The allocation of TCF’s allowance for loan and lease losses, including general and specific loss allocations, is as follows: N.A. Not applicable. The allocated allowance balances for TCF’s residential and con- sumer loan portfolios, at December 31, 2002, reflect the Company’s credit quality and related low level of net loan charge-offs for these portfolios. The increase in the allocated allowance for the commer- cial business portfolio reflects the growth in the portfolio and the increase in charge-offs in the commercial business portfolio. The increase in the allocated allowance for leasing and equipment finance losses reflects the continued growth in the portfolio. The allocated allowances for these portfolios do not reflect any significant changes in estimation methods or assumptions. The increase in TCF’s allowance for loan and lease losses as a per- centage of total loans and leases, at December 31, 2002, reflects the impact of the continued growth in the commercial loan and leasing and equipment finance portfolios coupled with increased charge- offs in the commercial loan portfolio. Net loan and lease charge-offs The following table sets forth additional information regarding net charge-offs: were $20 million, or .25% of average loans and leases outstanding in 2002, compared with $12.5 million, or .15% of average loans and leases in 2001 and $3.9 million, or .05% of average loans and leases in 2000. Commercial real estate net charge-offs were $2.1 million for 2002, compared with $19,000 for 2001. Commercial real estate net charge-offs for 2002 included a $1.6 million charge-off on a commercial real estate property transferred to other real estate owned in the second quarter of 2002. Commercial business net charge-offs were $5.9 million during 2002, compared with net charge-offs of $236,000 in 2001, and included a $4.3 million charge-off related to $7.4 million of loans to a banking customer who is dependent on the transportation industry, which has been severely impacted by the economic slowdown. Leasing and equipment finance net charge-offs were $8 million during 2002, compared with net charge-offs of $9.1 million for 2001.  page 36 Allocations as a Percentage of Total Loans and Leases Outstanding by Type At December 31, At December 31, (Dollars in thousands) 2002 2001 2000 1999 1998 2002 2001 2000 1999 1998 Consumer . . . . . . . . . . . . . . $ 8,532 $8 ,355 $ 9,764 $10,701 $32,011 .28% .33% .44% .52% 1.71% Commercial real estate . . . . . 22,176 24,459 20,753 12,708 12,525 1.21 1.51 1.51 1.18 1.54 Commercial business . . . . . . 15,910 12,117 9,668 8,256 5,756 3.62 2.87 2.36 2.35 1.99 Leasing and equipment finance . . . . . . . . . . . . . . 12,881 11,774 7,583 4,237 2,955 1.24 1.23 .89 .86 .74 Unallocated . . . . . . . . . . . . . 16,139 16,139 16,139 16,839 23,295 N.A. N.A. N.A. N.A. N.A. Subtotal . . . . . . . . . . . . . 75,638 72,844 63,907 52,741 76,542 1.20 1.32 1.31 1.33 2.27 Residential real estate . . . . . . 1,370 2,184 2,762 3,014 3,471 .08 .08 .08 .08 .09 Total allowance balance . . . $77,008 $75,028 $66,669 $55,755 $80,013 .95 .91 .78 .71 1.12 Year Ended December 31, 2002 2001 % of Average % of Average Net Loans and Net Loans and (Dollars in thousands) Charge-offs Leases Charge-offs Leases Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,974  .15% $3 ,118 .13% Commercial real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,138 .12 19 – Commercial business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,898 1.35 236 .06 Leasing and equipment finance: Middle market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 901 .35 513 .39 Winthrop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 .04 2,182 .64 Wholesale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,998 1.57 1,621 .85 Small ticket . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 875 .77 1,242 1.37 Leveraged leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – – _ Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,887 .56 5,558 .73 Truck and trailer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,079 2.50 3,587 2.31 Total leasing and equipment finance . . . . . . . . . . . . . . . . . . . 7,966 .80 9,145 1.00 Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,976 .34 12,518 .24 Residential real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 – 1 – Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,026 .25 $12,519 .15