Consolidated Income Statement Analysis page 23 $^{(1)}$Tax-exempt income was not significant and thus interest income and related yields have not been presented on a tax equivalent basis. Tax-exempt income of $354,000, $156,000 and $181,000 was recognized during the years ended December 31, 2002, 2001 and 2000, respectively. $^{(2)}$Average balance and yield of securities available for sale are based upon the historical amortized cost. $^{(3)}$Average balance of loans and leases includes non-accrual loans and leases, and is presented net of unearned income. $^{(4)}$Average balance is based upon month-end balances. The following table presents TCF’s average balance sheets, interest and dividends earned or paid, and the related yields and rates on major categories of TCF’s interest-earning assets and interest-bearing liabilities: Net interest income was $499.2 million for the year ended December 31, 2002, compared with $481.2 million in 2001 and $438.5 million in 2000. This represents an increase of 3.7% in 2002, compared with an increase of 9.7% in 2001 and an increase of 3.4% in 2000. Total average interest-earning assets decreased .7% in 2002, following increases of 5.9% in 2001 and 6.1% in 2000. The net interest margin for 2002 was 4.71%, compared with 4.51% in 2001 and 4.35% in 2000.  Net Interest Income Net interest income, which is the difference between interest earned on loans and leases, securities available for sale and other interest-earning assets (interest income), and interest paid on deposits and borrowings (interest expense), represented 54.4% of TCF’s revenue in 2002. Net interest income divided  by average interest-earning assets is referred to as the net interest margin, expressed as a percentage. Net interest income and net interest margin are affected by changes in interest rates, loan pric- ing strategies and competitive conditions, the volume and the mix of interest-earning assets and interest-bearing liabilities, and the level of non-performing assets.  Year Ended Year Ended Year Ended December 31, 2002 December 31, 2001 December 31, 2000 Yields Yields Yields Average and Average and Average and (Dollars in thousands) Balance Interest (1) Rates Balance Interest (1) Rates Balance Interest (1) Rates Assets: Investments . . . . . . . . . . . . . . . . . . . $ 154,862 $ 6,934  4.48% $ 164,362 $ 8,966 5.46% $ 139,840 $ 10,041 7.18% Securities available for sale (2)  . . . . . . 1,879,893 118,272 6.29 1,706,093 112,267 6.58 1,500,225 99,185 6.61 Loans held for sale . . . . . . . . . . . . . . 437,702 22,464 5.13 379,045 24,266 6.40 220,560 17,130 7.77 Loans and leases: Consumer . . . . . . . . . . . . . . . . . 2,712,812 207,492 7.65 2,346,349 215,438 9.18 2,139,135 218,577 10.22 Commercial real estate . . . . . . . . 1,746,207 118,355 6.78 1,490,616 116,128 7.79 1,195,985 103,181 8.63 Commercial business . . . . . . . . . 435,488 22,699 5.21 409,685 29,893 7.30 367,072 33,483 9.12 Leasing and equipment finance . . 995,672 85,447 8.58 918,915 89,131 9.70 650,616 69,960 10.75 Subtotal . . . . . . . . . . . . . . . . 5,890,179 433,993 7.37 5,165,565 450,590 8.72 4,352,808 425,201 9.77 Residential real estate . . . . . . . . . 2,227,537 151,700 6.81 3,251,328 230,520 7.09 3,860,025 275,124 7.13 Total loans and leases (3)  . . . . . 8,117,716 585,693 7.21 8,416,893 681,110 8.09 8,212,833 700,325 8.53 Total interest-earning assets . 10,590,173 733,363 6.92 10,666,393 826,609 7.75 10,073,458 826,681 8.21 Other assets (4)  . . . . . . . . . . . . . . . . . 1,020,331  886,713 773,799 Total assets . . . . . . . . . . . . . . $11,610,504 $11,553,106 $10,847,257 Liabilities and Stockholders’ Equity: Non-interest bearing deposits . . . . . $ 1,893,916 $1 ,580,907 $ 1,328,932 Interest-bearing deposits: Checking . . . . . . . . . . . . . . . . . . 915,720 1,479 .16 790,023 3,549 .45 739,429 4,391 .59 Savings . . . . . . . . . . . . . . . . . . . 1,560,539 15,924 1.02 1,018,730 7,472 .73 1,036,861 11,571 1.12 Money market . . . . . . . . . . . . . . 919,393 9,737 1.06 902,091 21,144 2.34 758,240 25,139 3.32 Subtotal . . . . . . . . . . . . . . . . 3,395,652 27,140 .80 2,710,844 32,165 1.19 2,534,530 41,101 1.62 Certificates . . . . . . . . . . . . . . . . 2,108,708 68,246 3.24 2,607,009 130,562 5.01 2,824,456 155,993 5.52 Total interest-bearing deposits . . 5,504,360 95,386 1.73 5,317,853 162,727 3.06 5,358,986 197,094 3.68 Total deposits . . . . . . . . . . 7,398,276 95,386 1.29 6,898,760 162,727 2.36 6,687,918 197,094 2.95 Borrowings: Short-term borrowings . . . . . . . 573,935 9,874 1.72 1,097,688 44,800 4.08 767,302 49,218 6.41 Long-term borrowings . . . . . . . . 2,277,974 128,878 5.66 2,345,742 137,860 5.88 2,331,400 141,833 6.08 Total borrowings . . . . . . . . . . 2,851,909 138,752 4.87 3,443,430 182,660 5.30 3,098,702 191,051 6.17 Total interest-bearing  liabilities . . . . . . . . . . 8,356,269 234,138 2.80 8,761,283 345,387 3.94 8,457,688 388,145 4.59 Total deposits and borrowings . . . . . . . . . . . 10,250,185 234,138 2.28 10,342,190 345,387 3.34 9,786,620 388,145 3.97 Other liabilities (4)  . . . . . . . . . . . . . . . 442,404  311,871 238,047 Total liabilities . . . . . . . . . . . . . . 10,692,589 10,654,061 10,024,667 Stockholders’ equity (4)  . . . . . . . . . . . 917,915  899,045 822,590 Total liabilities and stockholders’ equity . . . . . . . . $11,610,504  $11,553,106 $10,847,257 Net interest income and margin  . . $ 499,225 4.71% $ 481,222  4.51% $ 438,536  4.35%