FirstMerit Corporation Reports Third Quarter 2010 EPS of $0.27 Per Share
AKRON, Ohio, Oct. 26 /PRNewswire-FirstCall/ --
Quarterly Highlights include:
- 46th consecutive quarter of profitability
- Solid credit quality with net charge-offs related to nonacquired loans at 1.17%
- Maintenance of strong balance sheet with allowance for loan losses on noncovered loans at 1.72% of period –end loans, excluding acquired loans
- Increased tangible common equity ratio to 7.53% at September 30, 2010
FirstMerit Corporation (Nasdaq: FMER) reported third quarter 2010 net income of $29.0 million, or $0.27 per diluted share. This compares with $31.5 million, or $0.32 per diluted share, for the second quarter of 2010 and $22.8 million, or $0.27 per diluted share, for the third quarter 2009.
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Returns on average common equity ("ROE") and average assets ("ROA") for the third quarter 2010 were 7.60% and 0.79%, respectively, compared with 9.61% and 0.94% for the second quarter of 2010 and 8.69% and 0.85% for the third quarter 2009.
"Our profitable third quarter results are reflective of FirstMerit's strength and stability in this challenging economy," said Paul G. Greig, chairman, president and CEO of FirstMerit Corporation. "This past quarter we grew operating revenue, increased our healthy tangible common equity levels, maintained a solid loan loss reserve and reduced credit costs. These highlights are indicative of the strong position we are in today. Our efforts this past quarter led to a successful conversion on our third bank acquisition in Chicago, a market in which we are developing loan portfolio growth opportunities."
Net interest margin was 3.95% for the third quarter of 2010 compared with 4.04% for the second quarter of 2010 and 3.61% for the third quarter of 2009. Compared with the second quarter of 2010, the compression in net interest margin was attributed to amortization and paydowns in the covered and noncovered loan portfolios. As loan growth remains muted in the Company's core Ohio and Chicago markets, incoming cash flows from the loan and investment securities portfolios were reinvested into lower-yielding, short duration securities. The expansion in the Corporation's net interest margin, compared with the third quarter of 2009, is attributable to enhanced earning asset yields from Midwest Bank and Trust's balance sheet and the successful results of the Corporation's continued emphasis on core deposit gathering and shifting deposit mix away from higher-priced certificate of deposit products.
Average loans, not including acquired loans, during the third quarter of 2010 decreased $29.5 million, or 0.43%, compared with the second quarter of 2010 and decreased $275.9 million, or 3.91%, compared with the third quarter of 2009. The modest changes in average loan balances compared with the second quarter of 2010 and the third quarter of 2009 reflect the Corporation's business and retail customers' focus on debt reduction. While the Corporation is adding new commercial loans in both its core Ohio and newer Chicago markets, low credit line utilization by existing customers is mitigating new loan production with respect to overall portfolio balances. At September 30, 2010, average covered loan balances including the indemnification asset were $2.2 billion.
Average deposits during the third quarter of 2010 increased $880.3 million, or 8.35%, compared with the second quarter of 2010 and increased $4.0 billion, or 54.73%, compared with the third quarter of 2009. During the third quarter of 2010, the Corporation increased its average core deposits, which excludes time deposits, by $672.3 million, or 9.06%, compared with the second quarter of 2010, and $2.6 billion, or 46.80%, compared with the third quarter of 2009.
Average investments during the third quarter of 2010 decreased $28.3 million, or 0.86%, compared with the second quarter of 2010 and increased $542.6 million, or 19.89%, over the third quarter of 2009. The increase in third quarter of 2010 average investments, compared with the third quarter of 2009, is due to the purchase of $575.0 million of securities in the first quarter of 2010 as a result of the First Bank acquisition.
Net interest income on a fully tax-equivalent ("FTE") basis was $125.5 million in the third quarter 2010 compared with $118.8 million in the second quarter of 2010 and $89.1 million in the third quarter of 2009. Compared with the second quarter of 2010, average earning assets increased $815.5 million, or 6.92%, and increased $2.8 billion, or 28.54%, compared to the third quarter of 2009.
Noninterest income net of securities transactions for the third quarter of 2010 was $55.1 million, an increase of $2.5 million, or 4.79%, from the second quarter of 2010 and an increase of $6.4 million, or 13.23%, from the third quarter of 2009.
The increase in other income for the third quarter of 2010 compared to the second quarter of 2010 was driven by mortgage revenue, including loan sales and servicing and the fair value of the mortgage pipeline which is recorded in other operating income. The primary change in other income for the 2010 third quarter as compared to the third quarter of 2009 was attributed to $3.9 million in income related to mortgage origination activities.
Other income, net of securities gains, as a percentage of net revenue for the third quarter of 2010 was 30.50% compared with 30.67% for second quarter of 2010 and 35.32% for the third quarter of 2009. Net revenue is defined as net interest income, on a FTE basis, plus other income, less gains from securities sales.
Noninterest expense for the third quarter of 2010 was $120.7 million, an increase of $14.9 million, or 14.14%, from the second quarter of 2010 and an increase of $36.5 million, or 43.37%, from the third quarter of 2009. For the three months ended September 30, 2010, increases in operating expenses compared to the third quarter of 2009 were primarily attributable to increased salary and benefits, and professional services. One time expenses associated with data processing conversions and related expenses for acquisitions totaled $4.5 million.
During the third quarter of 2010, the Corporation reported an efficiency ratio of 66.26%, compared with 61.30% for the second quarter of 2010 and 61.05% for the third quarter of 2009.
Net charge-offs, excluding acquired loans, totaled $19.9 million, or 1.17% of average loans, excluding acquired loans, in the third quarter of 2010 compared with $19.8 million, or 1.15% of average loans, in the second quarter of 2010 and $18.8 million, or 1.05% of average loans, in the third quarter of 2009.
Nonperforming assets totaled $115.3 million at September 30, 2010, an increase of $5.5 million compared with June 30, 2010 and an increase of $26.4 million compared with September 30, 2009. Nonperforming assets at September 30, 2010 represented 1.70% of period-end loans plus other real estate, excluding acquired loans, compared with 1.62% at June 30, 2010 and 1.26% at September 30, 2009.
The allowance for loan losses noncovered, totaled $116.5 million at September 30, 2010, a decrease of $1.8 million from June 30, 2010. At September 30, 2010, the allowance for loan losses noncovered was 1.72% of period-end loans compared with 1.75% at June 30, 2010, and 1.72% at March 31, 2010. The allowance for credit losses is the sum of the allowance for loan losses noncovered, and the reserve for unfunded lending commitments. For comparative purposes the allowance for credit losses was 1.84% of period-end loans, excluding acquired loans, at September 30, 2010, compared with 1.85% at June 30, 2010 and 1.82% at March 31, 2010. The allowance for credit losses to nonperforming loans was 118.49% at September 30, 2010, compared with 126.51% at June 30, 2010 and 110.80% at March 31, 2010.
The Corporation's total assets at September 30, 2010 were $14.4 billion, a decrease of $167.0 million inclusive of intangible assets, or 1.15%, compared with June 30, 2010 and an increase of $3.6 billion, or 33.40%, compared with September 30, 2009. Total loans, excluding acquired loans, did not significantly change compared with June 30, 2010 and September 30, 2009. The primary increase in total assets compared with September 30, 2009, is attributed to the three 2010 acquisitions that increased total loans, including a loss share receivable of $318.4 million, by $2.2 billion as of September 30, 2010.
Total deposits were $11.3 billion at September 30, 2010, a decrease of $243.8 million, or 2.12%, from June 30, 2010 and an increase of $4.0 billion, or 55.01%, from September 30, 2009. The increase in total deposits over September 30, 2009 was driven by the Corporation's expansion strategy in Chicago. Core deposits totaled $8.1 billion at September 30, 2010, an increase of $0.4 million, or 4.80%, from June 30, 2010 and an increase of $2.5 billion, or 44.53%, from September 30, 2009. The increase in core deposits over the prior quarter is due to the Corporation's strategy to retain recently acquired depository customers and move them from certificate of deposit accounts into core deposit products. Deposit retention rates for the three acquired Chicago institutions at September 30, 2010, are as follows:
First Bank, 94.9%; George Washington, 96.6%; and Midwest Bank & Trust (excluding brokered certificate of deposits, CDARS & internet certificate of deposits), 94.6%.
Shareholders' equity was $1.5 billion at September 30, 2010, compared with $1.5 billion at June 30, 2010 and $1.1 billion at September 30, 2009. The Corporation maintained a strong capital position as tangible common equity to assets was 7.53% at September 30, 2010, compared with 7.37% and 8.65% at June 30, 2010 and September 30, 2009, respectively. The common dividend per share paid in the third quarter 2010 was $0.16.
Mr. Greig said, "FirstMerit's strong capital position and profitable performance every quarter for more than 11 years allows us to execute on growth opportunities, both geographic and organic. Backed by our robust balance sheet, we continue to work on generating value for our shareholders."
Acquisitions and Integration
The First Bank, George Washington and Midwest acquisitions were considered business combinations 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 September 30, 2010, we obtained additional information that resulted in changes to certain acquisition-data fair value estimates relating to both the George Washington and Midwest acquisitions. These purchase accounting adjustments have resulted in a reduction of $4.0 million, or approximately $2.6 million net of effect of taxes, to the bargain purchase gain which was recognized for the George Washington acquisition in the quarter ended March 31, 2010, and a reduction of approximately $5.3 million to the goodwill recorded for the Midwest acquisition in the quarter ended June 30, 2010. Prior period amounts appropriately reflect these adjustments.
On October 9, 2010, FirstMerit successfully completed the operational and technical migration of Midwest Bank & Trust which the corporation acquired from the FDIC on May 14, 2010.
Third Quarter 2010 Conference Call
FirstMerit Corporation senior management will host an earnings conference call today at 2:00 p.m. (Eastern Time) to provide an overview of third quarter 2010 results and highlights. To participate in the conference call, please dial (888) 693-3477 ten minutes before start time and provide the reservation number: 86358126. A replay of the conference call will be available at approximately 5:00 p.m. (Eastern Time) on October 26, 2010 through November 10, 2010 by dialing (800) 642-1687, and entering the PIN: 86358126.
About FirstMerit Corporation
FirstMerit Corporation is a diversified financial services company headquartered in Akron, Ohio, with assets of $14.4 billion as of September 30, 2010 and 207 banking offices and 213 ATMs in Ohio, Western Pennsylvania and the Chicago area. FirstMerit Corporation provides a complete range of banking and other financial services to consumers and businesses through its core operations. Principal wholly-owned subsidiaries 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 the September 30, 2010 consolidated financial statements 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, 2010 and will adjust amounts preliminarily reported, if necessary.
Forward-Looking Statement
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 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.
FIRSTMERIT CORPORATION AND SUBSIDIARIES Consolidated Financial Highlights |
||||||||||||||||
(Unaudited) |
Quarters |
|||||||||||||||
(Dollars in thousands) |
||||||||||||||||
2010 |
2010 |
2010 |
2009 |
2009 |
||||||||||||
EARNINGS |
3rd Qtr |
2nd Qtr |
1st Qtr |
4th Qtr |
3rd Qtr |
|||||||||||
Net interest income FTE (a) |
$ |
125,514 |
$ |
118,817 |
$ |
92,348 |
$ |
89,171 |
$ |
89,079 |
||||||
Provision for loan losses uncovered |
18,108 |
20,366 |
25,493 |
29,960 |
23,887 |
|||||||||||
Other income |
55,135 |
53,209 |
49,900 |
52,701 |
51,567 |
|||||||||||
Other expenses |
120,670 |
105,723 |
94,013 |
94,885 |
84,165 |
|||||||||||
FTE adjustment (a) |
2,021 |
2,050 |
1,954 |
1,793 |
1,702 |
|||||||||||
Net income |
28,996 |
31,493 |
15,390 |
14,478 |
22,763 |
|||||||||||
Diluted EPS (b) |
0.27 |
0.32 |
0.18 |
0.17 |
0.27 |
|||||||||||
PERFORMANCE RATIOS |
||||||||||||||||
Return on average assets (ROA) |
0.79% |
0.94% |
0.55% |
0.54% |
0.85% |
|||||||||||
Return on average common equity (ROE) |
7.60% |
9.61% |
5.71% |
5.38% |
8.69% |
|||||||||||
Net interest margin FTE (a) |
3.95% |
4.04% |
3.72% |
3.64% |
3.61% |
|||||||||||
Efficiency ratio |
66.26% |
61.30% |
65.93% |
67.74% |
61.05% |
|||||||||||
Number of full-time equivalent employees |
3,093 |
3,095 |
2,723 |
2,495 |
2,522 |
|||||||||||
MARKET DATA |
||||||||||||||||
Book value/common share |
$ |
13.95 |
$ |
13.87 |
$ |
12.69 |
$ |
12.25 |
$ |
12.34 |
||||||
Period-end common share mkt value |
18.32 |
17.13 |
21.57 |
20.14 |
19.03 |
|||||||||||
Market as a % of book |
131% |
124% |
170% |
164% |
154% |
|||||||||||
Cash dividends/common share |
$ |
0.16 |
$ |
0.16 |
$ |
0.16 |
$ |
0.16 |
$ |
0.16 |
||||||
Common stock dividend payout ratio |
60.03% |
50.00% |
88.89% |
94.12% |
59.26% |
|||||||||||
Average basic common shares (b) |
108,793 |
98,968 |
87,771 |
86,149 |
85,872 |
|||||||||||
Average diluted common shares (b) |
108,794 |
98,969 |
87,777 |
86,157 |
85,880 |
|||||||||||
Period end common shares |
108,803 |
108,786 |
90,810 |
87,004 |
85,869 |
|||||||||||
Common shares repurchased |
4 |
46 |
115 |
35 |
13 |
|||||||||||
Common stock market capitalization |
$ |
1,993,276 |
$ |
1,863,504 |
$ |
1,958,772 |
$ |
1,752,261 |
$ |
1,634,087 |
||||||
ASSET QUALITY (excluding acquired loans) |
||||||||||||||||
Gross charge-offs |
$ |
25,817 |
$ |
24,967 |
$ |
26,195 |
$ |
34,232 |
$ |
21,819 |
||||||
Net charge-offs |
19,923 |
19,829 |
22,779 |
31,220 |
18,757 |
|||||||||||
Allowance for loan losses |
116,528 |
118,343 |
117,806 |
115,092 |
116,352 |
|||||||||||
Reserve for unfunded lending commitments |
7,864 |
6,812 |
6,337 |
5,751 |
4,470 |
|||||||||||
Nonperforming assets (NPAs) (c) |
115,267 |
109,781 |
123,320 |
101,001 |
88,881 |
|||||||||||
Net charge-offs/average loans ratio (c) |
1.17% |
1.15% |
1.36% |
1.79% |
1.05% |
|||||||||||
Allowance for loan losses/period-end loans (c) |
1.72% |
1.75% |
1.72% |
1.68% |
1.66% |
|||||||||||
Allowance for credit losses/period-end loans (c) |
1.84% |
1.85% |
1.82% |
1.77% |
1.72% |
|||||||||||
NPAs/loans and other real estate (c) |
1.70% |
1.62% |
1.80% |
1.48% |
1.26% |
|||||||||||
Allowance for loan losses/nonperforming loans |
111.00% |
119.62% |
105.14% |
125.55% |
147.60% |
|||||||||||
Allowance for credit losses/nonperforming loans |
118.49% |
126.51% |
110.80% |
131.82% |
153.27% |
|||||||||||
CAPITAL & LIQUIDITY |
||||||||||||||||
Period-end tangible common equity to assets |
7.53% |
7.37% |
7.91% |
8.89% |
8.65% |
|||||||||||
Average equity to assets |
10.37% |
9.76% |
9.63% |
10.11% |
9.77% |
|||||||||||
Average equity to total loans (d) |
16.84% |
15.91% |
15.39% |
15.37% |
14.72% |
|||||||||||
Average total loans to deposits (d) |
78.65% |
78.32% |
85.18% |
93.94% |
95.57% |
|||||||||||
AVERAGE BALANCES |
||||||||||||||||
Assets |
$ |
14,588,531 |
$ |
13,472,179 |
$ |
11,357,110 |
$ |
10,559,231 |
$ |
10,629,359 |
||||||
Deposits |
11,425,740 |
10,545,482 |
8,340,796 |
7,397,592 |
7,384,507 |
|||||||||||
Loans, excluding acquired loans (d) |
6,781,123 |
6,810,582 |
6,812,647 |
6,932,566 |
7,057,021 |
|||||||||||
Acquired loans, including covered loans (d) |
2,204,843 |
1,449,140 |
291,651 |
16,419 |
- |
|||||||||||
Earning assets |
12,600,422 |
11,784,967 |
10,076,565 |
9,714,193 |
9,802,810 |
|||||||||||
Shareholders' equity |
1,513,527 |
1,314,249 |
1,093,568 |
1,068,013 |
1,038,824 |
|||||||||||
ENDING BALANCES |
||||||||||||||||
Assets |
$ |
14,355,786 |
$ |
14,522,825 |
$ |
12,324,589 |
$ |
10,539,902 |
$ |
10,761,355 |
||||||
Deposits |
11,271,416 |
11,515,171 |
9,370,009 |
7,515,796 |
7,271,274 |
|||||||||||
Loans, excluding acquired loans (d) |
6,776,098 |
6,779,941 |
6,836,451 |
6,835,425 |
7,029,648 |
|||||||||||
Acquired loans, including covered loans (d) |
2,158,930 |
2,284,163 |
533,888 |
88,064 |
- |
|||||||||||
Goodwill |
460,396 |
460,396 |
187,945 |
139,598 |
139,245 |
|||||||||||
Intangible assets |
11,416 |
12,422 |
5,659 |
1,158 |
1,143 |
|||||||||||
Earning assets |
12,528,954 |
12,701,602 |
10,775,434 |
9,685,155 |
9,793,244 |
|||||||||||
Total shareholders' equity |
1,517,892 |
1,505,345 |
1,152,721 |
1,065,627 |
1,059,209 |
|||||||||||
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) - Average outstanding shares and per share data restated to reflect the effect of stock dividends declared April 28, 2009 and August 20, 2009. |
||||||||||||||||
(c) - As required by current accounting guidance, the acquired loans and other real estate from First Bank, George Washington Savings Bank and Midwest Bank & Trust Company were recorded at fair value with no carryover of the related allowances. The ratio of our allowance for loan and credit losses and NPAs do not include these loans and other real estate. |
||||||||||||||||
(d) - Excludes loss share receivable of $318.4 million, $319.8 million and $88.0 million as of September 30, 2010, June 30, 2010 and March 31, 2010, respectively. |
||||||||||||||||
FIRSTMERIT CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS |
||||||||||||
(Dollars in thousands) (Unaudited, except December 31, 2009, which is derived from the |
September 30, |
December 31, |
September 30, |
|||||||||
ASSETS |
||||||||||||
Cash and due from banks |
$ |
650,769 |
$ |
161,033 |
$ |
193,060 |
||||||
Investment securities |
||||||||||||
Held-to-maturity |
61,818 |
50,686 |
38,454 |
|||||||||
Available-for-sale |
3,027,436 |
2,565,264 |
2,583,722 |
|||||||||
Other investments |
160,753 |
128,888 |
128,901 |
|||||||||
Loans held for sale |
25,542 |
16,828 |
12,519 |
|||||||||
Noncovered loans: |
||||||||||||
Commercial loans |
4,344,784 |
4,066,522 |
4,097,252 |
|||||||||
Mortgage loans |
414,728 |
463,416 |
481,336 |
|||||||||
Installment loans |
1,349,964 |
1,425,373 |
1,481,200 |
|||||||||
Home equity loans |
760,816 |
753,112 |
761,553 |
|||||||||
Credit card loans |
144,734 |
153,525 |
147,767 |
|||||||||
Leases |
64,009 |
61,541 |
60,540 |
|||||||||
Total noncovered loans |
7,079,035 |
6,923,489 |
7,029,648 |
|||||||||
Covered loans (includes loss share receivable of $318 million) |
2,174,370 |
- |
- |
|||||||||
Total loans |
9,253,405 |
6,923,489 |
7,029,648 |
|||||||||
Less: allowance for loan losses |
(116,528) |
(115,092) |
(116,352) |
|||||||||
Net loans |
9,136,877 |
6,808,397 |
6,913,296 |
|||||||||
Premises and equipment, net |
194,757 |
125,205 |
126,416 |
|||||||||
Goodwill |
460,396 |
139,598 |
139,245 |
|||||||||
Intangible assets |
11,416 |
1,158 |
1,143 |
|||||||||
Other real estate covered by FDIC loss share |
53,525 |
0 |
0 |
|||||||||
Accrued interest receivable and other assets |
572,497 |
542,845 |
624,599 |
|||||||||
Total assets |
$ |
14,355,786 |
$ |
10,539,902 |
$ |
10,761,355 |
||||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||||||
Deposits: |
||||||||||||
Demand-non-interest bearing |
$ |
2,658,458 |
$ |
2,069,921 |
$ |
1,898,913 |
||||||
Demand-interest bearing |
847,284 |
677,448 |
644,121 |
|||||||||
Savings and money market accounts |
4,557,702 |
3,408,109 |
3,035,922 |
|||||||||
Certificates and other time deposits |
3,207,972 |
1,360,318 |
1,692,318 |
|||||||||
Total deposits |
11,271,416 |
7,515,796 |
7,271,274 |
|||||||||
Federal funds purchased and securities sold under agreements to repurchase |
897,755 |
996,345 |
1,350,475 |
|||||||||
Wholesale borrowings |
391,914 |
740,105 |
749,397 |
|||||||||
Accrued taxes, expenses, and other liabilities |
276,809 |
222,029 |
331,000 |
|||||||||
Total liabilities |
12,837,894 |
9,474,275 |
9,702,146 |
|||||||||
Commitments and contingencies |
||||||||||||
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 115,121,731, 93,633,871 and |
||||||||||||
92,635,910 at September 30, 2010, December 31, 2009 and |
||||||||||||
September 30, 2009, respectively |
127,937 |
127,937 |
127,937 |
|||||||||
Capital surplus |
484,770 |
88,573 |
68,694 |
|||||||||
Accumulated other comprehensive loss |
(4,915) |
(25,459) |
(7,437) |
|||||||||
Retained earnings |
1,071,147 |
1,043,625 |
1,042,752 |
|||||||||
Treasury stock, at cost, 6,318,452, 6,629,995 and 6,767,053 shares |
||||||||||||
at September 30, 2010, December 31, 2009 and September 30, 2009, |
||||||||||||
respectively |
(161,047) |
(169,049) |
(172,737) |
|||||||||
Total shareholders' equity |
1,517,892 |
1,065,627 |
1,059,209 |
|||||||||
Total liabilities and shareholders' equity |
$ |
14,355,786 |
$ |
10,539,902 |
$ |
10,761,355 |
||||||
FIRSTMERIT CORPORATION AND SUBSIDIARIES AVERAGE CONSOLIDATED BALANCE SHEETS |
|||||||||||
Quarterly Periods |
|||||||||||
(Unaudited) |
|||||||||||
(Dollars in thousands) |
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
||||||
2010 |
2010 |
2010 |
2009 |
2009 |
|||||||
ASSETS |
|||||||||||
Cash and due from banks |
$ |
821,713 |
$ |
710,981 |
$ |
521,666 |
$ |
167,608 |
$ |
159,985 |
|
Investment securities |
|||||||||||
Held-to-maturity |
63,364 |
64,650 |
56,322 |
43,228 |
32,017 |
||||||
Available-for-sale |
3,049,056 |
3,088,011 |
2,731,639 |
2,577,759 |
2,568,348 |
||||||
Other investments |
158,591 |
146,620 |
129,658 |
128,214 |
128,067 |
||||||
Loans held for sale |
21,659 |
18,827 |
14,538 |
16,007 |
17,357 |
||||||
Noncovered loans: |
|||||||||||
Commercial loans |
4,336,631 |
4,376,059 |
4,197,663 |
4,058,851 |
4,105,778 |
||||||
Mortgage loans |
421,087 |
438,243 |
454,525 |
472,829 |
492,089 |
||||||
Installment loans |
1,363,248 |
1,377,748 |
1,402,552 |
1,449,091 |
1,492,019 |
||||||
Home equity loans |
762,626 |
763,943 |
757,094 |
756,478 |
758,353 |
||||||
Credit card loans |
146,863 |
145,880 |
150,117 |
151,233 |
149,460 |
||||||
Leases |
58,223 |
59,049 |
60,430 |
60,503 |
59,322 |
||||||
Total noncovered loans |
7,088,678 |
7,160,922 |
7,022,381 |
6,948,985 |
7,057,021 |
||||||
Covered loans and loss share receivable |
2,219,074 |
1,305,937 |
122,027 |
- |
- |
||||||
Total loans |
9,307,752 |
8,466,859 |
7,144,408 |
6,948,985 |
7,057,021 |
||||||
Less: allowance for loan losses |
113,025 |
116,639 |
115,031 |
113,438 |
111,073 |
||||||
Net loans |
9,194,727 |
8,350,220 |
7,029,377 |
6,835,547 |
6,945,948 |
||||||
Total earning assets |
12,600,422 |
11,784,967 |
10,076,565 |
9,714,193 |
9,802,810 |
||||||
Premises and equipment, net |
172,712 |
167,006 |
141,405 |
126,073 |
127,096 |
||||||
Accrued interest receivable and other assets |
1,106,709 |
925,864 |
732,505 |
664,795 |
650,541 |
||||||
TOTAL ASSETS |
$ |
14,588,531 |
$ |
13,472,179 |
$ |
11,357,110 |
$ |
10,559,231 |
$ |
10,629,359 |
|
LIABILITIES |
|||||||||||
Deposits: |
|||||||||||
Demand-non-interest bearing |
$ |
2,729,355 |
$ |
2,492,539 |
$ |
2,146,969 |
$ |
2,028,977 |
$ |
1,947,359 |
|
Demand-interest bearing |
858,168 |
698,261 |
687,233 |
651,381 |
647,712 |
||||||
Savings and money market accounts |
4,503,906 |
4,228,323 |
3,709,246 |
3,175,825 |
2,916,980 |
||||||
Certificates and other time deposits |
3,334,311 |
3,126,359 |
1,797,348 |
1,541,409 |
1,872,456 |
||||||
Total deposits |
11,425,740 |
10,545,482 |
8,340,796 |
7,397,592 |
7,384,507 |
||||||
Federal funds purchased and securities sold under |
|||||||||||
agreements to repurchase |
928,607 |
843,652 |
951,927 |
1,076,199 |
1,087,875 |
||||||
Wholesale borrowings |
443,892 |
526,926 |
708,414 |
762,023 |
883,377 |
||||||
Total funds |
12,798,239 |
11,916,060 |
10,001,137 |
9,235,814 |
9,355,759 |
||||||
Accrued taxes, expenses and other liabilities |
276,765 |
241,870 |
262,405 |
255,404 |
234,776 |
||||||
Total liabilities |
13,075,004 |
12,157,930 |
10,263,542 |
9,491,218 |
9,590,535 |
||||||
SHAREHOLDERS' EQUITY |
|||||||||||
Preferred stock |
- |
- |
- |
- |
- |
||||||
Common stock |
127,937 |
127,937 |
127,937 |
127,937 |
127,937 |
||||||
Common stock warrant |
- |
- |
- |
- |
- |
||||||
Capital surplus |
484,197 |
307,929 |
106,350 |
74,213 |
55,732 |
||||||
Accumulated other comprehensive loss |
(2,332) |
(15,913) |
(20,593) |
(9,266) |
(26,793) |
||||||
Retained earnings |
1,065,001 |
1,057,754 |
1,049,774 |
1,047,097 |
1,050,359 |
||||||
Treasury stock |
(161,276) |
(163,458) |
(169,900) |
(171,968) |
(168,411) |
||||||
Total shareholders' equity |
1,513,527 |
1,314,249 |
1,093,568 |
1,068,013 |
1,038,824 |
||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
14,588,531 |
$ |
13,472,179 |
$ |
11,357,110 |
$ |
10,559,231 |
$ |
10,629,359 |
|
FIRSTMERIT CORPORATION AND SUBSIDIARIES AVERAGE CONSOLIDATED BALANCE SHEETS (Unaudited) Fully Tax-equivalent Interest Rates and Interest Differential |
|||||||||||||||||||
Three months ended |
Year ended |
Three months ended |
|||||||||||||||||
September 30, 2010 |
December 31, 2009 |
September 30, 2009 |
|||||||||||||||||
(Dollars in thousands) |
Average |
Interest |
Average |
Average |
Interest |
Average |
Average |
Interest |
Average |
||||||||||
ASSETS |
|||||||||||||||||||
Cash and due from banks |
$ |
821,713 |
$ |
183,215 |
$ |
159,985 |
|||||||||||||
Investment securities and federal funds sold: |
|||||||||||||||||||
U.S. Treasury securities and U.S. Government |
|||||||||||||||||||
agency obligations (taxable) |
2,609,406 |
21,364 |
3.25% |
2,222,771 |
97,871 |
4.40% |
2,210,551 |
24,115 |
4.33% |
||||||||||
Obligations of states and political subdivisions (tax |
|||||||||||||||||||
exempt) |
346,380 |
4,848 |
5.55% |
321,919 |
19,718 |
6.13% |
318,853 |
4,872 |
6.06% |
||||||||||
Other securities and federal funds sold |
315,225 |
2,197 |
2.77% |
204,272 |
8,394 |
4.11% |
199,028 |
2,049 |
4.08% |
||||||||||
Total investment securities and federal |
|||||||||||||||||||
funds sold |
3,271,011 |
28,409 |
3.45% |
2,748,962 |
125,983 |
4.58% |
2,728,432 |
31,036 |
4.51% |
||||||||||
Loans held for sale |
21,659 |
269 |
4.93% |
19,289 |
1,032 |
5.35% |
17,357 |
230 |
5.26% |
||||||||||
Noncovered loans, covered loans and loss share |
|||||||||||||||||||
receivable |
9,307,752 |
118,680 |
5.06% |
7,156,983 |
339,381 |
4.74% |
7,057,021 |
84,107 |
4.73% |
||||||||||
Total earning assets |
12,600,422 |
147,358 |
4.64% |
9,925,234 |
466,396 |
4.70% |
9,802,810 |
115,373 |
4.67% |
||||||||||
Allowance for loan losses |
(113,025) |
(108,017) |
(111,073) |
||||||||||||||||
Other assets |
1,279,421 |
793,062 |
777,637 |
||||||||||||||||
Total assets |
$ |
14,588,531 |
$ |
10,793,494 |
$ |
10,629,359 |
|||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||||||||||||||
Deposits: |
|||||||||||||||||||
Demand - non-interest bearing |
$ |
2,729,355 |
- |
- |
$ |
1,910,171 |
- |
- |
$ |
1,947,359 |
- |
- |
|||||||
Demand - interest bearing |
858,168 |
223 |
0.10% |
656,367 |
600 |
0.09% |
647,712 |
137 |
0.08% |
||||||||||
Savings and money market accounts |
4,503,906 |
8,212 |
0.72% |
2,886,842 |
23,472 |
0.81% |
2,916,980 |
5,763 |
0.78% |
||||||||||
Certificates and other time deposits |
3,334,311 |
9,702 |
1.15% |
2,056,208 |
54,610 |
2.66% |
1,872,456 |
12,284 |
2.60% |
||||||||||
Total deposits |
11,425,740 |
18,137 |
0.63% |
7,509,588 |
78,682 |
1.05% |
7,384,507 |
18,184 |
0.98% |
||||||||||
Securities sold under agreements to repurchase |
928,607 |
984 |
0.42% |
1,013,167 |
4,764 |
0.47% |
1,087,875 |
1,286 |
0.47% |
||||||||||
Wholesale borrowings |
443,892 |
2,725 |
2.44% |
952,979 |
27,317 |
2.87% |
883,377 |
6,824 |
3.06% |
||||||||||
Total interest bearing liabilities |
10,068,884 |
21,846 |
0.86% |
7,565,563 |
110,763 |
1.46% |
7,408,400 |
26,294 |
1.41% |
||||||||||
Other liabilities |
276,765 |
267,835 |
234,776 |
||||||||||||||||
Shareholders' equity |
1,513,527 |
1,049,925 |
1,038,824 |
||||||||||||||||
Total liabilities and shareholders' equity |
$ |
14,588,531 |
$ |
10,793,494 |
$ |
10,629,359 |
|||||||||||||
Net yield on earning assets |
$ |
12,600,422 |
125,512 |
3.95% |
$ |
9,925,234 |
355,633 |
3.58% |
$ |
9,802,810 |
89,079 |
3.61% |
|||||||
Interest rate spread |
3.78% |
3.24% |
3.26% |
||||||||||||||||
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 INCOME AND COMPREHENSIVE INCOME |
|||||||||||||||
(Unaudited) |
Quarters ended |
Nine months ended |
|||||||||||||
(Dollars in thousands except per share data) |
September 30, |
September 30, |
|||||||||||||
2010 |
2009 |
2010 |
2009 |
||||||||||||
Interest income: |
|||||||||||||||
Interest and fees on loans, including held for sale |
$ |
118,543 |
$ |
84,283 |
$ |
312,112 |
$ |
258,329 |
|||||||
Investment securities |
|||||||||||||||
Taxable |
23,560 |
26,165 |
74,032 |
81,119 |
|||||||||||
Tax-exempt |
3,234 |
3,223 |
9,861 |
9,738 |
|||||||||||
Total investment securities interest |
26,794 |
29,388 |
83,893 |
90,857 |
|||||||||||
Total interest income |
145,337 |
113,671 |
396,005 |
349,186 |
|||||||||||
Interest expense: |
|||||||||||||||
Interest on deposits: |
|||||||||||||||
Demand-interest bearing |
252 |
137 |
553 |
451 |
|||||||||||
Savings and money market accounts |
8,294 |
5,763 |
23,768 |
16,592 |
|||||||||||
Certificates and other time deposits |
9,588 |
12,284 |
25,504 |
46,197 |
|||||||||||
Interest on securities sold under agreements to repurchase |
986 |
1,286 |
3,517 |
3,496 |
|||||||||||
Interest on wholesale borrowings |
2,724 |
6,824 |
12,009 |
21,064 |
|||||||||||
Total interest expense |
21,844 |
26,294 |
65,351 |
87,800 |
|||||||||||
Net interest income |
123,493 |
87,377 |
330,654 |
261,386 |
|||||||||||
Provision for loan losses - uncovered |
18,108 |
23,887 |
63,967 |
68,473 |
|||||||||||
Provision for loan losses - covered |
593 |
- |
860 |
- |
|||||||||||
Net interest income after provision for loan losses |
104,791 |
63,490 |
265,826 |
192,913 |
|||||||||||
Other income: |
|||||||||||||||
Trust department income |
5,469 |
5,081 |
16,324 |
15,309 |
|||||||||||
Service charges on deposits |
16,859 |
16,782 |
49,962 |
46,798 |
|||||||||||
Credit card fees |
12,532 |
11,711 |
36,332 |
34,463 |
|||||||||||
ATM and other service fees |
2,996 |
2,935 |
8,349 |
8,380 |
|||||||||||
Bank owned life insurance income |
3,219 |
3,216 |
11,757 |
9,216 |
|||||||||||
Investment services and insurance |
2,688 |
2,498 |
7,151 |
7,686 |
|||||||||||
Investment securities gains, net |
58 |
2,925 |
709 |
4,103 |
|||||||||||
Loan sales and servicing income |
4,006 |
3,881 |
10,218 |
10,007 |
|||||||||||
Gain on George Washington acquisition |
- |
- |
1,041 |
- |
|||||||||||
Gain on post medical retirement curtailment |
- |
- |
- |
9,543 |
|||||||||||
Other operating income |
7,308 |
2,538 |
16,401 |
12,095 |
|||||||||||
Total other income |
55,135 |
51,567 |
158,244 |
157,600 |
|||||||||||
Other expenses: |
|||||||||||||||
Salaries, wages, pension and employee benefits |
58,930 |
43,351 |
158,985 |
130,158 |
|||||||||||
Net occupancy expense |
8,608 |
5,739 |
23,428 |
18,468 |
|||||||||||
Equipment expense |
7,330 |
5,847 |
20,115 |
17,856 |
|||||||||||
Stationery, supplies and postage |
2,865 |
2,167 |
8,254 |
6,493 |
|||||||||||
Bankcard, loan processing and other costs |
8,281 |
7,548 |
23,762 |
23,252 |
|||||||||||
Professional services |
8,544 |
3,980 |
21,626 |
10,316 |
|||||||||||
Amortization of intangibles |
1,006 |
86 |
1,909 |
260 |
|||||||||||
FDIC expense |
5,267 |
2,298 |
13,448 |
13,350 |
|||||||||||
Other operating expense |
19,840 |
13,149 |
48,879 |
37,779 |
|||||||||||
Total other expenses |
120,670 |
84,165 |
320,406 |
257,932 |
|||||||||||
Income before federal income tax expense |
39,257 |
30,892 |
103,665 |
92,581 |
|||||||||||
Federal income tax expense |
10,261 |
8,129 |
27,786 |
24,889 |
|||||||||||
Net income |
$ |
28,996 |
$ |
22,763 |
$ |
75,879 |
$ |
67,692 |
|||||||
Other comprehensive income, net of taxes |
|||||||||||||||
Unrealized securities' holding gain, net of taxes |
$ |
(360) |
$ |
28,172 |
$ |
21,005 |
$ |
50,235 |
|||||||
Unrealized hedging loss, net of taxes |
- |
- |
- |
(94) |
|||||||||||
Less: reclassification adjustment for securities' gain realized in |
|||||||||||||||
income, net of taxes |
38 |
(277) |
461 |
(831) |
|||||||||||
Minimum pension liability adjustment, net of taxes |
- |
1,901 |
- |
2,667 |
|||||||||||
Total other comprehensive gain, net of taxes |
(398) |
25,994 |
20,544 |
46,643 |
|||||||||||
Comprehensive income |
$ |
28,598 |
$ |
48,757 |
$ |
96,423 |
$ |
114,335 |
|||||||
Net income applicable to common shares |
$ |
28,996 |
$ |
22,763 |
$ |
75,879 |
$ |
61,321 |
|||||||
Net income used in diluted EPS calculation |
$ |
28,996 |
$ |
22,763 |
$ |
75,879 |
$ |
61,321 |
|||||||
Weighted average number of common shares outstanding - basic * |
108,793 |
85,872 |
98,588 |
84,182 |
|||||||||||
Weighted average number of common shares outstanding - diluted * |
108,794 |
85,880 |
98,590 |
84,190 |
|||||||||||
Basic earnings per share * |
$ |
0.27 |
$ |
0.27 |
$ |
0.77 |
$ |
0.73 |
|||||||
Diluted earnings per share * |
$ |
0.27 |
$ |
0.27 |
$ |
0.77 |
$ |
0.73 |
|||||||
Dividend per share |
$ |
0.16 |
$ |
0.16 |
$ |
0.48 |
$ |
0.61 |
|||||||
*Average outstanding shares and per share data as of June 30, 2009 are restated to reflect the effect of stock dividends declared April 29, 2009 and August 20, 2009. |
|||||||||||||||
FIRSTMERIT CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME---LINKED QUARTERS |
|||||||||||
Quarterly Results |
|||||||||||
(Unaudited) |
2010 |
2010 |
2010 |
2009 |
2009 |
||||||
(Dollars in thousands, except share data) |
3rd Qtr |
2nd Qtr |
1st Qtr |
4th Qtr |
3rd Qtr |
||||||
Interest and fees on loans, including held for sale |
$ |
118,543 |
$ |
109,924 |
$ |
83,645 |
$ |
81,907 |
$ |
84,283 |
|
Interest and dividends - securities and federal funds sold |
26,794 |
28,890 |
28,209 |
28,434 |
29,388 |
||||||
Total interest income |
145,337 |
138,814 |
111,854 |
110,341 |
113,671 |
||||||
Interest on deposits: |
|||||||||||
Demand-interest bearing |
252 |
149 |
152 |
149 |
137 |
||||||
Savings and money market accounts |
8,294 |
7,873 |
7,601 |
6,880 |
5,763 |
||||||
Certificates and other time deposits |
9,588 |
9,510 |
6,406 |
8,413 |
12,284 |
||||||
Securities sold under agreements to repurchase |
986 |
1,404 |
1,127 |
1,268 |
1,286 |
||||||
Wholesale borrowings |
2,724 |
3,111 |
6,174 |
6,253 |
6,824 |
||||||
Total interest expense |
21,844 |
22,047 |
21,460 |
22,963 |
26,294 |
||||||
Net interest income |
123,493 |
116,767 |
90,394 |
87,378 |
87,377 |
||||||
Provision for loan losses - uncovered |
18,108 |
20,366 |
25,493 |
29,960 |
23,887 |
||||||
Provision for loan losses - covered |
593 |
267 |
- |
- |
- |
||||||
Net interest income after provision for loan losses |
104,791 |
96,134 |
64,901 |
57,418 |
63,490 |
||||||
Other income: |
|||||||||||
Trust department income |
5,469 |
5,574 |
5,281 |
5,374 |
5,081 |
||||||
Service charges on deposits |
16,859 |
17,737 |
15,366 |
16,568 |
16,782 |
||||||
Credit card fees |
12,532 |
12,242 |
11,558 |
12,049 |
11,711 |
||||||
ATM and other service fees |
2,996 |
2,844 |
2,509 |
2,730 |
2,935 |
||||||
Bank owned life insurance income |
3,219 |
2,886 |
5,652 |
4,524 |
3,216 |
||||||
Investment services and insurance |
2,688 |
2,535 |
1,928 |
2,322 |
2,498 |
||||||
Investment securities gains, net |
58 |
651 |
- |
1,934 |
2,925 |
||||||
Loan sales and servicing income |
4,006 |
2,975 |
3,237 |
2,947 |
3,881 |
||||||
Gain on George Washington acquisition |
- |
- |
1,041 |
- |
- |
||||||
Other operating income |
7,308 |
5,765 |
3,328 |
4,253 |
2,538 |
||||||
Total other income |
55,135 |
53,209 |
49,900 |
52,701 |
51,567 |
||||||
Other expenses: |
|||||||||||
Salaries, wages, pension and employee benefits |
58,930 |
51,899 |
48,156 |
45,748 |
43,351 |
||||||
Net occupancy expense |
8,608 |
7,680 |
7,140 |
5,631 |
5,739 |
||||||
Equipment expense |
7,330 |
6,735 |
6,050 |
6,445 |
5,847 |
||||||
Stationery, supplies and postage |
2,865 |
2,696 |
2,693 |
2,414 |
2,167 |
||||||
Bankcard, loan processing and other costs |
8,281 |
7,663 |
7,818 |
8,215 |
7,548 |
||||||
Professional services |
8,544 |
7,845 |
5,237 |
6,098 |
3,980 |
||||||
Amortization of intangibles |
1,006 |
669 |
234 |
87 |
86 |
||||||
FDIC expense |
5,267 |
4,416 |
3,765 |
3,160 |
2,298 |
||||||
Other operating expense |
19,840 |
16,120 |
12,920 |
17,087 |
13,149 |
||||||
Total other expenses |
120,670 |
105,723 |
94,013 |
94,885 |
84,165 |
||||||
Income before income tax expense |
39,257 |
43,620 |
20,788 |
15,234 |
30,892 |
||||||
Federal income taxes |
10,261 |
12,127 |
5,398 |
756 |
8,129 |
||||||
Net income |
$ |
28,996 |
$ |
31,493 |
$ |
15,390 |
$ |
14,478 |
$ |
22,763 |
|
Other comprehensive income (loss), net of taxes |
(398) |
16,466 |
4,476 |
(18,022) |
25,994 |
||||||
Comprehensive income |
$ |
28,598 |
$ |
47,959 |
$ |
19,866 |
$ |
(3,544) |
$ |
48,757 |
|
Net income applicable to common shares |
$ |
28,996 |
$ |
31,493 |
$ |
15,390 |
$ |
14,478 |
$ |
22,763 |
|
Adjusted net income used in diluted EPS calculation |
$ |
28,996 |
$ |
31,493 |
$ |
15,390 |
$ |
14,478 |
$ |
22,763 |
|
Weighted-average common shares - basic * |
108,793 |
98,968 |
87,771 |
86,149 |
85,872 |
||||||
Weighted-average common shares - diluted * |
108,794 |
98,969 |
87,777 |
86,157 |
85,880 |
||||||
Basic net income per share * |
$ |
0.27 |
$ |
0.32 |
$ |
0.18 |
$ |
0.17 |
$ |
0.27 |
|
Diluted net income per share * |
$ |
0.27 |
$ |
0.32 |
$ |
0.18 |
$ |
0.17 |
$ |
0.27 |
|
* Average outstanding shares and per share data restated to reflect the effect of stock dividends declared April 28, 2009 and August 20, 2009. |
|||||||||||
FIRSTMERIT CORPORATION AND SUBSIDIARIES ASSET QUALITY INFORMATION |
|||||||||||||
(Unaudited, except December 31, 2009 annual period which |
|||||||||||||
Quarterly Periods |
Annual Period |
||||||||||||
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
December 31, |
||||||||
Allowance for Credit Losses |
2010 |
2010 |
2010 |
2009 |
2009 |
2009 |
|||||||
Allowance for loan losses, beginning of period |
$ |
118,343 |
$ |
117,806 |
$ |
115,092 |
$ |
116,352 |
$ |
111,222 |
$ |
103,757 |
|
Provision for loan losses noncovered |
18,108 |
20,366 |
25,493 |
29,960 |
23,887 |
98,433 |
|||||||
Charge-offs |
25,817 |
24,967 |
26,195 |
34,232 |
21,819 |
99,713 |
|||||||
Recoveries |
5,894 |
5,138 |
3,416 |
3,012 |
3,062 |
12,615 |
|||||||
Net charge-offs |
19,923 |
19,829 |
22,779 |
31,220 |
18,757 |
87,098 |
|||||||
Allowance for loan losses, end of period |
$ |
116,528 |
$ |
118,343 |
$ |
117,806 |
$ |
115,092 |
$ |
116,352 |
$ |
115,092 |
|
Reserve for unfunded lending commitments, |
|||||||||||||
beginning of period |
$ |
6,812 |
$ |
6,337 |
$ |
5,751 |
$ |
4,470 |
$ |
6,054 |
$ |
6,588 |
|
Provision for credit losses |
1,052 |
475 |
586 |
1,281 |
(1,584) |
(837) |
|||||||
Reserve for unfunded lending commitments, |
|||||||||||||
end of period |
$ |
7,864 |
$ |
6,812 |
$ |
6,337 |
$ |
5,751 |
$ |
4,470 |
$ |
5,751 |
|
Allowance for Credit Losses |
$ |
124,392 |
$ |
125,155 |
$ |
124,143 |
$ |
120,843 |
$ |
120,822 |
$ |
120,843 |
|
Ratios (a) |
|||||||||||||
Provision for loan losses as a % of average loans |
1.06% |
1.20% |
1.52% |
1.71% |
1.34% |
1.38% |
|||||||
Provision for credit losses as a % of average loans |
0.06% |
0.03% |
0.03% |
0.07% |
-0.09% |
-0.01% |
|||||||
Net charge-offs as a % of average loans |
1.17% |
1.15% |
1.36% |
1.79% |
1.05% |
1.22% |
|||||||
Allowance for loan losses as a % of period-end loans |
1.72% |
1.75% |
1.72% |
1.68% |
1.66% |
1.58% |
|||||||
Allowance for credit losses as a % of period-end loans |
1.84% |
1.85% |
1.82% |
1.77% |
1.72% |
1.66% |
|||||||
Allowance for loan losses as a % of nonperforming loans |
111.00% |
119.62% |
105.14% |
125.55% |
147.60% |
125.55% |
|||||||
Allowance for credit losses as a % of nonperforming loans |
118.49% |
126.51% |
110.80% |
131.82% |
153.27% |
131.82% |
|||||||
Asset Quality (a) |
|||||||||||||
Impaired loans: |
|||||||||||||
Nonaccrual |
$ |
91,646 |
$ |
84,535 |
$ |
94,798 |
$ |
74,033 |
$ |
63,357 |
$ |
74,033 |
|
Other nonperforming loans: |
|||||||||||||
Nonaccrual |
13,331 |
14,394 |
17,245 |
17,639 |
15,474 |
17,639 |
|||||||
Total nonperforming loans |
104,977 |
98,929 |
112,043 |
91,672 |
78,831 |
91,672 |
|||||||
Other real estate ("ORE") |
10,290 |
10,852 |
11,277 |
9,329 |
10,050 |
9,329 |
|||||||
Total nonperforming assets ("NPAs") |
$ |
115,267 |
$ |
109,781 |
$ |
123,320 |
$ |
101,001 |
$ |
88,881 |
$ |
101,001 |
|
NPAs as % of period-end loans + ORE |
1.70% |
1.62% |
1.80% |
1.48% |
1.26% |
1.39% |
|||||||
Past due 90 days or more & accruing interest |
$ |
36,895 |
$ |
36,932 |
$ |
21,099 |
$ |
35,025 |
$ |
27,764 |
$ |
35,025 |
|
(a) Excludes acquired loans and loss share receivable with a period end balance of $2.5 billion, $2.6 billion and $.6 million at September 30, 2010, June 30,2010 and March 31, 2010, respectively, and ORE covered by an FDIC loss share with a period end balance of $53.5 million, $50.5 million and $22.8 million at September 30, 2010, June 30, 2010 and March 31, 2010, respectively, which, as required by current accounting guidance, were recorded at fair value on the date of acquisition. |
|||||||||||||
FIRSTMERIT CORPORATION NONINTEREST INCOME AND NONINTEREST EXPENSE DETAIL |
|||||||||||
(Unaudited) |
|||||||||||
(Dollars in thousands) |
|||||||||||
2010 |
2010 |
2010 |
2009 |
2009 |
|||||||
QUARTERLY OTHER INCOME DETAIL |
3rd Qtr |
2nd Qtr |
1st Qtr |
4th Qtr |
3rd Qtr |
||||||
Trust department income |
$ |
5,469 |
$ |
5,574 |
$ |
5,281 |
$ |
5,374 |
$ |
5,081 |
|
Service charges on deposits |
16,859 |
17,737 |
15,366 |
16,568 |
16,782 |
||||||
Credit card fees |
12,532 |
12,242 |
11,558 |
12,049 |
11,711 |
||||||
ATM and other service fees |
2,996 |
2,844 |
2,509 |
2,730 |
2,935 |
||||||
Bank owned life insurance income |
3,219 |
2,886 |
5,652 |
4,524 |
3,216 |
||||||
Investment services and insurance |
2,688 |
2,535 |
1,928 |
2,322 |
2,498 |
||||||
Investment securities gains, net |
58 |
651 |
- |
1,934 |
2,925 |
||||||
Loan sales and servicing income |
4,006 |
2,975 |
3,237 |
2,947 |
3,881 |
||||||
Gain on George Washington acquisition |
- |
- |
1,041 |
- |
- |
||||||
Other operating income |
7,308 |
5,765 |
3,328 |
4,253 |
2,538 |
||||||
Total Other Income |
$ |
55,135 |
$ |
53,209 |
$ |
49,900 |
$ |
52,701 |
$ |
51,567 |
|
2010 |
2010 |
2010 |
2009 |
2009 |
|||||||
QUARTERLY OTHER EXPENSES DETAIL |
3rd Qtr |
2nd Qtr |
1st Qtr |
4th Qtr |
3rd Qtr |
||||||
Salaries, wages, pension and employee benefits |
$ |
58,930 |
$ |
51,899 |
$ |
48,156 |
$ |
45,748 |
$ |
43,351 |
|
Net occupancy expense |
8,608 |
7,680 |
7,140 |
5,631 |
5,739 |
||||||
Equipment expense |
7,330 |
6,735 |
6,050 |
6,445 |
5,847 |
||||||
Taxes, other than federal income taxes |
1,680 |
2,236 |
1,938 |
1,593 |
1,646 |
||||||
Stationery, supplies and postage |
2,865 |
2,696 |
2,693 |
2,414 |
2,167 |
||||||
Bankcard, loan processing and other costs |
8,281 |
7,663 |
7,818 |
8,215 |
7,548 |
||||||
Advertising |
2,488 |
2,407 |
1,592 |
1,510 |
1,635 |
||||||
Professional services |
8,544 |
7,845 |
5,237 |
6,098 |
3,980 |
||||||
Telephone |
1,561 |
1,267 |
1,133 |
1,039 |
1,010 |
||||||
Amortization of intangibles |
1,006 |
669 |
234 |
87 |
86 |
||||||
Hedge termination |
- |
- |
- |
3,877 |
- |
||||||
FDIC expense |
5,267 |
4,416 |
3,765 |
3,160 |
2,298 |
||||||
Other operating expense |
14,110 |
10,210 |
8,257 |
9,068 |
8,858 |
||||||
Total Other Expenses |
$ |
120,670 |
$ |
105,723 |
$ |
94,013 |
$ |
94,885 |
$ |
84,165 |
|
FIRSTMERIT CORPORATION AND SUBSIDIARIES ALLOWANCE FOR LOAN LOSSES - Net Charge-off Detail |
|||||||||||
(Unaudited) |
|||||||||||
(Dollars in thousands) |
Quarters ended |
Year ended |
Nine months ended |
||||||||
September 30, |
December 31, |
September 30, |
|||||||||
2010 |
2009 |
2009 |
2010 |
2009 |
|||||||
Allowance for loan losses - beginning of period |
$ |
118,343 |
$ |
111,222 |
$ |
103,757 |
$ |
115,092 |
$ |
103,757 |
|
Loans charged off: |
|||||||||||
Commercial |
10,704 |
7,208 |
39,685 |
26,541 |
21,892 |
||||||
Mortgage |
1,153 |
1,455 |
4,960 |
4,194 |
3,693 |
||||||
Installment |
8,154 |
7,135 |
31,622 |
25,389 |
23,060 |
||||||
Home equity |
1,923 |
1,911 |
7,200 |
6,754 |
4,943 |
||||||
Credit cards |
2,902 |
3,384 |
13,558 |
11,080 |
10,047 |
||||||
Leases |
55 |
0 |
97 |
692 |
3 |
||||||
Overdrafts |
926 |
726 |
2,591 |
2,329 |
1,843 |
||||||
Total |
25,817 |
21,819 |
99,713 |
76,979 |
65,481 |
||||||
Recoveries: |
|||||||||||
Commercial |
503 |
90 |
890 |
1,305 |
521 |
||||||
Mortgage |
138 |
41 |
270 |
201 |
260 |
||||||
Installment |
3,946 |
2,104 |
8,329 |
9,044 |
6,527 |
||||||
Home equity |
481 |
99 |
494 |
1,182 |
295 |
||||||
Credit cards |
600 |
514 |
1,710 |
1,681 |
1,289 |
||||||
Manufactured housing |
36 |
37 |
171 |
122 |
122 |
||||||
Leases |
2 |
6 |
57 |
240 |
53 |
||||||
Overdrafts |
188 |
171 |
694 |
673 |
536 |
||||||
Total |
5,894 |
3,062 |
12,615 |
14,448 |
9,603 |
||||||
Net charge-offs |
19,923 |
18,757 |
87,098 |
62,531 |
55,878 |
||||||
Provision for loan losses noncovered |
18,108 |
23,887 |
98,433 |
63,967 |
68,473 |
||||||
Allowance for loan losses - end of period |
$ |
116,528 |
$ |
116,352 |
$ |
115,092 |
$ |
116,528 |
$ |
116,352 |
|
Average loans (a) |
$ |
6,781,123 |
$ |
7,057,021 |
$ |
7,152,845 |
$ |
6,802,363 |
$ |
7,227,077 |
|
Ratio to average loans (a): |
|||||||||||
(Annualized) net charge-offs |
1.17% |
1.05% |
1.22% |
1.23% |
1.03% |
||||||
Provision for loan losses |
1.06% |
1.34% |
1.38% |
1.26% |
1.27% |
||||||
Loans, period-end (excluding acquired loans) (a) |
$ |
6,776,098 |
$ |
7,029,648 |
$ |
6,835,425 |
$ |
6,776,098 |
$ |
7,029,648 |
|
0 |
|||||||||||
Allowance for credit losses (a): |
$ |
124,392 |
$ |
120,822 |
$ |
120,843 |
$ |
124,392 |
$ |
120,822 |
|
As a multiple of (annualized) net charge-offs |
1.57 |
1.62 |
1.39 |
1.49 |
1.62 |
||||||
Allowance for loan losses (a): |
|||||||||||
As a percent of period-end loans |
1.72% |
1.66% |
1.68% |
1.72% |
1.66% |
||||||
As a multiple of (annualized) net charge-offs |
1.47 |
1.56 |
1.32 |
1.39 |
1.56 |
||||||
(a) Excludes acquired loans and loss share receivable. |
|||||||||||
FirstMerit Corporation |
|
Analyst: 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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