FirstMerit Reports Fourth Quarter 2013 EPS of $0.33 Per Share
AKRON, Ohio, Jan. 28, 2014 /PRNewswire/ --
Quarterly Highlights include:
- Profitability Sustained: 59th consecutive quarter of profitability.
- Organic growth continued: Average loan growth of $175.0 million, or 1.24% from the prior quarter; average core deposit growth of $230.5 million or 1.38% from the prior quarter.
- Credit quality remained superior: Net charge-offs to average originated loans of 0.13%; nonperforming assets as a percent of period end originated loans plus other real estate at 0.60%.
- Balance sheet remained strong: Strong tangible common equity ratio at 7.71%.
- Integration successfully completed: Conversion to unified operating systems in October, operating consistently across five Midwestern states.
FirstMerit Corporation (Nasdaq: FMER) (the "Corporation") reported fourth quarter 2013 net income of $57.2 million, or $0.33 per diluted share. This compares with $40.7 million, or $0.23 per diluted share, for the third quarter 2013 and $38.2 million, or $0.35 per diluted share, for the fourth quarter 2012. Included in noninterest expense for the fourth quarter 2013 were $6.0 million of pre-tax merger related costs compared to $33.4 million for the third quarter 2013. Pre-tax costs associated with anticipated branch closures of $1.0 million were recognized in the fourth quarter of 2013 and are included within noninterest income.
(Logo: http://photos.prnewswire.com/prnh/20070920/CLTU138LOGO )
Returns on average common equity ("ROE") and average assets ("ROA") for the fourth quarter 2013 were 8.48% and 0.94%, respectively, compared with 6.07% and 0.67%, respectively, for the third quarter 2013 and 9.30% and 1.03%, respectively, for the fourth quarter 2012.
"FirstMerit's strong performance in the fourth quarter of 2013 was representative of our entire year's accomplishments. Through our strategic acquisition of Citizens Republic Bancorp as well as our continued success in our legacy markets, we expanded our balance sheet with robust loan and core deposit growth while maintaining pristine credit metrics. We substantially completed the integration of Citizens Republic Bancorp with a seamless conversion of all operating systems in October, and we now offer the same wide array of competitive products and industry leading services across our entire five-state Midwest footprint. We are aggressively competing in our new markets, backed with a comprehensive marketing and sponsorship program to build awareness, while maintaining a focused approach on further penetrating our legacy markets. We continue to work to take market share and enhance shareholder value," said Paul Greig, chairman, president and CEO, FirstMerit Corporation.
Except as noted, the Citizens Republic Bancorp ("Citizens") acquisition is primarily contributing to the increases over the prior year period in the income statement and balance sheets. Citizens' results of operations are included in the reported current year to date period results since the date of acquisition, April 12, 2013.
"Acquired loans", as used herein, are those assumed in the Citizens acquisition. (As used herein, "originated loans" refer to loans that have been originated in the normal course of business and "covered loans" refer to loans covered by loss sharing agreements with the FDIC providing considerable protection against credit risk.)
Net Interest Income
Net interest income on a fully tax-equivalent ("FTE") basis was $202.1 million in the fourth quarter 2013 compared with $207.1 million in the third quarter 2013 and $119.1 million in the fourth quarter 2012.
Net interest margin was 3.89% for the fourth quarter 2013 compared with 4.05% for the third quarter 2013 and 3.58% for the fourth quarter 2012. Fourth quarter 2013 net interest margin compression compared with the third quarter 2013 was primarily driven by both lower yields and decline in the acquired loan portfolio. Notably present this quarter was stability in the yields of both the Corporation's investment portfolio and originated loans, compared with the prior quarter.
Average originated loans were $10.0 billion during the fourth quarter 2013, an increase of $610.8 million, or 6.51%, compared with the third quarter 2013, and an increase of $1.5 billion, or 18.29%, compared with the fourth quarter 2012. Average originated commercial loans increased $394.8 million, or 6.44%, compared with the prior quarter, and increased $925.7 million, or 16.53%, compared with the year ago quarter.
Average deposits were $19.5 billion during the fourth quarter 2013, an increase of $0.1 billion, or 0.31%, compared with the third quarter 2013, and an increase of $7.9 billion, or 68.33%, compared with the fourth quarter 2012. During the fourth quarter 2013, average core deposits, which exclude time deposits, increased $0.2 billion, or 1.38%, compared with the third quarter 2013 and increased $6.8 billion, or 66.78%, compared with the fourth quarter 2012. Average time deposits decreased $169.2 million, or 6.22%, and increased $1.1 billion, or 79.41%, respectively, over the prior and year-ago quarters. For the fourth quarter 2013, average core deposits accounted for 86.93% of total average deposits, compared with 86.02% for the third quarter 2013 and 87.73% for the fourth quarter 2012.
Average investments increased $149.9 million, or 2.44%, compared with the third quarter 2013 and increased $2.6 billion, or 70.92% compared with the fourth quarter 2012.
Noninterest Income
Noninterest income, excluding gains and losses on securities transactions, for the fourth quarter 2013 was $72.4 million, an increase of $1.3 million, or 1.87%, from the third quarter 2013 and an increase of $13.2 million, or 22.28%, from the fourth quarter 2012. Included in noninterest income in the fourth quarter 2013 was $0.8 million of gains on covered loans paid in full, compared to $1.8 million and $5.0 million in the third quarter 2013 and fourth quarter 2012, respectively.
Other income, excluding net securities gains and losses, as a percentage of net revenue for the fourth quarter 2013 was 26.38% compared with 25.56% for third quarter 2013 and 33.21% for the fourth quarter 2012. Net revenue is defined as net interest income, on an FTE basis, plus other income, excluding gains and losses from securities sales.
Noninterest Expense
Noninterest expense for the fourth quarter 2013 was $179.4 million, a decrease of $32.0 million, or 15.13%, from the third quarter 2013 and an increase of $67.2 million, or 59.91%, from the fourth quarter 2012. Included in noninterest expense in the fourth quarter 2013 and third quarter 2013 were merger related costs associated with the Citizens acquisition of $6.0 million and $33.4 million, respectively. The majority of the merger related costs incurred in the fourth quarter of 2013 were associated with professional and legal services rendered in connection with the merger. The majority of the merger related costs incurred in the third quarter 2013 were from fees for early termination of existing agreements assumed from the merger and are included within Bankcard, loan processing and other costs in the accompanying year to date consolidated statements of comprehensive income. The Corporation's efficiency ratio was 64.36% for the fourth quarter 2013, compared with 74.92% for the third quarter 2013 and 62.65% for the fourth quarter 2012.
Asset Quality (excluding acquired loans and covered assets)
Due to the impact of business combination accounting and protection against credit risk from FDIC loss sharing agreements, acquired loans and covered assets are excluded from the asset quality discussion to provide for improved comparability to prior periods and better perspective into asset quality trends. Acquired loans are recorded at fair value at the date of acquisition with no allowance brought forward in accordance with business combination accounting. Impaired acquired and covered loans are considered to be performing due to the application of the accretion method under the applicable accounting guidance.
Net charge-offs on originated loans totaled $3.4 million, or 0.13% of average originated loans in the fourth quarter 2013, compared with $2.9 million, or 0.12% of average originated loans, in the third quarter 2013 and $7.1 million, or 0.34% of average originated loans, in the fourth quarter 2012.
Nonperforming assets totaled $60.9 million at December 31, 2013, an increase of $5.5 million, or 9.85%, compared with September 30, 2013 and an increase of $10.7 million, or 21.22%, compared with December 31, 2012. Nonperforming assets at December 31, 2013 represented 0.60% of period-end originated loans plus other real estate compared with 0.57% at September 30, 2013 and 0.57% at December 31, 2012.
The allowance for originated loan losses totaled $96.5 million at December 31, 2013. At December 31, 2013, the allowance for originated loan losses was 0.94% of period-end originated loans compared with 1.00% at September 30, 2013 and 1.13% at December 31, 2012. The allowance for credit losses is the sum of the allowance for originated loan losses and the reserve for unfunded lending commitments. For comparative purposes, the allowance for credit losses was 1.02% of period end originated loans at December 31, 2013, compared with 1.09% at September 30, 2013 and 1.20% at December 31, 2012. The allowance for credit losses to nonperforming loans was 247.35% at December 31, 2013, compared with 300.06% at September 30, 2013 and 284.50% at December 31, 2012.
Balance Sheet
The Corporation's total assets at December 31, 2013 were $23.9 billion, a decrease of $225.7 million, or 0.94%, compared with September 30, 2013 and an increase of $9.0 billion, or 60.32%, compared with December 31, 2012.
Total deposits were $19.5 billion at December 31, 2013, an increase of $44.1 million, or 0.23%, from September 30, 2013 and an increase of $7.8 billion, or 66.11%, from December 31, 2012. Core deposits totaled $17.1 billion at December 31, 2013, an increase of $220.3 million, or 1.31%, from September 30, 2013 and an increase of $6.7 billion, or 64.41%, from December 31, 2012.
Shareholders' equity was $2.7 billion as of December 31, 2013 and September 30, 2013 and $1.6 billion as of December 31, 2012. The increases mainly reflect the addition of $928.3 million in equity from the Citizen acquisition. The Corporation maintained a strong capital position as tangible common equity to assets was 7.71% at December 31, 2013, compared with 7.42% at September 30, 2013 and 8.16% at December 31, 2012. The common cash dividend per share paid in the fourth quarter 2013 was $0.16.
Acquisition and Integration Update
Professional consulting groups have been assisting the Corporation with the integration and accounting matters related to the Citizens' transaction. Core operating systems were converted as of October 20, 2013.
Merger related costs incurred through December 31, 2013 totaled approximately $78.1 million.
The Citizens' acquisition was considered a business combination and accounted for under FASB Accounting Standard Codification 805, Business Combinations (ASC 805). All acquired assets and liabilities were recorded at their estimated fair values as of the date of acquisition and identifiable intangible assets were recorded at their estimated fair value. Estimated fair values are considered preliminary and, in accordance with ASC 805, are subject to change up to one year after the acquisition date. This allows for adjustments to the initial purchase entries if additional information relative to closing date fair values becomes available, and we continue to analyze our estimates of the fair values of the assets acquired and the liabilities assumed. Material adjustments to acquisition date estimated fair values are recorded in the period in which the acquisition occurred and, as a result, previously reported results are subject to change. Certain reclassifications of prior periods' amounts may also be made to conform to the current period's presentation and would have no effect on previously reported net income amounts.
During the quarter ended December 31, 2013, we obtained additional information that resulted in changes to certain acquisition-data fair value estimates relating to the Citizens' acquisition. These purchase accounting adjustments have resulted in an increase to goodwill of approximately $5.4 million which was recognized for the Citizens' acquisition in the quarter ended June 30, 2013. Prior period amounts appropriately reflect these adjustments.
Fourth Quarter 2013 Conference Call
FirstMerit (Nasdaq: FMER) senior management will host an earnings conference call today at 11:00 a.m. (Eastern Time) to provide an overview of fourth quarter results and highlights. To participate in the conference call, please dial (888) 693-3477 ten minutes before start time and provide the reservation number: 35161818. A replay of the conference call will be available at approximately 2:00 p.m. (Eastern Time) on January 28, 2014 through February 10, 2014 by dialing (855) 859-2056, and entering the PIN: 35161818. The Corporation will provide a slide presentation, which management will speak to during the conference call. A copy of the presentation will be available at https://www.firstmerit.com/personal/investors.aspx; click on the Presentations link to access the slide presentation.
Non-GAAP Measures: This news release contains financial information and performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Corporation's management uses these non-GAAP measures in their analysis of the Corporation's performance and the efficiency of its operations. Management believes that these non-GAAP measures provide a greater understanding of ongoing operations of the Corporation and enhance comparability of results with prior periods, and facilitate investors' assessments of business and performance trends in comparison to others in the financial services industry. The Corporation believes that a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. The Corporation's management believes that investors may use these non-GAAP financial measures to analyze financial performance without the impact of unusual items that may obscure trends in the Corporation's underlying performance. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
About FirstMerit Corporation
FirstMerit Corporation is a diversified financial services company headquartered in Akron, Ohio, with assets of approximately $23.9 billion as of December 31, 2013, and 404 banking offices and 431 ATM locations in Ohio, Michigan, Wisconsin, Illinois and Pennsylvania. FirstMerit provides a complete range of banking and other financial services to consumers and businesses through its core operations. Principal affiliates include: FirstMerit Bank, N.A., FirstMerit Mortgage Corporation and FirstMerit Title Agency, Ltd.
Subsequent Events
The Corporation is required under generally accepted accounting principles to evaluate subsequent events through the filing of the its consolidated financial statements for the quarter ended December 31, 2013 on Form 10-Q. As a result, the Corporation will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimates made as of December 31, 2013 and will adjust amounts preliminarily reported, if necessary.
Forward-Looking Statements
This release contains forward-looking statements relating to present or future trends or factors affecting the banking industry, and specifically the financial condition and results of operations, including without limitation, statements relating to the earnings outlook of the Corporation, as well as its operations, markets and products. Actual results could differ materially from those indicated. Among the important factors that could cause results to differ materially are interest rate changes, continued softening in the economy, which could materially impact credit quality trends and the ability to generate loans, changes in the mix of the Corporation's business, competitive pressures, changes in accounting, tax or regulatory practices or requirements, the Corporation's ability to realize the synergies and benefits contemplated by the acquisition of Citizens, such as it being accretive to earnings and expanding the Corporation's geographic presence, in the time frame anticipated or at all, and those risk factors detailed in the Corporation's periodic reports filed with the Securities and Exchange Commission. The Corporation undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this release.
FirstMerit Corporation
Analysts: Thomas O'Malley/Investor Relations Officer
Phone: 330.384.7109
Media Contact: Robert Townsend/Media Relations Officer
Phone: 330.384.7075
| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
|||||||||||||||
| Consolidated Financial Highlights (a) |
|||||||||||||||
| (Unaudited) |
Quarters |
||||||||||||||
| (Dollars in thousands, except per share amounts) |
2013 |
2013 |
2013 |
2013 |
2012 |
||||||||||
| 4th qtr |
3rd qtr |
2nd qtr |
1st qtr |
4th qtr |
|||||||||||
| EARNINGS |
|||||||||||||||
| Net interest income FTE (b) |
$ |
202,145 |
$ |
207,079 |
$ |
201,605 |
$ |
114,376 |
$ |
119,130 |
|||||
| FTE adjustment (b) |
4,077 |
3,739 |
3,574 |
3,027 |
2,900 |
||||||||||
| Provision for originated loan losses |
1,552 |
2,523 |
3,151 |
5,808 |
7,116 |
||||||||||
| Provision for acquired loan losses |
5,515 |
2,033 |
— |
— |
— |
||||||||||
| Provision for covered loan losses |
2,983 |
1,823 |
4,158 |
4,138 |
5,146 |
||||||||||
| Other income |
72,420 |
71,090 |
69,439 |
57,392 |
61,652 |
||||||||||
| Other expenses |
179,391 |
211,378 |
189,640 |
106,925 |
112,181 |
||||||||||
| Net income |
57,174 |
40,715 |
48,450 |
37,346 |
38,224 |
||||||||||
| Diluted EPS (d) |
0.33 |
0.23 |
0.29 |
0.33 |
0.35 |
||||||||||
| PERFORMANCE RATIOS |
|||||||||||||||
| Return on average assets (ROA) |
0.94 |
% |
0.67 |
% |
0.85 |
% |
1.01 |
% |
1.03 |
% |
|||||
| Return on average equity (ROE) |
8.48 |
% |
6.07 |
% |
7.56 |
% |
8.83 |
% |
9.30 |
% |
|||||
| Return on average tangible common equity (e) |
12.96 |
% |
9.29 |
% |
11.49 |
% |
12.76 |
% |
13.01 |
% |
|||||
| Net interest margin FTE (b) |
3.89 |
% |
4.05 |
% |
4.12 |
% |
3.46 |
% |
3.58 |
% |
|||||
| Efficiency ratio (f) |
64.36 |
% |
74.92 |
% |
68.37 |
% |
62.06 |
% |
62.65 |
% |
|||||
| Number of full-time equivalent employees |
4,570 |
4,666 |
4,619 |
2,767 |
2,738 |
||||||||||
| MARKET DATA |
|||||||||||||||
| Book value per common share |
$ |
16.38 |
$ |
16.08 |
$ |
16.06 |
$ |
15.99 |
$ |
15.00 |
|||||
| Tangible book value per common share (e) |
$ |
10.79 |
10.48 |
10.44 |
10.83 |
10.75 |
|||||||||
| Period-end common share market value |
22.23 |
21.72 |
20.03 |
16.54 |
14.19 |
||||||||||
| Market as a % of book |
136 |
% |
135 |
% |
125 |
% |
103 |
% |
95 |
% |
|||||
| Cash dividends per common share |
$ |
0.16 |
$ |
0.16 |
$ |
0.16 |
$ |
0.16 |
$ |
0.16 |
|||||
| Common stock dividend payout ratio |
48.48 |
% |
69.57 |
% |
55.17 |
% |
48.48 |
% |
45.71 |
% |
|||||
| Average basic common shares |
165,054 |
165,044 |
157,863 |
109,689 |
109,652 |
||||||||||
| Average diluted common shares |
166,097 |
165,874 |
158,390 |
110,238 |
109,652 |
||||||||||
| Period end common shares |
165,056 |
165,045 |
165,045 |
109,746 |
109,649 |
||||||||||
| Common shares repurchased |
17 |
7 |
168 |
26 |
12 |
||||||||||
| Common stock market capitalization |
$ |
3,669,195 |
$ |
3,584,777 |
$ |
3,305,851 |
$ |
1,815,199 |
$ |
1,555,919 |
|||||
| ASSET QUALITY (excluding acquired and covered loans) (c) |
|||||||||||||||
| Gross charge-offs |
$ |
9,913 |
$ |
8,515 |
$ |
10,969 |
$ |
10,776 |
$ |
12,475 |
|||||
| Net charge-offs |
3,359 |
2,877 |
3,349 |
5,907 |
7,116 |
||||||||||
| Allowance for originated loan losses |
96,484 |
98,291 |
98,645 |
98,843 |
98,942 |
||||||||||
| Reserve for unfunded lending commitments |
7,907 |
8,493 |
8,114 |
4,941 |
5,433 |
||||||||||
| Nonperforming assets (NPAs) |
60,883 |
55,426 |
66,177 |
52,231 |
50,224 |
||||||||||
| Net charge-offs to average loans ratio |
0.13 |
% |
0.12 |
% |
0.15 |
% |
0.27 |
% |
0.34 |
% |
|||||
| Allowance for originated loan losses to period-end loans |
0.94 |
% |
1.00 |
% |
1.08 |
% |
1.13 |
% |
1.13 |
% |
|||||
| Allowance for credit losses to period-end loans |
1.02 |
% |
1.09 |
% |
1.17 |
% |
1.18 |
% |
1.20 |
% |
|||||
| NPAs to loans and other real estate |
0.60 |
% |
0.57 |
% |
0.72 |
% |
0.59 |
% |
0.57 |
% |
|||||
| Allowance for originated loan losses to nonperforming loans |
228.62 |
% |
276.19 |
% |
216.97 |
% |
242.21 |
% |
269.69 |
% |
|||||
| Allowance for credit losses to nonperforming loans |
247.35 |
% |
300.06 |
% |
234.82 |
% |
254.32 |
% |
284.50 |
% |
|||||
| CAPITAL & LIQUIDITY |
|||||||||||||||
| Period-end tangible common equity to assets (e) |
7.71 |
% |
7.42 |
% |
7.59 |
% |
8.03 |
% |
8.16 |
% |
|||||
| Average equity to assets |
11.12 |
% |
11.08 |
% |
11.28 |
% |
11.45 |
% |
11.12 |
% |
|||||
| Average equity to total loans |
18.81 |
% |
18.97 |
% |
18.95 |
% |
17.88 |
% |
17.37 |
% |
|||||
| Average total loans to deposits |
72.84 |
% |
72.11 |
% |
74.04 |
% |
81.36 |
% |
81.21 |
% |
|||||
| AVERAGE BALANCES |
|||||||||||||||
| Assets |
$ |
24,034,846 |
$ |
24,013,594 |
$ |
22,810,702 |
$ |
14,983,543 |
$ |
14,702,215 |
|||||
| Deposits |
19,517,476 |
19,456,231 |
18,334,244 |
11,789,784 |
11,595,085 |
||||||||||
| Originated loans |
9,988,587 |
9,377,826 |
8,877,754 |
8,735,307 |
8,444,208 |
||||||||||
| Acquired loans, including covered loans, less loss share receivable |
4,227,693 |
4,652,101 |
4,696,740 |
856,875 |
971,589 |
||||||||||
| Earning assets |
20,593,750 |
20,276,825 |
19,609,974 |
13,408,789 |
13,246,693 |
||||||||||
| Shareholders' equity |
2,673,635 |
2,661,546 |
2,571,964 |
1,715,005 |
1,635,275 |
||||||||||
| ENDING BALANCES |
|||||||||||||||
| Assets |
$ |
23,909,027 |
$ |
24,134,729 |
$ |
23,531,872 |
$ |
15,272,484 |
$ |
14,913,012 |
|||||
| Deposits |
19,533,601 |
19,489,533 |
19,119,722 |
11,925,767 |
11,759,425 |
||||||||||
| Originated loans |
10,213,387 |
9,789,139 |
9,132,625 |
8,779,970 |
8,731,659 |
||||||||||
| Acquired loans, including covered loans, less loss share receivable |
4,025,758 |
4,401,711 |
4,926,888 |
801,239 |
905,391 |
||||||||||
| Goodwill |
739,819 |
739,819 |
739,819 |
460,044 |
460,044 |
||||||||||
| Intangible assets |
82,755 |
85,447 |
88,419 |
6,055 |
6,373 |
||||||||||
| Earning assets |
21,048,910 |
21,297,250 |
20,772,749 |
13,905,342 |
13,472,067 |
||||||||||
| Total shareholders' equity |
2,702,894 |
2,654,645 |
2,650,909 |
1,754,850 |
1,645,202 |
||||||||||
| NOTES: |
|||||||||||||||
| (a) - Effective April 12, 2013, the Corporation acquired Citizens. Citizens' assets and liabilities were included in the consolidated balance sheet on the date of acquisition at fair value. Citizens' results of operations were included in the consolidated statements of comprehensive income beginning on the date of acquisition. |
| (b) - The interest income earned on certain earning assets is completely or partially exempt from federal and/or state income taxes. As such, these tax-exempt securities typically yield lower returns than taxable securities. To provide more meaningful comparisons of net interest margins for all earning assets, net interest income on a taxable-equivalent basis is used in calculating net interest margin by increasing the interest earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. This adjustment is not permitted under generally accepted accounting principles in the Consolidated Statements of Comprehensive Income. |
| (c) - Due to the impact of business combination accounting and protection of FDIC loss sharing agreements, which provide considerable protection against credit risk, acquired loans and covered assets are excluded from this table to provide for improved comparability to prior periods and better perspective into asset quality trends. |
| (d) - Net income used to determine diluted EPS was reduced by the cash dividends payable on the Corporation's 5.875% Non-Cumulative Perpetual Preferred Stock, Series A of approximately $1.5 million in each of the quarters ended December 31, 2013, September 30, 2013 and June 30, 2013, and approximately $0.9 million in the quarter ended March 31, 2013. |
| (e) - Tangible book value per common share is a non-GAAP financial measure and is calculated based on tangible common equity divided by period end common shares outstanding. Tangible common equity excludes goodwill, intangible assets, and preferred stock. Management believes this non-GAAP measure serves as a useful tool to help evaluate the strength and discipline of a company's capital management strategies and as an additional, conservative measure of total company value. |
| (f) - The efficiency ratio is calculated as noninterest expense divided by total revenue, excluding net losses on the sale of securities of $2.8 million and $9.0 thousand in the quarters ended June 30, 2013 and March 31, 2013, respectively, and net gains of $2.4 million in the quarter ended December 31, 2012. |
| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
||||||||||
| CONSOLIDATED BALANCE SHEETS |
||||||||||
| (Dollars in thousands) |
December 31, |
December 31, |
||||||||
| (Unaudited, except December 31, 2012, which is derived from the audited financial statements) |
2013 |
2012 |
||||||||
| ASSETS |
||||||||||
| Cash and due from banks |
$ |
571,171 |
$ |
244,223 |
||||||
| Interest-bearing deposits in banks |
346,651 |
13,791 |
||||||||
| Total cash and cash equivalents |
917,822 |
258,014 |
||||||||
| Investment securities: |
||||||||||
| Held-to-maturity |
2,935,688 |
622,121 |
||||||||
| Available-for-sale |
3,273,174 |
2,920,971 |
||||||||
| Other investments |
180,803 |
140,717 |
||||||||
| Loans held for sale |
11,622 |
23,683 |
||||||||
| Loans |
14,300,972 |
9,750,784 |
||||||||
| Allowance for loan losses |
(141,252) |
(142,197) |
||||||||
| Net loans |
14,159,720 |
9,608,587 |
||||||||
| Premises and equipment, net |
327,054 |
181,149 |
||||||||
| Goodwill |
739,819 |
460,044 |
||||||||
| Intangible assets |
82,755 |
6,373 |
||||||||
| Covered other real estate |
65,234 |
59,855 |
||||||||
| Accrued interest receivable and other assets |
1,215,336 |
631,498 |
||||||||
| Total assets |
$ |
23,909,027 |
$ |
14,913,012 |
||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||||
| Deposits: |
||||||||||
| Noninterest-bearing |
$ |
5,459,029 |
$ |
3,338,371 |
||||||
| Interest-bearing |
3,026,735 |
1,287,674 |
||||||||
| Savings and money market accounts |
8,587,167 |
5,758,123 |
||||||||
| Certificates and other time deposits |
2,460,670 |
1,375,257 |
||||||||
| Total deposits |
19,533,601 |
11,759,425 |
||||||||
| Federal funds purchased and securities sold under agreements to repurchase |
851,535 |
1,104,525 |
||||||||
| Wholesale borrowings |
200,600 |
136,883 |
||||||||
| Long-term debt |
324,428 |
— |
||||||||
| Accrued taxes, expenses, and other liabilities |
295,969 |
266,977 |
||||||||
| Total liabilities |
21,206,133 |
13,267,810 |
||||||||
| Shareholders' equity: |
||||||||||
| 5.875% Non-Cumulative Perpetual Preferred stock, Series A, without par value: authorized 115,000 shares; 100,000 issued |
100,000 |
— |
||||||||
| Common stock warrant |
3,000 |
— |
||||||||
| Common Stock, without par value; authorized 300,000,000 shares; issued: December 31, 2013 - 170,183,540 shares; December 31, 2012 - 115,121,731 shares |
127,937 |
127,937 |
||||||||
| Capital surplus |
1,390,643 |
475,979 |
||||||||
| Accumulated other comprehensive loss |
(66,876) |
(16,205) |
||||||||
| Retained earnings |
1,277,975 |
1,195,850 |
||||||||
| Treasury stock, at cost: December 31, 2013 - 5,127,332 shares; December 31, 2012 - 5,472,915 shares |
(129,785) |
(138,359) |
||||||||
| Total shareholders' equity |
2,702,894 |
1,645,202 |
||||||||
| Total liabilities and shareholders' equity |
$ |
23,909,027 |
$ |
14,913,012 |
||||||
| FIRSTMERIT CORPORATION AND SUBSIDIARIES Period End Loans by Product Type (Unaudited) (Dollars in thousands) |
|||||||||||||||
| As of December 31, 2013 |
|||||||||||||||
| Originated Loans |
Acquired Loans (1) |
Covered Loans (2) |
Total Loans |
||||||||||||
| Commercial |
$ |
6,648,279 |
$ |
1,725,970 |
$ |
375,860 |
$ |
8,750,109 |
|||||||
| Mortgage |
529,253 |
470,652 |
50,679 |
1,050,584 |
|||||||||||
| Installment |
1,727,925 |
1,004,569 |
6,162 |
2,738,656 |
|||||||||||
| Home equity |
920,066 |
294,424 |
97,442 |
1,311,932 |
|||||||||||
| Credit card |
148,313 |
— |
— |
148,313 |
|||||||||||
| Leases |
239,551 |
— |
— |
239,551 |
|||||||||||
| Subtotal |
10,213,387 |
3,495,615 |
530,143 |
14,239,145 |
|||||||||||
| Loss share receivable |
— |
— |
61,827 |
61,827 |
|||||||||||
| Total loans |
10,213,387 |
3,495,615 |
591,970 |
14,300,972 |
|||||||||||
| Less allowance for loan losses |
96,484 |
741 |
44,027 |
141,252 |
|||||||||||
| Net loans |
$ |
10,116,903 |
$ |
3,494,874 |
$ |
547,943 |
$ |
14,159,720 |
|||||||
| As of September 30, 2013 |
|||||||||||||||
| Originated Loans |
Acquired Loans (1) |
Covered Loans (2) |
Total Loans |
||||||||||||
| Commercial |
$ |
6,420,369 |
$ |
1,963,746 |
$ |
422,225 |
$ |
8,806,340 |
|||||||
| Mortgage |
487,283 |
466,594 |
52,796 |
1,006,673 |
|||||||||||
| Installment |
1,647,095 |
1,080,298 |
6,361 |
2,733,754 |
|||||||||||
| Home equity |
889,372 |
306,783 |
102,908 |
1,299,063 |
|||||||||||
| Credit card |
145,113 |
— |
— |
145,113 |
|||||||||||
| Leases |
199,907 |
— |
— |
199,907 |
|||||||||||
| Subtotal |
9,789,139 |
3,817,421 |
584,290 |
14,190,850 |
|||||||||||
| Loss share receivable |
— |
— |
69,986 |
69,986 |
|||||||||||
| Total loans |
9,789,139 |
3,817,421 |
654,276 |
14,260,836 |
|||||||||||
| Less allowance for loan losses |
98,291 |
— |
45,544 |
143,835 |
|||||||||||
| Net loans |
$ |
9,690,848 |
$ |
3,817,421 |
$ |
608,732 |
$ |
14,117,001 |
|||||||
| As of June 30, 2013 |
|||||||||||||||
| Originated Loans |
Acquired Loans (1) |
Covered Loans (2) |
Total Loans |
||||||||||||
| Commercial |
$ |
5,997,812 |
$ |
2,267,811 |
$ |
505,706 |
$ |
8,771,329 |
|||||||
| Mortgage |
462,427 |
439,380 |
56,056 |
957,863 |
|||||||||||
| Installment |
1,496,663 |
1,221,060 |
7,794 |
2,725,517 |
|||||||||||
| Home equity |
845,051 |
322,111 |
106,970 |
1,274,132 |
|||||||||||
| Credit card |
142,319 |
— |
— |
142,319 |
|||||||||||
| Leases |
188,353 |
— |
— |
188,353 |
|||||||||||
| Subtotal |
9,132,625 |
4,250,362 |
676,526 |
14,059,513 |
|||||||||||
| Loss share receivable |
— |
— |
83,910 |
83,910 |
|||||||||||
| Total loans |
9,132,625 |
4,250,362 |
760,436 |
14,143,423 |
|||||||||||
| Less allowance for loan losses |
98,645 |
— |
49,069 |
147,714 |
|||||||||||
| Net loans |
$ |
9,033,980 |
$ |
4,250,362 |
$ |
711,367 |
$ |
13,995,709 |
|||||||
| As of March 31, 2013 |
|||||||||||||||
| Originated Loans |
Acquired Loans (1) |
Covered Loans (2) |
Total Loans |
||||||||||||
| Commercial |
5,888,337 |
$ |
— |
$ |
621,188 |
$ |
6,509,525 |
||||||||
| Mortgage |
451,522 |
— |
58,627 |
510,149 |
|||||||||||
| Installment |
1,322,795 |
— |
8,081 |
1,330,876 |
|||||||||||
| Home equity |
812,458 |
— |
113,343 |
925,801 |
|||||||||||
| Credit card |
140,721 |
— |
— |
140,721 |
|||||||||||
| Leases |
164,137 |
— |
— |
164,137 |
|||||||||||
| Subtotal |
8,779,970 |
— |
801,239 |
9,581,209 |
|||||||||||
| Loss share receivable |
— |
— |
95,593 |
95,593 |
|||||||||||
| Total loans |
8,779,970 |
— |
896,832 |
9,676,802 |
|||||||||||
| Less allowance for loan losses |
98,843 |
— |
47,945 |
146,788 |
|||||||||||
| Net loans |
$ |
8,681,127 |
$ |
— |
$ |
848,887 |
$ |
9,530,014 |
|||||||
| As of December 31, 2012 |
|||||||||||||||
| Originated Loans |
Acquired Loans (1) |
Covered Loans (2) |
Total Loans |
||||||||||||
| Commercial |
$ |
5,866,489 |
$ |
— |
$ |
718,437 |
$ |
6,584,926 |
|||||||
| Mortgage |
445,211 |
— |
61,540 |
506,751 |
|||||||||||
| Installment |
1,328,258 |
— |
8,189 |
1,336,447 |
|||||||||||
| Home equity |
806,078 |
— |
117,225 |
923,303 |
|||||||||||
| Credit card |
146,387 |
— |
— |
146,387 |
|||||||||||
| Leases |
139,236 |
— |
— |
139,236 |
|||||||||||
| Subtotal |
8,731,659 |
— |
905,391 |
9,637,050 |
|||||||||||
| Loss share receivable |
— |
— |
113,734 |
113,734 |
|||||||||||
| Total loans |
8,731,659 |
— |
1,019,125 |
9,750,784 |
|||||||||||
| Less allowance for loan losses |
98,942 |
— |
43,255 |
142,197 |
|||||||||||
| Net loans |
$ |
8,632,717 |
$ |
— |
$ |
975,870 |
$ |
9,608,587 |
|||||||
| (1) Loans assumed from Citizens. No allowance was brought forward on the date of acquisition in accordance with business combination accounting. |
|||||||||||||||
| (2) Loans which are covered by loss sharing agreements with the FDIC providing considerable protection against credit risk. |
|||||||||||||||
| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
|||||||||||||||||||
| AVERAGE CONSOLIDATED BALANCE SHEETS |
|||||||||||||||||||
| Quarterly Periods |
|||||||||||||||||||
| (Unaudited) |
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
||||||||||||||
| (Dollars in thousands) |
2013 |
2013 |
2013 |
2013 |
2012 |
||||||||||||||
| ASSETS |
|||||||||||||||||||
| Cash and cash equivalents |
$ |
1,135,601 |
$ |
1,415,430 |
$ |
806,129 |
$ |
394,896 |
$ |
238,366 |
|||||||||
| Investment securities: |
|||||||||||||||||||
| Held-to-maturity |
2,763,517 |
2,640,807 |
1,953,094 |
637,614 |
620,154 |
||||||||||||||
| Available-for-sale |
3,284,635 |
3,243,173 |
3,723,002 |
2,919,636 |
2,925,938 |
||||||||||||||
| Other investments |
253,490 |
267,743 |
253,649 |
140,729 |
140,723 |
||||||||||||||
| Loans held for sale |
10,248 |
18,265 |
17,394 |
14,884 |
20,485 |
||||||||||||||
| Loans |
14,281,860 |
14,106,837 |
13,662,835 |
9,695,926 |
9,539,393 |
||||||||||||||
| Less: allowance for loan losses |
177,628 |
146,509 |
146,705 |
141,735 |
141,270 |
||||||||||||||
| Net loans |
14,104,232 |
13,960,328 |
13,516,130 |
9,554,191 |
9,398,123 |
||||||||||||||
| Total earning assets |
20,593,750 |
20,276,825 |
19,609,974 |
13,408,789 |
13,246,693 |
||||||||||||||
| Premises and equipment, net |
326,632 |
322,236 |
299,979 |
179,381 |
181,738 |
||||||||||||||
| Accrued interest receivable and other assets |
2,156,491 |
2,145,612 |
2,241,325 |
1,142,212 |
1,176,688 |
||||||||||||||
| TOTAL ASSETS |
$ |
24,034,846 |
$ |
24,013,594 |
$ |
22,810,702 |
$ |
14,983,543 |
$ |
14,702,215 |
|||||||||
| LIABILITIES |
|||||||||||||||||||
| Deposits: |
|||||||||||||||||||
| Noninterest-bearing |
$ |
5,546,316 |
$ |
5,443,800 |
$ |
5,095,977 |
$ |
3,321,660 |
$ |
3,306,444 |
|||||||||
| Interest-bearing |
2,875,375 |
2,720,592 |
2,347,155 |
1,300,816 |
1,122,796 |
||||||||||||||
| Savings and money market accounts |
8,544,097 |
8,570,910 |
8,210,780 |
5,835,750 |
5,743,599 |
||||||||||||||
| Certificates and other time deposits |
2,551,688 |
2,720,929 |
2,680,332 |
1,331,558 |
1,422,246 |
||||||||||||||
| Total deposits |
19,517,476 |
19,456,231 |
18,334,244 |
11,789,784 |
11,595,085 |
||||||||||||||
| Federal funds purchased and securities sold under |
|||||||||||||||||||
| agreements to repurchase |
948,959 |
1,011,991 |
927,451 |
906,717 |
957,564 |
||||||||||||||
| Wholesale borrowings |
200,622 |
201,012 |
237,887 |
136,298 |
163,405 |
||||||||||||||
| Long-term debt |
324,426 |
324,424 |
314,597 |
155,506 |
— |
||||||||||||||
| Total funds |
20,991,483 |
20,993,658 |
19,814,179 |
12,988,305 |
12,716,054 |
||||||||||||||
| Accrued taxes, expenses and other liabilities |
369,728 |
358,390 |
424,559 |
280,233 |
350,886 |
||||||||||||||
| Total liabilities |
21,361,211 |
21,352,048 |
20,238,738 |
13,268,538 |
13,066,940 |
||||||||||||||
| SHAREHOLDERS' EQUITY |
|||||||||||||||||||
| Preferred stock |
100,000 |
100,000 |
100,000 |
62,222 |
— |
||||||||||||||
| Common stock warrant |
3,000 |
3,000 |
2,637 |
— |
— |
||||||||||||||
| Common stock |
127,937 |
127,937 |
127,937 |
127,937 |
127,937 |
||||||||||||||
| Capital surplus |
1,389,222 |
1,386,931 |
1,274,758 |
473,943 |
474,532 |
||||||||||||||
| Accumulated other comprehensive loss |
(79,431) |
(82,598) |
(29,033) |
(21,247) |
(17,666) |
||||||||||||||
| Retained earnings |
1,262,705 |
1,256,052 |
1,225,380 |
1,209,837 |
1,188,641 |
||||||||||||||
| Treasury stock |
(129,798) |
(129,776) |
(129,715) |
(137,687) |
(138,169) |
||||||||||||||
| Total shareholders' equity |
2,673,635 |
2,661,546 |
2,571,964 |
1,715,005 |
1,635,275 |
||||||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
24,034,846 |
$ |
24,013,594 |
$ |
22,810,702 |
$ |
14,983,543 |
$ |
14,702,215 |
|||||||||
| FIRSTMERIT CORPORATION AND SUBSIDIARIES Average Loans by Product Type (Unaudited) (Dollars in thousands) |
|||||||||||||||
| Quarter ended December 31, 2013 |
|||||||||||||||
| Originated Loans |
Acquired Loans (1) |
Covered Loans (2) |
Total Loans |
||||||||||||
| Commercial |
$ |
6,526,243 |
$ |
1,866,064 |
$ |
400,105 |
$ |
8,792,412 |
|||||||
| Mortgage |
509,685 |
472,771 |
51,304 |
1,033,760 |
|||||||||||
| Installment |
1,697,651 |
1,032,245 |
6,279 |
2,736,175 |
|||||||||||
| Home equity |
905,172 |
298,212 |
100,712 |
1,304,096 |
|||||||||||
| Credit card |
146,805 |
— |
— |
146,805 |
|||||||||||
| Leases |
203,031 |
— |
— |
203,031 |
|||||||||||
| Subtotal |
9,988,587 |
3,669,292 |
558,401 |
14,216,280 |
|||||||||||
| Loss share receivable |
— |
— |
65,580 |
65,580 |
|||||||||||
| Total loans |
9,988,587 |
3,669,292 |
623,981 |
14,281,860 |
|||||||||||
| Less allowance for loan losses |
134,890 |
(2,091) |
44,829 |
177,628 |
|||||||||||
| Net loans |
$ |
9,853,697 |
$ |
3,671,383 |
$ |
579,152 |
$ |
14,104,232 |
|||||||
| Quarter ended September 30, 2013 |
|||||||||||||||
| Originated Loans |
Acquired Loans (1) |
Covered Loans (2) |
Total Loans |
||||||||||||
| Commercial |
$ |
6,131,423 |
$ |
2,118,803 |
$ |
460,242 |
$ |
8,710,468 |
|||||||
| Mortgage |
472,281 |
448,206 |
54,403 |
974,890 |
|||||||||||
| Installment |
1,570,124 |
1,145,824 |
7,180 |
2,723,128 |
|||||||||||
| Home equity |
866,001 |
312,681 |
104,762 |
1,283,444 |
|||||||||||
| Credit card |
143,637 |
— |
— |
143,637 |
|||||||||||
| Leases |
194,360 |
— |
— |
194,360 |
|||||||||||
| Subtotal |
9,377,826 |
4,025,514 |
626,587 |
14,029,927 |
|||||||||||
| Loss share receivable |
— |
— |
76,910 |
76,910 |
|||||||||||
| Total loans |
9,377,826 |
4,025,514 |
703,497 |
14,106,837 |
|||||||||||
| Less allowance for loan losses |
97,693 |
68 |
48,748 |
146,509 |
|||||||||||
| Net loans |
$ |
9,280,133 |
$ |
4,025,446 |
$ |
654,749 |
$ |
13,960,328 |
|||||||
| Quarter Ended June 30, 2013 |
|||||||||||||||
| Originated Loans |
Acquired Loans (1) |
Covered Loans (2) |
Total Loans |
||||||||||||
| Commercial |
$ |
5,888,935 |
$ |
2,141,015 |
$ |
575,859 |
$ |
8,605,809 |
|||||||
| Mortgage |
453,813 |
408,723 |
56,825 |
919,361 |
|||||||||||
| Installment |
1,388,765 |
1,107,076 |
7,912 |
2,503,753 |
|||||||||||
| Home equity |
831,243 |
288,254 |
111,076 |
1,230,573 |
|||||||||||
| Credit card |
141,785 |
— |
— |
141,785 |
|||||||||||
| Leases |
173,213 |
— |
— |
173,213 |
|||||||||||
| Subtotal |
8,877,754 |
3,945,068 |
751,672 |
13,574,494 |
|||||||||||
| Loss share receivable |
— |
— |
88,341 |
88,341 |
|||||||||||
| Total loans |
8,877,754 |
3,945,068 |
840,013 |
13,662,835 |
|||||||||||
| Less allowance for loan losses |
99,411 |
— |
47,294 |
146,705 |
|||||||||||
| Net loans |
$ |
8,778,343 |
$ |
3,945,068 |
$ |
792,719 |
$ |
13,516,130 |
|||||||
| Quarter Ended March 31, 2013 |
|||||||||||||||
| Originated Loans |
Acquired Loans (1) |
Covered Loans (2) |
Total Loans |
||||||||||||
| Commercial |
$ |
5,859,818 |
$ |
— |
$ |
673,815 |
$ |
6,533,633 |
|||||||
| Mortgage |
448,589 |
— |
60,391 |
508,980 |
|||||||||||
| Installment |
1,325,016 |
— |
8,118 |
1,333,134 |
|||||||||||
| Home equity |
806,936 |
— |
114,551 |
921,487 |
|||||||||||
| Credit card |
144,159 |
— |
— |
144,159 |
|||||||||||
| Leases |
150,789 |
— |
— |
150,789 |
|||||||||||
| Subtotal |
8,735,307 |
— |
856,875 |
9,592,182 |
|||||||||||
| Loss share receivable |
— |
— |
103,744 |
103,744 |
|||||||||||
| Total loans |
8,735,307 |
— |
960,619 |
9,695,926 |
|||||||||||
| Less allowance for loan losses |
98,660 |
— |
43,075 |
141,735 |
|||||||||||
| Net loans |
$ |
8,636,647 |
$ |
— |
$ |
917,544 |
$ |
9,554,191 |
|||||||
| Quarter ended December 31, 2012 |
|||||||||||||||
| Originated Loans |
Acquired Loans (1) |
Covered Loans (2) |
Total Loans |
||||||||||||
| Commercial |
$ |
5,600,522 |
$ |
— |
$ |
780,904 |
$ |
6,381,426 |
|||||||
| Mortgage |
443,542 |
— |
62,382 |
505,924 |
|||||||||||
| Installment |
1,331,131 |
— |
8,251 |
1,339,382 |
|||||||||||
| Home equity |
798,663 |
— |
120,052 |
918,715 |
|||||||||||
| Credit card |
145,050 |
— |
— |
145,050 |
|||||||||||
| Leases |
125,300 |
— |
— |
125,300 |
|||||||||||
| Subtotal |
8,444,208 |
— |
971,589 |
9,415,797 |
|||||||||||
| Loss share receivable |
— |
— |
123,596 |
123,596 |
|||||||||||
| Total loans |
8,444,208 |
— |
1,095,185 |
9,539,393 |
|||||||||||
| Less allowance for loan losses |
99,461 |
— |
41,809 |
141,270 |
|||||||||||
| Net loans |
$ |
8,344,747 |
$ |
— |
$ |
1,053,376 |
$ |
9,398,123 |
|||||||
| (1) Loans assumed from Citizens. No allowance was brought forward on the date of acquisition in accordance with business combination accounting. |
|||||||||||||||
| (2) Loans which are covered by loss sharing agreements with the FDIC providing considerable protection against credit risk. |
|||||||||||||||
| FIRSTMERIT CORPORATION AND SUBIDARIES |
||||||||||||||||||||||||||||||||
| AVERAGE CONSOLIDATED BALANCE SHEETS |
||||||||||||||||||||||||||||||||
| Fully Tax-equivalent Interest Rates and Interest Differential |
||||||||||||||||||||||||||||||||
| Three months ended |
Three months ended |
Three months ended |
||||||||||||||||||||||||||||||
| December 31, 2013 |
September 30, 2013 |
December 31, 2012 |
||||||||||||||||||||||||||||||
| (Unaudited) |
Average |
Average |
Average |
Average |
Average |
Average |
||||||||||||||||||||||||||
| (Dollars in thousands) |
Balance |
Interest (1) |
Rate |
Balance |
Interest (1) |
Rate |
Balance |
Interest (1) |
Rate |
|||||||||||||||||||||||
| ASSETS |
||||||||||||||||||||||||||||||||
| Cash and cash equivalents |
$ |
1,135,601 |
$ |
1,415,430 |
$ |
238,366 |
||||||||||||||||||||||||||
| Investment securities and federal funds sold: |
||||||||||||||||||||||||||||||||
| U.S. treasury securities and U.S. government agency obligations (taxable) |
4,895,147 |
$ |
24,236 |
1.96 |
% |
4,849,135 |
$ |
23,551 |
1.93 |
% |
2,794,524 |
$ |
16,767 |
2.39 |
% |
|||||||||||||||||
| Obligations of states and political subdivisions (tax exempt) |
728,408 |
8,609 |
4.69 |
% |
712,296 |
8,890 |
4.95 |
% |
510,722 |
6,583 |
5.13 |
% |
||||||||||||||||||||
| Other securities and federal funds sold |
678,087 |
6,445 |
3.77 |
% |
590,292 |
6,215 |
4.18 |
% |
381,569 |
3,429 |
3.58 |
% |
||||||||||||||||||||
| Total investment securities and federal funds sold |
6,301,642 |
39,290 |
2.47 |
% |
6,151,723 |
38,656 |
2.49 |
% |
3,686,815 |
26,779 |
2.89 |
% |
||||||||||||||||||||
| Loans held for sale |
10,248 |
92 |
3.56 |
% |
18,265 |
174 |
3.78 |
% |
20,485 |
199 |
3.86 |
% |
||||||||||||||||||||
| Loans, including loss share receivable (2) |
14,281,860 |
177,275 |
4.92 |
% |
14,106,837 |
182,406 |
5.13 |
% |
9,539,393 |
101,288 |
4.22 |
% |
||||||||||||||||||||
| Total earning assets |
20,593,750 |
216,657 |
4.17 |
% |
20,276,825 |
221,236 |
4.33 |
% |
13,246,693 |
128,266 |
3.85 |
% |
||||||||||||||||||||
| Allowance for loan losses |
(177,628) |
(146,509) |
(141,270) |
|||||||||||||||||||||||||||||
| Other assets |
2,483,123 |
2,467,848 |
1,358,426 |
|||||||||||||||||||||||||||||
| Total assets |
$ |
24,034,846 |
$ |
24,013,594 |
$ |
14,702,215 |
||||||||||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||||||||||||||||||||||||||
| Deposits: |
||||||||||||||||||||||||||||||||
| Noninterest-bearing |
$ |
5,546,316 |
— |
— |
% |
$ |
5,443,800 |
— |
— |
% |
$ |
3,306,444 |
— |
— |
% |
|||||||||||||||||
| Interest-bearing |
2,875,375 |
759 |
0.10 |
% |
2,720,592 |
809 |
0.12 |
% |
1,122,796 |
261 |
0.09 |
% |
||||||||||||||||||||
| Savings and money market accounts |
8,544,097 |
6,127 |
0.28 |
% |
8,570,910 |
6,495 |
0.30 |
% |
5,743,599 |
5,261 |
0.36 |
% |
||||||||||||||||||||
| Certificates and other time deposits |
2,551,688 |
2,500 |
0.39 |
% |
2,720,929 |
1,712 |
0.25 |
% |
1,422,246 |
2,287 |
0.64 |
% |
||||||||||||||||||||
| Total deposits |
19,517,476 |
9,386 |
0.19 |
% |
19,456,231 |
9,016 |
0.18 |
% |
11,595,085 |
7,809 |
0.27 |
% |
||||||||||||||||||||
| Securities sold under agreements to repurchase |
948,959 |
291 |
0.12 |
% |
1,011,991 |
306 |
0.12 |
% |
957,564 |
303 |
0.13 |
% |
||||||||||||||||||||
| Wholesale borrowings |
200,622 |
938 |
1.85 |
% |
201,012 |
936 |
1.85 |
% |
163,405 |
1,024 |
2.49 |
% |
||||||||||||||||||||
| Long-term debt |
324,426 |
3,897 |
4.77 |
% |
324,424 |
3,899 |
4.77 |
% |
— |
— |
— |
% |
||||||||||||||||||||
| Total interest bearing liabilities |
15,445,167 |
14,512 |
0.37 |
% |
15,549,858 |
14,157 |
0.36 |
% |
9,409,610 |
9,136 |
0.39 |
% |
||||||||||||||||||||
| Other liabilities |
369,728 |
358,390 |
350,886 |
|||||||||||||||||||||||||||||
| Shareholders' equity |
2,673,635 |
2,661,546 |
1,635,275 |
|||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity |
$ |
24,034,846 |
$ |
24,013,594 |
$ |
14,702,215 |
||||||||||||||||||||||||||
| Net yield on earning assets |
$ |
20,593,750 |
$ |
202,145 |
3.89 |
% |
$ |
20,276,825 |
$ |
207,079 |
4.05 |
% |
$ |
13,246,693 |
$ |
119,130 |
3.58 |
% |
||||||||||||||
| Interest rate spread |
3.80 |
% |
3.97 |
% |
3.47 |
% |
||||||||||||||||||||||||||
| (1) The net yield on earning assets is calculated as annualized taxable-equivalent net interest income divided by average earning assets. The interest income earned on certain earning assets is completely or partially exempt from federal and/or state income taxes. As such, these tax-exempt securities typically yield lower returns than taxable securities. To provide more meaningful comparisons of net interest margins for all earning assets, net interest income on a taxable-equivalent basis is used in calculating net interest margin by increasing the interest earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. This adjustment is not permitted under generally accepted accounting principles in the Consolidated Statements of Comprehensive Income. The taxable-equivalent adjustments to net interest income were $4.1 million, $3.7 million and $2.9 million for the three months ended December 31, 2013, September 30, 2013 and December 31, 2012, respectively. |
| (2) Nonaccrual loans have been included in the average balances. |
| FIRSTMERIT CORPORATION AND SUBIDARIES |
|||||||||||||||||||||
| AVERAGE CONSOLIDATED BALANCE SHEETS |
|||||||||||||||||||||
| Fully Tax-equivalent Interest Rates and Interest Differential |
|||||||||||||||||||||
| Twelve Months Ended |
Twelve Months Ended |
||||||||||||||||||||
| December 31, 2013 |
December 31, 2012 |
||||||||||||||||||||
| (Unaudited) |
Average |
Average |
Average |
Average |
|||||||||||||||||
| (Dollars in thousands) |
Balance |
Interest (1) |
Rate |
Balance |
Interest (1) |
Rate |
|||||||||||||||
| ASSETS |
|||||||||||||||||||||
| Cash and cash equivalents |
$ |
941,356 |
$ |
366,815 |
|||||||||||||||||
| Investment securities and federal funds sold: |
|||||||||||||||||||||
| U.S. treasury securities and U.S. government agency obligations (taxable) |
4,319,524 |
$ |
88,761 |
2.05 |
% |
2,825,283 |
$ |
73,455 |
2.60 |
% |
|||||||||||
| Obligations of states and political subdivisions (tax exempt) |
673,695 |
33,311 |
4.94 |
% |
483,582 |
25,034 |
5.18 |
% |
|||||||||||||
| Other securities and federal funds sold |
535,916 |
20,063 |
3.74 |
% |
383,420 |
11,575 |
3.02 |
% |
|||||||||||||
| Total investment securities and federal funds sold |
5,529,135 |
142,135 |
2.57 |
% |
3,692,285 |
110,064 |
2.98 |
% |
|||||||||||||
| Loans held for sale |
15,194 |
553 |
3.64 |
% |
23,326 |
960 |
4.12 |
% |
|||||||||||||
| Loans, including loss share receivable (2) |
12,948,666 |
637,532 |
4.92 |
% |
9,357,080 |
410,818 |
4.39 |
% |
|||||||||||||
| Total earning assets |
18,492,995 |
780,220 |
4.22 |
% |
13,072,691 |
521,842 |
3.99 |
% |
|||||||||||||
| Allowance for loan losses |
(153,190) |
(143,131) |
|||||||||||||||||||
| Other assets |
2,208,614 |
1,324,252 |
|||||||||||||||||||
| Total assets |
$ |
21,489,775 |
$ |
14,620,627 |
|||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||||||||||||||||
| Deposits: |
|||||||||||||||||||||
| Noninterest-bearing |
$ |
4,859,659 |
— |
— |
% |
$ |
3,181,475 |
— |
— |
% |
|||||||||||
| Interest-bearing |
2,316,421 |
2,543 |
0.11 |
% |
1,082,740 |
987 |
0.09 |
% |
|||||||||||||
| Savings and money market accounts |
7,799,943 |
24,406 |
0.31 |
% |
5,724,330 |
20,563 |
0.36 |
% |
|||||||||||||
| Certificates and other time deposits |
2,325,565 |
9,649 |
0.41 |
% |
1,565,253 |
11,723 |
0.75 |
% |
|||||||||||||
| Total deposits |
17,301,588 |
36,598 |
0.21 |
% |
11,553,798 |
33,273 |
0.29 |
% |
|||||||||||||
| Securities sold under agreements to repurchase |
949,068 |
1,240 |
0.13 |
% |
949,756 |
1,157 |
0.12 |
% |
|||||||||||||
| Wholesale borrowings |
194,150 |
3,893 |
2.01 |
% |
175,989 |
4,423 |
2.51 |
% |
|||||||||||||
| Long-term debt |
280,323 |
13,287 |
4.74 |
% |
— |
— |
— |
% |
|||||||||||||
| Total interest bearing liabilities |
13,865,470 |
55,018 |
0.40 |
% |
9,498,068 |
38,853 |
0.41 |
% |
|||||||||||||
| Other liabilities |
355,781 |
332,976 |
|||||||||||||||||||
| Shareholders' equity |
2,408,865 |
1,608,108 |
|||||||||||||||||||
| Total liabilities and shareholders' equity |
$ |
21,489,775 |
$ |
14,620,627 |
|||||||||||||||||
| Net yield on earning assets (1) |
$ |
18,492,995 |
$ |
725,202 |
3.92 |
% |
$ |
13,072,691 |
$ |
482,989 |
3.69 |
% |
|||||||||
| Interest rate spread |
3.82 |
% |
3.58 |
% |
|||||||||||||||||
| (1) The net yield on earning assets is calculated as annualized taxable-equivalent net interest income divided by average earning assets. The interest income earned on certain earning assets is completely or partially exempt from federal and/or state income taxes. As such, these tax-exempt securities typically yield lower returns than taxable securities. To provide more meaningful comparisons of net interest margins for all earning assets, net interest income on a taxable-equivalent basis is used in calculating net interest margin by increasing the interest earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. This adjustment is not permitted under generally accepted accounting principles in the Consolidated Statements of Comprehensive Income. The taxable-equivalent adjustments to net interest income were $14.4 million and $11.2 million for the twelve months ended December 31, 2013 and 2012, respectively. |
| (2) Nonaccrual loans have been included in the average balances. |
| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
||||||||||||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
||||||||||||||||||
| (Unaudited) |
Quarters Ended |
Twelve Months Ended |
||||||||||||||||
| (Dollars in thousands except per share data) |
December 31, |
December 31, |
||||||||||||||||
| 2013 |
2012 |
2013 |
2012 |
|||||||||||||||
| Interest income: |
||||||||||||||||||
| Loans and loans held for sale |
$ |
176,559 |
$ |
101,086 |
$ |
635,872 |
$ |
410,299 |
||||||||||
| Investment securities: |
||||||||||||||||||
| Taxable |
30,681 |
20,196 |
108,824 |
85,030 |
||||||||||||||
| Tax-exempt |
5,340 |
4,084 |
21,107 |
15,354 |
||||||||||||||
| Total investment securities interest |
36,021 |
24,280 |
129,931 |
100,384 |
||||||||||||||
| Total interest income |
212,580 |
125,366 |
765,803 |
510,683 |
||||||||||||||
| Interest expense: |
||||||||||||||||||
| Deposits: |
||||||||||||||||||
| Interest-bearing |
759 |
261 |
2,543 |
987 |
||||||||||||||
| Savings and money market accounts |
6,127 |
5,261 |
24,406 |
20,563 |
||||||||||||||
| Certificates and other time deposits |
2,500 |
2,287 |
9,649 |
11,723 |
||||||||||||||
| Securities sold under agreements to repurchase |
291 |
303 |
1,240 |
1,157 |
||||||||||||||
| Wholesale borrowings |
938 |
1,024 |
3,893 |
4,423 |
||||||||||||||
| Long-term debt |
3,897 |
— |
13,287 |
— |
||||||||||||||
| Total interest expense |
14,512 |
9,136 |
55,018 |
38,853 |
||||||||||||||
| Net interest income |
198,068 |
116,230 |
710,785 |
471,830 |
||||||||||||||
| Provision for loan losses |
10,050 |
12,262 |
33,684 |
54,698 |
||||||||||||||
| Net interest income after provision for loan losses |
188,018 |
103,968 |
677,101 |
417,132 |
||||||||||||||
| Other income: |
||||||||||||||||||
| Trust department income |
10,255 |
5,662 |
34,770 |
23,143 |
||||||||||||||
| Service charges on deposits |
19,084 |
14,247 |
74,399 |
57,737 |
||||||||||||||
| Credit card fees |
12,414 |
11,167 |
50,542 |
43,569 |
||||||||||||||
| ATM and other service fees |
5,659 |
3,432 |
19,155 |
14,792 |
||||||||||||||
| Bank owned life insurance income |
4,037 |
3,067 |
16,926 |
12,140 |
||||||||||||||
| Investment services and insurance |
3,530 |
2,147 |
12,777 |
8,990 |
||||||||||||||
| Investment securities gains/(losses), net |
— |
2,425 |
(2,803) |
3,786 |
||||||||||||||
| Loan sales and servicing income |
3,577 |
7,946 |
23,069 |
27,031 |
||||||||||||||
| Other operating income |
13,864 |
11,559 |
41,508 |
32,416 |
||||||||||||||
| Total other income |
72,420 |
61,652 |
270,343 |
223,604 |
||||||||||||||
| Other expenses: |
||||||||||||||||||
| Salaries, wages, pension and employee benefits |
93,621 |
61,560 |
354,016 |
245,192 |
||||||||||||||
| Net occupancy expense |
14,066 |
7,114 |
49,510 |
31,754 |
||||||||||||||
| Equipment expense |
13,177 |
7,398 |
41,875 |
29,243 |
||||||||||||||
| Stationery, supplies and postage |
4,895 |
2,162 |
14,199 |
8,800 |
||||||||||||||
| Bankcard, loan processing and other costs |
10,886 |
9,260 |
71,929 |
34,195 |
||||||||||||||
| Professional services |
8,358 |
6,119 |
40,680 |
23,480 |
||||||||||||||
| Amortization of intangibles |
2,692 |
444 |
8,392 |
1,866 |
||||||||||||||
| FDIC insurance expense |
5,106 |
1,738 |
17,707 |
10,753 |
||||||||||||||
| Other operating expense |
26,590 |
16,386 |
89,026 |
68,330 |
||||||||||||||
| Total other expenses |
179,391 |
112,181 |
687,334 |
453,613 |
||||||||||||||
| Income before income tax expense |
81,047 |
53,439 |
260,110 |
187,123 |
||||||||||||||
| Income tax expense |
23,873 |
15,215 |
76,426 |
53,017 |
||||||||||||||
| Net income |
$ |
57,174 |
$ |
38,224 |
$ |
183,684 |
$ |
134,106 |
||||||||||
| Other comprehensive income, net of taxes |
||||||||||||||||||
| Changes in unrealized securities' holding gains and (losses), net of taxes of $9.3 million, $5.3 million, $46.6 million and $2.2 million, respectively |
$ |
(17,308) |
$ |
(6,718) |
$ |
(86,537) |
$ |
4,154 |
||||||||||
| Reclassification for realized securities' (gains) and losses, net of taxes of $-0- million, $1.0 million, $1.0 million and $1.0 million, respectively |
— |
(1,576) |
1,822 |
(2,461) |
||||||||||||||
| Pension and postretirement benefit costs, net of taxes of $18.3 million, $3.2 million, $18.3 million and $3.2 million, respectively |
34,044 |
5,989 |
34,044 |
5,989 |
||||||||||||||
| Total other comprehensive gain (loss), net of taxes |
16,736 |
(2,305) |
(50,671) |
7,682 |
||||||||||||||
| Comprehensive income |
$ |
73,910 |
$ |
35,919 |
$ |
133,013 |
$ |
141,788 |
||||||||||
| Net income attributable to common shareholders |
$ |
55,264 |
$ |
38,224 |
$ |
176,802 |
$ |
134,106 |
||||||||||
| Net income used in diluted EPS calculation |
$ |
55,264 |
$ |
38,224 |
$ |
176,802 |
$ |
134,106 |
||||||||||
| Weighted average number of common shares outstanding - basic |
165,054 |
109,652 |
149,607 |
109,518 |
||||||||||||||
| Weighted average number of common shares outstanding - diluted |
166,097 |
109,652 |
150,421 |
109,518 |
||||||||||||||
| Basic earnings per common share |
$ |
0.33 |
$ |
0.35 |
$ |
1.18 |
$ |
1.22 |
||||||||||
| Diluted earnings per common share |
$ |
0.33 |
$ |
0.35 |
$ |
1.18 |
$ |
1.22 |
||||||||||
| Dividend per common share |
$ |
0.16 |
$ |
0.16 |
$ |
0.64 |
$ |
0.64 |
||||||||||
| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
|||||||||||||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME---LINKED QUARTERS |
|||||||||||||||||||
| Quarterly Results |
|||||||||||||||||||
| (Unaudited) |
2013 |
2013 |
2013 |
2013 |
2012 |
||||||||||||||
| (Dollars in thousands, except share data) |
4th qtr |
3rd qtr |
2nd qtr |
1st qtr |
4th qtr |
||||||||||||||
| Loans and loans held for sale |
$ |
176,559 |
$ |
182,107 |
$ |
178,535 |
$ |
98,672 |
$ |
101,086 |
|||||||||
| Investment securities |
36,021 |
35,390 |
35,236 |
23,284 |
24,280 |
||||||||||||||
| Total interest income |
212,580 |
217,497 |
213,771 |
121,956 |
125,366 |
||||||||||||||
| Interest on deposits: |
|||||||||||||||||||
| Interest-bearing |
759 |
809 |
656 |
318 |
261 |
||||||||||||||
| Savings and money market accounts |
6,127 |
6,495 |
6,469 |
5,315 |
5,261 |
||||||||||||||
| Certificates and other time deposits |
2,500 |
1,712 |
3,374 |
2,063 |
2,287 |
||||||||||||||
| Securities sold under agreements to repurchase |
291 |
306 |
329 |
313 |
303 |
||||||||||||||
| Wholesale borrowings |
938 |
936 |
1,169 |
850 |
1,024 |
||||||||||||||
| Long-term debt |
3,897 |
3,899 |
3,743 |
1,748 |
— |
||||||||||||||
| Total interest expense |
14,512 |
14,157 |
15,740 |
10,607 |
9,136 |
||||||||||||||
| Net interest income |
198,068 |
203,340 |
198,031 |
111,349 |
116,230 |
||||||||||||||
| Provision for loan losses |
10,050 |
6,379 |
7,309 |
9,946 |
12,262 |
||||||||||||||
| Net interest income after provision for loan losses |
188,018 |
196,961 |
190,722 |
101,403 |
103,968 |
||||||||||||||
| Other income: |
|||||||||||||||||||
| Trust department income |
10,255 |
9,608 |
9,167 |
5,741 |
5,662 |
||||||||||||||
| Service charges on deposits |
19,084 |
22,146 |
20,582 |
12,585 |
14,247 |
||||||||||||||
| Credit card fees |
12,414 |
13,588 |
14,317 |
10,222 |
11,167 |
||||||||||||||
| ATM and other service fees |
5,659 |
5,216 |
4,945 |
3,335 |
3,432 |
||||||||||||||
| Bank owned life insurance income |
4,037 |
4,351 |
3,641 |
4,897 |
3,067 |
||||||||||||||
| Investment services and insurance |
3,530 |
3,403 |
3,429 |
2,415 |
2,147 |
||||||||||||||
| Investment securities (losses)/gains, net |
— |
— |
(2,794) |
(9) |
2,425 |
||||||||||||||
| Loan sales and servicing income |
3,577 |
3,644 |
7,985 |
7,863 |
7,946 |
||||||||||||||
| Other operating income |
13,864 |
9,134 |
8,167 |
10,343 |
11,559 |
||||||||||||||
| Total other income |
72,420 |
71,090 |
69,439 |
57,392 |
61,652 |
||||||||||||||
| Other expenses: |
|||||||||||||||||||
| Salaries, wages, pension and employee benefits |
93,621 |
97,390 |
105,099 |
57,906 |
61,560 |
||||||||||||||
| Net occupancy expense |
14,066 |
13,816 |
13,346 |
8,282 |
7,114 |
||||||||||||||
| Equipment expense |
13,177 |
11,040 |
10,309 |
7,349 |
7,398 |
||||||||||||||
| Stationery, supplies and postage |
4,895 |
3,801 |
3,407 |
2,096 |
2,162 |
||||||||||||||
| Bankcard, loan processing and other costs |
10,886 |
40,786 |
12,417 |
7,840 |
9,260 |
||||||||||||||
| Professional services |
8,358 |
9,768 |
17,144 |
5,410 |
6,119 |
||||||||||||||
| Amortization of intangibles |
2,692 |
2,972 |
2,411 |
317 |
444 |
||||||||||||||
| FDIC insurance expense |
5,106 |
4,925 |
4,149 |
3,526 |
1,738 |
||||||||||||||
| Other operating expense |
26,590 |
26,880 |
21,358 |
14,199 |
16,386 |
||||||||||||||
| Total other expenses |
179,391 |
211,378 |
189,640 |
106,925 |
112,181 |
||||||||||||||
| Income before income tax expense |
81,047 |
56,673 |
70,521 |
51,870 |
53,439 |
||||||||||||||
| Income tax expense |
23,873 |
15,958 |
22,071 |
14,524 |
15,215 |
||||||||||||||
| Net income |
57,174 |
40,715 |
48,450 |
37,346 |
38,224 |
||||||||||||||
| Total other comprehensive income (loss), net of taxes |
16,736 |
(11,716) |
(47,777) |
(7,914) |
(2,305) |
||||||||||||||
| Comprehensive income |
$ |
73,910 |
$ |
28,999 |
$ |
673 |
$ |
29,432 |
$ |
35,919 |
|||||||||
| Net income attributable to common shareholders |
$ |
55,264 |
$ |
38,936 |
$ |
46,598 |
$ |
36,036 |
$ |
38,224 |
|||||||||
| Net income used in diluted EPS calculation |
$ |
55,264 |
$ |
38,936 |
$ |
46,598 |
$ |
36,036 |
$ |
38,224 |
|||||||||
| Weighted-average number of common shares - basic |
165,054 |
165,044 |
157,863 |
109,689 |
109,652 |
||||||||||||||
| Weighted-average number of common shares - diluted |
166,097 |
165,874 |
158,390 |
110,238 |
109,652 |
||||||||||||||
| Basic earnings per common share |
$ |
0.33 |
$ |
0.24 |
$ |
0.30 |
$ |
0.33 |
$ |
0.35 |
|||||||||
| Diluted earnings per common share |
$ |
0.33 |
$ |
0.23 |
$ |
0.29 |
$ |
0.33 |
$ |
0.35 |
|||||||||
| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
|||||||||||||||||||||||
| ASSET QUALITY INFORMATION (excluding acquired loans and covered assets) (a) |
|||||||||||||||||||||||
| (Unaudited) |
(Audited) |
||||||||||||||||||||||
| (Dollars in thousands, except ratios) |
Quarterly Periods |
Annual Period |
|||||||||||||||||||||
| December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
December 31, |
||||||||||||||||||
| Allowance for Credit Losses |
2013 |
2013 |
2013 |
2013 |
2012 |
2012 |
|||||||||||||||||
| Allowance for originated loan losses, beginning of period |
$ |
98,291 |
$ |
98,645 |
$ |
98,843 |
$ |
98,942 |
$ |
98,942 |
$ |
107,699 |
|||||||||||
| Provision for originated loan losses |
1,552 |
2,523 |
3,151 |
5,808 |
7,116 |
33,976 |
|||||||||||||||||
| Charge-offs |
9,913 |
8,515 |
10,969 |
10,776 |
12,475 |
65,905 |
|||||||||||||||||
| Recoveries |
6,554 |
5,638 |
7,620 |
4,869 |
5,359 |
23,172 |
|||||||||||||||||
| Net charge-offs |
3,359 |
2,877 |
3,349 |
5,907 |
7,116 |
42,733 |
|||||||||||||||||
| Allowance for originated loan losses, end of period |
$ |
96,484 |
$ |
98,291 |
$ |
98,645 |
$ |
98,843 |
$ |
98,942 |
$ |
98,942 |
|||||||||||
| Reserve for unfunded lending commitments, |
|||||||||||||||||||||||
| beginning of period |
$ |
8,493 |
$ |
8,114 |
$ |
4,941 |
$ |
5,433 |
$ |
5,760 |
$ |
6,373 |
|||||||||||
| Provision for (relief of) credit losses |
(586) |
379 |
3,173 |
(492) |
(327) |
(940) |
|||||||||||||||||
| Reserve for unfunded lending commitments, |
|||||||||||||||||||||||
| end of period |
$ |
7,907 |
$ |
8,493 |
$ |
8,114 |
$ |
4,941 |
$ |
5,433 |
$ |
5,433 |
|||||||||||
| Allowance for Credit Losses |
$ |
104,391 |
$ |
106,784 |
$ |
106,759 |
$ |
103,784 |
$ |
104,375 |
$ |
104,375 |
|||||||||||
|
Ratios |
|||||||||||||||||||||||
| Provision for loan losses to average loans |
0.06 |
% |
0.11 |
% |
0.14 |
% |
0.27 |
% |
0.34 |
% |
0.42 |
% |
|||||||||||
| Net charge-offs to average loans |
0.13 |
% |
0.12 |
% |
0.15 |
% |
0.27 |
% |
0.34 |
% |
0.53 |
% |
|||||||||||
| Allowance for loan losses to period-end loans |
0.94 |
% |
1.00 |
% |
1.08 |
% |
1.13 |
% |
1.13 |
% |
1.13 |
% |
|||||||||||
| Allowance for credit losses to period-end loans |
1.02 |
% |
1.09 |
% |
1.17 |
% |
1.18 |
% |
1.20 |
% |
1.20 |
% |
|||||||||||
| Allowance for loan losses to nonperforming loans |
228.62 |
% |
276.19 |
% |
216.97 |
% |
242.21 |
% |
269.69 |
% |
269.69 |
% |
|||||||||||
| Allowance for credit losses to nonperforming loans |
247.35 |
% |
300.06 |
% |
234.82 |
% |
254.32 |
% |
284.50 |
% |
284.50 |
% |
|||||||||||
|
Asset Quality |
|||||||||||||||||||||||
| Impaired originated loans: |
|||||||||||||||||||||||
| Nonaccrual |
$ |
25,674 |
$ |
19,140 |
$ |
28,935 |
$ |
23,843 |
$ |
21,766 |
$ |
21,766 |
|||||||||||
| Other nonperforming loans: |
|||||||||||||||||||||||
| Nonaccrual |
16,529 |
16,448 |
16,529 |
16,966 |
14,921 |
14,921 |
|||||||||||||||||
| Total nonperforming loans |
42,203 |
35,588 |
45,464 |
40,809 |
36,687 |
36,687 |
|||||||||||||||||
| Other real estate ("ORE") |
18,680 |
19,838 |
20,713 |
11,422 |
13,537 |
13,537 |
|||||||||||||||||
| Total nonperforming assets ("NPAs") |
$ |
60,883 |
$ |
55,426 |
$ |
66,177 |
$ |
52,231 |
$ |
50,224 |
$ |
50,224 |
|||||||||||
| NPAs to period-end loans + ORE |
0.60 |
% |
0.57 |
% |
0.72 |
% |
0.59 |
% |
0.57 |
% |
0.57 |
% |
|||||||||||
| Accruing originated loans past due 90 days or more |
$ |
11,176 |
$ |
12,452 |
$ |
11,760 |
$ |
12,393 |
$ |
9,417 |
$ |
9,417 |
|||||||||||
|
(a) Due to the impact of business combination accounting and protection of FDIC loss sharing agreements, which provide considerable protection against credit risk, acquired and covered loans are excluded from this table to provide for improved comparability to prior periods and better perspective into asset quality trends. |
|||||||||||||||||||||||
| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
|||||||||||||||||||
| NONINTEREST INCOME AND NONINTEREST EXPENSE DETAIL |
|||||||||||||||||||
| (Unaudited) |
|||||||||||||||||||
| (Dollars in thousands) |
|||||||||||||||||||
| 2013 |
2013 |
2013 |
2013 |
2012 |
|||||||||||||||
| QUARTERLY OTHER INCOME DETAIL |
4th qtr |
3rd qtr |
2nd qtr |
1st qtr |
4th qtr |
||||||||||||||
| Trust department income |
$ |
10,255 |
$ |
9,608 |
$ |
9,167 |
$ |
5,741 |
$ |
5,662 |
|||||||||
| Service charges on deposits |
19,084 |
22,146 |
20,582 |
12,585 |
14,247 |
||||||||||||||
| Credit card fees |
12,414 |
13,588 |
14,317 |
10,222 |
11,167 |
||||||||||||||
| ATM and other service fees |
5,659 |
5,216 |
4,945 |
3,335 |
3,432 |
||||||||||||||
| Bank owned life insurance income |
4,037 |
4,351 |
3,641 |
4,897 |
3,067 |
||||||||||||||
| Investment services and insurance |
3,530 |
3,403 |
3,429 |
2,415 |
2,147 |
||||||||||||||
| Investment securities gains/(losses), net |
— |
— |
(2,794) |
(9) |
2,425 |
||||||||||||||
| Loan sales and servicing income |
3,577 |
3,644 |
7,985 |
7,863 |
7,946 |
||||||||||||||
| Other operating income |
13,864 |
9,134 |
8,167 |
10,343 |
11,559 |
||||||||||||||
| Total Other Income |
$ |
72,420 |
$ |
71,090 |
$ |
69,439 |
$ |
57,392 |
$ |
61,652 |
|||||||||
|
2013 |
2013 |
2013 |
2013 |
2012 |
|||||||||||||||
| QUARTERLY OTHER EXPENSES DETAIL |
4th qtr |
3rd qtr |
2nd qtr |
1st qtr |
4th qtr |
||||||||||||||
| Salaries and wages |
$ |
76,685 |
$ |
79,369 |
$ |
85,680 |
$ |
46,391 |
$ |
45,988 |
|||||||||
| Pension and employee benefits |
16,936 |
18,021 |
19,419 |
11,515 |
15,572 |
||||||||||||||
| Net occupancy expense |
14,066 |
13,816 |
13,346 |
8,282 |
7,114 |
||||||||||||||
| Equipment expense |
13,177 |
11,040 |
10,309 |
7,349 |
7,398 |
||||||||||||||
| Taxes, other than income taxes |
2,618 |
2,785 |
2,891 |
1,922 |
1,924 |
||||||||||||||
| Stationery, supplies and postage |
4,895 |
3,801 |
3,407 |
2,096 |
2,162 |
||||||||||||||
| Bankcard, loan processing and other costs |
10,886 |
40,786 |
12,417 |
7,840 |
9,260 |
||||||||||||||
| Advertising |
4,855 |
4,432 |
3,745 |
2,070 |
2,774 |
||||||||||||||
| Professional services |
8,358 |
9,768 |
17,144 |
5,410 |
6,119 |
||||||||||||||
| Telephone |
3,427 |
3,326 |
2,728 |
1,177 |
1,230 |
||||||||||||||
| Amortization of intangibles |
2,692 |
2,972 |
2,411 |
317 |
444 |
||||||||||||||
| FDIC insurance expense |
5,106 |
4,925 |
4,149 |
3,526 |
1,738 |
||||||||||||||
| Other operating expense |
15,690 |
16,337 |
11,994 |
9,030 |
10,458 |
||||||||||||||
| Total Other Expenses |
$ |
179,391 |
$ |
211,378 |
$ |
189,640 |
$ |
106,925 |
$ |
112,181 |
|||||||||
| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
|||||||||||||||
| ALLOWANCE FOR ORIGINATED LOAN LOSSES - Net Charge-off Detail (excluding acquired and covered loans) (a) |
|||||||||||||||
| (Unaudited) |
Quarters Ended |
Year Ended |
|||||||||||||
| (Dollars in thousands) |
December 31, |
December 31, |
|||||||||||||
| 2013 |
2012 |
2013 |
2012 |
||||||||||||
| Allowance for originated loan losses - beginning of period |
$ |
98,291 |
$ |
98,942 |
$ |
98,942 |
$ |
107,699 |
|||||||
| Loans charged off: |
|||||||||||||||
| Commercial |
993 |
5,081 |
7,637 |
28,648 |
|||||||||||
| Mortgage |
718 |
533 |
1,903 |
3,964 |
|||||||||||
| Installment |
4,895 |
3,588 |
16,683 |
18,029 |
|||||||||||
| Home equity |
1,201 |
1,141 |
5,036 |
7,249 |
|||||||||||
| Credit cards |
1,312 |
1,553 |
5,541 |
6,171 |
|||||||||||
| Leases |
— |
144 |
1,237 |
144 |
|||||||||||
| Overdrafts |
794 |
435 |
2,136 |
1,700 |
|||||||||||
| Total |
9,913 |
12,475 |
40,173 |
65,905 |
|||||||||||
| Recoveries: |
|||||||||||||||
| Commercial |
2,281 |
1,317 |
9,012 |
5,626 |
|||||||||||
| Mortgage |
97 |
44 |
230 |
235 |
|||||||||||
| Installment |
2,649 |
2,581 |
10,459 |
11,635 |
|||||||||||
| Home equity |
955 |
725 |
2,492 |
2,819 |
|||||||||||
| Credit cards |
421 |
555 |
1,841 |
2,138 |
|||||||||||
| Manufactured housing |
11 |
9 |
60 |
59 |
|||||||||||
| Leases |
— |
— |
100 |
38 |
|||||||||||
| Overdrafts |
140 |
128 |
487 |
622 |
|||||||||||
| Total |
6,554 |
5,359 |
24,681 |
23,172 |
|||||||||||
| Net charge-offs |
3,359 |
7,116 |
15,492 |
42,733 |
|||||||||||
| Provision for originated loan losses |
1,552 |
7,116 |
13,034 |
33,976 |
|||||||||||
| Allowance for originated loan losses-end of period |
$ |
96,484 |
$ |
98,942 |
$ |
96,484 |
$ |
98,942 |
|||||||
| Average originated loans |
$ |
9,988,587 |
$ |
8,444,208 |
$ |
9,252,555 |
$ |
8,089,317 |
|||||||
| Ratio to average originated loans: |
|||||||||||||||
| (Annualized) originated net charge-offs |
0.13 |
% |
0.34 |
% |
0.17 |
% |
0.53 |
% |
|||||||
| Provision for originated loan losses |
0.06 |
% |
0.34 |
% |
0.14 |
% |
0.42 |
% |
|||||||
| Originated Loans, period-end |
$ |
10,213,387 |
$ |
8,731,659 |
$ |
10,213,387 |
$ |
8,731,659 |
|||||||
| Allowance for credit losses: |
$ |
104,391 |
$ |
104,375 |
$ |
104,391 |
$ |
104,375 |
|||||||
| To (annualized) net charge-offs |
7.83 |
3.69 |
6.74 |
2.44 |
|||||||||||
| Allowance for originated loan losses: |
|||||||||||||||
| To period-end originated loans |
0.94 |
% |
1.13 |
% |
0.94 |
% |
1.13 |
% |
|||||||
| To (annualized) net originated charge-offs |
7.24 |
3.50 |
6.23 |
2.32 |
|||||||||||
| (a) Due to the impact of business combination accounting and protection of FDIC loss sharing agreements, which provide considerable protection against credit risk, acquired and covered loans are excluded from this table to provide for improved comparability to prior periods and better perspective into asset quality trends. |
|||||||||||||||
SOURCE FirstMerit Corporation
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