FirstMerit Reports Third Quarter 2012 EPS of $0.32 Per Share
AKRON, Ohio, Oct. 23, 2012 /PRNewswire/ --
Quarterly Highlights include:
- Sustained profitability: 54th consecutive quarter of profitability
- Continued organic growth: Average commercial noncovered loan growth of $169.4 million, or 3.21%, from prior quarter; average core deposit growth of $126.8 million, or 1.28%, from prior quarter
- Strong balance sheet: Strong tangible common equity ratio increased to 8.18% from 8.01% in the prior quarter.
FirstMerit Corporation (Nasdaq: FMER) reported third quarter 2012 net income of $35.0 million, or $0.32 per diluted share. This compares with $30.6 million, or $0.28 per diluted share, for the second quarter 2012 and $31.7 million, or $0.29 per diluted share, for the third quarter 2011.
(Logo: http://photos.prnewswire.com/prnh/20070920/CLTU138LOGO )
Returns on average common equity ("ROE") and average assets ("ROA") for the third quarter 2012 were 8.60% and 0.94%, respectively, compared with 7.69% and 0.84%, respectively, for the second quarter 2012 and 8.02% and 0.86%, respectively, for the third quarter 2011.
"Our strong results in the third quarter reflect our continued focus on banking fundamentals in the face of ongoing industry challenges including a low-interest environment and slow economic recovery. Our financial strength and stability support continued geographic growth. To that point, we announced this quarter our intention to acquire Citizens Republic Bancorp ("Citizens") in Michigan. We anticipate this transaction will close in the second quarter of 2013, subject to the receipt of regulatory approvals and other closing conditions, and at that time we look to become the bank of choice throughout the Upper Midwest, across the five contiguous states of Pennsylvania, Ohio, Michigan, Illinois and Wisconsin," said Paul G. Greig, chairman, president and CEO, FirstMerit Corporation.
"Noncovered commercial loan growth was very strong this quarter in both our Chicago and legacy Ohio markets. Additionally, progress on our efficiency initiative is reflected in our lower operating expense levels and improved efficiency ratio compared against both prior and year ago quarterly periods," said Greig.
Net interest margin was 3.66% for the third quarter of 2012 compared with 3.77% for the second quarter of 2012 and 3.75% for the third quarter of 2011. The net interest margin compressed 11 basis points compared with the second quarter of 2012 due to reductions in overall loan and investment portfolio yields. Reductions in deposit costs and a favorable mix shift did not offset the downward pressure on earning asset yields in this persistent low rate environment.
Average noncovered loans during the third quarter of 2012 increased $244.4 million, or 3.08%, compared with the second quarter of 2012 and increased $702.2 million, or 9.38%, compared with the third quarter of 2011. Average noncovered commercial loans increased $169.4 million, or 3.21%, compared with the prior quarter, and increased $567.7 million, or 11.64%, compared with the year ago quarter. The average consumer loan portfolio grew for the fifth consecutive quarter, increasing $65.3 million, or 2.52%, compared to the prior quarter, and $102.8 million, or 4.03%, compared with the year ago quarter.
Average deposits were $11.6 billion during the third quarter of 2012, an increase of $36.6 million, or 0.32%, compared with the second quarter of 2012, and an increase of $144.2 million, or 1.26%, compared with the third quarter of 2011. During the third quarter 2012, average core deposits, which exclude time deposits, increased $126.8 million, or 1.28%, compared with the second quarter 2012 and increased $715.6 million, or 7.66%, compared with the third quarter 2011. Average time deposits decreased $90.1 million, or 5.57%, and decreased $571.4 million, or 27.21%, respectively, over prior and year-ago quarters. The Corporation continues to emphasize growth in lower cost core deposit products and decrease its reliance on certificates of deposit accounts to support balance sheet growth. For the third quarter of 2012, average core deposits accounted for 86.82% of total average deposits, compared with 85.99% for the second quarter of 2012 and 81.66% for the third quarter of 2011.
Average investments decreased $4.3 million, or 0.12%, compared with the second quarter of 2012 and increased $17.5 million, or 0.48% compared with the third quarter of 2011.
Net interest income on a fully tax-equivalent ("FTE") basis was $120.7 million in the third quarter 2012 compared with $121.7 million in the second quarter of 2012 and $121.8 million in the third quarter of 2011.
Noninterest income, excluding gains on securities transactions of $0.6 million, for the third quarter of 2012 was $54.4 million, a decrease of $0.4 million, or 0.70%, from the second quarter of 2012 and a decrease of $2.0 million, or 3.54%, from the third quarter of 2011. The decrease in noninterest income from the second quarter of 2012 was attributable to a decrease of $2.6 million in gains on covered loans paid in full partially offset by increased loan sales and servicing income of $2.1 million. The decrease in noninterest income from the third quarter of 2011 was attributable a decline in service charges on deposits of $3.2 million as a result of regulatory revisions to overdraft fee policies which took effect in the fourth quarter of 2011 and a decline in credit card fees of $2.6 million as a result of the implementation of the Durbin Interchange Amendment in the fourth quarter of 2011. These declines in income were partially offset by an increase in loans sales and servicing income of $3.8 million resulting from an increase in mortgage loan originations and refinancings activity due to a decrease in interest rates in 2012.
Other income, net of $0.6 million in securities gains, as a percentage of net revenue for the third quarter of 2012 was 31.05% compared with 31.03% for second quarter of 2012 and 31.64% for the third quarter of 2011. Net revenue is defined as net interest income, on an FTE basis, plus other income, less gains from securities sales.
Noninterest expense for the third quarter of 2012 was $108.6 million, a decrease of $10.5 million, or 8.81%, from the second quarter of 2012, which included $8.9 million in one-time charges related to the Efficiency Initiative announced in the prior quarter, and a decrease of $7.4 million, or 6.36%, from the third quarter of 2011. Other one-time charges incurred in the third quarter of 2012 included $0.5 million associated with costs of closing eight full service branches and $1.1 million of professional and legal fees associated with the proposed acquisition of Citizens. The Corporation demonstrated significant ongoing progress in reducing operating expenses in response to the challenging industry environment.
During the third quarter of 2012, the Corporation reported an efficiency ratio of 61.75%, compared with 67.21% for the second quarter of 2012 and 64.78% for the third quarter of 2011. Excluding the $8.9 million in one-time charges related to the Efficiency Initiative announced in the prior quarter, the reported efficiency ratio for the second quarter of 2012 would be 62.15%.
As a result of guidance from the Office of the Comptroller of the Currency ("OCC"), $10.6 million of consumer loans were identified as troubled debt restructurings whereby the borrower's obligation to the Corporation has been discharged in bankruptcy and the borrower has not reaffirmed the debt. These loans were reclassified from performing loans to nonaccrual status and consisted of $6.7 million of first mortgages, $1.0 million of junior liens and $2.9 million of automobile loans, and net loan charge-offs of $2.8 million were recognized.
Net charge-offs of noncovered loans totaled $14.9 million, or 0.72% of average noncovered loans in the third quarter of 2012, including $2.8 million in charge-offs relating to the aforementioned troubled debt restructured loans, compared with $8.8 million, or 0.44% of average noncovered loans, in the second quarter 2012 and $14.6 million, or 0.77% of average noncovered loans, in the third quarter of 2011.
Nonperforming assets totaled $64.1 million at September 30, 2012, an increase of $3.0 million, or 4.87%, compared with June 30, 2012 and a decrease of $26.0 million, or 28.89%, compared with September 30, 2011. The increase in nonperforming assets in the third quarter is a result of the $10.6 million in loans noted above. Excluding the impact of the OCC guidance, nonperforming assets decreased $7.6 million or 12.44% compared with June 30, 2012 and $36.6 million or 40.63% compared with September 30, 2011. Nonperforming assets at September 30, 2012 represented 0.77% of period-end noncovered loans plus noncovered other real estate compared with 0.75% at June 30, 2012 and 1.18% at September 30, 2011.
The allowance for noncovered loan losses totaled $98.9 million at September 30, 2012, down from $103.8 million at June 30, 2012. At September 30, 2012, the allowance for noncovered loan losses was 1.19% of period-end noncovered loans compared with 1.28% at June 30, 2012 and 1.43% at September 30, 2011. The allowance for credit losses is the sum of the allowance for noncovered loan losses and the reserve for unfunded lending commitments. For comparative purposes the allowance for credit losses was 1.26% of period-end noncovered loans at September 30, 2012, compared with 1.35% at June 30, 2012 and 1.51% at September 30, 2011. The allowance for credit losses to nonperforming noncovered loans was 208.11% at September 30, 2012, compared with 234.57% at June 30, 2012 and 170.16% at September 30, 2011.
The Corporation's total assets at September 30, 2012 were $14.6 billion, an increase of $7.5 million, or 0.05%, compared with June 30, 2012 and a decrease of $59.4 million, or 0.40%, compared with September 30, 2011.
Total deposits were $11.5 billion at September 30, 2012, a decrease of $83.4 million, or 0.72%, from June 30, 2012 and an increase of $136.3 million, or 1.20%, from September 30, 2011. Core deposits totaled $10.1 billion at September 30, 2012, an increase of $18.3 million, or 0.18% from June 30, 2012 and an increase of $0.6 billion, or 6.38%, from September 30, 2011.
Shareholders' equity was $1.6 billion at September 30, 2012, June 30, 2012 and September 30, 2011, respectively. The Corporation maintained a strong capital position as tangible common equity to assets was 8.18% at September 30, 2012, compared with 8.01% at June 30, 2012 and 7.75% at September 30, 2011. The common cash dividend per share paid in the third quarter 2012 was $0.16.
Third Quarter 2012 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 third 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: 39956933. A replay of the conference call will be available at approximately 2:00 p.m. (Eastern Time) on October 23, 2012 through November 6, 2012 by dialing (855) 859-2056, and entering the PIN: 39956933. The Corporation will provide a slide presentation, which management will speak to during the conference call. A copy of the presentation will be available prior to the earnings conference call at https://www.firstmerit.com/personal/investors.aspx; click on the Presentations link to access the slide presentation.
About FirstMerit Corporation
FirstMerit Corporation is a diversified financial services company headquartered in Akron, Ohio, with assets of $14.6 billion as of September 30, 2012 and 196 banking offices and 204 ATM locations in Ohio, Western Pennsylvania, and Chicago, Illinois areas. 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, FirstMerit Title Agency, Ltd. and FirstMerit Community Development Corporation.
Subsequent Events
The Corporation is required under generally accepted accounting principles to evaluate subsequent events through the filing of its consolidated financial statements for the quarter ended September 30, 2012 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 September 30, 2012 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, success of the Corporation's efforts to reduce operating expenses, competitive pressures, changes in accounting, tax or regulatory practices or requirements, the Corporation's ability to successfully complete the proposed acquisition of Citizens and those risk factors detailed in the Corporation's periodic reports and registration statements 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.
Additional Information and Where to Find It
This document does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. In connection with the proposed merger between FirstMerit and Citizens, FirstMerit will file with the U.S. Securities and Exchange Commission ("SEC") a Registration Statement on Form S-4 that will include a joint proxy statement of FirstMerit and Citizens that also constitutes a prospectus of FirstMerit. FirstMerit and Citizens will deliver the joint proxy statement/prospectus to their respective shareholders. FirstMerit and Citizens urge investors and shareholders to read the joint proxy statement/prospectus regarding the proposed merger when it becomes available, as well as other documents filed with the SEC, because they will contain important information. You may obtain copies of all documents filed with the SEC regarding this transaction, free of charge, at the SEC's website (www.sec.gov). You may also obtain these documents, free of charge, from FirstMerit's website (www.firstmerit.com) under the heading "Investors" and then under the heading "Publications and Filings." You may also obtain these documents, free of charge, from Citizens' website (www.citizensbanking.com) under the tab "Investors" and then under the heading "Financial Documents" and then under the heading "SEC Filings."
Participants in the Merger Solicitation
FirstMerit, Citizens, and their respective directors, executive officers and certain other members of management and employees may be soliciting proxies from FirstMerit and Citizens shareholders in favor of the merger and related matters. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of FirstMerit and Citizens shareholders in connection with the proposed merger will be set forth in the joint proxy statement/prospectus when it is filed with the SEC. You can find information about FirstMerit's executive officers and directors in its definitive proxy statement filed with the SEC on March 8, 2012. You can find information about Citizens' executive officers and directors in its definitive proxy statement filed with the SEC on March 12, 2012. Additional information about FirstMerit's executive officers and directors and Citizens' executive officers and directors can be found in the above-referenced Registration Statement on Form S-4 when it becomes available. You can obtain free copies of these documents from FirstMerit and Citizens using the contact information above.
| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
|||||
| Consolidated Financial Highlights |
|||||
| (Unaudited) |
|||||
| (Dollars in thousands) |
|||||
| Quarters |
|||||
| 2012 |
2012 |
2012 |
2011 |
2011 |
|
| 3rd Qtr |
2nd Qtr |
1st Qtr |
4th Qtr |
3rd Qtr |
|
| EARNINGS |
|||||
| Net interest income FTE (a) |
$ 120,741 |
$ 121,689 |
$ 121,428 |
$ 123,598 |
$ 121,788 |
| Provision for noncovered loan losses |
9,965 |
8,766 |
8,129 |
12,275 |
14,604 |
| Provision for covered loan losses |
6,214 |
3,430 |
5,932 |
2,773 |
4,768 |
| Other income |
54,925 |
55,301 |
51,726 |
59,737 |
60,772 |
| Other expenses |
108,587 |
119,077 |
113,768 |
123,874 |
115,957 |
| FTE adjustment (a) |
2,851 |
2,766 |
2,641 |
2,632 |
2,396 |
| Net income |
34,953 |
30,585 |
30,344 |
30,496 |
31,737 |
| Diluted EPS |
0.32 |
0.28 |
0.28 |
0.28 |
0.29 |
| PERFORMANCE RATIOS |
|||||
| Return on average assets (ROA) |
0.94% |
0.84% |
0.84% |
0.83% |
0.86% |
| Return on average common equity (ROE) |
8.60% |
7.69% |
7.72% |
7.70% |
8.02% |
| Net interest margin FTE (a) |
3.66% |
3.77% |
3.78% |
3.85% |
3.75% |
| Efficiency ratio |
61.75% |
67.21% |
65.52% |
69.46% |
64.78% |
| Number of full-time equivalent employees |
2,733 |
2,789 |
2,997 |
3,018 |
3,016 |
| MARKET DATA |
|||||
| Book value/common share |
$ 14.82 |
$14.60 |
$14.51 |
$14.33 |
$14.38 |
| Period-end common share mkt value |
14.71 |
16.51 |
16.86 |
15.13 |
11.36 |
| Market as a % of book |
99% |
113% |
116% |
106% |
79% |
| Cash dividends/common share |
$ 0.16 |
$0.16 |
$0.16 |
$0.16 |
$0.16 |
| Common stock dividend payout ratio |
50.00% |
57.14% |
57.14% |
57.14% |
55.17% |
| Average basic common shares |
109,645 |
109,562 |
109,211 |
109,249 |
109,245 |
| Average diluted common shares |
109,645 |
109,562 |
109,211 |
109,249 |
109,246 |
| Period end common shares |
109,653 |
109,641 |
109,187 |
109,251 |
109,247 |
| Common shares repurchased |
6 |
111 |
69 |
7 |
10 |
| Common stock market capitalization |
$ 1,612,996 |
$ 1,810,173 |
$ 1,840,893 |
$ 1,652,968 |
$ 1,241,046 |
| ASSET QUALITY (excluding acquired loans) |
|||||
| Gross charge-offs |
$ 20,999 |
$ 15,014 |
$ 17,417 |
$ 18,984 |
$ 20,014 |
| Net charge-offs |
14,872 |
8,766 |
11,979 |
13,763 |
14,604 |
| Allowance for noncovered loan losses |
98,942 |
103,849 |
103,849 |
107,699 |
109,187 |
| Reserve for unfunded lending commitments |
5,760 |
5,666 |
5,410 |
6,373 |
6,360 |
| Nonperforming assets (NPAs) (b) |
64,055 |
61,080 |
67,933 |
81,094 |
90,075 |
| Net charge-offs/average loans ratio (b) |
0.72% |
0.44% |
0.62% |
0.71% |
0.77% |
| Allowance for noncovered loan losses/period-end loans (b) |
1.19% |
1.28% |
1.32% |
1.39% |
1.43% |
| Allowance for credit losses/period-end loans (b) |
1.26% |
1.35% |
1.39% |
1.47% |
1.51% |
| NPAs/loans and other real estate (b) |
0.77% |
0.75% |
0.86% |
1.04% |
1.18% |
| Allowance for noncovered loan losses/nonperforming loans |
196.66% |
222.44% |
194.97% |
166.64% |
160.80% |
| Allowance for credit losses/nonperforming loans |
208.11% |
234.57% |
205.13% |
176.50% |
170.16% |
| CAPITAL & LIQUIDITY |
|||||
| Period-end tangible common equity to assets |
8.18% |
8.01% |
7.86% |
7.86% |
7.75% |
| Average equity to assets |
10.97% |
10.98% |
10.91% |
10.75% |
10.75% |
| Average equity to total loans (c) |
17.46% |
17.57% |
17.50% |
17.40% |
17.55% |
| Average total loans to deposits (c) |
79.89% |
78.78% |
78.74% |
79.12% |
78.18% |
| AVERAGE BALANCES |
|||||
| Assets |
$ 14,734,016 |
$ 14,558,514 |
$ 14,496,937 |
$ 14,623,441 |
$ 14,610,628 |
| Deposits |
11,591,931 |
11,555,283 |
11,472,021 |
11,416,546 |
11,447,682 |
| Loans, excluding acquired loans (c) |
8,121,083 |
7,857,840 |
7,677,963 |
7,520,400 |
7,298,446 |
| Acquired loans, including covered loans (c) |
1,139,568 |
1,245,246 |
1,355,086 |
1,512,123 |
1,651,559 |
| Earning assets |
13,119,473 |
12,986,988 |
12,935,184 |
12,747,868 |
12,878,105 |
| Shareholders' equity |
1,616,569 |
1,599,187 |
1,581,009 |
1,572,061 |
1,570,411 |
| ENDING BALANCES |
|||||
| Assets |
$ 14,628,843 |
$ 14,621,344 |
$ 14,670,818 |
$ 14,441,702 |
$ 14,688,278 |
| Deposits |
11,532,426 |
11,615,841 |
11,648,165 |
11,431,609 |
11,396,121 |
| Loans, excluding acquired loans (c) |
8,260,426 |
8,031,998 |
7,764,058 |
7,635,776 |
7,453,613 |
| Acquired loans, including covered loans (c) |
1,099,052 |
1,187,203 |
1,306,165 |
1,404,644 |
1,604,706 |
| Goodwill |
460,044 |
460,044 |
460,044 |
460,044 |
460,044 |
| Intangible assets |
6,817 |
7,274 |
7,756 |
8,239 |
8,782 |
| Earning assets |
13,219,301 |
13,212,071 |
13,318,202 |
13,011,267 |
12,885,242 |
| Total shareholders' equity |
1,624,704 |
1,600,815 |
1,584,105 |
1,565,953 |
1,570,654 |
| NOTES: |
|||||
| (a) - Net interest income on a fully tax-equivalent ("FTE") basis restates interest on tax-exempt securities and loans as if such interest were subject to federal income tax at the statutory rate. Net interest income on an FTE basis is not an accounting principle generally accepted in the United States of America. |
|||||
| (b) - Covered loans and other real estate from George Washington Savings Bank and Midwest Bank & Trust Company are excluded from the ratio of our allowance for loan and credit losses and NPAs. Nonperforming assets at September 30, 2012 includes $10.6 million of loans resulting from implementation of a third quarter 2012 OCC update to the Bank Accounting Advisory Series. The updated guidance requires those performing loans where the borrower's obligation to the Corporation has been restructured in bankruptcy to be placed on nonaccrual status. |
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| (c) - Excludes loss share receivable of $131.9 million, $152.6 million, $171.1 million, $205.7 million and $220.5 million as of September 30, 2012, June 30, 2012, March 31, 2012, December 31, 2011 and September 30, 2011, respectively. |
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| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
||||||||
| Consolidated Balance Sheets |
||||||||
| (Dollars in thousands ) |
||||||||
| (Unaudited, except December 31, 2011, which is derived from the audited financial statements) |
||||||||
| September 30, |
December 31, |
September 30, |
||||||
| 2012 |
2011 |
2011 |
||||||
| ASSETS |
||||||||
| Cash and due from banks |
$ 201,359 |
$ 219,256 |
$ 202,886 |
|||||
| Interest-bearing deposits in banks |
37,058 |
158,063 |
116,059 |
|||||
| Total cash and cash equivalents |
238,417 |
377,319 |
318,945 |
|||||
| Investment securities |
||||||||
| Held-to-maturity |
620,631 |
82,764 |
92,214 |
|||||
| Available-for-sale |
2,911,993 |
3,353,553 |
3,198,046 |
|||||
| Other investments |
140,730 |
140,726 |
160,793 |
|||||
| Loans held for sale |
17,540 |
30,077 |
39,340 |
|||||
| Noncovered loans: |
||||||||
| Commercial |
5,511,678 |
5,107,747 |
5,018,857 |
|||||
| Residential mortgage |
439,062 |
413,664 |
397,309 |
|||||
| Installment |
1,321,081 |
1,263,665 |
1,271,327 |
|||||
| Home equity |
789,743 |
743,982 |
743,377 |
|||||
| Credit cards |
143,918 |
146,356 |
142,710 |
|||||
| Leases |
110,938 |
73,530 |
57,992 |
|||||
| Total noncovered loans |
8,316,420 |
7,748,944 |
7,631,572 |
|||||
| Allowance for noncovered loan losses |
(98,942) |
(107,699) |
(109,187) |
|||||
| Net noncovered loans |
8,217,478 |
7,641,245 |
7,522,385 |
|||||
| Covered loans (includes loss share receivable of $131.9 million, $205.7 million and $220.5 million at September 30, 2012, December 31, 2011 and September 30, 2011, respectively) |
1,174,929 |
1,497,140 |
1,647,218 |
|||||
| Allowance for covered loan losses |
(43,644) |
(36,417) |
(34,603) |
|||||
| Net covered loans |
1,131,285 |
1,460,723 |
1,612,615 |
|||||
| Net loans |
9,348,763 |
9,101,968 |
9,135,000 |
|||||
| Premises and equipment, net |
182,043 |
192,949 |
193,075 |
|||||
| Goodwill |
460,044 |
460,044 |
460,044 |
|||||
| Intangible assets |
6,817 |
8,239 |
8,782 |
|||||
| Covered other real estate (includes loss share receivable of $0.1 million, $1.3 million and $3.5 million at September 30, 2012, December 31, 2011 and September 30, 2011, respectively) |
56,795 |
54,505 |
61,890 |
|||||
| Accrued interest receivable and other assets |
645,070 |
639,558 |
1,020,149 |
|||||
| Total assets |
$ 14,628,843 |
$ 14,441,702 |
$ 14,688,278 |
|||||
| LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||
| Deposits: |
||||||||
| Noninterest-bearing |
$ 3,231,500 |
$ 3,030,225 |
$ 2,971,555 |
|||||
| Interest-bearing |
1,079,913 |
1,062,896 |
967,574 |
|||||
| Savings and money market accounts |
5,744,103 |
5,595,409 |
5,513,472 |
|||||
| Certificates and other time deposits |
1,476,910 |
1,743,079 |
1,943,520 |
|||||
| Total deposits |
11,532,426 |
11,431,609 |
11,396,121 |
|||||
| Federal funds purchased and securities sold under agreements to repurchase |
963,455 |
866,265 |
987,030 |
|||||
| Wholesale borrowings |
178,083 |
203,462 |
248,006 |
|||||
| Accrued taxes, expenses, and other liabilities |
330,175 |
374,413 |
486,467 |
|||||
| Total liabilities |
13,004,139 |
12,875,749 |
13,117,624 |
|||||
| Shareholders' equity: |
||||||||
| Preferred stock, without par value: authorized and unissued 7,000,000 shares |
— |
— |
— |
|||||
| Preferred stock, Series A, without par value: designated 800,000 shares; none outstanding |
— |
— |
— |
|||||
| Convertible preferred stock, Series B, without par value: designated 220,000 shares; none outstanding |
— |
— |
— |
|||||
| Common stock, without par value; authorized 300,000,000 shares; issued: September 30, 2012, December 31, 2011 and September 30, 2011 - 115,121,731 shares |
127,937 |
127,937 |
127,937 |
|||||
| Capital surplus |
473,781 |
479,882 |
478,738 |
|||||
| Accumulated other comprehensive loss |
(13,900) |
(23,887) |
(4,654) |
|||||
| Retained earnings |
1,175,001 |
1,131,203 |
1,118,027 |
|||||
| Treasury stock, at cost: September 30, 2012 - 5,468,853 shares; December 31, 2011 - 5,870,923 shares; September 30, 2011 -5,874,748 shares |
(138,115) |
(149,182) |
(149,394) |
|||||
| Total shareholders' equity |
1,624,704 |
1,565,953 |
1,570,654 |
|||||
| Total liabilities and shareholders' equity |
$ 14,628,843 |
$ 14,441,702 |
$ 14,688,278 |
|||||
| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
|||||
| Average Consolidated Balance Sheets |
|||||
| Quarterly Periods |
|||||
| (Unaudited) |
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
| (Dollars in thousands) |
2012 |
2012 |
2012 |
2011 |
2011 |
| ASSETS |
|||||
| Cash and due from banks |
$ 440,231 |
$ 410,533 |
$ 378,736 |
$ 621,899 |
$ 517,150 |
| Investment securities: |
|||||
| Held-to-maturity |
337,685 |
127,769 |
90,664 |
89,166 |
85,664 |
| Available-for-sale |
3,215,203 |
3,429,411 |
3,459,439 |
3,231,195 |
3,429,631 |
| Other investments |
140,736 |
140,744 |
140,719 |
160,147 |
160,799 |
| Loans held for sale |
23,631 |
22,731 |
26,483 |
24,215 |
24,524 |
| Noncovered loans: |
|||||
| Commercial |
5,443,712 |
5,274,352 |
5,143,087 |
5,049,479 |
4,876,034 |
| Residential mortgage |
437,123 |
431,752 |
421,648 |
405,329 |
399,228 |
| Installment |
1,293,054 |
1,263,013 |
1,261,122 |
1,267,952 |
1,264,868 |
| Home equity |
779,087 |
750,859 |
738,154 |
744,326 |
741,497 |
| Credit card |
143,948 |
142,311 |
143,794 |
145,560 |
144,796 |
| Leases |
88,583 |
78,862 |
73,644 |
61,267 |
56,909 |
| Total noncovered loans |
8,185,507 |
7,941,149 |
7,781,449 |
7,673,913 |
7,483,332 |
| Covered loans and loss share receivable |
1,216,711 |
1,325,184 |
1,436,430 |
1,569,232 |
1,694,155 |
| Total loans |
9,402,218 |
9,266,333 |
9,217,879 |
9,243,145 |
9,177,487 |
| Less: allowance for loan losses |
145,061 |
143,565 |
142,628 |
141,360 |
138,441 |
| Net loans |
9,257,157 |
9,122,768 |
9,075,251 |
9,101,785 |
9,039,046 |
| Total earning assets |
13,119,473 |
12,986,988 |
12,935,184 |
12,747,868 |
12,878,105 |
| Premises and equipment, net |
184,544 |
187,181 |
190,669 |
193,219 |
192,218 |
| Accrued interest receivable and other assets |
1,134,829 |
1,117,377 |
1,134,976 |
1,201,815 |
1,161,596 |
| TOTAL ASSETS |
$ 14,734,016 |
$ 14,558,514 |
$ 14,496,937 |
$ 14,623,441 |
$ 14,610,628 |
| LIABILITIES |
|||||
| Deposits: |
|||||
| Noninterest-bearing |
$ 3,236,703 |
$ 3,144,183 |
$ 3,036,590 |
$ 3,013,543 |
$ 2,988,521 |
| Interest-bearing |
1,080,841 |
1,060,771 |
1,066,132 |
991,456 |
913,252 |
| Savings and money market accounts |
5,746,210 |
5,732,007 |
5,675,052 |
5,569,213 |
5,446,351 |
| Certificates and other time deposits |
1,528,177 |
1,618,322 |
1,694,247 |
1,842,334 |
2,099,558 |
| Total deposits |
11,591,931 |
11,555,283 |
11,472,021 |
11,416,546 |
11,447,682 |
| Federal funds purchased and securities sold under agreements to repurchase |
1,032,401 |
920,352 |
887,715 |
999,639 |
969,020 |
| Wholesale borrowings |
178,022 |
177,987 |
184,659 |
225,116 |
320,691 |
| Total funds |
12,802,354 |
12,653,622 |
12,544,395 |
12,641,301 |
12,737,393 |
| Accrued taxes, expenses and other liabilities |
315,093 |
305,705 |
371,533 |
410,079 |
302,824 |
| Total liabilities |
13,117,447 |
12,959,327 |
12,915,928 |
13,051,380 |
13,040,217 |
| SHAREHOLDERS' EQUITY |
|||||
| Common stock |
127,937 |
127,937 |
127,937 |
127,937 |
127,937 |
| Capital surplus |
472,820 |
473,650 |
481,856 |
479,257 |
477,864 |
| Accumulated other comprehensive loss |
(14,627) |
(18,363) |
(19,862) |
(15,198) |
(2,211) |
| Retained earnings |
1,168,649 |
1,156,324 |
1,140,953 |
1,129,392 |
1,116,207 |
| Treasury stock |
(138,210) |
(140,361) |
(149,875) |
(149,327) |
(149,386) |
| Total shareholders' equity |
1,616,569 |
1,599,187 |
1,581,009 |
1,572,061 |
1,570,411 |
| TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY |
$ 14,734,016 |
$ 14,558,514 |
$ 14,496,937 |
$ 14,623,441 |
$ 14,610,628 |
| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
|||||||||||||||||
| Average Consolidated Balance Sheets |
|||||||||||||||||
| Fully Tax-equivalent Interest Rates and Interest Differential |
|||||||||||||||||
| Three months ended |
Three months ended |
Three months ended |
|||||||||||||||
| (Unaudited) |
September 30, 2012 |
June 30, 2012 |
September 30, 2011 |
||||||||||||||
| (Dollars in thousands) |
Average |
Average |
Average |
Average |
Average |
Average |
|||||||||||
| Balance |
Interest |
Rate |
Balance |
Interest |
Rate |
Balance |
Interest |
Rate |
|||||||||
| ASSETS |
|||||||||||||||||
| Cash and due from banks |
$ 440,231 |
$ 410,533 |
$ 517,150 |
||||||||||||||
| Investment securities and federal funds sold: |
|||||||||||||||||
| U.S. Treasury securities and U.S. Government agency obligations (taxable) |
2,688,658 |
$ 17,981 |
2.66% |
2,823,055 |
$ 19,028 |
2.71% |
2,974,656 |
$ 19,864 |
2.65% |
||||||||
| Obligations of states and political subdivisions (tax exempt) |
660,143 |
6,332 |
3.82% |
482,475 |
6,254 |
5.21% |
385,055 |
5,275 |
5.44% |
||||||||
| Other securities and federal funds sold |
344,823 |
2,652 |
3.06% |
392,394 |
2,756 |
2.82% |
316,383 |
2,084 |
2.61% |
||||||||
| Total investment securities and federal funds sold |
3,693,624 |
26,965 |
2.90% |
3,697,924 |
28,038 |
3.05% |
3,676,094 |
27,223 |
2.94% |
||||||||
| Loans held for sale |
23,631 |
240 |
4.04% |
22,731 |
238 |
4.21% |
24,524 |
284 |
4.59% |
||||||||
| Loans, including loss share receivable |
9,402,218 |
103,128 |
4.36% |
9,266,333 |
103,245 |
4.48% |
9,177,487 |
108,444 |
4.69% |
||||||||
| Total earning assets |
13,119,473 |
130,333 |
3.95% |
12,986,988 |
131,521 |
4.07% |
12,878,105 |
135,951 |
4.19% |
||||||||
| Allowance for loan losses |
(145,061) |
(143,565) |
(138,441) |
||||||||||||||
| Other assets |
1,319,373 |
1,304,558 |
1,353,814 |
||||||||||||||
| Total assets |
$ 14,734,016 |
$ 14,558,514 |
$ 14,610,628 |
||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||||||||||||
| Deposits: |
|||||||||||||||||
| Noninterest-bearing |
$ 3,236,703 |
— |
—% |
$ 3,144,183 |
— |
—% |
$ 2,988,521 |
— |
—% |
||||||||
| Interest-bearing |
1,080,841 |
243 |
0.09% |
1,060,771 |
236 |
0.09% |
913,252 |
218 |
0.09% |
||||||||
| Savings and money market accounts |
5,746,210 |
5,166 |
0.36% |
5,732,007 |
5,033 |
0.35% |
5,446,351 |
6,929 |
0.50% |
||||||||
| Certificates and other time deposits |
1,528,177 |
2,743 |
0.71% |
1,618,322 |
3,169 |
0.79% |
2,099,558 |
4,370 |
0.83% |
||||||||
| Total deposits |
11,591,931 |
8,152 |
0.28% |
11,555,283 |
8,438 |
0.29% |
11,447,682 |
11,517 |
0.40% |
||||||||
| Securities sold under agreements to repurchase |
1,032,401 |
310 |
0.12% |
920,352 |
276 |
0.12% |
969,020 |
977 |
0.40% |
||||||||
| Wholesale borrowings |
178,022 |
1,130 |
2.53% |
177,987 |
1,118 |
2.53% |
320,691 |
1,669 |
2.06% |
||||||||
| Total interest bearing liabilities |
9,565,651 |
9,592 |
0.40% |
9,509,439 |
9,832 |
0.42% |
9,748,872 |
14,163 |
0.58% |
||||||||
| Other liabilities |
315,093 |
305,705 |
302,824 |
||||||||||||||
| Shareholders' equity |
1,616,569 |
1,599,187 |
1,570,411 |
||||||||||||||
| Total liabilities and shareholders' equity |
$ 14,734,016 |
$ 14,558,514 |
$ 14,610,628 |
||||||||||||||
| Net yield on earning assets |
$ 13,119,473 |
$ 120,741 |
3.66% |
$ 12,986,988 |
$ 121,689 |
3.77% |
$ 12,878,105 |
$ 121,788 |
3.75% |
||||||||
| Interest rate spread |
3.55% |
3.66% |
3.61% |
||||||||||||||
| Note: Interest income on tax-exempt securities and loans has been adjusted to a fully-taxable equivalent basis. |
|||||||||||||||||
| Nonaccrual loans have been included in the average balances. |
|||||||||||||||||
| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
|||||||||||
| Average Consolidated Balance Sheets |
|||||||||||
| Fully Tax-equivalent Interest Rates and Interest Differential |
|||||||||||
| Nine Months Ended |
Nine Months Ended |
||||||||||
| September 30, 2012 |
September 30, 2011 |
||||||||||
| (Unaudited) |
Average |
Average |
Average |
Average |
|||||||
| (Dollars in thousands) |
Balance |
Interest |
Rate |
Balance |
Interest |
Rate |
|||||
| ASSETS |
|||||||||||
| Cash and due from banks |
$ 409,944 |
$ 541,992 |
|||||||||
| Investment securities and federal funds sold: |
|||||||||||
| U.S. Treasury securities and U.S. Government agency obligations (taxable) |
2,797,521 |
$ 56,688 |
2.71% |
2,906,269 |
$ 59,174 |
2.72% |
|||||
| Obligations of states and political subdivisions (tax exempt) |
526,962 |
18,450 |
4.68% |
370,553 |
15,709 |
5.67% |
|||||
| Other securities and federal funds sold |
369,639 |
8,146 |
2.94% |
296,976 |
6,436 |
2.90% |
|||||
| Total investment securities and federal funds sold |
3,694,122 |
83,284 |
3.01% |
3,573,798 |
81,319 |
3.04% |
|||||
| Loans held for sale |
24,279 |
761 |
4.19% |
21,877 |
779 |
4.76% |
|||||
| Loans, including loss share receivable |
9,295,866 |
309,530 |
4.45% |
9,126,596 |
330,965 |
4.85% |
|||||
| Total earning assets |
13,014,267 |
393,575 |
4.04% |
12,722,271 |
413,063 |
4.34% |
|||||
| Allowance for loan losses |
(143,756) |
(138,758) |
|||||||||
| Other assets |
1,316,071 |
1,326,045 |
|||||||||
| Total assets |
$ 14,596,526 |
$ 14,451,550 |
|||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||||||
| Deposits: |
|||||||||||
| Noninterest-bearing |
$ 3,139,515 |
— |
—% |
$ 2,954,172 |
— |
—% |
|||||
| Interest-bearing |
1,069,290 |
726 |
0.09% |
859,903 |
579 |
0.09% |
|||||
| Savings and money market accounts |
5,717,860 |
15,302 |
0.36% |
5,236,540 |
22,172 |
0.57% |
|||||
| Certificates and other time deposits |
1,613,270 |
9,436 |
0.78% |
2,360,522 |
16,803 |
0.95% |
|||||
| Total deposits |
11,539,935 |
25,464 |
0.29% |
11,411,137 |
39,554 |
0.46% |
|||||
| Securities sold under agreements to repurchase |
947,135 |
854 |
0.12% |
900,920 |
2,832 |
0.42% |
|||||
| Wholesale borrowings |
180,215 |
3,399 |
2.52% |
323,678 |
4,963 |
2.05% |
|||||
| Total interest bearing liabilities |
9,527,770 |
29,717 |
0.42% |
9,681,563 |
47,349 |
0.65% |
|||||
| Other liabilities |
330,254 |
275,452 |
|||||||||
| Shareholders' equity |
1,598,987 |
1,540,363 |
|||||||||
| Total liabilities and shareholders' equity |
$ 14,596,526 |
$ 14,451,550 |
|||||||||
| Net yield on earning assets |
$ 13,014,267 |
$ 363,858 |
3.73% |
$ 12,722,271 |
$ 365,714 |
3.84% |
|||||
| Interest rate spread |
3.62% |
3.69% |
|||||||||
| Note: Interest income on tax-exempt securities and loans has been adjusted to a fully-taxable equivalent basis. |
|||||||||||
| Nonaccrual loans have been included in the average balances. |
|||||||||||
| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
||||||||||
| Consolidated Statements of Comprehensive Income |
||||||||||
| Quarters ended |
Nine Months Ended |
|||||||||
| (Unaudited) |
September 30, |
September 30, |
||||||||
| (Dollars and shares in thousands, except per share data) |
2012 |
2011 |
2012 |
2011 |
||||||
| Interest income: |
||||||||||
| Loans and loans held for sale |
$ 103,005 |
$ 108,417 |
$ 309,213 |
$ 330,877 |
||||||
| Investment securities |
||||||||||
| Taxable |
20,633 |
21,949 |
64,834 |
65,610 |
||||||
| Tax-exempt |
3,844 |
3,189 |
11,270 |
9,521 |
||||||
| Total investment securities interest |
24,477 |
25,138 |
76,104 |
75,131 |
||||||
| Total interest income |
127,482 |
133,555 |
385,317 |
406,008 |
||||||
| Interest expense: |
||||||||||
| Deposits: |
||||||||||
| Interest-bearing |
243 |
218 |
726 |
579 |
||||||
| Savings and money market accounts |
5,166 |
6,929 |
15,302 |
22,172 |
||||||
| Certificates and other time deposits |
2,743 |
4,370 |
9,436 |
16,803 |
||||||
| Securities sold under agreements to repurchase |
310 |
977 |
854 |
2,832 |
||||||
| Wholesale borrowings |
1,130 |
1,669 |
3,399 |
4,963 |
||||||
| Total interest expense |
9,592 |
14,163 |
29,717 |
47,349 |
||||||
| Net interest income |
117,890 |
119,392 |
355,600 |
358,659 |
||||||
| Provision for noncovered loan losses |
9,965 |
14,604 |
26,860 |
41,760 |
||||||
| Provision for covered loan losses |
6,214 |
4,768 |
15,576 |
17,580 |
||||||
| Net interest income after provision for loan losses |
101,711 |
100,020 |
313,164 |
299,319 |
||||||
| Other income: |
||||||||||
| Trust department income |
6,124 |
5,607 |
17,481 |
16,983 |
||||||
| Service charges on deposits |
14,603 |
17,838 |
43,490 |
48,460 |
||||||
| Credit card fees |
11,006 |
13,640 |
32,402 |
39,357 |
||||||
| ATM and other service fees |
3,680 |
3,801 |
11,360 |
9,781 |
||||||
| Bank owned life insurance income |
3,094 |
3,182 |
9,073 |
11,439 |
||||||
| Investment services and insurance |
2,208 |
1,965 |
6,843 |
6,384 |
||||||
| Investment securities gains, net |
553 |
4,402 |
1,361 |
5,291 |
||||||
| Loan sales and servicing income |
7,255 |
3,426 |
19,085 |
9,102 |
||||||
| Other operating income |
6,402 |
6,911 |
20,857 |
18,222 |
||||||
| Total other income |
54,925 |
60,772 |
161,952 |
165,019 |
||||||
| Other expenses: |
||||||||||
| Salaries, wages, pension and employee benefits |
58,061 |
61,232 |
183,632 |
177,815 |
||||||
| Net occupancy expense |
8,077 |
8,464 |
24,640 |
25,144 |
||||||
| Equipment expense |
7,143 |
7,073 |
21,845 |
20,725 |
||||||
| Stationery, supplies and postage |
2,210 |
2,517 |
6,638 |
7,972 |
||||||
| Bankcard, loan processing and other costs |
8,424 |
8,449 |
24,935 |
24,278 |
||||||
| Professional services |
4,702 |
5,732 |
17,361 |
17,466 |
||||||
| Amortization of intangibles |
456 |
543 |
1,422 |
1,629 |
||||||
| FDIC insurance expense |
1,832 |
3,240 |
9,015 |
12,187 |
||||||
| Other operating expense |
17,682 |
18,707 |
51,944 |
53,254 |
||||||
| Total other expenses |
108,587 |
115,957 |
341,432 |
340,470 |
||||||
| Income before income tax expense |
48,049 |
44,835 |
133,684 |
123,868 |
||||||
| Income tax expense |
13,096 |
13,098 |
37,802 |
34,808 |
||||||
| Net income |
34,953 |
31,737 |
95,882 |
89,060 |
||||||
| Other comprehensive income, net of taxes |
||||||||||
| Changes in unrealized securities' holding gains and losses |
$ 4,884 |
$ 7,353 |
$ 10,872 |
$ 24,889 |
||||||
| Reclassification for realized securities' gains |
(359) |
(2,862) |
(885) |
(3,440) |
||||||
| Total other comprehensive gain, net of taxes |
4,525 |
4,491 |
9,987 |
21,449 |
||||||
| Comprehensive income |
$ 39,478 |
$ 36,228 |
$ 105,869 |
$ 110,509 |
||||||
| Net income applicable to common shares |
$ 34,953 |
$ 31,737 |
$ 95,882 |
$ 89,060 |
||||||
| Net income used in diluted EPS calculation |
$ 34,953 |
$ 31,737 |
$ 95,882 |
$ 89,060 |
||||||
| Weighted average number of common shares outstanding - basic |
109,645 |
109,245 |
109,473 |
109,052 |
||||||
| Weighted average number of common shares outstanding - diluted |
109,645 |
109,246 |
109,473 |
109,053 |
||||||
| Basic earnings per common share |
$0.32 |
$0.29 |
$0.88 |
$0.82 |
||||||
| Diluted earnings per common share |
$0.32 |
$0.29 |
$0.88 |
$0.82 |
||||||
| Dividend per common share |
$0.16 |
$0.16 |
$0.48 |
$0.48 |
||||||
| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
||||||
| Consolidated Statements of Comprehensive Income---Linked Quarters |
||||||
| Quarterly Results |
||||||
| (Unaudited) |
2012 |
2012 |
2012 |
2011 |
2011 |
|
| (Dollars in thousands, except per share data) |
3rd Qtr |
2nd Qtr |
1st Qtr |
4th Qtr |
3rd Qtr |
|
| Loans and loans held for sale |
$ 103,005 |
$ 103,126 |
$ 103,082 |
$ 107,516 |
$ 108,417 |
|
| Investment securities |
24,477 |
25,629 |
25,998 |
24,732 |
25,138 |
|
| Total interest income |
127,482 |
128,755 |
129,080 |
132,248 |
133,555 |
|
| Interest on deposits: |
||||||
| Interest-bearing |
243 |
236 |
247 |
237 |
218 |
|
| Savings and money market accounts |
5,166 |
5,033 |
5,103 |
5,998 |
6,929 |
|
| Certificates and other time deposits |
2,743 |
3,169 |
3,524 |
3,201 |
4,370 |
|
| Securities sold under agreements to repurchase |
310 |
276 |
268 |
512 |
977 |
|
| Wholesale borrowings |
1,130 |
1,118 |
1,151 |
1,334 |
1,669 |
|
| Total interest expense |
9,592 |
9,832 |
10,293 |
11,282 |
14,163 |
|
| Net interest income |
117,890 |
118,923 |
118,787 |
120,966 |
119,392 |
|
| Provision for noncovered loan losses |
9,965 |
8,766 |
8,129 |
12,275 |
14,604 |
|
| Provision for covered loan losses |
6,214 |
3,430 |
5,932 |
2,773 |
4,768 |
|
| Net interest income after provision for loan losses |
101,711 |
106,727 |
104,726 |
105,918 |
100,020 |
|
| Other income: |
||||||
| Trust department income |
6,124 |
5,730 |
5,627 |
5,413 |
5,607 |
|
| Service charges on deposits |
14,603 |
14,478 |
14,409 |
15,622 |
17,838 |
|
| Credit card fees |
11,006 |
11,216 |
10,180 |
10,182 |
13,640 |
|
| ATM and other service fees |
3,680 |
3,890 |
3,790 |
3,920 |
3,801 |
|
| Bank owned life insurance income |
3,094 |
2,923 |
3,056 |
3,381 |
3,182 |
|
| Investment services and insurance |
2,208 |
2,388 |
2,247 |
1,844 |
1,965 |
|
| Investment securities gains, net |
553 |
548 |
260 |
5,790 |
4,402 |
|
| Loan sales and servicing income |
7,255 |
5,139 |
6,691 |
5,102 |
3,426 |
|
| Other operating income |
6,402 |
8,989 |
5,466 |
8,483 |
6,911 |
|
| Total other income |
54,925 |
55,301 |
51,726 |
59,737 |
60,772 |
|
| Other expenses: |
||||||
| Salaries, wages, pension and employee benefits |
58,061 |
61,598 |
63,973 |
62,546 |
61,232 |
|
| Net occupancy expense |
8,077 |
7,971 |
8,592 |
7,270 |
8,464 |
|
| Equipment expense |
7,143 |
7,598 |
7,104 |
7,234 |
7,073 |
|
| Stationery, supplies and postage |
2,210 |
2,285 |
2,143 |
2,719 |
2,517 |
|
| Bankcard, loan processing and other costs |
8,424 |
8,858 |
7,653 |
7,948 |
8,449 |
|
| Professional services |
4,702 |
9,307 |
3,352 |
5,763 |
5,732 |
|
| Amortization of intangibles |
456 |
483 |
483 |
543 |
543 |
|
| FDIC expense |
1,832 |
3,463 |
3,720 |
5,119 |
3,240 |
|
| Other operating expense |
17,682 |
17,514 |
16,748 |
24,732 |
18,707 |
|
| Total other expenses |
108,587 |
119,077 |
113,768 |
123,874 |
115,957 |
|
| Income before income tax expense |
48,049 |
42,951 |
42,684 |
41,781 |
44,835 |
|
| Income taxes |
13,096 |
12,366 |
12,340 |
11,285 |
13,098 |
|
| Net income |
34,953 |
30,585 |
30,344 |
30,496 |
31,737 |
|
| Other comprehensive income (loss), net of taxes |
4,525 |
3,747 |
1,715 |
(19,233) |
4,491 |
|
| Comprehensive income |
$ 39,478 |
$ 34,332 |
$ 32,059 |
$ 11,263 |
$ 36,228 |
|
| Net income applicable to common shares |
$ 34,953 |
$ 30,585 |
$ 30,344 |
$ 30,496 |
$ 31,737 |
|
| Net income used in diluted EPS calculation |
$ 34,953 |
$ 30,585 |
$ 30,344 |
$ 30,496 |
$ 31,737 |
|
| Weighted-average common shares - basic |
109,645 |
109,562 |
109,211 |
109,249 |
109,245 |
|
| Weighted-average common shares - diluted |
109,645 |
109,562 |
109,211 |
109,249 |
109,246 |
|
| Basic earnings per common share |
$0.32 |
$0.28 |
$0.28 |
$0.28 |
$0.29 |
|
| Diluted earnings per common share |
$0.32 |
$0.28 |
$0.28 |
$0.28 |
$0.29 |
|
| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
||||||||
| Asset Quality Information (Excluding Acquired Assets) |
||||||||
| (Unaudited, except December 31, 2011 annual period which is derived from the audited financial statements) |
||||||||
| (Dollars in thousands, except ratios) |
||||||||
| Quarterly Periods |
Annual Period |
|||||||
| September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
December 31, |
|||
| Allowance for Credit Losses |
2012 |
2012 |
2012 |
2011 |
2011 |
2011 |
||
| Allowance for noncovered loan losses, beginning of period |
$ 103,849 |
$ 103,849 |
$ 107,699 |
$ 109,187 |
$ 109,187 |
$ 114,690 |
||
| Provision for noncovered loan losses |
9,965 |
8,766 |
8,129 |
12,275 |
14,604 |
54,035 |
||
| Charge-offs |
20,999 |
15,014 |
17,417 |
18,984 |
20,014 |
82,768 |
||
| Recoveries |
6,127 |
6,248 |
5,438 |
5,221 |
5,410 |
21,742 |
||
| Net charge-offs |
14,872 |
8,766 |
11,979 |
13,763 |
14,604 |
61,026 |
||
| Allowance for noncovered loan losses, end of period |
$ 98,942 |
$ 103,849 |
$ 103,849 |
$ 107,699 |
$ 109,187 |
$ 107,699 |
||
| Reserve for unfunded lending commitments, beginning of period |
$ 5,666 |
$ 5,410 |
$ 6,373 |
$ 6,360 |
$ 5,799 |
$ 8,849 |
||
| Provision for/(relief of) credit losses |
94 |
256 |
(963) |
13 |
561 |
(2,476) |
||
| Reserve for unfunded lending commitments, end of period |
5,760 |
5,666 |
5,410 |
6,373 |
6,360 |
6,373 |
||
| Allowance for Credit Losses |
$ 104,702 |
$ 109,515 |
$ 109,259 |
$ 114,072 |
$ 115,547 |
$ 114,072 |
||
| Ratios (a) |
||||||||
| Provision for noncovered loan losses as a % of average loans |
0.48% |
0.44% |
0.42% |
0.63% |
0.77% |
0.73% |
||
| Net charge-offs as a % of average loans |
0.72% |
0.44% |
0.62% |
0.71% |
0.77% |
0.82% |
||
| Allowance for noncovered loan losses as % of period-end loans |
1.19% |
1.28% |
1.32% |
1.39% |
1.43% |
1.39% |
||
| Allowance for credit losses as a % of period-end loans |
1.26% |
1.35% |
1.39% |
1.47% |
1.51% |
1.47% |
||
| Allowance for noncovered loans losses as a % of nonperforming loans |
196.66% |
222.44% |
194.97% |
166.64% |
160.80% |
166.64% |
||
| Allowance for credit losses as a % of nonperforming loans |
208.11% |
234.57% |
205.13% |
176.50% |
170.16% |
176.50% |
||
| Asset Quality (a) |
||||||||
| Impaired loans: |
||||||||
| Nonaccrual |
$ 31,492 |
$ 38,381 |
$ 44,546 |
$ 55,815 |
$ 59,932 |
$ 55,815 |
||
| Other nonperforming loans: |
||||||||
| Nonaccrual (b) |
18,819 |
8,306 |
8,717 |
8,816 |
7,971 |
8,816 |
||
| Total nonperforming loans |
50,311 |
46,687 |
53,263 |
64,631 |
67,903 |
64,631 |
||
| Other real estate ("ORE") |
13,744 |
14,393 |
14,670 |
16,463 |
22,172 |
16,463 |
||
| Total nonperforming assets ("NPAs") |
$ 64,055 |
$ 61,080 |
$ 67,933 |
$ 81,094 |
$ 90,075 |
$ 81,094 |
||
| NPAs as % of period-end loans + ORE |
0.77% |
0.75% |
0.86% |
1.04% |
1.18% |
1.04% |
||
| Noncovered loans past due 90 days or more & accruing interest |
$ 9,691 |
$ 6,545 |
$ 9,261 |
$ 11,376 |
$ 4,403 |
$ 11,376 |
||
| (a) Excludes covered loans and related loss share receivable with a period end balance of $1.2 billion, $1.3 billion, $1.4 billion, $1.5 billion and $1.6 billion and covered ORE and related loss share receivable with a period end balance of $56.8 million, $54.5 million, $56.4 million, $54.5 million and $61.9 million at September 30, 2012, June 30, 2012, March 31, 2012, December 31, 2011 and September 30, 2011, respectively. |
||||||||
| (b) Includes $10.6 million at September 30, 2012 resulting from implementation of a third quarter 2012 OCC update to the Bank Accounting Advisory Series. The updated guidance requires those performing loans where the borrower's obligation to the Corporation has been restructured in bankruptcy to be placed on nonaccrual status. |
||||||||
| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
|||||||||
| Noninterest Income and Noninterest Expense Detail |
|||||||||
| (Unaudited) |
|||||||||
| (Dollars in thousands) |
|||||||||
| QUARTERLY OTHER INCOME DETAIL |
2012 |
2012 |
2012 |
2011 |
2011 |
||||
| Trust department income |
$ 6,124 |
$ 5,730 |
$ 5,627 |
$ 5,413 |
$ 5,607 |
||||
| Service charges on deposits |
14,603 |
14,478 |
14,409 |
15,622 |
17,838 |
||||
| Credit card fees |
11,006 |
11,216 |
10,180 |
10,182 |
13,640 |
||||
| ATM and other service fees |
3,680 |
3,890 |
3,790 |
3,920 |
3,801 |
||||
| Bank owned life insurance income |
3,094 |
2,923 |
3,056 |
3,381 |
3,182 |
||||
| Investment services and insurance |
2,208 |
2,388 |
2,247 |
1,844 |
1,965 |
||||
| Investment securities gains, net |
553 |
548 |
260 |
5,790 |
4,402 |
||||
| Loan sales and servicing income |
7,255 |
5,139 |
6,691 |
5,102 |
3,426 |
||||
| Other operating income |
6,402 |
8,989 |
5,466 |
8,483 |
6,911 |
||||
| Total Other Income |
$ 54,925 |
$ 55,301 |
$ 51,726 |
$ 59,737 |
$ 60,772 |
||||
|
QUARTERLY OTHER EXPENSES DETAIL |
2012 |
2012 |
2012 |
2011 |
2011 |
||||
| Salaries, wages, pension and employee benefits |
$ 58,061 |
$ 61,598 |
$ 63,973 |
$ 62,546 |
$ 61,232 |
||||
| Net occupancy expense |
8,077 |
7,971 |
8,592 |
7,270 |
8,464 |
||||
| Equipment expense |
7,143 |
7,598 |
7,104 |
7,234 |
7,073 |
||||
| Taxes, other than income taxes |
2,051 |
2,020 |
1,955 |
1,389 |
1,507 |
||||
| Stationery, supplies and postage |
2,210 |
2,285 |
2,143 |
2,719 |
2,517 |
||||
| Bankcard, loan processing and other costs |
8,424 |
8,858 |
7,653 |
7,948 |
8,449 |
||||
| Advertising |
2,472 |
2,280 |
1,684 |
2,275 |
2,391 |
||||
| Professional services |
4,702 |
9,307 |
3,352 |
5,763 |
5,732 |
||||
| Telephone |
1,316 |
1,379 |
1,398 |
1,525 |
1,570 |
||||
| Amortization of intangibles |
456 |
483 |
483 |
543 |
543 |
||||
| FDIC insurance expense |
1,832 |
3,463 |
3,720 |
5,119 |
3,240 |
||||
| Other operating expense |
11,843 |
11,835 |
11,711 |
19,543 |
13,239 |
||||
| Total Other Expenses |
$ 108,587 |
$ 119,077 |
$ 113,768 |
$ 123,874 |
$ 115,957 |
||||
| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
|||||||||
| Allowance for Novered Loan Losses - Net Charge-off Detail |
|||||||||
| Quarters ended |
Nine Months Ended |
Year Ended |
|||||||
| (Unaudited) |
September 30, |
September 30, |
December 31, |
||||||
| (Dollars in thousands) |
2012 |
2011 |
2012 |
2011 |
2011 |
||||
| Allowance for noncovered loan losses - beginning of period |
$ 103,849 |
$ 109,187 |
$ 107,699 |
$ 114,690 |
$ 114,690 |
||||
| Loans charged off: |
|||||||||
| Commercial |
9,627 |
8,382 |
23,567 |
24,525 |
31,943 |
||||
| Residential mortgage |
1,691 |
771 |
3,431 |
3,786 |
4,819 |
||||
| Installment |
5,507 |
5,911 |
14,441 |
20,204 |
25,839 |
||||
| Home equity |
2,319 |
1,929 |
6,108 |
6,200 |
8,691 |
||||
| Credit cards |
1,390 |
1,520 |
4,618 |
6,135 |
7,846 |
||||
| Leases |
— |
651 |
— |
778 |
778 |
||||
| Overdrafts |
465 |
850 |
1,265 |
2,156 |
2,852 |
||||
| Total |
20,999 |
20,014 |
53,430 |
63,784 |
82,768 |
||||
| Recoveries: |
|||||||||
| Commercial |
1,649 |
717 |
4,309 |
1,853 |
2,703 |
||||
| Residential mortgage |
100 |
74 |
191 |
192 |
221 |
||||
| Installment |
2,870 |
3,361 |
9,054 |
10,749 |
13,639 |
||||
| Home equity |
856 |
466 |
2,094 |
1,255 |
1,985 |
||||
| Credit cards |
488 |
585 |
1,583 |
1,789 |
2,264 |
||||
| Manufactured housing |
13 |
14 |
50 |
63 |
119 |
||||
| Leases |
— |
1 |
38 |
35 |
37 |
||||
| Overdrafts |
151 |
192 |
494 |
585 |
774 |
||||
| Total |
6,127 |
5,410 |
17,813 |
16,521 |
21,742 |
||||
| Net charge-offs |
14,872 |
14,604 |
35,617 |
47,263 |
61,026 |
||||
| Provision for noncovered loan losses |
9,965 |
14,604 |
26,860 |
41,760 |
54,035 |
||||
| Allowance for noncovered loan losses - end of period |
$ 98,942 |
$ 109,187 |
$ 98,942 |
$ 109,187 |
$ 107,699 |
||||
| Average noncovered loans (a) |
$ 8,185,507 |
$ 7,483,332 |
$ 7,970,157 |
$ 7,320,380 |
$ 7,409,502 |
||||
| Ratio to average noncovered loans (a): |
|||||||||
| (Annualized) noncovered net charge-offs |
0.72% |
0.77% |
0.60% |
0.86% |
0.82% |
||||
| Provision for noncovered loan losses |
0.48% |
0.77% |
0.45% |
0.76% |
0.73% |
||||
| Noncovered Loans, period-end (a) |
$ 8,260,426 |
$ 7,631,572 |
$ 8,260,426 |
$ 7,631,572 |
$ 7,748,944 |
||||
| Allowance for credit losses (a): |
$ 104,702 |
$ 115,547 |
$ 104,702 |
$ 115,547 |
$ 114,072 |
||||
| As a multiple of (annualized) net charge-offs |
1.77 |
1.99 |
2.20 |
1.83 |
1.87 |
||||
| Allowance for noncovered loan losses (a): |
|||||||||
| As a percent of period-end noncovered loans |
1.19% |
1.43% |
1.19% |
1.43% |
1.39% |
||||
| As a multiple of (annualized) net noncovered charge-offs |
1.67 |
1.88 |
2.08 |
1.73 |
1.76 |
||||
| (a) Excludes acquired loans and loss share receivable. |
|||||||||
FirstMerit Corporation
Analysts: Thomas O'Malley/Investor Relations Officer
Phone: 330.384.7109
Media Contact: Robert Townsend/Media Relations Officer
Phone: 330.384.7075
SOURCE FirstMerit Corporation
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