UNITED STATES

SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549




---

FORM 10-Q/A

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

SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended September 30, 2000

OR

[  ]  TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934


Commission file number 0-16311

CHARTER ONE FINANCIAL, INC.




(Exact name of registrant as specified in its
charter)


|                                                                       |  |                                             
|---------------------------------------------------------------------- |  | --------------------------------------------
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Delaware                                                               |  | 34-1567092                                  
|                                                                       |  |                                             
|(State or other jurisdiction of incorporation
        or organization) |  | (I.R.S. Employer
        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

The number of shares outstanding of the registrants sole
class of common stock as of November 3, 2000 was
207,875,519.



---






---



EXPLANATORY NOTE

The Registrant hereby amends Part I, Item 2 of its Quarterly
Report on Form 10-Q for the quarter ended September 30, 2000, to
correct the amount of the Registrant's loans of concern reported at
September 30, 2000, which were inadvertently reported in the
paragraph immediately following the Nonperforming Assets table in the
Form 10-Q as $53.7 million rather than $99.1
million. To the
extent the original filing is unaffected by this amendment, the
original filing has not been updated or corrected to reflect events
occurring subsequent to the date of the original filing.



---



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 and owns all of
the outstanding capital stock of Charter Michigan Bancorp, Inc.
and Charter One Commercial. Charter Michigan Bancorp, Inc. owns
all of the outstanding capital stock of Charter One Bank,
F.S.B., a federally chartered thrift. The primary business of
Charter One is operating these financial institutions which we
sometimes refer to in this document collectively 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. As of September 30, 2000, the Bank and its
subsidiaries were doing business through 421 full-service
branches and 35 loan production offices.

Forward-Looking Statements

This document, including information included or
incorporated by reference, contains, and future filings by the
Company on Form 10-K, Form 10-Q and Form 8-K and
future oral and written statements by the Company and its
management may contain, forward-looking statements about Charter
One and its subsidiaries 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, growth opportunities, interest rates,
acquisition and divestiture opportunities, and synergies,
efficiencies, cost savings and funding advantages expected to be
realized from prior acquisitions. Words such as may,
could, should, would,
believe, anticipate,
estimate, expect, intend,
plan, and similar expressions are intended to
identify these forward-looking statements. Forward-looking
statements by the Company and its management are based on
beliefs, plans, objectives, goals, expectations, anticipations,
estimates and intentions of management and are not guarantees of
future performance. The Company 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. The factors we discuss in this document and
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.

RESULTS OF OPERATIONS

Performance Overview

Charter One reported net income of
$109.6 million, or $.51 per diluted share, for the three
months ended September 30, 2000. This was a
$5.1 million, or 4.9%, increase over the results of the
third quarter of 1999 when net income was $104.5 million,
or $.46 per diluted share. Both periods included merger-related
charges. Excluding the after-tax impact of merger-related
charges, our net income resulted in a return on average equity
of 18.96% and a return on average assets of 1.37% for the three
months ended September 30, 2000. The comparable returns for
the third quarter of 1999 were 17.03% and 1.34%, respectively.
The increase in our operating returns was primarily attributable
to increases in income from retail banking. See Other
Income for further discussion regarding income from retail
banking.

For the nine months ended September 30,
2000, Charter One reported net income of $324.6 million, or
$1.48 per diluted share. This was an $8.8 million, or 2.8%,
increase over the results for the same period in 1999. Both
periods included merger-related charges. Our net income,
excluding the after-tax impact of merger-related charges,
resulted in a return on average equity of 18.88% and a return on
average assets of 1.46% for the nine months ended
September 30, 2000. The comparable returns for the 1999
period were 17.32% and 1.39%, respectively. The increase in our
operating returns, just as with the third quarter results, was
primarily attributable to increases in income from retail
banking. Additionally, the year-over-year comparison was
affected by an increase in income from leasing operations as
well as income from our Bank Owned Life Insurance
(BOLI) program. See Other

6



---



Income for further discussion regarding income from retail
banking, leasing operations and the BOLI program.

Figure 1 sets forth selected financial results and annualized
performance ratios for the three and nine months ended
September 30, 2000 and 1999, respectively. The table
reflects these financial results and ratios on both an actual
and operating return basis. Operating earnings and returns are
computed using net income excluding the after-tax impact of
merger-related charges for each of the periods presented. We
believe that presentation of operating earnings and returns will
provide comparability and insight into the operations of Charter
One.

Selected Financial Results and Ratios(Figure 1)

|           |                                                |                                               |   |                   |   |         |   |         |   |  |   |         |   |  |   |         |  
|---------- | ---------------------------------------------- | --------------------------------------------- | - | ----------------- | - | ------- | - | ------- | - |  | - | ------- | - |  | - | ------- | -
|           |                                                |                                               |   |                  
|           |                                                | Three Months Ended                            |   | Nine Months Ended
|           |                                                |                                               |   |                  
|           |                                                | 9/30/00                                       |   | 9/30/99           |   | 9/30/00 |   | 9/30/99
|           |                                                |                                               |   |                   |   |         |   |        
|           |                                                | (Dollars in thousands, except
per share data)
|Actual:    |                                                |                                               |   |                   |   |         |   |         |   |  |   |         |   |  |   |        
|          
|          
|          
|          
|           | Net income                                     |                                               | $ | 109,592           |   |         | $ | 104,502 |   |  | $ | 324,588 |   |  | $ | 315,824 |  
|          
|          
|          
|          
|           | Diluted earnings per share                     |                                               |   | .51               |   |         |   | .46     |   |  |   | 1.48    |   |  |   | 1.38    |  
|          
|          
|          
|          
|           | Return on average assets                       |                                               |   | 1.35              | % |         |   | 1.33    | % |  |   | 1.38    | % |  |   | 1.37    | %
|          
|          
|          
|          
|           | Return on average equity                       |                                               |   | 18.73             |   |         |   | 16.83   |   |  |   | 17.91   |   |  |   | 17.05   |  
|          
|          
|          
|          
|           | Average equity to average assets               |                                               |   | 7.21              |   |         |   | 7.89    |   |  |   | 7.71    |   |  |   | 8.01    |  
|          
|          
|          
|          
|           | Net interest income to administrative expenses |                                               |   | 1.50              | x |         |   | 1.62    | x |  |   | 1.50    | x |  |   | 1.62    | x
|          
|          
|          
|          
|           | Administrative expenses to average assets      |                                               |   | 1.83              | % |         |   | 1.83    | % |  |   | 1.95    | % |  |   | 1.87    | %
|          
|          
|          
|          
|           | Efficiency ratio                               |                                               |   | 45.54             |   |         |   | 45.81   |   |  |   | 46.66   |   |  |   | 46.49   |  
|          
|          
|          
|          
|Operating: |                                                |                                               |   |                   |   |         |   |         |   |  |   |         |   |  |   |        
|          
|          
|          
|          
|           | Operating earnings                             |                                               | $ | 110,925           |   |         | $ | 105,751 |   |  | $ | 342,214 |   |  | $ | 320,866 |  
|          
|          
|          
|          
|           | Operating earnings per share                   |                                               |   | .52               |   |         |   | .46     |   |  |   | 1.56    |   |  |   | 1.40    |  
|          
|          
|          
|          
|           | Return on average assets                       |                                               |   | 1.37              | % |         |   | 1.34    | % |  |   | 1.46    | % |  |   | 1.39    | %
|          
|          
|          
|          
|           | Return on average equity                       |                                               |   | 18.96             |   |         |   | 17.03   |   |  |   | 18.88   |   |  |   | 17.32   |  
|          
|          
|          
|          
|           | Net interest income to administrative expenses |                                               |   | 1.52              | x |         |   | 1.64    | x |  |   | 1.59    | x |  |   | 1.65    | x
|          
|          
|          
|          
|           | Administrative expenses to average assets      |                                               |   | 1.81              | % |         |   | 1.81    | % |  |   | 1.84    | % |  |   | 1.84    | %
|          
|          
|          
|          
|           | Efficiency ratio                               |                                               |   | 44.93             |   |         |   | 45.18   |   |  |   | 43.94   |   |  |   | 45.65   |  

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.
Average balances are calculated on a daily basis. 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. The cost of liabilities
includes the annualized effect of interest rate risk management
instruments.

7



---



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

|                                                                                |                               |                         |                                            |            |           |            |         |         |         |          |        |        |      |      |           |            |            |            |         |         |         |         |        |      |      |      | 
|------------------------------------------------------------------------------- | ----------------------------- | ----------------------- | ------------------------------------------ | ---------- | --------- | ---------- | ------- | ------- | ------- | -------- | ------ | ------ | ---- | ---- | --------- | ---------- | ---------- | ---------- | ------- | ------- | ------- | ------- | ------ | ---- | ---- | ---- | 
|                                                                                |                               |                        
|                                                                                |                               | Three Months Ended     
|                                                                                |                               |                        
|                                                                                |                               |                         |                                            |           
|                                                                                |                               | 9/30/00                 |                                            | 9/30/99   
|                                                                                |                               |                         |                                            |           
|                                                                                |                               |                         |                                            | Avg.       |           |            |         | Avg.   
|                                                                                |                               | Average                 |                                            |            |           | Yield/     |         | Average |         |          |        | Yield/
|                                                                                |                               | Balance                 |                                            | Interest   |           | Cost       |         | Balance |         | Interest |        | Cost  
|                                                                                |                               |                         |                                            |            |           |            |         |         |         |          |        |       
|                                                                                |                               |                        
|                                                                                |                               | (Dollars in thousands) 
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Interest-earning assets:                                                        |                               |                         |                                            |            |           |            |         |         |         |          |        |        |      |      |           |            |            |            |         |         |         |         |        |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Loans and leases              |                         | $                                          | 24,185,872 |           |            | $       | 462,766 |         |          |        | 7.64   | %    |      | $         | 22,656,483 |            |            | $       | 420,295 |         |         |        | 7.41 | %   
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Mortgage-backed securities:   |                         |                                            |            |           |            |         |         |         |          |        |        |      |      |           |            |            |            |         |         |         |         |        |      |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                               | Available for sale      |                                            |            | 3,631,734 |            |         |         | 66,222  |          |        |        | 7.29 |      |           |            | 3,491,780  |            |         |         | 58,909  |         |        |      | 6.75 |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                               | Held to maturity        |                                            |            | 1,634,755 |            |         |         | 29,442  |          |        |        | 7.20 |      |           |            | 2,083,367  |            |         |         | 35,629  |         |        |      | 6.84 |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Investment securities:        |                         |                                            |            |           |            |         |         |         |          |        |        |      |      |           |            |            |            |         |         |         |         |        |      |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                               | Trading                 |                                            |            |          |            |         |         |        |          |        |        |     |      |           |            | 14,040     |            |         |         | 147     |         |        |      | 4.19 |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                               | Available for sale      |                                            |            | 441,466   |            |         |         | 8,142   |          |        |        | 7.38 |      |           |            | 888,428    |            |         |         | 14,177  |         |        |      | 6.38 |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                               | Held to maturity        |                                            |            | 28,090    |            |         |         | 417     |          |        |        | 5.94 |      |           |            | 33,525     |            |         |         | 510     |         |        |      | 6.09 |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Other interest-earning assets |                         |                                            | 554,356    |           |            |         | 10,529  |         |          |        | 7.43   |      |      |           | 533,142    |            |            |         | 9,171   |         |         |        | 6.73 |     
|                                                                                |                               |                         |                                            |            |           |            |         |         |         |          |        |        |      |      |           |            |            |            |         |         |         |         |        |     
|                                                                                |                               |                         | Total interest-earning assets              |            |           | 30,476,273 |         |         |         | 577,518  |        |        |      | 7.57 |           |            |            | 29,700,765 |         |         |         | 538,838 |        |      |      | 7.24 | 
|                                                                                |                               |                         |                                            |            |           |            |         |         |         |          |        |        |      |      |           |            |            |            |         |         |         |         |        |     
|Allowance for loan and lease losses                                             |                               |                         | (186,036                                   | )          |           |            |         |         |         |          |        |        |      |      | (181,580  | )          |            |            |         |         |         |         |        |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Noninterest-earning assets                                                      |                               |                         | 2,184,945                                  |            |           |            |         |         |         |          |        |        |      |      | 1,955,911 |            |            |            |         |         |         |         |        |     
|                                                                                |                               |                         |                                            |            |           |            |         |         |         |          |        |        |      |      |           |            |            |            |         |         |         |         |        |     
|                                                                                |                               |                         | Total assets                               |            | $         | 32,475,182 |         |         |         |          |        |        |      |      |           |            | $          | 31,475,096 |         |         |         |         |        |      |      |      | 
|                                                                                |                               |                         |                                            |            |           |            |         |         |         |          |        |        |      |      |           |            |            |            |         |         |         |         |        |     
|Interest-bearing liabilities:                                                   |                               |                         |                                            |            |           |            |         |         |         |          |        |        |      |      |           |            |            |            |         |         |         |         |        |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Deposits:                     |                         |                                            |            |           |            |         |         |         |          |        |        |      |      |           |            |            |            |         |         |         |         |        |      |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                               | Checking accounts       |                                            | $          | 3,708,654 |            |         |         | 15,516  |          |        |        | 1.66 | %    |           | $          | 2,950,726  |            |         |         | 7,934   |         |        |      | 1.07 | %   
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                               | Savings accounts        |                                            |            | 1,521,419 |            |         |         | 5,877   |          |        |        | 1.54 |      |           |            | 2,252,240  |            |         |         | 10,845  |         |        |      | 1.91 |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                               | Money market accounts   |                                            |            | 3,959,127 |            |         |         | 39,554  |          |        |        | 3.97 |      |           |            | 3,278,637  |            |         |         | 26,474  |         |        |      | 3.20 |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                               | Certificates of deposit |                                            |            | 9,321,115 |            |         |         | 131,452 |          |        |        | 5.61 |      |           |            | 10,268,028 |            |         |         | 133,025 |         |        |      | 5.14 |     
|                                                                                |                               |                         |                                            |            |           |            |         |         |         |          |        |        |      |      |           |            |            |            |         |         |         |         |        |     
|                                                                                |                               |                         | Total deposits                             |            |           | 18,510,315 |         |         |         | 192,399  |        |        |      | 4.14 |           |            |            | 18,749,631 |         |         |         | 178,278 |        |      |      | 3.77 | 
|                                                                                |                               |                         |                                            |            |           |            |         |         |         |          |        |        |      |      |           |            |            |            |         |         |         |         |        |     
|                                                                                | FHLB advances                 |                         |                                            | 10,336,097 |           |            |         | 151,549 |         |          |        | 5.83   |      |      |           | 8,887,304  |            |            |         | 114,539 |         |         |        | 5.11 |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Other borrowings              |                         |                                            | 550,075    |           |            |         | 10,401  |         |          |        | 7.53   |      |      |           | 826,138    |            |            |         | 12,912  |         |         |        | 6.17 |     
|                                                                                |                               |                         |                                            |            |           |            |         |         |         |          |        |        |      |      |           |            |            |            |         |         |         |         |        |     
|                                                                                |                               |                         | Total borrowings                           |            |           | 10,886,172 |         |         |         | 161,950  |        |        |      | 5.91 |           |            |            | 9,713,442  |         |         |         | 127,451 |        |      |      | 5.20 | 
|                                                                                |                               |                         |                                            |            |           |            |         |         |         |          |        |        |      |      |           |            |            |            |         |         |         |         |        |     
|                                                                                |                               |                         | Total interest-bearing liabilities         |            |           | 29,396,487 |         |         |         | 354,349  |        |        |      | 4.79 |           |            |            | 28,463,073 |         |         |         | 305,729 |        |      |      | 4.26 | 
|                                                                                |                               |                         |                                            |            |           |            |         |         |         |          |        |        |      |      |           |            |            |            |         |         |         |         |        |     
|Noninterest-bearing liabilities                                                 |                               |                         | 738,021                                    |            |           |            |         |         |         |          |        |        |      |      | 528,320   |            |            |            |         |         |         |         |        |     
|                                                                                |                               |                         |                                            |            |           |            |         |         |         |          |        |        |      |      |           |            |            |            |         |         |         |         |        |     
|                                                                                |                               |                         | Total liabilities                          |            |           | 30,134,508 |         |         |         |          |        |        |      |      |           |            |            | 28,991,393 |         |         |         |         |        |      |      |      | 
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Shareholders equity                                                            |                               |                         | 2,340,674                                  |            |           |            |         |         |         |          |        |        |      |      | 2,483,703 |            |            |            |         |         |         |         |        |     
|                                                                                |                               |                         |                                            |            |           |            |         |         |         |          |        |        |      |      |           |            |            |            |         |         |         |         |        |     
|                                                                                |                               |                         | Total liabilities and shareholders equity |            | $         | 32,475,182 |         |         |         |          |        |        |      |      |           |            | $          | 31,475,096 |         |         |         |         |        |      |      |      | 
|                                                                                |                               |                         |                                            |            |           |            |         |         |         |          |        |        |      |      |           |            |            |            |         |         |         |         |        |     
|Net interest income                                                             |                               |                         |                                            |            |           | $          | 223,169 |         |         |          |        |        |      |      |           |            |            | $          | 233,109 |         |         |         |        |     
|                                                                                |                               |                         |                                            |            |           |            |         |         |         |          |        |        |      |      |           |            |            |            |         |         |         |         |        |     
|Interest rate spread                                                            |                               |                         |                                            |            |           |            |         |         |         |          | 2.78   |        |      |      |           |            |            |            |         |         |         |         | 2.98   |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Net yield on average interest-earning assets                                    |                               |                         |                                            |            |           |            |         |         |         |          | 2.93   |        |      |      |           |            |            |            |         |         |         |         | 3.14   |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Average interest-earning assets to average interest-bearing
        liabilities |                               |                         |                                            |            |           |            |         |         |         |          | 103.67 | %      |      |      |           |            |            |            |         |         |         |         | 104.35 | %   

8



---



|                                                                                |                               |                         |                                            |            |           |            |         |           |         |           |        |        |       |      |           |            |            |            |         |           |         |           |        |      |      |      | 
|------------------------------------------------------------------------------- | ----------------------------- | ----------------------- | ------------------------------------------ | ---------- | --------- | ---------- | ------- | --------- | ------- | --------- | ------ | ------ | ----- | ---- | --------- | ---------- | ---------- | ---------- | ------- | --------- | ------- | --------- | ------ | ---- | ---- | ---- | 
|                                                                                |                               |                        
|                                                                                |                               | Nine Months Ended      
|                                                                                |                               |                        
|                                                                                |                               |                         |                                            |           
|                                                                                |                               | 9/30/00                 |                                            | 9/30/99   
|                                                                                |                               |                         |                                            |           
|                                                                                |                               |                         |                                            | Avg.       |           |            |         | Avg.     
|                                                                                |                               | Average                 |                                            |            |           | Yield/     |         | Average   |         |           |        | Yield/
|                                                                                |                               | Balance                 |                                            | Interest   |           | Cost       |         | Balance   |         | Interest  |        | Cost  
|                                                                                |                               |                         |                                            |            |           |            |         |           |         |           |        |       
|                                                                                |                               |                        
|                                                                                |                               | (Dollars in thousands) 
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Interest-earning assets:                                                        |                               |                         |                                            |            |           |            |         |           |         |           |        |        |       |      |           |            |            |            |         |           |         |           |        |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Loans and leases              |                         | $                                          | 23,605,514 |           |            | $       | 1,337,985 |         |           |        | 7.56   | %     |      | $         | 22,556,299 |            |            | $       | 1,257,160 |         |           |        | 7.44 | %   
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Mortgage-backed securities:   |                         |                                            |            |           |            |         |           |         |           |        |        |       |      |           |            |            |            |         |           |         |           |        |      |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                               | Available for sale      |                                            |            | 3,180,808 |            |         |           | 171,761 |           |        |        | 7.20  |      |           |            | 3,036,018  |            |         |           | 151,903 |           |        |      | 6.67 |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                               | Held to maturity        |                                            |            | 1,741,174 |            |         |           | 92,704  |           |        |        | 7.10  |      |           |            | 2,352,585  |            |         |           | 121,459 |           |        |      | 6.88 |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Investment securities:        |                         |                                            |            |           |            |         |           |         |           |        |        |       |      |           |            |            |            |         |           |         |           |        |      |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                               | Trading                 |                                            |            | 244       |            |         |           | 38      |           |        |        | 20.63 |      |           |            | 7,240      |            |         |           | 205     |           |        |      | 3.77 |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                               | Available for sale      |                                            |            | 461,581   |            |         |           | 25,355  |           |        |        | 7.32  |      |           |            | 601,009    |            |         |           | 27,100  |           |        |      | 6.01 |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                               | Held to maturity        |                                            |            | 30,961    |            |         |           | 1,261   |           |        |        | 5.43  |      |           |            | 40,612     |            |         |           | 1,883   |           |        |      | 6.18 |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Other interest-earning assets |                         |                                            | 520,611    |           |            |         | 28,082    |         |           |        | 7.09   |       |      |           | 569,330    |            |            |         | 27,346    |         |           |        | 6.33 |     
|                                                                                |                               |                         |                                            |            |           |            |         |           |         |           |        |        |       |      |           |            |            |            |         |           |         |           |        |     
|                                                                                |                               |                         | Total interest-earning assets              |            |           | 29,540,893 |         |           |         | 1,657,186 |        |        |       | 7.48 |           |            |            | 29,163,093 |         |           |         | 1,587,056 |        |      |      | 7.26 | 
|                                                                                |                               |                         |                                            |            |           |            |         |           |         |           |        |        |       |      |           |            |            |            |         |           |         |           |        |     
|Allowance for loan and lease losses                                             |                               |                         | (184,903                                   | )          |           |            |         |           |         |           |        |        |       |      | (182,181  | )          |            |            |         |           |         |           |        |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Noninterest-earning assets                                                      |                               |                         | 1,987,550                                  |            |           |            |         |           |         |           |        |        |       |      | 1,866,285 |            |            |            |         |           |         |           |        |     
|                                                                                |                               |                         |                                            |            |           |            |         |           |         |           |        |        |       |      |           |            |            |            |         |           |         |           |        |     
|                                                                                |                               |                         | Total assets                               |            | $         | 31,343,540 |         |           |         |           |        |        |       |      |           |            | $          | 30,847,197 |         |           |         |           |        |      |      |      | 
|                                                                                |                               |                         |                                            |            |           |            |         |           |         |           |        |        |       |      |           |            |            |            |         |           |         |           |        |     
|Interest-bearing liabilities:                                                   |                               |                         |                                            |            |           |            |         |           |         |           |        |        |       |      |           |            |            |            |         |           |         |           |        |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Deposits:                     |                         |                                            |            |           |            |         |           |         |           |        |        |       |      |           |            |            |            |         |           |         |           |        |      |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                               | Checking accounts       |                                            | $          | 3,600,759 |            |         |           | 40,479  |           |        |        | 1.50  | %    |           | $          | 2,933,106  |            |         |           | 20,255  |           |        |      | .92  | %   
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                               | Savings accounts        |                                            |            | 1,753,507 |            |         |           | 20,205  |           |        |        | 1.54  |      |           |            | 2,420,372  |            |         |           | 36,077  |           |        |      | 1.99 |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                               | Money market accounts   |                                            |            | 3,661,626 |            |         |           | 103,023 |           |        |        | 3.76  |      |           |            | 3,031,878  |            |         |           | 74,509  |           |        |      | 3.29 |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                |                               | Certificates of deposit |                                            |            | 9,733,695 |            |         |           | 390,615 |           |        |        | 5.36  |      |           |            | 10,470,567 |            |         |           | 407,246 |           |        |      | 5.20 |     
|                                                                                |                               |                         |                                            |            |           |            |         |           |         |           |        |        |       |      |           |            |            |            |         |           |         |           |        |     
|                                                                                |                               |                         | Total deposits                             |            |           | 18,749,587 |         |           |         | 554,322   |        |        |       | 3.95 |           |            |            | 18,855,923 |         |           |         | 538,087   |        |      |      | 3.82 | 
|                                                                                |                               |                         |                                            |            |           |            |         |           |         |           |        |        |       |      |           |            |            |            |         |           |         |           |        |     
|                                                                                | FHLB advances                 |                         |                                            | 9,285,482  |           |            |         | 390,673   |         |           |        | 5.61   |       |      |           | 8,239,890  |            |            |         | 311,535   |         |           |        | 5.05 |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Other borrowings              |                         |                                            | 414,585    |           |            |         | 23,986    |         |           |        | 7.68   |       |      |           | 742,448    |            |            |         | 35,603    |         |           |        | 6.35 |     
|                                                                                |                               |                         |                                            |            |           |            |         |           |         |           |        |        |       |      |           |            |            |            |         |           |         |           |        |     
|                                                                                |                               |                         | Total borrowings                           |            |           | 9,700,067  |         |           |         | 414,659   |        |        |       | 5.70 |           |            |            | 8,982,338  |         |           |         | 347,138   |        |      |      | 5.16 | 
|                                                                                |                               |                         |                                            |            |           |            |         |           |         |           |        |        |       |      |           |            |            |            |         |           |         |           |        |     
|                                                                                |                               |                         | Total interest-bearing liabilities         |            |           | 28,449,654 |         |           |         | 968,981   |        |        |       | 4.55 |           |            |            | 27,838,261 |         |           |         | 885,225   |        |      |      | 4.25 | 
|                                                                                |                               |                         |                                            |            |           |            |         |           |         |           |        |        |       |      |           |            |            |            |         |           |         |           |        |     
|Noninterest-bearing liabilities                                                 |                               |                         | 476,946                                    |            |           |            |         |           |         |           |        |        |       |      | 538,742   |            |            |            |         |           |         |           |        |     
|                                                                                |                               |                         |                                            |            |           |            |         |           |         |           |        |        |       |      |           |            |            |            |         |           |         |           |        |     
|                                                                                |                               |                         | Total liabilities                          |            |           | 28,926,600 |         |           |         |           |        |        |       |      |           |            |            | 28,377,003 |         |           |         |           |        |      |      |      | 
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Shareholders equity                                                            |                               |                         | 2,416,940                                  |            |           |            |         |           |         |           |        |        |       |      | 2,470,194 |            |            |            |         |           |         |           |        |     
|                                                                                |                               |                         |                                            |            |           |            |         |           |         |           |        |        |       |      |           |            |            |            |         |           |         |           |        |     
|                                                                                |                               |                         | Total liabilities and shareholders equity |            | $         | 31,343,540 |         |           |         |           |        |        |       |      |           |            | $          | 30,847,197 |         |           |         |           |        |      |      |      | 
|                                                                                |                               |                         |                                            |            |           |            |         |           |         |           |        |        |       |      |           |            |            |            |         |           |         |           |        |     
|Net interest income                                                             |                               |                         |                                            |            |           | $          | 688,205 |           |         |           |        |        |       |      |           |            |            | $          | 701,831 |           |         |           |        |     
|                                                                                |                               |                         |                                            |            |           |            |         |           |         |           |        |        |       |      |           |            |            |            |         |           |         |           |        |     
|Interest rate spread                                                            |                               |                         |                                            |            |           |            |         |           |         |           | 2.93   |        |       |      |           |            |            |            |         |           |         |           | 3.01   |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Net yield on average interest-earning assets                                    |                               |                         |                                            |            |           |            |         |           |         |           | 3.11   |        |       |      |           |            |            |            |         |           |         |           | 3.21   |     
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Average interest-earning assets to average interest-bearing
        liabilities |                               |                         |                                            |            |           |            |         |           |         |           | 103.84 | %      |       |      |           |            |            |            |         |           |         |           | 104.76 | %   

9



---



Figure 3 sets forth the approximate relative contribution of
changes in average interest rates and volume to changes in net
interest income for the periods indicated. Changes not solely
attributable to volume or rate have been allocated in proportion
to the changes due to volume and rate.

Rate/ Volume Analysis (Figure 3)

|                              |                               |                                  |         |                                 |       |        |       |                            |        |        |        |        |        |        |         |        |        |        |        |         |         |        |         |         |         |        | 
|----------------------------- | ----------------------------- | -------------------------------- | ------- | ------------------------------- | ----- | ------ | ----- | -------------------------- | ------ | ------ | ------ | ------ | ------ | ------ | ------- | ------ | ------ | ------ | ------ | ------- | ------- | ------ | ------- | ------- | ------- | ------ | 
|                              |                               |                                  |         |                                
|                              |                               | Three Months Ended September 30, |         | Nine Months Ended September 30,
|                              |                               |                                  |         |                                
|                              |                               |                                  |         |                                
|                              |                               | 2000 v. 1999                     |         | 2000 v. 1999                   
|                              |                               |                                  |         |                                
|                              |                               |                                  |         |                                
|                              |                               | Increase (decrease) due to       |         |                                 |       |        |       | Increase (decrease) due to
|                              |                               |                                  |         |                                 |       |        |       |                           
|                              |                               | Rate                             |         | Volume                          |       | Total  |       | Rate                       |        | Volume |        | Total 
|                              |                               |                                  |         |                                 |       |        |       |                            |        |        |        |       
|                              |                               |                                 
|                              |                               | (Dollars in thousands)          
|                             
|                             
|                             
|                             
|Interest income:              |                               |                                  |         |                                 |       |        |       |                            |        |        |        |        |        |        |         |        |        |        |        |         |         |        |         |        
|                             
|                             
|                             
|                             
|                              | Loans and leases              |                                  | $       | 12,131                          |       |        | $     | 30,340                     |        |        | $      | 42,471 |        |        | $       | 17,900 |        |        | $      | 62,925  |         |        | $       | 80,825  |        
|                             
|                             
|                             
|                             
|                              | Mortgage-backed securities:   |                                  |         |                                 |       |        |       |                            |        |        |        |        |        |        |         |        |        |        |        |         |         |        |         |         |        
|                             
|                             
|                             
|                             
|                              |                               | Available for sale               |         |                                 | 4,889 |        |       |                            | 2,424  |        |        |        | 7,313  |        |         |        | 12,397 |        |        |         | 7,461   |        |         |         | 19,858  |       
|                             
|                             
|                             
|                             
|                              |                               | Held to maturity                 |         |                                 | 1,812 |        |       |                            | (7,999 | )      |        |        | (6,187 | )      |         |        | 3,692  |        |        |         | (32,447 | )      |         |         | (28,755 | )     
|                             
|                             
|                             
|                             
|                              | Investment securities:        |                                  |         |                                 |       |        |       |                            |        |        |        |        |        |        |         |        |        |        |        |         |         |        |         |         |        
|                             
|                             
|                             
|                             
|                              |                               | Trading                          |         |                                 | (89   | )      |       |                            | (58    | )      |        |        | (147   | )      |         |        | 915    |        |        |         | (1,082  | )      |         |         | (167    | )     
|                             
|                             
|                             
|                             
|                              |                               | Available for sale               |         |                                 | 1,945 |        |       |                            | (7,980 | )      |        |        | (6,035 | )      |         |        | 5,249  |        |        |         | (6,994  | )      |         |         | (1,745  | )     
|                             
|                             
|                             
|                             
|                              |                               | Held to maturity                 |         |                                 | (12   | )      |       |                            | (81    | )      |        |        | (93    | )      |         |        | (211   | )      |        |         | (411    | )      |         |         | (622    | )     
|                             
|                             
|                             
|                             
|                              | Other interest-earning assets |                                  |         | 982                             |       |        |       | 376                        |        |        |        | 1,358  |        |        |         | 3,200  |        |        |        | (2,464  | )       |        |         | 736     |        
|                              |                               |                                  |         |                                 |       |        |       |                            |        |        |        |        |        |        |         |        |        |        |        |         |         |        |         |        
|                              |                               |                                  | Total   |                                 |       | 21,658 |       |                            |        | 17,022 |        |        |        | 38,680 |         |        |        | 43,142 |        |         |         | 26,988 |         |         |         | 70,130 | 
|                              |                               |                                  |         |                                 |       |        |       |                            |        |        |        |        |        |        |         |        |        |        |        |         |         |        |         |        
|Interest expense:             |                               |                                  |         |                                 |       |        |       |                            |        |        |        |        |        |        |         |        |        |        |        |         |         |        |         |        
|                             
|                             
|                             
|                             
|                              | Checking accounts             |                                  |         | 5,190                           |       |        |       | 2,392                      |        |        |        | 7,582  |        |        |         | 14,840 |        |        |        | 5,384   |         |        |         | 20,224  |        
|                             
|                             
|                             
|                             
|                              | Savings accounts              |                                  |         | (1,885                          | )     |        |       | (3,083                     | )      |        |        | (4,968 | )      |        |         | (7,165 | )      |        |        | (8,707  | )       |        |         | (15,872 | )      
|                             
|                             
|                             
|                             
|                              | Money market accounts         |                                  |         | 6,987                           |       |        |       | 6,093                      |        |        |        | 13,080 |        |        |         | 11,711 |        |        |        | 16,803  |         |        |         | 28,514  |        
|                             
|                             
|                             
|                             
|                              | Certificates of deposit       |                                  |         | 11,232                          |       |        |       | (12,805                    | )      |        |        | (1,573 | )      |        |         | 12,665 |        |        |        | (29,296 | )       |        |         | (16,631 | )      
|                             
|                             
|                             
|                             
|                              | FHLB advances                 |                                  |         | 16,913                          |       |        |       | 20,097                     |        |        |        | 37,010 |        |        |         | 36,630 |        |        |        | 42,508  |         |        |         | 79,138  |        
|                             
|                             
|                             
|                             
|                              | Other borrowings              |                                  |         | (558                            | )     |        |       | (1,953                     | )      |        |        | (2,511 | )      |        |         | (173   | )      |        |        | (11,444 | )       |        |         | (11,617 | )      
|                              |                               |                                  |         |                                 |       |        |       |                            |        |        |        |        |        |        |         |        |        |        |        |         |         |        |         |        
|                              |                               |                                  | Total   |                                 |       | 37,879 |       |                            |        | 10,741 |        |        |        | 48,620 |         |        |        | 68,508 |        |         |         | 15,248 |         |         |         | 83,756 | 
|                              |                               |                                  |         |                                 |       |        |       |                            |        |        |        |        |        |        |         |        |        |        |        |         |         |        |         |        
|Change in net interest income |                               | $                                | (16,221 | )                               |       | $      | 6,281 |                            |        | $      | (9,940 | )      |        | $      | (25,366 | )      |        | $      | 11,740 |         |         | $      | (13,626 | )      
|                              |                               |                                  |         |                                 |       |        |       |                            |        |        |        |        |        |        |         |        |        |        |        |         |         |        |         |        

Our net interest income for the three months ended
September 30, 2000 was $223.2 million, a decrease of
$9.9 million from the three months ended September 30,
1999. The net yield on interest-earning assets during the third
quarter of 2000 declined to 2.93% from 3.14% for the comparable
period of 1999, reflecting in part, our stock buyback program.
Additionally, as reflected in Figure 4, the net yield on
interest-earning assets at September 30, 2000 declined to
2.85% from 3.19% at December 31, 1999. The compression in
the net yield on interest-earning assets is primarily attributed
to the fact that our liabilities have repriced more quickly than
our assets. Interest rates have risen considerably over the past
year. This increase has been accompanied by a flattening of the
yield curve. Given this interest rate environment, management
has decided to slow balance sheet growth, with particular
emphasis on accelerating the shift away from residential loans
and securities by selling more of those portfolios. Instead,
balance sheet capacity will be preserved for a more favorable
interest rate environment, and existing capital will be
allocated to our stock buyback program. Based on the current
interest rate environment and repricing trends, management
anticipates the net interest margin will stabilize by the end of
the fourth quarter of 2000. Our production level of higher
yielding and shorter term consumer and commercial loans has
reached the level where it can provide for future balance sheet
growth and improvement in net interest income. See Figure 6 for
a summary of our loan and lease originations.

Our net interest income for the nine months ended
September 30, 2000 was $688.2 million, a decrease of
$13.6 million from the nine months ended September 30,
1999. The net yield on average interest-earning assets decreased
by ten basis points during the nine months ended
September 30, 2000 to 3.11% from 3.21% in the comparable
period of 1999. The reasons for the decrease in the net yield on
average interest-earning assets are substantially the same as
for the third quarter results discussed in the above paragraph.

Figure 4 sets forth Charter Ones yields and costs at
period end for the dates indicated. The yields on leases
excludes the impact of the related tax benefit. The cost of
liabilities includes the annualized effect of interest rate risk
management instruments.

10



---



Yields and Costs at End of Period(Figure 4)

|                                     |                               |                               |                                    |          |      |      |      |      |      |      | 
|------------------------------------ | ----------------------------- | ----------------------------- | ---------------------------------- | -------- | ---- | ---- | ---- | ---- | ---- | ---- | 
|                                     |                               | 9/30/00                       |                                    | 12/31/99
|                                     |                               |                               |                                    |         
|Weighted average yield:              |                               |                               |                                    |          |      |      |      |     
|                                    
|                                    
|                                    
|                                    
|                                     | Real estate loans             |                               |                                    | 7.41     | %    |      |      | 7.28 | %   
|                                    
|                                    
|                                    
|                                    
|                                     | Automobile loans              |                               |                                    | 8.62     |      |      |      | 8.52 |     
|                                    
|                                    
|                                    
|                                    
|                                     | Retail consumer loans         |                               |                                    | 7.99     |      |      |      | 7.93 |     
|                                    
|                                    
|                                    
|                                    
|                                     | Leases                        |                               |                                    | 6.28     |      |      |      | 6.08 |     
|                                    
|                                    
|                                    
|                                    
|                                     | Corporate banking loans       |                               |                                    | 8.91     |      |      |      | 8.58 |     
|                                    
|                                    
|                                    
|                                    
|                                     |                               | Total loans and leases        |                                    |          | 7.66 |      |      |      | 7.53 |     
|                                    
|                                    
|                                    
|                                    
|                                     | Mortgage-backed securities    |                               |                                    | 7.24     |      |      |      | 7.04 |     
|                                    
|                                    
|                                    
|                                    
|                                     | Investment securities         |                               |                                    | 7.39     |      |      |      | 7.26 |     
|                                    
|                                    
|                                    
|                                    
|                                     | Other interest-earning assets |                               |                                    | 7.44     |      |      |      | 6.97 |     
|                                    
|                                    
|                                    
|                                    
|                                     |                               | Total interest-earning assets |                                    |          | 7.58 |      |      |      | 7.41 |     
|                                    
|                                    
|                                    
|                                    
|Weighted average cost:               |                               |                               |                                    |          |      |      |      |     
|                                    
|                                    
|                                    
|                                    
|                                     | Checking                      |                               |                                    | 1.66     |      |      |      | 1.27 |     
|                                    
|                                    
|                                    
|                                    
|                                     | Money market                  |                               |                                    | 4.26     |      |      |      | 3.41 |     
|                                    
|                                    
|                                    
|                                    
|                                     | Savings                       |                               |                                    | 1.54     |      |      |      | 1.61 |     
|                                    
|                                    
|                                    
|                                    
|                                     | Certificates of deposit       |                               |                                    | 5.73     |      |      |      | 5.13 |     
|                                    
|                                    
|                                    
|                                    
|                                     |                               | Total deposits                |                                    |          | 4.27 |      |      |      | 3.79 |     
|                                    
|                                    
|                                    
|                                    
|                                     | FHLB advances                 |                               |                                    | 5.77     |      |      |      | 5.32 |     
|                                    
|                                    
|                                    
|                                    
|                                     | Other borrowings              |                               |                                    | 7.06     |      |      |      | 6.99 |     
|                                    
|                                    
|                                    
|                                    
|                                     |                               |                               | Total interest-bearing liabilities |          |      | 4.88 |      |      |      | 4.34 | 
|                                    
|                                    
|                                    
|                                    
|Interest rate spread                 |                               |                               | 2.70                               |          |      |      | 3.07 |     
|                                    
|                                    
|                                    
|                                    
|Net yield on interest-earning assets |                               |                               | 2.85                               | %        |      |      | 3.19 | %   

Other Income

Other income for the three months ended September 30, 2000
was $99.8 million, an increase of $27.7 million, or
38.4%, over the $72.1 million for the three months ended
September 30, 1999. The increase was primarily attributable
to income from retail banking. Retail banking income increased
$15.1 million, or 30.7%, over the comparable period in
1999. Growth in income from retail banking continues to be
driven by recent mergers, account acquisition in mature markets
and continual product development.

Other income for the nine months ended September 30, 2000
was $281.3 million, an increase of $62.8 million, or
28.7%, over the $218.5 million for the nine months ended
September 30, 1999. The increase was primarily attributable
to income from retail banking, leasing operations, and the BOLI
program. The reasons for the increase in income from retail
banking are substantially the same as for the third quarter
results discussed in the above paragraph. Income from leasing
operations increased $6.2 million, primarily driven by
residual values on underlying equipment realized upon
termination of leases. The increase in the line item
other was primarily attributable to the BOLI
program. During the year ended December 31, 1999, we
increased our BOLI portfolio by $630.0 million. The related
income on the BOLI asset increased $12.3 million over the
comparable period in 1999 and is the primary reason for the
increase in the line item other.

Administrative Expenses

Administrative expenses were $148.6 million for the three
months ended September 30, 2000, an increase of
$4.6 million, or 3.2%, as compared to the third quarter of
1999. Each year included merger-related expenses. There were
$2.0 million of merger-related expenses recorded in the
three months ended September 30, 2000, and
$1.9 million for the three months ended September 30,
1999. Excluding these merger-related charges, our administrative
expenses were $146.7 million for the three months ended
September 30, 2000 and $142.1 million for the three
months ended September 30, 1999. This resulted in a
comparable ratio of administrative expenses to average assets
(excluding the merger-related charges) of 1.81% for both the
three months ended September 30, 2000 and 1999,
respectively. Our efficiency ratio (excluding the merger-related
charges) was 44.93% for the three months ended
September 30, 2000, an improvement when compared to 45.18%
for the three months ended September 30, 1999. See the
above discussion in Other Income regarding
additional factors that contributed to the improvement in our
efficiency ratio.

11



---



Administrative expenses were $458.9 million for the nine
months ended September 30, 2000, an increase of
$26.5 million, or 6.1%, as compared to the nine months
ended September 30, 1999. Each year included merger-related
expenses. There were $26.1 million of merger-related
expenses recorded in the nine months ended September 30,
2000, and $7.6 million for the nine months ended
September 30, 1999. Excluding these merger-related charges,
our administrative expenses were $432.8 million for the
nine months ended September 30, 2000 and
$424.7 million for the nine months ended September 30,
1999. This resulted in a comparable ratio of administrative
expenses to average assets (excluding the merger-related
charges) of 1.84% for both the nine months ended
September 30, 2000 and 1999, respectively. Our efficiency
ratio (excluding the merger-related charges) was 43.94% for the
nine months ended September 30, 2000, an improvement when
compared to 45.65% for the nine months ended September 30,
1999. See the above discussion in Other Income
regarding additional factors that contributed to the improvement
in our efficiency ratio.

Federal Income Taxes

Federal income tax expense for the three months ended
September 30, 2000 was $51.6 million, as compared to
$49.4 million for the same period in 1999. The primary
reason for this 4.5% increase in the provision for federal
income taxes was a 4.7% increase in pre-tax book income. The
effective tax rate was 32.0% for the 2000 period and 32.1% for
the comparable 1999 period.

Federal income tax expense for the nine months ended
September 30, 2000 was $152.8 million, as compared to
$150.2 million for the same period in 1999. The effective
tax rates were 32.0% and 32.2% for the 2000 and 1999 periods,
respectively.

FINANCIAL CONDITION

Overview

At September 30, 2000, total assets were
$32.8 billion, as compared to total assets of
$31.8 billion at December 31, 1999. Contributing to
the increase in total assets was the growth in our loan
portfolio since December 31, 1999. Figure 5 illustrates our
continued emphasis in originating consumer and commercial loans
due to the higher yields and shorter terms provided by these
types of loans.

12



---



Loans and Leases

Composition of Loans and Leases(Figure 5)

|                                       |                                                             |                        |                       |            |           |            |            |            |           |            | 
|-------------------------------------- | ----------------------------------------------------------- | ---------------------- | --------------------- | ---------- | --------- | ---------- | ---------- | ---------- | --------- | ---------- | 
|                                       |                                                             | 9/30/00                |                       | 12/31/99  
|                                       |                                                             |                        |                       |           
|                                       |                                                             |                       
|                                       |                                                             | (Dollars in thousands)
|                                      
|                                      
|                                      
|                                      
|Loan and lease portfolio, net          |                                                             |                        |                       |            |           |            |            |           
|                                      
|                                      
|                                      
|                                      
|                                       | One-to-four family:                                         |                        |                       |            |           |            |            |            |          
|                                      
|                                      
|                                      
|                                      
|                                       |                                                             | Permanent:             |                       |            |           |            |            |            |           |           
|                                      
|                                      
|                                      
|                                      
|                                       |                                                             |                        | Fixed rate            |            | $         | 4,666,771  |            |            | $         | 5,755,393  | 
|                                      
|                                      
|                                      
|                                      
|                                       |                                                             |                        | Adjustable rate       |            |           | 6,373,274  |            |            |           | 5,703,042  | 
|                                      
|                                      
|                                      
|                                      
|                                       |                                                             | Construction           |                       |            | 325,385   |            |            |            | 276,172   |           
|                                       |                                                             |                        |                       |            |           |            |            |           
|                                       |                                                             |                        | 11,365,430            |            |           |            | 11,734,607 |           
|                                       |                                                             |                        |                       |            |           |            |            |           
|                                       | Commercial real estate:                                     |                        |                       |            |           |            |            |            |          
|                                      
|                                      
|                                      
|                                      
|                                       |                                                             | Multifamily            |                       |            | 1,181,941 |            |            |            | 1,276,004 |           
|                                      
|                                      
|                                      
|                                      
|                                       |                                                             | Other                  |                       |            | 849,999   |            |            |            | 673,972   |           
|                                       |                                                             |                        |                       |            |           |            |            |           
|                                       |                                                             |                        | 2,031,940             |            |           |            | 1,949,976  |           
|                                       |                                                             |                        |                       |            |           |            |            |           
|                                       | Consumer:                                                   |                        |                       |            |           |            |            |            |          
|                                      
|                                      
|                                      
|                                      
|                                       |                                                             | Retail                 |                       |            | 5,411,900 |            |            |            | 4,502,023 |           
|                                      
|                                      
|                                      
|                                      
|                                       |                                                             | Automobile             |                       |            | 3,002,714 |            |            |            | 2,497,956 |           
|                                       |                                                             |                        |                       |            |           |            |            |           
|                                       |                                                             |                        | 8,414,614             |            |           |            | 6,999,979  |           
|                                       |                                                             |                        |                       |            |           |            |            |           
|                                       | Business:                                                   |                        |                       |            |           |            |            |            |          
|                                      
|                                      
|                                      
|                                      
|                                       |                                                             | Leasing                |                       |            | 1,583,840 |            |            |            | 1,137,895 |           
|                                      
|                                      
|                                      
|                                      
|                                       |                                                             | Corporate banking      |                       |            | 731,080   |            |            |            | 676,793   |           
|                                       |                                                             |                        |                       |            |           |            |            |           
|                                       |                                                             |                        | 2,314,920             |            |           |            | 1,814,688  |           
|                                       |                                                             |                        |                       |            |           |            |            |           
|                                       | Loans and leases before allowance for loan and lease losses |                        |                       | 24,126,904 |           |            |            | 22,499,250 |          
|                                      
|                                      
|                                      
|                                      
|                                       | Allowance for loan and lease losses                         |                        |                       | (189,583   | )         |            |            | (186,400   | )        
|                                       |                                                             |                        |                       |            |           |            |            |           
|                                       |                                                             |                        | Loans and leases, net |            | $         | 23,937,321 |            |            | $         | 22,312,850 | 
|                                       |                                                             |                        |                       |            |           |            |            |           
|Portfolio of loans serviced for others |                                                             | $                      | 12,568,760            |            |           | $          | 10,798,563 |           
|                                       |                                                             |                        |                       |            |           |            |            |           

Loan and Lease Activity(Figure 6)

|                                |                                                |                    |                                      |                                    |           |           |           |           |           |           |           |           |           |           |           |           |           |           |           | 
|------------------------------- | ---------------------------------------------- | ------------------ | ------------------------------------ | ---------------------------------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | 
|                                |                                                |                    |                                      |                                   
|                                |                                                | Three Months Ended |                                      | Nine Months Ended                 
|                                |                                                |                    |                                      |                                   
|                                |                                                | 9/30/00            |                                      | 9/30/99                            |           | 9/30/00   |           | 9/30/99  
|                                |                                                |                    |                                      |                                    |           |           |           |          
|                                |                                                |                    |                                      |                                    |           |          
|                                |                                                |                    |                                      | (Dollars in thousands)             |           |          
|                               
|                               
|                               
|                               
|Originations:                   |                                                |                    |                                      |                                    |           |           |           |           |           |           |           |           |           |           |           |          
|                               
|                               
|                               
|                               
|Real estate:                    |                                                |                    |                                      |                                    |           |           |           |           |           |           |           |           |           |           |           |          
|                               
|                               
|                               
|                               
|                                | Permanent:                                     |                    |                                      |                                    |           |           |           |           |           |           |           |           |           |           |           |           |          
|                               
|                               
|                               
|                               
|                                |                                                | One-to-four family |                                      | $                                  | 1,381,679 |           |           | $         | 1,305,158 |           |           | $         | 3,796,381 |           |           | $         | 3,997,780 |          
|                               
|                               
|                               
|                               
|                                |                                                | Multifamily        |                                      |                                    | 15,380    |           |           |           | 48,265    |           |           |           | 29,636    |           |           |           | 192,464   |          
|                               
|                               
|                               
|                               
|                                |                                                | Commercial         |                                      |                                    | 61,687    |           |           |           | 51,946    |           |           |           | 171,224   |           |           |           | 186,988   |          
|                                |                                                |                    |                                      |                                    |           |           |           |           |           |           |           |           |           |           |           |          
|                                |                                                |                    | Total permanent loans                |                                    |           | 1,458,746 |           |           |           | 1,405,369 |           |           |           | 3,997,241 |           |           |           | 4,377,232 |          
|                                |                                                |                    |                                      |                                    |           |           |           |           |           |           |           |           |           |           |           |          
|                                | Construction:                                  |                    |                                      |                                    |           |           |           |           |           |           |           |           |           |           |           |           |          
|                               
|                               
|                               
|                               
|                                |                                                | One-to-four family |                                      |                                    | 173,190   |           |           |           | 149,410   |           |           |           | 441,707   |           |           |           | 412,045   |          
|                               
|                               
|                               
|                               
|                                |                                                | Multifamily        |                                      |                                    | 23,494    |           |           |           | 10,742    |           |           |           | 67,357    |           |           |           | 52,692    |          
|                               
|                               
|                               
|                               
|                                |                                                | Commercial         |                                      |                                    | 31,036    |           |           |           | 23,002    |           |           |           | 83,820    |           |           |           | 74,360    |          
|                                |                                                |                    |                                      |                                    |           |           |           |           |           |           |           |           |           |           |           |          
|                                |                                                |                    | Total construction loans             |                                    |           | 227,720   |           |           |           | 183,154   |           |           |           | 592,884   |           |           |           | 539,097   |          
|                                |                                                |                    |                                      |                                    |           |           |           |           |           |           |           |           |           |           |           |          
|                                |                                                |                    |                                      | Total real estate loans originated |           |           | 1,686,466 |           |           |           | 1,588,523 |           |           |           | 4,590,125 |           |           |           | 4,916,329 | 
|                                |                                                |                    |                                      |                                    |           |           |           |           |           |           |           |           |           |           |           |          
|Retail consumer                 |                                                |                    | 690,608                              |                                    |           |           | 605,607   |           |           |           | 1,895,425 |           |           |           | 1,887,073 |          
|                               
|                               
|                               
|                               
|Automobile                      |                                                |                    | 597,303                              |                                    |           |           | 346,391   |           |           |           | 1,341,498 |           |           |           | 1,087,495 |          
|                               
|                               
|                               
|                               
|Leases                          |                                                |                    | 258,647                              |                                    |           |           | 190,814   |           |           |           | 566,146   |           |           |           | 323,334   |          
|                               
|                               
|                               
|                               
|Corporate banking               |                                                |                    | 211,515                              |                                    |           |           | 171,127   |           |           |           | 569,747   |           |           |           | 468,345   |          
|                                |                                                |                    |                                      |                                    |           |           |           |           |           |           |           |           |           |           |           |          
|                                |                                                |                    | Total loans and leases originated    |                                    |           | 3,444,539 |           |           |           | 2,902,462 |           |           |           | 8,962,941 |           |           |           | 8,682,576 |          
|                                |                                                |                    |                                      |                                    |           |           |           |           |           |           |           |           |           |           |           |          
|Loans purchased                 |                                                |                    | 8,984                                |                                    |           |           | 4,767     |           |           |           | 16,890    |           |           |           | 376,770   |          
|                                |                                                |                    |                                      |                                    |           |           |           |           |           |           |           |           |           |           |           |          
|Sales and principal reductions: |                                                |                    |                                      |                                    |           |           |           |           |           |           |           |           |           |           |           |          
|                               
|                               
|                               
|                               
|                                | Loans sold                                     |                    |                                      | 125,852                            |           |           |           | 212,486   |           |           |           | 327,375   |           |           |           | 852,520   |          
|                               
|                               
|                               
|                               
|                                | Loans exchanged for mortgage-backed securities |                    |                                      | 1,310,813                          |           |           |           | 647,560   |           |           |           | 2,781,889 |           |           |           | 2,513,605 |          
|                               
|                               
|                               
|                               
|                                | Principal reductions                           |                    |                                      | 1,532,501                          |           |           |           | 1,794,709 |           |           |           | 4,154,534 |           |           |           | 5,442,896 |          
|                                |                                                |                    |                                      |                                    |           |           |           |           |           |           |           |           |           |           |           |          
|                                |                                                |                    | Total sales and principal reductions |                                    |           | 2,969,166 |           |           |           | 2,654,755 |           |           |           | 7,263,798 |           |           |           | 8,809,021 |          
|                                |                                                |                    |                                      |                                    |           |           |           |           |           |           |           |           |           |           |           |          
|                                |                                                |                    |                                      | Increase before net items          |           | $         | 484,357   |           |           | $         | 252,474   |           |           | $         | 1,716,033 |           |           | $         | 250,325   | 
|                                |                                                |                    |                                      |                                    |           |           |           |           |           |           |           |           |           |           |           |          

13



---



Investment and Mortgage-Backed Securities

Figures 7 and 8 summarize our investment and mortgage-backed
securities portfolios at September 30, 2000 and
December 31, 1999. The amounts reflected represent the fair
values of securities held for trading and available for sale and
the amortized cost of securities held to maturity.

Investment Securities(Figure 7)

|                   |                                      |                        |                                                |          |   |         |   |         |   |         | 
|------------------ | ------------------------------------ | ---------------------- | ---------------------------------------------- | -------- | - | ------- | - | ------- | - | ------- | 
|                   |                                      | 9/30/00                |                                                | 12/31/99
|                   |                                      |                        |                                                |         
|                   |                                      |                       
|                   |                                      | (Dollars in thousands)
|                  
|                  
|                  
|                  
|Trading            |                                      |                        |                                                |          |   |         |   |        
|                  
|                  
|                  
|                  
|                   | Other                                |                        | $                                              |         |   |         | $ | 13,380  |  
|                   |                                      |                        |                                                |          |   |         |   |        
|                   |                                      |                        | Total investment securities held for trading   |          |   |        |   |         |   | 13,380  | 
|                   |                                      |                        |                                                |          |   |         |   |        
|Available for Sale |                                      |                        |                                                |          |   |         |   |        
|                  
|                  
|                  
|                  
|                   | U.S. Treasury and agency securities  |                        |                                                | 334,935  |   |         |   | 339,687 |  
|                  
|                  
|                  
|                  
|                   | Corporate notes and commercial paper |                        |                                                | 67,125   |   |         |   | 88,368  |  
|                  
|                  
|                  
|                  
|                   | Other                                |                        |                                                | 35,782   |   |         |   | 54,640  |  
|                   |                                      |                        |                                                |          |   |         |   |        
|                   |                                      |                        | Total investment securities available for sale |          |   | 437,842 |   |         |   | 482,695 | 
|                   |                                      |                        |                                                |          |   |         |   |        
|Held to Maturity   |                                      |                        |                                                |          |   |         |   |        
|                  
|                  
|                  
|                  
|                   | U.S. Treasury and agency securities  |                        |                                                | 15,234   |   |         |   | 17,058  |  
|                  
|                  
|                  
|                  
|                   | Corporate notes and commercial paper |                        |                                                |         |   |         |   | 15,659  |  
|                  
|                  
|                  
|                  
|                   | Other                                |                        |                                                | 8,250    |   |         |   | 13,289  |  
|                   |                                      |                        |                                                |          |   |         |   |        
|                   |                                      |                        | Total investment securities held to maturity   |          |   | 23,484  |   |         |   | 46,006  | 
|                   |                                      |                        |                                                |          |   |         |   |        
|                   |                                      |                        | Total                                          |          | $ | 461,326 |   |         | $ | 542,081 | 
|                   |                                      |                        |                                                |          |   |         |   |        
|                   | Weighted average rate                |                        |                                                | 7.39     | % |         |   | 7.26    | %
|                   |                                      |                        |                                                |          |   |         |   |        

Mortgage-Backed Securities(Figure 8)

|                   |                                      |                                                     |                                                   |          |           |           |           |  |           |           |           | 
|------------------ | ------------------------------------ | --------------------------------------------------- | ------------------------------------------------- | -------- | --------- | --------- | --------- |  | --------- | --------- | --------- | 
|                   |                                      | 9/30/00                                             |                                                   | 12/31/99
|                   |                                      |                                                     |                                                   |         
|                   |                                      |                                                    
|                   |                                      | (Dollars in thousands)                             
|                  
|                  
|                  
|                  
|Available for Sale |                                      |                                                     |                                                   |          |           |           |           | 
|                  
|                  
|                  
|                  
|                   | Participation certificates:          |                                                     |                                                   |          |           |           |           |  |          
|                  
|                  
|                  
|                  
|                   |                                      | Government agency issues:                           |                                                   |          |           |           |           |  |           |          
|                  
|                  
|                  
|                  
|                   |                                      |                                                     | FNMA                                              |          | $         | 2,675,901 |           |  | $         | 3,023,228 |          
|                  
|                  
|                  
|                  
|                   |                                      |                                                     | FHLMC                                             |          |           | 205,190   |           |  |           | 95,034    |          
|                  
|                  
|                  
|                  
|                   |                                      |                                                     | GNMA                                              |          |           | 2,314     |           |  |           | 2,608     |          
|                  
|                  
|                  
|                  
|                   | Collateralized mortgage obligations: |                                                     |                                                   |          |           |           |           |  |          
|                  
|                  
|                  
|                  
|                   |                                      | Government agency issues:                           |                                                   |          |           |           |           |  |           |          
|                  
|                  
|                  
|                  
|                   |                                      |                                                     | FHLMC                                             |          |           | 295,842   |           |  |           | 232,906   |          
|                  
|                  
|                  
|                  
|                   |                                      |                                                     | FNMA                                              |          |           | 228,496   |           |  |           | 304,018   |          
|                  
|                  
|                  
|                  
|                   |                                      |                                                     | GNMA                                              |          |           | 6,311     |           |  |           | 7,349     |          
|                  
|                  
|                  
|                  
|                   |                                      | Private issues                                      |                                                   |          | 516,808   |           |           |  | 527,991   |          
|                   |                                      |                                                     |                                                   |          |           |           |           | 
|                   |                                      | Total mortgage-backed securities available for sale |                                                   |          | 3,930,862 |           |           |  | 4,193,134 |          
|                   |                                      |                                                     |                                                   |          |           |           |           | 
|Held to Maturity   |                                      |                                                     |                                                   |          |           |           |           | 
|                  
|                  
|                  
|                  
|                   | Participation certificates:          |                                                     |                                                   |          |           |           |           |  |          
|                  
|                  
|                  
|                  
|                   |                                      | Government agency issues:                           |                                                   |          |           |           |           |  |           |          
|                  
|                  
|                  
|                  
|                   |                                      |                                                     | FNMA                                              |          |           | 461,648   |           |  |           | 549,866   |          
|                  
|                  
|                  
|                  
|                   |                                      |                                                     | FHLMC                                             |          |           | 165,051   |           |  |           | 196,704   |          
|                  
|                  
|                  
|                  
|                   |                                      |                                                     | GNMA                                              |          |           | 88,999    |           |  |           | 101,468   |          
|                  
|                  
|                  
|                  
|                   |                                      | Private issues                                      |                                                   |          | 135,301   |           |           |  | 162,485   |          
|                  
|                  
|                  
|                  
|                   | Collateralized mortgage obligations: |                                                     |                                                   |          |           |           |           |  |          
|                  
|                  
|                  
|                  
|                   |                                      | Government agency issues:                           |                                                   |          |           |           |           |  |           |          
|                  
|                  
|                  
|                  
|                   |                                      |                                                     | FNMA                                              |          |           | 208,766   |           |  |           | 221,934   |          
|                  
|                  
|                  
|                  
|                   |                                      |                                                     | FHLMC                                             |          |           | 71,480    |           |  |           | 82,838    |          
|                  
|                  
|                  
|                  
|                   |                                      | Private issues                                      |                                                   |          | 470,382   |           |           |  | 591,951   |          
|                   |                                      |                                                     |                                                   |          |           |           |           | 
|                   |                                      |                                                     | Total mortgage-backed securities held to maturity |          |           | 1,601,627 |           |  |           | 1,907,246 |          
|                   |                                      |                                                     |                                                   |          |           |           |           | 
|                   |                                      |                                                     |                                                   | Total    |           | $         | 5,532,489 |  |           | $         | 6,100,380 | 
|                   |                                      |                                                     |                                                   |          |           |           |           | 
|                   |                                      | Weighted average rate                               |                                                   |          | 7.24      | %         |           |  | 7.04      | %        
|                   |                                      |                                                     |                                                   |          |           |           |           | 

14



---



Asset Quality

Analysis of the Allowance for Loan and Lease
Losses(Figure 9)

|                                    |                                                          |                    |   |                                |        |         |         |         |        |   |         |         |         |   |         |         |         |   |         |  
|----------------------------------- | -------------------------------------------------------- | ------------------ | - | ------------------------------ | ------ | ------- | ------- | ------- | ------ | - | ------- | ------- | ------- | - | ------- | ------- | ------- | - | ------- | -
|                                    |                                                          |                    |   |                               
|                                    |                                                          | Three Months Ended |   | Nine Months Ended             
|                                    |                                                          |                    |   |                               
|                                    |                                                          | 9/30/00            |   | 9/30/99                        |        | 9/30/00 |         | 9/30/99
|                                    |                                                          |                    |   |                                |        |         |         |        
|                                    |                                                          |                    |   |                                |        |        
|                                    |                                                          |                    |   | (Dollars in thousands)         |        |        
|                                   
|                                   
|                                   
|                                   
|Allowance for loan and lease losses |                                                          |                    |   |                                |        |         |         |         |        |   |         |         |         |   |         |        
|                                   
|                                   
|                                   
|                                   
|                                    | Balance, beginning of period                             |                    | $ | 186,194                        |        |         | $       | 182,349 |        |   | $       | 186,400 |         |   | $       | 184,989 |        
|                                   
|                                   
|                                   
|                                   
|                                    | Provision for loan and lease losses                      |                    |   | 13,178                         |        |         |         | 7,366   |        |   |         | 33,285  |         |   |         | 21,979  |        
|                                   
|                                   
|                                   
|                                   
|                                    | Loans and leases charged off:                            |                    |   |                                |        |         |         |         |        |   |         |         |         |   |         |         |        
|                                   
|                                   
|                                   
|                                   
|                                    |                                                          | Mortgage           |   |                                | (1,117 | )       |         |         | (1,815 | ) |         |         | (4,402  | ) |         |         | (5,539  | )
|                                   
|                                   
|                                   
|                                   
|                                    |                                                          | Automobile         |   |                                | (6,414 | )       |         |         | (6,482 | ) |         |         | (20,295 | ) |         |         | (20,791 | )
|                                   
|                                   
|                                   
|                                   
|                                    |                                                          | Retail consumer    |   |                                | (3,946 | )       |         |         | (577   | ) |         |         | (11,333 | ) |         |         | (2,559  | )
|                                   
|                                   
|                                   
|                                   
|                                    |                                                          | Leases             |   |                                |       |         |         |         |       |   |         |         |        |   |         |         | (900    | )
|                                   
|                                   
|                                   
|                                   
|                                    |                                                          | Corporate banking  |   |                                | (153   | )       |         |         | (1,472 | ) |         |         | (589    | ) |         |         | (2,006  | )
|                                    |                                                          |                    |   |                                |        |         |         |         |        |   |         |         |         |   |         |        
|                                    |                                                          |                    |   | Total charge-offs              |        |         | (11,630 | )       |        |   | (10,346 | )       |         |   | (36,619 | )       |         |   | (31,795 | )
|                                    |                                                          |                    |   |                                |        |         |         |         |        |   |         |         |         |   |         |        
|                                    | Recoveries:                                              |                    |   |                                |        |         |         |         |        |   |         |         |         |   |         |         |        
|                                   
|                                   
|                                   
|                                   
|                                    |                                                          | Mortgage           |   |                                | 179    |         |         |         | 65     |   |         |         | 743     |   |         |         | 827     |  
|                                   
|                                   
|                                   
|                                   
|                                    |                                                          | Automobile         |   |                                | 1,402  |         |         |         | 1,673  |   |         |         | 4,502   |   |         |         | 4,727   |  
|                                   
|                                   
|                                   
|                                   
|                                    |                                                          | Retail consumer    |   |                                | 229    |         |         |         | 255    |   |         |         | 993     |   |         |         | 521     |  
|                                   
|                                   
|                                   
|                                   
|                                    |                                                          | Leases             |   |                                |       |         |         |         |       |   |         |         |        |   |         |         |        |  
|                                   
|                                   
|                                   
|                                   
|                                    |                                                          | Corporate banking  |   |                                | 31     |         |         |         | 79     |   |         |         | 279     |   |         |         | 193     |  
|                                    |                                                          |                    |   |                                |        |         |         |         |        |   |         |         |         |   |         |        
|                                    |                                                          |                    |   | Total recoveries               |        |         | 1,841   |         |        |   | 2,072   |         |         |   | 6,517   |         |         |   | 6,268   |  
|                                    |                                                          |                    |   |                                |        |         |         |         |        |   |         |         |         |   |         |        
|                                    |                                                          |                    |   | Net loan and lease charge-offs |        |         | (9,789  | )       |        |   | (8,274  | )       |         |   | (30,102 | )       |         |   | (25,527 | )
|                                    |                                                          |                    |   |                                |        |         |         |         |        |   |         |         |         |   |         |        
|                                    | Balance, end of period                                   |                    | $ | 189,583                        |        |         | $       | 181,441 |        |   | $       | 189,583 |         |   | $       | 181,441 |        
|                                    |                                                          |                    |   |                                |        |         |         |         |        |   |         |         |         |   |         |        
|                                    | Net charge-offs to average loans and leases (annualized) |                    |   | .16                            | %      |         |         | .15     | %      |   |         | .17     | %       |   |         | .19     | %      

Figure 10 sets forth information concerning nonperforming assets
and additional information on the allowance for loan and lease
losses.

15



---



Nonperforming Assets(Figure 10)

|                                                                |                                                          |                                          |                            |                                                              |        |        |         |       |        |        |         | 
|--------------------------------------------------------------- | -------------------------------------------------------- | ---------------------------------------- | -------------------------- | ------------------------------------------------------------ | ------ | ------ | ------- | ----- | ------ | ------ | ------- | 
|                                                                |                                                          | 9/30/00                                  |                            | 12/31/99                                                    
|                                                                |                                                          |                                          |                            |                                                             
|                                                                |                                                          |                                         
|                                                                |                                                          | (Dollars in thousands)                  
|                                                               
|                                                               
|                                                               
|                                                               
|Nonperforming loans and leases:                                 |                                                          |                                          |                            |                                                              |        |        |         |      
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Nonaccrual loans and leases:                             |                                          |                            |                                                              |        |        |         |       |       
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                |                                                          | Real estate mortgage loans:              |                            |                                                              |        |        |         |       |        |       
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                |                                                          |                                          | One-to-four family(1)      |                                                              | $      | 70,692 |         |       | $      | 75,682 |        
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                |                                                          |                                          | Multifamily and commercial |                                                              |        | 6,869  |         |       |        | 3,369  |        
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                |                                                          |                                          | Construction and land      |                                                              |        | 5,606  |         |       |        | 1,095  |        
|                                                                |                                                          |                                          |                            |                                                              |        |        |         |      
|                                                                |                                                          |                                          |                            | Total real estate mortgage loans                             |        |        | 83,167  |       |        |        | 80,146  | 
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                |                                                          | Retail consumer                          |                            |                                                              | 55,903 |        |         |       | 39,638 |       
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                |                                                          | Automobile                               |                            |                                                              | 229    |        |         |       | 482    |       
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                |                                                          | Corporate banking                        |                            |                                                              | 17,973 |        |         |       | 6,037  |       
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                |                                                          | Leases                                   |                            |                                                              |       |        |         |       |       |       
|                                                                |                                                          |                                          |                            |                                                              |        |        |         |      
|                                                                |                                                          |                                          |                            | Total nonaccrual loans and leases                            |        |        | 157,272 |       |        |        | 126,303 | 
|                                                                |                                                          |                                          |                            |                                                              |        |        |         |      
|                                                                | Accruing loans and leases delinquent more than 90 days:  |                                          |                            |                                                              |        |        |         |       |       
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                |                                                          | Real estate mortgage loans               |                            |                                                              |       |        |         |       |       |       
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                |                                                          | Retail consumer(1)                       |                            |                                                              | 2,055  |        |         |       | 2,562  |       
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                |                                                          | Automobile                               |                            |                                                              | 5,842  |        |         |       | 4,973  |       
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                |                                                          | Corporate banking                        |                            |                                                              | 3,808  |        |         |       | 2,463  |       
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                |                                                          | Leases                                   |                            |                                                              | 3,044  |        |         |       |       |       
|                                                                |                                                          |                                          |                            |                                                              |        |        |         |      
|                                                                |                                                          |                                          |                            | Total accruing loans and leases delinquent more than 90 days |        |        | 14,749  |       |        |        | 9,998   | 
|                                                                |                                                          |                                          |                            |                                                              |        |        |         |      
|                                                                | Restructured real estate mortgage loans                  |                                          |                            | 669                                                          |        |        |         | 1,009 |       
|                                                                |                                                          |                                          |                            |                                                              |        |        |         |      
|                                                                |                                                          |                                          |                            | Total nonperforming loans and leases                         |        |        | 172,690 |       |        |        | 137,310 | 
|                                                               
|                                                               
|                                                               
|                                                               
|Real estate acquired through foreclosure and other              |                                                          |                                          | 23,495                     |                                                              |        |        | 24,453  |      
|                                                                |                                                          |                                          |                            |                                                              |        |        |         |      
|                                                                |                                                          |                                          |                            | Total nonperforming assets                                   |        |        | 196,185 |       |        |        | 161,763 | 
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                |                                                          |                                          |                            | Less government guaranteed loans                             |        |        | 20,105  |       |        |        | 18,841  | 
|                                                                |                                                          |                                          |                            |                                                              |        |        |         |      
|                                                                |                                                          |                                          |                            | Nonperforming assets net of government guaranteed loans      |        | $      | 176,080 |       |        | $      | 142,922 | 
|                                                                |                                                          |                                          |                            |                                                              |        |        |         |      
|Ratio of:                                                       |                                                          |                                          |                            |                                                              |        |        |         |      
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Nonperforming loans and leases to total loans and leases |                                          |                            | .72                                                          | %      |        |         | .62   | %     
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Nonperforming assets to total assets                     |                                          |                            | .60                                                          |        |        |         | .51   |       
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Allowance for loan and lease losses to:                  |                                          |                            |                                                              |        |        |         |       |       
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                |                                                          | Nonperforming loans and leases           |                            |                                                              | 109.78 |        |         |       | 135.75 |       
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                |                                                          | Total loans and leases before allowance  |                            |                                                              | .79    |        |         |       | .83    |       
|                                                               
|                                                               
|                                                               
|                                                               
|Ratio of (excluding government guaranteed nonperforming loans): |                                                          |                                          |                            |                                                              |        |        |         |      
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Nonperforming loans and leases to total loans and leases |                                          |                            | .64                                                          |        |        |         | .53   |       
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Nonperforming assets to total assets                     |                                          |                            | .54                                                          |        |        |         | .45   |       
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Allowance for loan and lease losses to:                  |                                          |                            |                                                              |        |        |         |       |       
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                |                                                          | Nonperforming loans and leases           |                            |                                                              | 124.25 |        |         |       | 157.34 |       
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                |                                                          | Total loans and leases before allowances |                            |                                                              | .79    | %      |         |       | .83    | %     



---



|    |                                      
|--- | -------------------------------------
|(1) | Includes government guaranteed loans.

At September 30, 2000, there were $99.1 million of
loans and leases not reflected in the table above, where known
information about possible credit problems of borrowers caused
management to have 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 in the future.

16



---



SOURCES OF FUNDS

General

Deposits have historically been the most important source of our
funds for use in lending and for general business purposes. We
also derive funds from FHLB advances, reverse repurchase
agreements and other borrowings, principal repayments on loans
and mortgage-backed securities, funds provided by operations and
proceeds from the sale of loans and loan participations.

Deposits

Deposit inflows and outflows are significantly influenced by
general interest rates, market conditions and competitive
factors. We reprice our deposits primarily based on competitive
conditions. In order to decrease the volatility of our deposits,
we impose stringent early withdrawal penalties on our
certificates of deposit. Consumer and commercial deposits are
attracted principally from within our primary market areas
through the offering of a broad range of deposit instruments.

Composition of Deposits(Figure 11)

|                                                                                                |                     |                     |           |                        |            |        |      |          |      |  |            |           |            |  |      |      |      | 
|----------------------------------------------------------------------------------------------- | ------------------- | ------------------- | --------- | ---------------------- | ---------- | ------ | ---- | -------- | ---- |  | ---------- | --------- | ---------- |  | ---- | ---- | ---- | 
|                                                                                                |                     |                     |           |                       
|                                                                                                |                     | 9/30/00             |           | 12/31/99              
|                                                                                                |                     |                     |           |                       
|                                                                                                |                     |                     |           | Weighted               |            |        |      | Weighted
|                                                                                                |                     |                     |           | Average                |            |        |      | Average 
|                                                                                                |                     | Amount              |           | Rate                   |            | Amount |      | Rate    
|                                                                                                |                     |                     |           |                        |            |        |      |         
|                                                                                                |                     |                     |           |                        |            |       
|                                                                                                |                     |                     |           | (Dollars in thousands) |            |       
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|Checking accounts:                                                                              |                     |                     |           |                        |            |        |      |          |      |  |            |           |            |  |      |     
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                                | Interest-bearing    |                     | $         | 2,416,001              |            |        |      | 2.62     | %    |  | $          | 2,066,453 |            |  |      | 2.05 | %   
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                                | Noninterest-bearing |                     |           | 1,390,720              |            |        |      |         |      |  |            | 1,263,290 |            |  |      |     |     
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|Savings accounts                                                                                |                     |                     | 1,450,104 |                        |            |        | 1.54 |          |      |  | 2,065,127  |           |            |  | 1.61 |     
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|Money market accounts                                                                           |                     |                     | 3,963,608 |                        |            |        | 4.26 |          |      |  | 3,170,435  |           |            |  | 3.41 |     
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|Certificates of deposit                                                                         |                     |                     | 9,501,825 |                        |            |        | 5.84 |          |      |  | 10,508,670 |           |            |  | 5.31 |     
|                                                                                                |                     |                     |           |                        |            |        |      |          |      |  |            |           |            |  |      |     
|                                                                                                |                     | Total deposits, net |           | $                      | 18,722,258 |        |      |          | 4.32 |  |            | $         | 19,073,975 |  |      |      | 3.89 | 
|                                                                                                |                     |                     |           |                        |            |        |      |          |      |  |            |           |            |  |      |     
|Including the annualized effect of applicable interest rate risk
        management instruments |                     |                     |           |                        |            |        | 4.27 | %        |      |  |            |           |            |  | 3.79 | %   

Investment securities and mortgage-backed securities with a book
value of $515.3 million at September 30, 2000 and
$544.4 million at December 31, 1999, were pledged to
secure public deposits and for other purposes required or
permitted by law.

Borrowings

At September 30, 2000, borrowings primarily consisted of
FHLB advances. These positions were secured by our investment in
the stock of the FHLB, as well as $13.5 billion in certain
real estate loans and $2.3 billion in mortgage-backed
securities.

Federal Home Loan Bank Advances(Figure 12)

|           |                        |                     |           |                        |           |        |      |          |      |   |           |           |           |  |      |      |      |  
|---------- | ---------------------- | ------------------- | --------- | ---------------------- | --------- | ------ | ---- | -------- | ---- | - | --------- | --------- | --------- |  | ---- | ---- | ---- | -
|           |                        |                     |           |                       
|           |                        | 9/30/00             |           | 12/31/99              
|           |                        |                     |           |                       
|           |                        |                     |           | Weighted               |           |        |      | Weighted
|           |                        |                     |           | Average                |           |        |      | Average 
|           |                        | Amount              |           | Rate                   |           | Amount |      | Rate    
|           |                        |                     |           |                        |           |        |      |         
|           |                        |                     |           |                        |           |       
|           |                        |                     |           | (Dollars in thousands) |           |       
|          
|          
|          
|          
|Short-term |                        | $                   | 4,685,247 |                        |           |        | 6.01 | %        |      | $ | 4,115,000 |           |           |  | 5.43 | %   
|          
|          
|          
|          
|Long-term: |                        |                     |           |                        |           |        |      |          |      |   |           |           |           |  |      |     
|          
|          
|          
|          
|           | Fixed-rate advances    |                     |           | 4,656,231              |           |        |      | 5.47     |      |   |           | 4,512,941 |           |  |      | 5.10 |     
|          
|          
|          
|          
|           | Variable-rate advances |                     |           | 424,478                |           |        |      | 6.53     |      |   |           | 598,209   |           |  |      | 6.21 |     
|           |                        |                     |           |                        |           |        |      |          |      |   |           |           |           |  |      |     
|           |                        | Total advances, net |           | $                      | 9,765,956 |        |      |          | 5.77 | % |           | $         | 9,226,150 |  |      |      | 5.32 | %
|           |                        |                     |           |                        |           |        |      |          |      |   |           |           |           |  |      |     

Interest Rate Risk Management

We utilize various types of interest rate contracts in managing
our interest rate risk profile. We utilize fixed receipt

17



---





Interest Rate Swaps(Figure 13)

|                                                |      |           |   |           |           |                        |  |           |      |           |  |          |      |      |   |         |           |  |  |      |      |   |  |      |      |     
|----------------------------------------------- | ---- | --------- | - | --------- | --------- | ---------------------- |  | --------- | ---- | --------- |  | -------- | ---- | ---- | - | ------- | --------- |  |  | ---- | ---- | - |  | ---- | ---- | ----
|                                                |      |           |   |          
|                                                |      | 9/30/00   |   | 12/31/99 
|                                                |      |           |   |          
|                                                |      | Notional  |   | Receiving |           | Paying                 |  | Notional  |      | Receiving |  | Paying  
|                                                |      | Principal |   | Interest  |           | Interest               |  | Principal |      | Interest  |  | Interest
|                                                |      | Amount    |   | Rate      |           | Rate                   |  | Amount    |      | Rate      |  | Rate    
|                                                |      |           |   |           |           |                        |  |           |      |           |  |         
|                                                |      |           |   |           |           |                        |  |           |      |          
|                                                |      |           |   |           |           | (Dollars in thousands) |  |           |      |          
|                                               
|                                               
|                                               
|                                               
|Fixed Payment and Variable Receipt Maturing in: |      |           |   |           |           |                        |  |           |      |           |  |          |      |      |   |         |           |  |  |      |      |   |  |     
|                                               
|                                               
|                                               
|                                               
|                                                | 2002 |           | $ | 25,000    |           |                        |  | 6.94      | %(1) |           |  | 6.44     | %    |      | $ | 25,000  |           |  |  | 5.58 | %(1) |   |  | 6.44 | %   
|                                                |      |           |   |           |           |                        |  |           |      |           |  |          |      |      |   |         |           |  |  |      |      |   |  |     
|Variable Payment and Fixed Receipt Maturing in: |      |           |   |           |           |                        |  |           |      |           |  |          |      |      |   |         |           |  |  |      |      |   |  |     
|                                               
|                                               
|                                               
|                                               
|                                                | 2000 |           | $ | 20,000    |           |                        |  | 5.46      | %    |           |  | 6.70     | %    |      |   | 40,000  |           |  |  | 5.55 | %    |   |  | 6.16 | %   
|                                               
|                                               
|                                               
|                                               
|                                                | 2001 |           |   | 420,000   |           |                        |  | 6.38      |      |           |  | 6.70     |      |      |   | 420,000 |           |  |  | 6.38 |      |   |  | 6.14 |     
|                                               
|                                               
|                                               
|                                               
|                                                | 2002 |           |   | 325,000   |           |                        |  | 7.53      |      |           |  | 6.69     |      |      |   |        |           |  |  |     |      |   |  |     |     
|                                               
|                                               
|                                               
|                                               
|                                                | 2003 |           |   | 120,000   |           |                        |  | 6.14      |      |           |  | 6.69     |      |      |   | 120,000 |           |  |  | 6.14 |      |   |  | 6.14 |     
|                                               
|                                               
|                                               
|                                               
|                                                | 2004 |           |   | 580,000   |           |                        |  | 7.01      |      |           |  | 6.70     |      |      |   | 580,000 |           |  |  | 7.01 |      |   |  | 6.15 |     
|                                               
|                                               
|                                               
|                                               
|                                                | 2005 |           |   | 425,000   |           |                        |  | 7.91      |      |           |  | 6.68     |      |      |   | 25,000  |           |  |  | 7.00 |      |   |  | 5.87 |     
|                                               
|                                               
|                                               
|                                               
|                                                | 2006 |           |   | 60,000    |           |                        |  | 7.08      |      |           |  | 6.53     |      |      |   | 40,000  |           |  |  | 7.00 |      |   |  | 6.37 |     
|                                               
|                                               
|                                               
|                                               
|                                                | 2009 |           |   | 65,000    |           |                        |  | 7.32      |      |           |  | 6.53     |      |      |   | 65,000  |           |  |  | 7.32 |      |   |  | 6.16 |     
|                                               
|                                               
|                                               
|                                               
|                                                | 2010 |           |   | 10,000    |           |                        |  | 7.40      |      |           |  | 6.59     |      |      |   |        |           |  |  |     |      |   |  |     |     
|                                                |      |           |   |           |           |                        |  |           |      |           |  |          |      |      |   |         |           |  |  |      |      |   |  |     
|                                                |      | Total     |   | $         | 2,025,000 |                        |  |           | 7.10 | %         |  |          | 6.58 | %(1) |   | $       | 1,290,000 |  |  |      | 6.69 | % |  |      | 6.15 | %(1)
|                                                |      |           |   |           |           |                        |  |           |      |           |  |          |      |      |   |         |           |  |  |      |      |   |  |     



---



|    |                            
|--- | ---------------------------
|(1) | Rates are based upon LIBOR.

Interest rate risk management instruments reduced interest
expense as follows:

Net Benefit of Interest Rate Risk
Management(Figure 14)

|                           |                               |                    |   |                   |        |         |   |         |        |   |   |        |        |   |   |        |        |  
|-------------------------- | ----------------------------- | ------------------ | - | ----------------- | ------ | ------- | - | ------- | ------ | - | - | ------ | ------ | - | - | ------ | ------ | -
|                           |                               |                    |   |                   |        |        
|                           |                               | Three
Months Ended |   | Nine Months Ended
|                           |                               |                    |   |                  
|                           |                               | 9/30/00            |   | 9/30/99           |        | 9/30/00 |   | 9/30/99
|                           |                               |                    |   |                   |        |         |   |        
|                           |                               |                    |   |                   |        |        
|                           |                               |                    |   | (Dollars in       |        |        
|                           |                               |                    |   | thousands)        |        |        
|                          
|                          
|                          
|                          
|Interest expense (income): |                               |                    |   |                   |        |         |   |         |        |   |   |        |        |   |   |       
|                          
|                          
|                          
|                          
|                           | Deposits                      |                    | $ | (1,548            | )      |         | $ | (2,534  | )      |   | $ | (7,220 | )      |   | $ | (6,841 | )     
|                          
|                          
|                          
|                          
|                           | FHLB advances                 |                    |   |                  |        |         |   |        |        |   |   |       |        |   |   | 86     |       
|                          
|                          
|                          
|                          
|                           | Reverse repurchase agreements |                    |   |                  |        |         |   |        |        |   |   |       |        |   |   | (236   | )     
|                          
|                          
|                          
|                          
|                           | Other borrowings              |                    |   |                  |        |         |   | 58      |        |   |   |       |        |   |   | 227    |       
|                           |                               |                    |   |                   |        |         |   |         |        |   |   |        |        |   |   |       
|                           |                               | Total net benefit  |   | $                 | (1,548 | )       |   | $       | (2,476 | ) |   | $      | (7,220 | ) |   | $      | (6,764 | )
|                           |                               |                    |   |                   |        |         |   |         |        |   |   |        |        |   |   |       

Liquidity

Our principal sources of funds are deposits, advances from the
FHLB of Cincinnati, reverse 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 not to pay rates on deposits as high as our competition
and, when necessary, to supplement deposits with longer term
and/or lower cost alternative sources of funds such as FHLB
advances and reverse repurchase agreements. Management also
considers our interest-sensitivity profile when deciding on
alternative sources of funds. At September 30, 2000, our
one-year gap was a negative 11.14% of total assets. See
Item 3 Quantitative and Qualitative Disclosure About
Market Risk regarding further information on our interest
rate risk profile.

18



---



We are required by regulation to maintain specific minimum
levels of liquid investments. Regulations currently in effect
require us to maintain average liquid assets at least equal to
4.0% of the sum of the average daily balance of net withdrawable
accounts and borrowed funds due in one year or less. This
regulatory requirement may be changed from time to time to
reflect current economic conditions. Charter One Banks
average regulatory liquidity ratio for the third quarter of 2000
was 4.23%.

We anticipate that we will have sufficient funds available to
meet our commitments. At September 30, 2000, we had
outstanding commitments to originate loans and leases of
$1.6 billion, unfunded consumer lines of credit totaling
$2.8 billion and unfunded corporate banking lines of credit
totaling $173.8 million. We do not expect all of these
lines to be used by the borrowers. Outstanding letters of credit
totaled $78.3 million as of September 30, 2000.
Certificates of deposit scheduled to mature in one year or less
at September 30, 2000 totaled $7.7 billion. We believe
that a significant portion of the amounts maturing will remain
with us because they are retail deposits. We believe we have
significant borrowing capacity with the FHLB and investment
banking firms to meet any need for additional borrowings and
sources of funds.

Capital and Dividends

On October 20, 1999, our Board of Directors authorized a
buyback to repurchase up to 3.3 million shares of Charter
One common stock in a program of open market or privately
negotiated transactions. As of March 31, 2000, we had
purchased all of the shares authorized under this buyback for a
total cost of $68.6 million. The repurchased shares were
later reissued in connection with the 5% stock dividend
distributed September 30, 2000, as well as employee benefit
plans.

On April 26, 2000, our Board of Directors authorized a new
buyback to repurchase up to 7.5 million shares of Charter
One common stock in a program of open market purchases or
privately negotiated transactions. As of June 30, 2000, we
had purchased all of the shares authorized under this buyback
for a total cost of $170.7 million. The repurchased shares
were later reissued in connection with the 5% stock dividend
distributed September 30, 2000, as well as employee benefit
plans.

On July 18, 2000, the Board of Directors of Charter One
authorized management to repurchase up to 10% of the
Companys outstanding common stock in a buyback program of
open market purchases or privately negotiated transactions. As
of September 30, 2000, we had purchased 5.1 million
shares authorized under this buyback for a total cost of
$115.2 million. Of the 5.1 million shares purchased,
152,335 shares were later reissued in connection with the 5%
stock dividend distributed September 30, 2000. The
remaining repurchased shares will be reserved in treasury for
later reissue in connection with employee benefit plans.

As a financial holding company, Charter One 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.
Charter One Commercial and Charter One Bank, F.S.B. are subject
to various regulatory capital requirements administered by the
Federal Deposit Insurance Corporation and the Office of Thrift
Supervision (OTS), respectively. 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 and the regulatory
framework for prompt corrective action, 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 Charter One Commercial
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. Charter One
Bank, F.S.B. is required to maintain minimum amounts and ratios
(also set forth in the table below) of total and Tier 1 capital
to risk-weighted assets, of core capital to adjusted tangible
assets, and of tangible capital to tangible assets.

The actual regulatory capital ratios calculated for Charter One,
Charter One Commercial and Charter One Bank, F.S.B., along with
the capital amounts and ratios for capital adequacy purposes and
the amounts required to be categorized as well capitalized under
the regulatory framework for prompt corrective action are as
follows:

19



---



The actual regulatory capital ratios calculated for Charter One,
Charter One Commercial and Charter One Bank, F.S.B., along with
the capital amounts and ratios for capital adequacy purposes and
the amounts required to be categorized as well capitalized under
the regulatory framework for prompt corrective action are as
follows:

Regulatory Capital(Figure 15)

|                          |                                          |         |   |                   |  |                        |  |       |   |        |   |           |  |  |   |      |   |  |   |           |  |  |   |       |  
|------------------------- | ---------------------------------------- | ------- | - | ----------------- |  | ---------------------- |  | ----- | - | ------ | - | --------- |  |  | - | ---- | - |  | - | --------- |  |  | - | ----- | -
|                          |                                          |        
|                          |                                          | 9/30/00
|                          |                                          |        
|                          |                                          |         |   |                  
|                          |                                          |         |   | To Be Well      
|                          |                                          |         |   | Capitalized     
|                          |                                          |         |   |                   |  | Under Prompt          
|                          |                                          |         |   | For Capital       |  | Corrective            
|                          |                                          | Actual  |   | Adequacy Purposes |  | Action Provisions     
|                          |                                          |         |   |                   |  |                       
|                          |                                          | Amount  |   | Ratio             |  | Amount                 |  | Ratio |   | Amount |   | Ratio    
|                          |                                          |         |   |                   |  |                        |  |       |   |        |   |          
|                          |                                          |         |   |                   |  |                        |  |       |   |       
|                          |                                          |         |   |                   |  | (Dollars in thousands) |  |       |   |       
|                         
|                         
|                         
|                         
|Charter One:              |                                          |         |   |                   |  |                        |  |       |   |        |   |           |  |  |   |      |   |  |   |           |  |  |   |      
|                         
|                         
|                         
|                         
|                          | Total capital to risk-weighted assets    |         | $ | 2,369,019         |  |                        |  | 9.99  | % |        | $ | 1,896,624 |  |  | * | 8.00 | % |  | $ | 2,370,780 |  |  | * | 10.00 | %
|                         
|                         
|                         
|                         
|                          | Tier 1 capital to risk-weighted assets   |         |   | 2,174,964         |  |                        |  | 9.17  |   |        |   | 948,312   |  |  | * | 4.00 |   |  |   | 1,422,468 |  |  | * | 6.00  |  
|                         
|                         
|                         
|                         
|                          | Tier 1 capital to average assets         |         |   | 2,174,964         |  |                        |  | 6.72  |   |        |   | 1,294,239 |  |  | * | 4.00 |   |  |   | 1,617,799 |  |  | * | 5.00  |  
|                         
|                         
|                         
|                         
|Charter One Commercial:   |                                          |         |   |                   |  |                        |  |       |   |        |   |           |  |  |   |      |   |  |   |           |  |  |   |      
|                         
|                         
|                         
|                         
|                          | Total capital to risk-weighted assets    |         |   | 39,977            |  |                        |  | 47.37 |   |        |   | 6,752     |  |  | * | 8.00 |   |  |   | 8,440     |  |  | * | 10.00 |  
|                         
|                         
|                         
|                         
|                          | Tier 1 capital to risk-weighted assets   |         |   | 39,977            |  |                        |  | 47.37 |   |        |   | 3,376     |  |  | * | 4.00 |   |  |   | 5,064     |  |  | * | 6.00  |  
|                         
|                         
|                         
|                         
|                          | Tier 1 capital to average assets         |         |   | 39,977            |  |                        |  | 16.59 |   |        |   | 9,638     |  |  | * | 4.00 |   |  |   | 12,048    |  |  | * | 5.00  |  
|                         
|                         
|                         
|                         
|Charter One Bank, F.S.B.: |                                          |         |   |                   |  |                        |  |       |   |        |   |           |  |  |   |      |   |  |   |           |  |  |   |      
|                         
|                         
|                         
|                         
|                          | Total capital to risk-weighted assets    |         |   | 2,360,964         |  |                        |  | 10.11 |   |        |   | 1,867,986 |  |  | * | 8.00 |   |  |   | 2,334,983 |  |  | * | 10.00 |  
|                         
|                         
|                         
|                         
|                          | Tier 1 capital to risk-weighted assets   |         |   | 1,857,023         |  |                        |  | 7.95  |   |        |   | N/A       |  |  |   | N/A  |   |  |   | 1,400,990 |  |  | * | 6.00  |  
|                         
|                         
|                         
|                         
|                          | Core capital to adjusted tangible assets |         |   | 1,879,417         |  |                        |  | 5.77  |   |        |   | 1,302,467 |  |  | * | 4.00 |   |  |   | 1,628,083 |  |  | * | 5.00  |  
|                         
|                         
|                         
|                         
|                          | Tangible capital to tangible assets      |         |   | 1,878,948         |  |                        |  | 5.77  |   |        |   | 488,418   |  |  | * | 1.50 |   |  |   | N/A       |  |  |   | N/A   |  

|                           |                                          |          |   |                   |  |                        |  |       |   |        |   |           |  |  |   |      |   |  |   |           |  |  |   |       |  
|-------------------------- | ---------------------------------------- | -------- | - | ----------------- |  | ---------------------- |  | ----- | - | ------ | - | --------- |  |  | - | ---- | - |  | - | --------- |  |  | - | ----- | -
|                           |                                          |         
|                           |                                          | 12/31/99
|                           |                                          |         
|                           |                                          |          |   |                  
|                           |                                          |          |   | To Be Well      
|                           |                                          |          |   | Capitalized     
|                           |                                          |          |   |                   |  | Under Prompt          
|                           |                                          |          |   | For Capital       |  | Corrective            
|                           |                                          | Actual   |   | Adequacy Purposes |  | Action Provisions     
|                           |                                          |          |   |                   |  |                       
|                           |                                          | Amount   |   | Ratio             |  | Amount                 |  | Ratio |   | Amount |   | Ratio    
|                           |                                          |          |   |                   |  |                        |  |       |   |        |   |          
|                           |                                          |          |   |                   |  |                        |  |       |   |       
|                           |                                          |          |   |                   |  | (Dollars in thousands) |  |       |   |       
|                          
|                          
|                          
|                          
|Charter One:               |                                          |          |   |                   |  |                        |  |       |   |        |   |           |  |  |   |      |   |  |   |           |  |  |   |      
|                          
|                          
|                          
|                          
|                           | Total capital to risk-weighted assets    |          | $ | 2,404,336         |  |                        |  | 11.16 | % |        | $ | 1,722,825 |  |  | * | 8.00 | % |  | $ | 2,153,532 |  |  | * | 10.00 | %
|                          
|                          
|                          
|                          
|                           | Tier 1 capital to risk-weighted assets   |          |   | 2,213,534         |  |                        |  | 10.28 |   |        |   | 861,413   |  |  | * | 4.00 |   |  |   | 1,292,119 |  |  | * | 6.00  |  
|                          
|                          
|                          
|                          
|                           | Tier 1 capital to average assets         |          |   | 2,213,534         |  |                        |  | 7.05  |   |        |   | 1,255,645 |  |  | * | 4.00 |   |  |   | 1,569,567 |  |  | * | 5.00  |  
|                          
|                          
|                          
|                          
|Charter One Commercial:    |                                          |          |   |                   |  |                        |  |       |   |        |   |           |  |  |   |      |   |  |   |           |  |  |   |      
|                          
|                          
|                          
|                          
|                           | Total capital to risk-weighted assets    |          |   | 41,337            |  |                        |  | 40.92 |   |        |   | 8,081     |  |  | * | 8.00 |   |  |   | 10,101    |  |  | * | 10.00 |  
|                          
|                          
|                          
|                          
|                           | Tier 1 capital to risk-weighted assets   |          |   | 41,337            |  |                        |  | 40.92 |   |        |   | 4,040     |  |  | * | 4.00 |   |  |   | 6,061     |  |  | * | 6.00  |  
|                          
|                          
|                          
|                          
|                           | Tier 1 capital to average assets         |          |   | 41,337            |  |                        |  | 13.66 |   |        |   | 12,104    |  |  | * | 4.00 |   |  |   | 15,129    |  |  | * | 5.00  |  
|                          
|                          
|                          
|                          
|Charter One Bank, F.S.B.:  |                                          |          |   |                   |  |                        |  |       |   |        |   |           |  |  |   |      |   |  |   |           |  |  |   |      
|                          
|                          
|                          
|                          
|                           | Total capital to risk-weighted assets    |          |   | 2,115,164         |  |                        |  | 10.00 |   |        |   | 1,691,462 |  |  | * | 8.00 |   |  |   | 2,114,327 |  |  | * | 10.00 |  
|                          
|                          
|                          
|                          
|                           | Tier 1 capital to risk-weighted assets   |          |   | 1,605,506         |  |                        |  | 7.59  |   |        |   | N/A       |  |  |   | N/A  |   |  |   | 1,268,596 |  |  | * | 6.00  |  
|                          
|                          
|                          
|                          
|                           | Core capital to adjusted tangible assets |          |   | 1,619,927         |  |                        |  | 5.10  |   |        |   | 1,270,858 |  |  | * | 4.00 |   |  |   | 1,588,572 |  |  | * | 5.00  |  
|                          
|                          
|                          
|                          
|                           | Tangible capital to tangible assets      |          |   | 1,618,856         |  |                        |  | 5.10  |   |        |   | 476,566   |  |  | * | 1.50 |   |  |   | N/A       |  |  |   | N/A   |  
|                          
|* Greater than or equal to



As of December 31, 1999, the most recent notification from
the OTS categorized Charter One Bank, F.S.B. as well
capitalized under the regulatory framework for Prompt
Corrective Action. As of December 31, 1999, the most recent
notification from the FRB categorized Charter One as well
capitalized under the regulatory framework for Prompt
Corrective Action. To be categorized as well capitalized,
Charter One and Charter One Bank, F.S.B. must maintain minimum
total risk-based, Tier 1 risk-based and Tier 1 leverage ratios
as set forth in the table above. Charter One Commercials capital
ratios exceed  the minimum required to be well capitalized. Management does not
know of any reasons why Charter One Commercial would not be
considered well capitalized; however, as of September 30,
2000, Charter One Commercial had not received a classification
from its regulator. As of September 30, 2000, Charter One's total capital to
risk-weighted assets ratio was 9.99%, which was slightly below the well-capitalized
ratio requirement of 10.00%. Charter One anticipates being in excess of this
well-capitalized ratio requirement at December 31, 2000.

Management believes that, as of September 30, 2000, Charter One,
Charter One Commercial and Charter One Bank, F.S.B. 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 could adversely affect future
earnings and, consequently, the institution's ability to meet its
future capital requirements.

20



---



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: March 21, 2001 | /s/ Richard W. Neu

| |                                                     
| | ----------------------------------------------------
| |                                                     
| | Richard W. Neu                                      
| | Executive Vice President and Chief Financial Officer
| | (Duly Authorized Officer and Principal              
| | Financial Officer)                                  

21