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TCF REPORTS SECOND QUARTER EARNINGS

                                   Three Months Ended  Six Months Ended
                                   6/30/93   6/30/92   6/30/93   6/30/92
    Before merger-related charges:
     Income                        $11,754   $10,436   $21,671   $19,938
     Earnings per share                .94      .861      .741       .67
    Net income                       3,984    10,436    13,777    19,938
    Earnings per share                 .32       .86      1.10      1.67
    Dividends paid per share         .1875      .125     .3125      .225
    Return on average assets(a)(pct)   .97       .84       .89       .81
    Return on average equity(a)(pct) 17.36     18.33     16.14     18.29
    (a)  Before merger-related charges
    MINNEAPOLIS, July 19 /PRNewswire/ -- TCF Financial Corporation (TCF) (NYSE: TCB) today reported second quarter 1993 earnings of $11.8 million, excluding $7.8 million in after-tax merger-related restructuring charges associated with the acquisition of Republic Capital Group, Inc. (RCG), Milwaukee, a 13 percent increase from $10.4 million for the 1992 second quarter.  On a per-share basis, excluding merger-related charges, TCF earned 94 cents for the 1993 second quarter, compared with 86 cents for the same period in 1992. Income before taxes and merger-related restructuring charges was $20.3 million for the 1993 second quarter, up 41 percent from $14.4 million for the 1992 second quarter.
    For the first six months of 1993, income excluding merger-related charges totaled $21.7 million, or $1.74 per share, compared with $19.9 million, or $1.67 per share, for the 1992 first half.
    TCF's results for prior periods have been restated to reflect the April 21 acquisition of RCG on a pooling-of-interests basis.
    Excluding merger-related charges, return on average assets was 0.97 percent for the 1993 second quarter, compared with 0.84 percent for the 1992 second quarter.  On the same basis, return on average equity was 17.36 percent for the 1993 second quarter, compared with 18.33 percent for the same period in 1992.
    Income tax expense for the three and six month periods ended June 30, 1993 totaled $3.2 million and $10.4 million, or 44.5 percent and 43 percent of pretax income, respectively, compared with $4 million and $7.6 million, or 27.6 percent and 27.5 percent of pretax income, for the comparable 1992 periods.  While TCF's 1992 tax rate reflected benefits obtained from reductions in a tax valuation allowance, TCF's income tax expense returned to a more normal rate in 1993.
    Net income for the 1993 second quarter was $4 million, or 32 cents per share, compared with $10.4 million, or 86 cents per share, for the 1992 second quarter.  For the 1993 first half, net income was $13.8 million, or $1.10 per share, compared with $19.9 million, or $1.67 per share, for the 1992 first half.
    TCF Chairman and Chief Executive Officer William A. Cooper said TCF's favorable operating trends continued in the 1993 second quarter, noting the growth in operating earnings, net interest income, net interest margin and fee income.  "Our continued core earnings improvement reflects the strength of our community banking franchise. We now have $4.9 billion in assets and 114 banking offices in four contiguous states," said Cooper.
    Cooper noted that the acquisition of RCG significantly expanded TCF's community banking franchise in the Upper Midwest, adding $570 million in deposits and 24 offices in Wisconsin and $189 million in deposits and six offices in Illinois.  TCF now has $583 million in deposits and 27 offices in Illinois.  The process of integrating RCG's operations with TCF's is on schedule for completion this fall.
    Net interest income was $47.1 million for the 1993 second quarter, up 11 percent from $42.5 million for the 1992 second quarter, and up 6 percent from $44.3 million for the 1993 first quarter.  TCF's net interest margin was 4.18 percent for the 1993 second quarter, up from 3.70 percent for the 1992 second quarter and 3.91 percent for the 1993 first quarter.  For the 1993 first half, net interest income and net interest margin were $91.4 million and 4.04 percent, respectively, up from $80.5 million and 3.52 percent for the 1992 first half.  The increases were primarily due to a lower cost of funds, growth in lower interest-cost deposits and higher-yielding consumer loans, lower levels of non-performing assets, increased capital, and the favorable impact of TCF's March 1 redemption of $28.8 million of 12-5/8 percent subordinated capital notes.
    Fee income (non-interest income excluding gains on sales of mortgage-backed securities and investments) totaled $29.7 million for the 1993 second quarter, up 7 percent from $27.8 million for the same 1992 period.  Year-to-date, fee income totaled $56 million, up 6 percent from $52.7 million for the 1992 first half.  The improvement was mainly due to the increased volumes of deposit and insurance activities.
    Operating expenses (non-interest expense excluding the provision for real estate losses and the 1993 merger-related restructuring expense) totaled $48.7 million for the 1993 second quarter, up 9 percent from $44.7 million a year ago.  For the 1993 first half, operating expenses totaled $93.5 million, up 7 percent from $87.5 million in the 1992 first half.  The increases in operating expenses were primarily due to expanded mortgage banking, consumer lending and insurance operations. Also reflected in the 1993 totals were writeoffs of $1.1 million in the second quarter and $1.5 million year-to-date of purchased mortgage servicing rights due to accelerated prepayments.
    In the 1993 first half, TCF recorded restructuring charges totaling $13.2 million ($7.9 million after-tax) related to the acquisition of RCG.  Included in the total were provisions of $7 million for credit losses and $700,000 for real estate losses, and $5.5 million in restructuring and reorganization charges relating to the merger.  The provisions were established to conform RCG's accounting and credit loss reserve practices and methods to TCF's and to accelerate the disposition of RCG's problem assets, as previously disclosed in TCF's prospectus relating to the acquisition of RCG.
    TCF provided $9.8 million for credit losses in the 1993 second quarter, including $7 million in merger-related provisions, compared with $4.9 million in the 1992 second quarter.  Net loan charge-offs were $3.7 million in the 1993 second quarter, compared with $2 million in the 1992 second quarter.  At June 30, TCF's allowance for loan losses totaled $28.1 million, up from $19.3 million at year-end 1992, and was 112 percent of non-accrual loans.
    Non-performing assets (principally real estate acquired through foreclosure and non-accrual loans) were $55.9 million at June 30, compared with $52.7 million at year-end 1992 and $75.6 million a year ago.
    Total loans were $2.6 billion at June 30, down $27.1 million from year-end 1992, with a $71.8 million reduction in commercial real estate loans partially offset by a $37.8 million increase in residential real estate loans.  At June 30, TCF's home equity loan portfolio totaled $745.2 million.
    Residential mortgage originations totaled $699 million in the 1993 second quarter, up 46 percent from $477 million in the same 1992 period. Residential mortgage originations in the first half were $1 billion, up 8 percent from $929 million in the 1992 first half.  At June 30, TCF Mortgage Corporation's residential servicing portfolio totaled $4.9 billion, compared with $4.7 billion at year-end 1992.  "Lower interest rates have made housing more affordable, contributing to an exceptionally strong quarter for mortgage originations," said Cooper.
    Deposits totaled $3.9 billion at June 30, down $99.1 million from year-end 1992.  A decline in higher interest-cost certificates was partially offset by growth in lower interest-cost savings deposits.  At June 30, lower interest-cost checking and savings deposits totaled $1.5 billion and comprised 38 percent of total deposits.  The weighted average rate on total deposits at June 30 was 3.37 percent, down from 3.95 percent at year-end 1992.
    At June 30, book value per share was $22.31 based on 12,302,792 shares outstanding, including approximately 2.2 million shares issued in the RCG acquisition.  TCF Bank Savings fsb (TCF Bank) continued to exceed the regulatory capital requirements, with core capital of 6.09 percent of adjusted assets, tangible capital of 5.72 percent and risk-based capital of 11.82 percent.
    TCF is the holding company for TCF Bank, which operates 62 community banking offices in Minnesota, 27 in northern Illinois, 24 in eastern Wisconsin and one in Iowa.  Included are 16 Minnesota and nine Illinois in-store branches at Cub Foods stores, the most recent opened July 1 in St. Cloud, Minn.  TCF Bank and its affiliates provide banking, insurance and other financial services.  Deposits at TCF Bank are insured to $100,000 by the Federal Deposit Insurance Corporation.
                 TCF FINANCIAL CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
               (Dollars in thousands, except per-share data)
                                (Unaudited)
                                   Three Months Ended  Six Months Ended
                                   6/30/93    6/30/92  6/30/93  6/30/92
    Interest income:
     Interest on loans             $63,124    $69,247  $124,923 $135,158
     Interest on mortgage-backed
      securities                    24,407     26,958    48,693   55,127
     Interest on investments         2,323      4,921     6,477   11,300
        Total interest income       89,854    101,126   180,093  201,585
    Interest expense:
     Interest on deposits           33,905     48,272    69,679  100,180
     Interest on borrowings          8,848     10,390    18,983   20,931
        Total interest expense      42,753     58,662    88,662  121,111
        Net interest income         47,101     42,464    91,431   80,474
    Provision for credit losses(a)   9,810      4,934    15,511    6,831
        Net interest income after
         provision for credit
         losses                     37,291     37,530    75,920   73,643
    Non-interest income:
     Other fees and service charges 17,992     16,696    34,106   31,910
     Data processing revenue         2,012      1,915     3,862    3,607
     Gain on sale of mortgage-backed
      securities, net                  --         --        --       718
     Gain on sale of investments, net  --         118       --       114
     Gain on sale of loans held
      for sale, net                  1,723      3,101     2,774    4,694
     Gain on sale of securities
      held for sale, net                40        764       649    1,326
     Commissions on sales
      of annuities                   2,718      2,333     5,605    5,019
     Title insurance revenues        4,307      2,167     7,005    4,433
     Other                             859        789     2,017    1,694
        Total non-interest income   29,651     27,883    56,018   53,515
    Non-interest expense:
     Compensation and
      employee benefits             22,689     20,379    42,772   40,082
     Occupancy and equipment, net    7,853      7,261    15,663   14,487
     Advertising and promotions      2,683      2,434     5,184    4,781
     Federal deposit insurance
      premiums and assessments       2,017      2,406     4,033    4,818
     Amortization of goodwill and
      other intangibles                616        956     1,232    1,914
     Provision for real
      estate losses (b)              5,638      6,301     8,794   12,168
     Merger-related restructuring
      expense                        5,386        --      5,494      --
     Other                          12,881     11,255    24,596   21,415
        Total non-interest expense  59,763     50,992   107,768   99,665
        Income before income tax
         expense                     7,179     14,421    24,170   27,493
    Income tax expense               3,195      3,985    10,393    7,555
        Net income                  $3,984    $10,436   $13,777  $19,938
    Per common share:
     Net income                       $.32       $.86     $1.10    $1.67
     Dividends declared             $.1875      $.125    $.3125    $.225
    Financial ratios
    (annualized) (percents)
    Return on average assets          .33         .84       .57      .81
    Return on average equity         5.88       18.33     10.26    18.29
    Net interest margin              4.18        3.70      4.04     3.52
    (a) In 1993 periods, includes $7,000 in merger-related provisions.
    (b) In 1993 periods, includes $700 in merger-related provisions.
                 TCF FINANCIAL CORPORATION AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
               (Dollars in thousands, excepts per-share data)
                                (Unaudited)
    ASSETS                                    At 6/30/93     At 12/31/92
    Cash and due from banks                    $126,630        $140,779
    Interest-bearing deposits with banks          6,518          26,534
    Federal funds sold                           63,900         100,000
    U.S. Government and other marketable
     securities (market value of $65,135
     and $134,123)                               64,957         133,629
    Federal Home Loan Bank stock, at cost        34,598          33,601
    Securities held for sale                     10,127         256,624
    Loans held for sale                         403,967         285,524
    Mortgage-backed securities (market value
     of $1,405,227 and $1,171,647)            1,354,113       1,139,583
    Loans:
      Residential real estate                   896,480         858,685
      Commercial real estate                    757,199         828,995
      Commercial business                        81,874          80,312
      Consumer                                  909,529         906,661
      Unearned discounts and deferred fees      (15,298)        (17,727)
        Total loans                           2,629,784       2,656,926
        Allowance for loan losses               (28,097)        (19,249)
          Net loans                           2,601,687       2,637,677
    Premises and equipment                       69,444          64,392
    Real estate:
      In judgment and acquired through
       foreclosure                               30,813          36,574
      Held for development                          741          10,390
        Total real estate                        31,554          46,964
        Allowance for real estate losses         (2,786)         (2,291)
          Net real estate                        28,768          44,673
    Accrued interest receivable                  31,463          33,767
    Due from brokers                                 --          36,087
    Goodwill                                     15,497          16,446
    Other assets                                 62,929          72,280
    --                                       $4,874,598      $5,021,596
    LIABILITIES AND STOCKHOLDERS' EQUITY
    Deposits:
      Checking                                 $716,340        $728,950
      Passbook and statement                    778,817         724,409
      Money market                              455,337         462,507
      Certificates                            1,955,075       2,088,842
        Total deposits                        3,905,569       4,004,708
    Securities sold under repurchase agreements 134,203         100,000
    Federal Home Loan Bank advances             461,332         516,337
    Subordinated capital notes                   34,500          63,250
    Other borrowings                             17,884          22,345
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Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Date:Jul 19, 1993
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