8-K/A

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

Amendment No. 1

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

Date of Report (Date of earliest event reported): May 14, 2010

FirstMerit Corporation

(Exact name of registrant as specified in its charter)

Ohio
(State or other jurisdiction
of incorporation) 0-10161
(Commission File
Number) 34-1339938
(IRS Employer
Identification No.)

III Cascade Plaza, 7^th Floor Akron, OH
(Address of principal executive offices) 44308
(Zip Code)

Registrant’s telephone number, including area code: (330) 966-6300

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 2.01 Completion of Acquisition or Disposition of Assets
	Item 9.01 Financial Statements and Exhibits
SIGNATURES
Exhibit Index
EX-23.1
EX-99.2

Explanatory Note

     On May 17, 2010, FirstMerit Corporation (the “Corporation”) filed a Current Report on Form 8-K (the “Original Report”) to report that its wholly owned subsidiary, FirstMerit Bank, N.A. (the “Bank”) had entered into a purchase and assumption agreement on May 14, 2010 (the “Agreement”) with the Federal Deposit Insurance Corporation (“FDIC”), as receiver, pursuant to which the Bank acquired certain assets and assumed substantially all of the deposits and certain liabilities of Midwest Bank and Trust Company, an Illinois state-chartered bank headquartered in Elmwood Park, Illinois (“Midwest Bank”).

     This Current Report on Form 8-K/A (the “Amendment”) amends and supplements the disclosures provided in Items 2.01 and 9.01 of the Original Report. Except as otherwise provided herein, the other disclosures made in the Original Report remain unchanged. All financial and other numeric measures of Midwest Bank as described below were based upon information as of May 14, 2010, and may be subject to change.

     In accordance with the guidance provided in Securities and Exchange Commission Staff Accounting Bulletin Topic 1.K, Financial Statements of Acquired Troubled Financial Institutions (“SAB 1:K”) and a request for relief granted by the Commission, the Corporation has omitted certain financial information of Midwest Bank required by Rule 3-05 of Regulation S-X and the related pro forma financial information under Article 11 of Regulation S-X. SAB 1:K provides relief from the requirements of Rule 3-05 of Regulation S-X and the related pro forma financial information required under Article 11 of Regulation S-X under certain circumstances, including a transaction such as the one set forth in the Agreement, in which the Corporation engages in an acquisition of a troubled financial institution for which historical financial statements are not reasonably available and in which federal assistance is an essential and significant part of the transaction.

     Statements made in this Amendment, other than those concerning historical financial information, may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties. These forward-looking statements include, without limitation, statements regarding the Corporation’s expectations concerning its financial condition, operating results, cash flows, liquidity and capital resources. A discussion of risks, uncertainties and other factors that could cause actual results to differ materially from management’s expectations is set forth under the captions” Forward-Looking Statements”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2009 and in the Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010.

Item 2.01 Completion of Acquisition or Disposition of Assets

     The following discussion of assets acquired and liabilities assumed are presented at estimated fair value on the date of the Agreement. The fair values of the assets acquired and liabilities assumed were determined as described in Note 3 to the consolidated statement of assets acquired and liabilities assumed, dated as of May 14, 2010 for the Agreement, and the accompanying notes thereto, which is attached hereto as Exhibit 99.2 and incorporated herein by reference (the “Audited Statement”). These fair value estimates are based on the information available, and are subject to change for up to one year after the closing date of the acquisition as additional information relative to closing date fair values becomes available. The Bank and the FDIC are engaged in on-going discussions that may impact which assets and liabilities are ultimately acquired or assumed by the Bank and/or the purchase price. In addition, the tax treatment of FDIC assisted acquisitions is complex and subject to interpretations that may result in future adjustments of deferred taxes as of the acquisition date. The disclosure set forth in this Item 2.01 reflects the status of these items to the best of management’s knowledge as of July 27, 2010.

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     The Midwest Bank acquisition consisted of assets with a fair value of approximately $2.9 billion, including $1.8 billion of loans, $565.3 million of investment securities, $279.4 million of cash and cash equivalents, $230.0 million related to the FDIC’s indemnification of the Bank against certain future losses described below, $7.4 million in core deposit intangibles and $34.4 million of other assets. Liabilities with a fair value of approximately $3.0 billion were assumed, including $2.3 billion of deposits, $377.7 million of Federal Home Loan Bank (“FHLB”) advances, $343.7 million of security repurchase agreements, and $17.6 million of other liabilities.

     Subsequent to May 14, 2010, the Bank paid cash of $227.5 million to the FDIC for the assumption of the net liabilities. In addition, as part of the consideration for the transaction, the Bank delivered to the FDIC a cash settled value appreciation instrument (“VAI”) pursuant to which the FDIC was granted a cash-settled value appreciation right with respect to 2.5 million units, with each unit mirroring one share of the common stock of the Corporation. Under the terms of the VAI, the FDIC had the right to obtain a cash payment equal to the product of: (1) the number of units with respect to which the FDIC exercises the VAI; and (2) difference between the (A) the average per share volume weighted price of our common stock over the two Nasdaq trading days immediately prior to the date on which the VAI is exercised and (B) $22.81. The VAI was exercisable by the FDIC, in whole or in part, on one or more occasions, for the period commencing on May 21, 2010 and expiring at 5:00 p.m. EST on June 14, 2010. The VAI expired, unexercised, on June 14, 2010.

     The Bank recognized $277.7 million of goodwill from the acquisition of certain assets and assumption of certain liabilities of Midwest Bank from the FDIC which reflects the residual difference in the fair value of the net liabilities assumed and the payment to the FDIC for acquiring this net liability. The goodwill is deductible for income tax purposes.

     The Bank also entered into loss sharing agreements with the FDIC that collectively cover one- to four-family and multifamily residential mortgage and construction loans, land development and other mortgage loans, commercial and industrial loans, consumer loans, and other commercial assets (referred to collectively as “covered assets”). Pursuant to the terms of the loss sharing agreements, the FDIC’s obligation to reimburse the Bank for losses with respect to covered assets begins with the first dollar of loss incurred. The FDIC will reimburse the Bank for 80% of losses on covered assets of Midwest Bank. The Bank will reimburse the FDIC for its share of recoveries with respect to losses for which the FDIC paid the Bank a reimbursement under the loss sharing agreements. Certain other assets of Midwest Bank were acquired by the Bank that are not covered by loss sharing agreements with the FDIC. These assets include marketable securities purchased at fair market value and other tangible assets.

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     The following table summarizes the assets covered by the FDIC loss sharing agreements and the estimated fair values:

	May 14, 2010
	(dollars in millions)
	FDIC
	Covered		Estimated
	Amount		Fair Value
Covered Assets:
Loans	$	2,152.6	$	1,830.0
Other Real Estate		27.3		26.2
	$	2,179.9	$	1,856.2

     The loss sharing agreements applicable to single family residential mortgage loans provides for FDIC loss sharing and Bank reimbursement to the FDIC for recoveries for ten years. The loss sharing agreement applicable to commercial loans and other covered assets provides for FDIC loss sharing for five years and Bank reimbursement to the FDIC for a total of eight years for recoveries.

     The loss sharing agreements are subject to certain servicing procedures as specified in an agreement with the FDIC. The fair value of the loss sharing agreements was recorded as an indemnification asset at an estimated fair value of $230.0 million on the acquisition date.

     The Bank has also agreed to pay to the FDIC, on March 15, 2020 (the “True-Up Measurement Date”), half of the amount, if positive, calculated as: (1) 20% of the intrinsic loss estimate of the FDIC (approximately $152 million); minus (2) the sum of (A) 25% of the asset premium paid in connection with the acquisition (approximately $20 million), plus (B) 25% of the Cumulative Shared-Loss Payments (as defined below) plus (C) the Cumulative Servicing Amount (as defined below). For the purposes of the above calculation, Cumulative Shared-Loss Payments means: (i) the aggregate of all of the payments made or payable to the Bank under the Shared-Loss Agreements; minus (ii) the aggregate of all of the payments made or payable to the FDIC under the Shared-Loss Agreements. Cumulative Servicing Amount means the Period Servicing Amounts (as defined in the loss sharing agreements) for every consecutive twelve-month period prior to and ending on the True-Up Measurement Date in respect of each of the Shared-Loss Agreements during which the loss sharing provisions of the applicable Shared-Loss Agreement is in effect.

     As of May 14, 2010, the FDIC true-up liability is estimated to be $8.5 million. The result of the calculation is based on the net present value of expected future cash payments to be made by the Bank to the FDIC at the conclusion of the loss share agreements. The discount rate used was based on current market rates. The expected cash flows were calculated in accordance with the loss share agreements and are based primarily on the expected losses on the covered assets.

     The foregoing summary of the Agreement, as thereby amended, including the loss sharing agreements, is not complete and is qualified in its entirety by reference to the full text of the Agreement, and certain other exhibits attached to this Amendment, which are incorporated herein by reference.

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Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired

Discussion

     As set forth in Item 2.01 above, on May 14, 2010, the Bank acquired certain assets and assumed substantially all of the deposits and certain liabilities of Midwest Bank pursuant to the Agreement. A narrative description of the anticipated effects of the acquisition on the Corporation’s financial condition, liquidity, capital resources and operating results is presented below. This discussion should be read in conjunction with the historical financial statements and the related notes of the Corporation, which have been filed with the Securities and Exchange Commission (the “Commission”) and the Audited Statement, which is attached hereto as Exhibit 99.2.

     The acquisition increased the Corporation’s total assets and total deposits by approximately 19.30% and 19.42%, respectively, as compared with balances at March 31, 2010, and is expected to positively affect the Corporation’s operating results, to the extent the Corporation earns more from interest earned on its assets than it pays in interest on deposits and other borrowings. The ability of the Corporation to successfully collect interest and principal on loans acquired and collect reimbursement from the FDIC on the related indemnification asset will also impact cash flows and operating results.

     The Corporation estimated the acquisition-date fair value of the acquired assets and assumed liabilities in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC Topic 805”) and ASC Topic 820, Fair Value Measurements. However, the amount that the Corporation realizes on these assets could differ materially from the carrying value reflected in the attached Audited Statement primarily as a result of changes in the timing and amount of collections on the acquired loans in future periods. Because of the loss sharing agreements with the FDIC on these assets, as described in Item 2.01 above, the Corporation does not expect to incur significant losses. To the extent the actual values realized for the acquired loans differ from the estimated amounts, the indemnification asset will generally be impacted in an offsetting manner due to the loss sharing support from the FDIC.

Financial Condition

     In the acquisition, the Bank purchased $1.8 billion of loans at fair value, net of a $322.6 million estimated discount to the outstanding principal balance, representing approximately 19.93% of the Corporation’s total loans, net of the allowance for loan losses, at March 31, 2010. The Bank also acquired $279.4 million in cash and cash equivalents, and $565.3 million in securities at fair value.

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     The following table presents information with respect to the fair value of certain acquired earning assets and loans, as well as their book balance at acquisition date, contractual term and average effective yield.

Schedule of Earning Assets Acquired
(dollars in millions)

	May 14, 2010
					Average		Effective
	Book				Months		Interest
	Balance		Fair Value		to Maturity		Rate
Earning Assets
Interest bearing deposits in other banks, the Federal Reserve, and federal funds sold	$	257.5	$	257.6		0.0		0.20	%
Investment securities		566.3		565.3		130.7		1.97	%
Loans
Single family residential real estate and HELOCs		307.1		253.7		94.9		6.50	%
Commercial real estate		1,168.5		1,034.1		26.1		6.92	%
Real estate construction and land		229.5		177.3		6.5		7.67	%
Installment and consumer		5.0		4.7		13.6		7.00	%
Commercial and industrial		398.4		354.1		12.0		6.47	%
Other Loans		44.1		6.1		3.0		0.00	%
Total Loans	$	2,152.6	$	1,830.0
Total earning assets	$	2,976.4	$	2,652.9

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     The following table reflects the scheduled maturities of the acquired loans:

May 14, 2010
(dollars in millions)

	Single Family
	Residential Real				Real Estate
	estate and		Commerical		Construction		Installment		Commercial		Other
	HELOCs		Real Estate		and Land		and Consumer		and Industrial		Loans		Total
Contractual maturities:
One year or less	$	26.0	$	357.2	$	139.9	$	3.2	$	268.0	$	6.1	$	800.4
One to five years		121.3		629.3		36.7		1.5		84.6		0.0		873.4
Over five years		106.4		47.6		0.7		0.0		1.5		0.0		156.2
Total	$	253.7	$	1,034.1	$	177.3	$	4.7	$	354.1	$	6.1	$	1,830.0
Rate Sensitivity:
Fixed	$	61.8	$	818.3	$	26.6	$	3.9	$	109.4	$	6.1	$	1,026.1
Variable		191.9		215.8		150.7		0.8		244.7		0.0		803.9
	$	253.7	$	1,034.1	$	177.3	$	4.7	$	354.1	$	6.1	$	1,830.0

     In the acquisition, the Bank assumed $2.3 billion in deposits at estimated fair value. This amount represents an increase of approximately 19.42% to the Corporation’s total deposits of $9.4 billion at March 31, 2010. Demand and savings deposit accounts make up $748.7 million of these assumed deposits. The Bank also assumed $377.7 million in FHLB advances, and $343.7 million in security repurchase agreements at estimated fair value.

     In its assumption of the deposit liabilities, the Bank believed that the customer relationships associated with these deposits have intangible value. The Bank applied ASC Topic 805, which prescribes the accounting for goodwill and other intangible assets such as core deposit intangibles, in a business combination. The Bank determined the estimated fair value of the core deposit intangible asset totaled $7.4 million, which will be amortized utilizing an accelerated amortization method over an estimated economic life not to exceed 10 years. In determining the valuation amount, deposits were analyzed based on factors such as type of deposit, deposit retention, interest rates, age of deposit relationships, and the maturities of time deposits.

     Future amortization of this core deposit intangible asset over the estimated life will decrease results of operations, net of any potential tax effect. Since amortization is a noncash item, it will have no effect upon future liquidity and cash flows. For the calculation of regulatory capital, this core deposit intangible asset is disallowed and is a reduction to equity capital. The Corporation expects that disallowing this intangible asset will not materially adversely affect the Corporation’s or the Bank’s regulatory capital ratios.

     The core deposit intangible asset is subject to significant estimates by management of the Corporation related to the value and the life of the asset. These estimates could change over time. The Corporation will review the valuation of this asset periodically to ensure that no impairment has occurred. If any impairment is subsequently determined, the Bank will record the impairment as an expense in its consolidated statement of operations.

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Operating Results and Cash Flows

     The Corporation’s management has from time to time become aware of acquisition opportunities and has performed various levels of review related to potential acquisitions in the past. This acquisition was attractive to the Corporation for a variety of reasons, including the:

• attractiveness in the pricing of the acquired loan portfolios including the indemnification assets;

• ability to increase the Corporation’s market share in the Chicago, Illinois region;

• attractiveness of immediate low cost core deposit funds given that over the past several years, organic core deposit growth has been exceptionally difficult as financial institutions compete for deposits; and

• opportunities to enhance income and efficiency due to duplications of effort and decentralized processes as the Corporation expects to enhance income by centralizing some duties and removing duplications of effort.

     Based on these and other factors, including the level of FDIC support related to the acquired loans, and other real estate, the Corporation believes that the acquisition will have an immediate positive impact on its earnings.

     The acquisition increased the Corporation’s total assets and total deposits by 19.30%, or $2.9 billion, and increased total deposits 19.42%, or $2.3 billion, as compared with balances at March 31, 2010. The Corporation believes that the transaction will improve the Bank’s net interest income, as the Bank earns more from interest earned on its loans and investments than it pays in interest on deposits and borrowings.

     The extent to which the Bank’s operating results may be adversely affected by the acquired loans is largely offset by the loss sharing agreements and the related discounts reflected in the estimated fair value of these assets at the acquisition date. In accordance with the provisions of ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (“ASC Topic 310-30”), the fair values of the acquired loans reflect an estimate of expected credit losses related to these assets. As a result, the Corporation’s operating results would only be adversely affected by loan losses to the extent that such losses exceed the expected credit losses reflected in the fair value of these assets at the acquisition date. In addition, to the extent that the stated interest rate on acquired loans was not considered a market rate of interest at the acquisition date, appropriate adjustments to the acquisition-date fair value were recorded. These adjustments mitigate the risk associated with the acquisition of loans earning a below-market rate of return.

     ASC Topic 310-30 applies to a loan with evidence of deterioration of credit quality since origination, for which it is probable, at acquisition, that the investor will be unable to collect all contractually required payments receivable. ASC Topic 310-30 prohibits carrying over or creating an allowance for loan losses upon initial recognition for loans that fall under its scope. As of the date of the Agreement, the preliminary estimate of the contractual principal and interest payments for all acquired impaired loans, and non-impaired loans the Bank elected to account for under ASC Topic 310-30, was $2.4 billion and the estimated fair value of the loans was $1.7 billion, net of an non-accretable yield of $445.3 million and an accretable yield of $242.2 million. These amounts were determined based upon the estimated remaining life of the underlying loans, which include the effects of estimated prepayments, expected credit losses and market liquidity and interest rates.

     Additionally, the Bank acquired $138.3 million of loans with revolving privileges which were determined to be outside the scope of ASC Topic 310-30. The loss sharing agreements will likely have a material impact on the cash flows and operating results of the Corporation in both the short-term and the long-term. In the short-term, as stated above, it is likely that the covered assets will experience deterioration in

8

payment performance or will be determined to have inadequate collateral values to repay the loans. In such instances, the Corporation will likely no longer receive payments from the borrowers, which will impact cash flows. The loss sharing agreements will not fully offset the financial effects of such a situation. However, if a loan is subsequently charged off or charged down after the Corporation exhausts its best efforts at collection, the loss sharing agreements will cover a substantial portion of the loss associated with the covered assets.

     The long-term effects that the Corporation may experience will depend primarily on the ability of the borrowers under the various loans covered by the loss sharing agreements to make payments over time. As the loss sharing agreements cover up to a 10-year period (5 years for commercial loans and other assets), changing economic conditions will likely impact the timing of future charge-offs and the resulting reimbursements from the FDIC. The Corporation believes that any recapture of interest income and recognition of cash flows from the borrowers or received from the FDIC (as part of the FDIC indemnification asset) may be recognized unevenly over this period, as the Corporation exhausts its collection efforts under its normal practices. In addition, the Corporation recorded substantial discounts related to the purchase of these covered assets. A portion of these discounts will be accretable into income over the economic life of the loans and will be dependent upon the timing and success of the Corporation’s collection efforts on the covered assets.

Liquidity and Capital Resources

     The transaction significantly enhanced the liquidity position of the Bank. The Bank acquired $279.4 million in cash and cash equivalents, as well as $565.3 million of investment securities, which were subsequently sold. These additions to the Corporation’s balance sheet represent additional support for the Corporation’s liquidity needs.

     Deposits in the amount of $2.3 billion were also assumed. Of this amount, 33.16%, or $748.7 million, were in the form of highly liquid transaction accounts. Certificates of deposit and other time deposits comprised 66.84%, or $1.5 billion, of total deposits.

     As permitted by the FDIC, the Bank had the option to reprice the acquired deposit portfolios to current market rates within seven days of the acquisition date. In addition, depositors had the option to withdraw funds without penalty. The Bank chose to reprice approximately $359.7 million in deposits comprised of all assumed brokered deposits. Through June 30, 2010, approximately 33% of the repriced deposit accounts had been redeemed without penalty.

     At March 31, 2010, the Bank was considered “well-capitalized” based on a calculation of relevant regulatory ratios. The acquisition decreased the Bank’s capital ratios, however, the Bank remains “well-capitalized” after taking into consideration the results of the acquisition.

     The Bank had the following capital ratios at March 31, 2010 and December 31, 2009.

	March 31, 2010			December 31, 2009
Tier 1 Ratio		9.35	%		10.31	%
Total Capital Ratio		10.56	%		11.51	%
Leverage Ratio		7.09	%		8.00	%

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Financial Statements

     Attached hereto as Exhibit 99.2 and incorporated by reference into this Item 9.01(a) is the Audited Statement and the accompanying notes thereto.

Report of Independent Registered Public Accounting Firm
Consolidated Statement of Assets Acquired and Liabilities Assumed at May 14, 2010
Notes to Consolidated Statement of Assets Acquired and Liabilities Assumed

     The Corporation has omitted certain financial information of Midwest Bank required by Rule 3-05 of Regulation S-X and the related pro forma financial information under Article 11 of Regulation S-X in accordance with a request for relief granted by the Commission in accordance with the guidance provided in SAB 1:K. SAB 1:K provides relief from the requirements of Rule 3-05 of Regulation S-X and the related pro forma financial information required under Article 11 of Regulation S-X under certain circumstances, including a transaction such as the one set forth in the Agreement, in which the Corporation engages in an acquisition of a troubled financial institution for which historical financial statements are not reasonably available and in which federal assistance is an essential and significant part of the transaction.

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(d) Exhibits

2.1	Purchase and Assumption Agreement Whole Bank All Deposits, among the Federal Deposit Insurance Corporation, receiver of Midwest Bank and Trust Company, Bank, Elmwood Park, Illinois, the Federal Deposit Insurance Corporation and FirstMerit Bank, N.A., dated as of May 14, 2010 (incorporated by reference from Exhibit 2.1 to the Current Report on Form 8-K field with the Commission by the Corporation on May 17, 2010).
23.1	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm (filed herewith).
99.2	Report of Independent Registered Public Accounting Firm Consolidated Statement of Assets Acquired and Liabilities Assumed at May 14, 2010 Notes to the Consolidated Statement of Assets Acquired and Liabilities Assumed

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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
Date: July 27, 2010	By:	/s/ Terrence E. Bichsel
		Terrence E. Bichsel
		Executive Vice President and Chief Financial Officer

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Form 8-K FirstMerit Corporation

Exhibit Index

Exhibit No.	Description
2.1	Purchase and Assumption Agreement Whole Bank All Deposits, among the Federal Deposit Insurance Corporation, receiver of Midwest Bank and Trust Company, Bank, Elmwood Park, Illinois, the Federal Deposit Insurance Corporation and FirstMerit Bank, N.A., dated as of May 14, 2010 (incorporated by reference from Exhibit 2.1 to the Current Report on Form 8-K field with the Commission by the Corporation on May 17, 2010).
23.1	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm (filed herewith).
99.2	Report of Independent Registered Public Accounting Firm Consolidated Statement of Assets Acquired and Liabilities Assumed at May 14, 2010 Notes to the Consolidated Statement of Assets Acquired and Liabilities Assumed

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EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following registration statements:

• Form S-8 No. 33-47074

• Form S-8 No. 33-47147

• Form S-8 No. 33-57557

• Form S-8 No. 33-63101

• Form S-8 No. 333-66129

• Form S-8 No. 333-72287

• Form S-8 No. 333-78953

• Form S-8 No. 333-120446

• Form S-8 No. 333-138624

• Form S-8 No. 333-156317

• Form S-3 No. 333-157163

of our report dated July 27, 2010 with respect to the consolidated statement of assets acquired and liabilities assumed by FirstMerit Bank, N.A. (a wholly owned subsidiary of FirstMerit Corporation), pursuant to the Purchase and Assumption Agreement, among the Federal Deposit Insurance Corporation, receiver of Midwest Bank and Trust Company, the Federal Deposit Insurance Corporation and FirstMerit Bank, N.A., dated May 14, 2010, which report appears in the July 27, 2010 Current Report on Form 8-K/A of FirstMerit Corporation.

/s/ Ernst & Young LLP

Akron, Ohio
July 27, 2010

EX-99.2

EXHIBIT 99.2

INDEX OF FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm	2
Consolidated Statement of Assets Acquired and Liabilities Assumed at May 14, 2010	3
Notes to the Consolidated Statement of Assets Acquired and Liabilities Assumed	4 - 9

1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of FirstMerit Corporation

We have audited the accompanying consolidated statement of assets acquired and liabilities assumed by FirstMerit Bank, N.A. (a wholly owned subsidiary of FirstMerit Corporation) pursuant to the Purchase and Assumption Agreement dated May 14, 2010 (the “Agreement”). This consolidated statement of assets acquired and liabilities assumed is the responsibility of FirstMerit Bank, N.A.’s management. Our responsibility is to express an opinion on this consolidated statement of assets acquired and liabilities assumed based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated statement of assets acquired and liabilities assumed is free of material misstatement. We were not engaged to perform an audit of FirstMerit Bank, N.A.’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of FirstMerit Bank, N.A.’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated statement of assets acquired and liabilities assumed, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated statement of assets acquired and liabilities assumed referred to above presents fairly, in all material respects, the assets acquired and liabilities assumed by FirstMerit Bank, N.A. (a wholly owned subsidiary of FirstMerit Corporation) pursuant to the Agreement, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

Akron, Ohio
July 27, 2010

2

CONSOLIDATED STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED
by FirstMerit Bank, N.A.
(a wholly owned subsidiary of FirstMerit Corporation)
(Dollars in millions)

	May 14, 2010
Cash and due from banks	$	21.8
Interest-bearing deposits in banks and the Federal Reserve account		257.6
Investment securities		537.7
Other securities		27.6
Covered loans		1,830.0
FDIC indemnification asset		230.0
Covered other real estate		26.2
Core deposit intangible asset		7.4
Other assets		8.2
Total assets acquired	$	2,946.5
Deposits:
Demand-non-interest bearing	$	349.5
Demand-interest bearing		152.9
Savings and money market accounts		246.3
Certificates and other time deposits		1,509.0
Total deposits		2,257.7
Due to FDIC		227.5
Advances from the Federal Home Loan Bank		377.7
Securities sold under repurchase agreements		343.7
Accrued expenses and other liabilities		17.6
Total liabilities assumed	$	3,224.2
Net liabilities assumed	$	(277.7	)

The accompanying notes are an integral part of this consolidated financial statement.

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NOTES TO THE CONSOLIDATED STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED
by FirstMerit Bank, N.A.
(a wholly owned subsidiary of FirstMerit Corporation)
May 14, 2010

Note 1 — FDIC-Assisted Acquisition of Certain Assets and Liabilities of Midwest Bank and Trust Company

     On May 14, 2010, FirstMerit Bank, N.A. (the “Bank”), a wholly owned subsidiary of FirstMerit Corporation (the “Corporation”), assumed substantially all of the deposits and certain identified liabilities and acquired substantially all of the loans and certain other assets of Midwest Bank and Trust Company (“Midwest Bank”), an Illinois state-chartered bank headquartered in Elmwood Park, Illinois and a wholly owned subsidiary of Midwest Banc Holdings, Inc., from the Federal Deposit Insurance Corporation (the “FDIC”), as receiver for Midwest Bank, pursuant to the terms of a purchase and assumption agreement (the “Agreement”).

     The Bank acquired approximately $2.9 billion in assets, including approximately $1.8 billion of loans, $565.3 million of marketable securities and $279.4 million of cash and cash equivalents. The loans acquired by the Bank principally consist of one- to four-family and multifamily residential mortgage and construction loans, land development and other mortgage loans, commercial and industrial loans and consumer loans. The Bank also assumed approximately $3.2 billion of liabilities, including approximately $2.3 billion in customer deposits.

     All of Midwest Bank’s 23 branches and three additional banking offices located in Illinois have reopened as operations of the Bank. The physical branch locations and leases were not immediately acquired by the Bank in the acquisition. The Bank has an option, exercisable for 90 days following the closing of the acquisition, to acquire, at fair market value, any bank premises that were owned by, and to assume any leases relating to bank premises held by, Midwest Bank (including ATM locations). The Bank is currently reviewing the bank premises and related leases of Midwest Bank and currently expects to acquire substantially all of the Midwest Bank facilities and leases. In addition, the Bank has an option, exercisable for 30 days following the closing of the acquisition, to elect to assume or reject any contracts that provided for the rendering of services by or to Midwest Bank. The Bank has exercised its option and accepted or repudiated the contracts exercisable under the 30 day option.

     The assets acquired and liabilities assumed in the transaction are presented at estimated fair value on the date of the acquisition. The fair values of the assets acquired and liabilities assumed were determined as described in Note 3 below. These fair value estimates are considered preliminary, and are subject to change for up to one year after the closing date of the acquisition as additional information relative to closing date fair values becomes available. The Bank and the FDIC are engaged in on-going discussions that may impact which assets and liabilities are ultimately acquired or assumed by the Bank and/or the purchase prices. In addition, the tax treatment of FDIC assisted acquisitions is complex and subject to interpretations that may result in future adjustments of deferred taxes as of the acquisition date.

Note 2 — Loss Sharing Agreement and FDIC Indemnification Asset

     As part of the Agreement, the Bank and the FDIC also entered into certain loss sharing agreements. Pursuant to the terms of these loss sharing agreements, the FDIC’s obligation to reimburse the Bank for losses with respect to certain loans begins with the first dollar of loss incurred.

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The amounts covered by the loss sharing agreements are the pre-acquisition book values of the underlying assets, the contractual balance of unfunded commitments that were acquired, and certain future net direct costs. The FDIC will reimburse the Bank for 80% of losses. The Bank will reimburse the FDIC for its share of recoveries with respect to losses for which the FDIC paid the Bank a reimbursement under the loss sharing agreement. Certain other assets of Midwest Bank were acquired by the Bank that are not covered by loss sharing agreements with the FDIC. These assets include investment securities purchased at fair market value and other tangible assets.

     The following table summarizes the assets covered by the FDIC loss sharing agreements and the estimated fair values:

	May 14, 2010
	(dollars in millions)
	FDIC
	Covered		Estimated
	Amount		Fair Value
Covered Assets:
Loans	$	2,152.6	$	1,830.0
Other Real Estate		27.3		26.2
	$	2,179.9	$	1,856.2

     The loss sharing agreements applicable to single family residential mortgage loans provides for FDIC loss sharing and Bank reimbursement to the FDIC, in each case as described above, for ten years. The loss sharing agreement applicable to commercial loans, covered investment securities and other assets provides for FDIC loss sharing for five years and Bank reimbursement of recoveries to the FDIC for eight years, in each case as described above.

     The loss sharing agreements are subject to certain servicing procedures as specified in agreements with the FDIC. The expected reimbursements under the loss sharing agreements were recorded as indemnification assets on the accompanying consolidated statement of assets acquired and liabilities assumed at their estimated fair value of $230.0 million on the acquisition date. The FDIC loss share indemnification assets reflect the present value of the expected net cash reimbursement related to the loss sharing agreements described above.

Note 3 — Basis of Presentation

     As part of the acquisition, the Bank acquired three subsidiaries of Midwest Bank: a broker-dealer; an investment company; and a real estate investment trust that is a subsidiary of the investment company. The consolidated statement of assets acquired and liabilities assumed include the accounts of these subsidiaries. All significant intercompany balances have been eliminated in consolidation.

     The real estate investment trust subsidiary is capitalized with common stock, all of which is held by the investment company, and preferred stock, 17% of which is owned by unaffiliated investors. The preferred shares are entitled to a cumulative annual preferred return of 12.5% and may be redeemed at any time by notice of such redemption on a date selected by the investment company for such redemption. The redemption price equals 100% of the liquidation value plus all accrued unpaid dividends to the redemption date and a redemption premium if the units are redeemed before the year 2012. The balance of the minority interest is $78.1 thousand at acquisition date.

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     The Corporation has determined that the acquisition constitutes a business acquisition as defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. Accordingly, the assets acquired and liabilities assumed are presented at their estimated fair values as required. Fair values were determined based on the requirements of ASC Topic 820, Fair Value Measurements. In many cases the determination of these fair values required management to make estimates about discount rates, future expected cash flows, market conditions and other future events that are highly subjective in nature and subject to change. The following is a description of the methods used to determine the fair values of significant assets and liabilities.

Cash and Due from Banks, Interest-bearing Deposits in Banks and the Federal Reserve

     The carrying amount of these assets is a reasonable estimate of fair value based on their short-term nature.

Investment Securities

     Investment securities were acquired at their fair values from the FDIC. The fair values provided by the FDIC were reviewed and considered reasonable based on the Corporation’s understanding of the marketplace.

Loans

     Fair values for loans were based on a discounted cash flow methodology that considered factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan and whether or not the loan was amortizing, and a discount rate reflecting the Corporation’s assessment of risk inherent in the cash flow estimates. Loans were grouped together according to similar characteristics and were treated in the aggregate when applying various valuation techniques.

Core Deposit Intangible

     This intangible asset represents the value of the relationships that Midwest Bank had with their deposit customers. The fair value of this intangible asset was estimated based on a discounted cash flow methodology that gave appropriate consideration to expected customer attrition rates, cost of the deposit base, reserve requirements and the net maintenance cost attributable to customer deposits.

Covered Other Real Estate

     Covered other real estate is presented at the estimated present value that management expects to receive when the property is sold, net of related costs to sell.

FDIC Indemnification Asset

     The loss sharing asset was measured separately from the related covered assets as it is not contractually embedded in the assets and is not transferable with the assets should the Bank choose to dispose of the assets. Fair value was estimated using projected cash flows related to the loss sharing agreement based on the expected reimbursements for losses and the applicable loss sharing percentage. These expected reimbursements do not include reimbursable amounts related to future covered expenditures. These cash flows were discounted to reflect the uncertainty of the timing and receipt of the loss sharing reimbursement from the FDIC.

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Deposits

     The fair values used for the demand and savings deposits that comprise the transaction accounts acquired, by definition equal the amount payable on demand at the reporting date. The fair values for time deposits are estimated using a discounted cash flow calculation that applies interest rates currently being offered to the interest rates embedded on such time deposits.

FHLB Advances

     The FHLB advances were recorded at their estimated fair values derived using prepayment pricing supplied by the FHLB.

Securities Sold Under Repurchase Agreements

     The securities sold under repurchase agreements were recorded at their estimated fair values derived using prepayment pricing supplied by the contract counter parties.

FDIC True-Up Liability

     The Agreement allows the FDIC to recover a portion of the loss share funds previously paid out under the loss sharing agreements in the event losses fail to reach the expected loss estimate (“FDIC True-Up Liability”). The Bank is to pay to the FDIC, on March 15, 2020 (the “True-Up Measurement Date”), half of the amount, if positive, calculated as: (1) 20% of the intrinsic loss estimate of the FDIC (approximately $152 million); minus (2) the sum of (A) 25% of the asset premium paid in connection with the acquisition (approximately $20 million), plus (B) 25% of the Cumulative Shared-Loss Payments (as defined below) plus (C) the Cumulative Servicing Amount (as defined below). For the purposes of the above calculation, Cumulative Shared-Loss Payments means: (i) the aggregate of all of the payments made or payable to the Bank under the Shared-Loss Agreements; minus (ii) the aggregate of all of the payments made or payable to the FDIC under the Shared-Loss Agreements. Cumulative Servicing Amount means the Period Servicing Amounts (as defined in the loss sharing agreements) for every consecutive twelve-month period prior to and ending on the True-Up Measurement Date in respect of each of the Shared-Loss Agreements during which the loss sharing provisions of the applicable Shared-Loss Agreement is in effect.

     As of May 14, 2010, the FDIC True-Up Liability is estimated to be $8.5 million and is included in accrued expenses and other liabilities in the accompanying consolidated statement of assets acquired and liabilities assumed. The result of the calculation is based on the net present value of expected future cash payments to be made by the Bank to the FDIC at the conclusion of the loss share agreements. The discount rate used was based on current market rates. The expected cash flows were calculated in accordance with the loss share agreements and are based primarily on the expected losses on the covered assets.

Deferred Taxes

      As a result of the acquisition of Midwest Bank, the Bank recorded deferred tax assets of $80.5 million and deferred tax liabilities of $80.5 million resulting in a net zero deferred tax position. The deferred tax assets and liabilities related to the difference between the financial statement and tax basis of the acquired assets and assumed liabilities. Deferred taxes are reported based upon the principles in ASC Topic 740, Income Taxes, and are calculated based on the estimated federal and state income tax rates currently in effect for the Corporation.

Note 4 — Net Assets Acquired

     Under the terms of the Agreement, the FDIC agreed to transfer to the Bank (1) certain assets subject to loss-sharing agreements at book value, (2) certain assets that are not subject to the loss-sharing agreements at a contractually-specified purchase price, (3) certain assets at fair value and (4) certain liabilities at book value.

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     Details related to the transfers at acquisition date, are as follows:

	May 14, 2010
	(dollars in millions)
Net assets assumed per purchase and assumption agreement	$	138.0
Due to FDIC		(227.5	)
Purchase accounting adjustments:
Loans		(322.6	)
Investment securities		(1.0	)
FDIC indemnification asset		230.0
Other real estate		(1.2	)
Core deposit intangible		7.4
Deposits		(9.1	)
Advances from FHLB		(37.7	)
Securities sold under agreements to repurchase		(45.5	)
FDIC true-up liability		(8.5	)
Net liabilities assumed	$	(277.7	)

Note 5 — Investment and Other Securities

     The table below reflects the acquired investment securities at acquisition date:

	May 14, 2010
	Fair Value
	(dollars in millions)
Debt Securities
U.S. Treasury	$	280.0
Residential mortgage-backed securities U.S. government agencies		57.4
Residential collateralized mortgage-backed securities U.S. government agencies		199.0
Equity Securities
U.S. government sponsored entities preferred stock		1.3
Total Investment Securities	$	537.7
Federal Home Loan Bank stock		17.0
Federal Reserve Bank stock		10.6
Total Other Securities	$	27.6

     The table above excludes $530.4 million of the acquired investment securities portfolio was pledged as collateral to secure public funds, Federal Home Loan borrowings and securities sold under repurchase agreements at acquisition date.

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     The estimated fair values of investment securities are shown below by contractual maturity. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	May 14, 2010
	Fair Value
	(dollars in millions)
Due within one year	$	280.0
Due after one through five years		—
Due after five through ten years		12.8
Due after ten years		243.6
Investments with no stated maturity		28.9
Total	$	565.3

Note 6 — Loans

     The composition of loans acquired at acquisition date is as follows:

	May 14, 2010
	Fair Value
	(dollars in millions)
Covered Loans:
Single family residential real estate	$	100.5
HELOCs		153.2
Commercial real estate		1,034.1
Real estate construction and land		177.3
Installment and consumer		4.7
Commercial and industrial		354.1
Accrued interest and other loans		6.1
Total	$	1,830.0

     The following table presents purchased impaired and non-impaired loans accounted for under ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, (“ASC Topic 310-30”) at acquisition date:

	May 14, 2010
	(dollars in millions)
Contractually-required principal and interest	$	2,373.1
Non-accretable difference		(445.3	)
Cash flows expected to be collected		1,927.8
Accretable yield		(242.2	)
Fair value of loans accounted for under ASC 310-30	$	1,685.6

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     The table above excludes $138.3 million of loans with revolving privileges which were determined to be outside the scope of ASC Topic 310-30 and other consumer loans. $858.9 million of the acquired loans was pledged as collateral to secure the Federal Home Loan borrowings at the acquisition date.

Note 7 — Goodwill and Other Intangible Assets

     The accompanying consolidated statement of assets acquired and liabilities assumed reflects a core deposit intangible asset of $7.4 million at May 14, 2010. The core deposit intangible asset will be amortized utilizing an accelerated amortization method over an estimated economic life not to exceed 10 years. Estimated amortization expense for the remainder of 2010 and the five subsequent years thereafter is $1.3 million, $1.0 million, $0.9 million, $0.8 million, $0.7 million and $0.7 million, respectively. The Corporation will review the valuation of this intangible asset periodically to ensure that no impairment has occurred. If any impairment is subsequently determined, the Bank will record the impairment as an expense in its consolidated statement of operations.

     The goodwill of $277.7 million arising from the acquisition of certain assets and assumption of certain liabilities of Midwest Bank from the FDIC is the residual difference in the fair value of the net liabilities assumed and the payment to the FDIC for acquiring the net liabilities. The goodwill is deductible for income tax purposes.

Note 8 — Deposits

     Deposits assumed are composed of the following at acquisition date:

	May 14, 2010
	Fair Value
	(dollars in millions)
Demand-non-interest bearing	$	349.5
Demand-interest bearing		152.9
Savings and money market accounts		246.3
Certificates and other time deposits		1,509.0
Total	$	2,257.7

     At acquisition date, the scheduled maturities of certificates of deposit and other time deposits of more than $100,000 were as follows:

	May 14, 2010
	Fair Value
	(dollars in millions)
Less than three months	$	321.5
Four to six months		182.8
Seven to twelve months		141.4
Greater than twelve months		93.9
Total	$	739.6

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Note 9 — FHLB Advances and Securities Sold Under Agreements to Repurchase

     As of the acquisition date, there were $377.7 million of outstanding borrowings from the FHLB and $343.7 million of securities sold under repurchase agreements recorded at estimated fair value. The FHLB borrowings were secured by a blanket lien on eligible loans plus cash. The advances were recorded at their estimated fair values which were derived using prepayment pricing supplied by the FHLB. The repurchase agreements were secured by investment securities. The fair values of the repurchase agreements were also derived using prepayment pricing supplied by the contract counter parties. As of the date of acquisition, the FHLB advances and securities sold under repurchase agreements assumed in the acquisition have maturity dates greater than five years. The weighted average rates of the FHLB advances and securities sold under repurchase agreements was 3.53% and 4.29% respectively as of the acquisition date.

Note 10 — Subsequent Events

     The Corporation has evaluated subsequent events through the time of filing this Current Report on Form 8-K/A on July 27, 2010. There were no reportable events.

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