##### 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 March 31, 2002

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 |  | (I.R.S. Employer   
|or organization)                              |  | Identification No.)

|                                         |  |           
|---------------------------------------- |  | ----------
|1215 Superior Avenue, Cleveland, Ohio    |  | 44114     
|                                         |  |           
|(Address of principal executive offices) |  | (Zip Code)



(216) 566-5300




NOT APPLICABLE


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 April 30, 2002 was 220,365,551.





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TABLE OF CONTENTS



|                                                  |                                                                                               |                                                |  |  |  |  |  | 
|------------------------------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION                   
|                                                  | 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                            
|PART II  OTHER INFORMATION                      
|                                                  | ITEM 5. Other Information                                                                    
|                                                  | ITEM 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                       
|INDEX TO EXHIBITS                                
|EX-11 Statement of Computation/Per Share Earnings



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##### Table of Contents



|           |  |                                                                                       |                      |                               |    |                                                                                       |  |  |   | 
|---------- |  | ------------------------------------------------------------------------------------- | -------------------- | ----------------------------- | -- | ------------------------------------------------------------------------------------- |  |  | - | 
|Item      
|Number     |  |                                                                                       |                      | Page                         
|           |  |                                                                                       |                      |                              
|           |  |                                                                                       |                      | PART I  FINANCIAL STATEMENTS
|          
|          
|          
|          
|          
|1.         |  |                                                                                       | Financial Statements
|          
|          
|          
|          
|           |  |                                                                                       |                      |                               |    | Consolidated Statements of Financial Condition 
March 31, 2002 and December 31, 2001 |  |  | 1 | 
|          
|          
|          
|          
|           |  |                                                                                       |                      |                               |    | Consolidated Statements of Income 
Three months ended March 31, 2002 and 2001        |  |  | 2 | 
|          
|          
|          
|          
|           |  |                                                                                       |                      |                               |    | Consolidated Statements of Cash Flows 
Three months ended March 31, 2002 and 2001    |  |  | 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                             |                      |                               | 19 |                                                                                      
|          
|          
|          
|          
|          
|           |  |                                                                                       |                      |                               |    | PART II  OTHER INFORMATION                                                          
|          
|          
|          
|          
|          
|5.         |  | Other Information                                                                     |                      |                               | 19 |                                                                                      
|          
|          
|          
|          
|6.         |  | Exhibits and Reports on Form 8-K                                                      |                      |                               | 19 |                                                                                      
|          
|          
|          
|          
|Signatures |  |                                                                                       | 20                   |                              





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##### Table of Contents






PART I  FINANCIAL INFORMATION




ITEM 1. Financial Statements

CHARTER ONE FINANCIAL, INC. AND SUBSIDIARIES




|                                                      |                                                                                                                   |                                 |                                            |           |                        |            |            |           |            |            | 
|----------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------- | ------------------------------- | ------------------------------------------ | --------- | ---------------------- | ---------- | ---------- | --------- | ---------- | ---------- | 
|                                                      |                                                                                                                   |                                 |                                            |           | 3/31/02                |            | 12/31/01  
|                                                      |                                                                                                                   |                                 |                                            |           |                        |            |           
|                                                      |                                                                                                                   |                                 |                                            |           | (Dollars in thousands,
|                                                      |                                                                                                                   |                                 |                                            |           | except per share data)
|ASSETS                                                |                                                                                                                   |                                 |                                            |           |                        |            |            |          
|Cash accounts                                         |                                                                                                                   | $                               | 527,798                                    |           |                        | $          | 472,658    |          
|Interest-bearing deposits with banks                  |                                                                                                                   |                                 | 12,048                                     |           |                        |            | 8,355      |          
|Federal funds sold and other                          |                                                                                                                   |                                 | 815,509                                    |           |                        |            | 35,507     |          
|                                                      |                                                                                                                   |                                 |                                            |           |                        |            |            |          
|                                                      |                                                                                                                   | Total cash and cash equivalents |                                            |           | 1,355,355              |            |            |           | 516,520    |           
|Investment securities:                                |                                                                                                                   |                                 |                                            |           |                        |            |            |          
|                                                      | Available for sale                                                                                                |                                 |                                            | 133,509   |                        |            |            | 129,312   |           
|                                                      | Held to maturity (fair value of $5,221 and $6,467)                                                                |                                 |                                            | 5,043     |                        |            |            | 6,274     |           
|Mortgage-backed securities:                           |                                                                                                                   |                                 |                                            |           |                        |            |            |          
|                                                      | Available for sale                                                                                                |                                 |                                            | 8,067,946 |                        |            |            | 8,030,512 |           
|                                                      | Held to maturity (fair value of $863,213 and $1,022,658)                                                          |                                 |                                            | 830,032   |                        |            |            | 983,904   |           
|Loans and leases, net                                 |                                                                                                                   |                                 | 24,355,261                                 |           |                        |            | 25,396,071 |          
|Loans held for sale                                   |                                                                                                                   |                                 | 160,805                                    |           |                        |            | 332,629    |          
|Bank owned life insurance                             |                                                                                                                   |                                 | 809,356                                    |           |                        |            | 808,231    |          
|Federal Home Loan Bank stock                          |                                                                                                                   |                                 | 618,969                                    |           |                        |            | 617,836    |          
|Premises and equipment                                |                                                                                                                   |                                 | 357,915                                    |           |                        |            | 352,235    |          
|Accrued interest receivable                           |                                                                                                                   |                                 | 155,479                                    |           |                        |            | 162,065    |          
|Real estate and other collateral owned                |                                                                                                                   |                                 | 57,417                                     |           |                        |            | 54,351     |          
|Loan servicing assets                                 |                                                                                                                   |                                 | 164,789                                    |           |                        |            | 139,840    |          
|Goodwill                                              |                                                                                                                   |                                 | 347,142                                    |           |                        |            | 350,839    |          
|Other assets                                          |                                                                                                                   |                                 | 285,366                                    |           |                        |            | 293,897    |          
|                                                      |                                                                                                                   |                                 |                                            |           |                        |            |            |          
|                                                      |                                                                                                                   | Total assets                    |                                            | $         | 37,704,384             |            |            | $         | 38,174,516 |           
|                                                      |                                                                                                                   |                                 |                                            |           |                        |            |            |          
|LIABILITIES AND SHAREHOLDERS EQUITY                  |                                                                                                                   |                                 |                                            |           |                        |            |            |          
|
|Deposits                                              |                                                                                                                   | $                               | 25,636,732                                 |           |                        | $          | 25,123,309 |          
|Federal Home Loan Bank advances                       |                                                                                                                   |                                 | 7,830,065                                  |           |                        |            | 8,657,238  |          
|Federal funds purchased and repurchase agreements     |                                                                                                                   |                                 | 57,228                                     |           |                        |            | 203,259    |          
|Other borrowings                                      |                                                                                                                   |                                 | 325,505                                    |           |                        |            | 304,410    |          
|Advance payments by borrowers for taxes and insurance |                                                                                                                   |                                 | 44,693                                     |           |                        |            | 54,103     |          
|Accrued interest payable                              |                                                                                                                   |                                 | 59,813                                     |           |                        |            | 57,704     |          
|Accrued expenses and other liabilities                |                                                                                                                   |                                 | 893,090                                    |           |                        |            | 845,993    |          
|                                                      |                                                                                                                   |                                 |                                            |           |                        |            |            |          
|                                                      |                                                                                                                   | Total liabilities               |                                            |           | 34,847,126             |            |            |           | 35,246,016 |           
|                                                      |                                                                                                                   |                                 |                                            |           |                        |            |            |          
|Commitments and contingencies                         |                                                                                                                   |                                 |                                           |           |                        |            |           |          
|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; 224,854,600 and 224,855,827 shares issued |                                 |                                            | 2,249     |                        |            |            | 2,249     |           
|                                                      | Additional paid-in capital                                                                                        |                                 |                                            | 2,097,473 |                        |            |            | 2,091,767 |           
|                                                      | Retained earnings                                                                                                 |                                 |                                            | 890,539   |                        |            |            | 811,093   |           
|                                                      | Less 4,836,968 and 516,082 shares of common stock held in treasury at cost                                        |                                 |                                            | (136,429  | )                      |            |            | (14,586   | )         
|                                                      | Accumulated other comprehensive income                                                                            |                                 |                                            | 3,426     |                        |            |            | 37,977    |           
|                                                      |                                                                                                                   |                                 |                                            |           |                        |            |            |          
|                                                      |                                                                                                                   |                                 | Total shareholders equity                 |           |                        | 2,857,258  |            |           |            | 2,928,500  | 
|                                                      |                                                                                                                   |                                 |                                            |           |                        |            |            |          
|                                                      |                                                                                                                   |                                 | Total liabilities and shareholders equity |           | $                      | 37,704,384 |            |           | $          | 38,174,516 | 
|                                                      |                                                                                                                   |                                 |                                            |           |                        |            |            |          

See Notes to Consolidated Financial Statements.

1



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##### Table of Contents



CHARTER ONE FINANCIAL, INC. AND
SUBSIDIARIES




|                                      |                                     |                                                               |         |                        |         |         |         |             |         | 
|------------------------------------- | ----------------------------------- | ------------------------------------------------------------- | ------- | ---------------------- | ------- | ------- | ------- | ----------- | ------- | 
|                                      |                                     |                                                               |         | Three Months Ended    
|                                      |                                     |                                                               |         |                       
|                                      |                                     |                                                               |         | 3/31/02                |         | 3/31/01
|                                      |                                     |                                                               |         |                        |         |        
|                                      |                                     |                                                               |         | (Dollars in thousands,
|                                      |                                     |                                                               |         | except per share data)
|Interest income:                      |                                     |                                                               |         |                        |         |         |         |            
|                                      | Loans and leases                    |                                                               | $       | 427,838                |         |         | $       | 466,667     |        
|                                      | Mortgage-backed securities:         |                                                               |         |                        |         |         |         |             |        
|                                      |                                     | Available for sale                                            |         |                        | 111,128 |         |         |             | 82,724  | 
|                                      |                                     | Held to maturity                                              |         |                        | 14,800  |         |         |             | 26,287  | 
|                                      | Investment securities:              |                                                               |         |                        |         |         |         |             |        
|                                      |                                     | Available for sale                                            |         |                        | 2,962   |         |         |             | 2,836   | 
|                                      |                                     | Held to maturity                                              |         |                        | 71      |         |         |             | 145     | 
|                                      | Other interest-earning assets       |                                                               |         | 7,912                  |         |         |         | 10,617      |        
|                                      |                                     |                                                               |         |                        |         |         |         |            
|                                      |                                     | Total interest income                                         |         |                        | 564,711 |         |         |             | 589,276 | 
|                                      |                                     |                                                               |         |                        |         |         |         |            
|Interest expense:                     |                                     |                                                               |         |                        |         |         |         |            
|                                      | Deposits                            |                                                               |         | 170,401                |         |         |         | 214,457     |        
|                                      | FHLB advances                       |                                                               |         | 103,716                |         |         |         | 135,747     |        
|                                      | Other borrowings                    |                                                               |         | 7,497                  |         |         |         | 9,591       |        
|                                      |                                     |                                                               |         |                        |         |         |         |            
|                                      |                                     | Total interest expense                                        |         |                        | 281,614 |         |         |             | 359,795 | 
|                                      |                                     |                                                               |         |                        |         |         |         |            
|                                      |                                     | Net interest income                                           |         |                        | 283,097 |         |         |             | 229,481 | 
|Provision for loan and lease losses   |                                     |                                                               | 28,717  |                        |         |         | 17,728  |            
|                                      |                                     |                                                               |         |                        |         |         |         |            
|                                      |                                     | Net interest income after provision for loan
and lease losses |         |                        | 254,380 |         |         |             | 211,753 | 
|                                      |                                     |                                                               |         |                        |         |         |         |            
|Other income:                         |                                     |                                                               |         |                        |         |         |         |            
|                                      | Retail banking                      |                                                               |         | 73,756                 |         |         |         | 67,369      |        
|                                      | Mortgage banking                    |                                                               |         | 11,290                 |         |         |         | 9,480       |        
|                                      | Leasing operations                  |                                                               |         | 270                    |         |         |         | 1,207       |        
|                                      | Net gains                           |                                                               |         | 21,727                 |         |         |         | 16,094      |        
|                                      | Bank owned life insurance and other |                                                               |         | 9,508                  |         |         |         | 9,849       |        
|                                      |                                     |                                                               |         |                        |         |         |         |            
|                                      |                                     | Total other income                                            |         |                        | 116,551 |         |         |             | 103,999 | 
|                                      |                                     |                                                               |         |                        |         |         |         |            
|Administrative expenses:              |                                     |                                                               |         |                        |         |         |         |            
|                                      | Compensation and employee benefits  |                                                               |         | 77,252                 |         |         |         | 68,099      |        
|                                      | Net occupancy and equipment         |                                                               |         | 28,563                 |         |         |         | 26,861      |        
|                                      | Marketing expenses                  |                                                               |         | 8,829                  |         |         |         | 6,059       |        
|                                      | Federal deposit insurance premiums  |                                                               |         | 1,211                  |         |         |         | 916         |        
|                                      | Amortization of goodwill            |                                                               |         | 3,898                  |         |         |         | 4,039       |        
|                                      | Other administrative expenses       |                                                               |         | 46,307                 |         |         |         | 41,612      |        
|                                      |                                     |                                                               |         |                        |         |         |         |            
|                                      |                                     | Total administrative expenses                                 |         |                        | 166,060 |         |         |             | 147,586 | 
|                                      |                                     |                                                               |         |                        |         |         |         |            
|Income before income taxes            |                                     |                                                               | 204,871 |                        |         |         | 168,166 |            
|Income taxes                          |                                     |                                                               | 65,048  |                        |         |         | 53,376  |            
|                                      |                                     |                                                               |         |                        |         |         |         |            
|                                      |                                     | Net income                                                    |         | $                      | 139,823 |         |         | $           | 114,790 | 
|                                      |                                     |                                                               |         |                        |         |         |         |            
|Basic earnings per share(1)           |                                     | $                                                             | .63     |                        |         | $       | .52     |            
|                                      |                                     |                                                               |         |                        |         |         |         |            
|Diluted earnings per share(1)         |                                     | $                                                             | .62     |                        |         | $       | .51     |            
|                                      |                                     |                                                               |         |                        |         |         |         |            
|Average common shares outstanding(1): |                                     |                                                               |         |                        |         |         |         |            
|                                      | Basic                               |                                                               |         | 220,652,028            |         |         |         | 218,849,204 |        
|                                      |                                     |                                                               |         |                        |         |         |         |            
|                                      | Diluted                             |                                                               |         | 226,878,032            |         |         |         | 224,244,027 |        
|                                      |                                     |                                                               |         |                        |         |         |         |            



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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




|                                                   |                                                                                   |                                                                                                  |                                                     |            |                        |           |         |            |          |          |  
|-------------------------------------------------- | --------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------ | --------------------------------------------------- | ---------- | ---------------------- | --------- | ------- | ---------- | -------- | -------- | -
|                                                   |                                                                                   |                                                                                                  |                                                     |            | Three Months Ended    
|                                                   |                                                                                   |                                                                                                  |                                                     |            |                       
|                                                   |                                                                                   |                                                                                                  |                                                     |            | 3/31/02                |           | 3/31/01
|                                                   |                                                                                   |                                                                                                  |                                                     |            |                        |           |        
|                                                   |                                                                                   |                                                                                                  |                                                     |            | (Dollars in thousands)
|Cash flows from operating activities:              |                                                                                   |                                                                                                  |                                                     |            |                        |           |         |           
|                                                   | Net income                                                                        |                                                                                                  | $                                                   | 139,823    |                        |           | $       | 114,790    |         
|                                                   | Adjustments to reconcile net income to net cash provided by
operating activities: |                                                                                                  |                                                     |            |                        |           |         |            |         
|                                                   |                                                                                   | Provision for loan and lease losses                                                              |                                                     |            | 28,717                 |           |         |            | 17,728   |         
|                                                   |                                                                                   | Net gains                                                                                        |                                                     |            | (20,517                | )         |         |            | (13,854  | )       
|                                                   |                                                                                   | Accretion of discounts, amortization of premiums, amortization of
goodwill and depreciation, net |                                                     |            | 24,506                 |           |         |            | 22,184   |         
|                                                   |                                                                                   | Origination of loans held for sale                                                               |                                                     |            | (644,097               | )         |         |            | (293,094 | )       
|                                                   |                                                                                   | Proceeds from sale of loans held for sale                                                        |                                                     |            | 642,876                |           |         |            | 290,773  |         
|                                                   |                                                                                   | Increase in accrued interest payable                                                             |                                                     |            | 2,109                  |           |         |            | 37,350   |         
|                                                   |                                                                                   | Other                                                                                            |                                                     |            | 81,733                 |           |         |            | 160,967  |         
|                                                   |                                                                                   |                                                                                                  |                                                     |            |                        |           |         |           
|                                                   |                                                                                   |                                                                                                  | Net cash provided by operating activities           |            |                        | 255,150   |         |            |          | 336,844  |  
|                                                   |                                                                                   |                                                                                                  |                                                     |            |                        |           |         |           
|Cash flows from investing activities:              |                                                                                   |                                                                                                  |                                                     |            |                        |           |         |           
|                                                   | Net principal disbursed on loans and leases                                       |                                                                                                  |                                                     | (1,552,891 | )                      |           |         | (1,393,170 | )       
|                                                   | Proceeds from principal repayments and maturities of:                             |                                                                                                  |                                                     |            |                        |           |         |            |         
|                                                   |                                                                                   | Mortgage-backed securities held to maturity                                                      |                                                     |            | 155,391                |           |         |            | 90,980   |         
|                                                   |                                                                                   | Mortgage-backed securities available for sale                                                    |                                                     |            | 465,805                |           |         |            | 132,613  |         
|                                                   |                                                                                   | Investment securities held to maturity                                                           |                                                     |            | 1,490                  |           |         |            | 15,305   |         
|                                                   |                                                                                   | Investment securities available for sale                                                         |                                                     |            | 20,733                 |           |         |            | 313,053  |         
|                                                   | Proceeds from sale of:                                                            |                                                                                                  |                                                     |            |                        |           |         |            |         
|                                                   |                                                                                   | Mortgage-backed securities available for sale                                                    |                                                     |            | 2,181,745              |           |         |            | 549,986  |         
|                                                   |                                                                                   | Investment securities available for sale                                                         |                                                     |            | 177                    |           |         |            | 5,104    |         
|                                                   |                                                                                   | Federal Home Loan Bank stock                                                                     |                                                     |            | 6,944                  |           |         |            | 735      |         
|                                                   | Purchase of:                                                                      |                                                                                                  |                                                     |            |                        |           |         |            |         
|                                                   |                                                                                   | Mortgage-backed securities available for sale                                                    |                                                     |            |                       |           |         |            | (500,000 | )       
|                                                   |                                                                                   | Investment securities available for sale                                                         |                                                     |            | (24,363                | )         |         |            | (79      | )       
|                                                   |                                                                                   | Federal Home Loan Bank stock                                                                     |                                                     |            | (1,035                 | )         |         |            |         |         
|                                                   |                                                                                   | Loans                                                                                            |                                                     |            | (4,715                 | )         |         |            | (7,896   | )       
|                                                   |                                                                                   | Loan servicing assets, including those originated                                                |                                                     |            | (32,067                | )         |         |            | (10,524  | )       
|                                                   | Other                                                                             |                                                                                                  |                                                     | (15,377    | )                      |           |         | (35,890    | )       
|                                                   |                                                                                   |                                                                                                  |                                                     |            |                        |           |         |           
|                                                   |                                                                                   |                                                                                                  | Net cash provided by (used in) investing activities |            |                        | 1,201,837 |         |            |          | (839,783 | )
|                                                   |                                                                                   |                                                                                                  |                                                     |            |                        |           |         |           
|Cash flows from financing activities:              |                                                                                   |                                                                                                  |                                                     |            |                        |           |         |           
|                                                   | Net decrease in short-term borrowings                                             |                                                                                                  |                                                     | (971,027   | )                      |           |         | (305,855   | )       
|                                                   | Proceeds from long-term borrowings                                                |                                                                                                  |                                                     | 25,647     |                        |           |         | 508,579    |         
|                                                   | Repayments of long-term borrowings                                                |                                                                                                  |                                                     | (4,628     | )                      |           |         | (404,388   | )       
|                                                   | Increase in deposits                                                              |                                                                                                  |                                                     | 517,781    |                        |           |         | 815,404    |         
|                                                   | Decrease in advance payments by borrowers for taxes and insurance                 |                                                                                                  |                                                     | (9,410     | )                      |           |         | (10,455    | )       
|                                                   | Payment of dividends on common stock                                              |                                                                                                  |                                                     | (44,034    | )                      |           |         | (37,422    | )       
|                                                   | Proceeds from issuance of common stock                                            |                                                                                                  |                                                     | 19,727     |                        |           |         | 14,698     |         
|                                                   | Purchase of treasury stock                                                        |                                                                                                  |                                                     | (152,208   | )                      |           |         | (35,631    | )       
|                                                   |                                                                                   |                                                                                                  |                                                     |            |                        |           |         |           
|                                                   |                                                                                   | Net cash provided by (used in) financing activities                                              |                                                     |            | (618,152               | )         |         |            | 544,930  |         
|                                                   |                                                                                   |                                                                                                  |                                                     |            |                        |           |         |           
|Net increase in cash and cash equivalents          |                                                                                   |                                                                                                  | 838,835                                             |            |                        |           | 41,991  |           
|Cash and cash equivalents, beginning of the period |                                                                                   |                                                                                                  | 516,520                                             |            |                        |           | 531,257 |           
|                                                   |                                                                                   |                                                                                                  |                                                     |            |                        |           |         |           
|Cash and cash equivalents, end of period           |                                                                                   | $                                                                                                | 1,355,355                                           |            |                        | $         | 573,248 |           
|                                                   |                                                                                   |                                                                                                  |                                                     |            |                        |           |         |           
|Supplemental disclosure of cash flow information:  |                                                                                   |                                                                                                  |                                                     |            |                        |           |         |           
|                                                   | Cash paid for interest on deposits and borrowings                                 |                                                                                                  | $                                                   | 403,489    |                        |           | $       | 506,178    |         
|                                                   | Cash paid for income taxes                                                        |                                                                                                  |                                                     | 2,500      |                        |           |         |           |         
|Supplemental schedule of noncash activities:       |                                                                                   |                                                                                                  |                                                     |            |                        |           |         |           
|                                                   | Loans exchanged for mortgage-backed securities                                    |                                                                                                  |                                                     | 2,717,271  |                        |           |         | 1,422,334  |         

See Notes to Consolidated Financial Statements.

3



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##### Table of Contents



CHARTER ONE FINANCIAL, INC. AND SUBSIDIARIES






|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, 2001.
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. |  | Charter One has one operating segment, consumer banking, which offers an
array of products and services to its customers. Pursuant to its consumer
banking strategy, emphasis is placed on building relationships and
identifying cross-sell opportunities 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|3. |  | In July 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (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 ceased upon adoption of SFAS No. 142 on January 1,
2002.
|  
|   |  | In October 2001, the FASB decided to undertake a limited-scope project to
reconsider part of the guidance in SFAS No. 72, Accounting for Certain
Acquisitions of Banking or Thrift Institutions. In particular, the FASB
decided to reconsider whether the acquisition of a branch is a business
combination and if goodwill recorded in connection with a branch acquisition
(Statement 72 Goodwill) should continue to be amortized. Currently,
Statement 72 Goodwill is excluded from the scope of SFAS No. 142. Pending
further clarification from the FASB, the Company has continued its
amortization of goodwill related to branch acquisitions. The Companys
amortization of goodwill related to branch acquisitions amounted to $3.9
million and $2.9 million, before tax, for the three months ended March 31,
2002 and 2001, respectively, and is included in the consolidated statements
of income under the caption amortization of goodwill.                                                                                                                                                 
|  
|   |  | The following table reconciles reported net income to pro forma adjusted net
income for the three months ended March 31, 2002 and 2001, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

|                            |                               |   |                        |         |         |   |         |         | 
|--------------------------- | ----------------------------- | - | ---------------------- | ------- | ------- | - | ------- | ------- | 
|                            |                               |   | Three Months Ended    
|                            |                               |   |                       
|                            |                               |   | 3/31/02                |         | 3/31/01
|                            |                               |   |                        |         |        
|                            |                               |   | (Dollars in thousands,
|                            |                               |   | except per share data)
|Reported net income         |                               | $ | 139,823                |         |         | $ | 114,790 |        
|Add: Goodwill amortization  |                               |   |                       |         |         |   | 741     |        
|                            |                               |   |                        |         |         |   |         |        
|                            | Pro forma adjusted net income |   | $                      | 139,823 |         |   | $       | 115,531 | 
|                            |                               |   |                        |         |         |   |         |        
|Basic earnings per share:   |                               |   |                        |         |         |   |         |        
|Reported net income         |                               | $ | .63                    |         |         | $ | .52     |        
|Add: Goodwill amortization  |                               |   |                       |         |         |   |        |        
|                            |                               |   |                        |         |         |   |         |        
|                            | Pro forma adjusted net income |   | $                      | .63     |         |   | $       | .52     | 
|                            |                               |   |                        |         |         |   |         |        
|Diluted earnings per share: |                               |   |                        |         |         |   |         |        
|Reported net income         |                               | $ | .62                    |         |         | $ | .51     |        
|Add: Goodwill amortization  |                               |   |                       |         |         |   |        |        
|                            |                               |   |                        |         |         |   |         |        
|                            | Pro forma adjusted net income |   | $                      | .62     |         |   | $       | .51     | 
|                            |                               |   |                        |         |         |   |         |        



| |  | SFAS No. 142 requires a transitional impairment test be applied to all
goodwill within the first half of 2002 and any resulting impairment loss be
reported as a change in accounting principle. The Company has performed a
transitional impairment test on its goodwill assets as of January 1, 2002.
No impairment loss was recognized as a result of this test.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4



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##### Table of Contents





|4. |  | On January 7, 2002, Charter One Bank, F.S.B. (the Bank) filed an
application with the Office of the Comptroller of the Currency (OCC) to
convert to a national bank. The conversion was effective May 7, 2002 and
resulted in changing the Banks name to Charter One Bank, N.A. from
Charter One Bank, F.S.B. Given the Banks capital levels and asset mix,
management does not anticipate any significant financial or regulatory
impact from the change in regulators.                                                                                                                                                                                        
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|5. |  | On January 11, 2002, the Boards of Directors of the Company and Charter
National Bancorp, Inc. announced a definitive agreement pursuant to which
the Company will acquire Charter National in a cash-out merger. Charter
Bank, the principal subsidiary of Charter National, is a state-chartered
commercial bank headquartered in Wyandotte, Michigan with approximately
$300 million in assets, $250 million in deposits, and eight branch offices
located south of Detroit, Michigan. The merger, which will be accounted
for as a purchase, is expected to close in the second quarter of 2002.
The transaction is subject to required bank regulatory approvals.
|  
|6. |  | Certain items in the consolidated financial statements for 2001 have been
reclassified to conform to the 2002 presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

5



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##### Table of Contents






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 (see following paragraph). 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 March 31, 2002, the Bank and its subsidiaries were doing
business through 450 full-service branches and 27 loan production offices.

On January 7, 2002, Charter One Bank, F.S.B. filed an application with the
Office of the Comptroller of the Currency (OCC) to convert from a thrift to a
national bank. The conversion was effective May 7, 2002 and resulted in
changing the Banks name to Charter One Bank, N.A. from Charter One Bank,
F.S.B. Given the Banks capital levels and asset mix, management does not
anticipate any significant financial or regulatory impact from the change in
regulators.

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 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;                                                                                                                                                                                                                                                                    

6



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##### Table of Contents





| |  | the timely development of and acceptance of new products and services of Charter One 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;                                                                                                                                                                  
| 
| |  | 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

Pending Acquisition

On January 11, 2002, the Boards of Directors of the Company and Charter
National Bancorp, Inc. announced a definitive agreement pursuant to which the
Company will acquire Charter National in a cash-out merger. Charter Bank, the
principal subsidiary of Charter National, is a state-chartered commercial bank
headquartered in Wyandotte, Michigan with approximately $300 million in assets,
$250 million in deposits, and eight branch offices located south of Detroit,
Michigan. The merger, which will be accounted for as a purchase, is expected
to close in the second quarter of 2002. The transaction is subject to required
bank regulatory approvals.

Performance Overview

Charter One reported net income of $139.8 million, or $.62 per diluted share,
for the three months ended March 31, 2002, compared to net income of $114.8
million, or $.51 per diluted share, for the three months ended March 31, 2001.

Figure 1 sets forth financial results and annualized performance ratios for the
three months ended March 31, 2002 and 2001. Per share data have been restated
to reflect the 5% stock dividend issued September 28, 2001.

Selected Financial Results and
Ratios (Figure 1)

|                                               |  |                        |         |         |  |   |         |  
|---------------------------------------------- |  | ---------------------- | ------- | ------- |  | - | ------- | -
|                                               |  | Three Months Ended    
|                                               |  |                       
|                                               |  | 3/31/02                |         | 3/31/01
|                                               |  |                        |         |        
|                                               |  | (Dollars in thousands,
|                                               |  | except per share data)
|Net income                                     |  | $                      | 139,823 |         |  | $ | 114,790 |  
|Diluted earnings per share                     |  |                        | .62     |         |  |   | .51     |  
|Return on average assets                       |  |                        | 1.49    | %       |  |   | 1.38    | %
|Return on average equity                       |  |                        | 19.35   |         |  |   | 18.29   |  
|Return on average tangible equity(1)           |  |                        | 22.48   |         |  |   | 20.11   |  
|Average equity to average assets               |  |                        | 7.71    |         |  |   | 7.52    |  
|Net interest income to administrative expenses |  |                        | 1.70    | x       |  |   | 1.55    | x
|Administrative expenses to average assets      |  |                        | 1.77    | %       |  |   | 1.77    | %
|Efficiency ratio                               |  |                        | 40.58   |         |  |   | 43.05   |  



---

|(1) |  | Computed as the ratio of net income, excluding the amortization of goodwill
and other intangible assets, to average tangible equity.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------

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##### Table of Contents



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. 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.

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

|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |      |      |      | 
|----------------------------------------------------------------------- | ----------------------------- | --------------------------------- | ------------------------------------------ | ---------- | ---------------------- | ---------- | -------- | ------- | ------- | ------- | ------- | ---- | -------- | ---- | --------- | ---------- | --------- | ---------- | ------- | ------- | ------- | ------- | ------ | ---- | ---- | ---- | 
|                                                                        |                               |                                   |                                            |            | Three Months Ended    
|                                                                        |                               |                                   |                                            |            |                       
|                                                                        |                               |                                   |                                            |            | 3/31/02                |            | 3/31/01 
|                                                                        |                               |                                   |                                            |            |                        |            |         
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      | Avg.     |      |           |            |           |            |         |         |         |         | Avg.  
|                                                                        |                               |                                   |                                            |            | Average                |            |          |         |         |         | Yield/  |      | Average  |      |           |            |           |            | Yield/ 
|                                                                        |                               |                                   |                                            |            | Balance                |            | Interest |         | Cost    |         | Balance |      | Interest |      | Cost     
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |          
|                                                                        |                               |                                   |                                            |            | (Dollars in thousands) |            |          |         |        
|Interest-earning assets:                                                |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|                                                                        | Loans and leases              |                                   | $                                          | 25,530,842 |                        |            | $        | 427,838 |         |         |         | 6.73 | %        |      | $         | 24,414,279 |           |            | $       | 466,667 |         |         |        | 7.68 | %   
|                                                                        | Mortgage-backed securities:   |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |      |     
|                                                                        |                               | Available for sale                |                                            |            | 7,377,573              |            |          |         | 111,128 |         |         |      | 6.03     |      |           |            | 4,650,949 |            |         |         | 82,724  |         |        |      | 7.11 |     
|                                                                        |                               | Held to maturity                  |                                            |            | 879,440                |            |          |         | 14,800  |         |         |      | 6.73     |      |           |            | 1,445,936 |            |         |         | 26,287  |         |        |      | 7.27 |     
|                                                                        | Investment securities:        |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |      |     
|                                                                        |                               | Available for sale                |                                            |            | 144,910                |            |          |         | 2,962   |         |         |      | 8.18     |      |           |            | 145,155   |            |         |         | 2,836   |         |        |      | 7.81 |     
|                                                                        |                               | Held to maturity                  |                                            |            | 5,709                  |            |          |         | 71      |         |         |      | 4.95     |      |           |            | 10,492    |            |         |         | 145     |         |        |      | 5.54 |     
|                                                                        | Other interest-earning assets |                                   |                                            | 846,552    |                        |            |          | 7,912   |         |         |         | 3.74 |          |      |           | 594,483    |           |            |         | 10,617  |         |         |        | 7.14 |     
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|                                                                        |                               |                                   | Total interest-earning assets              |            |                        | 34,785,026 |          |         |         | 564,711 |         |      |          | 6.51 |           |            |           | 31,261,294 |         |         |         | 589,276 |        |      |      | 7.56 | 
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|Allowance for loan and lease losses                                     |                               |                                   | (255,109                                   | )          |                        |            |          |         |         |         |         |      |          |      | (187,665  | )          |           |            |         |         |         |         |        |     
|Noninterest-earning assets                                              |                               |                                   | 2,953,303                                  |            |                        |            |          |         |         |         |         |      |          |      | 2,295,337 |            |           |            |         |         |         |         |        |     
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|                                                                        |                               |                                   | Total assets                               |            | $                      | 37,483,220 |          |         |         |         |         |      |          |      |           |            | $         | 33,368,966 |         |         |         |         |        |      |      |      | 
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|Interest-bearing liabilities:                                           |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|                                                                        | Deposits:                     |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |      |     
|                                                                        |                               | Checking accounts                 |                                            | $          | 7,832,954              |            |          |         | 36,380  |         |         |      | 1.88     |      |           | $          | 3,957,804 |            |         |         | 18,932  |         |        |      | 1.94 |     
|                                                                        |                               | Money market and savings
accounts |                                            |            | 6,780,737              |            |          |         | 37,230  |         |         |      | 2.23     |      |           |            | 5,861,567 |            |         |         | 52,046  |         |        |      | 3.60 |     
|                                                                        |                               | Certificates of deposit           |                                            |            | 10,448,328             |            |          |         | 96,791  |         |         |      | 3.76     |      |           |            | 9,964,579 |            |         |         | 143,479 |         |        |      | 5.84 |     
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|                                                                        |                               |                                   | Total deposits                             |            |                        | 25,062,019 |          |         |         | 170,401 |         |      |          | 2.76 |           |            |           | 19,783,950 |         |         |         | 214,457 |        |      |      | 4.40 | 
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|                                                                        | FHLB advances                 |                                   |                                            | 8,071,957  |                        |            |          | 103,716 |         |         |         | 5.21 |          |      |           | 9,819,816  |           |            |         | 135,747 |         |         |        | 5.60 |     
|                                                                        | Other borrowings              |                                   |                                            | 460,700    |                        |            |          | 7,497   |         |         |         | 6.51 |          |      |           | 531,171    |           |            |         | 9,591   |         |         |        | 7.22 |     
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|                                                                        |                               |                                   | Total borrowings                           |            |                        | 8,532,657  |          |         |         | 111,213 |         |      |          | 5.28 |           |            |           | 10,350,987 |         |         |         | 145,338 |        |      |      | 5.69 | 
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|                                                                        |                               |                                   | Total interest-bearing liabilities         |            |                        | 33,594,676 |          |         |         | 281,614 |         |      |          | 3.40 |           |            |           | 30,134,937 |         |         |         | 359,795 |        |      |      | 4.84 | 
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|Noninterest-bearing liabilities                                         |                               |                                   | 998,029                                    |            |                        |            |          |         |         |         |         |      |          |      | 723,044   |            |           |            |         |         |         |         |        |     
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|                                                                        |                               |                                   | Total liabilities                          |            |                        | 34,592,705 |          |         |         |         |         |      |          |      |           |            |           | 30,857,981 |         |         |         |         |        |      |      |      | 
|Shareholders equity                                                    |                               |                                   | 2,890,515                                  |            |                        |            |          |         |         |         |         |      |          |      | 2,510,985 |            |           |            |         |         |         |         |        |     
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|                                                                        |                               |                                   | Total liabilities and
shareholders equity |            | $                      | 37,483,220 |          |         |         |         |         |      |          |      |           |            | $         | 33,368,966 |         |         |         |         |        |      |      |      | 
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|Net interest income                                                     |                               |                                   |                                            |            |                        | $          | 283,097  |         |         |         |         |      |          |      |           |            |           | $          | 229,481 |         |         |         |        |     
|                                                                        |                               |                                   |                                            |            |                        |            |          |         |         |         |         |      |          |      |           |            |           |            |         |         |         |         |        |     
|Interest rate spread                                                    |                               |                                   |                                            |            |                        |            |          |         |         |         | 3.11    |      |          |      |           |            |           |            |         |         |         |         | 2.72   |     
|Net yield on average interest-earning assets                            |                               |                                   |                                            |            |                        |            |          |         |         |         | 3.26    |      |          |      |           |            |           |            |         |         |         |         | 2.94   |     
|Average interest-earning assets to
average interest-bearing liabilities |                               |                                   |                                            |            |                        |            |          |         |         |         | 103.54  | %    |          |      |           |            |           |            |         |         |         |         | 103.74 | %   

8



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##### Table of Contents



Figure 3 shows 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. Amortization of
net deferred loan costs and automobile dealer reserves included as a reduction
in interest income was $23.5 million in 2002 and $16.7 million in 2001.

Rate/Volume Analysis (Figure 3)

|                              |                                   |                    |       |         |         |                              |         |         |        |        |        |         |         |         |         |  
|----------------------------- | --------------------------------- | ------------------ | ----- | ------- | ------- | ---------------------------- | ------- | ------- | ------ | ------ | ------ | ------- | ------- | ------- | ------- | -
|                              |                                   |                    |       |         |         | Three Months Ended March 31,
|                              |                                   |                    |       |         |         |                             
|                              |                                   |                    |       |         |         | 2002 v. 2001                
|                              |                                   |                    |       |         |         |                             
|                              |                                   |                    |       |         |         | Increase (decrease) due to   |         |         |        |       
|                              |                                   |                    |       |         |         |                              |         |         |        |       
|                              |                                   |                    |       |         |         | Rate                         |         | Volume  |        | Total 
|                              |                                   |                    |       |         |         |                              |         |         |        |       
|                              |                                   |                    |       |         |         | (Dollars in thousands)      
|Interest income:              |                                   |                    |       |         |         |                              |         |         |        |        |        |        
|                              | Loans and leases                  |                    | $     | (59,736 | )       |                              | $       | 20,907  |        |        | $      | (38,829 | )      
|                              | Mortgage-backed securities:       |                    |       |         |         |                              |         |         |        |        |        |         |        
|                              |                                   | Available for sale |       |         | (14,205 | )                            |         |         | 42,609 |        |        |         | 28,404  |        
|                              |                                   | Held to maturity   |       |         | (1,832  | )                            |         |         | (9,655 | )      |        |         | (11,487 | )      
|                              | Investment securities:            |                    |       |         |         |                              |         |         |        |        |        |         |        
|                              |                                   | Available for sale |       |         | 131     |                              |         |         | (5     | )      |        |         | 126     |        
|                              |                                   | Held to maturity   |       |         | (14     | )                            |         |         | (60    | )      |        |         | (74     | )      
|                              | Other interest-earning assets     |                    |       | (6,197  | )       |                              |         | 3,492   |        |        |        | (2,705  | )      
|                              |                                   |                    |       |         |         |                              |         |         |        |        |        |        
|                              |                                   |                    | Total |         |         | (81,853                      | )       |         |        | 57,288 |        |         |         | (24,565 | )      
|                              |                                   |                    |       |         |         |                              |         |         |        |        |        |        
|Interest expense:             |                                   |                    |       |         |         |                              |         |         |        |        |        |        
|                              | Checking accounts                 |                    |       | (566    | )       |                              |         | 18,014  |        |        |        | 17,448  |        
|                              | Money market and savings accounts |                    |       | (23,412 | )       |                              |         | 8,596   |        |        |        | (14,816 | )      
|                              | Certificates of deposit           |                    |       | (53,355 | )       |                              |         | 6,667   |        |        |        | (46,688 | )      
|                              | FHLB advances                     |                    |       | (8,680  | )       |                              |         | (23,351 | )      |        |        | (32,031 | )      
|                              | Other borrowings                  |                    |       | (1,691  | )       |                              |         | (403    | )      |        |        | (2,094  | )      
|                              |                                   |                    |       |         |         |                              |         |         |        |        |        |        
|                              |                                   |                    |       | Total   |         |                              | (87,704 | )       |        |        | 9,523  |         |         |         | (78,181 | )
|                              |                                   |                    |       |         |         |                              |         |         |        |        |        |        
|Change in net interest income |                                   | $                  | 5,851 |         |         | $                            | 47,765  |         |        | $      | 53,616 |        
|                              |                                   |                    |       |         |         |                              |         |         |        |        |        |        

Net interest income was $283.1 million for the three months ended March 31,
2002, up 23.4% from the first quarter of 2001. The increase in net interest
income was primarily attributed to the reduction in the cost of average
interest-bearing liabilities from 4.84% during the first quarter of 2001 to
3.40% during the first quarter of 2002. The reduction in the cost of average
interest-bearing liabilities resulted from the maturity and repricing of higher
interest rate certificates of deposit since March 31, 2001.

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.

9



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Yields and Costs at End of
Period (Figure 4)

|                                     |                                   |                                    |      |         |      |          |      |      |      |  |  | 
|------------------------------------ | --------------------------------- | ---------------------------------- | ---- | ------- | ---- | -------- | ---- | ---- | ---- |  |  | 
|                                     |                                   |                                    |      | 3/31/02 |      | 12/31/01
|                                     |                                   |                                    |      |         |      |         
|Weighted average yield:              |                                   |                                    |      |         |      |          |      |     
|                                     | One-to-four family loans          |                                    |      | 6.73    | %    |          |      | 6.89 | %   
|                                     | Commercial real estate loans      |                                    |      | 7.15    |      |          |      | 7.43 |     
|                                     | Retail consumer loans             |                                    |      | 5.84    |      |          |      | 6.35 |     
|                                     | Automobile loans                  |                                    |      | 7.43    |      |          |      | 7.67 |     
|                                     | Consumer finance loans            |                                    |      | 7.98    |      |          |      | 8.15 |     
|                                     | Leases(1)                         |                                    |      | 5.64    |      |          |      | 5.87 |     
|                                     | Corporate banking loans           |                                    |      | 5.79    |      |          |      | 6.07 |     
|                                     |                                   | Total loans and leases             |      |         | 6.65 |          |      |      | 6.91 | 
|                                     | Mortgage-backed securities        |                                    |      | 6.07    |      |          |      | 6.18 |     
|                                     | Investment securities             |                                    |      | 7.31    |      |          |      | 8.21 |     
|                                     | Other interest-earning assets     |                                    |      | 2.95    |      |          |      | 5.43 |     
|                                     |                                   | Total interest-earning assets      |      |         | 6.36 |          |      |      | 6.71 | 
|Weighted average cost(2):            |                                   |                                    |      |         |      |          |      |     
|                                     | Checking accounts                 |                                    |      | 1.56    |      |          |      | 1.86 |     
|                                     | Money market and savings accounts |                                    |      | 2.27    |      |          |      | 2.26 |     
|                                     | Certificates of deposit           |                                    |      | 3.70    |      |          |      | 4.03 |     
|                                     |                                   | Total deposits                     |      |         | 2.61 |          |      |      | 2.88 | 
|                                     | FHLB advances                     |                                    |      | 5.30    |      |          |      | 5.02 |     
|                                     | Other borrowings                  |                                    |      | 7.60    |      |          |      | 5.86 |     
|                                     |                                   | Total interest-bearing liabilities |      |         | 3.29 |          |      |      | 3.46 | 
|Interest rate spread                 |                                   |                                    | 3.07 |         |      |          | 3.25 |     
|Net yield on interest-earning assets |                                   |                                    | 3.20 |         |      |          | 3.38 |     



---

|(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 March 31, 2002 was $116.6 million, an
increase of $12.6 million, or 12.1%, over the $104.0 million for the three
months ended March 31, 2001. The increase was primarily attributable to income
from retail banking and net gains on sales. Retail banking income increased
$6.4 million, or 9.5% over the comparable period in 2001. The growth was
primarily attributable to ongoing franchise development initiatives. Net gains
on sales were $21.7 million in the first quarter of 2002, compared to $16.1
million in the first quarter of 2001. The mortgage-backed securities sold
during the first quarter of 2002 were comprised primarily of seasoned,
bank-originated residential mortgage and consumer products, as we generated
more residential mortgage and consumer loans than we needed to meet our balance
sheet size and mix objectives. We did not utilize any special-purpose entities
for the sale of any of our mortgage-backed securities.

Administrative Expenses

Administrative expenses were $166.1 million for the three months ended March
31, 2002, an increase of $18.5 million, or 12.5%, as compared to the first
quarter of 2001. The increase in administrative expenses was primarily
attributable to costs associated with the operational integration of
acquisitions completed in the second half of 2001. Despite the increase in
administrative expenses, our efficiency ratio improved to 40.58% for the three
months ended March 31, 2002 from 43.05% for the three months ended March 31,
2001.

Federal Income Tax

Federal income tax for the three months ended March 31, 2002 was $65.0 million,
compared to $53.4 million for the same period of 2001. The primary reason for
this increase in the provision for federal income taxes was an increase in
pre-tax income. The effective income tax rate was 31.8% for the 2002 period
and 31.7% for the comparable 2001 period.

10



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FINANCIAL CONDITION

Overview

At March 31, 2002, total assets were $37.7 billion, compared to total assets of
$38.2 billion at December 31, 2001. Contributing to the decrease in total
assets was the settlement of $2.2 billion in sold mortgage-backed securities
during the quarter. These mortgage-backed securities were primarily comprised
of seasoned, bank-originated residential mortgage and consumer loans.

Loans and Leases

Composition of Loans and Leases (Figure 5)

|                                                            |                   |                 |                          |           |                        |            |            |           |           |            | 
|----------------------------------------------------------- | ----------------- | --------------- | ------------------------ | --------- | ---------------------- | ---------- | ---------- | --------- | --------- | ---------- | 
|                                                            |                   |                 |                          |           | 3/31/02                |            | 12/31/01  
|                                                            |                   |                 |                          |           |                        |            |           
|                                                            |                   |                 |                          |           | (Dollars in thousands)
|One-to-four family:                                         |                   |                 |                          |           |                        |            |            |          
|                                                            | Permanent:        |                 |                          |           |                        |            |            |           |          
|                                                            |                   | Fixed rate      |                          | $         | 5,695,007              |            |            | $         | 6,419,819 |           
|                                                            |                   | Adjustable rate |                          |           | 2,816,726              |            |            |           | 3,350,370 |           
|                                                            | Construction      |                 |                          | 397,838   |                        |            |            | 409,369   |          
|                                                            |                   |                 |                          |           |                        |            |            |          
|                                                            |                   |                 | 8,909,571                |           |                        |            | 10,179,558 |          
|                                                            |                   |                 |                          |           |                        |            |            |          
|Commercial real estate:                                     |                   |                 |                          |           |                        |            |            |          
|                                                            | Multifamily       |                 |                          | 1,119,565 |                        |            |            | 1,189,777 |          
|                                                            | Other             |                 |                          | 1,311,263 |                        |            |            | 1,279,889 |          
|                                                            |                   |                 |                          |           |                        |            |            |          
|                                                            |                   |                 | 2,430,828                |           |                        |            | 2,469,666  |          
|                                                            |                   |                 |                          |           |                        |            |            |          
|Consumer:                                                   |                   |                 |                          |           |                        |            |            |          
|                                                            | Retail            |                 |                          | 4,747,254 |                        |            |            | 4,857,473 |          
|                                                            | Automobile        |                 |                          | 4,582,136 |                        |            |            | 4,397,425 |          
|                                                            | Consumer finance  |                 |                          | 1,012,168 |                        |            |            | 1,042,522 |          
|                                                            |                   |                 |                          |           |                        |            |            |          
|                                                            |                   |                 | 10,341,558               |           |                        |            | 10,297,420 |          
|                                                            |                   |                 |                          |           |                        |            |            |          
|Business:                                                   |                   |                 |                          |           |                        |            |            |          
|                                                            | Leasing           |                 |                          | 2,022,104 |                        |            |            | 1,994,524 |          
|                                                            | Corporate banking |                 |                          | 1,070,610 |                        |            |            | 1,043,010 |          
|                                                            |                   |                 |                          |           |                        |            |            |          
|                                                            |                   |                 | 3,092,714                |           |                        |            | 3,037,534  |          
|                                                            |                   |                 |                          |           |                        |            |            |          
|Loans and leases before allowance for loan and lease losses |                   |                 | 24,774,671               |           |                        |            | 25,984,178 |          
|Allowance for loan and lease losses                         |                   |                 | (258,605                 | )         |                        |            | (255,478   | )        
|                                                            |                   |                 |                          |           |                        |            |            |          
|                                                            |                   |                 | Loans and leases, net(1) |           | $                      | 24,516,066 |            |           | $         | 25,728,700 | 
|                                                            |                   |                 |                          |           |                        |            |            |          
|Portfolio of loans serviced for others                      |                   | $               | 15,855,010               |           |                        | $          | 13,846,807 |          
|                                                            |                   |                 |                          |           |                        |            |            |          



---

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

Our loan and lease portfolio remains well-diversified. At March 31, 2002, 96%
of our loans and leases were collateralized, with 62% backed by one-to-four
family and multifamily real estate.

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Loan and Lease Activity (Figure 6)

|                                |                                                |                    |                                   |                                      |           |                        |            |           |           |           |           |  
|------------------------------- | ---------------------------------------------- | ------------------ | --------------------------------- | ------------------------------------ | --------- | ---------------------- | ---------- | --------- | --------- | --------- | --------- | -
|                                |                                                |                    |                                   |                                      |           | Three Months Ended    
|                                |                                                |                    |                                   |                                      |           |                       
|                                |                                                |                    |                                   |                                      |           | 3/31/02                |            | 3/31/01  
|                                |                                                |                    |                                   |                                      |           |                        |            |          
|                                |                                                |                    |                                   |                                      |           | (Dollars in thousands)
|Originations:                   |                                                |                    |                                   |                                      |           |                        |            |          
|Real estate:                    |                                                |                    |                                   |                                      |           |                        |            |          
|                                | Permanent:                                     |                    |                                   |                                      |           |                        |            |           |          
|                                |                                                | One-to-four family |                                   | $                                    | 2,657,994 |                        |            | $         | 1,453,923 |          
|                                |                                                | Multifamily        |                                   |                                      | 35,719    |                        |            |           | 14,026    |          
|                                |                                                | Commercial         |                                   |                                      | 92,088    |                        |            |           | 60,806    |          
|                                |                                                |                    |                                   |                                      |           |                        |            |          
|                                |                                                |                    | Total permanent loans             |                                      |           | 2,785,801              |            |           |           | 1,528,755 |          
|                                |                                                |                    |                                   |                                      |           |                        |            |          
|                                | Construction:                                  |                    |                                   |                                      |           |                        |            |           |          
|                                |                                                | One-to-four family |                                   |                                      | 14,031    |                        |            |           | 121,929   |          
|                                |                                                | Multifamily        |                                   |                                      | 24,988    |                        |            |           | 38,187    |          
|                                |                                                | Commercial         |                                   |                                      | 66,234    |                        |            |           | 86,216    |          
|                                |                                                |                    |                                   |                                      |           |                        |            |          
|                                |                                                |                    | Total construction loans          |                                      |           | 105,253                |            |           |           | 246,332   |          
|                                |                                                |                    |                                   |                                      |           |                        |            |          
|                                |                                                |                    |                                   | Total real estate loans originated   |           |                        | 2,891,054  |           |           |           | 1,775,087 |  
|                                |                                                |                    |                                   |                                      |           |                        |            |          
|Retail consumer                 |                                                |                    | 998,727                           |                                      |           |                        | 584,345    |          
|Automobile                      |                                                |                    | 684,045                           |                                      |           |                        | 490,625    |          
|Consumer finance                |                                                |                    | 56,083                            |                                      |           |                        | 56,705     |          
|Leases                          |                                                |                    | 93,041                            |                                      |           |                        | 144,837    |          
|Corporate banking               |                                                |                    | 353,640                           |                                      |           |                        | 213,985    |          
|                                |                                                |                    |                                   |                                      |           |                        |            |          
|                                |                                                |                    | Total loans and leases originated |                                      |           | 5,076,590              |            |           |           | 3,265,584 |          
|                                |                                                |                    |                                   |                                      |           |                        |            |          
|Loans purchased                 |                                                |                    | 4,715                             |                                      |           |                        | 7,896      |          
|                                |                                                |                    |                                   |                                      |           |                        |            |          
|Sales and principal reductions: |                                                |                    |                                   |                                      |           |                        |            |          
|                                | Loans sold                                     |                    |                                   | 644,097                              |           |                        |            | 293,094   |          
|                                | Loans exchanged for mortgage-backed securities |                    |                                   | 2,717,271                            |           |                        |            | 1,422,334 |          
|                                | Principal reductions                           |                    |                                   | 2,921,080                            |           |                        |            | 1,597,326 |          
|                                |                                                |                    |                                   |                                      |           |                        |            |          
|                                |                                                |                    |                                   | Total sales and principal reductions |           |                        | 6,282,448  |           |           |           | 3,312,754 |  
|                                |                                                |                    |                                   |                                      |           |                        |            |          
|                                |                                                |                    |                                   | Decrease before net items            |           | $                      | (1,201,143 | )         |           | $         | (39,274   | )
|                                |                                                |                    |                                   |                                      |           |                        |            |          

Investment and Mortgage-Backed Securities

Figures 7 and 8 summarize our investment and mortgage-backed securities
portfolios at March 31, 2002 and December 31, 2001. 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)

|                   |                                                      |                                                |       |        |                        |         |          |        |         |         | 
|------------------ | ---------------------------------------------------- | ---------------------------------------------- | ----- | ------ | ---------------------- | ------- | -------- | ------ | ------- | ------- | 
|                   |                                                      |                                                |       |        | 3/31/02                |         | 12/31/01
|                   |                                                      |                                                |       |        |                        |         |         
|                   |                                                      |                                                |       |        | (Dollars in thousands)
|                  
|Available for Sale |                                                      |                                                |       |        |                        |         |          |       
|                   | U.S. Treasury and agency securities                  |                                                | $     | 35,368 |                        |         | $        | 30,929 |        
|                   | Securities of U.S. states and political subdivisions |                                                |       | 8      |                        |         |          | 8      |        
|                   | Other                                                |                                                |       | 98,133 |                        |         |          | 98,375 |        
|                   |                                                      |                                                |       |        |                        |         |          |       
|                   |                                                      | Total investment securities available for sale |       |        | 133,509                |         |          |        | 129,312 |        
|                   |                                                      |                                                |       |        |                        |         |          |       
|Held to Maturity   |                                                      |                                                |       |        |                        |         |          |       
|                   | U.S. Treasury and agency securities                  |                                                |       | 261    |                        |         |          |       |        
|                   | Securities of U.S. states and political subdivisions |                                                |       | 4,347  |                        |         |          | 5,839  |        
|                   | Other                                                |                                                |       | 435    |                        |         |          | 435    |        
|                   |                                                      |                                                |       |        |                        |         |          |       
|                   |                                                      | Total investment securities held to maturity   |       |        | 5,043                  |         |          |        | 6,274   |        
|                   |                                                      |                                                |       |        |                        |         |          |       
|                   |                                                      |                                                | Total |        | $                      | 138,552 |          |        | $       | 135,586 | 
|                   |                                                      |                                                |       |        |                        |         |          |       
|                   | Weighted average rate                                |                                                |       | 7.31   | %                      |         |          | 8.21   | %      
|                   |                                                      |                                                |       |        |                        |         |          |       

12



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Mortgage-Backed Securities (Figure 8)

|                                               |                                      |                                   |                                                     |       |           |                        |           |          |           |           |           | 
|---------------------------------------------- | ------------------------------------ | --------------------------------- | --------------------------------------------------- | ----- | --------- | ---------------------- | --------- | -------- | --------- | --------- | --------- | 
|                                               |                                      |                                   |                                                     |       |           | 3/31/02                |           | 12/31/01
|                                               |                                      |                                   |                                                     |       |           |                        |           |         
|                                               |                                      |                                   |                                                     |       |           | (Dollars in thousands)
|Available for Sale
Participation certificates: |                                      |                                   |                                                     |       |           |                        |           |         
|                                               |                                      | U.S. government and agency issues |                                                     | $     | 7,057,171 |                        |           | $        | 6,950,425 |          
|                                               | Collateralized mortgage obligations: |                                   |                                                     |       |           |                        |           |          |          
|                                               |                                      | U.S. government and agency issues |                                                     |       | 472,170   |                        |           |          | 518,251   |          
|                                               |                                      | Private issues                    |                                                     |       | 538,605   |                        |           |          | 561,836   |          
|                                               |                                      |                                   |                                                     |       |           |                        |           |         
|                                               |                                      |                                   | Total mortgage-backed securities available for sale |       |           | 8,067,946              |           |          |           | 8,030,512 |          
|                                               |                                      |                                   |                                                     |       |           |                        |           |         
|Held to Maturity
Participation certificates:   |                                      |                                   |                                                     |       |           |                        |           |         
|                                               |                                      | U.S. government and agency issues |                                                     |       | 424,364   |                        |           |          | 475,622   |          
|                                               |                                      | Private issues                    |                                                     |       | 79,419    |                        |           |          | 90,203    |          
|                                               | Collateralized mortgage obligations: |                                   |                                                     |       |           |                        |           |          |          
|                                               |                                      | U.S. government and agency issues |                                                     |       | 153,628   |                        |           |          | 185,944   |          
|                                               |                                      | Private issues                    |                                                     |       | 172,621   |                        |           |          | 232,135   |          
|                                               |                                      |                                   |                                                     |       |           |                        |           |         
|                                               |                                      |                                   | Total mortgage-backed securities held to maturity   |       |           | 830,032                |           |          |           | 983,904   |          
|                                               |                                      |                                   |                                                     |       |           |                        |           |         
|                                               |                                      |                                   |                                                     | Total |           | $                      | 8,897,978 |          |           | $         | 9,014,416 | 
|                                               |                                      |                                   |                                                     |       |           |                        |           |         
|                                               |                                      | Weighted average rate             |                                                     |       | 6.07      | %                      |           |          | 6.18      | %        
|                                               |                                      |                                   |                                                     |       |           |                        |           |         

Asset Quality

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

|                                     |                                                          |                        |                   |                                |         |                        |         |         |        |         |         |  
|------------------------------------ | -------------------------------------------------------- | ---------------------- | ----------------- | ------------------------------ | ------- | ---------------------- | ------- | ------- | ------ | ------- | ------- | -
|                                     |                                                          |                        |                   |                                |         | Three Months Ended    
|                                     |                                                          |                        |                   |                                |         |                       
|                                     |                                                          |                        |                   |                                |         | 3/31/02                |         | 3/31/01
|                                     |                                                          |                        |                   |                                |         |                        |         |        
|                                     |                                                          |                        |                   |                                |         | (Dollars in thousands)
|Allowance for loan and lease losses: |                                                          |                        |                   |                                |         |                        |         |        
|                                     | Balance, beginning of period                             |                        | $                 | 255,478                        |         |                        | $       | 189,616 |       
|                                     | Provision for loan and lease losses                      |                        |                   | 28,717                         |         |                        |         | 17,728  |       
|                                     | Loans and leases charged off:                            |                        |                   |                                |         |                        |         |         |       
|                                     |                                                          | One-to-four family     |                   |                                | (976    | )                      |         |         | (1,005 | )      
|                                     |                                                          | Commercial real estate |                   |                                | (801    | )                      |         |         | (35    | )      
|                                     |                                                          | Retail consumer        |                   |                                | (2,258  | )                      |         |         | (1,955 | )      
|                                     |                                                          | Automobile             |                   |                                | (16,920 | )                      |         |         | (9,986 | )      
|                                     |                                                          | Consumer finance       |                   |                                | (3,822  | )                      |         |         | (2,057 | )      
|                                     |                                                          | Leases                 |                   |                                | (460    | )                      |         |         |       |        
|                                     |                                                          | Corporate banking      |                   |                                | (4,023  | )                      |         |         | (1,269 | )      
|                                     |                                                          |                        |                   |                                |         |                        |         |        
|                                     |                                                          |                        | Total charge-offs |                                |         | (29,260                | )       |         |        | (16,307 | )      
|                                     |                                                          |                        |                   |                                |         |                        |         |        
|                                     | Recoveries:                                              |                        |                   |                                |         |                        |         |         |       
|                                     |                                                          | One-to-four family     |                   |                                | 2       |                        |         |         | 24     |        
|                                     |                                                          | Commercial real estate |                   |                                | 121     |                        |         |         | 1      |        
|                                     |                                                          | Retail consumer        |                   |                                | 403     |                        |         |         | 421    |        
|                                     |                                                          | Automobile             |                   |                                | 2,408   |                        |         |         | 1,366  |        
|                                     |                                                          | Consumer finance       |                   |                                | 63      |                        |         |         | 51     |        
|                                     |                                                          | Leases                 |                   |                                |        |                        |         |         |       |        
|                                     |                                                          | Corporate banking      |                   |                                | 673     |                        |         |         | 91     |        
|                                     |                                                          |                        |                   |                                |         |                        |         |        
|                                     |                                                          |                        | Total recoveries  |                                |         | 3,670                  |         |         |        | 1,954   |        
|                                     |                                                          |                        |                   |                                |         |                        |         |        
|                                     |                                                          |                        |                   | Net loan and lease charge-offs |         |                        | (25,590 | )       |        |         | (14,353 | )
|                                     |                                                          |                        |                   |                                |         |                        |         |        
|                                     | Balance, end of period                                   |                        | $                 | 258,605                        |         |                        | $       | 192,991 |       
|                                     |                                                          |                        |                   |                                |         |                        |         |        
|                                     | Net charge-offs to average loans and leases
(annualized) |                        |                   | .40                            | %       |                        |         | .24     | %     

Annualized net charge-offs equaled .40% of average loans and leases for the
first quarter of 2002, up from .24% in the first quarter of 2001. The increase
during the first quarter of 2002 was largely attributable to net charge-offs in
the indirect automobile portfolio, which posted a net charge-off ratio of 130
basis points during the three-month period. However, the rate declined to 109
basis points for the month of March 2002. Within the automobile portfolio, one
of the primary indicators of charge-off trends is the inventory of repossessed
units. Following the events surrounding September 11, 2001, the normal auction
process used to dispose of these units was severely restricted for several
weeks. This, coupled with aggressive new car promotions by the automobile
manufacturers, resulted in a temporary build-up of repossessed units at
December 31, 2001. This excess inventory was substantially liquidated during
the first quarter of 2002. At March 31, 2002, the repossessed inventory
represented .31% of the

13



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total portfolio units, down significantly from the .43%
high at the end of January 2002 and identical to the March 31, 2001 level.

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)

|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |          |        |        |         | 
|------------------------------------------------------------------- | -------------------------------------------------------- | --------------------------------------- | -------------------------- | ------------------------------------------------------------ | ------ | ---------------------- | ------- | -------- | ------ | ------ | ------- | 
|                                                                    |                                                          |                                         |                            |                                                              |        | 3/31/02                |         | 12/31/01
|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    |                                                          |                                         |                            |                                                              |        | (Dollars in thousands)
|Nonperforming loans and leases:                                     |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    | Nonaccrual loans and leases:                             |                                         |                            |                                                              |        |                        |         |          |       
|                                                                    |                                                          | Real estate mortgage loans:             |                            |                                                              |        |                        |         |          |        |       
|                                                                    |                                                          |                                         | One-to-four family(1)      |                                                              | $      | 82,721                 |         |          | $      | 79,394 |        
|                                                                    |                                                          |                                         | Multifamily and commercial |                                                              |        | 15,178                 |         |          |        | 13,552 |        
|                                                                    |                                                          |                                         | Construction and land      |                                                              |        | 12,713                 |         |          |        | 10,276 |        
|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    |                                                          |                                         |                            | Total real estate mortgage loans                             |        |                        | 110,612 |          |        |        | 103,222 | 
|                                                                    |                                                          | Retail consumer                         |                            |                                                              | 17,323 |                        |         |          | 16,592 |       
|                                                                    |                                                          | Automobile                              |                            |                                                              |       |                        |         |          |       |       
|                                                                    |                                                          | Consumer finance                        |                            |                                                              | 69,259 |                        |         |          | 68,485 |       
|                                                                    |                                                          | Leases                                  |                            |                                                              | 2,256  |                        |         |          | 904    |       
|                                                                    |                                                          | Corporate banking                       |                            |                                                              | 21,548 |                        |         |          | 10,551 |       
|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    |                                                          |                                         |                            | Total nonaccrual loans and leases                            |        |                        | 220,998 |          |        |        | 199,754 | 
|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    | 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)                      |                            |                                                              | 3,734  |                        |         |          | 4,519  |       
|                                                                    |                                                          | Automobile                              |                            |                                                              | 5,756  |                        |         |          | 6,000  |       
|                                                                    |                                                          | Consumer finance                        |                            |                                                              |       |                        |         |          |       |       
|                                                                    |                                                          | Leases                                  |                            |                                                              | 716    |                        |         |          |       |       
|                                                                    |                                                          | Corporate banking                       |                            |                                                              | 966    |                        |         |          | 4,691  |       
|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    |                                                          |                                         |                            | Total accruing loans and leases delinquent more than 90 days |        |                        | 11,172  |          |        |        | 15,210  | 
|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    | Restructured real estate mortgage loans                  |                                         |                            | 1,169                                                        |        |                        |         | 653      |       
|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    |                                                          |                                         |                            | Total nonperforming loans and leases                         |        |                        | 233,339 |          |        |        | 215,617 | 
|Real estate acquired through foreclosure and other collateral owned |                                                          |                                         | 53,291                     |                                                              |        |                        | 50,265  |         
|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    |                                                          |                                         |                            | Total nonperforming assets                                   |        |                        | 286,630 |          |        |        | 265,882 | 
|                                                                    |                                                          |                                         |                            | Total government guaranteed loans                            |        |                        | 23,389  |          |        |        | 21,506  | 
|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    |                                                          |                                         |                            | Nonperforming assets net of government guaranteed loans      |        | $                      | 263,241 |          |        | $      | 244,376 | 
|                                                                    |                                                          |                                         |                            |                                                              |        |                        |         |         
|Ratio of:                                                           |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    | Nonperforming loans and leases to total loans and leases |                                         |                            | .95                                                          | %      |                        |         | .84      | %     
|                                                                    | Nonperforming assets to total assets                     |                                         |                            | .76                                                          |        |                        |         | .70      |       
|                                                                    | Allowance for loan and lease losses to:                  |                                         |                            |                                                              |        |                        |         |          |       
|                                                                    |                                                          | Nonperforming loans and leases          |                            |                                                              | 110.83 |                        |         |          | 118.49 |       
|                                                                    |                                                          | Total loans and leases before allowance |                            |                                                              | 1.04   |                        |         |          | .98    |       
|Ratio of (excluding government guaranteed nonperforming loans):     |                                                          |                                         |                            |                                                              |        |                        |         |         
|                                                                    | Nonperforming loans and leases to total loans and leases |                                         |                            | .86                                                          |        |                        |         | .75      |       
|                                                                    | Nonperforming assets to total assets                     |                                         |                            | .70                                                          |        |                        |         | .64      |       
|                                                                    | Allowance for loan and lease losses to:                  |                                         |                            |                                                              |        |                        |         |          |       
|                                                                    |                                                          | Nonperforming loans and leases          |                            |                                                              | 123.17 |                        |         |          | 131.61 |       
|                                                                    |                                                          | Total loans and leases before allowance |                            |                                                              | 1.04   |                        |         |          | .98    |       



---

|(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 $245.0
million and $166.6

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million at March 31, 2002 and December 31, 2001,
respectively. The increase in the first quarter of 2002 is primarily comprised
of one lease relationship totaling $30.0 million related to the aircraft
industry and four lease relationships totaling $33.5 million related to the
mining industry. Although these leases remain current and are secured by
collateral, we internally downgraded the classifications associated with these
leases due to pressures realized in those industries.

As of March 31, 2002, substantially all of the $245.0 million of potential
problem loans and leases were current and had been current for the past 12
months. The vast majority of these loans and leases, as well as our
nonperforming assets, are collateralized. As such, we would anticipate that
any losses resulting from possible future charge-offs would be significantly
less than the respective loan and lease balances.

SOURCES OF FUNDS

Deposits

Composition of Deposits (Figure 11)

|                                            |                     |                     |            |           |            |          |      |                        |      |      |            |           |            |          |      |      |      | 
|------------------------------------------- | ------------------- | ------------------- | ---------- | --------- | ---------- | -------- | ---- | ---------------------- | ---- | ---- | ---------- | --------- | ---------- | -------- | ---- | ---- | ---- | 
|                                            |                     |                     |            | 3/31/02   |            | 12/31/01
|                                            |                     |                     |            |           |            |         
|                                            |                     |                     |            |           |            |          |      | Weighted               |      |      |            |           |            | Weighted
|                                            |                     |                     |            |           |            |          |      | Average                |      |      |            |           |            | Average 
|                                            |                     |                     |            | Amount    |            | Rate     |      | Amount                 |      | Rate
|                                            |                     |                     |            |           |            |          |      |                        |      |     
|                                            |                     |                     |            |           |            |          |      | (Dollars in thousands) |      |      |            |          
|Checking accounts:                          |                     |                     |            |           |            |          |      |                        |      |      |            |           |            |          |      |     
|                                            | Interest-bearing    |                     | $          | 6,121,320 |            |          |      | 2.02                   | %    |      | $          | 5,973,545 |            |          |      | 2.45 | %   
|                                            | Noninterest-bearing |                     |            | 1,813,449 |            |          |      |                       |      |      |            | 1,856,481 |            |          |      |     |     
|Money market and savings accounts           |                     |                     | 7,644,542  |           |            |          | 2.27 |                        |      |      | 6,737,160  |           |            |          | 2.26 |     
|Certificates of deposit                     |                     |                     | 10,057,421 |           |            |          | 4.20 |                        |      |      | 10,556,123 |           |            |          | 4.43 |     
|                                            |                     |                     |            |           |            |          |      |                        |      |      |            |           |            |          |      |     
|                                            |                     | Total deposits, net |            | $         | 25,636,732 |          |      |                        | 2.81 |      |            | $         | 25,123,309 |          |      |      | 3.05 | 
|                                            |                     |                     |            |           |            |          |      |                        |      |      |            |           |            |          |      |     
|Including the effect of interest rate swaps |                     |                     |            |           |            |          | 2.61 | %                      |      |      |            |           |            |          | 2.88 | %   

Investment securities and mortgage-backed securities with a par value of $471.4
million at March 31, 2002 and $573.0 million at December 31, 2001, were pledged
to secure public deposits and for other purposes required or permitted by law.

Borrowings

At March 31, 2002, borrowings consisted primarily of FHLB advances. These
positions were secured by our investment in the stock of the FHLB, as well as
$11.3 billion in certain real estate loans and $1.8 billion in mortgage-backed
securities.

Federal Home Loan Bank Advances (Figure 12)

|                                     |                                             |                |                     |           |           |           |          |      |                        |      |           |           |           |           |          |      |      |      | 
|------------------------------------ | ------------------------------------------- | -------------- | ------------------- | --------- | --------- | --------- | -------- | ---- | ---------------------- | ---- | --------- | --------- | --------- | --------- | -------- | ---- | ---- | ---- | 
|                                     |                                             |                |                     |           | 3/31/02   |           | 12/31/01
|                                     |                                             |                |                     |           |           |           |         
|                                     |                                             |                |                     |           |           |           |          |      | Weighted               |      |           |           |           |           | Weighted
|                                     |                                             |                |                     |           |           |           |          |      | Average                |      |           |           |           |           | Average 
|                                     |                                             |                |                     |           | Amount    |           | Rate     |      | Amount                 |      | Rate     
|                                     |                                             |                |                     |           |           |           |          |      |                        |      |          
|                                     |                                             |                |                     |           |           |           |          |      | (Dollars in thousands) |      |           |           |          
|Short-term                           |                                             | $              | 289,874             |           |           |           | 4.85     | %    |                        | $    | 1,114,873 |           |           |           | 3.03     | %   
|Long-term:                           |                                             |                |                     |           |           |           |          |      |                        |      |           |           |           |           |          |     
|                                     | Fixed-rate advances                         |                |                     | 7,118,084 |           |           |          | 5.52 |                        |      |           | 7,118,827 |           |           |          | 5.52 |     
|                                     | Variable-rate advances                      |                |                     | 409,604   |           |           |          | 1.71 |                        |      |           | 409,604   |           |           |          | 1.74 |     
|                                     |                                             |                |                     |           |           |           |          |      |                        |      |           |           |           |           |          |     
|                                     |                                             | Total advances |                     |           | 7,817,562 |           |          |      | 5.30                   |      |           |           | 8,643,304 |           |          |      | 5.02 |     
|Plus unamortized premium on advances |                                             |                | 12,503              |           |           |           |         |      |                        |      | 13,934    |           |           |           |         |     
|                                     |                                             |                |                     |           |           |           |          |      |                        |      |           |           |           |           |          |     
|                                     |                                             |                | Total advances, net |           | $         | 7,830,065 |          |      |                        | 5.22 |           |           | $         | 8,657,238 |          |      |      | 4.95 | 
|                                     |                                             |                |                     |           |           |           |          |      |                        |      |           |           |           |           |          |     
|                                     | Including the effect of interest rate swaps |                |                     |           |           |           |          | 5.30 | %                      |      |           |           |           |           |          | 5.02 | %   

Interest Rate Swaps

We use interest rate swaps as a means of managing our interest rate risk
profile (defined as the sensitivity of our earnings and economic value to
changes in interest rates). We utilize fixed receipt callable interest rate
swaps to convert certain longer-term callable certificates of deposit into
short-term variable instruments. Under these agreements Charter One has 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. Such interest rate swaps are designated and qualify as fair value
hedges under SFAS No. 133, Accounting for Derivative Instruments and

15



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Hedging Activities, as amended. We have assumed no ineffectiveness in the respective
hedging relationships. Any gain or loss on the interest rate swap was offset
by a gain or loss on the certificates of deposit during the period of change in
fair values.

We utilize fixed payment interest rate swaps to convert certain floating-rate
FHLB advances into fixed-rate instruments. Under these agreements, Charter One
has 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. Such interest rate swaps are designated
and qualify as cash flow hedges under SFAS No. 133. We have assumed no
ineffectiveness in the respective hedging relationships. Any gain or loss on
the interest rate swaps was offset by the expected future cash flows on the
FHLB advances during the period of change in fair values.

Information on the interest rate swaps, by maturity date, is as follows:

Interest Rate Swaps (Figure 13)

|                                   |      |       |   |           |           |           |  |          |      |           |  |                        |      |          |   |         |           |  |  |      |      |      |  |      |      |     
|---------------------------------- | ---- | ----- | - | --------- | --------- | --------- |  | -------- | ---- | --------- |  | ---------------------- | ---- | -------- | - | ------- | --------- |  |  | ---- | ---- | ---- |  | ---- | ---- | ----
|                                   |      |       |   | 3/31/02   |           | 12/31/01 
|                                   |      |       |   |           |           |          
|                                   |      |       |   | 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    |           |           |  | 1.92     | %    |           |  | 6.44                   | %    |          | $ | 25,000  |           |  |  | 3.73 | %    |      |  | 6.44 | %   
|                                   | 2003 |       |   | 409,604   |           |           |  | 1.90     |      |           |  | 3.55                   |      |          |   | 409,605 |           |  |  | 1.94 |      |      |  | 3.55 |     
|                                   |      |       |   |           |           |           |  |          |      |           |  |                        |      |          |   |         |           |  |  |      |      |      | 
|                                   |      | Total |   | $         | 434,604   |           |  |          | 1.90 | %(1)      |  |                        | 3.71 | %        |   | $       | 434,605   |  |  |      | 2.04 | %(1) |  |      | 3.71 | %   
|                                   |      |       |   |           |           |           |  |          |      |           |  |                        |      |          |   |         |           |  |  |      |      |      |  |     
|Variable Payment and Fixed
Receipt |      |       |   |           |           |           |  |          |      |           |  |                        |      |          |   |         |           |  |  |      |      |      |  |     
|                                   | 2003 |       | $ | 85,000    |           |           |  | 3.48     | %    |           |  | 1.86                   | %    |          | $ | 255,000 |           |  |  | 4.08 | %    |      |  | 2.14 | %   
|                                   | 2004 |       |   | 310,000   |           |           |  | 3.87     |      |           |  | 1.88                   |      |          |   |        |           |  |  |     |      |      |  |     |     
|                                   | 2006 |       |   | 710,000   |           |           |  | 5.71     |      |           |  | 1.91                   |      |          |   | 930,000 |           |  |  | 5.80 |      |      |  | 2.12 |     
|                                   | 2007 |       |   | 410,000   |           |           |  | 4.23     |      |           |  | 1.42                   |      |          |   | 10,000  |           |  |  | 7.25 |      |      |  | 2.36 |     
|                                   | 2010 |       |   | 10,000    |           |           |  | 7.40     |      |           |  | 1.81                   |      |          |   | 10,000  |           |  |  | 7.40 |      |      |  | 2.06 |     
|                                   | 2011 |       |   | 10,000    |           |           |  | 6.25     |      |           |  | 1.62                   |      |          |   | 45,000  |           |  |  | 6.33 |      |      |  | 1.94 |     
|                                   |      |       |   |           |           |           |  |          |      |           |  |                        |      |          |   |         |           |  |  |      |      |      |  |     
|                                   |      | Total |   | $         | 1,535,000 |           |  |          | 4.83 | %         |  |                        | 1.90 | %(1)     |   | $       | 1,250,000 |  |  |      | 5.49 | %    |  |      | 2.12 | %(1)
|                                   |      |       |   |           |           |           |  |          |      |           |  |                        |      |          |   |         |           |  |  |      |      |      |  |     



---

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

The fair value of the Companys interest rate swap contracts is estimated as
the difference in the present value of future cash flows between the Companys
existing agreements and current market rate agreements of the same duration.
Information on the fair values of the interest rate swaps is as follows:

Fair Value of Interest Rate Swaps (Figure 14)

|                        |                   |                  |   |                        |       |      |   |        |        | 
|----------------------- | ----------------- | ---------------- | - | ---------------------- | ----- | ---- | - | ------ | ------ | 
|                        |                   |                  |   | March 31,             
|                        |                   |                  |   |                       
|                        |                   |                  |   | 2002                   |       | 2001
|                        |                   |                  |   |                        |       |     
|                        |                   |                  |   | (Dollars in thousands)
|Unrealized gain (loss): |                   |                  |   |                        |       |      |   |       
|                        | Fair value hedges |                  | $ | 10,658                 |       |      | $ | 23,983 |       
|                        | Cash flow hedges  |                  |   | (1,074                 | )     |      |   | (542   | )     
|                        |                   |                  |   |                        |       |      |   |       
|                        |                   | Total fair value |   | $                      | 9,584 |      |   | $      | 23,441 | 
|                        |                   |                  |   |                        |       |      |   |       

The net benefit of interest rate swaps included in interest expense is as
follows:

Net Benefit of Interest Risk Management (Figure 15)

|                           |               |                   |   |                        |        |         |   |        |        |  
|-------------------------- | ------------- | ----------------- | - | ---------------------- | ------ | ------- | - | ------ | ------ | -
|                           |               |                   |   | Three months ended    
|                           |               |                   |   |                       
|                           |               |                   |   | 3/31/02                |        | 3/31/01
|                           |               |                   |   |                        |        |        
|                           |               |                   |   | (Dollars in thousands)
|Interest expense (income): |               |                   |   |                        |        |         |   |       
|                           | Deposits      |                   | $ | (11,412                | )      |         | $ | (3,192 | )     
|                           | FHLB advances |                   |   | 1,736                  |        |         |   |       |       
|                           |               |                   |   |                        |        |         |   |       
|                           |               | Total net benefit |   | $                      | (9,676 | )       |   | $      | (3,192 | )
|                           |               |                   |   |                        |        |         |   |       

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Liquidity

Our principal sources of funds are deposits, advances from the FHLB of
Cincinnati, federal funds purchased and repurchase agreements, repayments and
maturities of loans and securities, proceeds from the sale of loans and
securities, and funds provided by operations. While scheduled loan, security
and interest-bearing deposit amortization and maturity are relatively
predictable sources of funds, deposit flows and loan and mortgage-backed
securities repayments 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 repurchase agreements. Conversely, we may, from time to time, decide to
price deposits aggressively due to strategic reasons which may result in
significant deposit inflows.

In the ordinary course of business, we enter into off-balance-sheet financial
instruments consisting of commitments to extend credit, commercial letters of
credit, standby letters of credit and commitments to purchase or sell assets.
Such financial instruments are recorded in the financial statements when they
are funded or the related fees are incurred or received. We anticipate that we
will have sufficient funds available to meet our commitments. As of March 31,
2002, there were outstanding commitments to originate $1.4 billion of mortgage
loans and other loans and leases, all at market rates. Terms of the
commitments extend up to nine months, but are generally less than two months.
Additionally, there were also outstanding unfunded consumer lines of credit of
$3.9 billion and corporate banking lines of credit of $321.3 million as of
March 31, 2002. Substantially all of the consumer loans, including consumer
lines of credit, are secured by equity in the borrowers residences. The
Company does not expect all of these lines to be used by the borrowers.
Outstanding letters of credit totaled $91.8 million as of March 31, 2002.

Capital and Dividends

On September 12, 2001, the Company entered into an agreement with a third party
that provided the Company with an option to purchase up to $100 million of
Charter One common stock through the use of forward transactions. These
transactions could have been settled at Charter Ones election on a physical,
net cash or net share basis. On January 8, 2002, the Company settled open
forward transactions for 3.5 million shares of its common stock through
physical share settlement whereby the Company paid cash of $97.0 million, or
$27.69 per share, to a third party in exchange for the 3.5 million shares.
Common shares outstanding and shareholders equity were reduced accordingly on
the January 8, 2002 settlement date.

On April 23, 2002, the Companys Board of Directors authorized management to
repurchase up to 10% of the Companys outstanding common stock under a new
program of open market purchases or privately negotiated transactions. The
repurchased shares will be reserved in treasury for later reissue in connection
with employee benefit plans. This program replaced the repurchase program that
had been in effect since July 18, 2000 and under which the Company repurchased
approximately 15.0 million shares for a total cost of $394.8 million.

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. As a national bank, Charter One Bank, N.A. will be subject to
various capital requirements administered by the OCC. 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, 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 are as follows:

Regulatory Capital
(Figure 16)

17



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##### Table of Contents



|                          |                                          |                        |         |           |                   |  |                          |       |       |  |             |           |       |  |  |       |   |  |   |           |  |  |  |        |  
|------------------------- | ---------------------------------------- | ---------------------- | ------- | --------- | ----------------- |  | ------------------------ | ----- | ----- |  | ----------- | --------- | ----- |  |  | ----- | - |  | - | --------- |  |  |  | ------ | -
|                          |                                          |                        | 3/31/02
|                          |                                          |                        |        
|                          |                                          |                        |         |           |                   |  |                          |       |       |  | For Capital |           |       |  |  |       |   |  |  
|                          |                                          |                        | Actual  |           | Adequacy Purposes |  | To Be "Well Capitalized"
|                          |                                          |                        |         |           |                   |  |                         
|                          |                                          |                        | Amount  |           | Ratio             |  | Amount                   |       | Ratio |  | Amount      |           | Ratio
|                          |                                          |                        |         |           |                   |  |                          |       |       |  |             |           |      
|                          |                                          | (Dollars in thousands)
|Charter One:              |                                          |                        |         |           |                   |  |                          |       |       |  |             |           |       |  |  |       |   |  |   |           |  |  |  |       
|                          | Total capital to risk-weighted assets    |                        | $       | 2,761,060 |                   |  |                          | 10.26 | %     |  | $           | 2,153,301 |       |  |  | >8.00 | % |  | $ | 2,691,626 |  |  |  | >10.00 | %
|                          | Tier 1 capital to risk-weighted assets   |                        |         | 2,502,279 |                   |  |                          | 9.30  |       |  |             | 1,076,650 |       |  |  | >4.00 |   |  |   | 1,614,975 |  |  |  | >6.00  |  
|                          | Tier 1 capital to average assets         |                        |         | 2,502,279 |                   |  |                          | 6.75  |       |  |             | 1,482,984 |       |  |  | >4.00 |   |  |   | N/A       |  |  |  | N/A    |  
|Charter One Commercial:   |                                          |                        |         |           |                   |  |                          |       |       |  |             |           |       |  |  |       |   |  |   |           |  |  |  |       
|                          | Total capital to risk-weighted assets    |                        |         | 40,616    |                   |  |                          | 56.59 |       |  |             | 5,742     |       |  |  | >8.00 |   |  |   | 7,177     |  |  |  | >10.00 |  
|                          | Tier 1 capital to risk-weighted assets   |                        |         | 40,616    |                   |  |                          | 56.59 |       |  |             | 2,871     |       |  |  | >4.00 |   |  |   | 4,306     |  |  |  | >6.00  |  
|                          | Tier 1 capital to average assets         |                        |         | 40,616    |                   |  |                          | 14.52 |       |  |             | 11,187    |       |  |  | >4.00 |   |  |   | 13,984    |  |  |  | >5.00  |  
|Charter One Bank, F.S.B.: |                                          |                        |         |           |                   |  |                          |       |       |  |             |           |       |  |  |       |   |  |   |           |  |  |  |       
|                          | Total capital to risk-weighted assets    |                        |         | 2,740,176 |                   |  |                          | 10.44 |       |  |             | 2,098,894 |       |  |  | >8.00 |   |  |   | 2,623,618 |  |  |  | >10.00 |  
|                          | Tier 1 capital to risk-weighted assets   |                        |         | 1,983,001 |                   |  |                          | 7.56  |       |  |             | N/A       |       |  |  | N/A   |   |  |   | 1,574,171 |  |  |  | >6.00  |  
|                          | Core capital to adjusted tangible assets |                        |         | 2,007,870 |                   |  |                          | 5.38  |       |  |             | 1,492,729 |       |  |  | >4.00 |   |  |   | 1,865,911 |  |  |  | >5.00  |  
|                          | Tangible capital to tangible assets      |                        |         | 2,007,870 |                   |  |                          | 5.38  |       |  |             | 559,773   |       |  |  | >1.50 |   |  |   | N/A       |  |  |  | N/A    |  

|                          |                                          |                        |         |           |                   |  |                          |       |       |  |             |           |       |  |  |       |   |  |   |           |  |  |  |        |  
|------------------------- | ---------------------------------------- | ---------------------- | ------- | --------- | ----------------- |  | ------------------------ | ----- | ----- |  | ----------- | --------- | ----- |  |  | ----- | - |  | - | --------- |  |  |  | ------ | -
|                          |                                          |                        | 3/31/02
|                          |                                          |                        |        
|                          |                                          |                        |         |           |                   |  |                          |       |       |  | For Capital |           |       |  |  |       |   |  |  
|                          |                                          |                        | Actual  |           | Adequacy Purposes |  | To Be "Well Capitalized"
|                          |                                          |                        |         |           |                   |  |                         
|                          |                                          |                        | Amount  |           | Ratio             |  | Amount                   |       | Ratio |  | Amount      |           | Ratio
|                          |                                          |                        |         |           |                   |  |                          |       |       |  |             |           |      
|                          |                                          | (Dollars in thousands)
|Charter One:              |                                          |                        |         |           |                   |  |                          |       |       |  |             |           |       |  |  |       |   |  |   |           |  |  |  |       
|                          | Total capital to risk-weighted assets    |                        | $       | 2,773,390 |                   |  |                          | 10.23 | %     |  | $           | 2,168,434 |       |  |  | >8.00 | % |  | $ | 2,710,542 |  |  |  | >10.00 | %
|                          | Tier 1 capital to risk-weighted assets   |                        |         | 2,517,875 |                   |  |                          | 9.29  |       |  |             | 1,084,217 |       |  |  | >4.00 |   |  |   | 1,626,325 |  |  |  | >6.00  |  
|                          | Tier 1 capital to average assets         |                        |         | 2,517,875 |                   |  |                          | 6.81  |       |  |             | 1,479,451 |       |  |  | >4.00 |   |  |   | N/A       |  |  |  | N/A    |  
|Charter One Commercial:   |                                          |                        |         |           |                   |  |                          |       |       |  |             |           |       |  |  |       |   |  |   |           |  |  |  |       
|                          | Total capital to risk-weighted assets    |                        |         | 39,729    |                   |  |                          | 46.21 |       |  |             | 6,877     |       |  |  | >8.00 |   |  |   | 8,597     |  |  |  | >10.00 |  
|                          | Tier 1 capital to risk-weighted assets   |                        |         | 39,729    |                   |  |                          | 46.21 |       |  |             | 3,439     |       |  |  | >4.00 |   |  |   | 5,158     |  |  |  | >6.00  |  
|                          | Tier 1 capital to average assets         |                        |         | 39,729    |                   |  |                          | 13.72 |       |  |             | 11,579    |       |  |  | >4.00 |   |  |   | 14,474    |  |  |  | >5.00  |  
|Charter One Bank, F.S.B.: |                                          |                        |         |           |                   |  |                          |       |       |  |             |           |       |  |  |       |   |  |   |           |  |  |  |       
|                          | Total capital to risk-weighted assets    |                        |         | 2,659,977 |                   |  |                          | 10.01 |       |  |             | 2,125,856 |       |  |  | >8.00 |   |  |   | 2,657,320 |  |  |  | >10.00 |  
|                          | Tier 1 capital to risk-weighted assets   |                        |         | 1,910,830 |                   |  |                          | 7.19  |       |  |             | N/A       |       |  |  | N/A   |   |  |   | 1,594,392 |  |  |  | >6.00  |  
|                          | Core capital to adjusted tangible assets |                        |         | 1,932,552 |                   |  |                          | 5.12  |       |  |             | 1,509,358 |       |  |  | >4.00 |   |  |   | 1,886,698 |  |  |  | >5.00  |  
|                          | Tangible capital to tangible assets      |                        |         | 1,932,552 |                   |  |                          | 5.12  |       |  |             | 566,009   |       |  |  | >1.50 |   |  |   | N/A       |  |  |  | N/A    |  

Management believes that, as of March 31, 2002, 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.

On January 7, 2002, Charter One Bank, F.S.B. filed an application with the OCC
to convert to a national bank charter. The conversion was effective May 7,
2002. The following table presents pro forma capital ratios at March 31, 2002
for Charter One and Charter One Bank, N.A., along with the capital amounts and
ratios for capital adequacy purposes and the amounts required to be categorized
as well capitalized based on the capital requirements administered by the OCC:

18



---



##### Table of Contents



Pro Forma Regulatory Capital (Figure 17)

|                        |                                        |                        |                  |           |                   |  |                          |       |       |  |             |           |       |  |  |       |   |  |   |           |  |  |  |        |  
|----------------------- | -------------------------------------- | ---------------------- | ---------------- | --------- | ----------------- |  | ------------------------ | ----- | ----- |  | ----------- | --------- | ----- |  |  | ----- | - |  | - | --------- |  |  |  | ------ | -
|                        |                                        |                        | 3/31/02         
|                        |                                        |                        |                 
|                        |                                        |                        |                  |           |                   |  |                          |       |       |  | For Capital |           |       |  |  |       |   |  |  
|                        |                                        |                        | Pro Forma Actual |           | Adequacy Purposes |  | To Be "Well Capitalized"
|                        |                                        |                        |                  |           |                   |  |                         
|                        |                                        |                        | Amount           |           | Ratio             |  | Amount                   |       | Ratio |  | Amount      |           | Ratio
|                        |                                        |                        |                  |           |                   |  |                          |       |       |  |             |           |      
|                        |                                        | (Dollars in thousands)
|Charter One:            |                                        |                        |                  |           |                   |  |                          |       |       |  |             |           |       |  |  |       |   |  |   |           |  |  |  |       
|                        | Total capital to risk-weighted assets  |                        | $                | 2,761,060 |                   |  |                          | 10.61 | %     |  | $           | 2,081,376 |       |  |  | >8.00 | % |  | $ | 2,601,721 |  |  |  | >10.00 | %
|                        | Tier 1 capital to risk-weighted assets |                        |                  | 2,502,279 |                   |  |                          | 9.62  |       |  |             | 1,040,688 |       |  |  | >4.00 |   |  |   | 1,561,032 |  |  |  | >6.00  |  
|                        | Tier 1 capital to average assets       |                        |                  | 2,502,279 |                   |  |                          | 6.75  |       |  |             | 1,482,984 |       |  |  | >4.00 |   |  |   | N/A       |  |  |  | N/A    |  
|Charter One Bank, N.A.: |                                        |                        |                  |           |                   |  |                          |       |       |  |             |           |       |  |  |       |   |  |   |           |  |  |  |       
|                        | Total capital to risk-weighted assets  |                        |                  | 2,784,247 |                   |  |                          | 10.74 |       |  |             | 2,072,744 |       |  |  | >8.00 |   |  |   | 2,590,930 |  |  |  | >10.00 |  
|                        | Tier 1 capital to risk-weighted assets |                        |                  | 2,002,533 |                   |  |                          | 7.73  |       |  |             | 1,036,372 |       |  |  | >4.00 |   |  |   | 1,554,558 |  |  |  | >6.00  |  
|                        | Tier 1 capital to average assets       |                        |                  | 2,002,533 |                   |  |                          | 5.42  |       |  |             | 1,477,878 |       |  |  | >4.00 |   |  |   | 1,847,348 |  |  |  | >5.00  |  

Quarterly Stock Prices and Dividends (Figure 18)

|                                 |       |  |                    |       |          |  |         |       |         |  |         |       |  |  |     |       |  |  |     |       | 
|-------------------------------- | ----- |  | ------------------ | ----- | -------- |  | ------- | ----- | ------- |  | ------- | ----- |  |  | --- | ----- |  |  | --- | ----- | 
|                                 |       |  | Three Months Ended
|                                 |       |  |                   
|                                 |       |  | 3/31/02            |       | 12/31/01 |  | 9/30/01 |       | 6/30/01 |  | 3/31/01
|                                 |       |  |                    |       |          |  |         |       |         |  |        
|Market price of common stock(1): |       |  |                    |       |          |  |         |       |         |  |         |       |  |  |     |       |  |  |     |      
|                                 | High  |  | $                  | 32.50 |          |  | $       | 29.46 |         |  | $       | 31.41 |  |  | $   | 30.38 |  |  | $   | 28.56 | 
|                                 | Low   |  |                    | 26.45 |          |  |         | 24.60 |         |  |         | 23.40 |  |  |     | 25.23 |  |  |     | 24.19 | 
|                                 | Close |  |                    | 31.22 |          |  |         | 27.15 |         |  |         | 28.22 |  |  |     | 30.38 |  |  |     | 26.95 | 
|Dividends declared and paid(1)   |       |  | .20                |       |          |  | .20     |       |         |  | .19     |       |  |  | .19 |       |  |  | .17 |      



---

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




ITEM 3. Quantitative and Qualitative Disclosure About Market Risk

A comprehensive qualitative and quantitative analysis regarding market risk was
disclosed in our December 31, 2001 Form 10-K. No material changes in the
assumptions used or results obtained from the model have occurred since
December 31, 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 April 23, 2002, the Companys Board of Directors declared a
regular quarterly cash dividend of $.22 per share, up 10% from the dividend
paid in the first quarter of 2002. The cash dividend is payable May 20, 2002
to shareholders of record on May 6, 2002.

Common Stock Repurchase Program On April 23, 2002, the Companys Board of
Directors authorized management to repurchase up to 10% of the Companys
outstanding common stock under a new program of open market purchases or
privately negotiated transactions. The repurchased shares will be reserved in
treasury for later reissue in connection with employee benefit plans. This
program replaced the repurchase program that had been in effect since July 18,
2000, under which the Company repurchased approximately 15.0 million shares.




ITEM 6. Exhibits and Reports on Form 8-K



|(a) |  | Exhibits: See attached Index to Exhibits.                                                                                               
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Reports on Form 8-K: On February 1, 2002, the Company filed a report on
Form 8-K containing its earnings release dated January 22, 2002.

19



---



##### Table of Contents






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: May 8, 2002 |  | /s/ Richard W. NeuRichard W. Neu
Executive Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal
Financial and Accounting Officer)

20



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##### 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. 001-15495),
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 30, 1999 (File No.
001-15495), 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. 000-16311)
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. 000-16311),
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 filed as
Exhibit 10.7 to the
Registrants Report on
Form 10-K for the fiscal
year ended December 31,
1998 (File No. 000-16311),
is incorporated herein by
reference. 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. 000-16311),
is incorporated herein by
reference.                                                                                                                                                                                                                   
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|10.9    |  | Alliance Bancorp 1997
Long-Term Incentive Stock
Benefit Plan, filed as an
attachment to the proxy
statement for the annual
meeting of stockholders of
Alliance held on May 28,
1997 (File No. 000-20082),
is incorporated herein by
reference.                                                                                                                                                                                                                                                                                                                                       
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|10.10   |  | Hinsdale Financial
Corporation 1994 Incentive
Stock Option Plan, filed
as an attachment to the
proxy statement for the
annual meeting of
stockholders of Alliance
held on February 8, 1995
(File No. 000-20082), is
incorporated herein by
reference.                                                                                                                                                                                                                                                                                                                                

21



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##### Table of Contents



|      |  |                                                                                                                                                                                                                                                                                                                                        
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.11 |  | Hinsdale Financial
Corporation 1992 Stock
Option Plan for Outside
Directors and the Hinsdale
Financial Corporation 1992
Incentive Stock Option
Plan, filed as attachments
to the proxy statement for
the annual meeting of
stockholders of Alliance
held on February 10, 1993
(File No. 000-20082) is
incorporated herein by
reference.
|      |  |                                                                                                                                                                                                                                                                                                                                        
|10.12 |  | 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.                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                                        
|10.13 |  | 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.                                                                                                                      
|      |  |                                                                                                                                                                                                                                                                                                                                        
|10.14 |  | 1992 Stock-Based
Compensation Plan of RCS
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.                                                                                                           
|      |  |                                                                                                                                                                                                                                                                                                                                        
|10.15 |  | 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.                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                                        
|10.16 |  | 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.                                                                                                                                 
|      |  |                                                                                                                                                                                                                                                                                                                                        
|10.17 |  | 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. 000-16311), is
incorporated herein by
reference.                                       
|      |  |                                                                                                                                                                                                                                                                                                                                        
|10.18 |  | 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.
000-19843), is
incorporated herein by
reference.                                               
|      |  |                                                                                                                                                                                                                                                                                                                                        
|10.19 |  | 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. 000-19843), is
incorporated herein by
reference.                                                                                          
|      |  |                                                                                                                                                                                                                                                                                                                                        
|10.20 |  | 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 (File No. 001-19843), is
incorporated herein by reference.                                                                
|      |  |                                                                                                                                                                                                                                                                                                                                        
|10.21 |  | 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. 000-16311), is incorporated herein by reference.                                                 
|      |  |                                                                                                                                                                                                                                                                                                                                        
|10.22 |  | 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.                                                                           
|      |  |                                                                                                                                                                                                                                                                                                                                        
|11    |  | Statement Regarding Computation of Per Share Earnings                                                                                                                                                                                                                                                                                  

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