FirstMerit Reports Fourth Quarter 2011 EPS of $0.28 Per Share
AKRON, Ohio, Jan. 24, 2012 /PRNewswire/ --
Quarterly Highlights include:
- 51st consecutive quarter of profitability
- Solid linked-quarter credit trends supported by a $9.3 million, or 10.27%, decline in non-performing assets and a $0.8 million, or 5.76%, decline in net charge-offs to 0.73% of average loans
- Average commercial loan growth of $173.4 million, or 3.56%, from prior quarter
- Average core deposit growth of $226.1 million, or 2.42%, from prior quarter
- Strong tangible common equity ratio at 7.86%
FirstMerit Corporation (Nasdaq: FMER) reported fourth quarter 2011 net income of $30.5 million, or $0.28 per diluted share. This compares with $31.7 million, or $0.29 per diluted share, for the third quarter 2011 and $27.0 million, or $0.25 per diluted share, for the fourth quarter 2010. For the full year 2011, the Corporation reported net income of $119.6 million, or $1.10 per diluted share, compared with $102.9 million, or $1.02 per diluted share in 2010.
(Logo: http://photos.prnewswire.com/prnh/20070920/CLTU138LOGO )
Returns on average common equity ("ROE") and average assets ("ROA") for the fourth quarter 2011 were 7.70% and 0.83%, respectively, compared with 8.02% and 0.86%, respectively, for the third quarter 2011 and 7.04% and 0.74% for the fourth quarter 2010.
"Our strong performance in the fourth quarter capped a year of solid and profitable results in an environment that continues to challenge the financial industry and its customers," said Paul G. Greig, chairman, president and CEO of FirstMerit Corporation. "Among our accomplishments were continued improvements of our already strong credit quality. We also maintained a strong balance sheet with ample liquidity to support consumer and commercial loan growth in both our legacy markets and Chicago. We are also moving forward on our expense management and revenue generation initiative; we are in the process of evaluating nearly 4,000 ideas submitted by employees at all levels of the Corporation and look to begin implementation on the best of these ideas in the spring of 2012."
Mr. Greig said, "Because we have not wavered from the fundamentals of sound banking practices, we remain one of the strongest banks in the industry, providing outstanding products and service to our customers and positive returns to our shareholders."
Net interest margin was 3.85% for the fourth quarter of 2011 compared with 3.75% for the third quarter of 2011 and 4.14% for the fourth quarter of 2010. Lower deposit costs in the fourth quarter resulting from the Corporation's continued success growing core deposits drove net interest margin expansion from the prior quarter. The increase in core deposits was a significant factor in reducing average deposit costs every quarter in 2011. The decline in net interest margin compared with the fourth quarter of 2010 is attributed to lower earning asset yields in a persistently low interest rate environment.
Average loans, not including covered loans, during the fourth quarter of 2011 increased $190.6 million, or 2.55%, compared with the third quarter of 2011 and also increased $530.6 million, or 7.43%, compared with the fourth quarter of 2010. Average commercial loans increased $173.4 million, or 3.56%, compared with the prior quarter, and increased $603.8 million, or 13.58%, compared with the year ago quarter. Commercial loans remain the primary driver in average loan portfolio growth, however, average consumer loans increased moderately for the second consecutive quarter.
Average deposits were $11.4 billion during the fourth quarter of 2011, decreasing $31.1 million, or 0.27%, compared with the third quarter of 2011, and increasing $28.1 million, or 0.25%, compared with the fourth quarter of 2010. During the fourth quarter 2011, average core deposits, which exclude time deposits, increased $226.1 million, or 2.42%, compared with the third quarter 2011 and $1.2 billion, or 14.18%, compared with the fourth quarter 2010. The Corporation has successfully executed a strategy to increase the concentration of lower cost deposits within the overall deposit mix by focusing on growth in checking, money market and savings account products with less emphasis on renewing maturing certificate of deposit accounts. In addition to efficiently funding balance sheet growth, the increased concentration in core deposit accounts generally deepens and extends the length of customer relationships. Average time deposits decreased $257.2 million, or 12.25%, and decreased $1.2 billion, or 38.65%, respectively, over prior and year-ago quarters.
Average investments decreased $195.6 million, or 5.32%, compared with the third quarter of 2011 and increased $242.5 million, or 7.49% compared with the fourth quarter of 2010. As part of the Corporation's previously announced strategy to reposition the investment portfolio and extend its current duration, approximately $395.3 million of securities were sold during the fourth quarter of 2011 of which $83.5 million was used to terminate higher cost funding in Federal Home Loan Bank ("FHLB") advances and repurchase agreements as part of a deleveraging of the portfolio. Additionally, the Corporation redeemed $20.3 million in FHLB Chicago stock.
Net interest income on a fully tax-equivalent ("FTE") basis was $123.6 million in the fourth quarter 2011 compared with $121.8 million in the third quarter of 2011 and $130.2 million in the fourth quarter of 2010.
Noninterest income excluding securities transactions for the fourth quarter of 2011 was $53.9 million, a decrease of $2.4 million, or 4.30%, from the third quarter of 2011 and a decrease of $0.2 million, or 0.40%, from the fourth quarter of 2010. Other operating income in the fourth quarter of 2011 decreased $1.6 million, or 17.11%, compared with the prior quarter which included $2.7 million from gains on covered loans paid in full and $2.1 million from an increase in the fair value of interest rate lock commitments resulting from an increase in the mortgage pipeline partially offset by $2.7 million of insurance reimbursement of legal costs incurred and previously expensed.
Other income, net of $5.8 million in securities gains, as a percentage of net revenue for the fourth quarter of 2011 was 30.38% compared with 31.64% for third quarter of 2011 and 29.37% for the fourth quarter of 2010. Net revenue is defined as net interest income, on an FTE basis, plus other income, less gains from securities sales.
Noninterest expense for the fourth quarter of 2011 was $123.9 million, an increase of $7.9 million, or 6.83%, from the third quarter of 2011 and an increase of $1.4 million, or 1.16%, from the fourth quarter of 2010. Included in other operating expense in the fourth quarter of 2011 is $4.9 million of fees related to the early termination of repurchase agreements and FHLB advances as part of the Corporation's investment portfolio repositioning strategy and $1.3 million of expense related to an increase in the liability associated with the sale of our Visa® Class B shares in 2008.
During the fourth quarter of 2011, the Corporation reported an efficiency ratio of 69.46%, compared with 64.78% for the third quarter of 2011 and 65.86% for the fourth quarter of 2010.
Net charge-offs, excluding acquired loans, totaled $13.8 million, or 0.73% of average loans, excluding acquired loans, in the fourth quarter of 2011, compared with $14.6 million, or 0.79% of average loans, in the third quarter 2011 and $21.7 million, or 1.25% of average loans, in the fourth quarter of 2010.
Nonperforming assets totaled $81.1 million at December 31, 2011, a decrease of $9.3 million, or 10.27%, compared with September 30, 2011 and a decrease of $42.4 million, or 34.34%, compared with December 31, 2010. Nonperforming assets at December 31, 2011 represented 1.06% of period-end loans plus other real estate compared with 1.21% at September 30, 2011 and 1.78% at December 31, 2010.
The allowance for noncovered loan losses totaled $107.7 million at December 31, 2011. At December 31, 2011, the allowance for noncovered loan losses was 1.41% of period-end loans compared with 1.46% at September 30, 2011 and 1.65% at December 31, 2010. 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 1.49% of period end loans, excluding acquired loans, at December 31, 2011, compared with 1.55% at September 30, 2011 and 1.78% at December 31, 2010. The allowance for credit losses to nonperforming loans was 176.50% at December 31, 2011, compared with 169.42% at September 30, 2011 and 118.01% at December 31, 2010.
The Corporation's total assets at December 31, 2011 were $14.4 billion, a decrease of $246.6 million, or 1.68%, compared with September 30, 2011 and an increase of $304.8 million, or 2.16%, compared with December 31, 2010.
Total deposits were $11.4 billion at December 31, 2011, an increase of $35.5 million, or 0.31%, from September 30, 2011 and an increase of $163.6 million, or 1.45%, from December 31, 2010. Core deposits totaled $9.7 billion at December 31, 2011, an increase of $235.9 million, or 2.50% from September 30, 2011 and an increase of $1.2 billion, or 14.38%, from December 31, 2010.
Shareholders' equity was $1.6 billion at December 31, 2011, compared with $1.6 billion at September 30, 2011, and $1.5 billion at December 31, 2010. The Corporation maintained a strong capital position as tangible common equity to assets was 7.86% at December 31, 2011, compared with 7.75% at September 30, 2011 and 7.59% at December 31, 2010. The common cash dividend per share paid in the fourth quarter 2011 was $0.16.
Fourth Quarter 2011 Conference Call
FirstMerit (Nasdaq: FMER) senior management will host an earnings conference call today at 11:00 a.m. (Eastern Time) to provide an overview of fourth quarter results and highlights. To participate in the conference call, please dial (888) 693-3477 ten minutes before start time and provide the reservation number: 41325090. A replay of the conference call will be available at approximately 2:00 p.m. (Eastern Time) on January 24, 2012 through February 7, 2012 by dialing (855) 859-2056, and entering the PIN: 41325090. The Corporation will provide a slide presentation, which management will speak to during the conference call. A copy of the presentation will be available at https://www.firstmerit.com/personal/investors.aspx; click on the Presentations link to access the slide presentation.
About FirstMerit Corporation
FirstMerit Corporation is a diversified financial services company headquartered in Akron, Ohio, with assets of $14.4 billion as of December 31, 2011 and 206 banking offices and 214 ATMs in Ohio, Western Pennsylvania, and Chicago areas. FirstMerit 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 its consolidated financial statements for the year ended December 31, 2011 on Form 10-K. As a result, the Corporation will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimates made as of December 31, 2011 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.
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| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
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| Consolidated Financial Highlights |
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| (Unaudited) |
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Quarters |
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2011 |
2011 |
2011 |
2011 |
2010 |
| EARNINGS |
4th Qtr |
3rd Qtr |
2nd Qtr |
1st Qtr |
4th Qtr |
| Net interest income FTE (a) |
$ 123,598 |
$ 121,788 |
$ 119,735 |
$ 124,191 |
$ 130,227 |
| Provision for noncovered loan losses |
12,275 |
14,604 |
10,138 |
17,018 |
19,816 |
| Provision for covered loan losses |
2,773 |
4,768 |
7,481 |
5,331 |
3,572 |
| Other income |
59,737 |
60,772 |
51,491 |
52,756 |
54,311 |
| Other expenses |
123,874 |
115,957 |
110,068 |
114,445 |
122,452 |
| FTE adjustment (a) |
2,632 |
2,396 |
2,292 |
2,367 |
2,363 |
| Net income |
30,496 |
31,737 |
29,763 |
27,560 |
27,030 |
| Diluted EPS |
0.28 |
0.29 |
0.27 |
0.25 |
0.25 |
| PERFORMANCE RATIOS |
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| Return on average assets (ROA) |
0.83% |
0.86% |
0.82% |
0.78% |
0.74% |
| Return on average common equity (ROE) |
7.70% |
8.02% |
7.78% |
7.37% |
7.04% |
| Net interest margin FTE (a) |
3.85% |
3.75% |
3.77% |
4.01% |
4.14% |
| Efficiency ratio |
69.46% |
64.78% |
64.30% |
64.37% |
65.86% |
| Number of full-time equivalent employees |
3,018 |
3,016 |
3,028 |
3,056 |
3,058 |
| MARKET DATA |
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| Book value/common share |
$ 14.33 |
$ 14.38 |
$ 14.19 |
$ 13.98 |
$ 13.86 |
| Period-end common share mkt value |
15.13 |
11.36 |
16.51 |
17.07 |
19.79 |
| Market as a % of book |
106% |
79% |
116% |
122% |
143% |
| Cash dividends/common share |
$ 0.16 |
$ 0.16 |
$ 0.16 |
$ 0.16 |
$ 0.16 |
| Common stock dividend payout ratio |
57.14% |
55.17% |
59.26% |
64.00% |
64.41% |
| Average basic common shares |
109,249 |
109,245 |
109,138 |
108,769 |
108,807 |
| Average diluted common shares |
109,249 |
109,246 |
109,139 |
108,770 |
108,808 |
| Period end common shares |
109,251 |
109,247 |
109,241 |
108,734 |
108,817 |
| Common shares repurchased |
7 |
10 |
45 |
91 |
9 |
| Common stock market capitalization |
$ 1,652,968 |
$ 1,241,046 |
$ 1,803,569 |
$ 1,856,089 |
$ 2,153,479 |
| ASSET QUALITY (excluding acquired loans) |
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| Gross charge-offs |
$ 18,984 |
$ 20,014 |
$ 20,958 |
$ 22,812 |
$ 27,553 |
| Net charge-offs |
13,763 |
14,604 |
15,641 |
17,018 |
21,654 |
| Allowance for noncovered loan losses |
107,699 |
109,187 |
109,187 |
114,690 |
114,690 |
| Reserve for unfunded lending commitments |
6,373 |
6,360 |
5,799 |
7,202 |
8,849 |
| Nonperforming assets (NPAs) (b) |
81,094 |
90,375 |
99,846 |
112,759 |
123,502 |
| Net charge-offs/average loans ratio (b) |
0.73% |
0.79% |
0.89% |
0.99% |
1.25% |
| Allowance for noncovered loan losses/period-end loans (b) |
1.41% |
1.46% |
1.51% |
1.64% |
1.65% |
| Allowance for credit losses/period-end loans (b) |
1.49% |
1.55% |
1.59% |
1.74% |
1.78% |
| NPAs/loans and other real estate (b) |
1.06% |
1.21% |
1.38% |
1.61% |
1.78% |
| Allowance for noncovered loan losses/nonperforming loans |
166.64% |
160.09% |
150.31% |
138.67% |
109.56% |
| Allowance for credit losses/nonperforming loans |
176.50% |
169.42% |
158.30% |
147.38% |
118.01% |
| CAPITAL & LIQUIDITY |
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| Period-end tangible common equity to assets |
7.86% |
7.75% |
7.79% |
7.50% |
7.59% |
| Average equity to assets |
10.75% |
10.75% |
10.59% |
10.62% |
10.51% |
| Average equity to total loans (c) |
17.40% |
17.55% |
17.36% |
17.14% |
17.15% |
| Average total loans to deposits (c) |
79.12% |
78.18% |
77.05% |
78.14% |
78.00% |
| AVERAGE BALANCES |
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| Assets |
$ 14,623,441 |
$ 14,610,628 |
$ 14,481,208 |
$ 14,270,871 |
$ 14,493,060 |
| Deposits |
11,416,546 |
11,447,682 |
11,464,738 |
11,319,809 |
11,388,423 |
| Loans, excluding acquired loans (c) |
7,520,400 |
7,298,446 |
7,080,109 |
6,963,389 |
6,868,222 |
| Acquired loans, including covered loans (c) |
1,512,123 |
1,651,559 |
1,753,942 |
1,881,540 |
2,014,361 |
| Earning assets |
12,747,868 |
12,878,105 |
12,724,269 |
12,560,913 |
12,466,629 |
| Shareholders' equity |
1,572,061 |
1,570,411 |
1,533,855 |
1,516,227 |
1,523,078 |
| ENDING BALANCES |
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| Assets |
$ 14,441,702 |
$ 14,688,278 |
$ 14,347,557 |
$ 14,466,509 |
$ 14,134,714 |
| Deposits |
11,431,609 |
11,396,121 |
11,340,939 |
11,395,946 |
11,268,006 |
| Loans, excluding acquired loans (c) |
7,635,776 |
7,453,612 |
7,216,015 |
6,989,973 |
6,937,142 |
| Acquired loans, including covered loans (c) |
1,404,644 |
1,604,707 |
1,707,887 |
1,800,525 |
1,953,093 |
| Goodwill |
460,044 |
460,044 |
460,044 |
460,044 |
460,044 |
| Intangible assets |
8,239 |
8,782 |
9,325 |
9,868 |
10,411 |
| Earning assets |
13,011,267 |
12,769,183 |
12,926,211 |
12,659,414 |
12,427,936 |
| Total shareholders' equity |
1,565,953 |
1,570,654 |
1,550,387 |
1,519,957 |
1,507,715 |
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| NOTES: |
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| (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. |
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| (b) - 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. |
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| (c) - Excludes loss share receivable of $205.7 million, $220.5 million, $239.4 million, $266.0 million, and $288.6 million as of December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011, and December 31, 2010, respectively. |
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| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
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| CONSOLIDATED BALANCE SHEETS |
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| (Dollars in thousands) |
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December 31, |
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| (Unaudited, except December 31, 2010, which is derived from the audited financial statements) |
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2011 |
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2010 |
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| ASSETS |
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Cash and due from banks |
$ |
219,256 |
$ |
157,415 |
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Interest bearing-deposits in banks |
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158,063 |
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365,698 |
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Total cash and cash equivalents |
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377,319 |
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523,113 |
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Investment securities |
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Held-to-maturity |
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82,764 |
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59,962 |
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Available-for-sale |
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3,353,553 |
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2,987,040 |
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Other investments |
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140,726 |
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160,752 |
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Loans held for sale |
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30,077 |
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41,340 |
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Noncovered loans: |
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Commercial loans |
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5,107,747 |
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4,527,497 |
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Mortgage loans |
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413,664 |
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403,843 |
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Installment loans |
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1,263,665 |
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1,308,860 |
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Home equity loans |
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743,982 |
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749,378 |
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Credit card loans |
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146,356 |
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149,506 |
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Leases |
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73,530 |
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63,004 |
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Total noncovered loans |
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7,748,944 |
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7,202,088 |
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Allowance for noncovered loan losses |
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(107,699) |
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(114,690) |
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Net noncovered loans |
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7,641,245 |
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7,087,398 |
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Covered loans (includes loss share receivable of $205.7 million and $288.6 million at December 31, 2011 and 2010, respectively) |
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1,497,140 |
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1,976,754 |
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Allowance for covered loan losses |
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(36,417) |
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(13,733) |
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Net covered loans |
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1,460,723 |
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1,963,021 |
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Net loans |
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9,101,968 |
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9,050,419 |
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Premises and equipment, net |
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192,949 |
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197,866 |
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Goodwill |
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460,044 |
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460,044 |
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Intangible assets |
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8,239 |
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10,411 |
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Other real estate covered by FDIC loss share |
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54,505 |
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54,710 |
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Accrued interest receivable and other assets |
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639,558 |
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589,057 |
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Total assets |
$ |
14,441,702 |
$ |
14,134,714 |
| LIABILITIES AND SHAREHOLDERS' EQUITY |
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Deposits: |
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Demand-non-interest bearing |
$ |
3,030,225 |
$ |
2,790,550 |
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Demand-interest bearing |
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1,062,896 |
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868,404 |
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Savings and money market accounts |
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5,595,409 |
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4,811,784 |
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Certificates and other time deposits |
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1,743,079 |
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2,797,268 |
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Total deposits |
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11,431,609 |
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11,268,006 |
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Federal funds purchased and securities sold under agreements to repurchase |
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866,265 |
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777,585 |
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Wholesale borrowings |
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203,462 |
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326,007 |
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Accrued taxes, expenses, and other liabilities |
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374,413 |
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255,401 |
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Total liabilities |
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12,875,749 |
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12,626,999 |
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Shareholders' equity: |
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Preferred stock, without par value: |
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authorized and unissued 7,000,000 shares |
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— |
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— |
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Preferred stock, Series A, without par value: |
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designated 800,000 shares; none outstanding |
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— |
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— |
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Convertible preferred stock, Series B, without par value: |
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designated 220,000 shares; none outstanding |
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— |
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— |
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Common stock, without par value; authorized 300,000,000 shares; issued: 2011 and 2010 - 115,121,731 shares |
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127,937 |
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127,937 |
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Capital surplus |
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479,882 |
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485,567 |
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Accumulated other comprehensive loss |
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(23,887) |
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(26,103) |
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Retained earnings |
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1,131,203 |
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1,080,900 |
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Treasury stock, at cost: 2011 - 5,870,923 shares; 2010 - 6,305,218 shares |
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(149,182) |
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(160,586) |
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Total shareholders' equity |
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1,565,953 |
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1,507,715 |
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|
|
Total liabilities and shareholders' equity |
$ |
14,441,702 |
$ |
14,134,714 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
|
|
|
|
|
|
|
|||
| AVERAGE CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
|||
| (Unaudited) |
|
|
||||||||
| (Dollars in thousands) |
|
Quarterly Periods |
||||||||
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
|
|
2011 |
|
2011 |
|
2011 |
|
2011 |
|
2010 |
| ASSETS |
|
|
|
|
|
|
|
|
|
|
| Cash and due from banks |
$ |
621,899 |
$ |
517,150 |
$ |
588,487 |
$ |
520,602 |
$ |
809,828 |
| Investment securities |
|
|
|
|
|
|
|
|
|
|
| Held-to-maturity |
|
89,166 |
|
85,664 |
|
79,012 |
|
64,212 |
|
64,287 |
| Available-for-sale |
|
3,231,195 |
|
3,429,631 |
|
3,382,943 |
|
3,194,751 |
|
3,012,983 |
| Other investments |
|
160,147 |
|
160,799 |
|
160,811 |
|
160,752 |
|
160,756 |
| Loans held for sale |
|
24,215 |
|
24,524 |
|
18,512 |
|
22,574 |
|
39,174 |
| Noncovered loans: |
|
|
|
|
|
|
|
|
|
|
| Commercial loans |
|
5,049,479 |
|
4,876,034 |
|
4,665,550 |
|
4,553,777 |
|
4,445,691 |
| Mortgage loans |
|
405,329 |
|
399,228 |
|
398,702 |
|
403,758 |
|
403,334 |
| Installment loans |
|
1,267,952 |
|
1,264,868 |
|
1,270,589 |
|
1,294,156 |
|
1,331,130 |
| Home equity loans |
|
744,326 |
|
741,497 |
|
736,117 |
|
741,596 |
|
754,270 |
| Credit card loans |
|
145,560 |
|
144,796 |
|
143,528 |
|
146,526 |
|
146,744 |
| Leases |
|
61,267 |
|
56,909 |
|
58,607 |
|
61,768 |
|
62,115 |
| Total noncovered loans |
|
7,673,913 |
|
7,483,332 |
|
7,273,093 |
|
7,201,581 |
|
7,143,284 |
| Covered loans and loss share receivable |
|
1,569,232 |
|
1,694,155 |
|
1,809,898 |
|
1,917,043 |
|
2,046,145 |
| Total loans |
|
9,243,145 |
|
9,177,487 |
|
9,082,991 |
|
9,118,624 |
|
9,189,429 |
| Less: total allowance for loan losses |
|
141,360 |
|
138,441 |
|
143,721 |
|
134,064 |
|
119,924 |
| Net loans |
|
9,101,785 |
|
9,039,046 |
|
8,939,270 |
|
8,984,560 |
|
9,069,505 |
| Total earning assets |
|
12,747,868 |
|
12,878,105 |
|
12,724,269 |
|
12,560,913 |
|
12,466,629 |
| Premises and equipment, net |
|
193,219 |
|
192,218 |
|
192,584 |
|
195,296 |
|
195,915 |
| Accrued interest receivable and other assets |
|
1,201,815 |
|
1,161,596 |
|
1,119,589 |
|
1,128,124 |
|
1,140,612 |
| TOTAL ASSETS |
$ |
14,623,441 |
$ |
14,610,628 |
$ |
14,481,208 |
$ |
14,270,871 |
$ |
14,493,060 |
| LIABILITIES |
|
|
|
|
|
|
|
|
|
|
| Deposits: |
|
|
|
|
|
|
|
|
|
|
| Demand-non-interest bearing |
$ |
3,013,543 |
$ |
2,988,521 |
$ |
2,998,090 |
$ |
2,874,884 |
$ |
2,816,850 |
| Demand-interest bearing |
|
991,456 |
|
913,252 |
|
824,125 |
|
841,545 |
|
857,960 |
| Savings and money market accounts |
|
5,569,213 |
|
5,446,351 |
|
5,279,353 |
|
4,978,773 |
|
4,710,682 |
| Certificates and other time deposits |
|
1,842,334 |
|
2,099,558 |
|
2,363,170 |
|
2,624,607 |
|
3,002,931 |
| Total deposits |
|
11,416,546 |
|
11,447,682 |
|
11,464,738 |
|
11,319,809 |
|
11,388,423 |
| Federal funds purchased and securities sold under |
|
|
|
|
|
|
|
|
|
|
| agreements to repurchase |
|
999,639 |
|
969,020 |
|
884,244 |
|
848,169 |
|
904,163 |
| Wholesale borrowings |
|
225,116 |
|
320,691 |
|
325,057 |
|
325,296 |
|
368,397 |
| Total funds |
|
12,641,301 |
|
12,737,393 |
|
12,674,039 |
|
12,493,274 |
|
12,660,983 |
| Accrued taxes, expenses and other liabilities |
|
410,079 |
|
302,824 |
|
273,314 |
|
261,370 |
|
308,999 |
| Total liabilities |
|
13,051,380 |
|
13,040,217 |
|
12,947,353 |
|
12,754,644 |
|
12,969,982 |
| SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
| Common stock |
|
127,937 |
|
127,937 |
|
127,937 |
|
127,937 |
|
127,937 |
| Capital surplus |
|
479,257 |
|
477,864 |
|
479,078 |
|
486,907 |
|
485,126 |
| Accumulated other comprehensive loss |
|
(15,198) |
|
(2,211) |
|
(16,402) |
|
(26,703) |
|
(9,867) |
| Retained earnings |
|
1,129,392 |
|
1,116,207 |
|
1,095,270 |
|
1,089,554 |
|
1,080,809 |
| Treasury stock |
|
(149,327) |
|
(149,386) |
|
(152,028) |
|
(161,468) |
|
(160,927) |
| Total shareholders' equity |
|
1,572,061 |
|
1,570,411 |
|
1,533,855 |
|
1,516,227 |
|
1,523,078 |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
14,623,441 |
$ |
14,610,628 |
$ |
14,481,208 |
$ |
14,270,871 |
$ |
14,493,060 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| FIRSTMERIT CORPORATION AND SUBSIDIARIES AVERAGE CONSOLIDATED BALANCE SHEETS |
|
||||||||||||
| Fully Tax-equivalent Interest Rates and Interest Differential |
|
||||||||||||
| (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Three months ended |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2011 |
|
December 31, 2010 |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average |
|
|
|
Average |
|
Average |
|
|
|
Average |
|
|
|
|
Balance |
|
Interest |
|
Rate |
|
Balance |
|
Interest |
|
Rate |
|
| ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and due from banks |
$ |
621,899 |
|
|
|
|
$ |
809,828 |
|
|
|
|
|
| Investment securities and federal funds sold: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| U.S. Treasury securities and U.S. Government agency obligations (taxable) |
|
2,761,042 |
|
19,028 |
|
2.73% |
|
2,579,880 |
|
19,337 |
|
2.97% |
|
| Obligations of states and political subdivisions (tax exempt) |
|
403,405 |
|
5,568 |
|
5.48% |
|
352,330 |
|
5,329 |
|
6.00% |
|
| Other securities and federal funds sold |
|
316,061 |
|
2,406 |
|
3.02% |
|
305,816 |
|
2,158 |
|
2.80% |
|
| Total investment securities and federal funds sold |
|
3,480,508 |
|
27,002 |
|
3.08% |
|
3,238,026 |
|
26,824 |
|
3.29% |
|
| Loans held for sale |
|
24,215 |
|
266 |
|
4.36% |
|
39,174 |
|
470 |
|
4.76% |
|
| Noncovered loans, covered loans and loss share receivable |
|
9,243,145 |
|
107,612 |
|
4.62% |
|
9,189,429 |
|
121,434 |
|
5.24% |
|
| Total earning assets |
|
12,747,868 |
|
134,880 |
|
4.20% |
|
12,466,629 |
|
148,728 |
|
4.73% |
|
| Allowance for loan losses |
|
(141,360) |
|
|
|
|
|
(119,924) |
|
|
|
|
|
| Other assets |
|
1,395,034 |
|
|
|
|
|
1,335,616 |
|
|
|
|
|
| Total assets |
$ |
14,623,441 |
|
|
|
|
$ |
14,492,149 |
|
|
|
|
|
| LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Demand - non-interest bearing |
$ |
3,013,543 |
|
— |
|
— |
$ |
2,816,850 |
|
— |
|
— |
|
| Demand - interest bearing |
|
991,456 |
|
237 |
|
0.09% |
|
857,960 |
|
198 |
|
0.09% |
|
| Savings and money market accounts |
|
5,569,213 |
|
5,999 |
|
0.43% |
|
4,710,682 |
|
8,145 |
|
0.69% |
|
| Certificates and other time deposits |
|
1,842,334 |
|
3,201 |
|
0.69% |
|
3,002,931 |
|
7,209 |
|
0.95% |
|
| Total deposits |
|
11,416,546 |
|
9,437 |
|
0.33% |
|
11,388,423 |
|
15,552 |
|
0.54% |
|
| Securities sold under agreements to repurchase |
|
999,639 |
|
512 |
|
0.20% |
|
904,163 |
|
960 |
|
0.42% |
|
| Wholesale borrowings |
|
225,116 |
|
1,334 |
|
2.35% |
|
368,397 |
|
1,989 |
|
2.14% |
|
| Total interest bearing liabilities |
|
9,627,758 |
|
11,283 |
|
0.46% |
|
9,844,133 |
|
18,501 |
|
0.75% |
|
| Other liabilities |
|
410,079 |
|
|
|
|
|
308,088 |
|
|
|
|
|
| Shareholders' equity |
|
1,572,061 |
|
|
|
|
|
1,523,078 |
|
|
|
|
|
| Total liabilities and shareholders' equity |
$ |
14,623,441 |
|
|
|
|
|
14,492,149 |
|
|
|
|
|
| Net yield on earning assets |
$ |
12,747,868 |
|
123,597 |
|
3.85% |
|
12,466,629 |
|
130,227 |
|
4.14% |
|
| Interest rate spread |
|
|
|
|
|
3.73% |
|
|
|
|
|
3.99% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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 |
|
||||||||||||
| (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended |
|
Twelve months ended |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2011 |
|
December 31, 2010 |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average |
|
|
|
Average |
|
Average |
|
|
|
Average |
|
|
|
|
Balance |
|
Interest |
|
Rate |
|
Balance |
|
Interest |
|
Rate |
|
| ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and due from banks |
$ |
562,133 |
|
|
|
|
$ |
728,723 |
|
|
|
|
|
| Investment securities and federal funds sold: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| U.S. Treasury securities and U.S. Government agency obligations (taxable) |
|
2,869,664 |
|
78,202 |
|
2.73% |
|
2,554,538 |
|
87,019 |
|
3.41% |
|
| Obligations of states and political subdivisions (tax exempt) |
378,834 |
|
21,277 |
|
5.62% |
|
348,832 |
|
21,454 |
|
6.15% |
|
|
| Other securities and federal funds sold |
|
301,786 |
|
8,842 |
|
2.93% |
|
300,700 |
|
8,508 |
|
2.83% |
|
| Total investment securities and federal funds sold |
|
3,550,284 |
|
108,321 |
|
3.05% |
|
3,204,070 |
|
116,981 |
|
3.65% |
|
| Loans held for sale |
|
22,467 |
|
1,045 |
|
4.65% |
|
23,612 |
|
1,162 |
|
4.92% |
|
| Noncovered loans, covered loans and loss share receivable |
|
9,155,973 |
|
438,579 |
|
4.79% |
|
8,529,303 |
|
433,308 |
|
5.08% |
|
| Total earning assets |
|
12,728,724 |
|
547,945 |
|
4.30% |
|
11,756,985 |
|
551,451 |
|
4.69% |
|
| Allowance for loan losses |
|
(139,414) |
|
|
|
|
|
(116,118) |
|
|
|
|
|
| Other assets |
|
1,343,887 |
|
|
|
|
|
1,154,761 |
|
|
|
|
|
| Total assets |
$ |
14,495,330 |
|
|
|
|
$ |
13,524,351 |
|
|
|
|
|
| LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Demand - non-interest bearing |
$ |
2,969,137 |
|
— |
|
— |
$ |
2,550,849 |
|
— |
|
— |
|
| Demand - interest bearing |
|
893,062 |
|
816 |
|
0.09% |
|
794,497 |
|
751 |
|
0.09% |
|
| Savings and money market accounts |
|
5,320,392 |
|
28,171 |
|
0.53% |
|
4,303,815 |
|
31,912 |
|
0.74% |
|
| Certificates and other time deposits |
|
2,229,910 |
|
20,003 |
|
0.90% |
|
2,801,270 |
|
32,713 |
|
1.17% |
|
| Total deposits |
|
11,412,501 |
|
48,990 |
|
0.43% |
|
10,450,431 |
|
65,376 |
|
0.63% |
|
| Securities sold under agreements to repurchase |
|
925,803 |
|
3,344 |
|
0.36% |
|
907,015 |
|
4,477 |
|
0.49% |
|
| Wholesale borrowings |
|
298,835 |
|
6,295 |
|
2.11% |
|
510,799 |
|
13,998 |
|
2.74% |
|
| Total interest bearing liabilities |
|
9,668,002 |
|
58,629 |
|
0.61% |
|
9,317,396 |
|
83,851 |
|
0.90% |
|
| Other liabilities |
|
309,838 |
|
|
|
|
|
340,485 |
|
|
|
|
|
| Shareholders' equity |
|
1,548,353 |
|
|
|
|
|
1,315,621 |
|
|
|
|
|
| Total liabilities and shareholders' equity |
$ |
14,495,330 |
|
|
|
|
$ |
13,524,351 |
|
|
|
|
|
| Net yield on earning assets |
$ |
12,728,724 |
|
489,316 |
|
3.84% |
$ |
11,756,985 |
|
467,600 |
|
3.98% |
|
| Interest rate spread |
|
|
|
|
|
3.70% |
|
|
|
|
|
3.79% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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) |
|
|
|
|
|
|
|
|
|||
| (Dollars and shares in thousands, except per share data) |
|
Quarters ended |
|
Twelve months ended |
|||||||
|
|
|
December 31, |
|
December 31, |
|||||||
|
|
|
|
|
|
2011 |
|
2010 |
|
2011 |
|
2010 |
| Interest income: |
|
|
|
|
|
|
|
|
|||
|
|
Loans and loans held for sale |
$ |
107,516 |
$ |
121,651 |
$ |
438,393 |
$ |
433,763 |
||
|
|
Investment securities |
|
|
|
|
|
|
|
|
||
|
|
|
Taxable |
|
21,434 |
|
21,495 |
|
87,044 |
|
95,527 |
|
|
|
|
Tax-exempt |
|
3,298 |
|
3,219 |
|
12,819 |
|
13,080 |
|
|
|
|
Total investment securities interest |
|
24,732 |
|
24,714 |
|
99,863 |
|
108,607 |
|
|
|
|
|
Total interest income |
|
132,248 |
|
146,365 |
|
538,256 |
|
542,370 |
| Interest expense: |
|
|
|
|
|
|
|
|
|||
|
|
Deposits: |
|
|
|
|
|
|
|
|
||
|
|
|
Demand-interest bearing |
|
237 |
|
198 |
|
816 |
|
751 |
|
|
|
|
Savings and money market accounts |
|
5,998 |
|
8,145 |
|
28,171 |
|
31,912 |
|
|
|
|
Certificates and other time deposits |
|
3,201 |
|
7,209 |
|
20,003 |
|
32,713 |
|
|
|
Securities sold under agreements to repurchase |
|
512 |
|
960 |
|
3,344 |
|
4,477 |
||
|
|
Wholesale borrowings |
|
1,334 |
|
1,989 |
|
6,295 |
|
13,998 |
||
|
|
|
Total interest expense |
|
11,282 |
|
18,501 |
|
58,629 |
|
83,851 |
|
|
|
|
Net interest income |
|
120,966 |
|
127,864 |
|
479,627 |
|
458,519 |
|
| Provision for noncovered loan losses |
|
12,275 |
|
19,816 |
|
54,035 |
|
83,783 |
|||
| Provision for covered loan losses |
|
2,773 |
|
3,572 |
|
20,353 |
|
4,432 |
|||
|
|
|
Net interest income after provision for loan losses |
|
105,918 |
|
104,476 |
|
405,239 |
|
370,304 |
|
| Other income: |
|
|
|
|
|
|
|
|
|||
|
|
Trust department income |
|
5,413 |
|
5,627 |
|
22,396 |
|
21,951 |
||
|
|
Service charges on deposits |
|
15,622 |
|
15,938 |
|
64,082 |
|
65,900 |
||
|
|
Credit card fees |
|
10,182 |
|
12,678 |
|
49,539 |
|
49,010 |
||
|
|
ATM and other service fees |
|
3,920 |
|
2,910 |
|
13,701 |
|
11,259 |
||
|
|
Bank owned life insurance income |
|
3,381 |
|
3,192 |
|
14,820 |
|
14,949 |
||
|
|
Investment services and insurance |
|
1,844 |
|
2,300 |
|
8,228 |
|
9,451 |
||
|
|
Investment securities gains, net |
|
5,790 |
|
146 |
|
11,081 |
|
855 |
||
|
|
Loan sales and servicing income |
|
5,875 |
|
9,221 |
|
14,533 |
|
19,440 |
||
|
|
Gain on George Washington acquisition |
|
— |
|
— |
|
— |
|
1,041 |
||
|
|
Other operating income |
|
7,710 |
|
2,299 |
|
26,377 |
|
18,700 |
||
|
|
|
Total other income |
|
59,737 |
|
54,311 |
|
224,757 |
|
212,556 |
|
| Other expenses: |
|
|
|
|
|
|
|
|
|||
|
|
Salaries, wages, pension and employee benefits |
|
62,546 |
|
62,331 |
|
240,362 |
|
221,316 |
||
|
|
Net occupancy expense |
|
7,270 |
|
9,236 |
|
32,414 |
|
32,665 |
||
|
|
Equipment expense |
|
7,234 |
|
7,549 |
|
27,959 |
|
27,664 |
||
|
|
Stationery, supplies and postage |
|
2,719 |
|
3,183 |
|
10,691 |
|
11,438 |
||
|
|
Bankcard, loan processing and other costs |
|
7,948 |
|
7,810 |
|
32,226 |
|
31,572 |
||
|
|
Professional services |
|
5,763 |
|
7,731 |
|
23,229 |
|
29,357 |
||
|
|
Amortization of intangibles |
|
543 |
|
1,006 |
|
2,172 |
|
2,914 |
||
|
|
FDIC expense |
|
5,119 |
|
4,342 |
|
17,306 |
|
17,790 |
||
|
|
Other operating expense |
|
24,732 |
|
19,264 |
|
77,986 |
|
68,144 |
||
|
|
|
Total other expenses |
|
123,874 |
|
122,452 |
|
464,345 |
|
442,860 |
|
|
|
|
|
Income before income tax expense |
|
41,781 |
|
36,335 |
|
165,651 |
|
140,000 |
| Income tax expense |
|
11,285 |
|
9,305 |
|
46,093 |
|
37,091 |
|||
|
|
|
|
Net income |
$ |
30,496 |
$ |
27,030 |
$ |
119,558 |
$ |
102,909 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other comprehensive income, net of taxes |
|
|
|
|
|
|
|
|
|||
|
|
Changes in unrealized securities' holding gains and losses |
$ |
1,317 |
$ |
(21,560) |
$ |
26,205 |
$ |
(555) |
||
|
|
Reclassification for realized securities' gains |
|
(3,764) |
|
(95) |
|
(7,203) |
|
(556) |
||
|
|
Change in minimum pension liability |
|
(16,786) |
|
467 |
|
(16,786) |
|
467 |
||
|
|
Total other comprehensive gain (loss), net of taxes |
|
(19,233) |
|
(21,188) |
|
2,216 |
|
(644) |
||
|
|
Comprehensive income |
$ |
11,263 |
$ |
5,842 |
$ |
121,774 |
$ |
102,265 |
||
|
|
Net income applicable to common shares |
$ |
30,496 |
$ |
27,030 |
$ |
119,558 |
$ |
102,909 |
||
|
|
Net income used in diluted EPS calculation |
$ |
30,496 |
$ |
27,030 |
$ |
119,558 |
$ |
102,909 |
||
| Weighted average number of common shares outstanding - basic |
|
109,249 |
|
108,807 |
|
109,102 |
|
101,163 |
|||
| Weighted average number of common shares outstanding - diluted |
|
109,249 |
|
108,808 |
|
109,102 |
|
101,165 |
|||
| Basic earnings per common share |
$ |
0.28 |
$ |
0.25 |
$ |
1.10 |
$ |
1.02 |
|||
| Diluted earnings per common share |
$ |
0.28 |
$ |
0.25 |
$ |
1.10 |
$ |
1.02 |
|||
| Dividend per common share |
$ |
0.16 |
$ |
0.16 |
$ |
0.64 |
$ |
0.64 |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
|
|
||||||||
| CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME---LINKED QUARTERS |
|
|
||||||||
| (Unaudited) |
|
|
|
|
|
|
|
|
|
|
| (Dollars and shares in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly Results |
||||||||
|
|
|
2011 |
|
2011 |
|
2011 |
|
2011 |
|
2010 |
|
|
|
4th Qtr |
|
3rd Qtr |
|
2nd Qtr |
|
1st Qtr |
|
4th Qtr |
| Loans and loans held for sale |
$ |
107,516 |
$ |
108,417 |
$ |
107,904 |
$ |
114,555 |
$ |
121,651 |
| Investment securities |
|
24,732 |
|
25,138 |
|
25,313 |
|
24,680 |
|
24,714 |
| Total interest income |
|
132,248 |
|
133,555 |
|
133,217 |
|
139,235 |
|
146,365 |
| Interest on deposits: |
|
|
|
|
|
|
|
|
|
|
| Demand-interest bearing |
|
237 |
|
218 |
|
177 |
|
184 |
|
198 |
| Savings and money market accounts |
|
5,998 |
|
6,929 |
|
7,398 |
|
7,845 |
|
8,145 |
| Certificates and other time deposits |
|
3,201 |
|
4,370 |
|
5,606 |
|
6,827 |
|
7,209 |
| Securities sold under agreements to repurchase |
|
512 |
|
977 |
|
940 |
|
915 |
|
960 |
| Wholesale borrowings |
|
1,334 |
|
1,669 |
|
1,653 |
|
1,640 |
|
1,989 |
| Total interest expense |
|
11,282 |
|
14,163 |
|
15,774 |
|
17,411 |
|
18,501 |
| Net interest income |
|
120,966 |
|
119,392 |
|
117,443 |
|
121,824 |
|
127,864 |
| Provision for noncovered loan losses |
|
12,275 |
|
14,604 |
|
10,138 |
|
17,018 |
|
19,816 |
| Provision for covered loan losses |
|
2,773 |
|
4,768 |
|
7,481 |
|
5,331 |
|
3,572 |
| Net interest income after provision for loan losses |
|
105,918 |
|
100,020 |
|
99,824 |
|
99,475 |
|
104,476 |
| Other income: |
|
|
|
|
|
|
|
|
|
|
| Trust department income |
|
5,413 |
|
5,607 |
|
5,863 |
|
5,514 |
|
5,627 |
| Service charges on deposits |
|
15,622 |
|
17,838 |
|
15,712 |
|
14,910 |
|
15,938 |
| Credit card fees |
|
10,182 |
|
13,640 |
|
13,510 |
|
12,207 |
|
12,678 |
| ATM and other service fees |
|
3,920 |
|
3,801 |
|
3,063 |
|
2,917 |
|
2,910 |
| Bank owned life insurance income |
|
3,381 |
|
3,182 |
|
3,015 |
|
5,241 |
|
3,192 |
| Investment services and insurance |
|
1,844 |
|
1,965 |
|
1,972 |
|
2,447 |
|
2,300 |
| Investment securities gains, net |
|
5,790 |
|
4,402 |
|
889 |
|
— |
|
146 |
| Loan sales and servicing income |
|
5,875 |
|
1,036 |
|
2,609 |
|
5,012 |
|
9,221 |
| Other operating income |
|
7,710 |
|
9,301 |
|
4,858 |
|
4,508 |
|
2,299 |
| Total other income |
|
59,737 |
|
60,772 |
|
51,491 |
|
52,756 |
|
54,311 |
| Other expenses: |
|
|
|
|
|
|
|
|
|
|
| Salaries, wages, pension and employee benefits |
|
62,546 |
|
61,232 |
|
56,713 |
|
59,871 |
|
62,331 |
| Net occupancy expense |
|
7,270 |
|
8,464 |
|
8,086 |
|
8,594 |
|
9,236 |
| Equipment expense |
|
7,234 |
|
7,073 |
|
6,816 |
|
6,836 |
|
7,549 |
| Stationery, supplies and postage |
|
2,719 |
|
2,517 |
|
2,750 |
|
2,705 |
|
3,183 |
| Bankcard, loan processing and other costs |
|
7,948 |
|
8,449 |
|
8,266 |
|
7,562 |
|
7,810 |
| Professional services |
|
5,763 |
|
5,732 |
|
5,940 |
|
5,793 |
|
7,731 |
| Amortization of intangibles |
|
543 |
|
543 |
|
543 |
|
543 |
|
1,006 |
| FDIC expense |
|
5,119 |
|
3,240 |
|
4,581 |
|
4,366 |
|
4,342 |
| Other operating expense |
|
24,732 |
|
18,707 |
|
16,373 |
|
18,175 |
|
19,264 |
| Total other expenses |
|
123,874 |
|
115,957 |
|
110,068 |
|
114,445 |
|
122,452 |
| Income before income tax expense |
|
41,781 |
|
44,835 |
|
41,247 |
|
37,786 |
|
36,335 |
| Income taxes |
|
11,285 |
|
13,098 |
|
11,484 |
|
10,226 |
|
9,305 |
| Net income |
$ |
30,496 |
$ |
31,737 |
$ |
29,763 |
$ |
27,560 |
$ |
27,030 |
| Other comprehensive income (loss), net of taxes |
|
(19,233) |
|
4,491 |
|
16,620 |
|
338 |
|
(21,188) |
| Comprehensive income |
$ |
11,263 |
$ |
36,228 |
$ |
46,383 |
$ |
27,898 |
$ |
5,842 |
| Net income applicable to common shares |
$ |
30,496 |
$ |
31,737 |
$ |
29,763 |
$ |
27,560 |
$ |
27,030 |
| Adjusted net income used in diluted EPS calculation |
$ |
30,496 |
$ |
31,737 |
$ |
29,763 |
$ |
27,560 |
$ |
27,030 |
| Weighted-average common shares outstanding - basic |
|
109,249 |
|
109,245 |
|
109,138 |
|
108,769 |
|
108,807 |
| Weighted-average common shares outstanding - diluted |
|
109,249 |
|
109,246 |
|
109,139 |
|
108,770 |
|
108,808 |
| Basic net income per common share |
$ |
0.28 |
$ |
0.29 |
$ |
0.27 |
$ |
0.25 |
$ |
0.25 |
| Diluted net income per common share |
$ |
0.28 |
$ |
0.29 |
$ |
0.27 |
$ |
0.25 |
$ |
0.25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
||||||||||||
| ASSET QUALITY INFORMATION (Excluding Acquired Assets) |
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Unaudited, except December 31, 2010 annual period |
|
|
|
|
|
|
|
|
|
|
|
|
| which is derived from the audited financial statements) |
|
|
|
|
|
|
|
|
|
|
|
|
| (Dollars in thousands, except ratios) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly Periods |
|
Annual Period |
||||||||
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
December 31, |
| Allowance for Credit Losses |
|
2011 |
|
2011 |
|
2011 |
|
2011 |
|
2010 |
|
2010 |
| Allowance for noncovered loan losses, beginning of period |
$ |
109,187 |
$ |
109,187 |
$ |
114,690 |
$ |
114,690 |
$ |
116,528 |
$ |
115,092 |
| Provision for noncovered loan losses |
|
12,275 |
|
14,604 |
|
10,138 |
|
17,018 |
|
19,816 |
|
83,783 |
| Charge-offs |
|
18,984 |
|
20,014 |
|
20,958 |
|
22,812 |
|
27,553 |
|
104,532 |
| Recoveries |
|
5,221 |
|
5,410 |
|
5,317 |
|
5,794 |
|
5,899 |
|
20,347 |
| Net charge-offs |
|
13,763 |
|
14,604 |
|
15,641 |
|
17,018 |
|
21,654 |
|
84,185 |
| Allowance for noncovered loan losses, end of period |
$ |
107,699 |
$ |
109,187 |
$ |
109,187 |
$ |
114,690 |
$ |
114,690 |
$ |
114,690 |
| Reserve for unfunded lending commitments, |
|
|
|
|
|
|
|
|
|
|
|
|
| beginning of period |
$ |
6,360 |
$ |
5,799 |
$ |
7,202 |
$ |
8,849 |
$ |
7,864 |
$ |
5,751 |
| Provision for / (relief of) credit losses |
|
13 |
|
561 |
|
(1,403) |
|
(1,647) |
|
985 |
|
3,098 |
| Reserve for unfunded lending commitments, |
|
|
|
|
|
|
|
|
|
|
|
|
| end of period |
$ |
6,373 |
$ |
6,360 |
$ |
5,799 |
$ |
7,202 |
$ |
8,849 |
$ |
8,849 |
| Allowance for Credit Losses |
$ |
114,072 |
$ |
115,547 |
$ |
114,986 |
$ |
121,892 |
$ |
123,539 |
$ |
123,539 |
| Ratios (a) |
|
|
|
|
|
|
|
|
|
|
|
|
| Provision for loan losses as a % of average loans |
|
0.65% |
|
0.79% |
|
0.57% |
|
0.99% |
|
1.14% |
|
1.23% |
| Provision for credit losses as a % of average loans |
|
0.00% |
|
0.03% |
|
-0.08% |
|
-0.10% |
|
0.06% |
|
0.05% |
| Net charge-offs as a % of average loans |
|
0.73% |
|
0.79% |
|
0.89% |
|
0.99% |
|
1.25% |
|
1.23% |
| Allowance for loan losses as a % of period-end loans |
|
1.41% |
|
1.46% |
|
1.51% |
|
1.64% |
|
1.65% |
|
1.65% |
| Allowance for credit losses as a % of period-end loans |
|
1.49% |
|
1.55% |
|
1.59% |
|
1.74% |
|
1.78% |
|
1.78% |
| Allowance for loan losses as a % of nonperforming loans |
|
166.64% |
|
160.09% |
|
150.31% |
|
138.67% |
|
109.56% |
|
109.56% |
| Allowance for credit losses as a % of nonperforming loans |
|
176.50% |
|
169.42% |
|
158.30% |
|
147.38% |
|
118.01% |
|
118.01% |
| Asset Quality (a) |
|
|
|
|
|
|
|
|
|
|
|
|
| Impaired loans: |
|
|
|
|
|
|
|
|
|
|
|
|
| Nonaccrual |
$ |
55,755 |
$ |
59,928 |
$ |
63,688 |
$ |
71,246 |
$ |
89,828 |
$ |
89,828 |
| Other nonperforming loans: |
|
|
|
|
|
|
|
|
|
|
|
|
| Nonaccrual |
|
8,876 |
|
8,275 |
|
8,951 |
|
11,460 |
|
14,859 |
|
14,859 |
| Total nonperforming loans |
|
64,631 |
|
68,203 |
|
72,639 |
|
82,706 |
|
104,687 |
|
104,687 |
| Other real estate ("ORE") |
|
16,463 |
|
22,172 |
|
27,207 |
|
30,053 |
|
18,815 |
|
18,815 |
| Total nonperforming assets ("NPAs") |
$ |
81,094 |
$ |
90,375 |
$ |
99,846 |
$ |
112,759 |
$ |
123,502 |
$ |
123,502 |
| NPAs as % of period-end loans + ORE |
|
1.06% |
|
1.21% |
|
1.38% |
|
1.61% |
|
1.78% |
|
1.78% |
| Past due 90 days or more & accruing interest |
$ |
8,866 |
$ |
6,268 |
$ |
10,424 |
$ |
5,652 |
$ |
22,017 |
$ |
22,017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (a) Excludes acquired loans and loss share receivable with a period end balance of $1.6 billion, $1.6 billion, $1.7 billion and $2.1 billion, and $2.3 billion and ORE covered by an FDIC loss share with a period end balance of $54.5 million, $61.9 million, $58.5 million, $58.7 million, $54.7 million at December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011, and December 2010, respectively, which, as required by current accounting guidance, were recorded at fair value on the date of acquisition. |
||||||||||||
| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
||||||||||
| NONINTEREST INCOME AND NONINTEREST EXPENSE DETAIL |
|
|
||||||||
| (Unaudited) |
|
|
|
|
|
|
|
|
|
|
| (Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 |
|
2011 |
|
2011 |
|
2011 |
|
2010 |
| QUARTERLY OTHER INCOME DETAIL |
|
4th Qtr |
|
3rd Qtr |
|
2nd Qtr |
|
1st Qtr |
|
4th Qtr |
| Trust department income |
$ |
5,413 |
$ |
5,607 |
$ |
5,863 |
$ |
5,514 |
$ |
5,627 |
| Service charges on deposits |
|
15,622 |
|
17,838 |
|
15,712 |
|
14,910 |
|
15,938 |
| Credit card fees |
|
10,182 |
|
13,640 |
|
13,510 |
|
12,207 |
|
12,678 |
| ATM and other service fees |
|
3,920 |
|
3,801 |
|
3,063 |
|
2,917 |
|
2,910 |
| Bank owned life insurance income |
|
3,381 |
|
3,182 |
|
3,015 |
|
5,241 |
|
3,192 |
| Investment services and insurance |
|
1,844 |
|
1,965 |
|
1,972 |
|
2,447 |
|
2,300 |
| Investment securities gains, net |
|
5,790 |
|
4,402 |
|
889 |
|
0 |
|
146 |
| Loan sales and servicing income |
|
5,875 |
|
1,036 |
|
2,609 |
|
5,012 |
|
9,221 |
| Other operating income |
|
7,710 |
|
9,301 |
|
4,858 |
|
4,508 |
|
2,299 |
| Total Other Income |
$ |
59,737 |
$ |
60,772 |
$ |
51,491 |
$ |
52,756 |
$ |
54,311 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 |
|
2011 |
|
2011 |
|
2011 |
|
2010 |
| QUARTERLY OTHER EXPENSES DETAIL |
|
4th Qtr |
|
3rd Qtr |
|
2nd Qtr |
|
1st Qtr |
|
4th Qtr |
| Salaries, wages, pension and employee benefits |
$ |
62,546 |
$ |
61,232 |
$ |
56,713 |
$ |
59,871 |
$ |
62,331 |
| Net occupancy expense |
|
7,270 |
|
8,464 |
|
8,086 |
|
8,594 |
|
9,236 |
| Equipment expense |
|
7,234 |
|
7,073 |
|
6,816 |
|
6,836 |
|
7,549 |
| Taxes, other than federal income taxes |
|
1,389 |
|
1,507 |
|
922 |
|
1,960 |
|
2,021 |
| Stationery, supplies and postage |
|
2,719 |
|
2,517 |
|
2,750 |
|
2,705 |
|
3,183 |
| Bankcard, loan processing and other costs |
|
7,948 |
|
8,449 |
|
8,266 |
|
7,562 |
|
7,810 |
| Advertising |
|
2,275 |
|
2,391 |
|
2,287 |
|
2,384 |
|
3,094 |
| Professional services |
|
5,763 |
|
5,732 |
|
5,940 |
|
5,793 |
|
7,731 |
| Telephone |
|
1,525 |
|
1,570 |
|
1,462 |
|
1,486 |
|
1,579 |
| Amortization of intangibles |
|
543 |
|
543 |
|
543 |
|
543 |
|
1,006 |
| FDIC expense |
|
5,119 |
|
3,240 |
|
4,581 |
|
4,366 |
|
4,342 |
| Other operating expense |
|
19,543 |
|
13,239 |
|
11,702 |
|
12,345 |
|
12,570 |
| Total Other Expenses |
$ |
123,874 |
$ |
115,957 |
$ |
110,068 |
$ |
114,445 |
$ |
122,452 |
| FIRSTMERIT CORPORATION AND SUBSIDIARIES |
|
|
|
|
|
|
||
| ALLOWANCE FOR NONCOVERED LOAN LOSSES - Net Charge-off Detail |
|
|
||||||
| (Unaudited) |
|
|
|
|
|
|
|
|
| (Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Quarters ended |
|
Twelve months ended |
||||
|
|
|
December 31, |
|
December 31, |
||||
|
|
|
2011 |
|
2010 |
|
2011 |
|
2010 |
| Allowance for noncovered loan losses - beginning of period |
$ |
109,187 |
$ |
116,528 |
$ |
114,690 |
$ |
115,092 |
| Loans charged off: |
|
|
|
|
|
|
|
|
| Commercial |
|
7,418 |
|
13,225 |
|
31,943 |
|
39,766 |
| Mortgage |
|
1,033 |
|
962 |
|
4,819 |
|
5,156 |
| Installment |
|
5,635 |
|
8,665 |
|
25,839 |
|
34,054 |
| Home equity |
|
2,491 |
|
1,158 |
|
8,691 |
|
7,912 |
| Credit cards |
|
1,711 |
|
2,497 |
|
7,846 |
|
13,577 |
| Leases |
|
0 |
|
204 |
|
778 |
|
896 |
| Overdrafts |
|
696 |
|
842 |
|
2,852 |
|
3,171 |
| Total |
|
18,984 |
|
27,553 |
|
82,768 |
|
104,532 |
| Recoveries: |
|
|
|
|
|
|
|
|
| Commercial |
|
850 |
|
647 |
|
2,703 |
|
1,952 |
| Mortgage |
|
29 |
|
62 |
|
221 |
|
263 |
| Installment |
|
2,890 |
|
4,003 |
|
13,639 |
|
13,047 |
| Home equity |
|
730 |
|
417 |
|
1,985 |
|
1,599 |
| Credit cards |
|
475 |
|
518 |
|
2,264 |
|
2,199 |
| Manufactured housing |
|
56 |
|
34 |
|
119 |
|
156 |
| Leases |
|
2 |
|
27 |
|
37 |
|
267 |
| Overdrafts |
|
189 |
|
191 |
|
774 |
|
864 |
| Total |
|
5,221 |
|
5,899 |
|
21,742 |
|
20,347 |
| Net charge-offs |
|
13,763 |
|
21,654 |
|
61,026 |
|
84,185 |
| Provision for noncovered loan losses |
|
12,275 |
|
19,816 |
|
54,035 |
|
83,783 |
| Allowance for noncovered loan losses - end of period |
$ |
107,699 |
$ |
114,690 |
$ |
107,699 |
$ |
114,690 |
| Average loans (a) |
$ |
7,520,400 |
$ |
6,868,222 |
$ |
7,217,349 |
$ |
6,818,962 |
| Ratio to average loans (a): |
|
|
|
|
|
|
|
|
| (Annualized) net charge-offs |
|
0.73% |
|
1.25% |
|
0.85% |
|
1.23% |
| Provision for loan losses |
|
0.65% |
|
1.14% |
|
0.75% |
|
1.23% |
| Loans, period-end (a) |
$ |
7,635,776 |
$ |
6,937,142 |
|
7,635,776 |
$ |
6,937,142 |
| Allowance for credit losses (a): |
|
|
|
|
|
|
|
|
| As a multiple of (annualized) net charge-offs |
|
114,072 |
$ |
123,539 |
$ |
114,072 |
$ |
123,539 |
| Allowance for loan losses (a): |
|
2.09 |
|
1.44 |
|
1.87 |
|
1.47 |
| As a percent of period-end loans |
|
|
|
|
|
|
|
|
| As a multiple of (annualized) net noncovered charge-offs |
|
1.41% |
|
1.65% |
|
1.41% |
|
1.65% |
|
|
|
1.97 |
|
1.34 |
|
1.76 |
|
1.36 |
| (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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