FirstMerit (FMER) 10-Q 2001 Q3 Quarterly report

TABLE OF CONTENTS

PART I -- FINANCIAL STATEMENTS
	ITEM 1. FINANCIAL STATEMENTS
	ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PART II. -- OTHER INFORMATION
	Item 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
EXHIBIT 21--Direct and Indirect Subsidiaries

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

þ	QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended September 30, 2001

COMMISSION FILE NUMBER 0-10161

FirstMerit Corporation

(Exact name of registrant as specified in its charter)

OHIO	34-1339938
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)

III CASCADE PLAZA, 7TH FLOOR, AKRON, OHIO

44308-1103

(Address of principal Executive Offices)

(330) 996-6300

(Telephone Number)

OUTSTANDING SHARES OF COMMON STOCK, AS OF

November 1, 2001

84,825,832

     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 þ           No o

FIRSTMERIT CORPORATION

PART I — FINANCIAL STATEMENTS

Item 1.      Financial Statements

     The following statements included in the quarterly unaudited report to shareholders are incorporated by reference:

Consolidated Balance Sheets as of September 30, 2001, December 31, 2000 and September 30, 2000

Consolidated Statements of Income for the three-month and nine-month periods ended September 30, 2001 and 2000

Consolidated Statements of Changes in Shareholders’ Equity for the year ended December 31, 2000 and for the nine months ended September, 30 2001

Consolidated Statements of Cash Flows for the nine months ended September 30, 2001 and 2000

Notes to Consolidated Financial Statements as of September 30, 2001, December 31, 2000, and September 30, 2000

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Conditions as of September 30, 2001, December 31, 2000 and September 30, 2000 and Results of Operations for the quarter and nine months ended September 30, 2001 and 2000 and for the year ended December 31, 2000.

2

FIRSTMERIT CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

			September 30			December 31			September 30
(Unaudited, except December 31, 2000)			2001			2000			2000
ASSETS
Investment securities			$	2,002,565			2,002,291			2,214,269
Federal funds sold & other investments				—			8,100			100
Loans held for sale				56,221			135,753			202,733
Commercial loans				3,502,831			3,251,761			3,254,343
Mortgage loans				656,892			848,225			860,933
Installment loans				1,532,681			1,497,270			1,516,368
Home equity loans				479,780			453,462			446,876
Credit card loans				128,353			117,494			110,020
Manufactured housing loans				818,501			786,641			784,328
Leases				271,774			282,232			288,956
Total loans				7,390,812			7,237,085			7,261,824
Less allowance for loan losses				110,498			108,285			108,576
		Net loans		7,280,314			7,128,800			7,153,248
Cash and due from banks				225,362			235,918			215,066
Premises and equipment, net				132,343			133,894			134,904
Intangible assets				145,056			152,107			154,676
Accrued interest receivable and other assets				414,404			418,340			297,218
			$	10,256,265			10,215,203			10,372,214
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
	Demand—noninterest bearing		$	1,055,830			1,078,586			997,813
	Demand—interest bearing			682,906			681,771			627,533
	Savings and Money Market			1,958,706			1,805,505			1,785,142
	Certificates and other time deposits			3,723,067			4,049,070			4,220,393
		Total deposits		7,420,509			7,614,932			7,630,881
Wholesale borrowings				1,740,892			1,563,404			1,707,561
		Total funds		9,161,401			9,178,336			9,338,442
Accrued taxes, expenses, and other liabilities				153,165			121,978			136,854
		Total liabilities		9,314,566			9,300,314			9,475,296
Shareholders’ equity:
	Preferred Stock, without par value: authorized 7,000,000 shares			—			—			—
	Preferred Stock, Series A, without par value: designated 800,000 shares; none outstanding			—			—			—
	Cumulative convertible preferred stock, Series B, without par value: designated 220,000 shares; 51,605, 106,558 and 105,658 shares outstanding at September 30, 2001, September 30, 2000 and December 31, 2000, respectively			1,242			2,501			2,564
	Common stock, without par value: authorized 300,000,000 shares; issued 91,979,362 shares			127,937			127,937			127,937
	Capital surplus			109,767			113,326			113,421
	Accumulated other comprehensive income			17,311			(13,798	)		(35,435	)
	Retained earnings			857,234			802,905			782,345
	Treasury stock, at cost, 7,086,681, 3,870,425 and 4,947,047 at September 30, 2001, September 30, 2000 and December 31, 2000, respectively			(171,792	)		(117,982	)		(93,914	)
		Total shareholders’ equity		941,699			914,889			896,918
			$	10,256,265			10,215,203			10,372,214

Certain previously reported amounts may have been reclassified to conform to current accounting practices

See accompanying notes to consolidated financial statements.

3

FIRSTMERIT CORPORATION

AVERAGE CONSOLIDATED BALANCE SHEETS

			Unaudited															Unaudited
			3rd Qtr			2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			3Q YTD			3Q YTD
(Dollars in thousands)			2001			2001			2001			2000			2000			2001			2000
ASSETS
Investment securities/fed funds sold			$	2,000,193			1,907,300			1,905,192			2,185,718			2,366,078			1,937,910			2,335,259
Loans held for sale				33,483			93,012			114,794			203,699			53,271			80,132			53,892
Commercial loans				3,504,874			3,479,914			3,405,933			3,246,067			3,285,203			3,463,936			3,248,538
Mortgage loans				676,176			770,590			838,962			863,253			877,575			761,313			889,598
Installment loans				1,521,873			1,431,821			1,405,589			1,516,316			1,517,726			1,453,520			1,498,313
Home Equity loans				473,862			459,872			454,250			450,193			440,469			462,733			426,189
Credit card loans				124,327			119,328			116,377			112,679			108,297			120,040			105,944
Manufactured housing loans				821,042			799,722			797,826			788,502			858,654			806,282			824,513
Leases				280,558			289,057			286,522			284,075			291,298			285,357			291,678
Loans less unearned income				7,402,712			7,350,304			7,305,459			7,261,085			7,379,222			7,353,181			7,284,773
Less: allowance for loan losses				111,118			111,001			108,616			109,359			110,777			110,255			109,427
		Net loans		7,291,594			7,239,303			7,196,843			7,151,726			7,268,445			7,242,926			7,175,346
Cash and due from banks				192,359			184,427			193,394			179,809			205,949			190,056			230,075
Premises and equipment, net				133,257			134,451			133,952			134,505			135,049			133,883			134,388
Accrued interest receivable and other assets				561,251			570,001			564,644			487,368			464,019			565,016			449,885
Total Assets			$	10,212,137			10,128,494			10,108,819			10,342,825			10,492,811			10,149,923			10,378,845
LIABILITIES
Deposits:
	Demand-non-interest bearing		$	1,063,015			1,057,315			1,015,171			1,031,499			1,027,707			1,045,415			938,308
	Demand-interest bearing			667,776			669,298			647,726			632,477			620,211			661,673			636,401
	Savings and money market			1,949,555			1,911,757			1,832,240			1,810,171			1,791,848			1,898,280			1,877,695
	Certificates and other time deposits			3,749,049			3,751,908			3,963,871			4,120,637			4,260,371			3,820,823			3,902,243
		Total deposits		7,429,395			7,390,278			7,459,008			7,594,784			7,700,137			7,426,191			7,354,647
Wholesale borrowings				1,704,650			1,674,005			1,583,314			1,711,155			1,774,955			1,654,434			2,032,653
		Total funds		9,134,045			9,064,283			9,042,322			9,305,939			9,475,092			9,080,625			9,387,300
Accrued taxes, expenses and other liabilities				157,693			157,509			150,665			141,077			143,792			155,043			140,748
		Total liabilities		9,291,738			9,221,792			9,192,987			9,447,016			9,618,884			9,235,668			9,528,048
Preferred stock				1,319			2,181			2,383			2,537			2,700			1,957			3,389
Common stock				127,937			127,937			127,937			127,937			127,937			127,937			127,937
Capital surplus				110,006			111,782			112,151			113,299			113,830			111,305			115,428
Accumulated other comprehensive income				2,976			(4,367	)		(6,357	)		(31,641	)		(47,358	)		(2,552	)		(53,212	)
Retained earnings				841,787			826,255			806,390			788,988			767,448			824,871			746,929
Treasury stock				(163,626	)		(157,086	)		(126,672	)		(105,311	)		(90,630	)		(149,263	)		(89,674	)
		Total shareholders’ equity		920,399			906,702			915,832			895,809			873,927			914,255			850,797
LIABILITIES AND SHAREHOLDERS’ EQUITY			$	10,212,137			10,128,494			10,108,819			10,342,825			10,492,811			10,149,923			10,378,845

Certain previously reported amounts may have been reclassified to conform to current presentation.

See accompanying notes to consolidated financial statements.

4

FIRSTMERIT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE INCOME

				(Unaudited)
				(In thousands except per share data)
				Quarters				Nine Months
				Ended				Ended
				September 30,				September 30,
				2001		2000		2001			2000
Interest income:
	Interest and fees on loans			$	151,472		164,165		465,626			476,447
	Interest and dividends on securities				29,763		38,187		88,886			113,198
			Total interest income		181,235		202,352		554,512			589,645
Interest expense:
		Demand-interest bearing			907		878		3,138			2,562
		Savings			10,679		13,769		37,112			37,925
		Certificates and other time deposits			50,093		66,173		165,997			170,558
	Interest on securities sold under agreements to repurchase and other borrowings				18,372		29,206		61,633			94,534
			Total interest expense		80,051		110,026		267,880			305,579
			Net interest income		101,184		92,326		286,632			284,066
Provision for loan losses					10,931		5,447		32,141			25,507
			Net interest income after provision for loan losses		90,253		86,879		254,491			258,559
Other income:
	Trust department income				5,182		5,411		15,917			16,919
	Service charges on deposits				13,723		11,935		39,751			34,585
	Credit card fees				8,886		8,289		26,464			23,795
	ATM and other service fees				3,889		3,994		11,439			11,574
	Bank owned life insurance income				3,188		1,054		9,431			2,828
	Broker/dealer, insurance, letters of credit				3,343		3,416		10,715			10,381
	Gain from sale of partnership interest				—		—		5,639			—
	Manufactured housing income				1,087		1,344		3,784			2,917
	Securities gains (losses)				235		26		643			(551	)
	Loan sales and servicing				3,482		3,831		8,191			8,334
	Other operating income				1,295		2,771		5,481			9,365
			Total other income		44,310		42,071		137,455			120,147
					134,563		128,950		391,946			378,706
Other expenses:
	Salaries, wages, pension and employee benefits				32,896		32,135		97,540			95,507
	Net occupancy expense				5,515		5,021		15,392			15,677
	Equipment expense				4,381		4,451		12,766			13,016
	Stationary, supplies and postage				3,003		2,933		8,479			9,482
	Bankcard, loan processing and other costs				7,366		4,053		18,400			13,598
	Professional services				2,745		2,822		8,651			7,244
	Amortization of intangibles				2,332		2,609		7,052			7,985
	Other operating expense				13,865		16,080		44,204			42,401
			Total other expenses		72,103		70,104		212,484			204,910
			Income before Federal income taxes and cumulative effect of change in accounting principle		62,460		58,846		179,462			173,796
Federal income taxes					20,559		18,781		58,684			54,056
			Income after taxes but before cumulative effect of change in accounting principle		41,901		40,065		120,778			119,740
Cumulative effect of change in accounting principle, net of tax (impairment of retained interest asset)					—		—		(6,299	)		—
			Net income	$	41,901		40,065		114,479			119,740
Other comprehensive income, net of taxes					23,868		16,717		31,109			9,647
Comprehensive Income				$	65,769		56,782		145,588			129,387
Basic net income per share:
	Income before cumulative change in accounting principle			$	0.49		0.45		1.40			1.35
	Cumulative effect of change in accounting principle, net of tax				—		—		(0.07	)		—
Basic net income				$	0.49		0.45		1.33			1.35
Diluted net income per share:
	Income before cumulative change in accounting principle			$	0.49		0.45		1.40			1.35
	Cumulative effect of change in accounting principle, net of tax				—		—		(0.07	)		—
Diluted net income				$	0.49		0.45		1.33			1.35
		Dividends paid		$	0.23		0.22		0.69			0.64
Weighted-average shares outstanding — basic					85,252		88,252		85,815			88,302
Weighted-average shares outstanding — diluted					85,875		89,008		86,540			89,036

Certain previously reported amounts may have been reclassified to conform to current reporting practices

See accompanying notes to consolidated financial statements.

5

Consolidated Statements of Changes in Shareholders’ Equity

FIRSTMERIT CORPORATION AND SUBSIDIARIES

(In thousands except per share data)

											Accumulated
											Other									Total
		Preferred			Common			Capital			Comprehensive			Retained			Treasury			Shareholders’
		Stock			Stock			Surplus			Income			Earnings			Stock			Equity
Balance at December 31, 1998		$	9,299			122,387			117,845			5,858			668,837			(17,570	)		906,656
	Net income		—			—			—			—			119,871			—			119,871
	Cash dividends — common stock ($0.76/share)		—			—			—			—			(68,627	)		—			(68,627	)
	Cash dividends — preferred stock		—			—			—			—			(305	)		—			(305	)
	Options exercised/debentures, preferred stock converted		(5,421	)		5,596			(915	)		—			—			12,549			11,809
	Treasury shares purchased		—			—			—			—			—			(85,666	)		(85,666	)
	Market adjustment investment securities		—			—			—			(50,940	)		—			—			(50,940	)
	Other		—			(46	)		—			—			35			788			777
Balance at December 31, 1999			3,878			127,937			116,930			(45,082	)		719,811			(89,899	)		833,575
	Net income (loss)		—			—			—			—			159,787			—			159,787
	Cash dividends — common stock ($0.86 per share)		—			—			—			—			(76,162	)		—			(76,162	)
	Cash dividends — preferred stock		—			—			—			—			(218	)		—			(218	)
	Options exercised/debentures, preferred stock converted		(1,377	)		—			(3,604	)		—			—			6,807			1,826
	Treasury shares purchased		—			—			—			—			—			(34,890	)		(34,890	)
	Market adjustment investment securities		—			—			—			31,284			—			—			31,284
	Other		—			—			—			—			(313	)		—			(313	)
Balance at December 31, 2000			2,501			127,937			113,326			(13,798	)		802,905			(117,982	)		914,889
	Net Income		—			—			—			—			114,479			—			114,479
	Cash dividends — common stock ($0.69 per share)		—			—			—			—			(59,581	)		—			(59,581	)
	Cash dividends — preferred stock		—			—			—			—			(101	)		—			(101	)
	Options exercised (111,866 shares)		—			—			(1,418	)		—			—			2,857			1,439
	Preferred stock converted (145,210 shares)		(1,259	)		—			(2,473	)		—			—			3,732			—
	Debentures converted (9,092 shares)		—			—			(127	)		—			—			207			80
	Treasury shares purchased (2,405,802 shares)		—			—			—			—			—			(60,606	)		(60,606	)
	Market adjustment investment securities		—			—			—			31,109			(527	)		—			30,582
	Other		—			—			459			—			59			—			518
Balance at September 30, 2001 — Unaudited		$	1,242			127,937			109,767			17,311			857,234			(171,792	)		941,699

Certain previously reported amounts may have been reclassified to conform to current accounting practices.

See accompanying notes to consolidated financial statements.

6

FIRSTMERIT CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2001 and 2000

			Unaudited
(In thousands)			2001			2000
Operating Activities
Net income			$	114,479			119,740
Adjustments to reconcile net income to net cash provided by operating activities:
		Provision for loan losses		32,141			25,507
		Provision for depreciation and amortization		11,686			12,512
		Amortization of investment securities premiums, net		117			464
		Amortization of income for lease financing		(10,958	)		(10,605	)
		(Gains) losses on sales of investment securities, net		(643	)		551
		Deferred federal income taxes		9,627			6,737
		(Increase) decrease in interest receivable		12,001			(14,217	)
		Increase (decrease) in interest payable		(22,499	)		32,016
		Proceeds from sales of loans		476,359			87,994
		Gain on sales of loans		(357	)		(1,270	)
		Amortization of values ascribed to acquired intangibles		7,052			7,985
		Increase in software		(3,151	)		(10,333	)
		Increase in other prepaid assets		(9,316	)		(10,994	)
		(Increase) decrease in miscellaneous assets		13,849			(11,291	)
		Increase (decrease) in accounts payable		24,503			(10,177	)
		Other increases (decreases)		(5,843	)		(36,589	)
NET CASH PROVIDED BY OPERATING ACTIVITIES				649,047			188,030
Investing Activities
Dispositions of investment securities:
	Available-for-sale — sales			323,737			121,709
	Available-for-sale — maturities			437,161			215,707
Purchases of investment securities available-for-sale				(713,595	)		(142,636	)
Net decrease in federal funds sold				8,100			25,000
Net increase in loans and leases, except sales				(569,167	)		(502,318	)
Purchases of premises and equipment				(11,955	)		(18,962	)
Sales of premises and equipment				1,820			3,765
NET CASH USED BY INVESTING ACTIVITIES				(523,899	)		(297,735	)
Financing Activities
Net increase in demand, NOW and savings deposits				131,580			44,009
Net increase (decrease) in time deposits				(326,003	)		726,725
Net increase (decrease) in securities sold under repurchase agreements and other borrowings				177,488			(595,132	)
Cash dividends — common and preferred				(59,682	)		(57,064	)
Purchase of treasury shares				(60,606	)		(11,742	)
Proceeds from exercise of stock options				1,439			2,904
Proceeds from conversion of debentures				80			—
NET CASH PROVIDED BY FINANCING ACTIVITIES				(135,704	)		109,700
Increase (decrease) in cash and cash equivalents				(10,556	)		(5	)
Cash and cash equivalents at beginning of year				235,918			215,071
Cash and cash equivalents at end of year			$	225,362			215,066
Supplemental Disclosure of Cash Flows Information:
Cash paid during the year for:
	Interest, net of amounts capitalized		$	136,618			146,683
	Income taxes		$	34,227			50,970

Certain previously reported amounts may have been reclassified to conform to current accounting practices.

See accompanying notes to consolidated financial statements.

7

FirstMerit Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2001, December 31, 2000 and September 30, 2000

1.  Organization — FirstMerit Corporation (“Corporation”), is a bank holding company whose principal assets are the common stock of its wholly owned subsidiary, FirstMerit Bank, N. A. In addition FirstMerit Corporation owns all of the common stock of Citizens Investment Corporation, Citizens Savings Corporation of Stark County, FirstMerit Capital Trust I, FirstMerit Community Development Corporation, FirstMerit Credit Life Insurance Company, FMT, Inc. and SF Development Corp.

2.  Segment Information — The Corporation provides a diversified range of banking and certain nonbanking financial services and products through its various subsidiaries. Management reports the Corporation’s results through its major segment classification — Supercommunity Banking. Included in this category are certain nonbank affiliates, eliminations of certain intercompany transactions and certain nonrecurring transactions. Also included are portions of certain assets, capital, and support functions not specifically identifiable with Supercommunity Banking. All figures within the tables in this footnote are in thousands, except averages are in millions.

						Parent, Subs
	Supercommunity					&						Corporate
	Banking					Eliminations						Consolidated
2001	3Q		YTD			3Q			YTD			3Q			YTD
Operations:
Net interest income	$	102,061		288,630			(877	)		(1,998	)		101,184			286,632
Provision for loan losses		10,931		32,141			—			—			10,931			32,141
Other income		43,881		136,228			429			1,227			44,310			137,455
Other expenses		72,164		212,244			(61	)		240			72,103			212,484
Income after tax but before cumulative accounting change		41,749		121,507			152			(729	)		41,901			120,778
Accounting change, net of tax		—		(6,299	)		—			—			—			(6,299	)
Net income		41,749		115,208			152			(729	)		41,901			114,479
Averages:
Assets		10,185		10,123			NM			NM			10,212			10,150
Loans		7,400		7,351			NM			NM			7,403			7,353
Earnings assets		9,410		9,355			NM			NM			9,436			9,371
Deposits		7,435		7,435			NM			NM			7,429			7,426
Equity	$	824		801			NM			NM			920			914
Ratios:
ROE before accounting change		NM		NM			NM			NM			18.09	%		17.70	%
ROE		NM		NM			NM			NM			18.09	%		16.78	%
ROA before accounting change		NM		NM			NM			NM			1.63	%		1.59	%
ROA		NM		NM			NM			NM			1.63	%		1.51	%
Efficiency ratio (excludes accounting change)		NM		NM			NM			NM			47.72	%		48.21	%

8

	Supercommunity				Parent, Subs						Corporate
	Banking				& Eliminations						Consolidated
2000	3Q		YTD		3Q			YTD			3Q			YTD
Operations:
Net interest income	$	96,419		290,088		(4,093	)		(6,022	)		92,326			284,066
Provision for loan losses		5,447		25,410		—			97			5,447			25,507
Other income		41,694		118,706		377			1,441			42,071			120,147
Other expenses		69,465		204,133		639			777			70,104			204,910
Net income		41,612		118,341		(1,547	)		1,399			40,065			119,740
Averages:
Assets		10,949		10,320		NM			NM			10,493			10,379
Loans		7,667		7,283		NM			NM			7,379			7,285
Earnings assets		10,199		9,662		NM			NM			9,799			9,674
Deposits		8,698		7,371		NM			NM			7,700			7,355
Equity	$	0.904		0.873		NM			NM			0.874			0.851
Ratios:
ROCE (ROE)		NM		NM		NM			NM			18.29	%		18.87	%
ROA		NM		NM		NM			NM			1.52	%		1.54	%
Efficiency ratio*		NM		NM		NM			NM			49.88	%		48.30	%

	Supercommunity				Parent, Subs						Corporate
	Banking				& Eliminations						Consolidated
1999	3Q		YTD		3Q			YTD			3Q			YTD
Operations:
Net interest income	$	96,669		295,830		1,302			(1,445	)		97,971			294,385
Provision for loan losses		6,623		32,233		290			735			6,913			32,968
Other income		35,668		107,478		2,866			5,529			38,534			113,007
Other expenses		74,431		254,365		(3,523	)		(5,111	)		70,908			249,254
Income before extraordinary item		33,859		73,780		6,045			10,375			39,904			84,155
Net income		33,859		67,933		6,045			10,375			39,904			78,308
Averages:
Assets		9,610		9,328		NM			NM			9,598			9,352
Loans		7,020		6,808		NM			NM			7,038			6,815
Earnings assets		8,832		8,622		NM			NM			8,902			8,618
Deposits		6,898		6,818		NM			NM			6,844			6,774
Equity	$	0.840		0.832		NM			NM			0.863			0.891
Ratios:
ROCE (ROE)		NM		NM		NM			NM			18.44	%		11.79	%
ROA		NM		NM		NM			NM			1.65	%		1.12	%
Efficiency ratio		NM		NM		NM			NM			49.45	%		51.44	%

NM = Not Meaningful; *— Adjusted for merger-related costs, conforming expenses and an extraordinary item.

9

The following tables present estimated revenues from external customers, by product and service group for the indicated periods:

		Retail				Commercial				Trust				Total
2001		3Q		YTD		3Q		YTD		3Q		YTD		3Q		YTD
Interest and fees		$	99,425		310,283		99,844		306,386		5,182		15,917		204,451		632,586
Service charges			13,135		40,438		4,477		10,752		—		—		17,612		51,190
Loan sales/service			3,482		8,191		—		—		—		—		3,482		8,191
	Totals	$	116,042		358,912		104,321		317,138		5,182		15,917		225,545		691,967

		Retail				Commercial				Trust				Total
2000		3Q		YTD		3Q		YTD		3Q		YTD		3Q		YTD
Interest and fees		$	104,523		304,027		115,116		335,799		5,230		16,065		224,869		655,891
Service charges			12,566		36,425		3,157		9,142		—		—		15,723		45,567
Loan sales/service			3,831		8,334		—		—		—		—		3,831		8,334
	Totals	$	120,920		348,786		118,273		344,941		5,230		16,065		244,423		709,792

		Retail				Commercial				Trust				Total
1999		3Q		YTD		3Q		YTD		3Q		YTD		3Q		YTD
Interest and fees		$	100,813		293,806		90,763		266,525		4,636		13,417		196,212		573,748
Service charges			11,768		33,377		3,736		8,570		—		—		15,504		41,947
Loan sales/service			2,192		6,055		—		—		—		—		2,192		6,055
	Totals	$	114,773		333,238		94,499		275,095		4,636		13,417		213,908		621,750

10

3.  Earnings per Share — The reconciliation of the numerator and denominator of basic earnings per share (“EPS”) with that of diluted EPS is presented as follows:

EARNINGS PER SHARE	3Q 2001			YTD 2001			3Q 2000			YTD 2000
Income after tax but before cumulative change in accounting principle	$	41,901			120,778			40,065			119,740
Cumulative effect of change in accounting principle, net of tax		—			(6,299	)		—			—
Net income		41,901			114,479			40,065			119,740
Less: preferred stock dividends		(22	)		(101	)		(46	)		(175	)
Income available to common shareholders after tax but before change in accounting method		41,879			120,667			40,019			119,565
Income available to common shareholders after tax and after change in accounting method	$	41,879			114,378			40,019			119,565
Average common shares outstanding		85,252			85,815			88,252			88,302
Earnings per basic common share before accounting change	$	0.49			1.40			0.45			1.35
Cumulative effect of change in accounting principle		—			(.07	)		—			—
Earnings per basic common share	$	0.49			1.33			0.45			1.35
Income available to common shareholders after tax but before change in accounting method	$	41,879			120,667			40,019			119,565
Income available to common shareholders after tax and after change in accounting method		41,879			114,378			40,019			119,565
Add: preferred stock dividends		22			101			46			175
Add: interest on convertible bonds		10			32			12			41
Income used in diluted EPS calculation before change in accounting method		41,911			120,810			40,077			119,781
Income used in diluted EPS calculation after change in accounting method	$	41,911			114,511			40,077			119,781
Average common shares outstanding		85,252			85,815			88,252			88,302
Add: common stock equivalents — stock options		407			432			377			273
Add: common stock equivalents — convertible debentures		72			76			83			99
Add: common stock equivalents — convertible preferred securities		144			217			296			362
Average common shares and common stock equivalents outstanding		85,875			86,540			89,008			89,036
Earnings per diluted common share after tax but before change in accounting method	$	0.49			1.40			0.45			1.35
Cumulative effect of change in accounting method, net of tax		—			(.07	)		—			—
Earnings per diluted common share	$	0.49			1.33			0.45			1.35

11

4.  In June 1998, the FASB issued Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133”). SFAS 133 establishes accounting and reporting standards for derivative instruments and requires an entity to recognize all derivatives as either assets or liabilities in the Balance Sheet and measure those instruments at fair value. Derivatives that do not meet certain criteria for hedge accounting must be adjusted to fair value through income. If the derivative qualifies for hedge accounting, depending on the nature of the hedge, changes in the fair value of derivatives will either be offset against the change in fair value of the hedged asset or liability through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Any ineffective portion of a derivative’s change in fair value will be immediately recognized in earnings. This statement was originally to be effective for all fiscal quarters beginning after June 15, 1999. In July 1999, the FASB issued Statement No. 137 which delayed implementation of Statement No. 133 until the first quarter 2001. The Corporation implemented SFAS 133 during the 2001 first quarter. The net effect of initial implementation entries increased investment securities and liabilities by approximately $11.4 million and affected net income by less than $100 thousand. Through September 30, 2001, SFAS 133 entries to reflect changes in the fair values of FirstMerit’s derivatives increased year-to-date pre-tax income by 8.9 thousand.

5.  The requirements of Emerging Issues Task Force Issue No. 99-20, “Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets” (EITF 99-20), were adopted in the second quarter, as required, and changed the criteria for recognizing an “other than temporary” adverse change in the timing or amounts of estimated retained interest cash flows. Accordingly, FirstMerit wrote down the value of its manufactured housing residual interest assets by $9.7 million ($6.3 million after-tax) to $13.0 million. Prior to implementation of EITF 99-20, these estimated changes would have been recorded through comprehensive income rather than through earnings. After the initial implementation of these new rules, adverse changes, if any, will be recorded directly against income.

6.  The Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 142 (SFAS 142), “Goodwill and Other Intangible Assets,” which addresses the accounting for goodwill and other intangible assets. SFAS 142 specifies that, among other things, intangible assets with an indefinite useful life and goodwill will no longer be amortized. The standard requires goodwill to be periodically tested for impairment and written down to fair value if considered impaired. The provisions of SFAS 142 are effective for fiscal years beginning after December 15, 2001, and are effective for interim periods in the initial year of adoption. It is estimated the adoption of SFAS 142 will increase after-tax 2002 earnings by approximately $8.0 million.

7. On October 31, 2001, FirstMerit Corporation announced its exit from the manufactured housing lending business. Concurrent with the announcement, FirstMerit ceased new manufactured housing loan originations. FirstMerit will, however, continue to manage the existing $800 million portfolio over its remaining term, and does not believe the cessation of originations will have any impact on current consumer customers. The business was exited because of its inability to meet internally established profitability goals, due in part to industry overcapacity and deteriorating general economic conditions.

     To cover the cost of exiting this business, FirstMerit will record an after-tax charge of approximately $42.1 million in the fourth quarter. The charge includes $10.1 million to shut down Mobile Consultants, Inc., the manufactured housing loan subsidiary; $21.2 million to reflect a change in assumptions related to loan loss severity; $9.4 million to additional loan loss reserves; and $1.4 million for severance costs. Other than this one-time charge, FirstMerit believes its action will have a negligible effect, if any, on subsequent operating earnings and will remain “well capitalized.”

8.  Management believes the interim unaudited consolidated financial statements reflect all adjustments consisting only of normal recurring accruals and reclassifications, necessary for fair presentation of the September 30, 2001 and 2000 and December 31, 2000 statements of condition and the results of operations for the quarters ended September 30, 2001 and 2000.

12

These results have been determined on the basis of generally accepted accounting principles, except as follows. In certain sections of this document, results not in accordance with Generally Accepted Accounting Principles (“Non-GAAP results”) are presented. These Non-GAAP results are presented to allow more consistent trend identification and better comparisons with recurring GAAP results from other reporting periods. Within this document, some examples of Non-GAAP results are described as “fully-tax equivalent” and “core “ or introduced by phrases like “...excluding gains from sales of securities, “ and “...excluding merger-related charges...,” etc. These Non-GAAP results may not be comparable to similarly titled measures reported by other companies.

9.  The Corporation cautions that any forward looking statements contained in this report, in a report incorporated by reference to this report or made by management of the Corporation, involve risks and uncertainties and are subject to change based upon various factors. Actual results could differ materially from those expressed or implied. Reference is made to the section titled “Forward-looking Statements” in the Corporation’s Form 10-K for the period ended December 31, 2000.

13

AVERAGE CONSOLIDATED BALANCE SHEETS (Unaudited)

Fully-tax Equivalent Interest Rates and Interest Differential

				Three months ended								Year ended								Three months ended
				September 30, 2001								December 31, 2000								September 30, 2000
FIRSTMERIT CORPORATION
AND SUBSIDIARIES				Average					Average			Average					Average			Average					Average
(Dollars in thousands)				Balance			Interest		Rate			Balance			Interest		Rate			Balance			Interest		Rate
ASSETS
Investment securities:
	U.S. Treasury securities and U.S
		Government agency obligations (taxable)		$	1,595,676			24,212		6.02	%		1,836,266			117,652		6.41	%		1,817,239			29,156		6.38	%
	Obligations of states and political subdivisions (tax-exempt)				110,028			2,355		8.49	%		116,401			9,573		8.22	%		113,999			2,360		8.24	%
	Other securities				292,326			4,108		5.58	%		295,783			21,447		7.25	%		295,566			5,257		7.08	%
			Total investment securities		1,998,030			30,675		6.09	%		2,248,450			148,672		6.61	%		2,226,804			36,773		6.57	%
Federal funds sold & other interest-earning assets					2,163			19		3.48	%		49,218			3,196		6.49	%		139,274			2,307		6.59	%
Loans held for sale					33,483			537		6.36	%		91,547			7,982		8.72	%		53,271			866		6.47	%
Loans					7,402,712			150,957		8.09	%		7,275,036			635,487		8.74	%		7,379,222			163,361		8.81	%
			Total earning assets		9,436,388			182,188		7.66	%		9,664,251			795,337		8.23	%		9,798,571			203,307		8.25	%
Allowance for possible loan losses					(111,118	)							(109,409	)							(110,777	)
Cash and due from banks					192,359								217,446								205,949
Other assets					694,508								596,349								599,068
			Total assets	$	10,212,137								10,368,637								10,492,811
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
	Demand-
		non-interest bearing		$	1,063,015			—		—			1,032,992			—		—			1,027,707			—		—
	Demand-
		interest bearing			667,776			907		0.54	%		635,414			3,705		0.58	%		620,211			878		0.56	%
	Savings				1,949,555			10,679		2.17	%		1,789,464			52,883		2.96	%		1,791,848			13,769		3.06	%
	Certificates and other time deposits				3,749,049			50,093		5.30	%		3,957,140			236,112		5.97	%		4,260,371			66,173		6.18	%
			Total deposits		7,429,395			61,679		3.29	%		7,415,010			292,700		3.95	%		7,700,137			80,820		4.18	%
Wholesale borrowings					1,683,200			18,372		4.33	%		1,951,841			122,551		6.28	%		1,753,505			29,206		6.63	%
		Total interest bearing liabilities			8,049,580			80,051		3.95	%		8,333,859			415,251		4.98	%		8,425,935			110,026		5.19	%
Other liabilities					157,693								118,227								143,792
Mandatorily redeemable preferred securities					21,450								21,450								21,450
Shareholders’ equity					920,399								862,109								873,927
	Total liabilities and shareholders’ equity			$	10,212,137								10,368,637								10,492,811
		Net yield on earning assets		$	9,436,388			102,137		4.29	%		9,664,251			380,086		3.93	%		9,798,571			93,281		3.79	%
Interest rate spread										3.71	%							3.25	%							3.06	%

Notes:  Interest income on tax-exempt securities and loans have been adjusted to a fully-taxable equivalent basis. Non-accrual loans have been included in the average balances.

14

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

     FirstMerit Corporation’s third quarter 2001 net income totaled $41.9 million, up 4.6% from the $40.1 million earned in the third quarter of 2000. Diluted earnings per share were $0.49 in the third quarter of 2001, an increase of 8.9% compared with $0.45 reported in the same 2000 period. For the nine months ended September 30, 2001, income, excluding the one-time non-recurring after-tax charge from the cumulative effect of an accounting change taken in the second quarter, was $120.8 million, or $1.40 per diluted share, compared to net income of $119.7 million, or $1.35 per diluted share, for the prior year period. Year-to-date 2001, net income was $114.5 million, or $1.33 per share.

     Third quarter 2001 returns on average common equity (ROE) and average assets (ROA) were 18.1% and 1.63%, respectively, compared with prior year third quarter ratios of 18.3% and 1.52%. For the nine-month year-to-date periods, ROE and ROA were 17.7% and 1.59%, respectively.

     Net interest income on a fully tax-equivalent basis was $102.1 million for the third quarter of 2001 compared to $93.3 million for the prior year quarter, an increase of 9.4%. This increase reflects continued improvement in the net interest margin which was 4.29% for the quarter, seventeen basis points higher than the second quarter 2001 margin of 4.12%, and 50 basis points better than the 3.79% recorded during the third quarter last year.

     Net revenue for the third quarter of 2001 was $146.2 million, up 8.1% from the $135.3 million reported for the year ago quarter. Growth was the result of margin expansion, combined with growth in fee income, partially offset by the modest decline in earning assets. Excluding gains/losses from the sale of securities, non-interest income was $44.1 million, a 5.0% increase from the $42.0 million reported a year ago. Third quarter fees accounted for 30.1% of net revenues in 2001 and 31.1% in 2000.

     Containment of operating costs through efficient operations continues to be a priority of management. Non-interest expense totaled $72.1 million in the third quarter of this year, up 2.9% from third quarter 2000 expense of $70.1 million. The efficiency ratio was 47.7% for this quarter, an improvement from 49.9% for the year ago quarter. The efficiency ratio for the nine months ended September 30, 2001 was 48.2%.

     Period-end assets were $10.3 billion compared to $10.2 billion at June 30, 2001, and $10.4 billion at September 30, 2000. Total loans, net of unearned interest,

15

increased 1.8% to $7.4 billion. Commercial loans increased 7.6%, and consumer loans, excluding mortgage and manufactured housing loans, rose 3.6%.

     Total deposits at September 30, 2001 were $7.4 billion, down 2.8% from year-ago 2000 levels. Relatively inexpensive core deposits grew 8.4% allowing a reduction in higher-costing certificates of deposit. The positive impact of the change in deposit funding mix lowered deposit interest expense by 27%, compared to the same quarter last year.

     The third quarter loan loss provision was $10.9 million, compared to $9.4 million in the second quarter of this year, $11.8 million during the current year first quarter, and $5.4 million in the 2000 third quarter. Net charge-offs for the quarter were $11.1 million, or 0.59% of average loans outstanding on an annualized basis, compared to 0.49% in the second quarter 2001, 0.55% during the current year first quarter, and 0.38% for third quarter a year ago. The allowance stands at 1.50% of period-end loans, unchanged from the prior year. Nonperforming assets as a percent of loans and other real estate were 0.87% at third quarter end, compared with 0.66% at June 30, 2001 and 0.43% at September 30, 2000. Reserve coverage of nonperforming assets at September 30, 2001 was 201.17%.

     Shareholders’ equity was $941.7 million at quarter end. Average equity to assets for this 2001 quarter was 9.01% compared to 8.33% last year. Common stock dividends paid were $0.23 per share, representing a 46.9% payout ratio. At quarter end, there were 84.9 million common shares outstanding.

16

     The components of change in per share income for the three-month and nine-month periods ended September 30, 2001 and 2000 are summarized in the following table:

	Reported			Reported			CORE			Reported			CORE			Reported
	QTR			QTR			YTD			YTD			YTD			YTD
	ended			ended			ended			ended			ended			ended
Changes in	Sept 30,			Sept 30,			Sept 30,			Sept 30,			Sept 30,			Sept 30,
Earnings per Share	2000/2001			1999/2000			2000/2001			2000/2001			1999/2000			1999/2000
Diluted net income/ core earnings per share — period start	$	0.45			0.44			1.35			1.35			1.27			0.86
Increases (decreases) due to:
Net interest income — taxable equivalent		0.10			(0.03	)		0.03			0.03			(0.12	)		(0.12	)
Provision for loan losses		(0.06	)		(0.02	)		(0.08	)		(0.08	)		(0.03	)		0.08
Other income		0.03			—			0.21			0.21			0.07			0.07
Other expenses (including merger costs in the “Reported 1999” periods)		(0.03	)		0.03			(0.09	)		(0.09	)		0.13			0.50
Federal income taxes — taxable equivalent		(0.02	)		0.02			(0.05	)		(0.05	)		(0.01	)		(0.14	)
Extraordinary item — extinguishment of debt		—			—			—			—			—			0.06
Cumulative effect of change in accounting principle		—			—			—			(0.07	)		—			—
Change in share base		0.02			0.01			0.03			0.03			0.04			0.04
Net change in diluted net income per share		0.04			0.01			0.05			(0.02	)		0.08			0.49
Diluted net income per share — period end	$	0.49			0.45			1.40			1.33			1.35			1.35

17

Net Interest Income

     Net interest income, the Corporation’s principal source of earnings, is the difference between the interest income generated by earning assets (primarily loans and investment securities) and the total interest paid on interest bearing funds (namely deposits and other borrowings). For the purpose of this discussion, net interest income is presented on a fully-taxable equivalent (“FTE”) basis, to provide a comparison among types of interest earning assets. That is, interest on tax-free securities and tax-exempt loans has been restated as if such interest were taxed at the statutory Federal income tax rate of 35%, adjusted for the non-deductible portion of interest expense incurred to acquire the tax-free assets.

     Net interest income FTE for the quarter ended September 30, 2001 was $102.1 million compared to $93.3 million for the same period one year ago, an increase of $8.8 million. The rise occurred because the decrease in interest income was less than the decline in interest expense.

     As shown in the following rate/volume table, FTE interest income declined $21.1 million, mainly as a result of yield declines in loans and loans held for sale. Specifically, compared to the same quarter last year, lower loans and loans held for sale balances lessened interest income by $12.9 million, while lower investment securities outstandings caused a decline in interest income of $3.5 million.

     Similar to the decline in interest income, the drop in interest expense of $30.0 million, compared to the same 2000 quarter, was primarily a result of declines in rates paid depositors and rates paid on wholesale borrowings. That is, lower interest costs on wholesale borrowings dropped interest expense by $10.1 million, and lower CD rates reduced interest expense by $9.2 million. Less reliance on higher-yielding CD outstandings also decreased interest expense by $6.8 million, and lower yields paid on customer savings accounts resulted in a $4.0 million savings in interest expense.

     For the nine months ended September 30, 2001, net interest income FTE rose $2.3 million to $289.3 million. The net increase occurred even though interest income dropped $35.4 million, as the decline in interest expense was $37.7 million. Lower investment balances lessened interest income by $16.2 million, higher loan volumes added $5.8 million of interest income, and lower loan yields dropped interest income by $16.8 million. On the funding side, the lower interest rate environment, compared to last year, lessened interest expense on wholesale borrowings by $18.6 million, while lower wholesale borrowing balances resulted in $14.3 million of less interest expense.

18

Changes in Net Interest Differential —-

Fully-Tax Equivalent Rate/ Volume Analysis

(Dollars in thousands)

			Quarters ended									Nine Months Ended
			September 30,									September 30,
			2001 and 2000									2001 and 2000
			Increase (Decrease)									Increase (Decrease)
			Interest Income/Expense									Interest Income/Expense
			Volume			Yield Rate			Total			Volume			Yield Rate			Total
INTEREST INCOME
Investment Securities			$	(3,457	)		(2,641	)		(6,098	)		(16,199	)		(5,676	)		(21,875	)
Loans and loans held for sale				162			(12,895	)		(12,733	)		5,820			(16,756	)		(10,936	)
Federal funds sold and others				(1,204	)		(1,084	)		(2,288	)		(1,779	)		(808	)		(2,587	)
		Total interest income	$	(4,499	)		(16,620	)		(21,119	)		(12,158	)		(23,240	)		(35,398	)
INTEREST EXPENSE
Interest on deposits:
	Demand-interest bearing		$	65			(36	)		29			120			456			576
	Savings			864			(3,954	)		(3,090	)		402			(1,215	)		(813	)
	Certificates and other time deposits			(6,832	)		(9,248	)		(16,080	)		(3,537	)		(1,024	)		(4,561	)
	Wholesale borrowings			(767	)		(10,067	)		(10,834	)		(14,275	)		(18,626	)		(32,901	)
		Total interest expense	$	(6,670	)		(23,305	)		(29,975	)		(17,290	)		(20,409	)		(37,699	)
Net interest income			$	2,171			6,685			8,856			5,132			(2,831	)		2,301

Note:  The variance created by a combination of rate and volume has been entirely allocated to the volume column.

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Net Interest Margin

     The net interest margin, net interest income FTE divided by average earning assets, is affected by changes in the level of earning assets, the proportion of earning assets funded by non-interest bearing liabilities, the interest rate spread, and changes in the corporate tax rates. A meaningful comparison of the net interest margin requires an adjustment for the changes in the statutory Federal income tax rate noted above. The following schedule shows the relationship of the tax equivalent adjustment and the net interest margin.

Net Interest Margin

(Dollars in thousands)

		Quarters Ended						Nine Months Ended
		September 30,						September 30,
		2001			2000			2001			2000
Net interest income per		$	101,184			92,326			286,632			284,066
	financial statements
Tax equivalent adjustment			953			955			2,683			2,948
Net interest income — FTE			102,137			93,281			289,315			287,014
Average earning assets		$	9,436,388			9,798,571			9,371,223			9,673,924
Net interest margin			4.29	%		3.79	%		4.13	%		3.96	%

Other Income

     Other income for the quarter ended September 30, 2001 was $44.3 million, an increase of $2.2 million or 5.3%, over the $42.1 million earned during the same period last year. Excluding securities sales, the increase in other income was $2.0 million, or 4.8%. For the nine-month period, excluding securities gains, other income totaled $136.8 million, up 13.3% from $120.7 million a year ago.

     Trust department income for the third quarter was $5.2 million, down 4.2% from the $5.4 million earned one year ago. The decline, which was more than offset by increases in other fee categories, is mostly attributed to lower stock market returns, which are the basis for certain trust fees. Service charges on depositors’ accounts

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increased 15.0% to $13.7 million from $11.9 million for last year’s third quarter. Credit card fees, including merchant services, increased 7.2% to $8.9 million for the quarter compared to $8.3 million for the three months ended September 30, 2000. ATM and other service fees declined from $4.0 million during the 2000 third quarter to $3.9 million for the same current year period. Income from bank owned life insurance (“BOLI”) totaled $3.2 million compared to $1.1 million in 2000. Fees from investment broker/dealer activity, insurance sales and letters of credit were $3.3 million in 2001 compared to $3.4 million during the three months ended September 30, 2000. Manufactured housing income was $1.1 million for the quarter, compared to $1.3 million last year. Securities gains/losses were immaterial for the current and prior year quarters. Loan sales and servicing income was $3.5 million in the 2001 quarter and $3.8 million in 2000. Other operating income was $1.3 million compared to $2.8 million for last year’s quarter, which included a $0.8 million gain from a branch real estate transaction.

     Nine-month ended September 30, 2001 results compared to the same 2000 period were as follows: trust department income declined 5.9%; service charges on depositors’ accounts rose 14.9%; credit card and merchant service fees increased 11.2%; ATM and other service fees were down slightly compared to last year; BOLI revenue was $9.4 million, up from $2.8 million earned in 2000; a $5.6 million gain from the sale of a partnership interest is included in the 2001 year-to-date period; manufactured housing income increased from $2.9 million to $3.8 million; securities gains were $0.6 million in 2001 versus a $0.6 million loss last year; loan sales and servicing decreased 1.7% to $8.2 million and other operating income totaled $5.5 million compared to $8.6 million in 2000, when the previously mentioned branch real estate transaction is excluded from prior year’s results.

     The Corporation continues to emphasize other income as an important complement to net interest income as it provides a source of revenues not sensitive to the interest rate environment.

Other Expenses

     Other expenses were $72.1 million for the third quarter, an increase of $2.0 million, or 2.9%, from the $70.1 million recorded during the same quarter last year. Year-to-date operating costs totaled $212.5 million, up $7.6 million or 3.6% from the $204.9 million recorded during the nine months ended September 30, 2000.

     The “lower-is-better” efficiency ratio for the third quarter was 47.72% compared to 49.88% a year ago. The efficiency ratio for the nine-month period was 48.21%, compared to 48.30% for the nine months ended September 30, 2000. The 2001 efficiency ratio for the year-to-date period does not include the $9.7 million pre-tax residual interest accounting change described previously in the Results of Operations

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section of this document. The 2001 third quarter efficiency ratio indicates it took 47.72 cents of operating costs to generate every dollar of profit.

     Salaries, wages, pension and employee benefits, the largest component of other expenses, totaled $32.9 million for third quarter 2001, up $0.8 million from last year’s expense of $32.1 million. The increase is attributable to annual merit increases, including higher ongoing payments and accrued but unpaid amounts related to incentive pay. The number of full-time equivalent employees at September 30, 2001 was 3,152, down 6.2% from the same date one year ago. For the current year nine-month period, salaries and benefits were $97.5 million, up $2.0 million or 2.1%, from $95.5 million in 2000. Again, merit increases, including the incentive pay component, accounted for higher costs compared to last year.

     Net occupancy expense totaled $5.5 million, up 9.8% from the corresponding 2000 quarter, but down 1.8% over the same nine-month period. Equipment expense showed slight declines in both the quarter and year-to-date periods. Stationary, supplies and postage costs were about the same as the prior year quarter, but down 10.6% for the nine months ended September 30, 2001, compared to the same 2000 time frame. Bankcard, loan processing and other costs increased significantly for the quarter and year-to-date periods. Much of this increase occurred as a result of higher mortgage, manufactured housing and home equity loan refinancings and originations. These higher processing costs are offset by higher fee income in these areas as well. Professional fees were $2.7 million for the quarter compared to $2.8 million last year. Year-to-date professional fees totaled $8.7 million, $1.4 million higher than the same period a year ago. Other operating expenses for the third quarter were $13.9 million, down from $16.1 million last year. Year-to-date 2001 other operating expenses totaled $44.2 million, up $1.8 million from last year’s total of $42.4 million.

FINANCIAL CONDITION

Investment Securities

     All investment securities of the Corporation are classified as available for sale. The available for sale classification provides the Corporation with more flexibility to respond, through the portfolio, to changes in market interest rates, or to increases in loan demand or deposit withdrawals. The book value and market value of investment securities classified as available for sale are as illustrated in the following tables.

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			September 30, 2001
					Gross		Gross
			Book		Unrealized		Unrealized		Market
			Value		Gains		Losses		Value
U.S. Treasury securities and U.S
	Government agency obligations		$	385,845		6,985		207		392,623
Obligations of state and political subdivisions				110,294		2,003		21		112,276
Mortgage-backed securities				1,191,453		26,339		15		1,217,777
Other securities				288,340		554		9,005		279,889
		��	$	1,975,932		35,881		9,248		2,002,565

	Book Value		Market Value
Due in one year or less	$	39,116		39,353
Due after one year through five years		197,673		202,135
Due after five years through ten years		400,731		408,453
Due after ten years		1,338,412		1,352,624
	$	1,975,932		2,002,565

     The book value and market value of investment securities including mortgage-backed securities and derivatives at September 30, 2001, by contractual maturity, are shown in the preceding table. Expected maturities will differ from contractual maturities based on the issuers’ right to call or prepay obligations with or without call or prepayment penalties.

     The carrying value of investment securities pledged to secure trust and public deposits and for purposes required or permitted by law amounted to approximately $1.5 billion at September 30, 2001, $1.6 billion at December 31, 2000 and $1.8 billion at September 30, 2000.

     Securities with remaining maturities over five years reflected in the foregoing schedule consist of mortgage and asset-backed securities. These securities are purchased within an overall strategy to maximize future earnings taking into account an acceptable level of interest rate risk. While the maturities of these mortgage and asset-backed securities are beyond five years, these instruments provide periodic principal payments and include securities with adjustable interest rates, reducing the interest rate risk associated with longer term investments.

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Loans

     Total loans outstanding at September 30, 2001 were $7.4 billion compared to $7.2 billion at December 31, 2000 and $7.3 billion at September 30, 2000.

     By category, the following year-over-year changes in average loan balances occurred: commercial loans increased $219.7 million or 6.7%; installment loans were flat compared to last year, home equity loans were up $33.4 million or 7.6%; credit card outstandings have risen $16.0 million or 14.8%; and manufactured housing loans declined $37.6 million or 4.4%. Average mortgage loans declined $201.4 million or 22.9% as the Corporation continues to shift its loan mix away from lower-yielding mortgage loans, primarily through normal paydown activity, and toward higher-yielding commercial and consumer credits.

     Year-to-date average loan increases and decreases were consistent with the trends noted in the analysis just preceding this paragraph. Average outstanding loans for both the quarter and nine-month periods were 78% of average earning assets.

Asset Quality

     At September 30, 2001, total nonperforming assets, defined as nonaccrual loans, restructured loans and other real estate (“ORE”), were $64.2 million or 0.87% of total outstanding loans and ORE. These same statistics for other recent quarter-ends were as follows: $48.5 million or 0.66% at June 30, 2001, $38.2 million or 0.52% at March 31, 2001; $36.4 million or 0.50% at December 31, 2000; and $31.3 million or 0.43% at September 30, 2000.

     Impaired loans are loans for which, based on current information or events, it’s probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans must be valued based on the present value of the loans’ expected future cash flows at the loans’ effective interest rates, at the loans’ observable market prices, or the fair value of the underlying collateral. Under FirstMerit’s credit policies and practices, and according to provisions within Financial Accounting Standards Board Statements No. 114 and No. 118, all nonaccrual and restructured commercial, agricultural, construction, and commercial real estate loans, meet the definition of impaired loans.

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ASSET QUALITY TABLE

			September 30,			December 31,			September 30,
(Dollars in thousands)			2001			2000			2000
Impaired Loans:
	Nonaccrual		$	51,803			28,039			24,824
	Restructured			84			150			159
		Total impaired loans		51,887			28,189			24,983
Other Loans:
	Nonaccrual			3,041			2,135			1,671
	Restructured			—			—			—
		Total other nonperforming loans		3,041			2,135			1,671
		Total nonperforming loans		54,928			30,324			26,654
Other real estate owned (ORE)				9,243			6,067			4,449
	Total nonperforming assets			64,171			36,391			31,103
Loans past due 90 days or more accruing interest				29,912			31,440			25,583
Total nonperforming assets as a percent of total loans and ORE				0.87	%		0.50	%		0.43	%

NA = Not Available

There is no concentration of loans in any particular industry or group of industries. Most of the Corporation’s business activity is with customers located within the state of Ohio.

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Allowance for Loan Losses

     The allowance for loan losses at September 30, 2001 totaled $110.5 million, or 1.50% of total loans outstanding compared to $108.3 million, or 1.50% and $108.6 million, or 1.50% at December 31, 2000 and September 30, 2000, respectively.

		Nine months						Nine months
		ended			Year ended			ended
		September 30,			December 31,			September 30,
Dollars in thousands		2001			2000			2000
Allowance — beginning of period		$	108,285			104,897			104,897
Loans charged off:
	Commercial, financial, agricultural		6,031			7,089			14,716
	Installment to individuals		32,413			37,972			18,968
	Real estate		1,426			2,558			1,880
	Lease financing		2,483			1,809			1,322
Total charge-offs			42,353			49,428			36,886
Recoveries:
	Commercial, financial, agricultural		868			4,805			6,410
	Installment to individuals		10,157			13,866			7,706
	Real estate		561			763			433
	Lease financing		839			674			509
Total recoveries			12,425			20,108			15,058
Net charge-offs			29,928			29,320			21,828
Provision for loan losses			32,141			32,708			25,507
Allowance — end of period		$	110,498			108,285			108,576
Annualized net charge offs as a percent of average loans			0.54	%		0.40	%		0.40	%
Allowance as a percent of loans outstanding at end of period			1.50	%		1.50	%		1.50	%
Allowance as a multiple of annualized net charge-offs			2.76	X		3.69	X		3.72	X

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     The Corporation’s Credit Quality department manages credit risk by establishing common credit policies for its subsidiaries, which operate under the authority of the Corporation’s Board of Directors Credit Committee, participating in approval of larger loans, conducting reviews of loan portfolios, providing centralized consumer underwriting, collections and loan operation services, and overseeing loan workouts. The Corporation’s objective is to minimize losses from commercial lending activities and to maintain consumer losses at levels that are within desired risk parameters and consistent with growth and profitability objectives.

Deposits

     The following schedule illustrates the change in composition of the average balances of deposits and average rates paid for the noted periods.

	Quarter ended					Year ended					Quarter ended
	September 30, 2001					December 31, 2000					September 30, 2000
	Average		Average			Average		Average			Average		Average
(Dollars in thousands)	Balance		Rate			Balance		Rate			Balance		Rate
Non-interest DDA	$	1,063,015		—			1,032,992		—			1,027,707		—
Interest-bearing DDA		667,776		0.54	%		635,414		0.58	%		620,211		0.56	%
Savings deposits		1,949,555		2.17	%		1,789,464		2.96	%		1,791,848		3.06	%
CDs and other time		3,749,049		5.30	%		3,957,140		5.97	%		4,260,371		6.18	%
	$	7,429,395		3.29	%		7,415,010		3.95	%		7,700,137		4.18	%

     Average CDs totaled $3.7 billion for the quarter ended September 30, 2001, down 12% from $4.3 billion for the same 2000 quarter. On a percentage basis, average CDs were 46% and 51% of average total interest bearing funds for the September 30, 2001 and 2000 quarters, respectively; average savings deposits, including money market accounts, were 24% of average interest bearing funds during the quarter ended September 30, 2001 and 21% for the same period last year; average interest-bearing demand deposits were 8% of total average interest bearing funds during the the quarter ended September 30, 2001 and 7% for the same period last year; and average wholesale borrowings were 21% of average interest-bearing funds for the September 30, 2001 and 2000 quarters. During the three months ended September 30, 2001 and 2000, average interest bearing liabilities funded approximately 86% of average interest-earning assets.

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     The following table summarizes the certificates and other time deposits in amounts of $100 thousand or more, as of September 30, 2001, by time remaining until maturity.

(Dollars in thousands)	Amount
Maturing in:
Under 3 months	$	449,611
3 to 12 months		481,641
Over 12 months		527,565
	$	1,458,817

Market Risk

     The Corporation is exposed to market risks in the normal course of business. Changes in market interest rates may result in changes in the fair market value of the Corporation’s financial instruments, cash flows, and net interest income. The corporation seeks to achieve consistent growth in net interest income and capital while managing volatility arising from shifts in market interest rates. The Asset and Liability Committee (“ALCO”) oversees financial risk management, establishing broad policies that govern a variety of financial risks inherent in the Corporation’s operations. ALCO monitors the Corporation’s interest rates and sets limits on allowable risk annually. Market risk is the potential of loss arising from adverse changes in the fair value of financial instruments due to changes in interest rates, exchange rates, and equity prices. The Corporation’s market risk is composed primarily of interest rate risk. Interest rate risk on the Corporation’s balance sheet consists of mismatches of maturity gaps and indices, and options risk. Maturity gap mismatches result from differences in the maturity or repricing of asset and liability portfolios. Options risk exists in many of the Corporation’s retail products such as prepayable mortgage loans and demand deposits. Options risk typically results in higher costs or lower revenue for the Corporation. Index mismatches occur when asset and liability portfolios are tied to different market indices which may not move in tandem as market interest rates change.

     Interest rate risk is monitored using gap analysis, earnings simulation and net present value estimations. Combining the results from these separate risk measurement processes allows a reasonably comprehensive view of short-term and long-term interest rate risk in the Corporation. Gap analysis measures the amount of repricing risk in the balance sheet at a point in time. Earnings simulation involves forecasting net interest earnings under a variety of scenarios including changes in the level of interest rates, the shape of the yield curve, and spreads between market

Liquidity Risk

     Liquidity risk is the possibility of the Corporation being unable to meet current and future financial obligations in a timely manner. Liquidity is managed to ensure stable, reliable and cost-effective sources of funds to satisfy demand for credit, deposit withdrawals and investment opportunities. The Corporation considers core earnings, strong capital ratios and credit quality essential for maintaining high credit ratings, which allow the Corporation cost-effective access to market-based liquidity. The Corporation relies on a large, stable core deposit base and a diversified base of wholesale funding sources to manage liquidity risk.

     The Treasury Group is responsible for identifying, measuring and monitoring the Corporation’s liquidity profile. The position is evaluated daily, weekly and monthly by analyzing the composition of all funding sources, reviewing projected liquidity commitments by future month and identifying sources and uses funds. In addition, the overall management of the Corporation’s liquidity position is integrated into retail deposit pricing policies to ensure a stable core deposit base.

     The Corporation’s primary source of liquidity is its core deposit base, raised through its retail branch system, along with unencumbered, or unpledged, investment securities and unused wholesale sources of liquidity. The Corporation is able to raise significant liquidity in the form of deposit gathering campaigns. During the first nine months of 2001, the Corporation’s indexed money market account product balances increased by $165 million to $704 million. The products’ pricing features limited disintermediation from other lower cost bank deposit products.

     Funding Trends for the Quarter - Average total funds for the quarter increased by $70 million from the prior quarter to $9,134 million. Retail CDs decreased $52 million on average as higher-rate CDs were allowed to mature. In-market jumbo CDs to public funds and corporate customers increased $49 million on average. Index money market account balances increased $42 million on average, as the rate paid on the accounts was attractive in a falling rate environment. Wholesale funding sources, namely fed funds purchased, increased $39 million on average.

     Parent Company Liquidity - FirstMerit Corporation manages its liquidity principally through dividends from the bank subsidiary. Through the first nine months of 2001 FirstMerit Bank paid FirstMerit Corporation a total of $62 million in dividends. As of September 30, 2001, FirstMerit Bank had an additional $109 million available to pay dividends without regulatory approval. In addition, the parent company has a $100 million revolving loan commitment from a syndicate of banks, which is used for general corporate purposes. The loan commitment is repaid with earnings from the banking subsidiary. The pricing on the loan commitment is based on LIBOR; the outstanding balance on September 30, 2001 was $45 million and the interest rate was 3.91%.

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interest rates. ALCO also monitors the net present value of the balance sheet, which is the discounted present value of all asset and liability cash flows. Interest rate risk is quantified by changing the interest rates used for discounting cash flows and comparing the net present value to the original figure.

Capital Resources

     Shareholders’ equity at September 30, 2001 totaled $941.7 million compared to $914.9 million at December 31, 2000 and $896.9 million at September 30, 2000.

     The following table reflects the various measures of capital:

	At September 30,			At December 31,			At September 30,
	2001			2000			2000
(In thousands)
Total equity	$	941,699	9.18%		914,889	8.96%		896,918	8.65%
Common equity		940,457	9.17%		912,388	8.93%		894,354	8.62%
Tangible common equity (a)		796,017	7.87%		761,060	7.56%		739,678	7.24%
Tier 1 capital (b)		798,107	9.13%		794,736	9.34%		795,660	9.32%
Total risk-based capital (c)		1,058,489	12.11%		1,053,322	12.38%		1,054,733	12.36%
Leverage (d)		798,107	7.95%		794,736	7.80%		795,660	7.70%

(a)	Common equity less all intangibles; computed as a ratio to total assets less intangible assets.
(b)	Shareholders’ equity minus net unrealized holding gains on equity securities, plus or minus net unrealized holding losses or gains on available for sale debt securities, less goodwill; computed as a ratio to risk-adjusted assets, as defined in the 1992 risk-based capital guidelines.

(c)  Tier 1 capital plus qualifying loan loss allowance, computed as a ratio to risk-adjusted assets, as defined in the 1992 risk-based capital guidelines.

(d)  Tier 1 capital; computed as a ratio to the latest quarter’s average assets less goodwill.

     The risk-based capital guidelines issued by the Federal Reserve Bank in 1988 require banks to maintain capital equal to 8% of risk-adjusted assets effective December 31, 1993. At September 30, 2001 the Corporation’s risk-based capital equaled 12.11% of risk adjusted assets, exceeding the minimum guidelines. The cash dividend of $0.23 paid in the third quarter has an indicated annual rate of $0.92 per share.

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PART II. — OTHER INFORMATION

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

Exhibit
Number
	Exhibit Index

3.1	Amended and Restated Articles of Incorporation of FirstMerit Corporation (incorporated by reference from Exhibit 3.1 to the Form 10-K/A filed by the registrant on April 29, 1999)
3.2	Amended and Restated Code of Regulations of FirstMerit Corporation (incorporated by reference from Exhibit 3(b) to the Form 10-K filed by the registrant on April 9, 1998)
4.1	Shareholders Rights Agreement dated October 21, 1993, between FirstMerit (incorporated by reference from Exhibit 4 to the Form 8-A/A filed by the registrant Corporation and FirstMerit Bank, N.A., as amended and restated May 20, 1998 on June 22, 1998)
4.2	Instrument of Assumption of Indenture between FirstMerit Corporation and NBD Bank, as Trustee, dated October 23, 1998 regarding FirstMerit Corporation’s 6 1/4% Convertible Subordinated Debentures, due May 1, 2008 (incorporated by reference from Exhibit 4(b) to the Form 10-Q filed by the registrant on November 13, 1998)
4.3	Supplemental Indenture, dated as of February 12, 1999, between FirstMerit and Firstar Bank Milwaukee, National Association, as Trustee relating to the obligations of the FirstMerit Capital Trust I, fka Signal Capital Trust I (incorporated by reference from Exhibit 4.3 to the Form 10-K filed by the registrant on March 22,1999)
4.4	Indenture dated as of February 13, 1998 between Firstar Bank Milwaukee National Association, as trustee and Signal Corp (incorporated by reference from Exhibit 41 to the Form S-4, No. 333-52581-01, filed by FirstMerit Capital Trust I, fka Signal Capital Trust I, on May 13, 1998)
4.5	Amended and Restated Declaration of Trust of FirstMerit Capital Trust I, fka Signal Capital Trust I, dated as of February 13, 1998 (incorporated by reference from Exhibit 4.5 to the Form S- 4 No. 333-52581-01, filed by FirstMerit Capital Trust I, fka Signal Capital Trust I, on May 13, 1998)
4.6	Form of Capital Security Certificate (incorporated by reference from Exhibit 4.6 to the Form S-4 No. 333-52581-01, filed by FirstMerit Capital Trust I, fka Signal Capital Trust I, on May 13, 1998)
4.7	Series B Capital Securities Guarantee Agreement (incorporated by reference from Exhibit 4.7 to the Form S-4 No. 333-52581-01, filed by FirstMerit Capital Trust I, fka Signal Capital Trust I, on May 13, 1998)
4.8	Form of 8.67% Junior Subordinated Deferrable Interest Debenture, Series B (incorporated by reference from Exhibit 4.7 to the Form S- 4 No. 333-52581-01, filed by FirstMerit Capital Trust I, fka Signal Capital Trust I, on May 13, 1998)
10.1	Amended and Restated 1992 Stock Option Program of FirstMerit Corporation (incorporated by reference from Exhibit 10.1 to the Form 10-K filed by the registrant on March 9, 2001)*
10.2	Amended and Restated 1992 Directors Stock Option Program (incorporated by reference from Exhibit 10.2 to the Form 10-K filed by the registrant on March 9, 2001) *
10.3	Amended and Restated 1995 Restricted Stock Plan (incorporated by reference from Exhibit 10.3 to the Form 10-K filed by the registrant on March 9, 2001)*
10.4	Amended and Restated 1997 Stock Option Program (incorporated by reference from Exhibit 10.4 to the Form 10-K filed by the registrant on March 9, 2001) *
10.5	Amended and Restated 1999 Stock Option Program (incorporated by reference from Exhibit 10.5 to the Form 10-K/A filed by the registrant on April 30, 2001)*
10.6	Amended and Restated 1987 Stock Option and Incentive Plan (SF) (incorporated by reference from Exhibit 10.6 to the Form 10-K filed by the registrant on March 9, 2001)*

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10.7	Amended and Restated 1996 Stock Option and Incentive Plan (SF) (incorporated by reference from Exhibit 10.7 to the Form 10-K filed by the registrant on March 9, 2001)*
10.8	Amended and Restated 1994 Stock Option and Incentive Plan (SF) ((incorporated by reference from Exhibit 10.8 to the Form 10-K filed by the registrant on March 9, 2001)*
10.9	Amended and Restated 1989 Stock Incentive Plan (SB) (incorporated by reference from Exhibit 10.9 to the Form 10-K filed by the registrant on March 9, 2001) *
10.10	Amended and Restated Stock Option and Incentive Plan (SG) (incorporated by reference from Exhibit 10.10 to the Form 10-K filed by the registrant on March 9, 2001)*
10.11	Non-Employee Director Stock Option Plan (SG) (incorporated by reference from Exhibit 4.3 to the Form S-8/A (No. 333-63797) filed by the registrant on February 12, 1999)*
10.12	Amended and Restated 1997 Omnibus Incentive Plan (SG) (incorporated by reference from Exhibit 10.12 to the Form 10-K filed by the registrant on March 9, 2001)*
10.13	Amended and Restated 1993 Stock Option Plan (FSB)(incorporated by reference from Exhibit 10.13 to the Form 10-K filed by the registrant on March 9, 2001)*
10.14	Amended and Restated Executive Deferred Compensation Plan (incorporated by reference from Exhibit 10.14 to the Form 10-K/A filed by the registrant on April 30, 2001)*
10.15	Amended and Restated Director Deferred Compensation Plan (incorporated by reference from Exhibit 10.15 to the Form 10-K/A filed by the registrant on April 30, 2001)*
10.16	Executive Supplemental Retirement Plan (incorporated by reference from Exhibit 10(d) to the Form 10-K filed by the registrant on March 15, 1996)*
10.17	Form of Amended and Restated Membership Agreement with respect to the Executive Supplemental Retirement Plan (incorporated by reference from Exhibit 10.39 to the Form 10-K filed by the Registrant on March 22, 1999)*
10.18	Unfunded Supplemental Benefit Plan (incorporated by reference from Exhibit 10.11 to the Form 10-K filed by the registrant on February 24, 1998)*
10.19	First Amendment to the Unfunded Supplemental Benefit Plan (incorporated by reference from Exhibit 10(v) to the Form 10-K filed by the registrant on March 2, 1995)*
10.20	Executive Committee Life Insurance Program Summary (incorporated by reference from Exhibit 10(w) to the Form 10-K filed by the registrant on March 2, 1995)*
10.21	Long Term Disability Plan (incorporated by reference from Exhibit 10(x) to the Form 10-K filed by the registrant on March 2, 1995)*
10.22	Employment Agreement dated October 23, 1998 for Charles F. Valentine (incorporated by reference from Exhibit 10(a) to the Form 10-Q filed by the registrant on November 13, 1998)*
10.23	SERP Agreement dated October 23, 1998 for Charles F. Valentine (incorporated by reference from Exhibit 10(b) to the Form 10-Q filed by the registrant on November 13, 1998)*
10.24	Amended and Restated Employment Agreement of John R. Cochran (incorporated by reference from Exhibit 10.24 to the Form 10-K/A filed by the registrant on April 30, 2001)*
10.25	Restricted Stock Award Agreement of John R. Cochran dated March 1, 1995(incorporated by reference from Exhibit 10(e) to the Form 10-Q filed by the registrant on May 15, 1995)*
10.26	First Amendment to Restricted Stock Award Agreement for John R. Cochran (incorporated by reference from Exhibit 10.38 to the Form 10-K filed by the Registrant on March 22, 1999)*

31

10.27	Second Amendment to Restricted Stock Award Agreement for John R. Cochran (incorporated by reference from Exhibit 10.27 to the Form 10-K/A filed by the registrant on April 30, 2001)*
10.28	Restricted Stock Award Agreement of John R. Cochran dated April 9, 1997 (incorporated by reference from Exhibit 10.18 to the Form 10-K filed by the registrant on February 24, 1998)*
10.29	First Amendment to Restricted Stock Award Agreement for John R. Cochran (incorporated by reference from Exhibit 10.29 to the Form 10-K/A filed by the registrant on April 30, 2001)*
10.30	Amended and Restated SERP Agreement for John R. Cochran (incorporated by reference from Exhibit 10.30 to the Form 10-K/A filed by the registrant on April 30, 2001)*
10.31	Employment Agreement of Sid A. Bostic (incorporated by reference from Exhibit 10.31 to the Form 10-K/A filed by the registrant on April 30, 2001)*
10.32	Restricted Stock Award Agreement of Sid A. Bostic dated February 1, 1998 (incorporated by reference from Exhibit 10.20 to the Form 10-K filed by the registrant on February 24, 1998)*
10.33	First Amendment to Restricted Stock Award Agreement of Sid A. Bostic (incorporated by reference from Exhibit 10.25.1 to the Form 10-Q filed by the registrant on May 14, 1999) *
10.34	Form of FirstMerit Corporation Change in Control Termination Agreement (incorporated by reference from Exhibit 10.32 to the Form 10-K filed by the registrant on March 9, 2001)*
10.35	Form of FirstMerit Corporation Displacement Agreement (incorporated by reference from Exhibit 10.33 to the Form 10-K filed by the registrant on March 9, 2001)*
10.36	Form of Director and Officer Indemnification Agreement and Undertaking (incorporated by reference from Exhibit 10(s) to the Form 8-K/A filed by the registrant on April 27, 1995)
10.37	Independent Contractor Agreement with Gary G. Clark, dated February 12, 1999 (incorporated by reference from Exhibit 10.38 to the Form 10-Q filed by the Registrant on May 14, 1999)*
10.38	Credit Agreement among FirstMerit Corporation, Bank One, N.A., and Lenders, dated November 27, 2000 (incorporated by reference from Exhibit 10.36 to the Form 10-K filed by the registrant on March 9, 2001)
10.39	Distribution Agreement, by and among FirstMerit Bank, N.A. and the Agents, dated July 15, 1999 (incorporated by reference from Exhibit 10.41 to the Form 10-K filed by the Registrant on March 10, 2000)
21	Subsidiaries of FirstMerit Corporation
25.1	Form T-1 Statement of Eligibility of Firstar Trust Company to act as Property Trustee under the Amended and Restated Declaration of Trust of FirstMerit Capital Trust I, fka Signal Capital Trust I (incorporated by reference from Exhibit 26.1 to the Form S-4 No. 333-52581-01, filed by FirstMerit Capital Trust I, fka Signal Capital Trust I, on May 13, 1998)
25.2	Form T-1 Statement of Eligibility of Firstar Trust Company to act as Debenture Trustee under the FirstMerit Capital Trust I, fka Signal Capital Trust I, Indenture (incorporated by reference from Exhibit 26.1 to the Form S-4 No. 333-52581-01, filed by FirstMerit Capital Trust I, fka Signal Capital Trust I, on May 13, 1998)

*  Management Contract or Compensatory Plan or Arrangement

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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.

FIRSTMERIT CORPORATION

By:   /s/TERRENCE E. BICHSEL

Terrence E. Bichsel, Executive Vice President

and Chief Financial Officer

DATE: November 9, 2001

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