TCF Financial Corporation Annual Report 2007

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FY2007 Annual Report · TCF Financial Corporation

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Our goal is to be the
most convenient bank
in the markets we serve.

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TCF Financial Corporation

200 Lake Street East

Wayzata, MN 55391-1693

www.tcfbank.com

002CS-60875

TCFIR9338

TCF® The Convenience Franchise

TCF Financial Corporation 2007 Annual Report

Table of Contents

1
10

Letter to Our Stockholders
Business Highlights

Annual Report on Form 10-K
1
16
17
45
49
76

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

89
91
93

Corporate Information
Stockholder Information
Corporate Philosophy

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
Gains on sales of branches and real estate

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

At or For the Year Ended December 31,
2006

% Change

2007

$550,177
56,992
493,185

490,285
13,278
37,894
541,457
662,124
372,518
105,710
$266,808

$ 2.13
2.12
.97

28.99
17.17
17.93
8.68
2.07 X

$537,530
20,689
516,841

485,276
–
4,188
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

2.4%

175.5
(4.6)

1.0
N.M.
N.M.
10.6
2.0
4.3
(5.8)
8.9

12.1%
11.6
5.4

(34.6)
9.6
(40.2)

1.1
5.9
(5.3)
76.5
(2.3)

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

N.M. Not Meaningful.

1.76%
25.82
3.94
.30
6.88

1.74%
24.37
4.16
.17
7.04

TCF Financial Corporation and Subsidiaries

Financial Highlights

Lynn A.Nagorske,

Chief Executive Ofﬁcer

Dear Stockholders:

2007 Highlights:

• TCF recently increased its dividend to $1.00 per

• TCF earned a record $266.8 million in 2007, up

share in 2008, a 3.1 percent increase. This is the 17th

$21.9 million, or 8.9 percent, from the previous year.

consecutive year we have increased the dividend.

Earnings per share was a record $2.12, up $.22, or

11.6 percent, from the previous year.

• TCF’s return on average assets was 1.76 percent and

return on average equity was 25.82 percent. TCF

remains a “well-capitalized” ﬁnancial institution and

continues to be ranked among the highest perform-

ing banks in the country, topping U.S. Banker ’s

Best of the Best: Banking’s Top 100 list in 2007.

The major factors affecting our performance in 2007

were as follows:

1. T h i n g s T C F D o e s N o t D o

As stockholders, you should be aware of the risky

activities in which TCF has not participated. These

activities have caused the depressed housing market

and related credit crunch.

• TCF’s stock price closed at $17.93 on December 31,

TCF does not have:

2007, down 34.6 percent from $27.42 per share on

December 31, 2006. Stock prices for all ﬁnancial

institutions, including TCF, have been badly battered

• Subprime lending programs

• Teaser rate adjustable-rate mortgages (ARMs)

since October 2007 as a result of the billion-dollar

• Option ARMs

losses and write-downs which continue to be

announced by the Big Banks and brokerage compa-

nies. As a result of the depreciated home values and

a widening credit crunch, the market also now fears

an economic slowdown.

• Collateralized Debt Obligations

• Asset-backed commercial paper

• Structured investment vehicles.

Letter to Stockholders

2007 Annual Report

page 1

Indeed, over 99 percent of TCF’s securities available

The increase in net interest income was attributable to

for sale portfolio consists of plain vanilla mortgage-

a $1 billion increase, or 9.4 percent, in average Power

backed securities guaranteed by FANNIE MAE® or

Assets®, partially offset by a 22 basis point decrease,

Freddie Mac®, both of which are AAA rated government

or 5.3 percent, in the net interest margin rate. The net

sponsored enterprises.

interest margin rate in 2007 was 3.94 percent.

2 . I n t e r e s t R a t e E n v i r o n m e n t

TCF’s net interest income grew to $550.2 million in

2007. This is an increase of $12.6 million, or 2.4 per-

As a result of the interest rate environment, TCF’s

growth primarily occurred in lower yield fixed-rate

assets and higher cost deposits. This compressed the

cent, in a very difﬁcult operating environment as the

net interest margin.

yield curve remained ﬂat or inverted for the entire year.

3 . C r e d i t Q u a l i t y

Diluted EPS
Dollars

2
1
.
2
$

0
0
.
2
$

0
9
.
1
$

6
8
.
1
$

3
5
.
1
$

TCF’s credit quality has not been immune from the

depressed housing markets and weakening economy,

especially in Michigan. TCF’s charge-offs in 2007 were

$34.6 million, or .30 percent, as compared to 2006

charge-offs of $18 million, or .17 percent. Most of

the increase resulted from higher home equity loan

charge-offs, primarily in Minnesota and Michigan.

The industry subprime lending crisis led to record

foreclosures and an oversupply of homes held for sale.

This, in turn, led to lower home values and increased

credit losses for TCF. Our commercial loan and leasing

credit quality remains very good with the exception of

the Michigan market.

page 2

| TCF Financial Corporation and Subsidiaries

Letter to Stockholders

Although higher than historical levels, TCF’s over

of $22.4 million from $58.5 million at December 31,

30-day delinquencies remained well controlled at

2006. The wisdom of TCF’s secured lending philoso-

.67 percent. Non-performing assets at year end totaled

phy has helped to weather the recent credit storms.

$105.6 million, a $40 million increase from December

31, 2006. The rise in non-performing assets resulted

from increased non-accruals and real estate-owned in

both home equity and commercial real estate.

The provision for losses in 2007 was $57 million com-

pared to $20.7 million last year. At December 31, 2007,

TCF’s allowance for loan and lease losses totaled $80.9

4 . F e e I n c o m e

Fees and service charges increased 2.9 percent in 2007.

A concentrated effort was made to manage this area

well in 2007. Checking account customers continued

to change their banking behavior; they are writing

fewer checks, using their debit card more frequently

to replace check and cash transactions, and initiating

million, or .66 percent of loans and leases, an increase

more ACH transactions.

Power Assets
Billions of Dollars

8
.
1
1
$

7
.
0
1
$

Card Revenue
Millions of Dollars

4
.
9
$

4
.
8
$

2
.
7
$

9
.
8
9
$

1
.
2
9
$

8
.
9
7
$

5
.
3
6
$

0
.
3
5
$

Letter to Stockholders

2007 Annual Report

page 3

TCF’s leasing and equipment ﬁnance business
is now one of the largest proﬁt centers at TCF.

Card revenues continued their growth momentum

TCF’s banking markets. We continue to expand our

and increased 7.4 percent to $98.9 million in 2007.

commercial banking operations and capabilities within

TCF is the 12th largest Visa® debit card issuer in the

our banking markets.

United States. Debit card revenue growth is slowing

somewhat as this business is maturing and our net

checking account growth has also slowed over the

past few years.

TCF’s leasing and equipment ﬁnance portfolio grew

14.6 percent, which includes operating leases. This

$2.2 billion portfolio is well diversiﬁed by equipment

type and geography, and grew nicely in all active seg-

Another strong fee category was leasing and equipment

ments. Our leasing and equipment ﬁnance operation

ﬁnance revenues, which totaled $59.2 million, up

is the 37th largest in the United States, and is the 18th

11.6 percent, from the prior year.

largest bank-owned equipment ﬁnance company in

the United States. Winthrop Resources Corporation

grew its portfolio $22.7 million, or nine percent, in

5 . Po w e r A s s e t s® a n d Po w e r L i a b i l i t i e s®

TCF’s Power Asset lending operations continued to

generate strong growth. Power Assets totaled $11.8

billion at the end of 2007 and average Power Assets

increased 9.4 percent over the prior year.

Consumer home equity loans grew 10.9 percent and

totaled $6.5 billion. During 2007, we tightened under-

writing standards further to require higher borrower

Leasing &
Equipment
Finance Portfolio
Millions of Dollars

credit scores and lower loan-to-value ratios.

Includes operating leases.

Commercial loans increased 5.9 percent in 2007 and

totaled $3.1 billion. We have maintained our credit

underwriting discipline in growing this portfolio. This

portfolio is generally secured by real estate and other

assets, and 93 percent of the portfolio is located in

5
7
1
,
2
$

9
9
8
,
1
$

0
6
5
,
1
$

9
8
3
,
1
$

2
6
1
,
1
$

12/03

12/04

12/05

12/06

12/07

page 4 | TCF Financial Corporation and Subsidiaries

Letter to Stockholders

2007 – a positive trend which will favorably impact

TCF opened 20 branches in 2007 (10 traditional, seven

future periods. TCF’s leasing and equipment ﬁnance

supermarket and three campus). We also relocated six

business is now one of the largest proﬁt centers at TCF.

branches and remodeled 15 branches. TCF closed 10

Power Liabilities totaled $9.58 billion as of December

branches in addition to the Michigan branches we sold.

31, 2007, a decline of $192.7 million. In the ﬁrst quarter

7. C a m p u s B a n k i n g

of 2007, TCF sold $241 million of out-state Michigan

deposits. During the second half of 2007, deposit

competition intensiﬁed. Large banks with credit and

subprime issues raised their retail deposit rates in order

to replace other higher cost wholesale funding sources.

TCF chose not to match these higher rates, particularly

In 2007, TCF entered into a new exclusive campus

banking relationship with the University of Illinois.

The relationship will provide college students with

internet banking, bill payment capabilities and checking

account access through their i-cards™. The University
of Illinois has an annual enrollment of approximately

in certificates of deposit. This resulted in a decline

70,000 students.

in balances in this category. While savings balances

increased in 2007 because of generally higher interest

rates, non-interest bearing checking balances declined.

6 . B r a n c h e s

Collectively, TCF’s campus banking network includes

over 123,000 accounts from students, faculty and staff.

With our recent school additions, prospect list and

pipeline of new students, we have a great opportunity

In 2007, TCF sold its remaining out-state Michigan

for new business in our campus banking division.

branches and $241 million in deposits for an 11.5 per-

cent premium plus a related gain on the sale of branch

real estate. The total gain was $31.2 million. The sale

recognized that TCF’s convenience banking strategy

works better in densely populated urban areas, and

that we have other more attractive growth opportunities.

Our timing was excellent on the sale transaction and

we received a very attractive premium.

8 . O t h e r A s s e t S a l e G a i n s

In addition to the branch sale noted above, TCF

recognized $20 million in asset sale gains in 2007

compared to $5.8 million in 2006. The 2007 gains

included $13.3 million from the gains on sales of

securities and $6.7 million from the sales of branch

ofﬁce real estate. The sales of branch ofﬁce real estate

Letter to Stockholders

2007 Annual Report

page 5

generally resulted from relocating certain of our mature

disability benefit to an employee-funded plan. We

branches to improved facilities in order to enhance

also renegotiated major vendor contracts to reduce

our growth prospects.

TCF’s costs.

9 . E x p e n s e C o n t r o l I n i t i a t i v e s

These actions resulted in TCF’s 2007 operating expenses

TCF completed numerous actions to limit operating

costs in 2007. These actions included the closure and

sale of branches as well as the reduction of consumer

lenders to reﬂect the slower housing markets. We also

consolidated our retail branch backroom functions and

outsourced our investment and insurance backroom

operations. TCF froze its pension plan in 2006 and

in 2007 converted TCF’s company-funded long-term

Premier
Checking &
Savings Deposits
Average Balances
Millions of Dollars

n Premier Savings

n Premier Checking

9
3
2
,
2
$

0
0
9
,
1
$

9
6
0
,
1
$

4
8
2
$

1
$

12/03

12/04

12/05

12/06

12/07

(excluding operating lease depreciation and fourth

quarter Visa charges) being almost flat with 2006.

This was an excellent team performance.

10 . V I S A

In the fourth quarter of 2007, Visa completed its cor-

porate restructuring in preparation for an initial public

offering in 2008. After the restructuring was completed,

the SEC concluded that all member banks must record

an expense for their contingent obligation to Visa for the

litigation indemniﬁcation liability under Visa’s bylaws.

Accordingly, in the fourth quarter TCF recorded

$7.7 million in pre-tax non-cash expense to reﬂect its

estimated proportionate amount of Visa’s liability.

The estimated amount reﬂects the settlement of the

AMERICAN EXPRESS® case, an estimated settlement

of the DISCOVER® case and all other “covered” liti-

gation. If the initial public offering is completed, Visa

will deposit amounts into an escrow fund intended

to satisfy these legal obligations, and TCF’s recorded

liability at that time may no longer be required.

page 6

| TCF Financial Corporation and Subsidiaries

Letter to Stockholders

Retail banking is an important area for
our company and one with signiﬁcant future
ﬁnancial beneﬁts.

11 . I n c o m e Ta x e s

3 . R e t a i l B a n k i n g

Income taxes were lower than planned in 2007 due to

In 2008, we are refocusing our retail banking efforts to

favorable tax developments including the closing of

improve the quality of our deposit accounts and grow

certain previous years’ tax returns, changes in state tax

deposit balances. Active checking account customers

laws, and positive developments in income tax audits.

produce higher revenues and have lower attrition rates.

2008 Focus Areas and Concerns

We have enhanced our internal reporting and changed

employee incentives to influence their behavior.

Growing deposits in this economic climate is going to

1 . T h e Y i e l d C u r v e a n d I n t e r e s t R a t e s

be very difﬁcult.

The strong headwinds continue and make this area

very challenging to manage. The current credit crunch

and liquidity crisis has crept into deposit pricing and

increased our deposit costs. Further Federal Reserve

Retail banking is an important area for our company

and one with significant future financial benefits.

This is a high priority item for our entire management

Board interest rate cuts may be difﬁcult to offset through

team in 2008.

lower deposit rates.

2 . C r e d i t Q u a l i t y

Economic conditions are always a major risk for all

banks, including TCF. A recession would adversely

impact our results through increased loan and lease

Total New
Branches
Number of Branches

charge-offs and higher loss provisions. Further deterio-

ration in home values is also a risk. We expect TCF’s

credit quality to deteriorate modestly in 2008 with

somewhat higher charge-off levels. Our risk is elevated

in this area due to the weak Michigan economy and

depressed housing market.

n Supermarket Branches

n Traditional and Campus Branches

Branches opened since January 1, 2002.

6
4

7
2

1
4
1

3
2
1

4
0
1

6
7

12/02

12/03

12/04

12/05

12/06

12/07

Letter to Stockholders

2007 Annual Report

page 7

4 . B r a n c h e s

Our rapid expansion in Colorado over recent years

TCF frequently evaluates its branches for performance

has also slowed down by design. We currently have 46

and growth opportunities in its markets. With the

branches in Colorado and plan to open two branches

recent shift in focus from new branch expansion to

in 2008. Our focus in Colorado is shifting from expan-

improving the operating efﬁciencies of our existing

sion to proﬁts. With our unique portfolio of all new

branch network, in 2008 we intend to remodel 20

branches located in premier sites, we are very well

branches, relocate three branches, and close and consoli-

positioned for customer and proﬁt growth in Colorado.

date three branches. These actions will improve the cus-

tomer experience and boost TCF’s capabilities to grow

5 . V I S A

deposit accounts, deposit balances and consumer loans.

TCF also plans to open 10 new branches in 2008, three

of which are scheduled to open in our new separately

chartered Arizona Bank. Arizona’s prospects are strong

and remain an excellent growth market for TCF.

The Visa payment system is still under legal siege by

the merchants who seek to reduce or eliminate their

card interchange expenses. At some point in time,

this litigation may be settled and interchange rates

could be reduced. Based on information received from

Visa, completion of its initial public offering could

New Branch
Total Deposits
Millions of Dollars

Branches opened since January 1, 2002.
18% annual growth rate (’07 vs. ’06).

7
6
2
,
1
$

2
7
0
,
1
$

2
8
7
$

New Branch
Banking Fees &
Other Revenue
Millions of Dollars

Branches opened since January 1, 2002.
34% annual growth rate (’07 vs. ’06).

2
.
3
7
$

8
.
4
5
$

7
.
9
3
$

7
8
2
$

6
1
1
$

5
4
$

1
.
4
2
$

2
.
7
$

1
.
1
$

12/02

12/03

12/04

12/05

12/06

12/07

12/02

12/03

12/04

12/05

12/06

12/07

page 8

| TCF Financial Corporation and Subsidiaries

Letter to Stockholders

result in a gain for TCF. The litigation reserve situation

We continue to have a mutuality of interest with our

is also a risk. The debit card is an integral part of the

stockholders and will always evaluate opportunities

checking account and TCF has over $100 million of

to deliver stockholder value. Our senior management

revenues at stake.

and board of directors own over 10 million shares,

6 . E x p e n s e C o n t r o l

This remains a focus for 2008. We intend to continue

or eight percent of TCF stock. Eighty-five percent

of our match-eligible employees participate in TCF’s

Employees Stock Purchase Plan, which at year-end

our review efforts in this area and with strong teamwork

held over 7.2 million shares.

and focus, necessary actions will be made to improve

efﬁciency and allow investments to be made to enhance

future growth.

7 . R e g u l a t o r y B u r d e n

We are operating in one of the toughest banking envi-

ronments I have seen and 2007 was a very difficult

year. I would like to thank the board of directors for

their continued dedication, wise counsel and support.

The regulatory burden continues to increase at a

It was very much appreciated in 2007. I would also

crushing pace. These burdens increased in 2007 and

like to thank our hard-working employees, who have

will continue to grow in 2008. We must comply with

put in extraordinary effort during the year. Their

all of these laws and regulations. The impact of all

exceptional abilities, commitment and energy make

these laws and regulations is an increase in our costs

everything happen. We are proud of the TCF Team

and a growing amount of senior management time

and its accomplishments.

and attention that must be directed to monitor and

comply with these requirements.

Thank you for your continued support and

investment in TCF.

In Closing

A careful reading of this annual report will tell you

almost everything about our company. We try to keep

our ﬁnancial reporting simple and our disclosures

Lynn A. Nagorske

Chief Executive Officer

complete.

Letter to Stockholders

2007 Annual Report

page 9

TCF Business Highlights

TCF’s philosophy of banking

Successful franchises are built upon a carefully planned

First. We bank a large and economically diverse customer

philosophy that can endure the test of time – standing

base with different needs for products and services. We

against the inevitable up and down cycles of the market – in

believe in providing quality products and innovative service

order to consistently execute a solid business strategy. TCF’s

to our customers, which creates loyalty to TCF and value

underlying banking philosophy was written in 1989 and con-

for our stockholders. From our introduction of TCF Totally

tinues to guide our business strategies today, withstanding

Free Checking in 1986, to the successful premier accounts

even the recent volatility in the financial services sector

launched a few years ago and the TCF Power CheckingSM

resulting from the housing slowdown and deteriorating credit

account we began offering customers in 2007, we have

markets. At TCF, we plan for long-term growth and profits

always attempted to match our products to our clients’

with our stockholders’ interest as our utmost priority.

needs. By listening to them, we develop unique strategies

TCF emphasizes convenience in banking;
we’re open 12 hours a day, seven days
a week, 364 days per year. TCF banks a
large and diverse customer base. We
provide customers innovative products
through multiple banking channels,
including traditional, supermarket and
campus branches, TCF Express Teller®
and other ATMs, debit cards, phone
banking, and Internet banking.

TCF’s success is built upon the belief that every customer is

valuable and deserves convenient choices to conduct their

banking. In other words, TCF strives to place The Customer

for growth. These fundamental business strategies have

served, and will continue to serve, TCF customers and stock-

holders well.

A key strategic driving force behind TCF’s success has been

convenience in banking. We are open seven days a week and

on most holidays. We have extended banking hours in our

traditional, supermarket and campus branches to ensure

our customers can bank when it is best for them. We

continue to open new branches and are now located in seven

states with a total of 453 branches. These branches are

available to approximately a tenth of the U.S. population

located in six major metropolitan areas: Minneapolis-

St. Paul, Chicago, Detroit, Milwaukee and the fast-growing

page 10

| TCF Financial Corporation and Subsidiaries

Business Highlights

areas of Denver and Phoenix. Since 2004, TCF has been

banking and bill payment products. To enhance our

consolidating, remodeling and relocating some of its existing

communication to online banking customers regarding

branches to improve the customer experience. We have seen

new products and promotions, TCF began utilizing an online

profitable results from these changes. We plan to continue

secured messaging service in 2007.

our new branch expansion in 2008 with the opening of more

traditional, supermarket and campus branches. Initiatives

like these will continue in the future.

TCF’s 136,000 small business customers can take advantage

of TCF’s Internet banking services, which provide expanded

account histories and the ability to download transaction

A key element of TCF’s convenience strategy is the evolution

detail into financial software applications. In 2007, TCF

of convenient products and services. Our customers’ needs

began offering a merchant payment processing service via a

for products and services change periodically. New products

third party to enhance the efficiency of our business banking

not only attract first time customers, they also allow us to

customers. TCF’s convenient products and services help small

develop deeper relationships with our existing customers.

business owners manage their businesses more effectively.

TCF has a culture that seeks out and initiates innovative

products and services. This culture is encouraged annually

with a strategic initiative meeting bringing forth new con-

cepts. Initiatives that we introduced during 2007 were the

TCF Power Checking and TCF Easy SavingsSM accounts, enroll-

ment in the TCF CashRewards Loyalty ProgramSM, and expanded

pricing options on certificates of deposits.

TCF also provides a host of products and services for

Campus banking at TCF has become a convenient service for

the Universities of Minnesota, Michigan, and most recently

Illinois plus nine other institutions in the Midwest. We are

pleased that in 2007, TCF secured a new campus banking

relationship with two campuses of the University of Illinois,

including the Urbana campus, which further deepens our

ties to the Big Ten Conference®. This is a great opportunity
for TCF. The primary campus product – the campus card –

customers who prefer the convenience of electronic

offered to students, faculty and staff, is a multi-purpose

banking. These include an automated phone system, an

convenience card that serves as a school identification

extensive network of TCF Express Teller ATMs and online

card, ATM card, library card, security card, phone card, and

Business Highlights

2007 Annual Report

page 11

stored value card for vending machines and other local mer-

In 2007, TCF grew Power Assets by $1.1 billion, or 10 percent.

chants. TCF now has over 123,000 campus deposit accounts

TCF tightened its credit standards in consumer home equity

and looks forward to continuing to grow this business.

lending as a result of the significant turmoil in the housing

TCF’s strategy for convenience banking remains the corner-

stone of our success. Our goal is to make the banking

experience available and comfortable for our diverse and

growing customer base. Our extended branch network offers

longer banking hours, assorted products and services, and

convenience technology to serve our valued customers.

TCF is primarily a secured lender and
emphasizes credit quality over asset
growth. The costs of poor credit far
outweigh the benefits of unwise
asset growth.

Much of TCF’s success over the years can be attributed to its

philosophy of secured lending based on conservative under-

writing and a disciplined credit approval process. Add this

philosophy to a hard working and well-trained staff with a

well organized and customer focused backroom operation,

and you have the formula to earn profits, grow your portfo-

lios and service your customers well.

sector and still managed to grow this portfolio by 11 percent,

or $640 million, in 2007. The banking industry saw increases

in delinquencies, non-performing assets and charge-offs

during 2007. The highly publicized subprime industry lending

problem, along with ill-advised option rate loans, caused

increases in loan defaults which led to more foreclosures,

higher home inventories and eventually deterioration in

home values in almost every market. In addition, the liquidity

crunch reduced the number of lenders in the mortgage arena,

leaving many potential home buyers without access to

credit. While TCF did not participate in any of these risky

loan programs, TCF’s credit quality was impacted by the

depressed housing markets.

TCF’s commercial lending business was also able to increase

its portfolio by six percent during 2007. In recent years with

the market flush with liquidity, we saw bank and non-bank

competitors competing for transactions in this business

with irrational loan pricing and terms. The liquidity crunch

has brought sanity back to this business, with many non-

bank competitors being eliminated.

page 12

| TCF Financial Corporation and Subsidiaries

Business Highlights

In addition to our banking franchise, we have a growing

leasing and equipment finance business. TCF Equipment

Finance generates new business through a diverse group of

marketing segments. It provides financing solutions for small

and mid-size companies through vendor programs, manufac-

turers, distributors, and franchise organizations. Winthrop

TCF utilizes conservative accounting
and financial reporting principles
that accurately and honestly report
our financial condition and results of
operations. We believe good accounting
drives good business decision-making.

Resources Corporation focuses on providing customized,

TCF has frequently been recognized by banking periodicals

high technology lease financing to meet the special needs

for its conservative and in depth reporting of the financial

of its customers. Both companies are national in scope,

condition of the bank. We take pride in our ability to provide

collectively financing a broad range of equipment types in

detailed financial reporting via our sophisticated profit center

all 50 states and to a limited extent in foreign countries.

reporting system and conservative accounting policies and

TCF leasing and equipment finance had an exceptional year

in loan and lease originations and growth. The leasing and

equipment finance portfolio increased $286 million, or 16

percent, during 2007. Both companies continue to find growth

opportunities in markets where they can be effective and

procedures. Over the years, this system has been refined and

expanded. As a result, management can get a clear picture

of where profits are being generated – down to the branch

and product level – and use this intelligence to make wise

business decisions.

have a competitive presence. We are pleased TCF’s leasing

TCF believes that long-term success in banking is based on

and equipment finance business has been recognized as the

conservative strategies that are efficiently and effectively

18th largest bank-owned equipment finance/leasing company

executed. At TCF, we believe we have taken a conservative

in the U.S. and we expect continued growth from this business.

business operating approach to banking for many years.

Simply put, TCF is in the business of banking and we know

our business well.

Business Highlights

2007 Annual Report

page 13

TCF has earned high profits for many years due to its conser-

Comptroller of the Currency (OCC) and the Federal Reserve

vative approach to banking and as a result, has generated

Board, and has stable or above ratings from Moody’s®, Fitch®

excess capital greater than that required to support balance

and Standard & Poor’s®.

sheet growth. We feel the best use of excess capital is to

return it to our stockholders in the form of either dividends

or stock repurchases. TCF has been able to increase its divi-

dends for the past seventeen consecutive years. In fact, our

dividend policy has been recognized by Standard & Poor’s®

and was added to the Dow Jones U.S. Select Dividend IndexSM.

TCF’s stock repurchase program has been active since 1998

and 65.5 million shares have been repurchased at an average

cost of $19.14 per share. In 2007, TCF’s board of directors

authorized a new program for TCF to acquire up to an addi-

tional 5 percent of TCF stock, or approximately 6.5 million

shares. Stock repurchase may slow in the coming years as

TCF may have to retain more capital to support its asset

growth. Overall, TCF has returned 90 percent of its net income

to stockholders in dividends and stock repurchases over

the last five years.

TCF operates like a partnership. We’re
organized geographically and by
function, 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.

A strong management team is needed to truly operate as

a retail business offering convenient services, innovative

TCF has consistently exceeded its regulatory capital require-

products and good service. One of TCF’s most important

ments in Tier 1, leverage and risk-based capital. TCF is

assets is its management bench strength and depth. Each

considered “well-capitalized” by both the Office of the

of the bank presidents is responsible for the financial goals

page 14 | TCF Financial Corporation and Subsidiaries

Business Highlights

of their bank. We believe strongly that local management

TCF’s holding company and corporate functions allocate

teams make the best decisions regarding local issues. Our

capital and provide centralized management services such

management teams are responsible for business develop-

as data processing, bank operations, product development,

ment, customer relations and community involvement

marketing, finance, treasury services, employee benefits,

within their bank.

legal services, compliance, human resources, credit review

TCF also believes functional product line management

benefits from a centralized approach. Centralized functional

management, with support and direction from specific bank

presidents, facilitates efficient product development, effec-

and internal audit. This structure gives locally managed

banks the flexibility to share, compare and refine new

products and services while enjoying the intellectual and

operational benefits of a larger organization.

tive communication, consistent implementation and close

A simple, well-grounded and straightforward philosophy of

monitoring of our strategic initiatives, as well as central

banking, which is outlined on the back inside cover of this

accountability for the success of our major product areas.

report, has been the foundation of TCF’s conservative and

enduring business strategies. Coupled with successful

execution by our team of employees and solid management,

TCF remains one of the industry’s top performing banks in

the country. We are proud of that achievement.

Organizing management to more efficiently and effectively

manage our local banks and implement our strategic

products and services helps TCF in several areas. First, we

enjoy informed timely local decision-making that allows

us to compete effectively in local markets on a daily basis.

Second, centralized strategic committees develop products

and services, test and selectively pilot these programs to

develop efficiencies and then quickly implement them bank-

wide. In the process, TCF develops an exceptional team of

managers and strategists.

Business Highlights

2007 Annual Report

page 15

TCF Community Relations

Building strong communities

TCF believes in community partici-
pation, both financially and through
volunteerism. We feel a responsibility
to help those less fortunate.

There are a variety of ways local nonprofit organizations

receive financial support from the TCF Foundation,

TCF Bank® and its employees:

• Branch Funds – Contributions or grants are awarded to

We believe TCF has a special obligation to its communities.

organizations located near TCF branches.

This commitment to community is demonstrated by

supporting a variety of nonprofit organizations through

volunteer time, counsel, board representation and grant

making, as well as supporting key projects through

financial contributions.

Our TCF Foundation believes that all children should have

the right to good education. Since 1987, TCF has successfully

• 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 deduction; contributions are matched

100 percent by the TCF Foundation.

worked with inner-city schools. TCF also focuses on the

• TCF Foundation and Corporate Giving – Larger grants

higher education scholarship needs of our communities

and multi-year commitments awarded to local and

and employees. Last year, we contributed over $830,000 in

some national organizations.

educational grants.

Each year, TCF employees create and organize an internal

During 2007, TCF and its employees contributed over $3 million

March of Dimes® campaign, raising money to prevent birth

to charitable organizations in human services, education,

defects and infant mortality. In 2007, TCF employees raised

community development, and the arts. In addition, numerous

$370,000, supporting the mission of the March of Dimes.

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 10 years, has contributed more than $28 million

in grants to deserving organizations.

To our employees who served overseas, and the families of

those employees currently on active duty, we would like to

extend a special thank you.

page 16

| TCF Financial Corporation and Subsidiaries

Community Relations

156976_10K_F_Q6 2/16/08 3:48 PM Page 10Ki

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, 2007
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: 952-745-2760

Securities registered pursuant to Section 12(b) of the Act:

Common Stock (par value $.01 per share)
(Title of class)

New York Stock Exchange
(Name of exchange on which registered)

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 Act.
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 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 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 Act).
Yes

As of June 30, 2007, 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 asked 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 $3,065,051,630.

As of January 31, 2008, there were 126,318,946 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 5, 2008 are incorporated by reference into
Part III hereof.

DOCUMENTS INCORPORATED BY REFERENCE

156976_10K_F_Q6 2/16/08 3:48 PM Page 10Kii

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 Accounting Fees and Services

Exhibits and Financial Statement Schedules

Page

1
8
13
13
13
13

14
16
17
42
44
44
45
49
76
77
77
77
78
78

79
80
80
80
80

81
82
83

156976_10K_F_Q6 2/16/08 3:48 PM Page 1

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 (“TCF Bank”),
are headquartered in Minnesota and Arizona, respectively.
TCF National Bank operates bank branches in Minnesota,
Illinois, Michigan, Colorado, Wisconsin and Indiana. TCF
National Bank Arizona operates bank branches in Arizona.
TCF’s primary focus is on the delivery of retail and commercial
banking products in markets served by TCF Bank. TCF’s prod-
ucts, such as its commercial equipment loans and leases,
are offered in markets outside areas served by TCF Bank.

At December 31, 2007, TCF had total assets of $16 bil-
lion and was the 36th largest publicly traded bank holding
company in the United States based on total assets as of
September 30, 2007. 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 and small business
banking; commercial 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® 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 regarding TCF’s
reportable operating segments.

Retail Banking
At December 31, 2007, TCF had 453 retail banking branches,
consisting of 194 traditional branches, 244 supermarket
branches and 15 campus branches. TCF operated 109 branches
in Minnesota, 202 in Illinois, 56 in Michigan, 46 in Colorado,
31 in Wisconsin, five in Indiana and four in Arizona.

Targeted new branch expansion is a key strategy for TCF.
TCF has significantly expanded its banking franchise in recent
years. 141 new branches have been opened since January 1,
2002. During 2007, TCF opened 20 branches, consisting of 10
traditional branches, seven supermarket branches and three
campus branches.

In order to improve the customer experience and enhance

deposit and loan growth, TCF relocated six traditional
branches to improved locations and facilities and remod-
eled one traditional branch and 14 supermarket branches
in 2007. TCF intends to relocate three branches to improved
locations and facilities, including two traditional branches
and one supermarket branch, and to remodel 19 supermar-
ket branches and one campus branch in 2008.

TCF anticipates opening 10 new branches in 2008,
consisting of five new traditional branches and five new
supermarket branches. TCF plans on opening fewer branches
in 2008, compared with 2007, in an effort to optimize exist-
ing branches in target market areas. TCF’s expansion is
largely dependent on the continued long-term success of
branch banking and the expansion and success of its super-
market partners.

Campus banking represents an important part of TCF’s
retail banking business. TCF has alliances with the University
of Minnesota, the University of Michigan, the University of
Illinois plus seven other colleges. These alliances include
exclusive marketing, naming rights and other agreements.
Branches have been opened on many of these college cam-
puses. 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 care 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, 2007,
there were $206 million in campus deposits. TCF has a
$35 million 25-year naming rights agreement with the
University of Minnesota and will sponsor their new football
stadium to be called “TCF Bank Stadium™”. Construction of
this stadium should be complete in 2009.

2007 Form 10-K | 1

156976_10K_F_Q6 2/16/08 3:48 PM Page 2

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, 2007, 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. TCF’s leasing and equipment
finance businesses, TCF Equipment Finance, Inc. (“TCF
Equipment Finance”) and Winthrop Resources Corporation
(“Winthrop Resources”), finance equipment in all 50 states
and, to a limited extent, in foreign countries. TCF Equipment
Finance delivers equipment finance solutions to small and
mid-size companies in various industries. Winthrop Resources
focuses on providing customized, high technology lease
financing to meet the special needs of mid-size and large
companies and health care facilities that procure computers,
servers, telecommunication and other technology equipment.
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 discounting
of lease rentals with various other financial institutions at
fixed interest rates.

Education Lending TCF originates education loans for
resale. TCF sells certain education loans once they are 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.

Non-interest income is a significant source of revenue
for TCF and an important factor in TCF’s results of operations.
Increasing fee and service charge revenue has been challeng-
ing as a result of slower growth in deposit accounts and
changing customer behavior. Providing a wide range of retail
banking services is an integral component of TCF’s business
philosophy and a major strategy for generating additional
non-interest income. 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, automo-
biles, vacations and education.

TCF’s consumer lending origination activities primarily
consist of home equity real estate secured lending. They also
include loans secured by personal property and to a limited
extent, unsecured personal loans. Consumer loans may be
made on a revolving line of credit or fixed-term basis. TCF
does not have any subprime lending programs or originate
2/28 adjustable-rate mortgages (ARM) or option ARM loans.

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.

2 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 3

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. TCF Bank’s portfolio does
not include commercial paper, asset-backed commercial
paper or asset-backed securities secured by credit cards or
car loans. TCF Bank also does not participate in structured
investment vehicles. 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, 2007,
interest-bearing deposits comprised 77% of total deposits,
as compared with 75% at December 31, 2006.

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.
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. Generally, securities with a value in
excess of the amount borrowed are required to be deposited
as collateral with the counterparty to a repurchase agree-
ment. The creditworthiness of the counterparty is important
in establishing that the overcollateralized amount of secu-
rities delivered by TCF is protected. TCF only enters into
repurchase agreements with institutions with a satisfactory
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.

2007 Form 10-K | 3

156976_10K_F_Q6 2/16/08 3:48 PM Page 4

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
sells 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. The REIT and related
companies must meet specific provisions 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 would increase significantly.
TCF’s FOC operates under income tax laws in certain states
(including Minnesota and Illinois) that recognize FOCs.
The taxation of REITs and FOCs is and has been the subject
of federal and state audits, litigation with state taxing
authorities and tax policy debates by various state legisla-
tures. Illinois passed legislation in 2007 that will reduce or
eliminate TCF’s REIT and FOC tax benefits in the future. Other
states may revise their tax laws applicable to REITs or FOCs
and such changes would increase TCF’s income 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, savings institutions, credit unions and
investment banks. 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 com-
panies and commercial banks in the financing of equipment.
Expanded use of the Internet has increased competition
affecting TCF and its loan, lease and deposit products.

Employees As of December 31, 2007, TCF had 8,183
employees, including 2,755 part-time employees. TCF pro-
vides its employees with a comprehensive program of bene-
fits, 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, which has 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 significant change in
recent years. These laws and regulations impose restrictions
on activities, minimum capital requirements, 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”).

4 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 5

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 activities.
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; unantici-
pated 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 bor-
rowings, or for its other cash needs. TCF Bank’s ability to pay
dividends is dependent on regulatory policies and regulatory
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 retained profits for the current
year combined with its net retained profits for the preced-
ing two calendar 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 will also depend on its earnings and ability to
meet minimum regulatory capital requirements in effect
during future periods. These capital adequacy standards
may be higher in the future than existing minimum regulatory
capital requirements. The OCC also has the authority to pro-
hibit the payment of dividends by a national bank when it
determines such payments would constitute an unsafe and
unsound banking practice. In addition, income tax consider-
ations may limit the ability of TCF Bank to make dividend
payments in excess of its current 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 Notes 13
and 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. Bank subsidiaries of finan-
cial holding companies like TCF Bank are subject to certain
restrictions in their dealings with holding company affiliates.
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 under-
capitalized 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.

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Under the Bank Holding Company Act (“BHCA”), FRB
approval is required before acquiring 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 gener-
ally prohibits a bank holding company, with certain excep-
tions, 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 activities 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
institutions 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
Shareholder 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 fed-
eral 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 provisions of the FDIC Act
were fully implemented January 1, 2007.

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, 2007. The DIF reserve ratio calculated by the
FDIC that was in effect at December 31, 2007 was 1.22%.
In 2007, 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.

In 2007, the annual insurance premiums on bank deposits
insured by the DIF varied between $.05 per $100 of deposits
for banks classified in the highest capital and supervisory
evaluation categories to $.43 per $100 of deposits for banks
classified in the lowest capital and supervisory evaluation
categories. TCF Bank was classified in the highest capital
and supervisory evaluation category.

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 were not required
for TCF Bank for 2006 and 2005.

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 in 2007
and 2008. This one-time historical assessment credit was
established to benefit banks that had funded deposit

6 | TCF Financial Corporation and Subsidiaries

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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. TCF Bank’s one-
time historical assessment credit was $9.6 million when it
was established in 2006. During 2007, TCF utilized this credit
to entirely offset $5.8 million of Federal deposit insurance
assessments. The remaining credit of $3.8 million will be
completely used in 2008 and only partially offset 2008
assessments. As such, TCF’s Federal deposit insurance
expense will increase in 2008.

In addition to risk-based deposit insurance assessments,

additional assessments may be imposed by the 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 2007 ranged from $.0114 to $.0122
per $100 of deposits. Financing Corporation assessments
of $1.1 million each year for 2007, 2006 and 2005 were paid
by TCF Bank and are included in other expense.

In addition, the FDIC is authorized to terminate a deposi-
tory institution’s deposit insurance if it finds that the insti-
tution is being operated in an unsafe and unsound manner or
has violated any rule, regulation, order or condition admin-
istered 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 reme-
dies, including civil money penalties, may be assessed
against an institution or an institution’s directors, officers,
employees, agents or independent contractors. Under the
Bank Secrecy Act and USA Patriot Act, the OCC may, and in
some cases is obligated to, take enforcement action where
it finds a statutory or regulatory violation.

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
insurance and securities brokerage activities.

National Bank Investment Limitations Permissible
investments by national banks are limited by the National
Bank Act and by rules of the OCC. Non-traditional bank
activities permitted by the Gramm-Leach-Bliley Act will sub-
ject a bank to additional regulatory limitations or require-
ments, 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 Community
Reinvestment Act 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.

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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 identify, 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 each area. Management
continually reviews the adequacy and effectiveness of these
policies, systems and procedures.

As an integral part of the risk management process,
management has established various committees consisting
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
principal 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.
The risk officers, while reporting directly to their respective
line, facilitate implementation of the enterprise risk man-
agement and governance process. An Enterprise Risk
Management Committee has been established consisting of
senior executives and others within the Company, which over-
sees and supports the Enterprise Risk Management Officer.
The Board of Directors, through its Audit Committee,
has overall responsibility for oversight of the Company’s
enterprise risk management governance process.

Taxation
Federal Taxation The statute of limitations on TCF’s con-
solidated Federal income tax return is closed through 2003.

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, Indiana and Arizona. The methods of filing, and
the methods for calculating taxable and apportionable
income, vary depending upon the laws of the taxing juris-
diction. 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.

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Credit Risk Management Credit risk is defined as the
risk to earnings or capital if an obligor fails 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 securities available for sale portfolio. The
Company manages securities transaction risk by monitoring
all unsettled transactions. All counterparties and transac-
tion limits are reviewed and approved annually by both
ALCO and the Company’s senior credit committee. To further
manage credit risk in the securities available for sale port-
folio, over 99% of the securities held in the securities avail-
able for sale portfolio are guaranteed by Fannie Mae and
Freddie Mac.

To manage credit risk arising from lending and leasing
activities, management has adopted and maintains sound
underwriting policies and procedures, and periodically
reviews the appropriateness of these policies 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 performance. Limits are estab-
lished 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 estab-
lished 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 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 (interest-earning assets, deposits and borrow-
ings) 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 management 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
interest rates, spread narrowing and widening, yield curve
twists, and changes in assumptions about customer behav-
ior in various interest rate scenarios. The simulation analy-
sis is based on various key assumptions which relate to the
behavior of interest rates and spreads, changes in product
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.

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In addition to the valuation analysis, management
utilizes 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 exter-
nal 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 rela-
tively 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 bal-
ance 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 simula-
tion model. As with the net interest 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 under-
take in response to anticipated 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

10 | TCF Financial Corporation and Subsidiaries

the Company and periodically reviews market conditions for
issuing debt securities to wholesale investors. Key liquidity
ratios and the amount available from alternative funding
sources are reported to ALCO on a monthly basis.

TCF maintains diverse and reliable sources of funding.
They include federal funds lines totaling at least $500 mil-
lion, 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. 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 financial operations of the FHLBs and actions by the
Federal Housing Finance Board’s Office of Supervision.

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

156976_10K_F_Q6 2/16/08 3:48 PM Page 11

includes determining whether the system of internal controls
over financial reporting is appropriate for the type and level
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 con-
sumer compliance 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 manage-
ment 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-interest 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 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
adequate 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, 2007, TCF had
244 supermarket branches, representing 54% of all retail
branches. Supermarket banking continues to play an impor-
tant 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 USA Inc. (Visa USA) and
MasterCard®. TCF Financial Corporation’s bank subsidiaries
have membership interests in Visa USA. Under Visa USA’s
Bylaws, TCF has a contingent obligation to indemnify Visa
USA for certain litigation unrelated to TCF. See page 38
under Management’s Discussion and Analysis for details
of TCF’s contingent obligation to indemnify Visa USA for
certain litigation.

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 opera-
tions. 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. A significant decline in home val-
ues would likely lead to a decrease in new home equity loan
originations 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.

Leasing and Equipment Finance Activities TCF’s
leasing and equipment finance activities are subject to
the risk of cyclical downturns and other adverse economic
developments. In an adverse economic environment, there

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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 previ-
ously placed in service. TCF, like all owners and lessors of
commercial equipment, may also 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 companies 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 exposure to lessor’s liability
risk by requiring certain lessees to furnish evidence of liabil-
ity 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 laws and regulations. Income tax regulations are often
complex and require interpretation. Changes in income
tax regulations 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 REITs or related
entities, TCF’s tax expense would increase significantly. The
REIT and related companies must meet specific provisions
of the Internal Revenue Code and state tax laws. Use of
REITs is and has been the subject of federal and state audits,
litigation with state taxing authorities and tax policy debates
by various state legislatures. Any unfavorable law changes
and unfavorable audit results in 2008 would increase
TCF’s income taxes. 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 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 tax and accounting laws,
regulations, rules, and standards, have a significant
impact on the ways that financial institutions conduct
business, implement strategic initiatives, engage in tax
planning and make financial disclosures. These laws, regu-
lations, rules, and standards are constantly evolving and
may change significantly over time. 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.
Violations of these laws can result in enforcement actions
which can impact operations.

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 rul-
ings, could adversely affect TCF, and it is generally not pos-
sible 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 proposals
which, if enacted, could limit interest rates or loan, deposit
or other fees and service charges. For example, recently
enacted federal legislation will reduce interest subsidies
and other benefits available to financial institutions that
make education loans. Financial institutions have increas-
ingly 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 lending

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
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.

12 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 13

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. Although TCF has developed policies
and procedures designed to ensure compliance, regulators
may take enforcement action against TCF in the event
of noncompliance.

Disruption to Infrastructure The extended disruption
of vital infrastructure could negatively impact TCF’s busi-
ness, results of operations, and financial condition. TCF’s
operations depend upon, among other things, its technolog-
ical 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, 2007, TCF owned the buildings and
land for 134 of its bank branch offices, owned the buildings
but leased the land for 24 of its bank branch offices and
leased or licensed the remaining 295 bank branch offices, all
of which are well maintained. Bank branch properties owned
by TCF had an aggregate net book value of approximately
$254.3 million at December 31, 2007. At December 31, 2007,
the aggregate net book value of leasehold improvements
associated with leased bank branch office facilities was
$33.7 million. In addition to the branch offices, TCF owned
and leased other facilities with an aggregate net book value
of $43.9 million at December 31, 2007. 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
proceedings 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 claiming substantial 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.

2007 Form 10-K | 13

156976_10K_F_Q6 2/16/08 3:48 PM Page 14

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 com-
mon 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.

2007
First Quarter
Second Quarter
Third Quarter
Fourth Quarter

2006
First Quarter
Second Quarter
Third Quarter
Fourth Quarter

High

Low

Dividends
Declared

$27.91
28.99
28.25
27.95

$28.41
27.70
28.10
27.89

$24.93
25.39
22.69
17.17

$24.23
24.91
24.94
25.16

$.2425
.2425
.2425
.2425

.23
.23
.23
.23

As of January 31, 2008, there were 8,098 holders of

record 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 fac-
tors 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 retained profits for that year combined
with its net retained 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.

14 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 15

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,
2002 and reinvestment of all dividends).

TCF Stock Performance Chart

TCF Financial Corporation
S&P 500*
SNL All Bank & Thrift Index (1)
2007 TCF Peer Group (2)

$200

180

160

140

120

100

e
u
l
a
V

x
e
d
n
I

12/31/02

12/31/03

12/31/04

12/31/05

12/31/06

12/31/07

Index
TCF Financial Corporation
S&P 500*
SNL All Bank & Thrift Index (1)
2007 TCF Peer Group (2)

12/31/02
100.00
100.00
100.00
100.00

12/31/03
120.98
128.68
135.57
146.44

Period Ending

12/31/04
155.57
142.69
151.82
161.86

12/31/05
135.53
149.70
154.20
159.39

12/31/06
141.87
173.34
180.17
178.95

12/31/07
96.41
182.86
137.40
139.07

(1) Includes every bank and thrift institution in the U.S. traded on a major public exchange, a total of 599 companies as of December 31, 2007.

(2) Consists of the 30 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,
2007, as follows: Hudson City Bancorp, Inc.; First Horizon National Corporation; IndyMac Bancorp, Inc.; Synovus Financial Corp.; New York Community Bancorp, Inc.; Colonial
BancGroup, Inc.; Astoria Financial Corporation; Associated Banc-Corp; BOK Financial Corporation; First BanCorp.; Webster Financial Corporation; Flagstar Bancorp, Inc.;
First Citizens Bancshares, Inc.; Commerce Bancshares, Inc.; City National Corporation; Fulton Financial Corporation; BankUnited Financial Corporation; Downey Financial
Corp.; South Financial Group, Inc.; People’s United Financial, Inc.; Citizens Republic Bancorp, Inc.; Cullen/Frost Bankers, Inc.; BancorpSouth, Inc.; Valley National Bancorp;
Sterling Financial Corporation; East West Bancorp, Inc.; Wilmington Trust Corporation; UCBH Holdings, Inc.; International Bancshares Corporation; and Whitney Holding
Corporation. Ten of the companies, which were in the 2006 TCF Peer Group, are not in the 2007 TCF Peer Group due to merger and acquisition activity or changes in asset
size. Those 10 companies are: Mercantile Bankshares Corporation; W Holding Company, Inc.(September 30, 2007 data not available); Sky Financial Group, Inc.; Fremont
General Corporation; Investors Financial Services Corp.; MAF Bancorp, Inc.; First Republic Bank; People’s Bank (MHC); Bank of Hawaii Corporation; FirstMerit Corporation.

The following table summarizes share repurchase activity for the quarter ended December 31, 2007.

Period
October 1 to October 31, 2007

Share repurchase program (1)
Employee transactions (2)
November 1 to November 30, 2007
Share repurchase program (1)
Employee transactions (2)
December 1 to December 31, 2007
Share repurchase program (1)
Employee transactions (2)

Total number
of shares
purchased

100,000
1,611

–
–

Average
price paid
per share

Total shares
purchased as a
part of publicly
announced plan

Number of
shares that may
yet be purchased
under the plan

$22.91
$26.56

$
$

–
–

100,000
N.A.

–
N.A.

5,384,130
N.A.

(1) The current share repurchase authorization was approved by the Board of Directors on April 14, 2007. 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 6.5 million shares. This authorization does not have an expiration date.

(2) Restricted shares withheld pursuant to the terms of awards under the TCF Financial Incentive Stock Program to offset tax withholding obligations that occur upon vesting
and release of restricted shares. The TCF Financial Incentive Stock Program provides that the value of shares withheld shall be the average of the high and low prices of
common stock of TCF Financial Corporation on the date the relevant transaction occurs.

N.A. Not Applicable.

2007 Form 10-K | 15

156976_10K_F_Q6 2/16/08 3:48 PM Page 16

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

Losses on termination of debt
Gains on sales of branches

and real estate
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:

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

residential real estate loans

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:

Year Ended December 31,

2007

2006

$ 1,091,634 $ 1,026,994 $
537,530 $
$
20,689
485,276

550,177 $
56,992
490,285

2005
995,932 $
517,690 $
8,586
453,965

2004
981,777 $
491,891 $
18,627
467,027

2003
900,256
481,145
19,048
429,899

13,278
–

–
–

10,671
–

22,600
–

32,832
(44,345)

37,894
662,124
372,518
105,710
266,808 $

4,188
649,197
357,108
112,165
244,943 $

13,606
606,936
380,410
115,278
265,132 $

259
578,674
384,476
129,483
254,993 $

725
553,425
327,783
111,905
215,878

2.13 $
2.12 $
.97 $

1.90 $
1.90 $
.92 $

2.00 $
2.00 $
.85 $

1.87 $
1.86 $
.75 $

1.53
1.53
.65

$
$
$

Compound Annual
Growth Rate

1-Year
2007/2006

5-Year
2007/2002

6.3%
2.4
175.5
1.0

N.M.
–

N.M.
2.0
4.3
(5.8)
8.9

12.1
11.6
5.4

3.5%
2.0
15.0
3.8

2.9
–

80.8
4.4
.8
(3.3)
2.8

6.2
6.1
11.0

At December 31,

2007

2006

2005

2004

2003

Compound Annual
Growth Rate

1-Year
2007/2006

5-Year
2007/2002

$11,810,629 $10,705,890 $ 9,442,772 $ 8,404,404 $ 7,156,697
1,533,288
1,212,643
2,745,931
11,344,737

1,963,681
527,607
2,491,288
15,977,054

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

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

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

7,322,014
2,254,535
9,576,549
4,973,448
1,099,012

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

8.68 $

7.92 $

7.46 $

6.99 $

6,021,189
1,612,123
7,633,312
2,414,825
920,858
6.53

10.3%
8.1
(16.0)
1.9
8.9

.5
(9.2)
(2.0)
38.6
6.4
9.6

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 bank branches

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

N.M. Not Meaningful.

16 | TCF Financial Corporation and Subsidiaries

2007
1.76%
25.82
6.82
3.94
.30
45.75%
453

At or For the Year Ended December 31,
2005
2006
2.08%
1.74%
28.03
24.37
7.43
7.15
4.46
4.16
.29
.17
42.50%
48.42%
453
453

2004
2.15%
27.02
7.94
4.54
.20
40.32%
430

13.2%
(4.1)
(21.8)
(10.0)
5.5

4.7
3.3
4.4
9.8
2.4
5.6

2003
1.85%
23.05
8.03
4.54
.24
42.48%
401

156976_10K_F_Q6 2/16/08 3:48 PM Page 17

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
18
19
19
23
23
25
26
27
27
27
31
34
35
35
36
36
36
37
38
39
39
39
40
41
41

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 (“TCF Bank”),
are headquartered in Minnesota and Arizona, respectively,

and had 453 banking offices in Minnesota, Illinois,
Michigan, Colorado, Wisconsin, Indiana and Arizona at
December 31, 2007.

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, includ-
ing branches that are open seven days a week and on most
holidays, extensive full-service supermarket branches, auto-
mated teller machine (“ATM”) networks and telephone and
internet banking. TCF’s philosophy is to generate interest
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 and small business
banking, commercial 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® cards.

Targeted new branch expansion 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 profitability.

TCF’s lending strategy is to originate high credit quality,

primarily secured, loans and leases. TCF’s largest core
lending business is its consumer home equity loan operation,
which offers fixed- and variable-rate loans and lines of credit
secured by residential real estate properties. Commercial
loans are generally made on local properties or to local
customers. The leasing and equipment finance businesses
consist of TCF Equipment Finance, a company that delivers
equipment finance solutions to businesses in select markets,
and Winthrop Resources, a company that primarily leases
technology and data processing equipment. TCF’s leasing

2007 Form 10-K | 17

156976_10K_F_Q6 2/16/08 3:48 PM Page 18

and equipment finance businesses have equipment instal-
lations in all 50 states 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 incurred
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
50.4% of TCF’s total revenue in 2007. 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 monitor-
ing and management policies.

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 deposit
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. 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 signif-

icantly since its inception in 1996. TCF is the 12th largest
issuer of Visa Classic debit cards in the United States, based
on sales volume for the three months ended September 30,

2007 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 2007,
2006 and 2005 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 $2.12 for 2007, compared with $1.90
for 2006 and $2.00 for 2005. Net income was $266.8 million
for 2007, compared with $244.9 million for 2006 and $265.1
million for 2005. Net income for 2007 included a $31.2 mil-
lion pre-tax gain on the sale of 10 out-state Michigan
branches, $6.7 million in pre-tax gains on sales of real
estate, $13.3 million in pre-tax gains on sales of securities,
a $7.7 million pre-tax charge for TCF’s estimated contingent
obligation related to Visa USA litigation indemnification
and $18.4 million of favorable income tax settlements and
adjustments for a combined after-tax impact of 37 cents
per diluted share. Net income for 2006 included $4.2 million
in pre-tax gains on sales of real estate, a $1.6 million net
pre-tax gain on the sale of mortgage servicing rights and a
$6.1 million reduction of income tax expense for a combined
after-tax impact of eight cents per diluted share. Return on
average assets was 1.76% in 2007, compared with 1.74% in
2006 and 2.08% in 2005. Return on average common equity
was 25.82% in 2007, compared with 24.37% in 2006 and
28.03% in 2005. The effective income tax rate for 2007 was
28.4%, compared with 31.4% in 2006 and 30.3% in 2005.

Operating Segment Results BANKING, consisting of
deposits, investment products, commercial banking, small
business banking, consumer lending and treasury services,
reported net income of $232.1 million for 2007, up 11.3% from
$208.4 million in 2006. Banking net interest income for 2007
was $485.5 million, up 1.7% from $477.5 million for 2006.

18 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 19

The provision for credit losses totaled $51.7 million in
2007, up from $18.1 million in 2006. The increase in the pro-
vision for credit losses from 2006 is primarily due to higher
consumer home equity net charge-offs and the resulting
portfolio reserve rate increases and increased reserves for
certain commercial loans. Refer to the “Consolidated
Income Statement Analysis – Provision for Credit Losses”
section for further discussion.

Non-interest income totaled $481.3 million in 2007, up
from $428.4 million in 2006. Fees and service charges were
$278 million for 2007, up 2.9% from $270.2 million in 2006.
In 2006 there were $5.3 million in fees and service charges
related to the Michigan sold branches. Card revenues were
$98.9 million for 2007, up 7.4% from $92.1 million in 2006.
This increase was primarily attributable to an increased
sales volume as a result of increases in transactions per
account and the number of active accounts. During 2007,
TCF sold 10 out-state branches and recognized gains of
$31.2 million and sold five branch buildings and five parcels
of land and recognized gains of $6.7 million. During 2006,
TCF sold two branch buildings and one land parcel and recog-
nized gains of $4.2 million. Also, during 2007 TCF recognized
$13.3 million of gains on sales of $1.2 billion of mortgage-
backed securities. There were no sales of securities in 2006.
See “Consolidated Income Statement Analysis – Non-Interest
Income” for further discussion.

Non-interest expense totaled $594.7 million in 2007, up
1.6% from $585.5 million in 2006. The increase was primarily
due to a $7.7 million charge for TCF’s estimated contingent
liability related to Visa USA litigation indemnification.
See page 38 under Management’s Discussion and Analysis
for details of TCF’s obligations to indemnify Visa for
certain litigation.

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
$34.6 million for 2007, up 3.6% from $33.4 million in 2006.

Net interest income for 2007 was $65.4 million, up 11.4%
from $58.7 million in 2006.

The provision for credit losses for this operating segment

totaled $5.3 million in 2007, up from $2.6 million in 2006.
The increase in the provision for credit losses from 2006 to
2007 was primarily due to increases in reserves for certain
loans and leases, partially offset by a recovery in 2007 of a
previously charged-off lease. In addition, 2006 included a
reduction of reserves in certain marketing segments due to
lower levels of historical charge-offs and one large non-
accrual lease that was settled in the second quarter of 2006
for less than the amount reserved.

Non-interest income totaled $59.2 million in 2007, up
$6.1 million from $53 million in 2006. The increase in leasing
and equipment finance revenues for 2007, compared with
2006, was primarily due to higher operating lease and sales-
type lease revenues.

Non-interest expense totaled $65.4 million in 2007, up
$8.4 million from $56.9 million in 2006 primarily related to an
increase of $4 million in compensation and benefits which
included an increase in commissions resulting from a larger
volume of sales-type leases and other commissioned events,
increased salaries related to headcount expansion and an
increase of $3.2 million in operating lease depreciation.

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 50.4% of TCF’s
total revenue in 2007, 52.3% in 2006 and 52% in 2005. 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.

2007 Form 10-K | 19

156976_10K_F_Q6 2/16/08 3:48 PM Page 20

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, 2007

Year Ended
December 31, 2006

Average
Yields
and
Interest(1) Rates

Average
Balance

Average
Yields
and
Interest(1) Rates

Average
Balance

Change

Average
Yields
and
Rates
Interest(1) (bps)

178,012
2,024,563
154,516

$ 8,237
109,581
13,252

4.63%
5.41
8.58

78,511
1,833,359
210,992

$ 3,504
98,035
15,009

4.46%
5.35
7.11

99,501
191,204
(56,476)

$ 4,733
11,546
(1,757)

17
6
147

326,516
124,992
4,307
455,815

114,140
46,363
160,503

10,853
28,947
39,800
147,507
803,625
33,328
836,953
968,023

30,650
2,994
33,644
49,994
14,976
64,970
17,481
116,095
114,530
230,625
230,625

11,369
175,852
187,221
417,846
417,846

6.97
8.56
9.88
7.37

6.42
7.62
6.73

6.39
7.36
7.07
7.70
7.27
5.80
7.20
6.92

2.91
.36
1.79
4.22
1.17
2.64
2.89
2.35
4.65
3.11
2.39

4.94
4.52
4.54
3.62
3.03

4,683,745
1,460,685
43,589
6,188,019

1,777,813
608,209
2,386,022

169,776
393,442
563,218
1,915,790
11,053,049
574,554
11,627,603
13,984,694
1,161,106
$15,145,800

$ 1,444,125
594,979
199,432
2,238,536

1,054,542
824,791
1,879,333
1,184,756
1,279,577
2,464,333
604,767
4,948,433
2,461,055
7,409,488
9,648,024

230,293
3,890,054
4,120,347
11,529,835
13,768,371
343,978
14,112,349
1,033,451

$15,145,800

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

$14,063,713

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

832,628
(198,859)
6,878
640,647

112,282
(113,662)
(1,380)

35,216
19,752
54,968
255,983
950,218
(121,532)
828,686
1,062,915
19,172
$1,082,087

(68,996)
(14,928)
(33,293)
(117,217)

53,518
(39,525)
13,993
285,689
(96,605)
189,084
(16,077)
187,000
170,053
357,053
239,836

(366,559)
1,137,207
770,648
1,127,701
1,010,484
43,048
1,053,532
28,555

$1,082,087

63,359
(18,584)
590
45,365

9,051
(8,876)
175

2,382
1,328
3,710
25,215
74,465
(7,102)
67,363
81,885

(889)
977
88
12,719
2,179
14,898
2,265
17,251
18,050
35,301
35,301

(18,672)
52,609
33,937
69,238
69,238

14
(9)
(25)
(3)

11
(3)
1

9
(3)
(3)
33
5
(1)
7
6

(24)
13
(1)
7
24
44
44
27
44
34
31

(9)
4
(4)
27
30

(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)

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

Total liabilities

Stockholders’ equity

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

$550,177

$ 12,647

$537,530

3.94%

4.16%

(22)

income of $1,933,000 and $1,209,000 was recognized during the years ended December 31, 2007 and 2006, 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

20 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 21

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

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

$14,063,713

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

$12,730,874

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

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

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

$1,332,839

84
16
202

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)

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

Total liabilities

Stockholders’ equity

Total liabilities and

stockholders’ equity

$517,690

$537,530

$ 19,840

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.

2007 Form 10-K | 21

156976_10K_F_Q6 2/16/08 3:48 PM Page 22

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

(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

Year Ended
December 31, 2007
Versus Same Period in 2006
Increase (Decrease) Due to

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

Volume (1)

Rate (1)

Total

Volume (1)

Rate (1)

Total

$ 4,599
10,336
(4,485)

134
1,210
2,728

$ 4,733
11,546
(1,757)

(670)
14,030
(186)

724
2,526
4,274

54
16,556
4,088

57,947
(17,033)
682

7,183
(8,665)

2,249
1,454
19,518
(7,050)
59,581
73,505

1,633
1,034
12,044
4,555
(403)
7,472

(18,107)
51,397
35,024
28,884
42,768

5,412
(1,551)
(92)

1,868
(211)

133
(126)
5,697
(52)
7,782
8,380

(2,522)
(57)
675
(1,528)
2,668
10,578

(565)
1,212
(1,087)
40,354
(30,121)

63,359
(18,584)
590

9,051
(8,876)

2,382
1,328
25,215
(7,102)
67,363
81,885

(889)
977
12,719
3,027
2,265
18,050

(18,672)
52,609
33,937
69,238
12,647

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

(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.

Net interest income was $550.2 million for 2007, up 2.4%

from $537.5 million in 2006. The increase in net interest
income in 2007 primarily reflects the growth in average
interest-earning assets, up $1.1 billion over 2006, partially
offset by a 22 basis point reduction in net interest margin.
The decrease in the net interest margin, from 4.16% in 2006
to 3.94% in 2007, is primarily due to partially funding the
growth in interest earning assets with borrowings and higher-
cost deposits and continued customer preference for lower-
yielding fixed-rate loans.

Net interest income was $537.5 million in 2006, up from
$517.7 million in 2005. The increase in net interest income
in 2006 primarily reflected the growth in average interest

earning assets, up $1.3 billion over 2005, partially offset
by the 30 basis point reduction in net interest margin. The
decrease in the net interest margin, from 4.46% in 2005
to 4.16% in 2006 is primarily due to customer preference 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 competi-
tion on loans and deposits has contributed to the compres-
sion of the net interest margin in 2006 and 2005.

Achieving net interest income growth over time is primarily
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 currently

22 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 23

liability sensitive as measured by its interest rate gap
measure (the difference between interest-earning assets
and interest-bearing liabilities maturing, repricing, or
prepaying during the next twelve months). See “Consolidated
Financial Condition Analysis – Deposits” and “Quantitative
and Qualitative Disclosures about Market Risk” for further
discussion on TCF’s interest-rate risk position.

Provision for Credit Losses TCF provided $57 million
for credit losses in 2007, compared with $20.7 million in 2006
and $8.6 million in 2005. The increase in provision from 2006
to 2007 was primarily due to higher consumer home equity
net charge-offs, the resulting portfolio reserve rate increases
and higher reserves for certain commercial loans, primarily
in Michigan, and equipment finance loans and leases.

Consumer home equity charge-off rates have steadily
increased throughout 2007. As a result, TCF has increased
consumer home equity reserve levels. Higher home equity
charge-offs are primarily due to the slowdown in the residen-
tial real estate market, primarily in Minnesota and Michigan.
The increase in provision from 2005 to 2006 was primarily
due to a $3.3 million commercial business loan recovery in
2005, higher consumer home equity net charge-offs and
the resulting portfolio reserve rate increases.

Net loan and lease charge-offs were $34.6 million, or
.30% of average loans and leases in 2007, compared with

$18 million, or .17% of average loans and leases in 2006
and $28.2 million, or .29% of average loans and leases in
2005. Excluding the charge-off of an $18.8 million invest-
ment 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 49.6% of total
revenues in 2007, 47.7% in 2006 and 48% in 2005, 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 $541.5 million for 2007, up from $489.5 million
in 2006 and up from $478.2 million in 2005.

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

Year Ended December 31,

2007
$278,046
98,880
35,620
10,318
422,864
59,151
8,270
490,285

2006
$270,166
92,084
37,760
10,695
410,705
53,004
21,567
485,276

2005
$262,636
79,803
40,730
10,665
393,834
47,387
12,744
453,965

2004
$275,120
63,463
42,935
12,558
394,076
50,323
22,628
467,027

2003
$249,339
52,991
43,623
13,901
359,854
51,088
18,957
429,899

13,278

–

10,671

22,600

32,832

37,894
–
$541,457

4,188
–
$489,464

13,606
–
$478,242

259
–
$489,886

725
(44,345)
$419,111

Compound Annual
Growth Rate

1-Year
2007/2006

5-Year
2007/2002

2.9%
7.4
(5.7)
(3.5)
3.0
11.6
(61.7)
1.0

N.M.

N.M.
–
10.6

4.0%
15.9
(4.7)
(8.2)
4.7
2.8
(14.6)
3.8

2.9

80.8
–
5.2

44.91%
3.24

47.25%
3.45

45.58%
3.57

47.57%
3.93

47.75%
3.69

(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

Gains on sales of branches and

real estate

Losses on termination of debt

Total non-interest income

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

N.M. Not Meaningful.

2007 Form 10-K | 23

156976_10K_F_Q6 2/16/08 3:48 PM Page 24

Fees and Service Charges Fees and service charges
increased $7.9 million, or 2.9%, to $278 million for 2007,
compared with $270.2 million for 2006 primarily due to higher
activity of deposit service fees. Fees and service charges
related to the Michigan branches that were sold in the first
quarter of 2007, were $5.3 million in 2006 and $945 thousand
in 2007 respectively. During 2006, fees and service charges
increased $7.5 million, or 2.9% to $270.2 million, compared
with $262.6 million for 2005 primarily due to growth in
deposit accounts.

Card Revenue During 2007, card revenue, primarily inter-
change fees, totaled $98.9 million, up from $92.1 million in
2006 and $79.8 million in 2005. The increases in card revenue
in 2007 and 2006 were primarily attributable to increased

sales volume as a result of increases in the number of active
accounts and customer transaction volumes. The growth
in sales volume slowed in 2007 as the average number of
checking accounts with a TCF card declined as the portfolio
matured. The continued success of TCF’s debit card program
is highly dependent on the success and viability of Visa
and the continued use by customers and acceptance by
merchants of its debit and credit cards.

ATM Revenue ATM revenue totaled $35.6 million for 2007,
down from $37.8 million in 2006 and $40.7 million in 2005.
The declines in ATM revenue were primarily attributable to
continued declines in fees charged to TCF customers for use of
non-TCF ATM machines due to growth in TCF’s fee free check-
ing products and changes in customer ATM usage behavior.

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

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

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

Percentage off-line
Average interchange rate

At or For the Year Ended December 31,

Percentage Increase (Decrease)

2007
1,455,540
811,961
19.4

2006
1,463,456
804,194
18.2

2005
1,406,728
763,157
16.9

$6,146,036
802,735
$6,948,771

$5,711,751
752,770
$6,464,521

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

88.45%
1.35%

88.36%
1.36%

88.68%
1.34%

2007/2006

2006/2005

(.5)%
1.0
6.6

7.6
6.6
7.5
.1
(.7)

4.0%
5.4
7.7

13.5
17.2
14.0
(.4)
1.5

Investments and Insurance Revenue Investments
and insurance revenue, consisting principally of commissions
on sales of annuities and mutual funds, decreased $377
thousand in 2007 from 2006. The average commission
percentage earned on sales of annuities and mutual funds
declined in 2007, compared with 2006 and 2005, as a result
of a higher sales of mutual funds, that generally carry a lower
commission rate than annuities and a continued market
trend of lower commission rates paid on sales of annuities.
Annuity and mutual fund sales volumes totaled $222.6
million for the year ended December 31, 2007, compared with
$203.7 million during 2006. The increased sales volumes dur-
ing 2007 was the result of increased sales of mutual funds
resulting from additional marketing focus and market condi-
tions. Sales of fixed annuity products slightly declined during
2007 as a result of lower interest rates offered by carriers.

Sales of insurance and investment products may fluctu-
ate 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
advantage 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 2007 increased $6.1
million, or 11.6%, from 2006. The increase in leasing and
equipment finance revenues for 2007 was primarily driven
by a $2.9 million increase in operating lease revenues and
an increase of $1.8 million in sales-type lease revenues. The
increase in operating lease revenues was primarily driven by
a $6.6 million increase in average operating lease balances.
Leasing and equipment finance revenues increased $5.6 mil-
lion, or 11.9%, in 2006 compared with 2005, primarily due

24 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 25

to an increase in operating lease revenues of $8.5 million,
partially offset by a $3.7 million decrease in sales-type
lease revenues.

Sales-type lease revenues generally occur at or near the
end of the lease term as customers extend the lease or pur-
chase 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 education loans and

other miscellaneous income and mortgage banking revenues
in 2006 and 2005. Total other non-interest income in 2007
decreased $13.3 million from 2006 compared with an increase
of $8.8 million in 2006 over 2005. The decrease from 2006 to
2007, and the increase from 2005 to 2006, was due to gains
on the sales of education loans. In 2006, TCF accelerated
the sales of education loans in response to certain legisla-
tive changes in student loan programs and recognized gains
of $7.2 million on such sales.

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

(Dollars in thousands)
Gains on sales of education loans
Mortgage banking
Other

Total other earnings

N.M. Not Meaningful.

Year Ended December 31,

2007
$2,011
–
6,259
$8,270

2006
$ 7,224
4,734
9,609
$21,567

2005
$ 2,078
5,578
5,088
$12,744

2004
$ 7,789
12,960
1,879
$22,628

2003
$ 3,092
12,719
3,146
$18,957

Compound Annual
Growth Rate

1-Year
2007/2006

5-Year
2007/2002

(72.2)%
N.M.
(34.9)
(61.7)

(5.7)%
N.M.
(6.0)
(14.6)

Gains on Sales of Securities Available for Sale
Gains on securities available for sale of $13.3 million were
recognized on sales of $1.2 billion in mortgage-backed secu-
rities in 2007. There were no sales of securities available for
sale in 2006. In 2005, gains on securities available for sale
of $10.7 million were recognized on the sales of $1 billion in
mortgage-backed securities.

Gains on Sales of Branches and Real Estate Gains
on sales of branches and real estate were $37.9 million for
2007, up from $4.2 million in 2006 and $13.6 million in 2005.
During the first quarter of 2007, TCF sold the deposits and
facilities of 10 out-state branches in Michigan and recog-
nized a $31.2 million gain.

Non-Interest Expense Non-interest expense increased $2 million, or .3%, in 2007, and $35.2 million, or 5.9%, in 2006,
excluding the Visa USA indemnification and operating lease depreciation. The following table presents the components of
non-interest expense.

Year Ended December 31,

2007
$346,468
120,824
21,679
147,869
636,840
17,588
7,696
$662,124

2006
$341,857
114,618
26,926
151,449
634,850
14,347
–
$649,197

2005
$326,526
103,900
25,691
143,484
599,601
7,335
–
$606,936

2004
$322,824
95,617
26,353
132,037
576,831
1,843
–
$578,674

2003
$302,804
88,423
25,536
133,342
550,105
3,320
–
$553,425

Compound Annual
Growth Rate

1-Year
2007/2006

5-Year
2007/2002

1.3%
5.4
(19.5)
(2.4)
.3
22.6
N.M.
2.0

3.3%
7.8
(.2)
2.5
3.8
40.3
N.M.
4.4

(Dollars in thousands)
Compensation and employee benefits
Occupancy and equipment
Advertising and promotions
Other

Subtotal

Operating lease depreciation
Visa indemnification

Total non-interest expense

N.M. Not Meaningful.

2007 Form 10-K | 25

156976_10K_F_Q6 2/16/08 3:48 PM Page 26

Compensation and Employee Benefits Compensation
and employee benefits, representing 52.3%, 52.7% and
53.8% of total non-interest expense in 2007, 2006 and
2005, respectively, increased $4.6 million, or 1.4%, in 2007,
and $15.3 million, or 4.7%, in 2006. In 2007, compensation
and employee benefits increased primarily due to costs
associated with branch expansion partially offset by
decreases resulting from branches sold, closed branches
and other efficiency initiatives. The increase in compensa-
tion and employee benefits in 2006 was primarily due to
costs associated with branch expansion.

Occupancy and Equipment Occupancy and equipment
expenses increased $6.2 million in 2007 and $10.7 million in
2006. These increases were primarily due to costs associated
with branch expansion, remodeling and relocation.

Advertising and Promotions Advertising and promo-
tions expense decreased $5.2 million in 2007 following an
increase of $1.2 million in 2006. The decrease in 2007 was
primarily due to $4.9 million in spending reductions on
media and promotion. The increase in 2006 was primarily
due to a $1.4 million increase in promotional expenses
for new customers, partially offset by an $827 thousand
decrease in advertising.

Operating Lease Depreciation Operating lease
depreciation totaled $17.6 million for 2007, up from $14.3
million and $7.3 million for 2006 and 2005, respectively.
The increases in depreciation were primarily driven by an
increase in average operating lease balances.

Visa Indemnification Expense TCF is a member of
Visa USA for issuance and processing of its card transactions.
As a member of Visa, TCF has a contingent obligation to
indemnify Visa for losses in connection with certain covered
litigation matters. TCF recognized a $7.7 million pre-tax
charge in the fourth quarter of 2007 for this contingent
obligation. See page 38 under Management’s Discussion
and Analysis for details of TCF’s obligations to indemnify
Visa for certain litigation.

Other Non-Interest Expense Other non-interest
expense totaled $147.9 million in 2007, down $3.6 million
from 2006, primarily due to expense control initiatives par-
tially offset by a $3 million increase in loan and lease related
costs mainly driven by higher private mortgage insurance
expense, a $1.5 million increase in net real estate expenses

due to higher losses on foreclosed real estate and a $1.1
million increase in card processing and issuance costs
due to increased transactions. In 2006, other non-interest
expense increased $8 million, or 5.6%, primarily driven by a
$2.3 million increase in card and internet processing expenses
related to transaction increases and a $1.4 million increase
in foreclosed real estate expense primarily due to net losses
on sales in 2006 versus net recoveries in 2005.

Income Taxes Income tax expense represented 28.38% of
income before income tax expense during 2007, compared
with 31.41% and 30.30% in 2006 and 2005, respectively. The
lower effective income tax rate in 2007 compared with 2006
and 2005 was primarily due to $18.4 million of reductions
in income tax expense comprised of a favorable settlement
with the Internal Revenue Service of an isolated tax deduc-
tion from a prior year, the effects of state tax law changes,
and other favorable developments involving uncertain tax
positions. This compares with $6.1 million of reductions in
income tax expense in 2006 for favorable developments
involving uncertain tax positions. The increase in the effective
income tax rate in 2006 compared with 2005 was primarily
due to $6.1 million of reductions in income tax expense for
favorable developments involving uncertain tax positions in
2006 compared with $14 million of reductions for favorable
developments in 2005.

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
would increase significantly. TCF’s FOC operates under laws
in certain states (including Minnesota and Illinois) that
have allowed FOCs. The taxation of REITs and FOCs is and
has been the subject of federal and state audits, litigation
with state taxing authorities and tax policy debates by var-
ious state legislatures. Illinois passed legislation in 2007
that will reduce or eliminate TCF’s REIT and FOC tax benefits
in the future. Certain states have proposed legislation that,
if enacted, would eliminate tax deductions that TCF is
entitled to under current laws and thus would significantly

26 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 27

increase state income tax expense. Thus, TCF’s annual
effective income tax rate will likely increase in future years.
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 evaluation of uncertain tax
positions, differences between the tax and financial report-
ing bases of assets and liabilities (temporary differences),
estimates of amounts due or owed such as the timing of
reversal of temporary differences and current financial
accounting standards. Additionally, there can be no
assurance that estimates and interpretations used in deter-
mining income tax liabilities may not be challenged by federal
and state taxing authorities. Actual results could differ sig-
nificantly from the estimates and tax law interpretations 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 liabilities must
be adjusted in the period of change through a charge or credit
to the Consolidated Statements of Income. See Note 12 of
Notes to Consolidated Financial Statements for information

regarding TCF’s adoption of Financial Accounting Standards
Board Interpretation No. 48, Accounting for Uncertainty in
Income Taxes, an interpretation of FASB Statement 109.

Consolidated Financial Condition Analysis
Securities Available for Sale Securities available for
sale increased $147.6 million to $2.0 billion at December 31,
2007. This increase reflects purchases of $1.6 billion and
sales of $1.2 billion of mortgage-backed securities, and
normal payment and prepayment activity. At December 31,
2007, the increase in mortgage-backed securities partially
offsets the decline in residential real estate loans. 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 $16.4
million at December 31, 2007, compared with net unrealized
pre-tax losses of $33.3 million at December 31, 2006. TCF
may, from time to time, sell mortgage-backed securities
and utilize the proceeds to reduce borrowings, fund growth
in loans and leases or for other corporate purposes.

TCF’s securities portfolio does not contain commercial

paper, asset-backed commercial paper or asset-backed
securities secured by credit cards or car loans. TCF also
does not participate in structured investment vehicles.

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

2007

2006

2005

2004

2003

Compound Annual
Growth Rate

1-Year
2007/2006

5-Year
2007/2002

(Dollars in thousands)

At December 31,

Portfolio Distribution:
Consumer home equity and other:

Home equity:

Line of credit (1)
Closed-end loans

Total consumer home equity

Other

Total consumer home equity

and other

Commercial real estate
Commercial business

Total commercial
Leasing and equipment finance (2)
Residential real estate

Total loans and leases

$ 1,429,633 $ 1,232,315 $ 1,389,741
3,758,947
5,148,688
57,587

4,650,353
5,882,668
62,409

5,093,441
6,523,074
67,557

6,590,631
2,557,330
558,325
3,115,655
2,104,343
527,607

5,206,275
2,297,500
435,203
2,732,703
1,503,794
770,441
$12,338,236 $11,333,680 $10,213,213

5,945,077
2,390,653
551,995
2,942,648
1,818,165
627,790

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

$1,472,165
2,909,592
4,381,757
56,183

$1,093,945
2,493,715
3,587,660
62,538

4,437,940
2,154,396
436,696
2,591,092
1,375,372
1,014,166
$9,418,570

3,650,198
1,916,701
429,401
2,346,102
1,160,397
1,212,643
$8,369,340

16.0%
9.5
10.9
8.2

10.9
7.0
1.1
5.9
15.7
(16.0)
8.9

9.1%
20.2
17.2
(.1)

16.9
6.9
4.8
6.5
15.2
(21.8)
8.7

2007 Form 10-K | 27

156976_10K_F_Q6 2/16/08 3:48 PM Page 28

(In thousands)

At December 31, 2007

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

Total

Consumer
Home Equity

and Other(1)
$2,496,369
2,040,795
1,113,823
510,246
354,001
2,496
7,502
498
13,957
3,742
3,295
22,406
21,501
$6,590,631

Commercial
Real Estate
and
Commercial
Business
$ 779,130
715,096
896,157
431,462
68,884
19,307
52,171
2,482
14,625
5,800
8,272
23,767
98,502
$3,115,655

Leasing and
Equipment

Finance(2)
74,024
73,303
89,152
39,497
34,909
270,003
135,750
132,504
87,298
94,449
83,833
35,331
954,290
$2,104,343

Residential
Real Estate
$290,186
71,118
138,249
16,040
296
–
300
642
59
63
2,292
927
7,435
$527,607

Total
$ 3,639,709
2,900,312
2,237,381
997,245
458,090
291,806
195,723
136,126
115,939
104,054
97,692
82,431
1,081,728
$12,338,236

Loans and leases outstanding at December 31, 2007 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

Amounts due after 1 year on:

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

Total after 1 year

At December 31, 2007(3)

Consumer
Home Equity

and Other(1)

Commercial
Real Estate

Commercial
Business

Leasing and
Equipment

Finance(2)

Residential
Real Estate

Total Loans
and Leases

$ 389,610

$ 458,063

$275,633

$ 748,579

$ 32,051

$ 1,903,936

340,529
348,110
728,222
1,463,032
1,072,339
2,248,789
6,201,021
$6,590,631

$4,780,565
1,420,456
$6,201,021

288,455
269,765
482,609
850,595
182,093
25,750
2,099,267
$2,557,330

$ 744,130
1,355,137
$2,099,267

123,515
73,517
41,388
30,836
13,436
–
282,692
$558,325

$109,803
172,889
$282,692

504,796
378,723
398,582
73,663
–
–
1,355,764
$2,104,343

$1,355,764
–
$1,355,764

24,953
25,484
52,287
110,025
95,286
187,521
495,556
$527,607

1,282,248
1,095,599
1,703,088
2,528,151
1,363,154
2,462,060
10,434,300
$12,338,236

$421,573
73,983
$495,556

$ 7,411,835
3,022,465
$10,434,300

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

(2) Excludes operating leases included in other assets.

(3) 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.

28 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 29

Consumer Lending TCF’s consumer home equity loan
portfolio represented 53% and 52% of its total loan and lease
portfolio as of December 31, 2007 and 2006, respectively and
has increased by 10.9% in 2007 and 14.3% in 2006.

TCF’s consumer home equity portfolio is secured by
mortgages filed on residential real estate. At December 31,
2007, 64% of loan balances were secured by first mortgages.
The average loan size secured by a first mortgage was $114
thousand and the average balance of loans secured by a
junior lien position was $35 thousand at December 31, 2007.
At December 31, 2007, 78% of TCF’s consumer home equity
loans consisted of closed-end loans, compared with 79%
at December 31, 2006. TCF’s closed-end home equity loans
require payments of principal and interest over a fixed
term. The average home value based on most recent values
known to TCF securing the loans and lines of credit in this
portfolio was $248 thousand as of December 31, 2007. TCF’s
home equity lines of credit require regular payments of
interest and do not require regular payments of principal.
The average FICO (Fair Isaac Company) credit score at loan
origination for the home equity portfolio was 721 as of
December 31, 2007 and December 31, 2006.

TCF’s consumer home equity underwriting standards
produce adequately secured loans to customers with good
credit scores. Loans with loan-to-value (LTV) ratios in excess
of 90% are only made to very creditworthy customers based
on credit scoring models and other credit underwriting cri-
teria. TCF does not have any subprime lending programs
and does not originate 2/28 adjustable-rate mortgages
(ARM) or Option ARM loans. TCF also does not originate
home equity loans with multiple payment options or loans

with “teaser” interest rates. Although TCF does not have
any programs that target subprime borrowers, in the normal
course of lending to customers loans have been originated
with FICO scores below 620 at lower LTV ratios. Approximately
6% of the consumer home equity portfolio, as of December
31, 2007, was originated at FICO scores below 620.

At December 31, 2007, 24% of the home equity portfolio

carried a variable interest rate tied to the prime rate,
compared with 25% at December 31, 2006. Outstanding
balances on home equity lines of credit were 52% of total
lines of credit at December 31, 2007, compared with 50%
at December 31, 2006.

Commercial Lending Commercial real estate loans
increased $166.7 million from December 31, 2006 to $2.6
billion at December 31, 2007. Variable – and adjustable –
rate loans represented 67% of commercial real estate loans
outstanding at December 31, 2007. Commercial business
loans increased $6.3 million in 2007 to $558.3 million at
December 31, 2007. TCF continues to expand its commercial
business and commercial real estate lending activity gen-
erally to borrowers 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 properties or other business assets
at December 31, 2007. At December 31, 2007, approximately
93% of TCF’s commercial real estate loans outstanding
were secured by properties located in its primary markets.
At December 31, 2007, the construction and development
portfolio had $1.4 million in loans over 30-days delinquent
compared with no such loans at December 31, 2006.

2007 Form 10-K | 29

156976_10K_F_Q6 2/16/08 3:48 PM Page 30

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

At December 31,

2007

Construction
and
Development
$ 56,585
8,773
27,110
19,115
27,962
58,952
–
78,633
$277,130

Permanent
$ 634,331
464,283
350,807
343,050
125,654
41,750
30,035
290,290
$2,280,200

Total
$ 690,916
473,056
377,917
362,165
153,616
100,702
30,035
368,923
$2,557,330

2006

Construction
and
Development
$ 37,568
957
10,662
10,375
2,266
69,249
–
57,580
$188,657

Permanent
$ 537,123
454,269
395,076
297,348
105,737
40,697
54,063
317,683
$2,201,996

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

Total

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

Total

Balance
$ 690,916
473,056
377,917
362,165
153,616
100,702
30,035
368,923
$2,557,330

At December 31,

2007

Number
of Loans
490
551
248
283
51
87
11
242
1,963

Over 30-Day
Delinquency
Rate as a
Percentage of
Balance

.67%
.08
.65
.13
–
1.81
–
.50
.45

Balance
$574,691
455,226
405,738
307,723
108,003
109,946
54,063
375,263
$2,390,653

2006

Number
of Loans
437
591
270
274
39
97
16
253
1,977

Total
$ 574,691
455,226
405,738
307,723
108,003
109,946
54,063
375,263
$2,390,653

Over 30-Day
Delinquency
Rate as a
Percentage of
Balance

.03%
.02
–
–
–
.16
–
4.69
.76

Leasing and Equipment Finance The following tables summarize TCF’s leasing and equipment finance portfolio by mar-
keting segment and by equipment type, excluding operating leases.

(Dollars in thousands)

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

Total

At December 31,

2007

Percent
of Total

Over 30-Day
Delinquency as
a Percentage
of Balance

61.3%
20.3
13.1
5.1
.2
100.0%

.77%
1.01
.49
.04
3.28
.75

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

2006

Percent
of Total

Over 30-Day
Delinquency as
a Percentage
of Balance

59.6%
20.4
13.9
5.2
.9
100.0%

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

Balance
$1,290,923
426,436
275,799
107,195
3,990
$2,104,343

(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 lease financing of technology and data processing equipment.
(4) Wholesale includes the discounting of lease receivables originated by third party lessors.

30 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 31

(Dollars in thousands)

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

Total

The leasing and equipment finance portfolio increased

$286.2 million from December 31, 2006 to $2.1 billion at
December 31, 2007, consisting of $604.2 million of loans and
$1.5 billion of leases. Total loan and lease originations and
purchases for TCF Equipment Finance and Winthrop Resources
were $1,128 million for 2007, an increase of 5% from $1,070
million in 2006. The backlog of approved transactions
increased to $292.5 million at December 31, 2007, from
$249.7 million at December 31, 2006. TCF’s leasing activity
is subject to risk of cyclical downturns and other adverse
economic developments. In an adverse economic environ-
ment, 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 serv-
ice. Declines in value of equipment under lease increase
the potential for impairment 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, 2007 and 2006, $48.4 million, and
$53.7 million, respectively, of TCF’s lease portfolio, were
discounted on a non-recourse basis with third-party finan-
cial institutions and, consequently, TCF retains no credit risk
on such amounts. The leasing and equipment finance port-
folio 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,

2007

Percent
of Total

20.1%
18.3
17.4
13.3
11.4
4.0
3.1
2.7
2.5
7.2
100.0%

Balance
$ 345,099
310,485
326,922
222,198
243,069
79,474
65,545
55,241
50,565
119,567
$1,818,165

2006

Percent
of Total

19.0%
17.1
18.0
12.2
13.4
4.4
3.6
3.0
2.8
6.5
100.0%

Balance
$ 423,893
384,689
365,650
279,939
239,921
84,990
64,796
57,569
53,096
149,800
$2,104,343

are reviewed on an ongoing basis. Any downward revisions
in estimated fair value are recorded in the periods in which
they become known. At December 31, 2007, lease residuals
totaled $41.7 million, compared with $34.7 million at
December 31, 2006.

Residential Real Estate Residential real estate loans
were $527.6 million at December 31, 2007, down $100.2 mil-
lion from December 31, 2006. The decline in residential real
estate loans during 2007 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 investment categories. At December 31, 2007,
TCF’s residential real estate loan portfolio was $449 million in
fixed-rate loans and $78.6 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-performing
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.

2007 Form 10-K | 31

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The Company considers the allowance for loan and lease
losses of $80.9 million appropriate to cover losses incurred
in the loan and lease portfolios as of December 31, 2007.
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 requirements, 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 current adequacy of the allowance for loan and
lease losses by increasing credit risk and the risk of poten-
tial 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 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
carefully reviewed and related to the nature of the underly-
ing 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.

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
Total commercial

Leasing and equipment finance
Residential real estate
Unallocated

Total allowance balance

N.A. Not Applicable.

At December 31,
2005

2006

2004

2007

2003
$30,951 $12,615 $10,017 $ 9,213 $ 8,177
1,900
2,053
10,077
12,070
25,142
21,222
11,797
6,602
36,939
27,824
13,515
15,313
942
616
10,987
–
$80,942 $58,543 $55,823 $75,393 $72,460

2,059
33,010
25,891
7,077
32,968
14,319
645
–

1,694
10,907
20,742
7,696
28,438
24,566
796
10,686

2,211
14,826
22,662
7,503
30,165
12,990
562
–

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

2007

2006

2005

2004

2003

.47%
3.05
.50
1.01
1.27
1.06
.68
.12
N.A.
.66

.21%
3.54
.25
.95
1.36
1.03
.71
.09
N.A.
.52

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

.21%
3.02
.25
.96
1.76
1.10
1.79
.08
N.A.
.80

.23%
3.04
.28
1.31
2.75
1.57
1.16
.08
N.A.
.87

The allocated allowance balances for TCF’s residential,
consumer and leasing and equipment finance portfolios,
at December 31, 2007, reflect the Company’s credit quality
and related low level of historical net charge-offs for these
portfolios. The increase in the consumer home equity
allowance from December 31, 2006, to December 31, 2007,

is primarily due to increased actual and estimated home
equity loan charge-offs due to the slowdown in the housing
markets that occurred primarily in Minnesota and Michigan.
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.

32 | TCF Financial Corporation and Subsidiaries

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

(Dollars in thousands)
Balance at beginning of year
Charge-offs:

Consumer home equity
First mortgage lien
Junior lien

Total 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
First mortgage lien
Junior lien

Total 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

2007
$ 58,543

Year Ended December 31,
2005
$ 75,393

2004
$ 72,460

2006
$ 55,823

2003
$ 73,016

(9,589)
(11,977)
(21,566)
(19,455)
(41,021)
(2,409)
(1,264)
(7,507)
(220)
(52,421)

253
948
1,201
13,019
14,220
–
16
3,585
7
17,828
(34,593)
56,992
–
$ 80,942

(3,142)
(4,479)
(7,621)
(18,423)
(26,044)
(228)
(555)
(6,117)
(277)
(33,221)

108
167
275
13,621
13,896
39
86
1,225
6
15,252
(17,969)
20,689
–
$ 58,543

(2,363)
(2,841)
(5,204)
(18,675)
(23,879)
(74)
(454)
(23,387)
(110)
(47,904)

135
177
312
14,705
15,017
82
2,627
2,003
19
19,748
(28,156)
8,586
–
$ 55,823

(2,051)
(1,919)
(3,970)
(21,199)
(25,169)
(602)
(235)
(8,508)
(81)
(34,595)

42
266
308
13,623
13,931
126
82
2,963
8
17,110
(17,485)
18,627
1,791
$ 75,393

(2,127)
(1,719)
(3,846)
(17,103)
(20,949)
(1,381)
(920)
(8,620)
(86)
(31,956)

138
253
391
10,686
11,077
45
138
1,083
9
12,352
(19,604)
19,048
–
$ 72,460

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

(Dollars in thousands)
Consumer home equity
First mortgage lien
Junior lien

Total home equity

Consumer other

Total consumer
Commercial real estate
Commercial business
Total commercial

Leasing and equipment finance
Residential real estate

Total

N.M. Not Meaningful.

Year Ended December 31,

2007

2006

Net
Charge-offs
(Recoveries)

% of
Average
Loans and
Leases

Net
Charge-offs
(Recoveries)

% of
Average
Loans and
Leases

$ 9,336
11,029
20,365
6,436
26,801
2,409
1,248
3,657
3,922
213
$34,593

.24%
.50
.33
N.M.
.43
.10
.22
.12
.20
.04
.30

$ 3,032
4,314
7,346
4,802
12,148
189
469
658
4,892
271
$17,969

.09%
.22
.13
N.M.
.22
.01
.09
.02
.29
.04
.17

2007 Form 10-K | 33

156976_10K_F_Q6 2/16/08 3:48 PM Page 34

Non-Performing Assets Non-performing assets consist
of non-accrual loans and leases and other real estate owned.
The increase in non-accrual loans and leases from 2006 to
2007 was primarily due to an increase in the number of con-
sumer home equity non-accrual loans, partially offset by
a $2.3 million commercial real estate loan that was paid
off in the second quarter of 2007. The increase in other real
estate owned was primarily due to a $13.8 million Minnesota
commercial real estate loan and an increase in the number
of residential real estate properties.

Approximately 55% of non-performing assets at December
31, 2007 and 60% of non-performing assets at December 31,

2006 consisted of, or were secured by, residential real estate.
The consumer home equity portfolio is secured by a total of
84,400 properties of which 240, or .28%, were in other real
estate owned as of December 31, 2007. This compares with
180 properties, or .22% of total properties, as of December
31, 2006. 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 payments past due for loans secured by residen-
tial 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
First mortgage lien
Junior lien

Total home equity

Consumer other

Total consumer
Commercial real estate
Commercial business
Total commercial

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

2007

2006

At December 31,
2005

2004

2003

$ 20,776
5,391
26,167
6
26,173
19,999
2,658
22,657
8,050
2,974
59,854

28,752
17,013
45,765
$105,619

$11,202
5,291
16,493
27
16,520
12,849
3,421
16,270
7,596
2,799
43,185

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

$12,510
5,872
18,382
28
18,410
188
2,207
2,395
6,434
2,409
29,648

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

$ 9,162
2,914
12,076
111
12,187
1,093
4,533
5,626
25,678
3,387
46,878

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

$ 9,148
2,818
11,966
86
12,052
2,490
2,931
5,421
13,940
3,993
35,406

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

.86%
.66

.58%
.45

.47%
.35

.69%
.52

.83%
.61

Included in non-performing assets are loans and leases

that are considered impaired. Impaired loans and leases
totaled $24.8 million and $17.5 million at December 31,
2007, and December 31, 2006, respectively. The related
allowance for credit losses on impaired loans and leases was
$2.7 million at December 31, 2007, compared with $2.5 million

at December 31, 2006. All of the impaired loans and leases
were on non-accrual status. There were no impaired loans
and leases at December 31, 2007, and December 31, 2006,
which did not have a related allowance for loan and leases
losses. The average balance of impaired loans and leases was
$21.5 million for 2007 compared with $8.2 million for 2006.

34 | TCF Financial Corporation and Subsidiaries

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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,

2007
Percentage of
Loans and
Leases

.38%
.17
.12
.67%

Principal
Balances

$46,748
20,445
15,384
$82,577

2006
Percentage of
Loans and
Leases

.30%
.22
.11
.63%

Principal
Balances

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

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
First mortgage lien
Junior lien

Total home equity

Consumer other

Total consumer
Commercial real estate
Commercial business
Total commercial

Leasing and equipment finance
Residential real estate

Total

At December 31,

2007
Percentage of
Portfolio

Principal
Balances

2006
Percentage of
Portfolio

$31,784
12,289
44,073
377
44,450
11,382
1,071
12,453
15,691
9,983
$82,577

.76%
.53
.68
.56
.68
.45
.19
.40
.75
1.90
.67

$22,527
11,406
33,933
380
34,313
18,072
762
18,834
8,499
10,047
$71,693

.60%
.54
.58
.61
.58
.76
.14
.64
.47
1.61
.63

Potential Problem Loans and Leases In addition to
non-performing assets, there were $55.2 million of loans
and leases at December 31, 2007, for which management
has concerns regarding the ability of the borrowers to meet
existing repayment terms, compared with $66.1 million at
December 31, 2006. These loans and leases are primarily
classified as substandard for regulatory purposes and reflect
the distinct possibility, but not the probability, that the
Company will not be able to collect all amounts due accord-
ing 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. There
were no material leasing and equipment finance potential
problem loans at December 31, 2007, and 2006, respectively,
that were funded on a non-recourse basis.

2007 Form 10-K | 35

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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 liq-
uidity arises from the ability to convert assets to cash as well
as from the maturity of assets. Liability liquidity results from
the ability of TCF to maintain a diverse set 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 addition
to deposits, TCF derives funds from loan and lease repay-
ments 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 fund bal-
ance sheet growth. Historically, TCF has borrowed primarily
from the FHLB, from institutional sources under repurchase
agreements and from other sources. At December 31, 2007,
TCF had over $2.5 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
National Bank, issuance of debt and equity securities and
borrowings under a $80 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.

At December 31,

2007
Percentage of
Portfolio

1.23%
1.56
.71
.47

Principal
Balances
$31,511
8,695
15,015
$55,221

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

2006
Percentage of
Portfolio

1.81%
2.11
.62
.58

Deposits Deposits totaled $9.6 billion at December 31,
2007, down $192.7 million from December 31, 2006 primarily
due to the sale of $241.4 million in deposits held by the
out-state Michigan branches sold in the first quarter of 2007
and intensified competition due to liquidity pressures on
market participants for deposits. 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 $36 million from
December 31, 2006, and comprised 76% of total deposits at
December 31, 2007, compared with 75% of total deposits at
December 31, 2006. The average balance of these deposits
for 2007 was $7.2 billion, an increase of $70 million over
the $7.1 billion average balance for 2006. Certificates of
deposit totaled $2.3 billion at December 31, 2007, down
$229.1 million from December 31, 2006. TCF had no brokered
deposits at December 31, 2007 or 2006. Non-interest bear-
ing deposits represented 23% and 25% of total deposits as
of December 31, 2007 and 2006, respectively. TCF’s weighted-
average cost for deposits, including non-interest bearing
deposits, was 2.18% at December 31, 2007, compared with
2.33% at December 31, 2006.

Branches During 2007, TCF opened 20 branches including
10 traditional branches, seven supermarket branches and
three campus branches. TCF plans on opening fewer branches
in 2008, compared with 2007, in an effort to optimize exist-
ing branches in target market areas to improve convenience
and service to customers. TCF anticipates opening 10 new
branches in 2008, consisting of five new traditional branches
and five new supermarket branches. TCF also closed and

36 | TCF Financial Corporation and Subsidiaries

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consolidated four traditional branches and six supermarket
branches and sold 10 Michigan branches, including the
related deposit accounts.

In order to improve the customer experience and enhance

deposit and loan growth, TCF relocated six traditional
branches to improved locations and facilities, remodeled

one traditional branch and 14 supermarket branches in 2007.
In 2008, TCF plans to relocate three branches to improved
locations and new facilities, including two traditional
branches and one supermarket branch, to close and consoli-
date three traditional branches into nearby branches and to
remodel 19 supermarket branches and one campus branch.

At December 31, 2007, 141, or 31%, of TCF’s 453 branches were opened since January 1, 2002. Additional information

regarding TCF’s branches opened since January 1, 2002 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

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,

2007

2006

2005

2004

2003

Percentage
Increase
2007/2006

10
5
3
18

83
48
10
141
31.1%

10
5
4
19

73
43
7
123
27.2%

18
7
3
28

63
38
3
104
23.0%

19
11
–
30

45
31
–
76
17.7%

14
5
–
19

26
20
–
46
10.7%

$ 409,427
442,749
53,007
905,183
361,862
$1,267,045
73,204
$

$ 315,030
298,854
36,194
650,078
421,989
$1,072,067
54,786
$

$241,688
227,925
18,998
488,611
293,720
$782,331
$ 39,699

$151,475
85,472
8,189
245,136
42,212
$287,348
$ 24,091

$ 53,370
37,934
4,904
96,208
19,690
$115,898
$ 7,221

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

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

30.0%
48.1
46.5
39.2
(14.2)
18.2
33.6

Borrowings Borrowings totaled $5 billion at December 31,
2007, up $1.4 billion from December 31, 2006. The increase
was primarily to support the growth in assets. See Notes 10
and 11 of Notes to Consolidated Financial Statements for
detailed information on TCF’s borrowings.

The weighted-average rate on borrowings was 4.51%
at December 31, 2007, and 4.53% at December 31, 2006.

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.

2007 Form 10-K | 37

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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, 2007, the aggregate
contractual obligations (excluding bank deposits) and commitments are as follows.

(In thousands)

Payments Due by Period

Contractual Obligations
Total borrowings (1)
Annual rental commitments under non-cancelable

operating leases

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

Visa indemnification obligation (2)

(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
$4,973,448

220,072
49,675

8,928
7,696
$5,259,819

Total

$1,927,001
621,025
89,206
83,686
2,720,918

76,357
$2,797,275

Less than
1 Year
$582,614

27,304
1,985

8,928
7,696
$628,527

1-3
Years
$240,086

49,539
5,818

–
–
$295,443

4-5
Years
$202,008

After 5
Years
$3,948,740

40,880
5,318

102,349
36,554

–
–
$248,206

–
–
$4,087,643

Amount of Commitment – Expiration by Period
Less than
1 Year

4-5
Years

1-3
Years

$ 11,246
320,003
89,206
83,686
504,141

52,298
$556,439

$ 27,409
240,190
–
–
267,599

20,971
$288,570

After 5
Years

$1,685,901
29,578
–
–
1,715,479

$202,445
31,254
–
–
233,699

2,516
$236,215

572
$1,716,051

(1) Total borrowings excludes interest.

(2) The payment time is estimated to be less than one year, however the exact date of the payment can not be determined.

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 other termination clauses and may require
payment of a fee. Since certain of the commitments are
expected to expire without being drawn upon, the total
commitment amounts do not necessarily represent future
cash requirements. Collateral predominantly consists of
residential and commercial real estate.

TCF is a member of Visa USA, Inc. (Visa USA) for issuance
and processing of its card transactions. On October 3, 2007,
Visa, Inc. (Visa) completed a restructuring including Visa
USA in preparation for its planned initial public offering
(IPO). As a member of Visa, TCF has an obligation to indem-
nify Visa USA under its bylaws and Visa under a retrospective
responsibility plan, approved as part of Visa’s restructuring,

for contingent losses in connection with certain covered
litigation (“the Visa indemnification”) disclosed in Visa’s
public filings with the Securities and Exchange Commission
(SEC) based on its membership proportion. TCF is not a party
to the lawsuits brought against Visa USA. TCF’s membership
proportion in Visa USA is .12554%. The SEC accounting staff
has concluded that Visa USA member institutions are required
to recognize their portion of the Visa indemnification at
the estimated fair value of such obligation in accordance
with FASB Interpretation No. 45, Guarantor’s Accounting and
Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others. Although the deter-
mination of fair value of TCF’s Visa indemnification is highly
judgmental, TCF recognized a charge in the fourth quarter
of 2007 for this obligation totaling $7.7 million.

38 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 39

Campus marketing agreements consist of fixed or mini-
mum obligations for exclusive marketing and naming rights
with 10 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.

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, 2007 was $1.1 billion, or 6.88% of total assets, up from
$1 billion, or 7.04% of total assets, at December 31, 2006.
The increase in stockholders’ equity was primarily due to
net income of $266.8 million, partially offset by the repur-
chase of 3.9 million shares of TCF’s common stock at a cost
of $105.3 million and the payment of $124.5 million in
dividends on common stock. At December 31, 2007, TCF had
5.4 million shares remaining in stock repurchase programs
authorized by its Board of Directors. For the year ended
December 31, 2007, average total equity to average assets
was 6.82%, compared with 7.15% for the year ended
December 31, 2006. Dividends to common shareholders on
a per share basis totaled 97 cents in 2007, an increase of
5.4% from 92 cents in 2006. TCF’s dividend payout ratio was
45.8% in 2007 and 48.4% in 2006. The Company’s primary
funding sources for common dividends are dividends
received from TCF Bank. At December 31, 2007, TCF Financial
and TCF Bank exceeded their regulatory capital requirements
and are considered “well-capitalized” under guidelines
established 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.

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

Recent Accounting Developments
On June 14, 2007, the EITF reached a final consensus on
Issue No. 06-11, Accounting for Income Tax Benefits of
Dividends on Share-Based Payment Awards. This consensus
was ratified by the FASB on June 27, 2007. This Issue states
that tax benefits received on dividends paid to employees
associated with their unvested stock compensation awards
should be recorded in additional-paid-in-capital (APIC)
for awards expected to vest. Currently, such dividends are
accounted for as a permanent tax deduction reducing the
annual effective income tax rate. This Issue is to be applied
prospectively to dividends declared in fiscal years beginning
after December 15, 2007. Retrospective application of this
Issue is prohibited. This Issue will not have a material effect
on TCF’s financial statements.

On September 6, 2006, the FASB issued Statement of
Financial Accounting Standards (SFAS) No.157, Fair Value
Measurements. SFAS 157 clarifies the fair value measurement
objective, its application in GAAP and establishes a frame-
work that builds on current practice and requirements. The
framework simplifies and, where appropriate, codifies the
similar guidance in existing pronouncements and applies
broadly to financial and non-financial assets and liabilities.
The Statement clarifies the definition of fair value as the
price that would be received from selling an asset or paid to
transfer a liability in an orderly transaction between market
participants at the measurement date, known as an exit-
price definition of fair value. It also provides further guidance
on the valuation techniques to be used in estimating fair
value. Current disclosures about the use of fair value to meas-
ure assets and liabilities are expanded in this Statement.
The disclosures focus on the methods used for fair value
measurements and apply whether the assets and liabilities
are measured at fair value in all periods, such as trading
securities, or in only some periods, such as impaired assets.
The Statement is effective for all financial statements
issued for fiscal years beginning after November 15, 2007
as well as for interim periods within such fiscal years. TCF
expects no significant effect on its financial statements
from the adoption of this Statement.

In February 2007, the FASB issued Statement of Financial

Accounting Standards No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities – Including an

2007 Form 10-K | 39

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amendment of FASB Statement No. 115. SFAS 159 allows
companies to report selected financial assets and liabilities
at fair value. The changes in fair value are recognized in
earnings and the assets and liabilities measured under this
methodology are required to be displayed separately in the
balance sheet. The main intent of the Statement is to miti-
gate the difficulty in determining reported earnings caused
by a “mixed-attribute model” (or reporting some assets at
fair value and others using a different valuation attribute
such as amortized cost). The project is separated into two
phases. This first phase addresses the creation of a fair
value option for financial assets and liabilities. A second
phase will address creating a fair value option for selected
non-financial items. SFAS 159 is effective for all financial
statements issued for fiscal years beginning after November
15, 2007. TCF expects the adoption of this Statement to
have no effect on its financial statements.

Fourth Quarter Summary
In the fourth quarter of 2007, TCF reported net income of
$62.8 million, up from $53.7 million in the fourth quarter
of 2006. The fourth quarter of 2007 net income included
$11.3 million in pre-tax gains on sales of securities, $2.8
million of pre-tax gains on sales of real estate, a $7.7 mil-
lion charge for TCF’s estimated contingent obligation related
to Visa USA litigation indemnification and $5.4 million of
favorable income tax adjustments for a combined after-tax
impact of seven cents per diluted share. Net income for the
fourth quarter of 2006 included an $851 thousand reduction
in income tax expense for an after-tax impact of one cent
per diluted share. Diluted earnings per common share was
50 cents for the fourth quarter of 2007, compared with 42
cents for the same 2006 period. TCF opened five new branches
in the fourth quarter of 2007, consisting of four traditional
branches and one supermarket branch.

Net interest income was $139.6 million for the quarter
ended December 31, 2007, up $3.7 million, or 2.7% from the
quarter ended December 31, 2006. The increase in net interest
income was primarily due to the growth in average interest-
earning assets, up $928.1 million over the fourth quarter of
2006, partially offset by the 24 basis point reduction in
net interest margin. The net interest margin was 3.83% and
4.07% for the fourth quarter of 2007 and 2006, respectively.
The decrease in net interest margin from the fourth quarter

of 2006 was primarily due to partially funding the growth
in interest-earning assets with borrowings and higher-cost
deposits and continued customer preference for lower yield-
ing fixed-rate loans and the net impact of interest rate
changes on variable-rate assets and liabilities, partially
offset by increased interest rates on higher balances of
fixed-rate assets.

TCF provided $20.1 million for credit losses in the fourth
quarter of 2007, compared with $10.1 million in the fourth
quarter of 2006, primarily due to higher consumer home
equity net charge-offs and the resulting portfolio reserve
rate increases. For the fourth quarter of 2007, net loan and
lease charge-offs were $13.8 million, or .46% of average
loans and leases outstanding, compared with $6.6 million,
or .24% of average loans and leases outstanding during the
same 2006 period primarily due to higher consumer home
equity and commercial real estate loan net charge-offs.

Total non-interest income in the fourth quarter of 2007 was
$138.9 million, up $20 million, or 16.9 percent, from the fourth
quarter of 2006, primarily due to gains on sales of securities
available for sale. Fees and service charges were $72.3 mil-
lion, up 8.4 percent from the fourth quarter of 2006, prima-
rily due to higher deposit service fees. Card revenues totaled
$25.1 million for the fourth quarter of 2007, up 6.7 percent
over the same period. Leasing and equipment finance rev-
enues were $14.8 million for the fourth quarter of 2007,
down $324 thousand from the fourth quarter of 2006 primarily
due to a decrease in sales-type lease revenues. Leasing and
equipment finance revenues may fluctuate from period to
period based on customer-driven factors not within the
control of TCF.

Non-interest expense totaled $160.4 million for the 2007
fourth quarter, down $1.2 million, or .7 percent, from $161.6
million for the 2006 fourth quarter, excluding Visa indemni-
fication and operating lease depreciation. Compensation
and employee benefits increased $744 thousand, or .9 per-
cent, from the fourth quarter of 2006, primarily due to
branch expansion partially offset by decreases resulting
from branches sold, closed branches and other efficiency
initiatives. Occupancy and equipment expenses increased
$913 thousand, or 3.1 percent, from the fourth quarter of
2006, primarily due to costs associated with branch expan-
sion. Advertising and promotions expense decreased $1.6
million from the fourth quarter of 2006, primarily due to

40 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 41

decreased media and promotions expense. Operating lease
depreciation increased $521 thousand from the fourth
quarter of 2006, primarily driven by the large amount of
operating leases that commenced in the fourth quarter of
2006 and were depreciating in the fourth quarter of 2007.
The fourth quarter of 2007 included a $7.7 million charge for
TCF’s estimated contingent obligation related to Visa liti-
gation indemnification. See page 38 under Management’s
Discussion and Analysis for details of TCF’s obligations to
indemnify Visa for certain litigation. Other expense decreased
$1.2 million, or 3.1 percent, primarily due to expense control
initiatives partially offset by an $879 thousand increase in
net real estate expenses due to higher losses on foreclosed
real estate and a $747 thousand increase in card processing
and issuance costs due to increased transactions. The fourth
quarter of 2006 included approximately $1 million of sever-
ance and other exit costs related to the closure and consol-
idation of 13 branches and other staff reductions.

In the fourth quarter of 2007, the effective income tax
rate was 26.7% of income before tax expense, down from
32.05% for the fourth quarter of 2006. The lower effective
tax rate for the fourth quarter of 2007, compared with the
fourth quarter of 2006, was primarily due to $5.4 million
of adjustments in the fourth quarter of 2007 for favorable
developments involving uncertain tax positions compared
with $851 thousand of adjustments involving uncertain tax
positions in the fourth quarter of 2006.

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 a dramatic and potentially
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
17, 2007 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 con-
tain “forward-looking” statements that deal with future
results, plans or performance. In addition, TCF’s manage-
ment 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 deposit 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 supermar-
ket chains in which TCF maintains supermarket branches;
changes in accounting standards or interpretations of
existing standards; monetary, fiscal or tax policies of the
federal or state governments; including adoption of state
legislation that would increase state taxes; impact of federal
legislation enacted in September 2007, reducing interest
subsidies and other benefits available to TCF in its education
lending programs; adverse findings in tax audits or regulatory
examinations and resulting enforcement actions; changes in
credit and other risks posed by TCF’s loan, lease, investment,
and securities available for sale portfolios, including declines
in commercial or residential real estate values or changes in
allowance for loan and lease losses methodology dictated by
new market conditions or regulatory requirements; imposition
of vicarious liability on TCF as lessor in its leasing operations;
denial of insurance coverage for claims made by TCF; techno-
logical, computer-related or operational difficulties or loss or
theft of information; adverse changes in securities markets;
and results of litigation, including possible increases in
indemnification obligations for certain litigation against
Visa USA (“covered litigation”) and potential reductions
in card revenues resulting from other litigation against
Visa USA; or other significant uncertainties.

2007 Form 10-K | 41

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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 (ALCO) manages TCF’s
interest-rate risk based on interest rate expectations and
other factors. The principal objective of TCF’s asset/liabil-
ity 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 chang-
ing 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. The base net interest income simula-
tion performed as of December 31, 2007, assumes interest
rates are unchanged for the next twelve months. The net
interest income simulation shows that if short-term and
long-term interest rates were to sustain an immediate
increase or decrease of 100 basis points, for the next twelve
months that net interest income would not significantly
change from the base case.

Management exercises its best judgement in making
assumptions regarding events that management can impact
such as non-contractual deposit repricings and events out-
side management’s control such as customer behavior on
loan and deposit activity, counter-party decisions on callable
borrowings and the effect that competition has on both

42 | TCF Financial Corporation and Subsidiaries

loan and deposit pricing. These assumptions are inherently
uncertain and, as a result, net interest income simulation
results will differ from actual results due the timing, mag-
nitude and frequency of interest rate changes, changes in
market conditions, customer behavior 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 $1 billion,
or 6.4% of total assets at December 31, 2007, compared with
a negative $630 million, or 4.3% of total assets at December
31, 2006. 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
maturing or re-pricing, including assumed prepayments,
within a particular time period.

TCF estimates that an immediate 100 basis point decrease

in current mortgage loan interest rates would increase
prepayments on the $7.4 billion of fixed-rate mortgage-
backed securities, residential real estate loans and consumer
loans at December 31, 2007, by approximately $977 million,
or 134.4%, 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, 2007, by approx-
imately $257 million, or 35.4%, in the first year. A slowing
in prepayments would increase the estimated life of the
portfolios and may favorably impact net interest income or
net interest margin in the future.

156976_10K_F_Q6 2/16/08 3:48 PM Page 43

The following table summarizes TCF’s interest-rate gap position at December 31, 2007.

(Dollars in thousands)
Interest-earning assets:

Education 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

Interest-earning assets over (under)

interest-bearing liabilities

Unsettled transactions
Cumulative gap
Cumulative gap as a percentage

of total assets:

At December 31, 2007
At December 31, 2006

Within
30 Days

30 Days to
6 Months

6 Months to
1 Year

1 to 3 Years

3+ Years

Total

Maturity/Rate Sensitivity

$ 154,420
16,702
10,135
158,872
1,048,332
1,401,380
10
2,789,851

821,415
1,238,278
267,164
206,634
556,070
2,904
3,092,465

–
75,574
53,318
338,173
209,387
318,708
120,465
1,115,625

278,203
228,901
65,347
1,601,285
–
14,931
2,188,667

–
114,080
59,305
339,010
310,660
355,118
–
1,178,173

288,116
220,862
60,358
342,060
–
11,049
922,445

–
407,788
106,703
880,621
815,712
1,267,273
–
3,478,097

887,756
563,511
148,215
87,345
–
236,456
1,923,283

1,715
$
1,349,537
298,146
387,667
731,564
3,248,152
27,792
6,044,573

1,833,037
385,268
35,583
17,211
–
4,152,038
6,423,137

156,135
1,963,681
527,607
2,104,343
3,115,655
6,590,631
148,267
14,606,319

4,108,527
2,636,820
576,667
2,254,535
556,070
4,417,378
14,549,997

(302,614)
100,944
$ (201,670)

(1,073,042)
–
$(1,274,712)

255,728
–
$(1,018,984)

1,554,814
–
$ 535,830

(378,564)
–
$ 157,266

56,322
100,944
157,266

(1.3)%
2.9%

(8.0)%
(4.6)%

(6.4)%
(4.3)%

3.4%
(7.4)%

1.0%
.7%

(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, 2007, 34% of checking deposits, 64% of savings deposits, and 68% of money market deposits are included in

amounts repricing within one year. 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.

(3) Includes $4.167 billion of callable borrowings. Based on December 31, 2007 interest rates. The 1-3 year category includes the projected call of $217 million of callable

borrowings, with the remaining $3.95 billion in the over 3 year category.

2007 Form 10-K | 43

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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, 2007 and 2006,
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, 2007. These consol-
idated 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, 2007 and 2006, and the results
of their operations and their cash flows for each of the years
in the three-year period ended December 31, 2007, 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), TCF Financial Corporation’s internal control over
financial reporting as of December 31, 2007, based on cri-
teria established in Internal Control – Integrated Framework
issued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO), and our report dated
February 14, 2008 expressed an unqualified opinion on the
effectiveness of the Company’s internal control over financial
reporting.

Minneapolis, Minnesota
February 14, 2008

44 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 45

Consolidated Statements of Financial Condition

(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;

131,468,699 and 131,660,749 shares issued

Additional paid-in capital
Retained earnings, subject to certain restrictions
Accumulated other comprehensive loss
Treasury stock at cost, 4,866,480 and 1,242,413 shares, and other

Total stockholders’ equity
Total liabilities and stockholders’ equity

See accompanying notes to consolidated financial statements.

At December 31,

2007

2006

358,174
148,267
1,963,681
156,135

6,590,631
2,557,330
558,325
2,104,343
11,810,629
527,607
12,338,236
(80,942)
12,257,294
438,452
152,599
502,452
$15,977,054

$ 4,108,527
2,636,820
576,667
2,254,535
9,576,549
556,070
4,417,378
4,973,448
328,045
14,878,042

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

–

1,315
354,563
926,875
(18,055)
(165,686)
1,099,012
$15,977,054

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

2007 Form 10-K | 45

156976_10K_F_Q6 2/16/08 3:48 PM Page 46

Consolidated Statements of Income

Year Ended December 31,

2007

2006

2005

$836,953
109,581
13,252
8,237
968,023

230,625
187,221
417,846
550,177
56,992
493,185

278,046
98,880
35,620
10,318
422,864
59,151
8,270
490,285
13,278
37,894
541,457

346,468
120,824
21,679
17,588
155,565
662,124
372,518
105,710
$266,808

$
$
$

2.13
2.12
.97

$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
21,567
485,276
–
4,188
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
12,744
453,965
10,671
13,606
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

(In thousands, except per-share data)

Interest income:
Loans and leases
Securities available for sale
Education 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
Gains on sales of branches and real estate
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.

46 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 47

Consolidated Statements of Stockholders’ Equity

(Dollars in thousands)

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

FASB Statement No.158, net of tax

Dividends on common stock
Repurchase of 3,900,000 shares
Issuance of 738,890 shares
Treasury stock retired
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
Comprehensive income:

Net income
Other comprehensive income
Comprehensive income

Dividends on common stock
Repurchase of 3,910,000 shares
Issuance of 198,850 shares
Cancellation of shares
Cancellation of shares for tax withholding
Amortization of stock compensation
Exercise of stock options, 87,083 shares
Stock compensation tax benefits
Change in shares held in trust for

deferred compensation plans, at cost

Balance, December 31, 2007

Number of
Common
Shares
Issued

Common
Stock

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
(Loss)/
Income

Treasury
Stock
and Other

Total

184,939,094

$1,849

$ 505,542 $1,385,760

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

–
–
–
–
–
–
(114,004)
(438,897)
–
–
–

–

–
–
–
–
–
–
(1)
(4)
–
–
–

–

–
–
–
–
–
(9,658)
(1,137)
(13,479)
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)
–
(876)
(13,483)
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

(17,548)

244,943
–
244,943

–
(121,405)
–
–
(876,667)
529

–
(374)
(374)

–
–
–

(13,337)
–
–
–
–
–

–
–
(101,045)
13,874
1,003,957
–

–
–
–
–

–

–
–
–
–

–

–
–
546
–

17,548

–

244,943
(374)
244,569

(13,337)
(121,405)
(101,045)
–
–
38

(2,452)
7,499
354
20,681

131,660,749

$1,317

$ 343,744 $ 784,011

$(34,926) $ (60,772) $ 1,033,374

–
–
–
–
–
–
(140,775)
(51,275)
–
–
–

–
–
–
–
–
–
(1)
(1)
–
–
–

–
–
–
–
–
(4,850)
(615)
(1,409)
7,430
(992)
4,534

266,808
–
266,808
(124,513)
–
–
569
–
–
–
–

–
16,871
16,871
–
–
–
–
–
–
–
–

–
–
–
–
(105,251)
4,850
–
–
–
2,208
–

266,808
16,871
283,679
(124,513)
(105,251)
–
(47)
(1,410)
7,430
1,216
4,534

–
131,468,699

–
$1,315

6,721

–
$354,563 $ 926,875

–

–
$(18,055) $(165,686) $1,099,012

(6,721)

See accompanying notes to consolidated financial statements.

2007 Form 10-K | 47

156976_10K_F_Q6 2/16/08 3:48 PM Page 48

Consolidated Statements of Cash Flows

(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 of education loans held for sale
Net increase (decrease) in other assets and accrued

expenses and other liabilities

Gains on sales of assets and deposits, net
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 of and principal collected on

securities available for sale

Purchases of securities available for sale
Net decrease (increase) in 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
Purchases of premises and equipment
Proceeds from sales of premises and equipment
Proceeds from sale of mortgage servicing rights
Other, net

Net cash used by investing activities

Cash flows from financing activities:

Net increase in deposits
Sales of deposits, net
Net increase (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 increase (decrease) 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.

48 | TCF Financial Corporation and Subsidiaries

Year Ended December 31,

2007

2006

2005

$ 266,808

244,943

265,132

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

(71,809)
(25,624)
11,108
(106,118)
159,014

4,227,920
(4,551,188)
(620,058)
1,017,711

247,152
(1,314,638)
–
(53,876)
75,952
22,386
(86,900)
29,604
–
21,163
(984,772)

1,153,127
(16,542)
(583,985)
1,687,308
(1,203,086)
(93,499)
(114,543)
10,716
1,165
840,661
14,903
359,798
374,701

64,169
56,992
187,967
3,989
(206,752)

28,292
(51,172)
6,751
90,236
357,044

3,337,230
(3,711,353)
(776,716)
1,916,424

234,215
(2,369,452)
71,000
(95,226)
53,008
33,635
(76,637)
9,743
–
15,498
(1,358,631)

48,707
(213,294)
341,957
1,275,329
(217,406)
(105,251)
(124,513)
4,534
718
1,010,781
9,194
348,980
$ 358,174

$ 408,248
93,634
$
73,733
$

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

3,176
(5,790)
(328)
162,776
407,719

3,621,344
(4,110,463)
(767,932)
–

229,014
(397,504)
(71,000)
(68,948)
49,466
31,060
(79,614)
7,714
41,160
16,532
(1,499,171)

639,895
–
(258,014)
1,206,403
(321,830)
(101,045)
(121,405)
20,681
1,046
1,065,731
(25,721)
374,701
348,980

$
$
$

331,345
96,324
41,088

$
$
$

200,246
151,161
26,574

156976_10K_F_Q6 2/16/08 3:48 PM Page 49

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 incurred 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. Impaired loans include non-
accrual and restructured commercial real estate and com-
mercial business loans and equipment finance loans. Loan
impairment is measured as the present value of the expected
future cash flows discounted at the loan’s initial effective
interest rate or the fair value of the collateral for collateral-
dependent loans. Consumer loans, residential real estate
loans and leases are excluded from the definition of an
impaired loan 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 manage-
ment’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.

2007 Form 10-K | 49

156976_10K_F_Q6 2/16/08 3:48 PM Page 50

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 esti-
mates by management including the fair value of the equip-
ment 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 underlying 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 amounts. 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 a critical accounting estimate which is based on complex
analyses of many factors including interpretation of federal
and state income tax laws, the evaluation of uncertain tax
positions, differences between the tax and financial report-
ing bases of assets and liabilities (temporary differences),
estimates of amounts due or owed such as the timing of
reversal of temporary differences and current financial
accounting standards. Additionally, there can be no assur-
ance that estimates and interpretations used in determining
income tax liabilities may not be challenged by federal and
state taxing authorities. Actual results could differ signifi-
cantly from the estimates and tax law interpretations used in
determining the current and deferred income tax liabilities.
In the preparation of income tax returns, tax positions are

taken based on interpretation of federal and state income

50 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 51

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 financial 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. TCF’s policy is to report interest and penalties, if any,
related to unrecognized tax benefits in income tax expense
in the Consolidated Statements of Income.

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 period-
ically 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 acquiring
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 to
interest income using methods which approximate a level
yield over the estimated remaining lives of the loans and
leases. Net direct fees and costs on lines of credit are
amortized on a straight line basis over the contractual life
of the line of credit and adjusted for payoffs. Net deferred
fees and costs on home equity lines of credit are amortized
to service fee income.

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 are owed for loans secured
by residential real estate), unless the loan or lease is
adequately secured and in the process of collection.
A loan secured by residential real estate is placed on non-
accrual status if, upon notification of bankruptcy, the loan
is already in delinquent status. If the loan is current at
notification, the loan is placed on non-accrual status at 90
days or four payments are owed, 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

2007 Form 10-K | 51

156976_10K_F_Q6 2/16/08 3:48 PM Page 52

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 car-
rying 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.

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, 2007, TCF’s
investments in affordable housing limited partnerships were
$51 million, compared with $43 million at December 31, 2006
and were recorded in other assets.

Five of these investments in affordable housing limited
partnerships are considered variable interest entities. These
partnerships are not consolidated with TCF. As of December 31,
2007 and 2006, the carrying amount of these five investments
was $49.8 million and $39.7 million, respectively. These
amounts included $12.3 million and $1.8 million of uncon-
ditional unfunded equity contributions as of December 31,

52 | TCF Financial Corporation and Subsidiaries

2007 and 2006, respectively, which are recorded in other
liabilities. Thus, the maximum exposure to loss on these
five investments was $49.8 million at December 31, 2007;
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 were 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 determined on the date of grant and amortized to
compensation expense, with a corresponding increase in addi-
tional paid-in capital, 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
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 information
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.

156976_10K_F_Q6 2/16/08 3:48 PM Page 53

Note 2. Cash and Due from Banks

At December 31, 2007, TCF was required by Federal Reserve
Board regulations to maintain reserve balances of $97.9
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

Subtotal

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

and other
Total investments

At December 31,
2006
2007

$115,848
4,617
120,465
20,423
–

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

7,379
$148,267

859
$170,129

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 financial operations of the FHLBs and actions
by the Federal Housing Board’s Office of Supervision.
The carrying values and yields on investments at

December 31, 2007, by contractual maturity, are shown below.

(Dollars in thousands)
Due in 1 year or less
Due in 5-10 years
Due after 10 years
No stated maturity

Total

Carrying
Value
14
200
7,164
140,889
$148,267

Yield
2.46%
2.00
4.38
4.57
4.56

Note 4. Securities Available for Sale

Securities available for sale consist of the following.

2007

2006

At December 31,

Gross
Amortized Unrealized Unrealized
Losses

Gains

Gross

Cost

Fair
Value

Gross
Amortized Unrealized Unrealized
Losses

Gains

Gross

Cost

Fair
Value

(Dollars in thousands)
Mortgage-backed securities:

U.S. Government sponsored
enterprises and federal
agencies

Other

Other securities

Total

Weighted-average yield

5.27%

$1,975,817
3,992
250
$1,980,059

$2,493
–
–
$2,493

$(18,681) $1,959,630
3,801
250
$(18,871) $1,963,681

(190)
–

$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)
–

2007 Form 10-K | 53

156976_10K_F_Q6 2/16/08 3:48 PM Page 54

Gross gains of $13.3 million and $10.7 million were rec-

The amortized cost and fair value of securities

ognized on sales of securities available for sale during
2007 and 2005, respectively. There were no sales of securi-
ties available for sale during 2006. $2 billion and $1.7 bil-
lion of mortgage-backed securities were pledged as
collateral to secure certain deposits and borrowings at
December 31, 2007 and 2006, respectively (see Notes 10
and 11 for additional information).

available for sale at December 31, 2007, by contractual
maturity, are shown below.

(Dollars in thousands)
Due in 1 year or less
Due in 1-5 years
Due in 5-10 years
Due after 10 years

Total

At December 31, 2007

Amortized
Cost
8
593
3,946
1,975,512
$1,980,059

Fair Value
8
604
3,773
1,959,296
$1,963,681

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.
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 concluded that no
other-than-temporary impairment has occurred at December 31, 2007.

(In thousands)
Mortgage-backed securities:

U.S. Government sponsored
enterprises and federal
agencies

Other

Total

(In thousands)
Mortgage-backed securities:

U.S. Government sponsored
enterprises and federal
agencies

Other

Total

Less than 12 months

Fair Value

Unrealized
Losses

At December 31, 2007
12 months or more

Fair Value

Unrealized
Losses

Total

Fair Value

Unrealized
Losses

$286,063
–
$286,063

$(190)
–
$(190)

$977,511
3,443
$980,954

$(18,491)
(190)
$(18,681)

$1,263,574
3,443
$1,267,017

$(18,681)
(190)
$(18,871)

Less than 12 months

Fair Value

Unrealized
Losses

At December 31, 2006
12 months or more

Fair Value

Unrealized
Losses

Total

Fair Value

Unrealized
Losses

$270,636
–
$270,636

$(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)

54 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 55

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,
2007

2006

Percentage
Change

$ 4,178,961
2,344,113
6,523,074
67,557
6,590,631

$ 3,781,458
2,101,210
5,882,668
62,409
5,945,077

2,280,204
277,126
2,557,330
558,325
3,115,655

2,201,996
188,657
2,390,653
551,995
2,942,648

604,185

492,062

1,611,881
26,657
41,678
(180,058)
1,500,158
2,104,343
11,810,629
527,607
$12,338,236

1,423,226
22,694
34,671
(154,488)
1,326,103
1,818,165
10,705,890
627,790
$11,333,680

10.5%
11.6
10.9
8.2
10.9

3.6
46.9
7.0
1.1
5.9

22.8

13.3
17.5
20.2
(16.6)
13.1
15.7
10.3
(16.0)
8.9

(1) Operating leases of $71.1 million and $80.4 million at December 31, 2007 and 2006, 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 $39.3
million and $44.1 million at December 31, 2007 and 2006,
respectively. During 2007, $10 thousand of new loans were
made, $4.8 million of loans were repaid. All loans to outside
directors and their related interests were made in the
ordinary course of business on normal credit terms, includ-
ing interest rates and collateral, as those prevailing at the
time for comparable transactions with unrelated persons.
The aggregate amount of loans to executive officers of TCF
was $27 thousand and $30 thousand at December 31, 2007
and 2006, 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, 2007 are as follows.

(In thousands)
2008
2009
2010
2011
2012
Thereafter
Total

Total
$ 570,770
408,543
287,601
182,481
81,420
27,566
$1,558,381

2007 Form 10-K | 55

156976_10K_F_Q6 2/16/08 3:48 PM Page 56

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
Provision for credit losses
Charge-offs
Recoveries

Net charge-offs
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

Year Ended December 31,
2006
$ 55,823
20,689
(33,221)
15,252
(17,969)
$ 58,543
.17%
.52

2005
$ 75,393
8,586
(47,904)
19,748
(28,156)
$ 55,823
.29%
.55

2007
$ 58,543
56,992
(52,421)
17,828
(34,593)
$ 80,942

.30%
.66

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,
2005
2006
2007

$24,770
2,718
21,490
91

35,084
1,915
5,724

$17,512
2,470
8,169
603

25,673
978
3,557

$3,791
1,642
5,345
76

25,857
960
2,900

(1) There were no impaired loans and leases at December 31, 2007, 2006 and 2005 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 during the period.

TCF had $4.9 million of troubled debt restructuring loans
at December 31, 2007. There were no such loans outstanding
at December 31, 2006 and December 31, 2005. There were no
material commitments to lend additional funds to customers
whose loans or leases were classified as non-accrual at
December 31, 2007. At December 31, 2007, accruing loans
and leases delinquent for 90 days or more was $15.4 million,
compared with $12.2 million at December 31, 2006.

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,
2006
2007
$118,656
$131,942
218,171
236,893
54,474
57,639
273,412
288,876
664,713
715,350

276,898
$438,452

258,626
$406,087

56 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 57

TCF leases certain premises and equipment under oper-
ating leases. Net lease expense including utilities and other
operating expenses was $34 million, $32.9 million and $30.2
million in 2007, 2006 and 2005, respectively.

At December 31, 2007, the total minimum rental payments

for operating leases were as follows.

(In thousands)
2008
2009
2010
2011
2012
Thereafter
Total

$ 27,304
25,368
24,171
21,165
19,716
102,349
$220,073

Note 8. Goodwill and Other Intangible Assets

Goodwill and other intangible assets are summarized as follows.

(In thousands)
Amortizable intangible assets:
Deposit base intangibles
Unamortizable intangible assets:

Goodwill related to the
banking segment
Goodwill related to the
leasing segment
Total

2007

2006

At December 31,

Gross
Amount

Accumulated
Amortization

Net
Amount

Gross
Amount

Accumulated
Amortization

Net
Amount

$ 21,180

$21,180

–

$ 21,180

$20,224

956

$141,245

11,354
$152,599

$141,245

11,354
$152,599

$141,245

11,354
$152,599

$141,245

11,354
$152,599

Amortization expense for intangible assets was $1 million, $2.9 million and $11.8 million for the years ended December 31,

2007, 2006 and 2005, respectively.

2007 Form 10-K | 57

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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

–%

1.40
.64
2.60
2.57

1.50
4.38
2.18

2007

Amount

$2,228,598
1,879,929
4,108,527
2,636,820
576,667

7,322,014
2,254,535
$9,576,549

At December 31,

% of
Total

23.3%
19.6
42.9
27.5
6.0

76.5
23.5
100.0%

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

% of
Total

24.9%
19.6
44.5
24.1
6.0

74.6
25.4
100.0%

During the first quarter of 2007, TCF sold 10 out-state Michigan branches with $241.4 million in deposits.

Certificates of deposit had the following remaining maturities at December 31, 2007.

(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

$100,000
Minimum
$273,354
225,917
96,366
9,179
3,829
1,655
203
649
$611,152

Other
$ 644,194
664,333
245,814
56,894
17,443
7,950
3,666
3,089
$1,643,383

Total
$ 917,548
890,250
342,180
66,073
21,272
9,605
3,869
3,738
$2,254,535

58 | TCF Financial Corporation and Subsidiaries

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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, 2007.

(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.

2007

2006

2005

Amount

Rate

Amount

Rate

Amount

Rate

$150,000

3.68%

$125,000

5.39%

$270,000

4.30%

43,297
100,000
9,500

253,273
$556,070

4.31
4.33
5.93

4.29
4.16

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

$131,551

4.98%

$502,200

5.06%

$308,062

3.46%

36,768
17,575
8,276

36,123
$230,293

$354,000

84,051
100,000
31,000

253,273

4.73
4.48
7.29

4.68
4.94

N.A.

N.A.
N.A.
N.A.

N.A.

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

$583,000

828,378
350,000
56,000

10,949

3.13
2.84
4.52

3.06
3.25

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 substantially the same securities upon the maturities
of the agreements. At December 31, 2007, all of the securi-
ties sold under short-term repurchase agreements provided
for the repurchase of identical securities and were collater-
alized by mortgage-backed securities having a fair value
of $44.6 million.

TCF Financial (parent company) has an $80 million
unsecured line of credit that matures in March 2008, and
contains certain covenants common to such agreements.
As of December 31, 2007, TCF is not in default with respect
to any of its covenants under the line of 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 inter-
est 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, 2007, TCF had $9.5 million out-
standing on its bank line of credit. There were no outstanding
balances under the line of credit at December 31, 2006.

2007 Form 10-K | 59

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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,

2007

Weighted-
Average
Rate

–%

5.26
6.02
4.85
4.16
4.49
4.60
4.49
5.27
5.37
5.63
5.43
–
7.13
7.10
6.98
7.00
6.98
7.09
–
4.51
5.00
4.66
4.56

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

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

Year of
Maturity

2007
2009
2010
2011
2015
2016
2017

2014
2015
2016

2007
2008
2009
2010
2011
2012

2007
2008
2009

Amount

–
117,000
100,000
200,000
1,400,000
1,100,000
1,250,000
4,167,000
74,726
49,619
74,395
198,740
–
24,318
15,439
6,681
1,732
276
48,446
–
2,226
966
3,192
$4,417,378

The next call year and stated maturity year for the callable
FHLB advances and repurchase agreements outstanding at
December 31, 2007 were as follows.

Stated Weighted-
Average
Rate

(Dollars in thousands)

Next
Call
Date
$1,617,000
1,000,000
1,450,000
100,000
–
–
–
$4,167,000

Year
2008
2009
2010
2011
2015
2016
2017

Total

Weighted-
Average
Rate
4.42% $
4.45
4.56
4.82
–
–
–
4.49

Maturity
Date
–
117,000
100,000
200,000
1,400,000
1,100,000
1,250,000
$4,167,000

–%

5.26
6.02
4.85
4.16
4.49
4.60
4.49

At December 31, 2007, TCF has pledged residential real
estate loans, consumer loans, commercial real estate loans
and FHLB stock with an aggregate carrying value of $5.9
billion as collateral for FHLB advances. Included in FHLB
advances and repurchase agreements at December 31, 2007
are $517 million of fixed-rate FHLB advances, which are
callable quarterly by our counterparties at par until maturity.
In addition, TCF has $1.9 billion of FHLB advances and $1.8
billion of repurchase agreements which are callable during
various years from 2008 through 2011. The probability that
these advances and repurchase agreements will be called
depends primarily on the level of related interest rates during
the call period. If FHLB advances are called, replacement
funding will be provided by the FHLB at the then-prevailing
market rate of interest for the term selected by TCF, subject
to standard terms and conditions.

60 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 61

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% until February 1, 2016. These
subordinated notes qualify as Tier 2 or supplementary capi-
tal 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 underly-
ing 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, 2007:

Current

Deferred

Total

Federal
State

Total

$ 91,170
3,100
$ 94,270

$13,900
(2,460)
$11,440

$105,070
640
$105,710

Year ended December 31, 2006:

Federal
State

Total

$ 112,465
1,830
$114,295

$ (439) $ 112,026
(1,691)
139
$(2,130) $ 112,165

Year ended December 31, 2005:

Federal
State

Total

$ 120,793
1,788
$ 122,581

$(7,241) $ 113,552
1,726
$(7,303) $ 115,278

(62)

Year Ended December 31,
2005
2006
35.00%
35.00%

2007
35.00%

(In thousands)
Federal income tax rate
Increase (decrease) in income
tax expense resulting from:
State income tax, net
of federal income
tax benefit

.11
Deductible stock dividends (1.04)
Investments in affordable

.03
(1.14)

.29
(1.17)

housing limited
partnerships
Federal settlement of
prior year issue
Changes in uncertain
tax positions

Other, net
Effective income tax rate

(.60)

(.64)

(2.27)

(2.73)
(.09)
28.38%

–

(1.72)
(.16)
31.41%

(3.67)
.49
30.30%

Effective January 1,2007, TCF adopted Financial Accounting

Standards Board Interpretation No. 48, Accounting for
Uncertainty in Income Taxes, an Interpretation of FASB
Statement No. 109 (the Interpretation). This Interpretation
provides guidance on financial statement recognition and
measurement of tax positions taken, or expected to be
taken, in tax returns. The initial adoption of this Interpretation
had no impact on TCF’s financial statements.

A reconciliation of the change in the gross amount,
before related tax effects, of unrecognized tax benefits
from January 1, 2007 to December 31, 2007 is as follows:

(In thousands)
Balance at January 1, 2007

Increases for tax positions related to the

current year

Increases for tax positions related to prior years
Decreases for tax positions related to prior years
Decreases related to lapse of applicable statutes

of limitation

Balance at December 31, 2007

$24,316

2,305
211
(10,150)

(3,642)
$13,040

2007 Form 10-K | 61

156976_10K_F_Q6 2/16/08 3:48 PM Page 62

The total amount of unrecognized tax benefits that, if
recognized, would affect the tax provision and the effective
income tax rate is $6.5 million, net of related tax benefit
effects.

TCF’s policy is to report interest and penalties, if any,
related to unrecognized tax benefits in income tax expense
in the Consolidated Statements of Income. The gross amount
of accrued interest at December 31, 2007 is $1.4 million.
TCF recorded a reduction of accrued interest of $768 thou-
sand during 2007.

TCF’s federal income tax returns are open and subject
to examination from the 2004 tax return year and forward.
TCF’s various state income tax returns are generally open
from the 2003 and later tax return years based on individual
state statutes of limitation. Changes in the amount of
unrecognized tax benefits within the next twelve months
from normal expirations of statutes of limitation are not
expected to be material. TCF is under examination by certain
states. TCF does not currently expect to resolve these
examinations within the next twelve months. Developments
in these examinations or other events could cause manage-
ment to change its judgment about the amount of unrecog-
nized tax benefits. Due to the amount and nature of these
possible events, an estimate of the range of reasonably
possible changes in the amount of unrecognized tax bene-
fits cannot be made.

The significant components of the Company’s deferred

tax assets and deferred tax liabilities are as follows.

Note 13. Stockholders’ Equity

Restricted Retained Earnings Retained earnings at
December 31, 2007 includes approximately $134.4 million
for which no provision for federal income taxes has been
made. This amount represents earnings legally appropriated
to thrift bad debt reserves and deducted for federal income
tax purposes in prior years 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.

(In thousands)
Deferred tax assets:

Stock compensation and deferred

compensation plans

Allowance for loan and lease losses
Securities available for sale
Net operating losses and credits
Valuation allowance
Other

Total deferred tax assets

Deferred tax liabilities:
Lease financing
Loan fees and discounts
Premises and equipment
Prepaid expenses
Pension and postretirement benefits
Investments in affordable housing
Investment in FHLB Stock
Other

Total deferred tax liabilities

Net deferred tax liabilities

At December 31,
2007

2006

Treasury Stock and Other Treasury stock and other
consists of the following.

$ 30,766
30,968
5,868
7,065
(2,131)
7,161
79,697

109,455
25,412
13,143
7,907
5,078
4,455
3,169
3,186
171,805
$ 92,108

$ 30,817
21,531
11,748
6,010
(2,447)
5,199
72,858

94,928
24,000
9,220
6,941
1,241
3,244
3,112
1,929
144,615
$ 71,757

(In thousands)
Treasury stock, at cost
Shares held in trust for deferred
compensation plans, at cost
Total

At December 31,
2007
$(126,020)

2006
$(27,827)

(39,666)
$(165,686)

(32,945)
$(60,772)

TCF purchased 3.9 million, 3.9 million and 3.5 million
shares of its common stock during the years ended December
31, 2007, 2006 and 2005, respectively. At December 31, 2007,
TCF had 5.4 million shares remaining in its stock repurchase
programs authorized by the Board.

Shares Held in Trust for Deferred Compensation
Plans TCF has certain 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

62 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 63

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. TCF has a supplemental nonqualified Employee
Stock Purchase Plan in which certain employees can
contribute from 0% to 50% of their salary and bonus. At
December 31, 2007, the fair value of the assets in the plans
totaled $93.3 million and included $70.6 million 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 corresponding deferred com-
pensation 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 material
adverse effect on TCF. In general, TCF Bank may not declare
or pay a dividend to TCF in excess of 100% of its net retained
profits for the current year combined with its retained net
profits for the preceding two calendar years without prior
approval of the OCC.

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)
As of December 31, 2007:
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, 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

N.A. Not Applicable.

Actual

Minimum
Capital Requirement

Well-Capitalized
Capital Requirement

Amount

Ratio

Amount

Ratio

Amount

Ratio

$ 964,467
900,864

964,467
900,864

1,245,808
1,182,196

$ 914,128
821,273

914,128
821,273

1,173,073
1,080,218

6.16%
5.76

8.28
7.75

10.70
10.17

$469,914
468,806

465,931
464,934

931,863
929,869

3.00%
3.00

N.A.
$ 781,343

4.00
4.00

8.00
8.00

698,897
697,402

1,164,829
1,162,336

6.33%
5.70

$432,993
432,374

3.00%
3.00

N.A.
$ 720,623

8.65
7.79

11.10
10.24

422,678
421,941

845,355
843,881

4.00
4.00

8.00
8.00

634,016
632,911

1,056,694
1,054,851

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, 2007, 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.

2007 Form 10-K | 63

156976_10K_F_Q6 2/16/08 3:48 PM Page 64

Note 15. Stock Compensation

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, 2007,
there were 3,937,813 shares reserved for issuance under the
Program, including 144,050 shares related to outstanding
stock options that are fully vested.

At December 31, 2007, there were 1,455,166 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.
In January 2008, 1,012,666 shares of performance-based
restricted stock vested. Other restricted stock grants vest
over periods from three to seven years. The weighted-
average grant date fair value of restricted stock was $26.81,
$25.31 and $27.78 for shares granted in 2007, 2006 and 2005,
respectively. Compensation expense for restricted stock
totaled $7.1 million, $7.0 million and $4.7 million in 2007,
2006 and 2005, respectively. The recognized tax benefit
for stock compensation expense was $2.4 million, $2.3 mil-
lion and $1.6 million in 2007, 2006 and 2005, respectively.

Unrecognized stock compensation for restricted stock
awards was $13.8 million with a weighted-average remain-
ing amortization period of 1.4 years at December 31, 2007,
compared with $19.6 million with a weighted-average
remaining amortization period of 2 years at December 31,
2006 and $20.4 million with a weighted-average remaining
amortization period of 1.8 years at December 31, 2005.

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, 2007 and 2006, all outstanding stock
options are vested. Stock options outstanding and exercis-
able at December 31, 2007 had exercise prices ranging from
$11.78 to $16.09, a weighted-average exercise price of
$13.91 and a weighted-average contractual life of 1.3 years.
In January 2008, TCF issued 1,626,000 nonqualified stock

options under the Program. The options have an exercise
price of $15.75 per share, with 50% exercisable in 2011 and
the remaining 50% exercisable in 2012. TCF also issued under
the Program 100,000 shares of performance-based restricted
stock, with 50% of the award vesting in each of 2008 and
2009, provided certain return on equity goals and service
conditions are met.

The following table reflects TCF’s stock option and restricted stock transactions under the Program since December 31, 2004.

Restricted Stock

Stock Options

Exercise Price

Shares
3,032,226
526,400
–
(111,185)
(1,138,165)
2,309,276
713,900
–
(133,535)
(270,300)
2,619,341
198,850
–
(140,775)
(152,200)
2,525,216
N.A.

Price Range
$ 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
24.26- 28.64
–
9.87- 30.13
20.38- 26.39
9.87- 30.28
N.A.

Shares
325,864
–
(66,064)
–
–
259,800
–
(28,667)
–
–
231,133
–
(87,083)
–
–
144,050
144,050

Range
$ 5.71-$16.64
–
5.71- 16.64
–
–
11.78- 16.64
–
11.78- 16.09
–
–
11.78- 16.64
–
11.78- 16.64
–
–
11.78- 16.09
11.78- 16.09

Weighted-
Average
$12.91
–
9.60
–
–
13.76
–
12.33
–
–
13.93
–
13.96
–
–
13.91
13.91

Outstanding at December 31, 2004

Granted
Exercised
Forfeited
Vested

Outstanding at December 31, 2005

Granted
Exercised
Forfeited
Vested

Outstanding at December 31, 2006

Granted
Exercised
Forfeited
Vested

Outstanding at December 31, 2007
Exercisable at December 31, 2007

N.A. Not Applicable.

64 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 65

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 for employees with one through four years of
service, up to a maximum company contribution of 3% of
the employee’s salary and bonus, 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 $1 per dollar for employees with 10
or more years of service, up to a maximum company contri-
bution of 6% of the employee’s salary and bonus. Prior to
April 1, 2006, TCF matched the contributions of all partici-
pants with TCF common stock at the rate of 50 cents per
dollar for employees with over one year of service, up to a
maximum company contribution of 3% of the employee’s
salary and bonus. Employee contributions vest immediately
while the Company’s matching contributions 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. Effective January 1, 2007, the Company’s matching
contributions can be diversified after three years. At
December 31, 2007, the fair value of the assets in the plan
totaled $156.5 million and included $129.9 million invested
in TCF common stock. The Company’s matching contributions
are expensed when made. TCF’s contributions to the plan
were $6.6 million, $5.1 million and $4.3 million in 2007, 2006
and 2005, 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. Effective March 31, 2006, TCF amended
the Pension Plan to discontinue compensation credits for all
participants. Interest credits will continue to be paid until
participants’ accounts are distributed from the Pension Plan.
Prior to March 31, 2006, TCF 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. All
unvested participant accounts were vested on March 31, 2006.
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.

TCF accounts for the Pension Plan in accordance with
Statement of Financial Accounting Standard (SFAS) No. 87
“Employers’ Accounting for Pensions,” and SFAS No. 88
“Employers’ Accounting for Settlements and Curtailments
of Defined Benefit Pension Plans and for Termination Benefits,”
as amended by SFAS No. 158 “Employers’ Accounting for
Defined Benefit Pension and Other Postretirement Plans”.
SFAS No. 158 requires companies to reflect each defined
benefit and other postretirement benefits plan’s funded
status on the company’s balance sheet. TCF implemented
these provisions for the year ended December 31, 2006.
SFAS No. 158 also requires TCF to change its measurement
date from September 30 to December 31 on or before
December 31, 2008. TCF will change its measurement date to
December 31 in 2008. The Company does not consolidate the
assets and liabilities associated with the Pension Plan.

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.

2007 Form 10-K | 65

156976_10K_F_Q6 2/16/08 3:48 PM Page 66

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
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 (gain) loss
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 plans at end of year

Amounts recognized in Statements of Financial Condition:

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,
2006

2007

Postretirement Plan
Year Ended December 31,
2006

2007

$55,467
(3,011)
$52,456
$52,456

$56,765
–
2,930
–
(1,101)
(6,138)
52,456

64,277
9,367
(6,138)
–
67,506
$15,050

$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

N.A.
N.A.
N.A.
N.A.

$ 9,410
17
491
(484)
1,175
(1,118)
9,491

–
–
(1,118)
1,118
–
$(9,491)

N.A.
N.A.
N.A.
N.A.

$ 8,656
26
433
–
1,341
(1,046)
9,410

–
–
(1,046)
1,046
–
$(9,410)

$15,050

$ 7,512

$(9,491)

$(9,410)

–
7,221
7,221
$22,271

–
16,410
16,410
$23,922

20
4,518
4,538
$(4,953)

605
3,566
4,171
$(5,239)

The following table sets forth the changes recognized in accumulated other comprehensive loss at the dates indicated.

(In thousands)
Accumulated other comprehensive

Pension Plan
Year Ended December 31,

2007

2006

loss at beginning of year, before tax

$16,410

–

–
–
–
16,410

16,410

$ 7,221

$16,410

Impact of plan amendments on

transition obligation

Actuarial net loss (gain) arising

during the period

Amortizations (recognized in net

periodic benefit cost):

Transition obligation cost (credit)
Actuarial loss
Settlement expense

Initial application of FAS 158

Total recognized in other

comprehensive (income) loss
Accumulated other comprehensive loss

at end of year, before tax

N.A. Not Applicable.

–

(5,530)

–
(1,997)
(1,662)
–

(9,189)

66 | TCF Financial Corporation and Subsidiaries

Postretirement Plan
Year Ended December 31,
2006

2007

$4,171

(484)

1,175

(101)
(223)
–
–

367

–

–
–
–
4,171

4,171

$4,538

$4,171

2005

N.A.

N.A.
N.A.
N.A.
N.A.

N.A.

2005

N.A.

N.A.
N.A.
N.A.
N.A.

N.A.

156976_10K_F_Q6 2/16/08 3:48 PM Page 67

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, 2007 and 2006. The discount rate used to
measure the benefit obligation of the Pension Plan was 6% for the year ended December 31, 2007 and 5.5% for the year ended
December 31, 2006. The discount rate used to measure the benefit obligation of the Postretirement Plan was 6% for the year
ended December 31, 2007 and 5.5% for the year ended December 31, 2006.

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
Settlement expense
Plan amendment/curtailment gain
Net periodic benefit cost

Pension Plan
Year Ended December 31,

2007
–
2,930
(4,938)
–
–
1,997
1,662
–
$ 1,651

2006
$ 1,421
3,109
(5,023)
–
(21)
2,330
1,742
(400)
$ 3,158

2005
$ 5,303
3,428
(5,727)
–
(249)
1,050
–
–
$ 3,805

Postretirement Plan
Year Ended December 31,
2006
$ 26
433
–
101
–
119
–
–
$679

2007
$ 17
491
–
101
–
223
–
–
$832

2005
$ 35
552
–
131
–
139
–
–
$857

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,
2006
5.25/5.5%(1)

8.75
4.0

2007

5.5%

8.50
N.A.

2005

6.0%

8.75
4.0

2007

5.5%

N.A.
N.A.

Postretirement Plan
Year Ended December 31,
2006
5.25%

N.A.
N.A.

2005

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.

The amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic

benefit cost during 2008 are as follows.

(In thousands)
Actuarial net loss
Settlement
Transition obligation

Total

Pension Plan
$ 859
713
–
$1,572

Postretirement
Plan
$311
_
4
$315

Total
$1,170
713
4
$1,887

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
weightings of 75% and 25%, respectively.

The actuarial assumptions used in the Pension Plan val-
uation are reviewed annually. The expected long-term rate

of return on plan assets is determined by reference to his-
torical market returns and future expectations. The 10-year
weighted-average return of the indexes consistent with the
Plan’s current investment strategy was 7.1%, net of admin-
istrative expenses. Although past performance is no guaran-
tee of the future results, TCF is not aware of any reasons why
it should not be able to achieve the assumed future average

2007 Form 10-K | 67

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The following table presents assumed health care cost

trend rates for the Postretirement Plan at December 31,
2007 and 2006.

Health care cost trend rate assumed

for next year

Final health care cost trend rate
Year that final health care trend

rate is reached

2007

2006

9%
5%

7.4%
5%

2012

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

$ 21

$ (19)

380

(345)

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.

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 $589 thousand change in net periodic pension expense.
The discount rate used to determine TCF’s pension and
postretirement benefit obligations as of December 31, 2007
and December 31, 2006 was determined by matching esti-
mated 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 14.4% for 2007 and 8.5% for 2006. The actual
return on plan assets for 2007 decreased the actuarial loss
by $4.4 million. The increase in the discount rate from
5.5% at December 31, 2006 to 6.0% at December 31, 2007
decreased the actuarial loss by $2.6 million. Various plan
participant census changes increased the actuarial loss by
$1.5 million in 2007. The decrease in the actuarial loss in
2006 was primarily due to the vesting of all participants
effective April 1, 2006 and the change in the discount rate
assumption from 5.25% to 5.5%, partially offset by various
plan participant census changes.

For 2007, TCF is eligible to contribute up to $12.3 million
to the Pension Plan until the 2007 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 2008. TCF
expects to contribute $1 million to the Postretirement Plan
in 2008. TCF contributed $1.1 million to the Postretirement
Plan in 2007. TCF currently has no plans to pre-fund the
Postretirement Plan in 2008.

The following are expected future benefit payments used

to determine projected benefit obligations.

(In thousands)
2008
2009
2010
2011
2012
2013-2017

Pension
Plan
$ 6,546
5,040
4,734
4,568
4,460
18,961

Postretirement
Plan
$1,007
1,016
983
955
924
4,060

68 | TCF Financial Corporation and Subsidiaries

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Financial instruments with off-balance sheet risk are

summarized as follows.

(In thousands)
Commitments to extend credit:

At December 31,
2007

2006

Consumer home equity and other
Commercial
Leasing and equipment finance
Other

$1,927,001
621,025
89,206
83,686

$1,889,100
618,055
91,271
79,444

Total commitments to
extend credit

Standby letters of credit and
guarantees on industrial
revenue bonds
Total

2,720,918

2,677,870

76,357
$2,797,275

96,285
$2,774,155

Commitments to Extend Credit Commitments to extend
credit are agreements to lend provided there is no violation
of any condition in the contract. These commitments gen-
erally 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 necessarily
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
requirements are expected to be less than the total out-
standing commitments.

Note 18. Fair Values of Financial
Instruments

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 informa-
tion 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 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 car-
ried 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 disclo-
sure 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.

Investments Short-term investments approximate their
fair values due to the short period of time until their real-
ization. The fair value of other investments is estimated
based on discounting cash flows at current market rates
and consideration of credit exposure.

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
borrowers 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 esti-
mated 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.

2007 Form 10-K | 69

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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 inter-
est 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,

2007

2006

Carrying
Amount

Estimated
Fair Value

Carrying
Amount

Estimated
Fair Value

148,267
156,135

148,270
157,083

170,129
144,574

170,129
145,464

5,160,997
1,429,634
6,590,631
2,557,330
558,325
604,185
527,607
(69,796)
$11,072,684

$ 7,322,014
2,254,535
556,070
4,417,378
$14,549,997

5,113,946
1,429,634
6,543,580
2,587,342
560,020
616,886
518,313
–
$11,131,494

$ 7,322,014
2,252,848
556,070
4,569,832
$14,700,764

4,712,762
1,232,315
5,945,077
2,390,653
551,995
492,062
627,790
(48,480)
$10,273,800

$ 7,285,615
2,483,635
214,112
3,374,428
$13,357,790

4,597,165
1,232,315
5,829,480
2,377,243
551,319
489,105
615,373
–
$10,178,113

$ 7,285,615
2,471,847
214,112
3,359,300
$13,330,874

38,402
(215)
38,187

35,254
(200)
35,054

(In thousands)
Financial instrument assets:

Investments
Education loans held for sale
Loans:

Consumer home equity and other:
Closed-end loans and other
Home equity lines of credit (1)

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)

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.

70 | TCF Financial Corporation and Subsidiaries

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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,

2007

2006

2005

$
266,808
127,919,997
(2,521,887)

$
244,943
131,614,386
(2,604,836)

$
265,132
134,652,568
(2,274,032)

125,398,110
2.13
$

129,009,550
1.90
$

132,378,536
2.00
$

266,808

244,943

265,132

125,398,110

129,009,550

132,378,536

356,316
76,340

110,455
105,480

226,179
137,144

125,830,766
2.12
$

129,225,485
1.90
$

132,741,859
2.00
$

All shares of restricted stock are deducted from weighted-average shares outstanding for the computation of basic earn-
ings 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 income. The following table summarizes the com-
ponents of comprehensive income.

(In thousands)
Net income
Other comprehensive income (loss):

Unrealized holding gains (losses) arising during the period

on securities available for sale

Reclassification adjustment for securities gains included in net income
Recognized pension and postretirement actuarial losses and transition obligation
Income tax (expense) benefit

Total other comprehensive income (loss)

Comprehensive income

Year Ended December 31,

2007
$266,808

2006
$244,943

2005
$265,132

30,237
(13,278)
8,822
(8,910)
16,871
$283,679

(94)
–
–
(280)
(374)
$244,569

(20,360)
(10,671)
–
11,231
(19,800)
$245,332

2007 Form 10-K | 71

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Note 21. Other Expense

Other expense consists of the following.

(In thousands)
Card processing and issuance
Deposit account losses
Postage and courier
Telecommunications
Office supplies
ATM processing
Visa indemnification expense
Foreclosed real estate, net
Federal deposit insurance and OCC assessments
Deposit base intangible amortization
Other

Total other expense

2007
$ 18,134
17,629
13,663
11,790
9,581
8,647
7,696
5,006
3,247
956
59,216
$155,565

Year Ended December 31,

2006
$ 16,986
17,455
14,532
12,702
10,255
8,956
–
3,684
3,033
1,629
62,217
$151,449

2005
$ 15,588
16,821
14,303
12,305
10,009
8,935
–
2,253
2,777
1,659
58,834
$143,484

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 financial
services to customers: deposits and investments products,
commercial banking, consumer lending and treasury services.
Management of TCF’s banking operations is 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 profes-
sional 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.

72 | TCF Financial Corporation and Subsidiaries

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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, 2007:

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, 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

Leasing and
Equipment
Finance

Eliminations
and
Reclassifications

Other

Banking

Consolidated

820,516
481,346
$ 1,301,862
485,535
$
51,741
481,346
594,691
88,389
232,060
$
$15,478,259

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

$ 147,507
59,152
$ 206,659
65,356
$
5,251
59,152
65,351
19,330
34,576
$
$2,281,781

$ 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

$
$

–
959
959
(714)
–
156,899
158,022
(2,009)
172
$
$144,582

$
$

–
–
–
–
–
(155,940)
(155,940)
–
–
$
$(1,927,568)

$
$

–
8,047
8,047
445
–
134,645
132,378
(394)
$
3,106
$ 131,509

$
$

–
–
–
973
–
(126,598)
(125,625)
–
$
–
$ (1,707,600)

$
$

114
5,760
5,874
2,780
–
125,337
125,984
280
$
1,853
$ 195,355

$
$

–
–
–
2,347
–
(119,577)
(117,230)
–
$
–
$ (1,373,601)

968,023
541,457
$ 1,509,480
550,177
$
56,992
541,457
662,124
105,710
266,808
$
$15,977,054

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

2007 Form 10-K | 73

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Note 23. Parent Company Financial Information

TCF Financial Corporation’s (parent company only) condensed statements of financial condition as of December 31, 2007
and 2006, and the condensed statements of income and cash flows for the years ended December 31, 2007, 2006 and 2005
are as follows.

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

2007
–
603
(603)
194,558

12,241
142
12,383

11,866
440
1,581
13,887
192,451
1,502
193,953
72,855
$266,808

At December 31,

2007

2006

2,883
1,069,373
–
24,320
24,848
$1,121,424

9,500
12,912
22,412
1,099,012
$1,121,424

17,652
975,466
4,691
22,237
21,994
$1,042,040

–
8,666
8,666
1,033,374
$1,042,040

Year Ended December 31,
2006
–
232
(232)
203,908

2005
38
818
(780)
165,025

7,921
1,901
9,822

7,255
414
2,982
10,651
202,847
1,558
204,405
40,538
$244,943

10,067
746
10,813

8,618
403
2,386
11,407
163,651
1,342
164,993
100,139
$265,132

In December 2006, TCF contributed $35 million in initial capital to TCF National Bank Arizona to meet regulatory

requirements and to fund its operations.

74 | TCF Financial Corporation and Subsidiaries

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Condensed Statements of Cash Flows

(In thousands)
Cash flows from operating activities:

Year Ended December 31,

2007

2006

2005

Net income
Adjustments to reconcile net income to net cash provided by operating activities:

$ 266,808

$ 244,943

$ 265,132

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 (used) 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

Note 24. Litigation Contingencies

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 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.

(68,163)
1,188
(66,975)
199,833

–
–
(88)
(88)

(124,513)
(105,251)
9,500
4,534
1,216
(214,514)
(14,769)
17,652
2,883

(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

2007 Form 10-K | 75
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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 revenue

Gains on sales of securities
available for sale

Gains on sales of branches

and real estate

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 as a percentage

of average loans and leases (1)
Average total equity to average assets

(1) Annualized.

Dec. 31,
2007

Sept. 30,
2007

June 30,
2007

March 31,
2007

Dec. 31,
2006

Sept. 30,
2006

June 30,
2006

March 31,
2006

$11,810,629

$11,334,162

$11,038,605

$10,815,212

$10,705,890

$10,496,031

$10,231,268

$ 9,824,661

1,963,681

2,022,505

1,943,450

1,859,244

1,816,126

1,770,427

1,781,995

1,816,135

527,607

547,552

572,619

602,748

627,790

659,477

695,214

732,912

2,491,288

2,570,057

2,516,069

2,461,992

2,443,916

2,429,904

2,477,209

2,549,047

152,599

15,977,054

15,530,338

14,977,704

14,898,375

14,669,734

14,319,387

14,222,561

13,851,936

7,322,014

2,254,535

9,576,549

556,070

4,417,378
1,099,012

7,312,568

2,433,498

9,746,066

167,319

4,266,022

1,043,447

7,331,605

2,511,090

9,842,695

285,828

3,568,997

1,001,032

7,420,480

2,477,230

9,897,710

47,376

3,571,930

1,062,008

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

2,778,277

2,688,131

977,385

968,300

Dec. 31,
2007

Sept. 30,
2007

June 30,
2007

March 31,
2007

Dec. 31,
2006

Sept. 30,
2006

June 30,
2006

March 31,
2006

Three Months Ended

139,571

137,704

137,425

135,477

135,887

135,033

135,442

131,168

20,124

18,883

13,329

4,656

10,073

5,288

4,177

1,151

119,447

118,821

124,096

130,821

125,814

129,745

131,265

130,017

124,845

126,394

126,882

112,164

118,831

128,252

123,622

114,571

11,261

2,017

–

$
$
$

2,752

138,858

172,613

85,692

22,875

62,817

.51

.50

.2425

1.60%

23.55

3.83

.46

6.79

$
$
$

1,246

129,657

162,777

85,701

26,563

59,138

.48
.48
.2425

1.55%
23.39
3.90

.38
6.64

$
$
$

2,723

129,605

162,534

91,167

29,038

62,129

.49
.49
.2425

1.67%
24.16
4.02

.24
6.92

$
$
$

31,173

143,337

164,200

109,958

27,234

82,724

.65
.65
.2425

2.24%
31.81
4.00

.10
7.03

–

118,831

165,562

79,083

25,350

53,733

.42
.42
.23

1.49%
20.68
4.07

.24
7.20

$
$
$

–

1,260

129,512

162,389

96,868

30,941

65,927

.51
.51
.23

1.86%
26.44
4.11

.18
7.02

$
$
$

–

123,622

160,966

93,921

26,860

67,061

.52
.52
.23

1.92%
27.75
4.22

.16
6.92

$
$
$

–

2,928

117,499

160,280

87,236

29,014

58,222

.45
.45
.23

1.71%
23.82
4.25

.08
7.18

76 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 77

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 (Principal

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 procedures 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, 2007. Also, there were no sig-
nificant changes in the Company’s disclosure controls or
internal controls over financial reporting during the fourth
quarter of 2007 that have materially affected or are reason-
ably likely to materially 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, 2007.
This assessment was based on criteria for evaluating inter-
nal 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, 2007.

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, 2007.
Any control system, no matter how well conceived and
operated, can provide only reasonable, not absolute, assur-
ance that the objectives of the control system are met. The
design of a control system inherently has limitations, and
the benefits of controls must be weighed against their costs.
Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people,
or by management override of the controls. Therefore, no
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.

Lynn A. Nagorske
Chief Executive Officer and Director

Thomas F. Jasper
Executive Vice President and Chief Financial Officer

David M. Stautz
Senior Vice President, Controller and Assistant Treasurer

February 14, 2008

2007 Form 10-K | 77

156976_10K_F_Q6 2/16/08 3:48 PM Page 78

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
TCF Financial Corporation:

We have audited TCF Financial Corporation’s internal con-
trol over financial reporting as of December 31, 2007, 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 responsible for
maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of
internal control over financial reporting included in the
accompanying Management Report. Our responsibility is to
express an opinion on TCF Financial Corporation’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,
assessing the risk that a material weakness exists and testing
and evaluating the design and operating effectiveness of
internal control based on the assessed risk. Our audit also
included 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

78 | TCF Financial Corporation and Subsidiaries

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 dis-
position 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 policies or procedures may
deteriorate.

In our opinion, TCF Financial Corporation maintained, in
all material respects, effective internal control over financial
reporting as of December 31, 2007, based on criteria estab-
lished 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, 2007 and 2006, 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, 2007,
and our report dated February 14, 2008 expressed an unqual-
ified opinion on those consolidated financial statements.

Minneapolis, Minnesota
February 14, 2008

Item 9B. Other Information
None.

156976_10K_F_Q6 2/16/08 3:48 PM Page 79

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 5, 2008 and incorporated
herein by reference: Election of Directors: Background of
the Nominees and Other Directors; TCF Stock Ownership of
Directors, Officers and 5% Owners – Were All Stock Ownership
Reports Timely Filed by TCF Financial Insiders? and Background
of Executive Officers Who are Not Directors.

Information regarding procedures for nominations of

Directors is set forth in the section entitled Election of
Directors: Corporate Governance – Director Nominations and
Additional Information in TCF’s definitive Proxy Statement
dated March 5, 2008, and is incorporated herein by reference.

Audit Committee and Financial Expert
Information regarding TCF’s separately standing Audit
Committee, its members and financial experts is set forth in
the section of TCF’s definitive proxy statement for the 2008
Annual Meeting entitled Election of Directors: Background
of the Nominees and Other Directors – Committee
Membership and – Board Committee Memberships and
Meetings in 2007 and is 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
statements and has the ability to assess the general applica-
tion of these principles in connection with the accounting for
estimates, 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 audit
committee financial experts. 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 Election of Directors: Background of the
Nominees and Other Directors in TCF’s definitive Proxy
Statement dated March 5, 2008 and is incorporated herein
by reference.

Code of Ethics for Senior Financial Management
TCF adopted a code of ethics for senior financial manage-
ment 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 finan-
cial management will be posted to the Company’s website.

2007 Form 10-K | 79

156976_10K_F_Q6 2/16/08 3:48 PM Page 80

Item 11. Executive Compensation
Information regarding compensation of directors and exec-
utive officers of TCF is set forth in the following sections
of TCF’s definitive Proxy Statement dated March 5, 2008 and
is incorporated herein by reference: Election of Directors:
Compensation of Directors; Compensation Discussion
and Analysis; Compensation Committee Report; Summary
Compensation Table; Grants of Plan-Based Awards in 2007;
Outstanding Equity Awards at Fiscal Year-End; Option
Exercises and Stock Vested in 2007; Pension Benefits;
Nonqualified Deferred Compensation and Potential Payments
Upon Termination or Change in Control.

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 Election of Directors: TCF Stock Ownership
of Directors, Officers and 5% Owners and Equity Compensation
Plans Approved by Stockholders of TCF’s definitive Proxy
Statement dated March 5, 2008 and is 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 5, 2008 and is
incorporated herein by reference.

Item 14. Principal Accounting
Fees and Services
Information regarding principal accounting fees and services
and the audit committee’s pre-approval policies and pro-
cedures relating to audit and non-audit services provided
by the Company’s independent registered public accounting
firm is set forth in the section entitled Advisory Vote on TCF
Financial’s Appointment of Independent Registered Public
Accountants: Audit Committee Report of TCF’s definitive
Proxy Statement dated March 5, 2008 and is incorporated
herein by reference.

80 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 81

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, 2007 and 2006

Consolidated Statements of Income for each of

the years in the three-year period ended December 31, 2007

Consolidated Statements of Stockholders’ Equity

for each of the years in the three-year period ended December 31, 2007

Consolidated Statements of Cash Flows

for each of the years in the three-year period ended December 31, 2007

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

44, 78

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 83 of this report.

2007 Form 10-K | 81
2007 Form 10-K | 81

156976_10K_F_Q6 2/16/08 3:48 PM Page 82

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 14, 2008

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

Chairman of the Board and Director

February 14, 2008

Chief Executive Officer and Director
(Principal Executive Officer)

February 14, 2008

Executive Vice President and
Chief Financial Officer (Principal Financial Officer)

February 14, 2008

Senior Vice President, Controller
and Assistant Treasurer (Principal Accounting Officer)

February 14, 2008

Director, Vice Chairman, General Counsel
and Secretary

Director

February 14, 2008

/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

82 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 83

Index to Exhibits

Exhibit
No.

3(a)

3(b)#

4(a)

4(b)

10(a)

10(b)

10(b)-1*

10(b)-2

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]

Bylaws of TCF Financial Corporation, as amended through May 21, 2005, and as further amended by amend-
ments adopted on February 26, 2007 and October 15, 2007.

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 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 reference 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]; 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]; 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]

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
reference 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];
Amended and Restated TCF Financial Incentive Stock Program [incorporated by reference to Exhibit 10(b)
to TCF Financial Corporation’s Current Report on Form 8-K filed January 25, 2008]

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]

Form of TCF Financial Corporation Restricted Stock Agreement and Non-solicitation/Confidentiality
Agreement [incorporated by reference to Exhibit 10(b)-2 to TCF Financial Corporation’s Annual Report
on Form 10-K for the fiscal year ended December 31, 2005]

2007 Form 10-K | 83

156976_10K_F_Q6 2/16/08 3:48 PM Page 84

Exhibit
No.

10(b)-3

10(b)-4*

10(b)-5*

10(b)-6*

10(b)-7*

10(b)-8*

10(b)-9*

Description

Summary of Stock Award Program for Consumer Lending and Business Banker Divisions [incorporated by
reference to Exhibit 10(b)-3 to TCF Financial Corporation’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2005]

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]

TCF Financial Corporation Restricted Stock Agreement and Non-Solicitation/Confidentiality Agreement
dated January 22, 2007 (“Performance-Based Stock Award”) [incorporated by reference to Exhibit 10(b)-5
to TCF Financial Corporation’s Current Report on Form 8-K filed January 25, 2007]

TCF Financial Corporation Restricted Stock Agreement and Non-Solicitation/Confidentiality Agreement,
dated January 22, 2007 [incorporated by reference to Exhibit 10(b)-6 to TCF Financial Corporation’s Current
Report on Form 8-K filed January 25, 2007]

TCF Financial 1995 Incentive Stock Program Incentive Stock Option Agreement of Craig R. Dahl dated
May 11, 1999 [incorporated by reference to Exhibit 10(b)-7 to TCF Financial Corporation’s Current Report
on Form 10-Q filed April 26, 2007]

Nonqualified Stock Option Agreement of Craig R. Dahl dated May 11, 1999 [incorporated by reference to
Exhibit 10(b)-8 to TCF Financial Corporation’s Current Report on Form 10-Q filed April 26, 2007]

Form of the 2008 Restricted Stock Agreement as executed by certain executives effective January 21, 2008
[incorporated by reference to Exhibit 10(b)-9 to TCF Financial Corporation’s Current Report on Form 8-K
filed January 25, 2008]

10(b)-10*

Form of the 2008 Nonqualified Stock Option Agreement as executed by certain executives effective January
21, 2008 [incorporated by reference to Exhibit 10(b)-10 to TCF Financial Corporation’s Current Report on
Form 8-K filed January 25, 2008]

10(c)

10(d)

TCF Financial Corporation Executive Deferred Compensation Plan as amended and restated through January
24, 2005 [incorporated by reference to Exhibit 10(c) 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
reference to Exhibit 10(d) to TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter
ended September 30, 1998]; 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]; 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]; 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]; 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]

84 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 85

Exhibit
No.

10(e)*

10(e)-1*

10(e)-2*

10(e)-3*

10(e)-4*

10(e)-5*

10(e)-6*

10(e)-7*

10(e)-8*

10(e)-9*

10(e)-10*

Description

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]; 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]

Agreement between William A. Cooper and TCF Financial Corporation and TCF National Bank dated January
24, 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 24, 2005
[incorporated by reference to Exhibit 10(e)-2 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)-1 of TCF Financial Corporation’s Current Report on Form 8-K
filed December 19, 2005]

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]

Employment Agreement between Craig R. Dahl and TCF Financial Corporation dated April 26, 1999, Change
in Control Agreement and Amendment to Employment Agreement between Craig R. Dahl and TCF Financial
Corporation dated April 15, 2005 and Non Solicitation / Confidentiality Agreement between Craig R. Dahl
and TCF Financial Corporation dated April 15, 2005 [incorporated by reference to Exhibit 10(e)-6 of TCF
Financial Corporation’s Current Report on Form 10-Q filed April 26, 2007]

Employment Agreement between Lynn A. Nagorske and TCF Financial Corporation effective January 1, 2008
[incorporated by reference to Exhibit 10(e)-6 to TCF Financial Corporation’s Current Report on Form 8-K
filed October 19, 2007]

Employment Agreement between Neil W. Brown and TCF Financial Corporation effective January 1, 2008
[incorporated by reference to Exhibit 10(e)-7 to TCF Financial Corporation’s Current Report on Form 8-K
filed October 19, 2007]

Form of Employment Agreement as executed by certain executives effective January 1, 2008 [incorporated by
reference to Exhibit 10(e)-8 to TCF Financial Corporation’s Current Report on Form 8-K filed October 19, 2007]

Employment Agreement between Craig Dahl and TCF Financial Corporation effective January 1, 2008
[incorporated by reference to Exhibit 10(e)-9 to TCF Financial Corporation’s Current Report on Form 8-K
filed October 19, 2007]

2007 Form 10-K | 85

156976_10K_F_Q6 2/16/08 3:48 PM Page 86

Exhibit
No.

10(g)*

10(g)-1*

10(g)-2*

10(g)-3*

10(g)-4*

10(g)-5*

10(g)-6*

10(g)-7*

10(j)-1

10(j)-2

10(k)

Description

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]

Change in Control Agreement between Lynn A. Nagorske and TCF Financial Corporation effective January 1,
2008 [incorporated by reference to Exhibit 10(g)-4 to TCF Financial Corporation’s Current Report on
Form 8-K filed October 19, 2007]

Change in Control Agreement between Neil W. Brown and TCF Financial Corporation effective January 1, 2008
[incorporated by reference to Exhibit 10(g)-5 to TCF Financial Corporation’s Current Report on Form 8-K
filed October 19, 2007]

Form of Change of Control Agreement as executed by certain executives effective January 1, 2008
[incorporated by reference to Exhibit 10(g)-6 to TCF Financial Corporation’s Current Report on Form 8-K
filed October 19, 2007]

Form of Change in Control and Non-Solicitation Agreement as executed by certain Senior Officers effective
January 1, 2008 [incorporated by reference to Exhibit 10(g)-7 to TCF Financial Corporation’s Current Report
on Form 8-K filed October 19, 2007]

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 [incorpo-
rated 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 ref-
erence to Exhibit 10(n) to TCF Financial Corporation’s Annual Report on Form 10-K for the fiscal year ended
December 31, 1997]; 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]

86 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 87

Exhibit
No.

10(l)

10(m)

10(n)

10(o)*

10(o)-1*

10(p)

Description

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)]

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 refer-
ence to Exhibit 10(p) to TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998]; 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]; 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]; 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]

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 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 to Exhibit 10(o) of TCF Financial
Corporation’s Report on Form 10-Q for the quarter ended March 31, 2003];and 2004 Management Incentive
Plan – Executive [incorporated by reference to Exhibit 10(o) of TCF Financial Corporation’s Report on Form
10-Q for the quarter ended March 31, 2004] and 2005 Management Incentive Plan – Executive [incorporated
by reference to Exhibit 10(o) of TCF Financial Corporation’s Current Report on Form 8-K (filed January 27,
2005)]; and 2006 Management Incentive Plan – Executive [incorporated by reference to Exhibit 10(o) of
TCF Financial Corporation’s Current Report on Form 8-K (filed January 25, 2006)]; and Form of 2007
Management Incentive Plan – Executive Agreement [incorporated by reference to Exhibit 10(o) of TCF
Financial Corporation’s Current Report on Form 8-K filed January 25, 2007]; Form of 2008 Management
Incentive Plan – Executive Agreement [incorporated by reference to Exhibit 10(o) of TCF Financial
Corporation’s Current Report on Form 8-K filed January 25, 2008]

2007 Management Incentive Plan – Leasing Executive Agreement [incorporated by reference to Exhibit
10(o)-1 of TCF Financial Corporation’s Current Report on Form 10-Q filed April 26, 2007]; 2008 Management
Incentive Plan – Leasing Executive Agreement [incorporated by reference to Exhibit 10(o)-1 of TCF Financial
Corporation’s Current Report on Form 8-K filed January 25, 2008]

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
filing of its Proxy Statement (filed March 17, 2004)]

2007 Form 10-K | 87

156976_10K_F_Q6 2/16/08 3:48 PM Page 88

Description

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)]

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]; 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]; 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]; 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]

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]

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, 2007)

Consent of KPMG LLP dated February 15, 2008

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(r)

10(r)-1

10(s)

10(t)

10(u)

10(u)-1

21#

23#

31#

32#

* Executive Contract

# Filed herein

88 | TCF Financial Corporation and Subsidiaries

156976_10K_F_Q6 2/16/08 3:48 PM Page 89

Senior Ofﬁcers

TCF Financial Corporation

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
Joseph T. Green
Jason E. Korstange
Thomas E. Murphy, Jr.
Barbara E. Shaw
David M. Stautz

TCF Bank Corporate

President and
Chief Executive Officer
Timothy P. Bailey

Executive Vice Presidents
Paul B. Brawner
Gregg R. Goudy
Brian J. Hurd
James L. Koon
James C. LaPlante

Senior Vice Presidents
Michael Beier
Ronald L. Britz
Beverly L. Burman
Scott D. Campbell
Beverly M. Craig
Daniel R. Edward
Brian P. Engels
Linda J. Firth
Shelley A. Fitzmaurice
Mark W. Gault

Christopher N. German
Douglass B. Hiatt
David R. Hinkemeyer
Charles P. Hoffman, Jr.
Katherine D. Johnson
Scott W. Johnson
Gloria J. Karsky
James M. Matheis
David B. McCullough
Anton J. Negrini
Richard J. Nelson
Carol B. Schirmers
Leonard D. Steele
R. Elizabeth Topoluk
Cathleen L. Wilkins

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
Wesley M. Anderson
Jeffrey R. Arnold
Michael A. Dill
James T. Dowiak
Gregory W. Drehmel
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
Elizabeth A. Rojas
Steven E. Rykkeli

TCF Bank
Illinois/Wisconsin/Indiana

President
Mark W. Rohde

Executive Vice Presidents
Luis J. Campos
Mark B. Dillon
Michael R. Klemz
David J. Veurink
Matthew R. Wiley

Senior Vice Presidents
John E. Boyle
Robert J. Brueggeman
Michael Y. Chin
Jennifer A. Daugherty
Peter R. Daugherty
Jeffrey T. Doering
Edward J. Gallagher
Brian S. Graf
Daniel B. Hoffman
Eileen P. Kowalski
Vicki L. Makowka
Dennis McClelland
Russell P. McMinn
Luke K. Oosterhouse
Douglas A. Ortyn
Todd A. Palmer
Michael Roidt
Thomas K. Torossian
Kristin E. Utzinger
Dennis J. Vena
Kathleen M. Wacker

TCF Bank Michigan

President
Robert F. Grant

Past President
Robert H. Scott

Executive Vice Presidents
Robert C. Borgstrom
Joseph W. Doyle
Terrence B. Pryor

Senior Vice Presidents
Jerry E. Coviak
Larry M. Czekaj
Gary L. Fineman
Dennis J. Gistinger
Natalie A. Glass
Donald J. Hawkins
Susan N. Kaminski
Guy J. Rau
Paul R. Tokarczyk
David F. Wible
Brian D. Wilson

TCF Bank Colorado

President
Wayne A. Marty

Executive Vice President
Matthew G. Lamb

Senior Vice Presidents
Timothy J. Bosiacki
James W. Hagen

Larry E. Heesch
David L. Norwood
Bernadette D. Slowey
Stephanie R. Zelenak

TCF Bank Arizona

President
Timothy B. Meyer

Senior Vice Presidents
Delia M. Conrad

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
Paul L. Gendler
Richard J. Pieper

Senior Vice Presidents
Gary W. Anderson
Dean J. Stinchfield

TCF Investments
and Insurance

President and
Chief Executive Officer
Peter O. Torvik

Senior Vice President
James R. Scattergood

2007 Annual Report | 89

156976_10K_F_Q6 2/16/08 3:48 PM Page 90

Board of Directors

William A. Cooper 5
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 1,4
CPA/Managing Director,
George Johnson & Company

Gregory J. Pulles
Vice Chairman, General Counsel
and Secretary

Peter L. Scherer 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

90 | TCF Financial Corporation and Subsidiaries

Ofﬁces

Executive Offices

TCF Financial Corporation
200 Lake Street East
Wayzata, MN 55391-1693
(952) 745-2760

Minnesota

Headquarters
801 Marquette Avenue
Minneapolis, MN 55402
(612) 661-6500

Traditional Branches
Minneapolis/
St. Paul Area (45)
Greater Minnesota (2)

Supermarket Branches
Minneapolis/
St. Paul Area (53)
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 (10)
Kenosha/Racine Area (6)

Supermarket Branches
Chicagoland (155)
Milwaukee Area (8)
Kenosha/Racine Area (3)
Indiana (5)

Campus Branches
Chicagoland (5)
Greater Illinois (2)
Milwaukee (1)

Michigan

Headquarters
17440 College Parkway
Livonia, MI 48152
(734) 542-2900

Traditional Branches
Metro Detroit Area (51)

Supermarket Branches
Metro Detroit Area (1)
Greater Michigan (1)

Campus Branches
Metro Detroit Area (2)
Greater Michigan (1)

Colorado

Headquarters
6400 South Fiddler’s Green Circle
Suite 800
Greenwood Village, CO 80111
(720) 200-2400

Traditional Branches
Metro Denver Area (25)
Colorado Springs (7)

Supermarket Branches
Metro Denver Area (14)

Arizona

Headquarters
4001 East Mountain Sky Avenue
Suite 101
Phoenix, AZ 85044
(602) 716-8900

Traditional Branches
Metro Phoenix Area (4)

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

156976_10K_F_Q6 2/16/08 3:48 PM Page 91

Stockholder Information

Stock Data

Year

High

Dividends
Paid
Low Per Share

2007
Fourth Quarter
Third Quarter
Second Quarter
First Quarter

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

$17.93
26.18
27.80
26.36

$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

$27.95
28.25
28.99
27.91

$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

$17.17
22.69
25.39
24.93

$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

$.2425
.2425
.2425
.2425

$.23
.23
.23
.23

$.2125
.2125
.2125
.2125

$.1875
.1875
.1875
.1875

$.1625
.1625
.1625
.1625

For more historical information on TCF’s stock price and
dividend, visit www.tcfbank.com and click on About TCF/
Investor Relations.

Trading of Common Stock

The common stock of TCF Financial Corporation is listed
on the New York Stock Exchange under the symbol TCB.
At December 31, 2007, TCF had approximately 126.6 million
shares of common stock outstanding.

2008 Common Stock Dividend Dates

Expected Record:
February 1
May 2
August 1
October 31

Expected Payment:
February 29
May 30
August 29
November 28

Transfer Agent and Registrar

Computershare Trust Company, N.A.
PO Box 43078
Providence, RI 02940-3078
(800) 443-6852
www.computershare.com

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,
Inc. Information is available from:

Computershare Investment Plan for TCF Financial Corporation
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

Stacey Ronshaugen
Assistant Vice President
Investor Relations
(952) 745-2762

Available Information

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
EX0-01-C
Wayzata, MN 55391-1693
(952) 745-2760

Annual Meeting

The annual meeting of stockholders of TCF will be held on
Wednesday, April 23, 2008, 3:00 p.m. (local time) at the
Marriott Minneapolis West, 9960 Wayzata Boulevard,
St. Louis Park, Minnesota.

2007 Annual Report | 91

156976_10K_F_Q6 2/16/08 3:48 PM Page 92

Credit Ratings

Last Review
September 2007

Last Rating Action
Moody’s
TCF National Bank:

Outlook
Issuer
Long-term deposits
Short-term deposits
Bank financial strength

Stable
A1
A1
Prime-1
B-

Last Review
October 2007

Last Review
September 2007

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

Stable

BBB+
A-2

A-
A-2

Last Rating Action
FITCH
Outlook
TCF Financial Corporation:

Long-term IDR
Short-term IDR
TCF National Bank:
Long-term IDR
Short-term IDR

Stable

A-
F1

$1.50

1.25

1.00

0.75

0.50

0.25

0.00

Stock Price Performance (In Dollars)

Stock Price*
Dividends*

4
0
/
3
/
9

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

7
9
/
8
2
/
1
1

t
i
l
p
S
k
c
o
t
S

$35

Year
Ending

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

12-07

*Stock split adjusted
For more historical information on TCF’s stock price and dividend, visit www.tcfbank.com and click on About TCF / Investor Relations.

92 | 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.

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 partici-

pation, 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.

2007 Annual Report

| 93

as TCF 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.

We’re organized geographically and by

function, 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 conven-

ient products with free features, such

Our goal is to be the
most convenient bank
in the markets we serve.

T
C
F

F
i
n
a
n
c
i
a
l

C
o
r
p
o
r
a
t
i
o
n

2
0
0
7
A
n
n
u
a
l

R
e
p
o
r
t

TCF Financial Corporation

200 Lake Street East

Wayzata, MN 55391-1693

www.tcfbank.com

002CS-60875

TCFIR9338

TCF® The Convenience Franchise

TCF Financial Corporation 2007 Annual Report