<PAGE>
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[x] Annual Report Pursuant to Section 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended
December 31, 1997
or
[ ] Transition Report Pursuant to Section 15(d)
of the Securities Exchange Act of 1934
--------------------------
Commission File
No. 33-43030
--------------------------
TCF EMPLOYEES STOCK PURCHASE PLAN
---------------------------------
(Full title of the plan)
TCF FINANCIAL CORPORATION
-----------------------------------------------------------
(Name of issuer of the securities held pursuant to the plan)
801 Marquette Avenue, Mail Code 100-01-A, Minneapolis, Minnesota 55402
----------------------------------------------------------------------
(Address and zip code of principal executive office)
-1-
<PAGE>
Index
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Financial Statements and Exhibits
Independent Auditors' Report 3
Statements of Net Assets Available for Plan Benefits -
at December 31, 1997 and 1996 4
Statements of Changes in Net Assets Available for Plan
Benefits - Years ended December 31, 1997, 1996
and 1995 5
Notes to Financial Statements 6-11
Supplemental Schedules 12-13
Signatures 14
Index to Exhibits 15
</TABLE>
-2-
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Administrator of the
TCF Employees Stock Purchase Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the TCF Employees Stock Purchase Plan ("the Plan") as of December
31, 1997 and 1996 and the related statements of changes in net assets available
for plan benefits for each of the years in the three-year period ended December
31, 1997. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based upon our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits as of December
31, 1997 and 1996 and the changes in net assets available for plan benefits for
each of the years in the three-year period ended December 31, 1997 in conformity
with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. Supplemental Schedules 1 and 2 are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements, but are supplementary information required by
the Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ KPMG Peat Marwick LLP
June 12, 1998
Minneapolis, Minnesota
-3-
<PAGE>
TCF Employees Stock Purchase Plan
Statements of Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
At December 31,
--------------------------------
1997 1996
------------ ------------
<S> <C> <C>
Assets:
Investment in TCF Financial Corporation
common stock, at market value
(cost of $32,959,941 and $29,530,448) $162,848,754 $109,021,266
Cash fund 645,855 844,692
Accrued interest receivable 3,527 5,010
------------ ------------
Net assets available for plan benefits $163,498,136 $109,870,968
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to financial statements.
-4-
<PAGE>
TCF Employees Stock Purchase Plan
Statements of Changes in Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------------
1997 1996 1995
------------ ------------ -----------
<S> <C> <C> <C>
Investment income:
Dividends $ 2,272,337 $ 1,803,822 $ 1,244,440
Interest 34,919 43,274 20,470
------------ ------------ -----------
Total investment income 2,307,256 1,847,096 1,264,910
------------ ------------ -----------
Realized gain on distributions for
withdrawals and terminations 8,295,691 11,161,520 3,550,493
Change in unrealized appreciation
of investments 50,397,995 13,867,319 22,517,910
------------ ------------ -----------
Deposits and contributions:
Participant deposits 5,169,826 4,439,577 3,260,211
Employer contributions 2,075,721 1,826,564 1,395,641
------------ ------------ -----------
Total deposits and contributions 7,245,547 6,266,141 4,655,852
------------ ------------ -----------
Merger of Republic Capital Group,
Inc. plans - - 120,114
Merger of Great Lakes Bancorp plans 16,973 26,815,264 -
Distributions:
Withdrawals and terminations (12,167,299) (17,073,229) (5,603,840)
Dividends (2,262,827) (1,855,939) (1,232,428)
------------ ------------ -----------
Total distributions (14,430,126) (18,929,168) (6,836,268)
------------ ------------ -----------
Administrative expenses (206,168) (4,380) -
------------ ------------ -----------
Increase in net assets available for 53,627,168 41,023,792 25,273,011
plan benefits
Net assets available for plan benefits:
Beginning of year 109,870,968 68,847,176 43,574,165
------------ ------------ -----------
End of year $163,498,136 $109,870,968 $68,847,176
------------ ------------ -----------
------------ ------------ -----------
</TABLE>
See accompanying notes to financial statements.
-5-
<PAGE>
TCF Employees Stock Purchase Plan
Notes to Financial Statements
(1) ACCOUNTING PRINCIPLES
The financial statements of the TCF Employees Stock Purchase Plan (the
"Plan") have been prepared on the accrual basis of accounting. Assets of
the Plan are stated at market value. Purchases and sales of investments
are recorded on a trade date basis. The cost of Plan investments sold is
determined by the average cost method. Benefits are recorded when paid.
Basis of Presentation
The preparation of financial statements in conformity with generally
accepted accounting principles requires the plan administrator to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported
amounts of changes in net assets during the reporting period. Actual
results could differ from those estimates.
(2) EMPLOYEE STOCK PURCHASE PLAN
The Plan was adopted by the Board of Directors of TCF National Bank
Minnesota ("TCF Bank") and approved by its stockholders effective January
1, 1987 as the TCF Employees Stock Bonus Plan - 401(k). Effective October
1, 1988, the Plan was amended and restated as the TCF Employees Stock
Ownership Plan - 401(k). The Plan is intended to meet the requirements for
qualification of a stock bonus plan under Section 401(a) of the Internal
Revenue Code of 1986 (the "Code"), as amended, an employee stock ownership
plan under Section 4975(e)(7) of the Code, and a qualified cash or deferred
arrangement under Section 401(k) of the Code. The Plan is a tax-qualified
contributory plan subject to the Employee Retirement Income Security Act of
1974 ("ERISA"), as amended. Effective January 1, 1998, the Plan was
renamed as the TCF Employees Stock Purchase Plan.
The Plan was established for the purpose of providing eligible employees
with a convenient, tax-favored opportunity to invest in the stock of TCF
Bank's parent, TCF Financial Corporation ("TCF Financial"), and to provide
an additional source of retirement income. All "regular stated salary"
employees and certain commissioned employees of participating employers,
with one year of service, are eligible to participate. Effective January
1, 1998, employees of a participating employer who have worked 1,000 hours
and completed one year of service are eligible to participate in the Plan.
With certain limitations, participants may elect to invest up to 12% of
their covered pay on a tax-deferred basis and an additional 6% on an after-
tax basis in the Plan. Beginning January 1, 1995, the participating
employers matched the contributions of all employees at the rate of 50
cents per dollar with a maximum employer contribution of 3% of the
employee's salary. Employer contributions are made in the form of TCF
Financial common stock or cash. Cash contributions are invested in TCF
Financial common stock shortly after the date contributed.
-6-
<PAGE>
TCF Employees Stock Purchase Plan
Notes to Financial Statements (Continued)
Dividends earned on shares in the Plan are distributed in cash to
participants on a quarterly basis.
US Bank National Association ("US Bank" or "Trustee") is the trustee of the
Plan appointed to serve under the trust agreement.
With the concurrence of TCF Bank, US Bank is authorized to borrow funds for
purchases of TCF Financial common stock. As of December 31, 1997 and 1996
no such loans had occurred. The Plan provides that the only sources of
repayment are employer contributions made in the usual course of operation
of the Plan and/or a guarantee from TCF Financial. Employee contributions
will not be used in any event to repay such loans and TCF Bank is
prohibited from guaranteeing any such loans. Shares purchased with the
proceeds of any such loans initially will be held unallocated in the Plan,
and then released and allocated to the matching accounts of employees as
payments are made on the loan.
The participating employers, at their discretion, may make additional
contributions to the Plan, subject to an overall limit of 15% of covered
pay of Plan participants. These additional contributions are allocated to
participants' matching accounts in proportion to their respective
percentage rate of matched contributions, subject to certain limitations.
Participant deposits to the Plan are fully vested at all times.
Participants' interest in the employer matching account generally vest at
the rate of 20% per year (with full vesting after five years of vesting
service). The Plan permits financial hardship withdrawals consistent with
the safe harbor provisions of regulations issued pursuant to the Tax Reform
Act of 1986.
Prior to September 30, 1996, amounts which have been forfeited in
accordance with provisions of the Plan were reallocated to the remaining
participants' matching accounts in proportion to their respective
percentage rate of matched contributions, subject to certain limitations.
Beginning October 1, 1996, forfeitures have been applied to the payment of
plan expenses.
TCF Bank has reserved the right to amend the Plan at any time and each
participating employer may terminate the Plan at any time as to its
employees. In the event of termination of the Plan, participating
employees become 100% vested in their employer matching account balances.
-7-
<PAGE>
TCF Employees Stock Purchase Plan
Notes to Financial Statements (Continued)
(3) PARTICIPATING EMPLOYERS INCLUDED IN THE PLAN
The Plan is a pooled fund for certain participating employers, all of which
are direct or indirect subsidiaries of TCF Financial. Participant
deposits, employer contributions and the related net assets are as follows:
<TABLE>
<CAPTION>
Year Ended At
December 31, 1997 December 31, 1997
-------------------------------- -----------------
Participant Employer
Deposits Contributions Net Assets
Participating Employer at Cost at Cost
---------------------- ----------- ------------- ----------------
<S> <C> <C> <C>
TCF Financial Corporation $1,122,208 $ 457,633 $ 45,500,207
TCF National Bank Minnesota 1,334,577 550,653 48,206,366
TCF National Bank Illinois 494,991 198,813 7,799,053
TCF National Bank Wisconsin 345,408 137,831 6,845,590
Great Lakes National Bank Michigan 771,607 285,743 28,942,965
Great Lakes National Bank Ohio 21,850 10,061 888,222
TCF Colorado Corporation 22,406 7,463 153,312
TCF Mortgage Corporation, Inc. 281,347 118,721 10,787,180
North Star Title, Inc. 198,279 77,662 4,193,474
North Star Real Estate Services, Inc. 34,866 10,131 355,188
TCF Agency Minnesota, Inc. 23,173 8,064 745,842
TCF Realty, Inc. - - 127,492
TCF Financial Insurance Agency, Inc. 59,993 22,676 1,316,295
TCF Financial Insurance Agency
Wisconsin, Inc. 3,827 1,913 351,796
TCF Financial Insurance Agency
Illinois, Inc. 7,486 3,283 109,687
TCF Financial Insurance Agency
Michigan, Inc. 17,054 5,400 69,980
TCF Financial Services, Inc. 177,184 72,196 4,854,303
TCF Consumer Financial Services, Inc. 228,595 98,198 1,146,228
TCF Securities, Inc. 18,821 7,434 1,047,923
TCB Air, Inc. 6,154 1,846 57,033
------------ ------------ ------------
Total $5,169,826 $2,075,721 $163,498,136
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
TCF Realty, Inc. had no active employees as of December 31, 1997 or 1996.
<TABLE>
<CAPTION>
Year Ended At
December 31, 1996 December 31, 1996
-------------------------------- -----------------
Participant Employer
Deposits Contributions Net Assets
Participating Employer at Cost at Cost
---------------------- ----------- ------------- ----------------
<S> <C> <C> <C>
TCF Financial Corporation $ 948,987 $ 404,904 $ 30,227,722
TCF National Bank Minnesota 1,145,150 479,179 31,455,250
TCF National Bank Illinois 334,663 131,835 4,642,634
TCF National Bank Wisconsin 324,879 128,088 4,414,590
Great Lakes National Bank Michigan 795,983 318,222 22,053,249
TCF Mortgage Corporation, Inc. 260,977 110,081 7,810,477
North Star Title, Inc. 167,828 69,422 2,571,826
North Star Real Estate Services, Inc. 24,232 7,774 209,862
TCF Agency Minnesota, Inc. 17,361 5,545 457,685
TCF Realty, Inc. - - 81,707
TCF Financial Insurance Agency, Inc. 42,597 19,484 873,277
TCF Financial Insurance Agency
Wisconsin, Inc. 6,679 3,340 228,507
TCF Financial Insurance Agency
Illinois, Inc. 6,767 2,043 222,433
TCF Financial Insurance Agency
Michigan, Inc. 16,586 4,147 24,735
TCF Financial Services, Inc. 139,729 58,483 3,244,888
TCF Consumer Financial Services, Inc. 183,185 75,050 674,547
TCF Securities, Inc. 18,394 7,293 648,129
TCB Air, Inc. 5,580 1,674 29,450
------------ ------------ ------------
Total $4,439,577 $1,826,564 $109,870,968
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
-8-
<PAGE>
TCF Employees Stock Purchase Plan
Notes to Financial Statements (Continued)
(4) INCOME TAX STATUS
TCF Bank has received a favorable tax determination letter from the
Internal Revenue Service ("IRS") indicating that the Plan qualified under
Section 401(a) and 409 of the Code and met the requirements for a qualified
cash or deferred arrangement under Section 401(k) of the Code, and the
trust established thereunder is thereby exempt from federal income taxes
under Section 501(a) of the Code. As such, the Plan's assets are exempt
from federal income tax, and participant tax-deferred deposits and amounts
contributed by participating employers are not taxed to the employee until
a distribution from the Plan is received. Continued compliance with
ERISA is required to maintain this tax-exempt status. The plan
administrator believes the Plan continues to qualify under the
provisions of Section 401(a) of the Code and that the related trust is
exempt from federal income taxes.
(5) INVESTMENT IN TCF FINANCIAL COMMON STOCK
Plan investments are stated at market value, determined by quoted market
price. The net unrealized appreciation of investments reflected in Plan
equity is as follows:
<TABLE>
<CAPTION>
Year Ended
December 31,
-----------------------------------------
1997 1996 1995
------------- ------------ -----------
<S> <C> <C> <C>
Market value $162,848,754 $109,021,266 $68,320,975
Cost 32,959,941 29,530,448 21,576,372
------------- ------------ -----------
Unrealized appreciation $129,888,813 $ 79,490,818 $46,744,603
------------- ------------ -----------
------------- ------------ -----------
</TABLE>
The investments shown in the preceding table represent five percent or more
of plan equity.
(6) WITHDRAWALS AND TERMINATIONS
Participants can elect to receive distributions from the Plan in the form
of cash or shares of TCF Financial common stock. Distributions and sales
of TCF Financial common stock are as follows:
<TABLE>
<CAPTION>
Year Ended
December 31,
-------------------------------------------
1997 1996 1995
------------- ------------ -----------
<S> <C> <C> <C>
Number of shares 250,979 448,180 134,784
------------- ------------ -----------
------------- ------------ -----------
Cost of shares $ 3,007,808 $ 4,892,963 $2,321,899
Market value 11,303,499 16,054,483 5,872,392
------------- ------------ -----------
Gain on distribution $ 8,295,691 $11,161,520 $3,550,493
------------- ------------ -----------
------------- ------------ -----------
</TABLE>
-9-
<PAGE>
TCF Employees Stock Purchase Plan
Notes to Financial Statements (Continued)
Cash and TCF Financial common stock of $14,430,126, $18,929,168 and
$6,836,268 was distributed in 1997, 1996 and 1995, respectively. At
December 31, 1997 and 1996, liabilities including amounts due to
participants, which are deducted from net assets available for plan
benefits when paid, are $3,490,045 and $3,188,840, respectively.
The accompanying financial statements for 1997 and 1996 differ from Form
5500, as filed with the Internal Revenue Service, as follows:
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Net assets available for plan benefits per
accompanying financial statements $163,498,136 $109,870,968
Liabilities including amounts due to
participants (3,490,045) (3,188,840)
------------ ------------
Net assets available for plan benefits
per Form 5500 $160,008,091 $106,682,128
------------ ------------
------------ ------------
</TABLE>
Amounts forfeited and allocated to remaining participants are as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------
1996 1995
------------ ------------
<S> <C> <C>
Value of accounts terminated and withdrawn $19,007,119 $7,086,829
Withdrawals and terminations distributed 18,929,168 6,836,268
------------ ------------
Amount forfeited and allocated to
remaining participants $ 77,951 $ 250,561
------------ ------------
------------ ------------
</TABLE>
Beginning October 1996, forfeitures were used to offset plan expenses,
as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------
1997 1996
----------- -----------
<S> <C> <C>
Total forfeitures for the current year $ 151,409 $111,653
Forfeitures carried over from previous year 111,653 -
Forfeitures used to pay plan expenses (204,530) -
----------- -----------
Forfeitures to be used for future expenses $ 58,532 $111,653
----------- -----------
----------- -----------
</TABLE>
(7) MERGERS AND PLAN MERGERS
On April 21, 1993, Republic Capital Group, Inc. ("RCG") merged with TCF
Financial. The RCG 401(k) Employees' Savings Plan ("RCG 401(k)") was
terminated on September 30, 1993 and the termination was approved by the
IRS on November 9, 1994. RCG employees were given until January 31, 1995
to elect the method of distribution of their participant value in the
terminated RCG plan. Forty-six RCG 401(k) participants elected to rollover
to the Plan and these accounts were transferred in February 1995. These
rollovers increased the net assets of the Plan by $120,114.
-10-
<PAGE>
TCF Employees Stock Purchase Plan
Notes to Financial Statements (Continued)
On February 8, 1995, Great Lakes Bancorp ("GLB") merged with TCF Financial.
Effective January 1, 1996, GLB employees eligible for the GLB Employee
Stock Ownership Plan (the "GLB ESOP") became eligible for participation in
the Plan. The accounts of participants in the GLB ESOP were transferred to
the Plan in 1996. Transfers from the GLB ESOP have increased the net
assets of the Plan, net of expenses, by $24,958,456.
The GLB 401(k) Savings and Investment Plan (the "GLB" 401(k)") was
terminated on December 31, 1995 and the termination was approved by the IRS
on February 14, 1996. GLB employees were given until April 30, 1996 to
elect the method of distribution of their participant value in the
terminated plan. Assets were transferred in 1996 for those participants
requesting rollovers to the Plan. These rollovers increased the net assets
of the Plan by $1,856,808 in 1996 and by an additional $16,973 in 1997.
(8) PARTY-IN-INTEREST TRANSACTIONS
The Plan engages in transactions involving the acquisition or disposition
of TCF Financial common stock and units of First American Prime Obligation
Class C Institutional Fund investment fund of the Trustee. TCF Financial
and the Trustee are parties-in-interest. These transactions are covered by
an exemption from the "prohibited transactions" provisions of ERISA and the
Internal Revenue Code.
-11-
<PAGE>
SCHEDULE 1
TCF Employees Stock Purchase Plan
Item 27a - Schedule of Assets Held for Investment Purposes
At December 31, 1997
<TABLE>
<CAPTION>
Number
of Market
Issuer Description Shares Cost Value
------ ----------- ------ ---------- ------------
<S> <C> <C> <C> <C>
TCF Financial* Common Stock 4,798,490 $32,959,941 $162,848,754
First American
Prime Obligation
Class C
Institutional
Fund* Money Fund 645,855 $ 645,855 $ 645,855
</TABLE>
*Parties-in-interest
See accompanying independent auditors' report.
-12-
<PAGE>
SCHEDULE 2
TCF Employees Stock Purchase Plan
Item 27d - Schedule of Reportable Transactions
Year Ended December 31, 1997
SERIES OF TRANSACTIONS (INVOLVING ONE SECURITY) WHICH EXCEED 5% OF PLAN ASSETS:
<TABLE>
<CAPTION>
Number of Amount of
-------------------- ----------------------
Description of Asset Purchases Sales Purchases Sales Net Gain
- -------------------------- --------- ----- --------- ----- --------
<S> <C> <C> <C> <C> <C>
TCF Financial Common Stock* 27 51 $ 6,437,301 $11,303,499 $8,295,691
First American Prime
Obligation Class C
Institutional Fund* 83 52 $14,877,906 $15,076,744 $ -
</TABLE>
*Parties-in-interest
See accompanying independent auditors' report.
-13-
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, TCF
National Bank Minnesota has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
TCF National Bank Minnesota
(Plan Sponsor and Plan Administrator of
the TCF Employees Stock Purchase Plan)
By /s/ Gregory J. Pulles
----------------------------------
Gregory J. Pulles
Executive Vice President
By /s/ Mark R. Lund
---------------------------------
Mark R. Lund
Senior Vice President and
Assistant Treasurer
Date: June 23, 1998
-14-
<PAGE>
TCF Employees Stock Purchase Plan
Index to Exhibits
For Form 11-K
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Description Numbered Page
------- ----------- -------------
<C> <S> <C>
23 Consent of KPMG Peat Marwick LLP
dated June 23, 1998
</TABLE>
-15-
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and
The Administrator of the TCF
Employee Stock Purchase Plan:
We consent to incorporation by reference in the registration statement (No.
33-43030) on Form S-8 of TCF Financial Corporation of our report dated June 12,
1998, relating to the statements of net assets available for plan benefits of
the TCF Employees Stock Purchase Plan as of December 31, 1997 and 1996, and the
related statements of changes in net assets available for plan benefits for each
of the years in the three-year period ended December 31, 1997, and related
schedules as of and for the year ended December 31, 1997, which report appears
elsewhere in this December 31, 1997 annual report on Form 11-K of the TCF
Employees Stock Purchase Plan.
/s/ KPMG Peat Marwick LLP
Minneapolis, Minnesota
June 23, 1998
