TABLE OF CONTENTS




|                                                                                              |                                                                                                         |  |  |  |  |  |  | 
|--------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|ITEM 1. Financial Statements                                                                 
|                                                                                              | CHARTER ONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(unaudited)
|                                                                                              | CHARTER ONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)             
|                                                                                              | CHARTER ONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)         
|                                                                                              | CHARTER ONE FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)    
|ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|ITEM 3. Quantitative and Qualitative Disclosure About Market Risk                            
|ITEM 4. Controls and Procedures                                                              
|ITEM 5. Other Information                                                                    
|ITEM 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                                                                   
|INDEX TO EXHIBITS                                                                            
|EX-11  Computation of Per Share Earnings                                                     
|EX-31.1  Certification - CEO                                                                 
|EX-31.2  Certification - CFO                                                                 
|EX-32  Certificatoins Required by Section 1350                                               



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##### Table of Contents



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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



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FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2003

OR

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

Commission file number 001-15495

CHARTER ONE FINANCIAL, INC.(Exact name of registrant as specified in its charter)

|                                              |  |                    
|--------------------------------------------- |  | -------------------
|Delaware                                      |  | 34-1567092         
|(State or other jurisdiction of incorporation |  | (I.R.S. Employer   
|or organization)                              |  | Identification No.)

|                                         |  |           
|---------------------------------------- |  | ----------
|1215 Superior Avenue, Cleveland, Ohio    |  | 44114     
|(Address of principal executive offices) |  | (Zip Code)

(216) 566-5300
(Registrants telephone number, including area code)

NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since report)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes_X_  No___

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes_X_  No___

The number of shares outstanding of the registrants sole class of common stock
as of October 31, 2003 was 222,628,528.



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##### Table of Contents



TABLE OF CONTENTS



|                  |  |                                                                                                |  |     
|----------------- |  | ---------------------------------------------------------------------------------------------- |  | ----
|Item              |  |                                                                                                |  |     
|Number            |  | PART I  FINANCIAL INFORMATION                                                                 |  | Page
|                  |  |                                                                                                |  |     
|1.                |  | Financial Statements                                                                           |  |     
|                  |  |                                                                                                |  |     
|                  |  | Consolidated Statements of Financial Condition 
  September 30, 2003 and December 31, 2002.   |  | 1   
|                  |  |                                                                                                |  |     
|                  |  | Consolidated Statements of Income 
  Three and nine months ended September 30, 2003 and 2002. |  | 2   
|                  |  |                                                                                                |  |     
|                  |  | Consolidated Statements of Cash Flows 
  Nine months ended September 30, 2003 and 2002.       |  | 3   
|                  |  |                                                                                                |  |     
|                  |  | Notes to Consolidated Financial Statements                                                     |  | 4   
|                  |  |                                                                                                |  |     
|2.                |  | Managements Discussion and Analysis of Financial Condition and Results of Operations          |  | 7   
|                  |  |                                                                                                |  |     
|3.                |  | Quantitative and Qualitative Disclosure About Market Risk                                      |  | 23  
|                  |  |                                                                                                |  |     
|4.                |  | Controls and Procedures                                                                        |  | 23  
|                  |  |                                                                                                |  |     
|                  |  | PART II  OTHER INFORMATION                                                                    |  |     
|                  |  |                                                                                                |  |     
|5.                |  | Other Information                                                                              |  | 23  
|                  |  |                                                                                                |  |     
|6.                |  | Exhibits and Reports on Form 8-K                                                               |  | 24  
|                  |  |                                                                                                |  |     
|Signatures        |  | 24                                                                                            
|                  |  |                                                                                                |  |     
|Index to Exhibits |  | 25                                                                                            





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##### Table of Contents



PART I  FINANCIAL INFORMATION







ITEM 1. Financial Statements







CHARTER ONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(unaudited)

|                                                      |                                                                                                                   |                                 |                                            |                                      |            |                        |            |            |            |            |  | 
|----------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------- | ------------------------------- | ------------------------------------------ | ------------------------------------ | ---------- | ---------------------- | ---------- | ---------- | ---------- | ---------- |  | 
|                                                      |                                                                                                                   |                                 |                                            |                                      |            | 9/30/03                |            | 12/31/02  
|                                                      |                                                                                                                   |                                 |                                            |                                      |            |                        |            |           
|                                                      |                                                                                                                   |                                 |                                            |                                      |            | (Dollars in thousands,
|                                                      |                                                                                                                   |                                 |                                            |                                      |            | except per share data)
|                                                      |                                                                                                                   |                                 |                                            | ASSETS                               |            |                        |            |            |            |            |  | 
|Cash accounts                                         |                                                                                                                   | $                               | 518,978                                    |                                      |            | $                      | 436,970    |           
|Interest-bearing deposits with banks                  |                                                                                                                   |                                 | 7,556                                      |                                      |            |                        | 9,731      |           
|Federal funds sold and other                          |                                                                                                                   |                                 | 516                                        |                                      |            |                        | 512        |           
|                                                      |                                                                                                                   |                                 |                                            |                                      |            |                        |            |           
|                                                      |                                                                                                                   | Total cash and cash equivalents |                                            |                                      | 527,050    |                        |            |            | 447,213    |           
|Investment securities:                                |                                                                                                                   |                                 |                                            |                                      |            |                        |            |           
|                                                      | Available for sale                                                                                                |                                 |                                            | 270,511                              |            |                        |            | 210,095    |           
|                                                      | Held to maturity (fair value of $4,241 and $4,276)                                                                |                                 |                                            | 3,952                                |            |                        |            | 3,973      |           
|Mortgage-backed securities:                           |                                                                                                                   |                                 |                                            |                                      |            |                        |            |           
|                                                      | Available for sale                                                                                                |                                 |                                            | 11,078,285                           |            |                        |            | 11,536,608 |           
|                                                      | Held to maturity (fair value of $304,926 and $565,072)                                                            |                                 |                                            | 292,336                              |            |                        |            | 540,781    |           
|Loans and leases, net                                 |                                                                                                                   |                                 | 27,735,087                                 |                                      |            |                        | 25,852,846 |           
|Loans held for sale                                   |                                                                                                                   |                                 | 296,078                                    |                                      |            |                        | 351,892    |           
|Bank owned life insurance                             |                                                                                                                   |                                 | 823,676                                    |                                      |            |                        | 829,043    |           
|Federal Home Loan Bank and Federal Reserve Bank stock |                                                                                                                   |                                 | 700,170                                    |                                      |            |                        | 681,923    |           
|Premises and equipment                                |                                                                                                                   |                                 | 391,615                                    |                                      |            |                        | 353,730    |           
|Accrued interest receivable                           |                                                                                                                   |                                 | 147,254                                    |                                      |            |                        | 154,962    |           
|Real estate and other collateral owned                |                                                                                                                   |                                 | 48,198                                     |                                      |            |                        | 42,980     |           
|Loan servicing assets                                 |                                                                                                                   |                                 | 168,697                                    |                                      |            |                        | 128,564    |           
|Goodwill                                              |                                                                                                                   |                                 | 415,696                                    |                                      |            |                        | 386,372    |           
|Other assets                                          |                                                                                                                   |                                 | 380,647                                    |                                      |            |                        | 375,090    |           
|                                                      |                                                                                                                   |                                 |                                            |                                      |            |                        |            |           
|                                                      |                                                                                                                   | Total assets                    |                                            | $                                    | 43,279,252 |                        |            | $          | 41,896,072 |           
|                                                      |                                                                                                                   |                                 |                                            |                                      |            |                        |            |           
|                                                      |                                                                                                                   |                                 |                                            | LIABILITIES AND SHAREHOLDERS EQUITY |            |                        |            |            |            |            |  | 
|Deposits                                              |                                                                                                                   | $                               | 28,046,238                                 |                                      |            | $                      | 27,527,843 |           
|Federal Home Loan Bank advances                       |                                                                                                                   |                                 | 9,820,184                                  |                                      |            |                        | 9,037,925  |           
|Federal funds purchased and repurchase agreements     |                                                                                                                   |                                 | 62,716                                     |                                      |            |                        | 283,912    |           
|Other borrowings                                      |                                                                                                                   |                                 | 704,629                                    |                                      |            |                        | 708,853    |           
|Advance payments by borrowers for taxes and insurance |                                                                                                                   |                                 | 50,768                                     |                                      |            |                        | 23,595     |           
|Accrued interest payable                              |                                                                                                                   |                                 | 65,075                                     |                                      |            |                        | 38,372     |           
|Accrued expenses and other liabilities                |                                                                                                                   |                                 | 1,288,801                                  |                                      |            |                        | 1,191,747  |           
|                                                      |                                                                                                                   |                                 |                                            |                                      |            |                        |            |           
|                                                      |                                                                                                                   | Total liabilities               |                                            |                                      | 40,038,411 |                        |            |            | 38,812,247 |           
|                                                      |                                                                                                                   |                                 |                                            |                                      |            |                        |            |           
|Commitments and contingencies                         |                                                                                                                   |                                 |                                           |                                      |            |                        |           |           
|Shareholders equity:                                 |                                                                                                                   |                                 |                                            |                                      |            |                        |            |           
|                                                      | Preferred stock  $.01 par value per share; 20,000,000
shares authorized and unissued                             |                                 |                                            |                                     |            |                        |            |           |           
|                                                      | Common stock  $.01 par value per share; 360,000,000
shares authorized; 229,944,441 and 227,571,468 shares issued |                                 |                                            | 2,299                                |            |                        |            | 2,276      |           
|                                                      | Additional paid-in capital                                                                                        |                                 |                                            | 2,274,947                            |            |                        |            | 2,193,095  |           
|                                                      | Retained earnings                                                                                                 |                                 |                                            | 1,098,042                            |            |                        |            | 824,564    |           
|                                                      | Less 6,953,759 and 2,781,151 shares of common stock held in treasury at cost                                      |                                 |                                            | (215,085                             | )          |                        |            | (82,610    | )         
|                                                      | Accumulated other comprehensive income                                                                            |                                 |                                            | 80,638                               |            |                        |            | 146,500    |           
|                                                      |                                                                                                                   |                                 |                                            |                                      |            |                        |            |           
|                                                      |                                                                                                                   |                                 | Total shareholders equity                 |                                      |            | 3,240,841              |            |            |            | 3,083,825  | 
|                                                      |                                                                                                                   |                                 |                                            |                                      |            |                        |            |           
|                                                      |                                                                                                                   |                                 | Total liabilities and shareholders equity |                                      | $          | 43,279,252             |            |            | $          | 41,896,072 | 
|                                                      |                                                                                                                   |                                 |                                            |                                      |            |                        |            |           

See Notes to Consolidated Financial Statements.

1



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##### Table of Contents









CHARTER ONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)

|                                              |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |             |           | 
|--------------------------------------------- | --------------------------------------------- | ----------------------------------------------------------------------- | ------- | ----------------------------------------------------- | ------- | ----------------- | ------- | ----------- | ------- |  |  | ------- |  | ------- | ------- | ----------- | --------- | - | ------- | ----------- | --------- | 
|                                              |                                               |                                                                         |         | Three Months Ended                                    |         | Nine Months Ended
|                                              |                                               |                                                                         |         |                                                       |         |                  
|                                              |                                               |                                                                         |         | 9/30/03                                               |         | 9/30/02           |         |             |         |  |  | 9/30/03 |  | 9/30/02
|                                              |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |        
|                                              |                                               |                                                                         |         | (Dollars in thousands,
        except per share data)
|Interest
          income:                    |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |            
|                                              | Loans
          and leases                    |                                                                         | $       | 368,952                                               |         |                   | $       | 410,237     |         |  |  |         |  |         | $       | 1,114,278   |           |   | $       | 1,253,132   |          
|                                              | Mortgage-backed
          securities:         |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |             |          
|                                              |                                               | Available
          for sale                                            |         |                                                       | 129,695 |                   |         |             | 135,099 |  |  |         |  |         |         |             | 433,496   |   |         |             | 388,000   | 
|                                              |                                               | Held
          to maturity                                              |         |                                                       | 5,326   |                   |         |             | 10,695  |  |  |         |  |         |         |             | 20,453    |   |         |             | 37,756    | 
|                                              | Investment
          securities:              |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |             |          
|                                              |                                               | Available
          for sale                                            |         |                                                       | 3,563   |                   |         |             | 2,939   |  |  |         |  |         |         |             | 9,903     |   |         |             | 8,526     | 
|                                              |                                               | Held
          to maturity                                              |         |                                                       | 51      |                   |         |             | 61      |  |  |         |  |         |         |             | 161       |   |         |             | 192       | 
|                                              | Other
          interest-earning assets       |                                                                         |         | 7,531                                                 |         |                   |         | 9,729       |         |  |  |         |  |         |         | 22,772      |           |   |         | 27,119      |          
|                                              |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |            
|                                              |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |             |           | 
|                                              |                                               | Total
          interest income                                         |         |                                                       | 515,118 |                   |         |             | 568,760 |  |  |         |  |         |         |             | 1,601,063 |   |         |             | 1,714,725 | 
|                                              |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |            
|Interest
          expense:                   |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |            
|                                              | Deposits                                      |                                                                         |         | 115,862                                               |         |                   |         | 160,821     |         |  |  |         |  |         |         | 376,339     |           |   |         | 500,798     |          
|                                              | Federal
          Home Loan Bank advances     |                                                                         |         | 100,813                                               |         |                   |         | 103,729     |         |  |  |         |  |         |         | 304,637     |           |   |         | 311,372     |          
|                                              | Other
          borrowings                    |                                                                         |         | 13,185                                                |         |                   |         | 13,943      |         |  |  |         |  |         |         | 40,357      |           |   |         | 31,324      |          
|                                              |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |             |          
|                                              |                                               | Total
          interest expense                                        |         |                                                       | 229,860 |                   |         |             | 278,493 |  |  |         |  |         |         |             | 721,333   |   |         |             | 843,494   | 
|                                              |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |            
|                                              |                                               | Net
          interest income                                           |         |                                                       | 285,258 |                   |         |             | 290,267 |  |  |         |  |         |         |             | 879,730   |   |         |             | 871,231   | 
|Provision
          for loan and lease losses |                                               |                                                                         | 37,663  |                                                       |         |                   | 47,695  |             |         |  |  |         |  |         | 134,494 |             |           |   | 131,689 |            
|                                              |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |            
|                                              |                                               | Net
          interest income after provision for loan and lease losses |         |                                                       | 247,595 |                   |         |             | 242,572 |  |  |         |  |         |         |             | 745,236   |   |         |             | 739,542   | 
|                                              |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |            
|Other
          income:                       |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |            
|                                              | Retail
          banking                      |                                                                         |         | 94,183                                                |         |                   |         | 84,175      |         |  |  |         |  |         |         | 275,370     |           |   |         | 241,474     |          
|                                              | Mortgage
          banking                    |                                                                         |         | 65,604                                                |         |                   |         | (36,961     | )       |  |  |         |  |         |         | 41,682      |           |   |         | (16,503     | )        
|                                              | Leasing
          operations                  |                                                                         |         | (4,118                                                | )       |                   |         | 404         |         |  |  |         |  |         |         | (23,204     | )         |   |         | 991         |          
|                                              | Net
          gains                           |                                                                         |         | 16,112                                                |         |                   |         | 83,881      |         |  |  |         |  |         |         | 201,314     |           |   |         | 143,448     |          
|                                              | Bank
          owned life insurance and other |                                                                         |         | 8,638                                                 |         |                   |         | 7,582       |         |  |  |         |  |         |         | 25,044      |           |   |         | 26,014      |          
|                                              |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |             |          
|                                              |                                               | Total
          other income                                            |         |                                                       | 180,419 |                   |         |             | 139,081 |  |  |         |  |         |         |             | 520,206   |   |         |             | 395,424   | 
|                                              |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |            
|Administrative
          expenses:            |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |            
|                                              | Compensation
          and employee benefits  |                                                                         |         | 92,582                                                |         |                   |         | 81,443      |         |  |  |         |  |         |         | 270,428     |           |   |         | 239,340     |          
|                                              | Net
          occupancy and equipment         |                                                                         |         | 31,985                                                |         |                   |         | 30,288      |         |  |  |         |  |         |         | 93,637      |           |   |         | 86,485      |          
|                                              | Marketing
          expenses                  |                                                                         |         | 22,411                                                |         |                   |         | 11,788      |         |  |  |         |  |         |         | 56,263      |           |   |         | 30,629      |          
|                                              | Federal
          deposit insurance premiums  |                                                                         |         | 1,118                                                 |         |                   |         | 1,104       |         |  |  |         |  |         |         | 3,385       |           |   |         | 3,421       |          
|                                              | Other
          administrative expenses       |                                                                         |         | 46,733                                                |         |                   |         | 46,683      |         |  |  |         |  |         |         | 149,162     |           |   |         | 142,209     |          
|                                              |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |            
|                                              |                                               | Total
          administrative expenses                                 |         |                                                       | 194,829 |                   |         |             | 171,306 |  |  |         |  |         |         |             | 572,875   |   |         |             | 502,084   | 
|                                              |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |            
|Income
          before income taxes          |                                               |                                                                         | 233,185 |                                                       |         |                   | 210,347 |             |         |  |  |         |  |         | 692,567 |             |           |   | 632,882 |            
|Income
          taxes                        |                                               |                                                                         | 74,036  |                                                       |         |                   | 66,785  |             |         |  |  |         |  |         | 219,890 |             |           |   | 200,940 |            
|                                              |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |            
|                                              |                                               | Net
          income                                                    |         | $                                                     | 159,149 |                   |         | $           | 143,562 |  |  |         |  |         |         | $           | 472,677   |   |         | $           | 431,942   | 
|                                              |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |            
|Basic
          earnings per share            |                                               | $                                                                       | .71     |                                                       |         | $                 | .63     |             |         |  |  |         |  | $       | 2.11    |             |           | $ | 1.87    |            
|                                              |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |            
|Diluted
          earnings per share          |                                               | $                                                                       | .69     |                                                       |         | $                 | .61     |             |         |  |  |         |  | $       | 2.05    |             |           | $ | 1.82    |            
|                                              |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |            
|Average
          common shares outstanding:  |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |            
|                                              | Basic                                         |                                                                         |         | 224,399,805                                           |         |                   |         | 228,765,954 |         |  |  |         |  |         |         | 224,966,297 |           |   |         | 230,549,330 |          
|                                              |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |            
|                                              | Diluted                                       |                                                                         |         | 230,661,929                                           |         |                   |         | 235,615,457 |         |  |  |         |  |         |         | 230,739,490 |           |   |         | 237,653,561 |          
|                                              |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |            
|Cash
          dividends declared per share   |                                               | $                                                                       | .26     |                                                       |         | $                 | .21     |             |         |  |  |         |  | $       | .72     |             |           | $ | .61     |            
|                                              |                                               |                                                                         |         |                                                       |         |                   |         |             |         |  |  |         |  |         |         |             |           |   |         |            

See Notes to Consolidated Financial Statements.

2



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##### Table of Contents









CHARTER ONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

|                                                             |                                                                                             |                                                                                                             |                                                     |            |                        |          |           |            |            |          |  
|------------------------------------------------------------ | ------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------- | --------------------------------------------------- | ---------- | ---------------------- | -------- | --------- | ---------- | ---------- | -------- | -
|                                                             |                                                                                             |                                                                                                             |                                                     |            | Nine Months Ended     
|                                                             |                                                                                             |                                                                                                             |                                                     |            |                       
|                                                             |                                                                                             |                                                                                                             |                                                     |            | 9/30/03                |          | 9/30/02  
|                                                             |                                                                                             |                                                                                                             |                                                     |            |                        |          |          
|                                                             |                                                                                             |                                                                                                             |                                                     |            | (Dollars in thousands)
|Cash
          flows from operating activities:              |                                                                                             |                                                                                                             |                                                     |            |                        |          |           |           
|                                                             | Net
          income                                                                        |                                                                                                             | $                                                   | 472,677    |                        |          | $         | 431,942    |           
|                                                             | Adjustments
          to reconcile net income to net cash provided by operating activities: |                                                                                                             |                                                     |            |                        |          |           |            |           
|                                                             |                                                                                             | Provision
          for loan and lease losses                                                               |                                                     |            | 134,494                |          |           |            | 131,689    |         
|                                                             |                                                                                             | Net
          gains                                                                                         |                                                     |            | (201,314               | )        |           |            | (143,448   | )       
|                                                             |                                                                                             | Accretion
          of discounts, amortization of premiums, and amortization of depreciation,
          net |                                                     |            | 147,373                |          |           |            | 131,768    |         
|                                                             |                                                                                             | Origination
          of loans held for sale                                                                |                                                     |            | (2,715,313             | )        |           |            | (1,652,269 | )       
|                                                             |                                                                                             | Proceeds
          from sale of loans held for sale                                                         |                                                     |            | 2,711,096              |          |           |            | 1,647,746  |         
|                                                             |                                                                                             | Increase
          in accrued interest payable                                                              |                                                     |            | 26,703                 |          |           |            | 8,489      |         
|                                                             |                                                                                             | Other                                                                                                       |                                                     |            | 117,679                |          |           |            | 398,568    |         
|                                                             |                                                                                             |                                                                                                             |                                                     |            |                        |          |           |           
|                                                             |                                                                                             |                                                                                                             | Net
          cash provided by operating activities |            |                        | 693,395  |           |            |            | 954,485  |  
|                                                             |                                                                                             |                                                                                                             |                                                     |            |                        |          |           |           
|Cash
          flows from investing activities:              |                                                                                             |                                                                                                             |                                                     |            |                        |          |           |           
|                                                             | Net
          principal disbursed on loans and leases                                       |                                                                                                             |                                                     | (7,587,052 | )                      |          |           | (4,910,650 | )         
|                                                             | Proceeds
          from principal repayments and maturities of:                             |                                                                                                             |                                                     |            |                        |          |           |            |           
|                                                             |                                                                                             | Mortgage-backed
          securities held to maturity                                                       |                                                     |            | 251,653                |          |           |            | 338,713    |         
|                                                             |                                                                                             | Mortgage-backed
          securities available for sale                                                     |                                                     |            | 5,169,325              |          |           |            | 1,267,603  |         
|                                                             |                                                                                             | Investment
          securities held to maturity                                                            |                                                     |            | 541                    |          |           |            | 1,851      |         
|                                                             |                                                                                             | Investment
          securities available for sale                                                          |                                                     |            | 59,305                 |          |           |            | 26,618     |         
|                                                             | Proceeds
          from sale of:                                                            |                                                                                                             |                                                     |            |                        |          |           |            |           
|                                                             |                                                                                             | Mortgage-backed
          securities available for sale                                                     |                                                     |            | 8,268,905              |          |           |            | 9,054,320  |         
|                                                             |                                                                                             | Investment
          securities available for sale                                                          |                                                     |            | 40,938                 |          |           |            | 1,642      |         
|                                                             |                                                                                             | Federal
          Home Loan Bank and Federal Reserve Bank stock                                             |                                                     |            | 18,492                 |          |           |            | 8,082      |         
|                                                             | Purchase
          of:                                                                      |                                                                                                             |                                                     |            |                        |          |           |            |           
|                                                             |                                                                                             | Mortgage-backed
          securities available for sale                                                     |                                                     |            | (6,862,003             | )        |           |            | (5,730,658 | )       
|                                                             |                                                                                             | Investment
          securities available for sale                                                          |                                                     |            | (57,235                | )        |           |            | (76,599    | )       
|                                                             |                                                                                             | Federal
          Home Loan Bank and Federal Reserve Bank stock                                             |                                                     |            | (10,213                | )        |           |            | (42,657    | )       
|                                                             |                                                                                             | Loans                                                                                                       |                                                     |            | (47,611                | )        |           |            | (12,727    | )       
|                                                             |                                                                                             | Net
          cash received (paid) in connection with business combinations                                 |                                                     |            | 77,944                 |          |           |            | (90,425    | )       
|                                                             | Other                                                                                       |                                                                                                             |                                                     | (150,716   | )                      |          |           | (122,819   | )         
|                                                             |                                                                                             |                                                                                                             |                                                     |            |                        |          |           |           
|                                                             |                                                                                             |                                                                                                             | Net
          cash used in investing activities     |            |                        | (827,727 | )         |            |            | (287,706 | )
|                                                             |                                                                                             |                                                                                                             |                                                     |            |                        |          |           |           
|Cash
          flows from financing activities:              |                                                                                             |                                                                                                             |                                                     |            |                        |          |           |           
|                                                             | Net
          decrease in short-term borrowings                                             |                                                                                                             |                                                     | (1,261,196 | )                      |          |           | (1,238,785 | )         
|                                                             | Proceeds
          from long-term borrowings                                                |                                                                                                             |                                                     | 2,011,127  |                        |          |           | 424,209    |           
|                                                             | Repayments
          of long-term borrowings                                                |                                                                                                             |                                                     | (265,014   | )                      |          |           | (24,237    | )         
|                                                             | Increase
          in deposits                                                              |                                                                                                             |                                                     | 21,421     |                        |          |           | 1,722,959  |           
|                                                             | Increase
          (decrease) in advance payments by borrowers for taxes and insurance      |                                                                                                             |                                                     | 27,173     |                        |          |           | (6,525     | )         
|                                                             | Payment
          of dividends on common stock                                              |                                                                                                             |                                                     | (162,106   | )                      |          |           | (141,367   | )         
|                                                             | Proceeds
          from issuance of common stock                                            |                                                                                                             |                                                     | 48,907     |                        |          |           | 53,747     |           
|                                                             | Purchase
          of treasury stock                                                        |                                                                                                             |                                                     | (206,143   | )                      |          |           | (342,740   | )         
|                                                             |                                                                                             |                                                                                                             |                                                     |            |                        |          |           |           
|                                                             |                                                                                             | Net
          cash provided by financing activities                                                         |                                                     |            | 214,169                |          |           |            | 447,261    |         
|                                                             |                                                                                             |                                                                                                             |                                                     |            |                        |          |           |           
|Net
          increase in cash and cash equivalents          |                                                                                             |                                                                                                             | 79,837                                              |            |                        |          | 1,114,040 |           
|Cash
          and cash equivalents, beginning of the period |                                                                                             |                                                                                                             | 447,213                                             |            |                        |          | 516,520   |           
|                                                             |                                                                                             |                                                                                                             |                                                     |            |                        |          |           |           
|Cash
          and cash equivalents, end of period           |                                                                                             | $                                                                                                           | 527,050                                             |            |                        | $        | 1,630,560 |           
|                                                             |                                                                                             |                                                                                                             |                                                     |            |                        |          |           |           
|Supplemental
          disclosure of cash flow information:  |                                                                                             |                                                                                                             |                                                     |            |                        |          |           |           
|                                                             | Cash
          paid for interest on deposits and borrowings                                 |                                                                                                             | $                                                   | 693,117    |                        |          | $         | 977,446    |           
|                                                             | Cash
          paid for income taxes                                                        |                                                                                                             |                                                     | 127,000    |                        |          |           | 4,500      |           
|Supplemental
          schedule of noncash activities:       |                                                                                             |                                                                                                             |                                                     |            |                        |          |           |           
|                                                             | Loans
          exchanged for mortgage-backed securities                                    |                                                                                                             |                                                     | 5,991,223  |                        |          |           | 5,066,120  |           

See Notes to Consolidated Financial Statements.

3



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##### Table of Contents









CHARTER ONE FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)



|1. |  | These interim consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Charter One Financial, Inc. (the Company or Charter
One) Annual Report on Form 10-K for the year ended December 31, 2002.
The interim financial statements reflect all adjustments which are, in the
opinion of management, necessary for a fair presentation of the results
for the periods presented. Such adjustments are of a normal recurring
nature. The results of operations for the interim periods disclosed
herein are not necessarily indicative of the results that may be expected
for a full year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Charter One has one operating segment, consumer banking, which offers an
array of products and services to its customers. Pursuant to its consumer
banking strategy, emphasis is placed on building relationships and
identifying cross-sell opportunities with its customers, as opposed to
building specific lines of business. As a result, Charter One works as an
integrated unit to customize solutions for its customers, with business
line emphasis and product offerings changing over time as needs and
demands change.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|3. |  | In November 2002, the Financial Accounting Standards Board (FASB)
issued FASB Interpretation (FIN) No. 45, Guarantors Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others. This interpretation expands the disclosures to be
made by a guarantor in its financial statements about its obligations
under certain guarantees and requires the guarantor to recognize a
liability for the fair value of an obligation assumed under a guarantee.
FIN 45 clarifies the requirements of Statement of Financial Accounting
Standards (SFAS) No. 5, Accounting for Contingencies, relating to
guarantees. In general, FIN 45 applies to contracts or indemnification
agreements that contingently require the guarantor to make payments to the
guaranteed party based on changes in an underlying that is related to an
asset, liability, or equity security of the guaranteed party. Certain
guarantee contracts are excluded from both the disclosure and recognition
requirements of FIN 45, including, among others, guarantees relating to
employee compensation, residual value guarantees under capital lease
arrangements, commercial letters of credit, loan commitments, subordinated
interests in a special purpose entity, and guarantees of a companys own
future performance. Other guarantees are subject to the disclosure
requirements of FIN 45 but not to the recognition provisions and include,
among others, a guarantee accounted for as a derivative instrument under
SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, as amended, a parents guarantee of debt owed to a third
party by its subsidiary or vice versa, and a guarantee which is based on
performance, not price. The disclosure requirements of FIN 45 are
effective for the Company as of December 31, 2002, and require disclosure
of the nature of the guarantee, the maximum potential amount of future
payments that the guarantor could be required to make under the guarantee,
and the current amount of the liability, if any, for the guarantors
obligations under the guarantee. The recognition requirements of FIN 45
are to be applied prospectively to guarantees issued or modified after
December 31, 2002. The adoption of FIN 45 did not have a material impact
on the Companys consolidated financial condition or results of
operations.
|  
|4. |  | In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation -Transition and Disclosure, an amendment of SFAS
No. 123, Accounting for Stock-Based Compensation. SFAS No. 148 provides
alternative methods of transition for an entity that voluntarily changes
to the fair value based method of accounting for stock-based employee
compensation. It also amends the disclosure provisions of SFAS No. 123 to
require prominent disclosure about the effects on reported net income of
an entitys accounting policy decisions with respect to stock-based
employee compensation. Finally, SFAS No. 148 amends Accounting Principles
Board (APB) Opinion No. 28, Interim Financial Reporting, to require
disclosure about those effects in interim financial information. The
Company has elected to continue application of APB Opinion No. 25 and
related interpretations in accounting for its stock-based employee
compensation plans. Accordingly, no stock-based employee compensation
cost is, or is expected to be, reflected in net income, as all options
granted under the Companys stock-based employee compensation plans had an
exercise price equal to the market value of the underlying common stock on
the date of grant. Had stock-based employee compensation costs of the
Companys stock option plans been determined based on the fair value at
the grant dates for awards under those plans consistent with the method of
SFAS No. 123, as amended by SFAS No. 148, the Companys net income and
earnings per share would have been reduced to the pro forma amounts
indicated below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

4



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##### Table of Contents



|                            |                                                                                                                         |  |                                               |         |                   |  |         |         |         |  |   |         |   |  |   |         |  
|--------------------------- | ----------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------- | ------- | ----------------- |  | ------- | ------- | ------- |  | - | ------- | - |  | - | ------- | -
|                            |                                                                                                                         |  | Three Months Ended                            |         | Nine Months Ended
|                            |                                                                                                                         |  |                                               |         |                  
|                            |                                                                                                                         |  | 9/30/03                                       |         | 9/30/02           |  | 9/30/03 |         | 9/30/02
|                            |                                                                                                                         |  |                                               |         |                   |  |         |         |        
|                            |                                                                                                                         |  | (Dollars in thousands, except per share data)
|Net income:                 |                                                                                                                         |  |                                               |         |                   |  |         |         |         |  |   |         |   |  |   |        
|                            | As reported                                                                                                             |  | $                                             | 159,149 |                   |  | $       | 143,562 |         |  | $ | 472,677 |   |  | $ | 431,942 |  
|                            | Less: Total stock-based employee compensation
expense determined under the fair value
method
for all awards, net of tax |  |                                               | (7,136  | )                 |  |         | (6,887  | )       |  |   | (22,154 | ) |  |   | (20,971 | )
|                            |                                                                                                                         |  |                                               |         |                   |  |         |         |         |  |   |         |   |  |   |        
|                            | Pro forma                                                                                                               |  | $                                             | 152,013 |                   |  | $       | 136,675 |         |  | $ | 450,523 |   |  | $ | 410,971 |  
|                            |                                                                                                                         |  |                                               |         |                   |  |         |         |         |  |   |         |   |  |   |        
|Basic earnings per share:   |                                                                                                                         |  |                                               |         |                   |  |         |         |         |  |   |         |   |  |   |        
|                            | As reported                                                                                                             |  | $                                             | .71     |                   |  | $       | .63     |         |  | $ | 2.11    |   |  | $ | 1.87    |  
|                            | Pro forma                                                                                                               |  |                                               | .68     |                   |  |         | .60     |         |  |   | 2.00    |   |  |   | 1.79    |  
|Diluted earnings per share: |                                                                                                                         |  |                                               |         |                   |  |         |         |         |  |   |         |   |  |   |        
|                            | As reported                                                                                                             |  |                                               | .69     |                   |  |         | .61     |         |  |   | 2.05    |   |  |   | 1.82    |  
|                            | Pro forma                                                                                                               |  |                                               | .66     |                   |  |         | .58     |         |  |   | 1.96    |   |  |   | 1.73    |  



| |  | The fair value of each stock option grant was estimated on the date of grant
using the Black-Scholes option-pricing model with the following assumptions
used for grants in the three and nine months ended September 30, 2003 and
2002:
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                        |  |                    |             |                   |  |         |             |         |  |  |             |   |  |  |             |  
|----------------------- |  | ------------------ | ----------- | ----------------- |  | ------- | ----------- | ------- |  |  | ----------- | - |  |  | ----------- | -
|                        |  | Three Months Ended |             | Nine Months Ended
|                        |  |                    |             |                  
|                        |  | 9/30/03            |             | 9/30/02           |  | 9/30/03 |             | 9/30/02
|                        |  |                    |             |                   |  |         |             |        
|Dividend yield          |  |                    | 3.00        | %                 |  |         | 3.00        | %       |  |  | 3.00        | % |  |  | 3.00        | %
|Volatility              |  |                    | 37.65-37.84 | %                 |  |         | 36.04-37.15 | %       |  |  | 37.65-47.26 | % |  |  | 35.94-37.15 | %
|Risk-free interest rate |  |                    | 3.37-3.79   | %                 |  |         | 3.67-4.20   | %       |  |  | 2.68-3.79   | % |  |  | 3.67-4.98   | %
|Life of grant           |  | 6 years            |             | 6 years           |  | 6 years |             | 6 years



|   |  | The estimated weighted-average date of grant fair value (based on the above
option-pricing model and assumptions) was $9.82 and $9.36 for stock options
granted in the three months ended September 30, 2003 and 2002, respectively,
and $10.93 and $8.96 for stock options granted in the nine months ended
September 30, 2003 and 2002, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|5. |  | In January 2003, the FASB issued FIN No. 46, Consolidation of Variable
Interest Entities. FIN 46 provides guidance on how to identify a variable
interest entity (VIE) and determine when the assets, liabilities,
noncontrolling interests, and results of operations of a VIE need to be
included in a companys consolidated financial statements. FIN 46 also
requires additional disclosures by primary beneficiaries and other
significant variable interest holders. The provisions of the
interpretation became effective upon issuance. The adoption of FIN 46 did
not have a material impact on the Companys consolidated financial
condition or results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|6. |  | In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133
on Derivative Instruments and Hedging Activities. SFAS No. 149 amends
SFAS No. 133 for certain decisions made by the FASB as part of the
Derivatives Implementation Group (DIG) process. For those amendments
that relate to SFAS No. 133 implementation guidance, the specific SFAS No.
133 Implementation Issue necessitating the amendment is identified. If the
amendment relates to a cleared issue, the clearance date also is noted.
SFAS No. 149 also amends SFAS No. 133 to incorporate clarifications of the
definition of a derivative. SFAS No. 149 contains amendments relating to
FASB Concepts Statement No. 7, Using Cash Flow Information and Present
Value in Accounting Measurements, SFAS No. 65, Accounting for Certain
Mortgage Banking Activities, SFAS No. 91, Accounting for Nonrefundable
Fees and Costs Associated with Originating or Acquiring Loans and Initial
Direct Costs of Leases, SFAS No. 95, Statement of Cash Flows, and SFAS
No. 126, Exemption from Certain Required Disclosures about Financial
Instruments for Certain Nonpublic Entities.
|  
|   |  | SFAS No. 149 is effective for contracts entered into or modified after June
30, 2003, except as stated below and for hedging relationships designated
after June 30, 2003. In addition, except as stated below, all provisions of
SFAS No. 149 should be applied prospectively. The provisions of SFAS No.
149 that relate to SFAS No. 133 Implementation Issues that have been
effective for fiscal quarters that began prior to June 15, 2003, should
continue to be applied in accordance with their respective effective dates.
In addition, guidance related to forward purchases or sales of when-issued
securities or other securities that do not yet exist, should be applied                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

5



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|   |  | to both existing contracts and new contracts entered into after June 30,
2003. The adoption of SFAS No. 149 did not have a material impact on the
Companys consolidated financial condition or results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|7. |  | In May 2003, the FASB issued SFAS No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and
Equity. SFAS No. 150 establishes standards on how to classify and
measure certain financial instruments with characteristics of both
liabilities and equity. SFAS No. 150 requires an issuer to classify
certain freestanding financial instruments as liabilities, which may have
been previously classified as equity, because those instruments embody
obligations of the issuer. SFAS No. 150 also requires disclosure of the
nature and terms of the financial instruments and the rights and
obligations embodied in those instruments. SFAS No. 150 is effective for
financial instruments entered into or modified after May 31, 2003, and is
otherwise effective as of the first interim period beginning after June
15, 2003. The adoption of SFAS No. 150 did not have a material impact on
the Companys consolidated financial condition or results of operations.                                                                                                                                                                                                                                                                                            
|  
|8. |  | On June 6, 2003, the Company completed its acquisition of Advance Bancorp
(Advance), the holding company of Advance Bank, an Illinois
state-chartered commercial bank headquartered in Lansing, Illinois. On
July 11, 2003, Advance Bank was merged into Charter One Bank, N.A. On June
6, 2003, Advance had assets of $667.5 million and deposits of $482.1
million in 14 branches located in Cook County, Illinois. The Company
issued 2,389,795 common shares and initially recorded $46.6 million of
goodwill based on a preliminary determination of the estimated fair values
of the assets and liabilities acquired as a result of this transaction.
During the third quarter of 2003, the Company reduced its goodwill related
to the Advance acquisition by $17.3 million to an ending balance of $29.3
million at September 30, 2003. The reduction resulted from adjustments to
the fair values of certain commercial real estate and corporate banking
loans acquired from Advance. The Company included the results of
operations of Advance in its Consolidated Financial Statements from the
effective date of the acquisition. Pro forma results of operations for
this acquisition, had the acquisition occurred as of January 1, 2003, are
not significant and, accordingly, are not provided.

6



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##### Table of Contents









ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

HOLDING COMPANY BUSINESS

The following financial review presents an analysis of the asset and liability
structure of Charter One Financial, Inc. and a discussion of the results of
operations for each of the periods presented.

General

Headquartered in Cleveland, Ohio, Charter One Financial, Inc., hereafter
referred to as Charter One or the Company, is a financial holding company.
Charter One is a Delaware corporation. As of September 30, 2003, the Company
owned all of the outstanding capital stock of Charter One Bank, N.A., a
national bank. We sometimes refer to this financial institution in this
document as the Bank. The Banks primary business is providing consumer
banking services to certain major markets in Ohio, Michigan, Illinois, New
York, Vermont, and in some markets of Massachusetts, Indiana, Connecticut and
Pennsylvania. As of September 30, 2003, the Bank and its subsidiaries were
doing business through 566 full-service branches, 27 loan production offices
and 956 ATMs.

Discussion of Forward-Looking Statements

This document, including information incorporated by reference, contains, and
future filings by Charter One on Form 10-K, Form 10-Q and Form 8-K and future
oral and written statements and press releases by Charter One and its
management may contain, forward-looking statements about Charter One which we
believe are within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements include, without limitation,
statements with respect to anticipated future operating and financial
performance, including revenue creation, lending origination, operating
efficiencies, loan sales, charge-offs and loan loss provisions, deposits and
refinancing of liabilities, growth opportunities, interest rates, acquisition
and divestiture opportunities, and synergies, efficiencies, cost savings and
funding advantages expected to be realized from prior acquisitions. These
forward-looking statements are based on currently available competitive,
financial and economic data and managements views and assumptions regarding
future events. These forward-looking statements are inherently uncertain, and
investors must recognize that actual results may differ from those expressed or
implied in the forward-looking statements. Accordingly, Charter One cautions
readers not to place undue reliance on any forward-looking statements.

Many of these forward-looking statements appear throughout this document.
Words such as may, could, should, would, believe, anticipate, estimate, expect,
intend, plan and similar expressions are intended to identify these
forward-looking statements. The important factors discussed below, as well as
other factors discussed elsewhere in this document and factors identified in
our filings with the Securities and Exchange Commission and those presented
elsewhere by our management from time to time, could cause actual results to
differ materially from those indicated by the forward-looking statements made
in this document. Among the factors that could cause our actual results to
differ from these forward-looking statements are:



| |  | the strength of the United States economy in general and the strength
of the local economies in which we conduct our operations; general
economic conditions, either nationally or regionally, may be less
favorable than expected, resulting in, among other things, a
deterioration in the credit quality of our loans and leases and other
assets;
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | the effects of, and changes in, trade, monetary and fiscal policies
and laws, including interest rate policies of the Federal Reserve
Board;                                                                                                                                                                                                         
| 
| |  | financial markets, monetary and interest rate fluctuations,
particularly the relative relationship of short-term interest rates to
long-term interest rates;                                                                                                                                                                                         
| 
| |  | the timely development of and acceptance of new products and services
of Charter One and the perceived overall value of these products and
services by users, including the features, pricing and quality
compared to competitors products and services;                                                                                            
| 
| |  | the impact of changes in financial services laws and regulations
(including laws and regulations concerning taxes, accounting
standards, banking, securities and insurance); legislative or
regulatory changes may adversely affect the business in which we are
engaged;                                                                            
| 
| |  | the impact of technological changes;                                                                                                                                                                                                                                                                                                                 

7



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##### Table of Contents





| |  | our ability to successfully integrate acquisitions into our existing
operations, and the availability of new acquisitions, joint ventures
and alliance opportunities that build shareholder value;
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | changes in consumer spending and saving habits; and                                                                                                                                               
| 
| |  | our success at managing the risks involved in the foregoing.                                                                                                                                      

Charter One disclaims any obligation to update or revise any forward-looking
statements based on the occurrence of future events, the receipt of new
information, or otherwise.

RESULTS OF OPERATIONS

Performance Overview

Figure 1 sets forth financial results and annualized performance ratios for the
three and nine months ended September 30, 2003 and 2002.

Selected Financial Results and Ratios (Figure 1)

|                                               |  |                                               |         |                   |  |         |         |         |  |   |         |   |  |   |         |  
|---------------------------------------------- |  | --------------------------------------------- | ------- | ----------------- |  | ------- | ------- | ------- |  | - | ------- | - |  | - | ------- | -
|                                               |  | Three Months Ended                            |         | Nine Months Ended
|                                               |  |                                               |         |                  
|                                               |  | 9/30/03                                       |         | 9/30/02           |  | 9/30/03 |         | 9/30/02
|                                               |  |                                               |         |                   |  |         |         |        
|                                               |  | (Dollars in thousands, except per share data)
|Net income                                     |  | $                                             | 159,149 |                   |  | $       | 143,562 |         |  | $ | 472,677 |   |  | $ | 431,942 |  
|Diluted earnings per share                     |  |                                               | .69     |                   |  |         | .61     |         |  |   | 2.05    |   |  |   | 1.82    |  
|Return on average assets                       |  |                                               | 1.46    | %                 |  |         | 1.46    | %       |  |   | 1.45    | % |  |   | 1.50    | %
|Return on average equity                       |  |                                               | 20.12   |                   |  |         | 18.89   |         |  |   | 19.52   |   |  |   | 19.47   |  
|Return on average tangible equity(1)           |  |                                               | 23.59   |                   |  |         | 21.70   |         |  |   | 22.58   |   |  |   | 22.38   |  
|Average equity to average assets               |  |                                               | 7.25    |                   |  |         | 7.72    |         |  |   | 7.41    |   |  |   | 7.68    |  
|Net interest income to administrative
expenses |  |                                               | 1.46    | x                 |  |         | 1.69    | x       |  |   | 1.54    | x |  |   | 1.74    | x
|Administrative expenses to average assets      |  |                                               | 1.79    | %                 |  |         | 1.74    | %       |  |   | 1.75    | % |  |   | 1.74    | %
|Efficiency ratio(2)                            |  |                                               | 41.84   |                   |  |         | 39.90   |         |  |   | 40.92   |   |  |   | 39.64   |  



---

|(1) |  | Computed as the ratio of net income, excluding the amortization of other
intangible assets, to average tangible equity.
|--- |  | -----------------------------------------------------------------------------------------------------------------------
|(2) |  | Computed as the ratio of total administrative expenses to net interest
income and total other income.                  

Net Interest Income

Net interest income is the difference between the interest and dividend income
earned on our loans and investments and the interest expense on our deposits
and borrowings. Net interest income is our principal source of earnings. Net
interest income is affected by a number of factors including the level, pricing
and maturity of interest-earning assets and interest-bearing liabilities,
interest rate fluctuations and asset quality, as well as general economic
conditions and regulatory policies.

The following table shows average balances, interest earned or paid, and
average interest rates for the periods indicated. Nonaccrual loans are
included in the average balance of loans. The mark-to-market adjustments on
securities available for sale are included in noninterest-earning assets.
Noninterest-bearing demand deposit accounts are included in noninterest-bearing
liabilities. The cost of liabilities includes the annualized effect of
interest rate risk management instruments.

8



---



##### Table of Contents



Average Balances, Interest Rates and Yields/Costs(Figure 2)

|                                                                        |                                       |                                       |                                            |            |                        |            |          |         |         |         |         |      |                    |      |           |            |           |            |         |         |         |         |        |      |      |      | 
|----------------------------------------------------------------------- | ------------------------------------- | ------------------------------------- | ------------------------------------------ | ---------- | ---------------------- | ---------- | -------- | ------- | ------- | ------- | ------- | ---- | ------------------ | ---- | --------- | ---------- | --------- | ---------- | ------- | ------- | ------- | ------- | ------ | ---- | ---- | ---- | 
|                                                                        |                                       |                                       |                                            |            |                        |            |          |         |         |         |         |      | Three Months Ended |      |           |            |           |            |         |         |        
|                                                                        |                                       |                                       |                                            |            |                       
|                                                                        |                                       |                                       |                                            |            |                        |            |          |         | 9/30/03 |         |         |      |                    |      |           |            |           |            | 9/30/02 |         |         |         |       
|                                                                        |                                       |                                       |                                            |            |                        |            |         
|                                                                        |                                       |                                       |                                            |            |                        |            |          |         |         |         |         |      | Avg.               |      |           |            |           |            |         |         |         |         | Avg.  
|                                                                        |                                       |                                       |                                            |            | Average                |            |          |         |         |         | Yield/  |      | Average            |      |           |            |           |            | Yield/ 
|                                                                        |                                       |                                       |                                            |            | Balance                |            | Interest |         | Cost    |         | Balance |      | Interest           |      | Cost     
|                                                                        |                                       |                                       |                                            |            |                        |            |          |         |         |         |         |      |                    |      |          
|                                                                        |                                       |                                       |                                            |            | (Dollars in thousands)
|Interest-earning assets:                                                |                                       |                                       |                                            |            |                        |            |          |         |         |         |         |      |                    |      |           |            |           |            |         |         |         |         |        |     
|                                                                        | Loans and leases                      |                                       | $                                          | 26,993,081 |                        |            | $        | 368,952 |         |         |         | 5.46 | %                  |      | $         | 25,460,404 |           |            | $       | 410,237 |         |         |        | 6.43 | %   
|                                                                        | Mortgage-backed securities:           |                                       |                                            |            |                        |            |          |         |         |         |         |      |                    |      |           |            |           |            |         |         |         |         |        |      |     
|                                                                        |                                       | Available for sale                    |                                            |            | 12,414,464             |            |          |         | 129,695 |         |         |      | 4.18               |      |           |            | 9,364,722 |            |         |         | 135,099 |         |        |      | 5.77 |     
|                                                                        |                                       | Held to maturity                      |                                            |            | 317,638                |            |          |         | 5,326   |         |         |      | 6.71               |      |           |            | 677,206   |            |         |         | 10,695  |         |        |      | 6.32 |     
|                                                                        | Investment securities:                |                                       |                                            |            |                        |            |          |         |         |         |         |      |                    |      |           |            |           |            |         |         |         |         |        |      |     
|                                                                        |                                       | Available for sale                    |                                            |            | 282,726                |            |          |         | 3,563   |         |         |      | 5.04               |      |           |            | 181,769   |            |         |         | 2,939   |         |        |      | 6.47 |     
|                                                                        |                                       | Held to maturity                      |                                            |            | 3,771                  |            |          |         | 51      |         |         |      | 5.37               |      |           |            | 4,480     |            |         |         | 61      |         |        |      | 5.52 |     
|                                                                        | Other interest-earning assets         |                                       |                                            | 723,721    |                        |            |          | 7,531   |         |         |         | 4.07 |                    |      |           | 979,454    |           |            |         | 9,729   |         |         |        | 3.89 |     
|                                                                        |                                       |                                       |                                            |            |                        |            |          |         |         |         |         |      |                    |      |           |            |           |            |         |         |         |         |        |     
|                                                                        |                                       |                                       | Total interest-earning assets              |            |                        | 40,735,401 |          |         |         | 515,118 |         |      |                    | 5.05 |           |            |           | 36,668,035 |         |         |         | 568,760 |        |      |      | 6.19 | 
|                                                                        |                                       |                                       |                                            |            |                        |            |          |         |         |         |         |      |                    |      |           |            |           |            |         |         |         |         |        |     
|Allowance for loan and lease losses                                     |                                       |                                       | (379,527                                   | )          |                        |            |          |         |         |         |         |      |                    |      | (267,486  | )          |           |            |         |         |         |         |        |     
|Noninterest-earning assets                                              |                                       |                                       | 3,272,787                                  |            |                        |            |          |         |         |         |         |      |                    |      | 2,968,951 |            |           |            |         |         |         |         |        |     
|                                                                        |                                       |                                       |                                            |            |                        |            |          |         |         |         |         |      |                    |      |           |            |           |            |         |         |         |         |        |     
|                                                                        |                                       |                                       | Total assets                               |            | $                      | 43,628,661 |          |         |         |         |         |      |                    |      |           |            | $         | 39,369,500 |         |         |         |         |        |      |      |      | 
|                                                                        |                                       |                                       |                                            |            |                        |            |          |         |         |         |         |      |                    |      |           |            |           |            |         |         |         |         |        |     
|Interest-bearing liabilities:                                           |                                       |                                       |                                            |            |                        |            |          |         |         |         |         |      |                    |      |           |            |           |            |         |         |         |         |        |     
|                                                                        | Deposits:                             |                                       |                                            |            |                        |            |          |         |         |         |         |      |                    |      |           |            |           |            |         |         |         |         |        |      |     
|                                                                        |                                       | Checking accounts                     |                                            | $          | 6,166,100              |            |          |         | 14,960  |         |         |      | .96                |      |           | $          | 6,283,029 |            |         |         | 33,721  |         |        |      | 2.13 |     
|                                                                        |                                       | Money market and savings
accounts     |                                            |            | 8,545,286              |            |          |         | 23,765  |         |         |      | 1.10               |      |           |            | 8,378,267 |            |         |         | 44,790  |         |        |      | 2.12 |     
|                                                                        |                                       | Certificates of deposit               |                                            |            | 10,708,517             |            |          |         | 77,138  |         |         |      | 2.86               |      |           |            | 9,831,050 |            |         |         | 82,310  |         |        |      | 3.32 |     
|                                                                        |                                       |                                       |                                            |            |                        |            |          |         |         |         |         |      |                    |      |           |            |           |            |         |         |         |         |        |     
|                                                                        |                                       |                                       | Total deposits                             |            |                        | 25,419,903 |          |         |         | 115,863 |         |      |                    | 1.81 |           |            |           | 24,492,346 |         |         |         | 160,821 |        |      |      | 2.61 | 
|                                                                        |                                       |                                       |                                            |            |                        |            |          |         |         |         |         |      |                    |      |           |            |           |            |         |         |         |         |        |     
|                                                                        | Federal Home Loan Bank advances       |                                       |                                            | 10,265,634 |                        |            |          | 100,812 |         |         |         | 3.89 |                    |      |           | 7,944,811  |           |            |         | 103,729 |         |         |        | 5.18 |     
|                                                                        | Other borrowings                      |                                       |                                            | 871,430    |                        |            |          | 13,185  |         |         |         | 6.03 |                    |      |           | 929,957    |           |            |         | 13,943  |         |         |        | 5.97 |     
|                                                                        |                                       |                                       |                                            |            |                        |            |          |         |         |         |         |      |                    |      |           |            |           |            |         |         |         |         |        |     
|                                                                        |                                       |                                       | Total borrowings                           |            |                        | 11,137,064 |          |         |         | 113,997 |         |      |                    | 4.06 |           |            |           | 8,874,768  |         |         |         | 117,672 |        |      |      | 5.26 | 
|                                                                        |                                       |                                       |                                            |            |                        |            |          |         |         |         |         |      |                    |      |           |            |           |            |         |         |         |         |        |     
|                                                                        |                                       |                                       | Total interest-bearing liabilities         |            |                        | 36,556,967 |          |         |         | 229,860 |         |      |                    | 2.49 |           |            |           | 33,367,114 |         |         |         | 278,493 |        |      |      | 3.31 | 
|                                                                        |                                       |                                       |                                            |            |                        |            |          |         |         |         |         |      |                    |      |           |            |           |            |         |         |         |         |        |     
|Noninterest-bearing liabilities:                                        |                                       |                                       |                                            |            |                        |            |          |         |         |         |         |      |                    |      |           |            |           |            |         |         |         |         |        |     
|                                                                        | Demand deposit accounts               |                                       |                                            | 2,615,262  |                        |            |          |         |         |         |         |      |                    |      |           | 1,789,713  |           |            |         |         |         |         |        |      |     
|                                                                        | Other noninterest-bearing
liabilities |                                       |                                            | 1,292,960  |                        |            |          |         |         |         |         |      |                    |      |           | 1,173,108  |           |            |         |         |         |         |        |      |     
|                                                                        |                                       |                                       |                                            |            |                        |            |          |         |         |         |         |      |                    |      |           |            |           |            |         |         |         |         |        |     
|                                                                        |                                       | Total noninterest-bearing
liabilities |                                            |            | 3,908,222              |            |          |         |         |         |         |      |                    |      |           |            | 2,962,821 |            |         |         |         |         |        |      |      |     
|                                                                        |                                       |                                       |                                            |            |                        |            |          |         |         |         |         |      |                    |      |           |            |           |            |         |         |         |         |        |     
|                                                                        |                                       |                                       | Total liabilities                          |            |                        | 40,465,189 |          |         |         |         |         |      |                    |      |           |            |           | 36,329,935 |         |         |         |         |        |      |      |      | 
|Shareholders equity                                                    |                                       |                                       | 3,163,472                                  |            |                        |            |          |         |         |         |         |      |                    |      | 3,039,565 |            |           |            |         |         |         |         |        |     
|                                                                        |                                       |                                       |                                            |            |                        |            |          |         |         |         |         |      |                    |      |           |            |           |            |         |         |         |         |        |     
|                                                                        |                                       |                                       | Total liabilities and
shareholders equity |            | $                      | 43,628,661 |          |         |         |         |         |      |                    |      |           |            | $         | 39,369,500 |         |         |         |         |        |      |      |      | 
|                                                                        |                                       |                                       |                                            |            |                        |            |          |         |         |         |         |      |                    |      |           |            |           |            |         |         |         |         |        |     
|Net interest income                                                     |                                       |                                       |                                            |            |                        | $          | 285,258  |         |         |         |         |      |                    |      |           |            |           | $          | 290,267 |         |         |         |        |     
|                                                                        |                                       |                                       |                                            |            |                        |            |          |         |         |         |         |      |                    |      |           |            |           |            |         |         |         |         |        |     
|Interest rate spread                                                    |                                       |                                       |                                            |            |                        |            |          |         |         |         | 2.56    |      |                    |      |           |            |           |            |         |         |         |         | 2.88   |     
|Net yield on average interest-
earning assets                           |                                       |                                       |                                            |            |                        |            |          |         |         |         | 2.80    |      |                    |      |           |            |           |            |         |         |         |         | 3.17   |     
|Average interest-earning assets to
average interest-bearing liabilities |                                       |                                       |                                            |            |                        |            |          |         |         |         | 111.43  | %    |                    |      |           |            |           |            |         |         |         |         | 109.89 | %   

9



---



##### Table of Contents



|                                                                        |                                       |                                       |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |            |            |         |           |         |           |        |      |      |      | 
|----------------------------------------------------------------------- | ------------------------------------- | ------------------------------------- | ------------------------------------------ | ---------- | ---------------------- | ---------- | -------- | --------- | ------- | --------- | ------- | ---- | -------- | ---- | --------- | ---------- | ---------- | ---------- | ------- | --------- | ------- | --------- | ------ | ---- | ---- | ---- | 
|                                                                        |                                       |                                       |                                            |            | Nine Months Ended     
|                                                                        |                                       |                                       |                                            |            |                       
|                                                                        |                                       |                                       |                                            |            | 9/30/03                |            | 9/30/02 
|                                                                        |                                       |                                       |                                            |            |                        |            |         
|                                                                        |                                       |                                       |                                            |            |                        |            |          |           |         |           |         |      | Avg.     |      |           |            |            |            |         |           |         |           | Avg.  
|                                                                        |                                       |                                       |                                            |            | Average                |            |          |           |         |           | Yield/  |      | Average  |      |           |            |            |            | Yield/ 
|                                                                        |                                       |                                       |                                            |            | Balance                |            | Interest |           | Cost    |           | Balance |      | Interest |      | Cost     
|                                                                        |                                       |                                       |                                            |            |                        |            |          |           |         |           |         |      |          |      |          
|                                                                        |                                       |                                       |                                            |            | (Dollars in thousands)
|Interest-earning assets:                                                |                                       |                                       |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |            |            |         |           |         |           |        |     
|                                                                        | Loans and leases                      |                                       | $                                          | 26,321,364 |                        |            | $        | 1,114,278 |         |           |         | 5.65 | %        |      | $         | 25,296,320 |            |            | $       | 1,253,132 |         |           |        | 6.61 | %   
|                                                                        | Mortgage-backed securities:           |                                       |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |            |            |         |           |         |           |        |      |     
|                                                                        |                                       | Available for sale                    |                                            |            | 13,026,174             |            |          |           | 433,496 |           |         |      | 4.44     |      |           |            | 8,710,523  |            |         |           | 388,000 |           |        |      | 5.94 |     
|                                                                        |                                       | Held to maturity                      |                                            |            | 397,442                |            |          |           | 20,453  |           |         |      | 6.86     |      |           |            | 771,416    |            |         |           | 37,756  |           |        |      | 6.53 |     
|                                                                        | Investment securities:                |                                       |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |            |            |         |           |         |           |        |      |     
|                                                                        |                                       | Available for sale                    |                                            |            | 249,032                |            |          |           | 9,903   |           |         |      | 5.30     |      |           |            | 160,661    |            |         |           | 8,526   |           |        |      | 7.08 |     
|                                                                        |                                       | Held to maturity                      |                                            |            | 3,928                  |            |          |           | 161     |           |         |      | 5.47     |      |           |            | 4,998      |            |         |           | 192     |           |        |      | 5.13 |     
|                                                                        | Other interest-earning assets         |                                       |                                            | 775,216    |                        |            |          | 22,772    |         |           |         | 3.87 |          |      |           | 952,088    |            |            |         | 27,119    |         |           |        | 3.76 |     
|                                                                        |                                       |                                       |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |            |            |         |           |         |           |        |     
|                                                                        |                                       |                                       | Total interest-earning assets              |            |                        | 40,773,156 |          |           |         | 1,601,063 |         |      |          | 5.24 |           |            |            | 35,896,006 |         |           |         | 1,714,725 |        |      |      | 6.37 | 
|                                                                        |                                       |                                       |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |            |            |         |           |         |           |        |     
|Allowance for loan and lease losses                                     |                                       |                                       | (355,880                                   | )          |                        |            |          |           |         |           |         |      |          |      | (260,458  | )          |            |            |         |           |         |           |        |     
|Noninterest-earning assets                                              |                                       |                                       | 3,156,356                                  |            |                        |            |          |           |         |           |         |      |          |      | 2,863,644 |            |            |            |         |           |         |           |        |     
|                                                                        |                                       |                                       |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |            |            |         |           |         |           |        |     
|                                                                        |                                       |                                       | Total assets                               |            | $                      | 43,573,632 |          |           |         |           |         |      |          |      |           |            | $          | 38,499,192 |         |           |         |           |        |      |      |      | 
|                                                                        |                                       |                                       |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |            |            |         |           |         |           |        |     
|Interest-bearing liabilities:                                           |                                       |                                       |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |            |            |         |           |         |           |        |     
|                                                                        | Deposits:                             |                                       |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |            |            |         |           |         |           |        |      |     
|                                                                        |                                       | Checking accounts                     |                                            | $          | 6,881,546              |            |          |           | 68,990  |           |         |      | 1.34     |      |           | $          | 6,102,712  |            |         |           | 100,558 |           |        |      | 2.20 |     
|                                                                        |                                       | Money market and savings
accounts     |                                            |            | 8,271,203              |            |          |           | 85,295  |           |         |      | 1.38     |      |           |            | 7,915,705  |            |         |           | 132,271 |           |        |      | 2.23 |     
|                                                                        |                                       | Certificates of deposit               |                                            |            | 10,005,413             |            |          |           | 222,054 |           |         |      | 2.97     |      |           |            | 10,107,847 |            |         |           | 267,969 |           |        |      | 3.54 |     
|                                                                        |                                       |                                       |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |            |            |         |           |         |           |        |     
|                                                                        |                                       |                                       | Total deposits                             |            |                        | 25,158,162 |          |           |         | 376,339   |         |      |          | 2.00 |           |            |            | 24,126,264 |         |           |         | 500,798   |        |      |      | 2.78 | 
|                                                                        |                                       |                                       |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |            |            |         |           |         |           |        |     
|                                                                        | Federal Home Loan Bank advances       |                                       |                                            | 10,690,548 |                        |            |          | 304,637   |         |           |         | 3.81 |          |      |           | 7,966,061  |            |            |         | 311,372   |         |           |        | 5.22 |     
|                                                                        | Other borrowings                      |                                       |                                            | 870,680    |                        |            |          | 40,357    |         |           |         | 6.17 |          |      |           | 598,769    |            |            |         | 31,324    |         |           |        | 6.96 |     
|                                                                        |                                       |                                       |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |            |            |         |           |         |           |        |     
|                                                                        |                                       |                                       | Total borrowings                           |            |                        | 11,561,228 |          |           |         | 344,994   |         |      |          | 3.98 |           |            |            | 8,564,830  |         |           |         | 342,696   |        |      |      | 5.35 | 
|                                                                        |                                       |                                       |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |            |            |         |           |         |           |        |     
|                                                                        |                                       |                                       | Total interest-bearing liabilities         |            |                        | 36,719,390 |          |           |         | 721,333   |         |      |          | 2.62 |           |            |            | 32,691,094 |         |           |         | 843,494   |        |      |      | 3.45 | 
|                                                                        |                                       |                                       |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |            |            |         |           |         |           |        |     
|Noninterest-bearing liabilities:                                        |                                       |                                       |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |            |            |         |           |         |           |        |     
|                                                                        | Demand deposit accounts               |                                       |                                            | 2,315,988  |                        |            |          |           |         |           |         |      |          |      |           | 1,745,700  |            |            |         |           |         |           |        |      |     
|                                                                        | Other noninterest-bearing
liabilities |                                       |                                            | 1,309,737  |                        |            |          |           |         |           |         |      |          |      |           | 1,104,913  |            |            |         |           |         |           |        |      |     
|                                                                        |                                       |                                       |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |            |            |         |           |         |           |        |     
|                                                                        |                                       | Total noninterest-bearing
liabilities |                                            |            | 3,625,725              |            |          |           |         |           |         |      |          |      |           |            | 2,850,613  |            |         |           |         |           |        |      |      |     
|                                                                        |                                       |                                       |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |            |            |         |           |         |           |        |     
|                                                                        |                                       |                                       | Total liabilities                          |            |                        | 40,345,115 |          |           |         |           |         |      |          |      |           |            |            | 35,541,707 |         |           |         |           |        |      |      |      | 
|Shareholders equity                                                    |                                       |                                       | 3,228,517                                  |            |                        |            |          |           |         |           |         |      |          |      | 2,957,485 |            |            |            |         |           |         |           |        |     
|                                                                        |                                       |                                       |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |            |            |         |           |         |           |        |     
|                                                                        |                                       |                                       | Total liabilities and
shareholders equity |            | $                      | 43,573,632 |          |           |         |           |         |      |          |      |           |            | $          | 38,499,192 |         |           |         |           |        |      |      |      | 
|                                                                        |                                       |                                       |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |            |            |         |           |         |           |        |     
|Net interest income                                                     |                                       |                                       |                                            |            |                        | $          | 879,730  |           |         |           |         |      |          |      |           |            |            | $          | 871,231 |           |         |           |        |     
|                                                                        |                                       |                                       |                                            |            |                        |            |          |           |         |           |         |      |          |      |           |            |            |            |         |           |         |           |        |     
|Interest rate spread                                                    |                                       |                                       |                                            |            |                        |            |          |           |         |           | 2.62    |      |          |      |           |            |            |            |         |           |         |           | 2.92   |     
|Net yield on average interest-
earning assets                           |                                       |                                       |                                            |            |                        |            |          |           |         |           | 2.88    |      |          |      |           |            |            |            |         |           |         |           | 3.24   |     
|Average interest-earning assets to
average interest-bearing liabilities |                                       |                                       |                                            |            |                        |            |          |           |         |           | 111.04  | %    |          |      |           |            |            |            |         |           |         |           | 109.80 | %   

10



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Figure 3 shows the approximate relative contribution of changes in average
interest rates and volume to changes in net interest income for the periods
indicated. Changes not attributable solely to volume or rate have been
allocated in proportion to the changes due to volume and rate. Amortization of
net deferred loan costs and automobile dealer reserves included as a reduction
in interest income was $26.9 million and $26.1 million for the three months
ended September 30, 2003 and 2002, respectively, and $83.3 million and $74.2
million for the nine months ended September 30, 2003 and 2002, respectively.

Rate/Volume Analysis(Figure 3)

|                                        |                                             |                              |         |         |         |                                          |         |                                         |        |        |        |                                    |        |         |         |          |          |          |          |        |         |         |        |          |         |          |          |  
|--------------------------------------- | ------------------------------------------- | ---------------------------- | ------- | ------- | ------- | ---------------------------------------- | ------- | --------------------------------------- | ------ | ------ | ------ | ---------------------------------- | ------ | ------- | ------- | -------- | -------- | -------- | -------- | ------ | ------- | ------- | ------ | -------- | ------- | -------- | -------- | -
|                                        |                                             |                              |         |         |         | Three Months Ended
        September 30, |         | Nine Months Ended
        September 30,
|                                        |                                             |                              |         |         |         |                                          |         |                                        
|                                        |                                             |                              |         |         |         | 2003 v. 2002                             |         | 2003 v. 2002                           
|                                        |                                             |                              |         |         |         |                                          |         |                                        
|                                        |                                             |                              |         |         |         | Increase (decrease)
        due to       |         |                                         |        |        |        | Increase (decrease)
        due to |        |         |         |         
|                                        |                                             |                              |         |         |         |                                          |         |                                         |        |        |        |                                    |        |         |         |         
|                                        |                                             |                              |         |         |         | Rate                                     |         | Volume                                  |        | Total  |        | Rate                               |        | Volume  |         | Total   
|                                        |                                             |                              |         |         |         |                                          |         |                                         |        |        |        |                                    |        |         |         |         
|                                        |                                             |                              |         |         |         | (Dollars in thousands)                  
|Interest
          income:              |                                             |                              |         |         |         |                                          |         |                                         |        |        |        |                                    |        |         |         |          |          |          |          |        |         |         |        |         
|                                        | Loans
          and leases                  |                              | $       | (65,820 | )       |                                          | $       | 24,535                                  |        |        | $      | (41,285                            | )      |         | $       | (189,122 | )        |          | $        | 50,268 |         |         | $      | (138,854 | )      
|                                        | Mortgage-backed
          securities:       |                              |         |         |         |                                          |         |                                         |        |        |        |                                    |        |         |         |          |          |          |          |        |         |         |        |          |        
|                                        |                                             | Available
          for sale |         |         | (42,830 | )                                        |         |                                         | 37,426 |        |        |                                    | (5,404 | )       |         |          | (114,553 | )        |          |        | 160,049 |         |        |          | 45,496  |         
|                                        |                                             | Held
          to maturity   |         |         | 624     |                                          |         |                                         | (5,993 | )      |        |                                    | (5,369 | )       |         |          | 1,852    |          |          |        | (19,155 | )       |        |          | (17,303 | )       
|                                        | Investment
          securities:            |                              |         |         |         |                                          |         |                                         |        |        |        |                                    |        |         |         |          |          |          |          |        |         |         |        |          |        
|                                        |                                             | Available
          for sale |         |         | (750    | )                                        |         |                                         | 1,374  |        |        |                                    | 624    |         |         |          | (2,505   | )        |          |        | 3,882   |         |        |          | 1,377   |         
|                                        |                                             | Held
          to maturity   |         |         |        |                                          |         |                                         | (10    | )      |        |                                    | (10    | )       |         |          | 12       |          |          |        | (43     | )       |        |          | (31     | )       
|                                        | Other
          interest-earning assets     |                              |         | 444     |         |                                          |         | (2,642                                  | )      |        |        | (2,198                             | )      |         |         | 826      |          |          |          | (5,173 | )       |         |        | (4,347   | )      
|                                        |                                             |                              |         |         |         |                                          |         |                                         |        |        |        |                                    |        |         |         |          |          |          |          |        |         |         |        |         
|                                        |                                             |                              | Total   |         |         | (108,332                                 | )       |                                         |        | 54,690 |        |                                    |        | (53,642 | )       |          |          | (303,490 | )        |        |         | 189,828 |        |          |         | (113,662 | )       
|                                        |                                             |                              |         |         |         |                                          |         |                                         |        |        |        |                                    |        |         |         |          |          |          |          |        |         |         |        |         
|Interest
          expense:             |                                             |                              |         |         |         |                                          |         |                                         |        |        |        |                                    |        |         |         |          |          |          |          |        |         |         |        |         
|                                        | Checking
          accounts                 |                              |         | (18,144 | )       |                                          |         | (617                                    | )      |        |        | (18,761                            | )      |         |         | (43,166  | )        |          |          | 11,598 |         |         |        | (31,568  | )      
|                                        | Money
          market and savings accounts |                              |         | (22,080 | )       |                                          |         | 1,056                                   |        |        |        | (21,024                            | )      |         |         | (54,156  | )        |          |          | 7,179  |         |         |        | (46,977  | )      
|                                        | Certificates
          of deposit           |                              |         | (12,121 | )       |                                          |         | 6,947                                   |        |        |        | (5,174                             | )      |         |         | (43,225  | )        |          |          | (2,689 | )       |         |        | (45,914  | )      
|                                        | Federal
          Home Loan Bank advances   |                              |         | (15,308 | )       |                                          |         | 12,392                                  |        |        |        | (2,916                             | )      |         |         | (73,784  | )        |          |          | 67,049 |         |         |        | (6,735   | )      
|                                        | Other
          borrowings                  |                              |         | (308    | )       |                                          |         | (450                                    | )      |        |        | (758                               | )      |         |         | (2,693   | )        |          |          | 11,726 |         |         |        | 9,033    |        
|                                        |                                             |                              |         |         |         |                                          |         |                                         |        |        |        |                                    |        |         |         |          |          |          |          |        |         |         |        |         
|                                        |                                             |                              |         | Total   |         |                                          | (67,961 | )                                       |        |        | 19,328 |                                    |        |         | (48,633 | )        |          |          | (217,024 | )      |         |         | 94,863 |          |         |          | (122,161 | )
|                                        |                                             |                              |         |         |         |                                          |         |                                         |        |        |        |                                    |        |         |         |          |          |          |          |        |         |         |        |         
|Change
          in net interest income |                                             | $                            | (40,371 | )       |         | $                                        | 35,362  |                                         |        | $      | (5,009 | )                                  |        | $       | (86,466 | )        |          | $        | 94,965   |        |         | $       | 8,499  |         
|                                        |                                             |                              |         |         |         |                                          |         |                                         |        |        |        |                                    |        |         |         |          |          |          |          |        |         |         |        |         

Net interest income was $285.3 million for the three months ended September 30,
2003, down $5.0 million, or 1.7%, from the third quarter of 2002. Net yield on
average interest-earning assets during the third quarter of 2003 was 2.80%,
down 37 basis points from the third quarter of 2002. The reduction in net
interest income and the net yield resulted from downward pressure on asset
yields in the declining interest rate environment, offset in part by the
benefits obtained from deposit and borrowings repricings in the past year.

Net interest income was $879.7 million for the nine months ended September 30,
2003, up $8.5 million from the comparable period in 2002. The increase in net
interest income was due to the growth in interest-earning assets, as well as
benefits obtained from deposit and borrowings repricings in the past year. Net
yield on average interest-earning assets during the nine months ended September
30, 2003 was 2.88%, down 36 basis points from the comparable period in 2002.
The reduction in the net yield resulted from downward pressure on asset yields
in the declining interest rate environment, offset in part by the benefits
obtained from deposit and borrowings repricings in the past year.

In the present interest rate environment, Charter One expects to limit its
asset growth over the next few quarters. This will be accomplished through
efforts to reduce Charter Ones combined one-to-four family and mortgage-backed
securities portfolios, offset by an expected increase in non one-to-four family
loans. As a result of this strategy and assuming no additional reductions in
core deposit repricings, net interest income could experience further pressure
in the near term.

Provision for Loan and Lease Losses

The provision for loan and lease losses for the three months ended September
30, 2003 was $37.7 million, a decrease of $10.0 million from the three months
ended September 30, 2002. The ratio of the allowance for loan and lease losses
to total loans and leases before the allowance increased to 1.37% at September
30, 2003 from 1.24% at December 31, 2002 and 1.13% at September 30, 2002. The
provision for loan and lease losses for the nine months

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ended September 30, 2003 was $134.5 million, an increase of $2.8 million from
the comparable period in 2002. The increased provision year over year was
necessary to cover higher charge-offs and maintain the allowance for loan and
lease losses at a level considered adequate to absorb losses inherent in the
loan and lease portfolio. Additionally, the provision for loan and lease
losses was increased to reflect the continued weakening in the national economy
in the first nine months of 2003, specifically in the airline industry.

As part of the Banks conversion in May 2002 to a national bank subject to
regulation by the Office of the Comptroller of the Currency (OCC), the
Company conformed various policies and reporting practices associated with
asset quality to more closely compare to those of its commercial bank peers.
These changes neither increased nor decreased ultimate net loan and lease
charge-offs. They only affected the timing of recognizing net consumer asset
charge-offs through the allowance for loan and lease losses and the disclosure
of underperforming consumer assets. Consumer assets include single-family,
retail consumer, automobile and consumer finance loan portfolios. These changes
had no impact on Charter Ones non-consumer loan portfolios, which include
commercial real estate and corporate loans and its lease portfolio, as these
portfolios already conformed with OCC-regulated banking practices.

The most significant effect of the change in charge-off policy was in the
automobile and consumer finance portfolios. Prior to the second quarter of
2002, automobile loans were charged off at the point of repossessed collateral
disposition. Beginning with the second quarter of 2002, consistent with
OCC-regulated banking practices, automobile loans going through repossession or
bankruptcies were written down to the net realizable value of the collateral at
the time of the repossession or bankruptcy discharge. Any automobile loan that
reached the 120-day delinquency point was charged off completely. Charge-offs
in the consumer finance portfolio were previously recognized at the point of
foreclosure. Beginning with the second quarter of 2002, consistent with
OCC-regulated banking practices, consumer finance loans, along with other loans
backed by single-family residential real estate collateral, were reflected at
the lower of cost or net realizable value at the earliest point of six payments
past due or foreclosure. These policy changes resulted in an additional $27.3
million of charge-offs recognized during the second quarter of 2002.

Excluding the charge-offs associated with the 2002 policy change discussed
above, net charge-offs totaled $24.7 million and $78.1 million in the three and
nine months ended September 30, 2003, respectively, compared to $22.1 million
and $70.2 million in the three and nine months ended September 30, 2002,
respectively. The $78.1 million of net charge-offs for 2003 included a $6.1
million charge-off related to the resolution of a $19.6 million airline lease
in the first quarter of 2003, as well as a $2.1 million charge-off on an
airline lease in the second quarter of 2003.

The Companys aircraft leasing portfolio totaled $357.5 million at September
30, 2003, or 1.26% of its total loans and leases. The aircraft leasing
portfolio includes $257.4 million to domestic air carriers, with the remainder
on corporate jets and cargo planes leased to corporations. The Company has no
direct exposure to US Air, United Airlines, American Airlines or Air Canada.

See Financial Condition  Asset Quality for further information regarding our
allowance for loan and lease losses.

Other Income

Other income for the three months ended September 30, 2003 was $180.4 million,
an increase of $41.3 million, or 29.7%, over the $139.1 million for the three
months ended September 30, 2002. The increase was primarily attributable to
income from retail banking and mortgage banking. Retail banking income
increased $10.0 million, or 11.9%, over the comparable period in 2002. The
biggest driver of the increase was deposit-related revenue, which totaled $82.7
million in the third quarter of 2003, up 14.4% over the year ago quarter.
Deposit-related revenue reflected the benefits of our strategy to emphasize
noninterest-bearing checking account growth. Offsetting the benefits of this
strategy was the impact of reduced revenue from debit card transactions that
resulted from the April 27, 2003 MasterCard International, Inc. settlement of a
class action lawsuit with Wal-Mart Stores, Inc. and other retailers. The
settlement, which went into effect August 1, 2003, reduced third quarter
revenue by approximately $2.3 million. Without that reduction, third quarter
2003 depositrelated revenue would have been up 17.5% over the third quarter of
2002. The other components of retail banking revenue include fees from retail
brokerage activities ($7.6 million, down 10.7% from the year ago quarter) and
other revenue related to retail operations ($3.9 million, up 15.8% from the
year ago quarter).

With respect to retail franchise development activities, we are planning
aggressive de novo expansion during 2003 and 2004. The 2003 goal is to open
approximately 125 new banking centers, with 99 in-store and 26 traditional
locations. We expect additional expansion during 2004. During the third
quarter of 2003, we opened 44 new banking centers, for a total of 92 new
banking centers since December 31, 2002 (excluding 13 banking centers added in
the July 2003 acquisition of Advance Bancorp).

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Mortgage banking income totaled $65.6 million for the three months ended
September 30, 2003, an increase of $102.6 million over the $37.0 million loss
recorded for the three months ended September 30, 2002. Due to slower
projected prepayment speeds in our loan servicing portfolio, we recorded a
$50.3 million decrease in the valuation allowance on mortgage servicing assets
in the third quarter of 2003, resulting in an ending valuation allowance of
$82.7 million. Total mortgage banking income, excluding the $50.3 million
decrease in the valuation allowance, was $15.4 million in the third quarter of
2003. In the year ago quarter, mortgage banking income totaled $19.0 million,
excluding a $56.0 million increase in the valuation allowance. The portfolio
of loans serviced for others totaled $16.7 billion at September 30, 2003, and
carried a weighted average coupon of 6.24%. The portfolio decreased slightly
from the third quarter of 2002 reflecting prepayments and the lack of
securitization activity during the third quarter of 2003. The related mortgage
servicing assets were 1.01% of the portfolio, or $168.7 million, at September
30, 2003. With an average servicing spread of 35 basis points, that translates
into a servicing asset valuation of 2.9 times the servicing spread.

Net gains totaled $16.1 million for the third quarter of 2003, a decrease of
$67.8 million from the $83.9 million of net gains for the third quarter of
2002. Net gains for the third quarter of 2003 included $28.0 million of net
gains from the sale of $2.4 billion of mortgage-backed securities, as well as
$4.7 million in gains on interest-rate exchange agreements that do not qualify
for hedge accounting under SFAS No. 133. Offsetting the gains was a loss of
$18.0 million from the termination of a $250.0 million FHLB advance (with a
weighted average cost of 4.99%) scheduled to mature in 2006. Net gains for the
third quarter of 2002 included $107.8 million of net gains from the sale of
$4.5 billion of mortgage-backed securities, offset by a $22.1 million
unrealized loss on interest rate swaps that are accounted for at fair value
under SFAS No. 133. The $22.1 million unrealized loss was the result of the
decline in interest rates during the third quarter of 2002. We did not utilize
any special-purpose entities for the sale of any of our mortgage-backed
securities.

Leasing operations reflected a loss of $4.1 million in the third quarter of
2003, compared to income of $404,000 for the third quarter of 2002. The
decline in income resulted from $5.5 million in residual adjustments on
miscellaneous equipment, none of which was related to the aircraft industry.

Other income for the nine months ended September 30, 2003 was $520.2 million,
an increase of $124.8 million, or 31.6%, over the $395.4 million for the nine
months ended September 30, 2002. Retail banking income increased $33.9 million,
or 14.0%, for the nine months ended September 30, 2003. The reasons for this
increase were substantially the same as for the third quarter results discussed
in the above paragraphs. Net gains totaled $201.3 million for the nine months
ended September 30, 2003, an increase of $57.9 million over the comparable 2002
period. Net gains for the nine months ended September 30, 2003 included $211.4
million in net gains from the sale of $8.1 billion in mortgage-backed
securities, as well as $7.0 million in gains on interest-rate exchange
agreements that do not qualify for hedge accounting under SFAS No. 133.
Offsetting the gains was a loss of $18.0 million from the termination of a
$250.0 million FHLB advance (with a weighted average cost of 4.99%) scheduled
to mature in 2006. We did not utilize any special-purpose entities for the sale
of any of our mortgage-backed securities.

Mortgage banking income totaled $41.7 million for the nine months ended
September 30, 2003, compared to a loss of $16.5 million for the nine months
ended September 30, 2002. Due to slower projected prepayments in our loan
servicing portfolio, we recorded a net $20.1 million decrease in the valuation
allowance on mortgage servicing assets during the nine months ended September
30, 2003. However, a permanent impairment charge of $37.2 million was recorded
during the second quarter of 2003.

Leasing operations reflected a loss of $23.2 million for the nine months ended
September 30, 2003, compared to income of $991,000 for the nine months ended
September 30, 2002. The decline in income resulted from $21.5 million in
residual adjustments, which were primarily related to the Companys aircraft
leasing portfolio and $5.5 million in residual adjustments on miscellaneous
equipment, none of which was related to the aircraft industry.

Administrative Expenses

Administrative expenses were $194.8 million for the three months ended
September 30, 2003, an increase of $23.5 million, or 13.7%, from the third
quarter of 2002. The increase in administrative expenses was primarily
attributable to increased compensation and marketing costs associated with the
Companys significant retail expansion program discussed in Other Income
above. Our efficiency ratio was 41.84% for the three months ended September
30, 2003, compared to 39.90% for the three months ended September 30, 2002.

Administrative expenses were $572.9 million for the nine months ended September
30, 2003, an increase of $70.8 million, or 14.1%, from the 2002 period. The
increase in administrative expenses was substantially the same as for the third
quarter results discussed in the above paragraph. Our efficiency ratio was
40.92% for the nine months ended September 30, 2003, compared to 39.64% for the
nine months ended September 30, 2002.

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Federal Income Tax

Federal income tax expense for the three months ended September 30, 2003 was
$74.0 million, compared to $66.8 million for the same period in 2002. The
primary reason for this increase in the provision for federal income taxes was
an increase in pre-tax income. The effective tax rate was 31.7% for both the
2003 and 2002 periods.

Federal income tax expense for the nine months ended September 30, 2003 was
$219.9 million, compared to $200.9 million for the same period in 2002. The
primary reason for this increase in the provision for federal income taxes was
an increase in pre-tax income. The effective tax rate was 31.7% for both the
2003 and 2002 periods.

FINANCIAL CONDITION

At September 30, 2003, total assets were $43.3 billion, compared to total
assets of $41.9 billion at December 31, 2002. As illustrated in Figure 5
below, loan and lease originations totaled a record $20.0 billion in the nine
months ended September 30, 2003, compared to $14.7 billion in the nine months
ended September 30, 2002. Non one-to-four family loan originations totaled $9.3
billion, or 46.4% of the total. The non one-to-four family activity was led by
$3.7 billion in consumer loans and $2.9 billion in auto finance loans.

As discussed in Results of Operations  Net Interest Income, we intend to
limit balance sheet growth in the current interest rate environment by reducing
our one-to-four family exposure. This strategy will likely constrain the
growth in net interest income for the near term. At September 30, 2003, we had
committed to sell $1.6 billion in mortgage-backed securities for a pre-tax gain
of $41.7 million to be recognized in the fourth quarter of 2003.

Loans and Leases

Composition of Loans and Leases(Figure 4)

|                                       |                                                             |                   |                 |                          |           |                        |            |            |           |           |            | 
|-------------------------------------- | ----------------------------------------------------------- | ----------------- | --------------- | ------------------------ | --------- | ---------------------- | ---------- | ---------- | --------- | --------- | ---------- | 
|                                       |                                                             |                   |                 |                          |           | 9/30/03                |            | 12/31/02  
|                                       |                                                             |                   |                 |                          |           |                        |            |           
|                                       |                                                             |                   |                 |                          |           | (Dollars in thousands)
|                                       | One-to-four family:                                         |                   |                 |                          |           |                        |            |            |          
|                                       |                                                             | Permanent:        |                 |                          |           |                        |            |            |           |          
|                                       |                                                             |                   | Fixed rate      |                          | $         | 6,737,463              |            |            | $         | 5,869,554 |           
|                                       |                                                             |                   | Adjustable rate |                          |           | 2,600,507              |            |            |           | 2,437,166 |           
|                                       |                                                             | Construction      |                 |                          | 451,093   |                        |            |            | 427,729   |          
|                                       |                                                             |                   |                 |                          |           |                        |            |           
|                                       |                                                             |                   | 9,789,063       |                          |           |                        | 8,734,449  |           
|                                       |                                                             |                   |                 |                          |           |                        |            |           
|                                       | Commercial real estate:                                     |                   |                 |                          |           |                        |            |            |          
|                                       |                                                             | Multifamily       |                 |                          | 752,006   |                        |            |            | 730,263   |          
|                                       |                                                             | Commercial        |                 |                          | 1,181,362 |                        |            |            | 1,024,840 |          
|                                       |                                                             | Construction      |                 |                          | 528,628   |                        |            |            | 506,178   |          
|                                       |                                                             |                   |                 |                          |           |                        |            |           
|                                       |                                                             |                   | 2,461,996       |                          |           |                        | 2,261,281  |           
|                                       |                                                             |                   |                 |                          |           |                        |            |           
|                                       | Consumer:                                                   |                   |                 |                          |           |                        |            |            |          
|                                       |                                                             | Retail            |                 |                          | 4,999,488 |                        |            |            | 5,494,453 |          
|                                       |                                                             | Automobile        |                 |                          | 6,376,830 |                        |            |            | 5,606,329 |          
|                                       |                                                             | Consumer finance  |                 |                          | 1,073,054 |                        |            |            | 984,772   |          
|                                       |                                                             |                   |                 |                          |           |                        |            |           
|                                       |                                                             |                   | 12,449,372      |                          |           |                        | 12,085,554 |           
|                                       |                                                             |                   |                 |                          |           |                        |            |           
|                                       | Business:                                                   |                   |                 |                          |           |                        |            |            |          
|                                       |                                                             | Leasing           |                 |                          | 2,166,350 |                        |            |            | 2,133,468 |          
|                                       |                                                             | Corporate banking |                 |                          | 1,553,739 |                        |            |            | 1,318,003 |          
|                                       |                                                             |                   |                 |                          |           |                        |            |           
|                                       |                                                             |                   | 3,720,089       |                          |           |                        | 3,451,471  |           
|                                       |                                                             |                   |                 |                          |           |                        |            |           
|                                       | Loans and leases before allowance for loan and lease losses |                   |                 | 28,420,520               |           |                        |            | 26,532,755 |          
|                                       | Allowance for loan and lease losses                         |                   |                 | (389,355                 | )         |                        |            | (328,017   | )        
|                                       |                                                             |                   |                 |                          |           |                        |            |           
|                                       |                                                             |                   |                 | Loans and leases, net(1) |           | $                      | 28,031,165 |            |           | $         | 26,204,738 | 
|                                       |                                                             |                   |                 |                          |           |                        |            |           
|Portfolio of loans serviced for others |                                                             | $                 | 16,700,490      |                          |           | $                      | 16,893,609 |           
|                                       |                                                             |                   |                 |                          |           |                        |            |           



---

|(1) |  | Includes loans held for sale.
|--- |  | -----------------------------

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##### Table of Contents



Loan and Lease Activity(Figure 5)

|                                                               |                                                          |                              |                                             |                                                |           |                        |           |                   |           |           |           |           |            |            |            |           |           |            |            |  
|-------------------------------------------------------------- | -------------------------------------------------------- | ---------------------------- | ------------------------------------------- | ---------------------------------------------- | --------- | ---------------------- | --------- | ----------------- | --------- | --------- | --------- | --------- | ---------- | ---------- | ---------- | --------- | --------- | ---------- | ---------- | -
|                                                               |                                                          |                              |                                             |                                                |           | Three Months Ended     |           | Nine Months Ended
|                                                               |                                                          |                              |                                             |                                                |           |                        |           |                  
|                                                               |                                                          |                              |                                             |                                                |           | 9/30/03                |           | 9/30/02           |           | 9/30/03   |           | 9/30/02  
|                                                               |                                                          |                              |                                             |                                                |           |                        |           |                   |           |           |           |          
|                                                               |                                                          |                              |                                             |                                                |           | (Dollars in thousands)
|Originations:                                                  |                                                          |                              |                                             |                                                |           |                        |           |                   |           |           |           |           |            |            |            |          
|Real
          estate:                                         |                                                          |                              |                                             |                                                |           |                        |           |                   |           |           |           |           |            |            |            |          
|                                                               | Permanent:                                               |                              |                                             |                                                |           |                        |           |                   |           |           |           |           |            |            |            |           |          
|                                                               |                                                          | One-to-four
          family |                                             | $                                              | 3,896,869 |                        |           | $                 | 2,481,022 |           |           | $         | 10,548,555 |            |            | $         | 7,113,855 |           
|                                                               |                                                          | Multifamily                  |                                             |                                                | 75,185    |                        |           |                   | 49,187    |           |           |           | 184,076    |            |            |           | 108,885   |           
|                                                               |                                                          | Commercial                   |                                             |                                                | 124,806   |                        |           |                   | 48,601    |           |           |           | 275,245    |            |            |           | 175,375   |           
|                                                               |                                                          |                              |                                             |                                                |           |                        |           |                   |           |           |           |           |            |            |            |          
|                                                               |                                                          |                              | Total
          permanent loans             |                                                |           | 4,096,860              |           |                   |           | 2,578,810 |           |           |            | 11,007,876 |            |           |           | 7,398,115  |           
|                                                               |                                                          |                              |                                             |                                                |           |                        |           |                   |           |           |           |           |            |            |            |          
|                                                               | Construction:                                            |                              |                                             |                                                |           |                        |           |                   |           |           |           |           |            |            |            |           |          
|                                                               |                                                          | One-to-four
          family |                                             |                                                | 62,180    |                        |           |                   | 54,377    |           |           |           | 151,273    |            |            |           | 27,720    |           
|                                                               |                                                          | Multifamily                  |                                             |                                                | 30,371    |                        |           |                   | 13,950    |           |           |           | 57,267     |            |            |           | 38,938    |           
|                                                               |                                                          | Commercial                   |                                             |                                                | 16,656    |                        |           |                   | 29,385    |           |           |           | 57,732     |            |            |           | 111,108   |           
|                                                               |                                                          |                              |                                             |                                                |           |                        |           |                   |           |           |           |           |            |            |            |          
|                                                               |                                                          |                              | Total
          construction loans          |                                                |           | 109,207                |           |                   |           | 97,712    |           |           |            | 266,272    |            |           |           | 177,766    |           
|                                                               |                                                          |                              |                                             |                                                |           |                        |           |                   |           |           |           |           |            |            |            |          
|                                                               |                                                          |                              |                                             | Total
          real estate loans originated   |           |                        | 4,206,067 |                   |           |           | 2,676,522 |           |            |            | 11,274,148 |           |           |            | 7,575,881  |  
|                                                               |                                                          |                              |                                             |                                                |           |                        |           |                   |           |           |           |           |            |            |            |          
|Retail
          consumer                                      |                                                          |                              | 1,431,291                                   |                                                |           |                        | 948,632   |                   |           |           | 3,719,802 |           |            |            | 2,885,687  |          
|Automobile                                                     |                                                          |                              | 909,477                                     |                                                |           |                        | 1,012,926 |                   |           |           | 2,916,836 |           |            |            | 2,478,734  |          
|Consumer
          finance                                     |                                                          |                              | 128,536                                     |                                                |           |                        | 73,931    |                   |           |           | 353,302   |           |            |            | 185,352    |          
|Leases                                                         |                                                          |                              | 152,279                                     |                                                |           |                        | 110,428   |                   |           |           | 327,796   |           |            |            | 321,013    |          
|Corporate
          banking                                    |                                                          |                              | 443,732                                     |                                                |           |                        | 512,600   |                   |           |           | 1,365,735 |           |            |            | 1,265,413  |          
|                                                               |                                                          |                              |                                             |                                                |           |                        |           |                   |           |           |           |           |            |            |            |          
|                                                               |                                                          |                              | Total
          loans and leases originated |                                                |           | 7,271,382              |           |                   |           | 5,335,039 |           |           |            | 19,957,619 |            |           |           | 14,712,080 |           
|                                                               |                                                          |                              |                                             |                                                |           |                        |           |                   |           |           |           |           |            |            |            |          
|Acquired
          through business combinations and purchases |                                                          |                              | 2,737                                       |                                                |           |                        | 2,637     |                   |           |           | 409,826   |           |            |            | 213,992    |          
|                                                               |                                                          |                              |                                             |                                                |           |                        |           |                   |           |           |           |           |            |            |            |          
|Sales
          and principal reductions:                      |                                                          |                              |                                             |                                                |           |                        |           |                   |           |           |           |           |            |            |            |          
|                                                               | Loans
          sold                                     |                              |                                             | 1,067,083                                      |           |                        |           | 527,011           |           |           |           | 2,715,313 |            |            |            | 1,652,269 |          
|                                                               | Loans
          exchanged for mortgage backed securities |                              |                                             | 225,498                                        |           |                        |           | 809,167           |           |           |           | 5,991,223 |            |            |            | 5,066,120 |          
|                                                               | Principal
          reductions                           |                              |                                             | 3,447,925                                      |           |                        |           | 2,943,422         |           |           |           | 9,733,849 |            |            |            | 8,262,966 |          
|                                                               |                                                          |                              |                                             |                                                |           |                        |           |                   |           |           |           |           |            |            |            |          
|                                                               |                                                          |                              |                                             | Total
          sales and principal reductions |           |                        | 4,740,506 |                   |           |           | 4,279,600 |           |            |            | 18,440,385 |           |           |            | 14,981,355 |  
|                                                               |                                                          |                              |                                             |                                                |           |                        |           |                   |           |           |           |           |            |            |            |          
|                                                               |                                                          |                              |                                             | Increase
          (decrease) before net items |           | $                      | 2,533,613 |                   |           | $         | 1,058,076 |           |            | $          | 1,927,060  |           |           | $          | (55,283    | )
|                                                               |                                                          |                              |                                             |                                                |           |                        |           |                   |           |           |           |           |            |            |            |          

Investment and Mortgage-Backed Securities

Figures 6 and 7 summarize our investment and mortgage-backed securities
portfolios at September 30, 2003 and December 31, 2002. The amounts reflected
represent the fair value of securities available for sale and the amortized
cost of securities held to maturity.

Investment Securities(Figure 6)

|                   |                                                      |                                                |       |         |                        |         |          |         |         |         | 
|------------------ | ---------------------------------------------------- | ---------------------------------------------- | ----- | ------- | ---------------------- | ------- | -------- | ------- | ------- | ------- | 
|                   |                                                      |                                                |       |         | 9/30/03                |         | 12/31/02
|                   |                                                      |                                                |       |         |                        |         |         
|                   |                                                      |                                                |       |         | (Dollars in thousands)
|Available for Sale |                                                      |                                                |       |         |                        |         |          |        
|                   | U.S. Treasury and agency securities                  |                                                | $     | 97,934  |                        |         | $        | 91,462  |        
|                   | Securities of U.S. states and political subdivisions |                                                |       | 40,323  |                        |         |          | 1,898   |        
|                   | Corporate and other securities                       |                                                |       | 132,254 |                        |         |          | 116,735 |        
|                   |                                                      |                                                |       |         |                        |         |          |        
|                   |                                                      | Total investment securities available for sale |       |         | 270,511                |         |          |         | 210,095 |        
|                   |                                                      |                                                |       |         |                        |         |          |        
|Held to Maturity   |                                                      |                                                |       |         |                        |         |          |        
|                   | U.S. Treasury and agency securities                  |                                                |       | 262     |                        |         |          |        |        
|                   | Securities of U.S. states and political subdivisions |                                                |       | 3,660   |                        |         |          | 3,943   |        
|                   | Corporate and other securities                       |                                                |       | 30      |                        |         |          | 30      |        
|                   |                                                      |                                                |       |         |                        |         |          |        
|                   |                                                      | Total investment securities held to maturity   |       |         | 3,952                  |         |          |         | 3,973   |        
|                   |                                                      |                                                |       |         |                        |         |          |        
|                   |                                                      |                                                | Total |         | $                      | 274,463 |          |         | $       | 214,068 | 
|                   |                                                      |                                                |       |         |                        |         |          |        
|                   | Weighted average rate                                |                                                |       | 5.40    | %                      |         |          | 5.64    | %      
|                   |                                                      |                                                |       |         |                        |         |          |        

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##### Table of Contents



Mortgage-Backed Securities(Figure 7)

|                   |                                      |                                   |                                                     |       |            |                        |            |          |            |            |            | 
|------------------ | ------------------------------------ | --------------------------------- | --------------------------------------------------- | ----- | ---------- | ---------------------- | ---------- | -------- | ---------- | ---------- | ---------- | 
|                   |                                      |                                   |                                                     |       |            | 9/30/03                |            | 12/31/02
|                   |                                      |                                   |                                                     |       |            |                        |            |         
|                   |                                      |                                   |                                                     |       |            | (Dollars in thousands)
|Available for Sale |                                      |                                   |                                                     |       |            |                        |            |         
|                   | Participation certificates:          |                                   |                                                     |       |            |                        |            |          |           
|                   |                                      | U.S. government and agency issues |                                                     | $     | 10,317,012 |                        |            | $        | 10,051,046 |           
|                   | Collateralized mortgage obligations: |                                   |                                                     |       |            |                        |            |          |           
|                   |                                      | U.S. government and agency issues |                                                     |       | 657,857    |                        |            |          | 1,068,518  |           
|                   |                                      | Private issues                    |                                                     |       | 103,416    |                        |            |          | 417,044    |           
|                   |                                      |                                   |                                                     |       |            |                        |            |         
|                   |                                      |                                   | Total mortgage-backed securities available for sale |       |            | 11,078,285             |            |          |            | 11,536,608 |           
|                   |                                      |                                   |                                                     |       |            |                        |            |         
|Held to Maturity   |                                      |                                   |                                                     |       |            |                        |            |         
|                   | Participation certificates:          |                                   |                                                     |       |            |                        |            |          |           
|                   |                                      | U.S. government and agency issues |                                                     |       | 211,148    |                        |            |          | 311,398    |           
|                   |                                      | Private issues                    |                                                     |       | 26,151     |                        |            |          | 51,717     |           
|                   | Collateralized mortgage obligations: |                                   |                                                     |       |            |                        |            |          |           
|                   |                                      | U.S. government and agency issues |                                                     |       | 33,016     |                        |            |          | 96,130     |           
|                   |                                      | Private issues                    |                                                     |       | 22,021     |                        |            |          | 81,536     |           
|                   |                                      |                                   |                                                     |       |            |                        |            |         
|                   |                                      |                                   | Total mortgage-backed securities held to maturity   |       |            | 292,336                |            |          |            | 540,781    |           
|                   |                                      |                                   |                                                     |       |            |                        |            |         
|                   |                                      |                                   |                                                     | Total |            | $                      | 11,370,621 |          |            | $          | 12,077,389 | 
|                   |                                      |                                   |                                                     |       |            |                        |            |         
|                   |                                      | Weighted average rate             |                                                     |       | 4.67       | %                      |            |          | 4.95       | %         
|                   |                                      |                                   |                                                     |       |            |                        |            |         

Asset Quality

Charter One has a Reserve Adequacy Committee that sets target levels for the
allowance for loan and lease losses. The Committee meets quarterly and its
membership includes management as well as Directors. That Committee considers
several factors as it sets target levels of reserves that are deemed adequate
to absorb losses inherent in the loan and lease portfolio. Those factors
include internal measurements of asset quality (such as charge-off trends,
delinquency data, asset classification trends, and nonperforming and
underperforming loan trends), the overall economic environment in which Charter
One operates, and the size and mix of the loan and lease portfolio. All
outstanding loans and leases are considered when evaluating the adequacy of the
allowance for loan and lease losses. These various factors are utilized to
calculate a range of reserves. Based upon the range calculated, the Committee
then sets target levels for reserves. See also Provision for Loan and Lease
Losses for further discussion.

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Analysis of the Allowance for Loan and Lease Losses(Figure 8)

|                                     |                                                          |                        |                   |                                |         |                        |         |                   |         |         |         |         |         |         |         |         |         |          |         |  
|------------------------------------ | -------------------------------------------------------- | ---------------------- | ----------------- | ------------------------------ | ------- | ---------------------- | ------- | ----------------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | -------- | ------- | -
|                                     |                                                          |                        |                   |                                |         | Three Months Ended     |         | Nine Months Ended
|                                     |                                                          |                        |                   |                                |         |                        |         |                  
|                                     |                                                          |                        |                   |                                |         | 9/30/03                |         | 9/30/02           |         | 9/30/03 |         | 9/30/02
|                                     |                                                          |                        |                   |                                |         |                        |         |                   |         |         |         |        
|                                     |                                                          |                        |                   |                                |         | (Dollars in thousands)
|Allowance for loan and lease losses: |                                                          |                        |                   |                                |         |                        |         |                   |         |         |         |         |         |         |         |        
|                                     | Balance, beginning of period                             |                        | $                 | 376,393                        |         |                        | $       | 267,155           |         |         | $       | 328,017 |         |         | $       | 255,478 |        
|                                     | Provision for loan and lease losses                      |                        |                   | 37,663                         |         |                        |         | 47,695            |         |         |         | 134,494 |         |         |         | 131,689 |        
|                                     | Acquired through business combination                    |                        |                   |                               |         |                        |         |                  |         |         |         | 4,969   |         |         |         | 3,184   |        
|                                     | Loans and leases charged off:                            |                        |                   |                                |         |                        |         |                   |         |         |         |         |         |         |         |         |        
|                                     |                                                          | One-to-four family     |                   |                                | (655    | )                      |         |                   | (643    | )       |         |         | (2,361  | )       |         |         | (4,675  | )       
|                                     |                                                          | Commercial real estate |                   |                                | (474    | )                      |         |                   | (290    | )       |         |         | (1,227  | )       |         |         | (1,208  | )       
|                                     |                                                          | Retail consumer        |                   |                                | (2,819  | )                      |         |                   | (2,308  | )       |         |         | (8,893  | )       |         |         | (10,096 | )       
|                                     |                                                          | Automobile             |                   |                                | (15,869 | )                      |         |                   | (16,429 | )       |         |         | (45,947 | )       |         |         | (63,024 | )       
|                                     |                                                          | Consumer finance       |                   |                                | (4,396  | )                      |         |                   | (5,160  | )       |         |         | (12,908 | )       |         |         | (20,610 | )       
|                                     |                                                          | Leases                 |                   |                                |        |                        |         |                   | (519    | )       |         |         | (8,156  | )       |         |         | (2,780  | )       
|                                     |                                                          | Corporate banking      |                   |                                | (6,610  | )                      |         |                   | (4,776  | )       |         |         | (16,507 | )       |         |         | (10,813 | )       
|                                     |                                                          |                        |                   |                                |         |                        |         |                   |         |         |         |         |         |         |         |        
|                                     |                                                          |                        | Total charge-offs |                                |         | (30,823                | )       |                   |         | (30,125 | )       |         |         | (95,999 | )       |         |         | (113,206 | )      
|                                     |                                                          |                        |                   |                                |         |                        |         |                   |         |         |         |         |         |         |         |        
|                                     | Recoveries:                                              |                        |                   |                                |         |                        |         |                   |         |         |         |         |         |         |         |         |        
|                                     |                                                          | One-to-four family     |                   |                                | 31      |                        |         |                   | 881     |         |         |         | 89      |         |         |         | 915     |         
|                                     |                                                          | Commercial real estate |                   |                                | 68      |                        |         |                   | 488     |         |         |         | 277     |         |         |         | 618     |         
|                                     |                                                          | Retail consumer        |                   |                                | 1,044   |                        |         |                   | 484     |         |         |         | 2,025   |         |         |         | 1,246   |         
|                                     |                                                          | Automobile             |                   |                                | 4,279   |                        |         |                   | 3,574   |         |         |         | 12,955  |         |         |         | 9,105   |         
|                                     |                                                          | Consumer finance       |                   |                                | 329     |                        |         |                   | 238     |         |         |         | 669     |         |         |         | 333     |         
|                                     |                                                          | Leases                 |                   |                                | 228     |                        |         |                   | 430     |         |         |         | 1,227   |         |         |         | 430     |         
|                                     |                                                          | Corporate banking      |                   |                                | 143     |                        |         |                   | 1,980   |         |         |         | 632     |         |         |         | 3,008   |         
|                                     |                                                          |                        |                   |                                |         |                        |         |                   |         |         |         |         |         |         |         |        
|                                     |                                                          |                        | Total recoveries  |                                |         | 6,122                  |         |                   |         | 8,075   |         |         |         | 17,874  |         |         |         | 15,655   |        
|                                     |                                                          |                        |                   |                                |         |                        |         |                   |         |         |         |         |         |         |         |        
|                                     |                                                          |                        |                   | Net loan and lease charge-offs |         |                        | (24,701 | )                 |         |         | (22,050 | )       |         |         | (78,125 | )       |         |          | (97,551 | )
|                                     |                                                          |                        |                   |                                |         |                        |         |                   |         |         |         |         |         |         |         |        
|                                     | Balance, end of period                                   |                        | $                 | 389,355                        |         |                        | $       | 292,800           |         |         | $       | 389,355 |         |         | $       | 292,800 |        
|                                     |                                                          |                        |                   |                                |         |                        |         |                   |         |         |         |         |         |         |         |        
|                                     | Net charge-offs to average loans and leases
(annualized) |                        |                   | .37                            | %       |                        |         | .35               | %       |         |         | .40     | %       |         |         | .51     | %      

---

Figure 9 sets forth information concerning nonperforming and underperforming
assets for the periods reported. Underperforming assets consist of (1)
nonperforming assets (nonaccrual loans and leases, restructured real estate
mortgage loans, and real estate acquired through foreclosure and other
collateral owned) and (2) accruing loans and leases delinquent more than 90
days.

17



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Nonperforming and Underperforming Assets(Figure 9)

|                                                                  |                                                                                                    |                                                   |                                                                        |                                                |        |                        |         |          |        |        |         | 
|----------------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | ------------------------------------------------- | ---------------------------------------------------------------------- | ---------------------------------------------- | ------ | ---------------------- | ------- | -------- | ------ | ------ | ------- | 
|                                                                  |                                                                                                    |                                                   |                                                                        |                                                |        | 9/30/03                |         | 12/31/02
|                                                                  |                                                                                                    |                                                   |                                                                        |                                                |        |                        |         |         
|                                                                  |                                                                                                    |                                                   |                                                                        |                                                |        | (Dollars in thousands)
|Nonperforming
          assets:                                   |                                                                                                    |                                                   |                                                                        |                                                |        |                        |         |         
|                                                                  | Nonaccrual
          loans and leases:                                                             |                                                   |                                                                        |                                                |        |                        |         |          |       
|                                                                  |                                                                                                    | Real
          estate mortgage loans:             |                                                                        |                                                |        |                        |         |          |        |       
|                                                                  |                                                                                                    |                                                   | One-to-four
          family                                           |                                                | $      | 22,784                 |         |          | $      | 27,904 |        
|                                                                  |                                                                                                    |                                                   | Multifamily
          and commercial                                   |                                                |        | 11,333                 |         |          |        | 5,369  |        
|                                                                  |                                                                                                    |                                                   | Construction
          and land                                        |                                                |        | 22,974                 |         |          |        | 9,885  |        
|                                                                  |                                                                                                    |                                                   |                                                                        |                                                |        |                        |         |         
|                                                                  |                                                                                                    |                                                   |                                                                        | Total
          real estate mortgage loans     |        |                        | 57,091  |          |        |        | 43,158  | 
|                                                                  |                                                                                                    | Retail
          consumer                         |                                                                        |                                                | 10,405 |                        |         |          | 13,937 |       
|                                                                  |                                                                                                    | Automobile                                        |                                                                        |                                                |       |                        |         |          |       |       
|                                                                  |                                                                                                    | Consumer
          finance                        |                                                                        |                                                | 42,589 |                        |         |          | 40,227 |       
|                                                                  |                                                                                                    | Leases                                            |                                                                        |                                                | 6,569  |                        |         |          | 6,211  |       
|                                                                  |                                                                                                    | Corporate
          banking                       |                                                                        |                                                | 25,078 |                        |         |          | 39,098 |       
|                                                                  |                                                                                                    |                                                   |                                                                        |                                                |        |                        |         |         
|                                                                  |                                                                                                    |                                                   |                                                                        | Total
          nonaccrual loans and leases    |        |                        | 141,732 |          |        |        | 142,631 | 
|                                                                  | Restructured
          real estate mortgage loans                                                  |                                                   |                                                                        | 481                                            |        |                        |         | 501      |       
|                                                                  |                                                                                                    |                                                   |                                                                        |                                                |        |                        |         |         
|                                                                  |                                                                                                    |                                                   |                                                                        | Total
          nonperforming loans and leases |        |                        | 142,213 |          |        |        | 143,132 | 
|                                                                  | Real
          estate and other collateral owned                                                   |                                                   |                                                                        | 47,249                                         |        |                        |         | 40,776   |       
|                                                                  |                                                                                                    |                                                   |                                                                        |                                                |        |                        |         |         
|                                                                  |                                                                                                    |                                                   |                                                                        | Total
          nonperforming assets           |        | $                      | 189,462 |          |        | $      | 183,908 | 
|                                                                  |                                                                                                    |                                                   |                                                                        |                                                |        |                        |         |         
|Ratio
          of:                                               |                                                                                                    |                                                   |                                                                        |                                                |        |                        |         |         
|                                                                  | Nonperforming
          loans and leases to total loans and leases                                 |                                                   |                                                                        | .51                                            | %      |                        |         | .55      | %     
|                                                                  | Nonperforming
          assets to total assets                                                     |                                                   |                                                                        | .44                                            |        |                        |         | .44      |       
|                                                                  | Nonperforming
          assets to total loans, leases and real estate and other collateral owned   |                                                   |                                                                        | .67                                            |        |                        |         | .70      |       
|                                                                  | Allowance
          for loan and lease losses to:                                                  |                                                   |                                                                        |                                                |        |                        |         |          |       
|                                                                  |                                                                                                    | Nonperforming
          loans and leases          |                                                                        |                                                | 273.78 |                        |         |          | 229.17 |       
|                                                                  |                                                                                                    | Total
          loans and leases before allowance |                                                                        |                                                | 1.37   |                        |         |          | 1.24   |       
|Accruing
          loans and leases delinquent more than 90 days: |                                                                                                    |                                                   |                                                                        |                                                |        |                        |         |         
|                                                                  | Real
          estate mortgage loans:                                                              |                                                   |                                                                        |                                                |        |                        |         |          |       
|                                                                  |                                                                                                    | One-to-four
          family                      |                                                                        | $                                              | 21,239 |                        |         | $        | 25,643 |       
|                                                                  |                                                                                                    | Multifamily
          and commercial              |                                                                        |                                                |       |                        |         |          |       |       
|                                                                  |                                                                                                    | Construction
          and land                   |                                                                        |                                                |       |                        |         |          |       |       
|                                                                  |                                                                                                    |                                                   |                                                                        |                                                |        |                        |         |         
|                                                                  |                                                                                                    |                                                   | Total
          real estate mortgage loans                             |                                                |        | 21,239                 |         |          |        | 25,643 |        
|                                                                  | Retail
          consumer                                                                          |                                                   |                                                                        | 2,654                                          |        |                        |         | 4,758    |       
|                                                                  | Automobile                                                                                         |                                                   |                                                                        | 2,680                                          |        |                        |         | 3,621    |       
|                                                                  | Consumer
          finance                                                                         |                                                   |                                                                        | 23,298                                         |        |                        |         | 26,739   |       
|                                                                  | Leases                                                                                             |                                                   |                                                                        |                                               |        |                        |         | 19       |       
|                                                                  | Corporate
          banking                                                                        |                                                   |                                                                        | 311                                            |        |                        |         | 1,536    |       
|                                                                  |                                                                                                    |                                                   |                                                                        |                                                |        |                        |         |         
|                                                                  |                                                                                                    |                                                   | Total
          accruing loans and leases delinquent more than 90 days |                                                | $      | 50,182                 |         |          | $      | 62,316 |        
|                                                                  |                                                                                                    |                                                   |                                                                        |                                                |        |                        |         |         
|Total
          underperforming assets                            |                                                                                                    | $                                                 | 239,644                                                                |                                                |        | $                      | 246,224 |         
|                                                                  |                                                                                                    |                                                   |                                                                        |                                                |        |                        |         |         
|Ratio
          of:                                               |                                                                                                    |                                                   |                                                                        |                                                |        |                        |         |         
|                                                                  | Underperforming
          assets to total assets                                                   |                                                   |                                                                        | .55                                            | %      |                        |         | .59      | %     
|                                                                  | Underperforming
          assets to total loans, leases and real estate and other collateral owned |                                                   |                                                                        | .85                                            |        |                        |         | .94      |       

Loans and leases not reflected in the table above, but where known information
about possible credit problems of borrowers causes management to have serious
doubts as to the ability of the borrower to comply with present repayment terms
and that may result in disclosure of such loans and leases as underperforming
assets in the future, are commonly referred to as potential problem loans and
leases. The amount included in potential problem loans and leases results from
an evaluation, on a loan-by-loan basis, of loans and leases classified as
substandard. The amount of potential problem loans and leases was $32.5
million at September 30, 2003, $25.7 million at June 30, 2003, $61.9 million at
March 31, 2003 and $14.8 million at December 31, 2002. The vast majority of our
potential problem loans and leases, as well as our underperforming assets, are
collateralized.

18



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SOURCES OF FUNDS

Deposits

Composition of Deposits(Figure 10)

|                                            |                     |                             |                     |           |                        |            |          |     |          |      |           |           |            |            |          |      |      |      | 
|------------------------------------------- | ------------------- | --------------------------- | ------------------- | --------- | ---------------------- | ---------- | -------- | --- | -------- | ---- | --------- | --------- | ---------- | ---------- | -------- | ---- | ---- | ---- | 
|                                            |                     |                             |                     |           | 9/30/03                |            | 12/31/02
|                                            |                     |                             |                     |           |                        |            |         
|                                            |                     |                             |                     |           |                        |            |          |     | Weighted |      |           |           |            |            | Weighted
|                                            |                     |                             |                     |           |                        |            |          |     | Average  |      |           |           |            |            | Average 
|                                            |                     |                             |                     |           | Amount                 |            | Rate     |     | Amount   |      | Rate     
|                                            |                     |                             |                     |           |                        |            |          |     |          |      |          
|                                            |                     |                             |                     |           | (Dollars in thousands)
|Checking accounts:                          |                     |                             |                     |           |                        |            |          |     |          |      |           |           |            |            |          |     
|                                            | Interest-bearing    |                             | $                   | 5,810,478 |                        |            |          | .93 | %        |      | $         | 7,460,530 |            |            |          | 1.80 | %   
|                                            | Noninterest-bearing |                             |                     | 2,760,848 |                        |            |          |    |          |      |           | 2,189,903 |            |            |          |     |     
|                                            |                     |                             |                     |           |                        |            |          |     |          |      |           |           |            |            |          |     
|                                            |                     | Total checking accounts     |                     |           | 8,571,326              |            |          |     | .63      |      |           |           | 9,650,433  |            |          |      | 1.39 |     
|Money market and savings accounts           |                     |                             | 8,686,491           |           |                        |            | 1.01     |     |          |      | 8,157,534 |           |            |            | 1.51     |     
|                                            |                     |                             |                     |           |                        |            |          |     |          |      |           |           |            |            |          |     
|                                            |                     | Total transactions accounts |                     |           | 17,257,817             |            |          |     | .82      |      |           |           | 17,807,967 |            |          |      | 1.45 |     
|Certificates of deposit                     |                     |                             | 10,788,421          |           |                        |            | 3.13     |     |          |      | 9,719,876 |           |            |            | 3.61     |     
|                                            |                     |                             |                     |           |                        |            |          |     |          |      |           |           |            |            |          |     
|                                            |                     |                             | Total deposits, net |           | $                      | 28,046,238 |          |     |          | 1.71 |           |           | $          | 27,527,843 |          |      |      | 2.21 | 
|                                            |                     |                             |                     |           |                        |            |          |     |          |      |           |           |            |            |          |     
|Including the effect of interest rate swaps |                     |                             |                     |           |                        |            | 1.60     | %   |          |      |           |           |            |            | 2.06     | %   

Investment securities and mortgage-backed securities with a par value of $578.8
million at September 30, 2003 and $489.0 million at December 31, 2002, were
pledged to secure public deposits and for other purposes required or permitted
by law.

Borrowings

At September 30, 2003, borrowings consisted primarily of Federal Home Loan Bank
(FHLB) advances. These positions were secured by our investment in the stock
of the FHLB, as well as $11.4 billion in certain real estate loans and $4.4
billion in mortgage-backed securities.

FHLB Advances(Figure 11)

|                                                      |                                  |                               |           |                        |           |          |      |          |      |      |           |           |           |          |      |      |      | 
|----------------------------------------------------- | -------------------------------- | ----------------------------- | --------- | ---------------------- | --------- | -------- | ---- | -------- | ---- | ---- | --------- | --------- | --------- | -------- | ---- | ---- | ---- | 
|                                                      |                                  |                               |           | 9/30/03                |           | 12/31/02
|                                                      |                                  |                               |           |                        |           |         
|                                                      |                                  |                               |           |                        |           |          |      | Weighted |      |      |           |           |           | Weighted
|                                                      |                                  |                               |           |                        |           |          |      | Average  |      |      |           |           |           | Average 
|                                                      |                                  |                               |           | Amount                 |           | Rate     |      | Amount   |      | Rate
|                                                      |                                  |                               |           |                        |           |          |      |          |      |     
|                                                      |                                  |                               |           | (Dollars in thousands)
|Short-term                                            |                                  | $                             | 1,686,800 |                        |           |          | 1.44 | %        |      | $    | 2,595,000 |           |           |          | 1.34 | %   
|Long-term:                                            |                                  |                               |           |                        |           |          |      |          |      |      |           |           |           |          |      |     
|                                                      | Fixed-rate
          advances    |                               |           | 5,711,606              |           |          |      | 5.67     |      |      |           | 6,024,560 |           |          |      | 5.68 |     
|                                                      | Variable-rate
          advances |                               |           | 2,409,605              |           |          |      | 1.14     |      |      |           | 409,605   |           |          |      | 1.23 |     
|                                                      |                                  |                               |           |                        |           |          |      |          |      |      |           |           |           |          |      |     
|Total
          advances                              |                                  |                               | 9,808,011 |                        |           |          | 3.83 |          |      |      | 9,029,165 |           |           |          | 4.23 |     
|Plus
          unamortized premium on advances        |                                  |                               | 12,173    |                        |           |          |     |          |      |      | 8,760     |           |           |          |     |     
|                                                      |                                  |                               |           |                        |           |          |      |          |      |      |           |           |           |          |      |     
|                                                      |                                  | Total
          advances, net |           | $                      | 9,820,184 |          |      |          | 3.79 |      |           | $         | 9,037,925 |          |      |      | 4.18 | 
|                                                      |                                  |                               |           |                        |           |          |      |          |      |      |           |           |           |          |      |     
|Including
          the effect of interest rate swaps |                                  |                               |           |                        |           |          | 3.88 | %        |      |      |           |           |           |          | 4.26 | %   

Interest Rate Swaps

We use interest rate swaps as one of the tools to manage our interest rate risk
profile (defined as the sensitivity of our earnings and economic value to
changes in interest rates). We utilize fixed receipt callable interest rate
swaps to convert certain longer-term callable certificates of deposit into
short-term and medium-term variable instruments. Under certain agreements
totaling $135.0 million in notional principal amount, we have agreed to receive
interest from the counterparty on a notional amount at a fixed rate defined in
the agreement and to pay interest at a floating rate indexed to LIBOR during
the entire term of the interest rate swap. In other agreements totaling $1.8
billion in notional principal amount, we have agreed to receive interest from
the counterparty on a notional amount at a fixed rate defined in the agreement,
and to pay interest at a fixed rate, converting to floating rate indexed to
LIBOR after the first two years of the interest rate swap term. Such interest
rate swaps are designated and qualify as fair value hedges under SFAS No. 133.
We have assumed no ineffectiveness in the respective hedging relationships.
Any gain or loss on the interest rate swap was offset by a gain or loss on the
certificates of deposit during the period of change in fair values.

We utilize fixed payment interest rate swaps to convert certain floating-rate
FHLB advances into fixed-rate instruments. Under these agreements totaling
$409.6 million in notional principal amount, we have agreed to pay interest to
the counterparty on a notional principal amount at a fixed rate defined in the
agreement and receive interest at a floating rate indexed to LIBOR. The
amounts of interest exchanged are calculated on the basis of

19



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notional principal amounts. Such interest rate swaps are designated and
qualify as cash flow hedges under SFAS No. 133. We have assumed no
ineffectiveness in the respective hedging relationships. Any gain or loss on
the interest rate swaps was offset by the expected future cash flows on the
FHLB advances during the period of change in fair values.

We utilized a fixed receipt interest rate swap to convert our $400.0 million of
subordinated notes into a variable instrument. Under this agreement, we have
agreed to receive interest from the counterparty on a notional amount at a
fixed rate defined in the agreement and to pay interest at a floating rate
indexed to LIBOR. Such interest rate swap is designated and qualifies as a
fair value hedge under SFAS No. 133. We have assumed no ineffectiveness in the
hedging relationship. Any gain or loss on the interest rate swap was offset by
a gain or loss on the subordinated notes during the period of change in fair
values.

In May 2002, we entered into $575.0 million of fixed payment and variable
receipt interest rate swaps related to the issuance of the Banks subordinated
notes. However, these interest rate swaps did not qualify for hedge accounting
under SFAS No. 133. For the nine months ended September 30, 2003, the net
unrealized loss attributed to these interest rate swaps decreased $7.0 million
to an ending balance of $18.9 million. The corresponding interest rate swap
liabilities were recognized in our Consolidated Statements of Financial
Condition at September 30, 2003 under the caption Accrued expenses and other
liabilities.

Information on the interest rate swaps, by maturity date, is as follows:

Interest Rate Swaps(Figure 12)

|                                   |      |       |   |                        |           |           |  |          |      |           |  |           |      |          |   |           |           |  |  |      |      |      |  |      |      |     
|---------------------------------- | ---- | ----- | - | ---------------------- | --------- | --------- |  | -------- | ---- | --------- |  | --------- | ---- | -------- | - | --------- | --------- |  |  | ---- | ---- | ---- |  | ---- | ---- | ----
|                                   |      |       |   | 9/30/03                |           | 12/31/02 
|                                   |      |       |   |                        |           |          
|                                   |      |       |   | Notional               |           | Receiving |  | Paying   |      | Notional  |  | Receiving |      | Paying  
|                                   |      |       |   | Principal              |           | Interest  |  | Interest |      | Principal |  | Interest  |      | Interest
|                                   |      |       |   | Amount                 |           | Rate      |  | Rate     |      | Amount    |  | Rate      |      | Rate    
|                                   |      |       |   |                        |           |           |  |          |      |           |  |           |      |         
|                                   |      |       |   | (Dollars in thousands)
|Fixed Payment and Fixed
Receipt(1) |      |       |   |                        |           |           |  |          |      |           |  |           |      |          |   |           |           |  |  |      |      |      |  |     
|                                   | 2007 |       | $ | 1,005,000              |           |           |  | 4.31     | %    |           |  | 2.75      | %    |          | $ | 1,005,000 |           |  |  | 4.31 | %    |      |  | 2.75 | %   
|                                   | 2008 |       |   | 760,000                |           |           |  | 3.59     |      |           |  | 1.95      |      |          |   |          |           |  |  |     |      |      |  |     |     
|                                   |      |       |   |                        |           |           |  |          |      |           |  |           |      |          |   |           |           |  |  |      |      |      |  |     
|                                   |      | Total |   | $                      | 1,765,000 |           |  |          | 4.00 | %         |  |           | 2.40 | %        |   | $         | 1,005,000 |  |  |      | 4.31 | %    |  |      | 2.75 | %   
|                                   |      |       |   |                        |           |           |  |          |      |           |  |           |      |          |   |           |           |  |  |      |      |      |  |     
|Fixed Payment and Variable
Receipt |      |       |   |                        |           |           |  |          |      |           |  |           |      |          |   |           |           |  |  |      |      |      |  |     
|                                   | 2003 |       | $ | 206,638                |           |           |  | 1.12     | %    |           |  | 3.58      | %    |          | $ | 409,605   |           |  |  | 1.42 | %    |      |  | 3.55 | %   
|                                   | 2004 |       |   | 375,000                |           |           |  | 1.13     |      |           |  | 3.66      |      |          |   | 375,000   |           |  |  | 1.40 |      |      |  | 3.66 |     
|                                   | 2006 |       |   | 402,967                |           |           |  | 1.12     |      |           |  | 3.84      |      |          |   | 200,000   |           |  |  | 1.40 |      |      |  | 4.69 |     
|                                   |      |       |   |                        |           |           |  |          |      |           |  |           |      |          |   |           |           |  |  |      |      |      |  |     
|                                   |      | Total |   | $                      | 984,605   |           |  |          | 1.13 | %(2)      |  |           | 3.71 | %        |   | $         | 984,605   |  |  |      | 1.41 | %(2) |  |      | 3.82 | %   
|                                   |      |       |   |                        |           |           |  |          |      |           |  |           |      |          |   |           |           |  |  |      |      |      |  |     
|Variable Payment and Fixed
Receipt |      |       |   |                        |           |           |  |          |      |           |  |           |      |          |   |           |           |  |  |      |      |      |  |     
|                                   | 2004 |       | $ |                       |           |           |  |         | %    |           |  |          | %    |          | $ | 315,000   |           |  |  | 2.80 | %    |      |  | 1.57 | %   
|                                   | 2005 |       |   | 135,000                |           |           |  | 2.18     |      |           |  | 1.13      |      |          |   |          |           |  |  |     |      |      |  |     |     
|                                   | 2007 |       |   |                       |           |           |  |         |      |           |  |          |      |          |   | 555,000   |           |  |  | 5.51 |      |      |  | 1.55 |     
|                                   | 2012 |       |   | 400,000                |           |           |  | 5.76     |      |           |  | 1.13      |      |          |   | 400,000   |           |  |  | 5.76 |      |      |  | 1.75 |     
|                                   |      |       |   |                        |           |           |  |          |      |           |  |           |      |          |   |           |           |  |  |      |      |      |  |     
|                                   |      | Total |   | $                      | 535,000   |           |  |          | 4.86 | %         |  |           | 1.13 | %(2)     |   | $         | 1,270,000 |  |  |      | 4.92 | %    |  |      | 1.62 | %(2)
|                                   |      |       |   |                        |           |           |  |          |      |           |  |           |      |          |   |           |           |  |  |      |      |      |  |     



---

|(1) |  | Converts to variable payment indexed to LIBOR after the first two years
of the interest rate swap agreement.
|--- |  | ------------------------------------------------------------------------------------------------------------
|(2) |  | Rates are based upon LIBOR.                                                                                 

Additionally, we have entered into forward fixed payment and variable receipt
interest rate swaps totaling $3.7 billion in notional principal amount that are
not reflected in Figure 12 above. Under these agreements, we have agreed to
pay interest to the counterparty on a notional principal amount at a fixed rate
defined in the agreement and receive interest at a floating rate indexed to
LIBOR. These forward interest rate swaps become effective between October 2003
and August 2004. The forward interest rate swaps mature between January 2006
and August 2007. The weighted average fixed payment rate on these forward
interest rate swaps is 2.85%. The forward interest rate swaps will convert
certain floating-rate FHLB advances into fixed-rate instruments. Such interest
rate swaps are designated and qualify as cash flow hedges under SFAS No. 133.

Information on these forward interest rate swaps, by effective date, is as
follows:

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##### Table of Contents



Forward Interest Rate Swaps(Figure 13)

|                                                                               |                     |       |   |                        |           |          |  |        |      |  
|------------------------------------------------------------------------------ | ------------------- | ----- | - | ---------------------- | --------- | -------- |  | ------ | ---- | -
|                                                                               |                     |       |   |                        |           |          |  | Paying
|                                                                               |                     |       |   | Notional               |           | Interest
|                                                                               |                     |       |   | Amount                 |           | Rate    
|                                                                               |                     |       |   |                        |           |         
|                                                                               |                     |       |   | (Dollars in thousands)
|Fixed Payment and Variable Receipt Forward
Interest Rate Swaps Effective Date: |                     |       |   |                        |           |          |  |       
|                                                                               | Fourth quarter 2003 |       | $ | 206,638                |           |          |  | 3.05   | %   
|                                                                               | First quarter 2004  |       |   | 1,000,000              |           |          |  | 2.87   |     
|                                                                               | Second quarter 2004 |       |   | 1,500,000              |           |          |  | 2.84   |     
|                                                                               | Third quarter 2004  |       |   | 1,000,000              |           |          |  | 2.79   |     
|                                                                               |                     |       |   |                        |           |          |  |       
|                                                                               |                     | Total |   | $                      | 3,706,638 |          |  |        | 2.85 | %
|                                                                               |                     |       |   |                        |           |          |  |       

The fair value of the Companys interest rate swap contracts is estimated as
the difference in the present value of future cash flows between the Companys
existing agreements and current market rate agreements of the same duration.
Information on the fair values of the interest rate swaps is as follows:

Fair Value of Interest Rate Swaps(Figure 14)

|                        |                              |                  |   |                        |        |          |   |         |        | 
|----------------------- | ---------------------------- | ---------------- | - | ---------------------- | ------ | -------- | - | ------- | ------ | 
|                        |                              |                  |   | 9/30/03                |        | 12/31/02
|                        |                              |                  |   |                        |        |         
|                        |                              |                  |   | (Dollars in thousands)
|Unrealized gain (loss): |                              |                  |   |                        |        |          |   |        
|                        | Fair value hedges            |                  | $ | 63,316                 |        |          | $ | 84,341  |       
|                        | Cash flow hedges             |                  |   | (29,031                | )      |          |   | (10,152 | )     
|                        | Unhedged interest rate swaps |                  |   | (18,879                | )      |          |   | (25,905 | )     
|                        |                              |                  |   |                        |        |          |   |        
|                        |                              | Total fair value |   | $                      | 15,406 |          |   | $       | 48,284 | 
|                        |                              |                  |   |                        |        |          |   |        

The net benefit of interest rate swaps included in interest expense is as
follows:

Net Benefit of Interest Risk Management(Figure 15)

|                           |                              |                   |   |                        |        |                   |   |         |         |         |   |         |         |   |   |         |         |  
|-------------------------- | ---------------------------- | ----------------- | - | ---------------------- | ------ | ----------------- | - | ------- | ------- | ------- | - | ------- | ------- | - | - | ------- | ------- | -
|                           |                              |                   |   | Three Months Ended     |        | Nine Months Ended
|                           |                              |                   |   |                        |        |                  
|                           |                              |                   |   | 9/30/03                |        | 9/30/02           |   | 9/30/03 |         | 9/30/02
|                           |                              |                   |   |                        |        |                   |   |         |         |        
|                           |                              |                   |   | (Dollars in thousands)
|Interest expense (income): |                              |                   |   |                        |        |                   |   |         |         |         |   |         |         |   |   |        
|                           | Deposits                     |                   | $ | (7,136                 | )      |                   | $ | (11,003 | )       |         | $ | (24,326 | )       |   | $ | (34,386 | )      
|                           | FHLB advances                |                   |   | 2,508                  |        |                   |   | 1,808   |         |         |   | 7,087   |         |   |   | 5,294   |        
|                           | Subordinated notes           |                   |   | (4,528                 | )      |                   |   | (3,898  | )       |         |   | (13,353 | )       |   |   | (5,635  | )      
|                           | Unhedged interest rate swaps |                   |   | 3,996                  |        |                   |   | 3,089   |         |         |   | 11,654  |         |   |   | 4,441   |        
|                           |                              |                   |   |                        |        |                   |   |         |         |         |   |         |         |   |   |        
|                           |                              | Total net benefit |   | $                      | (5,160 | )                 |   | $       | (10,004 | )       |   | $       | (18,938 | ) |   | $       | (30,286 | )
|                           |                              |                   |   |                        |        |                   |   |         |         |         |   |         |         |   |   |        

Liquidity

Our principal sources of funds are deposits, advances from the FHLB of
Cincinnati, federal funds purchased and repurchase agreements, repayments and
maturities of loans and securities, proceeds from the sale of loans and
securities and funds provided by operations. While scheduled loan, security
and interest-bearing deposit amortization and maturity are relatively
predictable sources of funds, deposit flows and loan and mortgage-backed
securities repayments are greatly influenced by economic conditions, the
general level of interest rates and competition. We utilize particular sources
of funds based on comparative costs and availability. We generally manage the
pricing of deposits to maintain a steady deposit balance, but from time to time
may decide to supplement deposits with longer term and/or lower cost
alternative sources of funds such as FHLB advances and federal funds purchased
and repurchase agreements. We may, from time to time, decide to price deposits
aggressively for strategic reasons which may result in significant deposit
inflows.

In the ordinary course of business, we enter into off-balance-sheet financial
instruments consisting of commitments to extend credit, commercial letters of
credit, standby letters of credit and commitments to purchase or sell assets.
Such financial instruments are recorded in the financial statements when they
are funded or the related fees are incurred or received. We anticipate that we
will have sufficient funds available to meet our commitments. As of September
30, 2003, there were outstanding commitments to originate $2.1 billion of
mortgage loans and other loans and leases, all at market rates. Terms of the
commitments extend up to nine months, but are generally less than two months.
Additionally, there were outstanding unfunded consumer lines of credit of $5.1
billion and corporate banking lines of credit of $371.4 million as of September
30, 2003. Substantially all of the consumer

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loans, including consumer lines of credit, are secured by equity in the
borrowers residences. The Company does not expect all of these lines to be
used by the borrowers. Outstanding letters of credit totaled $136.4 million as
of September 30, 2003.

Capital and Dividends

On April 23, 2002, the Companys Board of Directors authorized management to
repurchase up to 10% of the Companys outstanding common stock, or
approximately 22 million shares, under a program of open market purchases or
privately negotiated transactions. This program replaced the repurchase
program that had been in effect since July 18, 2000 and under which the Company
repurchased approximately 15.0 million shares for a total cost of $394.8
million. The Company repurchased 6.6 million shares under the new
authorization during the nine months ended September 30, 2003 at an average
cost of $31.00 per share. This brought the total number of shares repurchased
under this program to 14.6 million shares at an average cost of $30.99 per
share.

Charter One, a financial holding company, is subject to regulation by the
Federal Reserve Board (FRB) under the Bank Holding Company Act of 1956 as
amended, and the regulations of the FRB, including various capital
requirements. The Bank is subject to various regulatory capital requirements
administered by the OCC. Failure to meet minimum capital requirements can
initiate certain mandatory, and possibly discretionary, actions by each
regulator that, if undertaken, could have a direct material effect on our
financial statements. Under capital adequacy guidelines, specific capital
guidelines must be met that involve quantitative measures of assets,
liabilities, and certain off-balance-sheet items as calculated under regulatory
accounting practices. The institutions capital classification is also subject
to qualitative judgments by the regulators about components, risk weightings,
and other factors.

Quantitative measures established by regulation to ensure capital adequacy
require Charter One and the Bank to individually maintain minimum amounts and
ratios (set forth in the table below) of total and tier 1 capital to
risk-weighted assets, and of tier 1 capital to average assets. The actual
regulatory capital ratios calculated for Charter One and the Bank, along with
the capital amounts and ratios for capital adequacy purposes and the amounts
required to be categorized as well capitalized, are as follows:

Regulatory Capital(Figure 16)

|                        |                                        |  |                        |  |                   |  |                          |           |       |  |  |       |   |  |             |  |       |  |   |           |  |  |   |      |   |  |  |  |  |  |   |           |  |  |   |       |  
|----------------------- | -------------------------------------- |  | ---------------------- |  | ----------------- |  | ------------------------ | --------- | ----- |  |  | ----- | - |  | ----------- |  | ----- |  | - | --------- |  |  | - | ---- | - |  |  |  |  |  | - | --------- |  |  | - | ----- | -
|                        |                                        |  | 9/30/03               
|                        |                                        |  |                       
|                        |                                        |  |                        |  |                   |  |                          |           |       |  |  |       |   |  | For Capital |  |       |  |   |           |  |  |   |      |   |  | 
|                        |                                        |  | Actual                 |  | Adequacy Purposes |  | To Be "Well Capitalized"
|                        |                                        |  |                        |  |                   |  |                         
|                        |                                        |  | Amount                 |  | Ratio             |  | Amount                   |           | Ratio |  |  |       |   |  | Amount      |  | Ratio
|                        |                                        |  |                        |  |                   |  |                          |           |       |  |  |       |   |  |             |  |      
|                        |                                        |  | (Dollars in thousands)
|Charter One:            |                                        |  |                        |  |                   |  |                          |           |       |  |  |       |   |  |             |  |       |  |   |           |  |  |   |      |   |  |  |  |  |  |   |           |  |  |   |      
|                        | Total capital to risk-weighted assets  |  |                        |  |                   |  | $                        | 3,449,929 |       |  |  | 11.42 | % |  |             |  |       |  | $ | 2,417,224 |  |  | > | 8.00 | % |  |  |  |  |  | $ | 3,021,530 |  |  | > | 10.00 | %
|                        | Tier 1 capital to risk-weighted assets |  |                        |  |                   |  |                          | 2,673,060 |       |  |  | 8.85  |   |  |             |  |       |  |   | 1,208,612 |  |  | > | 4.00 |   |  |  |  |  |  |   | 1,812,918 |  |  | > | 6.00  |  
|                        | Tier 1 capital to average assets       |  |                        |  |                   |  |                          | 2,673,060 |       |  |  | 6.18  |   |  |             |  |       |  |   | 1,729,630 |  |  | > | 4.00 |   |  |  |  |  |  |   | N/A       |  |  |   | N/A   |  
|Charter One Bank, N.A.: |                                        |  |                        |  |                   |  |                          |           |       |  |  |       |   |  |             |  |       |  |   |           |  |  |   |      |   |  |  |  |  |  |   |           |  |  |   |      
|                        | Total capital to risk-weighted assets  |  |                        |  |                   |  |                          | 3,481,323 |       |  |  | 11.53 |   |  |             |  |       |  |   | 2,415,181 |  |  | > | 8.00 |   |  |  |  |  |  |   | 3,018,976 |  |  | > | 10.00 |  
|                        | Tier 1 capital to risk-weighted assets |  |                        |  |                   |  |                          | 2,371,535 |       |  |  | 7.86  |   |  |             |  |       |  |   | 1,207,590 |  |  | > | 4.00 |   |  |  |  |  |  |   | 1,811,386 |  |  | > | 6.00  |  
|                        | Tier 1 capital to average assets       |  |                        |  |                   |  |                          | 2,371,535 |       |  |  | 5.51  |   |  |             |  |       |  |   | 1,720,835 |  |  | > | 4.00 |   |  |  |  |  |  |   | 2,151,044 |  |  | > | 5.00  |  

|                        |                                        |  |                        |           |                   |  |                          |       |       |  |             |           |       |  |   |      |   |  |   |           |  |  |   |       |  
|----------------------- | -------------------------------------- |  | ---------------------- | --------- | ----------------- |  | ------------------------ | ----- | ----- |  | ----------- | --------- | ----- |  | - | ---- | - |  | - | --------- |  |  | - | ----- | -
|                        |                                        |  | 12/31/02              
|                        |                                        |  |                       
|                        |                                        |  |                        |           |                   |  |                          |       |       |  | For Capital |           |       |  |   |      |   |  |  
|                        |                                        |  | Actual                 |           | Adequacy Purposes |  | To Be "Well Capitalized"
|                        |                                        |  |                        |           |                   |  |                         
|                        |                                        |  | Amount                 |           | Ratio             |  | Amount                   |       | Ratio |  | Amount      |           | Ratio
|                        |                                        |  |                        |           |                   |  |                          |       |       |  |             |           |      
|                        |                                        |  | (Dollars in thousands)
|Charter One:            |                                        |  |                        |           |                   |  |                          |       |       |  |             |           |       |  |   |      |   |  |   |           |  |  |   |      
|                        | Total capital to risk-weighted assets  |  | $                      | 3,239,604 |                   |  |                          | 11.67 | %     |  | $           | 2,220,734 |       |  | > | 8.00 | % |  | $ | 2,775,917 |  |  | > | 10.00 | %
|                        | Tier 1 capital to risk-weighted assets |  |                        | 2,513,577 |                   |  |                          | 9.05  |       |  |             | 1,110,367 |       |  | > | 4.00 |   |  |   | 1,665,550 |  |  | > | 6.00  |  
|                        | Tier 1 capital to average assets       |  |                        | 2,513,577 |                   |  |                          | 6.10  |       |  |             | 1,648,861 |       |  | > | 4.00 |   |  |   | N/A       |  |  |   | N/A   |  
|Charter One Bank, N.A.: |                                        |  |                        |           |                   |  |                          |       |       |  |             |           |       |  |   |      |   |  |   |           |  |  |   |      
|                        | Total capital to risk-weighted assets  |  |                        | 3,150,686 |                   |  |                          | 11.36 |       |  |             | 2,219,719 |       |  | > | 8.00 |   |  |   | 2,774,649 |  |  | > | 10.00 |  
|                        | Tier 1 capital to risk-weighted assets |  |                        | 2,091,615 |                   |  |                          | 7.54  |       |  |             | 1,109,860 |       |  | > | 4.00 |   |  |   | 1,664,789 |  |  | > | 6.00  |  
|                        | Tier 1 capital to average assets       |  |                        | 2,091,615 |                   |  |                          | 5.11  |       |  |             | 1,636,187 |       |  | > | 4.00 |   |  |   | 2,045,234 |  |  | > | 5.00  |  

Management believes that, as of September 30, 2003, Charter One and the Bank
individually met the capital adequacy requirements to which they were subject.
Events beyond managements control, such as fluctuations in interest rates or a
downturn in the economy in areas in which the institutions loans and
securities are concentrated

22



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##### Table of Contents



could adversely affect future earnings and, consequently, the institutions
ability to meet its future capital requirements.

Quarterly Stock Prices and Dividends(Figure 17)

|                                         |       |  |         |       |         |  |                    |       |          |  |         |       |  |  |     |       |  |  |     |       | 
|---------------------------------------- | ----- |  | ------- | ----- | ------- |  | ------------------ | ----- | -------- |  | ------- | ----- |  |  | --- | ----- |  |  | --- | ----- | 
|                                         |       |  |         |       |         |  | Three Months Ended |       |          |  |        
|                                         |       |  |        
|                                         |       |  | 9/30/03 |       | 6/30/03 |  | 3/31/03            |       | 12/31/02 |  | 9/30/02
|                                         |       |  |         |       |         |  |                    |       |          |  |        
|Market price of common stock (NYSE: CF): |       |  |         |       |         |  |                    |       |          |  |         |       |  |  |     |       |  |  |     |      
|                                         | High  |  | $       | 33.20 |         |  | $                  | 32.59 |          |  | $       | 30.74 |  |  | $   | 31.48 |  |  | $   | 33.42 | 
|                                         | Low   |  |         | 30.10 |         |  |                    | 27.24 |          |  |         | 27.05 |  |  |     | 23.89 |  |  |     | 25.81 | 
|                                         | Close |  |         | 30.60 |         |  |                    | 31.18 |          |  |         | 27.66 |  |  |     | 28.73 |  |  |     | 29.72 | 
|Dividends declared and paid              |       |  | .26     |       |         |  | .24                |       |          |  | .22     |       |  |  | .22 |       |  |  | .21 |      







ITEM 3. Quantitative and Qualitative Disclosure About Market Risk

At September 30, 2003, our one-year gap was 6.57% of total interest-earning
assets.

A comprehensive qualitative and quantitative analysis regarding market risk was
disclosed in our December 31, 2002 Form 10-K. The assumptions used in our
model have been updated as of September 30, 2003. The table below indicates
the estimated impact on net interest income under the various interest rate
scenarios as a percentage of base case net interest income projections.

|                   |  |                               |       |   
|------------------ |  | ----------------------------- | ----- | --
|Changes in         |  | Estimated Percentage Change  
|Interest Rates     |  | in Future Net Interest Income
|(basis points)(1)  |  | 12 Months                    
|                   |  |                              
|+200 over one year |  |                               | (7.81 | )%
|+100 over one year |  |                               | (3.98 | ) 
|-100 over one year |  |                               | 2.88  |   



---

|(1) |  | In general, short and long-term
rates are assumed to increase or decrease, in
parallel fashion, across all four quarters and then
remain unchanged. However, the rates paid on core
deposits are assumed to reprice at only half the
increment in the case of the up and down 100 basis
points scenarios and up 200 basis points scenario.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Actual results will differ from simulated results due to timing, magnitude, and
frequency of interest rate changes, as well as changes in market conditions and
management strategies.







ITEM 4. Controls and Procedures

An evaluation of the Companys disclosure controls and procedures (as defined
in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the Act)) as of
September 30, 2003 was carried out under the supervision and with the
participation of the Companys Chief Executive Officer, Chief Financial Officer
and several other members of the Companys senior management. The Companys
Chief Executive Officer and Chief Financial Officer concluded that the
Companys disclosure controls and procedures as currently in effect are
effective in ensuring that the information required to be disclosed by the
Company in the reports it files or submits under the Act is (i) accumulated and
communicated to the Companys management (including the Chief Executive Officer
and Chief Financial Officer) in a timely manner, and (ii) recorded, processed,
summarized and reported within the time periods specified in the SECs rules
and forms. There have been no changes in our internal control over financial
reporting (as defined in Rule 13a-15(f) of the Act) that occurred during the
quarter ended September 30, 2003, that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.

The Company intends to continually review and evaluate the design and
effectiveness of its disclosure controls and procedures and to improve its
controls and procedures over time and to correct any deficiencies that it may
discover in the future. The goal is to ensure that senior management has
timely access to all material financial and non-financial information
concerning the Companys business. While the Company believes the present
design of its disclosure controls and procedures is effective to achieve its
goal, future events affecting its business may cause the Company to modify its
disclosure controls and procedures.

PART II  OTHER INFORMATION







ITEM 5. Other Information

Cash Dividend On October 22, 2003, the Companys Board of Directors declared
a regular quarterly cash dividend of $.26 per share. The cash dividend is
payable November 20, 2003 to shareholders of record on

23



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##### Table of Contents



November 6, 2003. This quarterly payout will bring the cash dividend to $.98
per share for the full year of 2003, up 18.1% from the $.83 per share paid in
2002.







ITEM 6. Exhibits and Reports on Form 8-K

(a)  Exhibits: See Index to Exhibits.

(b)  Reports on Form 8-K: None







SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|      |  |                   |  |                                                                                                                                              |  | 
|----- |  | ----------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|      |  |                   |  | CHARTER ONE FINANCIAL, INC.                                                                                                                  |  | 
|     
|Date: |  | November 10, 2003 |  | /s/ Charles John Koch                                                                                                                        |  | 
|     
|      |  |                   |  | Charles John Koch
Chairman of the Board, President and Chief
Executive Officer
(Duly Authorized Officer and Principal
Executive Officer)     |  | 
|     
|Date: |  | November 10, 2003 |  | /s/ Richard W. Neu                                                                                                                           |  | 
|     
|      |  |                   |  | Richard W. Neu
Executive Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal
Financial and Accounting Officer) |  | 

24



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##### Table of Contents









INDEX TO EXHIBITS





|               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-------------- | ----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT
NUMBER | DESCRIPTION
|               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|3.1            |             | Registrants Second Restated Certificate of Incorporation, as amended and
currently in effect, filed as Exhibit 3.1 to Registrants Report on Form
10-K for the fiscal year ended December 31, 2000 (File No. 001-15495), is
incorporated herein by reference.                                                                                                                                                                                                                                                                                                                       
|              
|               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|              
|3.2            |             | Registrants Bylaws, as amended and restated and currently in effect, filed
as Exhibit 3.2 to Registrants Report on Form 10-K for the fiscal year ended
December 31, 1999 (File No. 001-15495), is incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                
|              
|               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|              
|4.1            |             | Form of Certificate of Common Stock, as currently in effect, filed as
Exhibit 4.1 to Registrants Report on Form 10-K for the fiscal year ended
December 31, 2000 (File No. 001-15495), is incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                         
|              
|               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|              
|4.2            |             | Amended and Restated Stockholder Protection Rights Agreement, dated October
20, 1999, between the Company and Fleet National Bank (f/k/a BankBoston,
N.A.), as rights agent, filed as Exhibit 2 to the Companys Registration
Statement on Form 8-A/A filed on October 30, 1999 (File No. 001-15495), is
incorporated herein by reference.                                                                                                                                                                                                                                           
|              
|               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|              
|4.3            |             | The Registrant hereby agrees to furnish to the Securities and Exchange
Commission, upon request, with copies of all instruments defining rights of
holders of long-term debt of Charter One and its consolidated subsidiaries.                                                                                                                                                                                                                                                                                                                                                       
|              
|               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|              
|10.1           |             | Registrants Long-Term Stock Incentive Plan, filed on January 22, 1988 as
Exhibit 10.1 to Registrants Registration Statement on Form S-1 (File No.
33-16207), is incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                  
|              
|               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|              
|10.2           |             | Registrants Directors Stock Option Plan, filed on January 22, 1988 as
Exhibit 10.2 to Registrants Registration Statement on Form S-1 (File No.
33-16207), is incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                    
|              
|               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|              
|10.3           |             | Charter One Bank, F.S.B. Executive Incentive Goal Achievement Plan, filed as
Exhibit 10.8 to Registrants Report on Form 10-K for the fiscal year ended
December 31, 1994 (File No. 000-16311) is incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                  
|              
|               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|              
|10.4           |             | First American Savings Bank, F.S.B. Nonqualified Retirement Plan and First
Amendment thereto, filed as Exhibit 10.17 to Registrants Report on Form
10-K for the fiscal year ended December 31, 1993 (File No. 000-16311), are
incorporated herein by reference.                                                                                                                                                                                                                                                                                                                     
|              
|               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|              
|10.5           |             | FirstFed Michigan Corporation 1991 Stock Option Plan, filed on November 1,
1995 as an exhibit to Registrants Registration Statement on Form S-8 (File
No. 33-61273), is incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                           
|              
|               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|              
|10.6           |             | Amendment 1, dated May 3, 1996, to Forms of Supplemental Retirement
Agreements, dated October 31, 1995, between Charter One and Charles John
Koch, Richard W. Neu, John David Koch, Mark D. Grossi, and Robert J. Vana
filed as Exhibit 10.7 to the Registrants Report on Form 10-K for the fiscal
year ended December 31, 1998 (File No. 000-16311), is incorporated herein by
reference. The Agreements, originally filed on July 25, 1995 as Exhibits
10.4 and 10.5 to Registrants Registration Statement on Form S-4 (File No.
33-61273), are incorporated herein by reference.
|              
|               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|              
|10.7           |             | Amended and Restated Employment Agreements, effective August 1, 1999,
between Charter One Financial, Inc. and Charles John Koch, Richard W. Neu,
John D. Koch, Mark D. Grossi, and Robert J. Vana filed as Exhibit 10.8 to
Registrants Report on Form 10-K for the fiscal year ended December 31, 1999
(File No. 000-16311), is incorporated herein by reference.                                                                                                                                                                                                                   
|              
|               |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|              
|10.8           |             | Alliance Bancorp 1997 Long-Term Incentive Stock Benefit Plan, filed as an
attachment to the proxy statement for the annual meeting of stockholders of
Alliance held on May 28, 1997 (File No. 000-20082), is incorporated herein
by reference.                                                                                                                                                                                                                                                                                                                                       
|              
|10.9           |             | Hinsdale Financial Corporation 1994 Incentive Stock Option Plan, filed as an
attachment to the proxy                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

25



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##### Table of Contents





|      |  | statement for the annual meeting of stockholders of
Alliance held on February 8, 1995 (File No. 000-20082), is incorporated
herein by reference.                                                                                                                                                                                       
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     
|      |  |                                                                                                                                                                                                                                                                                                                                        
|     
|10.10 |  | Hinsdale Financial Corporation 1992 Stock Option Plan for Outside Directors
and the Hinsdale Financial Corporation 1992 Incentive Stock Option Plan,
filed as attachments to the proxy statement for the annual meeting of
stockholders of Alliance held on February 10, 1993 (File No. 000-20082) is
incorporated herein by reference.
|     
|      |  |                                                                                                                                                                                                                                                                                                                                        
|     
|10.11 |  | Charter One Financial, Inc. 1997 Stock Option and Incentive Plan, as amended
and restated, filed as Exhibit 10.13 to the Registrants Quarterly Report on
Form 10-Q for the quarter ended June 30, 2002 (File No. 001-15495), is
incorporated herein by reference.                                                                     
|     
|      |  |                                                                                                                                                                                                                                                                                                                                        
|     
|10.12 |  | 1992 Stock-Based Compensation Plan of RCSB Financial, Inc., filed on October
8, 1997, as an exhibit to Post-Effective Amendment Number One on Form S-8 to
Form S-4 (File No. 333-33259), is incorporated herein by reference.                                                                                                          
|     
|      |  |                                                                                                                                                                                                                                                                                                                                        
|     
|10.13 |  | Home Federal Savings Bank Stock Compensation Program, filed on September 29,
1997 as an exhibit to Post-Effective Amendment Number One on Form S-8 to
Form S-4 (File No. 333-33169), is incorporated herein by reference.                                                                                                              
|     
|      |  |                                                                                                                                                                                                                                                                                                                                        
|     
|10.14 |  | The RCSB Financial, Inc. Non-Employee Director Deferred Compensation Plan,
as amended and restated on December 1, 1998, filed as Exhibit 10.16 to
Registrants Annual Report on Form 10-K for the fiscal year ended December
31, 1998 (File No. 000-16311), is incorporated herein by reference.                                       
|     
|      |  |                                                                                                                                                                                                                                                                                                                                        
|     
|10.15 |  | ALBANK Financial Corporation 1992 Stock Incentive Plan for Key Employees, as
amended and restated as of December 18, 1995, filed as Exhibit 10.11 to
ALBANKs Annual Report on Form 10-K for the year ended December 31, 1995
(File No. 000-19843), is incorporated herein by reference.                                               
|     
|      |  |                                                                                                                                                                                                                                                                                                                                        
|     
|10.16 |  | ALBANK Financial Corporation 1995 Stock Incentive Plan for Outside
Directors, filed as Exhibit 10.12.1 to ALBANKs Annual Report on Form 10-K
for the year ended December 31, 1995 (File No. 000-19843), is incorporated
herein by reference.                                                                                          
|     
|      |  |                                                                                                                                                                                                                                                                                                                                        
|     
|10.17 |  | ALBANK Financial Corporation 1992 Stock Incentive Plan for Outside
Directors, filed as an appendix to the Proxy Statement for the 1992 Annual
Meeting of the Stockholders of ALBANK held on October 26, 1992 (File No.
001-19843), is incorporated herein by reference.                                                                
|     
|      |  |                                                                                                                                                                                                                                                                                                                                        
|     
|10.18 |  | Employment Agreement, dated November 30, 1998, between Charter One
Financial, Inc. and Herbert G. Chorbajian, filed as Exhibit 10.20 to
Registrants Annual Report on Form 10-K for the fiscal year ended December
31, 1998 (File No. 000-16311), is incorporated herein by reference.                                                 
|     
|      |  |                                                                                                                                                                                                                                                                                                                                        
|     
|10.19 |  | Charter One Financial, Inc. Top Executive Incentive Goal Achievement Plan,
filed on October 1, 1998 as Annex E to the Prospectus contained in the
Registrants Registration Statement on Form S-4 (File No. 333-65137), is
incorporated herein by reference.                                                                           
|     
|      |  |                                                                                                                                                                                                                                                                                                                                        
|     
|10.20 |  | Charter One Bank, N.A.s Director Non-Stock Deferred Compensation Plan,
filed as Exhibit 10.20 to the Registrants Annual Report on Form 10-K for
the fiscal year ended December 31, 2002 (File No. 001-15495), is
incorporated herein by reference.                                                                                   
|     
|      |  |                                                                                                                                                                                                                                                                                                                                        
|     
|10.21 |  | Charter One Bank, N.A.s Non-Stock Deferred Compensation Plan, filed as
Exhibit 10.21 to the Registrants Annual Report on Form 10-K for the fiscal
year ended December 31, 2002 (File No. 001-15495), is incorporated herein by
reference.                                                                                            
|     
|      |  |                                                                                                                                                                                                                                                                                                                                        
|     
|10.22 |  | Charter One Bank, N.A.s Stock Deferred Compensation Plan, filed as Exhibit
10.22 to the Registrants Annual Report on Form 10-K for the fiscal year
ended December 31, 2002 (File No. 001-15495), is incorporated herein by
reference.                                                                                                
|     
|      |  |                                                                                                                                                                                                                                                                                                                                        
|     
|10.23 |  | Master Trust Agreement for Charter One Financial, Inc. Deferred Compensation
Plans, filed as Exhibit 10.23 to the Registrants Annual Report on Form 10-K
for the fiscal year ended December 31, 2002 (File No. 001-15495), is
incorporated herein by reference.                                                                       
|     
|      |  |                                                                                                                                                                                                                                                                                                                                        
|     
|10.24 |  | Amendment No. 1 to the amended and restated Charter One Financial, Inc. 1997
Stock Option and Incentive Plan, filed as Exhibit 10.24 to the Registrant
Annual Report on Form 10-K for the fiscal year ended December 31, 2002 (File
No. 001-15495), is incorporated herein by reference.                                             

26



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##### Table of Contents





|11   |  | Statement Regarding Computation of Per Share Earnings                                             
|---- |  | --------------------------------------------------------------------------------------------------
|    
|     |  |                                                                                                   
|    
|31.1 |  | Certification Required by Securities Exchange Act of 1934 Rule 13a-14(a)
(Chief Executive Officer)
|    
|     |  |                                                                                                   
|    
|31.2 |  | Certification Required by Securities Exchange Act of 1934 Rule 13a-14(a)
(Chief Financial Officer)
|    
|     |  |                                                                                                   
|    
|32   |  | Certifications Required by Section 1350 of Title 18 of the United States Code                     

27