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WASHINGTON, D.C. 20549

FORM 10-K

	[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003

FIRSTMERIT CORPORATION

(Exact name of registrant as specified in its charter)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

COMMON STOCK, NO PAR VALUE

     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 the filing requirements for at least the past 90 days. Yes [X] No [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes [X] No [ ]

     State the aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter: $1,926,340,787.

     Indicate the number of shares outstanding of registrant’s common stock as of February 2, 2004: 84,756,755 shares of common stock, without par value.

DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the Proxy Statement of FirstMerit Corporation, dated March 3, 2004, are incorporated by reference in Part III.

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PART I

Overview

      Registrant, FirstMerit Corporation (“FirstMerit” or the “Corporation”), is a $10.5 billion bank holding company organized in 1981 under the laws of the State of Ohio and registered under the Bank Holding Company Act of 1956, as amended (the “BHCA”). FirstMerit’s principal business consists of owning and supervising its affiliates. Although FirstMerit directs the overall policies of its affiliates, including lending practices and financial resources, most day-to-day affairs are managed by their respective officers. The principal executive offices of FirstMerit are located at III Cascade Plaza, Akron, Ohio 44308, and its telephone number is (330) 996-6300.

      At December 31, 2003, FirstMerit Bank, N.A., one of the Corporation’s principal subsidiaries operated a network of 158 full service banking offices and 172 automated teller machines. Its offices span a total of 24 counties in Ohio, including Ashland, Ashtabula, Crawford, Cuyahoga, Delaware, Erie, Franklin, Geauga, Holmes, Huron, Knox, Lake, Lorain, Lucas, Madison, Medina, Portage, Richland, Sandusky, Seneca, Stark, Summit, Wayne and Wood Counties, and Lawrence County in Pennsylvania. In its principal market in Northeastern Ohio, FirstMerit serves over 500,000 households and businesses in the 16th largest consolidated metropolitan statistical area in the country (which combines the primary metropolitan statistical areas for Cleveland, Lorain/ Elyria and Akron, Ohio).

Subsidiaries and Operations

      Through its affiliates, FirstMerit operates primarily as a regional banking organization, providing a wide range of banking, fiduciary, financial, insurance and investment services to corporate, institutional and individual customers throughout northeastern and central Ohio, and western Pennsylvania. FirstMerit’s banking subsidiary is FirstMerit Bank.

      FirstMerit Bank engages in commercial and consumer banking in its respective geographic markets. Commercial and consumer banking generally consists of the acceptance of a variety of demand, savings and time deposits and the granting of commercial and consumer loans for the financing of both real and personal property. As part of its community banking philosophy, FirstMerit Bank has divided its markets into six geographic regions designated as follows: Akron, Cleveland, Elyria, Central Ohio, Mid-West Ohio and Toledo. This strategy allows FirstMerit Bank to deliver a broad line of financial products and services with a community orientation and a high level of personal service. FirstMerit therefore can offer a wide range of specialized services tailored to specific markets in addition to the full range of customary banking products and services. These services include personal and corporate trust services, personal financial services, cash management services and international banking services.

      Other services provided by FirstMerit Bank or its affiliates include automated banking programs, credit and debit cards, rental of safe deposit boxes, letters of credit, leasing, securities brokerage and life insurance products. FirstMerit Bank also operates a trust department, which offers estate and trust services. The majority of its customers is comprised of consumers and small and medium size businesses. FirstMerit Bank is not engaged in lending outside the continental United States and is not dependent upon any one significant customer or specific industry.

      FirstMerit’s non-banking direct and indirect subsidiaries provide insurance sales services, credit life, credit accident and health insurance, securities brokerage services, equipment lease financing and other financial services.

      FirstMerit’s principal direct operating subsidiaries other than FirstMerit Bank include FirstMerit Credit Life Insurance Company and FirstMerit Community Development Corporation. FirstMerit Credit Life Insurance Company was formed in 1985 to underwrite credit life and credit accident and health insurance in connection with the extension of credit to its customers. FirstMerit Community Development Corporation was organized in 1994 to further FirstMerit’s efforts in identifying the credit needs of its lending communities and meeting the

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      FirstMerit Bank is the parent corporation of 16 wholly-owned subsidiaries. In 1995, FirstMerit Mortgage Corporation (“FirstMerit Mortgage”), which is located in Canton, Ohio, was organized and capitalized. FirstMerit Mortgage originates residential mortgage loans and provides mortgage loan servicing for itself and FirstMerit Bank. In 1993, FirstMerit Leasing Company (“FirstMerit Leasing”) and FirstMerit Securities, Inc. (“FirstMerit Securities”) were organized. FirstMerit Leasing provides equipment lease financing and related services, while FirstMerit Securities offers securities brokerage services to customers of FirstMerit Bank and other FirstMerit subsidiaries.

      FirstMerit Bank is the parent corporation of Mobile Consultants, Inc. (“MCI”), a broker and servicer of manufactured housing finance contracts. MCI was acquired in connection with FirstMerit’s acquisition of Signal Corp in 1999. FirstMerit Bank announced in 2001 that it had ceased making new manufactured housing loan originations through MCI, and in 2003, FirstMerit Bank sold its remaining portfolio of manufactured housing loans to Vanderbilt Mortgage and Finance, Inc.

      FirstMerit Bank is also the parent corporation of Abell & Associates, Inc. and FirstMerit Insurance Agency, Inc. Abell & Associates, a life insurance and financial consulting firm acquired in May 1997, assists in the design and funding of estate plans, corporate succession plans and executive compensation plans. FirstMerit Insurance Agency became a subsidiary of FirstMerit Bank when FirstMerit acquired Great Northern Financial Corporation. FirstMerit Insurance Agency’s license to sell life insurance products and annuities was activated in 1997.

      Although FirstMerit is a corporate entity legally separate and distinct from its affiliates, bank holding companies such as FirstMerit, which are subject to the BHCA, are expected to act as a source of financial strength for their subsidiary banks. The principal source of FirstMerit’s income is dividends from its subsidiaries. There are certain regulatory restrictions on the extent to which financial institution subsidiaries can pay dividends or otherwise supply funds to FirstMerit.

Recent Transactions

      FirstMerit engages in discussions concerning possible acquisitions of other financial institutions and financial services companies on a regular basis. FirstMerit also periodically acquires branches and deposits in its principal markets. FirstMerit’s strategy for growth includes strengthening market share in its existing markets, expanding into complementary markets and broadening its product offerings.

      FirstMerit believes strategic acquisitions have strengthened and will continue to further strengthen its competitive position in the northeastern and central Ohio and western Pennsylvania markets and have broadened the financial services it can offer to its customers. FirstMerit believes it has significant experience in integrating acquired businesses and continues to explore acquisition opportunities that would meet its objectives.

Competition

      The financial services industry is highly competitive. FirstMerit and its subsidiaries compete with other local, regional and national providers of financial services such as other bank holding companies, commercial banks, savings associations, credit unions, consumer and commercial finance companies, equipment leasing companies, brokerage institutions, money market funds and insurance companies. Primary financial institution competitors include National City Bank, KeyBank, Bank One, U.S. Bancorp and Fifth Third Bank.

      Under the Gramm-Leach-Bliley Act, effective March 11, 2000 (“GLBA”), securities firms and insurance companies that elect to become financial holding companies may acquire banks and other financial institutions. The GLBA continues to change the competitive environment in which FirstMerit and its subsidiaries conduct business. The financial services industry is also likely to become more competitive as further technological advances enable more companies to provide financial services. These technological advances may diminish the importance of depository institutions and other financial intermediaries in the transfer of funds between parties.

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PROMPT FILINGS

      This Form 10-K has been posted on the Company’s website, www.firstmerit.com, on the date of filing with the Securities and Exchange Commission (“SEC”), and the Company intends to post all future filings of Form 10-K, 10-Q and 8-K on its website on the date of filing with the SEC in accordance with the prompt notice requirements of the SEC.

REGULATION AND SUPERVISION

Introduction

      FirstMerit, its banking subsidiary and many of its nonbanking subsidiaries are subject to extensive regulation by federal and state agencies. The regulation of bank holding companies and their subsidiaries is intended primarily for the protection of depositors, federal deposit insurance funds and the banking system as a whole and not for the protection of security holders. This regulatory environment, among other things, may restrict FirstMerit’s ability to diversify into certain areas of financial services, acquire depository institutions in certain markets and pay dividends on its capital stock. It also may require FirstMerit to provide financial support to its banking subsidiary, maintain capital balances in excess of those desired by management and pay higher deposit insurance premiums as a result of the deterioration in the financial condition of depository institutions in general.

Regulatory Agencies

      Bank Holding Company. FirstMerit, as a bank holding company, is subject to regulation under the BHCA and to inspection, examination and supervision by the Board of Governors of the Federal Reserve System (“Federal Reserve Board”) under the BHCA.

      Subsidiary Bank. FirstMerit’s national banking subsidiary, FirstMerit Bank, is subject to regulation and examination primarily by the Office of the Comptroller of the Currency (“OCC”) and secondarily by the Federal Deposit Insurance Corporation (“FDIC”).

      Nonbank Subsidiaries. Many of FirstMerit’s nonbank subsidiaries also are subject to regulation by the Federal Reserve Board and other applicable federal and state agencies. FirstMerit’s brokerage subsidiary is regulated by the Securities and Exchange Commission, the National Association of Securities Dealers, Inc. and state securities regulators. FirstMerit’s insurance subsidiaries are subject to regulation by applicable state insurance regulatory agencies. Other nonbank subsidiaries of FirstMerit are subject to the laws and regulations of both the federal government and the various states in which they conduct business.

      Securities and Exchange Commission and Nasdaq. FirstMerit is also under the jurisdiction of the SEC and certain state securities commissions for matters relating to the offering and sale of its securities. FirstMerit is subject to the disclosure and regulatory requirements of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, as administered by the SEC. FirstMerit is listed on The Nasdaq Stock Market under the trading symbol “FMER,” and is subject to the rules of Nasdaq.

Bank Holding Company Activities

      The BHCA requires prior approval by the Federal Reserve Board for a bank holding company to acquire more than a 5% interest in any bank. Factors taken into consideration in making such a determination include the effect of the acquisition on competition, the public benefits expected to be received from the acquisition, the projected capital ratios and levels on a post-acquisition basis, and the acquiring institution’s record of addressing the credit needs of the communities it serves.

      The BHCA, under the Riegle-Neal Interstate Banking and Branching Act (“Riegle-Neal Act”), also governs interstate banking. The BHCA allows interstate bank acquisitions and interstate branching by acquisition and mergers in those states that had not opted out of such transactions January 1, 1997.

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      The BHCA restricts the nonbanking activities of FirstMerit to those determined by the Federal Reserve Board to be financial in nature, or incidental or complementary to such financial activity, without regard to territorial restrictions. Transactions among FirstMerit’s banking subsidiary and its affiliates are also subject to certain limitations and restrictions of the Federal Reserve Board.

      The Sarbanes-Oxley Act of 2002, which was enacted on July 30, 2002 (“Sarbanes-Oxley”), effected broad reforms to areas of corporate governance and financial reporting for public companies under the jurisdiction of the SEC. Additional corporate governance and financial reporting reforms have since been implemented by Nasdaq. At the February, 2003 Board of Directors meeting of FirstMerit, a series of actions were adopted to enhance the Company’s corporate governance practices, including the adoption of a new Audit Committee Charter, a new Compensation Committee Charter, new Corporate Governance Guidelines, a new Corporate Governance and Nominating Committee and Charter, and a Code of Business Conduct and Ethics. These corporate policies were all provided to Company shareholders with their 2003 Proxy materials, and are available, along with other information on the Company’s corporate practices, on the FirstMerit website at www.firstmerit.com.

      The adoption of the GLBA in 1999 also represented a significant change in the financial services industry. The GLBA repealed many of the provisions of the Glass-Steagall Act in order to permit commercial banks, among other things, to have affiliates that engage in securities brokerage activities and make merchant banking investments in accordance with certain restrictions. The GLBA authorizes bank holding companies that meet certain requirements to operate as a new type of financial holding company and offer a broader range of financial products and services than are generally permitted by banks themselves. FirstMerit has not elected to become a financial holding company under this new regulatory framework.

Dividends and Transactions with Affiliates

      FirstMerit is a legal entity separate and distinct from its subsidiary bank and other subsidiaries. FirstMerit’s principal source of funds to pay dividends on its common and preferred stock and service its debt is dividends from these subsidiaries. Various federal and state statutory provisions and regulations limit the amount of dividends that FirstMerit Bank may pay to FirstMerit without regulatory approval. The ability of FirstMerit Bank to pay dividends in the future is currently influenced, and could be further influenced, by bank regulatory policies and capital guidelines.

      Under current Federal Reserve Board policy, FirstMerit is expected to act as a source of financial and managerial strength to its subsidiary bank and, under appropriate circumstances, to commit resources to support such subsidiary bank. This support could be required at times when FirstMerit might not have the resources to provide it. In addition, the OCC may order the pro rata assessment of FirstMerit if the capital of its national bank subsidiary were to become impaired. If FirstMerit failed to pay the assessment timely, the OCC could order the sale of its stock in the national bank subsidiary to cover the deficiency.

      FirstMerit’s banking subsidiary is subject to restrictions under federal law that limit the transfer of funds or other items of value from this subsidiary to FirstMerit and its nonbanking subsidiaries, including affiliates, whether in the form of loans and other extensions of credit, investments and asset purchases, or as other transactions involving the transfer of value from a subsidiary to an affiliate or for the benefit of an affiliate. Moreover, loans and extensions of credit to affiliates generally are required to be secured in specified amounts. A bank’s transactions with its nonbank affiliates also are generally required to be on arm’s-length terms.

      Capital loans from FirstMerit to its subsidiary bank are subordinate in right of payment to deposits and certain other indebtedness of the subsidiary bank. In the event of FirstMerit’s bankruptcy, any commitment by FirstMerit to a federal bank regulatory agency to maintain the capital of a subsidiary bank will be assumed by the bankruptcy trustee and entitled to a priority of payment.

      The Federal Deposit Insurance Act (“FDI Act”) provides that, in the event of the “liquidation or other resolution” of an insured depository institution such as FirstMerit Bank, the insured and uninsured depositors, along with the FDIC, will have priority in payment ahead of unsecured, nondeposit creditors, including FirstMerit, with respect to any extensions of credit they have made to such insured depository institution.

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Capital Requirements

      General. FirstMerit is subject to risk-based capital requirements and guidelines imposed by the Federal Reserve Board. These are substantially similar to the capital requirements and guidelines imposed by the OCC and the FDIC on the depository institutions under their jurisdictions. For this purpose, a depository institution’s or holding company’s assets, and some of its specified off-balance sheet commitments and obligations, are assigned to various risk categories. A depository institution’s or holding company’s capital, in turn, is classified in one of three tiers, depending on type: core (“Tier 1”) capital, supplementary (“Tier 2”) capital, and market risk (“Tier 3”) capital. Tier 1 capital includes common equity, qualifying perpetual preferred equity, and minority interests in the equity accounts of consolidated subsidiaries less certain intangible assets (including goodwill) and certain other assets. Tier 2 capital includes qualifying hybrid capital instruments and mandatory convertible debt securities, perpetual preferred equity not meeting Tier 1 capital requirements, qualifying term subordinated debt, medium-term preferred equity, certain unrealized holding gains on certain equity securities, and the allowance for loan and lease losses. Tier 3 capital includes qualifying unsecured subordinated debt. Information concerning FirstMerit’s regulatory capital requirements is set forth in Note 23 to the consolidated financial statements, and in “Capital Resources” under Item 7.

      Federal Reserve Board, FDIC and OCC rules require FirstMerit to incorporate market and interest rate risk components into its risk-based capital standards. Under these market risk requirements, capital is allocated to support the amount of market risk related to a financial institution’s ongoing trading activities.

      The Federal Reserve Board may set capital requirements higher than the minimums described above for holding companies whose circumstances warrant it. For example, holding companies experiencing or anticipating significant growth may be expected to maintain capital positions substantially above the minimum supervisory levels without significant reliance on intangible assets. The Federal Reserve Board has also indicated that it will consider a “tangible Tier 1 capital leverage ratio” (deducting all intangibles) and other indications of capital strength in evaluating proposals for expansion or new activities.

      FirstMerit Bank is subject to similar risk-based and leverage capital requirements adopted by its applicable federal banking agency. FirstMerit’s management believes that FirstMerit Bank meets all capital requirements to which it is subject.

      Failure to meet capital requirements could subject a bank to a variety of enforcement remedies, including the termination of deposit insurance by the FDIC, and to restrictions on its business, which are described under the next paragraph.

      The Federal Deposit Insurance Corporation Improvement Act of 1991 (the “FDICIA”), among other things, identifies five capital categories for insured depository institutions: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. It requires U.S. federal bank regulatory agencies to implement systems for “prompt corrective action” for insured depository institutions that do not meet minimum capital requirements based on these categories. The FDICIA imposes progressively more restrictive constraints on operations, management and capital distributions, depending on the category in which an institution is classified.

      FirstMerit believes that its bank subsidiary was well capitalized at December 31, 2003, based on these prompt corrective action ratios and guidelines. A bank’s capital category is determined solely for the purpose of applying the OCC’s (or the FDIC’s) prompt corrective action regulations, and the capital category may not constitute an accurate representation of the bank’s overall financial condition or prospects for other purposes.

Deposit Insurance Assessments

      The FDIC insures the deposits of FirstMerit’s depository institution subsidiary through the Bank Insurance Fund (“BIF”), up to prescribed limits for each depositor. The amount of FDIC assessments paid by each BIF member institution is based on its relative risk of default as measured by regulatory capital ratios and other factors. Specifically, the assessment rate is based on the institution’s capitalization risk category and supervisory subgroup category. An institution’s capitalization risk category is based on the FDIC’s determination of whether the institution is well capitalized, adequately capitalized or less than adequately capitalized. An institution’s

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      The BIF assessment rate currently ranges from zero to 27 cents per $100 of domestic deposits (27 basis points). The FDIC may increase or decrease the assessment rate schedule on a semi-annual basis, based on its evaluation of an institution’s financial condition. An increase in the BIF assessment rate could have a material adverse effect on FirstMerit’s earnings, depending on the amount of the increase. The FDIC is also authorized to terminate a depository institution’s deposit insurance upon a finding by the FDIC that the institution’s financial condition is unsafe or unsound or that the institution has engaged in unsafe or unsound practices or has violated any applicable rule, regulation, order or condition enacted or imposed by the institution’s regulatory agency. The termination of deposit insurance for FirstMerit’s subsidiary depository institutions could have a material adverse effect on FirstMerit’s earnings.

      All FDIC-insured depository institutions must pay an annual assessment to provide funds for the payment of interest on bonds issued by the Financing Corporation, a federal corporation chartered under the authority of the Federal Housing Finance Board. The bonds, commonly referred to as FICO bonds, were issued to capitalize the Federal Savings and Loan Insurance Corporation. The FDIC established the FICO assessment rates effective for the fourth quarter of 2003 at approximately $.017 per $100 annually for BIF-assessable deposits. The FICO assessments are adjusted quarterly to reflect changes in the assessment bases of the FDIC’s insurance funds and do not vary depending on a depository institution’s capitalization or supervisory evaluations.

Fiscal And Monetary Policies

      FirstMerit’s business and earnings are affected significantly by the fiscal and monetary policies of the federal government and its agencies. FirstMerit is particularly affected by the policies of the Federal Reserve Board, which regulates the supply of money and credit in the United States. Among the instruments of monetary policy available to the Federal Reserve are (a) conducting open market operations in United States government securities, (b) changing the discount rates of borrowings of depository institutions, (c) imposing or changing reserve requirements against depository institutions’ deposits, and (d) imposing or changing reserve requirements against certain borrowing by banks and their affiliates. These methods are used in varying degrees and combinations to affect directly the availability of bank loans and deposits, as well as the interest rates charged on loans and paid on deposits. For that reason alone, the policies of the Federal Reserve Board have a material effect on the earnings of FirstMerit.

Privacy Provisions of Gramm-Leach-Bliley Act

      Under the GLB Act, federal banking regulators were required to adopt rules that will limit the ability of banks and other financial institutions to disclose non-public information about consumers to nonaffiliated third parties. These limitations require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to a nonaffiliated third party.

Future Legislation

      Various legislation affecting financial institutions and the financial industry is from time to time introduced in Congress. Such legislation may change banking statutes and the operating environment of FirstMerit and its subsidiaries in substantial and unpredictable ways, and could increase or decrease the cost of doing business, limit or expand permissible activities or affect the competitive balance among banks, savings associations, credit unions, and other financial institutions. FirstMerit cannot predict whether any of this potential legislation will be enacted, and if enacted, the effect that it, or any implementing regulations, would have on the financial condition or results of operations of FirstMerit or any of its subsidiaries.

Summary

      To the extent that the previous information describes statutory and regulatory provisions, it is qualified in its entirety by reference to the full text of those provisions. Also, such statutes, regulations and policies are continually under review by Congress and state legislatures and federal and state regulatory agencies and are

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ITEM 2. PROPERTIES

FirstMerit Corporation

      FirstMerit’s executive offices and certain holding company operational facilities, totaling approximately 101,096 square feet, are located in a seven-story office building at III Cascade in downtown Akron, Ohio. In early 2001, FirstMerit Bank sold its interest in the partnership which owned this building and entered into a five-year lease for the building with the new, third party owner. As part of the transaction, FirstMerit Bank was granted an option to acquire the building. The building is the subject of a ground lease with the City of Akron as the lessor of the land. During 2003, the Corporation consolidated the variable interest entity that holds the leasehold rights. Notes 1 and 8 to the consolidated financial statements more fully describe this accounting change.

      The facilities owned or leased by FirstMerit and its subsidiaries are considered by management to be adequate, and neither the location nor unexpired term of any lease is considered material to the business of FirstMerit.

FirstMerit Bank

      The principal executive offices of FirstMerit Bank are located in a 28-story office building at 106 South Main Street, Akron, Ohio, which is owned by FirstMerit Bank. FirstMerit Bank/ Akron is the principal tenant of the building, occupying approximately 157,944 square feet of the building, with the remaining portion leased to tenants unrelated to FirstMerit Bank. The properties occupied by 97 of FirstMerit Bank’s other branches are owned by FirstMerit Bank, while the properties occupied by its remaining 61 branches are leased with various expiration dates. There is no mortgage debt owing on any of the above property owned by FirstMerit Bank. FirstMerit Bank also owns automated teller machines, on-line teller terminals and other computers and related equipment for use in its business.

      FirstMerit Bank also owns 15.5 acres near downtown Akron, on which is located FirstMerit’s primary Operations Center. The Operations Center is occupied and operated by FirstMerit Services Division, an operating division of FirstMerit Bank. The Operations Center primarily provides computer and communications technology-based services to FirstMerit and the subsidiaries, and also markets its services to non-affiliated institutions. There is no mortgage debt owing on the Operations Center property. In connection with its Operations Center, the Services Division has a disaster recovery center at a remote site on leased property, and leases additional space for activities related to its operations.

      FirstMerit Mortgage Corporation operates out of 37,683 square feet of leased space in Canton Ohio. The Trust Department of FirstMerit Bank is located in Main Place, a four-story office building located in downtown Akron. This department occupies approximately 19,296 square feet of leased space in Main Place.

ITEM 3. LEGAL PROCEEDINGS

      In the normal course of business, FirstMerit is at all times subject to pending and threatened legal actions, some for which the relief or damages sought are substantial. After reviewing pending and threatened actions with counsel, management believes that the outcome of such actions will not have a material adverse effect on the results of operations or stockholders’ equity of FirstMerit. FirstMerit is not able to predict whether the outcome of such actions may or may not have a material adverse effect on results of operations in a particular future period as the time and amount of any resolution of such actions and its relationship to the future results of operations are not known.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      No matters were submitted to a vote of security holders in the fourth quarter of 2003.

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      The following persons were the executive officers of FirstMerit as of December 31, 2003. Unless otherwise stated, each listed position was held on January 1, 1999.

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PART II

      The outstanding shares of FirstMerit Common Stock are quoted on The Nasdaq Stock Market National Market System under the trading symbol FMER. The following table contains bid and cash dividend information for FirstMerit Common Stock for the two most recent fiscal years:

Stock Performance and Dividends⁽¹⁾

(1)	This table sets forth the high and low closing bid quotations and dividend rates for FirstMerit Corporation during the periods listed. These quotations are furnished by the National Quotations Bureau Incorporated and represent prices between dealers, do not include retail markup, markdowns, or commissions, and may not represent actual transaction prices.
(2)	Based upon number of shares outstanding at the end of each quarter.

      On February 2, 2004, there were approximately 9,179 shareholders of record of FirstMerit Common Stock.

      The information in Item 12 under the heading “Equity Compensation Plan Information” is incorporated herein by reference.

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FIRSTMERIT CORPORATION AND SUBSIDIARIES

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*	Fully tax-equivalent basis
(a)	Included in the 2003 results are the sale of the company’s $621 million portfolio of manufactured housing loans and prepayment of $221 million in Federal Home Loan Bank (“FHLB”) borrowings, as well as the sale of $22.6 million of commercial loans. As a result, after-tax earnings for the full year and fourth quarter 2003 were reduced by a total of $22.6 million, or $0.27 per share, which includes an after-tax charge of $18.4 million, or $0.22 per share, related to the sale of the manufactured housing portfolio and prepayment of FHLB borrowings, and a $4.2 million, or $0.05 per share, increase in the provision for loan losses related to the sale of commercial loans. Results for 2003 also include an accounting charge of $688,000 after-tax, or $0.01 per share, representing the cumulative effect of application of Financial Interpretation No. 46 (“FIN 46”), a new accounting interpretation that requires consolidation of the special purpose entity that holds FirstMerit’s headquarters building.

(b)

The 2001 net income, provision for loan losses, other income, other expenses, and profitability ratios shown include the effects of a one-time restructuring charge related to the exit of the manufactured housing finance business of $41.1 million, after taxes. The specific income statement classifications affected by the charge, as shown in the preceding table, were as follows: other income $2.6 million, other expenses $41.9 million, and the provision for loan losses $14.5 million. Net income for 2001 was also reduced by a cumulative effect of a change in accounting for securitized retained interest assets of $6.3 million, after taxes.

	The 1999 net income, provision for loan losses, and profitability ratios shown include (1) merger-related expenses associated with the Signal pooling-of-interests acquisition of $32.3 million after taxes, and (2) an extraordinary charge from early extinguishment of Signal debt prior to the Signal merger of $5.8 million after taxes.

      The following commentary presents a discussion and analysis of the Corporation’s financial condition and results of operations by its management (“Management”). The review highlights the principal factors affecting earnings and the significant changes in balance sheet items for the years 2003, 2002 and 2001. Financial information for prior years is presented when appropriate. The objective of this financial review is to enhance the reader’s understanding of the accompanying tables and charts, the consolidated financial statements, notes to financial statements, and financial statistics appearing elsewhere in this report. Where applicable, this discussion also reflects Management’s insights of known events and trends that have or may reasonably be expected to have a material effect on the Corporation’s operations and financial condition.

      All financial data has been restated to give effect to acquisitions accounted for on a pooling of interests basis and stock splits in previous periods. The results of other bank and branch acquisitions, accounted for as purchases, have been included effective with the respective dates of acquisition.

Earnings Summary

      The Corporation recorded net income of $121.0 million, or $1.42 per diluted share, for the 2003 fiscal year. This compares to $154.4 million, or $1.81 per diluted share, for fiscal year 2002. For the fourth quarter of 2003, FirstMerit reported net income of $6.5 million, or $0.07 per diluted share, compared to $36.6 million, or $0.43 per share, for the prior-year quarter.

      During the fourth quarter of 2003, FirstMerit completed several initiatives that reduced risk and strengthened the balance sheet. These initiatives included the sale of the Company’s $621 million portfolio of manufactured housing loans and prepayment of $221 million in FHLB borrowings, as well as the sale of $22.6 million of commercial loans. As a result, after-tax earnings for the full year and fourth quarter 2003 were reduced by a total of $22.6 million, or $0.27 per share, which includes an after-tax charge of $18.4 million, or $0.22 per share, related to the sale of the manufactured housing portfolio and prepayment of FHLB borrowings, and a $4.2 million, or $0.05 per share, increase in the provision for loan losses relating to the sale of commercial loans. Results for 2003 also include an accounting charge of $688,000 after-tax, or $0.01 per share, representing the cumulative effect of application of FIN 46, a new accounting interpretation that requires consolidation of the special purpose entity that holds FirstMerit’s headquarters building.

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      Returns on average common equity (“ROE”) and average assets (“ROA”) for the full year were 12.4% and 1.14%, respectively, compared with 16.3% and 1.48% for 2002. Fourth quarter ROE and ROA were 2.6% and 0.24%, respectively, compared to 15.0% and 1.39% for the prior-year quarter.

      Total revenue, defined as net interest income on a fully tax-equivalent (“FTE”) basis plus non-interest income net of securities transactions, totaled $600.8 million for 2003, compared to $602.9 million reported in 2002. FTE net interest income was $396.2 million for 2003, a decline of 6.8% from $425.0 million in 2002, reflecting the impact of a 37 basis point decline in the net interest margin to 4.02%, partially offset by a 1.6% increase in average earning assets to $9.8 billion. For the fourth quarter of 2003, FTE net interest income was $95.1 million, a decline of 9.5% from the prior-year quarter due to a 42 basis point drop in the net interest margin to 3.86%.

      Non-interest income excluding securities transactions was $204.6 million for 2003, an increase of $26.6 million, or 15.0%, from $178.0 million in 2002. Loan sales from mortgage banking activities and service charges on deposits accounted for 79.0% of the increase in 2003 fee income. For the fourth quarter, non-interest income excluding securities transactions was $48.1 million, a decline of $2.6 million, or 5.1%, from the prior-year fourth quarter. The decline reflects a lower level of mortgage banking activity and investment services, partially offset by higher levels of trust income and deposit service charges.

      Non-interest expense totaled $327.0 million for 2003, compared to $287.0 million for 2002. Excluding the $26.2 million pre-tax charge associated with the sale of the Company’s manufactured housing portfolio and prepayment of $221.0 million in FHLB borrowings, non-interest expense totaled $300.8 million, a 4.8% increase over the prior year. Salary and benefits expense increased 9.2% for the year and other non-interest expenses were virtually unchanged from the prior year. For the fourth quarter of 2003, non-interest expenses excluding the pre-tax charge declined 3.6% from the prior-year quarter.

      As previously stated, in the fourth quarter of 2003, the Company sold $22.6 million of commercial loans and $621 million of manufactured housing loans, contributing to a $14.4 million decline in non-performing assets. Year over year, nonperforming assets improved $8.4 million and loans ninety days past due and still accruing interest improved $16.0 million. As a result of these steps, non-performing assets were 1.24% of period-end loans plus ORE at December 31, 2003, unchanged from the prior-year end, but down from 1.32% at the end of the third quarter. Net charge-offs totaled $98.0 million for the year, compared to $98.5 million for 2002, 1.37% and 1.34% of loans, respectively.

      The Company recorded $102.2 million of loan loss provision in 2003. This compares with a provision of $98.6 million taken in 2002. In the fourth quarter, the provision was $32.7 million, which compares with a $26.0 million provision taken in the fourth quarter of 2002 and $22.5 million in the third quarter of 2003. The allowance for loan losses was reduced by $29.4 million for reserves associated with the asset sales. At year-end 2003, the allowance for loan losses was 1.49% of loans, reflecting the higher level of loans and the lower level of risk inherent in the portfolio after disposition of the manufactured housing (“MH”) portfolio in 2003 (as described under “Other Income”), compared to 1.70% (or 1.48% excluding the MH portfolio) at December 31, 2002.

      Assets at December 31, 2003 totaled $10.5 billion. Deposits totaled $7.5 billion at December 31, 2003 a decline of 2.7% over the last twelve months. Time deposits declined 18.5%, while lower-cost core deposits increased 11.1%. Core deposits now account for 61.1% of deposits, compared to 53.5% at December 31, 2002.

      Shareholder’s equity was $987.2 million at December 31, 2003. During the fourth quarter, FirstMerit redeemed substantially all of the outstanding shares of its 6.5% Cumulative Convertible Preferred Stock. The Company’s capital position remains strong; as tangible equity to assets was 8.16% at quarter-end. The common dividend per share paid in 2003 was $1.02, a $0.04 increase from the prior year.

Net Interest Income

      Net interest income, the Corporation’s principal source of earnings, is the difference between interest income generated by earning assets (primarily loans and investment securities) and interest paid on interest-bearing funds (namely customer deposits and wholesale borrowings). Net interest income is affected by market

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      Net interest income for the year ended December 31, 2003 was $393.6 million, compared to $421.6 million for the year ended December 31, 2002. The $28.0 million decline in net interest income occurred because the $52.7 million decline in interest expense was less than the $80.7 million decline in interest income during the same period. For the purpose of this remaining discussion, net interest income is presented on a fully-tax equivalent (“FTE”) basis, to provide a comparison among all 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 presented on a FTE basis is a non-GAAP financial measure widely used by financial services corporations. The FTE adjustment for full year 2003 was $2.6 million, compared with $3.4 million in 2002.

      The following table shows the allocation to assets, the source of funding and their respective interest spreads.

*	Yield on earning assets

      Net interest income presented on a FTE basis decreased $28.8 million, or 6.8%, to $396.2 million in 2003 compared to $425.0 million in 2002 and $395.1 million in 2001. The decrease from 2002 to 2003 occurred because the $52.8 million decline in interest expense was less than the $81.5 million decline in interest income during the same period.

      The average yield on earning assets dropped 94 basis points from 6.73% in 2002 to 5.79% in 2003. Higher outstanding balances on total average earning assets caused interest income to increase $0.2 million from year-ago levels. Average balances for investment securities were up from last year increasing interest income $15.1 million, but lower rates earned on the securities lessened interest income by $23.9 million. Average loan outstandings were down from last year, reducing interest income by $13.7 million, while lower yields earned on the loans, decreased 2003 loan interest income by $56.9 million.

      The cost of funds for the year as a percentage of average earning assets decreased 0.58% basis points from 2.34% in 2002 to 1.76% in 2003. The decline in interest expense was primarily rate-driven as lower interest rates paid on customer deposits and wholesale borrowings accounted for $45.6 million compared to 2002. As

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CHANGES IN NET INTEREST INCOME —

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

      The net interest margin is calculated by dividing net interest income FTE by average earning assets. As with net interest income, the net interest margin is affected by the level and mix of earning assets, the proportion of earning assets funded by non-interest bearing liabilities, and the interest rate spread. In addition, the net interest margin is impacted by changes in federal income tax rates and regulations as they affect the tax-equivalent adjustment.

      The net interest margin for 2003 was 4.02%, compared to 4.39% in 2002. As discussed in the previous section, the decrease in the net interest margin during 2003 was primarily a result of lower yields earned on loans and securities outpacing reductions in lower interest rates paid on customer deposits and wholesale borrowings.

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Other Income

      Excluding securities gains, other noninterest income totaled $204.6 million in 2003, an increase of $26.6 million, or 15.0%, from 2002. Other income as a percentage of net revenue (FTE net interest income plus other income, less gains from securities) was 35.0% compared to 30.9% in 2002. Explanations for the most significant changes in the components of other income are discussed immediately after the following table.

      Trust department income, which had been negatively impacted by lower stock market values, has improved by 4.8%, up $1.0 million in 2003; service charges on deposit accounts totaled $63.3 million, up $6.9 million, an improvement of 12.2%, due in part to increases in fee-based core deposits outstanding; and credit card fees were up $2.3 million or 5.9% inclusive of the reduction in debit card interchange fees resulting from the VISA and MasterCard litigation settlement changes that took effect on August 1, 2003. Manufactured housing income decreased $0.2 million from 2002 and $2.9 million from 2001. On October 31, 2001, the Corporation exited the manufactured housing (“MH”) lending business and stopped originations of new MH finance contracts. The collection and servicing of existing MH contracts was retained. On December 1, 2003, the Corporation sold the remaining MH loans to Vanderbilt Mortgage and Finance, Inc. as well as assignment of the servicing. This sale is more fully described in Note 5 of the consolidated financial statements. Investment securities gains decreased $2.9 million. Loan sales and servicing income accounted for $14.1 million of the 2003 increase over 2002 and consisted of: a $11.3 million increase from the valuation of mortgage servicing rights, a $8.1 million in the gain on sale of mortgages, and a $1.6 million increase in origination fees; offset by a $6.9 increase in the amortization of mortgage servicing assets. Other operating income increased $3.8 million; the increase from 2002 is attributable to an increase in loan refinancing fees, escrow fees, exam underwriting fees, service fees and recording fees.

Federal Income Tax

      Federal income tax expense totaled $52.9 million in 2003 compared to $68.0 million in 2002 and $57.5 million in 2001. The effective federal income tax rate for 2003 was 30.3% compared to 30.6% in 2002 and 33.1% in 2001. The Internal Revenue Service (“IRS”) is currently examining the Company’s tax returns for years 1999 and 2000. The Company believes the ultimate resolution of this examination will not result in a material adverse effect on the Company’s financial position or results of operations. Further federal income tax information is contained in Note 11 to the consolidated financial statements.

Other Expenses

      Other non-interest expenses were $327.0 million in 2003 compared to $287.0 million in 2002. Excluding the $26.2 million pre-tax charge associated with the sale of the Company’s MH portfolio and prepayment of $221.0 million in Federal Home Loan Bank borrowings, non-interest expense totaled $300.8 million, a 4.8% increase over the prior year.

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      Salaries, wages, pension and employee benefits expense totaled $151.2 million in 2003, an increase of 9.2% from 2002. The increase in salaries and wages reflects annual employee merit increases, while higher benefit costs are primarily due to increased pension expense and health care costs related to self-insured medical plans. Note 12 to the consolidated financial statements more fully describes the increases in pension and post-retirement medical expenses.

      Equipment expense decreased $1.2 million, or 7.9%, in part due to lower equipment lease costs and reduced costs associated with computer and other equipment repair. Taxes, other than federal income taxes, declined $0.9 million due to lower state franchise taxes due to the sale of the MH portfolio. Due to the increased mortgage banking activity during 2003, loan processing and other fees increased $1.2 million, or 4.5%. Professional services expenses increased $2.0 million in 2003 as the Corporation evaluated its market potential and initiated a risk-based approach to allocate resources to make our balance sheet stronger and reduce our overall risk profile.

      Other operating expenses includes the $26.2 million net impact of the sale of the MH portfolio and the prepayment of the FHLB borrowings and is more fully described in Note 5 to the consolidated financial statements.

      The efficiency ratio for 2003 was 54.27% compared to 47.46% in 2002. The “lower is better” efficiency ratio indicates the percentage of operating costs that is used to generate each dollar of net revenue—that is during 2003, 54.27 cents was spent to generate each $1 of net revenue. The efficiency ratio excluding the net impact of the sale of the MH portfolio and prepayment of the FHLB borrowings is 49.91%. Net revenue is defined as net interest income, on a tax-equivalent basis, plus other income less gains from the sales of securities.

Investment Securities

      The investment portfolio is maintained by the Corporation to provide liquidity and earnings, and as a means of diversifying risk. In accordance with Statement of Financial Accounting Standards No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” investment securities have been classified as available-for-sale. In this classification, adjustment to fair value of the available-for-sale securities in the form of unrealized holdings gains and losses is excluded from earnings and reported net of taxes in the other comprehensive income section of shareholders’ equity. At year-end 2003, the investment portfolio had a net unrealized loss of $12.1 million, which compares to a gain of $41.5 million at year-end 2002.

      At year-ends 2003 and 2002, investment securities totaled $3.1 billion and $2.5 billion, respectively. The 22% increase in the total portfolio occurred primarily in the mortgage-backed securities category. The increase reflects the reinvestment of funds generated from higher levels of core deposits, the decrease in commercial loans,

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      A summary of investment securities’ carrying value is presented below as of year-ends 2003 and 2002. Presented with the summary is a maturity distribution schedule with corresponding weighted average yields.

Carrying Value of Investment Securities