TCF Financial 10Q 2012 Q1 Quarterly report

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

March 31, 2012

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 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)

(952) 745-2760

(Registrant’s telephone number, including area code)

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 [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X]

No [ ]

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 [ ]
Non-accelerated filer [ ] (Do not check if a smaller reporting company)		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 [ ]

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			April 19, 2012
Common Stock, $.01 par value			162,179,032 shares

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

INDEX

Part I. Financial Information		Pages

	Item 1. Financial Statements

	Consolidated Statements of Financial Condition March 31, 2012 and December 31, 2011	1

	Consolidated Statements of Comprehensive Income for the Three months ended March 31, 2012 and 2011	2

	Consolidated Statements of Equity for the Three months ended March 31, 2012 and 2011	3

	Consolidated Statements of Cash Flows for the Three months ended March 31, 2012 and 2011	4

	Notes to Consolidated Financial Statements	5

	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	30

	Item 3. Quantitative and Qualitative Disclosures About Market Risk	52

	Item 4. Controls and Procedures	53

	Supplementary Information	54

Part II. Other Information

	Items 1-6	55

	Signatures	57

	Index to Exhibits	58

PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Financial Condition

	At			At
	March 31,			December 31,
(Dollars in thousands, except per-share data)	2012			2011
	(Unaudited)
Assets

Cash and due from banks	$	705,642		$	1,389,704
Investments	168,440			157,780
Securities available for sale	728,894			2,324,038
Loans and leases held for sale	1,918			14,321
Loans and leases:
Consumer real estate	6,815,909			6,895,291
Commercial	3,467,089			3,449,492
Leasing and equipment finance	3,118,755			3,142,259
Inventory finance	1,637,958			624,700
Auto finance	139,047			3,628
Other	29,178			34,885
Total loans and leases	15,207,936			14,150,255
Allowance for loan and lease losses	(265,293		)	(255,672		)
Net loans and leases	14,942,643			13,894,583
Premises and equipment, net	433,364			436,281
Goodwill	225,640			225,640
Other assets	626,916			537,041
Total assets	$	17,833,457		$	18,979,388

Liabilities and Equity

Deposits:
Checking	$	4,886,003		$	4,629,749
Savings	5,998,764			5,855,263
Money market	665,642			651,377
Certificates of deposit	1,208,631			1,065,615
Total deposits	12,759,040			12,202,004
Short-term borrowings	1,157,189			6,416
Long-term borrowings	1,962,053			4,381,664
Total borrowings	3,119,242			4,388,080
Accrued expenses and other liabilities	405,850			510,677
Total liabilities	16,284,132			17,100,761
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; 162,174,546 and 160,366,380 shares issued, respectively	1,622			1,604
Additional paid-in capital	736,288			715,247
Retained earnings, subject to certain restrictions	836,995			1,127,823
Accumulated other comprehensive income	3,273			56,826
Treasury stock at cost, 42,566, and 42,566 shares, respectively, and other	(47,159		)	(33,367		)
Total TCF Financial Corporation stockholders’ equity	1,531,019			1,868,133
Non-controlling interest in subsidiaries	18,306			10,494
Total equity	1,549,325			1,878,627
Total liabilities and equity	$	17,833,457		$	18,979,388
See accompanying notes to consolidated financial statements.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(Unaudited)

	Three Months Ended
	March 31,
(In thousands, except per-share data)	2012			2011
Interest income:
Loans and leases	$	205,984		$	214,673
Securities available for sale	19,112			19,429
Investments and other	2,433			1,801
Total interest income	227,529			235,903
Interest expense:
Deposits	9,061			12,004
Borrowings	38,295			49,859
Total interest expense	47,356			61,863
Net interest income	180,173			174,040
Provision for credit losses	48,542			45,274
Net interest income after provision for credit losses	131,631			128,766
Non-interest income:
Fees and service charges	41,856			53,513
Card revenue	13,207			26,584
ATM revenue	6,199			6,705
Subtotal	61,262			86,802
Leasing and equipment finance	22,867			26,750
Gains on sales of auto loans	2,250			-
Other	2,355			694
Fees and other revenue	88,734			114,246
Gains on securities, net	76,611			-
Total non-interest income	165,345			114,246
Non-interest expense:
Compensation and employee benefits	95,967			89,357
Occupancy and equipment	32,246			32,159
FDIC insurance	6,386			7,195
Deposit account premiums	5,971			3,198
Advertising and marketing	2,617			3,160
Other	37,296			34,566
Subtotal	180,483			169,635
Loss on termination of debt	550,735			-
Foreclosed real estate and repossessed assets, net	11,047			12,868
Operating lease depreciation	6,731			7,928
Other credit costs, net	(288		)	2,548
Total non-interest expense	748,708			192,979
(Loss) income before income tax expense	(451,732		)	50,033
Income tax (benefit) expense	(170,244		)	18,772
(Loss) income after income tax expense	(281,488		)	31,261
Income attributable to non-controlling interest	1,406			989
Net (loss) income attributable to common stockholders	$	(282,894	)	$	30,272
Other comprehensive loss:
Reclassification adjustment for securities gains included in net income	(76,967		)	-
Unrealized holding losses arising during the period on securities available for sale	(7,768		)	(21,070		)
Foreign currency hedge	(404		)	(507		)
Foreign currency translation adjustment	385			414
Recognized postretirement prior service cost and transition obligation	(7		)	1
Income tax benefit	31,208			7,904
Total other comprehensive loss	(53,553		)	(13,258		)
Comprehensive (loss) income attributable to common stockholders	$	(336,447	)	$	17,014
Net (loss) income per common share:
Basic	$	(1.78	)	$	.21
Diluted	$	(1.78	)	$	.21
Dividends declared per common share	$	.05		$	.05
See accompanying notes to consolidated financial statements.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Equity

(Unaudited)

	TCF Financial Corporation
												Accumulated
	Number of					Additional						Other			Treasury						Non-
	Common		Common			Paid-in			Retained			Comprehensive			Stock						controlling		Total
(Dollars in thousands)	Shares Issued		Stock			Capital			Earnings			Income (Loss)			and Other			Total			Interests		Equity
Balance, December 31, 2010	142,965,012		$	1,430		$	459,884		$	1,049,156		$	(15,692	)	$	(23,115	)	$	1,471,663		$	8,500	$	1,480,163
Comprehensive income (loss):
Income after income tax expense	-		-			-			30,272			-			-			30,272			989		31,261
Other comprehensive loss	-		-			-			-			(13,258		)	-			(13,258		)	-		(13,258		)
Comprehensive income (loss)	-		-			-			30,272			(13,258		)	-			17,014			989		18,003
Public offering of common stock	15,081,968		151			219,515			-			-			-			219,666			-		219,666
Net investment by non-controlling interest	-		-			-			-			-			-			-			7,051		7,051
Dividends on common stock	-		-			-			(7,100		)	-			-			(7,100		)	-		(7,100		)
Grants of restricted stock to directors, 820,656 shares	815,000		8			(154		)	-			-			146			-			-		-
Common shares purchased by TCF employee benefit plans	387,675		4			6,084			-			-			-			6,088			-		6,088
Cancellation of shares of restricted stock	(20,900	)	-			(144		)	13			-			-			(131		)	-		(131		)
Cancellation of common shares for tax withholding	(141,765	)	(2		)	(2,115		)	-			-			-			(2,117		)	-		(2,117		)
Amortization of stock compensation	-		-			2,391			-			-			-			2,391			-		2,391
Stock compensation tax benefits	-		-			457			-			-			-			457			-		457
Change in shares held in trust for deferred compensation plans, at cost	-		-			9,938			-			-			(9,938		)	-			-		-
Balance, March 31, 2011	159,086,990		$	1,591		$	695,856		$	1,072,341		$	(28,950	)	$	(32,907	)	$	1,707,931		$	16,540	$	1,724,471

Balance, December 31, 2011	160,366,380		$	1,604		$	715,247		$	1,127,823		$	56,826		$	(33,367	)	$	1,868,133		$	10,494	$	1,878,627
Comprehensive income (loss):
(Loss) income after income tax benefit	-		-			-			(282,894		)	-			-			(282,894		)	1,406		(281,488		)
Other comprehensive loss	-		-			-			-			(53,553		)	-			(53,553		)	-		(53,553		)
Comprehensive (loss) income	-		-			-			(282,894		)	(53,553		)	-			(336,447		)	1,406		(335,041		)
Investment by non-controlling interest	-		-			-			-			-			-			-			6,406		6,406
Dividends on common stock	-		-			-			(7,934		)	-			-			(7,934		)	-		(7,934		)
Grants of restricted stock	1,367,325		14			(14		)	-			-			-			-			-		-
Common shares purchased by TCF employee benefit plans	567,918		5			6,178			-			-			-			6,183			-		6,183
Cancellation of shares of restricted stock	(6,580	)	-			(30		)	-			-			-			(30		)	-		(30		)
Cancellation of common shares for tax withholding	(120,497	)	(1		)	(1,247		)	-			-			-			(1,248		)	-		(1,248		)
Amortization of stock compensation	-		-			2,656			-			-			-			2,656			-		2,656
Stock option expirations	-		-			(56		)	-			-			-			(56		)	-		(56		)
Stock compensation tax benefits	-		-			(238		)	-			-			-			(238		)	-		(238		)
Change in shares held in trust for deferred compensation plans, at cost	-		-			13,792			-			-			(13,792		)	-			-		-
Balance, March 31, 2012	162,174,546		$	1,622		$	736,288		$	836,995		$	3,273		$	(47,159	)	$	1,531,019		$	18,306	$	1,549,325

See accompanying notes to consolidated financial statements.

TCF FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended March 31,
(In thousands)	2012			2011
Cash flows from operating activities:
Net (loss) income attributable to common stockholders	$	(282,894	)	$	30,272
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Provision for credit losses	48,542			45,274
Depreciation and amortization	18,129			17,658
Proceeds from sales of loans and leases held for sale	15,828			-
Originations of auto loans held for sale	(12,554		)	-
Net (decrease) increase in other assets and accrued expenses and other liabilities	(153,598		)	15,287
Gains on sales of assets, net	(81,187		)	(6,529		)
Loss on termination of debt	550,735			-
Net income attributable to non-controlling interest	1,406			989
Other, net	7,473			6,786
Total adjustments	394,774			79,465
Net cash provided by operating activities	111,880			109,737
Cash flows from investing activities:
Loan originations and purchases net of principal collected on loans and leases	(990,492		)	29,546
Purchases of equipment for lease financing	(207,582		)	(190,593		)
Purchase of inventory finance portfolios	(37,526		)	-
Proceeds from sales of loans	62,350			3,153
Proceeds from sales of lease receivables	28,102			32,489
Proceeds from sales of securities available for sale	1,901,460			-
Purchases of securities available for sale	(430,516		)	(346,953		)
Proceeds from maturities of and principal collected on securities available for sale	116,267			85,100
Purchases of Federal Home Loan Bank stock	(112,362		)	(3,335		)
Redemption of Federal Home Loan Bank stock	101,238			16,688
Proceeds from sales of real estate owned	28,331			27,707
Purchases of premises and equipment	(8,386		)	(8,842		)
Other, net	10,736			12,472
Net cash provided by (used in) investing activities	461,620			(342,568		)
Cash flows from financing activities:
Net increase in deposits	542,073			461,602
Net increase (decrease) in short-term borrowings	1,150,771			(113,890		)
Proceeds from long-term borrowings	1,150,416			413
Payments on long-term borrowings	(4,105,153		)	(302,546		)
Net proceeds from public offering of common stock	-			219,666
Net investment by non-controlling interest	6,406			7,051
Dividends paid on common stock	(7,934		)	(7,100		)
Stock compensation tax (expenses) benefits	(238		)	457
Common shares sold to TCF employee benefit plans	6,097			6,088
Net cash (used in) provided by financing activities	(1,257,562		)	271,741
Net (decrease) increase in cash and due from banks	(684,062		)	38,910
Cash and due from banks at beginning of period	1,389,704			663,901
Cash and due from banks at end of period	$	705,642		$	702,811

Supplemental disclosures of cash flow information:
Cash paid for:
Interest on deposits and borrowings	$	55,717		$	61,013
Income taxes	$	2,131		$	4,915
Transfer of loans to other assets	$	36,651		$	48,918

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 (“GAAP”). 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, 2011 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 GAAP 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 fair presentation. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire year.

(2) Business Combinations

On November 30, 2011, TCF National Bank (“TCF Bank”) acquired 100% of the outstanding common shares of Gateway One Lending & Finance, LLC (“Gateway One”), a privately-held lending company that indirectly originates loans on new and used autos to consumers through established dealer relationships. The acquisition of Gateway One further diversifies the Company’s lending business and provides growth opportunities within the U.S. auto lending marketplace. As a result of the acquisition, Gateway One became a wholly-owned subsidiary of TCF Bank and accordingly, TCF’s Consolidated Statements of Comprehensive Income for the three months ended March 31, 2012 included net interest income, non-interest income and net loss of Gateway One totaling $1.8 million, $3.9 million, and $1.8 million, respectively.

The following unaudited pro forma financial information presents the combined results of operations of TCF and Gateway One as if the acquisition had been effective January 1, 2011. These results include the impact of amortizing certain purchase accounting adjustments such as intangible assets, compensation expenses and the related impact of the acquisition on income tax expense. There were no material nonrecurring pro forma adjustments directly attributable to the acquisition included within the following pro forma financial information. The pro forma financial information does not necessarily reflect the results of operations that would have occurred had TCF and Gateway One constituted a single entity during such periods. Growth opportunities are expected to be achieved in various amounts at various times during the years subsequent to the acquisition and not ratably over, or at the beginning or end of such periods. No adjustments have been reflected in the following pro forma financial information for anticipated growth opportunities.

	Three Months Ended
(In thousands, except per-share data)	March 31, 2011
Interest Income	$	237,741
Net interest income	175,605
Non-interest income	117,167
Net income attributable to common stockholders	30,336
Basic net income per common share	$	.21
Diluted net income per common share	$	.21

The total preliminary purchase price was allocated to Gateway One’s net tangible and identifiable intangible assets based on their estimated fair values as of November 30, 2011, as set forth below. The primary areas of the purchase price allocation that were not yet finalized at March 31, 2012 related to the valuation of certain loans held for investment.

The following table summarizes the consideration paid for Gateway One and the amounts of the assets acquired and liabilities assumed as of the acquisition date.

	At
	November 30,
(In thousands)	2011
Cash consideration	$	115,218
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	$	2,210
Restricted cash	18,685
Loans held for sale	13,711
Loans held for investment	3,779
Intangible assets	6,170
Interest-only strip	21,210
Deferred tax asset	11,286
Deferred stock compensation	2,600
Other assets	1,588
Accounts payable	(1,043		)
Loan sale liability	(5,972		)
Debt assumed	(9,988		)
Servicing funds to be remitted	(17,901		)
Other liabilities	(4,158		)
Total identifiable net assets	$	42,177
Goodwill	73,041
Total net assets acquired	$	115,218

All of Gateway One’s loans held for investment had evidence of deteriorated credit quality. The goodwill of $73 million arising from the acquisition consists largely of expected incremental balance sheet and fee growth and cross selling opportunities. The goodwill was assigned to TCF’s Funding segment. None of the goodwill recognized is expected to be deductible for income tax purposes.

Pursuant to the terms of the acquisition, three key members of Gateway One’s management team acquired shares of TCF common stock in the aggregate value of $2.6 million with proceeds received by them from the acquisition. These shares of TCF common stock will be retained by a trustee for three years pursuant to the terms of custodial agreements entered into between the trustee, TCF and each individual. Ownership of these shares will be forfeited to TCF if during the three year period the individual terminates his employment with TCF without cause, or TCF terminates their employment for cause, and has been accounted for separately from the acquisition. The value of these shares has been recorded within other assets and will be recognized as compensation expense ratably throughout the duration of the three-year period. In addition, TCF provided Gateway One $10 million in interim funding prior to the acquisition to facilitate its closing in a timely manner. This loan was executed at prevailing market pricing and terms.

(3) Cash and Due from Banks

At March 31, 2012 and December 31, 2011, TCF was required by Federal Reserve regulations to maintain reserves of $86.1 million and $42.1 million, respectively, in cash on hand or at the Federal Reserve.

TCF maintains cash balances that are restricted as to their use in accordance with certain contractual agreements related to the sale and servicing of auto loans. Cash proceeds from loans serviced for third parties are held in restricted accounts until remitted. TCF also retains restricted cash balances for potential loss recourse on certain sold auto loans. Restricted cash totaling $20.3 million and $17.5 million was included within cash and due from banks at March 31, 2012 and December 31, 2011, respectively.

(4) Investments

The carrying values of investments consist of the following.

	At		At
	March 31,		December 31,
(In thousands)	2012		2011
Federal Home Loan Bank stock, at cost	$	130,210	$	119,086
Federal Reserve Bank stock, at cost	31,714		31,711
Other	6,516		6,983
Total investments	$	168,440	$	157,780

The investments in Federal Home Loan Bank (“FHLB”) stock are required investments related to TCF’s current borrowings from the FHLB Des Moines. FHLBs obtain their funding primarily through issuance of consolidated obligations of the Federal Home Loan Bank system. The U.S. Government does not guarantee these obligations, and each of the 12 FHLBs are generally jointly and severally liable for repayment of each other’s debt. Therefore, TCF’s investments in these banks could be adversely impacted by the financial operations of the FHLBs and actions of their regulator, the Federal Housing Finance Agency. Other investments primarily consist of non-traded mortgage-backed securities and other bonds which qualify for investment credit under the Community Reinvestment Act.

During the three months ended March 31, 2012, TCF recorded impairment charges of $356 thousand on other investments, which had a carrying value of $6.5 million at March 31, 2012. TCF did not record any impairment charges during the three months ended March 31, 2011.

(5) Securities Available for Sale

Securities available for sale consist of the following.

	March 31, 2012									December 31, 2011
				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	$	722,905		$	10,980	$	6,694	$	727,191	$	2,233,307		$	89,029	$	-	$	2,322,336
Other	146			-		-		146		152			-		-		152
Other securities	1,742			-		185		1,557		1,742			-		192		1,550
Total	$	724,793		$	10,980	$	6,879	$	728,894	$	2,235,201		$	89,029	$	192	$	2,324,038
Weighted-average yield	3.17		%							3.79		%

Gains of $77 million were recognized on sales of securities during the three months ended March 31, 2012. There were no sales of securities during the three months ended March 31, 2011.

The following table shows the securities available for sale portfolio’s gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position. Unrealized losses on securities available for sale are due to lower values for equity securities or 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 occurs.

	Less than 12 months				12 months or more				Total
			Unrealized				Unrealized				Unrealized
(In thousands)	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
At March 31, 2012
Mortgage-backed securities:
U.S. Government sponsored enterprises and federal agencies	$	421,898	$	6,694	$	-	$	-	$	421,898	$	6,694
Other securities	1,457		185		-		-		1,457		185
Total	$	423,355	$	6,879	$	-	$	-	$	423,355	$	6,879

At December 31, 2011
Other securities	$	1,450	$	192	$	-	$	-	$	1,450	$	192
Total	$	1,450	$	192	$	-	$	-	$	1,450	$	192

The amortized cost and fair value of securities available for sale at March 31, 2012, by contractual maturity, are shown below. The remaining contractual principal maturities do not consider prepayments. Remaining expected maturities will differ from contractual maturities because borrowers may have the right to prepay.

	Amortized
(In thousands)	Cost		Fair Value
Due in one year or less	$	100	$	100
Due in 1-5 years	125		131
Due in 5-10 years	130		130
Due after 10 years	722,796		727,076
No stated maturity	1,642		1,457
Total	$	724,793	$	728,894

(6) Loans and leases

The following table sets forth information about loans and leases.

		At			At
		March 31,			December 31,			Percentage
(Dollars in thousands)		2012			2011			Change
Consumer real estate:
First mortgage lien		$	4,685,761		$	4,742,423		(1.2	)%
Junior lien		2,130,148			2,152,868			(1.1	)
Total consumer real estate		6,815,909			6,895,291			(1.2	)
Commercial:
Commercial real estate:
Permanent		3,065,828			3,039,488			.9
Construction and development		155,347			159,210			(2.4	)
Total commercial real estate		3,221,175			3,198,698			.7
Commercial business		245,914			250,794			(1.9	)
Total commercial		3,467,089			3,449,492			.5
Leasing and equipment finance:(1)
Equipment finance loans		1,143,063			1,110,803			2.9
Lease financings:
Direct financing leases		1,976,427			2,039,096			(3.1	)
Sales-type leases		29,196			29,219			(.1	)
Lease residuals		126,217			129,100			(2.2	)
Unearned income and deferred lease costs		(156,148		)	(165,959		)	5.9
Total lease financings		1,975,692			2,031,456			(2.7	)
Total leasing and equipment finance		3,118,755			3,142,259			(.7	)
Inventory finance		1,637,958			624,700			162.2
Auto finance		139,047			3,628			N.M	.
Other		29,178			34,885			(16.4	)
Total loans and leases		$	15,207,936		$	14,150,255		7.5	%
N.M. Not Meaningful.
(1)	Operating leases of $67 million and $69.6 million at March 31, 2012 and December 31, 2011, respectively, are included in other assets in the Consolidated Statements of Financial Condition.

From time to time, TCF sells minimum lease payments to third-party financial institutions at fixed rates. For those transactions which achieve sale treatment, the related lease cash flow stream is not recognized on TCF’s Statements of Financial Condition. During the three months ended March 31, 2012, TCF sold $32.7 million of minimum lease payment receivables, received cash of $33.5 million, and recognized a net gain of $808 thousand. During the three months ended March 31, 2011, TCF sold $26.7 million of minimum lease payment receivables, received cash of $32.5 million, and recognized a net gain of $5.8 million. At March 31, 2012 and December 31, 2011, TCF’s lease residuals reported within the table above include $11.1 million and $9.1 million, respectively, related to all historical sales of minimum lease payment receivables.

During the first quarter of 2012, TCF sold $72 million of consumer auto loans with servicing retained and received cash of $70.3 million, resulting in gains of $2.3 million. Related to these sales, TCF retained an interest-only strip of $4.6 million. At March 31, 2012 and December 31, 2011, interest-only strips totaled $23.7 million and $22.4 million, respectively. At March 31, 2012 and December 31, 2011, contractual recourse liabilities totaled $5.4 million and $6 million, respectively. No servicing assets or liabilities were recorded within TCF’s Consolidated Statements of Financial Condition, as the contractual servicing fees are adequate to compensate TCF for its servicing responsibilities. The unpaid principal balance of auto loans serviced for third parties was $414.9 million and $387.1 million at March 31, 2012 and December 31, 2011, respectively. Approximately .6% of the auto loans serviced for third parties were 60 or more days past due at March 31, 2012.

(7) Allowance for Loan and Lease Losses and Credit Quality Information

Allowance for Loan and Lease Losses The following tables provide information regarding the allowance for loan and lease losses.

(In thousands)	Consumer Real Estate			Commercial			Leasing and Equipment Finance			Inventory Finance			Auto Finance			Other			Total
At or For the Three Months Ended March 31, 2012
Balance, at beginning of quarter	$	183,435		$	46,954		$	21,173		$	2,996		$	-		$	1,114		$	255,672
Charge-offs	(37,161		)	(1,650		)	(1,776		)	(670		)	(2		)	(3,416		)	(44,675		)
Recoveries	1,473			126			1,625			27			-			2,491			5,742
Net charge-offs	(35,688		)	(1,524		)	(151		)	(643		)	(2		)	(925		)	(38,933		)
Provision for credit losses	36,078			5,014			515			5,191			1,021			723			48,542
Other	-			-			-			12			-			-			12
Balance, at end of quarter	$	183,825		$	50,444		$	21,537		$	7,556		$	1,019		$	912		$	265,293

At or For the Three Months Ended March 31, 2011
Balance, at beginning of quarter	$	172,850		$	62,478		$	26,301		$	2,537		$	-		$	1,653		$	265,819
Charge-offs	(36,188		)	(17,912		)	(3,950		)	(236		)	-			(2,819		)	(61,105		)
Recoveries	885			134			1,161			27			-			3,086			5,293
Net charge-offs	(35,303		)	(17,778		)	(2,789		)	(209		)	-			267			(55,812		)
Provision for credit losses	36,550			5,419			2,760			989			-			(444		)	45,274
Other	-			-			-			27			-			-			27
Balance, at end of quarter	$	174,097		$	50,119		$	26,272		$	3,344		$	-		$	1,476		$	255,308

The following tables provide other information regarding the allowance for loan and lease losses and balances by type of allowance methodology.

	At March 31, 2012
(In thousands)	Consumer Real Estate		Commercial		Leasing and Equipment Finance		Inventory Finance		Auto Finance		Other		Total
Allowance for loan and lease losses:
Collectively evaluated for loss potential	$	182,565	$	24,837	$	17,548	$	7,231	$	1,019	$	912	$	234,112
Individually evaluated for loss potential	1,260		25,607		3,989		325		-		-		31,181
Total	$	183,825	$	50,444	$	21,537	$	7,556	$	1,019	$	912	$	265,293
Loans and leases outstanding:
Collectively evaluated for loss potential	$	6,808,841	$	2,848,766	$	3,091,243	$	1,630,305	$	135,919	$	29,178	$	14,544,252
Individually evaluated for loss potential	7,068		618,323		21,633		7,653		-		-		654,677
Loans acquired with deteriorated credit quality	-		-		5,879		-		3,128		-		9,007
Total	$	6,815,909	$	3,467,089	$	3,118,755	$	1,637,958	$	139,047	$	29,178	$	15,207,936

	At December 31, 2011
(In thousands)	Consumer Real Estate		Commercial		Leasing and Equipment Finance		Inventory Finance		Auto Finance		Other		Total
Allowance for loan and lease losses:
Collectively evaluated for loss potential	$	182,315	$	24,842	$	17,339	$	2,583	$	-	$	1,114	$	228,193
Individually evaluated for loss potential	1,120		22,112		3,834		413		-		-		27,479
Total	$	183,435	$	46,954	$	21,173	$	2,996	$	-	$	1,114	$	255,672
Loans and leases outstanding:
Collectively evaluated for loss potential	$	6,887,627	$	2,811,046	$	3,112,864	$	616,496	$	-	$	34,885	$	13,462,918
Individually evaluated for loss potential	7,664		638,446		22,200		8,204		-		-		676,514
Loans acquired with deteriorated credit quality	-		-		7,195		-		3,628		-		10,823
Total	$	6,895,291	$	3,449,492	$	3,142,259	$	624,700	$	3,628	$	34,885	$	14,150,255

Performing and Non-accrual Loans and Leases The following tables set forth information regarding TCF’s performing and non-accrual loans and leases. Performing loans and leases are considered to have a lower risk of loss and are on accruing status. Non-accrual loans and leases are those which management believes have a higher risk of loss than performing loans and leases. Delinquent balances are determined based on the contractual terms of the loan or lease.

	At March 31, 2012
(In thousands)	0-59 Days Delinquent and Accruing		60-89 Days Delinquent and Accruing		90 Days or More Delinquent and Accruing		Total 60+ Days Delinquent and Accruing		Total Performing		Non-Accrual		Total
Consumer real estate
First mortgage lien	$	4,471,774	$	34,977	$	53,115	$	88,092	$	4,559,866	$	125,895	$	4,685,761
Junior lien	2,091,176		6,525		9,038		15,563		2,106,739		23,409		2,130,148
Total consumer real estate	6,562,950		41,502		62,153		103,655		6,666,605		149,304		6,815,909
Commercial real estate	3,098,204		978		2,089		3,067		3,101,271		119,904		3,221,175
Commercial business	229,783		4		354		358		230,141		15,773		245,914
Total commercial	3,327,987		982		2,443		3,425		3,331,412		135,677		3,467,089
Leasing and equipment finance:
Middle market	1,617,075		1,232		54		1,286		1,618,361		12,195		1,630,556
Small ticket	786,204		1,719		902		2,621		788,825		6,371		795,196
Winthrop	420,288		2,112		-		2,112		422,400		861		423,261
Other	216,456		-		-		-		216,456		588		217,044
Total leasing and equipment finance	3,040,023		5,063		956		6,019		3,046,042		20,015		3,066,057
Inventory finance	1,636,664		185		-		185		1,636,849		1,109		1,637,958
Auto finance	135,917		2		-		2		135,919		-		135,919
Other	26,288		52		-		52		26,340		2,838		29,178
Subtotal	14,729,829		47,786		65,552		113,338		14,843,167		308,943		15,152,110
Portfolios acquired with deteriorated credit quality	54,728		394		704		1,098		55,826		-		55,826
Total	$	14,784,557	$	48,180	$	66,256	$	114,436	$	14,898,993	$	308,943	$	15,207,936

	At December 31, 2011
(In thousands)	0-59 Days Delinquent and Accruing		60-89 Days Delinquent and Accruing		90 Days or More Delinquent and Accruing		Total 60+ Days Delinquent and Accruing		Total Performing		Non-Accrual		Total
Consumer real estate
First mortgage lien	$	4,525,951	$	32,571	$	54,787	$	87,358	$	4,613,309	$	129,114	$	4,742,423
Junior lien	2,110,334		7,813		14,464		22,277		2,132,611		20,257		2,152,868
Total consumer real estate	6,636,285		40,384		69,251		109,635		6,745,920		149,371		6,895,291
Commercial real estate	3,092,855		98		1,001		1,099		3,093,954		104,744		3,198,698
Commercial business	227,970		49		-		49		228,019		22,775		250,794
Total commercial	3,320,825		147		1,001		1,148		3,321,973		127,519		3,449,492
Leasing and equipment finance:
Middle market	1,627,369		1,260		84		1,344		1,628,713		13,185		1,641,898
Small ticket	792,566		2,368		613		2,981		795,547		5,535		801,082
Winthrop	447,334		235		-		235		447,569		1,253		448,822
Other	185,563		198		-		198		185,761		610		186,371
Total leasing and equipment finance	3,052,832		4,061		697		4,758		3,057,590		20,583		3,078,173
Inventory finance	623,717		153		7		160		623,877		823		624,700
Auto finance	-		-		-		-		-		-		-
Other	34,829		20		21		41		34,870		15		34,885
Subtotal	13,668,488		44,765		70,977		115,742		13,784,230		298,311		14,082,541
Portfolios acquired with deteriorated credit quality	65,820		766		1,128		1,894		67,714		-		67,714
Total	$	13,734,308	$	45,531	$	72,105	$	117,636	$	13,851,944	$	298,311	$	14,150,255

The following table provides interest income recognized on loans and leases in non-accrual status and contractual interest that would have been recorded had the loans and leases performed in accordance with their original contractual terms.

	Three Months Ended
	March 31,
(In thousands)	2012		2011
Contractual interest due on non-accrual loans and leases	$	9,019	$	9,661
Interest income recognized on loans and leases in non-accrual status	1,924		2,195
Unrecognized interest income	$	7,095	$	7,466

The following table summarizes consumer real estate loans to customers in bankruptcy.

	At March 31,		At December 31,
(In thousands)	2012		2011
Consumer real estate loans to customers in bankruptcy:
0-59 days delinquent and accruing	$	66,459	$	74,347
60+ days delinquent and accruing	1,557		1,112
Non-accrual	17,477		17,531
Total consumer real estate loans to customers in bankruptcy	$	85,493	$	92,990

Loan Modifications for Borrowers with Financial Difficulties Included within the loans and leases in previous tables are certain loans that have been modified in order to maximize collection of loan balances. If, for economic or legal reasons related to the customer’s financial difficulties, TCF grants a concession compared to the original terms and conditions on the loan, the modified loan is classified as a troubled debt restructuring (“TDR”).

TCF held consumer real estate loan TDRs of $490.2 million and $479.8 million at March 31, 2012 and December 31, 2011, respectively, of which $445 million and $433.1 million were accruing at March 31, 2012 and December 31, 2011, respectively. TCF also held $209 million and $181.6 million of commercial loan TDRs at March 31, 2012 and December 31, 2011, respectively, of which $109.9 million and $98.4 million were accruing at March 31, 2012 and December 31, 2011, respectively. The amount of additional funds committed to borrowers in TDR status was $5 million and $8.5 million at March 31, 2012 and December 31, 2011, respectively.

When a loan is modified as a TDR, there is not a direct, material impact on the loans within the Consolidated Statements of Financial Condition, as principal balances are generally not forgiven. Loan modifications are not reported as TDRs in calendar years after modification if the loans were modified at an interest rate equal to the yields of new loan originations with comparable risk and the loans are performing based on the terms of the restructuring agreements. All loans classified as TDRs are considered to be impaired.

The financial effects of TDRs are presented in the following table and represent the difference between interest income recognized on accruing TDRs and the contractual interest that would have been recorded under the original contractual terms.

	Three Months Ended March 31,
	2012							2011
(In thousands)	Contractual Interest Due on TDRs		Interest Income Recognized on TDRs		Unrecognized Interest Income			Contractual Interest Due on TDRs		Interest Income Recognized on TDRs		Unrecognized Interest Income
Consumer real estate:
First mortgage lien	$	7,066	$	3,629	$	3,437		$	5,591	$	2,986	$	2,605
Junior lien	567		349		218			407		224		183
Total consumer real estate	7,633		3,978		3,655			5,998		3,210		2,788
Commercial real estate	1,316		1,334		(18		)	383		369		14
Commercial business	110		110		-			-		-		-
Total commercial	1,426		1,444		(18		)	383		369		14
Leasing and equipment finance:
Middle market	15		16		(1		)	22		22		-
Total leasing and equipment finance	15		16		(1		)	22		22		-
Total	$	9,074	$	5,438	$	3,636		$	6,403	$	3,601	$	2,802

The table below summarizes TDRs that defaulted during the three months ended March 31, 2012 and 2011 and whose modification date was within 12 months of the beginning of the respective reporting period. TCF considers a loan to have defaulted when it becomes 90 or more days delinquent under the modified terms, has been transferred to non-accrual status or has been transferred to other real estate owned.

	Three Months Ended March 31,
	2012					2011
(Dollars in thousands)	Number of Loans		Loan Balance			Number of Loans		Loan Balance
Consumer real estate:
First mortgage lien	32		$	6,415		18		$	3,479
Junior lien	13		602			6		495
Total consumer real estate	45		7,017			24		3,974
Commercial real estate	4		13,627			1		521
Total commercial	4		13,627			1		521
Total defaulted modified loans	49		$	20,644		25		$	4,495
Loans modified in the applicable period	1,498		$	402,945		891		$	221,542
Defaulted modified loans as a percent of loans modified in the applicable period	3.3	%	5.1		%	2.8	%	2.0		%

Consumer real estate TDRs are evaluated separately in TCF’s allowance methodology based on the present value of expected cash flows for such loans as the repayments are not expected to result from the foreclosure and liquidation of the collateral at the time of the modification. The allowance on accruing consumer real estate loan TDRs was $59.9 million, or 13.5% of the outstanding balance at March 31, 2012, and $58.3 million, or 13.5% of the outstanding balance at December 31, 2011. For consumer real estate TDRs, TCF utilized re-default rates ranging from 10% to 25%, depending on modification type, in determining impairment, which is consistent with actual experience. The allowance on accruing commercial loan TDRs was $3.1 million, or 2.8% of the outstanding balance, at March 31, 2012, and $1.4 million, or 1.4% of the outstanding balance, at December 31, 2011.

Consumer real estate loans remain on accruing status upon modification if they are less than 150 days past due, or six payments owing, and payment in full under the modified loan is expected. Prior to modification, certain borrowers are

also required to demonstrate performance with a reduced payment amount. Otherwise, the loans are placed on non-accrual status and reported as non-accrual until there is sustained repayment performance for six consecutive payments. All eligible loans are re-aged to current delinquency status upon modification.

Impaired Loans TCF considers impaired loans to include non-accrual commercial loans, non-accrual equipment finance loans and non-accrual inventory finance loans, as well as consumer TDR loans, commercial TDR loans, and leasing and equipment finance TDR loans. Non-accrual impaired loans are included in the previous tables within the amounts disclosed as non-accrual and the accruing consumer real estate TDRs. Accruing commercial TDRs have been disclosed as performing within the previous tables of performing and non-accrual loans and leases. In the following table, the loan balance of impaired loans represents the amount recorded within loans and leases on the Consolidated Statements of Financial Condition whereas the unpaid contractual balance represents the balances legally owed by the borrowers, excluding write-downs.

The following table summarizes impaired loans.

	At March 31, 2012
(In thousands)	Unpaid Contractual Balance		Loan Balance		Related Allowance Recorded
Impaired loans with an allowance recorded:
Consumer real estate:
First mortgage lien	$	402,960	$	402,335	$	56,165
Junior lien	33,986		34,020		6,205
Total consumer real estate	436,946		436,355		62,370
Commercial real estate	245,933		223,073		18,204
Commercial business	25,553		22,489		3,514
Total commercial	271,486		245,562		21,718
Leasing and equipment finance:
Middle market	9,085		9,086		1,102
Small ticket	794		794		144
Other	588		588		240
Total leasing and equipment finance	10,467		10,468		1,486
Inventory finance	1,109		1,109		284
Total impaired loans with an allowance recorded	720,008		693,494		85,858
Impaired loans without an allowance recorded:
Consumer real estate:
First mortgage lien	70,187		50,683		-
Junior lien	6,273		3,159		-
Total consumer real estate	76,460		53,842		-
Total impaired loans	$	796,468	$	747,336	$	85,858

	At December 31, 2011
(In thousands)	Unpaid Contractual Balance		Loan Balance		Related Allowance Recorded
Impaired loans with an allowance recorded:
Consumer real estate:
First mortgage lien	$	396,754	$	395,513	$	55,642
Junior lien	33,796		33,404		5,397
Total consumer real estate	430,550		428,917		61,039
Commercial real estate	224,682		196,784		13,819
Commercial business	36,043		29,183		4,019
Total commercial	260,725		225,967		17,838
Leasing and equipment finance:
Middle market	9,501		9,501		1,130
Small ticket	532		532		114
Other	610		610		127
Total leasing and equipment finance	10,643		10,643		1,371
Inventory finance	823		823		44
Total impaired loans with an allowance recorded	702,741		666,350		80,292
Impaired loans without an allowance recorded:
Consumer real estate:
First mortgage lien	67,954		49,099		-
Junior lien	3,810		1,790		-
Total consumer real estate	71,764		50,889		-
Total impaired loans	$	774,505	$	717,239	$	80,292

The increase in the loan balance of impaired loans from December 31, 2011 was primarily due to the addition of $25.8 million in accruing commercial TDRs. Included in impaired loans were $426.4 million and $413.7 million of accruing consumer real estate loan TDRs less than 90 days past due as of March 31, 2012 and December 31, 2011, respectively.

The average loan balance of impaired loans and interest income recognized on impaired loans during the three months ended March 31, 2012 and 2011 are included within the table below.

	Three Months Ended				Three Months Ended
	March 31, 2012				March 31, 2011
(In thousands)	Average Balance		Interest Income Recognized		Average Balance		Interest Income Recognized
Impaired loans with an allowance recorded:
Consumer real estate:
First mortgage lien	$	398,924	$	3,403	$	320,128	$	3,001
Junior lien	33,712		315		22,105		224
Total consumer real estate	432,636		3,718		342,233		3,225
Commercial real estate	209,929		1,334		136,559		369
Commercial business	25,836		110		36,320		1
Total commercial	235,765		1,444		172,879		370
Leasing and equipment finance:
Middle market	9,294		5		13,863		33
Small ticket	663		-		816		1
Other	599		1		111		-
Total leasing and equipment finance	10,556		6		14,790		34
Inventory finance	966		13		1,246		29
Total impaired loans with an allowance recorded	679,923		5,181		531,148		3,658
Impaired loans without an allowance recorded:
Consumer real estate:
First mortgage lien	49,891		333		32,553		199
Junior lien	2,475		45		1,719		19
Total consumer real estate	52,366		378		34,272		218
Total impaired loans	$	732,289	$	5,559	$	565,420	$	3,876

(8) Long-term Borrowings

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

		At March 31, 2012				At December 31, 2011
				Weighted-				Weighted-
	Stated			Average				Average
(Dollars in thousands)	Maturity	Amount		Rate		Amount		Rate
Federal Home Loan Bank advances and securities sold under repurchase agreements	2013	$	680,000	0.74	%	$	400,000	0.97	%
	2014	448,000		0.45		-		-
	2015	125,000		0.46		900,000		4.18
	2016	297,000		1.12		1,100,000		4.49
	2017	-		-		1,250,000		4.60
	2018	-		-		300,000		3.51
Subtotal		1,550,000		0.70		3,950,000		4.02
Subordinated bank notes	2014	71,020		2.13		71,020		2.21
	2015	50,000		2.06		50,000		2.14
	2016	74,680		5.63		74,661		5.63
Subtotal		195,700		3.45		195,681		3.49
Junior subordinated notes (trust preferred)	2068	114,642		11.00		114,236		12.83
Discounted lease rentals	2012	40,109		5.29		57,622		5.32
	2013	34,357		5.26		36,009		5.28
	2014	15,764		5.11		16,641		5.12
	2015	5,668		5.04		5,662		5.04
	2016	4,026		4.98		4,026		4.98
	2017	1,787		4.98		1,787		4.98
Subtotal		101,711		5.22		121,747		5.25
Total long-term borrowings		$	1,962,053	1.81	%	$	4,381,664	4.26	%

During March 2012, TCF borrowed $2.1 billion of fixed and floating rate long-and short-term FHLB advances with a weighted average interest rate of .5% and sold $1.9 billion of U.S. government sponsored mortgage backed securities, realizing a gain of $77 million. TCF used the proceeds to terminate $1.5 billion of weighted average 4.2% fixed-rate repurchase agreement borrowings and $2.1 billion of 4.4% weighted average fixed-rate FHLB advances. The termination of the FHLB advances and repurchase agreement borrowings resulted in a termination loss of $551 million.

(9) Equity

Treasury stock and other consist of the following:

	At		At
	March 31,		December 31,
(In thousands)	2012		2011
Treasury stock, at cost	$	1,102	$	1,102
Shares held in trust for deferred compensation plans, at cost	46,057		32,265
Total	$	47,159	$	33,367

At March 31, 2012, TCF had 3,199,988 outstanding warrants to purchase common stock with a strike price of $16.93 per share. Upon completion of the U.S. Treasury’s secondary public offering of the warrants issued under the Capital Purchase Program (“CPP”) in December of 2009, the warrants became publicly traded on the New York Stock Exchange under the symbol “TCBWS.” As a result, TCF has no further obligations to the Federal Government in connection with the CPP.

TCF has a joint venture with The Toro Company (“Toro”) called Red Iron Acceptance, LLC (“Red Iron”). Red Iron provides U.S. distributors and dealers and select Canadian distributors of the Toro® and Exmark® branded products with

reliable, cost-effective sources of financing. TCF and Toro maintain ownership interest of 55% and 45%, respectively, in Red Iron. As TCF has a controlling financial interest in Red Iron, its financial results are consolidated in TCF’s financial statements. Toro’s interest is reported as a non-controlling interest within equity and qualifies as Tier 1 regulatory capital.

TCF continues to be well-capitalized based on the capital requirements determined by the Federal Reserve Board and the Office of the Comptroller of the Currency (“OCC”). The following table sets forth TCF’s and TCF 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. Decreases since December 31, 2011 in TCF’s Tier 1 and total risk-based capital are the result of the balance sheet repositioning completed during March 2012, partially offset by earnings from operations during the three months ended March 31, 2012.

					Minimum				Well-Capitalized
	Actual				Capital Requirement (1)				Capital Requirement (1)
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount			Ratio
As of March 31, 2012
Tier 1 leverage capital:(2)
TCF	$	1,431,565	7.68	%	$	745,138	4.00	%	N.A		.	N.A	.
TCF Bank	1,390,737		7.47		744,912		4.00		$	931,140		5.00	%
Tier 1 risk-based capital:
TCF	1,431,565		9.97		574,296		4.00		861,443			6.00
TCF Bank	1,390,737		9.69		574,163		4.00		861,245			6.00
Total risk-based capital:
TCF	1,705,518		11.88		1,148,591		8.00		1,435,739			10.00
TCF Bank	1,664,649		11.60		1,148,326		8.00		1,435,408			10.00
As of December 31, 2011
Tier 1 leverage capital:(2)
TCF	$	1,706,926	9.15	%	$	745,887	4.00	%	N.A		.	N.A	.
TCF Bank	1,553,381		8.33		745,940		4.00		$	932,426		5.00	%
Tier 1 risk-based capital:
TCF	1,706,926		12.67		539,013		4.00		808,520			6.00
TCF Bank	1,553,381		11.53		538,829		4.00		808,243			6.00
Total risk-based capital:
TCF	1,994,875		14.80		1,078,026		8.00		1,347,533			10.00
TCF Bank	1,841,273		13.67		1,077,658		8.00		1,347,072			10.00

N.A. Not Applicable.

(1) The minimum and well capitalized requirements are determined by the Federal Reserve for TCF and by the OCC for TCF Bank pursuant to the FDIC Improvement Act of 1991.

(2) The minimum Tier 1 leverage ratio for bank holding companies and banks is 3.0 or 4.0 percent depending on factors specified in regulations issued by federal banking agencies.

(10) Foreign Exchange Contracts

Forward foreign exchange contracts to sell a foreign currency are used to manage the foreign exchange risk associated with certain assets, liabilities and forecasted transactions. Forward foreign exchange contracts represent agreements to exchange a foreign currency for U.S. dollars at an agreed-upon price on an agreed-upon settlement date.

All forward foreign exchange contracts are recognized within other assets or other liabilities at fair value on the Consolidated Statements of Financial Condition. These contracts typically settle within 30 days with the exception of contracts associated with cash flow hedges, which have maturities as long as seven months. The following tables summarize the forward foreign exchange contracts as of March 31, 2012 and December 31, 2011. See Note 11, Fair Value Measurement for additional information.

			At March 31, 2012
			Receivables							Payables
(In thousands)	Notional Amount		Designated as Hedges		Not Designated as Hedges		Total			Designated as Hedges		Not Designated as Hedges		Total
Forward foreign exchange contracts	$	382,637	$	120	$	1,595	$	1,715		$	9	$	199	$	208
Netting adjustments(1)							(1,024		)					(194		)
Net receivable / payable							$	691						$	14

			At December 31, 2011
			Receivables							Payables
(In thousands)	Notional Amount		Designated as Hedges		Not Designated as Hedges		Total			Designated as Hedges		Not Designated as Hedges		Total
Forward foreign exchange contracts	$	176,979	$	-	$	396	$	396		$	3	$	662	$	665
Netting adjustments(1)							(396		)					(381		)
Net receivable / payable							$	-						$	284

(1) Foreign exchange contract receivables and payables, and the related cash collateral received and paid are netted when a legally enforceable master netting agreement exists between TCF and a counterparty.

The value of forward foreign exchange contracts will vary over their contractual term as the related currency exchange rates fluctuate. The accounting for changes in the fair value of a forward foreign exchange contract depends on whether or not the contract has been designated and qualifies as a hedge. To qualify as a hedge, a contract must be highly effective at reducing the risk associated with the exposure being hedged. In addition, for a contract to be designated as a hedge, the risk management objective and strategy must be documented. Hedge documentation must also identify the hedging instrument, the asset or liability and type of risk to be hedged and how the effectiveness of the contract is assessed prospectively and retrospectively. To assess effectiveness, TCF uses statistical methods such as regression analysis. The extent to which a contract has been, and is expected to continue to be effective at offsetting changes in cash flows or the net investment must be assessed and documented at least quarterly. If it is determined that a contract is not highly effective at hedging the designated exposure, hedge accounting is discontinued.

Upon origination of a forward foreign exchange contract, the contract is designated either as a hedge of a forecasted transaction or the variability of cash flows to be paid related to a recognized asset or liability (“cash flow hedge”), or a hedge of the volatility of an investment in foreign operations driven by changes in foreign currency exchange rates (“net investment hedge”). To the extent that a hedge is effective, changes in fair value are recorded within accumulated other comprehensive income (loss), with any ineffectiveness recorded in non-interest expense. Amounts recorded within other comprehensive income (loss) are subsequently reclassified to non-interest expense upon completion of the related transaction. Changes in net investment hedges recorded within other comprehensive income (loss) are subsequently reclassified to non-interest expense during the period in which the foreign investment is substantially liquidated or when other elements of the currency translation adjustment are reclassified to income. If a hedged forecasted transaction is no longer probable, hedge accounting is ceased and any gain or loss included in other comprehensive income (loss) is reported in earnings immediately. Changes in the values of forward foreign exchange contracts that are not designated as hedges are reflected in non-interest expense.

Cash Flow Hedges Foreign exchange contracts, which include forward contracts, were used to manage the foreign exchange risk associated with certain minimum lease payment streams. At March 31, 2012 and December 31, 2011, TCF had $8 thousand of unrealized losses and less than $1 thousand of unrealized gains, respectively, on derivatives classified as cash flow hedges recorded in other comprehensive income (loss), respectively. There were no gains or losses recorded within other comprehensive income (loss) and also reclassified into earnings for the three months ended March 31, 2012. For the three months ended March 31, 2012, losses of less than $1 thousand were excluded from the assessment of TCF’s cash flow hedge effectiveness. The estimated amount to be reclassified from other comprehensive income (loss) into earnings during the next 12 months is a loss of $8 thousand.

Net Investment Hedges Foreign exchange contracts, which include forward contracts and currency options, are used to manage the foreign exchange risk associated with the Company’s net investment in TCF Commercial Finance Canada, Inc., a wholly-owned Canadian subsidiary, along with certain assets, liabilities and forecasted transactions of that subsidiary. The gross amount of related gains or losses included in the foreign currency hedge within other comprehensive income (loss) for the three months ended March 31, 2012 and 2011, were losses of $396 thousand and $426 thousand, respectively.

The following table summarizes the pre-tax impact of foreign exchange activity on other non-interest expense within the Consolidated Statements of Comprehensive Income and Consolidated Statements of Financial Condition, by accounting designation.

	For the Three Months Ended March 31,
(In thousands)	2012			2011
Consolidated Statements of Comprehensive Income:
Foreign exchange gains	$	3,120		$	4,099
Forward foreign exchange contract losses:
Cash flow hedge	-			(3		)
Not designated as hedges	(3,631		)	(4,284		)
Total forward foreign exchange contract losses	(3,631		)	(4,287		)
Net realized loss	$	(511	)	$	(188	)
Consolidated Statements of Financial Condition:
Accumulated other comprehensive income (loss):
Foreign currency translation adjustment	$	385		$	414
Net investment hedge	(396		)	(426		)
Cash flow hedge	(8		)	(81		)
Net unrealized loss	$	(19	)	$	(93	)

TCF executes all of its foreign exchange contracts in the over-the-counter market with large, international financial institutions pursuant to International Swaps and Derivatives Association, Inc. (ISDA) master agreements. These agreements include credit risk-related features that enhance the creditworthiness of these instruments as compared with other obligations of the respective counterparty with whom TCF has transacted by requiring that additional collateral be posted under certain circumstances. No such collateral was posted at March 31, 2012. The amount of collateral required depends on the contract and is determined daily based on market and currency exchange rate conditions. At March 31, 2012, TCF had received $1.3 million of cash collateral, of which $490 thousand was not utilized to offset derivative asset positions because the asset positions were over-collateralized. At December 31, 2011, TCF had received $150 thousand of cash collateral and had posted $135 thousand of cash collateral.

In connection with certain over-the-counter forward foreign exchange contracts, TCF could be required to terminate transactions with certain counterparties in the event that, among other things, TCF Bank’s long-term debt is rated less than BBB- by Standard and Poor’s ratings group or Baa3 by Moody’s ratings group. At March 31, 2012, credit risk-related contingent features existed on forward foreign exchange contracts with a notional value of $130.2 million. In the event TCF was rated less than BB- by Standard and Poor’s, the contract could be terminated or TCF may be required to provide approximately $2.6 million of additional collateral.

(11) Fair Value Measurement

Fair values represent the estimated price at which an orderly transaction to sell an asset or to transfer a liability would take place between market participants at the measurement date under current market conditions.

The following table presents the balances of assets and liabilities measured at fair value on a recurring and non-recurring basis.

	Fair Value Measurements at March 31, 2012
(In thousands)	Readily Available Market Prices(1)		Observable Market Prices(2)		Company Determined Market Prices(3)		Total at Fair Value
Recurring Fair Value Measurements:
Securities available for sale:
Mortgage-backed securities:
U.S. Government sponsored enterprises and federal agencies	$	-	$	727,191	$	-	$	727,191
Other	-		-		146		146
Other securities	1,457		-		100		1,557
Forward foreign currency contracts	-		1,715		-		1,715
Assets held in trust for deferred compensation plans(4)	11,089		-		-		11,089
Total assets	$	12,546	$	728,906	$	246	$	741,698
Forward foreign currency contracts	$	-	$	208	$	-	$	208
Total liabilities	$	-	$	208	$	-	$	208
Nonrecurring Fair Value Measurements:
Loans(5):
Commercial	$	-	$	-	$	30,826	$	30,826
Real estate owned(6):
Consumer	-		-		64,527		64,527
Commercial	-		-		41,858		41,858
Repossessed and returned assets(6)	-		2,630		172		2,802
Investments(7)	-		-		3,416		3,416
Total non-recurring fair value measurements	$	-	$	2,630	$	140,799	$	143,429

(1) Considered Level 1 under Accounting Standards Codification (“ASC”)Topic 820, Fair Value Measurements and Disclosures (“ASC 820”).

(2) Considered Level 2 under ASC 820.

(3) Considered Level 3 under ASC 820 and are 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 to the participants in these plans.

(5) Represents the carrying value of loans for which impairment reserves are determined based on the appraisal value of the collateral.

(6) Amounts do not include assets held at cost at March 31, 2012.

(7) Represents the carrying value of other investments which were recorded at fair value determined by using quoted prices, when available, and
incorporating results of internal pricing techniques and observable market information.

	Fair Value Measurements at December 31, 2011
(In thousands)	Readily Available Market Prices(1)		Observable Market Prices(2)		Company Determined Market Prices(3)		Total at Fair Value
Recurring Fair Value Measurements:
Securities available for sale:
Mortgage-backed securities:
U.S. Government sponsored enterprises and federal agencies	$	-	$	2,322,336	$	-	$	2,322,336
Other	-		-		152		152
Other securities	252		-		1,298		1,550
Forward foreign currency contracts	-		396		-		396
Assets held in trust for deferred compensation plans(4)	9,833		-		-		9,833
Total assets	$	10,085	$	2,322,732	$	1,450	$	2,334,267
Forward foreign currency contracts	$	-	$	665	$	-	$	665
Total liabilities	$	-	$	665	$	-	$	665
Nonrecurring Fair Value Measurements:
Loans(5)	$	-	$	-	$	29,003	$	29,003
Real estate owned(6)	-		-		122,263		122,263
Repossessed and returned assets(6)	-		3,889		270		4,159
Investments(7)	-		-		4,244		4,244
Total non-recurring fair value measurements	$	-	$	3,889	$	155,780	$	159,669

(1) Considered Level 1 under ASC 820.

(2) Considered Level 2 under ASC 820.

(3) Considered Level 3 under ASC 820 and are 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 to the participants in these plans.

(5) Represents the carrying value of loans for which impairment reserves are determined based on the appraisal value of the collateral.

(6) Amounts do not include assets held at cost at December 31, 2011.

The change in total assets carried at fair value using Company Determined Market Prices, from $1.5 million at December 31, 2011 to $246 thousand at March 31, 2012, was the result of decreases in fair value of $100 thousand recorded within other comprehensive income (loss), reductions due to principal paydowns of $6 thousand, and transfers to securities measured at fair value using Readily Available Market Prices from securities measured using Company Determined Market Prices of $1.1 million. The transfer was recognized as of the date of TCF’s adoption of ASU 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS.

The following is a description of valuation methodologies used for assets and liabilities recorded at fair value on a recurring basis.

Securities Available for Sale Securities available for sale consist primarily of U.S. Government sponsored enterprise and federal agency securities. The fair value of U.S. Government sponsored enterprise securities is recorded using prices obtained from independent asset pricing services that are based on observable transactions, but not quoted markets, and are classified as Level 2 assets. Management reviews the prices obtained from independent asset pricing services for unusual fluctuations and comparisons to current market trading activity, but does not adjust these prices.

Other securities, for which there is little or no market activity, are categorized as Level 3 assets. Other securities classified as Level 3 assets include foreign debt securities and previously included equity investments in other thinly traded financial institutions. The fair value of these assets is determined by using quoted prices, when available, and incorporating results of internal pricing techniques and observable market information, which is adjusted for security specific information, such as financial statement strength, earnings history, disclosed fair value measurements, recorded impairments and key financial ratios, to determine fair value. Other securities, for which there are active markets and routine trading volume, are categorized as Level 1 assets.

Forward Foreign Exchange Contracts TCF’s forward foreign exchange contracts are executed in over-the-counter markets and are valued using a cash flow model that includes key inputs such as foreign exchange rates and, in accordance with GAAP, an assessment of the risk of counterparty non-performance. The risk of counterparty non-performance is based on external assessments of credit risk. The majority of these contracts are based on observable transactions, but not quoted markets, and are classified as Level 2 assets and liabilities. As permitted under GAAP, TCF has elected to net derivative receivables and derivative payables and the related cash collateral received and paid, when a legally enforceable master netting agreement exists. For purposes of the previous table, the derivative receivable and payable balances are presented gross of this netting adjustment.

Assets Held in Trust for Deferred Compensation Assets held in trust for deferred compensation plans include investments in publicly traded stocks, excluding TCF common stock reported in treasury and other equity, and U.S. Treasury notes. The fair value of these assets is based upon prices obtained from independent asset pricing services based on active markets.

The following is a description of valuation methodologies used for assets measured on a non-recurring basis.

Loans Impaired loans for which repayment of the loan is expected to be provided solely by the value of the underlying collateral are considered collateral dependent and are valued based on the fair value of such collateral, less estimated selling costs. Selling costs are generally calculated as 5% to 10% of the underlying collateral.

Real Estate Owned and Repossessed and Returned Assets The fair value of real estate owned is based on independent full appraisals, real estate broker’s price opinions, or automated valuation methods, less estimated selling costs. Selling costs are generally calculated as 5% to 10% of the underlying collateral. Certain properties require assumptions that are not observable in an active market in the determination of fair value. The fair value of repossessed and returned assets is based on available pricing guides, auction results or price opinions, less estimated selling costs. Assets acquired through foreclosure, repossession or returned to TCF are initially recorded at the lower of the loan or lease carrying amount or fair value less estimated selling costs at the time of transfer to real estate owned or repossessed and returned assets. Real estate owned and repossessed and returned assets were written down $5.4 million and included in foreclosed real estate and repossessed assets, net expense, for the three months ended March 31, 2012.

(12) Fair Value of Financial Instruments

TCF is required to disclose the estimated fair value of financial instruments, both assets and liabilities on and off the balance sheet, for which it is practicable to estimate fair value. These fair value estimates were made at March 31, 2012 and December 31, 2011, based on relevant market information and information about the financial instruments. Fair value estimates are intended to represent the price at which an orderly transaction to sell an asset or transfer liability would take place between market participants at the measurement date under current market conditions. However, given there is no active market or observable market transactions for many of TCF’s financial instruments, the Company has made estimates of fair values which are subjective in nature, involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimated values.

The carrying amounts and estimated fair values of the Company’s financial instruments are set forth in the following table. This information represents only a portion of TCF’s balance sheet, and not the estimated value of the Company as a whole. Non-financial instruments such as the value of TCF’s branches and core deposits, leasing operations and the future revenues from TCF’s customers are not reflected in this disclosure. Therefore, this information is of limited use in assessing the value of TCF.

	Level in	At March 31,						At December 31,
	Fair Value	2012						2011
	Measurement	Carrying			Estimated			Carrying			Estimated
(In thousands)	Hierarchy	Amount			Fair Value			Amount			Fair Value
Financial instrument assets:
Cash and due from banks	Level 1	$	705,642		$	705,642		$	1,389,704		$	1,389,704
Investments	Level 1	161,924			161,924			150,797			150,797
Investments	Level 3	6,516			6,516			6,983			6,983
Securities available for sale	Level 1	1,457			1,457			252			252
Securities available for sale	Level 2	727,191			727,191			2,322,336			2,322,336
Securities available for sale	Level 3	246			246			1,450			1,450
Forward foreign exchange contracts	Level 2	691			691			-			-
Loans and leases held for sale	Level 3	1,918			2,008			14,321			14,524
Interest-only strips	Level 3	23,675			23,675			22,436			22,436
Loans:
Consumer real estate	Level 3	6,815,909			6,551,303			6,895,291			6,549,277
Commercial real estate	Level 3	3,221,175			3,166,444			3,198,698			3,154,724
Commercial business	Level 3	245,914			239,513			250,794			242,331
Equipment finance loans	Level 3	1,143,063			1,151,711			1,110,803			1,118,271
Inventory finance loans	Level 3	1,637,958			1,629,082			624,700			623,651
Auto finance	Level 3	139,047			141,852			3,628			3,628
Other	Level 3	29,178			26,748			34,885			30,665
Total financial instrument assets		$	14,861,504		$	14,536,003		$	16,027,078		$	15,631,029
Financial instrument liabilities:
Checking, savings and money market deposits	Level 1	$	11,550,409		$	11,550,409		$	11,136,389		$	11,136,389
Certificates of deposit	Level 2	1,208,631			1,211,814			1,065,615			1,068,793
Short-term borrowings	Level 1	1,157,189			1,157,189			6,416			6,416
Long-term borrowings	Level 2	1,962,053			1,984,849			4,381,664			4,913,637
Forward foreign exchange contracts	Level 2	14			14			284			284
Total financial instrument liabilities		$	15,878,296		$	15,904,275		$	16,590,368		$	17,125,519
Financial instruments with off-balance sheet risk: (1)
Commitments to extend credit (2)	Level 2	$	30,996		$	30,996		$	31,210		$	31,210
Standby letters of credit (3)	Level 2	(41		)	(41		)	(71		)	(71		)
Total financial instruments with off-balance-sheet risk		$	30,955		$	30,955		$	31,139		$	31,139

(1) Positive amounts represent assets, negative amounts represent liabilities.

(2) Carrying amounts are included in other assets.

(3) Carrying amounts are included in accrued expenses and other liabilities.

The carrying amounts of cash and due from banks and accrued interest payable and receivable approximate their fair values due to the short period of time until their expected realization. Securities available for sale, forward foreign

exchange contracts and assets held in trust for deferred compensation plans are carried at fair value (see Note 11, Fair Value Measurement). Certain financial instruments, including lease financings, discounted lease rentals and all non-financial instruments are excluded from fair value of financial instrument disclosure requirements. The following methods and assumptions are used by TCF in estimating fair value for its remaining financial instruments, all of which are issued or held for purposes other than trading.

Investments The carrying value of investments in FHLB stock and Federal Reserve stock approximates fair value. The fair value of other investments is estimated based on discounted cash flows using current market rates and consideration of credit exposure.

Loans and Leases Held for Sale Auto loans and equipment finance leases held for sale are carried at the lower of cost or fair value. The cost of auto loans held for sale includes the unpaid principal balance, net of deferred loan fees and costs and dealer participation premiums. Estimated fair values are based upon recent loan sale transactions and any available price quotes on loans with similar coupons, maturities and credit quality.

Interest-Only Strips The fair value of the interest-only strips represents the present value of future cash flows to be generated by the loans, in excess of the interest paid to investors and servicing revenue received on the loans, and is included in other assets in the Consolidated Statements of Financial Condition. This excess interest represents future proceeds and is calculated as the contractual loan rate less the fixed rate that will be paid to the investor as specified in the loan sale agreements. TCF uses available market data, along with its own empirical data and discounted cash flow models, to arrive at the estimated fair value of its interest-only strips. The present value of the estimated expected future cash flows to be received is determined by using discount, loss and prepayment rates that the Company believes are commensurate with the risks associated with the cash flows. These assumptions are inherently subject to volatility and uncertainty. As a result, the estimated fair value of the interest-only strips will potentially fluctuate from period to period, and such fluctuations could be significant.

Loans The fair value of loans is estimated based on discounted expected cash flows. These cash flows include assumptions for prepayment estimates over the loans’ remaining life, consideration of the current interest rate environment compared to the weighted average rate of each portfolio, a credit risk component based on the historical and expected performance of each portfolio and a liquidity adjustment related to the current market environment.

Forward Foreign Exchange Contracts Forward foreign exchange contract assets and liabilities are carried at fair value, which is net of the related cash collateral received and paid when a legally enforceable master netting agreement exists between TCF and the counterparty.

Deposits The fair value of checking, savings and money market deposits is deemed equal to the amount payable on demand. The fair value of certificates of deposit is estimated based on discounted cash flows using currently offered market rates. The intangible value of long-term relationships with depositors is not taken into account in the fair values disclosed.

Borrowings The carrying amounts of short-term borrowings approximate their fair values. The fair values of TCF’s long-term borrowings are estimated based on observable market prices and discounted cash flows using interest rates for borrowings of similar remaining maturities and characteristics.

Financial Instruments with Off-Balance Sheet Risk The fair values of TCF’s commitments to extend credit and standby letters of credit are estimated using fees currently charged to enter into similar agreements as commitments and standby letters of credit similar to TCF’s are not actively traded. Substantially all commitments to extend credit and standby letters of credit have floating rates and do not expose TCF to interest rate risk; therefore fair value is approximately equal to carrying value.

(13) Stock Compensation

The following table reflects TCF’s restricted stock and stock option transactions under the TCF Financial Incentive Stock Program during the three months ended March 31, 2012.

	Restricted Stock						Stock Options
			Weighted-Average							Weighted-Average
	Shares		Grant Date Fair Value				Shares		Price Range	Exercise Price
Outstanding at December 31, 2011	2,284,114			$	12.95		2,198,744		$ 12.85 - $15.75		$	14.43
Granted	1,315,000			9.08			-		-		-
Forfeited	(6,580	)		12.24			(42,640	)	15.75		15.75
Vested	(336,737	)		11.16			-		-		-
Outstanding at March 31, 2012	3,255,797			$	11.57		2,156,104		$ 12.85 - $15.75		$	14.40
Exercisable at March 31, 2012	N.A	.		N.A		.	2,156,104				$	14.40

N.A. Not applicable

Unrecognized stock compensation for restricted stock was $25.5 million with a weighted-average remaining amortization period of 2.9 years at March 31, 2012. As of March 31, 2012, the weighted average remaining contractual life of stock options outstanding was 5.58 years.

(14) Employee Benefit Plans

The following tables set forth the net periodic benefit cost (income) included in compensation and employee benefits expense for TCF’s Pension Plan and Postretirement Plan for the three months ended March 31, 2012 and 2011.

	Pension Plan						Postretirement Plan
	Three Months Ended March 31,						Three Months Ended March 31,
(In thousands)	2012			2011			2012			2011
Interest cost	$	441		$	556		$	73		$	108
Return on plan assets	(206		)	(678		)	-			-
Amortization of transition obligation	-			-			-			1
Amortization of prior service cost	-			-			(7		)	-
Net periodic benefit cost (income)	$	235		$	(122	)	$	66		$	109

TCF made no cash contributions to the Pension Plan in either of the three months ended March 31, 2012 or 2011. During the first quarter of 2012, TCF paid $155 thousand for benefits of the Postretirement Plan, compared with $118 thousand for the same period in 2011.

(15) Business Segments

Lending, Funding and Support Services and Other have been identified as reportable operating segments. Lending includes retail lending, commercial banking, leasing and equipment finance, inventory finance and auto finance. Funding includes treasury services and branch banking. Support Services and Other includes holding company and corporate functions that provide data processing, bank operations and other professional services to the operating segments. In 2012, TCF changed the management structure and therefore its segments. Prior periods have been restated to reflect the current structure.

TCF evaluates performance and allocates resources based on each segment’s 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 of each of TCF’s reportable segments, including a reconciliation of TCF’s consolidated totals.

						Support Services &
(In thousands)	Lending		Funding			Other			Eliminations			Consolidated
For the Three Months Ended
March 31, 2012:
Revenues from external customers:
Interest income	$	206,558	$	20,971		$	-		$	-		$	227,529
Non-interest income	29,060		136,221			64			-			165,345
Total	$	235,618	$	157,192		$	64		$	-		$	392,874
Net interest income	$	122,955	$	57,844		$	11		$	(637	)	$	180,173
Provision for credit losses	48,941		(399		)	-			-			48,542
Non-interest income	29,060		136,233			37,329			(37,277		)	165,345
Non-interest expense	85,033		664,012			36,940			(37,277		)	748,708
Income tax expense (benefit)	6,335		(174,526		)	(1,416		)	(637		)	(170,244		)
Income (loss) after income tax expense	11,706		(295,010		)	1,816			-			(281,488		)
Income attributable to non-controlling interest	1,406		-			-			-			1,406
Net income (loss) attributable to common stockholders	$	10,300	$	(295,010	)	$	1,816		$	-		$	(282,894	)
Total assets	$	15,457,367	$	6,430,745		$	339,232		$	(4,393,887	)	$	17,833,457

For the Three Months Ended
March 31, 2011:
Revenues from external customers:
Interest income	$	214,761	$	21,142		$	-		$	-		$	235,903
Non-interest income	28,900		85,289			57			-			114,246
Total	$	243,661	$	106,431		$	57		$	-		$	350,149
Net interest income	$	115,969	$	58,526		$	15		$	(470	)	$	174,040
Provision for credit losses	45,738		(464		)	-			-			45,274
Non-interest income	28,900		89,782			34,065			(38,501		)	114,246
Non-interest expense	79,462		119,617			33,318			(39,418		)	192,979
Income tax expense (benefit)	7,079		11,498			335			(140		)	18,772
Income after income tax expense	12,590		17,657			427			587			31,261
Income attributable to non-controlling interest	989		-			-			-			989
Net income attributable to common stockholders	$	11,601	$	17,657		$	427		$	587		$	30,272
Total assets	$	14,987,535	$	7,007,062		$	217,493		$	(3,499,954	)	$	18,712,136

(16) Earnings Per Common Share

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

	Three Months Ended
	March 31,
(Dollars in thousands, except per-share data)	2012			2011
Basic (Loss) Earnings Per Common Share
Net (loss) income attributable to common stockholders	$	(282,894	)	$	30,272
Earnings allocated to participating securities	20			109
(Loss) earnings allocated to common stock	$	(282,914	)	$	30,163
Weighted-average shares outstanding	161,225,810			145,641,113
Restricted stock	(2,719,387		)	(1,246,320		)
Weighted-average common shares outstanding for basic earnings per common share	158,506,423			144,394,793
Basic (loss) earnings per share	$	(1.78	)	$	.21

Diluted (Loss) Earnings Per Common Share
(Loss) earnings allocated to common stock	$	(282,914	)	$	30,164
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	158,506,423			144,394,793
Net dilutive effect of:
Non-participating restricted stock	-			99,413
Stock options	-			244,585
Weighted-average common shares outstanding for diluted earnings per common share	158,506,423			144,738,791
Diluted (loss) earnings per share	$	(1.78	)	$	.21

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, stock options, and warrants are included in the calculation of diluted earnings per common share, using the treasury stock method.

For the three months ended March 31, 2011, 526 thousand shares related to non-participating restricted stock and 3.2 million warrants were outstanding and not included in the computation of diluted earnings per common share because these shares were anti-dilutive.

(17) Other Expense

Other expense consists of the following.

	Three Months Ended
	March 31,
(In thousands)	2012		2011
Card processing and issuance cost	$	4,074	$	4,463
Telecommunications	3,518		2,943
Outside processing	2,948		3,034
Professional fees	2,884		3,683
Postage and courier	2,766		2,485
Deposit account losses	2,185		2,071
Office supplies	1,862		1,717
ATM processing	1,094		1,193
Other	15,965		12,977
Total other expense	$	37,296	$	34,566

(18) Litigation Contingencies

From time to time, TCF is also a party to other 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 collections activities. TCF may also be subject to enforcement action by federal regulators, including the Securities and Exchange Commission, the Federal Reserve and the OCC. 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 is subject to such actions brought against it from time to time. Litigation is often unpredictable and the actual results of litigation cannot be determined and therefore the ultimate resolution of a matter and the possible range of loss associated with certain potential outcomes cannot be established. Based on our current understanding of these pending legal proceedings, management does not believe that judgments or settlements arising from pending or threatened legal matters, individually or in the aggregate, would have a material adverse effect on the consolidated financial position, operating results or cash flows of TCF. TCF is also subject to regulatory examinations and TCF’s regulatory authorities may impose sanctions on TCF for a failure to maintain regulatory compliance. TCF is currently subject to a Consent Order with the OCC relating to its Bank Secrecy Act (“BSA”) compliance. The Consent Order does not call for the payment of a civil money penalty; however, the OCC has issued a written notice to TCF related to TCF’s BSA compliance deficiencies. After the OCC’s review of TCF’s response to the notice, the OCC may impose a monetary penalty related to these findings. TCF is currently not able to estimate a reasonable range of costs relating to that possibility.

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 bank holding company based in Wayzata, Minnesota. Its principal subsidiary, TCF National Bank (“TCF Bank”), is headquartered in South Dakota. TCF had 434 banking offices in Minnesota, Illinois, Michigan, Colorado, Wisconsin, Indiana, Arizona and South Dakota (TCF’s primary banking markets) at March 31, 2012.

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 internet, mobile and telephone 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 the development of new products and services, new branch expansion and acquisitions. 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 Lending and Funding. Lending includes retail lending, commercial banking, leasing and equipment finance, inventory finance and auto finance. TCF refers to its combined leasing and equipment finance, inventory finance and auto finance businesses as Specialty Finance. Funding includes branch banking and treasury services. Treasury services includes the Company’s investment and borrowing portfolios and management of capital, debt and market risks, including interest rate and liquidity risks.

TCF’s lending strategy is to originate high credit quality and primarily secured loans and leases. TCF’s retail lending operation offers fixed- and variable-rate loans and lines of credit secured by residential real estate properties. Commercial loans are generally made on properties or to customers located within TCF’s primary banking markets. The leasing and equipment finance businesses consist of TCF Equipment Finance, Inc., which delivers equipment finance solutions to businesses in select markets, and Winthrop Resources Corporation, which 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. TCF Inventory Finance originates commercial variable-rate loans to businesses in the United States and Canada which are secured by equipment under a floorplan arrangement and supported by repurchase agreements from original equipment manufacturers. In November 2011, TCF entered into the auto finance business with its acquisition of Gateway One Lending & Finance, LLC (“Gateway One”). Gateway One currently originates and services loans on new and used autos in 31 states, and is expected to expand into a nationwide business.

Net interest income, the difference between interest income earned on loans and leases, securities available for sale, investments and other interest-earning assets and interest paid on deposits and borrowings, represented 52.1% of TCF’s total revenue for the three months ended March 31, 2012. Net interest income can change significantly from period to period based on general levels of interest rates, customer prepayment patterns, the mix of interest-earning assets and the mix of interest-bearing and non-interest bearing deposits and borrowings. TCF manages the risk of changes in interest rates on its net interest income through an Asset/Liability Committee and through related interest-rate risk monitoring and management policies. See Part I, Item 3. Quantitative and Qualitative Disclosures about Market Risk, for further information.

Non-interest income is a significant source of revenue for TCF and an important factor in TCF’s results of operations. Increasing fee and service charge revenue has been challenging as a result of economic conditions, changing customer behavior and the impact of the implementation of new regulation. 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. Key drivers of non-interest income are the fee structure, number of deposit accounts and related transaction activity.

The following portions of Management’s Discussion and Analysis of Financial Condition and Results of Operations focus in more detail on the results of operations for the three months ended March 31, 2012 and 2011, and on information about TCF’s balance sheet, loan and lease portfolio, liquidity, funding resources, capital and other matters.

RESULTS OF OPERATIONS

Performance Summary

TCF’s net loss for the first quarter of 2012 was $282.9 million, or $1.78 per share including a net, after tax charge of $295.8 million, or $1.87 per share, related to the repositioning of TCF’s balance sheet. TCF reported net income of $30.3 million, or 21 cents per share, in the first quarter of 2011.

On March 13, 2012, TCF announced that it has taken steps to reposition its balance sheet by prepaying $3.6 billion of long-term debt and selling $1.9 billion of mortgage-backed securities, which it anticipates will increase net interest margin and reduce interest rate risk going forward. TCF’s current asset growth strategy and the outlook of the interest rate environment made it prudent for TCF to develop and execute a comprehensive balance sheet repositioning transaction. A reliance on longer term, fixed-rate debt was appropriate for TCF’s previous strategy of growth in real estate assets with longer durations, such as residential and commercial real estate loans and mortgage-backed securities. Given TCF’s current strategic focus on growth in nationally-oriented specialty finance assets with shorter durations and/or variable interest rates, a more flexible funding structure will significantly increase TCF’s ability to maximize net interest income and net interest margin going forward.

TCF’s long-term, fixed-rate debt was originated at market rates prior to the economic crisis. At the time of the balance sheet repositioning, the interest rates on these borrowings were significantly above current market rates. In addition, in late January 2012, the Federal Reserve forecasted interest rates to remain at historically low levels through at least 2014. As a result, this action better positioned TCF for the current interest rate outlook while reducing interest rate risk tied to longer duration, fixed-rate securities.

Return on average assets was negative 5.96% for the first quarter of 2012, compared with .68% for the same period in 2011. Return on average common equity was negative 63.38% for the first quarter of 2012, compared with 8.00% for the same period in 2011.

Operating Segment Results

The financial results of TCF’s operating segments are located in Note 15 of the Notes to Consolidated Financial Statements included in Part 1, Item 1. Financial Statements.

Lending, consisting of retail lending, commercial banking and specialty finance, reported net income of $10.3 million and $11.6 million for the first quarter of 2012 and 2011, respectively. Lending net-interest income totaled $123 million for the first quarter of 2012, up 6% from $116 million for the same period in 2011. This increase is primarily due to growth in the inventory finance portfolio as the Bombardier Recreational Products (“BRP”) program continues to ramp up and growth in the auto finance portfolio. These increases were partially offset by decreases in the consumer and commercial real estate portfolio balances and average yields. Lending provision for credit losses was $48.9 million and $45.7 million for the first quarter of 2012 and 2011, respectively. The increase in the provision from the first quarter of 2011 was primarily due to increased reserves on the inventory finance portfolio as a result of increased loan balances.

Lending non-interest income totaled $29.1 million for the first quarter of 2012, essentially flat compared with $28.9 million during the same period in 2011. Lending non-interest expense totaled $85 million for the first quarter of 2012, up 7% from $79.5 million for the same period in 2011. The increase from the first quarter of 2011 was primarily due to the newly acquired auto finance business as well as increased headcount related to achieving staffing levels for increased assets in the BRP® program in Inventory Finance.

Funding, consisting of branch banking and treasury services, reported a net loss of $295 million for the first quarter of 2012 and net income of $17.7 million for the same period in 2011. The net loss was primarily due to the balance sheet

repositioning through losses recognized on the termination of long-term borrowings, partially offset by gains on sales of mortgage backed securities. Funding net interest income totaled $57.8 million for the first quarter of 2012, down 1.2% from $58.5 million for the same period in 2011.

Funding non-interest income totaled $136.2 million for the first quarter of 2012, up 51.7% from $89.8 million for the same 2011 period. The increase in non-interest income from the first quarter of 2011 was primarily due to gains on securities in the first quarter of 2012 related to the balance sheet repositioning, partially offset by lower fee income. Funding non-interest expense totaled $664 million for the first quarter of 2012, up $544.4 million from $119.6 million for the same 2011 period. The increase was primarily due to the loss on termination of debt in the first quarter of 2012.

Consolidated Net Interest Income

Net interest income for the first quarter of 2012 increased $6.1 million, or 3.5%, compared with the first quarter of 2011. This increase is primarily due to a lower average cost of borrowings resulting from the balance sheet repositioning completed in March 2012, lower average borrowings due to 2011 debt maturities replaced with deposits, decreased rates on various deposit products, and higher average loan and lease balances as a result of growth in the inventory finance and auto finance portfolios. These increases were partially offset by decreases in the consumer and commercial real estate portfolio balances and average yields. Net interest income for the first quarter of 2012 increased $6.7 million, or 3.9%, compared with the fourth quarter of 2011. This increase is primarily due to increased growth in the inventory finance portfolio, lower average cost of borrowings offset by lower mortgage-backed securities balances resulting from the balance sheet repositioning completed in March 2012 and growth in the auto finance portfolio. These increases were partially offset by decreases in the consumer and commercial real estate portfolio average balances and yields.

Net interest margin in the first quarter of 2012 was 4.14%, compared with 4.06% in the first quarter of 2011. This increase is primarily due to a lower average cost of borrowings due to the effects of the balance sheet repositioning completed in March 2012, lower average borrowings due to 2011 debt maturities replaced with deposits, as well as decreased rates on various deposit products. These increases were partially offset by a decrease in yields in the consumer, commercial, and leasing and equipment finance portfolios as a result of the lower interest rate environment. Net interest margin increased by 22 basis points from 3.92% in the fourth quarter of 2011. This increase is primarily due to a lower average cost of borrowings due to the effects of the balance sheet repositioning completed in March 2012. This increase was partially offset by decreased levels of higher yielding loans and leases in the consumer, commercial, and leasing and equipment finance portfolios as a result of the lower interest rate environment. See Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Consolidated Financial Condition Analysis – Borrowings and Liquidity for further discussion.

Achieving net interest income growth over time depends primarily on TCF’s ability to generate growth in higher-yielding assets and low or no interest-cost deposits. While interest rates and consumer preferences continue to change over time, TCF is currently slightly 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). Being liability sensitive generally means that TCF’s net interest income is subject to compression in rising interest rate environments. Since TCF is primarily deposit funded, the degree of the impact on net interest income is somewhat controlled by TCF, but is impacted by how its competitors price comparable products.

See Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Consolidated Financial Condition Analysis – Deposits and Part I, Item 3. Quantitative and Qualitative Disclosures about Market Risk for further discussion on TCF’s interest rate risk position.

The following tables summarizes TCF’s average balances, interest, dividends and yields and rates on major categories of TCF’s interest-earning assets and interest-bearing liabilities on a fully tax equivalent basis.

	Three Months Ended March 31,
	2012					2011
	Average				Yields and	Average				Yields and
(Dollars in thousands)	Balance		Interest		Rates (1)	Balance		Interest		Rates (1)
Assets:
Investments and other	$	745,861	$	2,388	1.29 %	$	578,064	$	1,801	1.26 %
U.S. Government sponsored entities:
Mortgage-backed securities, fixed rate	2,087,017		19,109		3.66	1,961,234		19,411		3.96
U.S. Treasury securities	-		-		-	47,269		13		.11
Other securities	230		3		5.24	387		5		5.21
Total securities available for sale (2)	2,087,247		19,112		3.66	2,008,890		19,429		3.87
Loans and leases held for sale	5,872		45		3.08	-		-		-
Loans and leases:
Consumer real estate:
Fixed-rate	4,443,148		66,155		5.99	4,734,618		71,806		6.15
Variable-rate	2,401,915		30,068		5.03	2,367,341		30,280		5.19
Total consumer real estate	6,845,063		96,223		5.65	7,101,959		102,086		5.83
Commercial:
Fixed- and adjustable-rate	2,737,848		38,209		5.61	2,912,593		42,042		5.85
Variable-rate	719,872		7,512		4.20	710,870		7,657		4.37
Total commercial	3,457,720		45,721		5.32	3,623,463		49,699		5.56
Leasing and equipment finance	3,128,329		44,001		5.63	3,119,669		47,557		6.10
Inventory finance	1,145,183		18,725		6.58	872,785		15,325		7.12
Auto finance	85,562		1,583		7.44	-		-		-
Other	17,582		368		8.42	21,757		476		8.87
Total loans and leases (3)	14,679,439		206,621		5.65	14,739,633		215,143		5.90
Total interest-earning assets	17,518,419		228,166		5.24	17,326,587		236,373		5.51
Other assets	1,379,289					1,154,433
Total assets	$	18,897,708				$	18,481,020
Liabilities and Equity:
Non-interest bearing deposits:
Retail	$	1,359,781				$	1,457,723
Small business	708,416					668,316
Commercial and custodial	305,064					291,513
Total non-interest bearing deposits	2,373,261					2,417,552
Interest-bearing deposits:
Checking	2,214,192		902		.16	2,104,433		1,356		.26
Savings	5,882,730		5,436		.37	5,424,327		7,497		.56
Money market	662,493		610		.37	673,503		908		.55
Subtotal	8,759,415		6,948		.32	8,202,263		9,761		.48
Certificates of deposit	1,135,673		2,113		.75	1,092,537		2,243		.83
Total interest-bearing deposits	9,895,088		9,061		.37	9,294,800		12,004		.52
Total deposits	12,268,349		9,061		.30	11,712,352		12,004		.42
Borrowings:
Short-term borrowings	436,171		329		.30	83,038		92		.45
Long-term borrowings	3,817,165		37,966		4.00	4,702,729		49,767		4.28
Total borrowings	4,253,336		38,295		3.62	4,785,767		49,859		4.22
Total interest-bearing liabilities	14,148,424		47,356		1.35	14,080,567		61,863		1.78
Total deposits and borrowings	16,521,685		47,356		1.15	16,498,119		61,863		1.52
Other liabilities	577,142					460,434
Total liabilities	17,098,827					16,958,553
Total TCF Financial Corp. stockholders’ equity	1,785,375					1,514,572
Non-controlling interest in subsidiaries	13,506					7,895
Total equity	1,798,881					1,522,467
Total liabilities and equity	$	18,897,708				$	18,481,020
Net interest income and margin			$	180,810	4.14 %			$	174,510	4.06 %

(1) Annualized.

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

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

Provision for Credit Losses

The following table summarizes the composition of TCF’s provision for credit losses and percentage of the total provision expense for the three months ended March 31, 2012 and 2011.

	Three Months Ended
	March 31,									Change
(Dollars in thousands)	2012				2011					$			%
Consumer real estate	$	36,078	74.3	%	$	36,550		80.7	%	$	(472	)	(1.3	)%
Commercial	5,014		10.3		5,419			12.0		(405		)	(7.5	)
Leasing and equipment finance	515		1.1		2,760			6.1		(2,245		)	(81.3	)
Inventory finance	5,191		10.7		989			2.2		4,202			N.M	.
Auto finance	1,021		2.1		-			-		1,021			N.M	.
Other	723		1.5		(444		)	(1.0	)	1,167			N.M	.
Total	$	48,542	100.0	%	$	45,274		100.0	%	$	3,268		7.2	%

N.M. Not Meaningful

TCF recorded provision expense of $48.5 million and $45.3 million in the first quarters of 2012 and 2011, respectively. The increase from the first quarter of 2011 was primarily driven by increases in reserves in inventory finance, as the portfolio has increased 62% since March of 2011, partially offset by decreased provision expense in leasing and equipment finance.

Net loan and lease charge-offs for the first quarters of 2012 and 2011 were $38.9 million, or 1.06% (annualized) of average loans and leases and $55.8 million, or 1.51% (annualized), respectively. Consumer real estate net charge-offs for the first quarters of 2012 and 2011 were relatively flat at $35.7 million and $35.3 million, respectively. Commercial net charge-offs for the first quarters of 2012 and 2011 were $1.5 million and $17.8 million, respectively. The decrease from the first quarter of 2011 was primarily due to lower charge-offs relating to commercial real estate loans, particularly in office buildings, land development, and manufactured housing. Leasing and equipment finance net charge-offs for the first quarters of 2012 and 2011 were $151 thousand and $2.8 million, respectively. The decrease in leasing and equipment finance net charge-offs from the first quarter 2011 was primarily due to decreases in charge-offs in the middle market and small ticket segments.

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, year of loan or lease origination, value of collateral, general economic conditions and management’s assessment of credit risk in the current loan and lease portfolio. See also “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – 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. Non-interest income totaled $165.3 million and $114.2 million for the first quarters of 2012 and 2011, respectively.

Fees and Service Charges

Fees and service charges totaled $41.9 million and $53.5 million for the first quarters of 2012 and 2011, respectively. The decrease in fees and service charges from the first quarter of 2011 was primarily due to changes in customer behaviors and increased levels of checking account attrition.

Card Revenues

Card revenues totaled $13.2 million and $26.6 million for the first quarters of 2012 and 2011, respectively. Compared with the first quarter of 2011, the average interchange rate per transaction decreased due to new debit card interchange regulations which took effect on October 1, 2011.

TCF is the 11th largest issuer of Visa® small business debit cards and the 15th largest issuer of Visa consumer debit cards in the United States, based on payments volume for the three months ended December 31, 2011, as provided by Visa. TCF earns interchange revenue from customer card transactions paid by merchants, not by TCF’s customers. Card products represented 19.4% of banking fee revenue for the three months ended March 31, 2012. Visa has significant litigation against it regarding interchange pricing and there is a risk this revenue could be impacted by any settlement or adverse rulings in such litigation. The continued success of TCF’s debit card program depends significantly on the success and viability of Visa and the continued use by customers and acceptance by merchants of its cards.

The following tables set forth information about TCF’s card business.

	Three Months Ended
	March 31,						Change
(Dollars in thousands)	2012			2011			Amount			%
Average number of checking accounts with a TCF card	1,135,331			1,245,822			(110,491		)	(8.9	)%
Average active card users	732,820			759,053			(26,233		)	(3.5	)
Average number of transactions per card per month	24.4			22.2			2.2			9.9
Sales volume for the three months ended:
Off-line (Signature)	$	1,632,179		$	1,631,179		$	1,000		.1
On-line (PIN)	267,887			236,269			31,618			13.4
Total	$	1,900,066		$	1,867,448		32,618			1.7
Average transaction size (in dollars)	$	35		$	37		(2		)	(5.4	)
Percentage off-line	85.90		%	87.35		%				(145	)bps
Average interchange per transaction	$	.22		$	.50		(.28		)	(56.0	)%
Average interchange rate per transaction	.63		%	1.35		%				(72	)bps

ATM Revenue

For the first quarters of 2012 and 2011, ATM revenue was $6.2 million and $6.7 million, respectively. The decline in ATM revenue was primarily due to fewer fee generating transactions and a reduced ATM fleet.

Leasing and Equipment Finance Revenue

Leasing and equipment finance revenue, including sales-type and operating lease revenues, totaled $22.9 million and $26.8 million for the first quarters of 2012 and 2011, respectively. The decline from the first quarter of 2011 was attributable to differing levels of customer-initiated lease activity. Leasing and equipment finance revenues may fluctuate from period to period based on customer-driven factors not within TCF’s control.

Gains on securities, net

During the first quarter of 2012 TCF sold $1.9 billion of mortgage-backed securities at a pre-tax gain of $77 million. There were no sales of mortgage-backed securities during the first quarter of 2011.

Consolidated Non-Interest Expense

Non-interest expense totaled $748.7 million for the first quarter of 2012, up $555.7 million from $193 million for the same 2011 period.

Compensation and Employee Benefits

Compensation and employee benefits expense for the first quarter of 2012 increased $6.6 million, or 7.4%, from the first quarter of 2011. The increase from the first quarter of 2011 was primarily due to the newly acquired auto finance business as well as increased headcount related to achieving staffing levels for increased assets in the BRP program in Inventory Finance.

FDIC Insurance

FDIC insurance expense for the first quarter of 2012 decreased $809 thousand, or 11.2%, from the first quarter of 2011. The decrease was primarily due to the balance sheet repositioning during March of 2012 which resulted in a lower assessment base and changes in the FDIC insurance rate calculations for banks over $10 billion in total assets, which were implemented on April 1, 2011.

Deposit Account Premiums

Deposit account premium expense totaled $6 million for the first quarter of 2012, compared with $3.2 million for the same 2011 period. The increase was primarily due to changes in the account premium programs beginning in April 2011, resulting in increased premiums paid to qualifying accounts.

Advertising and Marketing

Advertising and marketing expense totaled $2.6 million for the first quarter of 2012, compared with $3.2 million for the same 2011 period. The decrease was due to the discontinuation of the debit card rewards program in the third quarter of 2011 in response to new federal regulation regarding debit card interchange fees.

Loss on Termination of Debt

During March 2012, TCF restructured $3.6 billion of long term borrowings that had a 4.3% weighted average rate at a pre-tax loss of $551 million. TCF replaced $2.1 billion of 4.4% weighted average fixed-rate, Federal Home Loan Bank advances with a mix of floating and fixed-rate, long- and short-term borrowings with a current weighted average rate of .5%. In addition, TCF terminated $1.5 billion of 4.2% weighted average fixed-rate borrowings under repurchase agreements.

Foreclosed Real Estate and Repossessed Assets, Net

Foreclosed real estate and repossessed assets, net expenses totaled $11 million for the first quarter of 2012, compared with $12.9 million for the same 2011 period. The decrease was primarily due to reduced writedowns on consumer real estate properties as a result of a decrease in the number of properties owned.

Operating Lease Depreciation

Operating lease depreciation totaled $6.7 million for the first quarter of 2012, compared with $7.9 million for the same 2011 period. The decrease was primarily due to the reduction in the operating lease portion of the portfolio.

Other Credit Costs, Net

Other credit costs, net is comprised of consumer real estate loan pool insurance, write-downs on operating leases and reserve requirements for expected losses on unfunded commitments. Other credit costs, net provided a benefit of $288 thousand, compared with net expenses of $2.5 million for the same 2011 period. The current quarter’s benefit was primarily due to reduced premium related expense on consumer real estate loan pool insurance and a decrease in reserves on unfunded commitments.

Visa Indemnification Expense

TCF is a member of Visa U.S.A. for issuance and processing of its card transactions. As a member of Visa, TCF has an obligation to indemnify Visa U.S.A. under its bylaws and Visa under a retrospective responsibility plan, for contingent losses in connection with certain covered litigation (the “Visa contingent indemnification”) disclosed in Visa’s public filings with the SEC based on its membership proportion. TCF is not a party to the lawsuits brought against Visa U.S.A. TCF’s membership proportion in Visa U.S.A. was .16234% at March 31, 2012.

As of March 31, 2012, TCF held 308,219 Visa Inc. Class B shares with no recorded value that are generally restricted from sale, other than to other Class B shareholders, and are subject to dilution as a result of TCF’s indemnification obligation.

At March 31, 2012, TCF had no remaining Visa contingent indemnification liability recorded. TCF’s indemnification obligation for Visa’s covered litigation is a highly judgmental estimate. TCF must rely on Visa’s public disclosures about the covered litigation in making estimates of the Visa contingent indemnification obligation. Visa has significantly funded its covered litigation escrow account at amounts expected to cover any settlements or losses at this time.

Income Taxes

TCF recorded income tax benefit of $170.2 million for the first quarter of 2012, or 37.7% of the loss before income tax benefit, compared with income tax expense $18.8 million, or 37.5%, of income before income tax expense, for the comparable 2011 period.

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 income tax laws, the evaluation of uncertain tax positions, differences between the tax and financial reporting basis 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 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 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 Comprehensive Income. Also, if current period 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

Loans and Leases

The following table sets forth information about loans and leases held in TCF’s portfolio.

	At			At
	March 31,			December 31,			Percentage
(Dollars in thousands)	2012			2011			Change
Consumer real estate:
Consumer real estate:
First mortgage lien	$	4,685,761		$	4,742,423		(1.2	)%
Junior lien	2,130,148			2,152,868			(1.1	)
Total consumer real estate	6,815,909			6,895,291			(1.2	)
Commercial:
Commercial real estate:
Permanent	3,065,828			3,039,488			.9
Construction and development	155,347			159,210			(2.4	)
Total commercial real estate	3,221,175			3,198,698			.7
Commercial business	245,914			250,794			(1.9	)
Total commercial	3,467,089			3,449,492			.5
Leasing and equipment finance:(1)
Equipment finance loans	1,143,063			1,110,803			2.9
Lease financings:
Direct financing leases	1,976,427			2,039,096			(3.1	)
Sales-type leases	29,196			29,219			(.1	)
Lease residuals	126,217			129,100			(2.2	)
Unearned income and deferred lease costs	(156,148		)	(165,959		)	5.9
Total lease financings	1,975,692			2,031,456			(2.7	)
Total leasing and equipment finance	3,118,755			3,142,259			(.7	)
Inventory finance	1,637,958			624,700			162.2
Auto finance	139,047			3,628			N.M	.
Other	29,178			34,885			(16.4	)
Total loans and leases	$	15,207,936		$	14,150,255		7.5	%

N.M. Not meaningful.

(1) Operating leases of $67 million and $69.6 million at March 31, 2012 and December 31, 2011, respectively, are included in other assets in the Consolidated Statements of Financial Condition.

Approximately 74% of the consumer real estate portfolio at March 31, 2012 consisted of closed-end amortizing loans. TCF’s consumer real estate lines of credit require regular payments of interest and do not require regular payments of principal. Outstanding balances on consumer real estate lines of credit were $2.1 billion at March 31, 2012 and December 31, 2011. The average Fair Isaac Corporation (“FICO”) credit score at loan origination for the retail lending portfolio was 727 as of March 31, 2012 and December 31, 2011. As part of TCF’s credit risk monitoring, TCF obtains updated FICO score information quarterly. The average updated FICO score for the retail lending portfolio was 726 at March 31, 2012, compared with 727 at December 31, 2011. As of March 31, 2012, 28.3% of the consumer real estate loan balance has been originated since January 1, 2009, with 2012 net charge offs of .20% (annualized).

TCF continues to expand its commercial lending activities, generally to borrowers located in its primary markets, with a focus on secured lending. At March 31, 2012, approximately 99% of TCF’s commercial real estate and commercial business loans were secured either by real estate or other business assets. At March 31, 2012, approximately 93% of TCF’s commercial real estate loans outstanding were secured by real estate located in its primary banking markets.

The leasing and equipment finance backlog of approved transactions was $513.5 million at March 31, 2012, up from $455.3 million at December 31, 2011.

Credit Quality

The following tables summarize TCF’s loan and lease portfolio based on what TCF believes are the most important credit quality data that should be used to understand the overall condition of the portfolio. Performing classified loans and leases have well-defined weaknesses but may never become non-performing or result in a loss.

	At March 31, 2012
	Performing Loans and Leases (1)								60+ Days		Non-accrual
					Accruing				Delinquent		Loans and		Total Loans
(Dollars in thousands)	Non-classified		Classified (2)		TDRs (3)		Total		and Accruing		Leases		and Leases
Consumer real estate	$	6,149,586	$	-	$	413,364	$	6,562,950	$	103,655	$	149,304	$	6,815,909
Commercial	3,011,101		207,691		109,195		3,327,987		3,425		135,677		3,467,089
Leasing and equipment finance	3,071,833		19,111		845		3,091,789		6,951		20,015		3,118,755
Inventory finance	1,630,126		6,538		-		1,636,664		185		1,109		1,637,958
Auto finance	138,879		-		-		138,879		168		-		139,047
Other	26,288		-		-		26,288		52		2,838		29,178
Total loans and leases	$	14,027,813	$	233,340	$	523,404	$	14,784,557	$	114,436	$	308,943	$	15,207,936
Percent of total loans and leases	92.3%		1.5%		3.4%		97.2%		.8%		2.0%		100.0%

	At December 31, 2011
	Performing Loans and Leases (1)								60+ Days		Non-accrual
					Accruing				Delinquent		Loans and		Total Loans
(Dollars in thousands)	Non-classified		Classified (2)		TDRs (3)		Total		and Accruing		Leases		and Leases
Consumer real estate	$	6,233,515	$	-	$	402,770	$	6,636,285	$	109,635	$	149,371	$	6,895,291
Commercial	2,987,876		234,501		98,448		3,320,825		1,148		127,519		3,449,492
Leasing and equipment finance	3,093,194		21,451		776		3,115,421		6,255		20,583		3,142,259
Inventory finance	616,677		7,040		-		623,717		160		823		624,700
Auto finance	3,231		-		-		3,231		397		-		3,628
Other	34,829		-		-		34,829		41		15		34,885
Total loans and leases	$	12,969,322	$	262,992	$	501,994	$	13,734,308	$	117,636	$	298,311	$	14,150,255
Percent of total loans and leases	91.7%		1.9%		3.5%		97.1%		.8%		2.1%		100.0%

(1) Includes all loans and leases that are not 60+ days delinquent or on non-accrual status.

(2) Excludes classified loans and leases that are accruing TDRs and 60+ days delinquent. “Classified” loans and leases are those for which management has concerns regarding the borrower’s ability to meet the existing terms and conditions, but may never become non-performing or result in a loss.

(3) Excludes accruing TDRs that are 60+ days delinquent.

Performing loans and leases includes all loans and leases that are not over 60-days delinquent or on non-accrual status. Performing loans and leases were 97.2% of total loans and leases at March 31, 2012, a slight increase from 97.1% at December 31, 2011. The increase was due to the growth of higher credit quality inventory finance loans.

Total non-accrual loans at March 31, 2012 increased $10.6 million from December 31, 2011. The increase was primarily due to commercial real estate non-accrual loans increasing $15.2 million, partially offset by a $7 million decrease in commercial business non-accruals. During the three months ended March 31, 2012, non-accrual loans totaling $23.3 million were transferred to real estate owned and $21.2 million migrated to accruing status. Consumer real estate accruing Troubled Debt Restructurings (“TDRs”) increased $12 million from December 31, 2011, the smallest quarterly increase since the second quarter of 2010.

Past Due Loans and Leases

The following tables set forth information regarding TCF’s delinquent loan and lease portfolio, excluding non-accrual loans and leases. Delinquent balances are determined based on the contractual terms of the loan or lease. See Note 7 of the Notes to Financial Statements included in Part I, Item 1. Financial Statements for additional information.

	At March 31,			At December 31,
(Dollars in thousands)	2012			2011
Principal balances:
60-89 days	$	48,180		$	45,531
90 days or more	66,256			72,105
Total	$	114,436		$	117,636

Percentage of loans and leases:
60-89 days	.33		%	.33		%
90 days or more	.44			.52
Total	.77		%	.85		%

The following table summarizes TCF’s over 60-day delinquent loan and lease portfolio by loan type, excluding non-accrual loans and leases.

	At March 31, 2012				At December 31, 2011
(Dollars in thousands)	Principal Balances		Percentage of Portfolio		Principal Balances		Percentage of Portfolio
Consumer real estate:
First mortgage lien	$	88,092	1.93	%	$	87,358	1.89	%
Junior lien	15,563		.74		22,277		1.04
Total consumer real estate	103,655		1.55		109,635		1.63
Commercial real estate	3,067		.10		1,099		.04
Commercial business	358		.16		49		.02
Total commercial	3,425		.10		1,148		.03
Leasing and equipment finance:
Middle market	1,213		.08		1,061		.07
Small ticket	1,594		.22		2,018		.28
Winthrop	2,112		.67		235		.07
Other	-		-		198		.11
Total leasing and equipment finance	4,919		.17		3,512		.13
Inventory finance	185		.01		160		.03
Auto finance	2		-		-		-
Other	52		.20		41		.12
Subtotal (1)	112,238		.77		114,496		.85
Delinquencies in acquired portfolios (2)	2,198		.66		3,140		.84
Total	$	114,436	.77	%	$	117,636	.85	%

(1) Excludes delinquencies and non-accrual loans in acquired portfolios as delinquency and non-accrual migration in these portfolios are not expected to result in losses exceeding the credit reserves netted against the loan balances.

(2) Remaining balances of acquired loans and leases were $332.6 million and $371.9 at March 31, 2012 and December 31, 2011, respectively.

Loan Modifications-Consumer

TCF has maintained several programs designed to assist consumer real estate customers by extending payment dates or reducing customers’ contractual payments (but not forgiving principal). Under these programs, TCF reduces a customer’s contractual payments for a period of time appropriate for the borrower’s condition. All loan modifications are made on a case-by-case basis. Loan modifications are not reported as TDRs in the calendar years after modification if the loans were modified at an interest rate equal to or greater than the yields of new loan originations with comparable risk and the loan is performing based on the terms of the restructuring agreements.

If TCF has not granted a concession as a result of the modification, compared with the original terms, the loan is not considered a TDR. Modifications that are not classified as TDRs primarily involve interest rate changes to current market rates for similarly situated borrowers who have access to alternative funds. Loan modifications to borrowers who are not experiencing financial difficulties are not included in the following reporting of loan modifications.

Although loans classified as TDRs are considered impaired, TCF was able to receive more than 50% of the contractual interest due on accruing consumer real estate TDRs for the three months ended March 31, 2012 by modifying the loan to a qualified customer instead of foreclosing on the property. Only 7.1% of accruing consumer real estate TDRs were more than 60-days delinquent at March 31, 2012, relatively flat when compared with the fourth quarter of 2011. Approximately 3.2% of the $221.7 million accruing consumer real estate TDRs modified during the 15 months preceding March 31, 2012 defaulted during the three months ended March 31, 2012.

Of the $445 million of accruing consumer real estate TDRs at March 31, 2012, $249.1 million were accruing permanent modifications and only 4.1% of the accruing permanent modifications were over 60-days delinquent. Temporary modifications are no longer classified as TDRs once they complete the temporary modification term and the customer is performing for three months under the original contractual terms.

The following table summarizes the balance of accruing modified consumer loans as of March 31, 2012 and December 31, 2011.

	At March 31,			At December 31,
(Dollars in thousands)	2012			2011
Permanently modified accruing TDRs	$	249,149		$	198,882
Temporarily modified accruing TDRs	195,895			234,196
Total accruing TDRs	445,044			433,078
Other loan modifications	4,695			13,397
Total accruing loan modifications	$	449,739		$	446,475
Over 60-day delinquency as a percentage of balance:
Permanently modified accruing TDRs	4.12		%	4.63		%
Temporarily modified accruing TDRs	10.93			9.01
Total accruing TDRs	7.12			7.00
Other loan modifications	41.02			20.66
Total accruing loan modifications	7.47			7.41

Loan Modifications-Other

A commercial loan may be modified through a term extension with a reduction of contractual payments or a change in interest rate. Commercial loan modifications which are not classified as TDRs primarily involve loans on which interest rates were modified to current market rates for similarly situated borrowers who have access to alternative funds or on which TCF received additional collateral or loan conditions. Loan modifications to borrowers who are not experiencing financial difficulties are not included in the following reporting of loan modifications.

Commercial loans that are 90 or more days past due and not well secured at the time of modification remain on non-accrual status. Regardless of whether contractual principal and interest payments are well-secured at the time of modification, equipment finance loans that are 90 or more days past due remain on non-accrual status. All loans modified when on non-accrual status continue to be reported as non-accrual loans until there is sustained repayment performance for six months. At March 31, 2012, over 52% of total commercial TDRs were accruing and TCF was able to recognize all of the contractual interest due on accruing commercial TDRs during the first quarter of 2012. Only four of the 69 accruing commercial TDRs that were modified within the 15 months preceding March 31, 2012, totaling $13.6 million, defaulted

during the first three months of 2012. For additional information regarding TCF’s loan modifications refer to Note 7 of the Notes to Consolidated Financial Statements included in Part I, Item 1. Financial Statements.

The following table summarizes the balance of accruing modified commercial, leasing and equipment finance, and auto finance loans as of March 31, 2012 and December 31, 2011.

	At March 31, 2012
(Dollars in thousands)	Commercial			Leasing and Equipment Finance			Auto Finance
TDRs	$	109,885		$	845		$	-
Other loan modifications	3,477			1,399			1,675
Total accruing loan modifications	$	113,362		$	2,244		$	1,675
Over 60-day delinquency as a percentage of balance:
TDRs	.63		%	-		%	-		%
Other loan modifications	-			11.72			7.16
Total accruing loan modifications	.61			7.31			7.16

	At December 31, 2011
(Dollars in thousands)	Commercial			Leasing and Equipment Finance			Auto Finance
TDRs	$	98,448		$	776		$	-
Other loan modifications	13,318			4,829			-
Total accruing loan modifications	$	111,766		$	5,605		$	-
Over 60-day delinquency as a percentage of balance:
TDRs	-		%	-		%	-		%
Other loan modifications	-			2.40			-
Total accruing loan modifications	-			2.07			-

Non-accrual Loans and Leases

Non-accrual loans and leases increased $10.6 million, or 3.6%, from December 31, 2011, primarily due to an increase in non-accruals on commercial real estate loans. Consumer real estate loans are charged-off to their estimated realizable values less estimated selling costs upon entering non-accrual status. Any necessary additional reserves are established for commercial loans, leasing and equipment finance loans and leases and inventory finance loans when reported as non-accrual. Most of TCF’s non-accrual loans 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.

Non-accrual loans and leases are summarized in the following table.

	At		At
	March 31,		December 31,
(In thousands)	2012		2011
Consumer real estate:
First mortgage lien	$	125,895	$	129,114
Junior lien	23,409		20,257
Total consumer real estate	149,304		149,371
Commercial real estate	119,904		104,744
Commercial business	15,773		22,775
Total commercial	135,677		127,519
Leasing and equipment finance	20,015		20,583
Inventory finance	1,109		823
Auto finance	-		-
Other	2,838		15
Total non-accrual loans and leases	$	308,943	$	298,311

At March 31, 2012 and December 31, 2011, non-accrual loans and leases include $145.3 million and $130.9 million, respectively, of loans that were modified and categorized as TDRs. The increase in non-accrual TDRs at March 31, 2012, compared with December 31, 2011, was primarily due to a $16 million increase in commercial non-accrual TDRs.

Changes in the amount of non-accrual loans and leases for the three months ended March 31, 2012 and 2011 are summarized in the following tables.

	At or For the Three Months Ended March 31, 2012
(In thousands)	Consumer Real Estate			Commercial			Leasing and Equipment Finance			Inventory Finance			Other			Total
Balance, beginning of period	$	149,371		$	127,519		$	20,583		$	823		$	15		$	298,311
Additions	61,677			17,903			4,655			1,431			4			85,670
Charge-offs	(15,914		)	(1,462		)	(1,248		)	(1		)	(1,058		)	(19,683		)
Transfers to other assets	(22,822		)	(1,643		)	(979		)	(159		)	-			(25,603		)
Return to accrual status	(20,524		)	(26		)	(100		)	(593		)	-			(21,243		)
Payments received	(2,378		)	(3,506		)	(2,896		)	(391		)	(31		)	(9,202		)
Other, net	(106		)	(3,108		)	-			(1		)	3,908			693
Balance, end of period	$	149,304		$	135,677		$	20,015		$	1,109		$	2,838		$	308,943

	At or For the Three Months Ended March 31, 2011
(In thousands)	Consumer Real Estate			Commercial			Leasing and Equipment Finance			Inventory Finance			Other			Total
Balance, beginning of period	$	167,497		$	142,248		$	34,407		$	1,055		$	50		$	345,257
Additions	58,416			7,564			10,829			3,777			10			80,596
Charge-offs	(16,770		)	(17,665		)	(2,960		)	(5		)	(17		)	(37,417		)
Transfers to other assets	(28,696		)	(2,371		)	(2,138		)	(336		)	-			(33,541		)
Return to accrual status	(21,982		)	-			(464		)	(2,188		)	-			(24,634		)
Payments received	(2,692		)	(4,209		)	(5,050		)	(930		)	-			(12,881		)
Other, net	(583		)	2,178			10			64			-			1,669
Balance, end of period	$	155,190		$	127,745		$	34,634		$	1,437		$	43		$	319,049

Allowance for Loan and Lease Losses

The determination of the allowance for loan and lease losses is a critical accounting estimate. TCF’s methodologies for determining and allocating the allowance for loan and lease losses focus on ongoing reviews of larger individual loans and leases, historical net charge-offs, delinquencies in the loan and lease portfolio, the level of impaired and non-accrual 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, year of origination, prevailing economic conditions and other relevant factors. The various factors used in the methodologies are reviewed on a periodic basis.

The Company considers the allowance for loan and lease losses of $265.3 million appropriate to cover losses incurred in the loan and lease portfolios as of March 31, 2012. 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 balance of the allowance for loan and lease losses. Among other factors, a continued economic slowdown, increasing levels of unemployment and/or a decline in commercial or residential real estate values in TCF’s markets may have an adverse impact on the current adequacy of the allowance for loan and lease losses by increasing credit risk and the risk of potential loss.

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 changes in the criteria used to evaluate the allowance and is not necessarily indicative of the trend of future losses in any particular portfolio.

In conjunction with Note 7 of the Notes to Consolidated Financial Statements included in Part I, Item 1. Financial Statements, the following table includes detailed information regarding TCF’s allowance for loan and lease losses and net charge-offs.

	At March 31, 2012						At December 31, 2011
(Dollars in thousands)	Allowance		Total Loans and Leases		Allowance as a % of Balance		Allowance		Total Loans and Leases		Allowance as a % of Balance
Consumer real estate:
First mortgage lien	$	114,094	$	4,685,761	2.43	%	$	115,740	$	4,742,423	2.44	%
Junior lien	69,731		2,130,148		3.27		67,695		2,152,868		3.14
Consumer real estate	183,825		6,815,909		2.70		183,435		6,895,291		2.66
Commercial	50,444		3,467,089		1.45		46,954		3,449,492		1.36
Leasing and equipment finance	21,537		3,118,755		.69		21,173		3,142,259		.67
Inventory finance	7,556		1,637,958		.46		2,996		624,700		.48
Auto finance	1,019		139,047		.73		-		3,628		-
Other	912		29,178		3.13		1,114		34,885		3.19
Total allowance for loan and lease losses	265,293		15,207,936		1.74		255,672		14,150,255		1.81

N.M. Not Meaningful.

The increase in the allowance in inventory finance and auto finance was primarily due to increased loan balances and the related reserves. At March 31, 2012, the allowance as a percent of total loans and leases was 1.74% compared with 1.81% at December 31, 2011. The decrease in the allowance as a percent of total loans and leases was due to loan growth in the high credit quality inventory finance portfolio. The level of commercial lending allowances is generally volatile due to reserves for specific loans based on individual facts and collateral values as loans migrate to classified commercial loans or to non-accrual. Charge-offs are taken against such specific reserves. The increase in the allowance for commercial lending in the first three months of 2012 was primarily due to increased provision expense on speculative and retail real estate in the commercial portfolio.

The following tables set forth additional information regarding net charge-offs (recoveries):

	Three Months Ended
	March 31, 2012				March 31, 2011
	Net		Loss		Net			Loss
(Dollars in thousands)	Charge-offs		Rate (1)		Charge-offs			Rate (1)
Consumer real estate:
First mortgage liens	$	19,526	1.66	%	$	21,950		1.81	%
Junior liens	16,162		3.03		13,353			2.39
Total consumer real estate	35,688		2.09		35,303			1.99
Commercial real estate	972		.12		14,481			1.75
Commercial business	552		.90		3,297			4.22
Total commercial	1,524		.18		17,778			1.96
Leasing and equipment finance	151		.02		2,789			.36
Inventory finance	643		.22		209			.10
Auto Finance	2		.01		-			-
Other	925		N.M	.	(267		)	N.M	.
Total	$	38,933	1.06	%	$	55,812		1.51	%

(1) Represents the ratio of net charge-offs to average loans and leases, annualized.

N.M. Not Meaningful.

During the first quarter of 2012, commercial net charge-offs decreased $16.3 million, compared with the same 2011 period. The decreases in net charge-offs was primarily due to a reduction in office building and land development net charge-offs. Leasing and equipment finance net charge-offs for the first quarter of 2012 decreased $2.6 million compared with the same 2011 period primarily due to decreases in the small ticket and middle market segments, as customer performance continued to improve in these areas.

Other Real Estate Owned and Repossessed and Returned Assets

Other real estate owned and repossessed and returned equipment are summarized in the following table.

	At		At
	March 31,		December 31,
(In thousands)	2012		2011
Other real estate owned (1):
Residential real estate	$	84,996	$	87,792
Commercial real estate	42,232		47,106
Total other real estate owned	127,228		134,898
Repossessed and returned assets	5,013		4,758
Total other real estate owned and repossessed and returned equipment	$	132,241	$	139,656
(1) Includes properties owned and foreclosed properties subject to redemption.

Other real estate owned is recorded at the lower of cost or fair value less estimated costs to sell the property. At March 31, 2012, TCF owned 466 consumer real estate properties, an increase of one from December 31, 2011, due to the addition of 285 properties exceeding the sale of 284 properties. The average length of time to sell consumer real estate properties during the first three months of 2012 was 6.5 months from the date they were classified as other real estate owned.

The changes in the amount of other real estate owned for the three months ended March 31, 2012 are summarized in the following tables.

	At or For the Three Months Ended March 31, 2012
(In thousands)	Consumer			Commercial			Total
Balance, beginning of period	$	87,792		$	47,106		$	134,898
Transferred in, net of charge-offs	25,165			459			25,624
Sales	(25,992		)	(2,609		)	(28,601		)
Write-downs	(2,554		)	(2,713		)	(5,267		)
Other, net	585			(11		)	574
Balance, end of period	$	84,996		$	42,232		$	127,228

Transfers into other real estate owned decreased by $8.2 million and sales of other real estate owned increased $2.7 million for the three months ended March 31, 2012, compared with the three months ended December 31, 2011.

Deposits

Checking, savings and money market deposits are an important source of low-cost funds and fee income for TCF. Deposits totaled $12.8 billion at March 31, 2012, an increase of $557 million, or 4.6%, from December 31, 2011. The average interest cost of deposits in the first quarter of 2012 was .30%, down 12 basis points, from the same period in 2011. The decrease in the average interest cost of deposits was primarily due to pricing strategies on certain deposit products, mix changes and lower market interest rates. TCF’s weighted-average interest rate on deposits, including non-interest bearing deposits, was .29% at both March 31, 2012 and December 31, 2011.

Borrowings and Liquidity

Borrowings totaled $3.1 billion at March 31, 2012, down $1.3 billion from December 31, 2011. The weighted-average rate on borrowings was 1.25% at March 31, 2012, compared with 4.26% at December 31, 2011. Historically, TCF has borrowed primarily from the FHLB, from institutional sources under repurchase agreements and from other sources. At March 31, 2012, TCF had $1.6 billion in unused, secured borrowing capacity at the FHLB of Des Moines.

At March 31, 2012, TCF, through its subsidiary TCF Commercial Finance Canada, Inc., had $31 million available under a Canadian denominated line of credit facility. Advances under this credit facility are fully collateralized by pledged securities, and TCF Commercial Finance Canada, Inc. could draw $10 million on the unused credit line without additional collateral being pledged.

At March 31, 2012, interest-bearing deposits held at the Federal Reserve and unencumbered securities were $1.1 billion, an increase of $372 million from the first quarter of 2011 and a decrease of $319 million from December 31, 2011.

See Note 8 of the Notes to Consolidated Financial Statements included in Part 1, Item 1. Financial Statements for additional information regarding TCF’s long-term borrowings.

Contractual Obligations and Commitments

TCF has certain obligations and commitments to make future payments under contracts. At March 31, 2012, the aggregate contractual obligations (excluding bank deposits) and commitments are as follows.

(In thousands)	Payments Due by Period
			Less than		1-3		3-5		More Than
Contractual Obligations	Total		1 year		years		years		5 years
Total borrowings (1)	$	3,119,242	$	1,208,166	$	1,415,071	$	380,498	$	115,507
Annual rental commitments under non-cancelable operating leases	215,575		26,512		54,183		46,558		88,322
Campus marketing agreements	45,493		4,028		7,220		6,045		28,200
Total	$	3,380,310	$	1,238,706	$	1,476,474	$	433,101	$	232,029

(In thousands)	Amount of Commitment - Expiration by Period
			Less than		1-3		3-5		More Than
Commitments	Total		1 year		years		years		5 years
Commitments to lend:
Consumer real estate and other	$	1,247,457	$	88,192	$	98,438	$	83,874	$	976,953
Commercial	286,091		156,958		48,816		41,255		39,062
Leasing and equipment finance	202,118		202,118		-		-		-
Total commitments to lend	1,735,666		447,268		147,254		125,129		1,016,015
Standby letters of credit and guarantees on industrial revenue bonds	25,954		19,178		370		6,406		-
Total	$	1,761,621	$	466,446	$	147,624	$	131,535	$	1,016,015
(1) Total borrowings exclude interest.

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. TCF, in its sole discretion, may terminate or otherwise modify the credit arrangement in place with a customer and therefore the total commitment amounts do not necessarily represent future cash requirements. Collateral predominantly consists of residential and commercial real estate. The credit facilities established for inventory finance customers are discretionary credit arrangements which do not obligate TCF to lend.

Campus marketing agreements consist of fixed or minimum obligations for exclusive marketing and naming rights with six 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 another party. These conditional commitments expire in various years through 2016. 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.

Equity

Total equity at March 31, 2012 was $1.5 billion, or 8.69% of total assets, compared with $1.9 billion, or 9.90% of total assets, at December 31, 2011. Dividends to common stockholders on a per share basis totaled 5 cents for each of the quarters ended March 31, 2012 and March 31, 2011. TCF’s dividend payout ratio was a negative 2.8% for the quarter ended March 31, 2012. The Company’s primary funding sources for dividends are earnings and dividends received from TCF Bank.

At March 31, 2012, TCF had 5.4 million shares remaining in its stock repurchase program authorized by its Board of Directors.

Tangible realized common equity at March 31, 2012 was $1.3 billion, or 7.36% of total tangible assets, compared with $1.6 billion, or 8.42% of total tangible assets, at December 31, 2011. Tangible realized common equity is a non-GAAP measure and represents common equity less goodwill, other intangible assets, accumulated other comprehensive income and non-controlling interest in subsidiaries. Tangible assets represent total assets less goodwill and other intangible assets. Management reviews tangible realized common equity to tangible assets as an ongoing measure and has included this information because of current interest by investors, rating agencies and banking regulators. The methodology for calculating tangible realized common equity may vary between companies.

The following table is a reconciliation of the non-GAAP measure of tangible realized common equity to tangible assets to the GAAP measure of total equity to total assets.

	At March 31,			At December 31,
(Dollars in thousands)	2012			2011
Computation of total equity to total assets:
Total equity	$	1,549,325		$	1,878,627
Total assets	17,833,457			18,979,388
Total equity to total assets	8.69		%	9.90		%

Computation of tangible realized common equity to tangible assets:
Total equity	$	1,549,325		$	1,878,627
Less: Non-controlling interest in subsidiaries	18,306			10,494
Total TCF Financial Corporation stockholders’ equity	1,531,019			1,868,133
Less:
Goodwill	225,640			225,640
Other intangibles	6,803			7,134
Accumulated other comprehensive income	3,273			56,826
Tangible realized common equity	$	1,295,303		$	1,578,533

Total assets	$	17,833,457		$	18,979,388
Less:
Goodwill	225,640			225,640
Other intangibles	6,803			7,134
Tangible assets	$	17,601,014		$	18,746,614

Tangible realized common equity to tangible assets	7.36		%	8.42		%

At March 31, 2012, TCF and TCF Bank was considered “well-capitalized” under guidelines established by the Federal Reserve and the Office of the Comptroller of the Currency (“OCC”). See Note 9 of the Notes to Consolidated Financial Statements included in Part I, Item 1. Financial Statements for additional information.

Tier 1 risk-based capital at March 31, 2012 was $1.4 billion, or 9.97% of risk-weighted assets, compared with $1.7 billion, or 12.67% of risk-weighted assets at December 31, 2011. Tier 1 common capital at March 31, 2012 was $1.3 billion, or 9.04% of risk-weighted assets, compared with $1.6 billion, or 11.74% of risk-weighted assets at December 31, 2011.

In contrast to GAAP-basis measures, the total Tier 1 common risk-based capital ratio excludes the effect of qualifying trust preferred securities, qualifying non-controlling interest in subsidiaries and cumulative perpetual preferred stock. Management reviews the total Tier 1 common risk-based capital ratio as an ongoing measure and has included this information because of current interest by investors, rating agencies and banking regulators. The methodology for calculating total Tier 1 common capital may vary between companies.

The following table is a reconciliation of non-GAAP measure of total Tier 1 common risk-based capital to the GAAP measure of total Tier 1 risk-based capital ratio.

	At			At
	March 31,			December 31,
(In thousands)	2012			2011
Total Tier 1 risk-based capital ratio:
Total Tier 1 capital	$	1,431,565		$	1,706,926
Total risk-weighted assets	14,357,389			13,475,330
Total Tier 1 risk-based capital ratio	9.97		%	12.67		%

Computation of Tier 1 common capital ratio:
Total Tier 1 capital	$	1,431,565		$	1,706,926
Less:
Qualifying trust preferred securities	115,000			115,000
Qualifying non-controlling interest in subsidiaries	18,306			10,494
Total Tier 1 common risk-based capital	$	1,298,259		$	1,581,432

Total risk-weighted assets	$	14,357,389		$	13,475,330
Total Tier 1 common risk-based capital ratio	9.04		%	11.74		%

On April 16, 2012, TCF declared a regular quarterly dividend of 5 cents per common share, payable on May 31, 2012 to stockholders of record at the close of business on April 27, 2012.

RECENT ACCOUNTING DEVELOPMENTS

On December 23, 2011, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 (Topic 220), which defers the requirement to present the reclassification amounts from other comprehensive income to net income as a separate component on the income statement. The remaining requirements of ASU No. 2011-05 were adopted in the current Quarterly Report on Form 10-Q.

On December 16, 2011, the FASB issued ASU No. 2011-11, Disclosures about Offsetting Assets and Liabilities (Topic 210), which requires companies that have financial and derivative instruments subject to a master netting agreement to disclose the gross amount of the financial assets and liabilities, the amounts that are offset on the balance sheet, the net amounts presented, and the amounts subject to a master netting arrangement that are not offset. The adoption of ASU No. 2011-11 will be required for TCF’s first quarter 2013 Form 10-Q, and is not expected to have a material impact on TCF.

LEGISLATIVE 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.

Bank Secrecy Act Consent Order

TCF is currently subject to a Consent Order with the OCC relating to its Bank Secrecy Act (“BSA”) compliance. The Consent Order does not call for the payment of a civil money penalty; however, the OCC has issued a written notice to TCF related to TCF’s BSA compliance deficiencies. After the OCC’s review of TCF’s response to the notice, the OCC may impose a penalty related to these findings.

CAUTIONARY STATEMENTS FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE SECURITIES LITIGATION REFORM ACT

Any statements contained in this Quarterly Report on Form 10-Q regarding the outlook for the Company’s businesses and their respective markets, such as projections of future performance, guidance, statements of the Company’s plans and objectives, forecasts of market trends and other matters, are forward-looking statements based on the Company’s assumptions and beliefs. Such statements may be identified by such words or phrases as “will likely result,” “are expected to,” “will continue,” “outlook,” “will benefit,” “is anticipated,” “estimate,” “project,” “management believes” or similar expressions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those discussed in such statements and no assurance can be given that the results in any forward-looking statement will be achieved. For these statements, TCF claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Any forward-looking statement speaks only as of the date on which it is made, and we disclaim any obligation to subsequently revise any forward-looking statement to reflect events or circumstances after such date or to reflect the occurrence of anticipated or unanticipated events.

Certain factors could cause the Company’s future results to differ materially from those expressed or implied in any forward-looking statements contained in this Quarterly Report on Form 10-Q. These factors include the factors discussed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 under the heading “Risk Factors,” the factors discussed below and any other cautionary statements, written or oral, which may be made or referred to in connection with any such forward-looking statements. Since it is not possible to foresee all such factors, these factors should not be considered as complete or exhaustive.

Adverse Economic or Business Conditions, Credit and Other Risks. Deterioration in general economic and banking industry conditions, including defaults, anticipated defaults or rating agency downgrades of sovereign debt (including debt of the U.S.), or continued high rates of or increases in unemployment in TCF’s primary banking markets; adverse economic, business and competitive developments such as shrinking interest margins, deposit outflows, deposit account attrition or an inability to increase the number of deposit accounts; adverse changes in credit quality and other risks posed by TCF’s loan, lease, investment and securities available for sale portfolios, including declines in commercial or residential real estate values or changes in the allowance for loan and lease losses dictated by new market conditions or regulatory requirements; interest rate risks resulting from fluctuations in prevailing interest rates or other factors that result in a mismatch between yields earned on TCF’s interest-earning assets and the rates paid on its deposits and borrowings; foreign currency exchange risks; counterparty risk, including the risk of defaults by our counterparties or diminished availability of counterparties who satisfy our credit quality requirements; decreases in demand for the types of equipment that TCF leases or finances; limitations on TCF’s ability to attract and retain manufacturers and dealers to expand the inventory finance business.

Legislative and Regulatory Requirements. New consumer protection and supervisory requirements and regulations, including those resulting from action by the Consumer Financial Protection Bureau and changes in the scope of Federal preemption of state laws that could be applied to national banks; the imposition of requirements with an adverse impact relating to TCF’s lending, loan collection and other business activities as a result of the Dodd-Frank Act, or other legislative or regulatory developments such as mortgage foreclosure moratorium laws or imposition of underwriting or other limitations that impact the ability to use certain variable-rate products; impact of legislative, regulatory or other

changes affecting customer account charges and fee income; changes to bankruptcy laws which would result in the loss of all or part of TCF’s security interest due to collateral value declines; deficiencies in TCF’s compliance under the Bank Secrecy Act in past or future periods, which may result in regulatory enforcement action including monetary penalties; increased health care costs resulting from Federal health care reform legislation; adverse regulatory examinations and resulting enforcement actions or other adverse consequences such as increased capital requirements or higher deposit insurance assessments; heightened regulatory practices, requirements or expectations, including, but not limited to, requirements related to the Bank Secrecy Act and anti-money laundering compliance activity.

Earnings/Capital Risks and Constraints, Liquidity Risks. Limitations on TCF’s ability to pay dividends or to increase dividends because of financial performance deterioration, regulatory restrictions or limitations; increased deposit insurance premiums, special assessments or other costs related to adverse conditions in the banking industry, the economic impact on banks of the Dodd-Frank Act and other regulatory reform legislation; the impact of financial regulatory reform, including the phase out of trust preferred securities in tier 1 capital called for by the Dodd-Frank Act, or additional capital, leverage, liquidity and risk management requirements or changes in the composition of qualifying regulatory capital (including those resulting from U.S. implementation of Basel III requirements); adverse changes in securities markets directly or indirectly affecting TCF’s ability to sell assets or to fund its operations; diminished unsecured borrowing capacity resulting from TCF credit rating downgrades and unfavorable conditions in the credit markets that restrict or limit various funding sources; costs associated with new regulatory requirements or interpretive guidance relating to liquidity; uncertainties relating to customer opt-in preferences with respect to overdraft fees on point of sale and ATM transactions which may have an adverse impact on TCF’s fee revenue; uncertainties relating to future retail deposit account changes, including limitations on TCF’s ability to predict customer behavior and the impact on TCF’s fee revenues.

Competitive Conditions; Supermarket Branching Risk; Growth Risks. 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; customers completing financial transactions without using a bank; the effect of any negative publicity; slower than anticipated growth in existing or acquired businesses; inability to successfully execute on TCF’s growth strategy through acquisitions or cross-selling opportunities; failure to expand or diversify our balance sheet through programs or new opportunities; failure to successfully attract and retain new customers; product additions and addition of distribution channels (or entry into new markets) for existing products.

Technological and Operational Matters. Technological or operational difficulties, loss or theft of information, counterparty failures and the possibility that deposit account losses (fraudulent checks, etc.) may increase; failure to keep pace with technological change.

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

Accounting, Audit, Tax and Insurance Matters. Changes in accounting standards or interpretations of existing standards; federal or state monetary, fiscal or tax policies, including adoption of state legislation that would increase state taxes; ineffective internal controls; adverse state or Federal tax assessments or findings in tax audits; lack of or inadequate insurance coverage for claims against TCF; potential for claims and legal action related to TCF’s fiduciary responsibilities.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

TCF’s results of operations depend to a large degree on its net interest income and its ability to manage interest-rate risk. Although TCF manages other risks, such as credit risk, liquidity risk, operational and other risks, in the normal course of its business, the Company considers interest-rate risk to be one of its most significant market risks. 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 Management Committee manages TCF’s interest-rate risk based on interest rate expectations and other factors. The principal objective of TCF’s asset/liability management activities is to provide maximum levels of net interest income while maintaining acceptable levels of interest-rate risk and liquidity risk and facilitating the funding needs of the Company.

TCF utilizes net interest income simulation models to estimate the near-term effects (next 1-2 years) 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 March 31, 2012, net interest income is estimated to increase slightly by 1.2% 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.

Management exercises its best judgment in making assumptions regarding events that management can influence, such as non-contractual deposit repricings and events outside management’s control, such as customer behavior on loan and deposit activity, counterparty 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 a rise or decline in interest rates.

TCF’s one-year interest rate gap was a negative $68 million, or .4% of total assets, at March 31, 2012, compared with a positive $2.1 billion, or 10.9% of total assets, at December 31, 2011. The change in the gap from year-end is primarily due to the balance sheet repositioning and having more short-term and variable-rate borrowings, along with a smaller mortgage-backed securities portfolio. 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. A positive interest rate gap position exists when the amount of interest-earning assets maturing or re-pricing exceeds the amount of interest-bearing liabilities maturing or re-pricing, including assumed prepayments, within a particular time period.

TCF estimates that an immediate 50 basis point decrease in current mortgage loan interest rates would increase prepayments on the $5.1 billion of consumer real estate loans and fixed-rate mortgage-backed securities at March 31, 2012, by approximately $84 million, or 17%, in the first year. An increase in prepayment 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 decrease prepayments on the fixed-rate mortgage-backed securities, residential real estate loans and consumer loans at March 31, 2012, by approximately $115 million, or 23.2% 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. The level of prepayments that would actually occur in any scenario will be impacted by factors other than interest rates. Such factors include lenders’ willingness to lend funds, which can be impacted by the

value of assets underlying loans and leases.

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 Managing Director of Corporate Development (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 and 15d-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon that evaluation, management concluded that the Company’s disclosure controls and procedures are effective as of March 31, 2012.

Disclosure controls and procedures are designed to ensure that information required to be disclosed by TCF in reports filed or submitted 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 Managing Director of Corporate Development (Principal Accounting Officer), as appropriate, to allow for timely decisions regarding required disclosure. TCF’s disclosure controls also 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.

Changes in Internal Control Over Financial Reporting

There were no changes to TCF’s internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the quarter ended March 31, 2012 that materially affected, or are reasonably likely to materially affect, TCF’s internal control over financial reporting.

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,	March 31,				December 31,					September 30,			June 30,				March 31,
except per-share data)	2012				2011					2011			2011				2011
SELECTED FINANCIAL CONDITION DATA:
Total loans and leases	$	15,207,936			$		14,150,255			$	14,339,715		$	14,631,945			$	14,796,541
Securities available for sale	728,894				2,324,038					2,600,806			2,463,367				2,172,017
Goodwill	225,640				225,640					152,599			152,599				152,599
Total assets	17,833,457				18,979,388					19,092,027			18,834,416				18,712,136
Deposits	12,759,040				12,202,004					12,320,502			11,939,476				12,043,684
Short-term borrowings	1,157,189				6,416					7,204			9,514				12,898
Long-term borrowings	1,962,053				4,381,664					4,397,750			4,415,362				4,533,176
Total equity	1,549,325				1,878,627					1,872,044			1,769,619				1,724,471

	Three Months Ended
	March 31,					December 31,				September 30,			June 30,				March 31,
	2012					2011				2011			2011				2011
SELECTED OPERATIONS DATA:
Net interest income	$		180,173			$		173,434		$	176,064		$		176,150		$	174,040
Provision for credit losses	48,542					59,249				52,315			44,005				45,274
Net interest income after provision for credit losses	131,631					114,185				123,749			132,145				128,766
Non-interest income:
Fees and other revenue	88,734					92,448				116,108			114,369				114,246
Gains (losses) on securities, net	76,611					5,842				1,648			(227			)	-
Total non-interest income	165,345					98,290				117,756			114,142				114,246
Non-interest expense	748,708					187,533				188,848			195,091				192,979
(Loss) income before income tax expense	(451,732			)		24,942				52,657			51,196				50,033
Income tax (benefit) expense	(170,244			)		7,424				19,159			19,086				18,772
(Loss) income after income tax expense	(281,488			)		17,518				33,498			32,110				31,261
Income attributable to non-controlling interest	1,406					1,075				1,243			1,686				989
Net (loss) income available to common stockholders	(282,894			)		16,443				32,255			30,424				30,272
Per common share:
Basic earnings	$		(1.78	)		$		0.10		$	0.20		$		0.19		$	0.21
Diluted earnings	$		(1.78	)		$		0.10		$	0.20		$		0.19		$	0.21
Dividends declared	$		0.05			$		0.05		$	0.05		$		0.05		$	0.05

FINANCIAL RATIOS:
Return on average assets (1)	(5.96			)%		.37			%	.71		%	.68			%	.68		%
Return on average common equity (1)	(63.38			)		3.55				7.12			7.00				8.00
Net interest margin (1)	4.14					3.92				3.96			4.02				4.06
Net charge-offs as a percentage of average loans and leases (1)	1.06					1.63				1.48			1.19				1.51
Average total equity to average assets	9.52					9.81				9.58			9.32				8.24

(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 collections activities. TCF may also be subject to enforcement action by federal regulators, including the Securities and Exchange Commission, the Federal Reserve and the OCC. 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 is subject to such actions brought against it from time to time. Litigation is often unpredictable and the actual results of litigation cannot be determined and therefore the ultimate resolution of a matter and the possible range of loss associated with certain potential outcomes cannot be established. Based on our current understanding of these pending legal proceedings, management does not believe that judgments or settlements arising from pending or threatened legal matters, individually or in the aggregate, would have a material adverse effect on the consolidated financial position, operating results or cash flows of TCF. TCF is also subject to regulatory examinations and TCF’s regulatory authorities may impose sanctions on TCF for a failure to maintain regulatory compliance. TCF is currently subject to a Consent Order with the OCC relating to its Bank Secrecy Act (“BSA”) compliance. The OCC has issued a written notice to TCF related to TCF’s past BSA deficiencies. After the OCC’s review of TCF’s response, the OCC may impose a penalty related to these findings. TCF is currently not able to estimate a reasonable range of losses relating to that possibility.

Item 1A. Risk Factors

There were no material changes in risk factors for TCF in the quarter covered by this report. You should carefully consider the risks and the risk factors included under Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. TCF’s business, financial condition or results of operations could be materially adversely affected by any of these risks.

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

The following table summarizes share repurchase activity for the quarter ended March 31, 2012.

					Total Number of		Maximum Number
	Total Number	Average			Shares Purchased		of Shares that May
	of Shared	Price Paid			as Part of Publicly		Yet be Purchased
Period	Purchased	Per Share			Announced Plan		Under the Plan
January 1 to January 31,
Share repurchase program (1)	-		$	-	-		5,384,130
Employee transactions (2)	120,497		$	10.34	N.A	.	N.A	.

February 1 to February 29,
Share repurchase program (1)	-		$	-	-		5,384,130
Employee transactions (2)	-		$	-	N.A	.	N.A	.

March 1 to March 31,
Share repurchase program (1)	-		$	-	-		5,384,130
Employee transactions (2)	-		$	-	N.A	.	N.A	.
Total
Share repurchase program (1)	-		$	-	-		5,384,130
Employee transactions (2)	120,497		$	10.34	N.A	.	N.A	.

(1) The current share repurchase authorization was approved by the Board of Directors on April 14, 2007 and was announced in a press release dated April 16, 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. TCF has not repurchased shares since October 2007. Future repurchases of shares will be based upon capital levels, growth expectations and market opportunities and may be subject to regulatory approval. The ability to repurchase shares in the future may be adversely affected by new legislation or regulations, or by changes in regulatory policies. This authorization does not have an expiration date.

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

N.A. Not Applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

See Index to Exhibits on page 58 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/ William A. Cooper
	William A. Cooper, Chairman
	and Chief Executive Officer
	(Principal Executive Officer)


	/s/ Michael S. Jones
	Michael S. Jones, Executive Vice President and
	Chief Financial Officer
	(Principal Financial Officer)


	/s/ David M. Stautz
	David M. Stautz, Senior Vice President,
	Controller and Managing Director of Corporate Development
	(Principal Accounting Officer)

Dated: April 26, 2012

TCF FINANCIAL CORPORATION

INDEX TO EXHIBITS

FOR FORM 10-Q

Exhibit Number		Description
3(b)		Amended and Restated Bylaws of TCF Financial Corporation [incorporated by reference to Exhibit 3(b) to TCF Financial Corporation’s Current Report on Form 8-K filed March 2, 2012]

10(b)-20		Form of Restricted Stock Agreement as executed by William A. Cooper, effective January 17, 2012 [incorporated by reference to Exhibit 10.2 to TCF Financial Corporation’s Current Report on Form 8-K filed January 20, 2012]

10(b)-21		Form of Restricted Stock Agreement as executed by certain executives, effective January 17, 2012 [incorporated by reference to Exhibit 10.3 to TCF Financial Corporation’s Current Report on Form 8-K filed January 20, 2012]

10(e)		Amended and Restated Agreement (2012) with William A. Cooper between William A. Cooper and TCF Financial Corporation effective as of January 25, 2012 [incorporated by reference to Exhibit 10.1 to TCF Financial Corporation’s Current Report on Form 8-K filed January 30, 2012]

10(k)-1		Form of 2012 Management Incentive Plan — Executive as executed by certain executives of TCF Financial Corporation, effective January 1, 2012 [incorporated by reference to Exhibit 10.1 to TCF Financial Corporation’s Current Report on Form 8-K filed January 20, 2012]

12#		Computation of Ratios of Earnings to Fixed Charges for periods ended March 31, 2012, December 31, 2011, 2010, 2009, 2008 and 2007

31.1#		Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2#		Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1#		Certification of the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2#		Certification of the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

99.1		Form of Consent Order, dated July 20, 2010, issued by the Comptroller of the Currency in the matter of TCF National Bank. [incorporated by reference to Exhibit 99.1 to TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010]

99.2		Form of Stipulation and Consent to the Issuance of a Consent Order dated July 20, 2010, issued by the Comptroller of the Currency in the matter of TCF National Bank [incorporated by reference to Exhibit 99.2 to TCF Financial Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010]

101#		Financial statements from the Quarterly Report on Form 10-Q of the Company for the period ended March 31, 2012, formatted in XBRL: (i) the Consolidated Statements of Comprehensive Income, (ii) the Consolidated Statements of Financial Condition, (iii) the Consolidated Statements of Equity, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to Consolidated Financial Statements

# Filed herewith

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TCF Financial Inactive 10-Q2012 Q1 Quarterly report

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