
6400 South Fiddler’s Green Circle
Suite 800
Greenwood Village, CO 80111
(720) 200-2400

Traditional Branches
Metro Denver Area (23)
Colorado Springs (6)

Supermarket Branches
Metro Denver Area (14)
Colorado Springs (1)

Arizona

Headquarters
4001 East Mountain Sky Avenue
Suite 103
Phoenix, AZ 85044
(602) 716-8940

Traditional Branch
Metro Phoenix Area (1)

TCF Equipment Finance, Inc.

Headquarters
11100 Wayzata Boulevard
Suite 801
Minnetonka, MN 55305
(952) 656-5080

Winthrop Resources
Corporation

Headquarters
11100 Wayzata Boulevard
Suite 800
Minnetonka, MN 55305
(952) 936-0226

TCF Financial Corporation and Subsidiaries

Stockholder Information

Stock Data

Year

High

Dividends
Paid
Low Per Share

2006
Fourth Quarter
Third Quarter
Second Quarter
First Quarter

2005
Fourth Quarter
Third Quarter
Second Quarter
First Quarter

2004
Fourth Quarter
Third Quarter
Second Quarter
First Quarter

2003
Fourth Quarter
Third Quarter
Second Quarter
First Quarter

2002
Fourth Quarter
Third Quarter
Second Quarter
First Quarter

$27.42
26.29
26.45
25.75

$27.14
26.75
25.88
27.15

$32.14
30.29
29.03
25.54

$25.68
23.98
19.92
20.02

$21.85
21.17
24.55
26.31

$27.89
28.10
27.70
28.41

$28.78
28.82
28.56
32.03

$32.36
32.62
29.03
26.37

$27.13
24.86
21.27
22.89

$22.38
25.15
27.04
27.30

$25.16
24.94
24.91
24.23

$25.02
25.81
24.55
26.42

$29.46
28.01
24.35
23.92

$23.91
19.76
18.45
18.25

$17.55
19.95
23.33
23.44

$.23
.23
.23
.23

$.2125
.2125
.2125
.2125

$.1875
.1875
.1875
.1875

$.1625
.1625
.1625
.1625

Direct Stock Purchase and Dividend Reinvestment Plan

Computershare Trust Company, N.A. offers the Computershare
Investment Plan, a direct stock purchase and dividend rein-
vestment plan for TCF Financial Corporation common stock.
This shareholder-paid program provides a low-cost alterna-
tive to traditional retail brokerage methods of purchasing,
holding and selling TCF common stock. The Plan is sponsored
and administered by our Transfer Agent, Computershare
Investor Services. Information is available from:

Computershare Investment Plan for TCF
c/o Computershare
PO Box 43081
Providence, RI 02940-3081
(800) 443-6852
www.computershare.com

Investor/Analyst Contact

Jason Korstange
Senior Vice President
Corporate Communications
(952) 745-2755

$.14375
.14375
.14375
.14375

Stacey Ronshaugen
Assistant Vice President
Investor Relations
(952) 745-2762

Trading of Common Stock

Available Information

The common stock of TCF Financial Corporation is listed
on the New York Stock Exchange under the symbol TCB.
At December 31, 2006, TCF had approximately 130.4 million
shares of common stock outstanding.

2007 Common Stock Dividend Dates

Expected Record Date:
February 2
April 27
July 27
October 26

Expected Payment Date:
February 28
May 31
August 31
November 30

Transfer Agent and Registrar

Computershare Trust Company, N.A.
PO Box 43078
Providence, RI 02940-3078
(800) 443-6852
www.computershare.com

Please visit our website at www.tcfbank.com for free
access to investor information, news releases, investor
presentations, access to TCF’s quarterly conference calls,
TCF’s annual report, and SEC filings. Information may also
be obtained, free of charge, from:

TCF Financial Corporation
Corporate Communications
200 Lake Street East
EX0-02-C
Wayzata, MN 55391-1693
(952) 745-2760

Annual Meeting

The annual meeting of stockholders of TCF will be held on
Wednesday, April 25, 2007, 3:00 p.m. (local time) at the
Marriott Minneapolis West, 9960 Wayzata Boulevard,
St. Louis Park, Minnesota.

2006 Annual Report

Total Return Performance

(In Dollars)

$3,000

TCF Financial Corporation*
SNL All Bank & Thrift Index
S&P 500 Index

6-86 12-86

12-87

12-88

12-89

12-90

12-91

12-92

12-93

12-94

12-95

12-96

12-97

12-98

12-99

12-00

12-01

12-02

12-03

12-04

12-05

12-06

2,500

2,000

1,500

1,000

500

Year
Ending

Source: SNL Financial LC and S&P

*17.5% annualized return since June 18, 1986.

Credit Ratings

Last Rating Action
Moody’s
TCF National Bank:

Last Review
December 2006

Outlook
Issuer
Long-term deposits
Short-term deposits
Bank financial strength

Positive
A2
A2
Prime-1
C+

Stock Price Performance

Stock Price
Dividends

(In Dollars)

$35

Last Rating Action
Standard & Poor’s
Outlook
TCF Financial Corporation:
Long-term counterparty
Short-term counterparty

TCF National Bank:

Long-term counterparty
Short-term counterparty

Last Review
May 2006

Positive

BBB+
A-2

A-
A-2

Last Rating Action
FITCH
Outlook
TCF Financial Corporation:

Long-term senior
Short-term
TCF National Bank:

Long-term deposits
Short-term deposits

7
9
/
8
2
/
1
1

t
i
l
p
S
k
c
o
t
S

5
9
/
0
3
/
1
1

t
i
l
p
S
k
c
o
t
S

4
0
/
3
/
9

t
i
l
p
S
k
c
o
t
S

Last Review
May 2006

Stable

A-
F1

$1.25

1.00

0.75

0.50

0.25

0.00

Year
Ending

Stock
Price*

6-86

12-86

12-87

12-88

12-89

12-90

12-91

12-92

12-93

12-94

12-95

12-96

12-97

12-98

12-99

12-00

12-01

12-02

12-03

12-04

12-05

12-06

$1.50 $1.52

$0.86

$1.11

$1.69

$0.96

$2.42

$3.63

$4.25

$5.16

$8.28

$10.88

$16.97

$12.09

$12.44

$22.28

$23.99

$21.85

$25.68

$32.14

$27.14

$27.42

Dividend
Paid*

N/A N/A

N/A

$0.03

$0.05

$0.06

$0.09

$0.13

$0.15

$0.18

$0.23

$0.31

$0.36

$0.41

$0.50

$0.58

$0.65

$0.75

$0.85

$0.92

*Stock split adjusted

TCF Financial Corporation and Subsidiaries

Corporate Philosophy

• TCF emphasizes convenience in bank-

bank. We accumulate a large number of

• TCF believes interest-rate risk should

ing; we’re open 12 hours a day, seven

low cost accounts through convenient

be minimized. Interest-rate specula-

days a week, 364 days per year. TCF

services and products targeted to a

tion does not generate consistent

banks a large and diverse customer

broad range of customers. As a result

profits and is high risk.

base. We provide customers innovative

of the profits we earn from the deposit

products through multiple banking

business, we can minimize credit risk

channels, including traditional,

on the asset side.

• TCF places a high priority on the

development of technology to enhance

productivity, customer service and

• TCF operates like a partnership. We’re

growth.

and decentralize the banking process.

• TCF is primarily a secured lender and

new products. Properly applied tech-

emphasizes credit quality over asset

nology increases revenue, reduces

growth. The costs of poor credit far

costs and enhances customer service.

outweigh the benefits of unwise asset

We centralize back office activities

• TCF strives to place The Customer

• TCF utilizes conservative accounting

First. We believe providing great serv-

and financial reporting principles that

ice helps to retain existing customers,

accurately and honestly report our

attract new customers, create value

financial condition and results of oper-

for our stockholders, and build pride

ations. We believe good accounting

in our employees. We also respect

drives good business decision-making.

customers’ concern about privacy and

know they place their trust in us. TCF

is committed to protecting the private

information of our customers and

retaining that trust is our priority.

• TCF is currently growing primarily

through de novo expansion rather than

acquisition. We are growing by starting

new businesses, opening new branches

and offering new products and services.

• TCF encourages open employee com-

munication and promotes from within

whenever possible. TCF places the

highest priority on honesty, integrity

and ethical behavior.

• TCF believes in community participa-

tion, both financially and through

volunteerism. We feel a responsibility

to help those less fortunate.

• TCF does not discriminate against

anyone in employment or the extension

of credit. As a result of TCF’s commu-

nity banking philosophy, we market

our products and services to everyone

in the communities we serve.

2006 Annual Report

such as “Totally Free Checking” and TCF

• TCF encourages stock ownership by

PLUS e CheckingSM. TCF uses the checking

our officers, directors and employees.

account as the anchor account to build

We have a mutuality of interest with

additional customer relationships.

our stockholders, and our goal is to

• TCF earns a significant portion of its

profits from the deposit side of the

earn above-average returns for our

stockholders.

supermarket and campus branches,

TCF EXPRESS TELLER® and other ATMs,

debit cards, phone banking, and

Internet banking.

organized geographically and by func-

tion, with profit center goals and

objectives. TCF emphasizes return on

average assets, return on average

equity and earnings per share growth.

We know which products are profitable

and contribute to these goals. Local

geographic managers are responsible

for local business decisions, business

development initiatives, customer

relations, and community involvement.

Managers are incented to achieve

these goals.

• TCF focuses on growing and retaining

its large number of low-interest cost

checking accounts by offering con-

venient products with free features,

Open 7 DaysSM

TCF Financial Corporation

200 Lake Street East

Wayzata, MN 55391-1693

www.tcfbank.com

002CS-13003

TCFIR9335