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Allowance for Loan and Lease Losses Credit risk is the risk of loss from a customer default on a loan or lease. TCF has in place a process to identify and manage its credit risk. The process includes initial credit review and approval, periodic monitoring to measure compliance with credit agreements and internal credit policies, mon- itoring changes in the risk ratings of loans and leases, identification of problem loans and leases and procedures for the collection of problem loans and leases. The risk of loss is difficult to quantify and is subject to fluctuations in values, general economic conditions and other factors. The determination of the allowance for loan and lease losses is a critical accounting policy which involves estimates and man- agement’s judgment on a number of factors such as net charge-offs, delinquencies in the loan and lease portfolio, general economic con- ditions and management’s assessment of credit risk in the current loan and lease portfolio. The Company considers the allowance for 

loan and lease losses of $77 million adequate to cover losses inher- ent in the loan and lease portfolios as of December 31, 2002. However, no assurance can be given that TCF will not, in any par- ticular period, sustain loan and lease losses that are sizable in rela- tion to the amount reserved, or that subsequent evaluations of the loan and lease portfolio, in light of factors then prevailing, includ- ing economic conditions and TCF’s on-going credit review process, will not require significant increases in the allowance for loan and lease losses. Among other factors, a protracted economic slowdown and/or a decline in commercial or residential real estate values in TCF’s markets may have an adverse impact on the adequacy of the allowance for loan and lease losses by increasing credit risk and the risk of potential loss. See “Forward-Looking Information” and Notes 1 and 7 of Notes to Consolidated Financial Statements for additional information concerning TCF’s allowance for loan and lease losses. 

The following table sets forth information detailing the allowance for loan and lease losses and selected statistics: 

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