TABLE OF CONTENTS




|                                                                                              |                                                |  |  |  |  |  |  | 
|--------------------------------------------------------------------------------------------- | ---------------------------------------------- |  |  |  |  |  |  | 
|ITEM 1. Financial Statements                                                                 
|                                                                                              | CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
|                                                                                              | CONSOLIDATED STATEMENTS OF INCOME             
|                                                                                              | CONSOLIDATED STATEMENTS OF CASH FLOWS         
|                                                                                              | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|ITEM 3. Quantitative and Qualitative Disclosure About Market Risk                            
|ITEM 5. Other Information                                                                    
|ITEM 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                                                                   
|EXHIBIT 11--Computation of Per Share Earnings                                                



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##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



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FORM 10-Q

[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2001

OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-15495



CHARTER ONE FINANCIAL, INC.
(Exact name of registrant as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 34-1567092                          
|                                                               |  |                                     
|(State or other jurisdiction of incorporation
or organization) |  | (I.R.S. Employer
Identification No.)
|                                                               |  |                                     
|1215 Superior Avenue, Cleveland, Ohio                          |  | 44114                               
|                                                               |  |                                     
|(Address of principal executive offices)                       |  | (Zip Code)                          

(216) 566-5300

(Registrants telephone number, including
area code)


NOT
APPLICABLE

(Former name, former address and former fiscal year, if changed since report)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes
X  No

The number of shares outstanding of the registrants sole class of common stock
as of October 31, 2001 was 224,758,554.





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##### Table of Contents



TABLE OF CONTENTS

|           |                                                                                       |                                                                                             |    |      | 
|---------- | ------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------- | -- | ---- | 
|Item       |                                                                                       |                                                                                             |    |     
|Number     |                                                                                       |                                                                                             |    | Page
|           |                                                                                       |                                                                                             |    |     
|           |                                                                                       | PART I  FINANCIAL STATEMENTS                                                               |    |     
|1.         | Financial Statements                                                                  |                                                                                             |   
|           |                                                                                       | Consolidated Statements of Financial Condition 
September 30, 2001 and December 31, 2000   |    | 1    | 
|           |                                                                                       | Consolidated Statements of Income 
Three and nine months ended September 30, 2001 and 2000 |    | 2    | 
|           |                                                                                       | Consolidated Statements of Cash Flows 
Nine months ended September 30, 2001 and 2000       |    | 3    | 
|           |                                                                                       | Notes to Consolidated Financial Statements                                                  |    | 4    | 
|2.         | Managements Discussion and Analysis of Financial Condition and Results of Operations |                                                                                             | 6  |     
|3.         | Quantitative and Qualitative Disclosure About Market Risk                             |                                                                                             | 23 |     
|          
|           |                                                                                       | PART II  OTHER INFORMATION                                                                 |    |     
|5.         | Other Information                                                                     |                                                                                             | 23 |     
|6.         | Exhibits and Reports on Form 8-K                                                      |                                                                                             | 23 |     
|Signatures |                                                                                       |                                                                                             | 23 |     





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##### Table of Contents



PART I  FINANCIAL INFORMATION




ITEM 1. Financial Statements

CHARTER ONE FINANCIAL, INC. AND SUBSIDIARIES 
 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited)


|                                                      |                                                                                                                   |                                 |                                            |            |                        |            |            |            |            |            | 
|----------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------- | ------------------------------- | ------------------------------------------ | ---------- | ---------------------- | ---------- | ---------- | ---------- | ---------- | ---------- | 
|                                                      |                                                                                                                   |                                 |                                            |            | 9/30/01                |            | 12/31/00  
|                                                      |                                                                                                                   |                                 |                                            |            |                        |            |           
|                                                      |                                                                                                                   |                                 |                                            |            | (Dollars in thousands,
|                                                      |                                                                                                                   |                                 |                                            |            | except per share data)
|                                                      |                                                                                                                   |                                 |                                            |            |                       
|ASSETS                                                |                                                                                                                   |                                 |                                            |            |                        |            |            |           
|Cash and deposits with banks                          |                                                                                                                   | $                               | 565,955                                    |            |                        | $          | 530,771    |           
|Federal funds sold and other                          |                                                                                                                   |                                 | 504                                        |            |                        |            | 486        |           
|                                                      |                                                                                                                   |                                 |                                            |            |                        |            |            |           
|                                                      |                                                                                                                   | Total cash and cash equivalents |                                            |            | 566,459                |            |            |            | 531,257    |           
|Investment securities:                                |                                                                                                                   |                                 |                                            |            |                        |            |            |           
|                                                      | Available for sale                                                                                                |                                 |                                            | 133,409    |                        |            |            | 426,701    |           
|                                                      | Held to maturity (fair value of $7,331 and $22,671)                                                               |                                 |                                            | 7,088      |                        |            |            | 22,514     |           
|Mortgage-backed securities:                           |                                                                                                                   |                                 |                                            |            |                        |            |            |           
|                                                      | Available for sale                                                                                                |                                 |                                            | 7,390,874  |                        |            |            | 4,087,196  |           
|                                                      | Held to maturity (fair value of $1,167,640 and $1,531,525)                                                        |                                 |                                            | 1,129,049  |                        |            |            | 1,506,175  |           
|Loans and leases, net                                 |                                                                                                                   |                                 | 25,194,411                                 |            |                        |            | 23,950,172 |           
|Loans held for sale                                   |                                                                                                                   |                                 | 204,126                                    |            |                        |            | 58,002     |           
|Bank owned life insurance                             |                                                                                                                   |                                 | 798,124                                    |            |                        |            | 743,509    |           
|Federal Home Loan Bank stock                          |                                                                                                                   |                                 | 614,603                                    |            |                        |            | 568,377    |           
|Premises and equipment                                |                                                                                                                   |                                 | 348,821                                    |            |                        |            | 323,911    |           
|Accrued interest receivable                           |                                                                                                                   |                                 | 176,359                                    |            |                        |            | 165,990    |           
|Real estate and other collateral owned                |                                                                                                                   |                                 | 45,642                                     |            |                        |            | 27,731     |           
|Loan servicing assets                                 |                                                                                                                   |                                 | 148,875                                    |            |                        |            | 121,735    |           
|Goodwill                                              |                                                                                                                   |                                 | 300,104                                    |            |                        |            | 172,411    |           
|Other assets                                          |                                                                                                                   |                                 | 244,184                                    |            |                        |            | 265,746    |           
|                                                      |                                                                                                                   |                                 |                                            |            |                        |            |            |           
|                                                      |                                                                                                                   | Total assets                    |                                            | $          | 37,302,128             |            |            | $          | 32,971,427 |           
|                                                      |                                                                                                                   |                                 |                                            |            |                        |            |            |           
|LIABILITIES AND SHAREHOLDERS EQUITY                  |                                                                                                                   |                                 |                                            |            |                        |            |            |           
|Deposits:                                             |                                                                                                                   |                                 |                                            |            |                        |            |            |           
|                                                      | Checking accounts                                                                                                 |                                 | $                                          | 6,405,681  |                        |            | $          | 3,941,912  |           
|                                                      | Money market accounts and savings accounts                                                                        |                                 |                                            | 6,754,670  |                        |            |            | 5,486,158  |           
|                                                      | Certificates of deposit                                                                                           |                                 |                                            | 10,328,720 |                        |            |            | 10,177,601 |           
|                                                      |                                                                                                                   |                                 |                                            |            |                        |            |            |           
|                                                      |                                                                                                                   |                                 | Total deposits                             |            |                        | 23,489,071 |            |            |            | 19,605,671 | 
|Federal Home Loan Bank advances                       |                                                                                                                   |                                 | 9,139,367                                  |            |                        |            | 9,636,277  |           
|Reverse repurchase agreements                         |                                                                                                                   |                                 | 467,771                                    |            |                        |            | 262,326    |           
|Other borrowings                                      |                                                                                                                   |                                 | 306,987                                    |            |                        |            | 284,808    |           
|Advance payments by borrowers for taxes and insurance |                                                                                                                   |                                 | 57,775                                     |            |                        |            | 60,761     |           
|Accrued interest payable                              |                                                                                                                   |                                 | 73,908                                     |            |                        |            | 54,499     |           
|Accrued expenses and other liabilities                |                                                                                                                   |                                 | 841,057                                    |            |                        |            | 610,881    |           
|                                                      |                                                                                                                   |                                 |                                            |            |                        |            |            |           
|                                                      |                                                                                                                   |                                 | Total liabilities                          |            |                        | 34,375,936 |            |            |            | 30,515,223 | 
|                                                      |                                                                                                                   |                                 |                                            |            |                        |            |            |           
|Shareholders equity:                                 |                                                                                                                   |                                 |                                            |            |                        |            |            |           
|                                                      | Preferred stock  $.01 par value per share; 20,000,000
shares authorized and unissued                             |                                 |                                            |           |                        |            |            |           |           
|                                                      | Common stock  $.01 par value per share; 360,000,000
shares authorized; 224,427,720 and 212,684,698 shares issued |                                 |                                            | 2,244      |                        |            |            | 2,127      |           
|                                                      | Additional paid-in capital                                                                                        |                                 |                                            | 2,084,103  |                        |            |            | 1,745,232  |           
|                                                      | Retained earnings                                                                                                 |                                 |                                            | 721,430    |                        |            |            | 786,793    |           
|                                                      | Less 0 and 4,456,293 shares of common stock held in treasury at cost                                              |                                 |                                            |           |                        |            |            | (100,545   | )         
|                                                      | Borrowings of employee investment and stock ownership plan                                                        |                                 |                                            | (314       | )                      |            |            | (1,256     | )         
|                                                      | Accumulated other comprehensive income                                                                            |                                 |                                            | 118,729    |                        |            |            | 23,853     |           
|                                                      |                                                                                                                   |                                 |                                            |            |                        |            |            |           
|                                                      |                                                                                                                   |                                 | Total shareholders equity                 |            |                        | 2,926,192  |            |            |            | 2,456,204  | 
|                                                      |                                                                                                                   |                                 |                                            |            |                        |            |            |           
|                                                      |                                                                                                                   |                                 | Total liabilities and shareholders equity |            | $                      | 37,302,128 |            |            | $          | 32,971,427 | 
|                                                      |                                                                                                                   |                                 |                                            |            |                        |            |            |           

See Notes to Consolidated Financial Statements

1



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##### Table of Contents



CHARTER ONE FINANCIAL, INC. AND SUBSIDIARIES 
 CONSOLIDATED STATEMENTS OF INCOME (unaudited)


|                                      |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |             |           | 
|------------------------------------- | ---------------------------------- | ------------------------------------------------------------- | ------- | --------------------------------------------- | ------- | ----------------- | ------- | ----------- | ------- | ------- | ------- | ----------- | --------- | - | ------- | ----------- | --------- | 
|                                      |                                    |                                                               |         | Three Months Ended                            |         | Nine Months Ended
|                                      |                                    |                                                               |         |                                               |         |                  
|                                      |                                    |                                                               |         | 9/30/01                                       |         | 9/30/00           |         | 9/30/01     |         | 9/30/00
|                                      |                                    |                                                               |         |                                               |         |                   |         |             |         |        
|                                      |                                    |                                                               |         | (Dollars in thousands, except per share data)
|Interest income:                      |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |            
|                                      | Loans and leases                   |                                                               | $       | 484,697                                       |         |                   | $       | 462,766     |         |         | $       | 1,410,215   |           |   | $       | 1,337,985   |          
|                                      | Mortgage-backed securities:        |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |             |          
|                                      |                                    | Available for sale                                            |         |                                               | 89,819  |                   |         |             | 66,222  |         |         |             | 257,156   |   |         |             | 171,761   | 
|                                      |                                    | Held to maturity                                              |         |                                               | 20,141  |                   |         |             | 29,442  |         |         |             | 69,711    |   |         |             | 92,704    | 
|                                      | Investment securities:             |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |             |          
|                                      |                                    | Trading                                                       |         |                                               |        |                   |         |             |        |         |         |             |          |   |         |             | 38        | 
|                                      |                                    | Available for sale                                            |         |                                               | 3,387   |                   |         |             | 8,142   |         |         |             | 8,439     |   |         |             | 25,355    | 
|                                      |                                    | Held to maturity                                              |         |                                               | 88      |                   |         |             | 417     |         |         |             | 324       |   |         |             | 1,261     | 
|                                      | Other interest-earning assets      |                                                               |         | 10,850                                        |         |                   |         | 10,529      |         |         |         | 32,355      |           |   |         | 28,082      |          
|                                      |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |            
|                                      |                                    | Total interest income                                         |         |                                               | 608,982 |                   |         |             | 577,518 |         |         |             | 1,778,200 |   |         |             | 1,657,186 | 
|                                      |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |            
|Interest expense:                     |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |            
|                                      | Deposits                           |                                                               |         | 224,811                                       |         |                   |         | 192,399     |         |         |         | 655,595     |           |   |         | 554,322     |          
|                                      | FHLB advances                      |                                                               |         | 122,214                                       |         |                   |         | 151,549     |         |         |         | 386,147     |           |   |         | 390,673     |          
|                                      | Other borrowings                   |                                                               |         | 8,633                                         |         |                   |         | 10,401      |         |         |         | 25,982      |           |   |         | 23,986      |          
|                                      |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |            
|                                      |                                    | Total interest expense                                        |         |                                               | 355,658 |                   |         |             | 354,349 |         |         |             | 1,067,724 |   |         |             | 968,981   | 
|                                      |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |            
|                                      |                                    | Net interest income                                           |         |                                               | 253,324 |                   |         |             | 223,169 |         |         |             | 710,476   |   |         |             | 688,205   | 
|Provision for loan and lease losses   |                                    |                                                               | 27,109  |                                               |         |                   | 13,178  |             |         |         | 61,913  |             |           |   | 33,285  |            
|                                      |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |            
|                                      |                                    | Net interest income after provision for loan
and lease losses |         |                                               | 226,215 |                   |         |             | 209,991 |         |         |             | 648,563   |   |         |             | 654,920   | 
|                                      |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |            
|Other income:                         |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |            
|                                      | Retail banking                     |                                                               |         | 72,285                                        |         |                   |         | 64,401      |         |         |         | 211,784     |           |   |         | 177,899     |          
|                                      | Mortgage banking                   |                                                               |         | 9,637                                         |         |                   |         | 13,994      |         |         |         | 27,947      |           |   |         | 41,947      |          
|                                      | Leasing operations                 |                                                               |         | 2,230                                         |         |                   |         | 2,022       |         |         |         | 3,768       |           |   |         | 14,014      |          
|                                      | Net gains                          |                                                               |         | 26,302                                        |         |                   |         | 5,522       |         |         |         | 67,976      |           |   |         | 12,133      |          
|                                      | Other                              |                                                               |         | 9,691                                         |         |                   |         | 13,850      |         |         |         | 29,325      |           |   |         | 35,311      |          
|                                      |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |            
|                                      |                                    | Total other income                                            |         |                                               | 120,145 |                   |         |             | 99,789  |         |         |             | 340,800   |   |         |             | 281,304   | 
|                                      |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |            
|Administrative expenses:              |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |            
|                                      | Compensation and employee benefits |                                                               |         | 73,951                                        |         |                   |         | 67,507      |         |         |         | 207,488     |           |   |         | 208,986     |          
|                                      | Net occupancy and equipment        |                                                               |         | 27,051                                        |         |                   |         | 26,076      |         |         |         | 80,226      |           |   |         | 75,991      |          
|                                      | Federal deposit insurance premiums |                                                               |         | 1,026                                         |         |                   |         | 1,066       |         |         |         | 2,874       |           |   |         | 3,072       |          
|                                      | Merger expenses                    |                                                               |         |                                              |         |                   |         | 1,961       |         |         |         |            |           |   |         | 26,064      |          
|                                      | Amortization of goodwill           |                                                               |         | 4,039                                         |         |                   |         | 4,045       |         |         |         | 12,117      |           |   |         | 12,135      |          
|                                      | Other administrative expenses      |                                                               |         | 49,183                                        |         |                   |         | 47,962      |         |         |         | 150,954     |           |   |         | 132,626     |          
|                                      |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |            
|                                      |                                    | Total administrative expenses                                 |         |                                               | 155,250 |                   |         |             | 148,617 |         |         |             | 453,659   |   |         |             | 458,874   | 
|                                      |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |            
|Income before income taxes            |                                    |                                                               | 191,110 |                                               |         |                   | 161,163 |             |         |         | 535,704 |             |           |   | 477,350 |            
|Income taxes                          |                                    |                                                               | 60,677  |                                               |         |                   | 51,571  |             |         |         | 170,069 |             |           |   | 152,762 |            
|                                      |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |            
|                                      |                                    | Net income                                                    |         | $                                             | 130,433 |                   |         | $           | 109,592 |         |         | $           | 365,635   |   |         | $           | 324,588   | 
|                                      |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |            
|Basic earnings per share(1)           |                                    | $                                                             | .58     |                                               |         | $                 | .50     |             |         | $       | 1.65    |             |           | $ | 1.43    |            
|                                      |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |            
|Diluted earnings per share(1)         |                                    | $                                                             | .57     |                                               |         | $                 | .49     |             |         | $       | 1.62    |             |           | $ | 1.41    |            
|                                      |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |            
|Average common shares outstanding(1): |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |            
|                                      | Basic                              |                                                               |         | 224,709,693                                   |         |                   |         | 219,848,584 |         |         |         | 220,456,833 |           |   |         | 226,407,764 |          
|                                      |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |            
|                                      | Diluted                            |                                                               |         | 230,579,401                                   |         |                   |         | 224,454,754 |         |         |         | 226,068,301 |           |   |         | 230,334,428 |          
|                                      |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |            
|Cash dividends declared per share(1)  |                                    | $                                                             | .19     |                                               |         | $                 | .16     |             |         | $       | .55     |             |           | $ | .46     |            
|                                      |                                    |                                                               |         |                                               |         |                   |         |             |         |         |         |             |           |   |         |            



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|(1) |  | Restated to reflect the 5% stock dividend issued September 28, 2001.
|--- |  | --------------------------------------------------------------------

See Notes to Consolidated Financial Statements

2



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##### Table of Contents



CHARTER ONE FINANCIAL, INC. AND SUBSIDIARIES 
 CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)


|                                                     |                                                                                   |                                                                                                  |                                           |            |                        |            |          |            |           |            |  
|---------------------------------------------------- | --------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------ | ----------------------------------------- | ---------- | ---------------------- | ---------- | -------- | ---------- | --------- | ---------- | -
|                                                     |                                                                                   |                                                                                                  |                                           |            | Nine Months Ended     
|                                                     |                                                                                   |                                                                                                  |                                           |            |                       
|                                                     |                                                                                   |                                                                                                  |                                           |            | 9/30/01                |            | 9/30/00 
|                                                     |                                                                                   |                                                                                                  |                                           |            |                        |            |         
|                                                     |                                                                                   |                                                                                                  |                                           |            | (Dollars in thousands)
|Cash flows from operating activities:                |                                                                                   |                                                                                                  |                                           |            |                        |            |          |           
|                                                     | Net income                                                                        |                                                                                                  | $                                         | 365,635    |                        |            | $        | 324,588    |          
|                                                     | Adjustments to reconcile net income to net cash provided by
operating activities: |                                                                                                  |                                           |            |                        |            |          |            |          
|                                                     |                                                                                   | Provision for loan and lease losses                                                              |                                           |            | 61,913                 |            |          |            | 33,285    |           
|                                                     |                                                                                   | Net gains                                                                                        |                                           |            | (66,326                | )          |          |            | (10,551   | )         
|                                                     |                                                                                   | Accretion of discounts, amortization of premiums, amortization of
goodwill and depreciation, net |                                           |            | 82,912                 |            |          |            | 70,421    |           
|                                                     |                                                                                   | Origination of loans held for sale                                                               |                                           |            | (1,159,814             | )          |          |            | (327,375  | )         
|                                                     |                                                                                   | Proceeds from sale of loans held for sale                                                        |                                           |            | 1,158,869              |            |          |            | 325,884   |           
|                                                     |                                                                                   | Proceeds from investment securities held for trading                                             |                                           |            |                       |            |          |            | 13,418    |           
|                                                     |                                                                                   | Increase (decrease) in accrued interest payable                                                  |                                           |            | 19,409                 |            |          |            | (14,685   | )         
|                                                     |                                                                                   | Other                                                                                            |                                           |            | 269,713                |            |          |            | 82,998    |           
|                                                     |                                                                                   |                                                                                                  |                                           |            |                        |            |          |           
|                                                     |                                                                                   |                                                                                                  | Net cash provided by operating activities |            |                        | 732,311    |          |            |           | 497,983    |  
|                                                     |                                                                                   |                                                                                                  |                                           |            |                        |            |          |           
|Cash flows from investing activities:                |                                                                                   |                                                                                                  |                                           |            |                        |            |          |           
|                                                     | Net principal disbursed on loans and leases                                       |                                                                                                  |                                           | (5,526,718 | )                      |            |          | (4,434,899 | )        
|                                                     | Proceeds from principal repayments and maturities of:                             |                                                                                                  |                                           |            |                        |            |          |            |          
|                                                     |                                                                                   | Mortgage-backed securities held to maturity                                                      |                                           |            | 378,007                |            |          |            | 305,291   |           
|                                                     |                                                                                   | Mortgage-backed securities available for sale                                                    |                                           |            | 779,379                |            |          |            | 207,147   |           
|                                                     |                                                                                   | Investment securities held to maturity                                                           |                                           |            | 15,947                 |            |          |            | 8,286     |           
|                                                     |                                                                                   | Investment securities available for sale                                                         |                                           |            | 356,869                |            |          |            | 57,091    |           
|                                                     | Proceeds from sale of:                                                            |                                                                                                  |                                           |            |                        |            |          |            |          
|                                                     |                                                                                   | Mortgage-backed securities available for sale                                                    |                                           |            | 2,990,729              |            |          |            | 2,978,762 |           
|                                                     |                                                                                   | Investment securities available for sale                                                         |                                           |            | 9,656                  |            |          |            | 13,301    |           
|                                                     |                                                                                   | Federal Home Loan Bank stock                                                                     |                                           |            | 15,077                 |            |          |            | 18,346    |           
|                                                     | Purchase of:                                                                      |                                                                                                  |                                           |            |                        |            |          |            |          
|                                                     |                                                                                   | Mortgage-backed securities available for sale                                                    |                                           |            | (1,207,803             | )          |          |            | (149,429  | )         
|                                                     |                                                                                   | Investment securities available for sale                                                         |                                           |            | (4,398                 | )          |          |            | (10,696   | )         
|                                                     |                                                                                   | Loans                                                                                            |                                           |            | (54,032                | )          |          |            | (16,890   | )         
|                                                     |                                                                                   | Loan servicing assets, including those originated                                                |                                           |            | (49,059                | )          |          |            | (30,495   | )         
|                                                     |                                                                                   | Federal Home Loan Bank stock                                                                     |                                           |            |                       |            |          |            | (80,838   | )         
|                                                     | Net cash paid in connection with business combination                             |                                                                                                  |                                           | (50,245    | )                      |            |          |           |          
|                                                     | Other                                                                             |                                                                                                  |                                           | 96,193     |                        |            |          | (58,858    | )        
|                                                     |                                                                                   |                                                                                                  |                                           |            |                        |            |          |           
|                                                     |                                                                                   |                                                                                                  | Net cash used in investing activities     |            |                        | (2,250,398 | )        |            |           | (1,193,881 | )
|                                                     |                                                                                   |                                                                                                  |                                           |            |                        |            |          |           
|Cash flows from financing activities:                |                                                                                   |                                                                                                  |                                           |            |                        |            |          |           
|                                                     | Net decrease in short-term borrowings                                             |                                                                                                  |                                           | (1,044,555 | )                      |            |          | (209,739   | )        
|                                                     | Proceeds from long-term borrowings                                                |                                                                                                  |                                           | 935,410    |                        |            |          | 2,497,567  |          
|                                                     | Repayments of long-term borrowings                                                |                                                                                                  |                                           | (669,750   | )                      |            |          | (1,011,046 | )        
|                                                     | Increase (decrease) in deposits                                                   |                                                                                                  |                                           | 2,533,129  |                        |            |          | (352,099   | )        
|                                                     | Decrease in advance payments by borrowers for taxes and insurance                 |                                                                                                  |                                           | (13,073    | )                      |            |          | (25,304    | )        
|                                                     | Payment of dividends on common stock                                              |                                                                                                  |                                           | (122,098   | )                      |            |          | (107,242   | )        
|                                                     | Proceeds from issuance of common stock                                            |                                                                                                  |                                           | 41,381     |                        |            |          | 18,083     |          
|                                                     | Purchase of treasury stock                                                        |                                                                                                  |                                           | (107,155   | )                      |            |          | (289,001   | )        
|                                                     |                                                                                   |                                                                                                  |                                           |            |                        |            |          |           
|                                                     |                                                                                   | Net cash provided by financing activities                                                        |                                           |            | 1,553,289              |            |          |            | 521,219   |           
|                                                     |                                                                                   |                                                                                                  |                                           |            |                        |            |          |           
|Net increase (decrease) in cash and cash equivalents |                                                                                   |                                                                                                  | 35,202                                    |            |                        |            | (174,679 | )         
|Cash and cash equivalents, beginning of the period   |                                                                                   |                                                                                                  | 531,257                                   |            |                        |            | 693,532  |           
|                                                     |                                                                                   |                                                                                                  |                                           |            |                        |            |          |           
|Cash and cash equivalents, end of period             |                                                                                   | $                                                                                                | 566,459                                   |            |                        | $          | 518,853  |           
|                                                     |                                                                                   |                                                                                                  |                                           |            |                        |            |          |           
|Supplemental disclosure of cash flow information:    |                                                                                   |                                                                                                  |                                           |            |                        |            |          |           
|                                                     | Cash paid for interest on deposits and borrowings                                 |                                                                                                  | $                                         | 1,198,432  |                        |            | $        | 984,047    |          
|                                                     | Cash paid for income taxes                                                        |                                                                                                  |                                           | 3,500      |                        |            |          | 28,296     |          
|Supplemental schedule of noncash activities:         |                                                                                   |                                                                                                  |                                           |            |                        |            |          |           
|                                                     | Loans exchanged for mortgage-backed securities                                    |                                                                                                  |                                           | 5,449,048  |                        |            |          | 2,781,889  |          

See Notes to Consolidated Financial Statements

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CHARTER ONE FINANCIAL, INC. AND SUBSIDIARIES 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. |  | These interim consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Charter One Financial, Inc. (the Company or Charter
One) Annual Report on Form 10-K for the year ended December 31, 2000.
The interim financial statements reflect all adjustments which are, in the
opinion of management, necessary for a fair presentation of the results
for the periods presented. Such adjustments are of a normal recurring
nature. The results of operations for the interim periods disclosed
herein are not necessarily indicative of the results that may be expected
for a full year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|2. |  | As of the close of business on July 2, 2001, Charter One completed its
acquisition of Alliance Bancorp (Alliance), the holding company of
Liberty Federal Bank in Hinsdale, Illinois. At June 30, 2001, Alliance
had assets of $2.0 billion and deposits of $1.3 billion. Charter One
issued 6.9 million shares in conjunction with the merger, and paid $50.2
million in cash consideration. The Company recorded $140.0 million of
goodwill based on a preliminary determination of the estimated fair values
of the assets and liabilities acquired as a result of this transaction.
The merger will be treated as a tax-free reorganization under Section 368
of the Internal Revenue Code. The Company accounted for this acquisition
as a purchase under the new business combinations standards discussed in
Note 6 below, and included the results of operations of Alliance in its
Consolidated Financial Statements from the effective date of the
acquisition. Pro forma results of operations for this acquisition, had
the acquisition occurred as of January 1, 2001, is not significant and
accordingly, is not provided.                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|3. |  | Charter One has one operating segment, consumer banking, which offers a
wide array of products and services to its customers. Pursuant to its
consumer banking strategy, emphasis is placed on building relationships
with its customers, as opposed to building specific lines of business. As
a result, Charter One prefers to work as an integrated unit to customize
solutions for its customers, with business line emphasis and product
offerings changing over time as needs and demands change.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|4. |  | Effective January 1, 2001, the Company adopted Statement of Financial
Accounting Standard (SFAS) No. 133, Accounting for Derivative
Instruments and Hedging Activities, as amended, which requires that all
derivative instruments be reported on the statement of financial condition
at fair value and establishes criteria for designation and effectiveness
of hedging relationships. The cumulative effect of adopting SFAS No. 133
was not material to the Companys consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|5. |  | In September 2000, the Financial Accounting Standards Board (FASB)
issued SFAS No. 140, Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities, a replacement of FASB Statement
No. 125. SFAS No. 140 provides accounting and reporting standards for
transfers and servicing of financial assets and extinguishments of
liabilities. Those standards are based on consistent application of a
financial-components approach that focuses on control. Under that
approach, after a transfer of financial assets, an entity recognizes the
financial and servicing assets it controls and the liabilities it has
incurred, derecognizes financial assets when control has been surrendered,
and derecognizes liabilities when extinguished. SFAS No. 140 provides
consistent standards for distinguishing transfers of financial assets that
are sales from transfers that are secured borrowings. In addition to
replacing SFAS No. 125, Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities, SFAS No. 140
rescinds SFAS No. 127 Deferral of the Effective Date of Certain
Provisions of FASB Statement No. 125. SFAS No. 140 is effective for
transfers and servicing of financial assets and extinguishments of
liabilities occurring after March 31, 2001. SFAS No. 140 is to be applied
prospectively with certain exceptions. The adoption of SFAS No. 140 did
not have a material impact on the Companys financial condition or results
of operations.
|  
|6. |  | In July 2001, the FASB issued SFAS No. 141, Business Combinations, and
SFAS No. 142, Goodwill and Other Intangible Assets. These statements
change the accounting for business combinations and goodwill. SFAS No.
141 requires that the purchase method of accounting be used for all
business combinations initiated after June 30, 2001. Use of the
pooling-of-interests method is prohibited. SFAS No. 142 changes the
accounting for goodwill and certain intangible assets from an amortization
method to an impairment-only approach. Any goodwill arising from the
result of business combinations initiated after June 30, 2001 is not
amortized. On an annual basis, and when there is reason to suspect that
their values have been diminished or impaired, goodwill and certain
intangible assets must be tested for impairment and write-downs may be
necessary. Additionally, amortization of goodwill recorded for past
business combinations will cease upon adoption of SFAS No. 142 on January
1, 2002. Management has not completed the process of evaluating SFAS No.
142 and therefore has not determined the impact that adopting this
statement will have on the Companys financial position or results of
operations.                                                                                                                                                                                                                                                                                                    

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|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|7. |  | In August 2001, the FASB issued SFAS No. 143, Accounting for Asset
Retirement Obligations. This statement addresses financial accounting and
reporting for obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement costs. SFAS No. 143
applies to all entities. It applies to legal obligations associated with
the retirement of long-lived assets that result from the acquisition,
construction, development and/or the normal operation of a long-lived
asset, except for certain obligations of lessees. As used in this
statement, a legal obligation is an obligation that a party is required to
settle as a result of an existing or enacted law, statute, ordinance, or
written or oral contract or by legal construction of a contract under the
doctrine of promissory estoppel. SFAS No. 143 is effective for fiscal
years beginning after June 15, 2002, with earlier application encouraged.
Management has not completed the process of evaluating SFAS No. 143 and
therefore has not determined the impact that adopting this statement will
have on the Companys financial position or results of operations.                                                                                                                                                                                                                                                                                              
|  
|8. |  | In October 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. This statement addresses
financial accounting and reporting for the impairment or disposal of
long-lived assets. This statement supersedes SFAS No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of, and the accounting and reporting provisions of Accounting
Principles Board Opinion No. 30, Reporting the Results of
Operations  Reporting the Effects of Disposal of a Segment of a Business,
and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions, for the disposal of a segment of a business (as previously
defined in that opinion). This statement also amends Accounting Research
Bulletin No. 51, Consolidated Financial Statements, to eliminate the
exception to consolidation for a subsidiary for which control is likely to
be temporary. The provisions of this statement are effective for
financial statements issued for fiscal years beginning after December 15,
2001, and interim periods within those fiscal years, with early
application encouraged. The provisions of this statement generally are to
be applied prospectively. Management has not completed the process of
evaluating SFAS No. 144 and therefore has not determined the impact that
adopting this statement will have on the Companys financial position or
results of operations.
|  
|9. |  | Certain items in the consolidated financial statements for 2000 have been
reclassified to conform to the 2001 presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

HOLDING COMPANY BUSINESS

The following financial review presents an analysis of the asset and liability
structure of Charter One Financial, Inc. and a discussion of the results of
operations for each of the periods presented.

General

Headquartered in Cleveland, Ohio, Charter One Financial, Inc., hereafter
referred to as Charter One or the Company, is a financial holding company.
Charter One is a Delaware corporation and owns all of the outstanding capital
stock of Charter Michigan Bancorp, Inc. and Charter One Commercial. Charter
Michigan Bancorp, Inc. owns all of the outstanding capital stock of Charter One
Bank, F.S.B., a federally chartered thrift. The primary business of Charter
One is operating these financial institutions which we sometimes refer to in
this document collectively as the Bank. The Banks primary business is
providing consumer banking services to certain major markets in Ohio, Michigan,
Illinois, New York, Vermont and in some markets of Massachusetts. As of
September 30, 2001, the Bank and its subsidiaries were doing business through
436 full-service branches and 29 loan production offices.

Forward-Looking Statements

This document, including information incorporated by reference, contains, and
future filings by Charter One on Form 10-K, Form 10-Q and Form 8-K and future
oral and written statements by Charter One and its management may contain,
forward-looking statements about Charter One and its subsidiaries which we
believe are within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements include, without limitation,
statements with respect to anticipated future operating and financial
performance, including revenue creation, lending origination, operating
efficiencies, loan sales, charge-offs and loan loss provisions, growth
opportunities, interest rates, acquisition and divestiture opportunities, and
synergies, efficiencies, cost savings and funding advantages expected to be
realized from prior acquisitions. Words such as may, could, should,
would, believe, anticipate, estimate, expect, intend, plan and
similar expressions are intended to identify these forward-looking statements.

The important factors we discuss below, as well as other factors discussed
elsewhere in this document and factors identified in our filings with the
Securities and Exchange Commission and those presented elsewhere by our
management from time to time, could cause actual results to differ materially
from those indicated by the forward-looking statements made in this document.

The following factors, many of which are subject to change based on various
other factors beyond our control, could cause our operating and financial
performance to differ materially from the plans, objectives, expectations,
estimates and intentions expressed in such forward-looking statements:



| |  | the economic impact of the terrorist attacks on September 11, 2001, and the response of the United States to those attacks;                                                                                                                                                                                                    
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | the strength of the United States economy in general and the strength of the local economies in which we conduct our
operations; general economic conditions, either nationally or regionally, may be less favorable than expected, resulting
in, among other things, a deterioration in the credit quality of our loan assets;
| 
| |  | the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the
Federal Reserve Board;                                                                                                                                                                                   
| 
| |  | inflation, interest rate, market and monetary fluctuations;                                                                                                                                                                                                                                                                    
| 
| |  | the timely development of and acceptance of new products and services of Charter One and its subsidiaries and the perceived
overall value of these products and services by users, including the features, pricing and quality compared to competitors
products and services;                                                 
| 
| |  | the willingness of users to substitute competitors products and services for our products and services;                                                                                                                                                                                                                       
| 
| |  | our success in gaining regulatory approval of our products and services, when required;                                                                                                                                                                                                                                        

6



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##### Table of Contents





| |  | the impact of changes in financial services laws and regulations (including laws concerning taxes, banking, securities and
insurance); legislative or regulatory changes may adversely affect the business in which we are engaged;
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | the impact of technological changes;                                                                                                                                                                                               
| 
| |  | acquisitions;                                                                                                                                                                                                                      
| 
| |  | changes in consumer spending and saving habits; and                                                                                                                                                                                
| 
| |  | our success at managing the risks involved in the foregoing.                                                                                                                                                                       

Forward-looking statements by Charter One and its management are based on
beliefs, plans, objectives, goals, expectations, anticipations, estimates and
intentions of management as of the date made and are not guarantees of future
performance. Charter One disclaims any obligation to update or revise any
forward-looking statements based on the occurrence of future events, the
receipt of new information, or otherwise.

RESULTS OF OPERATIONS

Acquisitions

As of the close of business on July 2, 2001, Charter One completed its
acquisition of Alliance Bancorp, the holding company of Liberty Federal Bank in
Hinsdale, Illinois. At June 30, 2001, Alliance had assets of $2.0 billion and
deposits of $1.3 billion. Charter One issued 6.9 million shares in conjunction
with the merger, and paid $50.2 million in cash consideration. The Company
recorded $140.0 million of goodwill based on a preliminary determination of the
estimated fair values of the assets and liabilities acquired as a result of
this transaction. The merger will be treated as a tax-free reorganization
under Section 368 of the Internal Revenue Code and accounted for as a purchase.

Performance Overview

Charter One reported net income of $130.4 million, or $.57 per diluted share,
for the three months ended September 30, 2001, compared to net income of $109.6
million, or $.49 per diluted share, for the three months ended September 30,
2000. The prior year period included merger-related charges. Excluding the
after-tax impact of merger-related charges, our net income resulted in a return
on average equity of 17.81% and a return on average assets of 1.43% for the
three months ended September 30, 2001. The comparable returns for the third
quarter of 2000 were 18.96% and 1.37%, respectively.

For the nine months ended September 30, 2001, Charter One reported net income
of $365.6 million, or $1.62 per diluted share, compared to net income of $324.6
million, or $1.41 per diluted share, for the nine months ended September 30,
2000. The prior year period included merger-related charges. Excluding the
after-tax impact of merger-related charges, our net income resulted in a return
on average equity of 18.05% and a return on average assets of 1.39% for the
nine months ended September 30, 2001. The comparable returns for the 2000
period were 18.88% and 1.46%, respectively.

Figure 1 sets forth financial results and annualized performance ratios for the
three and nine months ended September 30, 2001 and 2000. The table reflects
these financial results and ratios on both an actual and operating return
basis. Operating earnings and returns are computed using net income excluding
the after-tax impact of merger-related charges. Per share data has been
restated to reflect the 5% stock dividend issued September 28, 2001.

7



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Selected Financial Results and Ratios(Figure 1)

|           |                                                |  |                                               |         |                   |  |         |         |         |  |   |         |   |  |   |         |  
|---------- | ---------------------------------------------- |  | --------------------------------------------- | ------- | ----------------- |  | ------- | ------- | ------- |  | - | ------- | - |  | - | ------- | -
|           |                                                |  | Three Months Ended                            |         | Nine Months Ended
|           |                                                |  |                                               |         |                  
|           |                                                |  | 9/30/01                                       |         | 9/30/00           |  | 9/30/01 |         | 9/30/00
|           |                                                |  |                                               |         |                   |  |         |         |        
|           |                                                |  | (Dollars in thousands, except per share data)
|Actual:    |                                                |  |                                               |         |                   |  |         |         |         |  |   |         |   |  |   |        
|           | Net income                                     |  | $                                             | 130,433 |                   |  | $       | 109,592 |         |  | $ | 365,635 |   |  | $ | 324,588 |  
|           | Diluted earnings per share                     |  |                                               | .57     |                   |  |         | .49     |         |  |   | 1.62    |   |  |   | 1.41    |  
|           | Return on average assets                       |  |                                               | 1.43    | %                 |  |         | 1.35    | %       |  |   | 1.39    | % |  |   | 1.38    | %
|           | Return on average equity                       |  |                                               | 17.81   |                   |  |         | 18.73   |         |  |   | 18.05   |   |  |   | 17.91   |  
|           | Average equity to average assets               |  |                                               | 8.03    |                   |  |         | 7.21    |         |  |   | 7.69    |   |  |   | 7.71    |  
|           | Net interest income to administrative expenses |  |                                               | 1.63    | x                 |  |         | 1.50    | x       |  |   | 1.57    | x |  |   | 1.50    | x
|           | Administrative expenses to average assets      |  |                                               | 1.70    | %                 |  |         | 1.83    | %       |  |   | 1.72    | % |  |   | 1.95    | %
|           | Efficiency ratio                               |  |                                               | 40.49   |                   |  |         | 45.54   |         |  |   | 42.00   |   |  |   | 46.66   |  
|           |                                                |  |                                               |         |                   |  |         |         |         |  |   |         |   |  |   |        
|Operating: |                                                |  |                                               |         |                   |  |         |         |         |  |   |         |   |  |   |        
|           | Operating earnings                             |  | $                                             | 130,433 |                   |  | $       | 110,925 |         |  | $ | 365,635 |   |  | $ | 342,214 |  
|           | Operating earnings per share                   |  |                                               | .57     |                   |  |         | .50     |         |  |   | 1.62    |   |  |   | 1.49    |  
|           | Return on average assets                       |  |                                               | 1.43    | %                 |  |         | 1.37    | %       |  |   | 1.39    | % |  |   | 1.46    | %
|           | Return on average equity                       |  |                                               | 17.81   |                   |  |         | 18.96   |         |  |   | 18.05   |   |  |   | 18.88   |  
|           | Net interest income to administrative expenses |  |                                               | 1.63    | x                 |  |         | 1.52    | x       |  |   | 1.57    | x |  |   | 1.59    | x
|           | Administrative expenses to average assets      |  |                                               | 1.70    | %                 |  |         | 1.81    | %       |  |   | 1.72    | % |  |   | 1.84    | %
|           | Efficiency ratio                               |  |                                               | 40.49   |                   |  |         | 44.93   |         |  |   | 42.00   |   |  |   | 43.94   |  

Net Interest Income

Net interest income is the difference between the interest and dividend income
earned on our loans and investments and the interest expense on our deposits
and borrowings. Net interest income is our principal source of earnings. Net
interest income is affected by a number of factors including the level, pricing
and maturity of interest-earning assets and interest-bearing liabilities,
interest rate fluctuations and asset quality, as well as general economic
conditions and regulatory policies.

The following table shows average balances, interest earned or paid, and
average interest rates for the periods indicated. Average balances are
calculated on a daily basis. Nonaccrual loans are included in the average
balance of loans. The mark-to-market adjustments on securities available for
sale are included in noninterest-earning assets. The cost of liabilities
includes the annualized effect of interest rate risk management instruments.

8



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##### Table of Contents



Average Balances, Interest Rates and Yields/Costs(Figure 2)

|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |      |      |      | 
|----------------------------------------------------------------------- | ----------------------------- | --------------------------------- | ------------------------------------------ | ---------- | ---------------------- | ---------- | -------- | ------- | ------- | ------- | ------- | ---- | -------- | ---- | --------- | ---------- | --------- | ---------- | ------- | ------- | ------- | ------- | ------ | ---- | ---- | ---- | 
|                                                                        |                               |                                   |                                            |            | Three Months Ended    
|                                                                        |                               |                                   |                                            |            |                       
|                                                                        |                               |                                   |                                            |            | 9/30/01                |            | 9/30/00 
|                                                                        |                               |                                   |                                            |            |                        |            |         
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      | Avg.     |      |           |            |           |            |         |         |         |         | Avg.  
|                                                                        |                               |                                   |                                            |            | Average                |            |          |         |         |         | Yield/  |      | Average  |      |           |            |           |            | Yield/ 
|                                                                        |                               |                                   |                                            |            | Balance                |            | Interest |         | Cost    |         | Balance |      | Interest |      | Cost     
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |          
|                                                                        |                               |                                   |                                            |            | (Dollars in thousands)
|Interest-earning assets:                                                |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|                                                                        | Loans and leases              |                                   | $                                          | 26,538,590 |                        |            | $        | 484,697 |         |         |         | 7.29 | %        |      | $         | 24,185,872 |           |            | $       | 462,766 |         |         |        | 7.64 | %   
|                                                                        | Mortgage-backed securities:   |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |      |     
|                                                                        |                               | Available for sale                |                                            |            | 5,545,025              |            |          |         | 89,819  |         |         |      | 6.48     |      |           |            | 3,631,734 |            |         |         | 66,222  |         |        |      | 7.29 |     
|                                                                        |                               | Held to maturity                  |                                            |            | 1,176,526              |            |          |         | 20,141  |         |         |      | 6.85     |      |           |            | 1,634,755 |            |         |         | 29,442  |         |        |      | 7.20 |     
|                                                                        | Investment securities:        |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |      |     
|                                                                        |                               | Available for sale                |                                            |            | 162,391                |            |          |         | 3,387   |         |         |      | 8.34     |      |           |            | 441,466   |            |         |         | 8,142   |         |        |      | 7.38 |     
|                                                                        |                               | Held to maturity                  |                                            |            | 6,926                  |            |          |         | 88      |         |         |      | 5.11     |      |           |            | 28,090    |            |         |         | 417     |         |        |      | 5.94 |     
|                                                                        | Other interest-earning assets |                                   |                                            | 642,584    |                        |            |          | 10,850  |         |         |         | 6.61 |          |      |           | 554,356    |           |            |         | 10,529  |         |         |        | 7.43 |     
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|                                                                        |                               |                                   | Total interest-earning assets              |            |                        | 34,072,042 |          |         |         | 608,982 |         |      |          | 7.13 |           |            |           | 30,476,273 |         |         |         | 577,518 |        |      |      | 7.57 | 
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|Allowance for loan and lease losses                                     |                               |                                   | (231,028                                   | )          |                        |            |          |         |         |         |         |      |          |      | (186,036  | )          |           |            |         |         |         |         |        |     
|Noninterest-earning assets                                              |                               |                                   | 2,656,029                                  |            |                        |            |          |         |         |         |         |      |          |      | 2,184,945 |            |           |            |         |         |         |         |        |     
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|                                                                        |                               |                                   | Total assets                               |            | $                      | 36,497,043 |          |         |         |         |         |      |          |      |           |            | $         | 32,475,182 |         |         |         |         |        |      |      |      | 
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|Interest-bearing liabilities:                                           |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|                                                                        | Deposits:                     |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |      |     
|                                                                        |                               | Checking accounts                 |                                            | $          | 5,803,371              |            |          |         | 36,073  |         |         |      | 2.47     | %    |           | $          | 3,708,654 |            |         |         | 15,516  |         |        |      | 1.66 | %   
|                                                                        |                               | Money market and savings
accounts |                                            |            | 6,741,797              |            |          |         | 53,194  |         |         |      | 3.13     |      |           |            | 5,480,546 |            |         |         | 45,431  |         |        |      | 3.30 |     
|                                                                        |                               | Certificates of deposit           |                                            |            | 10,406,778             |            |          |         | 135,544 |         |         |      | 5.17     |      |           |            | 9,321,115 |            |         |         | 131,452 |         |        |      | 5.61 |     
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|                                                                        |                               |                                   | Total deposits                             |            |                        | 22,951,946 |          |         |         | 224,811 |         |      |          | 3.89 |           |            |           | 18,510,315 |         |         |         | 192,399 |        |      |      | 4.14 | 
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|                                                                        | FHLB advances                 |                                   |                                            | 9,280,037  |                        |            |          | 122,214 |         |         |         | 5.22 |          |      |           | 10,336,097 |           |            |         | 151,549 |         |         |        | 5.83 |     
|                                                                        | Other borrowings              |                                   |                                            | 548,888    |                        |            |          | 8,633   |         |         |         | 6.23 |          |      |           | 550,075    |           |            |         | 10,401  |         |         |        | 7.53 |     
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|                                                                        |                               |                                   | Total borrowings                           |            |                        | 9,828,925  |          |         |         | 130,847 |         |      |          | 5.28 |           |            |           | 10,886,172 |         |         |         | 161,950 |        |      |      | 5.91 | 
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|                                                                        |                               |                                   | Total interest-bearing liabilities         |            |                        | 32,780,871 |          |         |         | 355,658 |         |      |          | 4.30 |           |            |           | 29,396,487 |         |         |         | 354,349 |        |      |      | 4.79 | 
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|Noninterest-bearing liabilities                                         |                               |                                   | 787,228                                    |            |                        |            |          |         |         |         |         |      |          |      | 738,021   |            |           |            |         |         |         |         |        |     
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|                                                                        |                               |                                   | Total liabilities                          |            |                        | 33,568,099 |          |         |         |         |         |      |          |      |           |            |           | 30,134,508 |         |         |         |         |        |      |      |      | 
|Shareholders equity                                                    |                               |                                   | 2,928,944                                  |            |                        |            |          |         |         |         |         |      |          |      | 2,340,674 |            |           |            |         |         |         |         |        |     
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|                                                                        |                               |                                   | Total liabilities and
shareholders equity |            | $                      | 36,497,043 |          |         |         |         |         |      |          |      |           |            | $         | 32,475,182 |         |         |         |         |        |      |      |      | 
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|Net interest income                                                     |                               |                                   |                                            |            |                        | $          | 253,324  |         |         |         |         |      |          |      |           |            |           | $          | 223,169 |         |         |         |        |     
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|Interest rate spread                                                    |                               |                                   |                                            |            |                        |            |          |         |         |         | 2.83    |      |          |      |           |            |           |            |         |         |         |         | 2.78   |     
|Net yield on average interest-earning assets                            |                               |                                   |                                            |            |                        |            |          |         |         |         | 2.97    |      |          |      |           |            |           |            |         |         |         |         | 2.93   |     
|Average interest-earning assets to
average interest-bearing liabilities |                               |                                   |                                            |            |                        |            |          |         |         |         | 103.94  | %    |          |      |           |            |           |            |         |         |         |         | 103.67 | %   

9



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##### Table of Contents



|                                                                        |                               |                                   |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |           |            |         |           |         |           |        |      |       |      | 
|----------------------------------------------------------------------- | ----------------------------- | --------------------------------- | ------------------------------------------ | ---------- | ---------------------- | ---------- | -------- | --------- | ------- | --------- | ------- | ---- | -------- | ---- | --------- | ---------- | --------- | ---------- | ------- | --------- | ------- | --------- | ------ | ---- | ----- | ---- | 
|                                                                        |                               |                                   |                                            |            | Nine Months Ended     
|                                                                        |                               |                                   |                                            |            |                       
|                                                                        |                               |                                   |                                            |            | 9/30/01                |            | 9/30/00 
|                                                                        |                               |                                   |                                            |            |                        |            |         
|                                                                        |                               |                                   |                                            |            |                        |            |          |           |         |           |         |      | Avg.     |      |           |            |           |            |         |           |         |           | Avg.  
|                                                                        |                               |                                   |                                            |            | Average                |            |          |           |         |           | Yield/  |      | Average  |      |           |            |           |            | Yield/ 
|                                                                        |                               |                                   |                                            |            | Balance                |            | Interest |           | Cost    |           | Balance |      | Interest |      | Cost     
|                                                                        |                               |                                   |                                            |            |                        |            |          |           |         |           |         |      |          |      |          
|                                                                        |                               |                                   |                                            |            | (Dollars in thousands)
|Interest-earning assets:                                                |                               |                                   |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |           |            |         |           |         |           |        |     
|                                                                        | Loans and leases              |                                   | $                                          | 25,398,713 |                        |            | $        | 1,410,215 |         |           |         | 7.41 | %        |      | $         | 23,605,514 |           |            | $       | 1,337,985 |         |           |        | 7.56 | %    
|                                                                        | Mortgage-backed securities:   |                                   |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |           |            |         |           |         |           |        |      |      
|                                                                        |                               | Available for sale                |                                            |            | 5,066,129              |            |          |           | 257,156 |           |         |      | 6.77     |      |           |            | 3,180,808 |            |         |           | 171,761 |           |        |      | 7.20  |     
|                                                                        |                               | Held to maturity                  |                                            |            | 1,313,218              |            |          |           | 69,711  |           |         |      | 7.08     |      |           |            | 1,741,174 |            |         |           | 92,704  |           |        |      | 7.10  |     
|                                                                        | Investment securities:        |                                   |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |           |            |         |           |         |           |        |      |      
|                                                                        |                               | Trading                           |                                            |            |                       |            |          |           |        |           |         |      |         |      |           |            | 244       |            |         |           | 38      |           |        |      | 20.63 |     
|                                                                        |                               | Available for sale                |                                            |            | 141,016                |            |          |           | 8,439   |           |         |      | 7.98     |      |           |            | 461,581   |            |         |           | 25,355  |           |        |      | 7.32  |     
|                                                                        |                               | Held to maturity                  |                                            |            | 8,204                  |            |          |           | 324     |           |         |      | 5.27     |      |           |            | 30,961    |            |         |           | 1,261   |           |        |      | 5.43  |     
|                                                                        | Other interest-earning assets |                                   |                                            | 633,147    |                        |            |          | 32,355    |         |           |         | 6.74 |          |      |           | 520,611    |           |            |         | 28,082    |         |           |        | 7.09 |      
|                                                                        |                               |                                   |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |           |            |         |           |         |           |        |     
|                                                                        |                               |                                   | Total interest-earning assets              |            |                        | 32,560,427 |          |           |         | 1,778,200 |         |      |          | 7.28 |           |            |           | 29,540,893 |         |           |         | 1,657,186 |        |      |       | 7.48 | 
|                                                                        |                               |                                   |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |           |            |         |           |         |           |        |     
|Allowance for loan and lease losses                                     |                               |                                   | (204,031                                   | )          |                        |            |          |           |         |           |         |      |          |      | (184,903  | )          |           |            |         |           |         |           |        |     
|Noninterest-earning assets                                              |                               |                                   | 2,743,053                                  |            |                        |            |          |           |         |           |         |      |          |      | 1,987,550 |            |           |            |         |           |         |           |        |     
|                                                                        |                               |                                   |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |           |            |         |           |         |           |        |     
|                                                                        |                               |                                   | Total assets                               |            | $                      | 35,099,449 |          |           |         |           |         |      |          |      |           |            | $         | 31,343,540 |         |           |         |           |        |      |       |      | 
|                                                                        |                               |                                   |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |           |            |         |           |         |           |        |     
|Interest-bearing liabilities:                                           |                               |                                   |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |           |            |         |           |         |           |        |     
|                                                                        | Deposits:                     |                                   |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |           |            |         |           |         |           |        |      |      
|                                                                        |                               | Checking accounts                 |                                            | $          | 4,828,778              |            |          |           | 79,375  |           |         |      | 2.20     | %    |           | $          | 3,600,759 |            |         |           | 40,479  |           |        |      | 1.50  | %   
|                                                                        |                               | Money market and savings
accounts |                                            |            | 6,382,528              |            |          |           | 163,390 |           |         |      | 3.42     |      |           |            | 5,415,133 |            |         |           | 123,228 |           |        |      | 3.04  |     
|                                                                        |                               | Certificates of deposit           |                                            |            | 10,287,201             |            |          |           | 412,830 |           |         |      | 5.37     |      |           |            | 9,733,695 |            |         |           | 390,615 |           |        |      | 5.36  |     
|                                                                        |                               |                                   |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |           |            |         |           |         |           |        |     
|                                                                        |                               |                                   | Total deposits                             |            |                        | 21,498,507 |          |           |         | 655,595   |         |      |          | 4.08 |           |            |           | 18,749,587 |         |           |         | 554,322   |        |      |       | 3.95 | 
|                                                                        |                               |                                   |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |           |            |         |           |         |           |        |     
|                                                                        | FHLB advances                 |                                   |                                            | 9,554,422  |                        |            |          | 386,147   |         |           |         | 5.40 |          |      |           | 9,285,482  |           |            |         | 390,673   |         |           |        | 5.61 |      
|                                                                        | Other borrowings              |                                   |                                            | 502,617    |                        |            |          | 25,982    |         |           |         | 6.86 |          |      |           | 414,585    |           |            |         | 23,986    |         |           |        | 7.68 |      
|                                                                        |                               |                                   |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |           |            |         |           |         |           |        |     
|                                                                        |                               |                                   | Total borrowings                           |            |                        | 10,057,039 |          |           |         | 412,129   |         |      |          | 5.47 |           |            |           | 9,700,067  |         |           |         | 414,659   |        |      |       | 5.70 | 
|                                                                        |                               |                                   |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |           |            |         |           |         |           |        |     
|                                                                        |                               |                                   | Total interest-bearing liabilities         |            |                        | 31,555,546 |          |           |         | 1,067,724 |         |      |          | 4.52 |           |            |           | 28,449,654 |         |           |         | 968,981   |        |      |       | 4.55 | 
|                                                                        |                               |                                   |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |           |            |         |           |         |           |        |     
|Noninterest-bearing liabilities                                         |                               |                                   | 843,286                                    |            |                        |            |          |           |         |           |         |      |          |      | 476,946   |            |           |            |         |           |         |           |        |     
|                                                                        |                               |                                   |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |           |            |         |           |         |           |        |     
|                                                                        |                               |                                   | Total liabilities                          |            |                        | 32,398,832 |          |           |         |           |         |      |          |      |           |            |           | 28,926,600 |         |           |         |           |        |      |       |      | 
|Shareholders equity                                                    |                               |                                   | 2,700,617                                  |            |                        |            |          |           |         |           |         |      |          |      | 2,416,940 |            |           |            |         |           |         |           |        |     
|                                                                        |                               |                                   |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |           |            |         |           |         |           |        |     
|                                                                        |                               |                                   | Total liabilities and
shareholders equity |            | $                      | 35,099,449 |          |           |         |           |         |      |          |      |           |            | $         | 31,343,540 |         |           |         |           |        |      |       |      | 
|                                                                        |                               |                                   |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |           |            |         |           |         |           |        |     
|Net interest income                                                     |                               |                                   |                                            |            |                        | $          | 710,476  |           |         |           |         |      |          |      |           |            |           | $          | 688,205 |           |         |           |        |     
|                                                                        |                               |                                   |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |           |            |         |           |         |           |        |     
|Interest rate spread                                                    |                               |                                   |                                            |            |                        |            |          |           |         |           | 2.76    |      |          |      |           |            |           |            |         |           |         |           | 2.93   |     
|Net yield on average interest-earning assets                            |                               |                                   |                                            |            |                        |            |          |           |         |           | 2.91    |      |          |      |           |            |           |            |         |           |         |           | 3.11   |     
|Average interest-earning assets to
average interest-bearing liabilities |                               |                                   |                                            |            |                        |            |          |           |         |           | 103.18  | %    |          |      |           |            |           |            |         |           |         |           | 103.84 | %   

10



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##### Table of Contents



Figure 3 sets forth the approximate relative contribution of changes in average
interest rates and volume to changes in net interest income for the periods
indicated. Changes not solely attributable to volume or rate have been
allocated in proportion to the changes due to volume and rate.

Rate/Volume Analysis(Figure 3)

|                              |                                   |                    |        |         |        |                                  |         |                                 |        |        |        |                            |        |        |         |         |         |         |        |         |         |         |        |        |         |         |        | 
|----------------------------- | --------------------------------- | ------------------ | ------ | ------- | ------ | -------------------------------- | ------- | ------------------------------- | ------ | ------ | ------ | -------------------------- | ------ | ------ | ------- | ------- | ------- | ------- | ------ | ------- | ------- | ------- | ------ | ------ | ------- | ------- | ------ | 
|                              |                                   |                    |        |         |        | Three Months Ended September 30, |         | Nine Months Ended September 30,
|                              |                                   |                    |        |         |        |                                  |         |                                
|                              |                                   |                    |        |         |        | 2001 v. 2000                     |         | 2001 v. 2000                   
|                              |                                   |                    |        |         |        |                                  |         |                                
|                              |                                   |                    |        |         |        | Increase (decrease) due to       |         |                                 |        |        |        | Increase (decrease) due to |        |        |         |        
|                              |                                   |                    |        |         |        |                                  |         |                                 |        |        |        |                            |        |        |         |        
|                              |                                   |                    |        |         |        | Rate                             |         | Volume                          |        | Total  |        | Rate                       |        | Volume |         | Total  
|                              |                                   |                    |        |         |        |                                  |         |                                 |        |        |        |                            |        |        |         |        
|                              |                                   |                    |        |         |        | (Dollars in thousands)          
|Interest income:              |                                   |                    |        |         |        |                                  |         |                                 |        |        |        |                            |        |        |         |         |         |         |        |         |         |         |        |       
|                              | Loans and leases                  |                    | $      | (22,433 | )      |                                  | $       | 44,364                          |        |        | $      | 21,931                     |        |        | $       | (31,906 | )       |         | $      | 104,136 |         |         | $      | 72,230 |        
|                              | Mortgage-backed securities:       |                    |        |         |        |                                  |         |                                 |        |        |        |                            |        |        |         |         |         |         |        |         |         |         |        |        |        
|                              |                                   | Available for sale |        |         | (8,076 | )                                |         |                                 | 31,673 |        |        |                            | 23,597 |        |         |         | (10,865 | )       |        |         | 96,260  |         |        |        | 85,395  |        
|                              |                                   | Held to maturity   |        |         | (1,396 | )                                |         |                                 | (7,905 | )      |        |                            | (9,301 | )      |         |         | (274    | )       |        |         | (22,719 | )       |        |        | (22,993 | )      
|                              | Investment securities:            |                    |        |         |        |                                  |         |                                 |        |        |        |                            |        |        |         |         |         |         |        |         |         |         |        |        |        
|                              |                                   | Trading            |        |         |       |                                  |         |                                 |       |        |        |                            |       |        |         |         | (38     | )       |        |         |        |         |        |        | (38     | )      
|                              |                                   | Available for sale |        |         | 950    |                                  |         |                                 | (5,705 | )      |        |                            | (4,755 | )      |         |         | 2,088   |         |        |         | (19,004 | )       |        |        | (16,916 | )      
|                              |                                   | Held to maturity   |        |         | (53    | )                                |         |                                 | (276   | )      |        |                            | (329   | )      |         |         | (37     | )       |        |         | (900    | )       |        |        | (937    | )      
|                              | Other interest-earning assets     |                    |        | (1,245  | )      |                                  |         | 1,566                           |        |        |        | 321                        |        |        |         | (1,535  | )       |         |        | 5,808   |         |         |        | 4,273  |        
|                              |                                   |                    |        |         |        |                                  |         |                                 |        |        |        |                            |        |        |         |         |         |         |        |         |         |         |        |       
|                              |                                   |                    | Total  |         |        | (32,253                          | )       |                                 |        | 63,717 |        |                            |        | 31,464 |         |         |         | (42,567 | )      |         |         | 163,581 |        |        |         | 121,014 |       
|                              |                                   |                    |        |         |        |                                  |         |                                 |        |        |        |                            |        |        |         |         |         |         |        |         |         |         |        |       
|Interest expense:             |                                   |                    |        |         |        |                                  |         |                                 |        |        |        |                            |        |        |         |         |         |         |        |         |         |         |        |       
|                              | Checking accounts                 |                    |        | 9,491   |        |                                  |         | 11,066                          |        |        |        | 20,557                     |        |        |         | 22,390  |         |         |        | 16,506  |         |         |        | 38,896 |        
|                              | Money market and savings accounts |                    |        | (5,014  | )      |                                  |         | 12,777                          |        |        |        | 7,763                      |        |        |         | 3,670   |         |         |        | 36,492  |         |         |        | 40,162 |        
|                              | Certificates of deposit           |                    |        | (10,527 | )      |                                  |         | 14,619                          |        |        |        | 4,092                      |        |        |         | 3       |         |         |        | 22,212  |         |         |        | 22,215 |        
|                              | FHLB advances                     |                    |        | (14,680 | )      |                                  |         | (14,655                         | )      |        |        | (29,335                    | )      |        |         | (15,575 | )       |         |        | 11,049  |         |         |        | (4,526 | )      
|                              | Other borrowings                  |                    |        | (1,946  | )      |                                  |         | 178                             |        |        |        | (1,768                     | )      |        |         | (2,039  | )       |         |        | 4,035   |         |         |        | 1,996  |        
|                              |                                   |                    |        |         |        |                                  |         |                                 |        |        |        |                            |        |        |         |         |         |         |        |         |         |         |        |       
|                              |                                   |                    |        | Total   |        |                                  | (22,676 | )                               |        |        | 23,985 |                            |        |        | 1,309   |         |         |         | 8,449  |         |         |         | 90,294 |        |         |         | 98,743 | 
|                              |                                   |                    |        |         |        |                                  |         |                                 |        |        |        |                            |        |        |         |         |         |         |        |         |         |         |        |       
|Change in net interest income |                                   | $                  | (9,577 | )       |        | $                                | 39,732  |                                 |        | $      | 30,155 |                            |        | $      | (51,016 | )       |         | $       | 73,287 |         |         | $       | 22,271 |       
|                              |                                   |                    |        |         |        |                                  |         |                                 |        |        |        |                            |        |        |         |         |         |         |        |         |         |         |        |       

Our net interest income for the three months ended September 30, 2001 was
$253.3 million, an increase of $30.2 million from the three months ended
September 30, 2000. The net yield on average interest-earning assets during
the third quarter of 2001 increased to 2.97% from 2.93% for the comparable
period of 2000, reflecting the current declining interest rate environment
combined with the benefits realized from the maturity and repricing of higher
interest rate certificates of deposit and wholesale borrowings during the
quarter. The maturity and repricing of these higher interest rate liabilities
more than offset the downward pricing of assets in this lower interest rate
environment.

Our net interest income for the nine months ended September 30, 2001 was $710.5
million, an increase of $22.3 million from the nine months ended September 30,
2000. The net yield on average interest-earning assets during the nine months
ended September 30, 2001 declined to 2.91% from 3.11% for the comparable period
of 2000, reflecting the increase in interest rates during 2000 and our
liabilities repricing more quickly than our assets in 2000. However, as
discussed in the above paragraph, our net yield on average interest-earning
assets has shown improvement during 2001 as a result of the declining interest
rate environment combined with the benefits realized from the maturity and
repricing of higher interest rate certificates of deposit and wholesale
borrowings. During the fourth quarter of 2001, $3.7 billion of additional
higher interest rate liabilities is scheduled to mature. See Sources of
Funds below for further discussion.

Figure 4 sets forth Charter Ones yields and costs at period end for the dates
indicated. The yields on leases excludes the impact of the related tax
benefit. The cost of liabilities includes the annualized effect of interest
rate risk management instruments.

11



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Yields and Costs at End of Period(Figure 4)

|                                     |                           |                                   |                        |                                    |      |         |      |          |      |      |      | 
|------------------------------------ | ------------------------- | --------------------------------- | ---------------------- | ---------------------------------- | ---- | ------- | ---- | -------- | ---- | ---- | ---- | 
|                                     |                           |                                   |                        |                                    |      | 9/30/01 |      | 12/31/00
|                                     |                           |                                   |                        |                                    |      |         |      |         
|                                     | Weighted average yield:   |                                   |                        |                                    |      |         |      |          |     
|                                     |                           | Real estate loans                 |                        |                                    | 7.30 | %       |      |          | 7.49 | %   
|                                     |                           | Retail consumer loans             |                        |                                    | 6.90 |         |      |          | 7.86 |     
|                                     |                           | Automobile loans                  |                        |                                    | 8.16 |         |      |          | 8.67 |     
|                                     |                           | Consumer finance                  |                        |                                    | 8.33 |         |      |          | 8.91 |     
|                                     |                           | Leases(1)                         |                        |                                    | 6.05 |         |      |          | 6.33 |     
|                                     |                           | Corporate banking loans           |                        |                                    | 7.11 |         |      |          | 8.89 |     
|                                     |                           |                                   | Total loans and leases |                                    |      | 7.30    |      |          |      | 7.73 |     
|                                     |                           | Mortgage-backed securities        |                        |                                    | 6.46 |         |      |          | 7.29 |     
|                                     |                           | Investment securities             |                        |                                    | 8.15 |         |      |          | 7.40 |     
|                                     |                           | Other interest-earning assets     |                        |                                    | 6.88 |         |      |          | 7.46 |     
|                                     |                           |                                   |                        | Total interest-earning assets      |      |         | 7.10 |          |      |      | 7.64 | 
|                                     | Weighted average cost(2): |                                   |                        |                                    |      |         |      |          |     
|                                     |                           | Checking accounts                 |                        |                                    | 2.45 |         |      |          | 1.73 |     
|                                     |                           | Money market and savings accounts |                        |                                    | 2.72 |         |      |          | 3.29 |     
|                                     |                           | Certificates of deposit           |                        |                                    | 4.84 |         |      |          | 5.93 |     
|                                     |                           |                                   | Total deposits         |                                    |      | 3.58    |      |          |      | 4.35 |     
|                                     | FHLB advances             |                                   |                        | 5.12                               |      |         |      | 5.86     |     
|                                     | Other borrowings          |                                   |                        | 5.31                               |      |         |      | 7.21     |     
|                                     |                           |                                   |                        | Total interest-bearing liabilities |      |         | 4.04 |          |      |      | 4.89 | 
|Interest rate spread                 |                           |                                   | 3.06                   |                                    |      |         | 2.75 |         
|Net yield on interest-earning assets |                           |                                   | 3.21                   |                                    |      |         | 2.91 |         



---

|(1) |  | Excludes impact of related tax benefits.                                    
|--- |  | ----------------------------------------------------------------------------
|   
|(2) |  | Includes the annualized effect of interest rate risk management
instruments.

Other Income

Other income for the three months ended September 30, 2001 was $120.1 million,
an increase of $20.4 million, or 20.4%, over the $99.8 million for the three
months ended September 30, 2000. The increase was primarily attributable to
income from retail banking and net gains on sales. Retail banking income
increased $7.9 million, or 12.2%, over the comparable period in 2000. Growth
in income from retail banking was attributed to ongoing franchise development
initiatives. Net gains on sales totaled $26.3 million for the third quarter of
2001, an increase of $20.8 million over the third quarter of 2000. The
mortgage-backed securities sold during the quarter were comprised primarily of
seasoned one-to-four family mortgages originated by the Bank. These increases
in retail banking income and net gains on sales were partially offset by a
decrease in income from mortgage banking. The decrease in mortgage banking
income of $4.4 million resulted primarily from a $4.0 million increase to the
valuation allowance for loan servicing assets in response to faster prepayment
speeds on single-family mortgages resulting from higher levels of refinancings.

Other income for the nine months ended September 30, 2001 was $340.8 million,
an increase of $59.5 million, or 21.2%, over the $281.3 million for the nine
months ended September 30, 2000. Retail banking income increased $33.9 million,
or 19.0%, over the comparable period in 2000. Net gains on sales totaled $68.0
million for the nine months ended September 30, 2001, an increase of $55.8
million over the comparable 2000 period. These increases in retail banking
income and net gains on sales (discussed in the above paragraph) were partially
offset by a $14.0 million decrease in mortgage banking income and a $10.2
million decrease in income from leasing operations. The decline in mortgage
banking income resulted from the $8.0 million increase to the valuation
allowance for loan servicing assets during the second and third quarter of 2001
in response to faster prepayment speeds on single-family mortgages resulting
from higher levels of refinancings, as well as reduced servicing income
following our fourth quarter 2000 sale of $3.0 billion in mortgage servicing.
Income from leasing operations decreased $10.2 million for the nine months
ended September 30, 2001, as the comparable period of 2000 included the benefit
realized from residual values associated with certain lease terminations.

Administrative Expenses

Administrative expenses were $155.3 million for the three months ended
September 30, 2001, an increase of $6.6 million, or 4.5%, as compared to the
third quarter of 2000. There were $2.0 million of merger-related expenses
recorded in the three months ended September 30, 2000. Excluding these
merger-related charges, our administrative expenses were $146.7 million for the
three months ended September 30, 2000. The increase in administrative

12



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expenses was primarily attributed to our acquisition of Alliance during the third
quarter of 2001. Despite the increase in administrative expenses, our
efficiency ratio improved to 40.49% for the three months ended September 30,
2001, from 44.93% for the three months ended September 30, 2000. The
efficiency ratio is the ratio of administrative expenses, excluding goodwill
amortization and merger-related charges, to net interest income and other
income.

Administrative expenses were $453.7 million for the nine months ended September
30, 2001, a decrease of $5.2 million, or 1.1%, as compared to the 2000 period.
The 2000 period included merger-related expenses of $26.1 million. Excluding
these merger-related charges, our administrative expenses were $432.8 million
for the nine months ended September 30, 2000. The increases in administrative
expenses were attributable to our acquisition of Alliance, as well as higher
marketing costs as we implemented various programs geared to support sales
efforts throughout the Bank. Lastly, our loan origination costs increased as a
result of our record loan production. Despite the increase in administrative
expenses, our efficiency ratio improved to 42.00% for the nine months ended
September 30, 2001, from 43.94% for the comparable period in 2000.

Federal Income Tax

Federal income tax expense for the three months ended September 30, 2001 was
$60.7 million, compared to $51.6 million for the same period in 2000. The
primary reason for this increase in the provision for federal income taxes was
an increase in pre-tax income. The effective tax rate was 31.7% for the 2001
period and 32.0% for the comparable 2000 period.

Federal income tax expense for the nine months ended September 30, 2001 was
$170.1 million, compared to $152.8 million for the same period in 2000. The
primary reason for this increase in the provision for federal income taxes was
an increase in pre-tax income. The effective tax rate was 31.7% for the 2001
period and 32.0% for the comparable 2000 period.

FINANCIAL CONDITION

Overview

At September 30, 2001, total assets were $37.3 billion, compared to total
assets of $33.0 billion at December 31, 2000. Contributing to the increase in
total assets was our acquisition of Alliance. As discussed above in Results
of Operations, Alliance had assets of $2.0 billion. Additionally, we have
experienced growth in our mortgage-backed securities available for sale
portfolio since December 31, 2000. This portfolio increased primarily due to
$5.5 billion in residential loan securitizations that occurred during the nine
months ended September 30, 2001.

13



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Loans and Leases

Composition of Loans and Leases(Figure 5)

|                                       |                                                             |                   |                 |                          |           |                        |            |            |           |           |            | 
|-------------------------------------- | ----------------------------------------------------------- | ----------------- | --------------- | ------------------------ | --------- | ---------------------- | ---------- | ---------- | --------- | --------- | ---------- | 
|                                       |                                                             |                   |                 |                          |           | 9/30/01                |            | 12/31/00  
|                                       |                                                             |                   |                 |                          |           |                        |            |           
|                                       |                                                             |                   |                 |                          |           | (Dollars in thousands)
|                                       | One-to-four family:                                         |                   |                 |                          |           |                        |            |            |          
|                                       |                                                             | Permanent:        |                 |                          |           |                        |            |            |           |          
|                                       |                                                             |                   | Fixed rate      |                          | $         | 5,812,007              |            |            | $         | 4,543,712 |           
|                                       |                                                             |                   | Adjustable rate |                          |           | 3,753,921              |            |            |           | 5,989,120 |           
|                                       |                                                             | Construction      |                 |                          | 411,186   |                        |            |            | 345,930   |          
|                                       |                                                             |                   |                 |                          |           |                        |            |           
|                                       |                                                             |                   | 9,977,114       |                          |           |                        | 10,878,762 |           
|                                       |                                                             |                   |                 |                          |           |                        |            |           
|                                       | Commercial real estate:                                     |                   |                 |                          |           |                        |            |            |          
|                                       |                                                             | Multifamily       |                 |                          | 1,240,894 |                        |            |            | 1,115,360 |          
|                                       |                                                             | Other             |                 |                          | 1,276,072 |                        |            |            | 855,266   |          
|                                       |                                                             |                   |                 |                          |           |                        |            |           
|                                       |                                                             |                   | 2,516,966       |                          |           |                        | 1,970,626  |           
|                                       |                                                             |                   |                 |                          |           |                        |            |           
|                                       | Consumer:                                                   |                   |                 |                          |           |                        |            |            |          
|                                       |                                                             | Retail            |                 |                          | 4,910,435 |                        |            |            | 4,631,476 |          
|                                       |                                                             | Automobile        |                 |                          | 4,259,625 |                        |            |            | 3,151,084 |          
|                                       |                                                             | Consumer finance  |                 |                          | 1,066,613 |                        |            |            | 988,879   |          
|                                       |                                                             |                   |                 |                          |           |                        |            |           
|                                       |                                                             |                   | 10,236,673      |                          |           |                        | 8,771,439  |           
|                                       |                                                             |                   |                 |                          |           |                        |            |           
|                                       | Business:                                                   |                   |                 |                          |           |                        |            |            |          
|                                       |                                                             | Leasing           |                 |                          | 2,008,167 |                        |            |            | 1,778,021 |          
|                                       |                                                             | Corporate banking |                 |                          | 895,221   |                        |            |            | 798,942   |          
|                                       |                                                             |                   |                 |                          |           |                        |            |           
|                                       |                                                             |                   | 2,903,388       |                          |           |                        | 2,576,963  |           
|                                       |                                                             |                   |                 |                          |           |                        |            |           
|                                       | Loans and leases before allowance for loan and lease losses |                   |                 | 25,634,141               |           |                        |            | 24,197,790 |          
|                                       | Allowance for loan and lease losses                         |                   |                 | (235,604                 | )         |                        |            | (189,616   | )        
|                                       |                                                             |                   |                 |                          |           |                        |            |           
|                                       |                                                             |                   |                 | Loans and leases, net(1) |           | $                      | 25,398,537 |            |           | $         | 24,008,174 | 
|                                       |                                                             |                   |                 |                          |           |                        |            |           
|Portfolio of loans serviced for others |                                                             | $                 | 13,862,069      |                          |           | $                      | 10,379,644 |           
|                                       |                                                             |                   |                 |                          |           |                        |            |           



---

|(1) |  | Includes loans held for sale.
|--- |  | -----------------------------

Our loan and lease portfolio remains well-diversified. At September 30, 2001,
95% of our loans and leases were collateralized, with 64% backed by one-to-four
family and multifamily real estate.





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Loan and Lease Activity(Figure 6)

|                                |                                                |                    |                                   |                                      |           |                        |           |                   |           |           |           |           |           |            |            |           |           |           |           | 
|------------------------------- | ---------------------------------------------- | ------------------ | --------------------------------- | ------------------------------------ | --------- | ---------------------- | --------- | ----------------- | --------- | --------- | --------- | --------- | --------- | ---------- | ---------- | --------- | --------- | --------- | --------- | 
|                                |                                                |                    |                                   |                                      |           | Three Months Ended     |           | Nine Months Ended
|                                |                                                |                    |                                   |                                      |           |                        |           |                  
|                                |                                                |                    |                                   |                                      |           | 9/30/01                |           | 9/30/00           |           | 9/30/01   |           | 9/30/00  
|                                |                                                |                    |                                   |                                      |           |                        |           |                   |           |           |           |          
|                                |                                                |                    |                                   |                                      |           | (Dollars in thousands)
|Originations:                   |                                                |                    |                                   |                                      |           |                        |           |                   |           |           |           |           |           |            |            |          
|Real estate:                    |                                                |                    |                                   |                                      |           |                        |           |                   |           |           |           |           |           |            |            |          
|                                | Permanent:                                     |                    |                                   |                                      |           |                        |           |                   |           |           |           |           |           |            |            |           |          
|                                |                                                | One-to-four family |                                   | $                                    | 2,015,708 |                        |           | $                 | 1,381,679 |           |           | $         | 5,982,597 |            |            | $         | 3,796,381 |          
|                                |                                                | Multifamily        |                                   |                                      | 21,003    |                        |           |                   | 15,380    |           |           |           | 40,679    |            |            |           | 29,636    |          
|                                |                                                | Commercial         |                                   |                                      | 19,953    |                        |           |                   | 61,687    |           |           |           | 146,534   |            |            |           | 171,224   |          
|                                |                                                |                    |                                   |                                      |           |                        |           |                   |           |           |           |           |           |            |            |          
|                                |                                                |                    | Total permanent loans             |                                      |           | 2,056,664              |           |                   |           | 1,458,746 |           |           |           | 6,169,810  |            |           |           | 3,997,241 |          
|                                |                                                |                    |                                   |                                      |           |                        |           |                   |           |           |           |           |           |            |            |          
|                                | Construction:                                  |                    |                                   |                                      |           |                        |           |                   |           |           |           |           |           |            |            |           |          
|                                |                                                | One-to-four family |                                   |                                      | 16,765    |                        |           |                   | 173,190   |           |           |           | 342,222   |            |            |           | 441,707   |          
|                                |                                                | Multifamily        |                                   |                                      | 60,506    |                        |           |                   | 23,494    |           |           |           | 131,020   |            |            |           | 67,357    |          
|                                |                                                | Commercial         |                                   |                                      | 68,526    |                        |           |                   | 31,036    |           |           |           | 173,949   |            |            |           | 83,820    |          
|                                |                                                |                    |                                   |                                      |           |                        |           |                   |           |           |           |           |           |            |            |          
|                                |                                                |                    | Total construction loans          |                                      |           | 145,797                |           |                   |           | 227,720   |           |           |           | 647,191    |            |           |           | 592,884   |          
|                                |                                                |                    |                                   |                                      |           |                        |           |                   |           |           |           |           |           |            |            |          
|                                |                                                |                    |                                   | Total real estate loans originated   |           |                        | 2,202,461 |                   |           |           | 1,686,466 |           |           |            | 6,817,001  |           |           |           | 4,590,125 | 
|                                |                                                |                    |                                   |                                      |           |                        |           |                   |           |           |           |           |           |            |            |          
|Retail consumer                 |                                                |                    | 948,975                           |                                      |           |                        | 533,559   |                   |           |           | 2,668,708 |           |           |            | 1,572,838  |          
|Automobile                      |                                                |                    | 900,593                           |                                      |           |                        | 597,303   |                   |           |           | 2,079,900 |           |           |            | 1,341,498  |          
|Consumer finance                |                                                |                    | 70,161                            |                                      |           |                        | 157,049   |                   |           |           | 195,523   |           |           |            | 322,587    |          
|Leases                          |                                                |                    | 141,386                           |                                      |           |                        | 258,647   |                   |           |           | 397,511   |           |           |            | 566,146    |          
|Corporate banking               |                                                |                    | 273,105                           |                                      |           |                        | 211,515   |                   |           |           | 742,070   |           |           |            | 569,747    |          
|                                |                                                |                    |                                   |                                      |           |                        |           |                   |           |           |           |           |           |            |            |          
|                                |                                                |                    | Total loans and leases originated |                                      |           | 4,536,681              |           |                   |           | 3,444,539 |           |           |           | 12,900,713 |            |           |           | 8,962,941 |          
|                                |                                                |                    |                                   |                                      |           |                        |           |                   |           |           |           |           |           |            |            |          
|Loans purchased                 |                                                |                    | 1,406,582                         |                                      |           |                        | 8,984     |                   |           |           | 1,418,305 |           |           |            | 16,890     |          
|                                |                                                |                    |                                   |                                      |           |                        |           |                   |           |           |           |           |           |            |            |          
|Sales and principal reductions: |                                                |                    |                                   |                                      |           |                        |           |                   |           |           |           |           |           |            |            |          
|                                | Loans sold                                     |                    |                                   | 399,889                              |           |                        |           | 125,852           |           |           |           | 1,159,814 |           |            |            | 327,375   |          
|                                | Loans exchanged for mortgage-backed
securities |                    |                                   | 2,258,523                            |           |                        |           | 1,310,813         |           |           |           | 5,449,048 |           |            |            | 2,781,889 |          
|                                | Principal reductions                           |                    |                                   | 2,225,932                            |           |                        |           | 1,532,501         |           |           |           | 6,129,277 |           |            |            | 4,154,534 |          
|                                |                                                |                    |                                   |                                      |           |                        |           |                   |           |           |           |           |           |            |            |          
|                                |                                                |                    |                                   | Total sales and principal reductions |           |                        | 4,884,344 |                   |           |           | 2,969,166 |           |           |            | 12,738,139 |           |           |           | 7,263,798 | 
|                                |                                                |                    |                                   |                                      |           |                        |           |                   |           |           |           |           |           |            |            |          
|                                |                                                |                    |                                   | Increase before net items            |           | $                      | 1,058,919 |                   |           | $         | 484,357   |           |           | $          | 1,580,879  |           |           | $         | 1,716,033 | 
|                                |                                                |                    |                                   |                                      |           |                        |           |                   |           |           |           |           |           |            |            |          

Investment and Mortgage-Backed Securities

Figures 7 and 8 summarize our investment and mortgage-backed securities
portfolios at September 30, 2001 and December 31, 2000. The amounts reflected
represent the fair value of securities available for sale and the amortized
cost of securities held to maturity.

Investment Securities(Figure 7)

|                   |                                      |                                                |       |        |                        |         |          |         |         |         | 
|------------------ | ------------------------------------ | ---------------------------------------------- | ----- | ------ | ---------------------- | ------- | -------- | ------- | ------- | ------- | 
|                   |                                      |                                                |       |        | 9/30/01                |         | 12/31/00
|                   |                                      |                                                |       |        |                        |         |         
|                   |                                      |                                                |       |        | (Dollars in thousands)
|Available for Sale |                                      |                                                |       |        |                        |         |          |        
|                   | U.S. Treasury and agency securities  |                                                | $     | 31,314 |                        |         | $        | 333,900 |        
|                   | Corporate notes and commercial paper |                                                |       | 95,506 |                        |         |          | 65,532  |        
|                   | Other                                |                                                |       | 6,589  |                        |         |          | 27,269  |        
|                   |                                      |                                                |       |        |                        |         |          |        
|                   |                                      | Total investment securities available for sale |       |        | 133,409                |         |          |         | 426,701 |        
|                   |                                      |                                                |       |        |                        |         |          |        
|Held to Maturity   |                                      |                                                |       |        |                        |         |          |        
|                   | U.S. Treasury and agency securities  |                                                |       | 263    |                        |         |          | 15,000  |        
|                   | Other                                |                                                |       | 6,825  |                        |         |          | 7,514   |        
|                   |                                      |                                                |       |        |                        |         |          |        
|                   |                                      | Total investment securities held to maturity   |       |        | 7,088                  |         |          |         | 22,514  |        
|                   |                                      |                                                |       |        |                        |         |          |        
|                   |                                      |                                                | Total |        | $                      | 140,497 |          |         | $       | 449,215 | 
|                   |                                      |                                                |       |        |                        |         |          |        
|                   | Weighted average rate                |                                                |       | 8.15   | %                      |         |          | 7.40    | %      
|                   |                                      |                                                |       |        |                        |         |          |        

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Mortgage-Backed Securities(Figure 8)

|                   |                                      |                           |                                                     |       |         |                        |           |          |         |           |           | 
|------------------ | ------------------------------------ | ------------------------- | --------------------------------------------------- | ----- | ------- | ---------------------- | --------- | -------- | ------- | --------- | --------- | 
|                   |                                      |                           |                                                     |       |         | 9/30/01                |           | 12/31/00
|                   |                                      |                           |                                                     |       |         |                        |           |         
|                   |                                      |                           |                                                     |       |         | (Dollars in thousands)
|Available for Sale |                                      |                           |                                                     |       |         |                        |           |         
|                   | Participation certificates:          |                           |                                                     |       |         |                        |           |          |        
|                   |                                      | Government agency issues: |                                                     |       |         |                        |           |          |         |          
|                   |                                      |                           | FNMA                                                |       | $       | 5,469,823              |           |          | $       | 2,985,852 |          
|                   |                                      |                           | FHLMC                                               |       |         | 749,145                |           |          |         | 59,511    |          
|                   |                                      |                           | GNMA                                                |       |         | 33,992                 |           |          |         | 2,209     |          
|                   | Collateralized mortgage obligations: |                           |                                                     |       |         |                        |           |          |        
|                   |                                      | Government agency issues: |                                                     |       |         |                        |           |          |         |          
|                   |                                      |                           | FNMA                                                |       |         | 225,633                |           |          |         | 225,747   |          
|                   |                                      |                           | FHLMC                                               |       |         | 327,316                |           |          |         | 292,232   |          
|                   |                                      |                           | GNMA                                                |       |         | 4,079                  |           |          |         | 6,015     |          
|                   |                                      | Private issues            |                                                     |       | 580,886 |                        |           |          | 515,630 |          
|                   |                                      |                           |                                                     |       |         |                        |           |         
|                   |                                      |                           | Total mortgage-backed securities available for sale |       |         | 7,390,874              |           |          |         | 4,087,196 |          
|                   |                                      |                           |                                                     |       |         |                        |           |         
|Held to Maturity   |                                      |                           |                                                     |       |         |                        |           |         
|                   | Participation certificates:          |                           |                                                     |       |         |                        |           |          |        
|                   |                                      | Government agency issues: |                                                     |       |         |                        |           |          |         |          
|                   |                                      |                           | FNMA                                                |       |         | 340,724                |           |          |         | 433,533   |          
|                   |                                      |                           | FHLMC                                               |       |         | 119,039                |           |          |         | 154,502   |          
|                   |                                      |                           | GNMA                                                |       |         | 64,511                 |           |          |         | 84,603    |          
|                   |                                      | Private issues            |                                                     |       | 100,064 |                        |           |          | 128,407 |          
|                   | Collateralized mortgage obligations: |                           |                                                     |       |         |                        |           |          |        
|                   |                                      | Government agency issues: |                                                     |       |         |                        |           |          |         |          
|                   |                                      |                           | FNMA                                                |       |         | 165,959                |           |          |         | 202,283   |          
|                   |                                      |                           | FHLMC                                               |       |         | 44,143                 |           |          |         | 66,292    |          
|                   |                                      | Private issues            |                                                     |       | 294,609 |                        |           |          | 436,555 |          
|                   |                                      |                           |                                                     |       |         |                        |           |         
|                   |                                      |                           | Total mortgage-backed securities held to maturity   |       |         | 1,129,049              |           |          |         | 1,506,175 |          
|                   |                                      |                           |                                                     |       |         |                        |           |         
|                   |                                      |                           |                                                     | Total |         | $                      | 8,519,923 |          |         | $         | 5,593,371 | 
|                   |                                      |                           |                                                     |       |         |                        |           |         
|                   |                                      | Weighted average rate     |                                                     |       | 6.46    | %                      |           |          | 7.29    | %        
|                   |                                      |                           |                                                     |       |         |                        |           |         

16



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##### Table of Contents



Asset Quality

Analysis of the Allowance for Loan and Lease Losses(Figure 9)

|                                     |                                                          |                        |                   |                                |        |                        |         |                   |        |         |        |         |         |         |         |         |         |         |         |  
|------------------------------------ | -------------------------------------------------------- | ---------------------- | ----------------- | ------------------------------ | ------ | ---------------------- | ------- | ----------------- | ------ | ------- | ------ | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | -
|                                     |                                                          |                        |                   |                                |        | Three Months Ended     |         | Nine Months Ended
|                                     |                                                          |                        |                   |                                |        |                        |         |                  
|                                     |                                                          |                        |                   |                                |        | 9/30/01                |         | 9/30/00           |        | 9/30/01 |        | 9/30/00
|                                     |                                                          |                        |                   |                                |        |                        |         |                   |        |         |        |        
|                                     |                                                          |                        |                   |                                |        | (Dollars in thousands)
|Allowance for loan and lease losses: |                                                          |                        |                   |                                |        |                        |         |                   |        |         |        |         |         |         |         |        
|                                     | Balance, beginning of period                             |                        | $                 | 198,378                        |        |                        | $       | 186,194           |        |         | $      | 189,616 |         |         | $       | 186,400 |        
|                                     | Provision for loan and lease losses                      |                        |                   | 27,109                         |        |                        |         | 13,178            |        |         |        | 61,913  |         |         |         | 33,285  |        
|                                     | Acquired through business combination                    |                        |                   | 33,782                         |        |                        |         |                  |        |         |        | 33,782  |         |         |         |        |        
|                                     | Loans and leases charged off:                            |                        |                   |                                |        |                        |         |                   |        |         |        |         |         |         |         |         |        
|                                     |                                                          | One-to-four family     |                   |                                | (800   | )                      |         |                   | (1,117 | )       |        |         | (2,162  | )       |         |         | (4,223  | )      
|                                     |                                                          | Commercial real estate |                   |                                | (26    | )                      |         |                   |       |         |        |         | (509    | )       |         |         | (179    | )      
|                                     |                                                          | Retail consumer        |                   |                                | (2,123 | )                      |         |                   | (2,997 | )       |        |         | (5,772  | )       |         |         | (8,876  | )      
|                                     |                                                          | Automobile             |                   |                                | (8,243 | )                      |         |                   | (6,414 | )       |        |         | (27,023 | )       |         |         | (20,295 | )      
|                                     |                                                          | Consumer finance       |                   |                                | (3,762 | )                      |         |                   | (949   | )       |        |         | (8,356  | )       |         |         | (2,457  | )      
|                                     |                                                          | Leases                 |                   |                                | (7,234 | )                      |         |                   |       |         |        |         | (7,496  | )       |         |         |        |        
|                                     |                                                          | Corporate banking      |                   |                                | (3,903 | )                      |         |                   | (153   | )       |        |         | (5,456  | )       |         |         | (589    | )      
|                                     |                                                          |                        |                   |                                |        |                        |         |                   |        |         |        |         |         |         |         |        
|                                     |                                                          |                        | Total charge-offs |                                |        | (26,091                | )       |                   |        | (11,630 | )      |         |         | (56,774 | )       |         |         | (36,619 | )      
|                                     |                                                          |                        |                   |                                |        |                        |         |                   |        |         |        |         |         |         |         |        
|                                     | Recoveries:                                              |                        |                   |                                |        |                        |         |                   |        |         |        |         |         |         |         |         |        
|                                     |                                                          | One-to-four family     |                   |                                | 74     |                        |         |                   | 143    |         |        |         | 119     |         |         |         | 648     |        
|                                     |                                                          | Commercial real estate |                   |                                | 19     |                        |         |                   | 36     |         |        |         | 24      |         |         |         | 95      |        
|                                     |                                                          | Retail consumer        |                   |                                | 402    |                        |         |                   | 229    |         |        |         | 1,322   |         |         |         | 976     |        
|                                     |                                                          | Automobile             |                   |                                | 1,756  |                        |         |                   | 1,402  |         |        |         | 4,800   |         |         |         | 4,502   |        
|                                     |                                                          | Consumer finance       |                   |                                | 73     |                        |         |                   |       |         |        |         | 201     |         |         |         | 17      |        
|                                     |                                                          | Leases                 |                   |                                |       |                        |         |                   |       |         |        |         | 220     |         |         |         |        |        
|                                     |                                                          | Corporate banking      |                   |                                | 102    |                        |         |                   | 31     |         |        |         | 381     |         |         |         | 279     |        
|                                     |                                                          |                        |                   |                                |        |                        |         |                   |        |         |        |         |         |         |         |        
|                                     |                                                          |                        | Total recoveries  |                                |        | 2,426                  |         |                   |        | 1,841   |        |         |         | 7,067   |         |         |         | 6,517   |        
|                                     |                                                          |                        |                   |                                |        |                        |         |                   |        |         |        |         |         |         |         |        
|                                     |                                                          |                        |                   | Net loan and lease charge-offs |        |                        | (23,665 | )                 |        |         | (9,789 | )       |         |         | (49,707 | )       |         |         | (30,102 | )
|                                     |                                                          |                        |                   |                                |        |                        |         |                   |        |         |        |         |         |         |         |        
|                                     | Balance, end of period                                   |                        | $                 | 235,604                        |        |                        | $       | 189,583           |        |         | $      | 235,604 |         |         | $       | 189,583 |        
|                                     |                                                          |                        |                   |                                |        |                        |         |                   |        |         |        |         |         |         |         |        
|                                     | Net charge-offs to average loans and leases
(annualized) |                        |                   | .36                            | %      |                        |         | .16               | %      |         |        | .26     | %       |         |         | .17     | %      

Annualized net charge-offs increased to .36% of average loans for the third
quarter of 2001 and .26% for the nine months ended September 30, 2001. The
sequential increase from the second quarter level of .19% was primarily
attributable to bankruptcy-related charge-offs associated with three commercial
lease and corporate banking customers. Although such charge-offs are a
by-product of a weakening economy, these three credits are not indicative of
any systemic concerns. The portfolio remains stable with delinquencies and
charge-offs continuing to be very manageable, as evidenced by the decline in
the level of nonperforming assets. See Figure 10 for more information on our
nonperforming assets.

Consistent with prior quarters, and in light of the softening economy, the
provision for loan and lease losses exceeded net charge-offs by $3.4 million
during the quarter. The ratio of the allowance for loan and lease losses to
total loans has increased from .78% at December 31, 2000 to .92% at September
30, 2001 due to the significant level of loan securitizations activity this
year, the Alliance transaction, and the year-to-date loan loss provision
exceeding charge-offs by $12.2 million.

17



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Figure 10 sets forth information concerning nonperforming assets for the periods reported. Nonperforming assets
consist of (1) nonaccrual loans and leases, (2) loans and leases past due 90
days or more as to principal or interest, (3) restructured real estate mortgage
loans and (4) real estate acquired through foreclosure and other collateral
owned.

Nonperforming Assets(Figure 10)

|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |          |        |        |         | 
|------------------------------------------------------------------- | -------------------------------------------------------- | --------------------------------------- | -------------------------- | ------------------------------------------------------------ | ------ | ---------------------- | ------- | -------- | ------ | ------ | ------- | 
|                                                                    |                                                          |                                         |                            |                                                              |        | 9/30/01                |         | 12/31/00
|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    |                                                          |                                         |                            |                                                              |        | (Dollars in thousands)
|Nonperforming loans and leases:                                     |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    | Nonaccrual loans and leases:                             |                                         |                            |                                                              |        |                        |         |          |       
|                                                                    |                                                          | Real estate mortgage loans:             |                            |                                                              |        |                        |         |          |        |       
|                                                                    |                                                          |                                         | One-to-four family(1)      |                                                              | $      | 77,094                 |         |          | $      | 71,269 |        
|                                                                    |                                                          |                                         | Multifamily and commercial |                                                              |        | 8,046                  |         |          |        | 8,132  |        
|                                                                    |                                                          |                                         | Construction and land      |                                                              |        | 4,182                  |         |          |        | 8,806  |        
|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    |                                                          |                                         |                            | Total real estate mortgage loans                             |        |                        | 89,322  |          |        |        | 88,207  | 
|                                                                    |                                                          | Retail consumer                         |                            |                                                              | 16,156 |                        |         |          | 11,120 |       
|                                                                    |                                                          | Automobile                              |                            |                                                              | 24     |                        |         |          | 130    |       
|                                                                    |                                                          | Consumer finance                        |                            |                                                              | 63,198 |                        |         |          | 48,673 |       
|                                                                    |                                                          | Leases                                  |                            |                                                              | 2,687  |                        |         |          |       |       
|                                                                    |                                                          | Corporate banking                       |                            |                                                              | 9,455  |                        |         |          | 18,707 |       
|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    |                                                          |                                         |                            | Total nonaccrual loans and leases                            |        |                        | 180,842 |          |        |        | 166,837 | 
|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    | Accruing loans and leases delinquent more than 90 days:  |                                         |                            |                                                              |        |                        |         |          |       
|                                                                    |                                                          | Real estate mortgage loans:             |                            |                                                              |        |                        |         |          |        |       
|                                                                    |                                                          |                                         | One-to-four family         |                                                              |        |                       |         |          |        |       |        
|                                                                    |                                                          |                                         | Multifamily and commercial |                                                              |        |                       |         |          |        |       |        
|                                                                    |                                                          |                                         | Construction and land      |                                                              |        |                       |         |          |        |       |        
|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    |                                                          |                                         |                            | Total real estate mortgage loans                             |        |                        |        |          |        |        |        | 
|                                                                    |                                                          | Retail consumer(1)                      |                            |                                                              | 3,149  |                        |         |          | 2,586  |       
|                                                                    |                                                          | Automobile                              |                            |                                                              | 6,437  |                        |         |          | 6,911  |       
|                                                                    |                                                          | Consumer finance                        |                            |                                                              |       |                        |         |          |       |       
|                                                                    |                                                          | Leases                                  |                            |                                                              | 62     |                        |         |          | 2,956  |       
|                                                                    |                                                          | Corporate banking                       |                            |                                                              | 1,991  |                        |         |          | 2,086  |       
|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    |                                                          |                                         |                            | Total accruing loans and leases delinquent more than 90 days |        |                        | 11,639  |          |        |        | 14,539  | 
|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    | Restructured real estate mortgage loans                  |                                         |                            | 656                                                          |        |                        |         | 666      |       
|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    |                                                          |                                         |                            | Total nonperforming loans and leases                         |        |                        | 193,137 |          |        |        | 182,042 | 
|Real estate acquired through foreclosure and other collateral owned |                                                          |                                         | 41,955                     |                                                              |        |                        | 27,523  |         
|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    |                                                          |                                         |                            | Total nonperforming assets                                   |        |                        | 235,092 |          |        |        | 209,565 | 
|                                                                    |                                                          |                                         |                            | Total government guaranteed loans                            |        |                        | 21,439  |          |        |        | 19,225  | 
|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    |                                                          |                                         |                            | Nonperforming assets net of government guaranteed loans      |        | $                      | 213,653 |          |        | $      | 190,340 | 
|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |         
|Ratio of:                                                           |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    | Nonperforming loans and leases to total loans and leases |                                         |                            | .76                                                          | %      |                        |         | .76      | %     
|                                                                    | Nonperforming assets to total assets                     |                                         |                            | .63                                                          |        |                        |         | .64      |       
|                                                                    | Allowance for loan and lease losses to:                  |                                         |                            |                                                              |        |                        |         |          |       
|                                                                    |                                                          | Nonperforming loans and leases          |                            |                                                              | 121.99 |                        |         |          | 104.16 |       
|                                                                    |                                                          | Total loans and leases before allowance |                            |                                                              | .92    |                        |         |          | .78    |       
|Ratio of (excluding government guaranteed nonperforming loans):     |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    | Nonperforming loans and leases to total loans and leases |                                         |                            | .68                                                          |        |                        |         | .68      |       
|                                                                    | Nonperforming assets to total assets                     |                                         |                            | .57                                                          |        |                        |         | .58      |       
|                                                                    | Allowance for loan and lease losses to:                  |                                         |                            |                                                              |        |                        |         |          |       
|                                                                    |                                                          | Nonperforming loans and leases          |                            |                                                              | 137.22 |                        |         |          | 116.46 |       
|                                                                    |                                                          | Total loans and leases before allowance |                            |                                                              | .92    |                        |         |          | .78    |       



---

|(1) |  | Includes government guaranteed loans.
|--- |  | -------------------------------------

Loans and leases not reflected in the table above, where known information
about possible credit problems of borrowers caused management to have doubts as
to the ability of the borrower to comply with present repayment terms and that
may result in disclosure of such loans and leases in the future, totaled $148.9
million and $96.8 million at September 30, 2001 and December 31, 2000,
respectively. The increase was primarily attributable to the acquisition of
Alliance. The vast majority of these loans, as well as our
nonperforming assets, are collateralized. As such, we would anticipate that
any losses resulting from possible future charge-offs would be substantially
less than the respective loan balances.



18



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##### Table of Contents



With respect to certain industries that could be
affected by the events of September 11, 2001, the Company's loan and
lease portfolio includes $265.5 million of leases with domestic
airlines secured principally by aircraft and commitments of $54.4
million of commercial real estate loans secured by hotels, of which
$40.0 million was disbursed as of quarter end. All relationships were
current at September 30, 2001, and in many cases, are further
supported by various recourse or residual guaranty levels. The
combined exposure to these industries represents less than 1% of the
Company's assets. Given the current payment status of these
relationships and strength of the various borrowers or lessees,
together with the significant diversification by carrier, maturity
and equipment in the aircraft portfolio, no material charge-offs are
presently anticipated in these portfolios.

SOURCES OF FUNDS

General

Our principal sources of funds are deposits, advances from the Federal Home
Loan Bank (FHLB) of Cincinnati, federal funds purchased and reverse
repurchase agreements, repayments and maturities of loans and securities,
proceeds from the sale of loans and securities, and funds provided by
operations. Management also considers our interest-sensitivity profile when
deciding on sources of funds. At September 30, 2001, our one-year gap was
4.44% of total assets. See Part I, Item 3 Quantitative and Qualitative
Disclosure About Market Risk, of this Form 10-Q regarding further information
on our interest rate risk profile.

Deposits

Deposit flows are greatly influenced by economic conditions, the general level
of interest rates and competition. We utilize particular sources of funds
based on comparative costs and availability. We generally manage the pricing
of deposits to maintain a steady deposit balance, but from time to time may
decide not to pay rates on deposits as high as our competition and, when
necessary, to supplement deposits with longer term and/or lower cost
alternative sources of funds such as FHLB advances and federal funds purchased
and reverse repurchase agreements.

Scheduled maturities over the next three months include $2.5 billion in
certificates of deposit at an average interest rate of 5.85%.

Composition of Deposits(Figure 11)

|                                            |                     |                     |            |                        |            |          |      |          |      |      |            |           |            |          |      |      |      | 
|------------------------------------------- | ------------------- | ------------------- | ---------- | ---------------------- | ---------- | -------- | ---- | -------- | ---- | ---- | ---------- | --------- | ---------- | -------- | ---- | ---- | ---- | 
|                                            |                     |                     |            | 9/30/01                |            | 12/31/00
|                                            |                     |                     |            |                        |            |         
|                                            |                     |                     |            |                        |            |          |      | Weighted |      |      |            |           |            | Weighted
|                                            |                     |                     |            |                        |            |          |      | Average  |      |      |            |           |            | Average 
|                                            |                     |                     |            | Amount                 |            | Rate     |      | Amount   |      | Rate
|                                            |                     |                     |            |                        |            |          |      |          |      |     
|                                            |                     |                     |            | (Dollars in thousands)
|Checking accounts:                          |                     |                     |            |                        |            |          |      |          |      |      |            |           |            |          |      |     
|                                            | Interest-bearing    |                     | $          | 4,840,344              |            |          |      | 3.25     | %    |      | $          | 2,547,726 |            |          |      | 2.68 | %   
|                                            | Noninterest-bearing |                     |            | 1,565,337              |            |          |      |         |      |      |            | 1,394,186 |            |          |      |     |     
|Money market and savings accounts           |                     |                     | 6,754,670  |                        |            |          | 2.72 |          |      |      | 5,486,158  |           |            |          | 3.30 |     
|Certificates of deposit                     |                     |                     | 10,328,720 |                        |            |          | 5.10 |          |      |      | 10,177,601 |           |            |          | 5.99 |     
|                                            |                     |                     |            |                        |            |          |      |          |      |      |            |           |            |          |      |     
|                                            |                     | Total deposits, net |            | $                      | 23,489,071 |          |      |          | 3.69 |      |            | $         | 19,605,671 |          |      |      | 4.38 | 
|                                            |                     |                     |            |                        |            |          |      |          |      |      |            |           |            |          |      |     
|Including the effect of interest rate swaps |                     |                     |            |                        |            |          | 3.58 | %        |      |      |            |           |            |          | 4.35 | %   

Investment securities and mortgage-backed securities with a par value of $456.8
million at September 30, 2001 and $594.6 million at December 31, 2000, were
pledged to secure public deposits and for other purposes required or permitted
by law.

Borrowings

At September 30, 2001, borrowings primarily consisted of FHLB advances. These
positions were secured by our investment in the stock of the FHLB, as well as
$12.9 billion in certain real estate loans and $957.6 million in
mortgage-backed securities.

Scheduled maturities over the next three months include $1.2 billion of
long-term, fixed-rate advances at an average interest rate of 4%.

19



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##### Table of Contents



Federal Home Loan Bank Advances(Figure 12)

|           |                                             |                |                     |           |                        |           |          |      |          |      |           |           |           |           |          |      |      |      | 
|---------- | ------------------------------------------- | -------------- | ------------------- | --------- | ---------------------- | --------- | -------- | ---- | -------- | ---- | --------- | --------- | --------- | --------- | -------- | ---- | ---- | ---- | 
|           |                                             |                |                     |           | 9/30/01                |           | 12/31/00
|           |                                             |                |                     |           |                        |           |         
|           |                                             |                |                     |           |                        |           |          |      | Weighted |      |           |           |           |           | Weighted
|           |                                             |                |                     |           |                        |           |          |      | Average  |      |           |           |           |           | Average 
|           |                                             |                |                     |           | Amount                 |           | Rate     |      | Amount   |      | Rate     
|           |                                             |                |                     |           |                        |           |          |      |          |      |          
|           |                                             |                |                     |           | (Dollars in thousands)
|Short-term |                                             | $              | 1,519,873           |           |                        |           | 4.01     | %    |          | $    | 3,410,248 |           |           |           | 6.09     | %   
|Long-term: |                                             |                |                     |           |                        |           |          |      |          |      |           |           |           |           |          |     
|           | Fixed-rate advances                         |                |                     | 7,194,509 |                        |           |          | 5.54 |          |      |           | 5,801,551 |           |           |          | 5.68 |     
|           | Variable-rate advances                      |                |                     | 409,604   |                        |           |          | 3.05 |          |      |           | 424,478   |           |           |          | 6.52 |     
|           |                                             |                |                     |           |                        |           |          |      |          |      |           |           |           |           |          |     
|           |                                             | Total advances |                     |           | 9,123,986              |           |          |      | 5.17     |      |           |           | 9,636,277 |           |          |      | 5.86 |     
|           | Plus unamortized premium on advances        |                |                     | 15,381    |                        |           |          |     |          |      |           |          |           |           |          |     |     
|           |                                             |                |                     |           |                        |           |          |      |          |      |           |           |           |           |          |     
|           |                                             |                | Total advances, net |           | $                      | 9,139,367 |          |      |          | 5.11 |           |           | $         | 9,636,277 |          |      |      | 5.86 | 
|           |                                             |                |                     |           |                        |           |          |      |          |      |           |           |           |           |          |     
|           | Including the effect of interest rate swaps |                |                     |           |                        |           |          | 5.12 | %        |      |           |           |           |           |          | 5.86 | %   

Interest Rate Risk Management

We utilize fixed receipt callable interest rate swaps to convert certain of our
longer term callable certificates of deposit into short-term variable
instruments. Under these agreements we have agreed to receive interest from
the counterparty on a notional amount at a fixed rate defined in the agreement,
and to pay interest at a floating rate indexed to LIBOR.

We utilize variable receipt interest rate swaps to convert certain of our
floating-rate liabilities into fixed-rate instruments. Under these agreements
we have agreed to pay interest to the counterparty on a notional principal
amount at a fixed rate defined in the agreement, and receive interest at a
floating rate indexed to LIBOR. The amounts of interest exchanged are
calculated on the basis of notional principal amounts.

Interest Rate Swaps(Figure 13)

|                                   |      |       |   |                        |           |           |  |          |      |           |  |           |      |          |   |         |           |  |  |      |      |      |  |      |      |     
|---------------------------------- | ---- | ----- | - | ---------------------- | --------- | --------- |  | -------- | ---- | --------- |  | --------- | ---- | -------- | - | ------- | --------- |  |  | ---- | ---- | ---- |  | ---- | ---- | ----
|                                   |      |       |   | 9/30/01                |           | 12/31/00 
|                                   |      |       |   |                        |           |          
|                                   |      |       |   | Notional               |           | Receiving |  | Paying   |      | Notional  |  | Receiving |      | Paying  
|                                   |      |       |   | Principal              |           | Interest  |  | Interest |      | Principal |  | Interest  |      | Interest
|                                   |      |       |   | Amount                 |           | Rate      |  | Rate     |      | Amount    |  | Rate      |      | Rate    
|                                   |      |       |   |                        |           |           |  |          |      |           |  |           |      |         
|                                   |      |       |   | (Dollars in thousands)
|Fixed Payment and Variable
Receipt |      |       |   |                        |           |           |  |          |      |           |  |           |      |          |   |         |           |  |  |      |      |      |  |     
|                                   | 2002 |       | $ | 25,000                 |           |           |  | 3.73     | %    |           |  | 6.44      | %    |          | $ | 25,000  |           |  |  | 6.94 | %    |      |  | 6.44 | %   
|                                   | 2003 |       |   | 409,605                |           |           |  | 3.22     |      |           |  | 3.55      |      |          |   |        |           |  |  |     |      |      |  |     |     
|                                   |      |       |   |                        |           |           |  |          |      |           |  |           |      |          |   |         |           |  |  |      |      |      |  |     
|                                   |      | Total |   | $                      | 434,605   |           |  |          | 3.25 | %(1)      |  |           | 3.71 | %        |   | $       | 25,000    |  |  |      | 6.94 | %(1) |  |      | 6.44 | %   
|                                   |      |       |   |                        |           |           |  |          |      |           |  |           |      |          |   |         |           |  |  |      |      |      |  |     
|Variable Payment and Fixed
Receipt |      |       |   |                        |           |           |  |          |      |           |  |           |      |          |   |         |           |  |  |      |      |      |  |     
|                                   | 2001 |       | $ |                       |           |           |  |         | %    |           |  |          | %    |          | $ | 420,000 |           |  |  | 6.38 | %    |      |  | 6.73 | %   
|                                   | 2002 |       |   |                       |           |           |  |         |      |           |  |          |      |          |   | 155,000 |           |  |  | 7.03 |      |      |  | 6.73 |     
|                                   | 2003 |       |   | 320,000                |           |           |  | 4.69     |      |           |  | 3.44      |      |          |   | 120,000 |           |  |  | 6.14 |      |      |  | 6.68 |     
|                                   | 2004 |       |   |                       |           |           |  |         |      |           |  |          |      |          |   | 478,000 |           |  |  | 6.84 |      |      |  | 6.75 |     
|                                   | 2005 |       |   | 20,000                 |           |           |  | 7.41     |      |           |  | 3.71      |      |          |   | 445,000 |           |  |  | 7.89 |      |      |  | 6.68 |     
|                                   | 2006 |       |   | 825,000                |           |           |  | 5.92     |      |           |  | 3.41      |      |          |   | 70,000  |           |  |  | 7.07 |      |      |  | 6.59 |     
|                                   | 2007 |       |   | 10,000                 |           |           |  | 7.25     |      |           |  | 3.70      |      |          |   | 10,000  |           |  |  | 7.25 |      |      |  | 6.71 |     
|                                   | 2009 |       |   |                       |           |           |  |         |      |           |  |          |      |          |   | 65,000  |           |  |  | 7.32 |      |      |  | 6.53 |     
|                                   | 2010 |       |   | 10,000                 |           |           |  | 7.40     |      |           |  | 3.41      |      |          |   | 10,000  |           |  |  | 7.50 |      |      |  | 6.65 |     
|                                   | 2011 |       |   | 45,000                 |           |           |  | 6.33     |      |           |  | 3.27      |      |          |   |        |           |  |  |     |      |      |  |     |     
|                                   |      |       |   |                        |           |           |  |          |      |           |  |           |      |          |   |         |           |  |  |      |      |      |  |     
|                                   |      | Total |   | $                      | 1,230,000 |           |  |          | 5.66 | %         |  |           | 3.42 | %(1)     |   | $       | 1,773,000 |  |  |      | 7.00 | %    |  |      | 6.71 | %(1)
|                                   |      |       |   |                        |           |           |  |          |      |           |  |           |      |          |   |         |           |  |  |      |      |      |  |     



---

|(1) |  | Rates are based upon LIBOR.
|--- |  | ---------------------------

20



---



##### Table of Contents



Interest rate risk management instruments reduced interest expense as follows:

Net Benefit of Interest Risk Management(Figure 14)

|                           |               |                   |   |                        |        |                   |   |         |        |         |   |         |         |   |   |        |        |  
|-------------------------- | ------------- | ----------------- | - | ---------------------- | ------ | ----------------- | - | ------- | ------ | ------- | - | ------- | ------- | - | - | ------ | ------ | -
|                           |               |                   |   | Three months ended     |        | Nine months ended
|                           |               |                   |   |                        |        |                  
|                           |               |                   |   | 9/30/01                |        | 9/30/00           |   | 9/30/01 |        | 9/30/00
|                           |               |                   |   |                        |        |                   |   |         |        |        
|                           |               |                   |   | (Dollars in thousands)
|Interest expense (income): |               |                   |   |                        |        |                   |   |         |        |         |   |         |         |   |   |       
|                           | Deposits      |                   | $ | (5,633                 | )      |                   | $ | (1,548  | )      |         | $ | (13,641 | )       |   | $ | (7,220 | )     
|                           | FHLB advances |                   |   | 42                     |        |                   |   |        |        |         |   | 42      |         |   |   |       |       
|                           |               |                   |   |                        |        |                   |   |         |        |         |   |         |         |   |   |       
|                           |               | Total net benefit |   | $                      | (5,591 | )                 |   | $       | (1,548 | )       |   | $       | (13,599 | ) |   | $      | (7,220 | )
|                           |               |                   |   |                        |        |                   |   |         |        |         |   |         |         |   |   |       

Liquidity

We anticipate that we will have sufficient funds available to meet our
commitments. At September 30, 2001, we had outstanding commitments to
originate loans and leases of $1.6 billion, unfunded consumer lines of credit
totaling $3.6 billion and unfunded corporate banking lines of credit totaling
$206 million. We do not expect all of these lines to be used by the borrowers.
Outstanding letters of credit totaled $103.2 million as of September 30, 2001.
Certificates of deposit scheduled to mature in one year or less at September
30, 2001 totaled $8.8 billion. We believe that a significant portion of the
amounts maturing will remain with us because they are retail deposits. We
believe we have significant borrowing capacity with the FHLB and investment
banking firms to meet any need for additional borrowings and sources of funds.

Capital and Dividends

On July 18, 2000, the Board of Directors of Charter One authorized management
to repurchase up to 10% of the Companys outstanding common stock in a program
of open market purchases or privately negotiated transactions. As of September
30, 2001, we had purchased 9.1 million shares authorized under this program for
a total cost of $227.1 million. The repurchased shares were reissued in
connection with employee benefit plans and the 5% stock dividend issued
September 28, 2001.

On September 12, 2001, the Company entered into an agreement with a third party
that provides the Company with an option to purchase up to $100 million of
Charter One common stock through the use of forward transactions. These
transactions can be settled no later than January 8, 2002, at Charter Ones
election, on a physical, net cash or net share basis. In the case of net cash
or net share settlement, the amount at which these forward purchases can be
settled depends principally upon the future market price of Charter Ones
common stock as compared with the forward purchase price per share and the
number of shares to be settled. As of November 5, 2001, the Company had
entered into transactions involving 2.1 million shares at a cost of $57.9
million for settlement in January 2002. These transactions have not been
reflected as a reduction in common shares or shareholders equity.

As a financial holding company, Charter One is subject to regulation by the
Federal Reserve Board (FRB) under the Bank Holding Company Act of 1956 as
amended, and the regulations of the FRB, including various capital
requirements. Charter One Commercial and Charter One Bank, F.S.B. are subject
to various regulatory capital requirements administered by the Federal Deposit
Insurance Corporation (FDIC) and the Office of Thrift Supervision,
respectively. Failure to meet minimum capital requirements can initiate
certain mandatory, and possibly discretionary, actions by each regulator that,
if undertaken, could have a direct material effect on our financial statements.
Under capital adequacy guidelines and the regulatory framework for prompt
corrective action, specific capital guidelines must be met that involve
quantitative measures of assets, liabilities, and certain off-balance-sheet
items as calculated under regulatory accounting practices. The institutions
capital classification is also subject to qualitative judgments by the
regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy
require Charter One and Charter One Commercial to individually maintain minimum
amounts and ratios (set forth in the table below) of total and tier 1 capital
to risk-weighted assets, and of tier 1 capital to average assets. Charter One
Bank, F.S.B. is required to maintain minimum amounts and ratios (also set forth
in the table below) of total and tier 1 capital to risk-weighted assets, of
core capital to adjusted tangible assets, and of tangible capital to tangible
assets. The actual regulatory capital ratios calculated for Charter One,
Charter One Commercial and Charter One Bank, F.S.B., along with the capital
amounts and ratios for capital adequacy purposes and the amounts required to be
categorized as well capitalized under the regulatory framework for prompt
corrective action are as follows:

21



---



##### Table of Contents



Regulatory Capital(Figure 15)

|                          |                                          |  |                        |           |                   |  |                   |       |       |  |             |           |                         |  |  |       |   |  |                          |           |  |  |  |        |  
|------------------------- | ---------------------------------------- |  | ---------------------- | --------- | ----------------- |  | ----------------- | ----- | ----- |  | ----------- | --------- | ----------------------- |  |  | ----- | - |  | ------------------------ | --------- |  |  |  | ------ | -
|                          |                                          |  | 9/30/01               
|                          |                                          |  |                       
|                          |                                          |  |                        |           |                   |  |                   |       |       |  |             |           |                         |  |  |       |   |  | To Be "Well Capitalized"
|                          |                                          |  |                        |           |                   |  |                   |       |       |  | For Capital |           | Under Prompt Corrective
|                          |                                          |  | Actual                 |           | Adequacy Purposes |  | Action Provisions
|                          |                                          |  |                        |           |                   |  |                  
|                          |                                          |  | Amount                 |           | Ratio             |  | Amount            |       | Ratio |  | Amount      |           | Ratio                  
|                          |                                          |  |                        |           |                   |  |                   |       |       |  |             |           |                        
|                          |                                          |  | (Dollars in thousands)
|Charter One:              |                                          |  |                        |           |                   |  |                   |       |       |  |             |           |                         |  |  |       |   |  |                          |           |  |  |  |       
|                          | Total capital to risk-weighted assets    |  | $                      | 2,728,380 |                   |  |                   | 10.28 | %     |  | $           | 2,124,275 |                         |  |  | >8.00 | % |  | $                        | 2,655,343 |  |  |  | >10.00 | %
|                          | Tier 1 capital to risk-weighted assets   |  |                        | 2,492,775 |                   |  |                   | 9.39  |       |  |             | 1,062,137 |                         |  |  | >4.00 |   |  |                          | 1,593,206 |  |  |  | >6.00  |  
|                          | Tier 1 capital to average assets         |  |                        | 2,492,775 |                   |  |                   | 6.90  |       |  |             | 1,445,398 |                         |  |  | >4.00 |   |  |                          | 1,806,747 |  |  |  | >5.00  |  
|Charter One Commercial:   |                                          |  |                        |           |                   |  |                   |       |       |  |             |           |                         |  |  |       |   |  |                          |           |  |  |  |       
|                          | Total capital to risk-weighted assets    |  |                        | 38,795    |                   |  |                   | 50.54 |       |  |             | 6,141     |                         |  |  | >8.00 |   |  |                          | 7,677     |  |  |  | >10.00 |  
|                          | Tier 1 capital to risk-weighted assets   |  |                        | 38,795    |                   |  |                   | 50.54 |       |  |             | 3,071     |                         |  |  | >4.00 |   |  |                          | 4,606     |  |  |  | >6.00  |  
|                          | Tier 1 capital to average assets         |  |                        | 38,795    |                   |  |                   | 15.15 |       |  |             | 10,246    |                         |  |  | >4.00 |   |  |                          | 12,808    |  |  |  | >5.00  |  
|Charter One Bank, F.S.B.: |                                          |  |                        |           |                   |  |                   |       |       |  |             |           |                         |  |  |       |   |  |                          |           |  |  |  |       
|                          | Total capital to risk-weighted assets    |  |                        | 2,710,855 |                   |  |                   | 10.45 |       |  |             | 2,074,997 |                         |  |  | >8.00 |   |  |                          | 2,593,746 |  |  |  | >10.00 |  
|                          | Tier 1 capital to risk-weighted assets   |  |                        | 1,972,088 |                   |  |                   | 7.60  |       |  |             | N/A       |                         |  |  | N/A   |   |  |                          | 1,556,248 |  |  |  | >6.00  |  
|                          | Core capital to adjusted tangible assets |  |                        | 1,992,753 |                   |  |                   | 5.43  |       |  |             | 1,466,980 |                         |  |  | >4.00 |   |  |                          | 1,833,725 |  |  |  | >5.00  |  
|                          | Tangible capital to tangible assets      |  |                        | 1,992,753 |                   |  |                   | 5.43  |       |  |             | 550,118   |                         |  |  | >1.50 |   |  |                          | N/A       |  |  |  | N/A    |  

|                          |                                          |  |          |           |                   |  |                   |       |       |  |                        |           |                         |  |  |       |   |  |                          |           |  |  |  |        |  
|------------------------- | ---------------------------------------- |  | -------- | --------- | ----------------- |  | ----------------- | ----- | ----- |  | ---------------------- | --------- | ----------------------- |  |  | ----- | - |  | ------------------------ | --------- |  |  |  | ------ | -
|                          |                                          |  | 12/31/00
|                          |                                          |  |         
|                          |                                          |  |          |           |                   |  |                   |       |       |  |                        |           |                         |  |  |       |   |  | To Be "Well Capitalized"
|                          |                                          |  |          |           |                   |  |                   |       |       |  | For Capital            |           | Under Prompt Corrective
|                          |                                          |  | Actual   |           | Adequacy Purposes |  | Action Provisions
|                          |                                          |  |          |           |                   |  |                  
|                          |                                          |  | Amount   |           | Ratio             |  | Amount            |       | Ratio |  | Amount                 |           | Ratio                  
|                          |                                          |  |          |           |                   |  |                   |       |       |  |                        |           |                        
|                          |                                          |  |          |           |                   |  |                   |       |       |  | (Dollars in thousands) |           |                         |  |  |       |   |  |                         
|Charter One:              |                                          |  |          |           |                   |  |                   |       |       |  |                        |           |                         |  |  |       |   |  |                          |           |  |  |  |       
|                          | Total capital to risk-weighted assets    |  | $        | 2,448,962 |                   |  |                   | 10.29 | %     |  | $                      | 1,904,468 |                         |  |  | >8.00 | % |  | $                        | 2,380,585 |  |  |  | >10.00 | %
|                          | Tier 1 capital to risk-weighted assets   |  |          | 2,259,030 |                   |  |                   | 9.49  |       |  |                        | 952,234   |                         |  |  | >4.00 |   |  |                          | 1,428,351 |  |  |  | >6.00  |  
|                          | Tier 1 capital to average assets         |  |          | 2,259,030 |                   |  |                   | 6.89  |       |  |                        | 1,310,915 |                         |  |  | >4.00 |   |  |                          | 1,638,643 |  |  |  | >5.00  |  
|Charter One Commercial:   |                                          |  |          |           |                   |  |                   |       |       |  |                        |           |                         |  |  |       |   |  |                          |           |  |  |  |       
|                          | Total capital to risk-weighted assets    |  |          | 30,213    |                   |  |                   | 30.56 |       |  |                        | 7,910     |                         |  |  | >8.00 |   |  |                          | 9,887     |  |  |  | >10.00 |  
|                          | Tier 1 capital to risk-weighted assets   |  |          | 30,213    |                   |  |                   | 30.56 |       |  |                        | 3,955     |                         |  |  | >4.00 |   |  |                          | 5,932     |  |  |  | >6.00  |  
|                          | Tier 1 capital to average assets         |  |          | 30,213    |                   |  |                   | 8.67  |       |  |                        | 13,941    |                         |  |  | >4.00 |   |  |                          | 17,427    |  |  |  | >5.00  |  
|Charter One Bank, F.S.B.: |                                          |  |          |           |                   |  |                   |       |       |  |                        |           |                         |  |  |       |   |  |                          |           |  |  |  |       
|                          | Total capital to risk-weighted assets    |  |          | 2,376,443 |                   |  |                   | 10.23 |       |  |                        | 1,858,583 |                         |  |  | >8.00 |   |  |                          | 2,323,229 |  |  |  | >10.00 |  
|                          | Tier 1 capital to risk-weighted assets   |  |          | 1,673,360 |                   |  |                   | 7.20  |       |  |                        | N/A       |                         |  |  | N/A   |   |  |                          | 1,393,938 |  |  |  | >6.00  |  
|                          | Core capital to adjusted tangible assets |  |          | 1,687,568 |                   |  |                   | 5.15  |       |  |                        | 1,310,207 |                         |  |  | >4.00 |   |  |                          | 1,637,759 |  |  |  | >5.00  |  
|                          | Tangible capital to tangible assets      |  |          | 1,687,300 |                   |  |                   | 5.15  |       |  |                        | 491,324   |                         |  |  | >1.50 |   |  |                          | N/A       |  |  |  | N/A    |  

Management believes that, as of September 30, 2001, Charter One, Charter One
Commercial and Charter One Bank, F.S.B. individually met the capital adequacy
requirements to which they were subject. Events beyond managements control,
such as fluctuations in interest rates or a downturn in the economy in areas in
which the institutions loans and securities are concentrated could adversely
affect future earnings and, consequently, the institutions ability to meet its
future capital requirements.

Quarterly Stock Prices and Dividends(Figure 16)

|                                 |       |  |                    |       |         |  |         |       |          |  |         |       |  |  |     |       |  |  |     |       | 
|-------------------------------- | ----- |  | ------------------ | ----- | ------- |  | ------- | ----- | -------- |  | ------- | ----- |  |  | --- | ----- |  |  | --- | ----- | 
|                                 |       |  | Three Months Ended
|                                 |       |  |                   
|                                 |       |  | 9/30/01            |       | 6/30/01 |  | 3/31/01 |       | 12/31/00 |  | 9/30/00
|                                 |       |  |                    |       |         |  |         |       |          |  |        
|Market price of common stock(1): |       |  |                    |       |         |  |         |       |          |  |         |       |  |  |     |       |  |  |     |      
|                                 | High  |  | $                  | 31.41 |         |  | $       | 30.38 |          |  | $       | 28.56 |  |  | $   | 28.57 |  |  | $   | 23.93 | 
|                                 | Low   |  |                    | 23.40 |         |  |         | 25.23 |          |  |         | 24.19 |  |  |     | 18.93 |  |  |     | 20.06 | 
|                                 | Close |  |                    | 28.22 |         |  |         | 30.38 |          |  |         | 26.95 |  |  |     | 27.50 |  |  |     | 23.22 | 
|Dividends declared and paid(1)   |       |  | .19                |       |         |  | .19     |       |          |  | .17     |       |  |  | .17 |       |  |  | .16 |      



---

|(1) |  | Restated to reflect the 5% stock dividend issued September 28, 2001.
|--- |  | --------------------------------------------------------------------

22



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##### Table of Contents






ITEM 3. Quantitative and Qualitative Disclosure About Market Risk

A comprehensive qualitative and quantitative analysis regarding market risk was
disclosed in our December 31, 2000 Form 10-K. The assumptions used in our
model were updated as of June 30, 2001, and the results disclosed in our Form
10-Q for the quarterly period ended June 30, 2001. No material changes in the
assumptions used or results obtained from the model have occurred since June
30, 2001.

Actual results will differ from simulated results due to timing, magnitude, and
frequency of interest rate changes, as well as changes in market conditions and
management strategies.

PART II  OTHER INFORMATION




ITEM 5. Other Information

Cash Dividend On October 24, 2001, the Companys Board of Directors declared
a regular quarterly cash dividend of $.20 per share. The cash dividend is
payable November 20, 2001 to shareholders of record on November 6, 2001.

Acquisition On October 31, 2001, the Company announced that its principal
subsidiary, Charter One Bank, F.S.B., will acquire the branches and retail
deposits of Superior Federal Bank, F.S.B. Illinois-based Superior Federal Bank,
F.S.B. was the conservatorship established by the FDIC after Superior Bank,
F.S.B. was closed on July 27, 2001. Superior Federal has 17 branches and $1.1
billion in deposits.

In its agreement with the FDIC, Charter One will pay $52.4 million in cash for
the franchise, or $34.0 million after tax, equivalent to an after-tax deposit
premium of just over 3%. Former Superior savings customers will be able to bank
at Charter One branches and ATMs by the first quarter of 2002.

In addition to assuming all the deposits, Charter One is acquiring
approximately $45 million of Superiors assets. These assets consist mainly of
home equity lines of credit, overdrafts assigned to each branch location, cash
and cash equivalents. Alliance Funding, which held the mortgage origination and
loan servicing operations of the former Superior Bank, is not included in the
transaction.




ITEM 6. Exhibits and Reports on Form 8-K

|    |  |                                                                                                                                                                                                                                                                                                          
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Exhibits: The index of exhibits has been filed as separate pages of our
Form 10-Q for the quarterly period ended September 30, 2001, and is
available to shareholders on request from the Companys Investor Relations
Department. Copies of the exhibits may be obtained at a cost of 30 cents
per page.
|   
|(b) |  | Reports on Form 8-K: None                                                                                                                                                                                                                                                                                




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|      |  |                   |  |                                                                                                                                             
|----- |  | ----------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------
|      |  |                   |  | CHARTER ONE FINANCIAL, INC.                                                                                                                 
|     
|Date: |  | November 14, 2001 |  | /s/ Richard W. Neu                                                                                                                          
|     
|      |  |                   |  | Richard W. Neu
Executive Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal
Financial and Accounting Officer)

23



---



##### Table of Contents



INDEX TO EXHIBITS

|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT |  |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|NUMBER  |  | DESCRIPTION                                                                                                                                                                                                                                                                                                                                                                                                                       
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       
|3.1     |  | Registrants Second Restated Certificate of Incorporation, as amended
and currently in effect, filed as Exhibit 3.1 to Registrants Report on
Form 10-K for the fiscal year ended December 31, 2000 (File No.
001-15495), is incorporated herein by reference.                                                                                                                                                                    
|       
|3.2     |  | Registrants Bylaws, as amended and restated and currently in effect,
filed as Exhibit 3.2 to Registrants Report on Form 10-K for the fiscal
year ended December 31, 1999 (File No. 0-16311), is incorporated herein
by reference.                                                                                                                                                                                               
|       
|4.1     |  | Form of Certificate of Common Stock, as currently in effect, filed as
Exhibit 4.1 to Registrants Report on Form 10-K for the fiscal year
ended December 31, 2000 (File No. 001-15495), is incorporated herein by
reference.                                                                                                                                                                                                      
|       
|4.2     |  | Amended and Restated Stockholder Protection Rights Agreement, dated
October 20, 1999, between the Company and Fleet National Bank (f/k/a
BankBoston, N.A.), as rights agent, filed as Exhibit 2 to the Companys
Registration Statement on Form 8-A/A filed on October 28, 1999 (File
No. 0-16311), is incorporated herein by reference.                                                                                          
|       
|10.1    |  | Registrants Long-Term Stock Incentive Plan, filed on January 22, 1988
as Exhibit 10.1 to Registrants Registration Statement on Form S-1
(File No. 33-16207), is incorporated herein by reference.                                                                                                                                                                                                                               
|       
|10.2    |  | Registrants Directors Stock Option Plan, filed on January 22, 1988 as
Exhibit 10.2 to Registrants Registration Statement on Form S-1 (File
No. 33-16207), is incorporated herein by reference.                                                                                                                                                                                                                                 
|       
|10.3    |  | Charter One Bank, F.S.B. Executive Incentive Goal Achievement Plan,
filed as Exhibit 10.8 to Registrants Report on Form 10-K for the
fiscal year ended December 31, 1994 (File No. 0-16311), is incorporated
herein by reference.                                                                                                                                                                                                
|       
|10.4    |  | First American Savings Bank, F.S.B. Nonqualified Retirement Plan and
First Amendment thereto, filed as Exhibit 10.17 to Registrants Report
on Form 10-K for the fiscal year ended December 31, 1993 (File No.
0-16311), are incorporated herein by reference.                                                                                                                                                                    
|       
|10.5    |  | FirstFed Michigan Corporation 1983 Stock Option Plan, filed on November
1, 1995 as an exhibit to Registrants Registration Statement on Form
S-8 (File No. 33-61273), is incorporated herein by reference.                                                                                                                                                                                                                        
|       
|10.6    |  | FirstFed Michigan Corporation 1991 Stock Option Plan, filed on November
1, 1995 as an exhibit to Registrants Registration Statement on Form
S-8 (File No. 33-61273), is incorporated herein by reference.                                                                                                                                                                                                                        
|       
|10.7    |  | Amendment 1, dated May 3, 1996, to Forms of Supplemental Retirement
Agreements, dated October 31, 1995, between Charter One and Charles
John Koch, Richard W. Neu, John David Koch, Mark D. Grossi, and Robert
J. Vana are filed herein. The Agreements, originally filed on July 25,
1995 as Exhibits 10.4 and 10.5 to Registrants Registration Statement
on Form S-4 (File No. 33-61273), are incorporated herein by reference.
|       
|10.8    |  | Amended and Restated Employment Agreements, effective August 1, 1999,
between Charter One Financial, Inc. and Charles John Koch, Richard W.
Neu, John D. Koch, Mark D. Grossi, and Robert J. Vana filed as Exhibit
10.8 to Registrants Report on Form 10-K for the fiscal year ended
December 31, 1999 (File No. 0-16311), is incorporated herein by
reference.                                                                  
|       
|10.9    |  | Form of Employment Agreement between Charter One and Leonard S. Simon,
filed on August 8, 1997 as Exhibit 10.14 to Registrants Registration
Statement on Form S-4 (File No. 333-33259), is incorporated herein by
reference.                                                                                                                                                                                                     
|       
|10.10   |  | Charter One Financial, Inc. 1997 Stock Option and Incentive Plan, filed
on December 19, 1997, as an exhibit to Registrants Registration
Statement on Form S-8 (File No. 333-42823), is incorporated herein by
reference.                                                                                                                                                                                                         

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|      |  |                                                                                                                                                                                                                                                                                               
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.11 |  | 1986 Stock Option Plan of RCSB Financial, Inc., filed on October 8,
1997, as an exhibit to Post-Effective Amendment Number One on Form S-8
to Form S-4 (File No. 333-33259), is incorporated herein by reference.                                                                             
|     
|10.12 |  | 1992 Stock-Based Compensation Plan of RCSB Financial, Inc., filed on
October 8, 1997, as an exhibit to Post-Effective Amendment Number One
on Form S-8 to Form S-4 (File No. 333-33259), is incorporated herein by
reference.                                                                 
|     
|10.13 |  | Home Federal Savings Bank Stock Compensation Program, filed on
September 29, 1997 as an exhibit to Post-Effective Amendment Number One
on Form S-8 to Form S-4 (File No. 333-33169), is incorporated herein by
reference.                                                                     
|     
|10.14 |  | Haverfield 1995 Stock Option Plan, filed on September 29, 1997 as an
exhibit to Post-Effective Amendment Number One on Form S-8 to Form S-4
(File No. 333-33169), is incorporated herein by reference.                                                                                        
|     
|10.15 |  | The RCSB Financial, Inc. Non-Employee Director Deferred Compensation
Plan, as amended and restated on December 1, 1998, filed as Exhibit
10.16 to Registrants Annual Report on Form 10-K for the fiscal year
ended December 31, 1998 (File No. 0-16311), is incorporated herein by
reference.
|     
|10.16 |  | ALBANK Financial Corporation 1992 Stock Incentive Plan for Key
Employees, as amended and restated as of December 18, 1995, filed as
Exhibit 10.11 to ALBANKs Annual Report on Form 10-K for the year ended
December 31, 1995 (File No. 0-19843), is incorporated herein by
reference.        
|     
|10.17 |  | ALBANK Financial Corporation 1995 Stock Incentive Plan for Outside
Directors, filed as Exhibit 10.12.1 to ALBANKs Annual Report on Form
10-K for the year ended December 31, 1995 (File No. 0-19843), is
incorporated herein by reference.                                                   
|     
|10.18 |  | ALBANK Financial Corporation 1992 Stock Incentive Plan for Outside
Directors, filed as an appendix to the Proxy Statement for the 1992
Annual Meeting of the Stockholders of ALBANK held on October 26, 1992,
is incorporated herein by reference.                                            
|     
|10.19 |  | Employment Agreement, dated November 30, 1998, between Charter One
Financial, Inc. and Herbert G. Chorbajian, filed as Exhibit 10.20 to
Registrants Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 (File No. 0-16311), is incorporated herein by
reference.          
|     
|10.20 |  | Charter One Financial, Inc. Top Executive Incentive Goal Achievement
Plan, filed on October 1, 1998 as Annex E to the Prospectus contained
in the Registrants Registration Statement on Form S-4 (File No.
333-65137), is incorporated herein by reference.                                  
|     
|10.21 |  | 1997 Long-Term Incentive Stock Benefit Plan of Alliance Bancorp, filed
on July 27, 2001, as an exhibit to Post-Effective Amendment Number One
on Form S-8 to Form S-4 (File No. 333-57196), is incorporated herein by
reference.                                                              
|     
|10.22 |  | 1994 Incentive Stock Option Plan of Hinsdale Financial Corporation,
filed on July 27, 2001, as an exhibit to Post-Effective Amendment
Number One on Form S-8 to Form S-4 (File No. 333-57196), is
incorporated herein by reference.                                                           
|     
|10.23 |  | 1992 Stock Option Plan for Outside Directors of Hinsdale Financial
Corporation, filed on July 27, 2001, as an exhibit to Post-Effective
Amendment Number One on Form S-8 to Form S-4 (File No. 333-57196), is
incorporated herein by reference.                                               
|     
|10.24 |  | 1992 Incentive Stock Option Plan of Hinsdale Financial Corporation,
filed on July 27, 2001, as an exhibit to Post-Effective Amendment
Number One on Form S-8 to Form S-4 (File No. 333-57196), is
incorporated herein by reference.                                                           
|     
|10.25 |  | 1991 Incentive Stock Option Plan of Liberty Bancorp, Inc., as amended
and restated, filed on July                                                                                                                                                                                             

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|   |  |                                                                                                                                                  
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------
|   |  | 27, 2001, as an exhibit to Post-Effective Amendment Number One on Form
S-8 to Form S-4 (File No. 333-57196), is incorporated herein by
reference.
|  
|11 |  | Statement Regarding Computation of Per Share Earnings                                                                                            

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