8-K

TABLE OF CONTENTS

	Item 7. Financial Statements and Exhibits
	Item 12. Results of Operations and Financial Condition
SIGNATURE
EX-99.1 News Release

SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 8-K

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

Date of Report (Date of Earliest Event Reported): July 15, 2004

FIRSTMERIT CORPORATION
(Exact name of registrant as specified in its charter)

Ohio	0-10161	34-1339938
(State or other jurisdiction of	(Commission	(IRS employer
incorporation or organization)	file number)	identification number)
III Cascade Plaza, 7th Floor Akron, Ohio	44308	(330) 996-6300
(Address of Principal Executive Offices)	(Zip Code)	(Telephone Number)

Copy to:

J. Bret Treier
Vorys, Sater, Seymour and Pease LLP
106 South Main Street, Suite 801
Akron, Ohio 44308
(330) 245-1153

Item 7. Financial Statements and Exhibits

     (c) Exhibits

99.1 Text of FirstMerit Corporation Press Release dated July 15, 2004

Item 12. Results of Operations and Financial Condition

     On July 15, 2004, FirstMerit Corporation announced financial results for the fiscal quarter ended June 30, 2004. A copy of the press release announcing the company’s financial results for this period is attached as Exhibit 99.1 hereto and incorporated by reference herein. The information in this report is being furnished under this Item 12 of this Current Report on Form 8-K.

SIGNATURE

     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 hereunto duly authorized.

		FirstMerit Corporation
Dated: July 15, 2004	By:	/s/ Terrence E. Bichsel
		Terrence E. Bichsel
		Executive Vice President and
		Chief Financial Officer

  EX-99.1 2 l08646aexv99w1.htm EX-99.1 NEWS RELEASE

News Release FirstMerit Corporation
www.firstmerit.com

For Release:	July 15, 2004, 7:30 a.m. EDT
For Information Contact:

Media:	Analysts:
Jacque Sir Louis	Tom O’Malley
(330) 849-8877	(330) 384-7109

FIRSTMERIT REPORTS EARNINGS
FOR SECOND QUARTER 2004

AKRON, OH – July 15, 2004 — FirstMerit Corporation (Nasdaq: FMER) today announced second quarter 2004 net income of $31.0 million, or $0.36 per diluted share. This compares to $36.9 million, or $0.44 per diluted share, for the second quarter of 2003. The lower earnings primarily reflect reduced revenue from net interest margin compression and declining mortgage banking activity, partially offset by a lower provision for loan losses due to evidence of improvement in the Company’s credit quality outlook. Annualized return on average equity (ROE) and return on average assets (ROA) were 12.71% and 1.19%, respectively, compared with 15.09% and 1.40% for the second quarter of 2003.

For the first six months of 2004, FirstMerit reported net income of $43.7 million, or $0.51 per diluted share. This compares with $75.2 million, or $0.89 per diluted share, for the first six months of 2003. ROE and ROA were 8.87% and 0.84%, respectively, compared with 15.53% and 1.43% for the prior-year period.

“We are showing excellent progress in our primary goal of improving credit quality,” said John R. Cochran, chairman and CEO. “We are encouraged by general improvement of credit quality this quarter in the retail and commercial portfolios. Underlying credit quality advancements were achieved by this quarter’s reduction in non-performing assets and net charge-offs. The sale of a substantial portion of non-accrual commercial loans, a lower inflow of new non-accruals and continued improvement in our current retail loan portfolio, has contributed greatly to the normalization of FirstMerit’s asset quality. We attribute these tangible results to the changes we have made to strengthen our loan review process along with aggressive management of our non-performing assets.

“Further, with an improved economic environment in Northeast Ohio, we anticipate greater opportunities to grow and strengthen our business relationships. We also are encouraged by the level of business activity in our new in-store banking offices in Columbus, Ohio, and we anticipate the same success with our expansion into the Toledo market.”

Total revenue, consisting of fully tax-equivalent (FTE) net interest income plus non-interest income excluding securities gains, totaled $133.3 million for the second quarter of 2004, compared with $150.5 million reported in the prior-year period. FTE net interest income was $87.8 million, a decline of 11.9%, reflecting the impact of a 40 basis point narrowing in the net interest margin, to 3.66%, and a 1.8% decline in average earning assets, to $9.7 billion.

-MORE-

News Release FirstMerit Corporation
www.firstmerit.com

Non-interest income for the second quarter of 2004 totaled $47.0 million, compared with $53.9 million for the second quarter of 2003. Excluding securities gains and income from the Company’s discontinued manufactured housing finance business, non-interest income for the second quarter was $45.6 million in 2004 and $50.3 million in 2003. The 9.3% decline primarily reflects reduced mortgage banking activity, partially offset by gains from the wealth management business. The combined contribution from trust, investment and insurance services posted overall fee growth of 11.9%.

Non-interest expense totaled $79.5 million for the second quarter of 2004, compared with $75.7 million for the second quarter of 2003, a 5.0% increase. The increase resulted primarily from 10.7% growth in salary and benefits expense, largely due to higher employment counts from the net addition of 127 full time equivalent employees (4% increase from second quarter, 2003). The increase in employment underscores the Company’s commitment on its aggressive initiatives for revenue growth. Excluding employee expense, operating expenses were virtually unchanged compared with the second quarter of 2003. The efficiency ratio for the quarter was 59.4%, compared with 50.2% for the year ago quarter.

As of June 30, 2004, nonperforming assets were $48.8 million, or 0.75% of period-end loans plus OREO, compared with $88.5 million, or 1.36%, for the linked quarter and $88.3 million, or 1.23%, twelve months ago. The lower level of nonperforming assets this quarter reflects the Company’s sale of non-accrual commercial loans during the quarter and a general improvement in credit quality trends for both the existing retail and commercial portfolios. Net charge-offs for the second quarter were $14.2 million, compared with $18.3 million in the linked quarter and $23.3 million in the prior-year period. Annualized net charge-offs for the second quarter of 2004 were 0.87% of average loans compared with 1.13% for the linked quarter, and 1.30% for the second quarter of 2003.

Total assets at June 30, 2004 totaled $10.4 billion, down 2.7% from June 30, 2003. Overall, net loans declined 9.2% relative to last year as a result of the sale of the Company’s manufactured housing finance business in the fourth quarter of 2003; excluding this business line, the total loan portfolio of $6.5 billion was unchanged from the prior year. Consumer and mortgage loans have been the Company’s focus and have increased 4.0% and 13.4%, respectively, offsetting the 3.3% decline in commercial loans. Investment securities increased 14.3%.

Deposits totaled $7.4 billion at June 30, 2004 a decline of 5.0% over the last twelve months. Core deposits now account for 63.5% of deposits, compared to 59.3% at June 30, 2003, reflecting a 14.8% decline in time deposits.

Shareholders’ equity was $957 million at June 30, 2004. The Company’s capital position remains strong; tangible equity-to-assets was 7.94% at quarter-end. The common dividend per share paid was $0.26, a $0.01 increase from the prior-year period. Period-end common shares outstanding totaled 84.8 million.

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News Release FirstMerit Corporation
www.firstmerit.com

Second Quarter 2004 Highlights

FirstMerit Reduces Nonperforming Loan Exposure: FirstMerit announced the sale of a $36.6 million portfolio of non-accrual commercial loans to numerous buyers on June 11, 2004. The sale positions the Company’s balance sheet for long-term profitability.

Executive Appointments Sharpen Northeast Ohio Focus: FirstMerit announced the restructuring of its important Northeast Ohio region, and named two experienced leaders to head this five-county area. David J. Janus was named president and CEO of FirstMerit’s Cuyahoga and East Lorain offices, and Bruce M. Kephart will serve as president and CEO of FirstMerit’s Lake, Geauga and Ashtabula offices. This expanded leadership team reflects FirstMerit’s commitment to serve the growing needs of owner-managed businesses in this important region.

In-Store Branches Expand FirstMerit’s Presence in Columbus: FirstMerit opened in-store banking offices in Kroger supermarkets in Columbus, Delaware and Upper Arlington, Ohio. An additional in-store banking office scheduled to open in the third quarter will increase FirstMerit’s bank network to eight branches in the growing Columbus market. Amy A. Sutphin, vice president and Regional Banking Center Manager, will oversee the four Columbus-area in-store banking offices. She brings more than 20 years of banking experience, with more than five years of experience in managing in-store branches.

Conference Call: FirstMerit Corporation will host a conference call today, July 15, 2004, at 10:00 a.m. Eastern Time. John Cochran, chairman and CEO, Terry Bichsel, executive vice president and CFO, David Lucht, executive vice president and Chief Credit Officer, and Mark DuHamel, senior vice president and Treasurer, will provide an overview of second quarter results and business highlights.

To participate in the conference call, please dial (800) 865-2821 five minutes before the start time. No pass code is necessary. A replay will be available beginning 1:30 p.m. July 15, 2004, through 12:00 a.m., July 22, 2004, by dialing (800) 642-1687, reservation number 8163474.

The second quarter 2004 earnings release will be available at approximately 7:30 a.m. on the Internet at www.firstmerit.com under the Investor Relations portion of the Web site. Any material non-public information discussed on the conference call will be posted on the Web site immediately after the conference call.

FirstMerit Corporation is a diversified financial services company headquartered in Akron, Ohio, with assets of $10.4 billion as of June 30, 2004, and 161 banking offices in 24 Ohio and Western Pennsylvania counties. FirstMerit provides a complete range of banking and other financial services to consumers and businesses through its core operations. Principal wholly-owned subsidiaries include: FirstMerit Bank, N.A., FirstMerit Mortgage Corporation, FirstMerit Title Agency, Ltd., FirstMerit Credit Life Insurance Company, and FirstMerit Community Development Corporation.

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News Release FirstMerit Corporation
www.firstmerit.com

Forward-Looking Statement
This release contains forward-looking statements relating to present or future trends or factors affecting the banking industry, and specifically the financial condition and results of operations, including without limitation, statements relating to the earnings outlook of the Company, as well as its operations, markets and products. Actual results could differ materially from those indicated. Among the important factors that could cause results to differ materially are interest rate changes, continued softening in the economy, which could materially impact credit quality trends and the ability to generate loans, changes in the mix of the Company’s business, competitive pressures, changes in accounting, tax or regulatory practices or requirements and those risk factors detailed in the Company’s periodic reports and registration statements filed with the Securities and Exchange Commission. The Company undertakes no obligation to release revisions to these forward- looking statements or reflect events or circumstances after the date of this release.

-END-

FIRSTMERIT CORPORATION AND SUBSIDIARIES
Consolidated Financial Highlights
(Dollars in thousands)
(Unaudited)	Quarters
	2004			2004			2003			2003			2003
EARNINGS	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr
Net interest income FTE (a)	$	87,782			89,691			95,118			99,022			99,691
Provision for loan losses		14,154			40,984			32,733			22,540			23,442
Other income		46,969			45,867			46,752			57,661			53,881
Other expenses		79,482			77,051			101,167			76,196			75,714
FTE adjustment (a)		675			689			619			592			709
After-tax income before cumulative effect of change in accounting principle		31,028			12,706			7,170			39,278			36,927
Cumulative effect of change in accounting principle, net of tax		0			0			(688	)		0			0
Net income		31,028			12,706			6,482			39,278			36,927
Income per diluted share before cumulative effect of change in accounting principle		0.36			0.15			0.08			0.46			0.44
Per share effect of cumulative effect of change in accounting principle		0.00			0.00			(0.01	)		0.00			0.00
Diluted EPS	$	0.36			0.15			0.07			0.46			0.44
PERFORMANCE RATIOS
Return on average assets (ROA)		1.19	%		0.49	%		0.24	%		1.46	%		1.40	%
Return on average common equity (ROE)		12.71	%		5.10	%		2.63	%		15.99	%		15.09	%
Net interest margin FTE (a)		3.66	%		3.74	%		3.86	%		3.97	%		4.06	%
Efficiency ratio		59.44	%		56.70	%		70.46	%		48.80	%		50.17	%
Number of full-time equivalent employees		3,336			3,235			3,021			3,187			3,209
MARKET DATA
Book value/common share	$	11.28			11.82			11.65			11.64			11.71
Period-end common share mkt value		26.37			26.05			27.11			24.74			22.80
Market as a % of book		234	%		220	%		233	%		213	%		195	%
Cash dividends/common share	$	0.26			0.26			0.26			0.26			0.25
Common stock dividend payout ratio		72.22	%		173.33	%		371.43	%		56.52	%		56.82	%
Average basic common shares		84,809			84,771			84,642			84,505			84,470
Average diluted common shares		85,149			85,186			85,086			84,982			84,880
Period end common shares		84,829			84,802			84,724			84,565			84,489
Common shares repurchased		—			—			—			—			29
Common stock market capitalization	$	2,236,941			2,209,092			2,296,868			2,092,138			1,926,349
ASSET QUALITY
Gross charge-offs	$	21,341			23,666			31,896			26,870			28,979
Net charge-offs		14,183			18,276			26,225			21,260			23,251
Allowance for loan losses		107,561			120,261			97,553			120,472			119,192
Nonperforming assets (NPAs)		48,819			88,472			81,166			95,602			88,349
Net charge-off/average loans ratio		0.87	%		1.13	%		1.48	%		1.17	%		1.30	%
Allowance for loan losses/period-end loans		1.65	%		1.85	%		1.49	%		1.66	%		1.66	%
NPAs/loans and other real estate		0.75	%		1.36	%		1.24	%		1.32	%		1.23	%
Allowance for loan losses/nonperforming loans		261.67	%		148.09	%		132.47	%		134.34	%		144.38	%
CAPITAL & LIQUIDITY
Period-end tangible equity to assets		7.94	%		8.32	%		8.16	%		8.01	%		8.03	%
Average equity to assets		9.39	%		9.58	%		9.28	%		9.15	%		9.29	%
Average equity to loans		15.02	%		15.34	%		13.91	%		13.53	%		13.73	%
Average loans to deposits		87.95	%		87.68	%		92.55	%		93.75	%		92.83	%
AVERAGE BALANCES
Assets	$	10,465,272			10,456,439			10,531,679			10,646,746			10,577,897
Deposits		7,437,054			7,442,121			7,594,040			7,680,840			7,710,474
Loans		6,540,974			6,525,147			7,027,978			7,200,899			7,157,408
Earning assets		9,658,873			9,651,878			9,771,796			9,903,130			9,837,768
Shareholders’ equity		982,195			1,001,257			977,429			974,342			982,850
ENDING BALANCES
Assets	$	10,378,155			10,450,306			10,473,635			10,648,301			10,665,444
Deposits		7,402,800			7,381,722			7,502,784			7,578,506			7,791,637
Loans		6,520,001			6,507,836			6,551,599			7,241,540			7,182,214
Goodwill		139,245			139,245			139,245			139,245			139,245
Intangible assets		5,091			5,314			5,536			5,759			5,980
Earning assets		9,552,721			9,693,976			9,676,415			9,869,693			9,816,593
Total shareholders’ equity		957,095			1,002,272			987,175			986,163			990,050

NOTES:

(a) — Net interest income on a fully-tax equivalent (“FTE”) basis restates interest on tax-exempt securities and loans as if such interest were subject to federal income tax at the statutory rate. Net interest income on an FTE basis is not an accounting principle generally accepted in the United States of America.

CONSOLIDATED BALANCE SHEETS
FIRSTMERIT CORPORATION AND SUBSIDIARIES

(in thousands)
(Unaudited, except December 31, 2003, which is derived from the	June 30			December 31			June 30
audited financial statements)	2004			2003			2003
ASSETS
Cash and due from banks	$	216,258			199,049			308,697
Investment securities (at fair value) and federal funds sold		2,973,858			3,061,497			2,602,836
Loans held for sale		58,862			63,319			31,543
Commercial loans		3,324,335			3,352,014			3,437,977
Mortgage loans		627,633			614,073			553,329
Installment loans		1,668,679			1,668,421			1,596,973
Home equity loans		646,197			637,749			627,379
Credit card loans		140,110			144,514			136,973
Manufactured housing loans		—			—			661,909
Leases		113,047			134,828			167,674
Total loans		6,520,001			6,551,599			7,182,214
Less allowance for loan losses		(107,561	)		(97,553	)		(119,192	)
Net loans		6,412,440			6,454,046			7,063,022
Premises and equipment, net		121,373			119,079			113,701
Goodwill		139,245			139,245			139,245
Intangible assets		5,091			5,536			5,980
Accrued interest receivable and other assets		451,028			431,864			400,420
Total assets	$	10,378,155			10,473,635			10,665,444
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Demand-non-interest bearing	$	1,400,715			1,346,574			1,428,645
Demand-interest bearing		804,355			773,514			766,463
Savings and money market accounts		2,498,152			2,461,265			2,428,042
Certificates and other time deposits		2,699,578			2,921,431			3,168,487
Total deposits		7,402,800			7,502,784			7,791,637
Securities sold under agreements to repurchase		1,573,492			1,525,804			1,162,589
Wholesale borrowings		320,367			311,038			555,840
Accrued taxes, expenses, and other liabilities		124,401			146,834			165,328
Total liabilities		9,421,060			9,486,460			9,675,394
Commitments and contingencies
Shareholders’ equity:
Preferred stock, without par value:
authorized and unissued 7,000,000 shares		—			—			—
Preferred stock, Series A, without par value:
designated 800,000 shares; none outstanding		—			—			—
Convertible preferred stock, Series B, without par value:
designated 220,000 shares; 0, 0 and 42,036 shares outstanding at June 30, 2004, December 31, 2003 and June 30, 2003, respectively		—			—			1,011
Common stock, without par value:
authorized 300,000,000 shares; issued 92,026,350 at June 30, 2004, December 31, 2003 and June 30, 2003		127,937			127,937			127,937
Capital surplus		110,415			110,473			111,791
Accumulated other comprehensive loss		(41,601	)		(9,475	)		(2,625	)
Retained earnings		943,021			943,492			941,974
Treasury stock, at cost, 7,197,488, 7,302,057 and 7,537,719 shares at June 30, 2004, December 31, 2003 and June 30, 2003, respectively		(182,677	)		(185,252	)		(190,038	)
Total shareholders’ equity		957,095			987,175			990,050
Total liabilities and shareholders’ equity	$	10,378,155			10,473,635			10,665,444

The accompanying notes are an integral part of the consolidated financial statements.

FIRSTMERIT CORPORATION AND SUBSIDIARIES
Average Consolidated Balance Sheets
(Unaudited)	Quarterly Periods
(Dollars in thousands)	June 30,			March 31,			Dec 31,			Sept 30,			June 30,
	2004			2004			2003			2003			2003
ASSETS
Cash and due from banks	$	226,637			212,358			198,302			197,597			194,164
Investment securities/fed funds sold		3,054,655			3,072,724			2,687,500			2,633,880			2,616,682
Loans held for sale		63,244			54,007			56,318			68,351			63,678
Commercial loans		3,368,633			3,355,159			3,395,863			3,408,017			3,438,028
Mortgage loans		628,381			616,970			619,574			575,100			548,077
Installment loans		1,640,665			1,644,343			1,680,752			1,635,420			1,564,061
Home equity loans		642,369			638,549			632,369			629,465			617,815
Credit card loans		141,460			143,497			141,333			139,931			137,197
Manufactured housing loans		—			—			413,796			653,538			679,526
Leases		119,466			126,629			144,291			159,428			172,704
Total loans		6,540,974			6,525,147			7,027,978			7,200,899			7,157,408
Less allowance for loan losses		118,808			97,033			110,248			119,466			119,022
Net loans		6,422,166			6,428,114			6,917,730			7,081,433			7,038,386
Total earning assets		9,658,873			9,651,878			9,771,796			9,903,130			9,837,768
Premises and equipment, net		120,798			119,728			120,386			112,996			114,677
Accrued interest receivable and other assets		577,772			569,508			551,443			552,489			550,310
TOTAL ASSETS	$	10,465,272			10,456,439			10,531,679			10,646,746			10,577,897
LIABILITIES
Deposits:
Demand-non-interest bearing	$	1,402,273			1,330,056			1,348,374			1,340,484			1,296,372
Demand-interest bearing		814,718			767,287			755,093			748,646			753,386
Savings and money market accounts		2,492,318			2,483,451			2,508,706			2,466,018			2,367,223
Certificates and other time deposits		2,727,745			2,861,327			2,981,867			3,125,692			3,293,493
Total deposits		7,437,054			7,442,121			7,594,040			7,680,840			7,710,474
Securities sold under agreements to repurchase		1,589,014			1,547,575			1,340,204			1,289,908			1,136,425
Wholesale borrowings		320,222			310,767			462,998			542,171			566,831
Total funds		9,346,290			9,300,463			9,397,242			9,512,919			9,413,730
Accrued taxes, expenses and other liabilities		136,787			154,719			157,008			159,485			181,317
Total liabilities		9,483,077			9,455,182			9,554,250			9,672,404			9,595,047
SHAREHOLDERS’ EQUITY
Preferred stock		—			—			500			1,006			1,062
Common stock		127,937			127,937			127,937			127,937			127,937
Capital surplus		110,902			110,672			111,219			111,854			111,774
Accumulated other comprehensive income		(13,730	)		(1,457	)		(32,027	)		(27,000	)		1,246
Retained earnings		940,726			948,521			956,770			950,316			931,136
Treasury stock		(183,640	)		(184,416	)		(186,970	)		(189,771	)		(190,305	)
Total shareholders’ equity		982,195			1,001,257			977,429			974,342			982,850
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	10,465,272			10,456,439			10,531,679			10,646,746			10,577,897

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FIRSTMERIT CORPORATION AND SUBSIDIARIES

	Three months ended						Six months ended
(Unaudited)	June 30,						June 30,
(In thousands except per share data)	2004			2003			2004			2003
Interest income:
Interest and fees on loans, including held for sale	$	94,126			118,721			190,753			240,872
Interest and dividends on investment securities and federal funds sold		28,221			25,214			57,432			52,606
Total interest income		122,347			143,935			248,185			293,478
Interest expense:
Interest on deposits:
Demand-interest bearing		503			269			869			566
Savings and money market accounts		4,512			5,529			8,826			10,157
Certificates and other time deposits		19,598			26,083			41,229			55,972
Interest on securities sold under agreements to repurchase		6,271			4,742			12,409			9,271
Interest on wholesale borrowings		4,356			8,330			8,743			16,828
Total interest expense		35,240			44,953			72,076			92,794
Net interest income		87,107			98,982			176,109			200,684
Provision for loan losses		14,154			23,442			55,138			46,938
Net interest income after provision for loan losses		72,953			75,540			120,971			153,746
Other income:
Trust department income		5,696			5,442			11,052			10,328
Service charges on deposits		15,705			15,292			31,124			30,180
Credit card fees		9,546			10,989			18,210			20,715
ATM and other service fees		3,071			3,201			5,819			6,091
Bank owned life insurance income		3,083			3,159			6,209			6,388
Investment services and insurance		3,527			2,801			7,359			6,434
Manufactured housing income		5			506			150			1,059
Investment securities gains, net		1,412			3,106			1,482			5,972
Loan sales and servicing income		1,584			5,701			4,443			10,611
Other operating income		3,340			3,684			6,988			7,955
Total other income		46,969			53,881			92,836			105,733
Other expenses:
Salaries, wages, pension and employee benefits		40,389			36,488			80,231			73,627
Net occupancy expense		5,526			5,559			11,543			11,543
Equipment expense		3,323			3,663			6,858			7,570
Stationery, supplies and postage		2,577			2,735			5,289			5,765
Bankcard, loan processing and other costs		5,988			7,324			11,691			13,801
Professional services		3,977			2,739			7,123			5,361
Amortization of intangibles		222			223			445			445
Other operating expense		17,480			16,983			33,353			31,477
Total other expenses		79,482			75,714			156,533			149,589
Income before income tax expense		40,440			53,707			57,274			109,890
Federal income taxes		9,412			16,780			13,540			34,681
Net income	$	31,028			36,927			43,734			75,209
Other comprehensive income (loss), net of tax expense (benefit):
Unrealized securities’ holding gains (losses), net of tax expense (benefit), arising during period		(54,037	)		798			(31,163	)		(2,667	)
Less: reclassification adjustment for securities’ gains (losses) realized in net income, net of tax expense (benefit)		(917	)		(2,019	)		(963	)		(3,882	)
Net unrealized losses, net of tax expense (benefit)		(54,954	)		(1,221	)		(32,126	)		(6,549	)
Comprehensive income	$	(23,926	)		35,706			11,608			68,660
Net income applicable to common shares	$	31,028			36,909			43,734			75,173
Net income used in diluted EPS calculation		31,035			36,936			43,748			75,226
Weighted average number of common shares outstanding — basic		84,809			84,470			84,789			84,491
Weighted average number of common shares outstanding — diluted		85,149			84,880			85,161			84,881
Basic Earnings per Share	$	0.37			0.44			0.52			0.89
Diluted Earnings per Share	$	0.36			0.44			0.51			0.89
Dividend per Share	$	0.26			0.25			0.52			0.50

The accompanying notes are an integral part of the consolidated financial statements.

FIRSTMERIT CORPORATION AND SUBSIDIARIES
Consolidated Statements of Earnings and Comprehensive Income
(Dollars in thousands, except share data)
(Unaudited)	Quarterly Results
	2004			2004		2003			2003			2003
	2nd Q			1st Q		4th Q			3rd Q			2nd Q
Interest and fees on loans, including held for sale	$	94,126			96,627		109,118			115,841			118,721
Interest and dividends — securities and federal funds sold		28,221			29,211		24,896			23,936			25,214
Total interest income		122,347			125,838		134,014			139,777			143,935
Interest on deposits:
Demand-interest bearing		503			366		313			272			269
Savings and money market accounts		4,512			4,314		4,473			4,351			5,529
Certificates and other time deposits		19,598			21,631		23,033			23,950			26,083
Securities sold under agreements to repurchase		6,271			6,138		4,928			4,776			4,742
Wholesale borrowings		4,356			4,387		6,768			7,998			8,330
Total interest expense		35,240			36,836		39,515			41,347			44,953
Net interest income		87,107			89,002		94,499			98,430			98,982
Provision for loan losses		14,154			40,984		32,733			22,540			23,442
Net interest income after provision for loan losses		72,953			48,018		61,766			75,890			75,540
Other income:
Trust department income		5,696			5,356		5,484			5,153			5,442
Service charges on deposits		15,705			15,419		16,256			16,823			15,292
Credit card fees		9,546			8,664		9,615			10,322			10,989
ATM and other service fees		3,071			2,748		2,905			3,124			3,201
Bank owned life insurance income		3,083			3,126		3,245			3,238			3,159
Investment services and insurance		3,527			3,832		2,930			2,825			2,801
Manufactured housing income		5			145		346			387			506
Investment securities gains (losses), net		1,412			70		(1,390	)		992			3,106
Loan sales and servicing income		1,584			2,859		2,625			10,657			5,701
Other operating income		3,340			3,648		4,736			4,140			3,684
Total other income		46,969			45,867		46,752			57,661			53,881
Other expenses:
Salaries, wages, pension and employee benefits		40,389			39,842		38,682			38,860			36,488
Net occupancy expense		5,526			6,017		5,301			5,274			5,559
Equipment expense		3,323			3,535		3,377			3,535			4,363
Stationery, supplies and postage		2,577			2,712		2,976			2,801			2,735
Bankcard, loan processing and other costs		5,988			5,703		6,706			7,533			7,324
Professional services		3,977			3,146		3,279			2,812			2,739
Amortization of intangibles		222			223		222			222			223
Other operating expenses		17,480			15,873		40,624			15,159			16,283
Total other expenses		79,482			77,051		101,167			76,196			75,714
Income before federal income taxes		40,440			16,834		7,351			57,355			53,707
Federal income taxes		9,412			4,128		181			18,077			16,780
Income after taxes but before cumulative effect of change in accounting principle		31,028			12,706		7,170			39,278			36,927
Cumulative effect of change in accounting principle net of tax		0			0		(688	)		0			0
Net income	$	31,028			12,706		6,482			39,278			36,927
Other comprehensive income (loss), net of tax expense (benefit)		(54,954	)		22,828		15,927			(22,777	)		(1,221	)
Comprehensive income (loss)	$	(23,926	)		35,534		22,409			16,501			35,706
Net income applicable to common shares		31,028			12,706		6,465			37,789			36,909
Adjusted net income used in diluted EPS calculation		31,035			12,713		6,489			37,813			36,936
Weighted-average common shares — basic		84,809			84,771		84,642			84,505			84,470
Weighted-average common shares — diluted		85,149			85,186		85,086			84,982			84,880
Basic net income per share	$	0.37			0.15		0.07			0.46			0.44
Diluted net income per share	$	0.36			0.15		0.07			0.46			0.44

FIRSTMERIT CORPORATION AND SUBSIDIARIES
Asset Quality Information

(Dollars in thousands, except ratios)
(Unaudited, except December 31,2003 annual period which
is derived from the audited financial statements)	Quarterly Periods															Annual Period
	June 30			Mar 31			Dec 31			Sep 30			June 30			Dec 31,
Allowance for Loan Losses	2004			2004			2003			2003			2003			2003
Balance at beginning of period	$	120,261			97,553			120,472			119,192			119,001			122,790
Allowance related to loans sold		(12,671	)		—			(29,427	)		—			—			(29,427	)
Provision for loan losses		14,154			40,984			32,733			22,540			23,442			102,211
Charge-offs		21,341			23,666			31,896			26,870			28,979			119,877
Recoveries		7,158			5,390			5,671			5,610			5,728			21,856
Net charge-offs		14,183			18,276			26,225			21,260			23,251			98,021
Balance at end of period	$	107,561			120,261			97,553			120,472			119,192			97,553
Ratios
Provision for loan losses as a % of average loans		0.87	%		2.53	%		1.85	%		1.24	%		1.31	%		1.43	%
Net charge-offs as a % of average loans		0.87	%		1.13	%		1.48	%		1.17	%		1.30	%		1.37	%
Allowance as a % of period-end loans		1.65	%		1.85	%		1.49	%		1.66	%		1.66	%		1.49	%
Allowance as a % of nonperforming loans		261.67	%		148.09	%		132.47	%		134.34	%		144.38	%		132.47	%
Asset Quality
Impaired loans:
Nonaccrual	$	33,080			71,596			63,388			77,381			71,081			63,388
Restructured		—			—			35			40			46			35
Total impaired loans		33,080			71,596			63,423			77,421			71,127			63,423
Other nonperforming loans:
Nonaccrual		8,025			9,611			10,216			12,253			11,425			10,216
Restructured		—			—			—			—			—			—
Total other nonperforming loans		8,025			9,611			10,216			12,253			11,425			10,216
Total nonperforming loans		41,105			81,207			73,639			89,674			82,552			73,639
Other real estate (“ORE”)		7,714			7,265			7,527			5,928			5,797			7,527
Total nonperforming assets (“NPAs”)	$	48,819			88,472			81,166			95,602			88,349			81,166
NPAs as % of period-end loans + ORE		0.75	%		1.36	%		1.24	%		1.32	%		1.23	%		1.24	%
Past due 90 days or more & accruing interest	$	18,387			20,995			27,515			32,439			28,603			27,515

FIRSTMERIT CORPORATION AND SUBSIDIARIES

(Dollars in thousands)
(Unaudited)
QUARTERLY OTHER INCOME DETAIL	2004		2004		2003			2003		2003
	2nd Qtr		1st Qtr		4th Qtr			3rd Qtr		2nd Qtr
Trust department income	$	5,696		5,356		5,484			5,153		5,442
Service charges on deposits		15,705		15,419		16,256			16,823		15,292
Credit card fees		9,546		8,664		9,615			10,322		10,989
ATM and other service fees		3,071		2,748		2,905			3,124		3,201
Bank owned life insurance income		3,083		3,126		3,245			3,238		3,159
Investment services and insurance		3,527		3,832		2,930			2,825		2,801
Manufactured housing income		5		145		346			387		506
Investment securities gains (losses), net		1,412		70		(1,390	)		992		3,106
Loan sales and servicing income		1,584		2,859		2,625			10,657		5,701
Other operating income		3,340		3,648		4,736			4,140		3,684
Total Other Income	$	46,969		45,867		46,752			57,661		53,881
QUARTERLY OTHER EXPENSE DETAIL	2004		2004		2003			2003		2003
	2nd Qtr		1st Qtr		4th Qtr			3rd Qtr		2nd Qtr
Salaries, wages, pension and employee benefits	$	40,389		39,842		38,682			38,860		36,488
Net occupancy expense		5,526		6,017		5,301			5,274		5,559
Equipment expense		3,323		3,535		3,377			3,535		4,363
Taxes, other than federal income taxes		1,406		1,448		621			1,613		1,552
Stationery, supplies and postage		2,577		2,712		2,976			2,801		2,735
Bankcard, loan processing and other costs		5,988		5,703		6,706			7,533		7,324
Advertising		1,554		586		1,276			518		886
Professional services		3,977		3,146		3,279			2,812		2,739
Telephone		1,221		1,147		1,068			1,001		1,129
Amortization of intangibles		222		223		222			222		223
Other operating expense		13,299		12,692		37,659			12,027		12,716
Total Other Expenses	$	79,482		77,051		101,167			76,196		75,714

FIRSTMERIT CORPORATION AND SUBSIDIARIES
Allowance for Loan Losses — Net Charge-off Detail
(Dollars in thousands)
(Unaudited)

	Quarters ended						Six months ended
	June 30,						June 30,
	2004			2003			2004			2003
Allowance for loan losses — beginning of period	$	120,261			119,001			97,553			122,790
Loans charged off:
Commercial		9,112			7,057			17,962			17,341
Mortgage		188			194			292			297
Installment		8,135			9,807			18,222			20,641
Home equity		542			872			1,327			1,675
Credit cards		2,941			3,116			5,696			6,292
Manufactured housing		27			5,588			313			11,419
Leases		396			2,345			1,195			3,446
Total		21,341			28,979			45,007			61,111
Recoveries:
Commercial		2,466			773			3,364			1,282
Mortgage		7			2			32			4
Installment		3,194			3,010			6,041			5,983
Home equity		306			266			681			494
Credit cards		791			510			1,474			937
Manufactured housing		255			949			677			1,543
Leases		139			218			279			332
Total		7,158			5,728			12,548			10,575
Net charge-offs		14,183			23,251			32,459			50,536
Allowance related to loans sold		(12,671	)		—			(12,671	)		—
Provision for loan losses		14,154			23,442			55,138			46,938
Allowance for loan losses — end of period	$	107,561			119,192			107,561			119,192
Average loans outstanding	$	6,540,974			7,157,408			6,533,061			7,163,311
Ratio to average loans:
(Annualized) net charge-offs		0.87	%		1.30	%		1.00	%		1.42	%
Provision for loan losses		0.87	%		1.33	%		1.70	%		1.32	%
Loans outstanding — period-end	$	6,520,001			7,182,214			6,520,001			7,182,214
Allowance for loan losses:
As a percent of period-end loans outstanding		1.65	%		1.66	%		1.65	%		1.66	%
As a multiple of (annualized) net charge-offs		1.89			1.28			1.65			1.17

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EX-99.1

EX-99.1 News Release