Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - FIRSTMERIT CORP /OH/ | d246875d8k.htm |
| EX-99.2 - EX-99.2 - FIRSTMERIT CORP /OH/ | d246875dex992.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
FirstMerit Corporation
Analysts: Thomas O’Malley/Investor Relations Officer
Phone: 330.384.7109
Media Contact: Robert Townsend/Media Relations Officer
Phone: 330.384.7075
FirstMerit Corporation Reports Third Quarter 2011 EPS of $0.29 Per Share
Quarterly Highlights include:
| • | 50th consecutive quarter of profitability |
| • | Solid linked-quarter credit trends supported by $9.4 million, or 9.44%, decline in non-performing assets and $1.0 million, or 6.63%, decline in net charge-offs to 0.79% of average loans from prior quarter |
| • | Average commercial loan growth of $ 210.5 million, or 4.51%, from prior quarter |
| • | Average core deposit growth of $246.6 million, or 2.71%, from prior quarter |
| • | Strong tangible common equity ratio at 7.75% |
Akron, Ohio (October 25, 2011) - FirstMerit Corporation (Nasdaq: FMER) reported third quarter 2011 net income of $31.7 million, or $0.29 per diluted share. This compares with $29.8 million, or $0.27 per diluted share, for the second quarter of 2011 and $29.0 million, or $0.27 per diluted share, for the third quarter 2010.
Returns on average common equity (“ROE”) and average assets (“ROA”) for the third quarter 2011 were 8.02% and 0.86%, respectively, compared with 7.78% and 0.82% for the second quarter of 2011 and 7.60% and 0.79% for the third quarter 2010.
“Our third quarter results reflect exceptional performance in challenging times,” said Paul G. Greig, Chairman, President and CEO of FirstMerit Corporation. “Commercial loan production was strong throughout our franchise, increasing 61% over the year-ago quarter. The drivers of our results are intact: sustained risk management processes, industry-leading customer service and sufficient liquidity to be an active lender. Our tangible common equity ratio of 7.75% at quarter-end supports a robust balance sheet.
“I’m pleased with another quarter of significant commercial loan growth across our footprint. We are winning market share and growing organically in each of our key markets,” Mr. Greig added. “Even as the economy continues to struggle, we are building shareholder value through our dedication to sound banking principles.”
Net interest margin was 3.74% for the third quarter of 2011 compared with 3.77% for the second quarter of 2011 and 3.96% for the third quarter of 2010. The decline in net interest margin in both periods was due to continued pressure on earning asset yields which migrated lower in the quarter. Lower yields on new loan originations and reinvestment rates on security cash flows below historical averages are attributable to the current interest rate environment. The Corporation again this quarter lowered average deposit costs compared
FirstMerit Corporation Reports Third Quarter 2011 EPS Results
to the prior and year-ago quarters primarily due to its success in increasing the composition of core deposits, which offset additional pressure to the net interest margin.
Average loans, not including covered loans, during the third quarter of 2011 increased $210.2 million, or 2.89%, compared with the second quarter of 2011 and $394.7 million, or 5.57%, compared with the third quarter of 2010. The average loan growth during the third quarter of 2011 was driven entirely by commercial loans, which increased $ 210.5 million, or 4.51%, compared with the second quarter of 2011 and increased $539.4 million, or 12.44%, compared with the third quarter of 2010. Average covered loan balances including the indemnification asset were $1.7 billion, $1.8 billion, and $2.2 billion at September 30, 2011, June 30, 2011, and September 30, 2010, respectively. The covered loan portfolio will continue to decline, through payoffs, charge-offs, termination or expiration of loss share coverage, unless the Corporation acquires additional loans subject to loss share agreements in the future.
Average deposits during the third quarter of 2011 decreased $17.1 million, or 0.15%, compared with the second quarter of 2011 and increased $21.9 million, or 0.19%, compared with the third quarter of 2010. During the third quarter of 2011, the Corporation increased its average core deposits, which excludes time deposits, by $246.6 million, or 2.71%, compared with the second quarter of 2011, and $1.3 billion, or 15.53%, compared with the third quarter of 2010. Average time deposits decreased $263.6 million, or 11.16%, from the second quarter of 2011 and decreased $1.2 billion, or 37.03%, from the third quarter of 2010.
Average investments during the third quarter of 2011 increased $53.3 million, or 1.47%, compared with the second quarter of 2011 and increased $405.1 million, or 12.38%, over the third quarter of 2010.
Net interest income on a fully tax-equivalent (“FTE”) basis was $121.5 million in the third quarter 2011 compared with $119.5 million in the second quarter of 2011 and $125.5 million in the third quarter of 2010. Compared with the second quarter of 2011, average earning assets increased $153.8 million, or 1.21%, and increased $298.6 million, or 2.37%, compared to the third quarter of 2010.
Noninterest income, net of securities transactions, for the third quarter of 2011 was $56.4 million, an increase of $5.8 million, or 11.40%, from the second quarter of 2011 and an increase of $1.3 million, or 2.35%, from the third quarter of 2010.
Other income was $60.8 million for the third quarter of 2011, an increase of $9.3 million, or 18.06% from the second quarter of 2011 and an increase of $5.7 million or 10.34% from the third quarter of 2010. Activity in the quarter included net realized gains on the sale of investment securities of $4.4 million, offset by $3.3 million of MSR impairment which is reported as part of loan sales and servicing income. Service charges on deposits increased $2.1 million and ATM and other service fees increased $0.7 million, compared to the second quarter of 2011 due to recent product introductions and pricing. Included in other operating income is an increase of $2.1 million in the fair value of interest rate lock commitments from an increase in the mortgage pipeline and $2.7 million from gains on covered loans paid in full.
Other income, net of securities gains, as a percentage of net revenue for the third quarter of 2011 was 31.69% compared with 29.75% for second quarter of 2011 and 30.50% for the third quarter of 2010. 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 2011 was $116.0 million, an increase of $5.9 million, or 5.35%, from the second quarter of 2011 and a decrease of $4.7 million, or 3.91%, from the third quarter of 2010. Increases in noninterest expense compared with the second quarter of 2011 included a $4.5 million
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FirstMerit Corporation Reports Third Quarter 2011 EPS Results
increase in salaries, wages, pension and employee benefits and a $1.5 million increase in other operating expense related to OREO and loan workout expense.
During the third quarter of 2011, the Corporation reported an efficiency ratio of 64.87%, compared with 64.39% for the second quarter of 2011 and 66.26% for the third quarter of 2010.
Net charge-offs, excluding acquired loans, totaled $14.6 million, or 0.79% of average loans, excluding acquired loans, in the third quarter of 2011 compared with $15.6 million, or 0.89% of average loans, in the second quarter of 2011 and $19.9 million, or 1.17% of average loans, in the third quarter of 2010. Provision for credit losses approximated net charge-offs in the third quarter of 2011 as compared to the prior linked quarter in which provision was less than net charge-offs by $5.5 million and third quarter of 2010 in which provision was less than net charge-offs by $1.8 million.
Nonperforming assets totaled $90.4 million at September 30, 2011, a decrease of $9.5 million compared with June 30, 2011 and a decrease of $24.9 million compared with September 30, 2010. Nonperforming assets at September 30, 2011 represented 1.21% of period-end loans plus other real estate, excluding acquired loans, compared with 1.38% at June 30, 2011 and 1.70% at September 30, 2010.
The allowance for noncovered loan losses, totaled $109.2 million at September 30, 2011 and June 30, 2011 and $116.5 million at September 30, 2010. At September 30, 2011, the allowance for noncovered loan losses was 1.46% of period-end loans compared with 1.51% at June 30, 2011, and 1.72% at September 30, 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 1.55% of period-end loans, excluding acquired loans, at September 30, 2011, compared with 1.59% at June 30, 2011 and 1.84% at September 30, 2010. The allowance for credit losses to nonperforming loans was 169.42% at September 30, 2011, compared with 158.30% at June 30, 2011 and 118.49% at September 30, 2010.
The Corporation’s total assets inclusive of intangible assets at September 30, 2011 were $14.7 billion, an increase of $340.7 million, or 2.37%, compared with June 30, 2011 and an increase of $334.2 million, or 2.33%, compared with September 30, 2010.
Total deposits were $11.4 billion at September 30, 2011, an increase of $55.2 million, or 0.49%, from June 30, 2011 and an increase of $124.7 million, or 1.11%, from September 30, 2010. Core deposits totaled $9.5 billion at September 30, 2011, an increase of $360.6 million, or 3.97%, from June 30, 2011 and an increase of $1.4 billion, or 17.23%, from September 30, 2010.
Shareholders’ equity was $1.6 billion at September 30, 2011, compared with $1.6 billion at June 30, 2011 and $1.5 billion at September 30, 2010. The Corporation maintained a strong capital position as tangible common equity to assets was 7.75% at September 30, 2011, compared with 7.79% and 7.54% at June 30, 2011 and September 30, 2010, respectively. The common dividend per share paid in the third quarter 2011 was $0.16.
Acquisitions and Integration
The three 2010 acquisitions of First Bank, George Washington and Midwest 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. As of June 30, 2011,
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FirstMerit Corporation Reports Third Quarter 2011 EPS Results
the one-year measurement period expired for all three acquisitions. During the one-year measurement period, material adjustments to acquisition date estimated fair values were recorded in the period in which the acquisition occurred and, as a result, previously reported results may have changed. 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.
Third Quarter 2011 Conference Call
FirstMerit Corporation senior management will host an earnings conference call today at 11:00 a.m. (Eastern Time) to provide an overview of third quarter 2011 results and highlights. To participate in the conference call, please dial (888) 693-3477 ten minutes before start time and provide the reservation number: 14854484. A replay of the conference call will be available at approximately 2:00 p.m. (Eastern Time) on October 25, 2011 through November 8, 2011 by dialing (855) 859-2056, and entering the PIN: 14854484. 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 $14.7 billion as of September 30, 2011 and 207 banking locations and 222 ATM locations 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, 2011 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, 2011 and will adjust amounts preliminarily reported, if necessary.
Forward-Looking Statements
This release contains forward-looking statements relating to present or future trends or factors affecting the banking industry, and specifically the financial condition and results of operations, including without limitation, statements relating to the earnings outlook of the Corporation, as well as its operations, markets and products. Actual results could differ materially from those indicated. Among the important factors that could cause results to differ materially are interest rate changes, continued softening in the economy, which could materially impact credit quality trends and the ability to generate loans, changes in the mix of the Corporation’s business, competitive pressures, changes in accounting, tax or regulatory practices or requirements and those risk factors detailed in the Corporation’s periodic reports filed with the Securities and Exchange Commission. The Corporation undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this release.
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FirstMerit Corporation Reports Third Quarter 2011 EPS Results
FIRSTMERIT CORPORATION AND SUBSIDIARIES
Consolidated Financial Highlights
| (Unaudited) | Quarters | |||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| 2011 3rd Qtr |
2011 2nd Qtr |
2011 1st Qtr |
2010 4th Qtr |
2010 3rd Qtr |
||||||||||||||||
| EARNINGS |
||||||||||||||||||||
| Net interest income FTE (a) |
$ | 121,537 | $ | 119,484 | $ | 123,940 | $ | 129,971 | $ | 125,514 | ||||||||||
| Provision for noncovered loan losses |
14,604 | 10,138 | 17,018 | 19,816 | 18,108 | |||||||||||||||
| Provision for covered loan losses |
4,768 | 7,481 | 5,331 | 3,572 | 593 | |||||||||||||||
| Other income |
60,772 | 51,491 | 52,756 | 54,311 | 55,135 | |||||||||||||||
| Other expenses |
115,957 | 110,068 | 114,445 | 122,452 | 120,670 | |||||||||||||||
| FTE adjustment (a) |
2,145 | 2,041 | 2,116 | 2,107 | 2,021 | |||||||||||||||
| Net income |
31,737 | 29,763 | 27,560 | 27,030 | 28,996 | |||||||||||||||
| Diluted EPS |
0.29 | 0.27 | 0.25 | 0.25 | 0.27 | |||||||||||||||
| PERFORMANCE RATIOS |
||||||||||||||||||||
| Return on average assets (ROA) |
0.86 | % | 0.82 | % | 0.78 | % | 0.74 | % | 0.79 | % | ||||||||||
| Return on average common equity (ROE) |
8.02 | % | 7.78 | % | 7.37 | % | 7.04 | % | 7.60 | % | ||||||||||
| Net interest margin FTE (a) |
3.74 | % | 3.77 | % | 4.00 | % | 4.14 | % | 3.96 | % | ||||||||||
| Efficiency ratio |
64.87 | % | 64.39 | % | 64.46 | % | 65.95 | % | 66.26 | % | ||||||||||
| Number of full-time equivalent employees |
3,016 | 3,028 | 3,056 | 3,058 | 3,093 | |||||||||||||||
| MARKET DATA |
||||||||||||||||||||
| Book value/common share |
$ | 14.38 | $ | 14.19 | $ | 13.98 | $ | 13.86 | $ | 13.95 | ||||||||||
| Period-end common share mkt value |
11.36 | 16.51 | 17.07 | 19.79 | 18.32 | |||||||||||||||
| Market as a % of book |
79 | % | 116 | % | 122 | % | 143 | % | 131 | % | ||||||||||
| Cash dividends/common share |
$ | 0.16 | $ | 0.16 | $ | 0.16 | $ | 0.16 | $ | 0.16 | ||||||||||
| Common stock dividend payout ratio |
55.17 | % | 59.26 | % | 64.00 | % | 64.41 | % | 60.03 | % | ||||||||||
| Average basic common shares |
109,245 | 109,138 | 108,769 | 108,807 | 108,793 | |||||||||||||||
| Average diluted common shares |
109,246 | 109,139 | 108,770 | 108,808 | 108,794 | |||||||||||||||
| Period end common shares |
109,247 | 109,241 | 108,734 | 108,817 | 108,803 | |||||||||||||||
| Common shares repurchased |
10 | 45 | 91 | 9 | 4 | |||||||||||||||
| Common stock market capitalization |
$ | 1,241,046 | $ | 1,803,569 | $ | 1,856,089 | $ | 2,153,479 | $ | 1,993,276 | ||||||||||
| ASSET QUALITY (excluding acquired loans) |
||||||||||||||||||||
| Gross charge-offs |
$ | 20,014 | $ | 20,958 | $ | 22,812 | $ | 27,553 | $ | 25,817 | ||||||||||
| Net charge-offs |
14,604 | 15,641 | 17,018 | 21,654 | 19,923 | |||||||||||||||
| Allowance for loan losses noncovered |
109,187 | 109,187 | 114,690 | 114,690 | 116,528 | |||||||||||||||
| Reserve for unfunded lending commitments |
6,360 | 5,799 | 7,202 | 8,849 | 7,864 | |||||||||||||||
| Nonperforming assets (NPAs) (b) |
90,375 | 99,846 | 112,759 | 123,502 | 115,267 | |||||||||||||||
| Net charge-offs/average loans ratio (b) |
0.79 | % | 0.89 | % | 0.99 | % | 1.25 | % | 1.17 | % | ||||||||||
| Allowance for loan losses noncovered/period-end loans (b) |
1.46 | % | 1.51 | % | 1.64 | % | 1.65 | % | 1.72 | % | ||||||||||
| Allowance for credit losses/period-end loans (b) |
1.55 | % | 1.59 | % | 1.74 | % | 1.78 | % | 1.84 | % | ||||||||||
| NPAs/loans and other real estate (b) |
1.21 | % | 1.38 | % | 1.61 | % | 1.78 | % | 1.70 | % | ||||||||||
| Allowance for loan losses noncovered/nonperforming loans |
160.09 | % | 150.31 | % | 138.67 | % | 109.56 | % | 111.00 | % | ||||||||||
| Allowance for credit losses/nonperforming loans |
169.42 | % | 158.30 | % | 147.38 | % | 118.01 | % | 118.49 | % | ||||||||||
| CAPITAL & LIQUIDITY |
||||||||||||||||||||
| Period-end tangible common equity to assets |
7.75 | % | 7.79 | % | 7.50 | % | 7.59 | % | 7.54 | % | ||||||||||
| Average equity to assets |
10.75 | % | 10.59 | % | 10.62 | % | 10.51 | % | 10.38 | % | ||||||||||
| Average equity to total loans (c) |
17.55 | % | 17.36 | % | 17.14 | % | 17.15 | % | 16.93 | % | ||||||||||
| Average total loans to deposits (c) |
78.18 | % | 77.05 | % | 78.14 | % | 78.00 | % | 78.25 | % | ||||||||||
| AVERAGE BALANCES |
||||||||||||||||||||
| Assets |
$ | 14,610,628 | $ | 14,481,208 | $ | 14,270,871 | $ | 14,493,060 | $ | 14,587,126 | ||||||||||
| Deposits |
11,447,682 | 11,464,738 | 11,319,809 | 11,388,423 | 11,425,740 | |||||||||||||||
| Loans, excluding acquired loans (c) |
7,298,446 | 7,080,109 | 6,963,389 | 6,868,222 | 6,781,123 | |||||||||||||||
| Acquired loans, including covered loans (c) |
1,651,559 | 1,753,942 | 1,881,540 | 2,014,361 | 2,160,075 | |||||||||||||||
| Earning assets |
12,878,105 | 12,724,269 | 12,560,913 | 12,466,629 | 12,579,486 | |||||||||||||||
| Shareholders’ equity |
1,570,411 | 1,533,855 | 1,516,227 | 1,523,078 | 1,513,527 | |||||||||||||||
| ENDING BALANCES |
||||||||||||||||||||
| Assets |
$ | 14,688,278 | $ | 14,347,557 | $ | 14,466,509 | $ | 14,134,714 | $ | 14,354,086 | ||||||||||
| Deposits |
11,396,121 | 11,340,939 | 11,395,946 | 11,268,006 | 11,271,416 | |||||||||||||||
| Loans, excluding acquired loans (c) |
7,453,612 | 7,216,015 | 6,989,973 | 6,937,142 | 6,776,098 | |||||||||||||||
| Acquired loans, including covered loans (c) |
1,604,707 | 1,707,887 | 1,800,525 | 1,953,093 | 2,117,505 | |||||||||||||||
| Goodwill |
460,044 | 460,044 | 460,044 | 460,044 | 460,044 | |||||||||||||||
| Intangible assets |
8,782 | 9,325 | 9,868 | 10,411 | 11,416 | |||||||||||||||
| Earning assets |
12,769,183 | 12,926,211 | 12,659,414 | 12,427,936 | 12,507,979 | |||||||||||||||
| Total shareholders’ equity |
1,570,654 | 1,550,387 | 1,519,957 | 1,507,715 | 1,517,892 | |||||||||||||||
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) | - 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. |
| (c) | - Excludes loss share receivable of $220.5 million, $239.4 million, $266.0 million, $288.6 million and $342.3 million as of September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010, and September 30, 2010, respectively. |
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FirstMerit Corporation Reports Third Quarter 2011 EPS Results
FIRSTMERIT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| (Dollars in thousands) | September 30, 2011 |
December 31, 2010 |
September 30, 2010 |
|||||||||
| (Unaudited, except December 31, 2010, which is derived from the audited financial statements) | ||||||||||||
| ASSETS |
||||||||||||
| Cash and due from banks |
$ | 202,886 | $ | 157,415 | $ | 180,990 | ||||||
| Interest bearing-deposits in banks |
116,059 | 365,698 | 469,779 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total cash and cash equivalents |
318,945 | 523,113 | 650,769 | |||||||||
| Investment securities |
||||||||||||
| Held-to-maturity |
92,214 | 59,962 | 61,818 | |||||||||
| Available-for-sale |
3,198,046 | 2,987,040 | 3,027,436 | |||||||||
| Other investments |
160,793 | 160,752 | 160,753 | |||||||||
| Loans held for sale |
39,340 | 41,340 | 25,542 | |||||||||
| Noncovered loans: |
||||||||||||
| Commercial loans |
5,018,857 | 4,527,497 | 4,344,784 | |||||||||
| Mortgage loans |
397,309 | 403,843 | 414,728 | |||||||||
| Installment loans |
1,271,327 | 1,308,860 | 1,349,964 | |||||||||
| Home equity loans |
743,377 | 749,378 | 760,816 | |||||||||
| Credit card loans |
142,710 | 149,506 | 144,734 | |||||||||
| Leases |
57,992 | 63,004 | 64,009 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total noncovered loans |
7,631,572 | 7,202,088 | 7,079,035 | |||||||||
| Allowance for noncovered loan losses |
(109,187 | ) | (114,690 | ) | (116,528 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Net noncovered loans |
7,522,385 | 7,087,398 | 6,962,507 | |||||||||
| Covered loans (includes loss share receivable of $220.5 million, $288.6 million and $342.3 million at September 30, 2011, December 31, 2010 and September 30, 2010, respectively.) |
1,647,218 | 1,976,754 | 2,156,832 | |||||||||
| Allowance for covered loan losses |
(34,603 | ) | (13,733 | ) | (3,437 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Net covered loans |
1,612,615 | 1,963,021 | 2,153,395 | |||||||||
| Net loans |
9,135,000 | 9,050,419 | 9,115,902 | |||||||||
| Premises and equipment, net |
193,075 | 197,866 | 194,757 | |||||||||
| Goodwill |
460,044 | 460,044 | 460,044 | |||||||||
| Intangible assets |
8,782 | 10,411 | 11,416 | |||||||||
| Other real estate covered by FDIC loss share |
61,890 | 54,710 | 53,526 | |||||||||
| Accrued interest receivable and other assets |
1,020,149 | 589,057 | 592,123 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total assets |
$ | 14,688,278 | $ | 14,134,714 | $ | 14,354,086 | ||||||
|
|
|
|
|
|
|
|||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||
| Deposits: |
||||||||||||
| Demand-non-interest bearing |
$ | 2,971,555 | $ | 2,790,550 | $ | 2,658,458 | ||||||
| Demand-interest bearing |
967,574 | 868,404 | 847,284 | |||||||||
| Savings and money market accounts |
5,513,472 | 4,811,784 | 4,557,702 | |||||||||
| Certificates and other time deposits |
1,943,520 | 2,797,268 | 3,207,972 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total deposits |
11,396,121 | 11,268,006 | 11,271,416 | |||||||||
|
|
|
|
|
|
|
|||||||
| Federal funds purchased and securities sold under agreements to repurchase |
987,030 | 777,585 | 897,755 | |||||||||
| Wholesale borrowings |
248,006 | 326,007 | 391,914 | |||||||||
| Accrued taxes, expenses, and other liabilities |
486,467 | 255,401 | 275,109 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total liabilities |
13,117,624 | 12,626,999 | 12,836,194 | |||||||||
|
|
|
|
|
|
|
|||||||
| Shareholders’ equity |
||||||||||||
| Common stock, without par value: authorized 300,000,000 shares; issued 115,121,731, 115,121,731 and 115,121,731 at September 30, 2011, December 31, 2010 and September 30, 2010, respectively |
127,937 | 127,937 | 127,937 | |||||||||
| Capital surplus |
478,738 | 485,567 | 484,770 | |||||||||
| Accumulated other comprehensive loss |
(4,654 | ) | (26,103 | ) | (4,915 | ) | ||||||
| Retained earnings |
1,118,027 | 1,080,900 | 1,071,147 | |||||||||
| Treasury stock, at cost, 5,874,748, 6,305,218 and 6,318,452 shares at September 30, 2011, December 31, 2010 and September 30, 2010, respectively |
(149,394 | ) | (160,586 | ) | (161,047 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Total shareholders’ equity |
1,570,654 | 1,507,715 | 1,517,892 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total liabilities and shareholders’ equity |
$ | 14,688,278 | $ | 14,134,714 | $ | 14,354,086 | ||||||
|
|
|
|
|
|
|
|||||||
Page 6
FirstMerit Corporation Reports Third Quarter 2011 EPS Results
FIRSTMERIT CORPORATION AND SUBSIDIARIES
AVERAGE CONSOLIDATED BALANCE SHEETS
| Quarterly Periods | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (Dollars in thousands) | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2011 | 2011 | 2011 | 2010 | 2010 | ||||||||||||||||
| ASSETS |
||||||||||||||||||||
| Cash and cash equivalents |
$ | 517,150 | $ | 588,487 | $ | 520,602 | $ | 809,828 | $ | 821,713 | ||||||||||
| Investment securities |
||||||||||||||||||||
| Held-to-maturity |
85,664 | 79,012 | 64,212 | 64,287 | 63,364 | |||||||||||||||
| Available-for-sale |
3,429,631 | 3,382,943 | 3,194,751 | 3,012,983 | 3,049,056 | |||||||||||||||
| Other investments |
160,799 | 160,811 | 160,752 | 160,756 | 158,591 | |||||||||||||||
| Loans held for sale |
24,524 | 18,512 | 22,574 | 39,174 | 21,659 | |||||||||||||||
| Noncovered loans: |
||||||||||||||||||||
| Commercial loans |
4,876,034 | 4,665,550 | 4,553,777 | 4,445,691 | 4,336,631 | |||||||||||||||
| Mortgage loans |
399,228 | 398,702 | 403,758 | 403,334 | 421,087 | |||||||||||||||
| Installment loans |
1,264,868 | 1,270,589 | 1,294,156 | 1,331,130 | 1,363,248 | |||||||||||||||
| Home equity loans |
741,497 | 736,117 | 741,596 | 754,270 | 762,626 | |||||||||||||||
| Credit card loans |
144,796 | 143,528 | 146,526 | 146,744 | 146,863 | |||||||||||||||
| Leases |
56,909 | 58,607 | 61,768 | 62,115 | 58,223 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total noncovered loans |
7,483,332 | 7,273,093 | 7,201,581 | 7,143,284 | 7,088,678 | |||||||||||||||
| Covered loans and loss share receivable |
1,694,155 | 1,809,898 | 1,917,043 | 2,046,145 | 2,198,138 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total loans |
9,177,487 | 9,082,991 | 9,118,624 | 9,189,429 | 9,286,816 | |||||||||||||||
| Less: total allowance for loan losses |
138,441 | 143,721 | 134,064 | 119,924 | 113,062 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net loans |
9,039,046 | 8,939,270 | 8,984,560 | 9,069,505 | 9,173,754 | |||||||||||||||
| Total earning assets |
12,878,105 | 12,724,269 | 12,560,913 | 12,466,629 | 12,579,486 | |||||||||||||||
| Premises and equipment, net |
192,218 | 192,584 | 195,296 | 195,915 | 172,712 | |||||||||||||||
| Accrued interest receivable and other assets |
1,161,596 | 1,119,589 | 1,128,124 | 1,140,612 | 1,126,277 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| TOTAL ASSETS |
$ | 14,610,628 | $ | 14,481,208 | $ | 14,270,871 | $ | 14,493,060 | $ | 14,587,126 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| LIABILITIES |
||||||||||||||||||||
| Deposits: |
||||||||||||||||||||
| Demand-non-interest bearing |
$ | 2,988,521 | $ | 2,998,090 | $ | 2,874,884 | $ | 2,816,850 | $ | 2,730,483 | ||||||||||
| Demand-interest bearing |
913,252 | 824,125 | 841,545 | 857,960 | 858,168 | |||||||||||||||
| Savings and money market accounts |
5,446,351 | 5,279,353 | 4,978,773 | 4,710,682 | 4,502,779 | |||||||||||||||
| Certificates and other time deposits |
2,099,558 | 2,363,170 | 2,624,607 | 3,002,931 | 3,334,311 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total deposits |
11,447,682 | 11,464,738 | 11,319,809 | 11,388,423 | 11,425,741 | |||||||||||||||
| Federal funds purchased and securities sold under agreements to repurchase |
969,020 | 884,244 | 848,169 | 904,163 | 928,607 | |||||||||||||||
| Wholesale borrowings |
320,691 | 325,057 | 325,296 | 368,397 | 443,890 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total funds |
12,737,393 | 12,674,039 | 12,493,274 | 12,660,983 | 12,798,238 | |||||||||||||||
| Accrued taxes, expenses and other liabilities |
302,824 | 273,314 | 261,370 | 308,999 | 275,361 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total liabilities |
13,040,217 | 12,947,353 | 12,754,644 | 12,969,982 | 13,073,599 | |||||||||||||||
| SHAREHOLDERS’ EQUITY |
||||||||||||||||||||
| Common stock |
127,937 | 127,937 | 127,937 | 127,937 | 127,937 | |||||||||||||||
| Capital surplus |
477,864 | 479,078 | 486,907 | 485,126 | 484,197 | |||||||||||||||
| Accumulated other comprehensive loss |
(2,211 | ) | (16,402 | ) | (26,703 | ) | (9,867 | ) | (2,332 | ) | ||||||||||
| Retained earnings |
1,116,207 | 1,095,270 | 1,089,554 | 1,080,809 | 1,065,001 | |||||||||||||||
| Treasury stock |
(149,386 | ) | (152,028 | ) | (161,468 | ) | (160,927 | ) | (161,276 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total shareholders’ equity |
1,570,411 | 1,533,855 | 1,516,227 | 1,523,078 | 1,513,527 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ | 14,610,628 | $ | 14,481,208 | $ | 14,270,871 | $ | 14,493,060 | $ | 14,587,126 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Page 7
FirstMerit Corporation Reports Third Quarter 2011 EPS Results
AVERAGE CONSOLIDATED BALANCE SHEETS
Fully Tax-equivalent Interest Rates and Interest Differential
(Unaudited)
(Dollars in thousands)
| Three months ended | Year ended | Three months ended | ||||||||||||||||||||||||||||||||||
| September 30, 2011 | December 31, 2010 | September 30, 2010 | ||||||||||||||||||||||||||||||||||
| Average | Average | Average | Average | Average | Average | |||||||||||||||||||||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||||||||||||
| ASSETS |
||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents |
$ | 517,150 | $ | 728,723 | $ | 821,713 | ||||||||||||||||||||||||||||||
| Investment securities and federal funds sold: |
||||||||||||||||||||||||||||||||||||
| U.S. Treasury securities and U.S. Government agency obligations (taxable) |
2,974,656 | 19,864 | 2.65 | % | 2,554,538 | 87,019 | 3.41 | % | 2,609,406 | 21,364 | 3.25 | % | ||||||||||||||||||||||||
| Obligations of states and political subdivisions (tax exempt) |
385,055 | 5,022 | 5.17 | % | 348,832 | 20,505 | 5.88 | % | 346,380 | 4,848 | 5.55 | % | ||||||||||||||||||||||||
| Other securities and federal funds sold |
316,383 | 2,084 | 2.61 | % | 300,700 | 8,508 | 2.83 | % | 315,225 | 2,197 | 2.77 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total investment securities and federal funds sold |
3,676,094 | 26,970 | 2.91 | % | 3,204,070 | 116,032 | 3.62 | % | 3,271,011 | 28,409 | 3.45 | % | ||||||||||||||||||||||||
| Loans held for sale |
24,524 | 284 | 4.59 | % | 23,612 | 1,162 | 4.92 | % | 21,659 | 269 | 4.93 | % | ||||||||||||||||||||||||
| Noncovered loans, covered loans and loss share receivable |
9,177,487 | 108,444 | 4.69 | % | 8,529,303 | 433,308 | 5.08 | % | 9,286,816 | 118,680 | 5.07 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total earning assets |
12,878,105 | 135,698 | 4.18 | % | 11,756,985 | 550,502 | 4.68 | % | 12,579,486 | 147,358 | 4.65 | % | ||||||||||||||||||||||||
| Total allowance for loan losses |
(138,441 | ) | (116,118 | ) | (113,062 | ) | ||||||||||||||||||||||||||||||
| Other assets |
1,353,814 | 1,154,761 | 1,298,989 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total assets |
$ | 14,610,628 | $ | 13,524,351 | $ | 14,587,126 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||||||||||||||||||||||||||
| Deposits: |
||||||||||||||||||||||||||||||||||||
| Demand - non-interest bearing |
$ | 2,988,521 | — | — | $ | 2,550,849 | — | — | $ | 2,730,483 | — | — | ||||||||||||||||||||||||
| Demand - interest bearing |
913,252 | 218 | 0.09 | % | 794,497 | 751 | 0.09 | % | 858,168 | 223 | 0.10 | % | ||||||||||||||||||||||||
| Savings and money market accounts |
5,446,351 | 6,929 | 0.50 | % | 4,303,815 | 31,912 | 0.74 | % | 4,502,779 | 8,212 | 0.72 | % | ||||||||||||||||||||||||
| Certificates and other time deposits |
2,099,558 | 4,370 | 0.83 | % | 2,801,270 | 32,713 | 1.17 | % | 3,334,311 | 9,702 | 1.15 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total deposits |
11,447,682 | 11,517 | 0.40 | % | 10,450,431 | 65,376 | 0.63 | % | 11,425,741 | 18,137 | 0.63 | % | ||||||||||||||||||||||||
| Securities sold under agreements to repurchase |
969,020 | 977 | 0.40 | % | 907,015 | 4,477 | 0.49 | % | 928,607 | 984 | 0.42 | % | ||||||||||||||||||||||||
| Wholesale borrowings |
320,691 | 1,669 | 2.06 | % | 510,799 | 13,998 | 2.74 | % | 443,890 | 2,725 | 2.44 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total interest bearing liabilities |
9,748,872 | 14,163 | 0.58 | % | 9,317,396 | 83,851 | 0.90 | % | 10,067,755 | 21,846 | 0.86 | % | ||||||||||||||||||||||||
| Other liabilities |
302,824 | 340,485 | 275,361 | |||||||||||||||||||||||||||||||||
| Shareholders’ equity |
1,570,411 | 1,315,621 | 1,513,527 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity |
$ | 14,610,628 | $ | 13,524,351 | $ | 14,587,126 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Net yield on earning assets |
$ | 12,878,105 | 121,535 | 3.74 | % | $ | 11,756,985 | 466,651 | 3.97 | % | $ | 12,579,486 | 125,512 | 3.96 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Interest rate spread |
3.60 | % | 3.78 | % | 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.
Page 8
FirstMerit Corporation Reports Third Quarter 2011 EPS Results
FIRSTMERIT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
| (Unaudited) | Quarters
ended September 30, |
Nine months
ended September 30, |
||||||||||||||
| (Dollars and shares in thousands, except per share data) | ||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Interest income: |
||||||||||||||||
| Interest and fees on loans, including held for sale |
$ | 108,417 | $ | 118,543 | $ | 330,877 | $ | 312,112 | ||||||||
| Investment securities |
||||||||||||||||
| Taxable |
21,949 | 23,560 | 65,610 | 74,032 | ||||||||||||
| Tax-exempt |
3,189 | 3,234 | 9,521 | 9,861 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total investment securities interest |
25,138 | 26,794 | 75,131 | 83,893 | ||||||||||||
| Total interest income |
133,555 | 145,337 | 406,008 | 396,005 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Interest expense: |
||||||||||||||||
| Interest on deposits: |
||||||||||||||||
| Demand-interest bearing |
218 | 252 | 579 | 553 | ||||||||||||
| Savings and money market accounts |
6,929 | 8,294 | 22,172 | 23,768 | ||||||||||||
| Certificates and other time deposits |
4,370 | 9,588 | 16,803 | 25,504 | ||||||||||||
| Interest on securities sold under agreements to repurchase |
977 | 986 | 2,832 | 3,517 | ||||||||||||
| Interest on wholesale borrowings |
1,669 | 2,724 | 4,963 | 12,009 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total interest expense |
14,163 | 21,844 | 47,349 | 65,351 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net interest income |
119,392 | 123,493 | 358,659 | 330,654 | ||||||||||||
| Provision for noncovered loan losses |
14,604 | 18,108 | 41,760 | 63,967 | ||||||||||||
| Provision for covered loan losses |
4,768 | 593 | 17,580 | 860 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net interest income after provision for loan losses |
100,020 | 104,792 | 299,319 | 265,827 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Other income: |
||||||||||||||||
| Trust department income |
5,607 | 5,469 | 16,983 | 16,324 | ||||||||||||
| Service charges on deposits |
17,838 | 16,859 | 48,460 | 49,962 | ||||||||||||
| Credit card fees |
13,640 | 12,532 | 39,357 | 36,332 | ||||||||||||
| ATM and other service fees |
3,801 | 2,996 | 9,781 | 8,349 | ||||||||||||
| Bank owned life insurance income |
3,182 | 3,219 | 11,439 | 11,757 | ||||||||||||
| Investment services and insurance |
1,965 | 2,688 | 6,384 | 7,151 | ||||||||||||
| Investment securities gains, net |
4,402 | 58 | 5,291 | 709 | ||||||||||||
| Loan sales and servicing income |
1,036 | 4,006 | 8,657 | 10,218 | ||||||||||||
| Gain on George Washington acquisition |
— | — | — | 1,041 | ||||||||||||
| Other operating income |
9,301 | 7,308 | 18,667 | 16,401 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total other income |
60,772 | 55,135 | 165,019 | 158,244 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Other expenses: |
||||||||||||||||
| Salaries, wages, pension and employee benefits |
61,232 | 58,930 | 177,815 | 158,985 | ||||||||||||
| Net occupancy expense |
8,464 | 8,608 | 25,144 | 23,428 | ||||||||||||
| Equipment expense |
7,073 | 7,330 | 20,725 | 20,115 | ||||||||||||
| Stationery, supplies and postage |
2,517 | 2,865 | 7,972 | 8,254 | ||||||||||||
| Bankcard, loan processing and other costs |
8,449 | 8,281 | 24,278 | 23,762 | ||||||||||||
| Professional services |
5,732 | 8,544 | 17,466 | 21,626 | ||||||||||||
| Amortization of intangibles |
543 | 1,006 | 1,629 | 1,909 | ||||||||||||
| FDIC expense |
3,240 | 5,267 | 12,187 | 13,448 | ||||||||||||
| Other operating expense |
18,707 | 19,839 | 53,254 | 48,879 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total other expenses |
115,957 | 120,670 | 340,470 | 320,406 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income before income tax expense |
44,835 | 39,257 | 123,868 | 103,665 | ||||||||||||
| Income tax expense |
13,098 | 10,261 | 34,808 | 27,786 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
$ | 31,737 | $ | 28,996 | $ | 89,060 | $ | 75,879 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Other comprehensive income, net of taxes |
||||||||||||||||
| Unrealized securities’ holding gains (losses), net of taxes |
$ | 7,353 | $ | (360 | ) | $ | 24,889 | $ | 21,005 | |||||||
| Less: reclassification adjustment for securities’ gain realized in income, net of taxes |
2,862 | 38 | 3,440 | 461 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total other comprehensive gains (losses), net of taxes |
4,491 | (398 | ) | 21,449 | 20,544 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Comprehensive income |
$ | 36,228 | $ | 28,598 | $ | 110,509 | $ | 96,423 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income applicable to common shares |
$ | 31,737 | $ | 28,996 | $ | 89,060 | $ | 75,879 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income used in diluted EPS calculation |
$ | 31,737 | $ | 28,996 | $ | 89,060 | $ | 75,879 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Weighted average number of common shares outstanding - basic |
109,245 | 108,793 | 109,052 | 98,588 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Weighted average number of common shares outstanding - diluted |
109,246 | 108,794 | 109,053 | 98,590 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Basic earnings per share |
$ | 0.29 | $ | 0.27 | $ | 0.82 | $ | 0.77 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted earnings per share |
$ | 0.29 | $ | 0.27 | $ | 0.82 | $ | 0.77 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Dividend per share |
$ | 0.16 | $ | 0.16 | $ | 0.48 | $ | 0.48 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Page 9
FirstMerit Corporation Reports Third Quarter 2011 EPS Results
FIRSTMERIT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME—LINKED QUARTERS
| Quarterly Results | ||||||||||||||||||||
| (Unaudited) | 2011 | 2011 | 2011 | 2010 | 2010 | |||||||||||||||
| (Dollars and shares in thousands, except per share data) | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | |||||||||||||||
| Interest and fees on loans, including held for sale |
$ | 108,417 | $ | 107,904 | $ | 114,555 | $ | 121,651 | $ | 118,543 | ||||||||||
| Interest and dividends - securities and federal funds sold |
25,138 | 25,313 | 24,680 | 24,714 | 26,794 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest income |
133,555 | 133,217 | 139,235 | 146,365 | 145,337 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Interest on deposits: |
||||||||||||||||||||
| Demand-interest bearing |
218 | 177 | 184 | 198 | 252 | |||||||||||||||
| Savings and money market accounts |
6,929 | 7,398 | 7,845 | 8,145 | 8,294 | |||||||||||||||
| Certificates and other time deposits |
4,370 | 5,606 | 6,827 | 7,209 | 9,588 | |||||||||||||||
| Securities sold under agreements to repurchase |
977 | 940 | 915 | 960 | 986 | |||||||||||||||
| Wholesale borrowings |
1,669 | 1,653 | 1,640 | 1,989 | 2,724 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest expense |
14,163 | 15,774 | 17,411 | 18,501 | 21,844 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net interest income |
119,392 | 117,443 | 121,824 | 127,864 | 123,493 | |||||||||||||||
| Provision for noncovered loan losses |
14,604 | 10,138 | 17,018 | 19,816 | 18,108 | |||||||||||||||
| Provision for covered loan losses |
4,768 | 7,481 | 5,331 | 3,572 | 593 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net interest income after provision for loan losses |
100,020 | 99,824 | 99,475 | 104,476 | 104,792 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Other income: |
||||||||||||||||||||
| Trust department income |
5,607 | 5,863 | 5,514 | 5,627 | 5,469 | |||||||||||||||
| Service charges on deposits |
17,838 | 15,712 | 14,910 | 15,938 | 16,859 | |||||||||||||||
| Credit card fees |
13,640 | 13,510 | 12,207 | 12,678 | 12,532 | |||||||||||||||
| ATM and other service fees |
3,801 | 3,063 | 2,917 | 2,910 | 2,996 | |||||||||||||||
| Bank owned life insurance income |
3,182 | 3,015 | 5,241 | 3,192 | 3,219 | |||||||||||||||
| Investment services and insurance |
1,965 | 1,972 | 2,447 | 2,300 | 2,688 | |||||||||||||||
| Investment securities gains, net |
4,402 | 889 | — | 146 | 58 | |||||||||||||||
| Loan sales and servicing income |
1,036 | 2,609 | 5,012 | 9,221 | 4,006 | |||||||||||||||
| Other operating income |
9,301 | 4,858 | 4,508 | 2,299 | 7,308 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total other income |
60,772 | 51,491 | 52,756 | 54,311 | 55,135 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Other expenses: |
||||||||||||||||||||
| Salaries, wages, pension and employee benefits |
61,232 | 56,713 | 59,871 | 62,331 | 58,930 | |||||||||||||||
| Net occupancy expense |
8,464 | 8,086 | 8,594 | 9,236 | 8,608 | |||||||||||||||
| Equipment expense |
7,073 | 6,816 | 6,836 | 7,549 | 7,330 | |||||||||||||||
| Stationery, supplies and postage |
2,517 | 2,750 | 2,705 | 3,183 | 2,865 | |||||||||||||||
| Bankcard, loan processing and other costs |
8,449 | 8,266 | 7,562 | 7,810 | 8,281 | |||||||||||||||
| Professional services |
5,732 | 5,940 | 5,793 | 7,731 | 8,544 | |||||||||||||||
| Amortization of intangibles |
543 | 543 | 543 | 1,006 | 1,006 | |||||||||||||||
| FDIC expense |
3,240 | 4,581 | 4,366 | 4,342 | 5,267 | |||||||||||||||
| Other operating expense |
18,707 | 16,373 | 18,175 | 19,264 | 19,839 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total other expenses |
115,957 | 110,068 | 114,445 | 122,452 | 120,670 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Income before income tax expense |
44,835 | 41,247 | 37,786 | 36,335 | 39,257 | |||||||||||||||
| Income taxes |
13,098 | 11,484 | 10,226 | 9,305 | 10,261 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net income |
$ | 31,737 | $ | 29,763 | $ | 27,560 | $ | 27,030 | $ | 28,996 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Other comprehensive income (loss), net of taxes |
4,491 | 16,620 | 338 | (21,188 | ) | (398 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Comprehensive income |
$ | 36,228 | $ | 46,383 | $ | 27,898 | $ | 5,842 | $ | 28,598 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net income applicable to common shares |
$ | 31,737 | $ | 29,763 | $ | 27,560 | $ | 27,030 | $ | 28,996 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Adjusted net income used in diluted EPS calculation |
$ | 31,737 | $ | 29,763 | $ | 27,560 | $ | 27,030 | $ | 28,996 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Weighted-average common shares outstanding - basic |
109,245 | 109,138 | 108,769 | 108,807 | 108,793 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Weighted-average common shares outstanding - diluted |
109,246 | 109,139 | 108,770 | 108,808 | 108,794 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Basic net income per share |
$ | 0.29 | $ | 0.27 | $ | 0.25 | $ | 0.25 | $ | 0.27 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Diluted net income per share |
$ | 0.29 | $ | 0.27 | $ | 0.25 | $ | 0.25 | $ | 0.27 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Page 10
FirstMerit Corporation Reports Third Quarter 2011 EPS Results
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)
(In thousands, except ratios)
| Quarterly Periods | Annual Period | |||||||||||||||||||||||
| September 30, 2011 |
June 30, 2011 |
March 31, 2011 |
December 31, 2010 |
September 30, 2010 |
December 31, 2010 |
|||||||||||||||||||
| Allowance for Credit Losses |
||||||||||||||||||||||||
| Allowance for noncovered loan losses, beginning of period |
$ | 109,187 | $ | 114,690 | $ | 114,690 | $ | 116,528 | $ | 118,343 | $ | 115,092 | ||||||||||||
| Provision for noncovered loan losses |
14,604 | 10,138 | 17,018 | 19,816 | 18,108 | 83,783 | ||||||||||||||||||
| Charge-offs |
20,014 | 20,958 | 22,812 | 27,553 | 25,817 | 104,532 | ||||||||||||||||||
| Recoveries |
5,410 | 5,317 | 5,794 | 5,899 | 5,894 | 20,347 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net charge-offs |
14,604 | 15,641 | 17,018 | 21,654 | 19,923 | 84,185 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Allowance for noncovered loan losses, end of period |
$ | 109,187 | $ | 109,187 | $ | 114,690 | $ | 114,690 | $ | 116,528 | $ | 114,690 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Reserve for unfunded lending commitments, beginning of period |
$ | 5,799 | $ | 7,202 | $ | 8,849 | $ | 7,864 | $ | 6,812 | $ | 5,751 | ||||||||||||
| Provision for / (relief of) credit losses |
561 | (1,403 | ) | (1,647 | ) | 985 | 1,052 | 3,098 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Reserve for unfunded lending commitments, end of period |
$ | 6,360 | $ | 5,799 | $ | 7,202 | $ | 8,849 | $ | 7,864 | $ | 8,849 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Allowance for Credit Losses |
$ | 115,547 | $ | 114,986 | $ | 121,892 | $ | 123,539 | $ | 124,392 | $ | 123,539 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Ratios (a) |
||||||||||||||||||||||||
| Provision for loan losses as a % of average loans |
0.79 | % | 0.57 | % | 0.99 | % | 1.14 | % | 1.06 | % | 1.23 | % | ||||||||||||
| Provision for / (relief of) credit losses as a % of average loans |
0.03 | % | -0.08 | % | -0.10 | % | 0.06 | % | 0.06 | % | 0.05 | % | ||||||||||||
| Net charge-offs as a % of average loans |
0.79 | % | 0.89 | % | 0.99 | % | 1.25 | % | 1.17 | % | 1.23 | % | ||||||||||||
| Allowance for loan losses as a % of period-end loans |
1.46 | % | 1.51 | % | 1.64 | % | 1.65 | % | 1.72 | % | 1.65 | % | ||||||||||||
| Allowance for credit losses as a % of period-end loans |
1.55 | % | 1.59 | % | 1.74 | % | 1.78 | % | 1.84 | % | 1.78 | % | ||||||||||||
| Allowance for loan losses as a % of nonperforming loans |
160.09 | % | 150.31 | % | 138.67 | % | 109.56 | % | 111.00 | % | 109.56 | % | ||||||||||||
| Allowance for credit losses as a % of nonperforming loans |
169.42 | % | 158.30 | % | 147.38 | % | 118.01 | % | 118.49 | % | 118.01 | % | ||||||||||||
| Asset Quality (a) |
||||||||||||||||||||||||
| Impaired loans: |
||||||||||||||||||||||||
| Nonaccrual |
$ | 59,928 | $ | 63,688 | $ | 71,246 | $ | 89,828 | $ | 91,646 | $ | 89,828 | ||||||||||||
| Other nonperforming loans: |
||||||||||||||||||||||||
| Nonaccrual |
8,275 | 8,951 | 11,460 | 14,859 | 13,331 | 14,859 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total nonperforming loans |
68,203 | 72,639 | 82,706 | 104,687 | 104,977 | 104,687 | ||||||||||||||||||
| Other real estate (“ORE”) |
22,172 | 27,207 | 30,053 | 18,815 | 10,290 | 18,815 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total nonperforming assets (“NPAs”) |
$ | 90,375 | $ | 99,846 | $ | 112,759 | $ | 123,502 | $ | 115,267 | $ | 123,502 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| NPAs as % of period-end loans + ORE |
1.21 | % | 1.38 | % | 1.61 | % | 1.78 | % | 1.70 | % | 1.78 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Past due 90 days or more & accruing interest |
$ | 6,268 | $ | 10,424 | $ | 5,652 | $ | 22,017 | $ | 36,895 | $ | 22,017 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| (a) | Excludes acquired loans and loss share receivable with a period end balance of $1.6 billion, $1.7 billion, $2.1 billion, $2.3 billion, and $2.5 billion and ORE covered by an FDIC loss share with a period end balance of $61.9 million, $58.5 million, $58.7 million, $54.7 million and $53.5 million at September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010 and September 30, 2010, respectively, which, as required by current accounting guidance, were recorded at fair value on the date of acquisition. |
Page 11
FirstMerit Corporation Reports Third Quarter 2011 EPS Results
NONINTEREST INCOME AND NONINTEREST EXPENSE DETAIL
(Unaudited)
(In thousands)
| QUARTERLY OTHER INCOME DETAIL | 2011 3rd Qtr |
2011 2nd Qtr |
2011 1st Qtr |
2010 4th Qtr |
2010 3rd Qtr |
|||||||||||||||
| Trust department income |
$ | 5,607 | $ | 5,863 | $ | 5,514 | $ | 5,627 | $ | 5,469 | ||||||||||
| Service charges on deposits |
17,838 | 15,712 | 14,910 | 15,938 | 16,859 | |||||||||||||||
| Credit card fees |
13,640 | 13,510 | 12,207 | 12,678 | 12,532 | |||||||||||||||
| ATM and other service fees |
3,801 | 3,063 | 2,917 | 2,910 | 2,996 | |||||||||||||||
| Bank owned life insurance income |
3,182 | 3,015 | 5,241 | 3,192 | 3,219 | |||||||||||||||
| Investment services and insurance |
1,965 | 1,972 | 2,447 | 2,300 | 2,688 | |||||||||||||||
| Investment securities gains, net |
4,402 | 889 | — | 146 | 58 | |||||||||||||||
| Loan sales and servicing income |
1,036 | 2,609 | 5,012 | 9,221 | 4,006 | |||||||||||||||
| Other operating income |
9,301 | 4,858 | 4,508 | 2,299 | 7,308 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Other Income |
$ | 60,772 | $ | 51,491 | $ | 52,756 | $ | 54,311 | $ | 55,135 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| QUARTERLY OTHER EXPENSES DETAIL | 2011 3rd Qtr |
2011 2nd Qtr |
2011 1st Qtr |
2010 4th Qtr |
2010 3rd Qtr |
|||||||||||||||
| Salaries, wages, pension and employee benefits |
$ | 61,232 | $ | 56,713 | $ | 59,871 | $ | 62,331 | $ | 58,930 | ||||||||||
| Net occupancy expense |
8,464 | 8,086 | 8,594 | 9,236 | 8,608 | |||||||||||||||
| Equipment expense |
7,073 | 6,816 | 6,836 | 7,549 | 7,330 | |||||||||||||||
| Taxes, other than federal income taxes |
1,507 | 922 | 1,960 | 2,021 | 1,680 | |||||||||||||||
| Stationery, supplies and postage |
2,517 | 2,750 | 2,705 | 3,183 | 2,865 | |||||||||||||||
| Bankcard, loan processing and other costs |
8,449 | 8,266 | 7,562 | 7,810 | 8,281 | |||||||||||||||
| Advertising |
2,391 | 2,287 | 2,384 | 3,094 | 2,488 | |||||||||||||||
| Professional services |
5,732 | 5,940 | 5,793 | 7,731 | 8,544 | |||||||||||||||
| Telephone |
1,570 | 1,462 | 1,486 | 1,579 | 1,561 | |||||||||||||||
| Amortization of intangibles |
543 | 543 | 543 | 1,006 | 1,006 | |||||||||||||||
| FDIC expense |
3,240 | 4,581 | 4,366 | 4,342 | 5,267 | |||||||||||||||
| Other operating expense |
13,239 | 11,702 | 12,345 | 12,570 | 14,110 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Other Expenses |
$ | 115,957 | $ | 110,068 | $ | 114,445 | $ | 122,452 | $ | 120,670 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Page 12
FirstMerit Corporation Reports Third Quarter 2011 EPS Results
FIRSTMERIT CORPORATION AND SUBSIDIARIES
ALLOWANCE FOR NONCOVERED LOAN LOSSES - Net Charge-off Detail
(Unaudited)
(Dollars in thousands)
| Quarters ended | Year ended | Nine months ended | ||||||||||||||||||
| September 30, | December 31, | September 30, | ||||||||||||||||||
| 2011 | 2010 | 2010 | 2011 | 2010 | ||||||||||||||||
| Allowance for noncovered loan losses - beginning of period |
$ | 109,187 | $ | 118,343 | $ | 115,092 | $ | 114,690 | $ | 115,092 | ||||||||||
| Loans charged off: |
||||||||||||||||||||
| Commercial |
8,382 | 10,704 | 39,766 | 24,525 | 26,541 | |||||||||||||||
| Mortgage |
771 | 1,153 | 5,156 | 3,786 | 4,194 | |||||||||||||||
| Installment |
5,911 | 8,154 | 34,054 | 20,204 | 25,389 | |||||||||||||||
| Home equity |
1,929 | 1,923 | 7,912 | 6,200 | 6,754 | |||||||||||||||
| Credit cards |
1,520 | 2,902 | 13,577 | 6,135 | 11,080 | |||||||||||||||
| Leases |
651 | 55 | 896 | 778 | 692 | |||||||||||||||
| Overdrafts |
850 | 926 | 3,171 | 2,156 | 2,329 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
20,014 | 25,817 | 104,532 | 63,784 | 76,979 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Recoveries: |
||||||||||||||||||||
| Commercial |
717 | 503 | 1,952 | 1,853 | 1,305 | |||||||||||||||
| Mortgage |
74 | 138 | 263 | 192 | 201 | |||||||||||||||
| Installment |
3,361 | 3,946 | 13,047 | 10,749 | 9,044 | |||||||||||||||
| Home equity |
466 | 481 | 1,599 | 1,255 | 1,182 | |||||||||||||||
| Credit cards |
585 | 600 | 2,199 | 1,789 | 1,681 | |||||||||||||||
| Manufactured housing |
14 | 36 | 156 | 63 | 122 | |||||||||||||||
| Leases |
1 | 2 | 267 | 35 | 240 | |||||||||||||||
| Overdrafts |
192 | 188 | 864 | 585 | 673 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
5,410 | 5,894 | 20,347 | 16,521 | 14,448 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net charge-offs |
14,604 | 19,923 | 84,185 | 47,263 | 62,531 | |||||||||||||||
| Provision for noncovered loan losses |
14,604 | 18,108 | 83,783 | 41,760 | 63,967 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Allowance for noncovered loan losses - end of period |
$ | 109,187 | $ | 116,528 | $ | 114,690 | $ | 109,187 | $ | 116,528 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Average loans (a) |
$ | 7,298,446 | $ | 6,781,123 | $ | 6,818,962 | $ | 7,115,222 | $ | 6,802,363 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Ratio to average loans (a): |
||||||||||||||||||||
| (Annualized) net charge-offs |
0.79 | % | 1.17 | % | 1.23 | % | 0.89 | % | 1.23 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (Annualized) provision for loan losses |
0.79 | % | 1.06 | % | 1.23 | % | 0.78 | % | 1.26 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Loans, period-end (excluding acquired loans) (a) |
$ | 7,453,612 | $ | 6,776,098 | $ | 6,937,142 | $ | 7,453,612 | $ | 6,776,098 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Allowance for credit losses (a): |
$ | 115,547 | $ | 124,392 | $ | 123,539 | $ | 115,547 | $ | 124,392 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| As a multiple of (annualized) net charge-offs |
1.99 | 1.57 | 1.47 | 1.83 | 1.49 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Allowance for loan losses (a): |
||||||||||||||||||||
| As a percent of period-end loans |
1.46 | % | 1.72 | % | 1.65 | % | 1.46 | % | 1.72 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| As a multiple of (annualized) net charge-offs |
1.88 | 1.47 | 1.36 | 1.73 | 1.39 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (a) | Excludes acquired loans and loss share receivable. |
Page 13