FIRSTMERIT CORP, 10-K, 1997-02-25

FIRSTMERIT CORP
10-K, 1997-02-25
NATIONAL COMMERCIAL BANKS

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<PAGE> 1

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-K

<TABLE>
<S> <C>
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
</TABLE>

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
COMMISSION FILE NUMBER 0-10161

FIRSTMERIT CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

OHIO
------------------------------------------------------
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)

34-1339938
------------------------------------------------------
(I.R.S. EMPLOYER IDENTIFICATION NO.)

<TABLE>
<S> <C> <C>
III CASCADE PLAZA, AKRON, OHIO 44308-1444 (330) 996-6300
- - -------------------------------------- ------------ -------------------
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE) (TELEPHONE NUMBER)
OFFICES)
</TABLE>

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
- - --------------------------------------------------------------------------------
(Title of Class)

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. [ ]

State the approximate aggregate market value of the voting stock held by
non-affiliates of the registrant as of February 1, 1997: $1,093,842,488.

Indicate the number of shares outstanding of registrant's common stock as
of February 1, 1996: 31,910,209 Shares of Common Stock, No Par Value.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement of FirstMerit Corporation, dated February
26, 1997, in Part III.
<PAGE> 2

PART I

ITEM 1. BUSINESS

Registrant, FirstMerit Corporation ("FirstMerit" or the "Corporation"), is
a multi-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
executive offices of FirstMerit are located in Akron, Ohio.

FirstMerit is the sole shareholder of each of the following entities: First
National Bank of Ohio, a national banking association, Akron, Ohio ("First
National"), The Old Phoenix National Bank of Medina, a national banking
association, Medina, Ohio ("Old Phoenix"), EST National Bank, a national banking
association, Elyria, Ohio ("EST"), Peoples National Bank, a national banking
association, Wooster, Ohio ("Peoples Bank"), Citizens National Bank, a national
banking association, Canton, Ohio ("Citizens"), Peoples Bank, N.A., Ashtabula,
Ohio, a national banking association, Ashtabula, Ohio ("Peoples N.A."),
(collectively, the "Banks"), FirstMerit Credit Life Insurance Company, an
Arizona corporation ("FirstMerit Insurance"), FirstMerit Community Development
Corporation ("FirstMerit CDC"), Citizens Investment Corporation, an Ohio
corporation, and Citizens Savings Corporation of Stark County, an Ohio
corporation (all, collectively, the "Subsidiaries").

FirstMerit is in the process of merging the Banks under a single charter.
It is currently contemplated that this process will be completed in 1998. The
resulting institution will be First National.

In 1996, FirstMerit Trust Company, N.A., a national trust company, Naples,
Florida ("FirstMerit Trust"), expanded its charter and converted from a national
trust company to a national bank. Subsequently, FirstMerit Bank, FSB, a federal
savings association, Clearwater, Florida ("FirstMerit FSB"), was merged with
FirstMerit Trust under the name FirstMerit Bank, N.A. On December 31, 1996,
FirstMerit Bank N.A. was sold to the SouthTrust Corporation of Birmingham,
Alabama.

Although principally a regional banking organization, FirstMerit through
the Subsidiaries provides a wide range of banking, fiduciary, financial and
investment services to corporate, institutional and individual customers
throughout northern Ohio, including Ashtabula, Cuyahoga, Erie, Geauga, Lake,
Lorain, Medina, Portage, Stark, Summit and Wayne Counties. FirstMerit directs
the overall policies, including lending practices, and financial resources of
the Subsidiaries, but most day-to-day affairs of Subsidiaries are managed by
their own officers and directors, some of whom are also officers and directors
of FirstMerit. In addition to the customary services of accepting funds for
deposit and making loans, the Banks provide a wide range of specialized services
tailored to specific markets, including personal and corporate trust services,
personal financial services, cash management services and international banking
services. FirstMerit's non-banking direct and indirect subsidiaries provide
insurance sales services, reinsurance of credit life and accident and health
insurance on loans made by the Banks, securities brokerage services, personal
property and equipment lease financing and other financial services. FirstMerit
has recently reactivated the health and life insurance license of one of its
indirect subsidiaries.

At February 1, 1997, FirstMerit's Subsidiaries operated 128 full service
banking offices, and had 161 automated teller machines, located in 11 counties
in the State of Ohio, and employed approximately 2,330 full- and part-time
employees.

Presented in the following schedule is further specific information
concerning each of the financial institution Subsidiaries of FirstMerit as of
February 1, 1997:

<TABLE>
<CAPTION>
NUMBER
SUBSIDIARY COUNTIES OF DATE OF DATE OF OF
INSTITUTION OPERATION ORGANIZATION BUSINESS AFFILIATION TYPE OF CHARTER OFFICES
- - ---------------- ---------------- ------------ ---------------- ----------- ---------------- ------
<S> <C> <C> <C> <C> <C> <C>
First National Stark, Summit 1947 Commercial bank 12/31/81 Federal 58
Bank of Ohio Cuyahoga, Lake with trust
and Portage services
The Old Phoenix Medina 1873 Commercial bank 12/31/81 Federal 15
National Bank with trust
of Medina services
EST National Lorain, Cuyahoga 1901 Commercial bank 12/12/83 Federal 19
Bank and Erie with trust
services
</TABLE>

1
<PAGE> 3

<TABLE>
<CAPTION>
NUMBER
SUBSIDIARY COUNTIES OF DATE OF DATE OF OF
INSTITUTION OPERATION ORGANIZATION BUSINESS AFFILIATION TYPE OF CHARTER OFFICES
- - ---------------- ---------------- ------------ ---------------- ----------- ---------------- ------
<S> <C> <C> <C> <C> <C> <C>
Peoples National Wayne 1892 Commercial bank 10/26/88 Federal 5
Bank with trust
services
Citizens Stark 1933 Commercial bank 3/21/89 Federal 18
National Bank with trust
services
Peoples Bank, Ashtabula, 1890 Commercial bank 9/30/90 Federal 15
N.A. Geauga and Lake with trust
services
</TABLE>

SUBSIDIARY OPERATIONS

Each Bank is engaged in commercial banking in its respective geographical
market. Commercial banking includes the acceptance of demand, savings and time
deposits and the granting of commercial and consumer loans for the financing of
both real and personal property. Other services include automated banking
programs, credit cards, the rental of safe deposit boxes, letters of credit,
leasing, discount brokerage and credit life insurance. The Banks also operate
trust departments which offer estate and trust services. Each Bank offers its
services primarily to consumers and small and medium size businesses in its
respective geographic market. None of the Banks are engaged in lending outside
the continental United States. None of the Banks are dependent upon any one
significant customer or a specific industry.

FirstMerit Insurance was formed in 1985 to engage in underwriting of credit
life and credit accident and health insurance directly related to the extension
of credit by the Banks to their customers.

FirstMerit CDC was established in 1994 to further the efforts of
FirstMerit's Subsidiaries in meeting the credit needs of their lending
communities, and the requirements of the Community Reinvestment Act ("CRA").
Congress enacted CRA to assure that banks and savings associations meet the
deposit and credit needs of their communities. Through a community development
corporation, financial institutions can meet these needs by non-traditional
activities such as acquiring, rehabilitating, or investing in real estate in low
to moderate income neighborhoods, and promoting the development of small
business.

The Banks in 1995 jointly organized and capitalized FirstMerit Mortgage
Corporation ("FirstMerit Mortgage"), which is located in Canton, Ohio, in
offices owned by Citizens. FirstMerit Mortgage is engaged in the business of
originating residential mortgage loans and providing mortgage loan servicing for
itself, the Banks and third parties.

First National is the parent corporation of two wholly-owned Ohio
corporations organized in 1993, FirstMerit Leasing Company ("FirstMerit
Leasing") and FirstMerit Securities, Inc. ("FirstMerit Securities"). FirstMerit
Leasing primarily provides equipment lease financing and related services, while
FirstMerit Securities primarily provides discount brokerage services to
customers of First National and other Subsidiaries.

ACQUISITIONS

FirstMerit engages on a regular basis in discussions concerning possible
acquisitions of other financial institutions. During 1995, FirstMerit acquired
control of Citizens Savings Bank of Canton, an Ohio savings association with its
principal offices in Canton, Ohio ("Citizens Savings"). FirstMerit acquired
Citizens Savings through the merger of The CIVISTA Corporation, the sole
shareholder of Citizens Savings ("CIVISTA"), with and into FirstMerit in
exchange for approximately 6,513,119 shares of FirstMerit common stock.
FirstMerit then immediately effected a merger of Citizens Savings into The First
National Bank in Massillon, a national bank subsidiary of FirstMerit, to form a
new national bank subsidiary called Citizens National Bank, with its principal
offices in Canton, Ohio.

When FirstMerit acquired control of Citizens Savings through the merger
with CIVISTA, it also acquired control of certain other wholly-owned
subsidiaries of CIVISTA, including Citizens Savings Corporation of Stark County
("CSC") and Citizens Investment Corporation ("CIC").

2
<PAGE> 4

Although FirstMerit is in the process of selling all assets, winding up the
affairs, and formally dissolving CSC, it still owns a large portion of an office
condominium in Stark County, and certain low to moderate income housing units.
CIC owns and has participated in the development of residential real estate in
La Quinta, California. FirstMerit also is in the process of selling all assets,
winding up the affairs, and formally dissolving CIC.

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. The Subsidiaries' primary financial institution competitors
include Bank One, National City Bank, KeyBank, Star Bank and The Fifth Third
Bank. Mergers between financial institutions within Ohio and in neighboring
states have added competitive pressure, which pressure has intensified due to
interstate banking which became permissible under the Interstate Banking and
Branching Efficiency Act of 1994. FirstMerit competes in its markets by offering
quality and innovative services at competitive prices.

REGULATION AND SUPERVISION

FirstMerit is registered as a bank holding company under the Bank Holding
Company Act of 1956, as amended ("BHCA"). Bank holding companies are subject to
regulation by the Federal Reserve. Under Federal Reserve policy, a bank holding
company is expected to act as a source of financial strength to each subsidiary
bank and to commit resources to support such subsidiary banks. The BHCA requires
the prior approval of the Federal Reserve in any case where a bank holding
company proposes to acquire direct or indirect ownership or control of more than
five percent (5%) of the voting shares of any bank that is not already
majority-owned by it, or to merge or consolidate with any other bank holding
company.

The BHCA also prohibits a bank holding company, with certain exceptions,
from acquiring more than five percent of the voting shares of any company that
is not a bank and from engaging in any business other than banking or managing
or controlling banks. Under the BHCA, the Federal Reserve is authorized to
approve the ownership of shares by a bank holding company in any company the
activities of which the Federal Reserve has determined to be so closely related
to banking or to managing or controlling banks as to be a proper incident
thereto. The Federal Reserve has by regulation determined that certain
activities are closely related to banking within the meaning of the BHCA. These
activities include: operating a savings association, mortgage company, finance
company, credit card company or factoring company; performing certain data
processing operations; providing investment and financial advice; and acting as
an insurance agent for certain types of credit-related insurance.

Subsidiary banks of a bank holding company are subject to certain
restrictions imposed by the Federal Reserve Act on extensions of credit to the
bank holding company or any of its subsidiaries, on investments in the stock or
other securities of the bank holding company or its subsidiaries and on the
taking of such stock or securities as collateral for loans to any borrower.
Further, a bank holding company and its subsidiaries are prohibited from
engaging in certain tie-in arrangements in connection with any extension of
credit, lease or sale of property or furnishing of any services.

FirstMerit is also under the jurisdiction of the Securities and Exchange
Commission 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 Commission.

On September 29, 1994, President Clinton signed the Interstate Banking and
Branching Efficiency Act of 1994 ("Interstate Act"). The Interstate Act
generally permits nationwide interstate banking and branching commencing one
year after enactment. After that time an "adequately capitalized" and "well
managed" bank holding company may acquire a bank in any state, subject to
certain concentration limitations. No banking organization may control more than
ten percent of deposits nationwide or more than 30.0% of deposits in any one
state. Individual states may waive the 30.0% limitation. Beginning June 1, 1997,
interstate bank holding

3
<PAGE> 5

companies may consolidate banks they own in multiple states into a single branch
network, or acquire out-of-state banks as branches. States may authorize
interstate branching earlier than June 1, 1997, or may opt out of the process
altogether. De novo interstate branching is not authorized by the Interstate
Act, but states may specifically authorize it. States may also limit the
acquisition of newly-formed banks for a period of up to five years to restrict
effective de novo branching. The Interstate Act requires CRA compliance by
out-of-state branches and prohibits "deposit production offices" to ensure that
local savings are not diverted to other states. Institutions must maintain a
loan activity-to-deposit ratio within a host state at least equal to one-half of
the average percentage for all banks in the host state, otherwise the
institution's federal regulator may close the out-of-state branch and restrict
the institution from opening new branches in that state. Certain state laws,
such as those on intrastate branching, consumer protection and fair lending,
will still apply to out-of-state banks or branches. The Interstate Act is
expected to stimulate an already active merger environment in the banking
industry.

SUMMARY RESULTS OF OPERATIONS

As of December 31, 1996, FirstMerit's consolidated total assets were
$5,227,980,000. Earnings for FirstMerit in 1996 were $70,940,000, or $2.18 per
share, compared with $31,318,000, or $0.94 per share, for the year ended
December 31, 1995. The earnings reported for 1996 were impacted by the Savings
Association Insurance Fund (SAIF) recapitalization charge of $6,652,000,
recorded September 30, 1996. Excluding the SAIF charge, earnings were
$77,592,000, or $2.38 per share. As reported last year, net income for 1995
included expenses of $2,198,000 related to an early retirement program, costs of
$16,214,000 associated with the acquisition of The CIVISTA Corporation
("CIVISTA"), $11,596,000 of re-engineering charges and an extraordinary gain of
$5,599,000 from the sale of several apartment complexes formerly owned by a
subsidiary of CIVISTA. Excluding the unusual charges in 1995, earnings would
have been $61,326,000, or $1.83 per share. Total cash dividends paid to
shareholders for the entire year were $1.10, an increase of $0.08 per share over
the previously stated annual payments of $1.02.

On a fully-tax equivalent basis, net interest income was $254,015,000, up
6% from last year. The improved net interest margin of 4.98% compared to 4.56%
in 1995 was primarily responsible for the rise in net interest income. Other
income for the year was $82,496,000, an increase of $13,979,000 or 20% over the
prior year. Included in 1996 other income were net proceeds of $13,210,000 from
sales of affiliate branches and $490,000 from the sale of FirstMerit Bank, N.A.
in Clearwater, Florida. Higher trust income, service charges on depositors'
accounts, and credit card fees also contributed to the improvement in other
income. Other expenses were $209,702,000 compared to $227,779,000 in 1995.
Included in the 1996 figure is the previously mentioned pre-tax SAIF assessment
of $10,235,000. Other expenses for 1995 included portions of the early
retirement, CIVISTA acquisition, and re-engineering charges totaling $22,404,000
on a pre-tax basis.

During 1996, the Corporation recorded a provision for possible loan losses
of $17,751,000, a ten percent reduction from last year's provision of
$19,763,000. The provisions in both years address the continuing shift in
FirstMerit's loan portfolio from residential mortgages into commercial and
consumer loans, which historically have higher loss rates. Nonperforming assets
were 0.29% of total loans and other real estate compared to 0.37% one year ago.
The allowance for loan losses as a percentage of outstanding loans was 1.35% at
December 31, 1996 and 1.24% at December 31, 1995.

ITEM 2. PROPERTIES

FIRSTMERIT CORPORATION

FirstMerit's executive offices and certain holding company operational
facilities, totaling 88,546 square feet, are leased from First National.
FirstMerit relocated its executive offices in 1994 to III Cascade, a seven-story
office building located in downtown Akron, Ohio. During 1993, a long-term
leasehold interest in III Cascade was acquired by an Ohio general partnership
(the "Partnership"), the general partners of which are FirstMerit and a Delaware
corporation subsidiary of Banc One Capital Corporation. FirstMerit does not
control the Partnership. The City of Akron is the lessor of the property. First
National has subleased all of the premises of III Cascade from the Partnership,
and FirstMerit subleases a portion of the premises from First National.

4
<PAGE> 6

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.

FIRST NATIONAL BANK OF OHIO

The principal executive offices of First National are located in its
28-story main office building located at 106 South Main Street, Akron, Ohio,
which is owned by First National. First National is the principal tenant of the
building occupying approximately one-half of a total of 215,000 square feet of
the building, with the remaining portion leased to tenants unrelated to First
National. The properties occupied by 30 of First National's other branches are
owned by First National, while the properties occupied by its remaining 27
branches are leased with various expiration dates. There is no mortgage debt
owing on any of the above property owned by First National. First National also
owns automated teller machines, on-line teller terminals and other computers and
related equipment for use in its business. In 1996 First National completed
major renovations to its main office building. First National renovated all
space which it occupies in the building, as well as all public areas.

First National also owns 19.5 acres near downtown Akron, on which is
located FirstMerit's Operations Center. The Operations Center is occupied and
operated by FirstMerit Services Division, an operating division of FirstMerit.
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.

The Trust Department of First National is located in Main Place, a
four-story office building located in downtown Akron. The Trust Department
occupies 29,099 square feet of leased space in Main Place.

THE OLD PHOENIX NATIONAL BANK OF MEDINA

The principal executive offices of Old Phoenix are located in its main
office building at 39 Public Square, Medina, Ohio. The building which houses its
executive offices is leased by Old Phoenix. The properties occupied by five of
Old Phoenix's branches are owned by Old Phoenix, while the properties occupied
by its remaining nine branches are the subject of various lease obligations
having various expiration dates. These facilities are leased from IRT
Properties, a publicly-held real estate investment trust. Old Phoenix also owns
automated teller machines, on-line teller terminals and other related equipment.
The computer operations of Old Phoenix are provided through FirstMerit.

EST NATIONAL BANK

The principal executive offices of EST are located in its main office
building at 105 Court Street, Elyria, Ohio, which is owned by EST. EST occupies
approximately one-half of the total available space in the building. EST owns
the land and buildings occupied by 13 of its banking offices. The remaining five
banking offices are the subject of lease obligations with various lessors and
varying lease terms and expiration dates. EST also has automated teller machines
and on-line teller terminals. The computer operations of EST are provided
through FirstMerit.

PEOPLES NATIONAL BANK

The principal executive offices of Peoples Bank are located in its main
office building at 121 North Market Street, Wooster, Ohio, which is owned by
Peoples Bank. The properties occupied by two of Peoples Bank branches are owned
by Peoples Bank, while the properties occupied by its remaining two branches are
leased at various expiration dates. No mortgage debt exists on the above
property owned by Peoples Bank. Peoples Bank also has automated teller machines
and on-line terminals. The computer operations of Peoples Bank are provided
through FirstMerit.

5
<PAGE> 7

CITIZENS NATIONAL BANK

The principal executive offices of Citizens are located in its main office
building at 100 Central Plaza South, Canton, Ohio, which is leased by Citizens.
Citizens owns the properties occupied by eight of its other banking offices,
while the properties occupied by the remaining seven are leased under different
leases with various expiration dates. Citizens also maintains a trust office and
private banking office at two additional leased locations. Citizens also has
automated teller machines and on-line terminals. The computer operations of
Citizens are provided through FirstMerit.

PEOPLES BANK, N.A.

The principal executive offices of Peoples N.A. are located in its office
at 6725 Center Street, Mentor, Ohio, which is owned by Peoples N.A. Peoples N.A.
owns the properties occupied by five of its other branches, while the properties
occupied by its remaining nine branches are leased at various expiration dates.
Peoples N.A. also leases the property occupied by a loan production office. No
mortgage debt exists on the above property owned by Peoples N.A. Peoples N.A.
also has automated teller machines and on-line terminals. The computer
operations of Peoples N.A. are provided through FirstMerit.

CITIZENS SAVINGS CORPORATION OF STARK COUNTY

CSC owns a large portion of an office condominium in Stark County, Ohio and
certain low to moderate income housing units.

FIRSTMERIT MORTGAGE CORPORATION

The Banks in 1995 jointly organized and capitalized FirstMerit Mortgage,
which is engaged in the business of originating residential mortgage loans and
providing mortgage loan servicing for itself, the Banks and third parties.
FirstMerit Mortgage conducts its business in property owned by Citizens located
at 4455 Hills and Dales Road, Canton, Ohio.

ITEM 3. LEGAL PROCEEDINGS

The nature of FirstMerit's business results in a certain amount of
litigation. Accordingly, FirstMerit and its subsidiaries are subject to various
pending and threatened lawsuits in which claims for monetary damages are
asserted. Management, after consultation with legal counsel, is of the opinion
that the ultimate liability of such pending matters would not have a material
adverse effect on FirstMerit's financial condition.

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

No matters were submitted during the fourth quarter of 1996 to a vote of
security holders of FirstMerit.

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<PAGE> 8

EXECUTIVE OFFICERS OF REGISTRANT

The following persons are the executive officers of FirstMerit as of
February 28, 1997. Unless otherwise designated, they are officers of FirstMerit,
and unless otherwise stated, they have held their indicated positions for the
past five years.

<TABLE>
<CAPTION>
DATE
APPOINTED TO
NAME AGE FIRSTMERIT POSITION AND BUSINESS EXPERIENCE
- - --------------------- ------ ------------- -----------------------------------------------
<S> <C> <C> <C>
John R. Cochran 54 03-01-95 President and Chief Executive Officer since
March 1, 1995; previously President and Chief
Executive Officer of Norwest Bank Nebraska,
N.A.
John R. Macso 50 11-08-90 Executive Vice President; President and Chief
Executive Officer of First National since
August 1, 1995; previously Executive Vice
President of First National since August 18,
1994; previously Senior Loan/Credit Officer
FirstMerit since August 1, 1991; previously
President and Chief Executive Officer of
Peoples N.A.
Robert P. Brecht 46 08-09-91 Executive Vice President; previously Executive
Vice President of First National since July 20,
1995; previously President and Chief Executive
Officer of Peoples N.A. since August 1, 1991;
previously Executive Vice President and Senior
Vice President of Peoples N.A.
Jack R. Gravo 50 02-16-95 Executive Vice President; previously President
and Chief Executive Officer of Citizens since
February 1, 1995; previously President of The
CIVISTA Corporation
Bruce M. Kephart 45 07-25-95 Executive Vice President; President and Chief
Executive Officer of Peoples N.A. since July
25, 1995; previously Vice President, Bank One,
Cleveland, N.A.
George P. Paidas 49 04-13-94 Executive Vice President; President and Chief
Executive Officer of Old Phoenix since March 9,
1994; previously Executive Vice President of
Old Phoenix
W. Daniel Waldron 55 04-11-84 Executive Vice President; President and Chief
Executive Officer of EST since April 16, 1994;
previously President and Chief Executive
Officer of Peoples Bank
Gregory R. Bean 45 04-10-91 Senior Vice President; Senior Vice President
and Senior Trust Officer of First National
Gary J. Elek 45 02-11-88 Senior Vice President and Treasurer
Terry E. Patton 48 04-10-85 Senior Vice President, Counsel and Secretary;
Senior Vice President, Counsel and Secretary of
First National
</TABLE>

7
<PAGE> 9

<TABLE>
<CAPTION>
DATE
APPOINTED TO
NAME AGE FIRSTMERIT POSITION AND BUSINESS EXPERIENCE
- - --------------------- ------ ------------- -----------------------------------------------
<S> <C> <C> <C>
William E. Stansifer 49 10-02-95 Senior Vice President since October 2, 1995;
previously Senior Vice President, Banking
Credit Policy Office, Norwest Corporation.

Carrie L. Tolstedt 37 05-22-95 Executive Vice President since August 1, 1996;
President and Chief Executive Officer of
Citizens National Bank since August 1, 1996,
President and Chief Executive Officer of
Peoples National Bank since March 25, 1996;
previously Senior Vice President since 1995;
previously Senior Vice President of Norwest
Bank Nebraska, N.A. since July 1993; previously
Vice President Norwest Bank Nebraska, N.A.
</TABLE>

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

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

<TABLE>
<CAPTION>
STOCK PERFORMANCE AND DIVIDENDS
BIDS PER SHARE
QUARTER DIVIDEND BOOK
ENDING HIGH LOW RATE VALUE*
<S> <C> <C> <C> <C>
03-31-95 $25.50 $21.44 $0.2500 $15.73
06-30-95 26.75 22.50 0.2500 16.04
09-30-95 27.25 24.50 0.2500 16.24
12-31-95 30.50 24.50 0.2700 16.23
03-31-96 32.50 27.75 0.2700 16.20
06-30-96 32.00 30.00 0.2700 16.13
09-30-96 32.00 28.25 0.2700 16.20
12-31-96 36.00 31.25 0.2900 16.39
</TABLE>

* Based upon number of shares outstanding at the end of each quarter.

This table sets forth the high and low closing bid quotations, dividend
rates and book values per share for the calendar periods indicated. These
quotations furnished by the National Quotations Bureau Incorporated; represent
prices between dealers, do not include retail markup, markdowns, or commissions,
and may not represent actual transactions.

On February 1, 1997 there were approximately 6,976 shareholders of record
of FirstMerit Common Stock.

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<PAGE> 10

ITEM 6. SELECTED FINANCIAL DATA

SELECTED FINANCIAL DATA

FIRSTMERIT CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------------------------------
1996 1995 1994 1993 1992 1991
---------- --------- --------- --------- --------- ---------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
Results of Operations
Interest income............. $ 411,745 416,627 371,018 361,208 385,089 410,833
Conversion to fully-tax
equivalent............... 3,043 3,840 4,590 5,264 5,679 6,977
---------- --------- --------- --------- --------- ---------
Interest income*............ 414,788 420,467 375,608 366,472 390,768 417,810
Interest expense............ 160,773 180,933 140,181 135,149 167,405 227,892
---------- --------- --------- --------- --------- ---------
Net interest income*........ 254,015 239,534 235,427 231,323 223,363 189,918
Provision for possible loan
losses................... 17,751 19,763 4,624 8,056 18,965 12,750
Other income................ 82,496 68,517 70,656 71,909 68,591 65,854
Other expense............... 209,702 227,779 193,410 187,945 175,286 167,495
---------- --------- --------- --------- --------- ---------
Income before federal income
taxes*................... 109,058 60,509 108,049 107,231 97,703 75,527
Federal income taxes........ 35,075 30,950 32,110 33,335 29,194 20,210
Fully-tax equivalent
adjustment............... 3,043 3,840 4,590 5,264 5,679 6,977
---------- --------- --------- --------- --------- ---------
Federal income taxes*....... 38,118 34,790 36,700 38,599 34,873 27,187
---------- --------- --------- --------- --------- ---------
Income before extraordinary
item........................ 70,940 25,719 71,349 68,632 62,830 48,340
Extraordinary item -- gain on
disposition of assets after
combination (net of tax
effect) .................... -- 5,599 -- -- -- --
---------- --------- --------- --------- --------- ---------
Net income.................... $ 70,940 31,318 71,349 68,632 62,830 48,340
========== ========= ========= ========= ========= =========
Per share:
Income before
extraordinary item..... $ 2.18 0.77 2.14 2.07 1.89 1.46
Extraordinary item (net
of tax effect)......... -- 0.17 -- -- -- --
---------- --------- --------- --------- --------- ---------
Net income............... 2.18 0.94 2.14 2.07 1.89 1.46
========== ========= ========= ========= ========= =========
Cash dividends........... $ 1.10 1.02 0.98 0.87 0.79 0.77
Dividend payout ratio....... 50.56% 132.68% 45.72% 42.13% 41.71% 52.78%
Average Ratios Return on total
assets...................... 1.29% 0.55% 1.32% 1.34% 1.28% 1.01%
Return on shareholders'
equity................... 13.44% 5.93% 13.86% 14.30% 14.46% 12.07%
Shareholders' equity to
total assets............. 9.64% 9.34% 9.56% 9.38% 8.86% 8.40%
Balance Sheet Data
Total assets (at December
31)...................... $5,227,980 5,596,521 5,722,573 5,179,298 5,054,267 4,855,127
Daily averages:
Total assets............. $5,478,482 5,654,811 5,385,758 5,113,854 4,907,738 4,768,971
Earning assets........... 5,095,929 5,249,598 4,993,972 4,691,001 4,510,951 4,392,020
Deposits and other
funds.................. 4,879,343 5,058,333 4,820,339 4,581,960 4,416,929 4,314,717
Shareholders' equity..... 527,899 528,038 514,860 479,792 434,604 400,474
<FN>
- - ---------------

*Fully-tax equivalent basis
</TABLE>

9
<PAGE> 11

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS FOR THE YEARS ENDED 1996, 1995, 1994

The following commentary presents Management's discussion and analysis of
the Corporation's financial condition and results of operations. The review
highlights the principal factors affecting earnings and the significant changes
in balance sheet items for the years 1996, 1995 and 1994. 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

FirstMerit Corporation's net income for 1996 totaled $70,940,000, or $2.18
per share, compared with $31,318,000, or $0.94 per share, earned in 1995. The
Savings Association Insurance Fund (SAIF) recapitalization charge of $6,652,000,
recorded September 30, 1996, had a significant impact on 1996 earnings.
Excluding the SAIF charge, earnings were $77,592,000, or $2.38 per share. Net
income for 1995 included several one-time charges and an extraordinary gain.
Without the one-time charges, 1995 earnings would have been $61,326,000, or
$1.83 per share.

As reported last year end, 1995 net income contained expenses of $2,198,000
related to an early retirement program, costs of $16,214,000 associated with the
acquisition of The CIVISTA Corporation ("CIVISTA"), an extraordinary gain of
$5,599,000 from the sale of several apartment complexes acquired by the
Corporation in its acquisition of CIVISTA, and $11,596,000 of reengineering
charges implemented to improve overall operating efficiencies, improve branch
network productivity, and centralize operations. The implementation of these
programs contributed significantly to FirstMerit's 1996 success.

Return on average equity for the year was 14.70% and return on average
assets was 1.42%, when the SAIF charge was not considered. The comparable ratios
for 1995, excluding the prior year one-time charges, were 11.35% and 1.10%,
respectively. For the quarter, return on equity was 14.48% versus 2.34% in 1995
and return on assets was 1.39% compared to 0.23% for the same period last year.

Net interest income, on a fully-tax equivalent basis, was $254,015,000, up
6% from last year. The improved net interest margin of 4.98% compared to 4.56%
in 1995 was primarily responsible for the rise in net interest income.

Other income for the year was $82,496,000, an increase of $13,979,000 or
20% over the prior year. Included in 1996 other income were net proceeds of
$13,210,000 from sales of affiliate branches and $490,000 from the sale of
FirstMerit Bank, N.A. in Clearwater, Florida. Higher trust income, service
charges on depositors' accounts, and credit card fees also contributed to the
improvement in other income.

Other expenses were $209,702,000 compared to $227,779,000 in 1995. Included
in the 1996 figure is the pretax SAIF assessment of $10,235,000. Other expenses
for 1995 included portions of the early retirement, CIVISTA acquisition, and
reengineering charges totaling $22,404,000 on a pretax basis. The efficiency
ratio, excluding unusual charges in both years, was approximately 59% in 1996
versus 66% for 1995. The improvement in the efficiency ratio is directly
attributable to the reengineering plan developed in 1995 that focused on
improving overall efficiencies, improving branch network productivity, and
centralizing operations.

10
<PAGE> 12

0.37% one year ago. The allowance for loan losses as a percentage of outstanding
loans was 1.35% at December 31, 1996 and 1.24% at December 31, 1995.

As reported in November 1996, FirstMerit increased its regular quarterly
cash dividend 7% from $0.27 per share to $0.29 per share. In September 1996, the
Corporation implemented its second share repurchase plan. On a combined basis,
the two plans authorize repurchase of up to 3,000,000 shares of FirstMerit's
outstanding common stock. Through December 31, 1996, approximately 1,800,000
shares have been repurchased in the open market and through privately negotiated
transactions.

The following table summarizes the changes in earnings per share for 1996
and 1995.

<TABLE>
<CAPTION>
1996/ 1995/
(DOLLARS) 1995 1994
- - --------------------------------------------- -------- --------
<S> <C> <C>
CHANGES IN EARNINGS PER SHARE
Net income for 1996 and 1995,
respectively............................ $ 0.94 2.14
Increases (decreases) attributable to:
Net interest income -- taxable
equivalent............................ 0.45 0.12
Provision for possible loan losses...... 0.06 (0.45)
Trust services.......................... 0.05 (0.08)
Service charges on deposit accounts..... 0.12 0.00
Credit card fees........................ 0.06 0.03
Securities (losses), net................ (0.07) 0.00
Other income............................ 0.28 (0.02)
Salaries and employee benefits.......... 0.41 (0.27)
Net occupancy expense................... (0.03) (0.09)
Equipment expense....................... 0.02 (0.04)
Other expenses.......................... (0.32) (0.15)
Charges related to CIVISTA
acquisition........................... 0.48 (0.48)
Extraordinary gain -- disposition of
assets................................ (0.17) 0.17
Federal income taxes -- taxable
equivalent............................ (0.10) 0.06
------ ------
Net change in net income................ 1.24 (1.20)
------ ------
Net income per share.................... $ 2.18 0.94
====== ======
</TABLE>

NET INTEREST INCOME

Net interest income, the difference between interest and loan fee income on
earning assets and the interest paid on deposits and borrowed funds, is the
principal source of earnings for the Corporation. Throughout this discussion net
interest income is presented on a fully taxable equivalent (FTE) basis which
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 is affected by market interest rates on both earning
assets and interest bearing liabilities, the level of earning assets being
funded by interest bearing liabilities, non-interest bearing liabilities and
equity, and the growth in earning assets. The following table shows the
allocation to assets, the source of funding and their respective interest
spreads.

<TABLE>
<CAPTION>
1996
------------------------------------
AVERAGE NET
EARNING INTEREST INTEREST
ASSETS SPREAD INCOME
---------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Interest-bearing liabilities..................... $4,134,241 4.25% 175,705
Non-interest-bearing liabilities and equity...... 961,688 8.14%* 78,310
---------- -------
$5,095,929 254,015
========== =======
</TABLE>

11
<PAGE> 13

<TABLE>
<CAPTION>
1995
------------------------------------
AVERAGE NET
EARNING INTEREST INTEREST
ASSETS SPREAD INCOME
---------- -------- --------
<S> <C> <C> <C>
Interest-bearing liabilities $4,333,046 3.83% 166,123
Non-interest-bearing liabilities and equity 916,552 8.01%* 73,411
---------- -------
$5,249,598 239,534
========== =======
</TABLE>

<TABLE>
<CAPTION>
1994
------------------------------------
AVERAGE NET
EARNING INTEREST INTEREST
ASSETS SPREAD INCOME
---------- -------- --------
<S> <C> <C> <C>
Interest-bearing liabilities $4,153,870 4.15% 172,240
Non-interest-bearing liabilities and equity 840,102 7.52%* 63,187
---------- -------
$4,993,972 235,427
========== =======
<FN>
- - ---------------

*Yield on earning assets
</TABLE>

Net interest income increased $14.5 million, or 6.0%, to $254.0 million in
1996 compared to $239.5 million in 1995. The increase occurred because the
decline in interest expense was greater than the reduction in interest income.
Specifically, interest income fell $5.7 million while interest expense decreased
$20.2 million, or 11%.

Interest income was lower than last year because earning assets fell 2.9%
or $153.7 million. Sales of affiliate branches in markets where FirstMerit did
not hold a dominant market share, the sale of FirstMerit Bank, N.A. in
Clearwater, Florida and sales and maturities of investment securities
contributed to the decline in assets. The average yield on earning assets
increased 13 basis points from 8.01% to 8.14% during 1996.

Lower interest expense was due to fewer interest bearing liabilities and a
reduced cost of funds. Also contributing to less interest expense was a shift in
the composition of customer deposits as earning assets funded by non-interest
bearing liabilities and equity increased from 17.5% in 1995 and 16.8% in 1994 to
18.9% in 1996.

The following table provides an analysis of the effect of changes in
interest rates and volumes on net interest income in 1996 and 1995.

12
<PAGE> 14

CHANGES IN NET INTEREST DIFFERENTIAL --
FULLY-TAX EQUIVALENT RATE/VOLUME ANALYSIS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------------------------
1996 AND 1995 1995 AND 1994
---------------------------- --------------------------
INCREASE (DECREASE) IN INCREASE (DECREASE) IN
INTEREST INCOME/EXPENSE INTEREST INCOME/EXPENSE
---------------------------- --------------------------
YIELD/ YIELD/
VOLUME RATE TOTAL VOLUME RATE TOTAL
-------- ------- ------- ------- ------- ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
INTEREST INCOME
Investment securities:
Taxable............................... $ (7,124) (213) (7,337) (9,676) 5,571 (4,105)
Tax-exempt............................ (1,590) (375) (1,965) (1,759) 117 (1,642)
Loans................................... (485) 4,855 4,370 40,054 11,039 51,093
Federal funds sold...................... (135) (612) (747) (2,529) 2,042 (487)
-------- ------- ------- ------ ------ ------
Total interest income................... (9,334) 3,655 (5,679) 26,090 18,769 44,859
-------- ------- ------- ------ ------ ------
INTEREST EXPENSE
Interest on deposits:
Demand-interest bearing............... 366 (1,729) (1,363) (742) (485) (1,227)
Savings............................... (2,677) (3,315) (5,992) (4,988) 54 (4,934)
Certificates and other time
deposits........................... (574) (1,565) (2,139) 9,583 19,407 28,990
Federal funds purchased, securities sold
under agreements to repurchase and
other borrowings...................... (4,563) (6,103) (10,666) 13,793 4,129 17,922
-------- ------- ------- ------ ------ ------
Total interest expense.................. (7,448) (12,712) (20,160) 17,646 23,105 40,751
-------- ------- ------- ------ ------ ------
Net interest income..................... $ (1,886) 16,367 14,481 8,444 (4,336) 4,108
======== ======= ======= ====== ====== ======
</TABLE>

- - ---------------

Note: The rate volume variance has been allocated entirely to volume.

Total interest income decreased by $5.7 million in 1996 or 1.4% compared to
1995, which increased 11.9% from 1994. The 1996 decrease resulted from a decline
in earning assets that was partially offset by an improved earning asset yield.
Sales and maturities of investment securities contributed $8.7 million or 93.4%
to the total drop in average earning assets of $9.3 million. The 13 basis point
improvement in the earning asset yield, from 8.01% to 8.14%, was entirely due to
higher rates earned on loans during 1996. A higher yield on loans contributed
$4.9 million more to interest income in 1996 when compared to the prior year.
The increased yield earned on loans was primarily due to a change in the loan
portfolio mix from residential mortgages to higher yielding commercial and
consumer loans. Lower yields on federal funds sold and investment securities
resulted in $1.2 million less interest income than the prior year.

Interest expense decreased $20.2 million or 11.1% compared to last year,
which increased 29.1% compared to 1994. Lower average savings and other
borrowing balances lessened interest expense by $2.7 million and $4.6 million,
respectively, and were responsible for 97.2% of the total decline caused by
fewer outstandings. Lower rates paid on all interest bearing liabilities
resulted in a $12.7 million decline in 1996 interest expense. Reduced rates paid
on other borrowings lowered interest expense by $6.1 million, or 48.0% of the
total drop in interest expense caused by decreased interest rates. Lower savings
rates accounted for another $3.3 million or 26.1% of the decline in interest
expense due to lower deposit yields.

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.

13
<PAGE> 15

The net interest margin for 1996 was 4.98% compared to 4.56% in 1995 and
4.71% in 1994. As mentioned earlier in this discussion, even though interest
rates were lower in 1996, the yield on earning assets increased due to a shift
in FirstMerit's loan portfolio toward higher yielding commercial and consumer
loans. The cost of funding the earning assets decreased 29 basis points from
4.18% in 1995 to 3.89% in 1996. The combination of a higher yield on earning
assets and a lower cost of funding boosted the Corporation's net interest income
and net interest margin significantly, and was principally responsible for the
increases in both categories as earning assets declined 2.9% during the year.

<TABLE>
<CAPTION>
1996 1995 1994
---------- --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Net interest income............................ $ 250,972 235,694 230,837
Tax equivalent adjustment...................... 3,043 3,840 4,590
---------- --------- ---------
Net interest income -- FTE..................... $ 254,015 239,534 235,427
========== ========= =========
Average earning assets......................... $5,095,929 5,249,598 4,993,972
---------- --------- ---------
Net interest margin............................ 4.98% 4.56% 4.71%
========== ========= =========
</TABLE>

OTHER INCOME

Other income totaled $82.5 million in 1996, an increase of $14.0 million or
20.4% over 1995 and 16.8% over 1994.

<TABLE>
<CAPTION>
1996 1995 1994
------- ------ ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Trust fees............................................. $12,182 10,712 13,423
Service charges on deposits............................ 24,372 20,622 20,482
Credit card fees....................................... 11,415 9,372 8,254
Service fees -- other.................................. 6,184 5,724 5,395
Mortgage sales and servicing........................... 4,863 3,236 1,817
Securities gains (losses).............................. (1,776) 539 653
Other operating income................................. 25,256 18,312 20,632
------- ------ ------
$82,496 68,517 70,656
======= ====== ======
</TABLE>

Trust fees increased $1.5 million or 13.7% to $12.2 million in 1996. Trust
fees for 1994 included nonrecurring fees of approximately $2.5 million. Service
charges on deposits rose $3.8 million or 18.2% compared to last year.
Contributing to the increase was the implementation of standard service charges
and procedures among affiliate banks as well as changes to the deposit product
lines. Service charges accounted for 35.4% of total other income when net gains
from sales of affiliate branches and FirstMerit Bank, N.A. in Clearwater,
Florida are excluded. Credit card fees increased $2.0 million during 1996
further illustrating the shift of the Corporation's loan portfolio from
residential mortgage loans to consumer and commercial credits.

Income from mortgage sales and servicing rose $1.6 million, or 50.3%, to
$4.9 million for the year. The net increase was a result of implementation of
Statement of Financial Accounting Standards No. 122 "Accounting for Mortgage
Servicing Rights," which added $2.3 million in 1996, and fewer loan sales during
the year, compared to 1995, which lowered this category by approximately $0.7
million. The Corporation's practice is to sell all fixed rate thirty year
residential mortgage loans originated while retaining the servicing for these
loans.

Securities losses were $1.8 million for 1996 compared to gains of $0.5
million in 1995. The Corporation sold certain securities at a loss, principally
in the fourth quarter, to reinvest the proceeds into higher yielding assets for
1997 and future years.

14
<PAGE> 16

Other operating income was $25.3 million, $7.0 million higher than the
$18.3 million earned in 1995. Net gains on sales of affiliate branches accounted
for $13.2 million and the sale of FirstMerit Bank, N.A. in Clearwater, Florida
added another $0.5 million to 1996's total.

Total other income, excluding the net gain on branch sales of $13.2
million, covered 34.7% of other expenses, excluding the Savings Association
Insurance Fund ("SAIF") recapitalization charge of $10.2 million. Adjusted
coverage ratios for 1995 and 1994 were 30.1% and 36.5%, respectively. Unusual
charges for both 1996 and 1995 are discussed in more detail in the "Other
Expense" section of this Annual Report as well as in Note 18 to the consolidated
financial statements.

OTHER EXPENSES

Other expenses were $209.7 million in 1996 compared to $227.8 million in
1995 and $193.4 million in 1994. Both 1996 and 1995 contained unusual charges.
In 1996, the Corporation recorded a $10.2 million SAIF recapitalization charge.
Excluding the one-time SAIF assessment, other expenses would have been $199.5
million. Other expenses for 1995 included nonrecurring costs associated with an
early retirement program, the CIVISTA acquisition, and reengineering charges
that totaled $22.4 million. If unusual charges for both 1996 and 1995 are not
considered, other expenses for 1996 were $5.9 million less than the comparable
1995 total.

OTHER EXPENSES

<TABLE>
<CAPTION>
1996 1995 1994
-------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Salaries and wages.................................. $ 72,572 80,501 75,476
Pension and benefits................................ 21,982 27,234 23,273
-------- ------- -------
Salaries, wages, pension and benefits............... 94,554 107,735 98,749
Net occupancy expense............................... 17,468 16,598 13,446
Equipment expense................................... 12,894 13,417 12,231
Taxes, other than federal income taxes.............. 6,625 6,026 6,995
Stationery, supplies and postage.................... 10,862 10,777 8,808
Bankcard, loan processing, and other fees........... 12,789 11,422 9,557
Advertising......................................... 6,866 5,766 3,191
Professional services............................... 4,297 7,911 4,722
Telephone........................................... 3,654 3,807 3,095
FDIC assessment..................................... 12,943 7,052 9,833
Amortization of intangibles......................... 3,148 3,534 3,878
Other operating expenses............................ 23,602 33,734 18,905
-------- ------- -------
Total other expenses................................ $209,702 227,779 193,410
-------- ------- -------
</TABLE>

Salaries, wages, pension and benefits totaled $94.6 million in 1996, a
decline of $13.2 million or 12.2% from 1995 and 4.2% less than 1994. Included in
these costs for 1995 were severance and related charges of $4.1 million and an
early retirement charge of $3.9 million. Excluding these expenses, 1996
salaries, wages, pension and benefits were still $5.1 million or 5.1% less than
the prior year's adjusted total. The current year reduction was attributable to
the actions taken in 1995 to reengineer the Corporation's retail delivery
systems and consolidate back-room operations. In 1996, the Corporation spent
30.3 cents in benefits for every dollar of salary and wages compared to 30.5
cents in 1995, excluding the severance and early retirement charges, and 30.8
cents in 1994.

The Corporation has a benefit plan which presently provides postretirement
medical and life insurance for retired employees. The Corporation reserves the
right to terminate or make additional plan changes at any time. The
Corporation's accumulated postretirement benefit obligation (APBO) as of January
1, 1993 totaled $19.0 million, and is being amortized over twenty years at an
annual cost of $0.9 million.

Professional services totaled $4.3 million in 1996 compared to $7.9 million
in 1995 and $4.7 million in 1994. In 1995, external support groups were used to
help develop the reengineering plan to improve operating

15
<PAGE> 17

efficiencies, increase revenues and shareholder value, and to help train our
employees to effectively sell our new products and services.

On January 1, 1994, the FDIC implemented a risk-based assessment system for
depository institutions. Under the system, the annual assessment rate for each
insured institution is determined on the basis of both capital and supervisory
measures, and can range from 23 cents to 31 cents per one hundred dollars of
deposits. During the third quarter of 1995, the FDIC reduced the effective rate
of the annual assessment on Bank Insurance Fund ("BIF") deposits to
approximately 4 cents per one hundred dollars of deposits.

As mentioned earlier in this section, the Corporation's FDIC assessment for
1996 included a one-time recapitalization of the Savings Association Insurance
Fund totaling $10.2 million. Excluding the one-time charge, FDIC expense would
have been $2.7 million. The adjusted expense of $2.7 million is considerably
less than the 1995 and 1994 amounts due to the reduction in the effective rate
applicable to Bank Insurance Fund ("BIF") deposits.

Other operating expenses amounted to $23.6 million in 1996 compared to
$33.7 million last year and $18.9 million in 1994. Included in 1995 costs were
$4.6 million of severance payments and fees paid to financial advisors as part
of the CIVISTA acquisition as well as $6.6 million of reengineering charges for
the adjustment to the value of buildings, equipment and other assets.

FEDERAL INCOME TAX

Federal income tax expense totaled $35.1 million in 1996 compared to $34.0
million in 1995, when tax expense of $3.0 million associated with the
extraordinary gain is included, and $32.1 million in 1994. In 1996 the effective
federal income tax rate for the Corporation equaled 33.1% compared to 52.0% in
1995 and 31.0% in 1994.

The effective tax rate in 1995 was higher than normally seen due to the
recapture of the bad debt reserve totaling approximately $12.4 million, and the
nondeductibility of certain professional fees associated with the CIVISTA
acquisition.

INVESTMENT SECURITIES

The investment portfolio is maintained by the Corporation to provide
liquidity, earnings, and as a means of diversifying risk. In accordance with the
Financial Accounting Standards Board Statement No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," securities are required to be
classified as held-to-maturity, available-for-sale, or trading. All investment
securities are currently classified as availablefor-sale. In this
classification, adjustment to fair value of the securities available-for-sale in
the form of unrealized holding gains and losses, is excluded from earnings and
reported net of taxes in a separate component of shareholders' equity. The
adjustments to reduce fair value at December 31, 1996 and December 31, 1995 were
$3.4 million and $2.0 million, respectively. Higher interest rates at the end of
1996 accounted for the increase in the fair market adjustment.

At December 31, 1996, investment securities totaled $1,187.5 million
compared with $1,403.1 million one year earlier, a decline of 15.4%. Investment
securities totaled $1,610.4 million at the end of 1994.

During 1996 approximately $343.6 million in securities were sold for which
a net loss of $1.8 million was realized. The sales and resultant losses occurred
as the Corporation restructured portions of its investment portfolio.

A summary of investment securities' carrying value is presented below as of
December 31, 1996, 1995 and 1994. Presented with the summary is a maturity
distribution schedule with corresponding weighted average yields.

16
<PAGE> 18

CARRYING VALUE OF INVESTMENT SECURITIES

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------
1996 1995 1994
---------- --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
U.S. Treasury and Government agency
obligations.................................. $ 655,741 864,967 1,072,464
Obligations of states and political
subdivisions................................. 93,587 108,842 129,280
Mortgage-backed securities..................... 325,277 331,556 306,711
Other securities............................... 112,919 97,694 101,905
---------- --------- ---------
$1,187,524 1,403,059 1,610,360
========== ========= =========
</TABLE>

<TABLE>
<CAPTION>
OVER ONE YEAR OVER FIVE YEARS
ONE YEAR OR LESS THROUGH FIVE YEARS THROUGH TEN YEARS OVER TEN YEARS
------------------- ------------------- ------------------- -------------------
WEIGHTED WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE AVERAGE
AMOUNT YIELDS AMOUNT YIELDS AMOUNT YIELDS AMOUNT YIELDS
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury securities........... $ 85,403 5.67% 117,354 5.85% -- -- -- --
U.S. Government agency
obligations...................... 26,044 6.13% 176,782 6.04% 52,709 6.26% 197,449 6.14%
Obligations of states and
political subdivisions........... 32,337 6.91%* 34,397 7.32%* 19,026 8.11%* 7,827 9.20%*
Mortgage-backed securities......... 6,453 7.71% 27,830 6.35% 55,095 6.83% 235,899 7.04%
Other securities................... 1,063 7.73% 2,497 7.55% 1,356 6.04% 108,003 7.02%
-------- ---- ------- ---- ------- ---- ------- ----
$151,300 6.12% 358,860 6.14% 128,186 6.78% 549,178 6.74%
======== ==== ======= ==== ======= ==== ======= ====
Percent of total................... 12.74% 30.22% 10.79% 46.25%
======== ======= ======= =======
<FN>
- - ---------------

* Fully-taxable equivalent based upon federal income tax structure applicable at
December 31, 1996.
</TABLE>

The yield on the portfolio was 6.32% in 1996 compared to 6.37% in 1995 and
6.03% in 1994. The current year reduction in the investment portfolio funded
increases in loan portfolios and the sale of branch deposits.

LOANS

Total loans outstanding at December 31, 1996 decreased 3.0% compared to one
year ago or $3,656.0 million compared to $3,770.4 million. A breakdown by
category is presented below, along with a maturity summary of commercial,
financial and agricultural loans.

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Commercial, financial and
agricultural............ $ 748,858 588,864 467,428 430,118 423,170 403,238
Installments to
individuals............. 811,561 777,990 800,441 632,354 556,256 559,601
Real estate............... 1,936,342 2,223,561 2,261,283 2,016,491 2,031,969 2,014,305
Lease financing........... 159,237 179,951 158,737 56,903 19,399 17,213
---------- --------- --------- --------- --------- ---------
Total loans............. 3,655,998 3,770,366 3,687,889 3,135,866 3,030,794 2,994,357
Less allowance for
possible loan losses.... 49,336 46,840 35,834 35,030 31,592 26,162
---------- --------- --------- --------- --------- ---------
Net loans............... $3,606,662 3,723,526 3,652,055 3,100,836 2,999,202 2,968,195
========== ========= ========= ========= ========= =========
</TABLE>

17
<PAGE> 19

<TABLE>
<CAPTION>
DECEMBER 31, 1996
-------------------------
COMMERCIAL, FINANCIAL AND
AGRICULTURAL
-------------------------
<S> <C>
Due in one year or less......................................................... $ 398,435
Due after one year but within five years........................................ 236,507
Due after five years............................................................ 113,916
---------
Total....................................................................... $ 748,858
=========
Loans due after one year with interest at a predetermined fixed rate............ 151,582
Loans due after one year with interest at a floating rate....................... 198,841
---------
Total....................................................................... $ 350,423
=========
</TABLE>

Real estate loans at December 31, 1996 totaled $1,936.3 million or 53.0% of
total loans outstanding compared to 59.0% one year ago. Residential loans (1-4
family dwellings) totaled $998.8 million, home equity loans $196.4 million,
construction loans $126.4 million and commercial real estate loans $614.7
million. The year-end real estate totals point out the shift in the composition
of the Corporation's loan portfolio from residential real estate to higher
yielding commercial and consumer loans.

Commercial real estate loans include both commercial loans where real
estate has been taken as collateral as well as loans for commercial real estate.
The majority of commercial real estate loans are to owner occupants where cash
flow to service debt is derived from the occupying business cash flow instead of
normal building rents. These loans are generally part of an overall relationship
with existing customers primarily within northeast Ohio.

Consumer loans or loans to individuals increased 4.3% compared to last year
and accounted for 22.2% of total loans compared to 20.6% in 1995.

Commercial, financial, and agricultural loans increased 27.2% during 1996
and make-up 20.5% of total outstanding loans compared to 15.6% last year. Again,
the increase in consumer and commercial loans is evidence of FirstMerit's
shifting loan portfolio.

The decline in lease financing loans from $180.0 million in 1995 to $159.2
million at December 31, 1996 is primarily due to decreased originations in the
highly competitive auto lease business. Auto leases totaled $74.0 million with
equipment leasing totaling $81.8 million, and leveraged leases were $3.5 million
at year-end 1996.

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

ASSET QUALITY

Making a loan to earn an interest spread inherently includes taking the
risk of not getting repaid. Successful management of credit risk requires making
good underwriting decisions, carefully administering the loan portfolio and
diligently collecting delinquent accounts.

The Corporation's Credit Policy Division manages credit risk by
establishing common credit policies for its subsidiary banks, participating in
approval of their largest loans, conducting reviews of their loan portfolios,
providing them with centralized consumer underwriting, collections and loan
operations services, and overseeing their loan workouts.

The Corporation's objective is to minimize losses from its commercial
lending activities and to maintain consumer losses at acceptable levels that are
stable and consistent with growth and profitability objectives.

Effective December 31, 1995, the Corporation adopted Statement of Financial
Accounting Standard No. 114," Accounting by Creditors for Impairment of a Loan,"
and Statement No. 118, an amendment of Statement No. 114, "Accounting by
Creditors for Impairment of a loan -- Income Recognition and Disclosures." These
statements prescribe how the allowance for loan losses related to impaired loans
should be

18
<PAGE> 20

determined and the required disclosures. Impaired loans are loans for which,
based on current information or events, it is probable that a creditor will be
unable to collect all amounts due according to the contractual terms of the loan
agreement. Impaired loans must be valued based on the present value of the
loans' expected future cash flows at the loans' effective interest rates, at the
loans' observable market price, or the fair value of the loan collateral.

NON-PERFORMING ASSETS

Non-performing assets consist of :

- NON-ACCRUAL LOANS on which interest is no longer accrued because its
collection is doubtful.

- RESTRUCTURED LOANS on which, due to deterioration in the borrower's
financial condition, the original terms have been modified in favor of
the borrower or either principal or interest has been forgiven.

- OTHER REAL ESTATE (OREO) acquired through foreclosure in satisfaction of
a loan.

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------------
1996 1995 1994 1993 1992 1991
------- ------ ------ ------ ------ ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Impaired Loans:
Non-accrual................................. $ 9,579 7,373 10,517 N/A N/A N/A
Restructured................................ 92 1,548 2,026 N/A N/A N/A
------- ------ ------ ------ ------ ------
Total impaired loans...................... 9,671 8,921 12,543 N/A N/A N/A
Other Loans:
Non-accrual................................. 787 3,918 3,108 12,040 21,903 23,324
Restructured................................ -- -- -- 6,176 3,972 7,049
------- ------ ------ ------ ------ ------
Total Other non-performing loans.......... 787 3,918 3,108 18,216 25,875 30,373
------- ------ ------ ------ ------ ------
Total non-performing loans................ 10,458 12,839 15,651 18,216 25,875 30,373
------- ------ ------ ------ ------ ------
Other real estate owned....................... 118 1,059 10,393 8,637 18,750 17,305
Total non-performing assets............... 10,576 13,898 26,044 26,853 44,625 47,678
======= ====== ====== ====== ====== ======
Loans past due 90 days or more accruing
interest.................................... $ 8,380 7,252 3,569 4,122 6,593 5,843
======= ====== ====== ====== ====== ======
Total non-performing assets as a percent of
total loans................................. 0.29% 0.37% 0.70% 0.85% 1.46% 1.61%
======= ====== ====== ====== ====== ======
<FN>
- - ---------------

N/A = Not Available
</TABLE>

Under the Corporation's credit policies and practices, all non-accrual and
restructured commercial, agricultural, construction, and commercial real estate
loans, meet the definition of impaired loans under Statement No.'s 114 and 118.
Impaired loans as defined by Statements 114 and 118 exclude certain consumer
loans, residential real estate loans, and leases classified as non-accrual.
Consumer installment loans are charged off when they reach 120 days past due.
Credit card loans are charged off when they reach 180 days past due. When any
other loan becomes 90 days past due, it is placed on non-accrual status unless
it is well secured and in the process of collection. Any losses are charged
against the allowance for possible loan losses as soon as they are identified.

Non-performing assets at December 31, 1996 totaled $10.6 million, down from
$13.9 million in 1995 and $26.0 million in 1994. As a percentage of total loans
outstanding plus OREO, non-performing assets were 0.29% at year-end 1996
compared to 0.37% in 1995 and 0.70% in 1994. The average balances of impaired
loans for the years ended December 31, 1996 and 1995 were $9.3 million and $10.7
million, respectively.

For the year ended December 31, 1996, impaired assets earned $622,000 in
interest income. Had they not been impaired, they would have earned $1.2
million. For the same period, total non-performing loans earned $662,000 in
interest income. Had they paid in accordance with the payment terms in force
prior to being considered impaired, on non-accrual status, or restructured, they
would have earned $1.3 million.

In addition to non-performing loans and loans 90 days past due and still
accruing interest, Management identified potential problem loans totaling $23.7
million at December 31, 1996. These loans are closely

19
<PAGE> 21

monitored for any further deterioration in the borrowers' financial condition
and for the borrowers' ability to comply with terms of the loans.

ALLOWANCE FOR POSSIBLE LOAN LOSSES

The Corporation maintains what Management believes is an adequate allowance
for possible loan losses. The Parent Company and the subsidiary banks regularly
analyze the adequacy of their allowances through ongoing reviews of trends in
risk ratings, delinquencies, non-performing assets, charge-offs, economic
conditions, and changes in the composition of the loan portfolio.

At year end the Corporation boosted its allowance for possible loan losses
in response to the continuing shift of its portfolio out of residential mortgage
loans and into commercial and consumer loans, which historically have exhibited
higher loss rates. During the year, consumer delinquencies continued at high
levels and losses in the consumer portfolio were higher than in the recent past.
Management felt it was prudent to increase the allowance at year end to ensure
its adequacy for changes that have occurred and will continue to occur in the
loan portfolio.

At December 31, 1996, the allowance was $49.3 million or 1.35% of loans
outstanding compared to $46.8 million or 1.24% in 1995 and $35.8 million or
0.97% in 1994. The allowance equaled 471.75% of non-performing loans at December
31, 1996 compared to 364.8% in 1995. The allowance for possible loan losses
related to impaired loans at December 31, 1996 and December 31, 1995 totaled
$1,913,000 and $676,000, respectively.

Net charge-offs were $15.3 million in 1996 compared to $8.8 million in 1995
and $3.8 million in 1994. As a percentage of average loans outstanding, net
charge-offs equaled 0.40% in 1996, 0.23% in 1995 and 0.11% in 1994. Losses are
charged against the allowances as soon as they are identified.

A six-year summary of activity follows:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991
---------- --------- --------- --------- --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Allowance for possible loan losses at
beginning of year........................ $ 46,840 35,834 35,030 31,592 26,162 24,840
Loans charged off:
Commercial, financial and agricultural... 2,665 3,145 1,479 1,686 5,887 3,553
Installment to individuals............... 16,637 8,578 5,476 5,936 7,950 7,197
Real estate.............................. 224 883 720 977 3,625 3,539
Lease financing.......................... 1,315 319 20 28 229 230
Decrease from sale of subsidiary......... 389 -- -- -- -- --
---------- --------- --------- --------- --------- ---------
Total.................................. 21,230 12,925 7,695 8,627 17,691 14,519
---------- --------- --------- --------- --------- ---------
Recoveries:
Commercial, financial and agricultural... 450 569 719 1,334 1,068 711
Installment to individuals............... 5,117 3,382 3,029 2,548 2,518 2,250
Real estate.............................. 202 129 106 95 528 110
Lease financing.......................... 206 88 21 32 42 20
---------- --------- --------- --------- --------- ---------
Total.................................. 5,975 4,168 3,875 4,009 4,156 3,091
---------- --------- --------- --------- --------- ---------
Net charge-offs............................ 15,255 8,757 3,820 4,618 13,535 11,428
---------- --------- --------- --------- --------- ---------
Provision for possible loan losses......... 17,751 19,763 4,624 8,056 18,965 12,750
---------- --------- --------- --------- --------- ---------
Allowance for possible loan losses at end
of year.................................. $ 49,336 $ 46,840 35,834 35,030 31,592 26,162
========== ========= ========= ========= ========= =========
Average loans outstanding.................. $3,812,900 3,818,486 3,350,162 3,104,406 3,000,216 2,930,129
========== ========= ========= ========= ========= =========
Ratio to average loans:
Net charge-offs.......................... 0.40% 0.23% 0.11% 0.15% 0.45% 0.39%
Provision for possible loan losses....... 0.47% 0.52% 0.14% 0.26% 0.63% 0.44%
Allowance for possible loan losses at end
of year................................ 1.29% 1.23% 1.07% 1.13% 1.05% 0.89%
========== ========= ========= ========= ========= =========
Loans outstanding at end of year........... $3,655,998 3,770,366 3,687,889 3,135,866 3,030,794 2,994,357
========== ========= ========= ========= ========= =========
Allowance for possible loan losses:
As a percent of loans outstanding at end
of year................................ 1.35% 1.24% 0.97% 1.12% 1.04% 0.87%
As a multiple of net charge-offs......... 3.23 5.35 9.38 7.59 2.33 2.29
========== ========= ========= ========= ========= =========
</TABLE>

20
<PAGE> 22

ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
-------------------------
ALLOWANCE
AS PERCENT OF
LOAN CATEGORY
AMOUNT OUTSTANDINGS
------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Commercial, financial, and agricultural...................... $14,962 2.00%
Real estate.................................................. 11,784 0.61%
Installment.................................................. 21,303 2.62%
Lease financing.............................................. 1,287 0.81%
------- ------
$49,336
=======
</TABLE>

DEPOSITS

Average deposits for 1996 totaled $4,363.8 million, a decrease of 1.9% and
1.8% compared to 1995 and 1994 levels, respectively. Sales of affiliate branches
and their respective deposits, and the strength of the stock market during 1996
were factors in the overall decline in deposit balances. The success of the
Corporation's "free-checking" campaigns brought in additional demand deposits
that partially offset the overall decline in deposits and contributed to an
improved cost of funds and net interest margin.

As market interest rates decreased during the year, and the stock market
strengthened, savings deposits were withdrawn and reinvested in equity funds not
held by the Corporation. Specifically, the decline in average savings deposits
from $1,514.4 million in 1995 to $1,399.0 million in 1996 accounted for more
than 100% of the decline in total average deposits.

Average demand deposits, including both interest-bearing and
noninterest-bearing categories, totaled $1,192.6 million for the year, an
increase of 3.5% over last year's average. Additionally, the average rate paid
on interest-bearing demand deposits decreased 41 basis points to 1.75%. The
combination of higher demand deposit balances and a lower yield contributed
positively to the Corporation's decrease in total cost of funds.

Certificates and other time deposits ("CDs") averaged $1,772.2 million for
1996, down less than one percent from 1995's average of $1,782.8 million. The
average yield paid on CDs declined 9 basis points from 5.47% in 1995 to 5.38% in
1996.

CDs accounted for 40.6% of average deposits in 1996 compared to 40.1% in
1995. Savings equaled 32.1% and 34.0% in 1996 and 1995, respectively, and demand
deposits, both interest and non-interest bearing, were 27.3% and 25.9%,
respectively.

The average cost of deposits and other borrowings was down 29 basis points
compared to one year ago, or 3.89% in 1996 compared to 4.18% last year.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------
1996 1995 1994
-------------------- ------------------- -------------------
AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE RATE BALANCE RATE BALANCE RATE
---------- ------- --------- ------- --------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Demand deposits--
non-interest bearing........ $ 745,102 -- 725,287 -- 666,469 --
Demand deposits--
interest bearing............ 447,524 1.75% 426,608 2.16% 460,994 2.26%
Savings deposits.............. 1,399,011 2.32% 1,514,374 2.54% 1,710,909 2.54%
Certificates and
other time deposits......... 1,772,150 5.38% 1,782,817 5.47% 1,607,616 4.26%
---------- --------- ---------
$4,363,787 4,449,086 4,445,988
========== ========= =========
</TABLE>

21
<PAGE> 23

The following table summarizes the certificates and other time deposits in
amounts of $0.1 million or more as of December 31, 1996, by time remaining until
maturity.

<TABLE>
<CAPTION>
AMOUNT
--------
<S> <C>
Maturing in:
Under 3 months.................................................................... $160,000
3 to 6 months..................................................................... 44,658
6 to 12 months.................................................................... 31,505
Over 12 months.................................................................... 35,471
---------
$271,634
=========
</TABLE>

INTEREST RATE SENSITIVITY

Interest rate sensitivity measures the potential exposure of earnings and
capital to changes in market interest rates. The Corporation has a policy which
provides guidelines in the management of interest rate risk. This policy is
reviewed periodically to ensure it complies to trends within the financial
markets and within the industry.

The analysis presented below divides interest bearing assets and
liabilities into maturity categories and measures the "GAP" between maturing
assets and liabilities in each category. The Corporation analyzes the historical
sensitivity of its interest bearing transaction accounts to determine the
portion which it classifies as interest rate sensitive versus the portion
classified over one year. The analysis shows that liabilities maturing within
one year exceed assets maturing within the same period by a moderate amount. The
Corporation uses the GAP analysis and other tools to monitor rate risk.

At December 31, 1996 the Corporation was in a moderate asset-sensitive
position as illustrated in the following table:

<TABLE>
<CAPTION>
31-60 61-90 91-180 181-365 OVER 1
1-30 DAYS DAYS DAYS DAYS DAYS YEAR TOTAL
---------- -------- -------- ------- ------- --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Interest Earning Assets:
Loans and leases................. $1,289,843 37,516 65,118 139,295 310,780 1,764,110 3,606,662
Investment securities............ 120,688 17,937 52,608 83,324 137,389 775,578 1,187,524
Federal funds sold............... 15,450 100 -- -- -- -- 15,550
---------- -------- -------- ------- ------- --------- ---------
Total Interest Earning Assets...... $1,425,981 55,553 117,726 222,619 448,169 2,539,688 4,809,736
---------- -------- -------- ------- ------- --------- ---------
Interest-Bearing Liabilities:
Demand -- Interest bearing....... $ 2,548 2,548 2,614 -- -- 442,477 450,187
Savings.......................... 108,841 108,841 119,188 -- -- 972,405 1,309,275
Certificates and other time
deposits....................... 324,023 146,905 120,075 304,352 337,884 412,403 1,645,642
Securities sold under agreement
to repurchase and other
borrowings..................... 379,603 37 6,180 256 20,525 17,100 423,701
---------- -------- -------- ------- ------- --------- ---------
Total Interest Bearing
Liabilities...................... $ 815,015 258,331 248,057 304,608 358,409 1,844,385 3,828,805
---------- -------- -------- ------- ------- --------- ---------
Total GAP.......................... $ 610,966 (202,778) (130,331) (81,989) 89,760 695,303 980,931
========== ======== ======== ======= ======= ========= =========
Cumulative GAP..................... $ 610,966 $408,188 277,857 195,868 285,628 980,931
========== ======== ======== ======= ======= =========
</TABLE>

CAPITAL RESOURCES

Shareholders' equity at December 31, 1996 totaled $523.7 million compared
to $542.9 million at December 31, 1995, a decrease of 3.5%. The Corporation's
stock repurchase program, detailed in the "Earnings Summary" portion of
Management's Discussion and Analysis, reduced equity during 1996.

22
<PAGE> 24

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
----------------------------------------------------------
1996 1995 1994
---------------- ---------------- ----------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Total equity............................ $523,707 10.02% 542,881 9.70% 523,319 9.14%
Common equity........................... 523,707 10.02% 542,881 9.70% 523,319 9.14%
Tangible common equity (a.)............. 519,950 9.95% 536,934 9.60% 504,337 8.84%
Tier 1 capital (b.)..................... 523,911 12.63% 538,032 14.53% 537,999 15.32%
Total risk-based capital (c.)........... 573,247 13.82% 584,872 15.80% 573,833 16.34%
Leverage (d.)........................... 523,911 9.63% 538,032 9.66% 537,999 9.53%
<FN>
- - ---------------

a) Common equity less all intangibles; computed as a ratio to total assets less
intangible assets.

b) Shareholders' equity less goodwill; computed as a ratio to risk-adjusted
assets, as defined in the 1992 risk-based capital guidelines/

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

d) Tier 1 capital; computed as a ratio to the latest quarter's average assets
less goodwill.
</TABLE>

The Federal Deposit Insurance Corporation Act of 1991 ("FDICIA") set
capital guidelines for a financial institution to be considered
"well-capitalized." These guidelines require a risk-based capital ratio of 10%,
a Tier I capital ratio of 6% and a leverage ratio of 5%. At December 31, 1996,
the Corporation's risk-based capital equaled 13.82% of risk-adjusted assets, its
Tier I capital ratio equaled 12.63% and its leverage ratio equaled 9.63%.

The Corporation's Board of Directors declared a 2-for-1 split of the
Corporation's common stock on August 19, 1993. The split was paid to
shareholders of record as of August 30, 1993.

During 1996, the Corporation's Directors increased the quarterly cash
dividend, marking the fifteenth consecutive year of annual increases since the
Corporation's formation in 1981. The cash dividend of $.29 paid has an indicated
annual rate of $1.16 per share. Over the past five years the dividend has
increased at an annual rate of approximately 8%.

LIQUIDITY

The Corporation's primary source of liquidity is its strong core deposit
base, raised through its retail branch system, along with a strong capital base.
These funds, along with investment securities, provide the ability to meet the
needs of depositors while funding new loan demand and existing commitments.

The banking subsidiaries individually maintain sufficient liquidity in the
form of temporary investments and a short-term maturity structure within the
investment portfolio, along with cash flow from loan repayment. Asset growth in
the banking subsidiaries is funded by the growth of core deposits.

Reliance on borrowed funds decreased during the year as maturing investment
portfolio securities were used to fund deposit withdrawals and repay borrowings.
During the year, the Corporation sold, for liquidity purposes, approximately
$200 million of fixed and adjustable rate residential real estate loans. The
loan sales improved liquidity while restructuring the balance sheet to higher
yielding assets.

The liquidity needs of the Parent Company, primarily cash dividends and
other corporate purposes, are met through cash, short-term investments and
dividends from banking subsidiaries.

Management is not aware of any trend or event, other than noted above,
which will result in or that is reasonably likely to occur that would result in
a material increase or decrease in the Corporation's liquidity.

REGULATION AND SUPERVISION

A strict uniform system of capital-based regulation of financial
institutions became effective on December 19, 1992. Under this system, there are
five different categories of capitalization, with "prompt corrective actions"
and significant operational restrictions imposed on institutions that are
capital deficient

23
<PAGE> 25

under the categories. The five categories are: well capitalized, adequately
capitalized, undercapitalized, significantly undercapitalized and critically
undercapitalized.

To be considered well capitalized an institution must have a total
risk-based capital ratio of at least 10%, a Tier I capital ratio of at least 6%,
a leverage capital ratio of 5%, and must not be subject to any order or
directive requiring the institution to improve its capital level. An adequately
capitalized institution has a total risk-based capital ratio of at least 8%, a
Tier I capital ratio of at least 4% and a leverage capital ratio of at least 4%.
Institutions with lower capital levels are deemed to be undercapitalized,
significantly undercapitalized or critically undercapitalized, depending on
their actual capital levels. The appropriate federal regulatory agency may also
downgrade an institution to the next lower capital category upon a determination
that the institution is in an unsafe or unsound practice. Institutions are
required to monitor closely their capital levels and to notify their appropriate
regulatory agency of any basis for a change in capital category. At December 31,
1996, the Parent Company and its subsidiaries all exceeded the minimum capital
levels of the adequately capitalized category.

EFFECTS OF INFLATION

The assets and liabilities of the Corporation are primarily monetary in
nature and are more directly affected by the fluctuation in interest rates than
inflation. Movement in interest rates is a result of the perceived changes in
inflation as well as monetary and fiscal policies. Interest rates and inflation
do not move with the same velocity or within the same time frame, therefore, a
direct relationship to the inflation rate cannot be shown. The financial
information presented in this annual report, based on historical data, has a
direct correlation to the influence of market levels of interest rates.
Therefore, Management believes that there is no material benefit in presenting a
statement of financial data adjusted for inflationary changes.

FORWARD-LOOKING STATEMENTS -- SAFE HARBOR STATEMENT

Information in the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" section above and within this report, which
is not historical or factual in nature, and which relates to expectations for
future shifts in loan portfolio to consumer and commercial loans, increase in
core deposit base, allowance for loan losses, demands for FirstMerit services
and products, future services and products to be offered, increased numbers of
customers, and like items, constitute forward-looking statements that involve a
number of risks and uncertainties. The following factors are among the factors
that could cause actual results to differ materially from the forward-looking
statements: general economic conditions, including their impact on capital
expenditures; business conditions in the banking industry; the regulatory
environment; rapidly changing technology and evolving banking industry
standards; competitive factors, including increased competition with regional
and national financial institutions; new service and product offerings by
competitors and price pressures; and like items.

FirstMerit cautions that any forward-looking statements contained in this
report, in a report incorporated by reference to this report, or made by
management of FirstMerit in this report, in other reports and filings, in press
releases and in oral statements, involve risks and uncertainties and are subject
to change based upon the factors listed above and like items. Actual results
could differ materially from those expressed or implied, and therefore the
forward-looking statements should be considered in light of these factors.
FirstMerit may from time to time issue other forward-looking statements.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements and accompanying notes, and the
reports of management and independent auditors, are set forth immediately
following Item 9 of this Report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

FirstMerit has had no disagreement with its accountants on accounting and
financial disclosure matters and has not changed accountants during the two year
period ending December 31, 1996.

24
<PAGE> 26

CONSOLIDATED BALANCE SHEETS

FIRSTMERIT CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
1996 1995
---------- -----------
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Investment securities (at market value)............................ $1,187,524 1,403,059
Federal funds sold................................................. 15,550 12,575
Loans.............................................................. 3,655,998 3,770,366
Less allowance for possible loan losses............................ 49,336 46,840
---------- ---------
Net loans....................................................... 3,606,662 3,723,526
---------- ---------
Total earning assets............................................ 4,809,736 5,139,160
---------- ---------
Cash and due from banks............................................ 222,164 287,671
Premises and equipment, net........................................ 102,139 94,158
Accrued interest receivable and other assets....................... 93,941 75,532
---------- ---------
$5,227,980 5,596,521
========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand-non-interest bearing..................................... $ 799,771 810,948
Demand-interest bearing......................................... 450,187 432,409
Savings......................................................... 1,309,275 1,454,876
Certificates and other time deposits............................ 1,645,642 1,803,692
---------- ---------
Total deposits.................................................. 4,204,875 4,501,925
---------- ---------
Securities sold under agreements to repurchase and other
borrowings...................................................... 423,701 486,958
Accrued taxes, expenses, and other liabilities..................... 75,697 64,757
---------- ---------
Total liabilities............................................... 4,704,273 5,053,640
---------- ---------
Commitments and contingencies...................................... -- --
Shareholders' equity:
Preferred stock, without par value: authorized and unissued
7,000,000 shares............................................... -- --
Common stock, without par value: authorized 80,000,000 shares;
issued 33,859,875 and 33,614,487 shares, respectively.......... 107,343 103,861
Treasury stock, 1,903,482 and 122,870 shares, respectively...... (59,258) (2,963)
Net unrealized holding (losses) on available for sale
securities..................................................... (2,217) (1,292)
Retained earnings............................................... 477,839 443,275
---------- ---------
Total shareholders' equity...................................... 523,707 542,881
---------- ---------
$5,227,980 5,596,521
========== =========
</TABLE>

See accompanying notes to consolidated financial statements.

25
<PAGE> 27

CONSOLIDATED STATEMENTS OF INCOME

FIRSTMERIT CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------
1996 1995 1994
-------- -------- --------
(IN THOUSANDS EXCEPT PER SHARE
DATA)
<S> <C> <C> <C>
Interest income:
Interest and fees on loans............................... $330,309 325,763 274,498
Interest and dividends on investment securities:
Taxable............................................... 75,498 82,836 86,941
Exempt from federal income taxes...................... 5,004 6,347 7,411
-------- -------- --------
80,502 89,183 94,352
Interest on federal funds sold........................... 934 1,681 2,168
-------- -------- --------
Total interest income................................. 411,745 416,627 371,018
-------- -------- --------
Interest expense:
Interest on deposits:
Demand-interest bearing............................... 7,839 9,202 10,429
Savings............................................... 32,446 38,438 43,372
Certificates and other time deposits.................. 95,379 97,518 68,528
Interest on securities sold under agreements to
repurchase and other borrowings....................... 25,109 35,775 17,852
-------- -------- --------
Total interest expense................................ 160,773 180,933 140,181
-------- -------- --------
Net interest income................................... 250,972 235,694 230,837
Provision for possible loan losses......................... 17,751 19,763 4,624
-------- -------- --------
Net interest income after provision for possible loan
losses.............................................. 233,221 215,931 226,213
-------- -------- --------
Other income:
Trust department......................................... 12,182 10,712 13,423
Service charges on deposits.............................. 24,372 20,622 20,482
Credit card fees......................................... 11,415 9,372 8,254
Investment securities gains (losses), net................ (1,776) 539 653
Other operating income................................... 36,303 27,272 27,844
-------- -------- --------
Total other income.................................... 82,496 68,517 70,656
-------- -------- --------
Other expenses:
Salaries, wages, pension and employee benefits........... 94,554 107,735 98,749
Net occupancy expense.................................... 17,468 16,598 13,446
Equipment expense........................................ 12,894 13,417 12,231
Other operating expenses................................. 84,786 90,029 68,984
-------- -------- --------
Total other expenses.................................. 209,702 227,779 193,410
-------- -------- --------
Income before federal income taxes and extraordinary
item................................................ 106,015 56,669 103,459
Federal income taxes....................................... 35,075 30,950 32,110
-------- -------- --------
Income before extraordinary item...................... 70,940 25,719 71,349
-------- -------- --------
Extraordinary item -- gain on disposition of assets after
business combination (net of income tax effect of
$3,015).................................................. -- 5,599 --
-------- -------- --------
Net income............................................ $ 70,940 31,318 71,349
======== ======== ========
Weighted average number of common shares outstanding....... 32,608 33,454 33,289
======== ======== ========
Per share data based on average number of shares
outstanding:
Income before extraordinary item...................... $ 2.18 0.77 2.14
Extraordinary item.................................... -- 0.17 --
-------- -------- --------
Net income per share....................................... $ 2.18 0.94 2.14
======== ======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

26
<PAGE> 28

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

FIRSTMERIT CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
--------------------------------------------------------------------
NET UNREALIZED
HOLDING (LOSSES) TOTAL
COMMON TREASURY AVAILABLE-FOR- RETAINED SHAREHOLDERS'
STOCK STOCK SALE SECURITIES EARNINGS EQUITY
-------- -------- ------------------- -------- -------------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1993..... $ 96,593 (601) -- 404,129 500,121
Net income..................... -- -- -- 71,349 71,349
Cash dividends ($.98 per
share)...................... -- -- -- (28,836) (28,836)
Stock options exercised........ 3,983 -- -- -- 3,983
Treasury shares purchased...... -- (93) -- -- (93)
Market adjustment investment
securities.................. -- -- (23,205) -- (23,205)
-------- ------- ------- ------- -------
Balance at December 31, 1994..... 100,576 (694) (23,205) 446,642 523,319
Net income..................... -- -- -- 31,318 31,318
Cash dividends ($1.02 per
share)...................... -- -- -- (35,299) (35,299)
Stock options exercised........ 3,285 -- -- -- 3,285
Treasury shares purchased...... -- (2,269) -- -- (2,269)
Market adjustment investment
securities.................. -- -- 21,913 -- 21,913
Acquisition adjustment of
fiscal year................. -- -- -- 614 614
-------- ------- ------- ------- -------
Balance at December 31, 1995..... 103,861 (2,963) (1,292) 443,275 542,881
Net income..................... -- -- -- 70,940 70,940
Cash dividends ($1.10 per
share)...................... -- -- -- (36,376) (36,376)
Stock options exercised........ 3,482 -- -- -- 3,482
Treasury shares purchased...... -- (56,295) -- -- (56,295)
Market adjustment investment
securities.................. -- -- (925) -- (925)
Acquisition adjustment of
fiscal year................. -- -- -- -- 0
-------- ------- ------- ------- -------
Balance at December 31, 1996..... $107,343 (59,258) (2,217) 477,839 523,707
======== ======= ======= ======= =======
</TABLE>

See accompanying notes to consolidated financial statements.

27
<PAGE> 29

CONSOLIDATED STATEMENTS OF CASH FLOWS

FIRSTMERIT CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------
1996 1995 1994
--------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income.................................................. $ 70,940 31,318 71,349
Adjustments to reconcile net income to net cash provided by
operating activities:
Provision for possible loan losses..................... 17,751 19,763 4,624
Provision for depreciation and amortization............ 10,120 8,862 8,353
Amortization of investment securities premiums, net.... 4,491 2,592 3,188
Amortization of income for lease financing............. (12,656) (8,586) (6,810)
(Gains) losses on sales of investment securities,
net.................................................. 1,776 (539) (653)
Extraordinary gain on dispositions..................... -- (5,599) --
Gain on sale of affiliate branches..................... (13,210) -- --
Deferred federal income taxes.......................... 15,549 2,305 11,172
(Increase) decrease in interest receivable............. 2,657 2,356 (5,002)
Increase in interest payable........................... 183 5,913 3,698
Amortization of values ascribed to acquired
intangibles.......................................... 3,148 3,153 3,878
Other increases (decreases)............................ (28,508) 41,282 (22,043)
--------- -------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES................... 72,241 102,820 71,752
--------- -------- --------
INVESTING ACTIVITIES
Dispositions of investment securities:
Available-for-sale -- sales............................... 343,600 98,688 56,673
Held-to-maturity -- maturities............................ -- 432,729 389,234
Available-for-sale -- maturities.......................... 301,468 200,895 184,294
Purchases of investment securities held-to-maturity......... -- (55,507) (263,518)
Purchases of investment securities available-for-sale....... (437,223) (437,840) (435,630)
Net (increase) decrease in federal funds sold............... (2,975) 1,125 60,888
Net (increase) decrease in loans and leases................. 111,769 (82,646) (549,033)
Purchases of premises and equipment......................... (22,405) (27,949) (17,255)
Sales of premises and equipment............................. 4,304 16,766 3,234
Sales of affiliate branches................................. 13,210 -- --
--------- -------- --------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES............ 311,748 146,259 (571,113)
--------- -------- --------
FINANCING ACTIVITIES
Net decrease in demand, NOW and savings deposits............ (139,000) (143,226) (21,539)
Net increase (decrease) in time deposits.................... (158,050) 103,694 133,315
Net increase (decrease) in securities sold under repurchase
agreements and other borrowings........................... (63,257) (125,666) 412,726
Cash dividends.............................................. (36,376) (35,299) (28,836)
Purchase of treasury shares................................. (56,295) (2,269) (93)
Proceeds from exercise of stock options..................... 3,482 3,285 3,983
--------- -------- --------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES............ (449,496) (199,481) 499,556
Increase (decrease) in cash and cash equivalents............ (65,507) 49,598 195
--------- -------- --------
Cash and cash equivalents at beginning of year.............. 287,671 238,073 237,878
--------- -------- --------
Cash and cash equivalents at end of year.................... $ 222,164 287,671 238,073
========= ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Amortized cost of the held-to-maturity investment portfolio
transferred to the available-for-sale portfolio........... $ -- 578,624 --
========= ======== ========
Cash paid during the year for:
Interest, net of amounts capitalized................... $ 91,158 100,740 97,836
Income taxes........................................... $ 18,293 22,099 31,100
========= ======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

28
<PAGE> 30

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FIRSTMERIT CORPORATION AND SUBSIDIARIES

DECEMBER 31, 1996, 1995 AND 1994

(DOLLARS IN THOUSANDS)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting and reporting policies of FirstMerit Corporation and its
subsidiaries (the "Corporation") conform to generally accepted accounting
principles and to general practices within the banking industry. The
Corporation's activities are considered to be a single industry segment for
financial reporting purposes. The following is a description of the more
significant accounting policies:

(a) Principles of Consolidation

The consolidated financial statements include the accounts of
FirstMerit Corporation (the "Parent Company") and its wholly-owned
subsidiaries: Citizens Investment Corporation, Citizens National Bank,
Citizens Savings Corporation of Stark County, EST National Bank, First
National Bank of Ohio, FirstMerit Community Development Corporation,
FirstMerit Credit Life Insurance Company, Old Phoenix National Bank of
Medina, Peoples Bank, N.A., and Peoples National Bank. The results of
operations of two former wholly-owned subsidiaries, FirstMerit Bank,
N.A. and FirstMerit Trust Company, N.A., are included in the
consolidated statements of income through December 30, 1996. These
former subsidiaries were sold December 31, 1996. All significant
intercompany balances and transactions have been eliminated in
consolidation.

(b) Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial
statements and related notes. Actual results could differ from those
estimates.

Debt and equity securities are classified as held-to-maturity,
available-for-sale, or trading. Securities classified as
held-to-maturity are measured at amortized or historical cost,
securities available-for-sale and trading at fair value. Adjustment to
fair value of the securities available-for-sale, in the form of
unrealized holding gains and losses, is excluded from earnings and
reported net of tax as a separate component of shareholders' equity.
Adjustment to fair value of securities classified as trading is
included in earnings. Gains or losses on the sales of investment
securities are recognized upon realization and are determined by the
specific identification method.

Effective December 31, 1995, the Corporation designated the entire
investment portfolio as available-for-sale. Classification as
available-for-sale allows the Corporation to sell securities to fund
liquidity and manage the Corporation's interest rate risk.

Prior to December 31, 1995, the Corporation had designated a portion
of its investment portfolio as held-to-maturity. The Corporation does
not maintain a trading account.

(d) Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand, balances on deposit
with correspondent banks and checks in the process of collection.

(e) Premises and Equipment

Premises and equipment are stated at cost less accumulated
depreciation and amortization. Depreciation is computed on the
straight-line and declining balance methods over the estimated useful
lives of the assets. Amortization of leasehold improvements is
computed on the straight-line method based on lease terms or useful
lives, whichever is less.

29
<PAGE> 31

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FIRSTMERIT CORPORATION AND SUBSIDIARIES

(f) Loans

Impaired loans are loans for which, based on current information or
events, it is probable that the Corporation will be unable to collect
all amounts due according to the contractual terms of the loan
agreement. Impaired loans are valued based on the present value of the
loans' expected future cash flows at the loans' effective interest
rates, at the loans' observable market price, or the fair value of the
loan collateral.

(g) Interest and Fees on Loans

Interest income on loans is generally accrued on the principal
balances of loans outstanding using the "simple-interest" method. Loan
origination fees and certain direct origination costs are deferred and
amortized, generally over the contractual life of the related loans
using a level yield method. Interest is not accrued on loans for which
circumstances indicate collection is questionable.

(h) Provision for Possible Loan Losses

The provision for possible loan losses charged to operating expenses
is determined based on Management's evaluation of the loan portfolios
and the adequacy of the allowance for possible loan losses under
current economic conditions and such other factors which, in
Management's judgement, deserve current recognition.

(i) Lease Financing

The Corporation leases equipment to customers on both a direct and
leveraged lease basis. The net investment in financing leases includes
the aggregate amount of lease payments to be received and the
estimated residual values of the equipment, less unearned income and
non-recourse debt pertaining to leveraged leases. Income from lease
financing is recognized over the lives of the leases on an approximate
level rate of return on the unrecovered investment. Residual values of
leased assets are reviewed on an annual basis for reasonableness.
Declines in residual values judged to be other than temporary are
recognized in the period such determinations are made.

(j) Mortgage Servicing Fees

The Corporation generally records loan administration fees earned for
servicing loans for investors as income is collected. Earned servicing
fees and late fees related to delinquent loan payments are also
recorded as income is collected.

(k) Federal Income Taxes

The Corporation follows the asset and liability method of accounting
for income taxes. Deferred income taxes are recognized for the tax
consequences of "temporary differences" by applying enacted statutory
tax rates applicable to future years to differences between the
financial statement carrying amounts and the tax bases of existing
assets and liabilities. The effect of a change in tax rates is
recognized in income in the period of the enactment date.

(l) Value Ascribed to Acquired Intangibles

The value ascribed to acquired intangibles, including core deposit
premiums, results from the excess of cost over fair value of net
assets acquired in acquisitions of financial institutions. Such values
are being amortized over periods ranging from 10 to 25 years, which
represent the estimated remaining lives of the long-term interest
bearing assets acquired. Amortization is generally computed on an
accelerated basis based on the expected reduction in the carrying
value of such acquired assets. If no significant amount of long-term
interest bearing assets is acquired, such value is amortized over the
estimated life of the acquired deposit base, with amortization periods
ranging from 10 to 15 years.

30
<PAGE> 32

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FIRSTMERIT CORPORATION AND SUBSIDIARIES

(m) Trust Department Assets and Income

Property held by the Corporation in a fiduciary or other capacity for
trust customers is not included in the accompanying consolidated
financial statements, since such items are not assets of the
Corporation. Trust income is reported generally on a cash basis which
approximates the accrual basis of accounting.

(n) Per Share Data

The per share data is based on the weighted average number of shares
of common stock and common stock equivalents outstanding during each
year.

(o) Reclassifications

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

2. ACQUISITIONS

On January 31, 1995, the Corporation acquired The CIVISTA Corporation, a
savings and loan holding company headquartered in Canton, Ohio ("CIVISTA"), in
exchange for approximately 6,513,119 shares of the Corporation's common stock.
The transaction was accounted for as a pooling of interests. As a result of
CIVISTA's fiscal year which ended September 30, the Corporation made an
acquisition adjustment to shareholders' equity of $614, which represented
CIVISTA's net income for the three month period ended December 31, 1994. The
accompanying consolidated financial statements for all periods presented have
been restated to account for the acquisition.

Details of the results of operations of the previously separate
corporations including CIVISTA operating results for its fiscal year ended
September 30, 1994 are as follows:

<TABLE>
<CAPTION>
FIRSTMERIT
CORPORATION CIVISTA COMBINED
----------- ------- --------
<S> <C> <C> <C>
Interest income..................................... $ 316,809 54,209 371,018
Net interest income................................. $ 200,932 29,905 230,837
Net income.......................................... $ 60,301 11,048 71,349
</TABLE>

The Corporation incurred a one-time charge of approximately $16.2 million
($0.48 per share) in the first quarter of 1995 related to the loss of certain
tax benefits as a result of converting CIVISTA's thrift operations to national
bank operations as well as other expenses related to the merger.

Great Northern Financial Corporation, a savings and loan holding company
located in Barberton, Ohio, was acquired on April 22, 1994, in exchange for
approximately 1,882,440 shares of the Corporation's common stock. The
transaction was accounted for as a pooling of interests. The accompanying
consolidated financial statements for all periods presented have been restated
to account for the acquisition.

31
<PAGE> 33

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FIRSTMERIT CORPORATION AND SUBSIDIARIES

3. INVESTMENT SECURITIES

Investment securities are composed of:

<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
December 31, 1996
Available for sale:
U.S. Treasury securities and U.S. Government
agency obligations......................... $ 660,199 1,517 5,975 655,741
Obligations of state and political
subdivisions............................... 93,694 547 654 93,587
Mortgage-backed securities................... 324,818 2,458 1,999 325,277
Other securities............................. 112,224 1,434 739 112,919
---------- ------ ------ ---------
$1,190,935 5,956 9,367 1,187,524
========== ====== ====== =========
December 31, 1995
Available for sale:
U.S. Treasury securities and U.S. Government
agency obligations......................... $ 870,412 3,852 9,297 864,967
Obligations of state and political
subdivisions............................... 108,435 914 507 108,842
Mortgage-backed securities................... 329,099 4,163 1,706 331,556
Other securities............................. 97,101 1,152 559 97,694
---------- ------ ------ ---------
$1,405,047 10,081 12,069 1,403,059
========== ====== ====== =========
</TABLE>

Effective December 31, 1995, the Corporation transferred all
held-to-maturity investments to available-for-sale. As a result of this
transfer, unrealized holding losses on available-for-sale securities were
reduced by the after-tax amount of $1.2 million.

The amortized cost and market value of investment securities including
mortgage-backed securities at December 31, 1996, by contractual maturity, are
shown below. Expected maturities will differ from contractual maturities based
on the issuers' rights to call or prepay obligations with or without call or
prepayment penalties.

<TABLE>
<CAPTION>
AMORTIZED MARKET
COST VALUE
---------- ---------
<S> <C> <C>
Due in one year or less.............................................. $ 151,358 151,300
Due after one year through five years................................ 358,652 358,860
Due after five years................................................. 129,067 128,186
through ten years.................................................. 551,858 549,178
---------- ---------
$1,190,935 1,187,524
========== =========
</TABLE>

Proceeds from sales of investment securities during the years December 31,
1996 and 1995 were $343,600 and $98,688, respectively. Gross gains of $2,003 and
$1,384 and gross losses of $3,779 and $845 were realized on these sales,
respectively.

The carrying value of investment securities pledged to secure trust and
public deposits and for purposes required or permitted by law amounted to
$724,886 and $741,185 at December 31, 1996 and 1995, respectively.

32
<PAGE> 34

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FIRSTMERIT CORPORATION AND SUBSIDIARIES

4. LOANS

Loans consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1996 1995
---------- ---------
<S> <C> <C>
Commercial, financial and agricultural............................... $ 748,858 588,864
Loans to individuals, net of unearned income......................... 811,561 777,990
Real estate.......................................................... 1,936,342 2,223,561
Lease financing...................................................... 159,237 179,951
---------- ---------
$3,655,998 3,770,366
========== =========
</TABLE>

The Corporation grants loans principally to customers located within the
State of Ohio.

Information with respect to impaired loans is as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1996 1995
------ -----
<S> <C> <C>
Impaired Loans........................................................... $9,671 8,921
Allowance for Possible Loan Losses....................................... $1,913 676
Interest Recognized...................................................... $ 622 55
====== =====
</TABLE>

Earned interest on impaired loans is recognized as income is collected.

The Corporation makes loans to officers and directors on substantially the
same terms and conditions as transactions with other parties. An analysis of
loan activity with related parties for the years ended December 31, 1996 and
1995 is summarized as follows:

<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Aggregate amount at beginning of year.................................. $ 34,173 46,311
Additions (deductions):
New loans............................................................ 16,549 14,493
Repayments........................................................... (10,235) (9,446)
Changes in directors and their affiliations.......................... (3,412) (17,185)
-------- -------
Aggregate amount at end of year........................................ $ 37,075 34,173
======== =======
</TABLE>

5. ALLOWANCE FOR POSSIBLE LOAN LOSSES

Transactions in the allowance for possible loan losses are summarized as
follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Balance at beginning of year............................... $ 46,840 35,834 35,030
Additions (deductions):
Provision for possible loan
losses................................................ 17,751 19,763 4,624
Loans charged off........................................ (20,841) (12,925) (7,695)
Recoveries on loans previously charged off............... 5,975 4,168 3,875
Decrease from sale of subsidiary......................... (389) -- --
-------- -------- --------
Balance at end of year..................................... $ 49,336 $ 46,840 $ 35,834
======== ======== ========
</TABLE>

33
<PAGE> 35

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FIRSTMERIT CORPORATION AND SUBSIDIARIES

6. MORTGAGE SERVICING RIGHTS AND MORTGAGE SERVICING

In accordance with Statement of Financial Accounting Standards No. 122
"Accounting for Mortgage Servicing Rights," when the Corporation intends to sell
originated or purchased loans and retain the related servicing rights, it
allocates a portion of the total costs of the loans to the servicing rights
based on estimated fair value. Fair value is estimated based on market prices,
when available, or the present value of future net servicing income, adjusted
for such factors as discount rates and prepayments. Servicing rights are
amortized over the average life of the loans using the straight-line method.

The components of mortgage servicing rights are as follows:

<TABLE>
<S> <C>
Balance at January 1, 1996, net....................................... $ 15
Additions............................................................. 2,434
Scheduled amortization................................................ (148)
Less: allowance for impairment........................................ 0
------
Balance at December 31, 1996.......................................... $2,301
======
</TABLE>

In 1996, the Corporation's income before federal income taxes was increased
by approximately $2.3 million as a result of the adoption of SFAS No. 122. The
consolidated financial statements for 1995 and 1994 were prepared in accordance
with Statement of Financial Accounting Standards No. 65 "Accounting for Certain
Mortgage Banking Activities," which provided for servicing rights to be recorded
on purchased loans, but not originated loans.

SFAS No. 122 also requires the Corporation to assess its capitalized
servicing rights for impairment based on their current fair value. As permitted
by SFAS No. 122, the Corporation disaggregates its servicing rights portfolio
based on loan type and interest rate which are the predominant risk
characteristics of the underlying loans. If any impairment results after current
market assumptions are applied, the value of the servicing rights is reduced
through the use of a valuation allowance.

At December 31, 1996 and 1995, the Corporation serviced for others
approximately $871 million and $717 million, respectively. The following table
provides servicing information for 1996:

<TABLE>
<CAPTION>
1996
---------
<S> <C>
Balance January 1, 1996............................................ $ 716,852
Additions:
Loans originated and sold to investors........................... 126,861
Existing loans sold to investors................................. 167,746
Reductions:
Sale of servicing rights......................................... --
Loans sold servicing released.................................... --
Regular amortization, prepayments and foreclosures............... (140,402)
---------
Balance December 31, 1996.......................................... $ 871,057
=========
</TABLE>

7. RESTRICTIONS ON CASH AND DIVIDENDS

The average balance on deposit with the Federal Reserve Bank to satisfy
reserve requirements amounted to $7,306 during 1996. The level of this balance
is based upon amounts and types of customers' deposits held by the banking
subsidiaries of the Corporation. In addition, deposits are maintained with other
banks at levels determined by Management based upon the volumes of activity and
prevailing interest rates to compensate for check-clearing, safekeeping,
collection and other bank services performed by these banks. At December 31,
1996, cash and due from banks included $5,155 deposited with the Federal Reserve
Bank and other banks for these reasons.

34
<PAGE> 36

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FIRSTMERIT CORPORATION AND SUBSIDIARIES

Dividends paid by the subsidiaries are the principal source of funds to
enable the payment of dividends by the Corporation to its shareholders. These
payments by the subsidiaries in 1997 are restricted by the regulatory agencies
principally to the total of 1997 net income. Regulatory approval must be
obtained for the payment of dividends of any greater amount.

8. PREMISES AND EQUIPMENT

The components of premises and equipment are as follows:

<TABLE>
<CAPTION>
DECEMBER 31, ESTIMATED
--------------------- USEFUL
1996 1995 LIVES
-------- -------- ---------
<S> <C> <C> <C>
Land...................................................... $ 11,425 11,450 --
Buildings................................................. 81,642 82,012 10-35 yrs
Equipment................................................. 58,126 55,926 3-15 yrs
Leasehold improvements.................................... 13,124 13,346 1-20 yrs
-------- ------- --------
164,317 162,734
Less accumulated depreciation and amortization............ 62,178 68,576
-------- -------
$102,139 94,158
======== =======
</TABLE>

Amounts included in other expenses for depreciation and amortization
aggregated $10,120, $8,862 and $8,353 for the years ended December 31, 1996,
1995 and 1994, respectively.

At December 31, 1996, the Corporation was obligated for rental commitments
under noncancelable operating leases on branch offices and equipment as follows:

<TABLE>
<CAPTION>
YEARS ENDING LEASE
DECEMBER 31, COMMITMENTS
- - ------------ -----------
<S> <C>
1997 $ 8,389
1998 7,405
1999 6,532
2000 4,065
2001 4,570
2002-2009 12,304
-------
$43,265
=======
</TABLE>

Rentals paid under noncancelable operating leases amounted to $8,819,
$9,574 and $7,325 in 1996, 1995 and 1994, respectively.

9. CERTIFICATES AND OTHER TIME DEPOSITS

The aggregate amounts of certificates and other time deposits of $100 and
over at December 31, 1996 and 1995 were $271,634 and $230,429, respectively.
Interest expense on these certificates and time deposits amounted to $13,016 in
1996, $14,360 in 1995, and $9,406 in 1994.

10. SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND OTHER BORROWINGS

At December 31, 1996 and 1995, securities sold under agreements to
repurchase totaled $368,566 and $336,083, respectively. The average balance of
securities sold under agreements to repurchase and other borrowings for the
years ended December 31, 1996 and 1995, amounted to $515,556 and $609,247,
respectively. In 1996, the weighted average annual interest rate amounted to
4.87%, compared to 5.87% in 1995. The maximum amount of these borrowings at any
month end amounted to $608,782 in 1996 and $740,586 in 1995.

35
<PAGE> 37

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FIRSTMERIT CORPORATION AND SUBSIDIARIES

At December 31, 1996, and 1995, the Corporation had $55,135 and $75,875,
respectively, of Federal Home Loan Bank ("FHLB") advances. The 1996 balance
includes: $37,000 that have maturities within one year with interest rates of
5.38% to 6.15%; $12,017 with maturities over one year to five years with
interest rates of 4.65% to 6.40%; and $6,118 over five years with interest rates
of 4.75% to 8.10%.

Residential mortgage loans totaling $82,702 and $107,813 at December 31,
1996 and 1995, respectively, were pledged to secure FHLB advances.

11. FEDERAL INCOME TAXES

Federal income taxes are comprised of the following:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
Taxes currently payable....................................... $19,526 31,660 20,938
Deferred expense.............................................. 15,549 2,305 11,172
------- ------ ------
$35,075 33,965 32,110
</TABLE>

Actual Federal income tax expense differs from expected Federal income tax
as shown below:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1996 1995 1994
----- ----- -----
<S> <C> <C> <C>
Statutory rate.................................................. 35.0% 35.0% 35.0%
Increase (decrease) in rate due to:
Interest income on tax-exempt securities and tax-free loans,
net........................................................ -1.9% -3.8% -3.0%
Goodwill amortization......................................... 1.5% 0.9% 0.7%
Reduction to excess tax reserves.............................. -1.4% -0.4% -3.0%
Exercise of options at acquisition............................ 0.0% -0.3% -2.0%
Loan loss recapture at acquisition............................ 0.0% 19.0% 3.0%
Merger expenses at acquisition................................ 0.0% 1.4% 0.0%
Other......................................................... -0.1% 0.2% 0.3%
----- ----- -----
Effective tax rates............................................. 33.1% 52.0% 31.0%
===== ===== =====
</TABLE>

For 1996, 1995 and 1994, the deferred income tax expense results from
temporary differences in the recognition of income and expense for Federal
income tax and financial reporting purposes. The sources and tax effect of these
temporary differences are presented below:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
Loan loss provision........................................... $ 6,323 (2,205) (254)
Depreciation.................................................. (232) 375 (72)
Deferred loan fees, net....................................... 631 1,487 261
Leasing....................................................... 6,708 8,442 9,638
FAS 106 postretirement benefits............................... (1,012) (434) (755)
FAS 87 pension expense........................................ 1,678 (1,767) 491
FHLB stock dividends.......................................... 844 771 (265)
Severance costs............................................... 1,315 (1,315) --
Valuation reserves............................................ 675 (526) (929)
Other......................................................... (1,381) (2,523) 3,057
------- ------ ------
Total deferred income tax..................................... $15,549 2,305 11,172
======= ====== ======
</TABLE>

36
<PAGE> 38

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FIRSTMERIT CORPORATION AND SUBSIDIARIES

Principal components of the Corporation's net deferred tax (liability) are
summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1996 1995
-------- --------
<S> <C> <C>
Excess of book loan provision over tax loan provision.................. $ 5,254 11,577
Excess of tax depreciation over book depreciation...................... (3,858) (4,090)
Leasing book basis income over tax basis............................... (28,014) (21,306)
Deferred loan fees tax basis income over book basis.................... 930 1,561
Postretirement book basis expense over tax basis....................... 3,684 2,672
Pension book basis expense over tax basis.............................. 121 1,799
FHLB stock book basis over tax basis................................... (3,930) (3,086)
Security portfolio tax basis over book basis........................... 1,192 695
Severance costs book basis over tax basis.............................. -- 1,315
Valuation reserves book basis over tax basis........................... 780 1,455
Other.................................................................. 3,075 1,694
-------- --------
Total net deferred tax (liability)..................................... ($20,766) (5,714)
======== ========
</TABLE>

12. BENEFIT PLANS

The Corporation has a defined benefit pension plan covering substantially
all of its employees. In general, benefits are based on years of service and the
employee's compensation. The Corporation's funding policy is to contribute
annually the maximum amount that can be deducted for federal income tax
reporting purposes. Contributions are intended to provide not only for benefits
attributed to service to date but also for those expected to be earned in the
future.

A supplemental non-qualified, non-funded pension plan for certain officers
is also maintained and is being provided for by charges to earnings sufficient
to meet the projected benefit obligation. The pension cost for this plan is
based on substantially the same actuarial methods and economic assumptions as
those used for the defined benefit pension plan.

The following table sets forth the plans' funded status and amounts
recognized in the Corporation's consolidated financial statements:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including vested benefits
of $49,703, $48,567 and $44,114, respectively......... $(55,222) (54,780) (46,845)
======== ======= =======
Projected benefit obligation............................... (70,119) (73,926) (64,788)
Plan assets at fair value, primarily U.S. government
obligations, corporate bonds and investments in equity
funds................................................. 71,929 67,035 67,042
-------- ------- -------
Plan assets in excess of projected benefit obligation...... 1,810 (6,891) 2,254
Unrecognized net gains (losses)............................ (3,215) 675 (3,223)
Unrecognized prior service cost............................ 3,311 3,340 4,103
Remaining unrecognized net asset being amortized over
employees' average remaining service life................ (999) (1,206) (832)
-------- ------- -------
Prepaid (accrued) pension cost............................. $ 907 (4,082) 2,302
======== ======= =======
Expected long-term rate of return on assets................ 9.00% 9.00% 9.00%
Weighted-average discount rate............................. 7.50% 7.25% 8.25%
Rate of increase in future compensation levels............. 4.75% 4.75% 5.00%
======== ======= =======
</TABLE>

37
<PAGE> 39

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FIRSTMERIT CORPORATION AND SUBSIDIARIES

Net pension cost consists of the following components:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
Service cost.................................................. $ 3,728 3,290 3,729
Interest cost on projected benefit obligation................. 4,978 5,175 4,902
Actual return on plan assets.................................. (3,827) (8,563) (963)
Net total of other components................................. (2,197) 2,976 (4,347)
------- ------ ------
Net periodic pension cost..................................... $ 2,682 2,878 3,321
======= ====== ======
</TABLE>

The Corporation maintains a savings plan under Section 401(k) of the
Internal Revenue Code, covering substantially all full-time and part-time
employees after six months of continuous employment. Under the plan, employee
contributions are partially matched by the Corporation. Such matching becomes
vested when the employee reaches five years of credited service. Total savings
plan expense was $2,108, $2,294 and $1,874 for 1996, 1995 and 1994,
respectively.

13. POSTRETIREMENT MEDICAL AND LIFE INSURANCE PLAN

The Corporation has a benefit plan which presently provides postretirement
medical and life insurance for retired employees. Effective January 1, 1993, the
plan was changed to limit the Corporation's medical contribution to 200% of the
1993 level for employees who retire after January 1, 1993. The Corporation
reserves the right to terminate or amend the plan at any time.

The cost of postretirement benefits expected to be provided to current and
future retirees is accrued over those employees' service periods. Prior to 1993,
postretirement benefits were accounted for on a cash basis. In addition to
recognizing the cost of benefits for the current period, recognition is being
provided for the cost of benefits earned in prior service periods (the
transition obligation). The Corporation has elected to amortize the transition
obligation by charges to income over a twenty year period on a straight line
basis.

The following table sets forth the plan's status and amounts recognized in
the Corporation's consolidated financial statements.

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
1996 1995
---------- ----------
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees................................................. $(20,259) (15,691)
Fully eligible actives................................... (2,882) (5,628)
Other actives............................................ (7,747) (8,166)
-------- -------
Total accumulated postretirement benefit obligation........ (30,888) (29,485)
Unrecognized prior net loss................................ 6,394 5,622
Unrecognized prior service costs........................... -- 647
Unrecognized transition obligation......................... 13,129 16,156
-------- -------
Accrued postretirement benefit cost........................ $(11,365) (7,060)
======== =======
</TABLE>

38
<PAGE> 40

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FIRSTMERIT CORPORATION AND SUBSIDIARIES

Net postretirement benefit cost includes:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
1996 1995
---------- ----------
<S> <C> <C>
Service cost............................................... $ 945 811
Interest cost.............................................. 2,133 2,107
Actual return on plan assets............................... -- --
Amortization of transition obligation...................... 821 950
Net of other amortization and deferrals.................... 323 --
------ -----
Net periodic postretirement cost........................... $4,222 3,868
====== =====
</TABLE>

The following actuarial assumptions effect the determination of these
amounts:

<TABLE>
<CAPTION>
PLAN YEAR JANUARY 1,
---------------------------
1996 1995
----------- -----------
<S> <C> <C>
Expected long-term rate of return on assets........... N/A N/A
Weighted-average discount rate........................ 7.25% 7.25%
Medical trend rates:
Pre-65.............................................. 12.4%-6.0% 13.3%-6.0%
Post-65............................................. 11.8%-6.1% 12.5%-6.1%
</TABLE>

Shown below is the impact of a 1% increase in the medical trend rates
(i.e., pre-65, 13.9% for 1996 grading down to 7.0% in 2002; post-65, 13.2%
grading down to 7.1% in 2027). This information is required disclosure under
SFAS No. 106.

<TABLE>
<CAPTION>
CURRENT
TREND TREND +1% % CHANGE
---------- ---------- ----------
<S> <C> <C> <C>
Aggregate of the service and interest
components of net periodic postretirement
health care benefit cost................... $ 3,029 3,139 3.6%
Accumulated postretirement benefit obligation
for health care benefits................... $ 28,152 29,560 5.0%
</TABLE>

14. STOCK OPTIONS

The 1992 Stock Option Program provides incentive and non-qualified stock
options to certain key employees for up to 1,000,000 common shares of the
Corporation. In addition, the 1992 Directors Stock Option Program provides for
the granting of non-qualified stock options to certain non-employee directors of
the Corporation for which 100,000 common shares of the Corporation have been
reserved. Options under these 1992 Programs are not exercisable for at least six
months from date of grant.

Options continue to be outstanding under the 1982 Incentive Stock Option
Plan and these options are fully exercisable.

Options under these plans are granted at 100% of the fair market value.
Options granted as incentive stock options must be exercised within ten years
and options granted as non-qualified stock options have terms established by the
Compensation Committee of the Board and approved by the non-employee directors
of the Board. Options are cancelable within defined periods based upon the
reason for termination of employment.

In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation." This statement defines a fair value based method of accounting
for an employee stock option or similar equity instrument. The statement does,
however, allow an entity to continue to measure compensation cost for those
plans using the intrinsic value based

39
<PAGE> 41

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FIRSTMERIT CORPORATION AND SUBSIDIARIES

method of accounting prescribed by Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees."

In 1996 the Corporation adopted provisions of SFAS No. 123 by providing
disclosures of the pro forma effect on net income and earnings per share that
would result if the fair value compensation element were to be recognized as
expense. The following table shows the pro forma earnings and earnings per share
for 1996 and 1995 along with significant assumptions used in determining the
fair value of the compensation amounts.

<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Pro forma amounts:
Net income.......................................... $ 67,825 30,377
Earnings per share.................................. 2.08 0.91
Assumptions:
Dividend yield...................................... 4.4% 4.4%
Expected volatility................................. 23.3% 23.7%
Risk free interest rate............................. 5.2%-6.7% 6.3%-7.3%
Expected lives...................................... 5-6 yrs. 5 yrs.
</TABLE>

A summary of stock option activity for the last three years follows:

<TABLE>
<CAPTION>
SHARES
------------------------- RANGE OF
AVAILABLE OPTION PRICE
FOR GRANT OUTSTANDING PER SHARE
---------- ---------- --------------
<S> <C> <C> <C>
Balance
December 31, 1993.............................. 1,505,560 839,745 $ 4.32 - 24.19
Exercised................................... -- (57,544) 4.32 - 24.13
Granted..................................... (73,590) 73,590 23.25 - 23.50
--------- -------- --------------
Balance
December 31, 1994.............................. 1,431,970 855,791 4.32 - 24.19
Canceled.................................... (495,190) --
Exercised................................... -- (420,883) 4.32 - 24.13
Granted..................................... (119,450) 119,450 22.50 - 26.25
--------- -------- --------------
Balance
December 31, 1995.............................. 817,330 554,358 4.32 - 24.19
Canceled.................................... -- (13,290)
Exercised................................... -- (172,520) 4.32 - 24.19
Granted..................................... (578,990) 578,990 29.50 - 33.94
--------- -------- --------------
Balance
December 31, 1996.............................. 238,340 947,538 $ 4.61 - 33.94
--------- -------- --------------
</TABLE>

The Employee Stock Purchase Plan provides full-time and part-time employees
of the Corporation the opportunity to acquire common shares on a payroll
deduction basis. Of the 200,000 shares available under the Plan, there were
12,512 and 12,752 shares issued in 1996 and 1995, respectively.

15. PARENT COMPANY

Condensed financial information of FirstMerit Corporation (Parent Company
only) is as follows:

40
<PAGE> 42

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FIRSTMERIT CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
CONDENSED BALANCE SHEETS 1996 1995
---------- ----------
<S> <C> <C>
ASSETS
Cash and due from banks.................................... $ 21,897 4,866
Investment securities...................................... 1,161 1,036
Loans to subsidiaries...................................... 40,789 104,017
Investment in subsidiaries, at equity in underlying value
of their net assets...................................... 430,708 433,571
Net loans.................................................. 30,179 --
Goodwill................................................... 267 400
Other assets............................................... 10,386 10,363
-------- -------
$535,387 554,253
======== =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Accrued and other liabilities.............................. $ 11,680 11,372
Shareholders' equity....................................... 523,707 542,881
-------- -------
$535,387 554,253
======== =======
</TABLE>

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
CONDENSED STATEMENTS OF INCOME 1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Income:
Cash dividends from subsidiaries........................... $ 73,800 87,400 44,916
Other income............................................... 60,348 37,069 23,423
-------- ------- ------
134,148 124,469 68,339
Interest and other expenses................................ 59,970 59,652 29,988
-------- ------- ------
Income before federal income tax benefit and equity in
undistributed income of subsidiaries..................... 74,178 64,817 38,351
Federal income tax (benefit)............................... (1,189) 5,215 (4,103)
-------- ------- ------
75,367 59,602 42,454
Equity in undistributed income (loss) of subsidiaries,
including extraordinary gain in 1995 of $5,599........... (4,427) (28,284) 28,895
-------- ------- ------
$ 70,940 31,318 71,349
======== ======= ======
</TABLE>

41
<PAGE> 43

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FIRSTMERIT CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
CONDENSED STATEMENTS OF INCOME 1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Operating activities:
Net income................................................. $ 70,940 31,318 71,349
Adjustments to reconcile net income to net cash provided by
operating activities:
Equity in undistributed income of subsidiaries............. 4,427 28,284 (28,895)
Gain on sale of assets -- FMER Bank, N.A................... (490) -- --
Cash received on FMER Bank, N.A. sale...................... 13,060 -- --
Addition to Provision for loan losses...................... -- 1,100 --
Other...................................................... 3,396 12,190 (11,467)
--------- ------- -------
Net cash provided by operating activities.................. 91,333 72,892 30,987
--------- ------- -------
Investing activities:
Proceeds from maturities of investment securities.......... -- 10,262 3,544
Loans to subsidiaries...................................... 63,228 (47,954) (5,497)
Payments for investments in and advances to subsidiaries... -- -- (11,000)
Repayments for investments in/advances to subsidiaries..... -- -- 1,171
Net increase in loans...................................... (31,208) -- --
Purchases of investment securities......................... (133) (196) (993)
--------- ------- -------
Net cash (used) provided by investing activities........... 31,887 (37,888) (12,775)
--------- ------- -------
Financing activities:
Cash dividends............................................. (36,376) (35,299) (28,836)
Proceeds from exercise of stock options.................... 3,482 3,285 3,890
Purchase of treasury shares................................ (56,295) (2,269) (93)
Loans made to First National Bank of Ohio.................. (17,000) -- --
--------- ------- -------
Net cash used by financing activities...................... (106,189) (34,283) (25,039)
--------- ------- -------
Net increase (decrease) in cash and cash equivalents....... 17,031 721 (6,734)
Cash and cash equivalents at beginning of year............. 4,866 4,145 10,879
--------- ------- -------
Cash and cash equivalents at end of year................... $ 21,897 4,866 4,145
========= ======= =======
</TABLE>

16. FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS

Disclosures of fair value information about certain financial instruments,
whether or not recognized in the consolidated balance sheets are provided as
follows. Instruments for which quoted market prices are not available are valued
based on estimates using present value or other valuation techniques whose
results are significantly affected by the assumptions used, including discount
rates and future cash flows. Accordingly, the values so derived, in many cases,
may not be indicative of amounts that could be realized in immediate settlement
of the instrument. Also, certain financial instruments and all non-financial
instruments are excluded from these disclosure requirements. For these and other
reasons, the aggregate fair value amounts presented below are not intended to
represent the underlying value of the Corporation.

The following methods and assumptions were used to estimate the fair values
of each class of financial instrument presented:

Investment securities -- Fair values are based on quoted prices, or for
certain fixed maturity securities not actively traded estimated values are
obtained from independent pricing services.

Federal funds sold -- The carrying amount is considered a reasonable
estimate of fair value.

42
<PAGE> 44

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FIRSTMERIT CORPORATION AND SUBSIDIARIES

Net loans -- Fair value for loans with interest rates that fluctuate as
current rates change are generally valued at carrying amounts with an
appropriate discount for any credit risk. Fair values of other types of loans
are estimated by discounting the future cash flows using the current rates for
which similar loans would be made to borrowers with similar credit ratings and
for the same remaining maturities.

Cash and due from banks -- The carrying amount is considered a
reasonable estimate of fair value.

Accrued interest receivable -- The carrying amount is considered a
reasonable estimate of fair value.

Deposits -- The carrying amount is considered a reasonable estimate of
fair value for demand and savings deposits and other variable rate deposit
accounts. The fair values for fixed maturity certificates of deposit and other
time deposits are estimated using the rates currently offered for deposits of
similar remaining maturities.

Securities sold under agreements to repurchase and other borrowings
- - -- Fair values are estimated using rates currently available to the Corporation
for similar types of borrowing transactions.

Accrued interest payable -- The carrying amount is considered a
reasonable estimate of fair value.

Commitments to extend credit -- The fair value of commitments to extend
credit is estimated using the fees currently charged to enter into similar
arrangements, taking into account the remaining terms of the agreements, the
creditworthiness of the counterparties, and the difference, if any, between
current interest rates and the committed rates.

Standby letters of credit and financial guarantees written -- Fair
values are based on fees currently charged for similar agreements or on the
estimated cost to terminate or otherwise settle the obligations.

Loans sold with recourse -- Fair value is estimated based on the present
value of the estimated future liability in the event of default.

The estimated fair values of the Corporation's financial instruments based
on the assumptions described above are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------------
1996 1995
------------------------ -----------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Financial assets:
Investment securities...................... $1,187,524 1,187,524 1,403,059 1,403,059
Federal funds sold......................... 15,550 15,550 12,575 12,575
Net loans.................................. 3,606,662 3,585,534 3,723,526 3,704,374
Cash and due from banks.................... 222,164 222,164 287,671 287,671
Accrued interest receivable................ 23,489 23,489 35,584 35,584
Financial liabilities:
Deposits................................... 4,204,875 4,209,789 4,501,925 4,514,823
Securities sold under agreements to
repurchase and other borrowings......... 423,701 423,852 486,958 486,809
Accrued interest payable................... 16,433 16,433 16,252 16,252
Unrecognized financial instruments:
Commitments to extend credit............... -- -- -- --
Standby letters of credit and financial
guarantees written...................... -- -- -- --
Loans sold with recourse................... -- -- -- --
</TABLE>

43
<PAGE> 45

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FIRSTMERIT CORPORATION AND SUBSIDIARIES

17. FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK

The Corporation is a party to financial instruments with off-balance-sheet
risk in the normal course of business to meet the financing needs of its
customers. These financial instruments include commitments to extend credit,
standby letters of credit, financial guarantees, and loans sold with recourse.

These instruments involve, to varying degrees, elements recognized in the
consolidated balance sheets. The contract or notional amount of these
instruments reflect the extent of involvement the Corporation has in particular
classes of financial instruments.

The Corporation's exposure to credit loss in the event of non-performance
by the other party to the financial instrument for commitments to extend credit
and standby letters of credit and financial guarantees written is represented by
the contractual notional amount of those instruments. The Corporation uses the
obligations as it does for on-balance-sheet instruments.

Unless noted otherwise, the Corporation does not require collateral or
other security to support financial instruments with credit risk. The following
table sets forth financial instruments whose contract amounts represent credit
risk.

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1996 1995
---------- ---------
<S> <C> <C>
Commitments to extend credit................................. $1,295,118 1,015,723
========== =========
Standby letters of credit and financial guarantees written... $ 89,404 75,898
========== =========
Loans sold with recourse..................................... $ 1,361 1,702
========== =========
</TABLE>

Commitments to extend credit are agreements to lend to a customer provided
there is no violation of any condition established in the contract. Commitments
generally are extended at the then prevailing interest rates, have fixed
expiration dates or other termination clauses and may require payment of a fee.
Since many of the commitments are expected to expire without being drawn upon,
the total commitment amounts do not necessarily represent future cash
requirements. The Corporation evaluates each customer's creditworthiness on a
case-by-case basis. The amount of collateral obtained if deemed necessary by the
Corporation upon extension of credit is based on Management's credit evaluation
of the counter party. Collateral held varies but may include accounts
receivable, inventory, property, plant and equipment, and income-producing
commercial properties. Standby letters of credit and financial guarantees
written are conditional commitments issued by the Corporation to guarantee the
performance of a customer to a third party. Those guarantees are primarily
issued to support public and private borrowing arrangements, including
commercial paper, bond financing and similar transactions. Except for short-term
guarantees of $30,965 and $35,427 at December 31, 1996 and 1995, respectively,
the remaining guarantees extend in varying amounts through 2020. The credit risk
involved in issuing letters of credit is essentially the same as that involved
in extending loan facilities to customers. Collateral held varies, but may
include marketable securities, equipment and real estate. In recourse
arrangements, the Corporation accepts 100% recourse. By accepting 100% recourse,
the Corporation is assuming the entire risk of loss due to borrower default. The
Corporation's exposure to credit loss, if the borrower completely failed to
perform and if the collateral or other forms of credit enhancement all prove to
be of no value, is represented by the notional amount less any allowance for
possible loan losses. The Corporation uses the same credit policies originating
loans which will be sold with recourse as it does for any other type of loan.

18. EXTRAORDINARY GAIN AND UNUSUAL CHARGES

During the third quarter, the corporation recorded a one-time Savings
Association Insurance Fund ("SAIF") recapitalization charge that totaled $10.2
million. The charge was mandated by legislation passed by Congress and signed
into law September 30, 1996.

44
<PAGE> 46

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FIRSTMERIT CORPORATION AND SUBSIDIARIES

During 1995, the Corporation recognized an extraordinary gain of $5,599,
net of taxes of $3,015, from the sale of several apartment complexes formerly
owned by a CIVISTA subsidiary.

Other 1995 unusual charges included the following items: a) fees, expenses,
and lost tax benefits of $16,214 related to the acquisitions of CIVISTA; b) an
expense of $2,199 related to an early retirement program; and c) a reengineering
plan that was implemented to improve the overall operating effectiveness of the
Corporation, improve productivity within the branch network and centralize
operational functions previously handled by affiliate banks. The charges
associated with this plan totaled $17,838 on a pre-tax basis, the components of
which were as follows: $6,584 in adjustments to the value of buildings,
equipment and other assets; $2,875 increase to reserves; $4,688 in severance
costs; and $3,691 in consulting, sales training, and merchandising expenses
consistent with the launch of FirstMerit's new retail emphasis. The severance
charge relates to a management and employee staff reduction of approximately 400
people. As of December 31, 1996, implementation of the reengineering plan that
began in 1995 was completed.

19. CONTINGENCIES

The nature of the Corporation's business results in a certain amount of
litigation. Accordingly, FirstMerit Corporation and its subsidiaries are subject
to various pending and threatened lawsuits in which claims for monetary damages
are asserted. Management, after consultation with legal counsel, is of the
opinion that the ultimate liability of such pending matters would not have a
material effect on the Corporation's financial condition or results of
operations.

45
<PAGE> 47

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FIRSTMERIT CORPORATION AND SUBSIDIARIES

20. QUARTERLY FINANCIAL DATA (UNAUDITED)

Quarterly financial and per share data for the years ended December 31,
1996 and 1995 are summarized as follows:

<TABLE>
<CAPTION>
QUARTERS
--------------------------------------------
FIRST SECOND THIRD FOURTH
-------- ------- ------- -------
IN THOUSANDS (EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Total interest income.............. 1996 $101,627 103,385 104,362 102,371
==== ======== ======= ======= =======
1995 $102,866 104,793 104,801 104,167
==== ======== ======= ======= =======
Net interest income................ 1996 $ 60,390 63,505 63,928 63,149
==== ======== ======= ======= =======
1995 $ 58,507 57,709 59,285 60,193
==== ======== ======= ======= =======
Provision for possible loan
losses........................... 1996 $ 2,957 3,170 3,485 8,139
==== ======== ======= ======= =======
1995 $ 2,712 2,586 2,820 11,645
==== ======== ======= ======= =======
Income (loss) before federal income
taxes............................ 1996 $ 28,817 28,679 19,835 28,684
==== ======== ======= ======= =======
1995 $ 18,100 19,026 24,916 (5,373)
==== ======== ======= ======= =======
Extraordinary item, net of tax
effect........................... 1996 -- -- -- --
==== ======== ======= ======= =======
1995 -- -- -- 5,599
==== ======== ======= ======= =======
Net income......................... 1996 $ 19,253 19,221 13,447 19,019
==== ======== ======= ======= =======
1995 $ (1,184) 12,664 16,649 3,189
==== ======== ======= ======= =======
Income (loss) per share before
extraordinary item............... 1996 $ 0.58 0.59 0.42 0.59
==== ======== ======= ======= =======
1995 $ (0.04) 0.38 0.50 (0.07)
==== ======== ======= ======= =======
Extraordinary item, net of tax
effect, per share................ 1996 -- -- -- --
==== ======== ======= ======= =======
1995 -- -- -- 0.17
==== ======== ======= ======= =======
Net income per share............... 1996 $ 0.58 0.59 0.42 0.59
==== ======== ======= ======= =======
1995 $ (0.04) 0.38 0.50 0.10
==== ======== ======= ======= =======
</TABLE>

21. SHAREHOLDER RIGHTS PLAN

The Corporation has in effect a shareholder rights plan ("Plan"). The Plan
provides that each share of Common Stock has one right attached. Under the Plan,
subject to certain conditions, the Rights would be distributed after either of
the following events: (1) a person acquires 10% or more of the Common Stock of
the Corporation, or (2) the commencement of a tender offer that would result in
a change in the ownership of 10% or more of the Common Stock. After such an
event, each Right would entitle the holder to purchase shares of Series A
Preferred Stock of the Corporation. Subject to certain conditions, the
Corporation may redeem the Rights for $0.01 per Right.

46
<PAGE> 48

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FIRSTMERIT CORPORATION AND SUBSIDIARIES

22. REGULATORY MATTERS

The Corporation is subject to various regulatory capital requirements
administered by the federal banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory -- and possibly additional
discretionary -- actions by regulators that, if undertaken, could have a
material effect on the Corporation's financial statements. Under capital
adequacy guidelines and the regulatory framework for prompt corrective action,
the Corporation must meet specific capital guidelines that involve quantitative
measures of the Corporation's assets, liabilities, and certain off-balance-sheet
items as calculated under regulatory accounting practices. The Corporation's
capital amounts and classification are also subject to quantitative judgments by
regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy
require the Corporation to maintain minimum amounts and ratios (set forth in the
table below) of total and Tier I capital to risk-weighted assets and of Tier I
capital to average assets. Management believes, as of December 31, 1996, that
the Corporation meets all capital adequacy requirements to which it is subject.
The capital terms used in this note to the consolidated financial statements are
defined in the regulations as well as in the "Capital Resources" section of
Management's Discussion and Analysis of financial condition and results of
operations.

As of December 31, 1996, the most recent notification from the Office of
the Comptroller of the Currency ("OCC") categorized the Corporation as well
capitalized under the regulatory framework for prompt corrective action. To be
categorized as well capitalized the Corporation must maintain minimum total
risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the
table. In Management's opinion there are no conditions or events since the OCC's
notification that have changed the Corporation's categorization as well
capitalized.

<TABLE>
<CAPTION>
TO BE WELL
CAPITALIZED UNDER
PER CAPITAL PROMPT CORRECTIVE
ACTUAL ADEQUACY PURCHASES ACTION PROVISIONS
------------------ -------------------- ---------------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
-------- ----- ---------- ----- ---------- ------
<S> <C> <C> <C> <C> <C> <C>
As of December 31, 1996:
Total Capital
(to Risk Weighted Assets)........ $573,247 13.82% *331,861 *8.0% *414,826 *10.0%
Tier I Capital
(to Risk Weighted Amount)........ $523,911 12.63% *165,931 *4.0% *248,896 *6.0%
Tier I Capital
(to Average Assets).............. $523,911 5.63% *217,575 *4.0% *271,893 *5.0%
<FN>
* greater than or equal to

</TABLE>

47
<PAGE> 49

MANAGEMENT'S REPORT

The management of FirstMerit Corporation is responsible for the preparation
and accuracy of the financial information presented in this annual report. These
consolidated financial statements were prepared in accordance with generally
accepted accounting principles, based on the best estimates and judgement of
management.

The Corporation maintains a system of internal controls designed to provide
reasonable assurance that assets are safeguarded, that transactions are executed
in accordance with the Corporation's authorization and policies, and that
transactions are properly recorded so as to permit preparation of financial
statements that fairly present the financial position and results of operations
in conformity with generally accepted accounting principles. These systems and
controls are reviewed by our internal auditors and independent auditors.

The Audit Committee of the Board of Directors is composed of only outside
directors and has the responsibility for the recommendation of the independent
auditors for the Corporation. The Audit Committee meets regularly with
management, internal auditors and our independent auditors to review accounting,
auditing and financial matters. The independent auditors and the internal
auditors have free access to the Audit Committee.

/s/ JOHN R. COCHRAN /s/ JACK R. GRAVO
JOHN R. COCHRAN JACK R. GRAVO
President and Chief Executive Vice President
Executive Officer Finance and Administration

48
<PAGE> 50

INDEPENDENT AUDITORS' REPORT

We have audited the accompanying consolidated balance sheets of FirstMerit
Corporation and subsidiaries as of December 31, 1996 and 1995, and the related
consolidated statements of income, changes in shareholders' equity and cash
flows for each of the years in the three year period ended December 31, 1996.
These consolidated financial statements are the responsibility of the
Corporation's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statements presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of FirstMerit
Corporation and subsidiaries as of December 31, 1996 and 1995 and the results of
their operations and their cash flows for each of the years in the three year
period ended December 31, 1996 in conformity with generally accepted accounting
principles.

/s/ Coopers & Lybrand

Akron, OH
January 16, 1997

49
<PAGE> 51

AVERAGE CONSOLIDATED BALANCE SHEETS, FULLY-TAX EQUIVALENT INTEREST RATES AND
INTEREST DIFFERENTIAL

FIRSTMERIT CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------------------------------------------------------------------
1996 1995 1994
------------------------------- ------------------------------ ------------------------------
AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE INTEREST RATE BALANCE INTEREST RATE BALANCE INTEREST RATE
---------- -------- ------- --------- -------- ------- --------- -------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investment securities:
U.S. Treasury securities
and U.S. Government
agency obligations
(taxable)............. $1,110,581 69,010 6.21% 1,218,604 75,759 6.22% 1,289,286 74,960 5.81%
Obligations of states
and political
subdivisions (tax-
exempt)............... 100,630 7,404 7.36 122,244 9,369 7.66 145,199 11,011 7.58%
Other securities........ 99,977 6,489 6.49 106,176 7,077 6.67 190,239 11,981 6.30%
---------- ------- --------- ------- --------- -------
Total investment
securities........ 1,311,188 82,903 6.32 1,447,024 92,205 6.37 1,624,724 97,952 6.03%
Federal funds sold........ 19,233 934 4.86 22,011 1,681 7.64 55,126 2,168 3.93%
Loans..................... 3,812,900 330,951 8.68 3,818,486 326,581 8.55 3,350,162 275,488 8.22%
Less allowance for
possible loan losses.... 47,392 -- -- 37,923 -- -- 36,040 -- --
---------- ------- --------- ------- --------- -------
Net loans........... 3,765,508 330,951 8.79 3,780,563 326,581 8.64 3,314,122 275,488 8.31%
---------- ------- --------- ------- --------- -------
Total earning
assets............ 5,095,929 414,788 8.14 5,249,598 420,467 8.01 4,993,972 375,608 7.52%
------- ------- -------
Cash and due from banks... 207,533 220,787 204,513
Other assets.............. 175,020 184,426 187,273
---------- --------- ---------
Total assets........ $5,478,482 5,654,811 5,385,758
========== ========= =========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Deposits:
Demand -- non-interest
bearing............... $ 745,102 -- -- 725,287 -- -- 666,469 -- --
Demand -- interest
bearing............... 447,524 7,839 1.75 426,608 9,202 2.16 460,994 10,429 2.26%
Savings................. 1,399,011 32,446 2.32 1,514,374 38,438 2.54 1,710,909 43,372 2.54%
Certificates and other
time deposits......... 1,772,150 95,379 5.38 1,782,817 97,518 5.47 1,607,616 68,528 4.26%
---------- ------- --------- ------- --------- -------
Total deposits...... 4,363,787 135,664 3.11 4,449,086 145,158 3.26 4,445,988 122,329 2.75%
Federal funds purchased,
securities sold under
agreements to repurchase
and other borrowings.... 515,556 25,109 4.87 609,247 35,775 5.87 374,351 17,853 4.77%
---------- ------- --------- ------- --------- -------
Total interest
bearing
liabilities....... 4,134,241 160,773 3.89 4,333,046 180,933 4.18 4,153,870 140,182 3.37%
---------- ------- --------- ------- ---------
Other liabilities......... 71,240 68,440 50,559
Shareholders' equity...... 527,899 528,038 514,860
---------- --------- ---------
Total liabilities
and shareholders'
equity............ $5,478,482 5,654,811 5,385,758
========== ========= =========
Net yield on earning
assets.................. 254,015 4.98 239,534 4.56 235,426 4.71
======= ==== ======= ==== ======= ====
Interest rate spread...... 4.25 3.83 4.15
==== ==== ====
Income on tax-exempt
securities and loans.... 6,241 8,034 10,454
======= ======= =======
</TABLE>

- - ---------------

Notes: Interest income on tax-exempt securities and loans have been adjusted to
a fully-taxable equivalent basis.

Non-accrual loans have been included in the average balances.

50
<PAGE> 52

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

For information about the Directors of FirstMerit, see "Election of
Directors" on pages 1 through 5 of FirstMerit's Proxy Statement dated February
26, 1997 ("Proxy Statement"), which is incorporated herein by reference.

Information about the Executive Officers of FirstMerit appears in Part I of
this report.

Disclosures by FirstMerit with respect to compliance with Section 16(a)
appear on page 5 of the Proxy Statement, and are incorporated herein by
reference.

ITEM 11. EXECUTIVE COMPENSATION

See "Executive Compensation and Other Information" on pages 6 through 16 of
the Proxy Statement, which is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

See "Principal Shareholders" and "Election of Directors" at page 25, and
pages 1 through 5, respectively, of the Proxy Statement, which are incorporated
herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

See "Certain Relationships and Related Transactions" at pages 18 and 19 of
the Proxy Statement, which is incorporated herein by reference.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)(1) The following Financial Statements appear in Part II of this Report:

Consolidated Balance Sheets

December 31, 1996 and 1995

Consolidated Statements of Income

Years ended December 31, 1996, 1995 and 1994

Consolidated Statements of Changes in Shareholders' Equity

Years ended December 31, 1996, 1995 and 1994

Consolidated Statements of Cash Flows

Years ended December 31, 1996, 1995 and 1994

Notes to Consolidated Financial Statements

Years ended December 31, 1996, 1995 and 1994

Management's Report

Independent Auditors' Report

(a)(2) Financial Statement Schedules

All schedules are omitted as the required information is inapplicable or
the information is presented in the consolidated financial statements or
related notes which appear in Part II of this report.

(a)(3) Management Contracts or Compensatory Plans or Arrangements

See those documents listed on the Exhibit Index which are marked as
such.

51
<PAGE> 53

(b) Reports on Form 8-K

No reports on Form 8-K were filed by FirstMerit during the fourth
quarter of 1996.

See the Exhibit Index.

(d) Financial Statements

See subparagraph (a)(1) above.

52
<PAGE> 54

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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, in the City of Akron,
State of Ohio, on the 26th day of February, 1997.

FirstMerit Corporation

By: /s/ John R. Cochran
----------------------------------
John R. Cochran, President
and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed on the 20th day of February, 1997 by the following
persons (including a majority of the Board of Directors of the registrant) in
the capacities indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE
- - ---------------------------------------- ---------------------------------------------------
<S> <C>

/s/ JOHN R. COCHRAN President and Chief Executive Officer (Principal
- - ---------------------------------------- Executive Officer) and Director
John R. Cochran

/s/ JACK R. GRAVO Executive Vice President (Principal Financial
- - ---------------------------------------- Officer and Principal Accounting Officer)
Jack R. Gravo

/s/ KAREN S. BELDEN Director
- - ----------------------------------------
Karen S. Belden

/s/ R. CARY BLAIR Director
- - ----------------------------------------
R. Cary Blair

/s/ JOHN C. BLICKLE Director
- - ----------------------------------------
John C. Blickle

/s/ ROBERT W. BRIGGS Director
- - ----------------------------------------
Robert W. Briggs

/s/ ROBERT M. CARTER Director
- - ----------------------------------------
Robert M. Carter

/s/ ELIZABETH A. DALTON Director
- - ----------------------------------------
Elizabeth A. Dalton

/s/ TERRY L. HAINES Director
- - ----------------------------------------
Terry L. Haines

/s/ CLIFFORD J. ISROFF Director
- - ----------------------------------------
Clifford J. Isroff

/s/ PHILIP A. LLOYD, II Director
- - ----------------------------------------
Philip A. Lloyd, II

/s/ ROBERT G. MERZWEILER Director
- - ----------------------------------------
Robert G. Merzweiler

/s/ STEPHEN E. MYERS Director
- - ----------------------------------------
Stephen E. Myers

/s/ GILBERT H. NEAL Director
- - ----------------------------------------
Gilbert H. Neal

/s/ ROGER T. READ Director
- - ----------------------------------------
Roger T. Read

/s/ JUSTIN T. ROGERS, JR. Director
- - ----------------------------------------
Justin T. Rogers, Jr.

/s/ DEL SPITZER Director
- - ----------------------------------------
Del Spitzer
</TABLE>
<PAGE> 55

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- - ----------
<S> <C>
(3)(a)(1) Amended and Restated Articles of Incorporation, as amended, of FirstMerit
Corporation
(3)(b) Code of Regulations, as amended, of FirstMerit Corporation
(3)(c)(2) Amended and Restated Shareholders Rights Agreement
(4) Description of Shares (contained in Exhibit 3(a) above)
(10)(a)(3) 1982 Incentive Stock Option Plan of FirstMerit Corporation*
(10)(b) Amended and Restated 1992 Stock Option Program of FirstMerit Corporation*
(10)(c) 1992 Directors Stock Option Program*
(10)(d)(4) FirstMerit Corporation 1995 Restricted Stock Plan*
(10)(e) 1997 Stock Option Program of FirstMerit Corporation*
(10)(f)(5) 1985 FirstMerit Corporation Stock Plan (CV)*
(10)(g)(6) 1993 FirstMerit Corporation Stock Plan (CV)*
(10)(h) Amended and Restated FirstMerit Corporation Executive Deferred Compensation
Plan*
(10)(i) Amended and Restated FirstMerit Corporation Director Deferred Compensation Plan*
(10)(j)(7) FirstMerit Corporation Executive Supplemental Retirement Plan*
(10)(k)(8) FirstMerit Corporation Unfunded Supplemental Benefit Plan*
(10)(l)(9) First Amendment to the FirstMerit Corporation Unfunded Supplemental Benefit
Plan*
(10)(m)(10) Supplemental Pension Agreement of John R. Macso*
(10)(n)(11) FirstMerit Corporation Executive Committee Life Insurance Program Summary*
<FN>
- - ---------------

1 Incorporated by reference to Exhibit 3(i) of FirstMerit's Forms 8-K filed
with the Commission on April 27, 1995.

2 Incorporated by reference to Exhibit 4 of FirstMerit's Registration Statement
on Form 8-A/A filed with the Commission on July 18, 1996

3 Incorporated by reference to Exhibit 4.2 of FirstMerit's Registration
Statement on Form S-8 (No. 33-7266), filed with the Commission on July 15,
1986.

4 Incorporated by reference to Exhibit (10)(d) of FirstMerit's Form 10-Q for
the fiscal quarter ended March 31, 1995, filed with the Commission on May 15,
1995.

5 Incorporated by reference to Exhibit (10)(a) of FirstMerit's Form S-8 No.
33-57557, filed with the Commission on February 1, 1995.

6 Incorporated by reference to Exhibit (10)(b) of FirstMerit's Form S-8 No.
33-57557, filed with the Commission on February 1, 1995.

7 Incorporated by reference to Exhibit (10)(d) of FirstMerit's Form 10-K for
the fiscal year ended December 31, 1995, filed with the Commission on March
15, 1996.

8 Incorporated by reference to Exhibit (10)(j) of FirstMerit's Form 10-K for
the fiscal year ended December 31, 1991, filed with the Commission on March
16, 1992.

9 Incorporated by reference to Exhibit (10)(v) of FirstMerit's Form 10-K for
the fiscal year ended December 31, 1994, filed with the Commission on March
2, 1995.

10 Incorporated by reference to Exhibit (10)(r) of FirstMerit's Form 10-K for
the fiscal year ended December 31, 1991, filed with the Commission on March
16, 1992.

11 Incorporated by reference to Exhibit (10)(w) of FirstMerit's Form 10-K for
the fiscal year ended December 31, 1994, filed with the Commission on March
2, 1995.
</TABLE>
<PAGE> 56

<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- - ----------
<S> <C>
(10)(o)(12) Long Term Disability Plan*
(10)(p)(13) Employment Agreement of John R. Cochran*
(10)(q)(14) Restricted Stock Award Agreement of John R. Cochran*
(10)(r) Form of FirstMerit Corporation Termination Agreement*
(10)(s)(15) Form of Director and Officer Indemnification Agreement and Undertaking*
(10)(t)(16) Distribution Agreement, by and among FirstMerit Corporation, First National Bank
of Ohio and the Agents
(10)(u)(17) Form of First National Bank of Ohio Global Bank Note (Fixed Rate)
(10)(v)(18) Form of First National Bank of Ohio Global Bank Note (Floating Rate)
(21) Subsidiaries of FirstMerit Corporation
(23) Consent of Coopers & Lybrand
(27) Financial Data Schedule
<FN>
* Management Contract or Compensatory Plan or Arrangement

- - ---------------

12 Incorporated by reference to Exhibit (10)(x) of FirstMerit's Form 10-K for
the fiscal year ended December 31, 1994, filed with the Commission on March
2, 1995.

13 Incorporated by reference to Exhibit (10)(a) of FirstMerit's Form 10-Q for
the fiscal quarter ended March 31, 1995, filed with the Commission on May 15,
1995.

14 Incorporated by reference to Exhibit (10)(e) of FirstMerit's Form 10-Q for
the fiscal quarter ended March 31, 1995, filed with the Commission on May 15,
1995.

15 Incorporated by reference to Exhibit (10)(i) of FirstMerit's Form 8-K/A filed
with the Commission on April 27, 1995.

16 Incorporated by reference to Exhibit (10)(ii) of FirstMerit's Form 8-K/A
filed with the Commission on April 27, 1995.

17 Incorporated by reference to Exhibit (10)(iii) of FirstMerit's Form 8-K/A
filed with the Commission on April 27, 1995.

18 Incorporated by reference to Exhibit (10)(iv) of FirstMerit's Form 8-K/A
filed with the Commission on April 27, 1995.
</TABLE>

<PAGE> 1
EXHIBIT (3)(b)

CODE OF REGULATIONS
OF

FIRSTMERIT CORPORATION

<PAGE> 2

CODE OF REGULATIONS
OF

FIRSTMERIT CORPORATION

ARTICLE I
SHAREHOLDER

SECTION 1 - ANNUAL MEETING. The Annual Meeting of the shareholders of
the Corporation for the election of directors and for the transaction of such
other business as may properly come before the meeting, shall be held at the
principal office of the Corporation, or at such other place as may be designated
by the Board of Directors and specified in the notice of such meeting within or
without the State of Ohio, at such time as the Board of Directors may determine,
on the second Wednesday of each April, if not a legal holiday; and, if a legal
holiday, then on the next succeeding business day or on such other date as the
Board of Directors shall determine.

SECTION 2 - SPECIAL MEETINGS. Special meetings of the shareholders of
the Corporation may be held on any business day, when called by the President,
or by the Board acting at a meeting, or by a majority of the directors acting
without a meeting, or by persons who hold not less than fifty percent (50%) of
all shares outstanding and entitled to vote thereat. Upon request in writing,
delivered either in person or by registered mail to the President, or the
Secretary, by any persons entitled to call a meeting of shareholders, which
request shall state the objects for which the meeting is to be called, and the
business considered and transacted at any such meeting called at the request of
shareholders shall be confined to the objects stated in such request, such
officer shall forthwith cause to be given to the shareholders entitled thereto
notice of a meeting to be held on a date not less than seven (7) or more than
sixty (60) days after the receipt of such request, as such officer may fix. If
such notice is not given within fifteen (15) days after the delivery or mailing
of such request, the persons calling the meeting may fix the time of the meeting
and give notice thereof in the manner provided by law or provided by these
Regulations, or cause such notice to be given by any designated representative.

SECTION 3 - NOTICE OF MEETINGS. Not less than seven (7) nor more than
sixty (60) days before the date fixed for a meeting of shareholders, written
notice stating the time, place and purposes of such meeting shall be given by or
at the direction of the Secretary or an Assistant Secretary, or any other person
or persons required or permitted by these Regulations to give such notice. The
notice shall be given by personal delivery or by mail to each shareholder
entitled to notice of the meeting who is of record as of the day preceding the
day on which notice is given or, if a record date there for is duly fixed, of
record as of said date; if mailed, the notice shall be addressed to the
shareholders at their respective addresses as they appear on the records of the
Corporation. Notice of the time, place and purposes of any meeting of
shareholders may be waived in writing, either before or after the holding of
such meeting, by any shareholders, which writing shall be filed with or entered
upon the records of the meeting. Attendance of any shareholder at a
shareholders' meeting without protesting prior to or at the commencement of the
meeting, the lack of notice, shall be deemed a waiver by him of notice of such
meeting.

<PAGE> 3

SECTION 4 - QUORUM; ADJOURNMENT. Except as may be otherwise provided by
law or by the Articles of Incorporation, at any meeting of the shareholders, the
holders of the shares entitling them to exercise a majority of the voting power
of the Corporation present in person or by proxy shall constitute a quorum for
such meeting; provided, however, that no action required by law, the Articles,
or these Regulations to be authorized or taken by a designated proportion of the
shares of the Corporation may be authorized or taken by a lesser proportion;
and, provided further, that the holders of a majority of the voting shares
represented thereat, whether or not a quorum Is Present, may adjourn such
meeting from time to time; if any meeting is adjourned, notice of such
adjournment need not be given if the time and place which is adjourned are fixed
and announced at such meeting.

SECTION 5 - PROXIES. Any shareholder entitled to vote at a meeting of
the shareholders may vote in person or may be represented and vote by proxy
appointed by an instrument in writing, signed by the shareholder or by his duly
authorized agent.

SECTION 6 - APPROVAL AND RATIFICATION OF ACTS OF OFFICERS AND BOARD.
Except as otherwise provided by the Articles of Incorporation or by law, any
contract, act, or transaction, prospective or past, of the Corporation, or of
the Board, or of the officers may be approved or ratified by the affirmative
vote at a meeting of the shareholders, or by written consent, with or without a
meeting of the holders of shares entitling them to exercise a majority of the
voting power of the Corporation, and such approval or ratification shall be as
valid and binding as though affirmatively voted for or consented to by every
shareholder of the Corporation.

ARTICLE II
SHARES

SECTION 1 - FORM OF CERTIFICATES AND SIGNATURES. Each holder of shares
is entitled to one or more certificates, signed by the President or a Vice
President and by the Secretary or an Assistant Secretary or the Treasurer of the
Corporation, which shall certify the number and class of shares held by him in
the corporation, but no certificate for shares shall be executed- or delivered
until such shares are fully paid. When such a certificate is countersigned by an
incorporated transfer agent or registrar, the signature of any of said officers
of the Corporation may be facsimile, engraved, stamped or printed. Although any
officer of the Corporation whose manual or facsimile signature is affixed to
such a certificate so countersigned ceases to be such officer before the
certificate is delivered, such certificate nevertheless shall be effective in
all respects when delivered.

SECTION 2 - TRANSFER OF SHARES. Shares of the Corporation shall be
transferable upon the books of the Corporation by the holders thereof, in
person, or by a duly authorized attorney, upon surrender and cancellation of
certificates for a like number of shares of the same class or series, with duly
executed assignment and power of transfer endorsed thereon or attached thereto,
and

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<PAGE> 4

with such proof of the authenticity of the signatures to such assignment and
power of transfer as the Corporation or its agents may reasonably require.

SECTION 3 - LOST, STOLEN OR DESTROYED CERTIFICATES. The Corporation may
issue a new certificate for shares in place of any certificate theretofore
issued by it and alleged to have been lost, stolen or destroyed, and the Board
may, in its discretion, require the owner, or his legal representatives, to give
the Corporation a bond containing such terms as the Board may require to protect
the Corporation or any person injured by the execution and delivery of a new
certificate.

SECTION 4 - TRANSFER AGENTS AND REGISTRARS. The Board may appoint, or
revoke the appointment of, transfer agents and registrars and may require all
certificates for shares to bear the signatures of such transfer agents and
registrars, or any of them. The Board shall have authority to make all such
rules and regulations as it may deem expedient concerning the issue, transfer
and registration of certificates for shares of the Corporation.

SECTION 5 - CLOSING THE TRANSFER BOOKS. For any lawful purposes,
including without limitation, the determination of the shareholders who are
entitled to:

(a) Receive notice of or to vote at a meeting of shareholders;

(b) Receive payment of any dividend or distribution;

(c) Receive or exercise rights of purchase of or subscription
for, or exchange or conversion of, shares or other securities, subject
to contract rights with respect thereto; or

(d) Participate in the execution of written consents, waivers or
releases,

the Board may fix a record date which shall not be a date earlier than the date
on which the record date is fixed and, in the cases provided for in clauses (a),
(b) and (c) above, shall not be more than sixty (60) days preceding the date of
the meeting of shareholders or the date fixed for the payment of any dividend or
distribution, or the date fixed for the receipt or the exercise of rights, as
the case may be. The record date for the purpose of the determination of the
shareholders who are entitled to receive notice of or to vote at a meeting of
shareholders shall continue to be the record date for all adjournments of such
meeting, unless the Board or the persons who shall have fixed the original
record date shall, subject to the limitations set forth in this Article, fix
another date; and, in case a new record date is so fixed, notice thereof and of
the date to which the meeting shall have been adjourned shall be given to
shareholders of record as of such date in accordance with the same requirements
as those applying to a meeting newly called. The Board may close the share
transfer books against transfers of shares during the whole or any part of the
period provided for in this Article, including the date of the meeting of
shareholders and the period ending with the date, if any, to which adjourned.

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<PAGE> 5

ARTICLE III
BOARD OF DIRECTORS

SECTION 1 - AUTHORITY. Except where the law, the Articles of
Incorporation, or these Regulations require action to be authorized or taken by
the shareholders, all of the authority of the Corporation shall be exercised by
the directors.

SECTION 2 - NUMBER OF; QUALIFICATIONS; NOMINATIONS. The Board of
Directors of the Corporation shall consist of such number of directors as may be
determined from time to time by resolution adopted by the shareholders at a
meeting called for the purpose of electing directors, but in no event shall the
number of directors exceed twenty-four (24). No reduction in the number of the
directors shall of itself have the effect of shortening the term of an incumbent
director. A director need not be a shareholder of the Corporation.

Nominations for the election of directors may be made by the Board of
Directors or by any shareholder entitled to vote in the election of directors.
However, any shareholder entitled to vote in the election of directors at a
meeting may nominate a director only if written notice of such shareholder's
intent to make such nomination or nominations has been given, either by personal
delivery or by United States mail, postage prepaid, to the Secretary of the
Corporation not later than (a) with respect to an election to be held at an
Annual Meeting of Shareholders, ninety (90) days in advance of the date
established by the Code of Regulations for the holding of such meeting, and (b)
with respect to an election to be held at a Special Meeting of Shareholders for
the election of directors, the close of business on the seventh (7th) day
following the date on which notice of such meeting is first given to
shareholders. Each such notice shall set forth (a) the name and address of the
shareholder who intends to make the nomination and of the person or persons to
be nominated, (b) a representation that the shareholder is a holder of record of
shares of the Corporation entitled to vote at such meeting and intends to appear
in person or by proxy at the meeting to nominate the person or persons specified
in the notice, (c) a description of all arrangements or understandings between
the shareholder and each nominee and any other person or persons (naming such
person or persons) pursuant to which the nomination or nominations are to be
made by the shareholder, (d) such other information regarding each nominee
proposed by such shareholder as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities and Exchange
Commission had the nominee been nominated, or intended to be nominated, by the
Board of Directors, and (e) the consent of each nominee to serve as a director
of the Corporation if so elected. The chairman of the meeting may refuse to
acknowledge the nomination of any person not made in compliance with the
foregoing procedure.

The Board of Directors shall be divided into three classes as nearly
equal in number as possible, with the term of office of one class expiring each
year; and at the Annual Meeting of Shareholders in 1988, directors of the first
class shall be elected to hold office for a term expiring

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<PAGE> 6

at the next succeeding Annual Meeting; directors of the second class shall be
elected to hold office for a term expiring at the second succeeding Annual
Meeting; and directors of the third class shall be elected to hold office for a
term expiring at the third succeeding Annual Meeting. Thereafter, at each Annual
Meeting of shareholders, the successors to the class of directors whose term
shall then expire, shall be elected to hold office until the third succeeding
Annual Meeting after such election and until their successors are elected and
qualified. When the number of directors is changed the newly established
directorships shall be apportioned among the classes so as to make all classes
as nearly equal in number as possible.

SECTION 3 - ELECTION OF DIRECTORS; VACANCIES. The directors shall be
elected at each Annual Meeting of Shareholders or at a special meeting called
for the purpose of electing directors. At a meeting of shareholders at which the
directors are to be elected, only persons nominated as candidates shall be
eligible for election as directors, and the candidates receiving the greatest
number of votes shall be elected. In the event of the occurrence of any vacancy
or vacancies of the Board, however caused, the remaining directors, though less
than a majority of the whole authorized number of directors, may, by the vote of
a majority of their number, fill any such vacancy for the unexpired term.

SECTION 4 - TERM OF OFFICE; RESIGNATIONS; REMOVAL. Directors shall hold
office until the Annual Meeting of Shareholders at which their term expires and
until their successors are elected, or until their earlier resignation, removal
from office, or death. No director may be removed during the term of office for
which he was elected, by shareholders or otherwise, except for good cause, and
if removed by shareholders for good cause, only by a vote of two-thirds (2/3) of
the shares of capital stock outstanding entitled to vote for directors
generally. Any director may resign at any time by oral statement to that effect
made at a meeting of the Board or in writing to that effect delivered to the
Secretary, such resignation to take effect immediately or at such other time as
the director may specify.

SECTION 5 - MEETINGS. Immediately after each Annual Meeting of the
Shareholders, the newly elected directors shall hold an organizational meeting
at the place where such Annual Meeting was held, for the purpose of electing
officers and transacting any other business. Other meetings of the Board may be
held at any time within or without the State of Ohio in accordance with these
Regulations, resolutions or other act by the Board. The Secretary shall give
written notice of the time and place of all meetings of the Board of Directors,
other than the organizational meetings, to each member of the Board at least
three (3) days before the meeting. Written notice of meetings of the Board of
Directors may be waived in writing by any director. The presence of a director
at a meeting of the Board of Directors without protesting, prior to or at the
commencement of the meeting, a lack of proper notice shall be deemed a waiver by
him of notice of such meeting.

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<PAGE> 7

SECTION 6 - QUORUM; ADJOURNMENT. A quorum of the Board shall consist of
a majority of the directors then in office; provided that a majority of the
directors present at a meeting duly held, whether or not a quorum is present,
may adjourn such meeting from time to time. If any meeting is adjourned, notice
of adjournment need not be given if the time and place to which it is adjourned
are fixed and announced at such meeting. At each meeting of the Board at which a
quorum is present, all questions and business shall be determined by a majority
of those present except as in these Regulations otherwise expressly provided.

SECTION 7 - APPOINTMENT OF COMMITTEES. The Board of Directors may
appoint such committees, in addition to the Executive Committee, as it may
consider proper, and such committees shall exercise such powers and duties as
the Board from time to time may prescribe.

SECTION 8 - CONTRACTS. Inasmuch as it is in the best interest of the
Corporation to attract as directors men of large and diversified business
interests, some of whom are likely to be connected with other corporations with
which, from time to time, the Corporation must have business dealings, no
contract or other transaction between the Corporation, any other person,
corporation or legal entity shall be affected by the fact that directors of the
Corporation are partners in, officers or directors of, or otherwise interested
in any such other person, corporation or legal entity, provided such contract or
transaction shall be approved or ratified by the affirmative vote of a majority
of the members of the Board of Directors not so interested

SECTION 9 - BYLAWS. The Board may adopt bylaws for its own government,
not inconsistent with the Articles of Incorporation or these Regulations.

ARTICLE IV
EXECUTIVE COMMITTEE

SECTION 1 - MEMBERSHIP; APPOINTMENT. The Board may appoint not less than
eight (8) directors, one of whom shall be the President, who together shall
constitute the Executive Committee. The directors may appoint one or more
directors as alternative members of the Committee, who may take the place of any
absent member or members at any meeting of the Committee. Vacancies in the
Executive Committee may be filled at any meeting of the Board.

SECTION 2 - POWERS; DUTIES. The Executive Committee shall advise with
and aid the officers of the Corporation in all matters concerning its interests
and the management of its business. When the Board is not in session, the
Executive Committee shall have and may exercise all the powers of the Board, so
far as such may be delegated legally, with reference to the conduct of the
business of the Corporation, except that the Executive Committee shall not take
any action to amend the Articles of Incorporation or the Regulations, to elect
directors to fill vacancies of the Board, to fix the compensation of directors
for services in any capacity, to fill vacancies on the Executive Committee or
change its membership, to elect or remove officers of the Corporation, or to
declare dividends.

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<PAGE> 8

SECTION 3 - MEETINGS. Regular meetings of the Executive Committee may be
held without call or notice at such times and places as the Executive Committee
from time to time may fix. Other meetings of the Executive Committee may be
called by any member thereof, either by oral, telegraphic or written notice, not
later than the day prior to the date set for such meeting. Such notice shall
state the time and place of the meeting and, if by telegraph or in writing,
shall be addressed to each member at his address as shown by the records of the
Secretary. Upon request by any member, the Secretary shall give the required
notice calling the meeting. Written notice of meetings of the Executive
Committee may be waived in writing by any member thereof. The presence of a
member thereof at a meeting of the Executive Committee without protesting prior
to or at the commencement of said meeting the lack of proper notice, shall be
deemed a waiver by him of notice of such meeting.

SECTION 4 - QUORUM. At any meeting of the Executive Committee, five (5)
members shall constitute a quorum. Any action of the Executive Committee to be
effective must be authorized by the affirmative vote of a majority of the
members thereof present.

SECTION 5 - RECORD OF MEETINGS. The Executive Committee shall appoint
its Secretary, who shall keep the minutes of the meetings of the Executive
Committee and cause them to be recorded in a book kept at his office for that
purpose. These minutes shall be presented to the Board from time to time for
their information.

ARTICLE V
OFFICERS

SECTION 1 - CHAIRMAN OF THE BOARD; CHAIRMAN AND CHIEF EXECUTIVE OFFICER.
If the Board of Directors determines that one of its members should be Chairman
of the Board and elects one of its members to that office, he shall preside at
all meetings of the Board of Directors and perform such other duties as shall be
assigned to him from time to time by the Board of Directors. The Board of
Directors may also, in its discretion, designate such Chairman as "Chairman and
Chief Executive Officer" of the Corporation, in which event he shall preside at
meetings of shareholders as well as the Board of Directors and, subject to the
direction and under the supervision of the Board of Directors or Executive
Committee, shall have general charge of the business affairs and property of the
Corporation, and control over its officers, agents and employees.

SECTION 2 - ELECTION AND DESIGNATION OF OFFICERS. The Executive Officers
of the Corporation shall be a Chairman and Chief Executive Officer (if the Board
of Directors, in its discretion, determines to make such appointment), a
President, one or more Vice Presidents, a Secretary, and a Treasurer, all of
whom shall be elected by the Board at its Annual Meeting. There may also be one
or more Assistant Secretaries and Assistant Treasurers, as may from time to time
be elected by the Board. The President shall be a director, but no one of the
other officers need be a director. Any two (2) or more of such offices may be
held by the same person, but no

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<PAGE> 9

officer shall execute, acknowledge or verify any instrument in more than one
capacity, if such instrument is required to be executed, acknowledged or
verified by two (2) or more officers.

SECTION 3 - TERM OF OFFICE; VACANCIES. The officers of the Corporation
shall hold office until the next organizational meeting of the Board and until
their successors are elected, except in case of resignation, death or removal.
The Board, without prejudice to the contract rights of such officer, may remove
any officer at any time, with or without cause, by a majority vote. The Board
may fill any vacancy in any office occurring from whatever reason, may delegate
to one (1) or more officers any of the duties of any officer or officers and
prescribe the duties of any officer.

SECTION 4 - PRESIDENT; DUTIES. Unless the Board has designated a
Chairman of the Board of Directors, the President shall preside at all meetings
of the Board. Unless the Board has designated a Chairman and Chief Executive
Officer, or if the Chairman and Chief Executive Officer is absent or disabled,
or if circumstances prevent the Chairman and Chief Executive Officer from
acting, the President shall preside at meetings of shareholders and shall be the
Chief Executive Officer of the Corporation and, subject to the direction and
control and under the supervision of the Board of Directors and Executive
Committee, shall have general charge of the business affairs and property of the
Corporation and control over its officers, agents and employees. He shall
(subject to the direction of the Chairman and Chief Executive Officer, if such
be designated), in general, perform all duties and have all powers incident to
the office of President and shall perform such other duties and have such other
powers as from time to time may be assigned to him by these Regulations or by
the Board of Directors.

SECTION 5 - VICE PRESIDENT; DUTIES. Each Vice President shall have the
powers and duties incident to that office and shall have such other duties as
may be prescribed from time to time by the Board of Directors or by the
President. In case of the absence or disability of the President, or when
circumstances prevent the President from acting, the Vice Presidents of the
Corporation shall perform all the duties and possess all the authority of the
President and shall have priority in the performance of such duties and exercise
of such authority in the order of their first election to office. Each Vice
President may sign and execute on behalf and in the name of the Corporation,
bonds, contracts, instruments and documents authorized by the Board.

SECTION 6 - SECRETARY; DUTIES. The Secretary shall attend all meetings
of the shareholders and of the Board and act as Secretary thereof, and shall
keep the minutes thereof in books of the Corporation provided for that purpose
and, when required, he shall perform like duties for the standing committees, if
any, elected or appointed by the Board; he shall see that proper notice, when
required, is given of all meetings of the shareholders and of the Board; he may
sign, with the President or any Vice President, on behalf and in the name of the
Corporation, all contracts and other instruments authorized by the Board or the
Executive Committee; he may sign or his facsimile signature, with that of the
President or one of the Vice Presidents, may be used to sign certificates for
shares of the capital stock of the Corporation; he shall keep in safe custody
the seal

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<PAGE> 10

of the Corporation and, whenever authorized by the Board or the Executive
Committee, shall attest and affix the seal to any contract or other instrument
requiring the same; he shall keep in safe custody all contracts and such books,
records and other papers as the Board or the Executive Committee may direct, all
of which shall, at all reasonable times, be open to the examination of any
director, upon application at the office of the Corporation during business
hours, and he shall, in general, perform all the duties usually incident to the
office of Secretary, subject to the control of the Board and the Executive
Committee.

SECTION 7 - TREASURER; DUTIES. The Treasurer shall keep or cause to be
kept full and accurate accounts of all receipts and disbursements in books
belonging to the Corporation, and shall have the care and custody of all funds
and securities of the Corporation and deposit such funds in the name of the
Corporation in such bank or banks as the Board or the Executive Committee may
designate. The Treasurer is authorized to sign all checks, drafts, notes, bills
of exchange, orders for the payment of money and any negotiable instruments of
the Corporation, but no such instrument shall be signed in blank. He shall
disburse the funds of the Corporation as may be ordered by the Board, the
Executive Committee, or the President. The Treasurer shall at all reasonable
times exhibit the books and accounts to any director and, also, provided the
Board or Executive Committee or the President so orders, to any shareholder of
the Corporation upon application at the offices of the Corporation by such
shareholder during business hours; and he shall give such bonds for the faithful
performance of his duties as the Board or the Executive Committee or the
President may determine, and he shall perform such other duties as may be
incident to his office.

SECTION 8 - OTHER OFFICERS; DUTIES. The Assistant Secretaries and
Assistant Treasurers, if any, in addition to such authority and duties as the
Board may determine, shall have such authority and perform such duties as may be
directed by their respective principal officers.

ARTICLE VI
COMPENSATION

The Board, by the affirmative vote of a majority of the directors in
office and irrespective of any personal interest of any of them, shall have
authority to establish reasonable compensation, which may include pension,
disability and death benefits, for services to the Corporation by directors and
officers, or to delegate such authority to one or more officers or directors.

ARTICLE VII
EXECUTION OF CONTRACTS
VOUCHERS AND NEGOTIABLE INSTRUMENTS

The Board or the Executive Committee may authorize any of the officers
of the Corporation or any other person or persons, either singly or with another
such officer or person as said Board or Committee may direct, to sign, on behalf
of and in the name of the Corporation,

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<PAGE> 11

contracts, indentures, deeds, conveyances, leases, declarations, communications
and other instruments and documents, and the Board or the Executive Committee
may authorize any of the officers of the Corporation or any other person or
persons, either singly or with another such officer or person as said Board or
Committee may direct, to sign on behalf of and in the name of the Corporation,
manually or by facsimile signature, checks, drafts, notes, bonds, debentures,
bills of exchange and orders for the payment of money. In case any of the
officers of the Corporation who shall have signed, or whose facsimile signature
or signatures shall have been used, as aforesaid, upon any such document,
instrument or security shall cease to be such officer of the Corporation before
such document, instrument or security shall have been delivered or issued, such
document, instrument or security, upon due delivery or issuance thereof, shall
be valid and effective as though the person or persons who signed or whose
facsimile signature or signatures were used upon such document, instrument or
security had not ceased to be such officer of the Corporation.

ARTICLE VIII
AUTHORITY TO TRANSFER AND VOTE SECURITIES

The President and each Vice President of the Corporation are each
authorized to sign the name of the Corporation and to perform all acts necessary
to effect a transfer of any shares, bonds, other evidences of indebtedness or
obligations, subscription rights, warrants, and other securities of another
corporation owned by the Corporation and to issue the necessary powers of
attorney for the same; and each such officer is authorized, on behalf of the
Corporation, to vote such securities, to appoint proxies with respect thereto,
and to execute consents, waivers and releases with respect thereto, or to cause
any such action to be taken.

ARTICLE IX
SEAL

The seal of the Corporation shall be circular, about two inches in
diameter, with the name of the Corporation engraved around the margin and the
word "SEAL" engraved across the center. It shall remain in the custody of the
Secretary and it, or a facsimile thereof, shall be affixed to all certificates
of the Corporation's shares. If deemed advisable by the Board of Directors, a
duplicate seal may be kept and used by any other officer of the Corporation, or
by any Transfer Agent of its shares.

ARTICLE X
AMENDMENTS

The Regulations of the Corporation may be amended or new Regulations may
be adopted by the shareholders at a meeting held for such purpose by an
affirmative vote of the holders of shares entitling them to exercise a majority
of the voting power of the Corporation on such proposal, or without a meeting by
written consent of the holders of shares entitling them to exercise a majority
of the voting power on such proposal; provided, however, that Article I,

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Section 2; Article III, Section 2; and Article III, Section 4; and this Article
X may not be amended, rescinded or otherwise modified except upon the
affirmative vote of the holders of shares entitling them to exercise two-thirds
(2/3) of the voting power of the Corporation at a meeting of shareholders held
for such purpose.

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<PAGE> 1
EXHIBIT (10)(b)

FIRSTMERIT CORPORATION

1992 STOCK OPTION PROGRAM

AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1997

<PAGE> 2

FIRSTMERIT CORPORATION
1992 STOCK OPTION PROGRAM
AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1997

TABLE OF CONTENTS

I. INTRODUCTION ....................................................... 1
A. Purpose of the Program ...................................... 1
B. Definitions ................................................. 1

II. PROGRAM ADMINISTRATION ............................................. 4
A. Administration .............................................. 4
B. Participation ............................................... 4
C. Maximum Number of Shares Available .......................... 4
D. Adjustments ................................................. 5
E. Registration Conditions ..................................... 5
F. Committee Action ............................................ 5

III. STOCK OPTIONS ...................................................... 6
A. Price ....................................................... 6
B. Period ...................................................... 6
C. Time of Exercise ............................................ 6
D. Exercise Procedures ......................................... 6
E. Payment ..................................................... 6
F. Special Rule for Incentive Stock Options .................... 7
G. Reload Stock Options..........................................7
H. Effect of Leaves of Absence ................................. 7
I. Termination of Employment ................................... 8

IV. DIVIDEND UNITS ..................................................... 8
A. Awards of Dividend Units .................................... 8
B. Valuation ................................................... 9
C. Payment ..................................................... 9
D. Termination of Employment ................................... 9
E. Acceleration of Payments .................................... 9

V. GENERAL PROVISIONS ................................................ 10
A. Amendment and Termination of Program ........................10
B. Government and Other Regulations ........................... 10
C. Other Compensation Plans and Programs ...................... 10
D. Miscellaneous Provisions ................................... 10
E. Effective Dates ............................................ 11

<PAGE> 3

FIRSTMERIT CORPORATION
1992 STOCK OPTION PROGRAM
AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1997

FIRSTMERIT CORPORATION (the "Company") hereby adopts this Amendment and
Restatement of the FirstMerit Corporation 1992 Stock Option Program.

R E C I T A L S:

A. The Company previously adopted the FirstMerit Corporation 1992 Stock
Option Program (the "Program").

B. Article V(A) of the Program provides that the Board of Directors of
the Company may amend the Program at any time and from time to time.

C. The Board of Directors of the Company previously adopted two
amendments to the Program, and in view of the extensiveness of such amendments,
has determined that an amendment and restatement of the Program is desirable.

IN CONSIDERATION OF THE FOREGOING, the Company hereby amends and
restates the Program, effective as of January 1, 1997, as follows:

I. INTRODUCTION

A. PURPOSE OF THE PROGRAM

FirstMerit Corporation has established the Program to further its
long-term financial success by creating the annual opportunity to key employees
of the Company, as hereinafter defined, and its majority-owned subsidiaries
("Subsidiaries") to receive stock and stock-based compensation whereby they can
share in achieving and sustaining such success. The Program also provides a
means to attract and retain the executive talent needed to achieve the Company's
long-term growth and profitability objectives.

B. DEFINITIONS

When used in the Program, the following terms shall have the meanings
set forth below:

"Award(s)" shall mean Incentive Stock Options, Non-Qualified Stock
Options, Reload Stock Options or Dividend Units granted under the Program.

"Company" shall mean FirstMerit Corporation and any successor in a
reorganization or similar transaction.

<PAGE> 4

"Board" shall mean the Board of Directors of the Company.

"Change of Control" shall mean (a) the attainment of beneficial
ownership by any Person (as defined herein) of capital stock of the Company, the
voting power of which constitutes 30 percent or more of the voting power of all
of the Company's outstanding capital stock; or (b) a change in the composition
of a majority of the Board during any period of two years or less, provided that
in determining such change, any Director whose election has been approved in
advance by at least two-thirds of the Directors then in office shall not be
considered a new director. No sale to underwriters or private placement of
capital stock by the Company, nor any acquisition by the Company, through
merger, purchase of assets or otherwise, effected in whole or in part by
issuance or reissuance of shares of its capital stock, shall constitute a Change
of Control.

For purposes of determining a Change of Control under the Program, the
following definitions shall be applicable:

1. The term "Person" shall mean any individual, corporation or other
entity.

2. Any Person shall be deemed to be the beneficial owner of any shares
of capital stock of the Company:

a. which that Person owns directly, whether or not of record,

b. which that Person has the right to acquire pursuant to any
agreement or understanding or upon exercise of conversion rights, warrants or
options, or otherwise,

c. which are beneficially owned, directly or indirectly
(including shares deemed owned through application of Paragraph 2.b. above), by
an "affiliate" or "associate" (as defined in the rules of the Securities and
Exchange Commission) of that Person, or

d. which are beneficially owned, directly or indirectly
(including shares deemed owned through application of Paragraph 2.b. above), by
any other Person with which that Person or his "affiliate" or "associate" has
any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of capital stock of the Corporation.

3. For purposes of determining whether a Person has acquired beneficial
ownership of 30 percent or more of the Company, the outstanding shares of
capital stock of the Company shall include shares deemed owned by such Person
through application of Paragraphs 2.b., 2.c., and 2.d. above, but shall not
include any other shares which may be issuable pursuant to any agreement or upon
exercise of conversion rights, warrants or options, or otherwise, but which are
not actually outstanding.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

<PAGE> 5

"Committee" shall mean the Salary, Benefits and Options Committee, or
such other Committee of the Board of the Company which shall be designated by
the Board to administer the Program. If the Board does not designate the Salary,
Benefits and Options Committee as the Committee, the Committee shall be composed
of three or more persons who are from time to time appointed to serve by the
Board. Each member of the Committee shall be a "disinterested person" within the
meaning of Rule 16b-3 of the Securities Exchange Act of 1934 or any successor
rule, as any such rule may be amended from time to time.

"Common Stock" shall mean the common stock of the Company, no par value
per share, and may be either stock previously authorized but unissued, or stock
reacquired by the Company.

"Disability" shall mean the inability of a Participant to perform the
services normally rendered due to any physical or mental impairment that can be
expected to be of either permanent or indefinite duration, as determined by the
Committee on the basis of appropriate medical evidence, and that results in the
Participant's Termination of Employment; provided, however, that with respect to
any Participant who has entered into an employment agreement with the Company or
its Subsidiaries, the term of which has not expired at the time a determination
concerning Disability is to be made, Disability shall have the meaning
attributed to "permanent disability" in such employment agreement.

"Fair Market Value" shall mean with respect to a given day, the closing
sales price of a share of Common Stock, as reported by such responsible
reporting service as the Committee may select, or if there were no transactions
in the Common Stock on such day, then the last preceding day on which
transactions took place. The foregoing notwithstanding, the Committee may
determine the Fair Market Value in such other manner as it may deem more
appropriate for Program purposes or as is required by applicable laws or
regulations.

"Incentive Stock Option" or "ISO" shall mean a right to purchase the
Company's Common Stock which is intended to comply with the terms and conditions
for an incentive stock option as set forth in Section 422 of the Code, or such
other sections of the Code as may be in effect from time to time.

"Non-Qualified Stock Option" or "NQSO" shall mean a right to purchase
the Company's Common Stock which is not intended to comply with the terms and
conditions for a tax-qualified stock option, as set forth in Section 422 of the
Code, or such other sections of the Code as may be in effect from time to time.

"Participant" shall mean an officer or full-time salaried employee of
the Company (including a member of the Board who is also an employee), or its
Subsidiaries who, in the judgment of the Committee, is in a position to make a
substantial contribution to the management, growth and success of the Company
and is thus designated by the Committee to receive an Award.

"Program" shall mean the Company's 1992 Stock Option Program, as amended
and restated effective January 1, 1997.

<PAGE> 6

"Reload Stock Option" shall mean a stock option granted to a Participant
who has paid for shares subject to option through the delivery of shares of
Common Stock having an aggregate Fair Market Value as determined on the date of
exercise equal to the option price.

"Retirement" shall mean a Participant's Termination of Employment by
reason of the Participant's retirement at his normal retirement date, pursuant
to and in accordance with a pension, retirement or similar plan or other regular
retirement practice of the Company or its Subsidiaries, or in accordance with
the early retirement provision(s) thereof.

"Termination of Employment" shall mean a cessation of the
employee-employer relationship between a Participant and the Company or its
Subsidiaries for any reason.

II. PROGRAM ADMINISTRATION

A. ADMINISTRATION

The Program shall be administered by the Committee, which subject to the
express provisions of the Program, shall have full and exclusive authority to
interpret the Program, to prescribe, amend and rescind rules and regulations
relating to the Program and to make all other determinations deemed necessary or
advisable in the implementation and administration of the Program; provided,
however, that subject to the express provisions hereof or unless required by
applicable law or regulation, no action of the Committee shall adversely affect
the terms and conditions of any Award made to, or any rights hereunder or under
any grant letter of, any Participant, without such Participant's consent. The
Committee's interpretation and construction of the Program shall be conclusive
and binding on all persons, including the Company and all Participants.

B. PARTICIPATION

The Committee shall, from time to time, make recommendations to the
Board with respect to the selection of Participants and the Award or Awards to
be granted to each Participant, and thereafter grant such Award or Awards upon
the approval of a majority of the members of the Board of Directors present and
voting upon such approval, who are "non-employee directors" within the meaning
of Rule 16b-3 of the Securities Exchange Act of 1934 or any successor rule, as
any such rule may be amended from time to time. In making its recommendations,
the Committee may take into account the nature of the services rendered or
expected to be rendered by the respective Participants, their present and
potential contributions to the Company's success, and such other factors as the
Committee in its discretion shall deem relevant.

C. MAXIMUM NUMBER OF SHARES AVAILABLE

The maximum number of shares which may be granted under the Program is
one million (1,000,000) plus shares reserved for issuance under the Company's
1982 Incentive Stock Option Plan (the "Prior Plan") for which options have not
been granted.

<PAGE> 7

No Incentive Stock Options shall be granted after January 1, 2002.

D. ADJUSTMENTS

In the event of stock dividends, stock splits, recapitalizations,
mergers, consolidations, combinations, exchanges of shares, spin-offs,
liquidations, reclassifications or other similar changes in the capitalization
of the Company, the number of shares of Common Stock available for grant under
this Program shall be adjusted proportionately or otherwise by the Board and,
where deemed appropriate, the number of shares covered by outstanding stock
options and the option price of outstanding stock options shall be similarly
adjusted. Also, in instances where another corporation or other business entity
is acquired by the Company, and the Company has assumed outstanding employee
option grants under a prior existing plan of the acquired entity, similar
adjustments are permitted at the discretion of the Committee. In the event of
any other change affecting the Common Stock reserved under the Program, such
adjustment, if any, as may be deemed equitable by the Board, shall be made to
give proper effect to such event.

E. REGISTRATION CONDITIONS

1. Unless issued pursuant to a registration statement under the
Securities Act of 1933, as amended, no shares shall be issued to a Participant
under the Program unless the Participant represents and agrees with the Company
that such shares are being acquired for investment and not with a view to the
resale or distribution thereof, or such other documentation as may be required
by the Company, unless in the opinion of counsel to the Company such
representation, agreement or documentation is not necessary to comply with such
Act.

2. Any restriction on the resale of shares shall be evidenced by an
appropriate legend on the stock certificate.

3. The Company shall not be obligated to deliver any Common Stock until
it has been listed on each securities exchange on which the Common Stock may
then be listed or until there has been qualification under or compliance with
such federal or state laws, rules or regulations as the Company may deem
applicable. The Company shall use reasonable efforts to obtain such listing,
qualification and compliance.

F. COMMITTEE ACTION

The Committee may, through Award agreements, limit its discretion under
this Program. To the extent such discretion is not specifically waived in an
Award agreement, the Committee shall retain such discretion.

<PAGE> 8

III. STOCK OPTIONS

All stock options granted to Participants under the Program shall be
evidenced by agreements which shall be subject to applicable provisions of the
Program, and such other provisions as the Committee may adopt, including the
following provisions:

A. PRICE

The option price per share of Non-Qualified Stock Options shall be set
by the Committee at the time of grant. The option price per share of Incentive
Stock Options shall not be less than 100 percent of the Fair Market Value of a
share of Common Stock on the date of grant.

B. PERIOD

An ISO shall not be exercisable for a term longer than ten years from
date of its grant. NQSOs shall have a term as established by the Committee.

C. TIME OF EXERCISE

The Committee may prescribe the timing of the exercise of the stock
option and any minimums and installment provisions and may accelerate the time
at which a stock option becomes exercisable, provided that with respect to ISOs,
no such acceleration shall result in a violation of Paragraph F of this Article
III. No stock option shall be exercisable until six months following the date of
grant.

D. EXERCISE PROCEDURES

A stock option, or portion thereof, shall be exercised by delivery of a
written notice of exercise to the Company, and payment of the full price of the
shares being purchased.

E. PAYMENT

The price of an exercised stock option, or portion thereof, may be paid:

1. in cash or by check, bank draft or money order payable to the order
of the Company,

2. through the delivery of shares of Common Stock owned by the
Participant, having an aggregate Fair Market Value as determined on the date of
exercise equal to the option price, or

3. by a combination of both 1 and 2 above.

The Committee may impose such limitations and prohibitions on the use of
any shares of Common Stock to exercise a stock option as it deems appropriate.

<PAGE> 9

F. SPECIAL RULE FOR INCENTIVE STOCK OPTIONS

If the aggregate Fair Market Value of Common Stock with respect to which
ISOs are exercisable for the first time by a Participant during any calendar
year (under this Program and all other plans of the Company or its parent and
Subsidiaries) exceeds $100,000, such ISOs shall be treated as NQSOs to the
extent of the excess. In applying the foregoing limitation, ISOs shall be taken
into account in the order in which they were granted and the Fair Market Value
of Common Stock subject to such ISOs shall be determined as of the date of
grant. If such limit is exceeded in any calendar year, the Company shall have
the right to designate which shares of Common Stock purchased pursuant to such
ISOs shall be treated as having been acquired by the Participant pursuant to an
ISO.

G. RELOAD STOCK OPTIONS

If a stock option is exercised while the Participant is employed by the
Company and the Participant pays for the shares subject to option through the
delivery of Common Stock having an aggregate Fair Market Value as determined on
the date of exercise equal to the option price, the Participant may be granted a
Reload Stock Option on the date of such exercise. The Award shall equal the
number of whole shares of Common Stock used to pay the purchase price, and the
exercise price of the Reload Stock Option shall equal the Fair Market Value of
the Common Stock on the date of grant. If the Company withholds shares of Common
Stock to cover applicable income and employment taxes related to the exercise of
an option, then the Award shall equal the number of whole shares of Common Stock
used to pay the purchase price less the number of shares withheld.

Subject to the provisions of the Plan or Award, the Reload Stock Option
may be exercised between its date of grant and the date of expiration of an
option. Unless otherwise provided in the Award, shares of stock acquired upon
the exercise of a Reload Stock Option will be restricted from sale for two
years. A Reload Stock Option shall be evidenced by an agreement containing such
other terms and conditions as the Committee approves. No Reload Stock Option
shall be granted with respect to a stock option exercised after the
Participant's Retirement, Disability, death or other Termination of Employment.
No Dividend Units shall be awarded in connection with a Reload Stock Option.

H. EFFECT OF LEAVES OF ABSENCE

It shall not be considered a Termination of Employment when a
Participant is placed by the Company or any of its Subsidiaries on military
leave, sick leave or other bona fide leave of absence. In case of such leave of
absence, the employment relationship for Program purposes shall be continued
until the later of the date when such leave of absence equals ninety days or
when the Participant's right to reemployment with the Company or any of its
Subsidiaries shall no longer be guaranteed either by statute or contract.

<PAGE> 10

I. TERMINATION OF EMPLOYMENT

In the event of Termination of Employment, the following provisions
shall apply with respect to ISOs and NQSOs unless waived by the Committee, or as
otherwise specifically provided in the Stock Option Agreement.

1. NQSOs and ISOs shall be exercisable for a period equal to the lesser
of five years or the remaining option term; provided, however, that if the
Participant elects to exercise the Participant's ISOs (a) later than three (3)
months after the date of the Participant's Termination of Employment due to
retirement or (b) twelve (12) months after the date of the Participant's
Termination of Employment due to disability, such ISOs shall be treated as NQSOs
under the Code for purposes of calculating the federal income tax applicable as
a result of the exercise of such ISOs and the subsequent disposition of the
acquired shares.

2. If a Participant's employment with the Company or any of its
Subsidiaries is terminated for any reason other than Death, Disability or
Retirement, all Awards under this Program shall be immediately canceled, except
that if the termination is by the Company or any of its Subsidiaries or any
reason other than misconduct or misfeasance, Participant shall have thirty (30)
days thereafter within which to exercise his options to the extent that the
options are otherwise exercisable immediately prior to such termination, and
further if such termination is attributable to a Change of Control, such Award
shall not be canceled but shall continue as though the Participant remained in
the employ of the Company or any of its Subsidiaries during the remaining option
term of the Award.

3. Notwithstanding the foregoing, the Committee may rescind the right to
exercise stock options following Termination of Employment if the Participant
has been found to be directly or indirectly engaged in any activity which is in
competition with the Company or its Subsidiaries or otherwise adverse to, or not
in the best interest of the Company or its Subsidiaries. Further, no option
agreement for ISOs may extend their exercise period beyond the time allowed by
the Code.

IV. DIVIDEND UNITS

A. AWARDS OF DIVIDEND UNITS

1. The Committee may, at its discretion, award one Dividend Unit to
Participants in the Program with respect to each share of Common Stock for which
an option has been granted. No Dividend Units shall be awarded in connection
with a Reload Stock Option.

2. An Award of a Dividend Unit by the Committee may be made only in
conjunction with a stock option for Common Stock granted to the Participant
under this Program.

<PAGE> 11

B. VALUATION

1. The amount payable to a Participant in respect of each Dividend Unit
awarded to such Participant shall be equal to the aggregate dividends actually
paid one share of Common Stock to the extent that such Participant held such
Dividend Unit on the record date established by the Board for payment of each
dividend. A Participant shall be deemed to have held a Dividend Unit from the
date on which the Award of such Dividend Unit was made (or such later date as
may be specified in the related grant letter) to and including the date on which
the term of the Dividend Unit expires.

2. The Committee shall, at the time it awards a Dividend Unit to a
Participant, specify the term of the Dividend Unit (which term shall not be
longer than the term of the stock option to which it is attached) and the period
of time during the term over which the Dividend Unit will accrue dividends.

C. PAYMENT

1. The amount payable to a Participant in respect of a Dividend Unit
shall be paid out by the Company to such Participant only at the date of
exercise of the stock option to which the Unit is attached. The Dividend Unit
shall expire upon the expiration of any stock option which has not been
exercised.

2. Upon payment to a Participant in respect of a Dividend Unit such
Dividend Unit shall be of no further force or effect.

D. TERMINATION OF EMPLOYMENT

In the event of Termination of Employment, any Dividend Unit shall
remain outstanding for the duration of the stock option to which it is attached
until paid upon exercise or until termination or expiration of such stock
option.

E. ACCELERATION OF PAYMENTS

Unless the Committee determines otherwise, in the event of a Change of
Control, the Company shall, promptly after such Change of Control, make payment
to each Participant in an amount equal to the aggregate amount accrued on the
Dividend Units held by such Participant on the date of such Change of Control.
Notwithstanding anything to the contrary or any grant letter, after such Change
of Control and for so long as a Participant holds any Dividend Unit and
dividends are accrued thereon, the Company shall make payment to the Participant
in respect of any such Dividend Unit at the same time as payment of dividends on
Common Stock is made.

<PAGE> 12

V. GENERAL PROVISIONS

A. AMENDMENT AND TERMINATION OF PROGRAM

The Board may, at any time and from time to time, suspend or terminate
the Program in whole or amend it from time to time in such respects as the Board
may deem appropriate, subject, however, to the regulatory requirements of
Section 16(b) of the Securities Exchange Act and the requirements of the Code.

B. GOVERNMENT AND OTHER REGULATIONS

The obligation of the Company to issue Awards under the Program shall be
subject to all applicable laws, rules and regulations, and to such approvals by
any government agencies as may be required.

C. OTHER COMPENSATION PLANS AND PROGRAMS

The Program shall not be deemed to preclude the implementation by the
Company and its Subsidiaries of other compensation plans or programs which may
be in effect from time to time.

D. MISCELLANEOUS PROVISIONS

1. NO RIGHT TO CONTINUE EMPLOYMENT: Nothing in the Program or in any
Award confers upon any Participant the right to continue in the employ of the
Company or its Subsidiaries or interferes with or restricts in any way the
rights of the Company or its Subsidiaries to discharge any Participant at any
time for any reason whatsoever, with or without cause.

2. NON-TRANSFERABILITY: No right or interest of any Participant in any
Award under the Program shall be (a) assignable or transferable, except by will
or the laws of descent and distribution or a valid beneficiary designation made
in accordance with procedures established by the Committee, or (b) liable for,
or subject to, any lien, obligation or liability. An ISO may be exercised only
by the Participant during his or her lifetime, or by his or her estate, or the
person who acquires the right to exercise such option by bequest or inheritance.

3. DESIGNATION OF BENEFICIARY: A Participant, in accordance with
procedures established by the Committee, may designate a person or persons to
receive, in the event of the Participant's death, (a) any payments with respect
to which the Participant would then be entitled, and (b) the right to continue
to participate in the Program to the extent of such Participant's outstanding
Awards. Such designation shall be made upon forms supplied by and delivered to
the Company and may be revoked in writing.

4. WITHHOLDING TAXES: The Company may require a payment from a
Participant to cover applicable withholding for income and employment taxes. The
Company reserves the right to offset such tax payment from any other funds which
may be due the Participant by the Company.

<PAGE> 13

5. PROGRAM EXPENSES: Any expenses of administering the Program shall be
borne by the Company.

6. CONSTRUCTION OF PROGRAM: The interpretation of the Program and the
application of any rules implemented hereunder shall be determined solely in
accordance with the laws of the State of Ohio.

7. UNFUNDED PROGRAM: The Program shall be unfunded, and the Company
shall not be required to segregate any assets which may at any time be
represented by Awards. Any liability of the Company to any person with respect
to an Award under this Program shall be based solely upon any obligations which
may be created by this Program; no such obligation of the Company shall be
deemed to be secured by any pledge or other encumbrance on any property of the
Company.

8. BENEFIT PLAN COMPUTATIONS: Any benefits received or amounts paid to a
Participant with respect to any Award granted under the Program shall not have
any effect on the level of benefits provided to or received by any Participant,
or the Participant's estate or beneficiary, as part of any employee benefit plan
(other than the Program) of the Company.

9. PRONOUNS, SINGULAR AND PLURAL: The masculine may be read as feminine,
the singular as plural and the plural as singular as necessary to give effect to
the Program.

E. EFFECTIVE DATES

The Program became effective on approval by shareholders of the Company
at the Company's Annual Shareholders Meeting in April 1992. The Program was
amended and restated by the Board in November, 1996 to be effective January 1,
1997. The Program and all outstanding Awards shall remain in effect until all
outstanding Awards have been exercised, expired or canceled.

<PAGE> 1
EXHIBIT (10)(c)

FIRSTMERIT CORPORATION

1992 DIRECTORS STOCK OPTION PROGRAM

<PAGE> 2

1992 DIRECTORS STOCK OPTION PROGRAM

TABLE OF CONTENTS

PAGE

I. INTRODUCTION ........................................................ 1
A. Purpose of the Program ....................................... 1
B. Definitions .................................................. 1

II. PROGRAM ADMINISTRATION .............................................. 3
A. Administration ............................................... 3
B. Participation ................................................ 3
C. Maximum Number of Shares Available ........................... 3
D. Adjustments .................................................. 3
E. Registration Conditions ...................................... 3

III. STOCK OPTIONS ....................................................... 4
A. Price ........................................................ 4
B. Period ....................................................... 4
C. Time of Exercise ............................................. 4
D. Exercise Procedures .......................................... 4
E. Payment ...................................................... 4
F. Termination of Service ....................................... 4

IV. DIVIDEND UNITS ...................................................... 5
A. Awards of Dividend Units ..................................... 5
B. Valuation .................................................... 5
C. Payment ...................................................... 5
D. Termination of Service ....................................... 5
E. Acceleration of Payments ..................................... 6

V. GENERAL PROVISIONS .................................................. 6
A. Amendment and Termination of Program ......................... 6
B. Government and Other Regulations ............................. 6
C. Other Compensation Plans and Programs ........................ 6
D. Miscellaneous Provisions ..................................... 6
E. Effective Dates .............................................. 7

<PAGE> 3

I. INTRODUCTION

A. PURPOSE OF THE PROGRAM

FirstMerit Corporation (the "Company") has established the Program to
further its long-term financial success by offering stock, and stock-based
compensation to non-employee directors of the Company whereby they can share in
achieving and sustaining such success.

B. DEFINITIONS

When used in the Program, the following terms shall have the meanings
set forth below:

"Award(s)" shall mean Non-Qualified Stock Options and Dividend Units
granted under the Program.

"Company" shall mean FirstMerit Corporation, an Ohio corporation and any
successor in a reorganization or similar transaction.

"Board" shall mean the Board of Directors of the Company.

For purposes of determining a Change of Control under the Program, the
following definitions shall be applicable:

1. The term "Person" shall mean any individual, corporation or other
entity.

2. Any Person shall be deemed to be the beneficial owner of any shares
of capital stock of the Company:

a. which that Person owns directly, whether or not of record,

b. which that Person has the right to acquire pursuant to any
agreement or understanding or upon exercise of conversion rights, warrants or
options, or otherwise,

<PAGE> 4

c. which are beneficially owned, directly or indirectly (including
shares deemed owned through application of Paragraph 2.b. above), by an
"affiliate" or "associate" (as defined in the rules of the Securities and
Exchange Commission) of that Person, or

d. which are beneficially owned, directly or indirectly (including
shares deemed owned through application of Paragraph 2.b. above), by any other
Person with which that Person or his "affiliate" or "associate" has any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of capital stock of the Company.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

"Common Stock" shall mean the common stock of the Company, no par value
per share, and may be either stock previously authorized but unissued, or stock
reacquired by the Company.

"Participant" shall mean a non-employee Director of the Company.

"Program" shall mean the Company's 1992 Directors Stock Option Program.

"Termination of Service" shall mean a cessation of the Director's
relationship with the Company for any reason.

<PAGE> 5

II. PROGRAM ADMINISTRATION

A. ADMINISTRATION

The Program shall be administered by the Secretary of the Company.
Subject to the express provisions of the Program, the Secretary shall have full
and exclusive authority to interpret the Program, and to make such
determinations deemed necessary or advisable in the implementation and
administration of the Program; provided, however, that subject to the express
provisions hereof or unless required by applicable law or regulation, no action
of the Secretary shall adversely affect the terms and conditions of any Award
made to, or any rights hereunder or under any grant letter of, any Participant,
without such Participant's consent.

B. PARTICIPATION

All Directors of the Company who are not also full-time employees of the
Company or a subsidiary shall be Participants in the Program and shall be
awarded options to purchase six hundred (600) shares each year on the date
following the annual shareholders meeting.

C. MAXIMUM NUMBER OF SHARES AVAILABLE

The maximum number of shares which may be granted under the Program is
one hundred thousand (100,000).

D. ADJUSTMENTS

E. REGISTRATION CONDITIONS

2. Any restriction on the resale of shares shall be evidenced by an
appropriate legend on the stock certificate.

<PAGE> 6

III. STOCK OPTIONS

All stock options granted to Participants under the Program shall be
evidenced by agreements which shall be subject to applicable provisions of the
Program:

A. PRICE: The option price per share shall be 100 percent of the
Fair Market Value of a share of Common Stock on the date of grant.

B. PERIOD: Any option granted under the Program shall be
exercisable for a term of ten years from date of its grant.

C. TIME OF EXERCISE: No option shall be exercisable until six
months following the date of grant.

D. EXERCISE PROCEDURES: A stock option, or portion thereof, shall
be exercised by delivery of a written notice of exercise to the
Company, and payment of the full price of the shares being purchased.

E. PAYMENT: The price of an exercised stock option, or portion
thereof, may be paid:

1. in cash or by check, bank draft or money order payable
to the order of the Company,

2. through the delivery of shares of Common Stock owned by
the Participant, having an aggregate Fair Market Value as
determined on the date of exercise equal to the option price, or

3. by a combination of both 1 and 2 above.

The Secretary may impose such limitations and prohibitions
on the use of any shares of Common Stock to exercise a stock
option as it deems appropriate.

F. TERMINATION OF SERVICE: In the event of Termination of
Service, the following provisions shall apply:

1. Discharge for Cause: All outstanding options shall be
cancelled at termination.

<PAGE> 7

2. Termination Other Than for Cause: Options shall be
exercisable for a period equal to the lesser of five years or the
remaining option term.

IV. DIVIDEND UNITS

A. AWARDS OF DIVIDEND UNITS

1. One Dividend Unit shall be awarded to Participants in the Program
with respect to each share of Common Stock for which an option has been granted.
When a Participant receives an Award of Dividend Units, the Secretary shall
cause to be issued to such Participant a grant letter specifying the number of
Dividend Units granted and the applicable terms and conditions of the Award.

2. An Award of a Dividend Units shall be made only in conjunction with a
stock option for Common Stock granted to the Participant under this Program.

B. VALUATION

1. The amount payable to a Participant in respect of each Dividend Unit
awarded to such Participant shall be equal to the aggregate dividends actually
paid on one share of Common Stock to the extent that such Participant held such
Dividend Unit on the record date established by the Board for payment of each
such dividend. A Participant shall be deemed to have held a Dividend Unit from
the date on which the Award of such Dividend Unit was made (or such later date
as may be specified in the related grant letter) to and including the date on
which the term of the Dividend Unit expires.

2. The term of a Dividend Unit shall be the term of the stock option to
which it is attached. However, Dividend Units will accrue dividends only for the
first five years following grant.

C. PAYMENT

1. The amount payable to a Participant in respect of a Dividend Unit
shall be paid out by the Company to such Participant only upon the exercise of
the option to which it is attached.

2. Upon payment to a Participant in respect of a Dividend Unit such
Dividend Unit shall be of no further force or effect.

D. TERMINATION OF SERVICE

In the event of Termination of Service, any Dividend Unit shall remain
outstanding for the duration of the stock option to which it is attached until
paid upon exercise, but it shall terminate upon termination, cancellation or
expiration of such stock option.

<PAGE> 8

E. ACCELERATION OF PAYMENTS

In the event of a Change of Control, the Company shall, promptly after
such Change of Control, make payment to each Participant in an amount equal to
the aggregate amount accrued on the Dividend Units held by such Participant on
the date of such Change of Control. Notwithstanding anything to the contrary or
any grant letter, after such Change of Control and for so long as a Participant
holds any Dividend Unit and dividends are accrued thereon, the Company shall
make payment to the Participant in respect of any such Dividend Unit at the same
time as payment of dividends on Common Stock is made.

V. GENERAL PROVISIONS

A. AMENDMENT AND TERMINATION OF PROGRAM

The Board may, at any time and from time to time, suspend or terminate
the Program in whole. The Program may not be amended without shareholder
approval.

B. GOVERNMENT AND OTHER REGULATIONS

The obligation of the Company to issue Awards under the Program shall be
subject to all applicable laws, rules and regulations, and to such approvals by
any government agencies as may be required.

C. OTHER COMPENSATION PLANS AND PROGRAMS

The Program shall not be deemed to preclude the implementation by the
Company of other compensation plans or programs which may be in effect from time
to time.

D. MISCELLANEOUS PROVISIONS

1. Non-Transferability: No right or interest of any Participant in any
Award under the Program shall be (a) assignable or transferable, except by will
or the laws of descent and distribution or a valid beneficiary designation made
in accordance with procedures established by the Secretary, or (b) liable for,
or subject to, any lien, obligation or liability.

2. Designation of Beneficiary: A Participant, in accordance with
procedures established by the Secretary, may designate a person or persons to
receive, in the event of the Participant's death, (a) any payments with respect
to which the Participant would then be entitled, and (b) the right to continue
to participate in the Program to the extent of such Participant's outstanding
Awards. Such designation shall be made upon forms supplied by and delivered to
the Company and may be revoked in writing.

<PAGE> 9

3. Withholding Taxes: The Company may require a payment from a
Participant to cover applicable withholding for income and employment taxes. The
Company reserves the right to offset such tax payment from any other funds which
may be due the Participant by the Company.

4. Program Expenses: Any expenses of administering the Program shall be
borne by the Company.

5. Construction of Program: The interpretation of the Program and the
application of any rules implemented hereunder shall be determined solely in
accordance with the laws of the State of Ohio.

6. Unfunded Program: The Program shall be unfunded, and the Company
shall not be required to segregate any assets which may at any time be
represented by Awards. Any liability of the Company to any person with respect
to an Award under this Program shall be based solely upon any obligations which
may be created by this Program; no such obligation of the Company shall be
deemed to be secured by any pledge or other encumbrance on any property of the
Company.

7. Pronouns. Singular and Plural: The masculine may be read as feminine,
the singular as plural and the plural as singular as necessary to give effect to
the Program.

E. EFFECTIVE DATES

The Program became effective on approval by shareholders of the Company
at the Company's Annual Shareholders Meeting in April, 1992. The Program has
been amended effective January 1, 1997 to make certain non-material changes. The
Program and all outstanding Awards shall remain in effect until all outstanding
awards have been exercised, expired or cancelled.

<PAGE> 1
EXHIBIT 10(e)

FIRSTMERIT CORPORATION

1997 STOCK PLAN

<PAGE> 2

FIRSTMERIT CORPORATION
1997 STOCK PLAN

TABLE OF CONTENTS

I. INTRODUCTION ..................................................... 1

A. Purpose of the Plan ..................................... 1
B. Definitions ............................................. 1

II. EMPLOYEES STOCK OPTION PROGRAM.................................... 5

A. Administration .......................................... 5
B. Participation ........................................... 5
C. Maximum Number of Shares Available ...................... 5
D. Adjustments ............................................. 5
E. Registration Conditions ................................. 6
F. Committee Action ........................................ 6
G. Stock Options.............................................6
H. Dividend Units............................................9
I. Amendment and Termination................................10

III. DIRECTORS STOCK OPTION PROGRAM .................................. 10

A. Administration ......................................... 10
B. Participation .......................................... 10
C. Maximum Number of Shares Available ..................... 11
D. Adjustments ............................................ 11
E. Registration Conditions ................................ 11
F. Stock Options............................................11
G. Dividend Units...........................................12
H. Amendment and Termination................................13

IV. RESTRICTED STOCK PROGRAM ........................................ 14

A. Administration ......................................... 14
B. Participation .......................................... 14
C. Maximum Number of Shares Available ..................... 15
D. Awards ................................................. 15
E. Restrictions ........................................... 16
F. Enforcement of Restrictions..............................16
G. Privileges of Employee-Participant.......................16
H. Non-Transferability......................................17
I. Withholding Taxes........................................17

<PAGE> 3

J. Lien on Shares..........................................17
K. Share Issuance and Transfer Restrictions................17
L. Acceleration on Change of Control.......................18
M. Effective Date and Duration.............................19
N. Exclusivity.............................................19
O. Amendment and Termination...............................19

V. GENERAL PROVISIONS ............................................. 19

A. Government and Other Regulations ...................... 19
B. Other Compensation Plans and Programs ................. 19
C. Miscellaneous Provisions .............................. 20
D. Effective Date ........................................ 22

<PAGE> 4

FIRSTMERIT CORPORATION
1997 STOCK PLAN

FIRSTMERIT CORPORATION (the "Company") hereby adopts this 1997 Stock
Plan ("Plan"), effective as of January 1, 1997, but subject to shareholder
approval at the 1997 Annual Shareholders Meeting. The number of shares of Common
Stock approved and reserved under the Plan is 1,000,000 for the Employees Stock
Option Program and the Restricted Stock Program, and 100,000 for the Directors
Stock Option Program. The maximum number of shares of Common Stock which can be
granted as part of the 1,000,000 shares under the Restricted Stock Program is
250,000.

I. INTRODUCTION

A. PURPOSE OF THE PLAN

FirstMerit Corporation has established the Plan to further its
long-term financial success by creating the opportunity to key employees and
non-employee Directors of the Company and its Subsidiaries to receive stock and
stock-based compensation whereby they can share in achieving and sustaining such
success. The Plan also provides a means to attract and retain the executive
talent needed to achieve the Company's long-term growth and profitability
objectives.

B. DEFINITIONS

When used in the Plan, the following terms shall have the meanings set
forth below:

"Award(s)" shall mean Incentive Stock Options, Non-Qualified Stock
Options, Reload Stock Options, Restricted Stock Awards or Dividend Units granted
under the Plan.

"Award Agreement" shall mean an agreement which shall evidence the
particular terms, conditions, rights and duties of the Company and the
Participant with respect to an Award.

"Board" shall mean the Board of Directors of the Company.

"Change of Control" shall mean (a) the attainment of beneficial
ownership by any Person (as defined herein) of capital stock of the Company, the
voting power of which constitutes 30 percent or more of the voting power of all
of the Company's outstanding capital stock; or (b) a change in the composition
of a majority of the Board during any period of two (2) years or less, provided
that in determining such change, any Director whose election has been approved
in advance by at least two-thirds (2/3) of the Directors then in office shall
not be considered a new Director. No sale to underwriters or private placement
of capital stock by the Company, nor any acquisition by the Company, through
merger, purchase of assets or otherwise, effected in whole or in part by
issuance or reissuance of shares of its capital stock, shall constitute a Change
of Control.

<PAGE> 5

For purposes of determining a Change of Control under the Plan, the
following definitions shall be applicable:

1. The term "Person" shall mean any individual, corporation or
other entity.

2. Any Person shall be deemed to be the beneficial owner of any
shares of capital stock of the Company:

a. which that Person owns directly, whether or not of
record,

b. which that Person has the right to acquire pursuant
to any agreement or understanding or upon exercise
of conversion rights, warrants or options, or
otherwise,

c. which are beneficially owned, directly or indirectly
(including shares deemed owned through application
of Paragraph 2.b. above), by an "affiliate" or
"associate" (as defined in the rules of the
Securities and Exchange Commission) of that Person,
or

d. which are beneficially owned, directly or indirectly
(including shares deemed owned through application of
Paragraph 2.b. above), by any other Person with which
that Person or his "affiliate" or "associate" has any
agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of
capital stock of the Company.

3. For purposes of determining whether a Person has acquired beneficial
ownership of 30 percent or more of the Company, the outstanding shares of
capital stock of the Company shall include shares deemed owned by such Person
through application of Paragraphs 2.b., 2.c. and 2.d. above, but shall not
include any other shares which may be issuable pursuant to any agreement or upon
exercise of conversion rights, warrants or options, or otherwise, but which are
not actually outstanding.

"Committee" shall mean the Compensation Committee of the Board, or such
other Committee of the Board which shall be designated by the Board to
administer the Plan. If the Board does not designate the Compensation Committee
as the Committee, the Committee will be composed of two (2) or more persons who
are from time to time appointed to serve by the Board. Each member of the
Committee will be a "non-employee director" within the meaning of Rule 16b-3 of
the Securities Exchange Act or any successor rule, as any such rule may be
amended from time to time and will qualify as an "outside director" within the
meaning of Code Section 162(m) ("Qualified Director"). A person may be appointed
to the Committee who does not qualify as a "non-employee director" if the
Committee adopts and follows a recusal procedure which qualifies under the
Section 16 Rules.

<PAGE> 6

"Company" shall mean FirstMerit Corporation and any successor in a
reorganization or similar transaction.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

"Common Stock" shall mean the common stock of the Company, no par value
per share, and may be either stock previously authorized but unissued, or stock
reacquired by the Company.

"Director" shall mean a duly elected member of the Board.

"Directors Stock Option Program" shall mean the stock option program
delineated in Article III of this Plan.

"Director-Participant" shall mean a Director who is not also a
full-time employee of the Company or any of its Subsidiaries.

"Disability" shall mean the inability of an Employee-Participant to
perform the services normally rendered due to any physical or mental impairment
that can be expected to be of either permanent or indefinite duration, as
determined by the Committee on the basis of appropriate medical evidence, and
that results in the Employee-Participant's Termination of Employment; provided,
however, that with respect to any Employee-Participant who has entered into an
employment agreement with the Company or any of its Subsidiaries, the term of
which has not expired at the time a determination concerning Disability is to be
made, Disability shall have the meaning attributed to "permanent disability" in
such employment agreement.

"Employees Stock Option Program" shall mean the stock option program,
as delineated in Article II of this Plan.

"Employee-Participant" shall mean an officer or full-time salaried
employee (including a Director who is also a full-time employee) of the Company
or any of its Subsidiaries who, in the judgment of the Committee, is in a
position to make a substantial contribution to the management, growth and
success of the Company and is thus designated by the Committee to receive an
Award.

"Fair Market Value" shall mean with respect to a given day, the closing
sales price of a share of Common Stock, as reported by such responsible
reporting service as the Committee may select, or if there were no transactions
in the Common Stock on such day, then the last preceding day on which
transactions took place. The foregoing notwithstanding, the Committee may
determine the Fair Market Value in such other manner as it may deem more
appropriate for Plan purposes or as is required by applicable laws or
regulations.

<PAGE> 7

"Participant" shall mean an Employee-Participant or a Director-
Participant.

"Plan" shall mean the Company's 1997 Stock Plan, as set forth herein.

"Reload Stock Option" shall mean an option granted to an
Employee-Participant who has paid for shares subject to option through the
delivery of shares of Common Stock having an aggregate Fair Market Value as
determined on the date of exercise equal to the option price.

"Restricted Shares" shall mean those shares of Common Stock reserved
for issuance as Awards under the Restricted Stock Program, as further provided
in Article IV(D).

"Restricted Stock Program" shall mean the restricted stock program, as
delineated in Article IV of this Plan.

"Retirement" shall mean an Employee-Participant's Termination of
Employment by reason of retirement at his normal retirement date, pursuant to
and in accordance with a pension, retirement or similar plan or other regular
retirement practice of the Company or any of its Subsidiaries, or in accordance
with the early retirement provision(s) thereof.

"Securities Act" shall mean the Securities Act of 1933, as amended.

"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.

"Subsidiaries" shall mean the majority-owned subsidiaries of the
Company.

"Termination of Employment" shall mean a cessation of the
employee-employer relationship between an Employee-Participant and the Company
or its Subsidiaries for any reason.

"Termination of Service" shall mean a cessation of the Director's
relationship with the Company for any reason.

<PAGE> 8

II. EMPLOYEES STOCK OPTION PROGRAM

A. ADMINISTRATION

The Employees Stock Option Program shall be administered by the
Committee, which, subject to the express provisions of the Employees Stock
Option Program, shall have full and exclusive authority to interpret the
Employees Stock Option Program, to prescribe, amend and rescind rules and
regulations relating to the Employees Stock Option Program and to make all other
determinations deemed necessary or advisable in the implementation and
administration of the Employees Stock Option Program; provided, however, that
subject to the express provisions hereof or unless required by applicable law or
regulation, no action of the Committee shall adversely affect the terms and
conditions of any Award made to, or any rights hereunder or under any Award
Agreement of, any Employee-Participant, without such Employee-Participant's
consent. The Committee's interpretation and construction of the Employees Stock
Option Program shall be conclusive and binding on all persons, including the
Company and all Employee-Participants.

B. PARTICIPATION

The Committee shall, from time to time, make recommendations to the
Board with respect to the selection of Employee-Participants and the Award or
Awards to be granted to each Employee-Participant, and thereafter grant such
Award or Awards upon the approval of a majority of the members of the Board
present and voting upon such approval, who are Qualified Directors. In making
its recommendations, the Committee may take into account the nature of the
services rendered or expected to be rendered by the respective
Employee-Participants, their present and potential contributions to the
Company's success, and such other factors as the Committee in its discretion
shall deem relevant.

C. MAXIMUM NUMBER OF SHARES AVAILABLE

The maximum number of shares which may be granted under the Employees
Stock Option Program is one million (1,000,000) shares, less shares granted
under the Restricted Stock Program.

No Incentive Stock Options shall be granted after January 1, 2007, or
such other period required under the Code.

D. ADJUSTMENTS

<PAGE> 9

assumed outstanding employee option grants under a prior existing plan of the
acquired entity, similar adjustments are permitted at the discretion of the
Committee. In the event of any other change affecting the Common Stock reserved
under the Employees Stock Option Program, such adjustment, if any, as may be
deemed equitable by the Board, shall be made to give proper effect to such
event.

E. REGISTRATION CONDITIONS

Unless issued pursuant to a registration statement under the Securities
Act, no shares shall be issued to an Employee-Participant under the Employees
Stock Option Program unless the Employee-Participant represents to and agrees
with the Company that such shares are being acquired for investment and not with
a view to the resale or distribution thereof, or such other documentation as may
be required by the Company unless, in the opinion of counsel to the Company,
such representation, agreement or documentation is not necessary to comply with
the Securities Act.

Any restriction on the resale of shares shall be evidenced by an
appropriate legend on the stock certificate.

The Company shall not be obligated to deliver any Common Stock until it
has been listed on each securities exchange on which the Common Stock may then
be listed or until there has been qualification under or compliance with such
federal or state laws, rules or regulations as the Company may deem applicable.
The Company shall use reasonable efforts to obtain such listing, qualification
and compliance.

F. COMMITTEE ACTION

The Committee may, through Award Agreements, limit its discretion under
this Employees Stock Option Program. To the extent such discretion is not
specifically waived in an Award Agreement, the Committee shall retain such
discretion.

G. STOCK OPTIONS

All stock options granted to Employee-Participants under the Employees
Stock Option Program shall be evidenced by Award Agreements which shall be
subject to applicable provisions of the Employees Stock Option Program, and such
other provisions as the Committee may adopt, including the following provisions:

1. PRICE. The option price per share of Non-Qualified Stock
Options ("NQSOs") shall be set by the Committee at the time of
grant. The option price per share of Incentive Stock Options
("ISOs") shall not be less than 100 percent of the Fair Market
Value of a share of Common Stock on the date of grant. If a
NQSO is to meet the requirements of Section 162(m) of the
Code, it shall be issued at Fair Market Value.

2. PERIOD. An ISO shall not be exercisable for a term longer
than ten (10) years from date of grant. NQSOs shall have a
term as established by the Committee.

<PAGE> 10

3. TIME OF EXERCISE. The Committee may prescribe the timing of
the exercise of the stock option and any minimums and
installment provisions and may accelerate the time at which a
stock option becomes exercisable, provided that with respect
to ISOs, no such acceleration shall result in a violation of
Section 6 of this Paragraph G.

4. EXERCISE PROCEDURES. A stock option, or portion thereof,
shall be exercised by delivery of a written notice of exercise
to the Company and payment of the full price of the shares
being purchased.

5. PAYMENT. The price of an exercised stock option, or portion
thereof, may be paid pursuant to Paragraph V.C.11.

6. SPECIAL RULE FOR INCENTIVE STOCK OPTIONS. If the aggregate
Fair Market Value of Common Stock with respect to which ISOs
are exercisable for the first time by an Employee-Participant
during any calendar year (under this Employees Stock Option
Program and all other plans of the Company and its
Subsidiaries) exceeds One Hundred Thousand Dollars ($100,000),
such ISOs shall be treated as NQSOs to the extent of the
excess. In applying the foregoing limitation, ISOs shall be
taken into account in the order in which they were granted,
and the Fair Market Value of Common Stock subject to such ISOs
shall be determined as of the date of grant. If such limit
is exceeded in any calendar year, the Company shall have the
right to designate which shares of Common Stock purchased
pursuant to such ISOs shall be treated as having been acquired
by the Employee-Participant pursuant to an ISO.

7. RELOAD STOCK OPTIONS. A Reload Stock Option may be granted
by the Committee in an Award Agreement. If a reload option
is granted and a stock option is exercised while the
Employee-Participant is employed by the Company and the
Employee-Participant pays for the shares subject to option
through the delivery of Common Stock having an aggregate Fair
Market Value as determined on the date of exercise equal to
the option price, the Employee-Participant will be granted a
Reload Stock Option on the date of such exercise. The Award
shall equal the number of whole shares of Common Stock used
to pay the purchase price, and the exercise price of the
Reload Stock Option shall equal the Fair Market Value of the
Common Stock on the date of grant. If the Company withholds
shares of Common Stock to cover applicable income and
employment taxes related to the exercise of an option, then
the Award shall equal the number of whole shares of Common
Stock used to pay the purchase price less the number of
shares withheld.

Subject to the provisions of the Employees Stock Option
Program, the Reload Stock Option may be exercised between its
date of grant and the date of expiration of an option. Shares
of stock acquired upon the exercise of a Reload Stock Option
are restricted from sale for two years. A Reload Stock Option
shall be evidenced by an Award Agreement containing such other
terms and conditions as the Committee approves. No Reload
Stock Option shall be granted with respect to a stock option

<PAGE> 11

exercised after the Employee-Participant's Retirement,
Disability, death or other Termination of Employment. No
Dividend Units shall be granted in connection with a Reload
Stock Option.

8. EFFECT OF LEAVES OF ABSENCE. It shall not be considered a
Termination of Employment when an Employee-Participant is
placed by the Company or any of its Subsidiaries on military
leave, sick leave or other bona fide leave of absence. In
case of such leave of absence, the employment relationship
for Employees Stock Option Program purposes shall be
continued until the later of the date when such leave of
absence equals ninety (90) days or when the Employee-
Participant's right to reemployment with the Company or any
of its Subsidiaries shall no longer be guaranteed either by
statute or contract.

9. TERMINATION OF EMPLOYMENT. In the event of Termination of
Employment, the following provisions shall apply with respect
to ISOs and NQSOs unless waived by the Committee, or as
otherwise specifically provided in the Award Agreement.

a. TERMINATION DUE TO DEATH, DISABILITY OR RETIREMENT.
NQSOs and ISOs shall be exercisable for a period
equal to the lesser of five (5) years or the
remaining option term; provided, however, that if the
Employee-Participant elects to exercise his ISOs (i)
later than three (3) months after the date of his
Termination of Employment due to Retirement or (ii)
twelve (12) months after the date of his Termination
of Employment due to Disability, such ISOs shall be
treated as NQSOs under the Code for purposes of
calculating the federal income tax applicable as a
result of the exercise of such ISOs and the
subsequent disposition of the acquired shares.

b. OTHER TERMINATION. If an Employee-Participant's
employment with the Company or any of its
Subsidiaries is terminated for any reason other than
death, Disability or Retirement, all Awards under
this Employees Stock Option Program shall be
immediately canceled, except that if the termination
is by the Company or any of its Subsidiaries or for
any reason other than misconduct or misfeasance, the
Employee-Participant shall have thirty (30) days
thereafter within which to exercise his options to
the extent that the options are otherwise exercisable
immediately prior to such termination; and further,
if such termination is attributable to a Change of
Control, such Award shall not be canceled but shall
continue as though the Employee-Participant remained
in the employ of the Company or any of its
Subsidiaries during the remaining option term of the
Award.

c. LIMITATIONS ON EXERCISE. Notwithstanding the
foregoing, the Committee may rescind the right to
exercise stock options following Termination of
Employment if the Employee-Participant has been found
to be directly or indirectly engaged in any activity
which is in competition with the Company

<PAGE> 12

or any of its Subsidiaries or is otherwise adverse
to, or not in the best interest of, the Company or
any of its Subsidiaries. Further, no option
agreement for ISOs may extend their exercise period
beyond the time allowed by the Code.

H. DIVIDEND UNITS

1. AWARDS OF DIVIDEND UNITS

a. The Committee may, at its discretion, award to an
Employee-Participant one (1) Dividend Unit with
respect to each share of Common Stock for which an
option has been granted under the Employees Stock
Option Program. No Dividend Units shall be awarded in
connection with a Reload Stock Option.

b. An Award of a Dividend Unit by the Committee may be
made only in conjunction with a stock option for
Common Stock granted to the Employee-Participant
under the Employees Stock Option Program.

2. VALUATION

a. The amount payable to an Employee-Participant in
respect of each Dividend Unit awarded to such
Employee-Participant shall be equal to the aggregate
dividends actually paid on one (1) share of Common
Stock to the extent that such Employee-Participant
held such Dividend Unit on the record date
established by the Board for payment of each such
dividend. An Employee-Participant shall be deemed
to have held a Dividend Unit from the date on which
the Award of such Dividend Unit was made (or such
later date as may be specified in the related Award
Agreement) to and including the date on which the
term of the Dividend Unit expires.

b. The Committee shall, at the time it awards a Dividend
Unit to an Employee-Participant, specify the term of
the Dividend Unit (which term shall not be longer
than the term of the stock option to which it is
attached) and the period of time during the term over
which the Dividend Unit will accrue dividends.

3. PAYMENT

a. The amount payable to an Employee-Participant in
respect of a Dividend Unit shall be paid out by the
Company to such Employee-Participant only at the date
of exercise of the stock option to which the Dividend
Unit is attached. The Dividend Unit shall expire upon
the expiration of any stock option which has not been
exercised.

b. Upon payment to an Employee-Participant in respect
of a Dividend Unit, such Dividend Unit shall be of no
further force or effect.

<PAGE> 13

4. TERMINATION OF EMPLOYMENT. In the event of Termination of
Employment, any Dividend Unit shall remain outstanding for the
duration of the stock option to which it is attached until
paid upon exercise or until termination or expiration of such
stock option.

5. ACCELERATION OF PAYMENTS. Unless the Committee determines
otherwise, in the event of a Change of Control, the Company
shall, promptly after such Change of Control, make payment to
each Employee-Participant in an amount equal to the aggregate
amount accrued on the Dividend Units held by such Employee-
Participant on the date of such Change of Control.
Notwithstanding anything to the contrary or any Award
Agreement, after such Change of Control and for so long as an
Employee-Participant holds any Dividend Unit and dividends are
accrued thereon, the Company shall make payment to the
Employee-Participant in respect of any such Dividend Unit at
the same time as payment of dividends on Common Stock is made.

I. AMENDMENT AND TERMINATION

The Board may, at any time and from time to time, suspend or terminate
the Employees Stock Option Program in whole or amend it from time to time in
such respects as the Board may deem appropriate, subject, however, to the
regulatory requirements of Section 16(b) of the Securities Exchange Act and the
requirements of the Code.

III. DIRECTORS STOCK OPTION PROGRAM

A. ADMINISTRATION

The Directors Stock Option Program is a self-executing grant program
which shall be administered by the Secretary of the Company. Subject to the
express provisions of the Directors Stock Option Program, the Secretary shall
have full and exclusive authority to interpret the Directors Stock Option
Program, and to make such determinations deemed necessary or advisable in the
implementation and administration of the Directors Stock Option Program;
provided, however, that subject to the express provisions hereof or unless
required by applicable law or regulation, no action of the Secretary shall
adversely affect the terms and conditions of any Award made to, or any rights
hereunder or under any Award Agreement of, any Director-Participant without
such Director-Participant's consent.

B. PARTICIPATION

All Directors who are not also full-time employees of the Company or a
Subsidiary shall be Director-Participants in the Directors Stock Option Program
and shall be awarded options to purchase one thousand two hundred (1,200) shares
each year on the date following the annual shareholders meeting.

<PAGE> 14

C. MAXIMUM NUMBER OF SHARES AVAILABLE

The maximum number of shares which may be granted under this Directors
Stock Option Program is one hundred thousand (100,000) shares.

D. ADJUSTMENTS

E. REGISTRATION CONDITIONS

Unless issued pursuant to a registration statement under the Securities
Act, no shares shall be issued to a Director-Participant under the Directors
Stock Option Program unless the Director-Participant represents to and agrees
with the Company that such shares are being acquired for investment and not with
a view to the resale or distribution thereof, or such other documentation as may
be required by the Company unless, in the opinion of counsel to the Company,
such representation, agreement or documentation is not necessary to comply with
the Securities Act.

Any restriction on the resale of shares shall be evidenced by an
appropriate legend on the stock certificate.

F. STOCK OPTIONS

All stock options granted to Director-Participants under the Directors
Stock Option Program shall be evidenced by Award Agreements which shall be
subject to applicable provisions of the Directors Stock Option Program,
including the following provisions:

1. PRICE. The option price per share shall be 100 percent of the
Fair Market Value of a share of Common Stock on the date of
grant.

2. PERIOD. Any option granted under the Directors Stock Option
Program shall be exercisable for a term of ten (10) years
from the date of grant.

3. TIME OF EXERCISE. Will be established by the Committee.

<PAGE> 15

4. EXERCISE PROCEDURES. A stock option, or portion thereof,
shall be exercised by delivery of a written notice of exercise
to the Company and payment of the full price of the shares
being purchased.

5. PAYMENT. The price of an exercised stock option, or portion
thereof, may be paid pursuant to Paragraph V.C.11.

6. TERMINATION OF SERVICE. In the event of Termination of
Service, the following provisions shall apply:

a. DISCHARGE FOR CAUSE. All outstanding options shall
be canceled at termination.

b. TERMINATION OTHER THAN FOR CAUSE. Options shall be
exercisable for a period equal to the lesser of five
(5) years or the remaining option term.

G. DIVIDEND UNITS

1. AWARDS OF DIVIDEND UNITS

a. One (1) Dividend Unit shall be awarded to a
Director-Participant with respect to each share of
Common Stock for which an option has been granted
under the Directors Stock Option Program. When a
Director-Participant receives an Award of Dividend
Units, the Secretary shall cause to be issued to such
Director-Participant an Award Agreement specifying
the number of Dividend Units granted and the
applicable terms and conditions of the Award.

b. An Award of a Dividend Unit shall be made only in
conjunction with a stock option for Common Stock
granted to the Director-Participant under this
Directors Stock Option Program.

2. VALUATION

a. The amount payable to a Director-Participant in
respect of each Dividend Unit awarded to such
Director-Participant shall be equal to the aggregate
dividends actually paid on one share of Common Stock
to the extent that such Director-Participant held
such Dividend Unit on the record date established
by the Board for payment of each such dividend. A
Director-Participant shall be deemed to have held a
Dividend Unit from the date on which the Award of
such Dividend Unit was made (or such later date as
may be specified in the related grant letter) to and
including the date on which the term of the Dividend
Unit expires.

<PAGE> 16

b. The term of a Dividend Unit shall be the term of the
stock option to which it is attached. However,
Dividend Units will accrue dividends only for the
first five (5) years following grant.

3. PAYMENT

a. The amount payable to a Director-Participant in
respect of a Dividend Unit shall be paid out by the
Company to such Director-Participant only upon the
exercise of the option to which it is attached.

b. Upon payment to a Director-Participant in respect of
a Dividend Unit, such Dividend Unit shall be of no
further force or effect.

4. TERMINATION OF SERVICE. In the event of Termination of
Service, any Dividend Unit shall remain outstanding for the
duration of the stock option to which it is attached until
paid upon exercise, but it shall terminate upon termination,
cancellation or expiration of such stock option.

5. ACCELERATION OF PAYMENTS. In the event of a Change of
Control, the Company shall, promptly after such Change of
Control, make payment to each Director-Participant in an
amount equal to the aggregate amount accrued on the Dividend
Units held by such Director-Participant on the date of such
Change of Control. Notwithstanding anything to the contrary
or any Award Agreement, after such Change of Control and for
so long as a Director-Participant holds any Dividend Unit
and dividends are accrued thereon, the Company shall make
payment to the Director-Participant in respect of any such
Dividend Unit at the same time as payment of dividends on
Common Stock is made.

H. AMENDMENT AND TERMINATION

The Board may, at any time and from time to time, amend, suspend or
terminate the Directors Stock Option Program, subject to the applicable
requirements and restrictions of the Code and securities laws. The Directors
Stock Option Program may not be materially amended without shareholder approval.

<PAGE> 17

IV. RESTRICTED STOCK PROGRAM

A. ADMINISTRATION

The Restricted Stock Program shall be administered by the Committee. A
majority of members of the Committee shall constitute a quorum, and all
determinations of the Committee shall be made by a majority of its members. Any
determination of the Committee under the Restricted Stock Program may be made
without notice or meeting, by a writing signed by a majority of the Committee
members.

In accordance with and subject to the provisions of the Restricted
Stock Program, the Committee shall, from time to time, recommend to the Board:

1. the Employee-Participants from those employees meeting the
eligibility criteria described in Paragraph B,

2. the number of shares to be subject to each Award,

3. the time at which Awards are made,

4. the duration and nature of Award restrictions,

5. fix such other provisions of the Awards as may be deemed
necessary or desirable, consistent with the terms of the
Restricted Stock Program, and

6. the form or forms of the Award Agreements with Employee-
Participants.

The Committee shall have the authority, subject to the provisions of
the Restricted Stock Program, to establish, adopt and revise such rules and
regulations relating to the Restricted Stock Program as it may deem necessary or
desirable for the administration of the Restricted Stock Program. Each
determination, interpretation or other action made or taken by the Committee
pursuant to the provisions of the Restricted Stock Program shall be conclusive
and binding for all purposes and on all persons, including without limitation
the Company, the stockholders of the Company, the Committee and each of the
members thereof, the Board, officers and employees of the Company and the
Employee-Participants and their respective successors in interest.

B. PARTICIPATION

Employee-Participants shall be such key employees (including officers)
of the Company and any present or future Subsidiary as the Committee, in its
sole discretion, determines to be mainly responsible for the success and future
growth and profitability of the Company and value to its stockholders and whom
the Committee may designate from time to time to receive Awards under the
Restricted Stock Program. Awards may be granted under this Restricted Stock
Program to persons who have previously received Awards or other benefits under
this or other plans of the Company.

<PAGE> 18

C. MAXIMUM NUMBER OF SHARES AVAILABLE

The maximum number of shares which may be granted under the Restricted
Stock Program is two hundred fifty thousand (250,000) shares, which may be
authorized but unissued or treasury shares.

Any shares subject to Awards may thereafter be subject to new Awards
under this Restricted Stock Option Program if shares of Common Stock are issued
under such Awards and are thereafter reacquired by the Company pursuant to
rights reserved by the Company upon issuance thereof, including, without
limitation, the forfeiture of shares subject to an Award prior to the lapse of
restrictions.

If the Company shall at any time change the number of issued shares of
Common Stock without new considerations to the Company (by stock dividends,
stock splits or similar transactions), the total number of shares reserved for
issuance under the Restricted Stock Option Program shall be adjusted
proportionately. Awards may also contain provisions for their continuation or
for other equitable adjustments after changes in the Common Stock resulting from
reorganization, sale, merger, consolidation or similar circumstances.

D. AWARDS

Awards may consist of grants of Restricted Shares to
Employee-Participants as a bonus for service rendered to the Company without
other payment therefor or for payment at less than Fair Market Value. In
addition to the restrictions described in Paragraph E, any Award under the
Restricted Stock Option Program may be subject to such other provisions (whether
or not applicable to an Award to any other Employee-Participant) as the
Committee deems appropriate, including, without limitation, provisions for the
forfeiture of and restrictions on the sale, resale or other disposition of
shares acquired under any Award, provisions giving the Company the right to
repurchase shares acquired under any Award, provisions to comply with federal
and state securities laws, or understandings or conditions as to the
Employee-Participant's employment in addition to those specifically provided for
under the Restricted Stock Option Program.

<PAGE> 19

E. RESTRICTIONS

An Employee-Participant shall not have a right to retain any Restricted
Shares granted under an Award unless and until such restrictions have by their
terms lapsed. The lapsing of such restrictions is referred to herein as vesting,
and the shares after Vesting has occurred are referred to herein as vested
shares. The restrictions which the Committee may place on the Awards include,
without limitation, the Employee-Participant's continued employment with the
Company for certain periods of time as determined by the Committee and the
attainment of various performance goals by the Employee-Participant and/or the
Company as specified by the Committee with respect to such Award. The Committee
may, in its sole discretion, require different periods of employment or
different performance goals with respect to different Employee-Participants,
with respect to different Awards or with respect to separate, designated
portions of an Award. The Committee may, in its sole discretion, terminate
restrictions on shares issued pursuant to an Award prior to the time such
restrictions otherwise would have lapsed. Any Restricted Shares granted under an
Award which have not become Vested Shares on or before the termination date, if
any, set forth in the Award Agreement shall permanently be forfeited, and shall
thereafter become available for reissuance under the Plan.

F. ENFORCEMENT OF RESTRICTIONS

The Committee, in its sole discretion, may employ one or more methods
of enforcing the restrictions referred to in Paragraphs E, G, H and J including,
without limitation, the following:

1. placing a legend on the stock certificates referring to the
restrictions,

2. requiring the Employee-Participant to keep stock certificates,
duly endorsed, in the custody of the Company or its designated
agent while the restrictions remain in effect,

3. not issuing certificates for Restricted Shares until the
shares become Vested Shares, or

4. retaining a possessory lien in the Award Shares as provided
in Paragraph J below.

G. PRIVILEGES OF EMPLOYEE-PARTICIPANT

Restricted Shares shall constitute issued and outstanding shares of
the Company for all corporate purposes, and the Employee-Participant shall have
all voting and (subject to any Award restrictions) all dividend, liquidation and
other rights with respect to Restricted Shares while the corresponding Award
remains in effect, as if such Employee-Participant were a holder of record of
unrestricted shares of Common Stock. Notwithstanding the foregoing, prior to the
time at which a Restricted Share becomes a Vested Share, the Employee-
Participant's right to assign or transfer such Restricted Share shall be subject
to the limitations of Paragraph H. Certificates representing Restricted Shares
shall bear a restrictive legend disclosing the restrictions, the existence of
the Restricted Stock Option Program and the existence of the applicable Award.

<PAGE> 20

H. NON-TRANSFERABILITY

No right or interest of any Employee-Participant in any Award made
pursuant to the Restricted Stock Option Program shall, prior to the satisfaction
of all restrictions applicable thereto, be assignable or transferable, in whole
or in part, during the lifetime of the Employee-Participant, either voluntarily
or involuntarily, or be made subject to any lien (except as provided in
Paragraphs F and J), directly or indirectly, by operation of law or otherwise,
including execution, levy, garnishment, attachment, pledge or bankruptcy. In the
event of an Employee-Participant's death, his right and interest in any Award
shall, to the extent provided in the Award, be transferable by testamentary will
or the laws of descent and distribution, and the issuance of any shares subject
to an Award shall be made to the Employee-Participant's legal representatives,
heirs or legatees upon furnishing the Committee with evidence satisfactory to
the Committee of such status.

I. WITHHOLDING TAXES

The Company is entitled to withhold and deduct or take such other
action as delineated in Section V.C.4.

J. LIEN ON SHARES

The Company may, in its sole discretion, require that an Employee-
Participant, as a condition to the receipt of an Award, grant to the Company a
possessory lien on the Restricted Shares in order to secure retransfer of the
shares into the name of the Company, and ensure adequate provision for any tax
withholding obligations arising with respect to such Award, and to that end,
may require that certificates evidencing Restricted Shares be deposited by the
Employee-Participant with the Company, together with stock powers or other
instruments of assignment, each endorsed in blank, which will permit the
transfer to the Company of all or any portion of the Restricted Shares which are
forfeited or required to be retained to satisfy the Employee-Participant's
withholding obligations to the Company.

K. SHARE ISSUANCE AND TRANSFER RESTRICTIONS

1. SHARE ISSUANCE. Notwithstanding any other provision of the
Restricted Stock Program or any Award Agreement entered into
pursuant hereto, the Company shall not be required to issue or
deliver any certificate for shares under this Restricted Stock
Program unless and until both of the following are satisfied:

a. either:

i. there shall be in effect with respect to
such shares a registration statement under
the Securities Act and any applicable state
securities laws, if the Committee, in its
sole discretion, shall have determined to
file, cause to become effective and maintain
the effectiveness of such registration
statement, or

<PAGE> 21

ii. if the Committee has determined not to so
register the shares, exemptions from
registration under the Securities Act and
applicable state securities laws shall be
available for such issuance as determined
by counsel for the Company, and there shall
have been received from the Employee-
Participant (or in the event of death or
Disability, the Employee-Participant's
heir(s) or legal representative(s)) any
representations or agreements requested by
the Company in order to permit such issuance
to be made pursuant to such exemptions, and

b. there shall have been obtained any other consent,
approval or permit from any state or federal
government agency which the Committee shall, in its
sole discretion and upon the advice of counsel, deem
necessary or advisable.

2. TRANSFERS OF VESTED SHARES. Vested Shares may not be sold,
assigned, transferred, pledged, encumbered or otherwise
disposed of (whether voluntarily or involuntarily) except
pursuant to registration under the Securities Act and
applicable state securities laws or pursuant to exemptions
from such registrations. The Company may condition the sale,
assignment, transfer, pledge, encumbrance or other disposition
of such shares not issued pursuant to an effective and current
registration statement under the Securities Act and all
applicable state securities laws, on the receipt from the
party to whom the shares are to be so transferred of any
representations or agreements requested by the Company in
order to permit such transfer to be made.

3. LEGENDS. Unless a registration under the Securities Act is
in effect with respect to the issuance or transfer of Vested
Shares, each certificate representing such shares will be
endorsed with a legend in the form determined necessary by the
Committee or its counsel.

L. ACCELERATION ON CHANGE OF CONTROL

The Committee may provide, in its sole discretion, in one or more
Awards, that notwithstanding the provisions of each Award which would result in
a forfeiture as a result of the Employee-Participant's termination of employment
with the Company prior to the Vesting of Restricted Shares, the Restricted
Shares subject to such Award shall immediately become Vested Shares as a result
of a Change of Control. Notwithstanding anything to the contrary in the
Restricted Stock Option Program, unless expressly provided to the contrary in
the Award Agreement, if Restricted Shares experience an acceleration in Vesting
on a Change of Control as permitted by the preceding sentence, the portion of
the Restricted Shares which experience such acceleration will be limited to that
number which will not cause or contribute to an "excess parachute payment" with
respect to the Employee-Participant, as reasonably determined by the Committee
in accordance with Section 280G of the Code.

<PAGE> 22

M. EFFECTIVE DATE AND DURATION

The Restricted Stock Option Program shall continue in effect until it
is terminated by action of the Board, but such termination shall not affect the
then outstanding terms of any Award. No Award shall be granted more than ten
(10) years after the date of adoption of the Restricted Stock Option Program;
provided, however, that the terms and conditions applicable to any Award granted
within such period may thereafter be amended or modified by mutual agreement
between the Company and the Employee-Participant or such other persons as may
then have an interest therein. Also, by mutual agreement between the Company and
an Employee-Participant, or under any future plan of the Company, Awards may be
granted to such Employee-Participant in substitution and exchange for, and in
cancellation of, any Awards previously granted such Employee-Participant under
this Restricted Stock Option Program, or any benefit previously or thereafter
granted to him under any future plan of the Company.

N. EXCLUSIVITY

Nothing contained in this Restricted Stock Option Program is intended
to amend, modify or rescind any previously approved compensation plans or
programs adopted by the Company. The Restricted Stock Option Program will be
construed to be in addition to any and all such other plans or programs.

O. AMENDMENT AND TERMINATION

The Board may amend the Restricted Stock Option Program from time to
time or terminate the Restricted Stock Option Program at any time. In addition,
the Company may amend the terms of any Award previously granted under this
Restricted Stock Option Program, prospectively or retroactively, however, no
action authorized by this Paragraph O shall impair the rights of any
Employee-Participant without his consent.

V. GENERAL PROVISIONS

A. GOVERNMENT AND OTHER REGULATIONS

The obligation of the Company to issue Awards under the Plan shall be
subject to all applicable laws, rules and regulations, and to such approvals by
any government agencies as may be required.

B. OTHER COMPENSATION PLANS AND PROGRAMS

The Plan shall not be deemed to preclude the implementation by the
Company and its Subsidiaries of other compensation plans or programs which may
be in effect from time to time.

<PAGE> 23

C. MISCELLANEOUS PROVISIONS

1. NO RIGHT TO CONTINUE EMPLOYMENT. Nothing in the Plan or in any Award
or Award Agreement confers upon any Employee-Participant the right to continue
in the employ of the Company or its Subsidiaries or interferes with or restricts
in any way the rights of the Company or its Subsidiaries to discharge any
Employee-Participant at any time for any reason whatsoever, with or without
cause.

2. NON-TRANSFERABILITY. No right or interest of any Participant in any
Award under the Plan shall be (a) assignable or transferable, except by will or
the laws of descent and distribution or a valid beneficiary designation made in
accordance with procedures established by the Committee, or (b) liable for, or
subject to, any lien, obligation or liability. An ISO may be exercised only by
the Participant during his lifetime, by his estate or by the person who acquires
the right to exercise such option by bequest or inheritance.

3. DESIGNATION OF BENEFICIARY. A Participant, in accordance with
procedures established by the Committee, may designate a person or persons to
receive, in the event of the Participant's death, (a) any payments with respect
to which the Participant would then be entitled, and (b) the right to continue
to participate in the Plan to the extent of such Participant's outstanding
Awards. Such designation shall be made upon forms supplied by and delivered to
the Company and may be revoked in writing.

4. WITHHOLDING TAXES.

The Company's obligation to deliver shares of Common Stock or cash upon
the exercise of stock options granted will be subject to the satisfaction of all
applicable federal, state and local income tax and employment tax withholding
requirements. The Committee (or plan administrator) may, in its discretion and
in accordance with any applicable tax or securities laws (including the
applicable safe-harbor provisions of Securities and Exchange Commission Rule
16b-3), provide any or all holders of a NQSOs (other than the automatic grants
made pursuant to Directors Stock Option Program) or unvested shares under the
Plan, with the right to use shares of the Company's Common Stock in satisfaction
of all or part of the federal, state and local income tax and employment tax
liabilities incurred by such holders in connection with the exercise of their
options or the vesting of their shares (the "Taxes"). Such right may be provided
to any such option holder in either or both of the following formats:

(a) Stock Withholding: The holder of the NQSO or unvested
shares may be provided with the election to have the Company withhold,
from the shares of Common Stock otherwise issuable upon the exercise of
such NQSO or the vesting of such shares, a portion of those shares with
an aggregate fair market value not to exceed one hundred percent (100%)
of the applicable Taxes.

<PAGE> 24

(b) Stock Delivery: Provide the holder of the NQSO or the
unvested shares with the election to deliver to the Company, at the
time the NQSO is exercised or the shares vest, one or more shares of
Common Stock previously acquired by such individual (other than in
connection with the option exercise or share vesting triggering the
Taxes) with an aggregate fair market value equal to the designated
percentage (up to 100% as specified by the option holder) of the Taxes
incurred in connection with such option exercise or share vesting.

5. PLAN EXPENSES. Any expenses of administering the Plan shall
be borne by the Company.

6. CONSTRUCTION OF PLAN. The interpretation of the Plan and the
application of any rules implemented hereunder shall be determined solely in
accordance with the laws of the State of Ohio.

7. UNFUNDED PLAN. The Plan shall be unfunded, and the Company
shall not be required to segregate any assets which may at any time be
represented by Awards. Any liability of the Company to any person with
respect to an Award under this Plan shall be based solely upon any
obligations which may be created by this Plan; no such obligation of the
Company shall be deemed to be secured by any pledge or other encumbrance on
any property of the Company.

8. BENEFIT PLAN COMPUTATIONS. Any benefits received or amounts
paid to a Participant with respect to any Award granted under the Plan shall not
have any effect on the level of benefits provided to or received by any
Participant, or the Participant's estate or beneficiary, as part of any employee
benefit plan (other than the Plan) of the Company.

9. PRONOUNS, SINGULAR AND PLURAL. The masculine may be read as
feminine, the singular as plural and the plural as singular as necessary to give
effect to the Plan.

10. MAXIMUM ANNUAL GRANT. In no event shall any one individual
participating in the 1997 Stock Plan, be granted stock options and/or restricted
shares for more than one and one-half percent (1.5%) of the total outstanding
shares of Common Stock of the Company, in the aggregate, per calendar year.

11. PAYMENT. The exercise price will be payable in one of the
alternative forms specified below:

(a) full payment in cash or check made payable to the
Company's order; or

(b) full payment in shares of Common Stock held for the
requisite period necessary to avoid a charge to the Company's reported
earnings and valued at fair market value on the Exercise Date (as such
term is defined below); or

(c) full payment in a combination of shares of Common Stock
held for the requisite period necessary to avoid a charge to the
Company's reported earnings and valued at fair market value on the
Exercise Date and cash or check payable to the Company's order; or

<PAGE> 25

(d) full payment through a sale and remittance procedure
pursuant to which the Participant will provide irrevocable written
directives to a designated brokerage firm to effect the immediate sale
of the purchased shares and remit to the Company, out of the sale
proceeds available on the settlement date, sufficient funds to cover
the aggregate exercise price payable for the purchased shares and shall
concurrently provide written instructions to the Company to deliver the
certificates for the purchased shares directly to such brokerage firm
in order to complete the sale transaction.

For purposes of this subparagraph, the "exercise date" will be the date
on which written notice of the option exercise is delivered to the Company, and
the fair market value per share of Common Stock on any relevant date shall be
determined in accordance with the provisions of the Plan. Except to the extent
the sale and remittance procedure specified above is utilized for the exercise
of the option, payment of the option price for the purchased shares must
accompany the exercise notice.

D. EFFECTIVE DATE

The Plan will become effective on approval by shareholders of the
Company. The Plan and all outstanding Awards shall remain in effect until all
outstanding Awards have been exercised, expired or canceled.

<PAGE> 1
2

EXHIBIT 10(h)

FIRSTMERIT CORPORATION

AMENDED AND RESTATED
EXECUTIVE DEFERRED COMPENSATION PLAN

<PAGE> 2

FIRSTMERIT CORPORATION

AMENDED AND RESTATED
EXECUTIVE DEFERRED COMPENSATION PLAN

ARTICLE 1

PURPOSES AND DEFINITIONS

1.1 PURPOSES. The purposes of the Plan are (i) to provide executives with
flexibility with respect to the form and timing of Compensation, (ii)
to more closely align the interests of executives with the interests of
the Corporation's shareholders and (iii) to assist the Corporation and
its Subsidiaries in attracting and retaining qualified executives.

1.2 DEFINITIONS. Whenever used in the Plan, the following terms shall have
the meaning set forth or referenced below:

(a) "BASE COMPENSATION" means the base salary of an Eligible
Employee for services as an employee of the Corporation or a
Subsidiary, as indicated by the records of the Corporation or
such Subsidiary, as the case may be.

(b) "BOARD" means the Board of Directors of the Corporation.

(d) "CHANGE OF CONTROL" means Change of Control as defined in
Section 4.3.

(e) "CLOSING PRICE" means the closing price of the Common Stock as
reported on the National Association of Securities Dealers
Automated Quotation System ("Nasdaq").

(f) "COMMITTEE" means the Compensation Committee of the Board.

(g) "COMMON STOCK" means the common stock, no par value, of the
Corporation.

(h) "COMPENSATION" means Base Compensation and Incentive
Compensation.

(i) "CORPORATION" means FirstMerit Corporation, and any successor
corporation.

(j) "DEFERRED COMPENSATION" means Base Compensation deferred
pursuant to Section 2.4 and/or Incentive Compensation deferred
pursuant to Section 2.3.

(k) "ELIGIBLE EMPLOYEE" means an Eligible Employee as defined in
Section 2.1.

(l) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

(m) "INCENTIVE COMPENSATION" means the annual incentive award, if
any, payable to an Eligible Employee under the Corporation's
or a Subsidiary's annual incentive plan.

(n) "KEY EMPLOYEE" means an employee of the Corporation or a
Subsidiary designated by the Chief Executive Officer of the
Corporation as a key employee for purposes of the Plan.

2
<PAGE> 3

(o) "PARTICIPANT" means an Eligible Employee, who has elected to
defer all or any portion of his Compensation under the Plan or
to receive all or a portion of his Incentive Compensation in
shares of Common Stock under the Plan.

(p) "PLAN" means the FirstMerit Corporation Executive Deferred
Compensation Plan.

(q) "PLAN YEAR" means the calendar year.

(r) "RETIREMENT" means retirement at or after age 65 or, with the
consent of the Committee, prior to age 65 but at or after age
55.

(s) "STOCK ACCOUNT" means the account maintained by the Committee
in the name of a Participant pursuant to Section 2.5.

(t) "STOCK CREDIT" means a credit to a Participant's Stock
Account, calculated pursuant to Section 2.5.

(u) "SUBSIDIARY" means a subsidiary of the Corporation to which
the Plan has been extended by the Board.

(v) "VALUATION DATE" means the last day of the month in which the
Participant terminates employment as an employee of the
Corporation or any Subsidiary.

ARTICLE 2

PARTICIPATION IN THE PLAN

2.1 ELIGIBILITY. The Committee shall from time to time designate one or
more Key Employees as eligible to participate in the Plan (an "Eligible
Employee").

2.2 INCENTIVE COMPENSATION IN COMMON STOCK.

(a) To the extent that an Eligible Employee has not timely
elected, pursuant to Section 2.3, to defer receipt of any
Incentive Compensation payable to him with respect to a Plan
Year, such Eligible Employee may irrevocably elect, in
increments of one percent (1%), to receive such Incentive
Compensation in whole shares of Common Stock (and cash for
any fractions of a share). Such election must be made in
writing and delivered to the Committee prior to July l of
the Plan Year with respect to which such Incentive
Compensation may be payable or, if earlier, not later than
six months in advance of the date as of which such Incentive
Compensation will be paid, unless the Committee establishes
a different time (which may be earlier or later than the
time provided herein) as of which such election must be
made. Absent such a timely election, an Eligible Employee
shall be deemed to have elected to receive such Incentive
Compensation entirely in cash.

(b) The number of shares of Common Stock payable to a Participant
pursuant to an election under Section 2.2(a) shall be equal to
the number of shares of Common Stock that could have been
purchased with the amount of Incentive Compensation that would
otherwise have been paid to the Participant in cash at the
Closing Price of shares of Common Stock on the day such
Incentive Compensation would otherwise have been so paid.

(c) An Eligible Employee may, pursuant to Section 2.2(a), file a
new election or revoke a prior election each Plan Year. Unless
and until such a new election or revocation of a prior
election is timely made, the election or deemed election in
effect with respect to the immediately preceding Plan Year
shall continue to be effective and irrevocable with respect to
the then current Plan Year.

3
<PAGE> 4

2.3 DEFERRED INCENTIVE COMPENSATION.

(a) An Eligible Employee may irrevocably elect, in increments of
twenty-five percent (25%), to defer receipt of any
Incentive Compensation otherwise payable to him with respect
to any Plan Year. Such election must be made in writing and
delivered to the Committee prior to September 15 of the Plan
Year with respect to which such Incentive Compensation may
be payable or, if earlier, not later than six months in
advance of the date as of which such Incentive Compensation
will otherwise be paid, unless the Committee establishes a
different time (which may be earlier or later than the time
provided herein) as of which such election must be made.
Absent such a timely election, an Eligible Employee shall be
deemed to have elected not to defer receipt of any such
Incentive Compensation.

(b) An Eligible Employee may, pursuant to Section 2.3(a), file a
new election or revoke a prior election each Plan Year. Unless
and until such a new election or revocation of a prior
election is timely made, the election or deemed election in
effect with respect to the immediately preceding Plan Year
shall continue to be effective and irrevocable with respect to
the then current Plan Year.

2.4 DEFERRED BASE COMPENSATION.

(a) (i) An Eligible Employee may irrevocably elect, in
increments of one percent (1%), to defer receipt of
Base Compensation otherwise payable to him. Such
election must be made in writing and delivered to the
Committee prior to July l of any Plan Year and shall
be effective with respect to Base Compensation
otherwise payable to the Participant during the
twelve-month period commencing on January l of the
immediately succeeding Plan Year, unless the
Committee establishes a different time (which may be
earlier or later than the time provided herein) as
of, or with respect to, which such election must be
made and/or shall be effective.

(ii) In the first Plan Year in which a Key Employee
becomes an Eligible Employee, such Eligible Employee
may irrevocably elect, in increments of one percent
(1%), to defer receipt of Base Compensation otherwise
payable to him. Such election must be made in writing
and delivered to the Committee within thirty (30)
days of the date as of which such Key Employee became
an Eligible Employee and shall be effective with
respect to Base Compensation otherwise payable to
him during the period commencing six months after
the date on which such election was made and
delivered to the Committee and ending on the
immediately following December 31, unless the
committee establishes a different time (which may
be earlier or later than the time provided herein)
as of, or with respect to, which such election
shall be effective.

(b) A Participant may, pursuant to Section 2.3(a), file a new
election or revoke a prior election each Plan Year applicable
to Base Compensation otherwise payable to him during the
twelve-month period commencing on January l of the immediately
succeeding Plan Year. Unless and until such a new election or
revocation of a prior election is timely made, the election,
if any, then in effect shall continue to be effective and
irrevocable.

2.5 STOCK ACCOUNTS.

(a) A Stock Account shall be maintained by the Committee in the
name of each Participant. A Participant shall be one hundred
percent (100%) vested in his Accounts at all times.

(b) The Stock Account of a Participant shall be credited, as of
the day Deferred Compensation otherwise would have been paid
to such Participant, with Stock Credits equal to the number
of shares of Common Stock (including fractions of a share)
that could have been purchased with the amount of such
Deferred

4
<PAGE> 5

Compensation at the Closing Price of shares of Common Stock
on the day as of which such Stock Account is so credited
and shall be reduced as of the day that any amount is
distributed therefrom by the number of Stock Credits
attributable to such distribution.

(c) As of the date any dividend is paid to holders of shares of
Common Stock, a Participant's Stock Account shall be
credited with additional Stock Credits equal to the number
of shares of Common Stock (including fractions of a share)
that could have been purchased, at the Closing Price of
shares of Common Stock on such date, with the amount that
would have been paid as dividends on that number of shares
of Common Stock (including fractions of a share) which is
equal to the number of Stock Credits attributable to the
Participant's Stock Account as of the record date of such
dividend. In the case of dividends paid in property, the
amount of the dividend shall be deemed to be the fair market
value of the property at the time of the payment thereof, as
determined in good faith by the Committee.

2.6 DISTRIBUTIONS UPON TERMINATION OF EMPLOYMENT.

(a) Distribution of a Participant's Account shall be made or
commence in accordance with this Section 2.6 within thirty
(30) days following the Valuation Date.

(b) A Participant may elect, in the event his employment as an
employee of the Corporation or any Subsidiary terminates due
to Retirement, to receive his Stock Account in monthly cash
installments not to exceed one hundred twenty (120) separate
installments or in a single sum. Such single sum may be paid
either in cash or in whole shares of Common Stock (and cash
for any fractions of a share) or in combination of both, in
increments of twenty-five percent (25%). The Committee shall
distribute such Stock Account in accordance with such election
or, if no such election is made, in a single cash sum.

(i) In the Event of an election to receive all or a
portion of his Stock Account in shares of Common
Stock, the Participant shall, to the extent of such
election, receive one such share with respect to each
Stock Credit allocated to his Stock Account (and cash
for any fractions of a share). In the event of an
election or deemed election to receive all or a
portion of his Stock Account in cash, the Participant
shall, to the extent of such election or deemed
election, receive an amount in cash equal to the
product of the number of Stock Credits allocated to
his Stock Account and the Closing Price of shares of
Common Stock on the Valuation Date.

(ii) The amount of a monthly cash installment with resect
to such Participant's Stock Account shall be equal to
the product of the number of Stock Credits
attributable to such installment and the Closing
Price of shares of Common Stock on the Valuation
Date. The number of Stock Credits attributable to an
installment shall be equal to the product of the
current number of Stock Credits allocated to such
Stock Account and a fraction, the numerator of which
is one the denominator of which is the total number
of installments elected minus the number of
installments previously paid. All monthly cash
installments shall be paid within 30 days following
the Valuation Date.

(iii) An election pursuant to this Section 2.6(b) must be
in writing and delivered to the Committee at the time
an Eligible Employee becomes a Participant. A
Participant may at any time not less than one year
prior to the date as of which the distribution of
such Participant's Stock Account pursuant to this
Section 2.6(b) is made or commences change such
election pursuant to an election in writing delivered
to the Committee, which election shall be irrevocable
during such one-year period.

(c) In the event a Participant's employment as an employee of the
Corporation and any Subsidiary terminates other than due to
Retirement or death, the participant shall receive a single
cash sum equal to the product of the number of Stock Credits
allocated to his Stock Account and the Closing Price of
shares of Common Stock on the Valuation Date. This amount
shall be paid within 30 days following the Valuation Date.

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(d) Notwithstanding any other provision of this Plan, if the
Participant's Account is $5,000 or less on the Valuation Date
the benefit shall be paid in a lump sum.

2.7 IN-SERVICE DISTRIBUTIONS.

(a) A Participant may, as of the first Business Day of the
month, receive payment of all or part of his Stock Account
prior to the termination of his employment as an employee of
the Corporation and any Subsidiary. Any such election must
be in writing and delivered to the Committee not less than
one year in advance of the effective date thereof, which
election shall be irrevocable during such one-year period;
provided, however, that if the Participant's employment as
an employee of the Corporation and any Subsidiary terminates
prior to the effective date of such election, such election
shall be deemed automatically revoked. Such in-service
distributions shall be made on the same basis as
distributions upon termination pursuant to Section 2.6(c).

(b) Any amounts withdrawn pursuant to Section 2.7(a) shall be
subject to a 6% penalty.

2.8 DISTRIBUTION UPON DEATH. Notwithstanding any other provision of this
Plan, upon the death of a Participant, whether before or after
Retirement or other termination of employment as an employee of the
Corporation and any Subsidiary, the Committee shall pay all of such
Participant's Stock Account as elected by the Participant to such
person, persons, or entity as designated by the Participant. If there
is no beneficiary designation or if such persons shall have all
predeceased the Participant or otherwise ceased to exist, such
distributions shall be made to the executor or administrator of the
Participant's estate. Any distribution under this Section 2.8 shall be
made as soon as practicable following the end of the month in which the
Committee is notified of the Participant's death or is satisfied as to
the identity of the appropriate payee, whichever is later. The amount
payable under this Section 2.8 shall be equal to the product of the
number of Stock Credits then allocated to such Stock Account and the
Closing Price of shares of Common Stock on the last Business Day of the
month immediately preceding the month of such Participant's death.

2.9 WITHHOLDING TAXES. Any withholding of taxes or other amounts required
by federal, state, or local law shall be withheld from Compensation
other than Deferred Compensation. If necessary, the Corporation may
reduce the amount of Deferred Compensation and/or shares of Common
Stock payable pursuant to Section 2.2(a) by an amount equal to any
required withholding. In addition, the Corporation may defer making
payments under the Plan until satisfactory arrangements have been made
for the payment of any federal, state or local taxes required to be
withheld with respect to such payment or delivery. Each Participant
shall be entitled to irrevocably elect, at least six months prior to
the date shares of Common Stock would otherwise be delivered hereunder,
to have the Corporation withhold shares of Common Stock having an
aggregate value equal to the amount required to be withheld. The value
of fractional shares remaining after payment of the withholding taxes
shall be paid to the Participant in cash. Shares so withheld shall be
valued at the Closing Price on the Business Day immediately preceding
the date such shares would otherwise be transferred hereunder.

2.10 DISABILITY. If a Participant suffers a disability, as defined in the
Corporation's long term disability plan, Participant's deferrals that
otherwise would have been credited to the Participant's account will
cease during such disability. The Participant's account will continue
to receive the stock investment results. If, after 24 months, the
Participant is still disabled, the Participant shall be considered to
have terminated employment and his account balance will be paid out
under Section 2.6.

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ARTICLE 3

THE COMMITTEE

3.1 AUTHORITY. The Committee shall have full power and authority to
administer the Plan, including the power to (i) promulgate forms to be
used with respect to the Plan, (ii) promulgate rules of Plan
administration, (iii) settle any disputes as to rights or benefits
arising from the Plan, (iv) interpret the terms of the Plan and (v)
make such decisions or take such action as the Committee, in its sole
discretion, deems necessary or advisable to aid in the proper
administration of the Plan.

3.2 ELECTIONS, NOTICES. All elections and notices required to be provided
to the Committee under the Plan must be on such forms, contain such
information, and be made or given at such times as the Committee may
require.

3.3 AGENTS. The Committee may appoint an individual to be the Committee's
agent with respect to the day-to-day administration of the Plan. In
addition, the Committee may, from time to time, employ other agents and
delegate to them such administrative duties as it sees fit, and may
from time to time consult with counsel who may be counsel to the
Company.

3.4 BINDING EFFECT OF DECISIONS. The decision or action of the Committee
with respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the
rules and regulations promulgated hereunder shall be final and binding
upon all persons having any interest in the Plan.

3.5 INDEMNITY OF COMMITTEE. The Company has entered into Indemnification
Agreements with each of the members of the Committee protecting them
against such claims, losses, damages, expenses or liabilities arising
from any action or failure to act with respect to this Plan, except as
otherwise indicated in such Agreement.

3.6 CLAIMS PROCEDURE. Any person claiming an amount under the Plan,
requesting an interpretation or ruling under the Plan, or requesting
information under the Plan shall present the request in writing to the
Committee, which shall respond in writing within ninety (90) days
following receipt of the request. If the claim or request is denied,
the written notice of denial shall state (i) the reasons for denial,
(ii) the reference to the pertinent Plan provisions or legal doctrine
upon which the denial is based; (iii) a description of any additional
material or information required and an explanation of why it is
necessary; and (iv) an explanation of the Plan's claim review
procedure. Any person whose claim or request is denied may make a
second request for review by notice given in writing to the Committee.
The claim or request shall be reviewed further by the Committee, and
the Committee may, but shall not be required to, grant the claimant a
hearing. A decision on such second request shall normally be made
within sixty (60) days after the date of the second request. If an
extension of time is required for a hearing or other special
circumstances, the claimant shall be notified and the time limit shall
be one hundred twenty (120) days from the date of the second request.
The decision shall be in writing and shall be final and bind all
parties concerned.

ARTICLE 4

SHARES AVAILABLE.

4.1 NUMBER. Three hundred thousand (300,000) shares of Common Stock are
available for issuance under the Plan in accordance with the provisions
hereof and such other provisions as the Committee may from time to time
deem necessary. This authorization may be increased from time to time
by approval of the Board and by the shareholders of the Corporation if,
in the opinion of counsel for the Corporation, such shareholder
approval is required. Stock Credits to Participant's Stock Accounts
shall be applied to reduce the maximum number of shares of Common Stock
remaining available under the Plan. Shares of Common Stock issuable
under the Plan may be taken either from authorized but unissued or
treasury shares, as determined by the Corporation.

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<PAGE> 8

4.2 ADJUSTMENTS. If at any time the number of outstanding shares of Common
Stock shall be increased as the result of any stock dividend, stock
split, subdivision or reclassification of shares, the number of shares
of Common Stock available under Section 4.1 and the number of Stock
Credits with which each Participant's Stock Account is credited shall
be increased in the same proportion as the outstanding number of shares
of Common Stock is increased. If the number of outstanding shares of
Common Stock shall at any time be decreased as the result of any
combination, reverse stock split or reclassification of shares, the
number of shares of Common Stock available under Section 4.1 and the
number of Stock Credits with which each Participant's Stock Account is
credited shall be decreased in the same proportion as the outstanding
number of shares of Common Stock is decreased. In the event the
Corporation shall at any time be consolidated with or merged into any
other corporation and holders of shares of Common Stock receive shares
of the capital stock of the resulting or surviving corporation, there
shall be credited to each Participant's Stock Account, in place of the
Stock Credits then credited thereto, new Stock Credits in an amount
equal to the product of the number of shares of capital stock exchanged
for one share of Common Stock upon such consolidation or merger and the
number of Stock Credits with which the Participant's Account then is
credited, and the number of shares of Common Stock available under
Section 4.1 shall be similarly adjusted. If in such a consolidation or
merger, holders of shares of Common Stock shall receive any
consideration other than shares of the capital stock of the resulting
or surviving corporation or its parent corporation, the Committee, in
its sole discretion, shall determine the appropriate change in
Participants' Accounts.

4.3 CHANGE OF CONTROL. Notwithstanding any other provision of this Plan, in
the event of a Change of Control of the Corporation, each Participant's
Stock Account shall, within five Business Days thereafter, be
distributed in a single cash sum equal to the product of the number of
Stock Credits then allocated to his Stock Account and the Closing Price
of shares of Common Stock or the last Business Day immediately
preceding the Change of Control. For purposes of this Section 4.3,
Change of Control means:

(i) the date the stockholders of the Corporation
approve a plan or other arrangement pursuant to
which the Corporation will be dissolved or
liquidated;

(ii) the date the stockholders of the Corporation
approve a definitive agreement to sell or
otherwise dispose of all or substantially all of
the assets of the Corporation;

(iii) the date of approval by the stockholders of the
Corporation and, if required, by the stockholders of
the other constituent corporation of a definitive
agreement to merge or consolidate the Corporation
with or into such other corporation, other than, in
either case, a merger or consolidation of the
Corporation in which holders of shares of the
Corporation's common stock immediately prior to
the merger or consolidation will have at least a
majority of the ownership of common stock of the
surviving corporation (and, if one class of common
stock is not the only class of voting securities
entitled to vote on the election of directors of the
surviving corporation, a majority of the voting
power of the surviving corporation's voting
securities) immediately after the merger or
consolidation, which common stock (and, if
applicable, voting securities) is to be held in the
same proportion as such holders' ownership of common
stock of the Corporation immediately before the
merger or consolidation;

(iv) the date any entity, person or group, within the
meaning of Section 13(d)(3) or Section 14(d)(2) of
the Securities Exchange Act of 1934, as amended,
other than the Corporation or any of its Subsidiaries
or any employee benefit plan (or related trust)
sponsored or maintained by the Corporation or any of
its subsidiaries, shall have become the beneficial
owner (as determined pursuant to Section 13(d) or
16(a) of the Exchange Act) of, or shall have obtained
voting control over, more than twenty percent (20%)
of the outstanding shares of the Common Stock; or

(v) the first day after the effective date of this Plan
when directors are elected such that a majority of
the Board of Directors shall have been members of the
Board of Directors for less than two (2) years,
unless the nomination for election of each new
director who was not a director at the beginning of
such two (2) year period was approved by a vote of at
least two-thirds of the directors then still in
office who were directors at the beginning of such
period.

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ARTICLE 5

MISCELLANEOUS

5.1 UNFUNDED PLAN. No promise hereunder shall be secured by any specific
assets of the Corporation, nor shall any assets of the Corporation be
designated as attributable or allocated to the satisfaction of such
promises. Participants shall have no rights under the Plan other than
as unsecured general creditors of the Corporation.

5.2 NON-ALIENATION OF BENEFITS. No benefit under the Plan shall be subject
in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, or charge, and any attempt to do so shall be void.
No such benefit, prior to receipt thereof pursuant to the provisions of
the Plan, shall be in any manner liable for or subject to the debts,
contracts, liabilities, engagements or torts of the Participant.

5.3 INVALIDITY. If any term or provision contained herein is to any extent
invalid or unenforceable, such term or provision will be reformed so
that it is valid, and such invalidity or unenforceability will not
affect any other provision or part hereof.

5.4 GOVERNING LAW. This Plan shall be governed by the laws of the State
of Ohio, without regard to the conflict of law provisions thereof.

5.5 AMENDMENT, MODIFICATION AND TERMINATION OF THE PLAN. The Board at any
time may terminate and in any respect amend or modify the Plan;
provided, however, that no such termination, amendment or modification
shall adversely affect the rights of any Participant or beneficiary,
including his rights with respect to Stock Credits credited prior to
such termination, amendment or modification, without his consent.
Notwithstanding the foregoing, the provisions of this Plan that
determine the amount, price or timing of benefits related to Stock
Credits shall not be amended more than once every six months (other
that as may be necessary to conform to any applicable changes in the
Internal Revenue Code of 1986, as amended or the rules thereunder),
unless such amendment would be consistent with the provisions of Rule
16b-3 (or any successor provisions) promulgated under the Exchange Act.

5.6 SUCCESSORS AND HEIrs. The Plan and any properly executed elections
hereunder shall be binding upon the Corporation and Participants, and
upon any assignee or successor in interest to the Corporation and upon
the heirs, legal representatives and beneficiaries of any Participant.

5.7 STATUS AS SHAREHOLDERS. Stock Credits are not, and do not constitute,
shares of Common Stock, and no right as a holder of shares of Common
Stock shall devolve upon a Participant unless and until such shares are
issued to the Participant.

5.8 RIGHTS. This Plan shall not give any person the right to continue as an
employee of the Corporation or any Subsidiary or any rights or
interests other than as herein provided.

5.9 USE OF TERMS. The masculine includes the feminine and the plural
includes the singular, unless the context clearly indicates otherwise.

5.10 Statement of Accounts. Each Participant in the Plan during the
immediately preceding Plan Year shall receive a statement of his Stock
Account under the Plan as of December 31 of such preceding Plan Year.
Such statement shall be in a form and contain such information as is
deemed appropriate by the Committee.

5.11 Compliance with Laws. This Plan and the offer, issuance and delivery of
shares of Common Stock and/or the payment and deferral of Compensation
under this Plan are subject to compliance with all applicable federal
and state laws, rules and regulations (including but not limited to
state and federal reporting, registration, insider trading and other
securities laws) and to such approvals by any listing agency or any
regulatory or governmental authority as may, in the opinion of counsel
for the Corporation, be necessary or advisable in connection therewith.
Any securities

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<PAGE> 10
delivered under this Plan be subject to such restrictions, and the
person acquiring the securities shall, if requested by the
Corporation, provide such assurances and representations to the
Corporation as the Corporation may deem necessary or desirable to
assure compliance with all applicable legal requirements.

5.12 PLAN CONSTRUCTION. Anything in this Plan to the contrary
notwithstanding, is the intent of the Corporation that transactions
under the Plan satisfy the applicable requirements of Rule 16b-3
promulgated under Section 16 of the Exchange Act so that persons who
are or become subject to Section 16 of the Exchange Act will be
entitled to the benefits of such Rule 16b-3 or other exemptive rules
under Section 16 of the Exchange Act and will not be subjected to
avoidable liability thereunder. To the extent any provision of the
Plan, action by the Committee or election by a Participant or Eligible
Employee fails to so comply, it shall be deemed null and void to the
extent permitted by law.

5.13 HEADINGS NOT PART OF PLAN. Headings and subheadings in the Plan are
inserted for reference only and are not to be considered in the
construction of the Plan.

5.14 STOCKHOLDER APPROVAL; EFFECTIVE DATE. This Plan has been approved by
the Board and became effective as of January 1, 1996, due to the
approval of this Plan by the stockholders of the Corporation at the
Annual Shareholders Meeting in 1996. The Plan was amended and restated
in November, 1996, by the Board to make certain administrative changes
to the Plan.

<PAGE> 1

EXHIBIT 10(i)

FIRSTMERIT CORPORATION

AMENDED AND RESTATED
DIRECTOR DEFERRED COMPENSATION PLAN

<PAGE> 2

FIRSTMERIT CORPORATION

AMENDED AND RESTATED
DIRECTOR DEFERRED COMPENSATION PLAN

ARTICLE 1

PURPOSES AND DEFINITIONS

1.1 PURPOSES. The purposes of the Plan are (i) to provide Directors with
flexibility with respect to the form and timing of Compensation, (ii)
to more closely align the interests of Directors with the interests of
the Corporation's shareholders, and (iii) to assist the Corporation in
attracting and retaining qualified individuals to serve as Directors.

1.2 DEFINITIONS. Whenever used in the Plan, the following terms shall have
the meaning set forth or referenced below:

(a) "ACCOUNT" means a Cash Account, a Deferred Benefit Account or
a Stock Account.

(b) "BOARD" means the Board of Directors of the Corporation.

(d) "CASH ACCOUNT" means the account maintained by the Committee
in the name of a Participant pursuant to Section 2.5(a).

(e) "CASH CREDIT" means a credit to a Participant's Cash Account,
expressed in whole dollars and fractions thereof.

(f) "CLOSING PRICE" means the closing price of the Common Stock as
reported on the National Association of Securities Dealers
Automated Quotation System ("Nasdaq").

(g) "COMMITTEE" means the Compensation Committee of the Board.

(h) "COMMON STOCK" means the common stock, no par value, of the
Corporation.

(i) "CORPORATION" means FirstMerit Corporation.

(j) "COMPENSATION" means all fees payable to a Director for
services to the Corporation and/or a Subsidiary as a director,
including retainer fees for service on, and fees for
attendance at meetings of, the Board and any committees
thereof, as established by the Board from time to time, but
excluding reimbursements for expenses.

(k) "DEFERRED BENEFIT ACCOUNT" means a deferred benefit account
established for a Participant under the Directors' Deferred
Fee Plan before July 1, 1996.

(l) "DIRECTORS' Deferred Fee Plan" means the FirstMerit
Corporation Directors' Deferred Fee Plan.

(m) "DIRECTOR" means any individual serving on the Board or on the
board of directors of a Subsidiary, who is not an employee of
the Corporation or any Subsidiary, or any individual serving
as a Community Board Advisor (or like designation).

(n) "PARTICIPANT" means a Director who is a participant in the
Plan, or a former Director who has an Account.

(o) "PLAN" means the FirstMerit Corporation Director Deferred
Compensation Plan.

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<PAGE> 3

(p) "PLAN YEAR" means the calendar year, except that for the 1996
Plan Year, it means the six-month period beginning July 1,
1996 and ending December 31, 1996.

(q) "STOCK ACCOUNT" means the account maintained by the Committee
in the name of a Participant pursuant to Section 2.5(b).

(r) "STOCK CREDIT" means a credit to a Participant's Stock
Account, calculated pursuant to Section 2.5(b).

(s) "STATED INTEREST RATE" means, with respect to any calendar
month, two percentage points over the average of the composite
yield on Moody's Average Corporate Bond Yield for the month of
October immediately preceding the Plan Year as determined from
Moody's Bond Record published by Moody's Investors Services,
Inc. (or any successor thereto), or, if such monthly yield is
no longer published, a substantially similar average selected
by the Corporation. The Committee shall establish the Stated
Interest Rate effective as of January 1 of each Plan Year,
which, once established, shall be used for all interest
determinations during such Plan Year.

(t) "SUBSIDIARY" means a subsidiary of the Corporation.

(u) "VALUATION DATE" means the last business day of the month in
which termination occurs.

ARTICLE 2

PARTICIPATION IN THE PLAN

2.1 ELIGIBILITY. All Directors shall participate in the Plan.

2.2 CURRENT COMPENSATION.

(a) To the extent that a Director or first time nominee for
Director has not timely elected, pursuant to Section 2.3, to
defer receipt of Compensation payable to him during a Plan
Year, such Director or first time nominee may irrevocably
elect, in increments of fifty percent (50%), to receive
current Compensation either in cash or in whole shares of
Common Stock (and cash for any fractions of a share). Any
such election must be made in writing and delivered to the
Committee prior to December 15, 1995 with respect to the
1996 Plan Year and thereafter prior to July 1 of any Plan
Year effective as of January 1 of the immediately succeeding
Plan Year; provided that in the case of a first time nominee
for Director, such election must be so made and delivered
not later than six months in advance of the first date in
such Plan Year as of which such Compensation will be paid.
Absent such a timely election, a Director or first time
nominee for Director shall be deemed to have elected to
receive such Compensation entirely in cash.

(b) The number of shares of Common Stock payable to a Director
pursuant to an election under Section 2.2(a) shall be equal to
the number of shares of Common Stock that could have been
purchased with the amount of Compensation that would otherwise
have been paid to the Director in cash at the Closing Price of
shares of Common Stock on the day such Compensation would
otherwise have been so paid. The balance of such Compensation,
if any, shall be paid to the Director in cash.

(c) A Director may, pursuant to Section 2.2(a), file a new current
Compensation election or revoke a prior current Compensation
election each Plan Year effective as of July 1 of the
immediately succeeding Plan Year. If no new election or
revocation of a prior election is made prior to July 1 of any
Plan Year, the election or deemed election in effect for such
Plan Year shall continue to be effective and irrevocable for
the immediately succeeding Plan Year.

2.3 DEFERRED COMPENSATION.

(a) (i) A Director may irrevocably elect to defer receipt, in
increments of twenty-five percent (25%), of

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<PAGE> 4

Compensation payable to him during the immediately succeeding
Plan Year. Such election must be made in writing an delivered
to the Committee prior to December 15, 1995 with respect to
the 1996 Plan Year and thereafter prior to July 1 of any Plan
Year effective as of January 1 of the immediately succeeding
Plan Year.

(ii) A first time nominee for Director may irrevocably elect to
defer receipt, in increments of twenty-five percent (25%), of
Compensation payable to him on or after July 1 of the Plan
Year in which he first becomes a Director. Such election must
be made in writing and delivered to the Committee prior to the
date on which such nominee becomes a Director.

(b) A Director may, pursuant to Section 2.3(a)(i), file a new deferred
Compensation election or revoke a prior deferred Compensation
election each Plan Year applicable to the immediately succeeding
Plan Year. If no new election or revocation of a prior election is
made prior to July 1 of any Plan Year, the election, if any, in
effect for such Plan Year shall continue to be effective and
irrevocable for the immediately succeeding Plan Year. If a
Director does not timely elect to defer Compensation payable to
him during a Plan Year, all such Compensation shall be paid
directly to such Director in accordance with Section 2.2.

2.4 ALLOCATION OF DEFERRED COMPENSATION. A Participant may irrevocably elect
to initially allocate all or a portion, in increments of twenty-five
(25%), of his deferred Compensation to a Cash Account, a Stock Account,
or a combination of both such Accounts. Any such allocation shall be
specified in the election made pursuant to Section 2.3; provided,
however, that in the case of a first time nominee for Director, such
election must be so made and delivered not later than six months in
advance of the first date in such Plan Year as of which such Compensation
would otherwise be paid. Absent such a timely election, a Participant
shall be deemed to have elected to allocate such deferred Compensation to
his Cash Account. Deferred Compensation allocated to a Cash Account or
Stock Account shall result in Cash Credits or Stock Credits,
respectively.

2.5 ACCOUNTS.

(a) The Cash Account of a Participant shall be credited, as of the day
the deferred Compensation otherwise would have been paid to such
Participant, with Cash Credits equal to the dollar amount of such
deferred Compensation and shall be reduced, as of the day that any
amount is distributed or transferred therefrom, by Cash Credits
equal to the amount of such distribution or transfer. As of the
last day of each calendar month, the Participant's Cash Account
shall be credited with additional Cash Credits in an amount equal
to the product of the average daily balance in his Cash Account
during such month (determined after adjustment for any deferred
Compensation credited thereto and any amount distributed or
transferred therefrom as of each day in such month) and an
interest rate equal to the Stated Interest Rate.

(b) The Stock Account of a Participant shall be credited, as of the
day the deferred Compensation otherwise would have been paid to
such Participant, with Stock Credits equal to the number of shares
of Common Stock (including fractions of a share) that could have
been purchased with the amount of such deferred Compensation at
the Closing Price of shares of Common Stock on the day as of which
such Stock Account is so credited and shall be reduced as of the
day that any amount is distributed or transferred therefrom by the
number of Stock Credits attributable to such distribution or
transfer.

(c) As of the date any dividend is paid to holders of shares of Common
Stock, the Participant's Stock Account shall be credited with
additional Stock Credits equal to the number of shares of Common
Stock (including fractions of a share) that could have been
purchased, at the Closing Price of shares of Common Stock on
such date, with the amount that would have been paid as dividends
on that number of shares of Common Stock (including fractions of a
share) which is equal to the number of Stock Credits attributable
to the Participant's Stock Account as of the record date of such
dividend. In the case of dividends paid in stock, the amount of
the dividend shall be deemed to be the fair market value of the
stock at the time of the payment thereof, as determined in good
faith by the Committee.

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<PAGE> 5

(d) No Compensation payable to a Director after June 30, 1996 may be
deferred to a Deferred Benefit Account. As of July 1, 1996,
Deferred Benefit Account balances will be converted to Cash
Credits to the Participants' Cash Accounts, or Stock Credits to
Participant's Stock Accounts, as elected by the Participant. The
amount of such Cash Credits and Stock Credits shall be determined
in accordance with Sections 2.5(a), 2.5(b) and 2.5(c),
respectively, as if the converted amounts constituted deferred
Compensation on the date of such conversion. Such election must
be in writing and delivered to the Committee prior to December
15, 1995 and shall be irrevocable. Absent such a timely election,
a Participant's Deferred Benefit Account balance shall be
automatically converted to Cash Credits.

(e) A Participant shall be one hundred percent (100%) vested in his
Accounts at all times.

2.6 DISTRIBUTIONS UPON TERMINATION.

(a) Distribution of a Participant's Account shall be made or commence
in accordance with such Participant's election within thirty (30)
days following the Valuation Date, unless the Participant has
elected a later month.

(b) A Participant may elect to receive his Accounts in monthly cash
installments not to exceed one hundred twenty (120) separate
installments or in a single sum. Such single sum may be paid
either in cash or in whole shares of Common Stock (and cash for
any fractions of a share) or in combination of both, in increments
of twenty-five percent (25%). The Committee shall-distribute such
Accounts in accordance with such election or, if no such election
is made, in a single cash installment.

(c) (i) In the event of an election to receive all or a portion
of his Stock Account in shares of Common Stock, the
Participant shall, to the extent of such election, receive
one such share with respect to each Stock Credit (including
any Stock Credits resulting from a transfer pursuant to the
second sentence in Section 2.6(c)(ii) allocated to his Stock
Account (and cash for any fractions of a share). In the
event of an election or deemed election to receive all or a
portion of his Stock Account in cash, the Participant shall,
to the extent of such election or deemed election, receive
an amount in cash equal to the product of the number of
Stock Credits allocated to his Stock Account and the Closing
Price of shares of Common Stock on the Valuation Date.

(ii) In the event of an election or deemed election by the
Participant to receive all or a portion of his Cash Account
in cash, the Participant shall, to the extent of such
election or deemed election, receive an amount in cash equal
to the current balance in such Cash Account. In the event of
an election by the Participant to receive all or a portion
of his Cash Account in shares of Common Stock, the
Participant shall be deemed to have irrevocably elected to
transfer the appropriate such amount from his Cash Account
to his Stock Account in accordance with Section 2.8(b)
effective as of the Valuation Date.

(d) (i) The amount of a monthly cash installment with respect to
a Participant's Cash Account shall be equal to the product
of the current balance in such Cash Account and a fraction,
the numerator of which is one and the denominator of which
is the total number of installments elected minus the number
of installments previously paid.

(ii) The amount of a monthly cash installment with respect to
such Participant's Stock Account shall be equal to the
product of the number of Stock Credits attributable to such
installment and the Closing Price of shares of Common Stock
on the Valuation Date. The number of Stock Credits
attributable to an installment shall be equal to the product
of the current number of Stock Credits attributable to such
Stock Account and a fraction, the numerator of which is one
and the denominator of which is the total number of
installments elected minus the number of installments
previously paid.

(iii) All monthly cash installments shall commence and be paid
within thirty (30) days after the Valuation Date.

(e) A Participant's elections referred to in this Section 2.6 must be
in writing and delivered to the Committee with

5
<PAGE> 6

such Participant' s election to defer Compensation pursuant to
Section 2.3(a). A Participant may at any time not less than one
year prior to the date as of which the distribution of such
Participant's Accounts is made or commences change such elections
pursuant to an election in writing delivered to the Committee,
which election shall be irrevocable during such one-year period.

(f) Notwithstanding any other provision of this Plan, if the
Participant's Account is $5,000 or less on the Valuation Date, the
benefit shall be paid in a lump sum.

2.7 IN-SERVICE DISTRIBUTIONS.

(a) A Participant may, as of the first Business Day of the month,
receive payment of all or part of his Accounts while still a
Director. Any such election must be in writing and delivered to
the Committee not less than one year in advance of the effective
date thereof, which election shall be irrevocable during such
one-year period; provided, however, that if the Participant' s
service as a Director terminates prior to the effective date of
such election, such election shall be deemed automatically
revoked. Such in-service distributions may be made on the same
basis as distributions upon termination pursuant to Section 2.6.

(b) Any amounts withdrawn pursuant to Section 2.7(a) shall be subject
to a 6% penalty.

2.8 TRANSFERS.

(a) A Participant may elect to transfer all or a portion, in
increments of twenty-five percent (25%), of his Stock Account to
his Cash Account effective as of the first business day of any
Plan Year. The amount to be credited to such Participant's Cash
Account shall be equal to the product of the applicable percentage
(as elected by the Participant) of the number of Stock Credits
then credited to his Stock Account and the Closing Price of shares
of Common Stock on the effective date of such transfer.

(b) A Participant may elect to transfer all or a portion, in
increments of twenty-five percent (25%), of his Cash Account to
his Stock Account effective as of the first business day of any
Plan Year. The number of Stock Credits to be credited to such
Participant's Stock Account shall be equal to the number of shares
of Common Stock (including fractions of a share) that could have
been purchased with the value of the applicable percentage (as
elected by the Participant) of the Cash Account at the Closing
Price of shares of Common Stock on the effective date of such
transfer.

(c) Any transfer under this Section 2.8 must be made pursuant to an
irrevocable election in writing delivered to the Committee prior
to July 1 of the Plan Year immediately preceding the Plan Year in
which such transfer is to be effective.

2.9 DISTRIBUTION UPON DEATH.

(a) Notwithstanding any other provision of this Plan, upon the death
of a Participant, amounts attributable to his Deferred
Compensation Account shall be distributed in the manner provided
in any election or elections with respect thereto filed by the
Participant.

(b) Notwithstanding any other provisions of this Plan, upon
the death of a Participant, the Committee shall pay all of such
Participant's Cash Account and Stock Account to the person,
persons, or entity designated by the Participant. All such
designations shall be made in writing and delivered to the
Committee. A Participant may from time to time revoke or change
any such designations by written notice to the Committee. If
there is no beneficiary designation or if such persons shall have
all predeceased the Participant or otherwise ceased to exist,
such distributions shall be made to the executor or administrator
of the Participant's estate. Any distribution under this
Section 2.9(b) shall be made as soon as practicable following the
end of the month in which the Committee is notified of the
Participant's death or is satisfied as to the identity of the
appropriate payee, whichever is later.

6
<PAGE> 7

(c) The amount payable with respect to such Participant's Stock
Account shall be equal to the product of the number of Stock
Credits with which such Stock Account then is credited and the
Closing Price of shares of Common Stock on the last Business Day
of the month immediately preceding the month of such Participant's
death.

(d) In the event of the death of the primary beneficiary, the
secondary beneficiary shall receive a lump sum of the remainder of
the benefit.

2.10 WITHHOLDING TAXES. The Corporation may defer making payments under the
Plan until satisfactory arrangements have been made for the payment of
any federal, state or local income taxes required to be withheld with
respect to such payment or delivery. Each Director shall be entitled to
irrevocably elect, at least six months prior to the date shares of Common
Stock would otherwise be delivered hereunder, to have the Corporation
withhold shares of Common Stock having an aggregate value equal to the
amount required to be withheld. The value of fractional shares remaining
after payment of the withholding taxes shall be paid to the Director in
cash. Shares so withheld shall be valued at the Closing Price on the
regular Business Day immediately preceding the date such shares would
otherwise be transferred hereunder.

ARTICLE 3

THE COMMITTEE

3.1 AUTHORITY. The Committee shall have full power and authority to
administer the Plan, including the power to (i) promulgate forms to be
used with respect to the Plan, (ii) promulgate rules of Plan
administration, (iii) settle any disputes as to rights or benefits
arising from the Plan, (iv) interpret the terms of the Plan and (v) make
such decisions or take such action as the Committee, in its sole
discretion, deems necessary or advisable to aid in the proper
administration of the Plan.

3.2 ELECTIONS, NOTICES. All elections and notices required to be provided to
the Committee under the Plan must be in such form or forms prescribed by,
and contain such information as is required by, the Committee.

3.3 AGENTS. The Committee may appoint an individual or individuals to be the
Committee's agent with respect to the day-to-day administration of the
Plan. In addition, the Committee may, from time to time, employ other
agents and delegate to them such administrative duties as it sees fit,
and may from time to time consult with counsel who may be counsel to the
Company.

3.4 BINDING EFFECT OF DECISIONS. The decision or action of the Committee with
respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the rules
and regulations promulgated hereunder shall be final and binding upon all
persons having any interest in the Plan.

3.5 INDEMNITY OF COMMITTEE. The Company has entered into Indemnification
Agreements with each of the members of the Committee protecting them
against such claims, losses damages, expenses or liabilities arising from
any action or failure to act with respect to this Plan, except as
otherwise indicated in such Agreement.

ARTICLE 4

SHARES AVAILABLE.

4.1 NUMBER. One Hundred Thousand (100,000) shares of Common Stock are
available for issuance under the Plan in

7
<PAGE> 8

accordance with the provisions hereof and such other provisions as the
Committee may from time to time deem necessary. This authorization may
be increased from time to time by approval of the Board and by the
shareholders of the Corporation if, in the opinion of counsel for the
Corporation, such shareholder approval is required. Stock Credits to
participant's Stock Accounts shall be applied to reduce the maximum
number of shares of Common Stock remaining available under the Plan.
Shares of Common Stock issuable under the Plan may be taken either from
authorized but unissued or treasury shares, as determined by the
Corporation.

4.2 ADJUSTMENTS. If at any time the number of outstanding shares of Common
Stock shall be increased as the result of any stock dividend, stock
split, subdivision or reclassification of shares, the number of shares of
Common Stock available under Section 4.01 and the number of Stock Credits
with which each Participant's Stock Account is credited shall be
increased in the same proportion as the outstanding number of shares of
Common Stock is increased. If the number of outstanding shares of Common
Stock shall at any time be decreased as the result of any combination,
reverse stock split or reclassification of shares, the number of shares
of Common Stock available under Section 4.01 and the number of Stock
Credits with which each Participant's Stock Account is credited shall be
decreased in the same proportion as the outstanding number of shares of
Common Stock is decreased. In the event the Corporation shall at any time
be consolidated with or merged into any other corporation and holders of
shares of Common Stock receive shares of the capital stock of the
resulting or surviving corporation, there shall be credited to each
Participant's Stock Account, in place of the Stock Credits then credited
thereto, new Stock Credits in an amount equal to the product of the
number of shares of capital stock exchanged for one share of Common Stock
upon such consolidation or merger and the number of Stock Credits with
which the Participant's Account then is credited, and the number of
shares of Common Stock available under Section 4.01 shall be similarly
adjusted. If in such a consolidation or merger, holders of shares of
Common Stock shall receive any consideration other than shares of the
capital stock of the resulting or surviving corporation or its parent
corporation, the Committee, in its sole discretion, shall determine the
appropriate change in Participants' Accounts.

ARTICLE 5

MISCELLANEOUS

5.1 UNFUNDED PLAN. No promise hereunder shall be secured by any specific
assets of the Corporation, nor shall any assets of the Corporation be
designated as attributable or allocated to the satisfaction of such
promises. Participants shall have no rights under the Plan other than as
unsecured general creditors of the Corporation.

5.2 NON-ALIENATION OF BENEFITS. No benefit under the Plan shall be subject in
any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, or charge, and any attempt to do so shall be void.
No such benefit, prior to receipt thereof pursuant to the provisions of
the Plan, shall be in any manner liable for or subject to the debts,
contracts, liabilities, engagements or torts of the Participant.

5.3 INVALIDITY. If any term or provision contained herein is to any extent
invalid or unenforceable, such term or provision will be reformed so that
it is valid, and such invalidity or unenforceability will not affect any
other provision or part hereof.

5.4 GOVERNING LAW. This Plan shall be governed by the laws of the State of
Ohio, without regard to the conflict of law provisions thereof.

5.5 AMENDMENT, MODIFICATION AND TERMINATION OF THE PLAN. The Board at any
time may terminate and in any respect amend or modify the Plan; provided,
however, that no such termination, amendment or modification shall
adversely affect the rights of any Participant or beneficiary, including
his rights with respect to Cash Credits or Stock Credits credited prior
to such termination, amendment or modification, without his consent.
Notwithstanding the foregoing, the provisions of this Plan that determine
the amount, price or timing of benefits related to Stock Credits shall
not be amended more than once every six months (other that as may be
necessary to conform to any applicable changes in the Internal Revenue
Code of 1986, as amended or the rules thereunder), unless such amendment
would be consistent with the provisions of Rule 16b-3 (or any successor
provisions) promulgated under the Securities Exchange Act of

8
<PAGE> 9

1934, as amended ("Exchange Act").

5.6 SUCCESSORS AND HEIRS. The Plan and any properly executed elections
hereunder shall be binding upon the Corporation and Participants, and
upon any assignee or successor in interest to the Corporation and upon
the heirs, legal representatives and beneficiaries of any Participant.

5.8 RIGHTS. Participation in this Plan shall not give any Director the right
to continue to serve as a member of the Board or any rights or interests
other than as herein provided.

5.9 USE OF TERMS. The masculine includes the feminine and the plural includes
the singular, unless the context clearly indicates otherwise.

5.10 STATEMENT OF ACCOUNTS. Each Participant in the Plan during the
immediately preceding Plan Year shall receive a statement of his Accounts
under the Plan as of December 31 of such preceding Plan Year. Such
statement shall be in a form and contain such information as is deemed
appropriate by the Committee.

5.11 COMPLIANCE WITH LAWS. This Plan and the offer, issuance and delivery of
shares of Common Stock and/or the payment and deferral of Compensation
under this Plan are subject to compliance with all applicable federal and
state laws, rules and regulations (including but not limited to state and
federal reporting, registration, insider trading and other securities
laws) and to such approvals by any listing agency or any regulatory or
governmental authority as may, in the opinion of counsel for the
Corporation, be necessary or advisable in connection therewith. Any
securities delivered under this Plan be subject to such restrictions, and
the person acquiring the securities shall, if requested by the
Corporation, provide such assurances and representations to the
Corporation as the Corporation may deem necessary or desirable to assure
compliance with all applicable legal requirements.

5.12 PLAN CONSTRUCTION. Anything in this Plan to the contrary notwithstanding,
is the intent of the Corporation that all transactions under the Plan
satisfy the applicable requirements of Rule 16b-3 so that a Director who
is or becomes a member of a committee administering stock compensation
plans of the Corporation will be "disinterested" as defined in Rule 16b-3
for purposes of administering such plans, will be entitled to the
benefits of Rule 16b-3 or other exemptive rules under Section 16 of the
Exchange Act, and will not be subjected to avoidable liability
thereunder. To the extent any provision of the Plan, action by the
Committee or election by a Director fails to so comply, it shall be
deemed null and void to the extent permitted by law.

5.13 HEADINGS NOT PART OF PLAN. Headings and subheadings in the Plan are
inserted for reference only and are not to be considered in the
construction of the Plan.

5.14 STOCKHOLDER APPROVAL; EFFECTIVE DATE. This Plan has been approved by the
Board and became effective as of January 1, 1996, due to the approval of
this Plan by the stockholders of the Corporation at the Annual
Shareholders Meeting in 1996. The Plan was amended and restated in
November, 1996, by the Board to make certain administrative changes to
the Plan.

<PAGE> 1
EXHIBIT (10)(r)

FIRSTMERIT CORPORATION TERMINATION AGREEMENT

Agreement made this ____ day of _______________, 19__, by and between
FirstMerit Corporation, an Ohio corporation, (the "Company") and ("Employee").

R E C I T A L S:

A. The Employee serves as a ______________________ of the Company and
is a key corporate officer of the Company.

B. The Board of Directors of the Company has determined that the
interests of FirstMerit Corporation stockholders will be best served by assuring
that its key corporate officers will adhere to the policy of the Board of
Directors with respect to any event by which another entity would acquire
effective control of the Company, including but not limited to a tender offer.

C. The Board of Directors has also determined that it is in the best
interest of the shareholders to promote stability among key officers and
employees.

IN CONSIDERATION OF THE FOREGOING, the mutual covenants hereinafter
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the Company and Employee agree as follows:

1. DUTIES OF EMPLOYEE. Employee shall support the position of the Board
of Directors and shall take any action reasonably requested by the Board of
Directors with respect to any event by which another entity would acquire
effective control of the Company, including but not limited to a tender offer.

2. CHANGE IN CONTROL. The term "Change in Control" shall mean a change
in control of a nature that would be required to be reported by persons or
entities subject to the reporting requirements of Section 14(a) of the
Securities Exchange Act of 1934 in response to item 5(f) of Schedule 14A of
Regulation 14(A) as in effect on the date hereof, or successor provisions
thereto, provided that, without limitation, such a change in control shall be
deemed to have occurred if (a) any unaffiliated "person," "entity," or "group"
(as defined in Rule 13(d)-3 issued under the Securities Exchange Act of 1934)
directly or indirectly becomes the owner of securities of the Company
representing 30% or more of the combined voting power of the Company's then
outstanding securities or (b) at any time during any period of two consecutive
calendar years individuals, who at the beginning of such period constitute the
Board of Directors of the Company, cease for any reason to constitute at least
the majority of such Board unless the election, or the nomination for election,
by the Company's shareholders of each new director was approved by a vote of at
least two-thirds of the directors still in office who were directors of the
Company at the beginning of such two-year period.

3. COMPANY'S RIGHT TO TERMINATE. The Company may terminate, the
Employee's employment at any time during the term of this Agreement, subject to
providing the benefits hereinafter specified.

4. TERMINATION FOLLOWING CHANGE IN CONTROL. In the event of termination
of employment subsequent to a Change in Control and prior to the expiration of
the term of this Agreement, the Employee shall be entitled to the benefits
provided in paragraph 6 unless such termination is (a) because of the Employee's
death, Retirement or Disability, (b) by the Company for Cause (c) by the
Employee other than for Good Reason.

<PAGE> 2

(1) DISABILITY OR RETIREMENT. Termination of employment by the
Company based on "Dis ability" shall mean termination because of Total
and Permanent Disability as defined in the Long-Term Disability Plan of
the Company, in effect from time to time, in which the Employee is
participating. Termination of employment based on "Retirement" shall
mean termination of employment by the Employee in accordance with the
retirement policy (including early retirement policy) which is in effect
from time to time and is generally applicable to the Company's salaried
employees.

(2) CAUSE. The term "Cause" shall mean termination upon one or
more of the following acts of the Employee:

(a) Felonious criminal activity whether or not
affecting the Company;

(b) Disclosure to unauthorized persons of Company
information which is believed by the Board of
Directors of the Company to be confidential;

(d) Gross negligence or insubordination in the
performance of duties of the position held by the
Employee.

(3) GOOD REASON. The term "Good Reason" shall mean voluntary
termination of employment by the Employee based on any of the following:

(a) Involuntary reduction in the Employee's base
salary, as in effect immediately prior to a Change
in Control unless such reduction occurs
simultaneously with a Company-wide reduction in
officers' salaries;

(b) Involuntary discontinuance or reduction in the
Employee's incentive compensation award
opportunities under plans applicable to the
Employee and in existence at the time of a Change
in Control, unless a Company-wide reduction of all
officers' incentive award opportunities occurs
simultaneously with such discontinuance or
reduction;

(c) Involuntary relocation to another office located
more than 50 miles from the Employee's office
location at the time the Change in Control occurs;

(d) Significant reduction in the Employee's
responsibilities and status within the Company's
organization or change in the Employee's title or
office without prior written consent of the
Employee;

(e) Involuntary discontinuance of the Employee's
participation in any employee benefit plans
maintained by the Company unless such plans are
discontinued by reason of law or loss of tax
deductibility to the Company with respect to
contributions to such plans, or are discontinued as
a matter of the Company's policy applied equally to
all participants in such plans;

(f) Involuntary reduction of the Employee's paid
vacation to less than twenty (20) working days per
calendar year;

<PAGE> 3

(g) Failure to obtain an assumption of the Company's
obligations under this Agreement by any successor
to the Company, regardless of whether such entity
becomes a successor to the Company as a result of a
merger, consolidation, sale of the assets of the
Company, or other form of reorganization; or

(h) Termination of employment which is not effected
pursuant to a Notice of Termination satisfying the
requirements of paragraph 5 herein.

5. NOTICE OF TERMINATION. Any purported termination of the Employee's
employment by the Company or by the Employee shall be communicated by written
Notice of Termination to the other party. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon, shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Employee's employment under the provisions so indicated and
shall specify a "Date of Termination."

6. COMPENSATION AND BENEFITS UPON TERMINATION.

(a) If, after a Change in Control has occurred and prior to the
expiration of the term of this Agreement, the Employee's employment by the
Company shall be terminated: (1) by the Company other than for Cause,
Disability, Retirement, or death or (2) by the Employee for Good Reason, then
the Employee shall be entitled to the compensation and benefits provided in
subparagraph (c) below.

(b) If either of the conditions in subparagraph (a) above are satisfied,
the Employee shall be eligible to receive the compensation and benefits
described in subparagraph (c) below. The compensation described in subparagraphs
(c)(1), (c)(2) and (c)(3) shall be paid by the Company to the Employee in a lump
sum on or before the fifth day following the Date of Termination.

For purposes of this Agreement, the term "Month" shall mean a period of thirty
(30) days.

(1) BASE SALARY TO DATE OF TERMINATION. The Company shall pay to
the Employee his/her full base salary through the Date of Termination at
the rate in effect at the time Notice of Termination is given or
immediately preceding a Change in Control, whichever is higher.

(2) BASE SALARY. The Company shall pay to the Employee an amount
equal to (i) the Employee's annual base salary (at the rate in effect at
the time Notice of Termination is given or immediately preceding a
Change in Control, whichever is higher) multiplied by (ii) the lesser of
the number _____ (__) or a fraction the numerator of which is the number
of months from and including the month in which the Date of Termination
occurs to and including the month in which the Employee would attain the
age of sixty-five (65) and the denominator of which is ______ (__).

(3) INCENTIVE COMPENSATION. The Company shall pay to the Employee
an incentive award in an amount equal to (i) the average of the
incentive compensation paid to the Employee in the (2) years immediately
preceding the Date of Termination multiplied by (ii) the lesser of the
number _____ (__) or a fraction the numerator of which is the number of
months from and including the month in which the Date of Termination
occurs to and including the month in which the Employee would attain the
age of sixty-five (65) and denominator of which is _____ (__).

<PAGE> 4

(4) STOCK PLANS. The Employee shall be entitled to immediate
vesting of all stock options and other stock, phantom stock, stock
appreciation rights or similar arrangements in which he participates.
Notwithstanding any plan provisions to the effect that rights under any
such plan terminate upon termination of employment, the Employee shall
be given ninety (90) days after the Date of Termination to realize or
exercise all rights or options provided under such plans.

(5) MEDICAL AND LIFE INSURANCE. The Company shall maintain in
full force and effect for the Employee's continued benefit until the
earlier of the second anniversary of the Date of Termination or the
calendar month in which the Employee reaches the age of sixty-five (65)
all medical, life, and accidental death and dismemberment insurance
(including conversion rights), with coverage and limits identical to
those in effect with respect to the Employee immediately prior to the
Change in Control. If the Employee is a participant in the Company's
Executive Committee Life Insurance Program, the Company shall pay the
premium for the Employee on such insurance for a period ending the
earlier of two (2) years after the Date of Termination or the calendar
month in which the Employee reaches the age of sixty-five (65), plus an
additional amount to the Employee equal to the Employee's projected
federal, state, county and municipal income taxes on the premiums so
paid, which projected taxes shall be calculated at the highest marginal
tax rates. For the sole purpose of determining the Employee's
eligibility to participate in the Company's medical, life, and
accidental death and dismemberment insurance plans, the Employee shall
be considered to be on a paid leave of absence as long as he/she is
receiving benefits under this Agreement.

(6) OUTPLACEMENT FEES. For a period not to exceed one (1) year
after the Date of Termination, the Company will pay the reasonable
expenses associated with outplacement training of the Employee by a
professional placement firm and in an amount not to exceed
____________________ ($_________).

7. OVERALL LIMITATION ON BENEFITS. Notwithstanding any provision in this
Agreement to the contrary, if the compensation and benefits provided to the
Employee pursuant to or under this Agreement, either alone or with other
compensation and benefits received by the Employee, would constitute "parachute
payments" within the meaning of Section 280G of the Internal Revenue Code (the
"Code"), or the regulations adopted or proposed thereunder, then the
compensation and benefits payable pursuant to or under this Agreement shall be
reduced to the extent necessary so that no portion thereof shall be subject to
the excise tax imposed by Section 4999 of the Code. The Employee or any other
party entitled to receive the compensation or benefits hereunder may request a
determination as to whether the compensation or benefit would constitute a
parachute payment and, if requested, such determination shall be made by
independent tax counsel selected by the Company and approved by the party
requesting such determination. In the event that any reduction is required under
this paragraph 7, the Company shall consult with the Employee in determining the
order in which compensation and benefits shall be reduced.

8. LEGAL FEES. The Company shall pay all legal fees and expenses
incurred by the Employee in enforcing any right or benefit provided by this
Agreement.

9. TERM OF AGREEMENT. This Agreement shall continue in effect until the
earliest to occur of the following:

(1) the last day of the _____________ (____) Month, as defined in
paragraph 6, after a Change in Control occurs; or

<PAGE> 5

(2) the date as of which the Employee is removed or resigns from
his/her position as a ______________ of the Company unless such
removal or resignation occurs after a Change of Control and is for
other than Cause, Disability, Retirement or death, in the case of
removal, or for Good Reason, in the case of resignation.

In the event that the Employee becomes entitled to the compensation or benefits
provided in paragraph 6 of this Agreement before an event of termination occurs
as provided in this paragraph 9, such compensation and benefits shall continue
for the period provided in paragraph 6 notwithstanding the occurrence of such
event of termination.

10. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, provided that all
notices to the Company shall be directed to the attention of the President of
the Company with a copy to the Secretary of the Company, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
receipt.

11. MISCELLANEOUS. No provisions of this Agreement may be modified,
waived, or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Employee and such officer as may be specifically
designated by the Board of Directors of the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar provisions or conditions at the same
or at any prior or subsequent time. This Agreement is intended to replace and
supersede the existing Termination Agreement between the parties which prior
agreement shall become invalid as of the date of signing of this Agreement. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not expressly set forth in this Agreement; provided, however, that this
Agreement shall not supersede or in any way limit the rights, duties of
obligations you may have under any other written agreement with the Company. The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Ohio.

12. VALIDITY. The validity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.

13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original by all of which
together will constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date above first written.

FIRSTMERIT CORPORATION

Attest: By:
------------------------- -------------------------
Title:
---------------------

Witness:
------------------------ ----------------------------
EMPLOYEE:

<PAGE> 1
EXHIBIT 21

SUBSIDIARIES OF FIRSTMERIT CORPORATION
AS OF JANUARY 1, 1997

<TABLE>
CORPORATION PERCENT OF OWNERSHIP
<S> <C>
First National Bank of Ohio
(national banking association) 100%

The Old Phoenix National Bank of Medina
(national banking association) 100%

EST National Bank
(national banking association) 100%

Peoples National Bank
(national banking association) 100%

Citizens National Bank
(national banking association) 100%

Peoples Bank, N.A.
(national banking association) 100%

FirstMerit Credit Life Insurance Company
(Arizona corporation) 100%

FirstMerit Community Development Corporation
(Ohio corporation) 100%

Citizens Savings Corporation of Stark County 100%

Citizens Investment Corporation 100%
</TABLE>

<PAGE> 1

EXHIBIT 23

The Board of Directors
FirstMerit Corporation

We consent to incorporation by reference in Registration Statement Nos. 33-7266,
33-47074, 33-47147, 33-57076, and 33-57557 on Forms S-8, of our report dated
January 16, 1997, relating to the consolidated balance sheets of FirstMerit
Corporation and subsidiaries as of December 31, 1996 and 1995, and the related
consolidated statements of income, shareholders' equity, and cash flows for each
of the years in the three year period ended December 31, 1996, which report
appears in the 1996 Annual Report on Form 10-K of FirstMerit Corporation.

/s/ Coopers & Lybrand

Akron, Ohio
February 21, 1997

<ARTICLE> 9
<CIK> 0000354869
<NAME> FIRSTMERIT CORPORATION
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 222,164
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 15,550
<TRADING-ASSETS> 0
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<TOTAL-ASSETS> 5,227,980
<DEPOSITS> 4,204,875
<SHORT-TERM> 423,701
<LIABILITIES-OTHER> 75,697
<LONG-TERM> 0
<COMMON> 48,085
0
0
<OTHER-SE> 475,622
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<INTEREST-LOAN> 330,309
<INTEREST-INVEST> 80,502
<INTEREST-OTHER> 934
<INTEREST-TOTAL> 411,745
<INTEREST-DEPOSIT> 135,664
<INTEREST-EXPENSE> 160,773
<INTEREST-INCOME-NET> 250,972
<LOAN-LOSSES> 17,751
<SECURITIES-GAINS> (1,776)
<EXPENSE-OTHER> 209,702
<INCOME-PRETAX> 106,015
<INCOME-PRE-EXTRAORDINARY> 106,015
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 70,940
<EPS-PRIMARY> 2.18
<EPS-DILUTED> 2.18
<YIELD-ACTUAL> 4.98
<LOANS-NON> 10,366
<LOANS-PAST> 8,380
<LOANS-TROUBLED> 92
<LOANS-PROBLEM> 23,700
<ALLOWANCE-OPEN> 46,840
<CHARGE-OFFS> 21,230
<RECOVERIES> 5,975
<ALLOWANCE-CLOSE> 49,336
<ALLOWANCE-DOMESTIC> 49,336
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0

</TABLE>