SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): January 20, 2004

CHARTER ONE FINANCIAL, INC.

(Exact name of registrant as specified in its charter)


Delaware	001-15495	34-1567092

(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(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 or former address, if changed since report)

TABLE OF CONTENTS


CONSOLIDATED STATEMENTS OF INCOME
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
SELECTED STATISTICAL DATA
AVERAGE BALANCE SHEET, YIELDS AND COSTS
LOAN AND LEASE ACTIVITY
ALLOWANCE FOR LOAN AND LEASE LOSSES
NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES
LOAN AND LEASE PORTFOLIO
NONPERFORMING AND UNDERPERFORMING ASSETS

ITEM 12. Results of Operations and Financial Condition

On January 20, 2004, the Registrant issued the following earnings release for the quarterly period ended December 31, 2003:

News Release

CONTACT: ELLEN BATKIE (800) 262-6301

CHARTER ONE REPORTS 4th QTR EPS OF $.69, UP 10%

Highlights for the quarter ended 12/31/03:

•

Net earnings of $.69 per share, up 10% over 4Q 2002

•

Opened 26 banking centers, bringing 12-month total to 118 de novo locations

•

Deposit-related revenue up 16% over 4Q 2002; 20% adjusted for MasterCard debit card settlement

•

Retail consumer checking accounts up an annualized 8% in 4Q 2003, 10% in the year

•

Noninterest-bearing deposits (excluding custodial balances) up annualized 27% in 4Q 2003

•

Non-single family lending portfolio up annualized 15% in 4Q 2003

•

Permanent single-family loans and MBSs down $1.4 billion in 4Q 2003, $3.4 billion since 6/30/03

CLEVELAND, Ohio, January 20, 2004 — Charter One Financial, Inc. (NYSE:CF), the holding company of Charter One Bank, N.A., today reported net income of $158.2 million for the three months ended December 31, 2003, or $.69 per diluted share. This was up 9.5% from $.63 in diluted earnings per share reported in the year ago quarter.

Net income for the quarter generated annualized returns of 1.46% on average assets, 19.24% on average equity, and 22.31% on average tangible equity. In the year ago quarter, the returns were 1.40% on average assets, 19.11% on average equity and 22.18% on average tangible equity.

For the 12 months ended December 31, 2003, the Company reported record net income of $630.9 million, or $2.74 per diluted share, which was up 12% from $2.45 per diluted share for 2002. Returns for the year ended December 31, 2003 were 1.45% on average assets, 19.45% on average equity, and 22.51% on average tangible equity. Comparable returns for 2002 were 1.47% on average assets, 19.38% on average equity, and 22.31% on average tangible equity

“During the fourth quarter we continued the considerable progress we’ve made throughout the year in building the franchise value of Charter One,” commented Charles John Koch, Charter One’s Chairman and Chief Executive Officer. “Our primary goals for the year included an aggressive de novo banking center initiative, shifting our deposit emphasis toward non-interest bearing accounts, generating strong retail revenue growth, and increasing the non-single family portfolios. We believe the outstanding success we have had places us among the best performing retail consumer banks in the country. These strong results, coupled with an extraordinary mortgage production year, enabled us to accomplish another important strategic objective, namely the reduction of our residential mortgage exposure and resultant interest rate risk. This effort resulted in reducing that exposure by $3.4 billion in the second half of the year.”

Net interest income and net yield — Net interest income was $289.2 million for the three months ended December 31, 2003, up 1.4% from the previous quarter and down 3.2% from the year ago

quarter. Net yield on interest-earning assets was 2.84% during the fourth quarter of 2003, 2.80% during the third quarter of 2003, and 3.07% during the fourth quarter of 2002.

Retail banking revenue — Retail banking revenue totaled $102.6 million for the three months ended December 31, 2003, up 14.9% from the comparable 2002 quarter. The most significant driver of the increase was deposit-related revenue, which totaled $89.6 million, up 15.5% over the year ago quarter and up 8.4% from the third quarter of 2003. The fourth quarter of 2003 reflected reduced revenue from debit card transactions that resulted from the MasterCard settlement earlier this year. The settlement, which went into effect August 1, 2003, reduced fourth quarter revenue by approximately $3.8 million and 2003 revenue by approximately $6.0 million, or roughly $.02 per share. Without that reduction, fourth quarter 2003 deposit-related revenue would have been up 20.4% over the fourth quarter of 2002, and the year 2003 would have posted an 18.2% increase over 2002. The other components of retail banking revenue include fees from retail brokerage activities ($9.1 million, up 8.5% from the year ago quarter), and other revenue related to retail operations ($3.9 million, up 17.0%).

Mortgage banking revenue — The mortgage banking category includes revenue associated with Charter One’s mortgage banking operations, adjusted by the amortization and valuation adjustments related to its mortgage servicing rights asset (“MSR”). During the fourth quarter, MSR-related adjustments reduced revenue by $5.7 million as the Company recognized an impairment in the value of its MSR. The total mortgage banking revenue, excluding MSR-related adjustments, was $8.9 million in the fourth quarter of 2003, down from $17.2 million in the year ago quarter. The reduction was due primarily to the significant decrease in mortgage production during the fourth quarter of 2003. The portfolio serviced for others totaled $16.9 billion at December 31, 2003, and carried a weighted average coupon of 6.12%. The related MSR is now 1.05% of the portfolio at $177 million. With an average servicing spread of 36 basis points, that translates into an MSR valuation of 2.9 times the servicing spread.

Net gains — During the fourth quarter of 2003, the Company reported net gains of $63.3 million. This included $59 million in gains from the sale of $2.6 billion of mortgage-backed securities. As of December 31, 2003, there were approximately $35 million unrealized pretax gains in the mortgage-backed securities portfolio.

Leasing operations — Other income from leasing operations was $1.7 million in the fourth quarter of 2003, compared with a loss of $4.6 million in the fourth quarter of 2002. Adjustments to residual values reduced revenue by $1.7 million in the fourth quarter of 2003 and by $4.0 million in the fourth quarter of 2002.

Operating expenses — Administrative expenses totaled $217.8 million in the three months ended December 31, 2003, up 11.8% from the previous quarter and up 23.2% from the year ago quarter. Due to the continued success of the retail checking account programs and other franchise enhancing initiatives, the Company elected to spend significantly more marketing dollars ($24.0 million in the fourth quarter of 2003 versus $9.8 million in the year ago quarter) to support these continuing efforts. The higher level of expenses also included operating 131 more banking centers than a year earlier (a 28% increase in locations). Additionally, the fourth quarter expenses included approximately $7 million in items related to adjusting the size of the mortgage

operation for the significant reduction in production; these items included severance costs resulting from head-count reduction and overall excess capacity which was not reduced until January 2004. Sequentially, comparing the fourth quarter of 2003 with the third quarter of 2003, the most significant increases were in state taxes ($4 million) and costs associated with excess mortgage capacity. The efficiency ratio was 46.61% for the fourth quarter of 2003, compared to 41.84% for the third quarter of 2003 and 39.25% for the fourth quarter of 2002.

Lending portfolio growth — Loans and leases before reserves totaled $28.6 billion at December 31, 2003, up an annualized 3% in the quarter. This growth occurred notwithstanding $1.2 billion in loans securitized during the quarter. Absent securitizations, the overall portfolio would have been up an annualized 20% during the fourth quarter and up 35% during the year. Non-single family loans totaled $19.8 billion at December 31, 2003, up $719 million in the quarter, for a 15% annualized growth. The non-single family growth was led by a three-month increase of $492 million (9.9%, 39% annualized) in retail consumer loans (principally home equity lines and loans), and $81 million (12%, 48% annualized) in the small business component of corporate banking. Small business loans now total $757 million of the $1.7 billion corporate banking portfolio, up 49% from $508 million at the end of 2002.

Mortgage-backed securities available for sale — Mortgage-backed securities available for sale totaled $10.2 billion at December 31, 2003, down $884 million during the quarter and $1.3 billion during the year. At December 31, 2003, the portfolio was comprised of 94% in fixed-rate securities with a duration of approximately 3.5 years, and 6% in floating-rate securities.

Deposits — “At the beginning of this year, we indicated we would emphasize noninterest-bearing checking growth, as opposed to total deposits as in previous years,” Mr. Koch stated. “The result was a net growth in retail noninterest-bearing deposits of over $700 million, up 48% on the year, far exceeding all our expectations. That translates into a solid increase in franchise value. What makes this most impressive is that nearly all the growth is coming through retail consumer and small business accounts.”

Total deposits totaled $27.2 billion at December 31, 2003, down $843 million in the fourth quarter. The decrease resulted from a $470 million decrease in CDs and a $365 million decrease in custodial balances. Core deposits (checking, money market and savings accounts) accounted for $16.9 billion, or 62% of the total. Excluding custodial balances, noninterest-bearing deposits totaled $2.2 billion at December 31, 2003, up $137 million, or an annualized 27%, in the fourth quarter and up $709 million, or 48%, in 2003. Custodial balances totaled $355 million at December 31, 2003, $719 million at September 30, 2003, and $721 million at December 31, 2002.

The push into small business banking continued to post impressive results during the fourth quarter. Business deposits, which are included in core deposits, increased to $2.1 billion at December 31, 2003, up $84 million, or 4% (17% annualized), during the three-month period, and up $859 million, or 69% for the year.

Finally, the retail sales force focused intensely on net growth in the number of checking accounts in 2003. Charter One ended the fourth quarter with 1,465,000 checking accounts, up from

1,435,300 accounts at September 30, 2003 (8% annualized growth rate) and 1,332,400 accounts at the end of 2002 (10% growth rate).

Retail expansion update — During 2003, Charter One initiated an aggressive de novo expansion plan. The initiative has led to 118 net new banking centers since the end of 2002 (excluding 13 added in the June acquisition of Advance Bancorp), with 26 opened during the fourth quarter. In-store banking centers represented 96 of the banking centers opened this year, with 15 of those being opened in the fourth quarter. Charter One’s in-store franchise now includes 146 banking centers, or 25% of its retail network. Results to date continue to exceed our expectations, with in-store locations consistently breaking even in six to nine months. The Company expects additional expansion during 2004, looking to open approximately 125 additional banking centers, including 73 in-store locations.

Credit quality and allowance for loan losses — Net charge-offs during the fourth quarter of 2003 totaled $23 million, or .32% of average loans and leases (annualized), down from .37% in the third quarter of 2003 and .38% in the fourth quarter of 2002. The allowance for loan and lease losses totaled $384 million at December 31, 2003, which was 1.34% of total loans and leases at December 31, 2003, and represented almost four years of coverage to fourth quarter annualized levels.

At December 31, 2003, nonperforming assets totaled $206 million or .73% of loans, leases and collateral owned, up from $189 million or .67% at September 30, 2003. Underperforming assets (including nonperforming assets, troubled debt restructuring and loans delinquent 90 days and still accruing) totaled $251 million or .89% of loans, leases and collateral owned, compared to $240 million or .85% at September 30, 2003. The increase during the quarter was attributable to two commercial real estate loans in the Company’s footprint, both of which are well secured.

Stock repurchase update — On April 23, 2002, the Company authorized a new repurchase program that permits the repurchase of 10% of its outstanding shares, or approximately 22 million shares. The Company repurchased 984,000 shares under the authorization during the fourth quarter of 2003 at an average cost of $31.17 per share, and 7.6 million shares at an average cost of $31.03 per share during the 12 months ended December 31, 2003. As of December 31, 2003, the total repurchased under the current authorization was 15.6 million shares at an average cost of $31.00 per share, leaving approximately 6 million shares remaining under the program.

Company profile — Charter One has $43 billion in total assets, making it one of the 25 largest bank holding companies in the country. The Bank has nearly 600 banking center locations in Ohio, Michigan, New York, Illinois, Massachusetts, Vermont, Indiana, Connecticut and Pennsylvania. The Company’s diverse product set includes: consumer banking, indirect auto finance, commercial leasing, business lending, commercial real estate lending, mortgage banking, and retail investment products. For additional information, including press releases, investor presentations, committee charters, and reports filed with the SEC, investors are directed to Charter One’s web site: www.charterone.com.

The Company has scheduled a conference call to discuss quarterly and annual results, along with the outlook for 2004, for 10:00 a.m. eastern time on Wednesday, January 21, 2004. To participate in the call, dial (888) 428-4479 and ask for the Charter One 4th quarter earnings call. The call is available on a replay basis until January 28, 2004 by dialing (320) 365-3844, access code 714963. Alternatively, the call will be available through Charter One’s website, both on a live and a replay basis.

Forward-Looking Information
This release contains certain estimates of future operating trends for Charter One Financial, Inc., as well as estimates of financial condition and earnings, operating efficiencies, revenue creation, lending origination, loan sale volumes, charge-offs and loan loss provisions. These estimates constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995), which involve significant risks and uncertainties. Actual results may differ materially from the results discussed in these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) revenue growth is lower than expected; (2) competitive pressures among depository institutions increase significantly; (3) changes in the interest rate environment reduce interest margins; (4) deterioration in the credit quality of the Company’s loan portfolio requires higher loss provisions; (5) general economic conditions, either nationally or in the states in which the Company does business, are less favorable than expected; (6) legislation or regulatory changes adversely affect the businesses in which the Company is engaged; and (7) ongoing geopolitical conflicts add unexpected stress on the economy or customer base. Other factors that may affect these statements are identified in previous filings with the Securities and Exchange Commission.

####

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


					Three Months Ended

					12/31/03		9/30/03			6/30/03			3/31/03			12/31/02

					(Dollars in thousands, except per share data)
Interest income:
	Loans and leases				$	376,741	$	368,952		$	367,602		$	377,724		$	418,711
	Mortgage-backed securities:
		Available for sale				118,903		129,695			154,490			149,311			131,821
		Held to maturity				4,065		5,326			6,858			8,269			9,991
	Investment securities:
		Available for sale				3,590		3,563			3,297			3,043			2,969
		Held to maturity				48		51			56			54			60
	Other interest-earning assets					7,619		7,531			7,856			7,385			8,184

			Total interest income			510,966		515,118			540,159			545,786			571,736

Interest expense:
	Deposits					110,746		115,862			126,734			133,743			154,018
	Federal Home Loan Bank advances					97,385		100,813			104,025			99,799			105,492
	Other borrowings					13,678		13,185			13,969			13,203			13,627

			Total interest expense			221,809		229,860			244,728			246,745			273,137

				Net interest income		289,157		285,258			295,431			299,041			298,599
Provision for loan and lease losses						17,778		37,663			35,360			61,471			60,314

				Net interest income after provision for loan and lease losses		271,379		247,595			260,071			237,570			238,285

Other income:
	Retail banking					102,593		94,183			97,087			84,100			89,261
	Mortgage banking					3,240		65,604			(23,895	)		(27	)		(1,992	)
	Leasing operations					1,668		(4,118	)		(12,230	)		(6,856	)		(4,566	)
	Net gains					63,274		16,112			108,549			76,653			61,585
	Bank owned life insurance and other					7,489		8,638			8,450			7,956			7,834

			Total other income			178,264		180,419			177,961			161,826			152,122

Administrative expenses:
	Compensation and employee benefits					101,612		92,582			90,790			87,056			81,827
	Net occupancy and equipment					34,124		31,985			30,466			31,186			30,360
	Marketing expenses					24,010		22,411			20,205			13,647			9,843
	Federal deposit insurance premiums					1,066		1,118			1,125			1,142			1,142
	Other administrative expenses					57,034		46,733			52,168			50,261			53,716

			Total administrative expenses			217,846		194,829			194,754			183,292			176,888

Income before income taxes						231,797		233,185			243,278			216,104			213,519
Income taxes						73,583		74,036			77,241			68,613			67,793

			Net income		$	158,214	$	159,149		$	166,037		$	147,491		$	145,726

Basic earnings per share					$	.71	$	.71		$	.74		$	.66		$	.65

Diluted earnings per share					$	.69	$	.69		$	.72		$	.64		$	.63

Average common shares outstanding:
	Basic					222,720,197		224,399,805			225,501,687			224,997,398			225,561,551

	Diluted					228,809,671		230,661,929			231,095,694			230,460,847			231,502,688

Cash dividends declared per share					$	.26	$	.26		$	.24		$	.22		$	.22

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


					Twelve Months Ended

					12/31/03			12/31/02

					(Dollars in thousands,
					except per share data)
Interest income:
	Loans and leases				$	1,491,019		$	1,671,843
	Mortgage-backed securities:
		Available for sale				552,399			519,821
		Held to maturity				24,518			47,747
	Investment securities:
		Available for sale				13,493			11,495
		Held to maturity				209			252
	Other interest-earning assets					30,391			35,303

			Total interest income			2,112,029			2,286,461

Interest expense:
	Deposits					487,085			654,816
	Federal Home Loan Bank advances					402,022			416,864
	Other borrowings					54,035			44,951

			Total interest expense			943,142			1,116,631

				Net interest income		1,168,887			1,169,830
Provision for loan and lease losses						152,272			192,003

				Net interest income after provision for loan and lease losses		1,016,615			977,827

Other income:
	Retail banking					377,963			330,735
	Mortgage banking					44,922			(18,495	)
	Leasing operations					(21,536	)		(3,575	)
	Net gains					264,588			205,033
	Bank owned life insurance and other					32,533			33,848

			Total other income			698,470			547,546

Administrative expenses:
	Compensation and employee benefits					372,040			321,167
	Net occupancy and equipment					127,761			116,845
	Marketing expenses					80,273			40,472
	Federal deposit insurance premiums					4,451			4,563
	Other administrative expenses					206,196			195,925

			Total administrative expenses			790,721			678,972

Income before income taxes						924,364			846,401
Income taxes						293,473			268,733

			Net income		$	630,891		$	577,668

Basic earnings per share					$	2.82		$	2.52

Diluted earnings per share					$	2.74		$	2.45

Average common shares outstanding:
	Basic					224,404,772			229,302,385

	Diluted					230,257,035			236,115,843

Cash dividends declared per share					$	.98		$	.83

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


				12/31/03			9/30/03			6/30/03			3/31/03			12/31/02

				(Dollars in thousands, except per share data)
ASSETS
Cash and deposits with banks				$	527,649		$	526,534		$	586,018		$	507,726		$	446,701
Federal funds sold and other					517			516			10,514			1,350,513			512

		Total cash and cash equivalents			528,166			527,050			596,532			1,858,239			447,213
Investments securities:
	Available for sale				273,260			270,511			336,126			227,137			210,095
	Held to maturity				3,505			3,952			3,691			4,157			3,973
Mortgage-backed securities:
	Available for sale				10,193,798			11,078,285			14,313,397			12,799,506			11,536,608
	Held to maturity				251,449			292,336			362,768			445,207			540,781
Loans and leases, net					28,130,017			27,735,087			25,127,882			24,685,258			25,852,846
Loans held for sale					120,431			296,078			362,270			291,729			351,892
Bank owned life insurance					828,678			823,676			834,337			837,660			829,043
Federal Home Loan Bank and Federal Reserve Bank stock					705,244			700,170			694,073			679,339			681,923
Premises and equipment, net					404,086			391,615			375,256			355,084			353,730
Accrued interest receivable					140,857			147,254			153,346			149,989			154,962
Real estate and other collateral owned					36,643			48,198			40,220			42,106			42,980
Mortgage servicing rights					177,244			168,697			115,242			139,085			128,564
Goodwill					415,696			415,696			433,014			386,372			386,372
Other assets					418,992			380,647			386,785			347,735			375,090

		Total assets		$	42,628,066		$	43,279,252		$	44,134,939		$	43,248,603		$	41,896,072

LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Checking accounts:
	Interest-bearing			$	5,666,346		$	5,810,478		$	6,493,279		$	7,267,602		$	7,460,530
	Noninterest-bearing				2,532,616			2,760,848			2,656,047			2,385,243			2,189,903

		Total checking accounts			8,198,962			8,571,326			9,149,326			9,652,845			9,650,433
	Money market and savings accounts				8,686,356			8,686,491			8,475,706			8,207,576			8,157,534
	Certificates of deposit				10,318,001			10,788,421			10,314,742			9,523,194			9,719,876

			Total deposits		27,203,319			28,046,238			27,939,774			27,383,615			27,527,843
Federal Home Loan Bank advances					9,847,293			9,820,184			10,582,255			10,446,630			9,037,925
Federal funds purchased and repurchase agreements					269,319			62,716			51,399			52,496			283,912
Other borrowings					697,753			704,629			706,083			707,591			708,853
Advance payments by borrowers for taxes and insurance					61,054			50,768			58,593			46,706			23,595
Accrued interest payable					35,944			65,075			46,418			72,017			38,372
Accrued expenses and other liabilities					1,237,515			1,288,801			1,387,835			1,307,416			1,191,747

			Total liabilities		39,352,197			40,038,411			40,772,357			40,016,471			38,812,247

Shareholders’ equity:
	Preferred stock — $.01 par value per share; 20,000,000 shares authorized and unissued				—			—			—			—			—
	Common stock — $.01 par value per share; 360,000,000 shares authorized; 229,940,729, 229,944,441, 229,946,762, 227,571,468 and 227,571,468 shares issued				2,299			2,299			2,299			2,276			2,276
	Additional paid-in capital				2,280,335			2,274,947			2,270,580			2,197,388			2,193,095
	Retained earnings				1,178,803			1,098,042			1,009,784			908,486			824,564
	Less 6,767,285, 6,953,759, 3,851,660, 2,539,076 and 2,781,151 shares of common stock held in treasury at cost				(209,653	)		(215,085	)		(116,652	)		(74,423	)		(82,610	)
	Accumulated other comprehensive income				24,085			80,638			196,571			198,405			146,500

			Total shareholders’ equity		3,275,869			3,240,841			3,362,582			3,232,132			3,083,825

			Total liabilities and shareholders’ equity	$	42,628,066		$	43,279,252		$	44,134,939		$	43,248,603		$	41,896,072

CHARTER ONE FINANCIAL, INC.
SELECTED STATISTICAL DATA
(unaudited)


		Three Months Ended

		12/31/03			9/30/03			6/30/03			3/31/03			12/31/02

Annualized returns and ratios based on net income:
	Return on average assets		1.46	%		1.46	%		1.50	%		1.38	%		1.40	%
	Return on average equity		19.24			20.12			19.86			18.48			19.11
	Average equity to average assets		7.58			7.25			7.55			7.46			7.35
	Net interest income to administrative expenses		1.33	x		1.46	x		1.52	x		1.63	x		1.69	x
	Administrative expenses to average assets		2.01	%		1.79	%		1.76	%		1.71	%		1.70	%
	Efficiency ratio(1)		46.61			41.84			41.14			39.77			39.25
Annualized return on average tangible equity(2)			22.31			23.59			22.74			21.29			22.18

(1)		Computed as the ratio of total administrative expenses to net interest income and total other income.

(2)		Computed as the ratio of net income, excluding the amortization of other intangible assets, to average tangible equity.


		Twelve Months Ended

		12/31/03			12/31/02

Returns and ratios based on net income:
	Return on average assets		1.45	%		1.47	%
	Return on average equity		19.45			19.38
	Average equity to average assets		7.45			7.59
	Net interest income to administrative expenses		1.48	x		1.72	x
	Administrative expenses to average assets		1.82	%		1.73	%
	Efficiency ratio(1)		42.34			39.54
Return on average tangible equity(2)			22.51			22.31

(1)		Computed as the ratio of total administrative expenses to net interest income and total other income.

(2)		Computed as the ratio of net income, excluding the amortization of other intangible assets, to average tangible equity.


		12/31/03			9/30/03			6/30/03			3/31/03			12/31/02

End of period capitalization:
	Equity to assets		7.68	%		7.49	%		7.62	%		7.47	%		7.36	%
	Tangible equity to assets		6.63			6.45			6.56			6.50			6.36
	Book value per share	$	14.68		$	14.53		$	14.87		$	14.36		$	13.72
	Tangible book value per share		12.67			12.52			12.81			12.50			11.86
Miscellaneous end-of-period data:
	Number of employees (full-time equivalents)		7,804			7,765			7,703			7,198			6,997
	Number of full-service branches		592			566			522			477			461
	Number of loan production offices		33			27			28			26			26
	Number of ATMs		969			956			953			918			913

CHARTER ONE FINANCIAL, INC.
AVERAGE BALANCE SHEET, YIELDS AND COSTS
(unaudited)


					Three Months Ended

					12/31/03			9/30/03			6/30/03			3/31/03			12/31/02

					(Dollars in thousands)
Average balance sheet data:
	Interest-earning assets:
		Loans and leases			$	28,876,531		$	26,993,081		$	26,101,819		$	25,851,471		$	26,690,752
		Mortgage-backed securities				10,849,575			12,732,102			14,405,655			13,137,545			11,218,473
		Investment securities				265,043			286,497			260,634			210,920			212,698
		Other interest-earning assets				715,197			723,721			839,597			762,760			725,937

			Total interest-earning assets			40,706,346			40,735,401			41,607,705			39,962,696			38,847,860
	Allowance for loan and lease losses					(396,096	)		(379,527	)		(360,448	)		(327,090	)		(292,981	)
	Noninterest-earning assets(1)					3,089,013			3,272,787			3,044,576			3,150,359			2,946,801

				Total assets	$	43,399,263		$	43,628,661		$	44,291,833		$	42,785,965		$	41,501,680

	Interest-bearing liabilities:
		Checking accounts			$	5,716,427		$	6,166,100		$	6,951,974		$	7,541,679		$	6,801,571
		Money market and savings accounts				8,736,844			8,545,286			8,332,278			7,929,274			8,579,110
		Certificates of deposit				10,699,475			10,708,517			9,733,110			9,562,013			9,898,021

			Total interest-bearing deposits			25,152,746			25,419,903			25,017,362			25,032,966			25,278,702
		Federal Home Loan Bank advances				10,147,668			10,265,634			11,397,410			10,410,188			9,026,637
		Other borrowings				925,641			871,430			874,062			866,495			945,945

			Total interest-bearing liabilities			36,226,055			36,556,967			37,288,834			36,309,649			35,251,284

	Noninterest-bearing liabilities:
		Demand deposit accounts				2,505,876			2,615,262			2,308,993			2,017,036			2,024,854
		Other noninterest-bearing liabilities				1,377,774			1,292,960			1,349,173			1,266,385			1,175,213

			Total noninterest-bearing liabilities			3,883,650			3,908,222			3,658,166			3,283,421			3,200,067

				Total liabilities		40,109,705			40,465,189			40,947,000			39,593,070			38,451,351
	Shareholders’ equity					3,289,558			3,163,472			3,344,833			3,192,895			3,050,329

				Total liabilities and shareholders’ equity	$	43,399,263		$	43,628,661		$	44,291,833		$	42,785,965		$	41,501,680

Yields and costs during period:
	Weighted average yield:
		Loans and leases(2)				5.19	%		5.46	%		5.64	%		5.86	%		6.26	%
		Mortgage-backed securities				4.53			4.24			4.48			4.80			5.06
		Investment securities				5.49			5.04			5.15			5.87			5.70
		Other interest-earning assets				4.17			4.07			3.70			3.87			4.41
			Total interest-earning assets			5.00			5.05			5.19			5.48			5.88
	Weighted average cost(3):
		Checking accounts				.88			.96			1.35			1.65			1.92
		Money market and savings accounts				1.04			1.10			1.50			1.55			1.93
		Certificates of deposit				2.79			2.86			2.97			3.09			3.19
			Total interest-bearing deposits			1.75			1.81			2.03			2.17			2.42
		Federal Home Loan Bank advances				3.80			3.89			3.66			3.88			4.64
		Other borrowings				5.89			6.03			6.38			6.10			5.74
				Total interest-bearing liabilities		2.43			2.49			2.63			2.75			3.07
	Interest rate spread					2.57			2.56			2.56			2.73			2.81
	Net yield on interest-earning assets					2.84			2.80			2.84			2.99			3.07

(1)		Includes mark-to-market adjustments on securities available for sale.

(2)		Excludes impact of related tax benefits.

(3)		Includes the annualized effect of interest rate risk management instruments.

CHARTER ONE FINANCIAL, INC.
AVERAGE BALANCE SHEET, YIELDS AND COSTS
(unaudited)


					Twelve Months Ended

					12/31/03			12/31/02

					(Dollars in thousands)
Average balance sheet data:
	Interest-earning assets:
		Loans and leases			$	26,964,344		$	25,647,597
		Mortgage-backed securities				12,775,588			9,919,641
		Investment securities				258,519			177,498
		Other interest-earning assets				760,089			894,898

			Total interest-earning assets			40,758,540			36,639,634
	Allowance for loan and lease losses					(366,019	)		(268,654	)
	Noninterest-earning assets(1)					3,137,119			2,877,215

				Total assets	$	43,529,640		$	39,248,195

	Interest-bearing liabilities:
		Checking accounts			$	6,587,872		$	6,278,844
		Money market and savings accounts				8,388,570			8,084,926
		Certificates of deposit				10,180,355			10,054,727

			Total interest-bearing deposits			25,156,797			24,418,497
		Federal Home Loan Bank advances				10,553,712			8,233,376
		Other borrowings				884,670			732,466

			Total interest-bearing liabilities			36,595,179			33,384,339

	Noninterest-bearing liabilities:
		Demand deposit accounts				2,363,839			1,816,036
		Other noninterest-bearing liabilities				1,326,714			1,066,934

			Total noninterest-bearing liabilities			3,690,553			2,882,970

				Total liabilities		40,285,732			36,267,309
	Shareholders’ equity					3,243,908			2,980,886

				Total liabilities and shareholders’ equity	$	43,529,640		$	39,248,195

Yields and costs during period:
	Weighted average yield:
		Loans and leases(2)				5.52	%		6.52	%
		Mortgage-backed securities				4.52			5.72
		Investment securities				5.30			6.62
		Other interest-earning assets				3.94			3.89
			Total interest-earning assets			5.17			6.24
	Weighted average cost(3):
		Checking accounts				1.24			2.12
		Money market and savings accounts				1.29			2.15
		Certificates of deposit				2.92			3.46
			Total interest-bearing deposits			1.94			2.68
		Federal Home Loan Bank advances				3.80			5.06
		Other borrowings				6.10			6.12
				Total interest-bearing liabilities		2.58			3.34
	Interest rate spread					2.59			2.90
	Net yield on interest-earning assets					2.87			3.19

(1)		Includes mark-to-market adjustments on securities available for sale.

(2)		Excludes impact of related tax benefits.

(3)		Includes the annualized effect of interest rate risk management instruments.

CHARTER ONE FINANCIAL, INC.
LOAN AND LEASE ACTIVITY
(unaudited)


					Three Months Ended

					12/31/03		9/30/03		6/30/03		3/31/03			12/31/02

					(Dollars in thousands)
Originations:
Real estate:
	Permanent:
		One-to-four family			$	1,848,459	$	3,896,869	$	3,555,968	$	3,095,718		$	3,440,287
		Multifamily				84,470		75,185		57,451		51,440			48,281
		Commercial				92,383		124,806		60,226		90,213			62,335

			Total permanent loans			2,025,312		4,096,860		3,673,645		3,237,371			3,550,903

	Construction:
		One-to-four family				45,304		62,180		53,537		35,556			40,674
		Multifamily				84,815		30,371		7,613		19,283			40,408
		Commercial				29,921		16,656		30,246		10,830			53,469

			Total construction loans			160,040		109,207		91,396		65,669			134,551

				Total real estate loans originated		2,185,352		4,206,067		3,765,041		3,303,040			3,685,454

Retail consumer						1,167,620		1,431,291		1,209,221		1,079,290			1,205,611
Automobile						719,738		909,477		1,026,245		981,114			916,539
Consumer finance						92,340		128,536		122,839		101,927			100,568
Leases						127,148		152,279		73,946		101,571			200,083
Corporate banking						582,832		443,732		473,677		448,326			451,915

			Total loans and leases originated			4,875,030		7,271,382		6,670,969		6,015,268			6,560,170

Acquired through business combinations and purchases						3,058		2,737		403,324		3,765			4,316

Sales and principal reductions:
	Loans sold					670,456		1,067,083		885,179		763,051			742,255
	Loans exchanged for mortgage-backed securities					1,207,646		225,498		2,346,609		3,419,116			1,600,962
	Principal reductions					2,744,598		3,447,925		3,260,094		3,025,830			3,587,423

			Total sales and principal reductions			4,622,700		4,740,506		6,491,882		7,207,997			5,930,640

				Increase (decrease) before net items	$	255,388	$	2,533,613	$	582,411	$	(1,188,964	)	$	633,846


					Twelve Months Ended

					12/31/03		12/31/02

					(Dollars in thousands)
Originations:
Real estate:
	Permanent:
		One-to-four family			$	12,397,014	$	10,554,142
		Multifamily				268,546		157,166
		Commercial				367,628		237,710

			Total permanent loans			13,033,188		10,949,018

	Construction:
		One-to-four family				196,577		172,081
		Multifamily				142,082		79,346
		Commercial				87,653		164,577

			Total construction loans			426,312		416,004

				Total real estate loans originated		13,459,500		11,365,022

Retail consumer						4,887,422		4,091,298
Automobile						3,636,574		3,395,273
Consumer finance						445,642		285,920
Leases						454,944		521,096
Corporate banking						1,948,567		1,717,328

			Total loans and leases originated			24,832,649		21,375,937

Acquired through business combinations and purchases						412,884		218,308

Sales and principal reductions:
	Loans sold					3,385,769		2,394,524
	Loans exchanged for mortgage-backed securities					7,198,869		6,667,082
	Principal reductions					12,478,447		11,954,076

			Total sales and principal reductions			23,063,085		21,015,682

				Increase before net items	$	2,182,448	$	578,563

CHARTER ONE FINANCIAL, INC.
ALLOWANCE FOR LOAN AND LEASE LOSSES
(unaudited)


					Three Months Ended

					12/31/03			9/30/03			6/30/03			3/31/03			12/31/02

					(Dollars in thousands)
Allowance for loan and lease losses:
	Balance, beginning of period				$	389,355		$	376,393		$	355,926		$	328,017		$	292,800
	Provision for loan and lease losses					17,778			37,663			35,360			61,471			60,314
	Acquired through business combination					—			—			4,969			—			—
	Loans and leases charged off:
		One-to-four family				(686	)		(655	)		(1,036	)		(670	)		(1,127	)
		Commercial real estate				(419	)		(474	)		(253	)		(500	)		(144	)
		Retail consumer				(2,234	)		(2,819	)		(2,596	)		(3,478	)		(3,004	)
		Automobile				(16,794	)		(15,869	)		(13,628	)		(16,450	)		(15,941	)
		Consumer finance				(3,811	)		(4,396	)		(3,975	)		(4,537	)		(5,785	)
		Leases				—			—			(2,095	)		(6,061	)		(88	)
		Corporate banking				(5,018	)		(6,610	)		(2,652	)		(7,245	)		(5,799	)

			Total charge-offs			(28,962	)		(30,823	)		(26,235	)		(38,941	)		(31,888	)

	Recoveries:
		One-to-four family				24			31			41			17			42
		Commercial real estate				129			68			61			148			41
		Retail consumer				380			1,044			548			433			588
		Automobile				4,010			4,279			4,561			4,115			3,582
		Consumer finance				264			329			235			105			191
		Leases				253			228			606			393			1,897
		Corporate banking				502			143			321			168			450

			Total recoveries			5,562			6,122			6,373			5,379			6,791

				Net loan and lease charge-offs		(23,400	)		(24,701	)		(19,862	)		(33,562	)		(25,097	)

	Balance, end of period				$	383,733		$	389,355		$	376,393		$	355,926		$	328,017

	Net charge-offs to average loans and leases (annualized)					.32	%		.37	%		.30	%		.52	%		.38	%


					Twelve Months Ended

					12/31/03			12/31/02

					(Dollars in thousands)
Allowance for loan and lease losses:
	Balance, beginning of period				$	328,017		$	255,478
	Provision for loan and lease losses					152,272			192,003
	Acquired through business combination					4,969			3,184
	Loans and leases charged off:
		One-to-four family				(3,047	)		(5,802	)
		Commercial real estate				(1,646	)		(1,352	)
		Retail consumer				(11,127	)		(13,100	)
		Automobile				(62,741	)		(78,965	)
		Consumer finance				(16,719	)		(26,395	)
		Leases				(8,156	)		(2,868	)
		Corporate banking				(21,525	)		(16,612	)

			Total charge-offs			(124,961	)		(145,094	)

	Recoveries:
		One-to-four family				113			957
		Commercial real estate				406			659
		Retail consumer				2,405			1,834
		Automobile				16,965			12,687
		Consumer finance				933			524
		Leases				1,480			2,327
		Corporate banking				1,134			3,458

			Total recoveries			23,436			22,446

				Net loan and lease charge-offs		(101,525	)		(122,648	)

	Balance, end of period				$	383,733		$	328,017

	Net charge-offs to average loans and leases					.38	%		.48	%

CHARTER ONE FINANCIAL, INC.
NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES
(unaudited)


			Three Months Ended

			12/31/03			9/30/03			6/30/03			3/31/03			12/31/02

			(Dollars in thousands)
Average loans and leases:
	Mortgage		$	12,333,237		$	11,481,071		$	11,126,226		$	11,083,170		$	11,659,164
	Retail consumer			5,346,225			4,535,869			4,329,896			4,510,460			5,264,728
	Automobile			6,360,687			6,317,768			6,088,204			5,763,289			5,447,392
	Consumer finance			1,079,984			1,055,588			1,023,295			995,653			980,524
	Leases			2,196,592			2,116,646			2,127,384			2,145,022			2,085,474
	Corporate banking			1,559,806			1,486,139			1,406,814			1,353,877			1,253,470

		Total average loans and leases	$	28,876,531		$	26,993,081		$	26,101,819		$	25,851,471		$	26,690,752

Net charge-offs (recoveries) to average loans and leases (annualized):
	Mortgage			.03	%		.04	%		.04	%		.04	%		.04	%
	Retail consumer			.14			.16			.19			.27			.18
	Automobile			.80			.73			.60			.86			.91
	Consumer finance			1.31			1.54			1.46			1.78			2.28
	Leases			(.05	)		(.04	)		.28			1.06			(.35	)
	Corporate banking			1.16			1.74			.66			2.09			1.71
		Total		.32			.37			.30			.52			.38

LOAN AND LEASE PORTFOLIO
(unaudited)


				12/31/03			9/30/03			6/30/03			3/31/03			12/31/02

				(Dollars in thousands)
Loan and lease portfolio, net(1):
	One-to-four family:
		Permanent:
			Fixed rate	$	6,001,695		$	6,737,463		$	5,411,639		$	5,506,314		$	5,869,554
			Adjustable rate		2,830,677			2,600,507			2,577,778			2,546,426			2,437,166
		Construction			485,354			451,093			418,485			412,973			427,729

					9,317,726			9,789,063			8,407,902			8,465,713			8,734,449

	Commercial real estate:
		Multifamily			776,528			752,006			739,464			705,851			730,263
		Commercial			1,193,377			1,181,362			1,148,073			1,058,610			1,024,840
		Construction			521,680			528,628			536,330			496,106			506,178

					2,491,585			2,461,996			2,423,867			2,260,567			2,261,281

	Consumer:
		Retail			5,491,923			4,999,488			4,180,702			4,173,080			5,494,453
		Automobile			6,364,703			6,376,830			6,247,964			5,934,502			5,606,329
		Consumer finance			1,092,533			1,073,054			1,038,517			1,005,077			984,772

					12,949,159			12,449,372			11,467,183			11,112,659			12,085,554

	Business:
		Leases			2,195,418			2,166,350			2,104,713			2,125,905			2,133,468
		Corporate banking			1,680,293			1,553,739			1,462,880			1,368,069			1,318,003

					3,875,711			3,720,089			3,567,593			3,493,974			3,451,471

	Loans and leases before allowance for loan and lease losses				28,634,181			28,420,520			25,866,545			25,332,913			26,532,755
	Allowance for loan and lease losses				(383,733	)		(389,355	)		(376,393	)		(355,926	)		(328,017	)

		Loans and leases, net(1)		$	28,250,448		$	28,031,165		$	25,490,152		$	24,976,987		$	26,204,738

Portfolio of loans serviced for others				$	16,877,169		$	16,700,490		$	18,948,077		$	18,713,649		$	16,893,609

(1) Includes loans held for sale.

CHARTER ONE FINANCIAL, INC.
NONPERFORMING AND UNDERPERFORMING ASSETS
(unaudited)


					12/31/03			9/30/03			6/30/03			3/31/03			12/31/02

					(Dollars in thousands)
Nonperforming assets:
	Nonaccrual loans and leases:
		Real estate mortgage loans:
			One-to-four family		$	23,301		$	22,784		$	25,723		$	27,867		$	27,904
			Multifamily and commercial			33,692			11,333			16,764			5,591			5,369
			Construction and land			25,161			22,974			27,483			8,015			9,885

				Total real estate mortgage loans		82,154			57,091			69,970			41,473			43,158
		Retail consumer				9,818			10,405			10,652			12,046			13,937
		Automobile				—			—			—			—			—
		Consumer finance				42,843			42,589			43,175			42,562			40,227
		Leases				6,360			6,569			6,877			15,264			6,211
		Corporate banking				28,408			25,078			35,595			42,068			39,098

				Total nonaccrual loans and leases		169,583			141,732			166,269			153,413			142,631
	Restructured real estate mortgage loans					474			481			488			494			501

				Total nonperforming loans and leases		170,057			142,213			166,757			153,907			143,132
	Real estate and other collateral owned					35,654			47,249			39,278			40,020			40,776

				Total nonperforming assets	$	205,711		$	189,462		$	206,035		$	193,927		$	183,908

Ratio of:
	Nonperforming loans and leases to total loans and leases					.60	%		.51	%		.65	%		.62	%		.55	%
	Nonperforming assets to total assets					.48			.44			.47			.45			.44
	Nonperforming assets to total loans, leases and real estate and other collateral owned					.73			.67			.81			.78			.70
	Allowance for loan and lease losses to:
		Nonperforming loans and leases				225.65			273.78			225.71			231.26			229.17
		Total loans and leases before allowance				1.34			1.37			1.46			1.40			1.24
Accruing loans and leases delinquent more than 90 days:
	Real estate mortgage loans:
		One-to-four family			$	21,549		$	21,239		$	18,056		$	23,507		$	25,643
		Multifamily and commercial				—			—			396			—			—
		Construction and land				—			—			—			—			—

			Total real estate mortgage loans			21,549			21,239			18,452			23,507			25,643

	Retail consumer					2,722			2,654			3,056			3,229			4,758
	Automobile					2,771			2,680			2,254			3,579			3,621
	Consumer finance					17,839			23,298			21,172			27,395			26,739
	Leases					52			—			—			181			19
	Corporate banking					522			311			117			471			1,536

			Total accruing loans and leases delinquent more than 90 days		$	45,455		$	50,182		$	45,051		$	58,362		$	62,316

Total underperforming assets					$	251,166		$	239,644		$	251,086		$	252,289		$	246,224

Ratio of:
	Underperforming assets to total assets					.59	%		.55	%		.57	%		.58	%		.59	%
	Underperforming assets to total loans, leases and real estate and other collateral owned					.89			.85			.98			1.01			.94

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: January 20, 2004		By: /s/ Robert J. Vana

		Robert J. Vana Senior Vice President, Chief Corporate Counsel and Corporate Secretary

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CHARTER ONE FINANCIAL INC 8-K