UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

For the quarterly period ended

June 30, 2008

o Transition Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Commission File No.

001-10253

TCF FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		41-1591444
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)

200 Lake Street East, Mail Code EX0-03-A,

Wayzata, Minnesota 55391-1693

(Address and Zip Code of principal executive offices)

Registrant’s telephone number, including area code: (952) 745-2760

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 x

No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller
		reporting company)

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

Yes o

No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

		Outstanding at
Class		July 16, 2008
Common Stock, $.01 par value		131,055,794 shares

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

INDEX

Part I.	Financial Information	Pages

	Item 1. Financial Statements

	Consolidated Statements of Financial Condition at June 30, 2008 and December 31, 2007	3

	Consolidated Statements of Income for the Three and Six Months Ended June 30, 2008 and 2007	4

	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2008 and 2007	5

	Consolidated Statements of Stockholders’ Equity for the Six Months Ended June 30, 2008 and 2007	6

	Notes to Consolidated Financial Statements	7

	Item 2. Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations for the Three and Six Months Ended June 30, 2008 and 2007	19

	Item 3. Quantitative and Qualitative Disclosures About Market Risk	37

	Item 4. Controls and Procedures	38

	Supplementary Information	39

Part II.	Other Information

	Items 1-6	40

	Signatures	42

	Index to Exhibits	43

PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Financial Condition

	At			At
	June 30,			December 31,
(Dollars in thousands, except per-share data)	2008			2007
	(Unaudited)
Assets

Cash and due from banks	$	349,817		$	358,188
Investments	153,550			148,253
Securities available for sale	2,120,664			1,963,681
Education loans held for sale	24,385			156,135
Loans and leases:
Consumer home equity and other	6,919,576			6,590,631
Commercial real estate	2,727,568			2,557,330
Commercial business	556,176			558,325
Leasing and equipment finance	2,263,431			2,104,343
Subtotal	12,466,751			11,810,629
Residential real estate	485,795			527,607
Total loans and leases	12,952,546			12,338,236
Allowance for loan and lease losses	(133,637		)	(80,942		)
Net loans and leases	12,818,909			12,257,294
Premises and equipment, net	441,402			438,452
Goodwill	152,599			152,599
Other assets	398,797			502,452
Total assets	$	16,460,123		$	15,977,054
Liabilities and Stockholders’ Equity

Deposits:
Checking	$	4,208,531		$	4,108,527
Savings	2,917,288			2,636,820
Money market	609,915			576,667
Certificates of deposit	2,410,388			2,254,535
Total deposits	10,146,122			9,576,549
Short-term borrowings	411,802			556,070
Long-term borrowings	4,515,997			4,417,378
Total borrowings	4,927,799			4,973,448
Accrued expenses and other liabilities	297,901			328,045
Total liabilities	15,371,822			14,878,042
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; 131,057,353 and 131,468,699 shares issued	1,310			1,315
Additional paid-in capital	345,668			354,563
Retained earnings, subject to certain restrictions	935,378			926,875
Accumulated other comprehensive loss	(36,986		)	(18,055		)
Treasury stock at cost, 4,576,330 and 4,866,480 shares, and other	(157,069		)	(165,686		)
Total stockholders’ equity	1,088,301			1,099,012
Total liabilities and stockholders’ equity	$	16,460,123		$	15,977,054
See accompanying notes to consolidated financial statements.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands, except per-share data)	2008		2007		2008		2007

Interest income:
Loans and leases	$	208,407	$	206,738	$	420,184	$	408,343
Securities available for sale	28,858		26,665		57,137		51,770
Education loans held for sale	1,756		3,365		5,208		7,511
Investments and other	1,427		1,557		3,069		4,363
Total interest income	240,448		238,325		485,598		471,987
Interest expense:
Deposits	36,954		58,242		85,682		115,397
Borrowings	51,932		42,658		105,525		83,688
Total interest expense	88,886		100,900		191,207		199,085
Net interest income	151,562		137,425		294,391		272,902
Provision for credit losses	62,895		13,329		92,890		17,985
Net interest income after provision for credit losses	88,667		124,096		201,501		254,917
Non-interest income:
Fees and service charges	67,961		71,728		131,508		133,750
Card revenue	26,828		24,876		51,599		48,137
ATM revenue	8,267		9,314		16,237		18,063
Investments and insurance revenue	2,977		2,772		6,212		4,950
Subtotal	106,033		108,690		205,556		204,900
Leasing and equipment finance	14,050		15,199		26,184		29,200
Other	1,421		2,993		2,469		4,946
Fees and other revenue	121,504		126,882		234,209		239,046
Visa share redemption	—		—		8,308		—
Gains on sales of securities available for sale	1,115		—		7,401		—
Gains on sales of branches and real estate	—		2,723		—		33,896
Total non-interest income	122,619		129,605		249,918		272,942
Non-interest expense:
Compensation and employee benefits	84,267		86,707		172,985		174,800
Occupancy and equipment	31,205		29,329		63,618		59,780
Advertising and promotions	7,130		5,586		13,426		11,567
Other	41,667		36,531		78,002		71,846
Subtotal	164,269		158,153		328,031		317,993
Operating lease depreciation	4,460		4,381		8,974		8,741
Total non-interest expense	168,729		162,534		337,005		326,734
Income before income tax expense	42,557		91,167		114,414		201,125
Income tax expense	18,855		29,038		43,286		56,272
Net income	$	23,702	$	62,129	$	71,128	$	144,853

Net income per common share:
Basic	$	.19	$	.49	$	.57	$	1.14
Diluted	$	.19	$	.49	$	.57	$	1.14

Dividends declared per common share	$	.25	$	.2425	$	.50	$	.4850
See accompanying notes to consolidated financial statements.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended
	June 30,
(In thousands)	2008			2007
Cash flows from operating activities:
Net income	$	71,128		$	144,853
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	32,815			31,994
Provision for credit losses	92,890			17,985
Proceeds from sales of education loans held for sale	221,628			134,361
Principal collected on education loans held for sale	1,495			2,961
Originations of education loans held for sale	(94,131		)	(107,035		)
Net (decrease) increase in other assets and accrued expenses and other liabilities	(19,271		)	16,517
Gains on sales of assets and deposits, net	(7,401		)	(33,896		)
Other, net	5,063			4,465
Total adjustments	233,088			67,352
Net cash provided by operating activities	304,216			212,205

Cash flows from investing activities:
Principal collected on loans and leases	1,607,296			1,772,113
Originations of loans	(1,913,411		)	(1,762,423		)
Purchases of equipment for lease financing	(398,804		)	(335,012		)
Proceeds from sales of securities available for sale	1,206,236			—
Proceeds from maturities of and principal collected on securities available for sale	133,751			128,910
Purchases of securities available for sale	(1,418,925		)	(301,385		)
Net decrease in federal funds sold	—			71,000
Purchases of Federal Home Loan Bank stock	(51,167		)	(21,137		)
Proceeds from redemptions of Federal Home Loan Bank stock	46,746			8,926
Proceeds from sales of real estate owned	15,429			16,325
Purchases of premises and equipment	(22,776		)	(38,626		)
Proceeds from sales of premises and equipment	671			10,539
Other, net	9,917			11,328
Net cash used by investing activities	(785,037		)	(439,442		)

Cash flows from financing activities:
Net increase in deposits	569,573			314,853
Sale of deposits, net	—			(213,294		)
Net (decrease) increase in short-term borrowings	(144,268		)	71,716
Proceeds from long-term borrowings	113,056			387,768
Payments on long-term borrowings	(10,951		)	(210,504		)
Purchases of common stock	—			(94,221		)
Dividends paid on common stock	(63,175		)	(62,992		)
Stock compensation tax benefits	3,988			4,519
Other, net	4,227			3,974
Net cash provided by financing activities	472,450			201,819
Net decrease in cash and due from banks	(8,371		)	(25,418		)
Cash and due from banks at beginning of period	358,188			349,839
Cash and due from banks at end of period	$	349,817		$	324,421

Supplemental disclosures of cash flow information:
Cash paid for:
Interest on deposits and borrowings	$	192,570		$	189,752
Income taxes	$	37,550		$	40,680
Transfer of loans and leases to other assets	$	39,825		$	44,758
See accompanying notes to consolidated financial statements.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity

(Unaudited)

												Accumulated
	Number of					Additional						Other			Treasury
	Common		Common			Paid-in			Retained			Comprehensive			Stock
(Dollars in thousands)	Shares Issued		Stock			Capital			Earnings			Loss			and Other			Total
Balance, December 31, 2006	131,660,749		$	1,317		$	343,744		$	784,011		$	(34,926	)	$	(60,772	)	$	1,033,374
Comprehensive income:
Net income	—		—			—			144,853			—			—			144,853
Other comprehensive loss	—		—			—			—			(27,705		)	—			(27,705		)
Comprehensive income (loss)	—		—			—			144,853			(27,705		)	—			117,148
Dividends on common stock	—		—			—			(62,992		)	—			—			(62,992		)
Repurchase of 1,060,000 shares	—		—			—			—			—			(94,221		)	(94,221		)
Issuance of 80,550 shares	—		—			(2,268		)	—			—			2,268			—
Cancellation of shares	(111,025	)	(1		)	(339		)	232			—			—			(108		)
Cancellation of shares for tax withholding	(48,990	)	(1		)	(1,347		)	—			—			—			(1,348		)
Amortization of stock compensation	—		—			3,928			—			—			—			3,928
Exercise of stock options, 7,333 shares	—		—			(698		)	—			—			1,430			732
Stock compensation tax benefits	—		—			4,519			—			—			—			4,519
Change in shares held in trust for deferred compensation plans, at cost	—		—			5,135			—			—			(5,135		)	—
Balance, June 30, 2007	131,500,734		$	1,315		$	352,674		$	866,104		$	(62,631	)	$	(156,430	)	$	1,001,032

Balance, December 31, 2007	131,468,699		$	1,315		$	354,563		$	926,875		$	(18,055	)	$	(165,686	)	$	1,099,012
Pension and postretirement measurement date change	—		—			—			65			—			—			65
Subtotal	131,468,699		1,315			354,563			926,940			(18,055		)	(165,686		)	1,099,077
Comprehensive income:
Net income	—		—			—			71,128			—			—			71,128
Other comprehensive loss	—		—			—			—			(18,931		)	—			(18,931		)
Comprehensive income (loss)	—		—			—			71,128			(18,931		)	—			52,197
Dividends on common stock	—		—			—			(63,175		)	—			—			(63,175		)
Issuance of 277,150 shares	—		—			(7,177		)	—			—			7,177			—
Cancellation of shares	(19,600	)	(1		)	(2,654		)	485			—			—			(2,170		)
Cancellation of shares for tax withholding	(391,746	)	(4		)	(6,223		)	—			—			—			(6,227		)
Amortization of stock compensation	—		—			4,448			—			—			—			4,448
Exercise of stock options, 13,000 shares	—		—			(173		)	—			—			336			163
Stock compensation tax benefits	—		—			3,988			—			—			—			3,988
Change in shares held in trust for deferred compensation plans, at cost	—		—			(1,104		)	—			—			1,104			—
Balance, June 30, 2008	131,057,353		$	1,310		$	345,668		$	935,378		$	(36,986	)	$	(157,069	)	$	1,088,301

See accompanying notes to consolidated financial statements.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

(1) Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all the information and notes necessary for complete financial statements in conformity with generally accepted accounting principles. The information in this Quarterly Report on Form 10-Q is written with the presumption that the users of the interim financial statements have read or have access to the most recent Annual Report on Form 10-K of TCF Financial Corporation (“TCF” or the “Company”), which contains the latest audited financial statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations as of December 31, 2007 and for the year then ended. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior period financial statements to conform to the current period presentation. For Consolidated Statements of Cash Flow purposes, cash and cash equivalents include cash and due from banks.

The preparation of financial statements in conformity with generally accepted accounting principles requires management 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. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting of normal recurring items, considered necessary for a fair presentation. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire year.

(2) Investments

The carrying values of investments consist of the following.

	At		At
	June 30,		December 31,
(In thousands)	2008		2007
Federal Home Loan Bank stock, at cost:
Des Moines	$	120,269	$	115,848
Chicago	4,617		4,617
Subtotal	124,886		120,465
Federal Reserve Bank stock, at cost	20,529		20,423
Other	8,135		7,365
Total investments	$	153,550	$	148,253

The investments in Federal Home Loan Bank (“FHLB”) stock are required investments related to TCF’s borrowings from these banks. 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 Finance Board’s Office of Supervision.

(3) Securities Available for Sale

Securities available for sale consist of the following.

	At June 30, 2008										At December 31, 2007
				Gross		Gross								Gross		Gross
	Amortized			Unrealized		Unrealized			Fair		Amortized			Unrealized		Unrealized			Fair
(Dollars in thousands)	Cost			Gains		Losses			Value		Cost			Gains		Losses			Value
Mortgage-backed securities:
U.S. Government sponsored enterprises and federal agencies	$	2,163,894		$	208	$	(47,149	)	$	2,116,953	$	1,975,817		$	2,493	$	(18,681	)	$	1,959,629
Other	3,635			—		(174		)	3,461		3,992			—		(190		)	3,802
Other securities	250			—		—			250		250			—		—			250
Total	$	2,167,779		$	208	$	(47,323	)	$	2,120,664	$	1,980,059		$	2,493	$	(18,871	)	$	1,963,681
Weighted-average yield	5.28		%								5.27		%

The following tables show 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 June 30, 2008.

	At June 30, 2008
	Less than 12 months					12 months or more					Total
			Unrealized					Unrealized					Unrealized
(In thousands)	Fair Value		Losses			Fair Value		Losses			Fair Value		Losses
Mortgage-backed securities:
U.S. Government sponsored enterprises and federal agencies	$	1,893,095	$	(40,149	)	$	204,068	$	(7,000	)	$	2,097,163	$	(47,149	)
Other	—		—			3,141		(174		)	3,141		(174		)
Total	$	1,893,095	$	(40,149	)	$	207,209	$	(7,174	)	$	2,100,304	$	(47,323	)

	At December 31, 2007
	Less than 12 months					12 months or more					Total
			Unrealized					Unrealized					Unrealized
(In thousands)	Fair Value		Losses			Fair Value		Losses			Fair Value		Losses
Mortgage-backed securities:
U.S. Government sponsored enterprises and federal agencies	$	286,063	$	(190	)	$	977,511	$	(18,491	)	$	1,263,574	$	(18,681	)
Other	—		—			3,443		(190		)	3,443		(190		)
Total	$	286,063	$	(190	)	$	980,954	$	(18,681	)	$	1,267,017	$	(18,871	)

(4) Loans and Leases

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

	At			At
	June 30,			December 31,			Percentage
(Dollars in thousands)	2008			2007			Change
Consumer home equity and other:
Home equity:
First mortgage lien	$	4,404,117		$	4,178,961		5.4	%
Junior lien	2,446,982			2,344,113			4.4
Total consumer home equity	6,851,099			6,523,074			5.0
Other	68,477			67,557			1.4
Total consumer home equity and other	6,919,576			6,590,631			5.0
Commercial:
Commercial real estate:
Permanent	2,442,966			2,280,204			7.1
Construction and development	284,602			277,126			2.7
Total commercial real estate	2,727,568			2,557,330			6.7
Commercial business	556,176			558,325			(0.4	)
Total commercial	3,283,744			3,115,655			5.4
Leasing and equipment finance (1):
Equipment finance loans	680,027			604,185			12.6
Lease financings:
Direct financing leases	1,694,514			1,611,881			5.1
Sales-type leases	23,629			26,657			(11.4	)
Lease residuals	47,605			41,678			14.2
Unearned income and deferred lease costs	(182,344		)	(180,058		)	(1.3	)
Total lease financings	1,583,404			1,500,158			5.5
Total leasing and equipment finance	2,263,431			2,104,343			7.6
Total consumer, commercial and leasing and equipment finance	12,466,751			11,810,629			5.6
Residential real estate	485,795			527,607			(7.9	)
Total loans and leases	$	12,952,546		$	12,338,236		5.0

(1) Operating leases of $63.9 million at June 30, 2008 and $71.1 million at December 31, 2007 are included in Other Assets on the Consolidated Statements of Financial Condition.

(5) Long-term Borrowings

The following table sets forth information about long-term borrowings.

		At June 30, 2008				At December 31, 2007
				Weighted-				Weighted-
	Stated			Average				Average
(Dollars in thousands)	Maturity	Amount		Rate		Amount		Rate
Federal Home Loan Bank advances and securities sold under repurchase agreements	2009	$	117,000	5.26	%	$	117,000	5.26	%
	2010	100,000		6.02		100,000		6.02
	2011	300,000		4.64		200,000		4.85
	2015	1,400,000		4.16		1,400,000		4.16
	2016	1,100,000		4.49		1,100,000		4.49
	2017	1,250,000		4.60		1,250,000		4.60
Sub-total		4,267,000		4.48		4,167,000		4.49
Subordinated bank notes	2014	74,821		5.27		74,726		5.27
	2015	49,703		5.37		49,619		5.37
	2016	74,425		5.63		74,395		5.63
Sub-total		198,949		5.43		198,740		5.43
Discounted lease rentals	2008	12,893		6.70		24,318		7.13
	2009	19,592		6.58		15,439		7.10
	2010	11,035		6.44		6,681		6.98
	2011	4,052		6.51		1,732		7.00
	2012	1,369		6.71		276		6.98
	2013	128		7.07		—		—
Sub-total		49,069		6.58		48,446		7.09
Other borrowings	2008	13		5.00		2,226		4.51
	2009	966		5.00		966		5.00
Sub-total		979		5.00		3,192		4.66
Total long-term borrowings		$	4,515,997	4.54		$	4,417,378	4.56

Included in FHLB advances and repurchase agreements at June 30, 2008 were $717 million of FHLB advances, which are callable quarterly by the counterparties at par until maturity. In addition, TCF has $1.9 billion of FHLB advances and $1.6 billion of repurchase agreements which contain one-time call provisions for various years from 2008 through 2011. On July 9, 2008, TCF extended the maturity and call dates of $200 million of callable repurchase agreements that previously had a scheduled maturity date in 2015 and a call date in 2008. The probability that the advances and repurchase agreements will be called by the counterparties depends primarily on the level of related interest rates during the call period. If FHLB advances are called, replacement funding will be available from the FHLB at the then-prevailing market rate of interest for the term selected by TCF, subject to standard terms and conditions.

The following table represents the maturity of FHLB advances and repurchase agreements based on the next available call date, compared with the stated maturity date at June 30, 2008.

(Dollars in thousands)
Year	Next Call Date		Weighted- Average Rate		Stated Maturity		Weighted- Average Rate

2008	$	1,617,000	4.42	%	$	—	—	%
2009	1,000,000		4.45		117,000		5.26
2010	1,450,000		4.56		100,000		6.02
2011	100,000		4.82		200,000		4.85
2015	—		—		1,400,000		4.16
2016	—		—		1,100,000		4.49
2017	—		—		1,250,000		4.60
Total	$	4,167,000	4.49		$	4,167,000	4.49

(6) Stockholders’ Equity

Treasury stock and other consists of the following.

	At			At
	June 30,			December 31,
(In thousands)	2008			2007
Treasury stock, at cost	$	(118,507	)	$	(126,020	)
Shares held in trust for deferred compensation plans, at cost	(38,562		)	(39,666		)
Total	$	(157,069	)	$	(165,686	)

(7) Fair Value Measurement

Effective January 1, 2008, TCF adopted Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements. In accordance with the FASB Staff Position 157-2, Effective Date of SFAS No. 157, TCF has not applied the provisions of this statement to non-financial assets and liabilities such as real estate owned, repossessed assets and equipment held for sale. SFAS 157 defines fair value and establishes a consistent framework for measuring fair value under GAAP and expands disclosure requirements for fair value measurements. Fair values represent the estimated 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.

The following is a description of valuation methodologies used for assets recorded at fair value on a recurring basis at June 30, 2008.

Securities available for sale

At June 30, 2008, securities available for sale consisted primarily of U.S. Government sponsored enterprise and federal agency mortgage-backed securities. The fair value of available for sale securities are recorded using observable market prices from independent asset pricing services that are based on observable transactions, but not a quoted market.

Assets held in trust for deferred compensation

At June 30, 2008, assets held in trust for deferred compensation plans consisted of investments in publicly traded stock other than TCF stock and mutual funds. The fair value of these assets are based upon quotes from independent asset pricing services based on active markets.

At June 30, 2008, the fair value of assets measured on a recurring basis are:

(in thousands)	Readily Available Market Prices (1)	Observable Market Prices (2)	Company Determined Market Prices (3)	Total at Fair Value
Securities available for sale:
Mortgage-backed securities:
U.S. Government sponsored enterprises and federal agencies	$ —	$ 2,116,953	$ —	$ 2,116,953
Other	—	—	3,461	3,461
Other securities	—	—	250	250
Assets held in trust for deferred compensation plans (4)	19,139	—	—	19,139
Total assets	$ 19,139	$ 2,116,953	$ 3,711	$ 2,139,803

(1) Considered Level 1 under SFAS 157.

(2) Considered Level 2 under SFAS 157.

(3) Considered Level 3 under SFAS 157 and is based on valuation models that use significant assumptions that are not observable in an active market.

(4) A corresponding liability is recorded in other liabilities for TCF’s obligation on these assets.

The change in the balance sheet carrying values associated with company determined market priced financial assets carried at fair value during the six months ended June 30, 2008 was not significant.

(8) Stock Compensation

The following table reflects TCF’s restricted stock transactions under the TCF Financial Incentive Stock Program since December 31, 2007.

	Restricted Stock
			Weighted-Average
	Shares		Grant Date Fair Value
Outstanding at December 31, 2007	2,525,216			$	19.72
Granted	277,150			15.50
Forfeited	(19,600	)		26.05
Vested	(1,107,066	)		11.11
Outstanding at June 30, 2008	1,675,700			$	24.64

The following table reflects TCF’s stock option transactions under the TCF Financial Incentive Stock Program since December 31, 2007.

	Stock Options
						Weighted-Average
			Weighted-Average			Remaining Contractual
	Shares		Exercise Price			Term In Years
Outstanding at December 31, 2007	144,050			$	13.91	1.32
Granted	1,626,000			15.75		9.50
Exercised	(13,000	)		12.56		—
Forfeited	(4,250	)		15.09		—
Outstanding at June 30, 2008	1,752,800			$	15.62	8.87
Exercisable at June 30, 2008	126,800			$	14.01	0.84

In January 2008, TCF issued 1,626,000 nonqualified stock options. These options have an exercise price of $15.75 per share, with 813,000 options exercisable in 2011, which expire in 2018 and the remaining 813,000 options exercisable in 2012, which expire in 2018. The weighted-average grant date fair value of stock options granted in January 2008 was $3.70 and $3.73, respectively.

Unrecognized stock compensation for restricted stock and stock options was $18.9 million with a weighted-average remaining amortization period of 2.8 years at June 30, 2008.

The following table summarizes information about stock options outstanding at June 30, 2008.

	Stock Options Outstanding			Stock Options Exercisable
			Weighted-Average
		Weighted-Average	Remaining Contractual		Weighted-Average
Exercise price range	Shares	Exercise Price	Life in Years	Shares	Exercise Price
$10.91-$14.52	126,800	$ 14.01	0.84	126,800	$ 14.01
$15.75	1,626,000	$ 15.75	9.50	—	$ —

The 126,800 exercisable stock options are accounted for using Accounting Principles Board Opinion (APB) No. 25, Accounting for Stock Issued to Employees. TCF estimated the fair value of stock options granted during the first quarter of 2008 using a Black-Scholes option valuation model. Additional valuation and related assumption information for TCF’s stock option plans are presented below.


Expected volatility	28.5	%
Weighted-average volatility	28.5	%
Expected dividends	3.5	%
Expected term (in years)	6.5 - 7
Risk-free rate	2.5 - 2.73	%

(9) Regulatory Capital Requirements

The following table sets forth TCF’s and TCF National Bank’s regulatory tier 1 leverage, tier 1 risk-based and total risk-based capital levels, and applicable percentages of adjusted assets, together with the stated minimum and well-capitalized capital ratio requirements.

					Minimum				Well-Capitalized
	Actual				Capital Requirement				Capital Requirement
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of June 30, 2008:
Tier 1 leverage capital
TCF	$	972,688	5.97	%	$	488,558	3.00	%	N.A.		N.A.
TCF National Bank	913,742		5.63		486,979		3.00		$	811,632	5.00	%

Tier 1 risk-based capital
TCF	972,688		8.08		481,563		4.00		722,345		6.00
TCF National Bank	913,742		7.61		480,045		4.00		720,068		6.00

Total risk-based capital
TCF	1,307,552		10.86		963,127		8.00		1,203,908		10.00
TCF National Bank	1,248,373		10.40		960,090		8.00		1,200,113		10.00
As of December 31, 2007:
Tier 1 leverage capital
TCF	$	964,467	6.16	%	$	469,914	3.00	%	N.A.		N.A.
TCF National Bank	900,864		5.76		468,806		3.00		$	781,343	5.00	%

Tier 1 risk-based capital
TCF	964,467		8.28		465,931		4.00		698,897		6.00
TCF National Bank	900,864		7.75		464,934		4.00		697,402		6.00

Total risk-based capital
TCF	1,245,808		10.70		931,863		8.00		1,164,829		10.00
TCF National Bank	1,182,196		10.17		929,869		8.00		1,162,336		10.00

N.A. Not Applicable.

At June 30, 2008, TCF, TCF National Bank and TCF National Bank Arizona exceeded their stated regulatory capital requirements and are considered “well-capitalized” under guidelines established by the Federal Reserve Board (“FRB”) and the Office of the Comptroller of the Currency (“OCC”) pursuant to the Federal Deposit Insurance Corporation Improvement Act of 1991.

(10) Employee Benefit Plans

The following tables set forth the net periodic benefit cost included in compensation and employee benefits expense for TCF’s Pension Plan and Postretirement Plan for the three and six months ended June 30, 2008 and 2007.

	Pension Plan
	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2008			2007			2008			2007
Service cost	$	—		$	—		$	—		$	—
Interest cost	733			733			1,467			1,465
Expected return on plan assets	(1,264		)	(1,235		)	(2,529		)	(2,469		)
Recognized actuarial loss	214			500			429			999
Settlement expense	179			350			357			700
Net periodic benefit cost (income)	$	(138	)	$	348		$	(276	)	$	695

	Postretirement Plan
	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2008		2007		2008		2007
Service cost	$	3	$	4	$	6	$	8
Interest cost	135		123		269		246
Amortization of transition obligation	1		26		2		51
Recognized actuarial loss	77		55		155		111
Net periodic benefit cost	$	216	$	208	$	432	$	416

Statement of Financial Accounting Standards No. 158, Employer’s Accounting for Defined Benefit Pension and Other Postretirement Plans (SFAS 158) requires TCF to measure the funded status of the Pension and Postretirement Plans (the Plans) as of its fiscal year end, December 31st. Previously, TCF used September 30th as its measurement date. TCF adopted this requirement effective January 1, 2008 and selected the “15-month” approach under the measurement date transition provisions of SFAS 158. Under this approach, the Plans’ actuaries determine expense for the 15-month period from October 1, 2007 to December 31, 2008, excluding settlement expense. The 15-month expense is then allocated proportionately between amounts recognized as an adjustment to beginning retained earnings, net of tax, and net periodic benefit cost in 2008. TCF recorded a $65 thousand credit to January 1, 2008 retained earnings for adoption of SFAS 158 under this approach.

During the second quarter and first six months of 2008 and 2007, TCF made no contributions to the Pension Plan. TCF is not required to make any contributions to the Pension Plan during 2008. During the second quarter and first six months of 2008, TCF paid $226 thousand and $536 thousand, respectively, for benefits of the Postretirement Plan, compared with $300 thousand and $625 thousand, respectively, for the same 2007 periods.

(11) 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 investment 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 leasing and equipment finance products addressing the financing needs of diverse businesses. In addition, TCF’s bank holding company (“Parent Company”) and corporate functions provide data processing, bank operations and other professional services to the operating segments.

TCF evaluates performance and allocates resources based on the segments’ net income. The business segments follow generally accepted accounting principles as described in the Summary of Significant Accounting Policies in the most recent Annual Report on Form 10-K. TCF generally accounts for inter-segment sales and transfers at cost.

The following tables set forth certain information for TCF’s reportable segments, including a reconciliation of TCF’s consolidated totals. The “other” category in the tables below includes TCF’s parent company and corporate functions.

			Leasing and					Eliminations
			Equipment					and
(In thousands)	Banking		Finance		Other			Reclassifications			Consolidated
At or For the Three Months Ended
June 30, 2008:
Revenues from external customers:
Interest income	$	199,303	$	41,145	$	—		$	—		$	240,448
Non-interest income	108,340		14,080		199			—			122,619
Total	$	307,643	$	55,225	$	199		$	—		$	363,067
Net interest income	$	132,123	$	19,624	$	(185	)	$	—		$	151,562
Provision for credit losses	59,147		3,748		—			—			62,895
Non-interest income	108,340		14,080		36,172			(35,973		)	122,619
Non-interest expense	152,600		16,616		35,486			(35,973		)	168,729
Pre-tax income	28,716		13,340		501			—			42,557
Income tax expense	10,839		6,320		1,696			—			18,855
Net income (loss)	$	17,877	$	7,020	$	(1,195	)	$	—		$	23,702

Goodwill	$	141,245	$	11,354	$	—		$	—		$	152,599
Total assets	$	15,940,572	$	2,438,507	$	136,822		$	(2,055,778	)	$	16,460,123

At or For the Three Months Ended
June 30, 2007:
Revenues from external customers:
Interest income	$	202,256	$	36,069	$	—		$	—		$	238,325
Non-interest income	114,216		15,199		190			—			129,605
Total	$	316,472	$	51,268	$	190		$	—		$	367,930
Net interest income	$	121,715	$	15,892	$	(182	)	$	—		$	137,425
Provision for credit losses	11,155		2,174		—			—			13,329
Non-interest income	114,216		15,199		39,211			(39,021		)	129,605
Non-interest expense	145,773		16,383		39,399			(39,021		)	162,534
Pre-tax income (loss)	79,003		12,534		(370		)	—			91,167
Income tax expense (benefit)	24,852		4,560		(374		)	—			29,038
Net income	$	54,151	$	7,974	$	4		$	—		$	62,129

Goodwill	$	141,245	$	11,354	$	—		$	—		$	152,599
Total assets	$	14,528,185	$	2,071,650	$	128,966		$	(1,751,097	)	$	14,977,704

			Leasing and					Eliminations
			Equipment					and
(In thousands)	Banking		Finance		Other			Reclassifications			Consolidated
At or For the Six Months Ended
June 30, 2008:
Revenues from external customers:
Interest income	$	403,520	$	82,078	$	—		$	—		$	485,598
Non-interest income	223,329		26,218		371			—			249,918
Total	$	626,849	$	108,296	$	371		$	—		$	735,516
Net interest income	$	256,171	$	38,579	$	(359	)	$	—		$	294,391
Provision for credit losses	85,414		7,476		—			—			92,890
Non-interest income	223,329		26,218		72,515			(72,144		)	249,918
Non-interest expense	303,778		33,429		71,942			(72,144		)	337,005
Pre-tax income	90,308		23,892		214			—			114,414
Income tax expense	33,002		10,147		137			—			43,286
Net income	$	57,306	$	13,745	$	77		$	—		$	71,128

Goodwill	$	141,245	$	11,354	$	—		$	—		$	152,599
Total assets	$	15,940,572	$	2,438,507	$	136,822		$	(2,055,778	)	$	16,460,123

At or For the Six Months Ended
June 30, 2007:
Revenues from external customers:
Interest income	$	401,671	$	70,316	$	—		$	—		$	471,987
Non-interest income	243,344		29,201		397			—			272,942
Total	$	645,015	$	99,517	$	397		$	—		$	744,929
Net interest income	$	242,495	$	30,767	$	(360	)	$	—		$	272,902
Provision for credit losses	16,669		1,316		—			—			17,985
Non-interest income	243,344		29,201		78,159			(77,762		)	272,942
Non-interest expense	293,617		32,281		78,598			(77,762		)	326,734
Pre-tax income (loss)	175,553		26,371		(799		)	—			201,125
Income tax expense (benefit)	47,381		9,569		(678		)	—			56,272
Net income (loss)	$	128,172	$	16,802	$	(121	)	$	—		$	144,853

Goodwill	$	141,245	$	11,354	$	—		$	—		$	152,599
Total assets	$	14,528,185	$	2,071,650	$	128,966		$	(1,751,097	)	$	14,977,704

(12) Earnings Per Common Share

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in thousands, except per-share data)	2008			2007			2008			2007
Basic Earnings Per Common Share
Net income	$	23,702		$	62,129		$	71,128		$	144,853
Weighted-average shares outstanding	126,458,128			128,161,549			126,414,470			129,184,177
Restricted stock	(1,660,775		)	(2,480,095		)	(1,693,478		)	(2,510,837		)
Weighted-average common shares outstanding for basic earnings per common share	124,797,353			125,681,454			124,720,992			126,673,340
Basic earnings per common share	$	.19		$	.49		$	.57		$	1.14

Diluted Earnings Per Common Share
Net income	$	23,702		$	62,129		$	71,128		$	144,853
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	124,797,353			125,681,454			124,720,992			126,673,340
Net dilutive effect of:
Restricted stock	304,732			173,833			329,375			160,171
Stock options	15,343			87,984			22,781			93,714
Weighted-average common shares outstanding for diluted earnings per common share	125,117,428			125,943,271			125,073,148			126,927,225
Diluted earnings per common share	$	.19		$	.49		$	.57		$	1.14

All shares of restricted stock are deducted from weighted-average shares outstanding for the computation of basic earnings per common share. Shares of performance-based restricted stock are included in the calculation of diluted earnings per common share, using the treasury stock method, at the beginning of the quarter in which the performance goals have been achieved. All other shares of restricted stock, which vest over specified time periods, and stock options are included in the calculation of diluted earnings per common share, using the treasury stock method.

(13) Comprehensive Income

Comprehensive income is the total of net income and other comprehensive income. The following table summarizes the components of comprehensive income.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In thousands)	2008			2007			2008			2007
Net income	$	23,702		$	62,129		$	71,128		$	144,853
Other comprehensive income (loss):
Unrealized holding losses arising during the period on securities available for sale	(52,319		)	(47,863		)	(23,338		)	(44,644		)
Recognized pension and postretirement actuarial losses, settlement expense and transition obligation	471			931			943			1,861
Pension and postretirement measurement date change	—			—			293			—
Reclassification adjustment for securities gains included in net income	(1,115		)	—			(7,401		)	—
Income tax expense	18,977			16,538			10,572			15,078
Total other comprehensive loss	(33,986		)	(30,394		)	(18,931		)	(27,705		)
Comprehensive (loss) income	$	(10,284	)	$	31,735		$	52,197		$	117,148

(14) Other Expense

Other expense consists of the following.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands)	2008		2007		2008			2007
Card processing and issuance	$	4,664	$	4,617	$	9,334		$	9,056
Deposit account losses	3,455		4,574		7,977			8,869
Foreclosed real estate, net	4,680		1,550		7,215			1,830
Postage and courier	3,379		3,412		6,737			6,924
Telecommunications	3,000		2,946		5,962			5,936
Office supplies	2,254		2,376		4,870			4,889
ATM processing	1,798		2,270		3,489			4,332
Federal deposit insurance and OCC assessments	971		808		1,926			1,613
Decrease in Visa indemnification liability	—		—		(3,766		)	—
Other	17,466		13,978		34,258			28,397
Total other expense	$	41,667	$	36,531	$	78,002		$	71,846

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

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

OVERVIEW

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 had 454 banking offices in Minnesota, Illinois, Michigan, Colorado, Wisconsin, Indiana and Arizona at June 30, 2008.

TCF provides convenient financial services through multiple channels in its primary banking markets. TCF has developed products and services designed to meet the needs of all consumers. The Company focuses on attracting and retaining customers through service and convenience, including branches that are open seven days a week and on most holidays, extensive full-service supermarket branches, automated teller machine (“ATM”) networks and telephone and internet banking. TCF’s philosophy is to generate 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, acquisitions 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 services. The retail banking business includes traditional and supermarket branches, campus banking, Express Teller® ATMs and Visa® cards.

Targeted new branch expansion is a 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, Inc. (“TCF Equipment Finance”), a company that delivers equipment finance solutions to businesses in select markets and Winthrop Resources Corporation (“Winthrop Resources”), a company that primarily leases technology and data processing equipment. TCF’s leasing and equipment finance businesses have equipment installations in all 50 states and, to a limited extent, in foreign countries. In the second quarter of 2008, TCF began development of a new business operation to provide inventory financing to retail businesses in the United States and Canada. TCF expects this new business to begin originating loans in the fourth quarter of 2008.

Historically, TCF has originated education loans for resale. As a result of Federal law changes and general market conditions, TCF will no longer be originating education loans.

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 55.3% of TCF’s total revenue for the three months ended June 30, 2008. Net interest income can change significantly from period to period based on general levels of interest rates, customer prepayment patterns, the mix of interest-earning assets and the mix of interest-bearing and non-interest bearing deposits and borrowings. TCF manages the risk of changes in interest rates on its net interest income through an Asset/Liability Committee and through related interest-rate risk monitoring and management policies.

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 the number of deposit accounts and related transaction activity. Increasing fee and service charge revenue 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 Non-Interest Income” for additional information.

The Company’s Visa debit card program has grown significantly 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 March 31, 2008, 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 the three and six months ended June 30, 2008 and 2007 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 19 cents and 57 cents for the second quarter and first six months of 2008, respectively, compared with 49 cents and $1.14 for the same 2007 periods. Net income was $23.7 million and $71.1 million for the second quarter and first six months of 2008, respectively, compared with $62.1 million and $144.9 million for the same 2007 periods.

The second quarter of 2008 included $1.1 million in pre-tax gains on sales of securities and $5 million of adjustments related to increased state income taxes, for a net after-tax charge of three cents per diluted share. Net income for the second quarter of 2007 included $2.7 million in pre-tax gains on the sales of real estate and $1.9 million of favorable income tax adjustments, for a combined after-tax credit of three cents per diluted share. TCF also recorded $62.9 million of provision for credit losses in the second quarter of 2008, as compared with $13.3 million in the second quarter of 2007.

The first six months of 2008 included an $8.3 million pre-tax gain from Visa’s initial public offering (“IPO”), a $3.8 million pre-tax expense reduction related to a decrease in TCF’s estimated contingent obligation in regard to TCF’s Visa USA litigation indemnification, $7.4 million in pre-tax gains on sales of securities and $5 million of adjustments related to increased state income taxes for a net after-tax credit of six cents per diluted share. The first six months of 2007 included a $31.2 million pre-tax gain on the sale of ten outstate Michigan branches, $2.7 million of pre-tax gains on sales of real estate and $10.4 million of favorable income tax settlements and adjustments for a total after tax credit of 26 cents per diluted share. TCF also recorded $92.9 million of provision for credit losses in the first six months of 2008, as compared with $18 million in the first six months of 2007.

For the second quarter and first six months of 2008, return on average assets was .58% and .88%, respectively, compared with 1.67% and 1.95% for the same 2007 periods. Return on average common equity was 8.57% and 12.85% for the second quarter and first six months of 2008, compared with 24.16% and 28.08% for the same 2007 periods.

Operating Segment Results

See Note 11 of Notes to Consolidated Financial Statements for the financial results of TCF’s operating segments.

BANKING, consisting of deposits, investment products, commercial banking, small business banking, consumer lending and treasury services, reported net income of $17.9 million and $57.3 million for the second quarter and first six months of 2008, respectively, compared with $54.2 million and $128.2 million for

the same 2007 periods. Banking net interest income for the second quarter and first six months of 2008 was $132.1 million and $256.2 million, respectively, up from $121.7 million and $242.5 million for the same 2007 periods.

The provision for credit losses was $59.1 million and $85.4 million for the second quarter and first six months of 2008, respectively, compared with $11.2 million and $16.7 million for the same 2007 periods. The increase in the provision for credit losses was primarily due to higher consumer home equity charge-offs and the resulting portfolio reserve rate increases and higher reserves and charge-offs for commercial loans. Refer to the “Consolidated Provision for Credit Losses” section for further discussion.

Non-interest income totaled $108.3 million for the second quarter of 2008, down 5.1% from $114.2 million for the same 2007 period primarily due to decreases in fees and service charges. Non-interest income totaled $223.3 million for the first six months of 2008, down 8.2% from $243.3 million for the same 2007 period primarily due to a $31.2 million gain on the sale of ten out-state Michigan branches that occurred in the first quarter of 2007, partially offset by an $8.3 million pre-tax gain from Visa’s IPO in 2008 and $7.4 million in pre-tax gains on sales of securities in 2008. Non-interest expense was $152.6 million and $303.8 million for the second quarter and first six months of 2008, respectively, compared with $145.8 million and $293.6 million for the same 2007 periods. The increase in non-interest expense was primarily due to an increase in foreclosed real estate expense due to increased property taxes and higher real estate disposition losses in 2008, costs associated with exiting the Education Lending business and reductions of lending employees.

Income tax expense for the second quarter of 2008 was $10.8 million and included $3.2 million of adjustments related to increased state income taxes. Income tax expense for the second quarter of 2007 was $24.9 million and included $1.9 million of favorable income tax adjustments.

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 lease and equipment finance products. Leasing and equipment finance reported net income of $7 million and $13.7 million for the second quarter and first six months of 2008, respectively, compared with $8 million and $16.8 million for the same 2007 periods. Net interest income for the second quarter and first six months of 2008 was $19.6 million and $38.6 million, compared with $15.9 million and $30.8 million for the same 2007 periods.

The provision for credit losses for this operating segment was $3.7 million and $7.5 million for the second quarter and first six months of 2008, respectively, compared with $2.2 million and $1.3 million for the same 2007 periods, primarily due to increased net charge-offs and reserves for certain loans and leases and a $2.1 million recovery in 2007 of a previously charged-off leveraged lease.

Non-interest income for the second quarter and first six months of 2008 totaled $14.1 million and $26.2 million, respectively, compared with $15.2 million and $29.2 million for the same 2007 periods, primarily due to a decrease in sales-type lease and operating lease revenues. Leasing and equipment finance revenues may fluctuate from period to period based on customer driven factors not entirely within the control of TCF. Non-interest expense totaled $16.6 million and $33.4 million for the second quarter and first six months of 2008, respectively, compared with $16.4 million and $32.3 million for the same 2007 periods.

Income tax expense for the second quarter of 2008 was $6.3 million and included $1.5 million of adjustments related to increased state income taxes. Income tax expense for the second quarter of 2007 was $4.6 million. There were no adjustments to income tax in the second quarter of 2007.

Consolidated Net Interest Income

Net interest income for the second quarter of 2008 was $151.6 million, up from $137.4 million for the second quarter of 2007 and $142.8 million from the first quarter of 2008. Net interest income for the first six months of 2008 was $294.4 million, up from $272.9 million for the same 2007 period. The net interest margin for the second quarter of 2008 was 4.00%, compared with 4.02% for the same 2007 period and 3.84% for the first quarter of 2008.

The increase in net interest income from the second quarter of 2007 was primarily attributable to a $1.5 billion, or 10.9%, increase in average interest-earning assets, partially offset by a two basis point reduction in net interest margin. The increase in net interest income from the first quarter of 2008 was primarily due to a $296.1 million increase in average interest-earning assets and a 16 basis point increase in net interest margin. The 16 basis point increase in net interest margin from the first quarter of 2008 was primarily due to declines in rates paid on deposits and borrowings, as a result of generally lower market interest rates, exceeding the market driven decline in yields on interest-earning assets, partially due to loans at their contractual interest rate floor. The average balance of consumer home equity loans that were at their contractual interest rate floor was $1.2 billion for the second quarter of 2008, compared with $645 million for the first quarter of 2008. In addition, the net interest margin for the second quarter of 2008, as compared with the first quarter of 2008, benefited from increased lower cost deposits as a percentage of total deposits and borrowings.

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 consumer preferences continue to change over time, TCF is currently liability sensitive as measured by its interest rate gap (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.

The following table summarizes TCF’s average balances, interest, dividends and yields and rates on major categories of TCF’s interest-earning assets and interest-bearing liabilities for the three months ended June 30, 2008 and 2007.

	Three Months Ended June 30,
	2008							2007
						Average							Average
						Yields							Yields
		Average				and			Average				and
(Dollars in thousands)		Balance		Interest (1)		Rates (2)			Balance		Interest (1)		Rates (2)
Assets:
Investments and other		$	148,366	$	1,427	3.86	%		$	130,977	$	1,557	4.77	%
Securities available for sale (3)		2,184,580		28,858		5.28			1,967,524		26,665		5.42
Education loans held for sale		123,457		1,756		5.72			153,566		3,365		8.79
Loans and leases:
Consumer home equity:
Fixed-rate		5,084,761		86,279		6.82			4,614,322		80,127		6.97
Variable-rate (4)		1,702,825		26,501		6.26			1,421,390		31,181		8.80
Consumer - other		46,492		994		8.60			41,708		1,057		10.16
Total consumer home equity and other		6,834,078		113,774		6.70			6,077,420		112,365		7.42
Commercial real estate:
Fixed- and adjustable-rate		2,062,983		31,868		6.21			1,750,690		28,036		6.42
Variable-rate (4)		593,409		7,436		5.04			598,918		11,685		7.83
Total commercial real estate		2,656,392		39,304		5.95			2,349,608		39,721		6.78
Commercial business:
Fixed- and adjustable-rate		157,740		2,433		6.20			165,780		2,675		6.47
Variable-rate (4)		371,730		4,493		4.86			391,354		7,317		7.50
Total commercial business		529,470		6,926		5.26			557,134		9,992		7.19
Leasing and equipment finance		2,229,467		41,145		7.38			1,879,958		36,069		7.67
Subtotal		12,249,407		201,149		6.60			10,864,120		198,147		7.31
Residential real estate		496,367		7,258		5.86			587,400		8,591		5.85
Total loans and leases (5)		12,745,774		208,407		6.57			11,451,520		206,738		7.24
Total interest-earning assets		15,202,177		240,448		6.35			13,703,587		238,325		6.97
Other assets (6)		1,171,677							1,148,033
Total assets		$	16,373,854						$	14,851,620
Liabilities and Stockholders’ Equity:
Non-interest bearing deposits:
Retail		$	1,464,237						$	1,492,429
Small business		577,510							586,711
Commercial and custodial		238,779							199,226
Total non-interest bearing deposits		2,280,526							2,278,366
Interest-bearing deposits:
Premier checking		989,512		2,279		.93			1,070,397		7,943		2.98
Other checking		894,436		510		.23			834,405		729		.35
Subtotal		1,883,948		2,789		.60			1,904,802		8,672		1.83
Premier savings		1,518,703		8,294		2.20			1,109,341		11,672		4.22
Other savings		1,365,141		2,360		.70			1,300,857		3,733		1.15
Subtotal		2,883,844		10,654		1.49			2,410,198		15,405		2.56
Money market		609,369		2,192		1.45			604,217		4,355		2.89
Subtotal		5,377,161		15,635		1.17			4,919,217		28,432		2.32
Certificates of deposit		2,471,216		21,319		3.47			2,525,886		29,810		4.73
Total interest-bearing deposits		7,848,377		36,954		1.89			7,445,103		58,242		3.14
Total deposits		10,128,903		36,954		1.47			9,723,469		58,242		2.40
Borrowings:
Short-term borrowings		363,302		1,977		2.19			196,169		2,553		5.22
Long-term borrowings		4,419,821		49,955		4.54			3,566,883		40,105		4.51
Total borrowings		4,783,123		51,932		4.37			3,763,052		42,658		4.55
Total interest-bearing liabilities		12,631,500		88,886		2.83			11,208,155		100,900		3.61
Total deposits and borrowings		14,912,026		88,886		2.40			13,486,521		100,900		3.00
Other liabilities		355,187							336,676
Total liabilities		15,267,213							13,823,197
Stockholders’ equity		1,106,641							1,028,423
Total liabilities and stockholders’ equity		$	16,373,854						$	14,851,620
Net interest income and margin				$	151,562	4.00	%				$	137,425	4.02	%

(1) Tax-exempt income was not significant and thus yields on interest-earning assets and net interest margin have not been presented on a tax equivalent basis. Tax-exempt income of $446,000 and $428,000 was recognized during the three months ended June 30, 2008 and 2007, respectively.

(2) Annualized.

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

(4) Certain variable-rate loans have contractual interest rate floors.

(5) Average balances of loans and leases includes non-accrual loans and leases, and are presented net of unearned income.

(6) Includes operating leases.

	Six Months Ended June 30,
	2008							2007
						Average							Average
						Yields							Yields
		Average				and			Average				and
(Dollars in thousands)		Balance		Interest (1)		Rates (2)			Balance		Interest (1)		Rates (2)
Assets:
Investments and other		$	149,513	$	3,069	4.12	%		$	180,839	$	4,363	4.86	%
Securities available for sale (3)		2,162,765		57,137		5.28			1,914,723		51,770		5.41
Education loans held for sale		169,445		5,208		6.18			177,611		7,511		8.53
Loans and leases:
Consumer home equity:
Fixed-rate		5,034,086		172,217		6.88			4,545,305		156,803		6.96
Variable-rate (4)		1,652,929		54,695		6.65			1,431,933		62,589		8.81
Consumer - other		45,250		1,974		8.77			41,780		2,078		10.03
Total consumer home equity and other		6,732,265		228,886		6.84			6,019,018		221,470		7.42
Commercial real estate:
Fixed- and adjustable-rate		2,019,163		63,112		6.29			1,741,713		55,272		6.40
Variable-rate (4)		592,240		16,214		5.51			621,855		23,966		7.77
Total commercial real estate		2,611,403		79,326		6.11			2,363,568		79,238		6.76
Commercial business:
Fixed- and adjustable-rate		167,715		5,188		6.22			164,405		5,281		6.48
Variable-rate (4)		368,864		9,866		5.38			391,234		14,564		7.51
Total commercial business		536,579		15,054		5.64			555,639		19,845		7.20
Leasing and equipment finance		2,185,081		82,078		7.51			1,859,077		70,316		7.56
Subtotal		12,065,328		405,344		6.75			10,797,302		390,869		7.29
Residential real estate		507,079		14,840		5.86			601,109		17,474		5.82
Total loans and leases (5)		12,572,407		420,184		6.71			11,398,411		408,343		7.21
Total interest-earning assets		15,054,130		485,598		6.48			13,671,584		471,987		6.95
Other assets (6)		1,200,324							1,149,249
Total assets		$	16,254,454						$	14,820,833
Liabilities and Stockholders’ Equity:
Non-interest bearing deposits:
Retail		$	1,439,810						$	1,512,180
Small business		571,329							591,559
Commercial and custodial		219,701							200,534
Total non-interest bearing deposits		2,230,840							2,304,273
Interest-bearing deposits:
Premier checking		999,157		6,336		1.28			1,071,940		16,149		3.04
Other checking		866,120		1,184		.27			829,486		1,263		.31
Subtotal		1,865,277		7,520		.81			1,901,426		17,412		1.85
Premier savings		1,496,350		20,075		2.70			1,089,809		22,991		4.25
Other savings		1,308,096		5,367		.83			1,307,627		7,327		1.13
Subtotal		2,804,446		25,442		1.82			2,397,436		30,318		2.55
Money market		599,380		5,164		1.73			607,235		8,704		2.89
Subtotal		5,269,103		38,126		1.46			4,906,097		56,434		2.32
Certificates of deposit		2,485,789		47,556		3.84			2,519,895		58,963		4.71
Total interest-bearing deposits		7,754,892		85,682		2.22			7,425,992		115,397		3.13
Total deposits		9,985,732		85,682		1.73			9,730,265		115,397		2.39
Borrowings:
Short-term borrowings		381,162		5,587		2.95			142,347		3,725		5.28
Long-term borrowings		4,417,226		99,938		4.55			3,582,869		79,963		4.50
Total borrowings		4,798,388		105,525		4.42			3,725,216		83,688		4.53
Total interest-bearing liabilities		12,553,280		191,207		3.06			11,151,208		199,085		3.16
Total deposits and borrowings		14,784,120		191,207		2.60			13,455,481		199,085		2.98
Other liabilities		363,429							333,536
Total liabilities		15,147,549							13,789,017
Stockholders’ equity		1,106,905							1,031,816
Total liabilities and stockholders’ equity		$	16,254,454						$	14,820,833
Net interest income and margin				$	294,391	3.92	%				$	272,902	4.01	%

(1) Tax-exempt income was not significant and thus yields on interest-earning assets and net interest margin have not been presented on a tax equivalent basis. Tax-exempt income of $994,000 and $797,000 was recognized during the six months ended June 30, 2008 and 2007, respectively.

(2) Annualized.

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

(4) Certain variable-rate loans have contractual interest rate floors.

(5) Average balances of loans and leases includes non-accrual loans and leases, and are presented net of unearned income.

(6) Includes operating leases.

Consolidated Provision for Credit Losses

TCF recorded provision expense of $62.9 million and $92.9 million in the second quarter and first six months of 2008, respectively, compared with $13.3 million and $18 million for the same 2007 periods. The increase in the provision for credit losses for the second quarter and first six months of 2008 is primarily due to higher consumer home equity net charge-offs and the resulting portfolio reserve rate increases and higher reserves and net charge-offs for commercial loans, primarily in Michigan. Home values continued to decline in all of TCF’s markets and financial stress on consumers continues to increase, especially in Minnesota and Michigan. These trends adversely impacted consumer loans as the number of credit loss incidents and the average severity of individual losses increased. Net loan and lease charge-offs were $26.6 million, or .84% (annualized) and $40.2 million, or .64% (annualized) of average loans and leases, in the second quarter and first six months of 2008, compared with $7 million, or .24% (annualized) and $9.7 million, or .17% (annualized) for the same 2007 periods. Consumer home equity net charge-offs for the second quarter and first six months of 2008 were $13.9 million and $22.9 million, respectively, compared with $4.5 million and $7.8 million for the same 2007 periods. The higher consumer home equity net charge-offs were primarily due to the residential real estate market conditions in Minnesota and Michigan. 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, delinquencies in the loan and lease portfolio, value of collateral, general economic conditions and management’s assessment of credit risk in the current loan and lease portfolio. Also see “Consolidated Financial Condition Analysis — Allowance for Loan and Lease Losses.”

Consolidated Non-Interest Income

Non-interest income is a significant source of revenue for TCF and is an important factor in TCF’s results of operations. Providing a wide range of retail banking services is an integral component of TCF’s business philosophy and a major strategy for generating additional non-interest income. Total non-interest income was $122.6 million and $249.9 million for the second quarter and first six months of 2008, respectively, compared with $129.6 million and $272.9 million for the same 2007 periods.

Fees and Service Charges

Fees and service charges totaled $68 million and $131.5 million for the second quarter and first six months of 2008, compared with $71.7 million and $133.8 million for the same 2007 periods. The declines are primarily due to decreased deposit service fees resulting from higher per account average balances.

Card Revenues

Card revenues totaled $26.8 million for the second quarter of 2008, up 7.8% over the same 2007 period. For the first six months of 2008, card revenue totaled $51.6 million, up 7.2% over the same 2007 period. These increases were primarily due to increased sales volume primarily as a result of increases in customer transactions.

	Three Months Ended
	June 30,						Change
(Dollars in thousands)	2008			2007			Amount			%
Average active card users	814,229			814,998			(769		)	(0.1	)
Average number of transactions per card per month	21.0			19.9			1.1			5.5
Sales volume	$	1,901,203		$	1,783,319		$	117,884		6.6
Average transaction size (in dollars)	$	37		$	37		$	—		—
Average interchange rate	1.33		%	1.33		%				—	bps

ATM Revenue

For the second quarter and first six months of 2008, ATM revenue was $8.3 million and $16.2 million, respectively, compared with $9.3 million and $18.1 million for the same 2007 periods. The declines in ATM revenue was primarily attributable to a continued decline in fees charged to TCF customers for the use of non-TCF ATM machines and by changes in customer ATM usage behavior.

Leasing and Equipment Finance Revenue

Leasing and equipment finance revenues totaled $14.1 million and $26.2 million for the second quarter and first six months of 2008, respectively, compared with $15.2 million and $29.2 million for the same 2007 period. The decreases in leasing and equipment finance revenues were primarily due to lower sales-type lease revenue and operating lease revenue. Leasing and equipment finance revenue may fluctuate from period to period based on customer driven factors not entirely within the control of TCF.

Visa Share Redemption

During the first quarter of 2008, Visa completed its IPO. As part of the IPO, Visa redeemed a portion of the shares held by Visa USA members for cash. TCF received $8.3 million from this redemption and recorded a gain. As of June 30, 2008, TCF holds 308,219 shares of Visa Inc. Class B shares with no book value that are restricted from sale, other than to other Visa members, and are subject to dilution as a result of TCF’s indemnification obligation. TCF remains obligated to indemnify Visa under its bylaws and a retrospective responsibility plan for losses in connection with certain covered litigation.

Gains on Sales of Securities Available for Sale

Gains on sales of securities available for sale were $1.1 million for the second quarter of 2008 on sales of $124.6 million of mortgage-backed securities. For the first six months of 2008, gains on sales of securities available for sale were $7.4 million on sales of $922 million of mortgage-backed securities and $174.9 million of treasury bills. There were no such sales in the same 2007 periods.

Gains on Sales of Branches and Real Estate

Gains on sales of branches and real estate were $2.7 million and $33.9 million for the second quarter and first six months of 2007, respectively, compared with no such sales in the same 2008 periods. During the first quarter of 2007, TCF sold the deposits and facilities of ten out-state branches in Michigan and recognized a $31.2 million gain.

Consolidated Non-Interest Expense

Non-interest expense totaled $168.7 million for the second quarter of 2008, up $6.2 million, or 3.8%, from $162.5 million for the same 2007 period. For the first six months of 2008, non-interest expense totaled $337 million, up $10.3 million, or 3.1%, from $326.7 million for the same 2007 period.

Compensation and Employee Benefits

Compensation and employee benefits expense continue to be well controlled and totaled $84.3 million and $173 million for the second quarter and first six months of 2008, respectively, down from $86.7 million and $174.8 million for the same 2007 periods.

Occupancy and Equipment

Occupancy and equipment expense totaled $31.2 million and $63.6 million for the second quarter and first six months of 2008, compared with $29.3 million and $59.8 million for the same 2007 periods. The increase in occupancy and equipment expense during the second quarter of 2008 was primarily due to costs associated with branch expansion and exit costs associated with the 2008 closure of 12 Colorado supermarket branches.

Other Expense

Other expense in the quarter increased $5.1 million, or 14.1%, from the second quarter of 2007, primarily due to a $3.1 million increase in foreclosed real estate expense resulting from increased property taxes and higher real estate disposition losses in 2008, costs associated with exiting the Education Lending business and reductions of lending employees. Year-to-date, other expense, excluding the reduction in the Visa indemnification expense, increased $9.9 million, or 13.8%, from the first six months of 2007, primarily due to a $5.4 million increase in foreclosed real estate expense resulting from increased property taxes and higher real estate disposition losses in 2008 and a $555 thousand recovery on the redemption of a commercial real estate property in the first quarter of 2007.

As part of Visa’s IPO in the first quarter of 2008, Visa set aside a cash escrow fund for future settlement of covered litigation. As a result, TCF recorded a $3.8 million reduction in its contingent indemnification obligation in the first quarter of 2008. At June 30, 2008, TCF’s estimated remaining Visa contingent indemnification obligation was $3.9 million.

Income Taxes

TCF recorded income tax expense of $18.9 million and $43.3 million for the second quarter and first six months of 2008, respectively, or 44.31% and 37.83%, respectively, of income before income tax expense, compared with $29 million and $56.3 million, respectively, or 31.85% and 27.98%, respectively, of income before income tax expense, for the comparable 2007 periods. The second quarter of 2008 income tax expense includes a $2.2 million year-to-date increase in income tax expense and a $2.8 million increase in deferred income taxes related to changes in state income taxes, primarily in Minnesota. The second quarter of 2007 includes a $1.9 million reduction in income tax expense related to favorable developments in uncertain tax positions. The first six months of 2007 also includes an $8.5 million reduction of income tax expense related to a favorable settlement with the Internal Revenue Service.

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. The taxation of REITs and FOCs continues to be the subject of federal and state audits, litigation with state taxing authorities and tax policy debates by various state legislatures. Illinois passed legislation in 2007 that will reduce or eliminate TCF’s REIT and FOC tax benefits in 2009. Minnesota passed legislation in the second quarter of 2008 that eliminates TCF’s REIT and FOC benefit effective for 2008.

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 reporting bases of assets and liabilities (temporary differences), estimates of amounts due or owed such as the timing of reversal of temporary differences and current financial accounting standards. Additionally, there can be no assurance that estimates and interpretations used in determining income tax liabilities may not be challenged by federal and state taxing authorities. Actual results could differ significantly from the estimates and tax law interpretations used in determining the current and deferred income tax liabilities.

In addition, under generally accepted accounting principles, deferred income tax assets and liabilities are recorded at the 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. Also, if current income tax rates change, the impact on the annual effective income tax rate is applied year-to-date in the period of enactment.

CONSOLIDATED FINANCIAL CONDITION ANALYSIS

Securities Available for Sale

The Company purchased $1.4 billion and $301.4 million of securities available for sale during the first six months of 2008 and 2007, respectively. TCF sold $1.1 billion of securities available for sale during the first six months of 2008, compared with no such sales in the same 2007 period. At June 30, 2008, the unrealized pre-tax loss on TCF’s securities available for sale portfolio was $47.1 million, compared with a pre-tax loss of $16.4 million at December 31, 2007, primarily due to changes in long-term market interest rates.

Loans and Leases

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

	At			At
	June 30,			December 31,			Percentage
(Dollars in thousands)	2008			2007			Change
Consumer home equity and other:
Home equity:
First mortgage lien	$	4,404,117		$	4,178,961		5.4	%
Junior lien	2,446,982			2,344,113			4.4
Total consumer home equity	6,851,099			6,523,074			5.0
Other	68,477			67,557			1.4
Total consumer home equity and other	6,919,576			6,590,631			5.0
Commercial:
Commercial real estate:
Permanent	2,442,966			2,280,204			7.1
Construction and development	284,602			277,126			2.7
Total commercial real estate	2,727,568			2,557,330			6.7
Commercial business	556,176			558,325			(0.4	)
Total commercial	3,283,744			3,115,655			5.4
Leasing and equipment finance (1):
Equipment finance loans	680,027			604,185			12.6
Lease financings:
Direct financing leases	1,694,514			1,611,881			5.1
Sales-type leases	23,629			26,657			(11.4	)
Lease residuals	47,605			41,678			14.2
Unearned income and deferred costs	(182,344		)	(180,058		)	(1.3	)
Total lease financings	1,583,404			1,500,158			5.5
Total leasing and equipment finance	2,263,431			2,104,343			7.6
Total consumer, commercial and leasing and equipment finance	12,466,751			11,810,629			5.6
Residential real estate	485,795			527,607			(7.9	)
Total loans and leases	$	12,952,546		$	12,338,236		5.0

(1) Operating leases of $63.9 million at June 30, 2008 and $71.1 million at December 31, 2007 are included as a component of Other Assets on the Consolidated Statements of Financial Condition.

At June 30, 2008, approximately 27% of TCF’s consumer and commercial loans consisted of variable-rate loans, compared with 26% at December 31, 2007. Variable-rate consumer loans have interest rates tied to the prime rate, while variable-rate commercial loans (consisting of commercial real estate and commercial business loans) have interest rates tied to either the prime rate or LIBOR. In addition, to the extent these loans have interest rate floors, a decrease in interest rates may not result in a change in the interest rate on the variable-rate loan. At July 1, 2008, $1.2 billion of variable-rate consumer home equity loans were at their contractual interest rate floor, compared with $388 million at January 1, 2008. Substantially all leasing and equipment finance loans have fixed interest rates. All residential real estate loans have fixed or adjustable interest rates.

Approximately 77% of the consumer home equity portfolio at June 30, 2008 consisted of closed-end loans, compared with 78% at December 31, 2007. In addition, approximately 26% of the consumer home equity portfolio at June 30, 2008, carries a contractual variable interest rate tied to the prime rate, compared with 24% at December 31, 2007. Of these variable-rate consumer home equity loans, approximately 68% were at

their contractual interest rate floor at June 30, 2008, compared with 24% at December 31, 2007. TCF’s consumer home equity lines of credit require regular payments of interest and do not require regular payments of principal. Consumer home equity lines of credit outstanding were $1.6 billion at June 30, 2008, compared with $1.4 billion at December 31, 2007. TCF expects consumer home equity loan growth to slow during the second half of 2008.

TCF continues to expand its commercial business and commercial real estate lending activity generally 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 at June 30, 2008, were secured either by real estate or other business assets. At June 30, 2008, approximately 93% of TCF’s commercial real estate loans outstanding were secured by real estate located in its primary markets. Included in TCF’s commercial loan portfolio as of June 30, 2008, are approximately $100 million of loans to residential home builders, with approximately $43 million of that amount to customers in Michigan. These amounts do not include loans to customers that may have indirect exposure to the home building industry.

The leasing and equipment finance backlog of approved transactions was $317.7 million at June 30, 2008, up from $292.5 million at December 31, 2007.

Allowance for Loan and Lease Losses

Credit risk is the risk of loss from customer default on a loan or lease. TCF has a process to identify and manage its credit risk. The process includes initial credit review and approval, periodic monitoring to measure compliance with credit agreements and internal credit policies, monitoring changes in the risk ratings of loans and leases, identification of problem loans and leases and procedures for the collection of problem loans and leases. The risk of loss is difficult to quantify and is subject to fluctuations in collateral values, general economic conditions and other factors. The determination of the allowance for loan and lease losses is a critical accounting estimate which involves management’s judgment on a number of factors such as net charge-offs, delinquencies in the loan and lease portfolio, general economic conditions and management’s assessment of credit risk inherent in the current loan and lease portfolio. The Company considers the allowance for loan and lease losses of $133.6 million appropriate to cover losses incurred in the loan and lease portfolios as of June 30, 2008. 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, a continued decline in commercial or residential real estate values in TCF’s markets and continued financial stress on consumers would have an adverse impact on the current adequacy of the allowance for loan and lease losses by increasing credit risk and the risk of potential loss.

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 underlying loans 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 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 unsecured loans or loans secured by other property primarily due to state real estate foreclosure laws.

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

	At or For the Three						At or For the Six
	Months Ended June 30,						Months Ended June 30,
(Dollars in thousands)	2008			2007			2008			2007
Balance at beginning of period	$	97,390		$	60,483		$	80,942		$	58,543
Charge-offs	(29,902		)	(10,749		)	(47,724		)	(19,981		)
Recoveries	3,254			3,746			7,529			10,262
Net charge-offs	(26,648		)	(7,003		)	(40,195		)	(9,719		)
Provision for credit losses	62,895			13,329			92,890			17,985
Balance at end of period	$	133,637		$	66,809		$	133,637		$	66,809

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. The total allowance for loan and lease losses is generally available to absorb losses from any segment of the portfolio. 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.

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

	At June 30, 2008						At December 31, 2007
	Allowance for				Allowance		Allowance for				Allowance
	Loan and		Total Loans		as a % of		Loan and		Total Loans		as a % of
(Dollars in thousands)	Lease Losses		and Leases		Balance		Lease Losses		and Leases		Balance
Consumer home equity	$	71,343	$	6,851,099	1.04	%	$	30,951	$	6,523,074	.47	%
Consumer other	2,461		68,477		3.59		2,059		67,557		3.05
Total consumer home equity and other	73,804		6,919,576		1.07		33,010		6,590,631		.50
Commercial real estate	34,790		2,727,568		1.28		25,891		2,557,330		1.01
Commercial business	7,733		556,176		1.39		7,077		558,325		1.27
Total commercial	42,523		3,283,744		1.29		32,968		3,115,655		1.06
Leasing and equipment finance	16,619		2,263,431		.73		14,319		2,104,343		.68
Residential real estate	691		485,795		.14		645		527,607		.12
Total allowance balance	$	133,637	$	12,952,546	1.03		$	80,942	$	12,338,236	.66

The increase in the allowance for commercial real estate was primarily due to increases in reserves for certain loans in Michigan.

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

	Three Months Ended
	June 30, 2008				June 30, 2007
			% of Average				% of Average
	Net		Loans and		Net		Loans and
(Dollars in thousands)	Charge-offs		Leases (1)		Charge-offs		Leases (1)
Consumer home equity
First mortgage lien	$	6,692	.61	%	$	2,137	.22	%
Junior lien	7,205		1.19		2,364		.44
Total consumer home equity	13,897		.82		4,501		.30
Consumer other	1,525		N.M.		1,075		N.M.
Total consumer home equity and other	15,422		.90		5,576		.37
Commercial real estate	5,736		.86		—		—
Commercial business	2,308		1.74		43		.03
Total commercial	8,044		1.01		43		.01
Leasing and equipment finance	3,071		.55		1,362		.29
Residential real estate	111		.09		22		.01
Total	$	26,648	.84		$	7,003	.24
(1) Annualized.
N.M. Not Meaningful.

	Six Months Ended
	June 30, 2008				June 30, 2007
			% of Average				% of Average
	Net		Loans and		Net		Loans and
(Dollars in thousands)	Charge-offs		Leases (1)		Charge-offs		Leases (1)
Consumer home equity
First mortgage lien	$	10,731	.50	%	$	3,550	.18	%
Junior lien	12,179		1.02		4,213		.40
Total consumer home equity	22,910		.69		7,763		.26
Consumer other	2,720		N.M.		788		N.M.
Total consumer home equity and other	25,630		.76		8,551		.28
Commercial real estate	6,202		.47		403		.03
Commercial business	2,905		1.08		191		.07
Total commercial	9,107		.58		594		.04
Leasing and equipment finance	5,176		.47		524		.06
Residential real estate	282		.11		50		.02
Total	$	40,195	.64		$	9,719	.17
(1) Annualized.
N.M. Not Meaningful.

Consumer home equity net charge-offs for the second quarter and first six months of 2008 increased $9.4 million and $15.1 million, respectively, compared with the second quarter and first six months of 2007. Commercial real estate net charge-offs for the second quarter and first six months of 2008 increased $5.7 million and $5.8 million, respectively, compared with the second quarter and first six months of 2007. The increase in consumer home equity and commercial real estate net charge-offs were primarily due to the continuing deterioration of the housing markets, increasing financial stress on consumers and weakening economic conditions.

Non-Performing Assets

Non-performing assets consist of non-accrual loans and leases and other real estate owned. Approximately 55% of non-performing assets at June 30, 2008 consisted of, or were secured by, residential real estate.

Non-performing assets are summarized in the following table.

	At			At
	June 30,			December 31,
(Dollars in thousands)	2008			2007			Change
Non-accrual loans and leases:
Consumer home equity
First mortgage lien	$	39,780		$	20,776		$	19,004
Junior lien	9,654			5,391			4,263
Total consumer home equity	49,434			26,167			23,267
Consumer other	287			6			281
Total consumer home equity and other	49,721			26,173			23,548
Commercial real estate	38,404			19,999			18,405
Commercial business	1,306			2,658			(1,352		)
Total commercial	39,710			22,657			17,053
Leasing and equipment finance	12,820			8,050			4,770
Residential real estate	2,996			2,974			22
Total non-accrual loans and leases	105,247			59,854			45,393
Other real estate owned:
Residential real estate	35,269			28,752			6,517
Commercial real estate	19,843			17,013			2,830
Total other real estate owned	55,112			45,765			9,347
Total non-performing assets	$	160,359		$	105,619		$	54,740
Non-performing assets as a percentage of:
Net loans and leases	1.25		%	.86		%	39		bps
Total assets	.97			.66			31

The increase in non-accrual loans and leases from December 31, 2007 was primarily due to an increase in consumer non-accrual loans and commercial real estate non-accrual loans. Other real estate owned increased $9.3 million from December 31, 2007, primarily due to increased residential properties.

Non-accrual loans are expected to continue to increase, especially for first mortgage lien positions, during the remainder of the year. This expectation is primarily based on the length of the foreclosure process, particularly in Illinois, and the outlook for the housing market.

Impaired Loans

Impaired loans are summarized in the following table.

	At		At
	June 30,		December 31,
(Dollars in thousands)	2008		2007		Change
Non-accrual loans:
Consumer home equity	$	7,934	$	967	$	6,967
Commercial real estate	38,404		19,999		18,405
Commercial business	1,306		2,658		(1,352		)
Total commercial	39,710		22,657		17,053
Leasing and equipment finance	3,734		2,113		1,621
Subtotal	51,378		25,737		25,641
Accruing restructured consumer home equity loans	24,722		4,861		19,861
Total impaired loans	$	76,100	$	30,598	$	45,502

The increase in impaired loans from December 31, 2007 was primarily due to an $18.4 million increase in commercial real estate non-accrual loans and an increase of $19.9 million of restructured consumer home equity loans that are accruing (troubled debt restructurings). There were $22 million and $4.6 million of accruing restructured loans less than 90 days past due as of June 30, 2008 and December 31, 2007, respectively. The allowance for loan and lease losses for impaired loans was $10.3 million at June 30, 2008, compared with $2.7 million at December 31, 2007. The average balance of total impaired loans during the three months ended June 30, 2008 was $55.2 million, compared with $25.3 million during the three months ended December 31, 2007.

Past Due Loans and Leases

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

	At June 30, 2008				At December 31, 2007
	Principal		Percentage of		Principal		Percentage of
(Dollars in thousands)	Balances		Loans and Leases		Balances		Loans and Leases
Accruing loans and leases delinquent for:
30-59 days	$	50,209	.39	%	$	46,748	.38	%
60-89 days	42,434		.33		20,445		.17
90 days or more	28,180		.22		15,384		.12
Total	$	120,823	.94	%	$	82,577	.67	%

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.

	At June 30, 2008				At December 31, 2007
	Principal		Percentage of		Principal		Percentage of
(Dollars in thousands)	Balances		Portfolio		Balances		Portfolio
Consumer home equity
First mortgage lien	$	51,081	1.17	%	$	31,784	.76	%
Junior lien	14,818		.61		12,289		.53
Total consumer home equity	65,899		.97		44,073		.68
Consumer other	437		.64		377		.56
Total consumer home equity and other	66,336		.97		44,450		.68
Commercial real estate	17,877		.66		11,382		.45
Commercial business	2,167		.39		1,071		.19
Total commercial	20,044		.62		12,453		.40
Leasing and equipment finance	21,982		.98		15,691		.75
Residential real estate	12,461		2.58		9,983		1.90
Total	$	120,823	.94	%	$	82,577	.67	%

Potential Problem Loans and Leases

In addition to the non-performing assets, there were $191.8 million of loans and leases at June 30, 2008, for which management has concerns regarding the ability of the borrowers to meet existing repayment terms, up from $60.1 million at December 31, 2007. The increase in potential problem loans and leases is primarily due to an increase in commercial loans that were downgraded due to the borrower’s exposure to the housing market, not their ability to repay. Two of the loans that were downgraded due to exposure to the housing market were made to companies of a non-executive director of TCF. Potential problem loans and leases are primarily classified for regulatory purposes as substandard and reflect the distinct possibility, but not probability, that the Company will not be able to collect all amounts due according to the contractual terms of the loan or lease agreement. Although these loans and leases have been identified as potential problem loans and leases, they may never become delinquent, non-performing or impaired. Additionally, these loans and leases are generally secured by commercial or residential 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.

Potential problem loans and leases are summarized as follows.

	At June 30, 2008					At December 31, 2007
	Principal		Percentage of			Principal		Percentage of
(Dollars in thousands)	Balances		Portfolio			Balances		Portfolio
Consumer home equity	$	24,722	.36	%		$	4,861	.07	%
Commercial real estate	100,288		3.68			31,511		1.23
Commercial business	49,809		8.96			8,695		1.56
Leasing and equipment finance	16,967		.75			15,015		.71
Total	$	191,786	1.54		��	$	60,082	.51

Deposits

Checking, savings and money market deposits are an important source of low-cost funds and fee income for TCF. Deposits increased in all major categories and totaled $10.1 billion at June 30, 2008, up from $9.6 billion at December 31, 2007. TCF’s weighted-average rate for deposits, including non-interest bearing deposits, was 1.33% at June 30, 2008, compared with 2.18% at December 31, 2007. The decrease in the weighted-average rate for deposits was due to pricing decisions made by management as a result of declining interest rates during the first six months of 2008.

Branches

During the second quarter of 2008, TCF opened four new branches, consisting of two traditional branches and two supermarket branches. TCF also closed and consolidated one traditional branch and two supermarket branches into nearby branches to improve operating efficiencies.

During the remainder of 2008, TCF plans to open four additional branches, consisting of one traditional branch and three supermarket branches. To improve the customer experience and enhance deposit growth, TCF intends to relocate three traditional branches to improved locations and facilities and to remodel 19 supermarket branches during the remainder of 2008. As part of improving operating efficiencies, TCF closed and consolidated two Colorado supermarket branches into nearby traditional branches in the second quarter of 2008. Ten additional Colorado supermarket branches have been closed and consolidated in July, 2008.

Additional information regarding the results of TCF’s new branches opened since January 1, 2003 is displayed in the table below.

	At June 30,						Increase
(Dollars in thousands)	2008			2007			(Decrease)			% Change
Number of new branches
Traditional	75			66			9			13.6	%
Supermarket	36			32			4			12.5
Campus	10			9			1			11.1
Total	121			107			14			13.1
Percent of total branches	26.7		%	24.0		%
Deposits:
Checking	$	311,926		$	244,861		$	67,065		27.4	%
Savings	347,239			239,313			107,926			45.1
Money market	45,332			32,596			12,736			39.1
Subtotal	704,497			516,770			187,727			36.3
Certificates of deposits	324,457			334,286			(9,829		)	(2.9	)
Total deposits	$	1,028,954		$	851,056		$	177,898		20.9
Total banking fees and other revenue (quarter ended)	$	16,275		$	13,575		$	2,700		19.9

Borrowings

Borrowings totaled $4.9 billion at June 30, 2008, down $45.6 million from December 31, 2007. The weighted-average rate on borrowings was 4.35% at June 30, 2008, compared with 4.51% at December 31, 2007. Historically, TCF has borrowed primarily from the FHLB, from institutional sources under repurchase agreements and from other sources. At June 30, 2008, TCF had $2.4 billion in unused capacity at the FHLB of Des Moines and $1.6 billion of active, unsecured federal funds purchased lines which are not contractually committed. See Note 5 of Notes to Consolidated Financial Statements for more information on TCF’s long-term borrowings.

TCF Financial Corporation (parent company only) has an unsecured $50 million line of credit that matures in April 2009. This line of credit contains certain covenants common to such agreements. TCF is in compliance with its covenants under the credit agreement. The interest rate on the line of credit is based on either the prime rate or LIBOR. TCF has the option to select the interest rate index and term for advances on the line of credit. The line of credit may be used for appropriate corporate purposes. TCF had $6.5 million outstanding on its bank line of credit at June 30, 2008, compared with $9.5 million at December 31, 2007.

Contractual Obligations and Commitments

TCF has certain obligations and commitments to make future payments under contracts. At June 30, 2008, the aggregate contractual obligations (excluding bank deposits) and commitments are as follows.

(In thousands)	Payments Due by Period
			Less than		1-3		4-5		After 5
Contractual Obligations	Total		1 year		Years		Years		Years
Total borrowings (1)	$	4,927,799	$	552,731	$	423,372	$	2,747	$	3,948,949
Annual rental commitments under non-cancelable operating leases	209,933		27,177		49,345		39,649		93,762
Campus marketing agreements	48,494		3,478		5,683		5,318		34,015
Construction contracts and land purchase commitments for future branch sites	11,108		11,108		—		—		—
Visa indemnification obligation (2)	3,930		—		3,930		—		—
	$	5,201,264	$	594,494	$	482,330	$	47,714	$	4,076,726

(In thousands)	Amount of Commitment - Expiration by Period
			Less than		1-3		4-5		After 5
Commitments	Total		1 year		Years		Years		Years
Commitments to lend:
Consumer home equity and other	$	1,894,279	$	11,319	$	27,657	$	228,037	$	1,627,266
Commercial	548,299		274,406		230,318		8,652		34,923
Leasing and equipment finance	97,699		97,699		—		—		—
Other	3,398		3,398		—		—		—
Total commitments to lend	2,543,675		386,822		257,975		236,689		1,662,189
Standby letters of credit and guarantees on industrial revenue bonds	85,280		58,110		27,091		79		—
	$	2,628,955	$	444,932	$	285,066	$	236,768	$	1,662,189

(1) Total borrowings excludes interest.

(2) The exact date of the payment can not be determined. Any payments of this obligation are expected to be made within three years.

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

Campus marketing agreements consist of fixed or minimum obligations for exclusive marketing and naming rights with ten campuses. TCF is obligated to make various annual payments for these rights in the form of royalties and scholarships 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.

Standby letters of credit and guarantees on industrial revenue bonds are conditional commitments issued by TCF guaranteeing the performance of a customer to a third party. These conditional commitments expire in various years through the year 2012. The assets held as collateral primarily consist 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 outstanding commitments.

Stockholders’ Equity

Stockholders’ equity at June 30, 2008 was $1.1 billion, or 6.61% of total assets, compared with 6.88% at December 31, 2007. At June 30, 2008, TCF had 5.4 million shares in its stock repurchase program authorized by its Board of Directors. TCF continues to be a well-capitalized financial institution. Given current market and economic conditions, TCF believes it is prudent to preserve its capital. As a result, TCF is not repurchasing shares. No repurchases of common stock were made in the first six months of 2008. On July 21, 2008, TCF declared a regular quarterly dividend of 25 cents per common share, payable on August 29, 2008 to shareholders of record as of August 1, 2008.

TCF continually evaluates its capital structure and is monitoring market conditions for the possible issuance of trust-preferred securities, which would be included in regulatory capital. Funds obtained from such issuance would be used for general corporate purposes, including the funding of future balance sheet growth.

Recent Accounting Developments

In June, 2008, the FASB issued FASB Staff Position (FSP) EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities. This FSP defines participating securities as those that are expected to vest and are entitled to receive nonforfeitable dividends or dividend equivalents. Unvested share-based payment awards that have a right to receive dividends on common stock (restricted stock) will be considered participating securities and included in earnings per share using the two-class method. The two-class method requires net income to be reduced for dividends declared and paid in the period on such shares. Remaining net income is then allocated to each class of stock (proportionately based on unrestricted and restricted shares which pay dividends) for calculation of basic earnings per share. Diluted earnings per share would then be calculated based on basic shares outstanding plus any additional potentially dilutive shares, such as options and restricted stock that do not pay dividends or are not expected to vest. This FSP is effective in the first quarter 2009. Basic earnings per share may decline as a result of this FSP. There will be no effect on diluted earnings per share.

Legislative, Legal and Regulatory Developments

Federal and state legislation imposes numerous legal and regulatory requirements on financial institutions. Future legislative or regulatory change, or changes in enforcement practices or court rulings, may have a dramatic and potentially adverse impact on TCF and its bank and other subsidiaries.

Forward-Looking Information

This quarterly report on Form 10-Q and other reports issued by the Company, including reports filed with the SEC, may contain “forward-looking” statements that deal with future results, plans or performance. In addition, TCF’s management may make such statements orally to the media, or to securities analysts, investors or others. Forward-looking statements deal with matters that do not relate strictly to historical facts. TCF’s future results may differ materially from historical performance and forward-looking statements about TCF’s expected financial results or other plans and are subject to a number of risks and uncertainties. These include, but are not limited to, possible legislative changes and adverse economic, business and competitive

developments 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 supermarket 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; 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; lack of or inadequate insurance coverage for claims against TCF; technological, computer-related or operational difficulties or loss or theft of information; adverse changes in securities markets directly or indirectly affecting TCF’s ability to sell assets or to fund its operations; 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; heightened regulatory practices, requirements or expectations; or other significant uncertainties.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — Interest-Rate Risk

TCF’s results of operations are dependent to a large degree on its net interest income and its ability to manage its interest-rate risk. Although TCF manages other risks, such as credit 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. 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 financial institutions, has material interest-rate risk exposure to changes in both short-term and long-term interest rates as well as variable interest rate indices (e.g., 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/liability management activities is to provide maximum levels of net interest income while maintaining acceptable levels of interest-rate risk and liquidity risk and facilitating the funding needs of the Company.

TCF utilizes net interest income simulation models to estimate the near-term effects (next twelve months) of changing interest rates on its net interest income. Net interest income simulation involves forecasting net interest income under a variety of scenarios, including the level of interest rates, the shape of the yield curve, and spreads between market interest rates. At June 30, 2008, net interest income is estimated to decrease by 1.8% compared with the base case scenario, over the next 12 months if short- and long-term interest rates were to sustain an immediate increase of 100 basis points. In the event short- and long-term interest rates were to decline by 100 basis points, net interest income is estimated to increase .8% compared with the base case scenario, over the next 12 months.

Management exercises its best judgment in making assumptions regarding events that management can impact such as non-contractual deposit repricings and events outside 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 loan and deposit pricing. These assumptions are inherently uncertain and, as a result, net interest income simulation results will differ from actual results due to the timing, magnitude 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 (difference 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 significantly affected by external factors such as loan prepayments, early withdrawals of deposits, changes in the correlation of various interest-bearing instruments, competition, or an increase or decrease in interest rates.

TCF’s one-year interest rate gap was a negative $1.8 billion, or 11.2% of total assets at June 30, 2008, compared with a negative $1 billion, or 6.4% of total assets at December 31, 2007. 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 $7.6 billion of fixed-rate mortgage-backed securities, residential real estate loans and consumer loans at June 30, 2008, by approximately $657 million, or 100.2%, in the first year. An increase in prepayments would decrease the estimated life of the portfolios and may adversely impact net interest income or net interest margin in the future. Although prepayments on fixed-rate portfolios are currently at a relatively low level, TCF estimates that an immediate 100 basis point increase in current mortgage loan interest rates would reduce prepayments on the fixed-rate mortgage-backed securities, residential real estate loans and consumer loans at June 30, 2008, by approximately $179 million, or 27.3%, 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.

Item 4. 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 June 30, 2008. Also, there were no significant changes in the Company’s disclosure controls or internal controls over financial reporting during the second quarter of 2008 that have materially affected or are reasonably likely to materially affect TCF’s internal control over financial reporting.

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

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

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Supplementary Information

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)
	At			At			At			At			At
(Dollars in thousands,	June 30,			March 31,			December 31,			Sept. 30,			June 30,
except per-share data)	2008			2008			2007			2007			2007
SELECTED FINANCIAL CONDITION DATA:
Loans and leases excluding residential real estate loans	$	12,466,751		$	12,096,467		$	11,810,629		$	11,334,162		$	11,038,605

Securities available for sale	2,120,664			2,177,262			1,963,681			2,022,505			1,943,450
Residential real estate loans	485,795			506,394			527,607			547,552			572,619
Subtotal	2,606,459			2,683,656			2,491,288			2,570,057			2,516,069
Goodwill	152,599			152,599			152,599			152,599			152,599
Total assets	16,460,123			16,370,364			15,977,054			15,530,338			14,977,704

Deposits	10,146,122			10,357,069			9,576,549			9,746,066			9,842,695
Short-term borrowings	411,802			138,442			556,070			167,319			285,828
Long-term borrowings	4,515,997			4,414,644			4,417,378			4,266,022			3,568,997
Stockholders’ equity	1,088,301			1,129,870			1,099,012			1,043,447			1,001,032

	Three Months Ended
	June 30,			March 31,			December 31,			Sept. 30,			June 30,
	2008			2008			2007			2007			2007
SELECTED OPERATIONS DATA:
Net interest income	$	151,562		$	142,829		$	139,571		$	137,704		$	137,425
Provision for credit losses	62,895			29,995			20,124			18,883			13,329
Net interest income after provision for credit losses	88,667			112,834			119,447			118,821			124,096
Non-interest income:
Fees and other revenue	121,504			112,705			124,845			126,394			126,882
Visa share redemption	—			8,308			—			—			—
Gains on sales of securities available for sale	1,115			6,286			11,261			2,017			—
Gains on sales of branches and real estate	—			—			2,752			1,246			2,723
Total non-interest income	122,619			127,299			138,858			129,657			129,605
Non-interest expense	168,729			168,276			172,613			162,777			162,534
Income before income tax expense	42,557			71,857			85,692			85,701			91,167
Income tax expense	18,855			24,431			22,875			26,563			29,038
Net income	$	23,702		$	47,426		$	62,817		$	59,138		$	62,129
Per common share:
Basic earnings	$	.19		$	.38		$	.51		$	.48		$	.49
Diluted earnings	$	.19		$	.38		$	.50		$	.48		$	.49
Dividends declared	$	.25		$	.25		$	.2425		$	.2425		$	.2425

FINANCIAL RATIOS:
Return on average assets (1)	.58		%	1.18		%	1.60		%	1.55		%	1.67		%
Return on average common equity (1)	8.57			17.08			23.55			23.39			24.16
Net interest margin (1)	4.00			3.84			3.83			3.90			4.02
Net charge-offs as a percentage of average loans and leases (1)	.84			.44			.46			.38			.24
Average total equity to average assets	6.76			6.88			6.79			6.64			6.92
(1) Annualized.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, TCF is a party to legal proceedings arising out of its lending, leasing and deposit operations. TCF is and expects to become engaged in a number of foreclosure proceedings and other collection actions as part of its 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 1A. Risk Factors

The United States, including TCF’s markets, has experienced weakening economic conditions and declines in housing prices and real estate values in general. As discussed in Part I, Item 1A, Risk Factors, and Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in TCF’s Annual Report on Form 10-K dated December 31, 2007 and in Part I, Item 2 of this Form 10-Q for the quarterly period ended June 30, 2008, TCF’s loan portfolio contains significant amounts of loans secured by residential and commercial real estate. TCF has experienced increases in non-performing assets, net charge-offs and provisions for credit losses as a result of continuing deterioration of the housing markets, increasing financial stress on consumers and weakening economic conditions. In the event of worsening economic conditions and continued decline in real estate values, TCF would expect continued deterioration of credit quality represented by increased balances of non-performing assets, increased net charge-offs and increased provisions for credit losses.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table summarizes share repurchase activity for the quarter ended June 30, 2008.

Period	Total number of shares purchased	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
April 1 to April 30, 2008
Share repurchase program (1)	—	$	—	—	5,384,130
Employee transactions (2)	1,223	$	18.52	N.A.	N.A.

May 1 to May 31, 2008
Share repurchase program (1)	—	$	—	—	5,384,130
Employee transactions (2)	—	$	—	N.A.	N.A.

June 1 to June 30, 2008
Share repurchase program (1)	—	$	—	—	5,384,130
Employee transactions (2)	—	$	—	N.A.	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.

Item 3. Defaults Upon Senior Securities

None.

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

On April 23, 2008, the Annual Meeting of the shareholders of TCF was held to obtain approval from shareholders for the matters indicated below. The following is a brief description of each matter voted on at the meeting, and the number of votes cast for, against or withheld, as well as the number of abstentions and broker nonvotes, as to each matter.

		Vote
			Against or		Broker
		For	Withheld	Abstain	Nonvote
1.	Election of four Directors:
	Rodney P. Burwell	107,548,687	2,956,897	—	—
	William A. Cooper	106,121,482	4,384,102	—	—
	Thomas A. Cusick	106,121,840	4,383,744	—	—
	Peter L. Scherer	107,575,044	2,930,540	—	—

2.	Approve a Second Amended and Restated	109,032,724	1,045,986	426,874	—
	Certificate of Incorporation to eliminate the
	classified board structure and provide for the
	annual election of Directors

3.	Advisory vote on appointment of KPMG LLP as	109,061,180	1,278,700	165,703	—
	independent registered public accountants for
	the fiscal year ending December 31, 2008

Item 5. Other Information

None.

Item 6. Exhibits

See Index to Exhibits on page 43 of this report.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		TCF FINANCIAL CORPORATION


		/s/ Lynn A. Nagorske
		Lynn A. Nagorske, Chief Executive Officer and Director (Principal Executive Officer)



		/s/ Thomas F. Jasper
		Thomas F. Jasper, Executive Vice President and Chief Financial Officer (Principal Financial Officer)



		/s/ David M. Stautz
		David M. Stautz, Senior Vice President, Controller and Assistant Treasurer (Principal Accounting Officer)

Dated: July 25, 2008

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

INDEX TO EXHIBITS

FOR FORM 10-Q

	Exhibit
	Number		Description

	3(a)		Amended and Restated Certificate of Incorporation of TCF Financial, as amended through April 23, 2008 [incorporated by reference to Exhibit 3(a) to TCF Financial Corporation’s Current Report on Form 8-K filed April 28, 2008]

	3(b)		Bylaws of TCF Financial Corporation, as amended and restated through April 23, 2008 [incorporated by reference to Exhibit 3(b) to TCF Financial Corporation’s Current Report on Form 8-K filed April 28, 2008]

	4(a)		Copies of instruments with respect to long-term debt will be furnished to the Securities and Exchange Commission upon request

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

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

# Filed herein

Positive
Negative
Uncertain
Constraining
Legalese
Litigious
Readability	H.S. freshman Avg

TCF Financial Inactive 10-Q2008 Q2 Quarterly report

Content analysis

WASHINGTON, D.C. 20549

FORM 10-Q

TCF FINANCIAL CORPORATION

200 Lake Street East, Mail Code EX0-03-A,

Wayzata, Minnesota 55391-1693

Registrant’s telephone number, including area code: (952) 745-2760

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

INDEX

Notes to Consolidated Financial Statements

Performance Summary

Consolidated Provision for Credit Losses

Forward-Looking Information

Supplementary Information