increased our loan and lease loss reserves by $2 million. Delinquency and non-performing assets were at very low levels. Good credit quality is related not only to the type of loans on the balance sheet, but also the type of funding. TCF’s very profitable and growing deposit function allows us to operate our loan portfolio with relatively low credit risk.  New Branch Expansion TCF believes in a de novo style of new branch expansion and we continue to invest in this important strategy. Our new branches are like seeds planted in an orchard. We plant them strategically, tend to them carefully and patiently as they grow, and harvest the rewards of our investment as they mature. While de novo expansion has been unusual in the banking industry, most successful retailers such as Wal-Mart ® , Target ® , and our supermarket partners, Cub ® Foods and Jewel-Osco ® , grow through de novo expansion. This strategy has provided TCF an ever-growing cus- tomer base with a low cost of funds. As of December 31, 2002, TCF had $2.1 billion of non-interest bearing deposits. We opened 15 new supermarket branches and 12 traditional branches in 2002. We have opened 220 branches in the last five years, bringing our overall branch network to 395. Many of these new branches are now becoming profitable. The increasing profits from our past branch expan- sion funds continued future new branch expansion. What we really like about the de novo model is that you can pick the places you want to go, determine the pace of expansion and control the culture. The cost of this new branch expansion flows through the income state- ment faster than the dilution created through acquisition, but is ultimately more profitable. We believe we can bring these new branches to prof- itability quickly enough that expansion is a better use of our capital than paying the premiums of acquisition. The internal rate of return on expan- sion is one of the “hurdle rates” we use to measure acquisitions. Although we would not rule out an acquisition in the future, we believe the de novo strategy is best for us right now. Given our current de novo expansion opportunities, we would issue new shares for an acquisition grudgingly. 2002 Annual Report _  Investing in the Future page 4 Fees and Other Revenue Net Interest Income 02 01 00 99 98 $236 $274 $323 $367 $405 2002 Annual Growth Rate of +10%GLYPH<CR> (millions of dollars) 02 01 00 99 98 $426 $424 $439 $481 $499 2002 Annual Growth Rate of +4%GLYPH<CR> (millions of dollars)